8th annual global investor conference · 2014-06-16 · august 27 - 31, 2012 2 8th annual global...

8th Annual Global Investor Conference

ACC ..................................................................................... 22

AIA Engineering ............................................................... 180

Ambuja Cements ............................................................... 24

Ashok Leyland ................................................................... 26

Au Financiers .................................................................. 180

Axis Bank ........................................................................... 28

Bajaj Auto .......................................................................... 30

Bajaj Electricals .............................................................. 181

Bajaj Finance .................................................................. 172

Bajaj FinSer ..................................................................... 173

Bharat Petroleum Corporation ......................................... 32

Bharti Airtel ....................................................................... 34

Cairn India ........................................................................ 36

CESC ................................................................................... 38

Container Corporation of India ..................................... 174

DB Corp .............................................................................. 40

Dewan Housing Finance ................................................... 42

Dish TV ............................................................................... 44

DLF ..................................................................................... 46

Emami ................................................................................ 48

Fort Point Automotive ..................................................... 181

GAIL India .......................................................................... 50

GlaxoSmithKline Pharmaceuticals .................................. 52

Glenmark Pharmaceuticals .............................................. 54

Godrej Consumer Products ............................................... 56

Grasim Industries ............................................................. 58

HDFC .................................................................................. 60

HDFC Bank ......................................................................... 62

Hero MotorCorp ................................................................ 64

Hindalco Industries .......................................................... 66

Hindustan Unilever ........................................................... 68

HPCL ................................................................................... 70

HT Media ........................................................................... 72

ICICI Bank .......................................................................... 74

ICRA .................................................................................. 175

Idea Cellular ..................................................................... 76

IDFC .................................................................................... 78

Indusind Bank ................................................................... 80

Info Edge (India) ................................................................ 82

Infosys ............................................................................... 84

ING Vysya Bank ................................................................. 86

IPCA Laboratories ............................................................. 88

ITC ...................................................................................... 90

Jindal Steel & Power ......................................................... 92

JP Associates ..................................................................... 94

Participating Companies

JSW Energy ........................................................................ 96

JSW Steel ........................................................................... 98

Kotak Mahindra Bank ..................................................... 100

Larsen & Toubro .............................................................. 102

LIC Housing Finance ....................................................... 104

Lupin ................................................................................ 106

Mahindra & Mahindra ................................................... 108

Mahindra Finance .......................................................... 110

Manappuram Finance .................................................... 176

Marico ............................................................................. 112

Maruti Suzuki .................................................................. 114

McLeod Russel ................................................................ 116

MCX .................................................................................. 118

Motherson Sumi Systems ................................................ 120

Muthoot Finance ............................................................. 177

NTPC ................................................................................. 122

Oil India .......................................................................... 124

ONGC ............................................................................... 126

Phoenix Mills .................................................................. 128

Pidilite Industries ........................................................... 130

Power Grid ...................................................................... 132

Radico Khaitan ................................................................ 178

Raymonds ........................................................................ 179

Reliance Communications .............................................. 134

Reliance Industries ......................................................... 136

Reliance Infrastructure ................................................... 138

Rural Electric Corporation ............................................. 140

Shoppers Stop ................................................................. 142

Shriram Transport Finance ............................................ 144

Sidhivinayak Logistics .................................................... 182

Simplex Infrastructure .................................................... 146

State Bank of India .......................................................... 148

Sun Pharmaceuticals ...................................................... 150

Tata Consultancy Services .............................................. 152

Tata Motors ..................................................................... 154

Tata Steel ......................................................................... 156

Titan Industries ............................................................... 158

Ultratech Cement ............................................................. 160

Union Bank of India ........................................................ 162

Unitech Automobile ........................................................ 182

Voltas ............................................................................... 164

Wipro ............................................................................... 166

Yes Bank ........................................................................... 168

Zee Entertainment Enterprises ........................................ 170

Company Page Company Page

2August 27 - 31, 2012

1August 27 - 31, 2012


Dear Guest,

We at Motilal Oswal are pleased to welcome you to the 8th Annual Global Investor Conference

from August 27-29, 2012 in Mumbai.

The last 12 months have been eventful ... as always! Even as the world is finding it tough to put

growth back on track, India has its own set of challenges. Growth parameters are hitting new

lows; RBI has paused monetary easing on fears of inflation, and the much-awaited government

policy remains in limbo. All of this took a toll on the rupee, down 20% over the last one year.

Despite these headwinds, Indian equity market is among the top performers of 2012, as foreign

investors pumped in another USD11b into equities, CY12 YTD. On corporate earnings, June

quarter PAT grew just 11%%, and expectations for full year remain muted (FY13 Sensex EPS to

grow 8%). But amidst "going nowhere markets", several stocks are at their life-time highs,

indicating the strength of bottom-up investing. Unlevered balance sheets seem to be the flavor

of this cycle, thanks to persistently high interest rates. Indian equity valuations are at long-

term averages, but resumption of growth cycle will remain a key trigger for a fresh upmove.

Re-shaping India! We believe the theme remains very relevant for this year too, and for quite

some time to come! Indian politics is re-shaping – not only are regional parties rising, we now

even have civil society entering the fray. Indian business is re-shaping – a no-frills airline is

today number one! Indian entertainment is re-shaping (a telly storyteller is scripting box office

successes), and so is Indian sports (a mother of two from east India wins an Olympics medal!)

And Indian scientists are planning Mission Mars! We dedicate our 2012 Conference to this

re-shaping – slowly, silently, but surely, and sometimes dramatically!

Over the next 3 days, 100 leading Indian companies will stand testimony to this re-shaping.

Our conference key highlight, CEO Track, will have 10 top-notch CEOs present their success

story, their growth opportunities, and their vision. We have several thematic presentations by

eminent speakers covering a range of issues — from political colors to grassroot education

and even power of nutrition! We have two intriguing panel discussions: (1) Navigating through

business cycles, and (2) 25 years of Wealth Creation.

As a special thematic session, we have scheduled 2 women who have had a decade of

extraordinary achievements and have done India proud in the last 12 months.

2012 also marks the Silver Jubilee for Motilal Oswal. To celebrate this, and also commemorate

100 years of Indian cinema, we have a set up unique evening on Monday, August 27, featuring

a dazzling Bollywood performance by Terence Lewis and his dance troupe.

We hope this Conference leaves you with several incisive insights, winning themes, greater

conviction, and the best investment ideas. We welcome you once again, and hope you have a

very productive and enjoyable week.

Navin Agarwal Rajat Rajgarhia

Director & CEO – Institutional Equities Director – Research

Investors are advised to refer through disclosures made at the end of the Research Report.

Welcome to the Conference!

2August 27 - 31, 2012


CEO Track (Monday, August 27)

Time Session and Speaker(s)

09:30-09:40 Introduction and Welcome Address

Mr Motilal Oswal, CMD, Motilal Oswal Financial Services

Mr Raamdeo Agrawal, Joint MD, Motilal Oswal Financial Services

09:45-10:25 Thematic Presentation

Vision Of The Indian Financial SectorMr Deepak Parekh, Chairman, HDFC

10:45-11:25 CEO Track: Larsen & Toubro

Mr K Venkatramanan, CEO & Managing Director

11:30-12:10 CEO Track: Bharti Airtel

Mr Akhil Gupta, Deputy Group CEO & Managing Director

12:15-12:55 CEO Track: ONGC

Mr S Vasudeva, Chairman & Managing Director

13:00-13:55 Luncheon Panel Discussion

25 Years of Wealth Creation Mr Akash Prakash, CEO, Amansa Capital

Mr Motilal Oswal, CMD, Motilal Oswal Financial Services

Mr Raamdeo Agrawal, Joint MD, Motilal Oswal Financial Services


Financial Health Of India IncMs Roopa Kudva, Standard & Poor's, Region Head, South Asia


Power Of Nutrition: Bring Transformational Changes In LifeMs Pooja Makhija, Nutritionist

15:45-16:25 CEO Track: Idea Cellular

Mr Himanshu Kapania, Managing Director


United Colors Of Indian PoliticsMr Prabhu Chawla, Editorial Director, The New Indian Express

17:15 onwards Motilal Oswal Silver Jubilee Celebrations, a unique evening featuring -

Celebrating Bollywood: A dazzling dance performance by Terence Lewis & his troupe

The Climax: Enter the world of heady cocktails and exquisite global cuisine

3August 27 - 31, 2012


CEO Track (Tuesday, August 28)

Time Session and Speaker(s)

09:45-10:25 CEO Track: State Bank of India

Mr Pratip Chaudhuri, Chairman

10:45-11:25 CEO Track: Titan Industries

Mr Bhaskar Bhat, Managing Director

11:30-12:10 CEO Track: Infosys

Mr S D Shibulal, CEO & Managing Director

12:15-12:55 CEO Track: ICICI Bank

Ms Chanda Kochar, CEO & Managing Director

13:00-13:55 Luncheon Panel Discussion

Navigating Through Business Cycles Mr Glenn Saldanha, Glenmark Pharma, CMD

Mr Sanjiv Bajaj, Bajaj Finserv, MD

Mr Vivek Chaand Sehgal, Motherson Sumi Group, Founder Chairman

Mr B Nagesh, Shoppers Stop, Vice-Chairman

14:00-14:40 CEO Track: Zee Entertainment Enterprises

Mr Punit Goenka, Managing Director & CEO


Indian Education: Super 30 – Revolutionizing Education at the GrassrootsProf Anand Kumar, Leading Educationist & Social Entrepreneur

15:45-16:25 CEO Track: ACC

Mr Kuldip Kaura, CEO & Managing Director

16:30-17:10 Special Presentation

Making India A World Champion – Lessons from my journeyMs Mary Kom, World & Olympic Boxing Supermom

17:15-17:55 Special Presentation

Re-shaping Entertainment – Whether small screen or big!Ms Ekta Kapoor, Soap Queen & Top Bollywood Producer

17:55-18:00 Vote of Thanks

Mr Navin Agarwal, Director & CEO - Institutional Equities, Motilal Oswal Financial Services

4August 27 - 31, 2012


CEO Track Speaker ProfilesIndia's top CEOs and Experts

CEO Track

5August 27 - 31, 2012


ThematicPresentation

Mr Deepak Parekh

Chairman

HDFC

"Vision Of The Indian Financial Sector"

Date: Monday, August 27

Time: 09:45 - 10:25

Mr Krishnamurthi Venkataramanan

CEO & Managing Director

Larsen & Toubro


Time: 10:45 - 11:25

Mr K Venkataramanan is the CEO and Managing Director of L&T. A graduate in Chemical

Engineering from IIT, Delhi, he joined L&T in 1969. He was elevated to the Board of Directors in

May 1999, and he assumed his current role in April 2012. He is credited with helping in the

transformation of L&T from a fabrication-driven EPC contractor to a technology-led player.

Mr Venkataramanan is a Distinguished Alumni Awardee of IIT Delhi in 2005. He is the first Asian

to be appointed Chairman of the Board of Directors of the 'Engineering & Construction Risk

Institute, Inc.', USA for a two year term ended in May 2010. He is an Honorary Fellow of the

Institute of Chemical Engineers (IChemE), UK. He is also a Fellow of the Indian Institute of

Chemical Engineers, and currently the Chairman of the Capital Goods Committee of FICCI.

Mr Venkataramanan's accolades include the 'Davidson Frame Award' conferred by IPMA,

Switzerland, for strengthening the Project Management Profession - 2002. He was honored with

'Chemtech - Business Leader of the Year' award for Plant & Machinery - 2005, and the 'Lala

Shriram Award for Leadership in Chemical Industry' - 2006. He has been conferred an Honorary

Doctorate in Project Management by the University of Petroleum & Energy Studies, Dehradun.

CEO Track

CEO Track Speakers (in order of appearance)

Mr Deepak Parekh is the Chairman of HDFC, India's premier housing finance company. Mr

Parekh's business acumen and farsightedness has not only made HDFC the leader in Mortgages,

but has also transformed it into India's leading financial services conglomerate, with presence

in Banking, Asset Management, Insurance, Real Estate Venture Fund and Education Loans.

Besides HDFC Group companies, Mr Parekh is on the board of several leading companies across

diverse sectors. Mr Parekh is often dubbed as the government's unofficial crisis consultant. Be

it his role as Special Director on the Satyam Board in 2009 to revive the company or the crucial

role played by him during the UTI mess in the late '90s, Mr Parekh has shared his ideas and

experience to formulate reform policies across sectors. He is an active member of various high-

powered Economic Groups, government-appointed Advisory Committees and Task Forces.

Mr Parekh was awarded the Padma Bhushan in 2006. The Republic of France conferred on him

the honor, "Knight in the Order of the Legion of Honor" in 2010. In 2010, he became the first

international recipient of the Institute of Chartered Accountants in England and Wales'

Outstanding Achievement Award.

6August 27 - 31, 2012


Mr Akhil Gupta

Deputy Group CEO & Managing Director

Bharti Enterprises


Time: 11:30 - 12:10

Mr Sudhir Vasudeva

Chairman & Managing Director

Oil and Natural Gas Corporation


Time: 12:15 - 12:55

Mr Sudhir Vasudeva is the Chairman and Managing Director of Oil and Natural Gas Corporation

(ONGC), the most valuable Maharatna public sector unit (PSU) of India. He is also the Chairman

of ONGC Videsh (OVL), Mangalore Refinery and Petrochemicals (MRPL) and five other ONGC

Group Companies - ONGC Petro-additions, ONGC Mangalore Petrochemicals, Mangalore SEZ,

ONGC Tripura Power Company and ONGC Mittal Energy.

Mr Vasudeva is a Gold Medalist Chemical Engineer with Advanced Diploma in Management.

Under his stewardship, ONGC has registered its highest-ever profit, become the highest-ever

dividend paying company in India, and often retains the Numero Uno position in terms of

market capitalization. His focus on Investor Relationship has ranked ONGC Number-2 in

Institutional Investors' Best IR Companies List of 2012 in the Oil & Gas domain across Asia.

A firm believer in transparency and ethical business practices, Mr Vasudeva is the President of

Global Compact Network, India. He also happens to be the first business leader from Indian

PSUs to become a Member of the Board of the United Nations Global Compact.

CEO Track

CEO Track

Mr Akhil Gupta is the Deputy Group CEO and Managing Director of Bharti Enterprises and a

Director of Bharti Airtel. He has been closely involved from the very beginning in the growth of

Bharti in the telecommunication services sector. He has also been responsible for conceptualizing

and implementing the separation of passive mobile infrastructure and forming Indus Towers, a

JV with Vodafone and Idea, which has become the largest tower company in the world.

Mr Gupta is also the Chairman of Tower and Infrastructure Providers Association (TAIPA). He

represents the Indian Telecom Industry and Bharti regularly at various forums. He was awarded

'CEO of the Year' at the National Telecom Awards 2012. He was also honored for 'Outstanding

Contribution to the Telecom Sector' by the leading telecom magazine, tele.net.

A Chartered Accountant, Mr Gupta has also completed an "Advanced Management Program" at

the Harvard Business School. He has been inducted to the CFO India - 'Hall of Fame' in recognition

of his contribution to the world of finance. In 2010, he was awarded the Asia Corporate Dealmaker

Award at the Asia-Pacific M&A ATLAS Awards in recognition of his leadership in executing Bharti

Airtel's acquisition of Zain Group's mobile operations in Africa.


7August 27 - 31, 2012



Ms Roopa Kudva

Region Head, South Asia

Standard & Poor's

"Financial Health Of India Inc"


Time: 14:00 - 14:40

Ms Roopa Kudva is the Region Head, South Asia of Standard & Poor's, a global analytical

company providing ratings, research, and risk and policy advisory services. She is also the MD

and CEO of CRISIL, S&P's Indian subsidiary. During her tenure as CEO, CRISIL's profits have more

than doubled, its customer-base has grown from 1,000 to 30,000, and its reach has expanded

from 9 Indian cities to 150, while its international operations now cover 30 countries.

Ms Kudva holds a Degree in Statistics, and a Post Graduate Diploma in Management from the

Indian Institute of Management, Ahmedabad. She joined CRISIL in 1992, and has more than two

decades of credit-related experience across sectors, including a secondment to Standard &

Poor's, Paris, as Director, Financial Institutions Ratings. She assumed her current role in 2007.

Ms Kudva regularly features in lists of the most powerful women in Indian business. She is a

member of several policy-level committees relating to the Indian financial system, including

committees of the Securities and Exchange Board of India and the Reserve Bank of India. She is

also a member of the Executive Council of NASSCOM. Ms Kudva has received the Distinguished

Alumnus Award from the Indian Institute of Management, Ahmedabad.



Ms Pooja Makhija

Nutritionist

"Power Of Nutrition: Bring

Transformational Changes In Life"


Time: 14:45 - 15:25

Ms Pooja Makhija is one of India's leading experts on nutrition and has counseled over 15,000

clients. She runs her own wellbeing clinic, Nourish, in Mumbai. She teaches her clients how to

eat right, keep fit and maintain high energy levels, enabling them to deal with the rigors of life.

She believes that understanding the importance of food can bring about huge, transformational

changes in people's lives. She is known for her no-nonsense diet plans.

Her prescription for healthy weight loss is: Eat within the first hour of rising. Eat four main

meals a day and a small snack every two hours in between. Exercise after a small light snack.

Eat main meals after the workout. Hydrate yourself well - one glass of water every hour. Restrict

daily oil consumption to 3-4 tablespoons a day. Avoid refined sugar in beverages. Stay away

from artificial sweetener, too. Say no fruits juices, smoothies or milkshakes. Eat the fruits

instead. Healthy eating is a lifestyle, not a "diet". Imbibe it.

Ms Makhija was the official diet counselor at Ms Sushmita Sen`s beauty pageant, I Am She

2010. Among her celebrity clients are Ms Vidya Balan, Ms Sonam Kapoor and Ms Raveena

Tandon. She recently launched her book, 'Eat. Delete. - The Anti Quick Fix Approach'.

8August 27 - 31, 2012



Mr Himanshu Kapania

Managing Director

Idea Cellular


Time: 15:45 - 16:25

Mr Himanshu Kapania is the Managing Director of Idea Cellular, a pan-India mobile operator

with revenue of USD4b and over 110m subscribers. He is credited with strengthening Idea's

dominance in Maharashtra & Goa, Madhya Pradesh & Chattisgarh, and Kerala, and launching

Idea services in Mumbai, Karnataka, Tamil Nadu and Chennai while expanding brand presence

in Gujarat and Andhra Pradesh. Under his leadership, Idea has grown in South and West India.

Mr Kapania has had two separate stints with Idea Cellular (erstwhile Birla AT&T). In his first

stint, he joined the company in 1997 as General Manager, Operations - South Maharashtra and

then moved on as COO for Gujarat (1998-2000) and as COO for Delhi (2000-2003). Subsequently,

he worked with Reliance Infocomm as CEO - North India. In September 2006, Mr Kapania returned

to Idea as COO and in 2008, was promoted as Director - Operations. He was appointed Managing

Director in April 2011.

Besides Telecom, Mr Kapania has rich experience in Automobiles, Consumer Durables and

Office Automation industries. He is a BE (Electricals & Electronics Engineering) from BIT Mesra

(1979-83) and a Post Graduate from the Indian Institute of Management, Bangalore (1988-90).

CEO Track


Mr Prabhu Chawla

Editorial Director

The New Indian Express Group

"United Colors Of Indian Politics"


Time: 16:30 - 17:10

Mr Prabhu Chawla is Editorial Director of The New Indian Express Group and hosts 'Teekhi

Baat', a talk show on IBN7. He is one of the most authoritative and credible voices in print as

well as the electronic media in India. In his 40 years as Reporter and Editor, he has extensively

covered events that have changed India's political course and the people who engineered them.

Mr Chawla began his career as an Economics Lecturer at Delhi University before going on to

become one of India's best-known journalists. From 1991 to 1994, he was Editor of Indian

Express, post which he was Editor-in-Chief and CEO of Financial Express from 1994 to 1996.

Between 1996 and 2011, he was Editor of India Today and Editorial Director of the India Today

Group of Publications. During that period, he launched the magazine's regional editions (Hindi,

Tamil, Telugu and Malayalam) and hosted the weekly talk show 'Seedhi Baat' on Aaj Tak.

Among the recent awards and accolades he has received are: the Indian Television Academy

Award for Best News and Current Affairs Anchor for 2009 for 'Seedhi Baat', the Indian Television

Academy Award for Best Talk Show Host for 2008, and the Sansui Television Best TV Anchor

Award for 2008. Mr Chawla is a Padma Bhushan recipient.

9August 27 - 31, 2012


Mr Pratip Chaudhuri

Chairman

State Bank of India

Date: Tuesday, August 28

Time: 09:45 - 10:25

Mr Pratip Chaudhuri is the Chairman of State Bank of India, the only Indian bank to feature in

the Fortune Global 500 list. In this role, he is not only the Chief Executive of India's largest

commercial bank, but also the head of the entire State Bank Group including 5 associate banks

and 22 subsidiaries - 8 of which are overseas entities.

Mr Chaudhuri holds a post graduate degree in Business Administration with specialization in

Finance. He joined this 205-year old institution as a Probationary Officer in the year 1974.

During his tenure of 37 years in State Bank of India, Mr Chaudhuri has held a number of

important positions, including those of Chief General Manager (Foreign Offices), Chief General

Manager of Chennai Circle and General Manager (Mid Corporate Group).

Mr Chaudhuri assumed Chairmanship of State Bank of India in April 2011. Immediately prior to

taking over as Chairman, he was Deputy Managing Director in charge of the International

Banking Group of the Bank. He was also the Managing Director of State Bank of Saurashtra, and

piloted its merger with State Bank of India.

CEO Track


Mr Bhaskar Bhat

Managing Director

Titan Industries


Time: 10:45 - 11:25

Mr Bhaskar Bhat is the Managing Director of Titan Industries. He began his career as a

Management Trainee at Godrej & Boyce in 1978. After five years at Godrej, he joined the Tata

Watch Project, which is now Titan Industries. He assumed his current role in April 2002.

Mr Bhat is a BTech (Mechanical Engineering) from IIT Madras (1976) and has completed his

Post Graduate Diploma in Management from IIM Ahmedabad (1978). Most of his working

experience has been in Sales & Marketing. At Titan, he has handled Sales & Marketing, Human

Resources, International Business and General Management. He is also a Director in Virgin

Mobile India Limited, a joint venture of Tata Teleservices and Virgin Group, UK.

Mr Bhat received the Distinguished Alumnus Award in IIT Madras in 2008. He was conferred the

Qimpro Gold Standard Award for Business in February 2010. He won the Most Admired Retail

Professional of the Year at the India Retail Forum 2011 and received the Distinguished Alumnus

Award in IIM Ahmedabad in November 2011. Mr Bhat was ranked as the 4th CEO in a survey

conducted by the Business Today, INSEAD and Harvard Business Review.

CEO Track

10August 27 - 31, 2012


Mr SD Shibulal

Co-Founder and CEO & Managing Director

Infosys


Time: 11:30 - 12:10

Ms Chanda Kochhar

Managing Director & CEO

ICICI Bank


Time: 12:15 - 12:55

Ms Chanda Kochhar is the Managing Director and CEO of ICICI Bank, India's largest private

sector bank. She is recognized for her role in shaping Retail Banking in India, for her leadership

of the ICICI Group, and for her contributions to various forums in India and globally.

Ms Kochhar began her career with the erstwhile ICICI Limited in 1984 and was instrumental in

establishing ICICI Bank during the 1990s. Ms Kochhar has held various responsible positions

in the Group. Some of these include: Head of the Infrastructure Finance and Corporate Banking

business in ICICI Limited, Head of ICICI Bank's Corporate and International Banking businesses,

and Joint Managing Director and CFO of ICICI Bank. She assumed her current role in 2009.

Ms Kochhar is a member of various high-powered Economic Groups, government-appointed

Advisory Committees and Task Forces. She was conferred with the Padma Bhushan in 2011. In

2012, she has been named amongst the nine Indian women in the Forbes' inaugural "Asia Power

Businesswomen" list, ranked fifth in the list of the "Most Powerful CEOs" in India by The Economic

Times and first in the list of "Top Women CEOs" in the country, and conferred with CNBC Asia's

India Business Leader of the year award and CSR award.

CEO Track

CEO Track

Mr SD Shibulal is the Co-Founder and the CEO and Managing Director of Infosys. Earlier, he has

held a number of senior leadership roles in the company. Prior to becoming CEO, he served as

COO between June 2007 and August 2011.

He has been instrumental in the development of Infosys' Global Delivery Model, which helped

set the stage for its evolution into a leading multinational Business Consulting and IT Services

provider. As CEO, Mr Shibulal is focused on strengthening strategic partnerships with clients,

increasing client relevance and evolving the business model towards achieving Infosys'

aspirations of becoming a next generation Global Consulting and IT Services corporation.

Mr Shibulal holds an MS degree in Computer Science from Boston University and a Master's

degree in Physics from the University of Kerala. He is a member of the Board of Trustees, the

International Advisory Board and the Metropolitan College Dean's Advisory Board of Boston

University. He is also a member of the International Board of Foundation, Globethics.net, the

Seoul International Business Advisory Council (SIBAC), and the Global Corporate Governance

Forum's Private Sector Advisory Group.


11August 27 - 31, 2012


Mr Punit Goenka

Managing Director & CEO

Zee Entertainment Enterprises


Time: 14:00 - 14:40

Mr Punit Goenka is Managing Director and CEO of Zee Entertainment Enterprises (ZEE). His

strong work ethics and hands-on approach have helped steer the ZEE Empire to new frontiers of

success. Under his leadership, Zee TV has emerged a leader among General Entertainment

Channels in India. He is now working towards strengthening ZEE's reach internationally.

Mr Goenka has grown up the ranks, handling various responsibilities across the Essel

conglomerate for over 15 years. He began his career with Zee TV in 1995 as Head of the Music

division and went on to shoulder additional responsibilities across group companies. In 2004,

he took charge as the Business Head of Zee TV. He was promoted to Network Operating Officer in

2005 and was made responsible for the Programming, Operations, Administration and HR

functions of all of ZEE's entertainment channels. He assumed his current role in July 2008.

Mr Goenka is a great mentor. He has shared his experiences and knowledge at management

education programs such as Young Managers Program at INSEAD, France, and 'Birthing of Giants'

by Young Entrepreneurs' Organization and MIT Enterprise Forum, Inc, Boston, USA.

CEO Track


Mr Anand Kumar

Leading Educationist & Social Entrepreneur

"Super 30: Revolutionizing Education

at the Grassroots"


Time: 14:45 - 15:25

Mr Anand Kumar is a noted Mathematics Teacher. In the last nine years, a phenomenal 236

students from his 'Super 30' initiative have cleared the Joint Entrance Test of the Indian Institute

of Technology (IIT). What is remarkable about this achievement is that most of the successful

candidates have been from the most underprivileged sections of society.

Mr Kumar has been fascinated by Mathematics since early childhood. Though he got an

opportunity to pursue higher education in Cambridge University, his poor financial health

came in the way. To help other financially disadvantaged students, who invariably fade away

without getting the right opportunities, he founded 'Super 30'. Under this initiative, he gives

underprivileged students free food, free lodging and above all free coaching.

The Discovery Channel has described 'Super 30' as a "revolutionary experiment to bring about

social change". In recognition of his achievements, the Bihar government conferred on Mr

Kumar the 'Maulana Abdul Kalam Azad Shiksha Puraskar' in November 2010. Various

international publications and TV channels have applauded Mr Kumar and his initiative. His

remarkable teaching abilities have also found him a place in the Limca Book of World Records.


12August 27 - 31, 2012


Mr Kuldip K Kaura

CEO & Managing Director

ACC


Time: 15:45 - 16:25 CEO Track

Mr Kuldip K Kaura is CEO and Managing Director of ACC.

He has rich experience and a deep appreciation of the national and international business

environment. He has had the benefit of management education from reputed institutions like

London Business School and Swedish Institute of Management. He did his BE (Honors) in

Mechanical Engineering from Birla Institute of Technology & Science, Pilani in 1968.

Mr Kaura worked with Vedanta Resources Plc for seven years, initially as the Managing Director

of Hindustan Zinc and thereafter as Chief Executive Officer of Vedanta Resources until 2008 and

played a significant role in the transformation and rapid growth of its group companies. Prior

to this, he had an 18-year stint with ABB India, an engineering company. During this period, he

grew through various key positions and was Managing Director from 1998 to 2001.

He has served as Member of National Council of the Confederation of Indian Industries and is

an office bearer of other such professional bodies.



Ms Mary Kom

World & Olympic Boxing Supermom

"Making India A World Champion –

Lessons from my journey"


Time: 16:30 - 17:10

Ms Mary Kom is a five-time World Boxing champion, and the only woman boxer to have won a

medal in each one of the six world championships. She is the only Indian woman boxer to have

qualified for the 2012 Summer Olympics, competing in the flyweight (51 kg) category and winning

the bronze medal. She is number-4 on the AIBA World Women's Ranking - flyweight category. She

has more than three Asian titles and eleven National titles under her belt.

Ms Kom initially tried to hide her interest in boxing from her family, since it was not considered

a suitable sport for a woman. However, after her victory in the Manipur state women's boxing

championship in 2000, her career became public. After winning the regional championship in

West Bengal, she began competing at the international level at the age of 18, only a year after

she started boxing. Her international debut was at the first AIBA Women's World Boxing

Championship in the United States, where she won a silver medal in the 48 kg weight category.

Ms Kom had the honor of jointly bearing the Queen's Baton with Mr Vijender Singh in the

opening ceremony run for the 2010 Commonwealth Games of Delhi. She is a recipient of the

Arjuna Award, the Padma Shri Award, and the Rajiv Gandhi Khel Ratna Award.

13August 27 - 31, 2012



Ms Ekta Kapoor

Soap Queen & Top Bollywood Producer

"Re-shaping Entertainment –

Whether small screen or big!"


Time: 17:15 - 17:55

Ms Ekta Kapoor is a Television and Film Producer. She is the Joint Managing Director and

Creative Director of Balaji Telefilms. She has produced several TV serials, the most popular of

which include Hum Paanch, Kyunki Saas Bhi Kabhi Bahu Thi, Kahaani Ghar Ghar Kii, Kasautii

Zindagii Kay, Kkusum, Pavitra Rishta, and Bade Achhe Lagte Hain, to name but a few.

Ms Kapoor branched out into Bollywood movie production in 2001, beginning with Kyo Kii Main

Jhuth Nahin Bolta. Kyaa Kool Hai Hum, starring her brother Mr Tusshar Kapoor proved to be her

breakout hit and became one of the highest earners of 2005. The years 2010 and 2011 proved to

be important for her, with critical and commercial successes such as Love Sex Aur Dhokha, Once

Upon a Time in Mumbaai, Shor in the City, Ragini MMS and The Dirty Picture.

Among the awards Ms Kapoor received in 2012 are: Indian Telly Awards' Special Award for Best

Breakout in Films, Screen Awards' Best Performer of the Year, and Dadasaheb Phalke Academy

Awards' Phalke Icon Film & Television Producer. She received wide recognition for The Dirty

Picture (Hindi movie), Taryanche Bait (Marathi movie) and Bade Acche Lagte Hain (TV serial).


Panel discussions2. Navigating Through Business Cycles

Mr Glenn SaldanhaGlenmark Pharma, CMD

Mr B NageshShoppers StopVice-Chairman

Mr Akash PrakashCEO, Amansa Capital

Mr Raamdeo AgrawalJoint MD, Motilal Oswal Group

1. 25 Years of Wealth Creation

Mr Motilal OswalCMD, Motilal Oswal Group

Mr Sanjiv BajajBajaj Finserv, MD

Mr Vivek Chaand SehgalMotherson Sumi GroupFounder Chairman

1987 - 2012

14August 27 - 31, 2012


From the 7th to the ...

... 8th Annual Global Investor Conference

India At A GlanceMacroeconomy, corporate earnings, markets

India at a glance

15August 27 - 31, 2012


India at a glance: Macro

The macro backdrop is challenging with weakening fundamentals confronting

risks of twin deficits and policy stasis.

The quarterly GDP growth has come down to nine-year low and is further slowing

down to 5% level.

Inflation though have come down from their peak level, still hovers around 7%

level with core inflation somewhat above 5%.

It would be difficult to achieve any meaningful fiscal correction in FY13 due to

rising oil, food, fertilizer subsidy and on account of shortfall from spectrum sale

and disinvestment.

RBI pursued tight money in view of still high inflation and fiscal deficit. However,

slowing bank credit has eased pressures on liquidity.

On the external front, trade and current account deficit were record and

unsustainably high in FY12. However, decline in gold imports and higher portfolio

flows has stabilized the INR somewhat.

Slowing policy making have come in for critical focus with government still touting

booming FDI as sign of continued confidence in India. However, by its own

reckoning government needs to move forward on critical reform such as DTC, GST,

FDI, infrastructure and good governance.

GDP growth - annual (YoY %) GDP growth - quarterly (YoY %)

IIP growth (YoY %) WPI Inflation (YoY %)

16August 27 - 31, 2012


Fiscal deficit (% of GDP) Oil price and underrecoveries

(Ap

r-M

ay)

India at a glance: Macro

Banking indicators RBI rates

Liquidity situation Currency and reserves

External balance (% of GDP) FDI (USD b)

17August 27 - 31, 2012


MOSL Universe Ex RMS Sales Growth (%) MOSL Universe Ex RMS PAT Growth (%)

Corporate India is facing slowdown driven by both domestic and global headwinds

and weathered it only partially. While its topline growth was protected in FY12

the bottomline was severely dented. In contrast in FY13 while sales growth is

expected to nearly halve, PAT growth seem to have plateaued.

MOSL Universe Ex RMs has seen a revenue growth of 23% andd 12% PAT growth for

FY12. However we estimate the same for FY13 at 12% and 9% respectively.

MOSL Universe Mar-12 PAT at INR803bn is at its all time high. However the same

moderarted to INR735bn for June-12 quarter.

Oil & Gas and Financials contribute 46% to the total earnings (v/s 44% YoY). Metals

has seen a drop in contribution from 15% to 12%. Overall the contribution of

domestic plays are expected to increase in FY13.

FY13 Sensex EPS expected to grow 8% to 1,213 and FY14 EPS to grow 14% to 1,380.

As a pointer to the importance of the interest rates for the corporate sector, interest

/ sales for BSE 500 companies Excl Financials and RMS went upto 3.4% as against

~2.9% registered in past several quarters.

Profitability as reflected by PAT margin declined to 7.9% as against 8.8% registered

in Mar-12 quarter.

India at a glance: Corporate earnings

Quarterly PAT (MOSL Universe Ex RMs, INR b)

18August 27 - 31, 2012


Sensex EPS (INR)

MOSL Universe contribution to PAT (%)

Sector FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13E

Domestic Plays 49 48 53 55 59 53 54 56

Banking 18 16 17 21 23 22 24 25

Pvt 4 4 4 4 5 6 7 7

PSU 11 10 10 13 13 12 12 13

NBFC 3 3 3 3 4 5 5 5

Domestic Consumer 10 11 13 14 14 11 9 10

Auto Ex Tata Motors 3 2 3 2 4 3 3 3

Telecom 3 5 7 7 6 3 2 1

Consumer 4 4 4 4 4 4 4 5

Domestic Non - Consumer 21 21 22 21 22 20 21 21

Uti l it ies 14 10 8 9 11 10 11 11

Capital Goods 3 4 3 4 5 5 5 4

Cement 2 4 4 4 4 3 3 3

Real Estate 1 3 6 3 2 2 1 1

Others 1 1 1 1 1 1 1 1

Global Plays 51 52 47 45 41 47 46 44

Cyclical 41 41 38 34 29 36 34 31

Oil & Gas ex RMs 26 22 21 20 19 20 21 18

Metals 14 17 15 15 10 12 9 9

Tata Motors 1 1 1 -1 1 3 4 3

Non-Cyclical 10 11 10 11 11 11 12 14

Technology 7 8 7 8 9 8 9 10

Healthcare 3 3 3 2 3 3 3 4

MOSL Universe ex RMs 100 100 100 100 100 100 100 100

India at a glance: Corporate earnings

BSE 500 Companies Excluding Financials & RMS

19August 27 - 31, 2012


After a 25% decline in CY11, Sensex has delivered a 15% return in CY12YTD. Over

the last 10 years, Sensex delivered a return CAGR of 18%; among the best

performing global markets.

FII flows for CY12 YTD has been at USD11.5b after a outflow of USD0.5B in CY11.

Market cap of 30 billion-dollar market cap companies in 2002 was USD82b; the

number of billion-dollar market cap companies has ballooned to 163 with market

cap of USD947b.

Indian Market Cap to GDP has fallen from 89% in FY11 to 70% in FY12. At current

ratio of 62%, the markets are trading in line with long-term averages.

Valuations remain below historical average (rolling 12-month forward PE of 13.8x

v/s 10-year average of 14.7x). However, RoEs are also below the averages.

India at a glance: Indian equities

Indian Markets Annual Return

India Vs Global 10 Year CAGR (%)

20August 27 - 31, 2012


Trend in FII Flows (USD b) Companies with over USD1b market cap

India at a glance: Indian equities

Market Cap to GDP (%) Sensex PE (x)

Sensex P/BV (x) Sensex earnings yield v/s bond yield (%)

Indian market volumes India Volatility Index (%)

21August 27 - 31, 2012


Participating Companies

JSW Energy

JSW Steel

Kotak Mahindra Bank

Larsen & Toubro

LIC Housing Finance

Lupin

Mahindra Finance

Mahindra & Mahindra

Manappuram Finance

Marico

Maruti Suzuki

McLeod Russel

MCX

Motherson Sumi Systems

Muthoot Finance

NTPC

Oil India

ONGC

Phoenix Mills

Pidilite Industries

Power Grid

Radico Khaitan

Raymonds

Reliance Communications

Reliance Industries

Reliance Infrastructure

Rural Electric Corporation

Shoppers Stop

Shriram Transport Finance

Sidhivinayak Logistics

Simplex Infrastructure

State Bank of India

Sun Pharmaceuticals

Tata Consultancy Services

Tata Motors

Tata Steel

Titan Industries

Ultratech Cement

Union Bank of India

Unitech Automobile

Voltas

Wipro

Yes Bank


ACC

AIA Engineering

Ambuja Cements

Ashok Leyland

Au Financiers

Axis Bank

Bajaj Auto

Bajaj Electricals

Bajaj Finance

Bajaj FinSer

Bharat Petroleum Corporation

Bharti Airtel

Cairn India

CESC

Container Corporation of India

DB Corp

Dewan Housing Finance

Dish TV

DLF

Emami

Fort Point Automotive

GAIL India

GlaxoSmithKline Pharmaceuticals

Glenmark Pharmaceuticals

Godrej Consumer Products

Grasim Industries

HDFC

HDFC Bank

Hero MotorCorp

Hindalco Industries

Hindustan Unilever

HPCL

HT Media

ICICI Bank

ICRA

Idea Cellular

IDFC

Indusind Bank

Info Edge (India)

Infosys

ING Vysya Bank

IPCA Laboratories

ITC

Jindal Steel & Power

JP Associates

August 27 - 31, 2012 22


Company descriptionACC, part of Holcim group, is the third largest cement

company in India with total capacity of 30.7m tons, and

pan-India presence with 16 plants. It is the oldest player

in the Indian cement industry with ~10% market share.

Key investment positives ACC is the best proxy on the Indian cement industry.

It is a market leader with share of ~10%, and without

revenue concentration in any particular region.

Strong brand equity and focus on trade segment

(~75% of volumes) drives premium pricing.

Focused on reducing power cost through captive

power plants and increasing use of alternate fuels.

It has equity stake in two coal blocks, viz, 200mt

reserve in MP (50% stake) and 685mt reserve in West

Bengal (14% stake). The mines, expected to become

operational in 3-4 years, will provide cost-effective

and long-term assured supply of energy.

High sensitivity to cement prices as every INR1/bag

change in cement price changes CY13E EPS by 2.4%.

With completion of major capex and strong cash flow

from operations, we estimate ACC to have net cash

balance of INR180/share by Dec-12.

Key challenges Very limited scope to increase production through

blending as already 85% of cement sold is blended.

Shareholding pattern (%)

Jun-12 Mar-12 Jun-11

Promoter 50.5 50.5 50.5

Dom. Inst. 12.1 11.8 15.2

Foreign 18.9 18.7 15.7

Others 18.6 19.1 18.8

ACC

Stock info

Bloomberg ACC IN

Equity Shares (m) 188

CMP (INR) 1,328

Mcap (USD b) 4.5

52-Wk Range (INR) 1,422 / 982

1, 6, 12 Rel Perf (%) 2 / 1 / 28

Quarterly Performance (INR Million)

Y/E December Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 CY11 CY12E

Operating Income 24,030 21,500 25,027 28,602 27,778 94,387 112,721

Change (%) 18.9 31.3 27.8 19.3 15.6 22.3 19.4

EBITDA 5,503 2,204 3,893 6,161 6,508 16,992 22,428

Change (%) -0.5 29.7 86.4 11.2 18.3 9.3 32.0

EBITDA Margin (%) 22.9 10.3 15.6 21.5 23.4 18.0 19.9

Reported PAT 3,366 1,676 3,227 1,554 4,179 13,254 11,675

Adjusted PAT 3,366 1,229 1,935 3,859 4,179 11,083 13,981

Change (%) -6.2 22.8 39.2 10.1 24.2 9.3 26.1

PAT Margin (%) 14.0 5.7 7.7 13.5 15.0 11.7 12.4

Key Operating metrics

Volume (mt) 5.93 5.69 5.95 6.72 6.05 23.7 25.5

Realizations(INR/t) 4,052 3,779 4,206 4,256 4,591 3,978 4,429

EBITDA (INR/t) 928 387 654 917 1,076 716 881

E: MOSL Estimates

ACC has one of the highest dependence on

domestic coal, necessitating shift towards open

market/imported coal as availability of domestic

linkage coal reduces.

Turning around loss-making RMC (ready-mix

concrete) subsidiary (INR25m PBIT loss), which is

going to be merged into ACC.

Key news flows / triggers to watch Cement demand recovery over next 12-18 months,

driven by pick-up in infrastructure activity.

Sustenance of pricing discipline in the key markets

of South and North India.

Outcome of the sector's appeal against CCI order

on alleged cartelization.

2QCY12 highlights Realization improved 8% QoQ (+13% YoY) to

INR4,591/ton (v/s est INR4,396), led robust price

uptick across markets.

Volumes grew just 2% YoY (-10% QoQ) to 6.05mt

(v/s est 6.1mt).

Costs were largely in-line with estimates, as higher

than freight and other expenses were offset by

lower than estimated fuel cost.

Despite cost push, positive surprise in realizations

led to INR180/ton QoQ improvement in EBITDA/ton

to INR1,076 (v/s est INR905).

23August 27 - 31, 2012


ACC: Financials and valuation

Income Statement (INR Million)

Y/E December CY10 CY11 CY12E CY13E

Net Sales 77,173 94,387 112,721 129,592

Change (%) -3.9 22.3 19.4 15.0

EBITDA 15,540 16,992 22,428 25,501

Change (%) -38.5 9.3 32.0 13.7

Margin (%) 20.1 18.0 19.9 19.7

Depreciation -3,927 -4,753 -5,448 -5,736

Int. and Fin. Charges -568 -969 -1,216 -750

Other Income - Rec. 2,925 3,518 4,150 4,400

EO Income/(Expense) 1,465

PBT After EO Item 15,435 17,685 16,560 23,415

Tax Rate (%) 27.4 25.1 29.5 29.5

Adjusted PAT 10,137 11,083 13,981 16,508

Change (%) -38.2 9.3 26.1 18.1

Balance Sheet (INR Million)


Share Capital 1,879 1,879 1,879 1,879

Net Worth 64,695 71,923 77,001 86,362

Loans 5,238 5,107 3,000 3,000

Deferred Tax Liability 3,615 5,184 5,598 5,949

Capital Employed 73,548 82,214 85,598 95,311

Net Fixed Assets 50,824 62,075 65,481 69,745Capital WIP 15,628 4,353 3,000 8,000

Investments 17,027 16,250 17,720 18,258

Curr. Assets, Loans&Adv. 27,533 36,179 43,405 49,902

Inventory 9,150 10,997 13,125 15,089

Account Receivables 1,783 2,604 3,088 3,550

Cash and Bank Balance 10,800 16,526 19,301 22,190

Others 5,801 6,053 7,890 9,071

Curr. Liab. and Prov. 37,464 36,644 44,007 50,594

Account Payables 17,730 20,687 24,706 28,404

Other Liabilities 3,209 5,416 5,404 6,213

Provisions 16,525 10,540 13,897 15,977

Net Current Assets -9,931 -464 -602 -692

Application of Funds 73,548 82,214 85,598 95,311

Key assumptions/operating metrics

CY10 CY11 CY12E CY13E

Capacity (MT) 30.7 30.7 30.7 30.7

Dispatches (MT) 21.3 23.7 25.5 28.0

Growth (%) -1.1 11.5 7.3 10.0

Cap Util (%) 69.4 77.4 83.0 91.3

Net realization (INR/t) 3,625 3,978 4,429 4,629

Growth (%) -2.8 9.7 11.4 4.5

EBITDA (INR/t) 730 716 881 911

EBITDA Margins (%) 20.1 18.0 19.9 19.7

Ratios


Basic (INR)

EPS 53.9 59.0 74.4 87.8

Consolidated EPS 52.4 57.7 72.4 87.8

Cash EPS 74.8 84.3 103.4 118.4

BV/Share 344.3 382.7 409.7 459.6

DPS 30.5 28.0 30.0 32.5

Payout (%) 59.5 46.0 56.5 43.3

Valuation (x)

P/E 23.6 18.8 15.5

Cash P/E 16.1 13.2 11.5

EV/Sales 2.4 2.0 1.7

EV/EBITDA 13.4 9.9 8.6

P/BV 3.6 3.3 3.0

Dividend Yield 2.1 2.2 2.4

EV/ton (USD-Cap) 135 131 129

Return Ratios (%)

RoE 16.2 16.2 18.8 20.2

RoCE 16.3 15.7 20.2 21.9

Working Capital Ratios

Debtors (Days) 8 10 10 10

Inventories (Days) 43 43 43 43

Creditors (Days) 84 80 80 80

Cash Flow Statement (INR Million)


OP/(Loss) before Tax 15,540 16,992 22,428 25,501

Interest/Div. Recd. 2,925 3,518 4,150 4,400

Direct Taxes Paid -4,112 -2,863 -4,471 -6,556

(Inc)/Dec in WC 4,690 -3,741 2,914 2,979

EO Income/(Exp) 1,465 -2,897 3,354 0

CF from Op. incl EO Exp. 20,507 16,803 21,666 26,324

(inc)/dec in FA -7,234 -4,729 -7,500 -15,000

(Pur)/Sale of Invest. -2,270 777 -1,470 -538

CF from Investments -9,504 -3,952 -8,970 -15,538

Issue of Shares 1 69 0 0

(Inc)/Dec in Debt -431 -131 -2,107 0

Interest Paid -568 -969 -1,216 -750

Dividend Paid -6,668 -6,095 -6,597 -7,147

CF from Fin. Activity -7,666 -7,126 -9,920 -7,897

Inc/Dec of Cash 3,337 5,725 2,776 2,889

Add: Beginning Balance 7,464 10,800 16,526 19,301

Closing Balance 10,800 16,526 19,301 22,190

August 27 - 31, 2012 24


Ambuja Cements

Company descriptionAmbuja Cements, a part of Holcim group, is the fourth

largest cement company in India with total capacity of

27.5m tons under its control.

It is one of the lowest cost producers of cement with

focus on structurally sound markets of North, West and

East. It is also one of the largest exporters of cement

from India.

Key investment positives Ambuja Cement is the best cement company in

India with strong brand equity, favorable market mix

(West, North & East), focused segment mix (on

retail/ trade) and well-diversified fuel and transport

mix, translating into one of the highest profitability,

capital efficiency and payout.

Ambuja enjoys leadership in key markets (#1 in

North and #2 in West).

It has well diversified fuel mix, with only 55-57%

dependence on domestic coal (of which 33%

linkage), ~30% requirement met by imported coal,

and balance by domestic pet-coke.

Expect softening in imported coal prices to benefit

Ambuja, given ~30% dependence on imported coal.

Given its strong cash flow from operations and

completion of major capex, we estimate Ambuja to

have net cash balance of INR22/share by Dec-12.



Promoter 50.2 50.3 50.4

Dom. Inst. 12.4 12.5 14.6

Foreign 29.9 29.5 26.7

Others 7.5 7.7 8.3

Stock info

Bloomberg ACEM IN

Equity Shares (m) 1,538

CMP (INR) 189

Mcap (USD b) 5.2

52-Wk Range (INR) 197 / 130

1, 6, 12 Rel Perf (%) 9 / 13 / 36


Y/E December Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 FY12 FY13E


Change (%) 6.3 15.4 30.6 19.0 17.9 15.4 38.8

EBITDA 5,853 3,115 4,285 7,445 7,223 19,315 27,021

Change (%) -3.0 10.0 36.2 20.7 23.4 5.9 48.2

EBITDA Margin (%) 26.9 17.3 18.3 28.3 28.2 22.6 26.4

Reported PAT 3,475 1,715 3,099 3,122 4,689 12,289 15,987

Adjusted PAT 3,475 1,854 3,305 5,075 4,689 12,547 17,940

Change (%) -11.2 21.9 31.2 24.5 34.9 0.9 43.0

PAT Margin (%) 16.0 10.3 14.1 19.3 18.3 14.7 17.5


Volume (mt) 5.29 4.81 5.71 6.18 5.63 21.45 23.27

Realizations(INR/t) 4,114 3,754 4,092 4,260 4,556 3,977 4,406

EBITDA (INR/T) 1,106 648 750 1,204 1,283 901 1,161

E: MOSL Estimates

Key challenges Given limited capacity addition, any strong

recovery in sector volume growth would result in

capacity constraint for Ambuja in CY14.

Any downturn in the export market would result in

oversupply in the domestic market, resulting in

pressure on prices in Ambuja's key market, Gujarat.

Key news flows / triggers to watch Cement demand recovery over next 12-18 months,




Outcome of the appeal against CCI order in the

appellate tribunal on alleged cartelization.

2QCY12 highlights 1QCY12 realization improved 7% QoQ (10.7% YoY)

to INR4,556/ton (v/s est INR4,380), driven by strong

price improvement in domestic market and better

market/product mix (higher domestic cement

contribution).

Volumes grew 6.5% YoY (-9% QoQ) to 5.63mt (v/s

est 5.8mt) incl clinker.

Costs were largely in-line with estimates, as higher

than freight and other expenses were offset by

lower than estimated fuel cost

1QCY12 EBITDA/ton improved by ~INR80 QoQ to

INR1,283 (v/s est INR1,138).

25August 27 - 31, 2012


Ambuja Cements Financials and valuation


Y/E December 2010 2011 2012E 2013E

Net Sales 73,902 85,306 102,540 117,913

Change (%) 4.4 15.4 20.2 15.0

EBITDA 18,236 19,315 27,021 30,722

Change (%) -2.3 5.9 39.9 13.7

Margin (%) 24.7 22.6 26.4 26.1

Depreciation 3,872 4,452 4,995 5,380

Interest 487 526 646 600

Other Income - Rec. 2,476 3,050 4,250 4,350

EO Expense/(Income) -265 358 2,791 0

PBT after EO Exp. 16,619 17,029 22,839 29,092

Tax Rate (%) 24.0 27.8 30.0 30.0

PAT Adj for EO Items 12,434 12,547 17,940 20,364

Change (%) 4.7 0.9 43.0 13.5


Y/E December 2010 2011 2012E 2013E

Equity Share Capital 3,060 3,069 3,069 3,069

Net Worth 73,301 80,694 89,704 101,990

Deferred Liabilities 5,309 6,436 7,350 8,222

Total Loans 650 494 500 500


Net Fixed Assets 56,278 61,865 64,642 69,262

Capital WIP 9,307 5,773 5,000 8,000

Investments 6,260 8,643 13,597 17,057

Curr. Assets 31,353 38,283 42,140 48,458

Inventory 9,019 9,250 11,237 12,922


Cash and Bank Bal. 17,482 20,712 22,474 25,844

Curr. Liability & Prov. 23,942 26,942 27,827 32,067


Provisions 10,966 11,061 13,344 15,345

Net Current Assets 7,412 11,341 14,312 16,391

Appl. of Funds 79,260 87,624 97,554 110,713


Parameters CY10 CY11 CY12E CY13E

Capacity (MT) 25.0 27.5 27.5 27.5

Despatches (MT) 20.3 21.4 23.3 25.6

Growth (%) 8.2 5.4 8.5 10.0

Net Realizations (INR/t) 3,633 3,977 4,406 4,606

Growth (%) -3.5 9.5 10.8 4.5

EBITDA (INR/ton) 896 901 1,161 1,200

EBITDA Margins (%) 24.7 22.6 26.4 26.1

Ratios

Y/E December 2010 2011 2012E 2013E

Basic (INR)

EPS 8.1 8.2 11.7 13.3

Cash EPS 10.7 11.1 14.9 16.8

BV/Share 47.8 52.4 58.3 66.3

DPS 2.6 3.2 3.5 4.0

Payout (%) 36.7 46.7 44.9 39.7

Valuation (x)

P/E 24.0 16.8 14.8

Cash P/E 17.7 13.1 11.7

P/BV 3.7 3.4 3.0

EV/Sales 3.2 2.6 2.2

EV/EBITDA 14.1 9.8 8.4

EV/Ton (Cap) - US$ 180 175 171

Dividend Yield (%) 1.6 1.8 2.0

Return Ratios (%)

RoE 18.1 16.3 21.1 21.3

RoCE 24.1 23.2 30.7 30.9


Asset Turnover (x) 0.9 1.0 1.1 1.1

Debtor (Days) 6 10 10 10

Inventory (Days) 44.5 39.6 40.0 40.0

Creditor (Days) 64 68 52 52


Y/E December 2010 2011 2012E 2013E

Op. Profit/(Loss) bef. Tax 18,236 19,315 27,021 30,722

Interest/Dividends Recd. 2,476 3,050 4,250 4,350


(Inc)/Dec in WC 3,617 -699 -1,209 1,291

EO Income 265 -358 -2,791 0

CF from Op. incl EO Exp 20,612 16,568 20,419 27,635

(inc)/dec in FA -7,870 -6,504 -7,000 -13,000

(Pur)/Sale of Investments 965 -2,384 -4,953 -3,460



(Inc)/Dec in Debt -534 972 920 873

Interest Paid -487 -526 -646 -600

Dividend Paid -4,632 -5,741 -7,181 -8,078


Inc/Dec of Cash 8,673 3,231 1,762 3,370


Closing Balance 17,482 20,712 22,474 25,844

August 27 - 31, 2012 26


Company descriptionAshok Leyland (AL), the flagship company of Hinduja

Group, is India's 2nd largest M&HCV player (~25% share)

and largest bus manufacturer.

To expand its product offerings, AL has entered into

50:50 JV with Nissan for LCVs and John Deere for

construction equipment.

Key investment positives Despite weakness in M&HCV demand due to macro-

headwinds, AL is expected to report 5% MHCV

volume growth in FY13 with pick-up in its key

Southern market and new launches in 2HFY13.

Launch of LCV Dost by AL-Nissan JV plugs gap in AL's

product portfolio and marks entry in high growth

LCV segment.

While Dost would have adverse impact of 80bp/

120bp on standalone margins in FY13/14, it would

contribute 8%/9% to profits.

Ramp-up at Pantnagar plant and operating leverage

is expected to offset margin pressure arising from

higher discounts and increasing Dost contribution.

We expect EBITDA margin to decline only 20bp in

FY13 to 9.6%.

To counter the cyclical nature of the M&HCV

business, AL is focusing on enhancing contribution

from businesses like LCVs, spares, defense kits and

power solutions. Also, ramp-up in nascent exports

would help offset domestic cyclicality.

Ashok Leyland



Promoter 38.7 38.7 38.7

Dom. Inst. 14.1 14.7 16.5

Foreign 30.1 30.6 27.9

Others 17.1 16.1 16.9

Stock info

Bloomberg AL IN


CMP (INR) 22

Mcap (USD b) 1.1

52-Wk Range (INR) 33 / 20

1, 6, 12 Rel Perf (%) -10 / -20 / -10


Y/E March Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 FY12 FY13E


Change (%) 7.0 14.0 30.4 12.0 19.7 14.9 12.5

EBITDA 2,446 3,312 2,104 4,700 2,407 12,561 13,587

Change (%) 3.9 8.6 26.7 (7.5) (1.6) 3.5 28.6

EBITDA Margin (%) 9.7 10.7 7.2 10.9 8.0 9.8 9.6

Reported PAT 862 1,541 669 2,587 670 5,660 5,697

Adjusted PAT 862 1,541 669 2,574 670 5,647 5,697

Change (%) (29.6) (7.8) 54.3 (13.7) (22.3) (10.6) 56.1

PAT Margin (%) 3.4 5.0 2.3 6.0 2.2 4.4 4.0


Volumes 19,277 23,628 23,218 35,689 27,578 101,812 130,959

Avg Realizn (INR m) 1.30 1.31 1.25 1.21 1.09 1.26 1.09

RM Cost (%) 27.9 26.5 26.0 25.6 27.2 25.2 26.3

E: MOSL Estimates

Key challenges Higher capex plans (INR4.5b in FY13) and investment

in JVs/subsidiaries (INR3-3.5b) would restrict

balance sheet improvement.

Intensifying competition, particularly from Daimler

(Bharat Benz) could materially alter Indian M&HCV

market's duopoly structure in the long term.

Key news flows / triggers to watch Reduction in interest rates & pick-up in economic

activity to boost CV demand.

Launch of new products under AL-Nissan JV.

Capex & investment plans for FY13.

1QFY13 highlights; guidance for FY13, FY14 1QFY13 realization declined 16% YoY (-10% QoQ)

impacted by higher discounts & product mix change

in favor of LCV Dost. EBITDA margin declined 290bp QoQ (-170bp YoY) to

8% on the back of lower realizations and negative

operating leverage. Higher interest cost dragged

down PAT to INR670m, down 22% YoY (-74% QoQ).

AL earned ~INR150m PAT in 1QFY13 by contract

manufacturing & marketing Dost. However, the JV

would still be loss-making, and is expected to break

even at ~50,000 volumes.

AL expects domestic M&HCV sector volumes to

remain flat in FY13. It expects its own volumes of

~132k (incl Dost), with M&HCV growth of 6-7%. It

has also cut Pantnagar's volume guidance to 30,000.

27August 27 - 31, 2012


Ashok Leyland: Financials and valuation


Y/E March 2011 2012 2013E 2014E

Net Sales 111,771 128,420 142,231 162,996

Change (%) 54.3 14.9 10.8 14.6

Expenditure 99,634 115,859 128,644 146,994

EBITDA 12,137 12,561 13,587 16,001

EBITDA (%) 10.9 9.8 9.6 9.8

Depreciation 2,674 3,528 3,828 4,266

Interest & Fin. Charges 1,889 2,553 3,162 3,387

Other Income 445 404 350 545

Non-recurring Expense / (Inc) - (16) - -

PBT 8,018 6,900 6,947 8,893

Effective Rate (%) 21.3 18.0 18.0 18.0

Adjusted PAT 6,313 5,647 5,697 7,292

Change (%) 48.1 -10.6 0.9 28.0


Y/E March 2011 2012 2013E 2014E

Share Capital 1,330 2,661 2,661 2,661

Net Worth 39,630 42,082 44,687 48,269

Loans 26,733 32,630 37,630 37,630


Foreign curr. translation - 42 42 42


Net Fixed Assets 46,338 49,135 53,289 52,023

Capital WIP 3,580 5,482 2,500 3,000

Investments 12,300 15,345 18,845 21,345

Curr.Assets, L & Adv. 43,716 49,195 57,177 66,091

Inventory 22,089 22,306 26,108 29,027

Sundry Debtors 11,645 12,302 13,639 15,630

Cash & Bank Balances 1,795 326 1,454 3,125

Current Liab. & Prov. 35,131 39,501 44,202 50,822

Sundry Creditors 23,085 27,725 31,174 35,725




Y/E March 2011 2012 2013E 2014E

Total Volumes (units) 94,106 101,812 130,959 150,855

Change (%) 47.2 8.2 28.6 15.2

of which Dost (units) 0 7593 32000 42000

Change (%) - - 321 31

Realisations (INR '000) 1,188 1,261 1,086 1,080

Change (%) 4.8 6.2 -13.9 -0.5

Ratios

Y/E March 2011 2012 2013E 2014E

Basic (INR)

EPS (INR) 2.4 2.1 2.1 2.7

EPS Growth (%) 49.0 -10.3 0.7 28.0

Cash EPS (INR) 3.4 3.4 3.6 4.3

Book Value per Share 14.9 15.8 16.8 18.1

DPS (INR) 1.0 1.0 1.0 1.2

Payout (Excl. Div. Tax) % 42.1 47.0 46.7 43.8

Valuation (x)

P/E 10.8 10.7 8.4

Cash P/E 6.7 6.4 5.3

EV/EBITDA 7.1 6.8 5.7

EV/Sales 0.7 0.7 0.6

Price to Book Value 1.5 1.4 1.3


Profitability Ratios (%)

RoE 15.9 13.4 12.7 15.1

RoCE 14.8 12.5 12.1 13.7

Leverage Ratio

Debt/Equity (x) 0.7 0.8 0.8 0.8


Y/E March 2011 2012 2013E 2014E


Interest/Divi. Received 139 404 350 545

Depr. & Amortisation 2,674 3,528 3,828 4,266

Direct Taxes Paid -1,503 -775 -903 -1,156

(Inc)/Dec in Wkg. Capital -4,914 -2,580 -2,152 -622

Other Items 1,638 0 0 0

CF from Oper. Activity 6,053 9,609 10,882 14,768

Extra-ordinary Items 0 16 0 0

CF after EO Items 6,053 9,625 10,882 14,768

(Inc)/Dec in FA+CWIP -3,501 -5,645 -5,000 -3,500

(Pur)/Sale of Invest. -5,816 -3,045 -3,500 -2,500

CF from Inv. Activity -9,317 -8,690 -8,500 -6,000

Issue of Shares 0 1,330 0 0

Inc/(Dec) in Debt 3,733 5,897 5,000 0

Interest Rec./(Paid) -1,542 -2,553 -3,162 -3,387

Dividends Paid -2,327 -3,092 -3,092 -3,710

CF from Fin. Activity -136 1,582 -1,253 -7,097

Inc/(Dec) in Cash -3,400 2,517 1,128 1,671


Closing Balance 1,755 4,272 5,400 7,072

August 27 - 31, 2012 28


Company descriptionAxis Bank (AXSB) is a leading private sector bank in

India, with a balance sheet size of INR2.9t+.

Promoted by UTI in 1994, the bank has a countrywide

presence through 1,681 branches and extension

counters in 1,080 locations and 10,300+ ATMs.

Over the past 10 years AXSB's assets CAGR is 35% and

PAT CAGR 42%. The bank has emerged as one of India's

best run banks and third largest private sector bank.

Key investment positives Margins have come to a normalized level of 3.25-

3.5% after a decline of ~40bp to 3.4% over the past

two quarters. CASA ratio of ~36% (of which higher

share of granular SA of ~23%) and fall in bulk

deposits rates will cushion margins going forward.

Strong corporate relationships, faster branch

expansion, and high customer acquisitions led to

strong CASA CAGR of 45%+ over FY02-12. We expect

this trend of healthy growth to continue in SA;

however, structural issues in CA deposits growth

might lead to overall moderation in CASA growth.

AXSB's strengths in loan syndication, strong liability

franchise, and SME relationships lead to higher

contribution of fee income (~1.8%) to RoA.

Led by healthy core income growth and controlled

opex, return ratios remain superior with RoA of 1.5%

and RoE of 20%.

Axis Bank

Key challenges Reliance on bulk deposits is high; in case of tight

liquidity, managing margins may be a challenge.

AXSB's Tier-I capital stood at 9.5% (including 1Q

PAT). In our view, it would have to raise capital in

next 3-4 quarters to support its growth momentum.

Maintain tight cost-to-income ratio of 45% is a

challenge, considering growing retail business and

pressure on core earnings.

Considering significant macroeconomic stress, and

AXSB's higher exposure to SME and infrastructure

segments, asset quality may come under pressure

Key news flows / triggers to watch Resolution of key issues in infrastructure, materially

altering asset quality and growth outlook

Improvement in margins and lower than expected

stress on loan book may provide earnings surprise.

1QFY13 highlights; guidance for FY13, FY14 Performance highlights of 1QFY13: Reported loan

growth of 30% (adjusted 21%), 18bp QoQ decline in

NIMs to 3.37%, SA growth of 22% YoY, Fee income

growth of ~10% YoY, annualized slippage ratio of

1.4%, additions to restructured loans of INR6.2b,

and outstanding restructured loans at 2.2% of loans.

Guidance for FY13: Loan growth of 1.3-1.4x industry

with higher focus on retail loans; NIM of 3.25-3.5%,

fee income growth in-line with asset growth, stable

cost to income ratio of 45%, credit cost of 80-85bp

and addition of 200-250 branches every year.



Promoter 37.3 37.4 37.2

Dom. Inst. 13.9 13.4 5.7

Foreign 36.1 41.7 45.6

Others 12.8 7.5 11.5

Stock info

Bloomberg AXSB IN


CMP (INR) 1,110

Mcap (USD b) 8.2

52-Wk Range (INR) 1309 / 785

1, 6, 12 Rel Perf (%) 5 / -10 / -10



Net Int. Income 17,241 20,073 21,403 21,461 21,799 80,177 95,633

% Change (Y-o-Y) 13.9 24.3 23.5 26.2 26.4 22.2 19.3

Other Income 11,679 12,349 14,298 15,876 13,355 54,202 65,224

Net Income 28,920 32,422 35,701 37,337 35,154 134,380 160,857

Operating Exp. 13,335 14,665 15,109 16,962 15,517 60,071 71,341

Operating Profit 15,585 17,756 20,592 20,376 19,637 74,309 89,516

% Change (Y-o-Y) 7.5 19.5 24.2 11.9 26.0 15.8 20.5

Other Provisions 1,758 4,056 4,223 1,393 2,588 11,430 17,297

Net Profit 9,424 9,203 11,023 12,773 11,535 42,422 48,748

% Change (Y-o-Y) 27.0 25.2 23.7 25.2 22.4 25.2 14.9

Loan Growth (%) 21.4 26.7 20.4 19.2 29.8 19.2 20.0

NIM (%) 3.3 3.8 3.8 3.6 3.4 3.6 3.6

GNPA (on cust. assets, %) 1.1 1.1 1.1 0.9 1.1 0.9 1.6

E: MOSL Estimates

29August 27 - 31, 2012


Axis Bank: Financials and valuation


Y/E March 2011 2012 2013E 2014E

Interest Income 151,548 219,946 270,186 311,278

Interest Expense 85,918 139,769 174,553 197,753

Net Interest Income 65,630 80,177 95,633 113,525

Change (%) 31.1 22.2 19.3 18.7

Non Interest Income 46,321 54,202 65,224 78,891

Net Income 111,951 134,380 160,857 192,417

Change (%) 25.1 20.0 19.7 19.6

Operating Expenses 47,794 60,071 71,341 85,232

Pre Provision Profits 64,157 74,309 89,516 107,185

Change (%) 22.4 15.8 20.5 19.7

Provisions (excl tax) 12,800 11,430 17,297 24,143

PBT 51,357 62,878 72,219 83,041

Tax 17,472 20,456 23,471 26,988

Tax Rate (%) 34.0 32.5 32.5 32.5

PAT 33,885 42,422 48,748 56,053

Change (%) 34.8 25.2 14.9 15.0

Equity Dividend (Incl tax) 6,704 7,701 8,840 10,165

Core PPP* 57,241 70,662 84,119 100,538

Change (%) 32.2 23.4 19.0 19.5

*Core PPP is (NII+Fee income-Opex)


Y/E March 2011 2012 2013E 2014E


Reserves & Surplus 185,883 223,953 265,145 312,510

Net Worth 189,988 228,085 269,398 316,763

Deposits 1,892,378 2,201,043 2,597,231 3,116,677

Change (%) 33.9 16.3 18.0 20.0

of which CASA Dep 777,674 914,220 1,037,433 1,203,178

Change (%) 17.8 17.6 13.5 16.0

Borrowings 262,679 340,717 390,301 445,762

Other Liabilities & Prov. 82,089 86,433 101,586 118,943

Total Liabilities 2,427,134 2,856,278 3,358,516 3,998,145

Current Assets 214,087 139,339 192,694 214,539

Investments 719,916 931,921 1,025,113 1,178,880

Change (%) 28.6 29.4 10.0 15.0

Loans 1,424,078 1,697,595 2,037,114 2,485,280

Change (%) 36.5 19.2 20.0 22.0

Fixed Assets 22,731 22,593 22,558 22,202

Other Assets 46,321 64,829 81,037 97,244

Total Assets 2,427,134 2,856,278 3,358,516 3,998,145

Asset Quality (%)

GNPA (INR m) 15,994 18,063 33,244 51,618

NNPA (INR m) 4,104 4,726 10,724 15,406

GNPA Ratio 1.11 1.06 1.61 2.05

NNPA Ratio 0.29 0.28 0.53 0.62

PCR (Excl Tech. write off) 74.2 73.3 67.7 70.2

PCR (Incl Tech. Write off) 80.9 80.9 73.1 73.6

E: MOSL Estimates

Ratios

Y/E March 2011 2012 2013E 2014E

Spreads Analysis (%)

Avg. Yield-Earning Assets 7.8 9.0 9.4 9.1

Avg. Yield on loans 8.4 9.9 10.3 9.9

Avg. Yield on Investments 6.9 7.7 7.6 7.6

Avg. Cost-Int. Bear. Liab. 4.6 6.0 6.3 6.0

Avg. Cost of Deposits 4.5 6.0 6.4 6.0

Interest Spread 3.2 3.1 3.1 3.1

Net Interest Margin 3.4 3.3 3.3 3.3


RoE 19.3 20.3 19.6 19.1

RoA 1.6 1.6 1.6 1.5

Int. Expense/Int.Income 56.7 63.5 64.6 63.5

Fee Income/Net Income 26.1 28.2 29.4 29.8

Non Int. Inc./Net Income 41.4 40.3 40.5 41.0

Efficiency Ratios (%)

Cost/Income* 42.7 44.7 44.4 44.3

Empl. Cost/Op. Exps. 33.8 34.6 34.4 34.6

Busi. per Empl. (INR m) 120.1 124.0 125.3 130.9

NP per Empl. (INR lac) 1.4 1.5 1.4 1.4

* ex treasury

Asset-Liability Profile (%)

Loans/Deposit Ratio 75.3 77.1 78.4 79.7

CASA Ratio 41.1 41.5 39.9 38.6

Investment/Deposit Ratio 38.0 42.3 39.5 37.8

G-Sec/Investment Ratio 61.3 62.7 63.3 66.1

CAR 12.7 13.7 13.0 12.2

Tier 1 9.4 9.5 9.4 9.1

Valuation

Book Value (INR) 463.1 547.4 629.0 740.4

Change (%) 16.9 18.2 14.9 17.7

Price-BV (x) 2.0 1.8 1.5

Adjusted BV (INR) 456.6 540.0 612.6 716.8

Price-ABV (x) 2.1 1.8 1.5

EPS (INR) 82.5 102.7 114.6 131.8

Change (%) 33.0 24.4 11.6 15.0

Price-Earnings (x) 10.8 9.7 8.4

Dividend Per Share (INR) 14.0 16.0 17.8 20.4


August 27 - 31, 2012 30


Company descriptionBajaj Auto (BJAUT), the flagship company of the Bajaj

group, is India's leading manufacturer of two-wheelers

(~88% of sales volume mix) and three-wheelers

(balance 12% of volume mix).

BJAUT is the leader in India's three-wheeler market,

and the second largest player in motorcycles, where it

enjoys leadership in the premium segment. It is also

the largest exporter of two- and three-wheelers

(exports account for 36% of its volumes).

Key investment positives Well-diversified product/market mix with both

presence in both two- and three-wheelers, and both

domestic and export markets. Its exposure to

domestic <125cc segment, where competitive

intensity is set to increase, is only ~26%.

Prime beneficiary of uptrading, over the longer

term, with rise in customers' income and aspiration

levels helped by its leadership in premium

motorcycle segment.

Exports, which are scaling up rapidly to ~40% in FY13,

should benefit from alliance with Kawasaki (market

access) and KTM (access to technology & markets).

Renewed strategy with focus on more profitable

Pulsar & Discover brands would sustain high margin.

Significant free cash flow generation coupled with

limited capex would help sustain dividend payout

at higher levels (~49% in FY12).

Bajaj Auto

Key challenges Increasing competitive intensity in the domestic

two-wheeler market could restrict pricing power.

Strengthening of commodity prices tends to put

pressure on margins.

Key news flows / triggers to watch Scale-up of recent launches - Pulsar 200NS and

Discover 125ST would be critical for growth.

Response to Honda's recently launched 110cc DreamYuga (first mass motorcycle) needs to be watched.

Recovery in key export markets of SL & Egypt.

Weak INR would support margins. While FY13 is

largely hedged with peak realization of INR50/USD,

it would get good rates for FY14 hedges, which

would support FY14 margins.

1QFY13 highlights; guidance for FY13, FY14 1QFY13 volumes de-grew 1% YoY (+6% QoQ) to

1.08m. Adverse product/market mix led to

sequential decline (-1.4% QoQ) in realizations.

EBITDA margin declined 190bp QoQ (+10bp YoY) to

17.9% (v/s est 18.7%), impacted by adverse mix of

product (lower 3W volumes) & market (lower

exports), higher staff cost and higher other

expenses. Higher other income boosted adj PAT to

INR7.2b (- 1% YoY, -5% QoQ).

BJAUT expects exports to recover from August 2012,

resulting in additional three-wheeler sales volume

of 12-13,000/month.



Promoter 50.0 50.0 50.0

Dom. Inst. 9.8 8.4 8.1

Foreign 15.3 16.9 16.3

Others 24.9 24.7 25.6

Stock info

Bloomberg BJAUT IN


CMP (INR) 1,697

Mcap (USD b) 8.8

52-Wk Range (INR) 1839 / 1401

1, 6, 12 Rel Perf (%) 14 / -3 / 12



Net Op. Income 47,063 51,854 49,859 46,514 48,657 195,290 211,738

Change (%) 21.0 19.4 19.4 12.2 3.4 19.1 8.4

EBITDA 8398.4 9754.7 9841.3 9205.5 8,717 37,200 39,323

Change (%) 8.1 (9.0) 15.9 14.6 3.8 17.3 5.7

EBITDA Margin (%) 17.8 18.8 19.7 19.8 17.9 19.0 18.6

Adjusted PAT 7,111 7,898 8,340 7,590 7,184 31,069 31,744

Change (%) 20.5 15.8 25.0 12.3 1.0 (9.7) 2.2


Volumes ('000) 1,093 1,164 1,075 1,017 1,079 4,350 4,685

Realization (INR) 43,066 44,543 46,361 45,729 45,095 44,899 45,196

Gross margin (%) 26.4 27.5 28.5 28.8 27.9 27.8 28.2

E: MOSL Estimates

31August 27 - 31, 2012


Bajaj Auto: Financials and valuation


Y/E March 2011 2012 2013E 2014E

Net Sales 163,981 195,290 211,738 246,132

Change (%) 37.6 19.1 8.4 16.2

EBITDA 31,711 37,200 39,323 49,315

EBITDA Margins (%) 19.3 19.0 18.6 20.0

Depreciation 1,228 1,456 1,466 1,532

Int. & Fin. Charges 17 222 102 13

Other Income 5,765 6,080 7,271 8,909

Non-recurring Exp. -7,246 1,340 0 0

PBT 43,476 40,262 45,027 56,680

Effective Rate (%) 23.2 25.4 29.5 29.5

Adj. PAT 26,150 31,069 31,744 39,959

Change (%) 43.9 18.8 2.2 25.9


Y/E March 2011 2012 2013E 2014E

Share Capital 2,894 2,894 2,894 2,894

Net Worth 49,102 60,411 75,226 96,565

Deferred Tax 297 484 1,160 2,010

Loans 3,252 975 975 975


Net Fixed Assets 14,827 14,817 15,268 16,737

Capital WIP 699 417 1,000 1,000

Investments 47,952 48,828 48,828 48,828

Current Assets 28,726 46,749 65,873 94,345

Inventory 5,473 6,785 7,946 9,258

Sundry Debtors 3,628 4,228 4,891 5,699

Cash & Bank Balances 5,565 16,538 32,862 56,594



Net Current Assets -10,827 -2,192 12,265 32,985



Y/E March 2011 2012 2013E 2014E

Volumes ('000 units) 3,844 4,350 4,685 5,295

Change (%) 34.2 13.1 7.7 13.0

Realisations (INR) 42,883 44,899 45,196 46,484

Change (%) 2.6 4.7 0.7 2.9

INR/USD 46.5 48.0 50.0 52.0

RM Cost (% of sales) 71.9 72.2 71.8 70.7

Ratios

Y/E March 2011 2012 2013E 2014E

EPS (INR) 90.4 107.4 109.7 138.1

EPS growth (%) 43.9 18.8 2.2 25.9

Cash EPS (INR) 94.6 112.4 114.8 143.4


DPS (INR) 40.0 45.0 50.0 55.0

Payout (Incl. Div. Tax) % 51.4 48.7 53.3 46.6

Valuation (x)

P/E 18.7 15.8 15.4 12.2

Cash P/E 17.9 15.0 14.7 11.8

EV/EBITDA 13.8 11.4 10.4 7.8

EV/Sales 2.7 2.2 1.9 1.6

Price to Book Value 10.0 8.1 6.5 5.1

Dividend Yield (%) 2.4 2.7 3.0 3.3


RoE 66.7 56.7 46.8 46.5

RoCE 76.0 73.0 64.8 64.1

Leverage Ratio

Debt/Equity (x) 0.1 0.0 0.0 0.0


Y/E March 2011 2012 2013E 2014E


Interest/Div. Received 3,631 3,261 7,271 8,909

Depreciation & Amort. 1,228 1,456 1,466 1,532


(Inc)/Dec in Working Capital-8,215 797 1,867 3,011


(Inc)/Dec in FA+CWIP -1,678 -1,159 -2,500 -3,000

(Pur)/Sale of Invest. -8,184 -6,557 0 0


Inc. / Dec.in Networth 0 0 0 0

Inc/(Dec) in Debt -1,866 -2,001 0 0

Interest Paid -17 -222 -102 -13

Dividends Paid -6,737 -13,420 -16,928 -18,621


Inc/(Dec) in Cash 1,285.4 9,501 16,324 23,731

Add: Beginning Bal. 1,002 5,565 16,538 32,862

Closing Balance 2,287 15,066 32,862 56,594

August 27 - 31, 2012 32


Bharat Petroleum Corporation

Company descriptionA Fortune 500 company, BPCL has interests in oil refining

and marketing of petroleum products. It is the third

largest refining company in India with a capacity of

12mmtpa at its Mumbai refinery and 9.5mmtpa at Kochi.

