india daily ideas -...

Please refer to Disclosures and Disclaimers at the end of the Research Report.

India Daily Ideas

INSTITUTIONAL USE ONLY 23 October 2013

PhillipCapital (India) Pvt. Ltd.

Contents Super Sector Stock / Ideas

1 Consumer Bajaj Auto, Emami, ATFL, Dish TV, Raymond, Trader Comments

2 Cyclicals GAIL, Coromandel International

3 Defensives Bharti Airtel, Wipro, KPIT Tech, Lupin

4 Financials Yes Bank

1D 1W 1M 3M 12M BEST 1D 1W 1M 3M 6M 12M PER WORST 1D 1W 1M 3M 6M 12M PERSENSEX -0.1 1.2 4.8 2.8 11.5 BSE100NIFTY 0.0 1.9 5.3 2.1 9.0 Suzlon Energy 9.9 26.8 46.2 15.4 -35.0 -39.9 -1.8 #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/ABANKEX 0.2 1.6 6.2 -3.7 -7.1 ABB 5.5 9.2 9.7 6.5 20.1 -19.4 56.8 Adani Enterprises -2.1 14.4 33.6 -4.5 -10.6 -13.3 11.6BSE AUTO -0.6 -0.5 7.9 10.3 17.8 Dabur India Ltd. 4.8 5.5 6.9 4.5 25.5 34.7 33.6 Cummins India Ltd. -2.1 1.2 0.8 -8.5 -21.1 -17.0 15.5BSE METALS 0.1 6.0 6.1 22.2 -10.4 NHPC 4.2 4.2 5.3 9.1 -9.2 -8.6 10.2 Exide Industries Ltd -1.6 -6.3 1.7 -2.2 -2.7 -7.5 16.6BSE OIL -0.3 3.4 2.9 -2.3 4.6 Reliance Power 3.9 3.9 5.7 -4.6 2.3 -23.5 21.8 Unitech -1.6 -3.1 12.5 -2.6 -36.5 -27.3 13.5BSE POWER 1.7 3.4 6.7 -1.4 -19.7 HPCL 3.9 4.5 0.9 -14.0 -36.8 -34.1 7.1 Hindalco Industries -1.6 5.2 0.0 10.7 20.8 2.7 9.2BSE REALTY -0.2 3.0 12.9 -5.4 -24.5 Yes Bank 3.8 6.7 13.7 -15.2 -24.8 -6.8 8.8 Ranbaxy Labs -1.5 -0.5 16.8 22.0 -14.4 -27.3 24.6BSE IT 0.5 -1.9 8.4 19.0 50.0 Siemens 3.4 10.5 16.9 1.4 5.3 -19.8 54.8 Canara Bank Ltd. -1.5 -5.4 2.4 -28.9 -47.2 -47.9 N/ABSE CONSUMER DU -0.9 0.2 -1.3 -10.5 -18.7 United Breweries Ltd 2.6 1.9 6.2 10.4 15.6 30.8 90.0 Hero Honda Motors -1.4 -1.4 3.5 16.0 31.7 15.3 N/ABSE CAPITAL GOOD 1.1 5.2 13.7 0.5 -21.5 Tata Power Co. 2.6 1.3 3.6 -13.0 -13.4 -22.0 22.1 HDFC -1.3 0.8 4.5 -2.1 -3.4 7.9 22.7BSETECK 0.4 -0.8 8.1 16.4 45.9 PGCIL 2.4 2.7 2.8 -7.4 -7.1 -13.1 9.3 M&M -1.2 1.4 1.9 -4.8 -0.9 6.0 12.1BSE Healthcare 0.2 0.3 5.6 4.7 28.7 HCL Technologies 2.1 -4.6 1.3 23.0 51.1 81.8 14.0 ACC -1.2 -1.5 2.3 -8.8 -6.5 -19.1 17.5BSE FMCG -0.1 1.9 -0.5 -8.5 18.6 Reliance Capital 2.0 4.5 7.0 -6.1 3.7 -15.8 15.0 Idea Cellular -1.2 -3.8 7.9 20.0 54.9 118.4 31.6BSE PSU 0.7 2.3 2.3 -4.6 -22.7 Indian Oil Corporation 1.9 0.3 -8.1 -10.1 -33.7 -21.8 8.5 Bharat Forge -1.1 4.1 10.1 25.5 18.1 -6.2 19.2BSE 100 0.1 1.6 5.5 2.3 8.6 AXIS Bank 1.9 8.0 16.5 -0.1 -16.9 -1.6 10.3 Reliance Industries -1.1 3.8 3.3 -0.6 12.5 11.6 12.6BSE 500 0.2 1.5 5.6 1.8 4.7 Nestle India 1.9 10.0 13.2 -1.0 20.1 19.9 N/A DLF -1.1 6.8 15.8 -5.9 -33.5 -20.0 33.5Europe & US Coal India Ltd 1.8 2.7 -3.9 -1.8 -6.0 -18.1 10.6 Ambuja Cements -1.0 -1.7 3.2 -0.4 5.5 -3.4 19.8Dow Jones 0.5 2.0 0.4 -0.6 18.1 Gail (India) 1.8 0.9 -0.5 0.3 0.8 -6.1 9.7 Cipla -0.9 -2.3 -3.3 0.9 3.9 12.9 20.5S&P 500 0.6 3.3 3.1 3.7 24.2 Tata Chemicals 1.8 4.7 6.5 -9.6 -20.0 -20.8 8.6 Union Bank of India -0.9 -3.5 1.5 -23.8 -50.4 -42.4 2.4NASDAQ 0.2 3.6 4.4 9.8 31.4 Adani Ports and Speci 1.8 5.9 14.6 9.0 8.7 24.6 17.3 GMR Infrastructure -0.9 0.5 5.5 29.7 0.2 5.4 -18.6S&P Europe 0.7 1.9 2.6 5.7 13.7 Adani Ports and Speci 1.8 5.9 14.6 9.0 8.7 24.6 17.3 Ashok Leyland -0.9 -0.6 21.0 13.1 -26.2 -28.1 300.0Brazil Bovespa 0.7 2.7 3.4 15.7 -2.1 Reliance Comm 1.7 2.1 -0.3 12.9 64.0 160.9 29.2 SAIL -0.9 8.1 17.6 39.4 -1.0 -23.8 11.4Asia Wipro 1.7 2.8 6.5 34.0 50.2 68.4 17.2 ITC -0.8 0.7 -2.3 -9.0 7.7 17.9 30.3Nikkei 225 0.1 1.7 -0.2 -0.4 63.2 Colgate Palmolive(Ind 1.6 4.4 1.4 -13.7 -7.2 2.9 31.4 PFC -0.8 -2.7 -1.4 -4.6 -34.8 -32.3 3.6Hang Seng -0.5 0.4 -0.2 6.4 7.5 REC 1.5 1.3 -4.1 -2.4 -12.9 -11.4 4.6 HDIL -0.8 2.6 15.4 7.0 -22.3 -57.6 4.3S&P Asia 200 0.4 2.1 2.3 7.1 18.3 Asian Paints 1.3 11.2 7.6 5.9 12.6 33.7 41.4 Kotak Mahindra Bank -0.8 1.4 -1.5 -2.6 2.6 14.3 31.1Straits 0.5 1.1 -0.1 -1.3 5.2 Tata Global Beverages 1.3 1.5 11.7 4.8 17.2 3.0 20.8 NMDC -0.7 3.3 9.4 22.3 3.6 -28.0 N/ATWSE 0.0 1.0 1.5 2.5 14.7 Tata Steel 1.2 12.6 15.8 45.0 10.2 -16.0 12.3 Crompton Greaves -0.7 0.6 10.5 8.8 4.4 -23.2 16.0Kospi 0.2 1.1 2.3 8.0 6.7 Sun Pharma 1.2 1.9 14.2 15.3 34.3 82.7 30.1 Bajaj Auto -0.6 0.0 8.0 8.1 18.5 20.7 17.3Baltic Dry Index -1.7 -5.9 -3.0 62.7 78.1 Larsen & Toubro 1.0 6.7 15.2 3.6 -6.7 -17.5 17.5 Bank of Baroda -0.6 -1.3 10.2 -8.8 -18.6 -28.0 N/AVIX Index 1.3 -28.6 -6.8 5.3 -29.2 Reliance Infra 0.8 4.4 6.6 10.0 15.1 -14.1 6.9 Dr Reddy's Laboratorie -0.5 0.3 2.1 3.0 27.7 40.4 N/AAluminium 1.2 1.9 3.3 2.0 -5.3 IDFC 0.7 5.6 9.5 -20.5 -34.7 -33.4 7.8 Hindustan Zinc Ltd -0.5 3.4 4.9 27.3 17.6 1.7 N/ABrent -0.1 -0.5 1.7 0.6 1.2 TCS 0.7 -5.7 6.7 19.3 46.0 58.9 N/A United Spirits -0.4 3.0 7.0 -1.8 26.8 110.5 60.6Coal N/A 0.9 2.9 3.9 1.7 PNB 0.7 -0.1 0.7 -26.4 -37.4 -40.5 N/A Grasim Industries -0.4 -0.7 -2.0 -3.0 -5.6 -20.1 9.6Copper 1.3 1.4 0.8 4.3 -7.9 Bank Of India 0.7 -5.3 2.9 -18.1 -47.3 -40.7 N/A Sesa Goa -0.4 8.1 7.9 34.3 31.2 19.1 6.9Crude Oil (WTI) -0.2 -4.3 -4.5 -4.4 10.1 Federal Bank Ltd 0.6 13.6 33.3 4.1 -12.5 -19.2 N/A Maruti Suzuki India -0.3 4.6 7.8 4.2 -1.6 10.6 15.8Iron Ore -0.4 -0.4 2.3 1.5 12.1 GCPL 0.6 2.7 3.9 -6.6 0.6 19.9 N/A Bharat Petroleum Corp -0.3 5.5 11.7 2.4 -12.5 3.5 12.7Lead 0.8 3.3 6.3 7.1 6.2 Cairn India 0.6 3.2 3.8 7.3 15.1 -1.5 5.6 HDFC Bank -0.3 0.2 4.1 -2.1 -3.0 5.6 18.8Nickel 3.5 6.2 6.0 5.8 -10.4 Glenmark Pharma 0.5 -1.5 13.2 -7.0 17.9 41.6 20.1 BHEL -0.2 0.4 11.9 -12.0 -23.1 -39.4 8.0Steel N/A N/A N/A N/A N/A LIC Housing 0.5 0.7 7.3 -2.9 -10.1 -15.2 8.3 Bharti Airtel -0.1 5.8 5.1 6.7 17.6 29.9 32.5Tin 1.9 0.7 0.8 19.4 13.0 Shriram Transport 0.4 -2.1 -12.2 -17.6 -18.1 -10.1 7.9 IndusInd Bank Ltd -0.1 -0.4 10.1 -8.0 -7.6 17.4 16.7Zinc 1.2 2.1 5.2 4.7 6.2 NTPC 0.4 3.3 3.9 4.6 0.5 -11.3 11.1 Zee Entertainment -0.1 10.5 20.0 9.5 22.2 39.5 29.9USD : INR 0.2 -0.3 -1.5 3.2 15.3 Lupin 0.4 1.0 7.3 4.0 34.7 62.9 25.4 Infosys Technologies 0.0 0.3 10.5 15.0 47.4 41.8 18.4EUR : INR 0.2 1.0 -0.3 7.1 20.6 ONGC 0.4 3.8 3.4 -8.4 -12.5 3.6 9.8 Tata Motors 0.0 -2.8 13.8 27.1 35.0 43.6 -157.0GBP : INR 0.1 1.0 -1.0 8.6 15.9 SBI 0.3 1.2 1.5 -9.9 -26.7 -25.0 7.2 Jaiprakash Associates 0.0 19.6 26.0 -5.2 -39.2 -49.8 16.7CHF : INR 0.2 1.1 -0.5 7.3 18.2 JSPL 0.3 -2.0 -2.3 17.4 -24.9 -36.8 7.5 IDBI 0.0 1.9 6.6 -11.0 -25.3 -33.5 N/AJPY : INR 0.7 1.0 -1.0 5.0 -7.1 UltraTech Cement 0.2 -0.8 9.5 2.9 5.1 -3.0 20.6 Adani Power Limited 0.0 2.0 7.5 -8.3 -24.5 -23.7 -20.3Dollar index 0.0 -1.6 -1.6 -3.4 -1.0 JSW Steel 0.2 8.2 15.2 44.7 15.9 12.8 12.2 Hindustan Unilever 0.0 1.8 -5.5 -15.3 26.9 8.3 36.9USD: AUD 0.4 2.0 3.3 4.8 -5.1 Divi's Laboratories 0.1 1.0 3.8 7.2 -2.1 -10.8 18.5USD: CNY -0.1 -0.2 -0.6 -0.8 -2.6 ICICI Bank 0.1 1.6 7.1 2.2 -12.9 -6.3 11.9USD:EURO 0.1 1.9 2.2 4.3 6.2USD:YEN -0.2 -0.9 -1.0 -1.5 22.6 Source: Bloomberg

Super‐sector description: Consumer: FMCG, Media, Retail, Automobiles, Auto Ancillaries, Aviation, Hotels & Leisure Cyclicals: Metals, Oil & Gas, Fertilisers, Capital Goods, Engineering, Cement, Infrastructure Defensives: Pharmaceuticals, Telecom, IT Services Financials: Financial, Real Estate & Economy


Consumer Daily Ideas Stocks Featured: Bajaj Auto, Emami, ATFL, Dish TV, Raymond, Trader Comments INSTITUTIONAL USE ONLY 23 October 2013


