10 November 2017
Market snapshot
Equities - India
Close
Chg .%
Sensex
33,251
0.1
Nifty-50
10,309
0.1
Nifty-M 100
19,595
1.2
Equities-Global
Close
Chg .%
S&P 500
2,585
-0.4
Nasdaq
6,750
-0.6
FTSE 100
7,484
-0.6
DAX
13,183
-1.5
Hang Seng
11,745
1.5
Nikkei 225
22,869
-0.2
Commodities
Close
Chg .%
Brent (US$/Bbl)
64
0.4
Gold ($/OZ)
1,284
0.2
Cu (US$/MT)
6,778
-0.7
Almn (US$/MT)
2,076
-0.7
Currency
Close
Chg .%
USD/INR
65.0
0.0
USD/EUR
1.2
0.1
USD/JPY
113.6
-0.2
YIELD (%)
Close
1MChg
10 Yrs G-Sec
6.9
0.0
10 Yrs AAA Corp
7.7
0.0
Flows (USD b)
9-Nov
MTD
FIIs
-0.1
1.5
DIIs
0.0
0.0
Volumes (INRb)
9-Nov
MTD*
Cash
379
441
F&O
11,942
7,460
Note: YTD is calendar year, *Avg
YTD.%
24.9
25.9
36.5
YTD.%
15.4
25.4
4.8
14.8
25.0
19.6
YTD.%
15.0
10.8
22.7
21.8
YTD.%
-4.3
10.1
-3.0
YTDchg
0.4
0.1
YTD
7.0
11.4
YTD*
303
5,595
Today’s top research idea
Tata Motors: Above estimates
v
Consol EBITDA grew 20% YoY to INR89.4b (est INR72.5b), translating into adj PAT
growth of 65% YoY to INR24.4b (est INR12.1b).
v
JLR’s EBIT margins expanded 100bp YoY (+400bp QoQ) to 5.2% (est 3.5%) driven
by lower fx hedge loss, lower other expenses, op leverage & higher share of China
JV PAT.
v
S/A business EBITDA margin came in at 7% (est. 4.5%), expanded 370bp YoY
(+700bp QoQ), driven by better mix, cost reduction initiatives and op. leverage.
v
For JLR, it expects 10% retail growth for FY18, despite weak outlook for developed
market, driven by ramp-up of new product launches.
v
Fx hedges slowly but surely improving, as reflected in sharp decline in unrealized
current Fx hedge losses to GBP793m as of Sep-17 (v/s GBP1.1b as of Jun-17).
v
Maintains S/A business PAT break-even target for FY18, led by volume growth &
cost reduction.
Strong performance at both JLR & India business
Research covered
Cos/Sector
Ecoscope
Tata Motors
Aurobindo Pharma
Petronet LNG
Ashok Leyland
SAIL
United Breweries
Page Industries
Indraprastha Gas
Muthoot Finance
Other Results
Results Expectation
Key Highlights
States offset weak consumption spending by center in 2QFY18
Above est; Strong performance at both JLR & India business
Strong numbers; PAT beat led by lower tax
Robust operating performance; outlook positive
RM inflation, lower Pantnagar incentives, and discounts hurt margins
Lower RM cost and higher volume drive EBITDA increase
Improving operating environment reinforces our positive outlook
Strong earnings traction continues
In-line results
Growth remains elusive; quarter driven by one-offs
JSP | AMRJ | TMX | SRF | CGPOWER | ICEM | JAGP | AGLL | VATW | GDPL
ALKEM | BPCL | BOI | BOS | MM | NEST | OINL | SBIN | SUNTV
Chart of the Day: EcoScope (States offset weak consumption spending by center in 2QFY18)
General government consumption spending grew ~8%,
while capital spending fell ~16% in 2QFY18
Fiscal deficit of general government in 1HFY18 is the
highest in at least the past 7 years
Source: CAG, CGA, SFMs, MOSL
Data for 1H of respective years
Source: CAG, CGA, SFMs, 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
‘Farmers set to lose ₹35,968 cr
in top 7 crops this season’
Ahead of the countrywide
farmers’ rally in the Capital on
November 20, the All India Kisan
Sangharsh Coordination
Committee (AIKSCC), a nationwide
coalition of over 180 farmer
organisations, on Thursday
announced its “#KisanKiLoot”
(Looting the Farmer) campaign…
2
Tata Tele outperforms Reliance Jio by adding close to 5 million new
users
Reliance Jio Infocomm added 4.09 million customers in August, taking its
market share past 11%, even as incumbents Bharti Airtel, Vodafone India
and Idea Cellular lost 0.2 million, 2.4 million and 2.89 million subscribers,
respectively. But the surprise performer of the month was Tata
Teleservices, notching up maximum customer additions of 4.88 million,
according to subscription data put out by sector regulator Telecom
Regulatory Authority of India (Trai) on Thursday…
3
Foreign investors return to
Indian markets
Foreign institutional investors
(FIIs), who took a break from
buying Indian shares in August and
September, are returning after
recent government
announcements such as the
Rs2.11 trillion PSU bank
recapitalisation plan. FIIs are
mainly buying into new shares…
4
GST bonanza for firms,
consumers on the anvil
The GST Council is likely to
announce relief for consumers
and big and small businesses at its
meeting in Guwahati on Friday.
Small businesses and eateries will
also get major relief as the flat
GST rate they can pay under a
special window called the
composition scheme is likely to be
cut…
5
As crude prices rise, govt may
cut excise on petrol, diesel:
Pradhan
6
State-run Energy Efficiency
Services Ltd (EESL) is firming up a
£100 million investment plan for
buying a combined heat and
power utility in the UK, and
investing in firms that are setting
up fast-charging electric vehicle
(EV) infrastructure and large
battery storage in Canada…
7
Essar Steel insolvency case:
Lenders, creditors claims soar
to Rs77,700cr from Rs50,000cr
Financial claims received by the
resolution professional (RP) for
Essar Steel from lenders,
operational creditors and
employees have crossed Rs 77,770
crore. Of this, the RP had till
October 18 acknowledged Rs
50,000 crore, according to a
statement on the company’s
website…
EESL firms up £100 million
investment plan to power its
electric vehicle push
With global crude oil prices
breaching the $60-a-barrel mark,
the Centre on Thursday indicated
it could examine the possibility of
a further cut in excise duty on
fuel. “Let us see,” Petroleum
Minister Dharmendra Pradhan
said when asked about the scope
of a further cut in excise duty. On
October 3, the Centre had
lowered the excise duty on petrol
and diesel by ₹2 a litre to cushion
the impact of high prices on the
common man…
10 November 2017
2

E
CO
S
COPE
States offset weak consumption spending by center in 2QFY18
Capital spending, however, declined at record pace
n
9 November 2017
The Economy Observer
n
n
n
Based on data for 16 states, we find that consumption spending (revenue spending
less
interest payments) grew 14.6%
YoY in 2QFY18. However, capital spending declined at a record pace of 23.4% YoY, falling for the second consecutive
quarter. Total spending grew 8% YoY, faster than 5% YoY in 1QFY18, but slower than ~15% YoY in 2QFY17.
With tax receipts growing 11.7% YoY in 2QFY18, slower than in 1QFY18 but better than in 2QFY17, fiscal deficit of 16
states reached 37% of budget estimates (BE) in the first half of FY18, lower than 44% in the corresponding period in FY17,
but higher (or worse) than in the previous years.
Combined analysis of the center and 16 states (=general government) reveals that total fiscal spending grew only 2% YoY
in 2QFY18, marking the slowest growth in more than five years. Within total spending, core revenue spending grew ~8%
YoY in 2QFY18 primarily due to states, while capital spending declined (15.7% YoY) for the first time since 2015.
As is
evident from the analysis of states’ budgets,
weaker fiscal spending in FY18 implies lower contribution to economic
activity in comparison to FY17. With deficit of the general government reaching ~69% of BE in 1HFY18 – the highest in at
least the past seven years, its ability to contribute faster in 2HFY18 will be constrained. Fiscal policy, as we had
noted
in
April 2017, has indeed reached its limits.
In this note, we look at the finances of 16 state governments that have published
their fiscal data up to September 2017. These include Andhra Pradesh (AP), Bihar
(BR), Chhattisgarh (CG), Gujarat (GJ), Haryana (HR), Jharkhand (JH), Karnataka (KA),
Madhya Pradesh (MP), Maharashtra (MH), Odisha (OD), Punjab (PB), Rajasthan (RJ),
Telangana (TR), Tamil Nadu (TN), Uttarakhand (UK) and Uttar Pradesh (UP). These
states account for ~85% of the aggregate state budgets.
Aggregate fiscal deficit of 16
states reached 36.9% of BE
in 1HFY18, slightly lower
than 43.9% in 1HFY17, but
higher (or worse) than in
previous years
States’ fiscal deficit remains contained in 2QFY18…:
Against an exceptionally low
fiscal deficit of 7.4% of budget estimates (BE) in 1QFY18, states’ deficit widened in
2QFY18, due to which the aggregate fiscal deficit of 16 states reached 36.9% of BE in
1HFY18, slightly lower than 43.9% in 1HFY17, but higher (or worse) than in previous
years
(Exhibit 1).
This is primarily because states’ spending grew faster in 2QFY18.
Having reached fiscal deficit equivalent to 81% of BE, the center, however, curtailed
its deficit in 2Q due to which its fiscal deficit was 91.3% of BE in 1HFY18
(Exhibit 2).
Exhibit 2:
…however, center’s deficit narrowed sharply
(% of BE)
1Q
26.5
2Q
10.5
22.8
16.5
80.8
39.4
9.0
FY18
FY12
37.1
FY13
48.4
56.1
51.6
61.1
27.5
28.5
Exhibit 1:
States’ fiscal deficit expanded in 2QFY18…
(% of BE)
1Q
2Q
28.3
15.4
7.8
11.1
FY12
8.4
FY13
8.1
4.6
FY14
18.9
27.9
15.7
FY17
27.8
28.6
14.1
FY15
7.0
FY16
FY14
FY15
FY16
FY17
FY18
Source: Comptroller and Auditor General (CAG), CEIC, MOSL
Source: Controller General of Accounts (CGA), CEIC, MOSL
10 November 2017
3

9 November 2017
Q2FY18 Results Update | Sector: Automobiles
Tata Motors
Buy
BSE SENSEX
33,251
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
10,309
TTMT IN
Above est; Strong performance at both JLR & India business
3396.6
n
Consol
EBITDA increased 20% YoY (+80% QoQ) to INR89.4b (est INR72.5b),
1,495.5 / 23.0
translating into EBITDA margin expansion of 90bp YoY (+4100bp QoQ) at
553/358
12.6% (est 10.5%). Adj PAT increased 65% YoY to INR24.4b (est INR12.1b).
-1/-8/-40
n
JLR – Lower fx hedge loss, lower other expenses & Op. leverage drives
3557
EBITDA:
Net sales at GBP6.3b (in-line) grew 11.5% YoY (+12.9% QoQ) led
63.6
CMP: INR440
TP: INR575(+31%)
Financials & Valuations (INR b)
2018E
2019E
Y/E Mar
Net Sales
2,959
3,622
EBITDA
371.8
577.3
PAT
83.6
220.0
EPS (INR)
24.6
64.8
Gr. (%)
24.2
163.2
BV/Sh (INR)
195.6
261.6
RoE (%)
13.4
28.3
RoCE (%)
7.0
16.6
P/E (x)
17.9
6.8
P/BV (x)
2.3
1.7
2020E
3,923
610.1
228.1
67.2
3.7
330.0
22.7
14.3
6.6
1.3
n
n
Estimate change
TP change
Rating change
n
Quarterly performance (INR m)
Y/E March
(Consolidated)
JLR vols. (incl JV)
JLR Realizations (GBP/unit)
JLR EBITDA (%)
S/A vol. (units)
S/A Realizations (INR/unit)
S/A EBITDA (%)
S/A PAT (INR m)
Net Op Income
Growth (%)
EBITDA
EBITDA Margins (%)
PBT before EO Exp
EO Exp/(Inc)
PBT after EO Exp
Tax rate (%)
Adj PAT
Growth (%)
E: MOSL Estimates
by volume growth of 6.2% YoY and realization growth of 5% YoY. EBITDA
margins expanded 90bp YoY (+390bp QoQ) to 11.8% (v/s est 10.7%) driven
by lower fx hedge loss, lower other expenses and operating leverage.
Further higher share of China JV PAT, fx gains and lower depreciation
boosted adj. PAT growth to 26% to GBP308m (est GBP169m).
S/A – Better mix and cost reduction propels EBITDA margins:
Revenues
grew 35% YoY (+53% QoQ) to INR138.9b (est INR130.9b) led by volume
and realisation growth of 14% YoY and 18% respectively. EBITDA margin
came in at 7% (est. 4.5%), expanded 370bp YoY (+700bp QoQ), driven by
better mix, cost reduction initiatives and op. leverage. As a result, net loss
was lower at INR2.9b (est INR4.7b), as against loss of INR5.8b in 2QFY17.
Earnings call highlights:
a) Maintains 10% retail growth guidance for FY18
(implied residual growth of 17%), despite weak outlook in key developed
markets. b) EBIT margin target of 8-10% in medium term factors in for
lower margins of EVs & higher variable marketing spend. c) Though
competitive intensity remains high, especially in sedan segment, JLR is
averse to chasing volume at any price. d) Fx hedge losses to reduce from
4QFY18 onwards, as reflected in sharp reduction in unrealized current Fx
hedge losses to GBP793m as of Sep-17 (v/s GBP1.1b as of Jun-17). e) India
business PAT breakeven in FY18, led by cost reduction & volume growth.
Valuation & view:
We have upgraded consol EPS by 23%/6% for FY18/19,
as we build in margin expansion at JLR and S/A business. The stock trades
at 6.8x FY19E EPS & 2.9x EV/EBITDA. Maintain
Buy
with TP of INR575.
4Q
175,000
45,746
14.5
148,533
914,725
4.1
-5,369
772,172
-2.9
108,012
14.0
52,011
356
51,655
24.0
43,229
(25.0)
FY18
FY17
FY18E
1Q
2Q
3QE
4QE
2QE Var (%)
138,476 153,210 163,000 200,035 600,806 654,722 153,210
0.0
47,483 48,137 48,377 49,451 45,515
48,474 47,768
0.8
7.9
11.8
12.4
16.1
12.1
12.5
10.7
110bp
109,692 153,321 148,268 169,407 542,322 580,688 153,321
0.0
829,080 905,798 869,566 917,244 818,038 885,394 853,952
6.1
0.0
7.0
6.3
7.8
3.8
5.8
4.5
250bp
-4,671 -2,953 -3,526
426 -21,341 -10,723 -4,714
584,934 706,907 710,803 956,107 2,696,925 2,958,750 688,159
2.7
-10.0
11.3
11.2
23.8
-1.2
9.7
4.42
49,648 89,383 92,053 119,972 295,887 351,056 72,494
23.3
8.5
12.6
13.0
12.5
11.0
11.9
10.5
210bp
-5,145 30,099 28,603 58,339 82,002 111,896 12,994
131.6
-42,515
-715
0
0 27,955
0
0
37,370 30,814 28,603 58,339 54,047 111,896 12,994
137.1
32.3
35.4
32.0
25.5
60.2
42.0
32.0
3,045 24,366 24,750 48,996 46,581
87,167 12,092
101.5
(89.5)
64.8 (1,205)
13.3
-64.3
87.1
-46.4
FY17
1Q
2Q
3Q
134,334 139,227 152,245
44,338 45,642 46,200
12.5
10.9
10.1
126,839 134,397 132,553
811,243 765,059 769,912
6.5
3.3
1.4
258 -5,793 -10,452
650,047 635,376 639,330
7.6
3.3
-9.4
90,275 74,298 62,403
13.9
11.7
9.8
34,718 21,304 13,071
9,204 11,311 7,085
25,514 9,993 5,986
28.2
42.5 144.8
28,970 14,788 -2,239
(39.0)
61.1 (107.2)
10 November 2017
4

RESULTS
FLASH
Aurobindo Pharma
BSE SENSEX
33,251
S&P CNX
10,309
9 November 2017
Results Flash | Sector: Healthcare
CMP: INR789
TP: INR850(+8%)
Buy
We will revisit our estimates
post earnings call/management
interaction.
Strong numbers; PAT beat led by lower tax
Renvela launch driving growth
n
Net sales increased 17.5% YoY to INR44.4b (+9% beat).
n
Revenue from US business increased 21% YoY (+24% QoQ) to INR20.9b. On a
constant currency basis, US sales increased ~26% to USD323m v/s USD260m in
2QFY17 and USD261m in 1QFY18. Europe and RoW market saw significant
growth of 37% YoY to INR13.6b, and on constant currency basis, sales grew by
~35% YoY. API business was flat at INR7.7b.
n
Gross profit margin increased to 60.1% (+330bp YoY and 90bp QoQ). EBITDA
increased by ~20% YoY to INR11.2b (~1% beat), while EBITDA margin came in
at 25.2% (+60bp YoY and +2,300bp QoQ).
n
PAT increased by 32% YoY to INR781m (+10% beat), primarily due to a lower
tax rate of 20.2% v/s 27% in 2QFY17. Lower tax rate is attributed to Renvela
sales, which is from unit VII (SEZ facility).
Key questions for management
n
Renvela sales contribution in 2Q.
n
Sales contribution from Renvela post competition.
n
Sustainability of strong growth in Europe and RoW market.
n
Impact of price erosion in base business and future outlook.
n
Outlook on debt.
Valuation view:
We will revisit our estimates post earnings call. We continue
believing that ARBP is well poised to outperform peers in the current
circumstances, led by its strong US pipeline and diversified product mix. ARBP
remains one of our top picks in the sector, with a TP of INR850 @ 17x FY19E PER.
Conference Call Details
Date:
10th Nov 2017
Time:
8:30am IST
Dial-in details:
+91-22-3960 0689
Financials & Valuations (INR b)
2017
2018E
Y/E Mar
Net Sales
150.9
166.8
EBITDA
34.3
40.9
NP
23.0
26.3
EPS (INR)
39.3
44.9
EPS Gr. (%)
13.5
14.3
BV/Sh. (INR)
160.0
202.3
RoE (%)
27.6
24.8
RoCE (%)
19.0
19.7
Payout (%)
8.3
5.8
Div. Yield
0.3
0.3
2019E
185.9
44.6
29.3
50.0
11.3
249.8
22.1
18.5
6.4
0.3
10 November 2017
5

9 November 2017
2QFY18 Results Update | Sector: Oil & Gas
Petronet LNG
Buy
BSE SENSEX
33,219
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
10,303
PLNG IN
750
390.2 / 6.0
275 / 163
2/9/23
1098
50.0
CMP: INR260
n
TP: INR312 (+20%)
Robust operating performance; outlook positive
Financials & Valuations (INR b)
2018E 2019E 2020E
Y/E Mar
Sales
277.6 292.7 345.7
EBITDA
33.0
36.6
44.9
Adj. PAT
22.5
25.1
30.5
Adj. EPS (INR)
15.0
16.7
20.3
EPS Gr. (%)
31.7
11.8
21.4
BV/Sh.(INR)
64.7
76.8
91.4
RoE (%)
25.2
23.7
24.2
RoCE (%)
22.3
22.3
24.2
P/E (x)
17.4
15.5
12.8
P/BV (x)
4.0
3.4
2.8
EV/EBITDA (x)
11.8
10.1
7.7
Div. Yield (%)
1.4
1.5
1.9
Estimate change
TP change
Rating change
EBITDA grew 24% YoY and 21% QoQ to INR9b, higher than our estimate of
INR7.8b. The outperformance was primarily led by (a) higher utilization of
Dahej and Kochi terminals, and (b) lower opex cost. PAT grew 28% YoY and
35% QoQ to INR5.9b, ahead our estimate of INR4.9b due to 11% YoY and 44%
QoQ growth in other income to INR1b (our estimate: INR800m).
n
Dahej throughput grew 14% YoY and 14% QoQ to a new high at 210tbtu (our
estimate: 199tbtu), implying 111% utilization of the 15mmt capacity. This
throughput includes (in tbtu) long term: 127 (+23% YoY, +21% QoQ), third-
party: 79 (+30% YoY, flat QoQ), and short term: 4 (-81% YoY, +433% QoQ;
contributing to marketing margins).
n
Kochi throughput grew 122% YoY and 78% QoQ to 10tbtu (our estimate:
9.5tbtu), implying 15% utilization of the 5mmt capacity. This includes 7tbtu
long-term (+775% QoQ) and 3tbtu pure short-term (-33% YoY, -38% QoQ).
Dahej capacity to reach 17.5mmt in 4QFY19; raising estimates
n
Offtake increased primarily due to coal shortage faced by power plants and
seasonally non-operational Dabhol LNG terminal. Going forward, if domestic
coal production increases, we could see some demand weaning off.
n
Management has guided for the further capacity expansion of Dahej terminal
from 15mmt to 17.5mmt by 4QFY19. We have also increased Kochi regas tariff
by 5% in CY18 and continue to retain flat henceforth. Adjusting our
assumptions for the same results in 11% increase in FY20 estimates.
n
GAIL has awarded a tender for the construction of the last leg on the Kochi-
Mangalore pipeline. Completion of the ~400km pipeline would give access to
anchor consumers like MCF, OMPL and MRPL refinery, all of which are ready to
consume gas. Once completed, it will also help in Kochi LNG terminal ramp-up.
Valuation and view:
With increased capacity at Dahej and robust utilization, we
assume FY19/20 total volumes at 17.3/19.3mmt. We assume terminal growth of
3% beyond FY22. The stock trades at 15.5x FY19E EPS of INR16.7. We value PLNG
on DCF (WACC: 11%, TGR: 3%) to arrive at a fair value of INR312. Reiterate
Buy.
Standalone - Quarterly Earning Model
Y/E March
Net Sales
YoY Change (%)
EBITDA
Margins (%)
Depreciation
Interest
Other Income
PBT
Tax
Rate (%)
PAT
YoY Change (%)
Margins (%)
Key Assumptions
Regas volume (tbtu)
Sales volume (tbtu)
1Q
53,373
-36.3
6,425
12.0
806
556
494
5,556
1,777
32
3,779
115.8
7.1
50.1
118.1
FY17
FY18
FY17 FY18E
2Q
3Q
4Q
1Q
2Q
3QE
4QE
66,144 62,993 63,651 64,351 77,702 67,326 68,221 246,160 277,600
-12.3
22.4
4.9
20.6
17.5
6.9
7.2
-9.3
12.8
7,264 6,071 6,163 7,442 8,987 8,052 8,486 25,923 32,967
11.0
9.6
9.7
11.6
11.6
12.0
12.4
10.5
11.9
860 1,009 1,016 1,027 1,039 1,078 1,078
3,691
4,220
554
517
469
465
465
267
267
2,097
1,463
915
550 1,508
707 1,019 1,143 1,143
3,466
4,012
6,765 5,095 6,186 6,658 8,504 7,851 8,284 23,602 31,296
2,170 1,121 1,478 2,282 2,616 2,355 2,485
6,545
9,738
32
22
24
34
31
30
30
28
31
4,596 3,975 4,708 4,376 5,888 5,495 5,799 17,057 21,558
84.7 122.8
96.8
15.8
28.1
38.3
23.2
102.7
26.4
6.9
6.3
7.4
6.8
7.6
8.2
8.5
6.9
7.8
60.7
128.2
75.3
116.1
71.1
108.9
80.5
111.1
79.0
141.0
94.3
117.4
94.3
117.4
257.1
471.2
348.0
487.0
(INR Million)
FY18 Var. vs
2QE
est
65,436
19%
-1.1
7,793
15%
11.9
1,078
-4%
470
-1%
800
27%
7,046
21%
2,114
24%
30
4,932
19%
7.3
7.5
94.3
114.3
-16%
23%
10 November 2017
6

