28 August 2018

Market snapshot

Equities - India

Sensex

Nifty-50

Nifty-M 100

Equities-Global

S&P 500

Nasdaq

FTSE 100

DAX

Hang Seng

Nikkei 225

Commodities

Brent (US$/Bbl)

Gold ($/OZ)

Cu (US$/MT)

Almn (US$/MT)

Currency

USD/INR

USD/EUR

USD/JPY

YIELD (%)

10 Yrs G-Sec

10 Yrs AAA Corp

Flows (USD b)

FIIs

DIIs

Volumes (INRb)

Cash

F&O

Close

38,694

11,692

19,774

Close

2,897

8,018

7,577

12,488

11,049

22,800

Close

75

1,211

6,092

2,073

Close

70.2

1.2

111.1

Close

7.9

8.7

27-Aug

0.04

0.16

27-Aug

330

7,831

Chg .%

1.2

1.2

1.2

Chg .%

0.8

0.9

0.0

0.8

2.5

0.9

Chg .%

0.5

0.5

0.0

0.0

Chg .%

0.4

0.6

-0.2

1MChg

0.27

0.03

MTD

0.2

0.6

MTD*

359

9,109

YTD.%

13.6

11.0

-6.4

YTD.%

8.3

16.1

-1.4

-3.3

-5.6

0.2

YTD.%

12.8

-7.0

-15.5

-8.1

YTD.%

9.8

-2.6

-1.5

YTDchg

0.6

0.8

YTD

-0.3

10.5

YTD*

357

8,418

Today’s top research Theme

SBI: Asset quality reboot done – the way forward!

We hosted Mr. Rajnish Kumar, Chairman of State Bank of India at our conference.

Key takeaways are:



IBC will take a few more months to give a sense on the recovery value. ARCs

have a poor recovery record.



Choices for NPA: a) resolution plan with the promoter; b) change of

management with the corporation and with the promoter; c) sale to ARC; and

d) NCLT.



As per management, OTS schemes with existing promoters or orderly change of

promoters leads to better recovery.



SASHAKT program is not bypassing or diluting any of the existing frameworks;

absence of strong AMC is being felt. Resolution and recovery can be better if

they are referred earlier in the IBC process by all the lenders in the ICA.

Research covered

Key Highlights

SBI | Jubilant Foodworks | Niti Aayog | Shell India | Hindalco |

United Breweries | Dalmia Bharat | Hindalco

Automobiles | Capital Goods and Electricals | Consumer | Financilas

AGIC:

– Banks; Life Insurance; NBFC | Healthcare | Media | Metals | Oil &

Management Says

Gas | Real Estate | Retail | Technology | Utilities | Midcaps/Others

Cos/Sector

AGIC: CEO Track

Takeaways

Piping hot news

FMCG consumption down, but branded item sales on the rise

FMCG consumption down, but branded item sales on the rise The country’s fast moving

consumer goods market fell 3% by volumes in the quarter ended June even as branded

products continued to grow, according to data from Kantar Worldpanel, a global consumer

research firm owned by communications and advertising giant WPP…

Note: YTD is calendar year, *Avg

Chart of the Day: EcoKnowLedge – Will India have two budgets in 2018?

Share of agriculture in GDP has declined over the years

Share of agriculture in employment has also declined

continuously

NSS Survey period

January-December 1983

January-December 1992

January-December 1997

January-December 2003

July 2007-June 2008

July 2011-June 2012

%age employed in the primary

sector in rural areas

Male

Female

77.5

75.7

75.8

70.8

66.5

59.4

87.5

86.2

88.5

85.2

83.5

74.9

Source: State budget documents, 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

FMCG consumption down, but

branded item sales on the rise

FMCG consumption down, but

branded item sales on the rise

The country’s fast moving

consumer goods market fell 3%

by volumes in the quarter ended

June even as branded products

continued to grow, according to

data from Kantar Worldpanel, a

global consumer research firm…

2

Zee Entertainment to convert free channels into pay Subhash

Chandra-promoted Zee EntertainmentNSE 0.17 % Enterprises has

decided to turn all its free-to-air (FTA) channels into pay channels.

Once effective, channels like Zee Anmol, Zee Anmol Cinema, Zee

News, Big Magic, Big Ganga and Zee Hindustan will not be available in

any of the FTA bouquets of cable or private DTH operators. The move

is in line with the fast approaching August 31 deadline for announcing

the MRP for television channels under the Telecom Regulatory

Authority of India’s new tariff order…

Zee Entertainment to convert free channels into pay

3

Power companies facing

insolvency get no interim

relief from High Court

Power Cos Facing Insolvency Get

No Interim Relief from HC The

Allahabad High Court declined to

give private power companies

any interim relief on the Reserve

Bank of India (RBI) circular that

tightened bad loan norms on

Monday, the deadline for

finalising resolution plans for the

stressed assets…

4

Ecommerce companies may

deliver a record this festive

season

Ecommerce companies may

deliver a record this festive

season As American retail giants

Amazon and Walmart prepare to

slug it out in their first festive

season faceoff in India, industry

experts anticipate ecommerce

shipments to hit record levels

during the peak sales period that

begins in October…

5

Sale of 5% stake: Government

readies ONGC OFS

Sale of 5% stake: Government

readies ONGC OFS The Centre will

likely sell a 5% stake in the

country’s largest oil explorer

ONGC in what could be one of its

largest disinvestment exercises in

the current fiscal. At current

prices (the ONGC stock closed Rs

176.20 on Monday), the stake

sale may fetch the exchequer Rs

11,300 crore. The department of

investment and public asset

management (DIPAM) held

roadshows in the US last week to

reach out to potential investors

for the proposed offer for sale

(OFS) of the government’s stake

in ONGC…

6

Boeing to return $200 million to

debt-ridden Jet Airways To help

crisis-ridden Jet Airways, US

aircraft manufacturer Boeing is

understood to be returning a

portion of the amount paid by the

carrier to procure 75 Boeing 737

Max. Sources said Boeing is likely

to return around $200 million to

Jet…

7

From supplier to consumer,

RIL may change India's

petcoke dynamics

From supplier to consumer, RIL

may change India's petcoke

dynamics As part of a larger

strategy, RIL has set up a petcoke

gasification project where it is

likely to use its own petcoke

production and also buy more

from other producers. Industry

analysts peg the incremental buy

at about four million tonnes…

Boeing to return $200 million

to debt-ridden Jet Airways

28 August 2018

2

CEO Track

State Bank of India

Mr Rajnish Kumar

Chairman

Asset quality reboot done- the way forward

We hosted Mr. Rajnish Kumar, Chairman of State Bank of India, as part of CEO Track at our

conference. Following are the key takeaways from his session:



SBI affirmed that NPL cycle has peaked and the new NPL formation is likely to come

down in the coming quarters. However, earnings recovery through P&L will take few

more quarters.



SBI affirmed its fresh slippage guidance of <2%. Credit cost is expected to be lower

than 2% and for FY20 it should be around 1.3%. It will also depend on how fast SBI can

get resolution in NCLT as it carries ~79% coverage on NCLT-2.



SBI’s PCR is aligned with the LGD. SBI’s LGD is 54% and therefore the future earnings

should not have a provisioning overhang.



Banks have been fortunate to witness healthy recoveries in the steel sector; going

forward cement sector is expected to do well on higher government infra spending

and focus on affordable housing.



Management is seeing a credit growth revival in Auto, LCV, Renewable energy, Roads,

Oil & Gas, and Auto components.



IBC has turned out to be a very effective NPA resolution mechanism. However, it will

still take more times to get a sense of the recovery value. ARC’s have historically

shown a very poor recovery record. As per management, one time settlement

schemes or resolution with existing promoters or orderly change of promoters leads to

a better recovery.



While certain amendments have been made in the IBC process to speed-up NPL

resolution, certain sections on eligibility of bidders are being misused and causing

unnecessary delays.



To solve the stressed assets within 180 days, banks will have to adopt a coordinated

approach and will need to focus on one of the four choices: a) resolution plan with

existing promoter; b) orderly change of management; c) sale to ARC; and d) taking it

under IBC.



Sashakt program:

-

It is not bypassing or diluting any of the existing frameworks. IBC will still remain

the resolution approach for large cases or where no solution is reached by the

existing lenders.

-

Absence of strong AMC is being felt. The same is now covered under Sashakt.

-

If the inter-creditor agreement is in place and if lenders sit and decide in a

coordinated approach, there will be consolidation of stressed assets rather than

fragmentation. Currently lack of coordination among lenders is leading to a

different approach.

-

31 banks have already signed the inter-creditor agreement, more will follow.

Lenders need to decide quickly which option out of the four is to be used.

Resolution and recovery can be better if its referred earlier in the IBC process.

28 August 2018

3

Jubilant Foodworks

Mr Pratik Pota

CEO and Wholetime Director

Managing disruptions in the QSR segment

Poised to gain as a result of favorable positioning and high adaptability

We hosted Mr. Pratik Pota, CEO of Jubilant FoodWorks, as part of CEO Track at our

conference. Following are the key takeaways from his presentation.



Changes in the sector are arising due to a need for convenience, growing sensitivity for

food safety and quality, willingness to experiment and an increasing use of social

media. Jubilant is a beneficiary of these trends as they are early adapters of

technology, their innovation, improvement in product quality and taking advantage of

being the pioneers in food delivery. Delivery proportion for most restaurant

businesses accounts for anywhere between 15-60% of sales now, with share of

delivery in incremental sales growth being anywhere from 70-120%.



QSR and casual dining players are in the most favorable quadrant in the value/

experience matrix of providing both high value and high experience.



Challenges for aggregators and delivery players is the risk of anonymizing customers

as they lose personal connect, undifferentiated experience due to nature of delivery

experience and eventual margin pressure for restaurants due to dependence on

aggregators. The responses of players should be high focus on quality with audits,

delivering greater food everyday with the consistency being more important, more

focus on upgrading own platform, improving user interface to reduce dependence on

aggregators and upgrading the customer to such an extent that impulse turns into

habit thereby reducing cyclicality.



Jubilant’s key strengths to cope with the key disruptions in the sector is an ideal mix of

~50:50 in delivery and dine-in to take advantage of prevailing scenarios in the QSR

space, its high quality products particularly after the ‘ All new Domino’s’ initiative,

change in VFM focus from BOGO (Buy One Get One) to Every Day Value (habit versus

impulse as indicated above), its strong digital play (digital team has 45 members

compared to two a few years ago with some pioneering work on data analytics-

results of which will be witnessed in a few quarters) , its ability to redefine its delivery

strength and the strength of the brand. Many of these strengths are being augmented

by useful inputs from Domino’s Inc. on strategy.

