26 October 2017
Market snapshot
Equities - India
Close
Chg .%
Sensex
33,043
1.3
Nifty-50
10,295
0.9
Nifty-M 100
19,212
1.6
Equities-Global
Close
Chg .%
S&P 500
2,557
-0.5
Nasdaq
6,564
-0.5
FTSE 100
7,447
-1.1
DAX
12,953
-0.5
Hang Seng
11,493
0.8
Nikkei 225
21,708
-0.4
Commodities
Close
Chg .%
Brent (US$/Bbl)
58
0.1
Gold ($/OZ)
1,277
0.0
Cu (US$/MT)
6,984
-0.4
Almn (US$/MT)
2,173
1.3
Currency
Close
Chg .%
USD/INR
64.9
-0.3
USD/EUR
1.2
0.4
USD/JPY
113.6
-0.2
YIELD (%)
Close
1MChg
10 Yrs G-Sec
6.8
0.0
10 Yrs AAA Corp
7.7
0.0
Flows (USD b)
25-Oct
MTD
FIIs
0.6
-0.4
DIIs
0.0
1.5
Volumes (INRb)
25-Oct
MTD*
Cash
620
318
F&O
12,024
6,624
Note: YTD is calendar year, *Avg
YTD.%
24.1
25.8
33.9
YTD.%
14.2
21.9
4.3
12.8
22.3
13.6
YTD.%
5.0
10.9
26.4
27.5
YTD.%
-4.5
12.3
-2.9
YTDchg
0.3
0.1
YTD
4.8
11.3
YTD*
295
5,518
Today’s top research idea
RBL Bank: Strong growth with improving profitability and healthy asset
quality
v
Key positives are from 2QFY18: a) Loan growth of 8% QoQ and 35% YoY. b) Fee
income growth of 38% YoY, driven by a 150% increase in distribution/CC fees.
c) Margin improvement of 20bp QoQ to 3.7%, driven partly by a reduction in
cost of funds from CASA inflows and partly by capital from QIP
v
Loan growth was led by non-wholesale book growth of 41% YoY, increasing the
share of non-wholesale to 40.4% from 38.8% a year ago. Strong CASA growth of
56% YoY (ahead of deposit growth of 31% YoY) led to CASA ratio improving
380bp YoY (+160bp QoQ) to 23.7
v
With a diverse product portfolio, no legacy issues, highly capable management
and low market share, we expect RBL to report industry-leading loan CAGR of
~35% over FY17-20.
v
We maintain Buy with a TP of INR665 based on 3.5x Sept-19E BV.
Research covered
Cos/Sector
RBL Bank
Hindustan Unilever
Kotak Mah. Bank
HCL Tech
Emami
PNB Housing
M&M Fin. Serv.
Tata Comm
GSK Pharma
Exide Inds.
Quess Corp
PI Inds
Mindtree
Tata Elxsi
Key Highlights
Strong growth with improving profitability and healthy asset quality
Remarkable growth in EBITDA augurs well for future
Steady quarter; loan growth gaining momentum
Organic growth remains the dampener
EBITDA above estimate
Growth story continues
Biting the bullet - Migrated to 90dpd
EBITDA at INR5.6b, up 1% QoQ, 4% below estimate
Revenue impacted by GST rollout
EBITDA margin below estimate
Strong broad-based revenue performance
Revenue below estimate
In-line operating performance
Revenue, EBITDA in line
BIOS | CROMPTON | KKC | EQUITAS | JUBI | LTFH | MPHL | UNSP
Results Expectation
| YES
Chart of the Day: Hindustan Unilever – Consumer business sales growth of 10% minus volume growth of
4% minus ~3% price reduction in 2QFY18 plus ~3% input credit is equal to ~6% realization growth
Source: Company, MOSL
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
Sensex at record, new data
signal a revival in sentiment
A day after the government
unveiled the massive PSU bank
recapitalisation plan, coupled with
a big push for road construction,
stock markets scaled a lifetime
high on Wednesday as investors
and analysts cheered the moves to
lift economic growth…
2
Rupee rebounds 18 paise to end at one-week high
Brushing aside its initial volatility, the rupee made a strong comeback by
recovering 18 paise against the US dollar to end at a fresh one-week high
of 64.89 on late selling of the greenback by exporters and corporates.
Forex market witnessed a sudden revival in sentiment towards the tail-end
session following government’s Rs 2.11 lakh crore recapitalisation plan to
bolster NPA—hit public sector banks…
3
IGST relief likely for foreign
banks, MNCs
The government may be looking
to give some respite to foreign
banks and multinationals which
are saddled with the additional
cost of paying 18% integrated
goods and services tax (IGST) on
the services provided to their
international offices, said two
people close to the development…
4
Roads built under India’s
ambitious Bharatmala programme
will increase vehicle travelling
speed by around 20-25%, thereby
helping reduce logistics costs,
transport minister Nitin Gadkari
said at a press conference in the
capital…
Bharatmala will lower logistics
costs to 6% from 18% now:
Nitin Gadkari
5
RIL, BP finalise plans to
develop all KG-D6 fields
Reliance Industries and BP Plc
have finalised plans to develop all
the gas fields in the KG-D6 Block,
reflecting the company’s renewed
enthusiasm about the policy and
pricing regime and focus on the
sector after completing heavy
capital expenditure in its telecoms
and petrochemicals businesses.
The partners have submitted the
formal Field Development Plan for
MJ Field in the gasrich block Cto
the oil ministry on Wednesday,
sources familiar with the
development said…
6
India’s HPCL-Mittal Energy Ltd
(HMEL), part-owned by steel
tycoon L.N. Mittal, may halt
naphtha exports from the 2021-22
fiscal year when it starts its $3.1
billion cracker, the chairman of
Hindustan Petroleum Corp. Ltd
said…
7
Railways stations
redevelopment: May look at
12 pct rate of return for
investors, Piyush Goyal moots
HMEL may halt naphtha
exports from 2021-22
Indian Railways may look at a rate
of return (RoR) of 12% on its
investments under the revamped
station redevelopment
programme as the transporter
plans to be a co-investor along
with private developers…
26 October 2017
2

24 October 2017
2QFY18 Results Update | Sector: Financials - Bank
RBL Bank
Buy
BSE SENSEX
33,043
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
Avg. Val, INR m
Free float (%)
S&P CNX
10,295
RBL IN
Strong growth with improving profitability and healthy asset quality
361.7
n
RBL’s 2QFY18 PAT increased 68% YoY (7% below estimate), mainly due to
1,33.1 /2.1
opex missing estimates by 5% (higher expansion costs), despite total income
600 / 320
(INR6.6b, +4%/+40% QoQ/YoY) being largely in line with estimates. Key
-2/-15/35
positives are: a) Loan growth of 8% QoQ and 35% YoY. b) Fee income growth
983
of 38% YoY, driven by a 150% increase in distribution/CC fees. c) Margin
100.0
CMP: INR524
TP: INR665 (+27%)
Financials & Valuations (INR b)
Y/E March
2018E 2019E
NII
17.2
21.8
OP
13.4
17.8
NP
6.7
9.4
NIM (%)
3.4
3.2
EPS (INR)
16.4
23.0
BV/Sh. (INR)
159.0
178.0
ABV/Sh. (INR)
154.3
171.7
RoE (%)
12.4
13.7
RoA (%)
1.2
1.3
Valuations
P/E(X)
32.1
22.8
P/BV (X)
3.3
2.9
P/ABV (X)
3.4
3.1
Div. Yield (%)
0.5
0.7
2020E
28.8
23.6
12.6
3.2
30.8
203.4
195.9
16.2
1.3
17.0
2.6
2.7
0.9
improvement of 20bp QoQ to 3.7%, driven partly by a reduction in cost of
funds from CASA inflows and partly by capital from QIP.
n
Absolute GNPAs increased 6% QoQ (+77% YoY) to 1.44% of loans (-2bp
QoQ). Sequential decline in asset quality was caused by a 30%/20% increase
in DB&FI/BBB portfolios, where GNPA ratios stood at 2.81%/1.49%
(+42bp/+8bp QoQ), while asset quality in Commercial Banking improved
with a decline in GNPA to 2% from 2.6% in the earlier quarter.
n
Loan growth was led by non-wholesale book growth of 41% YoY, increasing
the share of non-wholesale to 40.4% from 38.8% a year ago. Strong CASA
growth of 56% YoY (ahead of deposit growth of 31% YoY) led to CASA ratio
improving 380bp YoY (+160bp QoQ) to 23.7%.
n
Other highlights:
a) PAR>90 dpd in micro-banking stood at 4.68% (the bank
maintained PAR guidance of 5% and credit cost guidance of 2.5% on this
book). b) Post QIP in August 2017, Tier 1 ratio stood at 13.87%. c) Fees to
assets improved 10bp QoQ to 1.6%. d) Cost to core income ratio stood at
57% v/s 58% in 1Q.
Valuation view:
With a diverse product portfolio, no legacy issues, highly
capable management and low market share, we expect RBL to report industry-
leading loan CAGR of ~35% over FY17-20. We expect stable/improving margins
due to a changing loan mix toward high-yielding loans, a sharp fall in cost of bulk
deposits and an improvement in the CD ratio. Strong balance sheet growth is
expected to drive operating leverage. We cut FY18E PAT by ~5% to account for
continued high expansion costs, and maintain
Buy
with a TP of INR665 based on
3.5x Sept-19E BV.
26 October 2017
3

Hindustan Unilever
BSE SENSEX
33,043
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
Avg Val, INRm
Free float (%)
S&P CNX
10,295
HUVR IN
2,164.3
2,750.9 / 42.4
1287 / 783
-1/25/35
1283
32.8
25 October 2017
2QFY18 Results Update | Sector: Consumer
CMP: INR1,274
TP: INR1,440(+13%)
Remarkable growth in EBITDA augurs well for future
n
Buy
n
Financials & Valuations (INR b)
Y/E Mar
2017 2018E 2019E
313.0 336.9 384.2
Net Sales
60.5
70.4
83.7
EBITDA
42.5
49.4
59.7
PAT
19.6
22.8
27.6
EPS (INR)
1.9
16.2
21.0
Gr. (%)
30.0
30.1
32.6
BV/Sh (INR)
66.5
75.9
88.0
RoE (%)
88.5
101.1 116.3
RoCE (%)
64.9
55.8
46.2
P/E (x)
42.5
42.3
39.1
P/BV (x)
n
n
n
n
Estimate change
TP change
Rating change
HUVR’s 2QFY18 net sales rose 5.9% YoY to INR83.1b.
Domestic consumer
business grew 10% YoY, with 4% underlying volume growth. EBITDA increased
19.5% YoY to INR16.8b (est. of INR15.6b) and PAT (bei) by 14.2% YoY to
INR12.4b (est. of INR11.9b). EBIT margin expanded by 390bp YoY for Home
care, 130bp for Personal care, 110bp by Foods and 280bp for Refreshment.
Segmental performance:
Home care and Personal care revenues were up 13%
and 8% YoY, respectively. Sales of Foods and Refreshments – the relatively
small segments – were up 10% and 11% YoY, respectively.
Gross margin expanded 320bp YoY to 52.7%.
High ad spends (+150bp YoY) and
a slight increase in employee costs (+20bp YoY) were partially offset by lower
other expenditure (-70bp YoY). Thus, EBITDA margin expanded 230bp YoY to
20.2%. Comparable margin expanded 180bp YoY.
1HFY18 comparable domestic consumer business grew 8% YoY,
with EBITDA
margin expansion of 170bp YoY.
Concall highlights:
(1) Expect gradual improvement in rural demand. (2) Input
costs starting to inflate. Management expects further inflation. (3) Lever Ayush
now available nationally across channels, but with a focus on urban areas.
Valuation view:
Revival of rural growth is already underway, and is likely to
pick up steam. HUL has all the levers for earnings revival in place, especially
when the imminent rural recovery is allied with the benefits of low base of
preceding years, return of price part of sales growth, lower promotion spends
and continuing premiumization. 2QFY18 again demonstrated the company’s
ability to grow volumes in a difficult operating environment, increase
advertising levels and yet report robust profitable growth. Consequently, we
expect EPS CAGR of 18% over FY17-20, well above 6.1%/10.6%/10.1% on 3-
year/5-year/10-year EPS CAGR. Return ratios and dividend yield are best-of-
breed. We maintain target multiple at 10% premium to 3-year average
(effectively 48x Sep 2019E EPS), leading to a TP of INR1,440. Maintain
Buy.
(INR Million)
4Q
4.0
82,130
6.4
16,510
12.2
20.1
1,080
60
830
16,200
4,360
26.9
11,180
7.6
11,830
1Q
0.0
85,290
4.9
18,660
14.1
21.9
1,140
60
1,130
18,590
5,630
30.3
12,920
14.6
12,830
FY18
2Q
3QE
4.0
9.0
83,090 85,537
5.9
11.0
16,820 16,335
19.7
20.5
20.2
19.1
1,150
1,173
60
60
2,040
902
17,650 16,004
5,250
4,881
29.7
30.5
12,360 11,123
14.2
20.9
12,760 11,123
4QE
7.0
89,461
8.9
18,543
12.3
20.7
1,148
62
946
18,279
5,396
29.5
12,883
15.2
12,883
FY17 Ind AS FY18 Ind AS Estimate
Variance
2QE
0.8
5.1
4.0
318,887
343,377
78,427
5.9%
2.7
7.7
0.0
60,463
70,358
15,615
7.7%
5.1
16.4
11.2
19.0
20.5
19.9
3,958
4,611
1,163
219
242
60
5,254
5,018
2,781
61,541
70,522
17,173
2.8%
19,058
21,157
5,238
31.0
30.0
30.5
42,474
49,366
11,935
3.6%
3.2
16.2
10.3
44,893
49,366
11,935
Quarterly performance
Y/E March
Domestic volume growth (%)
Net Sales
YoY Cha nge (%)
EBITDA
YoY Cha nge (%)
Ma rgi ns (%)
Depreci a ti on
Interes t
Other Income
PBT
Ta x
Ra te (%)
Adjusted PAT
YoY Cha nge (%)
Reported Profit
E: MOSL Estimates
1Q
4.0
81,270
3.6
16,347
8.1
20.1
933
60
1,076
16,431
5,411
32.9
11,277
6.1
11,727
FY17
2Q
3Q
-1.0
-4.0
78,427 77,060
1.4
-0.7
14,046 13,560
5.1
-5.2
17.9
17.6
945
1,000
49
50
2,528
820
15,580 13,330
4,807
4,480
30.9
33.6
10,818
9,199
9.3
-10.2
10,956 10,380
26 October 2017
4

Kotak Mahindra Bank
BSE SENSEX
33,043
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
Avg Val, INRm
Free float (%)
S&P CNX
10,295
KMB IN
Steady quarter; loan growth gaining momentum
1,839
n
Standalone results:
PAT grew 22% YoY to INR9.94b (3% miss). Operating
1,853 / 28.5
profit increased 20% YoY, led by healthy NII growth (+16% YoY, even as NIM
1114 / 692
shrunk 17bp QoQ to 4.33%), steady fee income growth (+29% YoY) and
-5/0/11
controlled operating expenses. Asset quality remains healthy, with the GNPL
2103
ratio declining by 11bp QoQ to 2.47% and the coverage ratio by 260bp QoQ
69.9
25 October 2017
2QFY18 Results Update | Sector: Financials
CMP: INR1,010
TP: INR1,179(+17%)
Buy
Financials & Valuations (INR b)
Y/E MARCH
2018E 2019E
NII
93.4 112.0
OP
71.3
90.4
Cons. NP
61.0
79.1
Cons. EPS (INR)
32.1
41.6
EPS Gr. (%)
19.4
29.7
Cons. BV. (INR)
232
272
Cons. RoE (%)
14.8
16.5
RoA (%)
1.8
1.9
Payout (%)
4.7
4.7
Valuations
P/E(X) (Cons.)
31.5
24.3
P/BV (X) (Cons.)
4.3
3.7
Div. Yield (%)
0.1
0.1
2020E
134.6
114.6
98.8
51.9
25.0
323
17.4
2.0
4.7
19.4
3.1
0.1
to 49.7%. The bank received RBI inspection report and no divergence was
reported as of March 2017.
n
Loan growth gained momentum, coming in at 21% YoY (+7% QoQ), led by
strong traction in CV, small business and personal banking segments.
Deposit growth stood at 17% YoY/1% QoQ.
n
Other highlights: a) CASA growth remained strong at 44% YoY (62% YoY
growth in SA deposits). CASA ratio thus increased 390bp QoQ to 47.8%. b)
SMA2 advances declined to 16bp of loans v/s 21bp in 1QFY18, while OSRL
declined to INR650m (4bp of loans).
n
Other businesses:
a) Profitability in the securities business improved to
INR1.18b, up 23% YoY, while Kotak Life Insurance also reported strong
earnings growth. b) K-Sec market share stood at 1.9% (stable QoQ). c) Asset
management business average AUM increased 9% QoQ (+57% YoY), led by
strong inflows in equity AUM (+102% YoY).
Valuation and view:
The bank’s share in consolidated profits now stands at
~69% (67.6% in 2QFY17), and we expect this to increase further as synergy
benefits show up fully in FY18. Among subsidiaries, KM Securities, KM Life
Insurance and Kotak AMC reported healthy earnings growth. We expect ~26%
earnings CAGR over FY17-19, led by a revival in loan growth and controlled opex.
Strong presence across geographies/products and healthy capitalization (Tier1 of
~19%) place the bank in a sweet spot to capitalize on growth opportunities and
gain market share. Comfort on asset quality remains high, with no SDR/5:25,
negligible SMA2 (16bp) and OSRL (4bp). At our SOTP based TP of INR1,179, KMB
will trade at 4.0x Sep19E consolidated BV.
Buy.
FY17
2Q
3Q
4Q
1Q
FY18E
2Q
23,127
15.9
17,248
19.8
9,943
22.3
FY17
3Q
23,530
14.8
18,501
21.1
10,554
20.0
4Q
24,334
12.6
19,613
15.2
11,715
20.0
1,619
811
250
1,333
295
507
0
1,041
-129
17,441
24.2
81,261
17.8
59,848
48.1
34,115
63.2
5,150
1,960
460
3,610
860
560
125
3,030
-385
49,485
43.0
93,445
15.0
71,316
19.2
41,340
21.2
6,014
2,461
490
5,002
1,032
1,163
0
4,091
-600
60,991
23.3
FY18E
Quarterly Performance
Y/E March
1Q
Kotak Bank (standalone)
Net Interest Income
19,191
19,954
20,503
21,614
22,456
% Cha nge (Y-o-Y)
20.1
18.9
16.1
16.4
17.0
Operating Profit
13,150
14,401
15,277
17,020
15,954
% Cha nge (Y-o-Y)
120.3
37.8
26.8
42.5
21.3
Net Profit
7,420
8,133
8,798
9,765
9,127
% Cha nge (Y-o-Y)
291.0
42.8
38.6
40.3
23.0
Other Businesses
Kota k Pri me
1,200
1,300
1,330
1,330
1,320
Kota k Ma h. Inves tments
400
530
480
560
450
Kota k Ma h. Ca pi ta l Co
230
50
70
110
50
Kota k Securi ti es
600
960
850
1,210
1,250
Interna ti ona l s ubs
130
310
220
210
170
Kota k Ma h. AMC & Trus tee Co.
190
70
160
130
150
Kota k Inves tment Advi s ors
110
10
0
0
0
Kota k OM Li fe Ins ura nce
710
630
680
1,010
1,030
Con.a dj a nd MI
-240
30
80
-280
-80
Conso. PAT
10,750
12,023
12,668
14,045
13,467
% Cha nge (Y-o-Y)
108.0
27.4
33.9
33.2
25.3
E: MOSL Es ti ma tes , Qua rterl y numbers va ry from ful l yea r number due to di fference
1,500
1,575
550
650
-10
200
1,180
1,239
280
287
230
276
0
0
1,000
1,020
-266
-125
14,407
15,676
19.8
23.7
i n reporti ng
26 October 2017
5

