RETAIL RESEARCH 29 August 2018

Q1FY19 Results Review

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The quarter gone by:

The Q1FY19 earnings season has been positive across most sectors. Domestic sectors such as consumer, capital goods and media did well, partly due to a low GST transition base, but the quarter had negative surprises from automobiles, cement, and power and telecom companies.

Capital goods firms like BEL, ABB and L&T reported better-than-expected numbers this quarter. Bajaj Finance, Cholamandalam Finance and PNB Housing within NBFCs impressed the Street. Within large cap IT stocks, TCS and L&T Infotech, and Mindtree in the midcap space reported good numbers. FMCG companies like Dabur, Jubilant Foodworks and HUL delivered good results on the back of strong volume growth, albeit on a low base. Corporate banks reported weak numbers on the back of higher provisioning charges.

Corporate earnings growth(for BSE 200 companies) improved considerably in Q1FY19, with aggregate profits (ex-financials) increasing ~27% YoY. Also, sales growth was at a nine-quarter high of ~21% YoY in Q1. However, the bulk of the surge was driven by a jump in the earnings in the commodity sector, and a low base of Q1FY18. Aggregate PAT grew only ~6% YoY in Q1FY19, but mainly owing to losses reported by PSU banks. PAT growth of over 55% YoY in the commodity sector has largely propelled the surge in the overall PAT growth. Ex-commodity and financial sectors, PAT growth has decelerated to ~11% YoY from ~19% YoY in Q4FY18.

Sales growth has clearly gained momentum over the last couple of quarters. Aggregate (ex-financials) sales growth sharply accelerated to ~21% YoY in Q1FY19 from ~14% YoY in Q4FY18. This is the strongest sales growth in nine quarters. While commodity companies (in the Energy and Metals & Mining sectors) have been the key drivers of this upturn, ex-commodity companies’ sales growth was significantly weaker, at ~12% YoY (albeit the highest since Q1FY17).

Aggregate EBITDA growth has jumped to ~29% YoY from ~23% YoYin the last quarter. However, this improvement is largely driven by the commodity sector, which garnered EBITDA growth of more than 60% YoY in Q1FY19.Excluding commodity companies, aggregate EBITDA growth has, in fact, slightly decelerated to ~11% YoY in Q1FY19 from ~12% YoY in Q4FY18.

Among the NSE Nifty 50 companies, thirty-eight of the 50 Nifty companies either beat or met analysts’ earnings estimates, according to Bloomberg. That’s the highest in three quarters. If not for the loss by State Bank of India, Nifty 50 would have met the consensus forecast that the index eventually missed by 7%, according to BloombergQuint’s calculations.

State-run banks together posted a total recovery of Rs 36,551 crore in the first quarter of 2018-19, nearly half of figure for 2017-18. Further, on a quarter-on-quarter basis, operating profits of banks rose 11.5% and losses fell 73.5%.

Interest rates in India have been on the rise in the last couple of quarters, as surplus banking system liquidity of demonetisation has steadily dried up, and the RBI has raised policy rates twice in its effort to contain inflation.

In the April-June quarter, the Sensex gained 6.5%. However, the BSE small- and midcap indices fell 7.8%and 4.5%respectively. New guidelines on additional surveillance measures (ASM) added to the woes of the mid- and small cap segments in April-June, as the deadline for MFs to reorganise themselves was June end.

According to a report released by CARE Ratings, the performance of 3,292 companies in Q1FY19 vis-à-vis the previous year (Q1FY18) reveals an improvement, with net sales registering double-digit growth during the quarter, as compared to the Q1FY18 performance. Also, after declining by 10.8% YoYin Q1FY18, net profits witnessed double-digit growth of about 12.9% YoYin Q1FY19. Net profit margin witnessed a marginal contraction of about 30 basis points YoYduring the quarter.

The numbers reflect the theme of a recovering economy, key to generating jobs and raising incomes ahead of the general election scheduled for next year. The behaviour of the monsoon will be critical to the rural economy’s wellbeing, and the prospects of consumer goods companies going forward. The monsoon has been deficient so far, but has revived selectively in the past few weeks, leading to floods in Kerala.

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Sectoral comment:

Agrochem/Fertilisers

Topline growth was driven by a low base last year owing to destocking before the implementation of GST and healthy channel replacement due on the expectations of a normal monsoon.

Teething problems in Direct Benefit Transfer (DBT) led to an increase in working capital requirements and interest cost for the sector, companies would be eyeing quick liquidation of fertilizers to claim subsidies under the DBT regime.

Industry’s inability to fully pass on the increase in the price of raw materials due to resistance from trade channels led to pressure on gross margins for both agrochemical and fertilizer companies.Theposition of global channel inventory has improved as compared to previous quarters, and raw material prices have stabilised in China, which augurs well for the sector.

Companies with lower backward integration like ShardaCrop and DhanukaAgritech have been impacted, while continued weakness in global agrochemicals has continued to impact PI Industries.

Despite erratic monsoon distribution in key operating markets, capacity utilisation, operational and sourcing efficiencies and customer connect initiatives supported the revenues of fertilizer players. Further, with normal south-west monsoons, improved reservoir levels and a recent pick-up in crop sowing are expected to augment agriculture growth, coupled with higher crop support price.

The recently-announced GST rate reduction on fertilizer-grade phosphoric acid from 12% to 5% is likely to bring down the company’s GST credit accumulation, and improve the working capital situation.

Automobiles/Auto Ancilliaries

The automobile OEM space witnessed a mixed set of numbers in Q1FY19, as input costs put pressure on the operating performance of most companies. Revenue growth was driven by higher volumes, albeit on a low base on account of GST destocking and transition from BS III to BS IV. Raw material cost increased due to a surge in crude prices and rupee depreciation.

Total automobiles industry witnessed a sharp double-digit sales value growth of 18.6% in Q1FY19 vis-à-vis a growth of 4.3% during the same period year. In line with sales, IIP during Q1FY19 also registered a sharp 21.8% growth in the manufacture of motor vehicles, trailers and semi-trailers.

Most of the OEMs have been trying to pass-through the impact of higher cost inflation by taking price increases, though with a lag. Although CV makers were able to pass on these costs, 2W makers suffered due to competitive pricing. Tractor makers too had a strong quarter, led by buoyancy in rural income. While most OEMs indicated partial pass-through of higher RM costs, further price hikes are likely to follow in Q2FY19 to cover incremental costs.

Battery firms reported mixed results, as Exide posted decent numbers while Amara Raja was impacted owing to higher-than-expected RM cost. Tyre companies were impacted over the sequential quarter, owing to a ~2- 5% QoQ increase in crude-based inputs during the quarter.

Automobile consumption, both rural and urban, remains healthy. Favourable progress of the monsoon and expectations of this continuing with a satisfactory temporal and spatial distribution, combined with the recently-approved higher MSP for kharif crops should help support rural consumption further

Revision in axle load remains a major overhang for the CV segment. Pre-buying before BS-VI implementation and scrappageare likely to provide strong tailwinds. While margin pressure for companies is expected to continue over the near term, growth drivers like normal monsoon, infrastructure activities and strong rural demand provide optimism for robust volume growth to prevail over the current fiscal.

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Aviation

Domestic passenger demand growth continued to remain strong at 20% YoY in Q1FY19 vs. 16%-24% YoY during Q1FY18-Q4FY18. However, margins remained under pressure on account of rising fuel prices and depreciation of the Rupee.

Cumulative PLF of domestic carriers was at a historical high at 90% vs 89% in Q4FY18 and 87% in Q1FY18, with new domestic routes generating additional demand.

India’s aviation industry is expected to witness +20% demand CAGR during FY18-22E, due to accommodative Government policy, implying utilisation and yields improvement would continue. The addition of new routes connecting Tier-2 and Tier-3 cities would be growth drivers, and support overall domestic demand growth in the future.

The Government’s regional connectivity scheme ‘UDAN’ intends to make flying affordable and convenient, and targets increasing its domestic passenger count by 30 crby 2022 and 50crby 2027.

However, the financial health of aviation companies needs close monitoring, given the high ATF prices, inability to pass on these due to competitive pressure and the frequent grounding of aircrafts.

Banks & Financials

Collective losses of PSU banks in Q1FY19 have increased over 50 times (Rs16,600crvs 307cr) against the corresponding period last year, on the back of increased provisioning for NPAs. Lower trading income and an uptick in mark-to-market losses due to hardening of bond yields further weighed on their bottomlines.

Net slippages moderated in Q1FY19, mainly driven by recoveries from the resolution of NCLT-related accounts, while the operating performance was mainly hit by tepid treasury income, and gratuity provisions.

Gross NPAs have exceeded Rs 8.5 lakh crore, up 19% YoY, while total provision for NPAs jumped 28% (YoY) to Rs 51,500 crore.

Most PSU banks reported better-than-expected NII growth, on interest recognition from NCLT cases.