28 August 2018

4

Thematic

Presentation

Sri Rajiv Kumar – Niti Aayog

Vice Chairman

Niti Aayog: India’s development model

Will services supplant manufacturing as a growth engine?

Mr Kumar divided his talk into three parts:



Role of NITI Aayog

Mr Kumar said that NITI Aayog cannot be compared to the erstwhile Planning

Commission. He further said that NITI Aayog is not the government’s ‘think tank’ but

an ‘action tank’. The government doesn’t want to remain knowledge-proof, but wants

Sri Rajiv Kumar – Niti Aayog

to hear from everyone in the academia, private industry, etc. and this is exactly what

Vice Chairman

NITI Aayog tries to accomplish. Also, NITI Aayog does not need to go through any of

the ministries or government departments. It has direct access to the Prime Minister’s

ears, and thus, is among the most effective.



Current state of Indian economy

There are at least five reasons why Mr Kumar believes the economy is at the cusp of a

major transformation.



The past four years have seen the maximum number of reforms, more than in any

four-year period. The same was also reflected by a recent paper by Brookings

Institution, which argues that the poverty rate in the country has declined to 5-6%

from 20-25% a few years ago. If so, the discourse needs to shift from poverty

reduction to achieving prosperity.



Public spending is the only engine firing the economy at this point in time, which

was provided with ammunition through the crash in oil prices.



However, private investments are yet to pick up. Within private investments, the

corporate sector has done well, but household investments (or real estate) have

fallen sharply.



The government has initiated a number of reforms ranging from Goods & services

tax (GST), Insolvency and bankruptcy code (IBC), RERA, JAM, abolition of FIPB

(foreign investment promotion board), 100% FDI (foreign direct investment) in

many sectors, etc.

Sri Rajiv Kumar – Niti Aayog



Finally, the zero-tolerance policy for corruption has helped the economy. The late

Vice Chairman

Mr. Rajiv Gandhi lamented decades ago that if the total allocation is INR1, then

only 15p from that allocation is passed on to the poor. The number must have

increased to 85p, if not more now.

Mr. Kumar also believes that real GDP growth could be 7.70-7.75% in 1QFY19.



Five concerns/challenges highlighted by Mr. Kumar



Mr. Kumar strongly believes that the negative narrative about the economy has

continued for no good reason. In fact, foreigners seem more positive than

domestic investors.

28 August 2018

5









Trade balance is a serious challenge. The fact that India has been a net importer

almost every year since independence is unacceptable. In particular, Mr Kumar

seems worried with the fact that the share of India’s exports has not increased.

Third, the extent of malnutrition is a serious challenge for the economy. As per

Sri are Kumar – Niti Aayog

data, 38% of childrenRajivunder-nourished and about 50% mothers are anemic.

Vice Chairman

Such an extent of malnutrition encapsulates the human development issue, which

may then translate into lack of skills and talent.

Fourth, the economy needs to have better water management. Linking rivers,

which Late Prime Minister Atal Bihari Vajpayee talked about, could be a solution.

Finally, as per data available recently, less than 5% (or 2.7m out of about 58m) of

small and medium enterprises (SMEs) have access to bank credit. The government

is taking measures to increase bank credit to SMEs as much as possible through

schemes such as Atal Innovation Mission (AIM).

Lastly, Mr. Kumar clarified that he is not worried about the recent weakness in the Indian

Rupee (INR).

Thematic

Presentation

Mr Nitin Prasad

Chairman

Shell India

Energy Systems in Transition - The India Perspective

We hosted Shell India head Mr. Nitin Prasad for CEO track in our conference. Key

takeaways of the same:



Since the Paris convention, there has been an increased focus globally at reducing

greenhouse gases. There is a mosaic of alternates that would play an important role

including electrical vehicles, hydrogen and renewables.



While no one can dispute the power of disruptive forces, the current knowledge

shows that fossil fuels would remain in vogue for another 2-3 decades. Oil

consumption is expected to peak in 2030s while gas consumption would take another

2-3 decades to peak out. The biggest growth would be from renewables. Although

hydrogen technology is still two decades from commercialization, it has a very high

energy density and would be the best alternative to fossil fuels for transportation.



Per capital consumption of energy in India is still a fraction of the consumption in the

developed world. Shell has been present in India since the last ~25 years through its

investments in exploration and production, fuel retailing, lubricants, and LNG imports

to name a few. It is growing stronger by the day and India is a key market for future

investments.

28 August 2018

6

Thematic

Presentation

Mr Satish Pai

Managing Director

Hindalco

Leading sustainably, with balance!

Building a sustainable growth model



Hindalco is focusing on a long-term sustainable growth model. At Novelis, recycling of

metal has increased from 30% about a decade ago to 57% in FY18. Recycling of metal

consumes 95% less energy. In India, 17-18 captive bauxite mines meet its entire

requirements. A diversified mix of coal supply from captive mines and linkages from

Coal India meet its entire energy requirement. Captive mines come handy when Coal

India supply falls short. Hindalco continues to invest for reducing environmental

impact. Its captive power plants will meet SOx and NOx norms before the deadline.

Hindalco is already reusing 70-80% of fly ash that it produces and is targeting to reach

100% reuse. It is setting up 30MW solar plant and a hydro unit to meet RPO

obligations.

Novelis’ transformation through strategic shift; Aleris is a strategic fit



Novelis has increased its EBITDA from less than USD500m in FY09 to USD1.2b in FY18

through transformation of its business by (1) exiting low margin businesses; (2)

increasing recycling capacity; and by (3) capitalizing on the exponential growth in the

new high- margin auto business. Acquisition of Aleris will consolidate its market share

in the auto business, drive synergy from Aleris’ hot mill in China and open

opportunities in aerospace.

Hindalco is focusing on the following areas for capital allocation to capitalize on:

High growth potential in Auto FRP – expect demand to increase 50% over CY17 to

CY20 – adding auto line in the US and China.

Large under penetrated VAP at just 23% in India v/s 64% in the world – investing

INR60-70b and plans to bring 67% of primary metal production to end user directly.

Huge potential in defence and aerospace.

Evaluating expansion of copper smelter and securing long-term concentrate supply.

Hindalco’s RoCE has increased to 9.7% and focus is to improve it further.

Identifying Growth Areas



1)

2)

3)

4)



Focus on improving RoCE

28 August 2018

7

United Breweries

Mr Shekhar Ramamurthy

Managing Director

Industry prospects continue to recover

Strong moats and adaptability enabling them stay ahead of peers

We hosted Mr. Shekhar Ramamurthy, MD of United Breweries, as part of CEO Track at our

conference. Following are the key takeaways from his presentation.



Beer is growing faster in recent years owing to changing demographics and

perceptions with beer being seen as a good entry-point product, cooler to drink and

more desirable having lesser alcohol content.



Management is bullish on achieving higher than industry growth for the next 3-4 years

led by them remaining highly relevant from both the urban and affluent customer as

well as the mid-tier customer. The former will drive margins while the latter will

enable build on market leadership.



In premium, each of its brands is growing by at least 30% versus mid-single digit

industry volume growth. The company will introduce craft beer by the year-end,

having recently introduced draught beer under the Heineken brand as well. It is also

targeting the non-alcoholic drinks market with non- alcoholic and flavored beers and

has introduced a host of imported beers covering a multitude of flavors to the Indian

palate.



For the mid-tier customer, apart from retaining and buttressing the Kingfisher brand

experience through clever marketing and associations, it has also successfully

introduced Kingfisher storm, which has already achieved 3-5% market share in the 4-5

states in which it has been launched. It also recently launched the iconic Amstel brand

as a strong beer in India. The burgeoning repertoire of brands enables the company to

serve a host of emerging customer segments.



Sustainability is a huge part of its long-term business plan with targets of being 100%

water neutral by 2025. It also has a target of meeting 50% of its power requirements

by sustainable sources over the next three years from 15% currently.

28 August 2018

8

Thematic

Presentation

Mr Puneet Dalmia

Managing Director

Dalmia Bharat

Indian Cement Sector – Best is yet to come

Takeaways from CEO track; Pace of demand growth will outpace supply

We hosted Mr. Puneet Dalmia, MD of Dalmia Bharat, as part of CEO Track at our

conference. Following are the key takeaways from his presentation.



The Indian Cement Industry witnessed a supply CAGR of 11% and demand CAGR of

only 6% during FY07-17. Price during the period increased at a CAGR of 5% while

EBITDA grew 8%.



This is expected to turn favorable as supply is expected to increase by only 4% over

FY18-23 driven by difficulty in limestone access and credit availability and more

stringent land acquisition laws. The quick insolvency processes will also lead to more

consolidation in the industry.



Demand is expected to grow at a CAGR of 8% over FY18-23 due to housing projects

like PMAY and various road projects.



As a result, utilization is expected to increase from 62% in FY18 to 79% in FY23 driven

by consolidation in the industry.



Dalmia Bharat plans to achieve profitability by focusing on being a premium brand and

adopting land cost control measures.

28 August 2018

9

Thematic

Presentation

Sri Piyush Goyal

Minister of Railways & Coal, GoI

The Governance Transformation under NDA - 2











The government is highly focused on the synergy between roads, railways, aviation

and ports. A number of examples were provided on how the dedicated freight corridor

(DCF) was linked with ports and railways. The government is seriously trying to exploit

its potential through higher cooperation between different modes of transport,

according to Mr. Goyal.

As far as the GST collection is concerned, there is no need to worry at all. Mr. Goyal

seemed extremely confident of meeting the tax targets and fiscal deficit targets as

well. The Minister explained that the tax collection is usually lower in the first half of

the year, which picks up in the latter half in an approximate ratio of 44:56.

Trade balance (or current account deficit) is certainly a serious macro concern at this

point in time; however, rising oil prices and global environment is not very helpful, Mr.

Goyal said.

In the case of higher coal imports, the Minister agreed that coal imports are high. But,

he believes that it should remain high, as is the case in every growing economy. Since

thermal energy is the base of energy in the country, growing demand makes it almost

inevitable to have higher coal imports.

Finally, while Mr. Goyal approves of the benefits of linking property transactions with

Aadhar card, he clarified that the government is still awaiting the Supreme Court's

order on the mandatory nature of Aadhar card. The Minister, however, mentioned

several benefits of tracking property transactions, generating ideal stamp duty

collections, etc., if the Aadhar linking is permitted.

