MO - India Strategy - Jan 2014

January 2014
India Strategy
India Inc PerforMeter
CAGR %
FY03-FY14
FY03-FY08
FY08-FY14
FY14-FY16E
PAT
17
26
10
15
Sensex
20
39
05
??
Happy New Year

Research Team (Rajat@MotilalOswal.com)
Contents
Section A: India Strategy - Happy New Year ............................................................................. A1-72
Section B: 3QFY14 Highlights & Ready Reckoner ..................................................................... B1-12
Section C: Sectors & Companies .............................................................................................. C1-209
1.
2.
Automobiles
Ashok Leyland
Bajaj Auto
Eicher Motors
Exide Industries
Hero MotoCorp
Mahindra & Mahindra
Maruti Suzuki India
Tata Motors
TVS Motor
2-14
6
7
8
9
10
11
12
13
14
Capital Goods
ABB
BHEL
Crompton Greaves
Cummins India
Havells India
Larsen & Toubro
Siemens
Thermax
15-26
19
20
21
22
23
24
25
26
3.
Cement
ACC
Ambuja Cement
Birla Corporation
Grasim Industries
India Cements
Jaiprakash Associates
Shree Cement
UltraTech Cement
27-38
31
32
33
34
35
36
37
38
4.
Consumer
Asian Paints
Britannia Industries
Colgate Palmolive
Dabur India
GSK Consumer
Godrej Consumer Products
Hindustan Unilever
ITC
Marico
Nestle India
Pidilite Industries
Radico Khaitan
United Spirits
39-54
42
43
44
45
46
47
48
49
50
51
52
53
54
5a. Financials - Banks

Axis Bank
Bank of Baroda
Bank of India
Canara Bank
Federal Bank
HDFC Bank
ICICI Bank
Indian Bank
IndusInd Bank
ING Vysya Bank
Kotak Mahindra Bank
Oriental Bank
55-75
60
61
62
63
64
65
66
67
68
69
70
71
Punjab National Bank

State Bank of India
Union Bank
Yes Bank
5b. Financials - NBFC
Bajaj Finance
HDFC
IDFC
LIC Housing Finance
M & M Financial Services
Power Finance Corporation
Rural Electricfication
Shriram Transport
6.
7.
8.
9.
Healthcare
Biocon
Cadila Healthcare
Cipla
Divis Laboratories
Dr Reddys Labs.
GSK Pharma
Glenmark Pharma
IPCA Laboratories
Lupin
Ranbaxy Labs.
Sanofi India
Sun Pharmaceuticals
Torrent Pharma
72
73
74
75
76-85
78
79
80
81
82
83
84
85
86-104
92
93
94
95
96
97
98
99
100
101
102
103
104
Media
D B Corp
Dish TV
HT Media
Jagran Prakashan
PVR
Sun TV Network
Zee Entertainment
105-115
109
110
111
112
113
114
115
Metals
Hindalco
Hindustan Zinc
Jindal Steel & Power
JSW Steel
Nalco
NMDC
Sesa Goa
SAIL
Tata Steel
116-128
120
121
122
123
124
125
126
127
128
Oil & Gas

BPCL
Cairn India
GAIL
Gujarat State Petronet
HPCL
IOC
Indraprastha Gas
MRPL
129-144
133
134
135
136
137
138
139
140
Oil India
ONGC
Petronet LNG
Reliance Industries
10. Real Estate
DLF
Godrej Properties
Indiabulls Real Estate
Jaypee Infratech
Mahindra Lifespaces
Oberoi Realty
Phoenix Mills
Prestige Estate Projects
Sobha Developers
145-158
150
151
152
153
154
155
156
157
158
11. Retail
Future Retail
Jubilant Food
Shoppers Stop
Titan Company
159-165
162
163
164
165
12. Technology
Cognizant Technology
HCL Technologies
Hexaware Technologies
Infosys
KPIT Technologies
Mindtree
MphasiS
Persistent Systems
TCS
Tech Mahindra
Wipro
166-180
170
171
172
173
174
175
176
177
178
179
180
13. Telecom
Bharti Airtel
Bharti Infratel
Idea Cellular
Reliance Communication
181-189
186
187
188
189
14. Utilities
190-203
CESC
194
Coal India
195
Jaiprakash Power Ventures
196
JSW Energy
197
NHPC
198
NTPC
199
Power Grid Corp.
200
PTC India
201
Reliance Infrastructure
202
Tata Power
203
15. Others
Bata India
Castrol India
Just Dial
Sintex Industries
UPL
V-Guard Industries
Note: All stock prices and indices for Section C as on 27 December 2013, unless otherwise stated
Investors are advised to refer through disclosures made at the end of the Research Report.
141
142
143
144
204-209
204
205
206
207
208
209
2013 India At A Glance

February
in the Private Sector
specialties business to Mylan for USD1.6b

spectrum auctions
S
E
N
S
E
X
19,895
+ 2.4%
Coal Price Pooling approval implying that Coal
India is now liable to supply 68% of total coal

requirement for the identified projects
Afzal Guru executed for 2001 parliament attack
S
E
N
S
E
X
19,504
+ 3.5%
2011; announces OMO of INR100b

Apr-13 WPI at 41-month low of 4.9%
Congress returns to power in Karnataka
Wockhardt swallows the bitter pill of FDA import alert
RBI bans jewellery import through the consignment
route accounting for 70% of imports
Scandal-hit Railway Minister Pawan Kumar Bansal and
Law Minister Ashwani Kumar quit
S
E
N
S
E
X
19,346
0.3%
(17-year old alliance)

with post-issue market cap of ~INR38b
Narayana Murthy returns to Infosys as Executive
Chairman
CCEA approved increase in gas prices from April 1, 2014 as
per Rangarajan committee formula
S
E
N
S
E
X
19,760
+1.3%
Current account deficit at record 4.8% of GDP for FY13

L.K. Advani quits all party posts, reverses decision next day
Approval of pass through of increased cost of imported coal
window for FCNR(B) and overseas bank borrowing
S
E
N
S
E
X
18,620
3.8%
S
E
N
S
E
X
19,380
+4.1%
BJP sweeps in 3 out of 5 state elections (Chattisgarh,
OMCs dollar demand back to the market
21,165
+ 9.2%
Corporates and over 3000+ investor meetings

Modi crowned as BJP's prime ministerial candidate
RBI cuts MSF by 75bp, raises repo by 25bp
1QFY14 BoP reported at 4.9% of GDP
Tata Group and Singapore Airlines enters into JV
JPA concludes its cement deal to Ultratech
US FDA imposes import alert on Ranbaxy
Relaxations in Branch Authorization Policy
December
Sachin Tendulkar bids farewell from all forms of

N
S
E
X
19,396
1.8%
9th Annual India General Conference covering close to 100
estimates FY14 CAD at USD56b
cricket with tears and cheers

Highest ever voter turnout for the four state elections
Cairn India announces buy back of shares
N
S
E
X
New RBI chief Raghuram Rajan assumes office, opens swap
Government/RBI indicates return of majority of
S
E
September
2QFY14 GDP growth recovers to 4.8%

CAD corrects to 1.2% of GDP
RBI issues statement to stabilize forex volatility,
18,836
0.1%
Just Dial listed, most successful IPO of the year,
November
RBI ups repo rate, cuts MSF rate by 25bp
N
S
E
X
JD(U) splits away from NDA ahead of election
India hikes bullion import duty to a record 10%

Rupee reaches its all-time low of 69, forex reserves drops to
USD275b
RBI introduced forex swap window for OMCs, lowers limit
for Overseas Direct Investment and outward remittances
RBI announced auction INR220b of cash management bill
every Monday, conducts OMO auction of INR160b
Rainfall 14% above average
Lok Sabha passes Land Acquisition Bill
US jobless claims at a near 6 year low
S
E
June
August
October
each, restores corridor back to 100bp
Sept 13 sees lowest trade deficit of 30-month
at USD7b
Onion prices hit INR100/kg
Ms. Arundhati Bhattacharya joins as CMD of
State Bank of India
Appointment of Janet Yellen as next Fed Chairman
Rahul Gandhi forces government to drop convicted
politicians decree
18,862
5.2%
Ordinance passed for Food Security Programme approved by
N
S
E
X
GDP at 4.8% for Q4FY13

RBI trimmed the repo rate to 7.25 %, lowest since May
July
S
E
tion on ICICI, Axis and HDFC Bank exposing money

laundering modus operandi
BRICS agree to USD100b reserve fund to combat
currency crisis
Second phase of digitisation deadline ends for 38
cities
May
SC gave the clearance for resumption of
the Union Cabinet

AP being split into Telangana; 29th Indian
State to be given a go-ahead.
RBI hikes MSF/Bank Rate by 2% to 10.25%,
limits LAF support to 1% of NDTL and
announces OMO sale of INR120b
India relaxes FDI rules in 13 sectors
including telecom, single brand retail and oil and gas
Unilever hikes stake in HUL by 14.8% to 67.3% for INR192b
DMK pulled out of the ruling UPA coalition

COBRAPOST came out with a revealing sting opera-
No applications received for bidding in Mar'13
April
mining operations for A and B category
mines in Karnataka
Billionaire Ambani brothers announce
sharing a fibre optic network for their
rival telecoms companies
Ranbaxy pleads guilty in US court, agrees
to pay USD500m in penalty
IMD predicts normal monsoon for 2013
OMO of INR100b
First draft guidelines of US Immigration Bill

Strides Arcolab enters into agreement to sell its
Q1
RBI releases Guidelines for Licensing of New Banks
Q2
month, deregulate bulk diesel sales and caps

subsidized LPG cylinders at 9/household
Government sets up Cabinet Committee on
Investment (CCI) for fast-tracking approvals
RBI cuts repo rate by 25bp to 7.75%
Dec-12 inflation at 36 month low at 7.2%
GAAR norms deferred to April 2016
Mobile call prices rise for the first time in
3 years
Import tax on gold raised by 2pp to 6%
March
3QFY13 CAD/GDP spikes to record high of 6.7%
RBI expectedly cut repo rates by 25bp, announces
Q3
January
Govt to raise prices of diesel by INR0.5/ltr/
S
E
N
S
E
X
20,792
1.8%
Madhya Pradesh and Rajasthan); AAP forms govt in Delhi.

Sensex touches life-time high
Forex reserves back to USD290+b levels
RBI keeps rates unchanged vs estimates of a hike
WPI hits 14 month high of 7.5%
Mr V Balakrishnan resigns from Infosys
Britain's Tesco will be the first foreign supermarket
to venture into India's USD500b retail sector
Reliance JIO makes infrastructure sharing arrangement
with Bharti
Q4
Sensex
Close
(MoM %)
S
E
N
S
E
X
21,171
+1.8%
2014 Events Calendar
3QFY14 GDP
3QFY14 BoP (expected to remain moderate at less than 2%

of GDP)
Interim Budget session of Parliament
MOBIZ - Insights from domain

experts across businesses
April
Jan-Mar 14
Preview
&
India
Strategy
FY14 Monetary Policy (expected to cut rates

by 25bp)
General elections
FY14 GDP (expected at 4.5%)
FY14 BoP (expected at 2.3% of GDP)
General elections
State elections for Andhra Pradesh and Sikkim
2QFY15 Monetary Policy (RBI expected

to continue with its dovish stance)
1QFY15 GDP
1QFY15 BoP
1QFY15 Monetary Policy review (expected to

hold rates)
State elections for Odisha
2014 FIFA World Cup
September
2014 FIFA World Cup
October
Jul-Sep 14
Preview
&
India
Strategy
June
August
2QFY15 Monetary Policy review
Parliament Monsoon session
November
3QFY15 Monetary Policy
2QFY15 GDP
State elections for Maharashtra, Jammu &

Kashmir and Arunachal Pradesh
2QFY15 BOP
Motilal Oswal
EUREKA INDIA
Conference, 2014
4QFY14 Monetary Policy review (expected to cut rates by

25bp)
May
July
Apr-Jun 14
Preview
&
India
Strategy
Q1
Advance estimate of FY14 GDP

(expected at 4.5%)
Q2
3QFY14 Monetary Policy review

(RBI expected to keep rates
stable)
March
Motilal Oswal
10th Annual Global
Investor Conference
Q3
February
December
Parliament Winter session
Q4
January
India Strategy | Happy New Year
India Strategy
BSE Sensex: 21,194
S&P CNX: 6,314
2014: Happy New Year!!

Earnings recovery | Elections outcome | Monetary easing
2013 MARKETS: Indian equities deliver 9% return | Top performers are

beneficiaries of INR weakness; Expect 2014 to be a year of economic
recovery and positive returns
Indian markets ended 2013 with returns of 9%, with the entire gains clocked in
4QCY13. However, sharp currency depreciation led to a negative 3% Sensex returns
in USD terms. BSE Midcap Index delivered negative 6% returns (INR).
The top performing sectors in 2013 were Technology (+60%), followed by Telecom
(26%) and Healthcare (+23%). Real Estate (-32%), PSU Banks (-26%) and Cement (14%) were the worst performing sectors.
Average market volumes in 2013 were higher than in 2012. However, the share of
F&O continued to move up to an all-time high of 92% (+200bps).
FIIs invested another USD20b in 2013, making it the third biggest year of inflows.
On the other hand, DIIs withdrew a record USD13b during the year.
Valuations of Indian equities remain attractive with Market Cap to GDP at 62%,
below long term averages. The Sensex PE at 14x is also below long term averages,
while the RoEs at 16% are at their bottom.
We expect 2014 to see improvement in growth rates and moderation in inflation.
This should lead to another year of positive returns for Indian equities. Our top
picks are: HDFC Bank / ICICI Bank, Infosys / Tech Mahindra, Bharti, Tata Motors /
Hero Motocorp, Lupin, ACC, BPCL, Hindalco. Our other bets are LIC Housing, Bank
of Baroda, Divis Lab, Eicher Motors, Bata, Shree Cement, SUN TV.
Profit Pool: Oil share halves, Technology doubles; Public sector dwarfed |
Profit Pool analysis FY03-14: Identifying themes for next growth cycle
Over FY03-14, India Inc PAT expanded by 5.6x at a CAGR of 17%. In Phase 1 (FY0308) PAT CAGR was 26% and in Phase 2 (FY08-14) only 10%. Our analysis of the FY0314 profit pool leads us to the following key trends #1 PUBLIC v/s PRIVATE SECTOR: The ultimate case study of value migration
#2 CYCLICALS: Change in PAT orbit
#3 OIL & GAS: PAT share halves to 20% in best era of crude prices
#4 TECHNOLOGY: PAT share doubles to 13%
#5 FINANCIALS: Private sector cashes in on public banks slip
#6 HEALTHCARE: Perfect prescription for high-immunity profits!
#7 CONSUMER: Only a foul-weather friend? Not quite
#8 TELECOM: How a non-cyclical sector can behave like a cyclical
Based on the above, expect some of the following potential themes to play out
going forward #1 FY14-16 PAT GROWTH: Expect reversion to mean of 15%
#2 PRIVATE BANKS, TECHNOLOGY: Two large profit pools which can only get bigger
and better; creating several growth opportunities
#3 OIL & GAS: Will reforms pump profits back to the sector?
January 2014
A1
#4 CEMENT, PUBLIC SECTOR BANKS: Early-bird cyclical turnarounds?

#5 TELECOM: Data should help the sector regain its lost voice
Economy: RBIs focus to shift to growth as Inflation, Currency stabilizes

Crisis causes its own conquest. India faced a crisis of the eerie combination of low
growth, high inflation and external instability. Since Dr Rajan assumed the role of
RBI Governor, the approach on various policy measures have seen a significant
shift. This has brought in the much needed stability in aspects of policy rates and
INR. During 1HCY14, as the focus shifts to Elections, this positive approach by RBI
will be critical to address a volatile domestic and global macro environment.
We see a fall in inflation in the coming months to drive a shift in debate to that of
a rate cut sometime in Mar-14. While this may seem to be an out of consensus
view, several components of Inflation can surprise positively led by food inflation,
the way they did negatively. We see RBI easing rates the moment a change in the
direction of inflation is established.
Recent months of trade data show that the big concern of CAD is now surely behind
us. Growth prospects in West will aid exports in 2014, while imports will remain
muted due to domestic slowdown and commodity prices. RBI has used this phase
to build Forex Reserves closer to USD300b. We see some of the restrictions on
gold imports to ease in 1QCY14.
Refer to the Election update

released on December 2013
Elections: Alternate climax or anti-climax in the making | AAP forming

government in Delhi spices up the national politics landscape
The recent assembly elections results clearly indicated a strong anti-Congress

wave bringing out decisive voting against corruption, inflation, lack of policy
reforms, etc.
The decisive mandate saw BJP, riding on the NaMo wave, forming government in
3 out of 5 states with record number of votes. AAP was the BIGGEST SURPRISE,
which formed government in Delhi, with outside support from Congress. AAPs
40% seat share and 30% vote share indicates that a fresh alternative can no longer
be ruled out.
Till recently, all the political pundits were betting for BJP as the majority party in
the upcoming 2014 Lok Sabha elections riding on the dual wave of anti-Congress
and NaMo. Indian markets were also riding high, driven by the Modi bandwagon,
who stands as a symbol of pro-development driven by his success in Gujarat.
However, AAPs win in Delhi has queered the national pitch. The focus of AAPs
early policy action is socialistic, rather than an anti-corruption drive that was
expected from AAP. Many high profile personalities including industrialists have
voluntarily joined the party. Whether AAP, aided by the new joinees, can showcase
their policy action prowess on growth and development front remains to be seen!
Market view: With four months remaining for Lok Sabha elections, a lot of action
is expected on the political front which is likely to keep markets volatile and the
environment uncertain. A churn is taking place in India and the 2014 mandate will
reflect this manthan!
FED (TAP)ER: FII debt investors pre-empt but equity investors stay put |
Private Financials, Technology, Automobiles witness highest FII flows
January 2014
The US Fed recently announced the first round of tapering of its stimulus package
from January 2014, after a period of over 5 years of easing. During this period,
A2
India received USD109b, in aggregate, USD91b from equity and USD18b from debt.
The impact of tapering is clearly visible on the debt front with ~USD12b outflows
in the last seven months, since the talks of Fed taper first started. Accordingly, out
of the total debt flows of USD20b received since Nov-08, 40% of the cumulative
debt flows (USD8b) have been withdrawn by investors in CY13 alone.
Equity flows, on the other hand, continue unabated with CY13 receiving USD20b
(3rd highest equity flow ever). With the Fed taper, India could see see moderation
in the flows. This will particularly impact the sectors / stocks where the FII holding
is high.
In this section, we present our analysis on: (i) the beneficiary sectors/stocks which
saw maximum FII inflows during the QE phase, (ii) sectors/stocks where FIIs are
overweight or underweight relative to MSCI ETF. As and when the markets gets
worried on the impact of FII flows, these stocks are likely to be impacted.
3QFY14 Preview: Theme similar to 2Q - Globals do, locals undo | 2Q earnings

rebound sustained; Aggregate PAT up 10%; Sensex PAT up 13%
We expect MOSL Universe of 143 companies (ex RMs) to report aggregate 3QFY14
PAT growth of 10% YoY, sustaining the earnings rebound in 2QFY14 (+8% YoY v/s
estimated 3% YoY). 4QFY14 PAT growth is expected to be an even higher 13% YoY.
As in 2Q, expect global-facing sectors like Technology, Healthcare and Metals to
outperform their domestic-facing counterparts thanks to 15% YoY depreciation of
the INR vis--vis the USD.
Expect Sensex 3QFY14 PAT to grow 13% YoY.
Within Sensex, top 5 PAT growth companies are: Tata Steel (loss to profit), Bharti
(+299% YoY), Tata Motors (+89%), TCS (+48%) and Sun Pharma (+44%). Top 5 PAT degrowth companies: BHEL (-56% YoY), State Bank (-33%), Sesa Sterlite (-21%), Tata
Power (-10%) and Coal India (-8%).
3QFY14 performance of MOSL Universe by sector: Globals do, locals undo

SECTOR
(no. of companies)
High growth sectors
Telecom (4)
Auto (9)
Technology (10)
Metals (9)
Health Care (13)
Media (7)
NBFC (8)
Med/Low growth sectors
Private Banks (8)
Consumer (13)
PAT de-growth sectors
Retail (4)
Oil Excl. RMs (9)
Utilities (10)
Capital Goods (8)
Real Estate (9)
PSU Banks (8)
Cement (8)
Others (6)
MOSL Excl. RMs (143)
Sensex (30)
January 2014
Dec-13
Sales
YoY %
3,382
368
1,005
517
1,127
233
41
90
491
153
338
3,332
67
1,780
601
364
49
293
176
62
7,266
5,003
17
12
16
30
13
22
18
19
14
19
12
8
-6
10
8
1
18
12
-2
14
12
13
EBITDA
Dec-13
YoY %
774
122
139
143
219
53
13
85
205
132
73
703
6
273
161
34
17
185
26
11
1,692
1,071
29
23
39
37
28
27
15
20
16
18
14
-1
-1
1
4
-15
42
-3
-24
17
13
14
PAT
Dec-13
YoY %
372
23
65
106
82
35
6
55
129
78
51
355
3
166
91
21
6
58
10
6
861
563
37
163
42
39
36
30
22
16
14
14
13
-10
0
0
-2
-23
-27
-29
-38
22
10
13
PAT
Share %
Delta
Share %
43
3
8
12
10
4
1
6
15
9
6
41
0
19
11
2
1
7
1
1
100
131
19
25
39
28
10
1
10
20
12
8
-53
0
0
-2
-8
-3
-31
-8
1
100
EBITDA Margins
Dec-13
YoY bp
22.9
33.1
13.8
27.7
19.4
22.7
30.6
94.1
41.7
86.4
21.5
21.1
9.4
15.4
26.8
9.3
35.1
63.2
14.5
17.5
23.3
21.4
217
306
230
144
217
99
-85
96
97
-68
46
-188
51
-142
-112
-178
587
-959
-421
53
19
27
A3
FY14/FY15 ESTIMATES: Downgrades take a breather as exports fuel growth |

Sensex FY14 EPS upgraded to 11% growth; Expect FY15 growth of 15%
MOSL Aggregate PAT to grow 7% in FY14; expect rebound in FY15 to 16%. Sales
growth of 12% in FY14 will see some moderation to 10% in FY15.
Sensex EPS to grow by 11% in FY14 to 1,317 and further accelerate to 15% in FY15 to
1,518. Downgrades to Sensex EPS have taken a breather. In fact, strong earnings
from export driven businesses (benefitting from weak INR) have led to upgrades
of 2% in FY14 and 3% in FY15 EPS.
For 2HFY14, the prominent upgrades have been in Tata Motors, Tata Steel, ICICI
Bank, Maruti, TCS. The stocks to see top downgrades are Sesa Sterlite, BHEL, SBI,
Cipla, Coal India.
Our early estimates suggest the growth of 15% may continue into FY16 as well.
MOSL Universe FY14/FY15 estimates: Expect 16% PAT growth in FY15

Sales Gr./
EBIDTA
Margin
EBIDTA
PAT
PAT Gr. /
PAT
Sales
CAGR
EBIDTA Margin
Delta
CAGR (INR
CAGR
delta
Sector
(INR b)
(%)
(INR b)
(%)
(bp)
(%)
b)
(%)
FY13-15
(No of Companies)
FY13 FY14E FY15E FY13-15 FY13 FY13 FY14E FY15E (FY13-15) FY13 FY14E FY15E FY13-15 shr (%)
High PAT CAGR (>20%)
2,752
8
12
10
744 27.0
-7 151
13 204
3
46
22
12
Telecom (4)
1,306
11
10
11
397 30.4
274 144
18
45
82
65
73
11
Cement (13)
1,108
0
14
7
235 21.2
-474 200
0 111
-33
38
-4
-1
Real Estate (9)
195
18
13
16
71 36.5
17 147
18
30
1
29
14
1
Media (8)
143
17
14
16
41 28.7
85
61
19
19
25
25
25
1
Medium PAT CAGR (15-20%) 10,028
16
14
15 3,159 31.5
5
13
16 1,788
11
16
14
62
Retail (3)
137
15
21
18
14 10.1
-42
31
17
9
6
19
12
0
Consumer (13)
1,190
11
15
13
242 20.4
56
23
15 166
15
19
17
7
Health Care (13)
791
19
14
16
194 24.5
-99 192
19 110
28
18
23
7
Financials (31)
2,197
14
15
15 1,735 79.0
-323
11
12 904
-2
16
6
14
PSU Banks (12)
1,359
11
14
12
997 73.4
-657
2
7 432
-23
18
-5
-5
Private Banks (10)
541
19
17
18
452 83.5
238
-3
20 278
17
16
16
12
NBFC (9)
296
22
15
18
286 96.4
-149
4
17 193
16
13
15
7
Auto (9)
3,773
13
15
14
484 12.8
165
2
21 228
25
16
20
12
Technology (10)
1,940
27
12
19
489 25.2
102
-31
21 372
30
15
22
22
Low PAT CAGR (<15%)
15,212
9
6
8 2,717 17.9
-47 102
9 1,461
3
11
7
25
Metals (9)
4,205
7
9
8
792 18.8
61
57
11 308
6
12
9
7
Oil Ex. RMs (10)
7,416
14
4
9 1,132 15.3
-100 141
10 642
7
12
9
15
Utilities (10)
2,015
6
12
9
603 29.9
80
11
11 377
4
11
8
7
Capital Goods (8)
1,576
-1
3
1
189 12.0
-201
-20
-9 134
-26
1
-13
-4
Others (6)
210
12
11
12
35 16.8
66
70
16
20
11
18
14
1
28,202
12
10
11 6,654 23.6
-6
96
13 3,473
7
16
11
100
Sensex (30)
9,633
6
9
8 1,875 19.5
130 100
14 1,011
9
15
12
NA
Nifty (50)
10,889
13
9
11 2,170 19.9
97 103
17 1,182
12
15
14
NA
STRATEGY:
Navin Agarwal (Navin@MotilalOswal.com) | Rajat Rajgarhia (Rajat@MotilalOswal.com)
STRATEGY:
Ashish Gupta | ECONOMIST: Dipankar Mitra
Sources of exhibits in this section include RBI, CMIE, Bloomberg, IMF, UN, Rogers International, Industry, Companies, and MOSL database
January 2014
A4
India Strategy | Happ y Ne w Year
2013 MARKETS: Indian equities deliver 9% return, driven

by a 4QCY13 rally
Top performers are beneficiaries of INR weakness; FII flows strong at USD20b
Indian markets ended 2013 with returns of 9%, where the entire gains were made
in 4QCY13. However, a sharp currency depreciation led to a -3% Sensex returns in

USD terms. BSE Midcap Index delivered -6% return (INR).
The top performing sector in 2013 was Technology (+60%), followed by Telecom
(26%) and Healthcare (+23%). Real Estate (-32%), PSU Banks (-26%) and Cement (14%) were top negative performing sectors.
Best 6 Index stocks that performed were beneficiaries of rupee weakness. TCS
was the best performing Sensex stock, with 72% return. Both Sun Pharma and
Infosys delivered returns of +50%. SBI and BHEL were the top underperformers,
with negative returns of 26% and 23%. Another PSU, Coal India gave negative
returns of 18%.
Average market volumes in 2013 were higher than in 2012; moreover, the
composition of F&O moved up by 200bps to an all-time high of 92%.
FIIs invested another USD20b in 2013, making it the third highest year of inflows.
On the other hand, DIIs withdrew a record USD13b during the year.
Valuations of Indian equities remain attractive with Market Cap to GDP at 62%.
The Sensex PE at 14x is below long term averages, while the RoEs at 16% are at
their bottom.
2013: Sensex positive return led by last quarter

2013
Positive return years: 25 (74%)
2012
26
Negative return years: 9 (26%)
2010
17
2004
13
2002
2011
-25
1997
19
2001
-18
1994
17
2007
47
2000
-21
1993
29
2006
47
1998
-16
1989
17
2005
42
2009
81
1996
-1
1984
1992
37
2003
73
1995
-21
1983
1990
35
1999
64
1987
-16
1982
1988
51
1991
82
2008
-52
1986
-1
1980
25
1981
54
1985
94
Year
Year
Year
Year
Year
-30 to -60
-30 to 0
0 to 30
Percentage Total Return Range
Note: Return is CY Ending.
January 2014
30 to 60
>60
A5
After a positive return of 26% in CY12,

Markets delivered 9% return in CY13.
GR
ar CA
10 Ye
Indian markets delivered 9% return in 4QCY13

after it remained flat in 3QCY13 (QoQ,%)
of 13
.7%
CY13 world equity returns - Local Currency (%)
CY13 world equity returns - In USD (%)
Sectoral performance for CY13 (%)
Sectoral performance for CY07-13 CAGR (%)
January 2014
A6
Best & worst performers in Sensex for CY13 (%)
Best & worst performers in Sensex for CY07-13 CAGR (%)
Monthly sectoral performance relative to Nifty

Sector
Auto
Banks - PSU
Banks - Pvt
Capital Goods
Cement
Consumer
Health Care
Media
Metal
Mid-Cap (BSE)
NBFC
Oil
Real Estate
Retail
Technology
Telec o m
Utilities
Nifty Abs Chg (%)
Sensex Abs Chg (%)
January 2014
Relative to Nifty MoM Performance (%)

Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13
-6
-1
-1
-6
-6
-2
-4
4
-6
-4
-5
8
4
-4
10
6
-4
2
2
1
-9
0
-7
3
1
3
-2
-9
-4
-1
-2
-5
-5
11
1
-5
-6
-5
-4
-1
0
-2
-5
5
3
-3
-3
-2
2
-4
-11
-3
2
-8
-5
0
0
5
4
6
3
0
6
4
4
-6
-1
1
0
2
0
-21
11
3
4
4
1
-9
1
-4
-3
2
1
-3
-3
0
2
-2
-12
6
5
-1
-1
1
1
-2
-6
-4
-1
2
-2
2
1
-6
-4
-3
5
-8
-22
6
4
-5
-2
-2
0
-11
-11
-8
-3
7
4
8
-10
-5
-11
-2
-11
17
21
20
-6
-2
0
1
-11
-2
-9
-9
-2
4
-1
18
0
-4
0
-6
-10
12
-7
-3
-5
-4
Sep-13 Oct-13 Nov-13

3
2
1
4
12
3
1
-5
3
1
4
-4
-5
-1
-7
3
5
5
4
0
6
9
9
-4
-10
-8
1
0
-1
1
-1
5
4
-2
0
-4
10
9
4
3
-1
9
-1
-2
1
-4
5
6
2
-1
3
-11
1
-5
4
-2
-2
CY13
Dec-13 Chg (%)
-3
0
0
2
-5
-2
3
3
4
4
-2
0
4
-1
6
-4
2
2
2
1
-33
-5
-12
-21
4
16
-1
-17
-12
-15
-3
-39
-36
53
19
-21
7
9
A7
Global Ranking: India v/s others

Country
Mkt Cap
(USD t) Dec-03
United States
Japan
United Kingdom
Hong Kong
China
France
Canada
Germany
Switzerland
Australia
South Korea
India
Brazil
Taiw a n
Spain
Russia
22.3
4.6
4.0
3.5
3.4
2.1
2.1
2.0
1.5
1.3
1.2
1.1
1.0
0.9
0.8
0.8
1
2
3
7
11
4
6
5
8
10
15
17
18
13
12
19
Mkt Cap Rank

Dec-07 Dec-08
1
2
4
6
3
5
9
7
12
10
14
8
11
18
15
16
Chg in Rank
CY14/FY15E
Dec-13 2003-13 P/E (x) P/B (x) RoE (%)
1
2
3
6
4
5
8
7
9
11
16
12
14
17
13
20
Mkt Cap / Total Volumes (Cash Holding Period Days)
Indian Market Volumes
Trend in net FII Investment (USD b)

Annual Trend
Quarterly Trend
January 2014
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
0
0
0
3
6
-2
-1
-3
-1
0
4
5
5
-1
-3
3
15.2
18.4
12.8
10.3
8.2
13.0
14.6
12.9
14.6
14.7
9.5
13.9
10.4
14.8
14.9
4.5
2.4
1.6
1.7
1.3
1.1
1.3
1.7
1.6
2.4
1.9
1.0
2.3
1.0
1.6
1.3
0.6
15.5
8.9
13.5
12.4
13.8
10.2
11.9
12.3
16.6
13.1
10.9
16.4
9.1
11.0
9.0
12.8
A8
Trend in net DII investment (USD b)

Annual Trend
Quarterly Trend
12-month forward Sensex P/E (x)
12-month forward Sensex P/B (x)
Sensex RoE (%)
Indian market cap to GDP (%)
January 2014
A9
PROFIT POOL Oil share halves, Technology doubles; Public sector dwarfed
Profit Pool analysis FY03-14: Identifying themes for next growth cycle
Over FY03-14, India Inc PAT expanded by 5.6x at a CAGR of 17%. In Phase 1 (FY03-08) PAT
CAGR was 26% and in Phase 2 (FY08-14) only 10%. Our analysis of the FY03-14 profit pool
leads us to the following key trends #1 PUBLIC v/s PRIVATE SECTOR: The ultimate case study of value migration
#5 FINANCIALS: Private sector cashes in on public banks' slip
Based on the above, expect some of the following potential themes to play out going
forward #1 FY14-16 PAT GROWTH: Expect reversion to mean of 15%
#2 PRIVATE BANKS, TECHNOLOGY: Two large profit pools which can only get bigger and
better; creating several growth opportunities
Backdrop & Summary findings

In FY14, India's GDP growth is expected to be 4.5%. This virtually takes us back 11 years
to FY03 when India's GDP growth was 4%. We believe GDP growth has bottomed out
with early estimates for FY15 placed at over 5%. So, it is appropriate that we analyze
India Inc's profit pool trends over the past 11 years, and also derive some potential
themes going forward.
Our key findings and conclusions may be summarized as under PAT expands to 5.6x in 11 years: Over FY03-14, India Inc PAT expanded by 5.6x at a
CAGR of 17%. There are two distinct growth phases: Phase 1 (FY03-08) which saw
PAT CAGR of 26% on the back of average real GDP growth of 8.7%; and Phase 2
(FY08-14) when GDP growth slipped to 6.7%, and PAT CAGR to only 10%. Stock
market return CAGR was 39% in Phase 1 and 5% in Phase 2. This translates to fullcycle (FY03-14) return CAGR of 20%, broadly in line with PAT CAGR of 17%.
Public sector dwarfed: The Indian public sector companies have been dwarfed by
their private sector counterparts. The PAT share between the two has virtually
reversed over the 11 years - from 63:37 in favor of public sector in FY03 to 64:36 in
favor of the private sector in FY14.
Cyclicals change their PAT orbit: Most cyclical sectors made hay during the global
sunshine of FY03-08 e.g. PAT CAGR of 143% for Real Estate, 106% for Cement, 62%
for Metals and 42% for Capital Goods. Despite some pull-back in growth rates in
the FY08-14 phase, full-cycle earnings growth of most cyclicals is higher than
corporate sector average of 17%.
January 2014
A10
Oil & Gas PAT share halves to 20% in best era of crude prices: FY03-14 saw crude
prices more than quadruple to USD110 levels. And yet, over this 11-year period,
share of Oil & Gas in corporate sector PAT halved from 40% in FY03 to 20% in FY14.
Technology PAT share doubles to 13%: Riding India's global competitive advantage,
Technology sector PAT share has more than doubled from 6% in FY03 to 13% in
FY14, the third largest profit share after Financials and Oil & Gas.
Expect mean reversion in earnings growth; bounce-back in beaten-down sectors:
Our initial estimates suggest FY14-16 PAT CAGR of 15%. Some beaten-down sectors
are likely to bounce back e.g. Oil & Gas on the back of near-mandatory reforms,
Capital Goods on likely revival in investment cycle in 2HFY15, and Telecom on the
back of lower competitive intensity.
We discuss below the above points in detail in the subsequent pages.

FY03-14 India Inc PAT performance: Sector-wise highlights
SECTOR
(No. of companies)
Auto (9)
Capital Goods (8)
Cement (13)
Consumer (13)
Financials (31)
PSU Banks (12)
Private Banks (10)
NBFC (9)
Healthcare (13)
Media (8)
Metals (9)
Oil & Gas (13)
Real Estate (9)
Retail (3)
Technology (10)
Telecom (4)
Utilities (10)
Others (6)
MOSL (159)
FY14 Profit Pool share (%)
January 2014
PAT (INR B)
FY03
FY08 FY14E
20
12
2
48
157
102
26
29
21
3
27
268
1
0
39
-4
72
2
669
80
69
70
73
366
217
91
58
48
6
303
540
90
2
152
133
175
7
2,115
283
99
50
191
882
332
325
224
141
24
325
756
30
10
482
81
394
22
3,770
PAT CAGR (%)

FY03
FY03
FY08
-14
-08
-14
27
21
35
13
17
11
26
20
19
21
25
10
35
45
26
L to P
17
22
17
32
42
106
9
18
16
29
15
18
17
62
15
143
61
31
L to P
19
23
26
23
6
-5
17
16
7
24
25
20
25
1
6
-17
32
21
-8
14
21
10
Avg RoE (%)

FY03
FY03
FY08
-14
-08
-14
26
21
16
35
18
18
16
20
21
15
23
18
14
25
31
10
14
20
19
27
21
18
35
19
19
18
20
23
13
30
22
20
21
34
11
13
19
21
25
21
17
35
17
17
15
19
18
15
17
15
11
28
28
11
15
21
17
MOSL Univ. PAT Share (%)

FY03
FY08 FY14E
3
2
0
7
23
15
4
4
3
0
4
40
0
0
6
-1
11
0
100
4
3
3
3
17
10
4
3
2
0
14
26
4
0
7
6
8
0
100
8
3
1
5
23
9
9
6
4
1
9
20
1
0
13
2
10
1
100
FY03-14: Technology share up 7pp, Oil & Gas down 20pp
A11
PAT expands to 5.6x in 11 years: A tale of two phases

India's GDP growth for FY14 may have retraced to FY03 levels. However, over these
11 years, India Inc's profits (significantly represented by MOSL Universe) expanded
to 5.6x at a CAGR of 17%. As the chart below suggests, the 11-year period can be
broken down into two distinct phases Phase 1 (FY03-08): Over these 5 years, average GDP growth was a robust 8.7% (v/
s 5.6% in preceding 5 years). As a result, corporate earnings more than trebled i.e.
CAGR of 26%.
Phase 2 (FY08-14): Over these 6 years, average GDP growth slipped 2pp over the
preceding 5-year period to 6.7%. Corporate earnings too rose only to 1.8x i.e.
CAGR of 10%.
India Inc PAT growth vis--vis India's GDP growth: 2 distinct phases FY03-08 & FY08-14
Other key metrics: Phase 2 worse off on all counts

Sales growth: FY03-14 Sales CAGR is 19%, broken down into 23% during FY03-08
and 16% during FY08-14.
EBITDA growth & margin: FY03-14 EBITDA CAGR at 17.5% is lower than Sales CAGR
as average EBITDA margin slipped from 21.5% in FY03 to 18.6% in exit year FY14.
Here too, there is a sharp performance difference in the two phases. Over FY0308, EBITDA CAGR was the same as Sales CAGR at 23%, indicating no hit to margins.
However, over FY08-14, EBITDA CAGR at 13% is lower than Sales CAGR of 16% as
EBITDA Margin dipped from 21.0% in FY08 to 18.6% in FY14
RoE and Dividend payout: Phase 1 average RoE was 21% which slipped to 16% in
Phase 2. However, Dividend payout remained stable throughout FY03-14 around
the average of 26%.
January 2014
A12
FY08-14 Sales growth slips to 16% v/s 23% in FY03-08
FY08-14 sees hit on margins
FY09-14 average RoE at 16% is 5pp lower than the preceding

5-year average of 21%
Payout remains stable across cycles
Full-cycle stock market return in line with PAT CAGR

Stock market return CAGR was 39% in Phase 1 and 5% in Phase 2. This translates to fullcycle (FY03-14) return CAGR of 20%, broadly in line with PAT CAGR of 17%.
Full-cycle (FY03-14) stock market return at 20% in line with PAT CAGR of 17%
January 2014
A13
Profit Pool analysis: Key past trends; potential future themes

Our analysis of the FY03-14 profit pool leads us to the following key trends which we
also discuss in detail #1 PUBLIC v/s PRIVATE SECTOR: The ultimate case study of value migration
#5 FINANCIALS: Private sector cashes in on public banks' slip
Based on the above, expect some of the following potential themes to play out going
forward #1 FY14-16 PAT GROWTH: Expect reversion to mean of 15-16%
#2 PRIVATE BANKS, TECHNOLOGY: Two large profit pools which can only get bigger
and better
Past Trend #1 PUBLIC v/s PRIVATE SECTOR: The ultimate case study of value migration
Yet another key finding of our Profit Pool analysis is the significant value migration in
India from the public sector to the private sector. Over FY03-14, the private sector has
emerged larger and superior to the public sector on every key metrics Absolute PAT levels: Private sector PAT is now 80% higher than public sector PAT v/
s 40% lower in FY03
Profit share: FY14 PAT mix is 64:36 in favor of the private sector, fully reversing the
63:37 in favor of public sector in FY03.
Dividend payout: In FY10, the private sector convincingly overtook the public sector
in absolute dividends paid out. The gap has only widened since then.
Return on Equity: Public sector aggregate RoE is down 7pp over the last 11 years v/
s only 2pp for the private sector.
Private sector profits - from 40% lower than public sector in FY03 to 80% higher in FY14
January 2014
A14
Profit mix between private and public sector has exactly reversed in just 11 years
Dividend trend follows PAT trend
Public sector RoE damage also much higher than that for private sector
January 2014
A15
Public Sector Oil Refining & Marketing companies: Classic example of value
destruction
The public sector oil refining & marketing companies (RMs) present a classic example
of value destruction in the public sector.
In a large profit-pool, highly consolidated, steady volume-growth business, the
aggregate PAT of IOC, HPCL and BPCL is down from INR98b in FY03 to INR70b in
FY14.
PAT share is down from a high 14% of total in FY03 to a miniscule 2% in FY14
Even as aggregate net worth has steadily increased, RoE has plunged from a superior
31% in FY03 to a significantly below-cost-of-equity 7% in FY14.
Needless to add, the RMs have significantly underperformed the markets over
the last 11 years.
The only positive takeaway from this case study is that since much of the downturn is
led by policy (rather, the lack of it), there is a high probability of mean reversion,
especially once a new government is in place post 2014 elections.
IOC, HPCL, BPCL - Share of PAT down from 14% in FY03 to 2% in FY14
IOC, HPCL, BPCL - RoE has plunged from 31% in FY03 to 7% in FY14
January 2014
A16
RM stocks have significantly underperformed the markets for a very long time
Past Trend #2 CYCLICALS: Change in PAT orbit

Many sectors made hay during the FY03-08 global liquidity led sunshine, especially
cylicals like Real Estate, Cement, Metals and Capital Goods. At the peak of the cycle in
FY08, these sector profits were several multiples over the base profit of FY03 as shown
below.
Most cyclical sectors made hay during FY03-08 global sunshine
During the FY09-14 phase of global meltdown coupled with domestic slowdown, PAT
growth of all cyclical sectors was below that of their more secular counterparts. In
fact, Real Estate PAT actually crashed 70% while Cement PAT was down 30%. And yet,
the hyper growth of Phase 1 could not be wiped out, and full-cycle FY03-14 PAT growth
of all the cyclical sectors still remained well above aggregate PAT growth.
January 2014
A17
Despite cyclical sectors' PAT pull-back during FY08-14
full-cycle PAT growth of many cyclical sectors higher than MOSL Universe average
Past Trend #3 OIL & GAS: PAT share halves to 20% in best era of crude prices
FY03-14 saw crude prices more than quadruple to USD110 levels. And yet, over this 11year period, share of Oil & Gas in corporate sector PAT halved from 40% in FY03 to 20%
in FY14.
OIL & GAS: PAT share halves to 20% in best era of crude prices
January 2014
A18
Oil & Gas is the only sector to lose share in both the boom and slowdown phases
Past Trend #4 TECHNOLOGY: PAT share doubles to 13%

Technology is one of India's biggest success stories over the last decade. Over FY03-14
Sector PAT CAGR was a robust 26%; equally important, it was fairly consistent in
both the phases: 31% CAGR over FY03-08 and 21% CAGR over FY09-14.
Sector PAT share almost doubled from 6% in FY03 to 13% in FY13.
Technology has emerged has the third largest contributor to the profit pool of
FY14.
TECHNOLOGY: PAT share doubles to 13%
Trend in PAT growth divergent from currency movements, contrary to

expectations
Technology sector saw a PAT CAGR of 31% during FY03-08, while CAGR during FY08FY14 is much lower at 21%. However, the pattern in currency was quite the opposite.
During the high growth years for PAT, the INR actually appreciated at a CAGR of 4%
(from INR48.3/USD to INR40/USD). Over FY08-FY14, the INR has depreciated at a
CAGR of 9% (to INR60.9/USD from INR40/USD).
This is contrary to the usual expectation of PAT growth being fuelled by a
depreciating currency, and being challenged in an appreciating currency regime.
The best PAT growth for Indian IT has come in the years when the currency steadily
appreciated.
January 2014
A19
Growth in PAT has been divergent to movement in currency
explained partly by the declining growth rate in industry exports

Growth rates for Indian IT exports have seen a steady decline, explained by
multiple factors:
1. Slowdown in the developed economy,
2. Increased competition from MNCs like Accenture, IBM and Cap Gemini, which
set up offshore delivery centers at a healthy rate, and
3. Higher penetration in traditional IT services such as ADM and Testing.
The period post the economic downturn led by financial meltdown saw the
divergence in growth rates across companies, with TCS, CTSH and HCLT gaining
greater share, while INFO and WPRO lagged. This was due to readiness to
aggressively pursue even the traditional services work by the former group, at
competitive rates.
Growth rates have cooled off to low-to-mid teens for the industry
January 2014
A20
Past Trend #5 FINANCIALS: Private sector cashes in on public banks' slip

The Financials sector has been a steady performer over both the phases of FY03-14 PAT CAGR of 18% over FY03-08 and 16% over FY08-14. The sector's PAT share has also
been stable around the average of 21% over the period. However, the aggregates
conceal the internal churn within the sector.
In both the phases, private sector PAT CAGR is much higher than that of public
sector banks - 29% v/s 16% during FY03-08, and even more so in the slowdown
phase of FY08-14 at 24% v/s 7%.
The growth differential has caused the sector PAT mix to dramatically shift in favor
of the private sector at 50:50 for FY14, which was at 20:80 in FY03.
FINANCIALS: Steady aggregate PAT growth, but significant differential between public and private
Financials Sector PAT Trend (INR b)
al 14
CA
; PS
al 19%
t
o
T
:
GR
U 16%
;P
Tot
GR:
%; P
%;
SU 7
Pv t
24%
%
vt 29
CA
FINANCIALS: FY14 PAT mix a virtual reversal of FY03 mix in favor of private sector
Financials Sector PAT Mix (%)
Past Trend #6 HEALTHCARE: Perfect prescription for high-immunity profits!

