antique’s morning presentation - centuryply.com · state-owned enterprise pt pindad to explore...

STRICTLY CONFIDENTIAL

AMPANTIQUE’S MORNING PRESENTATION

Please refer to disclosures at the end of the Research Report

7 November 2016

Market Snapshot

Global Indices Closing % Chg % YTD

Dow Jones 17,888 (0.2) 2.7

NASDAQ 5,046 (0.2) 0.8

FTSE 6,693 (1.4) 7.2

CAC 4,377 (0.8) (5.6)

DAX 10,259 (0.6) (4.5)

Russia 971 (0.2) 28.3

Bovespa 61,598 (0.2) 42.1

Nikkei 16,905 (1.3) (11.2)

Hang Seng 22,643 (0.2) 3.3

Shanghai Composite 3,125 (0.1) (11.7)

Indian Indices Closing % Chg % YTD

Sensex 27,274 (0.6) 4.4

Nifty 8,434 (0.6) 6.1

MSCI India 470 (0.8) 2.3

CNX Midcap 15,193 (1.5) 13.4

BSE Smallcap 12,877 (2.2) 8.8

Flows (USDm) Prev. Day MTD

FII 11 (95)

Provisional flows (USDm)FIIs (51)

Locals 163

Volumes USDbn % Chg

Cash (NSE + BSE) 4.3 25.0

FII F&O Stock Fut Index Fut Net ($ mn) (90) (145)

Open Int (%) 1.1 0.3

ADR/GDR Gainers Last % ChgWipro 9.5 0.6

Infosys 15.0 0.5

Tata Motors 37.8 0.1

ADR/GDR Losers Last % ChgReliance 30.3 (2.1)

SBI 36.2 (1.9)

Dr Reddy 46.1 (1.1)

ICICI Bank 8.1 (0.6)

HDFC 69.2 (0.2)

FROM THE RESEARCH DESK

QUARTERLY RESULTS REVIEW

Supreme Industries LimitedEntering a period of strong plastic pipe demand; outlook forstrong margin remains

Mphasis LimitedSoft quarter; HP at cusp of turnaround

Union Bank of IndiaModest quarter; asset quality outlook turning positive

Century Plyboards (I) LimitedGST and entry into MDF to drive growth ahead

Global NewsThe S&P 500 index finished lower on Friday for the ninth-straight session, itslongest stretch of declines since December 1980. Stocks rose after the openas investors digested a strong report on October jobs growth. But they soonerased their gains as uncertainty surrounding next week's presidential electionrattled markets. The S&P 500 SPX, -0.17% fell 3.44 points, or 0.2%, to2,085.22, with consumer staples shares seeing the largest drop. The DowJones Industrial Average shed 41.84 points, or 0.2%, to 17,888.83.

Japan's Nikkei share average fell to a 2-1/2-week low on Friday after majorstocks like automakers stumbled on continued uncertainty surrounding nextweek's U.S. presidential election. The Nikkei ended 1.3 % lower at 16,905.36,the lowest closing level since Oct. 17.

Sector & Corporate NewsLupin has received notification that the inspection carried out by the UnitedStates Food and Drug Administration in March 2016 at its Goa facility is nowclosed and the agency has issued an Establishment Inspection Report (EIR).This closes all outstanding USFDA inspections at the pharma major's Goa facility.

Tata Motors has singed memorandum of understanding (MoU) with Indonesia'sstate-owned enterprise PT Pindad to explore market potential of Tata-armouredvehicles in Indonesia and other agreed regions of Asean. The MoU also includesa study to check the feasibility of locally assembling Tata-armoured vehicles at PTPindad's facility in Bandung in West Java province of Indonesia.

Gati, has invested in BrownTape, a cloud-based software solutions companywhich helps online merchants manage their orders for multiple e-commercemarketplaces. The alliance will work on the vision of simplifying eCommercefor all levels (small, medium, and large) of online sellers. The company willutilize the BrownTape Platform to develop a unique single-window solution tocustomers by integrating its established pan-India logistics network andBrownTape's multi-channel order management platform.

ANTIQUE STOCK BROKING L IMITED 7 November 2016 ||||| 2FROM THE RESEARCH DESK

Sectoral indices Closing % Chg % MTD % YTD

BSE Auto 21,810 (0.8) (1.7) 17.8

BSE Bank 21,781 (0.6) (2.6) 12.7

BSE Cap Goods 14,342 (1.7) (3.9) 1.5

BSE Cons dur 12,430 (1.6) (3.8) 3.6

BSE FMCG 8,507 1.4 (0.0) 8.1

BSE IT 9,790 0.7 (2.4) (11.5)

BSE Health 15,150 (4.2) (8.0) (10.4)

BSE Metal 10,256 (2.4) (0.6) 38.6

BSE Oil 11,690 (0.6) (5.1) 22.3

BSE Power 1,959 (1.1) (2.4) 0.0

BSE PSU 7,573 (1.3) (4.6) 11.1

BSE Realty 1,457 (2.4) (6.4) 8.3

BSE TECK 5,393 0.3 (2.4) (10.9)

Nifty Outperformers

Price % Chg % MTD % YTD

Hcl Technologies Ltd 795 4.1 3.5 (7.1)

Itc Ltd 249 3.6 3.1 14.6

Tata Motors Ltd-A-Dvr 336 1.1 (2.9) 16.0

Wipro Ltd 453 1.1 (2.6) (19.2)

Hindustan Unilever Ltd 848 1.0 1.1 (1.7)

Mahindra & Mahindra Ltd 1,372 0.8 4.2 7.9

Oil & Natural Gas Corp Ltd 270 0.7 (6.8) 11.5

Nifty Underperformers

Price % Chg % MTD % YTD

Sun Pharmaceutical Indus 652 (7.4) (12.9) (20.6)

Dr. Reddy'S Laboratories 3,080 (5.6) (7.4) (0.9)

Aurobindo Pharma Ltd 728 (5.4) (11.0) (16.9)

Bharti Infratel Ltd 364 (4.4) 4.8 (15.0)

Coal India Ltd 316 (3.4) (2.9) (4.2)

Lupin Ltd 1,421 (3.4) (6.4) (22.7)

Tata Power Co Ltd 75 (2.7) (4.5) 9.9

Bulk DealsDate Security Name Client Name Buy/Sell Qty Price

4-Nov-16 Prakash Constrowell Ltd Adjuvant Technologies Private Limited . BUY 716,442 15.57

4-Nov-16 LT Administrator Of The Specified Undertaking Of The Unit Trust Of I SELL 4,941,234 1,416.05

4-Nov-16 JENBURPH Aries Stocktrades Pvt Ltd A/C-Pms BUY 23,591 566.67

4-Nov-16 Noida Toll Bridge Company Cd Equifinance Private Limited SELL 1,286,251 14.76

4-Nov-16 Noida Toll Bridge Company Cd Finvest Pvt Ltd BUY 1,010,000 14.84

4-Nov-16 ONMOBILE Citigroup Global Markets Mauritius Private Limited SELL 859,666 105.75

4-Nov-16 SUYOG Elara India Opportunities Fund Limited BUY 200,400 450.00

4-Nov-16 Sunil Hitech Engr Ltd Gatsby Merchandise Private Limited BUY 150,000 404.31

4-Nov-16 Jain DVR Equity Shares Il And Fs Financial Services Limited SELL 250,000 55.84

4-Nov-16 PPAP Littlestar Tradelinks Private Limited BUY 188,000 180.00

4-Nov-16 ONMOBILE Nomura Singapore Limited BUY 859,666 105.75

4-Nov-16 Larsen & Toubro Limited State Bank Of India BUY 5,655,000 1,415.58

4-Nov-16 Larsen & Toubro Limited Uti Admnstr Of The Specified Undertaking Of Uti-Unit Schm 64 SELL 4,941,234 1,415.65

4-Nov-16 Sunil Hitech Engr Ltd Vigrah Trading Private Limited . SELL 137,973 404.16

Delivery SpikeCompany Volume Spike (%) Chg (%)

Larsen & Toubro Ltd 15,386,075 4127% -1.69%

Colgate-Palmolive India Ltd 660,184 1324% 3.11%

ITC Ltd 24,362,036 398% 3.64%

Tata Global Beverages Ltd 4,454,271 335% -3.43%

Aurobindo Pharma Ltd 2,447,943 314% -5.36%

Tech Mahindra Ltd 6,218,085 290% 0.48%

Motherson Sumi Systems Ltd 1,588,103 263% -3.87%

Dr Reddy's Laboratories Ltd 314,488 253% -5.60%

Sun Pharmaceutical Industries Ltd 9,723,532 215% -7.41%

Lupin Ltd 1,197,014 181% -3.37%

Derivatives Update

Long Build UpCompany Last % Chg % Chg OI OI (in 000)

HCLTECH 795 4.1 3.5 5,928ITC 249 3.4 4.7 41,573DABUR 298 2.0 5.6 8,753ADANIPORTS 289 0.2 2.7 18,320

Short Build UpCompany Last % Chg % Chg OI OI (in 000)

DRREDDY 3,083 (5.7) 14.5 1,795LICHSGFIN 535 (3.2) 11.2 10,097SUNPHARMA 654 (7.4) 8.2 31,090KSCL 401 (5.5) 5.8 2,573

Short CoveringCompany Last % Chg % Chg OI OI (in 000)

PIDILITIND 695 0.8 (5.9) 2,040HINDUNILVR 848 0.7 (5.4) 5,264TVSMOTOR 394 0.2 (4.8) 5,600PETRONET 361 1.0 (3.9) 6,519

Profit BookingCompany Last % Chg % Chg OI OI (in 000)

INFRATEL 365 (4.7) (10.1) 3,196STAR 1,067 (4.9) (7.3) 1,789GLENMARK 871 (4.7) (2.9) 2,704HINDZINC 257 (3.7) (5.5) 7,370


Economy, Money & Banking

Forex Rate Last % Chg % MTD % YTD

INR~USD 66.7 0.1 0.1 (0.8)

INR~EUR 74.1 (0.2) (1.6) (2.6)

INR~GBP 83.3 (0.6) (2.6) 17.6

Bond Market Last Chg (bps) MTD (bps) YTD (bps)

10 Year Bond 6.8 2 5 (92)

Interbank call 6.0 (24) (20) (100)

Nifty Nifty P/E Nifty P/B

Source: Bloomberg

Sensex FII Provisional Flows (INRcr) DII Provisional Flows (INRcr)

Source: Bloomberg

INR/USD Gold and silver prices Crude prices

Source: Bloomberg

Inflation vs 10 year yield Nifty premium/discount NSE volatility index (%)

Source: Bloomberg

Commodities Update

Commodities Last % Chg % MTD % YTD

Gold ($/Ounce) 1,305 0.1 2.1 22.9

Crude Oil ($/Bl) 44 (1.3) (6.0) 0.5

Aluminium ($/t) 1,716 (0.7) (1.1) 14.4

Copper ($/t) 4,978 0.6 2.8 5.8

Zinc ($/t) 2,435 (1.6) (0.8) 52.8

Lead ($/t) 2,085 0.4 1.8 16.0

Nickel ($/t) 10,419 (0.2) (0.2) 18.7

-7-5-3-113579

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2QFY17 RESULT REVIEW

Supreme Industries LimitedEntering a period of strong plastic pipe demand;outlook for strong margin remainsSupreme Industries Ltd. (SI) 2Q performance was way below our expectations,on back of a weak 1Q. Revenue grew 14.2% YoY to INR8.8bn, supported by16.7% volume growth while average realization declined 2.0%. EBITDA grew46.9% YoY to INR1.3bn as the share of value added products in the overallrevenue mix increased to 34.7% (vs 33.8% YoY) as well as cost reductions onthe fuel and employee front. EBITDA margin increased ~340 bps YoY to 15.1%.Improved operating performance and reduced interest costs flowed intobottomline performance on a low base last year. Core net income grew 80.3%YoY to INR576mn. Adjusting for share of associate profits, net income grew169.7% YoY to INR662mn. SI has maintained its 12-15% volume growth guidancefor FY17e and has become increasingly confident that it would meet or improveits earlier operating margin guidance of 14-14.5%. We have cut our revenueand earnings estimates for FY17e/18e by 8.0%/8.3% and 13.3%/8.0%respectively and introduced our FY19e estimates (revenue/earnings growthof 16.4%/19.2% respectively). We rollover our valuation to FY19e, raise ourtarget price for SI to Rs 1,059 (Rs 983 earlier) and upgrade the stock to Buy.

Volume grew 17% YoY on a low base; real test for volume growth to come in 2HSI reported total sales volume of 66,808 MT (vs 57,226 MT YoY) for the quarter, registeringrobust growth of 16.7% YoY. However, blended realizations declined 2.0% YoY to INR129/kgon back of weaker PVC prices following decline in crude prices over past four quarters. Silpaulinhas witnessed 5.3%/5.5% decline in volume/value terms respectively, while CPVC segment hasremained steady during the quarter, registering volume/value growth of 2.2%/3.9% respectively.For 1HFY17, the company has delivered sales volume of 163,853 MT, registering a growth of8.3% YoY. Management is sticking to its guidance of 12-15% volume growth in FY17, signifyingan expected 16% volume growth in 2H against which we have taken a ~10% volume growthfor the full year. Amongst business segments, 1H volume growth has been particularly robust inPlastic Pipes (11%) and Consumer Products (14%), while Industrial Products was relatively weak(5%). Packaging Products volume declined 4% resulting in a drag to overall growth.