BPCL has majority stake (63%) in Numaligarh Refineries,

a 3mmtpa refinery in the north-east. Besides, it has

investments in IGL (22.5% stake) and Petronet LNG

(12.5% stake). BPCL is a public sector undertaking in

which the government of India holds 54.93%.

Key investment positives Earnings contingent on subsidy sharing: BPCL's

profitability continues to be determined by

quantum of under-recoveries and sharing

mechanism, rather than fundamentals. Post de-

regulation and subsidy rationalization, BPCL's

valuations should benefit due to improvements in

(1) earnings quality, (2) RoCE and RoE, (3) cash cycle,

and (4) debt levels.

Bina refinery to boost medium-term growth: BPCL

has 49% stake in the ~INR114b Bina refinery, which

will have a capacity of 6mmtpa. Bina is expected to

ramp-up commercial production going forward.

Expect upside potential in E&P value: BPCL's E&P

portfolio is likely to add substantial value as it

completes its appraisal program and gives out the

certified resource/reserve numbers.

Key challenges Ad hoc subsidy sharing, delays in diesel

deregulation.

Non-commensurate increase in retail fuel prices as

crude price rises leads to under-recoveries for BPCL.

Further, ad-hoc nature of subsidy sharing impacts

profits, even more so on a quarterly basis.

Key news flows / triggers to watch Clarity on certified recoverable reserves from its

E&P blocks in Brazil and Mozambique.

Capacity utilization and GRM performance at its new

6mmtpa Bina refinery.

Subsidy rationalization by the government and de-

control of diesel prices.

Timelines on (1) cash transfer for PDS kerosene,

and (2) limiting of LPG cylinders to households.

1QFY13 highlights; guidance for FY13, FY14 BPCL's net under-recovery in 1QFY13 stood at INR80b

due to (1) absence of any budgetary support from

government, and (2) upstream subsidy sharing at

only 32% (v/s 40% in FY12).

BPCL's 1QFY13 reported GRM stood at USD2.6/bbl

v/s negative GRM reported by HPCL (USD-2.1/bbl)

and IOC (USD-4.8/bbl).

BPCL expects 100% utilization for its JV refinery at

Bina, Madhya Pradesh.



Promoter 55.8 55.8 55.8

Dome. Inst. 18.1 18.8 20.2

Foreign 9.0 8.0 6.8

Others 17.0 17.5 17.2

Stock info

Bloomberg BPCL IN


CMP (INR) 341

Mcap (USD b) 4.4

52-Wk Range (INR) 395 / 230

1, 6, 12 Rel Perf (%) -13 / 13 / -5

Quarterly Performance (INR Billion)


Operating Income 461 423 588 646 545 2,119 2,222

Change (%) 34.7 19.7 60.4 42.9 18.2 39.9 4.9

EBITDA -22 -27 37 51 -82 38 42

Change (%) nm nm 406.3 207.6 nm 13 10

EBITDA Margin (%) -4.7 -6.4 6.3 7.8 -15.0 1.8 1.9

Reported PAT -26 -32 31 40 -88 13 12

Adjusted PAT -26 -32 31 40 -88 13 12

Change (%) nm nm 1575.5 323.8 nm -15.2 -10.3

PAT Margin (%) nm nm 5.3 6.1 nm 0.6 0.5

Key operating Metrics

GRM (USD/bbl) 3.0 1.7 3.5 4.2 2.6 3.2 4.7

Gross under recovery 103 49 76 98 116 326 353

Upstream sharing 34 16 36 43 37 130 140

Oil Bonds 35 0 70 92 0 197 213

Net Under/(Over) reco.34 32 -29 -36 80 00

As a % of Gross 32.6 nm nm nm 68.5 0.0 0.0

E: MOSL Estimates; nm - Not Meaningful

33August 27 - 31, 2012


Bharat Petroleum Corporation: Financials and valuation

Income Statement (Consolidated) (INR Million)

Y/E March 2011 2012 2013E 2014E

Net Sales 1,536,450 2,119,639 2,392,999 2,280,411

Change (%) 24.1 38.0 12.9 -4.7

Finished Gds Purchase 701,497 918,786 1,066,497 986,722

RM & Other exp 692,475 1,030,487 1,173,849 1,167,766

Other operating Exp. 99,865 123,996 94,279 68,340

EBITDA 42,612 46,370 58,375 57,583

% of Net Sales 2.8 2.2 2.4 2.5

Depreciation 18,914 24,108 25,715 27,300

Interest 12,468 22,591 20,582 15,776

Other Income 17,252 16,324 11,517 9,391

PBT 28,483 15,995 23,594 23,898

Tax 11,062 7,482 7,489 7,038

Rate (%) 38.8 46.8 31.7 29.5

Minority Interest 1,071 705 1,005 1,005

PAT 16,350 7,809 15,101 15,856

Adj. PAT 16,350 7,809 15,101 15,856

Change (%) 0.2 -52.2 93.4 5.0


Y/E March 2011 2012 2013E 2014E

Share Capital 7,231 7,231 7,231 7,231

Reserves 146,277 149,434 160,305 172,776

Net Worth 153,508 156,664 167,535 180,007

Minority interest 9,975 10,679 11,684 12,689

Loans 251,855 237,117 207,115 197,217

Deferred Tax 13,074 13,074 12,733 12,392


Gross Fixed Assets 344,851 375,695 459,927 481,870

Less: Depreciation 152,581 176,690 202,405 229,705

Net Fixed Assets 192,269 199,005 257,522 252,165

Capital WIP 82,864 90,000 45,000 45,000

Investments 84,600 96,510 111,510 126,510

Intangibles 3,855 3,855 3,855 3,855

Curr. Assets, L & Adv.

Inventory 182,135 186,953 178,997 169,887

Debtors 28,779 42,576 38,034 35,443

Cash & Bank Balance 7,971 20,174 2,955 9,430

Loans & Advances 86,421 86,356 86,356 86,356

Current Liab. & Prov.

Liabi l i t ies 206,051 278,217 295,725 297,598

Provisions 34,462 29,709 29,469 28,777

Net Current Assets 64,792 28,133 -18,852 -25,258

Less: Miscellaneous exp. 33 33 33 33



Y/E March 2011 2012 2013E 2014E

Exchange rate 45.6 47.9 53.5 52.0

Marketing sales (mmt) 29.1 31.1 32.9 33.5

Refinery throughput (mmt) 21.8 22.9 24.0 24.2

GRM (USD/bbl) 4.5 3.2 4.7 6.0

Singapore GRM (USD/bbl) 5.2 8.2 7.8 8.0

Prem/(disc) -0.7 -5.1 -3.1 -2.0

E: MOSL Estimates

Ratios

Y/E March 2011 2012 2013E 2014E

Basic (INR)

EPS 22.6 10.8 20.9 21.9

Cash EPS 48.8 44.1 56.4 59.7

Book Value 212.3 216.7 231.7 248.9

Dividend 7.0 5.5 5.0 4.0

Payout (incl. Div. Tax.) 39.4 59.6 28.0 21.3

Valuation (x)

P/E 15.1 31.6 16.3 15.6

Cash P/E 7.0 7.7 6.0 5.7

EV / EBITDA 11.8 10.3 7.9 7.8

EV / Sales 0.3 0.2 0.2 0.2

Price / Book Value 1.6 1.6 1.5 1.4

Dividend Yield (%) 2.1 1.6 1.5 1.2


RoE 11.1 5.0 9.3 9.1

RoCE 5.5 5.3 8.0 7.6

Turnover Ratios

Debtors (No. of Days) 7 6 6 6


Leverage Ratio

Debt / Equity (x) 1.6 1.5 1.2 1.1


Y/E March 2011 2012 2013E 2014E


Depreciation 18,914 24,108 25,715 27,300

Interest Paid 12,468 22,591 20,582 15,776


Other operating items -13,028 0 0 0

(Inc)/Dec in Wkg. Capital 13,489 48,863 29,765 12,881

CF from Op. Activity 48,001 104,075 91,827 72,476

(Inc)/Dec in FA & CWIP -43,057 -37,980 -39,232 -21,943

(Pur)/Sale of Investments 38,532 -11,910 -15,000 -15,000



Net Inc / (Dec) in Debt 4,137 -14,738 -30,002 -9,898

Interest paid -13,967 -22,591 -20,582 -15,776

Dividends Paid -6,449 -4,653 -4,230 -3,384

Other Fi. Activities 3,278 0 0 0


Inc / ( Dec) in Cash 30,475 12,203 -17,219 6,475

Cash (incl ST borrowings) -22,504 7,971 20,174 2,955

Closing Balance 7,971 20,174 2,955 9,430

August 27 - 31, 2012 34


Company descriptionBharti Airtel is one of the world's leading providers of

telecom services with significant presence in India,

operations spread over 17 countries of Africa, Sri Lanka

and Bangladesh with an aggregate customer base of

~260m. It is an integrated operator with presence in

wireless, fixed-line and broadband, long distance,

enterprise, and passive infrastructure. It is India's

largest wireless operator with revenue market share

of ~30% and population coverage of 86%.

Key investment positives Bharti continues to consolidate its wireless

leadership in India with wireless subscriber share

of ~20% and revenue share of ~30%.

Well positioned to capture rural growth given deep

coverage and favorable frequency allocation.

Industry consolidation is inevitable given continued

high losses of challengers and stretched balance

sheets across operators.

Key challenges Hyper-competition in the Indian mobile business.

Regulatory uncertainty and significant potential

liability of ~INR400b related to allocated spectrum

if incumbents are required to pay in line with the

announced reserve price of INR28b per MHz for pan-

India spectrum in 1,800MHz band.

High sensitivity to forex and interest rates.

Adverse macro environment in Africa.

Bharti Airtel

Key news flows / triggers to watch 2G spectrum auction mandated by the Supreme

Court is expected to be held in Nov-12. The auction

is expected to set the base price for all future

spectrum payments.

Potential listing of passive infrastructure subsidiary

Bharti Infratel.

Final government decision on spectrum re-farming.

Ramp-up of its 3G subscriber base post recent sharp

tariff cuts introduced by the industry.

1QFY13 highlights; guidance for FY13, FY14 1QFY13 PAT declined 37% YoY and 24% QoQ to

INR7.6b, significantly below estimate of INR10.7b.

Consolidated revenue of INR 193.5b (+ 3.3% QoQ)

was broadly in-line. EBITDA/PAT were 8/29% below

estimates due to 300bp QoQ EBITDA margin

decline. PAT was boosted by INR1.6b forex gain.

India mobile traffic grew 3.7% QoQ and mobile RPM

declined 2.5% QoQ to 42.7p; both in-line.

Africa EBITDA declined 8% QoQ to USD275m (v/s

est flat) on 0.4% QoQ revenue growth (2.7% traffic

growth, 3.1% RPM decline). EBITDA margin declined

200bp QoQ to 25.8%.

Africa business was impacted from higher economic

linkages of economy with Europe, violence in

Nigeria/DRC and increased competition in Ghana.

Net debt increased by INR32.5b QoQ to ~INR683b.

Bharti has guided for capex of USD2-2.2b in India &

SA, and USD900m in Africa.



Promoter 45.7 45.7 45.5

Dom. Inst. 8.4 8.2 8.5

Foreign 39.9 40.0 40.6

Others 6.0 6.2 5.4

Stock info

Bloomberg BHARTI IN


CMP (INR) 262

Mcap (USD b) 17.8

52-Wk Range (INR) 417 / 253

1, 6, 12 Rel Perf (%) -22 / -22 / -39



Revenue 169,749 172,698 184,767 187,294 193,501 714,507 801,736

YoY Change(%) 38.8 13.5 17.3 15.1 14.0 20.2 12.2

EBITDA 57,058 58,151 59,584 62,329 58,487 237,122 244,597

YoY Change(%) 29.3 13.5 19.6 14.4 2.5 18.8 3.2

EBITDA Margin(%) 33.6 33.7 32.2 33.3 30.2 33.2 30.5

Adjusted PAT 12,152 10,270 10,113 10,059 7,622 42,595 28,439

YoY Change(%) -27.7 -38.2 -22.4 -28.2 -37.3 -29.6 -33.2

Key operating metrics

India Mobile

Traffic (B Min) 221 217 219 231 239 889 997

RPM (INR/min) 0.43 0.43 0.45 0.44 0.43 0.44 0.43

Africa

Subscribers (m) 46 48 51 53 56 53 65

ARPU (USD/mon) 7.2 7.3 7.1 6.8 6.5 7.1 6

EBITDA margin (%) 25.2 26.2 26.7 27.8 25.8 26.5 25.9

E: MOSL Estimates

35August 27 - 31, 2012


Bharti Airtel: Financials and valuation


Y/E March 2011 2012 2013E 2014E

Revenues 594,672 714,507 801,736 884,756

Change (%) 42.1 20.2 12.2 10.4

Total Expenses 395,007 477,385 557,138 609,474

EBITDA 199,664 237,122 244,597 275,282

% of Gross Sales 33.6 33.2 30.5 31.1

Depn. & Amortization 102,066 133,680 155,780 162,892

EBIT 97,598 103,442 88,818 112,390

Net finance cost 21,813 38,185 38,559 38,963

Other Income 998 -73 -222 -245

PBT 76,783 65,184 50,037 73,182

Tax 17,790 22,602 21,217 27,654

Rate (%) 23.2 34.7 42.4 37.8

Minority Interest -1,475 -13 381 5,952

Adjusted PAT 60,468 42,595 28,439 39,577


Y/E March 2011 2012 2013E 2014E

Share Capital 18,988 18,988 18,988 18,988

Add. Paid up Capital 56,499 56,499 56,499 56,499

Reserves 412,181 430,626 443,150 476,363

Net Worth 487,668 506,113 518,637 551,850

Loans 616,708 690,232 871,062 970,254

Minority Interest 28,563 27,695 26,409 32,360



Capital Employed 1,179,589 1,274,821 1,476,971 1,617,252

Gross Block 1,599,377 1,776,560 1,928,439 2,037,680

Less : Depreciation 310,634 440,740 517,139 680,037

Net Block 1,288,743 1,335,820 1,411,300 1,357,643

Other Non-Curr. Assets 64,244 86,711 106,505 107,146

Curr. Assets 112,077 148,084 304,832 504,140

Inventories 2,139 1,308 1,341 1,479

Debtors 54,929 63,735 75,675 82,182


Short-term investments 6,968 18,934 93,490 193,490

Other Current Assets 38,466 43,807 51,405 54,068

Curr. Liab. & Prov. 285,475 295,795 345,666 351,678

Creditors 249,737 243,461 297,728 303,465

Other Current Liabilities 35,738 52,334 47,937 48,213

Net Curr. Assets -173,398 -147,710 -40,834 152,462

Appl. of Funds 1,179,589 1,274,821 1,476,970 1,617,252

E: MOSL Estimates

Ratios

Y/E March 2011 2012 2013E 2014E

Basic (INR)

EPS 15.9 11.2 7.5 10.4

Cash EPS 42.8 46.5 48.6 53.4

Book Value 136.1 140.7 143.7 154.0

DPS 1.0 1.1 0.7 1.0

Payout %(Incl.Div.Taxes) 6.3 10.0 10.0 10.0

Valuation (x)

P/E 16.4 23.3 35.0 25.1

Cash P/E 6.1 5.6 5.4 4.9

EV/EBITDA 8.0 6.9 6.9 5.8

EV/Sales 2.7 2.3 2.1 1.8

Price/Book Value 1.9 1.9 1.8 1.7

Dividend Yield (%) 0.4 0.4 0.3 0.4


RoE 12.6 8.1 5.3 7.0

RoCE 8.7 6.2 4.5 5.1

Turnover Ratios


Asset Turnover (x) 0.78 0.65 0.70 0.78

Leverage Ratio

Net Debt/Equity (x) 1.2 1.2 1.3 1.0


Y/E March 2011 2012 2013E 2014E

Op.Profit/(Loss) bef Tax 199,664 237,122 244,597 275,282

Other Income 998 -73 -222 -245

Interest Paid -21,813 -38,185 -38,559 -38,963


(Inc)/Dec in Wkg. Cap. 120,819 -18,280 42,819 -4,344

CF from Op.Activity 261,699 154,854 219,963 204,076

(inc)/Dec in FA + CWIP -848,290 -180,757 -231,260 -109,235



Issue of Shares 9,624 -19,791 -18,641 -74

Inc/(Dec) in Debt 514,810 73,524 180,830 99,192

Other Financing Activities 961 -5,113 -4,508 -3,959

CF from Fin.Activity 525,395 48,620 157,681 95,159

Inc/(Dec) in Cash -15,748 10,725 62,621 90,000

Add: Opening Balance 25,323 9,575 20,300 82,921

Closing Balance 9,575 20,300 82,921 172,921

August 27 - 31, 2012 36


Cairn India

Company descriptionCairn India, an E&P company, listed in January 2007

through an IPO after it spun off from its parent Cairn

Energy Plc. Recently, Cairn Energy sold its majority stake

in Cairn India to Vedanta Group. Cairn has working

interest in 10 E&P blocks. Ravva and Cambay blocks

produce about 40kboepd (Cairn WI ~10kbpd). The

Rajasthan block, which accounts for ~80% of Cairn's

reserves, produced at 167kbpd (Cairn WI ~ 117kbpd) in

1QFY13 and is currently producing at 175kbpd.

Key investment positives Expect ramp-up in production, smooth government

approvals: Resolution of royalty and cess issue has

realigned its economic interests with its JV partner,

ONGC, and the government. Post Vedanta

acquisition, it has ramped up its production from

125 to 175kbpd. Key things to be watch out in near

term are (1) debottlenecking of pipeline, and (2)

production ramp-up. Expect significant free cash

flow as production from Rajasthan ramps up.

Upside from additional exploration: Rajasthan block

is a world-class asset. There remains upside from

current area and additional area to be developed.

Initial success in other exploratory blocks: Of the

current 7 exploration blocks, 3 (2 in KG basin and 1

in Sri Lanka) have already recorded discoveries and

are likely to provide valuation upsides.

Key challenges Smooth approvals for Rajasthan production

ramp-up

Clarity on cash utilization and payment of maiden

dividend.

Key news flows / triggers to watch Debottlenecking of pipeline.

Approvals for further exploration in Rajasthan

block.

Likely special dividend given the comfortable cash

position (net cash at USD2b as on June 30, 2012).

1QFY13 highlights; guidance for FY13, FY14 Rajasthan production averaged 167kbpd in 1QFY13

with exit rate of 175kbpd.

Rajasthan realization stood at USD100/bbl, implying

9.1% discount to Brent price.

Guided capex of USD2b over FY13-14 includes:

(1) USD600m for Rajasthan exploratory activities

(subject to government approvals), (2) USD600m for

Rajasthan development activities (management

hopeful of easy approvals), and (3) USD800m for

other exploratory activities in its exploration blocks.

Ramp-up delayed due to (a) delay in pipeline de-

bottlenecking, and (b) delay in the Aishwarya start

from 2HCY12 to 4QFY13.



Promoter 58.9 58.9 62.2

Dom. Inst. 6.4 7.0 7.3

Foreign 26.9 29.2 7.5

Others 7.9 4.9 23.0

Stock info

Bloomberg CAIR IN


CMP (INR) 334

Mcap (USD b) 11.4

52-Wk Range (INR) 401 / 250

1, 6, 12 Rel Perf (%) 2 / -10 / 15



Operating Income 37 27 31 37 44 131 175

Change (%) 341.7 -1.3 0.0 -0.1 19.6 27.6 33.1

EBITDA 32 21 25 30 35 108 132

Change (%) 390.6 -3.3 -0.7 -5.0 10.0 27 22

EBITDA Margin (%) 85.5 79.3 82.2 81.6 78.7 82.4 75.6

Reported PAT 27 21 23 22 38 93 107

Adjusted PAT 27 8 23 22 38 79 107

Change (%) 868.9 -51.9 12.5 -11.0 40.3 25.3 35.1

PAT Margin (%) 73.4 28.8 73.0 59.9 86.2 60.5 61.4

Key Metrics

Rajasthan (gross) 125.1 125.3 125.1 137.6 167.1 128.3 173.0

Sales - Cairn's Share (kboepd)

Ravva and Cambay 12.1 11.5 11.4 10.9 10.2 11.5 10.2

Rajasthan 87.6 87.7 87.6 96.3 117.0 89.8 121.1

Realiz. (USD/bbl) 103.4 100.0 98.3 106.7 99.3 102.1 92.5

Disc. to Brent (%) 10.5 10.0 8.2 8.7 8.7 9.0 11.0

E: MOSL Estimates

37August 27 - 31, 2012


Cairn India: Financials and valuation


Y/E March 2011 2012 2013E 2014E

Net Sales 102,779 131,130 174,533 180,090

Change (%) 533.3 27.6 33.1 3.2

Change in Stock -264 -263 -180 0

Employee Costs 1,105 861 991 1,139

Operating Costs 16,709 22,475 41,793 53,901

EBITDA 85,228 108,056 131,929 125,050

% of Net Sales 82.9 82.4 75.6 69.4

D,D&A (incl. w/off) -13,596 -17,391 -25,255 -27,668

Interest -2,909 -2,220 -345 0

Other Income 1,288 3,194 4,861 7,378

EBIT 70,011 91,639 111,190 104,761

Forex Fluctuations -1,112 6,148 5,841 0

Exceptional Item 0 -13,552 0 0

PBT 68,899 84,235 117,031 104,761

Tax 5,556 4,857 9,824 12,647

Rate (%) 7.9 5.3 8.8 12.1

PAT 63,343 79,378 107,207 92,113

Adjusted PAT 63,343 92,929 107,207 92,113

Change (%) 502.6 46.7 15.4 -14.1


Y/E March 2011 2012 2013E 2014E

Share Capital 19,019 19,026 19,026 19,026


Net Worth 402,932 464,152 546,826 617,860

Total Loans 26,782 0 0 0

Deferred Tax 5,750 6,876 11,643 9,623


Net Fixed Assets 59,236 61,582 60,678 99,485

Prod. Proper.(net ofdeple.)20,850 54,101 42,329 33,557

Capital WIP 39,819 10,318 51,209 45,963

Goodwil l 253,193 253,193 253,193 253,193

Investments 10,945 18,356 18,356 18,356

Deferred tax assets 138 138 138 138


Inventory 3,277 5,389 7,173 7,401

Debtors 14,829 10,419 11,954 12,335


Loans&Adv. and Other CA 16,655 16,655 16,655 16,655


Liabi l i t ies 12,638 14,370 19,127 19,736

Provisions 16,628 16,628 16,628 16,628


Misc. Expenses 943 943 943 943


Key assumptions/operating metricsExchange rate (USD/INR) 45.6 47.9 53.5 52.0

Brent (USD/bbl) 87 114 105 100

Rajasthan gross prod. (kbpd) 99 128 173 200

Rajasthan net reali. (USD/bbl)76 104 93 88

Disc.(Rajasthan Crude-USD/bbl)12 9 11 13

E: MOSL Estimates

Ratios

Y/E March 2011 2012 2013E 2014E

Basic (INR)

EPS 33.3 41.7 56.3 48.4

Adjusted EPS 33.3 48.8 56.3 48.4

Cash EPS 39.6 49.3 67.0 60.2

Book Value 211.9 244.0 287.4 324.7

Adj. Book Value 78.7 110.9 154.3 191.7

DPS 0.0 8.3 11.3 9.7


Valuation (x)

P/E 8.0 5.9 6.9

Cash P/E 6.8 5.0 5.5

EV / EBITDA 5.3 3.9 3.8

EV / BOE (in USD, 1P basis) 16.5 13.3 12.5

Price / Book Value 1.4 1.2 1.0



RoE 17.1 21.4 21.2 15.8

RoCE 17.9 20.7 21.7 17.7

Turnover Ratios

Debtors (No. of Days) 32 29.0 25.0 25.0

Fixed Asset Turnover (x) 1.5 1.7 2.1 1.3

Leverage Ratio

Net Debt / Equity (x) 0.0 -0.1 -0.2 -0.3


Y/E March 2011 2012 2013E 2014E

Profit /(Loss) before Tax 68,900 84,235 117,031 104,761

Depreciation 12,226 14,403 20,175 22,422

Other op activities 4,860 14,801 10,030 5,246


(Inc)/Dec in Wkg. Capital -10,088 4,031 1,437 0


(Inc)/Dec in FA & CWIP -25,648 -23,488 -53,471 -52,457


Other In activities 903 0 0 0


Change in Equity 670 7 0 0

Inc / (Dec) in Debt -7,255 -26,782 0 0

Other fin, activities -2,071 0 0 0

Dividends Paid 0 -18,165 -24,533 -21,079


Inc / ( Dec) in Cash 5,902 26,086 60,662 44,225


Closing Balance 12,269 38,132 131,595 175,820

Bank deposit adj 32,578 32,802 0 0

Closing Balance 44,847 70,933 131,595 175,820

August 27 - 31, 2012 38


CESC

Company descriptionCESC, an RP Sanjiv Goenka Group Company, is one of

the oldest integrated power utilities in India with

presence in generation, distribution and mining. Its

installed generation capacity stands at 1.2GW and

distribution network encompasses 2.5m consumers in

Kolkata and Howrah region. 1.2GW of generation

projects are under construction and additional 5.9GW

of projects are in pipeline. CESC has presence in retail

business with ~1msf area in operation under the brand

Spencer's.

Key investment positives Assured return from existing generation and

distribution business provides steady cash flow at

INR4b+ p.a.

Recent multi-year tariff order improves visibility on

capex till FY14 and hence, on core profit growth.

CESC has spent INR8.3b towards under construction

projects of 1.2GW and has initiated development

activity for further generation projects of 5.9GW.

Restructuring at Spencer's has led to improvement

in gross margins and reduction in EBITDA losses to

INR1.5b in FY12 v/s INR1.7b in FY11. Store level

EBITDA has further improved to INR42/sft/mth in

1QFY13 v/s INR26 in 1QFY12. Further reduction in

losses / value unlocking would be key positive.

CESC has cash/liquid investment of INR10b, which

along with regulated profit of INR4b pa provides

near term growth capital.

Key risk Continued losses at Spencer's and funding through

standalone cash flows of CESC. Economic slowdown

could have a bearing on revival of Spencer's.

Fuel availability and tariff/structure PPA for balance

(0.8GW) open capacity of the 1.2GW of projects

under construction.

Possible funding gap if the development on Orissa

/ Chattisgarh project has to commence in near term.

Key news flows / triggers to watch Committee of Secretaries (CoS) recommended 51%

FDI in multi-brand retail. Cabinet approval awaited.

Improvement in cash losses at Spencer's and

improvement in store level EBITDA.

Improved visibility return for 1.2GW of project

based on PPA and Fuel sourcing.

1QFY13 highlights; guidance for FY13, FY14 CESC's 1QFY13 PAT stood in-line with estimate.

Store revenue growth and higher store EBITDA for

Spencer was key positive.

Tariff Approval for the period of FY12-14 received

for Kolkata Distribution business; capex of INR19b

over FY12-14E approved; RoE increased by 1.5%.

Consolidation continues at Spencer's with closure

of 19 Small Express Stores. 1QFY13 store level

EBITDA stood at INR42/sft/mth, up from INR26 YoY.

CESC targets to reduce Spencer's cash losses by

INR400m in FY13E.



Promoter 52.5 52.5 52.5

Dom. Inst. 16.0 16.8 18.0

Foreign 18.4 17.9 17.9

Others 13.1 12.9 11.6

Stock info

Bloomberg CESC IN


CMP (INR) 312

Mcap (USD b) 0.7

52-Wk Range (INR) 320 / 186

1, 6, 12 Rel Perf (%) 1 / 11 / -1




Change (%) 7.9 12.3 9.9 57.6 20.0 12.2 14.4

EBITDA 2,671 2,600 2,130 4,320 2,900 11,570 12,426

Change (%) 4.3 -18.2 -15.8 75.6 8.6 7.8 7.4

EBITDA Margin (%) 22.6 21.0 20.6 31.3 20.4 25.2 23.7

Reported PAT 1,111 1,140 740 2,660 1,250 5,500 5,970

Adjusted PAT 1,111 1,140 740 2,510 1,250 5,500 5,970

Change (%) 1.0 -15.6 -32.7 124.1 12.5 17.8 8.5

PAT Margin (%) 9.4 9.2 7.2 18.2 8.8 12.0 11.4


Plant PLF (%) 94.9 91.8 86.5 76.6 96.4 88 92.5

Spencer Area (msf) 0.95 0.99 1.01 1.00 0.97 1.00 1.17

EBITDA(INR/sft/mth)* 26 31 35 n.a. 43 32 n.a.

E: MOSL Estimates; * Spencer Store

39August 27 - 31, 2012


CESC: Financials and valuation


Y/E March 2011 2012 2013E 2014E

Total Revenues 40,942 46,050 52,527 58,139

EBITDA 10,047 10,822 11,706 12,352

% of Total Revenues 24.5 23.5 22.3 21.2

Depreciation 2,674 2,900 3,171 3,323

Interest 2,755 2,758 2,982 3,044

Other Income 1,524 1,769 1,914 2,348

PBT 6,142 6,933 7,467 8,333

Tax 1,259 1,390 1,497 1,671

Rate (%) 20.5 20.0 20.0 20.0

Reported PAT 4,870 5,543 5,970 6,662

Adjusted PAT 4,670 5,543 5,970 6,662

Change (%) 7.8 18.7 7.7 11.6

Excl Spencers; fully diluted


Y/E March 2011 2012 2013E 2014E

Share Capital 1,256 1,256 1,256 1,256

Reserves and Surplus 41,787 47,304 52,558 58,505

Revaluations Reserves 12,650 11,558 10,980 10,431

Share Holder Funds 55,692 60,118 64,794 70,191

LT Borrowings 21,529 21,671 26,904 29,781

Advance against Depn. 5,143 5,660 5,660 5,660

Consumer Security Dep. 9,355 10,509 11,034 11,586

Other LT Liabilities 7,423 7,997 7,997 7,997

LT Provisions 673 893 982 1,080

Non Current Liabilities 44,122 46,730 52,577 56,104

ST Borrowings 4,897 4,328 3,895 3,505

Trade Payables 2,803 2,910 3,515 3,890

Other Current Liabilities 9,084 12,305 13,223 14,029

Current Liabilities 17,506 20,427 21,641 22,541

Total Equity & Liab. 117,321 127,274 139,012 148,836

Fixed Assets 77,355 80,915 83,700 86,843

Non Current Investments 8,543 10,482 13,583 16,783

Non Current Assets 86,855 92,142 98,028 104,372

Current Investments 2,300 850 850 850

Inventories 2,944 2,947 3,137 2,965

Trade Receivables 5,589 9,770 10,619 10,578


ST Loan and Advances 10,908 12,215 13,415 14,415

Other Current Assets 336 752 857 949

Current Assets 30,466 35,132 40,984 44,464

Total Assets 117,321 127,274 139,012 148,836


Y/E March 2011 2012 2013E 2014E

Capex 5,500 6,238 6,603 6,466

Regulated Equity 23,303 24,834 27,379 29,602

Infra Investments 7,161 8,261 11,312 14,412

Spencer Investments 10,029 11,093 12,293 13,293

Installed Capacity (MW) 1,225 1,225 1,225 1,825

Ratios

Y/E March 2011 2012 2013E 2014E

Basic (INR)

EPS * 38.9 44.1 47.5 53.0

CEPS 60.2 67.2 72.8 79.5

Book Value 342.7 386.6 428.5 475.8

DPS 4.0 5.0 5.0 5.0


Valuation (x)

P/E 8.0 7.1 6.6 5.9

EV/EBITDA 5.5 5.2 4.9 4.6

EV/Sales 1.3 1.2 1.1 1.0


Dividend Yield (%) 1.3 1.6 1.6 1.6


RoE 11.3 12.1 11.7 11.7

RoCE 10.2 10.6 10.4 10.2

Turnover Ratios


Inventory (Days) 86 67 61 55


Leverage Ratio

Debt/Equity (x) 0.6 0.5 0.6 0.6


2011 2012 2013E 2014E

PBT before EO Items 6,142 6,933 7,467 8,333

Add: Depreciation 2,674 2,900 3,171 3,323

Interest 2,755 2,758 2,982 3,044

Less : Direct Taxes Paid 1,259 1,390 1,497 1,671

(Inc)/Dec in WC -832 -1,336 -2,467 -2,445

CF from Operations 9,480 9,865 9,656 10,584

CF from Op. incl EOI 9,480 9,865 9,656 10,584

(Inc)/dec in FA -5,070 -3,561 -2,785 -3,143

(Pur)/Sale of Investments -4,058 -1,939 -3,102 -3,200


(Inc)/Dec in Net Worth -557 -690 0 0

(Inc)/Dec in Debt 2,039 -1,174 -5,233 -2,876

(Inc)/Dec in Custo. Secu. Dep.390 -1,154 -525 -552

Less: Interest Paid 2,755 2,758 2,982 3,044

Dividend Paid 581 716 716 716

CF from Fin. Activity -3,163 -4,156 -263 -1,639

Inc/Dec of Cash -2,810 210 3,507 2,602


Closing Balance 8,388 8,598 12,105 14,707

August 27 - 31, 2012 40


Company description D B Corp (DBCL), one of the largest print media

companies of India, publishes 8 newspapers with

65 editions and 199 sub editions in 4 languages

(Hindi, Gujarati, English and Marathi) across 13 states

in India.

Flagship newspapers Dainik Bhaskar (in Hindi)

established in 1958, Divya Bhaskar and Saurashtra

Samachar (in Gujarati) have a combined readership

of ~19 million.

Other business interests include (1) the radio

segment through the brand "My FM" Radio station

with presence in 7 states and 17 cities, and (2) a

strong online presence in internet portals.

Key investment positives DBCL is the only media conglomerate to enjoy

leadership position in multiple states, in multiple

languages. It is a dominant player in all its major

markets.

EBITDA margin in mature editions remains healthy

at ~30% despite significant slowdown in ad

revenues led by lower GDP growth.

With most of the launches related to Maharashtra

entry already through, we expect EBITDA loss in

emerging editions to peak out and start reversing.

While national advertising remains under pressure,

local growth has continued to be strong.

Relatively lower average cover price at INR2.5 for

DB Corp acts as a competitive barrier.

Key challenges Lower ad spends led by macro slowdown.

Newsprint cost inflation; INR depreciation resulting

in higher cost of newsprint.

EBITDA losses in emerging editions.

Key news flows / triggers to watch Break-even of Jharkhand and Maharashtra business.

Improvement in macro factors.

Potential moderation in the newsprint prices.

1QFY13 highlights; guidance for FY13, FY14 Revenue improved 7% YoY and 5% QoQ to INR3.77b.

Ad revenue remained flat YoY at INR2.7b; Circulation

revenue grew 15% YoY to INR656m.

EBITDA declined 24% YoY to INR765m, primarily due

to sluggish revenue growth.

EBITDA margin declined ~800bp YoY to 20.3%.

PAT declined 29% YoY to INR437m.

Raw material cost as a percentage of revenue

increased ~200bp QoQ to 35.3%. Newsprint costs

increased by ~13% YoY led by ~6% increase in

volumes as well as pricing.

Management expects newsprint tonnage growth to

be in low single digits in FY13.



Promoter 81.5 86.4 86.5

Dom. Inst. 6.3 4.7 3.5

Foreign 8.2 4.9 8.7

Others 4.0 4.0 1.3

Stock info

Bloomberg DBCL IN


CMP (INR) 187

Mcap (USD b) 0.6

52-Wk Range (INR) 253 / 170

1, 6, 12 Rel Perf (%) -12 / -6 / -31

DB Corp


Y/E March Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 FY12

Revenue 3,537 3,539 3,956 3,606 3,770 14,638

YoY Change (%) 18.4 17.6 13.6 13.6 6.6 15.7

EBITDA 1,003 771 1,018 757 765 3,550

YoY Change(%) -11.7 -18.9 -11.3 -4.9 -23.8 -11.9

EBITDA Margin (%) 28.4 21.8 25.7 21.0 20.3 24.3

Adjusted PAT 611 403 554 454 437 2,021

YoY Change (%) -12.1 -26.9 -16.1 0.8 -28.5 -11.9

PAT Margin (%) 17.3 11.4 14.0 12.6 11.6 13.8


Ad growth (%) 20.3 15.6 8.2 5.4 -0.2 12.1

Circulation revenue growth (%) 5.8 13.0 17.0 16.1 15.5 12.9

RM cost (INR b) 1.2 1.2 1.4 1.3 1.3 5.1

YoY (%) 42.3 38.2 26.9 24.9 12.5 32.3

% of revenue 33.5 35.2 34.1 36.1 35.3 34.7

E: MOSL Estimates

41August 27 - 31, 2012


DB Corp: Financials and valuation


Y/E March 2009 2010 2011 2012

Net Sales 9,610 10,630 12,652 14,638

YoY (%) 11.4 10.6 19.0 15.7

Operating expenses 8,137 7,200 8,621 11,088

Printing and other exp 4,075 3,279 3,839 5,080

Employee Cost 1,331 1,318 1,846 2,429

Administrative exp 2,731 2,604 2,937 3,579

EBITDA 1,473 3,429 4,031 3,550

EBITDA margin (%) 15.3 32.3 31.9 24.3

Depreciation 290 378 433 506

Interest 510 357 153 155

Other Income 109 112 123 115

PBT 781 2,806 3,569 3,004

Tax 423 1,057 1,273 982

Tax rate (%) 54.2 37.7 35.7 32.7

PAT 358 1,749 2,296 2,022

Minority Interest -118 -79 3 2

Adjusted PAT 476 1,828 2,293 2,021

Change (%) -37 284 25 -12

Extra-ordinary items 0 0 273 0

Reported PAT 476 1,828 2,566 2,021


Y/E March 2009 2010 2011 2012

Share Capital 1,688 1,828 1,862 1,862

Share Premium 0 2,366 2,373 2,373

Reserves 889 2,293 4,054 5,356

Net Worth 2,577 6,487 8,289 9,590

Loans 5,631 3,207 2,372 2,130

Minority Interest 124 44 4 15

Deffered Tax Liability 393 609 695 746



Less: Depreciation 932 1,305 1,729 2,235

Net Fixed Assets 3,763 5,861 6,678 7,252

Capital WIP 2,708 614 680 681

Investments 238 205 163 460

Curr. Assets 3,988 5,614 5,918 6,945

Inventory 711 722 728 1,186

Debtors 1,774 1,934 2,401 2,481

Cash & Bank Balance 452 1,951 1,731 1,884

Loans & Advances 1,052 1,008 1,058 1,394


Creditors 1,817 1,706 1,648 2,442

Provisions and other Liab. 372 367 541 520


Miscellanous exp 217 126 110 106


E: MOSL Estimates

Ratios

Y/E March 2009 2010 2011 2012

Basic (INR)

Adjusted EPS 2.8 10.1 12.6 11.0

Growth (%) -37.3 257.0 24.8 -12.3

Cash EPS 4.5 12.2 14.9 13.8

Book Value 16.0 36.0 45.5 52.4

DPS 0.5 2.0 4.0 4.0

Payout (incl. Div. Tax.) (%) 21 23 37 42

Valuation

P/E 65.8 18.4 14.8 16.8

Cash P/E 40.9 15.3 12.4 13.5

EV/EBITDA 24.8 10.2 8.6 9.6

EV/Sales 3.8 3.3 2.7 2.3


Dividend Yield (%) 0.3 1.1 2.2 2.2


RoE 18.5 39.6 30.9 22.6

RoCE 9.2 20.7 24.6 17.8

Turnover Ratios



Creditors. (Days) 82 86 70 80


Leverage Ratio

Debt/Equity (x) 2.1 0.5 0.3 0.2


Y/E March 2009 2010 2011 2012

EBITDA 1,473 3,429 4,305 3,550

Other Income 109 112 123 115

Interest Paid -510 -357 -153 -155

Direct Taxes Paid -377 -841 -1,187 -931

(Inc)/Dec in Wkg. Cap. 161 -153 -346 37

CF from Op.Activity 856 2,190 2,741 2,616

(inc)/Dec in FA + CWIP -3,138 -382 -1,316 -1,080

(Pur)/Sale of Investments -170 33 42 -297

CF from Inv.Activity -3,308 -350 -1,274 -1,378

Issue of Shares 0 2,506 41 0

Inc/(Dec) in Debt 2,195 -2,424 -835 -242

Dividends Paid -99 -424 -849 -854

Other Financing Activities 0 0 -43 10

CF from Fin.Activity 2,096 -341 -1,687 -1,085

Inc/(Dec) in Cash -356 1,499 -220 153

Add: Opening Balance 808 452 1,951 1,731

Closing Balance 452 1,951 1,730 1,884

August 27 - 31, 2012 42


Company descriptionDewan Housing Finance (DEWH) focuses on providing

housing loans to low and middle income households in

rural and semi-urban areas. It scores higher in terms of

competitive pricing from money lenders and co-

operative banks. As on June 2012, DEWH was present

across 450+ locations at a group level and has

consolidated AUM of ~INR290b.

Key investment positives With the acquisition of DPHFL (now renamed as First

Blue Housing Finance Ltd.), DEWH is present across

the spectrum in the housing finance market right

from the low-end consumer to the affluent class. It

is growing at a rapid pace and grabbing market share

across segments.

DEWH has been maintaining high standards in asset

quality despite being present in low and middle

income group. As on June 2012, its %GNPA was only

90bp and %NNPA at 13bp. While sharp rise in

interest rates and strong growth in the near term

raises concerns over asset quality, impeccable asset

quality track record across cycles provides comfort.

DEWH has historically maintained its margins in a

narrow band of 2.8-3.0%. While margins remained

under pressure in FY12 due to steep increase in

interest rates, management expects to maintain

margins in the similar band going forward.

DEWH targets to increase the share of high yielding

projects loans (currently at ~6% levels), which would

augur well from the margin perspective for the

company.

Key challenges With standalone debt / equity of more than 9x, the

company may have to raise capital in near future.

However, uncertain market conditions may act as a

deterrent, thereby affecting growth.

Banks and other NBFCs getting aggressive in the

housing finance space may check DEWH's rapid

growth trajectory.

Key news flows / triggers to watch Interest rates have peaked, and rate cut by the RBI,

if any, would augur well for DEWH.

High Court and other approvals for First Blue merger.

1QFY13 highlights; guidance for FY13, FY14 DEWH's 1QFY13 PAT grew 18% YoY and 13% QoQ, in-

line with estimates.

Loans grew strongly by 39% YoY and 10% QoQ,

reported margins remained largely stable

sequentially at ~2.8% levels.

GNPAs in absolute terms increased 50% QoQ,

seasonal in nature. PCR remained healthy at 86%.

For FY13, the management expects loan growth of

25-30%, margins to remain stable at 2.8-3.0%, and

asset quality also to remain healthy.



Promoter 35.2 35.2 39.3

Dom. Inst. 1.0 0.8 8.7

Foreign 42.3 43.7 34.3

Others 21.6 20.2 17.7

Stock info

Bloomberg DEWH IN


CMP (INR) 162

Mcap (USD b) 0.3

52-Wk Range (INR) 279 / 142

1, 6, 12 Rel Perf (%) -7 / -34 / -25

Dewan Housing Finance

Quarterly Performance (Standalone) (INR Million)


Net Interest Income 4,972 5,886 6,615 7,205 7,385 3,816 6,747

YoY Gr. (%) 66.6 78.2 71.3 65.8 48.5 28.6 76.8

Operating Profit 907 983 1,138 1,193 1,196 3,936 5,907

YoY Gr. (%) 36.1 27.0 40.4 36.4 31.9 24.9 50.1

Provisions 33 116 150 (62) 150 237 582

PBT 874 867 988 1,255 1,046 3,984 5,325

Tax 216 148 238 317 268 920 1,385

Profit after Tax 658 719 750 938 778 3,064 3,941

YoY Gr. (%) 28.4 23.9 21.4 59.9 18.2 15.6 28.6

Key Operating Metrics

Loan Gr. (%) 56.7 50.7 49.8 37.2 39.5 37.2 44.6

Borrowings Gr. (%) 55.9 61.7 50.8 28.9 38.6 28.9 47.6

Cost to Inc. Ratio (%) 34.2 38.5 37.8 40.3 36.0 38.7 35.4

E: MOSL Estimates

43August 27 - 31, 2012


Dewan Housing Finance: Financials and valuation


Y/E March 2011 2012 2013E 2014E

Operating Income 18,456 28,633 38,829 51,015

Interest Expended 13,901 23,496 29,966 39,354


Change (%) 35.1 28.6 76.8 35.9

Fee Income 1,495 2,395 1,834 1,981

Treasury Income 987 610 1,250 1,350

Other Income 90 275 211 232

Net Income 7,126 8,418 12,158 15,225

Change (%) 48.2 34.3 42.4 28.3


Operating Profits 4,564 5,069 7,536 9,644

Change (%) 49.5 24.9 50.1 30.2

Provisions 214 463 764 1,231

% of average loans 0.15 0.20 0.25 0.30

Extra ordinary Income 354 250 0 0

PBT 4,705 4,857 6,772 8,412

Tax 1,131 1,304 1,961 2,414

Tax Rate (%) 24.0 26.9 29.0 28.7

Reported PAT 3,574 3,553 4,811 5,998

Change (%) 125.6 -0.6 35.4 24.7

Adjusted PAT 3,220 3,303 4,811 5,998

Change (%) 103.3 2.6 45.7 24.7


PAT Post MI 2,937 2,987 4,408 5,507

Change (%) 89.5 1.7 47.6 25.0

Proposed Dividend 521 478 692 865

Balance Sheet (Consolidated) (INR Million)

Y/E March 2011 2012 2013E 2014E

Share Capital 1,044 1,168 1,168 1,168


Net Worth (Excl Pref sh) 15,556 20,215 24,032 28,800

Borrowings 206,897 246,717 348,180 456,850

Change (%) 122.3 19.2 41.1 31.2

Total Liabilities 224,978 268,859 374,543 488,473

Investments 6,877 2,141 5,228 7,800

Change (%) 562.7 -46.8 65.5 32.7

Loans 199,304 254,694 352,656 461,783

Change (%) 117.1 27.8 38.5 34.0

Net Fixed Assets 2,354 2,582 2,680 2,765

Goodwil l 3,452 3,495 3,150 2,805


Total Assets 224,978 268,859 374,543 488,473

E: MOSL Estimates

Ratios (Consolidated)

Y/E March 2011 2012 2013E 2014E


Avg. Yield - Housing loans 12.7 12.6 12.8 12.5

Avg. Cost of Funds 9.3 10.4 10.1 9.8

Int. Spread on Hsg. loans 3.4 2.3 2.7 2.8



RoAE 26.7 18.5 21.7 22.7

RoAA 2.0 1.3 1.5 1.4

Int. Expended/Int.Earned 75.3 82.1 77.2 77.1

Other Inc./Net Income 36.1 39.0 27.1 23.4


Fees/Operating income 32.7 47.2 24.3 20.5

Op. Exps./Net Income 35.9 39.8 38.0 36.7

Empl. Cost/Op. Exps. 39.9 35.5 34.3 34.9

Valuations (Consolidated)

Book Value (INR) 149.0 173.0 205.7 246.5

Price-BV (x) 0.9 0.8 0.7

Adjusted BV (INR)* 115.9 143.1 178.7 222.5

Price-ABV (x) 1.1 0.9 0.7

OPS (INR) 43.7 43.4 64.5 82.5

Price-OP (x) 3.7 2.5 2.0

EPS (INR) 28.1 25.6 37.7 51.3

Growth (%) 48.8 -9.1 47.6 36.1


Dividend Per Share 3.5 3.5 5.1 6.3


E: MOSL Estimates * Adj. for Goodwill

August 27 - 31, 2012 44




Promoter 64.8 64.8 64.8

Dom. Inst. 5.0 5.4 6.2

Foreign 23.4 22.4 22.3

Others 6.9 7.4 6.7

Stock info

Bloomberg DITV IN


CMP (INR) 73

Mcap (USD b) 1.4


1, 6, 12 Rel Perf (%) 2 / 12 / -20

Dish TV

Company descriptionDish TV is Asia Pacific's largest direct-to-home (DTH)

company and part of the Zee Group. Dish TV has on its

platform more than 400 channels & services with 13.4m

gross subscribers and 9.7m net subscribers as of June

30, 2012. The company has a vast distribution network

of over 1,400 distributors and over 90,000 dealers that

span across 8,000+ towns in India.

Key investment positives Leader in high growth DTH segment.

We expect 28% EBITDA CAGR for Dish TV over FY12-

14 led by 18% subscriber CAGR and 4% ARPU CAGR.

DTH subscriber additions to get boosted by demand

from subscribers expected to transition from analog

systems led by mandatory digitization.

Mandatory digitization to result in addressability of

subscribers leading to higher costs of content as

well as taxes for cable networks. Potential increase

in cable ARPU can drive ARPU enhancement for DTH

operators like Dish as well.

Key challenges Increase in churn rate for the industry.

INR depreciation resulting in higher cost of STB.

Potential increase in competitive intensity in

markets where digitization is being mandated.

Possible postponement of digitization deadline.

Key news flows / triggers to watch Successful implementation of mandatory

digitization.

Contract renegotiations with content providers.

Potential increase in subscriber additions in the

festive season.

Competitive discipline post "mandatory

digitization" would be key towards achievement of

continued ARPU up-tick.

Sustenance of current EBITDA margin of ~30%.

1QFY13 highlights; guidance for FY13, FY14 Dish TV's 1QFY13 EBITDA grew 39% YoY and 8% QoQ

to INR1.56b (v/s estimate of INR1.37b).

While overall revenue declined 1% QoQ to INR5.2b

due to change in lease rental accounting, EBITDA

growth was driven by opex decline.

EBITDA margin improved 250bp QoQ to 29.9%.

EBITDA ex lease rental grew 40% QoQ.

Net loss for the quarter increased 77% YoY but

declined 34% QoQ to INR323m despite higher forex

loss (INR140m v/s INR65m in 4QFY12).

Subs revenue grew 5% QoQ to INR4.6b led by 3%

increase in net sub base to 9.8m and 3% increase in

ARPU to INR156 (highlight of the quarter).

Gross subscriber adds at 0.5m increased 20% QoQ

but was 30% lower YoY. Churn rate (based on net

subscribers) remained steady at 1% per month.



Revenue 4,604 4,822 4,905 5,247 5,200 19,578 22,622

YoY Change(%) 51.3 47.8 31.4 21.2 12.9 36.3 15.5

EBITDA 1,122 1,217 1,202 1,442 1,556 4,984 6,296

YoY Change(%) 248.5 144.5 80.2 59.9 38.7 108.7 26.3

EBITDA Margin(%) 24.4 25.2 24.5 27.5 29.9 25.5 27.8

Adjusted PAT -183 -487 -430 -490 -324 -1,588 -653

YoY Change(%) -71.0 7.7 -3.0 32.4 76.8 -16.3 -58.9

PAT Margin(%) -4.0 -10.1 -8.8 -9.3 -6.2 -8.1 -2.9


Gross adds (m) 0.7 0.6 0.7 0.4 0.5 2.5 3.0

Net subs (m) 8.9 9.2 9.5 9.6 9.8 9.6 11.3

Net adds (m) 0.4 0.3 0.3 0.2 0.2 1.1 1.7

ARPU (INR/month) 150 152 152 151 156 153 157

Monthly churn (%) 1.1 1.2 1.6 0.9 1.0 1.2 1.0

E: MOSL Estimates

45August 27 - 31, 2012


Dish TV: Financials and valuation


Y/E March 2011 2012 2013E 2014E

Net Sales 14,366 19,578 22,622 28,197

YoY (%) 32.4 36.3 15.5 24.6


Cost of goods and services 7,803 9,960 11,182 13,557

Employee Cost 566 709 833 983

Selling & distribution exps 2,847 2,909 3,371 4,449

Administrative exps 761 1,016 940 994

EBITDA 2,388 4,984 6,296 8,213

EBITDA margin (%) 16.6 25.5 27.8 29.1

Depreciation 3,654 5,180 5,939 7,024

Interest 1,511 1,778 1,442 1,426

Other Income 880 386 432 550

PBT -1,897 -1,588 -653 314

Adjusted PAT -1,897 -1,588 -653 314

Change (%) -27.6 -16.3 NA -148.0

Reported PAT -1,897 -1,588 -653 314


Y/E March 2011 2012 2013E 2014E

Share Capital 1,063 1,064 1,064 1,064

Share Premium 15,314 15,314 15,314 15,314

Reserves -15,750 -17,316 -17,969 -17,655

Net Worth 628 -938 -1,592 -1,278

Loans 10,763 12,144 12,208 14,303




Net Fixed Assets 13,637 14,605 17,118 20,699

Capital WIP 4,580 3,483 3,500 3,500

Investments 2,002 1,500 1,500 1,500

Curr. Assets 6,649 6,752 7,083 9,318

Inventory 44 69 79 99

Debtors 215 286 331 412


Loans & Advances 3,188 2,546 2,673 2,807


Creditors 12,471 10,136 12,712 15,060

Provisions & other liab. 3,007 4,999 5,873 6,931

Net Current Assets -8,829 -8,382 -11,502 -12,673



Gross subscribers (m) 10 13 16 20

YoY (%) 51 24 23 25

Gross adds (m) 3.5 2.5 3.0 4.0

YoY (%) 93 -30 22 33

Net subscribers (m) 8.5 9.6 11.3 13.7

YoY (%) 50 13 18 21

Net adds (m) 2.8 1.1 1.7 2.4

YoY (%) 106 -60 51 40

E: MOSL Estimates

Ratios

Y/E March 2011 2012 2013E 2014E

Basic (INR)

Adjusted EPS -1.8 -1.5 -0.6 0.3

Growth (%) -44.1 -16.3 -58.9 -148.0

Cash EPS 1.7 3.4 5.0 6.9

Book Value 0.6 -0.9 -1.5 -1.2

Valuation

P/E NA NA 247.2

Cash P/E 21.6 14.7 10.6

EV/EBITDA 16.9 13.4 10.3

EV/EBITDA (ex. lease rent.) 30.4 19.7 14.6

EV/Sales 4.3 3.7 3.0

Price/Book Value NA NA NA

EV/net subscriber (INR) 8,751 7,428 6,141

EV/net subscriber (USD) 159 135 111


RoE NA NA NA NA

RoCE NA NA 2.5 10.4

Turnover Ratios



Creditors. (Days) 380 253 284 275


Leverage Ratio

Debt/Equity (x) NA NA NA NA


Y/E March 2011 2012 2013E 2014E


Other Income 880 386 432 550

Interest Paid -1,511 -1,778 -1,442 -1,426

(Inc)/Dec in Wkg. Cap. 3,371 225 3,268 3,171


(inc)/Dec in FA + CWIP -9,470 -5,050 -8,470 -10,604

(Pur)/Sale of Investments 504 502 0 0

CF from Inv.Activity -8,966 -4,549 -8,470 -10,604


Inc/(Dec) in Debt 1,585 1,381 64 2,096

CF from Fin.Activity 1,617 1,382 64 2,096

Inc/(Dec) in Cash -2,220 650 149 2,000


Closing Balance 3,202 3,851 4,000 6,000

August 27 - 31, 2012 46




Promoter 78.6 78.6 78.6

Dom. Inst. 0.3 0.3 0.4

Foreign 15.8 15.6 15.1

Others 5.3 5.5 5.9

Stock info

Bloomberg DLFU IN

Equity Shares (m) 1,714.4

CMP (INR) 215

Mcap. (USD b) 6.6

52-Wk Range (INR) 261/170

1, 6, 12 Rel Perf (%) 3/-8/-8

DLF

Company descriptionDLF, one of the largest and most respected real estate

companies in India, has developed many well known

urban colonies in Gurgaon, Delhi including South

Extension, Greater Kailash, Kailash Colony and Hauz

Khas. Since inception, DLF has developed ~240msf, and

an integrated 3,000-acre township in Gurgaon, called

DLF City. The company holds 345msf land bank with

almost 80% concentrated in super metros and metros.

Key investment positives DLF is uniquely positioned to leverage long-term

opportunities in India. It has a significant presence

in key cities and market leadership across segments.

Recently adopted operating strategy to combat

prevailing challenges, without sacrificing longer

term growth is a key positive: (1) Focus on premium

and plotted segment to mitigate inflations and

maintain profitability (2) Ramp-up execution with

third party contractors to augment delivery and cash

cycle (3) Consolidating land parcels at

outperforming NCR markets, and (4) Value creations

through infrastructure developments around

existing land parcels

Sincere effort to asset divestments and higher

visibility in large ticket deals would be key trigger

to de-leveraging

Key challenges DLF's gross debt stood at to INR250b, while net debt

at INR236b, implying net DER of 0.91x.

Cost of debt increased to 12.75% as against 10.5%

18 months back.

Overall macro challenges impacting real estate

sector.

Key news flows / triggers to watch The company has made meaningful progress in

asset sales through divesting NTC Mill land (INR27b)

against a target of INR50-60b in FY13.

Improvement in operations, launch of super

premium project in Gurgaon, progress in other asset

sales are near-term triggers.

1QFY13 highlights; guidance for FY13, FY14 DLF posted a subdued sales performance in 1QFY13.

It sold 1.34msf (estimated sales value of ~INR6b) v/

s 6.8msf (INR26b) in 4QFY12 and 2.2msf (INR11b) in

1QFY12.

However the management has guided for INR65b

of sales in FY13 on the back of new launch plan in

2HFY13. Leasing volume remain weak at 2msf owing

to weaker demand and several cancellations over

FY12.

Targets to reduce debt by INR50b by FY13 led by

divestments.




Change (%) 20.6 6.9 (18.0) -2.5 -10.1 0.7 9.3

EBITDA 11,110 11,730 8,227 7,976 10,670 39,043 44,083

Change (%) 13.4 26.3 -30.2 19.7 -4.0 4.0 12.9

EBITDA Margin (%) 45.4 46.3 40.4 30.5 48.6 40.5 41.9

Reported PAT 3,584 3,724 2,584 2,117 2,928 12,008 13,843

Adjusted PAT 3,584 3,724 2,584 2,117 2,928 12,008 13,843

Change (%) (12.8) (11.0) (44.5) (38.6) (18.3) (26.8) 15.3

PAT Margin (%) 14.7 14.7 12.7 8.1 13.3 12.5 13.1


Sales volume (msf) 2.2 1.3 3.3 6.8 1.3 13.5 10.5

Sales value (INR b) 11.0 6.0 9.6 25.8 6.0 52.7 60.0

Leasing volume (msf) 0.73 0.21 0.22 0.25 0.29 1.41 1.8

E: MOSL Estimates

47August 27 - 31, 2012


DLF: Financials and valuation


Y/E March 2011 2012 2013E 2014E

Net Sales 95,606 96,294 105,281 107,880

Change (%) 28.8 0.7 9.3 2.5

EBITDA 37,527 39,043 44,083 45,116

% of Net Sales 39.3 40.5 41.9 41.8

Depreciation 6,307 6,888 7,311 7,703

Interest 17,056 22,465 23,265 20,015

Other Income 5,839 5,945 4,722 4,429

PBT 20,002 15,635 18,229 21,828

Tax 4,594 3,694 4,740 5,675

Rate (%) 23.0 23.6 26.0 26.0

Reported PAT 16,396 12,008 13,843 16,542

Change (%) -5.2 -26.8 15.3 19.5


Y/E March 2011 2012 2013E 2014E

Equity Capital 3,394 3,394 3,394 3,394

Preference Capital 13,960 13,850 13,850 13,850

Reserves 245,967 255,114 264,986 277,556

Net Worth 263,321 272,359 282,230 294,801

Loans 239,906 250,660 224,133 201,719



Goodwil l 13,840 16,248 16,248 16,248



Net Fixed Assets 178,721 187,140 183,976 182,232

Capital WIP 102,344 89,928 100,925 103,198

Investments 9,958 11,268 11,268 11,268

Curr. Assets 452,069 487,718 467,260 462,018

Inventory 150,388 161,756 156,222 150,800

Debtors 17,536 19,100 19,731 21,359


Inventory 150,388 161,756 156,222 150,800

Loans and Advances 41,664 51,741 53,706 55,898



Creditors 92,249 98,639 108,203 118,754

Provisions 6,950 8,032 8,032 8,032



Ratios

Y/E March 2011 2012 2013E 2014E

Basic (INR)

Adjusted EPS 9.7 7.1 8.2 9.7

Growth (%) -5.2 -26.8 15.3 19.5

Cash EPS 12.8 11.0 12.3 14.1

Book Value 147.0 150.9 156.7 164.1

DPS 0.9 2.0 2.0 2.0


Valuation (x)

P/E 30.7 26.7 22.3

Cash P/E 19.8 17.8 15.5

EV/EBITDA 15.2 13.0 12.2

EV/Sales 6.2 5.4 5.1

Price/Book Value 1.4 1.4 1.3



RoE 5.8 4.5 5.0 5.7

RoCE 7.1 7.4 8.0 8.3

Leverage Ratio

Debt/Equity (x) 0.9 0.9 0.8 0.7


Y/E March 2011 2012 2013E 2014E


Add : Depreciation 6,307 6,888 7,311 7,703

Interest 17,056 22,465 23,265 20,015


Inc/Dec in WC 13,260 14,964 -20,331 -12,155


CF from Investments 31,286 -6,842 -15,143 -8,231

(Inc)/Dec in Networth -58,114 1,000 0 0

(Inc)/Dec in Debt 23,139 10,754 -26,527 -22,413

Less : Interest Paid 17,056 22,465 23,265 20,015

Dividend Paid 1,803 3,971 3,971 3,971


Inc/Dec of Cash 3,936 1,845 -4,156 1,784


Closing Balance 13,218 15,063 10,907 12,690Key assumptions/operating metrics

Y/E March 2011 2012 2013E 2014E

Sales (INR b)* 67 52 53 58

Sales volume (msf) 10 14 11 12

Delivery (msf) 7 13 12 12

Annuity income (INR b) 15 18 20 22

Net debt (INR b) 227 236 213 189

August 27 - 31, 2012 48




Promoter 72.7 72.7 72.7

Dom. Inst. 4.0 3.5 3.2

Foreign 14.9 15.0 15.0

Others 8.4 8.7 9.1

Stock info

Bloomberg HMN IN


CMP (INR) 476

Mcap (USD b) 1.3

52-Wk Range (INR) 553 / 318

1, 6, 12 Rel Perf (%) -7 / 26 / -6

Emami

Company descriptionEmami is a unique player in the personal and healthcare

space, with a strong herbal positioning. It has

established leadership in niche categories like Cooling

Oil (~49%), Antiseptic Cream (~75%), Men's fairness

cream (~60%) and Pain Balm (~57%). Emami derives

~14% of its revenues through exports with key regions

being Middle East, Africa and SAARC.

Key investment positives Emami enjoys strong leadership position in its 4 key

categories (Cooling oil, Balm, Men's fairness cream

and Antiseptic cream); it continues to post strong

double-digit sales growth in these categories.

High level of innovations and focus on the acquired

OTC portfolio (of erstwhile Zandu) will further

accelerate volume growth.

International business growth has been robust and

with setting up manufacturing in key markets of

Bangladesh and Middle East, profitability is also

likely to improve.

Strong balance sheet with little debt as of FY12

provides room for inorganic foray.

Key challenges Volatile prices in Mentha oil, LLP (two largest inputs)

and other crude related inputs are key risks to

margins.

Increasing competition in Cooling oils from

domestic hair oil players (Marico, Bajaj Corp) and in

Men's fairness from MNCs (Hindustan Unilever,

L'Oreal, and Nivea) could impact growth and market

shares.

Key news flows / triggers to watch Growth and market shares in Cooling oil and Men's

fairness categories which have seen new entrants.

Aggressive acquisition intent in the domestic

market; high deal multiples could be a key risk.

Softening of crude prices can boost profit margins

(70% of input costs are crude linked).

1QFY13 highlights; guidance for FY13, FY14 In 1QFY13, Navaratna sales were up ~60% YoY, Talcs

grew ~60% YoY, Boroplus cream grew ~70% YoY, and

Fair & Handsome (flat growth yoy), and OTC

products (up ~24%, led by Zandu Pancharishta).

PAT grew 24% YoY to INR495m (INR398m in 1QFY12).



Operating Income 2,843 2,969 4,465 3,768 3,310 14,044

Change (%) 22.9 13.2 13.2 15.2 16.4 15.6

EBITDA 732 826 1,468 1,124 872 4,149

Change (%) 71.0 -9.6 15.5 17.4 19.1 16.2

EBITDA Margin (%) 25.8 27.8 32.9 29.8 26.3 29.5

Reported PAT 398 500 1,013 656 495 2,568

Adjusted PAT 398 500 1,013 718 495 2,630

Change (%) 7.0 -11.7 23.6 53.4 24.1 18.1

PAT Margin (%) 14.0 16.8 22.7 19.0 14.9 18.7

E: MOSL Estimates

49August 27 - 31, 2012


Emami: Financials and valuation


Y/E March 2009 2010 2011 2012

Net Sales 7,474 10,217 12,590 15,121

Change (%) 30.5 36.7 23.2 20.1

COGS 2,671 3,805 5,232 6,618

Gross Profit 4,803 6,412 7,358 8,503

Gross Margin (%) 64.3 62.8 58.4 56.2


EBITDA 1,275 2,452 2,534 2,871

Change (%) 33.8 92.3 3.4 13.3

Margin (%) 17.1 24.0 20.1 19.0


Int. and Fin. Charges 227 210 -112 -141

Financial Other Income 94 83 185 235

Profit before Taxes 1,059 2,171 2,691 3,080

Change (%) 0.9 105.0 24.0 14.5

Margin (%) 14.2 21.2 21.4 20.4

Tax 118 342 337 412

Deferred Tax 23 10 67 -67

Tax Rate (%) 13.3 16.2 15.0 11.2

Adjusted PAT 919 1,798 2,287 2,735

Change (%) -1.0 95.7 27.2 19.6

Margin (%) 12.3 17.6 18.2 18.1

Non-rec. (Exp)/Income 0 121 0 0

Reported PAT 919 1,697 2,287 2,735


Y/E March 2009 2010 2011 2012

Share Capital 131 151 151 151

Reserves 2,881 6,103 6,747 7,675

Net Worth 3,013 6,254 6,898 7,827


Loans 4,482 2,591 2,294 1,994

Deferred Liability 60 70 137 150


Goodwill on consolidation 0 0 8 77

Gross Block 7,067 7,638 7,993 8,593

Less: Accum. Depn. 940 2,027 3,148 4,336

Net Fixed Assets 6,128 5,611 4,845 4,257

Capital WIP 367 62 65 0


Curr. Assets, L&A 2,430 4,247 5,997 7,238

Inventory 738 826 1,234 1,401

Account Receivables 710 755 1,089 1,306

Cash and Bank Balance 141 1,614 2,105 2,992

Others 840 1,051 1,570 1,538


Account Payables 1,201 890 883 1,089

Other Liabilities 68 37 34 1

Provisions 494 695 733 871

Net Current Assets 666 2,625 4,347 5,277


E: MOSL Estimates

Ratios

Y/E March 2009 2010 2011 2012

Basic (INR)

EPS 7.0 11.9 15.1 18.1

Cash EPS 7.6 12.9 16.0 19.2

BV/Share 22.9 41.3 45.6 51.7

DPS 2.7 3.0 3.5 4.5

Payout % 43.4 29.5 27.0 29.0

Valuation (x)

P/E 68.0 40.1 31.5 26.3

Cash P/E 62.4 36.9 29.7 24.8

EV/Sales 8.9 7.1 5.7 4.7

EV/EBITDA 52.1 29.5 28.5 24.6

P/BV 20.7 11.5 10.4 9.2

Dividend Yield (%) 0.6 0.6 0.7 0.9

Return Ratios (%)

RoE 31.1 38.8 34.8 37.1

RoCE 23.7 28.9 28.3 30.4




Leverage Ratio

Debt/Equity (x) 1.3 0.2 0.0 -0.2


Y/E March 2009 2010 2011 2012

OP/(loss) before Tax 1,275 2,452 2,534 2,871

Int./Div. Received 191 342 269 301

Interest Paid -391 -547 -152 -159

Direct Taxes Paid -141 -352 -404 -345

(Incr)/Decr in WC 831 -532 -1,217 -44


(Incr)/Decr in FA -6,242 -266 -358 -535

(Pur)/Sale of Investments 636 -223 550 -301

CF from Invest. -5,606 -489 192 -836

Change in Equity 7 3,100 0 0

(Incr)/Decr in Debt 4,100 -1,892 -297 -300

Dividend Paid -398 -531 -618 -794

Others 247 -78 183 193

CF from Fin. Activity 3,955 599 -731 -901

Incr/Decr of Cash 114 1,473 491 887

Add: Opening Balance 28 141 1,614 2,105

Closing Balance 142 1,614 2,105 2,992

August 27 - 31, 2012 50


GAIL (India)



Promoter 64.6 64.6 64.6

Dom. Inst. 17.7 17.9 18.5

Foreign 14.6 14.2 13.8

Others 3.2 3.3 3.1

Stock info

Bloomberg GAIL IN


CMP (INR) 361

Mcap (USD b) 8.2

52-Wk Range (INR) 446 / 303

1, 6, 12 Rel Perf (%) -2 / -2 / -23

Company descriptionGAIL (India) is a major public sector undertaking in India,

with interests in gas distribution, petrochemicals, LPG,

and telecom. It owns ~9,500km of natural gas pipelines,

two LPG transmission pipelines of 2,000km, 450,000 tpa

petchem capacity, ~1.4mt LPG/other hydrocarbons

capacity, and over 13,000km of optical fiber cable

network. GAIL is also involved in city gas distribution,

E&P and power businesses through its joint ventures.

Key investment arguments Capex to increase capacities significantly: GAIL is in

the midst of a high capex cycle, which will increase

its transmission capacity by 1.7x and double its

petchem capacity.

Incremental gas availability to remain near-term

headwind: While we like management strategy to

build capacity to benefit in the long term, near-term

challenges of incremental gas availability remain.

Model 1.4% transmission volume CAGR through

FY14: The promise of transmission business growth,

though strong in the long term, there are concerns

in the medium term as ramp-up in Reliance

Industries' KG-D6 gas output has halted.

Near term pressure on profitability: We believe

GAIL's profitability ratios would be under pressure

for next 2-3 years due to underutilization of new

pipelines. Earnings would be depressed due to

revenue increase not commensurate with increase

in interest and depreciation.

Key challenges To arrange for incremental gas volumes for its

growing transmission capacity.

To diversify earnings in view of high and ad hoc

subsidy sharing.

Pressure on petchem sales volume led by increased

imports in India.

Likely regulation to cap marketing margins on gas

sales.

Key news flows / triggers to watch Clarity on the subsidy sharing.

Likelihood of transmission volume increase in near

to medium term.

1QFY13 highlights; guidance for FY13, FY14 Gas transmission volumes stood at ~110mmsmcd

(-6.3% YoY and 5% QoQ).

Gas trading EBIT was boosted by one-time LNG

inventory gain of ~INR2b.

Petchem EBIT was impacted by lower sales volume

due to capacity shutdown.

GAIL expects its 5mmtpa Dabhol terminal to get

commissioned in 2HFY13.

GAIL expects to complete both its major expansion

projects by December 2013 -

(1) Pata plant expansion (from 450ktpa to 900ktpa);

(2) Bharamputra Cracker and Polymer Ltd (BCPL).




Change (%) 25.0 19.7 34.6 17.6 25.0 24.1 9.1

EBITDA 16 16 18 7 19 57 64

Change (%) 8 15 34 -42 22 4 12

EBITDA Margin (%) 17.5 17.0 15.6 7.0 17.1 14.1 14.6

Reported PAT 10 11 11 5 11 37 39

Adjusted PAT 10 11 11 5 11 37 39

Change (%) 11.0 18.5 12.8 -38.3 15.1 2.6 5.8

PAT Margin (%) 11.1 11.3 9.7 4.6 10.2 9.1 8.8

Key Metrics (mmscmd)

Gas transmission 117 119 119 116 110 118 114

Petchem sales(000MT)88 129 113 118 66 448 396

Subsidy (INR b) 7 6 5 14 7 32 32

E: MOSL Estimates

51August 27 - 31, 2012


GAIL India: Financials and valuation


Y/E March 2011 2012 2013E 2014E

Net Sales 324,586 402,807 439,439 481,622

Change (%) 30.2 24.1 9.1 9.6

Purchases 220,059 286,791 270,255 298,606

Raw Materials 21,788 24,941 27,209 29,821

Change in Stocks -1,325 -4,978 2,349 0

Employee Costs 7,527 6,075 6,682 7,351

Power&fuel & other exp. 21,994 32,997 68,937 73,857

EBITDA 54,544 56,981 64,007 71,988

% of Net Sales 16.8 14.1 14.6 14.9

Depreciation 6,503 7,907 8,954 11,710

Interest 829 1,165 2,384 4,968

Other Income 5,186 5,491 3,949 5,611

PBT 52,398 53,400 56,618 60,922

Tax 16,788 16,862 17,976 19,162

Rate (%) 32.0 31.6 31.7 31.5

Reported PAT 35,610 36,538 38,642 41,760

Adjusted PAT 36,408 36,538 38,642 41,760

Change (%) 13.4 2.6 5.8 8.1


Y/E March 2011 2012 2013E 2014E

Share Capital 12,685 12,685 12,685 12,685

Reserves 179,849 203,476 228,613 255,680

Net Worth 192,533 216,160 241,298 268,365

Loans 23,100 49,659 117,659 127,659

Deferred Tax 16,332 18,909 21,174 23,611




Net Fixed Assets 124,036 164,463 212,868 327,563

Capital WIP 58,792 76,793 96,544 39,696

Investments 25,825 25,825 25,825 25,825

Current Assets

Inventory 8,551 14,145 13,696 14,724

Debtors 19,059 20,764 22,173 24,547


Loansand advances 62,538 64,167 65,892 67,721


Liabi l i t ies 47,544 60,473 58,923 63,313

Provisions 40,605 44,539 46,559 48,760




Y/E March 2011 2012 2013E 2014E

Exchange rate 46 48 54 52

Subsidy (INRb) 21 32 32 24

Natural Gas Transmission

Volume (mmsmd) 118 118 114 121

Average Tariff (INR/mscm) 880 894 878 889

Petchem Sales ('000 MT) 420 448 396 464

Ratios

Y/E March 2011 2012 2013E 2014E

EPS 28.7 28.8 30.5 32.9

Cash EPS 33.2 35.0 37.5 42.2

Book Value 151.8 170.4 190.2 211.6

DPS 7.5 8.70 9.0 10.0

Payout 26.1 30.2 29.5 30.4

Valuation (x)

P/E 10.1 9.8 9.3 8.6

Cash P/E 8.5 8.1 7.5 6.7

EV / EBITDA 6.3 6.5 6.6 6.2

EV / Sales 1.2 1.0 1.0 1.0


Dividend Yield (%) 2.1 2.4 2.5 2.8


RoE 18.5 16.9 16.0 15.6

RoCE 22.9 19.2 15.5 15.7

Turnover Ratios



Leverage Ratio

Debt / Equity (x) 0.1 0.2 0.5 0.5


Y/E March 2011 2012 2013E 2014E


Depreciation 6,504 7,907 8,954 11,710

Other op items -873 0 0 0


Inc/Dec in Wkg.Capital -12,420 7,935 -2,214 1,360


(Inc)/Dec in FA & CWIP -46,290 -66,336 -77,110 -69,558

Pur/Sale of Investments -5,095 0 0 0

Inc from Invst 4,090 0 0 0


Inc / (Dec) in Debt 7,215 26,559 68,000 10,000

Dividends Paid -11,094 -12,911 -13,505 -14,692

CF from Fin. Activity -3,879 13,647 54,495 -4,692

Inc / ( Dec) in Cash -20,402 2,270 25,031 -16,983


Closing Balance 21,314 23,583 48,615 31,632

August 27 - 31, 2012 52


GlaxoSmithKline Pharmaceuticals



Promoter 50.7 50.7 50.7

Dome. Inst. 14.2 14.5 15.9

Foreign 18.6 18.5 17.1

Others 16.6 16.4 16.4

Stock info

Bloomberg GLXO IN


CMP (INR) 2,091

Mcap (USD b) 3.2

52-Wk Range (INR) 2338 / 1830

1, 6, 12 Rel Perf (%) -2 / 4 / -8

Company descriptionGSK Pharma (a 50% subsidiary of GlaxoSmithKline Plc)

is the fourth largest formulations company in India and

the second largest MNC, with a strong presence in

segments like dermatology, respiratory and vaccines.