The Healthcare sector comes across as the perfect prescription for profits which are
immune to any kind of turmoil, whether global or local.
Across cycles, Sector PAT CAGR has been consistent - 18% over FY03-08 and 20%
over FY08-14, translating to full cycle PAT CAGR of 19% v/s 17% for MOSL Universe.
Equally important, only 3 of 13 Healthcare companies in our Universe reported
PAT CAGR below aggregate average of 17%.
Ex Ranbaxy and Dr Reddy's, the Healthcare sector's FY03-08 PAT CAGR matched the
aggregate average of 26%.
January 2014
A21
Only 3 of 13 Healthcare companies had FY03-14 PAT CAGR < MOSL aggregate of 17%
Past Trend #7 CONSUMER: Only a foul-weather friend? Not quite

At first glance, Consumer sector has underperformed, with FY03-14 PAT CAGR of only
13% v/s 17% for MOSL Universe. Further, FY03-08 PAT CAGR was only 9% v/s 26% for
MOSL Universe. It is only during FY08-14 Consumer PAT CAGR at 17% was higher than
10% for MOSL Universe. Also, every single Consumer company's PAT CAGR during this
phase was higher than 10%. Prima facie, this seems to suggest that Consumer is
primarily a foul weather friend i.e. outperforms only during periods of slowdown.
ITC and HUL have underperformed Universe earnings over the past 11 years
FY03-14 PAT CAGR 18% (ex HUL, ITC): Company-level analysis suggests that the sector's
performance is not as bad as the aggregates suggest. Two companies - ITC and HUL have consistently accounted for 60-75% of sector aggregate PAT. And both these
companies have sharply underperformed during FY03-08 with PAT CAGR of only 6%
(HUL's FY08 PAT was actually flat over FY03). Excluding ITC and HUL, FY03-14 sector PAT
CAGR is a healthy 18%.
January 2014
A22
Past Trend #8 TELECOM: Why a non-cyclical sector behaved liked a cyclical one
Arguably, no cyclical sector can match the perfect symmetry of Telecom sector's profit
share trend over FY03-14. Whereas, the sector is indeed a highly consumer-facing,
secular business, the Indian telecom sector is a classic case of competition cycle,
rather than business cycle.
TELECOM: Profit share trend more typical than any classical cyclical sector
Over FY03 to FY09, the telecom sector gained rapid scale advantages in a limited
competition scenario. Post the turnaround in FY04, the next 5-year PAT CAGR through
FY09 was a scorching 111%. This coincided with two game-changing events 1. 2G spectrum auction adding several new players to the sector, in turn, driving
down RPMs, margins and PAT;
2. The leader Bharti Airtel's leveraged mega acquisition of Zain in Africa, causing
further erosion in profits.
TELECOM: Rising competition lowers RPM; Bharti's Africa acquisition too drags PAT
January 2014
A23
Based on the above past trends, we discuss some potential themes to play out
going forward.
Potential Theme #1 FY14-16 PAT GROWTH: Expect mean reversion to 15% levels
The growth trend emerging from quarterly results suggests that the worst may be
over for India Inc earnings. After 3% YoY PAT de-growth in Jun-2013 quarter, MOSL
Aggregate PAT grew 8% YoY. For the Dec-2013 quarter, our estimates suggest a higher
10% YoY growth, followed by an even higher 13% YoY growth in Mar-2014 quarter.
Further, our FY15 estimates indicate 16% PAT growth and early estimates indicate this
trend to sustain into FY16 as well. Telecom, Cement, Media, Real Estate and Retail are
likely to be among the highest growth sectors.
Quarterly trends suggest PAT growth bottoming out
The quarterly growth trend is expected to further improve in FY15 and FY16
January 2014
A24
Potential Theme #2 PRIVATE BANKS, TECH: 2 big Profit Pools will only get bigger
PRIVATE BANKS: The juggernaut rolls on

The Indian Financials Profit Pool is large (23% of total) and steadily growing at
over 15%
Within this, Private Banks are consistently increasing their Profit Pool share, up
from 20% in FY03 to 49% in FY14, driving a high PAT CAGR of 26%. Interesting to
note is that the share of private banks in deposits is still quite low at 19%, providing
room for continued market share gains.
The above trend will sustain for the foreseeable future e.g. FY14-16, Financials
PAT CAGR is estimated at 16% with Private Banks growing a shade faster at 17%.
The issue of new banking licenses is more likely to expand the banking market
rather than significantly disrupt the competitive landscape.
Within Private Banks, HDFC Bank has seen significant corrections in valuations
without any major change in earnings prospects. It offers one of the best investment
opportunities for sustained performance. We have upgraded our rating to Buy.
The Private Banks juggernaut rolls on
Financials
Profit Pool (INR b)
HDFC Bank - long-period EPS & P/E band
January 2014
A25
TECHNOLOGY: Nowhere near the end of the road for Indian IT
Global IT-BPM spend is expected to grow over 5% in CY13, as rate of introduction

of disruptive technologies will continue to be faster (SMAC technologies are
forecasted to grow to USD1t+ by 2020.
Trend of increasing adoption of offshoring continues in Continental Europe, driving
growth in the geography. The region is the source of largest deals in the current
pipeline.
With still a lot of penetration yet to happen, new verticals, customers and
geographic markets will continue to gain importance, and offer ample opportunity
for continued double digit industry growth.
Emerging technologies like Cloud, Mobility, Big data and Analytics continue to
gain prominence, and scale in these technologies will determine success of IT
companies over the next few years. While Indian IT continues to evolve its
approach around the same, those with successful bets in this space will be the
likely outperformers going forward.
Prefer Infosys and Tech Mahindra: INFO's stated focus on Products | Platforms |
Solutions, therefore, is a step in the right direction and it has been ahead of the
curve in formulating its strategy of expanding the share of revenues from this
segment. TECHM too, appears to be well placed in order to address the demand
trends shaping the future, with unique advantages compared to peers in areas
like Network, communication and Analytics. Its traction in Run-the-business (RTB)
segments in both Telecom and Enterprise is additionally benefiting from the
synergies of Satyam acquisition. INFO and TECHM are our top picks in the
technology sector.
Opportunity for Indian IT sector big with new verticals, customers and geographic markets continuing to gain importance
Worldwide IT
Industry: USD3,600b
IT Services:
USD906b
IT Outsourcing
Market: USD130b
Indian IT
Exports:
USD76b
January 2014
Segment-wise
oppurtunity by 2020
IT Services
BPM
ER&D
GICs
Software Products
Domestic market
Internet and Mobile
Total
USD b
80
45
40
28
10
75
100
378
Valuation over the years

Market Cap in USD b
Company
Mar 03 Mar 08 Dec 13 FY15 PE
TCS
19.8
68.8
20.1
INFO
5.6
20.4
32.4
16.3
CTSH
1.4
8.3
30.5
20.6
WPRO
6.0
15.5
22.3
15.9
HCLT
0.9
4.2
14.3
13.4
2.1
6.9
12.6
TECHM
A26
Potential Theme #3 OIL & GAS: Reforms can normalise earnings; resulting in significant growth
Need for investment in the sector has already propelled the government to take
some bold policy actions in the last 12 months. We do not foresee different policy
actions for private and PSU companies and hence believe that the reversion to the
normalized profitability happen and benefit all.
Government has already initiate some of the policy actions on the petroleum
pricing as well as at policy levels.
On the petroleum pricing front it has a) decontrolled Petrol price in June 2010,
b) allowed monthly price hikes in diesel from January 2013, c) capped LPG
cylinders per household and d) is in process to shift LPG and kerosene subsidy
to direct cash transfer to eventually eliminate dual pricing in the same and
stop leakages.
While, OMCs earnings in the initial period of reforms are expected to increase
through interest cost reduction, but the significant increase would come in
after diesel de-regulation when they would be able to charge normalized
(higher than current)marketing margins on retail diesel sales.
On the policy front, it is in process to increase domestic gas prices from current
USD4.2/mmbtu to ~USD8/mmbtu, in-line with the proposed formula by the
Rangarajan Committee to boost E&P investments. Other E&P policy decisions
include a) allowing exploration in the developed/producing fields, b)
Integrated block development policy to cut development timelines and c)
initiated process to extend PSC tenure among others.
Oil sector profitability bottomed out, expect recovery led by policy actions
Energy sector is a critical lifeline for economic growth and India with ~80% import
dependence, while continuing to promote domestic E&P will have to strengthen
its overall infrastructural capabilities.
With a)inevitable increase of oil import bill (@USD110/bbl) by 1.6x to USD160b in the
next 6 years and b) likely increase in under-recoveries by 1.5x to USD2.2t, if diesel
reforms are halted; oil sector reform become necessity than an option, in our view.
Hence, we believe that the profitability of the oil companies has bottomed out
and will start normalizing from FY15. Our top picks in the sector are ONGC/OINL in
upstream and BPCL in OMCs for its E&P upside potential. Also, Cairn is at attractive
valuations and could benefit from the production increase as well as likely reserve
upgrade from its ongoing exploration program.
PSU oil have suffered the most due to under recoveries
January 2014
ONGC/OINL's EPS has significant sensitivity to gas price
A27
Potential Theme #4 CEMENT, PSU BANKS: Early-bird cyclical turnarounds?
CEMENT: Utilisation levels at decade low; expect improvement

Imminent demand recovery (from lows of 4.7% CAGR over FY10-14E) and slowing
capacity addition (5.3% CAGR over FY14-17E) augurs well for improvement in
utilization, pricing and profitability.
This coupled with focus on cost cutting and falling debt levels bodes well for
strong earnings growth during recovery.
In large caps we prefer ACC and Shree Cement, and in mid-caps we prefer Dalmia
Bharat, JK Lakshmi and Birla Corp.
Capacity utilization (%) is at two decade's low
PSU BANKS: Highly levered to economic growth

Stressed asset creation hit banks in three ways viz. (1) loan growth slows down,
(2) NIMs fall led by interest income reversals and (3) provisions rise significantly.
In this cycle of FY11/14, stress assets of the PSU banks are expected to rise to 11.9%
as compared to 6.1% in FY11 and earnings to decline by 8% over FY11/14E. RoA's
would be at its low at 0.6%.
As we expect the economic cycle to improve in CY14, we also see peak of stress
asset addition and disablers of earnings in the FY11/14 cycle can become enablers.
Hence overall earnings growth could improve and return ratios rebound.
Credit cost rise significantly impacting profitability
January 2014
Cyclical downturn impacts asset quality and

dents earnings- can this reverse?
A28
Potential Theme #5 TELECOM: Data should help it regain lost voice
With an active subscriber base of ~700m (~60% active SIM penetration), the Indian
wireless market is already showing signs of maturing with active user base and
wireless traffic growing at 6-7% YoY.
The industry focus is therefore shifting from acquiring subscribers to mining the
existing base by affecting voice tariff improvements and stimulating data demand.
With mobile data user penetration at ~15% and mobile data traffic for GSM
incumbents growing at ~100% YoY, we believe that data will be a key growth driver
for the sector.
Over FY14-19, we expect Indian wireless revenue base to grow at ~10% CAGR from
~USD27b to ~USD43b. Half of the incremental revenue is expected to come from
data which will increase from ~10% industry revenue contribution in FY14 to ~25%
in FY19.
EBITDA and PAT CAGR for incumbents would be higher than revenue CAGR given
significant operating and financial leverage.
Data user penetration in India set to leap-frog (%)
January 2014
A29
ECONOMY RBIs focus to shift to growth as Inflation, Currency stabilizes
Crisis causes its own conquest. India faced a crisis of the eerie combination of low growth,
high inflation and external instability. A change of guard at RBI has brought in the much
needed stability in aspects of policy rates and INR. Since Dr Rajan assumed the role of RBI
Governor, the approach on various policy measures have seen a significant shift. During
1HCY14, as the focus shifts on Elections, this positive approach by RBI will be critical to adress
a volatile domestic and global macro environment.
We see a fall in inflation in the coming months to shift the debate to that of a rate cut
sometime in Mar-14. While this may seem to be an out of consensus view, several components
of inflation can surprise positively, the way they did negatively. December - January trend of
food inflation should be important. RBI will consider easing rates, the moment they see the
change in direction of inflation.
Recent months of trade data are clearly showing that the big concern of CAD is now surely
behind us. Growth prospects in West will aid exports in 2014, while imports will remain low
due to domestic slowdown and commodity prices. RBI has used this phase to build Forex
Reserves closer to USD300b. We see some of the restrictions on gold imports to ease in the
coming months.
The new leadership brings fresh thinking at RBI

2HCY13 has been one of the worst period of crisis in India. Growth plummeted to
decadal low, inflation remained at high levels particularly consumer inflation while
INR at one point of time became one of the worst performing currencies among
the EMEs. Amidst all these came a change of guard at RBI with a markedly different
approach to address the problem of the day.
1HCY14 would be an interesting and still challenging period for Indian economy.
While everyone goes into the election mode till May-14, RBI would continue to
play an anchor role during this trying times navigating between slow
implementation of US FEDs taper, moderation in inflation but continued low
growth.
Under the leadership of Dr. Subbarao, RBI chased the headline inflation print with
successive hikes in interest rates and very tight liquidity conditions for three years
in a row, that resulted in deposit growth consistently lagging the credit growth
during this period. Inflation still however, did not fall below the tolerance limit of
RBI. In many ways Dr. Rajan is approaching the problem in a vastly different way.
At the outset he wants to steer himself clear of the noise element in the data and
is willing to await for more clarity to emerge in this regard. More formally, he is
moving away from a single target single instrument framework to a multiple
target multiple instruments approach.
This balanced approach also informed his multidirectional approach to the

solutions through a combination of easing of MSF rates, hike in Repo rates, easing
of liquidity and finally a series of communication aimed at managing inflationary
expectations and expectations regarding RBI policy. In holding his nerve vis--vis
a spike in Nov-13 inflation print, he has also vetted for stability in policy.
January 2014
A30
The iron hand vs. gentle persuasion - the eight months of two regimes at RBI
Crisis
High
inflation
Dr. Subbarao during

May-13 to Aug-13
Situation: Faced with an average inflation of 5.6% and
growth of around 4.8-4.4%.
Response: Kept the repo rates high at 7.25%. Also raised
MSF rates as part of forex crisis reponse. Kept liquidity
tight throughout to keep call money high.
Scorecard: Inflation did not subside and indeed

vegetable inflation kept rising.
External crisis
Situation: INR moved from 54-69 in four months as CAD

ruled high at 4.9% in 1QFY13 and USD5b flown out during
2QFY14.
Response: Hiked short term rates, inverted yield curve
to attract capital flows, clamped down on gold imports.
Scorecard: Forex volatility at its peak, continued FIIs

outflow, trade deficit corrects to USD12b from USD18/
20b earlier.
January 2014
Dr. Rajan during

Sep-13 to Dec-13
Situation: Faced an average inflation of 7.2% and growth
of around the same of 4.8%
Response: Lowered the effective MSF rate while hiking
Repo to rationalize the corridor. Also waited for data
to stabilize in the last policy, citing concerns of
overtightening. Eased liquidity and money market
rates.
Scorecard: Inflation is expected to drop sharply from
Dec-13 onwards.
Situation: Forex market volatility at its peak, market

jittery despite improvement in trade data to USD12b
from USD18/20b earlier.
Response: Rationalized policy rates, normalized yield
curve, opened forex swap windows, liberalized certain
aspects of forex market, calmed the market through
timely communication.
Scorecard: INR stabilized at 62/USD, trade data continued
to improve, capital inflow resumed allowed forex built
up.
A31
The iron hand vs. gentle persuasion - the eight months of two regimes at RBI
Quotes
January 2014
On inflation and policy: Admittedly, some growth

slowdown is attributable to monetary tightening. Note
that the objective of monetary tightening is to compress
aggregate demand, and so some sacrifice of growth is
programmed into monetary tightening.
On INR: It is the avowed policy of the Reserve Bank not
to target a level of exchange rate and we have stayed
true to that policy.
On tapering: There has been dismay about the ferocity
of depreciation; there has also been a growing
tendency to attribute all of this to the 'tapering' of its
ultra easy monetary policy by the US Fed.
Such a diagnosis, I believe, is misleading. Admittedly,
the speed and timing of the rupee depreciation have
been due to the markets factoring in 'tapering' by the
US Fed, but we will go astray both in the diagnosis
and remedy, if we do not acknowledge that the root
cause of the problem is domestic structural factors.
On inflation and policy: We may be in danger of over

tightening and that has its consequences also,
especially in a weak economy.
On INR: There is no fundamental reason for volatility

in the value of the rupee. We are left with fear about
what others will fear and do to explain what is going
on. At such times, it makes sense to take a deep
breath and examine the fundamentals. I hope you all
will do that..
On tapering: What we need to do is put our house in
order before it (tapering) comes back. The
postponement of tapering is only that, a
postponement. We must use this time to create a
bullet-proof national balance sheet and growth
agenda, which creates confidence in citizens and
investors alike.
A32
Similarly the response to the external crisis too has been vastly different under the
two regimes. Dr. Subbarao caused a spike in short term rates, inverted the yield curve,
clamped down on gold imports and spent forex reserves to stabilize INR. On the other
hand, Dr. Rajan has eased the short term rates, brought the yield curve back to shape,
relaxed some of the forex restrictions for exporter/importers even while in crisis and
shored up forex reserves through debt capital flows. At the end, the INR stabilized at
around 62/USD while volatility came back to normal levels. Again proactive
communication, especially in between scheduled policy events were used to soothe
the tempered nerves of the financial markets.
In recent times, a friendlier approach from RBI has helped stabilize the market
expectations and improve the outcome than a straight forward iron hand approach
adopted by the earlier regime. This has important implications for events that would
unfold in 1HCY14 and especially with regard to the two prime concerns of 2HCY13, the
debate may now shift to i) when can we see the first rate cut and ii) have we left the
external crisis behind?
Come Mar-14 and we could all be singing rate cuts
An analysis of the inflation data reveals that vegetable prices account for much of
the acceleration of inflation since Jun-13.
Indeed vegetable prices with just 1.7% weight in WPI accounted for around 2% of
the 7.5% overall WPI inflation in Nov-13.
Similarly while vegetables accounted for around 5.4% of the weight in CPI it
contributed 3.5% of the 11.2% overall CPI inflation in Nov-13.
Our channel check and high frequency data suggests that various vegetables prices
have nearly halved during Dec-13. This would lead to 1% drop in WPI and 1.5%
drop in CPI inflation during Dec-13.
Moreover, the sharp drop in vegetable prices would be combined with the expected
drop in the cereals and pulses on arrival of new crop. The expectations of a bumper
Ravi crop also expected to accelerate this trend.
A sharp drop in domestic food prices would keep the overall inflation stable,
further reinforced by an expected drop in imported inflation on low international
commodity prices and stable INR.
The recent spike in WPI inflation clearly caused by vegetables alone
January 2014
The same is the case for CPI inflation too
A33
A sharp drop in vegetables inflation would lead WPI inflation to drop by 1% Similarly CPI inflation would subside to single digit level in Dec-13
In the light of the above development we expect WPI to stabilize to 6-6.5% level in
1HCY14. Similarly, CPI would moderate to around 9% level from the current 11% level.
This would decisively shift the debate on policy to easing of rates around Mar-14.
We hold that the space for rate cut exists even now as policy rates are around the high
levels that prevailed during the two previous cycles during Mar-07 and Jun-11 despite
inflation hovering near the same levels or lower and growth faltering to decadal low.
Thus we expect once the inflation rate stabilizes, talk of a rate cut would pick up.
However, external stability is a precondition for any rate cut.
We observe that a forex level below USD280 had drawn the panic reaction from RBI in
raising the MSF rate by 200bp. Thus for any talk of rate cut to gain currency forex
reserves needs to be at least in the range of USD280-290b and INR needs to be stable
in the 60-64/USD range.
Falling food prices may see WPI ~6-6.5% in 1HCY14
Similarly CPI may hover around 9% in the coming six months
Space for rate cut already exists as rates are as high as previous However, external stability (forex level of USD280-290b)
peaks despite growth faltering and inflation similar or lower
is a pre-condition for RBI not to press the panic button
January 2014
A34
Have we left the CAD problem behind?
Since Jun-13 the trade deficit has come down sharply to USD10-12b from USD1820b earlier. This has resulted in a dramatic correction in the CAD to 1.2% of GDP
during 2QFY13 from 4.9% during 1QFY14.
Thus we expect the CAD/GDP to correct sharply to 2.3% in FY14 and 1.9% in FY15,
far lower than the peak of 4.7% during FY13.
We base our conclusion on the sharply falling imports and the pick up in exports
seen in the recent months. We feel these trends would be durable for the following
reasons.
The decline in imports is broadbased and is due to slowdown in the economy,
particularly the non-oil-non-gold imports. As the economy slowly recovers
the imports, particularly the import intensive sectors, e.g, capital goods would
show generalized growth only with a lag.
The restrictions on gold imports have been effective in suppressing the supply
of gold as seen in the sudden spike in premium paid in the domestic market
vis--vis international market on gold since Sep-13.
On the other hand gold demand has been low as investment demand has
evaporated on the back of low return expectations after a decade long bull
run.
Indeed the sharp decline in gold imports has opened up space for removal of
some of the restrictions on gold imports, particularly the high import duties.
Meanwhile exports have started picking up and is expected to do so as growth
in the advanced countries pick up steam.
The commodity-wise breakdown of exports reflect that apart from the primary
products, value added goods too have started gaining traction, including
petroleum products, chemicals and iron & steel. This augurs well for the future
prospect of exports.
Thus as the situation on CAD improves it would provide confidence on the strength
to the external investors regarding the value of INR. A slow return of growth too
would be a critical factor in reviving capital flows.
Thus the fear of tapering has receded and RBIs pronouncement of much better
preparedness has helped calm the market expectations. Here too Dr. Rajan has
pulled out an winning formula, as the maxim go fortune favours the brave.
Trade deficit is coming down to FY11 or FY08 levels
January 2014
Raising the hope to correct CAD to sustainable levels
A35
CAD is expected to come back to the pre-crisis levels in FY15 (in USDb)
Annual
Exports
Imports
Trade Deficit
Invisible Surplus
Current A/c deficit
Net capital flows
Forex Reserves
(As % of GDP)
Exports
Imports
Trade Deficit
Invisible Surplus
Current A/c deficit
External debt
FY08
FY09
FY10
FY11
FY12
FY13
FY14E
FY15E
166
258
-91
76
-16
107
310
189
309
-120
92
-28
7
252
182
301
-118
80
-38
53
279
251
381
-130
86
-44
57
305
310
500
-190
112
-78
68
294
307
502
-196
107
-88
89
293
316
467
-151
110
-41
40
290
348
506
-158
120
-38
50
301
13.4
20.8
-7.4
6.1
-1.3
18.1
15.5
25.4
-9.8
7.5
-2.3
20.5
13.2
21.8
-8.6
5.8
-2.8
18.9
14.5
22.1
-7.6
5.0
-2.6
17.3
16.8
27.0
-10.3
6.0
-4.2
18.7
16.3
26.7
-10.4
5.7
-4.7
21.4
17.4
25.7
-8.3
6.0
-2.3
23.2
17.4
25.3
-7.9
6.0
-1.9
24.2
The decline in imports is widespread across major items of

exports barring oil
Restriction on gold has suppressed gold supply as reflected in

spike in premium between Indian and international prices
This has prepared the ground for lifting some of the restrictions on gold imports
Date
Jan-12
Mar-12
Jan-13
May-13
Jun-13
Jul-13
Aug-13
January 2014
Measure
The import duty of 1% raised to 2%
Import duty raised to 4%
Import duty raised to 6%
Restriction on bank imports via consignment;
Import duty hiked to 8%; consignment restriction further extended to all agencies
on Jun-13; requirement of outright cash payment
Consignment restrictions withdrawn; stringent requirement of 20%
exports for all imports
Import duty hiked to 10%Excise duty hiked to 9% from 7%
A36
Meanwhile exports have started picking up once again
January 2014
12 export items (ranked as per their weight) that has seen the
maximum growth in YTDFY14 (YoY%)
A37
ELECTIONS Alternate climax or anti-climax in the making

AAP forming government in Delhi spices up the national political landscape
Refer to the Election update
released on December 2013
The recent assembly elections results clearly indicated a strong anti-Congress wave bringing
out a decisive voting against corruption, inflation, lack of policy reforms, etc.
The decisive mandate saw BJP, riding on the NaMo wave, forming government in 3 out of
5 states with record number of votes. AAP was the BIGGEST SURPRISE, which formed
government in Delhi, with outside support from Congress. AAPs 40% seat share and 30%
vote share indicates that a fresh alternative can no longer be ruled out.
Till recently, all the political pundits were betting for BJP as the majority party in the
upcoming 2014 Lok Sabha elections riding on the dual wave of anti-Congress and NaMo.
Indian markets were also riding high, driven by the Modi bandwagon, who stands as a
symbol of pro-development driven by his success in Gujarat.
However, AAPs win in Delhi has queered the national pitch. The focus of AAPs early policy
action is socialistic, rather than an anti-corruption drive that was expected from AAP
(Refer Annexure I). Many high profile personalities including industrialists have voluntarily
joined the party (Refer Annexure II). Whether AAP, aided by the new joinees, can showcase
their policy action prowess on growth and development front remains to be seen! (Refer
Annexure III)
Market view: With four months remaining for Lok Sabha elections, a lot of action is
expected on the political front which is likely to keep markets volatile and the environment
uncertain. A churn is taking place in India and the 2014 mandate will reflect this manthan!
Strong anti-Congress wave across country; lowest tally for Congress

Congress bagged merely 126 of the total 589 seats in 4 major state elections. This is
the lowest ever number of combined seats by Congress. Seat share at 21% and
lowest vote share clearly indicates a strong anti-Congress wave in recent elections.
Growth and governance over entitlement has been the clear preference of voters.
However, while governance is found to be a necessary condition, governance
deficit has nearly unambiguously thrown the incumbent out of its office.
Congress won its lowest ever seats in the recently concluded assembly elections
Parties
Congress won merely 126

of the total 589 seats
(1/5 of the total seats) in
4 major state elections
January 2014
Chahattisgarh
BJP
Congress
Others
Delhi
BJP
Congress
AAP
Others
Madhya Pradesh
BJP
Congress
Others
Rajasthan
BJP
Congress
Others
Total seats
BJP
Congress
Assembly
(2003)
90
50
37
3
70
20
47
0
3
230
173
38
19
200
120
56
24
590
363
178
General
(2004)
11
10
1
0
7
1
6
0
0
29
25
4
0
25
21
4
0
72
57
15
Assembly
(2008)
90
50
38
2
70
23
43
0
4
230
143
71
16
200
78
96
26
590
294
248
General
(2009)
11
10
1
0
7
0
7
0
0
29
16
12
1
25
4
20
1
72
30
40
Assembly
(2013)
90
49
39
2
70
32
8
28
2
230
165
58
7
199
162
21
16
589
408
126
A38
Congress vote share also remained very low

Party
Rajasthan and Delhi vote

share - lowest for
Congress
Vote share
(1998)
Vote share
(2003)
Vote share
(2008) (A)
Vote share
(2013) (B)
Swing
(B-A)
NA
NA
NA
39
37
24
40
40
20
41
40
19
1
0
-1
36
48
0
16
35
48
0
17
37
40
0
23
33
25
30
13
-4
-16
30
-10
39
41
20
43
32
26
38
33
29
45
36
19
7
4
-10
34
45
21
40
36
25
36
37
28
45
33
22
10
-4
-6
Chattisgarh
BJP
Congress
Others
Delhi
BJP
Congress
AAP
Others
Madhya Pradesh
BJP
Congress
Others
Rajasthan
BJP
Congress
Others
BJP emerges as the alternative in 3 out of 4 major states; betters all

expectations
BJP, driven by the strong NaMo wave, emerged as the preferred choice in states
where there was a direct battle between BJP and Congress.
Infact, BJP bettered its own tally and all expectations winning 408 seats out of a
maximum possible 589 seats. This is more than 2/3rd of the total number of seats.
Even BJPs vote share saw a marked improvement, except Delhi, which saw AAP
eating away some of the vote share.
BJP surpassed the consensus exit polls seat estimate by a significant margin.
The win was supported by the strong Modi wave, riding on his pro-development
philosophy and his heroics in the state of Gujarat.
BJP exceeded all expectations and won higher seats than that predicted by exit polls
States/Parties
Chhattisgarh
BJP
Congress
Others
Delhi
BJP
Congress
AAP
Others
Madhya Pradesh
BJP
Congress
Others
Rajasthan
BJP
Congress
Others
January 2014
ABP News Nielsen
CNN-IBN
Week
Times Now
- C Voter
India Today
-ORG
Todays
Chanakya
Average of
all polls (A)
Assembly
(2013) (B)
Swing
(B-A)
90
43
42
5
70
37
16
15
2
230
138
80
12
200
110
73
17
90
50
36
4
70
37
13
17
3
230
141
72
17
200
131
53
16
90
44
41
5
70
31
24
11
4
230
128
92
10
200
130
48
22
90
53
33
4
70
41
20
6
3
230
138
80
12
200
110
62
28
90
51
39
0
70
29
10
31
0
230
161
62
7
200
147
39
14
90
48
38
4
70
35
17
16
2
230
141
77
12
200
126
55
19
90
49
39
2
70
32
8
28
2
230
165
58
7
199
162
21
16
0
1
1
-2
0
-3
-9
12
0
0
24
-19
-5
-1
36
-34
-3
A39
Combined seats won by Congress lowest in 4 major state elections; BJP highest
The AAP-rising a fresh alternative?
,,
,,
I have already wished

him well.
Anna Hazare
The biggest surprise of 2013 assembly elections was Delhi which saw the
emergence of AAP as the second largest party winning 28 seats out of 70. It was
also the runner-up party in 20 seats apart from the 28 seats won. More importantly,
in its first year of existence, AAP won a vote share of 30%.
AAP has formed the government in Delhi with outside support from the Congress.
A party with mere one year of existence forming a government is unconceivable.
The differentiating factor for AAP was its underlying PHILOSOPHY: No high profile
politician, drive against corruption, unorthodox election campaign, and a personal
connect with the voters.
The UNIQUE STRATEGY adopted by AAP to garner peoples mindshare include: i)
symbol of broom to suggest a clean-up, ii) online donation and stopping to accept
donations once the mobilization reached the target of INR200m, iii) 70 manifestos
dedicated to each constituency along with a general manifesto, iv) a transparent
and participative candidate selection process.
Post the AAP win, there is a renewed belief amongst voters that a fresh alternative
is now available in Indian politics.
AAP's performance exceeded most expectations

States/
Parties
Exit Polls
Avg of Assembly
ABP News - CNN-IBN Times Now - India
Today's Exit polls (2013)
Nielsen
Week
C Voter Today-ORG Chanakya
(A)
(B)
Total seats
70
70
70
70
70
70
70
BJP
37
37
31
41
29
35
32
Congress
16
13
24
20
10
17
8
AAP
15
17
11
6
31
16
28
Others
2
3
4
3
0
2
2
Swing
(B-A)
0
-3
-9
12
0
AAP ate vote share largely from Congress and BSP and also in part from BJP
Party
1998
BJP
Congress
AAP
Others
January 2014
36
48
0
16
Vote share (%)

2003
2008 (A)
35
48
0
17
37
40
0
23
2013 (B)
Swing
(B-A)
33
25
30
13
-4
-16
30
-10
A40
AAP got runners up position in 20 seats

Party (Seats won)
BJP
BJP (31)
AAP (28)
INC (8)
SAD (1)
JD (U) (1)
Ind (1)
Total (2nd position)
22
6
Runner up seats
AAP
18
INC
14
5
2
1
1
1
29
20
21
Why AAP assumes significance for 2014 General elections?
January 2014
Any change is always driven by a revolution (against corruption this time). The
biggest question today is, Will AAP drive that CHANGE?
Till recently, all the political pundits were betting for BJP as the majority party in
the upcoming 2014 Lok Sabha elections riding on the dual wave of anti-Congress
and NaMo. Indian markets were also riding high, driven by the Modi bandwagon,
who stands as a symbol of pro-development driven by his success in Gujarat.
However, AAPs win in Delhi has queered the national pitch. The focus of AAPs
early policy action is socialistic, rather than an anti-corruption drive that was
expected from AAP (refer Annexure-I for AAP's promises and achievements).
Thus, the national fight has now narrowed to two alternatives: (i) BJP, led by
Narendra Modi, with a righteous and pro-development model and (ii) AAP, led by
Arvind Kejriwal, with a pro-leftist and anti-corruption model.
However, with many high profile personalities including industrialists joining the
party, whether AAP can showcase their policy action prowess on growth and
development front remains to be seen! (refer Annexure-II for high profile joinees).
Arguments for AAP is not a force to reckon with at the national level are : (i) Arvind
Kejriwal carried his socialistic work in Delhi for the last 10 years though it floated
AAP a year ago; (ii) unlike Delhi, where there are no regional parties, other states
have many regional parties and penetrating them will be difficult, and (iii) four
months is too short a time for AAP to set its base pan India.
However, there is equal bullishness that AAP can spoil the party for BJP, like it did
in Delhi (refer Annexure-III for industrialists and journalists reactions).
Market view: One thing is for sure! There is a wind of change in India who is
likely to be a beneficiary of this change remains to be seen. With four months
remaining for the Lok Sabha elections, a lot of action is expected on the political
front which is likely to keep markets volatile and the environment uncertain.
A41
Annexure-I
Manifesto: Tall promises and high benchmark; have already started striking
chords
AAPs manifesto promised a lot of steps for the AAM AADMI. We have presented
below the issues AAP wishes to resolve and the policy actions they have made during
the limited period they have been in power:
1) Electricity bill: To be reduced by 50% through audit of discoms, checking bills and
meters, promotion of solar power.
Key announcements post assuming office
Ordered a 50% cut in electricity prices up to a consumption of 400 units of
power. This will benefit 2.8m people or 82% of electricity consumers. The
subsidy will result in cash outgo of INR610m for Jan-Mar14.
It has also ordered audit of discoms that provide power to Delhi.
2) Water availability: Households using up to 700 litres of water (per day) would be
given free water. Transparency to be introduced and privatization to be stopped in
Delhi Jal Board.
Free 20kl of water a month or 667litres a day. No levy of any existing charges
such as water cess and sewerage charges will be made.
3) Education: Commitment to high quality education to all, regulate high fees and
donations in private schools, expansion of higher education and regularization of
temporary posts.
Mr. Manish Sisodia, State Education Minister, expressed disappointment at
the low-functioning state of the department.
Delhi government provides scholarships for children from the weaker sections
of society by which half their tuition fees are covered. But only 7 children have
been able to benefit from it in the past year.
4) Transport: Unified Transport Authority, expansion of DTC bus service and Delhi
Metro, making pavements and cycle tracks on all possible roads, preventing police
harassment and revising auto fares in an ongoing manner etc.
Minister of Transport for Delhi, Mr. Saurabh Bharadwaj, has approved the
distribution of 15000 autos, free of cost, to members of the SC/ST.
5) Delhi Jan Lokpal Bill: Commitment to pass Delhi Jan Lokpal Bill within 15 days of
coming to power.
6) Womens security: Citizens security forces would be formed with a branch in
each ward. Special fast track courts for crimes against women.
7) Slums: Flats/plots would be provided on site or as near as possible to existing
location of slums through a consultative process. Till rehabilitation no demolition
and improvement in living conditions.
8) Inflation and unemployment: Basic provisioning to protect people from inflation.
For unemployment, government posts to be filled up, better facilities to be
provided at industrial areas and low interest loans for young entrepreneurs.
January 2014
A42
9) Other economic issues: Simplified VAT structure, licensing procedure and

opposition to FDI in retail for traders. Other target groups measures include
stopping of contract labors for 365 days jobs, enforcement of minimum wages,
social security for unorganized sector, regulation of wage and working hours of
domestic workers, improvement in conditions of rag pickers and licences and
fixed locations for street vendors.
Ordered shelters for all people who are sleeping in the open in Delhi.
Porta Cabin Tents to be transformed into nightshelters and also announced 45
new nightshelters to be made to prevent people from the chilling cold in
Delhi.
Annexure-II
7 days of power 7 high profile joinees in AAP army; ~0.4m members added
post Dec 8
AAP could not have called for a better response to showcase them at the national
level. AAP currently has its units and committees in atleast 309 districts across
India and is well on its target of having presence in all 672 districts of the country.
The party had less than 0.5m registered members before the Delhi elections.
However, since its stellar debut in Delhi Assembly elections on December 8, AAP
members have almost doubled.
Top three places which have seen recent additions are Uttar Pradesh with 72,416
members, Delhi with 48,001 and Maharashtra with 37,028 members.
With just over a week gone since Arvind Kejriwal took oath as the Chief Minister
of Delhi, AAP has already within its folds many high profile joinees from different
sectors.
January 2014
A43
Distinguished personalities in various disciplines now dawn as AAP soldiers
,,
Mr. Adarsh
Shastri
,,
Mrs. Meera
Sanyal
Brief profile/
Quote shoot
Credentials
BSc from the University of Madras,
AAP is the most successful startup by
started his career at Amco Batteries
an IIT-ian ever. I would like to be a
before joining IT major Infosys.
part of the revolution happening in
,,
Held a variety of positions for Infosys
the country
including CFO from May'06 to Oct'12.
Member of the Board of Directors of
Infosys till 31st December, 2013.
Former CEO, Royal MBA from INSEAD France, worked
There is a perception that AAP's
Bank of Scotland
with RBS for 6 years and before that
economic policies are along the lines
was associated with ABN Amro for
of the Left. I am not in favour of
15 years.
subsidies but we have parties like
President of Indian Liberal Group, a
Congress and BJP, who passed the
non proft think tank for improving
Food Security Bill and are quibbling
quality of governance in India.
over a subsidy bill (that of power in
,,
Delhi) that is way smaller
Former Head of
Grandson of former PM, Lal Bahadur
Victory of AAP is reaffirmation by
Sales (West
Shastri and son of current Congress
people in the values of transparency
India), Apple
leader Anil Shastri.
and probity as espoused by my
,,
40 year old MBA, who has spent over
grandfather Shastriji
15 years in telecom sector.
I had a cushy life with a great
company but somehow it did not feel
right. I was inspired by Arvind Kejriwal
and felt compelled to do more,,
Popular singer
Rose to fame in 1970s and 1980s by
I've had enough of voting for different
from Goa
lending his music/songs to several
parties and different leaders and
popular movements which dealt
expecting change, but being shortwith social issues like making
changed each time. Like the saying
Konkani Goa's official language.
goes, if I want change, I have to BE
,,
Ambassador of Election Commission
the change
of India in 2012 to encourage voting
among youth.
Leading social
Led the historic peoples movement
In the national context, AAP is an IDEA
activist from Goa
in 2006-07 to get anti-Goa Regional
here to completely stay. Post 2014, if
and a practicing
Plan scrapped and save Goa from
Congress and the khichdi Third Front
doctor
total destruction of ecology and
comes to power it will be the same
natural beauty.
old power brokers, wheeler dealers,
Worked indefatigably for welfare of
and corrupt crony capitalists back in
Goa in various causes.
action,,
Ex BJP MLA
Three term BJP MLA led farmers
Now, with the help of this broom, I
,,
movement against Nirma Group
will clean up the filth from Gujarat
which wanted to set up a major
I am not against industries but
cement manufacturing plant in
against the industrial development
,,
Bhavnagar district..
at the cost of the poor and farmers
Past
association
Former CFO and
Director, Infosys
,,
Name of
new joinees
Mr. V
Balakrishnan
or Bala as he
is commonly
known
,,
,,
Mr. Kanu
Kalsaria
,,
Dr. Oscar
Rebello
,,
Mr. Remo
Fernandes
,,
January 2014
Spent eight years in the Indian army,

earning the rank of Captain.
Founded Air Deccan, a low cost
airline.
In 2009 Lok Sabha elections, stood
unsuccessfully as an independent
candidate.
,,
Founder of Air
Captain
G.R. Gopinath Deccan
The biggest problem with political

parties today is that MPs treat their
constituencies like dirt and the high
command treats its MPs like dirt.
,,
Morals and values don't trickle down
A44
Annexure-III
Quotes from leading Industrialists and Journalists indicate mixed response for AAP
We have collated the reactions of the major industrialist and journalists on AAP's
victory in Delhi. While majority have appreciated the feat performed by AAP, there
are some who believe that AAP's socialist model will not last for long.
Mixed response for AAP

THOSE POSITIVE
... THOSE DITHERING
You do not need much money and other resources to

win elections. Thats the lesson at least I got from the
Aam Aadmi Party victory
N R Narayana Murthy,
Co- Founder and Executive Chairman, Infosys
We should wait and watch . Some goals seem

unrealistic because state government cannot print
money, unlike the Centre
Rahul Bajaj,
Chairman, Bajaj Auto
Honesty isnt just the best policy but the best politics
Anand Mahindra,
CMD, Mahindra & Mahindra
AAP is the 5th revolution in India's domestic politics
after the freedom struggle, socialist movement,
emergency and mandir/mandal politics
Shekhar Gupta, Editor-in-Chief, Indian Express
He is not tried and tested, so I am eager to see what

he does. But I am not wishing him away though there
are others who want to wish him away
Anand Burman,
Chairman, Dabur India
Political parties deal in creating distances. Kejriwal

has reduced distances between the politician and
the people
Santosh Desai, columnist for The Times of India,
MD & CEO of Futurebrands India Ltd
AAP forming govt is a good step. My only concern is

that they have been elected on big economic
promises for the poor and ideal principles for the
rich. An Utopian model which is difficult to live up to, but if
delivered will be laudable
Sunil Alagh, Former MD, Britannia
It is not necessary that he has to achieve all the goals

on the first day itself. This is how business leaders
function too. They set targets and goals and Im glad
that he has set goals for his government to achieve. Whether,
hell be able to achieve and deliver only a part of the goals is
not a worry as opposed to not having any goals at all
Rajat Jain, Managing Director, Xerox India
AAP can play a sport spoiler for few states but can't
be a riding force . Better Kejriwal does, the better
it is for Modi because it signals a need for change
Rajdeep Sardesai, Editor-in-chief, IBN18 Network
Kejriwal's the Amol Palekar of Indian politics, the

man next door
Suhel Seth, Founder Equus Advertising
January 2014
A45
FED (TAP)ER FII debt investors pre-empt but equity investors stay put
Private Financials, Technology, Automobiles witness highest FII flows
The US Fed recently announced the first round of tapering on its stimulus package from
January 2014, after a period of over 5 years in continuance. During this period, India
received USD109b, in aggregate, USD91b from equity and USD18b from debt.
The impact of tapering is clearly visible on the debt front with ~USD12b outflows in the
last seven months, since the talks of Fed taper first started. Accordingly, out of the total
debt flows of USD20b received since Nov-08, 40% of the cumulative debt flows (USD8b)
have been withdrawn by investors in CY13 alone.
Equity flows, on the other hand, continue unabated with CY13 receiving USD20b (3rd
highest equity flow ever). With the Fed taper imminent, India could see see moderation
in the flows. This will particularly impact the sectors / stocks where the FII holding is high.
In this section, we present our analysis on: (i) the beneficiary sectors/stocks which saw
maximum FII inflows during the QE phase, (ii) sectors/stocks where FIIs are overweight or
underweight relative to MSCI ETF. As and when the markets gets worried on the impact
of FII flows, these stocks are likely to be impacted.
US Federal Reserve stimulus package saw USD3.4t being infused over five
years
US Federal Reserve has announced three Quantitative Easing (QE), infusing USD3.4t
on aggregate basis. During this period, India received USD109b, USD91.0b from
equity and USD18.4b in debt.
The US Fed recently announced a minor taper of USD10b/month to its third stimulus
package of USD85b per month from January 2014, backed by strong household
spending in US and higher GDP growth.
This was the first round of tapering after a period of more than five years in
continuance.
Fed QE timelines
2008 Financial
Crisis
September/
October 2008
QE saw aggregate infusion of USD3.4t over 5 years

End of QE1
March 31, 2010
QE1
Nov. 25, 2008
March 31, 2010
January 2014
End of QE2
June 30, 2011
QE2
Nov. 3, 2010
June 30, 2011
Particulars
QE1
QE2
QE3
Total
Start date
Dec-08
Nov-10
Sep-12
End date
Mar-10
Jun-11
Present
Amt (USD b)
1,650
600
1,140
3,390
QE3
Sept 13, 2012
to present
A46
FII flows galore: Debt sees outflows during the recent months; equity flows
still healthy
For Indian markets, FII ownership is at all-time high at 20.9% at September 30,
2013. Even as a proportion of free float, FII ownership was at its peak of ~44%.
FIIs pumped in net flows of USD109b during the Quantitative Easing (QE) phase; of
which more than 4/5th was in equity (USD91.0b) while the remaining was in debt
(USD18.4b).
Debt has already seen FII outflows of ~USD12b over the past seven months since
the talks of tapering first started off. Thus, CY13 saw net debt outflows of USD8b
(highest ever).
However, net equity flows still remain healthy with USD90.9b in past 5 years. CY13
is the third best year with net equity inflows of USD20b. The past 5 months alone
have seen ~USD8b of net inflows.
FII ownership at its peak in 2QFY14
FII ownership as a proportion of free float at historic high
Stupendous equity inflows in the QE phase; huge debt outflows flows during CY13 (USD b)
January 2014
A47
Debt sees massive outflows of USD12b over the past 7 months (USD b)
However, equities continue to see healthy flows unabated; USD7b in last 5 months
Private financials, Technology and Automobiles are the major beneficiaries

With tapering of US stimulus package, we present sectors which have been the major
beneficiaries of FII flows:
Private financials, Utilities, Technology and Automobiles were the top sectors
seeing maximum FII inflows during CY09-CY13. Higher flows in Utilities was mainly
driven by Coal India's IPO bringing in USD2.5b.
Top 5 sectors received USD44.4b, more than 50% of the total FII flows giving healthy
market returns.
Surprisingly, the sectoral FII flows do not coincide with the sector performance
indicating that mere FII flows are not a determinant of stock performance.
3 out of the top 4 stocks comprised of Private Financials led by HDFC, Axis Bank
and HDFC Bank on account of consistently higher NII growth and stable asset
quality.
Bharti Airtel saw net FII outflow of USD1.4b over this period due to significant
growth concerns led by increased competitive scenario.
January 2014
A48
Analysis methodology
For the companies that constitute the BSE-200, we have calculated the quarterly
change in the number of shares owned by FIIs and multiplied it by the average price
for the quarter to derive the FII flows for the quarter. Our calculations may differ
from the actual FII flows due to the assumptions on purchase price and exchange
rate. For sectoral FII flow analysis, we have rebased our computed sector FII flows
for the BSE-200 companies to the total market FII flows for each of the years.
Private financials, Consumer, Technology are the biggest beneficiaries
Top 5 sectors received more than 50% of the total FII flows (USD b)
January 2014
A49
Sectoral FII flows (USD b)

Sectors
NBFC
Banks - Pvt
Utilities
Technology
Automobiles
Health Care
Consumer
Oil & Gas
Real Estate
Metals
Banks - PSU
Cement
Capital Goods
Media
Telecom
Misc
Total
Cumulative
10.7
10.6
9.2
7.2
6.7
5.5
5.3
5.3
5.2
4.5
3.0
2.9
1.6
1.2
-0.4
6.0
84.4
Jan-Sep
2013
0.8
2.3
2.2
2.1
0.2
2.2
-0.9
1.4
0.5
-0.1
0.0
0.4
0.1
0.4
0.3
1.4
13.4
CY12
CY11
CY10
CY09
4.9
3.2
0.8
2.9
1.9
1.6
2.5
2.0
0.0
1.0
0.9
0.7
1.0
0.1
0.7
0.6
24.5
0.0
-0.2
0.1
0.1
0.0
0.0
0.5
-0.1
-0.1
-0.2
-0.6
0.0
-0.2
0.1
0.1
0.1
-0.5
3.9
3.6
6.3
0.2
2.9
0.8
2.0
0.8
0.5
0.9
1.8
1.5
-0.1
0.6
0.3
3.3
29.3
1.0
1.7
-0.1
1.9
1.7
0.9
1.3
1.2
4.3
2.9
0.9
0.2
0.8
0.0
-1.7
0.6
17.6
Price Relative
CAGR (%) perf (pp)
20.5
4.4
25.7
9.6
-2.0
-18.1
40.0
23.8
40.9
24.8
31.0
14.9
33.0
16.9
7.9
-8.3
-13.5
-29.7
10.3
-5.9
4.9
-11.2
29.8
13.7
2.6
-13.5
24.2
8.1
0.5
-15.6
NA
NA
16.1
Top 20 companies receiving FII flows
Top companies witnessing FII outflows
January 2014
A50
FIIs overweight on Private Banks, Autos; underweight on Oil & Gas, Capital
Goods
In this section, we present the sectors/stocks in which FIIs are underweight or
overweight relative to MSCI ETF and BSE-200.
Relative to MSCI weights: Our analysis suggests that FIIs are overweight on Private
Banks (459bp) and Auto (275bp) and underweight on Technology (414bp) and Oil &
Gas (298bp). Among stocks, FIIs are overweight on ICICI Bank (486bp), Tata Motors
(279bp) but underweight Reliance Ind (239bp), Infosys (177bp) and Wipro (109bp).
MSCI: Top 25 stocks comprising more than 75% of the total portfolio
Company name
Infosys
HDFC
Reliance Industries
HDFC Bank
Tata Consultancy Services
ITC
Hindustan Unilever
Sun Pharmaceutical Industries
Wipro
Larsen & Toubro
Mahindra & Mahindra
Tata Motors
HCL Technologies
Dr Reddy's Laboratories
State Bank of India
ICICI Bank
Kotak Mahindra Bank
Oil & Natural Gas Corp
United Spirits
Sesa Sterlite
Bharti Airtel
Tech Mahindra
Hero MotoCorp
Bajaj Auto
Cairn India
Total
Sectoral difference between MSCI weights and FII weights

