Vol.

3, Issue V, Pages 54, March 2011

 From the Executive Director’s desk
Given that the budget has managed
to strike a balance rather than being a
populist one, the markets have given
the Union Budget 2011-12 a thumbs up.
If one begins by taking a broader view,
the budget is well composed with many
factors that provide a pointer to the health
of the economy from a macroeconomic
perspective. The positive element stems
from the fact that the government seems
to be more focused on resolving the
supply side issues in the economy to
avoid the event of a perennial demand-
supply mismatch. This clearly reflects
in the incremental allocation to the rural
development fund and rise in the agri-
credit to give an impetus to agri growth.
Also, the budget is clearly banking on robust underlying growth in
the economy and expects GDP to grow by 14 percent in nominal
terms in FY12E to drive revenue. The budget has also increased
revenue visibility by widening the net for various products and
services. On the other hand, it has managed to support the
consumption growth in the economy resisting roll backs in excise
duty or service tax rates while increasing the individual exemption
limits and reduction in surcharge on corporate tax rate by 250 bps.
If I were to highlight some of the hits one could think of fiscal
deficit containment, the divestment target, reduction in surcharge
on domestic corporates and FIIs being allowed to invest in
domestic mutual funds among others. The misses would be
failure to decide modalities on infra funds, concrete steps on FDI
in retail and the amnesty to root out black money.
If one looks at individual sectors, the budget was positive for
sectors like automobiles (unchanged excise duty and incentive
for hybrid vehicles), banks (recapitalisation of PSUs), logistics
(thrust on warehousing facilities), power (extension of 80IA),
FMCG (focus on agri products and increase in subsidy for
farmers), cement (reduction in duty on petcoke and gypsum) and
construction (increased allocation to infra and thrust on higher
investment). However, the budget appeared to be negative for
56 ICICIdirect
l  Money Manager
 March 2011

sectors like textiles (mandatory duty on branded garments),

metals (higher export duty on iron ore), hospital, hotels and
aviation (widening service tax and hike in excise duty). Also, it
remained a non-event for certain sectors like IT, telecom, capital
goods, media, retail and pharma.
Now looking at the budget from an individual’s perspective, the
tax slabs have been broadened, thus providing greater relief to
individual tax payers. However, the greatest advantage is for
senior citizens (60 years and above) and very senior citizens (80
years and above).
Another positive move is that the government is laying greater
focus on long-term investments and has thus enhanced the terms
of the New Pension System (NPS). Greater emphasis has been
laid on making investment in retirement products more popular.
Retirement reforms will ensure that the government is able to
manage their expenditure better in future. At the same time, this
is a good opportunity for individuals to review and structure their
retirement plans.
Health insurance may become more expensive as it has been
proposed to bring all hospital bills into the service tax net. This
though is being reviewed.
The macroeconomic environment, events and changes play
a major role in determining the course of the markets, and
therefore your investments. As an investor, it is important for us
to understand and track key macro economic indicators like GDP,
inflation, deficit etc and review their impact on the investments.
But more importantly do not lose focus of your life goals;
irrespective of the broader environment make sure that your
investments are aligned to achieve you goals and not just saving
tax, for example.
Through our website www.icicidirect.com and this magazine we
want to make an earnest attempt to partner with you in setting
and achieving your financial goals. Do walk into any of your
Neighbourhood Financial Superstore and talk to us.

ICICIdirect Money Manager l 1

 March 2011

EDITORIAL
With the announcement of the Budget for 2011-12, we have
almost come to the end of this financial year. The Budget 2011
was a balanced budget by the Finance Minister. There were
lesser-than-expected measures that would have gained the
attention of the people at large. Though a closer look indicates
that the budget is all around, giving a sustainable growth to our
economy. There are specific measures on improving the key
drivers of our economy like rural development, supply chain
infrastructure and increasing affordability.
We all look forward to a new and exciting year 2011-12 and we
thought what better than to start the year with some basics. So,
in this issue of ICICIdirect Money Manager, we have covered
and explained some of the key macro economic indicators that
impact the performance of the markets. This will help you get a
bird’s eye view of the workings of the economy and thus assist
you in taking informed investment decisions. Of course, there is
detailed analysis of the budgets for you and how it will impact
various sectors that you may have invested in. Additionally, this
edition features an interview with the director general of CII,
Chandrajit Banerjee, wherein he talks about the macroeconomic
factors that affect India.
So get the big picture right… and do let us know your thoughts
at moneymanager@icicisecurities.com

Editor & Publisher : Abhishake Mathur (CFP CM)

Coordinating Editor : Zam Jose
Editorial Board : Pankaj Pandey, Sameer Chavan
Editorial Team : Amit Gupta, Azeem Ahmad, Dharmesh Shah, Nitin Kunte, Purnendu Jha,
Rashmi Singh, Sachin Jain, Sheetal Ashar, Varun Shah, Viraj Gandhi

2 ICICIdirect
l  Money Manager
 March 2011

COnTEnTs
From the Executive Director’s desk .....................................................1

Editorial ..................................................................................................2

Contents .................................................................................................3

news ......................................................................................................4

Markets round-up ..................................................................................5

Technical Outlook ..................................................................................9

Derivatives View ..................................................................................11

Top Pick ................................................................................................14

Budget 2011 .........................................................................................16

Tête-à-tête ............................................................................................ 19
Interview with Chandrajit Banerjee, director general,
Confederation of Indian Industries (CII)

Query Corner........................................................................................24

Flavour of the Month - Macro Indicators ...........................................25

Here we demystify some of the macroeconomic
indicators that can have a bearing on your
investments.

Product Focus ......................................................................................30

Financial Planning ................................................................................33

Mutual Fund Fact sheet ......................................................................38

Model portfolio ....................................................................................49

Important:
All the contents of ICICIdirect Money Manager are the exclusive property of
ICICI securities Ltd. no article, either in whole or in part, may be published
circulated or distributed through any medium without the express consent
of ICICI securities Ltd.

ICICIdirect Money Manager l 3

 March 2011
nEWs
Loop offers to surrender its 2G licence
Loop Telecom, one of the beneficiaries of 2G spectrum allocation
scam, has offered to surrender its license. On March 9, the
company made an offer in the Supreme Court to auction its
licence along with its spectrum for 21 circles, which it allegedly
acquired through undue favour by former telecom minister A.
Raja. In an affidavit to the SC, Loop’s counsel Ariama Sundaram
proposed to the two-judge bench that the government auction
Loop’s license in an open and unrestricted auction. The counsel
also said that in order to prove the bonafide intentions of Loop,
it be also given a right to match the highest offer received by the
government so as to allow Loop an opportunity to preserve the
investments it has already made in setting up the business.
Courtesy: India Today
Feb exports rise fastest in 11 months
Indian exports in February provisionally rose by a half, the fastest
in 11 months, and the trade secretary forecast Asia’s third-
largest economy to improve on its targets for overseas sales
and current account deficits. Exports rose to $23.6 billion in
February, powered by engineering goods, petroleum products
and electronics, and were on track to hit up to $235 billion in the
year to end-March, Rahul Khullar told reporters on March 10.
The surge could help guide the country’s current account deficit
(CAD) to 2.5-2.8 percent of the GDP in the year to end-March,
Khullar said, a figure narrower than the central bank’s projection
of 3.5 percent, which many officials warn is not sustainable. The
trade secretary released the figures ahead of their official release
in April, and stressed the data could change.
Courtesy: Livemint.com
Dalai Lama to step down as Tibetan political leader
The Dalai Lama says he is about to give up his political role
and turn over those responsibilities to the elected leader of the
Tibetan government-in-exile. The revered spiritual leader made
the announcement on March 10 in a speech in Dharmsala,
marking the anniversary of a 1959 Tibetan uprising against
Chinese rule. The Nobel Peace laureate will retain his role as
spiritual leader of the Tibetan people. He said that he was acting
to benefit the Tibetan people and that he would introduce
constitutional amendments when the exile parliament convenes
its new session.
Courtesy: VOA News
4 ICICIdirect
l  Money Manager
 March 2011
Markets in range with negative bias on rising crude
Markets across the globe
started February 2011 on a
positive note but remained
range bound. While positive
news flow from the US took
the tech-heavy Nasdaq to
its best closing level in over
three years, the Dow and the
S&P 500 rose to new two-year
MARKETs ROUnD-UP
consolidation while there were
no major negatives in sight for
companies. Crude oil (Nymex)
rose by 12.35 percent in end-
February on account of Libyan
unrest. In February it traded in
the range of $84-98.
12500

highs in the middle of February.

12250

12000

However, unrest in the Middle 11750

East-North African region (more 11500

1-Feb-11

3-Feb-11

5-Feb-11

7-Feb-11

9-Feb-11

11-Feb-11

13-Feb-11

15-Feb-11

17-Feb-11

19-Feb-11

21-Feb-11

23-Feb-11

25-Feb-11

27-Feb-11
prominently in Libya) arrested Dow Jones Index

the gains and the global Source: ICICIdirect.com Research, Bloomberg

indices witnessed a minor
correction. Within emerging 2900
2850

markets, Shanghai and Nikkei 2800

2750

rebounded and closed higher

2700
2650
2600

by 3.8 percent in February while 2550

2500
1-Feb-11

3-Feb-11

5-Feb-11

7-Feb-11

9-Feb-11

11-Feb-11

13-Feb-11

15-Feb-11

17-Feb-11

19-Feb-11

21-Feb-11

23-Feb-11

25-Feb-11

27-Feb-11
Indian markets were range-
bound with a negative bias. Nasdaq Index

Source: ICICIdirect.com Research, Bloomberg

Indian markets continued to
witness selling by FIIs. On 1400

the last leg of the earnings, 1350

companies like Lanco Infratech 1300

and Adani Power missed the

1250

1200

Street estimates while Tata

11-Feb-11

13-Feb-11

15-Feb-11

17-Feb-11

19-Feb-11

21-Feb-11

23-Feb-11

25-Feb-11

27-Feb-11
1-Feb-11

3-Feb-11

5-Feb-11

7-Feb-11

9-Feb-11

Motors delivered stellar results. S&P 500 Index

IIP growth for December came Source: ICICIdirect.com Research, Bloomberg

in at 1.6 percent. Food inflation
remained at elevated levels 6200

(more than 13 percent). Q3FY11 6000

5800

GDP growth came in at 8.2 5600

5400

percent. Railway Budget 2011 5200

had a populist undertone to

5000
11-Feb-11

13-Feb-11

15-Feb-11

17-Feb-11

19-Feb-11

21-Feb-11

23-Feb-11

25-Feb-11

27-Feb-11
1-Feb-11

3-Feb-11

5-Feb-11

7-Feb-11

9-Feb-11

it. The Union Budget 2011 FTSE Index

followed the path of fiscal Source: ICICIdirect.com Research, Bloomberg

ICICIdirect Money Manager l 5

 March 2011
MARKETs ROUnD-UP
7600
Global markets
7400 US economic data continued
7200
to be positive. The Institute
7000
for Supply Management
- Chicago noted that the
1-Feb-11

3-Feb-11

5-Feb-11

7-Feb-11

9-Feb-11

11-Feb-11

13-Feb-11

15-Feb-11

17-Feb-11

19-Feb-11

21-Feb-11

23-Feb-11

25-Feb-11

27-Feb-11
DAX Index Chicago business barometer
Source: ICICIdirect.com Research, Bloomberg rose to 68.8 in January 2011
from 66.8 in December 2010
11000
10900
with a reading above 50,
thus indicating growth. The
10800
10700
10600

report said consumer credit

10500
10400
10300
10200
10100
10000
9900
increased by $6.1 billion
in December following an
11-Feb-11

13-Feb-11

15-Feb-11

17-Feb-11

19-Feb-11

21-Feb-11

23-Feb-11

25-Feb-11

27-Feb-11

1-Mar-11
1-Feb-11

3-Feb-11

5-Feb-11

7-Feb-11

9-Feb-11

Nikkie Index
upwardly revised $2.0 billion
Source: ICICIdirect.com Research, Bloomberg increase in November. On the
US economic front, jobless
4300 claims came in at their lowest
4100
level since July 2008. The Fed
3900
raised its 2011 GDP growth
expectations to a range of 3.4-
3700

3500

3.9 percent. The Commerce

11-Feb-11

13-Feb-11

15-Feb-11

17-Feb-11

19-Feb-11

21-Feb-11

23-Feb-11

25-Feb-11

27-Feb-11
1-Feb-11

3-Feb-11

5-Feb-11

7-Feb-11

9-Feb-11

CAC 40 Index
Department reported that the
Source: ICICIdirect.com Research, Bloomberg housing rate showed a jump of
14.6 percent to an annual rate
of 596,000 in January 2011.
25000