28 August 2018

10

‘Management Says’

Key takeaways from Motilal Oswal Annual Global Investor Conference 2018

Company

Takeaway

Impact

Automobiles

A. Lightweighting trend to be a major revenue driver going ahead.

It has potential to reduce fuel consumption by 15-18%.

B. Expect revenue from aerospace to double in the next 3 years.

C. Domestic non-auto revenues are expected to be healthy led by increasing

contribution from defense and agriculture mechanization segment.

D. US CV growth to continue in CY19, post which growth could taper.

A. Expect to grow faster than industry, with traditional business (switch,

lights, horns) expected to grow at 15%, while new business like alloy wheel

to grow >30% over next two years.

B. 3-4 years vision: Expect revenue to double in 4 years, EBITDA margin at

12.5%, PAT to grow 2x in 3 years and ROCE >22%

C. Huge opportunity in alloy wheels, since penetration is low currently at

~25%. Increased premiumization would lead to increase in penetration.

A. Expect retails/ wholesales to be slow in Aug-18 impacted by west Bengal

and Kerala issue. Total impact of ~40-45k units

B. BS-6 to drive healthy growth in service and retail business. Giving training

to ~65k mechanics for BS6 related sales service.

C. Price increase expected in Sep-18 which will cover 1QFY19 inflation.

D. intensity of incentives/offers/schemes expected to go up during festivals.

+ ve

+ ve

+ ve

- ve

+ ve

+ ve

+ ve

- ve

+ ve

+ ve

- ve

Impact

Bharat Forge

Minda Industries

Hero

MotoCorp

Company

Takeaway

A. Premiumization trends continue across fans, lighting, and appliances.

Capital Goods and

B. Key segments witnessing strong growth in FY19 are Water, Roads, T&D,

Metros, household electrification and hydrocarbons.

Electricals

C. Orders from the Middle East are seeing a revival post the rise in crude

prices.

A. Intend to launch at least one new innovative product each year across the

categories they operate in. Aim is to be a No. 2/3 player across categories.

B. Market strategy roll-out to be completed in the next 12-18 months. Aim is

to increase sales via own distributors and have a “Distributor lead” model.

C. Consumer meaningful innovations over the last few years include: a) Anti-

Crompton Greaves

dust fans and Air 360 fans; b) 5-star LED bulbs; c) CREST mini pumps; and

Consumer Electricals

d) Air coolers with high cooling and energy efficiency.

D. Premiumization trend continues across fans, lighting, and appliances.

E. Crompton was historically strong in B2B lighting and over the past few

years, its focus on B2C lighting has led to strong market share gains in this

segment as well.

+ ve

+ ve

+ ve

+ ve

- ve

28 August 2018

11

Company

L&T

Takeaway

A. Maintains order inflow guidance of 10-12% for FY19; key segments driving

growth are Water, Roads, T&D, Metros, household electrification and

hydrocarbons.

B. Orders from the Middle East are seeing a revival post the rise in crude

prices.

C. Expect five coal-fired power plants to be awarded in FY19 totaling 6GW.

D. Private capex is still muted. Can be divided into three buckets: a) Industrial

capex seeing some signs of a revival but elections could result in delays in

orders; b) Residential capex continues to be subdued and FY17 was the

trough; and c) Consumption capex picking up in some pockets.

E. Aim of the buyback is to improve ROE’s for the company and efficiently

utilize the excess cash on the books.

Impact

+ ve

+ ve

+ ve

-ve

+ve

Company

Takeaway

A. Demand recovering at healthy base but next quarter will be a test

A. No acquisitions on the plate with focus on ROCEs for the time being.

B. Target from the Indonesian version of Project Pi (their cost savings

program) is similar to India at 2% of sales over a 1-2 year period.

C. Technology in distribution and data analytics was a relatively weak area

earlier. The company carried out a benchmarking exercise with peers on

nine pillars and the finding was that it is among the top 3 in the sector.

D. Crème is doing well in hair color. In powder, it launched Nupur in the

Henna Segment. Going forward, more disruptions are expected.

E. Improving the reach in Indonesia, beyond Jakarta and surroundings with

forays into Sumatra and Java.

A. Combination of government initiatives including good sowing owns up

well for demand prospects.

B. Cost savings were 7% of sales last year and were maintained for FY19.

Cost savings are led by the CCBT (Country Category Business Teams). This

will be led by factors across cost items like logistics robotics on

warehousing, absence of cascading taxes on GST enabling rationalization

of depots by 30-40%, etc.

C. Premiumization is a trend across all categories. Even in categories like

laundry where premiumization pace is still healthy, 60% of the category is

still masses-driven.

D. Bargaining power vs suppliers is increasing as scale increases further.

E. Unorganized segment isn’t going away as expected

Impact

+ ve

+ ve

+ ve

+ ve

Consumer

Godrej Consumer

ve

+ ve

Hindustan Unilever

+ ve

+ ve

+ ve

- ve

28 August 2018

12

Company

Banks

AU Bank

Yes Bank

IndusInd Bank

Takeaway

A. Corporate credit growth at the system level has picked up albeit at a slow

pace.

B. New NPL formation to moderate from FY19.

C. Margins in the life insurance business to be driven by protection business.

A. Existing three products will form 80% of the new disbursements balance,

20% will be from business banking and corporates.

B. SA rate has been increased to 6.75% for INR10 lac and above.

C. Company will need tier-2 capital and is open to foreign funding.

D. Company’s on-book yield is 14.5%, incremental yield is 13.5% and MSME

yield is 15%.

A. MCLR repricing to happen in 3-6 months, near-term to maintain status

quo on margins.

B. IBU book margins at 1.6-1.8%, which impacts the overall margins.

C. Capital-raise likely over the next 6-12 months.

D. Yield on retail assets not high, the bank will push retail products after

cycle softens and competition eases.

A. Pilots in place and running up for BHAFIN customers, 8-9m BHAFIN

customers expected to be IIB customers. Stage-1 would be to form a

liability franchise, and Stage-2 would be to cross-sell asset products.

B. Scaled up to 2,000 villages but will continue to do more for pilot to be

successful. Idea to use grocery shop owners as distributors for consumer

durables.

C. Great scope from reconstruction opportunities in Kerala.

D. Overloading only in selective CV’s; quite bullish on CV and vehicles.

E. Insurance, credit cards, mutual funds are healthily contributing to fee

income.

Takeaway

Impact

+ ve

+ ve

+ ve

+ ve

- ve

+ ve

+ ve

- ve

+ ve

- ve

+ ve

+ ve

+ ve

+ ve

Company

Impact

Life Insurance

A. Management not in a hurry to build protection just to boost margins; fully

focused on need-based selling.

B. All the ‘credit protect’ sold is with single premiums and not regular

premiums.

C. Company’s EV sensitivity to interest rates is the least as compared to

peers as company hedges large part of their protection book.

D. Company has very few competitors in annuity business. Company writes

annuity business only for age 45 and above.

A. Jan Dhan and associated insurance initiatives from government has

significantly increased protection awareness. Further rising consumer

income is also driving growth in protection business.

B. Mortgage business penetration varies from 20-90% in affordable housing

segment.

C. Margin improvement and VNB growth to be driven by overall growth, mix

and persistency. Expense ratio to be a limited driver.

D. Capital consumption is faster in the protection business; not looking to

raise equity capital and will look to reduce special dividend or to raise

subordinate debt.

+ ve

+ ve

+ ve

+ ve

+ ve

+ ve

+ ve

+ ve

HDFC Life

ICICI Prudential Life

Insurance Co. Ltd

28 August 2018

13

Company

NBFC

IHFL

SHTF

MMFS

SCUF

CAFL

Takeaway

A. Home loan growth robust, especially in the affordable housing segment.

B. Spread compression possible in some cases.

C. New axle load norms to have a minor impact on CV demand.

A. ~20% positive impact on net worth due to transition to Ind-AS.

B. Loan yields have increased 30-50bp; should help to largely maintain

spreads.

C. Good traction in online home loans – 25% of incremental business.

A. Expect 18-20% AUM growth if monsoon is good.

B. Credit costs to decline to ~2.5% in FY19 as per IGAAP.

C. 4-5% impact on M&HCV demand due to new axle loading norms.

A. 100 new branches opened last year contributing to growth.

B. Targeting RoA at 2.7% for FY19.

C. Will focus on mid-sized and used CV segment.

A. Expect 50-60bp drop in yield from 20.1% in FY18.

B. Hopeful to exit RoE of 18-20% in FY18.

C. Average tenor of SME loans increased from 36 months to 48 months over

the past 1.5 years.

A. Expect to expand branch count to 600 branches over the next five years.

B. Will run down infra lending book to ~INR30b in the next five years.

C. RoE to improve to 12% over the next 4-5 years.

Takeaway

A. Despite price erosion in the base business, the US market remains an

interesting opportunity driven by complex launches and constancy in

compliance.

B. Companies continue to mitigate increased prices of key starting materials

used to make API, either by changing source or in-house manufacturing.

C. Domestic formulation market is expected to grow at 10-12%, adjusting for

the low base of last year.

A. Institutional business to reduce to INR1.3b in FY19 vs INR4b in FY18 with

two major countries – Nigeria and Kenya going out of the GF program.

B. Company to see high-single digit growth in Africa and mid-teens growth in

Asia. Domestic formulation to grow in high-single digits.

C. Margins to decline 26-27% for FY19 from 31% in FY18 levels due to two

newly commissioned facilities, revenues from which have not kicked in yet.

A. In terms of profitability, Chronic business in domestic formulation segment

is now EBITDA profit, albeit in single digit EBITDA margin. EBITDA margin

for Acute segment is about ~25%. (+ve)

B. MR productivity is higher in Acute business with INR6m/MR per year.

While for Chronic it is almost half. (-ve)

C. Company expects better performance in the domestic segment in 2QFY19

on the back of a better monsoon season. (+ve)

D. Even the US business is in single-digit margin, which is dragging overall

EBITDA margin for the company.

E. Alkem expects approvals in the US in the next 2-3 months for its Baddi and

Daman facility.

Impact

+ ve

+ ve

- ve

+ ve

+ ve

+ ve

+ ve

+ ve

- ve

+ ve

+ ve

+ ve

- ve

+ ve

+ ve

+ ve

+ ve

+ ve

Impact

+ ve

+ ve

+ ve

- ve

+ ve

- ve

+ ve

+ ve

+ ve

- ve

- ve

Company

Healthcare

Ajanta Pharma

Alkem

28 August 2018

14

Company

Aurobindo

Biocon

Cipla

Dr. Reddy

GSK Pharma

Shilpa Medicare

Strides Shasun

Takeaway

A. Injectable business in the US would ramp up on expected lines. Production

stopped due to bag-line related issue, but is expected to re-start from

October 2018. Maintaining target of USD200m injectable business in FY19.