Its parent has one of the richest product and R&D

pipelines among pharmaceutical companies

worldwide. Further GSK Pharma's profitability is one of

the best in the industry.

Key investment positives GSK has an excellent branded portfolio and a strong

presence in the dermatology, anti-infective,

respiratory and vaccines segments.

The parent's strong pipeline holds good upside

potential after IPR implementation, with no conflict

of interest issues with any other subsidiary.

GSK deserves premium valuations due to strong

parentage (giving access to large product pipeline),

brand-building ability, and likely positioning in

patent era. It is one of the very few companies with

ability to drive reasonable growth without any major

capital requirement leading to high RoCE.

GSK is likely to sustain double-digit topline growth

over the next few years. Given the high profitability

of its operations, we expect this growth to lead to

sustainable double-digit earnings growth and RoE

of ~30%. This growth is likely to be funded through

miniscule capex and negative net working capital.

Key challenges The proposed new "Pharma Policy", if

implemented in the current form will have adverse

impact of 13% on GSK's annualized earnings.

Possible pre-grant and post-grant patent challenges

by domestic generic companies could hamper the

plans and prospects of the launch of patented

products by GSK Pharma in India

Key news flows / triggers to watch Ability of the company to ramp up its presence in

the high-growth lifestyle segments, which are

negligible contributors as of now.

Sustained launch of new products - this is

imperative to drive future topline growth.

Government's progress on the implementation of

the new Pharma Policy.

2QCY12 highlights Performance was in-line with topline growth of

16.1%, EBITDA growth of 8.4% and Adj PAT growth

of 11.8%. Topline growth was led by dermatology

and vaccine segments. GSK Pharma launched 3 new

products in the quarter.

EBITDA margins declined 220bp YoY (v/s our

estimate of 60bp decline). Effectively, higher sales

have compensated for lower EBITDA margins.

Adj PAT growth is higher than EBITDA growth due to

lower depreciation (down 13%) and higher other

income (up 14%).


Y/E December Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 CY11 CY12E


Change (%) 12.8 4.4 15.4 3.3 16.1 10.7 9.7

EBITDA 1,870 1,760 1,706 1,957 2,028 7,445 7,944

Change (%) 2.9 -15.7 15.8 -7.2 8.4 0.9 6.7

EBITDA Margin (%) 33.3 29.0 30.1 31.4 31.1 31.8 31.0

Reported PAT 1,475 1,459 1,367 1,229 1,635 4,306 6,175

Adjusted PAT 1,517 1,460 1,474 1,857 1,696 6,314 6,864

Change (%) 8.6 -7.7 20.5 -0.3 11.8 8.6 8.7

PAT Margin (%) 27.0 24.0 26.0 29.8 26.0 27.0 26.8


RM Cost (% of sales) 36.4 39.8 41.0 42.1 41.5 38.9 41.0

Staff Cost (% Chg YoY) 22.5 15.5 8.1 0.9 1.6 15.6 2.0

Other Exp (% of sales) 18.3 22.0 11.3 17.4 17.3 17.4 17.0

E: MOSL Estimates

53August 27 - 31, 2012


GlaxoSmithKline Pharmaceuticals: Financials and valuation


Y/E December 2010 2011 2012E 2013E

Net Sales 21,116 23,380 25,650 28,899

Change (%) 12.9 10.7 9.7 12.7

EBITDA 7,378 7,445 7,944 9,156

Change (%) 12.7 0.9 6.7 15.3

Margin (%) 34.9 31.8 31.0 31.7


Int. and Fin. Charges 6 3 0 0

Other Income - Rec. 1,477 1,978 2,248 2,504

PBT & EO Expense 8,673 9,216 10,020 11,445

Tax 2,859 2,902 3,156 3,605

Tax Rate (%) 33.0 31.5 31.5 31.5

Adj PAT 5,814 6,314 6,864 7,840

EO Expense (net of tax) 177 -2,008 -689 0

Reported PAT 5,637 4,306 6,175 7,840

Change (%) 15.2 8.6 8.7 14.2

Margin (%) 26.7 18.4 24.1 27.1


Y/E December 2010 2011 2012E 2013E

Equity Share Capital 847 847 847 847

Reserves 18,445 18,336 19,614 22,069

Capital Reserve 17 17 17 17

Net Worth 19,308 19,199 20,478 22,933

Loans 52 49 0 0


Net Fixed Assets 1,089 991 1,620 2,204

Capital WIP 87 254 254 254

Investments 1,604 1,598 20,426 21,882

Curr. Assets 24,483 26,959 8,849 9,826

Inventory 2,815 3,301 3,848 4,479

Account Receivables 470 853 770 867


Others 1,717 2,940 2,950 3,034



Provisions 4,900 7,623 7,695 8,092

Net Current Assets 16,016 15,790 -2,437 -2,023

Deferred Tax Assets 564 615 615 615

Appl. of Funds 19,360 19,248 20,478 22,932

Revenue Mix (INR M)

CY10 CY11 CY12E CY13E

Pharmaceuticals 19,603 22,049 24,695 27,905

Growth (%) 14.3 11.2 12.0 13.0

Exports 631 365 183 183

Growth (%) -11.9 -42.2 -50.0 -

Iodex 882 966 773 811

Growth (%) 3.9 9.5 -20.0 5.0

Total 21,116 23,380 25,650 28,899

Growth (%) 12.9 10.7 9.7 12.7


Y/E December 2010 2011 2012E 2013E

Basic (INR)

EPS 68.6 74.5 81.0 92.6

Cash EPS 70.7 76.9 83.1 95.1

BV/Share 228.0 226.7 241.8 270.7

DPS 40.0 50.0 60.0 70.0

Payout (%) 66.5 76.5 84.4 86.2

Valuation

P/E 30.5 28.1 25.8 22.6

Cash P/E 29.6 27.2 25.2 22.0

P/BV 9.2 9.2 8.6 7.7

EV/Sales 7.4 6.7 6.1 5.3

EV/EBITDA 21.2 20.9 19.6 16.8

Dividend Yield (%) 1.9 2.4 2.9 3.3

Return Ratios (%)

RoE 30.1 32.9 33.5 34.2

RoCE 44.8 47.9 48.9 49.9





Working Capital (Days) -60 -64 -53 -44

Leverage Ratio

Debt/Equity 0.0 0.0 0.0 0.0


Y/E December 2010 2011 2012E 2013E

Oper. Profit/Loss bef. Tax 7,378 5,438 7,255 9,156

Interest/Div. Recd. 1,477 1,978 2,248 2,504


(Inc)/Dec in WC -3 -357 -1,320 -1,217


EO expense 177 -2,008 -689 0

CF frm Op. incl EO exp. 5,699 6,113 5,715 6,838

(inc)/dec in FA -166 -272 -800 -800

(Pur)/Sale of Investments 216 5 -18,929 -1,557

CF from investments 50 -267 -19,729 -2,357

Change in Net Worth 0 -1,593 311 1,476

Inc/(Dec) in Debt -3 -3 -49 0

Interest Paid -6 -3 0 0

Dividend Paid -2,985 -3,863 -4,829 -5,795


Inc/Dec of Cash 2,755 383 -18,581 163


Closing Balance 19,481 19,864 1,283 1,445

August 27 - 31, 2012 54


Glenmark Pharmaceuticals



Promoter 48.3 48.3 48.3

Dome. Inst. 5.4 4.6 6.9

Foreign 34.0 35.5 31.9

Others 12.3 11.7 12.9

Stock info

Bloomberg GNP IN


CMP (INR) 416

Mcap (USD b) 2.0

52-Wk Range (INR) 427 / 265

1, 6, 12 Rel Perf (%) 4 / 42 / 24

Company descriptionGlenmark is a second-tier generic company. It has

differentiated itself through successful NCE research.

It has a pipeline of 5 novel drugs in different phases of

clinical studies, generating cumulative R&D licensing

income of USD207m. Its key markets are: US (38% of

sales), India (27%) and emerging markets (19%).

Key investment positives Most successful NCE research company from India

with cumulative licensing income of USD207m.

Currently, it has 2 out-licensed NCEs (to Sanofi) and

a total of 5 NCEs undergoing clinical trials.

Expect improved working capital and moderate

capex to help the management reduce debt. Return

ratios are expected to gradually improve over the

next two years – RoCE from 12.1% to 21% and RoE

from 13.5% to 21%.

Improved working capital cycle coupled with

potential debt reduction is likely to address investor

concerns on adverse balance sheet.

Glenmark is trying to build a differentiated product

portfolio in the US through a combination of oral

contraceptives (OC) and dermatology products.

Expect 54% EPS CAGR over FY12-14, albeit on a low

base.

Key challenges The proposed new "Domestic Pharma Policy", may

adversely impact earnings.

NCE research is a high-gestation and expensive

business, and may pressurize margins in near term.

Needs to broaden its therapeutic coverage in India

to fully exploit the domestic market potential.

Key news flows / triggers to watch Approvals & ramp-up of the OC portfolio in the US.

Reduction in debt – expected to begin in FY13.

Release of data from Revamilast clinical trials (likely

by 1QFY14); favourable data could lead to successful

out-licensing.

1QFY13 highlights Performance was above estimates led by strong

traction in US, India and emerging markets but partly

boosted by favorable currency.

Core EBITDA at INR1.85b was higher than our

estimate of INR1.47b while core EBITDA margin was

18.7% v/s our estimate of 16.2%.

Adj PAT de-growth of 54% was mainly due to forex

losses of INR550m.

Overall working capital continued to be under

control at 125-130 days.




Op.Inc.(ex one-offs&R&D) 7,570 9,272 9,780 10,302 9,863 36,925 47,404

Change (%) 27.8 32.3 34.3 30.0 30.3 31.2 28.4

EBITDA 2,966 2,983 2,046 1,864 2,198 9,860 9,487

EBITDA (ex one-offs) 1,854 1,731 1,603 1,631 1,841 6,819 9,129

Change (%) 32.7 12.7 6.4 511.1 -0.7 44.9 33.9

EBITDA Margin (%) 24.5 18.7 16.4 15.8 18.7 18.5 19.3

Reported PAT 2,093 548 451 1,511 783 4,603 6,484

Adj.PAT (ex one-offs) 1,092 745 76 1,331 506 3,244 5,493

Change (%) 17.8 -24.6 -92.2 101.4 -53.6 -8.6 69.3

PAT Margin (%) 14.4 8.0 0.8 12.9 5.1 8.8 11.6

Key Operating Metrics - Revenue Break-up

US 2,512 3,001 3,190 3,435 3,924 12,137 16,233

Europe 390 563 971 1,083 602 3,008 3,525

India 2,254 2,539 2,547 2,682 2,798 10,021 12,026

Latam 621 780 860 751 670 3,012 3,932

ROW 1,047 1,479 1,571 1,828 1,348 5,926 7,624

APIs 646 763 836 850 1,005 3,094 3,892

R&D Income 1,112 1,185 238 - - 2,535 241

Others 101 246 97 30 58 474 474

E: MOSL Estimates

55August 27 - 31, 2012


Glenmark Pharmaceuticals: Financials and valuation


Y/E March 2011 2012 2013E 2014E

Net Sales 29,491 40,206 47,946 54,603

Change (%) 19.8 36.3 19.2 13.9

EBITDA 5,923 9,860 9,487 11,618

Margin (%) 20.1 24.5 19.8 21.3

Adjusted EBITDA 5,028 7,325 9,246 11,384

Margin (%) 17.6 19.4 19.4 20.9

Depreciation 947 979 1,067 1,189

EBIT 4,976 8,882 8,420 10,429

Interest 1,566 1,466 1,462 1,280

OI & forex gains/losses 1,405 -1,218 -91 281

PBT before EO Expense 4,816 6,198 6,867 9,431

PBT after EO Exp. 4,816 4,881 6,867 9,431

Tax 237 238 1,018 1,415

Tax Rate (%) 4.9 4.9 14.8 15.0

Reported PAT 4,578 4,643 5,849 8,016

Adj PAT** 3,548 3,244 5,493 7,713

Margin (%) 12.4 8.6 11.5 14.2

**Excl NCE upsides & incl adjustment for R&D exp capitalization


Y/E March 2011 2012 2013E 2014E


Fully Diluted Eq Cap 284 284 284 284

Reserves 20,102 23,746 29,198 36,751

Net Worth 20,372 24,016 29,468 37,022


Loans 21,258 20,779 19,279 15,779

Deferred liabilities -1081 -2674 -2674 -2674


Net Fixed Assets 21,023 23,790 25,681 26,992

Capital WIP 1,100 1,100 1,100 1,100


Intangibles (net) 10,329 11,862 11,031 10,259

Curr. Assets 25,988 29,472 32,750 37,267

Inventory 8,070 7,877 9,852 11,220



Others 4,651 5,958 6,568 7,480



Appl. of Funds 40,816 42,371 46,243 50,197

Revenue model (INR M)

Y/E March 2011 2012 2013E 2014E

India Formulations 8,447 10,021 12,026 13,950

Branded form. exports 7,516 10,771 13,568 15,686

Generics 9,296 13,311 17,746 19,909

NCE Income 895 2,535 241 234

API & Others 3,337 3,568 4,366 4,824

Gross Sales 29,491 40,206 47,946 54,603

Ratio

Y/E March 2011 2012 2013E 2014E

Basic (INR)

EPS (Fully diluted)* 12.5 11.4 19.3 27.1

Cash EPS 15.8 14.9 23.1 31.3

BV/Share 75.4 88.8 108.9 136.8

DPS 3.7 10.0 5.0 5.7

Payout (%) 5.2 13.6 5.4 4.5

Valuation (x)

P/E (Fully diluted) 33.3 36.4 21.5 15.3

PEG (x) 4.6 -4.3 0.3 0.4

Cash P/E 26.3 28.0 18.0 13.3

P/BV 5.5 4.7 3.8 3.0

EV/Sales 4.5 3.2 2.7 2.3

EV/EBITDA 22.2 13.2 13.7 10.9

Dividend Yield (%) 0.9 2.4 1.2 1.4

Return Ratios (%)

RoE 17.4 13.5 18.6 20.8

RoCE 13.4 12.1 17.5 20.9



Debtor (Days) 140 113 115 115


Working Capital (Days) 203 127 137 137

Leverage Ratio (x)

Current Ratio 3.4 2.4 2.4 2.4

Debt/Equity 1.0 0.9 0.7 0.4


Y/E March 2011 2012 2013E 2014E

Op. Profit/Loss before Tax 5,923 9,860 9,487 11,618

Interest/Dividends Recd. 1,405 -1,218 -91 281


(Inc)/Dec in WC 1,530 2,443 -3,958 -2,503


CF frm Op.incl EO Exp. 6,829 7,937 4,420 7,982

(Inc)/Dec in FA 810 -3,746 -2,957 -2,500

CF from Investments 682 -3,735 -2,957 -2,500

Change in Networth -7,521 -366 -80 -100

Inc/(Dec) in Debt 2,701 -496 -1,580 -3,600

Interest Paid -1,566 -1,466 -1,462 -1,280

Dividend Paid -236 -633 -317 -363


Inc/Dec of Cash 890 1,242 -1,976 139


Closing Balance 1,959 3,201 1,224 1,364

August 27 - 31, 2012 56




Promoter 64.0 64.0 67.3

Dom. Inst. 1.0 1.8 2.2

Foreign 27.2 25.3 19.3

Others 7.8 9.0 11.2

Stock info

Bloomberg GCPL IN


CMP (INR) 639

Mcap (USD b) 3.9

52-Wk Range (INR) 658 / 370

1, 6, 12 Rel Perf (%) 9 / 49 / 49

Company descriptionGodrej Consumer Products (GCPL) enjoys leadership

position in India's household insecticide business.

Besides, it is the second largest player in the INR90b

Toilet Soap category (~10% market share) and market

leader in the INR10b hair dye category with a market

share of ~32%. GCPL has been very aggressive in

international acquisitions which now account for more

than 36% of consolidated revenues.

Key investment positives Synergies from GHPL (Godrej Home Products Ltd)

post the merger have paid of well by way of strong

volume growth, increase in distribution reach, and

access to various new geographies.

Market leadership and strong 20%+ growth in the

domestic household insecticides business is the key

growth driver for the company. GCPL has ~37%

market share in the INR25b market in India.

GCPL has acquired leading brands in their respective

geographies. In several of these territories these

companies are already competing with their MNC

counterparts and have shown ability to compete

with them and grow successfully. Megasari has been

competing with S C Johnson in Indonesia, whereas

the LatAm subsidiaries have been competing with

MNCs like L'Oreal and P&G.

Key challenges GCPL will have to pay INR3-4b every year to acquire

remaining geographies of Darling Group. Given the

already laid-out roadmap for this, incremental

acquisitions can impact cash flows.

Sustaining 20%+ growth and margins in toilet soaps

is a challenge, given the high penetration and

competitive intensity.

Key news flows / triggers to watch Any big ticket acquisition by the company.

Synergies and cross-pollination between

geographies and acquired companies.

INR and PFAD prices are an overhang on margins.

1QFY13 highlights; guidance for FY13, FY14 1QFY13 Consolidated sales grew 39% to INR13.8b

led by 27% sales growth in domestic Household

Insectices, 42% growth in Toilet Soaps, 40% growth

in Megasari, and 94% growth in Latin America.

GCPL received INR165m (INR80m after minority

interest) as a result of zero tax status to its Nigeria

business. It will enjoy this status for 5 years.

We remain positive on the rapidly growing

household insecticides business which has in the

last two years consistently outperformed market

growth. We expect profit margins in toilet soaps in

the coming quarters to remain under check due to

firm PFAD prices.

Godrej Consumer Products



Operating Income 9,978 11,860 13,441 13,230 13886 48,509 63147

Change (%) 39.6 23.3 35.9 32.4 39.2 32.0 30.17

EBITDA 1,427 2,088 2,653 2,481 1988 8,607 11298

Change (%) 11.5 25.1 60.1 39.6 39.3 35.4 31.26

EBITDA Margin (%) 14.3 17.6 19.7 18.8 14.3 17.7 17.89

Reported PAT 2,393 1,277 1,671 1,927 1305 7,267 7446

Adjusted PAT 1,002 1,277 1,671 1,730 1305 5,266 7446

Change (%) 10.3 -2.0 40.7 22.1 30.2 11.2 41.42

PAT Margin (%) 10.0 10.8 12.4 13.1 9.4 10.9 11.79


India EBITDA margin (%) 15.3 17.6 18.8 19.0 14.1

Intl. EBITDA margin (%) 12.6 17.2 21.0 18.3 14.5

E: MOSL Estimates

57August 27 - 31, 2012


Godrej Consumer Products: Financials and valuation

Ratios

Y/E March 2011 2012 2013E 2014E

Basic (INR)

EPS 14.6 16.3 21.9 26.7

Cash EPS 16.2 18.3 24.5 29.7

BV/Share 53.3 64.5 94.0 109.0

DPS 5.0 6.0 8.0 10.0

Payout (%) 34.4 36.9 36.6 37.5

Valuation (x)

P/E 37.2 27.6 22.7

Cash P/E 33.1 24.7 20.3

EV/Sales 4.5 3.6 2.9

EV/EBITDA 25.4 20.0 16.3

P/BV 9.4 6.4 5.6

Dividend Yield 1.0 1.3 1.7

Return Ratios (%)

RoE 27.5 25.2 23.3 24.5

RoCE 18.4 20.4 22.7 24.5




Leverage Ratio

Debt/Equity (x) 1.2 1.1 0.7 0.7


Y/E March 2011 2012 2013E 2014E


Other Income 643 672 1,089 1,310

Interest Paid 436 658 1,046 1,114

Direct Taxes Paid 1,382 2,261 2,352 3,079

(Inc)/Dec in WC 3,605 429 1,214 1,365


Extraordinary Items 411 2,002 0 0

Inc in FA 15,144 4,196 6,215 5,225

Pur of Investments -670 0 0 0

Goodwil l 12,285 5,040 3,000 2,000


Issue of Shares 4,976 337 6,850 0

Inc in Debt 19,685 3,746 -550 1,500

Dividend Paid 1,966 2,272 3,185 3,982

Other Item 1,293 -1,466

CF from Fin. Activity 23,988 345 3,115 -2,482

Inc/Dec of Cash -782 -958 1,674 -5


Closing Balance 2,269 1,311 2,985 2,979


Y/E March 2011 2012 2013E 2014E

Net Sales 36,763 48,509 63,147 78,327

Change (%) 80.1 32.0 30.2 24.0

Total Expenditure 30,405 39,903 51,849 64,378

EBITDA 6,358 8,607 11,298 13,949

Change (%) 55.7 35.4 31.3 23.5

Margin (%) 17.3 17.7 17.9 17.8

Depreciation 499 644 887 1,044

Int. and Fin. Charges 436 658 1,046 1,114

Interest Income 643 672 430 596

Other Income-rec. 0 0 660 713

forex gain/(loss) -52.8 205 0 0

PBT 6,118 7,771 10,454 13,102

Change (%) 45.7 27.0 34.5 25.3

Tax 1,382 2,261 2,352 3,079

Deferred Tax 0 0 -76 -91

Tax Rate (%) 22.6 29.1 23.2 24.2

PAT 4,736 5,511 8,025 9,932

Change (%) 39.5 16.4 45.6 23.8

minority interest 0.0 245 579 856

Group Adjusted PAT 4,736 5,266 7,446 9,076

Non-rec. (Exp.)/Income 411 2,002 0 0

Reported PAT 5,148 7,267 8,025 9,932


Y/E March 2011 2012 2013E 2014E


Reserves 16,928 20,561 31,656 36,750

Minority Int 591 1,170 2,027

Networth 17,252 20,885 31,996 37,090

Loans 20,054 23,800 23,250 24,750



Gross Block 19,147 23,347 29,562 34,787

Less: Accum. Depn. 3,775 4,452 5,339 6,382

Net Fixed Assets 15,373 18,896 24,224 28,405

Capital WIP 154 150 150 150

Goodwil l 15,404 20,444 23,444 25,444

Currents Assets 15,062 16,776 22,266 26,334

Inventory 4,394 6,264 8,131 10,086





Curr. Liab. & Prov. 8,673 10,916 13,518 16,225



Provisions 89 26 35 46


Net Assets 37,320 45,350 56,567 64,108


FY11 FY12 FY13E FY14E

Net Sales Growth (%) 80.1 32.0 30.2 24.0

EBITDA 6,358 8,607 11,298 13,949

EBIT Margin (%) 17.3 17.7 17.9 17.8

August 27 - 31, 2012 58


Company descriptionGrasim is a diversified company with business interest

in VSF (35% of revenue) and cement (through subsidiary

UltraTech, 65% of revenue). UltraTech Cement, its

subsidiary, is number one cement company in India

with total capacity of ~50mt.

Key investment positives UltraTech, Grasim's 60% subsidiary, is a truly pan-

India play without concentration in any particular

region, insulating it from volatility in regional

demand & prices.

Grasim is a global leader in VSF business, with

backward integration in pulp. Expect robust VSF

demand in both global and domestic markets.

The outlook for VSF is improving driven by likely

low cotton output in FY13, coupled with limited

downside risk to VSF prices from current levels as

some Chinese players are making EBITDA loss.

With planned VSF capacity expansion of ~50% of

existing capacity, Grasim is well placed to benefit

from any improvement in demand and pricing.

Key challenges Post ongoing capex in VSF, Grasim needs avenues

to deploy its strong cash flow from VSF business.

Deriving synergies from recent acquisitions of

Domsjo, Terrace Bay, and planned capacity addition

in Turkey through JV.

Grasim Industries



Promoter 25.5 25.6 25.6

Dom. Inst. 16.8 16.9 17.8

Foreign 39.0 38.6 38.2

Others 18.7 19.0 18.5

Stock info

Bloomberg GRASIM IN


CMP (INR) 3,017

Mcap (USD b) 5.0

52-Wk Range (INR) 3,046 / 2,040

1, 6, 12 Rel Perf (%) 13 / 8 / 37



Net Op. Income 10,237 12,035 12,429 13,885 12,390 48,724 50,876

Change (%) 8.3 29.0 2.4 -2.6 21.0 7.3 4.4

EBITDA 3,529 2,905 2,854 2,168 2,953 11,611 11,984

Change (%) 17.2 10.1 -21.5 -53.3 -16.3 -18.3 3.2

EBITDA Margin (%) 34.5 24.1 23.0 15.6 23.8 23.8 23.6

Reported PAT 3,141 3,448 2,745 2,436 2,729 11,770 12,327

Adjusted PAT 3,141 3,448 2,745 2,436 2,729 11,770 12,327

Change (%) 40.3 23.3 -2.9 -38.4 -13.1 -0.4 4.7

PAT Margin (%) 30.7 28.7 22.1 17.5 22.0 24.2 24.2


VSF Volume (t) 54,839 78,959 78,215 94,904 77,013 306,917 338,428

Realiz.(INR/t) 152,409 124,689 128,499 121,293 128,024 129,563 127,293

Cem. Volume (mt) 9.86 9.22 10.11 11.54 10.33 40.7 43.8

E: MOSL Estimates

Key news flows / triggers to watch Entered into agreement to acquire 40% stakein

Terrace Bay Inc (US-based paper grade pulp maker)

for USD44m.

Grasim's capex program to add 156,500 tons of VSF

capacity is on track:

(1) Harihar brownfield addition of 36,000 tons in

two phases by Aug-12 and Jan-13, and

(2) Vilayat greenfield addition of 120,000 tons by

4QFY13.

It is also expanding pulp capacity in Domsjo by 45,000

tons to 255,000 tons, which is expected to be

operational by 2QFY13.

1QFY13 highlights; guidance for FY13, FY14 1QFY13 VSF volumes were ahead of estimate at

77,013 tons (v/s estimate 73,375 tons), up 40% YoY

(-19% QoQ).

Average realization was also ahead of estimate at

INR128/kg (v/s estimate INR125/Kg).

Higher realizations and softening costs (e.g. pulp

prices down 3% QoQ ) led to PBDIT margin improving

710bp QoQ.

Grasim indicated that it does not see any further

downside to VSF prices, as at current levels of global

VSF prices, Chinese players would be making

losses. Chinese players are operating at 65-68%

utilizations.

59August 27 - 31, 2012


Grasim Industries: Financials and valuation

VSF business - Key assumptions

FY11 FY12 FY13E FY14E

Capacity (ton) 333,975 333,975 490,475 490,475

Sales volume (ton) 305,072 306,917 338,428 362,952

Net Turnover (INR m) 41,695 42,924 46,440 50,587

Avg Realiz. (INR/ton) 126,614 129,563 127,293 129,293

PBIDT Margin (%) 35.5 27.2 25.3 25.8

PBDIT (INR m) 14,793 11,673 11,772 13,036


Y/E March 2011 2012 2013E 2014E

Net Sales 213,183 249,878 269,921 308,646

Change (%) 6.9 17.2 8 14.3

EBITDA 47,635 53,184 62,923 72,112

Change (%) -17.7 11.7 18.3 14.6

Margin (%) 22.3 21.3 23.3 23.4

Depreciation 11,384 11,544 12,108 15,363

Interest cost 4,068 3,136 2,868 2,810

Other Income - Rec. 6,310 10,018 10,306 9,906

PBT after EO items 38,494 48,522 58,252 63,845

Tax Rate (%) 24.8 27.2 26.2 27.4

Consolidated PAT 22,790 26,475 31,673 34,098

Change (%) -16.6 16.2 19.6 7.7

Consolidated Balance Sheet

Y/E March 2011 2012 2013E 2014E


Net Worth 145,586 170,687 199,140 229,483

Loans 67,827 65,513 62,420 57,420

Deferred liabilities 19,616 19,790 19,790 19,711



Net Fixed Assets 144,316 153,140 176,532 244,169

Capital WIP 13,578 22,000 70,000 20,000

Investments 79,185 78,758 58,670 76,404

Goodwil l 24,191 24,964 24,964 24,964

Curr. Assets 58,797 86,483 71,529 81,791

Inventory 27,229 30,711 32,390 37,037

Debtors 14,346 17,288 17,545 20,062

Cash & Bank Bal. 2,844 3,252 4,049 4,630

Others 14,378 35,232 17,545 20,062





Appl. of Funds 276,542 308,324 345,012 382,512

Ratios

Y/E March 2011 2012 2013E 2014E

Basic (INR)

EPS 248.5 288.6 345.3 371.8

Cash EPS 371 458 534.7 586.8

BV/Share 1,587 1,861 2,171 2,502

DPS 20 22.5 30 35

Payout (%) 9.4 9 10.2 11

Valuation (x)

P/E 12 10.3 8.6 8

Cash P/E 8 6.5 5.6 5.1

P/BV 1.9 1.6 1.4 1.2

EV/ EBITDA 6.6 6.6 5.9 4.8

Dividend Yield (%) 0.7 0.8 1 1.2

EV/Ton (US$) 115 121 124 90

Return Ratios (%)

RoE 15.7 15.5 15.9 14.9

RoCE 19.9 21.9 23.4 23.2





Leverage Ratio

Debt/Equity (x) 0.5 0.4 0.3 0.3

Consolidated Cash Flow Statement

Y/E March 2011 2012 2013E 2014E


Interest/Div./ Recd. 6,310 10,018 10,306 9,906


(Inc)/Dec in WC -8,311 -13,781 15,413 -1,549


(inc)/dec in FA -23,751 -28,790 -83,500 -33,000

(Pur)/Sale of Invest. -16,742 -347 20,088 -17,734

CF from Invest. -40,493 -29,136 -63,412 -50,734

Issue of Shares -304 1,020 0 0

(Inc)/Dec in Debt 11,835 -2,314 -3,093 -5,000

Interest Paid -4,068 -3,136 -2,868 -2,810

Dividend Paid -2,146 -2,394 -3,219 -3,756

CF from Fin. Activity 5,317 -6,824 -9,181 -11,566

Inc/Dec of Cash 474 428 797 581

Add: Beginning Bal. 2,370 2,844 3,252 4,049

Closing Balance 2,844 3,252 4,049 4,630

August 27 - 31, 2012 60


HDFC



Promoter 0.0 0.0 0.0

Dom. Inst. 15.1 15.4 14.3

Foreign 71.3 70.8 73.3

Others 13.6 13.9 12.4

Stock info

Bloomberg HDFC IN


CMP (INR) 712

Mcap (USD b) 19.0

52-Wk Range (INR) 726 / 601

1, 6, 12 Rel Perf (%) 1 / 3 / 3



Net Int. Income 10,948 12,435 12,364 17,434 13,042 52,121 63,852

YoY Change (%) 17.1 14.7 15.1 27.2 19.1 16.3 22.5

Profit on Sale of Inv. 163 869 880 791 202 2,702 2,500

Other oper. income 1,909 1,430 1,306 1,233 2,223 6,939 8,524

Net Oper. Income 13,020 14,734 14,549 19,458 15,467 61,762 74,876

Pre Provi. Profit 11,935 13,547 13,483 18,491 14,199 57,456 69,622

YoY Change (%) 21.6 17.9 9.8 17.1 19.0 16.4 21.2

PAT 8,445 9,707 9,813 13,261 10,019 41,226 49,225

YoY Change (%) 21.6 20.2 10.1 16.1 18.6 16.6 19.4


AUM Growth (%) 20.6 20.2 20.7 20.2 19.2 20.2 22.0

Spreads (%; Cum.) 2.30 2.29 2.27 2.27 2.27 2.27 NA

GNPA (%) 0.83 0.82 0.82 0.74 0.79 0.74 0.74

E: MOSL Estimates

Company descriptionHousing Development Finance Corporation (HDFC) is

India's largest housing finance company, operating

through a pan India network of 318 outlets. Its AUM

size was INR1.6t as on 30th June 2012 with 2/3rd of the

portfolio coming from individual loans. Besides the

core housing finance business, HDFC has interest in

banking, insurance and asset management businesses

through its group companies.

Key investment positives Across the cycle, HDFC has demonstrated a

successful track record of healthy growth. Over

FY02-12, disbursements and sanctions have both

grown @ 25% CAGR each. During the same period,

individual loans (including sell-downs) grew @ 23%.

Despite higher interest rates and elevated property

prices in India, HDFC's sanctions and disbursements

growth remains healthy at 17% and 20% in 1QFY13.

HDFC has done a commendable job of managing

spreads in the range of 2.1-2.3% irrespective of the

interest rate cycle and competitive pressure. With

the teaser loan portfolio repricing and expected fall

in interest rates, we expect HDFC to comfortably

maintain spreads in its stated band of 2.1-2.3%.

HDFC has demonstrated its superior credit appraisal

capabilities by maintaining healthy asset quality

with gross NPAs remaining below 1%.

Its subsidiaries/associates have grown sizably and

become self-sufficient. The life insurance business

has turned profitable and should not need further

capital infusion. HDFC does not need to dilute

capital to fund subsidiaries; strong core RoE's will

help fund own growth. Value unlocking through

listing of insurance subsidiary could provide capital

for infusion in HDFC Bank, as and when needed.

Key challenges Continued change in regulation from NHB relating

to (a) Teaser loan portfolio, (b) uniform rates for

existing and new customers could act as a deterrent

to growth and margins.

Moderation in economic growth and high real

estate prices may impact overall demand.

Key news flows / triggers to watch Warrants issued in September 2009 to get converted

into equity in August 2012.

Any announcement by NHB related to capital

requirements.

Listing of insurance venture.

1QFY13 highlights; guidance for FY13, FY14 Performance highlights of 1QFY13: Individual loan

growth (including sell down) of 22%, spread at

227bp, GNPA ratio of 79bp, interest on ZCBs of

INR1.5b charged to reserves, and CAR at 14.6% with

Tier I ratio of 11.6%.

Guidance for FY13-14: Loan growth of 18-20%,

spreads in the range of 2.15-2.35%, Consolidated

ROE to improve 100bp every year (except FY13 due

to warrant conversion), stable cost to income ratio.

61August 27 - 31, 2012


HDFC: Financials and valuation

Income statement (INR Million)

Y/E March 2011 2012 2013E 2014E

Interest Income 120,431 163,689 203,277 236,504



Change (%) 25.3 16.3 22.5 21.0

Fees and Other Charges 2,204 2,684 3,419 4,034

Net Int. Inc. (incl fees) 47,035 54,805 67,270 81,271

Change (%) 23.5 16.5 22.7 20.8

Other Operating Income 5,894 6,957 7,606 8,627

Miscellanous Income 251 213 250 275

Net Income 53,181 61,975 75,126 90,173

Change (%) 23.7 16.5 21.2 20.0



Change (%) 24.2 16.4 21.2 20.0

Provisions/write offs 700 800 1,958 2,187

Reported PBT 48,670 56,656 67,664 81,338

Tax 13,320 15,430 18,438 22,165

Tax Rate (%) 27.4 27.2 27.3 27.3

Reported PAT 35,350 41,226 49,225 59,173

Change (%) 25.1 16.6 19.4 20.2

PAT adjusted for EO 35,350 41,226 49,225 59,173

Change (%) 25.1 16.6 19.4 20.2

Balance sheet (INR Million)

Y/E March 2011 2012 2013E 2014E

Capital 2,934 2,954 3,063 3,063


Net Worth 173,165 190,176 244,008 274,473

Loans from Banks 424,898 406,966 460,313 560,947

Bonds/Debentures 482,956 621,381 745,657 894,789

Deposits 243,269 362,928 417,367 479,972

Borrowings 1,151,123 1,391,275 1,623,338 1,935,708

Change (%) 19.2 20.9 16.7 19.2


Housing Loans 1,171,266 1,408,746 1,726,955 2,081,406

Change (%) 19.6 20.3 22.6 20.5

Investments 118,324 122,070 128,174 134,582

Change (%) 10.3 3.2 5.0 5.0

Total Assets 1,324,288 1,581,451 1,867,346 2,210,181

Ratios

Y/E March 2011 2012 2013E 2014E


Avg Yield on Housing Loans 10.5 11.8 12.1 11.6

Avg. Yield on Earning Assets 9.8 11.1 11.6 11.4





RoE 21.7 22.7 22.7 22.8

Adjusted RoE 26.6 27.3 29.4 30.9

RoA 2.9 2.8 2.9 2.9

Adjusted RoA 2.8 2.7 2.7 2.8





Empl. Cost/Op. Exps. 46.1 45.5 44.9 44.6

Valuation

Book Value (INR) 118.1 128.8 159.3 179.2

Price-BV (x) 5.3 4.3 3.8

Adjusted BV* (INR) 91.2 100.5 105.9 125.8

Adj Price-ABV (x) 5.0 4.5 3.6

EPS (INR) 24.1 27.9 32.1 38.6

EPS Growth (%) 22.4 15.8 15.1 20.2

Adj Price-Earnings (x) 18.0 15.0 11.6

Adjusted EPS (INR)# 22.6 26.0 29.8 35.7

Adjusted EPS Growth (%) 21.8 15.1 14.4 20.0

Adj Price-Adj EPS (x) 19.3 16.1 12.5

Dividend per share (INR) 9.0 11.0 12.2 14.7

Dividend yield (%) 1.6 1.8 2.1

E: MOSL Estimates; * BV is adj. by deducting investments in keyventures from NW; # Adjusted EPS is adjusting for dividendfrom key ventures

August 27 - 31, 2012 62




Promoter 23.1 23.2 23.3

Dom. Inst. 10.7 10.5 11.1

Foreign 49.0 48.8 47.7

Others 17.3 17.5 17.9

Stock info

Bloomberg HDFCB IN


CMP (INR) 595

Mcap (USD b) 25.1

52-Wk Range (INR) 610 / 400

1, 6, 12 Rel Perf (%) -1 / 16 / 22



Net Int. Income 28,480 29,445 31,160 33,883 34,841 122,968 148,233

% Change (Y-o-Y) 18.6 16.6 12.2 19.3 22.3 16.6 20.5

Other Income 11,200 12,117 14,200 14,920 15,295 52,437 68,990

Operating Exp. 19,346 20,304 21,580 24,671 24,326 85,901 102,860


% Change (Y-o-Y) 16.3 17.6 14.7 15.1 26.9 15.9 27.8


Net Profit 10,850 11,994 14,297 14,531 14,174 51,671 67,257

% Change (Y-o-Y) 33.7 31.5 31.4 30.4 30.6 31.6 30.2

Loan Growth (%) 20.0 20.0 22.1 22.2 21.5 22.2 22.0

NIM (%) 4.2 4.1 4.1 4.2 4.3 4.2 4.1

Gross NPA (%) 1.0 1.0 1.0 1.0 1.0 1.0 1.3

E: MOSL Estimates

Company descriptionHDFC Bank (HDFCB) is India's largest retail bank and

second largest private sector bank, with balance sheet

size of INR3.6t+. Backed by its consistent performance

(enviable track record of 52 quarters of 30%+ earnings

growth), HDFCB enjoys highest market capitalization

among Indian banks. Retail assets and liabilities are its

core strategy. Rated as one of the best banks in India, it

has 2,550+ branches and 9,700+ ATMs across the country.

Key investment positives HDFCB is best placed in the current environment,

with (1) CASA ratio of ~46%, (2) growth outlook of

1.3x the industry, and (5) best-in-class asset quality.

HDFCB's loan growth is expected to stay strong due

to (1) sharper focus on medium/long tenure

corporate loans, (2) strong demand for auto loans,

and (3) growth from rural and semi-urban areas for

existing products.

Strong CASA ratio and a higher share of retail loans

helped HDFCB to post NIMs (on total assets) of 4%+.

It is expected to retain its funding cost advantage

through strong focus on new customer acquisitions

and floats from multiple transaction banking

franchises. In a falling interest rate scenario, higher

share of fixed rate loans will also cushion margins.

A third of HDFCB's branches are less than 24 months

old; further, a large part of branch expansion

happened outside top 9 cities, where break-even

period is 24-30 months. This strong expansion in

hinterland will help (1) customer acquisition, (2)

product penetration, and (3) priority sector targets.

HDFC Bank

HDFCB also carries floating provision of INR16.75b

(INR7/share) created during FY11-12 to smoothen

earnings growth led by better than factored in

credit cost on retail loans. In FY13/14, even though

slippages might get normalized to average levels

in retail segment and credit cost would increase,

buffer on account of higher base due to floating

provisions would provide cushion to earnings.

Key challenges Lower systemic loan growth and expected increase

in credit cost pose threat to 30% earnings growth.

Operating efficiencies and improvement in

productivity remain key.

Key news flows / triggers to watch Retail loans asset quality is the decadal best,

increase in stress here could threaten earnings.

Competitors' strategy on retail products need to be

watched. Recently Axis, Yes, IndusInd, State Bank

and foreign banks have become very aggressive.

1QFY13 highlights; guidance for FY13, FY14 Performance highlights of 1QFY13: (a) Above

industry loan growth (+9% QoQ, 22% YoY), (b) NIM

of 4.3% (+10bp QoQ), (c) strong fee income (+23%

YoY), (d) SA deposits up 4% QoQ and 18% YoY, and

(e) stable asset quality.

Guidance for FY13-14: Loan growth 3-5% higher than

system, margins of 3.9-4.3%, fall in cost to income

ratio with higher productivity and ageing of new

branches, and annual addition of 250-300 branches.

63August 27 - 31, 2012


HDFC Bank: Financials and valuation


Y/E March 2011 2012 2013E 2014E

Interest Income 199,282 272,864 335,204 392,809



Change (%) 25.7 16.6 20.5 20.3


Net Income 148,783 175,405 217,224 263,361

Change (%) 20.3 17.9 23.8 21.2



Change (%) 20.2 15.9 27.8 24.3


PBT 58,187 75,132 98,544 122,361

Tax 18,923 23,461 31,288 38,544

Tax Rate (%) 32.5 31.2 31.8 31.5

PAT 39,264 51,671 67,257 83,817

Change (%) 33.2 31.6 30.2 24.6


Core PPP* 77,780 91,463 111,364 137,679

Change (%) 27.8 17.6 21.8 23.6



Y/E March 2011 2012 2013E 2014E



Net Worth 253,793 299,247 350,766 414,971

Deposits 2,085,864 2,467,064 2,985,148 3,701,584

Change (%) 24.6 18.3 21.0 24.0

of which CASA Dep 1,099,083 1,194,059 1,372,663 1,647,196

Change (%) 26.2 8.6 15.0 20.0

Borrowings 143,941 238,465 243,581 256,397



Current Assets 296,688 209,377 245,251 316,212

Investments 709,294 974,829 1,121,053 1,289,211

Change (%) 21.0 37.4 15.0 15.0

Loans 1,599,827 1,954,200 2,384,124 2,980,155

Change (%) 27.1 22.2 22.0 25.0

Fixed Assets 21,706 23,472 25,365 27,660

Other Assets 146,011 217,216 325,825 488,737

Total Assets 2,773,526 3,379,095 4,101,618 5,101,977

Asset Quality (%)

Y/E March 2011 2012 2013E 2014E

GNPA (INR m) 16,943 19,994 31,263 55,169

NNPA (INR m) 2,964 3,523 7,692 15,165

GNPA Ratio 1.05 1.01 1.30 1.83

NNPA Ratio 0.19 0.18 0.32 0.51


E: MOSL Estimates

Ratios

Y/E March 2011 2012 2013E 2014E




Avg. Yield on Invt 7.2 7.7 7.5 7.3






RoE 16.7 18.7 20.7 21.9

RoA 1.6 1.7 1.8 1.8





Cost/Income* 47.9 48.4 48.0 46.8

Empl. Cost/Op. Exps. 39.6 39.6 40.3 40.4



* ex treasury


Loans/Deposit 76.7 79.2 79.9 80.5

CASA Ratio 52.7 48.4 46.0 44.5

Investment/Deposit 34.0 39.5 37.6 34.8

G-Sec/Investment 75.6 78.2 74.6 77.5

CAR 16.2 16.5 15.1 13.6

Tier 1 12.2 11.6 11.0 10.3

Valuation

Book Value (INR) 109.1 127.4 149.4 176.7

Change (%) 16.0 16.8 17.2 18.3

Price-BV (x) 4.7 4.0 3.4

Adjusted BV (INR) 108.2 126.4 147.1 172.2

Price-ABV (x) 4.7 4.0 3.5

EPS (INR) 16.9 22.0 28.7 35.7

Change (%) 31.0 30.4 30.2 24.6


Dividend Per Sh (INR) 3.3 4.3 5.7 7.1


E: MOSL Estimates

August 27 - 31, 2012 64


Hero MotorCorp



Promoter 52.2 52.2 52.2

Dom. Inst. 5.9 5.6 4.6

Foreign 33.3 33.5 33.8

Others 8.5 8.7 9.5

Stock info

Bloomberg HMCL IN


CMP (INR) 1,930

Mcap (USD b) 6.9

52-Wk Range (INR) 2279 / 1703

1, 6, 12 Rel Perf (%) -11 / -5 / -5



Net Op. Income 56,376 57,843 59,836 59,625 62,078 233,681 261,940

Change (%) 32.2 28.2 16.9 11.4 10.1 21.4 12.1

EBITDA 6,020 6,637 6,669 6,449 6,694 25,775 29,015

Change (%) 5.5 17.0 25.1 5.2 11.2 12.9 12.6

EBITDA Margin (%) 10.7 11.5 11.1 10.8 10.8 11.0 11.1

Adjusted PAT 5,579 6,036 6,130 6,036 6,155 23,781 26,406

Change (%) 13.5 19.4 24.3 20.3 10.3 18.5 11.0


Volumes (m units) 1.53 1.54 1.59 1.57 1.64 6.24 6.80

Realiz. (INR) 36,858 37,456 37,649 37,929 37,799 37,478 38,541

RM Cost (%) 75.3 73.0 73.4 74.1 74.1 74.0 74.0

E: MOSL Estimates

Company descriptionHero MotoCorp (HMCL), erstwhile JV between Honda

Corporation Japan and the Munjal family, is the leader

in India's domestic motorcycle market with ~45% share.

It has a strong dealer network and high penetration in

rural areas (~45% of sales). Post split from Honda, HMCL

is free to tap global opportunity in 2W.

Key investment positives Strong franchise of Splendor & Passion, and wide

distribution reach makes it best placed to tap strong

demand growth, especially in rural markets. We

estimate ~9% volume growth in FY13 to 6.8m.

Apart from recent launch of Impulse and Maestro,

HMCL further plans to launch the 125cc Ignitor and

110cc Passion XPro (both showcased at Auto Expo

2012) along with 5-6 other model refreshes in FY13.

Model launches and addition of 500 dealers should

reduce impact of demand slowdown, if any.

Margins to improve from historical low levels,

driven by vendor rationalization, operating

leverage, and completion of fixed royalty payment

by Jun-14.

Post split with Honda, Hero MotoCorp is free to

explore global markets; it is targeting exports of 1m

units by FY16 (of total target sales of 10m units).

The company has announced plans to invest

INR25.75b in the coming years to (1) expand

capacity (by 2m units to 9m units), (2) set up a part

distribution centre (Rajasthan) and R&D center.

Key challenges Maintaining market share amidst rising competitive

pressure to test pricing power and margins.

Ensure continuous flow of new/refreshed products.

Weak INR may put pressure on margins.

Scaling up nascent export business, where it is late

entrant.

Key news flows / triggers to watch Announces capex plan of ~INR26b over FY13-14, to

add 2m capacity (at two new plants), R&D center.

Performance of the Hero branded products,

particularly in the rural markets.

Response to new launches of Ignitor and Maestro.

1QFY13 highlights; guidance for FY13, FY14 1QFY13 realization was flat QoQ (+2.6% YoY) at

INR37,799 (v/s est INR38,284) impacted by adverse

market mix, despite price increases in April & May

and higher excise benefit at Haridwar plant.

Adj EBITDA margin was flat QoQ and YoY at 10.8% as

benefit of operating leverage was offset by hit of

weaker INR on RM and royalty. Higher other income

and lower tax boosted reported PAT to INR6.15b.

While consumer sentiments remain weak, it

maintained its industry growth guidance at 9-10%

for FY13. It expects short-run margins to remain

under pressure due to weaker INR and increase in

advertising spends.

Plans to start exports to Africa and LatAm in 2QFY13.

65August 27 - 31, 2012


Hero MotorCorp: Financials and valuation


Y/E March 2011 2012 2013E 2014E

Total Op. Income 192,450 233,681 261,940 300,369

Change (%) 22.1 21.4 12.1 14.7

EBITDA 24,603 34,078 37,715 44,179

Adj. EBITDA (%) 11.8 11 11.1 11.8

Depreciation 4,024 10,973 11,693 12,105

Interest -19 213 120 100

Other Income 4,249 5,756 5,722 6,618

PBT 24,048 28,647 31,624 38,592

Effective tax Rate (%) 19.8 17 16.5 24.3

Adj. PAT 20,077 23,781 26,406 29,205

Change (%) -10 18.4 11 10.6


Y/E March 2011 2012 2013E 2014E


Net Worth 29,501 42,839 56,394 71,580

Loans 14,912 10,114 3,028 327


Net Fixed Assets 40,803 33,504 46,511 53,106

Capital WIP 1,251 5,000 1,000 1,000

Investments 51,288 39,643 39,643 39,643

Curr.Assets, Loans 15,046 20,743 31,420 44,965

Inventory 5,249 6,756 7,573 8,684

Sundry Debtors 1,306 2,723 3,052 3,500

Cash/ Bank Bal. 715 768 9,030 19,290




Appl. of Funds 46,940 55,035 61,505 73,990


Y/E March 2011 2012 2013E 2014E

Volumes ('000 units) 5.4 6.24 6.8 7.65

Growth (%) 17.4 15.4 9 12.5

Realizations (INR/unit) 35,623 37,478 38,541 39,285

Growth (%) 4 5.2 2.8 1.9

RM Cost (% of sales) 73.3 74 74 73.5

FCF (CFO-Capex) 20,768 3,720 28,198 26,980

Net Debt -37,091 -30,297 -45,644 -58,605

Ratios

Y/E March 2011 2012 2013E 2014E

EPS (INR) 100.5 119.1 132.2 146.2

EPS Growth (%) -10 18.4 11 10.6

Cash EPS (INR) 107.6 132.1 147.2 163.3

Book Value per Share 148 214.8 282.7 358.7

DPS (INR) 105 45 55 60


Valuation (x)

P/E 15.8 14.2 12.8

Cash P/E 14.2 12.8 11.5

EV/EBITDA 10.1 8.7 7.2

EV/Sales 1.5 1.3 1.1

Price to Book Value 8.7 6.6 5.2



RoE 62.5 55.4 46.8 40.8

RoCE 59.2 52.4 51.6 52.3

Leverage Ratio

Debt/Equity (x) 0.5 0.2 0.1 0


Y/E March 2011 2012 2013E 2014E

Profit before Tax 24,048 28,647 31,624 38,592



Inc/Dec in Working Capital 2,181 -23,238 10,799 4,370

Extra-ordinary Items -798 0 0 0

CF after EO Items 23,262 11,517 48,898 45,680

(Inc)/Dec in FA+CWIP -3,292 -7,797 -20,700 -18,700

(Pur)/Sale of Invest. -9,994 11,645 0 0

CF from Inv. Activity -13,286 3,848 -20,700 -18,700

Inc/(Dec) in Debt -333 -4,798 -7,086 -2,701

Interest Paid -158 0 0 0

Dividends Paid -9,401 -10,514 -12,851 -14,019


Inc/(Dec) in Cash 84 53 8,262 10,260

Add: Beginning Balance 632 715 768 9,030

Closing Balance 716 768 9,030 19,290

August 27 - 31, 2012 66


Hindalco Industries



Promoter 32.1 32.1 32.1

Dome. Inst. 15.2 14.9 12.8

Foreign 36.5 37.5 42.4

Others 16.2 15.5 12.7

Stock info

Bloomberg HNDL IN


CMP (INR) 114

Mcap (USD b) 3.9

52-Wk Range (INR) 165 / 105

1, 6, 12 Rel Perf (%) -8 / -21 / -25

Company descriptionHindalco (HNDL) is the largest aluminum producer in

India. It has captive bauxite mines from which it sources

67% of the requirement for its 1.5mtpa alumina refinery.

The company also has a 0.54mtpa smelting capacity and

is the largest maker of flat-rolled aluminum products

in India. After turning Novelis around in 2010, HNDL is

focusing on tripling its aluminum production capacity

in India in the next three years through brownfield and

greenfield projects. Its copper smelting capacity of

500ktpa is the largest in Asia.

Key investment positives Its new smelting capacities are coming up near

energy sources and its alumina facilities are near

bauxite mines, ensuring low cost of production.

We expect Novelis to deliver strong earnings

growth, given its focus on high-margin business,

expansions in its key markets, and continued efforts

to improve operating efficiencies across its

locations.

Key challenges Unexpected fall in aluminum prices, sluggish growth

in developed countries, and further delays in

expansion could adversely impact earnings.

Key news flows / triggers to watch Mahan coal mine is very critical for the viability of

359ktpa Mahan aluminum smelter, which is being

set up with capex of INR105b. Timely start of coal

mining will lead to rerating of the company.

Current LME prices for aluminium at USD1,850/ton

are close to marginal cost of production. Stronger

spot regional premiums and subsidies by Chinese

and Australian governments have so far prevented

production cutbacks. Significant capacity shutdowns

will boost prices in subdued demand scenario.

1QFY13 highlights; guidance for FY13, FY14 Hindalco standalone 1QFY13 performance was

below estimate due to disappointing copper

segment and production disturbances at aluminum

smelter. Dividends from subsidiaries boosted other

income, and Adj S/A PAT at INR4.2b was broadly in-

line with estimate of INR4.4b.

Novelis' adjusted EBITDA improved QoQ on

expected lines to USD259m. Novelis is experiencing

gradual recovery in volumes with 3% QoQ growth.

Hindalco will commission Hirakud smelter

expansion from 155kt to 213kt and 200kt FRP

facilities by end of FY13. Further, 1.5mtpa Uktal

Alumina is likely to get commissioned by end of

FY13 although uncertainty still persists. We are

modeling in 600kt incremental alumina volume

from Utkal in FY14.

Mahan smelters are in advance stage, but the actual

commissioning is being delayed due to weak LME.

So far, INR222b has been spent on all Indian projects

with total capex of INR306b.




Change (%) 16.5 7.0 11.3 11.7 0.0 11.5 1.4

EBITDA 8,671 6,692 7,149 8,648 4,631 31,160 24,462

Change (%) 4.2 -7.1 -3.4 -1.0 -46.6 -1.6 -21.5

EBITDA Margin (%) 14.4 10.7 10.8 11.3 7.7 11.7 9.1

Reported PAT 6,440 5,025 4,507 6,400 4,248 22,372 17,115

Adjusted PAT 6,440 5,025 4,507 6,400 4,248 22,372 17,115

Change (%) 20.5 10.2 -2.1 -4.1 -34.0 5.6 -23.5

PAT Margin (%) 10.7 8.0 6.8 8.4 7.0 8.4 6.3


Alumina (Prodn, kt) 335 332 343 345 335 1355 1400

Aluminium (sales,kt) 131 129 147 149 124 556 564

Copper (sales, kt) 73 75 84 94 71 325 332

E: MOSL Estimates

67August 27 - 31, 2012


Hindalco Industries: Financials and valuation


Y/E March 2011 2012 2013E 2014E

Net sales 720,779 808,214 802,787 840,886

EBITDA 85,868 81,897 85,602 100,019

% of Net Sales 11.9 10.1 10.7 11.9


EBIT 58,368 53,199 60,512 71,625

Net Interest 14,411 17,579 19,082 23,661

Other income 4,309 7,831 7,907 4,905

PBT before EO 48,266 43,450 49,337 52,869

EO income -9,834 -14,616 -54

PBT after EO 38,432 28,834 49,284 52,869

Tax 9,638 7,862 12,223 12,448

Reported PAT 28,793 20,972 37,061 40,421

Minority interests 3,659 2,113 1,089 1,089

Share of asso. 29 496 29 29

Adjusted PAT 34,998 33,970 36,054 39,360

Balance Sheet

Y/E March 2011 2012 2013E 2014E

Share Capital 1,990 1,990 1,990 1,990

Reserves 288,243 310,762 343,334 379,265

Net Worth 290,233 312,752 345,324 381,255


Total Loans 276,920 361,920 411,920 416,920



Gross Block 392,654 426,359 436,859 530,259

Less: Accum. Deprn. 158,014 182,873 207,962 236,356

Net Fixed Assets 234,640 243,486 228,896 293,902

Goodwill on consolid. 123,940 123,940 123,940 123,940

Capital WIP 131,308 228,770 323,795 281,345

Investments 20,124 20,124 20,124 20,124

Curr. Assets 333,746 290,061 295,243 325,235

Inventory 140,956 128,021 126,560 135,184



Others 33,334 33,334 33,334 33,334



Provisions & Others 52,149 51,971 51,971 51,971


Appl. of Funds 626,918 725,395 811,709 856,240


Y/E March 2011 2012 2013E 2014E

Alumina (Production, kt) 1,353 1,355 1,400 2,000

Aluminium (sales, kt) 535 556 564 700

Copper (sales, kt) 330 325 332 333

Exchange USD/INR 45.6 47.9 53.5 52.0

Avg LME Al (USD/T) 2,282 2,352 1,996 2,100

EBITDA-Al (INR m) 24,223 21,309 14,118 27,272

EBITDA-Cu (INRm) 7,441 9,851 10,343 10,861

Ratios

Y/E March 2011 2012 2013E 2014E

Basic (INR)

EPS 17.6 17.1 18.1 19.8

Cash EPS 28.3 25.0 31.2 34.6

BV/Share (adj.) 83.6 94.9 111.2 129.3

DPS 1.5 1.5 1.5 1.5

Payout (%) 8.5 8.8 8.3 7.6

Valuation (x)

P/E 6.7 6.3 5.8

Cash P/E 4.6 3.6 3.3

P/BV 1.2 1.0 0.9

EV/Sales 0.7 0.7 0.7

EV/EBITDA 6.5 6.8 5.7


Return Ratios (%)

RoE 23.1 19.1 17.6 16.4

RoCE (pre-tax) 10.2 7.9 7.9 8.6

RoIC (pre-tax) 15.6 13.0 14.6 16.2

Growth (%)

Sa les 18.7 12.1 -0.7 4.7

EBITDA 21.9 -4.6 4.5 16.8

PAT 279.5 -2.9 6.1 9.2

Leverage Ratio (x)


Interest Cover Ratio 4.1 3.0 3.2 3.0

Debt/Equity 1.2 1.6 1.6 1.3


Y/E March 2011 2012 2013E 2014E

EBITDA 85,868 81,897 85,602 100,019

Non-cash items in EBITDA -3,443 -20,905 -53.5

tax paid -13,131 -7,862 -8,481 -8,849

Change in working Capital-7,031 -18,287 1,044 -5,180


(Inc)/Dec in FA + CWIP -77,171 -131,167 -105,525 -50,950

(Pur)/Sale of Investments& yield thereon 5,143 6,213 6,846 3,844


Equity raised/(repaid) 99

Debt raised/(repaid) 37,384 85,000 50,000 5,000

Interest -25,410 -17,579 -19,082 -23,661

Dividend (incl. tax) -3,838 -3,429 -3,429 -3,429

CF from Fin. Activity 8,236 63,992 27,490 -22,089

(Inc)/Dec in Cash -1,528 -26,119 6,923 16,796


Closing Balance 79,461 53,342 60,265 77,061

August 27 - 31, 2012 68


Hindustan Unilever



Promoter 52.5 52.5 52.5

Dom. Inst. 9.9 10.3 11.8

Foreign 20.4 19.8 18.7

Others 17.2 17.4 17.0

Stock info

Bloomberg HUVR IN


CMP (INR) 502

Mcap (USD b) 19.5

52-Wk Range (INR) 504 / 311

1, 6, 12 Rel Perf (%) 9 / 34 / 54

Company descriptionHindustan Unilever (HUL, a 52.5% Unilever subsidiary)

is one of the largest Consumer companies in India with

presence across segments like Household and Personal

Care, Processed Foods and Water (Purifier). It has

leading market shares in Toilet Soaps, Detergents, Skin

Care and Shampoos and has strong presence in oral care,

coffee, tea and processed foods categories.

Key investment positives HUL has the widest product range in Indian

Consumer space, and being a subsidiary of Unilever,

has access to a host of products, brands and the

latest technology. Aggressive new product launches

and increasing innovation are key positives.

HUL has the largest distribution network in the

entire Consumer universe; it expanded direct rural

reach by 0.5m outlets in FY11 and plans to further

expand rural distribution.

Sustained growth in Soaps and detergents and

personal products is a key positive.

Key challenges After 4 quarters of ~10% volume growth, further

price hikes could moderate volume growth.

Continued high competitive intensity is likely to

keep ad spends at high levels which remains a key

challenge and could restrict margin expansion.

Key news flows / triggers to watch Volume growth trend in soaps & detergents and

personal care products (PP) in the coming quarters.

Gross margin and EBITDA margin trends.

Success of new launches in skin care, hair care, oral

care and processed foods.

Level of competitive activity by players like ITC,

P&G, Godrej Consumer, Colgate and L'Oreal.

1QFY13 highlights; guidance for FY13, FY14 1QFY13 revenue grew 14% YoY, EBITDA margin

expanded 170bp YoY and Adj PAT grew 28% YoY.

Soaps & detergents sales grew 23.7% while EBIT

grew 63%, as margins expanded 300bp to 12.2%.

Laundry products reported robust double-digit

growth.

Personal products sales grew 16.7%, with healthy

performance in Skin Care, Hair Care and Oral Care.

Over FY12-14, we expect double-digit growth to

continue in the Personal Products segment, with

~25% EBIT margin. Also, Soaps & detergents margins

should sustain at ~12%.




Change (%) 14.6 17.8 16.2 16.1 14.1 12.1 17.3

EBITDA 7,543 8,267 9,890 8,334 9,665 32,913 39,626

Change (%) 10.8 27.8 36.4 29.8 28.1 22.9 20.4

EBITDA Margin (%) 13.5 14.7 16.6 14.5 15.2 14.9 15.3

Reported PAT 6,172 6,889 7,538 6,866 13,312 26,914 32,201

Adjusted PAT 5,684 6,525 7,622 6,636 7,265 25,725 32,201

Change (%) 9.1 22.3 29.9 29.0 27.8 22.6 25.2

PAT Margin (%) 10.2 11.6 12.8 11.5 11.4 11.6 12.4


Volume Growth (%) 8.3 9.8 9.1 10.0 9.0 9.3 9.0

S& D EBIT margin (%) 9.2 12.4 13.5 11.3 12.2 11.6 12.5

PP EBIT margin (%) 25.3 24.4 25.9 26.3 25.8 25.5 25.3

E: MOSL Estimates

69August 27 - 31, 2012


Hindustan Unilever: Financials and valuation


Y/E March 2011 2012 2013E 2014E

Net Sales 194,011 217,356 255,319 284,554

Other Oper. Income 3,341 3,808 4,157 4,611

Total Revenue 197,352 221,164 259,476 289,164

Change (%) 11.3 12.1 17.3 11.4

COGS 100,569 117,378 135,733 151,008

Gross Profit 96,783 103,786 123,744 138156

Operating Exp 69,790 70,873 84,117 92,949

EBITDA 26,993 32,913 39,626 45,207

Margin (%) 13.7 14.9 15.3 15.6

Depreciation 2,208 2,182 2,357 2,721


Other Income - Recurring 2,520 2,783 4,894 6,386


Change (%) 0.9 22.7 25.6 16.1

Margin (%) 14.1 15.4 16.5 17.2

Tax 5,488 7,776 9,471 11,236

Deferred Tax 281 0 421 489

Tax Rate (%) 21.1 23.2 23.5 24.0

Profit after Taxes 21,533 25,725 32,201 37,128

Change (%) 2.4 19.5 25.2 15.3

Margin (%) 11.1 11.8 12.6 13.0

Non-rec. (Exp)/Income 1,527 1,189 0 0

Reported PAT 23,060 26,914 32,201 37,128


Y/E March 2011 2012 2013E 2014E

Share Capital 2,160 2,160 2,160 2,160

Reserves 24,180 32,318 43,043 56,167

Net Worth 26,339 34,477 45,202 58,327


Gross Block 37,596 40,596 43,596 47,096

Less: Accum. Depn. -15,905 -18,250 -20,608 -23,329

Net Fixed Assets 21,692 22,346 22,988 23,768

Capital WIP 2,991 2,500 2,500 2,500

Investments 26,188 32,571 45,136 59,455

Deferred Charges 2,097 2,243 2,399 2,566

Curr. Assets, L&A 47,371 53,095 58,478 64,523

Inventory 28,113 31,348 35,216 39,249



Others 7,007 7,340 7,718 8,059




Provisions 7,558 8,638 9,718 10,798




Sales Growth (%)

Soaps and Detergents 1.5 6.4 21.0 8.2

Personal Products 15.8 17.1 14.0 16.8

EBIT Margin (%)

Soaps and Detergents 9.5 11.6 12.5 12.3

Personal Products 25.6 25.5 25.3 25.3

E: MOSL Estimates

Ratios

Y/E March 2011 2012 2013E 2014E

Basic (INR)

EPS 10.0 11.9 14.9 17.2

Cash EPS 11.0 13.3 16.0 18.5

BV/Share 12.2 16.0 20.9 27.0

DPS 6.5 7.5 8.5 9.5

Payout % 65.5 63.0 57.0 55.3

Valuation (x)

P/E 38.8 31.0 26.9

Cash P/E 34.8 28.9 25.0

EV/Sales 4.4 3.7 3.3

EV/EBITDA 29.2 24.0 20.7

P/BV 28.9 22.1 17.1


Return Ratios (%)

RoE 81.8 74.6 71.2 63.7

RoCE 103.7 97.2 93.3 83.8




Leverage Ratio

Debt/Equity (x) 0.0 0.0 0.0 0.0


Y/E March 2011 2012 2013E 2014E


Int./Div. Received 2,520 2,783 4,894 6,386

Interest Paid -2 -12 -70 -20


(Incr)/Decr in WC -2,345 -989 2,317 2,371

Change in Deff 392 -146 -156 -167


Extraordinary Items 1,527 1,189 0 0

(Incr)/Decr in FA -2,028 -2,509 -3,000 -3,500


CF from Invest. 2,561 -7,703 -15,566 -17,819

Change in Networth -6,136 174 0 0

change in equity -22 0 0 0

change in reserves -6,114 174 0 0

Dividend Paid -16,420 -18,950 -21,476 -24,003

Others -1,568 163 -421 -549


Incr/Decr of Cash 506 457 -323 168


Closing Balance 2,819 3,276 2,953 3,183

FY09 Fifteen month ending (March)

August 27 - 31, 2012 70


Hindustan Petroleum Corporation



Promoter 51.1 51.1 51.1

Dom. Inst. 27.5 26.6 29.1

Foreign 7.6 9.0 9.6

Others 13.8 13.4 10.2

Stock info

Bloomberg HPCL IN


CMP (INR) 311

Mcap (USD b) 1.9

52-Wk Range (INR) 395 / 239

1, 6, 12 Rel Perf (%) -14 / 11 / -23

Company descriptionA Fortune-500 company, HPCL is an oil refining and

marketing in India with also interests in upstream. It

owns 14.8mmt of refining capacity, split across Mumbai

(6.5mmt) and Vishakapatnam (8.3mmt). It has a crude

and product pipeline network of ~2,100km and sells

~30mmt of petroleum products. HPCL also holds 49%

stake in the new Bhatinda refinery and 16.9% stake in

MRPL. HPCL is a state-owned company, with 51.11%

stake held by Government of India.

Key investment positives Earnings contingent on subsidy sharing: HPCL's

profitability continues to be determined by the

quantum of under-recoveries and sharing

mechanism, rather than fundamentals.

Bhatinda refinery to boost medium-term growth:

Medium to long-term growth would come from its

9mmtpa grassroot refinery being set up in JV (49%

stake) with Mittal Energy Investments, with an

estimated capex of INR172b.

Eventual likely deregulation to boost valuations:

Post deregulation and subsidy rationalization,

HPCL's valuations should rise due to improvement

in (1) earnings quality, (2) RoCE/RoE, (3) cash cycle,

and (4) debt levels.

Key challenges Delays in the diesel deregulation and ad hoc subsidy

sharing.

Non-commensurate increase in retail fuel prices as

crude prices rise leads to under-recoveries for the

company.

Ad hoc nature of subsidy sharing impacts profits.

Key news flows / triggers to watch Start of commercial production at Bhatinda refinery

at full utilization levels.

Subsidy rationalization by the government and

decontrol of diesel prices.

Timelines on cash transfer for PDS kerosene, and

limiting of LPG cylinders to households.

1QFY13 highlights; guidance for FY13, FY14 Of the gross under-recovery of INR107b in 1QFY13,

HPCL received INR33.6b (32%) from upstream and

nil from the government, resulting in net under-

recoveries of INR73.2b (68%).

1QFY13 GRM stood at USD-2.1/bbl v/s USD1.1 in

1QFY12 and USD3.7 in 4QFY12.

HPCL plans to set up 9mmtpa refinery at Bramer in

Rajasthan.

Quarterly Performance (Standalone) (INR Billion)



Change (%) 39.6 31.6 41.3 32.1 8.0 36.1 2.2

EBITDA -27 -29 36 55 -89 34 32

Change (%) 66 nm 470 177 nm 3.0 -218

EBITDA Margin (%) nm nm 7.5 10.4 nm 1.9 1.7

Reported PAT -31 -34 27 46 -92 9 8

Adjusted PAT -31 -34 27 46 -92 9 8

Change (%) nm nm 1191.6 312.5 nm -40.8 -11.8

PAT Margin (%) nm nm 5.7 8.8 nm 0.5 0.4

Key Metrics

GRM (USD/bbl) 1.1 1.9 4.8 3.7 -2.1 3.1 4.4

Gross under recovery 95 47 71 91 107 304 327

Upstream sharing 32 16 34 40 34 121 130

Govt. sharing 33 0 66 85 0 183 197

Net Under/(Over)reco. 31 31 -28 -34 73 0 0

As a % of Gross 32.2 66.7 -39.4 -36.9 68.6 0.0 0.0

E: MOSL Estimates

71August 27 - 31, 2012


HPCL: Financials and valuation


Y/E March 2011 2012 2013E 2014E

Exchange rate (USD/INR) 46.0 47.9 53.5 52.0

Marketing sales (mmt) 27.0 29.5 30.5 31.7

Refinery throughput (mmt) 14.8 16.2 16.2 17.0

GRM (USD/bbl) 5.0 3.1 4.4 5.9

Singapore GRM (USD/bbl) 5.2 8.2 7.8 8.0

Prem/(disc) -0.2 -5.0 -3.4 -2.2


Y/E March 2011 2012 2013E 2014E

Net Sales 1,309,342 1,781,392 1,820,739 1,892,506

Change (%) 19.9 36.1 2.2 3.9

Finished Goods 843,135 1,093,707 1,131,891 1,235,601

Raw Materials Cons 366,443 561,189 595,964 574,728

Other Exp 66,677 92,414 61,274 42,941

EBITDA 33,088 34,082 31,610 39,236

% Growth 30.1 3.0 -7.3 24.1

Depreciation 14,070 17,129 18,822 20,297

Interest 8,840 16,977 15,732 13,063

Other Income 13,435 12,222 13,023 8,358

Extraordinary Items (net) -152 -5 0 0

PBT 23,461 12,192 10,078 14,235

Tax 8,071 3,077 2,010 4,571

Total Rate (%) 34.4 25.2 19.9 32.1

PAT 15,390 9,115 8,068 9,664

Adjusted PAT 15,390 9,115 8,068 9,664

Change (%) 18.3 -40.8 -11.5 19.8


Y/E March 2011 2012 2013E 2014E

Share Capital 3,390 3,390 3,390 3,390

Reserves 122,068 127,812 133,461 140,071

Net Worth 125,458 131,202 136,851 143,461

Loans 250,212 285,000 250,000 225,000

Deferred Tax 31,956 31,956 31,956 33,380




Net Fixed Assets 186,445 217,303 233,481 250,184

Capital WIP 37,987 20,000 15,000 8,000

Investments 113,350 113,350 113,350 113,350

Curr. Assets, L & Adv. 265,910 315,147 277,411 271,450

Inventory 166,223 192,257 198,421 201,991

Debtors 26,544 36,174 36,973 38,431


Loans & Advances 71,358 71,358 26,759 26,759



Liabi l i t ies 178,018 199,977 202,642 218,343

Provisions 18,048 17,665 17,793 22,801



Ratios

Y/E March 2011 2012 2013E 2014E

Basic (INR)

EPS 45.4 26.9 23.8 28.5

Cash EPS 143.0 127.4 117.0 144.2

Book Value 370.1 387.0 403.7 423.2

DPS 14.0 8.5 6.1 7.7


Valuation (x)

P/E 6.9 11.6 13.1 10.9

Cash P/E 2.2 2.4 2.7 2.2

EV / EBITDA 8.3 8.6 8.2 6.3

EV / Sales 0.2 0.2 0.1 0.1


Dividend Yield (%) 4.5 2.7 2.0 2.5


RoE 12.8 7.1 6.0 6.9

RoCE 8.6 6.8 6.0 6.7

Turnover Ratios

Debtors (No. of Days) 7.1 6.4 7.3 7.3


Leverage Ratio

Debt / Equity (x) 2.0 2.2 1.8 1.6


Y/E March 2011 2012 2013E 2014E


Depreciation 14,082 17,129 18,822 20,297

Other op -2,456 0 0 0

Interest Paid 6,457 16,977 15,732 13,063


(Inc)/Dec in Wkg.Capital -25,876 -14,090 40,429 15,682


(Inc)/Dec in FA & CWIP -46,101 -30,000 -30,000 -30,000

(Pur)/Sale of Investments 5,371 0 0 0

Inc from Invst 6,919 0 0 0


Inc / (Dec) in Debt 30,408 34,788 -35,000 -25,000

Interest paid & other Inv -8,933 -16,977 -15,732 -13,063

Dividends Paid -4,731 -3,371 -2,419 -3,054

CF from Fin. Activity 16,744 14,440 -53,152 -41,117

Inc / ( Dec) in Cash -7,042 13,572 -100 -10,988

Add: Op. Balance 2,431 800 14,372 14,272

Bank Balance Adj. 5,410 0 0 0

Closing Balance 800 14,372 14,272 3,284

August 27 - 31, 2012 72




Promoter 68.8 68.8 68.8

Dom. Inst. 10.4 11.2 13.2

Foreign 12.5 12.1 12.6

Others 8.3 7.8 5.4

Stock info

Bloomberg HTML IN


CMP (INR) 85

Mcap (USD b) 0.4

52-Wk Range (INR) 157 / 82

1, 6, 12 Rel Perf (%) -15 / -37 / -49

Company descriptionHT Media has a diversified portfolio of media assets

with exposure to English, Hindi, Business, Radio, and

online. Hindustan Times (English daily) and Hindustan

(Hindi daily) are ranked 2nd and 3rd respectively in their

respective genres pan-India with a combined

readership base of ~16m. 'Mint' is the second most read

business daily in India. Radio business is concentrated

in four metros. HT Media's online portfolio is focused

on news, networking, jobs and education space.

Key investment positives HT has a strong franchise in Delhi (INR15b+ market)

and Bihar. Its readership share in Delhi is ~50%

(head-to-head with TOI) and ~70% share in the fast-

growing Bihar market.

Several investments made by HT Media are at an

inflection point. While Radio business posted a

sharp turnaround in FY11, HT Mumbai and Mint are

yet to break even.

Diversified presence across media platforms. HT is

the only listed print media company with significant

presence in English as well as Hindi.