Pressure on NIMs was felt by most BFSI companies in the sector, especially byprivate banks (flat NIMs QoQ) and NBFCs, as rise in yield has been lagging and cost of funds increasing.

Banks undertook treasury losses/MTM provisions on investments, impacting other income, and led to higher provisioning. Barring a few, all banks took MTM provisions upfront.

There has been a gradual up-move in credit demand. Retail credit still grows at a high pace, especially for private lenders. Big-ticket projects are getting resolved via the NCLT route in the stipulated time. Private banks posted a much higher pace of expansion in their credit booksvis-à-vis state-owned banks. Systemic loan growth of 12% was one of the highest in three years, mainly driven by retail loans, as capex recovery appears to be a few quarters away.

On the slippages front, respite has been lower from the corporate segment, as most banks underwent a clean-up operation in Q4FY18 on dispensation ending, and hence higher slippage proportion was from the SME/Agrisegments. Fresh NPL accretion in the private power sector is a key trigger to watch out for in FY19. Recovery rates in NCLT List I cases will decide the extent of provision write-back and interest accrual for FY19.

NBFCs have faced the brunt of liquidity tightening and the rise in interest rates, which has adversely impacted their NIMs. The firms borrowed heavily from banks this quarter, as is evident from the sector-wise credit offtake data.

Asset quality trends were mixed among private sector banks. While overall stress in PSU banks remained at elevated levels,amajority of the slippages came from the disclosed watch-list/vulnerable pool.

Most CV financers reported good numbers, ggiven the multiple drivers like increased activity in the mining and infrastructure sectors, good monsoons and steady freight rates. The near-term hiccups like higher diesel prices and the possibility of axle load relaxation now being extended to the existing CV stock will at best have a temporary impact on CV sales.

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Large housing finance companies like HDFC and DHFL reported strong performance, despite the difficult backdrop of demonetisation, RERA and competition from banks. Regional housing finance companies like Gruh and Repco reported lacklustre growth.

Building products

The materials used for building (mainly tiles, plywood, MDF, and sanitaryware) continued to reel under the impact of subdued demand, increasing input cost, and weak surveillance under the E-way bill. Ceramics tile companies were worst hit by a weak demand scenario.

The industry witnessed slower off-take from the user industry, along with issues related to GST implementation (tax rate on tiles under GST increased to 28% vis-à-vis 12-14.5% rates earlier; this rate was revised to 18% later).

Tile companies (except Somany Ceramics, which benefited from a low base led by SAP implementation) posted single-digit revenue growth, under fire from price pressure in the GVT (Glazed Vitrified Tiles) segment, as volumes rose at a fast clip. Furthermore, acute pressure on pricing and greater input cost adversely affected margins across the tile industry. This dragged aggregate EBITDA margin down by 160bps, and profit by 16%.

Unorganised players continued to pose stiff competition to the organised players, more so in the tiles industry, contrary to the perception of demand moving to organised players post GST.

Revenue growth in the wood panel category was restricted by the fall in average realisation in the MDF (due to stiff competition) and plywood segments (due to the shift towards mid-end plywood). While lower raw material prices lifted margins in the plywood segment, the MDF segment suffered from stiff price competition that eroded industry margins.

Capital Goods /Engineering

Revenue growth for capital goods companies improved from low double-digits to mid-teens in Q1YF19, backed by healthy and timely execution trends across all EPC companies.

Order inflow has picked up across companies, largely driven by Government capex in sectors like railways, renewable and power T&D. Private capex still muted, though greenshoots are visible in sectors like cement, steel, food & beverages, etc. Management commentary in terms of ordering outlook has been cautiously optimistic, given the green shoots in terms of capex revival being witnessed in industrial segments like steel, cement and oil & gas. Overseas inquiries have also increased, as oil prices recover in the Middle East, Africa and South East Asia.

Operating profit improved, supported by better operating leverage, cost-rationalisation measures, and a better revenue mix.

Going forward, demand is expected to pick up in sectors like cement (waste heat recovery plants), fertilisers (revival of four old plants by the Government), metals (capacity addition by key players such as Tata Steel and JSW Steel), and food processing (a priority sector for the Indian Government). Mandatory installation of emission control equipment like flue gas de-sulphurisation (FGD), selective catalytic reduction (SCR) and electrostatic precipitators (ESP) systems in thermal power plants will also drive demand.

Overall capex continues to be driven by the Government / public sector, with the private sector practically absent. While an increase in enquiry levels by several companies was witnessed, the same it yet to translate into meaningful orders and revenue. Private sector spending is sparse, and limited to efficiency-related spending. Select areas wherein spending remains unchanged include power T&D, renewables, roads, railways, metros and defense.

Cement

As per the IIP, cement production increased by over 14% during Q1FY19 (on a negative base of 3% in Q1 last year). This growth in IIP could majorly be on account of inventory restocking by players. Rural markets have shown some traction in cement demand.

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Volume growth remained quite robust across the board, with most of the industry majors indicating a sustainable pickup in demand growth, driven by a growth in the affordable and rural housing segments, as well as the infra segment.

Pricing power of the industry, however, has been a growing concern in the absence of major demand uptick in the trade segment, and expected commissioning of new capacities. Capacity utilisations are inching higher in all regions. Capacity utilisations in the northern and central regions have crossed the 90% mark.

While most firms report a QoQ and YoY increase in costs due to a rise in coal, petcoke and diesel prices, cost inflation was higher for North India-based firms due to the ban on petcoke use in captive power plants.

While central and western market realisations have improved, eastern markets remained steady. Northern and southern markets continue to be volatile.

Led by robust Govt. spending on infrastructure development and affordable housing, demand could grow at 9-10% in FY19e. However, the benefit of strong demand would be negated by overcapacity (impacting the pricing power) in select pockets, along with high energy and transportation costs.

Construction

At an aggregate level, the infrastructure sector has posted mid-to-high double-digit growth in sales/EBITDA. All companies have a stellar order backlog. Despite marginal progress on ground, many companies have aired robust revenue growth guidance.

Government is the key driver of infrastructure spending, as private sector capex continues to remain weak. As anticipated, segments like roads, water, urban development and housing have been witnessing traction in order-awarding activity, which is expected to aggravate further in H2FY19.

Most road projects were bagged at the fag-end of Q4FY18. Consumer Discretionary/Durables

The consumer electrical sector witnessed demand recovery on a low base due to GST as well as cost rationalisation. However, air conditioner and air cooler companies suffered due to unseasonal rain in North India during the quarter.

Management commentary was optimistic with respect to the mid-long-term demand. Pre-election Government spends, wage revision of Government employees, and normal monsoon should drive consumption from Q3FY19 onwards. However, near-term headwinds due to an increase in commodity prices and rupee depreciation may weigh on profitability for the next few quarters.

On the other hand, players in the white goods segment performed better (17% volume growth for Whirlpool), and are expected to benefit from the GST rate cut to 18% from 28% earlier.

Paint companies registered strong revenue growth, aided by healthy volumes in the decorative segment. Volume growth in the decorative segment has remained in the range of 12-16% this quarter. Paint-makers introduced price hikes in the quarter in the range of 1.5-3.0% in a bid to offset the inflation in input costs.

Effective 27-Jul-18, the GST council slashed tax rates on paints from 28% to 18%. All paint companies unanimously decided to pass on the full benefit of the GST rate cut to their customers with immediate effect. This would help trigger volume growth in the sector from the second quarter onwards.

Consumer staples

The sector witnessed recovery in volume growth during the quarter, partly on the back of a lower base in the pre-GST quarter of de-stocking. Rural demand continued to outshine urban demand for the 3rd quarter for most companies.

Companies expect the growth in rural demand to accelerate, going ahead, led by increased Government spending. A majority of companies witnessed an improvement in profitability, led by cost-reduction initiatives.

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Information Technology

Revenue growth continued its upward trajectory for the third consecutive quarter, after being in a downward spiral for the last two years. Aggregate constant currency organic revenue for Tier-I companies grew by 7.3% YoY versus 6.3% in the previous quarter.

Q1 saw some benefits of Rupee depreciation, which partly offset pressure from wage hikes. Despite a steep comeback in headcount growth, continued efficiency improvement kept supporting margins.

BFSI and US retail were positive, with strong deal wins being reported by most players for these key verticals. TCS management continued to be confident about double-digit growth. Digital continues to remain the key growth driver, and now accounts for 20- 27% of total revenues for Tier 1 Indian IT vendors.

Several Tier-II companies (KPIT, Mindtree, Mphasis, Cyient, NITEC, Zensar and L&T Infotech) have been able to show a relatively stronger performance on USD revenue growth for the quarter. The trend continued for many from FY18, taking growth to the high teens, and even the 20s for some.

Management commentaries by IT companies clearly suggest much better times ahead for IT services. Digital sustained its robust momentum trajectory and is likely to continue to do so, as it moves from testing and proof of the concept stages to enterprise-wide implementation.