Healthy 340bps improvement in operating marginRobust volume growth and increased share of value-added products in the overall revenue mix(34.7% vs 33.8% YoY) resulted in strong margin delivery by SI. Lower power/employee costshave also supported margin improvement during the quarter. Amongst business segments, thebread and butter Plastic Pipes division has seen a margin improvement of ~18 bps to 13.7%.Margin improvement was sharper in the Consumer Products (+301 bps/14.2%) and IndustrialProducts (+144 bps/11.1%) divisions. Packaging Products margins shrunk 267 bps to 12.8%during the quarter in sync with weak volume. Overall, EBITDA margins improved 340 bps to15.1%, thus fueling EBITDA growth of 46.9% to INR1.3bn.

12-15% FY17e volume guidance maintained; confident of beating EBITDA margin guidanceAlthough SI has clocked in a volume growth of 8.3% during 1HFY17, the management remainsconfident of meeting its 12-15% volume growth guidance set earlier during the year. The companyis witnessing healthy demand from agriculture (rainwater harvesting), and municipal sectors(water delivery infrastructure, sewage infrastructure). In Silpaulin too, SI expects to grow volumeby ~12% to 22,500 MT during FY17e. Given that industry-wide polymer prices (key raw material)have remained stable in a narrow range, and increased focus on value-added products, SI isconfident of beating its FY17e EBITDA margin guidance of 14-14.5%.

Introducing FY19 estimates; upgrade to Buy

We introduce our FY19e estimates for SI. We expect revenue/earnings growth of 16.4%/19.2% forFY19e with EBITDA margin of ~16%. We upgrade SI to Buy (from Hold earlier) with a revised SOTP-based target price of INR 1,059 (Rs 983 earlier), valuing the core business at 25x FY19e earnings.

Basudeb Banerjee+91 22 4031 [email protected]

Current Reco : BUYPrevious Reco : HOLDCMP : INR900Target Price : INR1,059Potential Return : 18%

Market dataSensex : 27,274Sector : MIDCAPSMarket Cap (INRbn) : 114.8Market Cap (USDbn) : 1.7O/S Shares (m) : 127.052-wk HI/LO (INR) : 1025/520Avg Daily Vol ('000) : 153Bloomberg : SI IN

Returns (%)1m 3m 6m 12m

Absolute (4) (6) 10 44Relative (1) (3) 2 39Source: Bloomberg

Shareholding pattern

Promoters : 50%Public : 50%Others : 0%

Source: Bloomberg

ValuationFY17e FY18e FY19e

EPS (INR) 29.5 37.9 45.2P/E (x) 34.5 26.5 22.2P/BV (x) 7.4 6.1 5.1EV/EBITDA (x) 16.8 13.8 11.6Dividend yield (%) 1.5 1.7 1.8

Source: Bloomberg

Price performance vs Nifty

Source: Bloomberg, Indexed to 100

Source: Bloomberg

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Nov-15 Mar-16 Jul-16 Nov-16Supreme Industries NIFTY


Detailed quarterly financialsINRm 2QFY17 2QFY16 YoY (%) 1QFY17 QoQ (%) 9MFY16 9MFY15 YoY (%)Net Sales 8,782 7,696 14.1 11,846 (25.9) 29,586 28,335 4.4Other Op. Income 47 32 44.6 47 (0.5) 163 280 (41.9)Total Op. Income 8,829 7,728 14.2 11,893 (25.8) 29,748 28,615 4.0Expenditure 7,495 6,820 9.9 9,882 (24.1) 25,137 25,315 (0.7)Raw Materials 5,455 4,941 10.4 7,582 (28.0) 19,000 19,816 (4.1)Staff Cost 509 422 20.8 514 (0.9) 1,485 1,154 28.7Other Expenditure 1,531 1,457 5.0 1,786 (14.3) 4,653 4,346 7.1Operating Profit 1,333 908 46.9 2,012 (33.7) 4,611 3,299 39.8OPM (%) 15.1 11.7 336 16.9 (181) 15.5 11.5 397 bpsOther Income 16 15 3.2 6 159.4 10 15 (36.7)Interest 86 99 (13.2) 97 (11.1) 276 470 (41.4)Depreciation 374 335 11.7 370 0.9 1,046 1,034 1.1PBT 889 489 81.9 1,550 (42.7) 3,300 1,810 82.3Exceptional Income 0 0 0 (77) 784 (109.8)Tax on above 0 0 0 0 266PBT post exceptional income 889 489 81.9 1,550 (42.7) 3,223 2,328 38.4Tax 313 169 84.9 534 (41.5) 1,178 619 90.1PAT 576 320 80.3 1,016 (43.3) 2,045 1,709 19.7Share of Associate 86 (74) (215.6) 137 (37.3) 167 (83) (301.4)Reported PAT 662 245 169.7 1,153 (42.6) 2,212 1,626 36.1Core PAT 576 320 80.3 1,016 (43.3) 2,122 1,190 78.3Adjusted PAT 662 245 169.7 1,153 (42.6) 2,289 1,107 106.8NPM (%) 7.5 3.2 435 9.7 (219) 7.7 3.9 383 bpsReported EPS 5.2 1.9 169.7 9.1 (42.6) 17.4 12.8 36.1Adjusted EPS - Consolidated 5.2 1.9 169.7 9.1 (42.6) 18.0 8.7 106.8Adjusted EPS - Core Operations 4.5 2.5 80.3 8.0 (43.3) 16.7 9.4 78.3Volumes 66,808 57,226 16.7 97,045 (31.2) 235,306 207,886 13.2Realisation/tonne (INR) 129,386 131,970 (2.0) 120,784 7.1 123,813 130,601 (5.2)EBIDTA/tonne (INR) 19,959 15,864 25.8 20,729 (3.7) 19,597 15,870 23.5Source: Company, Antique

Trend in overall volume over the last 12 quarters

Source: Company, Antique

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Trend in EBIDTA/t over the last 12 quarters


Revenue mix (%): 2QFY17 Revenue mix (%): 2QFY16


Packaging Products, 18%

Plastic Piping, 55%

Industrial Products, 18%

Consumer Products, 8%

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FinancialsProfit and loss account (INRm)Year-ended June 30 FY15 FY16* FY17e FY18e FY19eRevenues 40,802 29,586 43,949 51,023 59,259

Operational Income 357 163 211 221 231

Total Income 41,159 29,748 44,160 51,243 59,490

Expenses 35,516 25,137 37,269 43,006 49,988

Operating Profit 5,642 4,611 6,891 8,238 9,502

Other income 24 10 45 100 200

EBIDT 5,667 4,621 6,936 8,338 9,702

Depreciation 1,390 1,046 1,539 1,709 1,879

Interest expense 580 276 300 90 36

Profit before tax 3,698 3,300 5,096 6,539 7,787

Taxes incl deferred taxation 1,263 1,178 1,784 2,223 2,648

Profit after Tax - Core Operations 2,434 2,122 3,313 4,315 5,139

Extra ordinary Items (EOI) 683 (77) - - -

Share in Associates 106 167 441 504 602

Reported Profit after tax 3,224 2,212 3,753 4,820 5,741

Adj. Profit after Tax (Excl EOI) 2,541 2,289 3,753 4,820 5,741

Diluted EPS (INR) - Core Operations 19.2 16.7 26.1 34.0 40.5

Adj. Diluted EPS (INR) - Excl EOI 20.0 18.0 29.5 37.9 45.2

Diluted EPS (INR) - Reported 25.4 17.4 29.5 37.9 45.2

Balance sheet (INRm)Year-ended June 30 FY15 FY16* FY17e FY18e FY19eShare Capital 254 254 254 254 254

Reserves & Surplus 11,861 12,899 15,166 18,351 22,309

Networth 12,115 13,153 15,420 18,605 22,563

Debt 3,928 2,287 1,200 300 300

Deferred Tax Liability 895 1,053 1,053 1,053 1,053

Capital Employed 16,939 16,492 17,673 19,957 23,915

Gross Fixed Assets 18,158 21,388 23,888 26,388 28,888

Accumulated Depreciation 8,120 9,166 10,705 12,415 14,294

Net Assets 10,037 12,222 13,182 13,973 14,594

Capital work in progress 998 300 300 300 300

Goodwill 288 0 0 0 0

Investments 1,207 1,262 1,262 1,262 1,262

Current Assets, Loans & Advances

Inventory 4,647 5,586 5,057 5,871 6,819

Debtors 2,380 2,362 2,529 2,936 3,409

Cash & Bank balance 1,818 289 104 1,335 4,300

Loans & advances and others 2,196 2,150 2,330 2,535 2,740

Current Liabilities & Provisions

Creditors 3,004 3,383 3,492 4,054 4,708

Other liabilities & provisions 3,627 4,296 3,600 4,200 4,800

Net Current Assets 4,409 2,709 2,928 4,422 7,760

Application of Funds 16,939 16,492 17,673 19,957 23,916

Per share dataYear-ended June 30 FY15 FY16* FY17e FY18e FY19eNo. of shares (m) 127 127 127 127 127

BVPS (INR) 95.4 103.5 121.4 146.5 177.6

CEPS (INR) 36.3 25.6 41.7 51.4 60.0

DPS (INR) 9.0 7.5 10.0 11.0 12.0

Source: Company Antique * Data for 9 months

Cash flow statement (INRm)Year-ended June 30 FY15 FY16* FY17e FY18e FY19eEBT 4,487 3,390 5,537 7,043 8,389Depreciation & amortisation 1,390 1,046 1,539 1,709 1,879Interest expense 580 276 300 90 36Other Adjustments (57) - - - -(Inc)/Dec in working capital 1,016 328 (405) (264) (372)Tax paid (1,263) (1,178) (1,784) (2,223) (2,648)CF from operating activities 6,152 3,862 5,188 6,355 7,285Capital expenditure (1,724) (2,244) (2,500) (2,500) (2,500)Net Investments (133) (55) - - -CF from investing activities (1,858) (2,300) (2,500) (2,500) (2,500)Inc/(Dec) in debt (771) (1,641) (1,087) (900) -Dividends & Interest paid (1,951) (1,390) (1,786) (1,725) (1,819)CF from financing activities (2,722) (3,032) (2,873) (2,625) (1,819)Net cash flow 1,572 (1,469) (185) 1,230 2,965Opening balance 246 1,818 289 104 1,335Closing balance 1,818 349 104 1,335 4,300

Growth indicators (%)Year-ended June 30 FY15 FY16* FY17e FY18e FY19eRevenue 6.1 (27.5) 48.5 16.1 16.1

EBITDA 2.7 (18.3) 49.4 19.6 15.4

PAT - Core operations (0.9) (12.8) 56.1 30.3 19.1

EPS - Core operations (0.9) (12.8) 56.1 30.3 19.1

Valuation (x)Year-ended June 30 FY15 FY16* FY17e FY18e FY19ePE - Core Operations 47.0 53.9 34.5 26.5 22.2

PE - Consolidated (Excl EOI) 45.0 49.9 30.5 23.7 19.9

P/BV 9.4 8.7 7.4 6.1 5.1

EV/EBITDA 20.6 25.2 16.8 13.8 11.6

EV/Sales 2.9 3.9 2.6 2.2 1.9

Dividend Yield (%) 1.4 1.1 1.5 1.7 1.8

Financial ratiosYear-ended June 30 FY15 FY16* FY17e FY18e FY19eRoE (%) 22.6 18.1 26.3 28.3 27.9

RoCE (%) 25.7 21.4 31.6 35.2 35.7

Debt/Equity (x) 0.3 0.2 0.1 0.0 0.0

EBIT/Interest (x) 7.4 13.0 18.0 73.7 217.3

Margins (%)Year-ended June 30 FY15 FY16* FY17e FY18e FY19eEBITDA 13.7 15.5 15.6 16.1 16.0

EBIT 10.5 12.1 12.3 13.0 13.2

PAT 6.2 7.7 8.5 9.4 9.7

Source: Company Antique * Data for 9 months


Quarterly financialsINRm 2QFY17 1QFY17 QoQ (%) 2QFY16 YoY (%)

Revenue (USDmn) 224 224 (0.2) 237 (5.4)

Revenue 15,176 15,167 0.1 15,553 (2.4)

EBITDA 2,463 2,445 0.8 2,325 6.0

Profit after tax 2,107 2,043 3.2 1,961 7.5

EPS (INR) 10.0 9.7 3.2 9.0 11.5

Margins 2QFY17 1QFY17 QoQ (bps) 2QFY16 YoY (bps)

EBITDA 16.2 16.1 11 14.9 128

PBT 19.7 18.6 105 17.2 248

Net profit 13.9 13.5 42 12.6 128



Mphasis LimitedSoft quarter; HP at cusp of turnaroundMphasis' 2QFY17 revenues of USD224.1mn declined 0.2% QoQ, marginallybelow our estimate of USD227mn. HP business (HP; 24% of revenues) sawa sequential growth of 1.9% QoQ in USD terms, while Direct International(DI) declined 0.6% QoQ due to client specific issue. The management expectsHP business to see moderate growth in 2HFY17, which we believe is a bigpositive given the declining revenue profile in this client for last few years.Further it maintained its stance DI growing ahead of industry growth rate incoming quarters. The company won TCV of USD83mn in DI, with 44% ofthese being in next generation services which have been the core area ofinvestments and growth for the company. It has reiterated its margin EBITmargin guidance of 14%-16% range for 2HFY17 riding the improved tractionin the newer technologies and focus on operational efficiencies.

HP business is shaping up as per management's expectations and stabilityreturning in this segment, reduces overhang on the growth trajectory. DIwas soft in 2QFY17 due to client specific issue which as per the company isnot likely to recur in 2HFY17 and the company is on track to achieve industrygrowth rate in the DI riding the order book and healthy pipeline. We havebuilt in 8%/7% USD revenue growth for FY18 and FY19 and maintain Holdrecommendation as we roll over valuations to FY19 with target price ofINR560 valuing it at 13x FY19e EPS.

