29 September 2017
Market snapshot
Equities - India
Close
Chg .%
Sensex
31,282
0.4
Nifty-50
9,769
0.3
Nifty-M 100
17,941
0.6
Equities-Global
Close
Chg .%
S&P 500
2,510
0.1
Nasdaq
6,453
0.0
FTSE 100
7,323
0.1
DAX
12,705
0.4
Hang Seng
10,875
-1.5
Nikkei 225
20,363
0.5
Commodities
Close
Chg .%
Brent (US$/Bbl)
57
-0.2
Gold ($/OZ)
1,285
-0.4
Cu (US$/MT)
6,474
1.3
Almn (US$/MT)
2,107
0.0
Currency
Close
Chg .%
USD/INR
65.5
-0.3
USD/EUR
1.2
0.3
USD/JPY
112.8
-0.1
YIELD (%)
Close
1MChg
10 Yrs G-Sec
6.6
0.0
10 Yrs AAA Corp
7.5
0.0
Flows (USD b)
28-Sep
MTD
FIIs
-0.8
-1.9
DIIs
0.8
3.7
Volumes (INRb)
28-Sep
MTD*
Cash
414
327
F&O
15,007
6,596
Note: YTD is calendar year, *Avg
YTD.%
17.5
19.3
25.0
YTD.%
12.1
19.9
2.5
10.7
15.7
6.5
YTD.%
3.5
10.8
17.2
23.7
YTD.%
-3.5
11.7
-3.7
YTDchg
0.1
0.0
YTD
4.9
10.3
YTD*
294
5,433
Today’s top research idea
PNB Housing: In the Big League; A perfect blend of growth with quality
v
PNBHF is a classic turnaround story, driven by a change in shareholding
(Destimoney Enterprises purchased 26% stake in PNBHF) and management.
v
Over FY10-15, the company invested in technology, re-jigged its
operations/processes, diversified its loan book and expanded in new
geographies. Thus, its loan book grew from INR40b to INR400b+ and PAT
increased from INR0.8b to INR5.2b over FY12-17.
v
PNBHF has effectively leveraged on a hub-and-spoke model. It has incurred
significant technology/branch infrastructure costs over past few years, and we
expect operating leverage benefits to accrue with strong growth (C/I ratio to
reduce by 600bp over FY17-20).
v
Asset quality has been one of the best among peers – GNPL ratio (2-year lag
basis) of 0.5% as of FY17. However, with a likely more seasoned loan book and
higher corporate exposure, we expect modest increase in GNPA and credit
costs. Yet, we expect RoA to remain largely stable at ~1.5%. With increasing
leverage over time, RoE should cross 19% by FY20.
v
We initiate coverage with a Buy and TP of INR1,675 (22x Sep 2019E EPS),
implying 3.7x Sep-2019E BVPS.
Research covered
Cos/Sector
PNB Housing
Technology
Titan Company
Automobile
Key Highlights
In the Big League; A perfect blend of growth with quality
Read-through from Accenture's FY18 guidance and 4Q commentary
Advancement and PMLA affect 2QFY18 sales
Healthy retails, discounts to drive 2W/PV wholesales
Piping hot news
Government sticks to $2.08 trillion borrowing plan for FY18
v
The government will raise Rs2.08 trillion through market borrowings in the
second half of 2017-18, sticking to its budget, but does not rule out the
possibility of selling more government bonds for additional spending.
Chart of the Day: PNB Housing: In the Big League; A perfect blend of growth with quality
GNPA as of FY17 (%) – Best-in-class asset quality
Source: MOSL, Company
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 textbox for the detailed news link
1
In stimulus shot, Govt nudges
PSUs to up capex by ₹25,000 cr
The Finance Ministry seems to
have found the additional funds to
boost the slowing economy by
prodding public sector units
(PSUs) to increase their capital
spending by ₹25,000 crore this
fiscal.…
2
Foreign investors on Thursday offloaded shares worth Rs 5,328 crore —
the largest in a single session — but the markets managed to end with
gains, thanks to support from domestic institutions. Provisional data from
stock exchanges showed foreign institutional investors (FIIs) extended
their selling streak for a ninth straight day…
Markets see largest one-day FII pull-out of Rs 5,300 crore
3
Despite SEBI’s desire to have more
trades in the cash segment, NSE
derivatives on Thursday registered
record volumes, hitting ₹15-lakh
crore. This was mainly on account
of index options, which also saw a
record turnover of ₹12.55-lakh
crore…
NSE F&O on ₹15-lakh-cr high
4
NSE aims for listing in second
half of 2018
The new chief executive of the
National Stock Exchange (NSE)
told Reuters he does not expect
the bourse's eagerly awaited
listing to take place until the
second half of 2018. The exchange
had originally planned to go public
this year, in what could be one of
the country's biggest ever initial
public offerings (IPOs)…
5
Telcos to invest $20 bn in next
2 years: Bharti Enterprise vice
chairman Akhil Gupta
Telecom operators in the country
are expected to invest $20 billion
(around 1.3 lakh crore) in the next
two years on expansion of
network and operations, Bharti
Enterprise Vice Chairman Akhil
Gupta said today…
6
Engie and Abraaj JV eyeing $1
billion wind power investment
in India
A joint venture (JV) of French
energy firm Engie SA and Dubai-
based private equity firm Abraaj
Group may invest around $1
billion to build a 1,000 megawatt
(MW) wind power platform in
India…
7
UDAN flights: Govt allows
airlines to use bigger planes,
eases rules on connecting
flights
The civil aviation ministry has
acceded to a request from some
airlines that will allow them to
potentially ply bigger aircraft for
UDAN flights and also be more
flexible in how they integrate such
routes into their overall
operations…
29 September 2017
2

PNB Housing Finance
BSE Sensex
31,160
S&P CNX
9,736
Initiating Coverage | Sector: Financials
CMP: INR1,412
In the Big League
TP: INR1,675 (+19%)
Buy
A perfect blend of growth with quality
n
Stock Info
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
M.Cap. (INR b)
M.Cap. (USD b)
12M Avg. Val (INR M)
Free float (%)
PNBHF IN
165.6
1715 / 789
-7/19/-
233.9
3.7
690
61.1
n
n
Financial Snapshot (INR b)
Y/E Mar
2018E 2019E 2020E
NII
14.8
19.9
26.4
PPP
14.4
19.3
25.9
PAT
8.0
10.8
14.4
EPS (INR)
48.1
65.1
87.2
BV/Sh. (INR)
367.6 419.1 488.1
RoAA (%)
1.5
1.5
1.5
RoE (%)
13.8
16.6
19.2
Payout (%)
20.9
20.9
20.9
P/E (x)
29.3
21.7
16.2
P/BV (x)
3.8
3.4
2.9
Shareholding pattern (%)
As On
Jun-17 Mar-17 Dec-16
Promoter
38.9
39.1
39.1
DII
4.5
4.1
4.0
FII
14.5
15.4
15.9
Others
42.1
41.5
41.0
FII Includes depository receipts
n
PNB Housing Finance (PNBHF) is a classic turnaround story. While the company
was incorporated in 1988 as a wholly-owned subsidiary of Punjab National Bank,
the turnaround started two decades later in FY10. This was effected by a change in
shareholding (Destimoney Enterprises, a subsidiary of the Carlyle Group,
purchased 26% stake in PNBHF) as well as a change in management.
Over FY10-15, the company invested in technology, re-jigged its operations and
processes, diversified its loan book, and expanded in new geographies.
Consequently, over FY12-17, PNBHF’s loan book grew from INR40b to INR400b+,
and PAT increased from INR0.8b to INR5.2b.
PNBHF has effectively leveraged on a unique hub-and-spoke model, where
customer acquisition happens at the branch level while underwriting takes place
at a hub. The company has incurred significant technology and branch
infrastructure costs over the past few years and we expect operating leverage
benefits to accrue with strong growth, resulting in a 600bp reduction in the C/I
ratio to 22% over FY17-20.
PNBHF’s asset quality has been one of the best among peers, with a GNPL ratio (2-
year lag basis) of 0.5% as of FY17. However, as the loan book gets more seasoned
and on account of increasing corporate exposure, we expect a modest increase in
GNPA and credit costs. Yet, we expect RoA to remain largely stable at ~1.5%. With
increasing leverage over time, RoE should cross 19% by FY20. We initiate coverage
on PNBHF with a Buy rating and a target price of INR1,675 (22x Sep 2019E EPS),
implying 3.7x Sep2019E BVPS.
Growth potential unlocked with unique business model
Commencing a turnaround in 2011, PNBHF registered strong loan growth across
segments with a loan book CAGR of 60% over FY12-17, driven by increased
market penetration and expansion into new territories. Consequently, its market
share increased from ~0.5% to 2%+, making it the fifth largest HFC in India. With
a hub-and-spoke model and a central processing center (CPC), the company has
ensured that branches focus only on loan sourcing, hubs focus solely on
underwriting and the CPC focuses only on file processing. Unlike other HFCs
which are now focusing more on the affordable housing segment, PNBHF caters
largely to the middle and upper-middle class segment. Its average ticket size of
INR3.2m in home loans is ~30% higher than that of HDFC and IHFL. The company
now has 66 branches in 40 cities, and aspires to achieve at least 8-10% market
share (among HFCs) in every city where it operates. We believe the company has
built the foundation to drive 37% AUM CAGR over FY17-20.
PNB Housing Finance
In the Big League
Piran Engineer
+
91 22 3980 4393
Piran.Engineer@motilaloswal.com
Please click here for Video Link
Loan mix reached targeted level of 60:40 (Retail and Non retail)
PNBHF has built capabilities in appraising LAP, builder loans and other non-core
loans. With a strong & well-qualified team (60-65% of its underwriters are
Chartered Accountants), the company has developed capabilities to underwrite
29 September 2017
3