Metals

Steel volume growth was strong YoY, aided by an improvement in demand. Blended steel realisations improved 16-27% YoY across companies (sequentially by 4-7%). The manufacture of basic metals under IIP witnessed a growth of about 3.8% during Q1FY19.

Maintaining the firm trend in Q4FY18, EBITDA for most companies improved in Q1FY19, aided by sequentially higher realisations for both the ferrous and a few non-ferrous companies, partly offset by higher input costs.The prices of HR coils, CR coils and TMT bars (Thermo-Mechanically Treated bars) grew by 27-40% on a YoYbasis.

International iron ore prices have been relatively stable at current levels of ~US$ 65/t. NMDC's domestic fine prices remain at a discount to international ore prices despite the recent price hike, leading to stability in prices in the short term.

The partial shutdown of the Alunorte refinery has led to the outlook for alumina improving, reflected in the firm pricing trend.

Concerns of a global trade war have led to a flight to safety and a stronger US$, which is dampening the sentiment towards commodity prices. A slowdown in China’s economic growth, US duties on steel and aluminium, and anexpected hike in interest rates by the Federal Reserve could further pressurise metal prices.

Affordable housing is expected to provide a big boost to the TMT steel sector. Also, there is a lot of consolidation taking place in the industry (led by NCLT outcomes), which will benefit the players going forward.

Media

Strong growth momentum in advertisement revenues continued during Q1FY19 (partly attributed to the low base), as the sector witnessed healthy ad spends by companies. Advertisement revenues of broadcasters grew in double-digits during the quarter. Although broadcasters have recouped, the print and radio categories are still unclear on momentum.

Digitisation has aided companies such as Sun TV to achieve healthy subscription revenue growth. Zee Entertainment benefitted from the network market share gains. Digital offerings of the broadcasters are also getting good traction. ZEE5 witnessed growth across viewership metrics, and is now amongst the top-5 digital entertainment platforms in the country.

The Maharashtra Food & Civil Supplies Minister’s move to disallow outside F&B inside multiplexes remains a key monitorable, although a similar PIL in Madhya Pradesh was dismissed by the High Court. In addition to this, the Maharashtra Government has started toning down its negative stance on the issue.

Zee and Sun TV reported subscription revenue growth of 12.3% YoY and 15% YoY respectively. Radio City reported an ad growth of 7.6% YoY, led by volume growth in new stations and higher yield from legacy stations.

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Oil & Gas

Singapore gross refining margins (GRMs) declined by ~13% QoQto US$6.1/bbl against US$7/bbl in Q4FY18. OMCs reported higher EBITDA, benefitting from inventory gains. Core refining margins were, however, a disappointment for all refining companies.

Crude oil was volatile in the quarter, and ended higher by ~11% (Brent). OPEC continued with its production cut until its meeting in June-18, when it decided to increase production by 1mbpd.

ONGC witnessed a 3.5% YoY decline in its oil production, and a 3% YoY increase in gas production. It expects ~10% increase in gas production going forward, while oil production is expected to remain flat. Oil India reported flat YoY oil production, and a decline of 4% YoY in its gas production.

City Gas Distribution (CGD) companies reported strong volume growth due to conversion to CNG vehicles and rising pollution concerns. In Q1FY19, CGD companies hiked CNG and PNG prices to offset the increase in input cost. These hikes have aided revenue growth.

Gas transmission and LNG import firms witnessed 18-26% YoY EBITDA growth on higher gas transmission volume and LNG Imports. Global LNG surplus has resulted in LNG trading at 11-12% of FO price, which is the lower end of the typical range of 10-16%, benefitting CGD and gas transmission firms.

Pharma

Q1FY19 has proved to be a decent quarter for pharma companies. Domestic business remained in top shape due to the lower base, while commentary on the US businesses is improving. Growth in exports was aided by new product launches and Rupee depreciation during the quarter.

The top 15 pharma companies saw 25% YoYgrowth in their domestic business. MNC pharma companies also showed 18.8% YoYrevenue growth during the quarter. The revenues of the top 10 Indian companies in the US market have grown 4.2% YoYin Q1FY19.

The US generic business continues to remain under pressure on account of a lack of meaningful new high-value launches, QoQprice erosion in the base business and competition in some existing high-value products. Whilethe fall in US generic revenue may be near its end for a majority of Indian companies, US revenueare likely to remain range-bound in the medium term till the threshold revenues of NDA products are reached.

Volatile currencies in EU and EMs led to moderate growth in those markets, and companies expect to maintain similar growth patterns, assuming that the current exchange rateswill be largely stable in FY19E.

Ports & Logistics

Container volumes showed healthy growth, with APSEZ reporting 16% growth in containers and 9% overall growth in cargo.

Logistics companies reported a mix set of results. Among CTOs, Concor registered container volume growth of ~11% YoY, while GDPL reported a growth of ~18% YoY. AGLL's MTO volume spiked 26% YoY (higher growth in FCL volumes), while CFS volume growth of 4%YoY benefitted from operations in Kolkata and a gain in DPD volumes at JNPT.

CCRI increased tariffs by Rs1000/teu on all circuits on both export and import routes, while GDPL made a similar hike in May-18 on imports during the quarter.

Road operators expect growth to pickup, owing to benefits from the e-way bill coming in over the months ahead. The industry is expected to witness a paradigm shift from the unorganised to organised realm.

Power

Electricity generation (excluding RE) growth was only 2.9% YoY during the quarter. Hydro generation declined 13.5% YoY due to lower availability of water, which impacted both JSW Energy and NHPC adversely, and benefitted Coal India and NTPC. Coal-based power generation increased by 5.2%.

Coal India’s dispatches increased 12% YoY, aided by restocking demand and declining imports. CIL closed the quarter at a multi-year low inventory level of 31 MT heading into Q2FY19.

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Growth in power demand continued in Q1FY19, up 4% YoY. Peak demand breached the 170 GW mark for the first time, clocking 172GW in May-18 and Jun-18,reflecting the underlying strong demand in the system. Consequently, thermal PLFs improved 200bps YoYto touch 63.75%.

NTPC’s power generation increased 7.5% YoY to 69b kwh, while coal plants’ PLF declined 110bpsYoY to 78%, yet best in the country. Under-recoveries of fixed charge due to low availability at some plants impacted PAT growth.

Demand momentum is expected to continue, with the Government’s focus on ensuring 'Power for All'. Stressed assets’ resolution should gather pace, as the RBI deadline approaches, along with the Government working on the SHASHAKT scheme to salvage stressed assets.

Real Estate

Real estate companies were hit by the IND-AS 115 norms, which required them to shift their revenue recognition policy from percentage completion to project completion even for ongoing projects. Subsequently, real estate companies had to reverse profit registered for ongoing projects in its accounts for the previous years.

Q1FY19 performance was mixed across various realty companies.Companies like Sunteck, Brigade and Oberoi delivered strong YoY growth in pre-sales numbers. On the other hand, Godrej Properties witnessed muted sales during the quarter (on account of a large number of launches happening close to the end of the quarter).

Retail

For Titan, the jewellery business saw further market share gains, while the watchsegment’s EBIT margin expanded sharply. However, Q1FY19 sales missed expectations of 14-15% growth.

Jubilant Foodworks reported strong SSSG (same store sales growth) at 25.9%, while gross margin contracted 180bpsYoY, EBITDA margin expanded 490bpsYoY. Store addition is likely to accelerate starting Q2FY19. The company aims to add 75 stores in FY19.

Sugar

Sugar industry witnessed a decline in net sales during Q1FY19 vis-à-vis double-digit growth in the year-ago period. The outlook of the sugar business seemed alarming due to the situation of glut, as the sugar prices dipped to Rs 26/kg during the first half of the quarter.

However, this situation has been somewhat salvaged due to government intervention by introducing the regulated sugar release mechanism, buffer stocks, prescribing floor prices for sale of sugar and mandatory exports.

However, more Government initiatives, including policy changes, are required in the immediate future. Textiles

Textiles sales during the year remained subdued, led by a slower pick-up in demand during the quarter. Volume sales were affected on account of various rate changes under the tax regime.

Under IIP, in-line with industry sales, manufacturing of textiles witnessed a marginal decline of about 0.4% in Q1 FY19.

Going forward, the domestic textile industry is expected to benefit as the Government has doubled import duty on various textile products to avoid cheap imports from competing countries like China, and encourage domestic manufacturing.

Telecom

The industry was affected by aggressive pricing amongst the telecom players, leading to a double-digit decline in sales growth during the quarter.

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Revenues of Bharti’s India mobility business (organic), Idea Cellular and Vodafone India declined 2%, 4% and 1.6% QoQ, respectively, as ARPU continues to trend downwards. ARPU for Bharti, Idea and Vodafone declined 6%, 4.8% and 3.3% QoQ, respectively, as customers continuedmoving towards bundled schemes, offering higher volumes at lower rentals. ARPU for RJIO declined merely 1.8% QoQ, as ~90% of the Jiophone subscribers opted for higher-value plans.

