19 January 2017
Market snapshot
Equities - India
Close
Chg .%
Sensex
27,258
0.1
Nifty-50
8,417
0.2
Nifty-M 100
15,330
0.6
Equities-Global
Close
Chg .%
S&P 500
2,272
0.2
Nasdaq
9,342
-0.1
FTSE 100
7,248
0.4
DAX
11,599
0.5
Hang Seng
9,803
1.0
Nikkei 225
18,894
0.4
Commodities
Close
Chg .%
Brent (US$/Bbl)
54
-2.4
Gold ($/OZ)
1,204
-1.1
Cu (US$/MT)
5,741
0.2
Almn (US$/MT)
1,839
2.0
Currency
Close
Chg .%
USD/INR
68.1
0.2
USD/EUR
1.1
-0.8
USD/JPY
114.7
1.8
YIELD (%)
Close 1MChg
10 Yrs G-Sec
6.5
0.0
10 Yrs AAA Corp
7.5
0.0
Flows (USD b)
18-Jan
MTD
FIIs
0.0
-0.5
DIIs
0.0
0.4
Volumes (INRb) 18-Jan MTD*
Cash
225
204
F&O
4,443
3,549
Note: YTD is calendar year, *Avg
YTD.%
2.4
2.8
6.8
YTD.%
1.5
1.0
1.5
1.0
4.3
-1.2
YTD.%
-3.2
4.5
3.9
7.9
YTD.%
0.2
1.1
-2.0
YTDchg
-0.1
-0.1
CY16
2.9
5.3
CY16*
220
3,447
Today’s top research ideas
Tata Communications (INITIATING COVERAGE): Connecting the
globe; Phase 2.0: Improving margin & RoCE, low leverage
v
Tata Communications (TCOM) has transformed from a long-distance voice services
provider to a full-service data connectivity provider. Its deep connectivity and array
of customized solutions should drive a healthy 14% core EBITDA CAGR over FY16-19
in a largely commoditized market.
v
The recently-announced sale of its African venture, Neotel, and data center should
(a) deleverage TCOM’s balance sheet by ~48% to INR 60b, (b) reduce capex 40%
annually, (c) improve FCF and RoIC to ~18% by FY19.
v
Despite its presence in the B2B space, we believe TCOM is better placed than
traditional telecom companies like BHARTI and IDEA with better competitive
position and lower capital intensity providing healthy scope of RoCE improvement.
v
The stock trades at an EV of 6x FY19E EBITDA, despite ~40% price appreciation in
the last six months. We recommend Buy; our SOTP-based target price is INR 778 (7x
FY19E EV/EBITDA). Further, TCOM offers INR 176/share land value to minority
shareholders subject to Government approval for land demerger.
Research covered
Cos/Sector
Tata Communications
IOC
Havells India
KPIT Technologies
Results Expectation
Key Highlights
Connecting the globe
Full throttle; Paradip refinery in ramp-up mode
Market share gains neutralize demonetization impact
In-line revenue growth, but margins disappoint again
Axis Bank | Federal Bank | Yes Bank | MindTree
Piping hot news
RBI replaces 60% of demonetised notes
v
The Reserve Bank of India (RBI) has infused around 60 per cent of the total
banned currency notes after demonetisation. The RBI Governor Urjit Patel told
a parliamentary standing committee on finance on Wednesday that the central
bank had infused new currency notes worth around Rs 9.2 lakh crore into the
system.
Quote of the day
We like to buy businesses, but we don’t
like to sell them.
Chart of the Day: ILD voice minutes shifting to VOIP
Research Team (Gautam.Duggad@MotilalOswal.com)
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
Investors are advised to refer through important disclosures made at the last page of the Research Report.

In the news today
Kindly click on numbers for the detailed news link
1
The Cabinet Committee on
Economic Affairs (CCEA), headed
by Prime Minister Narendra Modi,
approved the market listing of all
five government-owned general
insurance companies (GICs),
namely New India Assurance,
United India Insurance, Oriental
Insurance, National Insurance…
2
Warburg Pincus buys 14% stake in PVR for Rs 820 cr
Global private equity firm Warburg Pincus on Wednesday announced its
affiliates have acquired an equity stake of 14 per cent in multiplex chain
PVR for about Rs 820 crore. The stake is being acquired from affiliates of
private equity firm Multiples who will remain a long-term investor with a
14 per cent equity stake and the current promoters, who will continue to
drive the business and remain the largest shareholders with a
shareholding greater than 20 per cent. Ajay Bijli, chairman and managing
director (MD), PVR, said, “This is a liquidity event to accommodate
investment by Warburg Pincus, and both Renuka and I have divested nine
and five per cent stake, respectively.
GIC Re, 4 other insurers to be
listed soon
3
Service tax kitty of
Maharashtra, TN, K'taka, WB,
Guj to swell in GST: Icra
Icra has assessed that
Maharashtra, Tamil Nadu,
Karnataka, West Bengal and
Gujarat are likely to gain
significantly in service tax
revenues under the goods and
services tax (GST) regime, likely
from July 1. Tax revenues related
to services of nearly all states are
likely to be …
4
Truck and bus maker Ashok
Leyland on Wednesday
introduced two new trucks – Guru
and Partner – to fill a gap in its
portfolio in the ICV (intermediate
commercial vehicle) and
strengthen its presence in the
light commercial vehicle segment
(LCV), respectively…
Ashok Leyland eyes market
share growth with new trucks
Guru and Partner
5
India to grow at 7.7% riding on
strong consumption: UN
The United Nations on
Wednesday pegged India’s
growth rate at 7.7 per cent in
2017 and 7.6 per cent in 2018 on
expectation of strong private
consumption. “India has
positioned itself as one of the
most dynamic emerging
economies ... Investment demand
is expected to pick up slightly,
supported by monetary easing,
government efforts towards
infrastructure investments and
public-private partnerships, and
domestic reforms…
6
Chandra’s true test will be
shutting down Tata’s loss-
making businesses: Aswath
Damodaran
7
Rs 15, 000cr dividend row: Anil
Agarwal’s Vedanta makes
counter offer to govt, says will
buy back Hindustan Zinc
shares
Tata Sons chairman-designate N.
Chandrasekaran’s true test will be
when he shuts down the loss-
making businesses of the group
and is able to get away with it,
says Aswath Damodaran,
professor of finance at the Stern
School of Business…
After the government sought a
whopping R15,000 crore as
dividend in 2016-17 from the
cash-rich Hindustan Zinc (HZL) in
which it has 29.5% stake,
billionaire Anil Agarwal-led
Vedanta Resources…
19 January 2017
2

Tata Communications
BSE Sensex
27,258
S&P CNX
8,417
Initiating Coverage | Sector: Telecom
CMP: INR 667
TP: INR778 (+17%)
Buy
Connecting the globe
Phase 2.0: Improving margin, low leverage, Improving RoCE
n
Stock Info
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
M.Cap. (INR b)
M.Cap. (USD b)
Avg Val, INRm
Free float (%)
TCOM IN
285.0
687 /326
1/49/56
190.1
2.8
402
25.0
FY18E
191.7
33.7
10.1
35.5
153.5
32.6
18.8
20.5
238.9
10.7
19.0
n
Financial Snapshot (INR b)
Y/E MARCH
FY16 FY17E
Net Sales
205.5 186.1
EBITDA
31.0 30.0
Net Profit
0.4
4.0
EPS (INR)
1.6 14.0
EPS Gr. (%)
1,986.6 801.0
BV/Share (INR)
-14.7
-2.9
P/E (x)
429.5 47.7
P/BV (x)
-45.5 -230.9
RoE (%)
-91.6 -159.4
RoCE (%)
0.9
5.9
RoIC
1.0
8.2
n
n
Tata Communications (TCOM) has transformed from a long-distance voice services
provider to a full-service data connectivity and value-added services provider. Its
deep connectivity and array of customized solutions should drive a healthy 10%
CAGR in data revenue over FY16-19 in a largely commoditized market. Yet, its
focus on (a) the higher-margin Enterprise segment, and (b) value-added services
should support a 490bp expansion in core EBITDA margin over FY16-19.
The recently-announced sale of its African venture, Neotel, and data center should
help deleverage TCOM’s balance sheet by ~48% to INR60b. While this is factored in
street estimates, we believe (a) the impending 40% capex reduction, (b) higher
FCF, and (c) RoIC improvement to ~18% by FY19 are not.
Despite its presence in the B2B space, we believe TCOM is better placed than
traditional telecom companies like BHARTI and IDEA on the business front. TCOM’s
better competitive position, low regulatory risk, and lower capital intensity
provides healthy scope of RoCE improvement.
Factoring healthy 14% Core EBITDA CAGR over FY16-19 and subsequent
deleveraging potential, the stock trades at an EV of 6x FY19E EBITDA. This is
despite ~40% stock price appreciation in the last six months. We recommend Buy;
our SOTP-based target price is INR778 (7x FY19E EV/EBITDA). Further, TCOM offers
INR176/share land value to minority shareholders subject to Government approval
for demerger of the land. Government’s recent tax bill supporting the land
demerger and our channel checks indicate potential monetization in current
Government’s regime.
Shareholding pattern (%)
As On
Dec-16 Sep-16 Dec-15
Promoter
75.0
75.0
75.0
DII
9.1
10.8
14.1
FII
11.1
8.9
6.5
Others
4.9
5.3
4.4
FII Includes depository receipts
Poised for steady growth in enterprise data business
TCOM’s growing focus on the data business (contributing 57% of core revenue),
leveraging its 710,000km deep submarine network and leadership position in
emerging markets, holds it in good stead. Cisco expects business IP traffic to
grow at a CAGR of 18% over the next five years. TCOM’s shift from a
commoditized network provider to a full-service customized enterprise solutions
provider has led to sticky clientele growth. Its value-added offerings like unified
communication, hosting, managed security, and a host of sector-specific data
offerings also provide strong growth potential. We expect TCOM’s data segment
to record healthy 10% revenue CAGR over FY16-19.
Expect strong data-led margin expansion to continue
Despite the perennial price decline, we expect margin expansion to continue in
TCOM’s Traditional network business on the back of operating leverage. After
300bp expansion over FY13-16, we expect 310bp expansion over FY16-19. The
base of the Growth and Transformation segments remains low, despite steady
45-50% CAGR. We believe scale benefits will allow these segments to turn highly
profitable over FY16-19, with EBITDA margin benefit of about 10-15 percentage
points. We expect TCOM’s core EBITDA margin to expand ~490bp to ~20%,
driven by the data segment. This should drive 14% EBITDA CAGR over FY16-19.
19 January 2017
3

