21 November 2017

Market snapshot

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305

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Today’s top research idea

Bharat Electronics: Highlighting key pillars of growth

Four key drivers crucial for sales and earnings growth

In our view, there are four key pillars crucial to BHE’s sales and earnings growth

over the next few years. These include:

(a)

Success in large systems programmes such as Quick Reaction Surface to Air

Missile, Battle Management System and Tactical Communication System,

(b)

Expansion of customer base with strategic partnership (SP) model and addition

of private sector players to existing kitty of customers. The four platforms which

are first off the block under the SP model are Submarine, Single engine aircraft,

Naval helicopters and Future Ready Combat Vehicles,

(c)

Increase in exports from 5% of sales in FY17 to 10%, primarily to friendly

neighboring countries and;

(d)

Retention of market share in defense electronics where BHE has enjoyed 60-

65% share. With more orders being opened up for the private sector, it is critical

that BHE maintains its share and also grows the same.

Research covered

Cos/Sector

Bharat Electronics

Quess Corp

Gas (Expert Speak)

NTPC

Aviation

Metals Weekly

Key Highlights

Highlighting key pillars of growth

Acquires Tata Business Support Services

Gas industry–the new beanstalk

CEA prescribes GCV booster to earnings

Domestic air passengers increase 20.6% in October

India long product prices increase; base metals weak

Piping hot news

GST rate cut: FMCG firms asked to update MRPs immediately



Central Board of Excise and Customs (CBEC) chairperson Vanaja Sarna has

written to fast-moving consumer goods (FMCG) companies asking them to

immediately revise the maximum retail price (MRP) on all products in line with

the GST rate cut announced by the GST Council on 10 November…

Chart of the Day: NTPC – CEA prescribes GCV booster to earnings

Capitalization to outpace capex (INR b)

Strong growth in regulated equity

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

Logistics sector gets

infrastructure status

In a major push to developing an

integrated logistics framework in

the country including industrial

parks, cold chains and warehousing

facilities—the government has

granted infrastructure status to the

logistics sector, enabling the

industry to access cheaper

finances…

2

Vedanta set to overtake Aditya Birla group as largest aluminium

maker

Anil Agarwal-owned Vedanta Ltd is poised to overtake Aditya Birla group

as the largest producer of aluminium in the country in the current fiscal.

Vedanta, which produced 0.96 million tonne of aluminium across its two

facilities in Odisha and Chhattisgarh, is on course to clock an annual output

of 1.6 million tonne this year. As against this, the combined capacity of

Aditya Aluminium and Hindalco, subsidiaries of Birla group, across four

locations in Odisha, Madhya Pradesh and Uttar Pradesh is 1.32 million

tonne. The group, as a whole produced 1.26 million tonne aluminium in

FY17…

3

The government may combine the

12 per cent and 18 per cent slabs

for goods and services tax (GST)

into one in the near future and

reserve the 28 per cent rate only

for demerit goods, said chief

economic adviser Arvind

Subramanian…

4

The government has raised

Rs14,500 crore through the Bharat

22 exchange traded fund (ETF),

comprising 22 stocks, a top official

said on Monday. “We have

decided to retain Rs14,500 crore

of the total subscription that has

come in for Bharat 22 ETF,”…

12% & 18% GST slabs may be

merged, 28% for demerit

goods: Arvind Subramanian

Govt raises Rs14,500 crore

from Bharat 22 ETF, issue

subscribed four times

5

Honda firming up plans to roll

out affordable e-cars in India

Carmakers are revving up with a

strategy focused on India to cash

in on the Modi government’s push

to promote usage of all-electric

vehicles by 2030. After Maruti

Suzuki and Toyota announced an

alliance to tap the electric vehicle

market in India, Honda Cars India

Limited (HCIL) is readying an

electric vehicle strategy aligned

with the needs of the Indian

market…

6

Mahindra opens Detroit’s 1st

car making plant in 25 years

India’s automobile giant Mahindra

today opened its new

manufacturing plant with an

investment of USD 230 million in

the world’s car capital Detroit

which got its first automotive

production facility in 25 years. The

new plant will create 250 new jobs

in the US…

7

Lenders clear sale of RCom

land for ₹801 cr.

Lenders of debt-ridden Reliance

Communications have approved the

sale of its real estate assets in Delhi

and Chennai to Canada-based asset

management firm Brookfield, said a

source. “Lenders have approved the

sale of real estate assets RCom

holds in Delhi and Chennai for ₹801

crore to Brookfield,” a source privy

to the development said on

condition of anonymity…

21 November 2017

2

Bharat Electronics

BSE SENSEX

33,360

S&P CNX

10,299

20 November 2017

Update

| Sector:

Capital Goods

CMP: INR179

TP: INR210 (+19%)

Buy

Highlighting key pillars of growth

Four key drivers crucial for sales and earnings growth

Stock Info

Bloomberg

Equity Shares (m)

M.Cap. (INR b)/(USD b)

52-Week Range (INR)

1, 6, 12 Rel. Per (%)

AvgVal. INR m

Free float (%)

BHE IN

2457.0

434.9/6.7

193/116

3/3/23

744

32.1

Post a sedate 5% CAGR in sales growth over FY11-15, growth accelerated to 15% over

FY16-17. In our view, there are four key pillars crucial to BHE’s sales and earnings growth

over the next few years. We highlight these in this update.



Financial Snapshot (INR Billion)

Y/E Mar

2017 2018E 2019E

Net Sales

86.1 110.1 122.8

EBITDA

NP

EPS (INR)

EPS Gr. (%)

BV/Sh (INR)

RoE (%)

RoCE (%)

Valuations

P/E (x)

P/BV (x)

EV/EBITDA (x)

EV/ Sales (x)

25.4

5.2

20.2

4.3

24.9

4.5

16.6

3.5

22.0

4.0

15.6

3.1

17.6

15.5

6.3

27.2

30.6

20.6

18.8

22.8

17.4

7.1

12.7

39.6

17.9

20.2

23.8

19.7

8.0

13.3

44.3

18.1

19.2







Shareholding pattern (%)

As on

Sep-17 Jun-17 Sep-16

Promoter

67.9

68.2

75.0

DII

FII

Others

16.1

8.1

7.8

16.7

7.6

7.5

14.5

4.0

6.5

FII includes depository receipts

Stock Performance (1-year)

Bharat Electron

Sensex - Rebased

Success in large systems programs:

BHE diversified into missile systems when it

collaborated with the DRDO to develop the indigenous Akash Missile System for

the Air Force, starting 2009. Thereafter, it has won repeat orders from the Air

Force/Navy, the latest being orders for the LR SAM-Barack 8 Missile for the

Navy. It has also partnered with the DRDO on the QR SAM Missile System, for

which orders are expected from FY19, apart from the order for the Akash (seven

squadrons) for the Air Force. BHE is also in the fray for the Tactical

Communication System (TCS) and Battle Management System (BMS).

Expansion of customer base with strategic partnership (SP) model and

addition of private sector players to existing kitty of customers:

With the

successful implementation of the SP model, we expect BHE’s customer base to

be more diversified – until now, it was primarily a sub-vendor to DPSUs that

were making large platforms.

Increase in exports from 5% of sales in FY17 to 10%:

Exports, primarily to

neighboring countries, is a key focus area and could double from the existing

5% of sales. These would typically occur under G2G contracts and the SE Asian

countries targeted are Vietnam, Sri Lanka, Indonesia, Nepal and Myanmar.