(bp): FIIs were overweight Pvt Banks, Autos;
underweight Technology and Oil & Gas
MSCI weight (%)
FII weight (%)
10.8
7.9
7.7
7.0
6.8
4.8
2.5
2.4
2.3
2.3
2.0
1.9
1.8
1.7
1.6
1.6
1.6
1.5
1.5
1.4
1.3
1.3
1.1
1.1
1.0
77.0
9.1
8.3
5.3
6.8
5.8
5.0
2.0
2.7
1.2
1.3
2.0
4.7
1.9
1.9
1.2
6.5
1.5
1.4
1.5
1.3
1.9
1.0
1.2
1.0
0.9
77.2
FII weight relative

to MSCI ETF (bp)
-177
38
-239
-17
-105
21
-53
27
-109
-99
1
279
12
17
-40
486
-1
-8
0
-10
60
-34
5
-10
-17
Difference between MSCI weights and FII weights (bp): ICICI

Bank, Tata Motors saw higher FII interest, while RIL and
Infosys saw less favor
Note: FII weight is as on September 30, 2013. MSCI weights is based on the ETF weight of MSCI as on December 30, 2013
January 2014
A51
MOSL model
portfolio
January 2014
Sector / Portfolio Picks
Nifty-50
Financials
Private
HDFC Bank
ICICI Bank
NBFCs
HDFC
IDFC
LIC Housing
PSU
SBI
BOB
Technology
Infosys
TCS
Tech Mahindra
Auto
Tata Motors
Hero Motocorp
Maruti
Healthcare
Sun Pharma
Lupin
Divi's Lab
IPCA
Energy
Reliance Inds.
ONGC
BPCL
Consumer / Retail
ITC
Marico
Telecom
Bharti Airtel
Idea Cellular
Metals
NMDC
Hindalco
Infrastructure & Related sectors
Larsen & Toubro
ACC
Utilities
Coal India
Others
Sobha Developers
PVR
TVS Motor
Eicher Motors
Bata
Shree Cement
Crompton Greaves
SUN TV
Petronet
DB Corp
UPL
Cash
Total
26.1
16.2
6.0
6.1
6.7
6.0
0.7
0.0
3.2
2.2
0.6
16.9
8.1
5.4
0.0
8.9
3.3
1.2
1.1
6.0
2.1
1.0
0.0
0.0
11.7
7.1
2.5
0.4
11.6
8.6
0.0
1.9
1.9
0.0
4.4
0.5
0.8
8.4
4.2
0.5
4.0
0.9
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
100.0
MOSL Wt
25.0
14
7
7
7
3
2
2
4
2
2
17.0
8
5
4
9.0
4
3
2
8.0
3
2
2
1
8.0
3
3
2
7.0
6
1
5.0
3
2
4.0
2
2
4.0
2
2
2.0
2
11.0
1
1
1
1
1
1
1
1
1
1
1
0.0
100.0
Wt relative to Nifty-50
-1.1
-2.2
1.0
0.9
0.3
-3.0
1.3
2.0
0.8
-0.2
1.4
0.1
-0.1
-0.4
4.0
0.1
0.7
1.8
0.9
2.0
0.9
1.0
2.0
1.0
-3.7
-4.1
0.5
1.6
-4.6
-2.6
1.0
3.1
1.1
2.0
-0.4
1.5
1.2
-4.4
-2.2
1.5
-2.0
1.1
11.0
1.0
1.0
1.0
1.0
1.0
1.0
1.0
1.0
1.0
1.0
1.0
0.00
Sector Stance
Neutral
Neutral
Buy
Buy
Neutral
Buy
Buy
Buy
Neutral
Buy
Buy
Overweight
Buy
Neutral
Buy
Overweight
Buy
Buy
Buy
Overweight
Buy
Buy
Buy
Buy
Underweight
Neutral
Buy
Buy
Underweight
Buy
Buy
Overweight
Buy
Buy
Neutral
Buy
Buy
Underweight
Buy
Buy
Underweight
Neutral
Overweight
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Buy
A52
3QFY14 PREVIEW Theme similar to 2Q: Globals do, locals undo

2Q earnings rebound sustained; Aggregate PAT up 10%; Sensex PAT up 13%
We expect MOSL Universe of 143 companies (ex RMs) to report aggregate 3QFY14 PAT
growth of 10% YoY, sustaining the earnings rebound in 2QFY14 (+8% YoY v/s estimated
3% YoY). 4QFY14 PAT growth is expected to be an even higher 13% YoY.
As in 2Q, expect global-facing sectors like Technology, Healthcare and Metals to outperform
their domestic-facing counterparts thanks to 15% YoY depreciation of the INR vis--vis
the USD.
Expect Sensex 3QFY14 PAT to grow 13% YoY.
Within Sensex, top 5 PAT growth companies are: Tata Steel (loss to profit), Bharti (+299%
YoY), Tata Motors (+89%), TCS (+48%) and Sun Pharma (+44%). Top 5 PAT de-growth
companies: BHEL (-56% YoY), State Bank (-33%), Sesa Sterlite (-21%), Tata Power (-10%)
and Coal India (-8%).
Macroeconomic backdrop: Adverse for locals, favorable for globals

The macroeconomic backdrop for 3QFY14 has remained adverse for most domestic
businesses; however, economic recovery in the developed world and the strong dollar
favored specific global-facing sectors and companies.
IIP remained at almost zero, with no improvement in the investment climate
Festival demand was unexciting; no boost for sectors like Autos, Cement and Real
Estate
INR though sequentially stable was still down 15% YoY
Western economies are in strong recovery mode.
YTDFY14 IIP growth is 0%
INR is stable sequentially but still down about 15% YoY

USD/INR - Qtr average
Expect 3QFY14 Aggregate PAT to grow 10% YoY; Sales growth is strong at
12%
We expect MOSL Universe of 143 companies (excluding RMs i.e. 3 major oil refining &
marketing companies IOC, BPCL, HPCL) to report aggregate 3QFY14 PAT growth of 10%
YoY. This sustains the earnings rebound witnessed in 2QFY14 (+8% YoY v/s estimated
3% YoY), following 6 successive quarters of lower earnings growth culminating in 2%
YoY de-growth in 1QFY14. Sales growth is at 12%, while EBIDTA growth is 13%. 4QFY14
PAT growth is expected to be an even higher 13% YoY, driving 2HFY14 PAT growth to
January 2014
A53
12% YoY (v/s 2% YoY for 2HFY13 and 4% YoY for 1HFY14). Full year FY14 PAT growth is
estimated at 7% YoY v/s 3% in FY13. FY15 PAT growth is estimated at 16% and early
estimates for FY16 suggest this growth momentum will be sustained.
Analyzing the Dec-13 quarter results by sector clearly suggests the significant role of
the global hand i.e. gradually economic recovery in the developed world and the
strong US dollar.
Technology, Metals and Healthcare all USD-led revenue sectors are expected
to report PAT growth of over 30%, predictably benefiting from the weaker INR YoY.
Interestingly, even the high 42% YoY PAT growth of the Auto sector has multiple
aspects of global hand/currency at play: (1) Tata Motors PAT (50% of Auto sector
PAT) is expected to grow 89% YoY led by US-subsidiary JLR, (2) Bajaj, despite 4%
sales de-growth, is expected to report 6% PAT growth due to high margins on
exports led by weak INR, and (3) Both Maruti Suzuki and Hero MotoCorp are
beneficiaries of the strong USD vis--vis the yen, ensuring that EBITDA and PAT
growth is much higher than revenue growth.
Within domestic businesses, the underlying trend for the 3-4 quarters is the gross
underperformance of cyclicals vis--vis the seculars:
Cement, PSU Banks, Real Estate and Capitals Goods are the top PAT de-growth
sectors by far.
The Financials sector overall is expected to report PAT de-growth (-4% YoY) for the
second quarter in succession. However, within Financials, NBFCs (PAT +16% YoY)
and Private Banks (PAT +14% YoY) are likely to deliver much superior performance
than the cyclically more vulnerable PSU Banks (PAT -29% YoY).
3QFY14 performance of MOSL Universe by sector: Globals do, locals undo
SECTOR
(no. of companies)
High growth sectors
Telecom (4)
Auto (9)
Technology (10)
Metals (9)
Health Care (13)
Media (7)
NBFC (8)
Med/Low growth sectors
Private Banks (8)
Consumer (13)
PAT de-growth sectors
Retail (4)
Oil Excl. RMs (9)
Utilities (10)
Capital Goods (8)
Real Estate (9)
PSU Banks (8)
Cement (8)
Others (6)
Sensex (30)
January 2014
Dec-13
Sales
YoY %
3,382
368
1,005
517
1,127
233
41
90
491
153
338
3,332
67
1,780
601
364
49
293
176
62
7,266
5,003
17
12
16
30
13
22
18
19
14
19
12
8
-6
10
8
1
18
12
-2
14
12
13
EBITDA
Dec-13
YoY %
774
122
139
143
219
53
13
85
205
132
73
703
6
273
161
34
17
185
26
11
1,692
1,071
29
23
39
37
28
27
15
20
16
18
14
-1
-1
1
4
-15
42
-3
-24
17
13
14
PAT
Dec-13
YoY %
372
23
65
106
82
35
6
55
129
78
51
355
3
166
91
21
6
58
10
6
861
563
37
163
42
39
36
30
22
16
14
14
13
-10
0
0
-2
-23
-27
-29
-38
22
10
13
PAT
Share %
Delta
Share %
43
3
8
12
10
4
1
6
15
9
6
41
0
19
11
2
1
7
1
1
100
131
19
25
39
28
10
1
10
20
12
8
-53
0
0
-2
-8
-3
-31
-8
1
100
EBITDA Margins
Dec-13
YoY bp
22.9
33.1
13.8
27.7
19.4
22.7
30.6
94.1
41.7
86.4
21.5
21.1
9.4
15.4
26.8
9.3
35.1
63.2
14.5
17.5
23.3
21.4
217
306
230
144
217
99
-85
96
97
-68
46
-188
51
-142
-112
-178
587
-959
-421
53
19
27
A54
Dec-13 quarter pat growth should improve to 10% YoY; still, well below LPA of 14%
Earnings growth seems to have bottomed out; expect mean reversion to 15-17% levels
Dec-13 quarter sales growth, well below LPA of 21%
Dec-13 quarter EBITDA growth at 13% YoY; 12th consecutive quarter growth below LPA of 17%
January 2014
A55
Dec-13 EBITDA margin (ex RMs and Financials) at 19.2%; below LPA for several quarters now
Dec-13 PAT margin (ex RMs and Financials) at 10.1%; below LPA for several quarters now
% Revison in 2HFY14E sector PAT in last 3mth % Revison in 2HFY14E companies PAT in last 3mth
Companies reporting PAT de-growth lowest in the last 10 quarters

The distribution of PAT growth also suggests a major improvement over recent quarters
Firstly, 29% of 146 companies in MOSL Universe are expected to report PAT degrowth. This is the lowest level in the last 11 quarters.
January 2014
Likewise, 42% of companies are likely to see PAT growth higher than 15% which is
marginally higher than the preceding 3 quarters.
An interesting observation is that 47-48% of the companies lie in the PAT growth
band of 0-30%. This is among the highest ever, indicating that increasingly, PAT
growth will veer around the long-period mean of 15%.
A56
PAT distribution improving; fewer companies reporting PAT de-growth
Expect Sensex PAT growth of 13% YoY; further acceleration to 16% in 4Q

Based on bottom-up estimates of its 30 constituent companies, Sensex 3QFY14
PAT is expected to grow 13% YoY. This is the highest growth in the last 6 quarters.
For 4QFY14, PAT growth is expected to be even higher at 16% YoY, lends further
credence to mean reversion of earnings growth to 15-17% levels.
Sales growth for Sensex-30 is also strong at 13%, while EBIDTA growth is 14%.
While EBIDTA margins are up 27bps YoY to 21.4%, PAT margins are stable at 11.2%.
Several companies will report big growth numbers due to a very low base. The top
5 PAT growth companies are expected to be: Tata Steel (loss to profit), Bharti
(+299% YoY), Tata Motors (+89%), TCS (+48%) and Sun Pharma (+44%). Few other
strong growing names are: Maruti (31%), HDFC Bank (25%), Hero Moto (22%) and
Dr Reddys (24%).
The top 5 PAT de-growth companies are expected to be largely cyclicals: BHEL (56% YoY), State Bank (-33%), Sesa Sterlite (-21%), Tata Power (-10%) and Coal India
(-8%).
Expect 3QFY14 Sensex PAT growth of 13% YoY, the highest in the last 6 quarters
January 2014
A57
Sensex Companies 3QFY14E Performance (INR b)

Company
Sales
Dec-13 Var % YoY
EBITDA
Dec-13 Var % YoY
PAT
Dec-13 Var % YoY
High PAT Growth (8)

2,063
20
424
37
Tata Steel
362
13
42
87
Bharti Airtel
220
14
71
22
Tata Motors
604
31
88
55
TCS
214
33
68
46
Sun Pharma
39
44
16
37
Maruti Suzuki
109
-3
13
41
Hindalco
217
11
22
27
HDFC Bank
47
18
37
19
Dr Reddy s Labs
36
25
8
36
Hero Motocorp
68
10
7
40
Infosys
130
25
35
19
HDFC
17
13
18
14
Med/Low PAT Growth (10)
970
7
320
8
ITC
85
10
33
14
Axis Bank
30
20
28
20
ICICI Bank
43
22
41
20
NTPC
170
8
39
-2
Mahindra & Mahindra
102
-1
16
14
Hind. Unilever
73
10
12
10
Bajaj Auto
52
-4
11
10
Cipla
27
28
6
19
ONGC
221
5
117
4
Larsen & Toubro
168
9
17
6
Negative PAT Growth (12)
1,857
9
305
-4
GAIL
150
21
21
9
Reliance Inds.
1,019
9
73
-13
Coal India
184
6
45
6
Tata Power
98
8
17
-10
Sesa Sterlite
196
15
67
15
State Bank
127
14
71
-8
BHEL
84
-16
9
-45
Sensex (29)
4,890
13
1,048
14
Note: For Financials, Sales represents Net Interest Income, and EBITDA
PAT Contb.
(%)
Gr. (%)
203
59
37
8
LP
1
11
299
2
33
89
6
53
48
10
12
44
2
7
32
1
6
30
1
23
25
4
5
24
1
6
22
1
28
17
5
13
15
2
188
8
35
23
14
4
15
13
3
25
12
5
25
11
5
10
11
2
9
8
2
9
6
2
4
6
1
58
4
11
11
3
2
151
-16
28
12
-4
2
52
-5
10
43
-8
8
2
-10
0
13
-21
2
23
-33
4
5
-56
1
543
13
100
represents Operating Profit
124
25
14
25
28
6
3
2
8
1
2
6
3
24
5
3
4
4
2
1
1
0
3
1
-48
-1
-5
-7
0
-6
-18
-11
100
EBITDA margin
Dec-13 Var (bp)
21
12
32
15
32
40
12
10
80
22
11
27
104
33
39
95
97
23
15
17
21
22
53
10
16
14
7
25
17
34
56
11
21
261
458
228
223
276
-210
358
131
114
170
232
-144
86
32
144
-3
-198
-220
197
14
263
-177
-80
-29
-218
-153
-173
1
-332
10
-1373
-566
18
Nifty and the dollar divide: Trend of 2QFY14 continues in 3QFY14 too
In 2QFY14, the sharp currency depreciation had played a very important role in
driving the Nifty earnings. Even though in 3QFY14, the INR has remained stable
QoQ, it remains significantly depreciated on a YoY basis, which is still fuelling the
aggregate growth.
We classified the 50 Nifty companies into (1) USD-denominated and (2) Others.
The USD-denominated Nifty includes Technology, Healthcare, Metals, Oil & Gas
(Reliance, Cairn) and Tata Motors JLR operations and this now constitutes 42-44%
of the total Nifty earnings. The key findings are as under USD-denominated Nifty is expected to clock aggregate PAT growth of 29% YoY,
whereas others are likely to see flat PAT growth. Sales growth for USD will be 19%,
while for others growth is 8%.
Such a steep depreciation of the rupee will lead to a 120bps YoY margin expansion
for USD- denominated companies, while the domestic businesses will see a drop
of 30bps.
January 2014
A58
We expect the YoY currency impact to benefit the USD-denominated Universe for
another two quarters. This is built in our 25% growth in earnings for them in 4Q
also. However, the domestic businesses will see a marginal rebound in growth
rates to 10% in 4Q, still underperforming the aggregate Universe.
Nifty - USD sales growth poised to sky-rocket
but no major impact on margins
EBITDA growth in line with sales growth for USD & non-USD
Expect USD PAT growth to be much higher than non-USD
OVERALL
Expect Technology, Consumer, Private Financials (Banks, NBFCs) and Media to
clock their highest ever sector PAT in a quarter.
Autos and Healthcare should see the highest ever December quarter PAT. In
contrast, for Cement , this is the lowest ever December quarter PAT since 2006,
and for Capital Goods since 2008.
Consumer, Technology and Telecom are the only sectors where all companies are
expected to clock positive PAT growth.
Only one company is expected to de-grow PAT in each of Healthcare (GSK Pharma)
and Private Banks (Federal Bank). In contrast, in PSU banks, only one company is
expected not to de-grow (Union Bank, that too a marginal 2% YoY PAT growth).
January 2014
A59
3QFY14 Sales growth by sector (%)
3QFY14 EBITDA Margin YoY delta by sector (bp)
3QFY14 EBITDA growth by sector (%)
3QFY14 PAT growth by sector (%)
Contribution to 3QFY14 PAT growth by sector (%)
Sector mix of 3QFY14 PAT (%)
January 2014
A60
Other sector
highlights
AUTOS
PAT growth of 42% YoY is primarily led by 89% YoY growth in Tata Motors PAT on the
back of JLR. Ex Tata Motors, sector PAT growth is 13%, driven by Maruti Suzuki (32%
YoY) and Hero Moto (22% YoY) benefitting from favorable JPY movement.
Ashok Leyland and Tata Motors (standalone) are expected to report QoQ increase
in losses on the back of low volumes and higher discounting pressure.
Two-wheelers: After negative growth in FY13 and expected muted growth of 9%
in FY14, two-wheeler PAT should see a bounce back in FY15 on the back of:
(1) Expected revival in volumes with improvement in macro-economic and
consumer sentiments,
(2) Significant reduction in royalty payments for Hero MotoCorp, and
(3) Continued benefit of weak INR reflecting in Bajaj Autos profits from exports.
AUTOS: Highest ever December quarter PAT
CAPITAL GOODS
Facilitation of Project Monitoring Group (PMG) in getting mandatory approvals for
INR 340b for infrastructural projects was the key positive to be highlighted for
3QFY14. However, we await more clarity on the incremental pace of project
execution post the same.
Given strong sectoral headwinds, we expect marginal revenue growth for 3QFY14
leading to 15% YoY EBITDA de-growth and 23% YoY PAT de-growth. Amidst turmoil,
expect L&T to stand firm and maintain PAT YoY.
Key triggers to watch: (1) Order inflow guidance by ABB and Siemens, especially
for short-term gestation orders, and (2) Volume guidance by Cummins because of
implementation of CPCB 2 norm.
CAPITAL GOODS: Lowest Dec quarter PAT since 2008
January 2014
A61
CEMENT
Expect all companies (except Birla Corp) to clock YoY PAT de-growth; many midcaps will even post QoQ de-growth.
Non-recovery of cement demand post monsoon, leading to price roll back was a
negative surprise. As a result, hope of sector recovery in 4QFY14 remains uncertain.
CEMENT: Lowest Dec quarter PAT since 2006
CONSUMER
Expect 12% sales growth and 15% PAT growth for the sector led by ITC (+14%),
Godrej Consumer (+37%) and Britannia (+62%).
Volume growth should mirror 2QFY14, and rural-urban gap in growth rates should
narrow.
Expect soft commentary/guidance for topline growth from FMCG managements.
CONSUMER: Highest ever PAT in a quarter
FINANCIALS
State-owned banks: Earnings pressure should continue (PAT down 30% YoY) on
the back of lower NIM YoY, higher NPA provisions and MTM losses on their securities
portfolio. But the key here is expected stabilization in core operations and asset
quality trend which would be viewed positively despite lower earnings growth.
Private banks: Despite NII growth of 19% and PPP growth of 18%, PAT growth is
expected to moderate to 14% YoY given higher credit cost. HDFCB PAT growth is
expected to be highest among peers at 25% YoY.
NBFC: Expect health PAT growth of 16%+ YoY led by state-owned power financiers
(PFC, REC) and strong growth in LICHF and MMFS.
January 2014
A62
PRIVATE FINANCIALS (BANKS, NBFCs): Highest ever PAT in a quarter
HEALTHCARE
Expect a strong quarter as slowing revenue growth in India (due to new pricing
policy) will be more than offset by high growth in US and emerging markets.
EBITDA margins should expand 100bp YoY, primarily driven by (1) 14.5% YoY
depreciation in USD/INR, and (2) improving sales mix. Ranbaxy and Divis Labs are
also expected to benefit from low-base effect.
Further, INR has remained flat QoQ; hence, major MTM loss on forex liabilities is
unlikely. Expect sector PAT to grow 30% YoY, higher than EBITDA growth of 27%.
Key outperformers are expected to be Ranbaxy, Dr Reddys, Glenmark and Divis.
GSK Pharmas operations may continue to be impacted by supply-chain and tradechannel related issues
HEALTHCARE: Highest ever December quarter PAT
METALS
Expect health growth in Sales (+13% YoY) and PAT (36% YoY) on the back of profit
rebound in JSW Steel, Nalco, SAIL, Hindalco and NMDC. However, QoQ Sales will
likely remain flat and PAT up 6%.
Ferrous: Most steel producers are expected to report flat QoQ volumes while
margins are expected be higher due to higher realizations.
Non-ferrous: Realizations will be better QoQ for zinc and lead but flat for
Aluminum. Overall, expect PAT to remain almost flat QoQ (+2%).
January 2014
A63
TELECOM
PAT is expected to grow 164% YoY and 54% QoQ given significant operating and
financial leverage.
Finance costs are expected to decline YoY led by lower leverage and relief on
forex losses given stable USD/INR during 3QFY14.
TELECOM: Highest ever quarter PAT since December 2010
MEDIA: Highest ever PAT in a quarter
January 2014
A64
Intra-sector 3QFY14 earnings divergence (%)

Sectors
Sector
Growth (%)
High growth sectors

Telecom
163
Autos
42
Metals
36
Technology
35
Healthcare
30
Media
22
NBFC
16
+30% Growth
BHARTI: 299, RCOM: 188,

IDEA: 121, BHIN: 39
Tata Motors: 89,
EIM: 29, TVSL: 24,
Maruti: 32
HMCL: 22
JSW Steel: 121,
Hindalco: 30,
SAIL: 31, Tata Steel: LP
NMDC: 22
TECHM: 132, HCLT: 49,
Infosys: 17
TCS: 48
CDH: 46, SUNP: 44.
Dr. Reddy's: 24,
IPCA: 35, Lupin: 35,
DIVI: 23,
Ranbaxy Labs: LP
Biocon: 20
PVR: 146,
D B Corp: 17
Jagran Prakashan: 48
LIC Housing: 43
MMFS: 25, BAF: 22,
PFC: 20, REC: 19
Medium/Low growth sectors

Banks-Private
14
Consumer
13
PAT degrowth sectors

Cement
-38
15-30% growth
Britannia: 63,
GCPL: 37
HDFC Bank: 25,

IndusInd Bank: 19
United Spirits: 19,
Dabur: 17,
Pidilite Inds: 17
-ve earnings
growth (%)
Earnings
momentum
4 0
M&M: 11,
Bajaj Auto: 6
Hind. Zinc: 9
KPIT: 11, PSYS: 6,
MPHL: 4
Glenmark: 12,
Cipla: 6
Zee Ent.: 12,
HT Media: 9
HDFC: 15
Ashok
2 4
Leyland: Loss
Sesa Sterlite: -21,
2
4
JSPL: -22
AXSB: 13, ICICIBC: 12, Federal Bank: -21

YES: 11, KMB: 0
ITC: 14, APNT: 9,
NEST/HUVR: 8,
MRCO:7
Birla Corp: 11
1 2
0
5
Sun TV: -1,
Dish TV: Loss
SHTF: -3,
IDFC: -5
0 0
4
4 1
GSK Pharma: -36
ACEM: -29, ACC: -33,

SRCM: -35,
UTCEM: -48
Banks - PSU
-29
Union Bank: 2
BOB: -4,
OBC:-23, BOI:-24,
SBI: -33, PNB: -42
Real Estate
-27
MLIFE: 28,
GPL: 10, PHNX: 5,
PEPL: -16,
IBREL: 19
Sobha Dev.: 2
OBER: -35, DLF: -60
Capital Goods
-23
Crompton: 315,
Havells India: 23
L&T: 3
TMX: -2, KKC: -24,
ABB: 238
BHEL: -56
Utilities
-2
CESC: 26,
PTCIN: 15, NTPC: 11, COAL: -8, TPWR: -10,
PWGR: 8, NHPC: 5
JSW: -18,
RELI: -20
Retail
-0.1
Shopper's Stop: 32
Jubi. Foodworks: 9, Future Retail: PL
Titan: 1
Oil & Gas
-0.1
MRPL: LP
IGL: 10, ONGC: 4,
GSPL: -3, GAIL: -4,
(Ex RMs)
Oil India: 0
RIL: -5%, CAIR: -7
PLNG: -53
Earnings momentum: Represents number of companies in each of the growth brackets; PL: Profit to Loss; LP: Loss to
January 2014
Grasim: 25
0-15% growth
2 1
2 2
1 2
5 1
7
3 3
0 0
0
1 7
2 3
4
2 1
0 1
1 0
1
1 4
4 5
2 1
0 3 5
Profit
A65
FY14/15 ESTIMATES Downgrades take a breather as exports fuel growth

Sensex FY14 EPS upgraded to 11% growth; Expect FY15 growth of 15%
MOSL Aggregate PAT to grow 7% in FY14; expect rebound in FY15 to 16%. Sales growth of
12% in FY14 will see some moderation to 10% in FY15.
Sensex EPS to grow by 11% in FY14 to 1,317 and further accelerate to 15% in FY15 to
1,518. Downgrades to Sensex EPS have taken a breather. In fact, strong earnings from
export driven businesses (benefitting from weak INR) have led to upgrades of 2% in FY14
and 3% in FY15 EPS.
For 2HFY14, the prominent upgrades have been in Tata Motors, Tata Steel, ICICI Bank,
Maruti, TCS. The stocks to see top downgrades are Sesa Sterlite, BHEL, SBI, Cipla, Coal
India.
Our early estimates suggest the growth of 15% may continue into FY16 as well.
Aggregate PAT to grow 7% in FY14; expect rebound in FY15 to 16%

Based on bottom-up estimates, we expect MOSL Universe of 156 companies (ex RMs)
to report aggregate FY14 PAT growth of 7% YoY. Growth is dragged down by two major
factors
First ever de-growth in Financials (-2%), a heavyweight sector accounting for 25%
of FY13 Aggregate PAT; and
Low 7% growth in Oil & Gas (ex RMs), which has the second highest share of FY13
Aggregate PAT (18%).
In FY15, aggregate PAT growth is expected to rebound to 16%, largely led by a bounce
back in these very two sectors, coupled with Telecom re-entering the high profit
growth zone following easing up of competitive intensity. Few domestic cyclicals
(Capital Goods, Cement) will also contribute to growth, post a sharp decline in FY14.
The export facing sectors growth rates will moderate as we build stable currency in
FY15 over FY14 (growth in FY14 was significantly aided by a big currency depreciation).
Expected FY14 PAT growth muted at 7%....
January 2014
.sales growth also at 12%
A66
MOSL Universe FY14/FY15 estimates: Expect 16% PAT growth in FY15

Sales Gr./
EBIDTA
Margin
EBIDTA
PAT
PAT Gr. /
PAT
Sales
CAGR
EBIDTA Margin
Delta
CAGR (INR
CAGR
delta
Sector
(INR b)
(%)
(INR b)
(%)
(bp)
(%)
b)
(%)
FY13-15
(No of Companies)
FY13 FY14E FY15E FY13-15 FY13 FY13 FY14E FY15E (FY13-15) FY13 FY14E FY15E FY13-15 shr (%)
High PAT CAGR (>20%)
2,752
8
12
10
744 27.0
-7 151
13 204
3
46
22
12
Telecom (4)
1,306
11
10
11
397 30.4
274 144
18
45
82
65
73
11
Cement (13)
1,108
0
14
7
235 21.2
-474 200
0 111
-33
38
-4
-1
Real Estate (9)
195
18
13
16
71 36.5
17 147
18
30
1
29
14
1
Media (8)
143
17
14
16
41 28.7
85
61
19
19
25
25
25
1
Medium PAT CAGR (15-20%) 10,028
16
14
15 3,159 31.5
5
13
16 1,788
11
16
14
62
Retail (3)
137
15
21
18
14 10.1
-42
31
17
9
6
19
12
0
Consumer (13)
1,190
11
15
13
242 20.4
56
23
15 166
15
19
17
7
Health Care (13)
791
19
14
16
194 24.5
-99 192
19 110
28
18
23
7
Financials (31)
2,197
14
15
15 1,735 79.0
-323
11
12 904
-2
16
6
14
PSU Banks (12)
1,359
11
14
12
997 73.4
-657
2
7 432
-23
18
-5
-5
Private Banks (10)
541
19
17
18
452 83.5
238
-3
20 278
17
16
16
12
NBFC (9)
296
22
15
18
286 96.4
-149
4
17 193
16
13
15
7
Auto (9)
3,773
13
15
14
484 12.8
165
2
21 228
25
16
20
12
Technology (10)
1,940
27
12
19
489 25.2
102
-31
21 372
30
15
22
22
Low PAT CAGR (<15%)
15,212
9
6
8 2,717 17.9
-47 102
9 1,461
3
11
7
25
Metals (9)
4,205
7
9
8
792 18.8
61
57
11 308
6
12
9
7
Oil Ex. RMs (10)
7,416
14
4
9 1,132 15.3
-100 141
10 642
7
12
9
15
Utilities (10)
2,015
6
12
9
603 29.9
80
11
11 377
4
11
8
7
Capital Goods (8)
1,576
-1
3
1
189 12.0
-201
-20
-9 134
-26
1
-13
-4
Others (6)
210
12
11
12
35 16.8
66
70
16
20
11
18
14
1
28,202
12
10
11 6,654 23.6
-6
96
13 3,473
7
16
11
100
Sensex (30)
9,633
6
9
8 1,875 19.5
130 100
14 1,011
9
15
12
NA
Nifty (50)
10,889
13
9
11 2,170 19.9
97 103
17 1,182
12
15
14
NA
50% of FY13-15 PAT delta comes from just 3 sectors

Technology, Oil & Gas, Financials
Sectorwise PAT CAGR (%)
FY14/15 Sector earnings: Interesting observations

TELECOM: After four consecutive years of PAT decline, easing competitive pressure
should cause Telecom sector profits to rebound sharply in FY14 and FY15 with
growth rates of 65-81% per annum. Bharti will lead this growth as earnings grow
by 51% in FY14, 73% in FY15.
AUTO: After negative growth in FY13, the sector earnings rebounding with 25%
growth in FY14 and extending by 16% further in FY15. While Tata Motors and M&M
are the growth drivers in FY14, Hero and Maruti will lead the earnings in FY15 on
the back of: (1) Healthy monsoon reviving volume growth, especially in rural India,
January 2014
A67
(2) No royalty burden for Hero MotoCorp, and (3) Full benefit of INR benefits in
Maruti's earnings.
CEMENT: Like Autos, even Cement would benefit from expected higher rural
demand in FY15 on the back of good monsoon led higher rural GDP growth. This
should help the sector reverse the muted PAT performance of the preceding years
i.e. 4% growth in FY13 and 33% de-growth in FY14. We expect growth to revive by
38% in FY15.
FINANCIALS: The sector will report its first decline of 2% in FY14, but should see
growth rebounding to 16% in FY15 as credit cost pressure eases on PSU Banks.
Private Banks will grow at 15-17% in both the years. Economic recovery could lead
to upgrade in their estimates in 2HFY15.
HEALTHCARE v/s TECHNOLOGY: In FY14, both Healthcare and Technology sectors
are expected to clock similar healthy growth rates of 28-29%, on the back of weak
INR. Going forward, our numbers do not factor in further weakening of the INR.
This will lead to moderation in growth rates in FY15 to 14-18% for these two sectors.
FY13-15 Sensex EPS CAGR at 14%

We now expect Sensex EPS CAGR of 14% over FY13-15, up from the estimate of 11%, a
quarter back. As the growth rates revert back to the long-period mean of 15%, the
composition has significantly shifted in favor of the export facing sectors.
We believe that clarity on domestic investment climate will be important, post the
Elections 2014 for the domestic businesses to see any recovery, that can further aid
the growth rates in 2HFY15.
FY08-13 EPS CAGR at 7%; expect rebound in FY13-15
January 2014
A68
Sensex Perfomance: Expect FY13-15 PAT CAGR of 14%
Company
Sales
EBIDTA EBITDA
Sales (INR b)
CAGR Margin (%)
CAGR
FY13
FY14 FY15
% FY14 FY15
%
High PAT Growth (20%+)
5,171
Bharti Airtel
Hero MotoCorp
Sesa Sterlite
HDFC Bank
State Bank
Maruti Suzuki
ONGC
Larsen & Toubro
Medium PAT Gr. (10-20%)
Infosys
NTPC
ITC
Bajaj Auto
Sun Pharma
Tata Steel
Dr Reddys Labs
Hindalco
TCS
HDFC
Reliance Inds.
Axis Bank
Wipro
M&M
Cipla
ICICI Bank
Hind. Unilever
Low PAT Growth (<10%)
Tata Motors
Coal India
Tata Power
GAIL
BHEL
Sensex (PAT free float)
769
236
722
158
612
442
1,624
609
9,860
404
647
299
200
112
1,347
116
802
630
62
3,603
97
374
687
83
139
258
3,624
1,888
683
96
473
484
18,655
5,616
6,247
10
862
951
253
289
721
829
186
226
684
764
442
498
1,810 1,950
658
738
11,063 11,812
505
565
660
759
331
380
203
234
160
190
1,425 1,467
136
153
868
991
824
944
71
82
4,043 3,982
118
135
435
490
735
815
102
115
166
191
281
319
4,114 4,588
2,331 2,720
711
755
105
115
570
671
396
326
20,793 22,647
11
11
7
20
12
6
10
10
9
18
8
13
8
30
4
15
11
22
15
5
18
14
9
18
17
11
13
20
5
10
19
-18
10
32.3
33.5
11
32.3 33.7
11.0 13.5
36.3 35.3
76.1 79.4
57.9 59.9
12.0 12.8
32.4 34.1
10.3 10.3
18.0 19.3
26.7 27.6
25.0 24.8
37.0 36.9
20.7 20.7
43.2 41.8
11.5 12.4
21.8 22.5
10.0 11.3
30.9 29.7
106.4 106.4
7.5
9.0
97.6 96.7
22.2 22.1
13.2 13.6
23.1 22.8
97.7 96.6
15.8 15.8
17.4 16.6
16.2 15.5
27.6 27.7
23.4 22.4
12.5 10.6
11.9 10.3
21.7 22.7
17
32
7
25
5
22
10
9
15
16
5
15
15
27
21
18
18
25
14
8
19
18
10
9
18
12
10
26
8
13
6
-40
13
PAT (INR b)
FY13 FY14 FY15
668
658
825
PAT
PAT Contbn %
YoY (%)
CAGR to FY15
FY14 FY15
%
delta
-2
25
11
47
23
36
63
58
21
23
31
7
62
56
72
-9
67
85
106
27
179
134
163
-25
24
29
35
20
242
255
306
5
49
40
48
-18
1,040 1,238 1,417
19
94
105
125
12
86
95
112
10
74
85
99
14
30
33
39
9
31
46
53
50
2
39
46 2,476
15
19
22
27
32
25
28
-24
139
189
216
36
48
54
62
12
210
217
246
3
52
60
68
16
61
77
86
25
36
46
51
26
11
15
17
32
83
97
107
17
33
35
39
8
395
412
418
4
103
146
157
41
177
180
193
2
9
9
8
-4
40
42
37
5
66
35
24
-46
977 1,097 1,265
12
75
36
27
25
22
22
20
20
14
19
18
17
17
17
16
16
14
14
14
14
13
12
11
11
10
10
2
8
7
-4
-13
-33
15
66
21
8
26
-5
21
12
-1
17
15
14
16
13
32
447
22
-7
24
13
8
15
19
18
21
13
9
3
23
4
-4
-4
-40
14
8
2
4
6
8
2
15
2
51
6
5
4
2
2
2
1
1
8
2
8
2
3
1
0
3
1
2
3
4
0
-2
-3
100
FY14 Sensex EPS up by 2%, ending the downgrade phase

Over the last 3 months, Sensex EPS for FY14 has seen an upgrade of 2% from 1,289 to
1,317. This upgrade has happened after a full 12 months of downgrades in the earnings
cycle. This upgrade could be attributed to companies benefiting from global businesses
or weak INR trends. Even, few domestic businesses such as Private Banks and four
wheelers have weathered this downturn well and have now seen an upgrade in their
earnings.
January 2014
A69
2% upgrade in FY14 Sensex EPS since September 2013
Sensex companies FY14E EPS Upgrade/Downgrade in last 3 months (%)
Stock-wise contribution to growth in FY14E Sensex EPS (INR)
FY15 Sensex EPS upgraded by 3%, led by Autos, Private Banks

Sensex EPS for FY15 has seen an upgrade of 3%, and we now expect growth of 15% to
1,518. The top upgrade drivers have been from Autos, Private Bank and INR
beneficiaries. Several of the cyclical continue to see downgrades in their estimates,
both global and domestic. The contributors to the growth in FY15 are from HDFC Bank,
Infosys and Reliance, unlike FY14 where the top 2 contributors were the cyclicals.
The top 3 Sensex companies to grow in FY15 are Bharti, Hero Motocorp, HDFC Bank.
Companies that will underperform are BHEL, GAIL and Tata Power.
January 2014
A70
3% upgrade in FY15 Sensex EPS since September 2013
Sensex companies FY15E EPS Upgrade/Downgrade in last 3 months (%)
Stock-wise contribution to growth in FY15E Sensex EPS (INR)
January 2014
A71
T H I S S PA C E I S I N T E N T I O N A L LY L E F T B L A N K
January 2014
A72
December 2013 Results Preview
MOSL Universe:
3QFY14 Highlights
&
Ready Reckoner
Note: In our quarterly performance tables, our four-quarter numbers may not always add up to the full-year
numbers. This is because of differences in classification of account heads in the companys quarterly and
annual results or because of differences in the way we classify account heads as opposed to the company.
All stock prices and indices as on 27 December 2013, unless otherwise stated.
January 2014
MOSL Universe
MOSL Universe: 3QFY14 aggregate performance highlights (Ex RMs)

Quarter-wise sales growth (% YoY)
Quarter-wise net profit growth (% YoY)

13.2%
9.9%
12.4%
8.2%
9.0%
1.6%
3.8%
-3.0%
Ma r-13
June-13
Sep-13
Dec-13E
Mar-13
June-13
Sep-13
Dec-13E
Sectoral sales growth - quarter ended December 2013 (%)

30.3
21.8
18.4
17.9
16.3
14.7
13.3
12.4
12.1
11.6
10.2
8.0
0.6
3.6
0.8
-1.1
Retail
Cap Goods
7.5
-6.4
Cement
Utilities
13.3
Oil Ex. RMs
Telecom
14.0
Consumer
MOSL Ex.
RMs
Metals
Financials
Auto
Media
Real
Estate
Healthcare
Technology
-2.0
-15.5
-24.1
Sectoral EBITDA growth - quarter ended December 2013 (%)
Cap Goods
Cement
-23.0
-26.8
-37.7
Real
Estate
Cement
-3.5
Retail
Oil Ex. RMs
-1.8
Cap Goods
Utilities
14.7
Financials
23.5
MOSL Ex.
RMs
27.3
Media
Metals
Technology
Real
Estate
Auto
27.6
Consumer
37.4
Telecom
39.5
Healthcare
42.2
Sectoral net profit growth - quarter ended December 2013 (%)

163.5
January 2014
Financials
Utilities
-0.1
Oil Ex. RMs
-0.1
Retail
9.9
MOSL Ex.
RMs
13.4
Consumer
21.7
Media
29.5
Healthcare
35.6
Metals
39.2
Technology
Auto
Telecom
41.8
B2
January 2014
113
-60
89
63
-83
-53
-52
188
-48
Future Retail
238
-36
-35
-35
Shree Cement
299
Petronet LNG
Worst 10 by net profit growth (%)
Oberoi Realty
-42
GSK Pharma
-32
Worst 10 by EBITDA growth (%)
687
-34
-33
-32
-6
-28
Shree Cement
NHPC
-6
India Cements
-16
-7
GSK Pharma
467
Ultratech Cement
Oberoi Realty
-10
Punjab National
Bank
41
Cummins India
-38
Shree Cement
ACC
BHEL
-11
Ultratech Cement
-42
GSK Pharma
Ashok Leyland
Future Retail
-20
India Cements
-42
Ambuja Cements
-60
-45
BHEL
32
Canara Bank
-56
Petronet LNG
Top 10 by net profit growth (%)

Oberoi Realty
Tech
Mahindra
Persistent
Systems
Indiabulls
Real
-23
BHEL
57
Nalco
126
DLF
58
JSW Steel
Top 10 by EBITDA growth (%)
Siemens
73
Britannia
TCS
Top 10 by sales growth (%)
Siemens
121
32
Britannia
121
73
32
Tata
Motors
87
33
Just Dial
132
Mindtree
34
Idea
Cellular
88
JSW Steel
NMDC
43
Crompton
Greaves
Tata
Steel
Hexaware
Tech.
132
ABB
MRPL
Mahindra
Lifespace
Sun
Pharma
Jaiprakash
Power
DLF
44
Reliance
Comm
Tech
Mahindra
315
Ranbaxy
Labs
DLF
52
ABB
Crompton
Greaves
Bharti
Airtel
MOSL Universe
Corporate Scoreboard (quarter ended December 2013)

Worst 10 by sales growth (%)
51
-5
-24
Source: MOSL
B3
MOSL Universe
Annual performance - MOSL universe

Sales
EBITDA
FY13 FY14E FY15E Chg.# Chg.@ FY13 FY14E FY15E Chg.# Chg.@ FY13
(%)
(%)
(%)
(%)
Auto (9)
3,773 4,268
4,922 13.1 15.3
484
618
714
27.7 15.5
228
Capital Goods (8) 1,576 1,555
1,602 -1.3
3.0
189
156
157 -17.8
1.0
134
Cement (13)
1,108 1,107
1,260 -0.1 13.8
235
182
233 -22.4 27.6
111
Consumer (13)
1,190 1,321
1,523 11.0 15.3
242
277
322
14.1 16.6
166
Financials (31)
2,197 2,510
2,881 14.3 14.8 1,735 1,901 2,186
9.6 15.0
904
Pvt Banks (10)
541
644
754 19.0 17.1
452
553
647
22.4 17.0
278
PSU Banks (12) 1,359 1,505
1,712 10.7 13.8
997 1,005 1,144
0.8 13.8
432
NBFC (9)
296
361
415 21.9 15.0
286
343
394
20.0 15.0
193
Health Care (13)
791
940
1,072 18.9 14.0
194
221
273
14.1 23.3
110
Media (8)
143
167
191 17.0 14.4
41
49
58
20.5 16.8
19
Metals (9)
4,205 4,488
4,899
6.7
9.2
792
873
981
10.2 12.4
308
Oil & Gas (13)
16,511 17,965 18,286
8.8
1.8 1,365 1,422 1,666
4.2 17.2
715
Excl. RMs (10)
7,416 8,432
8,768 13.7
4.0 1,132 1,202 1,374
6.2 14.3
642
Real Estate (9)
195
230
261 18.3 13.4
71
84
100
18.8 17.9
30
Retail (3)
137
158
191 15.0 20.7
14
15
19
10.1 24.6
9
Technology (10)
1,940 2,465
2,758 27.0 11.9
489
646
715
32.2 10.6
372
Telecom (4)
1,306 1,455
1,605 11.4 10.3
397
482
555
21.4 15.1
45
Utilities (10)
2,015 2,139
2,398
6.1 12.1
603
658
740
9.0 12.5
377
Others (6)
210
235
262 12.2 11.3
35
41
48
16.6 15.7
20
MOSL (159)
37,297 41,004 44,113
9.9
7.6 6,888 7,627 8,766
10.7 14.9 3,546
Excl. RMs (156)
28,202 31,470 34,595 11.6
9.9 6,654 7,407 8,473
11.3 14.4 3,473
Sensex (30)
9,633 10,259 11,213
6.5
9.3 1,875 2,130 2,441
13.6 14.6 1,011
Nifty (50)
10,889 12,302 13,434 13.0
9.2 2,170 2,571 2,945
18.5 14.6 1,182
# Growth FY14 over FY13; @ Growth FY15 over FY14;
For Banks : Sales = Net Interest Income, EBITDA = Operating Profits; Note: Sensex & Nifty Numbers
(INR Billion)
Net Profit
FY14E FY15E Chg.# Chg.@
(%)
(%)
283
328 24.6 15.6
99
101 -25.9
1.2
74
102 -32.8 37.6
191
226 15.2 18.5
882 1,022
-2.4 16.0
325
376 17.1 15.5
332
392 -23.1 18.1
224
254 15.8 13.5
141
166 27.8 18.1
24
30 24.5 24.9
325
366
5.7 12.4
756
872
5.7 15.3
685
769
6.7 12.2
30
38
0.9 28.8
10
11
6.0 18.8
482
552 29.5 14.6
81
135 81.6 65.3
394
437
4.4 11.1
22
26 10.6 17.6
3,794 4,413
7.0 16.3
3,724 4,310
7.2 15.7
1,097 1,265
8.6 15.3
1,327 1,524 12.2 14.8
are Free Float.
Valuations - MOSL universe

Sector
(No. of companies)
FY13
Auto (9)
15.9
Capital Goods (8)
16.4
Cement (13)
14.8
Consumer (13)
39.2
Financials (31)
10.4
Private Banks (10)
16.7
PSU Banks (12)
5.5
NBFC (9)
12.2
Health Care (13)
32.6
Media (8)
31.5
Metals (9)
10.6
Oil & Gas (13)
10.9
Excl. RMs (10)
10.8
Real Estate (9)
20.8
Retail (3)
35.5
Technology (10)
24.8
Telecom (4)
54.9
Utilities (10)
11.2
Others (6)
21.9
MOSL (159)
15.7
15.8
Sensex (30)
17.9
Nifty (50)
17.2
N.M. - Not Meaningful.
January 2014
P/E
(x)
FY14E FY15E
12.8
11.0
22.1
21.8
22.0
16.0
34.1
28.7
10.6
9.1
14.2
12.3
7.1
6.0
10.5
9.3
25.5
21.6
25.3
20.2
10.0
8.9
10.3
8.9
10.1
9.0
20.6
16.0
33.5
28.2
19.1
16.7
30.2
18.3
10.8
9.7
19.8
16.8
14.7
12.7
14.8
12.8
16.1
14.0
15.6
13.6
EV/EBITDA
(x)
FY13 FY14E FY15E
6.1
5.7
4.9
9.3
13.2
12.6
9.2
10.3
8.1
23.5
23.0
19.5
N.M
N.M
N.M
N.M
N.M
N.M
N.M
N.M
N.M
N.M
N.M
N.M
13.9
16.2
12.9
13.4
12.2
10.2
5.4
6.0
5.3
6.5
6.3
5.3
5.7
5.6
4.9
16.0
11.7
9.8
23.8
21.3
17.2
12.7
13.2
11.6
7.7
7.4
6.1
8.5
7.9
7.2
9.2
11.5
9.8
N.M
N.M
N.M
N.M
N.M
N.M
N.M
N.M
N.M
N.M
N.M
N.M
FY13
3.8
2.9
2.0
13.6
1.7
2.9
0.8
2.5
6.2
5.4
1.1
1.5
1.6
1.1
10.4
6.6
2.2
1.8
4.5
2.4
2.5
3.0
2.8
P/BV
(x)
FY14E FY15E
3.1
2.5
2.7
2.5
1.8
1.7
11.4
10.1
1.5
1.3
2.4
2.1
0.7
0.7
2.1
1.8
5.4
4.4
4.8
4.2
1.0
1.0
1.3
1.2
1.4
1.3
1.0
1.0
8.5
6.9
5.4
4.4
2.0
1.8
1.6
1.5
4.0
3.5
2.2
1.9
2.2
2.0
2.6
2.3
2.5
2.2
FY13
24.1
17.7
13.4
34.8
16.5
17.2
14.9
20.3
19.1
17.1
10.6
13.4
14.6
5.4
29.3
26.7
4.0
15.8
20.6
15.4
15.8
16.5
16.5
RoE
Div.
PAT
(%)
yld (%) CAGR
FY14E FY15E FY14E FY13-15
24.3
23.0
1.4
20.0
12.1
11.3
1.4 -13.4
8.4
10.7
1.3
-3.8
33.6
35.1
1.6
16.9
14.0
14.5
2.3
6.4
17.0
17.2
1.6
16.3
10.2
11.1
3.1
-4.7
19.8
19.6
2.7
14.6
21.3
20.6
0.7
22.9
18.9
20.7
1.4
24.7
10.4
10.7
2.4
9.0
12.8
13.4
2.4
10.4
14.0
14.1
2.4
9.4
5.0
6.2
1.5
14.0
25.2
24.4
0.7
12.2
28.4
26.3
1.4
21.8
6.6
9.9
0.6
73.3
15.0
15.4
3.7
7.7
20.0
20.8
1.5
14.0
14.7
15.3
1.8
11.6
15.0
15.5
1.8
11.4
16.1
16.4
1.6
11.9
15.8
16.1
1.6
13.5
Source: MOSL
B4
MOSL Universe
Ready reckoner: quarterly performance