HCL Technologies
BSE SENSEX
33,043
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
Avg Val, INRm
Free float (%)
S&P CNX
10,295
HCLT IN
Organic growth remains the dampener
1,427
n
India drags organic growth:
2QFY18 CC revenue growth stood at 0.9% QoQ,
1,294.3 / 19.9
which implies flat revenue on an organic basis, in our view. Growth was
941 / 731
driven by Engineering Services (4.4% QoQ CC) – which should have some
-1/2/-5
contribution from the IBM license arrangements. On a YoY basis, growth
1414
dropped from 12.2% CC in 1Q to 10.6%, and HCLT now expects growth at
40.1
25 October 2017
2QFY18 Results Update | Sector: Technology
CMP: INR907
TP: INR970(+7%)
Neutral
Financials & Valuations (INR b)
2017 2018E
Y/E Mar
467.2
506.3
Net Sales
103.1
112.5
EBITDA
84.6
88.8
PAT
59.8
63.2
EPS (INR)
49.2
5.6
Gr. (%)
239.0
250.8
BV/Sh (INR)
27.5
25.9
RoE (%)
25.3
23.5
RoCE (%)
15.1
14.3
P/E (x)
3.8
3.6
P/BV (x)
2019E
562.0
124.9
95.3
68.2
7.9
280.2
25.6
23.8
13.2
3.2
n
n
Estimate change
TP change
Rating change
n
the lower end of the 10.5-12.5% band. India dragged 2Q performance
(USD20m negative impact), excluding which growth in CC was 2% QoQ.
HCLT’s decision to get more selective here will weigh on FY18 growth.
Watch out for impact of amortization on EBIT:
EBIT margin was 19.7%,
down 40bp QoQ, marginally ahead of our estimate of 19.4%. EBITDA margin
beat was higher (90bp), offset by higher amortization during the quarter
(USD25m). PAT at INR21.9b grew 0.8% QoQ, a shade below our estimate of
INR22.1b on account of lower revenue growth. As per HCLT’s amortization
schedule, the impact on EBIT from amortization could be a slight headwind
to margins to contend with.
IMS underperformance remains a concern:
YoY growth in IMS plummeted
to 4.8%. However, even after adjusting for the USD20m impact from India SI,
growth in IMS would have been <7%, materially below that being reported
by peers such as INFO. IMS growth has come off significantly, since the
tailwind of the Volvo deal has seized to exist.
Valuation view:
Weak revenues and changed amortization schedule drive
some moderation in our forward earnings estimates. We expect HCLT to
post revenue CAGR of 9.9% over FY17-19E and EPS CAGR of 6.7% during this
period. There will be some gestation before greater clarity emerges around
the end-results from a string of HCLT’s latest investments. Our price target
of INR970 (14x forward earnings) implies 7% upside. We maintain
Neutral,
and will reconsider the same subject to: [1] greater confidence in IRRs from
IBM deals and/or [2] turnaround in core areas of Engineering and IMS.
4Q
1,817
4.1
120,530
12.7
33.7
11.8
26,490
22.0
20.0
2,150
11.5
20,250
-2.2
5.2
16.5
115,973
85.7
16.9
61.6
1Q
1,884
3.7
121,490
7.2
33.7
11.6
26,810
22.1
20.1
2,690
20.0
21,710
7.2
6.3
15.1
117,781
85.7
16.2
59.8
FY18
2Q
3Q
1,928
1,962
2.3
1.7
124,340 128,492
7.9
8.8
34.0
33.8
11.8
11.6
27,590
28,613
22.2
22.3
19.7
19.9
2,980
2,425
20.4
20.4
21,880
22,270
0.8
1.8
8.6
7.5
15.7
16.0
119,040 121,440
86.0
86.2
15.7
60.4
FY17
4Q
2,000
2.0
132,004
9.5
33.9
11.5
29,454
22.3
19.9
2,484
20.4
22,923
2.9
13.2
16.4
123,990
85.7
6,975
11.9
467,220
14.2
33.9
11.8
103,090
22.1
20.3
9,340
18.8
84,570
13.5
59.8
115,973
83.1
FY18E
7,774
11.5
506,325
8.4
33.8
11.6
112,468
22.2
19.9
10,579
20.3
88,783
5.0
63.2
123,990
83.8
Est.
2QFY18
1,944
3.2
124,999
8.5
32.4
11.1
26,620
21.3
19.4
3,354
20.0
22,055
1.6
9.5
15.4
123,331
85.5
/ bp)
-0.8
-85bp
-0.5
-57bp
159bp
70bp
3.6
4.2
34bp
-11.1
40bp
-0.8
-80bp
-87bp
-3.5
49bp
Quarterly Performance (Consolidated)
Y/E June
Revenue (USD m)
QoQ (%)
Revenue (INR m)
YoY (%)
GPM (%)
SGA (%)
EBITDA (INRm)
EBITDA Margin (%)
EBIT Ma rgi n (%)
Other i ncome
ETR (%)
Adjusted PAT
QoQ (%)
YoY (%)
EPS
Headcount
Uti l excl . tra i nees (%)
Attri ti on (%)
Fi xed Pri ce (%)
1Q
1,691
6.5
113,360
15.9
34.4
12.1
25,210
22.2
20.6
2,530
21.0
20,430
6.1
14.6
14.5
107,968
85.8
17.8
60.9
FY17
2Q
3Q
1,722
1,745
1.9
1.4
115,190 118,140
14.1
14.2
33.6
33.9
11.8
11.7
25,110
26,280
21.8
22.2
20.1
20.4
2,350
2,310
21.1
21.5
20,150
20,710
-1.4
2.8
10.5
7.9
14.3
14.7
109,795 111,092
85.3
84.6
18.6
17.9
61.3
63.2
26 October 2017
6

RESULTS
FLASH
25 October 2017
Results Flash | Sector: Consumer
Emami
Buy
BSE SENSEX
33,043
S&P CNX
10,295
CMP: INR1,106
n
TP: INR1,400
We will revisit our estimates
post earnings call/management
interaction.
EBITDA above estimate; recovery seen in wholesale channel
2QFY18 sales grew 9.7% YoY to INR6.3b.
Domestic revenue rose 14% YoY, with
10% volume growth. The quarter continued to see CSD and wholesale channel
destocking, but there has been a significant recovery compared to 1QFY18.
HMN expects wholesale channel to return back to normalcy in 2HFY18.
Gross margin shrunk 40bp YoY to 67.3%.
Employee expenses were up 20bp
YoY. Sharp cut in ad spends (-160bp YoY to 15.7%) and lower other expenses (-
50bp YoY to 9%) led to EBITDA margin expansion of 150bp YoY to 32.1%.
EBITDA thus grew 14.9% YoY to INR2.0b (est. of INR1.9b). Adjusted PAT before
amortization grew 19% YoY to INR1.6b (est. of INR1.4b).
Domestic (83% salience) segmental performance:
Boro Plus range grew by
38% YoY, led by antiseptic creams. Navratna range grew 16% YoY, with both
cool oils and talc registering double-digit volume growth. Pain management
range grew 15% YoY in 2QFY18, led by double-digit volume growth in balms.
Male grooming range grew by 12%, led by healthy double-digit growth in Fair
and Handsome cream and facewash. Kesh King range declined 16% YoY as
worries in wholesale channel continued, along with subdued rural markets.
Healthcare range grew by a meager 2%, impacted by the subdued performance
of Pancharishtha. 7 Oils in One sales grew in double-digit YoY.
International (14% salience) sales grew 22% YoY.
SAARC and Africa did well.
MENAP posted high-single-digit growth. Gained market share across portfolio.
CSD (3% salience) declined by 20% YoY.
New launches in 2QFY18:
Fair and Handsome Laser 12 Advanced Whitening
and Multi Benefit Cream, Diamond Shine Luxury Crème Hair Colour and
BoroPlus Zero Oil Zero Pimple Face Wash.
We will review our estimates post the conference call. We have a
Buy
rating on
the stock.
(INR Million)
Var.
FY18
2QE
(%)
10.0
6,226
0.9%
6.5
1,882
7.0%
30.2
7.4
122
50
95
1,805
0.7%
415
23.0
1,390
14.4%
4.0
612
778
26.8%
Conference Call Details
Date:
26 October 2017
Time:
11:00am IST
Dial-in details:
+91-22-3960 0663
th
n
Financials & Valuations (INR b)
2017 2018E 2019E
Y/E Mar
Sales
24.9
26.2
31.8
EBITDA
7.6
8.0
9.6
NP
6.0
6.1
7.5
EPS (INR)
26.5
26.9
33.1
EPS Gr. (%)
4.5
1.4
23.1
BV/Sh. (INR)
77.3
90.7 105.0
RoE (%)
35.8
32.0
33.9
RoCE (%)
31.0
32.5
38.2
Payout (%)
33.0
33.4
27.2
Valuations
P/E (x)
44.1
43.5
35.3
P/BV (x)
15.1
12.9
11.1
EV/EBITDA (x)
35.4
33.4
27.7
Div. Yld (%)
0.7
0.8
0.8
EV/Sales (x)
10.8
10.1
8.3
n
n
n
n
n
Quarterly Performance
Y/E MARCH
Domes tic volume Growth (%)
Net Sales
YoY Change (%)
EBITDA
Margins (%)
YoY Change
Depreciation
Interes t
Other Income
PBT
Tax
Rate (%)
PAT before Amortization
YoY Change (%)
Amortization
Reported PAT
E: MOSL Estimates
FY17
2Q
11.0
5,728
8.0
1,752
30.6
15.1
111
160
87
1,568
230
14.7
1,336
9.6
680
661
FY18
2Q
10.0
6,281
9.7
2,013
32.1
14.9
146
104
53
1,817
227
12.5
1,590
19.0
604
987
FY17
6.9
25,219
5.2
7,591
30.1
10.5
469
580
311
6,853
836
12.2
6,013
5.0
2,617
3,404
FY18E
6.0
26,235
4.0
7,957
30.3
4.8
519
185
331
7,585
1,477
19.5
6,108
1.6
2,400
3,708
1Q
18.0
6,454
20.1
1,473
22.8
49.2
106
125
51
1,292
117
9.1
1,175
18.0
609
567
3Q
0.2
7,260
0.2
2,585
35.6
3.7
112
127
82
2,428
381
15.7
2,046
4.8
705
1,343
4Q
-1.5
5,777
-4.4
1,781
30.8
-4.7
140
168
92
1,565
108
6.9
1,456
-6.6
623
833
1Q
-18.0
5,411
-16.2
802
14.8
-45.6
153
79
65
635
28
4.4
605
-48.5
598
10
3QE
14.0
8,058
11.0
3,039
37.7
17.5
123
30
90
2,976
684
23.0
2,291
12.0
634
1,657
4QE
18.0
6,485
12.3
2,103
32.4
18.1
98
-28
123
2,157
538
24.9
1,619
11.2
563
1,056
26 October 2017
7

PNB Housing Finance
BSE SENSEX
33,043
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
Avg Val, INRm
Free float (%)
S&P CNX
10,295
PNBHF IN
166
231 / 3.6
1715/789
-14/-7/-
690
61.1
25 Oct 2017
2QFY18 Results Update | Sector: Financials
CMP: INR1394
n
TP: INR1750 (+25%)
Buy
Growth story continues
n
Financials & Valuations (INR b)
Y/E March
2018E 2019E 2020E
NII
15.7
21.0
27.9
PPP
PAT
EPS (INR)
BV/Sh. (INR)
RoAA (%)
RoE (%)
Payout (%)
P/E (x)
P/BV (x)
Div. Yield (%)
15.8
8.7
52.5
371.1
1.7
15.0
20.9
26.5
3.8
0.7
21.0
11.0
66.5
423.7
1.5
16.7
20.9
21.0
3.3
0.9
28.1
14.7
88.8
494.0
1.5
19.4
20.9
15.7
2.8
1.1
n
n
n
Estimate change
TP change
Rating change
PNB Housing Finance’s (PNBHF) 2QFY18 PAT grew robustly by 51% YoY to
INR2.08b, led by its strong AUM growth, YoY improvement in margins and
lower C/I ratio (albeit off a high base).
Disbursements grew 45% YoY to INR74b. While this is certainly a very strong
performance, it was a tad lower than disbursements in 1QFY18, suggesting
some impact of RERA, and possibly GST.
Generally, the second quarter is
seasonally strong in terms of disbursements for an HFC.
AUM growth of 47% YoY was in line with estimates. The mix has remained
largely stable on both QoQ and YoY basis.
C/I ratio (calculated) declined over 1,200bp YoY and 160bp QoQ to 23%. The
sequential improvement is commendable, in our view.
One of the key factors
driving this is improving employee productivity.
As per company disclosures,
both disbursements/employee and loans outstanding/employee have
increased at ~20% CAGR over the past two years (note that this number does
not account for off-roll sales staff). We believe continued operating leverage is
key to RoA/RoE improvement, and thus, for valuations to sustain.
Valuation view:
PNBHF continues to deliver strong growth in its loan book.
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 41% PAT CAGR over FY17-20E, with RoE inching toward high-teens over
the medium term. We upgrade our FY18-20 EPS estimates by 2-9%.
Buy
with a
target price of INR1,750 (3.8x Sep 2019E BVPS, 22x Sep 2019E EPS).
26 October 2017
8

RESULTS
FLASH
M&M Financials Services
BSE SENSEX
33,043
S&P CNX
10,295
25 October 2017
Results Flash | Sector: Financials - NBFC
CMP: INR406
Biting the bullet - Migrated to 90dpd
n
We will revisit our estimates post
earnings call/management
interaction.
Financials & Valuations (INR b)
Y/E March
2017 2018E 2019E
NII
33.2 40.0 45.1
PPP
PAT
EPS (INR)
BV/Sh.(INR)
ABV/Sh (INR)
RoA on AUM (%)
RoE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
P/ABV (x)
Div. Yield (%)
57.3
3.6
4.4
0.7
28.7
3.4
4.5
1.2
22.4
3.1
4.2
1.6
19.3
4.0
7.1
92.0
1.0
6.5
39.2
24.4
8.0
14.2
90.6
1.8
12.2
41.0
27.4
10.2
18.1
96.1
1.9
14.4
41.0
n
111.8 120.2 131.0
n
n
n
n
n
Mahindra & Mahindra Financial Services (MMFS) reported strong operating
performance. AUM grew 14% YoY to almost reach INR500b. It has been five
straight quarters of 13-14% AUM growth. Growth was driven primarily by
tractors (+14% YoY), pre-owned vehicles (+14% YoY) and SME (+71% YoY).
Growth in cars and M&M vehicles remains modest.
MMFS bit the bullet and migrated its NPL recognition policy to 90dpd. This
resulted in 230bp increase in GNPLs and a P&L impact of INR2.5b (provisions and
interest reversals). Note that PCR has now dipped to 51%. We believe MMFS will
have to shore up its provision buffer further over the next few quarters.
GNPL ratio declined 20bp QoQ and 70bp YoY to 10.3% on a 120dpd. GNPL ratio
on a 90dpd was at 12.5%. Net NPL ratio increased by 30bp QoQ while declining
by 90bp YoY to 4.7% on a 120dpd. Net NPL ratio on a 90dpd was at 6.5%.
Cost-to-income declined 400bp YoY to 39.6%, largely due to control on non-
employee opex. Our back-of-the-envelope calculations suggest that if not for the
NPL migration, operating profit would have beaten our estimates by 7-8%.
MMFS incurred a provisioning cost of INR 4.45b, which implies a credit cost (on
AUM) of 390bp.Though credit cost remains largely unchanged sequentially, there
was an ~INR2.0b impact (our estimate) due to incremental provisioning on
migration to 90dpd (overall P&L impact is INR2.5b, of which we expect INR400-
500m impact due to interest reversals).
Without the migration impact, PAT would be have been INR2.4b as compared to
the reported PAT of INR780m.
Valuation and view:
The business environment for MMFS seems to be getting
better. Asset quality data signal early signs of revival. We like the fact that the
company chooses to improve balance sheet quality over near-term profitability,
and has migrated to 90dpd in advance of regulatory requirement. The company’s
long-term prospects remain strong. As MMFS is highly levered to growth and
asset quality, this would have a multiplier effect on the return ratios. We look to
revise our estimates and target price post the analyst concall on 26
th
Oct.
FY17
2Q
14,916
241
15,157
5.4
7,086
8,071
2.9
3,567
4,504
-10.5
3,042
1,462
514
948
-35.1
14.0
16.4
44.2
35.2
3Q
14,904
130
15,035
6.7
7,441
7,593
2.7
3,645
3,949
-11.2
4,190
-241
-85
-156
-123.3
12.9
15.8
48.0
35.2
4Q
18,255
173
18,427
9.1
7,137
11,290
10.8
4,037
7,252
6.7
3,614
3,638
1,298
2,341
-36.8
13.9
17.8
35.8
35.7
1Q
15,924
107
16,031
16.5
7,327
8,704
27.1
3,810
4,894
36.5
4,258
636
162
474
-45.5
13.9
17.8
43.8
25.5
FY18
2Q
3Q
16,608 17,613
221
240
16,829 17,853
11.0
18.7
7,498
7,929
9,331
9,924
15.6
30.7
3,694
4,214
5,636
5,710
25.1
44.6
4,446
2,200
1,190
3,510
410
1,211
780
2,299
-17.7 -1,570.1
13.8
14.7
16.1
18.5
39.6
42.5
34.5
34.5
FY17
4Q
20,308
259
20,567
11.6
7,743
12,824
13.6
4,651
8,173
12.7
1,341
6,832
2,384
4,448
90.0
15.2
15.9
36.3
34.9
61,739
636
62,375
5.6
28,574
33,801
3.5
14,509
19,292
-7.6
13,091
6,202
2,198
4,003
-40.5
0.0
13.9
42.9
35.4
Quarterly Performance
Y/E March
Operating Income
Other Income
Total income
YoY Growth (%)
Interest Expenses
Net Income
YoY Growth (%)
Operating Expenses
Operating Profit
YoY Growth (%)
Provisions
Profit before Tax
Tax Provisions
Net Profit
YoY Growth (%)
AUM growth (%)
Borrowings growth (%)
Cost to Income Ratio (%)
Tax Rate (%)
E: MOSL Estimates
1Q
13,664
93
13,757
0.5
6,910
6,847
-5.4
3,260
3,587
-22.1
2,245
1,341
472
870
-2.2
10.0
11.1
47.6
35.2
(INR M)
FY18
70,453
827
71,280
14.3
30,497
40,782
20.7
16,369
24,413
26.5
12,245
12,169
4,168
8,002
99.9
0.0
8.0
40.1
34.2
26 October 2017
9

