12 July 2017
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Asiamoney Brokers Poll 2017 for India
Research, Sales and Trading team.
We
request your ballot.
Today’s top research idea
IndusInd Bank: Mixed asset quality; strong operating
performance
v
IIB’s 1QFY18 PAT grew 31% YoY to INR8.4b. Strong loan growth of 24% YoY
and steady NIM at 4% drove robust NII performance (+31% YoY; 5% beat).
v
Robust NII performance and strong fee income growth (25%+) enabled the
bank to deliver impressive 29% core PPoP growth. Both corporate (+26% YoY)
and consumer (+22% YoY) loans exhibited healthy growth.
v
GNPAs increased 21% QoQ to 1.1% of loans (0.9% in FY17), led by high
slippages in both CCB and CFD divisions.
v
Strong core profitability, an improving CASA profile and healthy return ratios
(RoA of 1.9%+ and RoE of 16-18%) are the key positives. We largely maintain
our estimates.
v
Maintain
Buy
with a target price of INR1,800 (3.8x June 2019E BV).
Market snapshot
Equities - India
Close
Chg .%
Sensex
31,747
0.1
Nifty-50
9,786
0.2
Nifty-M 100
18,099
-0.9
Equities-Global
Close
Chg .%
S&P 500
2,426
-0.1
Nasdaq
6,193
0.3
FTSE 100
7,330
-0.5
DAX
12,437
-0.1
Hang Seng
10,416
2.0
Nikkei 225
20,195
-0.6
Commodities
Close
Chg .%
Brent (US$/Bbl)
48
2.1
Gold ($/OZ)
1,210
0.2
Cu (US$/MT)
5,847
0.9
Almn (US$/MT)
1,883
0.0
Currency
Close
Chg .%
USD/INR
64.6
0.1
USD/EUR
1.1
0.0
USD/JPY
114.4
0.1
YIELD (%)
Close
1MChg
10 Yrs G-Sec
6.5
0.0
10 Yrs AAA Corp
7.6
0.0
Flows (USD b)
11-Jul
MTD
FIIs
0.0
-0.2
DIIs
0.1
0.6
Volumes (INRb)
11-Jul
MTD*
Cash
309
256
F&O
4,687
4,606
Note: YTD is calendar year, *Avg
YTD.%
19.2
19.5
26.1
YTD.%
8.3
15.1
2.6
8.3
10.9
5.7
YTD.%
-14.2
4.4
5.9
10.5
YTD.%
-4.9
8.0
-2.3
YTDchg
0.0
0.0
YTD
8.2
3.8
YTD*
284
4,894
Research covered
Cos/Sector
IndusInd Bank
South India Bank
Consumer
Key Highlights
Mixed asset quality; strong operating performance
Flash Note: PPOP growth marred by provisions; balance sheet cleanup
accelerates
1QFY18 Preview: Channel facing hurdles of GST implementation
Piping hot news
Liquor ban not applicable along denotified highways in cities: Supreme
Court
v
In a major concession for hotels and restaurants hit by the recent Supreme
Court ruling banning any liquor joint along 500 metres of any state or national
highways, the apex court on Tuesday clarified that any such executive action
would not fall foul of the law if the highway was within the city limits.
Chart of the Day: India Strategy - Trajectory of profit growth of B2C sectors changing materially in 2H v/s
1H due to GST disruption in 1HFY18 and low base of 2HFY17
India Strategy: PAT change YoY (%)
Research Team (Gautam.Duggad@MotilalOswal.com)
Source: MOSL, Company
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 textbox for the detailed news link
1
Government to keep an eye on
price rise & GST glitches
Keep an eye on price rise and
shortage of any commodity,
report immediately in case of
software glitches and complaints
from traders, and file weekly
reports by Sunday – this is a fresh
directive to all central ministries
from cabinet secretary PK Sinha…
2
Maruti to go Nexa way to woo young buyers
Maruti Suzuki India will revamp its sales and service experience by
incorporating learnings from Nexa to cater to the demands of its young
buyers, and reinvent its corporate brand across all channels. India’s largest
carmaker aims to make 150 standalone showrooms operational for its pre-
owned car chain True Value, 60-70 dedicated service outlets for its
premium retail chain Nexa, and 80 refurbished outlets in its traditional
sales network by March next…
3
Unorganised sector needs
more credit: Finance minister
Arun Jaitley
Finance minister Arun Jaitley has
called for more credit
disbursement towards the
unorganised sector, saying it will
help push employment growth…
4
ICICI Lombard IPO: Stake sale
The IPO of ICICI Lombard General
Insurance Co. Ltd will see its
founders ICICI Bank Ltd and Prem
Watsa’s Fairfax Financial Holdings
Ltd collectively dilute a stake of at
least 20%, said two people aware
of the development.…
5
It’s been a tough year, NSE’s
Ashok Chawla admits in letter
to employees
“Challenges (were) on the
organisational front, stress over
the legacy technology issues, (and)
re-energising of relations with
stakeholders across the spectrum,
from the regulator to
shareholders,” chairman Ashok
Chawla wrote in the letter to
employees…
6
Reliance Jio offer: Bharti Airtel,
Vodafone, others breathe
easier as new Dhan Dhana
Dhan turns costlier at Rs 309
In what could be seen as a
breather for the industry, the new
tariff plan launched by Reliance Jio
on Tuesday has become costlier
by around 33% for consumers.
Jio’s new offer — the earlier one
launched on April 11 called Dhan
Dhana Dhan has run its cycle of
90…
12 July 2017
7
Setback for Anil Ambani led
Reliance Communications,
banks shy away from giving
more credit
A consortium of lenders to
Reliance Communications (RCom)
is unwilling to accede to the
telco’s demand for Rs 600 crore of
additional credit. The funds
sought were primarily in the form
of non-fund-based bank
guarantees, senior bankers told
FE....
2

12 July 2017
1QFY18 Results Update | Sector: Financials
IndusInd Bank
Buy
BSE SENSEX
31,747
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
Avg Val, INRm
Free float (%)
S&P CNX
9,786
IIB IN
595.8
928 / 14.4
1572 / 1038
1/9/24
1570
85.0
CMP: INR1,560
n
TP: INR1,800 (+15%)
Mixed asset quality; strong operating performance
IndusInd Bank’s (IIB) 1QFY18 PAT grew 31% YoY (in-line) to INR8.4b. Strong
loan growth of 24% YoY (in line with management guidance) and steady NIM at
4% (+3bp YoY; ~10bp higher than expected) drove robust NII performance
(+31% YoY; 5% beat).
Robust NII performance, coupled with strong fee income growth of 25%+,
enabled the bank to deliver impressive core PPoP growth of 29% YoY. Opex
trailed total income growth, with continued moderation in employee expenses
(+18% YoY v/s 17% in 4Q and average of 25%+ in the previous eight quarters).
Both corporate (+26% YoY) and consumer (+22% YoY) loans exhibited healthy
growth. Lower growth in vehicle finance (+17% YoY) was compensated by
strong growth of ~40% YoY in retail non-vehicle loans.
GNPAs increased 21% QoQ to 1.1% of loans (0.9% in FY17), led by high
slippages in both CCB and CFD divisions. Slippages in CFD increased 45% QoQ
(+62% YoY) to INR2.6b. Restructured book declined to 0.17% (-20bp QoQ), led
by relapse of two accounts into NPA. There was a sale to ARC of INR570m
during the quarter.
Other highlights: (1)
Overall CASA ratio improved 90bp QoQ (+330bp YoY) to
~38%, led by robust SA mobilization (+65% YoY).
(2)
IIB has exposure of
~INR500m to three of the 12 accounts referred to NCLT for resolution. The
bank holds substantial provisions here, and incremental provisions are not
expected to exceed ~100-120m (may provide in 2QFY18).
(3)
The bank made
floating provision of ~INR750m during the quarter.
Valuation and view:
IIB’s key focus is to scale up on its retail operations, led by
higher share of non-vehicle retail loans by FY20. The bank is targeting 25-30%
loan growth, driven by continued branch expansion (800+ branch addition) and
strong customer acquisition (2x increase to 20m). Strong core profitability, an
improving CASA profile and healthy return ratios (RoA of 1.9%+ and RoE of 16-
18%) are the key positives. We largely maintain estimates. Maintain
Buy
with a
target price of INR1,800 (3.8x June 2019E BV).
n
Financials & Valuations (INR b)
Y/E MARCH
2018E 2019E 2020E
NII
75.3
94.0 114.1
OP
67.5
83.5 100.4
n
NP
37.0
45.9
54.8
NIM (%)
4.3
4.4
4.3
EPS (INR)
61.9
76.8
91.7
n
EPS Gr. (%)
29.1
24.1
19.4
BV/Sh. (INR)
383 446.4 522.0
ABV/Sh. (INR)
377 444.5 522.4
RoE (%)
17.3
18.5
18.9
RoA (%)
1.9
1.9
1.9
P/E (X)
25.2
20.3
17.0
n
P/BV (X)
4.1
3.5
3.0
P/ABV (X)
4.1
3.5
3.0
Estimate change
TP change
Rating change
n
12 July 2017
3