9 November 2017
Q2FY18 Results Update | Sector: Automobiles
Ashok Leyland
Buy
BSE SENSEX
33,219
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
10,303
AL IN
RM inflation, lower Pantnagar incentives, and discounts hurt margins
2,927
n
Higher volumes and realizations drive revenues:
AL’s revenues grew 30.8%
349.0 / 5.4
YoY to INR60.5b (our estimate: INR61.3b), driven by volume growth of
133 / 74
22.6% YoY (and 44% QoQ) and realization growth of 6.7% YoY (decline of
-9/28/10
0.8% QoQ) to INR1.47m (our estimate: INR1.49m). Apart from price hikes
1,117.2
48.7
related to BS-4, AL has not taken any price increase in 1HFY18.
CMP: INR115
TP: INR134(+17%)
Financials & Valuations (INR b)
2017
2018E
Y/E Mar
200.2
244.0
Net Sales
22.0
24.1
EBITDA
13.3
13.2
PAT
4.6
4.5
EPS (INR)
8.0
-1.5
Gr. (%)
20.9
23.0
BV/Sh (INR)
23.1
20.4
RoE (%)
21.8
17.4
RoCE (%)
25.3
25.7
P/E (x)
5.5
5.0
P/BV (x)
2019E
289.2
30.8
18.2
6.2
38.7
26.5
25.2
21.2
18.5
4.4
Estimate change
TP change
Rating change
RM inflation, low fiscal incentives, and discounts impact margins:
EBITDA
margin fell 150bp YoY (but expanded 290bp QoQ) to 10.1% (our estimate:
10.6%) due to higher commodity prices, heavy discounting, lower incentives
at Pantnagar under GST (~50bp impact) and low margins on BS-3 exports.
However, lower other expenses diluted the impact of RM cost. EBITDA grew
14% YoY to INR6.1b (our estimate: INR6.5b). Other income was INR0.6b,
higher than our estimate of INR0.4b. Adjusted PAT declined 59% YoY to
INR1.2b (our estimate: INR2.07b).
n
Key takeaways from conference call:
(a)
Outlook:
CV industry to grow 5-
10% in FY18. AL to grow in line with industry. (b) Incremental RM cost
pressure yet to reflect in P&L.
Price increase
of 1% from November 2017 in
some models. (c) 85-90% of AL’s volumes are iEGR-based. (d) In Hinduja
Foundries, recovery continued, with EBITDA margin of 8.5% in 2QFY18. (e)
LCV business turned PBT positive for the first time; EBITDA margin at 8-9%.
(f) Discounts at high levels (~INR350k, stable QoQ), with competition
offering ~INR100k/unit higher than AL.
Valuation and view:
We downgrade FY18/FY19E EPS by 16%/11%, as we factor
in (a) lower margins by 80bp/40bp, and (b) increase in depreciation. We value AL
at ~INR134 [11x September 2019E EV/EBITDA + INR12/share for stake in HLF
post 20% HoldCo discount]. Maintain
Buy.
n
FY18
2QE
40,985
22.6
1,495
8.2
61,281
32.6
70.3
7.4
11.8
6,477
10.6
425
300
5,262
0
5,262
28.0
3,787
28.6
Var.
(%)
0.0
-1.3
-1.3
90bp
60bp
-110bp
-5.5
-50bp
31.0
36.7
-8.3
-8.3
-11.7
Quarterly Performance
(INR Million)
Total Volumes (nos)
Growth %
Realizations (INR '000)
% change
Net operating revenues
Change (%)
RM/sales %
Staff/sales %
Other exp/sales %
EBITDA
EBITDA Margins(%)
Other Income
Interest
PBT before EO Item
EO Exp/(Inc)
PBT
Effective Tax Rate (%)
Adj. PAT
Change (%)
E: MOSL Estimates
1Q
31,165
10.7
1,367
-0.9
42,588
9.7
68.7
8.4
11.6
4,820
11.3
385
338
4,154
0
4,154
30.0
2,908
130.0
FY17
FY18
FY17
FY18E
2Q
3Q
4Q
1Q
2Q
3QE
4QE
33,441 32,838 47,622 28,484 40,985 43,764 50,755 145,066 163,988
-10.5
6.2
8.5
-8.6
22.6
33.3
6.6
3.4
13.0
1,382 1,375 1,390 1,488 1,475 1,468 1,515
1,380
1,488
4.0
3.4
2.1
8.9
6.7
6.7
9.0
2.3
7.8
46,224 45,163 66,179 42,378 60,469 64,246 76,911 200,187 244,004
-6.9
9.8
10.8
-0.5
30.8
42.3
16.2
5.7
21.9
67.8
69.4
71.9
69.4
71.2
71.5
71.4
69.7
71.0
8.0
8.7
6.2
10.3
8.0
7.3
6.3
7.6
7.7
12.6
11.8
10.8
13.0
10.7
11.2
11.2
11.6
11.4
5,365 4,542 7,299 3,061 6,118 6,413 8,526 22,025 24,117
11.6
10.1
11.0
7.2
10.1
10.0
11.1
11.0
9.9
316
258
404
384
557
475
434
1,363
1,850
339
453
423
366
410
425
393
1,554
1,595
4,146 2,396 6,114 1,730 4,826 5,038 7,109 16,809 18,704
0
0 3,508
126
0
0
0
3,508
126
4,146 2,396 2,605 1,605 4,826 5,038 7,109 13,301 18,579
29.0
32.5
-
30.7
30.7
30.0
29.3
8.0
30.0
2,944 1,618 4,279 1,199 3,342 3,527 4,977 13,447 13,093
14.5
-25.6
-16.5
-58.7
13.5 118.0
16.3
11.6
-2.6
10 November 2017
7

9 November 2017
2QFY18 Results Update | Sector: Metals
SAIL
Sell
BSE SENSEX
33,251
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
10,309
SAIL IN
4130.4
322.2/5.0
88/45
33/19/35
414.0
25.0
CMP: INR78
TP: INR43 (-45% )
Lower RM cost and higher volume drive EBITDA increase
SAIL turned EBITDA positive at INR9.1b in 2QFY18 (7% beat), as against a loss of
INR0.8b in 1QFY18, due to lower raw material costs and higher volumes. Interest
cost rose 9% QoQ to INR6.4b and depreciation increased 10% QoQ to INR7.6b. Net
exceptional charge of INR2.9b pertains to (a) excess mining case in Odisha and
Jharkhand of INR3.3b, (b) VRS of INR2.1b and (c) DMF reversal gain of INR2.4b. Adj.
net loss reduced from INR7.9b in 1QFY17 to INR3.2b (est. of INR6.6b).
n
Sales grew 17% QoQ (-2% YoY) to 3.5mt. NSR increased just 1% QoQ to
INR38,467/t, led by weakness in long products and pressure due to imports.
n
EBITDA per ton increased INR2,860 QoQ to INR2,583. RM cost per ton was
down INR2,419 QoQ. Staff cost rose 9% YoY to INR23.3b.
Upgrade estimates on improved steel outlook; Cost base is high; Maintain Sell
The steel market outlook has improved, driven by an increase in demand and
supply measures in China. SAIL is in the final stage of its modernization plan, and
volumes should start increasing. Higher volumes will drive operating leverage
gains, given its high fixed cost base. We have increased steel price estimates and
also incorporated the FY17 annual report. EBITDA is upgraded by ~8%/37% to
INR28b/71b for FY18/19E. We estimate EBITDA per ton to increase from INR29 in
FY17 to ~INR4,100 in FY19. SAIL’s cost base still remains high. It needs to cut
employee costs and improve the operating performance to be viable across cycles.
Ramping-up volume from newly commissioned capacity is also critical. The
EV/EBITDA approach for valuation still does not reflect the potential value of the
business. We continue to value based on P/BV basis, but increase the target
multiple to 0.5x (from 0.4x earlier). The TP increases to INR43/sh, downside of
~45%. Maintain
Sell.
FY18
FY17 FY18E
2Q
3QE
4QE
3.5
3.7
3.8
13.1
14.0
-1.7
10.6
10.3
8.6
6.6
38,467 39,000 39,000 33,814 38,702
23.4
13.9
5.9
4.7
14.5
136,174 142,350 148,200 444,524 542,520
21.3
26.0
16.8
13.8
22.0
9,143
9,334
9,845
380 27,482
2,583
2,557
2,591
29
1,960
40
39
40
0
30
6,435
6,492
6,722 25,278 25,528
7,622
7,138
7,546 26,800 29,253
486
549
546
5,356
2,474
-4,428 -3,748 -3,877 -46,341 -24,825
-2,975
-2,167 -3,077
-7,403 -3,748 -3,877 -48,509 -27,901
-2,013
-112
-116 -20,176 -7,100
27.2
3.0
3.0
41.6
25.4
-5,391 -3,636 -3,761 -28,332 -20,801
-3,224 -3,636 -3,761 -27,066 -18,507
FY18E
2QE
4.10
13.9
33,798
8.4
138,572
23.4
8,552
2,086
32
7,372
8,565
551
-6,834
-6,834
-205
3.0
-6,629
-6,629
vs Est
(%)
-14
14
-2
7
24
25
-13
-11
-12
-35
8
-19
-51
Financials & Valuations (INR b)
Y/E March
2017 2018E 2019E
Net Sales
445.0 543.0 671.7
EBITDA
0.7
27.8
70.7
NP
-26.3 -17.7
13.0
EPS (INR)
-6.4
-4.3
3.1
EPS Gr. (%)
-37.1 -32.8 -173.4
BV/Sh. (INR)
89.7
84.4
87.0
RoE (%)
-6.9
-4.9
3.7
RoCE (%)
-2.9
0.0
5.4
P/E (x)
-12.3 -18.2
24.9
P/BV (x)
0.9
0.9
0.9
Estimate change
TP change
Rating change
Quarterly Performance (standalone) – INR million
Y/E March
1Q
Sales (m tons)
2.8
Change (YoY %)
4.1
Realization (INR per ton) 32,993
Change (YoY %)
-6.6
Net Sales
92,381
Change (%)
-2.8
EBITDA
2,338
EBITDA per ton (INR)
835
EBITDA per ton (USD)
12
Interest
5,941
Depreciation
6,002
Other Income
893
PBT (before EO Inc.)
-8,712
EO Income(exp)
-542
PBT (after EO Inc.)
-9,254
Total Tax
-3,899
% Tax
42.1
Reported PAT
-5,355
Adjusted PAT
-5,042
FY17
2Q
3Q
4Q
3.6
3.3
3.4
31.4
13.8
-8.6
31,182 34,237 36,827
-7.7
11.1
22.1
112,256 112,982 126,905
21.3
26.4
11.6
1,114
-428 -2,644
310
-130
-767
5
-2
-11
6,028
6,108
7,202
6,659
6,699
7,439
682
688
3,094
-10,890 -12,547 -14,192
-1,640
11
3
-12,531 -12,536 -14,188
-5,215 -4,587 -6,475
41.6
36.6
45.6
-7,316 -7,948 -7,713
-6,358 -7,956 -7,715
1Q
3.0
8.1
38,242
15.9
115,796
25.3
-839
-277
-4
5,879
6,947
893
-12,771
-101
-12,872
-4,859
37.7
-8,014
-7,951
10 November 2017
8

United Breweries
BSE SENSEX
25,689
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
Avg Val, INRm/ Vol m
Free float (%)
S&P CNX
7,866
UBBL IN
264.4
291.1 / 4.5
1190 / 716
26/23/2
228
26.7
9 November 2017
2QFY18 Results Update | Sector: Consumer
CMP: INR1,101
n
TP: INR1,320(+20%)
Buy
Improving operating environment reinforces our positive outlook
n
Financials & Valuations (INR b)
FY17 FY18E FY19E
Y/E Mar
Net Sales
47.6
55.2
63.5
EBITDA
6.7
9.1
10.7
PAT
2.3
3.9
4.7
EPS (INR)
8.7
14.7
18.0
n
Gr. (%)
-23.0
68.9
22.4
BV/Sh (INR)
88.3 100.9 116.4
RoE (%)
10.2
15.5
16.5
RoCE (%)
9.1
14.0
14.8
n
P/E (x)
126.8
75.1
61.3
EV/EBITDA (x)
44.1
32.5
27.9
n
Estimate change
TP change
Rating change
Net sales grew 23.1% YoY (est. of +7%)
to INR12.8b in 2QFY18. Despite the
highway ban, volume rose 11% YoY (est. of flat volume) v/s 5% growth for the
industry – another quarter of market share gains for UBBL. The company has
now gained share in both FY17 and 1HFY18. Most markets in the country saw
positive momentum, barring Maharashtra, West Bengal and Kerala.
Gross margin shrunk 10bp YoY to 54.1% in 2QFY18.
EBITDA margin expanded
570bp YoY to 17.4% in 2QFY18. Staff costs reduced by 60bp YoY and other
expenses declined by 520bp YoY, likely led by strong operating leverage. 2Q is
usually a weak quarter for sales and margins. EBITDA margin of 17.4% in
2QFY18 is thus perhaps an all-time 2Q high for UBBL. EBITDA/PAT were thus
2x/3x our forecasts.
1HFY18 performance:
Net sales rose 13.4% YoY. EBITDA margin expanded
250bp YoY to 18.3%. EBITDA grew by 31.1% YoY to INR5.4b and PAT by 46.9%
YoY to INR2.55b.
Management call takeaways:
(1) UBBL has gained market share in all key
states, including Andhra Pradesh, Telangana, Karnataka and Maharashtra. (2)
There were no one-offs on margins.
Valuation view:
Long-term volume and earnings growth opportunity (FY17 PAT
at USD 36m) is immense for India’s largest beer player, with strong barriers to
entry in the form of distribution, brewery reach, scale and brands. Operating
environment appears to be improving far ahead of expectations, leading to
impressive set of numbers in 2QFY18, which meant the company nearly
achieved our erstwhile full-year PAT forecasts in 1HFY18. We upgrade our EPS
forecasts by 48%/28%/21% for FY18/FY19/FY20. Valuing the company at 29x
Dec’19E EV/EBITDA (10% premium to peer average), we obtain a TP of
INR1,320. Maintain
Buy.
FY18
2Q
3QE
12,764 12,198
23.1
19.0
10,545 10,210
2,219
1,988
83.1
52.0
17.4
16.3
650
690
127
180
12
50
1,454
1,168
0
0
1,454
1,168
515
382
35.4
32.7
0
0
938
786
246.9
53.2
7.4
6.4
FY18
2QE
11,045
7.0
9,906
1,138
-4
10.3
667
80
50
441
0
441
144
33
0.0
297
22.6
2.7
Standalone - Quarterly Earning Model
Y/E March
Net Sales
YoY Cha nge (%)
Tota l Expendi ture
EBITDA
YoY Cha nge (%)
Ma rgi ns (%)
Depreci a ti on
Interes t
Other Income
PBT before EO expense
Extra -Ord expens e
PBT
Ta x
Ra te (%)
Mi nori ty Interes t & Profi t/Los s of As s o.
Adj PAT
YoY Cha nge (%)
Ma rgi ns (%)
E: MOSL Es ti ma tes
1Q
15,642
7.5
12,733
2,909
17.1
18.6
637
148
136
2,260
0
2,260
790
34.9
0
1,471
20.4
9.4
FY17
2Q
3Q
10,368 10,250
-3.3
-6.6
9,156
8,942
1,212
1,308
-10.3
-27.3
11.7
12.8
702
698
141
153
8
330
376
787
0
0
376
787
106
274
28.1
34.8
0
0
271
513
-48.1
-28.0
2.6
5.0
4Q
11,127
-8.4
10,116
1,011
-21.3
9.1
833
144
43
76
0
76
9
11.7
0
67
-87.1
0.6
1Q
16,742
7.0
13,559
3,184
9.4
19.0
649
142
63
2,456
0
2,456
837
34.1
0
1,619
10.1
9.7
4QE
13,515
21.5
11,794
1,721
70.2
12.7
765
217
65
803
0
803
266
33.1
0
538
698.9
4.0
FY17
47,387
-2.1
40,947
6,440
-6.9
13.6
2,870
587
516
3,500
0
3,500
1,178
33.7
0
2,321
-22.1
4.9
FY18E
55,219
16.5
46,108
9,111
41.5
16.5
2,754
666
189
5,880
0
5,880
1,999
34.0
4
3,877
67.0
7.0
Variance
15.6%
94.9%
229.3%
215.9%
10 November 2017
9

9 November 2017
2QFY18 Results Update | Sector: Consumer
Page Industries
Buy
BSE SENSEX
33,251
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
Avg Val, INRm/ Vol m
Free float (%)
S&P CNX
10,309
PAG IN
11.2
167.1 / 2.5
22600 / 12360
14/39/17
220
51.0
CMP: INR22,314
n
TP: INR25,580(+15%)
Strong earnings traction continues; deserves high valuation
PAGE’s net sales grew at a strong 17.1% YoY
to INR6.26b (est. of INR6.45b),
with 7.9% YoY volume growth. Mix improvement was well ahead of
expectation. Men’s innerwear, Women’s innerwear and Sportswear segments
grew at 14%, 20% and 20% YoY, with volumes increasing 4%, 14% and 15% YoY,
respectively. Speedo sales grew 27% YoY, with 7% YoY volume growth.
Gross margin shrunk 200bp YoY to 57.6%.
This was offset by lower employee
costs (-90bp YoY) and other expenses (-160bp YoY), resulting in EBITDA margin
expansion of 40bp YoY to 20.5% in 2QFY18. Thus, EBITDA grew at a healthy
19.5% YoY to INR1.28b (est. of 1.29b). Adj. PAT rose 22.4% YoY to INR841m
(est. of INR825m).
Robust cash flow generation:
We note that the net working capital increase of
16% YoY has been far lower than the sales increase of over 20% in 1HFY18.
Other current and non-current assets have declined both YoY and QoQ. Net
cash and cash equivalents have thus gone up from INR813m at end-1HFY17 to
INR2.27b at end-2QFY18.
Management interaction takeaways:
(1) Management expect sales trajectory
to continue. (2) Yarn costs remain soft – have been on a downtrend since
August (saw a blip-up in October before coming down).
Valuation view:
We believe PAG offers a compelling, capital-efficient long-term
lifestyle play on the premiumizing innerwear category. A widening branded
product portfolio, coupled with distribution expansion, will aid market share
expansion and drive multiple years of growth, in our view. Unlike retail peers,
PAG has shown a remarkable ability to maintain strong double-digit volume
growth and high RoEs, making it fully deserving of high valuations. Continued
impressive performance leads us to upgrade forecasts for FY19/20 by 4%/7%.
Maintain
Buy
with a TP of INR25,580 (50x June 2019E EPS, a 10% discount to
three-year average P/E).
25%
3Q
5,283
19.2
991
18.8
19.6
62
45
20
904
275
30.4
629
20.9
23%
4Q
4,989
12.8
974
19.5
5.3
65
56
103
955
287
30.1
668
17.9
1Q
6,962
22.5
1,365
19.6
25.0
67
45
40
1,294
441
34.1
853
25.5
(INR Million)
FY18
Var.
2QE
(%)
6,453
-3.0%
20.0
1,290
-0.4%
20.0
20.0
66
40
40
1,224
0.4%
399
32.6
825
1.9%
20.1
Financials & Valuations (INR b)
Y/E Mar
2017 2018E 2019E
21.3
25.4
32.3
Net Sales
4.3
5.2
7.1
EBITDA
2.7
3.3
4.6
PAT
238.7 296.6 413.1
EPS (INR)
15.0
24.3
39.3
Gr. (%)
596.9 745.2 931.1
BV/Sh (INR)
40.0
39.8
44.4
RoE (%)
40.4
41.2
47.1
RoCE (%)
93.5
75.2
54.0
P/E (x)
60.3
47.6
34.9
EV/EBITDA (x)
n
n
n
Estimate change
TP change
Rating change
n
Quarterly Performance
Y/E MARCH
Net Sales
YoY Change (%)
EBITDA
Margins (%)
YoY Change
Depreciation
Interest
Other Income
PBT
Tax
Rate (%)
PAT
YoY Change (%)
E: MOSL Estimates
27%
1Q
5,686
26.7
1,092
19.2
8.8
59
39
59
1,053
373
35.5
679
8.5
25%
FY17
2Q
5,344
14.6
1,075
20.1
6.3
60
40
62
1,037
350
33.8
687
14.0
FY18
2Q
6,257
17.1
1,284
20.5
19.5
68
36
49
1,229
389
31.6
841
22.4
3QE
6,154
16.5
1,186
19.3
19.6
69
45
20
1,092
356
32.6
736
17.0
4QE
6,030
20.9
1,362
22.6
39.8
70
16
18
1,294
415
32.0
879
31.6
FY17
21,301
18.3
4,132
19.4
9.7
247
180
243
3,948
1,285
32.6
2,663
15.0
FY18E
25,403
19.3
5,197
20.5
25.8
273
142
127
4,909
1,600
32.6
3,309
24.2
10 November 2017
10

Indraprastha Gas
BSE SENSEX
33,251
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
10,309
IGL IN
In-line results; strong volume growth continues
700
n
IGL reported EBITDA of INR2.8b (+9% YoY, +2% QoQ; in-line). EBITDA/scm
217.1 / 3.3
stood at INR5.9 v/s our estimate of INR6 (INR6.1 in 2QFY17, INR6.2 in
325 / 160
1QFY18). PBT increased 20% YoY (+4% QoQ) to INR2.6b (in-line). Adj. PAT
3/45/60
stood at INR1.7b (+9% YoY, +5% QoQ; in-line); the differential at PAT level
594
increased due to a higher tax rate of 35.3% (est. of 34%; 35.7% in 1QFY18,
55.0
9 November 2017
2QFY18 Results Update | Sector: Oil & Gas
CMP: INR310
TP: INR301(-3%)
Neutral
Financials & Valuations (INR b)
Y/E Mar
2017 2018E
Net Sales
38.1
45.5
EBITDA
9.6
11.4
PAT
6.2
6.9
EPS (INR)
8.8
9.9
Gr. (%)
46.9
12.7
BV/Sh (INR)
41.8
49.4
RoE (%)
21.0
21.7
RoCE (%)
19.8
20.6
P/E (x)
35.3
31.3
P/BV (x)
7.4
6.3
n
2019E
50.9
12.6
7.7
11.0
10.5
58.0
20.4
19.5
28.3
5.3
n
Valuation view
n
33.8% in 2QFY17).
Strong CNG/PNG volume growth continues:
CNG volumes grew 13% YoY
(+6% QoQ) to 3.91mmscmd, while PNG volumes grew 18% YoY (+9% QoQ)
to 1.30mmscmd. Total volumes grew 14% YoY (+6% QoQ) to 5.22mmscmd.
PAT for IGL’s subsidiaries (CUGL and MNGL) stood at INR410m (IGL’s share:
~50% at INR210m in 2QFY18).
IGL has received permission from the Haryana government to lay a city gas
distribution network in a part of the Gurugram district. We believe more
such permissions in other areas of Gurugram can boost IGL’s prospects.
Led by a strong focus on curbing pollution in the National Capital Region,
CNG sales volume is likely to grow strongly. The expected restriction on the
usage of dirty fuel would propel volume further for the company. We model
FY19/20 volume growth at 10%/12% and EBITDA/scm at INR6.
We believe (a) IGL’s consistent operational outperformance, (b)
government’s thrust for the usage of gas and (c) sustainable high-growth
market warrant premium valuation for IGL v/s global peer average (~18.2x
PE). We raise our valuation multiple to 21.8x (v/s 18.2x earlier), 20%
premium to global peers. Our SOTP-based fair value stands at INR301 (21.8x
FY19-20E EPS + JV earnings post 20% discount). The stock trades at 28.3x
FY19E EPS of INR11. Maintain
Neutral.
Growing prospects may result in
further re-rating of the stock and could pose upside risk to our call.
FY18
2Q
3QE
4QE
11,261 11,439 12,483
17.0
20.8
24.6
2,816 2,863 3,096
5.9
6.0
6.2
25.0
25.0
24.8
9.4
12.1
27.8
450
470
527
4
0
0
249.7 280.0 300.4
2,612 2,673 2,870
0
0
0
2,612 2,673 2,870
923
909
976
35.3
34.0
34.0
1,689 1,764 1,894
1,689 1,764 1,894
FY17
FY18E
(INR Million)
FY18 Variance
2QE vs Est
11,360
-0.9%
18.0
2,849
-1.1%
6.0
-2.6%
25.1
10.6
465
-3.2%
0
245.0
1.9%
2,629
-0.6%
0
2,629
-0.6%
894
3.3%
34.0
1,735
-2.7%
1,735
-2.7%
n
Estimate change
TP change
Rating change
n
Quarterly performance
Y/E MARCH
Net Sales
Change (%)
EBITDA
EBITDA (Rs/scm)
% of Net Sales
% Change
Depreciation
Interest
Other Income
PBT before EO
EO
PBT after EO
Tax
Rate (%)
PAT
Adj. PAT
E: MOSL Estimates
1Q
8,970
-0.3
2,570
6.5
28.7
32.7
466
0
106.5
2,211
0
2,211
731
33.1
1,480
1,480
FY17
2Q
3Q
4Q
9,624 9,467 10,019
-0.3
2.1
13.1
2,575 2,554 2,422
6.1
6.0
5.6
26.8
27.0
24.2
37.0
38.0
36.2
483
479
244
0
0
12
251.4 152.4 208.8
2,344 2,227 2,375
-167
-83
-300
2,177 2,144 2,075
735
696
734
33.8
32.5
35.4
1,442 1,448 1,341
1,552 1,504 1,535
1Q
10,492
17.0
2,773
6.2
26.4
7.9
439
4
178.8
2,509
0
2,509
897
35.7
1,613
1,613
38,081 45,675
3.5
19.9
10,121 11,548
6.1
6.1
26.6
25.3
35.9
14.1
1,671
1,886
12
7
719.1 1,008.9
9,157 10,664
-550
0
8,607 10,664
2,896
3,704
33.7
34.7
5,711
6,960
6,076
6,960
10 November 2017
11