Retention of 60-65% share in defense electronics:

BHE has enjoyed 60-65%

share in the Indian defense electronics market. With more orders being

opened up for the private sector, it is critical that BHE maintains its share and

also grows the same. A few areas where we expect competitive intensity to

rise are radars, optronics and communication devices. These are relatively low

tech compared to other products and the levels of investment required are

also lower. However, BHE has key moats in the form of (a) a large R&D team,

with R&D spends at 9-10% of sales, (b) ability to service and upgrade defense

supplies for the next 15-20 years, and (c) existing large programs with the

DRDO, which provide visibility for the next 3-5 years.

Maintain Buy – play on faster decision making/accelerated indigenization

in defense



200

175

150

125

100

We expect BHE to report EPS of INR7.1 in FY18 and INR8 in FY19. Our target

price is INR210 (25x December 2019E EPS). Key triggers are accelerated

decision making towards large defense procurements and increased

indigenization. Key risks include a) Budget cuts for defense spending, b) Sharp

increase in competition from the private sector.

21 November 2017

3

Quess Corp

BSE SENSEX

33,360

S&P CNX

10,299

20 November 2017

Update

| Sector:

Others

CMP: INR866

TP: INR1,170 (+35%)

Buy

Acquires Tata Business Support Services…

…Strengthening the technology portfolio

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 (%)

QUESS IN

138

1068 / 557

0/0/18

119.8

1.8

68

18.5







Financials Snapshot (INR b)

FY17 FY18E FY19E

Y/E Mar

Net Sales

41.6

56.2

77.1

EBITDA

2.2

3.3

5.0

PAT

1.1

3.1

3.6

EPS (INR)

10.0

27.8

31.4

Gr. (%)

354.4

68.6 287.6

BV/Sh (INR)

73.8 179.6 211.0

RoE (%)

19.0

21.9

16.1

RoCE (%)

12.6

16.7

13.6

P/E (x)

86.5

31.2

27.6

P/BV (x)

11.7

4.8

4.1

Shareholding pattern (%)

As On

Sep-17 Jun-17 Sep-16

Promoter

81.5

89.0

89.5

DII

2.4

2.3

2.2

FII

5.3

3.5

3.4

Others

10.8

5.3

4.9

FII Includes depository receipts

Stock Performance (1-year)

Quess corp

Sensex - Rebased

1,025

850

675

500

Quess Corp acquired 51% stake in Tata Business Support Services, a provider of

Customer Lifecycle Management and Business Process Management. The company

would fit into Quess’ technology solutions portfolio (30% of revenue), strengthening

offerings and providing cross-sell opportunities.

Quess would pay INR1.53b in an all-cash deal, valuing TBSS at INR3b, implying a

trailing sales multiple of 0.5x and EBITDA multiple of 5.4x. Valuations for the deal

seem attractive given Quess’ current multiples of 2.5x sales and 46x EBITDA.

Our FY19/20 estimates for revenue/EBITDA/PAT increase by 8/12/8%, thereby

increasing our price target by 12% to INR1,170, implying an upside of 35%.









About TBSS:

TBSS, a subsidiary of Tata Sons is a company with wide a wide

services portfolio ranging across Customer Lifecycle Management (CLM) and

Business Process Management (BPM), serving Tata and non-Tata companies in

the verticals of telecom, media, retail, manufacturing and BFSI. TBSS as of FY17

had revenue of INR6.6b and has seen growth of 12% in FY17. The company had

an EBITDA of INR559m in FY17, implying margins of 8.5%. Although margins

have seen a decline for the last two years, current levels are expected to be

sustainable.

A sizeable acquisition:

Assuming continued revenue growth of 12% and stable

margins, the acquisition would add 8/12% to our FY19E revenue/EBITDA

estimates. Our PAT expectations are inching up by 8% given erosion of other

income led by the cash outflow. The acquisition fits into the Global Technology

Solutions segment of Quess Corp, which contributes to ~30% of total revenue.

The segment is currently made up of Magna Infotech (IT staffing in India),

Brainhunter (IT staffing in North America), MFX (IT services for the P&C

industry in North America) and Comtel (IT staffing in Singapore).

Acquired for inexpensive valuations:

Quess would acquire 51% of the

company for a cash consideration of INR1.53b, valuing the entity at INR3b. It is

an all-cash deal and would not result in stake dilution for Quess. This implies a

trailing sales multiple of 0.5x and EBITDA multiple of 5.4x. Quess is currently

trading at a trailing EV/Sales multiple of 2.5x and EV/EBITDA multiple of 46x,

making comparative valuations inexpensive.

Valuation view:

We value QUESS using DCF to arrive at a TP of INR1,170 (35%

upside); our TP is up ~12% led by the acquisition. Valuations are rich, given its

strong growth history and continued aggressive thrust on acquisitions. Over

FY17-20E, we expect revenue/EBITDA/PAT CAGR of 31/42/62% (27/37/58%

earlier), led by our assumption of 20% growth in organic business and

incremental contribution by recent acquisitions. Long-term prospects stand

bright, given high-growth opportunities, aggression shown on expansion and

flawless execution.

21 November 2017

4

20 November 2017

Oil and Gas

Expert Speak

Gas industry – the new beanstalk?

Great potential for long-term structural growth

In

Jack and the Beanstalk,

Jack’s magical beans turn into a beanstalk, reaching into the

skies overnight. The beanstalk becomes an enabler to a ‘lived happily ever after’ story.

The Gas industry in India could very much be such a beanstalk, believes Mr Darshan

Hiranandani, the Managing Director and Chief Executive Officer of H-Energy.

Key takeaways from our recent conference call with Mr Hiranandani:

Lack of a free market and infrastructure in India has constrained the development of

the Gas sector. While coal, petcoke and fuel oil are cheaper alternatives, natural gas is

more economical than alternatives like diesel and naphtha. Then, there is the added

advantage of convenience in terms of continuous supply, consistent quality and no

requirement of storage/inventory. However, the current scenario of a monopolistic

regime and onerous contracts is discouraging. Several small and medium enterprises

prefer to stay away from usage of natural gas, even if it means higher cost and

inconvenience. Going forward, emergence of new market players would increase the

options for the buyers and aid the development of the sector. The regulatory board is

also looking into unbundling of transmission and marketing, which could further open

up the sector for smaller players. The Gas industry is all set to see the transformation

that the Telecom industry has gone through in the last two decades (Exhibit 1).

Mr Darshan Hiranandani

MD, H-Energy

Mr Hiranandani heads the

energy venture of the

Hiranandani group. He holds a

Masters degree, with a major

in Entrepreneurship and

Finance from the Rochester

Institute of Technology, USA.

Under his able leadership, the

company has ventured into

LNG regas terminals and

natural gas pipeline projects

in India. The company also

plans to develop a

liquefaction project and crude

oil infrastructure in Canada.

The company has chartered a

4 MMTPA Floating Storage

and Re-gasification Unit

(FSRU) from Engie. The FSRU

is expected to be docked at

Jaigarh port from mid-2018.

Jetty construction has been

ongoing since 2017. The EPCM

(Engineering, Procurement,

Constructions and

Management) contract for tie-

in line has been awarded to

Engineers India Limited for

completion of 60km pipeline

from Jaigarh to the existing

Dabhol gas grid. It is also

planning a 635km Natural Gas

pipeline from Jaigarh to

Mangalore with a capacity of

17mmscmd.

Gas is what Telecom was 20 years ago

Huge unmet demand

Along the upcoming Jaigarh-Mangalore route itself, H-Energy believes there are

~27,000 industrial consumers. Till date, as per Petroleum Planning & Analysis Cell, only

~7,000 consumers have been connected across India, many of whom might not even

be taking gas all the time. Due to lack of pipeline infrastructure, virtual grids through

Liquified CNG (LCNG) cascades could improve consumption of gas tremendously. The

company has signed master agreements with consumers in several industries for

supply of gas. Several industrial consumers are still paying INR7/kwh+ for their

electricity consumption. LNG could offer good potential in such cases.