RESULTS
FLASH
Tata Communications
BSE SENSEX
33,043
S&P CNX
10,295
25 October 2017
Update | Sector: Telecom
CMP: INR712
n
TP: INR775 (+8%)
Buy
We will revisit our estimates
post earnings call/management
interaction.
EBITDA at INR5.6b, up 1% QoQ, 4% below estimate
Conference Call Details
Date:
26 October 2017
Time:
02:30pm IST
Dial-in details:
+91-22 3960 0854
Financials & Valuations (INR b)
Y/E March
2017 2018E 2019E
Sales
176.2 171.9 183.5
EBITDA
24.1 23.8 31.4
NP
7.8
-4.2
6.6
EPS (Rs)
27.3 -14.7 23.1
EPS Growth (%) 1,659.2 -153.8 -257.1
BV/Sh (INR)
55.9 52.5 75.6
P/E (x)
25.8 -48.0 30.5
P/BV (x)
12.6 13.4
9.3
EV/EBITDA (x)
12.0 12.1
8.9
EV/Sales (x)
1.6
1.7
1.5
RoE (%)
RoCE (%)
RoIC (%)
132.7
10.2
9.8
-27.1
-7.9
-10.2
36.0
7.6
11.4
th
Revenue declined 2% QoQ (-6.5% YoY) to INR42.2b on weak voice and data
revenues (4% below est.)
n
EBITDA of INR5.6b rose marginally by 1% QoQ (-14% YoY, 4% miss) on
disappointing data EBITDA (2% QoQ drop), partly offset by voice (18% QoQ
jump).
n
PAT turned negative at INR2.5b (v/s INR323m in the last quarter and INR845m
in the year-ago period) due to INR1.9b additional provision on the contractual
obligation to Tata Sons on Tata Teleservices investment and due to other one-
time exceptional provisions of INR0.3b.
n
Data revenues at INR27.8b remained flat QoQ (+2% YoY, 3% below est.).
n
Data EBITDA at INR4.6b dropped 2% QoQ (-15% YoY, 8% miss). Data EBITDA
margin at 16.6% shrunk 40bp QoQ (-320bp YoY).
n
Within data, traditional revenues (~70% of data revenue) declined 3% QoQ to
INR19b. Traditional EBITDA was down 7% QoQ to INR5.3b. This is attributed to
high one-off churn on the back of a big client loss.
n
Voice revenue at INR14.3b declined 6.4% QoQ (-20% YoY), 6% below
estimates. This was mainly on account of lower business from Tata
Teleservices. However, voice EBITDA stood at INR1b, up 18% QoQ (-10% YoY).
n
Capex for 2QFY18 was high at USD75m v/s 51m last quarter, led by USD20m
Sebras-1 cable investment (connecting North and Latin America).
n
Net debt increased by USD5m to USD1.2b.
Valuation and view:
We will revisit our estimates post the earnings call. At CMP of
INR 712, the stock trades at 12x/9x on FY18/19E EBITDA. We have a
Buy
rating on
the stock with a TP of INR775.
(INR m)
FY17
FY18
2Q
3QE
42,176 42,875
-6.5
-1.7
36,531 36,824
5,645 6,051
13.4
14.1
4,837 4,999
877
699
292
354
223
707
2,134
0
-1,911 707
588
233
-30.8 33.0
1
-38
-2,500 512
291
512
-66.0 2,777.4
0.7
1.2
v/s est
2QFY18E
(%)
1,76,197 1,71,917 43,857
-4
-14.3
-2.4
-2.7
1,52,138 1,48,070 37,993
-4
24,059 23,847 5,863
-4
13.7
13.9
13.4
1bps
18,658 19,444 4,999
-3
3,672
3,023
711
23
3,603
1,397
345
-15
5,332
2,777
498
-55
10,633 2,134
0
-5,301
643
498
-484
2,364
1,620
164
258
-44.6
252.1
33.0
-77
-33
-28
-104
-7,588
-944
361
-792
2,843
1,847
361
-20
14
542.2
-35.0
-57.8
1.6
1.1
0.8
-13bps
Source: MOSL, Company
FY17
FY18E
Cons. Quarterly Earning Model
Y/E March
Net Sales
YoY Change (%)
Total Expenditure
EBITDA
Margins (%)
Depreciation
Interest
Other Income
PBT before EO expense
Exceptional expense
PBT
Tax
Rate (%)
Minority Int & P/L of Asso. Cos.
Reported PAT
Adj PAT
YoY Change (%)
Margins (%)
1Q
44,569
-14.0
37,849
6,720
15.1
4,660
933
954
2,081
0
2,081
734
35.3
-6
1,353
1,353
212.5
3.0
2Q
45,091
-12.1
38,466
6,625
14.7
4,644
960
728
1,750
0
1,750
899
51.4
-5
856
856
1,321.3
1.9
3Q
43,601
-14.5
37,910
5,691
13.1
4,677
999
909
924
0
924
923
99.9
-17
18
18
-91.9
0.0
4Q
42,937
-16.5
37,914
5,024
11.7
4,677
780
1,012
578
10,633
-10,055
-192
1.9
-49
-9,815
616
136.0
1.4
1Q
43,100
-3.3
37,514
5,586
13.0
4,447
761
444
822
0
822
461
56.0
39
322
322
-76.2
0.7
4QE
43,765
1.9
37,201
6,564
15.0
5,161
687
308
1,024
0
1,024
338
33.0
-35
721
721
17.1
1.6
26 October 2017
10

25 October 2017
Q2FY18 Results Update | Sector: Healthcare
GSK Pharma
Neutral
BSE SENSEX
33,043
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
Avg Val, INRm
Free float (%)
S&P CNX
10,295
GLXO IN
Revenue impacted by GST rollout; margins surprise positively
85
n
GSK Pharma’s (GLXO) 2QFY18 sales increased 6.8% YoY (+43% QoQ) to
206.9 / 3.2
INR8.4b (5% miss). Other income came in lower at INR96m v/s INR343m in
3,000 / 2,309
2QFY17. EBITDA increased significantly by 54.3% YoY to INR1.9b (+25% v/s
-4/-15/-35
our est.), primarily led by a decline in other expense (as % of sales) by
30.5
~600bp. EBITDA margin stood at 23% (+710bp YoY). Adjusted PAT increased
25.0
CMP: INR2,423
TP: INR2,500(+3%)
Financials & Valuations (INR b)
2017 2018E
Y/E Mar
Net Sales
29.3
30.5
EBITDA
3.5
4.1
PAT
2.9
3.7
EPS (INR)
34.4
44.2
Gr. (%)
-22.2
28.6
BV/Sh (INR)
236.9
200.6
RoE (%)
14.5
22.0
RoCE (%)
13.9
20.2
P/E (x)
71.1
55.3
P/BV (x)
10.3
12.2
2019E
34.2
5.6
4.7
54.9
24.3
175.0
31.4
29.2
44.5
14.0
n
n
Estimate change
TP change
Rating change
n
n
~32% YoY to INR1.3b (+3% v/s our est.), including INR52m of one-time
income from the sale of properties.
Significant recovery in inventory post GST:
GLXO saw a huge improvement
on the revenue front sequentially (up 43% QoQ), primarily due to a recovery
in inventory to pre-GST level. Notably, GSK lost around two weeks of sales in
1QFY18. Although revenue increased YoY, it was impacted by 6% due to
price deflation led by GST (but profit-level impact of GST was neutral). After
adjusting for price deflation, margins stood at ~22%. With inventory levels
now back to near pre-GST levels, the company expects EBITDA margin to be
in the range of 18-20% over the medium term.
New plant commissioning expected in CY18:
GLXO’s manufacturing plant at
Vemgal is nearing completion (expected to be commissioned by mid-CY18).
GLXO guided for capex of INR5b for FY18. This will be funded by internal
accruals and Thane land sale to Oberoi Realty (sale value: INR5.5b).
Operating leverage to drive margin improvement:
The sharp improvement
in EBITDA margin was driven by a strong sequential recovery in sales growth.
GLXO is planning to diversify its product portfolio (currently >90% of top line
comes from acute business). As per AIOCD, FDC-related market after a few
quarters posted growth of 1.4% YoY. Secondary sales of GLXO rose by 4.9%,
while market secondary sales increased 1% for 2QFY18.
Valuation and view:
We believe GLXO has strong parent support, superior
brand portfolio (competitive advantage), high payout ratio (>100%) and
industry-leading return ratios (RoCE of ~30%). At CMP GLXO trades at 55x
FY18E and 45x FY19E. a huge premium to the sector and hence maintain our
Neutral rating with a target price of INR2,500 @ 45x FY19E PER.
26 October 2017
11

25 October 2017
2QFY18 Results Update | Sector: Automobiles
Exide Industries
Buy
BSE SENSEX
33,043
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
Avg Val, INRm
Free float (%)
S&P CNX
10,295
EXID IN
EBITDA margin below estimate; lead inflation, mix dent performance
850
n
Volume growth in Automotive, UPS, Telecom and Infra drives revenue:
Net
184.4 / 2.9
sales increased 23.2% YoY to INR23.7b (est. of INRb21.7), driven by growth
250 / 168
in Auto OEM and replacement market (both 2Ws and 4Ws), UPS, Telecom
-4/-18/-15
456
and Infrastructure batteries. Our channel check suggests that the company
54.0
has taken a cumulative price increase of ~1-2% during the quarter, which
CMP: INR209
TP: INR254(+22%)
Financials & Valuations (INR b)
2018E 2019E
Y/E Mar
Net Sales
87.6
100.3
EBITDA
11.5
13.5
PAT
6.7
8.2
EPS (INR)
7.9
9.7
Gr. (%)
-2.6
22.2
BV/Sh (INR)
63.4
70.5
RoE (%)
12.5
13.7
RoCE (%)
12.7
14.1
P/E (x)
26.4
17.7
P/BV (x)
3.3
2.4
2020E
111.9
15.7
9.9
11.7
20.7
78.4
14.9
15.3
14.7
2.2
n
n
Estimate change
TP change
Rating change
n
also aided growth. Spot lead price rose 7.6% QoQ (+19% YoY) to INR149.6
per kg. In October, lead price grew 21% YoY, and 9.5% v/s 1QFY18.
EBITDA margin at nine-quarter low led by inflation and mix impact:
EBITDA
margin contracted 250bp YoY (-290bp QoQ) to 12.5% (est. of 15.1%), largely
led by lead inflation and product mix impact (higher proportion of OE sales
in Automotive). However, the decline in staff cost and other expenses by
60bp YoY and 260bp YoY, respectively, restricted further margin contraction.
EXID reported an exceptional item of INR0.4b toward the settlement of the
trademark-related dispute with Exide Technologies, USA. Lower other
income (-40% YoY, +5% QoQ) and weak operating performance led to a
10.3% YoY decline in adjusted PAT to INR1.6b (est. of INR2.0b).
Management indicated that growth momentum in Automotive and
Motorcycle batteries was healthy, while demand for Telecom, UPS and
Other infrastructure segments was also good. EXID is focusing on cost-
control initiatives and technology upgradation to improve profitability.
Valuation and view:
We downgrade our EPS for FY18E by 11.5% and for
FY19E by 10.1% to factor in higher lead price and tax rate. We factor in
revenue/EBITDA/PAT CAGR of 13.7%/12.9%/12.8%. The stock trades at
26.4x FY18E and 17.7x FY19E adj. for Insurance value of ~INR38/share.
Maintain
Buy
with a TP of INR254 (valuing core business at 20x Sep-19E EPS,
20% discount to 25x target multiple for AMRJ + Insurance business value).
FY18E
FY17 FY18E
FY18
2Q
3QE
4QE
2QE Var (%)
23,713 20,202 22,666 76,203 87,611 21,680
9.4
23.2
17.1
15.0
11.3
15.0
12.7
67.0
65.5
65.4
61.6
65.3
63.0 400bp
6.2
6.9
6.4
6.8
6.6
6.7
-40bp
14.3
15.5
15.9
17.3
15.1
15.2
-90bp
2,959
2,447
2,812
10,919 11,461 3,278
-9.8
12.5
12.1
12.3
14.3
13.1
15.1 -260bp
2.3
6.6
9.1
6.8
5.0
12
139
250
304
899
824
200
-30.7
21
16
7
30
60
8
597
600
607 2,063 2,367
570
4.7
2,061 2,081 2,502 9,725 9,440 2,901
-28.9
706
624
761 2,821 2,997
885
-23.1
34.3
30.0
30.4
29.0
31.8
30.5 380bp
1,630 1,457 1,741 6,904 6,728 2,016
-19.1
-10.3
-3.8
5.7
10.6
-2.5
11.2
S/A Quarterly Performance
Y/E March
(INR Million)
Net Sales
Growth YoY (%)
RM(%)
Employee cost (%)
Other Exp(%)
EBITDA
EBITDA Margin(%)
Change (%)
Non-Operating Income
Interest
Depreciation
PBT after EO Exp
Tax
Effective Tax Rate (%)
Adj. PAT
Change (%)
E: MOSL Estimates
1Q
20,103
11.3
62.4
6.4
15.6
3,142
15.6
18.4
150
17
491
2,784
824
29.6
1,961
25.9
FY17
2Q
3Q
4Q
19,253 17,253 19,717
10.4
12.6
11.7
61.2
60.0
62.7
6.9
7.4
6.6
16.9
19.3
17.6
2,891
2,296
2,578
15.0
13.3
13.1
13.3
-4.0
-3.2
231
350
255
6
46
0
506
522
544
2,611 2,079 2,289
793
564
641
30.4
27.1
28.0
1,818 1,515 1,648
17.2
9.4
-6.0
1Q
21,029
4.6
62.9
6.8
14.9
3,243
15.4
3.2
132
16
563
2,796
906
32.4
1,890
-3.6
26 October 2017
12

RESULTS
FLASH
25 October 2017
Results Flash | Sector: Staffing
Quess Corp
Buy
BSE SENSEX
33,043
S&P CNX
10,295
CMP: INR850
TP: INR990
We will revisit our estimates
post earnings call/management
interaction.
Strong revenue growth – uniformly spread across business segments
n
Quess Corp’s 25.2% YoY growth to INR12.7b was 4% ahead of our estimate of
INR12.2b (+20% YoY). Strong YoY growth was driven uniformly across business
Conference Call Details
th
segments.
Date:
26 October 2017
Time:
3:00pm IST
n
People & Services (54% of revenue) grew by 17% YoY; Global Technology
Solutions (31% of revenue) grew by 40% YoY; Integrated Facility Management
Dial-in details:
(10% of revenue) grew by 26% YoY; and Industrials (6% of revenue) grew by
+91-22-3960 0644
31% YoY.
EBITDA margin down 20bp YoY; PAT boosted by 80JJAA benefits
n
EBITDA margin of 5.2% was down 20bp YoY, and below our estimate of 5.4%.
Financials & Valuations (INR b)
2018E 2019E 2020E
Y/E Mar
While the margin expanded in P&S (+30bp YoY), GTS (+10bp YoY) and IFM
Net Sales
60.1
72.1
86.6
(+100bp YoY), it contracted in Industrials business (to 4.7% in 2QFY18 v/s 9.8%
EBITDA
3.5
4.5
5.7
in the previous year).
NP
2.2
3.1
4.4
n
Profitability in Industrials business has ranged from 4-5% over the last three
EPS (INR)
19.1
27.8
39.2
quarters on account of the realignment.
EPS Gr. (%)
68.6 166.3 177.9
n
PAT at INR1.4b was much higher than our estimate of INR329m because of a
BV/Sh. (INR)
170.9 198.7 237.9
deduction under Section 80JJAA of the Income Tax Act. The deduction taken
RoE (%)
15.6
15.0
17.9
during the quarter for FY17 was to the tune of INR675m.
RoCE (%)
11.8
12.6
15.5
P/E (x)
44.6
30.6
21.7
Acquired 70% stake in Vedang Cellular Services
P/BV (x)
5.0
4.3
3.6
n
Quess Corp announced the acquisition of Vedang Cellular Services, which is
among the top five players in the Telecom Network Optimization space. The
acquisition complements Quess’ existing capabilities of Telecom Network
O&M.
n
Vedang had revenue of INR782m as of FY17 (2% of Quess’ total revenue) and
has a margin profile trending at 11-12%. The acquisition would hence be
accretive to Quess’ margins to the tune of 10bp.
Strong broad-based revenue performance; strengthens telecom
capabilities through an acquisition
Consolidated - Quarterly
Y/E March
Net Sales
YoY Change (%)
Total Expenditure
EBITDA
Margins (%)
Depreciation
Interes t
Other Income
PBT before EO expense
Extra-Ord expens e
PBT
Tax
Rate (%)
Minority Interes t & Profit/Los s of As s o. Cos .
Reported PAT
Adj PAT
YoY Change (%)
Margins (%)
E: MOSL Es timates
FY17
1Q
2Q
3Q
9,910 10,177 10,266
35.7
26.9
13.3
9,382 9,626
9,703
528
551
563
5.3
5.4
5.5
60
69
69
92
98
121
7
57
60
382
441
432
0
0
0
382
441
432
135
140
126
35.4
31.7
29.2
0
0
-4
247
301
311
247
301
311
37.1
65.9
80.0
2.5
3.0
3.0
FY18
4Q
1Q
2Q
3QE
11,221 11,881 12,740 17,749
12.6
19.9
25.2
72.9
10,634 11,246 12,075 16,644
586
635
665
1,105
5.2
5.3
5.2
6.2
65
67
74
110
153
161
151
40
29
34
167
10
396
441
606
965
0
0
0
0
396
441
606
965
116
115
-802
751
29.4
26.2 -132.3
77.8
3
-6
2
2
277
331 1,406
212
277
331 1,406
212
-20.9
34.1 366.8
-31.6
2.5
2.8
11.0
1.2
FY17
4QE
17,749
58.2
16,644
1,105
6.2
110
40
10
965
0
965
751
77.8
2
212
212
-23.3
1.2
41,574
21.0
39,346
2,228
5.4
263
465
153
1,652
0
1,652
518
31.3
-1
1,136
1,136
28.4
2.7
FY18E
60,118
44.6
56,608
3,510
5.8
361
392
220
2,978
0
2,978
816
27.4
0
2,162
2,162
90.4
3.6
(INR m)
Est.
2Q Var. (% / bp)
12,212
4.3
20.0
518
11,551
5
662
0
5.4
-20
70
6
180
-16
35
377
447
36
0
447
36
118
-780
26.4
-15,868
0
329
328
329
328
9.2
35,759
2.7
834
26 October 2017
13