RESULTS
FLASH
South Indian Bank
12 July 2017
Results Flash | Sector: Financials-Banks
BSE SENSEX
29,926
S&P CNX
9,314
CMP: INR27.4
PPOP growth marred by provisions; balance sheet cleanup accelerates
n
SIB reported PAT growth of -34%/+7% QoQ/YoY. The bank registered 35%/46%
QoQ/YoY PPOP growth on the back of high trading gains which formed ~44% of
total other income, the 2
nd
highest in 13 quarters with the exception of
Conference Call Details
3QFY17. However, provisions soared 36%/97% QoQ/YoY, resulting in low YoY
ed
Date:
12
th
Jul, 2017
PAT growth
Time:
11:30am IST
n
NII grew +5%/+23% QoQ/YoY on the back of +0%/+13% QoQ/YoY advances
Dial-in details:
growth and NIM expanding 6bp QoQ and YoY to 2.8%. Opex growth was
+91-22-3960 0818
controlled at -2%/4% QoQ/YoY (flat employee expenses in spite of addition of
279 employees; expect this to be backend loaded). CI ratio declined to 44.2%.
n
Loan growth of +0%/+13% QoQ/YoY was led by robust growth in retail
Financials & Valuations (INR b)
(+4%/20% QoQ/YoY) and SME/agri (+1%/+11% QoQ/YoY) while corporate book
Y/E March
2018E 2019E 2020E
19.8
22.3
25.7
NII
grew -2%/10% QoQ/YoY as per the bank’s retail focused strategy.
13.9
15.5
18.2
OP
n
Asset quality declined as the bank’s absolute GNPA/NNPA soared 48%/75%
5.3
6.6
7.8
NP
QoQ/YoY to INR17b/INR11.8b and stood at 3.61%/2.54% (+116bp/+109bp
2.8
2.8
2.8
NIM (%)
QoQ). However, the bank’s watch-list declined to 0 from INR6b at end of
2.9
3.7
4.3
EPS (INR)
4QFY17, indicating the greater part of INR6.9b of slippages would have come
28.2
31.0
34.4
BV/Sh. (INR)
10.9
12.4
13.3
from the watch-list. The total net stressed assets of the bank stood at 3.06%
RoE (%)
0.7
0.7
0.8
RoA (%)
(vs. 3.43% in 4QFY17)
9.3
7.4
6.3
P/E(X)
n
Valuation and view:
Management is focused on building a low-ticket loan
1.0
0.9
0.8
P/BV (X)
book, with steady balance sheet clean-up, which will help asset quality improve
substantially. We believe the asset quality stress has largely been recognized
and provided for. We will revisit our estimates post earnings call.
We will revisit our estimates
post earnings call/management
interaction.
12 July 2017
4

1QFY18 RESULTS PREVIEW
| Sector: Consumer
Consumer
Company name
Asian Paints
Britannia Industries
Colgate
Dabur
Emami
Godrej Consumer
GSK Consumer
Hindustan Unilever
ITC
Jyothy Labs
Marico
Nestle India
Page Industries
Parag Milk Foods
Pidilite Industries
P&GHH
United Breweries
United Spirits
Channel facing hurdles of GST implementation
Destocking witnessed in most consumer categories
Subdued quarter with pressure on margins
We expect our Consumer Universe’s revenues to increase 3.1% YoY in 1QFY18, with
PAT growth of 1.0% YoY. Sales were impacted in the quarter by down-stocking
ahead of GST implementation. MOSL Consumer Universe’s EBITDA is likely to
decline 0.9% YoY, with 90bp margin contraction. Barring Colgate and Page
Industries, we expect near flattish/or contraction in YoY EBITDA margin for all other
FMCG companies, mainly due to weak sales growth and consequent lack of
operating leverage. Ad spends are unlikely to decline YoY and should rise
sequentially. We expect ITC’s sales to increase by 4.0% YoY (with a 2% decline in
cigarette volumes) and PAT by 6.2% YoY (mainly due to high 35.1% tax rate in the
base quarter). HUVR’s sales growth is estimated at 2.0% (volume decline of 1%). Its
EBITDA margin is expected to come in flat YoY, with volumes affected by destocking
ahead of GST implementation. 11 of the 18 companies under our coverage are likely
to report a decline in EBITDA YoY, with four others estimated to report EBITDA
growth in the range of 0-3%. Colgate, Nestle and Page Industries are likely to report
double-digit EBITDA growth, mainly due to a low margin base. Double-digit EBITDA
decline YoY is expected for Dabur, Emami, GSK Consumer, Marico, Parag, United
Breweries and United Spirits.
RM costs, promotions and new launches
PFAD/palm oil prices were up 3.2%/5.6% YoY, but down 13.4%/12.3% QoQ on
average in 1QFY18. Ti02 prices on average increased by 26.6% YoY and mentha
prices by 10% YoY in 1QFY18. Copra, LLP and HDPE prices were up 59%, 13% and -
3% YoY, respectively, for the last reported month May 2017. Companies have
started taking selective price hikes/grammage reduction/lessening offers following
an increase in raw material costs. Promotion intensity is reducing sequentially.
Majority of new launches are postponed to 2QFY18 or even 3QFY18 due to the
prevalent weak environment.
Preference for quality and longevity of growth
The consumer sector is characterized by rich near-term valuations, given the
market’s continued preference for quality with healthy growth. Our framework for
earnings visibility, longevity of growth and quality management drives our choices in
the sector universe. We continue preferring Britannia, Colgate, P&G Hygiene,
Emami, HUL and ITC, notwithstanding the near-term challenges. In the discretionary
pack, while the near-term outlook is highly challenging, we like Page Industries,
which has demonstrated robust volume growth even in a weak environment and is
poised to do better going forward.
12 July 2017
5