After a long time, we are facing a global glut in supply. The glut has resulted in several

new trends – destination-free contracts, flexible shipping contracts, storage and

trading of LNG, and contracts linked with other commodities like coal and ammonia

instead of conventional oil and gas linked contracts. India is all set to take advantage of

the same with upcoming LNG terminals and FSRUs, and expansion of pipeline

infrastructure.

Changed global scenario is a perfect enabler

LNG trucks can run as much as 1,000km on a single fill and LNG is 18-20% cheaper than diesel. LNG has been in

usage in China for long as transportation fuel. China has ~240,000 LNG trucks and ~3,500 LNG re-fueling stations.

India approved LNG as a transportation fuel early this year. Only a few weeks ago, the guidelines for opening of

refueling stations have been ratified. H-Energy expects ~10 refueling stations to be added in a year. The company

itself may open five stations. While electric vehicles (EVs) could pose a threat, they do not offer any solution for

heavy cargo movement – heavy trucks could require a 250kg battery pack for just a 50km range! The two leading

heavy vehicle manufacturers in the country are also looking at rolling out LNG buses in the coming months.

LNG as transport fuel could open new opportunities

21 November 2017

5

20 November 2017

Update | Sector: Metals

NTPC

Buy

BSE SENSEX

33,360

S&P CNX

10,299

CMP: INR180

TP: INR211(+17%)

CEA prescribes GCV booster to earnings

Valuations attractive; reiterate Buy

CEA’s recommendation to compensate for practical loss of GCV…

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)/Vol m

Free float (%)

NTPC IN

8,245

188 / 151

0/5/-14

1,457.0

22.3

944

37.0

CERC, in a letter dated November 14, 2017, has invited comments from stake

holders on CEA’s recommendation to compensate power generation companies

(GENCOs) 85-100kcal/kg of coal for pithead stations and 105-120kcal/kg of coal for

non-pithead stations towards practical loss of GCV during storage and handing

between “as received’ and “as fired” for the following reasons:



Effect of moisture in GCV of coal sample taken from wagon top.



Loss in GCV during coal storage inside power plant.



Reduction in GCV during handling inside power plant.

Financials Snapshot (INR b)

Y/E Mar

2017 2018E

Net Sales

813.8 849.3

EBITDA

215.0 241.0

PAT

98.6 110.9

EPS (INR)

12.0

13.4

Gr. (%)

1.8

12.4

BV/Sh (INR)

118.7 126.7

RoE (%)

10.5

11.0

RoCE (%)

6.4

6.6

P/E (x)

14.8

13.1

P/BV (x)

1.5

1.4

2019E

966.4

309.9

129.3

15.7

16.6

136.4

11.9

7.7

11.3

1.3

…bodes well for NTPC

We believe CEA’s recommendations are based on merit and are in line with our

understanding of the issue. Stakeholders are likely to approve them. According to

our ballpark calculations, this is likely to boost NTPC’s post tax earnings by INR8b-

10b (add 7% to FY19E EPS) after taking into account 40% sharing with beneficiaries.

Most of NTPC’s plants are at the pithead, though the mix is changing now.

Earnings growth at inflection, valuations attractive; Buy



Shareholding pattern (%)

Sep-17 Jun-17 Sep-16

As On

Promoter

DII

FII

Others

63.0

23.0

10.7

3.3

69.7

17.0

10.2

3.0

69.7

17.0

11.1

2.2



FII Includes depository receipts

Stock Performance (1-year)

NTPC

Sensex - Rebased

210

195

180

165

150



NTPC’s earnings and stock performance under the XIIth plan have been marred

by project delays and squeeze in incentives and thermal efficiencies under

CERC regulation 2014-19. EPS growth over FY12-17 has remained subdued.

All of these issues are now behind. Commercial addition of capacity has picked

up. There was a record 3.3GW addition to commercial capacity at group level

in 2QFY18. NTPC is likely to add 15GW of capacity over FY19-21. This will drive

healthy growth in regulated equity, the key earnings driver. We expect EPS to

grow at a CAGR of 14.1% over FY17-20 even after taking into account lower

regulated RoE of 14% (v/s 15.5% currently) from FY20. CEA’s recommendation

on GCV will provide 7% EPS upside. If RoE is not reduced by 150bp to 14% in

2019 by the regulator, our EPS estimate will get another 7% boost in FY20.

We expect capitalization to outpace capex over the next 2-3 years, which will

boost consolidated RoE and re-rate the stock. We value the stock at

INR211/share based on DCF. Our DCF model is based on three-stage growth.

The first five years have good visibility of projects. In the next 10 years, we

expect 7% growth (50% reinvestment and 14% RoE) and terminal growth of 3%

(25% reinvestment and 12% RoE). The stock is trading at attractive valuations

of 11.4x FY19E EPS and 1.3x FY19E BV.

Buy.

21 November 2017

6

Sector Update | 20 November 2017

Aviation

Domestic passenger growth

(YoY; %)

17.6

20.2

15.7 16.5

12.5



20.6

Domestic air passengers increase 20.6% in October

ASK/RPK growth for IndiGo remains muted due to engine issues



Domestic air passengers in India grew 20.6% YoY to 10.4m in October (v/s +16.5% YoY

in Sep-17 and +15% YoY in 2QFY18). Passenger growth has been in double-digits for

the last 39 months.

Domestic ASK growth was 15.7% YoY in October (v/s 14.9% YoY in Sep-17 and 14% YoY

in 2QFY18). RPK rose 21% YoY in October (v/s 17.6% YoY in Sep-17 and 15% YoY in

2QFY18). While IndiGo’s ASK/RPK grew slower at 6.3/9.3% YoY due to engine issues,

SpiceJet’s ASK/RPK grew 23.8/26.3% YoY in October.

Domestic industry load factor inched up to 84.8% in Oct-17 (v/s 84.5% in Sep-17 and

83.7% in 2QFY18). IndiGo’s load factor also increased to 87.3% in Oct-17 (v/s 85.2% in

Sep-17 and 84.1% in 2QFY18).



Domestic air passengers up 20.6% YoY to 10.4m in October

Industry load factor (%)

88.9

85.9

83.2 83.5

84.5 84.8











India's domestic air passengers grew 20.6% YoY to 10.4m in October 2017.

Passenger growth has been in double-digits for the last 39 months.

IndiGo’s passengers grew slower at 11.9% YoY in October (v/s 11.2% YoY in Sep-

17 and 10% YoY in 2QFY18) due to engine issues.

However, SpiceJet’s domestic passenger volumes grew 22% YoY in Oct-17 (v/s

28.2% YoY in Sep-17 and 31% YoY in 2QFY18).

GoAir’s passengers rose 34.3% YoY in Oct-17 (v/s 17.7% YoY in Sep-17 and 12%

YoY in 2QFY18).

Passenger volume growth for the other airlines was as follows: Jet Airways:

+21% YoY (+9% YoY in 2QFY18) and Air India: +22.8% YoY (+6% YoY in 2QFY18).

IndiGo’s passenger market share increased to 39.7% in Oct-17 (v/s 38.4% in Sep-

17 and 2QFY18).

SpiceJet’s market share stood at 13.1% in Oct-17 (v/s 13.8% in Sep-17 and 14%

in 2QFY18.

Jet Airways’ market share remained below 20% for the 19

th

consecutive month

at 17.1%. Prior to that, it had a market share of above 20% since July 2014.

Air India’s market share stood at 13% in Oct-17 (v/s 13.4% in Sep-17 and 13.3%

in 2QFY18).