Stock Performance (1-year)
skillfully based on cash-flow analysis. The non-housing loan book now accounts for
41% of the total loan book, as compared to 25% in FY13. Shift in the loan mix has
helped the company to a) be competitive in the retail segment without impact on
overall company margins b) absorb high opex without denting profitability. Loan mix
has reached targeted level and upside to ROA will be realized by operating leverage
rather than margins.
Asset quality pristine; Factor in high credit cost conservatively
GNPL/NNPL ratio stood at 0.22%/0.15% as of end-FY17, the lowest among peers.
Even on a two-year lag basis, the GNPL ratio stands at ~0.5%. In the construction
finance loan book, the NPA is nil. In fact, 88% of projects funded have witnessed
sales velocity in excess of the company’s assumptions. While the company has
stringent underwriting processes in place, we believe that the loan book is still
largely unseasoned, and thus, the GNPL ratio could increase. PNBHF has a large
corporate loan book (~16% of total loans) and LAP book (~16%). Additionally, nearly
40% of the loan book is from north India, where the real estate market has been
subdued for the past 2-3 years. While the company maintains adequate collateral
cover on its loans (LAP LTV capped at 70% at origination; construction finance loan
cover of 2x), we believe GNPLs should rise to 40-50bp over the next 2-3 years.
Consequently, credit costs (including standard asset provisions) are expected to rise
from 30bp in FY17 to 40-45bp over the medium term. However, the company has
already built a contingency provision buffer of INR395m.
Growth, asset quality & improving RoE justify valuation premium
We believe PNBHF is at an inflection point. Increasing geographical spread and new
branch openings (110 branches in FY20E v/s 66 in FY17) are expected to result in the
loan book growing to ~INR1t by FY20 (37% CAGR). With the pace of investments
slowing down, coupled with operating leverage benefits kicking in, the expense ratio
is set to decline meaningfully. Credit costs, however, are expected to inch up
marginally on account of portfolio seasoning. All these factors put together are
expected to drive 40% PAT CAGR over FY17-20E, in our view. While RoA is likely to
remain largely stable at ~1.5%, RoE should improve from 14% in FY17 to 19% in FY20
on account of higher leverage. While we expect the company to raise capital in FY19
or FY20, we have not built in any capital raise assumptions in our numbers. We use
RI model with Rf of 7%, CoE of 13.5% and terminal growth rate of 5% to arrive at a
target price of INR1,675 (22x Sep 2019E EPS), implying 3.7x Sep2019E BVPS. We
initiate coverage with a
Buy
rating.
Exhibit 1: Valuation comparison
HDFC
LICHF
IHFL
DHFL
PNBHF
Can Fin
GRUH
REPCO
AUM
(INR b)
3,550
1,471
945
882
468
138
137
90
Price
(INR)
1,719
607
1,223
526
1,412
2,597
520
601
Market Cap
(INR b)
2,750
307
521
167
234
69
191
37
AUM CAGR
(FY17-20E) %
16
14
29
21
37
NA
22
19
PAT CAGR
(FY17-20E) %
14
14
25
24
40
NA
23
17
RoA (%)
RoE (%)
P/B
P/E
FY18E FY19E FY18E FY19E FY18E FY19E FY18E FY19E
1.9
1.9
19.3 18.4
4.3
3.1
23.8 18.7
1.4
1.5
18.2 18.5
2.5
2.1
14.6 12.4
3.3
3.2
28.2 31.3
3.8
3.3
14.2 11.3
1.2
1.3
14.1 15.6
1.9
1.6
13.9 11.2
1.5
1.5
13.8 16.6
3.8
3.4
29.3 21.7
2.0
2.0
23.2 22.6
4.6
3.7
23.1 18.1
2.4
2.4
33.0 32.8 15.7 12.9 52.3 43.1
2.2
2.2
17.5 17.0
2.8
2.4
17.4 15.3
Source: Company, MOSL; Note: Can Fin Homes numbers are BBG estimates
29 September 2017
4

Sector Update | 29 September 2017
Technology
Read-through from Accenture's FY18 guidance and 4Q
commentary
ACN reported its 4QFY17 numbers and shared its outlook for FY18. Akin to the problems
faced by Indian IT – sluggish US, particularly for BFS and Healthcare were the themes.
Outlook for FY18 did not suggest any acceleration expectations. Appending the key
highlights below:
5% Organic CC growth in FY17; and this isn’t accelerating in FY18
n
n
n
ACN reported 7% CC revenue growth in FY17 to USD34.9b. If we exclude
acquisitions, the revenue growth was 5% YoY CC. This was dragged by the North
America (4% YoY), while Europe (8% YoY CC) and Growth Markets (12% YoY CC)
growth was sanguine. ‘The New’ – Digital, Cloud and Security, which now
constitutes to ~50% of revenue grew by 30% YoY CC.
ACN guided for 5-8% YoY CC growth for FY18. However, this includes 2.5-3%
contribution from acquisitions. Excluding this, on an organic basis, growth would
turn out to be 2-5% YoY CC. It expects to hit the top end of this band, implying
no significant changes in market outlook.
While ACN’s performance in newer areas and capital allocation strategy
continue to exhibit superiority compared to Indian vendors, overall commentary
failed to help draw out favorable cues on the Indian front.
Outlook on Verticals: Not bullish enough on BFSI and Healthcare
n
n
n
Financial Services saw its best growth for the year (9% YoY) in 4QFY17, the key
drivers were Banking and Capital Markets. Growth was driven by the Europe and
Growth Markets; US continued to lag relatively.
Health and Public Services grew by 4% YoY. While there was some improvement
in North America, Healthcare continues to be impacted by US legislation
uncertainty
Communications | Media | Technology is seeing traction, but led by Technology
(strong double digit growth) whereas Communications and Media are low single
digits.
Energy segment continues to struggles, and Resources stability is a function of
Chemicals and Natural Resources sub-segments.
Optimistic on pick-up in the US
n
North America (47% of revenue) contributed to only 28% of the incremental
growth in FY17. While this was lower than anticipated, ACN expects it to pick-up
in FY18 as reforms increase business confidence. However, these expectations
seem to be pinned on to hope and optimism rather than visible signs of an
uptick.
29 September 2017
5

Aggressive rotation to newer services
n
n
n
ACN has been aggressively rotating their business towards ‘The New’. The
contribution of these services to total revenue has increased from 30% in FY15
to 40% in FY16 and 50% now. This has been enabled by aggressive inorganic
foray. Over the last three years, it has acquired 70 companies, spending a
cumulative USD3.4b. In the last year alone, it acquired 30 companies, spending a
total of USD1.7b.
The split in The New for ACN is: 29% from Digital, 19% from Cloud and 3% from
Security. Platforms now constitute to ~25% of revenue; and ACN is a leading
partner with most companies (established and emerging) including Oracle, SAP,
Salesforce, Microsoft, Workday, AWS and Google.
In the next year, it is expected to spend USD1.1-1.4b on acquisitions. It has the
ability to go above this estimate if required, and if posed with favorable target
companies.
Acquisitions no constraint to strong return of cash to shareholders
n
n
Along with being acquisitive, ACN has been returning excess cash to
shareholders through a buyback and dividends. In FY17, it repurchased 657m
shares amounting to USD2.6b. In addition to this, it paid out a divided of
USD1.6b, a 10% increase over the previous year.
While ACN trades at 21x 1-year forward consensus PE, the cash returns to
shareholders is a yield of almost 5%, which quells any arguments on the side of
expensive multiples
29 September 2017
6