RESULTS
FLASH
PI Industries
BSE SENSEX
33,043
S&P CNX
10,295
25 October 2017
Results Flash | Sector: Others
CMP: INR782
n
n
TP: INR894 (+14%)
Buy
We will revisit our estimates
post earnings call/management
interaction.
Revenue below estimate; EBITDA and PAT beat estimates
PI’s revenue declined 1.9% YoY to INR5,611m (est. INR6,256m) in 2QFY18.
EBITDA margin shrunk 60bp YoY to 21.8% (est. of 17.4%) in 2QFY18, led by
390bp YoY contraction in gross margin to 48.1% and 160bp rise in employee
expense to 10.8% of net sales. EBITDA declined 5% YoY to INR1,222m (est. of
INR1,091m).
Consequently, adj. PAT declined 21% to INR803m (est. INR759m) from
INR1,014m in 2QFY17.
The decline in revenue is partly attributable to the change in accounting
standards; excise in 2QFY17 was reported as an expense item above EBITDA;
however, it is net off from gross sales in 2QFY18. Excise stood at INR279m in
2QFY17 (“our estimate in 2QFY18 was flat).
Conference Call Details
Date:
27 October 2017
Time:
5:00pm IST
Dial-in details:
+91-22-3938 1071
n
n
th
Financials & Valuations (INR b)
2017 2018E
Y/E Mar
Sales
23.8
25.3
EBITDA
5.5
5.7
NP
4.6
4.2
Adj. EPS (INR)
33.4
30.4
EPS Gr. (%)
46.4
-8.9
BV/Sh (INR)
118.3
142.0
RoE (%)
32.8
23.4
RoCE (%)
31.0
23.0
Valuations
P/E (x)
23.4
25.7
P/BV (x)
6.6
5.5
EV/EBITDA (x) 19.2
17.8
2019E
28.6
Key questions for management
6.7
n
Outlook for global agri chemical business and its impact on CSM business.
4.9
35.8
n
Reason for sharp contraction in gross margin and outlook going forward.
17.6
169.8
Valuation and view:
We will revisit our estimates and rating post the earnings call.
22.9
Based on our current estimates, at CMP of INR782, the stock trades at 26x/22x P/E
22.9
on FY18/FY19E EPS. We have a
Buy
on the stock.
21.9
4.6
15.2
26 October 2017
14

25 October 2017
Q2FY18 Results Update | Sector: Technology
MindTree
Neutral
BSE SENSEX
33,043
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
Avg Val, INRm
Free float (%)
S&P CNX
10,295
MTCL IN
In-line operating performance; outlook for gradual recovery
168
n
Adjusted profitability marginally ahead:
MTCL’s 2Q revenue growth of 2.1%
85.2 / 1.3
QoQ CC (est. of +2.2%) and dollar revenue growth of 3% QoQ to USD206m
566 / 400
(est. of USD207m) were in line with our expectations. EBITDA margin
6/-6/-6
expanded 50bp QoQ to 11.6% (est. of 11.8%), but was 12.6% excluding one-
299.1
time restructuring expense in Europe. PAT, however, was INR1.25b, ahead
86.4
CMP: INR507
TP: INR480(-5%)
Financials & Valuations (INR b)
2017 2018E
Y/E Mar
52.4
54.4
Net Sales
7.2
6.6
EBITDA
4.2
4.4
PAT
24.9
28.5
EPS (INR)
-30.6
14.7
Gr. (%)
153.0
156.8
BV/Sh (INR)
16.8
17.3
RoE (%)
20.1
18.1
RoCE (%)
20.4
17.8
P/E (x)
3.3
3.2
P/BV (x)
2019E
61.7
8.6
5.5
33.6
17.6
172.3
20.4
24.0
15.1
2.9
n
n
n
Estimate change
TP change
Rating change
of our estimate of INR1.09b, mainly due to write-back of INR303m liability
for Bluefin earn-out, which boosted other income to INR598m (est. of
INR360m).
Growth stars – Bluefin, RIMS:
Revenue from Bluefin grew 22% QoQ (partly
aided by appreciation of GBP), and the segment also turned a profit during
the quarter. IMS too grew 6.6% QoQ, continuing its strong traction, and
Digital grew 3.6% QoQ (13.8% YoY). US was flat due to a decline in
Magnet360 subsidiary – which was weak for second consecutive quarter.
Outlook for a sanguine 2H:
With deals ramping up and pipeline up 20%+
over the previous quarter, MTCL retained its outlook of high-single-digit
dollar revenue growth for FY18, which implies a steady 2H at the very least,
despite the weak seasonality. It also expects profitability to continue inching
up on the base of reported margins of 2Q.
Valuation view:
Our operational performance estimates have not changed
post the in-line numbers and comments of gradual improvement, which we
model on both revenues and margins. However, MTCL has struggled with its
two bets of Magnet360 and Bluefin – which together had revenue rate of
USD71m at the time of acquisition, and are now down to ~USD55m, despite
a pick-up in Bluefin this quarter. This has dragged the margins too. We
expect MTCL to grow its USD revenue/earnings at a CAGR of 8.9/16.1% over
FY17-19. Our price target of INR480 discounts forward earnings by 13x, and
implies 5% downside. Maintain
Neutral
26 October 2017
15

RESULTS
FLASH
25 October 2017
Results Flash | Sector: Technology
Tata Elxsi
Buy
BSE SENSEX
33,043
S&P CNX
10,295
CMP: INR859
n
TP: INR1004 (+17%)
We will revisit our estimates
post earnings call/management
interaction.
Revenue, EBITDA in line;
PAT marginally above estimate
TELX’s revenue grew 12.5% YoY to INR3,422m (est. of INR3,488m) in 2QFY18,
led by software development & services (+12% YoY) and system integration
(+16% YoY) businesses.
EBITDA margin shrunk 90bp YoY to 24.6% (est. of 25.3%) on account of higher
employee expenses (+110bp to 54.5% of net sales). EBITDA rose 8% YoY to
INR840m (est. of INR882m).
Other income stood at INR89m (est. of INR12m) in 2QFY18 v/s -INR26m in
2QFY17 due to exchange losses.
Consequently, PAT grew 25.9% YoY to INR572m (est. of INR541m).
n
Financials & Valuations (INR b)
2017 2018E
Y/E Mar
Sales
12.3
14.3
EBITDA
2.9
3.4
NP
1.8
2.1
Adj. EPS (INR)
28.1
33.8
EPS Gr. (%)
13.2
20.2
BV/Sh (INR)
89.8
111.5
RoE (%)
37.1
33.6
RoCE (%)
37.1
33.6
Payout (%)
34.2
35.6
Valuations
P/E (x)
30.5
25.4
P/BV (x)
9.6
7.7
EV/EBITDA (x) 17.4
14.3
Div. Yield (%)
0.9
1.2
2019E
16.6
4.0
2.5
40.2
18.8
136.6
32.4
32.4
37.5
n
n
Key questions for management
n
Development on the ‘part payment for effort and part for success of product’
revenue sharing model for new deals.
n
Employee strength and hiring in the quarter. Reasons for higher employee cost.
n
New customer additions in the faster growing segments of Transportation and
21.4
Broadcast.
6.3
11.7
1.5
Valuation and view:
We will revisit the estimates post our interaction with
management. Based on our current estimates, at CMP of INR859, the stock trades
at 25x/21x P/E on FY18/FY19E EPS estimates. We have a
Buy
rating with a target
price of INR1,004.
26 October 2017
16

September 2017 Results Preview | Sector: Healthcare
Biocon
Bloomberg
Equity Shares (m)
M. Cap. (INR b)/(USD b)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
BIOS IN
600.0
207 / 3
424 / 268
4 / -13 / -4
n
n
n
CMP: INR344
n
Financial Snapshot (INR Billion)
y/e march
2017 2018E 2019E 2020E
Sales
EBITDA
NP
EPS (INR)
EPS Gro. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
33.7
4.3
18.1
0.7
35.4
3.9
17.0
0.7
24.3
3.5
12.5
1.0
18.4
3.1
9.7
1.4
40.8
11.4
6.0
10.2
31.8
80.6
12.3
9.4
50.6
12.2
5.8
9.7
-4.8
87.5
11.1
8.8
63.5
16.3
8.5
14.2
45.9
14.5
14.9
75.2
20.4
11.2
18.7
32.0
16.9
17.6
97.5 110.8
n
Biocon’s revenue is likely to post strong growth of 16.4% YoY to
INR10.9b, on the back of 15% YoY growth in Small Molecules
business (72% of sales). Biologics and Branded Formulation
business are expected to post significant growth of 30% and 25%
YoY, respectively.
EBITDA is expected to increase ~17% YoY to INR2.6b, with EBITDA
margins at 24%.
We expect PAT to decline to INR1.4b, primarily due to an increase
in depreciation due to commencement of Malaysian facility.
Key growth drivers for FY18E will be 1) commercialization and
ramp-up of the insulin plant in Malaysia, 2) ramp-up in CRO
division, 3) contribution from API/immuno-suppressants supplies to
partners and 4) branded formulations in India. However, capex for
long-term initiatives is likely to exert pressure on profitability and
return ratios in the near term.
The recent run-up in the stock price is primarily led by positive
developments in the Biosimilars portfolio. Although the progress is
impressive, there are still uncertainties that cap the upside
potential. In the near term, commissioning of the Malaysia plant
would exert pressure on profits. Maintain Sell with a TP of INR330
@ 23x FY19E EPS.
TP: INR330 (-4%)
Sell
Key issues to watch out
Ø
Update on Middle-East problems.
Ø
Progress on Rh-Insulin/Glargine in Europe/US and other out-licensing
opportunities.
Y/E March
Quarterly Performance Consolidated
1Q
9,920
22.4
7,289
2,631
26.5
661
57
409
2,322
552
23.8
104
1,666
34.6
16.8
Net Sales
YoY Change (%)
Total Expenditure
EBITDA
Margins (%)
Depreciation
Interest
Other Income
PBT
Tax
Rate (%)
Minority Interest
PAT
YoY Change (%)
Margins (%)
FY17
2Q
3Q
9,400
10,290
19.6
24.2
7,150
7,680
2,250
2,610
23.9
25.4
680
710
70
90
520
630
2,020
2,440
420
550
20.8
22.5
130
180
1,470
1,710
51.5
66.0
15.6
16.6
4Q
9,250
-2.1
7,430
1,820
19.7
730
50
653
1,693
110
6.5
150
1,433
-56.6
15.5
1Q
9,337
-5.9
7,416
1,921
20.6
988
161
540
1,312
376
28.7
123
813
-51.2
8.7
FY18E
2QE
10,939
16.4
8,313
2,625
24.0
1,000
68
500
2,057
494
24.0
175
1,389
-5.5
12.7
FY17
3QE
12,033
16.9
9,145
2,888
24.0
1,050
68
500
2,270
545
24.0
175
1,550
-9.3
12.9
4QE
17,948
94.0
13,552
4,397
24.5
2,034
-61
460
2,884
714
24.8
439
1,731
20.8
9.6
(INR Million)
FY18E
40,787
18.2
29,421
11,366
27.9
2,772
260
0
8,334
1,616
19.4
760
5,958
28.3
14.6
50,603
24.1
38,426
12,177
24.1
5,072
236
2,000
8,870
2,129
24.0
912
5,829
-2.2
11.5
26 October 2017
17

September 2017 Results Preview | Sector: Capital Goods
CG Consumer Electricals
Bloomberg
Equity Shares (m)
M. Cap. (INR b)/(USD b)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
CROMPTON IN
626.8
135 / 2
246 / 135
0 / -7 / 15
CMP: INR216
n
n
n
TP: INR240 (+11%)
Buy
Financial Snapshot (INR b)
Y/E March
2017 2018E 2019E 2020E
Net Sales
EBITDA
Adj. PAT
EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div Yield (%)
* Consolidated
46.2
25.1
28.0
0.7
42.9
18.6
26.6
0.8
34.3
15.3
21.6
1.5
28.2
12.5
18.2
1.8
39.8
4.9
2.9
4.7
146.1
8.6
76.4
32.5
32.7
40.7
5.1
3.2
5.0
7.6
11.6
49.7
28.0
33.0
45.9
6.2
3.9
6.3
25.2
14.2
48.8
30.1
50.0
52.0
7.2
4.8
7.7
21.7
17.2
48.9
34.7
50.0
We expect sales to register muted growth of 1% YoY on account of
5-7% hit on net sales post GST.
We expect operating profit of INR990m in 2QFY18, an
improvement of 1% YoY, and stable EBITDA margin of 10.7%.
Net profit is expected to be INR595m in 2QFY18, as against
INR554m in 2QFY17, implying growth of 7.4%.
Key issues to watch
Ø
Ø
Ø
Impact on operating performance on account of the destocking
measures taken by dealers amid GST implementation.
Details of segmental sales, as CROMPTON intends to improve sales of its
premium category products.
Ad spends incurred by the company during the quarter, as CROMPTON
intends to position itself as an electrical consumer durables brand as
against its current positioning as a fans brand.
Crompton: Quarterly Estimates (Standalone)
Y/E March
Sales
Change (%)
EBITDA
Change (%)
As of % Sales
Depreciation
Interest
Other Income
PBT
Tax
Effective Tax Rate (%)
Adjusted PAT
Change (%)
Extra-ordinary Income (net)
Reported PAT
Change (%)
1Q
10,962
1,573
14.4
28
180
34
1,400
465
33.2
935
-
935
FY17
2Q
3Q
8,900
8,889
9.7
974
993
19.9
10.9
11.2
27
26
161
162
42
50
827
855
273
33.0
554
-
554
281
32.9
574
35
-
574
39
4Q
10,762
7.4
1,386
9.0
12.9
29
153
69
1,273
388
30.5
885
16.6
(20.7)
864
29.8
1QE
10,554
-3.7
1,294
-17.8
12.3
32
162
97
1,198
395
33.0
802
(14.2)
-
802
(14.2)
FY18
2QE
3QE
9,000
9,550
1.1
7.4
990
1,150
1.7
15.8
11.0
12.0
30
30
155
150
80
80
885
1,050
290
32.8
595
7.4
-
595
7.4
350
33.3
700
22.0
-
700
22.0
4QE
11,308
5.1
1,673
20.7
14.8
24
135
69
1,582
470
29.7
1,112
25.7
-
1,112
28.7
(INR Million)
FY17
39,759
119.5
4,902
134.0
12.3
110
655
195
4,331
1,399
32.3
2,932
138.7
2,907
166.9
FY18
40,667
2.3
5,107
4.2
12.6
116
658
326
4,659
1,505
32.3
3,154
7.6
3,154
8.5
26 October 2017
18

September 2017 Results Preview | Sector: Capital Goods
Cummins India
Bloomberg
Equity Shares (m)
M. Cap. (INR b)/(USD b)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
KKC IN
277.2
255 / 4
1096 / 748
3 / -10 / -14
n
CMP: INR920
n
TP: INR1170 (+27%)
Buy
Financial Snapshot (INR b)
Y/E March
2017 2018E 2019E 2020E
Net Sales
EBITDA
Adj. PAT
EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div Yield (%)
34.7
6.8
31.9
1.5
33.2
6.3
28.5
1.6
26.3
5.8
22.1
2.0
22.7
5.3
18.6
2.3
50.8
8.0
7.3
26.5
-2.6
21.2
20.0
52.8
56.0
8.9
7.7
27.7
4.3
19.7
18.8
52.8
65.0
11.5
9.6
35.0
26.6
22.8
21.8
52.8
74.4
13.5
11.2
40.5
15.6
24.3
23.3
52.8
n
n
n
135.0 145.7 159.0 174.6
We expect revenue to increase 10% YoY, supported by growth in
the power generation (13% YoY) and distribution & spares (17%
YoY) segments. The industrial segment is expected to register 9%
YoY growth, led by weak demand during the monsoon season.
Pick-up in the domestic demand environment and various pricing
actions taken by KKC would help strengthen its market leadership
position in the MHP and HHP segments.
Domestic revenue should grow 11% YoY in 2QFY18.
We expect export revenue to improve 7% YoY to INR4.7b in
2QFY18, supported by a favorable base of 2QFY17.
EBITDA margin is expected to improve 40bp YoY to 16%; net profit
is expected to decline 1.5% YoY to INR1.9b. Maintain
Buy.
Key issues to watch
Ø
Performance of the exports segment, considering poor demand
conditions in LatAm, Europe and China.
KKC: Quarterly Performance (Standalone)
Y/E March
Sales
Change (%)
EBITDA
Change (%)
As of % Sales
Depreciation
Interest
Other Income
PBT
Tax
Effective Tax Rate (%)
Adjusted PAT
Change (%)
Reported PAT
Change (%)
1Q
12,590
-3.9
2,063
-6.9
16.4
206
21
416
2,252
440
19.5
1,812
(14.3)
1,812
(14.3)
FY17
2Q
12,790
7.1
1,990
-1.4
15.6
209
43
692
2,430
461
19.0
1,969
(0.5)
1,969
(0.5)
3Q
13,550
19.0
2,265
31.1
16.7
225
55
461
2,446
466
19.0
1,981
11.3
1,981
11.3
4Q
11,844
11.1
1,700
-4.9
14.4
208
49
511
1,954
369
18.9
1,585
(5.1)
1,585
(5.1)
1Q
13,408
6.5
1,953
-5.4
14.6
208
42
583
2,286
625
27.4
1,660
(8.4)
2,222
22.6
FY18
2QE
14,050
9.9
2,250
13.1
16.0
250
40
550
2,510
570
22.7
1,940
(1.5)
1,940
(1.5)
3QE
15,400
13.7
2,850
25.8
18.5
250
40
550
3,110
620
19.9
2,490
25.7
2,490
25.7
4QE
13,302
12.3
1,992
17.2
15.0
272
46
502
2,176
489
22.5
1,687
6.4
1,687
6.4
FY17
(INR Million)
FY18E
56,048
10.4
8,934
7.0
15.9
981
168
2,185
9,970
2,305
23.1
7,666
4.3
7,666
4.3
50,773
7.8
8,018
14.6
15.8
848
168
2,080
9,082
1,736
19.1
7,346
(2.8)
7,346
(2.8)
26 October 2017
19