GoAir’s market share increased to 8.9% in Oct-17 (v/s 8.5% in Sep-17 and 8.1%

in 2QFY18); it seems to have stabilized in the 8-9% range.

IndiGo’s domestic ASK increased 6.3% YoY in Oct-17 (v/s 5.8% YoY in Sep-17 and

6% YoY in 2QFY18); its domestic ASK share was the highest at 39.8%.

SpiceJet’s domestic ASK grew 23.8% YoY in Oct-17 (v/s 28.9% YoY in Sep-17 and

31.4% YoY in 2QFY18).

Domestic ASK grew 31.3% YoY in Oct-17 (v/s 23.6% YoY in Sep-17 and 20% YoY

in 2QFY18) for GoAir, and 17.7% YoY in Oct-17 (v/s 14.3% YoY in Sep-17 and 14%

YoY bin 2QFY18) for Jet Airways.

IndiGo’s PAX market share stays highest; GoAir’s share inches up





Passenger market share (%)

Sep-17

IndiGo

Jet

AI

SpiceJet

GoAir

Others

17.6

17.1

13.4

13.0

13.8

13.1

8.5

8.9

8.4

8.3

Oct-17



38.4

39.7





Domestic ASKs grow 15.7% YoY in Oct-17 (v/s 14% YoY in 2QFY18)







21 November 2017

7

Domestic RPKs rise 21% YoY in Oct-17 (v/s 15% YoY in 2QFY18)









IndiGo’s RPK grew 9.3% YoY in Oct-17 (v/s 9.8% YoY in Sep-17 and 8% YoY in

2QFY18), with the highest market share of 41% in October.

SpiceJet’s domestic RPK grew 26.3% YoY in Oct-17 (v/s 30% YoY in Sep-17 and

33.5% YoY in 2QFY18), with a market share of 12.2% in October.

GoAir’s domestic RPK grew 36.3% YoY in Oct-17 (v/s 22.4% YoY in Sep-17 and

15.9% YoY in 2QFY18), with a market share of 9% in October.

Jet’s RPK growth stood at 27% YoY, followed by Air India (+23% YoY) in Oct-17.

Domestic industry load factor at 84.8% in Oct-17 and 83.7% in 2QFY18











SpiceJet’s load factor stood at 93.7% in Oct-17 (v/s 94.2% in Sep-17 and 94.3% in

2QFY18); has had 90%+ load factor for the last 30 months.

IndiGo’s load factor stood at 87.3% in Oct-17 (v/s 85.2% in Sep-17 and 84.2% in

2QFY18).

GoAir’s load factor stood at 87.6% in Oct-17 (v/s 88.5% in Sep-17 and 85.5% in

2QFY18).

Jet reported load factor at 80.7% in Oct-17 (v/s 80.5% in Sep-17 and 80.6%

2QFY18.

Air India reported load factor at 76.4% in Oct-17 (v/s 78.4% in Sep-17 and and

76.5% in 2QFY18).

21 November 2017

8

Metals Weekly

India long product prices increase; base metals weak



20 November 2017

Update









Indian steel: Long product (TMT Mumbai) prices increased ~4% WoW. Sponge iron prices were up ~5% WoW,

while domestic scrap prices were up ~1% WoW. Pellet prices were unchanged. Domestic iron ore prices were

also unchanged. Domestic HRC and import price offers were flat.

Raw materials: Iron ore prices (China cfr) were unchanged WoW. Thermal coal prices were down ~2% WoW.

Coking coal prices were up ~1% WoW on reports of supply disruption in Australia. China's pellet import prices

were unchanged, as premiums remain strong.

Europe: HRC prices were unchanged. Product spreads were marginally lower. CIS HRC export prices were

down ~2% WoW. Rotterdam scrap prices were up ~2% WoW.

China: Local HRC and rebar prices were marginally lower. Export HRC prices were unchanged, but rebar prices

were up ~2% WoW.

Base metals: Aluminum, copper (cash LME) and crude oil (Brent) prices were down ~1% WoW. Zinc and Lead

declined sharply by ~3% and ~5%, respectively on LME.

21 November 2017

9

In conversation

1. L&T: Happy to be part of MTHL project, plan to complete by

2021; SN Subrahmanyam, MD & CEO















A great feeling to have great portion of bridge. Has been planned right from the

1970s, went through various committees, three-four times bids had been called

and finally it has seen the light of the day.

Three parts to the bridge - one from the Sewri side, the largest package of about

Rs 6,400 crore. Other part is from the mainland side. Total for the company is

about Rs 8,637 crore. One more part of roughly about Rs 4,900-5,000 crore

makes the total bridge.

IHI one of the best steel and bridge builders from Japan. Good to have them as

partners.

Work on the project begins immediately, designing and planning will take 4-5

months and project needs to be completed over 4.5 years that is by 2021.

Project will give a fillip to cement, to steel, a lot of local employment and to all

around economic development around Mumbai.

Land has already been acquired by MMRDA towards the construction of the

bridge.

Cautiously optimistic on infrastructure segment.

2. BIOCON: Getting EIR from USFDA for Bengaluru unit a positive

news; Kiran Mazumdar Shaw, CMD











Inspection had thrown up a number of 483s, which had raised a number of

concerns.

Getting a voluntary action indicated (VAI) status on corrective and preventive

action (CAPA) plan is very positive news. Company has been told that the May

inspection has been closed and they can carry on CAPA implementation.

Hope to cross the finishing line on the target action date, which is December 3,

for the biosimilar Trastuzumab. Although this news is not directly linked with

Trastuzumab, it will have some positive implications.

So far do not supply any products from this facility to US market. If company

gets the opportunity to produce products from the plant then it would help

them.

Finished remediation with regards to Europe and waiting for re-inspection.

3. ERIS LIFESCIENCES: Strides Shasun deal could help create

bigger franchise; Amit Bakshi, MD









Brands that will be acquired are more of a franchise, which could be help build

more number of brands and a bigger franchise could be created.

Since central nervous system (CNS) segment is the third largest chronic market

after cardiology and diabetes, the above deal would be a natural fit in terms of

headroom for products that company can now sell.

Business from Strides Shasun is of 70 percent gross margins and when it merges

with company’s own set up, in the next three-four quarters the overall margins

would be around 75 percent plus.

Still have lot of headroom to get more products.

21 November 2017

10

4. STRIDES SHASUN: Focus on b2c biz; aim to pare debt from

proceeds of ERIS life deal; Shashank Sinha, MD











Sale of the branded generics business portfolio is not a reflection of view of

India market but just reprioritization of the company's portfolio.

Did not have a plump position in India with regards to the branded generics

business, it was only 5 percent of India portfolio.

Will also allow company to focus much more on markets where they have

significant investments and inroads and would be remunerative from medium-

term earnings perspective.

It was a strategic move to divest non-core businesses. The spin-off of the generic

business in African was also a move in that direction. The net proceeds from this

deal would also be used to reduce debt. The company plans to reduce debt to

the tune of Rs 400 crore. Post this deal, the EPS would also increase by Rs 6 per

share

The focus of the company is on B2C (business to company) business and the

regulated markets, which is core to the company's future growth.

21 November 2017

11

From the think tank

1. THE ROOTS OF THE CRISIS IN THE SEED INDUSTRY



For many decades, the Indian policy framework facilitated the interaction of

science and innovation with entrepreneurship, which led to competition and the

subsequent development of an industry structure that delivered sustainable

economic benefits. The government was a major contributor to investments in

seed research in India for close to three decades after independence. Policy

reforms like the New Policy On Seed Development (1988) and New Industrial

Policy (1991), and advances made by science and technology, provided an

impetus to the participation of the private sector in the Indian seed industry and

private investments helped India benefit from hybrid seed technology and

biotechnology.