Contents Stock/Sector Ticker Reco News/Analysis

1 Bajaj Auto BJAUT IN NEUTRAL Bajaj Auto The Discover 100m – an attempt to regain marketshare

2 Emami HMN IN BUY Emami Q2FY14 Result Preview: Estimate strong operating performance

3 ATFL ATFL IN BUY AgroTech Foods Q2FY14 Result Preview: Estimate revenue growth run rate to improve sequentially

4 Dish TV DITV IN BUY Dish TV Q2FY14 results preview

5 Raymond Ltd. RW IN NEUTRAL Raymond Ltd. Q2FY14 Result Preview

6 Trader Comments

% CNG 1D 1W 1M 3M 12M BEST 1D 1W 1M 3M 6M 12M PER WORST 1D 1W 1M 3M 6M 12M PERSENSEX -0.1 1.2 4.8 2.8 11.5 CONSUMER/ MEDIA/ RETAILNIFTY 0.0 1.9 5.3 2.1 9.0 Shree Renuka Sug 10.3 10.8 17.8 8.0 -13.0 -34.5 7.6BSE FMCG -0.1 1.9 -0.5 -8.5 18.6 Triveni Eng. 10.0 18.1 28.4 8.8 -0.1 -33.3 N/A Simbhaoli Sugar -4.8 -1.9 -9.2 -4.5 -33.0 -45.3 N/ABSE AUTO -0.6 -0.5 7.9 10.3 17.8 Tilaknagar Ind 9.3 8.8 11.0 23.0 1.5 3.0 12.2 HMVL -3.4 -9.9 7.6 -7.7 -16.6 -5.3 N/ABSE 100 0.1 1.6 5.5 2.3 8.6 TV Today 7.3 7.3 7.3 22.5 21.6 11.1 11.4 Dish TV -3.0 -4.8 3.4 -10.0 -25.3 -29.6 -181.2BSE 500 0.2 1.5 5.6 1.8 4.7 Jyothy Lab. 6.5 8.4 13.8 6.5 9.2 12.5 34.2 Marico -1.9 -3.7 -4.4 -1.9 -2.5 0.3 26.0Europe & US Raymond 6.1 9.0 22.3 16.3 -1.5 -26.2 17.4 Hathway -1.8 -0.4 -2.0 -6.6 4.8 13.5 154.1Dow Jones Ind 0.5 2.0 0.4 -0.6 18.1 Hotel Leela Venture 5.9 8.4 10.5 -1.7 -24.2 -45.3 N/A Indian Hotels Co. -1.4 2.2 7.5 1.5 -15.1 -25.4 51.7S&P 500 0.6 3.3 3.1 3.7 24.2 ENIL 5.1 16.8 28.6 45.3 44.7 39.8 20.1 DCHL -1.3 7.8 18.1 -15.5 -40.1 -68.8 N/ANASDAQ 0.2 3.6 4.4 9.8 31.4 Dabur 4.8 5.5 6.9 4.5 25.5 34.7 33.6 Future Retail -1.2 2.2 10.1 -13.6 -23.0 -21.0 -257.5S&P Europe 0.7 1.9 2.6 5.7 13.7 Pidilite Ind. 4.8 1.3 6.3 -8.2 5.9 35.3 26.7 Titan Ind. -1.1 0.4 -1.4 -13.5 -11.1 -13.6 25.7Brazil Bovespa 0.7 2.7 3.4 15.7 -2.1 Bajaj Hind. 3.7 16.5 22.1 -3.7 -26.4 -51.4 -1.2 Jubl Foodworks -1.0 4.4 3.8 -1.0 8.8 -8.9 46.1Asia Radico Khaitan 3.6 10.5 38.0 70.8 26.4 36.7 N/A HT Media -0.9 6.1 11.7 -1.4 -8.9 -9.0 11.7Nikkei 225 0.1 1.7 -0.2 -0.4 63.2 Kewal Kiran 3.5 18.9 38.5 24.9 39.5 43.5 N/A Eros Intnal. -0.9 -0.7 9.0 6.9 -14.9 -15.2 7.6Hang Seng -0.5 0.4 -0.2 6.4 7.5 Rel Mediawaorks 3.0 9.4 15.7 11.1 3.6 -28.8 N/A ITC -0.8 0.7 -2.3 -9.0 7.7 17.9 30.3S&P Asia 200 0.4 2.1 2.3 7.1 18.3 King Air 2.9 5.2 29.1 30.7 -11.8 -41.9 N/A Shoppers Stop -0.8 -1.0 -0.7 -12.4 -11.5 -16.8 113.7Straits 0.5 1.1 -0.1 -1.3 5.2 Emami 2.9 2.8 -0.1 -6.5 18.6 25.1 29.4 Gillette India -0.5 0.6 3.3 -8.3 -0.4 -6.2 N/ATWSE 0.0 1.0 1.5 2.5 14.7 United Breweries 2.6 1.9 6.2 10.4 15.6 30.8 90.0 EIH -0.4 1.2 1.5 6.5 -4.6 -27.7 35.7KOSPI 0.2 1.1 2.3 8.0 6.7 NDTV 2.4 -0.8 3.5 -5.8 29.7 28.4 N/A United Spirits -0.4 3.0 7.0 -1.8 26.8 110.5 60.6Baltic Dry -1.7 -5.9 -3.0 62.7 78.1 Provogue 2.2 3.6 -1.2 11.7 -14.5 -39.4 N/A DEN -0.4 -2.4 -10.8 -13.7 -29.0 -12.7 32.9Coffee 0.3 -2.8 -3.1 -11.7 -36.9 Rel Broadcast 1.9 5.5 9.4 36.0 94.7 21.9 N/A P&G Hyg.&H -0.2 0.7 4.6 -7.6 6.6 9.3 N/ACotton 0.0 -0.3 -1.5 -4.4 5.5 Nestle India 1.9 10.0 13.2 -1.0 20.1 19.9 N/A DB Corp. -0.2 2.5 7.0 -5.2 14.3 21.1 16.7Crude Oil, WTI -0.2 -4.3 -4.5 -4.4 10.1 Agro Tech Foods 1.8 0.0 6.6 -8.1 -0.3 22.0 25.5 Jet Airways -0.2 -4.1 -1.6 -6.4 -39.4 -2.4 -15.9Gold 0.1 4.6 1.4 -0.3 -21.5 Jag Prakashan 1.8 5.0 5.5 -4.3 -1.9 -15.2 13.0 Page Ind. -0.2 0.8 4.0 2.9 26.5 34.4 32.7Newsprint N/A -0.6 -0.4 -0.7 -5.2 Berger Paints 1.7 4.3 1.8 -4.2 21.0 65.8 32.6 VIP Ind. -0.2 4.1 15.3 17.7 -8.0 -33.4 N/APalm Oil -0.1 2.1 4.2 3.7 2.3 Balrampur Chini 1.7 6.4 13.6 13.7 -5.0 -30.7 15.5 Zee Ent. -0.1 10.5 20.0 9.5 22.2 39.5 29.9Soyabean Oil 0.3 0.3 11.2 8.6 3.7 GSKConsumer 1.6 1.1 4.4 -11.7 23.3 46.8 37.2 Spice Jet 0.0 1.2 -1.6 -22.1 -31.7 -36.8 -55.3Sugar 0.0 0.0 5.4 9.4 -8.4 Colgate India 1.6 4.4 1.4 -13.7 -7.2 2.9 31.4 HUL 0.0 1.8 -5.5 -15.3 26.9 8.3 36.9Tea 0.0 0.0 3.0 3.0 128.9 Sun TV 1.6 0.8 5.9 3.5 5.6 19.4 20.5 Zydus Wellness 0.1 0.4 4.6 -17.2 32.4 23.0 20.2Wool 0.0 -1.2 3.8 10.5 9.8 Network 18 Media & In 1.4 0.8 13.0 -0.8 -7.0 -11.0 N/A Mah. Holidays 0.4 2.5 1.6 -14.8 -15.7 -23.6 16.1Steel N/A N/A N/A N/A N/A Asian Paints 1.3 11.2 7.6 5.9 12.6 33.7 41.4 Akzo Nobel India 0.5 4.3 11.0 -19.0 -4.8 2.4 N/AAluminium 1.2 1.9 3.3 2.0 -5.3 Tata Global Bev. 1.3 1.5 11.7 4.8 17.2 3.0 20.8 Cox & Kings 0.6 -0.8 -1.4 -21.6 -31.0 -36.6 4.5Rubber -1.7 -11.6 8.2 18.4 28.9 Bata India 1.2 -0.9 8.3 -2.6 22.3 -2.2 28.4 GCPL 0.6 2.7 3.9 -6.6 0.6 19.9 N/AUSD : INR 0.2 -0.3 -1.5 3.2 15.3 Britannia 0.9 1.0 17.6 20.6 57.5 81.1 32.7 Bajaj Corp 0.8 -6.7 -10.6 -6.8 -0.8 24.2 18.5EUR : INR 0.2 -0.3 -1.5 3.2 15.3 Kansai Nerolac 0.8 0.4 4.6 -0.3 -1.7 21.8 27.0GBP : INR 0.2 1.0 -0.3 7.1 20.6 Info Edge 0.8 4.8 13.0 7.6 -0.8 -0.4 34.6CHF : INR 0.1 1.0 -1.0 8.6 15.9 AUTOSJPY : INR 0.2 1.1 -0.5 7.3 18.2 Ceat 6.9 3.8 34.9 30.7 51.0 27.4 N/A Banco Products -2.5 -10.7 12.0 13.8 3.5 -39.8 N/AMYR : INR 0.7 1.0 -1.0 5.0 -7.1 JK Tyre & Ind. 5.6 1.7 21.6 4.2 -2.6 -10.8 1.9 Exide Ind. -1.6 -6.3 1.7 -2.2 -2.7 -7.5 16.6

Sona Koyo Steering 4.3 7.9 19.9 -3.2 13.5 -12.4 N/A Hero Motocorp Ltd -1.4 -1.4 3.5 16.0 31.7 15.3 N/ATVS Motor 4.2 12.9 53.6 58.5 42.9 26.0 14.9 Motherson Sumi -1.4 -1.2 11.6 17.6 39.5 63.7 18.4Apollo Tyres 3.4 5.5 2.6 3.2 -24.0 -19.1 5.3 Mahindra & Mahindra -1.2 1.4 1.9 -4.8 -0.9 6.0 12.1Eicher Motors 3.0 0.2 16.4 4.9 39.8 68.9 26.3 Bharat Forge -1.1 4.1 10.1 25.5 18.1 -6.2 19.2Amtek Auto 2.9 5.3 11.5 -0.6 -0.6 -9.4 N/A Ashok Leyland -0.9 -0.6 21.0 13.1 -26.2 -28.1 300.0MRF 2.8 2.7 22.3 9.2 13.7 53.2 8.9 Bajaj Auto -0.6 0.0 8.0 8.1 18.5 20.7 17.3Amara Raja Batteries 1.2 2.8 3.7 19.2 15.9 38.0 N/A Maruti Suzuki -0.3 4.6 7.8 4.2 -1.6 10.6 15.8Greaves Cotton 0.7 3.0 4.4 -2.1 -20.6 -24.3 8.9 Tata Motors 0.0 -2.8 13.8 27.1 35.0 43.6 -157.0Escorts 0.3 0.3 15.1 12.1 68.7 43.8 7.2

23 October 2013 / INDIA EQUITY RESEARCH / CONSUMER DAILY IDEAS

– 3 of 22 –

AUTOMOBILES Deepak Jain (+9122 6667 9758 / [email protected])

Bajaj Auto (BJAUT: NEUTRAL, TP Rs. 2115, CMP: Rs. 2140): The Discover 100m – an attempt to regain marketshare Bajaj Auto recently launched a new variant of the Discover – the 100M. The price point at which the vehicle has been launched seems to indicate that the two wheeler industry is clearly responding to competitive pressures and a slowing demand. While there is no direct price war, companies are offering greater value to customers at existing price points. This we believe could eventually put pressure on industry margins. While on specifications/features the Discover 100M seems to be a balanced motorcycle, nonetheless sales could be negatively impacted by a potential confusion around the Discover brand and the knack of consumer to stick to vehicle perceived to be “reliable” (particularly, in a downturn). Pricing closer to the lower end, engine from the top end variant. With the launch of the 100M (the salesperson indicated that “M” stands for mileage) Bajaj Auto now has three Discovers with a 100cc engine – the 100 DTS‐I (an older base version), the 100M and the 100T (launched earlier this year, top end version). The “M has been priced at Rs47,770 (ex showroom Mumbai) which is extremely close to the price of the DTS‐I (Rs47,110). Hence, cannibalization is likely. However, the vehicle shares the engine of the 100T (the top end version) with similar styling. There are two major differences – (a) the M has 4 gears compared to 5 for the T and (b) the wheelbase has been reduced a bit to 1255mm (1305mm for the T). Compared to the DTS‐I (the base version), the M has about 20% extra power with contemporary styling. Positioning within Bajaj’s portfolio still unclear; creates confusion. Bajaj will not be removing the existing Discover 100DTS‐I. Effectively it will have two motorcycles with a 100cc engine at the same price point. This is bound to create confusion for customers (the salesperson at the showroom would often confuse the features of one bike with another). Further, given that the company plans to launch another 5 Discovers by February 2014 – we would not be surprised if another low end 100cc Discover is introduced. This could further diffuse the Discover brand. The launch highlights key industry trends. While there has been no direct price war, we believe the launch highlights the fact that the industry is aggressively looking to offer value to consumers at the same or even lower price points. Examples we highlight – the five year warranty by Hero/HMSI; the launch of the New Activa/Dream Yuga by HMSI at lower price points (compared to the old Activa/Dream Yuga) and the Discover 100M (20% more power at the same price). Bike performance to be key. Clearly, Bajaj Auto is betting on the new Discovers to recoup lost marketshare. We believe the company will be handicapped by (a) a potential diffusion in the Discover brand and (b) in a slowdown consumer stick to tried and tested product. Nonetheless, if the on‐road performance of the vehicle is robust it could bring incremental volumes. However, for now we maintain our Neutral stance on the stock.