September 2017 Results Preview | Sector: Financials
Equitas Holdings
Bloomberg
Equity Shares (m)
M. Cap. (INR b)/(USD b)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
Financial Snapshot (INR b)
Y/E March
2017 2018E
NII
8.7
9.3
OP
3.7
2.0
NP
1.7
0.6
EPS (INR)
5.0
1.7
EPS Gr. (%)
-18.5 -66.3
BV/Sh. (INR)
66
68
RoE (%)
9.5
2.5
RoA (%)
2.2
0.6
Valuations
P/E(X)
29.8 88.5
P/BV (X)
2.3
2.2
EQUITAS IN
337.8
51 / 1
190 / 139
-11 / -16 / -30
n
2019E
11.5
4.1
2.0
6.1
256.5
73
8.6
1.7
24.8
2.1
2020E
14.4
6.4
3.4
10.0
65.3
82
12.9
2.0
15.0
1.8
CMP: INR152
n
TP: 212 (+39%)
Buy
n
n
n
We expect NII growth of 13% YoY due to moderation in loan
growth as the company slows down its MFI book, and
recalibration in liability side (sufficient availability of funds). Loan
growth is expected to be ~11% YoY.
NIM is expected to expand ~10bp QoQ, driven by continued CASA
traction, leading to decline in cost of funds, supported by bank
borrowings being grandfathered and largely replaced by bulk
deposits.
Opex is expected to grow by ~63% YoY (v/s 14% YoY growth in
total income), driven by greater employee and other expenses as
a result of liability-side branch set-up and hiring.
MFI collection trends in Tamil Nadu, Maharashtra and Karnataka,
and asset quality of UCV portfolio remain key monitorables. We
factor in provisions of INR230m during the quarter.
The stock trades at 2.1x FY19E BV. Maintain Buy
Key issues to watch for
Ø
Update on the transition progress.
Ø
Commentary on growth and asset quality in MFI.
Quarterly Performance
Net Interest Income
% Change (Y-o-Y)
Other Income
Net Income
Operating Expenses
Operating Profit
% Change (Y-o-Y)
Other Provisions
Profit before Tax
Tax Provisions
Net Profit
% Change (Y-o-Y)
Operating Parameters
AUM Growth (YoY %)
NIM (Cal, %)
Deposit Growth (%)
Loan Growth (%)
CD Ratio (%)
Asset Quality
Gross NPA (INR b)
E: MOSL Estimates
1Q
2,043
62.7
230
2,273
1,134
1,139
52.3
176
963
352
612
62.6
FY17
2Q
2,006
34.8
287
2,293
1,408
885
18.2
149
736
273
463
17.8
3Q
2,291
46.8
418
2,709
1,663
1,046
27.5
340
706
256
449
3.5
4Q
2,214
29.9
205
2,419
1,945
474
-45.8
365
109
40
69
-85.3
1Q
2,160
5.7
820
2,980
2,286
694
-39.1
441
253
98
156
-74.6
FY18
2QE
3QE
2,262
2,361
12.8
3.1
344
355
2,606
2,716
2,288
2,328
318
388
-64.0
-62.9
230
240
88
148
31
51
58
97
-87.5
-78.4
FY17
4QE
2,513
13.5
506
3,019
2,382
638
34.4
251
387
123
264
282.9
8,666
44.2
1,140
9,806
6,150
3,656
14.6
1,029
2,627
922
1,705
2.1
(INR m)
FY18
9,296
7.3
2,026
11,322
9,284
2,038
-44.2
1,162
877
302
574
-66.3
15.2
42.2
14.1
26.5
15.9
17.4
774.6
1,450
15.1
15.1
309.6
2,060
14.5
6.9
268.1
3,000
14.6
220.9
11.2
268.1
3,250
14.7
38.9
11.1
270.9
3,400
14.7
21.6
244.5
3,517
15.1
15.1
309.6
14.6
38.9
21.6
244.5
918
1,437
26 October 2017
20

September 2017 Results Preview | Sector: Retail
Jubilant Foodworks
Bloomberg
Equity Shares (m)
M. Cap. (INR b)/(USD b)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
JUBI IN
65.8
98 / 1
1490 / 761
8 / 30 / 37
CMP: INR1,482 TP: INR960 (-35%)
n
n
n
n
Sell
Financial Snapshot (INR b)
Y/E March
2017 2018E 2019E 2020E
Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh.(INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
148.1 100.1
12.1
40.0
0.2
11.1
31.4
0.2
71.5
10.0
24.9
0.3
54.3
8.6
20.1
0.2
25.8
2.4
0.6
10.0
-32.1
8.2
8.4
25.0
28.8
3.0
1.0
14.8
48.0
11.1
11.6
20.3
32.8
3.8
1.4
20.7
40.0
14.0
14.7
21.7
38.0
4.5
1.8
27.3
31.5
15.9
17.0
11.0
n
n
We expect JUBI’s revenue to grow by 11% YoY in 2QFY18.
SSSG is likely to be 6% for the quarter.
We anticipate addition of 12 Dominos stores this quarter.
We expect EBITDA margin to contract by 50bp YoY to 9.2%, and
EBITDA to grow by 5.3% YoY to INR595m.
We estimate PAT to decline by 0.3% to INR215m, led by higher
depreciation YoY.
The stock trades at 71.5x FY19E EPS of INR20.7. Maintain Sell.
122.1 133.0 148.3 172.0
Key issues to watch for:
Ø
Demand outlook for QSR and Pizza space, as well as
competition.
Ø
Benefits of cost-saving efforts.
Ø
Performance of
Dunkin Donuts
and margin guidance.
Quarterly Standalone Performance
Y/E March
No of Stores
LTL Growth (%)
Net Sales
YoY Change (%)
EBITDA
EBITDA Growth %
Margins (%)
Depreciation
Other Income
PBT
Tax
Rate (%)
Adjusted PAT
YoY Change (%)
E: MOSL Estimates
1Q
1049
-3.2
6,089
6.7
577
-14.2
9.5
326
31
282
92
32.7
190
-31.1
FY17
2Q
1081
4.2
6,655
13.3
643
6.4
9.7
366
43
320
104
32.5
216
-1.3
3Q
1107
-3.3
6,588
3.9
641
-11.9
9.7
381
35
295
95
32.2
200
-31.9
4Q
1117
-7.5
6,128
-0.9
605
-15.1
9.9
438
36
203
53
26.4
149
-46.3
1Q
1125
6.5
6,788
11.5
796
37.8
11.7
462
30
364
125
34.4
238
25.6
FY18
2QE
1137
6.0
7,388
11.0
677
5.3
9.2
403
47
321
106
33.0
215
-0.3
3QE
1150
10.0
7,577
15.0
793
23.9
10.5
419
39
413
136
33.0
277
38.5
4QE
1162
10.0
7,057
15.2
762
25.9
10.8
428
49
382
136
35.5
247
65.1
FY17
1117
-2.5
25,834
7.2
2,411
-11.3
9.3
1,554
147
1,004
345
34.3
660
-38.1
FY18E
1162
8.0
28,810
11.5
3,027
25.5
10.5
1,712
165
1,480
503
34.0
977
48.0
26 October 2017
21

September 2017 Results Preview | Sector: Financials
L&T Finance Holdings
Bloomberg
Equity Shares (m)
M. Cap. (INR b)/(USD b)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
LTFH IN
1817.2
352 / 5
213 / 81
-5 / 51 / 89
n
CMP: INR194
n
TP: INR230 (+19%)
Buy
AUM growth is expected to remain robust at 16% YoY. The
‘focused’ book is expected to grow 21% YoY.
NII should grow 20% YoY to INR11.2b. There should be slight
margin accretion coming from the mix shift toward higher-yielding
rural and housing businesses.
Expenses are likely to grow 5% YoY to INR3.5b.
Asset quality is expected to remain stable. We factor in provisions
of INR5.2b v/s INR4.6b in 1QFY18 and INR3.2b in 2QFY17.
PAT is likely to grow 30% YoY to INR3.2b during the quarter.
The stock trades at 3.9x FY18E and 3.3x FY19E BV. Maintain Buy.
Financial Snapshot (INR b)
Y/E March
NII
PPP
PAT
EPS (INR)
BV/Sh. (INR)
RoAA (%)
RoE (%)
Payout (%)
Valuation
P/E (x)
P/BV (x)
Div. Yield (%)
37.2
4.4
0.5
28.5
3.9
0.5
19.2
3.3
0.7
15.6
2.8
0.8
2017 2018E 2019E 2020E
31.4
26.7
9.2
5.2
44.3
1.3
12.4
19.8
36.7
36.2
12.4
6.8
50.5
1.6
14.7
15.3
41.2
42.0
18.4
10.1
59.2
2.1
18.5
14.8
47.1
49.2
22.7
12.5
69.8
2.3
19.4
14.7
n
n
n
n
Key issues to watch for
Ø
AUM growth trend and guidance.
Ø
Impact of RERA on the housing finance segment.
Ø
Trend in asset quality in the infrastructure finance segment.
Quarterly performance
Y/E March
Interest Income
Interest Expenses
Net Interest Income
YoY Growth (%)
Other income
Total Income
YoY Growth (%)
Operating Expenses
YoY Growth (%)
Operating Profits
YoY Growth (%)
Provisions
Profit before Tax
Tax Provisions
P/L of Associate Company
Profit after tax
YoY Growth (%)
Loan growth (%)
Cost to Income Ratio (%)
Tax Rate (%)
E: MOSL Estimates
1Q
19,965
11,557
8,408
14.7
342
8,751
13.1
3,222
3.6
5,529
19.4
2,530
2,999
951
26
2,074
8.2
18.2
36.8
31.7
FY17
2Q
20,876
11,532
9,343
17.4
540
9,883
17.7
3,327
-1.9
6,557
31.0
3,202
3,354
888
15
2,481
16.3
18.5
33.7
26.5
3Q
20,940
11,602
9,338
16.0
679
10,018
17.9
3,154
-1.4
6,864
29.7
3,282
3,582
811
(63)
2,709
28.7
10.4
31.5
22.6
4Q
21,626
11,580
10,046
20.9
755
10,801
22.3
3,063
-10.7
7,738
43.2
6,885
853
-2,286
19
3,158
34.3
14.4
28.4
-267.9
1Q
22,587
12,326
10,261
22.0
1,071
11,332
29.5
3,277
1.7
8,055
45.7
4,587
3,468
378
2
3,092
49.1
17.2
28.9
10.9
FY18
2QE
23,716
12,510
11,206
19.9
1,300
12,506
26.5
3,506
5.4
9,000
37.3
5,200
3,800
570
-
3,230
30.2
16.3
28.0
15.0
3QE
24,428
12,886
11,542
23.6
1,300
12,842
28.2
3,717
17.9
9,125
32.9
5,200
3,925
589
-
3,337
23.2
15.1
28.9
15.0
4QE
25,563
13,242
12,321
22.7
1,895
14,216
31.6
4,223
37.9
9,993
29.1
5,373
4,620
634
-
3,987
26.2
12.9
29.7
13.7
FY17
83,406
46,270
37,136
17.3
2,317
39,453
17.9
12,765
-2.8
26,688
31.2
15,899
10,789
364
-3
10,427
87
10.4
32.4
3.4
(INR m)
FY18E
96,294
50,964
45,331
22.1
5,565
50,896
29.0
14,723
15.3
36,173
35.5
20,359
15,814
2,171
2
13,641
30.8
13.7
28.9
13.7
26 October 2017
22

September 2017 Results Preview | Sector: Technology
Mphasis
Bloomberg
Equity Shares (m)
M. Cap. (INR b)/(USD b)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
MPHL IN
210.2
128 / 2
654 / 425
1 / 2 / -1
CMP: INR610
n
n
TP: INR610 (0%)
Neutral
Financial Snapshot (INR b)
Y/E Mar
2017 2018E 2019E 2020E
Sales
EBITDA
PAT
EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA(x)
Div yld (%)
15.7
2.1
10.4
2.8
15.2
2.2
10.0
3.6
14.2
2.1
8.5
3.6
12.7
2.0
7.4
4.1
60.8
9.7
8.2
38.9
12.9
292.4
13.2
12.4
43.7
64.3
9.9
8.3
40.2
3.3
274.9
14.4
13.9
54.8
71.1
11.3
8.9
43.0
7.0
292.6
16.2
15.8
51.2
78.0
12.5
9.9
48.0
11.6
311.8
16.9
16.9
52.1
n
n
n
n
n
The HP channel has seen four consecutive quarters of steady
performance. We expect this trend to continue in 2QFY18 as well.
However, pressures in Digital Risk and in one of the top clients in
Direct International are expected to partly offset this, and result
in moderation of growth.
We expect CC revenue growth of 1.9% QoQ and cross-currency
tailwinds of 50bp, leading to USD revenue growth of 2.4% QoQ.
The company is on an improving trajectory on a YoY basis as
growth would improve to 5.5% YoY in 2QFY18 from -5.4% YoY in
2QFY17.
Margins are likely to improve by 30bp QoQ to 15.2%, with an
improved revenue mix and the absence of visa expenses.
Our PAT estimate is INR2.05b (+9.7% QoQ). Higher PAT is also led
by higher other income, due to lower translation gains.
The stock trades at 15.2x FY18E and 14.2x FY19E EPS. Neutral.
Key issues to watch for
Ø
Outlook for Digital Risk given an interest rate cycle reversal.
Ø
Strategy changes and roadmap under the new leadership.
Ø
Top customer outlook and consequent impact on the Direct
International channel.
Quarterly Performance
Y/E March
Revenue (USD m)
QoQ (%)
Revenue (INR m)
YoY (%)
GPM (%)
SGA (%)
EBITDA
EBITDA Margin (%)
EBIT Margin (%)
Other income
ETR (%)
PAT
QoQ (%)
YoY (%)
EPS (INR)
Headcount
Net Additions
HP Channel rev. (%)
Fixed Price (%)
E: MOSL Estimates
1Q
224
-0.3
15,167
1.5
28.1
12.0
2,445
16.1
15.2
572
27.7
2,043
6.4
23.2
9.7
22,374
50
23.4
19.8
FY17
2Q
3Q
224
224
-0.2
-0.3
15,176
15,361
-2.6
1.3
28.1
27.8
11.8
12.3
2,463
2,396
16.2
15.6
15.3
14.7
711
617
27.5
28.5
2,166
2,044
6.0
-5.6
14.0
17.7
10.3
9.7
22,284
22,018
-90
-266
23.9
24.0
19.1
20.6
4Q
222
-0.9
15,059
-0.7
28.7
12.8
2,384
15.8
14.6
485
27.5
1,934
-5.4
0.7
8.8
21,979
-39
24.4
19.3
1Q
231
4.2
15,360
1.3
27.3
12.4
2,295
14.9
13.8
469
26.9
1,872
-3.2
-8.4
9.1
21,878
-101
25.8
21.3
FY18E
2QE
236
2.4
15,780
4.0
27.3
12.0
2,402
15.2
13.8
653
27.0
2,053
9.7
-5.2
10.0
21,113
-765
FY17
3QE
244
3.2
16,304
6.1
27.4
12.1
2,490
15.3
13.9
581
27.0
2,062
0.4
0.9
10.0
21,383
270
4QE
251
2.8
16,813
11.6
28.1
12.2
2,670
15.9
14.5
712
27.0
2,288
11.0
18.3
11.1
21,903
520
894
-3.5
60,763
-0.2
28.2
12.2
9,688
15.9
15.0
2,385
27.8
8,188
13.0
38.5
21,979
-345
(INR m)
FY18E
962
7.7
64,258
5.8
27.5
12.2
9,857
15.3
14.0
2,415
27.0
8,275
1.1
40.2
21,903
-76
26 October 2017
23

September 2017 Results Preview | Consumer
United Spirits
Bloomberg
Equity Shares (m)
M. Cap. (INR b)/(USD b)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
UNSP IN
145.3
349 / 5
2773 / 1775
-6 / 13 / -18
CMP: INR2,399 TP: INR2,600 (+8%)
n
n
Neutral
Financial Snapshot (INR b)
Y/E March
2017 2018E 2019E 2020E
Sales
EBITDA
PAT
EPS (INR)
EPS Gr. (%)
BV/Sh.(INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
89.7
18.0
35.4
69.5
12.5
32.4
46.6
9.4
24.3
37.6
7.1
19.0
85.5
9.8
3.9
26.7
87.1
21.3
11.8
0.0
87.4 100.8 116.5
10.5
5.0
34.5
29.1
18.0
12.4
0.0
13.8
7.5
51.5
49.3
20.3
15.4
0.0
17.5
9.3
63.8
23.8
18.8
17.3
0.0
n
n
We expect United Spirits’ (UNSP) revenue to decline by 1% to
INR20.3b and have built in 7% decline in volumes.
We expect EBITDA margin expansion of 150bp YoY to 13% and
EBITDA to grow 11.9% YoY to INR2.6b.
We estimate PAT of INR1.2b in 2QFY18, growth of 26.6% YoY,
mainly due to lower interest costs.
Maintain Neutral.
133.4 191.4 254.1 339.0
Key issues to watch for
Ø
Trends in volume growth, premiumization and margins.
Ø
Price trend and outlook for ENA.
Ø
Comment on highway ban impact on stores with 500m
proximity.
Quarterly Performance
Y/E March
(Standalone)
Volume Growth %
Total Revenues
YoY Change (%)
Total Exp
EBITDA
Margins (%)
EBITDA growth (%)
Depreciation
Interest
PBT From operations
Other income
PBT
Tax
Rate (%)
Adj. PAT
YoY Change (%)
E: MOSL Estimates
1Q
-0.2
20,405
10.4
18,271
2,134
10.5
24.5
261
1,030
843
241
1,084
253
23.3
831
616.1
FY17
2Q
3Q
1.0
-5.0
20,483 24,943
8.2
3.5
18,126 22,007
2,357
2,936
11.5
11.8
-18.8
15.2
332
313
885
922
1,140
1,701
283
454
1,423
2,155
445
580
31.3
26.9
978
1,575
-4.2
98.5
4Q
-8.2
20,250
-0.6
17,599
2,651
13.1
142.3
418
853
1,380
253
1,633
515
31.5
1,118
237.8
1Q
-18.9
17,818
-12.7
16,244
1,574
8.8
-26.2
321
703
550
309
859
222
25.8
637
-23.4
FY18
2QE
3QE
-7.0
0.0
20,278 26,689
-1.0
7.0
17,640 23,414
2,638
3,275
13.0
12.3
11.9
11.5
365
344
708
701
1,565
2,230
283
386
1,848
2,616
610
889
33.0
34.0
1,238
1,726
26.6
9.6
FY17
4QE
4.0
22,614
11.7
19,613
3,001
13.3
13.2
452
656
1,894
266
2,160
748
34.6
1,412
26.3
-3.1
85,476
4.4
75,650
9,826
11.5
18.8
1,323
3,690
4,813
995
5,808
1,923
33.1
3,885
87.1
FY18
-5.6
87,400
2.3
76,912
10,488
12.0
6.7
1,482
2,768
6,239
1,244
7,482
2,469
33.0
5,013
29.1
26 October 2017
24