2. LET'S HOPE NO NPA ICEBERG HITS ANY TITANIC IN INDIAN

BANKING



Former Reserve Bank of India (RBI) deputy governor Subir Gokarn compared

banks’ bad loans or the non-performing assets (NPAs) with cancer—if not

treated early, the patient would die. RBI’s current deputy governor Viral Acharya

has said a bank not keeping adequate capital to absorb losses arising out of bad

loans resembles a person who has slipped off the terrace of a skyscraper to fall

and die. Looking at the NPAs, the closest simile that comes to my mind is

icebergs or the pieces of ice that are formed on land and float in an ocean or

lake. They come in all shapes and sizes—from ice-cube-sized chunks to ice

islands (the size of a small country) that can wreck a ship. Who can forget the

RMS Titanic, the British passenger liner that sank in the North Atlantic near

Newfoundland in the early hours of 15 April 1912, killing 1,517 of its 2,223

passengers and crew after it collided with an iceberg?

3. BANK RECAP BONDS: THE POSITIVE IMPACT ON NBFCS AND

LOAN SHOPPING



For your personal loan requirements, there are three segments of lenders in the

market: public sector banks, private sector banks and non-banking finance

companies (NBFCs). Over the past decade, the loan growth of all the three

categories of lenders has been sagging. But there is a contrast. Of late, public

sector banks’ loan growth has stagnated at zero whereas that of NBFCs has seen a

marginally upward curve. That is to say, over the past couple of years NBFCs have

gained loan market share at the expense of banks. The reason is not far to seek:

issues of non-performing assets (NPAs) have led to higher provisioning in public

sector banks, and they are in need of capital infusion. The bank recapitalisation

bonds announced recently are going to revitalize the banking segment by

equipping banks with adequate capital so that they can resume lending activities

with vitality. This will help the cause of pick-up in loan growth and, as a

consequence, growth of the economy.

21 November 2017

12

International

4. ASIA'S CITIES COULD SAVE THE PLANET



The world’s cities will add 2.5 billion more residents by 2050, more than half of

them in Asia. The effect of this great migration on climate change will depend in

part on what kind of homes, factories and office buildings they live and work in.

It’s a seemingly minor but significant issue that should attract attention from

officials gathered at this week’s United Nations-sponsored climate talks in Bonn.

(Michael Bloomberg, the founder and owner of Bloomberg LP, is the UN special

envoy for cities and climate change.) Buildings generate almost 20% of energy-

related greenhouse-gas emissions — a proportion that’s likely to rise as onetime

farmers move into more energy-intensive modern homes. Yet less than 10% of

the $4.6 trillion spent on construction in 2015 went into energy-efficient

“green” buildings.

21 November 2017

13

Click excel icon

for detailed

valuation guide

Rs

Valuation snapshot

P/E (x)

P/B (x)

ROE (%)

FY17 FY18E FY17 FY18E FY17 FY18E FY19E

28.7

25.2

24.5

53.4

41.0

19.0

50.0

51.2

34.7

24.8

21.6

25.9

44.5

33.9

21.3

60.3

29.6

35.5

25.9

29.0

23.5

32.4

20.8

18.3

34.3

NM

38.7

43.2

12.6

21.5

30.5

30.8

NM

20.9

39.9

14.3

NM

30.1

1,119.7

21.1

125.3

NA

56.4

46.6

28.6

27.9

21.6

61.1

36.1

79.4

17.5

28.4

25.6

22.3

36.5

42.3

21.5

37.6

43.6

19.3

25.5

20.0

18.8

24.2

29.2

17.2

47.5

25.1

29.6

21.3

84.6

20.4

26.7

23.4

19.7

27.0

18.3

32.4

31.4

16.9

17.6

25.7

10.3

64.5

24.4

9.5

11.4

7.6

22.0

22.8

NM

21.9

55.0

39.5

32.3

21.5

21.7

17.0

50.4

32.8

75.3

14.3

5.3

5.5

5.5

7.9

6.7

3.0

15.6

9.8

3.5

3.4

7.2

3.3

2.8

7.0

2.5

14.0

5.1

2.4

2.7

2.2

2.2

5.5

2.4

1.3

4.8

0.7

5.0

4.5

1.2

3.3

3.5

1.2

0.9

0.8

0.6

1.4

0.4

1.1

1.6

0.5

1.1

NA

10.8

5.5

3.0

4.6

2.5

18.3

6.7

NA

4.2

4.6

5.0

4.9

6.8

6.1

2.7

11.8

8.2

3.0

3.2

6.3

2.9

2.5

6.1

2.2

11.4

4.4

2.0

2.2

2.2

1.8

4.8

2.5

1.2

4.3

0.7

4.5

3.2

1.2

2.9

3.0

1.1

1.0

0.8

0.5

1.3

0.3

1.0

1.5

0.6

1.0

5.2

6.3

4.5

2.7

3.9

2.3

15.0

6.1

NA

3.7

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

10.9

7.2

15.3

-27.0

13.8

12.3

9.0

18.9

11.5

4.0

-6.7

4.2

1.4

10.1

-8.4

3.6

-0.2

2.7

0.9

0.0

21.6

15.1

12.0

18.0

14.4

32.5

18.9

25.5

25.5

17.3

20.4

23.3

20.1

15.2

13.0

35.7

20.5

16.8

12.5

33.7

14.5

10.8

20.5

13.4

26.5

17.7

7.3

11.5

2.6

9.6

18.8

8.8

6.3

16.9

4.0

14.8

12.4

6.7

17.3

11.9

6.4

1.5

3.4

5.8

11.6

4.6

4.7

7.0

-4.7

4.7

12.5

20.2

15.3

13.2

19.6

14.1

32.8

19.3

22.7

27.6

18.1

25.2

25.3

23.2

18.1

16.2

35.0

22.8

18.4

13.7

31.1

14.6

11.5

23.0

28.3

35.6

22.7

10.8

11.8

8.2

10.0

20.4

10.5

6.9

19.0

8.0

16.5

13.7

12.6

19.5

13.9

9.4

4.3

6.1

7.3

12.7

5.4

7.1

11.4

2.1

7.8

12.3

20.4

19.3

15.4

19.6

15.3

32.8

18.6

22.2

30.7

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

Aditya Birla Cap

Bajaj Fin.

Bharat Fin.

Capital First

Cholaman.Inv.&Fn

Dewan Hsg.

GRUH Fin.