Muthoot Finance
BSE SENSEX
33,251
Bloomberg
Equity Shares (m)
M.Cap. (INR b) / (USD b)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
12M Avg Val (INR m)
Free float (%)
S&P CNX
CMP: INR490
TP: INR550 (+12%) Downgrade to Neutral
10,309
MUTH IN
Growth remains elusive; quarter driven by one-offs
399.5
n
2QFY18 PAT grew 53% YoY (+29% QoQ) to INR4.5b (15% beat). Although
181/2.9
revenue came in 31% above estimate, it was largely offset by higher-than-
526 / 261
expected provisioning.
-4/16/15
293
n
AUM was flat at INR276b. We note that AUM in east grew 15%/13%
YoY/QoQ to INR22.1b, while that in west, north and south remained
26.3
2020E
46.1
31.8
19.2
48.1
263.8
5.6
19.6
2.0
10.2
1.9
n
9 November 2017
2QFY18 Results Update | Sector: Financials
Financials & Valuations (INR b)
Y/E March
2018E 2019E
NII
39.7
40.5
PPP
28.2
27.7
PAT
17.0
16.8
EPS (INR)
42.6
42.0
BV/Sh.(INR)
195.4 227.3
RoA on AUM (%)
6.0
5.5
RoE (%)
23.8
19.9
Div. Yld. (%)
1.7
1.7
P/E (x)
11.5
11.7
P/BV (x)
2.5
2.2
n
n
n
n
stagnant sequentially.
NII grew 52%/36% YoY/QoQ to INR11.5b, largely led by 440bp QoQ
expansion in NIM (calculated) to 17%. This was driven by a 380bp QoQ rise
in calculated yields to 24% and a 100bp decline in cost of funds to 8.8%. The
company witnessed strong penal interest collections from overdue accounts,
which resulted in a sharp spike in yields.
Branch rationalization and lower employee count led to a 900bp sequential
decline in CIR to 26.4%. Note that this is the second consecutive quarter of
reduction in employee count.
Asset quality deteriorated on a sequential basis, with the GNPL ratio almost
doubling to 4.56% (v/s 2.25% in 1QFY18). Management attributed this to
increased delinquencies in the six-month tenured product, which is now
discontinued. However, management is confident of recoveries from NPLs.
Provisions in 2QFY18 were higher than expected at INR1.2b v/s INR66m in
1QFY18, due to an increase in std. asset provisioning from 1% to 1.25%.
Valuation and view:
Since demonetization, growth has been elusive for gold
financiers. We believe growth will remain modest in the medium term. Asset
quality has been stable so far, but final recoveries are contingent on gold
prices. We cut our AUM growth numbers by 3-5% over FY18-20. We increase
our FY18 estimate by 10% due to 2Q surprise, but decrease our FY19
estimate by 5% to factor in lower growth. Given the run-up in the stock, we
downgrade to
Neutral
with an unchanged TP of INR550 (2.3x Sept-19E BV).
FY17
2Q
13,497
320
13,817
21.6
45
13,862
21.6
5,937
7,925
3,130
4,795
69.5
171
4,624
1,657
2,967
70.0
FY18
2Q
16,385
264
16,649
20.5
50
16,699
20.5
4,889
11,810
3,114
8,696
81.4
1,170
7,526
2,985
4,542
53.1
FY17E
3Q
14,747
200
14,947
11.5
60
15,007
11.5
4,914
10,093
3,145
6,948
54.6
200
6,748
2,362
4,386
50.7
4Q
14,840
171
15,011
-12.2
66
15,077
-12.0
4,925
10,152
3,197
6,955
-16.4
337
6,618
2,022
4,596
42.8
56,395
891
57,286
17.8
181
57,467
17.9
22,938
34,529
12,503
22,026
48.9
2,816
19,211
7,411
11,799
45.7
(INR M)
FY18E
59,729
800
60,529
5.7
240
60,769
5.7
20,054
40,715
12,531
28,183
28.0
1,773
26,411
9,376
17,035
44.4
Quarterly Performance
Y/E March
Income from operations
Other operating income
Total Operating income
YoY Growth (%)
Other income
Total Income
YoY Growth (%)
Interest Expenses
Net Income
Operating Expenses
Operating Profit
YoY Growth (%)
Provisions
Profit before Tax
Tax Provisions
Net Profit
YoY Growth (%)
E: MOSL Estimates
1Q
12,712
252
12,964
13.7
44
13,008
13.8
5,571
7,437
3,025
4,413
50.1
176
4,237
1,534
2,703
47.6
3Q
13,225
184
13,409
17.8
56
13,464
18.0
5,970
7,494
3,000
4,495
51.2
39
4,456
1,545
2,911
55.9
4Q
16,962
135
17,096
18.2
36
17,132
18.0
5,460
11,672
3,349
8,323
37.6
2,430
5,893
2,675
3,218
21.3
1Q
13,758
165
13,923
7.4
63
13,986
7.5
5,326
8,660
3,075
5,585
26.6
66
5,518
2,007
3,511
29.9
10 November 2017
12

RESULTS
FLASH
Endurance Technologies
BSE SENSEX
33,251
S&P CNX
10,309
9 November 2017
Results Flash | Sector: Automobiles
CMP: INR1,152
TP: INR1,229
Buy
We will revisit our estimates
post earnings call/management
interaction.
In-line performance; EU better than est.
Strong India business performance drives consolidated performance
n
Consol. revenue grew 11.9% YoY to INR16.2b (in line with est. of INR16.3b).
EBITDA stood at INR2.3b (in line with est. INR2.3b). Lower-than-expected RM
and staff costs were offset by higher other expenses. EBITDA margin of 14.1%
was in line with our estimate of 13.9%. PAT grew 11.6% YoY to INR997m, which
was lower than our estimate of INR1.1m, primarily due to higher tax.
n
Standalone revenue grew 10.4% YoY to INR11.8b (est. of INR12b). This would
be driven by the ramp-up with HMSI and HMCL. EBITDA margin at 12.8%
(+25bp YoY, +20bp QoQ) was lower than our estimate of 13.1%, primarily led
by higher other expenses. Higher tax rate restricted PAT to INR731m (+10.2%
YoY; lower than est. of INR848m).
n
EU business (derived) revenues grew by ~16% YoY to INR4.4b (est. of INR4.2b).
EBITDA margin expanded 20bp YoY (+130bp QoQ) to 17.7% (est. of 16%). PAT
grew 15.8% YoY to INR266m (est. of INR234m).
Key questions for management
n
Whether aftermarket still stands affected post GST and outlook.
n
Update on supplies to HMSI and Hero MotoCorp.
n
Whether it supplies disc brakes in recent launches (RE 650cc, HMSI Grazia, etc.)
n
Reason for a higher effective tax rate.
Valuation view:
We will revisit our estimates post the earnings call. The stock
trades at 38.9x/29.3x FY18/19E EPS.
Buy
with a TP of INR1,229.
(INR Million)
FY18E
63,679
14.0
8,920
14.0
3,117
226
385
4,168
26.2
44,962
15.9
5,785
12.9
2,915
31.6
18,717
9.6
3,135
16.7
1,252
15.1
2QE
16,250
12.2
2,256
13.9
760
57
95
1,082
21.2
12,032
13.0
1,582
13.1
848
27.9
4,217
10.0
674
16.0
234
1.8
Conference Call Details
Date:
10 Nov 2017
Time:
10:00am
IST
Dial-in details:
+91-22-3938 1075
th
Financials & Valuations (INR b)
2018E 2019E
Y/E Mar
Net Sales
63.7
72.7
EBITDA
8.9
10.6
NP
4.2
5.5
EPS (INR)
29.6
39.3
EPS Gr. (%)
26.2
32.6
BV/Sh. (INR)
148.3 179.1
RoE (%)
21.8
24.0
RoCE (%)
18.3
21.4
P/E (x)
38.9
29.3
EV/EBITDA(x)
18.5
15.3
2020E
84.1
12.6
6.9
49.2
25.1
213.4
25.0
23.4
23.4
12.6
Consolidated - Quarterly
Y/E March
INR m
Net Sales
YoY Change (%)
EBITDA
Margins (%)
Depreciation
Interest
Other Income
Adj. PAT
YoY Change (%)
Net Sales
YoY Change (%)
EBITDA
Margins (%)
Adj. PAT
YoY Change (%)
Net Sales
YoY Change (%)
EBITDA
Margins (%)
Adj PAT
YoY Change (%)
1Q
14,402
13.3
1,865
13.0
684
104
89
880
15.2
Standalone Performance
FY17
FY18
FY17
2Q
3Q
4Q
1Q
2Q
3QE
4QE
14,482 13,203 13,803 15,503 16,204 15,680 16,292 55,880
7.5
2.4
4.8
7.6
11.9
18.8
18.0
6.8
2,008 1,769 1,898 2,136 2,292 2,202 2,290 7,555
13.9
13.4
13.8
13.8
14.1
14.0
14.1
13.5
699
741
781
742
768
790
817 2,905
81
88
49
57
69
57
44
322
54
73
119
60
62
110
153
319
893
743
835
965
997 1,024 1,181 3,303
14.8
13.6
3.3
9.7
11.6
37.8
41.4
9.9
8,929
-1.1
1,042
11.7
472
10.5
4,274
10.5
727
17.0
271
19.3
9,595 10,760 11,760 10,894 11,548 38,798
5.3
11.8
10.4
22.0
20.4
5.6
1,132 1,360 1,507 1,383 1,536 4,710
11.8
12.6
12.8
12.7
13.3
12.1
525
679
731
687
834 2,215
-6.6
22.3
10.2
45.6
58.9
6.2
4,208
3.6
766
18.2
262
6.7
4,743
-0.7
776
16.4
286
-11.8
4,444
15.9
785
17.7
266
15.8
4,786
12.0
819
17.1
337
24.3
4,743 17,082
12.7
9.7
755 2,844
15.9
16.7
347 1,088
32.1
18.5
Var
(%)
-0.3
1.6
30bp
-7.9
9,626 10,648
10.0
9.7
1,184 1,337
12.3
12.6
555
663
1.8
20.2
4,776
20.6
682
14.3
324
48.8
3,834
1.9
670
17.5
230
1.7
-2.3
-4.8
-30bp
-13.9
EU Subs (Derived)
5.4
16.4
170bp
13.7
10 November 2017
13

Jindal Steel and Power
BSE SENSEX
33,251
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
Avg Val, INRm/ Vol m
Free float (%)
S&P CNX
10,309
JSP IN
915
150.3 / 2.3
170/63
0/37/112
1,449.1 / 2.2
38.1
9 November 2017
2QFY18 Results Update | Sector: Metals
CMP: INR164
TP: INR209(+27%)
Buy
Oman reports strong numbers, drives upgrade
JPL to benefit from 350MW PPAs; Maintain Buy
Jindal Steel & Power’s (JSP) 2QFY18 consolidated EBITDA increased 62% YoY to
INR13.7b (est. of INR12.4b). Oman steel plants’ performance was very strong, as
EBITDA increased 73% QoQ to INR3.6b, driven by full capacity utilization and higher
spreads. Standalone business’ performance was boosted by strong pellet sales,
whereas steel volumes disappointed. Interest cost has inched up on restructuring
of loans. Jindal Power’s PLF was low due to seasonal factors and shortage of coal.
JSP has received INR11.2b from sale and lease back of its oxygen plant at Angul to
strengthen its balance sheet.
Jindal Power: 150MW Kerala and 200MW TN will be key growth drivers
n
We expect Jindal Power’s earnings to pick up in subsequent quarters, as Kerala
has started scheduling power w.e.f. October 2017, as per the terms of the
150MW long-term PPA signed many years ago. Tamil Nadu has extended
200MW PPA for another two years, which will ensure continuity of earnings
from EUP1 (1000MW). We understand that sale of EUP1 to JSW Energy is
unlikely to go through. Therefore, we are adjusting our model, resulting in
higher consolidated debt and EBITDA. This is largely valuation-neutral.
Raising estimates and target price; Maintain Buy
n
Steel production increased 19% QoQ to 430kt, improving utilization to ~90% at
Oman. We are raising estimates for Oman to factor in higher capacity
utilization and expansion of spreads between scrap and steel prices.
n
Standalone steel production is likely to see a steep increase in FY19 on
commissioning of BOF and Angul toward to the end of FY18E.
n
Consolidated EBITDA is raised by 6.4%/9.5% to INR62.9/86.6b for FY18E/FY19E
due to upgrade in Oman and annulling of EUP1 sale. Equity value is raised from
INR192 to INR209/share, largely due to upgrade in Oman plant. Maintain
Buy.
INR million
1Q
59,364
26.4
13,527
37.5
22.8
9,006
9,622
0
-5,101
0
-5,101
-887
17.4
-4,214
-334
10
-3,871
-15.2
FY18
FY17 FY18E
2Q
3QE
4QE
62,393 69,137 74,730 216,243 265,624
28.4
23.9
15.2
11.1
22.8
13,734 17,409 18,226 46,613 62,896
61.9
36.4
17.4
35.5
34.9
22.0
25.2
24.4
21.6
23.7
9,268
9,525
9,609 34,240 37,408
9,977 11,793 11,855 39,490 43,247
14
1
1
411
16
-5,496 -3,908 -3,237 -26,706 -17,742
-1,497
0
0 -3,723 -1,497
-6,994 -3,908 -3,237 -30,429 -19,239
-1,999
17
18 -5,027 -2,851
28.6
-0.4
-0.6
16.5
14.8
-4,995 -3,925 -3,255 -25,402 -16,389
-497
-23
-23 -2,524
-876
19
100
100
27
228
-2,982 -3,802 -3,133 -19,128 -13,787
-60.0
-6.7
3.4
14.8
-27.9
vs Est
2QE
(%)
57,840
8
19.0
12,390
11
46.0
21.4
7,698
20
11,173
-11
1
-6,480
-15
0
-6,480
8
16
-0.2
-6,496
-23
-23
100
-6,373
-53
-14.6
Financials & Valuations (INR b)
Y/E Mar
2017 2018E 2019E
Net Sales
216.2 265.6 334.8
EBITDA
46.6
62.9
86.6
PAT
-19.1 -13.8
0.4
EPS (INR)
-20.9 -15.1
0.5
Gr. (%)
14.8 -27.9 -103.0
BV/Sh (INR)
328.5 311.5 311.5
RoE (%)
-7.9
-4.7
0.1
RoCE (%)
1.0
2.4
4.9
P/E (x)
-7.9 -10.9 361.6
P/BV (x)
0.5
0.5
0.5
Estimate change
TP change
Rating change
Quarterly Performance (Consolidated)
Y/E March
Net Sales
Change (YoY %)
EBITDA
Change (YoY %)
As % of Net Sales
Interest
Depreciation
Other Income
PBT (before EO item)
Extra-ordinary Income
PBT (after EO item)
Total Tax
% Tax
Reported PAT
MI - Loss/(Profit)
Associate
Adjusted PAT
Change (YoY %)
1Q
46,962
-1.2
9,841
-3.3
21.0
8,529
9,171
312
-7,548
-6,257
-13,805
-1,410
10.2
-12,395
-1,560
14
-4,564
34.5
FY17
2Q
3Q
4Q
48,609 55,812 64,861
-3.6
21.5
27.7
8,484 12,767 15,521
-13.1 132.0
73.1
17.5
22.9
23.9
8,716 8,353 8,642
9,986 10,274 10,059
7
3
90
-10,211 -5,856 -3,090
0
0 2,534
-10,211 -5,856
-556
-2,739 -1,306
428
26.8
22.3
-76.9
-7,473 -4,551
-984
-2
-458
-505
11
18
-16
-7,460 -4,074 -3,029
317.8
-38.7
-37.4
10 November 2017
14

RESULTS
FLASH
Amara Raja Batteries
BSE SENSEX
33,251
S&P CNX
10,309
9 Nov 2017
Results Flash | Sector: Automobiles
CMP: INR735
TP: INR854(+16%)
BUY
We will revisit our estimates
post earnings call/management
interaction.
Conference Call Details
Date:
10 Nov 2017
Time:
11.30am IST
Dial-in details:
+91-22-39600627/
3940 3977
th
Financials & Valuations (INR b)
2018E 2019E
Y/E Mar
Net Sales
61.6
73.0
EBITDA
8.0
10.1
NP
4.4
5.6
EPS (INR)
25.6
32.9
EPS Gr. (%)
(8.7)
28.8
BV/Sh. (INR)
173
200
RoE (%)
15.8
17.7
RoCE (%)
15.0
16.9
P/E (x)
28.7
22.3
P/BV (x)
4.3
3.7
2020E
85.6
12.7
7.3
43.0
30.4
235
19.8
18.9
17.1
3.1
Operating performance above expectations; 3.7% EBITDA margin beat
n
Net sales grew 7.1% YoY (but declined 4.7% QoQ) to INR14.3b, below our
estimate of INR15.5b.
n
Volume growth was led by healthy growth in automotive segment. As indicated
by the management, demand for
Amaron
and
PowerZone
brands was robust in
both two-wheeler and four-wheeler segments.
n
Tubular battery sales to home UPS segment also sustained momentum.
n
On the industrial side, all segments witnessed growth except telecom.
n
Gross margin expanded 400bp YoY (but declined 200bp QoQ) to 34%, beating
our estimate of 30%, led by lower than expected RM/Sales. The management
indicated that lead price inflation persists, but AMRJ’s cost management and
pricing actions helped report healthy operating performance.
n
EBITDA grew 3.6% YoY (and 23.4% QoQ) to INR2.4b (our estimate: INR2b).
n
EBITDA margin expanded 380bp QoQ (but declined 50bp YoY) to 16.7%,
beating our estimate of 13%.
n
Lower other income at INR122m (our estimate: INR175m) and higher tax rate
at 33.3% (our estimate: 31%) led to adjusted PAT declining by 6.7% YoY (but
increasing 27.4% QoQ) to INR1.27b (our estimate: INR1.1b).
n
During the quarter, AMRJ introduced
Amaron Brute hi-life
batteries for motive
power applications.
n
More details post con-call tomorrow.
Key questions for the management
n
Demand update for automotive and industrial segments.
n
Reasons behind decline in RM costs QoQ – how much due to product mix
impact, price hikes, and commodity prices.
n
Impact of increasing lead prices in coming quarters.
n
Comments on the shift from unorganized to organized segment due to GST.
Valuation and view:
The stock trades at 28.7x FY18E and 22.3x FY19E EPS. We have
a
Buy
rating on the stock, with a TP of INR854.
FY17
2Q
3Q
4Q
13,331 13,280 13,445
15.8
9.5
17.4
63.9
65.0
68.0
5.2
5.4
5.2
13.7
14.1
13.0
2,297 2,051 1,844
17.2
15.4
13.7
457
480
499
15
14
15
120
133
151
1,945 1,689 1,480
29.9
33.5
33.0
1,363 1,123
992
10.4
-17.9
-9.1
FY18
FY17 FY18E
2Q
3QE
4QE
14,275 15,538 16,825 53,172 61,612
7.1
17.0
25.1
15.1
15.9
66.0
69.5
72.2
65.6
69.5
5.2
5.1
5.3
4.7
4.2
12.1
12.5
12.4
13.9
11.6
2,381 1,997 1,709 8,499 8,016
16.7
12.9
10.2
16.0
13.0
584
550
565 1,912 2,242
13
12
13
58
51
122
190
251
492
700
1,907 1,625 1,382 7,022 6,422
33.3
31.5
28.9
31.9
32.0
1,272 1,113
983 4,785 4,367
-6.7
-0.9
-0.9
-2.7
-8.7
FY18
2QE VAR (%)
15,474
-7.7
15.0
70.0 -400bp
5.2
0bp
11.8
30bp
2,006
18.7
13.0
370bp
550
6.1
14
-10.7
175
-30.1
1,617
17.9
31.5
1,108
14.8
-18.7
Quarterly Performance
Y/E March (INR m)
Net Sales
YoY Change (%)
RM Cost (% of sales)
Staff Cost (% of sales)
Other Exp (% of sales)
EBITDA
Margins (%)
Depreciation
Interest
Other Income
PBT
Rate (%)
Adj PAT
YoY Change (%)
1Q
13,081
15.0
65.7
5.0
11.9
2,273
17.4
441
14
90
1,908
31.5
1,307
8.0
1Q
14,975
14.5
70.0
5.4
11.7
1,929
12.9
544
14
137
1,508
33.7
999
-23.6
10 November 2017
15

9 November 2017
2QFY18 Results Update | Sector: Capital Goods
Thermax
Neutral
BSE SENSEX
33,251
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
10,309
TMX IN
Miss led by GST-related dispatch issues
119.2
n
Operational results impacted by GST-related dispatch issues:
2QFY18
116.8 / 1.7
operating performance at the standalone level was below expectations.
1071 / 738
Sales grew 2.2% YoY to INR8.6b (est. of INR9.3b), impacted by continued
2/-14/-7
56.0
GST-led dispatch issues (input tax credit yet to be given to cap goods).
38.0
1QFY18 too had witnessed sales impact of INR1.2b on account of dispatch
CMP: INR980
TP: INR930(-5%)
Financials & Valuations (INR b)
Y/E Mar
2017 2018E
Net Sales
44.8
48.0
EBITDA
4.7
4.7
PAT
3.5
3.4
EPS (INR)
30.8
29.9
Gr. (%)
23.0
-3.2
BV/Sh (INR)
225.4
247.5
RoE (%)
14.3
12.6
RoCE (%)
12.9
12.9
P/E (x)
30.7
31.7
P/BV (x)
4.2
3.8
2019E
53.0
5.5
3.9
34.4
15.2
273.4
13.2
13.2
27.6
3.5
n
Estimate change
TP change
Rating change
n
issues. However, TMX was able to recover INR1b of sales in 2QFY18. Gross
margin shrunk 100bp YoY to 43.7%. EBITDA grew 11% YoY to INR0.9b (est. of
INR0.8b), and the operating margin improved 90bp YoY to 10.0% (est. of
8.7%), led by a reduction in other expenses (-290bp YoY to 20.6%). Adj. net
profit declined 5% YoY to INR0.6b (est. of INR0.62b), impacted by lower
other income, higher interest expense and a higher tax rate.
Weak performance at subsidiaries:
Subsidiaries’ revenue was down 25%
YoY to INR1.6b, EBIDTA was down 67% YoY to INR56m, and breakeven at
PAT level. TMX guided for a loss at the subsidiaries level to continue, with a
quarterly run-rate of INR10m on account of the weak performance at key
subsidiaries like China. At the consolidated level, TMX’s revenue stood at
INR10.3b (-3% YoY), impacted by the sluggish domestic and overseas
business performance. EBIDTA stood at INR952m (+3.6% YoY), with the
margin at 9.2% (+60bp YoY), led by cost-rationalization measures. Adj. PAT
fell 27% YoY to INR568m on a higher tax rate (39% v/s 33% in 2QFY17).
Valuation view:
We maintain
Neutral
with a revised TP of INR930 (25x
FY20E EPS of INR37.3, based on last 10-year average P/E multiple), given the
improving domestic end-market outlook.
(INR Million)
FY18
2Q
3Q
4Q
8,639 9,375 16,384
2.2
15.2
22.0
861
991 1,827
11.3
22.9
20.1
10.0
10.6
11.2
150
179
237
38
10
-17
219
180
147
892
982 1,754
323
314
513
36.2
32.0
29.2
568
668 1,242
(4.7)
17.9 (843.0)
568
668 1,242
(4.7)
17.9
6.9
FY17 FY18E
37,637 42,031
-15.6
11.7
3,738 4,137
-24.5
10.7
9.9
9.8
654
715
36
36
1,027
768
4,074 4,154
1,298 1,323
31.8
31.8
1,448 2,831
(65.4)
95.5
2,777 2,831
(33.6)
2.0
MOSL
2Q Est
9,303
6.8
814
5.3
8.7
179
9
290
916
293
32.0
623
4.4
623
4.4
Var.
Vs Est
-7.1%
5.8%
Quarterly Performance
(Standalone)
Y/E March
Sales
Change (%)
EBITDA
Change (%)
As of % Sales
Depreciation
Interest
Other Income
PBT
Tax
Effective Tax Rate (%)
Reported PAT
Change (%)
Adj PAT
Change (%)
1Q
7,914
-22.2
637
-19.1
8.1
168
7
211
673
221
32.8
452
(19.0)
452
(19.0)
FY17
2Q
3Q
4Q
8,453 8,136 13,428
-21.9 -21.4
3.9
773
806 1,521
-14.7
0.0
22.6
9.1
9.9
11.3
166
157
163
7
6
17
289
206
321
888
850
335
292
283
502
32.8
33.3 150.0
597
566
-167
(3.5) (11.1) (114.4)
597
566 1,161
(3.3)
(8.3)
0.0
1Q
7,134
-9.9
429
-32.6
6.0
150
5
222
497
173
34.8
324
(28.3)
324
(28.3)
-2.7%
-8.7%
-8.7%
10 November 2017
16