Stock Performance (1-year)
Tata Comm
Sensex - Rebased
2,150
1,800
1,450
1,100
750
Improving balance sheet – RoCE expanding, FCF healthy
The recently-announced sale of the African venture, Neotel, and data center is
expected to generate ~INR55b, which is likely to be used to reduce debt by ~48% to
INR60b. While this is factored in the valuations, we believe the incremental gains of
lower capex intensity (about 40% reduction), RoIC expansion from 6% in FY16 to
~18% in FY19E, and annual FCF generation of INR 10b in FY19E from negative FCF in
FY16 (cumulative FCF generation potential of INR17.5b over FY18-19E) are not.
Better placed than conventional telcos
TCOM is better placed than the conventional telcos. While a B2B business model is
generally perceived to suffer from high competition, weak FCF and low RoCE, in the
telecom space, this is not really so. In TCOM’s enterprise data business, competitive
pressures are lower than in the consumer telecom market. Further, capex intensity
is significantly low at about 10% of revenue, leading to healthy FCF generation; for
BHARTI/IDEA, capex is 15-18% of revenue. TCOM is subject to limited regulatory
risk; BHARTI and IDEA are exposed to high spectrum and quality of service related
regulatory intervention. While we expect TCOM’s RoIC to expand to ~18% by FY19,
BHARTI and IDEA’s RoCE is likely to remain below cost of capital. We believe TCOM
has high re-rating potential and should enjoy a valuation of 7x EV/EBITDA in a
market where BHARTI/IDEA trade at 6-7x one-year forward EV/EBITDA.
SOTP valuation
Particulars
FY18E FY19E
EBITDA (INRmn)
33,731 39,996
multiple (x)
7.0
7.1
Voice EBITDA (INRmn)
4,082 3,938
multiple (x)
3.0
3.0
Data EBITDA (INRmn)
29,648 36,058
multiple (x)
7.5
7.5
Enterprise Value(INRmn) 234,610 282,251
Net Debt (INRmn)
71,243 60,556
Equity value (INRmn)
163,367 221,694
No of shares (mn)
285
285
Equity value/share(INR)
573
778
% Upside(Downside)
-14%
17%
Land Bank (INR)
176
176
Fair Value (INR)
749
954
CMP ((JNR)
667
667
% Upside(Downside)
12%
43%
Source: MOSL
SOTP valuation of INR778/share implies 17% upside
Our implied EV/EBITDA multiple of 7.1x to core FY19E EBITDA of INR40b is on the
back of (1) EV of 3x FY19E EBITDA of INR4b for voice, given weak business visibility,
(2) EV of 7.5x FY19E EBITDA of INR36b for data, given healthy growth, improving
EBITDA margin and FCF generation potential over the next three years. We believe
the stock has strong re-rating potential despite the sharp run-up in the last three
months, as incremental FCF generation and RoCE improvement do not appear to
have been factored at current valuations of 6x FY19E EV/EBITDA.
Land bank valued at INR176/share
TCOM’s minority shareholders have a share in the land bank, valued at
INR176/share after factoring capital gains tax and dividend distribution tax. While
pending for over 15 years, there has been considerable progress towards the
eventual monetization of the land after the current NDA government assumed
power. In August 2016, the government passed the Taxation Bill, which takes care of
the issues relating to capital gains tax liabilities. Also, a 51% government-owned
entity, Hemisphere Properties has been created to transfer the demerged land. In
our recent interactions, DoT has indicated that there is strong likelihood of the land
transfer under the current government.
19 January 2017
4

18 January 2017
Update
| Sector:
Oil & Gas
IOC
Buy
BSE SENSEX
27,236
S&P CNX
8,398
CMP: INR349
Full throttle
TP: INR464(+33%)
Paradip refinery in ramp-up mode
Utilization of Paradip refinery more than 80% in December
n
Stock Info
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
M.Cap. (INR b)
M.Cap. (USD b)
Avg Val, INRm
Free float (%)
IOCL IN
4,856
360 / 173
16/39/53
1,704.4
25.3
1113
41.7
n
n
n
Financials Snapshot (INR b)
Y/E March
2016 2017E 2018E
Sales
3,544 3,574 4,203
EBITDA
217.0 395.2 367.6
Adj. PAT
98.5 239.5 194.5
Adj. EPS (INR)
20.3
49.3
40.1
EPS Gr. (%)
203.8 143.0 (18.8)
BV/Sh.(INR)
156.5 179.8 205.2
RoE (%)
13.6
29.3
20.8
RoCE (%)
10.3
19.8
14.9
Payout (%)
36.4
34.5
34.7
Valuations
P/E (x)
17.2
7.1
8.7
P/BV (x)
2.2
1.9
1.7
EV/EBITDA (x)
10.1
5.6
6.1
Div. Yield (%)
2.0
4.2
3.4
Shareholding pattern (%)
Dec-16 Sep-16 Dec-15
As On
Promoter
58.3
58.3
58.6
DII
11.2
11.2
13.0
FII
5.3
5.4
3.9
Others
25.2
25.1
24.6
FII Includes depository receipts
Stock Performance (1-year)
IOCL
Sensex - Rebased
360
310
260
210
160
Our channel checks suggest that the refinery clocked more than 1mmt of
throughput in Dec-16, implying more than 80% utilization.
All products have been certified and their commercial dispatches have
commenced.
Out of five sections of the Paradip-Raipur-Ranchi pipeline, except Ranchi
segment, filling of all other segments has commenced recently. We expect
product deliveries of 3-4mmtpa starting in next few days through the pipeline.
Over past few years, we have seen IOCL increasing its ROs in the south,
primarily led by higher product availability from the Paradip refinery. This will
help it gain market share in the south.
IOCL has outlined total capex of INR1.75t for next seven years. This includes
INR500b on refining, INR400b on marketing infrastructure, INR300b on
petrochem, INR220b on pipelines and rest on E&P.
Of this, we believe projects worth INR510b are imminent over FY17-19.
This would result in free cash flow generation of INR47 per share over FY17-19.
Out of INR1.75t, INR1.4t is expected to be spent on brownfield refinery
expansions, petrochem segment, marketing and pipeline infrastructure. We
believe this would help the company to improve its return ratios further.
Over last three fortnights, the oil marketing companies have taken price hikes
consistently to reflect increase in benchmark prices. Gross margins on auto
fuels have been maintained at INR2.7-2.8/liter.
Price hikes have come in a rising oil price environment, which would lead to
inventory gains for the companies. The upcoming assembly elections also did
not seem to be an issue.
With expected non-compliance from OPEC/non-OPEC countries in terms of
production cuts, likely fall in demand growth from China and increase in
production from the US, we believe oil prices would not sustain above
USD60/bbl for long.
The government still has a leeway of INR12/14 per liter of increased excise
duty on petrol/diesel since Nov-2014. This makes us believe that the
deregulated regime would not be tampered with.
Global peers are trading at 10.7x FY18 EPS and 6.8x FY18 EV/EBITDA. IOCL is
trading at 8.7x FY18 EPS and 6.1x times FY18 EV/EBITDA.
We value IOCL using SOTP. Refining and petrochem segments are valued at 5x
FY19 EV/EBITDA, and marketing and pipeline segments at 7.5x FY19 EV/EBITDA.
IOCL continues to remain our top pick with a target price of INR464.
Capex composition suggests return ratios would improve
n
n
n
n
Recent price hikes debunk concerns about return of regulations
n
n
n
n
Valuation and recommendation
n
n
n
19 January 2017
5

18 January 2017
3QFY17 Results Update | Sector: Capital Goods
Havells India
BUY
BSE SENSEX
27,236
Bloomberg
Equity Shares (m)
M.Cap.(INR b)/(USD b)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
Avg Val. (INR m)
Free float (%)
S&P CNX
8,398
HAVL IN
624.6
236.7 / 3.5
460 / 259
14/5/25
603
38.4
CMP: INR378
n
TP: INR440 (+16%)
Market share gains neutralize demonetization impact
3QFY17 operating performance meaningfully above expectations:
Revenue
grew 13.2% YoY to INR15.1b in 3QFY17, significantly exceeding our estimate of
INR13.3b. Operating profit of INR1.9b (+4.0% YoY) too was above our estimate
of INR1.0b. Similarly, adjusted PAT of INR1.3b (+12% YoY) came in higher than
our estimate of INR0.7b.
Sales growth driven by market share gains:
Revenue beat was primarily driven
by market share gains across product categories. HAVL took several initiatives
to counter the impact of demonetization on sales, such as providing working
capital support to dealers and launching booster incentive schemes on reduced
targeted sales. These initiatives helped the company to gain market share and
grow despite overall contraction in the market place. The key business segment
Cables & Wires registered 17.4% YoY revenue growth to INR6.8b, supported by
volume growth of 21% YoY in Industrial segment and 17% YoY in Wires.
Electrical consumer durables’ revenues grew 19% YoY to INR3.4b, led by strong
revenue growth in Water heater and Fans segments.
Margins impacted due to launch of support schemes for dealers:
Gross margin
contracted 230bp YoY to 39%, as management launched schemes for dealers
to counter the demonetization impact. EBITDA margin contracted 110bp YoY to
12.7% (v/s est. of 7.8%). Ad spend stood at 3.5% of sales (4.2% in 3QFY16);
HAVL expects it to remain at similar levels in the coming quarters.
Working capital cycle elongates as Havells provides support to dealers:
Net
working capital cycle elongated to 30 days from 20 days in 3QFY16, led by
higher credit days provided to dealers. Creditors’ days were up to 30 from 20 in
3QFY16.
Valuation and view:
We raise our FY17/FY18E EPS by 19/6% to factor in the
lower-than-estimated impact of demonetization on the company’s financials.
We maintain
Buy
with a revised TP of INR440 (prior: INR390). We ascribe 32x
P/E (20% premium to 5 year average) multiple on its FY19E EPS of INR13.8.
(INR Million)
FY16E
2Q
3Q
4Q
13,359 13,304 14,754
-2.1
6.7
9.3
1,890 1,835 2,196
2.9
1.1
11.1
14.2
13.8
14.9
261
266
237
31
20
48
98
134
291
1,683 1,699 2,208
488
500
567
29.0
29.4
25.7
1,195 1,199 1,641
-0.1
3.2
34.7
1,204 1,183 1,637
-1.0
-0.4
23.6
1Q
14,668
17.1
2,004
23.7
13.7
280
16
307
2,022
567
28.0
1,456
36.3
1,450
33.7
FY17
FY16 FY17E MOSL
2Q
3QE
4QE
3QE
14,522 15,060 15,896 54,369 61,308 13,318
8.7
13.2
7.7
3.8
12.8
-0.9
2,034 1,907 1,819 7,479 7,861 1,034
7.6
4.0 -17.1
2.9
5.1 -43.0
14.0
12.7
11.4
13.8
12.8
7.8
308
301
370
922 1,259
300
19
15
0
126
50
19
253
264
323
687 1,147
270
2,030 1,877 1,773 7,119 7,699
985
572
537
518 1,988 2,194
281
28.2
28.6
29.2
27.9
28.5
28.5
1,458 1,340 1,255 5,130 5,505
704
22.0
11.8 -23.5
10.3
7.3 -41.7
1,409 1,325 1,255 5,109 5,585
704
17.0
12.0 -23.4
6.0
9.3 -40.9
Var.
13.1%
84.4%
Financials & Valuations (INR b)
2016 2017E 2018E
Y/E Mar
Net Sales
77.1
64.2
72.7
EBITDA
8.0
9.0
10.4
Adj PAT
4.8
5.6
7.5
Adj EPS (INR)
7.8
8.9
12.0
EPS Gr. (%)
-6.0
15.0
34.0
BV/Sh(INR)
41.0
45.8
50.7
RoE (%)
19.0
19.5
23.6
RoCE (%)
20.4
23.2
24.1
P/E (x)
48.8
42.4
31.7
P/BV (x)
9.3
8.3
7.5
n
n
Estimate change
TP change
Rating change
n
n
Quarterly Performance (Standalone)
Y/E March
Sales
Change (%)
Adj EBITDA
Change (%)
Adj EBITDA margin (%)
Depreciation
Interest
Other Income
PBT
Tax
Effective Tax Rate (%)
Reported PAT
Change (%)
Adj PAT
Change (%)
E: MOSL Estimates
1Q
12,523
-1.9
1,620
-1.4
13.1
248
30
170
1,489
421
28.2
1,068
-0.4
1,085
-0.4
90.6%
90.3%
88.1%
19 January 2017
6