Titan Company
BSE SENSEX
31,282
S&P CNX
9,769
28 September 2017
Update
| Sector:
Retail
CMP: INR576
TP: INR590 (+2%)
Advancement and PMLA affect 2QFY18 sales
Neutral
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 (%)
TTAN IN
887.8
654 / 296
-5/19/30
511.0
7.8
863
47.0
Titan (TTAN) has released its pre-quarterly update for 2QFY18. Key highlights:
n
TTAN witnessed some slowdown in the first half of July due to the advancement of
sales in the second half of June in the run up to GST rollout (on anticipation of higher
rates). Despite the slowdown, the company’s Jewellery business continued to gain
market share.
n
Watches and Eyewear businesses saw good growth during the quarter.
n
We maintain our Neutral rating with a revised target price of INR590 (43x Sep-2019E
EPS, in line with three-year average multiple).
Jewelry: Continues expanding market share
n
Financials Snapshot (INR b)
2017 2018E
Y/E Mar
Net Sales
129.8 151.4
EBITDA
11.6
13.6
PAT
7.0
9.4
EPS (INR)
9.0
10.6
Gr. (%)
18.5
17.6
BV/Sh (INR)
47.7
52.2
RoE (%)
20.6
21.3
RoCE (%)
21.1
21.9
P/E (x)
63.7
54.2
P/BV (x)
12.1
11.0
2019E
178.1
16.2
11.1
12.6
18.2
60.8
22.2
22.7
45.9
9.5
n
n
n
Shareholding pattern (%)
As On
Jun-17 Mar-17 Jun-16
Promoter
53.1
53.1
53.1
DII
5.4
5.4
4.7
FII
21.6
21.1
21.7
Others
19.9
20.4
20.5
FII Includes depository receipts
Stock Performance (1-year)
Titan Company
Sensex - Rebased
670
570
470
370
270
n
n
Jewellery sales in 2QFY18 were impacted by the advancement of sales in June
to the extent of INR2.5-3b, subdued response to diamond-studded activation
(which went on from end-July to early-September), and the inclusion of gold
under the Prevention of Money Laundering Act (PMLA) from August.
Under the Prevention of Money Laundering Act, jewelers are obligated to
collect KYC documents for all sales above INR50,000 and also file certain
returns. The company believes that the existing rules under this act would
need amendment for the jewellery sector as they are designed for the banking
and financial services sectors. The industry is also making representation to
relax the limit of INR50,000.
Despite the slowdown, the segment continued gaining market share.
The quarter saw two new collections, which were associated with: 1) movie
‘Padmavati’ and 2) ‘Jewels of Royalty’ – wedding and high-value-added
diamond-studded jewelry.
Of the 29 Gold Plus stores, 18 have been closed till date.
The company added two
Tanishq
stores (7,500 sq. ft. of retail space) post
1QFY18. In FY18 till date, TTAN has added four new
Tanishq
stores, with
18,000 sq. ft. of retail space.
Watches witnessed good growth in 2QFY18, led by exceptional sales via the
online channel and restocking by dealers. This was despite a below-
expectation ‘activation’ period and slowdown in the exports market.
Titan launched
Titan Regalia Sovereign
and
Raga Espana
in the quarter.
Fastrack launched its
Lightweight
collection in 2QFY18.
The division added three
World of Titan
stores, five
Fastrack,
and eight
Helios
stores (8,500 sq. ft. of retail space) in 2QFY18.
Titan Eye Plus
retail stores saw good growth in the quarter.
We note that the GST rate for the division had come higher at 28%. The
division has still not taken any price hike and has also compensated the
channel partners for the higher GST rate. This will thus result in muted net
sales growth for the quarter.
7
Watches: Decent growth led by online channel and restocking
n
n
n
Eyewear: Muted net sales led by GST-led compensation
n
n
29 September 2017

n
n
The division launched Fastrack frames targeting the youth in 2QFY18.
It added 10 Titan Eye Plus stores (5,000 sq. ft. of retail space) in 2QFY18.
Valuation and view
Valuations at 45.9x FY19E do not leave much upside for a business growing at 18%
CAGR and with~20% RoEs. Watches and Eyewear segments continue to be a bit of
drag on overall earnings growth. We maintain our
Neutral
rating with a revised
target price of INR590 (valued at 43x Sep-2019E EPS, in line with three-year average
multiple).
Valuation matrix
Company
Consumer
Asian Paints
Britannia Inds.
Colgate-Palm.
Dabur India
Emami
Godrej Cons.
GlaxoSmith C H L
Hind. Unilever
ITC
Jyothy Lab.
Marico
Nestle India
P & G Hygiene
Page Industries
Parag Milk
Pidilite Inds.
United Brew.
United Spirits
Retail
Jubilant Food.
Titan Company
Reco
CMP
(INR)
Neutral
Buy
Buy
Neutral
Buy
Neutral
Sell
Buy
Neutral
Neutral
Neutral
Neutral
Neutral
Buy
Neutral
Neutral
Buy
Neutral
Sell
Neutral
Target
Price
(INR)
Mkt Cap
Upside
(INR B) (USD B)
(%)
6
7
20
1
19
10
-9
16
7
-1
14
-14
5
7
5
4
16
5
-38
3
1,114
515
289
538
248
618
207
2,612
3,141
69
405
685
271
207
20
399
217
350
89
521
17.0
7.9
4.4
8.2
3.8
9.4
3.2
39.9
47.9
1.1
6.2
10.4
4.1
3.2
0.3
6.1
3.3
5.3
1.4
8.0
EPS Growth YoY (%)
FY17
FY18E
FY19E FY17
19.5
22.6
21.7
18.3
23.1
14.6
15.2
19.2
11.4
13.2
20.9
16.2
16.1
35.2
37.0
14.0
41.5
49.3
40.0
18.2
53.7
59.0
50.5
42.9
41.3
47.7
31.5
61.3
31.1
35.5
49.5
60.6
62.9
77.0
64.5
46.5
97.7
89.9
137.2
63.7
P/E (x)
FY18E
50.9
50.9
43.9
40.2
40.7
41.9
31.1
52.5
28.2
40.6
45.6
62.2
55.2
62.4
25.5
43.1
85.8
69.7
92.7
54.2
FY19E
42.6
41.5
36.0
34.0
33.1
36.5
27.0
44.0
25.3
35.9
37.7
53.5
47.5
46.2
18.6
37.8
60.6
46.7
66.2
45.9
RoE
(%)
FY17
28.5
36.9
50.4
28.4
35.8
24.6
22.2
66.5
23.5
21.1
36.7
39.0
39.3
40.0
6.0
28.2
10.2
21.3
8.2
20.6
Div.
(%)
FY17
0.8
0.0
0.9
0.8
0.8
0.7
1.1
1.4
2.1
1.5
1.0
0.9
3.9
0.5
0.0
0.6
0.1
0.0
0.2
0.5
1,129 1,200
4,345 4,660
1,073 1,285
311
315
1,096 1,310
902
995
4,922 4,500
1,204 1,400
261
280
399
395
311
355
7,155 6,160
8,361 8,800
18,387 19,600
233
245
779
810
848
980
2,404 2,525
1,373
576
850
590
8.7
5.6
7.3
15.8
-5.7
15.2
1.9
6.7
4.5
1.4
12.4 14.0
0.9
1.3
1.9
16.9
9.4
10.4
175.7 -12.6
12.1
8.5
-1.6
-2.5
2.3
14.0
15.0 23.4
-46.4 152.6
6.7
7.9
-23.0 13.9
87.1 29.1
-32.1
18.5
48.0
17.6
Source: Company, MOSL
29 September 2017
8