RESULTS
FLASH
9 November 2017
Results Flash | Sector: Diversified
SRF
Buy
BSE SENSEX
33,251
S&P CNX
10,309
CMP: INR1638
n
TP: INR1798(+10%)
We will revisit our estimates
post earnings call/management
interaction.
Results below estimates, Technical textile business de-grows
SRF’s revenue grew 5.8% YoY to INR12.86b (est. of INR14.03b) in 2QFY18.
Chemicals segment grew by 3.8% YoY, packaging rose by 17.5% YoY, while
Technical textile declined 1% YoY.
EBITDA margin contracted 330bp YoY to 16.4% (est. of 18.1%) in 2QFY18 due to
higher-than-expected raw material cost (54.9% of net sales v/s est. of 48.5%).
EBITDA declined 12% YoY to INR2,110m (est. of INR2,541m), as the gross
margin contracted 800bp YoY to 45.1%.
PBIT margin came in at 11.9% for Technical textile v/s 12.7% in 2QFY17; 13.1%
for Chemical v/s 17.5% in 2QFY17; and 12.1% for Packaging v/s 15.1% in
2QFY17.
Consequently, adj. PAT declined 29.7% YoY to INR863m (est. of INR1,147m).
The board has approved setting up of an integrated facility to produce HFCs
and AHF at a capex of ~INR3,560m (the cost includes acquisition cost of
HFC125 assets and technical know-how from a global HFC player).
Conference Call Details
Date:
10th Nov 2017
Time:
04:00pm IST
Dial-in details:
+91-22-3938 1028
n
n
Financials & Valuations (INR m)
2017 2018E 2019E
Y/E Mar
Net Sales
48.2
56.3
65.3
EBITDA
9.7
10.3
12.6
NP
4.9
4.7
6.2
EPS (INR)
85.9
82.6 105.8
EPS Gr. (%)
12.8
-3.9
28.0
BV/Sh. (INR)
544.6 607.2 689.8
RoE (%)
16.6
14.1
16.3
RoCE (%)
17.7
18.0
22.6
P/E (x)
19.1
19.8
15.5
P/BV (x)
3.0
2.7
2.4
n
n
Key questions for management
n
Expected revival in agro industry.
n
Impact of rising commodity prices.
Valuation view:
We will revisit our estimates post the earnings call. Based on our
current estimates, at CMP of INR1,638, the stock trades at 20x/16x P/E on
FY18/FY19E EPS. We have a
Buy
rating on the stock.
10 November 2017
17

RESULTS
FLASH
CG Power & Ind
BSE SENSEX
33,251
S&P CNX
10,309
9 Nov 2017
Results Flash | Sector: Capital Goods
CMP: INR87
n
TP: INR80
Neutral
We will revisit our estimates
post earnings call/management
interaction.
Operating performance ahead of estimates
Consolidated net sales increased 18.4% YoY to INR15.6b, ahead of our estimate
of INR14.2b, led by strong growth in the power systems business (+29% YoY to
INR9.6b). Industrial systems registered muted growth of 3% YoY.
n
Operating profit grew 50% YoY to INR1.3b, ahead of our estimate of INR1.2b.
Operating margin expanded 180bp YoY to 8.5% (est. of 8.1%), driven by better-
than-estimated margins in industrial segment (8.5%; +70bp YoY); power
systems margin expanded 20bp YoY to 9.0%.
n
During the quarter, the company registered a loss of INR4.3b in the
discontinued operations of its overseas power T&D business of Ireland, France
and Belgium. It also intends to divest its two subsidiaries – CG Power
Equipment and CG Power Solutions Ltd – which it has classified as discontinued
businesses.
n
Adjusted loss for the quarter stood at INR99m, as against our estimate of
INR587m profit.
Valuation view:
We will revisit our estimates post the earnings call. The stock
trades at 26.4x/21.9x FY18E/19E EPS. Maintain
Neutral
with a TP of INR80.
Conference Call Details
Date:
10 Nov 2017
Time:
10:00am IST
Dial-in details:
+91-22-3960 0763
th
Financials & Valuations (INR b)
2018E 2019E
Y/E Mar
Net Sales
64.4
69.1
EBITDA
4.9
5.2
NP
2.1
2.5
EPS (INR)
3.3
4.0
EPS Gr. (%)
13.0
20.5
BV/Sh. (INR)
68.6
72.2
RoE (%)
6.1
6.3
RoCE (%)
7.8
6.9
P/E (x)
26.4
21.9
P/BV (x)
1.3
1.2
2020E
76.8
5.9
3.1
4.9
24.2
76.7
7.3
7.6
17.7
1.1
Quarterly performance (Consol.)
1Q
15,234
48.3
1,365
-1,100.1
9.0
381
304
155
0
835
150
18.0
2.4
682
682
(209.0)
FY17
2Q
3Q
4Q
13,155 12,441 17,101
-8.0
10.6
-7.6
881
833 1,181
-32.0
-10.8
-23.7
6.7
6.7
6.9
322
341
438
440
509
625
233
306
232
-331
-717 -4,816
20
-427 -4,465
127
-117
-31
638.2
27.4
0.7
3.6
3.9
6.3
-111
-314 -4,440
220
402
376
(55.8) (25.6) (64.4)
1Q
14,364
-5.7
451
-66.9
3.1
361
537
118
-379
-707
146
-20.6
7.0
-860
-481
(170.5)
FY18
2Q
3QE
15,576 16,107
18.4 29.5
1,319 1,156
49.8 38.8
8.5
7.2
382
331
569
390
300
238
-4,600 -135
-3,931
538
216
88
-5.5 16.3
551.2
3.4
-4,699
447
-99
582
(144.8) 44.8
FY17
FY18
4QE
18,382 61,198 64,429
7.5
9.4
5.3
1,855 4,702 4,862
57.0
9.3
3.4
10.1
249 1,500 1,322
-50 1,880 1,446
225
687
880
4,335
6,215 2,009 2,974
-55
166
394
-0.9
8.3
13.3
6.3
15.7
15.7
6,264 1,827 2,564
1,929 1,827 2,564
413.2 (18.6)
40.3
(INR M)
FY18
2Q
vs Est
14,174
10%
7.1
1,151
15%
36.4
8.1
331
361
220
-125
554 -810%
88
15.9
3.6
462 -1117%
587 -117%
25.3
Sales (Net)
Change (%)
EBITDA
Change (%)
As of % Sales (Adj)
Depreciation
Interest
Other Income
EO Income/(Exp)
PBT
Tax
Effective Tax Rate (%)
Minority interest
Reported PAT
Adjusted PAT
Change (%)
E: MOSL Estimates
10 November 2017
18

09 November 2017
2QFY18 Results Update | Sector: Cement
India Cements
Neutral
BSE SENSEX
33,251
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
10,309
ICEM IN
EBITDA beat led by lower other expenses
308
n
Realizations decline due to weak pricing:
ICEM posted volume of 2.7mt (-
53.6 / 0.8
2% YoY, +2% QoQ) due to lower volume in south on account of demand
226 / 105
weakness in Tamil Nadu. Blended realizations fell 3% QoQ to INR4,696/t due
-9/-27/-3
887.9
to weak prices in south. Cement realization declined 5% QoQ on a fall in the
71.8
underlying markets of TN and AP/Telangana. Revenue fell 2% QoQ to
CMP: INR174
TP: INR188 (+8%)
Financials & Valuations (INR b)
Y/E Mar
2018E 2019E
Net Sales
54.0
61.3
EBITDA
8.4
10.5
PAT
1.8
3.2
EPS (INR)
5.8
10.5
Gr. (%)
3.9
80.4
BV/Sh (INR)
170.5 179.9
RoE (%)
3.5
6.0
RoCE (%)
5.2
6.7
P/E (x)
29.8
16.5
P/BV (x)
1.0
1.0
2020E
n
69.4
12.0
3.7
12.1
14.9
190.8
6.5
6.9
n
14.4
0.9
n
Estimate change
TP change
Rating change
INR12.68b (YoY financials are not comparable as 2QFY17 does not include
Trinetra merger).
Margins flat QoQ:
EBITDA fell 2% QoQ to INR1.85b. Margin of 14.3% was flat
QoQ. Hence, blended EBITDA/ton declined INR27 QoQ to INR672, as
realization decline was offset by lower other expenses. Cement EBITDA/t
stood at INR647 (-INR64 QoQ). Debt levels have increased by ~INR2.5b due
to higher receivables on account of credit extension in new markets, where
ICEM has entered in 1HFY18.
Key takeaways from conference call:
1) Petcoke is 81% of fuel mix, which
was priced at USD92 for 2Q. 2) Other expenses were lower due to the
absence of advertising and maintenance costs. 3) South is at utilization of
sub-60%. 4) Estimated capex for FY18 is INR1.5b.
Maintain Neutral:
ICEM, which enjoys good brand recall/market share, is a
healthy play on a southern recovery. However, despite its strategically
located plants, the cost structure is relatively high due to vintage
constraints. High investments in non-cement businesses, elevated debt
levels and subdued return ratios keep valuation at discount. We maintain
Neutral
with a TP of INR188 (EV of 7x FY20E EBITDA). Sustained recovery in
southern demand and improvement in capital allocation would be the key
re-rating triggers, in our view.
FY18
2Q
3QE
2.70
2.76
10
2
4,696
4,845
-10.7
4.6
-3.3
3.2
12,683 13,393
-3.0
6.7
1,814
2,085
14.3
15.6
632
630
886
890
66
49
362
614
125
153
34.6
25.0
237
460
237
460
FY17 FY18E
4QE
2.96 11.00 11.08
2
27.3
0.7
5,061 4,589 4,840
9.2 -16.7
5.5
4.5
14,988 50,795 53,964
11.6
5.6
6.2
2,642 8,610 8,396
17.6
17.0
15.6
625 2,571 2,517
852 3,605 3,502
29
165
196
1,193 2,600 2,573
353
867
772
29.6
33.3
30.0
840 1,734 1,801
840 1,734 1,801
(INR Million)
FY18
Var.
2QE
(%)
2.68
1
9.1
4,706
0
-10.5
-3.1
12,627
0
-3.4
1,636
11
13.0
630
810
49
245
61
25.0
183
29
183
Quarterly Performance (Standalone)
Y/E March
FY17
1Q
2Q
3Q
4Q
1Q
Sales Dispatches (m ton)
2.31
2.46
2.71
2.90
2.66
YoY Change (%)
10
14
40
19
15
Realization (INR/ton)
5,173
5,259
4,633
4,633
4,857
YoY Change (%)
2.5
-5.6
-14.4
-0.9
-6.1
QoQ Change (%)
10.7
1.7
-11.9
0.0
4.8
Net Sales
12,025 13,075 12,556 13,436 12,901
YoY Change (%)
11.9
6.7
18.6
17.1
7.3
EBITDA
2,014
2,244
2,033
1,900
1,856
Margins (%)
16.7
17.2
16.2
14.1
14.4
Depreciation
511
521
644
639
630
Interest
825
876
931
820
874
Other Income
32
69
36
17
52
PBT
710
917
495
458
404
Tax
271
293
189
115
140
Rate (%)
38.1
31.9
38.2
25.1
34.6
Reported PAT
440
624
306
343
264
Adj PAT
440
624
306
343
264
E: MOSL Estimates; YoY figures not comparable due to Trinetra merger
10 November 2017
19

RESULTS
FLASH
Jagran Prakashan
BSE SENSEX
33,251
S&P CNX
10,309
09 November 2017
Results Flash | Sector: Media
CMP: INR173
n
n
n
n
n
n
n
TP: INR225
Buy
We will revisit our estimates post
earnings call/management
interaction.
PAT down 19% YoY on higher cost
Consol. revenue rose 2% YoY (-4% QoQ) to INR5.7b (4% miss).
Advertising revenue grew marginally by 1% YoY (-6% QoQ) to INR3.5b (in-
line). DB Corp/HT Media reported growth of 6%/-8% YoY.
Circulation revenue of INR1.1b was flat YoY (-2% QoQ; 5% miss). DB
Corp/HT Media reported growth of 8%/-9% YoY.
Radio revenue was up 10% YoY (+8% QoQ; 16% miss) at INR758m.
Consol. EBITDA was down 9.4% YoY (-14% QoQ) at INR1.4b (14.6% miss).
Consol. EBITDA margin contracted 310bp YoY (-280bp QoQ) to 24.5%
(300bp miss), impacted by an 8%/10% YoY increase in employee/other exp.
Business-wise, Dainik Jagran saw 10% YoY EBITDA decline (~80% of consol.
EBITDA) on flat revenues and a 310bp margin contraction. Mid-day business
EBITDA (~3% of consol. EBITDA) was up 39% YoY.
PAT was down 19% YoY (-20% QoQ) to INR695m (26% miss), impacted by a
10% increase in D&A, partly cushioned by a 5% YoY decline in interest cost
and a 12% YoY rise in other income.
Conference Call Details
Date:
13th Nov 2017
Time:
11:30am IST
Dial-in details:
+91-22-3938 1074
Financials & Valuations (INR b)
2017 2018E
Y/E Mar
Net Sales
22.8
24.5
EBITDA
6.4
6.9
Adj NP
3.5
4.0
Adj EPS (INR)
10.7
12.2
EPS Gr. (%)
-11.5
14.3
BV/Sh. (INR)
65.9
65.5
RoE (%)
18.5
18.6
RoCE (%)
15.9
17.1
P/E (x)
16.2
14.1
P/BV (x)
2.6
2.6
EV/EBITDA (x)
8.8
7.7
2019E
26.5
7.6
4.5
13.7
12.3
75.8
19.4
17.9
12.6
2.3
6.6
n
Valuation and view:
We will revisit our estimates post the earnings call. At CMP
of INR173, the stock trades at an attractive P/E of 14.1x FY18E and 12.6x FY19E.
We have a
Buy
rating.
Consol. - Quarterly Earnings (INR m)
Y/E March
Total Revenue from Operations
YoY Change (%)
Total Expenditure
EBITDA
Margins (%)
Depreciation
Interest
Other Income
PBT before EO expense
Extra-Ord expense
PBT
Tax
Rate (%)
Minority Interest & P/L of Asso. Cos.
Reported PAT
Adj PAT
YoY Change (%)
Margins (%)
1Q
5,644
17.3
4,086
1,558
27.6
302
102
93
1,248
0
1,248
407
32.6
3
838
838
-11.6
14.9
FY17
2Q
3Q
5,548 6,016
6.8
4.4
4,018 4,151
1,531 1,866
27.6 31.0
308
329
78
89
112
78
1,257 1,526
0
0
1,257 1,526
396
546
31.5 35.8
8
6
853
974
853
974
5.9
4.4
15.4 16.2
4Q
5,620
6.1
4,180
1,441
25.6
351
81
128
1,137
0
1,137
327
28.7
0
811
811
1.2
14.4
1Q
5,913
4.8
4,301
1,613
27.3
328
72
120
1,333
0
1,333
446
33.5
21
866
866
3.3
14.6
FY18
2Q 3QE
5,665 6,301
2.1
4.7
4,279 4,437
1,386 1,864
24.5 29.6
340
338
74
79
125
195
1,098 1,642
0
0
1,098 1,642
375
542
34.2 33.0
27
0
695 1,100
695 1,100
-18.5 13.0
12.3 17.5
FY17
4QE
6,638
18.1
4,594
2,044
30.8
336
84
264
1,888
0
1,888
604
32.0
0
1,284
1,284
58.3
19.3
22,829
8.4
16,434
6,395
28.0
1,289
350
412
5,168
0
5,168
1,675
32.4
17
3,475
3,475
-2.4
15.2
FY18E
24,518
7.4
17,611
6,907
28.2
1,342
308
704
5,960
0
5,960
1,967
33.0
49
3,945
3,945
13.5
16.1
2QFY18E
5,913
-75.9
4,290
1,622
27.4
338
79
194
1,400
0
1,400
-21.6
462
33.0
0
938
-25.9
938
-25.9
-76.2
15.9
-360bps
Est Var
(%)
-4.2
-100.1
-0.3
-14.6
-297bps
0.5
-6.0
-35.5
-21.6
10 November 2017
20

RESULTS
FLASH
Allcargo Logistic
BSE SENSEX
33,251
S&P CNX
10,309
09 November 2017
Results Flash | Sector: Logistics
CMP: INR170
n
TP: INR213 (+26%)
Buy
We will revisit our estimates post
earnings call/management
interaction.
Healthy growth in MTO; P&E segment performance impacted by lower
revenue and higher provisioning
Conference Call Details
Date:
10 November 2017
Time:
03:00pm IST
Dial-in details:
+91-22-3938 1079
th
Financials & Valuations (INR b)
Y/E March
2018E 2019E
Sales
65.0
73.9
EBITDA
4.7
5.4
Adj. PAT
2.5
3.2
Adj. EPS (INR)
10.3
12.9
EPS Gr. (%)
4.6
25.3
BV/Sh.(INR)
80.7
90.0
RoE (%)
13.4
15.1
RoCE (%)
11.5
13.0
Valuation
P/E (x)
16.5
13.2
P/BV (x)
2.1
1.9
EV/EBITDA (x)
9.1
7.2
2020E
83.7
6.0
3.7
15.3
18.5
100.8
16.0
13.9
11.1
1.7
5.9
Allcargo reported 2QFY18 revenue of INR15.47b (est. of INR16.0b; +10%
YoY, +4% QoQ), led by 15% YoY growth in MTO revenue on 12% YoY
volume growth.
n
Reported EBITDA of INR1.05b (est. of INR1.1b; -17% YoY, +2% QoQ). Lower-
than-estimated EBITDA is on account of EBIT loss from the P&E segment
due to higher provisioning for doubtful debts and a decline in asset
utilization. However, MTO segment reported healthy EBIT growth of 14%
YoY on strong volume growth.
n
Reported EBITDA margin of 6.8% (v/s 9.0% in 2QFY17) due to EBIT loss in
P&E segment. Other income declined 36% YoY to INR51m.
n
PAT of INR638m (est. of INR626m; -2% YoY, +4% QoQ) declined only 2%
YoY due to a lower tax rate of 1% in 2QFY18 v/s 22% in 2QFY17.
Segmental performance
n
MTO segment volumes increased 12% YoY to 1,42,945 TEUs in 2QFY18.
Revenue increased 15% YoY to INR13.88b due to volume growth across key
markets. EBIT margin stood at 4.1% (flat YoY/QoQ).
n
CFS segment volumes declined 6% YoY to 65,362 TEUs due to a decline in
JNPT and Chennai volumes. QoQ volumes are not comparable, as 2QFY18
volumes exclude the Mundra CWC CFS volumes. Revenues declined 10%
YoY to INR1b due to lower volumes and realizations. EBIT margin
contracted ~5.3pp YoY, but expanded 3.2pp on a QoQ basis. YoY
contraction in margins was due to lease rentals of Kolkata CFS.
n
Project and Engineering segment revenue declined 29% YoY to INR700m.
P&E reported EBIT loss of INR40m on account of higher provision for
doubtful debts in 2QFY18.
Valuation and view:
We will revisit our estimates post the earnings call. The
stock at CMP of INR170 trades at 13.2x/11.1x on FY19/FY20E P/E.
FY17
2Q
3Q
4Q
14,084 14,052 13,628
-3.1
6.0
-1.6
12,824 13,059 12,572
1,261
993 1,056
9.0
7.1
7.7
434
407
386
75
78
96
80
246
149
832
754
724
10
63
0
822
691
724
178
211
131
21.7
30.6
18.1
643
480
593
1
12
-20
652
535
572
5.4
-7.7 -10.6
4.6
3.8
4.2
1Q
14,834
6.0
13,805
1,030
6.9
399
83
159
707
0
707
76
10.8
630
-19
611
0.2
4.1
FY18
2Q
3QE
4QE
15,472 16,844 17,836
9.9
19.9
30.9
14,425 15,567 16,518
1,047 1,277 1,318
6.8
7.6
7.4
398
400
427
71
90
98
51
120
170
629
907
963
0
0
0
629
907
963
6
236
387
1.0
26.0
40.2
623
671
576
15
-5
-86
638
671
576
-2.1
25.4
0.6
4.1
4.0
3.2
FY17
55,753
-0.9
51,112
4,641
8.3
1,662
324
534
3,189
73
3,117
776
24.9
2,340
-22
2,414
-3.7
4.3
(INR Million)
FY18E FY18
2QE Var (%)
64,987 16,042
-3.5
16.6
13.9
60,315 14,951
-3.5
4,671 1,091
-4.0
7.2
6.8
1,624
400
-0.5
342
80
-11.5
500
100
-49.3
3,206
711 -11.5
0
0
3,206
711 -11.5
705
85
-92.6
22.0
12.0
-91.7
2,500
626
-0.5
-95
-5
2,406
626
1.9
-0.4
-3.9
3.7
3.9
Consolidated - Quarterly Earning Model
Y/E March
Net Sales
YoY Change (%)
Total Expenditure
EBITDA
Margins (%)
Depreciation
Interest
Other Income
PBT before EO expense
Extra-Ord expense
PBT
Tax
Rate (%)
Reported PAT
Min. Interest & P& L of Asso. Cos.
Adj PAT
YoY Change (%)
Margins (%)
1Q
13,989
-5.2
12,657
1,332
9.5
436
75
59
880
0
880
256
29.1
624
-14
610
-24.6
4.4
10 November 2017
21