(INR Million)
CMP
(INR)
27.12.13
Rating
Dec.13
Sales
Var.
% YoY
Var.
% QoQ
Dec.13
EBITDA
Var.
% YoY
Var.
% QoQ
Dec.13
Net Profit
Var.
% YoY
PL
9.9
24.9
24.5
39.5
13.7
40.7
54.8
9.0
39.5
PL
-1.7
-6.3
1.9
25.7
25.0
-5.1
1.4
-0.7
3.2
-1,684
8,696
939
1,248
5,956
10,128
6,611
32,691
651
65,235
Loss
6.2
29.1
19.9
22.1
10.7
31.9
88.5
23.7
41.8
Loss
3.9
9.5
5.3
23.7
-1.4
-1.4
-12.8
-1.6
-6.8
Var.
% QoQ
Automobiles
Ashok Leyland
Bajaj Auto
Eicher Motors
Exide Inds.
Hero Motocorp
Mahindra & Mahindra
Maruti Suzuki
Tata Motors
TVS Motor
Sector Aggregate
17
1,935
4,976
121
2,087
965
1,775
371
69
Neutral
Buy
Buy
Neutral
Buy
Buy
Buy
Buy
Buy
19,079
52,168
16,887
14,602
67,712
101,563
108,670
604,100
19,856
1,004,637
-19.9
-3.6
2.1
-0.1
10.1
-0.8
-3.0
31.1
10.4
16.3
-25.2
-65
0.8 11,124
0.3
1,473
2.3
2,050
18.9
7,428
17.3 15,678
3.8 12,542
6.2 87,594
-0.1
1,163
6.3 138,988
Capital Goods
ABB
BHEL
Crompton Greaves
Cummins India
Havells India
Larsen & Toubro
Siemens
Thermax
Sector Aggregate
689
173
130
469
802
1,078
663
696
UR
Buy
Buy
Buy
Neutral
Buy
Neutral
Buy
21,835
83,979
33,472
9,775
11,850
168,315
24,075
11,059
364,359
4.9
-16.4
12.6
-10.3
12.0
9.1
-3.6
5.6
0.6
22.3
-4.8
4.4
4.8
0.9
16.0
-26.1
6.0
4.9
1,502
8,914
1,598
1,681
1,619
16,831
739
1,061
33,945
125.5
-45.4
88.0
-19.4
15.8
6.1
-59.9
-5.2
-15.5
42.5
47.8
-0.9
10.1
-4.2
12.1
-61.2
13.3
14.0
567
5,240
617
1,374
1,197
10,708
110
751
20,564
238.3
-55.7
314.8
-24.4
22.7
3.0
-82.7
-1.6
-23.0
59.2
-11.2
5.6
-5.1
-4.4
2.2
-89.8
27.0
-5.1
Cement
ACC
Ambuja Cements
Birla Corporation
Grasim Industries
India Cements
Shree Cement
Ultratech Cement
Sector Aggregate
1,120
185
259
2,716
61
54
4,386
1,771
Buy
Neutral
Buy
Buy
Neutral
Buy
Buy
Neutral
27,731
22,120
7,218
13,194
10,169
34,832
13,499
47,701
176,465
-10.5
-4.4
17.8
8.5
-6.0
2.5
-5.5
-1.8
-2.0
10.5
10.3
1.6
-6.1
-6.4
9.7
8.2
6.0
6.0
2,490
2,474
516
2,253
1,198
7,152
2,437
7,004
25,525
-21.5
-42.2
0.5
4.6
-37.8
-6.2
-34.4
-31.6
-24.1
10.5
-3.1
-11.8
-13.8
-6.1
-9.5
-2.3
6.2
-2.8
1,601
1,633
357
2,472
-285
-33
1,471
3,143
10,360
-33.1
-29.0
10.7
24.9
PL
PL
-35.4
-47.7
-37.7
32.6
21.3
-14.2
-37.6
Loss
PL
-15.1
19.0
-13.2
Consumer
Asian Paints
Britannia
Colgate
Dabur
Godrej Consumer
GSK Consumer
Hind. Unilever
ITC
Marico
Nestle
Pidilite Inds.
Radico Khaitan
United Spirits
Sector Aggregate
485
915
1,305
172
847
4,444
569
322
221
5,338
290
144
2,537
Neutral
Buy
Neutral
Buy
Neutral
Neutral
Sell
Buy
Buy
Neutral
Neutral
Buy
Neutral
35,553
16,277
8,763
18,803
20,634
8,311
72,870
84,833
11,110
23,980
9,758
3,782
23,479
338,154
17.1
12.0
14.9
15.3
22.0
17.2
9.5
10.0
-4.6
11.4
16.5
16.0
8.0
11.6
15.3
2.1
-2.2
7.5
5.4
-14.5
5.7
7.9
-0.4
2.1
-1.6
7.4
15.2
6.2
5,724
1,351
1,650
3,196
3,570
604
12,024
32,661
1,611
5,467
1,756
613
2,465
72,692
15.7
72.9
10.0
18.7
27.2
18.6
10.4
14.3
-0.6
10.3
16.0
22.4
0.2
14.0
19.2
-1.9
12.7
-1.3
20.8
-59.7
10.8
8.2
-2.6
11.1
-4.9
8.6
20.1
7.8
3,638
927
1,218
2,472
2,353
775
9,388
23,323
1,138
3,181
1,211
259
957
50,840
8.5
62.7
9.7
17.1
36.6
11.2
7.5
13.7
6.5
8.2
16.8
40.9
18.8
13.4
11.3
-3.2
11.2
-1.1
20.7
-47.3
6.3
11.2
7.5
8.9
-3.6
-7.6
1.5
7.0
PULL OUT
January 2014
B5
MOSL Universe

(INR Million)
Healthcare
Biocon
Cadila Health
Cipla
Divis Labs
Dr Reddy s Labs
Glenmark Pharma
GSK Pharma
IPCA Labs.
Lupin
Ranbaxy Labs
Sanofi India
Sun Pharma
Torrent Pharma
Sector Aggregate
Media
D B Corp
Dish TV
HT Media
Jagran Prakashan
PVR
Sun TV
Zee Entertainment
Sector Aggregate
Metals
Hindalco
Hindustan Zinc
JSPL
JSW Steel
Nalco
NMDC
SAIL
Sesa Sterlite
Tata Steel
Sector Aggregate
CMP
(INR)
27.12.13
Rating
Dec.13
Sales
Var.
% YoY
Var.
% QoQ
Dec.13
EBITDA
Var.
% YoY
Var.
% QoQ
Dec.13
Net Profit
Var.
% YoY
Var.
% QoQ
466
786
405
1,222
2,519
538
2,958
718
906
464
2,749
576
475
Neutral
Buy
Neutral
Buy
Buy
Buy
Neutral
Buy
Buy
Sell
Neutral
Buy
Buy
7,614
18,222
26,575
6,280
35,947
15,628
6,118
8,049
26,513
28,791
4,668
39,084
9,718
233,208
20.1
13.6
28.4
17.8
25.5
20.2
-6.8
14.8
11.6
15.7
16.5
43.9
21.9
21.8
3.8
4.3
5.8
11.0
7.1
7.7
-1.4
-4.9
5.3
2.8
-1.2
0.3
1.3
3.7
1,713
2,791
5,857
2,384
7,729
3,221
1,106
1,785
5,668
2,335
684
15,767
1,827
52,867
20.9
9.5
18.8
31.5
36.2
28.5
-42.2
12.7
11.9
467.1
34.9
36.8
13.3
27.3
1.4
7.1
3.8
-3.7
-8.6
6.1
2.4
-23.9
4.2
20.5
-31.4
-1.0
5.6
-0.9
1,096
1,504
3,590
1,780
4,503
1,757
1,013
1,189
3,797
1,121
566
11,515
1,261
34,691
19.5
46.1
5.9
23.4
23.9
11.6
-35.9
35.3
35.1
LP
26.4
43.9
12.3
29.5
7.1
-18.0
-2.3
-13.1
-34.8
22.3
-0.4
-8.2
12.3
83.5
-26.4
-2.9
17.9
-6.1
285
60
75
90
628
376
279
Buy
Buy
Neutral
Buy
Buy
Buy
Neutral
5,042
6,163
5,739
4,516
3,632
5,212
11,181
41,486
14.9
10.5
4.9
29.4
79.4
7.3
19.1
17.9
15.1
4.0
7.3
9.2
-0.7
11.8
1.5
6.0
1,421
1,648
993
1,083
636
3,983
2,936
12,700
19.2
19.7
13.5
18.9
85.2
5.8
12.4
14.7
32.0
11.5
54.3
18.0
-15.0
17.9
-5.4
11.9
824
-53
576
680
213
1,888
2,165
6,293
16.7
Loss
9.1
47.5
146.3
-0.6
11.6
21.7
37.0
Loss
177.5
49.2
-28.4
21.0
-8.4
18.2
122
133
262
1,007
38
142
72
201
424
Buy
Buy
Neutral
Sell
Buy
Buy
Sell
Neutral
Sell
217,351
34,349
50,836
109,072
16,579
28,966
112,375
195,686
361,732
1,126,945
10.7
8.1
5.9
31.5
-2.1
41.5
5.3
14.6
12.7
13.3
-0.3 22,120
-3.5 17,682
2.0 15,335
-5.0 20,808
-4.6
2,865
16.8 18,391
-2.6 12,417
8.6 67,183
-1.3 41,778
0.4 218,579
27.1
18.4
-14.3
58.4
56.9
32.2
9.1
14.9
86.6
27.6
5.0
-6.1
-1.5
-6.9
7.0
23.1
43.2
-3.4
12.8
3.7
6,265
17,582
6,728
6,507
1,843
15,827
6,405
13,060
8,001
82,219
30.2
9.0
-22.4
121.5
55.0
22.4
30.6
-20.9
LP
35.6
9.8
3.8
21.9
-17.8
2.9
20.1
86.9
-6.8
-12.7
5.9
13.5
8.0
28.5
3.7
21.6
14.7
13.9
19.3
13.8
8.6
8.4
19.7
19.9
15.8
12.7
-2.4
41.3
5.0
30.0
48.3
17.5
43.4
11.3
-4.5
8.9
23.4
40.9
18.9
595
1,210
276
991
2,419
217
5,708
16.8
2.7
112.5
0.4
39.4
41.5
21.6
58.2
19.2
-3.8
21.8
38.6
50.0
30.3
Others
Bata India
1,054
Buy
Castrol India
315
Neutral
Just Dial
1,386
Buy
Sintex Inds.
34
Buy
UPL
193
Buy
V-Guard Inds
472
Buy
Sector Aggregate
PL: Profit to Loss; LP: Loss to Profit; UR: Under
5,777
8,190
1,223
14,795
27,917
4,003
61,907
Review
907
1,626
336
2,309
5,256
381
10,815
PULL OUT
January 2014
B6
MOSL Universe

(INR Million)
CMP
(INR)
27.12.13
Dec.13
Sales
Var.
% YoY
352
324
341
60
239
213
267
42
484
292
122
879
Buy
608,136
Buy
49,049
Neutral
150,337
Neutral
2,766
Buy
575,297
Buy
1,300,404
Neutral
10,674
Neutral
192,772
Buy
26,242
Buy
221,055
Buy
108,490
Neutral 1,018,710
4,263,931
1,780,094
-2.4
14.7
20.5
6.2
9.1
12.8
22.8
7.1
8.7
5.3
28.8
8.5
8.8
10.2
171
168
69
24
401
230
229
166
311
Buy
Neutral
Buy
Buy
Buy
Buy
Buy
Buy
Buy
19,857
2,968
4,358
8,987
930
1,942
735
4,744
4,965
49,486
74
1,257
416
229
UR
Sell
Neutral
Neutral
Technology
HCL Technologies
1,249
Hexaware Tech.
132
Infosys
3,562
KPIT Tech.
174
Mindtree
1,556
MphasiS
425
Persistent Systems
988
TCS
2,159
Tech Mahindra
1,861
Wipro
555
Sector Aggregate (ex Wipro)
Telecom
Bharti Airtel
Bharti Infratel
Idea Cellular
Reliance Comm
Sector Aggregate
Oil & Gas

BPCL
Cairn India
GAIL
HPCL
IOC
Indraprastha Gas
MRPL
Oil India
ONGC
Petronet LNG
Reliance Inds.
Sector Aggregate
Excl. RMs
Real Estate
DLF
Godrej Properties
Jaypee Infratech
Mahindra Lifespace
Oberoi Realty
Phoenix Mills
Prestige Estates
Sobha Developers
Sector Aggregate
Retail
Future Retail
Jubilant Foodworks
Shopper's Stop
Titan Company
Sector Aggregate
January 2014
329
168
167
131
Rating
Dec.13
EBITDA
Var.
% YoY
-1.5
847
5.5 37,526
7.8 21,469
-0.1
2,487
10.9
1,812
18.4 12,610
5.8
2,040
2.7
4,112
-3.3 12,205
-0.9 116,566
14.3
3,804
-1.8 73,215
6.5 288,694
0.6 273,425
-96.3
14.2
8.9
6.4
-53.3
-75.4
9.0
131.9
8.5
3.7
-28.1
-12.6
-17.3
0.8
-95.0
-3,873
6.2 29,369
52.8 12,367
-0.8
1,152
-82.1
-5,076
-59.6
-1,310
1.9
951
-43.7
1,413
-8.1
9,431
-2.9 57,675
4.5
1,484
-6.7 52,029
-13.8 155,612
-1.2 165,871
PL
-6.9
-3.7
-3.2
PL
PL
10.1
LP
0.3
3.7
-53.4
-5.4
-28.4
-0.1
PL
-13.2
35.1
1.0
PL
PL
2.5
-40.1
4.4
-4.9
-18.4
-5.2
-23.4
-4.6
51.6
11.4
31.6
-3.7
51.4
-32.1
6.1
-3.6
15.5
18.4
1.5
-3.2
-3.3
12.8
-3.5
2.8
4.0
-0.2
-8.2
1.4
6,851
772
1,314
4,059
128
1,146
493
1,233
1,390
17,385
687.2
2.7
0.0
-3.9
41.8
-32.9
4.0
-13.4
1.2
42.2
15.2
-4.5
-22.1
14.6
4.4
33.1
3.0
3.9
-3.0
8.2
1,130
390
623
1,397
174
867
359
777
535
6,253
-60.3
9.9
19.2
-9.9
28.5
-35.5
5.2
-15.5
1.8
-26.8
12.9
13.8
-23.3
34.6
-33.4
35.2
-1.6
0.2
-5.4
7.7
24,560
5,007
7,141
30,127
66,835
-22.5
30.0
18.2
1.0
-6.4
6.0
14.7
-1.5
29.4
15.1
2,112
801
536
2,862
6,311
-24.0
19.2
18.3
15.5
-1.1
3.0
22.7
34.7
9.4
10.4
-77
412
226
2,066
2,628
PL
9.3
32.5
1.3
-0.1
Loss
24.0
128.4
10.7
18.5
Buy
Neutral
Buy
Neutral
Neutral
Neutral
Buy
Neutral
Buy
Buy
82,070
6,393
130,291
7,206
7,922
15,931
4,381
214,328
48,472
112,855
516,994
30.8
27.3
25.0
27.9
34.3
26.7
31.6
33.4
32.1
NA
30.3
3.1 20,719
2.9
1,466
0.5 35,245
2.5
1,157
2.9
1,539
-0.1
2,797
1.3
1,072
2.2 67,984
1.6 11,233
NA 23,267
1.8 143,212
48.6
73.1
18.7
31.1
27.8
20.1
30.1
46.1
41.2
NA
37.4
-1.0 14,105
-0.8
1,013
4.0 27,609
6.3
664
-3.7
986
0.2
1,916
-4.5
523
2.4 52,584
1.1
6,671
NA 19,993
2.0 106,072
49.4
34.7
16.5
11.0
-0.2
3.9
5.7
48.1
131.6
NA
39.2
-0.4
2.5
5.1
-0.4
-23.4
0.8
-13.9
11.8
-2.6
NA
6.4
Buy
Neutral
Buy
Neutral
219,792
27,493
65,731
55,457
368,472
13.5
4.7
17.8
4.6
12.1
3.1 70,565
2.4 10,994
3.9 20,748
2.8 19,746
3.1 122,053
22.2
12.0
40.8
19.4
23.5
298.9
39.1
121.3
188.3
163.5
121.0
27.4
13.0
21.0
53.7
Var.
% QoQ
Var.
% QoQ
3.3
2.5
5.2
4.7
3.8
Dec.13
Net Profit
Var.
% YoY
11,315
3,534
5,058
3,293
23,200
Var.
% QoQ
B7
MOSL Universe

(INR Million)
CMP
(INR)
27.12.13
Utilities
CESC
Coal India
Jaiprakash Power
JSW Energy
NHPC
NTPC
Power Grid Corp.
PTC India
Tata Power
Sector Aggregate
PL: Profit to Loss; LP: Loss
449
283
19
56
20
137
100
66
431
90
Rating
Dec.13
12,470
183,710
6,114
26,215
9,534
169,638
39,198
22,222
34,453
97,578
601,132
to Profit; UR = Under Review
CMP
(INR)
27.12.13
Financials
Private Banks
Axis Bank
1,293
Federal Bank
84
HDFC Bank
669
ICICI Bank
1,108
IndusInd Bank
422
ING Vysya Bank
603
Kotak Mahindra Bank
737
Yes Bank
374
Pvt Bkg. Sector Aggregate
PSU Banks
Bank of Baroda
652
Bank of India
236
Canara Bank
282
Indian Bank
114
Oriental Bank
228
635
State Bank
1,770
Union Bank
130
PSU Bkg. Sector Aggregate
NBFC
Bajaj Finance
1,530
HDFC
789
IDFC
106
LIC Housing Fin
217
M & M Financial
320
Power Finance Corp
163
Rural Electric. Corp.
217
Shriram Transport Fin.
673
NBFC Bkg. Sector Aggregate
Financials Sector Aggregate
Buy
Neutral
Buy
Neutral
Neutral
Buy
Buy
Buy
Buy
Neutral
Rating
Sales
Var.
% YoY
19.9
6.0
43.2
10.8
-5.6
7.5
16.6
18.3
-0.3
7.9
8.0
Dec.13
EBITDA
Var.
% YoY
Var.
% QoQ
Dec.13
Net Profit
Var.
% YoY
Var.
% QoQ
-23.6
3,043
19.2 45,493
-36.9
3,775
29.5
9,370
-42.2
4,834
4.2 39,223
-1.6 34,229
-29.2
272
21.7
4,300
11.3 16,783
6.1 161,322
14.4
6.1
40.9
11.9
-21.2
-1.8
17.1
-9.2
-12.2
-9.5
3.6
-19.1
62.8
-50.4
11.8
-52.5
-4.5
1.5
-59.9
-9.8
-17.4
1.8
1,275
42,828
-875
3,062
2,544
24,571
11,963
250
3,018
2,489
91,124
26.2
-8.5
Loss
-17.6
5.3
11.3
8.0
14.7
-19.5
-9.8
-1.8
-25.5
39.9
PL
32.5
-67.2
11.7
16.2
-59.6
-12.7
-1.4
8.8
Net Profit
Dec.13
Var.
% YoY
Var.
% QoQ
Var.
% QoQ
Net Interest Income

Dec.13
Var.
Var.
% YoY % QoQ
Operating Profit
Dec.13
Var.
Var.
% YoY % QoQ
Buy
Buy
Buy
Buy
Buy
Buy
Neutral
Buy
29,830
5,484
46,892
42,810
7,018
4,509
9,413
6,733
152,688
19.6
10.3
17.8
22.3
21.5
11.9
14.4
15.2
18.7
1.6 28,226
0.0
3,637
4.7 37,295
5.9 41,393
0.3
5,997
2.4
3,011
1.9
6,266
0.2
6,116
3.6 131,941
19.5
-7.7
19.5
19.9
27.0
14.4
9.4
8.5
17.8
2.6
2.8
10.1
6.5
2.0
9.0
3.3
-14.2
5.0
15,284
1,658
23,235
25,123
3,183
1,776
3,624
3,813
77,696
13.4
-21.3
25.0
11.6
19.1
9.4
0.2
11.4
14.2
12.2
-26.6
17.2
6.8
-3.6
0.7
2.8
2.7
8.6
Buy
Neutral
Neutral
Buy
Buy
Buy
Buy
Neutral
30,136
27,209
22,916
11,204
12,956
41,022
127,399
20,309
293,151
6.1
17.9
15.3
-2.0
7.6
9.9
14.2
7.4
11.6
4.1 21,795
7.7 19,864
4.6 15,439
2.4
7,440
1.1
9,042
2.2 26,735
4.0 71,484
3.9 13,511
3.9 185,310
-2.9
7.0
1.8
-0.5
-2.4
-0.3
-8.2
-0.5
-3.1
3.3
-5.5
8.3
5.4
9.6
5.5
13.3
10.3
7.5
9,762
6,083
3,403
2,545
2,498
7,596
22,819
3,099
57,804
-3.5
-24.3
-52.1
-23.0
-23.5
-41.8
-32.8
2.5
-29.4
-16.4
-2.2
-45.6
-16.8
-0.6
50.3
-3.9
48.9
-4.6
Buy
Buy
Buy
Buy
Buy
Neutral
Neutral
Buy
6,517
17,347
6,726
4,691
7,208
21,122
17,533
9,322
90,466
536,305
29.3
12.7
2.5
26.9
28.4
25.9
22.6
4.2
18.5
14.7
12.4
3,823
9.9 18,017
-2.0
7,641
3.5
4,394
6.3
4,906
0.1 20,932
0.6 17,790
3.0
7,652
3.6 85,155
3.8 402,407
32.6
13.7
8.7
24.7
29.4
27.0
24.4
5.6
19.7
7.5
25.3
1,965
3.8 13,069
1.7
4,340
-4.0
3,381
6.1
2,505
1.6 13,777
1.7 12,398
3.8
3,351
3.1 54,787
5.7 190,287
22.2
14.6
-4.6
43.1
25.1
19.6
18.9
-3.1
15.7
-3.5
17.6
3.2
-10.8
9.0
13.2
0.6
5.4
2.5
2.9
2.6
PULL OUT
January 2014
B8
MOSL Universe
Ready reckoner: valuations

CMP (INR)
27.12.13
Automobiles
Ashok Leyland
Bajaj Auto
Eicher Motors
Exide Inds.
Hero Motocorp
Mah. & Mahindra
Maruti Suzuki
Tata Motors
TVS Motor
Sector Aggregate
Capital Goods
ABB
BHEL
Crompton Greaves
Cummins India
Havells India
Larsen & Toubro
Siemens
Thermax
Sector Aggregate
Cement
ACC
Ambuja Cements
Birla Corporation
Grasim Industries
India Cements
J P Associates
Shree Cement
Ultratech Cement
Dalmia Bharat
J K Cements
JK Lakshmi Cem.
Ramco Cements
Prism Cement
Sector Aggregate
Consumer
Asian Paints
Britannia
Colgate
Dabur
Godrej Consumer
GSK Consumer
Hind. Unilever
ITC
Marico
Nestle
Pidilite Inds.
Radico Khaitan
United Spirits
Sector Aggregate
Rating
EPS (INR)
FY13 FY14E FY15E
P/E (x)
FY13 FY14E FY15E
EV/EBITDA (x)
FY13 FY14E FY15E
RoE (%)
FY13 FY14E FY15E
17
1,935
4,976
121
2,087
965
1,775
371
69
Neutral
Buy
Buy
Neutral
Buy
Buy
Buy
Buy
Buy
0.6
105.2
120.1
6.2
106.1
60.9
80.2
32.1
3.8
-1.8
114.4
132.5
6.5
113.3
76.5
96.4
45.3
5.3
-0.1
133.6
195.7
7.7
154.1
84.7
117.3
48.7
7.5
26.4
18.4
41.4
19.7
19.7
15.8
22.1
11.6
18.0
15.9
-9.3 -242.6
16.9
14.5
37.6
25.4
18.5
15.7
18.4
13.5
12.6
11.4
18.4
15.1
8.2
7.6
12.9
9.2
12.8
11.0
8.9
12.4
11.3
11.8
12.2
5.8
7.2
4.3
5.3
6.1
48.1
11.0
19.2
9.4
13.6
6.0
8.7
3.6
8.0
5.7
8.7
9.1
13.7
8.0
9.5
5.1
6.8
3.2
5.8
4.9
3.9
43.7
20.8
15.3
45.6
22.4
12.9
29.4
15.1
24.1
-10.6
38.0
20.2
14.6
42.1
20.9
13.6
32.9
19.2
24.3
-0.4
37.0
25.1
15.4
47.6
18.7
14.7
26.7
23.1
23.0
689
173
130
469
802
1,078
663
696
UR
Buy
Buy
Buy
Neutral
Buy
Neutral
Buy
6.5
26.8
3.1
23.8
34.4
53.4
4.8
27.0
8.2
14.4
5.1
22.3
40.7
43.8
13.1
25.2
11.5
9.6
8.9
25.2
42.1
52.4
13.8
29.5
106.2
6.5
42.3
19.7
23.3
20.2
139.0
25.8
16.4
83.6
12.1
25.6
21.1
19.7
24.6
50.8
27.6
22.1
59.9
18.0
14.5
18.6
19.1
20.6
48.1
23.6
21.8
31.4
3.9
19.0
15.3
12.8
11.8
44.9
12.9
9.3
32.1
7.6
13.4
17.2
13.2
13.6
23.5
16.1
13.2
26.5
9.2
10.0
15.2
11.7
11.9
22.5
13.6
12.6
5.4
23.5
-1.0
29.7
29.8
16.2
4.2
18.4
17.7
6.6
11.1
8.7
24.5
28.1
14.5
11.1
15.3
12.1
8.8
7.1
15.1
25.6
24.0
14.4
11.1
16.1
11.3
1,120
185
259
2,716
61
54
4,386
1,771
169
194
80
189
27
Buy
Neutral
Buy
Buy
Neutral
Buy
Buy
Neutral
Buy
Buy
Buy
Buy
Neutral
68.7
10.0
35.0
291.3
5.8
2.3
314.9
96.8
24.3
33.0
16.0
17.0
-1.2
45.5
6.4
29.6
260.0
-0.8
0.9
272.2
70.1
6.0
3.2
7.6
5.3
-3.4
64.3
8.1
42.8
309.2
3.8
2.4
302.0
93.6
8.1
17.8
9.1
14.0
-0.5
16.3
18.4
7.4
9.3
10.5
23.9
13.9
18.3
7.0
5.9
5.0
11.1
-22.4
14.8
24.6
28.9
8.7
10.4
-77.3
60.3
16.1
25.3
28.3
60.6
10.4
35.9
-7.9
22.0
17.4
22.9
6.0
8.8
15.9
22.7
14.5
18.9
20.9
10.9
8.7
13.5
-51.6
16.0
9.5
9.3
4.4
4.3
6.6
17.6
8.3
11.4
5.6
4.9
4.9
8.8
15.7
9.2
13.5
16.4
5.1
4.6
8.3
10.0
10.8
14.1
10.8
11.1
8.8
13.1
25.0
10.3
9.8
13.5
3.4
3.6
6.3
9.1
8.8
11.1
8.5
6.3
7.1
7.8
9.0
8.1
17.7
18.3
11.0
13.6
4.3
3.9
30.6
18.9
6.6
14.4
15.4
18.3
-5.4
13.4
11.4
11.0
8.8
11.0
-0.5
1.5
18.4
12.0
1.6
1.4
6.9
5.3
-17.5
8.4
15.4
13.2
11.6
11.7
2.7
3.8
16.5
14.3
2.1
7.2
7.9
13.2
-3.1
10.7
485
915
1,305
172
847
4,444
569
322
221
5,338
290
144
2,537
Neutral
Buy
Neutral
Buy
Neutral
Neutral
Sell
Buy
Buy
Neutral
Neutral
Buy
Neutral
11.6
19.6
36.5
4.4
19.6
98.3
15.2
9.5
6.0
114.1
8.5
6.6
13.9
13.0
31.2
37.4
5.4
23.8
119.1
16.4
10.9
7.3
124.9
9.8
8.0
29.1
16.0
37.0
44.5
6.5
29.4
139.8
18.0
12.7
8.5
150.3
11.9
10.6
53.3
41.8
46.7
35.7
39.1
43.2
45.2
37.4
33.9
36.8
46.8
34.2
21.8
182.9
39.2
37.4
29.3
34.9
32.1
35.6
37.3
34.8
29.7
30.2
42.8
29.6
18.0
87.1
34.1
30.3
24.8
29.3
26.7
28.8
31.8
31.6
25.4
25.9
35.5
24.4
13.7
47.6
28.7
27.9
18.8
24.9
24.0
27.9
35.3
23.9
21.9
22.8
24.5
20.9
11.8
25.0
23.5
23.6
19.8
25.3
24.7
24.7
34.7
26.2
19.8
20.4
25.0
19.2
11.2
36.9
23.0
19.6
16.3
20.3
20.9
20.5
27.1
22.9
17.2
16.2
21.3
15.9
9.0
27.2
19.5
33.3
37.5
108.4
35.1
20.9
30.5
70.8
36.1
19.6
71.6
24.9
12.1
3.4
34.8
31.7
47.8
90.0
35.1
22.5
31.1
61.2
37.5
28.5
58.5
24.3
13.3
5.1
33.6
32.9
45.7
90.7
34.9
23.8
30.8
57.6
40.1
25.6
56.4
24.7
15.6
8.7
35.1
PULL OUT
January 2014
B9
MOSL Universe

CMP (INR)
27.12.13
Rating
EPS (INR)
FY13 FY14E FY15E
P/E (x)
FY13 FY14E FY15E
EV/EBITDA (x)
FY13 FY14E FY15E
RoE (%)
FY13 FY14E FY15E
466
786
405
1,222
2,519
538
2,958
718
906
464
2,749
576
475
Neutral
Buy
Neutral
Buy
Buy
Buy
Neutral
Buy
Buy
Sell
Neutral
Buy
Buy
16.4
31.9
14.2
45.4
90.2
18.4
80.0
25.7
23.1
13.0
76.7
14.7
27.8
20.4
33.5
18.9
58.7
115.0
23.1
55.6
34.1
32.4
11.5
99.4
22.1
29.3
22.3
40.1
20.9
67.0
133.5
29.1
68.5
48.0
42.1
13.8
116.2
25.8
30.7
28.5
24.6
28.4
26.9
27.9
29.2
37.0
27.9
39.2
35.7
35.8
39.0
17.1
32.6
20.9
19.6
19.4
18.2
18.9
18.5
43.2
14.9
21.5
33.5
23.7
22.3
15.5
21.6
8.3
15.4
13.1
15.6
12.7
13.9
20.8
11.4
14.4
9.7
23.6
16.0
8.6
13.9
13.0
16.6
13.2
15.6
14.8
13.1
46.7
12.6
16.2
22.2
21.3
16.3
11.1
16.2
11.7
13.6
11.6
12.5
12.5
11.5
34.4
10.4
13.5
8.5
18.3
13.8
10.4
12.9
12.1
23.7
12.7
26.0
20.7
18.1
33.7
23.1
22.5
31.4
14.8
22.5
35.8
19.1
13.8
21.5
14.7
28.5
21.4
19.0
22.9
24.9
24.4
-18.5
17.4
28.6
30.3
21.3
13.7
21.9
14.2
27.7
20.4
19.9
27.7
28.3
25.1
35.0
18.3
27.2
25.8
20.6
285
60
113
75
90
628
376
279
Buy
Buy
Buy
Neutral
Buy
Buy
Buy
Neutral
11.9
-1.2
11.5
7.1
4.7
11.2
17.3
7.5
15.7
-0.3
15.4
7.1
6.5
16.9
18.2
9.5
18.8
0.0
18.9
8.0
8.4
26.4
22.6
11.3
24.0
18.2
15.2
-50.8 -175.2 2202.2
9.8
7.3
6.0
10.5
10.5
9.4
19.2
13.9
10.7
55.9
37.1
23.8
21.7
20.7
16.7
37.1
29.3
24.7
31.5
25.3
20.2
11.1
14.0
7.2
7.2
11.3
15.2
10.9
20.5
13.4
10.4
11.2
2.6
4.1
8.0
13.6
9.4
21.3
12.2
8.8
9.5
1.7
3.4
6.5
10.1
7.8
17.9
10.2
22.3
NA
17.9
10.1
17.5
9.6
23.6
19.6
17.1
26.3
NA
20.1
9.2
20.5
10.2
23.1
21.5
18.9
28.0
NA
20.1
9.4
23.3
14.3
25.5
21.9
20.7
Metals
Hindalco
Hindustan Zinc
JSPL
JSW Steel
Nalco
NMDC
SAIL
Sesa Sterlite
Tata Steel
Sector Aggregate
122
133
262
1,007
38
142
72
201
424
Buy
Buy
Neutral
Sell
Buy
Buy
Sell
Neutral
Sell
17.0
16.4
37.2
49.7
2.3
16.7
6.0
20.8
1.6
12.0
16.7
27.3
43.7
3.1
15.9
6.7
19.0
40.4
13.7
17.3
29.8
58.8
3.2
17.4
6.8
24.2
47.0
7.2
8.1
7.0
20.3
16.5
8.5
11.9
9.7
270.2
10.6
10.2
8.0
9.6
23.1
12.4
8.9
10.8
10.6
10.5
10.0
8.9
7.7
8.8
17.1
11.9
8.2
10.6
8.3
9.0
8.9
8.1
4.6
8.7
6.8
3.9
4.3
8.6
2.2
7.3
5.4
8.5
4.2
9.1
7.1
4.0
4.7
9.6
3.9
6.8
6.0
6.7
3.5
7.5
7.1
3.2
4.2
8.4
3.3
6.2
5.3
18.0
23.4
17.7
6.6
5.0
26.8
6.1
9.5
0.7
10.6
11.4
20.1
12.0
6.1
6.5
22.3
6.4
7.8
17.7
10.4
11.8
18.0
12.3
8.4
6.5
20.4
6.2
9.0
18.0
10.7
Others
Bata India
Castrol India
Just Dial
Sintex Inds.
UPL
V-Guard Inds
Sector Aggregate
1,054
315
1,386
34
193
472
Buy
Neutral
Buy
Buy
Buy
Buy
26.8
9.0
10.1
13.3
18.1
21.1
30.7
9.7
16.6
10.1
22.0
27.1
38.5
10.9
23.0
10.9
26.0
36.0
39.4
34.8
137.2
2.5
10.7
22.4
21.9
34.3
32.4
83.3
3.3
8.8
17.4
19.8
27.4
28.9
60.3
3.1
7.4
13.1
16.8
16.0
25.4
20.8
23.3
62.9
5.0
5.2
10.8
11.5
16.9
20.1
44.7
4.7
4.3
8.3
9.8
27.1
83.8
26.3
14.3
18.2
26.7
20.6
25.6
71.4
25.2
9.9
19.3
27.6
20.0
26.5
71.4
29.5
9.7
19.4
29.3
20.8
Healthcare
Biocon
Cadila Health
Cipla
Divis Labs
Dr Reddy s Labs
Glenmark Pharma
GSK Pharma
IPCA Labs.
Lupin
Ranbaxy Labs
Sanofi India
Sun Pharma
Torrent Pharma
Sector Aggregate
Media
D B Corp
Dish TV
Hindustan Media
HT Media
Jagran Prakashan
PVR
Sun TV
Zee Entertainment
Sector Aggregate
22.8
23.4
21.4
20.8
21.9
23.3
53.2
21.1
28.0
40.4
27.6
26.0
16.2
25.5
5.3
4.2
13.2
9.2
PULL OUT
January 2014
B10
MOSL Universe

CMP (INR)
27.12.13
Oil & Gas
BPCL
Cairn India
Chennai Petroleum
GAIL
Guj. State Petronet
HPCL
Indraprastha Gas
IOC
MRPL
Oil India
ONGC
Petronet LNG
Reliance Inds.
Sector Aggregate
Ex RMS
Rating
EPS (INR)
FY13 FY14E FY15E
P/E (x)
FY13 FY14E FY15E
EV/EBITDA (x)
FY13 FY14E FY15E
RoE (%)
FY13 FY14E FY15E
352
324
68
341
60
239
267
213
42
484
292
122
879
Buy
Buy
Buy
Neutral
Neutral
Buy
Neutral
Buy
Neutral
Buy
Buy
Buy
Neutral
26.0
63.1
-118.6
31.7
9.6
26.7
25.3
18.3
-4.3
59.7
28.3
15.3
71.9
35.3
64.9
-17.5
33.2
8.4
12.4
25.8
16.8
1.1
54.7
29.8
9.8
74.1
38.5
55.2
29.7
28.9
8.9
23.5
29.0
27.6
6.4
67.3
35.8
11.5
84.1
13.5
5.1
-0.6
10.7
6.3
9.0
10.6
11.6
-9.8
8.1
10.3
8.0
12.2
10.9
10.8
10.0
5.0
-3.9
10.3
7.1
19.3
10.3
12.7
38.9
8.9
9.8
12.4
11.9
10.3
10.1
9.1
5.9
2.3
11.8
6.7
10.2
9.2
7.7
6.7
7.2
8.2
10.6
10.5
8.9
9.0
8.8
2.7
-7.9
7.9
4.4
10.7
5.5
11.7
17.6
4.6
4.6
6.3
7.8
6.5
5.7
8.4
2.8
16.2
7.9
3.6
10.3
4.8
11.0
7.4
4.0
4.0
6.8
9.3
6.3
5.6
7.7
2.5
5.5
7.9
3.5
8.1
4.1
6.7
3.9
3.0
3.6
6.1
7.9
5.3
4.9
11.5
24.8
-60.7
17.5
19.9
6.7
26.0
7.2
-11.1
19.4
16.8
28.8
12.3
13.4
14.6
14.5
23.6
-13.4
16.4
15.0
3.0
22.1
6.3
2.9
16.3
15.9
15.5
11.5
12.8
14.0
14.3
17.2
22.1
13.0
14.1
5.6
21.1
9.8
15.9
17.9
17.3
16.1
11.8
13.4
14.1
171
168
69
24
401
230
229
166
311
Buy
Neutral
Buy
Buy
Buy
Buy
Buy
Buy
Buy
4.2
8.9
4.1
5.0
34.6
15.4
5.8
8.2
22.2
3.2
8.2
7.8
5.3
26.9
13.0
5.8
9.6
23.3
5.0
9.9
12.6
4.8
28.5
18.1
10.8
12.4
28.8
40.9
18.9
16.9
4.8
11.6
15.0
39.4
20.4
14.1
20.8
53.4
20.5
8.9
4.5
14.9
17.7
39.2
17.3
13.4
20.6
34.5
16.8
5.5
5.0
14.1
12.7
21.2
13.4
10.8
16.0
23.9
19.7
7.6
9.0
9.8
12.0
22.8
13.4
8.6
16.0
17.0
16.4
7.1
5.7
13.3
11.4
11.5
11.7
7.5
11.7
14.0
11.9
5.4
5.9
11.4
8.1
8.5
8.9
6.5
9.8
2.6
9.6
2.5
11.6
10.9
12.8
4.8
10.4
10.5
5.4
2.0
8.8
4.7
11.3
7.9
9.8
4.6
11.1
10.3
5.0
3.0
8.4
7.0
9.4
7.8
12.5
8.1
12.7
11.9
6.2
Retail
Jubi. Foodworks
Shopper's Stop
Titan Company
Sector Aggregate
1,257
416
229
Sell
Neutral
Neutral
20.9
4.9
8.2
23.2
7.0
8.4
31.1
9.7
9.6
60.1
85.7
28.0
35.5
54.1
59.7
27.2
33.5
40.4
42.9
23.8
28.2
32.3
27.1
21.4
23.8
27.4
21.7
19.5
21.3
19.9
17.4
16.3
17.2
31.2
5.9
42.5
29.3
25.7
7.9
30.2
25.2
25.6
10.1
27.8
24.4
Technology
HCL Technologies
Hexaware Tech.
Infosys
KPIT Tech.
Mindtree
MphasiS
Persistent Systems
TCS
Tech Mahindra
Wipro
Sector Aggregate
1,249
132
3,562
174
1,556
425
988
2,159
1,861
555
Buy
Neutral
Buy
Neutral
Neutral
Neutral
Buy
Neutral
Buy
Buy
57.0
10.9
164.9
10.6
81.7
37.5
46.9
71.2
93.0
25.0
81.6
12.5
184.5
13.9
113.3
51.3
59.9
96.7
126.5
31.4
93.8
14.0
218.8
17.0
129.7
42.0
73.7
110.3
149.0
35.1
21.9
12.1
21.6
16.5
19.0
11.3
21.1
30.3
20.0
22.2
24.8
15.3
10.5
19.3
12.5
13.7
11.7
16.5
22.3
14.7
17.7
19.1
13.3
9.4
16.3
10.2
12.0
10.1
13.4
19.6
12.5
15.8
16.7
8.9
5.1
12.3
4.4
7.5
8.2
5.3
16.6
3.4
12.6
12.7
9.7
6.4
12.9
6.9
10.5
6.3
8.2
16.1
9.4
13.0
13.2
8.8
5.5
10.6
5.2
8.2
7.6
7.0
14.3
8.0
11.3
11.6
32.2
29.3
25.7
22.7
25.8
19.1
20.2
37.8
32.6
21.6
26.7
39.2
28.8
24.3
23.6
32.3
16.0
21.9
40.8
35.1
25.2
28.4
34.5
26.8
26.3
23.3
29.4
16.7
23.0
36.7
32.5
24.1
26.3
329
168
167
131
Buy
Neutral
Buy
Neutral
6.0
5.6
3.1
0.9
9.1
7.3
6.0
5.7
15.7
8.8
9.2
12.0
54.8
30.2
54.8
139.1
54.9
36.2
23.2
27.7
22.9
30.2
20.9
19.2
18.3
10.9
18.3
7.3
9.5
8.4
7.6
7.7
6.8
7.9
7.8
8.9
7.4
5.7
7.3
6.3
6.9
6.1
4.2
6.3
7.4
0.6
4.0
6.0
7.8
12.9
4.0
6.6
9.2
9.1
17.0
8.0
9.9
Real Estate
DLF
Godrej Properties
Indiabulls Real Est.
Jaypee Infratech
Mahindra Lifespace
Oberoi Realty
Phoenix Mills
Prestige Estates
Sobha Developers
Sector Aggregate
Telecommunication
Bharti Airtel
Bharti Infratel
Idea Cellular
Reliance Comm
Sector Aggregate
January 2014
B11
MOSL Universe

CMP (INR)
27.12.13
Utilities
CESC
Coal India
Jaiprakash Power
JSW Energy
NHPC
NTPC
Power Grid Corp.
PTC India
Reliance Infra.
Tata Power
Sector Aggregate
UR = Under Review
449
283
19
56
20
137
100
66
431
90
CMP (INR)
27.12.13
Private Banks
Axis Bank
1,293
Federal Bank
84
HDFC Bank
669
ICICI Bank
1,108
IndusInd Bank
422
ING Vysya Bank
603
J&K Bank
1,411
Kotak Mahindra
737
South Indian Bank
21
Yes Bank
374
Pvt. Bank Aggregate
PSU Banks
Andhra Bank
63
Bank of Baroda
652
Bank of India
236
Canara Bank
282
Corporation Bank
263
Dena Bank
63
IDBI Bank
66
Indian Bank
114
Oriental Bank
228
Punjab Nat.l Bank
635
State Bank
1,770
Union Bank
130
PSU Bank Aggregate
NBFC
Bajaj Finance
1,530
Dewan Housing
212
HDFC
789
IDFC
106
LIC Housing Fin
217
M & M Financial
320
Power Finance Corp 163
Rural Electric. Corp. 217
Shriram Transport
673
NBFC Aggregate
Financial Sector Aggregate
January 2014
Rating
EPS (INR)
FY13 FY14E FY15E
P/E (x)
FY13 FY14E FY15E
EV/EBITDA (x)
FY13 FY14E FY15E
RoE (%)
FY13 FY14E FY15E
Buy
Neutral
Buy
Neutral
Neutral
Buy
Buy
Buy
Buy
Neutral
49.2
28.0
1.3
6.5
1.7
10.5
8.9
6.7
65.2
3.9
9.1
10.1
14.6
8.6
11.7
13.1
11.2
9.9
6.6
23.1
11.2
4.1
7.4
15.4
6.2
8.4
8.8
10.3
8.3
-2.3
15.9
8.5
12.3
28.4
6.3
17.8
7.0
11.2
16.6
5.6
10.7
8.1
15.8
Rating
EPS (INR)
FY13 FY14E FY15E
P/E (x)
FY13 FY14E FY15E
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Neutral
Neutral
Buy
110.7
9.8
28.3
72.2
20.3
39.6
217.5
29.3
3.8
36.3
128.6
7.8
35.8
84.1
25.5
38.4
234.5
33.0
3.4
43.3
145.7
9.7
44.8
92.7
29.9
41.4
246.4
37.8
3.6
49.7
11.7
8.6
23.7
15.4
20.8
15.2
6.5
25.2
5.5
10.3
16.7
10.1
10.8
18.7
13.2
16.6
15.7
6.0
22.3
6.1
8.6
14.2
8.9
8.7
15.0
11.9
14.1
14.6
5.7
19.5
5.7
7.5
12.3
1.8
1.1
4.4
2.0
3.0
2.1
1.4
3.6
1.0
2.3
2.9
1.6
1.0
3.7
1.8
2.6
1.6
1.2
3.1
0.9
1.9
2.4
1.4
1.0
3.1
1.6
2.3
1.5
1.0
2.7
0.8
1.6
2.1
18.5
13.9
20.3
14.8
17.8
14.6
23.6
15.5
20.5
24.8
17.2
16.9
10.1
21.6
15.2
16.7
12.4
21.5
15.0
14.9
24.1
17.0
16.6
11.5
22.7
14.7
17.1
10.5
19.4
14.8
14.3
22.9
17.2
Neutral
Buy
Neutral
Neutral
Neutral
Neutral
Neutral
Buy
Buy
Buy
Buy
Neutral
23.0
106.0
46.1
64.8
93.8
23.1
14.1
36.8
45.5
134.3
261.9
36.0
11.4
104.1
44.3
48.3
53.3
14.4
11.2
26.7
37.1
94.5
195.3
24.2
15.2
105.4
49.3
56.3
68.6
16.6
12.5
31.3
42.9
121.9
238.1
29.2
2.7
6.1
5.1
4.4
2.8
2.7
4.7
3.1
5.0
4.7
6.4
3.6
5.5
5.6
6.3
5.3
5.8
4.9
4.4
5.9
4.3
6.2
6.7
8.5
5.4
7.1
4.2
6.2
4.8
5.0
3.8
3.8
5.3
3.6
5.3
5.2
7.1
4.5
6.0
0.4
0.9
0.7
0.5
0.4
0.5
0.5
0.5
0.6
0.7
0.9
0.5
0.8
0.4
0.8
0.6
0.5
0.4
0.4
0.4
0.4
0.5
0.7
0.9
0.5
0.7
0.4
0.7
0.6
0.5
0.4
0.4
0.4
0.4
0.5
0.6
0.8
0.4
0.7
16.2
16.1
13.6
13.3
16.1
17.6
10.2
15.6
11.5
16.5
15.9
15.0
14.9
7.3
13.9
12.3
9.1
8.2
9.9
7.4
10.1
8.8
10.3
10.6
8.9
10.2
9.2
12.7
12.2
9.8
9.9
10.5
7.8
11.0
9.5
12.1
11.8
10.0
11.1
Buy
Buy
Buy
Buy
Buy
Buy
Neutral
Neutral
Buy
118.8
35.2
31.4
12.1
20.3
15.7
34.3
38.7
64.7
150.9
44.2
35.2
12.8
24.7
17.8
41.0
47.2
65.0
180.6
54.1
40.1
14.6
28.9
21.2
45.2
52.9
73.7
12.9
6.0
25.2
8.7
10.7
20.4
4.7
5.6
10.4
12.2
10.4
10.1
4.8
22.4
8.3
8.8
18.0
4.0
4.6
10.4
10.5
10.6
8.5
3.9
19.7
7.2
7.5
15.1
3.6
4.1
9.1
9.3
9.1
2.3
0.8
4.9
1.2
1.7
4.0
0.9
1.2
2.1
2.5
1.7
1.9
0.7
4.4
1.1
1.4
3.5
0.8
1.0
1.8
2.1
1.5
1.6
0.6
4.0
1.0
1.3
3.0
0.7
0.9
1.5
1.8
1.3
21.9
17.1
23.8
14.1
16.8
23.4
20.1
23.6
20.6
20.3
16.5
20.4
16.3
25.6
13.4
17.8
20.8
20.7
24.1
17.5
19.8
14.0
20.6
17.2
25.2
13.9
17.9
21.2
19.6
22.6
17.1
19.6
14.5
55.0
28.5
1.3
7.6
2.1
11.5
8.5
8.1
50.6
3.7
56.9
30.5
2.2
6.7
2.4
13.5
10.3
8.1
54.8
3.6
8.2
9.9
14.5
7.3
9.3
12.0
11.7
8.1
8.5
24.1
10.8
7.9
9.3
8.7
8.3
8.4
10.2
9.7
8.2
7.9
25.2
9.7
5.1
5.8
13.1
5.0
9.0
9.1
9.3
7.0
0.3
11.5
7.9
4.8
5.5
7.1
5.2
7.7
8.2
8.8
6.4
0.6
10.7
7.2
P/BV (x)
FY13 FY14E FY15E
12.5
24.8
5.8
19.0
7.8
11.4
14.7
5.1
6.7
9.6
15.0
11.6
23.6
9.6
15.1
8.6
12.5
14.7
5.6
6.9
8.1
15.4
RoE (%)
FY13 FY14E FY15E
B12
December 2013 Results Preview
Sectors & Companies

