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IndiaBulls Coverage of RCOM + Kotak Bank

October 4, 2007

Here is a brief update from Indiabulls on the following Stocks.

Reliance Communications: With an expected increase in the subscriber base coupled with acquisition of Yipes Holdings, the Company’s net sales are estimated to increase at a CAGR of 27.7% for FY07-FY09E. Moreover, the Company’s initiatives in the form of possible listing of FLAG Telecom and RTIL and hive off of its BPO and Tower business will further add value to the stock. India bulls maintain a Buy rating on the stock with a target price of Rs. 665 over a period of 9-months.

Kotak Bank:The present economic scenario offers immense opportunities for Kotak to grow in scale and reach along with value creation. Commercial banking and life insurance businesses to be the future growth driver. Remain positive due to the Bank’s high NIM, huge advances growth, diverse product base, and cross selling of financial products. India bulls values Kotak on sum-of-the-parts valuation on account of substantial benefits coming from subsidiaries. Banking business at Rs. 366 based on a target FY09E P/BV multiple of 3.5x and the different subsidiaries at Rs. 591 FY09E. Maintain a Hold rating on the stock with a target price of Rs. 957.

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