Sector Update | 28 September 2017
Automobiles
Sep-17 Sales Estimates
Healthy retails, discounts to drive 2W/PV wholesales
CV dispatches expected to be healthy too
"As a trend, we are seeing
huge spike in our customer
walk-ins and overall retails
in every festival, be it
Ganesh Chaturthi, Onam or
even the beginning of
Navratri."
Our channel checks indicate healthy retail growth (10-15%) in the 2W and PV segments,
led by festive demand and positive rural sentiment, which should drive wholesales for
September. CV segment growth is expected to be largely led by LCVs and ICVs. Also, there
have been no indications of moderation in discounts in the CV segment.
Our interaction with mass market 2W channel partners indicates healthy growth, led by
strong retail demand from key states. Good monsoon and an increase in crop realizations
have lifted sentiment in rural/semi-urban areas. Hero MotoCorp (HMCL) is witnessing
~10% retail growth in key states, while TVS Motor (TVSL) and HMSI are outperforming the
industry, with growth in excess of 15%. However, Bajaj Auto’s (BJAUT) retail volume
growth for key markets is at 7-9%, lagging other OEMs. On the PV front, MSIL is witnessing
retail growth in excess of 15%, while Mahindra & Mahindra’s (MM) volumes are increasing
at ~8-10%.
Key highlights:
n
MSIL’s domestic dispatches growth is expected at 19% YoY. Demand for
Baleno,
Brezza
and the new
Dzire
continues to be robust, as these models enjoy a healthy
waiting period of 2-3 months. Within its domestic portfolio,
CIAZ’s
sales are expected
to be weak (-16% YoY) due to the GST-led impact on hybrid cars, while growth in the
compact segment (+40% YoY) is likely to be driven by the new
Dzire.
n
Tata Motors’ (TTMT) PV segment is expected to grow 25% YoY, led by inventory build-
up of its first compact SUV
Nexon.
CV sales are expected to grow 11.5% YoY, led by a
15% increase in LCV sales, while M&HCV sales are expected to grow 7% YoY.
n
MM’s volumes are expected to increase by 3.4% YoY, with tractors volumes growing
by 4.7% YoY and UV volumes by 6.6% YoY. However, 3W sales should decline 28% YoY.
n
In the 2W segment, TVSL’s sales are expected to increase 15%, while BJAUT and
HMCL’s sales are expected to grow by 2% and 4%, respectively.
n
We expect RE volumes to grow at a healthy 21% YoY to 70k units.
n
CV manufacturers are expected exhibit an improvement in wholesales, led by strong
growth in LCV sales. We expect AL’s wholesales to grow 31.5% YoY (LCVs: +24.4% YoY;
HCVs +33.9% YoY). TTMT and VECV’s CV sales are expected to grow 11.5% and 10.8%,
respectively.
n
We prefer 4Ws over 2Ws and CVs due to stronger volume growth and a stable
competitive environment for the segment. We expect 2W volumes to benefit from a
rural recovery in the near term, but also note that the segment faces intense
competition due to changing customer preferences. For CVs, we expect a gradual
volume recovery from 2HFY18.
n
Our top picks are TTMT, MSIL and Amara Raja (AMRJ). We also consider MM as the
best bet on a rural market recovery.
YS Guleria,
Sr VP, Sales and
Marketing
HMSI
29 September 2017
9

In conversation
1. M&M Financial : Rural sector should see different picture for
rural based NBFCs; Ramesh Iyer, VC & MD
n
n
n
n
As far as final end consumer is concerned, more or less the vehicle prices have
remained stable despite goods and services tax (GST).
GST has not impacted the end consumer as much as the working cycle of dealer
would have been impacted. Therefore, dealer will look for more financing
through lenders.
Expect yields to come in from November onwards in the rural economy.
Rural sector should see different picture for rural based NBFCs.
2. IRB Infra : IRB invit’s stake sale in arm to be value accretive;
Anil Yadav, Group CFO
n
n
n
Company had got an approval for transfer of one of the assets to the InvIT. Total
enterprise value of that asset roughly Rs 1570 crore, which will be entirely
funded through debt.
Through this a debt of Rs 950 crore would get repaid and company would get Rs
550 crore in this transaction. Post this transaction the debt-equity ratio of
company on consolidated basis would come down to 1.6-1.7:1, which was 2.1:1.
Would add close to Rs 90 crore of net profit on the books in the same quarter.
Transaction value accretive to the InvIT as well.
3. Whirlpool : Expect exciting festive season; to launch new
products every 2-3 months; Sunil D’souza, MD
n
n
n
Post GST there was rapid discounting due to inventory clearance and post July
dealers started re-stocking and the momentum continues. So, expect an exciting
festive season ahead.
Company has launched a new range of premium refrigerators and will launch
new products every 2-3 months.
Company will strive for market share and double-digit growth in a growing
market and are on track with targets.
29 September 2017
10

From the think tank
1. How deep is India’s economic mess?
n
The heads of two companies that are considered yardsticks of the broader
economy have recently spoken out about the problems they are facing. Hindustan
Unilever chief executive Sanjiv Mehta said in a presentation to investors that rural
demand for its products has been weak because of the lingering effects of
demonetization as well as the farm crisis. Larsen & Toubro group executive
chairman Anil Naik said that private sector companies are not in a position to
launch new projects because of the excess debt they have on their balance
sheets. Meanwhile, from within the ruling Bharatiya Janata Party, Subramanian
Swamy has warned that the Indian economy could be heading for a crash, while
Yashwant Sinha has written a scathing article on Union finance minister Arun
Jaitley. The narrative on the Indian economy has definitely taken on a darker hue
ever since it was revealed that economic growth had unexpectedly slumped to
5.7% in the first quarter of the current fiscal year, the slowest pace of expansion in
three years. The biggest analytical challenge right now—for policymakers and
investors—is to separate the transient from the structural.
2. The way forward for the electric vehicle push
n
The time for a move away from fossil fuels has come. Global weather disasters
and the pollution levels of major Indian cities are clear indications that the costs
of pollution are beginning to spiral out of control for citizens and economies
alike. The climate change disruption holds both opportunities and challenges.
Facing the need for a drastically reduced CO2 footprint per capita head on will
allow forward-thinking nations to develop new technologies and to establish
leading positions in future energy-efficient products and services. Nations that
do not live up to their responsibility for global climate protection will not only
harm us all but be ultimately left behind from a technology and business
perspective. India’s announcement and intention to move from fossil fuel-driven
vehicles to electric vehicles is positive. Rather than being a late follower in
technology development, the government would like to position India’s industry
at the forefront of the global quest for clean mobility. This is to be
wholeheartedly supported.
3. Debunking myths about India’s multilateralism
n
As it happens every September, the international community’s attention focuses
on New York for the annual UN General Assembly. The Indian delegation is
sizeable—not least in its agenda. Besides meetings with leaders from 20 states,
Indian officials are participating in discussions on UN reform, counterterrorism,
climate change, human rights and peacekeeping. The annual event also gives us
an opportunity to audit and clear up some longstanding myths that cloud our
thinking and judgement on India’s multilateral diplomacy. These myths
propagate perceptions that have outlived their utility. Problematically, such
views prevent us from better understanding what considerations influence
India’s multilateral diplomacy, how her behaviour, influenced by strategic
29 September 2017
11

considerations, has changed over the years, and why it is important to view
India’s multilateral positions in the context of the country’s economic trajectory.
4. Battling black money is a dicey business
n
Narendra Modi is walking a tightrope with his fight against black money. The
Prime Minister has unleashed a wave of bold, and sometimes brazen, initiatives
to root out income that has been illegally obtained or not declared to the
taxman. But that has chilled the economy. Managing the short-term fallout is
key to smoothing the path to his re-election. Soon after the BJP took over in
2014, businesses noted it was harder to win special favours from New Delhi. A
new bankruptcy law has also started to shift the balance of power from tycoons
to lenders. These are significant changes, given a series of crony capitalism
scandals turned voters against the previous government. Over the past year,
New Delhi’s focus has shifted from elite corruption to dealing with the next layer
down: ordinary taxpayers. The country has more citizens who go overseas on
holiday than taxpayers who declare income of more than ₹1 million Modi
grumbled in a recent address to accountants, urging them to take less pride in
helping clients dodge their dues.
International
5. Challenges faced by advanced and emerging economies
n
n
The World Economic Forum’s Global Competitiveness Report 2017 comes in the
backdrop of dynamic global developments that threaten the liberal political and
economic order of international relations and world trade, built up assiduously
in the post-war era. Calling for more innovative solutions to tackle the
bottlenecks to inclusive growth, the report puts into perspective the challenges
faced by the advanced and emerging economies alike. Although inequality
measured across nation-states—in other words, global inequality—has
decreased, there is a recent rise in inequality within countries.
Disruptive technology has contributed to labour market polarization, implying a
‘hollowing out’ of middle-level skills and growth in low- and high-skilled jobs.
The Global Competitiveness Index monitors the performance of 137 countries
based on a set of 12 pillars, namely institutions, infrastructure, macroeconomic
environment, health and primary education, higher education and training,
goods market efficiency, labour market efficiency, financial market
development, technological readiness, market size, business application and
innovation.
29 September 2017
12