24000

23000
US existing home sales rose
2.7 percent to an annual rate
22000

21000

20000
of 5.36 million in January 2011
1-Mar-11
1-Feb-11

3-Feb-11

5-Feb-11

7-Feb-11

9-Feb-11

11-Feb-11

13-Feb-11

15-Feb-11

17-Feb-11

19-Feb-11

21-Feb-11

23-Feb-11

25-Feb-11

27-Feb-11

HANG SENG
from a downwardly revised
Source: ICICIdirect.com Research, Bloomberg 5.22 million in December 2010.
European Indices were flat
3500
3000
with the FTSE increasing by
2500
2000
0.6 percent while the CAC and
1500
1000
DAX gained 0.9 percent and
500
0
1.2 percent in February. The
ECB kept rates unchanged
1-Mar-11
1-Feb-11

3-Feb-11

5-Feb-11

7-Feb-11

9-Feb-11

11-Feb-11

13-Feb-11

15-Feb-11

17-Feb-11

19-Feb-11

21-Feb-11

23-Feb-11

25-Feb-11

27-Feb-11

Shanghai Index at 1 percent. Dow Jones and

Source: ICICIdirect.com Research, Bloomberg S&P remained range-bound

6 ICICIdirect
l  Money Manager
 March 2011
MARKETs ROUnD-UP
during February 2011 gaining For February 2011, Sensex
1.5 percent each (after gaining and Nifty declined 1.5 percent
1.9 percent and 1.1 percent, and 1.1 percent, respectively.
respectively, during January) The CNX Midcap was down
while Nasdaq gained 1.1 5.22 percent and BSE Small
percent. The Hang Seng Cap Index lost 6.44 percent on
declined marginally by 0.6 month-on-month basis. BSE
percent. Shanghai SSEC and Oil and Gas and BSE Bankex
the Japanese Nikkei registered outperformed the broader
an increase of 3.8 percent markets and delivered 4.1
and 3.4 percent, respectively. percent and 3.6 percent re-
China hiked its interest rate turns respectively, while Re-
alty, Power and Capital Goods
by 25 bps in the middle of
were the key underperformers
February.
in February 2011.
18600
18400
18200 The top gainers from Sensex
components were Reliance
18000
17800

Industries (10.42 percent), ITC

17600
17400
17200
17000
16800 (8.51 percent) and Bajaj Auto
(7.04 percent) while compa-
11-Feb-11

13-Feb-11

15-Feb-11

17-Feb-11

19-Feb-11

21-Feb-11

23-Feb-11

25-Feb-11

27-Feb-11

1-Mar-11
1-Feb-11

3-Feb-11

5-Feb-11

7-Feb-11

9-Feb-11

SENSEX nies that lost ground were Re-

Source: ICICIdirect.com Research, Bloomberg liance Communications (26.02
percent), Reliance Infrastruc-
ture (9.64 percent) and Hin-
5600

5500
5400
5300
dalco (8.35 percent). From the
5200
CNX Midcap index, Welspun
Corp (28.61 percent), HDIL
5100

5000

(25.95 percent) and Moth-

1-Mar-11
1-Feb-11

3-Feb-11

5-Feb-11

7-Feb-11

9-Feb-11

11-Feb-11

13-Feb-11

15-Feb-11

17-Feb-11

19-Feb-11

21-Feb-11

23-Feb-11

25-Feb-11

27-Feb-11

NIFTY
erson Sumi (13.35 percent)
Source: ICICIdirect.com Research, Bloomberg led the gainers. On the other
hand, Deccan Chronicle (35.86
Domestic markets percent), MphasiS (34 percent)
In February 2011, provisional and Punj Lloyd (33.72 percent)
figures show FIIs were net sell- were at the losing end.
ers to the tune of ` 7,530 crore. Outlook
MFs bought shares worth `
1,427 crore while insurance The markets gave thumbs up
companies were net buyers to to the Union Budget and ral-
the tune of ` 4,277 crore in our lied about 5 percent after Feb-
equities. ruary 28, 2011. We are con-

ICICIdirect Money Manager l 7

 March 2011

tinuously witnessing supply back. At the higher end, if we

coming in at higher levels, and
markets seem unable to ab-
sorb it, again pulling it down.
For the near term, so long as
we can hold on to the 5,400-
5,350 zone, we can expect
our markets to keep bouncing
can sustain above 5,600-5,650,
we can expect higher levels.
Hence, one needs to watch
this tight range of 5,350-5,650.
If it breaks on either side, vola-
tility will increase.

Indices 1-Feb-11 28-Feb-11 Change

Us markets
Dow Jones 12040.2 12226.3 1.5%
S&P 500 1307.6 1327.2 1.5%
Nasdaq 2751.2 2782.3 1.1%
European markets
UK FTSE 5957.8 5994.0 0.6%
German DAX 7184.3 7272.3 1.2%
French CAC 4072.6 4110.4 0.9%
Asian markets
Japan Nekkei 10274.5 10624.1 3.4%
Hong Kong Hangseng 23483.0 23338.0 -0.6%
Shangai SSEC 2799.0 2905.1 3.8%
Domestic markets
BSE Sensex 18022.2 17823.4 -1.1%
NSE Nifty 5417.2 5333.3 -1.5%
Content source: ICICIdirect.com Research

8 ICICIdirect
l  Money Manager
 March 2011
Bears take breather, sensex not out of the woods yet
sensex: 17,823 / nifty: 5,333
Flashback
The indices slipped further
during early February 2011,
carrying forward the bearish
momentum from January 2011,
although they closed off the
month’s lows. The benchmark
Nifty and Sensex settled in
the red over 2.7 percent for
the month. The Nifty closed at
5,333 while the Sensex ended
lower by 504 points at 17,823.
The broader markets, however,
remained under severe
pressure as Mid-cap and Small
cap indices lost over 7 percent
during February.
Healthcare, Auto, Capital goods
and Power sector indices tanked
over 7-8 percent each while
FMCG was the only sector to
end in the green territory.
Technical outlook
Sensex declined during the
first half of February to test
lows of 17,295. However, it
subsequently recovered over
1,400 points from the lows
before retreating lower again.
The action resulted in ‘Spinning
Top’ candlestick pattern. While
the lower shadow indicates
TECHnICAL OUTLOOK
supporting action, occurrence
of this pattern against the back
drop of giant ‘Bearish engulfing
line’ formed during January
2011 suggests temporal rally
which is viewed as a correction
of the January 2011 fall.
Medium-term trend in the index
is down as long as it remains
below 19,000 levels. Sensex is
likely to face crucial resistance
in the range of 18,700-19,000
levels which is marked by:
1. Convergence of 50 & 200
day EMA around 18,700
2. 50 percent retracement of
the January 2011 fall about
18,985
3. Per wave structure price
equality of current up move
from lows of 17,700 will
work out to 18,865.
On the flip side, Sensex has
important supports, first at
17,300 (recent lows) and then
at 16,800 levels (lows of June
2010).
RSI on daily time frame is
placed in the positive territory
and supports bullish statement.
However, the weekly and
monthly oscillators are trending
down and indicate that the
ICICIdirect Money Manager l 9
 March 2011
current upward move may not
be a structural rally.
In a nut shell, Sensex is expected
to correct the January 2011 fall
in a tepid manner and trading
during March can be painful
as the index is maturing in its
10 ICICIdirect
l  Money Manager
TECHnICAL OUTLOOK
corrective phase. However,
once this correction is over,
then the index is expected
to turn lower in an impulsive
manner with medium-term
targets in the range of 16,800-
16,500 levels.
 March 2011
DERIVATIVEs VIEW
February expiry in chaos on low rollovers
Mounting tension in Libya, oil prices going above $100 a
barrel, and a humungous sell of $600 million by FIIs ensured
nifty seeing a selling frenzy on the expiry day. February series
saw the highest ever F&O turnover of ` 277,277 crore. The
trend for the market was secular, nifty opened below the
VWAP level and continued to diverge from that level, finally
closing 175 points below at 5,263 (6 percent cut) from January
expiry. This does not come as a surprise. We had stated in the
last report that if rollovers in large caps don’t pick up then
we are in for a nervous expiry, and the similar thing occurred.
The nifty rollover was at 64.79 percent (Vs 3M avg of 64.23
percent & 6M avg of 68.12 percent), the second-lowest percent
rollover figure since June 2009. Market-wide rollover, was also
lowest in the last one year at 82.79 percent (Vs 3M avg of 83.66
percent and 6M avg of 84.51 percent).
Rollover snapshot
January December november
Market wide rollover (%) 82.79 83.64 85.49
Nifty Rollover (%) 64.79 66.71 75.04
Nifty Rollover cost (%) 0.32 0.23 0.83
Futures and Options build-up of 5.7 million shares and 5,400
for March series strike with a base of 4.88
Nifty March series kicks off million shares. On the Call
with a base of just 22.93 side, 5,500 Call has the highest
million shares (whereas it OI of 3.94 million shares,
was 19.44 million shares in closely followed by 5,500
the beginning of February Call with 3.04 million shares.
and 19.06 million shares The impression from sudden
were seen in the beginning data weakness suggests
of the January series). March some more downsides for the
series option data started on market with India VIX at 28.2;
a nervous footing (similar to expect initial trading sessions
start of February series) with of March series to be volatile
5,300 as highest Put OI Base and nervy.
ICICIdirect Money Manager l 11
 March 2011
DERIVATIVEs VIEW
OI build-up in current and mid report, banking heavy weights
series like SBI, PNB, Axis Bank and
Milli o
ns OI (in millions) 5,550 HDFC Bank did not see any
5,500 pick up in rollover activity on
5,450
the last day as well (clocking

22.9
5,400
close to 70 percent each). As
24.9

23.4

14.4
20.5

5,350
15.1

a result, Bank Nifty lost over

12.7
10.0

5,300
7.5
5.8

5,250 435 points to close at 10,211

18-Feb 21-Feb 22-Feb 23-Feb 24-Feb
levels. Capital goods heavy
Nifty Jan OI Nifty Feb OI Nifty Spot
weights namely LT & BHEL
sectoral highlights also saw low rollovers of close
As was highlighted in the last to 70 percent.
95 Sectoral Rollover
90
Rollover %

85
92

80
88

88
88
87
87

87

86

86

86
86

86
86

86

86
86
85

85
85

84
84

84
84

84

83
83

83
82
82
81

81
81

81
81
75

80

81

80
79

80
76
70

Automobile
Infrastructure

Oil & Gas

FMCG
Sugar

Power

Banking
Transport
Capital
Telecom

Cement
Textile
Realty

Finance
Media

Pharma

Technology
Hotels

Metals

Fertilisers
Rollover (in %) 3 M Avg

Sugar, hotels and media saw stock rollovers

rollovers of more than their High Rollover Low Rollover
3M average. Power, textile and sector Rollo- sector Rollo-
pharma saw rollovers at levels ver % ver %
similar to their 3M average. Media 95.98 Fertilisers 44.77
Cement, technology, banking, Hotels 95.29 Banking 57.89
metals and oil & gas saw Telecom 93.75 Metals 62.04
rollovers, lower than their 3M Sugar 93.67 Oil & Gas 63.81
average. Power 93.62 Automobile 64.12

sectoral rollovers Positive momentum to

continue till nifty holds 5,350
High Rollover Low Rollover
sector Rollo- sector Rollo- March series started on a
ver % ver % jittery note and made a low
Media 88.23 Fertilisers 76.45 of 5,230. Since then, Nifty
Hotels 87.87 Banking 79.34 has seen an upward move,
Telecom 87.07 Metals 80.24 gaining over 290 points (up
Sugar 86.98 Oil & Gas 80.61 5.5 percent). March series
Power 85.76 Automobile 80.73 also saw unfolding of the
12 ICICIdirect
l  Money Manager
 March 2011
Union Budget and after which
India VIX has come down
drastically to 22 (Vs. 28 near
Budget). The same is reflected
in a unidirectional movement
of Nifty. With over 3.5 percent
jump in Nifty in March 1, 2011
trading session, we expect
Nifty to take a breather and the
focus to shift to the mid-cap
space.
Taking a look at options data,
5,400 and 5,300 Put options
command the highest OI,
making these strong support
levels. On the call side, 5,600
strike has the highest call
OI, making it the immediate
resistance for the market,
throwing a range of 5400-5600
level for the Nifty. Combining
the technical parameters,
5600-5610 level is a strong
resistance zone for Nifty, as
the 50 DMA & 200 DMA lies in
this region. If Nifty takes out
this level, then we might see
short covering in 5,600 call
strike, which can pull Nifty to
5,685 levels (which is the 50
percent retracement of the fall
from 6,181 levels to 5,177).
India VIX is also setting a
positive tone for the market as
it has cooled over 25 percent
and is near 22 levels (lowest
level since January 27, 2011).
DERIVATIVEs VIEW
If India VIX continues to trade
in the range of 19-25, it will
set a positive to range-bound
undertone for the market.
However, a breach of 25 levels
may push Nifty below 5,300
levels.
The above said positive
under-current may be upset
by the inflation scenario in
addition to rising crude prices
and continuing geo-political
tensions in the Middle East
and North African region. If the
unrest spreads out from Libya
to the Middle East, then the
contagion fear can take crude
above recent highs, and this is
extremely negative for India.
On the sectoral front, all
sectors have seen big uptick
post-Budget session. The
strongest of moves were
seen in the banking and
auto spaces, which also saw
positive announcements in
the Budget. As these sectors
have already seen a sharp run-
up, fresh long positions can be
taken in the mid-cap banking
space in stocks like Dena
Bank, Syndicate Bank and
IOB, which not only saw short
rollovers but also saw positive
announcements in terms of
recapitalisation.
ICICIdirect Money Manager l 13
 March 2011 TOP PICK