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CONSUMER Naveen Kulkarni (+9122 6667 9947 / [email protected]) Ennette Fernandes (+9122 6667 9764 / [email protected])

Emami (HMN IN: BUY, TP: Rs. 500, CMP: Rs. 480) Q2FY14 Result Preview: Estimate strong operating performance • Expect strong volume growth of 10% YoY and pricing growth of 4% YoY in domestic business. International business growth is

expected at 17.5% YoY • Gross margins to expand by 300 bps YoY to 61.6% primarily led by sharp degrowth in prices for key input Menthol • Ad to sales ratio is expected to expand to 19.5%, up by 160 bps YoY • PAT growth robust at 20% YoY in spite of steep increase in tax rate by 500 bps to 18% Key factors to watch: Domestic volume and price growth, International business growth, Gross margins and Ad to sales ratio Concall Details: 23rd October 2013, 17:00 pm IST, Dial in number: 022 – 66290303, 30650103 Emami PC Estimate Consensus Deviation Q1FY14 QoQ (%) Q2FY13 YoY (%) Volume Growth YoY % 10 5.5 16 Price Growth YoY % 4 6.0 6 Revenues 4,139 4,098 1% 3,837 7.9% 3,607 14.8% Gross Profit 2,550 2,259 12.9% 2,115 20.6% Gross Margin % 61.6% 58.9% 58.6% Advertising Expenses 807 723 11.6% 646 25.0% Ad to Sales Ratio % 19.5% 18.9% 17.9% EBITDA 787 783 0% 592 32.8% 641 22.8% EBITDA Margin % 19.0% 19.1% 15.4% 17.8% Adjusted PAT 712 727 ‐2% 607 17.4% 592 20.3% Adjusted EPS (Rs.) 3.14 3.2 ‐2% 4.01 ‐21.7% 2.61 20.3%

AgroTech Foods (ATFL IN: BUY, TP: Rs. 620, CMP: Rs. 527) Q2FY14 Result Preview: Estimate revenue growth run rate to improve sequentially • Expect revenue growth rate to improve on QoQ basis led by higher price growth and marginal volume growth in Sundrop brand • EBITDA margins to expand by 90 bps YoY driven by Gross margin expansion of 154 bps YoY • Other operating cost structure expected to increase by 84 bps YoY due to costs related to new plant in Gujarat • Estimate robust PAT growth at 23% YoY Key factors to watch: Gross margin expansion, revenue growth and operating cost AgroTech Foods PC Estimate Consensus Deviation Q1FY14 QoQ (%) Q2FY13 YoY (%) Revenues 2,162 2,083 4% 1,834 17.9% 1,923 12.4% Gross Profit 704 579 21.6% 596 18.0% Gross Margin % 32.5% 31.6% 31.0% Advertising Expenses 125 101 24.0% 116 8.0% Ad to Sales Ratio % 5.8% 5.5% 6.0% EBITDA 182 170 7% 108 67.8% 144 26.4% EBITDA Margin % 8.4% 8.2% 5.9% 7.5% Adjusted PAT 114 104 10% 63 79.6% 92 23.4% Adjusted EPS (Rs.) 4.68 4.27 10% 2.61 79.6% 3.79 23.4%


– 5 of 22 –

MEDIA Naveen Kulkarni (+9122 6667 9947 / [email protected]) Vivekanand Subbaraman (+9122 6667 9766 / [email protected])

Dish TV (DITV IN, BUY, CMP: Rs 51, TP: Rs 64) Q2FY14 results preview Dish TV is expected to report its Q2FY14 results today. Below are key highlights: • Expect revenue of Rs 6bn, ARPU improvement of 1% QoQ to be the key highlight – We expect a gross subscriber addition of

0.45mn and net adds of 0.2mn for Dish TV. Our revenue estimate is Rs 6bn, up 12.9% YoY and 4.1% QoQ, including subscription revenue of Rs 5.5bn which is expected to increase by 16.4% YoY and 4.3% QoQ.

• EBITDA margins to be lower by ~360bps YoY owing to content cost inflation – Our EBITDA estimate for the company is Rs 1.54bn down 1% QoQ while increasing 27% YoY. Q2FY14 EBITDA margins at 25.6% are expected to fall by 360bps YoY, while rising 450bps QoQ on account of content cost inflation.

• Concall today o Time: 4.00 p.m. (India Time); 6.30 p.m. (H.K. /SG. Time); 11.30 a.m. (U.K. Time); 6.30 a.m. (N.Y. Time); 7.30 p.m.

(Japan Time) o Dial in details

+91 22 4039 2848/ +91 22 6629 4444 Hong Kong: 800 964 448 Singapore: 800 101 2045 U.K.: 0 808 101 1573 Japan: 0053 116 1110 U.S.A.: 1 866 746 2133

Dish TV Q2FY14 Earnings Estimates

(RS MN) SEP-13E JUN-13 QOQ (%) SEP-12 YOY (%) RESULT UPDATE HIGHLIGHTS

NET SUBSCRIBERS (MN) 11.1 10.9 1.9% 10.0 11.3%

ARPU (RS) 167 165 1.0% 159 4.8%

SUBSCRIPTION INCOME 5,502 5,277 4.3% 4,727 16.4%

REVENUES 6,022 5,784 4.1% 5,336 12.9%

EBITDA 1,540 1,217 26.5% 1,557 -1.1%

EBITDA MARGIN (%) 25.6% 21.0% 29.2%

PAT (102) (304) NM 551 NM EPS (RS) (0.1) (0.3) NM 0.5 NM

- WE ESTIMATE GROSS ADDS OF 0.45MN AND A NET ADDS OF 0.2MN. WE EXPECT ARPU TO CONTINUE ITS UPWARD TRAJECTORY TO RS 167, THUS BUILDING IN A REVENUE GROWTH OF 13% YOY AND 4% QOQ

- WE EXPECT EBITDA MARGIN COMPRESSION YOY ON ACCOUNT OF CONTENT COST INFLATION.

- WATCH OUT FOR COMMENTARY ON COMPETITIVE INTENSITY & CONTENT COST INFLATION

Source: Company, PhillipCapital India Research

RETAIL Abhishek Ranganathan (+9122 6667 9952 / [email protected]) Neha Garg (+9122 6667 9992 / [email protected])

Raymond Ltd. (RW IN: NEUTRAL, TP: Rs. 229, CMP: Rs. 279) Q2FY14 Result Preview • Estimate Revenues to grow at 11% YoY mainly led by mainly led by textile division (9%) and branded apparel segment registering

a growth of 10% (YoY). • Gross margins to expand by 200 bps YoY to 45.3% YoY on account of improvement in inventory management and price hikes

mitigating input inflation. • EBITDA margins is expected to improve by 160 bps (YoY) to 15.9%. • PAT is estimated at Rs 675mn growth of 34% (YoY). • Key factors to watch: Textiles and Branded Apparel profitability and inventory levels.


– 6 of 22 –

Trader Comments • RIL has picked up a 45% equity stake in Two Sisters Foods India (TSFI), which belongs to 2 Sisters Food Group (2SFG). 2SFG, the

third largest food company in UK, supplies poultry, red meat, fish, and bakery and chilled/frozen products to the retail, food service and food manufacturing sectors. Reliance Industries plans to run an exclusive chicken restaurant chain in India. The chain, to be called 'Chicken came First' will directly compete with KFC (Kentucky Fried Chicken).

• Jyothy Laboratories today reported o net profit at Rs 20.87 crore for Q2FY14 mainly on the back of robust sales in soap and detergent segment. The company had posted a net profit of Rs 1.32 crore during Q2FY13. Net sales of the company rose to Rs 305.91 crore for the second quarter, as against Rs 229.82 crore in the same period of previous financial year.

• Mother Dairy on Tuesday raised prices of all its variants by Rs 2 a litre. Earlier this month, Amul also increased the price of its milk by Rs 2 a litre in the capital.

Upcoming results & Events calendar Sector Date Company Name Results/ Events

Automobiles 23rd October 2013 Hero MotoCorp Q2FY14 Earnings Release

Consumer 23rd October 2013 Emami Ltd. Q2FY14 Earnings Release

23rd October 2013 AgroTech Foods Ltd. Q2FY14 Earnings Release

25th October 2013 ITC Ltd. Q2FY14 Earnings Release

25th October 2013 Colgate Palmolive India Ltd. Q2FY14 Earnings Release

26th October 2013 Hindustan Unilever Ltd. Q2FY14 Earnings Release

28th October 2013 Dabur India Ltd. Q2FY14 Earnings Release

29th October 2013 Marico Industries Ltd. Q2FY14 Earnings Release

30th October 2013 Nestle India Ltd. Q3CY13 Earnings Release

31st October 2013 Jubilant Foodworks Ltd. Q2FY14 Earnings Release

1st November 2013 Berger Paints India Ltd. Q2FY14 Earnings Release

6th November 2013 GlaxoConsumerHealthCare Ltd. Q3CY13 Earnings Release

11th November 2013 Godrej Consumer Products Ltd. Q2FY14 Earnings Release

Media 23rd October 2013 Dish TV Ltd. Q2FY14 Earnings Release & concall

24th October 2013 HMVL Q2FY14 Earnings Release

25th October 2013 HT Media Ltd. Q2FY14 Earnings Release

28th October 2013 TV18 broadcast Q2FY14 Earnings Release

30th October 2013 PVR Ltd. Q2FY14 Earnings Release

13th November 2013 Hathway Cable & Datacom Ltd. (unconfirmed) Q2FY14 Earnings Release

Retail 23rd October 2013 V‐Mart Retail Ltd. Q2FY14 Earnings Release

23rd October 2013 Raymond Ltd. Q2FY14 Earnings Release

25th October 2013 Shoppers Stop Ltd. Q2FY14 Earnings Release

25th October 2013 Pantaloon Fashion & Retail Limited Q2FY14 Earnings Release

25th October 2013 Just Dial Limited Q2FY14 Earnings Release

30th October 2013 Trent Ltd. Q2FY14 Earnings Release

30th October 2013 Bata India Ltd. Q3CY13 Earnings Release

31st October 2013 Titan Industries Ltd. Q2FY14 Earnings Release

31st October 2013 Future Retail Limited Q2FY14 Earnings Release

31st October 2013 Future Lifestyle Fashion Limited Q2FY14 Earnings Release


Cyclicals Daily Ideas Stocks Featured: GAIL, Coromandel International




1 GAIL GAIL IN Neutral GAIL ‐ Exempt from subsidy? ‐ blue sky valuations to come true

2 Coromandel

International CRIN IN UR

Results beat 6/3% at Ebitda/PAT ‐ Higher margins/lower interest helps, Cash conversion cycle turns

negative (initial view)

