October 16, 2008

Stocks below Book Value

The recent downtrend in the stock markets is posing challenges to investors looking for safe returns. The carnage in the market has led to erosion of market capitalisation of even fundamentally strong companies with a consistent financial performance and investor wealth creation track record. We have identified companies, which have a stable dividend payment record and which are trading below their book value. Such stocks offer a safe haven to investors where safety is of greater priority compared to high returns. Exhibit 1: Stocks below Book Value Dividend % 2008 40 85 28 35 40 170 155 80 20 42.5 50 25 50 45 150 35 50 45 70 40 150 38 40 50 20 Dividend % 2007 40 85 28 30 38 120 115 80 20 42.5 35 20 45 45 150 30 35 40 65 40 150 35 18 40 18 Mcap (Rs Cr) 4382 3573 3069 2810 2580 2415 2207 1629 1253 947 861 775 722 631 620 541 519 501 329 284 237 198 181 160 95 Dividend CMP 52W Yield (Rs) High (%) (14/10/08) (Rs) 5.8 69.55 219.45 6.7 126.55 332 4.8 58.80 131.05 5.6 62.90 143 7.5 53.20 129.8 10.5 162.15 490.05 3.4 455.15 969.9 3.9 102.35 277 6.9 29.10 96.5 7.0 60.90 231 11.6 43.10 116.8 4.9 51.25 184.7 10.4 48.15 110.5 5.7 79.10 370 7.3 41.05 95.8 5.7 61.35 178.25 6.7 74.25 256.7 6.2 72.35 147 4.0 176.10 347.8 4.0 99.30 370 7.3 41.35 124 4.6 82.60 207.9 7.6 52.75 244 8.8 56.75 241 4.4 45.95 286 52W Low (Rs) 62.5 115.05 46.00 53.10 47.70 159.00 380.00 94.05 25.10 57.60 40.00 45.00 44.15 74.90 36.50 51.50 72.25 60.10 160.00 76.00 39.05 74.00 46.00 52.60 42.00

Co Name MTNL Ship. Corp. (I) Syndicate Bank Allahabad Bank Andhra Bank Chennai Petroleum J&K Bank Nirma Bank of Mah GNFC Bongaigaon Ref. Guj Inds Power Varun Ship. Co. GSFC Graphite India Deepak Fert JK Cements Ltd TN Newsprint Tata Coffee Sasken Comm Tech West Coast Paper Zensar Technologies CEAT Mangalam Cement Spanco Telesys

I-direct code MTNL SCI SYNBN ALLBAN ANDBAN MADREF JAMKAS NIRMA BANMAH GNFC BONREF GUJIP VARSHI GSFC CAREVE DEEFER JKCEME TAMNEW CONCOF SASCOM WESCOA FUJICI CEAT MANCEM KADLEA

FV 10 10 10 10 10 10 10 5 10 10 10 10 10 10 2 10 10 10 10 10 2 10 10 10 10

Price/BV# 0.37 0.63 0.79 0.65 0.79 0.70 0.97 0.63 0.71 0.51 0.75 0.68 0.79 0.43 0.89 0.77 0.68 0.76 0.96 0.67 0.59 0.97 0.36 0.74 0.31

Source: Capitaline, ICICIdirect.com Research

# Price/Book Value: A ratio used to compare a stock's market value to its book value. It is calculated by dividing the current closing price of the stock by the latest book value per share.

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RATING RATIONALE ICICIdirect endeavours to provide objective opinions and recommendations. ICICIdirect assigns ratings to its stocks according to their notional target price vs. current market price and then categorises them as Outperformer, Performer, Hold, and Underperformer. The performance horizon is two years unless specified and the notional target price is defined as the analysts' valuation for a stock. Outperformer: 20% or more Performer: Between 10% and 20% Hold: +10% return Underperformer: -10% or more Pankaj Pandey Head - Research ICICIdirect Research Desk, ICICI Securities Limited, Mafatlal House, Ground Floor, 163, HT Parekh Marg, Churchgate, Mumbai 400 020 research@icicidirect.com pankaj.pandey@icicidirect.com

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