9 November 2017
2QFY18 Results Update | Sector: Capital Goods
Va Tech Wabag
Buy
BSE SENSEX
33,251
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
10,309
VATW IN
54.6
31.8 / 0.5
749 / 450
-6/-22/-4
102
75.3
CMP:INR583
n
TP:INR745 (+28%)
Operating performance broadly in-line
Financials & Valuations (INR b)
Y/E Mar
2017 2018E 2019E
Net Sales
32.1
38.9
40.5
EBITDA
3.0
3.7
4.0
PAT
1.6
1.9
2.0
EPS (INR)
29.9
34.5
37.2
Gr. (%)
83.9
15.2
8.0
BV/Sh (INR)
182.1 211.2 242.6
RoE (%)
16.9
17.5
16.4
RoCE (%)
15.9
16.3
15.4
P/E (x)
19.5
16.9
15.7
P/BV (x)
3.2
2.8
2.4
n
n
n
Estimate change
TP change
Rating change
Results in-line at operating level:
Consol. sales grew 14% YoY to INR8.9b,
below our estimate of INR9.7b. Revenue growth was supported by a pick-up in
execution of key orders like Petronas, Polgawela and AMAS (Bahrain).
Standalone sales rose 12% YoY to INR5.1b, while subsidiary sales grew 17% YoY
to INR3.8b. Consol. EBITDA grew 41% YoY to INR0.8b, with the margin of 9.3%
(+181bp YoY) above our estimate of 8.4%. Consol. recurring profit of INR388m
was in line with our estimate of INR396m.
Order backlog of INR71b provides robust revenue visibility:
In 2QFY18, consol.
order intake declined 30% YoY to INR5.0b, led by reduced order finalizations in
the domestic market. Domestic ordering declined 80% YoY to INR1.1b. No
major order was finalized in the domestic segment during the quarter.
However, the medium-term order inflow outlook in the domestic market
stands robust, given the strong pipeline of orders from Namami Gange, Amrut
and municipal STPs, which are expected to be finalized in the medium term.
Order backlog as of 2QFY18 stood muted YoY at INR71b.
Maintains sales, order guidance:
Management maintained its FY18 guidance of
revenue of INR38b-40b (+25%) and order inflow of INR43b-45b (+25%).
Valuation view:
We cut FY18/19 estimates by 1/6% to factor in marginally
lower order inflow, with the delay in order finalizations in the domestic market
impacting execution and profitability. We maintain
Buy
with a TP of INR745
(20x FY19E EPS). We believe that from the medium- to long-term perspective,
VATW is in a sweet spot to take advantage of a pick-up in domestic order
inflows, led by state-driven municipal orders, and central government schemes
like Namami Gange, AMRUT, Swachh Bharat and Smart Cities.
(INR Million)
3Q
4Q
7,130 11,317
16.9
33.3
741 1,317
68.5
16.9
10.4
11.6
46
52
124
161
53
3
624 1,108
45
326
7.2
29.5
21.9
24.1
557
757
168.2
16.2
604.6
0.0
-48
757
167.2
15.8
1QE
6,686
15.2
418
52.2
6.3
45
133
20
259
160
61.7
15.6
84
61.5
0.0
84
61.5
FY18
2QE
8,865
14.0
827
41.4
9.3
45
143
2
642
220
34.3
33.0
388
58.6
52.0
336
58.6
FY17
3QE
9,282
30.2
938
26.5
10.1
52
145
28
769
292
38.0
0.5
476
(14.5)
0.0
476
-14.5
4QE
14,107
24.6
1,511
14.7
10.7
66
154
61
1,351
465
34.4
(47.2)
933
23.2
0.0
933
23.2
32,079
27.9
2,966
27.3
9.2
191
526
112
2,362
667
28.2
61.5
1,634
84.1
609.1
1,024
11.3
FY18E
38,940
21.4
3,694
24.5
9.5
208
575
111
3,021
1,138
37.7
1.9
1,881
15.2
52.0
1,829
78.6
FY18
Var.
2Q Vs Est
9,668
-8.3%
24.4
810
2.1%
40.9
8.4
52
140
26
644
-0.3%
245
38.0
2.7
396
-2.0%
68.0
0.0
396
-15.1%
68.0
Quarterly Performance (Consolidated)
Y/E March
Sales
Change (%)
EBITDA
Change (%)
As of % Sales
Depreciation
Interest
Other Income
PBT
Tax
Effective Tax Rate (%)
Minority Int
Adj PAT
Change (%)
Extra-ordinary Items
Reported PAT
Change (%)
E: MOSL Estimates
1Q
5,803
27.6
275
-0.8
4.7
46
119
55
165
109
66.3
3.7
52
(155.7)
0.0
52
-155.5
FY17
2Q
7,776
31.3
585
25.7
7.5
47
109
19
448
186
41.6
16.7
245
110.6
4.5
240
109.8
10 November 2017
22

Gateway Distriparks
BSE SENSEX
33,251
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
10,309
GDPL IN
109
25.7 / 0.4
292 / 209
-6/-17/-27
52
74.0
9 November 2017
2QFY18 Results Update | Sector: Logistics
CMP: INR236
TP: INR282 (+19%)
Buy
Rail margin revives sharply on cost efficiencies
Financials & Valuations (INR b)
Y/E March
2018E 2019E 2020E
Sales
12.0
13.6
15.5
EBITDA
2.3
2.8
3.3
NP
1.0
1.3
1.5
EPS (INR)
8.8
11.6
14.0
EPS Gr. (%)
21.1
35.0
14.6
RoE (%)
9.2
11.7
13.4
RoCE (%)
10.9
13.7
16.7
P/E (x)
26.9
20.3
16.9
EV/EBITDA (x)
11.4
9.5
7.8
Div. Yield (%)
1.9
2.5
3.2
Estimate change
TP change
Rating change
GDPL reported EBITDA (RAIL + CFS) of INR587m (est. of INR513m; 1% YoY, 31%
QoQ). PAT (before associate/minority interests) of INR290m (+15% YoY, 61%
QoQ) was higher than our estimate of INR214m due to a higher margin in the
rail segment and a lower tax rate.
Rail margin revives led by commissioning of Viramgam
n
Rail reported EBITDA of INR375m (est. of INR303m; +10% YoY, +49% QoQ),
led by 11.5% YoY growth in container volumes to 61,254 TEU. Rail volume
growth was driven by a market share gain of 180bp in the NCR region and
spillover of volumes from 1QFY18 (when volumes had declined 2% YoY).
n
Rail realization stood at INR33,430/TEU (+1% YoY, +2% QoQ). EBITDA/TEU
declined 1% YoY, but increased 24% QoQ due to normalization of operations
on the Ajmer route, resulting in better mobility. Additionally,
commencement of the Viramgam terminal since mid-July has led to haulage
savings for cargo transported to JNPT.
n
Gateway rail has increased tariff on import side from 21 October, which
should bode well for margins in 2HFY18. Additionally, with the ramp-up of
the Viramgam terminal in 2HFY18, margins are likely to be firm.
CFS witnesses stable profits
n
Consol. CFS EBITDA stood at INR212m (in-line; -12% YoY, +7% QoQ).
n
Consol. volume stood at 101,929 TEU (est. of 99,080; +1% YoY, 6% QoQ).
QoQ improvement was led by higher volumes from Krishnapatnam CFS.
n
Realizations stood at INR9,571/TEU (est. of 10,226; -7% YoY/QoQ), while
EBITDA/TEU was INR2,083 (est. of INR2,115; -13% YoY; +2% QoQ). YoY
contraction in margin is due to the impact of direct port delivery and higher
volumes from Krishnapatnam CFS.
Valuation view:
Our FY17-20E volume CAGR for the rail/CFS divisions stands at
~11%/8%. We value GDPL based on SOTP-based fair value of INR282/share,
implying a 19% upside, valuing the CFS business at 12x FY20E earnings, the 40%
stake in Snowman at 50% discount to market value, and the rail segment at 14x
FY20E EV/EBITDA. The stock trades at 16.9x FY20E EPS of INR14.0, adjusted for
the 50% stake of Blackstone in rail subsidiary. Maintain
Buy.
FY18E
11,967
3.2
2,314
19.3
1,522
296
19.5
955
26.7
8.0
(INR Million)
FY18 Var. vs
2QE est (%)
3,035
(0.4)
6.2
513
14.5
16.9
280
30.0
66
12.4
23.6
184
(0.5)
6.4
6.1
Quarterly Performance
Y/E March
FY17
FY18
FY17
(Consolidated)
1Q* 2Q* 3Q* 4Q*
1Q* 2Q* 3QE 4QE
Net Sales
2,782 2,857 2,876 3,077
2,661 3,023 3,089 3,194
11,592
YoY Change (%)
5.9 10.1
7.7 19.5
-4.4
5.8
7.4
3.8
10.7
EBITDA
555
581
587
523
450
587
621
656
2,246
Margins (%)
19.9 20.3 20.4 17.0
16.9 19.4 20.1 20.5
19.4
PBT
349
379
403
332
229
364
398
491
1,463
Tax
124
127
146
109
49
74
77
96
506
Rate (%)
35.6 33.6 36.2 32.8
21.5 20.4 19.4 19.5
34.6
Adj PAT
186
173
203
192
133
183
253
347
754
YoY Change (%)
-47.8 -43.5 -34.3 -27.5
-28.7
5.8 24.5 81.1
-31.2
Margins (%)
6.7
6.0
7.1
6.2
5.0
6.0
8.2 10.9
6.5
E: MOSL Estimates, *Indicates addition of Rail and CFS details as provided and not actual consolidated number
10 November 2017
23

September 2017 Results Preview | Sector: Healthcare
Alkem Labs
Bloomberg
Equity Shares (m)
M. Cap. (INR b)/(USD b)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
ALKEM IN
119.6
219 / 3
2238 / 1400
2 / -22 / -2
n
CMP: INR1,832
n
TP: INR1,830
(-0%)
Neutral
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)
24.2
5.2
21.6
25.3
4.5
19.2
19.6
3.8
14.8
16.9
3.2
11.6
58.5
10.0
9.0
75.7
7.5
23.4
21.3
63.7
10.9
8.7
72.5
-4.2
19.0
17.4
74.6
13.5
11.2
28.7
20.9
23.0
85.7
16.6
12.9
n
n
93.3 108.2
16.0
20.7
24.7
353.4 409.6 481.8 565.7
n
Key issues to watch out
We expect moderate revenue growth for Alkem due to the
impact of GST in the domestic market and the lack of big
approvals in the US. We expect domestic growth for Alkem to pick
up from 2Q FY18 due to channel re-filling.
EBITDA margin is expected to shrink marginally by 90bp YoY and
expand 1,070bp QoQ on the back of low base effect of 1QFY17
due to GST implementation, which led to de-stocking.
We expect adj. PAT to decline ~12% YoY, while tax rate is
expected to inch up to ~17% from mid-single-digit in FY17.
Growth in ALKEM's India business is expected to improve
gradually as the industry still unravels actual impact of GST on
inventory de-stocking.
We continue believing that Alkem is the best way to play the
domestic growth story (>70% of revenue and >85% of EBITDA
came from India in FY17). Having said that, at current valuations,
the stock provides limited room for upside. Our target price of
INR1,830 for Alkem is based on 20x FY19E PER.
Ø
Impact of demonetization.
Ø
Update on visibility of approval post EIR at Ankleshwar facility.
Ø
Pick-up in chronic business.
Quarterly Performance (Consolidated)
Y/E March
Net Revenues
YoY Change (%)
EBITDA
Margins (%)
Depreciation
Net Other Income
PBT before EO Exp
EO Exp/(Inc)
PBT
Tax
Rate (%)
PAT (pre Minority Interest)
Minority Interest
Reported PAT
YoY Change (%)
Adj Net Profit
YoY Change (%)
1Q
14,808
22.6
2,711
18.3
230
181
2,663
2,663
230
8.6
2,433
45
2,388
2,388
18.7
FY17
2Q
3Q
16,383
14,819
18.6
16.3
3,105
2,681
19.0
18.1
255
264
219
137
3,069
2,554
3,069
187
6.1
2,882
53
2,828
2,828
5.9
2,554
192
7.5
2,363
29
2,334
2,334
24.7
4Q
12,514
9.0
1,493
11.9
264
132
1,361
1,361
-9
-0.7
1,370
0
1,370
1,370
-27.0
1Q
12,952
-12.5
944
7.3
306
169
807
807
169
20.9
638
0
638
638
-73.3
FY18E
2QE
3QE
17,265
16,462
5.4
11.1
3,108
2,914
18.0
17.7
285
290
180
270
3,003
2,894
3,003
510
17.0
2,492
0
2,492
2,492
-11.9
2,894
492
17.0
2,402
0
2,402
2,402
2.9
FY17
4QE
17,222
37.6
4,145
24.1
403
214
3,956
3,956
603
15.3
3,353
0
3,353
3,353
144.8
58,525
15.9
9,989
17.1
1,012
669
9,646
0
9,646
600
6.2
9,047
0
9,047
0
9,047
22.1
(INR m)
FY18E
63,681
8.8
10,889
17.1
1,284
834
10,439
0
10,439
1,775
17.0
8,664
0
8,664
0
8,664
-4.2
10 November 2017
24

September 2017 Results Preview | Sector: Oil & Gas
BPCL
Bloomberg
Equity Shares (m)
M. Cap. (INR b)/(USD b)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
BPCL IN
1966.9
944 / 15
546 / 399
-10 / 8 / -1
CMP: INR480
n
n
n
n
n
n
n
TP: INR644 (+34%)
Buy
Financial snapshot (INR b)
Y/E March
2017 2018E 2019E 2020E
Sales
2012.5 2284.4 2459.4 2537.4
EBITDA
135.1 155.0 163.1 172.0
Adj. PAT
95.1
96.8 102.3 109.1
Adj. EPS (INR)
48.3
49.2
52.0
55.5
EPS Gr.%
97.8
19.7
7.6
12.7
BV/Sh.INR
RoE (%)
RoCE (%)
Payout (%)
Valuation
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yld (%)
156.7
32.4
16.2
52.4
9.9
3.1
9.2
4.5
189.0
28.5
15.1
34.3
9.8
2.5
8.2
3.0
223.1
25.2
14.0
34.6
9.2
2.2
7.7
3.2
261.1
22.9
13.5
31.4
8.7
1.8
7.3
3.1
We expect OMCs’ (IOCL, BPCL and HPCL) core earnings to increase
YoY/QoQ, led by strong GRMs and inventory gains in 2QFY18.
We model nil subsidy-sharing for OMCs; subsidy in 2QFY18 would
be entirely borne by the government.
We peg BPCL’s refinery throughput at 6.2mmt for 2QFY18 v/s
6.4mmt in 1QFY18 and 2QFY17.
We model GRM of USD8.5/bbl and inventory gains of INR20b for
BPCL in 2QFY18.
We expect BPCL to report adjusted EBITDA of INR35.8b (+107%
YoY, +83% QoQ) in 2QFY18.
We estimate PAT at INR39b (+200% YoY, +426% QoQ) for 2QFY18.
BPCL trades at 9.2x FY19E EPS of INR52 and 2.2x FY19E BV
(adjusted for investments), with ~5% dividend yield. Maintain Buy.
Key issues to watch for
Ø
(a) Inventory and forex change impact, (b) GRM, (c) Kochi refinery
expansion, and (d) update on Mozambique/Brazil E&P blocks.
Standalone - Quarterly Earning Model
Y/E March
1Q
469,387
-9.9
428,532
40,855
8.7
28,025
4,315
1,111
1,986
37,415
11,210
30.0
26,205
26,205
11.0
5.6
Net Sales
YoY Change (%)
Total Expenditure
EBITDA
Margins (%)
Adj. EBITDA*
Depreciation
Interest
Other Income
PBT
Tax
Rate (%)
Reported PAT
Adj PAT
YoY Change (%)
Margins (%)
Key Assumptions
Refining throughput (mmt)
6.2
6.4
Reported GRM (USD/bbl)
6.1
3.1
Marketing sales volume excld exports (mmt)
9.7
8.9
Marketing GM per litre (INR/litre)
4.8
3.3
E: MOSL Estimates; *Adj. for inventory gain/loss and one-offs
FY17
FY18
2Q
3Q
4Q
1Q
2QE
3QE
4QE
446,927 535,427 570,365 571,258 606,020 539,484 537,127 2,022,106 2,253,889
-3.4
15.1
31.0
21.7
35.6
0.8
-5.8
7.3
11.5
433,257 500,775 548,242 559,008 550,236 504,754 504,440 1,910,807 2,118,438
13,670 34,652 22,123 12,250 55,783 34,730 32,687 111,299 135,451
3.1
6.5
3.9
2.1
9.2
6.4
6.1
5.5
6.0
17,300 28,002 23,001 19,565 35,783 34,730 32,687
96,328 122,765
4,524
4,836
5,238
5,892
5,900
5,367
5,367
18,913
22,525
1,024
1,349
1,475
1,789
2,400
2,400
2,400
4,959
8,990
10,367
4,024
6,624
6,566
5,762
5,762
5,762
23,001
23,852
18,489 33,978 22,033 11,136 53,245 32,725 30,682 110,428 127,788
5,437
9,771
3,616
3,690 14,110
8,672
8,131
30,035
34,603
29.4
28.8
16.4
33.1
26.5
26.5
26.5
27.2
27.1
13,052 22,719 18,417
7,446 39,135 24,053 22,552
80,393
93,185
13,052 23,147 18,417
7,446 39,135 24,053 22,552
80,393
93,185
26.2
49.8
-13.0
-71.6
199.8
3.9
22.5
13.9
15.9
2.9
4.3
3.2
1.3
6.5
4.5
4.2
4.0
4.1
6.8
5.9
9.8
4.4
6.0
6.0
9.3
4.2
6.4
4.9
10.0
3.1
6.2
8.5
9.3
5.7
7.2
7.0
10.2
3.8
7.2
6.5
9.6
3.8
25.4
5.3
37.7
3.7
27.1
7.6
39.1
3.8
(INR Million)
FY17
FY18E
10 November 2017
25

September 2017 Results Preview | Sector: Financials
Bank of India
Bloomberg
Equity Shares (m)
M. Cap. (INR b)/(USD b)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
BOI IN
1055.4
147 / 2
197 / 100
-2 / -8 / 5
CMP: INR139
n
TP: INR141 (+1%)
Neutral
Financial Snapshot (INR b)
Y/E March
2017 2018E 2019E 2020E
NII
118.3 101.4 113.7 129.0
OP
97.3 62.9 70.5 80.8
NP
-15.6 -12.2
7.2 17.4
NIM (%)
2.1
1.8
1.8
1.9
EPS (INR)
-14.8 -11.2
6.6 16.1
EPS Gr. (%)
NM
NM
NM 143.4
ROE (%)
-6.7 -5.2
3.0
7.2
ROA (%)
-0.3 -0.2
0.1
0.2
BV/Sh. (INR)
224
216
218
229
ABV/Sh. (INR)
68
85
109
126
Div. Payout (%)
0.0
0.0
0.0
0.0
Valuations
P/E(X)
-9.4 -12.4 21.1
8.7
P/BV (X)
0.62 0.65 0.64 0.61
P/ABV (X)
2.06 1.65 1.27 1.11
n
n
n
n
Continued asset quality strain and capital conservation efforts
have led to multiple quarters of muted loan growth. We expect
2QFY18 loan growth to be 1% QoQ (+2% YoY). Deposit growth is
expected to come in strong at 9% YoY (+1% QoQ) owing to strong
CASA inflows over the last few quarters.
We expect NIM to stay flat QoQ at ~1.8%, weighed down by
interest income reversals. However, NIMs are expected to
contract ~20bp YoY with decline in yields. Overall NII is expected
to decline 5% YoY.
Contribution of non-interest income is likely to fall sharply from
previous quarters, given lower trading gains. Fee income is
expected to pick up marginally.
We expect stress additions to moderate, but remain high during
the quarter (slippage ratio ~4%), leading to elevated provisioning.
We expect operating profit to decline sharply by 37% YoY, led by
decline in both NII and other income. BOI trades at 0.6x FY19E BV
and 21.1x FY19E EPS.
Neutral.
Key issues to watch for
Ø
Stress addition trends and outlook for FY18.
Ø
Upgrade/recovery trends.
Ø
Outlook on balance sheet growth and further capital infusion.
Quarterly Performance
Interest Income
Interest Expense
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 (%)
Asset Quality
Gross NPA (INR b)
Gross NPA (%)
E: MOSL Estimates
1Q
94,259
66,508
27,752
-4.7
12,384
40,136
23,597
16,539
-3.0
27,702
-11,163
-3,750
-7,414
NM
2.0
-2.0
-5.2
77.8
518.7
13.4
FY17
2Q
94,585
67,387
27,197
-9.9
20,106
47,304
22,375
24,928
70.9
22,962
1,966
698
1,268
NM
2.0
-3.8
-4.8
76.8
522.6
13.5
3Q
4Q
98,248 1,05,817
69,621
71,131
28,626
34,686
5.7
8.8
17,693
17,540
46,319
52,226
21,734
20,951
24,584
31,275
74.5
113.6
23,026
47,362
1,559 -16,087
542
-5,632
1,017 -10,455
NM
NM
2.0
2.6
-5.4
71.3
517.8
13.4
2.5
5.3
2.0
72.9
520.4
13.2
1Q
94,957
69,626
25,330
-8.7
16,110
41,440
17,646
23,794
43.9
22,453
1,342
464
877
NM
1.8
9.2
0.0
71.9
510.2
13.1
FY18E
2QE
96,697
70,970
25,727
-5.4
13,779
39,506
23,701
15,805
-36.6
20,000
-4,195
-1,447
-2,748
-316.7
1.8
8.7
1.7
0.0
499.8
12.6
FY17
3QE
97,422
71,608
25,814
-9.8
12,954
38,769
23,615
15,154
-38.4
20,000
-4,846
-1,672
-3,174
-412.1
1.8
2.2
5.1
0.0
489.7
12.1
4QE
96,424
71,879
24,545
-29.2
12,366
36,912
28,734
8,178
-73.9
19,089
-10,911
-3,766
-7,145
NM
1.7
5.0
7.5
0.0
478.0
11.4
3,92,909
2,74,647
1,18,261
0.9
67,723
1,85,984
88,658
97,326
61.3
1,21,052
-23,726
-8,142
-15,584
NM
2.1
5.3
2.0
72.9
520.4
13.2
(INR m)
FY18E
3,85,501
2,84,084
1,01,417
-14.2
55,210
1,56,626
93,695
62,931
-35.3
81,542
-18,611
-6,421
-12,190
NM
2.1
5.0
7.5
71.9
478.0
11.4
10 November 2017
26

September 2017 Results Preview | Sector: Automobiles
Bosch
Bloomberg
Equity Shares (m)
M. Cap. (INR b)/(USD b)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
BOS IN
31.4
653 / 10
25245 / 18005
-6 / -15 / -21
CMP: INR20,781 TP: INR22,781 (+10%) Neutral
n
Net revenue is likely to grow 31% YoY (+29.2% QoQ) to INR34.2b,
led by higher realization of BS-4 parts and higher PV sales.
n
EBITDA margin is expected to expand by 53bp YoY, led by higher
revenue.
n
EBITDA is projected to grow 36% YoY to ~INR6.1b.
n
Adjusted PAT is likely to increase 19% YoY to INR4.4b on lower
other income and higher depreciation.
n
We cut FY18 and FY19 EPS by 1.2% and 1%, respectively.
n
The stock trades at 38.4x FY18E and 29.7x FY19E EPS; maintain
Neutral.
Financial Snapshot (INR b)
Y/E Mar
FY17 FY18E FY19E FY20E
Sales
EBITDA
NP
EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA(x)
EV/Sales (x)
43.9
7.2
31.5
5.9
38.4
6.5
23.7
4.5
29.7
5.7
18.5
3.9
25.3
5.1
15.5
3.4
104.4 129.2 146.8 168.3
19.6
14.4
-1.8
15.8
23.1
24.6
16.5
14.3
17.8
26.7
31.1
21.3
29.2
20.5
30.3
36.6
25.0
17.4
21.2
31.4
473.1 540.8 698.6 820.2
2,883 3,204 3,618 4,104
Key issues to watch
Ø
Implementation of BS-VI norms for 2-wheelers and underlying
opportunity for Bosch.
Ø
Advancement of BS-VI implementation and its impact on Bosch.
Ø
Capex plans for BS-VI norms.
Quarterly performance (S/A)
Y/E March (INR Million)
Net Sales
YoY Change (%)
RM Cost (% of sales)
Staff Cost (% of sales)
Other Expenses (% of sales)
EBITDA
Margins (%)
Depreciation
Interest
Other Income
PBT after EO Expense
Tax
Tax Rate (%)
Reported PAT
Adj PAT
YoY Change (%)
E: MOSL Estimates
1Q
25,418
10.5
51.3
12.8
17.3
4,734
18.6
860
13
1,566
5,428
1,679
30.9
3,749
3,749
-0.7
FY17
2Q
3Q
26,115
26,720
9.7
7.7
50.5
54.7
13.3
14.5
18.2
20.8
4,694
2,667
18.0
10.0
889
1,294
10
17
2,107
1,634
9,554
2,991
2,517
843
26.3
28.2
7,037
2,148
4,347
2,148
13.9
-23.5
4Q
25,746
2.8
47.6
11.0
14.1
7,037
27.3
1,492
232
1,310
6,624
2,219
33.5
4,405
4,405
-6.8
1Q
26,484
4.2
54.4
12.9
16.2
4,390
16.6
1,062
5
1,295
4,618
1,592
34.5
3,026
3,026
-19.3
FY18E
2QE
34,211
31.0
53.0
11.5
17.0
6,329
18.5
1,150
10
1,350
6,519
2,135
32.8
4,384
4,384
0.9
FY17
3QE
34,735
30.0
52.5
11.5
20.0
5,558
16.0
1,450
12
1,350
5,446
1,783
32.8
3,662
3,662
70.5
4QE
33,753
31.1
46.9
11.6
12.3
8,327
24.7
1,581
123
1,430
8,052
2,619
32.5
5,433
5,433
23.3
104,351
7.6
51.3
12.8
17.3
19,604
18.8
4,562
272
6,174
20,944
7,244
34.6
13,700
13,700
-9.4
FY18E
129,184
23.8
50.5
13.3
18.2
24,604
19.0
5,244
150
5,425
24,635
8,130
33.0
16,505
16,505
20.5
10 November 2017
27