Exhibit 1: Summary of expected quarterly performance
Sector
CMP
(INR)
Consumer
Asian Paints
Britannia
Colgate
Dabur
Emami
Godrej Consumer
GSK Consumer
Hind. Unilever
ITC
Jyothy Labs
Marico
Nestle
P&G Hygiene
Page Industries
Parag Milk Foods
Pidilite Inds.
United Breweries
United Spirits
Sector Aggregate
1,109
3,751
1,126
295
1,069
986
5,400
1,090
337
354
323
6,849
8,042
17,447
217
820
803
2,516
RECO
Neutral
Buy
Buy
Neutral
Buy
Neutral
Sell
Buy
Buy
Neutral
Neutral
Sell
Buy
Buy
Neutral
Neutral
Neutral
Neutral
Sales (INR M)
Var
Var %
Jun-17
% YoY
QoQ
37,101
21,906
10,760
18,085
6,122
23,110
9,250
82,907
104,562
4,548
17,499
26,171
5,739
6,805
4,065
16,008
14,391
20,273
429,301
2.0
4.0
7.0
-6.0
-5.0
9.0
-2.0
2.0
4.0
4.0
0.0
16.0
7.6
19.0
6.0
2.0
-8.0
0.0
3.1
-6.1
-2.4
4.2
-5.5
6.0
-2.9
-16.0
0.9
-6.0
2.0
33.1
5.7
0.0
34.1
-5.1
23.6
29.3
0.7
0.5
EBDITA (INR M)
Var
Var %
Jun-17
% YoY
QoQ
7,625
2,711
2,390
2,965
1,215
3,883
1,809
16,686
36,150
736
3,170
4,792
1,632
1,504
268
3,782
2,245
1,820
95,384
-7.0
-3.8
12.9
-13.9
-17.5
2.9
-11.1
2.0
2.5
-7.5
-14.2
10.0
2.8
37.7
-18.7
-4.1
-22.8
-10.0
-0.9
7.1
-12.0
-2.2
-29.0
-31.8
-28.3
-16.6
1.1
-6.7
21.3
25.6
-6.2
6.1
41.7
-48.3
46.7
122.0
-28.4
-3.6
PAT (INR M)
Var
Var %
Jun-17
% YoY
QoQ
5,045
2,140
1,456
2,569
904
2,570
1,495
11,612
25,327
408
2,319
3,005
1,162
986
82
2,552
1,172
869
65,674
-5.7
-2.4
15.8
-12.3
-23.1
1.3
-6.9
3.0
6.2
-11.1
-13.4
5.4
6.4
45.2
-24.3
-6.1
-20.3
13.1
1.0
5.2
1.5
2.1
-22.9
-37.9
-32.8
-15.0
3.9
-5.1
-62.4
35.7
-3.8
16.7
47.7
-74.4
64.8
1640.8
-13.8
-2.1
Source: MOSL
Exhibit 2: 1QFY18 volume growth expectations (%)
Quarter Ending
Asian Paints
Britannia (Biscuits)
Colgate (Toothpaste)
Dabur
Emami
Godrej Cons. (Soaps)
GSK Consumer
Hindustan Unilever
ITC (cigarette)
Marico
Parachute
Hair Oil
Saffola
Pidilite
1Q15
11.0
10.0
5.0
8.3
12.5
0.0
3.0
5.0
(2.5)
6.0
11.0
10.0
13.0
2Q15
10.0
6.0
7.0
8.7
11.5
2.0
2.0
5.0
(4.0)
7.0
13.0
9.0
10.0
3Q15
3.0
8.0
5.0
7.4
11.0
3.0
5.0
3.0
(13.0)
8.0
10.0
3.0
7.0
4Q15
4.0
8.0
5.0
8.1
12.0
5.0
2.0
6.0
(12.0)
5.0
5.0
(1.0)
5.5
1Q16
12.0
10.0
2.0
8.1
15.0
DD
2.0
6.0
(17.0)
8.0
14.0
4.0
5.0
2Q16
7.0
12.0
3.0
5.5
13.5
MSD
0.0
7.0
(14.0)
11.0
8.0
4.0
3.0
3Q16
15.0
11.0
1.0
(2.5)
9.3
MSD
0.0
6.0
(5.0)
4.0
21.0
17.0
6.0
4Q16
13.0
10.0
3.0
7.0
18.0
MSD
0.0
4.0
0.0
7.0
15.0
10.0
6.0
1Q17
11.0
8.0
5.0
4.1
18.0
LDD
(6.0)
4.0
3.0
7.0
9.0
11.0
9.0
2Q17
12.0
10.0
4.0
4.5
11.0
(MSD)
(3.0)
(1.0)
4.0
(6.0)
11.0
8.0
7.8
3Q17
2.0
2.0
(12.0)
(5.0)
0.2
(8.0)
(17.0)
(4.0)
(1.0)
4Q17
10.0
2.0
(3.0)
2.4
(1.5)
5.0
(1.0)
4.0
0.0
1Q18E
0.0
0.0
0.0
(5.0)
(5.0)
3.0
(5.0)
(1.0)
(2.0)
(1.0)
15.0
(4.0)
(12.0)
10.0
(5.0)
6.0
6.0
(6.0)
(1.5)
7.0
2.0
Source: Company, MOSL
Exhibit 3: Relative performance – 3m (%)
116
112
108
104
100
96
Sensex Index
MOSL Consumer Index
Exhibit 4: Relative performance – 1Yr (%)
128
116
104
92
80
Sensex Index
MOSL Consumer Index
Source: Bloomberg, MOSL
12 July 2017
6

Exhibit 5: PFAD prices up 3.2% YoY and down 13.4% QoQ
Palm Fatty Acid price (INR/MT)
51,000
42,000
33,000
24,000
15,000
Exhibit 6: Palm oil prices up 5.6% YoY and down 12.3% QoQ
3,500
3,000
Palm Oil (Malaysian Ringgit Per Metric Tonne)
39,580
2,500
2,000
1,500
2,601
Source: Bloomberg, MOSL
Source: Bloomberg, MOSL
Exhibit 7: Mentha prices up 10% YoY and down 6% QoQ
Mentha Oil prices INR / kg
1,250
1,000
Exhibit 8: TiO2 prices up 26.6% YoY and 15.4% QoQ
310
270
TiO2 price (INR/kg)
280
955
750
500
230
190
150
Source: Bloomberg, MOSL
Source: Bloomberg, MOSL
Exhibit 9: Comparative valuation
Sector / Companies
Consumer
Asian Paints
Britannia
Colgate
Dabur
Emami
Godrej Consumer
GSK Consumer
Hind. Unilever
ITC
Jyothy Labs
Marico
Nestle
P&G Hygiene
Page Industries
Parag Milk Foods
Pidilite Inds.
United Breweries
United Spirits
Sector Aggregate
RECO
EPS (INR)
FY18E FY19E FY20E
23.1
85.5
25.7
7.7
28.5
21.8
166.3
22.8
9.6
8.9
6.9
118.6
155.8
317.0
7.4
18.4
9.7
37.4
27.4
105.4
31.1
9.1
33.9
25.0
181.9
27.0
11.6
11.0
8.4
139.5
181.6
400.0
12.3
21.2
14.7
51.8
33.2
129.0
37.1
10.7
39.0
28.4
199.4
31.3
13.9
13.2
9.8
167.7
213.9
595.0
16.7
24.5
18.6
62.4
FY18E
47.9
43.9
43.9
38.2
37.5
45.2
32.5
47.8
34.9
39.5
46.4
57.7
51.6
55.0
29.2
44.5
82.8
67.3
42.3
PE (x)
FY19E
40.4
35.6
36.2
32.3
31.5
39.5
29.7
40.4
29.0
32.3
38.3
49.1
44.3
43.6
17.7
38.7
54.5
48.5
35.3
FY20E
33.4
29.1
30.3
27.5
27.4
34.7
27.1
34.8
24.2
26.8
32.9
40.8
37.6
29.3
13.0
33.5
43.1
40.3
29.7
EV/EBIDTA (x)
FY18E FY19E FY20E
31.0
31.7
26.6
31.2
28.7
31.4
22.4
33.0
24.0
23.2
32.7
34.5
32.7
35.4
12.3
28.8
34.5
33.3
28.6
26.1
25.1
22.1
26.2
24.1
27.7
19.9
27.8
19.8
19.9
27.3
29.3
27.6
28.1
9.3
24.7
26.4
26.9
23.8
21.6
19.9
18.7
22.1
20.3
24.7
17.3
23.9
16.3
17.1
23.5
24.6
24.3
19.0
6.9
21.0
20.3
21.4
19.8
ROE (%)
FY18E FY19E FY20E
28.6
36.5
53.2
26.0
33.1
24.5
22.1
72.8
25.8
15.1
35.5
36.4
78.9
42.0
9.1
25.6
10.7
19.3
29.2
30.6
31.1
38.3
37.4
60.3
66.5
26.3
26.4
31.8
29.6
23.0
22.4
22.4
21.9
82.5
88.2
29.3
31.8
18.4
21.1
38.1
39.8
39.0
42.1
74.0
70.8
42.8
50.7
13.4
15.7
24.0
22.8
14.6
16.2
19.7
17.7
30.9
31.9
Source: MOSL
Neutral
Buy
Buy
Neutral
Buy
Neutral
Sell
Buy
Buy
Neutral
Neutral
Sell
Buy
Buy
Neutral
Neutral
Neutral
Neutral
12 July 2017
7

In conversation
1. Sentiments have turned positive due to expectations of good
monsoon: M&M Finance; V Ravi, ED & CFO
n
n
n
n
Demonetisation effect to a large extent is over and with expectation of a good
monsoon the sentiments have turned positive
Demonetisation effects getting over is one more reason for the growth to be
revived and hopes this year to be reasonably good for the company.
NPLs should see some easing in FY18
GNPL can rise by 15-17 percent due to transition to 90 days from 120 days. If
NPL is around 5 percent, then it can rise to 6 percent
2. Likely to see double-digit growth next year: Sanghi Industries;
Alok Sanghi, Whole-Time Director
n
n
n
n
Saw solid demand growth in the first two months of FY18
FY18 should be positive for the cement sector. Sanghi Industries likely to see
double-digit growth next year
Will see benefits of capacity expansion by end of this year
Will fund capacity expansion through a mix of debt and internal accruals.
3. New launches aid margin improvement; GST implementation
smooth: Asian Granito India; Himanshu Shah, Head-Finance
n
n
n
n
Share sale by promoters was actually by distinct relatives of the promoters for
their personal requirement. The promoter stake is currently at 32.40 percent. In
fact, they are likely to increase the stake going forward.
The limit is of increasing stake by 5 percent, he said. Earlier in March, promoters
has bought stake and the holding had gone up from 28.16 to 33.1 percent in
March.
GST implementation has been quite smooth as of now for the company, and the
sector except unorganized players in Morbi who are on strike.
New launches for the company are doing well and the EBITDA margins on them
will be around 10-15 percent. Received orders worth Rs 103-104 crore for them.
4. Hike in sugar import duty is a good step for domestic millers:
Simbhaoli sugars; Sanjay Tapriya, CFO & Abinash Verma,
Director General of Indian Sugar Mills' Association (ISMA)
n
n
n
n
Imported landing price at current duty will be equal to domestic prices.
No price differential post the hike in import duty.
Cane prices are the biggest game changers.
Hike in sugar import duty is a good step for domestic millers.
12 July 2017
8