Click excel icon
for detailed
valuation guide
Rs
Valuation snapshot
P/E (x)
P/B (x)
FY17 FY18E FY17 FY18E
25.3
25.7
22.9
45.9
43.9
18.1
49.2
41.7
31.9
25.0
22.1
22.7
43.3
31.8
20.2
54.8
28.2
33.3
25.6
30.1
23.1
31.6
18.0
24.1
35.0
NM
37.4
42.5
12.8
24.0
29.4
23.2
NM
16.8
34.3
8.8
NM
21.1
849.9
15.9
92.5
54.8
44.9
29.3
23.5
18.1
62.3
37.1
25.1
22.6
22.1
32.9
38.0
18.0
35.4
33.5
17.2
22.1
19.8
18.0
23.5
28.0
17.9
44.7
24.3
23.4
21.5
87.8
20.7
26.3
18.5
20.3
27.1
19.0
30.9
28.0
9.8
19.0
23.7
14.6
NM
10.5
8.2
7.5
7.0
22.5
17.3
14.2
16.4
38.7
29.6
21.7
19.3
14.2
51.0
32.9
4.7
5.6
5.2
6.8
7.2
2.8
15.4
8.0
3.2
3.5
7.4
2.9
2.7
6.6
2.3
12.7
4.8
2.3
2.6
2.3
2.2
5.3
2.0
1.3
5.1
0.7
4.8
4.5
1.1
3.7
3.4
0.9
0.6
0.7
0.5
0.9
0.3
0.7
1.2
0.4
0.8
10.5
5.3
3.1
3.9
2.1
18.7
6.9
4.1
4.9
4.7
5.9
6.5
2.5
11.4
6.6
2.8
3.1
6.4
2.6
2.4
5.8
2.1
10.5
4.2
2.1
2.2
2.2
1.8
4.6
1.9
1.2
4.4
0.7
4.3
3.1
1.0
3.2
3.0
0.9
0.6
0.6
0.5
0.8
0.3
0.7
1.1
0.4
0.8
8.5
4.3
2.7
3.3
1.9
15.3
6.2
ROE (%)
FY17 FY18E FY19E
20.3
23.1
25.3
16.2
15.8
16.9
37.1
20.8
10.6
13.9
35.7
14.2
6.4
20.3
9.8
25.6
17.1
6.9
10.8
9.5
9.9
18.3
10.2
5.6
15.4
-27.0
13.8
12.3
9.5
18.9
11.5
4.0
-6.7
4.2
1.4
10.1
-8.4
3.6
-0.2
2.7
0.9
21.7
15.1
12.0
18.0
14.4
32.5
18.9
17.3
23.2
22.2
19.2
18.0
14.8
37.0
21.6
17.3
14.1
34.6
13.9
10.8
20.1
12.3
25.7
17.4
9.3
11.4
2.6
10.0
18.8
8.9
6.3
17.3
3.5
15.0
13.6
10.8
18.3
12.5
6.1
-5.2
6.2
5.8
10.9
4.6
3.2
7.0
3.0
4.6
24.3
16.1
13.3
18.6
14.1
33.0
19.3
19.9
27.0
24.0
22.8
20.7
17.3
35.4
23.3
18.3
15.0
31.5
14.9
11.5
22.8
26.6
33.6
22.3
14.7
11.8
8.7
10.5
19.6
9.5
6.9
18.5
7.2
16.3
13.9
12.7
19.5
14.2
12.4
3.0
9.1
7.3
11.2
5.4
5.9
11.4
6.1
8.3
25.9
28.0
15.6
19.0
15.6
32.8
18.4
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.
Capital First
Cholaman.Inv.&F
n
Dewan Hsg.
GRUH Fin.
HDFC
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
39
1
8
13
6
20
19
8
15
32
2
32
12
35
-5
28.0
4.6
132.3
13.1
473.1
93.3
612.7
23.5
20.0
8.1
169.1
54.3
5.4
248.6
19.8
11.7
28.2
37.9
5.2
7.0
137.2 163.6
18.2
25.3
547.2 705.7
94.2
126.8
852.9 1,092.8
29.3
37.9
37.1
45.8
9.2
11.0
189.3 199.1
68.5
82.4
9.9
11.8
281.7 374.5
22.4
59.8
14.4
23.7
710
986
117
118
3,034 3,281
600
677
20,789 21,994
1,693 2,029
30,168 35,854
980
1,059
638
732
203
269
3,745 3,818
1,235 1,634
232
-
7,897 8,819
401
542
644
612
Neutral
Neutral
Buy
Buy
Buy
Buy
Neutral
Under
Review
Neutral
Buy
Under
Review
Buy
Buy
512
179
152
111
1,795
276
56
1,679
73
1,004
505
28
351
545
192
201
139
2,000
366
62
-
91
1,153
-
34
427
6
7
32
25
11
33
10
15.4
7.0
5.0
4.8
56.8
15.3
2.3
47.9
21.8
8.4
1.7
5.4
68.2
14.9
2.8
61.9
3.8
32.4
18.0
2.9
18.5
38.1
10.4
6.1
6.8
82.1
17.0
3.2
76.8
8.2
41.0
23.7
3.7
22.9
25
15
-31.3
26.8
11.9
22
22
2.2
14.6
Buy
Neutral
Neutral
Neutral
Buy
Neutral
Buy
Buy
Neutral
139
139
316
53
258
120
131
253
129
198
149
360
49
382
150
184
341
140
43
8
14
-6
48
25
40
35
9
6.0
-14.8
18.8
1.5
29.3
-31.6
6.2
0.3
8.1
9.5
-11.2
30.1
6.4
34.4
17.1
5.8
14.6
9.0
20.8
6.6
47.0
8.6
38.3
21.4
11.0
26.8
19.1
Buy
Neutral
Buy
Buy
Buy
Neutral
Buy
1,841
942
721
1,081
535
507
1,740
1,800
820
925
1,400
630
450
1,900
-2
-13
28
30
18
-11
9
33.6
21.0
24.6
46.0
29.6
8.1
46.8
47.6
31.8
33.3
56.0
37.7
9.9
52.9
62.9
68.7
44.3
67.3
47.1
12.1
59.0
29 September 2017
13