BSE Sensex: 21,194
S&P CNX: 6,314
Note: In our quarterly performance tables, our four-quarter numbers may not always add up to the full-year
numbers. This is because of differences in classification of account heads in the companys quarterly and
annual results or because of differences in the way we classify account heads as opposed to the company.
All stock prices and indices as on 27 December 2013, unless otherwise stated.
January 2014
C1
December 2013 Results Preview | Sector: Automobiles
Automobiles
Companies Covered
Ashok Leyland
Bajaj Auto
Eicher Motors
Exide Industries
Hero MotoCorp
Mahindra & Mahindra
Maruti Suzuki India
Tata Motors
TVS Motor
Underlying demand remains weak; however festive season led buying and good
monsoon helped tractors and two-wheeler sales: Considering the slowdown in
economic activity and consequent weakness in consumer and business sentiments,
demand continues to remain weak across auto segments. MHCVs and cars have
been the worst impacted. However, tractor volumes continue to remain strong on
favorable monsoon and high farm income. Two-wheeler sales also picked up during
the festive season driven by rural markets.
3QFY14E margins to improve 20bp QoQ on higher volumes: EBITDA margins for our
auto coverage universe (excluding JLR) are expected to improve 20bp QoQ (+200bp
YoY) on higher volumes. YoY margin improvement is driven by two-wheeler majors
Hero Moto, Bajaj Auto, M&M (driven by strong tractor sales) and MSIL (helped by
SPIL merger). Excluding MSIL, margins for our coverage universe would improve by
60bp QoQ (160bp YoY). Continued demand weakness and consequent high
discounting pressure is expected to further exert pressure on margins of CV players.
Easing of macro headwinds to be key catalyst for demand recovery: With expected
increase in rural incomes due to favorable monsoon, coupled with election spending
led improvement in macro-economic environment, we expect better 4Q for the
auto sector. Over the long term, easing macro headwinds in terms of lower interest
rates and higher economic growth would be the key driver for volume growth,
profitability and in turn re-rating.
Valuation and view: Considering the near term weakness in demand environment,
we downgrade the volume growth/earnings estimates for most companies.
Our estimates for Bajaj Auto have been lowered by 4.1%/4% for FY14E/15E, largely
reflecting continued weakness in domestic business. Similarly, we lower the
estimates for HMCL by 3%/4.7% for FY14E/15E EPS.
For Maruti, our FY15E EPS estimates are raised by 8.6% to factor the recent favorable
movement in JPY/INR. Due to continued weakness in UV demand, partially offset by
the strength in tractor volumes, we downgrade M&M's consolidated FY14E/15E EPS
by 2.7%/2%.
Expected quarterly performance summary

CMP
(INR)
27.12.13
Ashok Leyland
17
Bajaj Auto
1,935
Eicher Motors
4,976
Exide Inds.
121
Hero Motocorp
2,087
Mahindra & Mahindra
965
Maruti Suzuki
1,775
Tata Motors
371
TVS Motor
69
Sector Aggregate
(INR Million)
Rating
Dec.13
Neutral
Buy
Buy
Neutral
Buy
Buy
Buy
Buy
Buy
19,079
52,168
16,887
14,602
67,712
101,563
108,670
604,100
19,856
1,004,637
Sales
Var.
% YoY
-19.9
-3.6
2.1
-0.1
10.1
-0.8
-3.0
31.1
10.4
16.3
Var. Dec.13
% QoQ
-25.2
-65
0.8 11,124
0.3
1,473
2.3
2,050
18.9
7,428
17.3 15,678
3.8 12,542
6.2 87,594
-0.1
1,163
6.3 138,988
EBITDA
Var.
% YoY
PL
9.9
24.9
24.5
39.5
13.7
40.7
54.8
9.0
39.5
Var.
% QoQ
PL
-1.7
-6.3
1.9
25.7
25.0
-5.1
1.4
-0.7
3.2
Net Profit
Dec.13
Var.
% YoY
-1,684
Loss
8,696
6.2
939
29.1
1,248
19.9
5,956
22.1
10,128
10.7
6,611
31.9
32,691
88.5
651
23.7
65,235
41.8
Var.
% QoQ
Loss
3.9
9.5
5.3
23.7
-1.4
-1.4
-12.8
-1.6
-6.8
Jinesh Gandhi (Jinesh@MotilalOswal.com) / Chirag Jain (Chirag.Jain@MotilalOswal.com)

January 2014
C2
We raise TTMT FY14E/15E EPS by 3.3%/4.5% respectively driven by continued strength

in JLR volumes and consequent margins, partially offset by weak standalone
performance.
Demand environment and changing competitive landscape in the auto sector would
be the key determinants of stock performance. Prefer Hero MotoCorp and Maruti
Suzuki in large caps and TVS Motor and Eicher Motors in mid-caps.
Volume snapshot for 3QFY14 ('000 units)

Two wheelers
Three wheelers
Passenger cars
UVs & MPVs
Total PVs
M&HCV
LCV
Total CVs
Total
3QFY14
4,383
207
563
200
762
53
138
191
5,544
3QFY13
4,089
241
606
211
816
62
147
209
5,355
YoY (%)
7.2
-14.1
-7.1
-5.2
-6.6
-13.9
-6.2
-8.5
3.5
2QFY14 QoQ (%)

4,064
7.9
214
-3.3
627
-10.3
182
9.9
809
-5.8
56
-4.4
137
0.9
192
-0.6
5,279
5.0
9MFY14
12,394
623
1,703
559
2,262
169
399
567
15,846
9MFY13 YoY (%)

11,870
4.4
628
-0.7
1,748
-2.6
543
2.9
2,291
-1.3
213
-20.7
425
-6.3
638
-11.1
15,427
2.7
Source: SIAM, MOSL
Revised EPS estimates (INR)

EPS
Bajaj Auto
Hero MotoCorp
Maruti *
M&M *
Tata Motors *
Ashok Leyland
Eicher Motors *
Exide Industries
* Consolidated
January 2014
Rev
114.4
113.3
96.4
76.5
45.3
-1.8
132.5
6.5
FY14E
Old
119.3
116.8
96.3
78.7
43.9
-1.4
142.4
6.7
Chg (%)
-4.1
-3.0
0.0
-2.7
3.3
NA
-7.0
-2.8
Rev
133.6
154.1
117.3
84.7
48.7
-0.1
195.7
7.7
FY15E
Old
139.2
161.7
108.0
86.4
46.6
0.5
201.6
8.1
Chg (%)
-4.0
-4.7
8.6
-2.0
4.5
-114.2
-2.9
-4.6
C3
Trend in segment-wise EBITDA margins (%)
Commodity cost (index)
Source: Bloomberg, MOSL
Trend in key currencies v/s INR
Trend in EBITDA margins (%)
Source: Company, MOSL
HDFC Bank's Base rate trend
Source: HDFC Bank PLR
January 2014
Trend in petrol and diesel prices
C4
Trend in key financials

Volumes (000 units)
3Q
YoY
QoQ
FY14E
(%)
(%)
976
-13.5
1.5
1,671
6.2
18.0
506
-2.4
-0.1
286
-5.2
3.7
204
-2.6
16.0
137
-33.0
-9.9
BJAUT
HMCL*
TVS Motor
MSIL
MM
TTMT (S/A)
TTMT (Cons)
Ashok Leyland
18
-21.8
Eicher Motors
Exide Industries
*Normalized for royalty adjusted
(23.3)
EBITDA Margins (%)

Adj PAT (INR M)
3Q
YoY
QoQ
3Q
YoY
QoQ
FY14E
(bp)
(bp) FY14E
(%)
(%)
21.3 260.0
-60.0 8,696
6.2
3.9
11.0 230.0
60.0 5,956
22.1
23.7
5.9
-10.0
0.0
651
23.7
-1.6
11.5 360.0 -110.0 6,611
31.9
-1.4
15.4 200.0 100.0 10,128
10.7
-1.4
1.5
-70.0
-50.0 -6,247
38.1
NA
14.5 220.0
-70.0 32,691
88.5
-12.8
-0.3 -460.0 -250.0 -1,684
NA
NA
8.7 160.0
-60.0
939
29.1
9.5
14.0 280.0
0.0 1,248
19.9
5.3
Relative Performance-3m (%)
Relative Performance-1Yr (%)
Sens ex Index
MOSL Automobi l es Index
Sens ex Index
MOSL Automobi l es Index
120
110
110
105
100
100
90
Dec-13
Jun-13
Dec-12
Sep-13
80
Dec-13
Nov-13
Oct-13
Sep-13
95
Mar-13
115
Comparative valuation
CMP (INR)
27.12.13
Automobiles
Ashok Leyland
Bajaj Auto
Eicher Motors
Exide Inds.
Hero Motocorp
Mah. & Mahindra
Maruti Suzuki
Tata Motors
TVS Motor
Sector Aggregate
January 2014
17
1,935
4,976
121
2,087
965
1,775
371
69
Rating
EPS (INR)
FY13 FY14E FY15E
P/E (x)
FY13 FY14E FY15E
EV/EBITDA (x)
FY13 FY14E FY15E
RoE (%)
FY13 FY14E FY15E
Neutral
Buy
Buy
Neutral
Buy
Buy
Buy
Buy
Buy
0.6
105.2
120.1
6.2
106.1
60.9
80.2
32.1
3.8
26.4
18.4
41.4
19.7
19.7
15.8
22.1
11.6
18.0
15.9
8.9
12.4
11.3
11.8
12.2
5.8
7.2
4.3
5.3
6.1
3.9
43.7
20.8
15.3
45.6
22.4
12.9
29.4
15.1
24.1
-1.8
114.4
132.5
6.5
113.3
76.5
96.4
45.3
5.3
-0.1
133.6
195.7
7.7
154.1
84.7
117.3
48.7
7.5
NA
16.9
37.6
18.5
18.4
12.6
18.4
8.2
12.9
12.8
NA
14.5
25.4
15.7
13.5
11.4
15.1
7.6
9.2
11.0
48.1
11.0
19.2
9.4
13.6
6.0
8.7
3.6
8.0
5.7
8.7
9.1
13.7
8.0
9.5
5.1
6.8
3.2
5.8
4.9
-10.6
38.0
20.2
14.6
42.1
20.9
13.6
32.9
19.2
24.3
-0.4
37.0
25.1
15.4
47.6
18.7
14.7
26.7
23.1
23.0
C5
Ashok Leyland
Bloomberg
Equity Shares (m)
M. Cap. (INR b)/(USD b)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
AL IN
2,660.7
44 / 1
28 / 12
1 / -29 / -48
Financials & Valuation (INR b)

Y/E March
Sales
EBITDA
2013 2014E 2015E

125
9
97.2 121.6
1.3
2016E
144.1
7.0
9.4
NP
1.7
(4.7)
(0.2)
1.6
Adj. EPS (INR)
0.6
(1.8)
(0.1)
0.6
EPS Gr. (%)
(73.3)
NA
NA
NA
16.7
16.7
17.1
17.6
RoE (%)
3.9 (10.6)
(0.4)
3.5
RoCE (%)
6.5
3.8
6.1
95.6 (11.3) (586.4)
163.8
BV/Sh. (INR)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
26.4
1.0
9.2
3.6
(1.9)
(9.3) (242.6)
1.0
1.0
63.6 11.8
1.2
2.4
27.1
0.9
8.8
6.0
CMP: INR17
Neutral
Expect volumes to decline 21.8% YoY (-23.3% QoQ) on continued

weakness in economic activity and pressure on CV demand.
MHCV volumes expected to decline 32% YoY (on the back of 29%
decline last year). Sequentially, MHCV volumes are expected to decline
37% to 10,008 units (worst quarterly volumes since 3QFY09). LCV (Dost,
Stile) volumes are also expected to decline 3% YoY to 7,710 units.
EBITDA margin expected at negative 30bp (v/s 2.2% in 2QFY14 and
4.3% in 3QFY13) on weak volumes and continued pressure on
discounts.
Expect to report a PBT loss of INR2.1b (v/s PBT loss of INR1.35b in
2QFY14). In Dec-13, ALL sold shares in Indusind Bank worth INR750m
to raise funds.
We cut FY14E/15E EPS on continued weakness in CV industry and
consequent margin pressure.
Key issues to watch out
Current demand environment and discounting trend, plant and
channel inventory for MHCVs.
Industry growth, market share guidance for 4QFY14/FY15.
Pantnagar volume guidance, RM cost outlook and margin guidance
for 4QFY14/FY15.
Capex, investment guidance and divestment plans for 4QFY14/FY15.
Quarterly Performance
(INR Million)
Y/E March
Total Volumes (nos)
Growth (%)
Realizations ('000)
Change (%)
Net Sales
Change (%)
RM/Sales %
Staff / sales %
Oth. Exp./ Sales %
EBITDA
EBITDA Margins (%)
Other Income
Interest
Depreciation
PBT before EO Exp
EO Exp/(Inc)
PBT
Tax
Effective Tax Rate (%)
Rep. PAT
Change (%)
Adj. PAT
Change (%)
E: MOSL Estimates
January 2014
FY13
1Q
27,487
42.6
1,094
-16.1
30,074
19.7
72.8
8.9
10.3
2,407
8.0
129
834
893
810
0
810
140
17.3
670
-22.3
670
-22.3
2Q
29,840
25.0
1,105
-15.4
32,960
5.8
72.8
8.0
9.1
3,341
10.1
239
1,036
984
1,559
0
1,559
133
8.5
1,426
-7.5
1,426
-7.5
3Q
22,666
-2.2
1,050
-16.2
23,805
-18.0
71.9
11.0
12.8
1,023
4.3
141
1,071
931
-838
-1,563
725
-17
-2.3
741
10.8
-858
-228.2
FY14
4Q
34,627
-4.9
1,077
-9.1
37,285
-13.5
75.8
7.6
11.4
1,983
5.3
115
828
1,000
271
-1,344
1,614
114
7.1
1,500
-42.0
251
-90.2
1Q
21,721
-21.0
1,088
-0.5
23,638
-21.4
75.5
10.9
12.6
233
1.0
123
1,007
952
-1,603
65
-1,669
-251
15.0
-1,418
-311.6
-1,362
-303.3
2Q
23,110
-22.6
1,103
-0.1
25,496
-22.6
76.3
10.0
11.5
563
2.2
231
1,244
901
-1,351
-438
-914
-663
72.6
-251
-117.6
-371
-126.0
3QE
17,718
-21.8
1,077
2.5
19,079
-19.9
76.5
12.8
11.0
-65
-0.3
150
1,250
940
-2,105
0
-2,105
-421
20.0
-1,684
-327.1
-1,684
96.4
4QE
25,974
-25.0
1,116
3.7
28,998
-22.2
76.6
9.3
12.3
531
1.8
166
1,093
960
-1,355
0
-1,355
-270
19.9
-1,086
-172.4
-1,086
-531.7
FY13
FY14E
114,620
11.6
1,089
-13.4
124,812
-3.4
73.1
8.6
11.3
8,765
7.0
624
3,769
3,808
1,812
-2,896
4,707
370
7.9
4,337
-33.0
1,669
-74.2
88,023
-23.2
1,104
1.4
97,212
-22.1
76.2
10.6
11.9
1,261
1.3
670
4,594
3,752
-6,415
-372
-6,042
-1,605
26.6
-4,438
-202.3
-4,711
-382.3
C6
Bajaj Auto
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
BJAUT IN
289.4
560 / 9
2,229 / 1,658
-4 / -7 / -19

Y/E March
2013 2014E 2015E
2016E
Sales
200.0 203.2 233.7
273.4
EBITDA
NP
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
36.4
42.0
48.4
30.4
33.1
38.7
45.9
105.2 114.4 133.6
158.5
(2.0)
8.8
57.7
16.7
18.7
273.1 329.0 392.8
475.8
RoE (%)
43.7
38.0
37.0
36.5
RoCE (%)
59.8
52.9
51.2
50.3
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
49.7
51.1
52.2
47.7
18.4
7.1
13.5
2.3
16.9
5.9
11.0
2.6
14.5
4.9
9.1
3.1
12.2
4.1
7.2
3.4
CMP: INR1,935
Buy
Expect 3QFY14E volumes to decline 13.5% YoY (+1.5% QoQ) to 0.98m

units. Sequential growth is driven by seasonal pick-up in domestic
demand during the festive season.
EBITDA margin to decline 60bp QoQ (+260bp YoY) to 21.3%, driven by
unfavorable mix on higher share of Discover M (100cc motorcycle) and
lower share of high margin 3W volumes (from 11.6% to 10.6%), partially
offset by favorable export realizations (2Q realizations stood at 60.9/
USD).
Expect PAT to rise 6.2% YoY (+3.9% QoQ) to INR8.7b.
We downgrade FY14E/FY15E EPS by 4.1%/4% as we cut our volume
assumptions on continued weakness in demand, particularly in the
standalone business.

Update on retail demand post festive season and channel inventory.
Guidance for 4QFY14 volumes and margins.
Details on new launches, update on forex hedges on exports for FY14/
FY15.
Update on RE60 launch timeline (for export and domestic market),
volume and margin guidance.
(INR Million)
Y/E March
Volumes ('000 units)
Growth YoY (%)
Realization (INR/unit)
Growth YoY (%)
Net Sales
Change (%)
RM (%)
Staff cost (%)
Oth. Exp. (%)
EBITDA
Growth YoY (%)
EBITDA Margins (%)
Other Income
Interest
Depreciation
PBT
Rep. PAT
Change (%)
Adj. PAT
Growth YoY (%)
E: MOSL Estimates
January 2014
FY13
1Q
1,079.0
-1.3
45,095
4.7
48,657
3.4
72.1
3.3
6.9
8,717
3.8
17.9
1,820
0
352
10,184
29.5
7,184
1.0
7,184
1.0
2Q
1,049.2
-9.9
47,392
6.4
49,724
-4.1
71.8
3.1
7.0
9,152
-6.2
18.4
1,667
2
410
10,407
28.8
7,407
2.0
7,407
(6.2)
3Q
1,127.7
4.9
47,996
3.5
54,127
8.6
72.4
2.9
6.2
10,118
2.8
18.7
2,032
1
411
11,738
30.2
8,187
3.0
8,187
(1.8)
FY14
4Q
981.2
-3.5
48,372
2.1
47,465
-4.5
71.8
3.5
7.6
8,366
-4.2
17.6
2,436
2
466
10,334
25.9
7,658
3.4
7,658
0.9
1Q
979.3
-9.2
50,150
11.2
49,111
0.9
69.4
3.7
8.8
9,067
4.0
18.5
1,756
1
444
10,378
28.9
7,377
2.7
7,377
2.7
2Q
961.3
-8.4
53,831
13.6
51,749
4.1
67.0
3.5
7.8
11,320
23.7
21.9
1,242
0
443
12,118
30.9
8,372
13.0
8,372
13.0
3QE
975.9
-13.5
53,455
11.4
52,168
-3.6
67.8
3.7
7.5
11,124
9.9
21.3
1,750
2
450
12,422
30.0
8,696
6.2
8,696
6.2
FY13
4QE
941.5
-4.1
53,268
10.1
50,152
-3.1
67.5
4.1
7.7
10,527
19.1
21.0
2,327
10
456
12,387
30.0
8,670
3.6
8,670
13.2
FY14E
4,237.2
3,858
(2.6)
(8.9)
47,195 52,664
5.1
11.6
199,973 203,179
2.4
1.6
72.0
68.2
3.2
3.8
6.9
7.9
36,353 41,416
-2.3
13.9
18.2
20.4
7,955
7,074
5
13
1,640
1,793
42,662 46,684
28.7
30.4
30,436 32,492
1.3
6.8
30,436 33,114
-2.0
8.8
C7
Eicher Motors
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
EIM IN
27.0
134 / 2
5,295 / 2,512
7 / 38 / 71

Y/E December
2012 2013E 2014E
2015E
Net Income
63.9
67.7
83.4
105.6
5.5
6.4
8.6
11.7
3.2
3.9
5.3
7.0
120.1 132.5 195.7
259.7
EBITDA
Net Profit
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
5.0
10.3
47.8
32.7
603.6 706.9 854.2 1,055.3
RoE (%)
20.8
20.2
25.1
27.2
RoCE (%)
23.0
20.8
23.6
28.1
0.4
0.5
0.6
0.7
41.4
8.2
35.1
0.4
37.6
7.0
24.8
0.5
25.4
5.8
16.3
0.6
19.2
4.7
11.9
0.7
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
CMP: INR4,976
Buy
With higher production and continued demand momentum, Royal

Enfields volumes to increase 75% YoY (+16% QoQ). Expect flat QoQ
standalone margin at 19.3% (+780bp YoY), as we expect Caf Racer
launch expenses to offset operating leverage benefits.
Expect VECVs volumes to decline 29% YoY (-12% QoQ). VECVs margins
are expected to decline 210bp YoY (-150bp QoQ) to 4.1% due to rampup in MDEP (engine export project), lower volumes and continued
pressure on discounts.
Expect 2.1% YoY (flat QoQ) growth in consolidated sales. Consolidated
margins to improve 160bp YoY (-60bp QoQ) to 8.7%. Consolidated PAT
(after minority) to grow by 29% YoY (+9.5% QoQ) to INR939m.
Company plans to sell 250,000 units in CY14 (v/s 180,000 units expected
in CY13) in the Royal Enfield division. While the CV business remains
weak with no signs of stability yet, Eicher would launch an all-new
range of CVs (based on Volvos technical inputs) from Jan-14 onwards.

Ramp-up of Medium Duty engine project, update on commissioning/
launch of bus body plant and new HCV range.
Update on CV demand trends, discount levels and channel inventory.
New launches and timelines under Royal Enfield business.
(INR Million)
Y/E December
Net Op Income
Growth (%)
EBITDA
EBITDA Margins (%)
Depreciation
Other income
Interest cost
PBT before EO item
Exceptional Exp/(Inc)
PBT after EO item
Effective tax rate (%)
PAT
Minority interest
Recurring PAT
Growth (%)
Standalone (Royal Enfield)
Royal Enfield (units)
Growth (%)
Net Realizations (INR/unit)
Change - QoQ (%)
VECV (derived)
Total CV Volumes
Growth (%)
Net Realizations (INR '000/unit)
Change - QoQ (%)
E: MOSL Estimates
January 2014
CY12
CY13
1Q
16,950
21.7
1,802
10.6
177
543
9
2,160
0
2,160
24.3
1,634
539
1,096
49.5
2Q
15,850
22.1
1,395
8.8
187
306
9
1,506
0
1,506
25.3
1,125
366
759
-0.6
3Q
14,831
2.2
1,114
7.5
213
246
12
1,135
0
1,135
17.4
937
277
660
-10.5
4Q
16,536
4.7
1,180
7.1
245
271
10
1,196
0
1,196
12.1
1,052
324
727
-14.9
1Q
17,243
1.7
1,705
9.9
275
444
6
1,868
0
1,868
28.9
1,328
348
979
-10.6
2Q
16,699
5.4
1,662
10.0
296
211
12
1,565
0
1,565
19.6
1,258
335
923
21.7
3Q
16,834
13.5
1,572
9.3
336
153
23
1,366
-527
1,893
23.1
1,456
382
857
29.9
4QE
16,887
2.1
1,473
8.7
356
270
21
1,367
0
1,367
23.1
1,051
112
939
29.1
23,899
40.8
92,083
2.5
27,519
48.1
92,162
0.1
30,046
49.7
91,476
-0.7
31,968
68.2
92,345
1.0
34,737
45.3
95,299
3.2
40,040
45.5
93,911
-1.5
48,240
60.6
94,857
1.0
56,043
75.3
95,514
0.7
14,346
13.0
1,019
-6.9
12,016
9.0
1,098
7.7
10,791
-14.1
1,108
0.9
11,735
-8.1
1,138
2.7
12,529
-12.7
1,099
-3.4
11,027
-8.2
1,152
4.8
9,428
-12.6
1,277
10.9
8,309
-29.2
1,364
6.8
CY12
CY13E
63,899
11.6
5,490
8.6
822
1,366
38
5,997
0
5,997
20.8
4,749
1,506
3,243
5.0
67,663
5.9
6,412
9.5
1,262
1,078
62
6,166
0
6,166
25.9
4,566
1,177
3,389
4.5
113,432 179,058
52.0
57.9
92,015 94,938
3.2
48,888
-0.3
1,081
5.8
41,293
-15.5
1,207
11.6
C8
Exide Industries
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
EXID IN
850.0
103 / 2
150 / 111
6 / -12 / -23
CMP: INR121
Expect flat YoY revenue at INR14.6b (+2% QoQ).
EBITDA margin expected to improve 280bp YoY (flat QoQ) to 14%.

Average lead cost has remained largely stable QoQ. Exide undertook
a price cut effective Nov-13 on the back of reversal in USD/INR rates
and pressure on replacement market share.
PAT expected to grow by 20% YoY (+5% QoQ) to INR1.25b on a low

base.
We downgrade FY14E/FY15E EPS by 2.8%/4.6% on continued weakness

in OEM demand outlook and consequent impact on margins on lower
capacity utilization (considering its 40-45% volume exposure to OEM
segment).

Y/E March
Net Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Growth (%)
BV/Share (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2013 2014E 2015E

60.7 60.8 68.2
7.8
9.0 10.0
5.2
5.6
6.6
6.2
6.5
7.7
13.4
6.2 18.4
40.3 44.8 50.1
15.3 14.6 15.4
21.2 20.9 21.5
26.0 26.8 25.9
19.7
3.0
10.9
1.3
18.5
2.7
9.4
1.4
15.7
2.4
8.0
1.7
2016E
77.8
11.4
7.4
8.7
13.2
56.6
15.5
21.6
22.9
13.8
2.1
6.7
1.7
Neutral

Update on demand environment for OEMs, auto replacement and
industrial battery segment.
Outlook on RM cost trend, recent pricing action and currency hedges
if any.
Update on capacity expansion plans across product segments.
(INR Million)
Y/E March
Net Sales
Growth YoY (%)
RM (%)
Employee Cost (%)
Other Exp. (%)
EBITDA
EBITDA Margin (%)
Change (%)
Non-Operating Income
Interest
Depreciation
PBT after EO Exp
Tax
Rep. PAT
Change (%)
Adj. PAT
Change (%)
E: MOSL Estimates
January 2014
FY13
1Q
15,511
24.8
65.1
5.4
14.5
2,328
15.0
4.6
147
14
276
2,185
665
30.4
1,520
-6.8
1,520
-6.8
2Q
15,168
29.1
66.2
5.9
15.5
1,882
12.4
108.5
125
10
282
1,716
514
30.0
1,202
135.0
1,202
135.0
3Q
14,622
17.0
67.2
5.8
15.7
1,647
11.3
-0.5
121
11
289
1,469
428
29.1
1,041
-0.2
1,041
-0.2
FY14
4Q
15,382
6.4
67.1
5.8
13.8
2,044
13.3
-4.0
304
8
288
2,053
588
28.7
1,465
2.8
1,465
2.8
1Q
16,263
4.9
64.3
5.8
13.8
2,624
16.1
12.7
62
4
300
2,383
795
33.3
1,588
4.5
1,588
4.5
2Q
14,280
-5.9
65.5
6.0
14.5
2,012
14.0
6.9
37
5
313
1,731
546
31.6
1,185
-1.5
1,185
-1.5
3QE
14,602
-0.1
65.8
6.2
14.0
2,050
14.0
24.5
100
5
323
1,821
574
31.5
1,248
19.9
1,248
19.9
4QE
15,690
2.0
65.1
6.0
14.3
2,275
14.5
11.3
322
7
336
2,254
724
32.1
1,531
4.5
1,531
4.5
FY13
FY14E
60,718
18.9
66.5
5.7
14.8
7,899
13.0
14.8
704
42
1,135
7,427
2,195
29.6
5,232
13.4
5,232
13.4
60,835
0.2
65.2
6.0
14.2
8,960
14.7
13.4
521
20
1,272
8,189
2,638
32.2
5,551
6.1
5,551
6.1
C9
Hero MotoCorp
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
HMCL IN
199.7
417 / 7
2,215 / 1,434
-2 / 14 / 2

Y/E March
Sales
EBITDA
NP
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2013
235.8
31.0
21.2
106.1
(10.9)
250.7
45.6
43.6
65.1
2014E
252.8
36.0
22.6
113.3
6.8
287.7
42.1
53.8
66.0
2015E
289.2
40.9
30.8
154.1
36.1
360.5
47.6
62.8
52.2
2016E
332.8
47.9
37.3
186.9
21.3
460.2
45.5
61.8
46.1
19.7
8.3
12.3
2.9
18.4
7.3
10.5
3.1
13.5
5.8
9.0
3.4
11.2
4.5
7.4
3.6
CMP: INR2,087
Buy
Expect Hero Motos (HMCL) 3QFY14E volumes to rise 6.2% YoY (+18%
QoQ) to 1.67m units. Strong sequential growth is driven by robust
retails during the festive season. HMCLs festive retails increased by
10% to 1.2m units.
Margins (adjusted for royalty amortization) to improve 60bp QoQ

(+230bp QoQ) to 11%, driven by higher volumes, marginal benefits
from cost reduction measures, partially offset by adverse JPY/INR
movement in 2Q (impact on vendors import with a quarter lag).
Demand environment for the two-wheeler industry has weakened

post the festive season, though rural continues to perform better than
urban markets.
We downgrade FY14E/FY15E EPS by 3%/4.7% as we moderate our

volume growth assumption and consequent compression in margins.

Update on retail demand, post festive season, and channel inventory.
Guidance for 4QFY14 volumes and margins.
Guidance on FY14 volume growth and margins, update on export
plans and new launches together with timelines.
(INR Million)
Y/E March
Total Volumes ('000 nos)
Growth YoY (%)
Net Realization
Growth YoY (%)
Net Sales
Change (%)
RM Cost (% sales)
Staff Cost (% sales)
Other Exp (% sales)
EBITDA
EBITDA Margins (%)
Adj. EBITDA Margins (%)
Other Income
Interest
Depreciation
PBT
Tax
PAT
Adj. PAT
Growth (%)
E: MOSL Estimates
January 2014
FY13
1Q
1,642
7.4
37,799
2.6
62,078
10.1
74.1
3.3
8.1
8,974
14.5
10.7
1,439
29
3,035
7,349
1,194
16.3
6,155
6,155
10.3
2Q
1,333
-13.7
38,649
3.2
51,512
-10.9
73.2
3.7
9.8
6,829
13.3
9.0
1,356
30
2,895
5,261
855
16.3
4,406
4,406
-27.0
3Q
1,573
-1.0
39,102
3.9
61,513
2.8
74.5
3.2
10.2
7,423
12.1
8.7
1,264
30
2,832
5,826
947
16.3
4,879
4,879
-20.4
FY14
4Q
1,525
-3.0
39,810
5.0
60,725
1.8
73.1
3.7
10.4
7,765
12.8
9.6
1,778
31
2,655
6,857
1,115
16.3
5,742
5,742
-4.9
1Q
1,559
-5.1
39,300
4.0
61,268
-1.3
72.7
3.6
9.3
8,825
14.4
11.1
1,449
30
2,744
7,502
2,016
26.9
5,486
5,486
-10.9
2Q
1,416
6.3
40,223
4.1
56,965
10.6
71.9
4.0
10.0
8,029
14.1
10.4
1,452
30
2,869
6,583
1,769
26.9
4,814
4,814
9.3
3QE
1,671
6.2
40,523
3.6
67,712
10.1
72.8
3.6
9.7
9,421
13.9
11.0
1,500
31
2,743
8,147
2,192
26.9
5,956
5,956
22.1
FY13
4QE
1,638
7.4
40,800
2.5
66,824
10.0
72.1
3.5
9.8
9,723
14.5
11.6
1,673
35
2,785
8,576
2,212
25.8
6,364
6,364
10.8
FY14E
6,074
6,284
-2.6
3.5
38,828 40,224
3.6
3.6
235,827 252,769
0.9
7.2
73.8
72.4
3.5
3.7
9.6
9.7
30,991 35,999
13.1
14.2
9.5
11.0
5,838
6,075
119
125
11,418 11,141
25,292 30,808
4,110
8,188
16.3
26.6
21,182 22,620
21,182 22,620
-9.5
6.8
C10
Mahindra & Mahindra

Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
MM IN
615.9
594 / 10
1,026 / 742
-1 / -9 / -6
CMP: INR965

Y/E March
2013 2014E 2015E
Sales
404.4 385.6 428.2
EBITDA
47.1 50.4 55.3
NP (incl. MVML) 36.3 37.6 39.1
Adj. EPS (INR)
60.7 62.8 65.2
EPS Gr. (%)
24.8
3.4
3.9
Cons. EPS (INR) 60.9 76.5 84.7
BV/Share (INR) 248
296
346
RoE (%)
22.4 20.9 18.7
RoCE (%)
23.2 22.0 21.1
Payout (%)
26.6 26.4 26.9
Valuations
P/E (x)
15.9 15.4 14.8
Cons. P/E (x)
15.8 12.6 11.4
P/BV (x)
3.9
3.3
2.8
EV/EBITDA (x)
7.4 11.0
9.8
Div. Yield (%)
1.3
1.5
1.6
* Incl. MVML
2016E
483.9
61.5
43.5
72.8
11.5
94.3
403
17.8
20.5
24.3
13.3
10.2
2.4
8.5
1.6
Buy
While M&M continues to face pressure on UV business led by weak

industry demand and higher competitive pressures, growth in tractors
continues to remain strong.
We expect auto volumes to decline 13% YoY (+8% QoQ), while tractor
volumes are expected to grow by 20% YoY (+31% QoQ). Overall
volumes are expected to decline by 3% YoY (+16% QoQ). Sequential
volume growth is driven by seasonal pick-up in festive demand.
Expect M&M (incl. MVML) to report revenue decline of 1% YoY (+17%
QoQ) to INR101.5b.
EBITDA margin (incl. MVML) to improve 90bp QoQ on higher volumes,
better mix (higher tractor share) to 15.4%.
Adjusted PAT estimated at INR10.1b (+11% YoY, flat YoY).

Update on post festive retail demand environment for auto and
tractor division; plant and channel inventory.
Considering competitive launches in FY15/FY16 guidance on auto
volumes and margins.
Guidance for 4QFY14/FY15 tractor volumes (current guidance of 1618% for FY14 industry growth).
Update on Ssangyong business and financial performance.
Quarterly Performance (incl. MVML)
(INR Million)
Y/E March
Total Volumes (nos)
Growth YoY (%)
Net Realization
Growth YoY (%)
Excise (%)
Net Op. Income
Growth YoY (%)
RM Cost (% of sales)
Staff (% of sales)
Oth. Exp. (% of Sales)
EBITDA
EBITDA Margins (%)
Other income
Interest
Depreciation
PBT
Reported PAT
Adj PAT
Change (%)
E: MOSL Estimates
January 2014
FY13
1Q
182,149
14.4
487,431
14.9
11.9
88,785
31.5
71.5
5.4
9.2
12,350
13.9
662
714
1,800
10,498
25.8
7,785
7,785
25.9
2Q
188,412
10.4
491,082
14.9
13.1
92,526
26.8
71.0
5.5
9.7
12,797
13.8
3,260
741
2,045
13,272
26.3
9,781
9,781
28.4
3Q
209,266
14.2
489,452
9.2
11.8
102,426
24.7
72.0
5.2
9.3
13,795
13.5
758
725
2,054
11,774
22.3
9,149
9,149
35.1
FY14
4Q
195,528
0.1
510,569
9.4
12.6
99,831
9.5
71.1
4.8
9.7
14,352
14.4
1,017
784
2,279
13,211
27.1
9,630
8,970
11.7
1Q
194,962
7.0
497,564
2.1
10.3
97,006
9.3
70.2
5.5
9.9
14,008
14.4
972
759
2,080
12,141
25.1
9,097
9,097
16.9
2Q
175,799
-6.7
492,631
0.3
10.0
86,604
-6.4
68.5
6.2
10.8
12,544
14.5
3,628
892
2,244
13,036
21.2
10,276
10,276
5.1
3QE
203,887
-2.6
498,133
1.8
10.3
101,563
-0.8
69.0
5.6
10.0
15,678
15.4
810
880
2,325
13,283
23.8
10,128
10,128
10.7
FY13
4QE
177,715
-9.1
493,887
-3.3
10.7
87,771
-12.1
69.0
5.9
10.1
12,780
14.6
916
881
2,448
10,368
22.2
8,071
8,071
-10.0
FY14E
775,358 752,363
10.0
-3.0
494,696 495,697
11.1
0.2
12.3
10.3
383,566 372,944
22.2
-2.8
71.4
69.2
5.2
5.8
9.5
10.3
53,293 55,010
13.9
14.8
5,697
6,327
2,964
3,411
8,178
9,097
48,754 48,828
25.5
23.1
36,344 37,572
36,344 37,572
24.8
3.4
C11
Maruti Suzuki India

Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
MSIL IN
302.1
536 / 9
1,830 / 1,217
3 / 4 / 10
CMP: INR1,775

Y/E March
2013 2014E 2015E
Sales
435.9 434.3 498.5
EBITDA
42.3 52.7 63.7
Adj. PAT
23.9 28.7 35.4
Con.adj.EPS(INR) 80.2 96.4 117.3
EPS Growth (%) 37.8 20.2 21.7
BV/Share (INR) 615.0 697.2 800.5
RoE (%)
12.9 13.6 14.7
RoCE (%)
15.5 17.4 18.6
Payout (%)
10.1 11.6 10.2
Valuations
P/E (x)
22.1 18.4 15.1
P/CE (x)
12.5 10.8
9.0
EV/EBITDA (x)
11.2
8.7
6.8
Div. Yield (%)
0.5
0.6
0.7
2016E
577.3
77.9
44.4
146.9
25.2
933.5
15.7
20.0
8.2
12.1
7.4
5.0
0.7
Buy
Our quarterly estimates for 3QFY14E are including SPIL merger. Hence,
YoY performance is strictly not comparable.
Expect volumes to decline 5.2% YoY (+3.7% QoQ) led by continued
weakness in consumer sentiments and consequent pressure on PV
industry demand. Sequential growth is driven by seasonal pick-up in
festive demand.
Realizations to improve 2.1% YoY (+0.2% QoQ). Increase in realizations
is driven by price hike effective Oct-13 of ~0.7-0.8%, partially offset by
higher discounts.
Expect margins to decline 110bp QoQ (+360bp YoY) driven by adverse
JPY/INR movement in 2Q (impact on vendors import with a quarter
lag).
While our FY14E EPS remains unchanged, we upgrade FY15E EPS by
8.6%, largely driven by margin increase on favorable JPY/INR rates.

Update on demand scenario, post festive season, channel inventory,
discounting trends and new launches.
Guidance on FY14 volume growth, margins, forex hedges, localization
efforts.
Y/E March
1Q
2Q
Total Volumes (nos)
295,899 230,376
Change (%)
5.1
-8.7
Realizations (INR/car)
355,839 350,302
Change (%)
21.3
19.5
Net Op. Revenues
107,782
83,054
Change (%)
27.5
8.2
RM Cost (% of Sales)
77.8
79.6
Staff Cost (% of Sales)
2.1
2.7
Other exp. (% of Sales)
12.8
11.6
EBITDA
7,864
5,086
EBITDA Margins (%)
7.3
6.1
Non-Operating Income
1,123
1,563
Interest
332
380
Depreciation
3,399
3,470
PBT
5,256
2,798
Tax
1,018
524
19.4
18.7
PAT
4,239
2,275
Adjusted PAT
4,239
2,275
Change (%)
-22.8
-5.4
E:MOSL Estimates; * Including SPIL Merger
January 2014
(INR Million)
FY13
3Q
301,453
25.9
363,471
15.7
112,003
44.9
78.4
2.2
11.5
8,913
8.0
1,886
459
3,583
6,756
1,743
25.8
5,013
5,013
143.8
FY14
4Q*
343,756
-4.6
379,812
19.1
133,040
13.4
65.6
2.9
16.4
19,996
15.0
3,990
726
8,159
15,101
2,705
17.9
12,396
12,396
93.7
1Q
266,434
-10.0
375,144
5.4
102,373
-5.0
71.9
2.9
13.8
11,662
11.4
2,043
442
4,802
8,461
2,145
25.3
6,316
6,316
49.0
2Q
275,586
19.6
370,550
5.8
104,681
26.0
69.4
3.6
14.4
13,214
12.6
1,010
434
4,992
8,799
2,097
23.8
6,702
6,702
194.7
3QE
285,727
-5.2
371,228
2.1
108,670
-3.0
70.9
3.3
14.3
12,542
11.5
2,000
475
5,300
8,767
2,157
24.6
6,611
6,611
31.9
FY13
FY14E
4QE
314,489 1,171,484 1,142,236
-8.5
3.3
-2.5
369,153 363,749 371,407
-2.8
18.8
2.1
118,614 435,879 434,338
-10.8
22.5
266.2
70.6
74.7
70.7
3.1
2.5
3.2
13.5
13.1
14.0
15,279
42,296
52,697
12.9
9.7
12.1
2,847
8,124
7,900
477
1,898
1,829
5,600
18,612
20,693
12,048
29,910
38,075
2,969
5,989
9,367
24.6
20.0
24.6
9,080
23,921
28,709
9,080
23,921
28,709
-26.8
46.3
216.2
C12
Tata Motors
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
TTMT IN
3,218.9
1,195 / 19
405 / 252
-11 / 25 / 10

Y/E March
Net Sales
EBITDA
NP
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2013 2014E 2015E

1,888 2,331 2,720
266
377
421
103
146
157
32.1 45.3 48.7
(17.7) 41.2
7.6
118.0 158.9 205.8
29.4 32.9 26.7
23.4 27.2 24.8
7.2
5.2
7.2
11.6
3.1
5.4
0.5
8.2
2.3
3.6
0.5
2016E
3,252
500
192
59.7
22.4
263.7
25.4
25.3
5.8
7.6
1.8
3.2
0.8
6.2
1.4
2.5
0.8
CMP: INR371
Buy
JLR volumes expected to grow 18.5% YoY (+10.2% QoQ) driven by strong
growth in both Jaguar and Land Rover (LR) brand. Jaguar volumes to
rise 33% YoY, while LR volumes to increase 15.8% YoY.
EBITDA margin to improve 220bp YoY (decline 70bp QoQ) on higher
volumes and stronger mix (higher Range Rover/Sport).
Standalone volumes to decline 33% YoY (-10% QoQ) led by 32%/36%
YoY decline in CVs/PVs respectively. Within CVs, MHCVs expected to
report a decline of 26% (despite a lower base), while LCVs to decline
by 34%. Standalone margins to remain weak at 1.5% (-50bp QoQ, 70bp YoY) on lower volumes and higher discounting pressures.
Expect 31% YoY (+6% QoQ) rise in consolidated sales. Consolidated
margins to decline 70bp QoQ (+220bp YoY). Expect consolidated PAT
to rise 89% YoY (-13% QoQ) to INR32.7b led by strong JLR performance,
translation gains, partially offset by higher standalone loss.
We upgrade FY14E/15E consolidated EPS by 3.3%/4.5% led by upgrades
in JLR, partially offset by higher losses in S/A.
Current JLR demand trends and outlook for 4QFY14/FY15, particularly
China and the US.
Order book for new Range Rover and Range Rover Sport and their
ramp-up schedule. Update on forex hedges (JLR operations).
Volume guidance for MHCVs and PVs, inventory levels, discounts.
Quarterly Performance (Consolidated)
(INR Million)
Y/E March
JLR volumes
Growth YoY (%)
JLR EBITDA Margins (%)
S/A volumes
Growth YoY (%)
S/A EBITDA Margins (%)
Total Op. Income
Growth (%)
EBITDA
EBITDA Margins (%)
Depreciation
Other Income
Interest Expenses
PBT before EO Exp
EO Exp/(Inc)
PBT after EO Exp
Tax rate (%)
PAT
Minority Interest
Share in profit of Associate
Adj PAT
Growth (%)
E: MOSL Estimates
January 2014
FY13
1Q
83,452
34.5
14.5
190,783
-3.5
7.3
433,236
30.1
57,548
13.3
15,659
2,386
8,044
36,232
4,405
31,826
27.3
23,138
-276
-414
25,651
25.2
2Q
77,442
13.9
14.8
223,665
5.8
5.9
434,029
19.9
53,336
12.3
15,944
2,068
8,474
30,987
101
30,886
32.0
21,010
-230
-32
20,816
(7.3)
3Q
94,828
9.9
14.0
203,852
-11.9
2.2
460,895
1.8
56,573
12.3
20,700
1,886
9,344
28,416
1,735
26,681
38.7
16,362
-152
67
17,341
(50.9)
FY14
4Q
116,345
18.6
16.9
196,370
-31.3
3.6
560,016
10.0
78,015
13.9
23,391
1,775
9,670
46,729
-215
46,943
18.8
38,116
-178
1,517
39,280
-11.5
1Q
90,620
8.6
16.5
153,172
-19.7
2.3
467,847
8.0
62,192
13.3
23,477
1,823
9,482
31,056
1,786
29,270
39.8
17,628
-198
-169
18,337
-28.5
2Q
101,931
31.6
17.8
151,466
-32.3
2.0
568,823
31.1
86,351
15.2
27,293
2,321
11,117
50,262
2,738
47,524
25.1
35,590
-106
-65
37,469
80.0
3QE
112,360
18.5
17.3
136,501
-33.0
1.5
604,100
31.1
87,594
14.5
31,000
1,500
11,000
47,094
0
47,094
30.0
32,966
-175
-100
32,691
88.5
FY13
FY14E
4QE
129,979 372,067 434,890
11.7
18.3
16.9
18.1
15.2
17.5
143,267 809,503 584,406
-27.0
-12.3
-27.8
1.6
4.8
1.9
690,674 1,888,176 2,331,443
23.3
14.0
23.5
118,307 245,473 354,445
17.1
13.0
15.2
36,793
75,693 118,562
2,590
8,115
8,234
11,328
35,533
42,928
72,777 142,362 201,190
0
6,027
4,525
72,777 136,335 196,665
21.2
27.7
27.0
57,354
98,625 143,538
-256
-837
-735
100
1,138
-234
57,198 103,286 145,871
45.6
-17.7
41.2
C13
TVS Motor
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
TVSL IN
475.1
33 / 1
70 / 28
25 / 103 / 52

Y/E March
Sales
EBITDA
Adj. PAT
EPS (INR)
EPS Gr. (%)
BV/Sh (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2013 2014E 2015E

70.7 78.5 93.3
4.1
4.6
5.9
1.8
2.5
3.6
3.8
5.3
7.5
-27.3 39.9 40.4
25.8 29.8 35.0
15.1 19.2 23.1
15.7 19.3 24.3
56.5 30.2 31.3
18.0
2.7
9.5
1.7
12.9
2.3
8.0
2.2
2016E
106.9
7.1
4.5
9.4
25.9
41.5
24.6
26.9
31.0
9.2
2.0
5.8
2.9
7.3
1.7
4.4
3.6
CMP: INR69
Buy
Expect TVS Motor's (TVSL) 3QFY14E volumes to decline 2.4% YoY (flat
QoQ) to 505,913 units. Decline in volumes have been largely driven by
Mopeds due to weak demand in southern region, while scooters have
grown by 5% YoY and motorcycles have declined marginally by 1% YoY.
Margins are expected to remain flat YoY at 5.9% (flat QoQ as well).
Recently launched Jupiter scooter have received strong response from

customers and currently is under wait list. Production ramp-up of
scooters, recovery in southern region coupled with upcoming re-launch
of Victor motorcycle (executive motorcycle segment) would drive
volume growth.