From the think tank
1. India’s potential for leading global growth
n
After the best part of three years as the fastest growing major economy in the
world, India fell behind China in the last quarter of FY17—headline material in
the slightly shopworn story of the dragon versus elephant growth race. But
according to growth projections released late last month by researchers at the
Center for International Development (CID) at Harvard University, based on
2015 data, the reversal is an inconsequential blip. India took over from its
neighbour as the “economic pole of global growth” over the past few years and
will remain so at least through the decade to 2025. The economic logic
underlying those projections raises some intriguing questions about India’s
growth trajectory. The projections are based largely on CID’s new 2015
Economic Complexity Index—part of the Atlas of Economic Complexity, a
brainchild of economist Ricardo Hausmann and physicist César A. Hidalgo. In a
2009 paper, The Building Blocks Of Economic Complexity, Hausmann and
Hidalgo laid out their reasoning for this new model to judge economic growth.
2. TV audiences going digital. are tv stations in India waking up?
n
I am what some call a cord cutter. I am not fully there yet as there are still cords
coming into my house with television content, meant primarily for the kid of the
house. Despite these paid television subscriptions at home, I have not watched
it for a year and am unlikely to watch anything until the next season of
MasterChef Australia. I do consume a lot of content on my television, but they
are all internet-based. At the moment there is nothing on Indian television that
would make it watch it, not even news (not that there is news on Indian
television either). I think herein lies a problem for television in general. At home,
I have multiple options to watch content. An LG smart TV that has YouTube and
Netflix. An old TV connected to Apple TV with a whole bunch of apps that
stream content—for the rest I can just play on the phone or Mac and mirror to
this screen.
3. India sees your bond bubble, will raise you a green one
n
There’s a green bubble in India, with investors flocking to fund a planned tripling
of renewable energy capacity over the next five years. Luckily for Singapore’s
sovereign wealth fund, one of the more gung-ho backers of solar, wind and
hydroelectric power in the country, there’s a bigger bubble out there — in
global bond markets — that’s allowing the green mania to grow. GIC Pte owns
64% of Hyderabad-based, but Mauritius-incorporated, Greenko Energy Holdings.
The latter appears to have worked out that there’s nothing like a red-hot market
to push through a $950 million, seven-year issue.
12 July 2017
9

4. The puzzle of telecom regulation
n
Revenues from telecom firms contribute to more than 90 per cent of the
estimated ₹47,000 crore non-tax revenue of the government for 2017-18. The
reduced turnover of these companies and their apparent need for a bailout
threatens to derail the government’s fiscal arithmetic. Is there a way out? The
fundamental reason for their distress is not the market strategy of Reliance Jio,
which is merely a symptom, but the transformation the industry is going
through. In the early days different companies provided voice telephony,
Internet service, and Internet content and applications. For instance, in India we
had Airtel, Sify and Rediff.com.
International
5. Why the dollar is still king
n
In the last one month, things have begun to turn in the sovereign bond market.
The Federal Reserve (Fed) raised the federal funds rate (FF rate) in June to a
maximum of 1.25%. Not only that, the minutes of the meeting of the Federal
Reserve open market committee (FOMC) have confirmed that the Fed stands
ready to start shrinking its balance sheet in the next few months. Some
commentators have called the policy stance of the Fed wrong (see, for example,
Martin Sandbu of the Financial Times). They feel that the move to raise the
policy rate in baby steps risks an end to the economic expansion that is eight
years old. They are making the same mistake that they made before 2008. Even
if the inflation rate were below 2.0%, and stayed that way, the FF rate in real
terms is negative. Or, even if the inflation rate were to edge down to 1.5%, the
real FF rate would be barely positive. Hence, the monetary policy is still very
accommodative especially since the unemployment rate is below 5.0%, supply
of leveraged loans is at a record high, stock indices are at record high valuations
and stock market volatility at record lows.
12 July 2017
10

Click excel icon
for detailed
valuation guide
Rs
Valuation snapshot
P/E (x)
P/B (x)
FY17 FY18E FY17 FY18E
25.2
18.4
19.5
29.3
36.6
19.4
32.7
28.8
18.4
23.2
18.9
20.8
24.3
25.5
14.8
34.8
21.9
21.3
24.0
32.5
20.9
25.0
18.5
17.7
26.0
19.7
29.8
29.6
9.6
16.7
22.8
8.8
10.5
9.8
8.7
8.9
8.6
14.6
15.8
6.2
12.8
29.4
18.2
20.5
11.8
46.6
32.4
12.2
15.1
9.0
5.6
5.0
4.7
6.2
8.2
3.1
15.9
7.2
3.4
3.8
7.4
3.2
2.8
6.2
2.7
11.2
4.8
2.2
2.8
2.4
2.2
4.8
2.1
1.4
4.6
0.8
4.6
4.7
1.1
3.2
3.3
1.1
0.7
0.8
0.5
1.0
0.4
0.8
1.3
0.5
0.9
8.1
4.2
4.1
1.7
15.8
6.5
3.8
3.4
2.5
4.7
4.3
4.3
5.4
7.3
2.7
11.5
5.9
2.9
3.4
6.3
2.9
2.5
5.4
2.2
8.9
4.2
2.1
2.3
2.2
1.8
4.3
2.0
1.4
4.0
0.8
4.1
4.2
1.0
2.8
2.9
1.0
0.6
0.7
0.5
0.9
0.4
0.8
1.2
0.5
0.9
6.5
3.4
3.5
1.6
13.1
5.9
3.3
2.9
2.2
ROE (%)
FY17 FY18E FY19E
20.3
23.3
25.3
16.2
15.8
16.9
40.3
20.8
10.6
14.0
35.7
14.2
6.4
20.3
9.8
25.6
17.1
6.9
10.8
8.9
9.9
17.9
10.2
7.2
15.3
-27.0
13.8
12.3
9.4
18.9
11.4
4.1
-6.7
4.2
1.4
10.1
-8.4
3.6
-0.2
2.7
0.9
21.7
15.1
18.1
14.4
30.4
19.3
25.5
19.4
24.0
20.4
25.3
23.1
19.8
21.1
15.1
40.8
22.4
17.3
14.8
36.0
14.1
10.8
20.8
16.5
28.6
19.1
10.1
10.9
7.1
10.2
18.2
9.4
7.9
16.5
4.0
14.9
14.9
10.6
18.0
12.8
11.9
6.1
7.5
5.8
10.6
4.6
5.6
8.7
8.1
6.7
24.6
20.9
18.5
13.9
30.8
18.3
29.0
20.6
25.9
20.7
27.9
24.4
22.3
21.9
17.8
38.0
23.6
18.3
15.9
31.0
14.6
11.5
22.8
27.3
35.2
22.6
15.4
11.8
10.1
10.5
19.0
10.1
8.8
17.7
7.0
16.1
17.5
12.2
19.5
14.3
13.2
9.0
9.4
7.3
11.1
5.4
7.5
10.0
10.5
8.3
26.4
21.6
18.9
15.3
30.8
17.4
32.7
19.7
26.9
Company
Automobiles
Amara Raja
Ashok Ley.
Bajaj Auto
Bharat Forge
Bosch
CEAT
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.
Cholaman.Inv.&F
n
Dewan Hsg.
GRUH Fin.
HDFC
Indiabulls Hsg
LIC Hsg Fin
Manappuram
Reco
Buy
Buy
Buy
Buy
Neutral
Buy
Buy
Buy
Neutral
Buy
Neutral
Buy
Not Rated
Buy
Buy
Buy
CMP
(INR)
TP % Upside
EPS (INR)
(INR) Downside FY17 FY18E FY19E
26
17
20
20
0
13
11
17
8
27
-2
14
14
46
7
28.0
4.6
132.3
26.2
473.1
93.3
613.8
23.5
20.0
8.2
169.1
54.3
5.4
248.6
19.8
11.7
852
1,073
105
123
2,793 3,359
1,104 1,330
23,784 23,738
1,862 2,100
28,125 31,326
880
1,025
680
731
225
286
3,750 3,666
1,390 1,586
239
-
7,451 8,483
457
666
566
606
33.8
40.5
30.4
5.7
7.4
22.9
143.5 167.9 21.1
37.7
49.7
42.2
649.9 766.2 50.3
96.2 131.3 20.0
861.2 1,102.9 45.8
30.5
38.8
37.5
36.9
45.7
34.0
9.7
11.9
27.5
198.2 198.7 22.2
66.7
79.9
25.6
9.9
11.8
44.7
292.6 379.7 30.0
30.9
64.3
23.1
16.3
25.9
48.2
28.3
23.8
8.0
4.8
5.5
67.1
15.6
3.5
60.1
4.4
32.2
18.0
2.9
90.7
40.3
10.3
7.4
6.8
79.4
17.9
4.2
74.3
8.0
40.4
24.2
3.6
114.6
33.0
27.4
33.2
23.7
29.6
18.9
20.7
32.5
NM
35.7
44.8
12.7
20.7
28.6
27.1
NM
18.9
36.8
10.1
NM
24.0
953.4
19.9
106.4
42.2
35.8
24.5
14.8
59.3
35.0
15.7
19.0
11.3
Neutral
508
Neutral
192
Buy
157
Buy
114
Buy
1,681
Buy
290
Neutral
62
Buy
1,559
Neutral
86
Buy
959
Under Review 532
Buy
28
Buy
1,511
500
182
207
134
1,885
340
62
1,716
89
1,146
-
31
2,121
-1
-5
32
18
12
17
0
10
3
20
12
40
15.4
7.0
4.7
4.8
56.8
15.3
3.0
47.9
-31.3
26.8
11.9
2.2
73.0
Buy
Neutral
Neutral
Neutral
Buy
Neutral
Buy
Buy
Neutral
163
144
356
56
297
146
149
284
152
212
147
362
49
357
150
184
362
162
30
2
2
-12
20
2
23
28
6
6.0
-14.8
18.8
1.5
29.3
-31.6
6.2
0.3
7.6
18.4
13.7
36.2
6.4
33.2
17.1
10.3
17.9
24.6
22.5
22.0
49.2
8.6
38.0
21.4
14.5
23.3
34.5
Buy
Neutral
Buy
1,418
751
1,127
1,600
800
1,300
530
443
-
1,300
750
-
13
7
15
21
-8
20
3
33.6
21.0
46.0
29.6
8.1
46.8
69.0
38.2
8.6
48.3
41.3
55.0
37.0
10.4
50.7
88.9
47.9
10.8
64.4
53.0
66.4
45.4
12.5
55.9
113.9
53.8
12.5
Buy
437
Neutral
483
Under Review 1,642
Buy
1,083
Neutral
725
Not Rated
97
12 July 2017
11