Key challenges Lower ad spends led by macro slowdown, especially

given high exposure to metro markets like Mumbai

and Delhi.

Weak INR results in higher cost of newsprint.

Key news flows / triggers to watch Break-even of Mint and HT Mumbai business.

Plans on expansion of radio business with phase III

likely to be introduced.

HT Media is highly leveraged to macroeconomic

recovery given its lower margin profile and high

exposure to the mature Delhi market.

1QFY13 highlights; guidance for FY13, FY14 1QFY13 revenue declined 1% YoY/QoQ to INR4.9b

(9% below our estimate of INR5.4b).

EBITDA declined 26% YoY to INR669m (v/s our

estimate of INR684m), primarily due to sluggish

revenue growth. EBITDA margin declined ~450bp

YoY to 13.7%. Raw material cost as a percentage of

revenue increased ~160bp QoQ to 36.3%.

PAT declined 21% YoY to INR407m (20% above our

estimate).

Ad revenue declined 3% YoY to INR3.73b (9% below

our estimate) despite a 5% YoY growth in the Hindi

segment. Circulation revenue grew 8-9% YoY/QoQ

to INR525m.

1QFY13 EBITDA performance was broadly in line

with our expectations, despite significant revenue

shortfall, as the company was able to keep costs

under control.

HT Media does not expect meaningful inflation in

its cost base for the rest of FY13.



Revenue 4,969 4,931 5,266 4,941 4,899 20,107 20,144

YoY Change(%) 22.9 10.7 13.2 5.0 -1.4 12.6 0.2

EBITDA 903 713 777 481 669 2,873 2,558

YoY Change(%) 13.0 -9.9 -12.0 -45.1 -25.9 -14.2 -10.9

EBITDA Margin(%) 18.2 14.4 14.8 9.7 13.7 14.3 12.7

PAT 515 438 482 220 407 1,655 1,437

Adjusted PAT 515 438 482 220 407 1,655 1,437

YoY Change(%) 24.4 13.0 0.8 -58.5 -21.0 -8.5 -13.2

PAT Margin(%) 10.4 8.9 9.1 4.4 8.3 8.2 7.1


Ad revenue growth (%) 17 12 10 3 -3 10 -2

- English 18 8 11 -4 -6 8 -6

- Hindi 15 24 8 21 5 17 8

Circulation rev. gr. (%) 3 21 7 3 8 8 9

-English 4 34 0 -15 -3 4 -2

-Hindi 3 16 10 13 13 10 14

E: MOSL Estimates

HT Media

73August 27 - 31, 2012


HT Media: Financials and valuation


Y/E March 2011 2012 2013E 2014E

Net Sales 17,861 20,030 20,144 22,329

YoY (%) 24.2 12.1 0.6 10.8

EBITDA 3,357 2,869 2,558 2,899

EBITDA margin (%) 18.8 14.3 12.7 13.0


Interest 236 362 405 411

Other Income 291 750 774 816

PBT 2,571 2,341 2,006 2,340

Tax 713 626 401 468

Tax rate (%) 27.7 26.7 20.0 20.0

PAT 1,858 1,715 1,605 1,872


Reported PAT 1,809 1,655 1,437 1,669

Change (%) 33 -9 -13 16

Adjustments 0 0 -160 -187

Adjusted PAT 1,809 1,655 1,277 1,482


Y/E March 2011 2012 2013E 2014E


Share Premium 4,012 4,012 4,012 4,012

Reserves 8,540 9,988 11,118 12,438

Net Worth 13,022 14,470 15,600 16,920

Loans 3,122 3,462 3,281 3,568


Deffered Tax Liability 0 460 460 460




Net Fixed Assets 8,050 7,935 7,516 7,222

Capital WIP 194 125 125 125


Investments 7,595 8,320 8,320 8,320

Curr. Assets 7,557 8,914 10,516 13,302

Inventory 1,456 1,819 1,849 2,055

Debtors 2,525 2,757 2,887 3,214


Loans & Advances 2,109 2,320 2,333 2,586

Other current assets 315 447 447 447


Creditors 3,176 3,224 3,304 3,650

Prov. & other liabilities 2,862 3,125 3,202 3,538



Ratios

Y/E March 2011 2012 2013E 2014E

Adjusted EPS 7.7 7.0 5.4 6.3

Growth (%) 26.1 -8.5 -22.8 16.1

Cash EPS 11.3 10.9 10.0 11.2

Book Value 60.9 67.4 72.9 79.4

DPS 0.4 0.4 0.5 0.6

Payout (incl. Div. Tax.) (%) 5 7 10 8

Valuation

P/E 11.0 12.1 15.6 13.5

Cash P/E 7.5 7.8 8.5 7.6

EV/EBITDA 5.0 5.8 6.0 4.9

EV/Sales 0.9 0.8 0.8 0.6


Dividend Yield (%) 0.4 0.5 0.6 0.7


RoE 14.9 11.0 7.7 8.3

RoCE 13.0 10.5 9.2 9.8

Turnover Ratios





Leverage Ratio

Debt/Equity (x) 0.2 0.2 0.2 0.2


Y/E March 2011 2012 2013E 2014E

EBITDA 3,357 2,869 2,558 2,899

Other Income 291 750 774 816

Interest Paid -236 -362 -405 -411


(Inc)/Dec in Wkg. Cap. 395 -723 -177 -291


(inc)/Dec in FA + CWIP -679 -733 -504 -670

(Pur)/Sale of Investments -2,840 -725 0 0

CF from Inv.Activity -3,519 -1,458 -504 -670

Inc/(Dec) in Debt -180 340 -181 287

Dividends Paid -99 -110 -147 -162

Other Financing Activities 1,032 1 0 0

CF from Fin.Activity 753 231 -328 125

Inc/(Dec) in Cash 65 419 1,429 2,000


Closing Balance 1,152 1,571 3,000 5,000

August 27 - 31, 2012 74


ICICI Bank




Dom. Inst. 27.7 26.6 24.9

Foreign 62.7 63.2 65.5

Others 9.6 10.2 9.6

Stock info

Bloomberg ICICIBC IN


CMP (INR) 962

Mcap (USD b) 19.9

52-Wk Range (INR) 999 / 641

1, 6, 12 Rel Perf (%) 1 / 1 / 1

Company descriptionICICI Bank (ICICIBC) has effectively used consolidation

phase in business (FY08-10) to structurally improve

balance sheet profile, bring in efficiency and reduce

risk. Combination of all the above factors has led to

sharp improvement in core operating profitability and

RoA (1.5% in FY12 v/s 1.1% in FY10). ICICIBC, through its

subsidiaries, is also a leading player in insurance and

asset management.

Key investment positives NIM has significantly improved from 2.2% in FY08 to

2.7% in FY12 (3% in 1QFY13). Strong CASA ratio of

40%+, lower securitization losses, and higher

international NIMs, will help ICICIBC to gradually

improve NIM in FY13 as well. We factor 25bp

improvement in FY13.

Lower proportion of unsecured loan (1.3% as against

high of 9.8%), loan sourcing via branches rather than

DSAs, and higher provision coverage will help

cushion asset quality. However, there may be some

stress in corporate segment. We have modeled in

credit cost of 75bp in FY13 v/s 42bp in FY12. This

would however be offset by higher NIM, and risk-

adjusted margin is expected to improve to 2.3% v/s

average of 1.3% (FY08-11).

Expect excess capitalization (in standalone entity

and international subs) and value unlocking from

insurance venture will ensure dilution-free growth

for next 3-4 years.

Key challenges Rapid loan growth in corporate segment, particularly

in infrastructure and power, could lead to higher

slippages.

ICICI Bank is highly leveraged to growth; slower than

expected loan growth can impact earnings and

valuations.

Key news flows / triggers to watch Continued better than expected performance on

asset quality and improvement in fee income.

Life insurance venture holds significant value.

Increase in FDI limit in insurance/listing would lead

to potential unlocking of value for the company.

1QFY13 highlights; guidance for FY13, FY14 Performance highlights of 1QFY13: Reported loan

growth of 22% led by strong growth in corporate,

SME and international portfolio. Even after the

sharp 30bp+ QoQ improvement in NIM in 4QFY12,

stable NIM QoQ was a positive surprise. Fee income

growth was muted at 4% YoY, and asset quality was

stable.

Management guidance: Domestic loan growth of

20%, (b) CASA ratio to be maintained in the range

of 38-40%, (c) NIM guidance raised to 3-3.1% from

2.85-2.9% earlier, (d) credit cost maintained at

~75bp for FY13, and (e) fee income growth to be in

low double digits.



NII 24,109 25,064 27,120 31,048 31,929 107,342 137,069

Change (%) 21.1 13.7 17.3 23.7 32.4 19.0 27.7

Other Income 16,429 17,396 18,919 22,285 18,799 75,028 85,969

Opex 18,200 18,922 19,168 22,216 21,235 78,504 90,880


Change (%) 2.1 6.4 14.7 35.0 32.0 14.8 27.2

Provisions 4,539 3,188 3,411 4,693 4,659 15,830 22,443

PAT 13,320 15,032 17,281 19,018 18,151 64,653 80,092

Change (%) 29.8 21.6 20.3 31.0 36.3 25.5 23.9


NIM (%) 2.6 2.6 2.7 3.0 3.0 2.7 3.0

Loan Gr. YoY (%) 19.7 20.5 19.1 17.3 21.6 17.3 15.4

GNPA (%) 4.4 4.1 3.8 3.6 3.5 3.6 3.3

E: MOSL Estimates

75August 27 - 31, 2012


ICICI Bank: Financials and valuation


Y/E March 2011 2012 2013E 2014E

Interest Income 259,741 335,427 399,260 455,433



Change (%) 11.1 19.0 27.7 16.9

Other Income 66,479 75,028 85,969 101,001

Net Income 156,648 182,369 223,038 261,219

Change (%) 0.5 16.4 22.3 17.1

Operating Exp. 66,172 78,504 90,880 105,441

Operating Profits 90,475 103,865 132,158 155,778

Change (%) -7.0 14.8 27.2 17.9

Provisions & Cont. 22,868 15,830 22,443 28,141

PBT 67,607 88,034 109,715 127,637

Tax 16,093 23,382 29,623 34,462

Tax Rate (%) 23.8 26.6 27.0 27.0

PAT 51,514 64,653 80,092 93,175

Change (%) 28.0 25.5 23.9 16.3

Dividend (Including Tax) 18,170 21,228 28,112 32,704

Core PPP* 92,625 103,995 127,158 148,278

Change (%) 8.3 12.3 22.3 16.6



Y/E March 2011 2012 2013E 2014E

Share Capital 15,018 15,028 15,028 15,028


Preference Capital 3,500 3,500 3,500 3,500


Net Worth 554,409 607,552 659,532 720,003

Of which Equity Net Worth 550,909 604,052 656,032 716,503

Deposits 2,256,021 2,555,000 3,082,483 3,707,468

Change (%) 11.7 13.3 20.6 20.3

Of which CASA Deposits 1,016,465 1,110,194 1,259,236 1,474,358

Change (%) 20.7 9.2 13.4 17.1

Borrowings 1,092,043 1,398,149 1,507,768 1,692,315



Current Assets 340,901 362,293 457,268 526,370

Investments 1,346,860 1,595,600 1,795,050 2,064,308

Change (%) 11.4 18.5 12.5 15.0

Loans 2,163,659 2,537,277 2,927,362 3,451,990

Change (%) 19.4 17.3 15.4 17.9

Net Fixed Assets 47,443 46,147 45,833 47,268

Other Assets 163,475 195,154 234,185 281,022

Total Assets 4,062,337 4,736,471 5,459,698 6,370,958

Asset Quality (%)

GNPA (INR m) 100,343 94,753 99,327 114,352

NNPA (INR m) 24,074 18,608 16,024 19,118

GNPA Ratio 4.5 3.6 3.3 3.2

NNPA Ratio 1.1 0.7 0.5 0.6


Ratios

Y/E March 2011 2012 2013E 2014E


Avg. Yield - Earning Assets 7.7 8.5 8.7 8.6








RoE 9.7 11.3 12.9 13.7

Adjusted RoE 12.2 13.3 15.1 15.7

RoA 1.3 1.5 1.6 1.6




Op. Exps./Net Income* 41.7 43.0 41.7 41.6

Empl. Cost/Op. Exps. 42.6 44.8 46.4 47.2



* ex treasury


Loan/Deposit Ratio 95.9 99.3 95.0 93.1

CASA Ratio % 45.1 43.5 40.9 39.8

Invest./Deposit Ratio 59.7 62.5 58.2 55.7

G-Sec/Invest. Ratio 47.6 54.5 56.9 56.8

CAR 19.5 18.5 17.0 15.5

Tier 1 13.2 12.7 11.8 11.0

Valuation

Book Value (INR) 478.7 516.6 561.7 614.1

BV Growth (%) 3.4 7.9 8.7 9.3

Price-BV (x) 1.9 1.7 1.6

ABV (for Subsidaries, INR) 365.2 402.4 447.5 499.9

ABV Growth (%) 4.9 10.2 11.2 11.7

Price-ABV (x) 2.0 1.7 1.5

ABV(for Subs Invst&NPA,INR)351.6 391.9 438.4 489.1

Adjusted Price-ABV (x) 2.0 1.7 1.5

EPS (INR) 44.7 56.1 69.5 80.8

EPS Growth (%) 23.9 25.4 23.9 16.3


Adj. Price-Earnings (x) 14.2 10.8 9.7



E: MOSL Estimates

August 27 - 31, 2012 76


Idea Cellular



Promoter 46.0 46.0 46.0

Dom. Inst. 6.9 6.2 8.0

Foreign 44.8 45.2 43.0

Others 2.4 2.6 3.0

Stock info

Bloomberg IDEA IN


CMP (INR) 76

Mcap (USD b) 4.5

52-Wk Range (INR) 104 / 71

1, 6, 12 Rel Perf (%) -12 / -16 / -29

Company descriptionIdea Cellular, an Aditya Birla Group company, is India's

third largest wireless operator with a revenue market

share of ~15%. Idea operates in all 22 Indian telecom

service areas, of which 13 are classified as established

service areas and balance nine as new service areas.

Idea carries 1.4b+ minutes on a daily basis (among top

10 globally) and has a strong ~20% revenue market

share in its established circles.

Key investment positives Idea is the fastest growing major wireless company

in India. Over FY08-12, its revenue market share has

increased from 10% to 15%.

Strong incumbency advantage in eight established

circles and spectrum allocation in the 900MHz band

in nine circles.

Well positioned to capture rural growth given deep

coverage and favorable frequency allocation.

Industry consolidation is inevitable given continued

high losses of challengers and stretched balance

sheets across operators.

Key challenges Hyper-competition in the Indian mobile business.

Regulatory uncertainty and significant potential

liability of ~INR300b related to allocated spectrum

if incumbents are required to pay in line with the

announced reserve price of INR28b per MHz for pan-

India spectrum in 1,800MHz band.


Court is expected to be held in November 2012.

The auction is expected to set the base price for all

future spectrum payments.

Potential monetization of tower assets.

Final government decision on the issue of spectrum

re-farming.

Ramp-up of 3G subscriber base post recent sharp


1QFY13 highlights; guidance for FY13, FY14 1QFY13 proforma EBITDA declined ~5% QoQ but

grew 19% YoY to INR14.4b (v/s estimate of INR15.5b).

Revenue grew 22% YoY and 2.5% QoQ to INR55b

(v/s estimate of INR55.3b) led by ~5% QoQ traffic

growth but offset by 2.5% RPM decline (second

consecutive quarter of QoQ decline).

EBITDA margin stood at 26.1%, down ~200bp QoQ

on an adjusted basis. Margin decline was largely

led by network costs (up 100bp) and roaming and

access charges (up 60bp).

Proforma PAT increased 32% YoY but declined 32%

QoQ to INR2.34b.

Capex guidance for FY13 remains unchanged at

INR35b.

We expect consolidated EBITDA CAGR of 20% over

FY12-14E driven by 15-16% CAGR in revenue/

wireless traffic.



Revenue 45,207 46,199 50,308 53,697 55,037 195,411 231,314

YoY Change(%) 23.7 26.3 27.2 27.8 21.7 26.0 18.4

EBITDA 12,040 11,866 13,446 15,071 14,355 50,924 60,919

YoY Change(%) 35.5 35.0 41.8 50.2 19.2 34.3 19.6

EBITDA Margin(%) 26.6 25.7 26.7 28.1 26.1 26.1 26.3

Adjusted PAT 1,773 1,058 2,010 3,429 2,342 7,231 11,707

YoY Change(%) -12.0 -41.1 -17.3 69.4 32.1 -19.5 61.9

PAT Margin(%) 3.9 2.3 4.0 6.4 4.3 3.7 5.1


Mobile Traffic (B Min)109 106 114 124 131 453 556

QoQ Change(%) 6.5 -2.2 7.3 9.1 2.7

Mobile RPM (INR) 0.41 0.43 0.43 0.42 0.41 0.42 0.41

QoQ Change(%) 0.9 4.1 1.2 -2.0 -2.5

E: MOSL Estimates

77August 27 - 31, 2012


Idea Cellular: Financials and valuation


Y/E March 2011 2012 2013E 2014E

Revenues 155,032 195,412 231,315 260,293

Change (%) 24.5 26.0 18.4 12.5

Total Expenses 117,127 144,489 170,397 187,317

EBITDA 37,906 50,924 60,919 72,976

% of Gross Sales 24.5 26.1 26.3 28.0

Depn.&Amortization 23,973 29,814 34,474 36,023

EBIT 13,933 21,110 26,445 36,953

Net Interest 3,965 10,557 9,706 8,709

PBT 9,968 10,553 16,739 28,244

Tax 982 3,322 5,032 8,473

Rate (%) 9.9 31.5 30.1 30.0

Adjusted PAT 8,986 7,231 11,707 19,770

Change (%) -5.8 -19.5 61.9 68.9

PAT after EO 8,986 7,231 11,707 19,770


Y/E March 2011 2012 2013E 2014E

Share Capital 33,033 33,088 33,097 33,097

Add. Paid up Capital 139,406 139,406 139,406 139,406

Reserves -49,440 -41,994 -30,334 -10,563

Net Worth 122,999 130,501 142,170 161,940

Loans 120,228 133,372 124,050 100,035



Gross Block 373,505 418,016 455,316 480,181


Net Block 261,377 276,976 279,802 268,644

Curr. Assets 42,378 36,192 58,823 65,737

Inventories 542 688 1,136 1,278

Debtors 4,057 5,144 10,324 11,618



Curr. Liab. & Prov. 57,429 43,022 65,277 65,277

Net Curr. Assets -15,051 -6,830 -6,454 460

Appl. of Funds 246,326 270,146 273,349 269,104

E: MOSL Estimates

Ratios

Y/E March 2011 2012 2013E 2014E

Basic (INR)

EPS 2.7 2.2 3.5 6.0

Cash EPS 10.0 11.2 14.0 16.9

Book Value 37.2 39.5 43.0 48.9

Valuation (x)

P/E 27.7 34.4 21.3 12.6

Cash P/E 7.6 6.7 5.4 4.5

EV/EBITDA 9.3 7.5 6.1 4.7

EV/Sales 2.3 1.9 1.6 1.3



RoE 7.6 5.7 8.6 13.0

RoCE 5.2 5.4 6.6 9.3

Turnover Ratios


Asset Turnover (x) 0.75 0.78 0.86 0.97

Leverage Ratio

Debt/Equity Ratio(x) 1.0 1.0 0.9 0.6


Y/E March 2011 2012 2013E 2014E


Interest Paid -3,965 -10,557 -9,706 -8,709

Direct Taxes Paid -25 -148 -4,176 -8,473

(Inc)/Dec in Wkg. Cap. 23,098 -20,156 712 -6,914


(inc)/Dec in FA + CWIP -98,145 -45,413 -37,300 -24,865


Issue of Shares 69 -74 9 0

Inc/(Dec) in Debt 41,635 13,144 -9,322 -24,015

Other Financing Activities -2 -2 -2 -2

CF from Fin.Activity 41,704 13,070 -9,313 -24,015

Inc/(Dec) in Cash 573 -12,280 1,135 0


Closing Balance 14,777 2,497 3,632 3,632

August 27 - 31, 2012 78


IDFC




Dom. Inst. 35.1 34.7 36.9

Foreign 50.2 49.6 47.1

Others 14.7 15.7 16.0

Stock info

Bloomberg IDFC IN


CMP (INR) 141

Mcap (USD b) 3.8

52-Wk Range (INR) 161 / 90

1, 6, 12 Rel Perf (%) 0 / -2 / 20

Company descriptionIncorporated in 1997, Infrastructure Development

Finance Company (IDFC) is India's leading infrastructure

finance player. Besides infrastructure financing, IDFC

has interests in broking, asset management and

investment banking. It has strategic investments in

institutions like NSE and ARCIL. As of June 2012, IDFC's

loan book was INR500b and total asset base INR630b.

Key investment positives Over FY08-12, IDFC posted 25% loan CAGR to

INR500b.Considering lumpy nature of business,

future growth can be similar if there is any change

in macro environment led by policy action.

IDFC maintained spreads at 2.2%+ over the years. In

an uncertain environment and high interest rate

scenario, the management does not plan to grow

aggressively, thereby spreads are likely to be

protected at current levels.

Asset quality is healthy with gross NPAs at 0.3% and

net NPAs at 0.2%. IDFC has negligible exposure to

state utilities, which reduces the threat to asset

quality to a great extent in the current scenario.

IDFC has been prudently making provisions, which

provides cushion in case of any asset quality shocks.

Outstanding loan loss provisions stand at 1.6% of

loans as on June 2012.

Key challenges Over 40% of IDFC's exposure is to the power

segment, which in an uncertain environment poses

a threat to asset quality due to execution risks,

inadequate fuel supply, and delays in getting

requisite clearances.

Outlook for the capital market business is

challenging and would act as a drag on earnings.

Key news flows / triggers to watch Expected monetary easing and government

addressing key issues faced by the infrastructure

sector would be major catalysts in further improving

IDFC's growth and profitability outlook.

1QFY13 highlights; guidance for FY13, FY14 Performance highlights of 1QFY13: Loan growth of

34% YoY and 4% QoQ; TTM basis spreads improved

10bp to 2.5%; healthy fee income growth led by

strong sanctions growth; muted trading gains; stable

asset quality; higher provisions for investments;

significant control over cost.

Guidance for FY13: 15-20% loan growth, stable

spreads at 2.2-2.4%, no significant pressure points

on asset quality for now.



Net Int. Income 10,948 12,435 12,364 17,434 13,042 52,121 63,852

YoY Change (%) 17.1 14.7 15.1 27.2 19.1 16.3 22.5

Profit on Sale of Inv. 163 869 880 791 202 2,702 2,500

Other Op. income 1,909 1,430 1,306 1,233 2,223 6,939 8,524

Net Op. Income 13,020 14,734 14,549 19,458 15,467 61,762 74,876

Pre Prov. Profit 11,935 13,547 13,483 18,491 14,199 57,456 69,622

YoY Change (%) 21.6 17.9 9.8 17.1 19.0 16.4 21.2

PAT 8,445 9,707 9,813 13,261 10,019 41,226 49,225

YoY Change (%) 21.6 20.2 10.1 16.1 18.6 16.6 19.4


Loan Growth (%) 22.2 19.5 21.2 20.3 19.4 20.3 22.6

Spreads (%, Cumu.) 2.30 2.29 2.27 2.27 2.27 2.27 NA

GNPA (%) 0.83 0.82 0.82 0.74 0.79 0.74 0.74

E: MOSL Estimates

79August 27 - 31, 2012


IDFC: Financials and valuation


Y/E March 2011 2012 2013E 2014E

Interest Income* 40,186 54,841 71,296 81,757



Change (%) 44.8 24.3 30.9 18.4

Other Income 9,144 9,509 6,786 8,366

Fees Based income 6,413 4,495 5,162 6,092

Principal Invt-Incl Carry Inc**2,350 3,890 1,424 2,024

Miscellanous Income 382 1,124 200 250

Net Income 25,455 29,788 33,336 39,810

Change (%) 20.7 17.0 11.9 19.4



Change (%) 29.4 22.0 12.3 19.3

Other Provisions 2,346 2,846 3,716 3,675

PBT 17,788 21,727 23,886 29,268

Tax 4,998 6,219 7,166 9,073

Tax Rate (%) 28.1 28.6 30.0 31.0

PAT 12,791 15,508 16,720 20,195

Change (%) 20.5 21.2 7.8 20.8

(MI)/Associate profit 25.7 32.0 0.0 10.0


Change (%) 20.7 21.3 7.6 20.8

Proposed Dividend 2,925 3,478 3,762 4,546

*Includes debt trading gains; ** Excludes debt trading gains


Y/E March 2011 2012 2013E 2014E

Capital 14,609 15,124 15,124 15,124


Net Worth 104,084 122,856 135,175 150,061


Borrowings 371,439 472,750 571,467 692,072

Change (%) 39.9 27.3 20.9 21.1


Investments 69,611 84,857 102,102 120,345

Change (%) 49.5 21.9 20.3 17.9

Loans 376,523 481,846 578,215 693,858

Change (%) 50.4 28.0 20.0 20.0

Goodwil l 11,638 9,668 9,468 9,468

Net Fixed Assets 4,469 4,165 4,248 4,333

Deferred Tax Assets 2,480 3,202 3,202 3,202

Net current Assets 10,804 12,047 9,584 11,106

Total Assets 475,526 595,784 706,820 842,311

Ratios

Y/E March 2011 2012 2013E 2014E


Avg. Yield - Infra. loans 11.0 11.2 11.8 11.3

Avg. Yield - Earning Assets 11.0 10.9 11.6 11.1


Interest Spread on loans 3.5 2.7 3.0 3.1



RoE 14.7 13.7 13.0 14.2

Core RoE 17.8 16.2 15.0 16.1

RoA 3.2 2.9 2.6 2.6


Other Income./Net Income 35.9 31.9 20.4 21.0


Total Assets/Equity(x) 4.6 4.8 5.2 5.6

Debt/Equity (x) 3.6 3.8 4.2 4.6

Fee income/Net Income 25.2 15.1 15.5 15.3


Empl. Cost/Op. Exps. 55.6 58.4 52.3 52.2

Valuation

Book Value (INR) 71.2 81.2 89.4 99.2

Price-BV (x) 1.7 1.6 1.4

Adjusted BV (INR)* 60.6 72.7 80.9 90.7

Price-ABV (x) 1.6 1.5 1.3

EPS (INR) 8.8 10.3 11.1 13.4

EPS Growth (%) 7.4 17.1 7.6 20.8


OPS (Rs) 13.8 16.2 18.3 21.8

OPS Growth (%) 15.2 17.9 12.3 19.3

Price-OP (x) 8.7 7.7 6.5

Dividend per Share (INR) 2.0 2.3 2.5 3.0


E: MOSL Estimates; *Adj. for Inv. in subsidaries, Prices adj. forother ventures

August 27 - 31, 2012 80


Indusind Bank



Promoter 19.4 19.5 19.5

Dom. Inst. 8.7 7.9 8.1

Foreign 49.4 50.6 51.0

Others 22.5 22.1 21.4

Stock info

Bloomberg IIB IN


CMP (INR) 333

Mcap (USD b) 2.8

52-Wk Range (INR) 352 / 222

1, 6, 12 Rel Perf (%) -4 / 10 / 31

Company descriptionIndusInd Bank (IIB) is one of India's new generation

banks, established in 1994. The team, led by Managing

Director Mr Romesh Sobti, has been instrumental in

improving the core operating performance of the bank

(RoA improved from 0.6% in FY09 to 1.6% in FY12). Focus

of the management is to achieve scale while

maintaining profitability.

Key investment positives Capitalizing on its niche presence in vehicle

financing (48% of overall loans) and strong

corporate relationship, IIB has been able to deliver

above-industry level loan growth. Over FY12-14, IIB

is expected to grow at ~25% and gain market share,

with focus being on core retail liabilities.

With ~50% of deposits wholesale in nature, IIB is

leveraged to systemic interest rates and liquidity.

NIM is expected to improve in 2HFY13 and FY14 with

(a) 50% of loan book fixed in nature, (b) increasing

share of consumer finance, (c) expected benefit of

fall in interest rates on wholesale deposits, and

(d) increasing traction in CASA deposits.

While asset quality remains strong, moderating

economic growth coupled with high exposure in CV

segment remains a concern. However, superior

margins, focused fee income strategy (1.8%, a key

driver for RoA) and control over C/I ratio will keep

core operating profitability strong.

Key challenges Strong growth in consumer finance division

particularly vehicle finance could result in higher

than expected delinquency and credit cost.

The strong turnaround in IIB's operations is driven

by the change in top management. Attrition at the

senior level could impact performance of the bank.

Key news flows / triggers to watch Faster than expected fall in interest rate could lead

to surprise on margin.

Easing liquidity condition and pick-up in GDP growth

could allay concerns regarding slippages especially

on vehicle financing portfolio.

1QFY13 highlights; guidance for FY13, FY14 Performance highlights of 1QFY13: Margins

declined 7bp QoQ to 3.2% led by increase in cost of

funds (+35bp QoQ). Growth in loan (+6% QoQ, 31%

YoY) and SA deposits (+9% QoQ, 59% YoY) remains

strong. Fee income (+44% YoY) and asset quality

(GNPA up 5% QoQ) also remain impressive despite

challenging macro environment.

Management guidance: Loan growth of 25-30% over

FY13/14, (b) CASA ratio of 35% by FY14 v/s 28% at

end of 1QFY13, (c) Fee income growth to be faster

than balance sheet growth, and (d) credit cost

guidance of ~70bp for FY13.



NII 3,900 4,192 4,307 4,644 4,841 17,042 21,44

Change (%) 31.9 27.1 18.6 19.7 24.1 23.8 25.8

Other Income 2,154 2,392 2,651 2,921 3,188 10,118 13,581

Opex 2,937 3,254 3,465 3,774 3,989 13,430 17,481


Change (%) 35.2 27.2 19.9 27.2 29.6 26.9 27.8

Provisions 446 470 428 460 535 1,804 2,717

PAT 1,802 1,931 2,060 2,234 2,363 8,026 10,007

Change (%) 52.0 45.0 33.9 30.1 31.1 39.0 24.7


NIM (%) 3.4 3.4 3.3 3.3 3.2 3.3 3.4

Loan Gr. YoY (%) 31.4 28.5 29.7 34.0 31.2 34.0 25.0

GNPA (%) 1.1 1.1 1.0 1.0 1.0 1.0 1.2

E: MOSL Estimates

81August 27 - 31, 2012


Indusind Bank: Financials and valuation


Y/E March 2011 2012 2013E 2014E

Interest Income 35,894 53,592 69,126 80,467



Change (%) 55.3 23.8 25.8 29.3


Net Income 20,902 27,160 35,024 45,122

Change (%) 45.2 29.9 29.0 28.8



Change (%) 53.7 26.9 27.8 32.9


PBT 8,798 11,927 14,825 19,179

Tax 3,025 3,900 4,818 6,233

Tax Rate (%) 34.4 32.7 32.5 32.5

PAT 5,773 8,026 10,007 12,946

Change (%) 64.8 39.0 24.7 29.4

Equity Dividend (Incl tax) 932 1,196 1,464 1,893

Core PPP* 9,764 12,680 15,763 20,986

Change (%) 67.6 29.9 24.3 33.1



Y/E March 2011 2012 2013E 2014E



Net Worth 40,502 47,417 55,900 66,893

Deposits 343,654 423,615 529,519 661,899

Change (%) 28.7 23.3 25.0 25.0

of which CASA Dep 93,309 115,631 155,622 205,836

Change (%) 47.6 23.9 34.6 32.3

Borrowings 55,254 86,820 92,687 102,000



Current Assets 40,246 55,396 60,182 70,997

Investments 135,508 145,719 171,949 202,900

Change (%) 30.3 7.5 18.0 18.0

Loans 261,656 350,640 438,299 547,874

Change (%) 27.3 34.0 25.0 25.0

Fixed Assets 5,965 6,568 6,642 6,812

Other Assets 12,983 17,638 21,165 26,456

Total Assets 456,358 575,961 698,237 855,040

Asset Quality (%)

GNPA (INR M) 2,659 3,471 5,124 8,483

NNPA (INR M) 728 947 1,378 2,044

GNPA Ratio 1.01 0.98 1.16 1.53

NNPA Ratio 0.28 0.27 0.31 0.37


E: MOSL Estimates

Ratios

Y/E March 2011 2012 2013E 2014E










RoE 19.3 19.2 20.2 21.8

RoA 1.4 1.6 1.6 1.7





Cost/Income* 50.3 51.3 52.6 51.0

Empl. Cost/Op. Exps. 37.9 36.1 36.7 36.7



* ex treasury and Recoveries from written off accounts



CASA Ratio 27.2 27.3 29.4 31.1



CAR 15.9 13.9 12.6 11.6

Tier 1 12.3 11.4 10.7 10.1

Valuation

Book Value (INR) 82.1 96.7 115.0 138.6

Change (%) 55.7 17.8 18.9 20.6

Price-BV (x) 3.4 2.9 2.4

Adjusted BV (INR) 81.1 95.4 113.0 135.8

Price-ABV (x) 3.5 2.9 2.5

EPS (INR) 12.4 17.2 21.4 27.7

Change (%) 45.3 38.5 24.7 29.4




August 27 - 31, 2012 82


Info Edge (India)



Promoter 53.5 53.6 54.1

Dom. Inst. 10.8 10.1 7.3

Foreign 29.4 30.0 31.9

Others 6.4 6.3 6.8

Stock info

Bloomberg INFOE IN


CMP (INR) 356

Mcap (USD b) 0.7

52-Wk Range (INR) 400 / 274

1, 6, 12 Rel Perf (%) 4 / 10 / -4

Company descriptionInfo Edge is among the leading internet companies in

India. It runs four major businesses:

(1) Naukri.com, India's no. 1 job site,

(2) Jeevansathi.com, India's fastest growing

matrimonial portal,

(3) 99acres.com, India's No.1 real estate portal, and

(4) Shiksha.com, an education portal.

The company also owns Quadrangle - an offline

executive search firm, and Naukri Gulf (its foray into

the Middle East market). Info Edge also owns Brijj.com,

a professional networking site, and Allcheckdeals.com,

an online real estate brokerage firm which is run as a

subsidiary company.

The company, with a view to tap into the growing Indian

internet market, also invests in early stage companies

and start-up ventures.

Key investment positives Healthy job market in the growing economy, along

with factors such as IT/ITeS hiring and internet

penetration directly aid the growth of singlemost

important segment Naukri.

Leadership across key businesses: (1) Naukri is the

clear market leader with ~60% market share in the

online jobs space. (2) 99acres.com enjoys the

highest traffic share amongst all the real estate

property sites. (3) Jeevansathi ranks third in the

highly competitive online matrimonial space.

Key news flows / triggers to watch Reported hiring activity as per Naukri's Job Speak

index was robust in the first month of the financial

year, growing 12% YoY.

Key challenges Slowdown in GDP growth could impact the

company's business.

Increasing threat from competition – Naukri is faced

up with Monster's Trovix platform and Jeevansathi

operates in a crowded space where new entrants

are focusing on specific communities in India.

Greater adoption of social networking sites (such

as LinkedIn and Facebook) as a medium of online

job search.

1QFY13 highlights; guidance for FY13, FY14 1QFY13 revenue at INR1.1b was up 22% YoY and flat

sequentially. EBITDA margin was 34.8%, down

170bp YoY. PAT margin was 21.7%, down 50bp YoY.

The company cited lower economic growth and a

more subdued environment leading to deceleration

in the recruitment market, driving company's

cautious outlook for FY13.


Y/E March Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 FY11 FY12

Net Sales 867 911 920 1,073 1,060 3,223 3,771

Changes (%) 31.5 28.0 22.5 30.0 22.3 35.9 21.6

EBITDA 316 323 349 418 369 829 1,174

Changes (%) 54.7 50.8 26.0 49.0 16.6 41.1 41.6

EBITDA Margin (%) 36.5 35.4 37.9 38.9 34.8 25.7 31.1

Reported PAT 256 282 289 399 318 840 1,226

Adjusted PAT 256 282 289 402 318 840 1,226

Changes YoY (%) 48.3 57.9 31.6 71.8 24.1 47.4 46.0

PAT Margin (%) 29.6 31.0 31.4 37.9 30.0 26.1 32.5


Resumes on Naukri (m) 26 27 28 29 30 25 29

Unique Naukri cust. 22,900 23,500 23,500 25,000 25,000 42,000 46,000

Avg Res. added daily 12,000 12,000 11,000 9,000 13,000 12,000 11,000

E: MOSL Estimates

83August 27 - 31, 2012


Info Edge (India): Financials and valuation


Y/E March 2009 2010 2011 2012

Net Sales 2,458 2,371 3,223 3,919

Other Income 279 307 329 509

Total Income 2,737 2,678 3,552 4,428

Power & Fuel Cost 25 24 30 32

Employee Cost 899 882 1,232 1,434

Other Manufacturing Exp. 113 116 147 139

Selling and Admn Expenses 692 651 803 864

Miscellaneous Expenses 67 111 182 276


EBITDA 662 588 829 1,174

Operating Profit 941 895 1,159 1,683

Interest 17 20 23 22

Gross Profit 924 875 1,136 1,662


Profit before Tax 853 810 1,056 1,578

Tax 269 332 426 512

Fringe Benefit Tax 9 0 0 0

Deferred Tax -8 -15 -25 17

Net Profit 582 492 656 1,050

Minority Interest (after tax) 0 -34 23 30

Profit/Loss of Associate Co. -12 -6 -1 14

PAT after MI & P/L Asso.Co. 570 521 631 1,033

Extraordinary Items 57 -23 30 51

Adjusted Net Profit 513 544 601 982


Y/E March 2009 2010 2011 2012


Reserves Total 2,951 3,446 3,805 4,727

Equity Application Money 0 28 0 0

Total Shareholders Funds 3,224 3,747 4,351 5,273

Minority Interest 0 0 16 -25

Total Debt 4 6 3 3



Gross Block 528 581 919 936

Less: Accumulated Depn. 226 287 332 389

Net Block 302 294 587 548

Capital Work in Progress 83 69 89 94

Investments 183 1,141 2,628 3,152

Current Assets, Loans & Advances

Sundry Debtors 35 80 149 81

Cash and Bank 3,221 2,791 1,319 2,216

Loans and Advances 180 240 122 154

Total Current Assets 3,436 3,110 1,590 2,451

Current Liabilities 734 812 1,305 1,618


Total Current Liabilities 795 896 1,496 1,852

Net Current Assets 2,641 2,214 94 599


Net Deferred Tax 19 34 59 42

Other Assets 0 0 914 817

Total Assets 3,228 3,753 4,371 5,251

Ratios

Y/E March 2009 2010 2011 2012

Basic (INR)

EPS 5.2 4.7 5.7 9.3

Book Value 29.5 34.1 39.9 48.3

Key Ratios


Turnover Ratios

Fixed Assets 4.9 4.3 4.3 4.2

Debtors 70.0 41.6 28.2 34.1


PBIDTM (%) 38.3 37.7 36.0 43.0

PBITM (%) 35.4 35.0 33.5 40.8

PBDTM (%) 37.6 36.9 35.3 42.4

CPM (%) 26.6 23.5 22.8 28.9

APATM (%) 23.7 20.8 20.3 26.8

RoCE (%) 29.5 23.8 26.6 33.3

RoNW (%) 19.8 14.1 16.2 21.8

Payout (%) 3.5 4.2 6.3 10.6


Y/E March 2009 2010 2011 2012

Cash and Cash Equivalents

at Beginning of the year 485 3,221 2,791 2,076

Net Cash fr. Oper. Activities 198 376 1,038 1,008

Net Cash Used in

Investing Activities 2,563 -784 -1,728 -180

Net Cash Used in

Financing Activities -25 -22 -24 -49

Net Inc/(Dec) in Cash and

Cash Equivalent 2,736 -430 -714 779


at End of the year 3,221 2,791 2,076 2,856

Key Operating Metrics (Nos)

Resumes on Naukri - m 17 21 25 29

Unique Naukri customers 34,000 35,500 42,000 46,000

Avg Resumes added daily 14,000 11,000 12,000 11,000

August 27 - 31, 2012 84


Infosys



Promoter 16.0 16.0 16.0

Dom. Inst. 18.3 16.6 9.8

Foreign 51.8 53.4 52.4

Others 13.9 14.0 21.7

Stock info

Bloomberg INFO IN


CMP (INR) 2,351

Mcap (USD b) 24.2

52-Wk Range (INR) 2977 / 2102

1, 6, 12 Rel Perf (%) 5 / -17 / -9

Company descriptionInfosys is India's second largest IT Services Company

with revenues of around USD6b and employing over

151,000 people. Infosys defines designs and delivers IT

enabled business solutions that help many Global 2000

companies.

Infosys has a global footprint in 23 countries and

development centers in India, China, Australia, the UK,

Canada and Japan. Its service offerings span business

and technology consulting, ADM, SI, product

engineering, IT infrastructure services and BPO. The

company obtains ~64% of its revenues from North

America, 22% from UK and ~2% from India. 35% of its

revenues come from BFSI, followed by 23% from Retail

& Life Sciences, the key verticals.

Key investment arguments Most profitable company among frontline Indian IT

companies, with a wide offering of services profile

and deep domain knowledge.

The company witnessed a pricing decline and

simultaneously increased its volume guidance for

FY13. We believe: (1) Brand value enjoyed by Infosys

allows it to attract customers with even a moderate

cut in price, and (2) the company will be extremely

selective in offering such price cuts; only the need

to hold on to bread-and-butter business in key

accounts could have forced its hand at the cuts.

Key challenges Continued pricing decline akin to that witnessed in

1QFY13 could lead to prolonged pain on the bottom-

line, despite offset coming in the form of healthy

volume growth.

Appreciation in rupee could hamper profitability.

Macro headwinds impact the company more due

to higher discretionary mix in its portfolio.

Key news flows / triggers to watch The company won 4 large deals, 1 with TCV of

USD300m+, and 4 transformational deals during

1QFY13.

Infosys had 8 client wins in products and platforms

during the quarter.

After the pricing cut in 1Q, trend in pricing and

margin performance will be keenly watched.

1QFY13 highlights; guidance for FY13, FY14 Volume growth in 1QFY13 was the only bright spot

in what was a largely disappointing quarter on most

fronts – margins, pricing and revenues.

Guidance of 'at least' 5% USD revenue growth in

FY13 was lower than 6% that we had expected at

the lower end. Further, Infosys also discontinued

the practice of giving quarterly guidance.

We have moderated our FY14 volume growth to

11.3% v/s 14.3% earlier, as management indicated

macro stress could continue for 4-8 quarters.




Change - QoQ (%) 3.2 8.2 14.8 (4.8) 8.6 22.7 16.7

EBITDA 21,750 25,160 31,350 28,900 29,460 107,160 122,854

Change - QoQ (%) (6.1) 15.7 24.6 (7.8) 1.9 19.7 14.6

EBITDA Margin (%) 29.1 31.1 33.7 32.6 30.6 31.8 31.2

Reported PAT 17,220 19,060 23,720 23,160 22,890 83,160 94,560

Adjusted PAT 17,220 19,060 23,720 23,160 22,890 83,160 94,560

Change - QoQ (%) (5.3) 10.7 24.4 (2.4) (1.2) 21.9 13.7

PAT Margin (%) 23.0 23.5 25.5 26.2 23.8 24.7 24.0


Volume growth 3.2 4.4 3.0 (0.6) 2.8 10.8 9.6

Headcount 133,560 141,822 145,088 149,994 151,151 149,994 162,880

Utiz. (incl. trainees) 69.6 70.2 69.9 67.2 67.2 69.2 68.5

E: MOSL Estimates

85August 27 - 31, 2012


Infosys: Financials and valuation


Y/E March 2011 2012 2013E 2014E

Sales 275,010 337,340 393,740 426,266

Change (%) 20.9 22.7 16.7 8.3

Software Develop. Exp. 150,620 188,710 225,152 249,068

Selling and Mktg. Exp. 15,320 17,570 19,660 21,634

Administration Exp. 19,510 23,900 26,074 27,753

EBITDA 89,560 107,160 122,854 127,810

% of Net Sales 32.6 31.8 31.2 30.0

Depreciation 8,540 9,370 10,451 10,631

Interest 0 0 0 0

Other Income 12,110 19,040 19,432 21,979

PBT 93,130 116,830 131,835 139,158

Tax 24,900 33,670 37,368 38,964

Rate (%) 26.7 28.8 28.3 28.0

Adjusted PAT 68,230 83,160 94,467 100,194

Reported PAT 68,230 83,160 94,467 100,194

Change (%) 8.9 21.9 13.6 6.1


Y/E March 2011 2012 2013E 2014E

Share Capital 2,860 2,860 2,860 2,860

Reserves 256,900 331,750 358,885 432,338

Net Worth 259,760 334,610 361,745 435,198

Loans 0 0 0 0


Gross Block 85,010 91,740 106,100 120,100


Net Block 52,350 55,530 59,359 62,728

CWIP 5,250 10,340 10,490 10,490

Investments 1,440 3,770 25,650 25,650

Curr. Assets 253,890 313,840 349,700 407,564

Debtors 46,530 77,550 97,817 93,428


Loans & Advances 53,200 27,220 43,409 52,224


Current Liab. & Prov 53,170 48,870 83,454 71,233


Provisions 26,400 18,060 43,632 27,343




Volume Growth (%) 18.0 6.2 21.5 10.8

Headcount 104,850 113,796 130,820 149,994

Utiliz. incl trainees (%) 68.6 68.1 72.0 69.2

E: MOSL Estimates

Ratios

Y/E March 2011 2012 2013E 2014E

Basic (INR)

EPS 119.4 145.5 165.5 175.4

Cash EPS 134.2 161.8 183.4 193.7

Book Value 454.1 585.0 632.4 760.8

DPS 60.3 47.0 70.0 40.0

Payout % (excl.div.tax) 50.5 32.3 42.3 22.8

Valuation (x)

P/E 19.7 16.2 14.2 13.4

Cash P/E 17.5 14.5 12.8 12.1

EV/EBITDA 13.3 10.6 9.1 8.3

EV/Sales 4.3 3.4 2.8 2.5


Dividend Yield (%) 2.6 2.0 3.0 1.7


RoE 27.8 28.0 27.1 25.1

RoCE 33.1 32.9 32.3 29.4

Turnover Ratios




Y/E March 2011 2012 2013E 2014E


Cash for Working Capital -14,300 -9,340 -1,873 -16,646

Net Operating CF 61,260 80,890 102,906 94,179

Net Purchase of FA -12,590 -17,640 -14,430 -14,000

Net Purchase of Invest. 35,680 -2,330 -21,880 0

Net Cash from Invest. 23,090 -19,970 -36,310 -14,000

Proceeds from Equity 1,170 23,109 -20,630 0

Dividend Payments -40,130 -29,069 -46,795 -26,740

Cash Flow from Fin. -38,960 -5,960 -67,425 -26,740

Net Cash Flow 45,390 54,960 -830 53,439

Opening Cash Bal. 105,560 150,950 205,910 205,080

Add: Net Cash 45,390 54,960 -830 53,439

Closing Cash Bal. 150,950 205,910 205,080 258,519

August 27 - 31, 2012 86


ING Vysya Bank



Promoter 43.7 43.8 43.9

Dom. Inst. 13.9 13.7 12.8

Foreign 26.9 26.9 27.4

Others 15.5 15.6 15.9

Stock info

Bloomberg VYSB IN


CMP (INR) 392

Mcap (USD b) 1.1

52-Wk Range (INR) 405 / 275

1, 6, 12 Rel Perf (%) 0 / 14 / 18

Company descriptionING Vysya Bank (VYSB) had a balance sheet size of

INR487b and franchise of 527 branches and 446 ATMs

across India as of June 2012. With a strong management

at the helm of affairs, VYSB has built a robust platform,

delivering consistent performance. Improvement in key

ratios reaffirms the bank's turnaround and the

management's strong execution skills.

Key investment positives VYSB has been able to deliver healthy margins of

3%+ led by stable CASA ratio of 32-33% and higher

share of SME (31% v/s 25% in FY10) and retail loans

(~20%). Easing of liquidity conditions and lower cost

of funds hold key for better margin performance.

Asset quality performance has been commendable

so far (GNPA/NNPA down from 3.2%/1.4% in 1QFY11

to 2%/0.2% in 1QFY13. While slippages are expected

to rise led by challenges in macro environment,

strong buffer built by boosting PCR (90 %+) would

provide cushion to earning.

With systems/processes in line with large private

banks, and niche expertise in SME, VYSB is well

placed to grow its loan book above industry rates.

Operating efficiency and improvement in core

income helped VYSB improve cost to core income

ratio from 71% (FY09) to 61% (FY12). With above-

industry loan growth, and higher fee income, expect

gradual decline in cost to income ratio to continue.

Key challenges VYSB's RoA has improved from -0.3% in FY05 to 1.1%

in FY12. For further improvement, fall in opex to

average assets (improvement in productivity) is

imperative, as there is limited scope for positive

surprises on margins and credit cost.

Over the past three quarters, bank has not added

any branch to its existing network, which may act

as hurdle to growth in medium term.

Key news flows / triggers to watch Continuous positive surprise on asset quality

despite higher share of SME portfolio could lead to

earning upgrade.

Fee income growth improved in 1QFY13;

sustainability of the same would be one of the key

drivers of RoA going forward.

1QFY13 highlights; guidance for FY13, FY14 Performance highlights of 1QFY13: While slippages

increased QoQ, strong recoveries and upgrades

contained GNPA (up 4% QoQ). NIM stable at 3.3%

unlike historic trend of 1Q. Strong fee income

growth of 20% YoY led by traction across fee income

streams. Loan growth was strong at 23% YoY, CASA

ratio declined 200bp QoQ to 32%.

Management guidance for FY13: (a) Margin

guidance of 3.2-3.3%, (b) Loan growth to be above

industry average, (c) CASA ratio to be in the current

range of 32-34%.



NII 2,620 3,036 3,236 3,192 3,433 12,084 14,324

Change (%) 10.1 19.4 31.6 18.9 31.0 20.1 18.5

Other Income 1,405 1,625 1,699 1,968 1,710 6,698 8,022

Opex 2,557 2,767 2,822 2,957 2,967 11,102 12,844


Change (%) -1.2 2.8 32.5 53.9 48.1 20.9 23.7

Provisions 62 175 334 566 267 1,138 1,594

PAT 940 1,154 1,195 1,274 1,301 4,563 5,377

Change (%) 36.1 53.3 44.0 39.5 38.4 43.2 17.8


NIM (%) 3.0 3.4 3.5 3.3 3.3 3.3 3.3

Loan Growth YoY (%) 25.5 22.8 22.6 21.8 22.9 21.8 20.0

GNPA (%) 2.2 2.0 2.0 1.9 2.0 1.9 2.1

E: MOSL Estimates

87August 27 - 31, 2012


ING Vysya Bank: Financials and valuation


Y/E March 2011 2012 2013E 2014E

Interest Income 26,941 38,568 48,141 54,845



Change (%) 21.3 20.1 18.5 16.7


Net Income 16,614 18,781 22,346 26,265

Change (%) 14.6 13.0 19.0 17.5



Change (%) -1.0 20.9 23.7 21.4


PBT 4,838 6,541 7,908 8,935

Tax 1,652 1,978 2,531 2,859

Tax Rate (%) 34.2 30.2 32.0 32.0

PAT 3,186 4,563 5,377 6,076

Change (%) 31.5 43.2 17.8 13.0

Adjusted PAT 3,186 4,563 5,377 6,076

Change (%) 43.5 43.2 17.8 13.0

Equity Dividend 363 600 699 790

Core PPP* 5,014 7,143 8,678 10,506

Change (%) 5.8 42.4 21.5 21.1



Y/E March 2011 2012 2013E 2014E



Net Worth 26,243 39,798 44,357 49,509

Deposits 301,942 351,954 429,384 532,436

Change (%) 16.7 16.6 22.0 24.0

of which CASA Dep 104,586 120,473 135,723 156,081

Change (%) 24.1 15.2 12.7 15.0

Borrowings 41,469 56,965 58,810 62,140



Current Assets 25,214 32,306 41,062 52,235

Investments 110,583 127,155 142,414 163,776

Change (%) 5.6 15.0 12.0 15.0

Loans 236,021 287,367 344,840 420,705

Change (%) 27.5 21.8 20.0 22.0

Fixed Assets 5,028 5,008 5,024 4,966

Other Assets 13,293 18,170 22,713 28,391

Total Assets 390,140 470,005 556,053 670,072

Asset Quality (%)

GNPA (INR m) 1,554 1,495 3,337 6,241

NNPA (INR m) 918 525 1,702 2,910

GNPA Ratio 0.66 0.52 0.96 1.47

NNPA Ratio 0.39 0.18 0.49 0.69



Ratios

Y/E March 2011 2012 2013E 2014E










RoE 13.4 14.3 13.1 13.2

RoA 0.9 1.1 1.0 1.0





Cost/Income* 67.2 60.9 59.7 58.4

Empl. Cost/Op. Exps. 59.0 58.6 60.8 62.6

Busi. per Empl. (Rs m) 73.9 69.1 69.6 82.2

NP per Empl. (Rs lac) 0.5 0.5 0.5 0.6

* ex treasury



CASA Ratio 34.6 34.2 31.6 29.3



CAR 12.9 14.0 13.1 11.8

Tier 1 9.4 11.2 10.5 9.5

Valuation

Book Value (INR) 208.3 258.2 288.6 322.9

Change (%) 12.4 24.0 11.8 11.9

Price-BV (x) 1.5 1.4 1.2

Adjusted BV (INR) 203.4 255.9 281.2 310.3

Price-ABV (x) 1.5 1.4 1.3

EPS (INR) 26.3 30.4 35.8 40.5

Change (%) 42.3 15.4 17.8 13.0




E: MOSL Estimates

August 27 - 31, 2012 88


IPCA Laboratories



Promoter 45.9 46.0 46.1

Dom. Inst. 21.4 22.2 22.2

Foreign 10.9 9.8 10.4

Others 21.9 22.0 21.4

Stock info

Bloomberg IPCA IN


CMP (INR) 403

Mcap (USD b) 0.9

52-Wk Range (INR) 425 / 230

1, 6, 12 Rel Perf (%) 4 / 30 / 21

Company descriptionIPCA Laboratories is one of India's better managed mid-

sized pharma companies. It has presence in:

(1) domestic branded formulations (35% of sales)

(2) global branded and generic formulations (35%), and

(3) global APIs (29%).

IPCA's core business strategy is to leverage its strength

in manufacturing API to develop vertically integrated

and highly competitive formulations. Most of IPCA's

formulations are backed by its own APIs. It is also one

of the key suppliers of anti-malarial drugs to WHO and

has scaled up this business significantly.

Key investment positives Strong capability in API manufacturing is at the core

of IPCA's business success. The company has

attained global leadership position in select APIs

where it is the lowest cost producer which gives

the company vertical integration advantage.

It has outperformed the domestic industry growth

over the past 5 years on the back of its rising

presence in fast-growing chronic therapy segments.

We expect a significant ramp-up in IPCA's

international formulations revenues led by 37%

CAGR for the US business and 25% CAGR for branded

formulations business.

Expect 31% EPS CAGR for FY12-14, led by expected

ramp-up in the US and recovery of growth for the

domestic formulations business.



Needs to broaden its therapeutic coverage in India

to fully exploit the domestic market potential.

Sustaining profitability despite being a late entrant

in the US generic market will be challenging.

Key news flows / triggers to watch Approvals for and ramp-up of products from Indore

SEZ; this is imperative to drive growth in the US.

Ability to drive growth in India despite the lower

incidence of malaria.

How IPCA manages to counter price erosion in UK.

1QFY13 highlights IPCA's 1QFY13 performance was slightly below

estimates due to deferment of shipments in the

institutional business to next quarter. India

formulations growth of 18.6% was a positive

surprise, but the same may not be sustainable given

the lower incidence of infectious diseases as a

result of delayed monsoon.

EBITDA grew 40% YoY to INR1.33b (below our

estimate of INR1.4b); EBITDA margin expanded

300bp YoY to 21% (our estimate 21.9%) largely

impacted by lower institutional segment revenues.

Adjusted PAT declined 30% YoY to INR430m due to

INR580m of forex losses.




Change (%) 26.8 20.3 31.8 13.5 19.7 24.3 18.1

EBITDA 952 1,580 1,513 1,117 1,329 5,135 6,318

Change (%) 33.6 33.9 66.2 16.4 39.7 36.5 23.0

EBITDA Margin (%) 18.0 25.3 24.6 19.9 21.0 21.8 22.7

Reported PAT 617 780 639 766 430 2,762 3,866

Adjusted PAT 617 780 639 766 430 2,762 3,866

Change (%) 58.8 -17.1 0.0 16.9 -30.3 5.3 40.0

PAT Margin (%) 11.6 12.5 10.4 13.7 6.8 11.7 13.9


Dom. Formulations 1,890 2,292 1,876 1,477 2,242 7,534 8,664

Intl Formulations 2,066 2,605 2,898 2,393 2,245 9,961 12,496

Domestic APIs 407 356 333 343 393 1,439 1,439

Intl APIs 901 927 911 1,319 1,422 4,058 4,719

E: MOSL Estimates

89August 27 - 31, 2012


IPCA Laboratories: Financials and valuation


Y/E March 2011 2012 2013E 2014E

Net Revenues 18,969 23,587 27,855 32,257

Change (%) 21.4 24.3 18.1 15.8

EBITDA 3,761 5,135 6,318 7,364

Margin (%) 19.8 21.8 22.7 22.8


EBIT 3,203 4,464 5,475 6,362

Int. and Finance Charges 314 413 426 426

Other Income - Rec. 518 -408 105 180

PBT after EO Expense 3,407 3,643 5,154 6,116

Current Tax 770 881 1,031 1,284


Tax 784 881 1,289 1,407

Tax Rate (%) 23.0 24.2 25.0 23.0

Reported PAT 2,623 2,762 3,866 4,709

Less: Minority Interest -5 0 0 0

Net Profit 2,628 2,762 3,866 4,709

Adj PAT 2,628 2,762 3,866 4,709


Y/E March 2011 2012 2013E 2014E


Total Reserves 10,265 12,288 15,380 19,147

Net Worth 10,516 12,540 15,633 19,400

Deferred liabilities 807 932 1189 1312

Total Loans 5,308 5,326 5,326 5,326


Gross Block 9,884 12,890 15,690 18,190

Less: Accum. Deprn. 2,892 3,563 4,407 5,409

Net Fixed Assets 6,992 9,326 11,283 12,781

Capital WIP 1,132 1,132 1,132 1,132


Curr. Assets 10,586 12,475 14,746 17,979

Inventory 4,664 6,699 6,786 8,027


Cash and Bank Balance 104 122 119 878

Loans & Advances 1,182 2,163 2,563 2,966



Provisions 420 377 528 611


Appl. of Funds 16,625 18,798 22,148 26,038


Y/E March 2011 2012 2013E 2014E

Domestic formulation 6,964 7,534 8,664 10,050

International formulation 6,917 9,961 12,496 14,789

APIs 4,778 5,497 6,157 6,773

Net Sales 18,659 22,992 27,318 31,613

Ratios

Y/E March 2011 2012 2013E 2014E

EPS (INR) 20.9 21.9 30.6 37.3

Cash EPS 25.3 27.2 37.3 45.3

BV/Share 83.7 99.4 123.9 153.8

Valuation (x)

P/E 19.3 18.4 13.2 10.8

Cash P/E 15.9 14.8 10.8 8.9

P/BV 4.8 4.1 3.3 2.6

EV/Sales 2.9 2.4 2.0 1.7

EV/EBITDA 14.9 10.9 8.8 7.5

Dividend Yield (%) 0.9 1.1 1.5 1.9

FCF per Share 3.9 8.5 9.5 16.9

Return Ratios (%)

RoE 27.4 24.0 27.4 26.9

RoCE 25.6 24.1 28.7 28.6






Leverage Ratio (x)



Debt/Equity 0.5 0.4 0.3 0.3


Y/E March 2011 2012 2013E 2014E

Oper.Profit/Loss before Tax 3,761 5,135 6,318 7,364

Interest/Dividends Recd. 518 -408 105 180


(Inc)/Dec in WC -1,203 111 -1,396 -1,632


(inc)/dec in FA -1,821 -3,006 -2,800 -2,500

(Pur)/Sale of Investments -83 68 0 0


Issue of shares 1 1 0 0

(Inc)/Dec in Debt 762 25 0 0

Interest Paid -314 -413 -426 -426

Dividend Paid -468 -554 -773 -942

Others -388 -185 0 0

CF from Fin. Activity -407 -1,126 -1,199 -1,368

Inc/Dec of Cash -4 18 -3 760

Add: Beginning Balance 108 104 122 119

Closing Balance 104 122 119 878

August 27 - 31, 2012 90


ITC




Dome. Inst. 34.1 34.3 35.9

Foreign 49.4 49.1 46.6

Others 16.4 16.6 17.5

Stock info

Bloomberg ITC IN


CMP (INR) 262

Mcap (USD b) 36.7

52-Wk Range (INR) 269 / 185

1, 6, 12 Rel Perf (%) -1 / 31 / 23

Company descriptionITC, an associate of BAT (British American Tobacco),

enjoys ~80% market share of India's organized cigarettes

market. Over the years, ITC has diversified into FMCG,

Hotels, Paper and Paperboard and agri businesses as it

looks to build a conglomerate and reduce dependence

on cigarettes.

Key investment positives Dominant market share ~80% and strong pricing

power in cigarettes business offers strong growth

potential due to rising affordability and ban on FDI

(restricts potential MNC entrants).

Despite price hikes, ~1.5% cigarette volume growth

in 1QFY13 reflects strong consumer preference for

ITC's cigarette brands.

Significant improvement in margin profile of paper

and agri divisions and steady reduction in Consumer

division losses have helped boost EBITDA margins

by 280bp over the last 2 years.

Limited capex requirement and huge cash flow

generation (~4x capex requirement) can provide

upsides to dividend payouts in coming years.

Key challenges Steep increase in taxes on cigarettes in the middle

of the year or in the next Union Budget can impact

volume growth. Differential and rising VAT rates

across states are also a key challenge.

Higher than expected losses in Consumer business

due to input cost pressure and new brand launches

can delay the expected breakeven.

Key news flows / triggers to watch News of various tax hikes in cigarettes has been a

recent overhang on the stock and needs to be

monitored.

Extent of price increases and launch of 64mm

variant in the cigarettes portfolio.

Increase in dividend payout from historical average

of ~45% could be a key positive.

1QFY13 highlights; guidance for FY13, FY14 1QFY13 cigarette volumes grew ~1.5% YoY and

realizations grew 13.5%, driving Net sales growth

of 15% to INR33b.

Consumer division losses fell to INR388m; margins

improved despite increased pace of new launches.

ITC has also started test marketing filter cigarettes

of length not exceeding 65mm in UP and Bihar.

We model cigarettes volume growth of 2%/7% for

FY13/14, translating to 15% EBIT CAGR and 17% PAT

CAGR over FY12-14.




Change (%) 20.4 17.6 14.2 16.9 14.7 17.3 15.8

EBITDA 19,579 22,190 23,811 22,633 23,683 88,486 104,650

Change (%) 19.1 18.0 18.0 18.8 21.0 19.4 18.3

EBITDA Margin (%) 33.5 36.5 38.1 32.5 35.3 35.2 35.9

Reported PAT 13,327 15,143 17,010 16,143 16,021 61,624 71,726

Adjusted PAT 13,327 15,143 17,010 16,143 16,021 61,624 71,726

Change (%) 24.5 21.5 22.5 26.0 20.2 23.6 16.4

PAT Margin (%) 22.8 24.9 27.2 23.2 23.9 24.5 24.6


Cigarette

Volume Growth (%) 8.0 7.5 5.0 5.0 1.5 6.4 2.0

EBIT Growth (%) 20.8 18.6 20.3 19.5 20.5 20.1 15.2

E: MOSL Estimates

91August 27 - 31, 2012


ITC: Financials and valuation


Y/E March 2011 2012 2013E 2014E

Net Sales 211,676 247,984 287,603 330,714

Operational Income 2,914 3,754 3,833 4,176

Total Revenue 214,590 251,738 291,436 334,890

Change (%) 16.7 17.3 15.8 14.9


EBITDA 74,118 88,486 104,650 122,653

Margin (%) 35.0 35.7 36.4 37.1

Depreciation 6,560 6,985 8,041 8,806


Other Inc. - Recurring 5,798 8,253 7,717 8,960


Margin (%) 34.3 35.9 36.0 36.9

Tax 22,806 27,352 31,332 36,922

Tax Rate (%) 31.4 30.7 30.8 30.8


Change (%) 28.9 23.6 16.4 17.8

Margin (%) 23.6 24.8 24.9 25.6

Reported PAT 49,867 61,624 71,726 84,525


Y/E March 2011 2012 2013E 2014E

Share Capital 7,738 7,738 7,738 7,738

Reserves 151,795 180,597 214,559 254,582

Net Worth 159,533 188,335 222,297 262,320

Loans 992 992 992 992

Deferred Liability 8,019 7,227 6,330 5,303


Gross Block 127,658 142,658 157,658 172,658

Less: Accum. Depn. 44,208 51,483 59,524 68,329

Net Fixed Assets 83,451 91,175 98,135 104,329

Capital WIP 13,334 10,000 10,000 10,000

Investments 55,547 67,973 92,073 124,392

Curr. Assets, L&A 101,840 109,176 123,621 138,480

Inventory 52,675 62,747 71,083 79,490



Others 17,656 21,648 23,982 26,642




Provisions 34,436 27,374 32,278 38,037




Cigarettes FY11 FY12 FY13E FY14E

Volume Growth (%) -2.8 7.0 2.0 7.1

VAT (%) 14.5 18.2 20.8 20.8

Net Realisation Gr (%) 16.6 10.4 10.5 7.4

EBIT Growth (%) 16.8 20.1 15.2 15.5

Ratios

Y/E March 2011 2012 2013E 2014E

Basic (INR)

EPS 6.4 8.0 9.3 10.9

Cash EPS 7.3 8.9 10.3 12.1

BV/Share 20.6 24.3 28.7 33.9

DPS 4.5 3.5 4.2 4.9

Payout % 80.2 52.7 52.7 52.7

Valuation (x)

P/E 38.6 31.7 26.9 22.8

Cash P/E 34.1 28.3 24.2 20.6

EV/Sales 8.7 7.4 6.3 5.4

EV/EBITDA 25.0 20.9 17.4 14.6

P/BV 12.1 10.2 8.7 7.3

Dividend Yield (%) 1.8 1.4 1.7 2.0

Return Ratios (%)

RoE 31.3 32.7 32.3 32.2

RoCE 43.5 45.7 45.4 45.7




Leverage Ratio

Debt/Equity (x) 0.0 0.0 0.0 0.0


Y/E March 2011 2012 2013E 2014E


Int./Div. Received 5,798 8,253 7,717 8,960

Depreciation and Amort. 6,560 6,985 8,041 8,806

Interest Paid 684 779 750 750


Incr in WC 1,827 32,919 24,078 31,017

Diff in dep 607 -290 0 0


Extraordinary Items 0 1 2 3

Incr Decr in FA 11,224 11,666 15,000 15,000

Pur of Investments -1,722 12,427 24,100 32,319

CF from Invest. -9,502 -24,092 -39,098 -47,316

Issue of shares 5,220 0 0 0

Incr in Debt 0 0 0 -992

Interest Income 5,798 8,253 7,717 8,960


Dividend Paid 38,182 34,435 27,373 32,277

Others -1,574 13,829 12,809 20,056


Incr of Cash 11,170 -9,298 2,027 1,784


Closing Balance 22,432 13,135 15,161 16,945

August 27 - 31, 2012 92


Jaiprakash Associates



Promoter 46.7 46.8 46.8

Dom. Inst. 13.6 13.7 11.6

Foreign 20.6 20.6 20.4

Others 19.1 18.9 21.2

Stock info

Bloomberg JPA IN


CMP (INR) 76

Mcap (USD b) 2.9


1, 6, 12 Rel Perf (%) -5 / -7 / 26

Company descriptionJaiprakash Associates (JPA) is a diversified infrastructure

player with presence in Cement, Power, Roads, Real

Estate and Hospitality. The company is set to become

India's third largest cement player with target capacity

of ~36m tons and is among the top 10 private sector

power project developers currently (project pipeline

of 13GW), and has access to ~3.7b sq ft of land bank in

and around Noida, Uttar Pradesh.

Key investment positives JPA plans to ramp up cement capacity to ~36m tons

by end-FY13, up from 13.5m tons in FY09.

Of the 13GW of power projects under development,

1.8GW is operational while equipment awards have

been placed for 3.8GW, indicating good progress. It

has also commissioned 1GW of Karcham Wangtoo

hydro project.

JPA is the EPC contractor for the Real Estate project

at Noida, own power projects, etc. This provides

good revenue visibility for E&C division.

JPA group has outlined a strategy for consolidation

and de-leveraging. It plans to lower debt through

project cash flows, stake sale in Cement business,

and divestment in Jaypee Infratech.

Key challenges JPA's earnings are lumpy in nature given commodity

nature of cement business and project nature of

EPC and Real Estate businesses.

Consolidated debt stands at INR467b as of March

2012, implying DER of 3.8x.

Slowdown in real estate revenue bookings,

regulatory overhang on Cement / Power business.

Key news flows / triggers to watch Possibility of disinvestment in Cement business and

application of funds.

Commissioning of Bina power project and

developments on Nigrie thermal project and status

on Karcham Wangtoo PPA.

Ramp-up in real estate business both at standalone

and consolidated levels.

1QFY13 highlights; guidance for FY13, FY14 1QFY13 EBITDA was in-line with estimate, but led

by mixed trends across business. Performance was

boosted by higher EBITDA margin and cement

realization, while RE bookings were lower.

Expect consolidated cement sales of over 25m tons

in FY13E.




Change (%) 0.3 4.6 14.2 4.0 -0.9

EBITDA 7,728 7,482 8,160 10,194 7,713 34,397 35,101

Change (%) 20.4 9.9 3.1 31.7 19.1

EBITDA Margin (%) 24.3 23.9 24.7 25.1 26.0 26.8

Reported PAT 1,070 1,287 2,050 2,838 1,388 10,264 7,973

Adjusted PAT 1,072 1,287 2,034 2,789 1,379 10,203 7,973

Change (%) 1.3 11.4 -12.9 -3.3 37.8


Cement div. EBIT 34,854 34,854 36,014 37,014 15,629 54,650 66,806

EPC division EBIT 12,748 15,540 12,421 17,706 12,160 58,423 57,519

RE division EBIT 3,469 2,018 3,078 5,604 1,651 14,170 15,000

E: MOSL Estimates

93August 27 - 31, 2012


Jaiprakash Associates: Financials and valuation


Y/E March 2011 2012 2013E 2014E

Net Sales 129,650 128,531 141,997 161,157

Change (%) 28.5 -0.9 10.5 13.5

EBITDA 28,889 34,397 35,101 39,140

% of Net Sales 22.3 26.8 24.7 24.3

Depreciation 6,078 6,142 7,176 7,286

Interest 13,942 17,817 18,874 18,091

Other Income 8,668 2,706 2,505 2,098

PBT 17,537 13,143 11,556 15,861

Tax 5,867 2,880 3,582 5,576

Rate (%) 33.5 21.9 31.0 35.2

Reported PAT 11,670 10,264 7,973 10,286

Extra-ord. Inc. (net of exp) 0 61 0 0

Adjusted PAT 7,421 10,203 7,973 10,286

Change (%) -16.9 37.5 -21.9 29.0


Change (%) 355.1 -54.2 69.3 23.5

Balancesheet (INR Million)

Y/E March 2011 2012 2013E 2014E

Share Capital 4,253 4,253 4,253 4,253

Reserves 89,721 97,658 91,814 99,754

Net Worth 93,974 101,911 96,067 104,007

Loans 217,076 181,628 163,205 163,033

Deffered Tax Liability 11,940 12,440 12,440 12,940




Net Fixed Assets 119,569 126,052 121,376 116,590

Capital WIP 63,527 1,500 1,545 1,591

Investments 64,838 80,461 83,940 86,966

Curr. Assets 131,523 147,339 127,952 144,306

Inventory 32,833 36,311 39,008 43,609

Debtors 28,106 29,313 31,512 36,205


Loans & Advances 45,697 48,442 50,623 54,022





EBIT mix (INR m)

Y/E March 2011 2012 2013E 2014E

Construction 9,264 16,054 13,517 11,779

Cement 8,396 8,475 9,135 12,780

Hospitality 152 36 220 253

BOT Dividend 1,036 1,950 1,000 1,000

Power 122 152 183 219

Real estate 8,708 5,625 6,375 7,920

Exceptional 2,496 - - -

Unallocated (3,819) (2,082) - -

Total 26,355 30,209 30,430 33,952

Ratios

Y/E March 2011 2012 2013E 2014E

Basic (INR)

Adjusted EPS 3.5 4.8 3.7 4.8

Growth (%) -17.0 37.5 -21.9 29.0


Growth (%) 355.1 -54.2 69.3 23.5

Cash EPS 6.3 7.7 7.1 8.3

Book Value 44.2 47.9 45.2 48.9

DPS 0.7 1.0 0.7 1.0


Valuation (x)

P/E (standalone) 15.8 20.2 15.6

P/E (consolidated) 25.4 15.0 12.1

Cash P/E 9.8 10.6 9.1

EV/EBITDA 9.0 9.0 8.0

EV/Sales 2.4 2.2 1.9




RoE 8.3 10.4 8.1 10.3

RoCE 10.6 10.0 10.7 12.3

Turnover Ratios



Leverage Ratio

Debt/Equity (x) 2.3 1.8 1.7 1.6


Y/E March 2011 2012 2013E 2014E



Interest 13,942 17,817 18,874 18,091


(Inc)/Dec in WC -16,762 -4,525 -3,347 -6,321


(Inc)/Dec in FA -44,070 49,402 -2,545 -2,546

(Pur)/Sale of Investments -9,075 -15,623 -3,479 -3,027

CF from Investments -53,145 33,779 -6,024 -5,573

(Inc)/Dec in Net Worth 1,688 500 -12,000 500

(Inc)/Dec in Debt 37,988 -35,448 -18,423 -172


Dividend Paid 1,692 2,326 1,818 2,345


Inc/Dec of Cash -14,167 8,385 -26,463 3,661


Closing Balance 24,625 33,010 6,548 10,209

August 27 - 31, 2012 94


Jindal Steel & Power



Promoter 59.0 58.9 58.4

Dom. Inst. 7.3 6.9 6.5

Foreign 21.9 23.1 24.1

Others 11.8 11.1 11.0

Stock info

Bloomberg JSP IN


CMP (INR) 405

Mcap (USD b) 6.8

52-Wk Range (INR) 663 / 390

1, 6, 12 Rel Perf (%) -9 / -34 / -27

Company descriptionJindal Steel & Power (JSP) currently has 3mtpa of

operational steel-making capacity at Raigarh. It has one

of the best iron ore and coal resources in India, with

assets spread over various mineral-rich countries.

JSP offers the best insulation from iron ore and coking

coal prices among Indian steel producers, and is the

only power producer in India, most of whose projects

are secured for coal from captive mines.

The company has rich iron ore and coal resources

overseas, mainly in Mozambique, South Africa and

Indonesia.

Key investment positives JSP has planned to increase its steel capacity 4x over

the next four years. It is augmenting its existing

3mtpa capacity, by setting up a 1.6mtpa module at

Angul, which will use the coal gasification route. It

plans to add two more modules of 1.6mtpa each at

Angul and Raigarh, using this technology. At Patratu

(Jharkhand), JSP has selected the blast furnace

route for steel making.

Only 1/3rd of the 12mtpa steel capacity will be

exposed to coking coal imports.

Jindal Power plans to increase capacity by 10x in 10

years by adding 4,380MW of thermal power projects

in Chhattisgarh and Jharkhand at a capex of USD5.3b

and 6,100MW of hydro power projects in Arunachal

Pradesh at a capex of USD8.1b.

Key challenges Sluggish steel demand, cheaper imports and

enhanced capacity of steel majors due to recent

expansions will put pressure on prices. Domestic

producers will have to resort to more aggressive

pricing which will results in lower margins

Expected return on new projects (i.e. Angul and

Tamnar) has declined significantly due to repeated

delays and cost escalations. Moreover, increased

regulatory vigil on mining will lead to higher input

prices.

Key news flows / triggers to watch Utkal B1 coal mine is critical for value accretion in

its Angul Steel and Power projects which are

expected to be commissioned by June 2013.

1QFY13 highlights; guidance for FY13, FY14 JSP's 1QFY13 Adj Cons PAT grew 4.4% YoY to INR9.6b

(9% below our estimate) due to lower sales

volumes in the steel business, higher costs in Jindal

Power, and higher interest costs. Reported Cons PAT

of INR3.85b included INR5.7b on account of

impairment in value of investment in Bolivia.