Update on retail demand, post festive season, and channel inventory.
Update on new launches together with timelines.
(INR Million)
Y/E March
Volumes (units)
Growth (%)
Growth (%)
Net Sales
Growth (%)
RM (%)
Emp cost (%)
Other exp (%)
EBITDA
EBITDA margin (%)
Interest
Depreciation
Other Income
PBT before EO Exp
EO Exp
PBT after EO Exp
Tax rate (%)
Reported PAT
Adjusted PAT
E: MOSL Estimates
January 2014
FY13
1Q
519,160
(3.2)
35,623
9.4
18,494
5.9
73.6
5.5
15.1
1,075
5.8
155
310
51
661
0
661
22.7
511
511
2Q
485,999
(19.6)
35,234
6.9
17,124
(14.0)
72.8
6.3
15.0
1,011
5.9
152
320
43
582
0
582
22.3
452
452
3Q
518,496
(2.1)
34,701
3.5
17,992
1.3
72.0
5.8
16.3
1,067
5.9
118
328
49
670
-8
678
21.5
532
526
FY14
4Q
509,210
(4.1)
34,334
11.4
17,483
6.8
71.0
5.3
18.3
938
5.4
56
347
96
631
916
-285
-17.6
-335
743
1Q
494,494
(4.8)
35,596
(0.1)
17,602
(4.8)
71.1
6.4
16.8
989
5.6
65
314
81
691
0
691
24.9
519
519
2Q
506,617
4.2
39,248
11.4
19,884
16.1
71.2
5.9
17.0
1,171
5.9
52
314
77
882
-303
1185
25.0
888
661
3QE
505,913
(2.4)
39,248
13.1
19,856
10.4
70.6
6.0
17.5
1,163
5.9
40
325
70
868
0
868
25.0
651
651
FY13
FY14E
4QE
607,356 2,032,865 2,114,380
19.3
(7.6)
4.0
39,248
34,972
37,138
14.3
7.7
6.2
21,182
71,093
78,524
21.2
(0.6)
10.5
71.7
72.4
71.2
5.7
5.7
6.0
16.7
16.1
17.0
1,271
4,090
4,594
6.0
6.0
5.8
40
480
198
338
1,304
1,291
43
238
271
935
2,544
3,375
908
-303
935
1,636
3,678
25.1
29.1
25.0
701
1,160
2,759
701
1,804
2,532
C14
December 2013 Results Preview | Sector: Capital Goods
Capital Goods
Companies Covered
PMG facilitates mandatory clearancesawait execution: 1QFY14 saw the intervention

of India's Prime Minister to facilitate speedier execution of projects, which resulted
in the creation of a special cell, Project Monitoring Group (PMG), to address the
bottlenecks in stalled projects on a fast track basis. In 2QFY14, PMG facilitated to get
environmental clearances for projects worth INR202.8b. Other notable achievements
would include facilitating the fuel supply agreement (FSA) for 15.4gw of power plants,
which involved an investment of INR944b. However, we await more clarity on the
execution status of these projects as several industry experts maintain that a
meaningful improvement in large infrastructural capex is expected only post the
outcome of 2014 general elections.
ABB
BHEL
Crompton Greaves
Cummins India
Havells India
Larsen & Toubro
Siemens
UMPPs get encouraging response despite constrained environment: Power Finance

Corporation (PFC) has shortlisted nine applicants for the Orissa UMPP and eight for
Cheyyur UMPP, who have cleared technical bids by the apex evaluation committee.
Among the pre-qualified applicants who were asked to submit financial bids are NTPC,
Tata Power, NHPC, Adani Power, JSW Energy, Jindal Power, Sterlite Infraventures, CLP
India and L&T. Response from the bidders seems encouraging considering the current
scenario in power sector. Cumulative investment across both projects is expected to
be ~INR500b. Financial bids by the pre-qualified players are expected to be submitted
by the approved applicants as PFC intends to award these projects in 1QFY15.
Thermax
BTG ordering to emerge from "eclipse": We expect capex for power generation to
commence in the next 12-15 months. Currently, 90gw of power capacity is under
execution, which is expected to be commissioned, of which 60% capacity is from
private sector players facing funding constraints. PLF improvement from central sector
plants to 80% and 70% in case of private sector plants. Resulting in 11.9% CAGR of coalbased generation till FY19 when juxtaposed with aggregate demand of 997 Bus, the
supply CGAR stands at 8.8%. We believe L&T and TMX would be the major beneficiaries
of the power generation capex once it begins, while BHEL is best-positioned as cyclical
factors support recovery.
ABB
BHEL
Crompton Greaves
Cummins India
Havells India
Larsen & Toubro
Siemens
Thermax
Sector Aggregate
CMP
(INR)
27.12.13
689
173
130
469
802
1,078
663
696
(INR Million)
Rating
Dec.13
UR
Buy
Buy
Buy
Neutral
Buy
Neutral
Buy
21,835
83,979
33,472
9,775
11,850
168,315
24,075
11,059
364,359
Sales
Var.
% YoY
4.9
-16.4
12.6
-10.3
12.0
9.1
-3.6
5.6
0.6
Var.
% QoQ
22.3
-4.8
4.4
4.8
0.9
16.0
-26.1
6.0
4.9
Dec.13
1,502
8,914
1,598
1,681
1,619
16,831
739
1,061
33,945
EBITDA
Var.
% YoY
125.5
-45.4
88.0
-19.4
15.8
6.1
-59.9
-5.2
-15.5
Var.
% QoQ
42.5
47.8
-0.9
10.1
-4.2
12.1
-61.2
13.3
14.0
Net Profit
Dec.13
Var.
% YoY
567
238.3
5,240
-55.7
617
314.8
1,374
-24.4
1,197
22.7
10,708
3.0
110
-82.7
751
-1.6
20,564
-23.0
Var.
% QoQ
59.2
-11.2
5.6
-5.1
-4.4
2.2
-89.8
27.0
-5.1
Satyam Agarwal (AgarwalS@MotilalOswal.com) / Nirav Vasa (Nirav.Vasa@MotilalOswal.com)

January 2014
C15
Maintain Neutral rating on the sector: For 3QFY14E, we expect revenue growth of just
0.6% on a YoY basis. We expect order inflows for 3QFY14E to be muted considering the
constrained environment, with maximum order inflows from short cycle orders. Projects
which received mandatory clearances can be expected to be invited on EoI/bids from
vendors. However, more clarity on the same is awaited due to strong headwinds. L&T's
focus continues to be on order inflows from GCC to meet its targeted order inflow of
INR1t, representing a growth of 20% on a YoY basis. Increasing debtors continue to be
the major concern for BHEL (2QFY14 debtors of ~INR400b, which includes retention
money of INR220b). Thus, await more clarity on the legal notices sent by BHEL to its
customers. Thermax is expected to report muted order inflow from its domestic
customers and has guided for an increase in margins only if order inflows pick up. After
revising its revenue guidance for FY14 in 2QFY14, Havells' management also guided for
higher margins for FY15 based on robust demand for its consumer products. Cummins is
expected to gain as the Government has finally decided to implement CPCB-2 norms
with effect from April 2014. Await more clarity on the quantum of pent-up demand
expected in 4QFY14 and its capability to revise prices to comply with CPCB-2 norms. We
remain Neutral on the sector. Our top picks are Larsen & Toubro, Thermax, Cummins and
BHEL.
Expect muted domestic order inflows in 2QFY14, as well
Domestic project execution impacted in constrained environment
January 2014
C16
List of projects issues were resolved through facilitation by Project Monitoring Group (PMG)
No. Name of Project
(PMG SI. No)
Approx.
Investment
(in INR b)
A. Project where Fuel Supply Agreement (FSA) signed for power generation:
1 Maruti Clean Coal and Power Ltd
Chhattisgarh
15
2 Kobra West Power Ltd
Chhattisgarh
39
3 DB Power Ltd
Chhattisgarh
34
4 Jhabua Power Ltd
Chhattisgarh
36
5 Adani Power Maharashtra Ltd
Maharashtra
40
6 GMR Kamalanga Energy Ltd
Odisha
60
7
8
9
10
11
12
13
14
15
16
17
Haldia Energy Ltd

Prayagraj Power Generation Co. Ltd
Raghunathpur TPP (unit - I)
DBC Power Project
Lanco Amarkantak
Corporate Power Ltd
Ideal Energy Projects Ltd
2x300 MW Thermal Power PlantBharat Aluminium Ltd
SKS Power Generation Chhattisgarh Ltd
8 FSA signed for 300 MWs only
2x600 MW Power Plant
*FSA signed for 600 MWs
Jindal India Thermal Power
*FSA singed for 600 MWs
Talwadi Power Ltd
Total
Location
(State)
Approx.
Generating
Capacity (in MWs)
Dateof
Commissioning
of Project
300
600
1,200
600
800
1,050
West Bengal
Uttar Pradesh
West Bengal
34
95
30
600
1,980
600
Chhattisgarh
Jharkhand
Maharashtra
Chhattisgarh
77
47
18
25
1,320
540
270
600
Quarter-2, 2014-15
Quarter-3, 2013-14
Quarter-4, 2013-14
Quarter-1, 2014-15
Commissioned
2 units commissioned,
3rd unit Quarter-3, 2013-14
Quarter-2, 2014-15
Quarter-2, 2014-15
1st unit - Quarter-3, 2013-14,
2nd unit - Quarter-2, 2014-15
Quarter-4, 2014-15
Quarter-3, 2014-15
Commissioned
Quarter-3, 2013-14
Chhattisgarh
68
600
Quarter-3, 2014-15
Chhattisgarh
136
1,200
Quarter-4, 2013-14
Odisha
91
1,200
Quarter-3, 2013-14
Punjab
100
944
1,980
15,440
Quarter-1, 2014-15
Other Projects facilitated for clearance

No. Name of Project
Location
Approx. Investment
(PMG SI. No)
(State)
(INR b)
1 BPCL Project - Integrated Distilition units
Maharashtra
14
2 Ashok Cuttack Angul Tollway Ltd
Odisha
11
3 Salka Road - Anupur Railway Track Doubling
Chhattisgarh
6
4 Lumding - Silchar Gauge Conversion
Assam
43
5 Bhairabi - Sarang New Railway Line
Mizoram
23
6 Supreme Panvel Indapur Tollway
Maharashtra
9
7 BSCPL Aurang Tollway Ltd
Chhattisgarh
12
8 IOCL Project New Marketing Terminal
Odisha
2
9 Nagai Power Pvt Ltd
Tamil Nadu
15
10 Moonidih XV Seam
Jharkhand
1
11 IOCL Project - POL Tap Off Point
Odisha
12
12 Lumding - Silchar (482km) Gauge Conversion
Assam
43
13 Mumbai & Delhi Airports New Terminal
Maharashtra & Delhi
120
14 OCI Iron & Steel Ltd - Integrated Steel
Odisha
12
manufacturing expansion plant
15 Development of Haldia Dock - II (North)
West Bengal
8
16 Development of Haldia Dock - II (South)
West Bengal
9
Total
340
Issues
Resolved
Environmental Clearance
Approval of DPR for Railway siding
Consortium funding apporval
Security Clearance
Source: Media
January 2014
C17
Relative Performance - 3m (%)
Sens ex Index
MOSL Capi tal Goods Index
145
Sens ex Index
MOSL Ca pita l Goods Index
120
105
130
Dec-13
Sep-13
Dec-13
Sep-13
Jun-13
60
Dec-12
85
Nov-13
75
Oct-13
100
Mar-13
90
115
CMP (INR)
27.12.13
Capital Goods
ABB
689
BHEL
173
Crompton Greaves 130
Cummins India
469
Havells India
802
Larsen & Toubro
1,078
Siemens
663
Thermax
696
Sector Aggregate
January 2014
Rating
EPS (INR)
FY13 FY14E FY15E
P/E (x)
FY13 FY14E FY15E
EV/EBITDA (x)
FY13 FY14E FY15E
RoE (%)
FY13 FY14E FY15E
UR
Buy
Buy
Buy
Neutral
Buy
Neutral
Buy
6.5
26.8
3.1
23.8
34.4
53.4
4.8
27.0
106.2
6.5
42.3
19.7
23.3
20.2
139.0
25.8
16.4
31.4
3.9
19.0
15.3
12.8
11.8
44.9
12.9
9.3
5.4
23.5
-1.0
29.7
29.8
16.2
4.2
18.4
17.7
8.2
14.4
5.1
22.3
40.7
43.8
13.1
25.2
11.5
9.6
8.9
25.2
42.1
52.4
13.8
29.5
83.6
12.1
25.6
21.1
19.7
24.6
50.8
27.6
22.1
59.9
18.0
14.5
18.6
19.1
20.6
48.1
23.6
21.8
32.1
7.6
13.4
17.2
13.2
13.6
23.5
16.1
13.2
26.5
9.2
10.0
15.2
11.7
11.9
22.5
13.6
12.6
6.6
11.1
8.7
24.5
28.1
14.5
11.1
15.3
12.1
8.8
7.1
15.1
25.6
24.0
14.4
11.1
16.1
11.3
C18
ABB
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
ABB IN
211.9
146 / 2
737 / 448
5 / 6 / -10

Y/E December
Net Sales
EBITDA
Adj PAT
Adj EPS (INR)
EPS Gr (%)
BV/Sh (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2012 2013E 2014E

75.7 76.9 82.3
3.4
4.7
5.7
1.4
1.7
2.4
6.5
8.2 11.5
-25.5 27.0 39.5
122.6 127.2 133.3
5.4
6.6
8.8
5.7
7.1
8.8
53.8 40.0 40.0
106.2
5.6
44.0
0.5
83.6
5.4
32.1
0.6
59.9
5.2
26.5
0.8
2015E
92.4
6.8
3.4
16.0
39.0
141.9
11.6
10.3
40.0
43.1
4.9
21.8
1.1
CMP: INR689
Under review
ABB inaugurated its new factory set up in Gujarat at a cost of INR2.5b

for manufacturing high voltage switchgear and distribution
transformers. Setting up the factory was in line with company's policy
of "in country for country" approach which lays strong focus on
localization.
The new factory would also be manufacturing GIS systems, post which
ABB could be the first company in India for the same.
For 4QCY13E, we model 5% revenue growth on a YoY basis, EBITDA of
5.9% and PAT of 3%.

Inflow of short cycle orders which supported 5% YoY increase in order
inflows in 3QCY13. Order inflows for 3QCY13 stood at INR17.6b,
supported mainly by order inflows from sectors like renewable, solar,
data centers and exports.
Any major improvement in the performance of projects business,
where margins are being impacted partly by legacy projects and poor
operating leverage, which has suppressed margins.
Quantum of interest cost, which remained at a high level in 3QCY13
at INR270m (v/s INR256m in 1QCY13), mainly due to deterioration of
NWC to 89 days from 71 days.
(INR Million)
Y/E December
Sales
Change (%)
EBITDA
Change (%)
As % of Sales
Adjusted EBITDA (%) *
Depreciation
Interest
Other Income
PBT
Tax
Repoted PAT
Adj. PAT
Change (%)
Order Intake
Order Book
BTB (x)
E: MOSL Estimates; * As reported
January 2014
CY12
1Q
17,903
(0.3)
975
-4.0
5.4
6.2
223
54
19
716
240
33.5
476
476
-20.0
16,320
90,280
1.2
by ABB
2Q
18,838
10.0
1,060
24.0
5.6
4.6
231
77
14
766
250
32.6
516
516
33.2
20,450
91,892
1.2
3Q
18,086
3.7
664
-0.4
3.7
4.3
240
117
10
316
102
32.4
214
214
-3.6
16,790
90,596
1.2
CY13
4Q
20,823
(5.3)
666
-38.4
3.2
5.2
246
185
28
263
96
36.4
168
168
-73.8
15,790
86,720
1.1
1Q
19,700
10.0
1,065
9.2
5.4
6.5
246
198
14
636
210
33.0
426
426
-10.7
15,310
82,290
1.1
2Q
17,512
(7.0)
1,079
1.8
6.2
6.3
260
256
38
601
205
34.2
396
396
-23.3
17,310
82,350
1.1
3Q
17,859
(1.3)
1,054
58.8
5.9
6.2
257
270
9
537
180
33.6
356
356
66.9
17,620
82,520
1.5
4QE
21,835
4.9
1,502
125.5
6.9
334
327
13
854
287
33.6
567
567
238.3
27,444
82,265
1.1
CY12
CY13E
75,650
1.2
3,365
-7.0
4.4
5.1
941
432
71
2,062
688
33.4
1,374
1,374
-25.5
69,660
86,720
1.1
76,906
1.7
4,700
39.7
6.1
1097
1,050
74
2,627
882
33.6
1,745
1,745
27.0
77,684
82,265
C19
BHEL
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
BHEL IN
2,447.6
424 / 7
245 / 100
15 / -6 / -33

Y/E March
2013 2014E 2015E
Net Sales
484.2 395.6 325.8
EBITDA
93.9 47.2 33.7
Adj PAT
65.5 35.1 23.6
EPS (INR)
26.8 14.4
9.6
EPS Gr. (%)
(4.9) (46.4) (32.9)
BV/Sh. (INR)
124.4 133.3 139.6
RoE (%)
23.5 11.1
7.1
RoCE (%)
24.5 11.4
7.3
Payout (%)
20.0 30.0 30.0
Valuations
P/E (x)
6.5 12.1 18.0
P/BV (x)
1.4
1.3
1.2
EV/EBITDA (x)
3.8
7.6
9.2
Div Yield (%)
3.1
2.4
1.7
Consolidated
2016E
358.8
47.6
36.7
15.0
55.6
149.3
10.4
10.7
30.0
11.6
1.2
5.2
2.6
CMP: INR173
Buy
BHEL continues to face maximum revenue de-growth compared to

peers in the industry. For 3QFY14E, we model revenue de-growth of
16% YoY, EBITDA margin of 10.6% v/s 6.4% in 1HFY14 and PAT de-growth
of 56%. Pressure on margins is expected mainly on lower operating
leverage due to slower pace of project execution.
Overall, the pace of order finalization in utility power segment is
expected to be constrained from near to medium term. However, we
expect the cycle of utility power capex to start over the next 12-15
months (discussed in detail in our report titled - BTG ordering: Emerging
from the eclipse).
Order inflow for 1HFY14 was INR44.7b, down 49% YoY, as ordering
activity continues to be dormant. BHEL recently received an order
worth INR10.2b in 3QFY14 from Neyveli Lignite for supply of steam
turbine generator, associated auxiliaries and civil works.
Increase in retention money which stood at INR220b at end-2QFY14.
Media reports also state that BHEL has sent legal notices to recover
INR170b of its dues; management comment on the same.
Guidance given related to implementation of seventh pay
commission and its impact on BHEL's staff cost.
Any new provisions which are to be made post the merger of BHPV.
Management stated that all provisions are already made in 2QFY14.
Insights shared on growth prospects related to industrial businesses
like metro, power transmission, railways and defence.
(INR Million)
Y/E March
Sales (Net)
Change (%)
EBITDA
As a % Sales
Adjusted EBITDA
Change (%)
As a % Sales
Interest
Depreciation
Other Income
PBT
Tax
Reported PAT
Change (%)
Adj. PAT
Change (%)
Order Intake
Order Book (INR b)
BTB (x)
E: MOSL Estimates
January 2014
FY13
1Q
83,262
16.9
12,022
14.4
12,022
41.0
14.2
55
2,284
3,663
13,346
4,137
31.0
9,209
12.9
9,209
12.9
55,900
1,330
2.7
2Q
103,996
1.0
18,995
18.3
18,995
12.0
18.0
259
2,163
1,307
17,880
5,135
28.7
12,745
-9.7
12,745
-0.9
31,530
1,223
2.5
3Q
100,417
-4.8
16,341
16.3
16,341
-12.6
16.0
509
2,200
3,324
16,955
5,139
30.3
11,816
-17.5
11,816
-17.5
19,500
1,137
2.4
4Q
188,502
-2.2
46,512
24.7
46,512
-3.2
24.2
405
2,889
2,924
46,142
13,766
29.8
32,375
-4.2
32,375
-3.6
209,570
1,152
2.4
1Q
63,526
-23.7
3,886
6.1
3,886
-67.7
6.0
278
2,308
5,385
6,685
2,031
30.4
4,654
-49.5
4,654
-49.5
14,690
1,086
2.4
FY14
2Q
3QE
88,190
83,979
-15.2
-16.4
4,119
8,914
4.7
10.6
6,033
8,914
-68.2
-45.4
6.7
10.6
247
302
2,387
2,400
4,979
1,550
6,465
7,763
1,905
2,523
29.5
32.5
4,560
5,240
-64.2
-55.7
5,899
5,240
-53.7
-55.7
30,010
75,000
1,023
1,014
2.3
2.4
4QE
152,031
-19.3
30,297
19.9
30,297
-34.9
19.9
380
2,421
1,651
29,146
9,810
33.7
19,336
-40.3
19,336
-40.3
144,289
1,012
2.6
FY13
FY14E
476,177
0.8
93,894
19.7
93,894
-3.3
19.7
1,253
9,534
11,217
94,324
28,177
29.9
66,148
-6.0
65,537
-4.9
316,500
1,152
2.4
387,725
-18.6
47,216
12.2
47,216
-49.7
12.2
1,206
9,516
13,565
50,058
16,269
32.5
33,789
-48.9
35,129
-46.4
263,989
1,012
2.6
C20
Crompton Greaves
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
CRG IN
629.7
82 / 1
137 / 72
4 / 49 / 5

Y/E March
2013 2014E 2015E
Net Sales
120.9 134.7 144.3
EBITDA
3.8
7.2
9.7
Adj PAT
1.9
3.2
5.6
EPS(INR)
3.1
5.1
8.9
EPS Gr. (%)
(48.4) 65.6 76.1
BV/Sh. (INR)
55.5 58.7 58.3
RoE (%)
(1.0)
8.7 15.1
RoCE (%)
2.8
6.8 11.4
Payout (%)
20.1 20.0 20.0
Valuations
P/E (x)
42.3 25.6 14.5
P/BV (x)
2.0
2.2
2.2
EV/EBITDA (x)
20.7 12.6
9.2
Div Yield (%)
0.9
1.1
1.2
Consolidated
2016E
161.4
12.1
7.3
11.7
30.8
67.8
18.3
14.0
20.0
11.1
1.9
7.2
1.4
CMP: INR130
Buy
Post the restructuring program for its European operations, CG

continues to face growth pangs (discussed in detail in our report titled
- Murphy's Law = Growth Pangs 2.0).
For 3QFY14E, we model standalone revenue growth of 5% on YoY basis,

EBITDA margin of 9% and PAT margin of 6.5%. For subsidiaries, we
expect revenue of euro 184m and EBITDA of 0.9% for 3QFY14E, against
0.2% EBITDA margin in 2QFY14.
Execution of orders in the industrial segment is expected to remain

under pressure due to slower pace of project execution.

Status of Canadian operations and systems business in the US (1H
revenue of USD10-12m), which are being re-organized.
Incremental staff cost savings across the Hungarian plant as customers
start accepting products from the new plant, which operates at 1/6th
the staff cost of Belgium.
Funding pattern for the new factory planned at Baroda for
manufacturing transformers and reactors up to 1,200kv.
Quarterly performance (Consolidated)
(INR Million)
Y/E March
Sales (Net)
Change (%)
EBITDA
Change (%)
Adjusted EBITDA
As of % Sales (Adj)
Depreciation
Interest
Other Income
EO Income/(Exp)
PBT
Tax
Minority interest
Reported PAT
Adjusted PAT
Change (%)
Order Book
Order Intake
BTB (x)
E: MOSL Estimates
January 2014
FY13
1Q
28,111
15.3
1,668
-8.3
1,793
6.4
466
99
192
0
1,294
445
34.4
-9.6
859
984
23.8
91,720
27,170
0.8
2Q
29,242
8.1
1,365
-39.6
1,490
5.1
544
190
208
0
838
414
49.4
4.2
420
545
(53.3)
94,000
25,750
1.0
3Q
29,718
-1.9
20
-98.9
850
2.9
566
213
304
1,207
-1,662
228
-13.7
-1.4
-1,888
149
(80.7)
92,320
22,570
0.8
4Q
33,873
10.1
779
-63.4
779
2.3
453
208
51
0
169
-78
-45.9
-5.7
253
253
(74.8)
91,250
29,830
1.0
1Q
31,572
12.3
1,448
-13.2
1,448
4.6
527
201
353
0
1,072
464
43.3
7.5
601
601
(38.9)
97,700
24,410
0.8
FY14
2Q
3QE
32,049
33,472
9.6
12.6
1,613
1,598
18.2
1,613
1,598
5.0
4.8
662
655
193
225
326
335
0
0
1,083
1,053
506
446
46.7
42.4
-6.4
-10.0
584
617
584
617
7.1
314.8
97,430
99,958
22,500
29,000
1.0
0.8
4QE
37,633
11.1
2,582
231.4
2,582
6.9
659
238
196
0
1,882
523
27.8
-31.1
1,390
1,390
450.0
102,325
33,000
0.8
FY13
FY14E
120,944
77.0
3,832
-48.6
4,912
4.1
2,029
709
754
1,207
640
1,009
157.5
-7.3
-361
1,926
(51.5)
91,250
105,450
0.8
134,726
11.4
7,241
89.0
7,241
5.4
2,503
858
1,210
0
5,090
1,939
38.1
-40.0
3,191
3,191
65.7
102,325
33,000
0.8
C21
Cummins India
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
KKC IN
277.2
130 / 2
550 / 365
8 / -7 / -18

Y/E March
Net Sales
EBITDA
Adj PAT
EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div Yield (%)
2013 2014E 2015E

45.9 41.2 45.1
8.3
7.0
7.9
6.6
6.2
7.0
23.8 22.3 25.2
20.1 (6.6) 13.0
87.3 94.3 102.5
29.7 24.5 25.6
29.8 24.7 25.7
58.9 68.3 67.4
19.7
5.4
14.8
2.5
21.1
5.0
17.3
2.8
2016E
52.4
9.5
8.3
29.9
18.7
113.7
27.6
27.8
62.7
18.6
4.6
15.2
3.1
15.7
4.1
12.4
3.4
CMP: INR469
Buy
Government has mandated implementation of CPCB-2 for diesel

gensets till 800kw with effect from April 2014. We expect Cummins to
be a key beneficiary as its products are already certified by certification
agencies, according to our channel checks.
Company's focus on domestic manufacturing will also help to compete
with peers, which are still in the process of setting up their own
manufacturing units in India.
Due to the constrained environment, we model 15% de-growth in
domestic revenue and 2% YoY growth in export revenue.
Pig iron prices increased by 3% QoQ in 3QFY14, which are expected to
be passed on to the final consumer via price hikes.
Guidance given by the management on volume growth expected from
pent up demand before the revised norms are expected to be
implemented in 4QFY14. We model 31% QoQ growth in powergen
business in 4QFY14E.
Quantum of increase in business volume from reconditioning and
refurbishment business once the CPCB-2 norms are implemented
due to pricing differential.
Any change in the royalty paid to Cummins Inc for getting access to
CPCB-2 compliant technology.
Any major change in guidance for FY14, which was revised to 15%
decline for domestic business (revenue declined 14% in 1HFY14) and
10% decline for exports (revenue declined 17% in 1HFY14).
Quarterly Performance (Standalone)
(INR Million)
Y/E March
Sales
Change (%)
EBITDA
Change (%)
As of % Sales
Depreciation
Interest
Other Income
Extra-ordinary Items
PBT
Tax
Reported PAT
Change (%)
Adjusted PAT
Change (%)
Operational Details
Domestic Sales
Change (%)
Exports
Change (%)
E: MOSL Estimates
January 2014
FY13
1Q
12,588
21.8
2,325
33.7
18.5
114
14
385
0
2,583
777
30.1
1,806
1.9
1,806
32.7
2Q
10,869
-0.3
1,999
13.6
18.4
117
13
338
0
2,207
598
27.1
1,609
25.2
1,609
25.2
3Q
10,895
13.2
2,086
29.4
19.1
118
9
661
475
3,096
755
24.4
2,341
66.1
1,817
28.9
4Q
11,543
10.9
1,939
-0.5
16.8
124
11
824
0
2,628
742
28.2
1,886
30.4
1,494
3.3
1Q
10,493
-16.6
1,756
-24.5
16.7
117
12
668
0
2,294
632
27.6
1,662
-8.0
1,662
(8.0)
8,210
10.1
4,210
52.4
7,650
(0.5)
3,030
0.7
8,223
21.3
2,490
(5.9)
8,320
20.2
2,960
(10.0)
7,550
(8.0)
2,737
(35.0)
FY14
2Q
3QE
9,327
9,775
-14.2
-10.3
1,526
1,681
-23.6
-19.4
16.4
17.2
131
140
9
15
558
300
0
0
1,944
1,826
496
452
25.5
24.8
1,448
1,374
-10.0
-41.3
1,448
1,374
(10.0)
(24.4)
6,118
(20.0)
3,020
(0.3)
7,025
(14.6)
2,550
2.4
FY13
FY14E
4QE
11,624
0.7
1,995
2.9
17.2
176
24
424
0
2,219
532
24.0
1,687
-10.5
1,687
13.0
45,894
11.5
8,349
19.7
18.2
473
46
2,067
616
10,513
2,872
27.3
7,641
29.2
6,606
20.1
41,219
-10.2
6,958
-16.7
16.9
565
60
1,950
0
8,283
2,112
25.5
6,171
(19.2)
6,171
(6.6)
7,610
(8.5)
3,726
25.9
32,400
12.5
12,690
8.3
-1,769
(12.7)
12,056
(5.0)
C22
Havells India
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
HAVL IN
124.8
100 / 2
817 / 557
3 / 0 / 18

Y/E March
Net Sales
EBITDA
Adj PAT
Adj EPS (INR)
EPS Gr. (%)
BV/Share (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div Yield (%)
Consolidated
2013 2014E 2015E

72.5 82.0 87.6
6.7
7.9
8.7
4.3
5.1
5.2
34.4 40.7 42.1
1.0 18.3
3.3
115.6 144.8 175.2
29.8 28.1 24.0
21.4 21.4 19.5
28.3 26.4 27.8
23.3
6.9
11.9
0.9
19.7
5.5
13.2
1.1
19.1
4.6
11.7
1.2
2016E
95.3
9.9
6.1
48.9
16.3
210.0
23.3
20.0
28.7
16.4
3.8
9.8
1.5
CMP: INR802
Buy
Management continues to revise its guidance on the positive side.

After revising its revenue guidance for FY14 in 2QFY14, Mr Anil Rai
Gupta, Joint MD, recently stated in the media that, "our companylevel net profit margins had slowed down to 10 odd per cent. We
expect them to increase to 13-13.5% by next year." Increase in margins
was supported mainly on management's expectation of revival in
consumer business, which accounts for 75% of its total revenue.
For Sylvania, Mr Gupta guided for an EBITDA of 5-6%, despite a
challenging environment in Europe. Sylvania's EBITDA margin for
2QFY14 was at 2.9% due to muted operational performance in Europe,
leading to EBITDA of just 1.7%, while EBITDA for Latam region was at
6.2%.
Our interactions with Havells' dealers/distributors support
management's revised guidance of 12% growth for its standalone
business. Major dealers were confident of achieving 10% volume
growth, while remaining 2-3% growth is expected to come from price
hikes undertaken by Havells in September 2013.
We model 13% YoY revenue growth for FY14E, EBITDA margin of 9.6%
and PAT margin of 6.2%.

Growth rates reported in Cables & Wire segment in 3QFY14, which
reported a growth of 52% YoY in 2QFY14, supported mainly by the
base effect.
Improvement in Sylvania's margins across its European business under
the constrained environment and its capability to maintain margins
in Latam business.
Quantum of increase in revenue from Reo switches targeted mainly
for Tier II and III cities.
(INR Million)
Y/E March
Sales
Change (%)
Adj EBITDA
Change (%)
Adj EBITDA margin (%)
Depreciation
Interest
Other Income
PBT
Tax
Reported PAT
Change (%)
Adj PAT
Change (%)
E: MOSL Estimates
January 2014
FY13
1Q
10,328
25.4
1,281
44.1
12.4
118
102
28
1,004
204
20.3
800
23.5
880
55.5
2Q
9,642
13.4
1,192
9.5
12.4
159
99
20
1,054
185
17.5
870
23.8
789
6.5
3Q
10,584
17.8
1,399
15.2
13.2
146
58
15
1,173
227
19.3
947
20.0
976
17.6
4Q
11,696
11.7
1,460
2.1
12.5
156
26
34
1,342
243
18.1
1,099
20.0
1,075
5.3
1Q
10,513
1.8
1,411
10.1
13.4
156
56
32
1,154
207
18.0
947
18.3
1,029
16.9
FY14
2Q
3QE
11,740
11,850
21.8
12.0
1,690
1,619
41.8
15.8
14.4
13.7
159
163
61
25
78
75
1,554
1,506
296
309
19.1
20.5
1,257
1,197
44.6
26.5
1,253
1,197
58.9
22.7
4QE
12,675
8.4
1,618
10.8
12.8
169
33
65
1,481
270
18.2
1,211
10.3
1,211
12.6
FY13
FY14E
42,250
16.9
5,331
17.0
12.6
579
286
96
4,571
858
18.8
3,713
21.3
3,720
21.8
46,778
10.7
6,338
18.9
13.5
647
175
250
5,694
1,082
19.0
4,612
24.2
4,691
26.1
C23
Larsen & Toubro

Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
LT IN
923.1
995 / 16
1,152 / 678
3 / 7 / -10

Y/E March
2013 2014E 2015E
Sales
614.7 664.8 745.5
EBITDA
63.9 67.6 76.3
Adj PAT *
49.3 40.4 48.3
EPS (INR)*
53.4 43.8 52.4
EPS Gr. (%)
2.8 -18.1 19.6
BV/Sh (INR)
315.7 351.4 392.8
RoE (%)
16.2 14.5 14.4
RoCE (%)
14.4 12.4 12.5
Payout (%)
24.9 27.7 26.9
Valuations
P/E (x)*
18.3 24.6 20.6
P/BV (x)
3.1
3.1
2.7
EV/EBITDA (x)
14.4 15.5 13.8
Div Yield (%)
1.3
1.2
1.3
* Consolidated
2016E
833.7
88.2
59.4
64.3
22.9
440.4
14.8
12.9
26.9
16.7
2.4
11.6
1.5
CMP: INR1,078
Buy
Order inflows disclosed by L&T through press releases are of INR117.1b

(we model an order inflow of INR200b for 3QFY14E), which includes
major export orders worth INR54.4b (order for offshore services from
Qatar for six specialized vehicles worth INR9.6b and an order from
Oman Electricity Transmission Company worth INR29b for EPC work
related to grid stations).
For 3QFY14E, we expect revenue to grow by 9% YoY, with EBITDA margin
of 10% and PAT of 6.4%.

Impact of hiving off its hydrocarbon business into a separate
subsidiary on its balance sheet for which court approval was recently
received.
Execution challanges particularly in domestic market given tight
liquidity conditions & poor demand envioronment.
Commentary/updates given by the management related to possible
listing of its subsidiary IDPL on global stock exchanges.
Any major increase in provisions due to constrained pace of project
execution across multiple segments.
Any major impact seen/expected on order inflows, as several projects
have received mandatory clearances from government authorities.
(INR Million)
Y/E March
Net Sales
Change (%)
EBITDA
Change (%)
Margin (%)
Adjusted EBIDTA
Change (%)
Adjusted Margin (%)
Depreciation
Interest
Other Income
Extraordinary Inc/(Exp)
Reported PBT
Tax
Reported PAT
Adjusted PAT
Change (%)
Adj PAT (excl Subs Dividend)
Change (%)
Order Intake (INR b)
Order Book (INR b)
BTB (x)
E: MOSL Estimates
January 2014
FY13
1Q
119,554
26.1
10,847
-3.7
9.1
12,447
10.5
10.4
1,919
2,284
6,081
-383
12,341
3,705
30.0
8,636
10,025
34.4
7,105
2.9
196
1,531
2.8
2Q
131,952
17.4
14,054
15.5
10.7
14,054
15.5
10.7
2,040
2,350
3,294
2,672
15,630
4,257
27.2
11,373
9,151
14.6
8,521
20.1
210
1,585
2.8
3Q
154,294
10.3
14,620
6.9
9.5
15,870
1.2
10.3
2,004
2,380
5,431
0
15,668
4,450
28.4
11,218
10,393
-7.8
9,463
4.1
195
1,623
2.7
4Q
202,938
9.9
24,509
-1.5
12.1
25,759
-4.2
12.1
2,222
2,810
3,744
187
23,408
5,528
23.6
17,880
17,758
-1.5
16,398
-6.4
279
1,536
2.5
1Q
125,551
5.0
10,715
-1.2
8.5
11,795
-5.2
9.4
2,103
2,453
4,726
0
10,885
3,325
30.5
7,560
8,316
-17.0
6,116
-13.9
252
1,654
2.7
FY14
2Q
3QE
145,095 168,315
10.0
9.1
14,017
16,831
-0.3
15.1
9.7
10.0
15,017
16,831
6.9
6.1
10.3
10.0
2,164
2,250
2,428
3,000
4,494
3,500
0
0
13,920
15,081
4,145
4,374
29.8
29.0
9,775
10,708
10,475
10,708
14.5
3.0
8,185
9,958
-3.9
5.2
265
200
1,760
1,790
2.8
2.8
4QE
219,368
8.1
26,017
6.2
11.9
26,017
1.0
11.9
2,273
3,620
3,723
0
23,847
6,337
26.6
17,510
17,510
-1.4
17,250
5.2
174
1,744
2.6
FY13
FY14E
608,733
14.5
64,071
2.0
10.5
66,071
1.9
11.0
8,185
9,824
18,509
2,475
67,046
17,940
26.8
49,106
47,327
5.6
41,477
1.8
880
1,536
2.5
658,329
8.1
67,580
5.5
10.3
69,660
5.4
10.6
8,789
11,500
16,443
0
63,734
18,164
28.5
45,570
47,026
-0.6
41,526
0.1
891
1,744
2.6
C24
Siemens
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
SIEM IN
352.0
234 / 4
695 / 414
8 / 13 / -10

Y/E September
Net Sales
EBITDA
Adj PAT
Adj EPS (INR)
EPS Gr (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2013
113.5
4.2
1.7
4.8
-67.7
114.5
4.2
5.1
124.0
136.2
5.8
51.9
0.8
2014E 2015E
112.8 120.5
9.2
9.7
4.6
4.9
13.1 13.8
173.6
5.6
121.1 128.0
11.1 11.1
12.8 12.7
49.7 49.7
50.8
5.5
23.0
0.8
48.1
5.2
22.1
0.9
2016E
138.5
15.2
7.9
22.5
63.4
139.3
16.8
18.9
49.7
29.5
4.8
14.0
1.4
CMP: INR663
Neutral
4QFY13 numbers included several extraordinary items like a) transfer

of postal & logistics technologies, b) CENVAT credit of INR166m, c)
employee separation costs of INR433m and d) impairment loss of
INR355m. For 1QFY14E, we model 4% revenue de-growth, with EBITDA
margin of 3.1% and 83% YoY decline in PAT at INR110m.
Media reports state that Siemens intends to sell 12 residential
properties in Mumbai, with an intention to optimize its asset portfolio.
Impact of the same is expected to result in extraordinary items in the
forthcoming quarters.
Siemens India reported negative earnings for the first time in FY13
due to lower demand and volatile currency.
Consortium of Siemens and Alstom is among the four qualified bidders
for electrical and signaling work for the 343km Bhaupur- Khurha section
of the Eastern Dedicated Freight Corridor. Civil work contract for the
same has been awarded to Tata-Aldisa JV for a consideration of INR33b.

Any major increase in revenue from services, which accounted for
7% of FY13 revenue and increased 43% YoY.
Capability to maintain order inflows in a constrained environment.
4QFY13 order inflows of INR35.4b, up 22% YoY and 35% QoQ.
NWC which stood at 49 days at end-4QFY14 v/s 67 days at end-March
2013 on management's cautious approach.

Y/E September
(INR Million)
FY13
1Q
2Q
3Q
Total Revenues
24,962
29,556
26,420
Change (%)
-0.2
-26.4
-12.5
EBITDA
1,556
754
276
As % of Revenues
6.2
2.6
1.0
Operational EBIDTA
1,841
1,654
1,630
As % of Revenues
7.4
5.6
6.2
Depreciation
588
610
626
Interest Income
-87
-84
-39
Other Income
69
125
26
0
0
338
PBT
951
185
-701
Tax
314
-115
-213
33.0
-62.3
30.4
Reported PAT
636
300
-488
Adjusted PAT
636
300
-218
Change (%)
5.8
-91.1
-141.1
Order Intake (INR b)
20
28
26
Order Book (INR b)
132
130
130
BTB (x)
1.0
1.1
1.2
E: MOSL Estimates; Adj EBITDA: Adjusted for change in project
January 2014
FY14E
4Q
1Q
2Q
32,589
24,075
30,057
-3.4
-3.6
1.7
1,753
739
2,266
5.4
3.1
7.5
1,905
739
2,266
5.8
3.1
7.5
678
680
685
21
-60
-60
134
165
200
-523
0
0
1,752
164
1,721
260
54
568
14.9
33.0
33.0
1,492
110
1,153
1,073
110
1,153
162.2
-82.7
284.3
35
27
34
133
136
140
1.2
1.2
1.3
revenues and cost estimates
3Q
25,756
-2.5
1,541
6.0
1,541
6.0
690
-60
230
0
1,021
337
33.0
684
684
-413.7
20
134
1.2
4Q
32,919
1.0
4,655
14.1
4,655
14.1
786
-70
155
0
3,954
1,305
33.0
2,649
2,649
146.8
45
146
1.3
FY13
FY14E
113,527
-5.6
4,207
3.7
6,905
6.1
2,502
-189
345
-325
1,537
246
16.0
1,290
1,680
-80.1
102
137
1.2
112,808
-0.6
9,200
8.2
9,200
8.2
2,841
-250
750
0
6,859
2,263
33.0
4,595
4,595
173.6
110
133
1.2
C25
Thermax
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
TMX IN
119.2
83 / 1
716 / 526
5/4/4

Y/E March
2013 2014E 2015E
Net Sales
54.3 53.7 58.2
EBITDA
5.0
4.8
5.6
Adj PAT
3.2
3.0
3.5
EPS (INR)
27.0 25.2 29.5
EPS Gr. (%)
(20.2) (6.6) 17.0
BV/Sh. (INR)
160.0 177.1 197.3
RoE (%)
18.4 15.3 16.1
RoCE (%)
14.8 12.8 14.2
Payout (%)
30.3 32.4 31.7
Valuations
P/E (X)
20.2 27.6 23.6
P/BV (X)
3.4
3.9
3.5
EV/EBITDA (X)
12.3 16.1 13.6
Div Yield (%)
1.3
1.0
1.1
2016E
70.0
7.0
4.7
39.4
33.3
223.8
19.0
17.2
32.7
17.7
3.1
10.6
1.6
CMP: INR696
Buy
Pace of project execution is likely to remain challenging under the

constrained environment. We expect energy segment revenue to grow
6% YoY (1HFY14 de-growth of 17% YoY) and 5% growth in environment
segment (1HFY14 de-growth of 2% YoY).
Order inflow from domestic customers is likely to remain muted
(2QFY14 domestic order inflow was INR5.5b v/s average domestic
inflows of INR9.3b in FY13). TMX received an order worth INR2.7b for
supply of heat recovery steam generators from Reliance Ind in 3QFY14
(1QFY14 order inflow from Reliance was INR17b).
In a recent media report management stated that "company is hopeful
of stable third quarter and is likely to see an improvement in
performance in the fourth quarter (4Q)" and also stated that margins
are unlikely to improve unless order inflow picks up.