Subscriber addition remained strong for Bharti— 1.24cr- on an organic growth basis and 4.04crincluding the Telenor acquisition QoQ, while Idea’s and Vodafone’s subscriber base shrunk 66lakhand 30 lakh QoQ, respectively. RJIO reported yet another strong quarter, with a 13.8% QoQ spike in revenue on the back of robust 2.87cr subscriber additions.

The way ahead:

Steady crude price (post 7% fall in Jul-18 from the peak), reiteration of strong economic outlook by the IMF and convincing Jun-18 quarterly earnings were the key factors bolstering investor confidence.

After a short hiatus in early FY19, earnings downgrades have resumed. But most downgrades are limited to the Consumer Discretionary, PSU Banks and Telecom sectors. Barring these three, earnings estimates have been broadly stable.

The e-way bill system has started showing results, with increased GST collections since Apr-18 (higher than the monthly average of FY18 of Rs89,885cr). The organised sector is banking on efficiencies from the E-way bill for any tangible benefit to accrue.

Political uncertainties will continue to prevail. However, unless the street expects a very glum outcome in the elections, markets in their current mood will quickly discount not-so-encouraging political expectations.

The GST council has cut GST rates on 88 items in Jul-18. This will result in increased demand, as product prices will decline due to lower taxes. An increase in overall revenue, led by increased demand over the longer term, would offset the short term revenue collection hit.

Margin pressure could subside for private banks in H2. NCLT resolutions will help corporate banks, however haircuts might be higher. Trend on loan waivers and pain in Agri/ SME are key monitorables. NBFCs focussing on the rural and vehicle finance segments will continue witness good results.

Demand remains strong on a low base, rural demand has picked up across staples and discretionary segments, and outlook remains bright given benefits from normal monsoon, higher spending ahead of 2019 elections and benefits of higher MSP. The input cost tailwind is largely over, and a calibrated price increase is expected in the coming quarters.

Ministry of Road is targetting to award 20,000kms in FY19, after a very strong FY18. Ordering from various states and Bharatmala continues to provide good medium-term visibility for growth.

India’s trade deficit for Jul-18 at US$ 18bnis the highest since May-13 (US$ 20bn), and FYTD trade deficit stands at US$ 62bn as against US$ 51bn a year ago. Any slippage on the fiscal deficit given the election year, higher inflation and rising crude can further pressurisethe Rupee in the coming months. This could be the biggest spoilsport for the markets.

(Source:HDFCSec Research, websites, news, broker reports)

The shortlist The following is the list of companies that have released results in Q1FY19 that were good on one or more of the following parameters: • Sales growth - YoY / QoQ • PAT and OPM growth - YoY / QoQ • P/E on 4Q trailing EPS (Consolidated P/E provided wherever available)

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• Profit growth in this quarter is not due to the impact of an exceptionally benevolent commodity cycle or lumpy sales. Profit growth is not exceptionally more than sales growth

Healthy RoE

Healthy CAGR growth in sales, EBITDA and PAT overthree and five years The companies have been listed in alphabetical order, and do not reflect our recommendation/buys or even preference in that order. Many of these companies may not be under our coverage.

All figures provided below are in Rscr (except FV, CMP, BV& EPS). OPM and growth numbers are in %. OPM has been calculated without other income (OI) and EPS is based on the trailing twelve months (TTM) adjusted PAT.

Co_Name Industry

Net Sales

Jun 18 PAT

Jun 18 Latest Equity CMP BV FV EPS

Growth in Sales

YoY

Growth in PAT

YoY

Growth in Sales

QoQ

Growth in PAT QoQ

OPM% w/o OI

- Jun 18

OPM% w/o OI - Mar

17

OPM% w/o OI –Jun17

P/E on

TTM EPS P/BV

Div Yield - Latest

20 Microns Mining / Minerals 107.8 6.5 17.6 47.3 37.6 5 5.7 10.7% 107.0% 6.6% 51.0% 14.9% 11.2% 12.5% 8.3 1.3 0.7%

Ador Welding Electrodes 102.6 4.1 13.6 348.3 182.1 10 16.7 17.8% 6000.0% -29.3% -56.3% 7.3% 11.5% 0.5% 20.8 1.9 1.4%

AkshOptifibre Cables - Telephone 139.2 13.1 81.4 30.7 30.2 5 2.1 20.7% 495.9% -17.9% 34.7% 21.8% 14.3% 9.3% 14.6 1.0 1.0%

Albert David Pharmaceuticals 94.4 7.8 5.7 529.7 325.7 10 45.5 72.8% 194.3% 38.0% 35.6% 13.4% 15.5% -20.9% 11.6 1.6 1.0%

Alkem Lab* Pharmaceuticals - Indian 1669.5 137.3 23.9 2066.1 408.6 2 59.5 27.2% 115.2% 10.3% 107.0% 12.8% 7.5% 7.2% 34.7 5.1 0.6%

Alufluoride Aluminium Chemicals 19.1 3.3 7.0 163.8 46.7 10 12.4 16.8% 206.5% 35.5% 52.5% 18.1% 23.6% 9.1% 13.2 3.5 0.0%

Amal Dyes - Intermediate 9.3 3.0 9.4 165.0 9.1 10 12.0 60.9% 112.9% 4.9% 42.3% 50.1% 30.2% 35.5% 13.8 18.1 0.0%

Andhra Petrochem Chemicals - Plasticizers 165.2 31.5 85.0 78.5 18.6 10 8.5 44.0% 4975.8% 45.2% 458.0% 23.5% 9.7% 5.2% 9.3 4.2 0.0%

Apollo Micro Sys Computers - Software 44.2 4.3 20.8 158.3 123.1 10 11.8 11.3% 1480.6% -43.1% -43.8% 21.3% 21.7% 8.5% 13.5 1.3 0.0%

Apollo Sindoori Hotels - Small 35.4 2.6 1.3 1386.1 199.8 10 56.4 3.2% 13.0% 3.4% 217.1% 10.4% -0.8% 9.8% 24.6 6.9 0.4%

Asahi Songwon Dyes And Pigments 76.5 4.8 12.3 269.5 148.0 10 20.5 19.9% 74.7% -16.1% 171.0% 13.8% 10.3% 8.4% 13.2 1.8 1.1%

Assoc.Alcohols Distilleries 99.4 11.5 18.1 323.2 66.8 10 16.2 15.2% 55.4% 27.8% 147.2% 20.6% 14.0% 16.8% 20.0 4.8 0.3%

Automotive Axles Auto Ancillaries 473.8 29.0 15.1 1411.6 294.1 10 66.2 61.9% 124.8% 1.0% 2.5% 11.8% 11.7% 9.7% 21.3 4.8 1.0%

Bajaj Auto* Automobiles 7267.2 1041.8 289.4 2688.4 660.2 10 152.9 36.4% 21.3% 9.3% -11.4% 17.6% 19.8% 17.0% 17.6 4.1 2.2%

Bajaj Finserv* Finance 8769.7 1328.5 79.6 6970.3 181.0 5 237.4 16.4% 49.4% -3.3% 26.7% 38.4% 31.0% 31.1% 29.4 38.5 0.0%

Balaji Amines Chemicals - Organic 260.2 33.8 6.5 563.0 144.2 2 38.2 30.0% 48.7% 1.3% 1.9% 22.5% 18.2% 20.3% 14.7 3.9 0.0%

Banco Products* Auto Ancillaries - Others 446.0 31.2 14.3 224.1 86.0 2 17.5 24.0% 37.3% 49.9% 15.6% 13.7% 18.6% 12.3% 12.8 2.6 4.5%

Bata India Leather / Synthetic Footware 797.3 82.6 64.3 1098.4 115.1 5 19.1 8.3% 36.6% 26.1% 58.5% 16.5% 13.0% 13.0% 57.5 9.5 0.4%

BDH Inds. Pharmaceuticals - Indian 13.0 1.3 5.8 75.2 51.5 10 8.0 85.7% 186.4% 12.7% 2.4% 13.9% 15.0% 9.2% 9.5 1.5 3.3%

BhageriaIndust. Dyes And Pigments 113.3 17.9 10.9 298.5 136.7 5 23.8 37.9% 262.8% 8.6% 67.8% 26.8% 18.2% 14.6% 12.6 2.2 1.8%

Bharat Electron Electronics - Others 2077.8 179.7 243.7 115.1 31.9 1 6.0 22.6% 43.4% -39.4% -67.8% 14.9% 23.2% 9.8% 19.3 3.6 1.7%

Bharat Forge Forgings - Large 1479.7 234.5 93.1 656.3 99.1 2 17.8 23.2% 33.9% 0.9% 45.0% 29.0% 19.4% 27.8% 36.9 6.6 0.7%

Bimetal Bearings Bearings - Large 51.6 3.7 3.8 564.5 455.7 10 28.9 22.9% 34.2% -5.6% -3.7% 10.6% 7.8% 10.1% 19.5 1.2 1.6%