HDFC

HDFC Stand. Life

Indiabulls Hsg

Reco

Buy

Buy

Buy

Buy

Neutral

Buy

Buy

Buy

Sell

Buy

Neutral

Buy

Not Rated

Buy

Buy

Neutral

CMP

(INR)

804

115

3,243

698

19,388

1,777

30,650

1,203

693

201

3,659

1,408

239

8,424

422

709

TP

% Upside

EPS (INR)

(INR) Downside FY17 FY18E FY19E

856

134

3,753

844

19,965

2,116

34,722

1,334

688

254

3,819

1,607

-

9,466

575

764

6

17

16

21

3

19

13

11

-1

26

4

14

12

36

8

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

28.3

34.2

4.5

6.2

145.2 175.0

19.1

26.0

457.8 603.0

82.5 116.9

814.7 1,062.7

27.6

36.7

35.8

45.9

7.9

9.7

183.1 193.9

75.0

85.7

9.9

11.8

288.1 381.0

24.6

64.8

14.9

25.8

Buy

Neutral

Buy

Buy

Buy

Buy

Neutral

Buy

Buy

Buy

Buy

Buy

Buy

545

181

147

113

1,837

319

55

1,647

76

1,037

514

31

313

680

197

209

146

2,150

355

56

2,000

100

1,179

665

36

382

25

9

43

29

17

11

2

21

32

14

29

14

22

15.4

7.0

5.0

4.8

56.8

15.3

3.0

48.1

-31.3

26.8

11.9

2.5

14.6

18.4

8.5

1.7

5.5

68.7

13.6

2.8

60.9

4.1

32.1

16.4

1.9

17.8

30.8

10.5

5.7

6.6

84.7

17.0

3.2

78.6

8.7

41.6

23.0

3.8

23.3

Buy

Neutral

Neutral

Neutral

Buy

Neutral

Buy

Buy

Neutral

185

205

393

61

418

130

187

333

171

201

201

386

49

438

150

250

415

175

9

-2

-2

-19

5

16

33

25

3

6.0

-14.8

18.8

1.5

29.3

-31.6

6.2

0.3

8.1

17.9

3.2

16.1

6.4

36.7

17.1

8.5

14.6

-13.5

22.6

9.2

30.3

8.6

44.0

21.4

13.5

26.8

6.0

Buy

Buy

Under Review

Buy

Buy

Buy

Neutral

Buy

Buy

Buy

204

1,806

978

705

1,282

639

498

1,690

355

1,199

231

2,300

-

925

1,500

690

500

2,000

370

1,550

13

27

31

17

8

0

18

4

29

0.0

32.0

21.0

24.6

46.0

29.6

8.1

46.8

4.5

68.6

3.7

45.7

30.3

32.8

59.2

37.6

9.9

51.6

4.7

83.6

5.4

63.7

47.2

43.7

70.4

46.0

12.0

57.1

5.4

105.1

21 November 2017

14

Company

L&T Fin Holdings

LIC Hsg Fin

Manappuram

M&M Fin.

Muthoot Fin

PNB Housing

Repco Home

Shriram City Union

STF

Aggregate

Capital Goods

ABB

Bharat Elec.

BHEL

Blue Star

CG Cons. Elec.

CG Power & Indu.

Cummins

GE T&D

Havells

K E C Intl

L&T

Pennar Eng.

Siemens

Solar Ind

Suzlon Energy

Thermax

Va Tech Wab.

Voltas

Aggregate

Cement

Ambuja Cem.

ACC

Birla Corp.

Dalmia Bharat

Grasim Inds.

India Cem

J K Cements

JK Lakshmi Ce

Ramco Cem

Orient Cem

Prism Cem

Shree Cem

Ultratech

Aggregate

Consumer

Asian Paints

Britannia

Colgate

Dabur

Emami

Godrej Cons.

GSK Cons.

HUL

ITC

Reco

Buy

Neutral

Not Rated

Buy

Neutral

Buy

Buy

Buy

Buy

CMP

(INR)

188

605

103

436

451

1,389

627

2,082

1,280

TP

% Upside

(INR) Downside

240

28

680

12

-

481

10

550

22

1,750

26

800

28

2,650

27

1,415

11

FY17

5.2

38.2

8.6

7.1

29.5

31.6

29.1

84.3

55.6

EPS (INR)

FY18E FY19E

6.9

10.4

41.0

46.5

9.2

9.7

14.2

19.1

42.6

42.0

52.5

66.5

36.0

41.9

115.6 145.3

80.6 106.2

P/E (x)

P/B (x)

ROE (%)