Quantum of order inflows would be the key variable to focus in a
constrained environment. Order inflow for 1HFY14 was INR35.8b, up
29% YoY on consolidated basis (we model consolidated order inflow
of INR58.6b for FY14E).
Updates shared by management on the pace of project execution,
mainly Reliance Ind (order value INR19.7b and accounts for 32% of
the consolidated unexecuted order book of INR61.3b).
Revenue from its subsidiaries had stagnated at INR1.9b in 1QFY14
and 2QFY14 but subsidiary profits had increased 91% QoQ in 2QFY14.
Maintaining the revenue momentum across subsidiaries would be a
crucial factor to watch for.
(INR Million)
Y/E March
Sales
Change (%)
EBITDA
Change (%)
As of % Sales
Depreciation
Interest
Other Income
PBT
Tax
Reported PAT
Adj PAT
Change (%)
Order Book
Order Intake
BTB (x)
E: MOSL Estimates
January 2014
FY13
1Q
9,835
-5.8
964
-15.1
9.8
132
37
187
981
309
31.5
672
672
-15.9
44,740
12,580
0.9
2Q
11,924
-8.5
1,218
-13.3
10.2
139
34
274
1,318
407
30.9
911
911
-10.4
44,120
11,620
0.9
3Q
10,468
-17.5
1,119
-18.0
10.7
133
20
124
1,090
326
29.9
764
764
-20.1
46,490
12,840
0.9
4Q
14,682
-13.0
1,672
-9.7
11.4
145
5
244
1,767
614
34.7
1,153
1,153
-11.2
43,358
11,550
1.2
1Q
8,628
-12.3
814
-15.5
9.4
142
8
81
745
243
32.6
503
503
-25.2
55,300
21,230
1.2
FY14
2Q
3QE
10,433
11,059
-12.5
5.6
937
1,061
-23.1
-5.2
9.0
9.6
140
152
19
25
75
200
853
1,084
551
333
64.6
30.7
302
751
592
751
-66.9
-1.6
53,080
51,771
7,680
9,750
1.2
1.2
4QE
15,083
2.7
1,764
5.5
11.7
173
48
316
1,859
571
30.7
1,288
1,288
11.7
50,753
12,997
1.1
FY13
FY14E
46,909
-11.6
5,071
-13.1
10.8
549
96
730
5,156
1,657
32.1
3,500
3,500
-14.0
43,358
48,590
0.9
45,203
-3.6
4,575
-9.8
10.1
607
100
673
4,542
1,394
30.7
3,147
3,147
-10.1
50,753
51,657
1.1
C26
December 2013 Results Preview | Sector: Cement
Cement
Companies Covered
Demand fails to recoup in seasonally stronger quarter
ACC
Cement demand continued to remain sluggish in 3QFY14E, with a weak October,

followed by a relatively better November and again a subdued December. Adverse
impact continues in housing and infrastructure vertical, coupled with sand mining
issues, delayed crop selling and politico-economic uncertainties. We estimate growth
of 1% YoY (+3% QoQ) in 3QFY14E and ~2.5% for FY14E for MOSL universe. Capacity
utilization is expected to remain at 69% (unchanged QoQ), which is the lowest 3Q
level in last decade. Our interactions with dealers across regions highlight a possible
better rural demand in 4QFY14E, also propelled by recent easing of sand mining issue,
post SC verdicts.
Ambuja Cements
Birla Corporation
Grasim Industries
India Cements
Shree Cement
UltraTech Cement
Price volatility persists despite futile attempts by players; net increase

estimated at INR1/bag QoQ
Weak demand and aggressive stance by tier II players resulted in rollback of couple of
price increase attempts (September-end and mid-November) taken by industries.
Overall, we estimate weighted average national prices to increase by INR1/bag QoQ
(-INR8/bag YoY) in 3QFY14E. This includes specific trends of (a) INR2-3/bag QoQ increase
in south and central, (b) INR1/bag increase in east, (c) INR1/bag decline in west and
(d) flattish trend in south. There have been instances of sharp plunge in non-trade
prices in between select markets like Rajasthan. We factor for YoY (-INR2/bag) and
INR10/bag YoY increase in realizations in FY14E and FY15E respectively.
Weaker demand and price to maintain pressure on profitability

Profitability is expected to be under pressure in 3QFY14E as well, after a weak 2QFY14,
as there has been (1) weak pricing trend, (2) continued cost push in energy and freights
and (3) no major benefits of seasonal operating leverage due to a weak demand. We
estimate EBITDA at ~INR505/bag (+INR6/bag QoQ, -INR293/bag YoY for pure cement
players). We estimate EBITDA/ton at INR793/906 for FY14E/FY15E respectively based
on (-INR2)/INR10 per bag YoY price increases.
Valuation and view

We revise the realizations improvement assumption for FY14E/15E at INR-2/10 per
bag YoY (v/s earlier estimate of INR0/15 per bag) to factor the disappointment in
expectation of realization improvement in 3QFY14E. This has resulted in downgrade
CMP
(INR)
27.12.13
ACC
1,120
Ambuja Cements
185
Birla Corporation
259
Grasim Industries
2,716
India Cements
61
54
Shree Cement
4,386
Ultratech Cement
1,771
Sector Aggregate
(INR Million)
Rating
Dec.13
Buy
Neutral
Buy
Buy
Neutral
Buy
Buy
Neutral
27,731
22,120
7,218
13,194
10,169
34,832
13,499
47,701
176,465
Sales
Var.
% YoY
-10.5
-4.4
17.8
8.5
-6.0
2.5
-5.5
-1.8
-2.0
Var.
% QoQ
10.5
10.3
1.6
-6.1
-6.4
9.7
8.2
6.0
6.0
Dec.13
2,490
2,474
516
2,253
1,198
7,152
2,437
7,004
25,525
EBITDA
Var.
% YoY
-21.5
-42.2
0.5
4.6
-37.8
-6.2
-34.4
-31.6
-24.1
Var.
% QoQ
10.5
-3.1
-11.8
-13.8
-6.1
-9.5
-2.3
6.2
-2.8
Net Profit
Dec.13
Var.
% YoY
1,601
-33.1
1,633
-29.0
357
10.7
2,472
24.9
-285
PL
-33
PL
1,471
-35.4
3,143
-47.7
10,360
-37.7
Var.
% QoQ
32.6
21.3
-14.2
-37.6
Loss
PL
-15.1
19.0
-13.2
Jinesh K Gandhi (Jinesh@MotilalOswal.com) / Sandipan Pal (Sandipan.Pal@MotilalOswal.com)

January 2014
C27
of our FY15E EPS estimates by 1-13% for ACC/ACEM/UTCEM/SRCM/Grasim. While

demand recovery is expected to be gradual, slowing capacity addition coupled with
higher capex and opex cost would support cement prices and profitability, going
forward. Recovery in demand would be critical for operating and stock performance.
In large caps, we prefer ACC and Shree Cement, while in mid-caps we prefer Birla
Corp, Madras Cement and Dalmia Bharat.
Demand growth flattish YoY in a seasonally strong quarter
MOSL cement universe volumes to grow 1% YoY (+3% QoQ)
Source: CMA/MOSL
Trend in average quarterly cement price remains weak (INR/bag)

3QFY13
4QFY13
322
316
307
308
100%
90%
262
70%
3QFY14E
1QFY14
3QFY13
1QFY13
3QFY12
1QFY12
3QFY11
1QFY11
3QFY10
1QFY10
3QFY09
60%
North
2QFY14
3QFY14
282
261
259
245
245
320
80%
1QFY14
283
275
272
271
300
293
289
294
296
264
265
262
264
266
287
286
281
277
278
Utilizations fail to improve in a seasonally strong quarter
Eas t
Wes t
South
Centra l Na ti onal
Avera ge
Source: CMA/MOSL
Weaker realizations, cost push and weak operating leverage to

keep profitability under pressure
394
593
927
1,031
614
855
1,004
1,156
988
1,310
1,216
828
878
1QFY10
2QFY10
3QFY10
4QFY10
1QFY11
2QFY11
3QFY11
4QFY11
1QFY12
925
3,771
3,747
3,401
3,449
3,654
3,279
3,490
3,899
4,022
3,797
4,129
4,208
4,448
4,484
4,328
4,288
4,318
4,179
4,223
1QFY10
2QFY10
3QFY10
4QFY10
1QFY11
2QFY11
3QFY11
4QFY11
1QFY12
2QFY12
3QFY12
4QFY12
1QFY13
2QFY13
3QFY13
4QFY13
1QFY14
2QFY14
3QFY14E
798
832
805
499
505
EBITDA (INR/ton)
Rea l i za ti on (INR/ton)
2QFY12
3QFY12
4QFY12
1QFY13
2QFY13
3QFY13
4QFY13
1QFY14
2QFY14
3QFY14E
Realization to remain flat QoQ as suggested by price trend
Source: Company/MOSL
January 2014
C28
Trend in key operating parameters
ACC
Ambuja Cement
UltraTech
Birla Corp
India Cement
Shree Cement
Dalmia Bharat
J K Cements
JK Lakshmi Cem.
Madras Cement
Orient Paper
Prism Cement
Sector Agg.
Net Sales (INR m)

3QFY14
YoY (%)
QoQ (%)
27,731
-10.5
10.5
22,120
-4.4
10.3
47,701
-1.8
6.0
7,218
17.8
1.6
10,169
-6.0
-6.4
13,499
-5.5
8.2
7,202
6.8
1.1
6,311
-8.1
1.1
4,513
-8.6
0.5
8,110
-7.0
-10.4
3,421
0.7
6.5
12,436
5.9
8.0
170,431
-3.4
5.1
EBITDA Margins (%)

3QFY14
YoY (Rs)
QoQ (Rs)
9.0
-130
0
11.2
-730
-150
14.7
-640
0
7.2
-120
-110
11.8
-600
0
18.1
-800
-190
10.7
-820
40
9.1
-1,040
300
11.6
-830
-90
14.7
50
-60
10.8
-580
0
2.2
170
450
11.6
-500
0
Net Profit (INR m)

3QFY14 YoY (INR) QoQ (INR)
1,601
-33.1
32.6
1,633
-29.0
21.3
3,143
-47.7
19.0
357
10.7
-14.2
-285
-209.0
26.4
1,471
-35.4
-15.1
-64
-135.1
-75.4
-49
-109.0
-77.3
47
-88.7
-54.8
43
-94.9
-76.4
159
-49.2
10.1
-447
-17.0
-61.2
7,609
-50.3
28.5
Realization (INR/ton)
3QFY14
YoY (BP) QoQ (BP)
4,244
79
9
4,131
-163
27
4,826
10
23
3,876
-71
38
4,166
-198
50
3,334
-390
0
4,291
102
0
4,554
-188
286
3,522
-427
40
4,139
-382
60
3,462
-62
45
3,727
84
80
4,223
-105
44
3QFY14
408
462
709
376
504
578
480
413
408
444
375
59
505
Trend in key financial parameters
ACC
Ambuja Cement
UltraTech
Birla Corp
India Cement
Shree Cement
Dalmia Bharat
J K Cements
JK Lakshmi Cem.
Madras Cement
Orient Paper
Prism Cement
Sector Agg.
Volume (m tons)
3QFY14
YoY (%)
QoQ (%)
6.0
0.5
7.8
5.4
-0.6
9.6
9.7
-2.1
5.4
1.9
20.0
0.6
2.4
-1.7
-2.5
3.1
4.3
-4.2
1.6
8.0
-2.3
1.4
-4.3
-5.3
1.3
2.5
-0.6
2.0
1.5
-9.6
1.0
2.5
5.1
1.4
3.0
15.0
37.0
1.0
3.1
EBITDA (INR/ton)
YoY (%)
QoQ (%)
-126
11
-333
-61
-307
5
-74
32
-293
-19
-440
-92
-379
34
-511
153
-377
-28
-560
60
-211
6
121
296
-293
6
Revised EPS estimates (INR)

FY14E/CY13E
Old
Chg (%)
Rev
ACC
Ambuja Cement
UltraTech
Birla Corp
India Cement
Shree Cement
45.5
6.4
70.1
29.6
-0.8
272.2
51.5
7.2
86.4
34.1
1.9
312.7
-11.6
-11.3
-18.9
-13.0
-141.7
-13.0
Rev
FY15E/CY14E
Old
64.3
8.1
93.6
42.8
3.8
302.0
64.7
8.6
102.9
42.6
5.0
315.7
Chg (%)
-0.5
-6.4
-9.0
0.5
-23.6
-4.3
Recent correction makes valuations attractive (FY12)
EV (USD/Ton)
200
Repl acement Cos t at

USD140/ton
150
Ambuja
Ul tra Tech
100
Indi a Cement
Shree
Gra s i m
50
ACC
Bi rl a Corp
0
0%
6%
12%
18%
24%
RoCE (%)
January 2014
C29
Relative Performance - 3m (%)
Sens ex Index
MOSL Cement Index
110
Sens ex Index
MOSL Cement Index
120
105
106
Dec-13
Sep-13
Jun-13
Dec-13
Dec-12
60
Nov-13
98
Oct-13
75
Sep-13
102
Mar-13
90
CMP (INR)
27.12.13
Cement
ACC
Ambuja Cements
Birla Corporation
Grasim Industries
India Cements
J P Associates
Shree Cement
Ultratech Cement
Dalmia Bharat
J K Cements
JK Lakshmi Cem.
Ramco Cements
Prism Cement
Sector Aggregate
January 2014
1,120
185
259
2,716
61
54
4,386
1,771
169
194
80
189
27
Rating
EPS (INR)
FY13 FY14E FY15E
P/E (x)
FY13 FY14E FY15E
EV/EBITDA (x)
FY13 FY14E FY15E
RoE (%)
FY13 FY14E FY15E
Buy
Neutral
Buy
Buy
Neutral
Buy
Buy
Neutral
Buy
Buy
Buy
Buy
Neutral
68.7
10.0
35.0
291.3
5.8
2.3
314.9
96.8
24.3
33.0
16.0
17.0
-1.2
16.3
18.4
7.4
9.3
10.5
23.9
13.9
18.3
7.0
5.9
5.0
11.1
-22.4
14.8
9.5
9.3
4.4
4.3
6.6
17.6
8.3
11.4
5.6
4.9
4.9
8.8
15.7
9.2
17.7
18.3
11.0
13.6
4.3
3.9
30.6
18.9
6.6
14.4
15.4
18.3
-5.4
13.4
45.5
6.4
29.6
260.0
-0.8
0.9
272.2
70.1
6.0
3.2
7.6
5.3
-3.4
64.3
8.1
42.8
309.2
3.8
2.4
302.0
93.6
8.1
17.8
9.1
14.0
-0.5
24.6
28.9
8.7
10.4
-77.3
60.3
16.1
25.3
28.3
60.6
10.4
35.9
-7.9
22.0
17.4
22.9
6.0
8.8
15.9
22.7
14.5
18.9
20.9
10.9
8.7
13.5
-51.6
16.0
13.5
16.4
5.1
4.6
8.3
10.0
10.8
14.1
10.8
11.1
8.8
13.1
25.0
10.3
9.8
13.5
3.4
3.6
6.3
9.1
8.8
11.1
8.5
6.3
7.1
7.8
9.0
8.1
11.4
11.0
8.8
11.0
-0.5
1.5
18.4
12.0
1.6
1.4
6.9
5.3
-17.5
8.4
15.4
13.2
11.6
11.7
2.7
3.8
16.5
14.3
2.1
7.2
7.9
13.2
-3.1
10.7
C30
ACC
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
ACC IN
187.9
211 / 3
1,453 / 912
1 / -19 / -30
CMP: INR1,120

Y/E December
Sales
EBITDA
NP
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
EV/Ton (USD)
2012 2013E 2014E

111.3 109.9 122.6
19.7 13.5 18.5
12.9
8.6 12.1
68.7 45.7 64.3
14.1 -33.5 40.8
392.9 406.9 430.5
17.7 11.4 15.4
23.5 15.2 20.6
61.8 73.1 63.3
16.3
2.9
8.9
93
24.6
2.8
12.8
91
17.4
2.6
8.7
85
2015E
140.4
23.6
15.7
83.6
30.0
467.6
18.6
24.8
55.6
13.4
2.4
7.4
82
Buy
Dispatches in 4QCY13E are estimated to grow 0.5% YoY (+8% QoQ) to

5.97mt. Average realizations are expected to remain flat QoQ (+1.3%
YoY) to INR4,244/ton.
Revenue is expected to de-grow by 11% YoY (+11% QoQ) to INR27.7b.
EBITDA margins are expected to remain unchanged QoQ (-1.2pp YoY)
due to (a) lower realizations growth and (c) push on energy and freight
cost. EBITDA/ton is estimated at INR408 (+INR11 QoQ, -INR122 YoY).
PAT would decline 33% YoY (+33% QoQ) to INR1.6b.
We cut the EPS estimates (ex-synergies) by 11.6%/0.5% for CY13E/
CY14E to INR45.5 and INR64.3 respectively to factor for weaker
realizations in volume and higher cost.
The stock trades at 17.4x CY14E EPS, 8.7x EV/EBITDA and USD85/ton.
Maintain Buy with a target price of INR1,297 (CY14E USD101/ton).

Volume growth recovery and outlook.
Cement pricing outlook and sustainability, considering recent
downtrend in November and December.
Progress in ongoing capex for Jamul expansion of 5mt.
Update of synergies and other guided cost saving measures.

Y/E December
(INR Million)
CY12
1Q
2Q
3Q
Cement Sales (m ton)
6.72
6.05
5.40
YoY Change (%)
9.1
2.0
-5.1
Cement Realization
4,231
4,558
4,502
YoY Change (%)
8.7
12.5
19.1
QoQ Change (%)
0.7
7.7
-1.2
Net Sales
28,430
27,576
24,310
YoY Change (%)
18.5
14.8
13.1
EBITDA
5,988
6,306
4,215
Margins (%)
21.1
22.9
17.3
Depreciation
1,305
1,356
1,352
Interest
316
301
257
Other Income
1,121
1,360
975
PBT before EO Item
5,487
6,009
3,581
PBT after EO Item
2,134
6,009
3,581
Tax
580
1,829
1,094
Rate (%)
27.2
30.4
30.6
Reported PAT
1,554
4,179
2,487
Adjusted PAT
3,859
4,179
2,487
Margins (%)
13.6
15.2
10.2
YoY Change (%)
10.1
24.2
48.4
E: MOSL Estimates; * Merger of RMC business from 4QCY12
January 2014
CY13
4Q*
5.94
-0.2
4,166
-0.8
-7.5
30,989
24.0
3,172
10.2
1,575
273
1,468
2,792
2,792
400
14.3
2,392
2,392
7.7
-15.2
1Q
6.42
-4.5
4,269
0.9
2.5
29,111
2.4
4,468
15.3
1,383
108
1,205
4,182
5,861
1,484
25.3
4,377
3,124
10.7
-19.1
2Q
6.12
1.2
4,298
-5.7
0.7
27,952
1.4
4,335
15.5
1,387
179
908
3,677
3,677
1,086
29.5
2,591
2,591
9.3
-38.0
3Q
5.54
2.6
4,235
-5.9
-1.5
25,087
3.2
2,253
9.0
1,444
110
1,023
1,721
1,721
514
29.8
1,207
1,207
4.8
-51.4
4QE
5.97
0.5
4,244
1.9
0.2
27,731
-10.5
2,490
9.0
1,505
123
1,365
2,227
2,227
625
28.1
1,601
1,601
5.8
-33.1
CY12
CY13E
24.1
1.6
4,358
9.7
24.0
-0.2
4,263
-2.2
111,305
18.0
19,681
17.7
5,589
1,147
4,923
17,869
14,515
3,903
26.9
10,612
12,918
11.6
11.9
109,881
-1.3
13,546
12.3
5,719
520
4,500
11,807
13,485
3,708
27.5
9,777
8,560
7.8
-33.7
C31
Ambuja Cements
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
ACEM IN
1,545.2
285 / 5
212 / 148
-1 / -10 / -17
CMP: INR185
Dispatches in 4QCY13E are estimated to de-grow 0.6% YoY (+10% QoQ)

to 5.36mt. Average realizations are expected to decline by 0.7% QoQ
(-3.8% YoY) to INR4,131/ton.
EBITDA margins are expected to decline by 7.3pp YoY (-1.5pp QoQ) to

11.2%, impacted by lower realizations, cost push and no seasonal
benefits from operating leverage. EBITDA/ton is estimated at ~INR462/
ton (-INR61/ton QoQ and -INR333/ton YoY).
PAT is estimated to decline 29% YoY (+21% QoQ) to INR1.6b.
We cut the EPS estimates (ex-synergies) by 11.3%/6.4% for CY13E/

CY14E to INR6.4 and INR8.1 respectively to factor the weaker
realizations volume and higher cost.
The stock trades at 22.9x CY14E EPS, 13.2x EV/EBITDA and USD132/ton.
Maintain Neutral with a target price of INR185 (CY14E USD126/ton).

Y/E December
Sales
EBITDA
NP
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
EV/Ton (USD)
2012 2013E 2014E

96.7 91.1 101.3
24.7 15.1 18.4
15.4
9.9 12.4
10.0
6.4
8.1
22.4 -36.1 26.2
56.9 59.7 62.5
18.3 11.0 13.2
27.6 16.3 19.2
49.8 62.9 64.9
18.4
3.2
9.8
139
28.9
3.1
16.2
137
22.9
3.0
13.2
132
2015E
115.6
22.5
15.7
10.2
26.2
66.9
15.7
22.7
57.2
18.1
2.8
10.3
127
Neutral

Progress in ongoing mining land acquisition and capex in Nagaur
(Rajasthan) plant of 4.5mt.
(INR Million)
Y/E December
Sales Volume (m ton)*
YoY Change (%)
YoY Change (%)
QoQ Change (%)
Net Sales
YoY Change (%)
EBITDA
Margins (%)
Depreciation
Interest
Other Income
PBT before EO Item
PBT after EO Exp/(Inc)
Tax
Rate (%)
Reported Profit
Adj PAT
YoY Change (%)
E: MOSL Estimates
January 2014
CY12
1Q
6.18
9.6
4,257
8.5
4.4
26,315
18.9
7,470
28.4
1,209
168
1,122
7,215
-2,791
4,424
1,301
29.4
3,122
5,075
24.5
2Q
5.63
6.5
4,556
10.7
7.0
25,660
17.9
7,223
28.2
1,215
180
908
6,736
0
6,736
2,047
30.4
4,689
4,689
34.9
3Q
4.79
-0.4
4,521
20.3
-0.8
21,645
19.8
5,673
26.2
1,373
166
939
5,074
-499
4,575
1,535
33.6
3,040
3,371
96.6
CY13
4Q
5.39
-5.6
4,293
5.2
-5.0
23,133
-0.7
4,282
18.5
1,576
243
1,100
3,563
-279
3,284
1,164
35.5
2,120
2,300
-28.8
1Q
5.96
-3.6
4,271
0.3
-0.5
25,448
-3.3
5,118
20.1
1,204
132
1,339
5,121
1,741
6,862
1,983
28.9
4,879
3,641
-28.3
2Q
5.46
-3.1
4,297
-5.7
0.6
23,457
-8.6
4,920
21.0
1,223
171
1,051
4,578
0
4,578
1,336
29.2
3,242
3,242
-30.9
3Q
4.89
2.0
4,103
-9.2
-4.5
20,049
-7.4
2,554
12.7
1,246
178
940
2,070
481
2,551
891
34.9
1,660
1,346
-60.1
4QE
5.36
-0.6
4,131
-3.8
0.7
22,120
-4.4
2,474
11.2
1,261
168
1,270
2,315
0
2,315
682
29.5
1,633
1,633
-29.0
CY12
CY13E
21.99
2.5
4,400
11.0
21.66
-1.5
4,205
-4.4
96,749
13.8
24,675
25.5
5,373
757
4,042
22,588
-3,570
19,018
6,048
31.8
12,971
15,435
23.0
91,075
46.4
15,067
16.5
4,934
649
4,600
14,083
2,223
16,306
4,892
30.0
11,414
9,858
-36.1
C32
Birla Corporation
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
BCORP IN
77.0
20 / 0
342 / 191
3 / 7 / -22
2013 2014E 2015E

25.6 30.0 33.7
3.5
3.1
4.6
2.7
2.3
3.3
35.0 29.6 42.8
12.8 -15.4 44.5
318.2 338.4 370.8
11.0
8.8 11.6
10.7
8.0 11.8
24.9 31.6 24.4
7.4
0.8
4.1
25
8.7
0.8
4.8
26

Y/E March
Sales
EBITDA
NP
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
EV/Ton (USD)
CMP: INR259
6.0
0.7
3.0
25
2016E
37.7
6.0
4.1
53.6
25.2
412.8
13.0
13.5
21.7
4.8
0.6
2.3
21
Buy
3QFY14E volumes are estimated to grow 20% YoY (+0.6% QoQ) to 1.86mt
on a low base of last year when the mining ban was implied. Average
realizations are expected to decline by 5.1% YoY (+1.4% QoQ) to
INR3,591/ton.
EBITDA margins are expected to decline by 1.2pp YoY (1pp QoQ) to
7.2%, impacted by higher cost. EBITDA/ton (including non-cement
business) is estimated to decline by ~INR39/ton QoQ (-111/ton YoY)
to INR277/ton.
PAT estimated to grow 11% YoY (-14% QoQ) to INR357m.
We cut the FY14E/15E EPS estimates by 13%/unchanged to factor better
volume but lower realizations and cost push.
The stock trades at 4.8x FY16E EPS, 2.3x EV/EBITDA and USD21/ton.
Maintain Buy with a target price of INR317 (4x FY15E EV/EBITDA).

Status of mining ban at Rajasthan plant.
(INR Million)
Y/E March
Cement Sales (m ton)
YoY Change (%)
Cement Realization
YoY Change (%)
QoQ Change (%)
Net Sales
YoY Change (%)
EBITDA
Margins (%)
Depreciation
Interest
Other Income
Profit before Tax
Tax
Rate (%)
PAT
Margins (%)
YoY Change (%)
E: MOSL Estimates
January 2014
FY13
1Q
1.63
7.1
4,021
17.8
11.3
6,580
18.1
1,258
19.1
235
237
346
1,132
284
25.1
847
12.9
-24.3
2Q
1.58
11.7
3,934
25.2
-2.2
6,274
24.2
1,102
17.6
252
141
347
1,056
254
24.0
802
12.8
206.8
3Q
1.55
11.9
3,784
8.1
-3.8
6,126
14.7
514
8.4
285
171
270
328
6
1.7
322
5.3
-26.3
FY14
4Q
1.71
4.6
3,581
-0.9
-5.4
6,658
2.4
663
10.0
272
99
701
992
265
26.8
726
10.9
26.4
1Q
1.87
14.8
3,864
-3.9
7.9
7,720
17.3
668
8.7
302
207
367
525
66
12.5
460
6.0
-45.7
2Q
1.85
17.3
3,541
-10.0
-8.3
7,107
13.3
585
8.2
311
249
422
448
32
7.1
416
5.9
-48.2
3QE
1.86
20.0
3,591
-5.1
1.4
7,218
17.8
516
7.2
315
255
450
396
40
10.0
357
4.9
10.7
4QE
1.92
12.3
3,885
8.5
8.2
7,983
19.9
1,284
16.1
334
298
515
1,167
116
10.0
1,051
13.2
44.7
FY13
FY14E
6.47
8.5
3,827
12.0
7.50
16.0
3,722
-2.7
25,638
14.1
3,536
13.8
1,044
649
1,663
3,507
809
23.1
2,698
10.5
12.8
30,028
17.1
3,054
10.2
1,263
1,009
1,755
2,537
254
10.0
2,283
7.6
-15.4
C33
Grasim Industries
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
GRASIM IN
91.7
249 / 4
3,242 / 2,121
2 / -14 / -23
CMP: INR2,716

Y/E March
Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
EV/Ton (USD)
2013
276.4
56.6
36.7
291.3
-3.6
2,142
13.6
18.5
9.0
2014E
267.6
47.0
30.5
260.0
-10.7
2,372
11.0
14.4
11.2
2015E
303.8
59.1
37.0
309.2
18.9
2,650
11.7
16.3
10.3
2016E
344.2
71.5
43.9
345.3
11.7
2,963
11.7
18.4
9.3
9.3
1.3
6.1
101
10.4
1.1
6.7
80
8.8
1.0
5.3
72
7.9
0.9
3.8
75
Buy
VSF volumes are estimated to grow 15% YoY (-2.9% QoQ) to 90,366
tons, impacted by uncertain global economic outlook. VSF realizations
are estimated to decline by ~INR2/kg QoQ, YoY INR119.6/kg.
This is due to price increase taken in VSF segment August -13, as import
parity price has gone up in line with rupee depreciation. We are
assuming price/kg of INR119/121 for FY14E/15E.
Standalone EBITDA margins are estimated to decline by 150bp QoQ
(-0.6pp YoY) to 17.1% YoY, due to raising pulp price and currency.
EBITDA is estimated to grow by 4.6% YoY (-13.8% QoQ) to INR2.3b,
translating into PAT of INR2.5b - growth of 25% YoY (-38% QoQ).
Cutting FY14E/15E EPS by 12%/7% to factor the higher cost push.
The stock trades at 8.8x FY15E consolidated EPS, 5.3x FY15E EV/EBITDA
and USD72/ton. Maintain Buy with a target price of INR3,557 (FY15Ebased SOTP).

Outlook on VSF business and strategy to utilize upcoming capacities
(~47% capacity growth).
Cement business outlook on demand and pricing and status of
capacity addition.
(INR Million)
Y/E March
VSF Volume (ton)
YoY Change (%)
VSF Realization (INR/ton)
YoY Change (%)
QoQ Change (%)
Net Sales
YoY Change (%)
EBITDA
Margins (%)
Depreciation
Interest
Other Income
PBT before EO Items
PBT after EO Items
Tax
Rate (%)
Reported PAT
Adj. PAT
YoY Change (%)
E: MOSL Estimates
January 2014
FY13
1Q
77,013
40.4
128,024
-16.0
5.5
12,390
21.0
2,953
23.8
360
61
844
3,376
0
3,376
647
19.2
2,729
2,729
-13.1
2Q
85,312
8.0
126,656
1.6
-1.1
13,453
10.5
2,898
21.5
386
78
2,106
4,540
0
4,540
712
15.7
3,827
3,827
11.0
3Q
78,579
0.5
121,668
-5.3
-3.9
12,157
-2.2
2,154
17.7
395
107
951
2,603
0
2,603
623
24.0
1,980
1,980
-27.9
FY14
4Q
95,161
0.3
119,150
-1.8
-2.1
13,765
-1.1
2,141
15.6
451
145
1,181
2,726
2,044
4,770
1,046
21.9
3,724
2,128
-12.6
1Q
77,518
0.7
116,501
-9.0
-2.2
11,489
-7.3
2,025
17.6
484
78
958
2,420
8
2,429
167
6.9
2,261
2,254
-17.4
2Q
93,025
9.0
121,590
-4.0
4.4
14,055
4.5
2,613
18.6
530
95
2,213
4,201
184
4,385
250
5.7
4,135
3,962
3.5
3QE
90,366
15.0
119,590
-1.7
-1.6
13,194
8.5
2,253
17.1
545
100
1,050
2,658
0
2,658
186
7.0
2,472
2,472
24.9
4QE
99,590
4.7
119,538
0.3
0.0
13,266
-3.6
2,274
17.1
633
148
1,280
2,772
0
2,772
193
7.0
2,579
2,579
21.2
FY13
FY14E
336,065
9.5
123,678
-4.5
360,499
7.3
119,428
-3.4
51,814
6.3
10,145
19.6
1,592
391
5,082
13,245
2,044
15,289
3,029
19.8
12,260
10,621
-9.8
52,005
0.4
9,165
17.6
2,192
421
5,500
12,052
192
12,243
796
6.5
11,448
11,268
6.1
C34
India Cements
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
ICEM IN
307.2
19 / 0
95 / 43
1 / -3 / -40
2013
46.0
8.4
1.8
5.8
-31.3
133.1
4.3
8.4
43.6
10.5
0.5
5.1
52
2014E 2015E
45.9 51.7
6.2
7.9
-0.2
1.1
-0.8
3.8
-113.6 -586.3
131.2 132.5
-0.5
2.7
5.1
7.4
-162.8 64.7
-77.3
0.5
7.7
55

Y/E March
Sales
EBITDA
NP
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
EV/Ton (USD)
CMP: INR61
15.9
0.5
5.8
53
2016E
58.9
9.5
2.2
7.8
103.6
136.1
5.3
9.5
49.4
7.8
0.4
4.5
50
Neutral
India Cement's volumes are expected to de-grow by 1.7% YoY (-3%

QoQ) to 2.38mt. Weaker pricing environment over 2H of 3QFY14 to
result in -4.5% YoY (+1.2% QoQ) change in realizations to INR4,166/
ton. We estimate revenue of ~INR70m from IPL (v/s INR90m in 3QFY13).
EBITDA is estimated at INR1.2b (-38% YoY and -6% QoQ) and EBITDA
margin to improve by 0.1pp QoQ (-6pp YoY) to 11.8%, translating into
a net loss of INR285m.
Pure Cement's EBITDA/ton is estimated to increase by ~IN63/ton QoQ
(-319 YoY) to INR504/ton.
We cut the FY14E EPS estimates to INR0.8, v/s INR1.9 earlier, and by
24% in FY15E to INR3.8, led by lower volume, realizations growth and
higher push in energy cost.
Valuations are at 15.9x FY15E EPS, 5.8x FY15E EBITDA and USD53/ton.
Maintain Neutral with a target price of INR56 (6x FY15E EV/EBITDA).

Demand and pricing outlook, especially in South India.
Expected timeline and potential cost savings from captive coal block
in Indonesia and AP power plant.
Roadmap for increase in stake in Trinetra (Rajasthan plant).
Timeline and capex plan over TN expansion of 2.6mt.
(INR Million)
Y/E March
Sales Dispatches (m ton)
YoY Change (%)
YoY Change (%)
QoQ Change (%)
Net Sales
YoY Change (%)
Total Expenditure
EBITDA
Margins (%)
Depreciation
Interest
Other Income
PBT before EO expense
PBT
Tax
Rate (%)
Reported PAT
Adj PAT
YoY Change (%)
Margins (%)
E: MOSL Estimates
January 2014
FY13
1Q
2.38
2.9
4,464
7.6
5.1
12,014
13.7
9,237
2,777
23.1
692
949
37
1,173
973
353
36.2
621
748
-26.7
6.2
2Q
2.51
3.5
4,355
3.1
-2.4
11,227
3.1
9,176
2,051
18.3
699
667
32
717
717
226
31.5
491
491
-29.6
4.4
3Q
2.42
10.8
4,364
2.9
0.2
10,824
15.0
8,897
1,927
17.8
708
822
34
431
431
169
39.3
261
261
-53.6
2.4
FY14
4Q
2.78
6.7
4,221
-0.6
-3.3
11,906
6.7
10,228
1,679
14.1
720
638
84
404
404
141
34.8
263
263
-59.4
2.2
1Q
2.65
11.3
4,188
-6.2
-0.8
12,384
3.1
10,473
1,910
15.4
680
999
25
257
257
89
34.6
168
168
-77.5
1.4
2Q
2.44
-2.9
4,116
-5.5
-1.7
10,859
-3.3
9,584
1,276
11.7
682
988
80
-314
-314
-89
28.3
-225
-225
-145.9
-2.1
3QE
2.38
-1.7
4,166
-4.5
1.2
10,169
-6.0
8,971
1,198
11.8
690
980
50
-422
-422
-137
32.5
-285
-285
-209.0
-2.8
4QE
2.75
-0.9
4,467
5.8
7.2
12,460
4.7
10,631
1,829
14.7
709
980
55
196
196
75
38.2
121
121
-54.0
1.0
FY13
FY14E
10.06
5.6
4,360
3.4
10.22
1.6
4,241
-2.7
45,970
9.4
37,537
8,433
18.3
2,818
3,078
186
2,724
2,524
888
35.2
1,636
1,765
-40.5
3.8
45,872
-0.2
39,659
6,213
13.5
2,760
3,946
210
-283
-283
(62)
22.0
-221
-221
-112.5
-0.5
C35
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
JPA IN
2,219.1
120 / 2
103 / 28
13 / -7 / -54

Y/E March
2013 2014E 2015E
Sales
133.6 139.7 156.6
EBITDA
33.3 31.9 34.7
NP
4.9
2.0
5.3
Adj. EPS (INR)
2.3
0.9
2.4
EPS Gr. (%)
-52.9 -60.4 165.2
BV/Sh. (INR)
60.1 62.2 64.0
RoE (%)
3.9
1.5
3.8
RoCE (%)
7.5
7.1
7.8
Payout (%)
22.8
8.8 22.8
Valuations
P/E (x)
23.9 60.3 22.7
P/BV (x)
0.9
0.9
0.8
EV/ EBITDA (x) 10.5 10.0
9.1
Div. Yield (%)
0.8
0.3
0.9
CMP: INR54
2016E
166.9
36.6
8.1
3.6
53.2
66.8
5.6
8.4
22.8
14.8
0.8
7.9
1.3
Buy
We expect JPA to post revenue of INR34.8b, EBITDA of INR7.2b and net

loss of INR33m in 3QFY14.
For the Cement business, we have assumed realization of INR4,061/
ton v/s INR4,021/ton in 2QFY14. We estimate volumes at 3.63m ton,
down 2% YoY.
EPC revenue would grow 11% YoY to INR14.1b and EBIT margin would
be flat YoY at 23%.
JPA sold its 4.8m ton Gujarat-based capacity to Ultratech for INR38b.
The consideration involves takeover of INR36.5b debt in Jaypee
Cement (100% subsidiary of JPA) and INR1.5b equity issuance.
Media articles indicate that JPA is also considering sale of its Himachalbased cement capacity and hydropower assets in Jaiprakash Power.
We expect JPA to post standalone net profit of INR2b in FY14 (down
60%) and INR5.3b in FY15 (up 165%). The stock trades at 22.7x FY15E
EPS.

Cement realizations and cost.
Update on further disinvestment.
EPC division profitability and visibility on revenues/order book.
Ramp-up in Real Estate, revenue recognition.
Y/E March
(INR Million)
FY13
1Q
2Q
3Q
4Q
1Q
2Q
Sales
29,636
29,825
33,984
38,642
33,149
31,761
Change (%)
-6.9
-4.8
2.8
-4.9
11.9
6.5
EBITDA
7,713
7,711
7,625
8,507
7,847
7,904
Change (%)
-0.2
3.1
-6.5
-16.6
1.7
2.5
As of % Sales
26.0
25.9
22.4
22.0
23.7
24.9
Depreciation
1,763
1,778
1,813
1,908
1,943
1,962
Interest
4,653
4,544
5,327
5,490
5,900
6,542
Other Income
731
448
1,176
679
371
1,245
Extra-ordinary income
9
33
8
43
PBT
2,037
1,870
1,670
1,831
4,327
656
Tax
649
590
561
596
982
-206
31.8
31.6
33.6
32.5
22.7
-31.4
Reported PAT
1,388
1,280
1,109
1,235
3,345
862
Adj PAT
1,379
1,280
1,101
1,192
207
862
Change (%)
28.7
-0.5
-45.9
-57.3
-85.0
-32.7
Cement Business
Volumes (m ton)
3.59
3.25
3.71
3.95
3.61
3.39
Revenues (INR m)
15,629
13,719
14,747
16,363
15,393
13,633
Realization (INR/t)
4,354
4,221
3,971
4,147
4,264
4,021
E: MOSL Estimates, *Change (% YoY) is not comparable due to Jaypee Cement de-merger
FY14
3QE
34,832
2.5
7,152
-6.2
20.5
1,950
6,450
1,200
4QE
39,971
3.4
9,006
5.9
22.5
1,993
6,421
1,260
-48
-15
31.0
-33
-33
-103.0
1,852
891
48.1
961
961
-19.4
3.63
14,732
4,061
4.37
19,071
4,361
FY13
FY14E
132,087
139,713
5.8
31,909
0.5
22.8
7,848
25,312
4,076
3,952
6,776
1,652
24.4
5,124
1,986
-59.6
31,755
24.0
7,261
20,114
3,034
93
7,507
2,495
33.2
5,013
4,920
14.50
60,459
4,170
15.00
62,830
4,189
Nalin Bhatt (NalinBhatt@MotilalOswal.com)/Aditya Bahety (Aditya.Bahety@MotilalOswal.com)

January 2014
C36
Shree Cement
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
SRCM IN
34.8
153 / 2
5,210 / 3,413
-3 / -14 / -13
CMP: INR4,386
We expect cement volumes to grow 4.3% YoY (-4.2% QoQ) to 3.13mt

(including clinker) and realizations are expected to remain flat QoQ (10.5% YoY) to INR3,334/ton.
Merchant power sale is estimated at 790m units (v/s 786m units YoY
and 417m QoQ) at ~INR3.9/unit (v/s INR3.85 QoQ and INR3.97 YoY).
Weak realizations and QoQ increase in cost trend led to cement

business profitability at INR578/ton (-INR92/ton QoQ and -INR440/
ton QoQ).
Power EBITDA contribution estimated at INR632m (v/s INR670m YoY/

INR310m QoQ). Adjusted PAT seen at INR1.5b (v/s INR1.7b QoQ v/s
INR2.3b YoY).
We cut the FY14E/15E EPS estimates by 13%/4.3% to factor the lower

volume, lower realizations and cost push.
Valuations are at 14.5x FY15E EPS, 8.8x FY15E EBITDA and USD84/ton.
Maintain Buy with a target price of INR4,700 (FY15E EV/ton of USD100).

Y/E June
Sales
EBITDA
NP
Adj EPS (INR)
EPS Growth (%)
BV/Share (Rs)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
EV/Ton (USD)
2013 2014E 2015E

55.7 57.1 65.7
15.4 12.8 16.2
10.0
7.7
8.0
314.9 272.2 302.0
14.8 -13.6 11.0
1,103 1,296 1,496
30.6 18.4 16.5
28.1 18.9 19.7
8.1 12.7 13.1
13.9
4.0
9.0
110
16.1
3.4
10.8
91
14.5
2.9
8.8
84
2016E
75.8
19.7
9.9
383.3
26.9
1,744
17.5
21.3
12.3
11.4
2.5
6.5
80
Buy

Volume and pricing outlook for North India.
Pet coke price trend and update on any forward agreements for
merchant power.
Update on planned expansion and progress in capex plans.
(INR Million)
Y/E March
Sales Dispat. (m ton)
YoY Change (%)
Realization (INR/Ton)
YoY Change (%)
QoQ Change (%)
Net Sales
YoY Change (%)
EBITDA
Margins (%)
Depreciation
Interest
Other Income
PBT before EO Exp
Extra-Ord Expense
PBT
Tax
Rate (%)
Reported PAT
Adj PAT
YoY Change (%)
E: MOSL Estimates
January 2014
FY13
1Q
3.04
22.4
3,815
12.2
1.7
12,964
52.2
3,902
30.1
942
543
328
2,745
10
2,736
454
16.6
2,281
2,289
438.0
2Q
3.00
5.2
3,724
4.1
-2.4
14,281
19.4
3,717
26.0
818
563
323
2,659
120
2,539
365
14.4
2,174
2,277
284.6
3Q
3.26
-6.2
3,498
-1.7
-6.1
14,281
0.3
4,054
28.4
1,265
447
576
2,918
1
2,917
176
6.0
2,741
2,741
85.2
FY14
4Q
3.17
-6.0
3,578
-4.6
2.3
14,414
0.4
3,800
26.4
1,332
378
913
3,003
0
3,002
159
5.3
2,843
2,843
-19.1
1Q
3.26
7.2
3,334
-12.6
-6.8
12,475
-3.8
2,494
20.0
1,139
312
740
1,783
11
1,773
50
2.8
1,722
1,732
-24.3
2Q
3.13
4.3
3,334
-10.5
0.0
13,499
-5.5
2,437
18.1
1,200
320
750
1,667
0
1,667
196
11.8
1,471
1,471
-35.4
3QE
3.43
5.3
3,634
3.9
9.0
15,330
7.4
3,839
25.0
1,500
450
800
2,689
0
2,689
316
11.8
2,373
2,373
-13.4
4QE
3.33
5.0
3,783
5.7
4.1
15,767
9.4
4,039
25.6
1,851
461
710
2,437
-11
2,447
291
11.9
2,157
2,148
-24.5
FY13
FY14E
12.46
-16.2
3,628
3.4
13.14
5.5
3,526
-2.8
55,671
-4.0
15,378
27.6
4,356
1,931
2,114
11,205
11
11,194
1,155
10.3
10,040
10,049
59.6
57,072
2.5
12,761
22.4
5,690
1,543
3,000
8,528
0
8,528
853
10.0
7,675
7,675
-23.6
C37
UltraTech Cement
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
UTCEM IN
274.0
485 / 8
2,066 / 1,405
-9 / -18 / -20

Y/E March
Sales
EBITDA
NP
Adj EPS (INR)
EPS Growth (%)
BV/Share (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
EV/Ton (USD)
2013 2014E 2015E

200.2 202.4 231.9
45.2 35.9 45.8
26.6 19.2 25.7
96.8 70.1 93.6
10.4 -27.6 33.6
555.7 614.0 693.7
18.9 12.0 14.3
21.4 14.1 16.6
10.9 16.7 14.9
18.3
3.2
10.0
142
25.3
2.9
13.2
126
18.9
2.6
10.5
122
2016E
265.6
55.2
30.9
112.6
20.3
788.9
15.2
18.5
15.5
15.7
2.2
8.7
122
CMP: INR1,771
Neutral
Cement volumes are estimated to grow -2.1% YoY (+5.4% QoQ) to

9.73mt. Realizations are estimated to decline by 1.9% YoY (0% YoY) to
INR3,973/ton. Its supplementary business of white cement and RMC
are estimated to grow 11% and 0% YoY (respectively) in volume and
2.5% YoY in realizations.
Flattish realizations coupled with sequential cost push would result
in impact on EBITDA/ton of INR709/ton (+INR5/ton QoQ, -INR307/ton
YoY). EBITDA margin would decline 7.4pp QoQ (0pp YoY) to 14.7%.
EBITDA is estimated to de-grow 1.8% YoY (+6% QoQ) to INR7b,
translating into PAT de-growth of 48% YoY (+19% QoQ) to INR3.1b.
We cut the EPS estimates for FY14E/15E by 19%/9% to INR70/INR93.6
respectively.
The stock trades at 18.9x FY15E EPS, 10.5x FY15E EV/EBITDA and
USD122/ton. Maintain Neutral with a target price of INR1,878 (FY15E
EV/ton of USD130).