B. There has been some improvement in the US base business due to

product rationalization by competitors.

C. ARBP is on track to garner USD50-60m sales in OTC segment for FY19

compared to USD20m in FY18 on the back of new launches and increased

traction in existing products.

A. BIOS guided for strong growth in biologics in 2HFY19 than 1HFY19 on

launches in newer markets and better traction in existing market.

B. BIOS guided for mid-teens YoY growth in branded formulation, partly on

low base of last year.

C. Company has guided for capex of INR15b over next two years, mainly for

greenfield expansion.

D. Of the capex planned, one will be for an anti-bodies facility in Bangalore.

This will be completed in two phases in four years. First phase is expected

to be completed by 2020 and commercialization is to start from 2021.

A. Though 1QFY19 US sales were flat YoY, Cipla remains confident of better

traction going forward from recent as well as new product approvals.

B. Sales of a couple of US products were impacted due to supply side issues.

With it now being resolved, Cipla expects sales to pick up, aiding overall

sales growth in the US. Cipla guided for an exit run-rate of annualized

USD500m US business from 4QFY19 onwards.

C. YoY growth in Domestic Formulation has been lower-than-expected due to

seasonality in acute segment in the recent past and high base of past year.

However, it remains confident of healthy growth going forward.

A. DRRD is in the process of data investigation and analysis at Srikakulam API

site with respect to observations cited in USFDA warning letter in Nov-2015.

B. DRRD has potential launches in 2HFY19 with a market size of ~USD25-40m

per product.

C. Healthy growth in EM markets is expected on the back of new launches

and increased traction in existing products.

A. GSK is in the process of rationalizing its portfolio by hiving off low-margin

products.

B. To grow in line with Industry for next 1-2 years.

C. GSK has increased its MR count by 30% YoY to enhance focus in tier-3 and

tier-4 cities.

D. The company has guided for EBITDA margin in the 20-25% range for the

next 1-2 years.

A. Low volume API prices were impacted least due to pollution led slowdown

in manufacturing in China. SLPA being into such APIs had minimal impact

from the increased prices of key starting material imported from China.

B. With 34 pending approvals and compliance in place, SLPA is well placed to

see strong US growth.

C. Capex related to Biologics (~INR1.5b) and transdermal patches (~INR1.2b)

remain on track and are to be spent over the next 1-2 years.

A. To witness significant operating leverage, with the US business now

breaking even. Sales are expected to ramp up from recent and upcoming

approvals.

B. STR is in the process to increase growth as well as profitability in the

Australia market through increasing reach, enhancing portfolio and

Impact

+ ve

+ ve

+ ve

+ ve

+ ve

+ ve

+ve

+ ve

+ ve

+ ve

+ ve

+ ve

+ ve

+ ve

+ ve

+ ve

+ ve

+ ve

+ ve

+ ve

+ ve

15

28 August 2018

increasing manufacturing from India facility.

C. STR guided for ~400bp EBITDA margin improvement over the next 2-3

years.

D. Expect 2H to be much better than 1H due to approvals for key products.

E. STR has about nine First to Files (FTFs).

Company

Takeaway

+ ve

+ ve

+ ve

Impact

Media

A. Digital business is expected to start contributing to FY19 ad revenue.

Likely to share key metrics from 2QFY19.

B. Maintained guidance of outperforming industry ad revenue growth. So if

the industry grows at 10-12%, Zee ad revenues can grow at over 15%.

C. Expect low-teen subscription growth in FY19 driven by phase III

monetization, HD penetration from current single digit, and 3-4%

continued TV penetration.

D. ZEE5 targets to become the no. 1 entertainment OTT app in India in the

next 18 months.

E. Expects new business (movies, music, digital and live-events) to contribute

~30% of the overall revenue in the near-term.

Takeaway

+ ve

+ ve

+ ve

+ ve

+ ve

Impact

ZEE Entertainment

Company

Metals

A. LME is lower despite the impact of increase in input prices partly due to

the play of currencies. USD has appreciated against most other currencies.

Thus, while LME is not higher, cost of production in USD terms has come

down.

B. Aleris EBITDA guidance does not consider any synergy benefits. It only

considers the EBITDA potential from the new US auto line, where visibility

is strong.

C. It expects the Supreme Court to relax the petcoke ban for the aluminum

industry, just like it did for cement and some other industries where

petcoke is used as feedstock.

A. Domestic demand remains strong. Infrastructure and auto sector

particularly driving demand.

B. Realisation is likely to be marginally lower QoQ in 2Q. Pricing is expected

to recover from Sep/Oct.

C. Coking coal cost will be marginally higher. INR depreciation could have

some impact on cost.

D. Bhushan Steel: Margin improvement will be driven by branding of Tata

Steel, iron ore integration, squeezing working capital, and operating

process optimisation. Ramp-up to 5mt likely in two years.

Hindalco

Tata Steel

28 August 2018

16

Company

Takeaway

Impact

Oil & Gas

A. A. Gas consumption in the country likely to be driven by upcoming six

fertilizer plants, refineries and CGDs. Power sector can contribute only if

some reforms come up. Expect transmission volume to grow from the

current 107mmscmd to ~120-125mmscmd over the next 3-4 years.

Unbundling likely on the back burner, unified tariff imminent, but may

take more time to fructify.

B. B. With high crude oil prices, US contracts very profitable. In FY19, GAIL

expects to off take ~5.8mmtpa - placement of almost 90% of this has

been taken care of. Almost 60% of FY20 volumes have been placed.

Although, it has not signed any long term contracts, the company is

confident of placing volumes profitably in the current scenario.

C. C. Some teething issues exist, but the petrochem plant is broadly

stabilized. There are no further major expansions coming up in India for

another 3-4 years. The tender for Dabhol LNG terminal's breakwater

would be floated soon. A total expenditure of INR12b is expected,

including INR5b on utilities. Post the tender award it would take another

three years for completion.

A. We expect volume growth in CNG to continue in double digits led by

commercial vehicles, new geographies and inter-city travel. Restrictions

on diesel vehicles could see conversion in LMVs which could be a huge

potential for growth. Due to unequal VAT in Delhi & UP, prices in Delhi

are INR7/kg lower which has also been driving volume growth.

B. Bids for new Geographical Areas have been very aggressive as the recent

awards suggest. Many of these will face penalties, especially in household

segment. Many of these are likely to fail unless some other structural

change is brought in the future.

C. Do not expect any regulation to come up on pricing. CNG currently is

substantially cheaper than alternate transportation fuels.

A. Bidding in the 9th CGD round very aggressive. Most traditional players left

out, which means that bids were on very low IRRs. Only time will tell how

many of these would be successful.

B. Penetration in Mumbai and adjoining areas for CNG & PNG-dom tickets is

still low. Unlike Delhi, volume growth in Mumbai is primarily driven by

economics - there is a restriction on the number of CNG stations that can

be opened up in a busy city like Mumbai. Pollution would nonetheless

remain a concern. Expect volume growth of 5-7% over the next few years.

C. Expect more restrictions on polluting fuels like petcoke and fuel oil. Mumbai,

however, does not present much potential in the industrial segment. There is

a lot of potential though in the commercial segment, which is being tapped.

Do not expect any regulation to come up in pricing of CGDs.

GAIL

IGL

Mahanagar Gas

28 August 2018

17

Company

Takeaway

Impact

Real Estate

A.

DLF has revised its strategy in residential development by adopting the

build/complete and sale model. It has INR150b worth of inventory, which is

largely complete and it expects to sell INR25b annually.

B.

60% of the inventory is premium and luxury. This includes projects like the Crest

(

INR50

-60m ticket size) and The Camelias (INR250-300m ticket size).

C.

The company has started seeing green shoots in terms of price increase in Delhi

and

Gurgaon

market.

D.

Under the new model, the company does not foresee any working capital issues

as the land is already paid for and construction can be funded through a bank

loan at 9%.

+ ve

+ ve

+ ve

+ ve

+ ve

+ ve

+ ve

DLF

E.

In DLF, the

company

plans to be fully debt free by end-FY19.

F.

In DLF, company has a potential of 180msf of residential development and 40msf

of

commercial

development. In DCCDL it has 19msf of potential commercial

development.

G.

Company

expects

rental income of INR25b annually to grow by 15% through mix

of volume and rental increase.

The Phoenix Mills

A. Ahmedabad JV with Safal Group is the only JV the company has entered

into till date. Safal Group was unwilling to part with the land but they

were willing to pay PHNX the required fees to develop the design and

manage the property development as per PHNX’s requirement, which is

what led to the joint venture.

B. PML has committed majority of equity infused by CPPIB and is not looking

to increase the exposure. Markets like Hyderabad, Chandigarh, and

Mumbai are on its radar. Going forward, PHNX will look to acquire ready

assets.

C. The company has INR5b cash on its balance sheet and debt of INR3b as of

August 2018.

D. Expect substantial free cash flows from residential projects - Selling prices

for the projects more than doubled in the last five years (CAGR of 18-20%

over the last five years), while constructions costs have increased by only

5-10%.

E. The company undertook residential development in Bangalore due to the

track record of such developments surrounding its own malls delivering

substantial returns. Bengaluru - Commenced handover of flats in OBW

Towers 1-5; Execution at OBW Tower 6 is progressing well. Chennai -

Construction completed in Tower A, B and C; Occupation Certificate for

the towers received.

F. PHNX will incur a cumulative capex of INR4.8b till FY23, of which the

company has already invested INR2.1b.

+ ve

+ ve

+ ve

+ ve

+ ve

+ ve

28 August 2018

18

Company

Takeaway

Impact

Retail

A. Madura division to register high-single digit SSSG and add ~350 gross

EBOs.

B. Pantaloons is expected to add ~60 new stores and single digit SSG is

driving 18-20% revenue growth.

C. Expect ‘innerwear’ category to contribute INR2b revenue in FY19. Target

to reach INR5b in next three years led by an increase in distribution

channels.

D. Madura EBITDA margin to expand 100bp annually for next three years led

by healthy SSSG, network expansion and premiumization.

E. Pantaloons EBITDA margins would expand about 100bp led by SSG, uptick

in private labels contribution (expected to reach 70-75%) and scale

benefits.

A. Growth in July was good but August was relatively subdued meaning

growth could be at the lower-end of the 20-25% range for FY19.