September 2017 Results Preview | Sector: Financials
Yes Bank
Bloomberg
Equity Shares (m)
M. Cap. (INR b)/(USD b)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
YES IN
2282.4
820 / 13
383 / 218
2 / 9 / 29
n
CMP: INR359
n
TP: INR446 (+24%)
Buy
Financial Snapshot (INR b)
Y/E March
2017 2018E 2019E
NII
58.0 75.7 94.4
OP
58.4 70.4 88.8
NP
33.3 42.1 52.3
NIM (%)
3.4
3.5
3.6
EPS (INR)
14.6 18.5 22.9
EPS Gr. (%)
20.8 26.5 24.1
BV/Sh. (INR)
93.7 108.4 126.7
ABV/Sh. (INR)
78.5 101.4 116.4
RoE (%)
18.9 18.3 19.5
RoA (%)
1.8
1.8
1.8
Valuations
P/E(X)
24.6 19.5 15.7
P/BV (X)
3.8
3.3
2.8
P/ABV (X)
4.6
3.5
3.1
Div. Yield (%)
0.7
0.9
1.1
2020E
121.1
116.0
65.7
3.7
28.8
25.7
149.4
138.9
20.9
1.8
12.5
2.4
2.6
1.4
n
n
n
We expect loan growth to be significantly ahead of system
average at 35% YoY (> 5x industry growth rate) on the back of
refinancing opportunities and strong growth in retail banking.
We expect NIM to improve YoY, helped by lower cost of funds on
account of CASA inflows post demonetization and re-pricing of
bulk deposits. Consequently, NII growth is expected to be healthy
at 32% YoY, one of the best among peers.
Non-interest income growth is likely to be ~20% YoY, led by
strong growth from third-party distribution and processing fees.
We expect opex growth to be 31%, as the bank invests in
technology to leverage retail base.
Asset quality performance so far has been significantly better
than industry; we expect this trend to continue. YES trades at 2.8x
FY19E BV and 16x FY19E EPS. Return ratios also remain strong
(RoA of 1.8% and RoE of 19.5%). Maintain Buy.
Key issues to watch for
Ø
Implementation of retail strategy on assets and liabilities sides.
Ø
Performance on asset quality and quantum of loans rescheduled under
5:25 scheme/sale to ARCs.
Quarterly Performance
Net Interest Income
% Change (Y-o-Y)
Other Income
Net Income
Operating Expenses
Operating Profit
% Change (Y-o-Y)
Other Provisions
Profit before Tax
Tax Provisions
Net Profit
% Change (Y-o-Y)
Operating Parameters
NIM (Cal, %)
Deposit Growth (%)
Loan Growth (%)
CD Ratio (%)
CASA Ratio (%)
Asset Quality
Gross NPA (INR B)
Gross NPA (%)
E: MOSL Estimates
1Q
12,516
18.1
9,655
22,171
9,103
13,068
43.9
2,066
11,001
3,683
7,318
32.8
3.3
28.6
33.0
86.4
29.6
8.4
0.8
FY17
2Q
14,122
27.4
9,219
23,340
9,481
13,860
36.0
1,617
12,243
4,228
8,015
31.3
3.62
28.9
37.7
86.1
30.3
9.2
0.8
3Q
14,893
28.7
10,165
25,059
10,520
14,538
26.5
1,154
13,384
4,558
8,826
30.6
3.6
30.5
38.8
88.5
33.3
10.1
0.9
4Q
16,397
32.1
12,574
28,971
12,061
16,910
38.0
3,097
13,813
4,671
9,141
30.2
3.8
27.9
34.7
92.6
36.3
20.2
1.5
1Q
18,089
44.5
11,322
29,411
12,369
17,042
30.4
2,858
14,184
4,529
9,655
31.9
3.9
22.6
32.1
93.2
FY18E
2QE
3QE
18,624
19,171
31.9
28.7
11,100
12,000
29,724
31,171
12,410
13,410
17,314
17,761
24.9
22.2
2,300
1,525
15,014
16,236
4,805
5,196
10,210
11,040
27.4
25.1
3.77
23.2
34.6
94.1
3.7
25.1
34.3
94.9
FY17
4QE
19,777
20.6
13,276
33,053
14,748
18,305
8.3
1,745
16,560
5,293
11,267
23.3
3.6
22.0
28.0
97.1
(INR m)
FY18E
57,973
75,662
26.9
30.5
41,568
47,647
99,541 1,23,309
41,165
52,937
58,375
70,372
35.7
20.6
7,934
8,428
50,441
61,944
17,140
19,822
33,301
42,122
31.1
26.5
3.6
27.9
34.7
92.6
36.3
20.2
1.5
3.7
22.0
28.0
0.0
37.1
14.0
0.8
13.6
1.0
14.0
0.9
14.2
0.9
14.0
0.8
26 October 2017
25

In conversation
1. SBI: Recapitalisation of all PSU banks was need of the hour;
Rajnish Kumar, Chairman
n
n
n
n
n
Recapitalisation of all the public sector undertaking (PSU) banks was the need of
the hour. This move takes care of requirement of all PSU banks and will also
take care of capital requirement of risk and growth.
Central theme of this announcement is a big focus on employment generation.
Historically, recap bonds have been non-statutory liquidity ratio (SLR) bonds.
Bank will need capital for provisions, especially in the National Company Law
Tribunal (NCLT) cases.
Micro, small and medium enterprises (MSME) lending targets are covered under
priority sector lending target.
2. HCL TECH : It partnerships, acquisitions remain core growth
strategy; H2 to be better; C Vijayakumar, CEO & Anil Chanana,
CFO
n
n
n
n
To put the whole numbers in perspective, one should look at the first half
numbers, where revenues grew 11.7 percent compared to same period last
year. Also the booking performance in H1FY18 was significantly better than
H1FY17, so H2 is expected to better.
India strategy would to be selective but would participate wherever there is
value. Overhang of India business may continue in Q3, Q4 but only marginally.
Have taken into account in guidance.
Organic growth would range between 5-7 percent.
Most importantly IT partnerships and acquisitions are core part of the growth
strategy. Company has been achieving this by ensuring stable margins. Given
the current landscape in the market, would look at opportunities in digitial,
cloud.
3. UNION BANK OF INDIA : Looking to raise Rs 2,000 crore via
QIP issue; Rajkiran Rai G, MD & CEO
n
n
n
Capital requirement for FY18 was projected around Rs 3,500 crore and Rs 4,000
crore for FY19.
Credit growth for September was at 12 percent; bank growing better than the
industry. If adequate capital is available, can grow around 15 percent.
Will take a call on fund raising after announcing Q2 results in November. We are
looking to raise Rs 2,000 crore via qualified institutional placement (QIP) issue.
4. UCO BANK : Recapitalisation plan will help banks regarding
capital & credit growth; Ravi Krishan Takkar, MD & CEO
n
n
n
Credit growth is constrained because of lack of capital. However, if bank gets
adequate capital then will be comfortable in taking additional credit exposure.
Recapitalisation plan is going to help banks regarding capital as well as credit
growth.
Requirement is in the range of Rs 3,600 crore for the current financial year and
to some extent almost the same should be for the next financial year.
26 October 2017
26

From the think tank
1. Infosys would be much better off if it just came clean
n
Infosys Ltd’s earnings announcement on Tuesday, its first after it unexpectedly
lost its top management midway through the last quarter, was never going to
shed much light on a shift in strategy. It’s too early for that because the search for
a new chief executive officer (CEO) is still underway. The real significance of the
September quarter release lay in allaying concerns about governance. Specifically,
investors wanted to know what—if anything—Nandan Nilekani, the co-founder
who has since returned to the bellwether Indian software exporter as its non-
executive chairman, wants to do about the suspected board-level lapses during
the tenure of departed CEO Vishal Sikka. N.R. Narayana Murthy, another co-
founder, had questioned Sikka over a 2015 acquisition of Panaya Ltd, an Israeli
automation-tech company. A whistle-blower had contended that the deal was
overpriced and that a generous severance offer (later withdrawn) to a former CFO
was actually hush money. Murthy wanted the full report of an external inquiry,
which gave the management a clean chit, to be made public.
2. PSBS GET RS 2.11 lakh cr; this is the big bang economy
needed, but real thing still missing
n
While the big bang Rs 6.9 lakh crore project to build 83,677 km of roads across
the country over five years will give a near moribund economy the kick-start it
needs—and a big boost in productivity once the major stretches are
completed—the government’s plan to recapitalise PSU banks is the reform
everyone has been waiting for. PSU banks have been short of capital thanks to
the huge provisions needed for loan losses—between March 2015 and June
2017, NPAs rose by Rs 4.6 lakh crore—and the Rs 2.1 lakh crore capital infusion
plan will go a long way in beefing up their balance sheets and also make them
more attractive to equity investors. This is critical since, while Rs 1.3 lakh crore
will come from recapitalisation bonds, the rest will come from a combination of
budget support and the banks themselves raising funds.
3. Putting industrial policy experience to use
n
The department of industrial policy and promotion (DIPP) has released a
substantive discussion paper on industrial policy which identifies several key
policy aspects, constraints on industrial growth, and a range of objectives and
policy targets. The paper provides a basis for the government’s consultations to
“formulate an outcome-oriented actionable industrial policy that provides
direction and charts a course of action for a globally competitive Indian industry
which leverages skill, scale and technology”. Such a focus on industrial policy is
not new. Previous industrial policies emphasized import substitution and
restrictive trade policies, a focus that was significantly replaced by the
“Washington Consensus” and open market-oriented policies.
26 October 2017
27

4. Doing business in india: myths and realities
n
Later this month, the World Bank will release the 2018 edition of its annual
“Doing Business” indicators. This initiative attempts to quantitatively capture
the regulation that small- and medium-sized firms encounter in 190 countries
around the world. Established in 2002, the annual exercise has arguably become
the single most influential measure of a country’s investment climate. One need
look no further than the regular complaints filed by countries unhappy with
their place on the league tables to understand that the World Bank’s metric has
outsized influence. One country where the Doing Business rankings have
captured widespread attention is India, in part because it has generally fared
quite poorly. Clocking in at 130th on last year’s rankings, India had the worst
business environment of the BRICS (Brazil, Russia, India, China and South Africa)
economies.
International
5. Bitcoin hits $100 billion four times faster than apple
n
There is no official measurement of a market bubble, but one could be the
speed and force of the rise, a technique borrowed from the physical realm. Dot-
com stocks rose 680% from the beginning of 1996 to the end of March 2000.
Bitcoin has risen nearly 825% in the past year alone, to about $5,700. In that
run, it has added roughly $90 billion in value, crossing above $100 billion for the
first time on Friday before dropping back a bit. It’s only a matter of time before
it becomes a permanent member of the $100 billion club. Bitcoin is now worth
more than a number of financial firms that would be its rivals, like American
Express Co. ($81 billion) and PayPal Holdings Inc. ($84 billion).
26 October 2017
28

Click excel icon
for detailed
valuation guide
Rs
Valuation snapshot
P/E (x)
P/B (x)
ROE (%)
FY17 FY18E FY17 FY18E FY17 FY18E FY19E
25.1
28.2
24.4
50.2
45.0
17.9
51.7
47.1
36.6
25.7
22.3
25.1
47.1
31.7
21.3
59.0
29.3
30.8
25.3
29.8
25.1
31.6
20.0
19.2
33.2
NM
37.6
44.1
12.4
22.5
29.8
31.4
NM
23.3
42.6
11.2
NM
32.4
1,091.6
21.8
94.5
53.9
45.2
28.8
23.8
19.5
63.7
35.8
18.6
37.5
16.2
27.5
24.1
22.3
35.9
39.3
17.7
38.3
37.3
19.7
23.4
20.4
19.6
25.6
27.6
21.1
45.9
25.7
26.1
20.8
88.6
21.8
26.1
21.1
20.7
26.2
21.5
31.1
30.5
16.7
17.8
24.8
19.7
NM
14.6
10.1
9.5
8.9
34.6
22.2
19.5
16.7
37.8
31.8
21.6
19.6
15.3
52.5
32.1
15.3
28.7
14.9
4.6
6.1
5.5
7.4
7.4
2.8
16.1
9.0
3.7
3.6
7.4
3.2
2.9
6.6
2.5
13.7
5.0
2.1
2.6
2.3
2.4
5.3
2.3
1.3
4.6
0.8
4.9
4.6
1.2
3.5
3.4
1.2
0.8
0.9
0.6
1.1
0.4
1.1
1.5
0.6
0.8
10.3
5.4
3.0
4.0
2.3
19.1
6.6
4.5
4.4
2.9
4.1
5.4
4.9
6.5
6.6
2.5
12.1
7.5
3.2
3.2
6.5
2.9
2.6
5.7
2.2
11.2
4.4
1.9
2.1
2.2
1.9
4.7
2.1
1.3
4.1
0.7
4.3
3.3
1.1
3.0
3.0
1.2
0.9
0.9
0.6
1.0
0.4
1.1
1.4
0.6
0.8
6.1
4.3
2.7
3.4
2.0
15.6
6.0
4.0
3.9
2.5
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
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
21.6
15.1
12.0
18.0
14.4
32.5
18.9
25.5
12.4
19.4
15.8
23.8
23.3
19.3
17.8
14.8
36.1
21.8
17.3
13.8
34.0
13.5
10.8
20.4
11.0
26.7
17.2
7.6
11.5
2.5
9.6
18.8
8.6
6.3
16.9
3.5
15.0
13.0
6.7
18.3
12.2
6.1
-5.2
6.2
5.8
10.9
4.6
3.2
7.0
3.0
4.6
20.2
15.1
13.2
18.6
14.1
32.8
18.6
27.6
14.7
18.2
17.7
27.0
25.3
22.9
20.5
17.3
36.4
24.0
18.3
14.8
31.4
14.3
11.5
23.0
27.4
34.2
22.6
11.6
11.8
8.6
10.0
20.4
9.3
6.9
19.0
7.2
16.3
13.3
12.6
19.5
13.9
12.4
3.0
9.1
7.3
11.2
5.4
5.9
11.4
6.1
8.3
20.4
22.4
15.0
19.2
15.3
32.8
17.8
30.7
18.5
18.5
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.&Fn
Dewan Hsg.
GRUH Fin.
HDFC
Indiabulls Hsg
L&T Fin Holdings
LIC Hsg Fin
Reco
Buy
Buy
Buy
Buy
Neutral
Buy
Buy
Buy
Neutral
Buy
Neutral
Buy
Not Rated
Buy
Buy
Buy
CMP
(INR)
704
129
3,234
657
21,271
1,671
31,696
1,106
732
209
3,769
1,364
252
7,872
422
693
TP
% Upside
EPS (INR)
(INR) Downside FY17 FY18E FY19E
854
145
3,753
726
22,781
2,029
36,487
1,229
732
279
3,868
1,585
-
9,417
562
719
21
13
16
11
7
21
15
11
0
33
3
16
20
33
4
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
25.6
32.9
5.3
7.0
145.2 175.0
18.3
25.5
540.8 698.6
94.2 126.8
826.7 1,119.2
29.6
39.3
37.1
45.8
8.9
10.8
185.0 197.1
69.5
81.7
9.9
11.8
285.5 381.7
20.0
61.3
15.1
24.5
Neutral
Neutral
Buy
Buy
Buy
Buy
Neutral
Buy
Neutral
Buy
Buy
Buy
Buy
473
177
151
121
1,795
306
58
1,594
83
1,010
524
31
328
470
197
212
146
2,150
366
56
2,000
91
1,197
651
36
446
-1
11
41
21
20
20
-3
25
10
19
24
16
36
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
18.1
8.5
1.7
5.5
68.7
14.5
2.8
60.9
3.9
32.4
17.2
1.9
18.5
29.9
10.5
6.1
6.6
84.7
16.6
3.2
78.6
8.3
41.0
22.5
3.8
22.9
Buy
Neutral
Neutral
Neutral
Buy
Neutral
Buy
Buy
Neutral
188
188
438
65
328
151
202
325
176
217
141
323
49
333
150
184
341
135
15
-25
-26
-24
2
-1
-9
5
-23
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
Buy
Buy
Neutral
1,727
949
711
1,094
577
518
1,678
1,276
196
618
2,300
900
925
1,400
690
500
2,020
1,550
230
730
33
-5
30
28
20
-3
20
21
17
18
32.0
21.0
24.6
46.0
29.6
8.1
46.8
68.6
5.2
38.2
45.7
29.9
32.8
56.0
37.6
9.9
52.2
83.6
6.8
41.6
63.7
54.9
42.4
68.1
46.0
12.0
58.2
105.1
10.1
48.9
26 October 2017
29