Production of steel and pellets remained strong,

but sales volumes disappointed, as demand and

prices deteriorated sharply in June 2012.

The accumulated inventory is likely to yield lower

profits in the next quarter because of lower steel

prices.




Change (%) 31.4 43.5 37.3 42.2 19.2 38.9 14.7

EBITDA 16,257 18,038 17,922 19,144 15,932 71,361 67,012

Change (%) 3.9 20.1 12.1 10.8 -2.0 11.6 -6.1

EBITDA Margin (%) 41.2 40.8 41.1 34.9 33.9 39.2 32.1

Reported PAT 9,330 8,918 10,161 11,615 3,855 40,025 31,229

Adjusted PAT 9,188 10,495 10,210 11,670 9,594 41,563 36,763

Change (%) -2.4 19.1 9.1 17.3 4.4 10.7 -11.5

PAT Margin (%) 23.3 23.7 23.4 21.3 20.4 22.8 17.6


Steel (000 tons) 457 598 591 737 561 2,385 2,465

Pellets (000 tons) 347 526 464 691 395 2,028 1,934

Jindal Power(M kwh)1,906 1,839 2,030 1,976 2,015 7,750 8,002

E: MOSL Estimates

95August 27 - 31, 2012


Jindal Steel & Power: Financials and valuation


Y/E March 2011 2012 2013E 2014E

Net sales 131,116 182,073 208,923 221,316

Change (%) 18.2 38.9 14.7 5.9

Total Expenses 67,190 110,713 141,911 146,212

EBITDA 63,926 71,361 67,012 75,104

% of Net Sales 48.8 39.2 32.1 33.9


EBIT 52,416 57,498 52,899 57,309

Net Interest 3,356 5,059 6,981 12,563

Other income 820 1,432 1,183 1,355

PBT before EO 49,880 53,871 47,101 46,100

EO income -1,982 -5,741 0

PBT after EO 49,880 51,888 41,360 46,100

Tax 11,840 11,863 10,130 11,154

Rate (%) 23.7 22.9 24.5 24.2

Reported PAT 38,040 40,025 31,229 34,946

Minority interests 659 644 509 470

Share of Associates 158 200 301 158

Adjusted PAT 37,539 41,563 36,763 34,634

Change (%) 4.7 10.7 -11.5 -5.8


Y/E March 2011 2012 2013E 2014E


Reserves 139,965 180,218 214,718 245,856

Net Worth 140,899 181,152 215,653 246,790


Total Loans 139,766 150,146 209,146 276,146



Gross Block 192,756 225,668 231,911 397,074

Less: Accum. Deprn. 44,321 58,120 72,239 90,034

Net Fixed Assets 148,435 167,548 159,672 307,041

Capital WIP 100,409 139,784 232,519 165,135

Good will 1,018 1,018 1,018 1,018

Investments 2,979 2,979 2,979 2,979

Curr. Assets 107,863 114,640 122,076 144,389

Inventory 27,734 32,243 35,849 37,893



loans & advances 63,790 63,790 63,790 63,790



Provisions & Others 31,063 31,063 31,063 31,063


Appl. of Funds 293,054 345,804 441,114 541,282

JSP Operating Parameters

Steel (000 tons) 1,900 2,385 2,465 3,176

Metalics (000 tons) 336 164 18 56

Pellets (000 tons) 565 2,028 1,934 1,538

CPP (M kwh) 1,066 1,446 2,550 3,359

Jindal Power (M kwh) 7,920 7,750 8,002 7,984

JSP Realization (INR/kwh) 4.2 3.9 3.7 3.6


Y/E March 2011 2012 2013E 2014E

Basic (INR)

EPS 40.1 44.4 39.3 37.0

Cash EPS 53.0 57.7 48.5 56.5

BV/Share 150.8 193.9 230.9 264.2

DPS 1.5 1.6 2.0 2.0

Payout (%) 3.8 3.7 5.2 5.5

Valuation (x)

P/E 9.0 10.2 10.9

Cash P/E 7.0 8.3 7.1

P/BV 2.1 1.7 1.5

EV/Sales 2.9 2.8 2.8

EV/EBITDA 7.3 8.7 8.4


Return Ratios (%)

RoE 30.6 25.8 18.5 15.0

RoCE (pre-tax) 21.6 18.5 13.8 12.0



Debtor (Days) 32.1 28.5 31.1 30.8

Inventory (Days) 21.2 17.7 17.2 17.1

Work.Cap.Turnover (Days) 27.0 16.5 19.3 18.6

Payable (Days) 101.8 98.4 80.5 79.5

Leverage Ratio (x)



Debt/Equity 1.0 0.8 0.9 1.0

Cash Flow Statement (Consolidated) (INR Million)

Y/E March 2011 2012 2013E 2014E

Pre-tax profit 49,880 51,888 41,360 46,100

Depreciation 11,510 13,863 14,113 17,795

(Inc)/Dec in Wkg. Cap. -18,929 5,341 -10,244 -779

Tax paid -9,472 -9,491 -8,104 -8,909

Other operating activities 262 -250 -784 -2,104


(Inc)/Dec in FA + CWIP -82,070 -72,287 -98,978 -97,779



Equity raised/(repaid) 3 0 0 0



Other financing activities 1,663

CF from Fin. Activity 52,287 10,508 57,081 65,081

(Inc)/Dec in Cash 3,674 -427 -5,556 19,406


Closing Balance 4,802 4,404 -1,152 24,017

August 27 - 31, 2012 96


JSW Energy



Promoter 76.7 76.7 76.7

Domestic Instn 5.9 5.7 5.8

Foreign 9.2 10.3 10.5

Others 8.2 7.2 6.9

Stock info

Bloomberg JSW IN


CMP (INR) 50

Mcap (USD b) 1.5


1, 6, 12 Rel Perf (%) -7 / -28 / -16

Company descriptionJSW Energy (JSWEL), a Sajjan Jindal group company, has

a power generation project portfolio of 11.4GW. Of this,

2.6GW is operational, 0.5GW is under construction

(expected to be commissioned in FY13), and the

remaining 8GW is under various stages of development

and planning. The company is an early entrant in power

trading business, and also has a JV with Toshiba for super

critical steam turbines and generator.

Key investment positives JSWEL's business model in the medium term is a

combination of merchant power sales and spot coal

purchases. Of the 3.1GW operational capacity by

FY13E, 44% of offtake will be on short-term (ST) sales

and 66% of the fuel purchases will be on spot basis.

Global thermal coal indices are down ~35% since

their peak in Dec-10, led by changing US energy

dynamics, slowdown in demand from China, etc.

Even in INR terms, the indices are down by ~17%

despite rupee depreciation. JSWEL is a key

beneficiary with ~1.4GW merchant capacity located

in high-deficit consumption regions. JSWEL has

already tied up sizable capacity under ST contract at

price range of INR4.5-5.0/unit.

JSWEL has lowest DER among private sector players

at 1.76x as at June 2012. Higher operating cash flows

and no sizable commitment would ensure that

equity dilution is not necessary in the near term.

Key challenges Imported coal prices have been softening, but any

major rebound could impact earnings.

INR depreciation in the past has been steep and is

yet to see signs of easing out.

Approval of Raj West tariff crucial to improve near

term profitability of the project.

Key news flows / triggers to watch Higher merchant prices over FY13/14E. We expect

merchant prices at INR4.0/unit.

Continued weakness in imported coal prices and

rupee appreciation could be twin benefits.

Approval of lignite production expansion for

Kapurdi mines from MoEF (Raj West project).

Favorable tariff order on Raj West and 300MW PPA

with MSEDCL.

1QFY13 highlights; guidance for FY13, FY14 1QFY13 performance was higher than estimates led

by higher generation at 4.7BUs, and better gross

margin at INR2.10/unit, v/s INR0.2/unit in 2QFY12.

in 1QFY13, JSWEL synchronized Raj West's Unit-V

and Unit-VI and is expecting project CoD in FY13.

It expects to file for revised tariff order of Raj West

in 3QFY13.

Management expects merchant realization in the

range of INR4-4.25/unit, with an upward bias.




Change (%) 36.5 17.8 64.3 44.6 72.2 42.5 33.4

EBITDA 3,932 1,182 3,495 5,869 5,834 14,477 24,852

Change (%) -13.1 -63.6 -1.2 35.5 48.4 -7.4 71.7

EBITDA Margin (%) 31 12 20 28 27 24 30

Reported PAT 1,363 -1,089 -827 2,303 34 1,700 4,308

Adjusted PAT 1,363 -221 549 1,683 1,949 3,313 6,223

Change (%) -54.4 -114.3 -60.2 -18.3 43.0 -60.6 87.9

PAT Margin (%) 10.7 -2.2 3.1 8.1 8.9 5.4 7.6


Merc. Tar. (INR/Unit) 4.51 3.15 3.99 4.18 4.56 4.37 4.05

Fuel Cost (INR/Unit) 2.92 2.94 2.69 2.43 2.44 2.69 2.27

Plant PLF (%) 71 74 81 92 92 72 80

E: MOSL Estimates

97August 27 - 31, 2012


JSW Energy: Financials and valuation


Y/E March 2011 2012 2013E 2014E

Net Sales 42,944 61,189 81,635 91,302

Change (%) 82.3 42.5 33.4 11.8


EBITDA 15,642 14,478 24,852 31,239

% of Net Sales 36.4 23.7 30.4 34.2

Depreciation 2,668 5,033 7,742 8,841

Interest 4,325 7,172 10,252 10,105

Other Income 1,332 1,466 1,656 1,156

PBT 9,980 3,739 8,515 13,448

Tax 1,563 419 2,377 3,070

Rate (%) 15.7 11.2 27.9 22.8

PAT before Min. Int. 8,418 3,320 6,138 10,378

Reported PAT 8,418 3,314 6,223 10,483

Change (%) 12.9 -60.6 87.8 68.5

Adjusted PAT 8,418 3,314 6,223 10,483

Change (%) 12.5 -60.6 87.8 68.5


Y/E March 2011 2012 2013E 2014E

Share Capital 16,401 16,401 16,401 16,401


Share Holder Funds 56,765 57,001 60,295 69,009

Minority 724 500 415 310

LT Borrowings 84,709 87,172 106,585 100,455

Deffered Tax Liabilities 1,562 1,292 1,292 1,292

Other LT Liabilities 6 14 14 14

LT Provisions 323 286 286 286

Non Current Liabilities 86,601 88,764 108,177 102,047


Total Equity & liabilities 176,048 192,988 179,786 180,946

Fixed Assets 134,903 146,446 145,987 142,263

Non Current Investments 2,389 2,871 3,427 3,427

LT Loan and Advances 11,552 12,525 12,000 12,000

Non Current Assets 148,844 161,842 161,414 157,690

Current Investments 2,453 2,100 2,100 2,100

Inventories 5,348 7,658 3,179 3,289

Trade Receivables 7,645 11,760 6,141 6,824


ST Loan and Advances 1,509 2,824 2,824 2,824


Current Assets 27,204 31,146 18,372 23,256

Total Assets 176,048 192,988 179,786 180,946


Merchant Tariff (INR/Unit) 4.1 4.4 4.0 4.0

Fuel Cost (INR/Unit) 2.5 2.4 2.3 2.2


- PPA (MW) 780 1,380 1,380 1,380

- Merchant (MW) 950 1,220 1,760 1,760

Avg PLF (%) 59 60 72 77

Ratios

Y/E March 2011 2012 2013E 2014E

Basic (INR)

Adjusted EPS 5.1 2.0 3.8 6.4

Growth (%) 12.5 -60.6 87.8 68.5

Cash EPS 6.5 4.1 7.1 11.8

Book Value 34.6 34.8 36.8 42.1

DPS 1.0 0.5 0.4 1.0


Valuation (x)

P/E 24.5 13.0 7.7

Cash P/E 12.1 6.9 4.2

EV/EBITDA 11.4 7.5 5.6

EV/Sales 2.7 2.3 1.9




RoE 14.8 5.8 10.6 16.2

RoCE 9.7 6.4 10.5 13.9

Leverage Ratio

Debt/Equity (x) 1.5 1.5 1.8 1.4


Y/E March 2011 2012 2013E 2014E



Interest 4,325 7,172 10,252 10,105

Less : Direct Taxes Paid -1,563 -419 -2,377 -3,070

(Inc)/Dec in WC -8,067 6,784 -27,664 -2,892

CF from Operations 7,344 22,310 -3,533 26,432

(Inc)/Dec in FA 28,540 10,014 2,899 4,500

(Pur)/Sale of Investments -9,503 130 -1,544 0

CF from Investments 19,037 10,143 1,355 4,500

(Inc)/Dec in Net Worth 2,898 -2,155 0 0

(Inc)/Dec in Debt 17,675 -3,494 13,702 -6,130

(Inc)/Dec in DefferedTax Liability 527 1,698 -13 -2,169

Less : Interest Paid -4,325 -7,172 -10,252 -10,105

Dividend Paid -1,906 -3,530 -603 -1,562

CF from Fin. Activity 14,868 -14,653 2,834 -19,966

Inc/Dec of Cash 3,730 -3,093 -2,677 3,154


Closing Balance 9,779 6,686 4,009 8,101

August 27 - 31, 2012 98


JSW Steel



Promoter 38.6 38.5 38.3

Dom. Inst. 4.7 4.7 4.8

Foreign 41.3 41.7 45.4

Others 15.3 15.2 11.5

Stock info

Bloomberg JSTL IN


CMP (INR) 721

Mcap (USD b) 2.9

52-Wk Range (INR) 885 / 464

1, 6, 12 Rel Perf (%) 4 / -12 / 8

Company descriptionJSW Steel (JSTL) is currently the largest private sector

steel manufacturer in terms of installed capacity in

India. It has 10mtpa steel plant located in Vijaynagar,

Karnataka. With the acquisition of Ispat Industries and

Salem Steel, it controls 14mtpa capacity. Its Karnataka

facility is located in proximity to rich iron ore reserves

belt. It has investments in iron ore mining in Karnataka

and Chile. Its other overseas investments include plate

and pipe mill operations and coal mines in the US.

Key investment positives JSTL has demonstrated excellent project execution

skills over the past decade, growing its capacity 6x

to 10mtpa via brownfield expansions at Vijaynagar.

It has the lowest conversion cost due to operational

efficiencies. Its strategic location near iron ore rich

Bellary-Hospet belt helps it to keep iron ore

purchase costs low; however, the ban on iron ore

mining at Bellary and subsequent non-availability

of adequate quantity at lower costs has derailed

volume growth.

Key challenges Sluggish steel demand, cheaper imports and

enhanced capacity of steel majors due to recent



pricing which will result in lower margins.

Sourcing iron ore is still a challenge in view of delay

in reopening Karnataka mines. JSW Steel has to

additionally live with deteriorating quality of iron

ore from e-auction in Karnataka, which has

increased the coke rate, reduced the campaign life

of equipment, and resulted in lower effective

capacity due to higher slag rate.

Key news flows / triggers to watch Timely restart of mining operations in Karnataka is

critical for JSTL to meet its production target of

8.5mtpa. Based on current stock and additional

supply from NMDC it can only produce ~4.2mt in

next 3 quarters.

Supreme Court has favored restarting of Category

A&B iron ore mines in Karnataka and is likely to

pass order regarding the same after going through

CEC's R&R report.

1QFY13 highlights; guidance for FY13, FY14 JSTL's 1QFY13 adjusted standalone PAT increased

16% YoY to INR6.6b due to higher realization and

lower tax rate.

Net Sales grew 28% YoY to INR90.4b driven by 4%

higher realization and 23% higher volumes. Sales

volume declined 9% QoQ to 2.19mt.

EBITDA/ton increased 8% QoQ to USD154. Blended

realization increased 4% QoQ to INR42,853 due to

better sales mix.

CEC has approved R&R plan for 7 Category A mines

and company expects these mines to be operational

in August after certain approvals.




Change (%) 51.0 32.1 35.6 34.3 27.8 37.5 1.3

EBITDA 14,082 13,104 12,534 16,518 17,728 56,238 59,981

Change (%) 36.1 32.1 25.3 -0.1 25.9 17.7 6.7

EBITDA Margin (%) 19.9 17.2 15.9 17.3 19.6 17.5 18.4

Reported PAT 5,783 1,271 6,684 7,522 2,690 21,260 13,808

Adjusted PAT 5,713 5,993 9,592 5,592 6,632 26,890 17,540

Change (%) 66.6 82.6 155.7 -32.3 16.1 36.5 -34.8

PAT Margin (%) 8.1 7.9 12.2 5.9 7.3 8.4 5.4


Sales (mt) 1.7 1.9 1.9 2.3 2.1 7.8 8.1

Realiz. (INR/ton) 41,245 40,553 41,281 41,319 42,853 41,109 39,961

EBITDA/ton(USD/ton) 184 152 129 143 154 150 138

E: MOSL Estimates

99August 27 - 31, 2012


JSW Steel: Financials and valuation


Y/E March 2011 2012 2013E 2014E

Net sales 241,059 343,681 360,186 390,034

Change (%) 27.2 42.6 4.8 8.3

Total Expenses 192,380 282,662 294,778 325,789

EBITDA 48,679 61,019 65,408 64,245

% of Net Sales 20.2 17.8 18.2 16.5


EBIT 33,082 41,687 43,349 41,658

Net Interest 10,603 14,273 18,618 20,560

Other income 1,900 769 571 615

PBT before EO 24,379 28,183 25,302 21,713

EO income -15,353 -5,948

PBT after EO 24,379 12,830 19,354 21,713

Tax 7,785 5,002 8,217 8,459

Rate (%) 31.9 39.0 42.5 39.0

Reported PAT 16,594 7,828 11,137 13,254

Minority interests -239 189 36 36

Share of Associates 707 -2,262 -2,996 -2,000

Preference dividend 279 279 279 279

Adj. PAT (after MI & Asso) 16,783 14,844 11,321 11,011


Y/E March 2011 2012 2013E 2014E

Share Capital 2,231 2,231 2,231 2,231

Reserves 163,062 165,265 168,400 177,175

Net Worth 165,293 167,496 170,631 179,406


Total Loans 237,431 298,513 304,461 324,461



Gross Block 337,771 426,895 456,895 486,895

Less: Accum. Deprn. 68,732 88,775 110,834 133,421

Net Fixed Assets 269,039 338,121 346,061 353,474

Capital WIP 65,078 35,703 55,703 75,703

Investments 26,437 18,856 18,856 18,856

Curr. Assets 98,329 146,453 136,772 147,584

Inventory 44,097 57,893 59,209 64,115



Others 21,729 40,514 40,514 40,514



Appl. of Funds 425,437 495,435 510,327 544,872

Operating Parameters

Forex Rate (INR/USD) 45.6 47.9 53.5 52.0

Coal(Coking Hard fob) 214 288 202 200

Iron ore JSW (USD/ton) 60 65 59 60

Steel - JSW Steel (USD/ton) 780 815 709 699

Volumes (000 tons) 6,098 7,814 8,140 9,400

EBITDA per ton (USD) 172 150 138 120

Ratios

Y/E March 2011 2012 2013E 2014E

Basic (INR)

EPS 75.2 66.5 50.7 49.4

Cash EPS 144.3 121.7 148.8 160.6

BV/Share 740.8 750.7 764.8 804.1

DPS 12.3 7.5 7.5 7.5

Payout (%) 20.9 15.4 20.2 20.7

Valuation (x)

P/E 10.8 14.2 14.6

Cash P/E 5.9 4.8 4.5

P/BV 1.0 0.9 0.9

EV/Sales 1.2 1.2 1.2

EV/EBITDA 7.0 6.8 7.1


EV/ton 1,140 1,018 938

Return Ratios (%)

RoE 12.3 8.9 6.7 6.3

RoCE (pre-tax) 9.6 8.7 8.1 7.6



Creditors(Days) 45 44 45 45

Leverage Ratio (x)



Debt/Equity 1.3 1.6 1.7 1.7


Y/E March 2011 2012 2013E 2014E

EBITDA 48,679 61,019 65,408 64,245

(Inc)/Dec in Wkg. Cap. -13,137 -28,388 2,643 -2,453

Tax Paid -4,269 -4,113 -2,446 -2,725


(Inc)/Dec in FA + CWIP -52,994 -59,750 -50,000 -50,000

(Pur)/Sale of Investments -266 7,581

Acquisition in subsidiaries-23,598

Int. & Dividend Income 526 769 571 615


Equity raised/(repaid) 59,356



Interest paid -10,007 -14,273 -18,618 -20,560

Other financing -281 -12,159 -11,676 -2,206


(Inc)/Dec in Cash 5,621 9,484 -10,406 4,678

Add: opening Balance 3,030 23,170 32,653 22,248

Margin Money & deb. bal. 14,518

Closing Balance 23,170 32,653 22,248 26,926

August 27 - 31, 2012 100


Kotak Mahindra Bank



Promoter 45.2 45.3 45.5

Dom. Inst. 4.5 4.7 5.4

Foreign 34.3 33.9 31.7

Others 16.1 16.1 17.4

Stock info

Bloomberg KMB IN


CMP (INR) 588

Mcap (USD b) 7.8

52-Wk Range (INR) 612 / 411

1, 6, 12 Rel Perf (%) -4 / 5 / 27

Company descriptionKotak Mahindra group is one of India's largest financial

conglomerates. Kotak Mahindra Bank (KMB) together

with its subsidiaries has a presence across spectrum of

financial services – lending, broking, investment

banking, life insurance, asset management, and

proprietary investments. As on June 2012, KMB had 366

branches and consolidated asset base of INR968b.

Key investment positives KMB's dependence on earnings from non lending

businesses has reduced considerably over past few

years. Share of profits from lending business has

increased from 40-45% of total in FY07/08 to 80%+

currently, which provides stability to earnings.

Outlook for the lending business remains healthy

as (1) Loan growth is likely to remain 20%+ in FY13/

14 with focus on corporate and secured retail loans,

and (2) Margins are likely to remain superior than

the industry at 4.5%+.

KMB has demonstrated excellent asset quality

performance in the current credit cycle. Higher share

of secured products in the overall mix should also

augur well for asset quality.

Life insurance business has turned profitable and is

unlikely to require any further capital infusion. With

improvement in the outlook for capital market

related businesses, the share of profits from non

lending businesses should rise going forward.

Key challenges Asset quality remains a key monitorable on the back

of early warning signs of asset quality deterioration

in some key products and continued policy paralysis.

Moderating growth, especially in some of the high

yielding products, expected deterioration in asset

quality and higher base of FY12 (due to healthy

recoveries and just 15bp of credit cost) could put

pressure on lending business profitability.

Key news flows / triggers to watch RBI has directed the bank to reduce promoter

holding to 20% by March 2018 from ~45% currently.

KMB's strategy on the same will have to be watched.

Signals of improvement in the outlook for the

capital market related businesses.

1QFY13 highlights; guidance for FY13, FY14 While lending business PAT grew 9% YoY, in line with

our expectations, sluggish capital market business

affected overall profitability.

Asset quality deteriorated as one large corporate

account slipped into NPA. Asset quality will remain

a key monitorable.

Loan growth guidance for FY13 has been toned down

to 20%+ from 25-30% earlier.

The management has maintained its margin

guidance of 4.5%+ (4.7% in 1QFY13) even if the loan

mix undergoes change.

KMB Group: Earnings Estimates (INR Million)

Business FY10 FY11 FY12 FY13E FY14E

Kotak Mah. Bk.(Standalone) Banking Business 5,611 8,182 10,850 11,940 13,404

Kotak Mahindra Prime Auto loans, debt

capital markets 1,664 3,179 3,849 4,057 4,571

Kotak Mahi. Investments Primarily LAS 347 240 153 185 194

Lending Business 7,622 11,600 14,852 16,182 18,170

International subsidiaries Asset mgt & Inv. Bkg. 799 509 -110 0 50

Kotak Mah. AMC&Trustee Co Mutual funds mgt. 725 173 220 260 278

Kotak Investment Advisors Alternate asset mgt. 398 327 360 375 425

Asset Mgt Business 1,921 1,009 470 635 753

Kotak Securities Broking & distri. 2,601 1,819 1,260 1,044 1,052

Kotak Mah. Capital Co. Invest. Banking 239 519 60 222 250

Capital Market Business 2,840 2,338 1,320 1,265 1,302

Consol. PAT excl. Kotak Life 12,382 14,948 16,642 18,082 20,224

YoY Growth (%) 89 21 11 9 12

Kotak OM Life Insurance Life insurance 692 1,014 2,030 2,233 2,568

Cons. Adjust. -4 -294 -349 -150 -150

Consol. PAT Incl. Kotak Life 13,070 15,667 18,322 20,165 22,642

YoY Growth (%) 100 20 17 10 12

101August 27 - 31, 2012


Kotak Mahindra Bank: Financials and valuation

Income Statement (Standalone) (INR Million)

Y/E March 2011 2012 2013E 2014E

Interest Income 41,898 61,802 76,212 89,659



Change (%) 12.9 19.8 24.1 18.7


Net Income 28,781 34,898 42,213 50,220

Change (%) 15.8 21.3 21.0 19.0



Change (%) 2.1 24.9 18.9 21.4

Provisions (excl tax) 1,371 551 2,121 4,174

PBT 11,877 15,999 17,559 19,712

Tax 3,695 5,149 5,619 6,308

Tax Rate (%) 31.1 32.2 32.0 32.0

Standalone PAT 8,182 10,850 11,940 13,404

Change (%) 45.8 32.6 10.0 12.3


Change (%) 19.9 16.9 10.1 12.3

Equity Dividend (Incl tax) 462 517 590 662

Core PPP (Standlone)* 11,083 14,445 17,180 20,936

Change (%) 6.8 30.3 18.9 21.9


Balance Sheet (Standalone) (INR Million)

Y/E March 2011 2012 2013E 2014E



Net Worth 67,965 79,459 90,809 103,552

Deposits 292,610 385,365 489,414 601,979

Change (%) 22.5 31.7 27.0 23.0

of which CASA Dep 87,905 124,024 154,102 195,524

Change (%) 17.8 41.1 24.3 26.9

Borrowings 117,239 165,955 198,695 237,683



Current Assets 24,710 26,346 45,504 54,406

Investments 171,214 215,668 258,802 310,562

Change (%) 36.8 26.0 20.0 20.0

Loans 293,293 390,792 476,767 581,655

Change (%) 41.2 33.2 22.0 22.0

Fixed Assets 4,256 4,500 4,632 4,665

Other Assets 15,033 19,359 24,199 29,039

Total Assets 508,507 656,665 809,903 980,326

Asset Quality (Standalone, Excl. acquired NPA) (%)

GNPA (INR m) 3,618 4,778 8,131 10,984

NNPA (INR m) 1,461 2,243 4,497 5,874

GNPA Ratio 1.22 1.21 1.69 1.87

NNPA Ratio 0.50 0.57 0.94 1.01

PCR (Incl acquired NPA) 65.0 61.4 50.0 50.0

PCR (Excl acquired NPA) 59.6 53.0 44.7 46.5

Ratios (Standalone)

Y/E March 2011 2012 2013E 2014E










Consolidated ROE 16.6 15.4 14.5 14.2

Standalone Core RoE 15.4 15.4 14.6 14.3

Standalone RoA 1.9 1.9 1.6 1.5





Loans/(Dep.+Borrowings) 71.6 70.9 69.3 69.3

CASA Ratio 30.0 32.2 31.5 32.5


Invest/(Dep.+Borrowings) 41.8 39.1 37.6 37.0

CAR 19.9 17.5 17.1 16.2

Tier 1 18.0 15.7 15.3 14.5

Valuation

Book Value (INR) 92.2 107.3 122.6 139.8

BV Growth (%) 43.2 16.3 14.3 14.0

AP/BV (x) 4.4 3.7 3.2

Consol BV (INR) 148.8 174.2 200.6 230.3

BV Growth (%) 30.9 17.1 15.2 14.8

Price-Consol BV (x) 3.4 2.9 2.6

Adjusted BV (INR)* 86.5 100.9 114.2 130.2

AP/ABV (x) 4.6 4.0 3.4

Adjusted Consol BV 147.4 172.1 196.4 224.7

Price-Consol ABV (x) 3.4 3.0 2.6

Standalone EPS (Rs) 10.5 14.2 15.5 17.4

EPS Growth (%) 36.4 35.3 9.7 12.0


Consol EPS (INR) 21.3 24.7 27.2 30.6

Con. EPS Growth (%) 13.3 16.3 10.1 12.3

Price-Concol EPS (x) 23.8 21.6 19.2



E: MOSL Estimates

August 27 - 31, 2012 102


Company descriptionL&T is India's largest engineering and construction

company. It is a conglomerate with interests in

technology, engineering, construction, manufacturing

and financial services. The company is also involved in

various developmental projects on BOT basis in roads,

ports, rail and power sectors. Exports contribute around

~18% of order intake. Large manufacturing capacities in

segments like power BTG, forging, ship-building, etc

are being commissioned.

Key investment positives L&T has demonstrated strong adaptability, given

exposure to various segments and geographies; and

has thus been able to weather the challenging

macro environment much better than peers. Order

backlog stands at INR1,531b implying BTB ratio of

2.8x TTM. We believe L&T has carved out a

differentiated positioning given strong execution

skills, diversified portfolio and balance sheet; and

will benefit from likely pick-up in demand.

Revenue growth is robust, with management

guiding for FY13 growth at 15-20%, on back of 21%

growth in FY12.

Margins have remained stable, given the strong risk

mitigation measures being practised. Order intake

is also expected to be steady with management

guidance of 15-20% growth, despite a challenging

macro environment.

Larsen & Toubro




Dom. Inst. 38.4 36.6 36.6

Foreign 18.2 19.7 21.3

Others 43.4 43.7 42.1

Stock info

Bloomberg LT IN


CMP (INR) 1,453

Mcap (USD b) 16.0

52-Wk Range (INR) 1,720 / 971

1, 6, 12 Rel Perf (%) 2 / 4 / -17




Change (%) 21.1 21.4 23.5 21.0 26.1 21.1 16.4

EBITDA 11,265 11,741 13,641 25,608 10,869 62,826 71,418

Change (%) 12.1 16.7 10.2 9.3 (3.5) 11.4 13.7

EBITDA Margin (%) 11.9 10.4 9.8 13.9 9.1 11.8 11.5

Reported PAT 7,461 7,984 9,915 19,204 8,635 44,565 47,667

Adjusted PAT 7,461 7,984 11,275 18,654 10,023 44,825 49,180

Change (%) 12.0 15.0 40.0 22.1 34.3 23.7 9.7

PAT Margin (%) 7.9 7.1 8.1 10.1 8.4 8.4 7.9

Key Operating Matrics

Order intake (INR b) 161.9 161.0 171.3 211.6 196.0 705.7 740.7

Order intake gr. (%) 3.6 (21.3) 28.2 (30.2) 21.1 (11.5) 4.9

WCap.(% of sales) 10.3 12.6 13.0 11.8 15.3 12.0 15.9

E: MOSL Estimates

Key challenges Order intake is driven by shortgestation projects

particularly from the infrastructure segment. Also,

key investments in manufacturing JVs and BOT

projects are likely to be a drag on profits in the near

term, impacting RoEs.

Unfavorable political climate, logjams relating to

clearances for projects, etc, are impediments for

order intake growth, impacting earnings growth.

Key news flows / triggers to watch L&T has signed shareholders agreement with

Mazagon Dock, India's biggest naval shipyard to

manufacture defense submarines.

L&T is targeting to monetize some its mature assets

to unlock value. The company is also looking for

external funding in its developmental project

portfolios. Attempts to correct the capital structure

will act as a strong re-rating trigger.

1QFY13 highlights; guidance for FY13, FY14 1QFY13 operating performance was in-line with

estimates. Revenue grew 27% YoY in 1QFY13 to

INR120b while adj EBITDA margin declined 152bp

YoY. Adjusted PAT (excl dividend from subsidiaries)

grew just 2.9% YoY to INR7.1b.

Working capital deteriorated at 15.3% of revenues

v/s 11.9% YoY, due to increased support to vendors.

Management has maintained its order intake and

revenue growth guidance of 15-20% YoY.

103August 27 - 31, 2012


Larsen & Toubro: Financials and valuation


Y/E March 2011 2012 2013E 2014E

Total Revenues 442,961 537,378 625,585 709,180

Growth Rate (%) 18.6 21.3 16.4 13.4

Excise Duty 3,902 5,673 6,604 7,486

Net Revenues 439,059 531,705 618,981 701,694

Growth Rate (%) 18.6 21.1 16.4 13.4

Manufacturing Expenses 334,681 410,202 481,510 545,530

Staff Cost 28,301 36,635 41,031 45,134

S G &A Expenses 19,778 22,230 25,023 28,367

EBITDA 56,299 62,639 71,418 82,663

Change (%) 18.8 11.3 14.0 15.7

EBITDA Margin (%) 12.8 12.2 11.5 11.8

Depreciation 5,905 6,817 8,079 9,288

EBIT 50,394 55,822 63,339 73,375

Net Interest 6,193 6,661 9,200 9,800

Other Income 9,106 13,078 13,956 12,500

Non-recurring Other Income 2,369 305 0 0

Add: Trf to Rev. Res. 11 10 10 10


Tax 19,436 18,538 20,091 22,445

Effective Tax Rate (%) 34.9 29.6 29.5 29.5

Reported Profit 39,580 44,566 48,014 53,640

EO Adjustments 3,329 550 -383 0

Adjusted Profit 36,250 44,016 48,397 53,640

Cons. Profit (Adj) 42,416 47,730 51,950 56,483

Growth (%) 14.3 12.5 8.8 8.7


Y/E March 2011 2012 2013E 2014E

Equity Capital 1,218 1,224 1,224 1,224


Net Worth 218,463 252,229 285,678 323,836

Debt 71,611 98,958 115,000 120,000





Add: Capital WIP 7,713 7,587 4,500 4,500

Net Fixed Assets 74,153 83,636 95,557 106,268

Investments 146,848 158,719 139,307 153,174

Inventory 15,772 17,766 18,569 21,051

Sundry Debtors 124,276 187,298 235,213 266,644

Cash & Bank 17,296 17,781 38,799 36,633

Loans & Advances 82,253 91,280 103,976 113,183


Current Assets 350,097 434,574 534,005 593,155



Capital Deployed 292,706 352,518 402,008 445,166

Ratios

Y/E March 2011 2012 2013E 2014E

Basic (INR)

Adjusted EPS 59.5 73.2 80.3 87.6

Growth (%) 12.6 23.0 9.6 9.2

Con. EPS (Fully Diluted) 69.7 78.0 84.9 92.3

Growth (%) 13.0 11.9 8.8 8.7

Book Value 358.8 412.1 466.8 529.1


Div. Payout (Incl. Div Tax ) % 28.4 25.3 29.5 28.9

Valuation (x)

P/E (Standalone) 29.9 19.7 18.1 16.6

P/E (Consolidated) 25.6 18.5 17.1 15.7

EV/EBITDA 18.9 14.3 13.1 11.5

EV/ Sales 2.4 1.7 1.5 1.3


Dividend Yield 0.8 1.1 1.4 1.5

Return Ratio (%)

RoE 16.6 17.8 17.2 16.6

RoCE 13.9 14.1 13.9 13.6

Turnover Ratios

Debtors (Days) 102.4 127.2 137.2 137.2

Inventory (Days) 13.0 12.1 10.8 10.8


Leverage Ratio

Current Ratio (x) 1.3 1.3 1.5 1.5

D/E (x) -0.1 0.0 0.2 0.2


Y/E March 2011 2012 2013E 2014E



Interest 6,193 6,661 9,200 9,800


(Inc)/Dec in WC -9,269 -34,431 -34,749 -21,612


(Inc)/Dec in FA -16,429 -16,487 -20,000 -20,000

(Pur)/Sale of Investments 9,972 4,108 39,028 10,000

Investment in subs -19,766 -15,979 -19,616 -23,866

Advances to subs -9,598 -4,703 -3,527 -2,569


(Inc)/Dec in Net Worth 11,257 -429 -383 0

(Inc)/Dec in Debt 3,603 27,347 16,042 5,000


Dividend Paid 8,973 9,962 11,119 14,181

CF from Fin. Activity -306 10,295 -4,660 -18,981

Inc/Dec of Cash 3,048 483 21,769 -4,301


Closing Balance 17,367 17,779 39,550 34,498

August 27 - 31, 2012 104


LIC Housing Finance



Promoter 40.3 40.3 36.6

Dom. Inst. 9.1 9.4 7.8

Foreign 37.5 37.1 40.4

Others 13.1 13.2 15.3

Stock info

Bloomberg LICHF IN


CMP (INR) 250

Mcap (USD b) 2.3

52-Wk Range (INR) 290 / 196

1, 6, 12 Rel Perf (%) -9 / -4 / 15

Company descriptionLIC Housing Finance (LICHF) is India's second largest

housing finance company. It offers individual housing

loans and loans to developers as project finance. LICHF

operates through a network of 190 marketing offices

and a large number of DSAs and home loan agents. It

also has a representative office in Dubai and Kuwait.

Its AUM stands at INR656b as on June 2012.

Key investment positives Despite moderation in economic growth, structural

growth drivers for the Indian housing finance

industry remain intact. This, coupled with LICHF's

strong foothold in tier II and tier III cities, would

help it achieve healthy growth going forward. We

model in ~24% loan CAGR over FY12-14.

LICHF had slowed down growth in its developer loan

portfolio given uncertain macro environment. As a

result, the developer loan portfolio declined from

11% of loans in FY10 to ~5% in FY12. Going forward,

LICHF intends to selectively grow this portfolio,

which would help improve its spreads.

Spreads have bottomed out and should improve

from current levels led by (1) decline in cost of

funds, (2) asset re-pricing benefits on the teaser

rate loans (partially in FY13 and partially in FY14),

and (3) increase in share of developer loans.

Asset quality is expected to remain healthy on the

back of the secured nature of loans and historically

lower default rates in the mortgages business.

Key challenges Intensifying competition from banks / NBFCs to grab

market share in this secularly growing industry could

lead to rate war.

Inability to grow the developer loan portfolio on

expected lines may not allow spreads to expand.

Key news flows / triggers to watch SBI has reduced interest rates on home loans

offering the lowest rate on the street. If some of

the other major private / PSU banks follow suit, it

may intensify competition in this space.

The NHB has waived off pre-payment penalty on

floating rate loans converted from teaser rate loans.

This may lead to increase in the repayment rates,

which will be monitored over next few quarters.

1QFY13 highlights; guidance for FY13, FY14 LICHF's 1QFY13 performance was much below

expectations driven by disappointment on margins

front and higher provisioning expenses.

Margins contracted 26bp sequentially on the back

of sharp 36bp QoQ increase in cost of funds, while

the yield on loans remained flat.

For FY13, management has guided for INR220b (6%

YoY growth) disbursements in the individual

segment and INR20b in the developer segment.

Management is targeting margins of 2.5-2.7% by

March 2013 (v/s 2.18% in 1QFY13) and spread of 1.6-

1.7% (v/s 1.1% in 1QFY13).




YoY Gr. (%) 22.6 9.5 -7.5 -11.8 -2.9 1.4 24.0


YoY Gr. (%) 27.0 5.1 -33.3 -22.7 -8.2 -10.8 22.3

Provisions 334 2,047 -797 -24 436 1,561 1,103

PBT 3,454 1,307 4,059 3,488 3,043 12,309 15,860

Tax 889 323 1,003 952 766 3,167 4,362

Profit after Tax 2,565 984 3,056 2,536 2,277 9,142 11,499

YoY Gr. (%) 21.0 -58.0 43.1 -19.4 -11.2 -6.2 25.8


Loan Growth (%) 32.1 29.3 26.6 23.5 24.1 23.5 23.9

NIM (%; Calc.) 2.78 2.45 2.27 2.44 2.18 2.44 2.44

GNPA (%) 0.84 0.64 0.63 0.42 0.71 0.42 0.46

E: MOSL Estimates

105August 27 - 31, 2012


LIC Housing Finance: Financials and valuation


Y/E March 2011 2012 2013E 2014E

Interest Income 44,697 59,827 74,315 90,512



Change (%) 54.7 1.4 24.0 30.2

Fee Income 1,501 1,322 1,486 1,870

Income from Investments 603 804 804 904

Other Income 1,886 198 218 243

Net Income 17,710 16,240 19,760 25,481

Change (%) 65.0 -8.3 21.7 28.9



Change (%) 76.3 -10.8 22.3 30.5

Provisions/write offs 2,609 1,561 1,103 -618

PBT 12,939 12,309 15,860 22,748

Tax 3,197 3,167 4,362 6,256

Tax Rate (%) 24.7 25.7 27.5 27.5

PAT 9,743 9,142 11,499 16,492

Change (%) 47.3 -6.2 25.8 43.4

Adjusted PAT 10,285 10,011 11,499 15,332

Change (%) 55.5 -2.7 14.9 33.3



Y/E March 2011 2012 2013E 2014E

Capital 950 1,010 1,010 1,010


Net Worth 41,691 56,822 65,630 78,263

Borrowings 451,628 560,873 707,193 893,936

Change (%) 29.9 24.2 26.1 26.4


Investments 14,032 13,750 15,125 16,638

Change (%) 1.0 -2.0 10.0 10.0

Loans 510,898 630,802 781,429 976,980

Change (%) 34.2 23.5 23.9 25.0

Net Fixed Assets 339 623 739 795


Total Assets 493,319 617,695 772,823 972,199

E: MOSL Estimates

Ratios

Y/E March 2011 2012 2013E 2014E



Avg. Yield on Earning Assets 9.8 10.3 10.4 10.2


Int. Spread on housing loans 2.3 1.4 1.5 1.8

NIM on housing loans 3.1 2.4 2.4 2.6


Adj RoAE 27.2 20.3 18.8 21.3

Adj RoAA 2.4 1.8 1.7 1.8




Fees/Operating income 3.2 2.1 1.9 2.0


Empl. Cost/Op. Exps. 31.5 30.6 32.4 32.4

Valuation

Book Value (INR) 87.8 112.5 130.0 155.0

Growth (%) 23.1 28.2 15.5 19.2

Price-BV (x) 2.2 1.9 1.6

Adjusted BV (INR) 87.5 112.1 129.3 154.2

Price-ABV (x) 2.2 1.9 1.6

EPS (INR) 20.5 18.1 22.8 32.7

Growth (%) 47.3 -11.7 25.8 43.4


Adj. EPS (INR) 21.7 19.8 22.8 30.4

Growth (%) 55.5 -8.4 14.9 33.3




E: MOSL Estimates

August 27 - 31, 2012 106


Lupin



Promoter 46.9 46.9 47.0

Dome. Inst. 16.1 16.5 19.1

Foreign 28.2 27.7 23.9

Others 8.9 8.9 10.1

Stock info

Bloomberg LPC IN


CMP (INR) 571

Mcap (USD b) 4.6

52-Wk Range (INR) 604 / 410

1, 6, 12 Rel Perf (%) -3 / 20 / 23

Company descriptionLupin (LPC) has successfully transitioned from a

domestic anti-TB company to a global generic company

with presence across therapeutic segments. US (36% of

sales), India (28% of sales), Japan (15% of sales) and

emerging markets (8% of sales) are its key markets.

Key investment positives Significant scale-up & internationalization of

operations without dilution of return ratios has been

LPC's key achievement over the last five years. We

expect high return ratios to sustain, given the

company's efficient capital allocation strategy.

LPC has a strong launch pipeline for the US with 120

ANDAs pending US FDA approval. It targets to

commercialize these over the next 3-4 years.

It has filed for niche, high-margins opportunities

like oral contraceptives (OC), ophthalmology which

will gradually start contributing meaningful

revenues over the next 2 years.

Increased traction in India formulations and

emerging markets should augur well.

Only Indian company to have a significant presence

in Japan (through past acquisitions) which positions

it rightly for exploiting the Japanese generic

opportunity.

Aspires to become a USD3b company by FY15

implying a topline CAGR of 25% over FY12-15.



Potential generic competition for Suprax, a key

profit contributor for LPC as of now.

Key news flows / triggers to watch Ramp-up in approvals and subsequent market share

gain in the OC segment in the US.

Sustained launch of new products in US & India –

this is imperative to drive future topline growth.

Government's progress on the implementation of

the new Pharma Policy.

1QFY13 highlights Performance was in-line with core topline growth

of 33%, core EBITDA growth of 21% and flat Adj PAT

growth. Topline growth was led US and India

formulations business and was partly boosted by

favorable currency.

Although Japan revenues grew 100%, adjusted for

Irom acquisition and currency benefit, core organic

growth was ~11%.

Core EBITDA margin declined 150bp YoY v/s our

estimate of 40bp decline due to higher than

expected staff cost and other expenses.

Adj PAT growth was flat despite 21% EBITDA growth

due to higher tax rate at 30%.




Oper. Inc. (ex one-offs)15,432 16,448 17,717 17,012 20,491 67,577 86,389

Change (%) 17.6 17.1 20.8 11.7 32.8 18.4 27.8

EBITDA 2,698 2,764 3,783 3,321 4,230 13,215 16,906

EBITDA (ex one-offs) 2,698 2,764 3,653 2,411 3,270 12,175 15,946

Change (%) 2.9 2.5 34.7 -8.2 21.2 14.2 31.0

EBITDA Margin (%) 17.5 16.8 20.6 14.2 16.0 18.0 18.5

Reported PAT 2,140 2,718 2,406 1,283 2,850 10,295 11,681

Adj. PAT (ex one-offs) 2,101 2,010 2,498 499 2,098 8,677 10,649

Change (%) 7.0 -6.5 11.5 -77.6 -0.1 1.1 22.7

PAT Margin (%) 13.6 12.2 14.1 2.9 10.2 12.8 12.3


US 4,931 5,520 6,188 8,664 8,024 25,303 31,802

Europe 415 461 644 455 473 1,975 2,410

India 4,969 5,120 5,198 4,192 6,212 19,479 23,570

Japan 1,666 1,780 2,468 2,693 3,329 8,607 12,725

RoW 1,348 1,591 1,439 1,873 1,837 6,251 9,064

APIs 2,102 1,976 1,981 2,432 2,317 8,491 9,051

107August 27 - 31, 2012


Lupin: Financials and valuation


Y/E March 2011 2012 2013E 2014E

Net Sales 57,068 69,597 88,090 101,091

Change (%) 20.4 22.0 26.6 14.8

EBITDA 10,659 13,215 16,906 20,382

Margin (%) 18.7 19.0 19.2 20.2

Depreciation 1,755 2,275 2,791 3,211

EBIT 8,903 10,940 14,115 17,170


Other Income - Rec. 1,341 1,376 1,743 1,767

PBT after EO item 9,920 11,961 15,407 18,486

Tax 1,169 3,086 3,852 4,437

Tax Rate (%) 11.8 25.8 25.0 24.0

Reported PAT 8,750 10,295 11,555 14,050

PAT Adj for EO items 8,750 8,875 10,849 14,050

Less: Minority Interest 168 199 200 220

Adj Net Profit 8,582 8,676 10,649 13,830

Consolidated Balance Sheet (INR Million)

Y/E March 2011 2012 2013E 2014E


Fully Diluted Equity Capital 889 893 893 893

Other Reserves 31,918 39,236 47,269 57,054

Total Reserves 31,918 39,236 47,269 57,054

Net Worth 32,811 40,129 48,163 57,947


Deferred liabilities 1,411 1,442 1,442 1,442

Total Loans 11,624 15,542 15,542 15,542


Net Fixed Assets 17,313 22,457 25,665 28,454

Capital WIP 5,312 4,437 5,312 5,312


Goodwill & Intangibles 3,255 5,040 5,040 5,040

Curr. Assets 34,967 46,911 53,243 61,905

Inventory 12,000 17,327 19,380 22,240



Others 6,208 8,241 8,809 10,109



Provisions 2,718 3,287 4,040 4,867


Appl. of Funds 46,361 57,836 65,869 75,654


Y/E March 2011 2012 2013E 2014E

Formulations 48,485 61,615 79,570 92,228

Regulated Mkts 28,229 35,885 46,937 52,615

Emerging Mkts 4,393 6,251 9,064 11,330

India 15,863 19,479 23,570 28,284

APIs & Others 8,937 8,402 9,051 9,472

Gross Sales 57,422 70,017 88,622 101,701

Ratios

Y/E March 2011 2012 2013E 2014E

Basic (INR)

EPS (Fully Diluted) 19.3 19.4 23.8 31.0

Cash EPS (Fully Diluted) 23.2 24.5 30.1 38.2

BV/Share 73.5 89.8 107.8 129.7

DPS 3.2 4.9 6.4 7.7

Payout (%) 18.9 24.7 28.7 28.8

Valuation (x)

P/E (Fully Diluted) 29.6 29.4 23.9 18.4

Cash P/E (Fully Diluted) 24.6 23.3 19.0 15.0

P/BV 7.8 6.4 5.3 4.4

EV/Sales 4.6 3.8 3.0 2.6

EV/EBITDA 24.6 20.2 15.7 13.0

Dividend Yield (%) 0.6 0.9 1.1 1.4

Return Ratios (%)

RoE 29.3 23.8 24.1 26.1

RoCE 25.1 24.6 26.6 27.6



Debtor (Days) 87 105 105 102


Wkg. Capital Turnover (Days) 131 136 124 133

Leverage Ratio

Debt/Equity (x) 0.4 0.4 0.3 0.3


Y/E March 2011 2012 2013E 2014E

Oper. Profit/(Loss) before Tax10,659 13,215 16,906 20,382



(Inc)/Dec in WC -2,401 -5,601 -3,181 -5,484

CF from Op. incl EO Exp. 8,405 5,935 11,616 12,228

(inc)/dec in FA -4,996 -6,909 -6,875 -6,000



Change in Net Worth 300 -232 -200 -220

Inc/(Dec) in Debt 226 3,917 0 0

Interest Paid -325 -355 -451 -451

Dividend Paid -1,658 -2,538 -3,321 -4,045

CF from Fin. Activity -1,457 793 -3,972 -4,716

Inc/Dec of Cash 2,186 -177 769 1,512


Closing Balance 4,201 4,024 4,794 6,305

August 27 - 31, 2012 108


Mahindra Finance



Promoter 57.2 57.3 57.4

Dom. Inst. 5.4 5.0 3.6

Foreign 32.7 34.1 34.7

Others 4.7 3.7 4.4

Stock info

Bloomberg MMFS IN


CMP (INR) 783

Mcap (USD b) 1.5

52-Wk Range (INR) 805 / 590

1, 6, 12 Rel Perf (%) 14 / 12 / 12

Company descriptionMahindra Finance (MMFS) is one of India's leading non-

banking finance companies providing personalized

finance for utility vehicles, tractors, cars, commercial

vehicles, construction equipment, and refinance

focusing on the rural and semi-urban sector.

As on June 2012, MMFS operated through a widespread

network of 615 branches and had AUM of INR217b.

Key investment positives MMFS has achieved strong asset growth in past five

years (24% CAGR during FY07-12) on the back of:

(1) buoyant rural demand driven by strong rural cash

flows, and (2) its multi-product strategy which has

protected it from cyclical shocks. We expect AUM

CAGR of ~25% over FY12-14.

MMFS delivered stellar asset quality performance

in FY12, with GNPAs at levels lowest in a decade. As

on March 2012, GNPAs stood at 3.0% and NNPAs at

0.7%. Provision cover remained healthy at 78%.

Although poor monsoon remains a key risk to MMFS'

asset quality, diversified product mix and customer

profile should help partially mitigate the same.

Given its lower dependence on asset securitization

for resource mobilization (less than 15% as on June

2012), MMFS remains relatively insulated from the

current regulatory changes pertaining to

securitization and priority sector lending.

Key challenges Below-normal monsoon could adversely impact

growth and asset quality going forward.

Proposed regulatory changes for NBFCs relating to

asset classification and provisioning norms to be

brought at par with banks could lead to lower return

ratios.

Key news flows / triggers to watch Trajectory of monsoon will be watched closely given

its correlation with MMFS' growth and asset quality.

RBI's final guidelines for NBFCs based on the

recommendations by Usha Thorat Committee will

determine the impact of regulatory changes on

MMFS' return ratios going forward.

1QFY13 highlights; guidance for FY13, FY14 MMFS' 1QFY13 performance was better than

expected led by (1) strong AUM growth (+5% QoQ;

38% YoY), (2) better than expected margin

performance, and (3) tight control over opex.

Asset quality remained healthy and improved on a

YoY basis. In percentage terms, GNPAs declined to

3.8% from 4.6% in 1QFY12.

For FY13, management has maintained its 25-30%

disbursements growth target.

If the 90-day asset classification norms are made

applicable to AFCs, then GNPAs may increase by

INR2.5-3b.



Net Oper. Income 3,443 4,061 4,264 5,166 4,916 16,743 22,688

YoY Gr. (%) 27.6 24.1 22.3 32.4 42.8 27.1 35.5


YoY Gr. (%) 25.5 22.3 22.8 45.0 56.6 29.0 40.0

Provisions 561 523 494 142 854 1,570 2,982

PBT 1,513 2,016 2,303 3,421 2,395 9,254 12,167

Tax 491 661 756 1,144 784 3,051 4,015

Profit after Tax 1,022 1,355 1,547 2,277 1,610 6,202 8,152

YoY Gr. (%) 37.7 16.3 33.5 45.4 57.6 33.9 31.4


AUM Growth (%) 38.9 40.7 40.1 36.2 37.9 36.2 25.6

Gross Spread (%) 10.0 10.2 10.2 10.7 9.5 10.7 NA

GNPA (%) 4.6 4.0 4.1 3.0 3.8 3.0 3.2

E: MOSL Estimates

109August 27 - 31, 2012


Mahindra Finance: Financials and valuation


Y/E March 2011 2012 2013E 2014E

Interest Income 18,545 26,500 34,141 40,534



Change (%) 32.2 28.1 28.3 17.4

Income from Securitisation 906 925 2,697 4,005

Other Income 324 521 372 422

Net Income 13,173 16,743 22,688 27,460

Change (%) 23.4 27.1 35.5 21.0



Change (%) 13.1 29.0 40.0 21.2

Provisions and W/Offs 1,365 1,570 2,982 3,994

PBT 7,024 9,253 12,166 14,366

Tax 2,393 3,051 4,015 4,741

Tax Rate (%) 34.1 33.0 33.0 33.0

PAT 4,631 6,201 8,151 9,625

Change (%) 34.5 33.9 31.4 18.1

Proposed Dividend (InclTax) 1,213 1,682 2,146 2,534


Y/E March 2011 2012 2013E 2014E



Net Worth 24,901 29,523 35,528 42,620

Borrowings 96,750 139,611 174,394 214,515

Change (%) 49.8 44.3 24.9 23.0


Investments 6,746 5,025 5,527 6,080

Change (%) 212.4 -25.5 10.0 10.0


Change (%) 42.0 41.4 21.1 23.0



Total Assets 121,651 169,121 209,922 257,134

E: MOSL Estimates

Ratios

Y/E March 2011 2012 2013E 2014E


Yield on Portfolio 17.7 17.7 17.8 17.3

Cost of Borrowings 8.2 9.5 9.3 9.0


Net Int. Margin (on AUMs) 10.8 9.7 10.0 9.8


RoE 22.0 22.8 25.1 24.6

RoA (on balance sheet) 4.6 4.3 4.3 4.1

RoA on AUM 3.7 3.5 3.6 3.5

Average Leverage (x) 4.8 5.3 5.8 6.0

Average leverage on AUM (x) 5.9 6.4 6.9 7.1




Empl. Cost/Op. Exps. 31.7 33.7 34.4 34.8

Secur. Inc./Net Income 6.9 5.5 11.9 14.6


Loans/Borrowings Ratio 126.8 124.2 120.5 120.5

Net NPAs to Adv. 0.6 0.7 0.7 0.7

Valuation

Book Value (INR) 242.8 287.4 345.9 414.9

BV Growth (%) 34.9 18.3 20.4 20.0

Price-BV (x) 2.7 2.3 1.9

Adjusted BV (INR) 238.1 279.7 336.0 402.9

Price-ABV (x) 2.8 2.3 1.9

OPS (INR) 81.9 105.4 147.5 178.8

OPS Growth (%) 5.9 28.7 40.0 21.2

Price-OP (x) 7.4 5.3 4.4

EPS (INR) 45.2 60.4 79.4 93.7

EPS Growth (%) 26.0 33.6 31.4 18.1


Dividend 10.0 14.0 17.9 21.1


E: MOSL Estimates

August 27 - 31, 2012 110


Mahindra & Mahindra



Promoter 25.5 25.3 24.9

Dom. Inst. 19.9 20.7 22.6

Foreign 37.1 35.9 33.8

Others 17.5 18.2 18.8

Stock info

Bloomberg MM IN


CMP (INR) 767

Mcap (USD b) 8.4

52-Wk Range (INR) 875 / 622

1, 6, 12 Rel Perf (%) 5 / 6 / 1

Company descriptionM&M is India's market leader in UV (52% share) and

tractors (41% share). It also has presence in 2-wheeler,

3-wheeler and CV segments. In 2011, it acquired 70%

stake in Ssangyong (South Korea) to expand its presence

in global SUV markets.

Apart from core auto business, it has subsidiaries/

associates in various businesses like IT, NBFC, Auto

ancillaries, hospitality, infrastructure etc.

Key investment positives Competitive dynamics in both UVs and tractors

remain favorable, led by limited competition and

consolidated nature of the industry.

It plans to launch 6-7 new products in auto segment,

including a mini-SUV, sub 4m Verito, Rexton

(Ssangyong), new MPV and new electric vehicle-

NXR in FY13. In Farm Equipment, it will be launching

one new tractor along with 3-4 refreshes. This

coupled with the full benefit of 12 launches in FY12,

would also help support volumes.

Expect margins to improve 20bp in FY13 (incl MVML)

on account of better product mix within auto

segment led by ramp up of XUV5OO and operating

leverage due to ramp-up at Chakan plant.

M&M's investments in its subsidiary and associate

companies add substantially to its valuations. Value

unlocking in these companies would act as catalyst

for M&M's stock.

Key challenges Any additional duty on diesel vehicles would

adversely impact M&M as its entire UV portfolio is

diesel based.

Maintaining market share in increasingly

competitive UVs segment, with new entrants like

Maruti, Renault, Ford etc.

Successful integration and turnaround of Ssangyong.

Key news flows / triggers to watch Tractor volume momentum due to weak monsoon.

Additional duty on diesel vehicles.

Response to new launches in UV segment by

competition.

1QFY13 highlights; guidance for FY13, FY14 1QFY13 realization was up 7.4% QoQ (22% YoY) at

INR507,173/unit) driven by a) mix improvement

(led by XUV5OO), b) price increase and c) weak INR.

Incl MVML, EBITDA margin declined 30bp YoY to

13.9% (+180bp QoQ); Auto segment PBIT margin

improved 50bp QoQ (-70bp YoY) to 11.2%, whereas

tractor business PBIT margin was stable QoQ at

15.7% (down 30bp YoY). PAT grew 26% YoY to INR7.8b

(-3% QoQ).

M&M lowered tractor industry's FY13 growth

guidance to ~2% (v/s 5-6% earlier). However, it

maintained guidance for UV volumes at 12-14%,

driven by XUV5OO, Bolero and new launches.



Net Op. Income 67,537 72,931 82,156 91,188 88,785 313,811 379,655

Change (%) 33.9 33.0 31.5 33.2 21.0

EBITDA 9,658 10,022 10,903 11,029 12,350 41,613 51,064

EBITDA Margins (%)14.3 13.7 13.3 12.1 13.9 13.3 13.5

Change (%) 12.5 14.9 27.9 14.9 22.7

Adj PAT 6,183 7,917 6,770 8,030 7,785 28,888 33,089

Change (%) 11.3 19.4 25.9 12.4 14.5


Volumes (nos) 159,197 170,701 183,228 195,478 182,149 704,935 780,899

Change (%) 25.1 29.2 23.3 21.8 14.4 24.2 10.8

Realiz. (INR/car) 424,238 427,241 448,379 466,486 487,431 445,163 486,177

Change (%) 8.6 9.2 14.9 7.3 9.2

Auto - PBIT Mar. (%) 11.9 11.2 10.1 10.7 11.2 10.9

FES - PBIT Mar. (%) 16.0 15.3 15.6 15.7 15.7 15.7

E: MOSL Estimates

111August 27 - 31, 2012


Mahindra & Mahindra: Financials and valuation


Y/E March 2011 2012 2013E 2014E

Total Income 234,603 318,535 396,738 446,643

Change (%) 26.2 35.8 24.6 12.6

EBITDA 34,543 37,707 45,693 49,223

Margins (%) 14.7 11.8 11.5 11

Margins (%, incl MVML) 15.3 13.3 13.5 13.5

Depreciation 4,139 5,761 7,259 8,774

Int. & Finance Charges 725 1,628 2,063 2,063

Other Income 4,342 4,658 5,280 5,902


Eff. Tax Rate (%) 24.4 20.2 25.5 27

Adj. Profit after Tax 25,732 27,924 31,030 32,331

Change (%) 27.3 8.5 11.1 4.2

Adj. PAT (incl MVML) 25,732 28,888 33,089 36,608


Y/E March 2011 2012 2013E 2014E

Share Capital 2,936 2,945 2,945 2,945

Net Worth 103,134 121,585 144,494 167,400

Deferred tax 3,544 5,271 5,271 5,271

Loans 23,211 31,738 31,738 31,738


Net Fixed Assets 29,207 40,808 48,549 54,775

Capital WIP 9,859 10,000 10,000 10,000

Investments 89,256 103,105 105,950 110,950

Curr.Assets, L & Adv. 67,076 85,082 123,381 146,682

Inventory 16,942 23,584 29,348 33,039

Sundry Debtors 12,603 19,884 26,087 29,368

Cash & Bank Bal. 6,146 11,884 27,510 39,464

Loans & Advances 27,061 24,077 34,782 39,158






Y/E March 2011 2012 2013E 2014E

Volumes ('000 units) 568 705 781 859

Growth (%) 24.3 24.2 10.8 10

Auto (% of total) 62 67 70 71

FES (% of total) 38 33 30 29

Realizations (INR/car) 413,232 451,865 508,052 520,109

Growth (%) 1.5 9.3 12.4 2.4

RM Cost (% of sales) 69.3 73.8 74.8 75.3

FCF (CFO-Capex) 20,098 21,941 28,655 28,441

Net Debt 7,479 2,700 -15,772 -32,725

Subs contb. to Cons PAT(%) 10.5 5.8 11.9 25.6

Ratios

Y/E March 2011 2012 2013E 2014E

Basic (INR)

Fully diluted EPS 43 46.7 51.8 54

FD EPS (incl MVML) 43 48.3 55.3 61.2

Consolidated EPS 48 51.2 62.7 82.2

Cash EPS 50.9 57.2 65 69.8


DPS 11.5 12.5 14 16


Valuation (x)

P/E 17.4 15.5 13.5 12.2

Consolidated P/E 15.6 14.6 11.9 9.1

Cash P/E 14.7 13.1 11.5 10.7

EV/EBITDA 12.7 11.7 9.6 8.9

EV/Sales 1.9 1.4 1.1 1

Price to Book Value 4.3 3.6 3 2.6

Dividend Yield (%) 1.5 1.7 1.9 2.1


RoE 25 23 21.5 19.3

RoCE 26.8 23.1 24.1 22.7

Turnover Ratios




Asset Turnover (x) 1.8 2 2.2 2.2

Leverage Ratio

Debt/Equity (x) 0.2 0.3 0.2 0.2


Y/E March 2011 2012 2013E 2014E


Int./Dividends Received 2,370 4,658 5,280 5,902



(Inc)/Dec in Wkg. Capital 2,074 2,622 3,304 273

CF from Oper.Activity 32,168 39,444 43,655 43,441

(Inc)/Dec in FA+CWIP -12,070 -17,503 -15,000 -15,000

(Pur)/Sale of Invest. -27,627 -13,848 -2,846 -5,000


Change in Net Worth 87 -1,723 1,528 1,602

Inc/(Dec) in Debt 3,311 8,527 0 0

Interest Paid -1,016 -1,628 -2,063 -2,063

Dividends Paid -6,223 -7,363 -8,247 -9,425


Inc/(Dec) in Cash -11,371 5,907 17,028 13,555


Closing Balance 6,061 12,054 28,912 41,066

August 27 - 31, 2012 112


Marico



Promoter 59.8 62.7 62.9

Dom. Inst. 3.6 4.5 4.2

Foreign 29.4 25.9 26.4

Others 7.2 6.9 6.5

Stock info

MRCO IN


CMP (INR) 192

Mcap (USD b) 2.2

52-Wk Range (INR) 200 / 134

1, 6, 12 Rel Perf (%) 1 / 23 / 16




Change (%) 31.8 25.6 29.4 22.9 21.7 27.9 18.0

EBITDA 1,251 1,167 1,217 1,100 1,848 4,741 6,386

Change (%) 18.6 17.7 22.1 38.8 47.7 15.9 34.7

EBITDA Margin (%) 12.0 12.0 11.5 12.0 14.6 11.9 13.5

Reported PAT 850 783 841 697 1,238 3,189 4,361

Adjusted PAT 850 783 841 714 1,238 3,189 4,361

Change (%) 15.3 9.4 21.0 -0.6 45.7 34.2 36.8

PAT Margin (%) 8.2 8.0 8.0 7.8 9.8 8.0 9.2


Parachute Rigid 10.0 10.0 13.0 11.0 18.0

Saffola 15.0 11.0 15.0 3.3 12.0

Hair Oils 32.0 26.0 20.0 17.5 25.0

E: MOSL Estimates

Company descriptionMarico is market leader in branded Coconut Oil (~52%

market share) and has 23% share in other Hair Oils and

niche position in Edible Oils. The company's Beauty and

Wellness focus is emphasized through Kaya skin clinics

and products.

Marico derives ~25% of its revenues from overseas

operations with strong position in Bangladesh, and

presence in Middle East, South Africa, Egypt and South

Asia.

Marico recently acquired Paras in India and entered

personal products space.

Key investment positives Domestic business is on a strong footing with the

company posting a 16% domestic volume growth in

1QFY13 led by strong growth in the Hair Oil and

Edible Oil portfolio despite sharp price increases.

The management expects sustainable volume

growth of 9-10% growth in its largest brand,

Parachute.

Improvement in same clinic growth in Kaya, if

sustained, will enable faster break even.

The growth momentum in Marico's key brands is

impressive; we like its aggressive strategy to grow

the value-added Hair Oils across geographies.

Key challenges Inflation in copra has always impacted margins and

profitability.

Improving growth trends in international markets

of Middle East and Egypt and managing margin

pressures in Bangladesh are key challenges.

Key news flows / triggers to watch Trend in domestic volume growth and ability to

maintain and/or increase market share in value-

added Hair Oils.

Movement in copra prices (~40% of RM).

Revenue growth and profitability of international

business and recently acquired Paras.

Performance of new domestic launches (SaffolaOats, Saffola Arise, Parachute extensions)

1QFY13 highlights; guidance for FY13, FY14 Domestic volumes grew 16% – Parachute rigids up

18%, hair oils 25% and Saffola 12%.

Gross margin expanded 660bp to 49.4% due to lower

copra prices; however, 300bp increase in ad spends

curtailed EBITDA margin expansion to 260bp.

Kaya reported 12% SSS growth; 1QFY13 losses at

INR73m; product share increased to 25%.

Management guided sustainable volume growth of

9-10% in coconut oils, 15-17% in Hair Oil and 15% in

Saffola.

113August 27 - 31, 2012


Marico: Financials and valuation


Y/E March 2011 2012 2013E 2014E

Net Sales 31,283 39,968 47,179 54,963

Change (%) 17.6 27.8 18.0 16.5

Gross Profit 15,104 18,981 22,709 26,688

Margin (%) 48.3 47.5 48.1 48.6


EBITDA 4,098 4,741 6,386 7,772

Margin (%) 13.1 11.9 13.5 14.1



Other Income - Recurring 279 429 537 594


Margin (%) 10.5 10.1 11.9 12.7

Current Tax (excl MAT Ent) 850 782 1,121 1,397

Tax Rate (%) 25.9 19.5 21.0 21.0

Minority Interest -50 -50 -66 -76


Change (%) 20.9 9.3 36.8 24.8

Adjusted PAT 2,864 3,189 4,361 5,442


Y/E March 2011 2012 2013E 2014E


Reserves 8,540 10,790 19,528 24,368

Net Worth 9,155 11,404 20,172 25,011

Loans 7,718 7,657 6,000 5,500



Intangibles 1,438 1,342 8,647 8,552

Less: Accum. Depn. -3,366 -4,085 -4,944 -5,919

Net Fixed Assets 4,250 5,019 12,181 12,410

Capital WIP 648 1,234 1,500 1,500

Goodwil l 3,976 3,955 3,976 3,976

Investments 890 2,956 1,970 5,006

Curr. Assets, L&A 12,203 12,699 13,973 16,258

Inventory 6,011 7,202 8,256 9,069



Others 2,181 1,995 2,127 2,261



Deferred Tax Liability 301 223 210 183



Growth (%)

Coconut Oil 7.0 8.8 7.0 7.0

Saffola 16.0 15.0 15.0 15.0

Hair Oil 23.0 24.0 16.0 16.0

E: MOSL Estimates

Ratios

Y/E March 2011 2012 2013E 2014E

Basic (INR)

EPS 4.7 5.2 6.8 8.5

Cash EPS 5.8 6.1 8.1 10.0

BV/Share 14.9 18.6 31.3 38.8

DPS 0.7 0.7 0.8 0.8

Payout % 13.9 13.5 11.1 9.5

Valuation (x)

P/E 36.4 27.9 22.4

Cash P/E 30.8 23.3 19.0

EV/Sales 3.0 2.6 2.2

EV/EBITDA 25.1 19.5 15.4

P/BV 12.7 10.2 6.0 4.9

Dividend Yield (%) 0.3 0.4 0.4 0.4

Return Ratios (%)

RoE 31.9 28.0 21.6 21.8

RoCE 29.7 30.5 29.7 30.6




Leverage Ratio

Debt/Equity (x) 0.8 0.7 0.3 0.2


Y/E March 2011 2012 2013E 2014E


Int./Div. Received 279 429 537 594

Interest Paid -393 -424 -461 -406


(Incr)/Decr in WC -1,178 659 -678 -122


(Incr)/Decr in FA -1,842 -1,491 -8,871 -1,205

(Pur)/Sale of Investments -63 -2,067 987 -3,036

CF from Invest. -1,905 -3,558 -7,884 -4,241

(Incr)/Decr in Debt 3,260 -61 -1,657 -500

Dividend Paid -472 -503 -565 -603

Others -1,822 -946 5,176 -119

CF from Fin. Activity 966 -1,510 2,954 -1,222

Incr/Decr of Cash 1,016 -445 -266 979


Closing Balance 2,131 1,686 1,420 2,399

August 27 - 31, 2012 114


Maruti Suzuki



Promoter 54.2 54.2 54.2

Dom. Inst. 16.4 15.8 18.0

Foreign 20.4 21.5 18.8

Others 9.0 8.5 9.0

Stock info

Bloomberg MSIL IN


CMP (INR) 1,177

Mcap (USD b) 6.1

52-Wk Range (INR) 1428 / 906

1, 6, 12 Rel Perf (%) -5 / -8 / -6



Net Op. Revenues 84,541 78,316 77,316 117,270 107,782 355,871 436,687

Change (%) 1.7 -14.4 -18.6 17.2 27.5 -2.8 22.7

EBITDA 8,104 4,942 4,034 8,585 7,863 25,129 31,944

EBITDA Margins (%) 9.6 6.3 5.2 7.3 7.3 7.1 7.3

Change (%) -5.5 -48.5 -55.3 -15.3 -3.0 -30.9 27.1

Adjusted PAT 5,492 2,404 2,056 6,398 4,238 16,351 19,906

Change (%) 7.2 -59.8 -63.6 1.4 -22.8 -29.2 21.7


Total Vols ('000 nos) 281 252 239 360 296 1,134 1,217

Change (%) -0.6 -19.6 -27.6 4.9 5.1 -10.8 7.4

Realiz. (INR/car) 293,279 298,741 314,247 318,770 355,839 306,131 350,367

Change (%) 3.2 4.8 12.0 11.7 21.3 7.7 14.5

RM Cost (% of Sales) 78.0 78.6 79.1 79.6 77.8 78.9 78.4

E: MOSL Estimates

Company descriptionMaruti Suzuki (MSIL) is the largest 4-wheeler passenger

vehicle manufacturer in India, with 1.2m units. It

dominates the small cars segment with ~48% market

share. It is also emerging as the global export hub of

small cars for Suzuki, with world strategic model A-Star

exclusively produced in India. It has recently launched

Ertiga to gain foothold in the fast-growing UV segment.

It has two plants are in Haryana – Gurgaon and Manesar.

Key investment positives Some of the key headwinds which impacted FY12

performance are peaking out. While reduction in

interest rates and stable fuel prices augur well for

demand, stable competition and soft commodity

prices would ease pressure on profitability.

EBITDA margins have bottomed out in 2HCY11

impacted by adverse mix, forex and negative

operating leverage. Expect EBITDA margin to

improve 20bp from 7.1% in FY12 to 7.3% in FY13 and

8.8% (ex SPIL) in FY14, driven by price hikes, better

mix, operating leverage & higher localization.

Maruti merged with Suzuki Powertrain India.

Although we expect the merger to be EPS neutral,

given aggressive depreciation policy of SPIL, it

would be cash EPS accretive by ~13%.

With long term demand drivers and MSIL's

competitive advantage intact, coupled with peak

competitive intensity behind us, we expect MSIL's

market share to remain stable at ~36% of PV industry

over next 2-3 years.

Key challenges Being net importer, Maruti's earnings are highly

sensitive to JPY/INR movement. For every 5%

change in JPY/INR, Maruti's EBITDA margin changes

by ~100bp and EPS by ~13%.

Maintaining cordial industrial relations, considering

multiple disruptions at Manesar plant since Jun-11,

including recent episode of violence.

Key news flows / triggers to watch Resumption of operation at Manesar plant, where

operations are disrupted since 18-Jul-2012 due to

violence at the plant.

Reduction in interest rates to boost car demand.

Demand pick-up for petrol-driven small cars.

Increasing localization and exports to reduce forex

exposure over FY13-15.

1QFY13 highlights; guidance for FY13, FY14 1QFY13 realization improved ~12% QoQ (~21% YoY)

to INR355,839/unit, led by better mix, higher export

realizations and Ertiga CKD exports.

EBITDA margin was flat QoQ (-230bp YoY) at 7.3%,

as benefit of higher realizations (140bp) was offset

by adverse Fx impact on RM (60bp) and royalty

(100bp), and negative operating leverage.

It has not entered into any further hedges and now

has ~30% of USD/JPY exposure hedged for rest of

FY13, and 36% natural hedge on USD/INR.

Lower other income diluted benefit of lower tax

(higher R&D), leading to in-line PAT at INR4.24b.