FY17 FY18E FY17 FY18E FY17 FY18E FY19E

35.9

27.1 4.2

3.7

12.4 14.9 18.9

15.8

14.8 2.8

2.4

19.1 17.4 17.2

11.9

11.2 2.6

2.4

24.0 22.3 21.4

61.5

30.8 3.8

3.5

6.4

11.9 14.8

15.3

10.6 2.8

2.3

19.4 23.8 19.9

43.9

26.4 4.2

3.7

13.8 15.0 16.7

21.5

17.4 3.4

2.9

17.4 18.0 17.6

24.7

18.0 2.7

2.4

11.7 14.3 15.9

23.0

15.9 2.6

2.3

11.7 15.1 17.4

33.5

26.8 5.4

4.6

16.1 17.2 17.9

70.3

28.5

65.1

54.5

52.4

20.5

32.2

70.7

53.4

25.0

29.0

14.5

66.4

57.7

21.4

33.1

18.3

40.7

36.1

54.2

47.3

39.5

78.1

17.4

30.4

30.6

58.7

25.7

NM

408.3

45.6

43.6

38.5

55.6

64.6

49.2

46.5

48.7

50.7

38.7

64.9

30.9

68.4

25.3

29.7

42.6

47.3

58.2

33.7

43.0

44.3

20.7

25.0

11.3

54.6

45.3

15.4

34.2

15.9

35.9

30.7

38.2

32.7

35.1

49.8

14.4

29.3

21.6

33.7

25.8

26.3

40.6

36.0

41.0

31.0

54.1

56.3

44.7

43.6

48.6

45.3

37.6

55.8

28.4

8.9

5.9

1.0

8.9

28.5

1.3

6.3

10.1

9.7

4.8

3.4

1.5

6.2

10.6

-1.2

4.5

3.0

6.3

4.0

2.7

3.7

2.6

5.4

1.8

1.0

4.1

3.5

4.5

3.4

5.9

7.9

4.8

3.6

14.7

21.2

22.3

12.3

16.7

12.3

8.1

42.5

7.0

7.9

4.5

1.0

8.3

20.9

1.2

5.9

8.8

8.7

4.1

3.1

1.3

5.4

8.9

-1.4

4.1

2.6

5.6

3.7

2.6

3.5

2.5

4.9

1.6

1.0

3.5

3.2

3.9

3.1

5.3

6.6

4.3

3.3

14.4

17.5

21.2

10.5

14.3

9.6

8.0

42.3

6.9

12.7

20.6

1.5

18.0

76.4

6.2

21.2

12.4

18.2

19.2

12.5

10.2

9.3

19.8

NM

14.3

16.9

18.0

11.2

5.1

7.9

7.1

7.2

10.8

3.4

14.4

6.1

19.0

-3.2

1.4

18.4

11.6

9.4

28.5

36.9

50.4

28.4

35.8

24.6

22.2

66.5

23.5

11.6

17.9

3.3

20.2

51.0

2.1

18.1

21.8

19.5

19.5

13.1

11.6

9.8

21.4

-8.8

12.6

17.5

16.5

11.9

7.0

11.1

7.3

10.3

11.5

3.5

17.5

9.9

16.0

12.3

13.7

20.0

11.1

10.7

26.9

34.0

48.7

26.0

31.7

23.8

21.4

75.9

24.4

14.6

18.1

3.3

27.8

49.6

3.3

22.2

22.6

21.2

20.2

14.0

12.6

13.8

21.5

-11.0

13.2

16.4

16.3

13.0

8.0

14.2

12.0

12.7

14.5

6.0

19.2

13.9

17.9

15.6

21.3

17.4

14.2

12.9

29.4

35.2

56.2

27.3

34.0

22.9

22.6

88.0

25.6

Sell

Buy

Sell

Neutral

Buy

Neutral

Buy

Neutral

Neutral

Neutral

Buy

Not Rated

Neutral

Neutral

Not Rated

Neutral

Buy

Neutral

1,384

180

87

702

245

84

853

405

511

296

1,228

102

1,183

1,189

14

1,020

549

629

1,230

210

78

685

260

90

1,150

440

570

350

1,450

-

1,355

1,120

-

930

745

550

-11

17

-11

-2

6

7

35

9

12

18

18

14

-6

-9

36

-13

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

29.9

15.5

20.2

7.1

2.9

16.5

5.2

1.4

25.3

9.4

11.5

14.3

49.0

9.1

21.7

26.2

0.9

29.9

34.5

17.5

28.7

8.0

3.0

24.4

6.5

2.3

35.0

11.2

14.3

17.6

57.5

11.2

33.4

31.3

1.0

34.4

37.2

19.6

Neutral

Neutral

Buy

Buy

Neutral

Neutral

Buy

Buy

Buy

Buy

Buy

Buy

Buy

265

1,706

1,128

3,028

1,182

171

1,031

408

700

165

111

17,523

4,193

314

1,797

1,435

3,517

1,302

188

1,324

512

853

205

128

21,852

4,906

18

5

27

16

10

10

28

25

22

24

15

25

17

4.9

6.9

36.1 52.2

28.5 32.2

38.8 60.8

67.8 81.9

5.6

5.8

33.7 47.8

7.0

12.1

27.3 27.1

-1.6

6.3

0.3

2.7

384.4 486.2

96.1 102.2

8.4

70.9

56.7

83.7

116.8

10.5

61.8

19.1

35.1

9.1

5.0

499.3

147.1

Neutral

Buy

Buy

Buy

Buy

Neutral

Neutral

Buy

Neutral

1,168

4,758

1,044

337

1,291

958

6,038

1,274

259

1,280

5,845

1,328

395

1,435

1,015

5,400

1,440

280

10

23

27

17

11

6

-11

13

8

21.0 21.6

73.7 84.5

21.2 23.4

7.2

7.7

26.5 26.6

18.9 21.2

156.1 160.8

19.6 22.8

8.4

9.1

25.8

106.9

28.6

9.3

33.2

24.5

182.3

27.6

10.0

21 November 2017

15

Company

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

Infrastructure

Ashoka Buildcon

IRB Infra

KNR Constructions

Sadbhav

Engineering

Aggregate

Logistics

Allcargo Logistics

Blue Dart

Concor

Gateway

Distriparks

Gati

Transport Corp.

Aggregate

Media

Dish TV

D B Corp

Den Net.

Reco

Neutral

Neutral

Neutral

Buy

Neutral

Buy

Neutral

Not Rated

Buy

Neutral

CMP

(INR)

333

304

7,721

23,082

235

849

9,068

150

1,078

3,240

TP

% Upside

(INR) Downside

365

10

340

12

7,750

0

25,580

11

275

17

975

15

9,267

2

-

1,320

22

2,970

-8

FY17

11.2

6.3

123.7

238.7

3.6

16.7

132.9

3.5

8.7

26.7

EPS (INR)

FY18E FY19E

9.2

10.9

6.5

7.9

128.4 149.0

296.6 413.1

8.9

12.4

17.2

20.8

151.5 176.7

3.5

6.4

14.7

18.0

34.9

53.7

P/E (x)

FY17 FY18E

29.6

36.3

48.3

46.7

62.4

60.1

96.7

77.8

65.1

26.3

50.7

49.3

68.2

59.8

42.6

43.2

124.1 73.5

121.2 92.8

48.2

43.9

23.9

26.4

23.3

18.0

41.5

31.4

37.9

26.1

31.4

12.7

15.1

17.3

72.4

33.8

17.9

14.6

34.4

44.2

25.3

19.8

40.2

22.6

23.7

NM

11.6

22.5

28.9

20.2

23.8

28.6

25.4

15.8

69.4

25.5

28.6

32.2

37.6

69.7

15.6

15.7

56.3

29.3

14.9

22.0

32.0

34.2

19.6

36.0

32.5

24.9

27.7

114.7

10.3

20.2

22.2

16.8

15.5

31.8

31.9

29.6

8.9

13.9

26.0

75.8

16.8

NM

P/B (x)

ROE (%)

FY17 FY18E FY17 FY18E FY19E

5.6

5.7

21.1 15.5 18.3

16.9 14.7 36.7 33.6 37.1

24.7 22.4 40.9 39.0 40.9

38.7 31.0 40.0 39.8 44.4

3.0

2.7

6.0

10.8 13.3

13.2 10.9 28.2 24.1 23.9

42.7 35.5 39.3 64.8 62.9

2.1

2.1

5.2

4.9

8.5

12.2 10.7 10.2 15.5 16.5

24.3 16.9 21.3 18.2 20.9

13.3 12.4 27.6 28.2 29.5

5.1

5.3

7.5

4.4

5.2

6.6

3.9

5.2

3.1

1.2

3.7

3.2

10.5

2.8

3.0

2.8

5.9

5.4

2.7

3.4

8.1

4.8

4.0

2.3

1.5

4.2

3.3

2.2

2.3

17.8

3.8

2.8

2.3

2.7

3.8

16.7

4.2

2.0

4.4

4.6

6.0

3.5

5.0

5.5

3.5

5.4

3.0

1.0

3.1

2.2

12.4

2.6

2.5

2.5

5.5

4.7

2.4

3.2

6.6

4.3

3.6

2.1

1.4

3.6

2.9

2.0

2.1

13.6

3.6

2.7

2.0

2.3

3.5

13.7

3.5

2.1

23.0

21.9

36.7

27.6

12.3

23.0

10.2

22.0

9.7

10.0

24.7

21.1

14.5

8.6

18.0

20.9

17.1

14.4

10.8

18.1

22.2

23.8

16.8

-0.6

14.0

20.7

12.0

11.0

13.7

50.5

10.8

7.3

12.4

16.7

12.3

25.1

24.6

-19.1

19.9

17.2

26.4

24.6

7.2

23.4

12.1

16.3

8.2

1.6

19.6

17.7

22.0

9.2

18.4

12.0

17.1

14.7

12.9

9.2

22.5

18.3

12.9

1.9

14.1

19.1

13.8

11.8

14.1

48.6

11.5

9.2

19.4

17.8

13.6

19.9

22.8

-6.4

19.8

19.6

25.7

22.3

11.4

26.1

13.6

21.2

14.1

3.9

18.4

18.8

31.4

12.0

19.2

12.5

17.6

20.5

18.3

13.7

20.7

19.9

15.4

7.0

12.9

17.0

12.5

11.6

15.4

46.8

14.1

11.7

25.4

18.6

16.1

35.2

22.2

0.2

Neutral

Neutral

Buy

Buy

Neutral

Buy

Neutral

Neutral

Neutral

Buy

Neutral

Buy

Neutral

Neutral

Buy

Buy

Buy

Buy

Buy

Buy

Not Rated

Neutral

515

1,970

1,336

707

423

446

603

1,043

2,277

131

592

125

2,489

544

660

826

4,446

619

818

516

524

1,246

540

1,950

1,606

900

335

555

600

1,100

2,575

185

650

200

2,500

550

861

1,000

5,000

797

1,214

610

-

1,400

5

-1

20

27

-21

24

0

5

13

41

10

60

0

1

30

21

12

29

48

18

12

21.6 21.6

74.6 68.8

57.3 52.7

39.3 44.6

10.2

6.1

14.2 17.5

15.9 21.1

39.9 32.4

72.6 60.6

10.3

1.9

39.3 37.9

7.2

8.0

34.4 44.2

16.1 18.6

36.9 44.2

56.6 37.6

129.1 139.0

14.0 18.1

32.3 41.8

26.1 14.4

13.0 16.1

55.2 50.0

24.9

90.7

64.1

50.3

10.5

23.7

27.0

43.7

115.2

4.9

42.8

11.0

54.9

26.5

55.0

42.7

156.2

29.9

69.2

22.9

18.0

61.4

Buy

Neutral

Buy

Buy

208

235

269

317

260

240

295

385

25

2

9

21

-0.5

20.3

12.0

11.0

1.8

22.9

13.3

14.3

7.1

23.2

14.1

14.5

Buy

Not Rated

Neutral

Buy

Not Rated

Not Rated

169

4,127

1,363

260

141

292

215

-

1,496

282

-

-

27

10

8

9.8

10.9

102.5 129.9

38.0 42.7

6.8

8.4

16.9

8.8

15.9

21.0

13.3

163.2

55.2

11.6

23.9

25.9

17.2

40.2

35.9

38.2

16.8

17.2

31.1

75.0

18.3

NM

Buy

Buy

Neutral

77

365

92

106

430

90

38

18

-2

1.0

20.0

-9.3

1.0

21.7

-2.9

2.4

25.4

0.1

21 November 2017

16

Company

Ent.Network

Hind. Media

HT Media

Jagran Prak.