Company
Reco
Indiabulls Hsg
Buy
L&T Fin Holdings Buy
LIC Hsg Fin
Neutral
Manappuram
Not Rated
M&M Fin.
Buy
Muthoot Fin
Buy
PNB Housing
Buy
Repco Home
Buy
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. Neutral
Cummins
Buy
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
Neutral
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
CMP
(INR)
1,209
190
624
95
401
459
1,462
616
2,000
1,053
TP
% Upside
(INR) Downside
1,350
12
200
5
708
13
-
459
15
550
20
1,675
15
800
30
2,800
1,330
40
26
FY17
69.0
5.2
38.2
8.6
7.1
29.5
31.6
29.1
84.3
55.6
EPS (INR)
FY18E FY19E
86.3
108.4
7.3
10.6
41.6
48.9
10.8
12.5
13.9
17.8
38.2
44.2
48.1
65.1
34.5
39.3
121.7
80.0
164.1
102.4
P/E (x)
P/B (x)
FY17 FY18E FY17 FY18E
17.5
14.0
4.2
3.7
36.4
26.0
4.3
3.7
16.3
15.0
2.9
2.5
11.0
8.9
2.4
2.2
56.5
28.9
3.6
3.3
15.5
12.0
2.8
2.4
46.2
30.4
4.4
4.0
21.1
17.8
3.4
2.9
23.7
18.9
30.1
71.5
26.0
61.9
58.3
44.3
18.7
33.8
67.2
49.4
25.8
26.8
14.6
66.6
43.5
24.3
29.3
19.9
32.4
34.2
54.9
45.7
29.7
65.6
16.6
30.3
28.2
55.5
24.9
NM
375.7
47.5
40.2
35.4
53.7
59.0
50.5
42.9
41.3
47.7
31.5
16.4
13.2
23.9
62.9
24.4
30.5
42.9
41.2
37.9
32.3
41.4
43.2
23.4
24.4
11.4
52.2
37.1
17.5
30.1
17.1
29.8
30.0
38.6
33.1
21.3
37.0
15.8
21.3
24.0
39.7
24.8
34.3
29.4
39.7
42.2
30.3
50.9
50.9
43.9
40.2
40.7
41.9
31.1
2.6
2.1
4.8
9.1
5.4
0.9
9.5
24.1
1.1
6.6
9.5
9.0
5.0
3.2
1.5
6.2
8.0
-1.4
4.0
3.3
5.0
3.8
2.8
3.6
2.0
4.6
1.8
1.0
3.8
3.2
4.3
3.1
5.4
8.3
4.4
3.4
14.2
19.3
22.9
11.3
14.2
11.6
6.6
2.3
1.9
4.3
7.9
4.2
0.9
8.9
17.8
1.1
6.1
8.3
8.1
4.2
2.9
1.3
5.4
6.8
-1.5
3.7
2.8
4.5
3.5
2.6
3.4
1.9
4.1
1.6
1.0
3.3
3.0
3.7
2.9
4.7
7.0
4.1
3.1
13.0
16.0
21.7
9.7
12.1
9.0
6.5
FY17
25.5
12.4
19.4
24.0
6.5
19.4
13.8
17.4
11.7
11.7
16.1
12.7
20.6
1.5
18.0
76.4
6.2
21.2
12.4
18.2
21.2
12.5
10.2
9.3
19.8
NM
14.3
16.8
18.0
11.2
5.1
7.9
7.3
7.2
11.5
3.4
14.4
6.0
19.0
-3.2
1.4
18.4
11.6
9.6
28.5
36.9
50.4
28.4
35.8
24.6
22.2
ROE (%)
FY18E
28.2
15.6
18.2
25.9
12.0
21.5
13.8
17.5
15.0
15.0
17.8
12.6
17.1
3.1
21.4
49.7
3.0
19.7
21.5
18.6
19.5
12.4
11.6
10.3
19.8
-8.8
12.7
17.6
15.8
11.6
7.0
10.6
9.2
11.6
10.9
4.7
14.8
7.9
16.1
8.8
17.0
19.1
10.1
10.3
26.7
34.3
50.8
26.0
32.0
24.2
21.1
FY19E
31.3
19.1
18.5
26.9
14.2
21.2
16.6
17.0
17.6
16.9
18.7
15.8
17.0
4.1
29.6
49.7
3.7
22.8
22.7
20.7
20.9
13.8
12.6
13.7
20.9
-11.0
12.8
17.4
16.0
13.1
7.9
13.1
12.2
13.4
13.9
6.6
17.5
12.1
17.5
12.8
22.9
19.1
14.0
12.7
28.1
34.5
58.2
26.3
33.9
22.8
22.6
1,409
164
83
751
207
77
895
385
473
306
1,133
103
1,186
898
15
904
592
501
1,200
195
67
650
250
80
1,180
395
455
295
1,380
-
1,355
900
-
830
800
430
-15
19
-19
-13
21
4
32
3
-4
-4
22
14
0
-8
35
-14
19.7
6.3
1.3
12.9
4.7
4.1
26.5
5.7
9.6
11.9
42.3
7.1
17.8
20.6
0.6
30.8
29.8
15.5
22.4
6.7
2.7
17.5
5.0
2.0
27.7
9.3
10.9
13.1
46.5
9.1
22.7
24.2
0.9
30.0
34.6
16.8
31.6
7.4
3.8
26.1
6.4
2.5
35.0
11.3
13.8
16.4
56.2
11.2
33.0
30.0
1.0
33.2
39.8
19.1
268
308
1,650 1,622
871
1,150
2,542 3,282
1,129 1,276
171
201
952
1,277
386
519
679
806
151
185
103
140
18,268 22,360
3,862 4,936
15
-2
32
29
13
18
34
34
19
22
37
22
28
4.9
36.1
29.4
38.8
67.9
5.6
33.7
7.0
27.3
-1.6
0.3
384.4
96.1
7.0
49.8
40.9
68.7
71.3
8.0
39.7
9.7
27.4
4.4
3.5
460.4
91.5
8.2
65.0
58.9
89.9
102.7
11.8
54.4
16.4
34.4
7.1
5.6
547.8
138.8
1,129
4,345
1,073
311
1,096
902
4,922
1,200
4,660
1,285
315
1,310
995
4,500
6
7
20
1
19
10
-9
21.0
73.7
21.2
7.2
26.5
18.9
156.1
22.2
85.3
24.4
7.7
26.9
21.5
158.1
26.5
104.6
29.8
9.1
33.1
24.7
182.1
29 September 2017
14

Company
HUL
ITC
Jyothy Lab
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
Shilpa Medicare
Strides Shasun
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.
Ent.Network
Hind. Media
HT Media
Jagran Prak.
Music Broadcast
Reco
Buy
Neutral
Neutral
Neutral
Neutral
Buy
Neutral
Neutral
Neutral
Not Rated
Buy
Neutral
CMP
TP
% Upside
(INR)
(INR) Downside
1,204 1,400
16
261
280
7
399
395
-1
311
355
14
7,155 6,160
-14
18,387 19,600
7
233
245
5
779
810
4
8,361 8,800
5
125
-
848
980
16
2,404 2,525
5
FY17
19.6
8.4
11.2
6.3
118.0
238.7
3.6
16.7
132.9
3.5
8.7
26.7
EPS (INR)
FY18E FY19E
22.9
27.4
9.3
10.3
9.8
11.1
6.8
8.2
115.1 133.6
294.7 398.4
9.1
12.5
18.1
20.6
151.6 176.0
3.5
6.4
9.9
14.0
34.5
51.5
P/E (x)
P/B (x)
FY17 FY18E FY17 FY18E
61.3
52.5 40.1 39.8
31.1
28.2
7.0
6.9
35.5
40.6
6.7
6.7
49.5
45.6 17.3 14.8
60.6
62.2 22.9 21.3
77.0
62.4 30.8 24.7
64.5
25.5
3.0
2.7
46.5
43.1 12.1
9.8
62.9
55.2 39.4 32.7
35.3
35.8
1.8
1.7
97.7
85.8
9.6
8.8
89.9
69.7 18.0 12.6
45.6
41.2 12.5 11.6
23.1
24.5
19.5
17.2
32.5
32.9
36.6
21.5
32.6
14.1
15.2
15.5
71.1
31.2
17.5
17.7
31.5
39.7
27.5
19.2
37.9
22.2
23.0
17.1
40.3
34.8
34.2
12.8
15.7
29.5
74.3
18.1
NM
70.5
9.8
12.6
16.7
58.7
24.4
25.2
21.6
15.1
34.1
26.1
27.6
25.4
29.7
66.6
13.9
13.7
52.2
30.2
13.8
24.3
30.4
26.4
18.7
33.2
30.6
22.9
25.3
15.0
31.8
31.4
25.9
6.7
12.7
24.7
75.0
15.5
NM
60.2
9.0
11.8
14.6
40.5
4.9
5.2
6.4
4.2
4.1
6.9
3.7
4.8
3.2
1.5
3.7
2.8
10.3
2.6
2.9
3.4
5.4
4.9
2.9
3.3
7.7
4.8
3.9
2.5
17.8
3.6
2.5
1.7
2.5
3.7
16.5
4.3
1.7
4.5
1.7
0.9
2.4
3.9
4.3
4.5
5.2
3.3
3.8
5.7
3.3
4.4
3.0
1.3
3.0
2.0
12.0
2.4
2.5
3.0
5.0
4.1
2.6
3.3
6.3
4.2
3.5
2.3
13.6
3.5
2.4
1.6
2.1
3.4
13.6
3.8
1.8
4.2
1.4
0.8
2.4
3.6
FY17
66.5
23.5
21.1
36.7
39.0
40.0
6.0
28.2
39.3
5.2
10.2
21.3
27.5
23.0
23.4
37.7
27.6
12.3
23.0
10.2
23.5
9.7
11.3
24.7
21.1
14.5
8.6
18.1
20.9
17.1
14.4
10.7
18.5
22.2
23.8
17.0
12.6
50.5
10.8
7.3
12.4
16.7
12.4
25.1
25.5
-12.0
6.7
19.0
7.1
17.6
11.2
ROE (%)
FY18E
76.2
24.8
16.5
34.9
35.5
39.6
11.0
25.2
64.9
4.9
10.7
18.0
28.3
19.0
19.2
26.5
24.8
11.1
23.9
12.1
18.1
10.6
2.1
21.6
17.7
23.0
8.2
19.5
13.2
16.6
17.0
14.7
10.0
22.5
19.5
14.0
16.0
48.6
11.3
9.4
19.4
17.8
13.8
19.9
25.8
-5.3
7.2
17.3
6.9
16.5
9.3
FY19E
87.2
26.3
18.4
37.7
38.1
43.1
13.3
23.5
62.8
8.5
13.6
20.3
29.3
20.4
20.5
25.9
22.1
14.5
26.3
13.2
19.4
14.3
4.9
20.9
18.8
30.9
12.2
19.6
16.0
18.1
20.4
20.2
14.7
20.7
21.5
16.3
16.8
46.8
12.4
12.4
25.4
18.6
15.4
35.2
26.6
0.7
10.7
17.3
6.4
17.4
12.4
Neutral
Neutral
Buy
Buy
Sell
Buy
Neutral
Neutral
Neutral
Buy
Neutral
Buy
Neutral
Neutral
Buy
Buy
Buy
Buy
Buy
Buy
Not Rated
Neutral
498
1,854
1,141
676
331
467
582
853
2,368
146
596
112
2,444
502
648
1,005
4,065
556
887
501
493
1,223
510
1,830
1,606
850
330
555
520
720
2,400
220
775
200
2,500
430
905
1,125
4,820
805
1,300
515
-
1,350
2
-1
41
26
0
19
-11
-16
1
51
30
78
2
-14
40
12
19
45
47
3
10
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
56.6
129.1
14.0
32.3
26.1
13.0
55.2
20.5
73.5
52.8
44.9
9.7
17.9
21.1
33.6
79.6
2.2
42.9
8.2
46.8
16.6
47.1
41.4
133.6
21.1
47.4
15.1
16.1
53.4
25.5
91.6
64.2
50.0
14.2
24.1
26.0
40.0
120.1
5.6
51.7
11.5
54.9
26.8
56.7
56.3
160.6
30.4
74.8
23.3
18.0
67.3
Buy
Not Rated
Neutral
Buy
Not Rated
Not Rated
169
4,128
1,322
233
107
267
212
-
1,214
272
-
-
26
-8
17
9.8
102.5
38.0
6.8
8.4
16.9
11.2
129.9
42.1
9.0
15.9
21.0
13.3
163.2
48.6
12.4
23.9
25.9
Buy
Buy
Neutral
Neutral
Buy
Neutral
Buy
Buy
76
369
90
805
254
93
180
377
106
450
90
928
350
90
225
469
39
22
0
15
38
-4
25
24
1.0
20.4
-8.6
11.4
25.9
7.4
10.8
6.4
1.0
23.7
-2.7
13.4
28.3
7.9
12.4
9.3
2.4
27.6
0.3
21.7
33.6
8.1
14.1
14.0
29 September 2017
15