RESULTS
FLASH
BSE SENSEX
27,836
S&P CNX
8,615
KPIT Technologies
Neutral
18 January 2016
Results Flash | Sector: Automobiles
CMP: INR145
TP: INR170(+17%)
We will revisit our estimates post
earnings call/management
interaction.
In-line revenue growth, but margins disappoint again
Flat quarter and margin miss
n
3QFY17 revenue declined 0.4% QoQ to USD123m, led by [1] seasonality: -2.5%,
[2] divestment of the functional safety product business: -0.4% and [3] cross-
Conference Call Details
currency headwinds: -0.6%.
th
Date:
19 January 2017
n
Revenue during the quarter grew 0.65% QoQ on a constant currency basis and
Time:
16:30am IST
excluding the impact of the divestment, in line with our estimate.
Dial-in details:
n
Gross margin contracted by 50bp QoQ to 29.0% (v/s est. of 30%) and EBITDA
+91-22-3960 0695
margin by 80bp QoQ (-440bp YoY) to 10.2% (v/s est. of 12.0%). Lower
utilization and salary corrections to select people impacted profitability in 3Q.
n
Adjusted PAT stood at INR475m (-15.5% QoQ), lower than our estimate of
Financials & Valuations (INR b)
INR619m (+10.2% QoQ), mainly on account of the miss on profitability, lower
2016
2017E
2018E
Y/E Mar
other income and higher interest expense.
577.5
677.8
809.1
Net Sales
89.8
98.3
118.3
A divestment, and an investment
EBITDA
45.7
64.7
81.5
n
In 3Q, KPIT divested its stake in Berlin-based KPIT Medini Technologies, a
NP
155.5
219.5
275.5
EPS (INR)
functional safety product business. The divestment took place as it [1] had
23.4
41.1
25.5
EPS Gr. (%)
applications beyond KPIT’s focused industries and [2] needed a wider and
894.0 1,054.2 1,252.0
BV/Sh. (INR)
different distribution network. Gains of INR261m were recorded as
16.9
20.3
21.6
RoE (%)
exceptional.
24.0
27.6
28.9
RoCE (%)
28.8
20.4
16.3
n
The proceeds from the divestment were ploughed into MicroFuzzy, a
Payout (%)
5.0
4.3
3.6
Div. Yield
powertrain solutions company. Numbers will be consolidated 4Q onward.
Valuation and view:
We will revisit our estimates post the earnings call. Outlook on
growth and margin resurrection will be keenly sought. Based on current estimates,
it trades at 8.1/9.7x FY18/19E EPS. Maintain
Neutral.
Quarterly Performance (Consolidated)
Y/E March
Revenue (USD m)
QoQ (%)
Revenue (INR m)
YoY (%)
GPM (%)
SGA (%)
EBITDA
EBITDA Margin (%)
EBIT Margin (%)
Other income
Interest
ETR (%)
PAT
QoQ (%)
YoY (%)
EPS (INR)
Headcount
Util excl. trainees (%)
Offshore rev. (%)
Fixed Price (%)
1Q
118
-3.3
7,583
9.9
28.2
18.7
1,512
9.5
7.3
106
47
27.9
444
-11.8
-12.6
2.2
10,839
66.4
44.7
26.2
FY16
2Q
3Q
125
123
5.3
-1.0
8,123
8,130
7.2
4.3
32.1
32.9
18.1
18.3
1,896
1,824
14.0
14.6
11.9
12.3
86
36
44
35
25.4
26.5
751
735
69.1
-2.1
6.3
12.5
3.8
3.7
10,659 10,559
69.7
69.1
44.9
41.2
27.1
29.1
4Q
124
0.7
8,407
10.2
35.3
19.1
2,333
16.2
13.6
20
25
13.4
885
20.4
75.7
4.4
10,910
70.2
42.1
26.4
1Q
120
-3.5
8,032
5.9
28.9
18.3
1,722
10.7
8.3
116
56
24.3
551
-37.8
24.0
2.8
11,288
68.1
41.5
28.5
FY17
2Q
3Q
123
123
3.0
-0.4
8,310
8,307
2.3
2.2
29.5
29.0
18.5
18.8
2,006
1,912
11.0
10.2
8.6
7.9
49
29
14
66
25.1
23.1
562
475
2.0
-15.5
-25.2
-35.4
2.8
3.7
11,666 11,881
69.2
69.2
43.3
43.6
28.0
FY16
4QE
125
1.5
8,480
0.9
30.3
17.4
2,101
12.9
10.6
34
63
23.1
667
40.4
-24.7
3.3
11,730
70.0
43.6
490
0.3
32,243
7.8
32.2
18.6
7,565
13.5
11.4
248
152
22.8
2,815
18.7
14.1
10,910
68.8
43.2
FY17E
491
0.1
33,129
2.7
29.4
18.2
7,741
11.2
8.9
228
199
23.9
2,254
-19.9
12.6
11,730
69.1
43.0
Est.
3QFY17
123
-0.6
8,283
1.9
30.0
18.0
2,016
12.0
9.5
86
39
26.0
619
10.2
-15.8
3.1
11,565
70.8
43.8
Var. (% /
bp)
0.1
14bp
0.3
30bp
-108bp
78bp
-10386bp
-186bp
-165bp
-65.9
70.2
-23.3
-2562bp
-1958bp
2.7
-160bp
-20bp
19 January 2017
7

December 2016 Results Preview | Sector: Financials
Axis Bank
Bloomberg
Equity Shares (m)
M. Cap. (INR b)/(USD b)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
Financial Snapshot (INR b)
Y/E March
2016 2017E
NII
OP
NP
NIM (%)
EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoA (%)
Payout (%)
Valuations
P/E(X)
P/BV (X)
P/ABV (X)
Div. Yield (%)
13.1
2.1
2.2
1.1
34.9
2.0
2.2
0.0
19.5
1.8
2.0
0.8
9.7
1.6
1.7
1.6
168.3
161.0
82.2
3.8
34.5
11.2
216.8
17.1
1.7
15.0
180.6
168.4
30.9
3.6
13.0
-62.4
229.8
202.3
5.8
0.5
0.0
AXSB IN
2382.8
1081 / 16
638 / 367
-3 / -14 / -1
2018E
212.1
189.6
55.4
3.6
23.2
79.1
248.9
226.5
9.7
0.8
17.6
2019E
256.7
222.0
111.8
3.6
46.9
101.9
287.6
269.8
17.5
1.4
17.6
n
n
n
CMP: INR454
n
TP: INR519 (+14%)
Neutral
ABV/Sh. (INR) 209.9
In line with the industry trend, we expect loan growth to moderate
to ~14% YoY. Deposit growth is likely to be higher at ~21% YoY, led
by strong CASA inflows. CD ratio would fall from 93% in 2QFY17 to
88%.
Sequentially, NIM is likely to contract ~15bp to 3.6% due to (a)
lower incremental spreads, (b) RBI’s temporary incremental CRR
hike, and (c) continued high stress addition. Though incremental
cost of funds would have fallen significantly, this would only
partially compensate for the negative impact.
AXSB had created a stressed asset watch list of INR252.5b (both
fund-based and non-fund based) in 4QFY16. The management has
guided for materially higher slippages from the watch list, above
the previous 60% guidance. As at the end of 2QFY17, the watch list
stood at INR137.9b. We continue to expect relatively high
proportion of slippages in FY17, leading to higher credit costs. High
provisions may be partially compensated by strong trading gains.
AXSB trades at 1.8x FY18E BV and 19.5x FY18E EPS. Neutral.
Key issues to watch for
Ø
Quantum of slippages from stressed asset watch list.
Ø
Quantum of loans rescheduled under the 5:25, SDR and S4A schemes.
Quarterly Performance
Net Interest Income
% Change (Y-o-Y)
Other Income
Net Income
Operating Expenses
Operating Profit
% Change (Y-o-Y)
Other Provisions
Profit before Tax
Tax Provisions
Net Profit
% Change (Y-o-Y)
Operating Parameters
NIM (Reported,%)
NIM (Cal, %)
Deposit Growth (%)
Loan Growth (%)
CD Ratio (%)
Asset Quality
OSRL (INR b)
OSRL (%)
Gross NPA (INR b)
Gross NPA (on cust. assets, %)
E: MOSL Estimates
1Q
40,562
22.5
22,983
63,545
22,624
40,921
41.3
11,218
29,703
9,919
19,784
18.7
3.8
3.9
13.2
23.5
92.5
85.2
3.0
42.5
1.4
FY16
2Q
40,621
15.2
20,414
61,035
24,755
36,280
14.7
7,072
29,208
10,051
19,156
18.9
3.9
3.9
14.2
23.1
92.0
84.3
2.8
44.5
1.4
3Q
41,621
15.9
23,378
64,998
25,148
39,851
20.2
7,126
32,725
10,972
21,753
14.5
3.8
3.8
16.2
21.0
93.2
77.5
2.5
57.2
1.68
4Q
45,526
19.8
26,940
72,466
28,481
43,985
9.6
11,683
32,302
10,759
21,543
-1.2
4.0
4.0
11.0
20.5
94.6
80.7
2.4
60.9
1.67
1Q
45,169
11.4
27,383
72,552
27,858
44,694
9.2
21,172
23,522
7,967
15,555
-21.4
3.8
3.8
16.3
21.2
96.4
73.6
2.1
95.5
2.5
FY17
2Q
45,139
11.1
25,397
70,535
29,534
41,002
13.0
36,227
4,774
1,584
3,191
-83.3
3.6
3.7
17.3
18.5
92.9
67.0
1.9
163.8
4.2
3QE
44,917
7.9
30,085
75,002
32,450
42,552
6.8
32,349
10,203
3,367
6,836
-68.6
3.6
20.8
14.2
88.1
4QE
45,380
-0.3
28,196
73,576
33,388
40,188
-8.6
32,177
8,011
2,664
5,348
-75.2
3.5
20.0
12.0
88.3
(INR Million)
FY16
168,330
18.3
93,715
262,044
101,008
161,036
20.3
37,099
123,938
41,701
82,237
11.8
3.9
3.8
11.0
20.5
94.6
80.7
2.4
60.9
1.7
FY17E
180,604
7.3
111,061
291,665
123,230
168,435
4.6
121,925
46,510
15,581
30,929
-62.4
3.6
20.0
12.0
88.3
196.1
5.3
226.7
5.8
226.7
5.8
19 January 2017
8

December 2016 Results Preview | Sector: Financials
Federal Bank
Bloomberg
Equity Shares (m)
M. Cap. (INR b)/(USD b)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
Financial Snapshot (INR b)
Y/E Mar
2016 2017E
NII
25.0 29.3
OP
14.2 18.7
NP
4.8
7.8
NIM (%)
3.2
3.2
EPS (INR)
2.8
4.5
EPS Gr. (%)
-52.9 63.5
BV/Sh. (INR)
47
51
ABV/Sh. (INR)
43
47
ROE (%)
6.0
9.3
ROA (%)
0.5
0.8
Payout (%)
29.3 23.2
Valuations
P/E(X)
23.8 14.5
P/BV (X)
1.4
1.3
P/ABV (X)
1.5
1.4
Div. Yield (%)
1.1
1.4
FB IN
1719.0
113 / 2
86 / 41
-5 / 11 / 14
2018E
33.4
21.0
9.4
3.1
5.5
20.6
55
51
10.4
0.8
23.2
12.1
1.2
1.3
1.7
2019E
41.6
27.0
12.2
3.1
7.1
29.7
60
57
12.3
0.8
23.2
9.3
1.1
1.2
2.2
n
CMP: INR66
n
TP: INR106 (+60%)
Buy
We expect 21% YoY (-1% QoQ) loan growth, aided by greater focus
on corporate credit growth. Traction in SME, agriculture and retail
loans would be maintained. We expect NIM to contract marginally
by 7bp QoQ (but expand 13bp YoY).
We build in higher opex growth of 20% YoY, led by demonetization-
related expenses.
Non-interest income would grow by 50%+ YoY, led by strong
trading gains, leading to strong PPoP growth of 41% YoY.
We expect slippages to increase marginally owing to stress in SME
book. We expect trading gains to be utilized for shoring up the
coverage ratio. Accordingly, we factor in higher credit cost.
PBT/PAT is expected to grow 14/15% YoY. We maintain Buy with a
target price of INR106. FB trades at 1.2x FY18E BV and 12.1x FY18E
EPS.
n
n
n
Key issues to watch for
Ø
Outlook on asset quality.
Ø
Strategy on balance sheet growth.
Quarterly Performance
Net Interest Income
% Change (YoY)
Other Income
Net Income
Operating Expenses
Operating Profit
% Change (YoY)
Other Provisions
Profit before Tax
Tax Provisions
Net Profit
% Change (YoY)
Operating Parameters
NIM (Cal, %)
Deposit Growth (%)
Loan Growth (%)
CD Ratio (%)
Asset Quality
Gross NPA (INR b)
Gross NPA (%)
E: MOSL Estimates
1Q
6,048
7.2
1,939
7,987
4,315
3,672
4.5
1,531
2,141
727
1,414
-35.8
3.2
16.7
10.1
68.7
13.0
2.6
FY16
2Q
6,083
0.4
1,823
7,906
4,540
3,366
-17.9
873
2,493
880
1,613
-32.9
3.1
14.3
5.0
68.9
15.0
2.9
3Q
6,052
3.1
1,833
7,885
4,630
3,255
-18.1
751
2,504
877
1,627
-38.5
3.1
14.1
9.8
70.5
16.8
3.2
4Q
6,859
10.1
2,269
9,128
5,183
3,945
-15.9
3,886
59
-44
103
-96.3
3.4
11.8
13.3
73.4
16.7
2.8
1Q
6,927
14.5
2,370
9,297
5,039
4,259
16.0
1,685
2,574
901
1,673
18.3
3.3
12.5
19.3
72.9
17.5
2.9
FY17
2Q
3QE
7,262
7,377
19.4
21.9
2,616
2,777
9,878
10,155
5,128
5,556
4,750
4,598
41.1
41.3
1,684
1,750
3,066
2,848
1,053
977
2,013
1,871
24.8
15.0
3.3
17.0
27.2
75.0
18.2
2.8
3.2
21.2
21.4
70.7
19.1
3.0
4QE
7,699
12.2
2,978
10,677
5,542
5,135
30.2
1,736
3,399
1,170
2,229
2,072.2
3.2
19.0
20.0
74.0
20.7
3.0
(INR Million)
FY16
25,042
5.2
7,864
32,906
18,668
14,238
-12.5
7,041
7,197
2,440
4,757
-52.7
3.2
11.8
13.3
73.4
16.7
2.8
FY17E
29,265
16.9
10,742
40,007
21,265
18,742
31.6
6,855
11,887
4,101
7,786
63.7
3.3
19.0
20.0
74.0
20.7
3.0
19 January 2017
9

