1. The World This Week
May 05 – May 10, 2014

2. Equity View:
The Nifty moved up by 3% on Friday and Sensex almost touched 23000 for the first time on the
expectation of a possible electoral outcome. The first exit polls start from today evening and markets
should react to these in tomorrow’s session. We believe that the NDA is close to majority or slightly
below it. And the markets could continue to drift upwards if the exit poll results are as per the general
expectations however if the exit poll results are negative then we might see some cool off in the markets
in the short term. The final election results will be seen on Friday. For long term, we continue to maintain
our year end target of 24800 on Sensex. In terms of corporate results so far, the numbers have been in
line with expectations or slightly better. The profit growth on an average for the companies which have
declared their results so far has been 14-15% which is higher than expected 10%. We believe the FY15
profit growth should be 15% and we would see the beginning of recovery of the earnings cycle in the next
few quarters.
Globally, US markets continued to react to the positive macro news. Some correction has happened in
the NASDAQ and some of the other indices on the back of disappointing earnings of the IT companies.
The guidance by Cognizant was a little muted because of which the IT companies had a slight correction
and even in India, the IT companies fell around 3-5% in the last one week and were massive under-
performers. We still continue to maintain a positive stance on IT for a two-year view as we believe the IT
companies will deliver significant positive earnings growth. We are expecting the Tier I companies like
Infosys, Tech Mahindra and TCS to deliver around 15% price appreciation from the current levels in the
next 12 months. The Pharma companies have come up with a very good set of numbers for this quarter
and we are positive on this sector as well. Lupin delivered an extraordinary set of results with almost 40%
growth on the Y-O-Y profits. So, IT and Pharma despite some short term corrections continue to be
strong recommendations for the next one year. The banking and Infrastructure space also continues to
do well. Some large cap private sector banks like ICICI and AXIS have shown decent set of numbers and
they also form a part of our conviction ideas.
News:
DOMESTIC MACRO:
 The economy can grow well over 6% this financial year if a stable government assumes office and carries
out systemic reforms, new President of industry body CII Ajay S Shriram said.
 SEBI data shows trading in corporate bonds plunged 32.3% at Rs 75,040 cr in the first month of the current
fiscal over the same period a year ago.
 India signs agreement with 47 nations including Switzerland to automatically exchange information on tax
matters.
 India’s HSBC Services PMI rose to 48.5 in April from 47.5 in March.

3. GLOBAL MACRO
EURO
 European Central Bank holds interest rates steady at 0.25%, but signals that it is likely to take action next
month to stimulate the Euro zone economy.
 Euro zone composite purchasing managers index (PMI) hit 54 in April, up from 53.1 the previous month.
United States
 US productivity in Q1 2014 fell 1.7% after an upwardly revised 2.3% gain in Q4 2013; unit labor costs
rebounded 4.2% in Q1 2014 after a downwardly revised fall of 0.4% in Q4 2013
 US trade deficit in March fell 3.6% to $40.4 bn; February's deficit was downwardly revised to $41.9
bn.
China
 China’s exports rose 0.9% to $188.54 bn year-on-year, while imports rose 0.8% to $170.09 bn, resulting in a
surplus of $18.45 bn in April; the trade surplus was $7.71 bn in March.
 China’s HSBC services PMI came in with a score of 51.4 in April, slowing from 51.9 in March.
Indices:
Date Sensex Midcap Auto Bankex CD CG FMCG HC IT Metals O&G Power Realty Teck
5/5/2014 22,445 7,348 13,347 14,749 6,582 12,011 6,791 10,779 8,762 9,959 9,697 1,673 1,390 4,865
6/5/2014 22,508 7,371 13,359 14,830 6,794 12,130 6,822 10,792 8,717 9,966 9,804 1,668 1,389 4,842
7/5/2014 22,323 7,360 13,266 14,815 6,846 12,109 6,799 10,770 8,491 9,895 9,783 1,671 1,374 4,735
8/5/2014 22,344 7,348 13,342 14,925 6,935 12,156 6,745 10,736 8,512 9,909 9,763 1,675 1,361 4,739
9/5/2014 22,994 7,456 13,677 15,721 6,933 12,562 6,801 10,675 8,580 10,225 10,099 1,744 1,421 4,782
2.45% 1.47% 2.47% 6.59% 5.33% 4.59% 0.16% -0.96% -2.08% 2.67% 4.14% 4.19% 2.22% -1.70%