Traction improving in HP; DI growth to bounce back in 2HFY17DI saw a sequential decline of 0.6% QoQ. Within DI, Direct core (73% of DI) saw 0.2%sequential growth as client specific issue impacted growth during the quarter. Direct core hasbeen the key focus area for the company and the company does not envisage client specificissue to recur in 2HFY17. Mphasis continues to invest in areas of digital, global risk andcompliance (GRC) and IMS and this has resulted in strong deal wins in DI segment (USD83mnin 2QFY17 on the back of USD96mn in 1QFY17). HP business reported sequential growthafter posting decline for nearly 5 years. On the EBIT margin front the company expects it to bein the 14-16% range for 2HFY17.

HP business: initial signs of turnaroundHP business after declining for nearly 5 years has seen sequential growth of 1.9% in USDterms. The company maintained its stance of stability in the HP account and expects it to growmoderately in 2HFY17. The company alluded that the margin in HP business are not dilutiveand it does not require incremental investments for the moderate growth it expects in 2HFY17.The billing in HP account will be in USD versus INR earlier.

Outlook & Valuation

With improved traction in DI and growth offshoots seen in HP business, investors would watchout for consistency in growth trajectory along with EBIT margins being in the stated range. Thestock currently trades at 12.5x / 11.8x FY18e /FY19e EPS and we maintain our Holdrecommendation with a target price of INR560 (13x FY19e EPS).

Current Reco : HOLDPrevious Reco : HOLDCMP : INR511Target Price : INR560Potential Return : 10%

Market dataSensex : 27,274Sector : ITMarket Cap (INRbn) : 107.1Market Cap (USDbn) : 1.604O/S Shares (m) : 210.252-wk HI/LO (INR) : 624/404Avg Daily Vol ('000) : 129Bloomberg : MPHL IN


Absolute (7) (2) 6 6Relative (3) (0) (3) 3Source: Company, Antique

Source: Bloomberg

Source: Bloomberg


Source: Bloomberg Indexed to 100

Source: Bloomberg

Omkar Hadkar+91 22 4031 [email protected]


EPS (INR) 38.9 41.0 43.2P/E(x) 13.1 12.5 11.8P/BV(x) 1.6 1.5 1.5EV/EBITDA(x) 8.5 7.4 6.8Dividend yield (%) 3.8 4.0 4.2



80

100

120

140

Nov-15 Mar-16 Jul-16 Nov-16Mphasis NIFTY


Quarterly FinancialsINRm 2QFY17 1QFY17 QoQ (%) 2QFY16 YoY (%Revenue (USDmn) 224 224 (0.2) 237 (5.4)Revenue 15,176 15,167 0.1 15,553 (2.4)Cost of revenues 10,916 10,904 0.1 11,383 (4.1)Gross profit 4,260 4,263 (0.1) 4,170 2.2Operating expenses 1,797 1,818 (1.2) 1,845 (2.6)EBITDA 2,463 2,445 0.8 2,325 6.0Depreciation 140 137 2.2 179 (21.8)EBIT 2,323 2,308 0.7 2,146 8.3Interest and other income 665 519 28.1 531 25.2PBT 2,988 2,827 5.7 2,677 11.6Income tax 822 784 4.8 716 14.8Exceptional items (59) 0 NM (53) NMProfit after tax 2,107 2,043 3.2 1,961 7.5EPS (INR) 10.0 9.7 3.2 9.0 11.5Margins 2QFY17 1QFY17 QoQ (bps) 2QFY16 YoY (bps)EBITDA 16.2 16.1 11 14.9 128EBIT 15.3 15.2 9 13.8 151PBT 19.7 18.6 105 17.2 248Net profit 13.9 13.5 42 12.6 128Source: Company, Antique

Deal momentum in DI continues to be strong


HP stabilising in USD50-55mn range; growth seen after sevral quarters of decline


7382 86 90

61

76

96

83

0

24

48

72

96

120

3QFY15 4QFY15 1QFY16 2QFY16 3QFY16 4QFY16 1QFY17 2QFY17

TCV of deal w ins (USDm) Average (USD mn)

TTM Avg. USD83mn TTM Avg. USD79mn

109 10395 93 90 86 78 71 67 63 55 55 52 53

020

4060

80100120

140160

180200

3QF

Y13

4QF

Y13

1QF

Y14

2QF

Y14

1QF

Y15

2QF

Y15

3QF

Y15

4QF

Y15

1QF

Y16

2QF

Y16

3QF

Y16

4QF

Y16

1QF

Y17

2QF

Y17

-14%

-12%

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

HP Business QoQ grow th (%)


EBITDA margin continues the uptrend for last three quarters


14%

15%

15%

16%

16%

17%

17%

1QF

Y15

2QF

Y15

3QF

Y15

4QF

Y15

1QF

Y16

2QF

Y16

3QF

Y16

4QF

Y16

1QF

Y17

2QF

Y17

-250-200-150-100-50050100150200250

Margin change (QoQ) (bps) (RHS) EBITDA margin (%) (LHS)


FinancialsProfit and loss account (INRm)Year-ended March 31 FY15 FY16 FY17e FY18e FY19eNet Revenue 57,949 60,879 61,079 66,711 71,397

Op. Expenses 49,248 51,909 51,483 55,999 60,156

EBITDA 8,701 8,970 9,596 10,712 11,241

Depreciation 980 744 584 700 750

EBIT 7,721 8,226 9,012 10,012 10,491

Other income 1,967 1,954 2,510 2,105 2,209

Interest Exp. 280 242 191 144 104

Extra Ordinary Items -gain/(loss) (32) (548) (59) - -

Reported PBT 9,376 9,390 11,272 11,973 12,596

Tax 2,630 2,696 3,150 3,352 3,527

Reported PAT 6,746 6,694 8,122 8,620 9,069

Net Profit 6,746 6,694 8,122 8,620 9,069

Adjusted PAT 6,778 7,242 8,181 8,620 9,069

Adjusted EPS (INR) 32.3 34.5 38.9 41.0 43.2

Balance sheet (INRm)Year-ended March 31 FY15 FY16 FY17e FY18e FY19eShare Capital 2,101 2,102 2,102 2,102 2,102


Networth 54,798 62,931 66,179 69,627 73,255

Debt 4,344 3,114 1,289 789 289

Minority Interest

Net deferred Tax liabilities (326) (211) (211) (211) (211)




Capital work in progress 204 556 576 616 656

Net Fixed Assets 1,760 1,728 2,664 3,003 3,394

Goodwill 21,781 22,942 22,942 22,942 22,942

Investments 14,431 21,118 20,118 19,118 18,118

Non Current Investments 2,499 3,754 3,754 3,754 3,754

Current Investments 11,932 17,364 16,364 15,364 14,364

Current Assets, Loans & Adv. 35,369 32,365 34,969 38,793 42,720

Debtors 6,252 6,489 6,694 7,311 7,824

Cash & Bank balance 13,209 8,549 10,699 13,869 17,192


Current Liabilities & Prov. 14,525 12,319 13,436 13,651 13,841

Liabilities 4,064 4,525 5,642 6,137 6,592

Provisions 10,462 7,794 7,794 7,514 7,248



Per share dataYear-ended March 31 FY15 FY16 FY17e FY18e FY19eNo. of shares (m) 210 210 210 210 210

Diluted no. of shares (m) 210 210 210 210 210

BVPS (INR) 261 300 315 331 349

CEPS (INR) 36.8 35.4 41.4 44.4 46.7

DPS (INR) 16.0 0.0 19.3 20.5 21.6


Cash flow statement (INRm)Year-ended March 31 FY15 FY16 FY17e FY18e FY19ePBT 9,408 9,938 11,272 11,973 12,596

Depreciation & amortisation 981 773 584 700 750


(Inc)/Dec in working capital (201) 281 662 (438) (415)

Tax paid (2,793) (2,344) (3,150) (3,352) (3,527)

Less: Interest/Div. Income Received (1,354) (1,411) (2,097) (2,105) (2,209)

Other operating Cash Flow (245) (294) - - -

CF from operating activities 6,030 7,138 7,462 6,922 7,299

Capital expenditure (897) (1,054) (1,520) (1,040) (1,140)

Inc/(Dec) in investments (4,049) (1,962) 1,000 1,000 1,000

Add: Interest/Div. Income Received 1,282 1,429 2,097 2,105 2,209

CF from investing activities (3,664) (1,587) 1,577 2,065 2,069

Inc/(Dec) in share capital 1 1 - - -

Inc/(Dec) in debt 83 (1,461) (1,825) (500) (500)

Dividend Paid (1,947) (4,223) (5,064) (5,316) (5,546)

CF from financing activities (1,863) (5,683) (6,889) (5,816) (6,046)

Net cash flow 503 (132) 2,150 3,171 3,323

Opening balance 3,532 13,209 8,549 10,699 13,869

Closing balance 4,035 13,077 10,699 13,869 17,192

Growth indicators (%)Year-ended March 31 FY15 FY16 FY17e FY18e FY19eRevenue(%) 123.4 5.1 0.3 9.2 7.0

EBITDA(%) 97.9 3.1 7.0 11.6 4.9

Adj PAT(%) 119.3 6.9 13.0 5.4 5.2

Adj EPS(%) 119.3 6.9 13.0 5.4 5.2

Valuation (x)Year-ended March 31 FY15 FY16 FY17e FY18e FY19eP/E 15.8 14.8 13.1 12.5 11.8

P/BV 2.0 1.7 1.6 1.5 1.5

EV/EBITDA 9.9 9.4 8.5 7.4 6.8

EV/Sales 1.5 1.4 1.3 1.2 1.1

Dividend Yield (%) 3.1 0.0 3.8 4.0 4.2

Financial ratiosYear-ended March 31 FY15 FY16 FY17e FY18e FY19eRoE (%) 12.8 12.3 12.7 12.7 12.7

RoCE (%) 17.1 16.3 17.3 17.6 17.7

Asset/T.O (x) 3.1 2.7 2.7 2.5 2.4

Net Debt/Equity (x) -0.4 -0.4 -0.4 -0.4 -0.4

EBIT/Interest (x) 34.6 42.1 60.3 84.1 122.1

Margins (%)Year-ended March 31 FY15 FY16 FY17e FY18e FY19eEBITDA Margin(%) 15.0 14.7 15.7 16.1 15.7

EBIT Margin(%) 13.3 13.5 14.8 15.0 14.7

PAT Margin(%) 11.3 11.5 12.9 12.5 12.3

Source: Company Antique



Union Bank of IndiaModest quarter; asset quality outlook turning positive

Union Bank (UNBK) reported a tepid quarter with GNPLs increasing by 9.5%q-q led by fresh slippages of Rs33.96bn (5.3% annualized, ~6% q-q decline).GNPL ratio thus increased to 10.73% from 10.16% in 1QFY17 while healthyprovisioning (65-70% on account of NPL ageing) enabled slight improvementin coverage ratio to 50.5% (43.2% excluding technical write-offs). Standardrestructured advances declined to 2.10% from 2.7% in 1QFY17. Businessgrowth revived with both deposits and advances portfolio growing by 6.7%q-q / 3.2% q-q respectively. Advances to Retail, Agriculture, and MSMEsegments grew by 17.8% y-y and now contributes ~55% of the domesticloan book. Management has guided for successive 15% q-q decline in freshslippages over next few quarters while the credit cost for FY17/18 will remainsimilar at 1.7%/1.5% respectively on account of NPL ageing relatedprovisions. We cut earnings and roll forward our valuations. Maintain BUYwith PT of Rs150 (unchanged) based on 1.0x Sep-18E ABV.

Revenue growth revives; domestic NIMs improved by 7bp q-q

UNBK reported 11.6% y-y growth in total income led by 19% y-y growth in other income(boosted by treasury gains of Rs4.66 bn). NII stood at Rs22.77 bn representing 8.4% y-ygrowth led by pick-up in loan/investment growth and 7bp q-q improvement in domesticmargins to 2.43%. Continued control on opex (3.2% y-y decline) helped deliver 29% y-ygrowth in operating profits at Rs18.2 bn. However sharp 275% y-y rise in provisions atRs16.2 bn (65-70% provisions on account of NPL ageing) resulted in 80% y-y decline in PBTand 73% y-y decline in net earnings.

Asset quality remains under pressure; fresh slippages came in at Rs33.96bn (5.3%annualized)

UNBK reported fresh slippages of Rs33.96 bn (6% q-q decline) mainly led by steel, paperand pharma sectors. This included two lumpy accounts worth Rs4bn excluding which theslippages stood at Rs29bn. Slippages from restructured assets stood at Rs11.96 bn andresulted in 22% q-q decline in o/s std. restructured assets to 2.1% of loans. GNPL ratio thusincreased to 10.73% from 10.16% in 1QFY17 while healthy provisioning enabled slightimprovement in coverage ratio to 50.5% (43.2% excluding technical write-offs). UNBK undertookfresh SDR of Rs25.5bn (O/s: Rs46.8bn) and fresh 5/25 of Rs3.34bn (O/s: Rs39.28bn) whileS4A assets stands at Rs2.75bn. UNBK has guided for 15% successive sequential decline infresh slippages even as recoveries are likely to gather pace however the outstanding SMA-2at Rs187.8bn (~7.1% of loans) still remains an overhang. The credit cost is likely to remainsticky largely on account of NPL ageing related provisions which alone accounted for 65-70%of total 2QFY17 provisions and UNBK has guided for a credit cost of 170bp/150 bp overFY17/18E respectively.

Tier-I has improved 17bp q-q to 8.56%; maintain 'BUY'

UNBK Tier-I capital has improved to 8.56% (8.06% core Tier-I) aided by Rs10bn of capitalraising under AT-1. Besides the government has already announced to infuse Rs7.21bn ofcapital in the current financial year which we have built into our estimates. We thus projectUNBK to end FY17 with total Tier-I of 8.5% even as it grows its loan book by ~10% during2HFY17. UNBK's continued focus on RAM segments, improvement in CASA mix and focus onefficiency should reflect in return ratios, albeit gradually. Maintain "BUY' with PT of Rs150.