Music Broadcast

PVR

Prime Focus

Siti Net.

Sun TV

Zee Ent.

Aggregate

Metals

Hindalco

Hind. Zinc

JSPL

JSW Steel

Nalco

NMDC

SAIL

Rain Industries

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

Reco

Neutral

Buy

Neutral

Buy

Buy

Buy

Buy

Neutral

Buy

Buy

CMP

(INR)

783

242

99

163

369

1,379

102

25

836

533

TP

% Upside

(INR) Downside

910

16

302

25

113

14

225

38

469

27

1,640

19

130

28

27

9

1,005

20

630

18

FY17

11.4

25.8

7.4

10.7

6.4

20.5

1.2

-1.9

24.9

12.1

EPS (INR)

FY18E FY19E

11.6

20.1

25.6

30.2

10.4

11.9

11.3

13.4

9.0

14.2

27.1

43.0

3.1

6.1

-0.8

0.1

28.1

35.7

10.5

16.0

P/E (x)

P/B (x)

ROE (%)

FY17 FY18E FY17 FY18E FY17 FY18E FY19E

68.5

67.7 4.4

4.1

6.7

6.3

10.1

9.4

9.4

1.5

1.3

18.2 15.0 15.3

13.4

9.6

1.0

0.9

7.9

10.2 10.6

15.2

14.4 2.5

2.5

18.5 17.3 19.3

57.5

40.9 3.8

3.5

11.2

9.0

12.6

67.2

50.9 6.7

6.0

10.4 12.4 17.0

83.2

33.0 5.5

4.7

7.6

15.3 24.8

NM

NM

4.0

4.7 -29.4 -14.2

2.4

33.6

29.8 8.2

7.6

26.0 26.4 30.7

44.0

51.0 6.0

5.5

17.0 12.8 16.8

40.9

35.0 5.1

4.7

12.6 13.5 17.2

30.5

16.0

NM

18.0

23.0

12.6

NM

33.1

20.7

18.5

25.9

10.4

20.3

51.7

23.7

10.2

9.4

34.6

8.6

18.3

11.0

22.3

19.0

13.9

174.5

86.8

93.8

18.0

14.1

24.2

15.3

14.0

17.3

20.4

18.1

16.9

17.2

33.1

20.3

15.5

13.9

13.9

NM

13.1

18.3

9.5

NM

12.5

12.3

11.8

15.3

11.7

16.3

27.9

17.2

11.4

9.9

30.7

13.7

11.8

9.5

16.9

16.2

12.9

81.5

62.7

65.0

15.3

13.3

20.3

15.1

14.1

15.6

17.8

16.8

14.7

15.0

27.6

20.5

13.4

2.0

4.3

0.5

2.8

1.6

1.8

0.8

3.6

1.9

2.1

1.8

3.2

2.0

6.9

2.6

3.1

1.8

7.3

2.2

1.0

1.0

4.7

2.0

1.8

14.3

16.3

16.1

2.9

3.5

5.9

3.2

2.1

6.4

3.3

2.4

2.2

2.7

10.4

6.0

2.5

1.8

4.6

0.6

2.4

1.5

1.6

0.9

2.8

1.8

1.9

1.7

2.7

1.9

5.8

2.3

2.6

1.6

6.2

2.0

0.9

1.0

3.9

1.8

1.7

13.4

13.3

13.3

2.7

3.4

5.0

3.4

1.9

4.9

3.2

2.8

2.2

2.6

8.4

6.5

2.4

7.4

24.4

-7.9

17.3

7.2

12.8

-9.9

10.9

9.7

15.7

7.0

32.4

9.6

14.0

11.6

32.4

20.7

21.0

31.4

5.7

10.1

23.2

11.6

13.1

8.2

20.6

17.1

16.2

27.5

26.5

22.0

14.3

41.6

16.8

13.2

13.7

17.0

37.1

32.6

18.4

13.6

32.3

-4.7

19.8

8.6

15.7

-6.9

25.2

15.1

17.1

11.4

25.2

12.0

22.6

14.4

25.1

17.2

21.7

15.1

8.0

10.8

25.2

12.1

12.9

16.5

23.4

20.5

17.4

25.9

26.4

21.8

14.1

35.2

17.3

14.6

15.1

17.9

33.6

30.6

18.9

16.5

42.5

0.1

20.2

10.1

16.3

-4.9

29.7

23.8

16.6

15.3

25.8

12.6

27.3

14.0

25.0

16.9

20.4

16.7

10.4

12.5

23.7

12.0

13.5

20.9

25.5

23.9

18.3

25.6

23.4

22.5

14.5

29.6

20.4

17.3

16.4

20.8

32.4

33.5

18.2

Buy

Neutral

Buy

Buy

Neutral

Buy

Sell

Buy

Buy

Neutral

261

315

174

266

85

126

81

318

313

701

326

322

209

297

87

187

43

492

394

672

25

2

20

12

2

49

-47

55

26

-4

8.6

19.7

-20.9

14.8

3.7

10.0

-10.1

9.6

15.1

37.9

18.8

22.7

-15.1

20.3

4.7

13.3

-6.4

25.5

25.5

59.4

26.4

33.5

0.5

24.9

5.8

12.7

-4.3

38.9

44.4

65.2

Buy

Sell

Sell

Neutral

Buy

Buy

Neutral

Sell

Buy

Buy

Buy

Buy

504

458

830

208

415

393

304

127

353

180

253

919

643

378

721

184

579

554

301

110

418

231

312

1,077

28

-18

-13

-12

39

41

-1

-13

18

28

23

17

48.3

22.6

16.1

8.8

40.7

41.9

8.8

14.8

19.3

16.4

11.4

48.3

43.1

28.1

29.7

12.1

36.4

39.5

9.9

9.2

29.8

19.0

15.0

56.7

52.1

31.9

44.1

13.2

42.8

43.6

11.0

11.5

40.5

22.8

16.7

62.1

Sell

Buy

1,746

784

1,270

850

-27

8

10.0

9.0

21.4

12.5

27.4

15.9

Buy

Neutral

Neutral

Buy

Neutral

Buy

Neutral

Neutral

Neutral

Buy

Buy

Neutral

Buy

553

843

331

961

168

963

507

705

642

649

933

2,705

478

600

970

270

1,100

160

950

480

670

600

780

1,004

2,450

560

9

15

-18

14

-4

-1

-5

-5

-7

20

8

-9

17

30.6 36.0

59.8 63.2

13.7 16.3

62.8 63.8

11.9 11.9

55.5 61.6

24.9 28.5

38.9 42.0

38.0 43.7

37.7 43.3

28.1 33.8

133.4 131.8

30.9 35.8

41.9

68.2

17.0

67.8

14.1

66.0

33.6

46.0

50.3

52.4

40.2

151.4

37.7

21 November 2017

17