115August 27 - 31, 2012


Maruti Suzuki: Financials and valuation


Y/E March 2011 2012 2013E* 2014E*

Total Op. Income 369,199 355,871 436,687 515,512

Change (%) 24.6 -3.6 22.7 18.1

Total Cost 333,363 330,742 398,149 462,561

EBITDA 35,837 25,129 38,539 52,950

EBITDA (%) 9.7 7.1 8.8 10.3

Depreciation 10,135 11,384 17,925 21,032

Interest 244 552 1,186 1,254

Other Income 5,665 8,269 8,224 8,550

PBT 31,088 21,462 27,652 39,215

Effective tax Rate (%) 26.4 23.8 20 22

Adj. PAT 23,101 16,351 22,121 30,587

Change (%) -7.8 -29.2 35.3 38.3


Y/E March 2011 2012 2013E * 2014E *

Share Capital 1,445 1,445 1,510 1,510

Net Worth 138,675 151,873 191,860 218,559

Loans 3,093 11,749 17,910 17,910



Net Fixed Assets 55,294 61,321 99,730 108,698

Capital WIP 14,286 20,000 15,000 15,000

Investments 51,067 61,473 61,473 61,473

Curr.Assets, Loans 63,563 80,227 99,338 125,662

Inventory 14,150 17,965 19,142 22,598

Sundry Debtors 8,933 9,377 13,160 15,536

Cash/ Bank Bal. 25,085 24,362 38,511 59,004




Appl. of Funds 143,412 166,646 212,793 239,492


Y/E March 2011 2012 2013E 2014E

Volumes (‘000 units) 1271 1133.7 1217 1412.1

Growth (%) 24.8 -10.8 7.4 16

Realizations (INR/car) 290,478 313,904 358,810 365,066

Growth (%) -0.1 8.1 14.3 1.7

RM Cost (% of sales) 78.1 78.9 76.9 76.2

JPY/INR 0.54 0.61 0.68 0.65

FCF (CFO-Capex) 9,984 4,732 -8,691 25,636

Net Debt -69,098 -68,503 -80,441 -100,934

‘* including SPIL (Suzuki Powertrain India Ltd)

Ratios

Y/E March 2011 2012 2013E* 2014E*

Basic (INR)

Adjusted EPS 79.9 56.6 73.2 101.3

EPS Growth (%) -7.8 -29.2 29.4 38.3

Consol EPS 82.4 58.2 74.2 102.6

Cash EPS 115 96 132.6 170.9


DPS 7.5 7.5 10 11

Div. payout (%) 11 13.3 13.7 10.9

Valuation (x)

Consol. P/E 14.4 20.3 15.9 11.5

Cash P/E 10.3 12.3 8.9 6.9

EV/EBITDA 7.5 10.7 7.1 4.8

EV/Sales 0.7 0.8 0.6 0.5


Dividend Yield (%) 0.6 0.6 0.8 0.9


RoE 16.5 10.8 11.5 14

RoCE 22.1 13.2 13.6 16.9

Leverage Ratio

Debt/Equity (x) 0.0 0.1 0.1 0.1


Y/E March 2011 2012 2013E* 2014E*


Int./Div. Received 3,595 8,269 8,224 8,550

Depreciation 10,135 11,384 17,925 21,032


(Inc)/Dec in WC 4,171 -1,810 1,411 2,762

CF from Oper.Activity 34,098 27,857 42,643 55,636

(Inc)/Dec in FA -24,114 -23,125 -51,334 -30,000

(Pur)/Sale of Invest. 21,253 -10,406 0 0


Change in Networth 0 -986 20,886 -565

Inc/(Dec) in Debt -5,123 8,656 6,161 0

Interest Paid -278 -552 -1,186 -1,254

Dividends Paid -1,733 -2,167 -3,021 -3,323

CF from Fin. Activity -7,134 4,951 22,840 -5,142

Inc/(Dec) in Cash 24,103 -723 14,149 20,494

Add: Op. Balance 982 25,085 24,362 38,511

Closing Balance 25,085 24,362 38,511 59,004

August 27 - 31, 2012 116


McLeod Russel



Promoter 45.7 45.7 45.7

Dome. Inst. 5.4 5.9 7.1

Foreign 33.4 32.9 32.0

Others 15.4 15.6 15.2

Stock info

Bloomberg MCLR IN


CMP (INR) 323

Mcap (USD b) 0.6

52-Wk Range (INR) 345 / 166

1, 6, 12 Rel Perf (%) -2 / 56 / 37




Change (%) 18.6 12.3 6.7 13.6 -1.2 11.3

EBITDA 537 2,371 1,383 -1,030 355 3,261

Change (%) 76.8 11.5 -6.7 82.0 -34.0 -2.5

EBITDA Margin (%) 37.0 58.4 35.4 -40.8 24.7 27.3

Reported PAT 373 2,232 1,171 -1,574 193 2,203

Adjusted PAT 373 2,232 1,171 -1,477 193 2,299

Change (%) 98.0 12.3 -13.5 20.2 -48.3 0.0

PAT Margin (%) 25.7 55.0 29.9 -58.5 13.5 19.2

Company descriptionMcleod Russel is the world's largest tea producer and

plantation company. It produces approximately 100m

kg of high quality tea a year from its tea estates in Assam,

West Bengal, Vietnam, Uganda and Rwanda.

As India's largest tea exporter, it maintains strong

connections with buyers in Europe, the Middle East and

North America. Modern blending facility provides its

clients with both unique as well as bespoke bulk

blended teas.

Key investment positives Increasing consumption of tea, particularly in

developing countries with increasing per capita

income, along with constrained supply of land to

grow tea, should result in a secular upward trend in

tea prices.

Due to adverse weather conditions, even near-term

tea prices are expected to remain high, thus

increasing McLeod's profitability.

Key challenges Government denying acquisitions of tea gardens in

India, is a growth challenge for the company.

Managing labor costs is a key operational challenge.

Key news flows / triggers to watch Production during the peak season Q2 and Q3.

Crop loss in North India coupled with growth in

consumption resulting in higher tea prices.

Rationalization of labor costs can increase

profitability.

1QFY13 highlights; guidance for FY13, FY14 Tea realizations for the company improved by INR

33/kg (22%) to INR181/kg in 1QFY13 due to India

losing 2.7m kg of tea production in May and June.

McLeod Russel itself lost production loss of 2.7m kg

in 1QFY13.

Sales volume for the company declined from 9.7m

kg in 1QFY12 to 7.9m kg in Q1FY13.

117August 27 - 31, 2012


McLeod Russel: Financials and valuation


Y/E March 2009 2010 2011 2012

Net Sales 8,265 11,062 12,692 14,453

Other Income 345 349 323 411

Stock Adjustments 45 -19 103 73

Total Income 8,655 11,392 13,118 14,937


Operating Profit 2,170 3,670 3,927 4,218

Interest 831 296 417 567

Gross Profit 1,339 3,374 3,510 3,650


Profit Before Tax 1,012 3,051 3,128 3,281

Tax 104 664 608 329

Fringe Benefit Tax 22 - - -

Net Profit 856 2,337 2,492 2,943

Minority Interest (after tax) - -5 -0 30

P/L of Associate Company -22 -33 -28 -33

PAT after MI & P/L Asso.Co. 835 2,309 2,465 2,879

Extraordinary Items -8 -10 14 -54

Adjusted PAT 843 2,319 2,450 2,934


Y/E March 2009 2010 2011 2012


Reserves Total 11,424 13,154 14,618 16,919



Secured Loans 3,873 3,880 1,406 940

Unsecured Loans 300 140 0 0

Total Debt 4,173 4,021 1,406 940


Gross Block 20,578 22,710 22,850 24,520

Less: Accumulated Dep 4,156 5,075 4,983 5,519

Less: Impairment of Assets 0 0 402 402

Net Block 16,422 17,635 17,465 18,600



Inventories 694 800 968 1,248


Cash and Bank 388 526 310 334




Provisions 1,490 1,892 1,064 1,209

Total Current Liabilities 2,867 3,327 4,282 4,601

Net Current Assets -119 287 -1,550 -1,026



Net Deferred Tax -525 -716 -723 -769

Other Assets 0 0 1,555 1,894

Total Assets 16,144 17,722 17,286 19,242

Ratios

Y/E March 2009 2010 2011 2012

EPS (INR) 7.3 20.4 21.7 25.3

Book Value (INR) 57.0 73.2 87.0 108.4

Key Ratios

Debt-Equity Ratio 0.7 0.6 0.3 0.1

Long Term Debt-Equity Ratio 0.4 0.4 0.3 0.1


Turnover Ratios

Fixed Assets 0.6 0.7 0.7 0.8

Inventory 14.6 14.8 14.4 13.1

Debtors 30.8 41.8 53.3 57.8


PBIDTM (%) 26.2 33.2 30.9 29.2

PBITM (%) 22.2 30.3 27.9 26.6

PBDTM (%) 16.2 30.5 27.7 25.3

CPM (%) 14.3 24.1 22.6 22.9

APATM (%) 10.3 21.1 19.6 20.4

ROCE (%) 17.8 29.8 29.9 30.4

RONW (%) 14.4 32.8 28.4 27.4

Payout (%) 26.7 19.3 22.8 23.5


Y/E March 2009 2010 2011 2012

Cash and Cash Equivalentsat Beginning of the year 197 388 348 223

Net Cash from OperatingActivities 2,027 2,867 2,273 2,636

Net Cash Used inInvesting Activities -653 -2,370 -564 -968

Net Cash Used in FinancingActivities -1,184 -359 -1,834 -1,557

Net Inc/(Dec) in Cash andCash Equivalent 191 138 -125 111

Cash and Cash Equivalentsat End of the year 388 526 223 334

August 27 - 31, 2012 118


MCX



Promoter 26.0 26.0 -

Dom. Inst. 23.5 22.4 -

Foreign 31.6 33.3 -

Others 18.9 18.3 -

Stock info

Bloomberg MCX IN


CMP (INR) 1,153

Mcap (USD b) 1.1

52-Wk Range (INR) 1,426 / 838

1, 6, 12 Rel Perf (%) -/-/-

Company descriptionMulti Commodity Exchange of India Ltd (MCX) is a state-

of-the-art electronic commodity futures exchange with

permanent recognition from the Government of India

to facilitate online trading, and clearing and settlement

operations for commodity futures.

Having started operations in November 2003, today,

MCX holds a market share of over 86% (as on March 31,

2012) of Indian commodity futures market. It has more

than 2,170 registered members operating through over

346,000 spread over 1,577 cities and towns. MCX was

the 3rd largest commodity exchange in the world, in

terms of the number of contracts traded in CY2011,

largest in Silver and Gold, second largest in natural gas.

MCX offers 49 commodities across various segments

such as bullion, ferrous and non-ferrous metals, energy,

and a number of agri-commodities on its platform.

Key investment positives Commodities exchange in India is a nascent

industry, less than a decade old; total value of

commodity futures traded has grown at 51% CAGR

over FY09-12.

MCX has a near monopolistic market share and

competitive edge lent by strong technological

backbone, which is supplied by parent FTIL, is hard

to emulate.

Passage of FCRA bill will facilitate a surge in

volumes.

Potential value unlocking from MCX-SX.

Key challenges Low volatility in commodity prices hurt the volumes

on the exchange, which has been the case in the last

couple of quarters. Given high operating leverage,

it impacts bottom-line harder.

Upward revision in share of transaction fees charged

by FTIL for technical services will be negative for

margins.

Key news flows / triggers to watch FCRA Bill was postponed to yet another parliament

session in the future, after increased hopes of the

bill being tabled for discussion in the monsoon

session.

MCX-SX was cleared to become a full-fledged stock

exchange.

1QFY13 highlights; guidance for FY13, FY14 MCX reported 1QFY13 revenue at INR1.23b, +5.2%

YoY. EBIT was INR689m, +5.3% YoY. EBIT margin was

56%, +10bp YoY and +170bp QoQ. PAT was INR647m,

+4.4% YoY.

In 1QFY13, total transacted volume on the exchange

was INR36.4t, up 8.4% YoY and 0.6% QoQ. In FY12,

the volumes had jumped in 2Q, increasing by 42%

QoQ, before cooling off in subsequent quarters.

However, at least in the month of July, volumes have

been softer, implying possible YoY decline in traded

volume, and hence, transaction revenue in 2QFY13.



Net Sales 1,169 1,558 1,296 1,239 1,230 3,689 5,262

Changes - QoQ (%) 10.4 33.3 (16.9) (4.4) (0.7) 28.4 42.6

EBITDA 718 1,068 820 740 756 1,918 3,346

Changes (%) 21.0 48.7 (23.2) (9.7) 2.1 35.5 74.4

EBIDTA Margin (%) 61.4 68.5 63.3 59.7 61.5 52.0 63.6

Reported PAT 620 894 688 660 647 1,728 2,862

Adjusted PAT 620 894 688 770 647 1,728 2,862

Changes QoQ (%) 12.9 44.2 (23.1) 11.9 (15.9) (20.3) 65.6

PAT Margin (%) 53.1 57.4 53.1 62.2 52.6 46.8 54.4


Volumes (INR b) 33,583 47,808 38,415 36,164 36,395 98,415 155,971

Chg. in Vol. QoQ (%) 13.8 42.4 -19.6 -5.9 0.6 53.9 58.5

E: MOSL Estimates

119August 27 - 31, 2012


MCX: Financials and valuation

Income Statement (Standalone) (INR Million)

Y/E March 2008 2009 2010 2011

Net Sales 1,737 2,125 2,874 3,689

Other Income 1,005 1,534 2,062 784

Total Income 2,742 3,659 4,936 4,473

Power & Fuel Cost 14 33 34 25

Employee Cost 253 231 203 254

Other Manufact. Expenses 47 144 129 132

Selling & Admin. Expenses 868 822 970 1,248

Miscellaneous Expenses 73 125 123 113


Operating Profit 1,488 2,304 3,477 2,701

Interest 0 2 0 0

Gross Profit 1,488 2,302 3,477 2,701


Profit Before Tax 1,368 2,102 3,230 2,455

Tax 315 453 1,004 706

Fringe Benefit tax 11 6 - -

Deferred Tax (11) 63 19 21

Reported Net Profit 1,053 1,580 2,206 1,728

Extraordinary Items 422 688 1,006 30

Adjusted Net Profit 631 893 1,201 1,698


Y/E March 2008 2009 2010 2011


Reserves Total 3,191 4,534 6,562 7,975



Gross Block 1,292 2,595 2,679 2,917

Less : Accumulated Dep. 325 509 754 964

Net Block 967 2,086 1,925 1,953


Investments 5,249 4,698 6,172 8,236


Cash and Bank 1,047 4,058 2,700 3,310

Loans and Advances 588 550 1,186 1,010





Net Current Assets (3,114) (1,758) (1,024) (1,577)

Deferred Tax Assets - 36 51 36


Net Deferred Tax (20) (87) (106) (127)

Total Assets 3,587 4,942 6,970 8,485

Ratios

Y/E March 2008 2009 2010 2011

EPS (INR) 12.9 18.9 26.6 33.1

Book Value (INR) 45.7 60.6 85.4 166.4

Key Ratios


Turnover Ratios

Fixed Assets 1.5 1.1 1.1 1.3

Debtors 11.1 10.2 10.0 9.3

Interest Cover Ratio 4,099 663 4,395 12,274

PBIDTM (%) 54.1 65.6 69.8 73.2

PBITM (%) 47.2 56.2 61.2 66.5

PBDTM (%) 54.1 65.5 69.8 73.2

CPM (%) 43.2 51.3 50.4 53.5

APATM (%) 36.3 41.9 41.8 46.9

RoCE (%) 25.2 28.0 29.5 31.8

RoNW (%) 19.4 20.9 20.2 22.4

Payout (%) 23.2 13.3 9.4 15.1


Y/E March 2009 2010 2011

Cash Flow Summary

Cash and Cash Equivalents atBeginning of the year 167 1,764 484

Net Cash from Operating Activities 2,853 -912 2,700

Net Cash in Investing Activities -1,371 -129 -2,328

Net Cash in Financing Activities 116 -239 -238

Net Inc/(Dec) in Cash and CashEquivalent 1,598 -1,280 134

Cash and Cash Equivalentsat End of the year 1,764 484 618

August 27 - 31, 2012 120


Motherson Sumi Systems



Promoter 65.6 65.2 65.2

Dom. Inst. 9.9 10.2 9.0

Foreign 12.4 12.1 11.6

Others 12.2 12.5 14.2

Stock info

Bloomberg MSS IN


CMP (INR) 185

Mcap (USD b) 1.3

52-Wk Range (INR) 217 / 129

1, 6, 12 Rel Perf (%) 4 / 4 / -19

Company descriptionMotherson Sumi Systems Limited (MSSL) is the flagship

company of the Samvardhana Motherson Group and is

a joint venture between Samvardhana Motherson

Group & Sumitomo Wiring Systems (Japan). It is a full

system solution provider for the automotive industry.

Post acquisition of VisioCorp and Peguform, it has a

very strong foothold in global automotive supply chain.

SMR (subsidiary) is one of the largest manufacturers of

exterior rearview mirrors in the world, whereas

Peguform is one of the largest manufacturers of IP

modules, door trims and bumpers in Europe.

Key investment positives Post Peguform acquisition, MSSL is one of the top

suppliers to passenger car OEMs globally.

MSSL's revenue per car is set to increase both in

India and abroad due to (1) rising contribution of

high-price rear-view mirrors in passenger cars in

India, (2) becoming a full system supplier after

acquisition of Peguform, and (3) increase in

requirement of wiring harnesses due to rising

features in a car.

Strong order book for Samvardhana Motherson

Peguform (SMP) and Samvardhana Motherson

Reflectec (SMR) would be key performance driver.

Ramp-up in recently added capacities and

commissioning of ongoing expansion would drive

revenues and profitability. Synergies of Peguform

acquisition would further drive margins.

Key challenges Maintaining growth momentum in slowing global

car volumes, especially since over 75% of revenues

comes from global customers.

Successfully integrating and deriving synergies from

Peguform acquisition.

Key news flows / triggers to watch SMR's Hungary plant expected to ramp up

significantly from 3QFY13.

Equity fund raising to reduce net debt of INR44b.

1QFY13 highlights; guidance for FY13, FY14 Consolidated Net sales stood at INR63.9b (+178%

YoY, -0.6% QoQ). Standalone revenues at INR10.6b

(+41% YoY, -12 % QoQ); SMR revenues at EUR232m

(+15% YoY, -3.5% QoQ) and SMP revenues at

EUR474m (-7.1% QoQ).

Consolidated EBITDA (adjusted for forex) was

INR4.5b. EBITDA margin was 7.1% (-100bp YoY, +40bp

QoQ), with standalone EBITDA margin at 16.6%, SMR

at 5.8% and SMPL at 4.2%.

Adj PAT was INR2.1b (+287% YoY, +107% QoQ).

Expect capex of INR7-8b for FY13.

MSSL is targeting revenues of USD5b (v/s USD3b in

FY12), with ~70% revenues from global customers

and 40% RoCE and dividend payout.



Net Sales 22,716 22,901 37,723 63,682 62,772 147,022

Changes (%) 22.2 19.5 81.1 174.8 176.3 79.8

EBITDA 1,700 792 237 4,631 1,436 7,360

Changes (%) 21.5 -52.6 -86.8 93.0 -15.5 1.2

EBITDA Margin (%) 7.5 3.5 0.6 7.3 2.3 5.0

Reported PAT 673 24 -1,020 2,287 -422 1,964

Adjusted PAT 653 243 42 1,929 81 2,867

Changes YoY (%) 9.6 -71.8 -96.0 38.9 -87.5 -26.6

PAT Margin (%) 2.87 1.06 0.11 3.03 0.13 1.95

121August 27 - 31, 2012


Motherson Sumi Systems: Financials and valuation


Y/E March 2009 2010 2011 2012

Net Sales 25,956 67,022 81,756 147,766

EBITDA 2,393 3,269 6,930 8,925

EBITDA Margins (%) 9.2 4.9 8.5 6.0

Interest 383 635 576 1,649

Depreciation 1,091 2,601 2,465 3,796

Other Income 1,640 3,394 2,423 1,445

PBT 2,559 3,428 6,312 4,925

Eff. Tax rate (%) 13.6 31.8 29.8 43.7

Adjusted Net Profit 1,752 2,477 3,838 2,596


Y/E March 2009 2010 2011 2012




Total Debt 8,951 8,179 12,635 43,921


Net Block 13,487 14,548 17,657 46,922

CWIP 1,764 1,808 4,601 4,458


Current Assets, Loans & Advances

Inventories 6,112 6,752 10,376 22,496

Sundry Debtors 6,132 7,688 9,557 30,127

Cash and Bank 2,766 3,431 3,565 4,557



Less : Current Liabilities and Provisions




Net Deferred Tax -145 -40 -10 -602

Total Assets 18,782 21,855 30,998 67,665

Ratios

Y/E March 2009 2010 2011 2012

EPS (INR) 4.9 6.6 9.9 6.7

EPS growth (%) 3.3 34.2 49.8 -32.5

Cash EPS (INR) 8.0 13.6 16.3 16.5

Book Value (INR) 22.0 31.1 41.5 48.2

DPS (INR) 1.35 1.75 2.75 2.25

Payout (%) 22.6 30.5 25.3 34.0

Valuation (x)

P/E 36.1 26.9 18.0 26.6

Cash P/E 22.3 13.1 10.9 10.8

EV/EBITDA 28.8 21.7 11.2 12.0

EV/Sales 2.7 1.1 0.9 0.7


Dividend Yield (%) 0.8 1.0 1.5 1.3

Turnover Ratios

Fixed Assets 1.6 3.9 4.0 3.1

Inventory (days) 85.9 36.8 46.3 55.6

Debtors (days) 86.2 41.9 42.7 74.4

Creditors (days) 174.2 71.1 72.7 118.3


RoCE (%) 20.1 20.0 26.1 13.3

RoNW (%) 26.6 25.4 27.7 14.9

Leverage Ratio

Debt-Equity Ratio 1.1 0.7 0.8 2.3


Y/E March 2009 2010 2011 2012


at Beginning of the year 954 2,766 3,431 3,480

Net Cash from Operating

Activities 2,499 4,083 4,193 5,887

Net Cash Used in

Investing Activities -3,662 -3,729 -8,055 -20,698

Net Cash Used in

Financing Activities 2,948 312 4,010 13,800

Net Inc/(Dec) in Cash

and Cash Equivalent 1,785 666 148 -1,011


at End of the year 2,738 3,432 3,578 4,426

August 27 - 31, 2012 122


NTPC



Promoter 84.5 84.5 84.5

Dom. Inst. 7.8 7.7 8.3

Foreign 4.0 4.1 3.6

Others 3.7 3.8 3.6

Stock info

Bloomberg NTPC IN


CMP (INR) 168

Mcap (USD b) 24.9

52-Wk Range (INR) 190 / 139

1, 6, 12 Rel Perf (%) 3 / -7 / -9

Company descriptionNTPC is the largest power generator in India contributing

to ~30% of the country's total generation. It has an

installed capacity of 39.2GW, and it aims to add 14GW in

the 12th Plan (FY13-17) v/s ~9GW added in 11th Plan

period. It has also ventured into related areas like coal

mining, distribution, transmission, and gas exploration.

Key investment positives NTPC plans to commission 14GW of capacity in 12th

plan (11.9GW remaining). Similar capacity is planned

for 13th plan at 14.7GW, of which 4.8GW is under

construction and balance under project award. This

provides high visibility of earnings growth.

NTPC's PAF (Plant Availability Factor) has been

consistently above 90%, while lower demand has

impacted PLF. Base RoE recovery is linked to PAF

and is thus assured.

Strong operating cash flow and cash equivalent of

INR178b (FY12) would support its expansion plans

and thus, growth will not be equity dilutive.

Higher generation growth led by improved domestic

coal supply and demand by DISCOMs would drive

core earnings, incentives.

Key challenges NTPC has witnessed meaningful delays in capacity

commissioning/project awards in past. Continued

delays could limit upfront earnings growth.

Lower demand/backdown from SEBs may impact

the company's generation incentives.

Delay in restoration of coal mine may impact NTPC's

diversification policy of coal sourcing.

Key news flows / triggers to watch Restoration of 3 coal blocks with 2b tons of coal

reserves by Ministry of Coal. NTPC has presented

its case with the progress report of mines.

News flow on equipment order award for

supercritical units (800MW) is to be watched.

Generation incentives contribute 20-25% to NTPC

earnings thus generation growth is crucial.

1QFY13 highlights; guidance for FY13, FY14 NTPC's 1QFY13 performance was robust led by

higher generation and partly helped by other

operating/financial other income. It reported

highest generation growth since 1QFY10 at 8% YoY.

NTPC reiterated capacity addition target of 4.2GW

in FY13 and 14GW in 12th Plan.

In order to secure payments from SEBs post October

2016, NTPC has signed supplementary agreements

with them for first right on escrow account/

receivables.




Change (%) 9.5 4.2 13.6 4.8 12.6 7.8 18.9

EBITDA 28,662 32,387 28,564 41,127 36,306 131,437 157,102

Change (%) 2.2 -2.2 -22.1 12.9 26.7 -2.1 19.5

EBITDA Margin (%) 20.2 21.1 18.6 25.3 22.7 21.5 21.6

Reported PAT 20,758 24,240 21,304 25,934 24,987 92,238 92,261

Adjusted PAT 19,015 14,797 20,692 22,958 23,888 79,720 91,162

Change (%) 13.0 -8.4 -1.1 -10.6 25.6 0.2 14.4

PAT Margin (%) 13.4 9.6 13.5 14.1 15.0 13.0 12.5


Instal. Cap. (MW) 34,854 34,854 36,014 37,014 39,174 37,014 41,174

Qtly. addition (MW) 660 - 1,160 1,000 2,160 2,820 4,160

Coal plant PAF (%) 89.9 83.4 85.3 94.7 88.4 88.4 88.0

E: MOSL Estimates

123August 27 - 31, 2012


NTPC: Financials and valuation


Y/E March 2011 2012 2013E 2014E

Gross Sales 548,740 611,462 717,532 797,084

Net Sales 548,740 611,462 717,532 797,084

Change (%) 18.5 11.4 17.3 11.1


% of Sales 77.1 78.5 78.0 74.7

EBITDA 125,848 140,511 162,992 206,770

Margin (%) 22.9 23.0 22.7 25.9

Depreciation 24,857 27,904 35,922 44,807

EBIT 100,992 112,607 127,070 161,963

Interest 21,491 17,116 23,060 33,365

Other Income - Rec. 40,995 27,784 25,598 27,627


Current Tax 29,470 31,024 31,628 38,964

Tax Rate (%) 24.5 25.2 24.4 24.9

Reported PAT 91,025 92,236 97,978 117,259

EO Exp/(Inc) 11,445 9,018 0 0

Adjusted PAT 79,580 83,218 97,978 117,259

Margin (%) 14.5 13.6 13.7 14.7

Balance Sheet

Y/E March 2011 2012 2013E 2014E


Total Reserves 596,468 650,457 705,170 770,648

Net Worth 678,923 732,912 787,624 853,103


Total Loans 439,803 483,558 629,148 695,661


Gross Block 727,552 815,680 1,120,924 1,286,514

Less: Accum. Deprn. 335,192 363,096 399,018 443,825

Net Fixed Assets 392,360 452,584 721,905 842,689

Capital WIP 382,706 418,278 363,154 355,496

Investments 123,448 95,839 106,008 96,561

Curr. Assets 353,968 441,677 447,913 448,892

Inventory 36,391 37,029 49,146 54,595



Others 76,481 168,637 84,718 92,155



Appl. of Funds 1,121,753 1,229,955 1,423,141 1,555,133


Y/E March 2011 2012 2013E 2014E


- Own 30,830 32,650 36,310 38,270

-JV 3,364 4,364 4,864 6,114

Coal Plant PAF (%) 92 90 89 89

Coal Plant PLF (%) 88 85 85 85

Ratios

Y/E March 2011 2012 2013E 2014E

EPS (Adjusted) 9.7 10.1 11.9 14.2

Cash EPS 12.7 13.5 16.2 19.7

BV/Share 82.3 88.9 95.5 103.5

DPS 4.2 4.0 4.5 5.4

Payout (%) 44.2 41.3 44.2 44.2

Valuation (x)

P/E 17.4 16.7 14.1 11.8

Cash P/E 13.3 12.5 10.3 8.5

P/BV 2.0 1.9 1.8 1.6

EV/Sales 3.0 2.8 2.5 2.4

EV/EBITDA 12.6 11.6 10.9 9.0

Dividend Yield (%) 2.5 2.4 2.7 3.2

Return Ratios (%)

RoE 12.2 11.8 12.9 14.3

RoCE 13.3 11.9 11.5 12.7






Leverage Ratio (x)



Debt/Equity 0.6 0.7 0.8 0.8


Y/E March 2011 2012 2013E 2014E


Interest 21,491 17,116 23,060 33,365

Depreciation 24,857 27,904 35,922 44,807


(Inc)/Dec in WC -5,405 -24,181 49,592 -42,377


CF fr. Oper. incl EO Exp. 131,969 113,089 206,555 153,056

(inc)/dec in FA -120,714 -123,700 -250,120 -157,933

(Pur)/Sale of Investments -24,623 -27,609 10,169 -9,447


(Inc)/Dec in Debt 53,912 44,491 152,774 66,513

Dividend Paid -29,438 -27,886 -31,687 -37,923

Interest -21,491 -17,116 -23,060 -33,365

Others 27,642 6,891 -1,464 5,227

CF from Fin. Activity 30,625 6,380 96,564 451

Inc/Dec of Cash 17,258 -31,840 63,168 -13,872


Closing Balance 161,853 130,012 240,854 182,226

August 27 - 31, 2012 124


ONGC



Promoter 69.2 69.2 74.1

Dome. Inst. 11.7 11.6 7.4

Foreign 5.3 5.4 4.9

Others 13.8 13.8 13.6

Stock info

Bloomberg ONGC IN


CMP (INR) 282

Mcap (USD b) 43.2

52-Wk Range (INR) 304 / 240

1, 6, 12 Rel Perf (%) -4 / 3 / -3

Company descriptionONGC, a Fortune 500 company, is India's largest

exploration and production (E&P) player. With over 300

discoveries, it has established in-place reserves of

6.9btoe (billion tons of oil equivalent), with ultimate

reserves of 2.4btoe. It currently accounts for ~68% of

India's domestic oil and gas production. Through its

100% subsidiary ONGC Videsh Limited (OVL), it has

equity investments in E&P blocks in 16 countries.

Downstream presence is marked through its subsidiary,

MRPL (71.6% stake).

Key investment positives Await clarity on subsidy rationalization; gas price

hike a long term trigger: Rationalization of subsidy

would result in increased earnings predictability for

the company leading to higher valuation multiples.

Large NELP acreage to provide long-term growth:

ONGC has more than 50% of allotted NELP

exploration acreage. Of this, around 66% acreage is

in high potential deep water. As bulk of this acreage

is yet to be explored, we believe there is huge

potential for hydrocarbon discoveries.

Increased capex, IOR/EOR projects to provide

production growth: Impressive RRR>1 for last 6

years. Production is likely to be flat in short-term,

however we expect volume growth in long term

led by IOR/EOR, marginal fields and monetization

of the discovered fields.

Key challenges Ad-hocism in subsidy sharing.

Acquisition of overseas assets at high valuations

against stiff competition from China.

Slowdown in deep water development due to

technological barriers.

Key news flows / triggers to watch Clarity on production from Sudan and Syria for OVL.

Subsidy rationalization by the government and de-

controlling of diesel prices.

Discoveries in its NELP blocks and acquisition of

overseas assets.

1QFY13 highlights; guidance for FY13, FY14 In 1QFY13, ONGC subsidy share was INR123.4b and

its share in upstream stood at 82% (v/s 80.8% in

FY12). We model FY13/14 upstream subsidy sharing

at 40% and ONGC share at 81%.

Net realization was at USD46.6/bbl, up 5% QoQ but

down 3% YoY.

ONGC has made a demand to MoPNG for calculating

its share of subsidy-based crude production rather

than on crude plus condensate.

ONGC expects incremental production of 24kbpd

by 2015 from its new oil pool discovery in D-1 field.




Change (%) 18.5 24.3 -2.5 22.2 24.0 15.1 6.2

EBITDA 93 142 107 111 110 451 423

Change (%) 15.3 27.7 -5.8 52.3 19.1 19.8 -6.3

EBITDA Margin (%) 57.2 62.6 58.8 58.8 55.0 59.6 52.6

Reported PAT 41 86 67 56 61 251 210

Adjusted PAT 41 86 46 56 61 230 210

Change (%) 11.8 60.4 -20.2 119.4 48.4 32.0 -8.6

PAT Margin (%) 25.3 38.2 25.6 30.0 30.3 30.4 26.2

Key Metrics (USD/bbl)

Fx rate (INR/USD) 45 46 51 50 54 48 54

Gross Oil Realiz. 121 117 112 122 110 118 108

Subsidy 73 33 67 77 63 63 60

Net Oil Realization 48 84 45 44 47 55 47

Subsidy (INR b) 120 57 125 142 123 445 477

E: MOSL Estimates

125August 27 - 31, 2012


ONGC: Financials and valuation

Income Statement (INR Billion)

Y/E March 2011 2012 2013E 2014E

Net Sales 1,176 1,464 1,585 1,684

Growth (%) 15.6 24.4 8.3 6.3

Government Levies 192 231 273 305

Other Operating Costs 483 655 785 765

Total Operating Costs 676 886 1,057 1071

EBIDTA 500 578 527.2 614

% of Net Sales 42.5 39.5 33.3 36.4

Debt Charges 4 4 8 8

D,D&A 206 234 226 255


Prov, wrtie-offs prior period 16 -31 0 0

PBT 343 428 358 413

Tax 115 144 113 135

Rate (%) 33.5 33.6 31.5 32.6

PAT 228 284 245 279

Adj PAT 213 263 245 279

Growth (%) 8.1 23.3 -6.9 13.8

Minority int., assoc profits 4 3 3 4

Net Profit post MI 210 260 242 275

Balance Sheet (INR Billion)

Y/E March 2011 2012 2013E 2014E


Reserves 1,103 1,287 1,426 1,601

Net Worth 1,145 1,329 1,469 1,644

Debt 63 100 101 101

Deferred Tax 112 115 123 132

Liability for Abandonment 199 202 205 208



Producing Properties 572 557 588 621

Pre-producing Properties 102 113 144 168

Investments (incl. mkt. sec.) 34 33 33 33

Goodwil l 90 85 80 75

Cash & Bank Balances 287 415 417 492

Inventories 86 84 85 94

Sundry debtors 98 103 88 102

Loans & Advances 110 116 122 128

Total Curr. Assets 590 727 720 825

Current Liabilities 340 302 301 324


Total current liabilities 391 370 370 393

Net Curr. Assets 198 356 350 432

Total assets 1,539 1,769 1,923 2,115


Exchange rate (USD/INR) 45.7 47.9 53.5 52.0

Subsidy (INRb) 249 445 477 353

Oil production (mmt) 27.3 26.9 27.7 29.6

Gas production (bcm) 25.3 25.5 26.5 26.1

Net realization (USD/bbl) 54 55 47 60

Ratios

Y/E March 2011 2012 2013E 2014E

Basic (INR)

EPS 24.5 30.4 28.3 32.1

Cash EPS 49.6 58.2 55.5 63.0

Book Value 133.9 155.4 171.7 192.1

DPS 9.0 9.8 10.2 10.0

Payout (incl. div tax) 56.2 37.4 42.2 36.4

Valuation (x)

P/E 9.3 10.0 8.8

Cash P/E 4.8 5.1 4.5

EV / EBITDA 3.6 3.9 3.2

EV / Sales 1.4 1.3 1.2

Price / Book Value 1.8 1.6 1.5


EV/BOE (USD, 1P basis) 6.3 5.6 5.6


RoE 19.5 21.0 17.3 17.6

RoCE 18.8 20.1 16.7 17.1

Turnover Ratios

Debtors (No. of Days) 26.2 25.0 21.9 20.5


Leverage Ratio

Net Debt / Equity (x) -0.2 -0.3 -0.2 -0.3

Cash Flow Statement (INR Billion)

Y/E March 2011 2012 2013E 2014E

OP/(Loss) before Tax 343 428 358 413

DD & A 114 167 185 205

Other op. expenses 4 0 0 0


(Inc)/Dec in Wkg. Capital 70 -30 8 -7

CF from Op. Activity 425 425 445 487

(Inc)/Dec in FA & CWIP -277 -237 -342 -312


CF from Inv. Activity -244 -237 -342 -312


Inc / (Dec) in Debt 0 37 0.4 0.4

Dividends Paid (incl.tax) -118 -97 -102 -100

Interest paid -4 0 0 0

CF from Fin. Activity -118 -60 -102 -100

Inc / ( Dec) in Cash 63 128 1 75

Add: Opening Balance 224 287 415 417


August 27 - 31, 2012 126


Oil India



Promoter 78.4 78.4 78.4

Dom. Inst. 5.2 5.0 5.3

Foreign 1.7 1.9 2.1

Others 14.7 14.7 14.1

Stock info

Bloomberg OINL IN


CMP (INR) 479

Mcap (USD b) 5.2

52-Wk Range (INR) 556 / 431

1, 6, 12 Rel Perf (%) -4 / -6 / -14

Company descriptionOil India (OIL), established in 1959, is a 'Navratna' state-

owned company, engaged in exploration,

development, production and transportation of crude

oil and natural gas in India. OIL has 2P reserves of

944mmboe, ~94% of these located in the north-east. It

owns common carrier cross-country pipeline of 1,157km

for crude oil, and 660km for products, and the 192km

natural gas pipeline to Numaligarh refinery.

Key investment positives Valuations attractive; steady production growth; gas

price hike a long term trigger: Oil India trades at 50-

70% discount to global peers on EV/BOE (1P basis).

Further; despite subsidy, OIL's net realization and

PAT grew at 9% and 18% CAGR since FY05. On the

operational front, we expect 1.4% oil and 4.5% gas

production CAGR over FY12-14.

Healthy oil/gas reserve ratio; RRR>1 consistently:

OIL's reserve mix is favorable with oil contributing

62% of its 2P reserves and 1P reserves being only at

53% of 2P reserves, indicating a large scope for

increase in 1P.

Cash deployment - a near-term trigger: Expect

announcement of overseas acquisition in near term.

As on Mar 2012, OIL had cash balance of INR109b

(48% of assets, 38% of current market cap).

Key challenges Upstream subsidy sharing of ~40% could become

the new normal, if the crude oil prices remain high

and the OMCs prevented from raising retail prices

of fuels.

Oil India's producing assets are concentrated in

Assam and are present in tough terrains. Hence,

highly susceptible to supply disruption.

Key news flows / triggers to watch Subsidy rationalization by the government and de-

controlling of diesel prices.

Likely acquisition of overseas E&P assets given the

high cash balance.

1QFY13 highlights; guidance for FY13, FY14 In 1QFY13, OIL subsidy share stood at INR20.2b and

its share in upstream subsidy stood at 13.4% (similar

to FY12).

1QFY13 net realization at USD53.9/bbl down 10%

YoY but up 38% QoQ.

Oil India will start drilling in NELP blocks in Mizoram

and KG onshore.

Oil India is targeting to acquire overseas producing

assets.




Change (%) 50.2 37.8 4.5 -14.8 2.0 0.0 -4.7

EBITDA 12 16 13 5 11 47 43

Change (%) 67.8 19.9 -3.4 -50.0 -12.2 5.5 290.0

EBITDA Margin (%) 54.5 49.5 53.5 28.0 47.0 47.9 45.9

Reported PAT 8 11 10 4 9 34 34

Adjusted PAT 8 11 10 4 9 34 34

Change (%) 69.5 24.3 1.2 -20.9 9.5 15.6 262.7

PAT Margin (%) 37.1 34.8 40.6 25.9 39.9 35.3 36.2

Key Metrics

Fx rate (INR/USD) 45 46 51 50 54 48 54

Gross Oil Realiz. 116 112 110 120 110 115 105

Subsidy 57 26 53 81 56 54 53

Net Oil Realization 60 86 57 39 54 60 52

Subsidy (INR b) 18 8 19 29 20 74 79

E: MOSL Estimates

127August 27 - 31, 2012


Oil India: Financials and valuation


Y/E March 2011 2012 2013E 2014E

Exchange rate (INR/USD) 45.6 47.9 53.5 52.0

Subsidy (INR b) 32.9 73.5 78.8 58.4

Oil production (mmt) 3.6 3.8 3.9 4.0

Gas production (bcm) 2.4 2.6 2.7 2.9

Gross realization (USD/bbl) 86 115 105 100

Subsidy (USD/bbl) 28 55 53 39

Net realization (USD/bbl) 59 60 53 61


Y/E March 2011 2012 2013E 2014E

Net Sales 83,034 97,741 93,122 106,611

Change (%) 5.0 17.7 -4.7 14.5

Change in Stocks -76 -88 29 0

Production Costs 13,789 23,074 18,880 20,196

Statutory Levies 24,423 27,904 31,466 34,045

EBITDA 44,898 46,851 42,747 52,370

% of Net Sales 54.1 47.9 45.9 49.1

D,D&A 12,669 15,263 14,421 14,298


Other Income 12,458 19,536 21,361 19,189

Prior period & other adj. 1,421 0 0 0

PBT 43,127 51,019 49,678 57,253

Tax 14,255 16,549 15,952 18,384

Rate (%) 33.1 32.4 32.1 32.1

PAT 28,872 34,469 33,727 38,869

Change (%) 10.6 19.4 -2.2 15.2


Y/E March 2011 2012 2013E 2014E

Share Cap.(incl sh.suspense)2,405 6,011 6,011 6,011

Reserves 153,614 171,235 192,006 216,849

Net Worth 156,019 177,247 198,017 222,860

Total Loans 10,268 101 101 101

Deferred Tax 11,491 10,768 11,816 13,024

Well Abandonment 1,645 1,645 1,645 1,645




Net Fixed Assets 9,897 12,588 14,338 15,874

Capital WIP 4,484 4,484 4,484 4,484

Producing/pre-producing 41,343 50,911 72,931 98,289

Investments 8,904 14,520 14,520 14,520

Inventory 5,004 5,377 5,517 5,944

Debtors 2,495 2,988 2,806 3,213


Loans & Adv. and Other CA 22,819 22,819 22,819 22,819

Liabi l i t ies 20,996 19,203 20,690 22,291

Provisions 12,220 12,220 12,220 12,220



Ratios

Y/E March 2011 2012 2013E 2014E

Basic (INR)

EPS (Adj) 48.0 57.3 56.1 64.7

Cash EPS 56.0 65.9 65.2 74.3

Book Value 259.5 294.9 329.4 370.7

DPS 15.0 19.0 19.0 20.0


Valuation (x)

P/E 9.9 8.3 8.5 7.4

Cash P/E 8.5 7.2 7.3 6.4

EV / EBITDA 4.0 3.8 4.2 3.4

EV/Sales 2.2 1.8 1.9 1.7

EV / BOE (1P Reserves) 7.8 7.4 6.7 6.8


Dividend Yield (%) 3.1 4.0 4.0 4.2


RoE 19.7 20.7 18.0 18.5

RoCE 27.3 27.7 24.8 25.5

Turnover Ratios


Fixed Asset Turnover (x) 3 3 2 2

Leverage Ratio

Net Debt / Equity (x) -0.7 -0.6 -0.5 -0.5

* At price of INR1,050/share


Y/E March 2011 2012 2013E 2014E


Depreciation 4,790 5,142 5,454 5,786

Interest /Other Income -7,886 105 8 8


(Inc)/Dec in Wkg. Capital 4,034 -2,659 1,528 767

Other op activities 288 2,600 5,775 5,320


(Inc)/Dec in FA & CWIP -9,518 -20,000 -35,000 -38,000

(Pur)/Sale of Investments 4,692 -5,616 0 0

Other In activities 6,343 0 0 0

CF from Inv. Activity 1,517 -25,616 -35,000 -38,000

Inc / (Dec) in Debt 9,893 -10,167 0 0

Interest paid -153 -105 -8 -8

Dividends Paid -9,533 -13,241 -12,956 -14,026

CF from Fin. Activity 206 -23,513 -12,964 -14,035

Inc / ( Dec) in Cash 32,264 -10,196 -424 -76


Closing Balance 117,693 107,497 107,073 106,998

August 27 - 31, 2012 128


Phoenix Mills



Promoter 65.9 65.9 65.9

Dome. Inst. 4.6 5.0 5.4

Foreign 23.6 23.2 22.5

Others 5.9 5.9 6.2

Stock info

Bloomberg PHNX IN


CMP (INR) 180

Mcap (USD b) 0.5

52-Wk Range (INR) 228 / 149

1, 6, 12 Rel Perf (%) -5 / -12 / -21

Company descriptionPhoenix Mills is a pioneer in the development of large

scale, mixed-format retail development in India. It is a

unique, low-risk play on the booming domestic

consumption story with no retail-specific risks.

Through its subsidiaries and associate companies it is

undertaking 40 retail/hospitality projects, totaling

~50msf across India. It owns one of the most successful

malls in India, High Street Phoenix (HSP) in Parel,

Mumbai. With the commencement of Market City

projects and Shangri-la hotel, we expect rental income

from retail to increase from INR2.5b in FY12 to INR3.9b

in FY14.

Key investment positives Deep understanding of retail business, strong

relationship with marquee international/domestic

brands, financing partners to execute asset-heavy

projects, strategic partner to tap tier II markets

Single-asset company to pan-India positioning with

several assets commencing operations, taking

operational assets from 2.5msf (FY11) to 5.8msf/

8.9msf/10.7msf in FY12/13/14 respectively

Asset-heavy model offering a play on India's

booming domestic consumption and retailing story

– rental income CAGR of 25% over FY12-14.

Monetization of residential and commercial land

parcels at Market City SPVs offer healthy cash flow

visibility to address liquidity risk.

Key challenges High leverage with net DER of 0.86x. Any delay in

monetization of residential/commercial projects

could defer de-leveraging plan

The exit of PE investors at Market City SPVs,

although the company does not carry obligations

to provide an exit to these investors.

Retail demand supply dynamics at tier II cities

Key news flows / triggers to watch Leasing momentum and operational ramp up at

Market City SPVs.

De-leveraging.

Value unlocking from Phase IV at HSP, where

increase in FSI could lend further upside.

1QFY13 highlights; guidance for FY13, FY14 Consumptions and footfalls at Market City Pune in

1QFY13 increased 2.6x since commencement in

1QFY12. Consumptions improved from INR308m in

3QFY12 to INR608m in 1QFY13 at Bangalore.

Bringing certain change to earlier plan of buying

out Kshitij's stake in Chennai Market City alone,

PHNX board has approved a proposal to buy out the

stake jointly with Sharyans Resources. PNHX will

hold 50.01%/50% in Classic Mall/Classic Housing post

completion of the transaction.

The management expects no increase in leverage

on account of construction expenditure, but the

same could increase on acquisitions, if any.




Change (%) 32.4 6.9 12.0 28.3 17.0 74.4 19.1

EBITDA 331 333 373 363 394 2,114 2,543

Change (%) 12.6 5.1 14.0 13.2 19.3 50.4 20.3

EBITDA Margin (%) 62 70 74 61 63 57.7 58.3

Reported PAT 272 239 269 273 306 1,056 1,141

Adjusted PAT 272 239 269 273 306 1,056 1,141

Change (%) 49.1 8.0 13.1 0.6 12.4 25.5 8.0

PAT Margin (%) 50.9 50.4 53.3 45.5 48.9 28.8 26.1

E: MOSL Estimates

129August 27 - 31, 2012


Phoenix Mills: Financials and valuation


Y/E March 2011 2012 2013E 2014E

Net Sales 2,102 3,666 4,365 7,511

EBITDA 1,406 2,114 2,543 4,018

% of Net Sales 66.9 57.7 58.3 53.5


Interest 228 944 1,097 1,475

Other Income 287 446 581 622

PBT 1,151 1,053 1,225 2,114

Tax 321 189 306 592

Rate (%) 27.9 18.0 25.0 28.0

Reported PAT 830 864 1,141 2,103

Adjusted PAT 842 1,056 1,141 2,103

Change (%) 36.5 25.5 8.0 84.3


Y/E March 2011 2012 2013E 2014E

Equity Capital 290 290 290 290

Reserves 16,410 16,816 17,618 19,382

Net Worth 16,700 17,105 17,908 19,671

Loans 9,628 16,748 16,248 15,748

Deffered Tax Liability -9 -247 -247 -247




Less: Depreciation 948 1,503 2,304 3,355

Net Fixed Assets 7,932 11,880 15,392 15,873

Capital WIP 10,997 13,591 11,390 11,607

Investments 4,787 4,869 4,869 4,869

Curr. Assets 8,833 13,058 13,711 15,879

Inventory 1,182 2,516 2,768 3,183

Debtors 961 618 680 748


Inventory 1,182 2,516 2,768 3,183



Creditors 2,723 3,297 4,451 5,342

Provisions 360 413 413 413



Ratios

Y/E March 2011 2012 2013E 2014E

Basic (INR)

Adjusted EPS 5.8 7.3 7.9 14.5

Growth (%) 36.5 25.5 8.0 84.3

Cash EPS 7.9 9.9 11.9 17.8

Book Value 115.3 118.1 123.6 135.8

DPS 0.9 2.0 2.0 2.0


Valuation (x)

P/E 25.2 23.4 12.7

Cash P/E 18.7 15.5 10.4

EV/EBITDA 20.1 16.4 10.1

EV/Sales 11.6 9.6 5.4



RoE 5.0 6.2 6.4 10.7

RoCE 5.2 6.1 6.2 9.3

Leverage Ratio

Debt/Equity (x) 0.5 0.9 0.8 0.8


Y/E March 2011 2012 2013E 2014E


Add : Depreciation 314 563 802 1,051

Interest 228 944 1,097 1,475

Less : Direct Taxes Paid 321 189 306 592

CF from Operations -500 2,085 4,161 4,947

(Inc)/Dec in FA -2,785 -7,105 -2,112 -1,748

(Pur)/Sale of Investments 814 -83 0 0


(Inc)/Dec in Net Worth -30 -550 0 0

(Inc)/Dec in Debt 3,020 7,120 -500 -500

Less : Interest Paid 228 944 1,097 1,475



Inc/Dec of Cash 145 184 113 885

Add: Beginning Balance 671 816 1,000 1,112

Closing Balance 816 1,000 1,112 1,997


Stake (%) Rental Income 2011 2012 2013E 2014E

100% HSP 1.80 1.96 2.19 2.30

Standalone 1.80 1.96 2.19 2.30

59% Pune 0.26 0.43 0.48

24% Kurla 0.07 0.25 0.32

46% Bangalore 0.09 0.21 0.25

31% Chennai 0.00 0.07 0.23

Market cities 0.00 0.41 0.97 1.29

47-74 BARE 0.05 0.07 0.15 0.15

EWDPL 0.08 0.15 0.18

Treasure&Phoenix United 0.05 0.15 0.29 0.33

Grand total 1.85 2.52 3.45 3.92

53% Sangrila Hotel 0.00 0.23 1.02

Total rental 1.85 2.52 3.68 4.94

August 27 - 31, 2012 130


Pidilite Industries



Promoter 70.8 70.8 70.7

Dome. Inst. 4.9 5.8 7.4

Foreign 12.9 12.4 11.0

Others 11.5 11.0 10.9

Stock info

Bloomberg PIDI IN


CMP (INR) 180

Mcap (USD b) 1.6

52-Wk Range (INR) 188 / 134

1, 6, 12 Rel Perf (%) 8 / 25 / 2

Company descriptionPidilite Industries has been instrumental in evolution

of branded adhesives in the Indian market, a segment

which is commoditized globally. It has strong brands

like Fevicol, M-Seal, Dr Fixit, Hobby Ideas and Fevicryl.

Sales mix includes Adhesives (49%), Construction

chemicals (19%), Art material (10%) and Industrial

chemicals (22%).

Key investment positives Pidilite is a play on growth opportunity in both

consumer and industrial demand in India. It has

products which cater to woodwork, home and

office, construction, waterproofing and repairs etc.

Pidilite has strong pricing power as its consumer

and Bazaar segment has EBIT margins of 26%.

Pidilite has launched a host of innovative products

in waterproofing, construction chemicals and repair

work which will enable sustain high growth (20%

CAGR from past 5 years)

Pidilite's margins can recover sooner than expected

if crude prices tend lower; VAM (Vinyl Acetate

Monomer), its key input, is a crude derivative.

Key challenges Pidilite has invested INR3.3b and will be putting in

another INR2b in Synthetic Elastomers project,

although the pilot has been a success, risks

regarding completion and success still abound.

Pidilite's international operations have been losing

money due to lack of scale in most of the

subsidiaries. We believe it would require at-least a

couple of years for these subs to turn profitable.

Key news flows / triggers to watch Price trend of VAM and Packaging, decline in costs

can boost margins.

Increase in housing and infra spends, as it can boost

the growth rates further.

Successful commissioning of Elastomers project.

1QFY13 highlights; guidance for FY13, FY14 Consumer & Bazaar sales were up 21.6% led by

strong momentum in volume growth and pricing.

EBIT Margins in this segment were up 125bp.

Industrial chemical sales increased 11.5%, while

margins declined 270bp.

Brazil - sales declined by 14% yoy - pressure on

margin continues to be there, losses jumped from

5mn in 1QFY12 to 44mn in 1QFY13.

We expect 22% CAGR in earnings over FY12-14E.




Change (%) 21.5 20.5 16.5 15.6 18.8 159.4 20.1

EBITDA 1,521 1,302 1,207 958 1,907 4,692 6,353

Change (%) -2.2 4.8 1.9 17.8 25.4 146.0 28.3

EBITDA Margin (%) 19.8 18.3 17.4 14.7 20.9 19.8 18.8

Reported PAT 1,077 815 593 710 1,334 0 0

Adjusted PAT 1,078 864 790 749 1,333 3,297 4,329

Change (%) 0.1 2.2 -6.5 41.6 23.6 147.4 21.7

PAT Margin (%) 14.0 12.2 11.4 11.5 14.6 13.9 12.8


Consumer & Bazaar 22.8 23.2 22.6 22.3 21.6

Industrial Products 18.4 17.6 -2.1 5.0 11.5

E: MOSL Estimates

131August 27 - 31, 2012


Pidilite Industries: Financials and valuation


Y/E March 2011 2012 2013E 2014E

Net Sales 23,806 28,164 33,820 40,398

Change (%) 21.8 18.3 20.1 19.4

Raw Materials 12472 15674 18457 22153

Gross Profit 11334 12490 15363 18245

Margin (%) 47.6 44.3 45.4 45.2

Operating Expenses 6506 7540 9011 10568

EBITDA 4,828 4,950 6,353 7,677

Margin (%) 20.3 17.6 18.8 19.0



Other Income 150 428 235 313


Margin (%) 17.9 16.5 17.4 18.0

Tax 936 1,096 1,561 1,962

Tax Rate (%) 21.9 23.6 26.5 27.0

Adj PAT 3330 3557 4329 5305

Change (%) 13.4 6.8 21.7 22.5

Margin (%) 14.0 12.6 12.8 13.1

Exceptional/Prior Period inc 250 151 0 0

Reported PAT 3,080 3,407 4,329 5,305


Y/E March 2011 2012 2013E 2014E


Reserves 10,889 13,000 17,309 20,773

Net Worth 11,395 13,507 17,833 21,298

Loans 2,867 2,918 1,405 806



Gross Block 8,720 9,420 10,520 11,720

Less: Accum. Depn. 4,310 4,800 5,348 5,960

Net Fixed Assets 4,410 4,620 5,172 5,760

Capital WIP 3,331 3,600 3,700 3,850

Investments 4,656 5,841 7,259 8,661

Curr. Assets, L&A 7,596 9,367 11,287 13,416

Inventory 3,544 4,472 5,506 6,579



Others 913 1,020 1,162 1,315



Provisions 1,184 1,369 1,744 2,083



Ratios

Y/E March 2011 2012 2013E 2014E

Basic (INR)

EPS 6.6 7.0 8.3 10.1

Cash EPS 10.4 10.7 13.2 15.8

BV/Share 22.5 26.6 34.0 40.6

DPS 1.8 2.0 2.5 3.0

Payout % 31.3 36.0 35.4 34.7

Valuation (x)

P/E 24.9 23.4 19.9 16.2

Cash P/E 15.7 15.3 12.5 10.4

EV/Sales 3.4 2.8 2.4 1.9

EV/EBITDA 16.8 16.1 12.5 10.1

P/BV 7.3 6.2 4.8 4.0

Dividend Yield (%) 1.1 1.2 1.5 1.8

Return Ratios (%)

RoE 29.2 26.3 24.3 24.9

RoCE 30.9 29.1 30.7 32.7





Leverage Ratio

Debt/Equity (x) 0.3 0.2 0.1 0.0


Y/E March 2011 2012 2013E 2014E

PBT before Extra Ord 4,266 4,653 5,890 7,267

Add: Depreciation 444 479 548 612


Less: Taxes Paid 936 1,096 1,561 1,962

(Incr)/Decr in WC -372 -392 -685 -653


Extra ordinary items -250 -151 0 0

CFO after extraordinary 3,420 3,739 4,342 5,375

Incr in FA -1,236 -959 -1,200 -1,350

Pur of Investments 452 -1,185 -1,419 -1,402

CF from Invest. -784 -2,143 -2,619 -2,752

Change in Networth -2,105 -2,453 -1,507 -3,649

Incr in Debt -1,347 50 -1,512 -599

Dividend Paid 1,029 1,184 1,529 1,834

Interest Paid -268 -245 -149 -112


Incr/Decr of Cash -55 132 83 99



Key assumptions/operating metrics - Growth (%)

Y/E March 2011 2012 2013E 2014E

Consumer & Bazaar Products 22.3 21.4 20.4 20.8

Ind & Speciality chemicals 22.3 14.1 14.7 14.8

August 27 - 31, 2012 132


Power Grid



Promoter 69.4 69.4 69.4

Dom. Inst. 7.8 8.0 7.7

Foreign 13.1 13.0 13.6

Others 9.7 9.5 9.3

Stock info

Bloomberg PWGR IN


CMP (INR) 118

Mcap (USD b) 9.8

52-Wk Range (INR) 122 / 94

1, 6, 12 Rel Perf (%) 1 / 9 / 9

Company descriptionPower Grid Corporatation (PGCIL) is a central

transmission utility (CTU) with a Navratna status, which

owns and operates most of India's inter-state and inter-

regional transmission network. In addition to its

regulated business, PGCIL also provides consultancy

services in the transmission space and has laid down

optical fibre network for leasing to telecom companies.

Key investment positives Management has guided for capex worth INR1t in

12th plan which is ~2x the Eleventh Plan capex, and

thus a key driver of earnings for PGCIL.

CERC has approved setting up of nine high speed

transmission corridors (HSTCs) at a cost of INR750b

(PGCIL scope at INR660b), significantly improving

business visibility for PGCIL.

PGCIL's RAB is set to increase from ~INR178b as at

March 2012 to INR283b by FY14E (CAGR of 26%), as

projects of ~INR350b are commissioned and

capitalized in this period. This will lead to

corresponding increase in regulatory returns.

Short term open access, consultancy division and

telecom business are new additional of income,

which aids core earnings, improve reported RoE.

Inter-State transmission opportunity in 13th plan is

pegged at INR1.35t, where PGCIL would have to

compete on CBT basis. It has already demonstrated

its capability in CBT regime winning 2 projects.

Key challenges Meaningful delay in project execution owing to

delay in obtaining right of way.

Continued delays in generation projects may slow

down the growth momentum for PGCIL.

Weak financials of SEBs could elongate cash flow

cycle, receivables.

Key news flows / triggers to watch PGCIL is upbeat on meeting capex target of

INR1,000b in 12th plan and thus capex of INR200b

pa is crucial to watch for.

Capitalization has been strong for the company

aided by higher capacity addition. Fuel supply has

been at risk in the interim and thus

implementations of FSAs to be monitored for

incremental capacity addition on IPPs side.

1QFY13 highlights; guidance for FY13, FY14 PGCIL 1QFY13 capitalization stood higher at INR41b

v/s INR8b YoY.

Management is keen to lower CWIP in FY13

(INR155b as at Mar-12); it is targeting capitalization

of at least INR200b, v/s targeted capex of INR200b

(INR50b capitalization till July-12)

PGCIL maintained its 12th Plan capex target of

INR1t+ and guided to manage equity commitment

without any dilution, if need by taking lower DER.




Change (%) 10.2 6.5 20.2 40.3 31.1 19.6 31.3

EBITDA 18,455 18,978 21,027 26,038 24,646 83,824 112,739

Change (%) 9.8 6.3 21.7 40.2 33.6 18.9 34.5

EBITDA Margin (%) 83.8 83.8 85.2 83.9 85.3 83.5 85.6

Reported PAT 7,053 7,087 8,092 10,317 8,705 32,550 39,758

Adjusted PAT 7,022 7,601 7,743 10,832 9,065 33,199 39,758

Change (%) 18.9 27.1 28.1 44.7 29.1 30.7 19.8

PAT Margin (%) 31.9 33.6 31.4 34.9 31.4 33.1 30.2

Key Operating metrics (INR b)

Capitalization 8 33 22 78 41 141 170

Capex 19 27 41 91 30 178 190

RAB 138 148 154 178 190 178 229

E: MOSL Estimates

133August 27 - 31, 2012


Power Grid: Financials and valuation


Y/E March 2011 2012 2013E 2014E

Net Sales 83,887 100,353 131,748 159,616

Change (%) 17.7 19.6 31.3 21.2

Cost of Goods Sold 7,459 8,430 9,694 11,148

Staff Cost 5,915 8,100 9,315 10,712

EBITDA 70,513 83,824 112,739 137,756

% of Net Sales 84.1 83.5 85.6 86.3

Depreciation 21,994 25,725 34,652 42,965

Interest 17,339 19,432 25,900 29,313

Other Income 7,111 7,497 3,274 2,382

PBT 38,247 45,976 55,462 67,861

Tax 11,278 13,427 15,704 19,215

Rate (%) 29.5 29.2 28.3 28.3

Reported PAT 26,969 32,550 39,758 48,646

Extra-ordinary items -1,569 649 360 0

Adjusted PAT 25,400 33,199 40,118 48,646

Change (%) 10.3 30.7 20.8 21.3


Y/E March 2011 2012 2013E 2014E


Reserves 167,373 188,319 214,056 245,700

Net Worth 213,646 234,593 260,329 291,973

Loans 408,828 520,004 631,085 748,341

Deferred tax liability 11,467 16,009 21,575 28,385

Advance against dep 21,761 21,761 21,761 21,761

Grant in Aid 1,713 1,713 1,713 1,713

Capital Employed 657,415 794,080 936,463 1,092,173



Net Fixed Assets 372,240 487,514 622,862 759,898

Capital WIP 266,246 314,789 334,789 364,789

Investments 13,651 11,846 10,041 8,237

Curr. Assets 105,171 118,485 122,330 131,355

Inventory 3,815 4,674 6,136 7,434

Debtors 31,621 23,370 27,072 32,798



Loans & Advances 27,940 63,364 71,434 79,902


Net Current Assets 5,279 -20,069 -31,230 -40,751

Application of Funds 657,415 794,080 936,463 1,092,173

Ratios

Y/E March 2011 2012 2013E 2014E

Basic (INR)


Growth (%) 0.3 30.7 20.8 21.3

Cash EPS 10.2 12.7 16.1 19.8

Book Value 46.1 50.7 56.2 63.1

DPS 1.8 2.2 2.6 3.2

Eq. Div.Payout (incl. Div. Tax.) 34.9 35.6 35.3 35.0

Valuation

P/E 21.4 16.4 13.6 11.2

Cash P/E 11.5 9.2 7.3 5.9

EV/EBITDA 13.0 12.4 10.3 9.4

EV/Sales 10.9 10.4 8.8 8.1


Dividend Yield (%) 1.5 1.8 2.2 2.7


RoE 13.6 14.8 16.2 17.6

RoCE 9.3 9.0 9.4 9.6

Turnover Ratios



Leverage Ratio

Debt/Equity (x) 1.7 2.1 2.4 2.6


Y/E March 2011 2012 2013E 2014E



Interest 17,339 19,432 25,900 29,313


(Inc)/Dec in WC -5,910 9,881 909 2,063


EO Income -44 -187 0 0

CF frm Oper. incl. EO Items 60,392 87,588 101,218 122,986

(Inc)/Dec in FA -135,645 -189,543 -190,000 -210,000

(Pur)/Sale of Investments 882 1,805 1,804 1,804


(Inc)/Dec in Net Worth 36,719 0 0 0

(Inc)/Dec in Debt 68,441 115,718 116,646 124,066


Dividend Paid 9,426 11,603 14,021 17,002


Inc/Dec of Cash 4,024 -15,467 -10,252 -7,457


Closing Balance 36,801 21,333 11,082 3,625

Key assumptions/operating metrics (INR b)

Y/E March 2011 2012 2013E 2014E

Capex 137 178 190 210

Capitalization 74 141 170 180

Regulated Equity 136 178 229 283

August 27 - 31, 2012 134


Reliance Communications



Promoter 67.9 67.9 67.9

Dom. Inst. 9.3 9.3 8.9

Foreign 8.0 8.4 9.7

Others 14.8 14.4 13.5

Stock info

Bloomberg RCOM IN


CMP (INR) 56

Mcap (USD b) 2.1

52-Wk Range (INR) 110 / 53

1, 6, 12 Rel Perf (%) -17 / -43 / -31

Company descriptionRCom is an integrated telecom operator with presence

in wireless (CDMA+GSM), long-distance (wholesale

voice and data), and broadband segments. It has ~17%

subscriber share of the Indian wireless market (second

highest). 'Global' segment includes wholesale voice

services, retail ILD calling cards, and network

infrastructure based services. Broadband segment

caters to voice, data, video, internet, and IT

infrastructure requirements of enterprises.

Key investment positives Potential value unlocking in the tower business or

strategic stake sale at the parent level can lead to

de-leveraging and provide adequate resources to

drive growth in GSM and 3G.

Presence in GSM as well as CDMA technologies.

Potential outlay related to renewal remains one of

the lowest as none of the higher priced circles are

coming up for renewal in the next few years.

Key challenges Hyper-competition in the Indian mobile industry.

Regulatory uncertainty related to pricing of allocated

spectrum and spectrum re-farming.

High leverage with net debt/EBITDA of >5x.


Court is expected to be held in November 2012. The

auction is expected to set the base price for all

future spectrum payments.

Potential value unlocking from tower assets and

Reliance Globalcom business.

Final government decision on spectrum re-farming.

Ramp-up of the 3G subscriber base post recent sharp


1QFY13 highlights; guidance for FY13, FY14 1QFY13 EBITDA grew 3% YoY and 1% QoQ to

INR16.5b (5% below estimate).

Reported PAT of INR1.62b was in line with our

estimate as lower depreciation and tax offset the

EBITDA shortfall.

Wireless revenue growth was below estimate at

0.5% QoQ. Wireless EBITDA grew 0.6% QoQ to

INR12.1b (EBITDA margin of 26.7%).

Traffic was up 2% QoQ (4%/4%/6% for Bharti/

Vodafone/Idea) to 105b minutes

RPM declined 1% QoQ (2.5% QoQ decline for Bharti/

Idea) to 43.1p.

Flat 1QFY13 wireless EBITDA performance compared

favorably with the sharp QoQ decline reported by

Bharti (India & SA) and Idea.

While net debt declined by INR1.9b QoQ to

INR356b, this was accompanied with ~INR19b

increase in current liabilities to INR166b.

Capex guidance for FY13 is INR15b.



Revenue 49,401 50,402 50,521 53,100 53,192 203,424 213,979

YoY Change(%) -3.3 -1.5 1.0 -0.4 7.7 -1.1 5.2

EBITDA 16,021 16,051 16,111 16,322 16,502 64,506 65,949

YoY Change(%) -1.8 -3.3 -3.4 2.5 3.0 -1.5 2.2

EBITDA Margin(%) 32.4 31.8 31.9 30.7 31.0 31.7 30.8

Reported PAT 1,574 2,521 1,862 3,316 1,624 9,274 6,611

Adjusted PAT 2,235 3,223 2,408 2,017 1,914 9,884 7,587

YoY Change(%) -25.4 -34.3 -54.2 13.6 -14.4 -33.8 -23.2

PAT Margin(%) 4.5 6.4 4.8 3.8 3.6 4.9 3.5


Mobile Traffic (B Min) 98 99 100 103 105 399 426

QoQ Change(%) 3.2 1.4 1.0 3.4 1.8

Mobile RPM (INR) 0.44 0.45 0.45 0.44 0.43 0.44 0.43

QoQ Change(%) -0.1 0.7 -0.3 -2.0 -1.3

E: MOSL Estimates

135August 27 - 31, 2012


Reliance Communications: Financials and valuation


Y/E March 2011 2012 2013E 2014E

Revenues 205,627 203,424 213,979 226,617

Change (%) -7.6 -1.1 5.2 5.9

EBITDA 65,515 64,506 65,949 70,981

% of Gross Sales 31.9 31.7 30.8 31.3


EBIT 25,776 24,723 28,694 32,410

Net Interest and others -10,723 -15,901 -21,033 -19,866

PBT 15,053 8,822 7,661 12,545

Tax 117 -1,062 74 250

Rate (%) 0.8 -12.0 1.0 2.0

Adjusted PAT 14,936 9,884 7,587 12,295

Change (%) -69.4 -33.8 -23.2 62.0

PAT after EO 13,457 9,274 6,611 10,829


Y/E March 2011 2012 2013E 2014E

Share Capital 10,320 10,320 10,320 10,320

Addl. Paid up Capital 90,306 90,306 90,306 90,306

Reserves 256,892 216,497 216,932 227,157

Net Worth 357,518 317,123 317,558 327,784

Loans 373,757 369,178 364,610 341,371



Gross Block 1,002,814 1,045,869 1,087,660 1,109,462


Net Block 729,408 714,778 707,789 691,021

Investments 1,089 1,230 1,284 1,284

Curr. Assets 160,784 160,806 179,806 189,132

Inventories 5,172 5,663 5,077 5,377

Debtors 40,017 35,839 41,876 44,349



Curr. Liab. & Prov. 151,761 181,911 197,028 201,135

Net Curr. Assets 9,023 -21,105 -17,222 -12,003

Appl. of Funds 739,520 694,903 691,851 680,302


Wireless

Subs (m) 136 153 161 171

YoY (%) 33 13 5 6

Net adds per month (m) 2.77 1.4 0.7 0.8

YoY (%) 12 -48 -52 16

Total mobile traffic (b min) 375 399 426 446

YoY (%) 7 7 7 5

Avg. Rev Per User (INR/mon) 116 102 98 99

YoY (%) -28 -12 -4 1

Minutes of Use/Sub/Month 262 231 226 224

YoY (%) -21 -12 -2 -1

Wireless RPM (INR) 0.44 0.44 0.43 0.44

YoY (%) -8 0 -2 2

Wireless capex (INR b) 116 8 9 14

Wireless Capex/Sales (%) 70 5 5 7

E: MOSL Estimates

Ratios

Y/E March 2011 2012 2013E 2014E

Basic (INR)

EPS 7.2 4.8 3.7 6.0

Cash EPS 26.5 24.1 21.7 24.7

Book Value 177.3 157.9 158.6 164.3

DPS 0.6 0.3 0.3 0.3

Payout %(Incl.Div.Taxes) 9.0 6.5 9.1 5.6

Valuation (x)

P/E 11.6 15.2 9.4

Cash P/E 2.3 2.6 2.3

EV/EBITDA 7.3 6.9 6.1

EV/Sales 2.3 2.1 1.9




RoE 3.9 2.9 2.3 3.7

RoCE 2.9 2.7 2.9 3.4

Turnover Ratios


Asset Turnover (x) 0.32 0.30 0.32 0.34

Leverage Ratio



Y/E March 2011 2012 2013E 2014E



Interest Paid -10,723 -15,901 -21,033 -19,866

Direct Taxes Paid -117 1,062 -74 -250

(Inc)/Dec in Wkg. Cap. -120,718 -61,424 1,650 -5,220

CF from Op.Activity -67,522 -12,367 45,515 44,181

(inc)/Dec in FA + CWIP -53,752 -25,153 -30,266 -21,803

(Pur)/Sale of Investments 110 -141 -54 0



Inc/(Dec) in Debt 126,284 -4,579 -4,568 -23,239

Dividends Paid 2 2 2 2

Other Financing Activities -434 -246 478 861

CF from Fin.Activity 125,852 -4,823 -4,088 -22,376

Inc/(Dec) in Cash 4,687 -42,487 11,106 0


Closing Balance 53,272 10,785 21,891 21,891

August 27 - 31, 2012 136


Reliance Industries



Promoter 45.3 44.9 44.8

Dom. Inst. 11.1 10.6 10.7

Foreign 21.0 21.7 21.9

Others 22.6 22.8 22.6

Stock info

Bloomberg RIL IN


CMP (INR) 815

Mcap (USD b) 47.4

52-Wk Range (INR) 902 / 674

1, 6, 12 Rel Perf (%) 10 / 3 / 3

Company descriptionReliance Industries (RIL), a Fortune 500 company, is

India's largest private sector entity, with turnover of

USD66.8b and net profit of USD3.9b. Till recently, RIL

has reported consistently high CAGR in topline and

bottomline through backward integration in energy

chain (textiles, petchem, refining and E&P). It is now

trying to make its mark in new areas like retail and

telecom (owns BWA license).

Key investment arguments E&P (22% of FY12 EBIT) upside contingent on

government approvals: E&P segment growth is

limited in medium-term led by declining KG-D6

production and reserve downgrade by RIL/Niko.

Delays in approvals of development plans for

satellite fields in KG-D6 and NEC-25 is further adding

to uncertainty.

Refining (40% of FY12 EBIT) - global capacity closures

will boost margins: Unless significant refining

closures take place, GRM's are unlikey to increase

meaningfully in view of uncertain global economic

environment (particularly Europe) and declining

Light-Heavy differentials.

Petchem (38% of FY12 EBIT) - Margins seems to have

bottomed: While polymers margins seems to have

bottomed, recovery will be contingent on global

economic environment. On the polyester front,

cotton prices will act as a limiting factor for margins

in the short term.

Key challenges Declining KG-D6 production.

RoE accretive cash utilization.

Our estimates could be adversely affected by lower

than expected refining and petchem margins.

Key news flows / triggers to watch DGH approvals for its E&P program and update on

its KG-D6 ramp-up.

Margin trend in refining and petchem.

Developments on its USD12b capex plan on new

capacities.

Launch of its Broadband Wireless Access (BWA)

services.

1QFY13 highlights; guidance for FY13, FY14 RIL' 1QFY13 GRM stood at USD7.6/bbl, a premium of

USD0.9/bbl over Singapore led by expansion in Arab

L-H differential and increased premium for low

sulphur diesel.

Petchem EBIT margin at 8% was the lowest since

3QFY05 led by weak polyester and PP margins.

RIL plans to submit integrated revised field

development plan (FDP) for D1/D3 in 3QFY13.

RIL guides for 8-10% contribution at EBITDA level

from its shale gas business by 2015.




Change (%) 39.1 36.7 42.4 17.2 13.4 32.9 7.6

EBITDA 99 98 73 66 67 336 289

Change (%) 6.3 4.8 -23.7 -33.3 -32.0 -11.8 -13.9

EBITDA Margin (%) 12.3 12.5 8.6 7.7 7.3 10.2 8.2

Reported PAT 57 57 44 42 45 200 190

Adjusted PAT 57 57 44 42 45 200 190

Change (%) 16.7 15.8 -13.6 -21.2 -21.0 -1.2 236.2

PAT Margin (%) 7.0 7.3 5.2 5.0 4.9 6.1 5.4

Key Metrics

GRM (USD/bbl) 10.3 10.1 6.8 7.6 7.6 8.7 7.8

KG-D6 production (mmscmd) 49 45 41 35 33 43 28

Segmental EBIT Breakup

Refining 32 31 17 17 22 97 89

Petrochemicals 22 24 22 22 18 90 78

E&P, others 15 15 13 10 10 53 36

Total 69 70 51 48 49 239 203

E: MOSL Estimates

137August 27 - 31, 2012


Reliance Industries: Financials and valuation

Income Statement (INR Billion)

Y/E March 2011 2012 2013E 2014E

Net Sales 2,482 3,299 3,531 3,226

Change (%) 28.9 32.9 7.0 -8.6

EBITDA 381 336 289 322

% of Net Sales 15.4 10.2 8.2 10.0




PBT 252 258 239 266

Tax 50 57 49 60

Rate* (%) 19.6 22.2 20.3 22.6

PAT 203 200 190 206

Adj. PAT 203 200 190 206

Change (%) 24.9 -1.2 -5.0 8.2


Y/E March 2011 2012 2013E 2014E

Share Cap. (incl sh. Susp.) 33 33 32 32

Reserves 1483 1628 1765 1938

Net Worth 1,515 1,661 1,798 1,970

Total Loans 674 684 682 679

Deferred Tax 116 121 126 131


Gross Fixed Assets 2213 2055 2106 2166

Less: Depreciation 785 918 1018 1115

Net Fixed Assets 1,427 1,137 1,088 1,051

Capital WIP 128 78 179 293



Inventory 298 360 383 348

Debtors 174 184 189 173

Cash & Bank Balance 271 396 344 414

Loans&Adv.and Other CA 171 257 264 272


Liabi l i t ies 497 442 375 343


Net Current Assets 373 712 758 814



Exchange rate 46 48 54 52

Refining throughput (mmt) 67 68 69 66

Ref. cap. utilization (%) 107 109 111 107

RIL GRM 8.7 8.4 7.8 8.6

Singapore GRM 5.2 8.3 7.2 8.0

Premium 3.5 0.1 0.6 0.6

KG-D6 gas production* 56 43 28 22

*mmscmd

Ratios

Y/E March 2011 2012 2013E 2014E

Basic (INR)

EPS 62.0 61.3 58.7 63.5

Adj. EPS (ex Treasury) 68.4 67.7 64.9 70.2

Cash EPS 103.5 96.1 89.8 93.5

Adj. Book Value 511.2 560.7 613.2 671.5

DPS 8.0 8.5 8.9 9.3


Valuation (x)

P/E 13.2 13.3 13.9 12.8

Adj. P/E 11.9 12.0 12.6 11.6

Cash P/E 7.9 8.5 9.1 8.7

EV / EBITDA 7.7 7.9 9.2 8.1

EV / Sales 1.2 0.8 0.8 0.8

Adj. Price / Book Value 1.6 1.5 1.3 1.2

Dividend Yield (%) 1.0 1.0 1.1 1.1


RoE 14.8 13.0 11.2 11.1

RoCE 12.9 12.1 10.7 11.1

Turnover Ratios



Leverage Ratio

Net Debt / Equity (x) 0.2 0.0 0.0 0.0

Cash Flow Statement (INR Billion)

Y/E March 2011 2012 2013E 2014E



Interest /Other Income -3 -17 -50 -41


(Inc)/Dec in Wkg. Capital 1 -28 -98 14

Other op activities -38 -32 0 0

CF from Op. Activity 333 270 147 281

(Inc)/Dec in FA & CWIP -121 -80 -153 -175

(Pur)/Sale of Investments -141 62 -41 -42

Other In activities 59 -12 79 70

CF from Inv. Activity -203 -30 -114 -146

Change in Equity 2 -2 -24 0

Inc / (Dec) in Debt 30 -85 -32 -31

Dividends Paid -24 -28 -29 -34

CF from Fin. Activity 7 -115 -85 -65

Inc / ( Dec) in Cash 137 125 -52 70



August 27 - 31, 2012 138


Reliance Infrastructure



Promoter 48.6 48.6 48.1

Domestic Instn 21.3 21.2 21.0

Foreign 16.5 16.3 17.1

Others 13.6 14.0 13.8

Stock info

Bloomberg RELI IN


CMP (INR) 511

Mcap (USD b) 2.4

52-Wk Range (INR) 680 / 328

1, 6, 12 Rel Perf (%) -5 / -14 / 8

Company descriptionReliance Infrastructure is an infrastructure

conglomerate with presence in Roads, Urban Infra

(MRTS), Power (entire chain including Generation,

Transmission, Distribution), Real Estate, etc. The

company has in-house EPC capabilities developed over

period of time.