B. Walk-ins continue at a healthy pace leading to healthy growth in the

exchange business, which is already 43% of procurement and could

exceed the 50% target for the next two years.

C. Target of 40 stores a year is likely to be maintained, almost all stores being

franchised.

D. Bigger stores have dedicated wedding collection, what they may lose out

on gross margins is recouped on operating leverage as fixed cost

absorption is better. Target of wedding jewelry and studded jewelry is on

track.

E. Watches business EBITDA margins likely to be around 12-15% for FY19

versus earlier statement of double digit margins.

+ ve

+ ve

+ ve

+ ve

Aditya Birla Fashion

and Retail

Marginally

-ve

+ ve

Titan

+ ve

28 August 2018

19

Company

Takeaway

Impact

Technology

A. Naukri.com benefiting from B to B model as compared to peers, saw

improvement in IT traction going forward

B. 99 acres will be benefited in terms of margins from evolution of single

large brokerage houses like Anarock

C. Zomato will see explosive growth but also proportionate burn during the

year. FY18 cash burn should not be the benchmark

A. Deal sizes in digital are smaller, but deals are executing better margins on

standalone basis but higher investments for deal sourcing are taking

margins similar to company level

B. US have been showing much greater growth, although challenges persist

in Europe business. Overall, renewals-led pressure should be behind after

1HFY20

C. Both subcontracting and digital is taking into play to source deals in newer

technologies. Margin to be in the range of 19.5-20.5%

A. Persistent will deploy traditional dividend policy for its excess cash; will

hold on to buyback for potential future acquisitions.

B. Persistent has been late on its IOT front, it expects USD 3-5mn this year

from IOT, revenue will be generated from analytics which uses data from

machine interaction.

C. Persistent expects 100 bp increase in its operating margins going forward,

guiding a range of 16-16.5%, increase in margins would be a result of

better execution on reseller business.

A. Beyond BFSI and Retail company grew at 13.2% cc, better execution

promised in BFSI going ahead.

B. Digital is currently composed of hundreds of technologies, many of which

are subscale. These still need investments, and profitability is bound to

increase as technology matures.

C. Ramp up of large deals is staggered through the course of the year. Hence,

normal seasonality should manifest this year too.

Takeaway

+ ve

+ ve

-ve

+ ve

- ve

+ ve

+ ve

+ ve

+ ve

+ ve

+ ve

+ ve

Impact

Info Edge

HCL

Persistent

TCS

Company

Utilities

A. 50% of revenue and EBITDA is regulated, which had low volatility. While

higher coal prices impacted profits at Mundra, there is more than

corresponding benefit at coal mines. Hence, the volatile portion of

business is even lower.

B. Indonesia DMO will impact profits by USD10-15m. Indonesia is considering

a proposal to allow higher coal mining limit, with no DMO obligation on

incremental production. It could offset some portion of the impact DMO.

C. Non-core asset sale remains the focus. Tata Project is the key non-core

asset remaining to be sold.

Tata Power

28 August 2018

20

Company

Takeaway

Impact

Midcaps/Others

A. MF platform is a significant opportunity. Revenues here have the potential

of doubling YoY for next few years. May do ~INR200m this year. (+Ve)

B. The change of pricing in equities cash from ad valorem to per-trade did

not succeed. Hence, have reverted to earlier pricing methodology (-ve)

C. Technology will be the differentiator in commodities segment. Have

recruited among the best personnel in the space. (+ve)

A. Delta has already acquired a 100 acre land for the purpose of setting up

an integrated resort. It is looking to purchase another 50 acre land parcel

for the same purpose.

B. The company is expecting an announcement of an official notification on

land-based casino policy soon. The broad contours of the policy have

already been announced by Mr. Manohar Parrikar, Chief Minister of Goa

in the recently assembly session.

C. Three licenses will be used to set up three land-based properties catering

to different segments, just like the floating boats.

D. Currently, about 6.5m tourists visit Goa, which is expected to grow at 7%.

E. Online business should continue to see 30-40% growth, however, margins

will remain under pressure due to increased competitive intensity and

increased promotion related spends.

A. Raw material supply disruption will take another 2-3 quarters to

normalize. Some products have seen inflation of 50-60%.

B. Orange oil, a key raw material, which was up 30% last year is expected to

increase 20% this year.

C. In the fine fragrances segment, fragrance accounts for 10% of the selling

price versus 2% for other products.

D. China-based Anhui Ruibang Aroma acquisition will provide access to

another Tonalid manufacturing facility - to enable SHKL to consolidate its

market leadership in the segment.

E. The company has already won new business of INR300m from its existing

clients.

F. The company will incur maintenance capex of INR200-250m in FY19.

G. Fragrances and Flavors’ segments are expected to grow at 20% CAGR in

FY19 despite a weak 1HFY19. However, margins will remain subdued.

A. Impact of GST and loss on one large customer on growth have bottomed

out and company can see better growth going ahead

B. Will be open to businesses with lesser Gross margins, if there is no

significant uptick in fixed costs. May imply lower margin but similar /

better absolute operating profit.

C. Increase in number of registered companies from 7.5m to 12m in the last

12 months since GST came into effect should positively impact the growth

rate.

+ ve

+ ve

+ ve

+ ve

+ ve

- ve

- ve

+ ve

+ ve

+ ve

+ ve

+ ve

+ ve

- ve

+ ve

Delta Corp

SHKL

Teamlease

28 August 2018

21

In conversation

1. HDFC LTD : Open to acquisitions in both general & life

insurance segments; Keki Mistry, VC & CEO





General insurance business and education finance arm will be the next in line to

be listed in next few years.

HDFC Credila we put in money, it is education finance business. Then we said we

would look at the health insurance business. It would require capital whether it

is organic or inorganic, it would require capital. So that is a secondary approach.

Third is we talked about stressed real estate business so whilst it would be a

funds structure, some percentage of the money in that fund will have to be put

in by us to give confidence to ultimate investors, all of that will consume capital

over a period of time

2. SBI : Confident that peak of npa recognition has been reached;

Rajnish Kumar, Chairman



As far as the recognition of the non-performing assets (NPAs) is concerned,

March 31, 2018 the peak has been reached. If you look at the results of the

banks, in the first quarter, irrespective of their profit and loss (P&L) one trend is

clearly visible that the NPLs are coming down and going forward also they will

continue to come down

3. LIC HOSUING FINANCE : Pickup in realty sector should help lift

growth rates; Vinay Sah, MD & CEO



Last year our growth rates for the fiscal year 2017-2018 were in the range of 18-

19 percent. Because the loan book base is very high, we would try to reach that

number but it should be more than 15 percent by maybe a couple of

percentages. Loan book growth rate is also helped by whatever prepayments we

are able to stop. We have also done a lot of work on re-writing of the cases

whereby there is some sort of exit can happen and because these rewriting was

more than last year, prepayments were less than last year so that has also

contributed to better growth rate in the loan book.

28 August 2018

22

From the think tank

1. Games Indian banks play in injury time



Corporate banking in India is one of those painful-to-watch soccer games

stretching goallessly into injury time. Neither the creditors nor the debtors have

the energy to carry on, yet they’re dreading the long whistle: that’s when both

sides lose. The match was supposed to end Monday, going by the 180-day

deadline the Indian banking referee gave lenders on 1 March to restructure

defaulted loans of a minimum size of around $300 million, failing which they

would have to send the non-performing borrowers to the insolvency tribunal.

2. MSP hike won’t help bulk of rural folk, govt advisors may

need to go backto the drawing board





Even as it remains to be seen whether the government will be able to

successfully implement its promise of buying all crops from farmers at a

minimum support price (MSP) equal to 1.5 times their A2+FL costs, or make

deficiency payments based on the MSP if they can’t procure the crop, the latest

report from Nabard—All India Rural Financial Inclusion Survey 2016-17—as well

as Price’s latest all-India survey add new perspective to the debate.

For one, of the 212 million rural households the Nabard survey talks of, just

around 100 million are considered to be ‘agricultural’, effectively implying that

the MSP-based policy will apply to just half of rural India. Indeed, the actual

impact will be far less since Nabard defines an ‘agricultural household’ as one

that earned at least Rs 5,000 from various crops in the last one year and has at

least one person employed in the sector, even if just for a temporary period in

the last year; so the benchmark for being ‘agricultural’ is very low.

28 August 2018

23

Click excel icon

for detailed

valuation guide

Valuation snapshot

Company

Automobiles

Amara Raja

Ashok Ley.

Bajaj Auto

Bharat Forge

Bosch

CEAT

Eicher Mot.

Endurance Tech.

Escorts

Exide Ind

Hero Moto

M&M

Maruti Suzuki

Motherson Sumi

Tata Motors

TVS Motor

Aggregate

Banks - Private

AU Small Finance

Axis Bank

DCB Bank

Equitas Hold.

Federal Bank

HDFC Bank

ICICI Bank

IndusInd

J&K Bank

Kotak Mah. Bk

RBL Bank

South Indian

Yes Bank

Aggregate

Banks - PSU

BOB

BOI

Canara

Indian Bk

PNB

SBI

Union Bk

Aggregate

NBFCs

Aditya Birla Cap

Bajaj Fin.

Capital First

Cholaman.Inv.&F

n

GRUH Fin.