December 2016 Results Preview | Sector: Financials
Yes Bank
Bloomberg
Equity Shares (m)
M. Cap. (INR b)/(USD b)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
Financial Snapshot (INR b)
Y/E March
2016 2017E
NII
45.7 57.5
OP
43.0 54.5
NP
25.4 31.4
NIM (%)
3.4
3.5
EPS (INR)
60.4 74.5
EPS Gr. (%)
25.8 23.4
BV/Sh. (INR)
327.8 386.8
ABV/Sh. (INR) 323.4 381.2
RoE (%)
19.9 20.9
RoA (%)
1.7
1.7
Div. Payout (%) 19.1 20.3
Valuations
P/E(X)
19.3 15.6
P/BV (X)
3.5
3.0
P/ABV (X)
3.6
3.1
Div. Yield (%)
0.9
1.1
YES IN
421.1
490 / 7
1450 / 632
-3 / 6 / 61
n
CMP: INR1,163 TP: INR1,500 (+30%)
n
Buy
2018E 2019E
72.3
91.8
69.2
87.1
40.4
50.2
3.6
3.7
95.8 119.3
28.6
24.5
463.0 558.0
456.7 549.9
22.6
23.4
1.8
1.8
20.3
20.3
12.1
2.5
2.5
1.4
9.7
2.1
2.1
1.8
n
n
n
n
On a lower base, we expect loan growth to be above the industry
average at 33%+ YoY (nearly 5x industry growth rates) on the back
of refinancing opportunities and strong growth in retail banking.
Despite benefits flowing in form of lower cost of funds, excess
liquidity, incremental CRR and competitive pressure on the lending
side would pressurize NIMs (factored a 10bp decline).
Consequently, NII growth is expected to be healthy at ~27% YoY –
the best among peers.
Non-interest income growth is likely to be ~23% YoY, led by strong
growth from third-party distribution, continued momentum in
financial advisory and higher trading gains.
Led by aggressive franchise expansion, we expect opex growth to
remain high (30%+ YoY).
Asset quality performance so far has been significantly better than
industry; we expect this trend to continue.
YES trades at 2.5x FY18E BV and 12.1x FY18E EPS. Return ratios also
remain strong (RoA of ~1.8% and RoE of 20%+). Maintain Buy.
Key issues to watch for
Ø
Implementation of retail strategy on assets and liabilities sides.
Ø
Performance on asset quality and quantum of loans rescheduled under
5:25 scheme/sale to ARCs.
Quarterly Performance
Net Interest Income
% Change (Y-o-Y)
Other Income
Net Income
Operating Expenses
Operating Profit
% Change (Y-o-Y)
Other Provisions
Profit before Tax
Tax Provisions
Net Profit
% Change (Y-o-Y)
Operating Parameters
NIM (Cal, %)
Deposit Growth (%)
Loan Growth (%)
CD Ratio (%)
Tax Rate (%)
Asset Quality
Gross NPA (INR B)
Gross NPA (%)
E: MOSL Estimates
1Q
10,598
42.2
5,452
16,050
6,967
9,083
43.7
980
8,103
2,591
5,512
27.7
3.5
25.2
35.1
83.6
32.0
3.7
0.5
FY16
2Q
3Q
11,085 11,569
29.4
27.3
6,181
7,461
17,266 19,030
7,074
7,534
10,191 11,496
24.7
33.2
1,039
1,479
9,152 10,016
3,048
3,260
6,104
6,757
26.5
25.1
3.6
24.0
29.0
80.5
33.3
4.9
0.6
3.6
23.1
26.7
83.2
32.5
5.6
0.7
4Q
12,414
27.1
8,028
20,443
8,188
12,255
30.7
1,865
10,390
3,369
7,021
27.4
3.6
22.5
30.0
87.9
32.4
7.5
0.8
1Q
13,166
24.2
9,005
22,171
9,103
13,068
43.9
2,066
11,001
3,683
7,318
32.8
3.5
28.6
33.0
86.4
33.5
8.4
0.8
FY17
2Q
3QE
14,462 14,632
30.5
26.5
8,879
9,175
23,340 23,807
9,481
9,823
13,860 13,985
36.0
21.7
1,617
1,375
12,243 12,610
4,228
4,161
8,015
8,449
31.3
25.0
3.7
28.9
37.7
86.1
34.5
9.2
0.8
3.6
32.5
33.2
83.6
33.0
10.8
1.0
4QE
15,264
23.0
10,624
25,888
11,163
14,724
20.2
1,856
12,869
4,096
8,773
25.0
3.6
27.0
25.0
86.5
31.8
10.4
0.8
(INR Million)
FY16
45,667
30.9
27,121
72,789
29,764
43,025
32.4
5,363
37,662
12,268
25,394
26.6
3.6
22.5
30.0
87.9
32.6
7.5
0.8
FY17E
57,524
26.0
36,512
94,036
39,570
54,466
26.6
6,914
47,553
16,168
31,385
23.6
3.6
27.0
25.0
86.5
34.0
10.4
0.8
19 January 2017
10

December 2016 Results Preview | Sector: Technology
MindTree
Bloomberg
Equity Shares (m)
M. Cap. (INR b)/(USD b)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
Financial Snapshot (INR b)
Y/E Mar
2016 2017E
Sales
EBITDA
PAT
EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
Div Yld (%)
14.7
3.7
2.0
19.8
3.4
11.8
2.4
14.5
3.0
8.9
2.3
13.8
2.7
8.3
2.9
46.9
8.3
6.0
35.9
16.5
142.4
27.4
30.6
29.3
52.6
7.1
4.5
26.6
-25.8
153.5
18.0
19.6
47.0
MTCL IN
167.7
88 / 1
804 / 400
16 / -19 / -31
n
CMP: INR526
n
TP: INR520 (-1%)
Neutral
2018E
60.3
9.3
6.1
36.2
36.1
175.3
22.0
25.0
33.1
2019E
68.1
9.7
6.4
38.1
5.3
195.3
20.6
22.9
39.3
n
n
n
n
MTCL’s performance continues to be weighed upon by [1] cross-
currency movements, [2] project cancellations, [3] slower ramp-up
at large clients, and [4] continued weakness in Bluefin.
We expect these factors to result in 0.3% decline in revenue to
USD193m. We are modeling 0.4% QoQ growth in CC terms.
We don’t see margins reviving till revenue growth bounces back.
Ongoing optimization measures and cessation of revenue decline
are likely to result in flat margins QoQ.
We expect the trend of robust deal wins to continue. The company
won deals with TCV of USD888m LTM (average of USD222m per
quarter), of which 36% is Digital.
Our PAT estimate for the quarter is INR1.1b, which implies 11.6%
QoQ growth and 30% YoY decline.
The stock trades at 19.8x FY17E and 14.5x FY18E earnings. Neutral.
Update on top clients, pricing pressure and outlook, going forward.
Margin trajectory, going forward, given the increased investments and
revenue growth issues.
Deal wins during the quarter and growth in Digital.
Key issues to watch for
Ø
Ø
Ø
EV/EBITDA (x) 10.1
Quarterly Performance
Y/E March
Revenue (USD m)
QoQ (%)
Revenue (INR m)
YoY (%)
GPM (%)
SGA (%)
EBITDA Margin (%)
EBIT Margin (%)
Other income
ETR (%)
PAT
QoQ (%)
YoY (%)
EPS (INR)
Headcount
Util incl. trainees (%)
Attrition (%)
Offshore rev. (%)
Fixed Price (%)
E: MOSL Estimates
1Q
154
4.4
9,775
15.9
41.1
24.0
17.1
13.6
321
22.4
1,283
-0.3
-0.9
7.6
14,427
70.3
18.4
51.9
48.9
FY16
2Q
3Q
180
184
16.9
2.3
11,693
12,145
31.6
33.2
41.3
40.3
22.8
22.6
18.5
17.7
15.8
14.8
195
147
22.5
22.6
1,582
1,509
23.3
-4.6
15.1
7.2
9.4
9.0
15,582
16,243
71.4
68.5
17.1
16.0
47.6
45.5
49.7
50.0
4Q
195
5.7
13,203
43.8
38.0
21.3
16.7
13.1
42
25.0
1,330
-11.9
3.3
7.9
16,623
69.4
15.7
42.4
47.7
1Q
199
2.1
13,276
35.8
37.0
22.3
14.7
10.8
198
24.2
1,235
-7.1
-3.7
7.4
16,110
71.4
16.5
40.5
48.7
FY17E
2Q
3QE
193
193
-3.0
-0.3
12,954
12,995
10.8
7.0
34.2
34.3
21.7
21.7
12.5
12.6
8.6
8.6
170
275
26.0
24.0
948
1,058
-23.2
11.6
-40.1
-29.9
5.6
6.3
16,219
16,119
71.4
71.5
16.4
40.8
40.6
50.6
FY16
4QE
197
2.2
13,372
1.3
35.4
21.2
14.2
10.2
256
24.0
1,233
16.5
-7.3
7.3
16,419
72.0
40.8
715
22.5
46,896
31.7
40.2
22.5
17.7
14.8
810
22.4
6,033
12.5
35.9
16,623
69.9
46.6
(INR m)
FY17E
781
9.2
52,597
12.2
35.2
21.7
13.5
9.6
900
24.5
4,474
-25.8
26.6
16,419
71.6
40.7
19 January 2017
11

In conversation
1. Tata Steel: india to be net exporter; optimistic of 2017 growth;
TV Narendran, Managing Director
n
n
n
n
n
n
Optimistic of 2017 being a better year for Indian steel industry than 2016 on
back of increase in government expenditure on infra.
Demand growth likely to be between 5-6%; expect at least a similar growth
number for next year.
India imports 700,000-800,000 tonnes of steel and will be a net exporter soon
because India already has raw materials and efficient producers.
US steel market was disappointing in 2016 in terms of consumption but China
and Russia were not as bad as expected by the World Steel Association.
Going forward too, both Chinese and US governments have promised to spend
more on infra, so steel consumption is expected to go up.
South East Asia is the most exciting region after India for steel consumption.
2. Havells: See no note ban pain in q4, margins to improve;
Anil Rai Gupta, CMD
n
n
n
n
n
Do not see much impact of demonetisation on the 4th quarter numbers as
business is coming back to normal with the availability of cash.
See market share gain in many product categories as business started shifting
from un-organised to organised sector.
There was a general uptick in offtake in all the segments even after seeing a de-
growth of ~40% in CFLs.
Margins impacted by 1.5-2% in November and December due to
demonetisation; these should revert to the normal levels in coming months.
Company is constantly reviewing its M&A strategy given the fact that it is in the
growth phase and has cash on balance sheet.
19 January 2017
12