% C N G C lo se 1D 1W 1M 3M 12M B EST 1D 1W 1M 3M 6M 12M P ER WOR ST 1D 1W 1M 3M 12M P ERSENSEX 20865 -0.1 1.2 4.8 2.8 11.5 C apital Go o dsNIFTY 6203 0.0 1.9 5.3 2.1 9.0 TRF 9.8 11.0 5.8 0.1 -32.6 -53.6 -1130.5 Voltas -0.9 1.7 14.9 1.3 -24.5 13.6BSE Cap Goods 8878 1.1 5.2 13.7 0.5 -21.5 ABB 5.5 9.2 9.7 6.5 20.1 -19.4 56.8 Crompton Greaves -0.7 0.6 10.5 8.8 -23.2 16.0BSE M ETAL 9185 0.1 6.0 6.1 22.2 -10.4 Jyoti Structures 5.0 21.3 21.9 25.2 -14.5 -45.7 3.1 BHEL -0.2 0.4 11.9 -12.0 -39.4 8.0BSE OIL 8848 -0.3 3.4 2.9 -2.3 4.6 KEC Intl. 4.3 7.1 30.7 2.6 -37.8 -51.6 6.8 Blue Star 0.1 2.4 0.6 -7.5 -25.8 19.9BSE 100 6189 0.1 1.6 5.5 2.3 8.6 Siemens India 3.4 10.5 16.9 1.4 5.3 -19.8 54.8 Thermax 0.1 1.0 2.8 1.9 7.4 21.0BSE 500 7558 0.2 1.5 5.6 1.8 4.7 Voltamp Trans. 3.4 3.6 0.7 -8.7 -4.1 -24.3 N/A Elecon Eng 0.5 1.1 17.3 4.1 -43.6 6.5Euro pe & US TRIL 2.9 4.8 6.9 -20.0 -36.0 -51.3 10.5 BGR Energy 0.7 3.3 11.2 -0.6 -57.3 5.2Dow Jones Ind 15468 0.5 2.0 0.4 -0.6 18.1 Bharat B ijlee 2.7 2.7 1.9 -4.0 -23.8 -44.4 N/A L&T 1.0 6.7 15.2 3.6 -17.5 17.5S&P 500 1755 0.6 3.3 3.1 3.7 24.2 Emco 2.4 15.2 30.2 2.6 -21.3 -45.4 N/A Alstom T&D India Ltd 1.5 1.3 11.1 2.1 -15.2 12.9NASDAQ 3930 0.2 3.6 4.4 9.8 31.4 Tecpro Systems 2.4 -15.0 -0.9 -60.1 -82.1 -89.8 2.0 M cNally Bharat Eng 1.6 8.0 19.7 39.8 -40.7 3.9S&P Europe 2861 0.7 1.9 2.6 5.7 13.7 C ementBrazil Bovespa 56460 0.7 2.7 3.4 15.7 -2.1 Dalmia Bharat 4.5 2.1 9.3 23.2 16.2 N/A N/A JK Lakshmi Cem -3.3 -13.3 -2.0 -9.6 -46.0 6.2A sia Century Textile 2.1 7.4 17.5 7.5 -4.3 -28.5 61.5 JK Cement -2.7 -8.7 -7.6 -14.5 -34.4 6.2Nikkei 225 14713 0.1 1.7 -0.2 -0.4 63.2 Prism Cement 2.0 -0.4 -2.1 -12.7 -34.4 -46.5 -51.2 M angalam Cem -1.6 0.2 1.8 -8.3 -40.4 5.5Hang Seng 23316 -0.5 0.4 -0.2 6.4 7.5 Kesoram Ind. 1.8 -3.4 5.6 -6.0 -32.9 -46.7 N/A Shree Cement -1.2 1.2 6.1 -2.4 7.3 17.9S&P Asia 200 5373 0.4 2.1 2.3 7.1 18.3 Birla Corp 1.5 2.0 4.0 -6.2 -13.0 -21.4 N/A ACC -1.2 -1.5 2.3 -8.8 -19.1 17.5Straits 3210 0.5 1.1 -0.1 -1.3 5.2 Orient Paper & Ind. 0.8 1.1 10.2 14.4 14.9 -90.2 1.1 Ambuja Cements -1.0 -1.7 3.2 -0.4 -3.4 19.8TWSE 8418 0.0 1.0 1.5 2.5 14.7 Ultratech Cem 0.2 -0.8 9.5 2.9 5.1 -3.0 20.6KOSPI 2056 0.2 1.1 2.3 8.0 6.7 OCL India -0.2 0.1 1.2 -2.8 -7.5 -11.9 N/ABaltic Dry Index 1847 -1.7 -5.9 -3.0 62.7 78.1 India Cements -0.4 -7.2 -5.9 -15.3 -41.6 -51.3 8.3Baltic dirty tanker 617 -0.6 4.8 5.5 N/A -9.4 F ert ilizersVIX Index 13 1.3 -28.6 -6.8 5.3 -29.2 GSFC 1.9 -3.4 8.7 1.3 -7.1 -27.2 4.4 Deepak Fertilizers -1.1 -7.6 0.6 7.6 -21.0 5.4Aluminium 1829 1.2 1.9 3.3 2.0 -5.3 Rallis India 1.8 -3.7 6.3 10.7 28.7 14.6 20.7 Nagarjuna Agri -1.0 -2.8 -6.6 -0.8 -40.0 N/ABrent 110 -0.1 -0.5 1.7 0.6 1.2 Tata Chem 1.8 4.7 6.5 -9.6 -20.0 -20.8 8.6 Chambal Fertilizers 0.3 -2.4 5.5 0.9 -44.9 5.6Coal 79 N/A 0.9 2.9 3.9 1.7 Zuari Ind. 1.5 -0.1 -0.7 5.6 -25.5 -59.4 N/A Rashtriya Chemicals 0.5 2.4 5.6 1.6 -41.1 6.3Copper 7317 1.3 1.4 0.8 4.3 -7.9 Coromandel Intl. 1.3 0.8 0.9 33.2 21.6 -17.1 13.3 Dhanuka Agritech 0.5 -2.7 -5.0 -13.1 3.4 N/ACrude Oil 98 -0.2 -4.3 -4.5 -4.4 10.1 National Fertilizers 1.2 2.9 5.7 -32.4 -57.0 -72.7 N/AIron Ore 135 -0.4 -0.4 2.3 1.5 12.1 M etalsLead 2187 0.8 3.3 6.3 7.1 6.2 Jayaswal NECO 11.3 15.1 19.1 9.1 -11.1 -34.1 N/A Orissa M inerals -2.7 7.0 7.1 -2.1 -56.6 N/ANickel 14809 3.5 6.2 6.0 5.8 -10.4 Usha M artin 10.7 9.8 21.7 13.3 2.1 -12.6 14.6 Jai Balaji Ind. -2.1 -5.9 -7.5 -42.4 -53.8 N/ATin 23187 1.9 0.7 0.8 19.4 13.0 M onnet Ispat 7.0 7.7 11.3 15.7 -31.7 -53.8 N/A Sandur M anganese -1.7 -1.4 -1.8 -10.0 9.2 N/AZinc 1929 1.2 2.1 5.2 4.7 6.2 Jindal Saw 6.5 9.0 2.4 -3.9 -40.7 -56.2 6.3 Hindalco -1.6 5.2 0.0 10.7 2.7 9.2USD : INR 61.65 0.2 -0.3 -1.5 3.2 15.3 PSL/India 4.2 11.6 9.6 -12.2 -38.1 -62.7 N/A M an Ind. -1.5 -4.2 -15.5 -37.5 -69.8 N/AEUR : INR 84.29 0.2 1.0 -0.3 7.1 20.6 Coal India 1.8 2.7 -3.9 -1.8 -6.0 -18.1 10.6 NALCO -1.3 4.6 6.8 14.1 -30.9 N/AGBP : INR 99.48 0.1 1.0 -1.0 8.6 15.9 Sarda Energy 1.6 -2.3 20.9 22.0 6.5 -11.5 2.9 M OIL -1.1 6.2 9.3 16.0 -7.8 N/ACHF : INR 68.25 0.2 1.1 -0.5 7.3 18.2 Guj. NRE Coke 1.4 3.8 6.7 -8.0 -19.0 -28.0 11.2 SAIL -0.9 8.1 17.6 39.4 -23.8 11.4JPY : INR 0.63 0.7 1.0 -1.0 5.0 -7.1 Tata Steel 1.2 12.6 15.8 45.0 10.2 -16.0 12.3 Ratnamani M etals -0.8 1.7 7.4 -4.3 21.0 N/ADollar index 79.19 0.0 -1.6 -1.6 -3.4 -1.0 Godawari Power 1.0 0.6 4.6 18.0 4.1 -25.5 2.5 NM DC -0.7 3.3 9.4 22.3 -28.0 N/AUSD: CNY 6.09 -0.1 -0.2 -0.6 -0.8 -2.6 M aha. Seamless 0.9 -3.2 -6.9 -14.4 -19.5 -48.6 N/A Bhushan Steel -0.5 -0.1 -0.2 3.5 -1.8 8.9USD:EURO 1.38 0.1 1.9 2.2 4.3 6.2 Uttam Galva Steels 0.9 4.1 2.7 6.8 -19.2 -6.3 N/A Hindustan Zinc -0.5 3.4 4.9 27.3 1.7 N/AUSD:YEN 97.90 -0.2 -0.9 -1.0 -1.5 22.6 Adhunik M etaliks 0.4 2.0 -5.3 20.0 -5.0 -10.0 3.3 Indian M etals & Ferro -0.5 -1.6 2.8 22.9 -21.0 8.7

JSPL 0.3 -2.0 -2.3 17.4 -24.9 -36.8 7.5 Tata Sponge Iron -0.5 1.3 15.4 13.8 -5.5 4.8GM DC 0.3 9.1 17.8 5.0 -27.5 -49.5 6.5 Sesa Goa -0.4 8.1 7.9 34.3 19.1 6.9JSW Steel 0.2 8.2 15.2 44.7 15.9 12.8 12.2Hindustan Copper -0.1 1.4 -2.1 8.8 -34.8 -74.9 N/AOil & GasHPCL 3.9 4.5 0.9 -14.0 -36.8 -34.1 7.1 RIL -1.1 3.8 3.3 -0.6 11.6 12.6IOC 1.9 0.3 -8.1 -10.1 -33.7 -21.8 8.5 Oil India -0.7 0.1 -3.1 -12.5 -5.0 7.7Petronet LNG 1.0 0.6 2.3 0.2 -6.9 -23.6 N/A BPCL -0.3 5.5 11.7 2.4 3.5 12.7Indraprastha Gas 0.7 1.9 4.1 0.2 -2.9 12.8 N/A ONGC 0.4 3.8 3.4 -8.4 3.6 9.8Cairn India 0.6 3.2 3.8 7.3 15.1 -1.5 5.6 GSPL 0.4 1.2 10.7 2.3 -27.2 6.8

Source: Bloomberg

23 October 2013 / INDIA EQUITY RESEARCH / CYCLICALS DAILY IDEAS

– 8 of 22 –

OIL&GAS/AGRI INPUTS Gauri Anand (+9122 6667 9943 / [email protected]) Saurabh Rathi (+9122 6667 9951 / [email protected])

GAIL (GAIL IN, Neutral, CMP Rs 333, TP Rs 375)‐ GAIL ‐ Exempt from subsidy? ‐ blue sky valuations to come true • ET reports indicate Oil ministry has decided to exempt GAIL from paying subsidies. The annual under‐recovery for Gail is about

Rs 30 ~ 35 bn against a full year profit run‐rate of ~ Rs 40 bn. • The rationale is well‐placed as Gail doesn’t have any leverage to International crude oil prices nor is getting gas at subsidies rates

for production of LPG. • Should this be approved, it could mean about 30~50% earnings upside about Rs 16/sh additional impact to EPS. We assign a 5x

multiple to the incremental earnings and value the upside at Rs 80/sh (about 25% from current levels). Our PT is Rs 400 (not considering the subsidy exempt benefit).

Coromandel International (CRIN IN, UR, CMP Rs 232)‐ Results beat 6/3% at Ebitda/PAT ‐ Higher margins/lower interest helps, Cash conversion cycle turns negative (initial view) Coromandel International reported results have been ahead of our and street estimates by about 6/3% at the Ebitda and PAT front. Revenues fell almost in line with estimates. Higher margins/lower interest helps, Cash conversion cycle turns negative (initial view) The consolidated results include results of Sabero Organics and Liberty Phosphates • Revenues improved 21% yoy to Rs 32.15 bn – fert volumes improved a remarkable 34% yoy to 1.05 mmt – share of low margin

traded fert fell marginally to 39% from 41% ‐ Sabero and Liberty phosphates accounted for 10% of overall topline • Ebitda degrew by 7% yoy to Rs 2.98 bn largely on account of rise in other overhead spends (premium expenses incurred on

currency hedges) and fall in gross margins. Ebitda/mt has improved to Rs 2830/mt v/s Rs 1550/mt in Q1FY14. Sabero and Liberty phosphates accounted for 12% of overall Ebitda

• Substantial fall in interest outgo (down 25% qoq); helped adjusted PAT of Rs 1.69 bn (up 12% yoy and 3% ahead of estimates). • Exceptional items included interest on disputed taxes relating to earlier years of Rs 126 mn, that has been adjusted for

comparison. Sabero and Liberty accounted for about for about 12% of PAT • Cash conversion cycle improved immensely from 64 days to ‐1 day (negative working capital) View: Mainstay fertilisers Ebitda/mt (after adj for Sabero/Liberty) improved remarkably to Rs 2830/mt. We expect current margins to sustain following steep correction in feedcosts; a significant cut in credit; lower carry and thus a lower interest outgo (partly played out). An improved demand scenario and strengthening of INR could avert any further cost pressures. With Tifert supplies commencing in coming quarters, we expect share of high margin mfg fertilisers to pick up. H1FY14 PAT degrew 30%; Cormandel has attained about 49% of FY14E earnings, we shall revisit our estimates post tom’s call. Urea consumption in H1FY14 grew by 11% and overall fertiliser consumption degrew by 1%. Thus it is logical to expect at some point the growing disparity between urea and phosphatic fertiliser pricing would be reviewed and corrected; which would then drive demand for phosphatic fertilisers. In this backdrop a 10x PER for well governed businesses is undemanding in our view. We shall publish a detailed update post today’s conference call at 14 hrs IST (Dial in Primary Number: +91 22 3065 2479 Secondary Number: +91 22 6629 5841).