Current Reco : BUYPrevious Reco : BUYCMP : INR134Target Price : INR150Potential Return : 12%

Renish Patel+91 22 4031 [email protected]

Market dataSensex : 27,274Sector : BanksMarket Cap (INRbn) : 92.1Market Cap (USDbn) : 1.379O/S Shares (m) : 687.452-wk HI/LO (INR) : 174/104Avg Daily Vol ('000) : 3,239Bloomberg : UNBK IN


Absolute (12) 1 14 (18)Relative (9) 3 5 (20)Source: Bloomberg



Source: Bloomberg


EPS (INR) 15.3 24.3 38.1P/E (x) 8.8 5.5 3.5P/ABV (x) 1.3 1.1 0.8Dividend yield (%) 3.0 4.5 4.5

Source: Bloomberg



Source: Bloomberg

Nitin Aggarwal, CFA

+91 22 4031 [email protected]

60

80

100

120

Nov-15 Mar-16 Jul-16 Nov-16

Union Bank NIFTY


Q2FY17 Financials - Revenue growth revives driven by higher other income; howeverhigher provisioning continues to drag net earnings(Rs mn) Q2FY17 Q2FY16 YoY (%) Q1FY17 QoQ (%)

Interest income 82,081 81,415 0.8 78,766 4.2

Interest Expenses 59,307 60,398 (1.8) 57,744 2.7

Net interest income (NII) 22,774 21,017 8.4 21,023 8.3

Other income 11,394 9,594 18.8 10,399 9.6

Total income 34,169 30,612 11.6 31,421 8.7

Operating expenses 15,972 16,505 (3.2) 15,171 5.3

-Staff expenses 8,736 10,055 (13.1) 8,590 1.7

-Other expenses 7,236 6,450 12.2 6,581 9.9

Operating profit 18,197 14,107 29.0 16,251 12.0

Core operating profit 13,537 11,517 17.5 13,091 3.4

Total provisions 16,203 4,325 274.6 13,530 19.8

Profit before tax 1,994 9,782 (79.6) 2,721 (26.7)

Tax 227 3,200 (92.9) 1,058 (78.5)

Profit after tax 1,767 6,582 (73.2) 1,663 6.2

(Rs mn) Q2FY17 Q2FY16 YoY (%) Q1FY17 QoQ (%)

Balance sheet

Deposits 3,614,539 3,306,651 9.3 3,387,273 6.7

Advances 2,652,051 2,462,170 7.7 2,568,611 3.2

Gross NPA (Rs mn) 298,621 155,412 92.1 272,809 9.5

Net NPA (Rs mn) 169,479 83,349 103.3 158,247 7.1

O/S Std Restr. assets (Rs mn) 56,360 139,130 (59.5) 72,470 (22.2)

(Rs mn) Q2FY17 Q2FY16 YoY (%) Q1FY17 QoQ (%)

Profitability ratios

RoaA 0.2 0.7 (51) 0.2 -

RoaE 3.5 12.8 (934) 3.4 10

NIM 2.3 2.3 (4) 2.3 2

Yield on Advances 9.0 9.8 (86) 8.9 2

Cost of Funds 5.6 6.3 (67) 5.8 (24)

Asset Quality

Gross NPL ratio 10.7 6.1 461 10.2 57

Net NPL ratio 6.4 3.4 300 6.2 23

Coverage ratio 43.2 46.4 (312) 42.0 125

Rest. Assets/ Total adv. 2.1 5.7 (353) 2.8 (70)

Business & Other Ratios

Low-cost deposit mix 31.5 28.6 290 31.5 -

Cost-income ratio 46.7 53.9 (717) 48.3 (154)

Non int. inc / total income 33.3 31.3 201 33.1 25

Credit deposit ratio 73.4 74.5 (109) 75.8 (246)

CAR 11.2 10.3 93 10.8 44

Tier-I 8.6 7.7 89 8.4 17Source: Company, Antique

NII grew by 8.4% y-y led bypick-up in loan/investmentgrowth and 7bp q-qimprovement in domesticmargins to 2.43%

Other income reported robustgrowth of 19% YoY driven bystrong treasury income

Provisions continue remain highas higher provisioning towradsNPL ageing

Business growth revived withboth deposits and advancesportfolio growing by 6.7% q-q/ 3.2% q-q respectively.Advances to Retail, Agriculture,and MSME segments grew by17.8% y-y

Domestic Margins expanded7bps q-q however moderationin overseas margin impactedglobal NIM

Asset quality deteriorated furtherwith GNPA ratio increases to10.7%. Fresh slippagescontinues to remain higher atINR33.96bn with slippagesfrom restructured book atINR11bn.

Tier-I capital has improved to8.56% (8.06% core Tier-I)aided by Rs10bn of capitalraising under AT-1.

Loan book growth led by Retail & MSME, while Large corporate book saw contraction; theshare of RAM* advances increased to 55% from 51% in 2QFY16Loan book break-up Q2FY17 Q2FY16 YoY (bps) Q1FY17 QoQ (bps)

Retail Loans 388,470 336,210 15.5 372,420 4.3

Agri Loans 411,590 361,580 13.8 391,720 5.1

MSME Loan 582,680 475,890 22.4 553,490 5.3

International Loans 264,800 246,830 7.3 256,180 3.4

Large Corporate & Others 1,001,195 1,119,710 (10.6) 994,801 0.6

Total Loan Book 2,783,680 2,555,530 8.9 2,685,530 3.7Source: Company, Antique *RAM - Retail, Agri, MSME


Slippage ratio declined to 5.29% vs 5.39% in 1QFY17Union 2QFY15 3QFY15 4QFY15 1QFY16 2QFY16 3QFY16 4QFY16 1QFY17 2QFY17

Opening 102,325 114,616 125,960 130,310 141,440 155,410 1,84,950 241,710 272,810

Additions 19,680 17,380 15,470 15,080 19,310 34,090 61,700 36,030 33,960

Upgrades/Recoveries 5,580 3,860 8,670 2,380 2,640 1,960 3,950 4,930 8,150

Gross NPAs 114,616 125,960 130,310 141,440 155,410 184,950 2,41,710 272,810 298,620

Slippages(% of Loans) 3.36% 2.92% 2.56% 2.36% 3.11% 5.54% 9.73% 5.39% 5.29%

Fresh Restructuring 9,310 12,120 23,680 7,520 4,430 - 1,090 0 0

O/s Standard Restructured 126,030 123,470 136,580 141,250 139,130 136,170 85,270 72,470 56,360

Restructured (% of loans) 5.30% 5.10% 5.30% 5.70% 5.70% 5.40% 3.20% 2.82% 2.13%


Credit cost increases to 2.34% however managementguided for lower credit cost during 2HFY17 Asset quality deteriorates on high slippages

Source: Company, Antique Source: Company, Antique

Business grwoth continues to remain sluggish,marginally improves on sequential basis Margins remain stable at 2.3%


0.2%

0.7%

1.2%

1.7%

2.2%

2.7%

3.2%

3.7%

1Q13

2Q13

3Q13

4Q13

1Q14

2Q14

3Q14

4Q14

1Q15

2Q15

3Q15

4Q15

1Q16

2Q16

3Q16

4Q16

1Q17

2Q17

Credit Cost

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

1Q13

2Q13

3Q13

4Q13

1Q14

2Q14

3Q14

4Q14

1Q15

2Q15

3Q15

4Q15

1Q16

2Q16

3Q16

4Q16

1Q17

2Q17

Gross NPA (%) Net NPA (%)

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

3Q13

4Q13

1Q14

2Q14

3Q14

4Q14

1Q15

2Q15

3Q15

4Q15

1Q16

2Q16

3Q16

4Q16

1Q17

2Q17

Advances grow th YoY Deposits grow th YoY

2.0%

2.2%

2.4%

2.6%

2.8%

3.0%

3.2%

3.4%

3Q12

4Q12

1Q13

2Q13

3Q13

4Q13

1Q14

2Q14

3Q14

4Q14

1Q15

2Q15

3Q15

4Q15

1Q16

2Q16

3Q16

4Q16

1Q17

2Q17

NIM (%)


Return ratios to move up graduallyRoA decomposition FY15 FY16 FY17E FY18E FY19E

Interest income/Assets 8.7 8.2 7.8 7.7 7.6

Interest expenses/Assets 6.4 6.1 5.8 5.6 5.4

Net interest income/Assets 2.3 2.1 2.0 2.1 2.2

Treasury income/Assets 0.2 0.2 - - -

Other Inc. from operations/Assets 1.0 0.9 1.0 1.0 0.9

Total income/Assets 3.3 3.0 3.0 3.1 3.1

Employee expenses/Assets 1.0 0.9 0.9 0.9 0.8

Other operating expenses/Assets 0.6 0.7 0.6 0.6 0.6

Operating profit/Assets 1.6 1.4 1.4 1.6 1.7

Tax/Assets 0.3 0.1 0.1 0.1 0.2

Loan loss provisions/Assets 0.8 1.0 1.1 1.0 1.0

Net profit/Assets 0.5 0.3 0.3 0.4 0.5Source: Company, Antique

We maintain our BUY rating with PT to INR150 based on 1.0x Sep-18e ABVPT calculation and upside

Fair price - EVA 152

Fair price - P/ABV 147

Average of the two 150

Target P/ABV 1.0

Target P/E 4.8

Current price, Rs 134

Upside (%) 12%

Dividend yield (%) 1%

Total return (%) 13%


Union Bank historical one year forward P/ABV trends


0.3

0.5

0.7

0.9

1.1

1.3

1.5

1.7

Nov

-11

Feb

-12

May

-12

Aug

-12

Nov

-12

Feb

-13

May

-13

Aug

-13

Nov

-13

Feb

-14

May

-14

Aug

-14

Nov

-14

Feb

-15

May

-15

Aug

-15

Nov

-15

Feb

-16

May

-16

Aug

-16

Nov

-16

P/ABV 3 yr avg. avg. + 1 SD avg. - 1 SD


FinancialsProfit and loss account (INRm)Year-ended March 31 FY15 FY16 FY17e FY18e FY19eInterest Income 320,840 321,988 331,752 361,133 401,110

Interest Expense 236,401 238,857 246,169 262,369 284,728

Net Interest Income 84,439 83,131 85,583 98,764 116,382

% NII Growth 7.2 (1.5) 2.9 15.4 17.8

Treasury Income 7,087 9,160 - - -

Non-interest income 35,230 36,317 41,983 45,551 48,512

Net Revenue 119,669 119,448 127,566 144,316 164,894

Employees Expenses 37,855 36,993 39,028 41,408 43,934

Other Op. Expenses 23,579 26,029 27,323 28,861 30,798


% OP Growth 11.6 -3.1 8.5 21.0 21.8

Tax 10,017 4,138 3,837 6,999 10,982

Total Provisions 30,401 38,772 46,456 49,050 50,940

Net Profit 17,816 13,516 10,922 17,997 28,240

Balance sheet (INRm)Year-ended March 31 FY15 FY16 FY17e FY18e FY19eCapital 6,358 6,874 7,408 7,408 7,408

Reserves and Surplus 191,251 222,038 235,996 249,530 273,308

Deposits 3,168,699 3,427,200 3,721,939 4,149,962 4,693,607

Borrowings 353,600 309,574 369,502 426,392 503,660

Other Liabilities & Provisions 96,252 81,273 97,528 117,034 140,440

Total liabilities 3,816,160 4,046,959 4,432,373 4,950,327 5,618,424

Cash & Balances with RBI 150,631 156,047 159,566 178,478 202,693

Bal. with banks/ call money 73,149 136,715 77,737 86,951 98,748

Investment 940,930 892,083 1,083,555 1,180,052 1,326,186

Loans and advances 2,556,546 2,673,540 2,903,464 3,275,108 3,736,898

Fixed Assets 26,820 39,399 40,975 42,614 44,318

Other Assets 68,084 149,175 167,076 187,125 209,580

Total assets 3,816,160 4,046,959 4,432,373 4,950,327 5,618,424

Per share data (INR)Year-ended March 31 FY15 FY16 FY17e FY18e FY19eBook value per share (INR) 288 288 294 312 344

Adj. BVPS (INR) 212 153 107 120 166

Price/ Adj. Book value 0.6 0.9 1.3 1.1 0.8

EPS(INR) 28.1 20.4 15.3 24.3 38.1

P/E Ratio 4.8 6.6 8.8 5.5 3.5

Asset QualityYear-ended March 31 FY15 FY16 FY17e FY18e FY19eGross NPA (INRm) 130,309 241,699 335,389 364,079 371,227

Gross NPA (%) 5.10 9.04 11.55 11.12 9.93

Net NPA (INRm) 69,190 140,260 197,629 202,837 188,326

Net NPA (%) 2.71 5.25 6.81 6.19 5.04

% coverage of NPA 47 42 41 44.3 49.3

Delinquencies (%) 1.8 4.5 4.4 3.1 2.8


Capital Adequacy RatioYear-ended March 31 FY15 FY16 FY17e FY18e FY19eRWA (INRm) 2,531,620 2,737,910 2,902,732 3,162,817 3,519,583

Tier I (%) 7.5 8.1 8.5 8.1 8.0

Tier II (%) 2.7 2.4 2.6 2.7 2.7

Total CAR (%) 10.2 10.6 11.1 10.8 10.7

Business RatiosYear-ended March 31 FY15 FY16 FY17e FY18e FY19eCredit / Deposit(%) 80.7 78.0 78.0 78.9 79.6