Company
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
Jyothy Lab
Marico
Reco
Not Rated
Buy
Buy
Buy
Buy
Buy
Buy
CMP
(INR)
98
409
487
1,394
616
2,069
1,090
TP
% Upside
(INR) Downside
-
481
18
550
13
1,750
26
800
30
2,700
30
1,320
21
FY17
8.6
7.1
29.5
31.6
29.1
84.3
55.6
EPS (INR)
FY18E FY19E
9.2
9.7
13.9
17.8
38.7
44.4
48.1
65.1
33.7
38.4
118.3 155.3
80.0 102.4
P/E (x)
P/B (x)
ROE (%)
FY17 FY18E FY17 FY18E FY17 FY18E FY19E
11.3
10.6 2.5
2.3
24.0 22.3 21.4
57.7
29.5 3.7
3.4
6.5
12.0 14.2
16.5
12.6 3.0
2.5
19.4 21.8 21.2
44.1
29.0 4.2
3.8
13.8 13.8 16.6
21.2
18.3 3.4
2.9
17.4 17.1 16.7
24.5
17.5 2.7
2.4
11.7 14.6 16.8
19.6
13.6 2.2
1.9
11.7 15.0 16.9
31.3
25.3 5.0
4.3
16.1 17.1 18.0
70.3
27.2
67.7
60.7
47.2
19.7
34.7
67.6
51.7
24.2
28.5
15.7
69.9
48.1
25.2
31.9
19.9
34.6
34.9
57.6
50.0
35.7
71.1
17.9
33.8
29.1
61.9
26.4
NM
420.9
50.4
46.5
38.3
57.2
62.9
48.9
44.5
44.1
48.8
31.5
64.9
32.1
33.2
50.1
61.8
25.5
33.3
45.8
43.9
39.8
33.2
41.7
42.9
22.0
25.9
12.2
57.5
40.9
18.1
32.7
17.1
31.9
30.6
40.6
34.6
24.8
43.8
17.2
25.3
24.7
44.3
26.3
36.7
33.0
38.2
43.7
31.7
55.7
54.3
44.4
41.7
43.5
42.8
31.1
55.5
29.1
38.0
46.2
8.9
5.6
1.0
9.9
25.7
1.2
6.8
9.6
9.4
4.7
3.4
1.6
6.5
8.8
-1.5
4.4
3.3
5.4
3.9
2.9
3.9
2.4
4.9
1.8
1.1
3.9
3.7
4.6
3.4
6.1
8.8
5.1
3.6
15.2
20.6
22.2
11.7
15.1
11.9
6.6
42.5
7.2
6.2
17.5
7.8
4.4
1.0
9.3
19.0
1.2
6.3
8.4
8.4
4.0
3.1
1.4
5.7
7.5
-1.6
4.0
2.8
4.8
3.6
2.8
3.7
2.2
4.5
1.6
1.1
3.4
3.4
4.0
3.1
5.3
7.3
4.6
3.3
14.8
17.0
21.1
10.1
12.9
9.2
6.5
42.1
7.2
6.3
15.0
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
7.1
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
21.1
36.7
12.6
17.1
3.1
20.9
49.7
3.0
19.7
21.5
19.5
19.5
12.4
11.6
9.8
19.8
-8.8
12.7
17.6
15.8
11.6
7.0
11.1
9.2
10.7
10.0
4.4
14.8
8.0
16.1
8.8
17.0
20.8
11.1
10.4
26.9
34.3
48.7
26.0
32.0
24.2
21.1
76.2
24.8
16.5
34.9
15.8
17.0
4.1
28.9
48.8
3.7
22.8
22.7
21.2
20.9
13.8
12.6
13.8
20.9
-11.0
12.8
17.4
16.0
13.1
8.0
14.2
12.2
13.3
12.9
6.1
17.5
12.3
17.5
12.8
22.9
18.8
14.2
12.6
29.4
34.5
56.2
26.3
33.9
22.8
22.6
87.2
26.3
18.4
37.7
Sell
Buy
Sell
Neutral
Buy
Neutral
Buy
Neutral
Neutral
Neutral
Buy
Not Rated
Neutral
Neutral
Not Rated
Neutral
Buy
Sell
1,385
172
91
782
221
81
919
387
494
287
1,204
111
1,246
991
16
985
593
535
1,235
187
75
690
240
80
1,170
395
460
295
1,400
-
1,355
900
-
840
800
470
-11
9
-17
-12
9
-1
27
2
-7
3
16
9
-9
-15
35
-12
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
17.1
5.0
2.0
27.7
9.3
11.5
13.1
46.5
9.1
21.7
24.2
0.9
30.1
34.6
16.8
31.6
7.4
3.8
25.5
6.3
2.5
35.0
11.3
14.3
16.4
56.6
11.2
33.4
30.0
1.0
33.4
39.8
19.1
Neutral
Neutral
Buy
Buy
Neutral
Neutral
Buy
Buy
Buy
Buy
Buy
Buy
Buy
282
1,804
1,017
2,758
1,211
190
982
431
720
162
115
19,368
4,465
314
1,797
1,150
3,272
1,276
198
1,196
485
832
182
140
22,084
4,906
12
0
13
19
5
4
22
13
16
12
22
14
10
4.9
6.9
36.1 52.2
28.5 40.9
38.8 62.9
67.8 70.6
5.6
7.5
33.7 39.7
7.0
9.7
27.3 27.4
-1.6
4.4
0.3
3.5
384.4 507.1
96.1 102.2
8.4
70.9
58.9
88.3
101.2
10.8
54.4
16.4
34.4
7.1
5.6
547.8
147.1
Neutral
Buy
Buy
Neutral
Buy
Neutral
Neutral
Buy
Neutral
Neutral
Neutral
1,203
4,635
1,038
323
1,170
922
4,924
1,274
269
373
315
1,280
5,165
1,328
330
1,400
1,005
4,630
1,400
290
410
350
6
11
28
2
20
9
-6
10
8
10
11
21.0 21.6
73.7 85.3
21.2 23.4
7.2
7.7
26.5 26.9
18.9 21.5
156.1 158.1
19.6 22.9
8.4
9.3
11.2
9.8
6.3
6.8
25.8
104.6
28.6
9.1
33.1
24.7
182.1
27.4
10.3
11.1
8.2
26 October 2017
30

Company
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
PVR
Prime Focus
Siti Net.
Sun TV
Reco
Neutral
Buy
Neutral
Neutral
Neutral
Not Rated
Buy
Neutral
CMP
(INR)
7,153
20,370
269
799
8,674
144
917
2,539
TP
% Upside
(INR) Downside
6,160
-14
21,310
5
280
4
865
8
9,200
6
-
980
7
2,600
2
FY17
118.0
238.7
3.6
16.7
132.9
3.5
8.7
26.7
EPS (INR)
FY18E FY19E
115.0 133.6
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)
FY17 FY18E
60.6
62.2
85.3
69.1
74.6
29.5
47.8
44.3
65.3
57.2
40.8
41.5
105.6 92.7
95.0
73.6
47.4
42.9
22.8
24.5
19.5
18.7
36.0
33.8
37.3
21.8
32.4
14.1
15.4
19.3
70.5
31.2
16.3
17.7
32.5
47.6
26.2
20.0
39.1
23.6
24.1
17.1
40.7
35.8
35.3
13.8
16.3
30.8
73.6
17.7
NM
69.1
9.4
13.8
16.5
59.2
67.7
82.1
NM
32.5
24.9
25.6
21.6
16.4
37.8
27.5
28.1
25.7
32.4
66.7
15.2
17.5
51.8
30.3
12.8
24.2
31.4
31.6
17.8
34.7
31.5
24.4
26.9
16.4
32.1
29.0
28.5
7.3
13.1
24.8
74.3
15.2
NM
64.9
9.4
9.8
14.5
40.8
52.4
33.1
NM
28.1
P/B (x)
ROE (%)
FY17 FY18E FY17 FY18E FY19E
22.9 21.3 39.0 35.5 38.1
34.1 27.4 40.0 39.6 43.1
3.4
3.1
6.0
11.0 13.3
12.4 10.1 28.2 25.2 23.5
40.9 33.9 39.3 64.9 62.8
2.0
2.0
5.2
4.9
8.5
10.4 9.5
10.2 10.7 13.6
19.0 13.3 21.3 18.0 20.3
13.0 12.2 27.5 28.3 29.4
4.9
5.3
6.4
4.6
4.5
7.1
3.8
4.3
3.2
1.5
3.8
3.5
10.2
2.6
2.7
3.4
5.6
5.8
2.8
3.4
7.9
5.1
4.1
2.3
18.1
3.7
2.6
1.9
2.5
3.8
16.4
4.2
1.8
4.4
1.5
1.1
2.7
4.0
6.7
5.4
4.0
7.9
4.3
4.5
5.2
3.6
4.2
5.9
3.4
4.5
3.0
1.3
3.1
2.5
11.9
2.4
2.3
3.0
5.2
5.0
2.5
3.3
6.5
4.5
3.7
2.1
13.8
3.6
2.5
1.7
2.2
3.5
13.4
3.4
1.9
4.1
1.3
1.0
2.7
3.6
6.0
4.6
4.3
7.3
23.0
23.4
37.7
27.6
12.3
23.0
10.2
22.0
9.7
11.3
24.7
21.1
14.5
8.6
18.1
20.9
17.1
14.4
10.7
18.1
22.2
23.8
16.9
13.7
50.5
10.8
7.3
12.4
16.7
12.3
25.1
25.1
-19.1
6.7
18.2
7.9
18.5
11.2
10.4
7.6
-28.7
26.0
18.4
19.0
26.5
24.8
11.1
23.5
12.1
17.0
9.7
2.1
20.3
17.7
23.0
8.2
19.5
13.2
16.6
17.0
14.7
9.6
22.5
19.5
13.6
13.4
48.6
12.5
8.8
19.4
17.8
14.1
19.9
24.7
-6.4
6.6
15.0
10.2
18.6
9.3
12.1
15.0
-7.5
27.0
20.5
20.9
25.9
22.1
14.5
26.0
13.2
19.5
14.4
4.9
20.4
18.8
30.9
12.2
19.6
16.4
18.1
20.4
20.2
13.8
20.7
21.5
16.1
15.1
46.8
14.6
11.0
25.4
18.6
16.3
35.2
23.9
0.2
10.3
15.3
10.6
19.0
12.4
17.3
23.9
6.4
31.6
Neutral
Neutral
Buy
Buy
Sell
Buy
Neutral
Neutral
Neutral
Buy
Neutral
Buy
Neutral
Neutral
Buy
Buy
Buy
Buy
Buy
Buy
Not Rated
Neutral
493
1,856
1,140
735
367
481
594
871
2,352
146
603
140
2,423
502
604
1,004
4,200
667
845
523
509
1,304
510
1,830
1,605
850
330
555
520
720
2,400
220
775
200
2,500
430
905
1,125
4,850
805
1,300
515
-
1,350
4
-1
41
16
-10
15
-12
-17
2
51
28
43
3
-14
50
12
15
21
54
-2
3
21.6 19.8
75.7 72.5
58.4 52.8
39.3 44.9
10.2
9.7
14.2 17.5
15.9 21.1
39.9 33.9
72.6 72.6
10.3
2.2
39.3 39.7
7.2
8.0
34.4 46.8
16.1 16.6
37.0 47.1
56.6 41.4
129.1 133.6
14.0 21.1
32.3 47.4
26.1 15.1
13.0 16.1
55.2 53.4
25.5
93.3
64.2
50.0
14.2
23.6
26.0
40.4
119.9
5.6
49.1
11.0
54.9
26.8
56.7
58.0
160.6
30.4
74.8
23.3
18.0
67.3
Buy
Not Rated
Neutral
Buy
Not Rated
Not Rated
169
4,176
1,359
240
115
276
213
-
1,503
277
-
-
26
11
15
9.8
10.3
102.5 129.9
38.0 46.8
6.8
8.4
16.9
8.4
15.9
21.0
12.9
163.2
57.8
11.0
23.9
25.9
Buy
Buy
Neutral
Neutral
Buy
Neutral
Buy
Buy
Buy
Buy
Neutral
Neutral
75
360
83
790
242
102
177
381
1,389
100
25
808
106
450
90
928
302
113
225
469
1,597
130
32
860
41
25
8
17
25
11
27
23
15
30
29
6
1.0
20.4
-9.3
11.4
25.8
7.4
10.7
6.4
20.5
1.2
-1.8
24.9
1.0
23.7
-2.9
12.2
25.6
10.4
12.2
9.3
26.5
3.0
-0.4
28.8
2.4
28.0
0.1
20.6
30.2
11.9
13.4
14.0
43.6
5.9
0.4
36.9
26 October 2017
31

Company
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
Tata Comm
Aggregate
Utiltites
Reco
Buy
CMP
(INR)
531
TP
% Upside
EPS (INR)
(INR) Downside FY17 FY18E FY19E
630
19
12.1 10.5
16.0
P/E (x)
P/B (x)
ROE (%)
FY17 FY18E FY17 FY18E FY17 FY18E FY19E
43.8
50.8 6.0
5.5
17.0 12.8 16.8
39.9
33.2 5.0
4.6
12.6 13.9 17.5
31.2
16.2
NM
17.5
24.0
12.2
NM
22.2
18.9
24.2
10.6
20.3
55.1
23.7
11.4
9.7
35.8
8.8
17.5
10.8
22.6
19.4
14.2
160.2
65.4
74.2
18.3
15.2
21.1
14.9
11.3
14.5
20.4
18.1
16.1
17.4
30.7
19.2
15.2
17.7
14.8
17.3
46.4
30.4
NM
26.1
45.3
13.5
14.0
NM
11.7
20.0
9.3
NM
13.2
10.7
15.3
10.4
17.3
28.3
17.3
10.1
8.2
31.7
12.2
11.6
9.9
18.2
16.9
12.5
2.1
4.4
0.5
2.8
1.7
1.7
0.8
2.1
2.2
1.8
3.3
2.0
7.5
2.6
3.5
1.9
7.5
2.3
0.9
1.0
4.8
2.0
1.9
1.8
4.7
0.5
2.3
1.6
1.6
0.8
1.9
1.9
1.8
2.7
1.9
6.2
2.3
2.8
1.7
6.4
2.0
0.9
1.0
4.0
1.8
1.7
12.1
11.3
11.7
2.7
3.3
4.5
3.4
1.6
3.9
3.3
2.6
2.1
2.6
7.8
6.1
2.3
2.7
2.1
4.1
3.0
5.4
1.9
11.1
3.3
7.4
24.4
-7.9
17.3
7.2
12.8
-6.7
9.7
15.7
7.6
32.4
9.6
14.2
11.6
32.4
21.2
21.0
31.4
5.7
10.1
23.2
11.6
13.2
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
14.3
32.3
-5.5
21.6
8.3
15.5
-9.1
15.0
19.1
11.5
28.5
11.3
23.9
14.3
31.0
21.9
21.7
17.3
7.9
10.2
23.9
11.9
13.5
11.1
21.0
18.6
17.4
25.5
25.6
21.8
13.3
33.3
17.2
14.4
15.1
17.9
33.6
30.6
17.9
17.0
14.9
24.0
15.4
38.0
0.6
20.8
10.1
16.2
-5.3
21.6
15.9
14.3
25.2
11.9
27.0
14.1
24.2
17.4
20.4
16.5
8.8
10.5
25.5
12.3
13.1
14.0
22.2
19.6
18.3
24.6
23.1
22.5
14.7
28.3
20.1
16.2
16.4
20.8
32.4
33.5
17.1
16.7
17.9
22.9
1.9
23.2
-32.6
33.1
0.3
Buy
Neutral
Buy
Buy
Neutral
Buy
Sell
Buy
Neutral
267
319
165
260
89
121
67
336
717
308
322
192
298
87
188
30
360
665
15
1
16
15
-3
55
-55
7
-7
8.6
19.7
-20.9
14.8
3.7
10.0
-6.2
15.1
37.9
19.8
22.7
-17.4
22.3
4.5
13.1
-7.7
25.4
66.9
24.5
29.4
2.0
25.7
5.8
12.9
-4.2
40.0
63.4
Buy
Sell
Sell
Neutral
Buy
Buy
Neutral
Sell
Buy
Buy
Buy
Buy
510
459
893
208
463
417
1,573
130
339
177
257
940
644
634
712
180
585
559
1,295
112
340
190
275
1,005
26
38
-20
-14
26
34
-18
-14
0
7
7
7
48.3
22.6
16.2
8.8
40.7
43.0
44.0
14.8
19.3
16.4
11.4
48.3
49.2
26.5
31.6
12.1
45.9
51.1
49.6
10.7
29.1
17.8
14.1
55.5
52.0
30.0
44.0
13.3
42.9
46.5
54.8
11.6
34.1
19.2
18.0
64.0
Sell
Neutral
1,603
591
960
590
-40
0
10.0
9.0
14.8
10.5
20.7
12.6
108.3 13.1
56.5 12.4
62.7 12.8
15.6
14.3
18.5
14.7
12.5
13.3
17.9
17.5
14.0
15.2
25.6
19.4
13.4
15.6
14.9
17.0
3.0
3.8
5.1
3.1
1.7
5.1
3.3
2.4
2.1
2.7
9.6
5.7
2.5
2.8
2.4
3.9
Buy
Neutral
Neutral
Buy
Neutral
Buy
Neutral
Neutral
Neutral
Buy
Buy
Neutral
Buy
Neutral
Buy
561
907
289
935
135
807
507
703
612
656
864
2,562
468
299
768
600
950
250
1,100
140
880
450
610
600
780
996
2,450
490
280
950
7
5
-14
18
4
9
-11
-13
-2
19
15
-4
5
-6
24
30.6 36.0
59.8 63.5
13.7 15.6
62.8 63.8
11.9 10.8
55.5 60.9
24.9 28.4
38.9 40.2
38.0 43.7
37.7 43.3
28.1 33.8
133.4 131.8
30.9 34.8
16.9 19.1
52.1 51.5
41.9
68.9
16.5
67.8
13.6
65.3
32.9
43.0
50.3
52.4
40.2
151.4
37.3
20.1
70.0
Buy
Buy
Buy
Buy
516
452
99
712
470
440
105
775
-9
-3
6
9
11.1
14.9
-1.1
27.2
2.4
17.3
-15.5
8.3
3.2
19.7
-14.9
25.4
215.1 3.1
26.1 5.4
NM
1.4
86.1 12.7
-282.4 3.1
6.7
1.4
16.2 20.7
-1.6 -25.6
132.2 13.8
6.9
-1.2
26 October 2017
32

Company
Reco
Coal India
Buy
CESC
Buy
JSW Energy
Sell
NTPC
Buy
Power Grid
Buy
Tata Power
Sell
Aggregate
Others
Arvind
Neutral
Avenue
Sell
Supermarts
Bata India
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
Jain Irrigation
Under Review
Just Dial
Neutral
Kaveri Seed
Buy
Kitex Garm.
Buy
Manpasand
Buy
MCX
Buy
Monsanto
Buy
Navneet Education Buy
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
CMP
(INR)
289
1,027
82
183
216
82
TP
% Upside
(INR) Downside
335
16
1,360
32
49
-40
211
15
262
22
71
-14
FY17
14.9
51.9
3.8
12.0
14.2
7.4
EPS (INR)
FY18E FY19E
17.5
20.7
88.9
99.3
3.3
2.7
13.5
15.7
17.4
20.6
7.3
7.3
P/E (x)
P/B (x)
ROE (%)
FY17 FY18E FY17 FY18E FY17 FY18E FY19E
19.4
16.5 7.3
7.0
37.8 42.4 47.7
19.8
11.6 1.3
1.2
6.5
10.6 10.8
21.3
24.4 1.3
1.3
6.3
5.3
4.2
15.3
13.6 1.5
1.4
10.5 11.0 11.9
15.1
12.4 2.3
2.0
16.2 17.3 17.8
11.1
11.4 1.9
1.7
17.1 15.8 14.2
16.8
14.3 2.4
2.3
14.5 15.7 16.8
32.3
148.8
57.9
23.8
28.3
31.7
30.7
81.9
30.6
25.5
27.1
8.9
69.8
68.3
17.2
23.1
29.8
12.0
70.1
42.1
28.8
22.1
84.5
23.4
36.2
19.1
37.7
59.8
42.0
15.0
48.9
58.6
52.6
31.0
95.3
49.8
23.2
30.5
28.0
21.1
44.2
18.3
24.0
21.2
13.0
50.3
28.4
12.6
21.8
16.6
10.1
45.7
39.4
23.6
19.1
44.3
25.7
25.1
20.4
35.9
40.3
44.2
12.0
46.9
46.7
30.8
2.9
18.5
7.6
2.0
32.0
8.6
5.1
6.3
4.2
8.2
11.9
2.7
6.7
4.0
1.5
3.1
3.9
3.2
4.4
3.9
8.1
5.4
11.4
6.6
3.0
3.0
4.9
22.2
7.3
1.8
8.8
14.0
4.8
2.7
16.3
6.8
2.0
29.0
7.1
4.4
4.2
3.4
6.7
6.9
2.2
6.1
3.5
1.4
2.8
4.1
2.6
4.1
4.0
7.3
4.7
4.9
5.5
2.8
2.7
4.4
19.5
6.3
1.6
8.0
11.4
4.3
10.3
17.9
13.9
8.3
115.2
31.1
17.5
8.1
15.1
37.7
51.0
34.8
10.2
5.9
8.6
14.8
13.6
29.8
7.3
10.2
31.5
26.7
19.0
32.8
9.0
16.6
13.7
43.3
19.2
13.0
19.5
27.4
9.5
9.1
18.2
14.4
8.5
99.8
27.7
22.5
12.1
20.7
30.8
41.1
18.6
12.7
12.5
11.7
13.4
23.3
28.6
8.2
10.0
32.5
26.3
15.6
23.4
11.7
13.7
12.9
51.6
15.3
14.5
18.0
26.9
14.8
12.0
22.9
15.8
7.7
95.8
29.6
23.4
12.9
24.3
30.1
46.6
18.3
13.1
16.2
14.8
13.7
27.4
27.6
13.4
15.9
34.5
27.9
15.0
22.9
15.3
16.0
15.2
54.5
19.5
16.1
20.7
28.8
17.5
401
1,141
782
977
386
275
510
250
2,071
328
1,170
116
1,095
228
96
402
567
222
445
1,044
2,481
162
845
782
2,626
1,640
273
1,414
1,628
99
6,458
209
368
376
873
-
1,100
467
323
523
257
3,334
358
1,142
118
1,130
240
-
465
738
394
534
1,300
3,295
209
990
894
3,266
1,751
298
1,288
1,990
114
5,281
167
393
-6
-24
13
21
17
3
3
61
9
-2
2
3
5
16
30
77
20
25
33
29
17
14
24
7
9
-9
22
15
-18
-20
7
12.4
7.7
13.5
41.0
13.6
8.7
16.6
3.1
67.6
12.9
43.2
13.0
15.7
3.3
5.5
17.5
19.1
18.6
6.3
24.8
86.2
7.3
10.0
33.4
72.6
85.9
7.2
23.7
38.8
6.6
132.1
3.6
7.0
12.9
12.0
15.7
42.2
12.6
9.8
24.1
5.7
112.9
13.6
55.2
8.9
21.8
8.0
7.6
18.5
34.1
22.1
9.7
26.5
105.0
8.4
19.1
30.4
104.6
80.2
7.6
35.1
36.8
8.3
137.8
4.5
11.9
18.6
17.5
19.4
44.6
13.3
12.9
29.0
8.0
166.7
16.3
81.6
10.8
24.7
12.0
10.0
21.1
41.0
26.2
15.3
43.4
126.6
10.4
27.8
35.8
149.7
103.0
9.9
42.9
56.0
10.4
176.1
6.0
16.0
26 October 2017
33