23 October 2013 / INDIA EQUITY RESEARCH / CYCLICALS DAILY IDEAS

– 9 of 22 –


Metals & Mining 23rd October 2013 Hindustan Zinc Q2FY14 results

23rd October 2013 Norsk Hydro Q3CY13 results

24th October 2013 NMDC Q2FY14 results

29th October 2013 JSW Steel Q2FY14 results

30th October 2013 JSPL Q2FY14 results

12th November 2013 Coal India Q2FY14 results

12th November 2013 Hindalco Q2FY14 results

13th November 2013 Tata Steel Q2FY14 results

Oil & Gas/Agri Inputs 24th October 2013 Deepak Fertiliser Q2FY14 results

25th October 2013 GSFC Q2FY14 results


Defensive Daily Ideas Stocks Featured: Bharti Airtel, Wipro, KPIT Tech, Lupin




1 Bharti Airtel BHARTI IN BUY Bharti Airtel: Africa – The night is darkest just before the dawn

2 Wipro WPRO IN Neutral Wipro 2QFY14 First Cut: Robust set of numbers, ahead of street estimates

3 KPIT Tech KPIT IN BUY KPIT Tech 2QFY14 First Cut: Muted set of numbers; margins disappoint

4 Lupin LPC IN NR Lupin Launches two more strengths of its Antara brand in US: Just a life‐cycle management,

no meaningful earning implication

5 Trader Comments

% CNG 1D 1W 1M 3M 12M BEST 1D 1W 1M 3M 6M 12M PER WORST 1D 1W 1M 3M 6M 12M PERSENSEX -0.1 1.2 4.8 2.8 11.5 P harma/ HealthcareNIFTY 0.0 1.9 5.3 2.1 9.0 Jubilant Life Science 5.4 -1.2 -10.3 -12.8 -56.4 -67.1 3.4 Nectar Lifes -3.8 -1.5 19.3 -5.2 -2.2 -29.1 N/ABSET Healthcare 0.2 0.3 5.6 4.7 28.7 Indoco Remedies 4.9 10.6 19.7 12.6 26.3 22.4 N/A AstraZeneca Pharma -2.0 -2.4 0.8 25.6 20.6 -48.4 N/ABSETECK 0.4 -0.8 8.1 16.4 45.9 Vivimed Labs 3.3 11.9 29.1 -16.4 -31.6 -41.6 N/A Bal Pharma -1.9 5.9 13.6 9.1 7.8 -17.2 N/ABSE IT 0.5 -1.9 8.4 19.0 50.0 Biocon 2.7 0.8 2.1 8.0 18.5 28.5 17.4 IND Swift -1.8 -7.1 -13.3 -7.2 -24.3 -66.7 N/ABSE 100 0.1 1.6 5.5 2.3 8.6 Dishman Pharma 2.1 4.7 23.4 5.2 -11.2 -35.4 4.2 Ranbaxy Labs -1.5 -0.5 16.8 22.0 -14.4 -27.3 24.6BSE 500 0.2 1.5 5.6 1.8 4.7 Abbott India 2.1 -0.6 0.3 -6.1 -0.9 -7.6 N/A Natco Pharma -1.4 1.1 12.2 32.4 56.8 82.1 22.3Europe & US Orchid Chem 1.7 0.8 4.6 -2.3 -28.9 -54.8 N/A Hiran Orgochem -1.4 9.0 25.9 2.8 -16.1 -39.7 N/ADow Jones 0.5 2.0 0.4 -0.6 18.1 Aarti Drugs 1.3 1.2 -2.5 -23.2 13.5 6.8 N/A Ipca Labs -1.0 -6.1 -1.3 5.9 31.7 45.7 18.5S&P 500 0.6 3.3 3.1 3.7 24.2 Aurobindo Pharma 1.2 5.4 17.5 26.2 17.6 38.7 10.1 Cipla/India -0.9 -2.3 -3.3 0.9 3.9 12.9 20.5NASDAQ 0.2 3.6 4.4 9.8 31.4 Sun Pharm 1.2 1.9 14.2 15.3 34.3 82.7 30.1 Elder Pharma -0.7 -2.3 -10.0 -10.9 -18.7 5.2 6.9S&P Europe 0.7 1.9 2.6 5.7 13.7 Marksans Pharma 1.2 -3.5 25.7 -1.8 142.6 533.6 N/A Dr Reddy's Labs -0.5 0.3 2.1 3.0 27.7 40.4 N/ABrazil Bovespa 0.7 2.7 3.4 15.7 -2.1 Granules India 1.0 0.3 19.1 14.9 66.2 -12.7 N/A Fortis Healthcare -0.5 -3.2 3.6 1.6 1.2 -1.7 N/AAsia Glenmark Pharma 0.5 -1.5 13.2 -7.0 17.9 41.6 20.1 FDC/India -0.4 0.0 0.8 -6.6 -5.6 -2.7 N/ANikkei 225 0.1 1.7 -0.2 -0.4 63.2 Unichem Lab 0.4 -1.7 6.0 1.2 -5.0 -15.3 10.2 Hikal Ltd -0.4 0.9 2.8 12.7 10.8 1.8 N/AHang Seng -0.5 0.4 -0.2 6.4 7.5 Lupin 0.4 1.0 7.3 4.0 34.7 62.9 25.4 Shasun Pharma -0.3 -2.0 -2.4 6.0 -5.2 -54.7 6.4S&P Asia 200 0.4 2.1 2.3 7.1 18.3 Apollo Hospitals 0.2 1.4 2.5 -9.0 8.1 18.7 34.9 Twilight Litaka -0.3 -1.3 -22.3 -7.5 -47.1 -77.2 N/AStraits 0.5 1.1 -0.1 -1.3 5.2 Cadila Healthcare 0.2 -0.4 -3.1 -11.7 -14.3 -23.5 17.8 Pfizer/India -0.3 -0.4 -0.8 -0.2 6.9 -9.2 N/ATWSE 0.0 1.0 1.5 2.5 14.7 Ajanta Pharma 0.2 0.0 -1.0 -2.8 55.9 186.6 16.9 Lotus Eye Care -0.2 5.1 8.5 1.7 -14.7 -29.8 N/AKOSPI 0.2 1.1 2.3 8.0 6.7 Vimta Labs 0.1 -17.6 10.7 35.1 80.3 82.7 N/A Suven Life Science -0.1 9.3 26.9 114.6 106.9 99.8 N/ABaltic Dry -1.7 -5.9 -3.0 62.7 78.1 Divi's Lab 0.1 1.0 3.8 7.2 -2.1 -10.8 18.5 Strides Arcolab 0.0 -1.3 -5.7 9.8 3.6 -7.1 20.1USD : INR 0.2 -0.3 -1.5 3.2 15.3 Torrent Pharma 0.1 0.3 -2.0 -3.5 27.9 26.7 14.1 Jupiter Bioscience 0.0 0.0 0.0 0.0 0.0 -31.4 N/AEUR : INR 0.2 1.0 -0.3 7.1 20.6 Sanofi India Ltd 0.1 -3.5 -2.3 -0.8 -6.7 7.3 N/A Opto Circuits India 0.0 7.0 6.8 -17.6 -61.3 -81.3 1.5GBP : INR 0.1 1.0 -1.0 8.6 15.9 Wyeth 0.0 -2.7 -4.3 -26.7 -30.1 -38.0 N/A Ankur Drugs 0.0 0.0 0.0 -34.5 -50.6 -72.9 N/ACHF : INR 0.2 1.1 -0.5 7.3 18.2 GlaxoSmithKline Pha 0.0 0.0 2.9 -0.4 12.5 24.3 32.5JPY : INR 0.7 1.0 -1.0 5.0 -7.1 TelecomDollar 0.0 -1.6 -1.6 -3.4 -1.0 GTL 9.8 25.8 31.3 6.2 -3.5 -47.4 N/A Bharti Infratel Ltd -1.9 0.5 1.1 6.9 -7.9 N/A 21.9USD: AUD 0.4 2.0 3.3 4.8 -5.1 OnMobile Global 5.8 1.0 17.6 10.5 -17.0 -27.9 7.0 Idea Cellular -1.2 -3.8 7.9 20.0 54.9 118.4 31.6USD: CNY -0.1 -0.2 -0.6 -0.8 -2.6 Tulip Telecom 4.9 -2.8 11.7 -11.4 -52.2 -80.0 N/A Tata Comm -0.2 1.0 22.9 37.2 0.4 -9.2 -30.9USD:EURO 0.1 1.9 2.2 4.3 6.2 MTNL 3.8 1.6 8.9 -5.8 -26.0 -46.8 N/A Bharti Airtel -0.1 5.8 5.1 6.7 17.6 29.9 32.5USD:YEN -0.2 -0.9 -1.0 -1.5 22.6 Reliance Comm 1.7 2.1 -0.3 12.9 64.0 160.9 29.2

ITEducomp Solutions L 5.6 7.9 20.0 -31.4 -65.9 -85.7 N/A Allied Digital -2.7 0.8 -8.4 66.8 82.1 -13.2 N/AEveronn Education L 5.0 1.4 6.4 -3.0 -45.7 -79.1 N/A eClerx Services Ltd -1.7 -11.6 8.2 18.4 47.1 28.9 N/A3i Infotech 4.9 7.3 37.4 25.1 4.9 -23.1 N/A Mphasis -1.4 -1.9 2.1 7.4 18.2 9.0 11.9Firstsource Solutions 3.7 0.3 27.5 44.2 81.8 47.0 5.4 Infinite Computer -1.3 -2.4 2.3 31.5 8.1 -25.5 3.7Infotech Enterprises 2.5 2.0 23.9 25.6 35.3 19.2 N/A Oracle Financial Sevi -0.6 -0.3 7.9 17.2 28.5 9.9 21.8HCL Tech 2.1 -4.6 1.3 23.0 51.1 81.8 14.0 Sasken Communicat -0.4 3.7 13.9 14.7 -2.0 4.8 11.2Wipro 1.7 2.8 6.5 34.0 50.2 68.4 17.2 Infosys Technologies 0.0 0.3 10.5 15.0 47.4 41.8 18.4Polaris Software Lab 1.5 0.5 22.6 22.9 24.2 11.4 6.6 Tech Mahindra 0.0 -0.7 16.7 31.2 67.3 66.3 12.8MindTree 1.3 -3.7 19.6 38.4 60.3 99.3 12.6 Rolta India 0.1 -4.6 0.7 1.2 -5.9 -8.6 3.9KPIT Cummins 0.9 0.9 10.6 9.8 54.8 22.1 N/A NIIT Tech 0.2 -7.0 -0.6 7.1 2.5 1.2 7.2Info Edge India 0.8 4.8 13.0 7.6 -0.8 -0.4 34.6 Mastek 0.3 0.4 29.7 30.1 19.1 25.1 8.2NIIT Ltd 0.7 2.0 9.7 19.0 -12.3 -37.5 9.2 Hexaware Tech 0.4 1.7 5.5 20.7 53.9 20.9 10.5Persistent Systems 0.7 8.0 25.4 37.7 34.8 59.6 12.4 Zensar Technologies 0.4 1.6 13.2 5.0 1.5 1.9 5.2Tata Consultancy 0.7 -5.7 6.7 19.3 46.0 58.9 N/AADRDr Reddy's Lab 0.4 2.2 6.2 0.5 13.0 25.4 0.3Infosys Tech 0.4 -0.1 12.9 12.4 32.9 26.4 N/A Wipro -1.9 0.0 9.6 40.3 44.1 56.0 0.4

Source: Bloomberg

23 October 2013 / INDIA EQUITY RESEARCH / DEFENSIVE DAILY IDEAS

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TELECOM Naveen Kulkarni (+9122 6667 9947 / [email protected]) Vivekanand Subbaraman (+9122 6667 9766 / [email protected])

Bharti Airtel (BHARTI IN, BUY, CMP: Rs 352, TP: Rs 460): Africa – The night is darkest just before the dawn For detailed report Click here Bharti Airtel’s YTD stock performance has not been inspiring despite significant improvement in the operating conditions of the Indian Telecom market. Bharti Airtel is up 12% YTD significantly underperforming Idea Cellular, which has given an astounding return of 77% YTD. A significant portion of the underperformance of Bharti Airtel can be attributed to its African operations which have disappointed on numerous occasions. The weak operating performance in Africa has led to a significant stock de‐rating and sharp cut in estimates of the international operations. Considering the muted expectations, positive surprises (especially on revenues) are likely as the macroeconomic conditions in Africa are improving. Our key reasons are as follows:

Rs 66 per share value destruction due to Africa downgrades but a reversal could be faster than expectations: We estimate that the market incorporates a negative NPV of Rs 66 for Bharti’s African operations on account of sluggish operating performance and depreciation of INR. Consensus estimates for FY15 Africa EBIDTA have been downgraded by ~40% and we believe that the downgrade cycle has largely bottomed. The African operations can see significant improvements from the current levels as the macroeconomic environment in the major revenue contributing economies is improving as indicated by waning inflation and stable GDP growth. In the most critical revenue contributing market of Nigeria inflation is at a 5 year low and growth is picking up in the non oil sectors. The competitive intensity in Nigeria is stabilizing from the peak levels of late 2012 and early 2013 when the market leader MTN slashed tariffs by ~30%. Overall for Africa, we believe that revenue growth will pick up in the forthcoming quarters but margin improvements will be protracted as Bharti will have to participate in the markets aggressively. Notwithstanding the sluggish margin improvements, we believe that Bharti can surprise the muted market expectations positively with revenue growth and a significant reversal of the negative Africa NPV is likely in the forthcoming quarters.

Bharti Infratel and DTH businesses have ample scope for value unlocking: Bharti’s DTH business EBIDTA is currently insignificant as the business is in an investment mode. On the other hand Bharti Infratel is currently undervalued on account inefficient capital structure. Improving the capital structure of Bharti Infratel and strategic stake sale or listing of the DTH business can unlock Rs 35/share value (Rs 25 per share for Bharti Infratel and Rs 10 per share for Airtel DTH) for Bharti Airtel presenting an upside of 10% from the current levels.

Best equipped for long‐term growth: Bharti has spent the most amongst all telcos and has invested Rs 205bn till date to acquire spectrum through auctions and acquisitions. The company has 3G spectrum in 13 circles and 4G spectrum in 8 circles with a footprint covering all the metros and Category A & B circles barring Gujarat & MP. We believe Bharti is the best prepared Indian telecom operator for long‐term growth driven by data services. The current discounted valuations fail to ascribe fair value to Bharti’s long‐term prospects which are significantly superior to industry peers. Valuation discount to narrow: Bharti currently trades at EV/EBIDTA of 6.5x on FY14E EBIDTA as compared to Idea Cellular at 8.2x FY14E. We believe the discount is likely to narrow over the medium term with improvement in traction in Africa business, stabilizing of INR and revenue market share improvement in the Indian wireless market. We value Bharti at Rs 460 based on DCF methodology which entails an upside of 31% from the current levels. We maintain our conviction Buy rating on the stock.

IT SERVICES Vibhor Singhal (+9122 6667 9949 / [email protected]) Varun Vijayan (+9122 6667 9992 / [email protected])

Wipro (WPRO IN, CMP: Rs515, NEUTRAL) 2QFY14 First Cut: Robust set of numbers, ahead of street estimates 2.7% QoQ revenue growth in IT Services USD terms – beating consensus expectation of 2‐2.5% • $ revenue at $1,631mn – growth of 3.2% QoQ in constant currency terms. • INR Revenues at Rs107.7bn (+11% QoQ)


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• US grew by 2.9% QoQ, EU by 2.3% and EM by 6.8%. Amongst service lines, IMS grew by 2.7% and Business App Srvc by 4.7%. BFSI grew by 2.3% QoQ, Manf by 2.2% and Telecom by 5.0%.