Biocon* Biotechnology 1123.8 119.7 300.0 615.2 112.3 5 6.7 21.2% 47.2% -3.9% -8.2% 21.2% 19.9% 20.7% 92.2 5.5 0.2%

Birla Cable Cables - Telephone 117.5 11.1 30.0 172.9 40.5 10 9.2 145.1% 3451.5% 2.8% 24.1% 15.0% 13.5% 3.8% 18.8 4.3 0.6%

Birla Corpn.* Cement 1655.8 83.9 77.0 781.2 429.6 10 25.3 13.5% 63.7% 0.3% -36.0% 14.9% 15.2% 15.6% 30.9 1.8 0.8%

Birla Precision Machine Tools - Others 51.4 2.7 10.5 17.3 19.6 2 1.1 34.9% 1046.4% -7.7% 45.6% 9.5% 6.0% 7.9% 16.4 0.9 0.0%

RETAIL RESEARCH

RETAIL RESEARCH P a g e | 11

Co_Name Industry

Net Sales

Jun 18 PAT

Jun 18 Latest Equity CMP BV FV EPS

Growth in Sales

YoY

Growth in PAT

YoY

Growth in Sales

QoQ

Growth in PAT QoQ

OPM% w/o OI

- Jun 18

OPM% w/o OI - Mar

17

OPM% w/o OI –Jun17

P/E on

TTM EPS P/BV

Div Yield - Latest

Bodal Chemicals Dyes - Reactive / Direct 353.0 39.4 24.4 119.0 57.5 2 11.1 29.8% 26.5% 25.0% -0.7% 17.8% 16.5% 18.7% 10.7 2.1 0.7%

Brigade Enterpr.* Construction 699.1 63.1 136.1 202.8 171.0 10 12.3 26.0% 112.2% 61.3% 283.9% 25.7% 28.4% 22.8% 16.5 1.2 1.0%

Cadila Health.* Pharmaceuticals 2768.7 460.5 102.4 396.5 75.7 1 20.5 31.5% 232.7% -12.2% -22.1% 23.3% 27.1% 13.1% 19.4 5.2 0.9%

Capital First* Finance - Investment / Others 1045.4 101.5 99.0 635.6 257.5 10 36.6 38.1% 55.3% -4.4% 6.6% 58.2% 48.8% 52.7% 17.4 2.5 0.4%

Carborundum Uni.* Abrasives and Grinding Wheels 625.8 65.3 18.9 372.4 61.9 1 12.7 22.1% 56.3% -2.0% 3.8% 17.2% 18.1% 14.1% 29.3 6.0 0.6%

Century Enka Textiles - Manmade 405.9 22.5 21.9 297.9 412.3 10 32.1 20.3% 268.0% -1.0% 30.6% 11.1% 8.5% 4.1% 9.3 0.7 2.3%

ChemfabAlka. Chemicals - Inorganic 49.4 8.4 13.9 165.1 169.9 10 21.3 27.4% 97.4% -2.4% 7.3% 29.2% 31.8% 22.1% 7.8 1.0 0.0%

Coal India* Mining / Minerals 22597.8 3786.4 6207.4 294.7 20.5 10 13.6 22.8% 61.1% -10.0% 195.9% 25.4% 0.7% 19.1% 21.7 14.4 5.6%

Control Print Packaging - Others 43.5 8.1 16.3 388.4 101.9 10 20.5 -3.3% -12.9% -4.1% -32.1% 26.2% 21.1% 27.6% 19.0 3.8 0.9%

Datamatics Glob.* IT Enabled Services / 260.8 21.6 29.5 121.5 75.9 5 12.9 25.0% 34.5% 11.1% 42.2% 12.2% 9.8% 9.1% 9.4 1.6 0.0%

DewanHsg. Fin. Finance - Housing - Large 3149.7 435.0 313.7 665.7 280.3 10 42.9 26.2% 34.9% 12.4% 39.3% 90.0% 87.9% 91.2% 15.5 2.4 0.8%

DharamsiMorarji Fertilizers - Phosphatic 60.3 13.5 24.9 150.3 29.1 10 10.2 55.8% 2358.2% 22.2% 166.7% 31.5% 18.3% 5.0% 14.8 5.2 0.0%

Diamines& Chem. Petrochemicals - Others 15.4 5.3 9.8 171.7 43.6 10 12.1 46.0% 238.9% 59.1% 140.7% 48.3% 28.5% 12.2% 14.2 3.9 0.0%

Dr Reddy's Labs* Pharmaceuticals - Indian 3720.7 476.1 83.0 2417.7 711.3 5 81.7 12.2% 614.9% 5.3% 75.0% 20.7% 15.9% 9.7% 29.6 3.4 0.8%

Eicher Motors* Automobiles 2534.3 576.2 27.3 28736.2 1970.3 10 761.4 27.2% 25.4% 0.7% 24.8% 31.9% 24.2% 30.6% 37.7 14.6 0.4%

Endurance Tech.* Auto Ancillaries - Others 1860.4 124.6 140.7 1501.6 127.4 10 30.9 23.6% 29.1% 7.2% 7.1% 14.6% 14.8% 14.2% 48.5 11.8 0.3%

Esab India Electrodes 171.7 15.8 15.4 897.2 245.8 10 29.0 25.6% 63.6% 11.8% 62.0% 12.6% 6.5% 9.2% 30.9 3.7 0.1%

Escorts Automobiles - Tractors 1511.3 120.7 122.6 895.2 207.9 10 33.2 32.3% 92.7% 5.2% 7.3% 12.3% 12.1% 8.5% 26.9 4.3 0.2%

Everest Inds. Cement Products 416.8 29.4 15.6 560.6 254.0 10 40.4 18.5% 61.3% 22.1% 48.1% 10.2% 7.8% 8.8% 13.9 2.2 1.2%

Excel Inds. Chemicals - Organic - Large 190.8 38.9 6.3 1728.4 350.3 5 82.3 56.2% 393.8% 4.3% 13.9% 31.4% 30.2% 11.0% 21.0 4.9 0.7%

Flex Foods Food - Processing 22.2 2.9 12.5 90.2 63.4 10 6.4 2.7% 66.1% 2.5% 63.3% 24.2% 19.6% 20.0% 14.1 1.4 0.0%

G M Breweries Distilleries 110.4 22.2 14.6 778.0 159.4 10 58.0 16.8% 117.5% -1.6% -10.1% 30.7% 29.6% 16.4% 13.4 4.9 0.4%

G M D C Mining / Minerals 644.8 186.8 63.6 117.1 138.4 2 15.0 10.6% 30.7% 1.5% 86.6% 39.5% 21.2% 31.4% 7.8 0.8 3.0%

G N F C Fertilizers 1604.8 185.5 155.4 404.2 286.8 10 58.5 64.5% 178.8% -9.0% -43.6% 19.4% 26.7% 17.6% 6.9 1.4 1.9%

Galaxy Surfact.* Detergents / Intermediates 716.2 45.7 35.5 1238.7 187.8 10 57.0 23.0% 27.5% 11.3% 14.2% 12.4% 10.9% 11.8% 21.7 6.6 0.6%

Gandhi Spl. Tube Steel - Medium / Small 37.6 11.3 6.9 402.0 128.3 5 26.1 33.9% 27.7% 34.1% 68.2% 39.1% 30.9% 37.5% 15.4 3.1 2.2%

GNA Axles Auto Ancillaries - Axles / Shafts 212.6 14.0 21.5 369.7 159.1 10 25.1 46.5% 26.4% 3.9% -14.9% 14.9% 14.4% 15.8% 14.8 2.3 0.0%

Godawari Power* Steel - Medium / Small 720.1 58.2 34.1 531.6 246.5 10 79.2 29.1% 751.2% -3.1% -51.1% 25.5% 25.3% 18.2% 6.7 2.2 0.0%

GujAlkalies Chlor-Alkali 752.9 183.2 73.4 574.5 520.5 10 84.8 38.3% 92.1% 8.0% -17.1% 38.2% 42.0% 28.3% 6.8 1.1 1.1%

Guj. AmbujaExp Solvent Extraction - Large 804.2 53.1 22.9 219.0 89.2 2 18.8 16.3% 215.0% -8.7% -32.8% 12.1% 13.3% 5.0% 11.6 2.5 0.0%

Guj. Intrux Metal - Copper 8.7 1.5 3.4 142.7 118.8 10 13.1 36.0% 225.5% -28.3% 194.2% 23.6% 8.8% 10.8% 10.9 1.2 0.0%

Hawkins Cookers Domestic Appliances 120.7 10.7 5.3 3389.7 207.6 10 103.6 49.6% 133.9% -28.7% -16.6% 13.9% 12.3% 8.0% 32.7 16.3 2.1%

Hester Bios Pharmaceuticals 36.8 9.7 8.5 1267.6 171.7 10 40.0 33.6% 56.6% 2.5% 7.4% 40.1% 31.1% 39.1% 31.7 7.4 0.8%