From the think tank
1. Baby steps to GST. by The Business Line
n
On the face of it, it is a relief that the Centre and States have sorted out the
issue of ‘dual control’, paving the way for an early introduction of the Goods and
Services Tax (GST). Bureaucracies are not known to fight for working more; yet,
here the tax departments seem to have goaded their respective States and the
Centre into a turf war over assessees. This is despite the fact that each assessee
will fork out an equal share of revenue to both by way of CGST and SGST! The
Centre has largely allowed States to exercise administrative power over
assessees with a turnover of less than ₹1.5 crore, with the Centre exercising
control only over 10 per cent of the assessees in this category.
2. Oxfam slams top 1% of wealthy in india; here’s why fm arun
jaitley must snub calls for taxing them more in Budget 2017. by
The Financial Express
n
Though the Oxfam analysis of how the top 1% of Indians own 58% of the country’s
wealth—at the global level, Oxfam says the wealth of eight persons equals that of
the bottom 50%—suggests the wealthy are cornering all the benefits of growth
and signals that finance minister Arun Jaitley must find new ways to tax them in
the coming budget, this is a distortion of reality. After all, even though the rich
have grown wealthier, incomes of the 99% have also grown rapidly over the years,
which is why poverty levels have fallen as fast as they have—faster growth is what
will make poverty fall even more, not wealth redistribution.
3. Tata sons’ new chairman has twin obstacles—a family and a
conglomerate. by Sundeep Khanna
n
As Natarajan Chandrasekaran prepares to lead the vast, multi-business Tata
group, the burden of management history weighs heavily against him. He takes
over as the new head of a family business, a period of transition when groups
are known to struggle not just in India but across the world. Indeed, so high is
the stress at such a time that survival itself isn’t always guaranteed for most.
According to the US-based consulting firm Family Business Institute, only 30% of
family businesses last into a second generation and a mere 3% into the fourth
generation or beyond.
4. Imagine there's no countries. by Swaminathan s anklesaria
aiyar
n
Brexit, the electoral triumph of Donald Trump and the rise of politicians like
Nigel Farage in Britain and Mar ine Le Pen in France are all signs of a backlash
against globalisation. But don't exaggerate this. The world still resonates with
positive outcomes of globalisation, which remains popular in all emerging
markets and, hence, in most of the world. Remember, globalisation is not just
about commerce and investment. It is more fundamentally about a
universalisation of values and ideals in place of the land-grabbing,
moneygrabbing nationalism of yore. That shift to universal values remains
strong, and is best exemplified by a place I was lucky enough to visit this month:
Antarctica.
19 January 2017
13

International
5. More questions than answers in Donald Trump’s mideast
rhetoric. by David Gardner
n
Donald Trump, due to be inaugurated as US president this Friday, has already
stirred up the world, from Beijing to Berlin, with his foreign policy nostrums. In
the absence of concrete policies, one can only judge by his attitudes. Yet on the
Middle East it may be rash to assume all his campaign remarks — including
against Muslims — were rhetoric. If he sticks to his views on a region plagued by
implosion and explosion, Mr Trump could fall into its elephant traps or
disappear down its myriad rabbit holes.
19 January 2017
14

Click excel icon
for detailed
valuation guide
CMP
(INR)
925
87
2,704
941
21,097
22,442
593
367
189
3,089
1,216
197
5,677
523
383
Valuation snapshot
ROE (%)
FY16 FY17E FY18E
25.8
20.9
33.2
18.7
19.4
35.8
22.4
6.1
14.0
43.6
15.4
4.5
19.9
18.3
24.1
18.8
17.1
11.8
13.3
6.0
18.3
11.3
16.6
6.6
10.9
11.2
9.3
19.9
13.7
Loss
Loss
Loss
Loss
5.5
1.2
Loss
7.6
7.0
-2.7
21.1
24.9
15.1
31.5
21.4
27.1
19.6
10.8
11.4
15.1
18.3
21.9
23.5
29.4
15.9
19.7
40.3
19.9
10.9
13.6
39.0
14.5
7.7
23.1
11.5
26.5
17.0
5.8
10.9
11.2
9.3
18.7
10.4
7.5
15.5
Loss
13.6
12.4
9.7
20.9
11.9
8.1
Loss
5.6
1.4
10.4
4.8
4.8
7.5
5.2
4.7
21.1
28.6
16.6
31.0
19.5
26.0
19.1
11.4
11.3
18.4
16.8
23.6
26.5
30.9
20.0
24.5
41.6
21.1
16.3
14.7
37.5
14.5
10.3
23.1
15.9
29.5
19.2
9.7
11.8
9.7
10.4
19.5
10.0
9.5
16.4
12.4
14.5
12.3
10.0
22.6
13.6
11.5
7.5
7.4
5.8
10.1
5.1
7.0
9.2
9.5
7.0
22.8
17.7
16.6
32.1
18.9
29.3
19.5
12.2
11.9
19.0
16.2
Company
Automobiles
Amara Raja
Ashok Ley.
Bajaj Auto
Bharat Forge
Bosch
Eicher Mot.
Endurance Tech.
Escorts
Exide Ind
Hero Moto
M&M
Mahindra CIE
Maruti Suzuki
Tata Motors
TVS Motor
Aggregate
Banks - Private
Axis Bank
DCB Bank
Equitas Hold.
Federal Bank
HDFC Bank
ICICI Bank
IDFC Bank
IndusInd
J&K Bank
Kotak Mah. Bk
RBL Bank
South Indian
Yes Bank
Aggregate
Banks - PSU
BOB
BOI
Canara
IDBI Bk
Indian Bk
OBC
PNB
SBI
Union Bk
Aggregate
NBFCs
Bajaj Fin.
Bharat Fin.
Dewan Hsg.
GRUH Fin.
HDFC
Indiabulls Hsg
LIC Hsg Fin
Manappuram
M&M Fin.
Muthoot Fin
PFC
Reco
Buy
Buy
Buy
Buy
Neutral
Buy
Buy
Buy
Buy
Neutral
Buy
Not Rated
Buy
Buy
Buy
TP
% Upside
EPS (INR)
P/E (x)
P/B (x)
(INR) Downside FY16 FY17E FY18E FY17E FY18E FY17E FY18E
1,061
92
3,097
1,096
20,937
28,755
715
410
205
3,011
1,497
-
6,415
613
407
15
5
15
16
-1
28
21
12
9
-3
23
13
17
6
28.7
3.9
131.8
28.1
483.3
492.9
20.7
11.1
7.3
158.3
53.6
4.2
177.6
36.9
9.1
29.7
4.9
133.0
25.8
507.6
608.7
22.6
20.7
7.8
169.5
66.0
6.2
252.2
29.0
11.9
38.8
6.6
158.9
36.4
657.7
869.5
28.7
34.2
9.4
192.2
83.7
9.7
306.9
45.6
16.5
31.2
17.6
20.3
36.5
41.6
36.9
26.2
17.7
24.2
18.2
18.4
31.8
22.5
18.0
32.1
22.7
37.6
16.7
26.7
17.0
21.5
15.6
20.8
25.4
Loss
27.6
31.3
7.7
18.1
22.5
12.9
Loss
10.6
48.4
8.2
6.0
15.4
26.2
8.9
16.6
29.3
16.0
9.2
43.0
36.3
11.0
14.1
21.2
23.4
11.3
5.6
23.9
13.2
17.0
25.8
32.1
25.8
20.7
10.7
20.0
16.1
14.5
20.3
18.5
11.5
23.2
17.2
21.0
13.8
23.4
14.1
17.8
14.9
15.4
20.9
4.3
22.6
25.7
6.9
14.0
17.7
8.4
6.2
7.6
11.5
7.8
5.5
9.9
11.0
4.6
10.7
22.5
17.8
7.9
34.4
33.8
8.7
11.9
18.9
20.3
9.7
5.2
6.3
3.8
5.6
5.5
8.7
12.9
4.8
1.9
3.3
6.6
1.5
2.2
5.2
2.0
7.8
3.9
2.1
1.7
2.4
1.5
3.7
1.3
1.5
3.7
0.6
3.5
3.3
0.7
3.5
2.7
1.0
0.5
0.6
0.7
0.8
0.3
0.7
1.1
0.5
0.8
5.7
3.5
1.4
12.2
5.1
2.7
2.5
2.4
2.5
2.0
0.9
5.1
3.2
4.9
4.8
7.2
9.2
4.0
1.6
2.9
5.6
1.4
2.0
4.3
1.7
6.2
3.3
2.0
1.5
2.2
1.4
3.2
1.2
1.4
3.2
0.5
3.1
3.0
0.7
2.9
2.4
0.9
0.5
0.5
0.7
0.8
0.3
0.7
1.0
0.4
0.7
4.7
2.9
1.2
10.0
4.6
2.4
2.1
2.3
2.3
1.7
0.8
Neutral
Neutral
Buy
Buy
Buy
Buy
Under Review
Buy
Neutral
Buy
Buy
Neutral
Buy
488
119
160
77
1,244
268
65
1,227
62
732
381
21
1,346
519
134
240
106
1,510
332
-
1,430
68
932
450
21
1,500
6
13
50
38
21
24
17
10
27
18
-1
11
34.5
6.8
6.2
2.8
48.6
16.7
38.4
8.6
18.9
9.0
2.5
60.4
13.0
7.1
6.0
4.5
57.9
17.2
3.1
48.4
Loss
26.6
12.2
2.8
74.5
23.2
8.6
6.8
5.5
69.8
18.0
4.2
58.7
14.5
32.4
14.8
3.1
95.8
Buy
Neutral
Under Review
Neutral
Buy
Neutral
Buy
Buy
Buy
159
115
288
74
249
116
130
258
139
223
125
-
49
314
108
172
338
168
41
8
-33
26
-7
32
31
21
Loss
Loss
Loss
Loss
14.8
4.9
Loss
15.7
19.7
12.3
Loss
27.2
1.5
30.4
19.3
8.5
9.8
15.6
18.8
18.5
37.9
6.4
31.9
21.3
13.2
23.3
30.4
Buy
Buy
Buy
Neutral
Buy
Buy
Buy
Not Rated
Buy
Buy
Neutral
930
685
283
338
1,247
763
530
81
296
311
134
1,096
893
405
348
1,553
1,015
693
-
339
373
117
18
30
43
3
25
33
31
14
20
-12
23.9
23.8
25.0
6.7
30.6
55.7
32.9
3.5
11.9
20.3
23.8
31.8
42.7
30.7
7.9
34.3
69.5
37.6
3.8
12.7
27.5
24.0
41.3
38.5
35.6
9.8
36.9
87.7
44.7
4.3
14.6
32.0
25.5
19 January 2017
15