Key investment positives Regulatory approval 1) Renewal of Rinfra' Mumbai

region power distribution license for 25 years 2)

Recovery of past arrears of INR19b 3) Levy of Cross

subsidy surcharge, removes overhang on

distribution business of Rinfra.

EPC order book of INR156b (book to bill ratio of 1.3x),

provides revenue visibility for the segment.

RELI has invested INR40b in its infra portfolio of 25

infra projects aggregating around ~INR400b, of

which 7 road projects (590 km), 6 transmission line

(715km) are operational and is targeting to

commission another 3 Roads and 3 transmission lines

by FY13.

Net cash stands as at FY12 at INR44b coupled with

robust cash flows from existing operations and net

debt free status would enable the company to fund

equity contribution towards on-going/future

projects.

Key challenges Internal orders represent ~80% of EPC business

order book and R-Power contributes 90%+ of

internal order book, leading to concentration.

Sectoral caps/group exposure norms have impacted

funding to various power/infrastructure projects.

Successful financial closure for major projects under

development is important for timely

implementation.

Key news flows / triggers to watch MERC has approved recovery of prior period tariff

arrears (Including cross subsidy surcharge) of

INR23b. Recovery is to start from 1QFY13.

Firm gas allocation for Dadri/other gas based

projects from EGoM will provide visibility on gas

based generation projects of R-Power.

Operational performance of infra projects in FY13

1QFY13 highlights; guidance for FY13, FY14 Reliance Infra 1QFY13 PAT boosted by higher

revenue and margin under EPC segment.

EBIT contribution from Infra segment stood positive

at INR364m (v/s loss of INR55m YoY) in 1QFY13.

As at FY12, equity investment in various

infrastructure SPV's stand at INR43.6b and INR12b

outstanding equity is expected to be infused in near

term.




Change (%) 64.3 62.0 69.8 148.1 -12.7 85.3 -18.6

EBITDA 6,961 7,096 6,518 6,173 4,598 26,748 15,003

Change (%) 174.7 70.5 144.1 156.1 -35.2 127.1 -43.9

EBITDA Margin (%) 19.0 18.0 14.6 10.8 13.3 15.0 10.3

Reported PAT 4,305 4,957 4,158 6,581 3,270 20,002 10,486

Adjusted PAT 2,874 4,903 4,057 6,478 3,270 19,621 10,486

Change (%) 16.7 122.4 118.6 56.6 -33.3 84.1 -46.6

PAT Margin (%) 7.9 12.4 9.1 11.3 9.5 11.0 7.2


EPC Order Book (INR b)280 243 212 173 156 173 223

EPC Revenue (INR b) 19 24 30 44 18 117 69

EPC margins (%) 20 23 17 11 17 17 7

E: MOSL Estimates

139August 27 - 31, 2012


Reliance Infrastructure: Financials and valuation


Y/E March 2011 2012 2013E 2014E

Sales 58,062 56,140 77,013 85,275

Other Operating Income 38,084 122,065 86,500 66,940

Total Revenues 96,146 178,205 163,513 152,215

Change (%) -4.1 85.3 -8.2 -6.9

EBITDA 11,777 26,748 20,087 18,075


Depreciation 3,134 2,678 4,452 3,982

Interest 2,424 4,466 7,579 4,377

Other Income 5,132 5,372 6,698 7,123

PBT 11,351 24,977 14,755 16,838

Tax 541 4,975 3,085 3,521

Rate (%) 4.8 19.9 20.9 20.9

Reported PAT 10,810 20,002 11,669 13,318

Change (%) 1.8 85.0 -41.7 14.1

Adj. PAT 10,810 19,621 11,669 13,318

Change (%) 1.8 81.5 -40.5 14.1


Y/E March 2011 2012 2013E 2014E

Share Capital 2,675 2,675 2,675 2,675

Reserves 169,182 187,379 197,243 208,755

Net Worth 171,857 190,053 199,917 211,430

Loans 39,692 51,792 55,642 58,967

Consumer's Security Depos. 0 -45 -90 -134

Deferred Tax Liability 990 990 1,440 1,890



Less: Dep & Reval. Res. -47,896 -50,573 -55,025 -59,007

Net Fixed Assets 57,242 62,814 63,863 64,630

Capital WIP 6,493 5,644 3,500 0

Investments 125,841 130,570 130,620 130,670

Curr. Assets 160,940 234,924 231,711 229,935

Inventory 2,903 2,700 2,700 2,700

Debtors 27,931 28,769 29,632 30,521


Loans & Advances 108,713 83,888 76,976 72,565




Provisions 12,862 12,604 12,352 12,105


Misc Expenses - 1 2 2



Y/E March 2011 2012 2013E 2014E

EPC Order Book (INR b) 246.25 172.8 222.8 272.8

EPC Revenue (INR b) 57.6 60.35 25.6 12.8

EPC EBITDA Margins (%) 13.0 22.9 10.3 10.0

Ratios

Y/E March 2011 2012 2013E 2014E

Basic (INR)

EPS 40.4 73.4 43.6 49.8

EPS (Fully Diluted) 40.4 73.4 43.6 49.8

CEPS (INR) 52.1 83.4 60.3 64.7

Book Value 642.5 710.6 747.4 790.5

DPS 6.0 6.0 6.0 6.0


Valuation (x)

P/E 7.0 11.7 10.3

EV/EBITDA 1.0 1.5 1.8

EV/Sales 0.1 0.2 0.2




RoE 6.8 11.1 6.0 6.5

RoCE 7.1 13.3 9.1 8.1

Turnover Ratios




Leverage Ratio

Debt/Equity (x) 0.3 0.2 0.3 0.3


Y/E March 2011 2012 2013E 2014E



Less : Direct Taxes Pd 541 4,975 2,635 3,071

(Inc)/Dec in WC 48,907 72,992 -8,788 -10,454


(Inc)/dec in FA -31,864 -7,402 -3,356 -1,250

(Pur)/Sale of Investmnts-43,566 -4,729 -50 -50


(Inc)/Dec in ShareCapital and reserves 16,288 0 0 0

(Inc)/Dec in Debt -3,225 5,775 3,850 3,325

(Inc)/Dec in CustomerSecurity Deposits 0 -45 -45 -45

Dividend Paid -1,805 -1,805 -1,805 -1,805

Others 2,014 -442 0 0


Inc/Dec of Cash 692 87,023 6,377 7,470


Closing Balance 3,710 90,734 97,111 104,582

August 27 - 31, 2012 140


Rural Electrification Corporation



Promoter 66.8 66.8 66.8

Dome. Inst. 6.1 6.4 5.2

Foreign 20.2 19.6 19.1

Others 7.0 7.2 8.9

Stock info

Bloomberg RECL IN


CMP (INR) 211

Mcap (USD b) 3.7

52-Wk Range (INR) 251 / 142

1, 6, 12 Rel Perf (%) 6 / -12 / 11

Company descriptionRural Electrification Corporation (RECL) is a Navratna

Central Public Sector Enterprise under Ministry of Power

providing financial support to promote rural

electrification projects all over the country. As on June

2012, RECL had an outstanding loanbook of over INR1t

and sanctions pipeline of ~INR1.4 t.

Key investment positives Despite macroeconomic slowdown, RECL has been

able to grow its loan book by 24% YoY and 5% QoQ in

1QFY13 led by strong sanctions pipeline (~INR1.4t

as on June 2012). While the current uncertain macro

environment may put questions over existing

sanctions getting converted into disbursements,

corrective measures by the government and its

thrust on infrastructure development could boost

growth.

RECL has demonstrated excellent asset liability

management skills over the past few quarters, which

has resulted into strong margin performance. For

FY12, RECL recorded margin of 4.3%+, much higher

than its peers. With wholesale rates already starting

to cool off, we expect margins to remain steady at

current levels.

Despite higher exposure to state utilities, RECL's

asset quality has remained relatively healthy.

Currently, the stock offers a healthy dividend yield

of ~5%, even after factoring in dividend payout of

25% v/s average ~30% payout historically.

Key challenges Continued policy paralysis could lead to slowdown

in growth as the current sanctions pipeline may not

get converted into disbursements.

With increasing share of private players and higher

share of loans to SEBs the asset quality risks remain

high.

Key news flows / triggers to watch The final guidelines on SEB loan restructuring for

banks and IFCs will be crucial in determining the

asset quality impact for RECL.

RECL has submitted its roadmap to the RBI to adopt

the standard NBFC regulations by March 2013.

Approval of the same will decide, the impact of

standard asset provisioning on RECL's earnings from

FY14 onwards.

1QFY13 highlights; guidance for FY13, FY14 RECL's 1QFY13 performance was much above

expectations led by strong topline performance

(driven by better than expected margins), higher

other income and NIL provisions during the quarter.

Loans grew strongly by 24% YoY and 5% QoQ; while

margins improved by 27bp QoQ leading to positive

surprise on the topline front.

For FY13, management expects loan growth in the

region of 20-25%.

On the asset quality front, management continues

to remain cautious as the macro environment

remains challenging.


Y/E March (INR m) Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 FY12 FY13E


YoY Gr. (%) 17.3 21.8 18.5 19.5 28.1 19.3 21.7


YoY Gr. (%) 16.1 -0.3 17.9 8.6 28.0 10.6 22.4

Provisions 250 0 241 32 0 523 750

Profit After Tax 6,619 6,225 7,695 7,627 8,767 28,173 34,275

YoY Gr. (%) 12.7 0.7 15.9 8.9 32.5 9.6 21.7

Adj. PAT 6,672 7,166 7,054 7,675 9,046 28,566 34,935

YoY Gr. (%) 13.5 19.8 6.5 16.5 35.6 14.0 22.3


Loan Growth (%) 24.0 24.0 25.4 24.1 24.3 23.4 19.8

NIM (%; calc.) 4.3 4.3 4.3 4.2 4.5 4.2 4.2

GNPA (%) 0.3 0.3 0.5 0.5 0.5 0.5 0.8

E: MOSL Estimates

141August 27 - 31, 2012


Rural Electric Corporation: Financials and valuation


Y/E March 2011 2012 2013E 2014E

Interest on Loans 81,088 102,640 124,696 145,802


Net Financing Income 32,578 38,850 47,271 56,833

Change (%) 28.8 19.3 21.7 20.2

Other Operating Income 1,481 741 1,481 1,778

Other Income 2,384 1,189 841 976

Net Income 36,443 40,780 49,592 59,586

Change (%) 29.8 11.9 21.6 20.2

Employee Cost 1,275 1,710 1,795 2,064

Administrative Exp 337 370 426 490

Other Operating Exp. 66 246 303 363


Change (%) 31.5 10.6 22.4 20.4

Total Provisions 2 523 750 1,000

% to Operating Income 0.0 1.4 1.6 1.8

PBT 34,763 37,931 46,318 55,669

Prior Period Adjustments -32 0 0 0

PBT(post prior period adj) 34,731 37,931 46,318 55,669

Tax (Incl Deferred tax) 9,067 9,758 12,043 14,474

Tax Rate (%) 26.1 25.7 26.0 26.0

PAT 25,664 28,173 34,275 41,195

Change (%) 28.5 9.8 21.7 20.2

PAT (Incl DTL) 25,610 28,200 34,275 41,195

Change (%) 28.2 10.1 21.5 20.2



Y/E March 2011 2012 2013E 2014E

Capital 9,875 9,875 9,875 9,875


Net Worth 127,758 147,349 169,594 196,329

Borrowings 700,038 899,680 1,044,146 1,232,655

Change (%) 25.1 28.5 16.1 18.1

Total Liabilities 827,797 1,047,029 1,213,740 1,428,985

Investments 8,124 7,580 7,959 8,357

Change (%) -10.7 -6.7 5.0 5.0

Loans 821,321 1,013,620 1,214,123 1,433,320

Change (%) 23.6 23.4 19.8 18.1


Net current assets -2,529 25,049 -9,207 -13,582

Total Assets 827,797 1,047,029 1,213,740 1,428,985

Ratios

Y/E March 2011 2012 2013E 2014E


Avg.Yield-on FinancingPortfolio 10.9 11.2 11.2 11.0

Avg Cost of Funds 7.6 7.9 7.8 7.7




RoE 21.5 20.5 21.6 22.5

RoA 3.4 3.0 3.0 3.1




Empl. Cost/Op. Exps. 76.0 73.5 71.1 70.8



Debt/Equity Ratio 5.5 6.1 6.2 6.3

Valuations

Book Value (INR) 129.4 149.2 171.7 198.8

Price-BV (x) 1.4 1.2 1.1

OPS (INR) 35.2 38.9 47.7 41.7

Price-OP (x) 5.4 4.4 5.1

EPS (INR) 25.9 28.6 34.7 41.7

EPS Growth (%) 28.2 10.1 21.5 20.2


Dividend 7.5 7.5 10.4 12.5


August 27 - 31, 2012 142


Shoppers Stop



Promoter 67.8 67.9 68.2

Dom. Inst. 9.5 6.5 6.6

Foreign 9.8 13.7 13.2

Others 12.9 12.0 12.1

Stock info

Bloomberg SHOP IN


CMP (INR) 365

Mcap (USD b) 0.5

52-Wk Range (INR) 427 / 251

1, 6, 12 Rel Perf (%) -2 / 11 / -11




change (%) 14.4 14.9 9.9 18.5 13.6 16.3 30.3

EBITDA 263 387 414 363 138 1,427 1,816

Change (%) 5.2 1.4 -19.7 -2.8 -47.7 -6.2 27.3

EBITDA Margin (%) 6.7 7.8 8.2 6.7 3.1 7.4 7.2

Reported PAT 117 195 193 137 12 12 220

Adjusted PAT 117 195 193 137 12 12 220

Change (%) 17.2 12.5 -30.8 -31.0 -89.4 -89.4 12.6

PAT Margin (%) 3.0 3.9 3.8 2.5 0.3 0.1 0.9


LTL Sales Gr % 7.0 11.0 -1.3 10.0 1.0 7.0 10.0

Deptt Stores 41 43 49 51 52 51 60

E: MOSL Estimates

Company descriptionShoppers Stop is positioned as premium retailer in India

having 139 stores in 19 cities with an area of 3.7m sqft

across formats. Major retail formats include

Departmental stores (Shoppers Stop), Hypermart

(Hypercity), Books (Crossword), Specialty (Mac, Estee

Lauder and Clinique) and Home Retailing (Home Stop).

It is promoted by CL Raheja group, one of the largest

real estate groups in India.

Key investment positives Shoppers Stop is a play on rising consumer

discretionary spends, with its lifestyle positioning

and growing presence across formats.

With current area of 3.2m sqft across 52 stores, it

plans to expand by increasing its departmental store

count to 60.

It provides an opportunity to participate in

Hypermart format and benefit from FDI in retail due

to its 51% stake in Hypercity Retail.

Key challenges Increase in apparel prices as well as initial signs of

slower off-take in consumer discretionary formats

have impacted LTL volume growth and margins.

With increasing losses in Hypercity (INR214m in

1QFY13), lower internal cash generation and faster

expansions could burden the balance sheet.

Key news flows / triggers to watch With FDI in retail likely in the near future, funding

options for Hypercity as well as other specialty

formats could open up.

LTL growth and margin trends over next few

quarters.

Sales trend in Tier2/3 stores of Hypercity and EBIDTA

level breakeven.

1QFY13 highlights; guidance for FY13, FY14 LTL sales growth of 1% due to weak economic

outlook. LTL volumes declined 4% as against 1%

growth in 1QFY13.

Hypercity Retail (51% stake) reported sales of

INR1.9b (INR1.6b in 4QFY12). LTL sales growth

improved to 7% but LTL volumes fell 7%. Net loss

declined marginally from INR217m to INR214m.

We expect margins for FY12-13 to remain under

pressure due to 1) weak consumer demand,

2) higher apparel prices affecting volumes, 3) rising

wage costs due to high inflation, and 3) increase in

overheads due to new store openings. Margin

recovery is likely only in FY14.

143August 27 - 31, 2012


Shoppers Stop: Financials and valuation


Y/E March 2011 2012 2013E 2014E

Net Revenues 17,120 19,024 25,148 29,943

Change (%) 22.2 11.1 32.2 19.1

Other Income - Recurring 241 277 343 394


EBITDA 1,521 1,427 1,816 2,276

Change (%) 43.0 -6.2 27.3 25.3

Margin (%) 8.9 7.5 7.2 7.6



Non-operational Income 72 178 159 160

Profit before Taxes 1,138 978 1,218 1,661

Change (%) 98.9 -14.0 24.5 36.4

Margin (%) 6.6 5.1 4.8 5.5

Tax 387 335 402 548

Tax Rate (%) 34.0 34.3 33.0 33.0

Profit after Taxes 751 643 816 1,113

Change (%) 79.9 -14.5 26.9 36.4

Margin (%) 4.4 3.4 3.2 3.7

Exceptionals 1 0 0 0

Reported PAT 752 643 816 1,113


Y/E March 2011 2012 2013E 2014E


Reserves 5,570 6,078 6,751 7,668

Net Worth 5,981 6,489 7,162 8,079

Loans 1,487 3,062 2,765 2,260

Deferred Tax -33 0 0 0


Gross Block 5,056 6,649 7,691 8,669

Less: Accum. Depn. 1,935 2,310 2,768 3,292

Net Fixed Assets 3,121 4,339 4,923 5,377

Capital WIP 446 250 250 250

Property Lease Deposit 1,068 1,352 1,516 1,664

Investments 2,372 2,550 2,652 2,958

Curr. Assets, L&A 3,428 4,537 5,092 5,469

Inventory 1,511 2,050 2,408 2,643

Account Receivables 160 158 181 212







Net Current Assets 428 1,060 586 89



Number of Stores 38 51 60 68

Gross Margin 31.4 31.6 31.5 31.5

E: MOSL Estimates

Ratios

Y/E March 2011 2012 2013E 2014E

Basic (INR)

EPS 9.1 7.8 9.9 13.5

Cash EPS 12.9 12.4 15.5 19.9

BV/Share 72.8 79.0 87.2 98.3

DPS 0.8 1.2 1.5 2.0

Payout % 8.2 14.9 15.0 15.0

Valuation (x)

P/E 46.7 36.8 27.0

Cash P/E 29.4 23.5 18.3

EV/Sales 1.6 1.2 1.0

EV/EBITDA 21.2 16.5 12.8

P/BV 4.6 4.2 3.7


Return Ratios (%)

RoE 12.6 9.9 11.4 13.8

RoCE 16.3 11.0 13.7 16.9

RoCE Adjusted for Inv 23.9 15.0 18.7 23.7




Leverage Ratio

Debt/Equity (x) 0.2 0.5 0.4 0.3


Y/E March 2011 2012 2013E 2014E

Profit before tax 1,138 978 1,218 1,661

Add : Depreciation 68 375 459 524

Interest 145 250 299 251

Direct Taxes Paid 387 335 402 548

Incr in WC 613 463 -499 -434

Ch In DFA 13 33 0 0

Extra-ordinay Income 1 0 0 0

CF from Operations 366 772 2,072 2,322

Incr in FA 650 1,396 1,042 978

Investments 1,175 179 102 306

CF from Invest. 1,825 1,574 1,144 1,284

Incraese in networth 2,210 -23 0 0

Increase In debt -506 1,575 -297 -505



Others -34 -219 -164 -149

CF from Fin. Activity 1,455 971 -903 -1,101

Incr/Decr of Cash -4 168 25 -63



August 27 - 31, 2012 144


Shriram Transport Finance



Promoter 46.2 45.6 41.3

Dom. Inst. 2.0 2.4 2.2

Foreign 40.2 39.4 42.6

Others 11.6 12.5 14.0

Stock info

Bloomberg SHTF IN


CMP (INR) 594

Mcap (USD b) 2.4

52-Wk Range (INR) 707 / 416

1, 6, 12 Rel Perf (%) 5 / 6 / -9



Net Inc. (Incl. Secur) 7,821 8,347 8,038 8,056 8,025 31,707 34,093

YoY Growth (%) 16.0 19.3 4.5 5.4 2.6 9.5 7.5


YoY Growth (%) 18.3 20.4 5.5 4.1 2.5 13.0 5.8

Provisions 1,420 2,363 1,920 1,918 2,026 7,683 7,963

Profit before Tax 5,200 4,454 4,545 4,610 4,761 18,809 20,062

Tax Provisions 1,727 1,460 1,518 1,530 1,543 6,235 6,520

Net Profit 3,473 2,994 3,027 3,081 3,219 12,574 13,542

YoY Growth (%) 20.2 0.2 0.4 -9.6 -7.3 4.5 7.7


AUM Growth (%) 22.3 19.9 16.2 11.1 13.3 11.1 15.5

Sec. Inc./Net Inc.(%) 62.3 56.1 59.1 62.0 61.0 58.8 52.8

GNPA (%) 2.7 2.7 2.8 3.1 3.0 3.1 3.2

E: MOSL Estimates

Company descriptionShriram Transport Finance (SHTF) is strategically well

placed in the niche CV financing market with over three

decades of experience. After developing a strong

presence in the CV financing space, SHTF has diversified

into the construction equipment financing business. It

has an evenly distributed pan-India network of 513

branch offices and an employee base of over 14,000

people. SHTF has well established and time tested

procedures for valuation of assets, loan generation and

collection. As of 1QFY13, it had AUM worth INR419b.

Over FY09-12, SHTF posted AUM CAGR of 20% and profit

CAGR of 27%.

Key investment positives SHTF's business model is unique with high entry

barriers and is difficult to replicate. This has enabled

SHTF to sustain superior return ratios with RoAs (on

AUMs) of over 2.5% and RoEs in excess of 20% over

a period of time.

On back of significant moderation in macroeconomic

activities and higher competitive pressures SHTF

moderated its AUM growth to 11% in FY12 vs ~35%

CAGR over FY06-11. We believe SHTF will be

relatively better placed in terms of assets quality vs

peers which have grown this portfolio aggressively

during the uncertain times.

While certain state specific issues led to periodic

spike in GNPA, overall delinquency ratio remained

under control. NNPA ratio remains under control at

~60bp and it has healthy PCR of 80%.

Expected moderation in interest rates, coupled with

abating regulatory headwinds will be positive for

monoline financers like SHTF.

Key challenges Continued moderation in economic growth can

lead to a prolonged period of moderation in AUM

growth.

Tighter securitization norms could affect margins.

Proposed changes in asset classification and

provisioning norms for NBFCs could lead to higher

stress on earnings and reported asset quality.

Moderating freight intake and fall in freight rates

will lead to higher pressure on asset quality

Key news flows / triggers to watch RBI guidelines on NBFC regulations

Comments by banks on CV portfolio growth and

asset quality

1QFY13 highlights; guidance for FY13, FY14 Performance highlights of 1QFY13: AUM growth of

13% YoY and 4% QoQ; No securitization during the

quarter, Share of On books AUM at 61% vs 55% a

quarter ago, NIMs improved ~20bp QoQ to 7.4% and

GNPA stable QoQ at ~3%.

Guidance for FY13: 10-15% AUM growth, NIM

between 7-8%, Asset quality to be stable from

hereon.

145August 27 - 31, 2012


Shriram Transport Finance: Financials and valuation


Y/E March 2011 2012 2013E 2014E

Financing Income 36,165 35,581 42,325 58,246

Finanancing charges 22,154 23,950 27,379 35,993

Net Financing income 14,011 11,632 14,946 22,253

Change (%) -4.8 -17.0 28.5 48.9

Inc. from securitisation 14,943 20,075 19,147 16,684

Net Income (Incl Secur) 28,954 31,707 34,093 38,937

Change (%) 34.5 9.5 7.5 14.2

Other Income 1,725 2,423 2,181 2,508

Net Income 30,680 34,130 36,273 41,445

Change (%) 36.4 11.2 6.3 14.3

Employee Cost 3,582 3,701 4,163 4,475

Brokerage & Commission 752 662 662 729

Other Operating Exp. 2,892 3,275 3,422 3,612


Change (%) 35.5 13.0 5.8 16.4

Total Provisions 5,235 7,683 7,963 9,029

% to operating income 22.3 29.0 28.4 27.7

PBT 18,219 18,809 20,062 23,600

Tax 6,190 6,235 6,520 7,670

Tax Rate (%) 34.0 33.1 32.5 32.5

PAT 12,028 12,574 13,542 15,930

Change (%) 37.8 4.5 7.7 17.6



Y/E March 2011 2012 2013E 2014E

Capital 2,262 2,263 2,263 2,263


Net Worth 49,008 59,923 71,564 85,257

Borrowings 198,743 231,219 330,407 427,337

Change (%) 7.7 16.3 42.9 29.3

Other Liabilities & Prov. 35 22 22 22


Investments 36,453 39,544 43,499 47,849

Change (%) 96.4 8.5 10.0 10.0

Loans 194,740 214,378 309,391 389,341

Change (%) 8.3 10.1 44.3 25.8



Total Assets 247,787 291,164 401,993 512,617

Ratios

Y/E March 2011 2012 2013E 2014E


Avg. Yield-on Fin. portfolio 18.7 16.8 15.7 16.3

Avg Cost of funds 11.6 11.1 9.8 9.5

Int Spread on Fin.portfolio 7.1 5.7 5.9 6.8

NIM (incl Securitisation) 8.9 8.3 7.9 7.8

NIM (Excl Securitisation) 7.5 5.7 5.7 6.4


RoE 27.5 23.1 20.6 20.3

RoA on AUM 3.2 2.8 2.6 2.6





Empl. Cost/Op. Exps. 49.6 48.5 50.5 50.8



Leverage (x) 5.1 4.9 5.6 6.0

Valuations

Book Value (INR) 216.7 264.8 316.2 376.7

BV Growth (%) 27.4 22.2 19.4 19.1

Price-BV (x) 2.2 1.9 1.6

Adjusted BV (INR) 215.5 263.3 313.5 373.1

Price-ABV (x) 2.3 1.9 1.6

OPS (INR) 103.7 117.1 123.8 144.2

OPS Growth (%) 35.1 12.9 5.8 16.4

Price-OP (x) 5.1 4.8 4.1

EPS (INR) 53.2 55.6 59.8 70.4

EPS Growth (%) 37.4 4.5 7.7 17.6


Dividend 6.5 6.5 7.2 8.4


August 27 - 31, 2012 146


Company descriptionIncorporated in 1924, Simplex Infrastructures is the

largest pure play civil construction and engineering

contractors in India, with more than eight decades of

successful operations and completion of over 2500

projects in India and abroad. Simplex Infrastructures

has a presence across various construction verticals,

which include piling, industrial plants, power plants,

urban infrastructure and utilities, etc

Key investment positives Order backlog as at the end of June 2012 stood at

INR155b, in addition to the L1 of INR11.8b. Current

order book has 82% variable priced contracts and

18% fixed price contracts.

SINF has a diversified business, with presence across

the infrastructure sector. It derives ~10% of the

order book from the Middle East, Asia and Africa,

and thus diversifying the geography mix. Private

sector orders, where payment terms are better,

constitute 60%+ of its order book.

Key challenges In FY12, order intake was INR64.4b v/s INR80b in

FY11. BTB has declined from 3x in 4QFY11 to ~2.5x.

This could impact near-term revenue growth.

Simplex Infrastructure



Promoter 55.0 55.0 54.7

Dom. Inst. 19.7 18.9 20.6

Foreign 13.8 14.4 13.0

Others 11.6 11.8 11.7

Stock info

Bloomberg SINF IN


CMP (INR) 207

Mcap (USD b) 0.2

52-Wk Range (INR) 290 / 157

1, 6, 12 Rel Perf (%) -11 / -11 / -34




Change (%) 7.7 25.5 36.6 30.6 25.4 23.8

EBITDA 1,202 1,190 1,294 1,483 1,270 4,678

Change (%) 0.1 12.6 20.3 7.9 5.7 (0.6)

EBITDA Margin (%) 9.5 9.0 8.1 8.3 8.0 7.9

Reported PAT 241 179 180 292 201 892

Adjusted PAT 241 179 180 292 201 892

Change (%) (33.6) (33.5) (22.3) (21.0) (16.5) (27.6)

PAT Margin (%) 1.9 1.3 1.1 1.6 1.3 1.5


Order book (INR b) 143 150 144 152 155 152

BTB (x) 3.0 2.9 2.6 2.5 2.5 2.5

Order intake (INR b) 9 19 10 26 19 64

E: MOSL Estimates

Indian infrastructure and industrial capex is passing

through a challenging phase given tight liquidity

condition and structural constraints like land,

resources, etc. This has impacted the opportunity

pie in the interim period.

Key news flows / triggers to watch Simplex has recently forayed in to the road BOT

projects; and the company now has a portfolio of

three projects.

Simplex has entered into joint-venture with

Gammon Infra for two projects - Vijaywada to

Gundugolanu (Ph V) and Mahulia to Kharagpur (Ph

III). Simplex would have 49-51% stake and would

be carrying out large parts of the EPC work for these

two projects.

1QFY13 highlights; guidance for FY13, FY14 Simplex reported revenue growth of 28% YoY, and

EBITDA increase of 19% YoY. Interest cost increased

from INR502m to INR695m YoY, impacting the

reported profitability. Debt stood at INR24b (up

from INR21b) in March 2012.

Management expects revenues to increase by 10-

15% in FY13.

147August 27 - 31, 2012


Simplex Infrastructure: Financials and valuation


Y/E March 2010 2011 2012

Net Sales 44,427 47,497 59,068

Change (%) -4.7 6.9 24.4

Materials Consumed 38,224 41,115 53,638

Other Admin. Exp. 1,873 1,801 751

EBITDA 4,330 4,581 4,679

% of Net Sales 9.7 9.6 7.9

Depreciation 1,534 1,608 1,143

Interest 1,112 1,308 2,303

Other Income 227 289 100

PBT 1,911 1,954 1,333

Tax 685 722 441

Rate (%) 35.8 37.0 33.1

Reported PAT 1,227 1,232 892

Adjusted PAT 1,227 1,232 892

Change (%) -6.9 0.4 -27.6


Y/E March 2010 2011 2012

Share Capital 99 99 99

Reserves 9,597 10,677 11,971

Net Worth 9,696 10,777 12,070

Loans 13,024 16,606 20,932

Deffered Tax Liability 883 1,381 1,944

Capital Employed 23,604 28,764 34,945

Gross Fixed Assets 12,509 14,764 17,420

Less: Depreciation 2,832 3,715 4,805

Net Fixed Assets 9,677 11,049 12,615

Capital WIP 187 275 444

Investments 277 492 783

Curr. Assets 30,598 36,847 48,478

Inventory 6,593 7,978 8,682

Debtors 17,928 22,834 16,788

Cash & Bank Balance 873 795 428

Loans & Advances 3,868 3,833 6,102

Other Current Assets 1,337 1,408 16,478

Current Liab. & Prov. 17,135 19,899 27,419

Creditors 17,020 19,770 27,188

Provisions 115 129 231

Net Current Assets 13,463 16,948 21,058

Application of Funds 23,604 28,764 34,945

Key Operational Metric

Order Book (INR b) 115 147 152

BTB (x) 2.6 3.1 2.6

Order Intake (INR b) 59 80 64

E: MOSL Estimates

Ratios

Y/E March 2010 2011 2012

Basic (INR)

Adjusted EPS 24.8 24.8 18.0

Growth (%) -6.9 0.1 -27.3

Cash EPS 55.8 57.2 41.1

Book Value 196.0 217.1 243.0

DPS 1.9 1.9 1.4

Payout (incl. Div. Tax.) 9.4 9.0 9.1

Valuation (x)

P/E (standalone) 9.0 12.4

Cash P/E 3.9 5.4

EV/EBITDA 5.9 6.7

EV/Sales 0.6 0.5

Price/Book Value 1.0 0.9

Dividend Yield (%) 0.9 0.6


RoE 13.1 12.0 7.8

RoCE 13.3 12.5 11.4

Turnover Ratios

Debtors (Days) 147 175 160

Inventory (Days) 54 61 58

Creditors. (Days) 99 103 88

Asset Turnover (x) 2.0 1.8 1.9

Leverage Ratio

Debt/Equity (x) 1.3 1.5 1.7


Y/E March 2010 2011 2012

PBT before Extraordinary Items 1,911 1,954 1,333

Add: Depreciation 1,534 1,608 1,143

Interest 1,112 1,308 2,303

Less: Direct Taxes Paid 685 722 441

(Inc)/Dec in WC -2,140 -3,563 -4,477

CF from Operations 1,733 584 -139

(Inc)/Dec in FA -1,244 -3,069 -2,878

(Pur)/Sale of Investments -76 -215 -291

CF from Investments -1,321 -3,283 -3,169

(Inc)/Dec in Networth -133 457 991

(Inc)/Dec in Debt 819 3,582 4,333

Less: Interest Paid 1,112 1,308 2,303

Dividend Paid 115 110 81

CF from Fin. Activity -541 2,621 2,939

Inc/Dec of Cash -129 -78 -368

Add: Beginning Balance 1,002 873 795

Closing Balance 873 795 426

August 27 - 31, 2012 148


State Bank of India



Promoter 61.6 61.6 59.4

Dom. Inst. 17.3 17.1 17.4

Foreign 11.2 11.4 13.9

Others 10.0 9.9 9.3

Stock info

Bloomberg SBIN IN


CMP (INR) 1,896

Mcap (USD b) 22.8

52-Wk Range (INR) 2475 / 1576

1, 6, 12 Rel Perf (%) -17 / -18 / -18

Company descriptionState Bank of India (SBIN) is India's largest commercial

bank, with a standalone balance sheet size of over

INR14t+ and government of India ownership of ~62%.

The bank has strong liability franchises with 14,100+

owned branches (standalone), and 19,200+ branches

(group). SBIN along with its associate banks has ~25%

market share in India.

Key investment positives SBIN's branch expansion, technological

advancement and marketing efforts led to strong

CASA CAGR of ~17% over FY02-12. The power of its

liability franchise can be seen from its strong and

improving CASA ratio of ~46% of which 80%+ are

from highly granular Savings accounts deposits.

Over the last two years, SBIN has reported

significantly higher net slippages as compared to

peers, leading to the perception of higher asset

quality issues. While reported net slippages have

been higher, restructured loans as a percentage of

overall loans are one of the lowest among public

sector banks (PSBs). Thus, SBIN outstanding net

stress loans stands at 5.5% of loans vs PNB of 9.8%,

BOI of 8.4% and BOB 6.9%

Healthy NIM of 3.5%+, higher fee income

contribution as a proportion of average assets,

control over opex, and absence of one-offs will help

SBIN to post ROA of 1%+. Operating leverage

remains one of the key factor for RoA improvement.

Key challenges Considering significant stress in the macroeconomic

environment, higher exposure to SME and mid

corporate segment, bad monsoon etc asset quality

is likely to remain under pressure

Moderating top line growth with lower loan growth

and moderation in margins and higher credit cost

posses the threat to earnings growth.

Provisioning related to wage negotiation to start

from November 2012.

Key news flows / triggers to watch One of the biggest beneficiaries of upturn in

macroeconomic environment. Any concentrated

effort by Government to get rid of policy paralysis

and boost investment climate will be a key trigger

for SBIN

Expected merger of one of associate bank with itself

in FY13

1QFY13 highlights; guidance for FY13, FY14 Guidance for FY13: Loan growth of 18-20%, Margins

of 3.75%, opex growth of less than 10% and

containing NNPA at 1.8%.

Performance highlights of 1QFY13: (a) Significantly

higher slippages of INR108b led by SME, Mid-

corporate and Agri segment (b) fall in standard

restructured loans by INR15b (c) Higher slippages

led to sharp margin contraction of ~ 30bp QoQ (d)

fee income growth disappointed (e) continued

healthy traction in SA mobilization (+8% QoQ)



Net Int. Income 96,995 104,817 115,188 115,911 111,189 432,911 470,781

% Change (YoY) 32.8 29.2 27.3 43.8 14.6 33.1 8.7

Other Income 35,342 33,674 20,730 53,768 34,988 143,514 175,713

Operating Exp. 59,913 63,749 63,318 73,710 64,410 260,690 289,091


% Change (YoY) 18.1 17.6 7.3 57.8 12.9 24.6 13.2


Net Profit 15,835 28,104 32,630 40,503 37,516 117,073 147,230

% Change (YoY) -45.7 12.4 15.4 N.A. 136.9 41.7 25.8


NIM (%) 3.6 3.8 4.1 3.9 3.6 3.9 3.6

Loan Growth (%) 18.0 16.1 16.5 14.7 18.9 14.7 20.0

Gross NPA (%) 3.5 4.2 4.6 4.4 5.0 4.4 5.9

E: MOSL Estimates

149August 27 - 31, 2012


State Bank of India: Financials and valuation

Income Statement (Standalone) (INR Billion)

Y/E March 2011 2012 2013E 2014E

Interest Income 814 1,065 1,204 1,376

Interest Expense 489 632 733 835

Net Interest Income 325 433 471 541

Change (%) 37.4 33.1 8.7 14.9

Non Interest Income 158 144 176 200

Net Income 484 576 646 741

Change (%) 25.1 19.2 12.2 14.7

Operating Expenses 230 261 289 325

Pre Provision Profits 253 316 357 417

Change (%) 38.3 24.6 13.2 16.6

Provisions (excl tax) 104 131 133 152

PBT 150 185 225 265

Tax 67 68 78 91

Tax Rate (%) 44.7 36.7 34.5 34.5

PAT 83 117 147 174

Change (%) -9.8 41.7 25.8 17.9

Consolidated PAT post MI 107 153 185 221

Change (%) -8.9 43.6 20.6 19.5



Y/E March 2011 2012 2013E 2014E


Reserves & Surplus 644 833 946 1,080

Net Worth 650 840 953 1,086

Deposits 9,339 10,436 12,524 15,029

Change (%) 16.1 11.7 20.0 20.0

of which CASA Dep 4,615 4,676 5,328 6,073

Change (%) 21.4 1.3 13.9 14.0

Borrowings 1,196 1,270 1,426 1,613

Other Liabilities & Prov. 1,052 809 931 1,118


Current Assets 1,229 972 1,106 1,324

Investments 2,956 3,122 3,621 4,201

Change (%) -0.1 5.6 16.0 16.0

Loans 7,567 8,676 10,411 12,493

Change (%) 19.8 14.7 20.0 20.0

Fixed Assets 48 55 58 64

Other Assets 438 531 637 765

Total Assets 12,237 13,355 15,833 18,846

Asset Quality (%)

GNPA (INR b) 253 397 631 839

NNPA (INR b) 123 158 270 345

GNPA Ratio 3.3 4.5 5.9 6.5

NNPA Ratio 1.6 1.8 2.6 2.8



Ratios

Y/E March 2011 2012 2013E 2014E










RoE 12.7 16.0 16.9 17.4

RoA 0.7 0.9 1.0 1.0

Consolidated RoE 13.5 17.2 17.3 18.0

Consolidated RoA 0.7 0.9 1.0 1.0


Cost/Income* 49.5 45.3 46.2 45.2

Empl. Cost/Op. Exps. 66.1 65.1 64.9 64.5



* ex treasury and recoveries

Valuation

Book Value (INR) 1,014 1,215 1,384 1,583

BV Growth (%) -1.4 19.8 13.9 14.3

Price-BV (x) 1.6 1.4 1.2

Consol BV (INR) 1,303 1,541 1,766 2,035

BV Growth (%) 0.4 18.3 14.6 15.3

Price-Consol BV (x) 1.2 1.0 0.9

Adjusted BV (INR) 878 1,050 1,103 1,222

Price-ABV (x) 1.8 1.7 1.6

Adjusted Consol BV 1,129 1,321 1,403 1,585

Price-Consol ABV (x) 1.4 1.3 1.1

EPS (INR) 130.2 174.5 219.4 258.6

EPS Growth (%) -9.9 34.0 25.8 17.9


Consol EPS (INR) 168.3 228.6 275.7 329.3

Con. EPS Growth (%) -9.0 35.9 20.6 19.5

Price-Consol EPS (x) 7.9 6.5 5.4



August 27 - 31, 2012 150


Sun Pharmaceuticals



Promoter 63.7 63.7 63.7

Dome. Inst. 5.3 5.5 7.2

Foreign 20.6 20.1 18.6

Others 10.4 10.7 10.6

Stock info

Bloomberg SUNP IN


CMP (INR) 661

Mcap (USD b) 12.3

52-Wk Range (INR) 690 / 448

1, 6, 12 Rel Perf (%) 2 / 25 / 31

Company descriptionSun Pharma has successfully transitioned from a

domestic company to establishing a strong presence in

the US. It has become the largest Indian company in the

US through the take-over of Taro. US (57% of sales),

India (22% of sales) and emerging markets (13% of sales)

are the key markets for Sun.

Key investment positives Significant scale-up & internationalization of

operations without dilution of return ratios has been

SUNP's key achievement over the last five years.

We expect the high return ratios to sustain in future

as well given the efficient capital allocation strategy

of the company. Its ability to sustain superior

margins even on a high base is a clear positive.

An expanding generic portfolio coupled with

sustained double-digit growth in high-margin life-

style segments in India is likely to bring in long-

term benefits for SUNP.

Has a strong launch pipeline for the US with 135

ANDAs pending US FDA approval including a

combination of low-competition & normal products.

Price increases for some key Taro products in the US

have boosted the performance in the past 3-4

quarters.



Expect Taro's high profitability (49% EBITDA margins)

to come off in coming quarters as competitors come

back in key product segments. Tax rate will go up in

FY13 due to imposition of MAT on partnership firms.

Potential damages in the Protonix patent litigation

case in the US could be significant.

Key news flows / triggers to watch Re-entry of competitors in US for some key Taro

products.

Acceptance of the buy-out offer made by SUNP to

Taro's minority shareholders.

Further progress in the Protonix litigation in the

US.

More clarity on the recent proposal to transfer the

domestic business to a 100% subsidiary.

1QFY13 highlights Performance was above estimates led by strong

traction at Taro, favourable currency & Doxorubicin

supplies to the US. Domestic sales recorded 8% de-

growth due to extra sales booked in 4QFY12 while

RoW sales grew by 45% partly helped by currency.

Core EBITDA at INR10.4b was higher than our est of

INR7.6b while core EBITDA margins were at 45%

compared to our estimate of 36%.

Adj PAT growth was strong at 54% led mainly by

Taro and favorable currency.




Op. Inc.(ex one-offs)14,982 17,823 20,375 21,223 23,104 74,406 95,870

Change (%) 58.8 70.1 36.9 57.6 54.2 54.2 28.8

EBITDA 5,474 7,840 9,638 9,552 12,169 32,507 38,401

EBITDA(ex one-offs) 4,644 7,148 8,903 8,317 10,430 29,015 36,663

Change (%) 45.3 121.9 137.4 65.9 124.6 91.1 26.4

EBITDA Margin (%) 31.0 40.1 43.7 39.2 45.1 39.0 38.2

Reported PAT 5,010 5,977 6,683 8,202 7,956 25,873 30,503

Adj. PAT (ex one-offs)4,386 5,454 6,110 7,279 6,738 23,228 27,058

Change (%) 30.4 32.8 99.2 39.5 53.6 65.4 16.5

PAT Margin (%) 29.3 30.6 30.0 34.3 29.2 31.2 28.2


US 6,220 7,991 10,400 10,106 15,411 34,716 45,857

India 6,385 7,046 6,956 8,767 5,877 29,154 32,825

ROW 2,521 2,567 2,810 3,226 3,666 11,124 14,983

APIs 1,476 1,603 1,536 1,531 2,002 6,147 6,889

Others 2 4 17 8 18 31 41

E: MOSL Estimates

151August 27 - 31, 2012


Sun Pharmaceuticals: Financials and valuation

Consolidated Income Statement (INR Million)

Y/E March 2011 2012 2013E 2014E

Net Sales 57,214 80,057 99,348 110,895

Change (%) 39.5 39.9 24.1 11.6

EBITDA 19,700 32,507 38,401 39,057

Margin (%) 34.4 40.6 38.7 35.2

Depreciation 2,041 2,912 3,354 3,639

EBIT 17,659 29,595 35,047 35,417


Other Income - Rec. 3,276 4,240 5,240 6,416

PBT 20,358 33,554 40,123 41,670

Tax 1,284 3,826 7,222 7,501

Tax Rate (%) 6.3 11.4 18.0 18.0

Profit after Tax 19,074 29,727 32,901 34,169

Less: Mionrity Interest 913 3855 4626 4163

Net Profit 18,161 25,873 28,275 30,006

Adj. PAT 14,041 23,228 27,058 30,006

Consolidated Balance Sheet (INR Million)

Y/E March 2011 2012 2013E 2014E


Total Reserves 93,798 120,628 141,834 163,738

Net Worth 94,833 121,664 142,870 164,774


Deferred Liabilities -3652 -5199 -5199 -5199

Secured Loan 1,804 1,644 1,644 1,644

Unsecured Laon 2,452 1,096 1,096 1,096

Total Loans 4,256 2,739 2,739 2,739


Net Fixed Assets 25,234 30,210 31,855 32,716

Capital WIP 2,706 2,706 2,706 2,706

Goodwil l 7,720 10,218 10,218 10,218

Investments 22,310 22,129 22,129 22,129

Curr. Assets 60,172 90,506 121,003 152,426

Inventory 14,794 20,870 22,355 27,854



L & A and Others 11,726 16,703 20,414 22,787



Appl. of Funds 103,908 130,819 156,650 182,718


Y/E March 2011 2012 2013E 2014E

Total Domestic Sales 24,948 30,340 34,059 40,017

Export - Formulations 28,982 45,841 60,840 66,072

Taro 9,962 22,128 27,619 26,036

Caraco 13,042 12,588 18,238 20,168

Branded 5,978 11,124 14,983 19,868

Export - API & Others 4,136 4,992 5,696 6,271

Gross Sales 58,066 81,173 100,594 112,360

Ratios

Y/E March 2011 2012 2013E 2014E

Basic (INR)

EPS 13.6 22.4 26.1 29.0

Fully Diluted EPS 13.6 22.4 26.1 29.0

Cash EPS 19.5 27.8 30.5 32.5

BV/Share 91.6 117.5 138.0 159.1

DPS 3.5 4.2 5.8 6.7

Payout (%) 22.1 17.3 21.5 23.7

Valuation (x)

P/E 29.5 25.3 22.8

Cash P/E 23.8 21.6 20.3

P/BV 5.6 4.8 4.2

EV/Sales 7.9 6.1 5.3

EV/EBITDA 19.4 15.9 15.0


Return Ratios (%)

RoE 16.2 21.5 20.5 19.5

RoCE 23.4 30.3 29.8 26.7





Working Capital T/O (Days) 293 299 330 378

Leverage Ratio

Debt/Equity (x) 0.0 0.0 0.0 0.0


Y/E March 2011 2012 2013E 2014E

OP/(Loss) bef. Tax 19,700 32,507 38,401 39,057

Int./Dividends Recd. 3,276 4,240 5,240 6,416


(Inc)/Dec in WC -533 -7,882 -1,398 -4,188


(inc)/dec in FA -16,864 -10,386 -5,000 -4,500

(Pur)/Sale of Invest. 8,354 181 0 0

CF from investments -8,510 -10,205 -5,000 -4,500

Change in networth 8,223 5,395 0 0

(Inc)/Dec in Debt 2,545 -1,517 0 0

Interest Paid -577 -282 -164 -164

Dividend Paid -4,213 -5,149 -7,069 -8,102


Inc/Dec of Cash 15,864 11,736 22,788 21,019


Closing Balance 21,936 33,672 56,461 77,479

Note: Cashflows do not tally due to acquisition

August 27 - 31, 2012 152


Tata Consultancy Services



Promoter 74.0 74.0 74.1

Dom. Inst. 6.7 7.2 8.1

Foreign 14.6 14.0 12.8

Others 4.7 4.8 5.0

Stock info

Bloomberg TCS IN


CMP (INR) 1,277

Mcap (USD b) 44.8

52-Wk Range (INR) 1287 / 897

1, 6, 12 Rel Perf (%) 4 / 7 / 22

Company descriptionTCS is the largest IT services company in India, with LTM

revenue of over USD9.3b. It employs over 243,000

people and provides IT and BPO services to over 900

global clients. It is one of the preferred IT vendors for

most Fortune 500/Global 1,000 companies.

BFSI is TCS's key vertical, contributing 43% to the

company's revenue (FY12), followed by Retail, which

contributed 12%.

Geographically, the company gets 53% of its revenues

from the US, 15% from UK, and 9% from India (all figures

based on FY12 mix).

Key investment positives On a high base, the company continues to post

industry leading volume growth even in a

challenging environment.

Despite the prevailing macro headwinds, the

company's execution remains spectacular, and

outlook bullish.

Traction for the company has been broad-based, the

company bagged 6 large deals across industries

One of the largest players in IMS, the key growth

driver for the industry.

Key news flows / triggers to watch The appreciation of the rupee and continued high

attrition could hamper profitability.

Sovereign default in Europe could bring about

freeze on spending as seen in 2009

Any weakness in BFSI vertical could be a negative

trigger at current peer-leading valuations

Key challenges Weak macro is making it more and more difficult to

grow revenue share from BFSI - where ?IT budgets

are down YoY

Majority of incremental revenues in 1QFY13 came

of BPO. Continued growth skew in favor of lower

end services could hamper multiples/profitability.

1QFY13 highlights; guidance for FY13, FY14 TCS's broad-based execution defying any concerns

from the prevailing macro was the key highlight of

1QFY13 results

For the quarter, BPO was the key driver of growth,

contributing 60% of the incremental revenues,

helped by Friends Life insurance platform deal

While macro remains dynamic, the company

continues to see opportunities, orders in

transformation and in discretionary projects.




Change - QoQ (%) 6.3 7.7 13.5 0.4 12.1 31.0 26.6

EBITDA 30,738 30,310 33,829 40,921 39,117 144,177 182,494

Change - QoQ (%) (1.4) 11.6 21.0 (4.4) 10.8 28.9 26.6

EBITDA Margin (%) 28.5 26.1 25.6 30.9 26.3 29.5 29.5

Reported PAT 23,804 24,390 28,866 29,324 32,806 106,384 140,115

Adjusted PAT 23,804 24,390 28,866 29,324 32,806 106,384 140,115

Change - QoQ (%) 63.1 -2.2 -9.2 55.1 20.6 22.8 12.9

PAT Margin (%) 22.0 21.0 21.9 22.1 22.1 21.8 22.6


Volume Growth 7.4 6.3 4.0 3.3 5.3 23.1 15.9

Headcount 202,190 214,770 226,751 238,583 243,545 238,583 268,351

Util. (incl. trainees) 76.2 76.4 74.0 71.3 72.3 74.4 73.7

E: MOSL Estimates

153August 27 - 31, 2012


Tata Consultancy Services: Financials and valuation


Y/E March 2011 2012 2013E 2014E

Sales 373,245 488,938 619,223 708,798

Change (%) 24.3 31.0 26.6 14.5

Cost of Services 198,505 258,773 326,331 381,202

SG&A Expenses 62,848 85,988 110,398 126,157

EBITDA 111,892 144,177 182,494 201,439

% of Net Sales 30.0 29.5 29.5 28.4

Depreciation 7,990 9,036 10,271 11,609

Other Income 5,243 4,041 11,941 11,299

PBT 109,145 139,182 184,164 201,129

Tax 21,203 31,688 43,420 46,360

Rate (%) 19.4 22.8 23.6 23.0


PAT 86,826 106,384 139,191 153,216

Net Income 86,826 106,384 139,191 153,216

Change (%) 26.3 22.5 30.8 10.1


Y/E March 2011 2012 2013E 2014E

Share Capital 1,957 1,957 1,957 1,957

Reserves 250,432 323,276 402,171 505,445

Net Worth 252,389 325,233 404,128 507,402

Preference shares 1,000 1,000 1,000 1,000


Loans 10,718 12,306 14,907 17,171


Gross Block 88,003 100,211 106,923 111,084


Net Block 52,340 64,548 71,260 75,421

Other LT Assets 89,929 110,269 115,017 124,284

Investments 18,390 0 32,956 32,956

Curr. Assets 171,948 237,173 314,579 418,850

Debtors 95,479 137,469 163,957 190,954






Misc. Expenses 2 2 2 2



Y/E March 2011 2012 2013E 2014E

Volume Growth (%) 29.7 23.1 15.9 17.5

Headcount 198,614 238,583 268,351 311,410

Utilization* 76.2 74.4 73.7 73.4

*Including trainees

Ratios

Y/E March 2011 2012 2013E 2014E

Basic (INR)

EPS 44.4 54.4 71.1 78.3

Cash EPS 48.4 59.0 76.4 84.2

Book Value 129.5 166.7 207.0 259.8

DPS 14.0 25.0 20.0 22.0

Payout % 31.6 46.0 28.1 28.1

Valuation (x)

P/E 28.8 23.5 18.0 16.3

Cash P/E 26.4 21.7 16.7 15.2

EV/EBITDA 21.9 17.2 13.0 11.5

EV/Sales 6.6 5.1 3.8 3.3


Dividend Yield (%) 1.1 2.0 1.6 1.7


RoE 37.4 36.7 38.1 33.5

RoCE 42.2 44.1 44.8 39.7

Turnover Ratios



* 1:1 bonus in FY07, accordingly ratios are adjusted


Y/E March 2011 2012 2013E 2014E


Cash for Working Capital 18,165 -73,671 34,208 -22,163

Net Operating CF 112,981 41,748 183,670 142,663


Net Purchase of Invest. 19,409 18,390 -32,956 0

Net Cash from Invest. -34,224 -23,193 -54,688 -25,037

Proc. from equity issues-11,155 24,319 -14,268 0

Proceeds from LTB/STB 1,608 1,588 2,601 2,265


Cash Flow from Fin. -41,604 -31,339 -57,465 -48,112

Free Cash Flow 59,348 165 161,938 117,626

Net Cash Flow 37,152 -12,784 71,517 69,514

Opening Cash Bal. 10,249 47,401 34,617 106,134

Add: Net Cash 37,152 -12,784 71,517 69,514

Closing Cash Bal. 47,401 34,617 106,134 176,013

Note: Cashflows do not tally due to acquisition

August 27 - 31, 2012 154


Tata Motors



Promoter 34.8 34.9 34.9

Dom. Inst. 12.0 12.7 13.7

Foreign 44.9 44.5 43.1

Others 8.4 7.9 8.3

Stock info

Bloomberg TTMT IN


CMP (INR) 240

Mcap (USD b) 11.7

52-Wk Range (INR) 321 / 138

1, 6, 12 Rel Perf (%) 3 / -9 / 49



Total Op Income 332.8 361.9 452.6 509.1 433.2 1,656.5 1,956

Growth (%) 23.0 26.9 44.0 44.3 30.1 35.6 18.1

EBITDA 42.4 45.0 68.3 67.4 57.5 223.1 252.8

EBITDA Margins (%)12.7 12.4 15.1 13.2 13.3 13.5 12.9

Growth (%) 7.1 12.6 52.1 50.8 35.9

Adj PAT 20.5 22.5 35.3 44.4 25.7 125.6 111.5

Growth (%) (3.5) 6.4 43.9 79.2 25.2 38.5 -11.2


JLR Vols ('000 units) 62.0 68.0 86.3 98.1 83.4 314.4 365.0

JLR EBITDA Margins (%)13.4 14.4 17.0 14.6 14.5 15.0 14.3

S/A Vols ('000 units)197.6 211.4 231.3 286.0 190.9 197.6 211.4

S/A EBITDA Margins (%)8.8 7.2 6.7 9.5 7.3 8.1 8.4

RM Cost (% of Sales) 78.0 78.6 79.1 79.6 77.8 78.9 78.4

E: MOSL Estimates

Company descriptionTata Motors is the largest commercial vehicle

manufacturer in India with 59% market share in MHCV

and 58% in LCVs. It also manufactures passenger car

vehicles and utility vehicles. In FY09, it acquired Jaguar

& Land Rover from Ford for USD2.5b. In FY12, JLR

contributed ~63% of TTMT's consolidated revenues and

~85% of its profit. This coupled with Tata Daewoo, makes

it a global player in the automobile industry.

Key investment positives JLR volumes to remain robust, driven by Evoque &

ramp up of operations in China. We factor in 16%

volume growth in FY13 to ~365,000 (vs. management

guidance of 370,000-380,000), with ~50% growth

driven by Evoque ramp-up.

JLR on aggressive product development plan with

40 new product/refreshes planned over next 5 years,

including smaller Jaguar by CY14/15.

Improving market mix, internal cost efficiencies,

sourcing from low cost countries and operating

leverage would offset higher cost pressures on JLR.

We expect JLR's normalized EBITDA margin to

decline by 70bp to 9.6% in FY13.

Demand for LCVs in India is expected to remain

robust, despite slow down in M&HCV demand. We

model volume growth of 7% for CV business in FY13,

driven by 16% LCV volume growth and 7.5% de-

growth in M&HCVs.

Key challenges Given high operating leverage, slow-down in

demand coupled with adverse forex movement

could adversely impact JLR's profitability.

Maintaining market share amidst increasing

competition in domestic M&HCV industry.

Key news flows / triggers to watch Level of competitive intensity in global luxury car

market, with focus on incentives/discounts.

Launch of new Range Rover in 1QCY13.

Reduction in interest rates & pick-up in economic


1QFY13 highlights; guidance for FY13, FY14 JLR's realizations improved 3.2% QoQ, driven by

favorable mix. EBITDA margins declined by 10 bps

QoQ (+110bps YoY) to 14.5%, driven by higher

capitalization (~120bp QoQ) which off-set impact

of ~130bp QoQ higher cost. However, higher tax

restricted JLR's adj. PAT to GBP236m.

S/A volumes declined by 4% YoY, as M&HCV

volumes declined ~25% YoY & PVs by ~10%, despite

~17% growth in LCV volumes. EBITDA margins

declined by 220bp QoQ (-150bp YoY) at 7.3%,

impacted by negative operating leverage.

Maintained FY13 volume guidance of ~370,000 units

and EBITDA margins of ~15% for JLR. For domestic

operations, M&HCV volumes are expected to

remain under pressure, but momentum in LCV to

remain strong.

155August 27 - 31, 2012


Tata Motors: Financials and valuation

Income Statement (Consolidated) (INR Billion)

Y/E March 2011 2012 2013E 2014E

Total Income 1,221.3 1,656.5 1,956.0 2,137.1

Change (%) -99.9 35.6 18.1 9.3

EBITDA 178.2 237.0 268.2 293.2

EBITDA Margins (%) 14.6 14.3 13.7 13.7

Depreciation 46.6 56.3 69.3 79.4

Product Dev. Exp. 10.0 13.9 15.4 16.3

Interest 23.9 29.8 29.9 24.0

Other Income 4.3 6.6 6.8 7.0

PBT 104.4 135.3 156.0 180.6

Eff. Tax Rate (%) 11.7 -0.3 30.5 29.6

Adj. PAT 90.7 125.6 111.5 127.2

Change (%) -99.4 38.5 -11.2 14.1

Balance Sheet (Consolidated) (INR Billion)

Y/E March 2011 2012 2013E 2014E


Net Worth 192 327 418 526

Loans 304 387 363 355


Deferred Tax 15 -24 -24 -24

Capital Employed 512 693 761 862

Application of Funds



Goodwil l 36 41 41 41


Curr.Assets 507 706 735 787

Inventory 141 182 230 252


Cash & Bank Bal. 114 182 89 66

Loans & Advances 178 250 292 334

Current Liab. & Prov. 491 711 788 861

Sundry Creditors 279 367 413 451


Provisions 100 128 161 176

Net Current Assets 16 -5 -53 -74

Appl. of Funds 512 693 761 862


Y/E March 2011 2012 2013E 2014E

JLR Vols ('000 units) 243.6 314.4 365.0 398.7

Growth (%) 25.6 29.1 16.1 9.2

JLR Realizations (GBP) 40,518 42,973 43,296 43,729

Growth (%) 20.4 6.1 0.8 1.0

JLR EBITDA Margins (%) 15.2 15.0 14.3 14.3

S/A Vols ('000 units) 836.6 922.9 952.6 1084.2

Growth (%) 25.2 10.3 3.2 13.8

S/A Realizations (INR) 562,866 588,455 575,468 576,092

Growth (%) 5.63 4.55 -2.21 0.11

S/A EBITDA Margins (%) 10.2 8.1 8.4 8.9


Y/E March 2011 2012 2013E 2014E

Basic (INR)

EPS 28.4 39.6 34.0 38.8

EPS Fully Diluted 27.3 37.8 33.5 38.3

Normalized EPS ^ 15.4 22.2 14.7 17.2

EPS Growth (%) -461.6 43.7 -33.8 16.7

Cash EPS 43.0 57.3 55.1 63.0

BV per share 62.8 61.0 67.7 69.4

DPS 4.0 4.0 4.5 5.0

Div. Payout (%) 81.0 119.6 68.0 77.6

Valuation (x)

Consolidated P/E 8.8 6.3 7.1 6.2

Cash P/E 5.6 4.2 4.3 3.8

EV/EBITDA 5.2 3.7 3.6 3.3

EV/Sales 0.8 0.5 0.5 0.5


Dividend Yield (%) 1.7 1.7 1.9 2.1


RoE 47.3 38.4 26.6 24.2

RoCE 26.5 27.0 27.0 25.6

Turnover Ratios





Leverage Ratio

Debt/Equity (x) 1.6 1.2 0.9 0.7

Cash Flow Statement (Consolidated) (INR Billion)

Y/E March 2011 2012 2013E 2014E


Int/Div. Received 20 7 7 7



(Inc)/Dec in WC -40 89 -45 -2

Other Items -29 -19 -15 -15

CF after EO Items 107 267 163 230

(Inc)/Dec in FA+CWIP -81 -189 -185 -200

(Pur)/Sale of Invest. 10 -64 -1 -1

CF from Inv Activity -71 -252 -186 -201


Inc/(Dec) in Debt -11 83 -24 -8

Interest Paid -25 -30 -30 -24

Dividends Paid -10 -15 -17 -19

CF from Fin Activity -14 54 -71 -51

Inc/(Dec) in Cash 22 68 -93 -23

Add: Beginning Bal. 87 110 178 85


August 27 - 31, 2012 156


Tata Steel



Promoter 31.4 31.4 30.6

Dom. Inst. 28.7 28.3 26.3

Foreign 15.8 16.2 19.7

Others 24.1 24.1 23.4

Stock info

Bloomberg TATA IN


CMP (INR) 395

Mcap (USD b) 6.9

52-Wk Range (INR) 504 / 332

1, 6, 12 Rel Perf (%) -6 / -14 / -21

Company descriptionTata Steel (TATA), the lowest cost steel producer in India,

has become the sixth largest steel maker in the world

after the acquisition of Corus. The combined entity has

its business spread over Europe, the UK, Asia, North

America and the rest of the world with 27mtpa capacity.

On a consolidated level, it has ~22% raw material

security and plans to increase it to 50-60%. Production

will increase to 34mtpa through brownfield expansions

in Jamshedpur and green-field projects in Orissa.

Key investment positives Tata Steel India (TSI) saleable steel volumes will post

CAGR of 13% over FY12-14 t due to ongoing capacity

expansion to 10mtpa at Jamshedpur.

Overseas investments in raw material assets are

expected to start generating cash flow in FY14.

TSE restructuring initiatives such as up gradation of

plants, shutdown of old units and downsizing of

Manpower will increase its cost effectiveness going

forward.

Key challenges Sluggish domestic steel demand, cheaper imports

and enhanced capacity of steel majors due to recent



pricing which will results in lower TSI margins.

The European steel demand continues to remain

subdued leading to lower steel prices and margins.

Further regulatory requirements in Europe and UK

are the additional challenges that Tata Steel Europe

(TSE) has to deal with.

Key news flows / triggers to watch Tata Steel is currently undergoing triennial

negotiations with trustee's of pension fund which

are expected to be completed in 2QFY13. This will

lead to further increase in net debt as it has to

contribute to the deficit.

1QFY13 highlights; guidance for FY13, FY14 Tata Steel adj. consolidated PAT increased 83% QoQ

to INR8b due to lower than expected loss at TSE

and other subsidiaries. Reported PAT of INR6b

included forex loss of INR1.97b. Actuarial loss of

INR14.5b has been adjusted in reserves and surplus.

Tata Steel India EBITDA was 6% lower than estimate

at INR30b due to cost inflation. Realization (TSI) was

up 5% QoQ but volumes were down 10%.

TSI EBITDA per ton remained flat due to cost

inflation on account of (1) increase in power rate

(2) freight and handling cost (3) pension

provisioning on account of change in discount rate.

Cost inflation is sticky and will put further pressure

on margins, in view of falling steel prices.

TSE reported better than expected EBITDA per ton

of USD35/t due to higher prices and easing of cost

pressure.



Operating Income 330,002 327,979 331,031 339,986 338,212 1,328,997 1,360,576

Change (%) 21.3 14.5 13.8 0.5 2.5 11.9 2.4

EBITDA 44,572 27,500 19,133 31,788 36,003 124,168 141,040

Change (%) 0.6 -25.1 -44.1 -17.9 -19.2 0.9 2.8

EBITDA Margin (%) 13.5 8.4 5.8 9.3 10.6 9.3 10.4

Reported PAT 52,937 1,390 -6,874 2,032 5,170 49,485 28,471

Adjusted PAT 19,846 2,124 -6,027 4,335 7,949 20,279 32,744

Change (%) 5.3 -83.8 -168.4 -63.3 -59.9 -61.4 61.5

PAT Margin (%) 6.0 0.6 -1.8 1.3 2.4 1.5 2.4


Sales (mt) 6.1 6.1 5.8 6.2 5.7 24.3 24.0

Realization (INR/ton)54,099 53,679 56,683 54,660 59,544 54,759 56,647

EBITDA/ton (USD/ton)163 98 64 102 116 107 110

E: MOSL Estimates

157August 27 - 31, 2012


Tata Steel: Financials and valuation


Y/E March 2011 2012 2013E 2014E

Net Sales 1,187,531 1,328,997 1,360,576 1,430,516

Change (%) 16.0 11.9 2.4 5.1

EBITDA 159,956 124,168 141,040 152,119

% of Net Sales 13.5 9.3 10.4 10.6


EBIT 115,808 79,001 86,547 97,140

Finace cost 27,700 42,501 42,206 44,246

Other income 2,809 15,730 10,346 10,750

PBT before EO 90,917 52,231 54,688 63,644

EO income 30,103 33,619 -1,970

PBT after EO 121,020 85,850 52,718 63,644

Tax 32,459 36,365 24,247 17,923

Rate (%) 26.8 42.4 46.0 28.2

Reported PAT 88,561 49,485 28,471 45,721

Minority interest P/L -603 -1,731 -640 -195

Share of asso. PAT 664 2,681 1,663 1,730

PAT (After MI & asso.) 89,827 53,898 30,774 47,646

Div. on Pref. /Hybrid Sec. 2,225 2,616 2,616

Adjusted PAT 59,724 18,054 30,127 45,030

Change (%) -n/a- -69.8 66.9 49.5


Y/E March 2011 2012 2013E 2014E

Share Capital 9,587 9,714 9,714 9,714

Reserves 346,226 420,672 434,236 465,117

Net Worth 355,814 430,386 443,950 474,831


Total Loans 639,107 646,318 646,318 646,318



Gross Block 981,023 1,133,047 1,253,047 1,373,047

Less: Accum. Deprn. 615,338 712,043 766,536 821,515

Net Fixed Assets 365,685 421,003 486,511 551,532

Capital WIP 135,508 200,397 200,397 200,397

Investments 46,881 26,229 26,229 26,229

Goodwill on consolid. 152,982 173,546 173,546 173,546

Other assets 87,181 84,833 84,833 84,833


Appl. of Funds 1,023,936 1,112,039 1,124,963 1,155,649


Y/E March 2011 2012 2013E 2014E

Basic (INR)

EPS 62.3 18.6 31.0 46.4

Cash EPS 138.3 97.4 85.4 103.7

BV/Share 211.4 264.4 278.4 310.2

DPS 12.0 12.0 12.0 12.0

Payout (%) 21.9 74.6 45.3 30.3

Valuation (x)

P/E 6.4 21.3 12.8 8.5

Cash P/E 2.9 4.1 4.6 3.8

P/BV 1.9 1.5 1.4 1.3

EV/Sales 0.7 0.7 0.7 0.7

EV/EBITDA 5.5 7.3 6.9 6.7

Dividend Yield (%) 3.0 3.0 3.0 3.0

Return Ratios (%)

RoE 40.5 7.8 11.4 15.8

RoCE (pre-tax) 13.2 9.1 8.8 9.6




Payables (Days) 53 51 50 50

Working Capital T/O (Days) 67 61 62 62

Leverage Ratio (x)


Debt/Equity 2.5 2.0 2.2 2.1


Y/E March 2011 2012 2013E 2014E

EBITDA 159,956 124,168 141,040 152,119

Non cash exp. (income) 8,773 13,603 -1,251 -989

(Inc)/Dec in Wkg. Cap. -71,749 11,590 -10,439 -11,880

Tax Paid -32,351 -36,524 -24,247 -17,923


(Inc)/Dec in FA + CWIP -101,636 -119,586 -120,000 -120,000

(Pur)/Sale of Investments 22,294 4,164

Acquisition in subsidiaries -647 -1,970

Int. & Divident Income 3,518 6,194 10,346 10,750

Other investing activities 39,218 61,251


Equity raised/(repaid) 45,568 6,045

Debt raised/(repaid) 37,874 -39,803


Interest & equiv. paid -31,366 -37,646 -42,206 -44,246


(Inc)/Dec in Cash 72,305 -18,184 -62,367 -45,808

Add: opening Balance 67,878 140,183 122,000 58,976

Closing Balance 140,183 122,000 58,976 12,761


Y/E March 2011 2012 2013E 2014E

Forex Rate (INR/USD) 45.6 47.9 53.5 52

Realization (USD/ton)

Indian Business 918 986 884 862

Europe and other business 1158 1175 1108 1093

EBITDA (USD/ton)

Indian Business 374 347 278 251

Europe and other business 51 9 25 35

August 27 - 31, 2012 158


Titan Industries



Promoter 53.1 53.4 53.3

Dome. Inst. 3.8 4.5 6.2

Foreign 16.2 15.0 12.5

Others 27.0 27.1 28.0

Stock info

Bloomberg TTAN IN


CMP (INR) 221

Mcap (USD b) 3.5

52-Wk Range (INR) 255 / 154

1, 6, 12 Rel Perf (%) -4 / -2 / 0




change (%) 61.3 36.5 24.8 28.3 9.2 35.5 17.5

EBITDA 1,921 2,002 2,129 2,071 2,120 8,329 10,096

Change (%) 72.7 15.4 9.2 95.7 10.3 42.2 21.2

EBITDA Margin (%) 9.5 9.6 8.7 9.1 9.6 9.4 9.7

Reported PAT 1,436 1,529 1,639 1,443 1,561 6,001 7,158

Adjusted PAT 1,436 1,529 1,639 1,443 1,561 6,048 7,158

Change (%) 76.9 19.7 16.4 72.0 8.7 39.5 18.3

PAT Margin (%) 7.1 7.3 6.7 6.3 7.1 6.8 6.9


Watches Sales (%) 24.2 16.1 17.2 27.0 14.4

Jewellery Volume (%)40.0 0.0 -5.0 -7.0 -21.0

E: MOSL Estimates

Company descriptionTitan Inds is the largest specialty retailer with leadership

in watches (~45% of total market, 65% of organised

market) and branded Jewelry (~40% share), and largest

chain in Eyewear. It owns brands like Titan, Fastrack,

Sonata, Tanishq, Goldplus, Zoya, and Titan Eye+.

Key investment positives Titan is debt free with cash surplus of ~INR10.0b

(~INR4.3b excluding Gold Harvest scheme) and

operating ROE of 128%.

Its watch business is likely to grow by 18-20% CAGR

led by strong brand, distribution and innovations in

design and segments.

Tanishq is likely to add 15 stores in the next 15-18

months (6 in past 30 months) which would enable

sales growth given strong brand, contemporary

designs and quality assurance.

Fastrack has emerged as Rs3.5-4b brand focused on

youth with products like watches, eyewear, bags,

belts, wallets and other accessories; this brand has

the potential to grow manifold in the coming 3/5

years.

Key challenges Jewelry business faces near term headwinds from

1) volatility in gold and diamond prices 2) higher

overheads due to increased pace of store openings

and 3) rising competition from regional players.

Maintaining leadership position in watches with

rising competition from small/regional players at

the lower end and premium global brands at the

high end.

Sustaining profitable operations at the PE (Precision

engineering) SBU.

Key news flows / triggers to watch Trend in gold and diamond prices can impact

consumer demand and profit margins.

Poor consumer confidence and slowdown in spends

will impact sales growth.

Breakeven in the eyewear business.

1QFY13 highlights; guidance for FY13, FY14 Jewelry volumes declined 21% due to high gold

prices and slowdown in consumer demand. Sales

grew 8% and EBIT grew 9%; margins remained flat

YoY at 10.2%.

Watch business reported 14% sales growth (3%

decline in volumes) while Eyewear sales grew 6%

even as LTL sales growth remained under pressure

at 1%.

We remain cautious on the jewellery volumes

considering the weak macroeconomic scenario.

159August 27 - 31, 2012


Titan Industries: Financials and valuation


Y/E March 2011 2012 2013E 2014E

Net Sales 65,209 88,588 103,823 123,199

Change (%) 39.5 35.9 17.2 18.7


EBITDA 5,856 8,296 10,096 12,284

Change (%) 53.5 41.7 21.7 21.7

Margin (%) 9.0 9.4 9.7 10.0



Other Income - Recurring 561 958 977 1,304


Change (%) 80.4 39.7 18.8 24.3

Margin (%) 9.2 9.4 9.6 10.0

Tax 1,686 2,523 3,006 3,776


Tax Rate (%) 27.6 27.9 28.0 32.8


Change (%) 65.8 39.1 18.7 23.8

Margin (%) 6.7 6.8 6.9 7.2

Reported PAT 4,336 5,984 7,158 8,858


Y/E March 2011 2012 2013E 2014E


Reserves 9,810 13,611 18,410 24,557

Net Worth 10,254 14,499 19,297 25,445

Loans 677 59 200 200

Deferred Tax 15 -38 185 465


Gross Block 6,089 7,614 8,989 10,164

Less: Accum. Depn. 3,393 3,818 4,250 4,747

Net Fixed Assets 2,696 3,796 4,739 5,416

Intangibles 135 110 60 25

Capital WIP 194 150 150 150


Curr. Assets, L&A 34,224 42,752 52,411 65,327

Inventory 19,938 28,787 34,454 41,151



Others 2,200 2,729 3,251 3,861



Provisions 2,201 3,057 3,398 4,153




Volume Growth (%)

Jewelry 12.6 11.0 10.1 11.2

Watches 9.2 6.7 7.0 8.0

E: MOSL Estimates

Ratios

Y/E March 2011 2012 2013E 2014E

Basic (INR)

EPS 4.9 6.8 8.1 10.0

Cash EPS 5.2 7.3 8.5 10.5

BV/Share 11.5 16.3 21.7 28.7

DPS 1.5 2.0 2.4 3.0

Payout % 30.0 30.0 30.0 30.0

Valuation (x)

P/E 32.5 27.4 22.1

Cash P/E 30.3 25.9 21.0

EV/Sales 2.1 1.8 1.4

EV/EBITDA 22.5 18.2 14.5

P/BV 13.5 10.2 7.7


Return Ratios (%)

RoE 49.6 48.7 42.4 34.8

Operating RoE 128.1 175.4 95.2 97.9

RoCE 61.8 66.8 58.7 54.1




Leverage Ratio

Debt/Equity (x) 0.1 0.0 0.0 0.0


Y/E March 2011 2012 2013E 2014E


Int./Div. Received 561 958 977 1,304

Depreciation and Amort. 345 450 482 533



Incr in WC -6,445 3,827 887 499


Extraordinary Income 0 -47 0 0

Incr in FA 524 1,456 1,325 1,140


CF from Invest. -539 -1,572 -1,325 -1,140

Incr in Debt -51 -618 141 0

Dividend Paid 776 1,290 1,818 2,147

Others 1,125 852 483 2,922


Incr/Decr of Cash 9,082 -1,344 3,372 5,287


Closing Balance 10,949 9,605 12,977 18,264

August 27 - 31, 2012 160


Company descriptionUltraTech Cement, is a subsidiary of Grasim, a part of

the Aditya Birla Group. Post merger of Grasim's cement

business, it is the largest cement company in India with

a total cement capacity of 50m ton with a pan-India

presence. It is the largest exporters of cement and

clinker from India. It also has ancillary businesses like

white cement and RMC.