EBIT Margins expand by 260bps QoQ – again higher than street expectation of 130bps expansion PAT at Rs19.3bn ‐ growth of 19% QoQ – marginally ahead of consensus expectations • Utilizations at 74.3% (+100bps QoQ). Attrition flat at 13.5% Strong guidance for 3QFY14 at 1.8 – 3.6% QoQ growth – especially given that Q3 is traditionally a weaker quarter Quarterly Snapshot

Actual Consensus Year End March (Rs mn) Q2FY14A Q2FY14E Deviation Q1FY14 QoQ % Q2FY13 YoY%

US$ revenues ‐ IT Services 1,631 1,588 2.7% 1,541 6% INR revenues 107,727 109,500 ‐1.6% 97,294 10.7% 92,203 17% EBIT 22,422 21,350 5.0% 17,702 26.7% 17,347 29% EBIT margins % 20.8% 19.5% 132 18.2% 262 18.8% 200 Other income 3,412 3,361 2,930 PAT (incl FX) 19,320 18,500 4.4% 16,233 19.0% 16,106 20% EPS 7.85 7.50 6.60 6.57 Source: Company, Phillipcapital India Research KPIT Tech (KPIT IN, CMP: Rs147, BUY) 2QFY14 First Cut: Muted set of numbers; margins disappoint 3.1% QoQ revenue growth in USD terms – inline with consensus expectations • $ revenue at $112mn – growth of 3.1% QoQ • Rupee revenue at Rs7bn – growth of 15% QoQ • US declined by 1.0% QoQ, Europe grew by 8% and ROW by 24% QoQ. IES grew by 3% QoQ while Auto & Allied Engg grew by 6%

QoQ. EBITDA Margins declined by 37bps QoQ – as against consensus expectation of expansion of ~200bps • Margins declined primarily due to Rs115mn (164bps impact) expenses on additional hiring and training; and Rs120mn (171bps

impact) non‐recurring provision for a delayed ERP project. • The above two completely negated the250bps positive impact of Rupee depreciation PAT at Rs667nn ‐ growth of 11% QoQ – marginally below consensus expectations of Rs693mn • Onsite Utilizations at 92.4% (‐180bps QoQ) and Offshore utilizations at 72.9% (‐50bps QoQ)


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Quarterly Snapshot Actual Consensus Year End March (Rs mn) Q2FY14A Q2FY14E Deviation Q1FY14 QoQ % Q2FY13 YoY%

US$ revenues ‐ IT Services 112 113 ‐0.5% 109 3.1% 103 8.5% INR revenues 7,028 7,025 0.0% 6,132 14.6% 5,672 23.9% EBITDA 1,088 1,271 ‐14.4% 972 11.9% 945 15.1% EBITDA margins % 15.5% 18.1% ‐261bps 15.9% ‐37bps 16.7% ‐118bps Other income 23 59 ‐191 PAT (incl FX) 667 693 ‐3.7% 601 11.0% 461 44.7% EPS 3.4 4.0 3.0 2.5 Source: Company, Phillipcapital India Research Conf call at 4:00 PM (022 6629 5850)

PHARMACEUTICALS Surya Patra (+9122 6667 9768 / [email protected])

Lupin (LPC IN, NR, CMP: Rs 916) Launches two more strengths of its Antara brand in US: Just a life‐cycle management, no meaningful earning implication • Lupin has received final approval for its supplemental New Drug Application (sNDA) for Antara® (Fenofibrate) capsules, 30 mg &

90 mg strengths from USFDA. It will commence marketing the product shortly. It has already been marketing Antara® Capsules, 43 mg & 130 mg strengths.

• We believe the launches new strengths of Antara is Just a life‐cycle management of the brand as the recent generic competition has eroded the sales potential of the brand. Hence, we don’t expect any meaningful earning implication from the product.

Trader Comments • Bharat Sanchar Nigam Limited (BSNL) is likely to turn down the Telecom Regulatory Authority’s (TRAI) proposal to share its dark

or ‘unused’ fibre‐based network with private telecom operators in the Northeast region • Tata Docomo plans to enhance its network coverage in the Maharashtra and Goa circles by adding about 1500 tower sites • Media reports mention that Tata Teleservices Maharashtra Ltd. is set to merge with Tata Teleservices Ltd. Tata Docomo too is

expected to infuse US$ 1bn in the business.


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IT Services 24 Oct 2013 Eclerx Services Q2FY14 results

Mastek Q1FY14 results

Rolta Q2FY14 results

1st Nov 2013 3i Infotech Q2FY14 results

Telecom 24th Oct 2013 Idea Cellular Ltd. Q2FY14 results

25th Oct 2013 Idea Cellular Q2FY14 concall (2:30PM IST/+91‐22‐6629 0339/+91‐22‐3065 0126) Q2FY14 results call

28th Oct 2013 Etisalat (Bharti’s competitor in Nigeria) Q3CY13 results

Bharti Infratel Ltd. Q2FY14 results

Bharti Infratel Ltd. (3:30PM IST/+91 22 4444 9999/Passcode:A0001GXP) Q2FY14 results

Tata Teleservices Maharashtra Ltd. (TTML) Q2FY14 results

29th Oct 2013 Tata Communications (result & analyst meet) Q2FY14 results

Onmobile Global Ltd. Q2FY14 results

30th Oct 2013 Bharti Airtel Ltd. Q2FY14 results

Bharti Airtel Concall (2:30PM IST/+912244449999: Passcode: A0001GXT) Q2FY14 results call

31st Oct 2013 Telenor Q3CY13 results

5th Nov 2013 Safaricom Ltd. (Bharti’s competitor in Africa) Q3CY13 results

11th Nov 2013 Vodacom Ltd. (Bharti’s competitor in Africa) Q2FY14 results

12th Nov 2013 Vodafone Ltd. Q2FY14 results

Pharma 24 Oct 2013 BIOCON Q2FY14 results

IPCA Q2FY14 results

25 Oct 2013 Alembic Pharma Q2FY14 results

28 Oct 2013 Taro Pharma Q2FY14 results

29 Oct 2013 Ranbaxy Labs Q3CY14 results

30 Oct 2013 Lupin Q2FY14 results

Torrent Pharma Q2FY14 results

31 Oct 2013 Dishman Pharma Q2FY14 results

Cadila Healthcare Q2FY14 results


Financial Daily Ideas Stocks Featured: Yes Bank




1 Yes Bank YES IN Not Rated Yes Bank Q2FY14 Results – One off income drives profitability % CNG 1D 1W 1M 3M 12M BEST 1D 1W 1M 3M 6M 12M PER WORST 1D 1W 1M 3M 12M PERSENSEX -0.1 1.2 4.8 2.8 11.5 BankingNIFTY 0.0 1.9 5.3 2.1 9.0 SKS Microfinance Ltd 7.0 6.7 20.2 61.5 22.4 31.5 32.6 Karnataka Bank Ltd -5.1 -8.8 13.4 -4.9 -26.3 4.8

BSE BANKEX 0.2 1.6 6.2 -3.7 -7.1 Yes Bank Ltd 3.8 6.7 13.7 -15.2 -24.8 -6.8 8.8 Mahindra & Mahindra -3.5 -2.2 3.4 0.8 52.1 14.3

BSE PSU 0.7 2.3 2.3 -4.6 -22.7 Reliance Capital Ltd 2.0 4.5 7.0 -6.1 3.7 -15.8 15.0 Dhanlaxmi Bank Ltd -2.0 -2.8 10.3 35.1 -23.6 N/A

BSE REALTY -0.2 3.0 12.9 -5.4 -24.5 Development Credit Ba 2.0 1.7 17.2 6.5 11.6 18.5 N/A Canara Bank -1.5 -5.4 2.4 -28.9 -47.9 N/A

BSE 100 0.1 1.6 5.5 2.3 8.6 Axis Bank Ltd 1.9 8.0 16.5 -0.1 -16.9 -1.6 10.3 Housing Development -1.3 0.8 4.5 -2.1 7.9 22.7

BSE 500 0.2 1.5 5.6 1.8 4.7 Andhra Bank 1.7 -0.8 4.0 -29.4 -40.3 -50.8 N/A Union Bank of India -0.9 -3.5 1.5 -23.8 -42.4 2.4

Europe & America Jammu & Kashmir Ban 1.6 7.8 8.7 -2.3 -4.7 4.8 5.4 Vijaya Bank -0.9 2.5 6.8 -10.2 -29.0 4.0

Dow Jones Industrial A 0.5 2.0 0.4 -0.6 18.1 Rural Electrification Co 1.5 1.3 -4.1 -2.4 -12.9 -11.4 4.6 Power Finance Corp L -0.8 -2.7 -1.4 -4.6 -32.3 3.6

S&P 500 0.6 3.3 3.1 3.7 24.2 Central Bank Of India 1.3 0.7 -2.9 -16.8 -23.0 -25.9 N/A Kotak Mahindra Bank -0.8 1.4 -1.5 -2.6 14.3 31.1

NASDAQ Composite 0.2 3.6 4.4 9.8 31.4 ING Vysya Bank Ltd 1.0 0.2 19.7 1.4 1.5 26.1 N/A United Bank of India -0.8 -0.6 3.0 -28.4 -52.1 N/A

S&P Europe 0.7 1.9 2.6 5.7 13.7 Dena Bank 1.0 1.2 7.8 -23.8 -45.8 -52.6 2.2 Dewan Housing Finan -0.8 14.0 36.3 -5.0 -26.0 3.8

Brazil Bovespa 0.7 2.7 3.4 15.7 -2.1 Infrastructure Develop 0.7 5.6 9.5 -20.5 -34.7 -33.4 7.8 Bank of Baroda -0.6 -1.3 10.2 -8.8 -28.0 N/A

Asia Punjab National Bank 0.7 -0.1 0.7 -26.4 -37.4 -40.5 N/A Manappuram General -0.5 -1.8 -0.9 4.7 -61.5 N/A

Nikkei 225 0.1 1.7 -0.2 -0.4 63.2 Syndicate Bank 0.7 -2.2 10.3 -32.4 -35.8 -37.2 N/A HDFC Bank Ltd -0.3 0.2 4.1 -2.1 5.6 18.8

Hang Seng -0.5 0.4 -0.2 6.4 7.5 Bank of India 0.7 -5.3 2.9 -18.1 -47.3 -40.7 N/A IndusInd Bank Ltd -0.1 -0.4 10.1 -8.0 17.4 16.7

S&P Asia 200 0.4 2.1 2.3 7.1 18.3 Corp Bank 0.7 0.4 2.4 -18.3 -28.4 -33.6 2.1 IDBI Bank Ltd 0.0 1.9 6.6 -11.0 -33.5 N/A

Straits 0.5 1.1 -0.1 -1.3 5.2 Federal Bank Ltd 0.6 13.6 33.3 4.1 -12.5 -19.2 N/A ICICI Bank Ltd 0.1 1.6 7.1 2.2 -6.3 11.9

TWSE 0.0 1.0 1.5 2.5 14.7 Indian Overseas Bank 0.6 0.4 9.0 2.9 -25.2 -37.1 N/A Bajaj Finserv Ltd 0.2 0.1 9.1 -0.2 -27.0 12.1

KOSPI 0.2 1.1 2.3 8.0 6.7 Allahabad Bank 0.5 -2.0 5.5 -2.1 -39.4 -41.7 2.6 Indian Bank 0.2 -3.3 1.0 -30.0 -58.7 N/A

Baltic Dry Index -1.7 -5.9 -3.0 62.7 78.1 Oriental Bank of Comm 0.5 -2.3 0.4 -9.9 -43.4 -46.0 N/A City Union Bank Ltd 0.2 0.7 11.4 -7.3 -3.0 N/A

USD : INR 0.2 -0.3 -1.5 3.2 15.3 LIC Housing Finance L 0.5 0.7 7.3 -2.9 -10.1 -15.2 8.3 UCO Bank 0.3 -1.6 13.8 -0.8 -10.8 N/A

EUR : INR 0.2 1.0 -0.3 7.1 20.6 South Indian Bank Ltd 0.5 -0.9 6.9 -6.1 -9.1 -2.5 N/A State Bank of India 0.3 1.2 1.5 -9.9 -25.0 7.2

GBP : INR 0.1 1.0 -1.0 8.6 15.9 Shriram Transport Fina 0.4 -2.1 -12.2 -17.6 -18.1 -10.1 7.9

CHF : INR 0.2 1.1 -0.5 7.3 18.2 Real EstateJPY : INR 0.7 1.0 -1.0 5.0 -7.1 Phoenix Mills Ltd 0.4 -3.8 13.3 -6.6 -15.3 18.5 19.5 Orbit Corp Ltd -2.0 -1.2 5.3 -3.9 -72.4 8.2

Dollar index 0.0 -1.6 -1.6 -3.4 -1.0 Godrej Properties Ltd -0.3 -2.0 -2.7 -25.7 -33.9 -33.1 16.1 Unitech Ltd -1.6 -3.1 12.5 -2.6 -27.3 13.5

USD: AUD 0.4 2.0 3.3 4.8 -5.1 HDIL -0.8 2.6 15.4 7.0 -22.3 -57.6 4.3 DLF Ltd -1.1 6.8 15.8 -5.9 -20.0 33.5

USD: CNY -0.1 -0.2 -0.6 -0.8 -2.6USD:EURO 0.1 1.9 2.2 4.3 6.2USD:YEN -0.2 -0.9 -1.0 -1.5 22.6 Source: Bloomberg

23 October 2013 / INDIA EQUITY RESEARCH / FINANCIAL DAILY IDEAS

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KEY ECONOMIC INDICATORS Latest 1M-Ago 3M-Ago 6M-Ago 12M-Ago KEY BANKING STATISTICS Latest 1M-Ago 3M-Ago 6M-Ago 12M-Ago