Company
PVR
Siti Net.
Sun TV
Zee Ent.
Aggregate
Metals
Hindalco
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
Reco
Buy
Neutral
Neutral
Buy
CMP
(INR)
1,197
25
737
520
TP
% Upside
(INR) Downside
1,628
36
32
26
860
17
630
21
FY17
20.5
-1.8
24.9
23.1
EPS (INR)
FY18E FY19E
30.9
46.9
-0.3
0.4
28.5
35.9
14.7
18.9
P/E (x)
P/B (x)
FY17 FY18E FY17 FY18E
58.3
38.7
5.8
5.1
NM
NM
3.5
3.7
29.7
25.9
7.0
6.5
22.5
35.3
8.6
7.4
39.0
30.1
5.5
5.0
27.9
14.9
NM
16.1
20.7
11.8
NM
20.4
17.1
22.1
9.6
17.6
39.7
22.1
10.2
9.2
33.3
8.3
18.0
10.5
19.7
16.3
12.7
137.2
63.7
70.3
16.8
14.6
19.5
14.2
10.1
13.9
18.6
15.7
14.5
17.0
28.7
18.6
14.7
16.9
14.2
16.6
34.4
26.4
NM
12.0
13.2
NM
10.9
22.0
9.4
NM
12.9
10.0
14.5
9.5
14.9
21.7
17.4
9.0
7.5
29.3
12.9
12.4
10.4
16.0
13.9
11.4
92.7
54.2
58.7
14.5
14.1
17.0
14.4
11.4
12.7
16.1
15.1
13.0
14.8
24.0
18.5
13.4
15.8
14.2
16.5
88.1
21.9
NM
1.8
4.0
0.4
2.5
1.4
1.6
0.6
1.9
2.0
1.7
3.0
1.8
6.8
2.4
3.1
1.8
7.0
2.1
1.0
1.0
4.2
1.7
1.7
11.2
12.1
12.1
2.7
3.7
4.7
3.0
1.5
4.8
3.0
2.1
1.9
2.6
9.0
5.5
2.4
2.7
2.3
3.8
2.3
4.7
1.1
1.6
4.3
0.4
2.1
1.4
1.5
0.7
1.8
1.8
1.6
2.5
1.6
5.4
2.2
2.5
1.6
5.9
1.9
0.9
1.0
3.5
1.5
1.5
10.3
11.0
11.1
2.4
3.2
4.1
2.7
1.4
3.8
3.0
2.2
1.8
2.5
7.2
5.9
2.2
2.6
2.0
3.8
2.2
4.0
1.3
FY17
10.4
-23.5
23.6
24.7
14.1
7.4
24.4
-7.9
17.3
7.2
12.8
-6.7
9.7
15.7
7.6
32.4
9.6
17.8
11.6
32.4
21.2
21.0
31.4
5.7
10.1
23.2
11.6
13.3
8.2
20.6
17.2
16.2
27.5
26.5
22.0
14.3
40.4
16.8
13.2
13.7
17.0
37.1
32.6
18.4
16.9
17.2
22.9
6.7
16.2
-1.6
ROE (%)
FY18E
14.0
-4.1
25.0
22.6
16.6
14.3
31.5
-4.9
21.3
6.5
15.2
-9.1
14.2
18.6
11.2
28.4
11.3
27.6
13.2
31.0
22.5
21.9
15.5
7.5
9.4
23.7
12.1
13.4
11.1
21.3
18.9
16.6
24.9
25.7
19.6
13.0
33.3
17.3
14.5
14.4
17.9
33.5
31.1
17.4
16.1
15.0
22.8
2.5
19.8
-17.3
FY19E
18.2
6.2
28.8
24.5
19.3
15.4
38.0
0.6
20.8
7.7
15.6
-5.3
20.4
16.2
14.0
25.1
12.4
27.4
14.2
24.2
17.5
20.9
17.0
8.0
10.9
25.5
12.1
13.1
14.0
22.2
19.6
17.3
23.8
23.1
19.3
14.2
28.3
20.1
16.2
15.4
20.7
32.2
33.5
16.9
16.1
17.9
21.9
3.8
19.4
-21.7
Buy
Neutral
Buy
Buy
Neutral
Buy
Sell
Buy
Neutral
238
292
135
239
76
117
53
309
650
310
301
194
297
63
180
30
361
669
30
3
44
24
-17
53
-44
17
3
8.6
19.7
-20.9
14.8
3.7
10.0
-6.2
15.1
37.9
19.8
22.2
-15.8
21.9
3.5
12.4
-7.7
23.9
65.1
24.5
29.3
2.0
25.7
4.2
12.1
-4.2
37.4
64.3
Buy
Sell
Sell
Neutral
Buy
Buy
Neutral
Sell
Buy
Buy
Buy
Neutral
464
396
807
194
415
397
1,463
122
347
172
224
787
640
346
691
171
583
558
1,152
113
316
195
275
941
38
-13
-14
-12
40
40
-21
-7
-9
13
23
20
48.3
22.6
20.4
8.8
40.7
43.0
44.0
14.8
19.3
16.4
11.4
48.3
49.1
26.5
37.2
11.1
45.9
52.6
49.9
9.4
27.9
16.5
14.0
56.5
51.6
31.3
46.1
13.3
42.9
46.9
56.3
11.7
31.1
19.7
17.9
62.8
Sell
Neutral
1,373
576
850
565
-38
-2
10.0
9.0
14.8
10.6
20.7
12.6
Buy
Neutral
Neutral
Buy
Neutral
Buy
Neutral
Neutral
Neutral
Buy
Buy
Neutral
Buy
Neutral
Buy
515
873
267
896
121
772
462
610
550
642
807
2,478
453
286
740
600
950
250
1,050
140
880
450
610
540
750
996
2,350
490
270
950
17
9
-6
17
16
14
-3
0
-2
17
23
-5
8
-6
28
30.6
59.8
13.7
62.9
11.9
55.5
24.9
38.9
38.0
37.7
28.1
133.4
30.9
16.9
52.1
35.4
61.8
15.7
62.2
10.6
60.8
28.7
40.3
42.3
43.3
33.7
133.6
34.0
18.1
51.9
41.9
65.9
16.5
67.2
13.1
65.1
32.9
43.0
48.7
52.0
39.8
147.7
36.8
19.1
70.0
Buy
Buy
Buy
382
393
76
490
480
110
28
22
46
11.1
14.9
-1.1
4.3
17.9
-10.9
6.6
20.4
-11.3
29 September 2017
16