LUPIn
Company background prescription. Lupin is an early entrant
Lupin is an innovation-led trans-na- in the Japanese generic market. It is
tional pharmaceutical company, pro- planning to shift API requirement for
ducing a wide range of generic for- the Japanese market to India in FY12
mulations and APIs for the developed and to complete manufacturing activ-
and developing markets. Lupin’s ities for formulation in FY13, and this
range of finished products includes will improve margins.
anti-tuberculosis, cephalosporin, car- Lupin is one of the best working capi-
diovascular, anti-asthma, non-steroi- tal managed company in India. The
dal and anti-inflammatory. management has guided for about
Investment rationale 75-100 bps improvement in the
Lupin has strong presence in the US EBITDA margins on account of niche
market in both branded and generic launches in both the exports and do-
space. In Q3FY11, the sales from mestic markets.
branded business witnessed de- Valuation
growth due to reduction in inventory Lupin is currently trading at ` 397, i.e.
days at its customers, but it will be 16.5x of FY12E EPS of ` 24 and 14.2x
normalised going forward. As Both of FY13E EPS of ` 27.9. We expect
Antara and Suprax sales are picking sales, EBITDA and profits to grow at
up, we believe de-growth in brand- a CAGR of 20%, 22% and 22% be-
ed business will be arrested in due tween FY10-13E, respectively. We
course. Similarly, the launch of Aller- maintain our stance on Lupin that the
nase in FY12 will boost the branded company justifies higher multiple on
business sales further. account of its performance in the US
On the generics front, the company is generic and branded space, perform-
planning to launch 10-12 products. It ance in other geographies including
is targeting to file around 60 ANDAs India, superior working capital capa-
with the USFDA in the next 3-4 years. bilities and management vision. We
It has emerged as the 5th largest value the company at 19x FY13E EPS
generic player in the US in terms of of ` 27.9, i.e. ` 530.
(` crore)
FY09 FY10 FY11E FY12E FY13E
Net sales 3776 4741 5726 6937 8251
EBITDA 649 979 1215 1496 1788
Net Profit 502 682 885 1070 1245
EPS (`) 12.1 15.3 19.8 24.0 27.9
PE (x) 32.8 26.0 20.0 16.5 14.2
Price to Book (x) 11.5 6.9 5.3 4.1 3.3
RoNW (%) 35.6 27.3 27.1 25.6 23.8
RoCE(%) 23.6 22.4 23.3 23.8 24.8

14 ICICIdirect
l  Money Manager
 March 2011 TOP PICK

TATA MOTORs
Company background The Indica and Indigo family has seen
Tata Motors is one of the oldest and strong resurgence as new product
the largest automobile manufactur- launches has led to imporved cus-
ers of India. It was established in tomer interest.
1945 under the former name TELCO On the JLR front, it continues to show
and started out producing commer- the hidden value of a strong brand
cial vehicles. The company remains coupled with high quality products.
the strongest commercial vehicle JLR has continued to spread to vari-
(CV) maker of India, made the foray ous geographies across the globe
into passenger car segment in 1998 like China, thereby providing able di-
with the ‘Indica’. It has continued its versification and derisking itself from
foray towards achieving excellence any major demand slowdown. JLR
through internal as well as external continues to post stellar results; in
sources (acquisitions). Amongst its Q3FY11, it reported EBITDA margins
finest acquisition so far has been the of 17.4%, cash profits of GBP 395 mil-
one of Jaguar Land Rover (JLR) at lion. JLR is expected to turn aggres-
$2.3 billion in 2008 which has com- sive and launch newer 2011 models
pletely turned around from being a to enrich its product mix further. The
laggard to one of the most profitable rise in input prices has been a con-
luxury car maker in the world. cern across the globe for car makers.
Investment rationale However, the management remains
Tata Motors is the market leader in positive on the margin maintenance
the CV segment with about 58% due to higher degree of value-added
market share and is also one of the content in JLR products.
leading domestic passenger car mak- Valuation
ers. In the CV segment, the rising We have valued the stock on an SOTP
freight rates and demand in the haul- basis. We have valued the standalone
age segment continue to be positive business at 14x FY12 EPS of ` 40.7 to
indicators for the future. We expect arrive at ` 569, JLR at 5.0x EV/EBIT-
FY12 to witness a stronger pick-up DA to arrive at ` 836 and other ma-
in infrastructure and construction- jor subsidiaries at ` 73 after the 15%
related activities. On the passenger holding company discount. We have
vehicle (PV) front, the company has also valued the investment book of
witnessed challenges emerging from the company at 0.1x BV for unquot-
the intermediate slowdown in Nano’s ed investments and market value of
volumes. However, the management quoted investments to reach ` 45 per
is confident of maintaining a healthy share and maintain our target price of
runrate for the same in the future. ` 1,523.
(` crore)
FY09 FY10 FY11E FY12E FY13E
Net sales 3776 4741 5726 6937 8251
EBITDA 649 979 1215 1496 1788
Net Profit 502 682 885 1070 1245
EPS (`) 12.1 15.3 19.8 24.0 27.9
PE (x) 32.8 26.0 20.0 16.5 14.2
Price to Book (x) 11.5 6.9 5.3 4.1 3.3
RoNW (%) 35.6 27.3 27.1 25.6 23.8
RoCE(%) 23.6 22.4 23.3 23.8 24.8

ICICIdirect Money Manager l 15

 March 2011
BUDGET 2011
Budget impact on sectors
Budget 2011 was balanced with lower-than-expected populist
measures while focusing on sustainable growth. In line with the
growth agenda, the focus was on rural development, improving
supply chain infrastructure and increasing affordability.
The Budget was positive for sectors like automobiles
(unchanged excise duty and incentive for hybrid vehicles), banks
(recapitalisation of PsUs), logistics (thrust on warehousing
facilities), power (extension of 80IA), FMCG (focus on agri-
products and increase in subsidy for farmers), cement (reduction
in duty on pet coke and gypsum) and construction (increased
allocation to infra and thrust on higher investment).
However, the Budget appeared to be negative for sectors like
textiles (mandatory duty on branded garments), metals (higher
export duty on iron ore), hospital, hotels and aviation (widening
service tax and hike in excise duty). The Budget remained a
non-event for certain sectors like IT, telecom, capital goods and
sugar while it remained neutral on sectors like media, retail and
pharma.
Auto and auto ancillary
Announcement Impact Our View

Central excise duty re- Posi- Leaving the excise duty unchanged is a good move
mains unchanged at 10% tive towards maintaining the demand momentum and
will help retain the degree of cushion among OEMs
for a further price hike in case input prices remain
firm in FY12

Reduction in excise Posi- The reduction in duties will provide a positive impe-
duty and exemption in tive tus for investments in green technology and push
customs duty for hybrid towards greater economies of scale and higher
vehicles value engineering across the sector. It will immedi-
ately benefit M&M with the recently acquired Reva
in its stable

Metals
Announcement Impact Our View
Increase in export duty on Negative This move is negative for iron ore mining compa-
iron ore (fines & lumps) to nies like Sesa Goa and NMDC. Sesa Goa exports
20% 80% of its ore to China. Hence, the increase in
the export duty will lead to a decline in the FY12E
EPS by 21%

16 ICICIdirect
l  Money Manager
 March 2011
BUDGET 2011
Aviation
Announcement Impact Our View
Hike in service tax for domes- Neutral to The government has proposed to raise the service
tic and international travel by Negative tax for domestic and international travelling, re-
` 50 and ` 250, respectively spectively. The tax on economy class of domestic
travel will increase to ` 150 from the current `
100 and ` 750 as against ` 500, for international
travel. Considering the amount, we expect the
players to pass the burden easily to travellers
Textiles
Announcement Impact Our View
Conversion of optional excise Negative Negative for branded garment players like Ray-
duty levy to a mandatory 10% mond, Zodiac, Arvind, Kewal Kiran, Provogue,
levy on branded garments or SKNL, etc. However, we believe the burden will
made-ups. However, export be shared by the company, channel partners and
of these items will not attract consumers collectively
any duty
Reduction of basic customs Negative Negative for Himatsingka Seide as ~20% of its
duty on raw silk from 30% to revenues come from the silk fabrics and silk yarn
5%
Reduction of basic customs Negative We will have to wait for clarity on the list of inter-
duty from 5% to 2.5% on cer- mediates, which are included to gauge company-
tain textile intermediates specific impact
Reduction of basic customs Neutral Prices of both Indian cotton and synthetic yarn are
duty on certain specified in- 5-10% lower than those prevailing in international
puts for manufacture of cer- markets. Hence, a 250 bps reduction in customs
tain technical fibre and yarn duty will not hurt domestic players
from 7.5% to 5%
Technology Upgradation Fund Neutral While an allocation of ` 3,100 crore will give tex-
Scheme (TUFS) allocation tile companies access to cheaper funds for their
increased from ` 2,400 crore expansion it will weigh on the balance sheet of
in the previous Budget to ` textile companies, which are already highly lever-
3,100 crore aged
Banks and nBFCs
Announcement Impact Our View
Recapitalisation of PSU banks Po s i t i v e This will enhance the CAR of banks and support
of ` 6,000 crore in FY12 for banks balance sheet growth. Banks with Tier I capital of
with low- less than 8% and government holding of 51% will
er Tier I be the key beneficiaries. From the I-direct cover-
capital age universe, key beneficiaries will be Union Bank
of India, Syndicate Bank and Dena Bank
Ticket size for housing loans Po s i t i v e This will enable HFCs to sell more of their portfolio
for priority sector raised to ` for HFC to banks under priority lending. Positive for LICHF,
25 lakh HDFC and GIC Housing Finance

ICICIdirect Money Manager l 17

 March 2011
BUDGET 2011
Announcement Impact Our View
Banking license guidelines to Neutral This can be a positive trigger for corporates and
be finalised by the RBI before NBFCs seeking banking license
close of the financial year
Agriculture lending target in- Slight
We believe enforcement of such targets will pres-
creased to ` 4,75,000 crore negativesurise PSBs more compared to private banks. In-
for PSB
terest subvention on such lending will lead to de-
layed cash flows, thus impacting PSBs negatively
Government borrowing pro- Positive This will keep a check on the steep rise in bond
gramme net seen at ` 3.43 for banks yields. Impact on the AFS portfolio of larger banks
trillion like SBI, PNB, BoB and HDFC Bank will subside.
This will not be a drag on bottomline growth
Cement
Announcement Impact Our View
If the retail price of cement Neutral The excise duty increase will be in the range of
exceeds ` 190 per 50 kg bag, ` 1-3 per 50 kg bag for our cement coverage
the excise duty will be levied universe. Despite that, the duty will be levied on
as 10% ad valorem + ` 160 ex-factory price as compared to the retail price
per tonne. However, if the re- previously as there is an extra burden of ` 160
tail price is less than ` 190 per per tonne if the retail price is more than ` 190 per
50 kg bag, the excise duty will bag. We believe, the excise burden will be passed
be levied as 10% ad valorem on to consumers
+ ` 80 per tonne
Reduction in custom duty on Positive Positive for players that use pet coke as a fuel for
pet coke and gypsum to 2.5% the kiln and power plant operations. This will save
from 5% ` 20-30 per tonne in power and fuel cost for Shree
Cement, JK Cement and JK Lakshmi from our cov-
erage universe
Construction
Announcement Impact Our View
Proposal to facilitate setting Neutral No indication was given on the size and modalities
up of an infrastructure debt for the fund
fund
FII limit in infrastructure com- Positive It will be positive for large infrastructure conglom-
panies’ corporate bonds raised erate such as L&T, GMR Infra, GVK Power, etc.
by $20 billion to $25 billion Their cost of debt will come down
Allocation to infrastructure Positive Although it is per se positive for the infrastructure
sector at ` 2,14,000 crore sector, focus is still required on the execution
(48.5% of the total budget al-
location vs. 46% in FY10-11)
Tax free bonds worth ` 30,000 Positive This will act as a boost to infrastructure develop-
crore to be issued by various ment in railways, roads, ports, etc
government agencies such
as NHAI, HUDCO, Railway Fi-
nance Corporation

18 ICICIdirect
l  Money Manager
 March 2011
Tête-à-tête
‘10 percent growth is achievable’
Can India grow at the projected 9 percent? It can, so thinks
Chandrajit Banerjee, director general, Confederation of Indian
Industries (CII). He thinks that India can surpass the projected
growth rate and achieve 10 percent or more.
In an exclusive interview with ICICIdirect Money Manager,
Banerjee explains some of the problems plaguing the economy.
He approves of the budget for FY2011-12 that emphasises
the importance of improvement in supply side agricultural
conditions. The interview was conducted by Rajeev Ranjan Jha
on behalf of ICICIdirect Money Manager.