Key investment positives UltraTech is a truly pan-India play without

concentration in any particular region, insulating it

from wide variation in regional demand and price

volatility.

Ongoing capacity addition to add ~10mt capacity by

1QFY14, taking total capacity to ~60mt.

Potential to increase throughput without incurring

major capex by increasing utilization and blending,

along with locational advantage, gives it the

flexibility to either export or sell in the domestic

market.

Product mix is expected to improve with lower

contribution from clinker as new grinding unit at

Gujarat commissions operations by 2QFY13.

UltraTech has well diversified fuel mix, with only

~53% dependence on domestic coal (~33% linkage

coal). Apart from domestic coal, it uses imported

coal (~33%) and pet-coke (~14%).

UltraTech Cement



Promoter 63.3 63.3 63.4

Dom. Inst. 4.8 5.5 7.8

Foreign 22.1 20.6 16.4

Others 9.8 10.6 12.5

Stock info

Bloomberg UTCEM IN


CMP (INR) 1,717

Mcap (USD b) 8.4

52-Wk Range (INR) 1,737 / 980

1, 6, 12 Rel Perf (%) 5 / 19 / 63




Change (%) 9.1 21.6 23.0 18.9 16.6 37.6 17.1

EBITDA 11,882 5,837 9,647 12,641 12,918 40,007 49,964

Change (%) 18.9 43.1 36.3 22.2 8.7 56.3 24.9

EBITDA Margin (%) 27.3 14.9 21.1 23.7 25.5 22.0 23.5

Reported PAT 6,831 2,790 6,169 8,673 7,784 24,462 30,880

Adjusted PAT 6,831 2,790 5,695 8,673 7,784 23,982 30,880

Change (%) 22.5 141.0 78.5 19.3 14.0 70.8 28.8

PAT Margin (%) 15.7 7.1 12.5 16.3 15.3 13.2 14.5


Volume (mt) 9.86 9.22 10.11 11.54 10.33 40.7 43.8

Realiz.(INR/t) 3,749 3,507 3,759 3,894 4,124 3,738 4,083

EBITDA (INR/T) 1,190 624 940 1,080 1,235 969 1,126

E: MOSL Estimates

Key challenges Being largest exporter of cement, its earnings are

sensitive to export volumes & realizations.

Consol net debt of INR18.8b as of Mar-12.

Key news flows / triggers to watch Its brownfield expansion would commission

operations from 1QFY14 at both Raipur (4.8mt) &

Karnataka (4.4mt). Also, grinding unit at Pipava

(1mt) is expected to start operations in 2QFY13.

Cement demand recovery over next 12-18 months,




Outcome of the appeal against CCI order in the

appellate tribunal on alleged cartelization.

1QFY13 highlights; guidance for FY13, FY14 Volumes at 10.33mt (+5% YoY, -10% QoQ). Grey

cement realizations estimated to improve ~6% QoQ

(~10% YoY) to INR4,124/ton.

EBITDA at INR12.9b and EBITDA/ton of INR1,235

(+INR154/ton QoQ, +INR44/ton YoY), driven by

higher realizations and in-line cost.

It has further increased capex by INR10b to INR120b,

with incremental capex towards modernization and

RMC business.

Expects industry to grow over 8% and surplus

scenario to continue for next 3 years.

161August 27 - 31, 2012


UltraTech Cement: Financials and valuation

Income Statement (Post-Merger)* (INR Million)

Y/E March 2011 2012 2013E 2014E

Net Sales 132,062 181,664 212,698 246,819

Change (%) 87.3 37.6 17.1 16.0

EBITDA 25,597 40,007 48,808 56,566

Margin (%) 19.4 22.0 22.9 22.9

Depreciation 7,657 9,026 9,118 12,010

Int. and Finance Charges 2,725 2,239 2,135 2,226

Other Income - Rec. 2,619 4,520 4,900 4,750

EO Expense/(Income) 0 -666 0 0

PBT after EO expense 17,833 33,929 42,455 47,080

Tax Rate (%) 21.3 27.9 29.0 29.0

Adj PAT 14,042 23,982 30,143 33,427

Change (%) 28.4 70.8 25.7 10.9

Balance Sheet (Post-Merger) * (INR Million)

Y/E March 2011 2012 2013E 2014E


Net Worth 106,660 128,598 154,920 183,570


Loans 26,373 38,117 38,117 33,117


Net Fixed Assets 114,003 116,342 132,192 180,181

Capital WIP 6,831 18,968 50,000 25,000

Investments 37,303 37,888 19,475 21,475

Curr. Assets 41,809 56,235 63,158 72,963

Inventory 19,565 20,359 26,223 30,430

Debtors 6,023 7,660 8,741 10,143

Cash & Bank Bal 1,448 1,882 1,971 1,960

Others 14,773 26,334 26,223 30,430


Creditors 43,877 37,132 43,122 50,040

Provisions 5,735 8,207 8,741 10,143

Net Current Assets -7,803 10,895 11,295 12,779

Appl. of Funds 150,334 184,093 212,961 239,436


Y/E March 2011 2012 2013E 2014E

Capacity (mt) 48.8 48.8 49.8 60.0

Dispatches (mt) 35.2 41.3 44.4 49.2

Growth (%) 74.0 17.4 7.5 10.8

Realizations (INR/t) 3798 4460 4857 5083

EBITDA (INR/Ton) 727 969 1100 1150

EBITDA Margins (%) 19.4 22.0 22.9 22.9

E: MOSL Estimates; * Assuming merger w.e.f July 1, 2010

Ratios (Post-Merger) *

Y/E March 2011 2012 2013E 2014E

Basic (INR)

EPS 51.2 87.5 110.0 122.0

Cash EPS 79.2 120.4 143.3 165.8

BV/Share 389.2 469.2 565.3 669.8

DPS 6.0 8.0 12.0 15.0

Payout (%) 13.6 10.4 12.7 14.3

Valuation (x)

P/E 33.5 19.6 15.6 14.1

Cash P/E 21.7 14.3 12.0 10.4

P/BV 4.4 3.7 3.0 2.6

EV/Sales 3.5 2.6 2.3 1.9

EV/EBITDA 17.9 11.7 10.0 8.5

EV/Ton (Cap-US$) 168 172 175 144

Dividend Yield (%) 0.3 0.5 0.7 0.9

Return Ratios (%)

RoE 18.4 20.4 21.3 19.8

RoCE 21.1 23.7 24.8 24.1





Leverage Ratio

Debt/Equity 0.2 0.3 0.2 0.2

Cash Flow Statement (Post-Merger) * (INR Million)

Y/E March 2011 2012 2013E 2014E

Op. Profit/(Loss) bef.Tax 25,597 40,007 48,808 56,566



(Inc)/Dec in WC 10,146 -18,264 -310 -1,496


CF from Oper. incl EO Exp. 34,571 17,539 43,633 48,992

(inc)/dec in FA -76,480 -23,502 -56,000 -35,000

(Pur)/Sale of Invest. -20,608 -584 18,412 -2,000

CF from investments -97,088 -24,087 -37,588 -37,000

Issue of Shares 57,436 24 0 0

(Inc)/Dec in Debt 10,327 11,744 0 -5,000

Interest Paid -2,725 -2,239 -2,135 -2,226

Dividend Paid -1,911 -2,548 -3,822 -4,777


Inc/Dec of Cash 611 434 89 -11

Add: Beginning Balance 837 1,448 1,882 1,971

Closing Balance 1,448 1,882 1,971 1,960

August 27 - 31, 2012 162


Union Bank of India



Promoter 54.4 54.4 57.1

Dom. Inst. 19.6 18.9 12.8

Foreign 9.5 9.6 14.3

Others 16.5 17.1 15.8

Stock info

Bloomberg UNBK IN


CMP (INR) 164

Mcap (USD b) 1.6

52-Wk Range (INR) 274 / 156

1, 6, 12 Rel Perf (%) -22 / -35 / -43



NII 15,902 16,611 17,809 18,766 18,217 69,089 79,471

Change (%) 18.0 8.2 10.2 9.3 14.6 11.1 15.0

Other Income 4,840 5,009 5,921 7,554 4,912 23,324 23,493

Opex 9,084 9,571 10,889 10,332 10,459 39,875 45,365


Change (%) 11.7 6.6 1.8 83.9 8.7 22.0 9.6

Provisions 4,284 6,228 9,727 5,172 5,185 25,410 22,956

PAT 4,644 3,524 1,970 7,732 5,116 17,871 23,383

Change (%) -22.8 16.2 -66.0 29.4 10.2 -14.2 30.8


NIM (%) 3.1 3.2 3.3 3.3 3.0 3.2 3.2

Loan Growth (%) 16.7 16.5 16.8 18.3 19.5 18.3 14.8

GNPA (%) 2.6 3.5 3.3 3.0 3.8 3.0 3.9

E: MOSL Estimates

Company descriptionUnion Bank is a state-owned bank with a balance sheet

size of over INR2.6t. The government holds 54% in the

bank. UNBK has a pan- India presence, with a higher

concentration in the western region, with 3,300+

branches and 4,100+ ATMs

Key investment positives UNBK has been able to deliver margins of 3%+

despite higher slippages (which led to higher

interest income reversal) and tight liquidity

condition which is impressive (FY12 NIM was at

3.2%; down just 10bp YoY). Management expects to

maintain margin of 3% going forward led by fall in

cost of funds and improvement in asset quality. Loan

CAGR is expected to be 17% over FY13/14 which

would lead to NII CAGR of 14% over the same period.

UNBKS core fee income to average assets of ~40bp

remains low as compared to its peers. However

increased focus of the management has started

yielding results as a consequence YoY fee income

growth has improved to 17% in 1QF13 v/s 14% for

FY12 and 4% in FY11. Continuous traction in fee

income would provide cushion if pressure on asset

quality increases.

UNBK is highly leveraged to macro-economic

environment given the asset quality pressure it has

witnessed over past two years. As macro-economic

environment improves and liquidity condition

eases, concerns over asset quality would abate and

could lead to re-rating of the stock.

Key challenges Volatile asset quality performance, uncertainty of

further deterioration in the macroeconomic

environment and expectation of higher

restructuring will remain an overhang.

Despite equity infusion of INR7.6b over FY11/12,

core Tier I ratio of the bank stood at 7.7% which

would result into higher equity infusion

requirement in coming years specifically under

Basel III regime.

Key news flows / triggers to watch One of the biggest beneficiaries of upturn in

macroeconomic environment. Any concentrated

effort by Government to get rid of policy paralysis

and boost investment climate will be a key trigger

for UNBK.

1QFY13 highlights; guidance for FY13, FY14 Performance highlights of 1QFY13: (a) Slippages

rose significantly to INR16.3b v/s INR6.1b in 4QFY12.

(b) UNBK restructured INR16.4b in 1QFY13, of which

INR12b was on account of restructuring of one SEB

account. (c) NIM declined 25bp QoQ to 3% (d) CASA

ratio stable at 31%, (e) Fee income grew 17% YoY

Management guidance: (a) Quarterly run-rate of

slippages to be in the range of INR6-8b (b) Further

restructuring of INR26-30b expected over next few

quarters (c) Margin to be 3%+ (d) Loan growth to be

16-18% for FY13.

163August 27 - 31, 2012


Union Bank of India: Financials and valuation


Y/E March 2011 2012 2013E 2014E

Interest Income 164,526 211,443 259,439 291,512



Change (%) 48.3 11.1 15.0 12.7


Net Income 82,550 92,413 102,963 117,041

Change (%) 33.9 11.9 11.4 13.7



Change (%) 17.6 22.0 9.6 17.0


PBT 29,554 27,128 34,642 40,111

Tax 8,735 9,256 11,259 13,638

Tax Rate (%) 29.6 34.1 32.5 34.0

PAT 20,819 17,871 23,383 26,474

Change (%) 0.3 -14.2 30.8 13.2

Profits for Equity SH 20,768 17,766 23,276 26,366

Core PPP* 36,286 44,590 51,098 59,615

Change (%) 25.0 22.9 14.6 16.7



Y/E March 2011 2012 2013E 2014E


Preference Share Capital 1,110 1,110 1,110 1,110


Net Worth 127,645 146,331 163,760 183,556

Of which Equity Networth 126,535 145,221 162,650 182,446

Deposits 2,024,613 2,228,690 2,585,280 3,050,630

Change (%) 19.1 10.1 16.0 18.0

of which CASA Dep 643,072 697,051 747,480 849,963

Change (%) 19.2 8.4 7.2 13.7

Borrowings 133,160 179,095 210,534 246,006



Current Assets 200,984 156,751 177,074 225,576

Investments 583,991 623,636 748,363 860,617

Change (%) 7.3 6.8 20.0 15.0

Loans 1,509,861 1,778,821 2,045,644 2,413,860

Change (%) 26.5 17.8 15.0 18.0

Fixed Assets 22,928 23,358 24,147 24,975

Other Assets 42,080 39,549 45,481 52,303

Total Assets 2,359,844 2,622,114 3,040,709 3,577,331

Asset Quality (%)

GNPA (INR M) 36,228 54,499 80,304 114,236

NNPA (INR M) 18,034 30,250 48,055 69,951

GNPA Ratio 2.37 3.02 3.86 4.65

NNPA Ratio 1.19 1.70 2.35 2.90



Ratios

Y/E March 2011 2012 2013E 2014E










RoE 20.9 14.8 16.8 16.7

RoA 1.0 0.7 0.8 0.8





Cost/Income* 50.7 45.3 45.6 44.1

Empl. Cost/Op. Exps. 65.8 62.2 62.8 62.0



* ex treasury



CASA Ratio 31.8 31.3 28.9 27.9



CAR 13.0 11.9 12.1 11.4

Tier 1 8.7 8.4 8.7 8.3

Valuation

Book Value (INR) 211.3 235.9 268.3 305.0

Change (%) 21.2 11.6 13.7 13.7

Price-BV (x) 0.7 0.6 0.5

Adjusted BV (INR) 189.0 200.2 211.6 222.4

Price-ABV (x) 0.8 0.8 0.7

EPS (INR) 39.6 32.3 42.3 47.9

Change (%) -3.6 -18.5 31.0 13.3




August 27 - 31, 2012 164


Company descriptionA Tata Group company, Voltas is the second largest air-

conditioning company in India. The company has three

segments, Electro-mechanical Projects (EMP, 60% of

sales), Unitary cooling (30%) and Engg Products (10%).

Voltas has significant presence in Middle-East air-

conditioning market, the region accounting for 65% of

the current orderbook.

Key investment positives Voltas is a strong player in the Middle-East HVAC

market, and derives 60% of MEP revenues from the

region. While demand has stagnated in recent times

impacted by global uncertainty and unrest in the

region, the company stands to significantly benefit

from a pickup in demand in Middle-eastern

economies.

The HVAC market in India, estimated at around

INR60b, has a potential to grow at an accelerated

pace over next five years, as industrial and

infrastructure investments pick up. Voltas, second

largest player after Bluestar, stands to gain from the

opportunity.

Voltas has nearly 20% market share in room ac

segment (part of unitary cooling) and stands to gain

from growing demand for room air-conditioning

driven by increasing power availability and

increasing living standard.

Voltas



Promoter 30.2 30.2 30.6

Dom. Inst. 27.0 26.8 29.8

Foreign 21.5 20.8 19.2

Others 21.4 22.3 20.5

Stock info

Bloomberg VOLT IN


CMP (INR) 113

Mcap (USD b) 0.7

52-Wk Range (INR) 133 / 72

1, 6, 12 Rel Perf (%) -5 / 1 / -14




Change (%) (4.1) 3.6 11.0 (5.8) 19.8 (0.0)

EBITDA 1,062 76 766 1,356 887 3,258

Change (%) (13.2) (92.8) (66.4) (55.5) (79.9) 138.6

EBITDA Margin (%) 7.9 0.7 6.6 8.6 5.5 6.3

Reported PAT 1,318 419 (1,154) 1,038 788 1,621

Adjusted PAT 504 169 611 1,013 777 2,295

Change (%) (46.4) (77.4) 10.8 8.5 54.3 (27.6)

PAT Margin (%) 3.7 1.5 5.3 6.4 4.8 4.4


Order book (INR m) 45,530 44,610 50,940 42,920 45,740 42,920

BTB (x) 1.7 1.5 1.5 1.2 1.5 1.3

MEP Segment EBIT Margin (%) 4.6 0.7 7.3 8.3 4.5 5.4

E: MOSL Estimates

Key challenges Increasing competitive intensity in domestic and

overseas HVAC market.

Maintaining market share in highly competitive and

crowded unitary cooling (Room AC) market.

Profitability in overseas orders is impacted by cost

over runs.

Key news flows / triggers to watch Orders from Middle East, particularly Qatar and UAE.

Ordering from Indian infrastructure space,

particularly Airports and Railways.

Any news on Government incentives for setting up

cold storages.

1QFY13 results highlights/guidance Voltas reported robust growth in revenues during

1QFY13, up 20% YoY led by UCP segment, up 35%

YoY while profitability continued to remain under

pressure. EBITDA margins declined by 240bp YoY.

The companies' order book stood at INR 45.7b with

a BTB (x) of 1.5x annualized 1QFY13 revenues.

The management expects the international order

flows to pick up, especially from Abu-Dhabi and

Qatar, while on the domestic front the overall macro

environment is still uncertain. The Engineering

products division is likely to be under pressure as

textile and mining business are both facing

tremendous pressures due to macro environment.

165August 27 - 31, 2012


Voltas: Financials and valuation


Y/E March 2009 2010 2011 2012

Total Revenues 43,259 47,575 51,768 51,750

Change (%) 35.1 10.0 8.8 0.0

Raw Materials 31,685 32,876 36,808 37,800

Staff Cost 4,656 5,450 5,563 5,995

Other Expenses 4,087 4,653 4,990 4,698

EBITDA 2,831 4,596 4,408 3,258



Other Income 962 785 810 1,092

Interest 128 98 165 314

PBT 3,456 5,068 4,843 3,696

Tax 1,172 1,472 1,729 1,401

Rate (%) 33.9 29.1 35.7 37.9

Adjusted PAT 2,258 3,560 3,170 2,296

Extra-ordinary Income (net) 261 250 402 -675

Reported PAT 2,519 3,810 3,572 1,622

Change (%) 28.2 57.7 -10.9 -27.6


Y/E March 2009 2010 2011 2012


Reserves 7,567 10,521 13,286 14,448

Net Worth 7,674 10,649 13,465 14,536

Loans 1,814 352 1,381 2,234

Deferred Tax Liability -224 -202 -152 -242




Net Fixed Assets 2,148 2,069 2,422 2,730


Investments 1,562 2,339 2,613 3,116

Curr. Assets 27,489 28,249 35,310 34,066

Inventory 11,194 11,441 16,183 16,442

Debtors 9,521 10,060 11,705 11,668


Loans & Advances 2,203 2,055 2,440 3,246

Other Assets 0 5 2 0


Creditors 11,782 11,122 13,383 13,573


Provisions 2,617 2,645 3,157 2,790



Key Operational Metrics

Order book (INR m) 47,180 46,530 48,870 42,920

BTB (x) 1.7 1.5 1.6 1.3

MEP segment EBIT mar. (%) 7.7 9.9 7.9 5.4

Working Capital days 5 8 29 57

E: MOSL Estimates

Ratios

Y/E March 2009 2010 2011 2012

Basic (INR)

EPS 6.8 10.8 9.6 6.9

Cash EPS 18.5 21.3 23.0 17.6

Book Value 23.2 32.2 40.7 44.0

DPS 1.6 2.0 2.0 2.0


Valuation (x)

P/E 13.8 8.7 9.8 13.5

Cash P/E 5.1 4.4 4.1 5.3

EV/EBITDA 9.5 5.3 5.6 8.4

EV/Sales 0.6 0.5 0.5 0.5


Dividend Yield (%) 1.7 2.1 2.1 2.1


RoE 32.3 35.1 25.8 15.5

RoCE 29.3 34.9 25.0 15.6

Turnover Ratios





Leverage Ratio

Debt/Equity (x) 0.2 0.0 0.1 0.2


Y/E March 2009 2010 2011 2012


Add: Depreciation 210 214 210 340

Interest 128 98 165 314

Less: Direct Taxes Paid 1,204 1,451 1,678 1,401

(Inc)/Dec in WC (1,718) (527) (3,012) (4,031)

CF from Operations 871 3,403 528 -1,083

EO Income 261 250 402 -675

CF from Oper. Incl. EO Items 1,133 3,653 929 -1,757

(Inc)/Dec in FA (591) (196) (406) 23

(Pur)/Sale of Investments 1,023 (777) (274) (503)

CF from Investments (244) (1,062) (832) (453)

(Inc)/Dec in Net Worth 350 (141) (163) 177

(Inc)/Dec in Debt 1,077 -1,463 1,030 853

Less: Interest Paid 128 98 165 314


CF from Fin. Activity 680 (2,474) (70) (55)

Inc/Dec of Cash 1,569 118 27 (2,266)


Closing Balance 4,571 4,689 4,980 2,710

August 27 - 31, 2012 166


Wipro



Promoter 78.4 78.4 79.2

Dom. Inst. 3.5 3.4 3.7

Foreign 9.3 9.3 8.0

Others 8.9 8.9 9.0

Stock info

Bloomberg WPRO IN


CMP (INR) 354

Mcap (USD b) 15.6

52-Wk Range (INR) 453 / 310

1, 6, 12 Rel Perf (%) -6 / -18 / -2




Change (%) 3.2 6.2 9.9 (1.3) 7.9 20.7 16.3

EBITDA 17,290 17,397 19,843 19,611 21,426 74,141 82,991

Change (%) 1.3 0.6 14.1 (1.2) 9.3 12.5 11.9

EBITDA Margin (%) 20.2 19.1 19.8 19.9 20.1 19.8 19.0

Reported PAT 13,349 13,009 14,564 14,809 15,802 55,731 61,966

Adjusted PAT 13,349 13,009 14,564 14,809 15,802 55,731 61,966

Change (%) (2.9) (2.5) 12.0 1.7 6.7 5.2 11.2

PAT Margin (%) 15.6 14.3 14.6 15.0 14.8 14.9 14.2


Volume growth 1.8 6.0 1.8 0.8 0.8 11.5 6.9

Headcount 126,490 131,730 136,734 135,920 138,552 135,920 147,447

Util. (incl. trainees) 76.9 76.1 73.5 74.1 75.5 75.1 75.6

E: MOSL Estimates

Company descriptionWipro is the third largest Indian IT services company

and the largest third-party BPO operator in India. It is

the largest third-party R&D services provider globally,

employing over 138,000 employees. It offers among the

widest range of IT and ITeS services and its corporate

governance and transparency are at the highest level

in the industry.

Wipro has a balanced vertical spread - BFSI (27%),

Manufacturing and Hi-Tech (19%) Global Media and

Telecom (16%) and Retail and Transportation (15%)

being the key revenue sources.

Geographically, Americas contributes 52% to revenues

(FY12) and Europe contributes 28%. India & Middle East

constitute 9% of revenues.

Key investment positives It is the largest player in infrastructure management

services (IMS), the fastest growing service line for

Indian IT companies.

It has a strong presence in domestic and emerging

markets, growing ahead of developed markets.

Post restructuring, company has seen impressive

client additions and mining of large clients to

increase its number of customers in the higher

contribution buckets (USD100m+ clients up from 1

to 8 in 6 quarters).

Key challenges Risk pricing in FPP projects could go wrong (45.6%

revenues from FPP in 1QFY13).

Increased investments in the pursuit for growth will

keep margins muted in the near term. Margin

recovery will be hit if growth challenges persist

over the medium term.

Key news flows / triggers to watch Wipro has won a multi-year engagement with a

leading communication service provider in North

America, to provide technical support services and

in future, enable a set of IT and Operations

transformation initiatives.

If volumes growth does not pick up, the company

could witness further pressures on its valuation

relative to peers like Infosys.

1QFY13 highlights; guidance for FY13, FY14 Weak 2Q guidance (0.3-2.3% QoQ USD revenue

growth) on the top of soft 1Q more than dent any

expectations of restructuring exercise bearing fruit

in FY13. Muted guidance was on account of

continued weakness in Investment Banks and India

region.

Continued investment in hunters and ~180bp

negative impact from wage hikes bode negatively

for near term margins.

167August 27 - 31, 2012


Wipro: Financials and valuation


Y/E March 2011 2012 2013E 2014E

Sales 310,986 375,248 436,439 473,218

Change (%) 14.7 20.7 16.3 8.4

Operating Costs 204,639 253,045 292,945 321,771

SG&A 40,467 48,062 60,502 62,868

EBITDA 65,880 74,141 82,991 88,578

% of Net Sales 21.2 19.8 19.0 18.7


EBIT 57,669 64,012 71,913 76,567

Margins 18.5 17.1 16.5 16.2

Other Income 4,718 5,404 6,222 7,307

Income from Eq. Inv. 648 333 -408 -408

PBT 63,035 69,749 77,728 83,466

Tax 9,896 13,762 15,373 16,775

Rate (%) 15.7 19.7 19.8 20.1

PAT 53,139 55,987 62,354 66,691

Minority Interest -345 -256 -388 -388

PAT bef EO 52,794 55,731 61,966 66,303

Extraordinary items 182 0 0 0

Net Income 52,976 55,731 61,966 66,303

Change (%) 15.3 5.2 11.2 7.0


Y/E March 2011 2012 2013E 2014E

Share Capital 4,908 4,917 4,920 4,920

Reserves 234,772 280,397 322,915 374,883

Net Worth 239,680 285,314 327,835 379,803

Minority Interest&others 13,710 10,492 10,369 10,369

Loans 52,802 58,958 63,895 63,888


Gross Block 99,346 113,369 122,894 138,894


Net Block 55,094 58,988 68,513 84,513

Investments 49,282 41,961 70,105 70,105

Intangible Assets 58,369 72,166 79,053 79,053

Other non current assets 22,682 27,897 30,180 31,835

Curr. Assets 186,016 234,989 263,620 309,561

Debtors 85,776 110,353 131,559 143,537

Inventories 9,707 10,662 13,153 14,261


Adv., Other Current Assets 29,392 36,308 45,942 51,654





Y/E March 2011 2012 2013E 2014E

Volume Growth (%) 16.8 11.5 6.9 12.1

Headcount 122,385 135,920 147,447 166,007

Utilization (%) 77.0 75.1 75.6 76.2

*Including trainees

Ratios

Y/E March 2011 2012 2013E 2014E

Basic (INR)

EPS 21.6 22.7 25.2 27.0

Book Value 98.6 116.5 133.8 155.0

DPS 4.4 6.0 4.5 5.0

Payout % 20.4 26.4 17.8 18.5

Valuation (x)

P/E 15.6 14.0 13.1

EV/EBITDA 10.9 9.5 8.6

EV/Sales 2.1 1.8 1.6




RoE 24.2 21.2 20.2 18.7

RoCE 20.1 19.4 19.0 17.9

Turnover Ratios

Debtors (Days) 90 95 101 106


Leverage Ratio



Y/E March 2011 2012 2013E 2014E


Cash for Wkg. Capital -12,374 -16,462 -5,196 -7,164

Net Operating CF 43,913 43,994 61,626 63,843


Net Pur. of Investments -28,775 -11,691 -37,314 -1,654

Net Cash from Invest. -38,622 -25,714 -57,917 -29,666

Issue of Shares/Other adj 3,386 7,257 -6,366 0

Proceeds from LTB/STB -4,592 2,780 4,636 -6


Net CF from Finan. -9,028 -1,755 -8,410 -7,034

Free Cash Flow 34,066 29,971 41,024 35,832

Net Cash Flow -3,737 16,525 -4,700 27,143

Opening Cash Bal. 64,878 61,141 77,666 72,966

Add: Net Cash -3,737 16,525 -4,700 27,143

Closing Cash Bal. 61,141 77,666 72,966 100,109

August 27 - 31, 2012 168


Yes Bank



Promoter 26.1 26.1 26.5

Dom. Inst. 14.2 10.9 7.0

Foreign 43.5 51.9 53.7

Others 16.3 11.1 12.9

Stock info

Bloomberg YES IN


CMP (INR) 360

Mcap (USD b) 2.3

52-Wk Range (INR) 389 / 231

1, 6, 12 Rel Perf (%) -1 / 2 / 19



NII 3,542 3,856 4,276 4,482 4,722 16,156 20,958

Change (%) 35.1 23.1 32.3 28.6 33.3 29.6 29.7

Other Income 1,653 2,141 2,114 2,664 2,881 8,571 11,767

Opex 1,944 2,138 2,402 2,842 3,007 9,325 12,465


Change (%) 30.6 37.1 28.1 23.4 41.4 29.4 31.5

Provisions 15 379 224 285 300 902 1,723

PAT 2,161 2,350 2,541 2,718 2,901 9,770 12,512

Change (%) 38.2 33.3 32.9 33.6 34.3 34.4 28.1


NIM (%) 2.8 2.9 2.8 2.8 2.8 2.8 3.0

Loan Growth (%) 26.1 12.7 15.3 10.5 16.4 10.5 18.0

GNPA (%) 0.2 0.2 0.2 0.2 0.3 0.2 0.5

E: MOSL Estimates

Company descriptionUnder the leadership of Mr. Rana Kapoor, YES bank has

posted "above industry" loan growth, healthy return

ratios while maintaining asset quality. With a strong

management team in place, Yes Bank now targets to

scale up its branch network to 900 by FY15 (380 at end

of 1QFY13) and nearly double the balance sheet to

INR1.5t by FY15.

Key investment positives Even in a tight liquidity condition and sharp increase

in bulk deposit rate, bank's performance on keeping

margins stable at 2.8%-3% is impressive and

demonstrates the soundness of ALM and pricing

power. With the interest rate expected to fall YES is

likely to be a biggest beneficiary.

CASA traction remains strong and continuous

improvement in same would provide cushion to

margins. We expect non-interest income (excluding

financial markets) to grow (~20%) largely in line with

balance sheet growth. Half of the branch network is

less than 18 months old and productivity gains from

the same will help to augment CASA growth and

fee income of the bank.

In an uncertain economic environment bank

moderated its loan growth and preferred to

increase its exposure to high rated corporate in form

of investment which is positive. Strong growth,

proven execution capabilities, diversified fee

income and superior return ratios are key positives

for Yes Bank. RoA is expected to remain healthy at

1.5%+ and RoE at ~23% over FY11-13.

Key challenges YES Banks tier I ratio stood at 9.7% (core Tier I at

8.7%) at end of 1QFY13. And with growth expected

to resume in CY13, it becomes imperative for the

bank to raise capital or it may act as a hurdle.

Yes Bank's growth plans are heavily dependent on

strong branch expansion. If there is a delay in getting

branch licenses from RBI, it could impact retail

liability and asset growth.

Key news flows / triggers to watch Faster than expected fall in interest rate and easing

liquidity conditions could lead to surprise on margin

Improvement in economic macro-economic

environment would be beneficial for YES given its

diversified product offering.

1QFY13 highlights; guidance for FY13, FY14 Performance highlights of 1QFY13: Strong traction

in SA deposits continues (+20% QoQ). Sequentially

stable NIM of 2.8% despite challenging

environment. Strong customer asset growth (+7%

QoQ and 32% YoY) led by higher growth in credit

substitutes. Asset quality remains impeccable.

Management guidance: (a) Customer asset CAGR

of 30% over FY12-15 (b) By FY15, SME and Retail loan

mix is targeted to be 30% from the current levels of

~15%. (c) CASA ratio of 30% by FY15 as against 16%

at end of 1QFY13. (d) sustainable RoA target of 1.5-

1.75% and RoE of 22-24%

169August 27 - 31, 2012


Yes Bank: Financials and valuation


Y/E March 2011 2012 2013E 2014E

Interest Income 40,417 63,074 78,196 88,295



Change (%) 58.2 29.6 29.7 25.5


Net Income 18,702 24,728 32,725 40,456

Change (%) 37.2 32.2 32.3 23.6



Change (%) 37.9 29.4 31.5 22.9

Provisions (excl tax) 982 902 1,723 2,634

PBT 10,922 14,500 18,537 22,261

Tax 3,650 4,730 6,024 7,235

Tax Rate (%) 33.4 32.6 32.5 32.5

PAT 7,271 9,770 12,512 15,026

Change (%) 52.2 34.4 28.1 20.1


Core PPP* 12,367 15,024 18,381 22,816

Change (%) 61.7 21.5 22.3 24.1



Y/E March 2011 2012 2013E 2014E



Net Worth 37,941 46,766 57,083 69,472

Deposits 459,389 491,517 575,075 701,591

Change (%) 71.4 7.0 17.0 22.0

of which CASA Dep 47,509 73,921 107,210 142,923

Change (%) 68.6 55.6 45.0 33.3

Borrowings 66,909 141,565 186,845 242,576


Total Liabilities 590,070 736,621 900,648 1,123,422

Current Assets 34,960 35,855 43,688 56,463

Investments 188,288 277,573 344,191 430,239

Change (%) 84.4 47.4 24.0 25.0

Loans 343,636 379,886 448,266 546,884

Change (%) 54.8 10.5 18.0 22.0

Fixed Assets 1,324 1,771 2,201 2,613

Other Assets 21,861 41,535 62,302 87,223

Total Assets 590,070 736,621 900,648 1,123,422

Asset Quality (%)

GNPA (INR m) 805 839 2,308 4,842

NNPA (INR m) 92 175 695 1,490

GNPA Ratio 0.23 0.22 0.51 0.88

NNPA Ratio 0.03 0.05 0.15 0.27


Ratios

Y/E March 2011 2012 2013E 2014E










RoE 21.1 23.1 24.1 23.7

RoA 1.5 1.5 1.5 1.5





Cost/Income* 35.5 38.3 40.4 40.5

Empl. Cost/Op. Exps. 53.3 51.0 51.5 50.3



* ex treasury



CASA Ratio 10.3 15.0 18.6 20.4



CAR 16.5 17.9 16.5 15.1

Tier 1 9.7 9.9 9.7 9.1

Valuation

Book Value (INR) 109.3 132.5 161.7 196.8

Change (%) 20.2 21.2 22.1 21.7

Price-BV (x) 2.7 2.2 1.8

Adjusted BV (INR) 109.1 132.2 160.4 194.1

Price-ABV (x) 2.7 2.2 1.9

EPS (INR) 20.9 27.7 35.4 42.6

Change (%) 48.9 32.1 28.1 20.1




August 27 - 31, 2012 170





Promoter 43.9 43.7 42.8

Dome. Inst. 13.1 12.5 14.3

Foreign 35.6 37.3 35.5

Others 7.4 6.5 7.5

Stock info

Bloomberg Z IN


CMP (INR) 169

Mcap (USD b) 2.9

52-Wk Range (INR) 176 / 110

1, 6, 12 Rel Perf (%) 14 / 31 / 32



Revenue 6,983 7,184 7,548 8,691 8,430 30,406 35,198

YoY Change(%) 3.2 1.0 0.0 8.9 20.7 3.4 15.8

EBITDA 1,560 2,076 2,160 1,600 2,332 7,395 9,355

YoY Change(%) -16.5 10.1 40.1 -29.5 49.5 -2.2 26.5

EBITDA Margin(%) 22.3 28.9 28.6 18.4 27.7 24.3 26.6

PAT 1302 1600 1376 1630 1570 5907 7069

Adjusted PAT 1,337 1,560 1,393 1,422 1,582 5,712 7,119

YoY Change(%) 10.4 23.6 22.1 -31.8 18.3 -2.4 24.6

PAT Margin(%) 19.1 21.7 18.5 16.4 18.8 18.8 20.2


Ad revenue growth (%) 0 -4 -10 -13 18 -7 17

Domestic subscription growth (%)29 12 23 47 21 28 17

Sports EBITDA loss (INRm) -566 -226 -100 -588 -210 -1,480 -1,018

Non-sports EBITDA margin (%)34.8 36.5 34.0 29.5 34 34 34

E: MOSL Estimates

Company descriptionZEE is a leading player in television broadcasting and

syndication of content overseas, with a portfolio of 30

channels including flagship Zee TV. Post the merger with

Zee News, it added regional channels like Zee Telugu,

Zee Kannada, Zee Marathi and Zee Bangla to the fold.

ZEE has a large Hindi film library and a well-established

reach of over 650m viewers across 168 countries.

Key investment positives With its offering of 30 channels, ZEE addresses

majority of the viewership market in India.

ZEE's flagship channel, Zee TV is placed strongly

among the top three players in the Hindi GEC

segment.

We expect ad revenue CAGR of 15% over FY12-14.

Mandatory digitization to drive better monetization

of domestic subscription and reduce the carriage

and placement expenses.

ZEE is one of the most profitable broadcasting

companies in India.

Key challenges Lower ad spends led by macro slowdown.

Higher-than-expected losses in the sports business

Potential negative regulatory developments

related to restriction on ad durations.

Potential postponement of the digitization

deadlines. Currently the timeline for mandatory

digitization of four metros is October 31st 2012.

Key news flows / triggers to watch Successful implementation of mandatory

digitization.

Potential pick-up in adverting growth led by

increased spends by FMCG companies and/or

recovery in the economic outlook.

Ramp-up of domestic subscription revenue,

especially in the geographies where mandatory

digitization is being implemented.

Ad revenue and core margins trajectory as ZEE ramps

up original programming hours.

Operating Loss in the sports business.

1QFY13 highlights; guidance for FY13, FY14 1QFY13 PAT grew 18% YoY (11% QoQ) to INR1.58b,

(v/s estimate INR1.5b). EBITDA, PBT were 17-20%

above estimate; PAT was dragged by higher tax rate.

Key positives: 1) Ad growth bounce-back and

2) Superior margin performance led by cost cutting.

Revenue grew 21% YoY to INR8.4b. Ad revenue

grew 18% YoY and 8% QoQ to INR4.47b.

Flagship Zee TV's average GRPs improved from 158

in 3QFY12 to 215 in 1QFY13. Zee would be increasing

programming hours in coming quarters.

Subscription revenue up 19% YoY to INR3.6b led by

domestic as well as international.

EBITDA grew 49% YoY to INR 2.3b. Margin rose 5pp

YoY to 27.7%. Sports loss was INR210m. Core (non-

sports) EBITDA margin grew 470bp QoQ to 34.2%.

171August 27 - 31, 2012


Zee Entertainment Enterprises: Financials and valuation


Y/E March 2011 2012 2013E 2014E

Net Sales 29,414 30,406 35,198 39,742

Change (%) 33.9 3.4 15.8 12.9

Total Income 29,414 30,406 35,198 39,742

Total Expenses 21,849 23,011 25,843 29,126

EBITDA 7,565 7,395 9,355 10,616

Change (%) 24.3 -2.2 26.5 13.5

% of Net Sales 25.7 24.3 26.6 26.7


EBIT 7,276 7,073 8,954 10,171

Other Income 1,070 1,204 1,218 1,524

Interest & Finance Charges 103 50 73 76

Extraordinay Income 897 180 0 0

PBT 9,140 8,407 10,098 11,620

Tax 2,751 2,500 3,030 3,486

Effective Rate (%) 30.1 29.7 30.0 30.0

PAT 6,390 5,907 7,069 8,134

Minority Interest -118 15 -50 -50

Extraordinay Income 656 180 0 0

Adj. PAT 5,852 5,712 7,119 8,184

Change (%) 24.9 -2.4 24.6 15.0


Y/E March 2011 2012 2013E 2014E


Reserves 29,970 33,396 38,427 44,211

Net Worth 30,948 34,355 39,386 45,170

Minority Interest -119 -32 0 0

Loans 17 12 12 12

Deffered tax liability -192 -337 -337 -337


Net Fixed Assets 8,064 9,001 9,100 9,155

Capital WIP 399 399 399 399

Investments 6,964 7,999 7,999 7,999

Curr. Assets, Loans&Adv. 23,026 25,414 30,716 37,361

Program Films 5,382 7,339 7,598 8,667

Sundry Debtors 8,955 8,690 10,060 11,359

Cash & Bank Balances 3,858 3,283 5,826 9,170

Loans & Advances 4,818 6,101 7,232 8,166



Appl.of Funds 30,654 33,997 39,061 44,844


Y/E March 2011 2012 2013E 2014E

Sports/Non-sports break-up

Revenue 29.4 30.4 35.2 39.7

-Sports 4.4 3.9 4.7 5.3

-Non-sports 25 26.5 30.5 34.5

EBITDA 7.6 7.4 9.4 10.6

-Sports -2.1 -1.5 -1 -0.8

-Non-sports 9.6 8.9 10.4 11.4

EBITDA margin (%) 25.7 24.3 26.6 26.7

Sports -47.1 -37.6 -21.6 -15.1

Non-sports 38.6 33.5 34 33.1

Ratios

Y/E March 2011 2012 2013E 2014E

Basic (INR)

EPS 6.0 5.9 7.4 8.5

Cash EPS 6.3 6.3 7.8 9.0


DPS 2.4 1.5 1.9 2.1


Valuation

P/E 28.7 22.8 19.8

Cash P/E 26.9 21.6 18.8

EV/EBITDA 20.4 15.9 13.7

EV/Sales 5.0 4.2 3.6




RoE 16.9 17.5 19.3 19.4

RoCE 23.8 25.5 27.8 27.9

Turnover Ratios


Inventory (No. of Days) 115 169 150 150

Creditors (No. of Days) 71 93 90 90


Leverage Ratio

Debt/Equity (x) 0.0 0.0 0.0 0.0


Y/E March 2011 2012 2013E 2014E


Interest/Div. Received 1,070 1,204 1,218 1,524

Interest paid -103 -50 -73 -76

Depreciation & Amort. 288 323 401 445


(Inc)/Dec in Wkg. Capital -638 -1,946 -2,422 -2,384


Extraordinary Items 656 180 0 0

CF after EO Items 656 180 0 0

(Inc)/Dec in FA + CWIP 10,835 -1,259 -500 -500


CF from Invest. Activity 7,074 -2,294 -500 -500

Issue of Shares -11,602 -1,130 -226 -304

Inc/(Dec) in Debt -1,178 -5 0 0

Dividends Paid -2,341 -1,428 -1,780 -2,046

Others 0 0 0 0

CF from Finan. Activity -15,121 -2,563 -2,006 -2,350

Inc/(Dec) in Cash -2,006 -574 2,542 3,344


Closing Balance 3,858 3,284 5,825 9,170

172August 27 - 31, 2012


Company descriptionBajaj Finance is a subsidiary of Bajaj Finserv, which

holds ~61% stake in the company. The company has

transformed itself from a captive auto financier offering

two wheeler loans for Bajaj Auto to a well diversified

retail loan provider. The company currently offers loans

for Bajaj Auto two-wheelers under the name of Bajaj

Finance and other consumer durable loans, personal

loans, small business and construction equipment loans

under the name of Bajaj Finserv Lending. As on June

2012, the company had AUM of INR145b.

Key investment positives Bajaj Finance has successfully transformed itself

from a captive two-wheeler financier to a full-

fledged player in the consumer financing space. The

company has further diversified its product

portfolio by entering into small business loans, CE

and infrastructure financing, which would help the

company to grow at a steady clip.

Shifting the target customer segment from mass

segment to affluent and mass affluent and with

tighter controls and risk management processes in

place, Bajaj F inance has witnessed steep

improvement in its asset quality. Moreover,

substantial chunk of AUMs in the retail / consumer

segment (~40%) too has helped in improving /

maintaining healthy asset quality.

As on 1QFY13, the company maintains a PCR of more

than 90%, which provides adequate cushion to

absorb any asset quality shock.

Bajaj Finance

Key challenges Moderation in economic activity leading to 1)

slowdown in consumer spending and 2) slower

rampup in some of the new business verticals such

as CE and infrastructure financing could pose a

threat to Bajaj Finance's growth and asset quality.

SME segment constitutes ~45% of total portfolio,

which in the current environment lead to higher

stress on the balance sheet.

Key news flows / triggers to watch Growth trends in the coming quarters, as seasonally

Q2 and Q3 are being strong quarters led by festive

season.

Asset quality trends of some of the retail focused

private banks

Company may look to raise capital towards the end

of this fiscal

1QFY13 highlights; guidance for FY13, FY14 In 1QFY13, BFL's PAT grew 53% YoY on the back of

strong 60% YoY growth in its AUMs. Asset quality

remained healthy with loan loss provisions (as % of

AUMs) at 0.8% (annualized) v/s 1.3% for FY12.

For FY13, management has guided for AUM growth

of 25-30%.

On a long term sustainable basis, RoA is expected

to be ~3% and RoE 18-20%.

The company targets to raise ~INR7.5b in the next

round capital raising to address growth needs of

the next three years.



Promoter 61.1 61.1 56.1

Dom. Inst. 12.1 12.0 13.0

Foreign 10.1 9.5 10.4

Others 16.7 17.4 20.5

Stock info

Bloomberg BAF IN


CMP (INR) 1,079

Mcap (USD b) 0.8

52-Wk Range (INR) 1133 / 585

1, 6, 12 Rel Perf (%) 8 / 37 / 52




YoY Gr. (%) 37.9 36.8 39.5 39.4 41.2 44.8 37.8


YoY Gr. (%) 28.7 23.7 33.4 39.6 41.0 45.6 31.5

Provisions 342 441 358 400 320 2,050 1,540

PBT 1,346 1,289 1,775 1,610 2,060 3,700 6,020

Tax 438 415 575 530 680 1,230 1,960

PAT 908 874 1,200 1,080 1,380 2,470 4,060

YoY Gr. (%) 94.1 65.6 57.1 52.0 53.0 177.5 64.4


AUM (INR b) 90.3 100.7 119.2 131.1 144.9 75.7 131.1

RoAA (%) 4.8 4.0 4.8 3.6 4.4 4.4 4.2

Net NPA (%) 0.5 0.3 0.3 0.1 0.1 0.8 0.1

E: MOSL Estimates

173August 27 - 31, 2012


Company descriptionBajaj Finserv is a financial services holding company

with diversified interests in insurance (life and non-

life), lending and asset management businesses. While

the insurance businesses are into separate joint

ventures with JV partner Allianz (both life and non-life),

the lending business is housed under its subsidiary

Bajaj Finance (formerly known as Bajaj Auto Finance).

Bajaj F inserv currently holds 74% in each of the

insurance ventures and ~61% in Bajaj F inance

(subsidiary).

Key investment positives Bajaj Finserv is a well diversified financial services

player with strong presence in the insurance,

lending and wealth management businesses.

In the life insurance business, the company

continues to focus on profitable growth and has

sacrificed market share to improve profitability. As

a result, the life insurance business recorded profit

of INR13b in FY12 v/s INR10.6b in FY11. The

improvement in profitability could be attributed to

tight control on opex as the Commission ratio

declined to ~5% from 15% in FY08 and the Opex ratio

moderated to slightly over 15% from 20%+ in FY08.

In the general insurance business, the company

retains the second position. BAGIC achieved a PAT

of INR1.2b in FY12 driven by strong operating

efficiencies by bringing in the combined ratio down

to 96% from 101% in FY09.

Bajaj Finserv

Bajaj Finance is rapidly growing its loan book by

diversifying into different product segments and

has substantially improved its asset quality leading

to steep improvement in its return ratios. In FY12,

BFL contributed ~17% of Bajaj F inserv's

consolidated profits.

Key challenges Regulatory risk is a major challenge in the insurance

business.

Significant deterioration in asset quality /

moderation in asset growth for Bajaj Finance could

affect consolidated profitability of Bajaj Finserv.

Key news flows / triggers to watch Announcement regarding hiking FDI in the

insurance sector. However, Bajaj Finserv already has

an agreement in place through which Allianz can

increase its stake in the life and general insurance

business at a predetermined price.

1QFY13 highlights In 1QFY13, Bajaj Finserv reported PAT of INR1.95b

up 52% YoY. Nearly 43% of the profits for the quarter

came in from Bajaj Finance.

BALIC's new business premium for the quarter grew

by 28% YoY as against 6.4% YoY growth for the

industry. Meanwhile, the gross written premium

(excl. pool) for BAGIC grew 18% YoY.



Promoter 58.9 58.9 58.4

Dom. Inst. 5.1 5.3 6.1

Foreign 10.5 10.4 9.8

Others 25.5 25.5 25.7

Stock info

Bloomberg BJFIN IN


CMP (INR) 897

Mcap (USD b) 2.3

52-Wk Range (INR) 954 / 392

1, 6, 12 Rel Perf (%) 28 / 68 / 75



Gross Written Premium

Life Insurance 13,877 16,785 16,739 27,438 12,114 96,100 74,838

General Ins. 7,981 8,106 7,754 12,918 9,773 31,294 36,759

PAT(Cons.) 1,287 1,582 1,701 8,808 1,952 11,148 13,378

Breakup

Bajaj Finserv * 122 421 145 78 100 1,883 766

BALIC 388 427 460 8,428 548 7,822 9,703

BAGIC 288 470 442 -285 477 320 915

Bajaj Finance 508 489 672 606 846 1,301 2,275

BA Fin. Dist. 2 3 3 3 3 10 11

Bajaj Fin. Solutions -21 -23 -21 -22 -22 -70 -87

Intercompany Adj. 0 -205 0 0 0 -118 -205

*Standalone

174August 27 - 31, 2012


Company descriptionConcor controls ~74% of container rail business in India.

It has ~250 operational rakes and an extensive network

of 61 terminals. Even post the liberalization of the

industry in 2006, Concor has been able to continue its

dominance, primarily due to its ownership of ~61

terminals, which partially insulates it from high haulage

charges by Indian railways. Concor is now aiming to re-

position itself as a total logistics and transport solutions

company, to its customers by expanding across all

segments of the transport value chain in the EXIM as

well as Domestic segments. Concor's total throughput

for the year FY11 was 25,62,297 TEUs, up 5.8% YoY.

Key investment positives By virtue of its strategic capital intensive assets,

Concor enjoys significant entry barriers and

sustainable competitive advantage.

The current share of containerization in India is

~25%, as compared to ~60-70% for the world market.

The share of rail transport is expected to increase in

India, once the dedicated freight corridor is

completed in the next 2-3 years.

Concor is debt free and enjoys high FCF's, which

positions it favorably to leverage on the huge

opportunities in the logistics vertical.

Container Corporation of India

Key challenges Concor till FY06 was a virtual monopoly player in

the container rail business in India. Since FY06,

almost ~15 new players have entered the segment,

resulting in new challenges for the company.

In FY10, Indian railways hiked haulage charges by

~37%, which negatively impacted the viability of

rail transport compared to road transport.

Concor has plans transform itself from a container

rail transporter to a total transport provider, while

this opens up significant new growth opportunities,

it could also result in new challenges for the

company.

Key news flows / triggers to watch It plans to re-position itself as a total logistics player

and expand its presence into various segments of

the transport value chain in the EXIM as well as the

domestic market. Concor has earmarked ~INR16b

for the same.

1QFY13 highlights; guidance for FY13, FY14 1QFY13, net sales increased 9.3% YoY to INR10.3b,

while net profit was up 4.7% YoY to INR2.5b.

Increase in container rakes by ~30 in FY13.

Capex of ~INR16b for FY13, which includes INR7b

for land acquisitions.



Promoter 63.1 63.1 63.1

Dom. Inst. 7.1 7.3 7.2

Foreign 25.6 25.7 26.5

Others 4.3 4.0 3.2

Stock info

Bloomberg CCRI IN


CMP (INR) 947

Mcap (USD b) 2.2

52-Wk Range (INR) 1,057 / 805

1, 6, 12 Rel Perf (%) 2 / 0 / -6



Net Sales 9,490 9,946 10,463 10,711 10,370 38,349 40,610

Changes (%) 3.6 5.3 7.7 6.9 9.3 3.5 5.9

EBITDA 2,597 2,628 2,773 2,240 2,672 10,066 10,241

Changes (%) 5.1 0.4 -0.8 2.8 2.9 4.7 1.7

EBITDA Margin (%) 27.4 26.4 26.5 20.9 25.8 26.2 25.2

Reported PAT 2,342 1,754 2,412 2,271 2,451 8,760 8,779

Adjusted PAT 2,342 1,754 2,412 2,271 2,451 8,767 8,778

Changes YoY (%) 21.0 -15.1 5.6 -8.1 4.7 11.4 0.1

PAT Margin (%) 24.7 17.6 23.1 21.2 23.6 22.9 21.6

E: MOSL Estimates

175August 27 - 31, 2012


ICRA

Company descriptionICRA is one of India's leading credit rating agencies set

up in 1991 by various financial institutions and

commercial banks to act as an independent and

professional credit rating agency. The international

credit rating agency Moody's is the largest shareholder

in the company holding 28.5%. ICRA currently offers

rating services, IPO grading, consulting services and

knowledge process outsourcing services among others.

Key investment positives ICRA has very well diversified product offerings viz.

1) rating services, 2) consulting services, 3) out-

sourcing and information services and 4)

professional and I.T. services. Though, large share

of revenues (65%+ in FY12) come from rating

services, it has created different segments within

rating services viz. corporate, financial sector,

structured finance which completes the whole

gamut of offerings.

The increase in rating services income (INR1.4b in

FY12 v/s INR1.3b) was attributable largely to the

expansion of bank loan ratings. With Basel II

approach wherein risk weights are lower for high

rated corporate and state-owned banks increasing

focus on capital conservation would demand for

rating of corporate is expected to increase which

would be beneficial for ICRA.

Bond market in India is at a nascent stage and as it

develops there would be increased need especially

mid-corporate and SME for getting rated which

would provide opportunities.

Key challenges Increasing competitive pressures on account of

aggressive pricing and rating strategies adopted by

competitors could adversely impact revenues.

Volumes to likely depend on the movement in

interest rates and systemic liquidity conditions.

High interest rates and sluggish markets could

adversely affect volumes and thereby revenues.



Promoter 28.5 28.5 28.5

Dom. Inst. 43.2 43.0 43.8

Foreign 8.0 7.4 9.2

Others 20.3 21.2 18.4

Stock info

Bloomberg ICRA IN


CMP (INR) 1,161

Mcap (USD b) 0.2

52-Wk Range (INR) 1,350 / 797

1, 6, 12 Rel Perf (%) -9 / 10 / 8

Quarterly Performance (Consolidated) (INR Million)

Y/e March Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 FY11 FY12


Change (%) (5.6) 7.2 14.8 11.1 31.3 18.9 7.5

Operating Expense 347 382 367 399 438 1,318 1,496

Change (%) 19.8 29.1 6.2 3.1 26.2 24.7 13.5

EBITDA 69 156 245 322 125 740 792

Change (%) (56.5) (27.1) 44.6 62.0 81.7 (6.7) 7.1

EBITDA Margin (%) 17.7 30.0 45.2 51.5 24.5 38.3 38.2

Reported PAT 36 86 174 243 87 481 539

Adjusted PAT 36 87 174 243 85 481 540

Change (%) (66.2) (39.8) 54.6 106.2 136.1 (10.0) 12.3

PAT Margin (%) 9.3 16.7 32.1 38.8 16.7 24.9 26.0

176August 27 - 31, 2012


Manappuram Finance



Promoter 31.6 31.6 36.5

Dom. Inst. 2.0 0.9 1.5

Foreign 47.8 48.8 45.5

Others 18.6 18.8 16.6

Stock info

Bloomberg MGFL IN


CMP (INR) 37

Mcap (USD b) 0.6


1, 6, 12 Rel Perf (%) 11 / -17 / -36

Company descriptionManappuram Finance Ltd. (MGFL; formerly known as

Manappuram General Finance and Leasing) is the

second largest gold loan player in India. As on Jun'12, it

operates through a network of 2,971 branches, has a

customer base of 1.62m and AUM of ~INR109b.

Manapurram has also introduced Instant Money Transfer

service in collaboration with UAE Xchange, Wallstreet

and MoneyGram.

Key investment positives MGFL is the second largest gold loan company in

the country and it remains among one of the

preferred financiers given its strong brand recall,

better services and low turnaround time. During the

period FY07-12, MGFL has grown its AUM at 85%

CAGR.

The gold loan market in India is highly unorganized

and remains largely dominated by local money

lenders. In such a scenario, MGFL stands well poised

to grab market share by offering competitive rates

compared to local money lenders and being more

efficient as compared to banks offering similar

product.

High collateral value and lower loss ratios has

resulted into healthy asset quality. As on Jun'12,

MGFL's net NPA ratio stood at 0.7%.

Post the recent regulatory changes, the growth for

gold loan companies is expected to moderate.

However, we expect growth to pick up in the

medium term on a more sustainable basis.

Key challenges FY13 is likely to be a year of consolidation for gold

loan companies on the back of the regulatory

changes announced by the RBI. Capping of LTV at

60% could lead to business moving back to the

unorganized sector.

Intensifying competition from banks in this

business can make difficult to achieve higher

growth.

Key news flows / triggers to watch While the RBI has capped LTV at 60%, drop in gold

prices can impact growth led by demand for more

gold from customers.

Steep decline in gold prices may also impact asset

quality of these players and hence remains a key

monitorable.

1QFY13 highlights; guidance for FY13, FY14 In 1QFY13, MGFL's AUM grew by 20% YoY, though

declined by 7% QoQ on the back of changes in RBI

guidelines capping LTVs at 60%.

Profits for the quarter grew by 46% YoY, though

down 16% QoQ.

GNPAs increased sequentially to 0.89% from 0.55%

in 4QFY12 as the delay in auctioning process due to

regulatory changes affected asset quality.

For FY13, the management targets 10-15% AUM

growth, largely back-ended. The company plans to

add 200-250 branches against ~840 branches added

in FY12.



Net Operating Income 3,145 3,713 4,300 4,362 4,170 8,263 15,520

Change (%) 121.2 107.2 84.3 49.4 32.6 148.1 87.8

Operating Expenses 1,424 1,687 1,870 1,716 1,871 3,802 6,697

Change (%) 101.6 98.1 84.9 12.2 31.4 161.8 76.1


Change (%) 138.8 119.9 87.7 98.7 41.4 135.8 96.5

Adjusted PAT 1,078 1,353 1,614 1,869 1,578 2,827 5,914

Change (%) 133.6 125.2 116.5 135.1 46.4 136.1 109.2


AUM 90,296 106,010 123,582 116,308 108,515 75,492 116,308

AUM Gr. (%) 167.4 113.9 90.2 54.1 20.2 190.5 54.1

Gold Stock (MT) 60.1 65.2 69.5 65.6 60.6 53.0 66

NNPA (%) 0.3 0.3 0.2 0.3 0.7 0.1 0.3

177August 27 - 31, 2012


Muthoot Finance



Promoter 80.1 80.1 80.1

Dom. Inst. 4.3 3.5 1.6

Foreign 12.1 12.4 13.2

Others 3.6 4.0 5.2

Stock info

Bloomberg MUTH IN


CMP (INR) 132

Mcap (USD b) 0.9

52-Wk Range (INR) 191 / 106

1, 6, 12 Rel Perf (%) -3 / -20 / -31

Company descriptionMuthoot Finance Ltd. (MFL) is the largest gold financing

company in India in terms of asset under management

(AUM of INR233bn as on Jun'12). As on Jun'12, the

company operated through a network of 3,780 branches

spread across the country with nearly 64% of branches

concentrated in the southern states. Of the outstanding

gold loan portfolio, 67% is concentrated in the southern

region, followed by northern (18%) and western (10%)

regions.

Key investment positives In terms of sheer size, MFL is the largest gold loan

company in the country. MFL has achieved its

leadership position in this niche business segment,

given its strong domain knowledge, brand

reputation, widespread distribution network and

operational efficiency to achieve scale along with

profitability, while maintaining quality.

The gold loan market is highly unorganized and

largely dominated by local money lenders. Muthoot

is well poised to grab market share by offering

competitive rates compared to local money lenders

and being more efficient as compared to banks

offering similar product.

Post the recent regulatory changes, the growth for

gold loan companies is expected to moderate.

However, we believe in the medium term MFL can

achieve a more sustainable growth rate of ~20%.

Key challenges FY13 is likely to be a year of consolidation for gold

loan companies on the back of the regulatory

changes announced by the RBI. Capping of LTV at

60% could lead to business moving back to the

unorganized sector.

Intensifying competition from banks in this

business can make difficult to achieve higher

growth.

Key news flows / triggers to watch While the RBI has capped LTV at 60%, drop in gold

prices can impact growth led by demand for more

gold from customers.

Steep decline in gold prices may also impact asset

quality of these players and hence remains a key

monitorable.

1QFY13 highlights; guidance for FY13, FY14 In 1QFY13, MFL's AUM grew by 30% YoY, though

declined by 5% QoQ on the back of changes in RBI

guidelines capping LTVs at 60%.

Profits for the quarter grew by 29% YoY and 5% QoQ

as the company maintained tight leash on operating

expenses.

GNPAs increased sequentially to 1.28% from 0.56%

as the delay in auctioning process due to regulatory

changes affected asset quality.

For FY13, the management targets 10-15% AUM

growth, largely back-ended. Return ratios expected

to stabilize at current levels.



Net Operating Income 4,735 5,532 5,920 5,756 5,932 12,657 21,581

Change (%) 95.9 66.2 38.1 25.3 109.6 70.5

Operating Expenses 1,786 2,248 2,165 2,291 2,113 4,897 8,129

Change (%) 95.5 70.1 18.3 18.3 82.7 66.0


Change (%) 93.2 62.8 54.1 28.6 128.3 72.2

Adjusted PAT 1,905 2,156 2,509 2,351 2,461 4,942 8,919

Change (%) 88.3 61.3 68.7 29.2 117.1 80.5


AUM 179,492 209,405 228,850 246,736 233,359 158,685 246,736

AUM Gr. (%) 96.5 81.3 66.0 55.5 30.0 113.3 55.5

Gold Stock (MT) 120.0 130.0 132.0 137.0 130.0 112.0 137.0

GNPA (%) 0.3 0.6 0.6 0.6 1.3 0.3 0.6

178August 27 - 31, 2012


Radico Khaitan



Promoter 40.4 40.4 40.0

Dome. Inst. 10.1 10.6 14.7

Foreign 26.4 26.2 27.5

Others 23.1 22.8 17.8

Stock info

Bloomberg RDCK IN


CMP (INR) 106

Mcap (USD b) 0.3

52-Wk Range (INR) 135 / 92

1, 6, 12 Rel Perf (%) -12 / -8 / -23

Company descriptionRadico Khaitan (RDCK) is India's oldest alcoholic

beverage company. It entered the IMFL segment in 1999,

with the launch of its flagship brand, 8PM. RDCK has

three distilleries in Rampur, UP and holds 36% interest

in a JV in Aurangabad, Maharashtra. It owns six bottling

units and maintains 27 contract bottling units. It holds

8% market share in the IMFL industry and ~24% market

share in the CSD segment. The company offers all types

of liquor, except for beer and wine, in regular and

premium categories.

Key investment positives Radico is a pure India play on the huge growth

opportunity in the IMFL space.

Rising sales of Magic Moments Vodka and new

launches (After Dark Whisky, Morpheus brandy) in

the premium segment will reduce dependence on

mass segment and improve profitability.

A large spirits capacity, a pan India distribution

(second only to United Spirits) and increasing focus

on premium segment gives Radico an edge over

other emerging IMFL players.

Decline in molasses and glass prices could improve

margins and profitability.

Key challenges Increasing competition can reduce the success rate

for new launches in premium segment as many

mid- sized players are eyeing this segment.

Firm molasses prices and higher glass bottle costs

could restrict margin expansion in FY13.

Govt regulations regarding distribution, pricing and

taxes on IMFL and inputs (Molasses and Grain) are a

threat to industry profitability and cash flows.

Key news flows / triggers to watch Movement in molasses/grain and crude (28% of

glass cost) prices.

Success of new launches in the premium space,

After Dark Whisky and Morpheus brandy can

improve volume growth and margin profile.

Impact of increase in competition on existing

brands.

1QFY13 highlights; guidance for FY13, FY14 Premium Brands volume growth of 21.0%.

Morpheus Premium Brandy volume growth of

50.0%.

Magic Moments Vodka volume growth of 17.7%.

Price increases received in the state of Kerala

Launched Florence, a super premium brandy, in

Tamil Nadu.

The company has planned capex of ~INR400m in

FY13, funded by internal accruals.




Change (%) 21.9 18.4 8.3 23.1 2.1 20.3

EBITDA 459 431 500 353 586 1,809

Change (%) 29.3 10.7 14.5 -9.3 27.6 11.8

EBITDA Margin (%) 16.1 16.4 17.2 12.9 20.1 16.5

Reported PAT 207 148 237 45 211 637

Adjusted PAT 207 183 212 170 211 761

Change (%) 29.2 0.5 3.7 -6.9 1.8 4.6

PAT Margin (%) 7.3 7.0 7.3 6.2 7.3 6.9

179August 27 - 31, 2012


Raymond



Promoter 39.5 39.5 39.1

Dom. Inst. 25.5 26.9 28.2

Foreign 10.5 10.4 7.7

Others 24.4 23.2 25.0

Stock info

Bloomberg RW IN


CMP (INR) 362

Mcap (USD b) 0.4

52-Wk Range (INR) 439 / 300

1, 6, 12 Rel Perf (%) -6 / 0 / -1

Company descriptionIncorporated in 1925, Raymond is an integrated textiles

company, with presence across the vertical – from fabric

to retail.

In textiles, Raymond is increasingly moving away from

capital intensive segments to high-margin, high-return

segments, positioning itself as a brand and retail play.

Besides textiles, it also has a presence in engineering

and auto components businesses.

Key investment positives There is tremendous scope to increase efficiencies

and rationalize costs, including lower working

capital, higher focus on key brands, etc.

Raymond has now identified four key apparel

brands to focus on - Park Avenue, Parx, Color Plus

and Raymond Premium Apparel. It will direct bulk

of its advertisement and promotional initiatives

(INR1.7b advertisement expenditure in FY12). In

this regard, over the last one year it has slowly

phased out several unprofitable brands such as

Manzoni (Premium luxury), Zapp (Kid's wear) and

GAS (JV brand).

Raymond added 269 new stores (net) over FY10-12,

taking its retail store count to 853 in FY12 from 584

stores in FY09. The management has a target of

having presence across all Class 1-5 cities/ towns. In

this regard it has identified ~435 towns where it

would like to have its TRS (The Raymond Store)

format retail presence over the next 3-4 years.

Key challenges Raymond faces near-term challenges of rising input

prices and poor consumer demand, particularly in

its branded apparel business. However, over the

longer term, it is one of the strongest plays in the

branded garment segment, well positioned to

capitalize its strong franchise value.

Key news flows / triggers to watch Post closure of its Thane plant, Raymond has

managed to free up ~125 acres for commercial

development. However, the management has not

shared any concrete plans with regard to

monetization timeline, development plan or cash

flow utilization.

Early monetization of its real estate could be a key

trigger. We estimate the value of its 125 acres land

at Thane plant at INR147/share (based on INR120m/

acre monetized within 2 years, discounted @ 14%).

1QFY13 highlights; guidance for FY13, FY14 The outlook for 1HFY13 remains challenging given

the continuance of several of the above factors.

1QFY13 consolidated results were below estimates,

with net Sales up 9.5% to INR8.4b, while EBITDA

dropped 74% YoY to INR180m.

We expect Raymond's performance to improve

from 2HFY13. We model Raymond's FY13 EBIT to be

flat at INR2.6b and PAT down 10% to INR1.3b.

Adjusting for real estate value, Raymond trades at

EV/ EBITDA of 5x.


Y/E March Jun-11 Sep-11* Dec-11 Mar-12 Jun-12 FY11 FY12

Net Sales 7,649 5,038 9,537 9,574 8,377 30,333 36,395

Change (%) 26.4 11.3 14.1 9.5 126.0 20.0

Total Expenditure 6,934 4,182 8,005 8,777 8,197 28,552 32,129

EBITDA 715 856 1,533 797 180 1,781 4,266

Change (%) LTP 5.1 306.4 -21.3 -74.8 19.1 139.6

As % of Sales 9.4 17.0 16.1 8.3 2.1 16.8 17.8

Depreciation 396 255 433 441 439 1,608 1,658

Interest 362 321 409 443 472 1,243 1,651

Other Income 146 207 119 117 141 990 1,087

Extra-ordinary Items 0 0 0 0 -129 20 107

PBT 105 488 810 30 -590 -81 2,044

Tax 32 126 232 25 -180 614 560

Reported PAT 73 362 578 5 -410 1,695 1,487

Adj. PAT 108 362 617 31 -394 1,695 1,487

Change (%) -147.2 -7.9 - -89.3 - 558.9 -12.3

* Standalone

180August 27 - 31, 2012


AIA Engineering

Company descriptionIncorporated in 1996, Au Financiers is an asset financing

company based out of Rajasthan. The company largely

offers its products and services in the semi urban and

rural parts of the country and has been classified as

"Systemically Important Non Deposit Accepting NBFC".

The company enjoys "A-" rating from CARE and "BBB+/

Positive" rating from CRISIL on its long term

borrowings.

Area of presenceApart from Rajasthan, the company has business

presence in Maharashtra, Gujarat, Goa, Punjab, Madhya

Pradesh and Chhattisgarh with an overall network of

173 Branches. Of the current network of 173 branches,

Au Financiers

~47% of the branches are in the state of Rajasthan (82

branches) alone. Au Financiers aims to expand and

reach out to the un-banked masses pan-India to

identify and finance true entrepreneurial potential.

About the businessAu Financiers operates in the space of vehicle financing

for both new and old vehicles, SME loans, loan against

property and commercial vehicle loans. The company

also offers General insurance & Life insurance products

as a service provider. To diversify its product portfolio,

the company recently started housing finance business

(both rural and micro loans). Moving forward, the

company also plans to diversify further into insurance

and broking business.

Company descriptionAIA Engineering (AIAE) makes high chrome mill

internals, used mainly by the cement, mining and utility

sectors. The company also services different mineral

ores like iron, copper, gold, platinum and zinc for mining

customers in geographies like USA, Canada, Brazil,

South Africa, Australia, etc.

Key investment positives The global market for mill internals for the mining

and the cement sectors is estimated at 2.5mt and

0.3mt, respectively and the market is growing at

4-5%. Bulk of company's revenues come from

consumable wear parts and its revenues to that

extent are shielded from the significant pull back in

capital spending.

The penetration of high chrome mill internals is low

in the mining sector, but it is expected to rise,

opening up significant growth opportunities. AIAE

is aggressively focusing on this space. The company's

rated capacity stands at 200,000 tons per annum;

and in the process to chart out further expansion

plans through a combination of Greenfield and

Brownfield projects to increase the overall capacity

by additional 100,000 tons per annum.

Key challenges AIAE is a single-product company and runs the risk

of moderate growth.

Capacity utilization of the company remains at

around 65-70%, despite which the company is

adding additional capacity of 100k pa on the back of

aggressive demand outlook. Any prolonged slow

down in mining sector could have a significant

negative impact on margins and cashflows.

High steel prices are a key risk to margins and

earnings growth to that extent is linked to

commodity cycle.

Key news flows/triggers to watch Demand from mining sector needs to be monitored.

1QFY13 highlights; guidance for FY13, FY14 AIAE's 1QFY13 revenues at INR4.4b were up 62.7%

yoy, driven by volume growth and weak rupee.

Volumes grew 34% YoY to 40k MT (mining 18k MT)

over a low base in 1QFY12. EBITDA margin of 18.3%

was impacted by forex loss of INR150m.

The management has guided for FY13 volume of

160k-170k MT with growth being driven by the

mining sector (80k MT expected).

EBITDA margin is expected to remain muted due to

(1) weakness in cement segment, and (2) aggressive

pricing in mining segment to secure new clients.

181August 27 - 31, 2012


Company descriptionBajaj Electricals (BEL) operates five strategic business

units – Engineering and Projects (E&P), Appliances,

Fans, Luminaires, Lighting and Morphy Richards.

Key investment positives De-risked business model.

The company has wide range of well accepted

products and distribution network. It has 19 branch

offices spread in different parts of the country

besides being supported by a chain of about 1,000

distributors, 4,000 authorized dealers, over 4,00,000

retail outlets and over 282 Customer Care centers.

Diversified product portfolio and products across

various price points enables the company target

large number of customers.

Key challenges Macroeconomic slowdown and delayed execution

in E&P has increased project costs and hurt margins.

Increasing competition remains a key concern.

Bajaj Electricals

Fort Point Automotive

Key news flows / triggers to watch Recovery in the E&P business with increase in order

inflow.

Order completion and recovery in margins.

1QFY13 highlights; guidance for FY13, FY14 Revenue grew by 22% to INR6.7b while the PAT

growth stood at 8% to INR120mn.

Consumer segment ~60% of 1QFY13 revenue grew

~29% with 10-12% volume growth.

Order backlog post 1QFY13 stood at INR4.5b (down

38% YoY).

EBITDA margins for the quarter decline 40bp to 5.2%

due to drag in margins in the lighting business on

account of higher imports.

Management indicated plans to divest stake in Bajaj

Venture e (a 50:50 JV with a group company for

manufacturing power tools).

The company took 5-10% price hikes across

products.

Company descriptionFortPoint Auto is founded by Mr Sundeep Kumar Bafna

in 1993 with a Hero Honda (now Hero MotoCorp)

dealership. In the same year, it was awarded Hindustan

Motors dealership. In early 2000s, it ventured in the small

car segment with the dealership of Daewoo in Thane

and later switched over to FIAT India. In the year 2003, it

was awarded General Motors India Ltd dealership. In

2006, Mr Bafna took a bold step by surrendering all car

dealerships and taking up Maruti Udyog dealership at

three locations - Mahim, Mahalaxmi, and Thane.

FortPoint represents Hero MotoCorp for 2-wheelers,

Maruti Suzuki for cars, and Eicher Motors for CVs.

Key positives Healthy growth in per capita income, shrinking

replacement cycle together with strong brand pull

for flagship products Splendor and Passion augurs

well for two-wheeler dealership business.

PV dealership business would benefit from healthy

growth in the PV industry as income and aspiration

levels rise coupled with car ownership levels.

While near term pressures exist, CV dealership will

benefit from healthy long term growth with rise in

industrial and economic activity. Post the JV with

Volvo, Eicher HCVs are gaining acceptance among

transporters with improved product quality and

after market service.

Key challenges Current slowdown in demand with weak consumer

and business sentiments to impact dealership

business.

Maintaining market share in increasing competitive

environment to test pricing power and margins,

particularly in the two-wheeler and passenger

vehicle dealership business.

Key news flows / triggers to watch Performance of the Hero branded products

Response to new launches: (1) Ignitor and Maestro

in two-wheeler; (2) Ertiga in passenger vehicle; and

(3) HCV (VE Series) in CVs.

182August 27 - 31, 2012


Company descriptionSiddhi Vinayak Logistics (SVVL), the largest and fastest

growing fleet operator in India, owns more than 3700

trucks of various models and configuration and has an

annual turnover of over INR9b. It operates across

diverse segments like steel, cement, tractors,

chemicals, machinery and is a pioneer in new segments

like commercial vehicle chassis carriers. SVLL is among

the first and largest customer for any CV player in India.

Key positives Given its strong presence across the country and

wide client base, healthy growth in the economic

activity, over the longer term, augurs well for SVVL.

Share of organized transportation is on the rise as

corporate look for complete logistics solutions,

benefiting players like SVVL.

Sidhivinayak Logistics

Key challenges Macro-economic headwinds have impacted the

freight traffic and freight rates, leading to pressure

on logistics companies' profitability.

Availability of truck drivers has been one of the key

challenges being faced by the logistics industry.


activity to boost freight traffic.

Unitech Automobile

Company descriptionUnitech Automobiles, based out of Mumbai, is the

largest Tata Motor's CV dealership with annual sales of

over 11k units. Mr. G.S.Arora (CMD - Unitech

Automobiles) has been associated with the automotive

industry for over 2.5 decades. He has recently entered

passenger vehicle dealership business with the

acquisition of Maruti Suzuki dealership. Apart from the

automobile dealership business, Mr. Arora also runs a

logistics company with over 130 trucks.

Key positives While near term pressures exist, CV volumes are

expected to grow at a healthy rate over the long

term with rise in industrial and economic activity.

Proliferation of hub & spoke model and rise in

consumption spend augurs well for the LCV segment.

PV dealership business would benefit from healthy

growth in the PV industry as income and aspiration

levels rise coupled with car ownership levels.

Key challenges Macro-economic headwinds have impacted the

freight traffic and freight rates, leading to fall in

MHCV volumes.

Maintaining market share amidst increasing

competition in domestic M&HCV industry,

particularly from Daimler (Bharat Benz).



Response to the recently launched Ertiga.

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