Click excel icon
for detailed
valuation guide
CMP
(INR)
639
139
1,966
947
Valuation snapshot
ROE (%)
FY16 FY17E FY18E
17.0
15.7
19.6
21.0
18.8
19.5
12.3
12.2
17.8
11.1
15.6
Loss
52.1
3.0
24.9
5.9
19.0
27.9
13.5
9.9
14.2
11.8
20.2
Loss
12.5
9.7
15.3
7.6
8.3
7.2
5.9
5.5
9.2
3.9
6.3
0.3
19.5
6.2
0.7
12.2
11.0
9.3
34.7
55.9
67.9
33.3
43.4
23.4
30.8
82.4
29.3
9.1
36.9
40.9
46.0
13.9
13.4
17.5
11.4
19.2
2.9
80.9
4.2
22.0
-6.8
16.9
19.3
16.0
10.9
14.5
9.2
18.6
Loss
12.2
13.2
15.4
10.4
5.9
7.2
8.5
7.6
12.9
7.0
10.9
4.2
20.6
Loss
4.5
20.2
11.9
11.6
32.4
42.2
56.3
27.8
34.1
22.3
25.1
68.7
28.4
15.0
32.8
35.9
42.9
15.3
15.4
17.9
14.5
18.3
3.9
74.2
6.0
23.1
20.1
23.3
18.6
16.7
11.7
14.6
12.6
19.0
Loss
12.5
15.4
16.4
12.0
7.1
10.9
9.8
10.3
13.3
7.4
13.7
10.5
18.6
6.8
16.0
24.3
15.0
12.9
32.0
38.8
63.2
27.9
33.6
22.7
24.7
79.1
28.3
16.5
33.1
39.2
42.7
Company
Repco Home
REC
Shriram City
Union
STF
Aggregate
Capital Goods
ABB
Bharat Elec.
BHEL
CG Cons. Elec.
Crompton Grv.
Cummins
GE T&D
Havells
Inox Wind
K E C Intl
L&T
Pennar Eng.
Siemens
Solar Ind
Suzlon Energy
Thermax
Va Tech Wab.
Voltas
Aggregate
Cement
Ambuja Cem.
ACC
Birla Corp.
Dalmia Bharat
Grasim Inds.
India Cem
J K Cements
JK Lakshmi Ce
Ramco Cem
Orient Cem
Prism Cem
Shree Cem
Ultratech
Aggregate
Consumer
Asian Paints
Britannia
Colgate
Dabur
Emami
Godrej Cons.
GSK Cons.
HUL
ITC
Jyothy Lab
Marico
Nestle
Page Inds
Reco
Buy
Neutral
Buy
Buy
TP
% Upside
EPS (INR)
P/E (x)
P/B (x)
(INR) Downside FY16 FY17E FY18E FY17E FY18E FY17E FY18E
842
32
24.0
25.7
37.7
24.8
16.9
3.6
3.1
134
-3
28.5
29.4
35.3
4.7
3.9
0.8
0.7
2,500
1,282
27
35
80.4
53.3
100.7
63.5
124.8
82.3
19.5
14.9
14.6
63.0
25.2
33.5
44.0
116.1
32.1
56.8
50.5
10.6
14.8
27.0
14.0
70.1
36.8
Loss
33.9
19.6
29.6
31.7
38.4
41.4
20.6
53.3
11.4
15.4
27.0
78.3
21.1
Loss
101.2
38.9
36.9
28.5
47.7
43.8
41.1
38.8
41.6
42.9
31.7
43.8
30.0
48.4
43.5
52.9
58.4
15.7
11.5
12.5
42.6
21.6
24.1
32.0
34.9
27.6
30.1
33.4
9.2
12.4
23.3
11.9
47.1
31.0
28.0
30.5
15.2
24.8
25.3
31.4
27.6
15.6
36.1
9.8
13.0
19.6
30.3
19.8
38.1
25.7
26.3
25.9
21.5
42.5
37.6
33.6
32.8
33.6
36.0
28.0
38.5
26.2
41.0
35.9
42.4
46.2
2.6
1.9
2.5
7.2
4.5
1.0
29.4
0.9
6.7
6.4
8.5
1.9
2.2
2.8
2.0
6.5
6.4
Loss
4.0
2.5
4.3
3.3
1.6
3.0
1.6
3.9
1.4
1.1
2.8
3.2
4.0
2.7
4.4
7.2
4.2
3.3
14.5
16.5
22.0
10.0
12.4
8.9
7.4
30.4
7.9
7.0
12.9
17.9
25.0
2.3
1.7
2.2
6.2
4.0
0.9
19.9
0.9
6.1
5.7
7.8
1.6
1.9
2.6
1.7
5.9
5.5
Loss
3.7
2.2
3.8
3.0
1.5
3.0
1.5
3.5
1.2
1.0
2.5
3.2
3.4
2.5
3.9
5.8
3.7
2.8
12.8
13.1
20.5
8.5
10.4
7.5
6.5
30.6
7.0
6.5
11.0
15.5
19.7
Neutral
Buy
Sell
Buy
Sell
Neutral
Neutral
Buy
Neutral
Buy
Buy
Not Rated
Neutral
Neutral
Not Rated
Sell
Buy
Buy
1,147
1,512
132
165
65
834
321
378
185
149
1,451
147
1,193
710
16
841
495
349
1,125
1,600
110
180
48
836
320
390
200
160
1,600
-
1,260
690
-
706
620
370
-2
6
-17
9
-26
0
0
3
8
7
10
6
-3
-16
25
6
15.8
56.9
Loss
1.9
2.1
27.2
3.0
7.8
20.7
7.4
44.7
8.8
16.9
18.4
Loss
23.5
16.3
11.7
18.2
60.0
3.9
3.7
0.6
26.0
5.6
7.5
17.5
10.1
53.6
10.5
17.0
19.3
Loss
24.8
25.2
11.8
26.9
69.9
5.5
5.1
1.9
30.2
10.7
11.3
20.0
12.1
62.2
12.4
25.3
22.9
0.6
27.6
32.6
14.0
Buy
Neutral
Buy
Buy
Under Review
Neutral
Buy
Buy
Buy
Buy
Buy
Buy
Buy
218
1,350
696
1,823
866
138
715
370
622
127
90
15,329
3,495
246
1,321
759
1,736
-
118
767
440
698
175
102
17,096
3,749
13
-2
9
-5
-14
7
19
12
37
13
12
7
5.5
32.0
20.4
21.5
48.3
4.4
14.5
0.4
23.4
3.0
0.1
201.1
79.3
5.7
32.6
33.8
34.2
76.1
8.9
26.4
4.7
29.4
Loss
0.9
394.3
94.6
6.9
48.9
44.5
50.4
88.7
10.6
36.5
12.2
31.5
3.3
3.5
582.0
134.8
Neutral
Buy
Buy
Neutral
Buy
Neutral
Neutral
Neutral
Buy
Neutral
Buy
Neutral
Buy
961
3,089
915
279
1,027
1,577
5,005
865
251
349
260
5,903
14,439
1,020
3,380
1,200
300
1,240
1,655
5,465
900
290
360
300
6,410
17,100
6
9
31
8
21
5
9
4
16
3
16
9
18
18.7
70.1
22.3
7.1
25.2
33.2
167.1
19.0
7.7
4.1
5.6
119.9
208.6
20.2
70.6
22.3
7.2
24.7
36.8
157.7
19.7
8.4
7.2
6.0
111.5
247.4
22.6
82.1
27.2
8.5
30.6
43.8
178.8
22.4
9.6
8.5
7.2
139.2
312.7
19 January 2017
16

Click excel icon
for detailed
valuation guide
CMP
(INR)
265
634
6,757
120
820
2,110
TP
% Upside
(INR) Downside
285
7
700
10
8,340
23
120
0
1,065
30
2,620
24
Valuation snapshot
FY16
19.5
29.9
30.8
10.3
14.8
19.8
31.8
38.8
23.8
32.5
11.5
32.8
12.8
28.6
18.8
Loss
16.4
21.6
22.1
5.9
22.9
14.2
16.5
23.3
34.4
25.8
13.2
55.5
10.2
10.1
5.1
15.4
11.6
NM
22.6
Loss
Loss
21.9
7.7
24.7
18.7
0.1
23.4
27.0
18.2
11.6
20.7
Loss
Loss
5.4
ROE (%)
FY17E
10.8
27.6
27.7
7.3
14.5
20.3
29.3
25.1
23.9
29.9
12.2
23.9
11.2
26.7
10.6
Loss
20.4
20.5
29.6
9.0
22.8
17.8
20.3
22.2
26.4
23.8
13.3
50.5
8.6
8.3
12.4
16.7
11.3
43.2
25.7
Loss
Loss
19.6
5.8
20.7
10.4
Loss
25.3
29.4
16.8
17.3
22.5
Loss
14.9
7.1
FY18E
10.5
25.6
29.4
9.1
16.9
23.6
29.9
26.8
21.8
27.2
13.9
27.2
13.9
26.5
16.1
3.8
19.1
22.7
40.8
14.1
23.4
19.4
23.9
22.5
29.9
26.1
16.9
48.6
10.3
12.8
19.4
17.8
13.5
46.3
26.9
2.1
-6.1
18.0
6.7
20.6
16.4
23.5
27.6
30.7
20.8
18.1
22.6
Loss
19.6
8.7
Company
Parag Milk
Pidilite Ind.
P&G Hygiene
Radico Khaitan
United Brew
United Spirits
Aggregate
Healthcare
Alembic Phar
Alkem Lab
Aurobindo
Biocon
Cadila
Cipla
Divis Lab
Dr Reddy’s
Fortis Health
Glenmark
Granules
GSK Pharma
IPCA Labs
Lupin
Sanofi India
Sun Pharma
Syngene Intl
Torrent Pharma
Aggregate
Logistics
Allcargo Logistics
Blue Dart
Concor
Gateway
Distriparks
Gati
Transport Corp.
Aggregate
Media
Dish TV
D B Corp
Den Net.
Hathway Cab.
Hind. Media
HT Media
Jagran Prak.
PVR
Siti Net.
Sun TV
Zee Ent.
Aggregate
Metals
Hindalco
Hind. Zinc
JSPL
JSW Steel
Nalco
Reco
Neutral
Buy
Buy
Neutral
Buy
Buy
FY16
6.7
14.8
129.9
6.9
11.1
16.7
EPS (INR)
P/E (x)
P/B (x)
FY17E FY18E FY17E FY18E FY17E FY18E
7.0
9.7
37.8
27.4
3.0
2.7
16.4
18.4
38.8
34.6
9.9
8.0
138.5 168.9 48.8
40.0
12.7
10.9
5.3
7.1
22.8
17.0
1.6
1.5
12.3
16.4
66.4
50.1
9.1
7.9
27.8
45.7
76.0
46.2
14.0
10.9
39.2
33.5
11.5
10.0
23.5
77.3
42.0
27.1
13.6
18.1
45.4
82.7
Loss
41.4
7.1
50.4
17.0
61.6
142.2
27.8
13.0
57.7
30.7
84.4
49.9
34.3
18.7
25.6
51.0
141.7
3.5
49.7
10.0
61.8
29.4
77.0
172.8
37.9
16.1
78.4
25.5
21.4
17.3
36.6
26.2
32.1
16.3
35.7
Loss
21.4
16.1
54.5
32.3
24.3
29.1
23.4
45.5
22.7
25.4
17.2
43.4
32.8
24.6
13.1
9.6
28.2
43.5
17.8
Loss
Loss
10.0
13.8
16.6
64.0
Loss
20.7
41.4
31.6
9.6
13.5
Loss
Loss
19.6
19.6
19.6
14.5
28.9
19.0
22.7
14.5
20.8
53.0
17.8
11.4
44.4
18.7
19.4
23.9
17.1
36.7
16.7
19.1
14.1
34.3
25.9
15.1
6.9
7.8
21.5
25.7
15.1
47.2
-48.0
9.0
11.0
14.6
36.4
14.1
17.3
27.3
21.8
8.0
11.4
Loss
10.2
15.1
5.9
4.7
4.5
4.5
5.8
3.6
4.1
3.6
2.2
4.4
2.9
16.1
2.8
5.1
5.2
4.5
9.2
5.5
6.1
2.5
19.3
2.8
2.0
2.0
1.5
3.2
Loss
4.3
1.0
2.8
1.8
0.8
3.2
6.4
4.0
5.2
9.4
5.3
1.6
2.8
0.5
2.2
1.3
4.7
3.9
3.5
4.0
4.7
3.2
3.6
3.1
1.9
3.4
2.4
18.1
2.5
4.1
4.6
3.7
7.5
4.6
5.0
2.2
14.7
2.6
1.9
1.8
1.3
2.9
9.7
3.8
1.0
3.1
1.5
0.7
2.8
5.6
2.7
4.8
7.6
4.5
1.3
2.4
0.5
1.8
1.3
Neutral
Neutral
Buy
Sell
Buy
Neutral
Neutral
Neutral
Buy
Neutral
Buy
Neutral
Neutral
Buy
Buy
Buy
Not Rated
Buy
601
1,654
725
992
356
582
739
2,953
187
886
114
2,745
550
1,498
4,134
650
592
1,313
640
1,800
1,050
750
450
525
975
3,000
240
990
160
3,150
540
1,825
5,200
925
-
1,750
6
9
45
-24
26
-10
32
2
28
12
41
15
-2
22
26
42
33
38.2
64.7
33.9
23.2
15.4
18.8
41.9
132.3
Loss
24.9
5.5
44.2
10.5
50.4
103.2
19.6
11.1
59.7
Buy
Not Rated
Neutral
Buy
Not Rated
Not Rated
180
4,455
1,188
236
122
163
196
-
1,317
313
-
-
9
11
33
10.8
84.4
40.6
11.4
3.2
13.5
10.5
102.5
36.3
9.6
9.3
16.9
12.8
129.9
45.9
15.6
17.6
21.0
Buy
Buy
Neutral
Buy
Buy
Neutral
Buy
Buy
Buy
Under Review
Buy
86
356
87
37
267
82
179
1,304
38
525
482
115
450
75
47
360
85
215
1,429
45
-
590
35
26
-14
26
35
4
20
10
17
22
6.5
16.2
Loss
Loss
24.6
7.3
10.5
25.5
Loss
21.1
10.6
2.0
20.0
Loss
Loss
26.9
5.9
10.8
20.4
Loss
25.4
11.7
3.3
23.5
1.9
-0.8
29.7
7.5
12.2
35.8
2.7
30.3
17.7
Buy
Neutral
Neutral
Buy
Buy
177
290
80
191
72
234
282
88
195
73
32
-3
10
2
1
12.0
19.8
Loss
Loss
2.7
18.5
21.5
Loss
Loss
3.7
22.1
25.4
Loss
18.7
4.8
19 January 2017
17