Recently, the economic survey

indicated that GDP growth
would be 8.75 to 9 percent
next fiscal. Do you believe it
to be achievable?
The survey mentioned that
there will be a growth of
around 9 percent. CII has also
said that 9 percent growth is
definitely achievable and over
a period of time India should
aim for 10 percent growth. Chandrajit Banerjee
There is a need to take certain Director General
important steps to sustain 9 Confederation of Indian Industries (CII)
percent and later 10 percent
growth. And we have some around 1 to 1.5 percent to the
recommendations that can growth rate. Third, we need
help us keep the growth rate. agricultural growth rate of 4.5
We have made recommen- percent, which is achievable.
dations about steps that can We are talking about second
increase the manufacturing green revolution, and we need
rate and build a manufactur- to see that it starts. When we
ing ecosystem in the country. are focusing to achieve sus-
Second, there are issues re- tained 9 percent growth, we
lated to a better tax regime in need to bring some changes
the country. GST itself will add in the agriculture and the man-
ICICIdirect Money Manager l 19
 March 2011
ufacturing side and also our
tax system.
What will support the manu-
facturing ecosystem? What
are the enabling steps?
The manufacturing sector cur-
rently contributes about 16
percent to the GDP. The manu-
facturing sector needs to con-
tribute at least 25 percent to the
GDP over a period of time, say
by 2022-2025. That does not
mean other sectors will shrink.
The other sectors will also
grow. It was also mentioned
in the Budget by finance min-
ister Pranab Mukherjee. We
need large scale manufactur-
ing investments into the coun-
try. Large scale manufacturing
system needs a lot of enablers
in the policy, be it land acqui-
sition or be it clearances. Es-
pecially, land acquisition is go-
ing to be the most important
thing. There are other issues
too that can be environmen-
tal, the labour issues that can
help fast track clearances. To-
day, there are delays in set-
ting up manufacturing units.
You go through the plethora
of regulatory framework to
set up manufacturing units;
there are a number of clear-
ances and approvals needed.
That can be effectively re-
20 ICICIdirect
l  Money Manager
Tête-à-tête
duced. Another area where
something is being worked
upon is recommendation of a
task force on transaction cost,
due to which our manufac-
tured products become very
expensive when compared to
other countries. That needs to
be focused upon. The third is
exports market. We need to
bring down the export costs,
important part of the transac-
tion cost. Now there is need
to focus on exporters. So a
series of steps can be taken
to expand our manufacturing
system and make it easy for
investments in the manufac-
turing sector and also fund in
the manufacturing. The other
extremely important point to-
day is we need to see some
major manufacturing projects,
if they can be put on a fast
track of clearances. So these
projects can, at the end of the
day, be much larger. That itself
gives not only a huge signal to
manufacturing, but also helps
to add to the growth of the
country. There are a series of
steps that can help manufac-
turing in spurring both em-
ployment and growth rate.
For the next fiscal, what is go-
ing to be the best and worst
situations?
 March 2011
I believe, the way we are struc-
tured or given what we have,
we can achieve near 9 percent
growth. Our growth rate will
be anywhere between 8.5 to
9.2 percent. Even CII projec-
tion says that. Our focus today
is more on the coming years.
Our aim is to move to 10 per-
cent and more, which is also
achievable, over the years.
You are providing the opti-
mistic projection for a situa-
tion, when certain conditions
get fulfilled. But what will be
the best and worst case as-
sumptions?
See, obviously the country is
in a situation where we will
grow at least 8.5 percent. I
don’t see a situation where our
growth rate would be lower. It
could only be certain possible
global risk factors. Given our
regulatory framework and ec-
osystem, I don’t think we are
going to grow at a rate lesser
than 8.5 percent. We have def-
initely proved that we can and
will grow at 8.5 percent and
above growth rate.
But what can drag us? What
are the dangers ahead for the
Indian economy?
There are several issues,
which we need to keep in
mind. While growth itself has
Tête-à-tête
begun, it has come with high
inflation. We have to be cau-
tious on how to deal with the
issue of inflation. We should
also look at certain factors,
which are outside our control,
like mineral costs around the
world which has got tendency
to go up at. There are also
pressures on the oil prices
front, which will have an ef-
fect on our imports bill. Then,
there are internal pressures
such as agricultural side, sup-
ply chain, etc, that need to be
addressed so that we are able
to tackle inflation properly and
we are able to bring in the type
of investments in supply chain
that the agriculture sector
needs. These are the issues
which we need to focus on.
Another area where attention
is needed and which is an im-
portant internal issue is work-
force. You know, every year 10
to 12 million new people are
coming to the job market. So
3 to 4 million people always
remain under pressure of
whether they will be employ-
able or not. And then, peo-
ple from agriculture move to
other sectors for employment.
The economy needs to absorb
them. How will that happen?
There is a huge gap of skills.
The entire country and the
ICICIdirect Money Manager l 21
 March 2011
government are talking about
skills. We need to see how we
will create and develop skills.
It has become a major agenda
for the country for which the
National Skill Development
Corporation has been started.
But we need to see how we
can really translate it into ac-
tion and how we are able to
train around 500 million peo-
ple to meet our manpower re-
quirement by 2020.
The government seems to be
helpless on the issue of infla-
tion. What do you suggest the
government to do?
As you see the monetary side
is already tight. You can’t do
much through the monetary
side to control inflation. Now
what is required is from the fis-
cal side. By and large inflation
is keeping us worried and par-
ticularly food inflation is quite
high. For this, we need to fo-
cus more on the supply side of
the food chain. Around 35-40
percent of the food produced
in the country gets wasted, ac-
cording to certain estimates
and we should be able to ad-
dress it. That can be done by a
proper system, logistics, cold
chain, handling system, etc.
That’s one point. Our agricul-
tural productivity is also to be
22 ICICIdirect
l  Money Manager
Tête-à-tête
addressed. But I am focusing
on the supply side. If we are
able to get technology and pri-
vate sector investments in the
supply side, we will be able to
address food inflation. It was
also a part of the budget this
year, when the finance minis-
ter talked about cold chains.
The budget lacked any big
bang announcement this
year. What were the main
positive and negative points
according to you?
It is important for the country
to move away from big bang
items. The Budget should be
an exercise to address critical
issues. What are these critical
issues? The three critical is-
sues which came out ahead
of the Budget were — shall we
see inflation being addressed,
fiscal consolidation and a
growth-oriented budget? The
Budget has addressed all of
them very adequately, yet qui-
etly without a big bang, as you
might say. There were series
of things to address them and
that is extremely important.
This may add more pressure
on the implementation side.
We have to see how these
things are implemented. We
too wish that all measures an-
nounced get implemented.
 March 2011
Tête-à-tête
I can take an example, like three areas I had mentioned.
cash-in-hand that is direct You mentioned that the gov-
subsidy in the form of cash to ernment should take fiscal
the people, to be very good.
measures instead of monetary
We hope that this gets imple-
ways to curtail inflation. So
mented well. Then, around
basically you don’t want inter-
48 percent of the budget is
est rate to go up further and
talking about infrastructure.
A very important focus is on liquidity to be tightened more.
infrastructure. There are sev- That’s what I have said. You
eral things, which will induce already have a tight situation
investments and growth and at hand. What do you need for
which will improve the sup- investment to take place? You
ply side situation. The focus need credit to be available at
on rural economy and on ag- a lower cost. You can’t tighten
riculture is important to see credit at this point. That will
that we are able to continue have an adverse effect. You
growth. There are very posi- need to have more invest-
tive features in the Budget in- ments, and therefore you can’t
cluding tax reforms, although
make credit costly. And, on the
GST, which you can see as a
other side, you also need to
negative one, has lost. We
give more money in the hands
need to have a conclusion on
of the people, especially the
the GST. We are able to roll it
out with confidence. But we poor. This is a very integral
see that there is a shortage of part of growth. Coming back
convergence in our system, in to your monetary point, I think
our infrastructure, in moving there is little space for adjust-
towards the GST and widen- ment on the monetary front at
ing the tax net in services area. this point. So we need to focus
So these are certain features on the non-monetary side.
which are very critical for the
Disclaimer:
The views expressed in this article by the interviewee are theirs alone, and do not
necessarily reflect the views of I-Sec or any employee thereof. I-Sec makes no
representations as to accuracy, completeness, currentness, suitability, or validity of any
information contained therein and will not be liable for any errors, omissions, or delays
in this information or any losses, injuries, or damages arising therefrom.

ICICIdirect Money Manager l 23

 March 2011
When in doubt, ask us
Q I had invested in mutual
funds for 6 months after which
I redeemed it. Can I get tax ex-
emption for it?
- Rashesh shah
A Gains arising from equity
investments (including mutual
funds) can attract capital gains
tax. If you hold the investment
for a period of less than 12
months then short-term capi-
tal gains are applicable on it. If
you hold the equities and mu-
tual funds investment for more
than 12 months then long-term
capital gains are applicable
which is nil. If you have invest-
ed in ELSS (equity-linked sav-
ing schemes), then to avail tax
deduction you need to stay in-
vested in the scheme for mini-
mum 3 years. In your case,
since you have redeemed it
within 6 months, the gains will
attract short-term capital gains
tax. The amount of gains needs
to be included in your taxable
income while filing your return
of income.
Q I am a conservative type
of investor with an investment
horizon of 5 years. What will
be a good short term liquid in-
vestment tool which offers bal-
anced benefit both in terms of
risk and returns?
- Malathi sinha
A Balanced funds are good
If you have similar queries please write to us at :
moneymanager@icicisecurities.com
24 ICICIdirect
l  Money Manager
Query Corner
investment avenues for con-
servative investors willing to
participate in equity markets
without wanting to take too
much risk. A balanced fund is
basically an equity fund with
a mix of both equity and debt
instruments depending on the
investment objective of the
scheme. Since you are willing
to take moderate risk, balanced
funds will suit your needs. It is
recommended that you invest
in these funds through SIPs so
that you can reduce your risk
and maximize the benefits.
SIPs help you average out the
costs of investment.
Q Can I avail tax benefits
by investing in infrastructure
bonds over and above the ex-
empted amount of `1 lakh un-
der Section 80C?
- Madhab Chandra Barik
A In the Income Tax Act,
Section 80CCF had been intro-
duced for FY 2010-11, wherein
investments in infrastructure
bonds to the extent of `20,000
will be eligible for tax deduc-
tion. This is in addition to the
permissible deduction of `1
lakh from annual income un-
der sections 80C, 80CCC and
80CCD. The interest earned
can vary from 7.5 to 8.5 per-
cent depending upon the is-
suer and investment option
chosen.
 March 2011
FLAVOUR OF THE MOnTH
Looking at the big picture
When stock markets show their continuous movements, there
are talks of different macro economic factors that affect them.
How does it affect you as an investor? Here we demystify some
of the macroeconomic indicators that can have a bearing on
your investments.