September 2017 Results Preview | Sector: Automobiles
Mahindra & Mahindra
Bloomberg
Equity Shares (m)
M. Cap. (INR b)/(USD b)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
MM IN
621.1
808 / 12
1460 / 1142
-1 / -5 / -19
CMP: INR1,301 TP:INR1,585 (+22%)
Buy
Financial Snapshot (INR b)
Y/E March
2017 2018E 2019E 2020E
Sales
EBITDA
NP (incl. MVML)
Adj. EPS (INR) *
EPS Gr. (%)
Cons. EPS (INR)
BV/Share (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
Cons. P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
* incl. MVML
Quarterly Performance (incl MVML)
Y/E March
Total Volumes (nos)
Growth YoY (%)
Net Realization
Growth YoY (%)
Net Op. Income
Growth YoY (%)
RM Cost (% of sales)
Staff (% of sales)
Oth. Exp. (% of Sales)
Total Cost
EBITDA
EBITDA Margins (%)
Change (%)
Other income
Interest
Depreciation
PBT
Effective Tax Rate (%)
Reported PAT
Change (%)
Adj PAT
Change (%)
E: MOSL Estimates
20.8
23.9
3.0
15.7
1.0
19.9
18.7
2.7
13.7
1.5
16.9
15.9
2.5
11.6
1.5
14.7
14.2
2.2
8.4
1.5
437.9 496.4 567.8 639.0
47.7
37.4
62.5
12.1
54.3
14.2
13.3
22.7
54.8
39.2
65.5
4.8
69.5
13.5
12.6
37.9
63.5
46.0
76.9
17.4
81.7
14.3
13.3
32.6
73.3
53.0
88.5
15.1
91.9
14.8
13.9
28.2
432.4 473.7 525.0 587.3
n
Overall volumes were up 16.3% YoY (+8.4% QoQ), led by double-
digit growth in Tractor (+31.2%), UV (+11.3%) and CV (+34.9%)
volumes. 3W sales declined 11.7% YoY, restricting volume growth.
n
MM’s (including MVML) realization is expected to increase by
3.3% YoY (+1.6% QoQ), led by better product mix due to increase
in share of tractors. As a result, revenue is likely to increase 20.2%
YoY (+10.2% QoQ) to ~INR122.2b.
n
EBITDA margin is expected to remain flat YoY at 14.4%, while it is
expected to increase 130bp QoQ.
n
PAT is projected to increase 8.5% YoY to INR13.6b.
n
The stock trades at 19.9x FY18E and 16.9x FY19E EPS; Maintain
Buy.
Key issues to watch
Ø
Outlook for UV and tractor businesses for FY18.
Ø
Product pipeline for FY18 and FY19.
Ø
Update on smaller businesses like two-wheelers, commercial vehicles,
Ssangyong, etc.
1Q
196,125
14.1
536,631
-2.3
105,247
11.4
68.4
6.8
10.6
90,276
14,971
14.2
11.3
1,294
515
3,484
13,176
27.0
9,613
15.8
8,949
7.8
FY17
2Q
3Q
187,837 197,356
18.4
1.9
541,522 536,432
-2.4
-0.7
101,718 105,868
15.6
1.2
67.1
68.6
7.1
7.2
11.3
10.6
87,036
91,374
14,682
14,495
14.4
13.7
28.3
-0.1
6,879
921
464
591
3,701
3,753
17,397
11,236
28.0
28.7
12,529
8,011
28.8
-5.7
12,529
7,893
28.8
-7.1
4Q
188,301
3.4
563,572
0.9
106,121
4.3
68.4
6.4
13.5
93,754
12,368
11.7
-4.4
1Q
201,501
2.7
550,573
2.6
110,941
5.4
68.5
7.0
11.4
96,402
14,539
13.1
-2.9
2,940
673
3,782
11,790
25.9
8,737
26.3
8,043
17.0
1,282
499
3,783
11,538
33.4
7,683
-20.1
7,683
-14.2
FY18
2QE
3QE
218,437 218,850
16.3
10.9
559,618 548,966
3.3
2.3
122,241 120,141
20.2
13.5
68.1
67.9
6.7
7.0
10.8
11.0
104,698 103,191
17,543
16,950
14.4
14.1
19.5
16.9
6,125
950
525
550
4,000
4,250
19,143
13,100
29.0
29.0
13,591
9,301
8.5
16.1
13,591
9,301
8.5
17.8
4QE
214,293
13.8
574,070
1.9
123,019
15.9
68.5
6.7
12.5
108,851
14,169
11.5
14.6
3,386
613
4,762
12,179
29.1
8,639
-1.1
8,639
7.4
FY17
769,617
8.8
544,367
-0.9
418,954
7.7
FY18E
855,662
11.2
556,695
2.3
476,343
13.7
68.1
6.9
68.3
6.9
11.6
362,398
56,556
13.5
7.8
12,035
2,285
14,721
53,597
27.4
38,889
16.3
37,429
12.1
11.6
413,142
63,200
13.3
11.7
11,743
2,188
16,795
55,960
29.9
39,214
0.8
39,214
4.8
10 November 2017
28

September 2017 Results Preview | Consumer
Nestle India
Bloomberg
Equity Shares (m)
M. Cap. (INR b)/(USD b)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
NEST IN
96.4
700 / 11
7408 / 5701
4 / 4 / -5
CMP: INR7,257 TP: INR6,160 (-15%)
n
Neutral
Financial Snapshot (INR b)
Y/E December
2016 2017E 2018E 2019E
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 (%)
61.5
23.2
37.5
0.9
63.1
21.6
37.9
1.0
54.3
19.8
32.1
1.1
45.2
17.9
27.1
1.3
91.6
18.0
11.4
-1.6
39.0
38.8
53.4
95.6 106.9 125.3
17.7
11.1
-2.5
35.5
35.2
60.9
20.6
12.9
16.1
38.1
37.8
59.9
24.1
15.5
20.3
41.7
41.4
59.1
n
n
We expect Nestle India’s net sales to decline 0.2% YoY to
INR23.2b in 3QCY17. We have factored in GST related accounting
impact of 5.25% on sales (publicly stated management guidance)
and no impact on absolute EBITDA.
We expect EBITDA margin to contract by 100bp YoY to 19.8%.
EBITDA and PAT are projected to decline by 5% YoY (to INR4.6b)
and 7.5% YoY (to INR2.8b), respectively.
The stock trades at 54.3x CY18E EPS; maintain Neutral.
118.0 115.0 133.6 160.7
312.6 336.0 365.7 404.9
Key issues to watch for
Ø
Volume trends and management commentary on demand
environment.
Ø
Further recovery in sales and market share of Maggi.
Ø
Response to new product/variant launches.
Quarterly performance
Y/E December
1Q
22,770
Net Sales
YoY Change (%)
COGS
9,872
9,495
9,860
EBITDA
5,523
4,718
4,844
Margins (%)
24.3
21.1
20.8
YoY Growth (%)
69.5
Depreciation
891
889
883
Interest
259
220
220
Other income
421
524
547
PBT
4,793
4,132
4,289
Tax
1,722
1,288
1,269
Rate (%)
35.9
31.2
29.6
Adjusted PAT
3,071
2,844
3,020
YoY Change (%)
22.5
83.1
Note: Quarterly numbers are adjusted for Ind-AS changes
CY16
2Q
3Q
22,332
23,252
4Q
22,410
9,601
4,566
20.4
30.8
873
210
668
4,150
1,332
32.1
2,818
35.1
1Q
24,757
8.7
10,939
5,110
20.6
-7.5
867
228
578
4,593
1,468
32.0
3,126
1.8
CY17
2Q
23,865
6.9
10,791
4,430
18.6
-6.1
854
229
569
3,915
1,408
36.0
2,507
-11.8
CY16
3QE
23,194
-0.2
10,183
4,600
19.8
-5.0
838
220
629
4,171
1,376
33.0
2,795
-7.5
4QE
23,474
4.8
10,527
4,771
20.3
4.5
830
210
768
4,499
1,485
33.0
3,014
7.0
CY17E
91,593
95,647
12.8
4.4
38,797
42,001
17,958
17,684
19.6
18.5
12.6
-1.5
3,536
3,414
35
38
2,139
2,322
16,526
16,554
5,150
5,463
31.2
33.0
11,376
11,091
16.5
-2.5
E: MOSL Estimates
10 November 2017
29

September 2017 Results Preview | Sector: Oil & Gas
Oil India
Bloomberg
Equity Shares (m)
M. Cap. (INR b)/(USD b)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
OINL IN
801.5
280 / 4
367 / 258
14 / 0 / 1
CMP: INR349
n
n
TP: INR340 (-2%)
Buy
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 (%)
18.1
1.0
10.5
4.0
12.0
0.9
9.0
3.2
10.2
0.9
7.7
3.7
10.0
0.8
7.4
4.0
92.8
28.7
15.5
19.3
-32.8
362.9
5.7
6.4
88.8
97.2
33.3
23.3
29.1
50.8
378.4
7.9
6.1
46.9
105.2
37.7
27.3
34.1
17.0
396.5
8.8
6.7
46.9
107.5
38.0
27.9
34.8
2.2
415.0
8.6
6.5
46.9
n
n
We expect OINL to report adjusted PAT of INR5.4b (v/s INR4.5b in
1QFY18 and INR5.8b in 2QFY17).
We estimate EBITDA at INR7.6b (+1% YoY and -13% QoQ). We
estimate gross and net realization at USD50.3/bbl, with no subsidy
sharing burden.
Our Brent price assumption is USD53/bbl for FY18 and USD55/bbl
for FY19/20.
The stock trades at 10.2x FY19E EPS of INR34.1. Maintain Buy.
Key issues to watch for
Ø
DD&A charges.
Ø
Oil & gas production volumes.
Quarterly Performance
Y/E March
Net Sales
Change (%)
EBITDA
% of Net Sales
Change (%)
D,D&A
Interest
OI (incl. Oper. other inc)
PBT before exceptionals
Exceptional item
PBT after exceptionals
Tax
Rate (%)
PAT
Change (%)
Adj. EPS (INR)
Key Assumptions (USD/bbl)
Exchange rate (INR/USD)
Gas Price (USD/bbl)
Gross Oil Realization
Subsidy
Net Oil Realization
Subsidy (INR b)
1Q
22.2
-19.2
8.6
38.8
-20.4
2.3
1.0
2.4
7.7
0.0
7.7
2.8
36.2
4.9
-36.2
6.2
66.9
3.4
43.1
-
43.1
-
FY17
2Q
22.4
-6.5
7.5
33.3
-2.9
2.5
1.0
4.8
8.8
0.0
8.8
2.9
33.7
5.8
-14.0
7.2
67.0
3.4
44.6
-
44.6
-
3Q
23.8
7.1
6.6
28.0
7.1
2.8
1.0
3.2
6.1
0.0
6.1
1.5
25.1
4.5
18.8
5.7
67.4
2.8
49.2
-
49.2
-
4Q
24.4
28.3
5.9
24.4
0.2
3.3
1.0
8.7
10.4
11.5
-1.1
-1.3
-12.5
0.2
-95.9
14.6
67.2
2.8
52.5
-
52.5
-
1Q
23.3
5.0
8.7
37.5
1.3
2.9
1.0
1.5
6.4
0.0
6.4
1.9
29.4
4.5
-8.9
5.6
64.4
2.8
48.4
-
48.4
-
FY18
2QE
23.1
3.0
7.6
32.8
1.5
3.2
1.0
4.6
8.0
0.0
8.0
2.7
33.0
5.4
-7.2
6.7
64.1
2.8
50.3
-
50.3
-
FY17
3QE
24.0
1.0
7.3
30.5
10.2
3.5
1.0
5.6
8.4
0.0
8.4
2.8
33.0
5.6
24.3
7.0
64.5
3.2
53.8
-
53.8
-
4QE
25.5
4.6
8.2
32.3
38.5
3.9
1.0
7.2
10.5
0.0
10.5
3.5
33.0
7.1
3,558.4
8.8
65.0
3.2
53.8
-
53.8
-
(INR Billion)
FY18E
95.9
3.4
31.9
33.3
11.1
13.6
3.9
18.9
33.4
0.0
33.4
10.8
32.3
22.6
45.9
28.2
64.5
3.0
51.6
-
51.6
-
92.8
0.1
28.7
30.9
-6.5
10.9
4.0
19.2
33.0
11.5
21.5
6.0
18.1
15.5
-32.8
33.7
67.1
3.1
47.3
-
47.3
-
10 November 2017
30

September 2017 Results Preview | Sector: Financials
State Bank of India
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
753.5 766.1
OP
597.0 592.4
NP
-20.2 102.2
NIM (%)
2.8
2.5
EPS (INR)
0.3 14.6
EPS Gr. (%)
NM
NM
Cons. BV (INR)
211.3 227.5
Cons. ABV (INR) 126.9 149.9
RoE (%)
-1.2
5.6
RoA (%)
-0.1
0.3
Div. Payout (%)
NM 20.3
Valuations
Cons. P/E (x)
665.6 13.6
Cons. P/BV (x)
0.9
0.9
Cons P/ABV (x)
1.6
1.3
Div. Yield (%)
1.0
1.0
SBIN IN
8632.1
2170 / 33
315 / 231
-9 / -21 / -15
n
n
CMP: INR251
n
TP: INR341 (+36%)
Buy
2019E
890.1
635.5
198.6
2.7
26.8
83.8
248.9
181.1
9.9
0.5
20.1
7.4
0.8
1.1
1.8
2020E
1,014.
3
750.1
264.2
2.7
35.8
33.3
277.6
223.2
12.0
0.6
20.0
5.5
0.7
0.9
2.4
n
n
n
Key issues to watch for
Ø
Performance and guidance on asset quality.
For historical data, we have done the line-by-line consolidation for
the banking business with associate banks for comparison purpose.
Hence, YoY growth numbers will not be strictly comparable.
We expect loan growth to be muted as consolidation with
subsidiaries is expected to result in an overall muted quarter.
NII is expected to increase 6% QoQ on a low base as 1QFY18 was
affected by interest reversals. Decline in yields owing to MCLR
cuts and re-alignment of associate banks’ MCLR and lowering of
base rate will be offset by strong CASA accretion.
Stress additions should continue to be high, but moderate from
1QFY18 levels. Commentary on RBI resolution with respect to
large accounts is a key monitorable.
Non-interest income is expected to be strong driven by stake sale
in SBI Life (assumed INR48b gain). Fee income growth is expected
to grow 2% QoQ and cost pressure would remain high (+4% QoQ)
owing to consolidation.
We expect credit cost to remain elevated at ~2.7%, led by continued
stress additions and focus on shoring up PCR. The stock trades at
0.8x FY19E consolidated BV and 7.4x FY19E consolidated EPS.
Buy.
Ø
Outlook and update on ABs’ merger.
Quarterly performance
Y/E March
FY17
FY18E
FY17
FY18
1Q
2Q
3Q
4Q
1Q
2QE
3QE
4QE
Interest Income
5,44,930 5,47,781 5,56,614 5,89,690 5,49,054 5,66,008 5,86,005 6,17,699 22,39,015 23,18,767
Interest Expense
3,62,480 3,66,834 3,79,151 3,79,030 3,72,994 3,81,012 3,91,235 4,07,397 14,87,495 15,52,637
Net Interest Income
1,82,450 1,80,947 1,77,463 2,10,660 1,76,060 1,84,996 1,94,770 2,10,302 7,51,520 7,66,129
% Change (YoY)
3.9
0.4
1.2
10.5
-3.5
2.2
9.8
-0.2
1.9
Other Income
87,610 1,01,420 1,15,042 1,22,220
80,060 1,39,274 1,02,258 1,44,601 4,26,292 4,66,193
Net Income
2,70,060 2,82,367 2,92,505 3,32,880 2,56,120 3,24,270 2,97,028 3,54,904 11,77,812 12,32,322
Operating Expenses
1,32,450 1,42,531 1,48,486 1,59,780 1,37,376 1,43,258 1,63,011 1,96,254 5,85,150 6,39,899
Operating Profit
1,37,610 1,39,836 1,44,020 1,73,100 1,18,744 1,81,012 1,34,017 1,58,649 5,92,662 5,92,423
% Change (YoY)
17.7
9.3
19.5
1.0
-13.7
29.4
-6.9
-8.3
0.0
Other Provisions
1,30,370 1,45,785 1,18,902 2,09,320
89,300 1,42,300
98,300 1,22,537 6,09,844 4,52,437
Profit before Tax
7,240
-5,949
25,118 -36,220
29,444
38,712
35,717
36,112
-17,182 1,39,986
Tax Provisions
3,510
-348
6,906
-1,810
9,390
9,678
9,286
9,442
7,355
37,796
Net Profit
3,730
-5,600
18,212 -34,410
20,054
29,034
26,431
26,671
-24,537 1,02,189
% Change (YoY)
-91.8
-111.8
95.0
-359.6
437.6
-618.4
45.1
-177.5
-516.5
Gross NPA (INR B)
1,377
1,598
1,633
1,779
1,881
1,871
1,856
1,856
1,779
1,856
Gross NPA (%)
7.4
8.5
8.7
9.1
10.0
9.7
9.4
9.0
9.1
9.0
Note:
We have done the line by line consolidation of standalone bank with associate bank earnings. For 4QFY17, since associate banks
earnings were not reported it is our estimated numbers for based on FY17 reporting. Due to lack of information, intra-group transactions of
parent with associate banks are not factored in.
(INR m)
10 November 2017
31

September 2017 Results Preview | Sector: Media
Sun TV
Bloomberg
Equity Shares (m)
M. Cap. (INR b)/(USD b)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
SUNTV IN
394.1
308 / 5
950 / 435
-5 / -7 / 37
CMP: INR781
n
n
n
n
TP: INR860 (+10%)
Neutral
Financial Snapshot (INR Billion)
Y/E March
2017 2018E 2019E 2020E
Net Sales
EBITDA
Adj. Net Profit
Adj. EPS (INR)
Adj. EPS Gr. (%)
BV/Sh (INR)
RoE (%)
RoCE (%)
Div. Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
31.4
7.7
17.3
1.3
27.2
7.0
15.4
2.2
21.2
6.4
12.3
2.8
18.5
5.7
10.8
3.2
25.6
17.4
9.8
24.9
14.1
26.0
26.0
46.5
28.5
19.3
11.3
28.8
15.7
27.0
27.0
68.3
33.6
23.8
14.5
36.9
28.3
31.6
31.6
68.9
37.4
26.4
16.6
42.1
14.2
32.6
32.6
68.5
n
n
We expect Sun TV’s standalone revenue to grow 7% YoY to
INR6.7b.
Advertising and broadcasting revenue is expected to remain weak,
with 2% YoY growth to INR3.5b, impacted by GST.
We expect subscription revenue to grow 13% YoY to INR3b.
Sun TV’s standalone EBITDA is estimated to grow 6% YoY to
INR4.8b. EBITDA margin is expected to be 71.4% v/s 74.6% in the
year-ago period.
PAT is expected to grow 12% YoY to INR2.8b.
The stock trades at 27.2x FY18E and 21.2x FY19E EPS.
Neutral.
102.1 111.2 122.7 135.9
Key things to watch for
Ø
YoY ad growth (we expect 2% growth).
Ø
QoQ domestic subscription growth (we expect 13% growth).
Quarterly Performance (
Standalone
)
Y/E March
Net Sales
YoY Change (%)
Total Expenditure
EBITDA
Margins (%)
Depreciation
Interest
Other Income
PBT before EO expense
Extra-Ord expense
PBT
Tax
Rate (%)
Reported PAT
Adj PAT
YoY Change (%)
Margins (%)
E: MOSL Estimates
1Q
7,608
10.4
3,244
4,364
57.4
1,008
1
216
3,571
0
3,571
1,240
34.7
2,331
2,331
19.0
30.6
FY17
2Q
6,255
10.2
1,592
4,663
74.6
1,030
2
488
4,119
0
4,119
1,415
34.4
2,704
2,704
21.7
43.2
3Q
5,894
2.8
1,497
4,397
74.6
1,107
7
389
3,673
0
3,673
1,272
34.6
2,401
2,401
11.0
40.7
4Q
5,825
3.1
1,889
3,936
67.6
767
2
374
3,541
0
3,541
1,182
33.4
2,359
2,359
5.4
40.5
1Q
7,863
3.4
3,380
4,484
57.0
1,035
1
371
3,819
0
3,819
1,302
34.1
2,516
2,516
8.0
32.0
FY18
2QE
6,686
6.9
1,915
4,770
71.4
833
3
365
4,299
0
4,299
1,474
34.3
2,825
2,825
4.5
42.3
FY17
3QE
7,002
18.8
2,023
4,979
71.1
833
3
365
4,508
0
4,508
1,546
34.3
2,962
2,962
23.4
42.3
4QE
6,995
20.1
1,905
5,089
72.8
833
3
365
4,618
0
4,618
1,583
34.3
3,035
3,035
28.6
43.4
25,583
6.8
8,221
17,361
67.9
3,911
13
1,466
14,904
0
14,904
5,109
34.3
9,794
9,794
14.2
38.3
(INR m)
FY18E
28,546
11.6
9,223
19,322
67.7
3,533
10
1,465
17,244
0
17,244
5,905
34.2
11,339
11,339
15.8
39.7
10 November 2017
32

In conversation
1. PIDILITE INDUSTRIES: Expect ad expenses to normalise in two
quarters; Apurva Parekh, ED
n
n
n
n
n
n
Standalone volume growth of 12 percent for the quarter driven by 15 percent
volume and mixed growth in consumer and bazaar products but industrial
product volumes were flat.
Weakness in industrial product volumes because of impact on exports due to
timing difference on orders for some products. Secondly, due to higher raw
material prices, exporting some products became difficult. However, domestic
volumes were in line.
The other expenses in quarter were lower due to lower advertising and
promotional expenses. However, advertising is not uniformly divided through
the quarters. In some quarters it can even go up. Advertising expenses are
expected to normalise during the next two quarters. Ad spends is about 3.5-4
percent of sales.
Significant difference between primary and secondary sales because they work
on replenishment model basis.
Regarding whether the underlying demand situation has improved,
improvement in company sales could mean there has been improvement in
offtake but would be unable to quantify it.
Higher crude prices have led to higher prices of raw materials like vinyl acetate
monomer (VAM) and others, and that impacted gross margins for the company
in first half.
2. PETRONET LNG: taking steps to keep Kochi terminal in
operating profits; Prabhat Singh, MD & CEO
n
n
n
n
n
n
Has been the best quarter by far. Demand in the quarter for LNG was up and the
prices were low, so benefited because of that. Moreover, terminal also was
available to serve the demand.
Q2 has reported highest ever LNG processed by company. Dahej terminal
processed highest ever volume with capacity utilisation at 110 percent. Kochi
terminal is operating at 16 percent capacity.
Dahej did so well that it overshadowed Kochi, but if one were to look at Kochi
from the Q2 of last fiscal then it has done 150 percent higher.
Company is glad that the refinery of BPCL got commissioned. Expansion is on
and drawing around 2.2 million cubic meters a day. FACT has also been drawing
0.8 million cubic meters a day from Kochi terminal. Therefore, overall 16
percent of Kochi terminal utilisation is happening.
Kochi terminal earlier was making losses but is now making operational profits.
Going forward utilisation of Kochi terminal is likely to remain around 15-16
percent. With regards to Kochi, the company has let out one tank and is earning
rent on the same.
Had several meetings in Gujarat and have plans of running at least 20 buses on a
showcase basis to prove that LNG is a reality. Similarly, around 10 buses would
run in Kerala.
10 November 2017
33