Click excel icon
for detailed
valuation guide
CMP
(INR)
146
60
244
468
Valuation snapshot
ROE (%)
FY16 FY17E
15.9
12.8
Loss
Loss
7.9
13.0
4.6
8.7
4.9
7.9
31.6
4.0
7.7
11.7
22.4
13.6
18.4
22.1
10.6
9.5
14.0
12.0
11.4
13.4
6.3
21.3
16.8
16.5
21.5
28.9
24.7
21.0
45.3
27.4
12.3
19.0
19.5
46.3
37.1
23.4
20.3
24.0
24.4
7.4
12.7
12.6
9.2
42.2
3.1
15.5
11.9
14.7
17.7
12.9
26.2
5.3
12.9
11.9
26.6
29.3
21.8
39.4
11.6
10.1
21.5
11.6
13.7
8.9
3.1
20.2
15.2
15.9
26.6
27.7
23.2
16.9
42.3
18.0
13.7
14.2
16.7
42.8
33.8
19.1
17.7
20.3
23.7
7.3
17.2
Loss
5.3
32.9
4.7
10.1
10.6
16.1
15.1
11.3
FY18E
14.2
Loss
14.8
28.3
10.2
22.7
4.6
13.2
13.5
19.7
20.8
19.8
28.4
13.1
13.1
24.7
11.4
13.3
15.3
8.8
19.7
16.7
17.8
25.5
27.5
22.5
17.6
36.8
22.0
16.3
16.5
19.2
41.7
31.1
19.3
18.5
22.8
22.8
5.3
16.6
Loss
2.1
37.7
6.3
5.8
11.9
16.6
16.3
15.2
Company
NMDC
SAIL
Vedanta
Tata Steel
Aggregate
Oil & Gas
BPCL
Cairn India
GAIL
Gujarat St. Pet.
HPCL
IOC
IGL
MRPL
Oil India
ONGC
PLNG
Reliance Ind.
Aggregate
Retail
Jubilant Food
Shopper's Stop
Titan Co.
Aggregate
Technology
Cyient
HCL Tech.
Hexaware
Infosys
KPIT Tech
L&T Infotech
Mindtree
Mphasis
NIIT Tech
Persistent Sys
Tata Elxsi
TCS
Tech Mah
Wipro
Zensar Tech
Aggregate
Telecom
Bharti Airtel
Bharti Infratel
Idea Cellular
Aggregate
Utiltites
Coal India
CESC
JSW Energy
NTPC
Power Grid
Aggregate
Others
Arvind
Reco
Buy
Sell
Neutral
Sell
TP
% Upside
EPS (INR)
P/E (x)
P/B (x)
(INR) Downside FY16 FY17E FY18E FY17E FY18E FY17E FY18E
162
11
8.4
10.9
10.8
13.3
13.5
1.9
1.9
28
-53
Loss
Loss
Loss
Loss
Loss
0.7
0.8
250
3
10.8
21.4
27.3
11.4
8.9
1.3
1.2
321
-31
7.7
11.7
37.1
39.9
12.6
4.0
3.2
18.5
13.4
1.5
1.4
756
-
429
168
543
464
898
115
376
223
411
1,057
15
-2
9
11
33
-4
6
11
13
15
2
55.2
11.4
18.1
7.9
38.0
20.3
29.7
7.4
29.1
13.6
11.2
93.0
55.5
14.0
28.7
8.8
52.7
49.3
42.0
17.0
33.3
14.8
19.8
99.2
56.4
12.5
36.4
11.0
45.1
40.1
43.7
15.8
40.3
20.0
26.9
107.9
11.8
19.3
15.3
17.6
9.3
7.1
22.4
6.4
10.1
13.4
18.0
10.4
11.0
82.1
96.7
41.9
46.7
14.3
14.9
14.7
15.1
11.5
12.6
18.6
12.5
11.3
17.5
25.2
17.0
15.6
14.1
13.2
15.7
25.3
20.3
Loss
36.7
19.2
14.2
11.4
14.6
14.0
9.2
24.9
11.6
21.6
12.1
14.0
10.8
8.7
21.5
6.8
8.4
9.9
13.3
9.6
10.4
47.7
32.1
37.6
38.3
11.2
13.3
12.9
14.0
9.3
11.8
13.7
9.7
8.8
14.1
20.6
15.8
13.4
12.2
9.9
14.3
33.3
19.7
Loss
89.3
16.8
9.7
19.0
12.1
11.8
7.9
15.4
2.8
1.0
1.7
2.0
2.3
1.9
4.6
2.2
1.1
1.3
3.6
1.1
1.5
7.3
2.9
7.9
7.1
2.3
3.6
3.9
3.2
1.8
4.8
3.2
1.7
1.5
2.7
9.6
5.4
2.7
2.4
2.5
3.7
1.8
3.6
1.0
1.9
6.3
1.6
1.1
1.5
2.1
1.4
2.5
2.5
1.0
1.5
1.8
2.0
1.7
4.0
1.8
1.1
1.3
3.0
1.0
1.4
7.3
2.7
7.0
6.4
2.0
3.1
3.2
2.9
1.5
3.9
2.8
1.5
1.4
2.6
7.8
4.5
2.4
2.1
2.1
3.3
1.7
3.1
1.3
1.9
6.3
1.4
1.1
1.4
1.8
1.3
2.2
Buy
Neutral
Neutral
Neutral
Buy
Buy
Neutral
Buy
Buy
Neutral
Buy
Neutral
655
269
439
154
488
349
938
108
337
198
358
1,032
Neutral
Neutral
Neutral
883
295
367
900
300
360
2
2
-2
15.0
5.8
8.0
10.8
3.0
8.7
18.5
9.2
9.8
Buy
Buy
Neutral
Buy
Neutral
Buy
Neutral
Neutral
Neutral
Neutral
Buy
Neutral
Buy
Neutral
Buy
479
843
200
951
145
689
495
525
434
635
1,516
2,295
484
482
916
600
960
230
1,250
170
800
520
560
470
700
1,619
2,550
550
560
1,250
25
14
15
31
17
16
5
7
8
10
7
11
14
16
36
30.7
40.1
12.9
59.0
14.1
52.4
35.9
34.5
45.7
37.2
49.7
123.2
35.1
36.1
68.2
33.4
56.7
13.6
62.8
12.6
54.9
26.6
42.2
38.2
36.2
60.2
135.2
30.9
34.3
69.5
42.7
63.2
15.5
67.8
15.6
58.6
36.2
54.0
49.3
45.0
73.6
145.3
36.0
39.5
92.5
Buy
Buy
Sell
314
350
68
410
435
65
31
24
-4
11.9
11.8
8.6
12.4
17.2
Loss
9.4
17.8
Loss
Neutral
Buy
Buy
Buy
Buy
309
688
62
173
198
297
940
85
199
209
-4
37
37
15
5
22.6
27.8
7.6
12.3
11.5
16.1
48.4
5.4
11.9
14.2
18.4
70.7
3.3
14.3
16.8
Buy
369
444
20
14.0
14.8
24.0
19 January 2017
18

Click excel icon
for detailed
valuation guide
CMP
Company
Reco
(INR)
Bata India
Buy
465
Castrol India
Buy
395
Century Ply.
Buy
184
Coromandel Intl Under Review 328
Dynamatic Tech Buy
3,009
Eveready Inds.
Buy
240
Interglobe
Neutral
877
Indo Count
Buy
183
Info Edge
Buy
879
Inox Leisure
Sell
234
Jain Irrigation
Under Review 94
Just Dial
Buy
367
Kaveri Seed
Buy
472
Kitex Garm.
Buy
424
Manpasand
Buy
588
MCX
Buy
1,209
Monsanto
Buy
2,246
PI Inds.
Buy
832
SRF
Buy
1,657
S H Kelkar
Buy
321
Symphony
Sell
1,183
TTK Prestige
Neutral
5,783
V-Guard
Neutral
170
Wonderla
Buy
352
TP
% Upside
(INR) Downside
483
4
499
26
211
14
-
3,388
13
266
11
1,015
16
223
22
1,050
19
206
-12
-
426
16
489
4
631
49
761
30
1,400
16
2,706
20
959
15
1,915
16
338
5
1,053
-11
4,896
-15
179
5
392
12
Valuation snapshot
FY18E
13.4
108.8
29.8
20.4
20.7
33.7
110.2
31.2
12.3
11.8
11.7
15.7
20.0
31.0
9.9
15.2
35.9
30.1
18.2
16.6
65.0
19.7
27.4
14.8
FY16
11.2
9.6
7.5
11.8
19.4
9.2
55.2
13.4
13.0
8.4
2.2
20.4
24.9
23.6
10.1
23.4
60.1
22.1
73.7
5.5
15.6
100.7
3.7
10.6
EPS (INR)
P/E (x)
P/B (x)
ROE (%)
FY17E FY18E FY17E FY18E FY17E FY18E FY16 FY17E
10.9
14.2
42.8
32.8
4.6
4.2
13.1
11.3
12.8
13.4
30.7
29.5
33.9
30.5
76.0 118.4
4.6
8.8
40.4
21.0
7.0
5.7
36.3
18.2
16.3
20.0
20.2
16.4
3.6
3.2
14.9
18.5
67.6 112.9 44.5
26.6
6.1
5.0
4.7
15.1
9.2
12.9
26.0
18.7
7.0
5.7
16.2
29.5
58.3
72.5
15.0
12.1
14.6
12.3 176.5 105.1
15.7
18.5
11.6
9.9
3.7
2.6
48.9
37.8
18.4
20.7
47.7
42.4
5.4
5.0
9.2
12.0
4.1
8.6
56.9
27.3
3.6
3.2
14.9
6.2
5.5
7.6
17.0
12.4
1.4
1.4
4.0
8.6
15.6
18.5
23.5
19.8
3.3
2.9
21.1
15.1
23.1
28.8
20.5
16.4
3.4
3.2
20.7
17.1
29.3
35.1
14.5
12.1
4.3
3.4
35.5
33.1
14.9
23.8
39.4
24.7
2.9
2.6
11.4
8.6
28.3
40.8
42.7
29.6
4.7
4.3
3.5
11.4
68.4
87.2
32.8
25.8
9.5
9.0
26.4
28.8
31.3
38.4
26.6
21.7
7.5
5.8
29.2
31.7
81.0 105.0 20.5
15.8
3.2
2.7
17.0
16.2
7.5
10.1
43.0
31.7
5.6
5.0
12.6
13.5
27.0
35.1
43.8
33.7
23.8
20.3
35.0
56.8
107.8 139.9 53.6
41.3
53.6
41.3
17.2
16.6
4.5
5.8
37.6
29.4
9.0
7.3
26.3
26.1
7.0
12.0
50.1
29.3
4.6
4.1
15.8
9.5
19 January 2017
19