Company
Reco
M&M Fin.
Buy
Muthoot Fin
Buy
PFC
Neutral
Repco Home
Buy
REC
Neutral
Shriram
City
Buy
Union
STF
Buy
Aggregate
Capital Goods
ABB
Sell
Bharat Elec.
Buy
BHEL
Sell
Blue Star
Neutral
CG Cons. Elec.
Buy
CG Power & Indu. Sell
Cummins
Neutral
GE T&D
Neutral
Havells
Neutral
K E C Intl
Neutral
L&T
Buy
Pennar Eng.
Not Rated
Siemens
Neutral
Solar Ind
Neutral
Suzlon Energy
Not Rated
Thermax
Sell
Va Tech Wab.
Buy
Voltas
Sell
Aggregate
Cement
Ambuja Cem.
Buy
ACC
Neutral
Birla Corp.
Buy
Dalmia Bharat
Buy
Grasim Inds.
Neutral
India Cem
Neutral
J K Cements
Buy
JK Lakshmi Ce
Buy
Ramco Cem
Buy
Orient Cem
Buy
Prism Cem
Buy
Shree Cem
Buy
Ultratech
Buy
Aggregate
Consumer
Asian Paints
Neutral
Britannia
Buy
Colgate
Buy
Dabur
Neutral
Emami
Buy
Godrej Cons.
Neutral
GSK Cons.
Sell
HUL
Buy
ITC
Buy
Jyothy Lab
Neutral
CMP
(INR)
360
444
123
788
185
2,237
1,014
TP % Upside
(INR) Downside
415
15
550
24
117
-5
936
19
134
-28
2,900
1,340
30
32
FY17
7.1
29.5
25.7
29.1
31.4
84.3
55.6
EPS (INR)
FY18E
13.6
41.0
27.2
35.8
35.0
132.8
78.5
FY19E
16.4
43.3
30.2
42.5
40.4
171.2
98.5
P/E (x)
P/B (x)
FY17 FY18E FY17 FY18E
50.8 26.6
3.1
2.9
15.0 10.8
2.7
2.3
4.8
4.5
0.8
0.7
27.1 22.0
4.3
3.7
5.9
5.3
1.1
0.9
26.5
18.2
19.0
74.5
24.7
65.1
46.6
47.3
20.1
34.1
58.2
50.0
23.3
27.5
17.6
75.7
41.6
30.5
29.9
23.6
29.9
34.8
52.2
49.0
29.9
68.1
18.5
36.6
28.9
66.7
26.0
NM
357.9
47.9
43.2
37.5
53.8
50.1
50.8
42.0
39.7
51.3
34.9
56.4
39.3
32.7
16.8
12.9
16.0
58.5
23.9
39.3
33.8
40.4
36.1
31.4
53.8
41.0
21.6
24.7
13.7
55.5
37.9
21.9
28.3
19.5
29.7
30.5
35.2
33.1
21.5
39.6
17.7
22.1
24.1
40.7
22.8
33.7
33.6
40.5
43.3
31.2
48.9
43.2
42.1
39.3
36.9
44.4
32.7
48.6
34.3
41.1
2.9
2.0
3.5
9.5
5.1
1.1
7.6
25.7
1.2
6.7
8.3
9.1
4.5
3.2
1.8
7.0
7.6
-1.8
4.1
3.7
4.6
3.9
2.6
3.6
2.0
4.7
2.0
1.2
3.9
3.9
4.6
3.2
6.2
9.1
4.9
3.7
14.3
16.4
23.0
11.1
13.6
12.4
7.3
35.9
8.9
6.1
2.6
1.8
3.1
8.2
3.9
1.0
7.1
18.6
1.2
6.2
7.5
8.1
3.8
3.0
1.6
6.1
6.6
-1.9
3.7
3.2
4.2
3.6
2.5
3.4
1.9
4.2
1.8
1.2
3.4
3.6
3.9
3.0
5.4
7.6
4.5
3.3
13.7
15.1
21.7
9.5
11.0
9.7
7.1
34.8
8.8
6.3
FY17
6.3
19.4
17.9
17.4
19.9
11.7
11.7
18.3
12.7
20.6
1.6
18.0
76.4
6.2
21.2
12.4
18.2
21.2
12.2
10.2
9.3
19.8
NM
14.3
16.3
18.0
11.2
5.1
7.4
7.5
7.2
11.5
3.4
14.4
6.0
19.2
-3.2
1.8
20.2
12.0
9.7
28.5
36.9
50.4
28.4
35.8
24.6
22.2
65.6
23.5
21.1
ROE (%)
FY18E
11.4
23.2
17.0
18.1
19.1
16.2
14.7
19.1
13.9
16.5
2.7
21.7
53.4
3.4
20.5
14.7
19.8
19.2
12.6
11.6
11.0
18.6
-8.8
13.7
17.7
14.7
11.7
7.3
10.6
9.2
11.3
10.9
5.5
15.0
9.2
18.6
9.2
17.2
20.4
10.9
10.7
28.6
36.5
53.2
26.0
33.1
24.5
22.1
72.8
25.8
15.1
FY19E
12.8
21.4
16.8
18.2
19.1
18.1
16.3
19.2
15.8
16.8
3.4
30.1
49.8
4.2
23.2
16.4
21.1
20.9
13.4
12.6
13.7
19.9
-11.0
12.9
17.5
14.9
12.7
7.8
13.1
12.2
13.1
13.9
7.2
17.2
13.8
19.1
12.6
22.0
21.3
14.9
13.1
30.6
38.3
60.3
26.3
31.8
23.0
22.4
82.5
29.3
18.4
1,467
171
140
601
221
83
905
334
478
276
1,739
124
1,349
858
19
923
682
463
1,200
200
100
610
240
65
950
320
480
250
2,000
-
1,355
825
-
850
800
400
-18
17
-28
2
8
-21
5
-4
0
-10
15
0
-4
-8
17
-14
19.7
6.9
2.1
12.9
4.7
4.1
26.5
5.7
9.6
11.9
63.3
7.1
17.8
20.6
0.6
30.8
28.9
15.5
25.1
7.2
3.6
17.8
5.5
2.3
28.8
6.2
11.7
12.8
70.4
9.1
24.3
22.6
0.9
32.7
34.9
15.6
32.2
8.1
4.7
26.6
6.6
4.5
35.5
7.6
14.2
16.4
80.8
11.2
33.3
28.2
1.0
34.0
39.8
17.6
255
291
1,652 1,611
879
1,205
2,640 3,162
1,258 1,355
206
219
973
1,287
464
553
709
823
155
178
125
145
18,408 21,052
4,151 4,780
14
-2
37
20
8
6
32
19
16
15
16
14
15
4.9
33.7
29.4
38.8
67.9
5.6
33.7
7.0
27.3
-1.6
0.3
384.4
96.1
7.3
49.9
40.9
66.7
71.2
9.3
40.4
11.4
31.1
4.6
3.7
454.7
95.8
8.2
64.9
58.9
87.1
102.6
12.9
53.5
19.2
37.5
7.0
5.6
575.2
143.2
1,130
3,690
1,079
304
1,052
969
5,444
1,107
330
368
1,240
4,450
1,335
315
1,265
930
4,500
1,260
380
405
10
21
24
4
20
-4
-17
14
15
10
21.0
73.7
21.2
7.2
26.5
18.9
156.1
19.6
8.4
11.2
23.1
85.5
25.7
7.7
28.5
21.8
166.3
22.8
9.6
8.9
27.4
105.4
31.1
9.1
33.9
25.0
181.9
27.0
11.6
11.0
12 July 2017
12