Investment / Deposit (%) 29.7 26.0 29.1 28.4 28.3

CASA (%) 29.2 32.3 32.0 32.7 33.1

RoaA (%) 0.5 0.3 0.3 0.4 0.5

Core RoE (%) 10.1 7.0 5.2 8.0 11.6

Dividend Yield (%) 5.4 1.8 3.0 4.5 4.5

Key assumptionsYear-ended March 31 FY15 FY16 FY17e FY18e FY19eDeposit

Deposit growth (%) 6.4 8.2 8.6 11.5 13.1

Cost of deposits (%) 7.0 6.7 6.4 6.2 6.0

Advances

Advances growth (%) 11.6 4.6 8.6 12.8 14.1

Yield on advances (%) 9.9 9.0 8.8 8.7 8.6

Investments

Investments growth (%) 0.4 (5.2) 21.5 8.9 12.4

Yield on investments (%) 8.3 8.3 8.0 7.8 7.6

Earnings RatiosYear-ended March 31 FY15 FY16 FY17e FY18e FY19eInterest Inc. / Avg.assets (%) 8.7 8.2 7.8 7.7 7.6

Interest Exp./ Avg. assets (%) 6.4 6.1 5.8 5.6 5.4

NIM (%) 2.3 2.1 2.0 2.1 2.2

Int. exp/ Int earned (%) 73.7 74.2 74.2 72.7 71.0

Oth. Inc./ Tot. Inc. (%) 29.4 30.4 32.9 31.6 29.4

Staff exp/Total opt. exp (%) 61.6 58.7 58.8 58.9 58.8

Cost/ Income Ratio (%) 51.3 52.8 52.0 48.7 45.3

Prov./ Operating Profit (%) 52.2 68.7 75.9 66.2 56.5

Loan loss prov./Avg. loans (bps) 125.4 148.3 166.6 158.8 145.3

RoA decompositionYear-ended March 31 FY15 FY16 FY17e FY18e FY19eInterest income/Assets 8.7 8.2 7.8 7.7 7.6

Interest expenses/Assets 6.4 6.1 5.8 5.6 5.4

Net interest income/Assets 2.3 2.1 2.0 2.1 2.2

Treasury income/Assets 0.2 0.2 - - -

Other Inc. from operations/Assets 1.0 0.9 1.0 1.0 0.9

Total income/Assets 3.3 3.0 3.0 3.1 3.1

Employee expenses/Assets 1.0 0.9 0.9 0.9 0.8

Other operating expenses/Assets 0.6 0.7 0.6 0.6 0.6

Operating profit/Assets 1.6 1.4 1.4 1.6 1.7

Tax/Assets 0.3 0.1 0.1 0.1 0.2

Loan loss provisions/Assets 0.8 1.0 1.1 1.0 1.0

Net profit/Assets 0.5 0.3 0.3 0.4 0.5




Century Plyboards (I) LimitedGST and entry into MDF to drive growth ahead

Century Plyboards (CPBI) 2QFY17 revenue came in at INR 4.6bn (+4.6% YoY),broadly in-line with our expectations. Top-line was supported by the Laminatebusiness which grew 10.7% YoY, while the Plywood segment grew merelyby 2.2% YoY, due to both tepid demand as well as strong base. EBITDA marginwas largely flat YoY at 16.4% as the strong performance of the Laminatebusiness was nullified by margin decline in the Plywood business.Consequently, EBITDA came in at INR 757mn (+2.5% YoY). Depreciation remainedon the higher side and increased by 18% YoY due to the capitalisation of thenewly added laminate capacity, though interest expense remained benign asbulk of the annual planned capex is set to be in the 2H. As a result, net incomegrew 6.5% YoY to INR493mn, in line with our estimate of INR500mn. Giventhe muted growth in 1H, we are cutting our FY17e/18e revenue estimates by4.8%/1.2% and earnings estimates by 8%/1.2% respectively. We are alsointroducing our FY19e estimates wherein we expect CPBI to clock revenue/netincome growth of 14.6%/22.2% respectively. We rollover our valuation toFY19e and increase our target price to INR 270 (from INR 204 earlier), valuingthe company at 22x FY19e EPS. We maintain our Buy rating on the stock.

Poor demand and strong base quarter weigh in on Plywood performanceVolume in the plywood segment including the face veneers and deco plywoods declined by0.8% on back of combination of the following factors (1) poor demand in the urban markets onback of benign demand from real estate sector, (2) strong base last year in the same quarter. InOctober 2015, the company had taken a price hike (followed by a second hike in 4QFY16),which encouraged dealers to stock up on inventory during same quarter last year. Sainik volumeswere largely flat during the quarter (~13,400 cbm) though realisation for Sainik continued to dip.Realisation levels for the premium ply segment improved ~10% YoY though for the whole plywoodbusiness it was up only by ~2.4% YoY as Sainik and face veneer realisations were a drag.Management is confident that CPBI will be able to demonstrate good 10% growth in the plysegment volume in FY17e through a stronger 2H as the base becomes weak. CPBI is against theapproach of cutting prices to drive volume growth and thus has lagged its peers though hasmanaged to replicate the strong ~16% EBITDA margin in the ply segment.

Capacity utilization ramp-up supports Laminates segment growthLaminates volume grew by a strong ~29% as utilization levels of recently installed capacityramped up fully during the quarter. However, blended realisation for the laminates businessdeclined 5% YoY, largely due to lower realisations for both laminates and exports. Laminationcapacity is currently running at ~100% utilization, and this asset can be sweated to ~120-125% in the near future before two more lamination production lines come online in FY18.

MDF plant to be commissioned by 4QFY17; confident of achieving a 60% utilisation in FY18CPBI's MDF project plans are running on track and the facility should commence operationsin 4QFY17. The plant will have a capacity of ~220k cbm per year with easy access to timberin the nearby vicinity. Total capex for the plant has been envisioned at ~Rs 3.8 bn of which~Rs 1.6 bn has been incurred as on 2QFY17. CPBI expects the plant to reach 60% capacityutilization in FY18e (given that ~40% of India's MDF requirement is still imported) and touchEBITDA margin of north of 25%. On the positive side, CPBI guided for a INR600mn lowercapex in FY17 compared to last time on back of incremental import duty benefits on themachinery for the MDF plant.

Rolling over to FY19e estimates; maintain BuyGiven the slow performance in 1HFY17 (~7.5% revenue growth, ~6.0% net income growth),we are revising our FY17e/18e revenue/earnings estimates lower by 4.8%/1.2% and 8.8%/1.2% respectively. We also introduce our FY19e estimates wherein we expect CPBI to clockrevenue/net income growth of 14.6%/22.2% respectively as new laminates capacity as wellas the MDF plant production would pick up pace. We roll forward our valuation to FY19eand raise our target price to Rs 270 (Rs 204 earlier), valuing the company at 22x FY19e. Wemaintain our Buy rating on the stock.

Basudeb Banerjee+91 22 4031 [email protected]

Market dataSensex : 27,274Sector : Mid CapMarket Cap (INRbn) : 51.0Market Cap (USDbn) : 0.765O/S Shares (m) : 222.252-wk HI/LO (INR) : 268/135Avg Daily Vol ('000) : 328Bloomberg : CPBI IN


Absolute (12) 8 23 28Relative (8) 9 13 24Source: Bloomberg



Source: Bloomberg


EPS (INR) 7.5 10.1 12.3P/E (x) 30.9 22.9 18.7P/BV (x) 7.5 5.8 4.5EV/EBITDA (x) 18.6 14.3 11.8Dividend yield (%) 0.4 0.4 0.4

Source: Bloomberg



Source: Bloomberg

Current Reco : BUYPrevious Reco : BUYCMP : INR230Target Price : INR270Potential Return : 17%

80100120140160

Nov-15 Mar-16 Jul-16 Nov-16Century Plyboards IndiaNIFTY


Quarterly table with segment reportingParticulars 2QFY17 2QFY16 YoY (%) 1QFY17 QoQ (%) FY16 FY15 YoY (%)

Net Sales 4,593 4,391 4.6 4,036 13.8 16,469 15,525 6.1

Other Op. Income 34 31 9.7 21 61.6 116 123 (6.0)

Total Op. Income 4,627 4,422 4.6 4,058 14.0 16,585 15,648 6.0

Expenditure 3,870 3,684 5.1 3,374 14.7 13,710 13,006 5.4

Raw Materials 1,513 1,899 (20.3) 1,439 5.2 6,256 6,584 (5.0)

Cost of traded goods 891.6 444.6 100.5 606.4 47.0 2,175.9 1,926.6 12.9

Staff Cost 624 568 10.0 638 (2.1) 2,306 1,933 19.3

Other Expenditure 841 772 9.0 691 21.8 2,971 2,562 16.0

Operating Profit 757 738 2.5 683 10.8 2,875 2,642 8.8

OPM (%) 16.4 16.7 (34) 16.8 (48) 17.3 16.9 45bps

Other Income 13.1 4.9 165.5 8.0 63.1 16.3 36.5 (55.3)

Interest 60.3 134.7 (55.3) 88.7 (32.1) 467.3 432.9 7.9

Depreciation 126 107 17.5 93 36.4 446 448 (0.4)

Exceptional income 0 0 (6) 0 0

PBT 584 501 16.4 505 15.7 1,978 1,798 10.0

Tax 91 39 135.4 80 14.0 297 290 2.4

PAT 493 463 6.5 425 16.0 1,681 1,508 11.4

Adjusted PAT 493 463 6.5 431 14.4 1,681 1,508 11.4

NPM (%) 10.7 10.5 19 10.7 6 10.2 9.7 49bps


EBITParticulars (INRm) 2QFY17 2QFY16 YoY (%) 1QFY17 QoQ (%) FY16 FY15 YoY (%)

Plywood & allied products 492.0 517.0 (4.8) 436.1 12.8 1,835.2 1,866.9 (1.7)

Laminate & allied products 171.0 104.6 63.5 117.6 45.4 447.3 229.6 94.8

CFS 56.3 56.2 0.1 78.6 (28.4) 281.8 217.7 29.4

Others (33.3) (4.3) 679.5 (3.7) 810.8 (16.8) (27.7) (39.1)

Total 686.0 673.6 1.8 628.7 9.1 2,547.4 2,286.5 11.4Source: Company, Antique

EBIT Margin (%)Particulars (INRm) 2QFY17 2QFY16 YoY (%) 1QFY17 QoQ (%) FY16 FY15 YoY (%)

Plywood & allied products 15.1% 16.3% -112 bps 15.2% -7 bps 15.6% 16.3% -64 bps

Laminate & allied products 17.5% 11.8% 564 bps 14.8% 267 bps 13.3% 7.8% 552 bps

CFS 26.7% 28.6% -194 bps 33.8% -709 bps 33.2% 30.8% 246 bps

Others -21.2% -3.2% -1,796 bps -2.3% -1,895 bps -3.0% -6.3% 329 bps

Total 14.9% 15.4% -46 bps 15.5% -61 bps 15.5% 14.7% 74 bpsSource: Company, Antique


Plywood division performance

Plywood revenue growth YoY (%) EBIT margin (%)


Volume growth YoY (%) Realisation growth YoY (%)


Laminate division performance

Laminate revenue growth YoY (%) EBIT margin (%)


35.1%

13.4%

20.4%

10.6%

-6.3%

6.8%

-2.0%

9.9% 11.8%

2.2%

1QF

Y15

2QF

Y15

3QF

Y15

4QF

Y15

1QF

Y16

2QF

Y16

3QF

Y16

4QF

Y16

1QF

Y17

2QF

Y17

Plyw ood Revenue grow th YoY (%)

12.6%13.5%

19.2% 19.8%

17.3%

15.8%14.8% 15.0% 15.2% 15.1%

1QF

Y15

2QF

Y15

3QF

Y15

4QF

Y15

1QF

Y16

2QF

Y16

3QF

Y16

4QF

Y16

1QF

Y17

2QF

Y17

EBIT Margin (%)

19.7%

5.5%2.7%

-2.7%

-8.5%

4.7% 6.3%

26.9%

17.6%

-0.8%

1QF

Y15

2QF

Y15

3QF

Y15

4QF

Y15

1QF

Y16

2QF

Y16

3QF

Y16

4QF

Y16

1QF

Y17

2QF

Y17

Volume grow th YoY (%)

12.8%

7.5%

17.2% 13.7%

2.4% 2.0%

-7.8%

-13.4%

-5.3%

2.4%

1QF

Y15

2QF

Y15

3QF

Y15

4QF

Y15

1QF

Y16

2QF

Y16

3QF

Y16

4QF

Y16

1QF

Y17

2QF

Y17

Realisation grow th YoY (%)

7.6%

22.7%

36.3%30.5%

23.0%

12.3%

8.1%

14.7%

3.5%

10.7%

1QF

Y15

2QF

Y15

3QF

Y15

4QF

Y15

1QF

Y16

2QF

Y16

3QF

Y16

4QF

Y16

1QF

Y17

2QF

Y17

Laminate revenue grow th YoY (%)

5.9%

9.8%

7.1%8.0%

13.4%12.0%

13.4%14.7% 14.8%

17.5%

1QF

Y15

2QF

Y15

3QF

Y15

4QF

Y15

1QF

Y16

2QF

Y16

3QF

Y16

4QF

Y16

1QF

Y17

2QF

Y17

EBIT Margin (%)


FinancialsProfit and loss account (INRm)Year ended 31 Mar FY15 FY16 FY17e FY18e FY19eRevenues 15,884 16,637 17,810 22,771 26,086