Ananya employed with a KPO in the hands of the captain of a

had started investing in stocks
recently. Since some time now
she is rather confused about
the volatile markets. The pink
paper headlines name infla-
tion, IIP numbers or concerns
over growth as the culprits
behind the fall in markets. She
was rather awestruck when the
Honourable Finance minister
Pranab Mukherjee started his
budget speech with his com-
ments on economic growth
and inflation. Why was the In-
dian CFO so keen to talk about
the economic variables at the
start of the budget speech
than the estimates of rev-
enues and expenditure? This
underlines the importance of
the basic economic numbers.
Be it for making the budget of
stock market investing, these
numbers matter a lot. It is time
to run through some of the key
numbers.
GDP growth
If you are a global investor,
this number is like a compass
ship. For the uninitiated, gross
domestic product (GDP) of a
nation is the sum of the value
of all the goods and services
produced in that country in a
given year. It is arrived at by
adding consumption, gross
investments, government ex-
penditure and net exports (ex-
ports minus imports). It is a
number that stands as a good
measure of the economic ac-
tivity taking place in a country.
If the rate of growth of GDP
is positive, it speaks of the
increasing economic activi-
ties in an economy. If there
is negative growth in GDP, it
is a warning signal, captur-
ing fall in economic activities
in an economy. Other things
remaining the same, analysts
prefer high GDP growth econ-
omies over low GDP growth
economies. A case in point
here is India, which is grow-
ing at a real rate of 8 percent
against the 1 to 2 percent
growth experienced by the de-
ICICIdirect Money Manager l 25
 March 2011
veloped nations in the world.
China — the economic super-
power of 21st century — is ex-
periencing double digit rate of
growth. No wonder the Indian
finance minister in his budget
speech make it clear that he is
eying double digit growth in
the near future. But does that
really help us investors?
The answer is a big yes. The
rise in overall economic ac-
tivities is best exploited by the
organised sector - read large
corporates. They have the
necessary skill sets and access
to resources to build on the
growth momentum. No won-
der, across the globe, analysts
have observed positive cor-
relation between the nominal
GDP growth and companies’
profits. The extent of benefit
the companies derive from
overall growth momentum has
to be more than the extent of
benefits the small production
units derive, all thanks to the
‘organised and professional’
manner in which the business
is conducted. This makes it
obvious for the investing com-
munity to chase ‘equity assets’
in an economy that is experi-
encing high GDP growth.
26 ICICIdirect
l  Money Manager
FLAVOUR OF THE MOnTH
11.0
9.5 9.7
9.2
8.9 8.9
9.0 8.2
7.5 7.4
(%)
6.7
7.0
5.0
FY05
FY06
FY07
FY08
FY09
FY10
Q1FY11
Q2FY11
Q3FY11
GDP Growth
source: ICICIdirect.com Research
If you can simply remain in-
vested in an economy where
the expected GDP growth is
very high, you have fair chanc-
es to emerge winner as the
growth expectations material-
ise over a period of time.
RBI’s third quarter review of
the macroeconomic and mon-
etary scenario published on
January 25, 2011 expects the
Indian economy to grow at
8.5 percent in 2010-11. This
is very close to the finance
minister’s expression in the
budget speech where he had
mentioned that GDP of India
is estimated to have grown at
8.6 percent in 2010-11 in real
terms.
Inflation
Inflation is another issue the fi-
nance minister was rather vo-
cal about in the budget. Food
inflation in India, though now
stands halved from the high of
19 percent in recent past and
stands at 10 percent mark, in-
flation as a whole is still a large
risk. For beginners, inflation is
a sustained rise in the general
price level in an economy. To
ascertain the extent of inflation
 March 2011
in an economy, the prices of a
basket of goods and services
is observed over a period of
time. Inflation is a by-product
of economic growth. As eco-
nomic growth takes place, nat-
urally the demand for all inputs
goes up, pushing up their pric-
es which in turn lead to rise in
prices. Inflation can also arise
out of supply constraints; so if
there are lesser goods or com-
modities of a certain type that
are available in the market, it
can impact overall inflation.
Inflation adversely impacts
the investment sentiment in
two ways. First, it eats into the
purchasing power of the con-
sumers. Indian economy - a
domestic play - is more de-
pendent on Indian consum-
ers. Prolonged periods of high
inflation can materially bring
down the ‘sales’ of companies
as consumers find it difficult to
buy. Second, the impact of in-
flation is seen on long-term in-
terest rates. As inflation goes
up, investors demand higher
interest rates to protect their
purchasing power. Also, RBI
typically takes measures to
reduce liquidity or supply of
money. Both these lead to in-
crease in interest rates which
in turn leads to higher borrow-
ing costs for companies. High-
er interest outgo ensures that
profits dwindle. Thus, on one
FLAVOUR OF THE MOnTH
hand, inflation brings down
the ‘sales’ and on the other
hand, lowers profitability.
Inflation numbers, however,
must be seen in greater de-
tail. For some time now, infla-
tion in India was running in the
higher band due to rising food
prices. But things are due for
change. With rabi crops due
for arrival in the market, prices
are expected to go down. But
that need not necessarily bring
overall inflation down. The
second biggest contributor to
inflation is ‘energy prices’. In
the backdrop of unrest in the
Middle East, if crude oil prices
remain substantially above
$100 per barrel, inflation may
emerge with new vigour and
threaten the prospects for In-
dian equities.
We need to be a bit cautious
here. We know that the infla-
tion numbers are arrived at
after observing the prices of
basket of goods and services.
So it is better to understand
seasonal aberrations in prices;
if you miss such temporary
elements you may get misled
due to erratic observations.
12.0
10.0
8.0
6.0
(%)
4.0
2.0
0.0
Nov-09
May-10
Nov-10
May-05
Nov-05
May-06
Nov-06
May-07
Nov-07
May-08
Nov-08
May-09
-2.0
WPI (YoY)
source: ICICIdirect.com Research
ICICIdirect Money Manager l 27
 March 2011
Fiscal deficit
Fiscal deficit is one such vari-
able that is easy to talk about
but difficult to handle. It sim-
ply means a scenario where
government expenditures are
more than government rev-
enues. There are two ways
government can manage this
gap — one by printing more
currency and second by bor-
rowing money.
The first way out - printing
more currency - leads to infla-
tion in the economy and we
have already seen the ill-ef-
fects of inflation. The second
way out is government bor-
rowing. When the government
borrows, it sucks out liquid-
ity from the financial markets.
This increased demand in li-
quidity leads to rise in interest
rates for corporate entities. We
already know that higher inter-
est rates mean higher interest
payments and lower profits.
In such case, it makes more
sense for investors if fiscal
deficit remains under control if
it cannot be eliminated in total-
ity.
Interest rates
Both fiscal deficit and infla-
tion impact interest rates in
the economy and further bring
down the profitability. But both
the numbers are lagging indi-
cators i.e. they tell you the re-
28 ICICIdirect
l  Money Manager
FLAVOUR OF THE MOnTH
ality after it happens. Why not
go with something that is a re-
ality but has got some predic-
tive ability? Only the markets
can do it for you. Do look at 10-
year benchmark bond yield —
the return offered on the rec-
ognised bond— is a good tool
to understand and benchmark
the interest rate scenario. The
bond yield reflects the rate at
which the government can
raise money for a long term.
It therefore imbeds in itself the
confidence that the world has
on lending funds to a country.
Some use it as a macro valu-
ation tool in terms of meas-
uring the attractiveness of
equities vis-à-vis bonds. To
measure the attractiveness
one should look at the gap
between the earnings yield of
equities and bond yields. Dur-
ing boom times, generally,
earning yields is lower than
bond yields as good degree
of earnings momentum is built
in the stock prices. But during
distressed times the inverse
relationship plays out. So to
come to a conclusion whether
equities are cheap or expen-
sive one should compare the
historical spreads on both the
asset classes with the current
spreads based on which asset
allocation strategy should be
devised.
A point to note: there may
 March 2011
be prolonged periods where
stock markets do well despite
rising interest rates. This may
be the case due to the ability
of corporates to maintain their
margins by bringing in effi-
cient production techniques
and economies of scale in
the early stage of economic
growth.
Yield curve is another element
that investors watch to under-
stand interest rates and the fu-
FLAVOUR OF THE MOnTH
higher the IIP growth, better
it is. Like inflation, in case of
IIP, one must take cognizance
of the various contributors to
the index and their seasonal
behaviours. Economic Survey
of India, published along with
the Budget, points out that
slowdown in IIP is of short-run
phenomenon in nature and
will not have any long-term
adverse implications.
20.0%
IIP Jan 2005 - Dec 2010

ture growth. Yield curve is ar- 15.0%

rived at by connecting all the 10.0%

data points representing the 5.0%

rate of interest payable for var- 0.0%

M 06

M 07

M 08

M 09

M 10
Ja 6

Ja 7

Ja 8

Ja 9

10
Se 6

Se 7

Se 8

S e 09

Se 0
ious tenures, say 1 to 30 years.
0

0
-0

-0

-0

-1
n-

n-

n-

n-

n-
-
p-

p-

p-

p-

p-
ay

ay

ay

ay

ay
Ja

Flat yield curve, with not much source: ICICIdirect.com Research

difference between short- and
long-term interest rates, is an
indicator of moderate slow-
down in economic growth in
the near future. A steep yield
curve — long-term rates quot-
ing at a steep premium over
short-term rates — stands
for expected high economic
growth.
Index of industrial production
(IIP)
The index measures the state
of production in the indus-
trial sector for a given period
of time compared to a refer-
ence period. It is obvious that
Given the complexity of the
macro economic indicators,
seasoned investors prefer to
read them in the context of
some of the real indicators. It
may also not be possible to
track all and completely un-
derstand the implications of
all indicators on the markets
or on your portfolio. You can
therefore look at the analysis
of experts. At ICICIdirect, our
research analysts cover over
185 stocks, all major industries
and economic events for you
to make informed investment
decisions.

ICICIdirect Money Manager l 29

 March 2011
PRODUCT FOCUs
Margin Plus
MarginPLUs is an order placement feature where you can
take a position at market price and also place a cover order
for the position specifying the stop loss trigger price (sLTP)
and the limit price. This will minimise the loss on the position.
MarginPLUs is a product whereby you can place a sLTP loss
cover order at the time of taking the position itself. Hence, it
gives a clear view of the maximum downside involved in a
particular position. since you are committing to square-up the
position at a particular price, ICICIdirect will not levy a normal
margin ranging from 21 percent to 50 percent. It will block the
maximum loss which a customer can suffer.

How does the concept of Mar- vised amount of ` 1,000 will be

ginPLUs work?
Assume, you take a sell posi-
tion for a fresh order of 1,000
shares at the current market
price of ` 100. Simultaneously,
you also place the buy (cover)
order of 1,000 shares as limit
price ` 112. SLTP ` 108.
The above example can be
analysed as follows:
Apart from a minimum margin
on the fresh order value, the
maximum loss amount will be
blocked on the fresh order as
the difference between current
market price and limit price.
(112-100)*1,000 = ` 12,000.
The fresh order is a market
order which will get executed
at the market price available at
that point of time. If the order
gets executed at ` 101, re-
30 ICICIdirect
l  Money Manager
released. The cover order will
remain in the ordered state.
Current market price rises-
Position is making a loss:
Once the current market price
starts rising and reaches `
108, the cover order will be
triggered to a limit order with
price ` 112. The order will get
executed at the best prices
available up to the limit price
of ` 112.
The current market price falls-
Position is making a profit:
You can modify the buy order
to a market or limit order with
SLTP closer to the execution
and close the position at a
profit.
Will there be any mark to
market process like in margin
trading?
 March 2011
No. Since the feature of Mar-
ginPLUS cover order which
also indicates the maximum
downside involved in a partic-
ular position is available, there
is no need of mark to market
process.
Can I cancel the cover order?
No, cover order cannot be
cancelled.
Can I modify the cover order?
You can modify the cover or-
der subject to the trigger con-
ditions being fulfilled.
You can even modify the cov-
er order to a profit scenario.
Assume, you take a buy po-
sition for the fresh order of
1,000 shares at current market
price of ` 100. Simultaneously,
you also place the sell (cover)
order of 1,000 shares as limit
price ` 90 and SLTP ` 95. The
above trigger condition is de-
fined with a view to curtailing
losses.
If, subsequently, the current
market price shoots up to `
110, you can modify the or-
der as below limit price ` 103,
SLTP ` 108.
What is the margin that is
charged on the fresh order?
Margin in case of fresh order
is charged to the extent of
PRODUCT FOCUs
maximum possible loss that
you may incur plus a mini-
mum margin calculated at
the minimum margin percent
specified for the stock in the
stock list page. It is calculated
as {(Weighted average price
of fresh order — limit price
of cover order)* Quantity of
shares} + {(Weighted average
price of fresh order * quantity
of shares) * minimum margin
percent for the stock}.
What is the quantity that can
be submitted for fresh orders?
The maximum quantity that
can be submitted for fresh or-
ders is the total of best 5 bid/
offer quantities that is availa-
ble in the best bids and offers.
If the quantity that you input is
greater than the quantity avail-
able in the best 5 bids and of-
fers, then the order will not go
through.
What will be the price at which
the order will be placed?
For fresh orders the price will
be calculated as the weighted
average price of the best 5
bids and offers available.
Will the margin be recalcu-
lated when the order gets ex-
ecuted?
Yes, at the time of order place-
ment the current market price
ICICIdirect Money Manager l 31
 March 2011
at that point of time is consid-
ered. It may happen that ex-
ecution happens at a different
price than the one at which
limits have been blocked.
Terms explained
• Fresh Order: Order placed
for creating Margin Plus
positions.
• Exchange: Exchange is the
Stock Exchange to which
the order is routed. Since
MarginPLUS is allowed
only in NSE, it will display
NSE by default.
• Stock: Stock is the stock
code which is to be speci-
fied here. The code can be
found out by entering the
first two or three charac-
ters of that stock by click-
ing on the link Find stock
Code.
• Action: Action is to specify
if it is a buy or sell order.
If the fresh order will be a
buy order the Cover order
will be Sell, and this will
be populated by default in
case of cover order.
32 ICICIdirect
l  Money Manager
PRODUCT FOCUs
• Quantity: Specify the
Quantity for which you
require to place an order.
Fresh and Cover order
quantity will be identical.
• Order Type: Order type will
be a Market order or Limit
order. In case of Fresh or-
der it will be compulsorily
a Market order. In case of
Cover order it will be com-
pulsorily a limit order with
a Stop Loss price.
• Cover Order: Cover or-
der is a Square-off order
against the fresh positions
created.
• Limit price: Limit price is
the order price in which
you specify the Maximum
price per share in case of
buy and a minimum price
per share in case of sell.
It has to be in multiples of
.05 paise.
• Stop Loss Trigger Price:
Stop Loss trigger price gets
activated and allows you
to place the order when
the market price reaches
the Stop Loss price placed
for the relevant security.
 March 2011
Financial Planning
Plan for comfortable financial future
Prashant Kulkarni, aged 45, lives in Pune with his wife Chitra who
is 40 years old. Both of them are working in the public sector.
They have a daughter— Vaibhavi, aged 14 years. Prashant’s
mother, sujata, aged 82, also lives with him. so far, Prashant had
been managing his family’s finances. He approached ICICIdirect.
com through ICICIdirect Money Manager to create a financial
plan that would help secure his family’s financial future.