MOSL Universe stock performance
Company
Automobiles
Amara Raja
Ashok Ley.
Bajaj Auto
Bharat Forge
Bosch
Eicher Mot.
Endurance Tech.
Escorts
Exide Ind
Hero Moto
M&M
Mahindra CIE
Maruti Suzuki
Tata Motors
TVS Motor
Banks - Private
Axis Bank
DCB Bank
Equitas Hold.
Federal Bank
HDFC Bank
ICICI Bank
IDFC Bank
IndusInd
J&K Bank
Kotak Mah. Bk
RBL Bank
South Indian
Yes Bank
Banks - PSU
BOB
BOI
Canara
IDBI Bk
Indian Bk
OBC
PNB
SBI
Union Bk
NBFCs
Bajaj Fin.
Bharat Fin.
Dewan Hsg.
GRUH Fin.
HDFC
Indiabulls Hsg
LIC Hsg Fin
Manappuram
M&M Fin.
Muthoot Fin
PFC
Repco Home
REC
STF
Capital Goods
ABB
1 Day (%)
2.1
1.3
-0.9
0.6
-1.5
0.7
1.5
0.1
3.9
-1.4
0.9
-0.4
0.2
0.0
1.1
0.4
1.0
3.3
1.7
0.4
0.0
0.5
1.1
-0.8
0.8
-0.2
-0.2
1.6
-0.3
0.3
1.4
0.5
0.7
0.5
0.1
0.6
0.3
1.9
1.6
-0.8
-0.5
0.3
-1.8
-0.3
1.6
0.0
0.0
-2.5
-4.1
-3.5
-0.7
4.0
1M (%)
2.5
11.9
1.7
-3.0
4.8
3.1
3.6
16.8
7.8
-1.3
3.3
6.7
9.5
10.7
1.8
3.3
10.0
3.3
12.0
5.3
5.0
1.8
13.3
-2.6
1.6
8.2
1.7
14.0
-0.6
1.5
-3.8
5.5
6.8
1.4
4.2
-2.7
1.5
9.3
6.8
17.0
4.9
-1.8
19.4
-3.9
20.8
11.7
15.1
6.5
21.5
7.4
11.6
8.4
12M (%)
18.2
4.6
20.2
21.2
18.4
45.2
185.8
45.6
27.1
4.2
-5.6
34.3
53.2
39.9
30.7
62.3
59.7
20.9
20.5
44.0
37.0
-10.3
9.8
17.7
105.3
25.4
24.3
62.4
33.8
176.4
10.4
42.7
42.2
23.7
69.1
43.3
48.2
44.5
10.0
16.1
14.5
201.1
37.3
77.3
65.3
10.1
49.4
23.8
14.7
Company
Bharat Elec.
BHEL
CG Cons. Elec.
Crompton Grv.
Cummins
GE T&D
Havells
Inox Wind
K E C Intl
L&T
Pennar Eng.
Siemens
Solar Ind
Suzlon Energy
Thermax
Va Tech Wab.
Voltas
Cement
Ambuja Cem.
ACC
Birla Corp.
Dalmia Bharat
Grasim Inds.
India Cem
J K Cements
JK Lakshmi Ce
Ramco Cem
Orient Cem
Prism Cem
Shree Cem
Ultratech
Consumer
Asian Paints
Britannia
Colgate
Dabur
Emami
Godrej Cons.
GSK Cons.
HUL
ITC
Jyothy Lab
Marico
Nestle
Page Inds
Parag Milk
Pidilite Ind.
P&G Hygiene
Radico Khaitan
United Brew
United Spirits
Healthcare
Alembic Phar
Alkem Lab
Aurobindo
Biocon
Cadila
1 Day (%)
-0.1
3.4
0.5
-0.4
-0.6
3.1
1.3
-1.6
0.1
0.3
-1.0
1.7
0.4
0.6
-0.1
0.9
1.3
2.1
1.4
0.1
4.1
2.4
2.6
1.9
0.4
2.2
1.1
1.2
2.5
3.2
0.1
2.6
0.7
0.4
-2.1
-0.4
0.1
2.9
-0.4
0.8
1.0
0.3
2.8
-0.3
1.0
0.4
-0.5
-0.9
1.4
-0.1
-0.9
2.6
-0.3
1.9
1M (%)
4.6
7.8
14.4
9.6
2.0
3.2
17.3
-9.1
8.1
6.8
-6.7
5.9
4.0
9.4
2.1
5.4
9.3
7.4
4.1
13.7
22.4
5.9
23.8
4.5
8.6
18.4
2.4
6.7
8.8
10.0
6.7
6.8
0.4
2.7
0.9
6.7
-1.9
5.8
10.7
-3.8
3.4
-2.9
3.5
0.0
4.5
-1.6
5.4
-0.5
9.0
-3.5
3.0
4.9
1.4
-5.2
12M (%)
22.0
-7.0
7.5
-13.5
-24.1
37.6
-40.9
24.7
34.0
-1.8
17.4
10.4
-16.4
0.7
-16.0
28.1
13.8
10.0
70.1
148.0
23.7
69.4
53.1
35.6
71.8
-10.8
26.9
58.2
32.4
13.0
11.8
0.3
12.7
3.0
30.1
-15.0
6.7
19.3
25.8
18.4
8.3
15.5
17.9
28.8
14.9
-1.6
-18.5
0.6
23.2
-9.4
106.0
18.8
19 January 2017
20

Company
Cipla
Divis Lab
Dr Reddy’s
Fortis Health
Glenmark
Granules
GSK Pharma
IPCA Labs
Lupin
Sanofi India
Sun Pharma
Syngene Intl
Torrent Pharma
Logistics
Allcargo Logistics
Blue Dart
Concor
Gateway Distriparks
Gati
Transport Corp.
Media
Dish TV
D B Corp
Den Net.
Hathway Cab.
Hind. Media
HT Media
Jagran Prak.
PVR
Siti Net.
Sun TV
Zee Ent.
Metals
Hindalco
Hind. Zinc
JSPL
JSW Steel
Nalco
NMDC
SAIL
Vedanta
Tata Steel
Oil & Gas
BPCL
Cairn India
GAIL
Gujarat St. Pet.
HPCL
IOC
IGL
MRPL
Oil India
ONGC
PLNG
Reliance Ind.
1 Day (%)
-0.8
0.3
-0.8
0.1
0.2
1.7
1.0
0.6
0.1
0.1
0.3
-0.3
-1.2
-1.5
0.0
-1.1
-1.2
-0.5
0.7
-1.4
-0.5
0.7
1.9
-0.4
-2.3
-0.6
5.0
3.2
-0.3
0.4
3.5
1.8
3.4
2.2
5.5
1.9
0.5
3.2
3.0
-1.5
2.7
-1.4
6.2
1.1
-0.6
2.2
-1.6
-1.3
1.5
-0.8
-0.8
1M (%)
2.8
-35.9
-5.0
2.0
-4.7
-2.1
0.8
0.7
2.0
-3.6
0.4
0.8
0.6
5.7
0.7
8.1
0.4
8.0
-0.2
2.8
0.4
27.4
5.9
-1.7
12.4
8.1
20.4
2.3
6.3
9.1
4.0
3.2
9.6
18.0
17.6
14.4
13.9
5.8
12.9
8.2
5.0
5.8
5.9
14.7
17.7
2.8
14.3
2.4
-1.9
-4.9
-2.4
12M (%)
-1.6
-30.9
2.7
11.8
15.8
8.3
-13.3
-10.9
-12.0
2.0
-17.3
60.6
-1.5
4.0
-26.5
2.6
-26.0
1.0
6.0
4.3
15.5
4.8
-6.8
-2.1
0.3
17.7
68.4
8.1
43.9
22.2
148.5
108.8
32.6
92.3
110.0
72.3
41.8
254.2
97.9
46.3
142.2
29.8
10.1
77.8
67.3
70.0
68.6
29.6
38.1
44.1
1.4
Company
Retail
Jubilant Food
Shopper's Stop
Titan Co.
Technology
Cyient
HCL Tech.
Hexaware
Infosys
KPIT Tech
L&T Infotech
Mindtree
Mphasis
NIIT Tech
Persistent Sys
Tata Elxsi
TCS
Tech Mah
Wipro
Zensar Tech
Telecom
Bharti Airtel
Bharti Infratel
Idea Cellular
Utiltites
Coal India
CESC
JSW Energy
NTPC
Power Grid
Others
Arvind
Bata India
Castrol India
Century Ply.
Coromandel Intl
Dynamatic Tech
Eveready Inds.
Interglobe
Indo Count
Info Edge
Inox Leisure
Jain Irrigation
Just Dial
Kaveri Seed
Kitex Garm.
Manpasand
MCX
Monsanto
PI Inds.
SRF
S H Kelkar
Symphony
TTK Prestige
V-Guard
Wonderla
1 Day (%)
6.0
1.2
1.9
-2.1
0.8
-0.1
-0.5
1.0
1.5
2.0
1.3
4.2
1.2
6.5
0.8
-0.7
0.2
1.1
-1.2
-0.8
-2.5
0.5
1.1
-3.4
-1.7
0.4
-0.7
-1.4
-0.1
0.9
1.3
2.0
1.1
-0.1
1.6
1.6
2.6
-0.4
-0.7
0.2
-0.7
5.8
2.5
-0.4
1.4
0.1
0.9
0.4
-1.5
4.4
0.0
1M (%)
5.3
1.9
13.9
-6.2
2.8
-2.9
-5.3
5.6
1.5
-1.2
-6.6
1.9
3.5
4.8
0.6
1.3
3.9
-9.8
1.2
-1.6
-11.4
7.1
10.0
2.9
8.0
7.8
8.4
11.1
6.1
9.8
18.2
4.2
11.4
5.8
12.7
1.1
5.4
10.4
-3.4
19.5
2.8
3.9
-7.8
-0.9
2.6
9.8
12.6
-3.6
6.0
-0.7
-1.0
12M (%)
-26.6
-20.3
9.6
10.7
0.0
-7.9
-16.0
0.6
-32.6
16.5
-10.7
6.1
-9.2
0.5
-6.6
-12.0
-3.6
4.4
-6.9
-39.3
-0.9
54.5
-11.7
28.3
43.6
23.3
1.8
-5.7
19.8
100.6
58.4
-7.7
-22.4
-12.2
9.7
18.2
60.5
-54.1
49.2
-22.7
34.0
48.7
3.9
34.3
45.1
32.3
15.8
34.6
93.6
-0.3
19 January 2017
21

THEMATIC/STRATEGY RESEARCH GALLERY

REPORT GALLERY
RECENT INITIATING COVERAGE REPORTS

DIFFERENTIATED PRODUCT GALLERY

NOTES
19 January 2017
25

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In respect of any matter arising from or in connection with the research you could contact the following representatives of Motilal Oswal Capital Markets Singapore Pte Limited:
Varun Kumar
Varun.kumar@motilaloswal.com
Contact : (+65) 68189232
Office Address:21 (Suite 31),16 CollyerQuay,Singapore 04931
13 December 2016
Motilal Oswal Tower, Level 9, Sayani Road, Prabhadevi, Mumbai 400 025
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Motilal Oswal Securities Ltd
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