Hexaware Tech.* Computers - Software 1136.7 153.6 59.4 419.4 55.3 2 18.6 15.6% 25.4% 8.4% 14.3% 15.6% 15.5% 16.2% 22.6 7.6 1.0%

Him Teknoforg. Auto Ancillaries - Gears 76.9 3.2 1.6 183.5 171.1 2 13.1 31.7% 62.1% -1.8% 5.6% 11.4% 8.2% 14.1% 14.0 1.1 0.0%

HimadriSpecialt Chemicals - Speciality 604.7 76.7 41.8 129.8 34.8 1 6.4 33.7% 53.2% 9.8% 7.6% 22.4% 22.6% 22.1% 20.2 3.7 0.1%

I G Petrochems Chemicals 351.0 45.9 30.8 482.1 171.5 10 49.8 18.6% 17.3% 12.2% 37.3% 21.4% 20.4% 23.8% 9.7 2.8 0.0%

I O C L Refineries 129475.0 6831.1 9711.8 155.6 113.7 10 24.3 22.8% 50.2% 10.3% 30.9% 9.7% 9.4% 7.6% 6.4 1.4 13.5%

IIFL Holdings* Finance - Investment 1768.0 266.3 63.8 710.6 45.6 2 30.7 24.6% 34.8% 73.6% 7.2% 70.8% 72.8% 69.0% 23.1 15.6 0.7%

Indian Energy Ex Finance 67.0 41.9 30.2 1686.5 93.6 10 47.1 22.4% 33.5% 21.4% 33.2% 81.3% 78.9% 77.3% 35.8 18.0 0.0%

RETAIL RESEARCH

RETAIL RESEARCH P a g e | 12

Co_Name Industry

Net Sales

Jun 18 PAT

Jun 18 Latest Equity CMP BV FV EPS

Growth in Sales

YoY

Growth in PAT

YoY

Growth in Sales

QoQ

Growth in PAT QoQ

OPM% w/o OI

- Jun 18

OPM% w/o OI - Mar

17

OPM% w/o OI –Jun17

P/E on

TTM EPS P/BV

Div Yield - Latest

Indo Borax & Ch. Chemicals - Inorganic 33.9 5.8 3.2 643.0 322.4 10 53.6 140.8% 242.0% 8.7% 29.3% 22.0% 20.1% 14.6% 12.0 2.0 0.2%

IP Rings Auto Ancillaries 50.8 2.2 12.7 161.5 74.0 10 6.9 3.3% 172.0% 1.0% 51.7% 13.9% 10.2% 10.0% 23.4 2.2 0.0%

Ishan Dyes & Ch. Dyes And Pigments 19.8 2.5 11.3 50.2 24.8 10 5.0 82.0% 2175.0% -6.8% 46.5% 17.9% 15.1% -1.5% 10.1 2.0 0.0%

ITD Cem* Construction 652.9 28.9 17.2 135.0 58.1 1 6.8 33.5% 39.5% -0.3% 1.9% 12.6% 9.3% 11.2% 20.0 2.3 0.0%

Jamna Auto Inds.* Auto Ancillaries - Springs 562.2 40.0 39.8 84.2 10.7 1 3.7 107.2% 129.8% -5.8% -14.4% 13.4% 15.0% 11.2% 22.7 7.9 1.0%

Jiya Eco-Product Miscellaneous 36.6 5.3 11.8 114.9 41.5 10 10.9 104.0% 207.6% 2.3% 16.8% 17.1% 16.8% 16.8% 10.5 2.8 0.0%

JSW Steel* Steel - Large 19950.0 2339.0 241.0 366.2 115.2 1 33.4 35.1% 274.8% -2.4% -18.8% 25.6% 25.9% 17.7% 11.0 3.2 0.9%

Jubilant Life* Pharmaceuticals - Indian 2046.3 200.4 15.6 725.9 141.2 1 44.4 33.0% 39.4% -8.0% 31.5% 21.4% 20.6% 21.9% 16.4 5.1 0.4%

K E C Intl.* Transmisson Line Towers 2104.7 86.8 51.4 305.1 79.3 2 18.8 13.4% 37.9% -42.6% -55.8% 10.3% 10.1% 9.5% 16.2 3.8 0.8%

KanchiKarpooram Chemicals - Organic 46.6 10.0 4.1 444.7 86.4 10 54.4 127.9% 271.9% 36.7% 115.9% 31.3% 20.5% 23.0% 8.2 5.1 0.0%

Kennametal India Machine Tools - 225.8 22.4 22.0 933.0 186.5 10 26.3 29.8% 369.8% 14.0% 37.4% 10.7% 16.0% 6.1% 35.4 5.0 0.0%

Kilburn Engg. Engineering - Heavy 37.6 2.5 13.3 66.5 80.2 10 3.6 44.9% 127.9% 57.2% 239.0% 11.0% -16.9% 5.9% 18.4 0.8 1.5%

KPIT Tech.* Computers - Software 1013.8 78.6 38.0 293.4 76.2 2 14.6 16.7% 46.8% 4.9% 2.6% 11.7% 10.6% 9.2% 20.1 3.8 0.8%

L & T Infotech* Computers - Software 2155.7 361.2 17.2 1856.1 214.9 1 70.1 29.0% 35.2% 7.7% 24.8% 19.4% 14.6% 16.7% 26.5 8.6 1.2%

L&T Fin.Holdings* Finance - Investment / Others 3041.0 539.8 1995.8 183.9 38.2 10 8.5 32.2% 59.5% 10.7% 33.0% 69.6% 66.2% 65.8% 21.7 4.8 0.4%

L&T Technology* Engineering - Turnkey Services 1152.2 198.1 20.3 1680.3 189.6 2 59.8 40.1% 102.1% 9.2% 24.5% 17.0% 15.5% 15.3% 28.1 8.9 1.0%

Larsen & Toubro* Engineering - Turnkey Services 28283.5 1472.0 280.4 1355.8 349.7 2 59.6 18.8% 43.1% -30.5% -55.9% 16.2% 17.1% 14.6% 22.8 3.9 1.2%

Lords Chloro Chlor-Alkali 66.8 7.5 25.2 73.2 20.7 10 5.8 102.5% 434.3% 18.2% 180.1% 19.1% 13.4% 10.2% 12.7 3.5 0.0%

Lumax Auto Tech.* Auto Ancillaries - Others 333.0 19.5 13.6 207.8 37.9 2 9.9 41.7% 66.8% 0.4% 9.4% 10.0% 7.4% 8.6% 21.1 5.5 0.0%

M & M Automobiles - passenger cars 13519.9 1206.2 595.1 978.5 243.9 5 37.7 16.4% 60.9% 1.6% 17.5% 13.8% 13.2% 10.7% 26.0 4.0 0.8%

Mah. Seamless Steel - Seamless Tubes 607.4 100.4 33.5 486.8 363.2 5 39.0 35.4% 169.4% -3.6% 13.5% 23.7% 19.7% 13.6% 12.5 1.3 1.2%

Man Inds. Steel - Tubes / Pipes 632.6 25.1 28.6 105.3 114.4 5 14.0 98.9% 149.1% 29.3% -12.7% 9.9% 11.8% 7.5% 7.5 0.9 0.0%

Mangalam Organic Chemicals - Organic 87.7 12.1 8.6 351.7 70.9 10 28.0 151.4% 371.5% 55.5% 307.8% 19.1% 13.0% 12.6% 12.6 5.0 0.0%

Maruti Suzuki Automobiles - passenger cars 21810.7 1975.3 151.0 9418.4 1382.3 5 269.6 27.3% 26.9% 5.9% 5.0% 15.4% 14.6% 13.6% 34.9 6.8 0.8%

MAS FINANC SER Finance - Investment / Others 121.4 30.5 54.7 612.0 130.6 10 20.3 24.7% 81.6% 7.1% 1.8% 73.7% 71.5% 76.2% 30.2 4.7 0.4%

Mastek* Computers - Software 244.0 22.5 11.9 552.9 96.0 5 32.8 31.5% 53.2% 9.1% 15.9% 12.7% 12.4% 12.1% 16.9 5.8 1.1%

Menon Bearings Bearings - Medium / Small 45.8 7.2 5.6 91.4 13.8 1 4.2 45.1% 58.2% 18.3% 40.9% 24.2% 24.2% 25.3% 21.5 6.6 1.6%

Minda Corp* Auto Ancillaries - Instruments 778.3 37.6 45.2 154.9 34.4 2 6.9 33.8% 63.3% 8.0% -2.8% 9.4% 10.7% 7.6% 22.4 4.5 0.4%

Minda Inds.* Auto Ancillaries - Electrical 1429.8 84.6 17.4 424.2 37.0 2 38.0 51.3% 64.3% 4.3% -21.1% 11.9% 10.0% 10.7% 11.2 11.5 0.7%