Income, expenses and

Surrender LI value ` 8.5 lakh
savings
Debt fund ` 8 lakh
Annual household income ` 6,50,000
Annual expenses ` 4,35,000 Other assets ` 3 lakh
Annual surplus ` 1,65,000 Prashant has an outstanding
Expenses break-up home loan of ` 7.5 lakh. His
net worth today is ` 87.6 lakh
Household expenses ` 300,000
Holiday expenses ` 40,000 Financial goals of Kulkarni
family
Home loan ` 30,000
Educational expenses ` 30,000 General goal
Vehicle maintenance ` 5,000 • To buy a house of approxi-
expenses mately ` 10 lakh after 10
Travelling expenses ` 5,000 years.
Other expenses ` 10,000 • To go on a dream vacation
Investment details to Europe in three years
Prashant pays an annual insur- with his family. This goal
ance premium of ` 55,000. costs ` 5 lakh at present.
Assets and liabilities • To buy a new car for ` 4 lakh
in 5 years.
Total asset value of the Kulkar-
ni family is ` 95.1 lakh • To start a business, which
will require capital invest-
Fixed assets (self occupied ` 70.5 lakh
home and a real estate ment of ` 30 lakh, in 5 years.
investment) • Retire at the age of 60 and
Equity holding ` 4 lakh continue nurturing his busi-
Saving account ` 1.1 lakh ness.
ICICIdirect Money Manager l 33
 March 2011
Child goal
• Vaibhavi’s graduation,
which costs approximately
` 5 lakh today. This goal is to
be achieved when she turns
18 years old.
• For Vaibhavi’s post-grad-
uation, Prashant will need
approximately ` 5 lakh in
today’s cost. This goal is to
be achieved when Vaibhavi
turns 22.
• For Vaibhavi’s marriage,
Prashant will require ` 5
lakh (in today’s cost) when
Vaibhavi turns 25.
strengths
• Owns a house – Prashant al-
ready owns a house worth `
40 lakh.
• Retirement Planning – he should take a medical
Prashant has already accu-
mulated ` 17 lakh and he
still has 15 years left for his
retirement; if he continues
to save at this rate then he
will meet all his retirement
needs.
Concern areas
• Annual surplus – Prashant’s
investible surplus is ` 1.5
lakh (i.e. 25 percent of his
income) after deducting all
his expenses and current in-
vestments. He needs to fo-
34 ICICIdirect
l  Money Manager
Financial Planning
cus on either increasing his
source of income or cutting
down some expenses.
• Prioritizing goals – Too
many goals to be realised
before retirement; he needs
to prioritise his goals.
• Inadequate protection –
Prashant has two depend-
ents (Vaibhavi and Sujata).
He has not protected his
family sufficiently against
future uncertainties.
• Medical expenses – Though
his medical expenses are
borne by the employer, he
needs to check whether crit-
ical or accidental illnesses
are covered under the medi-
cal policy or not. If not, then
policy which covers all criti-
cal or accidental illnesses.
Goal planning
Child goals
• Vaibhavi’s education
In today’s cost, Vaibhavi
will require ` 10 lakh for her
educational needs (` 5 lakh
-Graduation and ` 5 lakh –
Post-graduation). Prashant
holds two policies which
will give him following
amounts:
 March 2011
Future cash inflow
• ` 1.2 lakh Endowment poli-
cies in 2013 (used for gradu-
ation)
• ` 2 lakh LIC Jeewan Kishore
in 2019 (used for post-grad-
uation)
• He is investing ` 1,000 per
month in a recurring de-
posit since the last 5 years
on which he earns 8 percent
annually.
In future, Prashant will need
around ` 15.5 lakh to meet
the requirements of Vaibhavi’s
education costs. Taking into
account the expected future
cash inflows, he needs to save
an additional ` 10,562 per
month for the goals.
Requirements Monthly savings
Graduation ` 6,253
Post-graduation ` 4,309
Since the time horizon is long,
he can invest in child plans
which can give him higher re-
turns with stability. Child plans
are oriented towards paying
out proceeds in line with ma-
jor milestones in a child’s edu-
cation path (graduation, post-
graduation, etc).
• Vaibhavi’s marriage
Prashant expects to budget
Financial Planning
around ` 5 lakh in today’s
cost for Vaibhavi’s marriage.
Assuming the rise in cost
of marriage every year, he
needs to invest ` 3,200 per
month. Since the time hori-
zon is long i.e. 13 years, eq-
uity or mutual funds are the
best options.
Prashant has around ` 2
lakh worth of gold. This can
also be used to offset some
of the marriage expenses in
future. Historically, gold has
given a return of 8.5 per-
cent.
General goals
• Home goal
Prashant wants to buy a
house costing ` 10 lakh
in 10 years. Assuming the
cost of a house appreciates
by 7 percent annually on
an average, Prashant will
need approximately ` 17
lakh at the time of buying
the house (after 10 years).
For this, he needs to save `
6,100 monthly.
Prashant currently has a
large portion of his invest-
ments in debt. Debt is con-
sidered a safe asset class
which offers steady returns
and stability. However, in the
ICICIdirect Money Manager l 35
 March 2011
long run, equities have giv-
en higher returns. So, since
the tenure of this goal is 10
years, it is recommended
that Prashant divert some
amount (` 3.5 lakh) from his
debt investment to equity
investment.
If Prashant invests ` 3.5
lakh in equity, he will have a
corpus of around ` 11 lakh
(assuming returns of 12 per-
cent) as against a corpus
of ` 7.5 lakh if he stays in-
vested in debt (assuming a
return of 8 percent) over the
next ten years.
Current Saving ` 5,000 per month
Recommended
saving ` 6,100 per month
• To start up a new business
Prashant has plans to start
his own business in 5 years.
The present value of this
goal is ` 30 lakh. He needs
to save ` 54,500 per month
for this goal.
Starting a new business
involves risk; so he must
make sure that his savings
for child goal is sufficient,
as it is also lined up after 5
years. He has a real estate
property worth ` 30 lakh
which can act as a cushion
for this goal.
36 ICICIdirect
l  Money Manager
Financial Planning
• Dream vacation
Prashant wants to go on a
dream vacation to Europe in
3 years with his family. The
present cost of this goal is
` 5 lakh. Assuming the cost
of such a vacation appreci-
ates by 10 percent annually
on an average, Prashant will
need around ` 6 lakh for the
tour after 3 years. For this,
it is advisable to invest `
13,300 per month.
We will recommend him to
plan for the vacation after
sometime, once all his ma-
jor goals (Child’s goal, busi-
ness requirement and home
goal) are met or if he has
saved sufficiently for his pri-
mary goals.
• Buying a car
Prashant wants to buy a car
in 5 years. The present cost
of this goal is ` 4 lakh. As-
suming the cost of vehicle
increases over five years,
Prashant will need around `
6.5 lakh after 5 years to buy
the car. For this, it is advis-
able to invest ` 7,300 per
month.
• Planning for retirement
Prashant has already accu-
mulated ` 17 lakh and he still
 March 2011
has 15 years left before he
retires. He is currently sav-
ing ` 10,000 per month in a
pension plan for his retire-
ment needs, and this is suf-
ficient. As Prashant focuses
on starting a business, he
should not give in to the
temptation of withdrawing
funds from his retirement
corpus. His retirement cor-
pus will act as a cushion in
case his business venture
fails.
Insurance and protection
As Prashant’s mother and
daughter are dependent on
him, it is important to ensure
that they are adequately pro-
tected in case of an unfortu-
nate event. Prashant currently
has an insurance cover of ` 7.5
lakh. Considering Prashant’s
age, future earning potential
and goals, a higher insurance
cover is recommended. In or-
der to replace Prashant’s earn-
ing capacity and to meet all
If you would like us to help you create a financial plan for your family,
please call Rashmi singh at 022-4070 1422 or email your request to
moneymanager@icicisecurities.com
Financial Planning
goals defined, an insurance
cover of ` 1.1 crore is rec-
ommended. A term policy is
recommended as it offers the
option of obtaining a high in-
surance cover for a relatively
smaller cost.
Insurance recommendation
Buying a term plan offering `
50 lakh as sum assured will
cost Prashant around ` 27,000
annually for a 15-year term.
Health insurance
Prashant’s medical expenses
are borne by the employer. He
needs to check whether critical
or accidental illnesses are cov-
ered under the medical policy
or not. If not, then he should
take a medical policy which
covers all critical or acciden-
tal illness. Based on number
of family members, a ` 3-lakh
health cover for him, Chitra
and Vaibhavi will cost just `
6,869 annually. This amount
will also be exempt from his
tax liability under section 80D.
ICICIdirect Money Manager l 37
 March 2011
Diversified Funds
What are diversified funds?
Diversified equity fund is a
category of funds that invest
in a diverse mix of securities
that cuts across sectors. Funds
in this category are a either
large cap or midcap oriented
funds or are flexi-cap funds
These funds have a diversified
index, like BSE Sensex or S&P
CNX Nifty or BSE 200 or BSE
500 or CNX 100 or S&P CNX
500 as a benchmark. Large
cap oriented equity diversified
schemes are the safest on
the risk parameter, followed
by multicap diversified funds
and then the midcap oriented
diversified funds with the
highest risk among the three.
These funds usually have
around 40-60 stocks in the
portfolio. The alpha in these
funds is primarily generated
from the fund manager’s call to
be overweight or underweight
on a sector in comparison to
the benchmark. A diversified
fund, however, has an internal
limit on the sector allocation to
mitigate concentration risk.
Why should you invest in
diversified funds?
Diversified funds should be
part of every investor’s core
portfolio. Since these funds
have exposure to multiple
sectors, even if a few sectors
38 ICICIdirect
l  Money Manager
FUnD CARD
perform poorly, other better
performing sectors can make
up for the dull show. Diversified
equity funds are therefore less
risky than sector funds. In an
actively managed diversified
fund, the fund manager
performs the role of ensuring
higher exposure to the better
performing sectors. In a well
diversified fund, there is no
market cap bias. Hence these
funds are suitable for all market
scenarios and so suitable for
long term investing.
Category watch
Diversified fund is one
category where there are funds
with performance history of
over 10 years. There are over
100+ schemes to select from.
Though the universe is vast,
a few among them are clear
winners. In the subsequent
pages, you can examine the
fact sheets of top funds in this
category.
Key risk
Though the funds are
diversified by nature and
have the lowest risk in the
equity funds category, the
fund manager plays a key role.
Hence any change in the fund
manager or the investment
process of the AMC may affect
the performance of the funds.
 March 2011
FUnD CARD
HDFC Top 200 Fund
Fund Objective Period Fund Benchmark
The investment objective of the Year 23/04/03 to 154.3 124.6
scheme is to generate long-term 23/04/04
capital appreciation from a portfolio of
equity and equity-linked instruments. Worst Return(%)
The investment portfolio for equity Period Fund Benchmark
and equity-linked instruments will be
Month 31/03/00 to -35.1 -17.9
primarily drawn from the companies
in the BSE 200 Index. 02/05/00

