Dalal Street Business - Indian Equity Research and Strategy

UBS Turning Less Bullish on India

Thursday, June 18, 2009

UBS in a report released just a while ago has set March 2010 Sensex target to
16,750 (from 13,500) based on 14.9x March 2011E P/E. UBS turned less bullish as there is only 16% upside potential from current levels to our Sensex target.

UBS Outlook on various sectors:

UBS has turned more bullish on Telecom as the sector that has under-performed significantly and Bharti's valuations appear attractive.
UBS is negative on Metals and Engg sectors due to strong price performance in these sectors. UBS is also lowering weight on Reliance Industries to reflect negative view on the stock.

Overweight:
Autos, Banks & FIs, Cement, IT Services, Real Estate and Telecom.

Underweight:
Engineering, Metals, Oil & Gas, Petrochemicals

Sensex FY10 earnings is expected to be Rs 900 while that for FY11 is estimated to be Rs 1,124 with Dec-09 target of 16,750.