MorganiteCrucib Refractories / Intermediates 31.7 5.8 2.8 1811.6 324.7 10 58.1 21.1% 104.6% 17.1% 20.3% 22.0% 27.4% 16.7% 31.2 5.6 0.9%

MphasiS* Computers - Software - Large 1820.2 258.3 193.3 1248.3 202.1 10 47.5 18.5% 38.0% 4.3% 4.7% 17.6% 17.0% 14.9% 26.3 6.2 1.6%

N R Agarwal Inds Paper - Medium / Small 332.5 29.0 17.0 468.2 128.9 10 57.5 20.2% 35.6% -3.7% 19.0% 15.5% 14.7% 11.9% 8.1 3.6 0.6%

Natl. Aluminium Aluminium 2973.3 627.0 966.5 74.9 54.4 5 6.7 64.9% 386.3% 3.8% 147.7% 34.0% 17.1% 12.6% 11.2 1.4 7.6%

Natl. Peroxide Chemicals - Inorganic 105.0 42.6 5.8 4778.3 885.4 10 207.0 53.7% 137.1% 7.8% 14.1% 61.5% 59.3% 40.4% 23.1 5.4 1.4%

Nelcast Castings - Steel / Alloy 205.4 11.4 17.4 85.0 42.2 2 4.8 36.4% 48.7% -3.5% 11.2% 10.3% 8.8% 10.1% 17.6 2.0 1.2%

NGL Fine Chem Pharmaceuticals - Indian 34.9 4.8 3.1 470.2 116.6 5 25.2 65.1% 201.3% 8.9% 57.0% 14.7% 18.1% 9.1% 18.7 4.0 0.0%

NIIT Tech.* Computers - Software 824.9 90.4 61.5 1340.2 239.7 10 55.9 16.4% 62.9% 4.6% -7.1% 15.9% 18.4% 15.4% 24.0 5.6 1.1%

NRB Bearings Bearings - Large 233.9 23.8 19.4 171.7 40.3 2 9.6 30.6% 87.2% -0.6% -11.2% 19.0% 17.9% 15.3% 17.9 4.3 1.5%

Oriental Aromat. Chemicals - Organic 147.5 11.1 8.4 859.6 409.6 10 38.8 31.3% 80.0% -0.2% 21.6% 15.7% 15.5% 10.8% 22.2 2.1 0.2%

Petronet LNG Gas Distribution 9169.2 587.0 1500.0 231.7 64.8 10 14.8 42.5% 34.1% 6.2% 12.3% 10.2% 9.5% 11.6% 15.6 3.6 1.9%

RETAIL RESEARCH

RETAIL RESEARCH P a g e | 13

Co_Name Industry

Net Sales

Jun 18 PAT

Jun 18 Latest Equity CMP BV FV EPS

Growth in Sales

YoY

Growth in PAT

YoY

Growth in Sales

QoQ

Growth in PAT QoQ

OPM% w/o OI

- Jun 18

OPM% w/o OI - Mar

17

OPM% w/o OI –Jun17

P/E on

TTM EPS P/BV

Div Yield - Latest

Pix Transmission Rubber - Products 69.2 10.8 13.6 194.5 138.3 10 22.2 40.7% 795.8% -13.3% 4.7% 22.8% 22.6% 16.0% 8.7 1.4 1.3%

Power Grid Corpn Power Generation And Supply 8127.1 2240.5 5231.6 196.8 104.0 10 16.1 13.2% 9.2% 4.0% 11.8% 85.2% 83.5% 86.3% 12.2 1.9 2.7%

Power Mech Proj.* Engineering - Turnkey Services 461.9 30.5 14.7 977.4 463.1 10 67.9 28.9% 42.4% -5.7% 2.0% 13.1% 13.1% 12.8% 14.4 2.1 0.1%

Rain Industries* Trading - Medium / Small 3803.3 303.8 67.3 204.9 27.4 2 36.0 44.2% 95.2% 15.0% 14.3% 18.2% 19.4% 17.7% 5.7 7.5 1.0%

Rajratan Global* Steel - Wires 122.8 8.4 4.4 921.9 255.0 10 47.7 75.3% 134.8% 21.7% 44.1% 12.7% 10.6% 11.6% 19.3 3.6 0.2%

Rallis India* Pesticides / Agrochemicals 573.1 54.6 19.5 208.1 60.6 1 9.1 29.7% 20.6% 54.4% 178.8% 14.5% 9.1% 15.7% 22.9 3.4 1.2%

RDB Rasayans Textiles - Manmade 20.8 4.1 17.7 101.7 43.2 10 5.3 15.7% 93.0% 0.8% 181.0% 15.0% -1.3% 9.2% 19.3 2.4 0.0%

Reliance Inds.* Refineries 128756.0 9485.0 5924.0 1318.2 496.5 10 61.6 54.3% 15.3% 10.1% 0.3% 16.0% 15.8% 15.0% 21.4 2.7 0.5%

Rico Auto Inds* Auto Ancillaries 349.1 18.8 13.5 84.4 40.2 1 5.0 27.7% 28.6% 5.0% -7.7% 9.9% 11.0% 10.3% 16.8 2.1 0.9%

Roto Pumps Pumps 27.1 4.4 3.1 114.3 45.3 2 8.1 43.6% 1078.4% -28.5% 5.8% 24.4% 21.9% 12.7% 14.1 2.5 0.0%

S A I L Steel - Large 15907.2 721.5 4130.5 77.9 86.5 10 2.7 37.4% 191.2% -6.6% 29.7% 14.5% 13.8% -0.8% 29.2 0.9 0.0%

Sadhana Nitro Dyes - Intermediate 65.8 22.3 9.3 747.1 49.4 10 57.0 331.0% 3620.0% 28.1% 2.1% 52.8% 38.0% 12.4% 13.1 15.1 0.0%

SahyadriInds. Cement Products 111.8 15.2 9.6 236.2 136.8 10 29.6 19.1% 57.6% 58.9% 204.8% 26.7% 23.0% 24.3% 8.0 1.7 0.0%

Saint-Gob. Sekur hi 37.5 3.3 91.1 63.5 11.0 10 1.7 21.3% 82.2% -3.0% -12.8% 15.5% 18.1% 13.7% 37.9 5.8 0.0%

Samkrg Pistons Auto Ancillaries - Engine Parts 66.2 5.7 9.8 249.8 126.8 10 22.4 21.6% 42.2% 9.1% 42.5% 16.3% 15.0% 16.8% 11.2 2.0 2.0%

Sandur Manganese Mining / Minerals 204.5 52.3 8.8 1362.7 605.4 10 160.3 64.1% 182.1% 9.1% 32.8% 40.9% 33.6% 21.6% 8.5 2.3 0.1%

SatiaIndust. Paper - Large 180.1 18.7 10.0 613.8 222.6 10 76.9 27.7% 78.1% -8.0% -8.8% 19.3% 29.3% 14.1% 8.0 2.8 0.4%

SaveraIndustrie Hotels - Small 17.8 3.3 11.9 75.2 35.3 10 6.3 -3.8% 131.2% 2.9% 8050.0% 27.3% 7.9% 13.0% 11.9 2.1 0.0%

SelanExpl. Tech Oil Exploration / Allied Services 26.9 14.3 16.4 246.7 179.5 10 20.1 80.3% 320.4% 15.5% 91.3% 54.5% 43.3% 24.8% 12.3 1.4 2.0%

Seya Indus. Chemicals - Benzene-based 105.1 18.3 24.6 572.5 299.7 10 26.8 34.1% 114.9% 8.1% 9.2% 32.6% 31.8% 23.4% 21.3 1.9 0.2%

Sh. Jagdamba Pol Packaging - Polysacks 46.1 5.2 0.9 240.1 50.1 1 21.3 5.5% 75.1% -0.7% -12.0% 16.1% 17.5% 14.0% 11.3 4.8 0.0%

Shilp Gravures Metal - Copper 19.6 3.4 6.2 129.7 97.0 10 12.9 4.9% 34.4% 7.8% 137.8% 24.6% 19.4% 24.8% 10.1 1.3 1.2%

Shivalik Bimetal Electronics - Others 50.7 5.8 7.7 102.0 22.2 2 4.7 37.2% 51.7% 18.3% 2.3% 18.1% 19.9% 19.4% 21.8 4.6 0.6%

ShivalikRasayan* Pesticides / Agrochemicals 45.6 4.8 5.3 335.1 43.0 5 15.1 21.1% 37.8% 11.1% 21.3% 14.0% 14.5% 15.1% 22.1 7.8 0.0%

ShreyansInds. Paper - Large 123.9 9.5 13.8 160.3 111.8 10 24.3 16.3% 33.1% -6.7% -5.1% 14.3% 13.8% 11.7% 6.6 1.4 1.1%

Shriram Trans. Finance - Large 3732.5 572.9 226.9 1336.7 554.1 10 70.5 19.8% 24.5% 14.9% 977.3% 73.3% 44.7% 72.6% 18.9 2.4 0.8%