HDFC

HDFC Stand. Life

ICICI Pru Life

Indiabulls Hsg

L&T Fin Holdings

LIC Hsg Fin

Reco

Buy

Buy

Buy

Buy

Neutral

Buy

Buy

Buy

Neutral

Buy

Neutral

Buy

Buy

Buy

Buy

Neutral

CMP

TP % Upside

EPS (INR)

EPS Gr. YoY (%)

P/E (x)

P/B (x)

ROE (%)

(INR) (INR) Downside FY18 FY19E FY20E FY18 FY19E FY20E FY18 FY19E FY18 FY19E FY18 FY19E

876

133

2702

650

18746

1412

28912

1542

888

292

3224

978

9249

305

259

564

946

149

3223

747

19280

1588

34111

1691

988

314

3446

1084

10805

388

360

548

8

12

19

15

3

12

18

10

11

7

7

11

17

27

39

-3

27.6

5.4

151.3

17.7

469.8

64.0

799.6

29.1

39.5

8.2

185.1

41.0

266.7

8.2

22.9

13.9

29.3

6.6

153.9

23.5

584.2

76.1

966

37.1

52.5

10.6

193.4

48.3

311.2

10.2

30.1

15.6

36.3

8.7

174.6

29.3

712.6

99.2

1,238

49.1

65.9

12.8

219.0

55.5

409.2

14.6

38.2

22.8

-1.5

23.9

7.3

34.9

-0.7

-31.5

27.0

23.8

88.0

0.4

9.5

49.8

7.3

5.9

15.7

18.7

15.2

6.2

23.4

1.7

33.2

24.3

19.0

20.9

27.8

32.8

29.1

4.5

17.8

16.7

24.4

31.3

11.6

18.6

23.8

30.5

13.5

24.5

22.0

30.4

28.1

32.3

25.5

21.4

13.2

14.8

31.5

44.0

26.9

46.1

24.9

31.7

24.7

17.9

36.8

39.9

22.1

36.2

53.1

22.5

35.7

17.4

23.8

34.7

37.3

11.3

40.4

25.4

29.9

20.0

17.6

27.6

32.1

18.6

29.9

41.5

16.9

27.6

16.7

20.2

29.7

30.0

8.6

36.2

21.4

5.1

5.4

4.1

6.5

5.7

2.2

11.2

10.0

3.6

4.6

5.5

3.8

6.7

6.9

0.9

9.3

3.9

9.1

2.6

2.0

2.2

1.3

5.1

2.1

4.9

0.5

4.8

4.0

0.6

3.4

3.7

1.0

0.5

0.6

0.9

0.6

1.3

0.4

0.9

3.5

11.0

2.4

4.5

18.7

5.2

6.1

2.9

3.6

3.2

2.2

4.5

4.7

3.7

5.6

5.2

2.0

8.7

8.4

3.0

4.1

4.9

3.4

5.9

5.9

0.8

7.9

3.5

6.6

2.4

1.8

2.1

1.2

3.8

2.1

4.3

0.5

4.2

3.6

0.6

2.9

3.1

0.9

0.5

0.6

0.9

0.7

1.2

0.4

0.9

3.0

9.1

2.1

3.7

15.3

4.5

5.1

2.5

3.2

2.7

1.9

17.0

23.7

24.2

18.8

15.3

10.3

35.2

21.0

18.3

12.9

33.8

14.2

18.5

19.5

10.1

25.1

15.5

13.8

0.5

10.9

1.4

8.3

17.9

6.8

16.5

3.8

12.5

11.6

6.6

17.7

10.4

-5.8

-17.8

-12.2

8.3

-29.6

-3.5

-23.7

-8.0

12.4

20.4

13.4

20.9

31.8

18.6

25.8

16.1

27.9

14.2

17.0

15.9

25.1

22.1

21.7

17.0

11.2

32.7

22.0

19.3

14.9

31.1

14.5

19.5

21.2

10.1

23.6

16.3

14.9

7.8

10.8

7.1

9.1

16.6

6.2

19.4

6.7

11.8

12.3

5.7

19.5

11.6

6.9

2.5

3.9

9.4

-6.4

2.4

-2.1

2.5

10.9

21.1

15.7

21.0

31.8

17.5

26.0

16.8

28.3

19.3

17.2

Buy

Buy

Neutral

Buy

Buy

Buy

Buy

Buy

Buy

Neutral

Buy

Buy

Buy

721

650

173

145

80

2080

340

1948

54

1274

635

18

383

760

670

170

175

110

2400

355

2250

100

1400

700

26

444

5

3

-2

21

38

15

4

15

86

10

10

48

16

10.2

1.1

8.0

0.9

4.8

67.8

11.1

60.2

3.8

32.5

15.1

1.9

18.4

14.0

20.1

9.5

4.9

5.8

79.2

9.9

81.8

6.5

37.2

20.6

1.7

23.8

19.8

35.9

11.2

9.7

7.9

94.9

20.8

108.2

7.8

45.7

28.0

3.9

30.7

-79.5 37

40.8 70.3 51.4

-92.8 1,705 79.2 585.0 32.4

13.8 18.9 18.2 21.8 18.3

-82.3 427.2 99.5 156.6 29.7

-1.3 22.8 35.2 16.8 13.7

19.4 16.8 19.9 30.7 26.3

-34.3 -10.8 110.5 30.7 34.5

25.2 36.0 32.2 32.4 23.8

LP

74.1 19.7 14.3 8.2

21.3 14.2 22.9 39.2 34.3

27.3 36.3 35.6 42.0 30.8

-25.5 -9.7 134.2 9.5 10.5

26.3 29.0 29.2 20.8 16.1

-1.3 30.7 43.1 35.1 26.9

PL

Loss

PL

-10.4

PL

PL

PL

PL

NA

35.9

34.3

35.5

LP

LP

LP

22.7

Loss

LP

Loss

LP

22.4

44.5

33.4

20.8

25.5

10.1

22.6

2.4

18.0

74.7

14.3

67.9

62.7

129.2

66.1

LP

286.2

LP

291.2

34.8

32.2

26.0

18.9

13.1

19.4

22.5

8.4

19.0

17.4

18.7

NM

NM

NM

12.6

NM

NM

NM

0.0

37.1

68.0

19.2

23.4

66.6

45.5

83.4

34.0

14.2

26.7

13.4

12.9

18.6

14.8

10.2

NM

39.0

NM

36.4

30.3

47.1

14.4

19.3

53.0

41.3

68.1

33.2

12.0

15.3

11.7

Buy

Neutral

Neutral

Buy

Neutral

Buy

Neutral

150

95

285

330

85

308

90

175

90

278

430

85

360

97

17

-5

-2

31

0

17

8

-9.8

-43.2

-63.5

26.2

-50.3

-5.3

-56.5

11.7

5.1

19.3

32.2

-8.9

7.9

-4.3

19.6

8.3

44.2

53.4

8.0

30.5

3.5

Buy

Neutral

Buy

Buy

Neutral

Buy

Buy

Buy

Buy

Buy

Neutral

139

2952

637

1456

330

1924

461

384

1282

181

528

200

2500

960

1700

300

2335

525

450

1650

240

600

44

-15

51

17

-9

21

14

17

29

33

14

3.8

43.4

33.1

62.3

4.6

62.7

44.2

75.3

6.2

82.9

55.6

89.5

5.0

6.2

7.0 21.9

42.3 46.5 55.6 6.2

5.5

6.8

8.3 23.7

11.3 11.6 12.5 -3.8

90.2 106.4 126.6 31.5

6.8 11.8 13.9 29.5

39.4 45.0 53.5 3.0

28 August 2018

24

Click excel icon

for detailed

valuation guide

CMP

TP % Upside

(INR) (INR) Downside

594

750

26

470

600

28

410

460

12

1410 1750

24

557

710

28

2005

1358

2500

1650

25

21

EPS (INR)

FY18 FY19E FY20E

19.2 24.5 30.7

17.4 20.3 24.2

43.0 44.8 48.9

49.9 63.0 78.4

32.9 40.9 45.9

Valuation snapshot

ROE (%)

FY18 FY19E

21.2 17.7

12.5 12.4

24.1 21.4

13.9 15.2

16.9 18.0

12.7

12.7

14.8

11.6

18.0

2.5

17.5

48.7

4.5

18.3

15.7

17.3

18.7

23.1

13.7

9.1

21.9

8.8

12.4

15.9

11.0

6.1

9.7

3.8

9.5

8.0

2.0

6.1

14.4

4.4

27.4

6.5

6.9

16.2

9.4

8.2

25.3

32.9

49.0

25.9

29.2

-3.3

24.9

21.2

78.1

22.3

15.4

16.9

15.7

13.3

17.2

3.6

21.8

44.8

6.9

17.7

16.8

23.4

20.4

21.3

14.3

10.8

22.4

12.3

12.9

15.1

12.0

7.8

14.0

6.6

11.1

12.6

3.5

9.1

14.1

9.9

22.7

12.0

8.1

15.5

10.5

10.8

25.7

32.6

48.3

23.4

30.2

1.2

24.8

22.5

86.9

22.9

Company

Reco

MAS Financial

Buy

M&M Fin.

Buy

Muthoot Fin

Neutral

PNB Housing

Buy

Repco Home

Buy

Shriram

City

Buy

Union

Shriram Trans.

Buy

Aggregate

Capital Goods

ABB

Sell

Bharat Elec.

Buy

BHEL

Sell

Blue Star

Neutral

CG Cons. Elec.

Buy

CG Power & Indu. Neutral

Cummins

Buy

Engineers India Buy

GE T&D

Neutral

Havells

Buy

K E C Intl

Neutral

L&T

Buy

Siemens

Neutral

Solar Ind

Neutral

Thermax

Buy

Va Tech Wab.

Buy

Voltas

Neutral

Aggregate

Cement

Ambuja Cem.

Neutral

ACC

Buy

Birla Corp.

Buy

Dalmia Bharat

Buy

Grasim Inds.

Neutral

India Cem

Neutral

JK Lakshmi Ce

Buy

Ramco Cem

Buy

Orient Cem

Buy

Prism Johnson

Buy

Sagar Cements Not Rated

Sanghi Inds.

Buy

Shree Cem

Buy

Ultratech

Buy

Aggregate

Consumer

Asian Paints

Neutral

Britannia

Buy

Colgate

Buy

Dabur

Neutral

Emami

Buy

Future Consumer Buy

Godrej Cons.

Neutral

GSK Cons.