Expenses 13,181 13,702 14,785 18,846 21,500


Other income 33 11 30 20 20

EBIDT 2,736 2,946 3,056 3,945 4,605

Depreciation 485 484 517 707 900


Profit before tax 1,796 1,981 1,988 2,684 3,275

Taxes incl deferred taxation 296 301 318 429 524

PAT before MI & EO Items 1,500 1,680 1,670 2,254 2,751

Minority Interest 9 8 10 12 14

Share in P/L of associates (1) - - - -

Profit after tax 1,490 1,672 1,660 2,242 2,737

Reported EPS (INR) 6.7 7.5 7.5 10.1 12.3

Balance sheet (INRm)Year ended 31 Mar FY15 FY16 FY17e FY18e FY19eShare Capital 223 223 223 223 223


Networth 3,894 5,327 6,727 8,709 11,186

Minority Interest 55 90 100 112 126

Debt 5,138 4,194 5,800 5,300 3,300

Deferred Tax Liability 8 7 7 7 7




Net Assets 2,456 3,252 3,135 6,478 6,078

Capital work in progress 326 400 3,000 150 150

Goodwill 0 0 0 0 0

Investments 4 2 2 2 2

Deferred Tax Assets 70 137 137 137 137

Current Assets

Inventory 3,322 2,975 3,172 4,055 4,645

Debtors 2,683 2,873 3,025 3,806 4,288

Cash & Bank balance 374 389 700 267 265


Current Liabilities & Prov

Creditors 622 869 900 1,000 1,100

Other liabilities & provisions 959 1,306 1,497 1,747 1,947



Per share dataYear ended 31 Mar FY15 FY16 FY17e FY18e FY19eNo. of shares (m) 223 223 223 223 223

BVPS (INR) 17.5 23.9 30.2 39.1 50.3

CEPS (INR) 8.9 9.7 9.8 13.3 16.3

DPS (INR) 1.8 1.0 1.0 1.0 1.0


Cash flow statement (INRm)Year ended 31 Mar FY15 FY16 FY17e FY18e FY19eEBT 1,796 1,973 1,978 2,672 3,261

Depreciation & amortisation 485 484 517 707 900


Interest / Dividend received (16) - - - -

Other Adjustments (19) 21 - - -

(Inc)/Dec in working capital (877) 359 (222) (1,434) (893)

Tax paid (337) (301) (318) (429) (524)

CF from operating activities 1,488 3,017 2,506 2,070 3,175

Capital expenditure (751) (1,354) (3,000) (1,200) (500)

Net Investments 43 2 - - -

Income from investments 836 - - - -

CF from investing activities 128 (1,352) (3,000) (1,200) (500)

Inc/(Dec) in debt (649) (944) 1,606 (500) (2,000)

Dividends & Interest paid (927) (742) (810) (815) (690)

Other Adjustments (52) 35 10 12 14

CF from financing activities (1,629) (1,651) 806 (1,303) (2,676)

Net cash flow (13) 14 311 (433) (2)

Opening balance 387 374 389 700 267

Closing balance 374 389 700 267 265

Growth indicators (%)Year ended 31 Mar FY15 FY16 FY17e FY18e FY19eRevenue 17.7 4.9 7.9 27.9 14.6

EBITDA 70.8 8.6 3.1 29.7 16.8

PAT 147.2 12.2 (0.7) 35.1 22.1

EPS 147.2 12.2 (0.7) 35.1 22.1

Valuation (x)Year ended 31 Mar FY15 FY16 FY17e FY18e FY19ePE 34.4 30.7 30.9 22.9 18.7

P/BV 13.6 9.5 7.5 5.8 4.5

EV/EBITDA 20.7 18.8 18.6 14.3 11.8

EV/Sales 3.6 3.3 3.2 2.5 2.1

Dividend Yield (%) 0.8 0.4 0.4 0.4 0.4

Financial ratiosYear ended 31 Mar FY15 FY16 FY17e FY18e FY19eRoE (%) 42.6 35.7 27.1 28.7 27.2

RoCE (%) 25.0 26.2 22.7 24.1 25.7

Debt/Equity (x) 1.3 0.8 0.8 0.6 0.0

EBIT/Interest (x) 4.9 5.1 4.6 5.8 8.6

Margins (%)Year ended 31 Mar FY15 FY16 FY17e FY18e FY19eEBITDA 17.2 17.8 17.0 17.2 17.6

EBIT 14.3 14.9 14.3 14.2 14.2

PAT 9.5 10.1 9.3 9.8 10.5



contd...

Valuation GuideCompany Reco C M P T P Re tu rn M.Cap M.Cap Net profit (INRbn) EPS (INR) P/E (x) EV/EBITDA (x) P/BV (x) RoE (%) RoCE (%) Absolute (%)

(INR) (INR) (%) (INRbn) (USDbn ) FY16 FY17 FY18 FY16 FY17 FY18 FY16 FY17 FY18 FY16 FY17 FY18 FY17 FY17 FY17 1m 12m

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Ceat Sell 1,200 852 (29) 49 0.7 4.6 3.4 3.8 112.7 85.2 94.7 10.6 14.1 12.7 6.5 8.1 7.5 2.0 15.4 19.0 -14 17

Eicher Motors Buy 23,930 28,089 17 650 9.7 13.0 16.7 21.5 477.5 616.1 790.7 50.1 38.8 30.3 26.1 20.4 16.0 13.6 40.6 48.8 -9 35

Exide Industries Buy 189 229 21 160 2.4 6.3 7.3 8.4 7.4 8.6 9.9 25.6 22.0 19.1 15.7 13.4 11.7 3.3 15.6 21.2 -3 30

FAG Bearings Buy 4,236 4,341 2 70 1.1 2.0 2.2 2.8 118.8 132.4 167.0 35.6 32.0 25.4 21.5 18.9 15.3 4.7 15.8 24.2 3 8

Hero MotoCorp Buy 3,288 3,920 19 657 9.8 31.3 36.1 40.2 156.8 180.7 201.3 21.0 18.2 16.3 14.7 12.8 11.4 6.8 40.8 55.6 -6 25

JK Tyre & Industries Hold 137 113 (17) 31 0.5 5.1 3.5 3.7 22.6 15.4 16.2 6.1 8.9 8.5 4.9 6.5 5.5 1.5 18.3 14.6 -13 44

Mahindra & Mahindra Hold 1,372 1,387 1 852 12.8 32.9 37.3 44.3 50.1 56.7 67.4 27.4 24.2 20.4 16.4 14.6 12.4 3.6 15.7 19.3 -2 9

Mahindra CIE Buy 198 208 5 64 1.0 1.7 2.2 3.7 5.1 6.7 11.6 38.7 29.4 17.1 19.4 12.1 8.2 2.8 10.1 12.1 -1 -21

Maruti Suzuki Buy 5,705 6,766 19 1,723 25.8 45.7 74.2 83.1 151.3 245.8 275.1 37.7 23.2 20.7 17.3 14.0 11.6 5.2 24.7 34.0 0 26

Minda Industries Buy 375 382 2 30 0.4 1.1 1.4 2.0 14.0 18.0 25.5 26.8 20.8 14.7 13.7 9.5 7.5 4.2 22.2 23.0 17 166

Motherson Sumi Hold 302 300 (1) 424 6.3 13.2 15.4 19.8 10.0 11.6 15.0 30.1 26.0 20.1 12.4 10.9 8.8 7.5 32.1 24.6 -9 25

SKF India Buy 1,433 1,599 12 76 1.1 2.6 2.5 2.9 48.8 47.0 54.6 29.4 30.5 26.2 18.9 19.4 16.7 4.4 15.1 23.3 2 17

Tata Motors Buy 512 561 9 1,650 24.7 132.3 123.9 145.4 38.7 41.4 50.7 13.2 12.4 10.1 5.3 4.9 4.0 1.8 14.1 13.7 -8 27

BUILDING MATERIALS

Astral Poly Technik Buy 423 608 44 51 0.8 1.0 1.4 2.2 8.5 11.6 18.1 50.0 36.4 23.4 25.1 20.3 14.5 5.6 16.4 20.6 -3 0

Century Plyboards India Buy 230 271 18 51 0.8 1.7 1.7 2.2 7.5 7.5 10.1 30.6 30.8 22.8 18.7 18.6 14.3 7.6 27.5 22.8 -11 33

Cera Sanitaryware Buy 2,719 2,780 2 35 0.5 0.8 1.1 1.2 64.2 82.3 95.9 42.4 33.0 28.4 24.8 19.6 16.9 6.9 23.0 31.4 10 43

Finolex Industries Buy 444 558 26 55 0.8 2.1 2.8 3.4 17.3 22.8 27.9 25.7 19.5 15.9 14.4 12.2 10.4 5.0 26.3 30.6 -3 42

Greenlam Industries Hold 708 750 6 17 0.3 0.4 0.6 0.9 15.6 25.7 37.5 45.3 27.6 18.9 15.5 12.5 10.2 5.6 22.6 22.0 -7 74

Greenply Industries Hold 290 290 0 35 0.5 1.3 1.5 1.6 10.5 12.1 13.2 27.7 23.9 22.0 15.1 13.4 13.1 4.5 21.2 23.6 6 63

HSIL Hold 343 308 (10) 25 0.4 0.9 1.2 1.5 12.3 16.7 20.3 27.8 20.5 16.9 9.4 8.6 7.4 1.7 8.5 11.1 -2 22

Kajaria Ceramics Hold 599 678 13 95 1.4 2.3 2.9 3.4 14.4 18.0 21.6 41.5 33.3 27.7 21.0 17.7 15.0 8.2 27.4 32.7 -16 40

Somany Ceramics Buy 638 774 21 27 0.4 0.6 0.9 1.1 16.3 21.0 26.6 39.1 30.4 24.0 20.3 16.6 13.9 5.4 19.1 20.8 2 92

Supreme Industries Hold 903 827 (8) 115 1.7 2.3 3.8 4.4 18.0 29.7 35.0 50.1 30.4 25.8 25.3 16.7 14.1 7.4 26.4 31.3 -4 44

CEMENT

ACC Hold 1,490 1,640 10 280 4.2 6.0 7.3 9.8 32.2 39.0 52.2 46.3 38.2 28.5 22.7 20.9 15.6 3.3 8.7 11.8 -9 7

Ambuja Cement Buy 241 270 12 478 7.2 8.6 11.6 14.7 5.6 5.8 7.4 43.1 41.3 32.6 29.8 24.5 19.5 4.5 11.0 15.0 -6 16

Dalmia Bharat Buy 1,989 2,375 19 177 2.6 1.9 4.0 6.1 21.5 45.4 68.5 92.6 43.8 29.0 15.8 11.9 9.5 4.2 10.0 12.8 3 179

Grasim Industries Buy 900 1,090 21 420 6.3 23.8 34.5 43.0 51.0 73.8 92.1 17.7 12.2 9.8 7.4 5.3 3.9 1.4 12.3 14.5 -9 22

JK Lakshmi Cement Buy 467 495 6 55 0.8 0.1 1.4 3.1 0.5 11.8 26.5 876.0 39.6 17.7 26.6 14.9 9.7 3.8 10.0 10.7 -8 30

Orient Cement Hold 171 193 13 35 0.5 0.6 0.7 2.1 3.0 3.4 10.3 56.3 50.7 16.6 27.0 15.9 9.2 3.3 6.7 8.0 -24 3

Shree Cements Hold 16,827 16,600 (1) 586 8.8 4.6 18.1 24.0 131.2 519.6 690.0 128.2 32.4 24.4 42.9 20.3 15.2 7.2 25.3 31.2 -5 40

UltraTech Cement Buy 3,855 4,690 22 1,058 15.8 20.8 32.2 41.8 75.8 117.3 152.4 50.9 32.9 25.3 24.6 18.5 14.5 4.5 14.5 16.4 -4 36

FMCG

Amrutanjan Hold 576 500 (13) 9 0.1 0.2 0.2 0.3 14.0 16.2 20.4 41.0 35.5 28.2 27.0 21.7 17.4 6.8 20.5 31.4 12 22

Bajaj Corp Buy 396 450 14 58 0.9 2.3 2.5 2.7 15.9 16.7 18.2 25.0 23.8 21.8 20.2 19.0 17.3 12.3 51.5 64.6 0 -5

Colgate Palmolive Hold 984 810 (18) 268 4.0 5.9 6.3 6.9 21.8 23.2 25.3 45.1 42.4 39.0 28.3 25.5 23.1 22.2 56.7 82.9 1 5

Emami Sell 1,200 1,050 (12) 272 4.1 5.0 5.9 7.3 22.0 25.9 32.0 54.6 46.2 37.5 40.7 33.9 28.6 17.1 39.4 26.5 3 16

Godrej Consumer Products Hold 1,526 1,631 7 520 7.8 11.3 13.4 15.8 33.3 39.4 46.6 45.9 38.8 32.8 33.4 28.3 24.3 8.5 23.8 20.6 -6 22

Hindustan Unilever Sell 848 756 (11) 1,835 27.5 41.1 44.8 49.5 19.0 20.7 22.9 44.7 40.9 37.1 29.8 26.5 24.0 38.4 102.5 150.1 -3 6

ITC Buy 249 270 8 3,006 45.0 99.1 117.1 128.9 8.2 9.4 10.7 30.3 26.4 23.3 19.2 17.2 15.5 8.4 33.5 45.7 4 11

Jyothy Labs Hold 349 310 (11) 63 0.9 0.9 1.7 2.2 4.8 9.3 12.0 72.4 37.7 29.2 29.8 22.6 20.1 7.0 19.2 20.9 -4 15

Marico Hold 262 251 (4) 338 5.1 7.2 8.5 9.4 5.6 6.6 7.3 46.6 39.5 35.9 31.6 26.6 23.7 13.2 36.7 43.9 -9 30

Nestle Hold 6,654 6,100 (8) 642 9.6 8.9 11.7 13.2 92.8 120.9 136.9 71.7 55.0 48.6 37.3 31.2 27.6 19.9 38.6 55.1 -2 8