Policy rates Business growthRepo,% 7.5 7.3 7.3 7.5 8.0 Credit Growth (%) yoy 14.2 13.7 13.9 16.4 17.7Reverse Repo,% 6.5 6.3 6.3 6.5 7.0 Deposit Growth (%) yoy 13.7 13.6 13.2 13.2 14.8CRR,% 4.0 4.0 4.0 4.0 4.8 CD Ratio (%) 76.2 77.1 77.4 77.6 75.9SLR,% 23.0 23.0 23.0 23.0 23.0 Certificate of deposit outstanding Rs bn 3248 3719 3321 3276 2286Daily data Commercial paper outstanding Rs bn 1037 989 1231 1273 962Call Rate, % 9.0 6.5 7.1 7.6 8.1 Deposits rates91 day T-Bill, % 8.9 10.7 7.5 7.8 8.1 1yr Deposit rate (SBI) 9.00 9.00 8.75 8.75 8.501-Yr Bond Yield, % 8.4 9.0 8.3 7.5 7.9 Lending rates5-Yr Bond Yield, % 8.5 8.7 8.3 7.7 8.2 BPLR, % (SBI) 14.8 14.8 14.8 12.310-Yr Bond Yield,% 9.0 8.8 8.2 7.8 8.4 Mortgage rate, (HDFC Floating rate) 10.5 10.5 9.5 9.3 8.8USD : INR 61.7 62.6 59.7 54.1 53.5 BASE RATE, % (SBI) 9.2 9.6 9.4 8.5 8.5EUR : INR 84.3 84.6 78.7 70.6 69.9 Gsec yield (1yr) 8.9 10.7 7.5 7.8 8.1GBP : INR 99.5 100.5 91.6 82.5 85.8 Corporate Bond Yield (1yr AAA) 8.4 9.0 8.3 7.5 7.9CHF : INR 68.3 68.6 63.6 57.9 57.8 Corporate Bond Spread -0.5 -1.6 0.8 -0.3 -0.2JPY : INR 0.6 0.6 0.6 0.5 0.7 6M LIBOR 0.4 0.4 0.4 0.4 0.6Dollar index 79.2 80.4 81.9 83.0 80.0 Sector wise credit growthEURO:USD 1.4 1.3 1.3 1.3 1.3 AGRI 15.9 12.9 21.8 24.4 8.1USD:YEN 97.9 98.9 99.4 99.5 79.9 Retail 18.4 17.3 17.2 19.1 11.4Weekly data Housing 19.9 18.5 19.1 17.4 11.2Forex Reserves, $Bn 279 275 280 294 295 Credit Card 20.1 21.9 23.7 25.7 10.7Government Borrowing, Rs Bn 3590 2870 1650 5580 3830 Personal Loan 32.2 32.8 28.4 31.4 11.2Monthly data SERVICES 9.4 11.2 11.1 13.2 15.2Inflation Commercial real estate 5.2 4.6 4.0 2.9 11.6 WPI,% 6.5 6.1 5.2 5.7 8.1 NBFC 8.5 15.8 16.5 30.3 30.9 CPI,% 10.8 10.9 10.7 12.1 10.3 Trade 26.1 24.9 27.6 25.7 15.7Index of Industrial Production,% 0.6 2.8 -2.5 0.6 2.0 INDUSTRY 14.5 13.4 16.0 17.7 19.18-core Industry,% 3.8 3.1 2.3 -2.4 6.1 Iron and steel 24.3 22.7 24.0 23.2 17.9Exports, $ Bn 27.7 26.1 23.6 30.7 24.9 Chemicals 39.5 41.5 37.3 22.0 13.6Imports, $ Bn 34.4 37.1 35.9 40.5 42.1 Textile 16.1 14.8 14.6 9.5 10.1Trade Deficit, $ bn -6.8 -10.9 -12.3 -9.8 -17.1 Food processing 21.8 14.6 17.3 25.0 19.1Quarterly data Telecom -4.0 -6.2 0.7 0.9 -6.0GDP,% 4.5 - 5.3 5.5 6.0 Power 33.3 26.5 30.4 23.5 23.0 Agriculture,% 1.1 - 1.2 2.9 4.1 Roads 17.4 14.8 17.7 19.5 25.8 Industry,% 2.3 - 1.1 0.8 0.9 Valuation (1yr forward P/ABV) Services,% 6.0 - 7.1 7.4 8.1 PSB 1.4 1.7 1.6 1.8 1.5Exports, $ Bn 73.9 - 84.8 74.2 75.0 Private 2.4 2.6 2.6 2.8 2.3Imports, $ Bn 124.4 - 130.4 132.6 118.9 Premium (Private-PSB) 1.0 0.9 1.0 1.0 0.8Trade Deficit, $ Bn -50.5 - -45.6 -58.4 -43.8 SBI 1.6 2.0 2.2 2.6 1.9Invisibles, $ Bn 28.7 - 27.5 26.6 26.8 ICICI Bank 2.0 2.0 2.3 2.3 2.1Current Account Deficit, $ Bn -21.8 - -18.2 -31.8 -17.1 AGRI 3.7 3.4 3.8 4.4 3.5Net capital flows, $ Bn 23.9 - 16.1 16.6 17.2 Source: Bloomberg


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FINANCIAL Manish Agarwalla (+9122 6667 9962 / [email protected]) Sachit Motwani, FRM (+9122 6667 9953 / [email protected])

Yes Bank (YES IN) Q2FY14 Results – One off income drives profitability Rboust other income growth of 61.2% YoY driven by MTM gains on interest rate swap and stable NII growth of 28.2% YoY enabled Yes Bank to deliver a 21.3% YoY PAT growth to Rs 3.7 bn. The treasury losses was offset by the one‐off MTM gains on the swap portfolio (Rs 30 bn of swap portfolio as on Sep’13). The bank fully provided for treasury losses of Rs 1.1 bn (not amortized it over the remaining quarters) and utlized the gains on the swap book for the same due to which Yes Bank was able to report numbers ahead of street estimates. Key highlights for Q2FY14 • NIM declined by 10 bps QoQ to 2.9% due to ~20 bps increase in cost of funds, which was partially offset by increase in loan

yields of ~10 bps as the bank increased base rates by 25 bps in Aug’13. • Business growth moderated with advances increasing by 13.6% YoY driven by moderation in the mid‐corporate segment.

Deposits growth however continued to remain healthy driven by strong savings deposits growth of 80.8% YoY. Consequently C/D ratio declined by 2.8% QoQ to 70.6%. CASA ratio stood at 20.4% (20.2% as on Q1FY14).

• Non‐interest income grew by a healthy 61.2% YoY driven by one off MTM gains on interest rate swaps which were formed as a hedge against the corporate bond portfolio. Given that thbank has added further swaps to its portfolio and interest rates have reduced, the bank will likely witness MTM losses on sawp book in the ensuing quarters which will offset the provision rversals on account of MTM treasury gains.

• Asset quality partially deteriorated with fresh slippages of Rs 1.5 bn of which 2 accounts constituted Rs 1.4 bn which were sold to ARCIL and the bank realized security receipts of ~ Rs 0.9 bn.

Valuation & Outlook Yes Bank currently trades at 1.9x FY14E Adj BV. Yes Bank will be a key beneficiary of MSF rate cut (which we expect in the fortyhcoming RBI policy) and consequently a flatter yield curve. While business growth moderation may continue, we expect NIMs to sustain at ~2.9% over FY14E. We have a positive outlook on Yes Bank. Result Update (Rs mn) Q2FY14 Q2FY13 yoy growth

Interest earned 25,013 19,864 25.9

Interest expended 18,292 14,622 25.1

Net interest income 6,721 5,242 28.2

Net interest margins 2.74 2.90 ‐0.16

Total Income 11,182 8,009 39.6

Total operating expenses 4,053 3,162 28.2

Payroll costs 1,853 1,642 12.9

Others 2,200 1,520 44.8

Pre‐provision Profit 7,129 4,847 47.1

Provisions & Contingencies 1791 317 464.5

% Operating income 25.1 6.5

PBT 5,338 4,530 17.8

Provision for Taxes 1,626 1,469 10.7

% of PBT 30.5 32.4

Net Profit 3711 3061 21.3

Equity 3,604 3,561 1.2

EPS, Rs 10.3 8.6 19.8

Advances 477172 420193 13.6

Deposits 675,751 522,908 29.2

Advances / Deposits (%) 71 80 ‐9.7


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Gross NPAs 1320.7 1028.4 28.4

Gross NPAs (%) 0.3 0.2 0.0

Net NPAs 193.6 201.3 ‐3.8

Net NPAs (%) 0.0 0.1 0.0

CAR – Total 15.6 17.5 ‐1.9

Result Calendar Banks/NBFCs Result Dates L&T Finance Holdings 23rd Oct 2013 ‐ Q2FY14 Results SKS Microfinance 23rd Oct 2013 ‐ Q2FY14 Results Kotak Mahindra Bank 24th Oct 2013 ‐ Q2FY14 Results ICICI Bank 25th Oct 2013 ‐ Q2FY14 Results IDBI Bank 25th Oct 2013 ‐ Q2FY14 Results IOB 25th Oct 2013 ‐ Q2FY14 Results Repco Home Finance 25th Oct 2013 ‐ Q2FY14 Results Shriram City Union Finance 26th Oct 2013 ‐ Q2FY14 Results Syndicate Bank 28th Oct 2013 ‐ Q2FY14 Results Cholamandalam Investment & Finance 29th Oct 2013 ‐ Q2FY14 Results Shriram Transport Finance 29th Oct 2013 ‐ Q2FY14 Results Bank of Maharashtra 29th Oct 2013 ‐ Q2FY14 Results State Bank of Bikaner & Jaipur 29th Oct 2013 ‐ Q2FY14 Results GIC Housing Finance 30th Oct 2013 ‐ Q2FY14 Results LIC Housing Finance 30th Oct 2013 ‐ Q2FY14 Results OBC 30th Oct 2013 ‐ Q2FY14 Results Allahabad Bank 31st Oct 2013 ‐ Q2FY14 Results BOB 31st Oct 2013 ‐ Q2FY14 Results IDFC 31st Oct 2013 ‐ Q2FY14 Results Magma Fincorp 31st Oct 2013 ‐ Q2FY14 Results Muthoot Finance 31st Oct 2013 ‐ Q2FY14 Results Union Bank of India 31st Oct 2013 ‐ Q2FY14 Results Karur Vysya Bank 13th Nov 2013 ‐ Q2FY14 Results


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Economic Calendar Date Time Event Survey ECO IN Prior Revised

10/23/2013 04:30 AU Conf. Board Leading Index MoM Aug ‐‐ ‐0.20% 0.30% 0.20%

10/23/2013 05:30 AU DEWR Skilled Vacancies MoM Sep ‐‐ 0.50% 0.30% 0.60%

10/23/2013 06:00 AU CPI QoQ 3Q 0.80% 1.20% 0.40% ‐‐

10/23/2013 06:00 AU CPI YoY 3Q 1.80% 2.20% 2.40% ‐‐

10/23/2013 06:00 AU CPI Trimmed Mean QoQ 3Q 0.60% 0.70% 0.50% 0.60%

10/23/2013 06:00 AU CPI Trimmed Mean YoY 3Q 2.10% 2.30% 2.20% 2.30%

10/23/2013 06:00 AU CPI Weighted Median QoQ 3Q 0.60% 0.60% 0.70% 0.60%

10/23/2013 06:00 AU CPI Weighted Median YoY 3Q 2.30% 2.30% 2.60% 2.50%

10/23/2013 07:15 CH MNI October Business Indicator

10/23/2013 07:30 CH Bloomberg Oct. China Economic Survey (Table)

10/23/2013 14:00 UK Bank of England Releases Monetary Policy Committee Minutes

10/23/2013 14:00 UK BBA Loans for House Purchase Sep 39500 ‐‐ 38228 ‐‐

10/23/2013 16:30 US MBA Mortgage Applications 18‐Oct ‐‐ ‐‐ 0.30% ‐‐

10/23/2013 18:00 US Import Price Index MoM Sep 0.20% ‐‐ 0.00% ‐‐

10/23/2013 18:00 US Import Price Index YoY Sep ‐1.00% ‐‐ ‐0.40% ‐‐

10/23/2013 18:30 US House Price Index MoM Aug 0.80% ‐‐ 1.00% ‐‐

10/23/2013 10/26 US Leading Index Sep 0.60% ‐‐ 0.70% ‐‐

10/24/2013 05:20 JN Japan Buying Foreign Bonds 18‐Oct ‐‐ ‐‐ ¥380.7B ‐‐

10/24/2013 05:20 JN Japan Buying Foreign Stocks 18‐Oct ‐‐ ‐‐ ¥116.4B ‐‐

10/24/2013 05:20 JN Foreign Buying Japan Bonds 18‐Oct ‐‐ ‐‐ ‐¥186.5B ‐‐

10/24/2013 05:20 JN Foreign Buying Japan Stocks 18‐Oct ‐‐ ‐‐ ¥143.6B ‐‐

10/24/2013 07:15 CH HSBC/Markit Flash Mfg PMI Oct 50.4 ‐‐ 50.2 ‐‐

10/24/2013 13:00 GE PMI Manufacturing Oct A 51.4 ‐‐ 51.1 ‐‐

10/24/2013 13:00 GE PMI Services Oct A 53.7 ‐‐ 53.7 ‐‐

10/24/2013 15:30 UK CBI Trends Total Orders Oct 10 ‐‐ 9 ‐‐

10/24/2013 15:30 UK CBI Trends Selling Prices Oct 4 ‐‐ 3 ‐‐

10/24/2013 15:30 UK CBI Business Optimism Oct 17 ‐‐ 7 ‐‐

10/24/2013 18:00 US Trade Balance Aug ‐$39.5B ‐‐ ‐$39.1B ‐‐

10/24/2013 18:00 US Initial Jobless Claims 19‐Oct 340K ‐‐ 358K ‐‐

10/24/2013 18:00 US Continuing Claims 12‐Oct 2870K ‐‐ 2859K ‐‐

10/24/2013 18:28 US Markit US PMI Preliminary Oct 52.5 ‐‐ ‐‐ ‐‐

10/24/2013 19:15 US Bloomberg Consumer Comfort 20‐Oct ‐‐ ‐‐ ‐34.1 ‐‐

10/24/2013 19:30 US JOLTs Job Openings Aug 3765 ‐‐ 3689 ‐‐

10/24/2013 20:30 US Kansas City Fed Manf. Activity Oct 2 ‐‐ 2 ‐‐

10/24/2013 JN Cabinet Office Monthly Economic Report for October

23 October 2013 / INDIA EQUITY RESEARCH / DAILY IDEAS

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List of Conference Calls and Analyst Meets Company Date Time Dial‐in/ Venue