3. SHREE CEMENT: See higher demand for cement in Q3; to do
volumes of 20mt in FY18; HM Bangur, MD
n
n
n
n
n
n
n
n
n
n
n
As far as cement is concerned the worst seems to be over for the industry - the
impact of demonetisation, GST etc is behind.
Expecting better results in Q3FY18 compared to that of Q3FY17 because of low
base effect.
Availability of sand a problem for the cement makers but now should be over
within few weeks and moreover, historically the demand for cement in Q3 is
maximum.
Growth to be in region of 8-9 percent instead of 12 percent, mainly because in
North India due to climatic conditions the demand may not be as robust as
expected.
However, company would be able to achieve sales volumes of 20 million tonnes
in FY18. Did 18 million tonnes last year.
Pressure on margins due to increase in transportation costs and freight costs.
The freight costs increased by approximately 17 percent YoY, about Rs 200 a
tonne.
Supreme Court has banned use of Petcoke and Furnace oil in Delhi-NCR region.
However, all those who follow the emission standards have no fear of using
Petcoke in other part of the states.
Emission norms are monitored online, so one can break them.
Power business is for company consumption. From overall turnover, 95 percent
is cement and 5 percent is power.
Although power was not performing well in first half, it has improved in Q3 but
one does not what will be the price of power next month because the prices are
very dynamic.
Company is always on lookout of acquisitions but nothing has been confirmed as
yet.
4. ASHOK LEYLAND: Expect export realisations to improve going
ahead; Gopal Mahadevan, CFO
n
n
n
n
n
Steel prices have been increasing very steadily over the last few quarters and in
this quarter have not been able to pass that on through a price hike.
Discounts in the industry continue to be extremely high. Have seen that the
industry seems to believe that customer acquisition has to be done through
heavy discounting which is not company’s strategy. That is one of the reasons
why company has been posting 10 quarters of double digit EBITDA margin out of
11 sequential quarters.
Improvement in realisation is only due to product mix.
Exports growth has been pretty healthy for company this quarter. Some part of
the export was not as profitable because company was selling BS-III vehicles in
export market. This quarter, the exports were predominantly into the Middle
East, Sri Lanka and Bangladesh. Exports into Africa was a tad lower than
expected because of some commercial reasons and expect that to be corrected
in Q3 and Q4.
Had taken 12-13 percent price hikes in the beginning of the year.
10 November 2017
34

5. MANAPPURAM FINANCE: Target 20% yoy growth; open for
inorganic opportunities; Kapil Krishan, CFO
n
n
n
Targeting 20 percent year-on-year (YoY) growth and on track for that.
Demonetisation was an unexpected one-off event. Despite that, expect to
maintain growth rates that company had projected on a consolidated basis.
Always on a lookout for inorganic opportunities. As and when the board sees
the right fit, definitely open for inorganic acquisitions.
10 November 2017
35

From the think tank
1. HOW TO FUND CLIMATE-SMART CITIES
n
According to UN-Habitat’s estimates, over 64 per cent of the world population is
expected to reside in cities by 2050. Cities consume enormous resources. The
Intergovernmental Panel on Climate Change estimates that urban infrastructure
accounts for two-third of the global energy use and 70 per cent of energy related
Green House Gas (GHG) emissions. By 2025 megacities of 10 million or more
people will house more than half the world’s population and contribute more
than half of global GDP. As India’s urban population grows from 410 million in
2014 to 814 million in 2050, with about 7 cities having more than 10 million
people, so will there be rise in energy consumption, degradation of forest areas
and agricultural land and disturbed ecosystems, problems of water supply and
solid waste management. This will be accentuated by growing risks of climate
vulnerability (frequent floods, cyclones, extreme temperature and heat waves)
disrupting city lives and affecting the poor who typically lack adequate resources
and safeguards to fight such stresses.
2. RETHINKING OPEN ACCESS IN ELECTRICITY
n
Recently, the Union ministry of power advised the Central Electricity Authority
(CEA) to set up a committee to look into issues related to open access and
brought out a consultation paper based on the committee’s findings. Open
access is one of the key measures to bring about competition in electricity,
whereby large consumers have access to the transmission and distribution
(T&D) network to obtain electricity from suppliers other than the local
distribution company (discom). Open access was expected to encourage
investment by private players in electricity supply. Unfortunately, the success of
open access has been very limited in spite of numerous attempts to facilitate it.
This initiative by the power ministry should be taken as an opportunity to
examine the basics of open access and re-conceptualize it, if necessary.
3. HOW INDIA CAN BECOME AGRARIAN POWER; TECHNOLOGY
TO THE RESCUE
n
Today’s India is very different from what it was, say, three years ago. Slowly but
steadily, we have embraced advancement in technologies, and it is heartening
to see the penetration of internet and smartphones in smaller towns and
villages of the country, empowering people to be connected to the world. At the
same time, it is encouraging to see the initiatives by the central government
that have brought unprecedented growth in several industries by promoting all-
round development, especially through technological and digital platforms.
Innovation has continuously been encouraged to bring revolution in telecom,
mobile and internet segments that have changed the way we communicate and
consume information today.
10 November 2017
36

International
4. BRAZIL IS BACK ON TRACK
n
Since I took office as the President of Brazil, I have put forward an agenda that
comprises the broadest set of structuring reforms for the past 30 years based
upon the pillars of fiscal balance, social responsibility and increase in
productivity. The economic recession in Brazil has been reversed and the
Brazilian economy has grown for the last two consecutive quarters. Inflation,
which was about 10% in May 2016, stands below the inflation target, recorded
at 2.54% in September. Purchasing power got better with a real increase of
more than 6% in wages. The basic interest rate for May that year was 14.25%,
and now stands at 7.5%, the lowest in four years. The decrease in the interest
rates alone has ensured an additional $25.5 billion to the public coffers.
10 November 2017
37

Click excel icon
for detailed
valuation guide
Rs
Valuation snapshot
P/E (x)
P/B (x)
ROE (%)
FY17 FY18E FY17 FY18E FY17 FY18E FY19E
26.2
25.3
24.2
55.0
44.6
18.4
50.3
49.1
35.7
24.9
21.3
25.1
45.7
33.0
22.2
59.1
29.8
35.2
25.7
27.6
23.8
32.2
20.4
18.8
34.7
NM
37.5
42.9
12.3
20.9
30.2
27.6
NM
20.7
40.5
13.7
NM
30.9
1,054.8
20.6
116.4
54.8
47.2
28.7
27.7
21.4
59.9
36.8
18.0
36.0
15.2
28.7
21.6
22.0
37.6
39.0
18.2
37.3
38.9
19.9
25.6
19.7
19.6
24.8
28.5
22.0
46.5
26.1
29.8
21.2
80.3
20.6
26.6
22.9
20.3
27.4
18.7
31.4
31.2
16.5
17.1
25.5
17.3
NM
24.1
9.6
10.9
7.5
22.5
21.5
NM
22.6
38.4
32.7
21.6
21.5
16.8
49.3
33.5
14.8
27.1
14.2
4.8
5.5
5.4
8.1
7.3
2.9
15.7
9.4
3.6
3.5
7.1
3.1
2.8
6.8
2.6
13.7
5.1
2.4
2.6
2.1
2.3
5.4
2.3
1.3
4.8
0.7
4.8
4.5
1.2
3.3
3.5
1.1
0.9
0.8
0.6
1.3
0.4
1.1
1.5
0.5
1.0
10.5
5.6
3.0
4.6
2.5
17.9
6.8
4.3
4.3
2.7
4.3
4.8
4.9
7.0
6.6
2.5
11.8
7.8
3.1
3.2
6.2
2.9
2.5
6.0
2.3
11.2
4.5
2.2
2.1
2.1
1.8
4.8
2.4
1.2
4.3
0.7
4.3
3.2
1.1
2.8
3.1
1.0
0.9
0.8
0.5
1.2
0.3
1.0
1.4
0.6
1.0
6.2
4.5
2.7
3.9
2.2
14.7
6.2
3.9
3.7
2.3
20.3
23.1
25.3
16.2
15.8
16.9
37.1
20.8
10.6
13.9
35.7
14.2
6.4
20.3
9.8
25.6
17.1
6.9
10.8
9.5
9.9
18.3
10.9
7.2
15.3
-27.0
13.8
12.3
9.0
18.9
11.5
4.0
-6.7
4.2
1.4
10.1
-8.4
3.6
-0.2
2.7
0.9
21.6
15.1
12.0
18.0
14.4
32.5
18.9
25.5
12.4
19.1
15.8
23.8
23.3
20.1
17.8
14.8
36.1
21.8
16.8
12.5
33.7
13.5
10.8
20.5
11.0
26.5
17.2
7.6
11.5
2.6
9.6
18.8
8.8
6.3
16.9
4.0
14.8
12.4
6.7
17.3
12.1
6.1
-5.2
3.4
5.8
11.6
4.6
4.7
7.0
-4.7
4.3
20.2
15.3
13.2
19.6
14.1
32.8
19.3
27.6
14.9
17.4
17.7
27.0
25.3
23.2
20.5
17.3
36.4
24.0
18.4
13.7
31.1
14.3
11.5
23.0
27.4
35.6
22.6
11.6
11.8
8.2
10.0
20.4
10.5
6.9
19.0
8.0
16.5
13.7
12.6
19.5
14.1
12.4
3.0
6.1
7.3
12.7
5.4
7.1
11.4
2.1
8.1
20.4
19.3
15.4
19.6
15.3
32.8
18.6
30.7
18.9
17.2
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
Sell
Buy
Neutral
Buy
Not Rated
Buy
Buy
Neutral
CMP
(INR)
735
115
3,200
719
21,103
1,713
30,820
1,152
712
202
3,604
1,362
245
8,202
440
695
TP
% Upside
EPS (INR)
(INR) Downside FY17 FY18E FY19E
854
145
3,753
844
22,781
2,029
36,487
1,229
688
254
3,819
1,585
-
9,466
562
764
16
26
17
17
8
18
18
7
-3
25
6
16
15
28
10
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
19.1
26.0
540.8 698.6
94.2 126.8
826.7 1,119.2
29.6
39.3
35.8
45.9
7.9
9.7
183.1 193.9
69.5
81.7
9.9
11.8
288.1 381.0
20.0
61.3
14.9
25.8
Neutral
Neutral
Buy
Buy
Buy
Buy
Neutral
Buy
Buy
Buy
Buy
Buy
Buy
541
180
139
115
1,826
312
56
1,670
77
1,005
510
31
305
470
197
209
146
2,150
355
56
2,000
100
1,179
665
36
382
-13
9
50
28
18
14
-1
20
29
17
30
17
25
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
13.6
2.8
60.9
4.1
32.1
16.4
1.9
17.8
29.9
10.5
5.7
6.6
84.7
17.0
3.2
78.6
8.7
41.6
23.0
3.8
23.3
Buy
Neutral
Neutral
Neutral
Buy
Neutral
Buy
Buy
Neutral
165
200
389
62
400
128
192
314
166
217
141
386
49
438
150
250
341
175
31
-30
-1
-20
9
17
30
9
5
6.0
-14.8
18.8
1.5
29.3
-31.6
6.2
0.3
8.1
9.5
-11.2
16.1
6.4
36.7
17.1
8.5
14.6
-13.5
20.8
6.6
30.3
8.6
44.0
21.4
13.5
26.8
6.0
Buy
Under Review
Buy
Buy
Buy
Neutral
Buy
Buy
Buy
Neutral
1,755
990
707
1,273
632
487
1,726
1,235
188
583
2,300
-
925
1,500
690
500
2,000
1,550
240
680
31
31
18
9
3
16
25
27
17
32.0
21.0
24.6
46.0
29.6
8.1
46.8
68.6
5.2
38.2
45.7
30.3
32.8
59.2
37.6
9.9
51.6
83.6
6.9
41.0
63.7
47.2
43.7
70.4
46.0
12.0
57.1
105.1
10.4
46.5
10 November 2017
38

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
Neutral
Buy
Buy
Buy
Buy
CMP
(INR)
99
421
490
1,394
569
2,127
1,264
TP
% Upside
(INR) Downside
-
481
14
550
12
1,750
26
800
41
2,650
25
1,415
12
FY17
8.6
7.1
29.5
31.6
29.1
84.3
55.6
EPS (INR)
FY18E FY19E
9.2
9.7
14.2
19.1
42.6
42.0
52.5
66.5
33.7
38.4
115.6 145.3
80.6 106.2
P/E (x)
P/B (x)
ROE (%)
FY17 FY18E FY17 FY18E FY17 FY18E FY19E
11.4
10.7 2.5
2.3
24.0 22.3 21.4
59.5
29.8 3.7
3.4
6.4
11.9 14.8
16.1
11.1
3.0
2.5
19.4 23.8 19.9
44.1
26.5 4.2
3.8
13.8 15.0 16.7
19.6
16.9 3.1
2.7
17.4 17.1 16.7
25.2
18.4 2.8
2.5
11.7 14.3 15.9
22.7
15.7 2.6
2.3
11.7 15.1 17.4
30.9
24.9 4.9
4.2
16.0 17.1 17.9
68.5
29.2
68.7
52.4
51.2
21.1
33.0
69.9
53.9
26.2
28.8
14.8
68.3
51.7
24.4
31.8
19.6
36.4
36.0
55.4
48.8
42.4
75.5
18.1
30.9
30.5
65.4
25.8
NM
420.9
47.1
45.5
39.2
56.9
64.6
48.9
48.0
47.2
51.7
38.0
63.8
31.0
30.8
49.9
66.6
26.0
31.4
40.9
46.2
42.7
34.5
42.5
44.7
21.8
26.1
11.5
56.2
44.0
17.6
32.5
16.8
32.1
31.2
39.0
33.7
29.5
48.1
17.4
23.1
25.9
46.8
26.0
26.9
41.9
37.2
42.7
32.7
55.4
55.8
44.4
44.9
47.1
46.2
36.9
54.9
28.6
37.7
48.2
8.7
6.0
1.0
8.5
27.9
1.3
6.5
9.9
9.8
5.0
3.4
1.5
6.4
9.5
-1.4
4.3
3.2
5.6
4.0
2.8
3.8
2.8
5.2
1.8
1.0
4.1
3.9
4.5
3.5
6.1
8.2
5.0
3.7
15.1
21.2
22.2
12.6
16.2
12.5
8.0
41.8
7.0
5.8
17.4
7.7
4.6
1.0
8.0
20.4
1.3
6.0
8.7
8.7
4.3
3.1
1.3
5.5
8.1
-1.5
4.0
2.8
5.0
3.7
2.7
3.6
2.6
4.7
1.7
1.0
3.6
3.6
3.9
3.1
5.4
6.8
4.5
3.4
14.7
17.5
21.1
10.8
13.8
9.8
7.8
41.6
6.9
5.9
15.2
12.7
20.6
1.5
18.0
76.4
6.2
21.2
12.4
18.2
19.2
12.5
10.2
9.3
19.8
NM
14.3
16.8
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
11.6
17.9
3.3
20.2
51.0
3.0
18.1
21.8
19.5
19.5
12.4
11.6
9.8
19.8
-8.8
12.7
17.7
16.5
11.7
7.0
11.1
9.2
10.3
10.0
4.4
14.8
8.0
16.0
12.3
13.7
20.0
11.1
10.3
26.9
34.3
48.7
26.0
31.7
23.8
21.4
75.9
24.4
15.5
33.6
14.6
18.1
3.3
27.8
49.6
3.7
22.2
22.6
21.2
20.2
13.8
12.6
13.8
20.9
-11.0
12.8
17.5
16.3
13.0
8.0
14.2
12.2
12.7
12.9
6.1
17.5
12.3
17.9
15.6
21.3
17.4
14.2
12.4
29.4
34.5
56.2
27.3
34.0
22.9
22.6
88.0
25.6
18.3
37.1
Sell
Buy
Sell
Neutral
Buy
Neutral
Buy
Neutral
Neutral
Neutral
Buy
Not Rated
Neutral
Neutral
Not Rated
Neutral
Buy
Sell
1,349
184
92
674
240
87
875
401
515
311
1,217
104
1,217
1,065
16
980
584
562
1,230
210
78
685
260
80
1,150
440
460
350
1,400
-
1,355
900
-
830
800
470
-9
14
-15
2
8
-8
31
10
-11
13
15
11
-15
-15
37
-16
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
20.2
7.1
2.9
16.5
5.2
2.0
25.3
9.4
11.5
14.3
46.5
9.1
21.7
24.2
0.9
30.1
34.8
17.5
28.7
8.0
3.0
24.4
6.5
2.5
35.0
11.2
14.3
17.6
56.6
11.2
33.4
30.0
1.0
33.4
39.9
19.5
Neutral
Neutral
Buy
Buy
Neutral
Neutral
Buy
Buy
Buy
Buy
Buy
Buy
Buy
271
1,761
1,210
2,926
1,227
174
1,027
455
704
169
115
18,095
4,369
314
1,797
1,150
3,517
1,276
198
1,196
505
853
205
128
21,852
4,906
16
2
-5
20
4
14
16
11
21
21
11
21
12
4.9
6.9
36.1 52.2
28.5 40.9
38.8 60.8
67.8 70.6
5.6
7.5
33.7 39.7
7.0
9.7
27.3 27.1
-1.6
6.3
0.3
2.7
384.4 486.2
96.1 102.2
8.4
70.9
58.9
83.7
101.2
10.8
54.4
16.4
35.1
9.1
5.0
499.3
147.1
Neutral
Buy
Buy
Buy
Buy
Neutral
Neutral
Buy
Neutral
Neutral
Neutral
1,195
4,759
1,039
348
1,252
977
5,936
1,253
260
346
314
1,280
5,165
1,328
395
1,435
1,015
5,400
1,440
280
365
340
7
9
28
14
15
4
-9
15
8
6
8
21.0 21.6
73.7 85.3
21.2 23.4
7.2
7.7
26.5 26.6
18.9 21.2
156.1 160.8
19.6 22.8
8.4
9.1
11.2
9.2
6.3
6.5
25.8
104.6
28.6
9.3
33.2
24.5
182.3
27.6
10.0
10.9
7.9
10 November 2017
39

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
Infrastructure
Ashoka Buildcon
IRB Infra
KNR Constructions
Sadbhav
Engineering
Aggregate
Logistics
Allcargo Logistics
Blue Dart
Concor
Gateway
Distriparks
Gati
Transport Corp.
Aggregate
Media
Dish TV
D B Corp
Den Net.
Ent.Network
Hind. Media
Reco
Neutral
Buy
Neutral
Neutral
Neutral
Not Rated
Buy
Neutral
CMP
(INR)
7,793
22,314
254
813
8,808
148
1,101
3,109
TP
% Upside
(INR) Downside
6,160
-21
21,310
-5
275
8
865
6
9,200
4
-
980
-11
2,970
-4
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
8.9
12.4
18.1
20.6
151.6 176.0
3.5
6.4
9.9
14.0
34.9
53.7
P/E (x)
FY17 FY18E
66.1
67.7
93.5
75.7
70.6
28.5
48.6
45.0
66.3
58.1
41.8
42.5
126.8 111.3
116.3 89.0
48.0
43.9
23.8
25.7
21.1
20.1
39.3
33.7
38.6
25.3
32.6
13.4
15.1
18.1
76.4
34.0
17.4
14.7
34.1
46.4
24.5
20.5
38.6
22.4
24.4
NM
11.4
22.1
28.6
20.5
23.8
26.8
23.0
17.6
65.7
27.3
29.1
31.2
39.1
63.7
15.6
16.4
59.4
33.0
14.6
22.1
31.7
30.8
19.0
35.5
31.2
24.7
28.2
123.8
10.1
20.7
21.9
17.3
17.0
30.9
31.3
28.0
7.5
13.4
26.1
74.9
16.9
NM
69.8
9.3
P/B (x)
ROE (%)
FY17 FY18E FY17 FY18E FY19E
24.9 23.2 39.0 35.5 38.1
37.4 30.0 40.0 39.6 43.1
3.3
2.9
6.0
10.8 13.3
12.6 10.3 28.2 25.2 23.5
41.5 34.5 39.3 64.9 62.8
2.1
2.0
5.2
4.9
8.5
12.5 11.4 10.2 10.7 13.6
23.3 16.2 21.3 18.2 20.9
13.2 12.3 27.5 28.1 29.3
5.1
5.5
6.8
4.9
5.0
7.0
3.9
5.0
3.2
1.4
3.7
3.3
11.1
2.8
2.9
2.8
5.8
5.7
2.6
3.5
7.8
4.8
4.1
2.5
1.5
4.1
3.2
2.3
2.4
17.4
3.7
2.5
1.9
2.6
3.8
16.5
4.2
2.0
4.5
1.5
4.4
4.7
5.5
3.9
4.7
5.9
3.5
5.2
3.1
1.3
3.1
2.3
13.1
2.6
2.5
2.6
5.4
4.8
2.3
3.3
6.4
4.3
3.7
2.3
1.4
3.5
2.9
2.0
2.2
13.2
3.5
2.4
1.7
2.2
3.5
13.5
3.5
2.2
4.2
1.3
23.0
23.4
36.7
27.6
12.3
23.0
10.2
22.0
9.7
11.3
24.7
21.1
14.5
8.6
18.0
20.9
17.1
14.4
10.8
18.1
22.2
23.8
16.9
-0.6
14.0
20.7
12.0
11.0
13.7
50.5
10.8
7.3
12.4
16.7
12.3
25.1
24.6
-19.1
6.7
18.2
19.9
19.0
26.4
24.8
7.2
23.5
12.1
16.3
8.2
2.1
19.6
17.7
22.0
8.2
18.4
12.0
17.1
17.0
12.9
9.6
22.5
18.3
13.2
1.9
14.1
18.4
13.8
11.7
13.4
48.6
11.5
8.8
19.4
17.8
13.5
19.9
22.8
-6.4
6.3
15.0
19.8
20.9
25.7
22.1
11.4
26.0
13.6
21.2
14.1
4.9
18.4
18.8
31.4
12.2
19.2
12.5
17.6
20.4
18.0
13.8
20.7
19.9
15.5
7.1
12.9
16.7
12.5
11.7
15.1
46.8
14.1
11.0
25.4
18.6
16.0
35.2
22.2
0.2
10.1
15.3
Neutral
Neutral
Buy
Buy
Neutral
Buy
Neutral
Neutral
Neutral
Buy
Neutral
Buy
Neutral
Neutral
Buy
Buy
Buy
Buy
Buy
Buy
Not Rated
Neutral
514
1,943
1,211
789
401
479
614
1,010
2,368
139
593
131
2,626
547
644
832
4,406
651
791
535
503
1,237
540
1,830
1,606
850
335
555
600
1,100
2,575
220
650
200
2,500
430
861
1,000
5,000
805
1,201
515
-
1,400
5
-6
33
8
-16
16
-2
9
9
58
10
53
-5
-21
34
20
13
24
52
-4
13
21.6 21.6
75.7 72.5
57.3 52.7
39.3 44.9
10.2
6.1
14.2 17.5
15.9 21.1
39.9 32.4
72.6 60.6
10.3
2.2
39.3 37.9
7.2
8.0
34.4 44.2
16.1 16.6
36.9 44.2
56.6 37.6
129.1 139.0
14.0 21.1
32.3 41.7
26.1 15.1
13.0 16.1
55.2 50.0
24.9
93.3
64.1
50.0
10.5
23.6
27.0
43.7
115.2
5.6
42.8
11.0
54.9
26.8
55.0
42.7
156.2
30.4
68.3
23.3
18.0
61.4
Buy
Neutral
Buy
Buy
224
232
264
313
260
240
295
385
16
3
12
23
-0.5
20.3
12.0
11.0
1.8
22.9
12.7
14.3
7.1
23.2
13.6
14.5
Buy
Not Rated
Neutral
Buy
Not Rated
Not Rated
174
4,020
1,337
236
119
283
213
-
1,496
277
-
-
22
12
17
9.8
10.3
102.5 129.9
38.0 42.7
6.8
8.4
16.9
8.4
15.9
21.0
12.9
163.2
55.2
11.0
23.9
25.9
17.8
39.2
35.2
34.7
14.2
16.7
30.9
74.1
18.3
NM
70.6
9.2
Buy
Buy
Neutral
Neutral
Buy
76
367
96
807
237
106
430
90
910
302
39
17
-6
13
27
1.0
20.0
-9.3
11.4
25.8
1.0
21.7
-2.9
11.6
25.6
2.4
25.4
0.1
20.1
30.2
10 November 2017
40