Neutral

HUL

Buy

ITC

Neutral

EPS Gr. YoY (%)

P/E (x)

P/B (x)

FY18 FY19E FY20E FY18 FY19E FY18 FY19E

27.5 27.7 25.3 31.0 24.3 4.6

4.0

146.3 16.2 19.3 27.0 23.2 3.0

2.8

45.6 4.1

9.2

9.5

9.2

2.1

1.8

57.7 26.4 24.4 28.3 22.4 3.6

3.2

13.1 24.0 12.3 16.9 13.6 2.7

2.3

35.8

58.4

23.7

27.0

6.1

45.6

37.6

23.4

52.6

12.6

0.8

56.4

23.4

12.5

15.4

27.0

21.1

51.4

34.5

9.3

18.8

33.9

54.7

99.2

28.7

76.8

80.2

58.1

8.0

138.5

416.9

101.0

45.4

10.0

20.5

43.6

15.8

23.8

20.7

24.5

16.4

28.0

25.7

22.6

16.1

20.4

17.0

12.7

22.1

27.8

22.0

19.8

29.8

30.1

14.8

14.5

21.6

18.0

27.4

31.6

51.8

27.2

38.1

67.3

47.4

62.6

33.5

39.7

40.5

45.3

36.9

34.4

19.9

19.7

34.0

66.7

20.3

36.3

47.2

50.8

20.7

32.8

19.8

38.7

64.3

17.3

26.2

52.1

49.6

49.3

15.7

36.1

31.8

39.8

35.3

41.6

49.1

18.8

37.1

44.5

28.3

53.3

106.0

29.3

22.5

48.1

51.0

39.0

14.6

12.4

27.5

52.5

19.2

25.0

34.3

41.2

13.6

29.2

19.6

24.8

52.1

15.4

22.7

41.0

40.9

32.6

11.7

33.0

26.8

29.7

22.8

20.9

38.2

10.6

20.6

28.1

26.2

22.3

20.5

14.6

15.4

43.7

42.3

27.2

2.4

2.3

5.0

7.8

3.7

0.9

7.9

20.8

1.0

5.4

3.7

6.2

12.0

4.0

3.4

4.8

10.1

4.2

1.8

5.3

3.5

2.4

3.3

1.4

4.5

1.4

0.7

2.7

3.9

2.3

5.4

1.9

1.3

7.3

4.6

3.2

2.1

2.0

4.3

7.0

3.3

0.9

7.1

16.6

0.9

5.0

3.4

5.4

10.6

3.3

3.1

4.4

8.4

3.8

1.7

4.7

3.2

2.3

3.1

1.4

4.0

1.3

0.7

2.4

3.5

2.1

4.4

1.7

1.2

6.3

4.3

2.9

15.0

21.3

19.5

11.9

10.7

7.7

13.2

8.1

51.8

6.9

100.8 136.9 158.5 19.5

69.1 109.4 135.5 24.7

25.2

19.8

5.7

2.2

14.5

5.2

2.9

23.5

6.3

7.5

11.2

17.9

51.7

19.8

24.4

20.5

24.1

17.3

25.2

6.1

3.2

20.0

6.4

4.4

26.5

6.3

11.7

13.8

20.1

59.7

25.1

29.5

31.1

32.4

18.9

31.3

7.1

4.1

25.1

7.8

5.1

31.9

7.4

13.2

16.9

25.7

72.8

30.1

38.3

40.4

37.2

21.6

8.1

-8.8

64.1

12.7

14.3

-29.8

-11.2

14.8

30.8

17.4

51.1

22.4

10.9

18.2

-1.2

27.6

11.9

15.1

30.5

27.7

-35.6

106.8

-15.4

-42.0

5.8

-12.3

LP

288.2

LP

29.5

0.4

-10.9

-0.7

1322

117

80

684

263

60

772

124

290

721

310

1356

1030

1209

1013

379

624

950

145

60

695

305

60

800

155

330

645

360

1570

1070

1150

1295

450

590

-28

24

-25

2

16

0

4

25

14

-11

16

16

4

-5

28

19

-5

242

1655

787

2742

1079

121

328

675

115

112

737

84

18566

4373

231

1633

1030

3198

1084

120

384

802

139

136

-

130

19804

4536

-4

-1

31

17

0

-1

17

19

21

21

56

7

4

6.1

46.9

18.9

55.9

57.4

3.3

7.4

23.9

2.2

1.1

25.2

3.7

385.8

85.7

8.1

72.5

37.7

71.9

101.4

5.9

11.6

25.8

5.1

5.5

50.6

5.4

424.5

103.3

9.6

92.4

49.6

109.1

129.0

8.1

19.5

38.0

8.4

7.3

70.6

7.6

617.1

141.4

1400

6820

1158

482

548

47

1403

7529

1792

313

1405

7165

1360

440

665

69

1240

6710

2010

295

0

5

17

-9

21

47

-12

-11

12

-6

21.1

83.6

25.2

7.8

12.1

-0.2

21.1

166.5

24.5

8.9

23.3 28.3 1.9

98.6 124.9 13.5

27.8 32.5 18.6

8.5

10.1 7.2

14.4 17.2 -8.5

0.1

0.9 Loss

24.5 28.5 11.4

197.3 222.1 6.6

29.2 35.6 24.7

10.0 11.4 5.5

10.1 21.6 66.2 60.1 16.0

17.8 26.7 81.5 69.2 24.0

10.5 16.7 46.0 41.6 20.7

9.7

18.9 62.0 56.5 14.9

18.8 19.5 45.2 38.0 12.4

LP 1,080.9 NM 623.5 7.8

16.1 16.2 66.5 57.3 15.3

18.5 12.6 45.2 38.2 9.1

19.5 21.8 73.2 61.3 54.8

13.2 13.8 35.4 31.3 7.4

28 August 2018

25

Click excel icon

for detailed

valuation guide

CMP

Company

Reco

(INR)

Jyothy Lab

Neutral

204

Marico

Neutral

377

Nestle

Neutral 11335

Page Inds

Neutral 35746

Parag Milk Foods Neutral

301

Pidilite Ind.

Buy

1161

P&G Hygiene

Neutral 10040

Prabhat Dairy

Not Rated 152

United Brew

Buy

1389

United Spirits

Neutral

633

Aggregate

Healthcare

Alembic Phar

Neutral

596

Alkem Lab

Buy

2031

Ajanta Pharma Buy

1232

Aurobindo

Buy

689

Biocon

Neutral

608

Cadila

Buy

396

Cipla

Neutral

659

Divis Lab

Neutral

1298

Dr Reddy’s

Neutral

2442

Fortis Health

Buy

149

Glenmark

Neutral

653

Granules

Buy

115

GSK Pharma

Neutral

3384

IPCA Labs

Buy

751

Jubilant Life

Buy

732

Laurus Labs

Buy

438

Lupin

Buy

908

Sanofi India

Buy

6175

Shilpa Medicare Buy

514

Strides Shasun

Buy

482

Sun Pharma

Buy

622

Torrent Pharma Neutral

1782

Aggregate

Infrastructure

Ashoka Buildcon Buy

141

IRB Infra

Neutral

196

KNR

Buy

233

Constructions

Sadbhav

Buy

265

Engineering

Aggregate

Logistics

Allcargo Logistics Buy

120

Concor

Buy

646

Aggregate

Media

Dish TV

Buy

72

D B Corp

Neutral

248

Ent.Network

Buy

697

Hathway Cable Buy

18

Hind. Media

Neutral

161

HT Media

Neutral

54

Jagran Prak.

Buy

121

TP % Upside

(INR) Downside

220

8

370

-2

10620

-6

31600

-12

314

4

1325

14

10250

2

-

1550

12

615

-3

EPS (INR)

FY18 FY19E FY20E

4.9

5.7

7.0

6.5

7.6

9.0

140.0 181.0 197.8

311.1 412.2 529.4

10.4 12.0 14.9

18.9 19.7 23.5

115.3 156.6 186.4

3.5

6.4

9.7

14.9 18.7 23.7

6.7

9.2

13.2

Valuation snapshot

P/B (x)

FY18 FY19E

6.5

6.0

19.1 16.6

32.0 29.0

47.1 37.8

3.5

3.1

16.5 14.5

35.0 30.3

2.1

2.0

13.8 11.9

18.4 13.5

15.1 13.6

4.4

4.4

4.5

2.9

6.5

4.0

3.3

5.4

2.9

1.7

3.1

2.1

15.2

3.2

2.3

2.7

2.8

6.4

3.3

1.7

3.7

5.5

3.7

ROE (%)

FY18 FY19E

16.0 17.3

34.2 35.8

40.3 48.5

41.0 43.6

13.0 13.2

27.3 26.2

46.3 50.8

4.9

8.5

15.8 17.2

19.6 19.6

26.4 27.7

19.6

15.1

26.0

23.8

7.2

22.1

11.5

15.5

8.6

-2.3

15.6

12.2

16.2

9.3

18.9

11.9

15.6

16.1

10.3

3.9

8.7

20.3

12.6

19.3

17.0

20.4

20.1

11.3

19.5

11.7

18.6

12.5

1.6

14.0

12.7

27.5

12.7

21.6

14.0

9.4

17.2

14.5

4.4

11.2

16.2

13.2

EPS Gr. YoY (%)

P/E (x)