Company
Marico
Nestle
Page Inds
Parag Milk
Pidilite Ind.
P&G Hygiene
Prabhat Dairy
United Brew
United Spirits
Aggregate
Healthcare
Alembic Phar
Alkem Lab
Ajanta Pharma
Aurobindo
Biocon
Cadila
Cipla
Divis Lab
Dr Reddy’s
Fortis Health
Glenmark
Granules
GSK Pharma
IPCA Labs
Jubilant Life
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.
Hind. Media
HT Media
Jagran Prak.
PVR
Siti Net.
Sun TV
Zee Ent.
Aggregate
Metals
Hindalco
Reco
Neutral
Sell
Buy
Neutral
Neutral
Buy
Not Rated
Neutral
Neutral
CMP
TP % Upside
(INR)
(INR) Downside
322
360
12
6,791 5,990
-12
16,393 20,195
23
235
240
2
816
835
2
7,981 9,082
14
135
-
801
850
6
2,638 2,415
-8
FY17
6.3
118.0
238.7
3.6
16.7
144.9
3.5
8.7
26.7
EPS (INR)
FY18E
6.9
118.6
317.0
7.4
18.4
155.8
3.5
9.7
37.4
FY19E
8.4
139.5
400.0
12.3
21.2
181.6
6.4
14.7
51.8
P/E (x)
P/B (x)
FY17 FY18E FY17 FY18E
51.2 46.3 17.9 15.2
57.6 57.2 21.7 20.0
68.7 51.7 27.5 21.7
65.1 31.6
3.0
2.7
48.7 44.2 12.6 10.3
55.1 51.2 45.5 36.3
38.2 38.7
1.9
1.9
92.1 82.6
9.2
8.4
98.7 70.6 19.8 13.6
47.9 42.3 13.2 12.3
24.8
24.1
25.6
17.8
31.7
36.4
33.8
18.5
37.1
15.5
17.1
19.3
75.7
29.5
19.3
19.2
32.5
21.6
35.9
24.1
24.7
17.2
46.0
31.0
39.4
15.3
19.7
30.3
81.1
18.3
NM
10.8
11.1
16.4
69.1
NM
33.0
21.9
39.6
12.4
21.4
22.9
22.7
15.9
31.2
29.1
27.0
20.8
25.3
76.1
15.6
17.0
50.1
22.2
15.1
19.7
29.4
22.3
28.9
23.4
23.0
13.9
36.3
30.0
25.0
8.1
15.9
25.8
56.3
15.8
NM
9.3
10.3
14.4
49.0
NM
28.7
32.5
29.6
9.2
5.3
5.2
8.5
4.4
4.3
8.3
3.4
4.2
3.6
1.7
4.2
3.5
16.3
2.4
3.2
3.9
5.6
3.7
7.2
5.6
4.3
2.5
20.4
3.2
2.3
2.1
3.1
3.7
17.4
4.3
1.5
1.9
0.7
2.4
6.9
3.7
8.2
8.4
5.8
1.5
4.5
4.4
6.4
3.5
3.9
6.8
3.1
3.7
3.0
1.4
3.4
2.4
19.9
2.2
2.7
3.3
5.1
3.5
5.9
4.9
3.8
2.3
15.6
3.1
2.2
1.9
2.6
3.4
13.3
3.8
1.6
1.6
0.7
2.4
6.1
3.8
7.6
7.1
5.3
1.3
FY17
36.7
39.0
40.0
5.9
28.2
45.3
5.2
10.4
21.3
27.6
23.0
23.4
37.7
28.3
13.6
24.8
10.2
23.5
9.6
11.3
24.7
21.1
21.5
8.6
18.1
22.0
17.1
18.5
22.2
25.3
17.5
12.6
50.5
10.8
5.9
12.4
16.7
12.2
24.1
25.5
-12.0
19.0
7.1
17.6
10.4
-23.5
25.0
24.7
14.7
14.0
ROE (%)
FY18E
35.5
36.4
42.0
9.1
25.6
78.9
4.9
10.7
19.3
29.1
22.6
20.7
32.2
24.8
12.6
25.7
11.5
19.0
13.2
2.0
21.6
17.7
39.7
10.5
19.6
18.2
17.5
16.1
22.5
22.4
16.4
17.2
48.6
10.6
9.1
19.4
17.8
13.4
26.8
25.7
-5.3
18.3
7.0
16.4
13.2
-2.0
26.3
23.6
17.8
15.2
FY19E
38.1
39.0
42.8
13.4
24.0
74.0
8.5
14.6
19.7
30.7
23.1
21.0
29.9
22.5
15.6
27.2
12.8
19.2
14.9
5.3
20.9
18.8
54.4
12.7
19.6
19.4
19.1
17.9
20.7
24.2
17.5
17.8
46.8
11.8
11.1
25.4
18.6
15.0
327.5
26.5
0.7
17.9
7.3
17.2
17.7
6.9
30.2
23.7
22.7
15.4
Neutral
Neutral
Buy
Buy
Sell
Buy
Neutral
Neutral
Neutral
Buy
Neutral
Buy
Neutral
Neutral
Buy
Buy
Buy
Buy
Not Rated
Buy
534
1,826
1,498
700
323
518
538
734
2,691
161
671
139
2,601
473
714
1,139
4,196
564
467
1,328
640
1,900
2,028
750
300
510
500
600
2,600
240
800
200
2,700
480
905
1,475
4,850
650
-
1,450
20
4
35
7
-7
-1
-7
-18
-3
49
19
44
4
1
27
29
16
15
9
21.6
75.7
58.4
39.3
10.2
14.2
15.9
39.7
72.6
10.3
39.3
7.2
34.4
16.1
37.0
59.2
129.1
26.1
13.0
55.2
24.9
79.7
66.1
44.1
10.4
17.8
20.0
35.4
106.2
2.1
42.9
8.2
51.9
21.3
47.3
57.9
142.7
25.2
16.1
56.8
30.5
95.0
79.6
50.2
14.4
23.2
25.0
39.8
143.0
6.1
51.7
11.5
60.1
28.5
56.7
72.0
173.2
30.8
18.0
71.4
Buy
Not Rated
Neutral
Buy
Not Rated
Not Rated
169
4,720
1,177
268
128
334
228
-
1,236
313
-
-
35
5
17
9.8
102.5
38.0
6.8
8.4
16.9
12.2
129.9
39.2
10.7
15.9
21.0
14.3
163.2
45.8
13.6
23.9
25.9
Buy
Buy
Neutral
Buy
Neutral
Buy
Buy
Neutral
Neutral
Buy
80
374
81
279
82
177
1,419
26
819
507
105
450
90
360
90
225
1,588
32
860
585
31
20
11
29
9
27
12
21
5
15
1.0
20.4
-8.6
25.9
7.4
10.8
20.5
-1.8
24.9
23.1
1.4
23.6
-2.7
30.1
8.0
12.3
28.9
-0.1
28.5
15.6
4.0
27.5
0.3
35.3
9.2
14.0
45.1
0.5
35.9
18.6
Buy
200
308
54
16.2
21.8
26.1
12 July 2017
13