Prabhat Dairy Buy 114 140 23 11 0.2 0.2 0.5 0.9 2.5 5.1 9.1 45.5 22.2 12.5 10.6 10.1 7.5 1.6 7.4 10.7 -8 -16


Valuation GuideCompany Reco C M P T P Re tu rn M.Cap M.Cap Net profit (INRbn) EPS (INR) PE (x) EV/EBITDA (x) P/BV (x) RoE (%) RoCE (%) Absolute (%)


INDUSTRIALSABB Hold 1,089 1,184 9 231 3.5 3.0 3.9 5.8 14.1 18.5 27.6 77.0 58.7 39.5 32.4 29.9 20.1 7.2 12.6 18.2 -7 -12BEML Buy 877 1,059 21 37 0.5 0.5 1.2 2.2 12.6 28.5 52.9 69.7 30.7 16.6 31.9 20.0 12.2 1.7 5.6 9.4 -3 -20BHEL Buy 135 192 42 330 4.9 -0.8 10.9 29.3 -0.3 4.4 12.0 -408.3 30.3 11.2 -29.9 10.9 3.1 1.0 3.3 5.0 -2 -31Blue Star Buy 538 547 2 51 0.8 1.2 1.8 2.6 13.2 19.3 27.3 40.9 27.9 19.7 24.6 17.9 13.3 6.6 25.6 29.3 -5 50Crompton Consumer Buy 176 217 23 110 1.7 1.2 2.9 3.6 3.8 4.6 5.8 46.3 38.6 30.5 54.7 25.2 20.6 21.3 76.6 50.1 3Crompton Greaves Buy 77 103 33 48 0.7 1.4 2.6 4.0 2.2 4.2 6.3 34.5 18.5 12.2 14.3 9.5 8.3 1.0 5.5 6.5 -2 32Cummins India Buy 828 1,174 42 230 3.4 7.5 7.9 10.1 27.1 28.6 36.5 30.5 28.9 22.7 30.1 28.8 22.7 6.7 24.1 29.2 -11 -22Engineers India Hold 246 225 (8) 83 1.2 2.5 3.4 3.8 7.5 10.0 11.3 33.0 24.6 21.8 33.3 19.1 15.3 2.9 12.0 19.5 -3 30GE T&D Hold 323 317 (2) 83 1.2 0.8 2.0 2.3 3.0 5.3 9.0 106.7 61.1 35.7 37.5 28.0 18.4 6.6 15.6 15.0 -7 -37Havells India Hold 386 391 1 241 3.6 5.1 6.5 7.2 8.2 10.4 11.6 47.0 37.2 33.3 30.6 25.4 22.5 8.3 23.4 31.9 -14 60Hitachi Home & Life Buy 1,444 1,866 29 39 0.6 0.5 1.1 1.4 18.4 39.5 52.5 78.6 36.5 27.5 33.0 20.4 15.7 8.6 26.3 29.7 -11 8Honeywell Automation Buy 8,786 10,300 17 78 1.2 1.4 1.8 2.6 159.7 204.7 294.3 55.0 42.9 29.9 33.9 28.3 19.2 6.6 16.5 26.4 -4 -6KEC International Buy 124 166 34 32 0.5 1.9 2.4 2.8 7.3 9.3 11.1 17.0 13.2 11.2 7.3 6.2 5.5 1.8 14.5 18.1 0 -9Larsen & Toubro Buy 1,420 1,706 20 1,323 19.8 51.8 57.5 73.0 50.8 61.7 78.4 27.9 23.0 18.1 17.8 16.7 14.4 2.6 12.2 7.6 -2 4Siemens Buy 1,110 1,524 37 395 5.9 7.6 11.7 15.1 21.5 32.9 42.3 51.7 33.7 26.2 31.9 22.7 17.0 4.6 14.2 20.6 -12 -11Techno Electric Buy 302 444 47 34 0.5 1.2 2.0 2.7 10.1 17.5 23.8 30.0 17.2 12.7 17.0 11.9 9.0 3.0 18.4 18.9 1 18Thermax Sell 855 705 (18) 102 1.5 2.8 2.9 3.4 23.5 24.3 28.2 36.3 35.2 30.3 24.3 24.9 21.8 4.0 11.9 17.8 -6 0Voltas Hold 360 316 (12) 119 1.8 3.4 4.1 5.2 10.4 12.4 15.8 34.6 29.2 22.8 25.9 19.9 15.6 4.4 15.9 22.8 -9 31INFORMATION TECHNOLOGYCyient Hold 466 550 18 52 0.8 3.3 3.7 4.4 29.3 33.3 38.8 15.9 14.0 12.0 11.1 9.0 7.4 2.4 18.4 21.2 -4 -9HCL Tech Buy 795 965 21 1,121 16.8 55.7 80.2 88.9 39.5 56.8 63.0 20.1 14.0 12.6 15.1 9.8 8.4 3.4 26.4 32.7 -3 -9Hexaware Tech Hold 198 225 13 60 0.9 3.9 4.1 4.7 13.1 13.5 15.6 15.1 14.7 12.7 10.5 10.0 8.5 3.6 26.3 35.8 4 -19Infosys Buy 971 1,240 28 2,230 33.4 134.9 141.5 157.2 59.0 61.9 68.8 16.5 15.7 14.1 11.1 10.1 8.8 3.3 21.9 30.8 -7 -14KPIT Tech Hold 132 155 18 26 0.4 2.9 2.6 2.9 14.1 13.2 14.7 9.3 10.0 8.9 5.6 5.7 4.9 1.6 17.5 20.2 -1 -6Mphasis Hold 509 560 10 107 1.6 7.2 8.2 8.6 34.5 38.9 41.0 14.8 13.1 12.4 9.4 8.5 7.3 1.6 12.7 17.3 -7 5NIIT Tech Buy 403 490 22 25 0.4 2.8 2.6 2.8 46.4 42.5 46.0 8.7 9.5 8.8 4.4 4.4 3.7 1.4 15.5 20.8 -5 -30Persistent Sys Buy 649 760 17 52 0.8 3.0 3.1 3.7 37.2 38.5 46.5 17.5 16.8 14.0 11.0 9.6 7.2 2.8 17.7 23.8 -7 0TCS Hold 2,331 2,470 6 4,592 68.7 242.1 259.5 281.9 122.9 131.7 143.1 19.0 17.7 16.3 14.0 12.7 11.2 5.1 31.8 41.7 -2 -6Tech Mahindra Hold 430 500 16 417 6.2 31.2 30.4 34.1 36.0 35.1 39.3 12.0 12.3 10.9 8.7 8.0 6.6 2.2 19.6 25.9 1 -19Wipro Hold 453 525 16 1,100 16.5 88.9 84.5 93.2 36.1 34.8 38.4 12.5 13.0 11.8 8.9 8.5 7.4 2.1 17.3 17.9 -6 -21LOGISTICSAllcargo Logistics Buy 192 210 9 48 0.7 2.8 2.8 3.4 11.0 11.2 13.6 17.4 17.1 14.1 9.8 8.9 7.4 2.5 13.6 15.1 6 21Blue Dart Express Hold 5,097 5,730 12 121 1.8 1.9 1.8 2.4 80.0 75.7 99.4 63.7 67.4 51.3 36.5 38.6 30.7 25.8 41.2 38.9 -7 -32ConCor Hold 1,383 1,386 0 270 4.0 7.9 8.1 10.0 40.4 41.7 51.4 34.2 33.2 26.9 24.2 22.3 18.2 3.1 9.7 13.1 -2 1Gateway Distiparks Hold 231 300 30 25 0.4 1.1 1.0 1.3 10.1 9.1 12.2 22.9 25.3 18.9 10.1 9.4 7.4 2.0 8.0 13.0 -13 -33Navkar Corp. Buy 196 225 15 28 0.4 1.1 1.1 1.9 7.8 7.7 13.3 25.0 25.3 14.7 20.3 17.9 11.2 2.0 8.0 8.8 1 13Transport Corp. Hold 184 200 9 14 0.2 0.8 0.9 1.1 10.8 12.2 13.9 17.1 15.1 13.3 8.9 8.0 7.2 1.9 13.1 14.0 -1 -33VRL Logistics Buy 285 330 16 26 0.4 1.0 0.8 1.1 11.2 9.1 12.4 25.4 31.4 22.9 10.6 12.0 9.7 4.8 15.6 16.9 -8 -23METALS & MININGHindalco Industries Hold 159 132 (17) 328 4.9 7.8 9.0 18.7 3.8 4.4 9.0 42.1 36.5 17.6 10.2 8.4 7.3 0.8 2.3 6.2 1 96Hindustan Zinc Buy 256 275 8 1,080 16.2 82.0 73.4 86.1 19.4 17.4 20.4 13.2 14.7 12.6 11.0 9.7 7.5 2.6 18.4 21.9 1 89Indian Hume Pipe Buy 764 922 21 19 0.3 0.3 0.8 1.0 12.0 34.2 41.8 63.6 22.3 18.3 22.3 12.7 11.1 4.9 24.1 23.2 8 109Jindal Steel & Power Hold 69 86 25 63 0.9 -16.7 -10.9 2.2 -18.2 -12.0 2.4 -3.8 -5.8 28.7 15.9 10.2 7.2 0.3 -5.6 2.7 -18 -7JSW Steel Hold 1,591 1,652 4 385 5.8 13.8 21.8 24.3 57.2 90.3 100.5 27.8 17.6 15.8 13.4 7.9 7.7 1.7 10.0 10.8 -11 83MOIL Buy 335 283 (15) 56 0.8 1.9 2.7 3.1 11.5 15.8 18.6 29.0 21.1 17.9 30.3 12.6 9.1 1.6 7.6 11.4 28 58NALCO Buy 51 53 3 99 1.5 6.8 7.4 7.7 2.6 2.9 3.0 19.6 18.0 17.1 4.7 3.3 2.9 1.0 5.6 7.7 7 35NMDC Buy 127 124 (3) 503 7.5 32.1 38.4 40.0 8.1 9.7 10.1 15.6 13.1 12.6 11.6 8.4 8.1 1.6 12.5 18.0 13 35SAIL Sell 50 35 (30) 206 3.1 -43.0 -14.6 11.8 -10.4 -3.5 2.9 -4.8 -14.2 17.5 -15.6 20.6 9.6 0.5 -3.7 1.0 3 2Tata Steel Hold 403 384 (5) 391 5.9 9.3 29.0 53.8 9.5 29.9 55.4 42.3 13.5 7.3 15.7 8.6 6.7 1.4 10.3 7.0 3 79OIL & GASBPCL Buy 644 790 23 931 13.9 74.3 89.3 101.5 51.4 61.8 70.2 12.5 10.4 9.2 9.5 7.5 6.4 2.7 29.6 29.4 -1 45Cairn India Hold 238 150 (37) 445 6.7 21.0 26.8 33.9 11.2 14.3 18.1 21.2 16.6 13.1 12.1 11.0 7.6 0.9 5.5 6.1 7 58Castrol India Buy 430 545 27 213 3.2 6.2 7.0 7.5 12.4 14.1 15.1 34.6 30.4 28.4 23.0 19.5 18.2 30.1 109.1 179.5 -12 -5GAIL India Buy 424 455 7 538 8.1 23.0 41.5 47.1 18.1 32.7 37.2 23.4 13.0 11.4 13.5 8.1 6.7 1.6 12.9 15.8 6 44Gujarat Gas Buy 550 850 54 76 1.1 1.7 3.1 6.1 12.3 22.5 44.4 44.7 24.4 12.4 12.5 9.7 6.1 3.2 14.0 15.0 -5 -1Gujarat State Petronet Hold 152 165 9 85 1.3 4.5 6.3 6.8 8.0 11.2 12.1 18.9 13.6 12.6 10.1 7.4 6.5 1.9 14.8 18.5 -4 19Gulf Oil Lubricants Hold 734 740 1 36 0.5 1.0 1.2 1.3 20.2 23.7 26.3 36.3 31.0 27.9 22.6 19.4 17.4 11.5 41.5 39.9 -5 52HPCL Buy 435 502 15 442 6.6 38.6 44.3 46.3 38.0 43.5 45.5 11.5 10.0 9.6 7.4 7.3 7.0 0.7 22.3 16.7 0 66Indian Oil Corp Buy 306 328 7 1,486 22.2 94.8 106.2 119.6 40.0 44.8 50.5 7.6 6.8 6.1 9.5 8.9 8.1 0.9 13.7 14.4 -1 50Indraprastha Gas Buy 855 920 8 120 1.8 3.7 5.4 6.0 26.6 38.9 42.5 32.1 22.0 20.1 15.8 12.1 10.9 4.2 20.8 29.2 3 79Mahanagar Gas Hold 719 585 (19) 71 1.1 3.1 3.3 3.6 31.3 33.8 36.2 23.0 21.3 19.9 13.4 12.5 11.5 4.0 20.3 23.7 3Oil India Hold 403 465 15 242 3.6 28.0 32.4 34.9 46.5 53.8 58.1 8.7 7.5 6.9 6.1 5.5 5.2 1.1 14.4 15.5 -2 -1ONGC Hold 270 305 13 2,306 34.5 203.1 201.6 259.2 23.7 23.6 30.3 11.4 11.4 8.9 5.8 5.6 4.5 1.2 10.7 12.0 1 8Petronet LNG Hold 360 285 (21) 270 4.0 9.1 13.7 16.2 12.2 18.3 21.6 29.6 19.7 16.7 16.9 11.8 9.3 3.6 19.7 22.1 -3 78Reliance Industries Buy 1,006 1,275 27 3,260 48.8 271.7 275.1 331.8 92.5 93.7 113.0 10.9 10.7 8.9 10.3 10.7 8.1 1.2 10.8 8.6 -8 7Deepak Nitrite Buy 105 175 67 12 0.2 0.6 0.8 1.1 5.4 7.0 9.8 19.3 15.0 10.7 10.0 9.8 9.6 1.9 14.6 12.1 -19 61

contd...