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 (%)
0.5
0.1
0.6
3.0
-0.4
-0.3
0.7
3.5
-0.3
0.6
0.2
0.9
3.7
0.0
1.5
-0.1
4.6
-2.1
-1.3
-2.8
-3.8
14.7
0.9
-4.3
12.2
-5.4
-2.3
-3.4
-5.9
31.5
34.0
38.1
20.1
21.5
27.2
46.2
27.6
34.1
-5.4
-4.3
-4.4
-7.2
-3.4
3.8
-2.6
-5.0
-7.2
-2.5
-3.5
-2.5
-2.2
-3.5
6.9
-5.0
5.0
-2.5
-2.5
1M (%)
-4.8
13.9
6.4
7.4
0.6
-0.7
2.3
11.6
17.6
0.6
0.4
8.3
7.8
-1.0
3.4
8.0
-5.7
-3.3
-3.4
8.5
-0.2
9.3
1.8
-6.2
10.3
1.0
2.3
8.2
-8.9
32.2
31.2
34.6
22.7
24.4
20.6
46.6
25.5
35.3
-3.8
1.2
-4.8
-0.2
9.9
0.8
-4.4
6.1
1.8
-0.6
1.4
1.2
2.8
-7.8
9.7
0.5
-1.8
10.9
-0.5
12M (%)
-31.8
46.7
15.5
49.8
-6.3
32.2
28.5
77.0
85.1
2.7
12.3
4.5
29.7
36.1
-23.7
70.3
-10.7
38.1
-15.4
49.2
43.5
16.3
-26.5
31.8
20.8
28.6
52.2
41.3
25.3
20.0
65.2
39.2
-12.2
43.7
12.8
38.0
24.3
19.1
51.3
3.9
-5.8
-7.2
77.1
55.8
25.2
47.1
90.8
3.4
-6.7
14.6
32.0
11.9
-20.0
19.5
-5.7
-11.6
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 (%)
2.1
-1.6
3.0
-3.4
0.4
0.0
2.5
1.6
-2.2
-2.8
5.7
-0.2
2.4
0.0
2.6
1.9
-0.9
-0.7
-0.2
1.5
0.8
-0.6
2.8
4.1
0.0
3.3
2.2
2.2
3.6
2.4
6.0
-1.5
0.2
-1.8
1.3
2.9
-1.1
-0.3
0.2
0.8
-1.2
0.7
-1.2
1.3
-2.1
-0.1
0.3
-1.5
6.6
1.2
0.2
-0.3
-1.4
-1.1
0.3
-0.6
-0.3
1M (%)
-3.1
4.3
6.7
2.5
6.4
2.6
2.5
-0.9
0.7
-4.7
3.4
7.1
-5.5
7.8
-0.9
15.8
-0.8
5.0
7.2
10.5
13.2
5.0
6.6
13.3
3.9
11.4
1.3
6.1
8.3
9.9
14.2
0.5
8.3
-4.3
3.2
7.4
-1.1
-0.4
2.2
2.6
-1.9
-1.2
0.3
10.4
16.4
-0.9
4.3
11.0
6.7
3.8
1.9
1.3
-4.2
4.7
7.0
-0.2
2.9
12M (%)
28.0
49.1
-3.2
44.0
17.7
6.3
5.9
13.5
21.3
125.6
21.7
-38.6
2.7
53.1
8.9
15.8
17.1
34.5
13.6
16.2
36.8
38.5
49.2
19.8
4.9
-14.1
14.2
-7.6
7.7
12.3
11.1
5.5
40.8
10.0
13.4
-0.5
13.7
-19.3
53.1
12.8
4.5
10.6
5.5
22.0
-14.3
12.1
23.0
19.2
3.3
6.8
-26.8
11.6
-42.8
-10.8
17.0
17.9
1.4
26 October 2017
34

Company
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
Logistics
Allcargo Logistics
Blue Dart
Concor
Gateway Distriparks
Gati
Transport Corp.
Media
Dish TV
D B Corp
Den Net.
Ent.Network
Hind. Media
HT Media
Jagran Prak.
Music Broadcast
PVR
Prime Focus
Siti Net.
Sun TV
Zee Ent.
Metals
Hindalco
Hind. Zinc
JSPL
JSW Steel
Nalco
NMDC
SAIL
Vedanta
Tata Steel
Oil & Gas
BPCL
GAIL
Gujarat Gas
Gujarat St. Pet.
HPCL
IOC
IGL
MRPL
Oil India
ONGC
PLNG
Reliance Ind.
Retail
Jubilant Food
Titan Co.
1 Day (%)
0.1
-0.5
-0.4
0.4
0.1
-1.0
3.0
-1.5
-2.2
-0.5
2.6
-0.4
-2.1
2.1
-5.2
-0.3
2.3
1.4
1.2
-0.2
-0.9
7.9
-2.3
-1.4
1.1
1.2
-0.6
-0.2
-0.5
-2.2
-1.2
0.8
0.4
1.0
-0.8
0.9
2.0
0.2
4.9
0.1
8.8
0.4
-0.3
-0.1
3.6
-0.7
-1.9
-0.6
2.4
-1.4
-0.7
-1.5
0.5
-4.4
0.6
-0.4
-2.5
1M (%)
-8.5
-2.7
-0.8
-1.6
16.7
-0.2
1.2
-7.8
1.3
5.2
17.1
-6.9
3.4
5.4
5.8
-1.8
1.8
6.1
7.1
5.5
5.9
-1.6
-1.5
-1.9
-1.2
-6.8
7.9
1.8
-2.4
14.8
9.0
-2.7
2.6
0.7
16.4
9.2
23.0
9.6
20.0
0.6
18.1
9.5
12.0
4.7
15.5
9.1
6.7
8.8
4.7
8.2
5.1
2.3
7.5
12.6
14.6
16.1
-2.0
12M (%)
-31.8
-26.5
-18.2
-35.2
11.9
-17.5
-20.5
-12.2
-34.2
-2.7
11.2
-13.7
-30.0
-7.1
-18.6
-6.8
-17.3
26.0
-5.3
-16.8
51.9
-24.1
-6.5
7.7
-1.6
-20.1
12.2
-11.4
13.6
33.7
-27.1
51.4
3.0
77.3
25.3
114.8
52.1
78.9
-1.5
32.3
64.6
72.6
11.6
40.8
54.1
25.5
50.0
27.6
82.4
40.1
9.1
-8.3
34.6
77.4
40.2
58.5
Company
Technology
Cyient
HCL Tech.
Hexaware
Infosys
KPIT Tech
L&T Infotech
Mindtree
Mphasis
NIIT Tech
Persistent Sys
Tata Elxsi
TCS
Tech Mah
Wipro
Zensar Tech
Telecom
Bharti Airtel
Bharti Infratel
Idea Cellular
Tata Comm
Utiltites
Coal India
CESC
JSW Energy
NTPC
Power Grid
Tata Power
Others
Arvind
Avenue Super.
Bata India
BSE
Castrol India
Century Ply.
Coromandel Intl
Delta Corp
Dynamatic Tech
Eveready Inds.
Interglobe
Indo Count
Info Edge
Inox Leisure
Jain Irrigation
Just Dial
Kaveri Seed
Kitex Garm.
Manpasand
MCX
Monsanto
Navneet Educat.
PI Inds.
Piramal Enterp.
Quess Corp
SRF
S H Kelkar
Symphony
Team Lease Serv.
Trident
TTK Prestige
V-Guard
Wonderla
1 Day (%)
0.4
-0.7
0.1
0.9
2.8
0.0
0.8
2.1
0.7
-0.2
1.3
-0.7
2.9
0.9
0.8
2.8
-0.1
0.6
-2.4
-0.3
-0.4
-0.6
0.9
0.4
0.2
-0.9
4.1
-0.9
0.5
2.5
-1.4
-2.0
1.3
-0.3
-1.0
0.3
1.2
-1.3
-0.7
0.2
-1.0
-0.9
4.4
2.7
-4.1
3.2
-4.9
-1.0
-3.9
1.0
-1.4
-1.6
0.9
-1.2
-0.6
4.7
6.2
0.5
1M (%)
10.4
3.9
9.3
4.3
16.3
4.1
9.1
15.6
20.8
3.0
6.1
2.1
3.7
2.5
1.6
32.4
16.0
30.1
3.7
12.5
3.7
11.7
10.4
2.6
0.4
9.4
10.9
10.2
-0.2
5.4
14.7
21.3
29.9
-4.0
9.9
11.8
12.7
8.5
2.7
-0.6
4.6
10.8
4.8
-7.9
-1.2
-0.1
-4.2
4.4
-2.9
1.8
6.9
9.1
4.9
0.9
3.6
2.2
14.4
6.5
12M (%)
11.3
12.8
42.9
-8.1
-7.6
24.6
11.5
38.1
44.9
-0.5
31.5
6.8
8.1
24.2
-20.9
65.7
19.4
31.4
8.9
-9.6
66.6
16.5
20.5
21.1
-0.1
-0.8
62.4
-17.6
8.8
82.5
36.9
-38.4
28.6
26.6
-29.4
24.6
-15.7
-9.0
-10.1
29.0
-39.7
22.9
-18.2
5.2
47.6
-5.7
42.4
42.0
-12.6
-12.3
3.3
63.4
64.2
11.5
36.5
-9.3
26 October 2017
35

NOTES
26 October 2017
36

THEMATIC/STRATEGY RESEARCH GALLERY

REPORT GALLERY
RECENT INITIATING COVERAGE REPORTS
Rs

DIFFERENTIATED PRODUCT GALLERY

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For Hong Kong:
This report is distributed in Hong Kong by Motilal Oswal capital Markets (Hong Kong) Private Limited, a licensed corporation (CE AYY-301) licensed and regulated by the Hong Kong Securities and Futures Commission (SFC)
pursuant to the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) “SFO”. As per SEBI (Research Analyst Regulations) 2014 Motilal Oswal Securities (SEBI Reg No. INH000000412) has an agreement with
Motilal Oswal capital Markets (Hong Kong) Private Limited for distribution of research report in Hong Kong. This report is intended for distribution only to “Professional Investors” as defined in Part I of Schedule 1 to SFO. Any
investment or investment activity to which this document relates is only available to professional investor and will be engaged only with professional investors.” Nothing here is an offer or solicitation of these securities,
products and services in any jurisdiction where their offer or sale is not qualified or exempt from registration. The Indian Analyst(s) who compile this report is/are not located in Hong Kong & are not conducting Research
Analysis in Hong Kong.
For U.S.
Motilal Oswal Securities Limited (MOSL) is not a registered broker - dealer under the U.S. Securities Exchange Act of 1934, as amended (the"1934 act") and under applicable state laws in the United States. In addition MOSL is
not a registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the "Advisers Act" and together with the 1934 Act, the "Acts), and under applicable state laws in the United States.
Accordingly, in the absence of specific exemption under the Acts, any brokerage and investment services provided by MOSL, including the products and services described herein are not available to or intended for U.S.
persons. This report is intended for distribution only to "Major Institutional Investors" as defined by Rule 15a-6(b)(4) of the Exchange Act and interpretations thereof by SEC (henceforth referred to as "major institutional
investors"). This document must not be acted on or relied on by persons who are not major institutional investors. Any investment or investment activity to which this document relates is only available to major institutional
investors and will be engaged in only with major institutional investors. In reliance on the exemption from registration provided by Rule 15a-6 of the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act") and
interpretations thereof by the U.S. Securities and Exchange Commission ("SEC") in order to conduct business with Institutional Investors based in the U.S., MOSL has entered into a chaperoning agreement with a U.S.
registered broker-dealer, Motilal Oswal Securities International Private Limited. ("MOSIPL"). Any business interaction pursuant to this report will have to be executed within the provisions of this chaperoning agreement.
The Research Analysts contributing to the report may not be registered /qualified as research analyst with FINRA. Such research analyst may not be associated persons of the U.S. registered broker-dealer, MOSIPL, and
therefore, may not be subject to NASD rule 2711 and NYSE Rule 472 restrictions on communication with a subject company, public appearances and trading securities held by a research analyst account.
For Singapore
Motilal Oswal Capital Markets Singapore Pte Limited is acting as an exempt financial advisor under section 23(1)(f) of the Financial Advisers Act(FAA) read with regulation 17(1)(d) of the Financial Advisors Regulations and is a
subsidiary of Motilal Oswal Securities Limited in India. This research is distributed in Singapore by Motilal Oswal Capital Markets Singapore Pte Limited and it is only directed in Singapore to accredited investors, as defined in
the Financial Advisers Regulations and the Securities and Futures Act (Chapter 289), as amended from time to time. In respect of any matter arising from or in connection with the research you could contact the following
representatives of Motilal Oswal Capital Markets Singapore Pte Limited:
Disclaimer:
The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person
or to the media or reproduced in any form, without prior written consent. This report and information herein is solely for informational purpose and may not be used or considered as an offer document or solicitation of
offer to buy or sell or subscribe for securities or other financial instruments. Nothing in this report constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or
appropriate to your specific circumstances. The securities discussed and opinions expressed in this report may not be suitable for all investors, who must make their own investment decisions, based on their own investment
objectives, financial positions and needs of specific recipient. This may not be taken in substitution for the exercise of independent judgment by any recipient. Each recipient of this document should make such investigations
as it deems necessary to arrive at an independent evaluation of an investment in the securities of companies referred to in this document (including the merits and risks involved), and should consult its own advisors to
determine the merits and risks of such an investment. The investment discussed or views expressed may not be suitable for all investors. Certain transactions -including those involving futures, options, another derivative
products as well as non-investment grade securities - involve substantial risk and are not suitable for all investors. No representation or warranty, express or implied, is made as to the accuracy, completeness or fairness of
the information and opinions contained in this document. The Disclosures of Interest Statement incorporated in this document is provided solely to enhance the transparency and should not be treated as endorsement of the
views expressed in the report. This information is subject to change without any prior notice. The Company reserves the right to make modifications and alternations to this statement as may be required from time to time
without any prior approval. MOSL, its associates, their directors and the employees may from time to time, effect or have effected an own account transaction in, or deal as principal or agent in or for the securities
mentioned in this document. They may perform or seek to perform investment banking or other services for, or solicit investment banking or other business from, any company referred to in this report. Each of these entities
functions as a separate, distinct and independent of each other. The recipient should take this into account before interpreting the document. This report has been prepared on the basis of information that is already
available in publicly accessible media or developed through analysis of MOSL. The views expressed are those of the analyst, and the Company may or may not subscribe to all the views expressed therein. This document is
being supplied to you solely for your information and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or published, copied, in whole or in part, for any purpose. This report is not
directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would
be contrary to law, regulation or which would subject MOSL to any registration or licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in all jurisdictions or to
certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction. Neither the Firm, not its directors, employees, agents or
representatives shall be liable for any damages whether direct or indirect, incidental, special or consequential including lost revenue or lost profits that may arise from or in connection with the use of the information.
The
person accessing this information specifically agrees to exempt MOSL or any of its affiliates or employees from, any and all responsibility/liability arising from such misuse and agrees not to hold MOSL or any of its affiliates or
employees responsible for any such misuse and further agrees to hold MOSL or any of its affiliates or employees free and harmless from all losses, costs, damages, expenses that may be suffered by the person accessing this
information due to any errors and delays.
Registered Office Address: Motilal Oswal Tower, Rahimtullah Sayani Road, Opposite Parel ST Depot, Prabhadevi, Mumbai-400025; Tel No.: 022-3980 4263; www.motilaloswal.com. Correspondence Address: Palm Spring
Centre, 2nd Floor, Palm Court Complex, New Link Road, Malad (West), Mumbai- 400 064. Tel No: 022 3080 1000. Compliance Officer: Neeraj Agarwal, Email Id:
na@motilaloswal.com,
Contact No.:022-30801085.
Registration details of group entities.: MOSL: NSE (Cash): INB231041238; NSE (F&O): INF231041238; NSE (CD): INE231041238; BSE (Cash): INB011041257; BSE(F&O): INF011041257; BSE(CD); MSE(Cash): INB261041231;
MSE(F&O): INF261041231; MSE(CD): INE261041231; CDSL: IN-DP-16-2015; NSDL: IN-DP-NSDL-152-2000; Research Analyst: INH000000412. AMFI: ARN 17397. Investment Adviser: INA000007100. Motilal Oswal Asset
Management Company Ltd. (MOAMC): PMS (Registration No.: INP000000670) offers PMS and Mutual Funds products. Motilal Oswal Wealth Management Ltd. (MOWML): PMS (Registration No.: INP000004409) offers wealth
management solutions. *Motilal Oswal Securities Ltd. is a distributor of Mutual Funds, PMS, Fixed Deposit, Bond, NCDs, Insurance and IPO products. * Motilal Oswal Commodities Broker Pvt. Ltd. offers Commodities
Products. * Motilal Oswal Real Estate Investment Advisors II Pvt. Ltd. offers Real Estate products. * Motilal Oswal Private Equity Investment Advisors Pvt. Ltd. offers Private Equity products
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