4. Commodities and Currency:
Date USD GBP EURO YEN
Crude
(Rs. per BBL)
Gold
(Rs. Per 10gms)
5/5/2014 60.0475 101.3181 83.3423 58.88 6540 30035
6/5/2014 60.202 101.6752 83.5532 59.00 6468 30009
7/5/2014 60.0399 101.9658 83.584 59.17 6445 29773
8/5/2014 59.9913 101.7512 83.4805 58.96 6492 29687
9/5/2014 60.054 101.6534 83.0738 59.06 6481 29725
-0.01%
Rupee
Depreciated
-0.33%
Rupee
Depreciated
0.32%
Rupee
Appreciated
-0.30%
Rupee
Depreciated
-0.90% -1.03%
Debt:
Tenor Gilt Yield in % (Friday) Change in bps (Week)
1-Year 8.52 -4
2-Year 8.74 6
5-Year 8.76 -3
10-Year 8.75 -6

5. Varun Goel Jharna Agarwal
Nupur Gupta Ridhdhi Chheda
Disclaimer
The information and views presented here are prepared by Karvy Private Wealth (a division of Karvy Stock Broking
Limited) or other Karvy Group companies. The information contained herein is based on our analysis and upon sources
that we consider reliable. We, however, do not vouch for the accuracy or the completeness thereof. This material is for
personal information and we are not responsible for any loss incurred based upon it.
The investments discussed or recommended here may not be suitable for all investors. Investors must make their own
investment decisions based on their specific investment objectives and financial position and using such independent
advice, as they believe necessary. While acting upon any information or analysis mentioned here, investors may please
note that neither Karvy nor any person connected with any associated companies of Karvy accepts any liability arising
from the use of this information and views mentioned here.
The author, directors and other employees of Karvy and its affiliates may hold long or short positions in the above-
mentioned companies from time to time. Every employee of Karvy and its associated companies are required to disclose
their individual stock holdings and details of trades, if any, that they undertake. The team rendering corporate analysis
and investment recommendations are restricted in purchasing/selling of shares or other securities till such a time this
recommendation has either been displayed or has been forwarded to clients of Karvy. All employees are further restricted
to place orders only through Karvy Stock Broking Ltd.
The information given in this document on tax are for guidance only, and should not be construed as tax advice. Investors
are advised to consult their respective tax advisers to understand the specific tax incidence applicable to them. We also
expect significant changes in the tax laws once the new Direct Tax Code is in force – this could change the applicability
and incidence of tax on investments
Karvy Private Wealth (A division of Karvy Stock Broking Limited) operates from within India and is subject to Indian
regulations.
Karvy Stock Broking Ltd. is a SEBI registered stock broker, depository participant having its offices at:
702, Hallmark Business plaza, Sant Dnyaneshwar Marg, Bandra (East), off Bandra Kurla Complex, Mumbai 400 051 .
(Registered office Address: Karvy Stock Broking Limited, “KARVY HOUSE”, 46, Avenue 4, Street No.1, Banjara Hills,
Hyderabad 500 034)
SEBI registration No’s:”NSE(CM):INB230770138, NSE(F&O): INF230770138, BSE: INB010770130, BSE(F&O):
INF010770131,NCDEX(00236, NSE(CDS):INE230770138, NSDL – SEBI Registration No: IN-DP-NSDL-247-2005, CSDL-SEBI
Registration No:IN-DP-CSDL-305-2005, PMS Registration No.: INP000001512”