Key Information Quarter 29/02/00 to -48.4 -35.8

30/05/00
NAV as on March 03, 2011 203.8 Year 13/03/00 to -49.3 -44.4
Inception Date September 3, 1996 13/03/01
Fund Manager Prashant Jain Market Cycle Returns
Minimum Investment
Market Phase Period Returns
Lumpsum 5,000.0
(%)
SIP 500.0
Bull Phase 14/01/2006 - 113.5
Expense Ratio (%) 1.8 08/01/2008
Exit Load (%) 1.0 Bear Phase 08/01/2008 - -54.5
AUM (` Crore) as on 9409.2 09/03/2009
January 31, 2011 Bull Phase 09/03/2009 - 133.4
Benchmark BSE-200 06/01/2010
Calendar Year-wise Performance Dividend History
2011 2010 2009 2008 2007 Date Dividend (%)
NAV as 203.8 225.7 180.5 92.8 169.8
on Dec Mar-12-2010 40.00
31 (`)
Mar-06-2009 30.00
Return -9.7 25.1 94.5 -45.4 54.5
(%) Feb-08-2008 50.00
Bench- -10.6 16.2 88.5 -56.5 60.4 Feb-08-2007 50.00
mark
(%) Feb-17-2006 45.00
Net 9409.2 9903.6 6066.3 2024.2 2586.8 Dec-16-2004 30.00
Assets
(` Cr) Risk Parameters
Best Return (%) Standard Deviation (%) 22.7
Period Fund Benchmark
Beta 0.7
Month 28/04/09 to 32.0 33.5
28/05/09 Sharpe ratio 0.1

Quarter 09/03/09 to 88.1 94.7 R Squared 0.8

10/06/09 Alpha (%) 11.2

ICICIdirect Money Manager l 39

 March 2011
FUnD CARD
Portfolio Attributes Top 10 Holdings %
Total Stocks 64.0 ITC 3.4
Top 10 Holdings (%) 44.6 Titan Industries 3.3
Fund P/E Ratio 16.6 Larsen & Toubro 3.1
Benchmark P/E Ratio 21.4
Tata Consultancy Services 3.0
Fund P/BV Ratio 2.7
Oil & Natural Gas Corpn. 2.8
Market Capitalisation %
Large 88.5 Top 10 sectors %
Mid 8.7 14.1
Bank - Public
Small --
IT - Software 10.1
Asset Allocation as on %
november 2010 Bank - Private 9.6
Equity 97.2
Refineries 8.4
Debt 0.0
Cash 2.8 Pharmaceuticals & Drugs 7.5

Top 10 Holdings % Engineering - Construction 4.5

State Bank of India 7.7 4.5
Oil Exploration
ICICI Bank 6.2
Cigarettes/Tobacco 3.4
Infosys Technologies 6.1
Automobiles-Trucks/Lcv 3.4
Reliance Industries 4.9
Bank of Baroda 4.1 Watches & Accessories 3.3

Performance vs. Benchmark sIP Performance

(Value if invested ` 5,000 per month (in ‘000))
3031.6

3500
17.7

3000
20
14.2

2500
12.8

1707.3
11.3

15
2000
10
Return%

5.7

1500
2.5

5
469.4

1000
600
387.2
254.4

227.1

300
180

0
59.4

500
57.9
60
-2

-5 0
-3.5

6 Month 1 Year 3 Year 5 Year 1Yrs 3Yrs 5Yrs 10Yrs

Fund Benchmark Total Investment Fund Value Bechmark Value

Data as on March 03, 2011

Content source: ICICIdirect.com Research

40 ICICIdirect
l  Money Manager
 March 2011
FUnD CARD
ICICI Prudential Focused Bluechip Equity Fund
Fund Objective Period Fund Benchmark
To g e n e r a t e l o n g- t e r m c a p i t a l
Quarter 09/03/09 to 75.1 80.9
appreciation and income distribution
to unitholders from a portfolio that is 10/06/09
invested in equity and equity-related Year 09/03/09 to 114.4 99.5
securities of about 20 companies
11/03/10
belonging to the large-cap domain
and the balance in debt securities and Worst Return(%)
money market instruments.
Key Information Period Fund Benchmark
Month 24/09/08 to -33.5 -37.9
NAV as on March 03, 2011 16.0 24/10/08
Inception Date May 26, 2008
Fund Manager Prashant Kothari Q u a r - 24/07/08 to -36.9 -41.7
Minimum Investment ter 24/10/08
Lumpsum 5,000.0 Year 26/05/08 to 0.6 -15.6
SIP 0.0 26/05/09
Expense Ratio (%) 1.9
Exit Load (%) 1.0 Market Cycle Returns
AUM (` Crore) as on 1658.2 Market Phase Period Returns
December 31, 2010 (%)
Benchmark S&P Bull Phase 14/01/2006- -
CNX Nifty 08/01/2008
Calendar Year-wise Performance Bear Phase 08/01/2008- -
2011 2010 2009 2008 2007 09/03/2009
NAV as 16.0 17.4 13.7 7.2 --
Bull Phase 09/03/2009- 114.9
on Dec
06/01/2010
31 (`)
Return -8.2 27.1 91.2 -28.5 -- Dividend History
(%) Date Dividend (%)
Bench- -9.8 18.0 75.8 -51.8 54.8 Jan-26-2011 7.50
mark
(%) Risk Parameters
Net -- 1658.2 988.4 440.1 --
Standard Deviation (%) 22.6
Assets
(` Cr) Beta 0.8
Best Return (%)
Sharpe ratio 0.1
Period Fund Benchmark
R Squared 1.0
Month 11/05/09 to 27.5 30.5
11/06/09 Alpha (%) 12.4

ICICIdirect Money Manager l 41

 March 2011
FUnD CARD
Portfolio Attributes Top 10 Holdings %
Total Stocks 25.0 Tata Consultancy Services 6.0
Top 10 Holdings (%) 59.8 Axis Bank 6.0
Fund P/E Ratio 16.9 Mahindra & Mahindra 5.8
Benchmark P/E Ratio 24.6
ITC 5.6
Fund P/BV Ratio 3.5
Hindustan Zinc 5.0
Market Capitalisation %
Large 96.8 Top 10 sectors %
Mid -- 13.7
Bank - Private
Small --
IT - Software 12.4
Asset Allocation as on %
november 2010 Bank - Public 11.8
Equity 88.4
Automobile Two & Three Wheelers 6.5
Debt 0.0
Cash 11.6 Refineries 6.3

Top 10 Holdings % Oil Exploration 6.2

Bajaj Auto 6.5 6.2
Index
Reliance Industries 6.3
Automobiles-Tractors 5.8
Punjab National Bank 6.3
Cigarettes/Tobacco 5.6
Oil & Natural Gas Corpn. 6.2
S&P CNX Nifty Futures 6.2 Metal - Non Ferrous 5.0

Performance vs. Benchmark sIP Performance

(Value if invested ` 5,000 per month (in ‘000))
61.5
60.9
16.2

18 61
16
14 60.5
12

60

12
8.8

60
Return%

10
59.4

8
59.5
3.8

6
2.1

4 59
2
1

0 58.5
6 Month 1 Year 3 Year 5 Year 1Yrs 3Yrs 5Yrs 10Yrs
Fund Benchmark Total Investment Fund Value Bechmark Value

Data as on March 03, 2011

Content source: ICICIdirect.com Research

42 ICICIdirect
l  Money Manager
 March 2011
FUnD CARD
Birla sun Life Frontline Equity Fund
Fund Objective Best Return (%)
An open-end growth scheme with Period Fund Benchmark
the objective of long term growth Month 29/04/09 to 33.9 35.0
of capital, through a portfolio with a 02/06/09
target allocation of 100% equity by Quarter 09/03/09 to 80.2 94.7
aiming at being as diversified across 10/06/09
various industries and or sectors as Year 09/03/09 to 117.4 124.1
its chosen benchmark index, BSE 200. 11/03/10
Worst Return(%)
Key Information
Period Fund Benchmark
NAV as on March 01, 2011 85.4 Month 24/09/08 to -30.9 -37.5
Inception Date September 27, 24/10/08
2002 Quarter 20/08/08 to -35.9 -44.0
Fund Manager Mahesh Patil 20/11/08
Year 20/11/07 to -51.2 -58.8
Minimum Investment 20/11/08
Lumpsum 5,000.0 Market Cycle Returns
SIP 0.0 Market Phase Period Returns
Expense Ratio (%) 1.9 (%)
Exit Load (%) 1.0 Bull Phase 14/01/2006- 139.5
08/01/2008
AUM (` Crore) as on 2719.8 Bear Phase 08/01/2008- -55.6
December 31, 2010 09/03/2009
Benchmark BSE-200 Bull Phase 09/03/2009- 123.8
06/01/2010
Calendar Year-wise Performance
Dividend History
2011 2010 2009 2008 2007
Date Dividend (%)
NAV as 85.4 94.7 79.8 41.9 81.3 Feb-07-2011 12.50
on Dec Aug-09-2010 12.50
31 (`) Feb-01-2010 20.00
Return -9.8 18.7 90.5 -48.5 62.3 Aug-03-2009 15.00
(%) Aug-11-2008 20.00
Jul-02-2007 40.00
Bench- -10.8 16.2 88.5 -56.5 60.4 Risk Parameters
mark
Standard Deviation (%) 23.3
(%)
Beta 0.9
Net -- 2719.8 1603.8 381.2 374.8 Sharpe ratio 0.1
Assets R Squared 1.0
(` Cr) Alpha (%) 7.4

ICICIdirect Money Manager l 43

 March 2011
FUnD CARD
Portfolio Attributes Top 10 Holdings %
Total Stocks 64.0 ITC 3.9
Top 10 Holdings (%) 39.1 Bharti Airtel 3.5
FundP/E Ratio 19.5 State Bank Of India 3.1
Benchmark P/E Ratio 21.4
Oil & Natural Gas Corpn. 2.7
Fund P/BV Ratio 2.9
Dr Reddy's Laboratories 2.4
Market Capitalisation %
Large 80.3 Top 10 sectors %
Mid 9.8 11.1
Bank - Private
Small 0.4
IT - Software 10.5
Asset Allocation as on %
February 2011 Pharmaceuticals & Drugs 5.8

Equity 89.5 Bank - Public 5.8

Debt 0.0
Electric Equipment 5.5
Cash 10.6
Refineries 5.0
Top 10 Holdings %
Cash & Cash Equivalent 7.0 Engineering - Construction 4.9

Reliance Industries 4.4 Power Generation/Distribution 4.1

ICICI Bank 4.2 Cigarettes/Tobacco 3.9

Tata Consultancy Services 4.0
Telecommunication - 3.5
Infosys Technologies 4.0 Service Provider

Performance vs. Benchmark sIP Performance

(Value if invested ` 5,000 per month (in ‘000))
435.4

500
450
378
17.5

20 400
295

350
11.2

15
236.7

300
9.9

220
7.5

10 250
175
Return%

200
5 150
0.6

53.9

52.4

100
55

0
50
-5 0
-2.2

-3.5

6 Month 1 Year 3 Year 5 Year 1Yrs 3Yrs 5Yrs 10Yrs

Fund Benchmark Total Investment Fund Value Bechmark Value

Data as on March 03, 2011

Content source: ICICIdirect.com Research

44 ICICIdirect
l  Money Manager
 March 2011
FUnD CARD
Fidelity Equity Fund
Fund Objective Worst Return(%)
To generate long-term capital growth Period Fund Benchmark
from a diversified portfolio of pre-
dominantly equity and equity-related Month 12/05/06 to -31.2 -29.8
securities. 14/06/06
Key Information Quarter 02/09/08 to -36.4 -44.0
nAV as on March 03, 34.6 02/12/08
2011 Year 20/11/07 to -51.8 -58.8
Inception Date May 16, 2005 20/11/08

Fund Manager Sandeep Kothari Market Cycle Returns

Minimum Investment Market Phase Period Returns
Lumpsum 5,000.0 (%)

SIP 500.0 Bull Phase 14/01/2006- 119.6

08/01/2008
Expense Ratio (%) 1.9
Bear Phase 08/01/2008- -56.3
Exit Load (%) 1.0 09/03/2009
AUM (` Crore) as on 2978.8 Bull Phase 09/03/2009- 114.5
January 31, 2011 06/01/2010
Benchmark BSE-200
Dividend History
Calendar Year-wise Performance
Date Dividend (%)
2011 2010 2009 2008 2007
NAV as 34.6 38.0 29.9 16.1 32.4 Jan-18-2011 15.00
Dec 31 (`) Mar-03-2010 10.00
Return -8.9 26.9 86.1 -50.3 55.3
Mar-13-2008 25.00
(%)
Bench- -10.6 16.2 88.5 -56.5 60.4 May-03-2007 25.00
mark (%)
Net As- 2978.8 3282.6 2887.4 1820.8 4026.7 Mar-23-2006 20.00
sets (` Cr) Risk Parameters
Best Return (%)
Standard Deviation (%) 21.3
Period Fund Benchmark
Month 11/05/09 to 29.4 35.3 Beta 0.8
11/06/09
Sharpe ratio 0.1
Quarter 09/03/09 to 71.8 94.7
10/06/09 R Squared 1.0
Year 09/03/09 to 113.5 124.1
Alpha (%) 9.5
11/03/10