Company
HT Media
Jagran Prak.
Music Broadcast
PVR
Prime Focus
Siti Net.
Sun TV
Zee Ent.
Aggregate
Metals
Hindalco
Hind. Zinc
JSPL
JSW Steel
Nalco
NMDC
SAIL
Rain Industries
Vedanta
Tata Steel
Aggregate
Oil & Gas
BPCL
GAIL
Gujarat Gas
Gujarat St. Pet.
HPCL
IOC
IGL
MRPL
Oil India
ONGC
PLNG
Reliance Ind.
Aggregate
Retail
Jubilant Food
Titan Co.
Aggregate
Technology
Cyient
HCL Tech.
Hexaware
Infosys
KPIT Tech
L&T Infotech
Mindtree
Mphasis
NIIT Tech
Persistent Sys
Tata Elxsi
TCS
Tech Mah
Wipro
Zensar Tech
Reco
Neutral
Buy
Buy
Buy
Buy
Neutral
Neutral
Buy
CMP
(INR)
99
173
376
1,369
101
25
881
539
TP
% Upside
(INR) Downside
113
14
225
30
469
25
1,640
20
130
28
27
9
860
-2
630
17
FY17
7.4
10.7
6.4
20.5
1.2
-1.9
24.9
12.1
EPS (INR)
FY18E FY19E
10.4
11.9
12.2
13.4
9.0
14.2
27.1
43.0
3.0
5.9
-0.8
0.1
28.8
36.9
10.5
16.0
P/E (x)
P/B (x)
ROE (%)
FY17 FY18E FY17 FY18E FY17 FY18E FY19E
13.4
9.6
1.0
0.9
7.9
10.2 10.6
16.2
14.1 2.6
2.6
18.5 18.6 19.0
58.6
41.7 3.9
3.6
11.2
9.0
12.6
66.7
50.6 6.6
5.9
10.4 12.4 17.0
83.0
33.5 5.4
4.7
7.6
15.0 23.9
NM
NM
4.0
4.7 -29.4 -14.2
2.4
35.4
30.6 8.6
7.9
26.0 27.0 31.6
44.5
51.6 6.0
5.5
17.0 12.8 16.8
41.6
35.2 5.2
4.8
12.6 13.7 17.3
30.8
16.0
NM
17.8
23.9
12.6
NM
38.8
21.4
18.5
24.3
10.8
20.0
55.4
24.5
10.6
9.4
35.3
8.7
18.8
11.5
23.6
18.7
14.1
164.9
86.1
88.5
17.6
14.7
25.1
15.2
13.3
16.8
19.9
18.7
17.3
17.4
32.3
20.5
15.8
17.9
16.6
14.0
13.8
NM
13.0
19.9
9.6
NM
14.6
12.7
11.8
15.9
10.6
16.8
30.0
17.8
9.4
10.0
31.3
12.0
12.5
10.0
18.4
16.2
12.9
77.0
62.2
61.4
15.0
13.9
21.1
15.0
13.4
15.2
17.3
17.3
15.1
15.2
26.9
20.7
13.7
15.8
16.4
2.0
4.3
0.5
2.8
1.7
1.8
0.9
4.2
2.0
2.1
1.9
3.3
2.0
7.4
2.7
3.2
1.8
7.4
2.2
1.0
1.1
5.0
1.9
1.8
13.5
16.2
15.2
2.9
3.7
6.1
3.2
2.0
6.2
3.2
2.5
2.3
2.7
10.1
6.1
2.6
2.9
2.6
1.8
4.6
0.5
2.4
1.6
1.6
1.0
3.3
1.8
1.9
1.8
2.8
1.9
6.2
2.4
2.6
1.6
6.3
2.0
1.0
1.1
4.2
1.8
1.7
12.7
13.2
12.6
2.6
3.5
5.2
3.4
1.8
4.7
3.2
2.8
2.3
2.6
8.1
6.5
2.5
2.7
2.4
7.4
24.4
-7.9
17.3
7.2
12.8
-6.7
10.9
9.7
15.7
7.7
32.4
9.6
14.0
11.6
32.4
20.7
21.0
31.4
5.7
10.1
23.2
11.6
13.1
8.2
20.6
17.1
16.2
27.5
26.5
22.0
14.3
41.6
16.8
13.2
13.7
17.0
37.1
32.6
18.4
16.9
17.2
13.6
32.3
-5.5
19.8
8.3
15.5
-9.1
25.2
15.1
17.1
11.3
28.5
11.5
22.6
14.3
31.0
17.2
21.7
17.3
7.9
10.8
24.7
11.9
13.1
16.5
23.4
20.5
17.4
25.9
26.4
21.8
14.1
35.2
17.3
14.6
15.1
17.9
33.6
30.6
18.9
17.0
15.3
16.5
42.5
0.6
20.2
10.1
16.2
-5.3
29.7
23.8
16.6
15.5
25.2
12.5
27.3
14.1
24.2
16.9
20.4
16.5
8.8
12.5
25.4
12.3
13.5
20.9
25.5
23.9
18.3
25.6
23.4
22.5
14.5
29.6
20.4
17.3
16.4
20.8
32.4
33.5
18.2
16.7
18.4
Buy
Neutral
Buy
Buy
Neutral
Buy
Sell
Buy
Buy
Neutral
264
314
164
264
89
126
78
373
324
703
326
322
192
297
87
188
30
492
394
672
24
2
17
13
-2
49
-62
32
22
-4
8.6
19.7
-20.9
14.8
3.7
10.0
-6.2
9.6
15.1
37.9
18.8
22.7
-17.4
20.3
4.5
13.1
-7.7
25.5
25.5
59.4
26.4
33.5
2.0
24.9
5.8
12.9
-4.2
38.9
44.4
65.2
Buy
Sell
Sell
Neutral
Buy
Buy
Neutral
Sell
Buy
Buy
Buy
Buy
522
450
890
216
431
394
310
128
364
190
269
902
644
376
721
180
585
554
301
112
340
231
275
1,005
23
-17
-19
-16
36
41
-3
-13
-7
22
2
11
48.3
22.6
16.1
8.8
40.7
41.9
8.8
14.8
19.3
16.4
11.4
48.3
49.2
26.8
29.7
12.1
45.9
39.5
9.9
10.7
29.1
19.0
14.6
55.5
52.0
31.4
44.1
13.3
42.9
43.6
11.0
11.6
34.1
22.8
18.0
64.0
Sell
Buy
1,650
778
1,270
850
-23
9
10.0
9.0
21.4
12.5
27.4
15.9
Buy
Neutral
Neutral
Buy
Neutral
Buy
Neutral
Neutral
Neutral
Buy
Buy
Neutral
Buy
Neutral
Buy
539
877
344
955
159
933
494
727
659
657
909
2,734
489
303
863
600
970
270
1,100
160
950
480
670
600
780
1,004
2,450
560
280
1,020
11
11
-22
15
1
2
-3
-8
-9
19
10
-10
14
-7
18
30.6 36.0
59.8 63.2
13.7 16.3
62.8 63.8
11.9 11.9
55.5 61.6
24.9 28.5
38.9 42.0
38.0 43.7
37.7 43.3
28.1 33.8
133.4 131.8
30.9 35.8
16.9 19.1
52.1 52.8
41.9
68.2
17.0
67.8
14.1
66.0
33.6
46.0
50.3
52.4
40.2
151.4
37.7
20.1
72.7
10 November 2017
41

Company
Reco
Aggregate
Telecom
Bharti Airtel
Buy
Bharti Infratel
Neutral
Idea Cellular
Buy
Tata Comm
Buy
Aggregate
Utiltites
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)
TP
% Upside
EPS (INR)
(INR) Downside FY17 FY18E FY19E
P/E (x)
P/B (x)
ROE (%)
FY17 FY18E FY17 FY18E FY17 FY18E FY19E
17.9
17.7 4.1
4.3
22.9 24.4 23.2
44.5
28.8
NM
69.5
46.8
19.0
19.5
21.6
14.9
14.9
11.3
16.6
35.1
146.0
59.6
23.8
29.1
34.4
30.1
86.8
30.5
26.5
27.7
9.0
77.6
77.7
18.8
26.3
28.1
16.4
67.5
39.4
28.6
22.6
82.1
24.3
36.3
19.1
37.3
67.5
49.1
13.8
49.4
64.9
55.3
134.2 3.0
25.4 5.1
NM
1.4
127.7 12.4
-401.1 3.1
16.2
11.4
20.6
13.2
11.9
11.5
14.0
41.3
93.5
51.3
21.6
31.3
30.5
20.7
46.8
18.3
25.0
19.0
13.2
51.4
32.3
13.7
24.9
15.7
13.8
44.0
37.0
23.5
19.6
29.6
27.1
25.2
20.4
35.6
45.5
44.3
11.0
47.3
51.8
32.4
7.2
1.3
1.3
1.5
2.2
1.9
2.4
3.2
18.2
7.8
2.0
33.0
9.3
5.0
6.7
4.2
8.6
12.2
2.7
7.5
4.5
1.6
3.5
3.6
4.4
4.2
3.7
8.0
5.6
11.1
6.9
3.1
3.0
4.8
25.0
8.5
1.7
8.9
15.5
5.1
2.9
5.1
1.8
13.5
3.2
6.9
1.2
1.3
1.4
1.9
1.8
2.2
3.0
16.0
7.0
2.0
29.9
7.7
4.4
4.5
3.4
7.0
7.0
2.2
6.7
4.0
1.6
3.1
3.8
3.6
4.0
3.7
7.3
4.8
4.6
5.7
2.8
2.7
4.4
22.1
7.2
1.5
8.1
12.6
4.5
6.8
16.2
-1.6
48.4
6.6
37.8
6.5
6.3
10.5
15.6
17.1
14.4
10.3
17.9
2.2
20.2
-25.6
10.1
-0.8
42.4
10.6
6.3
11.0
17.0
16.0
15.7
7.4
18.2
3.7
22.8
-32.6
30.0
1.3
47.7
10.8
5.0
11.9
17.4
14.6
16.8
10.9
22.9
15.8
8.0
96.1
29.6
23.4
12.9
24.3
30.1
43.0
18.3
13.7
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
22.2
16.1
20.7
28.8
17.5
504
428
97
693
680
440
105
780
35
3
9
13
11.3
14.9
-1.1
10.0
3.8
16.8
-15.5
5.4
6.5
19.2
-14.9
18.2
283
1,013
83
178
208
84
335
1,360
51
211
261
72
18
34
-38
19
25
-14
14.9
51.9
3.8
12.0
14.0
7.4
17.5
88.9
4.0
13.5
17.4
7.3
20.7
99.3
3.3
15.7
20.4
7.5
435
1,120
805
977
395
299
500
265
2,061
341
1,197
117
1,216
259
104
459
536
305
428
979
2,463
165
821
812
2,638
1,638
271
1,596
1,905
91
6,526
232
387
425
873
-
1,100
467
323
523
257
3,334
358
1,291
118
1,300
240
-
465
738
394
534
1,300
3,295
209
1,040
890
3,266
1,751
298
1,288
2,300
114
5,281
167
393
-2
-22
13
18
8
5
-3
62
5
8
1
7
-7
1
38
29
25
33
34
26
27
10
24
7
10
-19
21
25
-19
-28
2
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
10.5
12.0
15.7
45.3
12.6
9.8
24.1
5.7
112.9
13.6
63.2
8.9
23.6
8.0
7.6
18.5
34.1
22.1
9.7
26.5
105.0
8.4
27.7
29.9
104.6
80.2
7.6
35.1
43.0
8.3
137.8
4.5
11.9
16.5
17.5
19.4
46.1
13.3
12.9
29.0
8.0
166.7
16.3
75.4
10.8
26.2
12.0
10.0
21.1
41.0
26.2
15.3
43.4
126.6
10.4
29.1
35.6
149.7
103.0
9.9
42.9
66.4
10.4
176.1
6.0
16.0
13.9 14.4
8.3
9.3
115.0 100.3
31.1 27.7
17.5 22.5
8.1
12.1
15.1 20.7
37.7 30.8
51.0 46.8
34.8 18.6
10.2 13.7
5.9
12.5
8.6
11.7
14.8 13.4
13.6 23.3
29.8 28.6
7.3
8.2
10.2 10.0
31.5 32.5
26.7 26.3
19.0 21.9
32.8 23.0
9.0
11.7
16.6 13.7
13.7 12.9
43.3 51.6
19.2 17.6
13.0 14.5
19.5 18.0
27.4 26.9
9.5
14.8
10 November 2017
42

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
1 Day (%)
7.6
-3.2
0.3
-1.3
1.5
0.5
-1.0
0.1
1.4
1.9
-0.8
-0.4
0.2
-0.3
0.4
0.0
-0.8
3.4
1.7
1.4
0.0
1.9
0.5
0.2
-1.1
-0.6
0.3
2.0
0.3
1.8
3.0
-0.1
0.2
8.2
0.7
1.5
1.3
2.3
-1.1
-0.3
1.9
0.5
1.4
2.6
-1.2
3.4
-1.3
-0.4
3.5
2.0
3.6
0.4
1M (%)
7.2
-7.0
2.3
11.9
-0.7
-1.9
-3.1
6.3
2.7
-0.6
-2.3
4.3
4.6
3.9
3.4
2.8
7.0
-3.4
-9.9
-2.1
1.8
14.6
-5.2
-1.8
6.1
-4.3
-1.5
-4.2
-17.9
16.8
43.7
23.7
17.2
48.0
7.0
40.2
22.3
26.8
-9.3
1.8
-6.4
13.9
16.1
-7.9
-1.4
-2.9
-4.4
-12.5
-5.3
-0.3
0.7
-7.4
12M (%)
-26.1
26.3
15.0
63.8
-0.8
28.1
31.7
82.2
113.7
6.4
11.4
1.8
30.7
52.0
-17.6
83.1
10.8
51.6
-16.6
50.3
45.9
21.7
-21.7
39.2
22.5
22.0
35.2
50.7
25.0
9.4
82.0
33.3
-10.3
76.0
11.4
34.9
20.8
29.4
89.1
28.7
12.5
19.1
124.9
55.8
27.9
71.0
87.4
10.8
0.6
27.6
36.6
51.4
Company
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
1 Day (%)
3.0
2.2
0.9
4.6
0.5
-0.7
-1.7
2.4
-0.8
-0.1
3.2
-0.8
1.1
0.3
1.0
-0.6
1.2
-1.2
-1.3
0.7
-1.6
-2.0
-0.7
0.4
3.6
0.3
0.2
1.4
-2.9
-0.1
2.1
2.6
1.7
3.2
0.4
1.4
5.1
1.3
-2.0
-0.7
1.3
-0.4
8.4
-1.3
6.0
-0.4
0.0
-3.2
1.8
0.2
1.3
1.8
0.3
1M (%)
11.0
6.4
-12.7
10.4
8.3
-3.9
4.5
1.8
2.8
6.6
2.2
-0.2
7.1
1.6
6.3
-1.4
8.0
-3.2
1.9
28.9
7.0
6.3
-4.5
5.6
14.9
0.5
7.9
5.7
-2.5
10.2
3.1
9.6
-4.7
9.8
12.8
-0.2
18.8
2.7
-2.9
-13.9
0.0
6.9
18.6
-0.6
1.2
2.1
10.5
30.7
32.4
2.3
3.8
3.7
8.1
12M (%)
55.2
-0.6
25.3
46.1
5.7
6.4
23.8
37.1
145.9
31.2
-38.8
12.2
55.6
8.8
15.5
17.9
65.9
16.9
21.1
59.3
47.4
63.7
18.7
16.6
3.0
16.1
4.5
18.6
11.3
15.5
13.9
52.2
7.1
16.8
8.1
31.6
3.8
51.5
4.6
-4.0
19.1
21.8
38.8
-17.1
20.2
30.7
32.3
23.9
54.1
-20.3
17.7
-36.2
3.9
10 November 2017
43

PFC
Repco Home
REC
STF
Shriram City Union
Capital Goods
ABB
0.3
-1.1
-1.1
-0.7
-1.2
2.5
11.9
-11.6
7.9
18.5
3.2
-1.3
18.7
-15.2
27.7
28.2
-6.8
27.7
Biocon
Cadila
Cipla
Divis Lab
Dr Reddy’s
Fortis Health
Glenmark
-0.5
-3.7
-1.1
-0.5
0.9
0.5
-0.8
16.5
-3.5
4.9
14.9
-1.7
-8.6
-2.9
35.7
24.9
16.3
-19.5
-27.6
-17.0
-34.2
10 November 2017
44

MOSL Universe stock performance
Company
Granules
GSK Pharma
IPCA Labs
Jubilant Life
Lupin
Sanofi India
Shilpa Medicare
Strides Shasun
Sun Pharma
Syngene Intl
Torrent Pharma
Infrastructure
Ashoka Buildcon
IRB Infra.Devl.
KNR Construct.
Sadbhav Engg.
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
Rain Industries
SAIL
Vedanta
Tata Steel
Oil & Gas
BPCL
GAIL
Gujarat Gas
Gujarat St. Pet.
HPCL
IOC
IGL
1 Day (%)
-2.8
0.4
-0.2
0.7
-1.2
-0.8
0.1
1.9
-0.5
0.5
-0.4
-2.9
-2.1
-0.2
-0.8
0.0
-1.2
0.1
-3.1
-0.1
0.6
0.7
-1.6
4.1
-0.2
-1.7
0.9
-0.1
-0.8
-0.7
1.7
-0.8
1.1
-0.3
0.3
0.4
4.0
0.8
2.3
-1.1
9.8
1.7
0.5
1.7
0.5
-1.6
-0.7
4.6
-0.9
-0.7
-1.1
1M (%)
3.7
9.2
4.1
-4.7
-20.0
8.8
0.2
-6.8
0.9
3.1
-1.6
15.3
10.8
26.2
9.9
3.9
-2.1
0.8
-1.4
3.5
7.5
6.7
-3.3
10.6
-1.8
-4.4
2.2
-4.2
-5.1
-1.3
11.3
-1.8
10.9
2.6
5.6
-0.8
4.0
2.5
10.8
3.9
99.3
37.7
0.0
0.9
8.1
1.1
0.8
10.4
-1.9
-4.8
7.5
12M (%)
21.6
-1.2
-6.4
2.0
-45.6
5.4
11.1
-26.4
-19.1
-8.6
-8.4
43.9
9.4
94.1
12.4
-5.7
-20.5
23.5
-5.4
-7.2
52.7
-12.8
-2.5
33.4
10.7
-16.9
23.4
-7.5
11.4
38.0
-29.3
74.3
6.8
62.3
35.5
134.0
57.0
73.5
1.2
653.5
57.2
48.9
75.9
21.4
34.9
60.5
42.4
43.7
24.7
82.0
Company
Titan Co.
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
1 Day (%)
4.3
1.9
-0.1
2.1
0.3
0.6
6.8
0.2
-1.4
2.5
1.6
2.1
0.1
0.1
0.3
1.1
1.8
-1.2
-1.9
2.4
-1.7
2.2
1.8
0.9
-0.5
0.6
5.3
1.7
3.9
-0.2
0.3
1.3
-0.5
0.3
-1.4
0.1
1.3
6.7
1.6
3.1
2.7
-0.6
-0.2
-3.0
0.0
0.0
0.4
-3.5
0.3
-0.3
2.6
-1.3
1M (%)
25.9
3.7
-2.7
29.4
3.4
20.7
16.9
3.7
19.0
16.2
1.2
5.2
11.5
5.6
5.6
16.7
32.8
7.3
30.2
0.5
0.6
-3.6
8.9
2.0
3.3
2.7
13.8
0.2
6.0
-0.7
9.6
18.8
9.7
20.9
-2.6
0.1
8.8
8.6
15.9
15.1
4.6
11.1
1.3
38.5
-8.5
-8.9
2.1
-0.3
9.0
-4.8
-0.8
-6.1
12M (%)
123.3
18.6
11.9
76.2
-0.1
21.5
48.5
14.1
40.9
63.1
0.2
52.8
25.9
12.6
35.3
-9.8
67.4
17.5
33.6
14.8
-10.9
73.3
40.2
15.3
15.3
16.7
12.6
77.6
-8.6
41.7
97.3
104.0
-35.2
40.3
27.2
-24.7
34.1
2.5
6.8
21.4
37.6
3.2
23.5
-23.7
7.1
65.0
-5.2
61.5
43.6
-3.8
10 November 2017
45

MRPL
Oil India
ONGC
PLNG
Reliance Ind.
Retail
Jubilant Food
0.5
0.3
-1.3
3.2
1.5
2.2
1.4
5.6
10.9
11.2
8.5
10.1
47.3
20.3
5.3
46.6
79.3
77.1
S H Kelkar
Symphony
Team Lease Serv.
Trident
TTK Prestige
V-Guard
Wonderla
0.4
3.8
4.0
-0.2
-0.7
5.8
-0.3
1.0
21.0
17.6
-11.3
8.8
22.4
4.5
-9.2
25.1
90.7
64.5
13.5
60.1
3.2
10 November 2017
46

THEMATIC/STRATEGY RESEARCH GALLERY

REPORT GALLERY
RECENT INITIATING COVERAGE REPORTS
Rs

DIFFERENTIATED PRODUCT GALLERY

Disclosures:
The following Disclosures are being made in compliance with the SEBI Research Analyst Regulations 2014 (herein after referred to as the Regulations).
Motilal Oswal Securities Ltd. (MOSL) is a SEBI Registered Research Analyst having registration no. INH000000412. MOSL, the Research Entity (RE) as defined in the Regulations, is engaged in the business of providing Stock
broking services, Investment Advisory Services, Depository participant services & distribution of various financial products. MOSL is a subsidiary company of Motilal Oswal Financial Service Ltd. (MOFSL). MOFSL is a listed
public company, the details in respect of which are available on
www.motilaloswal.com.
MOSL is registered with the Securities & Exchange Board of India (SEBI) and is a registered Trading Member with National Stock
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(CDSL) & National Securities Depository Limited (NSDL) and is member of Association of Mutual Funds of India (AMFI) for distribution of financial products. Details of associate entities of Motilal Oswal Securities Limited are
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Pending Regulatory Enquiries against Motilal Oswal Securities Limited by SEBI:
SEBI pursuant to a complaint from client Shri C.R. Mohanraj alleging unauthorized trading, issued a letter dated 29th April 2014 to MOSL notifying appointment of an Adjudicating Officer as per SEBI regulations to hold
inquiry and adjudge violation of SEBI Regulations; MOSL requested SEBI to provide all documents, records, investigation report relied upon by SEBI which were referred in Show Cause Notice and also sought personal
hearing. The matter is currently pending.
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the subject company at the end of the month immediately preceding the date of publication of the Research Report.
MOSL and its associate company(ies), their directors and Research Analyst and their relatives may; (a) from
time to time, have a long or short position in, act as principal in, and buy or sell the securities or derivatives thereof of companies mentioned herein. (b) be engaged in any other transaction involving such securities and earn
brokerage or other compensation or act as a market maker in the financial instruments of the company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies) or may have any other potential
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recommendations made by the analyst(s) are completely independent of the views of the associates of MOSL even though there might exist an inherent conflict of interest in some of the stocks mentioned in the research
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Research Analyst may have served as director/officer, etc. in the subject company in the last 12 month period. MOSL and/or its associates may have received any compensation from the subject company in the past
12 months.
In the last 12 months period ending on the last day of the month immediately preceding the date of publication of this research report, MOSL or any of its associates may have:
managed or co-managed public offering of securities from subject company of this research report,
received compensation for investment banking or merchant banking or brokerage services from subject company of this research report,
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Subject Company may have been a client of MOSL or its associates during twelve months preceding the date of distribution of the research report.
MOSL and it’s associates have not received any compensation or other benefits from the subject company or third party in connection with the research report. To enhance transparency, MOSL has incorporated a Disclosure
of Interest Statement in this document. This should, however, not be treated as endorsement of the views expressed in the report. MOSL and / or its affiliates do and seek to do business including investment banking with
companies covered in its research reports. As a result, the recipients of this report should be aware that MOSL may have a potential conflict of interest that may affect the objectivity of this report. Compensation of Research
Analysts is not based on any specific merchant banking, investment banking or brokerage service transactions.
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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 of MOSL. The report is based on the facts, figures and information that are considered
true, correct, reliable and accurate. The intent of this report is not recommendatory in nature. The information is obtained from publicly available media or other sources believed to be reliable. Such information has not
been independently verified and no guaranty, representation of warranty, express or implied, is made as to its accuracy, completeness or correctness. All such information and opinions are subject to change without notice.
The report is prepared solely for informational purpose and does not constitute an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments for the clients. Though
disseminated to all the customers simultaneously, not all customers may receive this report at the same time. MOSL will not treat recipients as customers by virtue of their receiving this report.
Analyst Certification
The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the research analyst(s) was, is, or will be directly or
indirectly related to the specific recommendations and views expressed by research analyst(s) in this report.
Disclosure of Interest Statement
Analyst ownership of the stock
Companies where there is interest
No
A graph of daily closing prices of securities is available at
www.nseindia.com, www.bseindia.com.
Research Analyst views on Subject Company may vary based on Fundamental research and Technical Research. Proprietary
trading desk of MOSL or its associates maintains arm’s length distance with Research Team as all the activities are segregated from MOSL research activity and therefore it can have an independent view with regards to
subject company for which Research Team have expressed their views.
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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
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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
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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.
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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:
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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
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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
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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
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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
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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
13 December 2016
33