SMS Lifesciences Pharmaceuticals 59.9 3.1 3.0 406.3 292.4 10 28.3 44.8% 195.2% 10.6% 55.8% 10.7% 3.6% 8.1% 14.4 1.4 0.0%

SPL Inds. Textiles - Others 28.0 6.6 29.0 51.1 15.1 10 5.4 -51.3% 275.3% -11.3% 16.4% 26.6% 17.7% -5.8% 9.4 3.4 0.0%

SRF* Textiles - Manmade - Nylon 1717.8 133.8 57.4 1951.6 600.0 10 85.6 35.0% 28.9% 8.0% 8.0% 18.1% 17.5% 16.5% 22.8 3.3 0.6%

Steelcast Castings - Steel / Alloy 77.1 7.9 10.1 184.1 46.1 5 11.9 64.8% 101.5% 6.1% 13.5% 19.5% 18.2% 19.2% 15.5 4.0 0.7%

Sterlite Tech.* Cables - Telephone 876.9 128.5 80.2 365.3 26.7 2 10.6 22.5% 89.4% 3.6% 7.8% 27.8% 25.5% 21.8% 34.5 13.7 0.5%

StovecInds. Textile machinery 52.9 8.1 2.1 2713.9 611.0 10 124.7 -14.8% -3.2% 22.5% 2.7% 21.1% 26.0% 21.4% 21.8 4.4 1.3%

Sun Pharma.Inds.* Pharmaceuticals - Indian 7138.8 1111.1 239.9 621.2 82.4 1 16.8 15.8% 138.4% 6.4% -27.3% 22.5% 25.1% 2.4% 36.9 7.5 0.3%

Sun TV Network Entertainment 1120.4 409.1 197.0 773.5 117.7 5 31.7 42.5% 62.6% 56.3% 41.2% 65.6% 72.9% 57.0% 24.4 6.6 1.3%

Sundaram Finance Finance - Large 753.2 140.7 111.1 1585.1 357.4 10 50.1 22.5% 25.9% 7.6% 8.6% 80.4% 78.6% 76.5% 31.7 4.4 0.8%

Sunflag Iron Steel - Medium / Small 556.1 40.6 180.2 69.7 46.4 10 8.0 17.5% 59.4% -0.9% 11.2% 14.3% 10.5% 10.0% 8.7 1.5 0.0%

Supreme Inds.* Plastics - Sheets 1345.7 99.3 25.4 1201.3 136.4 2 35.6 15.8% 26.7% -8.5% -44.3% 13.8% 19.5% 13.7% 33.7 8.8 1.0%

Suven Life Scie. Pharmaceuticals - Indian 184.9 38.8 12.7 290.8 68.1 1 13.2 34.5% 31.3% -11.2% -37.9% 31.5% 43.8% 33.0% 22.1 4.3 0.0%

Suyog Telematics Transmisson Line Towers 24.2 7.0 10.2 279.9 68.6 10 20.5 25.4% 50.0% 8.1% 150.7% 48.5% 16.4% 46.0% 13.7 4.1 0.0%

Take Solutions* Computers - Software 467.5 54.2 14.6 196.8 52.0 1 12.2 31.9% 51.7% 3.0% 19.1% 19.9% 19.9% 18.7% 16.1 3.8 0.5%

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Co_Name Industry

Net Sales

Jun 18 PAT

Jun 18 Latest Equity CMP BV FV EPS

Growth in Sales

YoY

Growth in PAT

YoY

Growth in Sales

QoQ

Growth in PAT QoQ

OPM% w/o OI

- Jun 18

OPM% w/o OI - Mar

17

OPM% w/o OI –Jun17

P/E on

TTM EPS P/BV

Div Yield - Latest

TanfacInds. Aluminium Chemicals 55.8 13.1 10.0 271.0 12.7 10 20.4 56.6% 461.4% 16.8% 468.7% 27.5% 9.9% 13.9% 13.3 21.4 0.0%

Tata Sponge Iron* Steel - Sponge Iron 260.9 45.6 15.4 929.4 640.5 10 101.2 49.1% 49.0% 7.2% -2.4% 23.1% 25.3% 22.1% 9.2 1.5 2.2%

Tata Steel* Steel - Large 37434.0 2051.5 1144.9 589.4 544.9 10 74.9 27.0% 62.2% 4.9% -45.2% 16.4% 11.3% 14.7% 7.9 1.1 1.7%

TCPL Packaging Packaging - Others 178.4 5.0 9.1 441.7 237.2 10 24.3 28.9% 61.5% -1.0% 23.2% 13.1% 10.0% 14.8% 18.2 1.9 0.8%

TCS* Computers - Software 34261.0 7362.0 383.0 2065.6 198.2 1 71.3 15.8% 23.7% 6.8% 6.3% 26.5% 27.0% 25.1% 29.0 10.4 2.4%

Tejas Networks* Telecommunications 235.8 45.0 94.3 265.8 125.9 10 13.9 16.9% 120.3% 130.9% 54.9% 26.5% 10.5% 22.3% 19.1 2.1 0.0%

TranspekInds. Chemicals - Speciality 117.7 10.3 5.6 1544.8 442.1 10 58.9 61.0% 170.5% 11.3% 3.3% 14.3% 14.9% 8.7% 26.2 3.5 0.0%

Tube Investments* Cycles And Accessories 1408.3 60.3 18.8 282.9 64.7 1 9.5 19.6% 59.3% 23.1% 42.3% 9.8% 7.4% 8.6% 29.7 4.4 0.6%

Ultramarine Pig. Dyes And Pigments 76.4 12.5 5.8 257.8 175.0 2 15.9 20.1% 29.1% 5.0% 48.6% 20.5% 19.8% 23.0% 16.2 1.5 1.6%

Universal Cables Cables - Power - Large 315.0 17.4 34.7 216.9 97.0 10 15.0 24.7% 141.4% -16.4% -5.6% 13.6% 8.5% 9.5% 14.4 2.2 0.7%

V I P Inds.* Moulded Luggage 517.8 63.4 28.3 617.4 33.4 2 10.6 29.5% 54.6% 42.8% 80.7% 18.6% 15.0% 15.3% 58.5 18.5 0.5%

Varun Beverages* Food - Processing - Others 2059.1 306.8 182.6 811.2 144.1 10 15.8 26.1% 24.9% 88.1% 1454.2% 27.9% 15.8% 29.4% 51.4 5.6 0.0%

Vimta Labs Miscellaneous 54.6 6.5 4.4 280.2 68.8 2 9.9 41.1% 509.4% 3.6% 27.4% 26.0% 25.9% 15.4% 28.4 4.1 0.7%

Vindhya Telelink Cables - Telephone 404.7 33.3 11.8 1426.6 446.5 10 82.8 37.7% 78.6% -6.9% 25.0% 16.6% 13.2% 13.4% 17.2 3.2 0.7%

VisakaInds. Cement Products 345.7 30.3 15.9 590.2 280.6 10 46.6 11.8% 32.1% 33.2% 99.7% 15.4% 13.8% 15.1% 12.7 2.1 1.2%

Vivimed Labs.* Pharmaceuticals 358.5 28.5 16.5 68.0 64.2 2 10.0 12.8% 19.1% 25.5% 164.5% 19.2% 11.8% 20.9% 6.8 1.1 0.0%

West Coast Paper Paper - Large 459.7 84.0 13.2 344.6 127.0 2 38.4 18.9% 56.5% -6.9% 6.7% 25.9% 25.2% 21.4% 9.0 2.7 1.2%

WPIL Pumps 142.5 24.2 9.8 911.9 305.7 10 68.0 94.1% 354.5% -18.2% -28.0% 24.9% 25.4% 9.3% 13.4 3.0 0.4%

Yash Papers Paper - Medium / Small 59.9 4.6 35.2 65.8 20.8 10 4.0 28.3% 56.8% 14.8% 1145.9% 19.0% 20.3% 19.3% 16.4 3.2 0.0%

Z F Steering Auto Ancillaries - Gears 114.8 17.4 9.1 1057.5 417.4 10 61.0 19.6% 89.4% -2.4% 17.5% 19.6% 21.0% 19.2% 17.3 2.5 0.8%

Zee Entertainmen* Entertainment 1772.0 325.9 96.1 510.6 60.6 1 14.8 15.0% 31.3% 2.7% 41.3% 30.7% 35.3% 28.0% 34.6 8.4 0.6%

Zensar Tech.* Computers - Software 904.7 83.9 45.0 1566.1 278.4 10 62.7 22.8% 74.5% 11.0% 13.3% 12.9% 11.8% 10.2% 25.0 5.6 0.8% Note:

1) While compiling the above, we have excluded companies whose Q1FY19 sales is less than Rs.15 crore 2) * - Consolidated numbers; Book value is standalone even for companies with consolidated figures, CMP is as of 28 August, 2018, PAT is adjusted and not reported,

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