Company Reco C M P T P Re tu rn M.Cap M.Cap Net profit (INRbn) ABVS (INR) P/AdjBV (x) NNPA Ratio (%) P/E (x) RoE (%) RoA (%) Absolute (%)


FINANCIALS

Axis Bank Buy 479 500 5 1,143 17.1 82.2 35.3 71.5 211.2 201.2 227.1 2.3 2.4 2.1 0.8 2.5 2.0 32.3 6.5 0.6 -11 3Bank of Baroda Hold 143 140 (2) 328 4.9 -54.0 28.8 51.0 97.3 97.0 121.4 1.5 1.5 1.2 5.1 5.4 4.3 11.4 7.0 0.4 -16 -11Bank of India Sell 106 100 (5) 112 1.7 -60.9 -9.7 5.3 82.1 71.9 98.0 1.3 1.5 1.1 7.8 7.3 5.7 -9.7 -3.0 -0.2 -11 -20Canara Bank Buy 290 280 (3) 157 2.4 -28.1 19.6 29.7 213.2 268.2 327.0 1.4 1.1 0.9 6.4 5.4 4.6 8.0 6.0 0.3 -14 7City Union Bank Buy 150 140 (6) 89 1.3 4.4 5.0 6.2 48.3 54.5 63.2 3.1 2.7 2.4 1.4 1.1 1.0 17.8 14.3 1.5 9 72Federal Bank Buy 77 95 24 132 2.0 4.8 7.4 10.1 43.4 48.3 52.2 1.8 1.6 1.5 1.6 0.7 0.6 17.6 8.9 0.8 3 40HDFC Bank Buy 1,244 1,500 21 3,149 47.1 123.0 148.1 179.3 272.8 316.0 369.6 4.6 3.9 3.4 0.3 0.3 0.3 21.2 18.9 1.9 -3 15ICICI Bank Hold 270 250 (7) 1,570 23.5 97.3 99.5 118.6 138.7 135.1 143.6 1.9 2.0 1.9 3.0 4.6 4.6 15.8 10.8 1.3 6 0IndusInd Bank Buy 1,219 1,300 7 726 10.9 22.9 28.9 37.0 287.2 324.9 377.2 4.2 3.8 3.2 0.4 0.3 0.3 25.1 15.7 1.8 0 34J&K Bank Buy 65 81 25 31 0.5 4.2 5.3 6.6 100.8 94.5 103.5 0.6 0.7 0.6 4.3 5.4 4.5 5.9 8.1 0.6 -28 -26Karur Vysya Bank Buy 470 666 42 57 0.9 5.7 6.4 8.5 365.8 394.9 445.4 1.3 1.2 1.1 0.6 1.0 1.2 8.9 13.2 1.0 -1 11Kotak Mahindra Bank Buy 800 920 15 1,467 22.0 20.9 30.7 40.2 119.6 133.3 153.1 6.7 6.0 5.2 1.1 1.1 0.9 31.5 11.4 1.4 2 23LT Hsg. Finance Buy 101 122 21 177 2.7 8.5 9.9 13.7 34.9 31.9 42.0 2.9 3.2 2.4 3.8 3.4 2.4 20.7 11.7 1.3 5 53Lakshmi Vilas Bank Buy 150 190 27 27 0.4 1.8 2.4 3.3 89.6 100.9 116.7 1.7 1.5 1.3 1.2 1.0 0.8 11.3 12.1 0.9 -3 78Punjab National Bank Hold 132 115 (13) 280 4.2 -39.7 20.7 33.5 54.2 61.7 100.1 2.4 2.1 1.3 8.6 8.1 5.9 12.5 5.3 0.3 -9 2State Bank of India Buy 243 290 19 1,885 28.2 99.5 138.5 179.9 120.9 130.0 148.3 2.0 1.9 1.6 3.8 3.6 2.8 13.9 9.2 0.6 -7 4South Indian Bank Buy 23 32 42 30 0.5 3.3 4.4 5.8 24.5 27.5 32.4 0.9 0.8 0.7 2.1 1.9 1.2 6.9 10.3 0.6 -10 9Union Bank of India Buy 134 150 12 92 1.4 13.5 11.5 22.3 152.6 135.0 186.5 0.9 1.0 0.7 5.2 5.7 4.2 8.3 5.4 0.3 -12 -17YES Bank Buy 1,196 1,574 32 504 7.5 25.4 32.1 44.0 321.9 380.4 554.5 3.7 3.1 2.2 0.3 0.3 0.3 15.7 21.3 1.7 -6 57Bajaj Finance HOLD 993 1,105 11 535 8.0 20 25 32 1,386.9 166.4 200.5 0.7 6.0 5.0 0.3 0.3 0.3 32.0 20.4 3.2 (8) 86Bharat Financial Inclusion BUY 798 1,160 45 110 1.6 3 7 7 108.9 205.1 259.1 7.3 3.9 3.1 0.0 0.0 0.1 15.8 33.1 7.3 (12) 86Cholamandalam Invst & Fin BUY 1,118 1,369 22 175 2.6 6 7 10 234.1 270.9 355.5 4.8 4.1 3.1 2.1 2.4 2.4 24.0 18.4 2.2 (9) 80Gruh Finance HOLD 318 337 6 116 1.7 2 3 3 23.0 28.0 34.2 13.8 11.3 9.3 0.1 0.1 0.1 40.8 30.6 2.3 (9) 25HDFC HOLD 1,386 1,491 8 2,191 32.8 71 81 92 163.1 192.6 229.1 8.5 7.2 6.1 0.5 0.4 0.4 35.6 22.0 2.9 (3) 15LIC Housing Finance HOLD 533 664 25 269 4.0 17 21 24 181.1 213.9 251.7 2.9 2.5 2.1 0.3 0.3 0.3 13.0 20.7 1.5 (10) 16M&M Finance HOLD 342 354 4 194 2.9 7 9 12 107.8 119.4 135.3 3.2 2.9 2.5 3.2 3.8 3.5 21.0 14.3 2.3 (10) 50Manappuram BUY 98 109 11 83 1.2 3 5 6 32.5 36.9 42.0 3.0 2.7 2.3 0.4 0.4 0.4 15.3 18.6 4.9 6 327Muthoot Finance BUY 344 396 15 137 2.1 8 11 12 140.8 159.4 179.8 2.4 2.2 1.9 2.2 1.4 1.3 12.8 17.8 4.1 (1) 89Power Finance Corp SELL 114 166 46 301 4.5 61 61 58 270.9 155.4 169.1 0.4 0.7 0.7 2.6 2.6 2.5 4.9 15.9 2.4 (10) (10)PTC Financial HOLD 39 36 (7) 22 0.3 4 3 4 31.0 35.0 39.8 1.3 1.1 1.0 2.2 2.4 2.4 7.4 16.0 2.9 (0) (18)Rural Electrification Corp SELL 124 180 45 245 3.7 56 56 53 289.8 171.4 190.1 0.4 0.7 0.7 1.2 1.2 1.1 4.4 18.0 2.9 (7) (7)Repco Home Finance BUY 719 865 20 45 0.7 2 2 2 152.7 177.3 208.3 4.7 4.1 3.5 0.5 0.5 0.4 24.0 18.1 2.1 (14) 4Shriram City Union BUY 2,414 3,036 26 159 2.4 5 6 8 639.3 668.9 704.9 3.8 3.6 3.4 1.6 2.4 3.5 26.3 12.8 2.8 9 35Shriram Transport BUY 1,031 1,474 43 234 3.5 12 15 19 374.2 386.2 403.0 2.8 2.7 2.6 1.9 2.1 2.8 15.4 14.1 2.0 (16) 13Ujjivan Financial BUY 416 504 21 49 0.7 2 2 2 118.4 150.1 168.3 3.5 2.8 2.5 0.0 0.0 0.0 22.5 14.7 4 (11) -Equitas Holding BUY 172 244 42 58 0.9 2 2 3 49.7 66.9 74.6 3.5 2.6 2.3 0.0 0.0 0.0 32.2 10.0 2 (8) -

Valuation GuideCompany Reco C M P T P Re tu rn M.Cap M.Cap Net profit (INRbn) EPS (INR) PE (x) EV/EBITDA (x) P/BV (x) RoE (%) RoCE (%) Absolute (%)


RETAILAkzoNobel India Hold 1,635 1,500 (8) 78 1.2 1.9 2.3 2.7 41.2 48.4 57.7 39.7 33.8 28.4 23.9 20.5 16.8 9.1 28.7 41.6 0 26

Asian Paints Hold 1,043 933 (11) 1,000 15.0 17.8 20.8 24.8 18.5 21.7 25.9 56.2 48.0 40.3 35.0 29.9 24.9 14.8 33.7 45.1 -14 29

Berger Paints India Hold 260 204 (21) 252 3.8 3.7 4.7 5.8 3.8 4.8 6.0 68.2 53.9 43.3 38.3 31.7 26.0 14.1 28.7 36.3 -2 62

Kansai Nerolac Paints Hold 370 297 (20) 199 3.0 3.6 4.3 5.3 6.6 8.0 9.9 56.0 46.3 37.4 33.2 28.2 22.8 7.7 17.6 24.5 -4 51

Raymond Buy 615 600 (2) 38 0.6 1.3 1.4 2.0 20.7 23.0 32.9 29.7 26.8 18.7 11.6 10.0 7.9 2.2 8.4 11.8 8 48

Sangam (India) Buy 292 380 30 12 0.2 0.8 1.1 1.6 19.6 28.4 40.3 14.9 10.3 7.3 7.7 5.7 4.5 2.1 22.9 20.8 12 13

Suryalakshmi Cotton Mills Hold 130 200 53 2 0.0 0.3 0.3 0.4 18.3 19.7 25.1 7.1 6.6 5.2 4.9 4.8 4.0 0.6 9.4 11.7 -4 29

Titan Company Hold 369 338 (8) 328 4.9 7.1 7.8 10.0 8.0 8.8 11.3 46.4 42.2 32.8 34.7 28.7 22.7 8.3 20.9 28.9 -9 6

UTILITIES & INFRAAshoka Buildcon Buy 157 242 54 29 0.4 1.2 1.4 1.2 6.2 7.7 6.6 25.5 20.5 23.9 9.0 9.1 8.3 1.5 7.4 8.8 -9 -3

CESC Buy 586 724 23 78 1.2 3.7 5.1 8.8 27.5 38.2 66.2 21.3 15.3 8.9 8.1 7.0 5.9 1.2 7.9 9.5 -5 6

Coal India Buy 316 398 26 1,995 29.9 143.2 156.9 168.1 22.7 24.8 26.6 13.9 12.7 11.9 8.9 7.7 6.9 5.5 44.7 61.5 -2 -6

IRB Infra Buy 219 298 36 77 1.1 6.4 5.6 6.8 18.1 16.1 19.2 12.1 13.6 11.4 8.0 7.4 6.7 1.4 11.1 10.1 -13 -8

JSW Energy Hold 63 83 33 103 1.5 12.5 11.2 13.4 7.6 6.8 8.2 8.3 9.2 7.7 6.1 5.6 4.8 1.1 12.5 13.1 -16 -30

KNR Constructions Ltd. Buy 707 703 (1) 20 0.3 1.6 1.0 1.2 57.3 36.2 44.4 12.3 19.5 15.9 13.4 12.1 9.6 2.4 13.1 16.4 -9 23

NCC Ltd. Buy 83 106 27 46 0.7 2.4 2.7 3.7 4.4 4.9 6.6 19.1 17.2 12.6 8.5 7.5 6.8 1.3 7.7 15.5 -2 10

NTPC Buy 154 173 13 1,266 18.9 102.3 103.1 109.6 12.4 12.5 13.3 12.4 12.3 11.6 12.2 10.6 10.3 1.3 11.2 8.8 1 13

Power Grid Buy 174 212 22 908 13.6 60.6 76.3 90.4 11.6 14.6 17.3 15.0 11.9 10.0 11.1 9.4 8.2 1.9 16.6 9.4 -4 33

PTC India Buy 74 101 37 22 0.3 1.5 3.5 4.2 5.2 11.7 14.2 14.2 6.3 5.2 6.6 12.3 8.8 0.8 12.3 8.7 -2 18

Sadbhav Engg. Buy 266 355 34 46 0.7 1.5 1.5 1.7 8.9 8.5 10.0 29.7 31.3 26.4 17.4 15.0 13.1 2.8 9.5 12.5 -8 -15

Sadbhav Infra Buy 99 124 25 35 0.5 -3.2 -2.0 -1.3 -9.2 -5.7 -3.6 -10.8 -17.3 -27.7 23.5 14.4 10.4 3.0 -17.4 6.1 -8 1

Tata Power Hold 75 78 5 202 3.0 -4.3 19.0 21.6 -1.6 7.0 8.0 -47.3 10.6 9.4 6.2 6.5 6.2 1.4 13.7 12.6 -5 9


7 Nov 8 Nov 9 Nov 10 Nov 11 Nov 12 Nov 13Nov

Godrej Consumer Ashok Leyland Apollo Tyres Thermax FAG Bearings Atul AutoICICI Bank Bharat Forge Bosch Manappuram Fin Mahindra & Mahindra Hindalco IndShree Cement Repco Home Finance Honeywell Automation Motherson Sumi Bank of BarodaCeat PTC India Fin Serv NCC Blue Star BPCLHSIL BHEL Orient Cement Minda Industries Muthoot Finance

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