Company
Hind. Zinc
JSPL
JSW Steel
Nalco
NMDC
SAIL
Vedanta
Tata Steel
Aggregate
Oil & Gas
BPCL
GAIL
Gujarat Gas
Gujarat St. Pet.
HPCL
IOC
IGL
MRPL
Oil India
ONGC
PLNG
Reliance Ind.
Aggregate
Retail
Jubilant Food
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
Tata Comm
Aggregate
Utiltites
Coal India
CESC
JSW Energy
NTPC
Reco
Sell
Buy
Buy
Neutral
Buy
Sell
Neutral
Neutral
CMP
(INR)
270
139
214
67
117
62
258
557
TP % Upside
(INR) Downside
246
-9
190
37
281
31
70
5
180
53
37
-40
235
-9
581
4
FY17
19.7
-20.9
14.8
3.7
10.0
-6.2
15.1
37.0
EPS (INR)
FY18E
19.7
-17.2
19.0
3.8
12.1
-10.6
22.0
50.5
FY19E
21.7
2.4
22.6
4.2
12.2
-4.2
23.3
66.5
P/E (x)
P/B (x)
FY17 FY18E FY17 FY18E
13.7 13.7
3.7
5.0
NM
NM
0.4
0.4
14.4 11.3
2.3
2.0
18.2 17.8
1.3
1.2
11.8
9.7
1.6
1.5
NM
NM
0.7
0.8
17.0 11.7
1.6
1.6
15.1 11.0
1.7
1.5
18.6 15.3
1.5
1.5
9.3
16.1
37.3
19.2
8.4
9.0
26.3
8.3
13.7
9.8
19.1
14.0
11.8
108.9
58.6
63.3
17.2
14.2
18.4
15.5
11.3
14.2
21.1
15.4
13.8
17.6
30.3
18.5
12.5
15.6
14.7
16.4
35.6
27.6
NM
25.1
38.6
17.0
16.6
16.6
12.5
12.3
13.8
22.6
15.3
11.6
10.8
23.9
12.1
9.5
9.2
25.3
12.2
12.1
89.6
51.5
55.4
14.4
13.8
16.4
15.4
10.3
13.3
17.2
14.2
14.4
15.1
25.1
17.7
12.5
15.2
13.0
16.2
67.3
23.9
NM
64.0
125.8
14.5
11.0
20.4
12.2
2.9
1.6
6.4
2.1
2.6
1.8
5.3
2.1
0.7
0.9
4.0
1.5
1.6
8.9
11.1
10.9
2.8
3.6
4.5
3.2
1.7
4.9
3.4
2.1
2.2
2.7
9.5
5.8
2.1
2.5
2.3
3.8
2.3
4.9
1.2
11.7
2.7
6.4
1.7
1.0
1.4
2.5
1.5
5.2
1.9
2.2
1.6
4.6
1.9
0.7
0.9
3.6
1.4
1.4
8.4
10.2
10.0
2.5
3.5
3.9
2.9
1.5
3.8
3.1
2.4
2.0
2.6
7.6
6.0
1.9
2.2
2.0
3.7
2.3
4.3
1.4
9.9
2.6
6.4
1.5
1.0
1.3
FY17
24.4
-7.9
17.3
7.2
12.4
-6.7
9.7
15.4
8.2
32.4
9.6
17.8
11.6
32.4
21.2
21.0
31.4
5.7
10.1
23.2
11.9
13.3
8.2
20.6
17.2
16.2
27.5
26.5
22.0
14.3
40.4
16.8
13.2
16.1
17.0
37.1
33.5
18.4
16.9
16.3
23.2
6.7
16.2
-1.6
126.2
6.9
37.8
10.5
6.3
11.5
ROE (%)
FY18E
30.9
-5.4
18.7
7.0
15.0
-12.6
13.7
14.6
10.0
21.7
11.3
25.3
13.1
20.6
15.8
20.6
16.5
7.5
9.9
15.1
11.8
12.0
9.3
20.6
18.1
17.1
25.2
25.3
19.9
15.2
32.5
19.0
14.2
14.3
18.1
33.7
32.5
16.0
15.4
16.3
22.6
3.4
19.1
-15.3
16.7
2.1
44.5
14.4
4.9
10.9
FY19E
39.6
0.8
19.0
7.5
15.5
-5.5
15.0
17.0
12.5
22.3
11.8
28.0
14.0
20.0
15.8
19.6
16.9
7.8
10.8
26.4
11.5
12.4
12.6
21.6
19.0
17.2
25.8
23.5
19.7
15.3
28.4
20.3
16.1
15.2
20.8
32.3
33.3
16.9
15.5
17.1
22.1
6.1
18.7
-20.8
37.8
4.2
47.0
13.9
4.8
12.3
Neutral
Sell
Sell
Neutral
Buy
Neutral
Neutral
Neutral
Buy
Buy
Buy
Neutral
678
364
762
169
342
387
1,117
123
264
160
218
1,495
768
340
697
168
420
459
1,070
113
305
195
259
1,262
13
-6
-8
0
23
19
-4
-8
15
22
19
-16
72.5
22.6
20.4
8.8
40.7
43.0
42.5
14.8
19.3
16.4
11.4
106.6
55.0
26.3
33.7
11.0
29.5
36.0
46.8
10.2
27.9
17.4
8.6
122.1
65.2
29.8
46.5
13.1
32.6
40.0
51.9
11.8
30.1
19.7
17.6
131.0
Sell
Neutral
1,090
530
730
545
-33
3
10.0
9.0
12.2
10.3
17.9
12.1
Buy
Buy
Neutral
Buy
Neutral
Buy
Neutral
Neutral
Neutral
Buy
Buy
Neutral
Buy
Neutral
Buy
528
850
252
976
134
786
524
601
589
663
1,708
2,472
386
263
808
620
960
235
1,200
150
850
475
600
470
740
1,607
2,400
465
250
1,020
17
13
-7
23
12
8
-9
0
-20
12
-6
-3
21
-5
26
30.6
59.8
13.7
62.9
11.9
55.5
24.9
38.9
42.8
37.7
56.3
133.4
30.9
16.9
54.9
36.6
61.4
15.4
63.4
13.0
59.1
30.5
42.3
41.0
43.9
68.0
139.6
31.0
17.3
62.0
42.0
66.7
16.7
68.9
15.2
65.1
36.2
46.2
47.3
52.3
80.4
151.6
36.2
18.9
74.2
Buy
Buy
Buy
Buy
395
410
84
653
430
440
110
811
9
7
30
24
11.1
14.9
-1.1
26.0
5.9
17.2
-9.7
10.2
10.9
19.3
-11.2
30.8
Buy
Buy
Buy
Buy
254
862
64
163
315
1,140
85
198
24
32
32
21
14.9
51.9
3.9
13.0
17.6
78.6
3.2
13.4
18.6
86.0
3.1
16.2
12 July 2017
14