ICICIdirect Money Manager l 45

 March 2011
FUnD CARD
Portfolio Attributes Top 10 Holdings %
Total Stocks 67.0 Tata Consultancy Services 4.1
Top 10 Holdings (%) 42.1 ICICI Bank 3.2

Fund P/E Ratio 14.9 Housing Development 2.8

Finance Corporation
Benchmark P/E Ratio 21.4
State Bank of India 2.7
Fund P/BV Ratio 2.7
Cipla 2.6
Market Capitalisation %
Large 76.8 Top 10 sectors %
Mid 12.0 Bank - Private 10.5
Small 4.1 IT - Software 9.4
Asset Allocation as on %
February 2011 Refineries 7.6
Equity 93.8
Debt 0.0 Pharmaceuticals & Drugs 7.1
Cash 6.2
Bank - Public 6.7
Top 10 Holdings %
Cigarettes/Tobacco 4.5
Reliance Industries 7.0
Power Generation/ 4.0
Cash & Cash Equivalent 6.2 Distribution
Infosys Technologies 5.0 Electric Equipment 3.2
ITC 4.5 Engineering - Construction 3.0
HDFC Bank 4.2 Finance - Housing 2.8

Performance vs. Benchmark sIP Performance

(Value if invested ` 5,000 per month (in ‘000))
445.8

500
387.2

450
16.1
15.9

20 400
300

350
11.3

251.7

15
227.1

300
9.8

10 250
180
Return%

5.7

200
2.5

5 150
59.6

57.9

100
60

0
50
-2

-5 0
- 3.5

6 Month 1 Year 3 Year 5 Year 1Yrs 3Yrs 5Yrs 10Yrs

Fund Benchmark Total Investment Fund Value Bechmark Value

Data as on March 03, 2011

Content source: ICICIdirect.com Research

46 ICICIdirect
l  Money Manager
 March 2011
FUnD CARD
HDFC Equity Fund
Fund Objective Worst Return(%)
Aims at providing capital apprecia- Period Fund Benchmark
tion through investments predomi- Month 26/09/08 to -31.6 -36.8
nantly in equity-oriented securities.
27/10/08
Key Information
Quarter 02/09/08 to -40.0 -43.6
nAV as on March 03, 2011 268.3 02/12/08
Year 20/11/07 to -53.6 -59.3
Inception Date January 2, 1995
20/11/08
Fund Manager Prashant Jain
Market Cycle Returns
Minimum Investment
Market Phase Period Returns
Lumpsum 5,000.0 (%)
SIP 0.0 Bull Phase 14/01/2006- 108.5
Expense Ratio (%) 1.8 08/01/2008
Bear Phase 08/01/2008- -59.5
Exit Load (%) 1.0
09/03/2009
AUM (` Crore) as on 8289.0 Bull Phase 09/03/2009- 157.3
January 31, 2011 06/01/2010
Benchmark S&P CNX 500 Dividend History
Calendar Year-wise Performance Date Dividend (%)
2011 2010 2009 2008 2007 Mar-26-2010 40.00
NAV as 268.3 298.5 231.0 112.4 223.3
Mar-20-2009 30.00
Dec 31 (`)
Return -10.1 29.2 105.6 -49.7 53.6 Mar-08-2008 55.00
(%) Mar-08-2007 50.00
Bench- -10.9 14.1 88.6 -57.1 62.5 Mar-20-2006 50.00
mark (%)
Net As- 8289.0 8709.9 5396.0 2680.4 5491.4 Dec-01-2004 30.00
sets (` Cr) Risk Parameters
Best Return (%)
Standard Deviation (%) 22.5
Period Fund Benchmark
Month 28/04/09 to 35.9 34.7 Beta 0.9
28/05/09
Sharpe ratio 0.1
Quarter 09/03/09 to 95.1 89.8
10/06/09 R Squared 1.0
Year 20/10/98 to 179.4 40.6
Alpha (%) 14.5
20/10/99

ICICIdirect Money Manager l 47

 March 2011
FUnD CARD
Portfolio Attributes Top 10 Holdings %
Total Stocks 63.0 Bank Of Baroda 4.2
Top 10 Holdings (%) 45.3 Tata Consultancy Services 3.9
Fund P/E Ratio 15.6 Coal India 3.0
Benchmark P/E Ratio 22.4 2.8
GAIL (India)
Fund P/BV Ratio 2.7
Oil & Natural Gas Corpn. 2.5
Market Capitalisation %
Top 10 sectors %
Large 76.1
Bank - Public 14.5
Mid 18.1
Small 4.5 Refineries 8.7

Asset Allocation as on % IT - Software 8.3

February 2011
Equity 98.7 Bank - Private 8.0
Debt 0.0
Cash 1.4 Pharmaceuticals & Drugs 7.5

Top 10 Holdings % Watches & Accessories 4.7

State Bank Of India 8.4 Engineering - Construction 4.1
ICICI Bank 6.7 Oil Exploration 4.1
Titan Industries 4.7 Mining & Minerals 3.0
Reliance Industries 4.7 Gas Transmission/ 2.8
Infosys Technologies 4.4 Marketing

Performance vs. Benchmark sIP Performance

(Value if invested ` 5,000 per month (in ‘000))
3085.8

3500
17.3
16.8

3000
20
14.1

2500
10.1

15
1660.4

10 2000
3.5
Return%

2.1

5 1500
483.4

1000
600

0
378.8
270.5

223.9

300
180

-5
59.4

500
57.5
-3.3

60
-4.8

-10 0
6 Month 1 Year 3 Year 5 Year 1Yrs 3Yrs 5Yrs 10Yrs
Fund Benchmark Total Investment Fund Value Bechmark Value

Data as on March 03, 2011

Content source: ICICIdirect.com Research

48 ICICIdirect
l  Money Manager
 March 2011
MODEL PORTFOLIO
MODEL EQUITY PORTFOLIO
Portfolio management is an incomplete exercise without a
periodic review. Every security should be subject to severe
scrutiny and a case made out for its continuation or disposal. The
frequency of review will depend on the size, amount involved
and the kind of securities held in the portfolio.
Here, we present three model portfolios viz. conservative
portfolio, moderate portfolio and the aggressive portfolio.
These portfolios have been designed keeping in mind various
key parameters like the time horizon of investment, returns
expected, the indices to which they are benchmarked, etc. We
have included the intervals at which the performance of each
portfolio will be reviewed.
Conservative Moderate Aggressive
Time horizon 18-24 months 12-18 months 9-12 months
Expected return 20% 20%-30% >30%
Benchmark BSE Sensex/BSE 100 BSE 500 BSE 500
Review intervals Quarterly Quarterly Monthly
Risk return Low risk-Low return Medium risk- High risk -
Medium return High return

COnsERVATIVE PORTFOLIO
Portfolio Philosophy: The conservative portfolio is in the nature
of direct equity. The ideal investment horizon is 18-24 months.
The universe for selection of stocks is the BSE Sensex/Nifty and
BSE 100 / BSE 500. The minimum number of sectors is five with
the maximum exposure to each sector capped at 25 percent.
The portfolio will include 12-15 stocks. The performance review
for this portfolio will be done on a quarterly basis.
Conservative Portfolio
Company name ICICIdirect Allocation (%)
codes
Financials 16
Axis Bank UTIBAN 3
HDFC Bank HDFBAN 3
SBI STABAN 4
Bank of Baroda BANBAR 3
Indian Overseas Bank INDOVE 3

ICICIdirect Money Manager l 49

 March 2011
MODEL PORTFOLIO
Company name ICICIdirect Allocation (%)
codes
Engineering & Capital Goods 5
BHEL BHEL 2
L&T LARTOU 3
Pharma 13
Biocon BIOCON 3
Glenmark GLEPHA 3
Lupin LUPIN 4
Apollo Hospitals APOHOS 3
IT 11
HCL Technology HCLTEC 4
Infosys INFTEC 3
TCS TCS 4
FMCG 6
ITC ITC 3
Nestle NESIND 3
Power 3
NTPC NTPC 3
Oil & Gas and Petro Products 9
ONGC ONGC 3
GAIL GAIL 3
Reliance Industries RELIND 3
Cement/Construction/Infra 6
ACC ACC 3
Jaiprakash Associates JAIASS 3
Media 3
Dish TV DISHTV 3
Auto 7
Maruti MARUTI 4
Tata Motors TELCO 3
Metals 6
Tata Steel TISCO 3
Hindustan Zinc HINZIN 3
Cash 15
Grand Total 100

Whats in/Add? Whats out/Reduce?

Jaiprakash Associates 3% Relaince Infrastructure 3%

50 ICICIdirect
l  Money Manager
 March 2011
MODEL PORTFOLIO
MODERATE PORTFOLIO
Portfolio Philosophy: The moderate portfolio is in the nature of
direct equity. The ideal investment horizon is 12-15 months. The
universe for selection of stocks is the BSE 500. The minimum
number of sectors is five with the maximum exposure to each
sector capped at 15 percent. The portfolio will include 12-15
stocks and has certain allocation to cash as well. The performance
review for this portfolio will be done on a quarterly basis.
Company name ICICIdirect Allocation (%)
codes
Financials 16
Axis Bank UTIBAN 3
HDFC Bank HDFBAN 3
SBI STABAN 4
Bank of Baroda BANBAR 3
Indian Overseas Bank INDOVE 3
Engineering & Capital Goods 5
BHEL BHEL 2
L&T LARTOU 3
Pharma 12
Biocon BIOCON 3
Glenmark GLEPHA 3
Lupin LUPIN 4
Apollo Hospitals APOHOS 2
IT 11
HCL Technology HCLTEC 4
Infosys INFTEC 3
TCS TCS 4

ICICIdirect Money Manager l 51

 March 2011
MODEL PORTFOLIO
Company name ICICIdirect Allocation (%)
codes
FMCG 6
ITC ITC 3
Nestle NESIND 3
Power 3
NTPC NTPC 3
Oil & Gas and Petro Products 9
ONGC ONGC 3
GAIL GAIL 3
Reliance Industries RELIND 3
Cement/Construction/Infra 3
Jaiprakash Associates JAIASS 3
Media 3
Dish TV DISHTV 3
Auto 8
Maruti MARUTI 3
M&M MAHMAH 2
Tata Motors TELCO 3
Metals 6
Tata Steel TISCO 3
Hindustan Zinc HINZIN 3
Others 3
Shree Renuka Sugar RENSUG 3
Cash 15
Grand Total 100

Whats in/Add? Whats out/Reduce?

Jaiprakash Associates 3% Relaince Infrastructure 3%

52 ICICIdirect
l  Money Manager
 March 2011 MODEL PORTFOLIO

AGGREssIVE PORTFOLIO
Portfolio Philosophy: The agressive portfolio is in the nature of
direct equity. The ideal investment horizon is 9-12 months. The
universe for selection of stocks is the BSE 500. The minimum
number of sectors is five with the maximum exposure to each
sector capped at 15 percent. The portfolio will include 12-15
stocks and has certain allocation to cash as well. The performance
review for this portfolio will be done on a monthly basis.
Company name ICICIdirect Allocation
code
Financials 15
Axis Bank UTIBAN 3
HDFC Bank HDFBAN 3
SBI STABAN 3
Bank of Baroda BANBAR 3
Indian Overseas Bank INDOVE 3
Engineering & Capital Goods 5
BHEL BHEL 2
L&T LARTOU 3
Pharma 12
Aurbindo Pharma AURPHA 3
Glenmark GLEPHA 3
Lupin LUPIN 4
Apollo Hospitals APOHOS 2
IT 11
HCL Technology HCLTEC 4
Infosys INFTEC 3
TCS TCS 4
FMCG 6
ITC ITC 3
Nestle NESIND 3
Power 3
NTPC NTPC 3

ICICIdirect Money Manager l 53

 March 2011 MODEL PORTFOLIO
Company name ICICIdirect Allocation
code
Oil & Gas and Petro Products 9
ONGC ONGC 3
GAIL GAIL 3
Reliance Industries RELIND 3
Media 3
Dish TV DISHTV 3
Auto 8
Maruti MARUTI 3
M&M MAHMAH 2
Tata Motors TELCO 3
Metals 6
Tata Steel TISCO 3
Hindustan Zinc HINZIN 3
Others 5
Shree Renuka Sugar RENSUG 3
Indian Hotels INDHOT 2
Cash 17
Grand Total 100

Whats in/Add? Whats out/Reduce?

Aurbindo Pharma 3% Cash 3%

source: ICICIdirect.com Research

54 ICICIdirect
l  Money Manager