FY18 FY19E FY20E FY18 FY19E

-12.4 14.9 24.5 41.5 36.1

-2.8 17.6 18.2 58.4 49.7

13.2 29.2

9.3

81.0 62.6

30.3 32.5 28.5 114.9 86.7

187.1 15.8 24.3 29.0 25.1

13.2 4.0

19.3 61.3 58.9

-13.4 35.9 19.0 87.1 64.1

-2.0 83.8 52.1 43.7 23.8

71.7 25.7 26.3 93.1 74.1

26.1 36.4 43.1 93.9 68.8

10.5 16.4 18.5 57.0 48.9

12.5

33.2

26.2

11.9

96.5

8.9

29.8

21.5

21.4

234.2

20.0

28.0

13.2

34.6

16.4

47.7

54.5

14.8

26.8

92.0

39.3

35.0

29.6

231.2

-1.2

22.3

11.3

540

2475

1560

750

625

440

620

1270

2170

171

550

130

2888

850

1020

552

950

6590

620

481

700

1430

-9

22

27

9

3

11

-6

-2

-11

14

-16

13

-15

13

39

26

5

7

21

0

13

-20

21.9

58.9

53.0

42.7

6.2

17.5

20.3

33.0

64.7

-2.3

28.5

5.7

39.3

19.0

45.6

15.8

46.8

141.7

12.8

11.3

13.5

53.7

25.0 28.2 2.5 14.3

74.0 98.6 -21.1 25.7

51.5 65.0 -7.5 -2.7

44.2 49.5 8.7

3.5

10.6 20.9 -39.2 71.1

18.0 19.6 20.6 2.5

23.2 30.2 31.2 14.3

43.3 52.6 -17.3 31.0

99.3 120.6 -10.9 53.6

1.4

4.8

PL

LP

29.7 35.6 -27.5 4.1

6.8

8.7 -21.8 20.2

61.3 69.4 14.4 56.0

28.4 38.3 18.1 49.8

63.0 73.3 23.3 38.2

21.1 31.2 -10.9 33.1

29.2 45.1 -17.4 -37.6

166.8 191.6 9.8 17.7

21.2 26.9 -0.7 65.4

12.2 23.4 -65.1 8.4

18.4 25.6 -48.5 36.7

48.1 65.0 -2.6 -10.4

-18.2 15.9

0.8

23.8

13.7

16.0

2.6

23.5

16.8

17.8

Loss

17.5

61.8

17.5

LP

-0.5

-29.1

24.7

27.2 23.8 5.1

34.5 27.4 5.0

23.2 23.9 5.3

16.1 15.6 3.5

98.0 57.2 7.0

22.6 22.1 4.6

32.4 28.4 3.7

39.3 30.0 5.8

37.8 24.6 3.2

NM 104.7 1.7

22.9 22.0 3.6

20.3 16.8 2.2

86.1 55.2 13.9

39.6 26.4 3.5

16.1 11.6 2.8

27.6 20.8 3.1

19.4 31.1 3.0

43.6 37.0 7.0

40.0 24.2 3.9

42.8 39.4 1.8

46.2 33.8 3.9

33.2 37.0 6.5

32.8 28.3 4.1

NM

8.2

12.0

20.6

15.2

178.5 12.6

8.2

1.1

17.0

16.5

13.9

14.2

25.0

23.4

2.8

2.4

2.0

1.5

3.4

3.0

2.0

2.4

3.8

1.8

0.9

0.5

1.8

195

225

315

385

38

15

35

46

-4.2

23.9

19.4

12.9

11.7 -30.2 6.8

1.0 14.6 12.9

2.4

2.1

1.7

1.4

3.1

2.8

1.9

2.5

3.5

2.0

0.8

0.5

1.8

26.5

12.5

12.8

9.5

9.1

8.9

-2.1

18.4

3.7

-8.7

14.0

12.6

14.3

15.5

13.8

12.5

10.0

12.9

12.0

4.9

17.0

6.9

-8.2

13.2

7.5

17.5

146

769

22

19

7.3

17.1

8.4

25.8

10.5

30.9

-23.1

13.4

4.7

16.3

51.2

45.1

24.3

19.7

20.4

16.5

37.8

34.0

100

300

851

47

237

59

156

39

21

22

166

47

9

29

-0.4

17.6

6.8

-0.9

23.9

13.0

9.6

1.8

18.4

13.2

-0.8

25.5

8.5

11.9

5.5

23.1

21.6

-0.6

28.0

9.9

14.9

PL

LP

-13.8 4.3

-40.5 93.7

Loss Loss

-7.5

6.9

75.6 -34.5

-9.5 23.8

201.8 NM 39.4

25.7 14.1 13.5

64.4 102.6 52.9

Loss

NM

NM

9.5

6.8

6.3

16.6

4.2

6.4

24.7 12.6 10.1

28 August 2018

26

Click excel icon

for detailed

valuation guide

CMP

TP % Upside

(INR) (INR) Downside

337

455

35

1322 1565

18

771 1050

36

510

680

33

EPS (INR)

FY18 FY19E FY20E

9.1 13.0 17.1

26.7 34.3 44.8

27.7 36.5 41.9

14.6 16.1 19.5

Valuation snapshot

ROE (%)

FY18 FY19E

9.0 11.9

12.2 13.9

25.2 29.6

19.6 19.0

12.1 14.2

12.8

26.7

-2.7

22.2

9.1

17.7

0.3

22.9

12.2

17.8

11.5

19.4

29.0

11.8

16.7

14.0

31.0

21.0

20.8

24.3

21.2

9.4

13.0

23.3

13.0

14.9

20.3

24.0

21.8

18.3

25.0

26.9

24.1

15.4

18.8

14.6

16.2

16.7

37.6

29.4

21.5

17.0

15.3

24.1

2.4

14.2

24.2

0.6

25.5

14.8

17.1

9.5

24.5

12.2

16.5

13.5

20.7

24.4

14.2

22.3

13.0

27.8

14.5

21.0

22.5

15.0

13.7

16.9

24.6

14.3

15.3

24.2

28.2

27.4

16.7

25.3

26.4

25.0

16.1

25.7

20.9

19.5

18.3

35.8

34.9

19.3

15.7

18.1

25.0

-0.5

Company

Music Broadcast

PVR

Sun TV

Zee Ent.

Aggregate

Metals

Hindalco

Hind. Zinc

JSPL

JSW Steel

Nalco

NMDC

SAIL

Rain Industries

Vedanta

Tata Steel

Aggregate

Oil & Gas

Aegis Logistics

BPCL

GAIL

Gujarat Gas

Gujarat St. Pet.

HPCL

IOC

IGL

Mahanagar Gas

MRPL

Oil India

ONGC

PLNG

Reliance Ind.

Aggregate

Retail

Jubilant Food

Titan Co.

Aggregate

Technology

Cyient

HCL Tech.

Hexaware

Infosys

KPIT Tech

Mindtree

Mphasis

NIIT Tech

Persistent Sys

Tata Elxsi

TCS

Tech Mah

Wipro

Zensar Tech

Aggregate

Telecom

Bharti Airtel

Reco

Buy

Buy

Buy

Buy

EPS Gr. YoY (%)

P/E (x)

P/B (x)

FY18 FY19E FY20E FY18 FY19E FY18 FY19E

41.1 43.5 31.6 37.1 25.9 3.2

3.0

29.9 28.6 30.5 49.6 38.5 5.7

5.0

11.6 31.5 14.9 27.8 21.1 6.5

6.0

-7.0 10.6 21.3 35.0 31.7 6.5

5.6

0.1 26.3 33.9 31.6 25.0 3.8

3.6

1.4

3.5

0.7

3.1

1.3

1.4

0.9

1.7

1.3

1.2

1.5

6.4

1.9

2.1

5.8

2.1

1.6

1.3

5.7

4.0

1.3

0.9

1.1

3.6

2.6

1.9

21.1

15.6

16.6

3.5

3.9

6.5

4.9

3.2

6.3

4.5

4.6

3.3

12.3

9.0

3.5

2.8

4.3

5.7

2.2

1.3

3.1

0.7

2.4

1.1

1.3

0.8

1.4

1.2

1.1

1.3

5.5

1.7

1.9

4.8

1.8

1.3

1.2

4.8

3.5

1.2

0.8

1.0

3.1

2.2

1.7

17.1

15.5

16.0

3.1

3.4

5.4

4.8

2.7

5.4

5.1

4.2

3.2

9.6

8.7

3.0

2.4

3.7

5.4

2.2

Buy

Neutral

Buy

Buy

Buy

Buy

Neutral

Buy

Buy

Neutral

231

300

207

356

74

108

77

204

225

581

331

295

327

385

108

178

82

241

269

632

44

-2

58

8

46

65

6

18

19

9

18.9

21.1

-8.5

23.4

5.0

13.1

0.3

23.7

20.4

71.9

24.4

22.2

1.9

33.4

9.1

13.7

8.9

32.4

21.6

85.1

27.8 120.5 29.4 13.6 12.2 9.4

26.3 7.2

5.0

18.6 14.2 13.6

3.8 Loss

LP

101.2 NM 109.0

30.1 56.9 42.8

-9.8

15.2 10.6

8.2 35.3 80.7 -10.4 14.7 8.2

14.6 31.5 4.7

6.1

8.2

7.9

6.8

LP 3,359 -23.8 300.8 8.7

34.2 238.1 36.4

5.7

8.6

6.3

27.0 34.6 6.2

24.9 11.1 10.4

68.7 76.5 18.4 -19.3

8.1

6.8

73.3 31.2

2.2

12.7 9.7

11.0

48.9

32.5

40.7

12.2

51.8

18.8

12.8

54.8

11.9

35.1

31.5

19.3

94.9

64.5 36.9

3.0

-2.3

20.5 30.6

32.0 55.4

34.6 4.0

-12.4 6.7

11.0 -24.9

9.2 22.1

21.5 5.5

-13.6 -21.6

-1.2 49.3

-9.9 40.1

21.8 24.5

20.7 25.7

5.5 15.1

35.9

0.5

21.9

23.8

-1.0

2.4

4.7

11.5

7.3

19.0

5.8

11.3

11.9

23.9

13.9

24.8

26.5

26.2

18.2

13.1

17.3

18.0

18.0

39.0

9.5

18.4

28.0

16.8

14.1

21.6

14.2

34.0

14.7

LP

39.2

7.3

18.9

36.6

15.6

5.5

6.5

30.2

17.4

6.6

9.5

8.7

16.9

21.2

12.5

28.6

7.4

14.5

23.6

15.0

5.2

8.7

24.8

16.5

8.4

6.4

6.2

13.6

16.9

10.9

Buy

Buy

Neutral

Buy

Neutral

Buy

Buy

Buy

Buy

Neutral

Buy

Buy

Buy

Buy

232

361

385

775

185

262

156

285

841

84

211

176

234

1292

311

535

361

990

196

428

254

383

1097

88

296

219

312

1301

34

48

-6

28

6

63

63

34

30

4

40

24

33

1

5.9

49.8

20.4

21.2

11.9

47.4

23.9

9.4

48.4

12.8

22.2

20.2

13.9

60.9

8.1

48.6

26.6

32.9

12.3

50.6

17.9

11.5

51.1

10.0

33.1

28.3

17.2

76.6

Neutral

Buy

1550

893

1320

1130

-15

27

14.9

12.6

22.0

16.2

27.5 180.6 48.2

20.5 39.9 28.4

51.2 31.3

45.9

81.5

22.4

85.8

18.2

64.4

63.2

70.2

58.9

55.4

93.5

52.6

21.5

95.0

24.8

4.5

21.2

3.1

6.1

38.0

13.2

19.8

7.2

37.7

-1.0

33.6

7.7

1.3

5.0

-63.3

1.4

15.2

15.1

12.3

21.3

34.8

31.1

30.1

13.9

22.3

24.1

1.3

5.2

34.4

10.0

PL

104.2 70.4

70.7 55.1

76.5 58.2

19.0

16.6

25.7

21.9

22.9

30.5

28.8

29.4

21.0

36.8

31.1

17.3

16.6

29.8

23.6

92.8

18.8

14.4

22.3

19.5

18.9

22.6

21.9

22.6

18.4

30.1

25.0

17.1

15.8

22.2

21.4

NM

Neutral

Neutral

Sell

Buy

Neutral

Buy

Neutral

Neutral

Buy

Buy

Neutral

Buy

Neutral

Buy

728

1038

427

1415

291

1049

1266

1341

848

1426

2052

738

297

1571

780

1100

380

1600

320

1225

1100

1100

950

1700

1950

800

300

1500

7

6

-11

13

10

17

-13

-18

12

19

-5

8

1

-5

38.2

62.6

16.6

64.8

12.7

34.4

44.0

45.6

40.4

38.7

66.0

42.7

17.9

52.8

38.8

72.0

19.1

72.7

15.4

46.3

57.7

59.3

46.0

47.4

81.9

43.3

18.8

70.9

Buy

378

470

24

4.1

-0.8

1.2

28 August 2018

27