Company
Tata Comm
Aggregate
Utiltites
Coal India
CESC
JSW Energy
NTPC
Power Grid
Tata Power
Aggregate
Others
Arvind
Avenue
Supermarts
Bata India
Reco
Buy
CMP
(INR)
673
TP
% Upside
EPS (INR)
(INR) Downside FY17 FY18E FY19E
775
15
27.2
8.7
26.1
P/E (x)
P/B (x)
ROE (%)
FY17 FY18E FY17 FY18E FY17 FY18E FY19E
24.7
77.3 12.0 10.4 132.2 14.5
33.6
36.0 199.6 2.5
2.5
6.9
1.2
2.8
17.9
19.0
19.1
13.9
14.7
10.5
15.4
29.8
136.1
51.4
24.0
26.3
27.9
25.4
63.6
32.5
23.0
23.4
7.9
68.8
66.2
16.9
21.3
27.0
11.4
74.8
41.2
28.3
21.2
82.5
22.2
35.5
17.8
34.7
56.0
42.4
14.6
47.3
50.6
49.0
13.5
11.1
21.7
12.5
12.0
10.7
12.6
28.5
82.1
44.3
23.3
25.9
24.7
17.5
33.1
19.5
21.7
16.9
11.6
49.5
27.5
12.3
20.1
15.1
9.5
47.1
34.8
23.2
18.8
43.3
24.3
24.7
19.1
33.1
37.8
44.7
11.7
45.3
40.3
28.7
6.8
1.2
1.2
1.4
2.2
1.8
2.2
2.7
17.0
6.7
2.0
29.8
7.5
4.3
4.9
4.5
7.4
19.3
2.4
6.6
3.8
1.4
2.9
3.5
3.1
4.7
3.8
8.0
5.3
11.2
6.3
3.4
2.8
4.5
20.8
7.4
1.8
8.5
12.0
4.5
6.4
1.1
1.1
1.3
1.9
1.6
2.1
2.5
14.8
6.0
2.0
26.8
6.2
3.7
3.3
3.7
6.1
17.1
2.0
6.0
3.4
1.4
2.5
3.7
2.5
4.4
3.6
7.2
4.6
4.8
5.2
3.1
2.5
4.1
18.3
6.3
1.6
7.8
9.8
4.0
37.8
6.5
6.3
10.5
16.2
17.1
14.5
10.3
17.9
13.9
8.3
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
19.0
32.8
9.8
16.6
13.7
43.3
19.2
13.0
19.5
27.4
9.5
47.6
10.6
5.3
10.9
17.3
15.8
16.4
9.1
19.3
14.4
8.5
108.9
27.7
22.5
12.5
20.7
30.8
107.5
18.6
12.7
12.5
11.7
13.4
23.3
28.6
8.5
10.7
32.5
26.0
15.6
23.4
13.0
13.7
12.9
51.6
15.3
14.5
18.0
26.9
14.8
50.5
10.8
4.2
11.9
17.8
14.2
17.2
12.0
23.0
15.8
7.7
99.2
29.6
23.4
12.9
24.3
30.1
137.7
18.3
13.1
16.2
14.8
13.7
27.4
27.6
13.5
13.9
34.5
27.4
15.0
22.9
16.4
16.0
15.2
54.5
19.5
16.1
20.7
28.8
17.5
Buy
Buy
Sell
Buy
Buy
Sell
267
983
73
166
209
78
305
1,360
49
211
262
71
14
38
-33
27
25
-9
14.9
51.9
3.8
12.0
14.2
7.4
19.8
88.9
3.4
13.3
17.4
7.3
22.0
99.3
2.7
15.7
20.6
7.3
Neutral
Neutral
369
1,044
695
983
359
242
423
194
2,199
296
1,078
103
1,078
221
93
371
515
211
475
1,021
2,440
165
825
740
2,573
1,533
251
1,326
1,645
97
6,244
181
342
375
882
-
1,100
489
323
523
243
3,334
358
1,312
129
1,130
240
-
465
738
394
463
1,230
3,295
215
990
894
3,044
1,648
298
1,288
1,990
114
5,281
167
393
2
-16
12.4
7.7
13.5
12.9
12.7
15.7
42.2
13.9
9.8
24.1
5.9
112.9
13.6
63.9
8.9
21.8
8.0
7.6
18.5
34.0
22.1
10.1
29.4
105.1
8.7
19.1
30.4
104.1
80.2
7.6
35.1
36.8
8.3
137.8
4.5
11.9
18.6
17.6
19.4
44.6
14.0
12.9
29.0
8.1
166.7
16.3
93.7
10.8
24.7
12.0
10.0
21.1
41.0
26.2
15.4
40.7
126.7
10.8
27.8
35.8
144.6
103.0
9.9
42.9
56.0
10.4
176.1
6.0
16.0
Under
Review
BSE
Neutral
Castrol India
Buy
Century Ply.
Neutral
Coromandel Intl Buy
Delta Corp
Buy
Dynamatic Tech Buy
Eveready Inds. Buy
Interglobe
Neutral
Indo Count
Neutral
Info Edge
Buy
Inox Leisure
Sell
Under
Jain Irrigation
Review
Just Dial
Neutral
Kaveri Seed
Buy
Kitex Garm.
Buy
Manpasand
Buy
MCX
Buy
Monsanto
Buy
Navneet
Buy
Education
Quess Corp
Buy
PI Inds.
Buy
Piramal Enterp. Buy
SRF
Buy
S H Kelkar
Buy
Symphony
Sell
Team Lease Serv. Buy
Trident
Buy
TTK Prestige
Neutral
V-Guard
Neutral
Wonderla
Buy
12
36
33
24
25
52
21
22
25
5
9
41.0
13.6
8.7
16.6
3.1
67.6
12.9
46.0
13.0
15.7
3.3
5.5
25
43
87
-2
20
35
31
20
21
18
7
19
-3
21
18
-15
-8
15
17.5
19.1
18.6
6.3
24.8
86.2
7.8
10.0
33.4
72.6
85.9
7.2
23.7
38.8
6.6
132.1
3.6
7.0
29 September 2017
17

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.
Capital First
Cholaman.Inv.&Fn
Dewan Hsg.
GRUH Fin.
HDFC
Indiabulls Hsg
L&T Fin.Holdings
LIC Hsg Fin
Manappuram
M&M Fin.
Muthoot Fin
PNB Housing
PFC
Repco Home
REC
STF
Shriram City Union
1 Day (%)
-0.2
4.2
0.2
-1.4
-1.3
1.5
-1.0
-1.8
0.3
0.1
0.3
0.3
3.0
2.1
-0.7
-0.1
1.2
1.2
-1.9
0.6
1.1
-0.3
0.2
0.8
-0.8
2.4
0.7
0.0
-0.7
0.2
0.1
0.3
0.6
0.6
-1.5
-1.2
0.9
1.6
1.8
1.1
0.2
2.1
1.6
-2.6
1.2
-1.2
1.2
2.9
-0.2
1.3
-0.3
4.0
0.9
2.5
-0.6
0.3
-0.4
1M (%)
-8.1
10.4
10.8
3.0
-4.7
2.5
-3.5
0.4
3.1
1.6
-5.4
-10.4
-3.6
4.1
5.8
6.6
0.2
-6.6
-5.0
1.6
1.9
-8.2
0.8
0.9
-11.9
2.9
-1.2
-0.4
0.2
-3.6
-3.5
-6.7
-6.1
-12.2
-4.6
-9.5
-9.5
-6.0
0.8
6.2
-0.5
-6.7
9.0
-0.2
-1.5
-1.4
1.2
-5.1
-0.4
-4.1
1.5
-7.6
-0.5
-6.0
-8.4
7.4
-7.0
12M (%)
-30.9
42.7
4.1
27.1
-10.4
34.8
17.2
65.4
6.8
8.5
-10.5
22.1
43.0
-25.7
83.1
-6.8
42.4
-14.3
47.3
38.6
16.2
-30.5
37.8
-11.2
28.3
69.5
35.5
38.3
-17.6
15.5
4.0
-27.6
12.9
-11.4
-10.4
-0.3
-11.7
66.4
9.0
2.2
-4.9
78.9
53.2
22.3
48.3
105.6
6.2
-2.9
12.4
25.7
2.2
-24.8
23.7
-10.7
-8.2
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
Cadila
Cipla
1 Day (%)
-2.0
1.6
-0.2
0.4
-0.4
1.0
-1.3
-0.1
-0.4
1.8
-0.5
0.6
-2.7
-0.8
-2.5
2.6
-1.1
-1.9
2.5
3.6
0.6
-1.3
1.2
3.0
-1.2
0.2
-1.5
-0.1
0.0
1.8
1.7
-2.7
1.2
1.1
1.8
0.4
-0.6
0.0
-0.3
1.0
4.1
-0.9
0.8
-0.7
-1.3
0.1
0.1
-1.5
3.5
-0.1
0.1
1.1
-0.5
-2.0
-2.1
2.9
2.1
1M (%)
3.5
-4.5
-3.1
0.9
-5.4
-3.5
-0.1
0.4
-3.8
1.0
-0.7
11.9
-8.2
0.2
-7.5
0.7
-2.4
-6.9
-4.3
-9.2
-9.4
-5.0
-1.0
-5.4
-5.9
-6.4
0.7
1.2
-6.9
4.2
-3.2
-2.3
3.7
-2.5
-0.5
2.1
-4.0
-8.0
0.3
-7.5
4.8
-2.2
1.5
5.5
-4.8
-6.8
1.6
-5.4
3.8
-6.7
-3.0
4.6
-7.5
-8.8