Company
Power Grid
Tata Power
Aggregate
Others
Arvind
Avenue
Supermarts
Bata India
Castrol India
Century Ply.
Coromandel Intl
Delta Corp
Dynamatic Tech
Eveready Inds.
Interglobe
Indo Count
Info Edge
Inox Leisure
Jain Irrigation
Just Dial
Kaveri Seed
Kitex Garm.
Manpasand
MCX
Monsanto
Navneet
Education
PI Inds.
Piramal Enterp.
SRF
S H Kelkar
Symphony
TTK Prestige
V-Guard
Wonderla
Reco
Buy
Sell
CMP
(INR)
212
83
TP % Upside
EPS (INR)
(INR) Downside FY17 FY18E FY19E
242
14
14.2
17.6
20.6
68
-18
5.2
6.4
6.7
P/E (x)
P/B (x)
FY17 FY18E FY17 FY18E
14.9 12.0
2.3
2.0
16.1 13.0
1.9
1.7
14.8 13.0
2.3
2.1
30.0
119.2
41.4
29.3
32.4
24.9
53.5
35.9
27.1
26.6
12.8
67.0
81.2
18.9
21.0
32.6
14.7
60.9
44.1
31.7
23.0
23.9
39.4
18.1
36.2
57.1
48.5
50.3
51.0
29.7
71.3
35.6
27.7
28.6
19.0
28.8
21.5
24.2
21.1
12.6
51.9
33.7
13.8
19.8
19.9
12.3
38.2
36.4
26.0
18.9
23.9
27.5
18.0
30.5
38.5
46.4
40.1
29.9
2.7
14.9
5.4
33.2
8.8
4.2
4.1
5.0
8.8
21.9
3.9
6.5
4.7
1.6
2.8
4.2
4.0
3.8
4.1
8.9
5.7
6.8
3.7
2.9
4.7
21.2
8.7
12.0
4.7
2.5
13.0
4.9
29.7
7.2
3.7
2.8
4.0
7.0
19.6
2.9
5.9
4.2
1.6
2.5
4.6
3.2
3.6
3.9
8.0
4.9
5.5
3.4
2.5
4.2
18.7
8.0
9.8
4.2
FY17
16.2
11.2
15.2
10.3
17.9
13.9
115.2
31.1
17.5
8.1
15.1
37.7
86.2
34.8
10.2
5.9
8.6
14.8
13.6
29.8
7.3
9.9
31.6
26.8
32.8
9.8
16.6
13.7
43.3
19.5
27.4
9.5
ROE (%)
FY18E
17.5
13.9
16.1
8.8
19.4
14.4
113.3
27.7
20.6
12.1
20.7
32.3
98.0
26.4
11.9
12.5
11.7
13.4
21.6
28.6
8.5
11.0
32.5
27.8
25.4
13.0
14.7
14.5
51.6
18.0
26.9
14.8
FY19E
17.8
12.1
16.8
11.8
23.3
15.8
106.1
29.6
21.6
11.5
24.3
31.6
136.2
23.5
12.3
16.2
14.8
13.7
26.0
27.6
13.5
14.6
34.5
28.2
23.8
16.4
16.7
15.6
54.5
20.7
28.8
17.5
Neutral
Neutral
Under Review
Buy
Neutral
Under Review
Buy
Buy
Buy
Neutral
Buy
Buy
Sell
Under Review
Neutral
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Sell
Neutral
Neutral
Buy
372
914
559
400
281
414
163
2,425
349
1,223
166
1,050
271
105
366
622
273
773
1,095
2,730
179
799
2,862
1,552
262
1,350
6,400
180
357
359
804
-
527
323
-
215
3,334
368
1,283
200
1,050
240
-
465
755
394
927
1,300
3,295
226
952
3,044
1,816
287
1,288
5,281
167
393
-3
-12
32
15
32
37
5
5
20
0
-11
27
21
44
20
19
21
27
19
6
17
10
-5
-17
-7
10
12.4
7.7
13.5
13.6
8.7
16.6
3.1
67.6
12.9
46.0
13.0
15.7
3.3
5.5
17.5
19.1
18.6
12.7
24.8
86.2
7.8
33.4
72.6
85.9
7.2
23.7
132.1
3.6
7.0
12.5
12.8
15.7
14.4
9.8
21.8
5.7
112.9
14.4
57.9
13.2
20.3
8.0
7.6
18.5
31.3
22.1
20.3
30.1
105.1
9.4
33.4
104.1
86.3
8.6
35.1
137.8
4.5
11.9
18.1
17.9
19.4
15.0
12.9
26.1
7.2
166.7
17.5
91.6
15.4
22.9
12.0
10.0
21.1
37.7
26.2
30.9
42.8
126.7
11.3
38.1
144.6
109.2
10.3
42.9
176.1
6.0
16.0
12 July 2017
15

MOSL Universe stock performance
Company
Automobiles
Amara Raja
Ashok Ley.
Bajaj Auto
Bharat Forge
Bosch
CEAT
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.
Cholaman.Inv.&Fn
Dewan Hsg.
GRUH Fin.
HDFC
Indiabulls Hsg
LIC Hsg Fin
Manappuram
M&M Fin.
Muthoot Fin
PFC
Repco Home
REC
STF
Shriram City Union
1 Day (%)
-1.7
0.0
2.3
-1.6
-0.3
-1.2
0.7
1.1
0.9
-2.0
0.5
1.6
1.7
0.2
2.3
-0.6
-0.4
-1.4
-2.0
-0.3
0.2
-0.6
-4.8
0.0
-1.3
-0.9
-0.1
-4.0
-0.1
-2.5
-3.2
-1.5
-2.8
-3.1
-2.5
-2.5
-0.7
-2.8
0.7
-1.8
-0.3
0.0
-2.8
0.2
1.4
-2.4
-4.2
-1.6
-1.2
-2.8
-1.8
-0.9
-3.8
-3.4
1M (%)
-1.1
11.2
-2.5
-6.3
-0.3
-2.4
-5.5
-1.1
-9.2
0.7
-0.8
-2.5
-2.2
0.0
-2.2
2.6
-1.2
-6.5
0.5
-2.5
0.8
-1.0
5.7
2.1
3.2
-2.7
-0.9
-1.8
1.7
-6.4
0.8
-1.2
-5.8
-3.3
-3.7
-1.7
-1.7
-3.9
3.0
2.7
8.0
0.3
13.1
-0.2
-6.2
-4.3
2.7
0.9
-0.8
-3.9
-2.1
-1.3
2.3
-7.5
12M (%)
0.1
12.7
5.4
48.3
2.1
117.7
43.9
209.0
30.0
15.9
-5.6
32.0
74.4
-5.7
89.3
-6.8
84.1
-14.4
85.5
40.2
27.6
29.0
38.7
21.0
26.0
33.7
32.2
0.2
27.0
54.7
-26.0
94.7
16.3
17.4
26.3
12.7
65.5
-3.6
18.2
101.3
64.0
25.0
51.3
38.5
24.6
0.0
56.7
21.7
2.8
91.3
-20.6
27.4
Company
Capital Goods
ABB
Bharat Elec.
BHEL
Blue Star
CG Cons. Elec.
CG Power & Inds Sol.
Cummins
GE T&D
Havells
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
Prabhat Dairy
United Brew
United Spirits
Healthcare
Alembic Phar
Alkem Lab
Ajanta Pharma
Aurobindo
Biocon
1 Day (%)
0.8
-0.9
1.7
-0.7
-1.4
-0.5
-0.8
-0.7
0.8
1.8
0.4
-1.0
-1.0
0.6
2.7
0.2
2.3
-0.8
0.3
1.5
-0.9
0.8
0.2
0.4
0.0
-1.2
-0.2
-1.1
-0.1
0.7
0.2
0.0
-0.6
-1.3
0.0
0.2
-0.7
-0.5
0.9
-0.9
0.5
-0.6
-0.3
-1.7
0.8
-0.8
-0.8
2.3
-0.7
0.1
3.5
-1.1
-2.6
-1.4
0.6
1M (%)
0.7
1.8
0.8
-4.3
-5.7
-2.2
-1.4
-3.4
-5.3
6.3
-2.1
-10.6
0.9
3.3
0.8
-4.3
0.0
-5.9
8.5
1.8
-4.4
7.3
13.2
-3.7
-5.0
-3.3
-0.7
-2.3
7.7
1.5
0.8
-2.1
0.6
0.3
8.0
-6.7
2.9
1.0
1.1
7.9
-4.6
1.5
1.9
1.4
2.4
1.6
-0.8
16.9
1.5
11.1
-3.3
-3.4
-4.5
15.0
-5.2
12M (%)
15.0
35.9
0.4
33.3
55.9
12.9
9.6
-9.3
33.8
91.5
11.5
-24.6
3.9
31.8
4.3
2.4
15.4
45.8
-1.9
2.4
61.2
116.9
37.9
73.7
34.5
15.0
19.6
-11.3
16.0
15.1
20.2
10.0
28.9
14.3
-3.4
-5.0
17.0
-10.4
19.3
32.5
24.5
19.8
4.8
22.3
-28.8
12.7
25.7
34.5
1.5
2.2
-10.4
31.8
-8.9
-11.0
31.0
12 July 2017
16

MOSL Universe stock performance
Company
Cadila
Cipla
Divis Lab
Dr Reddy’s
Fortis Health
Glenmark
Granules
GSK Pharma
IPCA Labs
Jubilant Life
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.
Hind. Media
HT Media
Jagran Prak.
PVR
Siti Net.
Sun TV
Zee Ent.
Metals