Ing Vysya Bank 23rd October 2013 (Wednesday) 11:00AM 022‐66290302, 30650102 Zensar Tech 23rd October 2013 (Wednesday) 12:00PM 022‐66290319, 30650119 Kpit 23rd October 2013 (Wednesday) 4:00PM 022‐66295850, 30652503 Dish Tv 23rd October 2013 (Wednesday) 4:00PM 022‐40392848, 66294444 Firstsource Solutions 24th October 2013 (Thursday) 12:00PM 022‐66290335, 30650124 Skf 24th October 2013 (Thursday) 1:30PM 022‐66295805, 30652572 Eclerx 24th October 2013 (Thursday) 5:00PM 022‐66290376, 30650151 Kotak Mahindra Bank 24th October 2013 (Thursday) 5:30PM 022‐66290318, 30650118 Biocon 25th October 2013 (Friday) 3:30PM 022‐66295889, 30652542 Alembic Pharma 25th October 2013 (Friday) 4:30PM 022‐66290302, 30650102 Icici Bank 25th October 2013 (Friday) 5:00PM 022‐66290396, 30650180, 18002001221 (Playback No: 30651212, Id: 12257)Mastek 25th October 2013 (Friday) 5:00PM 022‐66290334, 30650123 Kirloskar Brothers 28th October 2013 (Monday) 3:30PM Shoppers Stop 28th October 2013 (Monday) 4:30PM 022‐66290355, 30650135 Dabur 28th October 2013 (Monday) 4:30PM 022‐66290317, 30650117 Bharti 30th October 2013 (Wednesday) 2:30PM 022‐44449999 (PassCode:A0001GXT)

23 October 2013 / INDIA EQUITY RESEARCH / DAILY IDEAS

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Management Vineet Bhatnagar (Managing Director) (91 22) 2300 2999 Jignesh Shah (Head – Equity Derivatives) (91 22) 6667 9735

Research utomobiles Deepak Jain (9122) 6667 9758 Banking, NBFCs Manish Agarwalla (9122) 6667 9962 Sachit Motwani, CFA, FRM (9122) 6667 9953 Consumer, Media, Telecom Naveen Kulkarni, CFA, FRM (9122) 6667 9947 Ennette Fernandes (9122) 6667 9764 Vivekanand Subbaraman (9122) 6667 9766 Cement Vaibhav Agarwal (9122) 6667 9967 Economics Anjali Verma (9122) 6667 9969

Engineering, Capital Goods Ankur Sharma (9122) 6667 9759 Infrastructure & IT Services Vibhor Singhal (9122) 6667 9949 Varun Vijayan (9122) 6667 9992 Metals Dhawal Doshi (9122) 6667 9769 Dharmesh Shah (9122) 6667 9974 Mid‐caps Kapil Bagaria (9122) 6667 9965 Oil&Gas, Agri Inputs Gauri Anand (9122) 6667 9943 Saurabh Rathi (9122) 6667 9951

Pharma Surya Patra (9122) 6667 9768 Retail, Real Estate Abhishek Ranganathan, CFA (9122) 6667 9952 Neha Garg (9122) 6667 9996 Quant Shikha Khurana (9122) 6667 9948 Sr. Manager – Equities Support Rosie Ferns (9122) 6667 9971

Sales & Distribution Kinshuk Tiwari (9122) 6667 9946 Ashvin Patil (9122) 6667 9991 Shubhangi Agrawal (9122) 6667 9964 Kishor Binwal (9122) 6667 9989 Sidharth Agrawal (9122) 6667 9934 Dipesh Sohani (9122) 6667 9756

Dilesh Doshi (Sales Trader) (9122) 6667 9747 Suniil Pandit (Sales Trader) (9122) 6667 9745 Rajesh Ashar (Sales Trader) (9122) 6667 9748

Mayur Shah (Execution) (9122) 6667 9945

Contact Information (Regional Member Companies)

SINGAPORE

Phillip Securities Pte Ltd 250 North Bridge Road, #06‐00 Raffles City Tower,

Singapore 179101 Tel : (65) 6533 6001 Fax: (65) 6535 3834

www.phillip.com.sg

MALAYSIA Phillip Capital Management Sdn Bhd B‐3‐6 Block B Level 3, Megan Avenue II,

No. 12, Jalan Yap Kwan Seng, 50450 Kuala Lumpur Tel (60) 3 2162 8841 Fax (60) 3 2166 5099

www.poems.com.my

HONG KONG Phillip Securities (HK) Ltd

11/F United Centre 95 Queensway Hong Kong Tel (852) 2277 6600 Fax: (852) 2868 5307

www.phillip.com.hk

JAPAN Phillip Securities Japan, Ltd

4‐2 Nihonbashi Kabutocho, Chuo‐ku Tokyo 103‐0026

Tel: (81) 3 3666 2101 Fax: (81) 3 3664 0141 www.phillip.co.jp

INDONESIA PT Phillip Securities Indonesia

ANZ Tower Level 23B, Jl Jend Sudirman Kav 33A, Jakarta 10220, Indonesia

Tel (62) 21 5790 0800 Fax: (62) 21 5790 0809 www.phillip.co.id

CHINA Phillip Financial Advisory (Shanghai) Co. Ltd.

No 550 Yan An East Road, Ocean Tower Unit 2318 Shanghai 200 001

Tel (86) 21 5169 9200 Fax: (86) 21 6351 2940 www.phillip.com.cn

THAILAND Phillip Securities (Thailand) Public Co. Ltd.

15th Floor, Vorawat Building, 849 Silom Road, Silom, Bangrak, Bangkok 10500 Thailand

Tel (66) 2 2268 0999 Fax: (66) 2 2268 0921 www.phillip.co.th

FRANCE King & Shaxson Capital Ltd.

3rd Floor, 35 Rue de la Bienfaisance 75008 Paris France

Tel (33) 1 4563 3100 Fax : (33) 1 4563 6017 www.kingandshaxson.com

UNITED KINGDOM King & Shaxson Ltd.

6th Floor, Candlewick House, 120 Cannon Street London, EC4N 6AS

Tel (44) 20 7929 5300 Fax: (44) 20 7283 6835 www.kingandshaxson.com

UNITED STATES Phillip Futures Inc.

141 W Jackson Blvd Ste 3050 The Chicago Board of Trade Building

Chicago, IL 60604 USA Tel (1) 312 356 9000 Fax: (1) 312 356 9005

AUSTRALIA PhillipCapital Australia

Level 37, 530 Collins Street Melbourne, Victoria 3000, Australia

Tel: (61) 3 9629 8380 Fax: (61) 3 9614 8309 www.phillipcapital.com.au

SRI LANKA Asha Phillip Securities Limited

Level 4, Millennium House, 46/58 Navam Mawatha, Colombo 2, Sri Lanka

Tel: (94) 11 2429 100 Fax: (94) 11 2429 199 www.ashaphillip.net/home.htm

INDIA PhillipCapital (India) Private Limited

No. 1, C‐Block, 2nd Floor, Modern Center , Jacob Circle, K. K. Marg, Mahalaxmi Mumbai 400011 Tel: (9122) 2300 2999 Fax: (9122) 6667 9955 www.phillipcapital.in


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Disclosures and Disclaimers PhillipCapital (India) Pvt. Ltd. has three independent equity research groups: Institutional Equities, Institutional Equity Derivatives and Private Client Group. This report has been prepared by Institutional Equities Group. The views and opinions expressed in this document may or may not match or may be contrary at times with the views, estimates, rating, target price of the other equity research groups of PhillipCapital (India) Pvt. Ltd. This report is issued by PhillipCapital (India) Pvt. Ltd. which is regulated by SEBI. PhillipCapital (India) Pvt. Ltd. is a subsidiary of Phillip (Mauritius) Pvt. Ltd. References to "PCIPL" in this report shall mean PhillipCapital (India) Pvt. Ltd unless otherwise stated. This report is prepared and distributed by PCIPL for information purposes only and neither the information contained herein nor any opinion expressed should be construed or deemed to be construed as solicitation or as offering advice for the purposes of the purchase or sale of any security, investment or derivatives. The information and opinions contained in the Report were considered by PCIPL to be valid when published. The report also contains information provided to PCIPL by third parties. The source of such information will usually be disclosed in the report. Whilst PCIPL has taken all reasonable steps to ensure that this information is correct, PCIPL does not offer any warranty as to the accuracy or completeness of such information. Any person placing reliance on the report to undertake trading does so entirely at his or her own risk and PCIPL does not accept any liability as a result. Securities and Derivatives markets may be subject to rapid and unexpected price movements and past performance is not necessarily an indication to future performance. This report does not have regard to the specific investment objectives, financial situation and the particular needs of any specific person who may receive this report. Investors must undertake independent analysis with their own legal, tax and financial advisors and reach their own regarding the appropriateness of investing in any securities or investment strategies discussed or recommended in this report and should understand that statements regarding future prospects may not be realized. In no circumstances it be used or considered as an offer to sell or a solicitation of any offer to buy or sell the Securities mentioned in it. The information contained in the research reports may have been taken from trade and statistical services and other sources, which we believe are reliable. PhillipCapital (India) Pvt. Ltd. or any of its group/associate/affiliate companies do not guarantee that such information is accurate or complete and it should not be relied upon as such. Any opinions expressed reflect judgments at this date and are subject to change without notice Important: These disclosures and disclaimers must be read in conjunction with the research report of which it forms part. Receipt and use of the research report is subject to all aspects of these disclosures and disclaimers. Additional information about the issuers and securities discussed in this research report is available on request. Certifications: The research analyst(s) who prepared this research report hereby certifies that the views expressed in this research report accurately reflect the research analyst’s personal views about all of the subject issuers and/or securities, that the analyst have no known conflict of interest and no part of the research analyst’s compensation was, is or will be, directly or indirectly, related to the specific views or recommendations contained in this research report. The Research Analyst certifies that he /she or his / her family members does not own the stock(s) covered in this research report. Independence: PhillipCapital (India) Pvt. Ltd. has not had an investment banking relationship with, and has not received any compensation for investment banking services from, the subject issuers in the past twelve (12) months, and PhillipCapital (India) Pvt. Ltd does not anticipate receiving or intend to seek compensation for investment banking services from the subject issuers in the next three (3) months. PhillipCapital (India) Pvt. Ltd is not a market maker in the securities mentioned in this research report, although it or its affiliates may hold either long or short positions in such securities. PhillipCapital (India) Pvt. Ltd does not hold more than 1% of the shares of the company(ies) covered in this report. Suitability and Risks: This research report is for informational purposes only and is not tailored to the specific investment objectives, financial situation or particular requirements of any individual recipient hereof. Certain securities may give rise to substantial risks and may not be suitable for certain investors. Each investor must make its own determination as to the appropriateness of any securities referred to in this research report based upon the legal, tax and accounting considerations applicable to such investor and its own investment objectives or strategy, its financial situation and its investing experience. The value of any security may be positively or adversely affected by changes in foreign exchange or interest rates, as well as by other financial, economic or political factors. Past performance is not necessarily indicative of future performance or results. Sources, Completeness and Accuracy: The material herein is based upon information obtained from sources that PCIPL and the research analyst believe to be reliable, but neither PCIPL nor the research analyst represents or guarantees that the information contained herein is accurate or complete and it should not be relied upon as such. Opinions expressed herein are current opinions as of the date appearing on this material and are subject to change without notice. Furthermore, PCIPL is under no obligation to update or keep the information current. Copyright: The copyright in this research report belongs exclusively to PCIPL. All rights are reserved. Any unauthorized use or disclosure is prohibited. No reprinting or reproduction, in whole or in part, is permitted without the PCIPL’s prior consent, except that a recipient may reprint it for internal circulation only and only if it is reprinted in its entirety. Caution: Risk of loss in trading in can be substantial. You should carefully consider whether trading is appropriate for you in light of your experience, objectives, financial resources and other relevant circumstances. For U.S. persons only: This research report is a product of PhillipCapital (India) Pvt Ltd. which is the employer of the research analyst(s) who has prepared the research report. The research analyst(s) preparing the research report is/are resident outside the United States (U.S.) and are not associated persons of any U.S. regulated broker‐dealer and therefore the analyst(s) is/are not subject to supervision by a U.S. broker‐dealer, and is/are not required to satisfy the regulatory licensing requirements of FINRA or required to otherwise comply with U.S. rules or regulations regarding, among other things, communications with a subject company, public appearances and trading securities held by a research analyst account. This report is intended for distribution by PhillipCapital (India) Pvt Ltd. only to "Major Institutional Investors" as defined by Rule 15a‐6(b)(4) of the U.S. Securities andExchange Act, 1934 (the Exchange Act) and interpretations thereof by U.S. Securities and Exchange Commission (SEC) in reliance on Rule 15a 6(a)(2). If the recipient of this report is not a Major Institutional Investor as specified above, then it should not act upon this report and return the same to the sender. Further, this report may not be copied, duplicated and/or transmitted onward to any U.S. person, which is not the Major Institutional Investor. In reliance on the exemption from registration provided by Rule 15a‐6 of the Exchange Act and interpretations thereof by the SEC in order to conduct certain business with Major Institutional Investors, PhillipCapital (India) Pvt Ltd. has entered into an agreement with a U.S. registered broker‐dealer, Marco Polo Securities Inc. ("Marco Polo").Transactions in securities discussed in this research report should be effected through Marco Polo or another U.S. registered broker dealer PhillipCapital (India) Pvt. Ltd. Registered office: 2nd Floor, C‐Block, Modern Centre, Mahalaxmi, Mumbai – 400011

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