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PNB has corrected sharply since its Q2FY11 results due to spike in slippage and due to loan scam along with rise in concerns over microfinance & 2G/3G lending by the banks (especially PSU banks). It is better placed than its peers in rising interest rate environment with its strong liability franchise (CASA mix at ~41%) along with lower dependence on wholesale deposits. Reported NIM for H1FY11 is ~4.0%, again on the higher side vis-à-vis its peers. This has come on the back of sequential improvement in yield on advances (31bps QoQ; driven by increase in PLR and base rate during Q2FY11) and containment of cost of deposits (due to better liability management). the correction in stock price seems to be overdone and hence long term investors can buy this stock with a price target of Rs.1400.

Result Update: Axis Bank. Axis bank reported strong growth in its net interest income (40.5%) buoyed by strong growth in its loan book (36.5% YoY; however, muted growth of 1.8% QoQ) along with 16 bps YoY improvement in margins. Its net profit grew 38.3% on back of robust growth in its core business and moderate growth in provisions & contingencies. Non-interest income declined marginally to Rs.10.33 bn during Q2FY11 (decline of 3.0% YoY) on back of lower trading profit (decline of 51.6%). During the same period, fee income grew moderately at 18.0% YoY; however, it lagged overall business growth.It continued to display superior liability franchise which is visible in terms of its CASA mix (41.5% at the end of Q2FY11). Its NIM improved (16 bps YoY) on back of lower cost of funds (decline of 66 bps YoY) which is underpinned by strong CASA mobilization. Long term investors can accumulate on declines only, with a target price of Rs.1825 based on P/ABV of 3.4x its FY12E adjusted bo

Gati - results update: GATI reported its FY10 results which are below market estimates on the profitability front due to pressure on its shipping business and losses from cold chain business and international operations. Some of the key factors include: • Strong growth in express distribution and supply chain management business. • Looking to demerge coast-to-coast shipping business. • Set up Redsun Supply Chain Solutions business.

Result Update: Grasim Industries. • Revenues of the company for Q1FY11 remained flattish on YoY basis, inline with market estimates. This was impacted by decline in cement realizations but compensated to some extent by improvement in VSF realizations as well as volume expansion in cement division on YoY basis. • Operating margins stood at 25.8% for Q1FY11 and Net profit declined by 47% for Q1FY11 led by decline in operating margins, higher depreciation charges as well as no extraordinary income as against Rs 3.5 bn in Q1FY10 on sale of sponge iron division. • At current market price of Rs 1856, stock is trading at 6.7x P/E and 3.4x EV/EBITDA for FY11.Hence medium to long term investors can accumulate on declines, with a price target of Rs 2150.

Result Update: Simplex Infrastructures. • Simplex Infra reported 10% and 5% de-growth for Q4FY10 and full year FY10 revenues respectively as against same period last year. This was lower than market estimates as well as management's guidance of achieving a flat growth in FY10. • Operating margins were better than our estimates and stood at 10.2% and 9.8% for Q4FY10 and FY10 respectively, led by selective bidding by the company. • Net profits registered 82% growth for Q4FY10 but declined by 3% for the full year FY10. This was impacted by flattish revenue growth as well as higher tax outgo. • At current price of Rs 479, stock is trading at 14.2x and 11.7x P/E and 6.5x and 5.8x EV/EBITDA multiples for FY11 and FY12 estimates respectively. With expected increase in overall order inflows and increased traction from international order inflows, investors can accumulate the stock with a price target of Rs 474 on FY11 estimates.

Infosys Technologies - Results Update. Excellent quarter : revenue growth highest in the past nine quarters. Infosys’ 3QFY10 performance was significantly better than street expectations. Revenues grew 6.7% qoq to US$1,232 mn, highest in the past nine quarters. Consistent with market expectations, BFSI vertical revenue led revenue growth and up 10.3% qoq. Operating margin increased 90 bps qoq to 35.5%, led partly by write-back of provisions. Net income of Rs15.82 bn was ahead of expectations by 5.7% and led by better-than-expected revenue and OPM performance. 4QFY10E revenue guidance muted and extremely conservative. Infosys has guided for 1.5% US$ growth for 4QFY10 (1% at the upper-end excluding McCamish acquisition). The guidance is excessively conservative , even after accounting for the adverse impact of seasonality. 4QFY10 EPS guidance of Rs25.83 (-8.3% qoq) assumes 150 bps decline in margin. Infosys has raised FY2010E EPS guidance to Rs107, versus Rs100 earlier. Infosys has manag