Progress and timeline over JPA deal.
Update on financial performance of Star Cement, UAE.
Y/E March
(INR Million)
FY13
1Q
2Q
3Q
4Q
Sales (m ton)
10.33
9.29
9.94
11.13
YoY Change (%)
4.8
0.7
-1.7
-3.6
Grey Cement Realn.(INR/ton) *
4,121
4,219
4,050
4,011
YoY Change (%)
9.9
20.4
7.8
3.0
QoQ Change (%)
5.8
2.4
-4.0
-1.0
Net Sales
50,719
46,994
48,574
53,892
YoY Change (%)
16.6
20.3
6.4
1.0
EBITDA
12,897
10,052
10,243
11,993
Margins (%)
25.4
21.4
21.1
22.3
Depreciation
2,281
2,325
2,388
2,460
Interest
498
600
521
478
Other Income
869
706
1,212
1,833
PBT after EO Expense
10,987
7,834
8,545
10,888
Tax
3,203
2,334
2,537
3,626
Rate (%)
29.2
29.8
29.7
33.3
Reported PAT
7,784
5,500
6,008
7,262
Adj PAT
7,784
5,500
6,008
7,262
YoY Change (%)
14.0
97.2
5.5
-15.8
E: MOSL Estimates; * Grey cement realization is our estimate
January 2014
FY14
1Q
10.09
-2.3
4,120
0.0
2.7
49,575
-2.3
10,491
21.2
2,521
660
1,882
9,192
2,466
26.8
6,726
6,726
-13.6
2Q
9.23
-0.6
3,973
-5.8
-3.6
45,021
-4.2
6,597
14.7
2,573
888
574
3,711
1,070
28.8
2,641
2,641
-52.0
3QE
9.73
-2.1
3,973
-1.9
0.0
47,701
-1.8
7,004
14.7
2,650
925
900
4,329
1,186
27.4
3,143
3,143
-47.7
4QE
11.67
4.9
4,273
6.5
7.6
60,128
11.6
11,788
19.6
2,750
950
1,144
9,232
2,529
27.4
6,703
6,703
-7.7
FY13
FY14E
40.7
-0.2
4,102
9.8
40.7
0.2
4,096
-0.1
200,179
10.2
45,185
22.6
9,454
2,097
4,620
38,254
11,700
30.6
26,554
26,554
10.7
202,425
1.1
35,880
17.7
10,493
3,423
4,500
26,464
7,251
27.4
19,213
19,213
-27.6
C38
December 2013 Results Preview | Sector: Consumer
Consumer
Companies Covered
Expect 12% sales growth, 13.6% PAT growth for our Consumer coverage: We expect
our Consumer coverage universe to post 12% revenue growth and 13.6% PAT growth
in 3QFY14. Sales growth, though higher than the 10.3% in 2QFY14, would be towards
the lower end of the recent range. EBITDA is likely to grow 14.2%, with 50bp margin
expansion, led by ITC, Godrej Consumer Products (GCPL), Britannia (BRIT) and Marico
(MRCO). We expect ITC to post 10% sales growth (~2% cigarette volume decline) and
13.7% PAT growth. HUVRs sales are likely to grow 10% (volume growth of ~5%), with
flattish EBITDA margin.
Asian Paints
Colgate Palmolive
Dabur India
GSK Consumer
Rural-urban growth gap narrowing; delayed winter to impact Personal Care categories:
Our channel checks and management interactions indicate further moderation in
market growth, especially in the Foods and Personal Care categories. The key theme
for 3QFY14 could be narrowing of the growth rate gap between rural and urban
markets. Our interactions indicate that growth in the rural markets, which was holding
on well so far, has also begun moderating (still higher than urban growth though).
Discretionary categories like Paints and Adhesives continue to witness good
momentum and should see double-digit volume growth. Delayed arrival of winter
could impact Skin Care (HUVR, Dabur, ITC, Emami). Overall, we expect volume growth
for staples to hover around 2QFY14 levels.
Hindustan Unilever
ITC
Marico
Nestle India
Pidilite Industries
Radico Khaitan
United Spirits
Mixed input cost dynamics; selective pricing actions taken to pass on RM inflation:
The input costs scenario was mixed, with inflation in copra, LAB, palm oil and titaniumdioxide (TiO2) prices, and correction in select edible oil, sugar and wheat prices. Also,
lag impact of INR depreciation will be reflected in 3Q margins. We note selective
pricing actions by HUVR, Marico, ITC and Dabur to pass on the impact of raw material
(RM) inflation. HUVR has withdrawn its promotions in Soaps & Detergents. We expect
gross margin expansion for HUVR, Dabur and GCPL. We expect Consumer companies
to continue their high advertisement and promotion spends to support decelerating
volumes.
Asian Paints
Britannia
Colgate
Dabur
Godrej Consumer
GSK Consumer
Hind. Unilever
ITC
Marico
Nestle
Pidilite Inds.
Radico Khaitan
United Spirits
Sector Aggregate
CMP
(INR)
27.12.13
485
915
1,305
172
847
4,444
569
322
221
5,338
290
144
2,537
(INR Million)
Rating
Dec.13
Neutral
Buy
Neutral
Buy
Neutral
Neutral
Sell
Buy
Buy
Neutral
Neutral
Buy
Neutral
35,553
16,277
8,763
18,803
20,634
8,311
72,870
84,833
11,110
23,980
9,758
3,782
23,479
338,154
Sales
Var.
% YoY
17.1
12.0
14.9
15.3
22.0
17.2
9.5
10.0
-4.6
11.4
16.5
16.0
8.0
11.6
Var.
% QoQ
15.3
2.1
-2.2
7.5
5.4
-14.5
5.7
7.9
-0.4
2.1
-1.6
7.4
15.2
6.2
Dec.13
5,724
1,351
1,650
3,196
3,570
604
12,024
32,661
1,611
5,467
1,756
613
2,465
72,692
EBITDA
Var.
% YoY
15.7
72.9
10.0
18.7
27.2
18.6
10.4
14.3
-0.6
10.3
16.0
22.4
0.2
14.0
Var.
% QoQ
19.2
-1.9
12.7
-1.3
20.8
-59.7
10.8
8.2
-2.6
11.1
-4.9
8.6
20.1
7.8
Net Profit
Dec.13
Var.
% YoY
3,638
8.5
927
62.7
1,218
9.7
2,472
17.1
2,353
36.6
775
11.2
9,388
7.5
23,323
13.7
1,138
6.5
3,181
8.2
1,211
16.8
259
40.9
957
18.8
50,840
13.4
Var.
% QoQ
11.3
-3.2
11.2
-1.1
20.7
-47.3
6.3
11.2
7.5
8.9
-3.6
-7.6
1.5
7.0
Gautam Duggad (Gautam.Duggad@MotilalOswal.com)

January 2014
C39

Sens ex Index
MOSL Cons umer Index
114
108
102
Widespread moderation in Staples; downside risks to earnings estimates: FMCG

categories have seen widespread moderation across geographies and income
segments. While consensus expectations of better monsoon led kharif harvest
boosting rural consumption are firmly entrenched, we see threat to the same. FMCG
growth rates did not change materially in the drought year (CY09) even with a lag. We
see downside risks to earnings estimates ahead.
96
Dec-13
Nov-13
Sep-13
Oct-13
90

Sens ex Index
MOSL Cons umer Index
126
118
110
102
Dec-13
Sep-13
Jun-13
Mar-13
Dec-12
94
Flight to defensive trade has played out; stock performance to be function of earnings
growth: Consumer spending has moderated QoQ due to weak macros and higher food
inflation. Lagged impact of GDP slowdown and weak consumer sentiment is likely to
reflect in FMCG topline growth. The Consumer sector has benefited from the flight to
defensive trade, which resulted in sustained re-rating over the last three years.
However, with fundamentals deteriorating at the margin and valuation premium at
peak, we expect the sector to underperform, going forward. In the last four months
since 1QFY14 results, the BSE FMCG index has underperformed the Sensex by 21%.
Stock returns henceforth will be more a function of earnings growth, in our view. We
see limited possibility, if any, of valuation re-rating. We continue to prefer niche
plays with strong pricing power and greater visibility on volume growth and
profitability. ITC, Britannia and Dabur remain our preferred picks in the sector.
3QFY14 volume growth expectations

Quarter Ending
Asian Paints
Colgate (Toothpaste)
Dabur
Godrej Consumer
Soaps
GSK Consumer
Hindustan Unilever
ITC (cigarette)
Marico
Parachute
Hair Oil
Saffola
Radico Khaitan
United Spirits
Jun-11
15.0
14.0
8.6
Sep-11
15.0
15.0
10.0
Dec-11
12.0
15.0
10.8
Mar-12
18.0
14.0
12.4
Jun-12
-2.0
13.0
12.0
Sep-12
5.0
11.0
10.5
Dec-12
13.0
8.0
9.5
Mar-13
3.0
11.0
12.0
Jun-13
10.0
11.0
9.0
Sep-13
10.0
10.0
8.0
Dec-13
10.0
9.0
9.0
9.0
14.0
8.3
8.0
19.0
8.0
9.8
7.5
20.0
12.0
9.1
5.0
17.0
7.0
10.0
5.5
22.0
7.4
9.0
1.5
6.0
4.5
7.0
0.5
2.0
6.0
5.0
1.5
4.0
8.0
6.3
2.5
7.0
7.0
4.0
-1.5
5.0
7.0
5.0
-3.0
3.0
8.0
5.0
-2.0
10.0
32.0
15.0
12.3
15.4
10.0
26.0
11.0
9.7
8.0
13.0
20.0
15.0
10.5
0.7
11.1
17.5
3.3
6.8
5.1
18.0
25.0
12.0
8.2
1.9
9.0
20.0
6.0
7.8
-1.0
6.0
30.0
4.0
6.5
7.0
5.0
24.0
5.0
7.4
3.8
4.0
6.0
4.0
16.0
15.0
15.0
10.0
10.0
10.0
7.6
7.0
7.0
0.2
5.0
4.0
Impact of input price changes

Input
Price Trend (Y-o-Y)
LAB
Up
Soda Ash
Sideways
Palm Fatty Acid
UP
Palm Oil
UP
HDPE
Up
Sugar
Down
Titanium Dioxide
Up
Copra
Up
January 2014
Unit
CMP (INR)
INR/Kg
INR/50Kg
US$/MT
MYR/MT
INR/Kg
INR/Qtl
INR/Kg
INR/Qtl
132.1
1065
721
2565
112
3045
255
7350
12m change %
15.5
-6.6
20.6
22.1
21.0
-11.2
10.9
59.8
Impact
Companies
Negative
Positive
Negative
Negative
Negative
Positive
Negative
Negative
HUL
HUL
HUL, Godrej Consumer
Britannia, Nestle, HUL, ITC
All Companies
Britannia, Nestle, GSK Consumer
Asian Paints
Marico
C40
New launches during 3QFY14

Company
HUL
HUL
HUL
Dabur
Dabur
Emami
Britannia
Brand
Clinic Plus Almond Oil
Sunsilk Natural
Basmati Rice
Vatika Hibiscus Hair Oil
Ratnaprash
Boroplus Facewash
Masala Chaas
PFAD prices up 10% QoQ
Category
Hair Care
Hair Care
Staples
Hair Oils
Health Supplements
Skin Care
Dairy
LAB prices up 16% YoY
PFAD pri ces (INR/MT)
LAB Pri ces (INR/Kg)
54,321
116 114
34,303
95
44,335
79 90 85 86 82
132
Copra prices up ~70% YoY
121
109
Jun09
Sep09
Dec09
Mar10
Jun10
Sep10
Dec10
Mar11
Jun11
Sep11
Dec11
Mar12
Jun12
Sep12
Dec12
Mar13
Jun13
Sep13
Dec13
Dec13
Sep13
Jun13
Mar13
Dec12
Sep12
Jun12
Mar12
Dec11
29,607
Sep11
Jun11
Mar11
Dec10
40,326
119
112
37,811
Sugar prices benign

4,000
Copra pri ce (INR/qui nta l )
9,500
138
7,500
3,600
5,500
3,200
3,500
3,895
2,800
3,080
3,008
Consumer
Asian Paints
Britannia
Colgate
Dabur
Godrej Consumer
GSK Consumer
Hind. Unilever
ITC
Marico
Nestle
Pidilite Inds.
Radico Khaitan
United Spirits
Sector Aggregate
January 2014
485
915
1,305
172
847
4,444
569
322
221
5,338
290
144
2,537
Dec13
Sep13
Jun13
Mar13
Dec12
Source: Companies, MOSL
CMP (INR)
27.12.13
Oct12
Jul12
Apr12
Jan12
Nov11
Aug11
May11
2,400
Feb11
Apr08
Aug08
Dec08
Apr09
Aug09
Dec09
Apr10
Aug10
Dec10
Apr11
Aug11
Dec11
Apr12
Aug12
Dec12
Apr13
Aug13
Dec13
1,500
Rating
EPS (INR)
FY13 FY14E FY15E
P/E (x)
FY13 FY14E FY15E
EV/EBITDA (x)
FY13 FY14E FY15E
RoE (%)
FY13 FY14E FY15E
Neutral
Buy
Neutral
Buy
Neutral
Neutral
Sell
Buy
Buy
Neutral
Neutral
Buy
Neutral
11.6
19.6
36.5
4.4
19.6
98.3
15.2
9.5
6.0
114.1
8.5
6.6
13.9
41.8
46.7
35.7
39.1
43.2
45.2
37.4
33.9
36.8
46.8
34.2
21.8
182.9
39.2
27.9
18.8
24.9
24.0
27.9
35.3
23.9
21.9
22.8
24.5
20.9
11.8
25.0
23.5
33.3
37.5
108.4
35.1
20.9
30.5
70.8
36.1
19.6
71.6
24.9
12.1
3.4
34.8
13.0
31.2
37.4
5.4
23.8
119.1
16.4
10.9
7.3
124.9
9.8
8.0
29.1
16.0
37.0
44.5
6.5
29.4
139.8
18.0
12.7
8.5
150.3
11.9
10.6
53.3
37.4
29.3
34.9
32.1
35.6
37.3
34.8
29.7
30.2
42.8
29.6
18.0
87.1
34.1
30.3
24.8
29.3
26.7
28.8
31.8
31.6
25.4
25.9
35.5
24.4
13.7
47.6
28.7
23.6
19.8
25.3
24.7
24.7
34.7
26.2
19.8
20.4
25.0
19.2
11.2
36.9
23.0
19.6
16.3
20.3
20.9
20.5
27.1
22.9
17.2
16.2
21.3
15.9
9.0
27.2
19.5
31.7
47.8
90.0
35.1
22.5
31.1
61.2
37.5
28.5
58.5
24.3
13.3
5.1
33.6
32.9
45.7
90.7
34.9
23.8
30.8
57.6
40.1
25.6
56.4
24.7
15.6
8.7
35.1
C41
Asian Paints
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
APNT IN
959.2
465 / 8
560 / 376
-8 / -5 / 2
CMP: INR485

Y/E March
Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh.(INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2013 2014E 2015E

109.0 127.9 149.3
16.7 19.4 23.1
11.1 12.4 15.4
11.6 13.0 16.0
12.7 11.7 23.4
34.9 40.8 48.7
33.3 31.7 32.9
44.2 43.4 43.5
41.6 46.3 43.7
41.8
13.9
27.5
1.2
37.4
11.9
23.5
1.4
2016E
173.1
27.0
18.1
18.9
17.9
57.6
32.8
43.4
45.1
30.3
10.0
19.6
1.7
25.7
8.4
16.5
2.1
Neutral
We expect Asian Paints to post 17% revenue growth to INR35.6b in

3QFY14, with another quarter of double-digit domestic decorative
paints volume growth.
We estimate 4% pricing growth during the quarter.
Operating margins would be flat at 16.1%, led by gross margin uptick
of 100bp, as the full impact of price hikes taken in 2QFY14 flows
through the P&L.
International business is likely to report mixed performance, with
continued weakness in the Caribbean being offset to an extent by
Middle East and Asia.
We estimate PAT growth at 8.5%, slightly subdued due to higher base
(30.5% growth in 3QFY13).
The stock trades at 30.3x FY15E EPS of INR16. Neutral.

Comments on volume growth trends and demand scenario.
Outlook on raw material scenario.
International business margins.
Update on Sleek integration and near term strategy.
(INR Million)
Y/E March
Volume Growth (%) *
Net Sales
Change (%)
Raw Material/PM
Gross Profit
Gross Margin (%)
Operating Expenses
% of Sales
EBITDA
Margin (%)
Change (%)
Interest
Depreciation
Other Income
PBT
Tax
PAT before Minority
Minority Interest
Adjusted PAT
Change (%)
E: MOSL Estimates
January 2014
FY13
1Q
-2.0
25,373
12.4
14,838
10,535
41.5
6,156
24.3
4,379
17.3
12.7
109
334
326
4,262
1,273
29.9
2,989
106
2,884
9.5
2Q
5.0
26,124
16.4
15,714
10,410
39.8
6,797
26.0
3,613
13.8
14.0
122
357
421
3,555
1,041
29.3
2,514
122
2,392
14.6
3Q
13.0
30,371
18.7
18,133
12,238
40.3
7,292
24.0
4,947
16.3
24.6
79
366
467
4,969
1,466
29.5
3,503
151
3,352
30.5
FY14
4Q
2.0
27,137
6.9
15,523
11,614
42.8
7,878
29.0
3,735
13.8
-0.5
58
489
577
3,766
1,178
31.3
2,589
78
2,511
-3.2
1Q
10.0
28,185
11.1
16,138
12,048
42.7
7,627
27.1
4,421
15.7
1.0
86
599
503
4,239
1,390
32.8
2,850
98
2,752
-4.6
2Q
12.0
30,841
18.1
17,665
13,176
42.7
8,374
27.2
4,802
15.6
32.9
120
603
760
4,839
1,449
29.9
3,390
122
3,268
36.7
3QE
10.0
35,553
17.1
20,799
14,755
41.5
9,031
25.4
5,724
16.1
15.7
140
520
514
5,578
1,785
32.0
3,793
155
3,638
8.5
4QE
10.0
33,311
22.8
19,211
14,100
42.3
9,611
28.9
4,489
13.5
20.2
135
336
398
4,416
1,470
33.3
2,946
166
2,780
10.7
FY13
FY14E
8.0
109,006
13.6
64,209
44,796
41.1
28,123
25.8
16,673
15.3
12.8
367
1,546
1,791
16,552
4,957
29.9
11,595
456
11,139
12.7
8.0
127,890
17.3
73,812
54,078
42.3
34,642
27.1
19,436
15.2
16.6
576
2,058
2,170
18,972
6,062
32.0
12,910
501
12,409
11.4
C42
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
BRIT IN
119.5
109 / 2
973 / 463
1 / 27 / 76

Y/E March
Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh.(INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2013 2014E 2015E

55.6 63.3 72.7
3.2
5.3
6.4
2.3
3.7
4.4
19.6 31.2 37.0
39.3 59.6 18.3
52.2 65.3 80.8
37.5 47.8 45.7
60.4 71.2 64.8
52.9 50.0 50.0
46.7
17.5
33.4
1.1
29.3
14.0
19.8
1.7
24.8
11.3
16.3
2.0
2016E
83.1
7.5
5.2
43.9
18.7
99.2
44.2
69.1
50.0
20.9
9.2
13.6
2.4
CMP: INR915
Buy
We expect Britannia to post sales of INR16.2b, up ~12% YoY. Volume

growth, though on low base, is likely to remain in mid single digits, as
the discretionary Processed Foods category remains under pressure.
Nonetheless, Biscuits are relatively resilient, with QoQ growth
moderating by ~2%.
We estimate 290bp YoY EBITDA margin expansion to 8.3%, driven by
better gross margins and cost savings in overheads.
The raw material environment for Britannia is stable. Its focus on
premiumization coupled with rationalization of regional low margin
SKUs should augur well for near-term operating margins.
Competitive dynamics in Biscuits have remained stable over the last
3-4 quarters.
The stock trades at 24.8x FY15E EPS. Buy.

Volume growth in Biscuits.
Outlook on raw material scenario.
Sustainability of operating margin expansion, the key driver of stock
outperformance in CY13.
(INR Million)
Y/E March
Net Sales
YoY Change (%)
COGS
Gross Profit
Margins (%)
Other Exp
% of Sales
Total Exp
EBITDA
Margins (%)
YoY Growth (%)
Depreciation
Interest
Other Income
PBT
Tax
Rate (%)
Adjusted PAT
YoY Change (%)
E: MOSL Estimates
January 2014
FY13
1Q
12,216
10.8
7,575
4,642
38.0
3,991
32.7
11,566
651
5.3
37.6
130
95
179
605
170
28.1
435
4.0
2Q
14,028
8.7
9,042
4,986
35.5
4,379
31.2
13,422
606
4.3
-17.6
143
88
266
642
186
29.0
456
-4.8
3Q
14,533
16.5
9,192
5,341
36.8
4,559
31.4
13,752
782
5.4
-4.2
149
91
257
797
228
28.6
570
5.3
FY14
4Q
14,866
13.5
9,369
5,497
37.0
4,337
29.2
13,706
1,161
7.8
70.6
149
104
369
1,277
399
31.2
878
65.7
1Q
14,034
14.9
8,374
5,660
40.3
4,492
32.0
12,867
1,168
8.3
79.5
153
34
267
1,249
386
30.9
863
98.6
2Q
15,945
13.7
9,666
6,278
39.4
4,902
30.7
14,568
1,377
8.6
127.0
157
11
199
1,408
451
32.0
957
109.8
3QE
16,277
12.0
10,092
6,185
38.0
4,834
29.7
14,926
1,351
8.3
72.9
164
24
180
1,343
416
31.0
927
62.7
4QE
16,996
14.3
10,362
6,634
39.0
5,196
30.6
15,557
1,438
8.5
23.9
163
27
161
1,410
424
30.1
986
12.2
FY13
FY14E
55,644
12.4
35,184
20,459
36.8
17,255
31.0
52,440
3,204
5.8
18.5
571
377
1,066
3,322
983
29.6
2,339
18.9
63,252
13.7
38,494
24,758
39.1
19,424
30.7
57,918
5,334
8.4
66.5
637
96
808
5,409
1,677
31.0
3,732
59.6
C43
Colgate Palmolive
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
CLGT IN
136.0
177 / 3
1,580 / 1,190
0 / -15 / -24
CMP: INR1,305

Y/E March
Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh.(INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2013 2014E 2015E

30.8 35.4 41.0
6.6
6.8
8.4
5.0
5.1
6.0
36.5 37.4 44.5
11.3
2.3 18.9
38.1 45.0 53.1
108.4 90.0 90.7
108.5 90.1 90.7
70.0 70.0 70.0
35.7
34.3
26.1
2.0
34.9
29.0
25.3
2.0
29.4
24.6
20.3
2.4
2016E
47.1
10.0
7.1
51.9
16.8
62.7
89.7
89.7
70.0
25.1
20.8
17.0
2.8
Neutral
We expect sales growth of 15% YoY to INR8.76b; Toothpaste volume

growth is estimated at 9%-10%, commendable given the widespread
moderation in other FMCG categories.
We expect 80bp contraction in EBITDA margin to 18.3% on account of
higher ad spends to defend market share post P&Gs launch. We note
that P&Gs launch has not done any harm to Colgates share, as yet.
However, we expect P&G to take counter measures in early CY14.
Colgates latest innovation, Visible White, has received good response,
especially in modern trade, according to the management.
Despite expensive valuations on a depressed earnings base, stock
volatility post P&Gs entry in the Toothpaste category provides a good
long-term entry opportunity, in our view.
The stock trades at 29.4x FY15E EPS. Neutral.

Volume growth in toothpaste.
Ad spends and competitive intensity in Toothpastes.
(INR Million)
Y/E March
Toothpaste Volume Gr %
Net Sales
YoY Change (%)
COGS
Gross Profit
Gross Margin (%)
Other operating Expenses
% to sales
Other operating Income
EBITDA
Margins (%)
YoY Growth (%)
Depreciation
Interest
Financial other Income
PBT
Tax
Rate (%)
Adj PAT
YoY Change (%)
E: MOSL Estimates
January 2014
FY13
1Q
11.0
7,361
20.5
2,997
4,364
59.3
2,939
39.9
200
1,625
21.5
21.7
105
0
112
1,632
457
28.0
1,174
16.9
2Q
11.0
7,738
17.7
3,238
4,499
58.1
2,928
37.8
187
1,758
22.2
28.2
106
0
149
1,801
350
19.4
1,451
34.9
3Q
8.0
7,627
13.9
3,045
4,582
60.1
3,294
43.2
211
1,499
19.1
2.4
113
0
117
1,504
393
26.1
1,111
-3.9
FY14
4Q
11.0
8,116
18.3
3,222
4,894
60.3
3,407
42.0
200
1,687
20.3
-0.7
113
0
121
1,695
463
27.3
1,232
-5.8
1Q
11.0
8,446
14.7
3,283
5,164
61.1
3,662
43.4
151
1,653
19.2
1.7
117
0
171
1,707
409
24.0
1,297
10.5
2Q
9.0
8,957
15.8
3,621
5,336
59.6
3,923
43.8
50
1,463
16.2
-16.8
117
0
130
1,477
382
25.8
1,095
-24.5
3QE
10.0
8,763
14.9
3,505
5,258
60.0
3,838
43.8
230
1,650
18.3
10.0
127
1
152
1,673
455
27.2
1,218
9.7
4QE
9.0
9,269
14.2
3,707
5,562
60.0
3,902
42.1
352
2,012
20.9
19.3
124
4
147
2,031
558
27.5
1,473
19.6
FY13
FY14E
10.3
30,841
17.5
12,502
18,339
59.5
12,568
40.8
797
6,568
20.8
13.5
437
0
499
6,630
1,663
25.1
4,968
11.3
10.0
35,435
14.9
14,116
21,319
60.2
15,324
43.2
783
6,778
18.7
381.4
485
5
600
6,888
1,804
26.2
5,084
2.3
C44
Dabur India
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
DABUR IN
1,743.8
301 / 5
185 / 124
0 / 0 / 25
2013 2014E 2015E

61.5 71.0 82.8
10.0 12.1 14.1
7.7
9.3 11.3
4.4
5.4
6.5
19.3 21.6 20.5
12.6 15.3 18.5
35.1 35.1 34.9
38.1 39.6 39.3
40.2 42.7 42.7
39.0
13.6
30.1
1.0
32.1
11.2
24.6
1.3

Y/E March
Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh.(INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
CMP: INR172
2016E
96.0
16.6
13.4
7.7
18.9
22.4
34.4
41.0
42.7
26.6
9.3
20.8
1.6
22.4
7.7
17.4
1.9
Buy
We expect sales growth of 15.3% to INR18.8b, led by ~10% domestic

organic volume growth.
Gap between urban and rural growth rates should narrow for Dabur,
in our view.
We expect margin expansion of 50bp to 17%, led by operating leverage
in international business. While currency dynamics had brought in
additional risks, price hikes were implemented to pass on input cost
inflation.
We expect PAT growth of 17% to INR2.47b.
The stock trades at 26.6x FY15E EPS of INR6.5. Buy.

Domestic volume growth and outlook on rural demand.
Margin guidance for FY15.
Progress on international business margin improvement.
(INR Million)
Y/E March
Volume Growth (%)
Net Sales
YoY Change (%)
Total Exp
EBITDA
Margins (%)
YoY Growth (%)
Depreciation
Interest
Other Income
PBT
Tax
Rate (%)
Minority Interest
Adjusted PAT
YoY Change (%)
E: MOSL Estimates
January 2014
FY13
1Q
12.0
14,620
21.4
12,576
2,044
14.0
14.9
267
213
356
1,921
378
19.7
2
1,541
20.6
2Q
10.5
15,226
20.6
12,674
2,552
16.8
5.5
196
149
292
2,500
464
18.6
13
2,023
16.4
3Q
9.5
16,307
12.3
13,615
2,693
16.5
19.0
305
78
273
2,582
478
18.5
-6
2,111
22.2
FY14
4Q
12.0
15,311
12.3
12,708
2,603
17.0
16.4
282
150
355
2,527
507
20.1
0
2,020
18.4
1Q
9.0
16,511
12.9
14,156
2,355
14.3
15.2
287
133
420
2,355
484
20.6
10
1,860
20.7
2Q
10.7
17,488
14.9
14,250
3,238
18.5
26.9
236
200
280
3,083
579
18.8
6
2,498
23.5
3QE
10.0
18,803
15.3
15,606
3,196
17.0
18.7
314
80
319
3,121
655
21.0
-6
2,472
17.1
4QE
12.0
18,152
18.6
14,852
3,300
18.2
26.8
343
112
438
3,283
772
23.5
1
2,510
24.3
FY13
FY14E
10.0
61,464
16.3
51,463
10,001
16.3
15.2
1,124
589
1,242
9,530
1,826
19.2
24
7,680
19.3
10.0
70,954
15.4
58,864
12,090
17.0
4.7
1,180
525
1,457
11,842
2,490
21.0
11
9,341
21.6
C45
GlaxoSmithKline Consumer
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
SKB IN
42.1
187 / 3
6,020 / 3,482
-3 / -19 / 7

Y/E December
Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh.(INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2012 2013E 2014E

30.8 36.0 41.6
4.6
5.0
6.3
4.1
5.0
5.9
98.3 119.1 139.8
16.4 21.1 17.4
322.1 382.7 453.8
30.5 31.1 30.8
54.6 54.2 53.6
49.1 49.1 49.1
42.5
13.8
29.0
1.0
37.3
11.6
34.8
1.1
31.8
9.8
27.1
1.3
2015E
48.2
7.5
6.9
164.9
18.0
537.7
30.7
45.5
49.1
CMP: INR4,444
Neutral
We expect SKB to report net sales of INR8.3b, up 17% YoY, led by 8%

volume growth.
Healthy performance in both the core brands, Boost and Horlicks, driven
by introduction of new variants and low unit price (LUP) strategy should
aid 3Q performance.
We estimate EBITDA margin at 7.3%, flat QoQ.
Higher tax rates (up 220bp YoY to 34.9%) should result in relatively
subdued 11% growth in PAT.
The stock trades at 31.8x CY14E EPS. Neutral.

MFD volume growth.
Outlook on market growth and raw material environment.
26.9
8.3
22.3
1.6
(INR Million)
Y/E December
MFD Volume Growth (%)
Net Sales
YoY Change (%)
Total Exp
EBITDA
Margins (%)
YoY Change (%)
Depreciation
Interest
Other Income
PBT
Tax
Rate (%)
Adj PAT
YoY Change (%)
E: MOSL Estimates
January 2014
CY12
1Q
7.0
8,130
14.5
6,514
1,617
20.3
11.3
119
12
479
1,964
645
32.8
1,320
19.3
2Q
7.4
7,297
11.7
6,191
1,107
15.2
12.3
86
8
572
1,585
519
32.8
1,066
29.3
3Q
6.0
8,275
14.9
6,871
1,405
17.0
19.1
77
3
578
1,903
617
32.4
1,286
24.8
CY13
4Q
6.0
7,091
17.8
6,581
510
7.2
-17.3
79
1
606
1,035
338
32.7
697
17.9
1Q
8.0
9,399
15.6
7,691
1,708
18.2
5.6
107
1
680
2,279
715
31.4
1,564
18.5
2Q
7.0
8,529
16.9
7,343
1,187
13.9
7.2
122
2
759
1,822
623
34.2
1,200
12.5
3Q
10.0
9,719
17.4
8,221
1,499
15.4
6.7
116
1
855
2,237
768
34.3
1,469
14.3
4QE
8.0
8,311
17.2
7,707
604
7.3
18.6
232
41
859
1,190
415
34.9
775
11.2
CY12
CY13E
7.5
35,959
16.8
30,961
4,998
13.9
7.8
577
45
3,153
7,528
2,520
33.5
5,008
14.7
7.5
10,855
15.5
8,901
1,954
18.0
14.4
120
1
902
2,735
875
32.0
1,860
18.9
C46

Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
GCPL IN
340.3
288 / 5
977 / 693
-5 / -5 / 7
2013 2014E 2015E

63.9 78.3 91.5
10.0 12.2 14.6
6.7
8.1 10.0
19.6 23.8 29.4
26.7 21.2 23.7
93.7 105.8 123.5
20.9 22.5 23.8
24.8 27.6 29.5
40.8 42.1 34.0
43.2
9.0
30.2
0.9
35.6
8.0
24.7
1.2

Y/E March
Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh.(INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
CMP: INR847
2016E
107.2
17.3
12.2
35.9
22.2
147.7
24.3
30.5
27.8
28.8
6.9
20.5
1.2
23.6
5.7
17.0
1.2
Neutral
We expect GCPL to post 22% revenue growth to INR20.6b in 3QFY14,

led by healthy performance in the domestic Household Insecticides
and Hair Colors segments. We expect Soaps business to post lackluster
(low single digit) volume growth.
Household Insecticide growth would be driven by recent innovations
and activations; nonetheless, growth rates should moderate from
high 20s to low 20s, in our view.
We expect continued strong performance from Indonesia (Megasari).
Price hikes taken in 2Q post the implementation of minimum wage
hikes should bring margin stability 3QFY14 onwards.
Ad spends should stabilize, as innovation intensity has come off. We
estimate operating margin expansion of 70bp to 17.3%. Recent uptick
in palm oil prices will reflect in margins, unless neutralized by price
hikes. Driven by low base, we estimate PAT growth of 36.6% for the
quarter.
The stock trades at 28.8x FY15E EPS of INR29.4. Neutral.

Volume growth trends in Soaps; comments on growth outlook for
Household Insecticide portfolio.
International business outlook, given the currency volatility.
(INR Million)
Y/E March
Net Sales
YoY Change (%)
EBITDA
Margins (%)
YoY Growth (%)
Depreciation
Interest
Other Income
Forex gain / (loss)
PBT
Tax
Rate (%)
Minority Int
Adj PAT
YoY Change (%)
E: MOSL Estimates
January 2014
FY13
1Q
13,886
39.2
1,988
14.3
39.3
199
164
181
-176
1,630
192
11.8
213
1,225
22.2
2Q
15,953
34.5
2,440
15.3
18.0
206
200
194
-76
2,151
476
22.1
83
1,593
24.8
3Q
16,913
25.8
2,806
16.6
5.8
205
189
188
-27
2,574
674
26.2
178
1,722
3.1
FY14
4Q
17,155
29.7
2,752
16.0
11.5
160
222
281
-48
2,602
531
20.4
19
2,052
22.4
1Q
17,203
23.9
2,208
12.8
11.0
221
240
178
-154
1,769
338
19.1
126
1,305
6.5
2Q
19,574
22.7
2,954
15.1
21.1
244
257
172
-63
2,562
470
18.3
142
1,950
22.4
3QE
20,634
22.0
3,570
17.3
27.2
220
194
188
0
3,344
813
24.3
178
2,353
36.6
4QE
20,916
21.9
3,424
16.4
24.4
210
111
342
218
3,662
896
24.5
288
2,478
20.7
FY13
FY14E
63,908
31.7
9,985
15.6
16.0
770
775
844
-328
8,957
1,792
20.0
493
6,672
26.7
78,327
22.6
12,156
15.5
21.7
895
803
880
0
11,337
2,517
22.2
735
8,086
21.2
C47
Hindustan Unilever
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
HUVR IN
2,162.6
1,230 / 20
725 / 432
-6 / -16 / 0
2013 2014E 2015E

252.1 275.0 313.3
40.0 44.5 50.3
32.9 35.3 38.9
15.2 16.4 18.0
26.7
7.6 10.0
21.5 26.7 31.2
70.8 61.2 57.6
94.2 81.9 79.1
55.9 58.1 64.0
37.4
26.5
29.4
1.5
34.8
21.3
26.2
1.7

Y/E March
Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh.(INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
CMP: INR569
31.6
18.2
22.9
2.0
2016E
356.4
58.0
43.7
20.2
12.5
36.3
55.8
78.8
64.3
28.1
15.7
19.7
2.3
Sell
We expect HUVR to post 4% volume growth and 9.5% revenue growth.

Consumer demand has not improved sequentially. Delayed winter is
likely to impact Personal Product (PP) revenues, as HUVR had built up
trade inventory in Fair & Lovely (F&L) in 2QFY14.
The company has restrained promotions in Soaps & Detergents to
combat input cost inflation and currency impact. However, pricing
anniversary in Beverages will offset realization growth.
Operating margins are likely to stay flat at 16.5%. Elevated competitive
intensity in Oral Care would keep ASP spends high. However,
competitive intensity in Detergents is sequentially benign.
We expect PP margins to contract owing to mix deterioration (lower
growth in Skin Care), higher ad spends in Oral Care, and the high base
effect (up 159bp to 28.3% in 3QFY13).
We expect EBITDA and PAT to grow at a subdued 10% and 7.5% YoY,
respectively. The stock trades at 31.6x FY15E EPS of INR18. Sell.

Comments on volume growth and consumer demand environment.
Competitive intensity and comments on F&L/Skin Care business.
(INR Million)
Y/E March
Volume Growth (%)
S&D EBIT Margin (%)
PP EBIT Margin (%)
Net Sales (incl service inc)
YoY Change (%)
COGS
Gross Profit
Margin (%)
Operating Exp
% to sales
EBITDA
YoY Change (%)
Margins (%)
Depreciation
Interest
Other Income
PBT
Tax
Rate (%)
Adjusted PAT
YoY Change (%)
E: MOSL Estimates
January 2014
FY13
1Q
9.0
12.2
25.8
63,788
14.1
33,677
30,110
47.2
20,446
32.1
9,664
28.1
15.2
576
53
2,186
11,221
2,676
23.8
8,546
47.7
2Q
7.0
14.3
24.2
63,108
12.5
32,695
30,414
48.2
20,646
32.7
9,767
18.2
15.5
577
63
1,488
10,615
2,556
24.1
8,059
22.9
3Q
5.0
12.4
28.3
66,548
11.7
34,191
32,357
48.6
21,470
32.3
10,888
12.2
16.4
593
75
1,337
11,557
2,827
24.5
8,730
14.5
FY14
4Q
6.0
12.0
25.8
64,658
12.1
34,326
30,333
46.9
20,615
31.9
9,718
16.6
15.0
614
60
1,058
10,102
2,293
22.7
7,808
17.7
1Q
4.0
13.4
26.8
68,090
6.7
34,828
33,262
48.9
22,406
32.9
10,856
12.3
15.9
664
62
1,768
11,897
3,046
25.6
8,851
3.6
2Q
5.0
14.3
24.2
68,926
9.2
34,699
34,227
49.7
23,374
33.9
10,853
11.1
15.7
639
63
1,510
11,661
2,831
24.3
8,830
9.6
3QE
7.0
12.4
28.3
72,870
9.5
37,164
35,706
49.0
23,683
32.5
12,024
10.4
16.5
664
45
1,203
12,518
3,129
25.0
9,388
7.5
4QE
8.0
12.0
25.8
70,987
9.8
38,152
32,835
46.3
22,117
31.2
10,718
10.3
15.1
684
-20
1,018
11,072
2,795
25.2
8,277
6.0
FY13
FY14E
8.0
12.5
25.3
258,102
16.7
134,888
123,214
47.7
83,176
32.2
40,037
21.6
15.5
2,360
251
6,069
43,495
11,944
27.5
33,143
24.6
6.5
12.5
25.3
280,875
8.8
144,843
136,031
48.4
91,581
32.6
44,451
11.0
15.8
2,651
150
5,498
47,148
11,801
25.0
35,347
6.7
C48
ITC
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
ITC IN
7,926.5
2,553 / 41
380 / 272
-1 / -13 / 2

Y/E March
Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh.(INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2013 2014E 2015E

296.1 327.2 375.1
106.3 122.6 139.9
61.6 74.2 84.9
9.5 10.9 12.7
20.4 14.4 17.0
26.3 28.9 31.7
36.1 37.5 40.1
50.2 53.5 56.5
76.1 76.1 78.4
33.9
12.2
22.4
1.9
29.7
11.1
19.3
2.2
25.4
10.2
16.7
2.6
2016E
430.3
159.9
99.3
14.6
15.0
34.3
42.6
60.2
81.9
22.1
9.4
14.5
3.2
CMP: INR322
Buy
We expect ITC to post ~2% decline in Cigarette volumes. While a

recovery in Cigarettes is underway vis--vis 1HFY14, we expect it to
be gradual.
Two consecutive years of 15%+ price hikes are impacting the RSFT
(regular size filter tip) segment, while the 64mm segment continues
to grow and gain traction (now 8% of volumes). ITC has recently taken
10-12% price hikes in mass RSFT brands (Wills, Gold Flake, etc).
We expect net sales to grow 10% to INR84.8b, which reflects
moderation across segments.
We estimate 140bp margin expansion to 38.5%, led by Cigarettes and
improving profitability in FMCG - Others.
Cigarette margins would be supported by ~19% average price hike
implemented post budget.
We expect FMCG - Others to post 15% revenue growth.
Higher tax rate should result in 13.7% PAT growth to INR23.2b.
Cigarette volume trend post price hikes and update on 64mm
segment.
Demand outlook for FMCG - Others.
Sustenance of profitability in FMCG - Others portfolio.
Signs of pick-up in Hotels business.
INR Million
Y/E March
Cigarette Vol Gr (%)
Cigarette-net EBIT Margin (%)
Non Cigarette FMCG Loss
Net Sales
YoY Change (%)
Total Exp
EBITDA
Growth (%)
Margins (%)
Depreciation
Interest
Other Income
PBT
Tax
Rate (%)
Adj PAT
YoY Change (%)
E: MOSL Estimates
January 2014
FY13
1Q
1.5
57.5
-388
67,065
14.6
43,313
23,752
21.3
35.4
1,948
138
1,699
23,366
7,344
31.4
16,021
20.2
2Q
0.5
61.4
-303
72,263
18.6
45,371
26,893
21.0
37.2
1,889
233
1,840
26,611
8,247
31.0
18,364
21.3
3Q
1.5
61.1
-240
77,121
22.8
48,543
28,578
20.0
37.1
2,052
252
3,298
29,572
9,053
30.6
20,519
20.6
FY14
4Q
2.5
58.3
119
82,574
18.8
55,511
27,063
18.9
32.8
2,067
243
2,540
27,293
8,014
29.4
19,280
19.4
1Q
-2.0
63.4
-189
74,107
10.5
46,194
27,913
17.5
37.7
2,153
170
2,032
27,622
8,709
31.5
18,913
18.1
2Q
-4.0
64.8
-127
78,625
8.8
48,446
30,179
12.2
38.4
2,209
21
2,462
30,412
9,436
31.0
20,976
14.2
3QE
-2.0
62.5
100
84,833
10.0
52,172
32,661
14.3
38.5
2,257
214
3,958
34,147
10,825
31.7
23,323
13.7
4QE
-0.5
60.0
150
93,751
13.5
61,927
31,824
17.6
33.9
2,186
376
3,175
32,437
10,772
33.2
21,665
12.4
FY13
FY14E
1.5
59.6
-813
299,013
18.9
192,738
106,275
20.1
35.5
7,956
865
9,387
106,842
32,658
30.6
74,184
20.4
1.5
60.3
810
331,316
10.8
208,739
122,577
15.3
37.0
8,805
780
11,627
124,618
39,741
31.9
84,877
14.4
C49
Marico
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
MRCO IN
643.8
142 / 2
251 / 191
2 / -6 / -10
CMP: INR221

Y/E March
Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh.(INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2013 2014E 2015E

45.8 46.7 53.5
6.1
6.9
8.4
3.9
4.7
5.5
6.0
7.3
8.5
15.6 21.8 16.5
30.5 25.7 33.3
19.6 28.5 25.6
29.0 38.1 37.4
12.5 10.9
9.4
36.8
7.2
23.7
0.3
30.2
8.6
20.4
0.4
25.9
6.6
16.2
0.4
2016E
62.1
9.9
6.4
10.0
17.4
40.7
24.6
36.6
22.0
22.1
5.4
13.4
1.0
Buy
We expect sales to decline 4.5% YoY to INR11.1b, as the base quarter

had Kaya financials. On like-to-like basis, sales growth would be 3.5%
(led by 3-4% domestic volume growth). Volume growth would be
subdued; the demand environment has deteriorated for Marico vis-vis 2QFY14 across categories. International business should benefit
from currency tailwinds, but on constant currency basis, growth is
likely to moderate.
Copra prices are up ~65% YoY and ~33% QoQ. Marico has implemented
price hikes of 5-7% in its Parachute portfolio. Sunflower and Kardi Oil
prices are benign (down on YoY basis).
We expect 250bp gross margin contraction. However, EBITDA margin
would be flattish.
We expect PAT growth of 15.7% YoY, aided by 250bp lower tax rate.

Comments on volume growth trends in key categories.
Paras brands performance.
Margin expansion international business.
(INR Million)
Y/E March
Domestic organic vol gr (%)
Net Sales
YoY Change (%)
COGS
Gross Profit
Gross margin (%)
Other Expenditure
% to Sales
EBITDA
Margins (%)
YoY Change (%)
Depreciation
Interest
Other Income
PBT
Tax
Rate (%)
Minority Interest
Adjusted PAT
YoY Change (%)
E: MOSL Estimates
January 2014
FY13
1Q
14.0
12,672
21.7
6,469
6,203
48.9
4,364
34.4
1,839
14.5
47.0
193
135
150
1,660
403
24.2
0
1,258
48.0
2Q
10.0
11,559
19.5
5,639
5,920
51.2
4,435
38.4
1,486
12.9
28.6
225
180
101
1,182
293
24.8
30
859
9.7
3Q
9.0
11,640
10.9
5,587
6,053
52.0
4,433
38.1
1,620
13.9
31.1
195
146
127
1,406
360
25.6
-23
1,068
21.2
FY14
4Q
8.0
9,973
9.7
4,410
5,563
55.8
4,373
43.9
1,189
11.9
9.3
253
113
115
938
189
20.1
26
723
1.2
1Q
10.0
13,797
8.9
6,710
7,086
51.4
4,816
34.9
2,270
16.5
23.5
206
121
167
2,109
512
24.3
44
1,553
23.5
2Q
4.0
11,154
-3.5
5,594
5,560
49.8
3,905
35.0
1,655
14.8
11.4
168
104
158
1,541
431
27.9
52
1,059
23.3
3QE
5.0
11,110
-4.6
5,555
5,555
50.0
3,944
35.5
1,611
14.5
-0.6
176
146
159
1,448
333
23.0
-23
1,138
6.5
4QE
6.0
10,619
6.5
5,721
4,897
46.1
3,536
33.3
1,362
12.8
14.5
230
126
196
1,201
242
20.1
3
956
32.3
FY13
FY14E
11.0
45,843
15.5
22,105
23,738
51.8
17,605
38.4
6,134
13.4
29.7
866
575
494
5,186
1,245
24.0
79
3,862
21.1
6.0
46,679
1.8
23,581
23,098
49.5
16,201
34.7
6,897
14.8
12.4
780
497
680
6,300
1,518
24.1
-76
4,706
21.8
C50
Nestle India
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
NEST IN
96.4
515 / 8
5,865 / 4,410
-6 / -4 / -2
2012 2013E 2014E

83.0 92.1 107.4
18.3 20.6 23.8
11.0 12.0 14.5
114.1 124.9 150.3
9.9
9.4 20.4
186.5 240.1 293.1
71.6 58.5 56.4
59.6 56.3 61.7
49.4 54.1 62.0
46.8
28.6
28.4
0.9
42.8
22.2
25.0
1.1

Y/E December
Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh.(INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
CMP: INR5,338
35.5
18.2
21.3
1.5
2015E
124.4
27.7
17.3
179.5
19.4
345.8
56.2
65.9
68.1
29.7
15.4
18.1
2.3
Neutral
We expect Nestle India to report net sales of INR24b, up 11.4% YoY;

growth would be price-led. Our channel checks indicate that volume
growth in the companys core categories is yet to pick up. Continued
moderation in discretionary foods consumption is a key headwind.
EBITDA margin is likely to be flat at 22.8%, aided by carryover impact
of earlier price hikes.
PAT would grow 8.2% to INR3.2b.
Lower base of CY13 can provide a good platform for sales recovery in
CY14. However, underlying recovery in its volume growth will be a
function of revival in consumer sentiment.
The stock trades at 35.5x CY14E EPS. Neutral.

Volume growth.
Management commentary around portfolio rationalization.
New launches from the recently commissioned capacity is another
important monitorable from a medium term perspective.
(INR Million)
Y/E December
Net Sales
YoY Change (%)
COGS
Gross Profit
Margin (%)
Operating Exp
EBITDA
Margins (%)
YoY Growth (%)
Depreciation
Interest
Other income
PBT
Tax
Rate (%)
Adjusted PAT
YoY Change (%)
E: MOSL Estimates
January 2014
CY12
1Q
20,475
13.1
9,384
11,091
54.2
6,519
4,572
22.3
18.7
528
23
136
4,158
1,272
30.6
2,886
9.9
2Q
19,866
12.7
9,024
10,842
54.6
6,554
4,288
21.6
24.5
673
220
113
3,507
1,085
30.9
2,423
10.3
3Q
21,156
7.8
9,712
11,444
54.1
7,010
4,434
21.0
8.1
735
44
173
3,827
1,197
31.3
2,630
-2.0
4Q
21,526
10.1
9,644
11,882
55.2
6,926
4,957
23.0
20.1
835
99
211
4,233
1,293
30.5
2,940
9.7
1Q
22,481
9.8
10,158
12,323
54.8
6,997
5,326
23.7
16.5
821
79
200
4,626
1,512
32.7
3,114
7.9
CY13
2Q
3Q
22,132
23,483
11.4
11.0
10,004
10,568
12,128
12,915
54.8
55.0
7,248
7,992
4,880
4,923
22.0
21.0
13.8
11.0
887
835
85
100
249
348
4,157
4,336
1,334
1,416
32.1
32.7
2,823
2,920
16.5
11.0
4QE
23,980
11.4
10,941
13,039
54.4
7,572
5,467
22.8
10.3
898
86
232
4,716
1,534
32.5
3,181
8.2
CY12
CY13E
83,023
10.8
37,764
45,259
54.5
27,008
18,251
22.0
18.9
2,772
387
633
15,726
4,847
30.8
10,879
8.7
92,076
10.9
41,671
50,406
54.7
29,809
20,596
22.4
12.8
3,440
350
1,029
17,835
5,796
32.5
12,038
10.7
C51
Pidilite Industries
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
PIDI IN
512.6
149 / 2
314 / 211
-6 / -3 / 24
2013 2014E 2015E

33.3 38.6 45.8
6.1
7.3
8.6
4.4
5.1
6.2
8.5
9.8 11.9
21.0 15.7 20.9
34.0 40.3 48.0
24.9 24.3 24.7
31.8 33.0 33.3
35.5 35.8 35.5
34.2
8.5
23.7
0.9
29.6
7.2
19.7
1.0

Y/E March
Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh.(INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
CMP: INR290
24.4
6.0
16.3
1.2
2016E
53.0
10.1
7.4
14.1
18.5
57.8
24.3
32.9
30.0
20.6
5.0
13.6
1.2
Neutral
We expect Pidilite to post 16.5% revenue growth, led by double-digit

volume growth in Consumer and Bazaar segments. Industrial
Chemicals should benefit from INR depreciation (25% of revenues
from exports).
EBITDA margin is likely to remain flat YoY at 18%.
PAT would grow 16.8% YoY to INR1.21b.
Continued double-digit volume growth in a discretionary category,
especially in the current weak macro environment, underscores
Pidilites strong brand equity.

Volume growth in Fevicol.
Outlook on Industrial and Construction Chemicals.
Progress on Elastomer project, if any.
(INR Million)
Y/E March
Sales
Change (%)
Gross Profit
Gross Margin (%)
Operating Expenses
% of sales
EBITDA
EBITDA Margin (%)
Change (%)
Depreciation
Interest
Other Income
PBT
Tax
Adj PAT
Change (%)
E: MOSL Estimates
January 2014
FY13
1Q
9,125
18.8
4,087
44.8
2,180
23.9
1,907
20.9
25.4
124
91
139
1,831
498
27.2
1,333
23.6
2Q
8,209
16.0
3,680
44.8
2,212
26.9
1,468
17.9
14.5
128
18
121
1,443
325
22.5
1,117
29.3
3Q
8,376
21.6
3,770
45.0
2,257
26.9
1,514
18.1
27.3
141
86
164
1,450
413
28.5
1,037
19.9
FY14
4Q
7,608
16.7
3,645
47.9
2,397
31.5
1,248
16.4
30.2
139
36
235
1,307
352
26.9
956
27.6
1Q
10,148
11.2
4,681
46.1
2,441
24.1
2,240
22.1
17.5
153
36
90
2,140
595
27.8
1,546
16.0
2Q
9,912
20.7
4,426
44.6
2,580
26.0
1,846
18.6
25.8
168
38
87
1,727
470
27.2
1,257
12.5
3QE
9,758
16.5
4,381
44.9
2,625
26.9
1,756
18.0
16.0
167
82
186
1,694
483
28.5
1,211
16.8
4QE
8,813
15.8
4,082
46.3
2,639
29.9
1,443
16.4
15.6
146
73
385
1,609
481
29.9
1,128
18.0
FY13
FY14E
33,317
18.3
15,182
45.6
9,046
27.2
6,136
18.4
24.0
532
232
659
6,031
1,588
26.3
4,443
24.9
38,631
16.0
17,569
45.5
10,284
26.6
7,285
18.9
18.7
634
229
748
7,170
2,028
28.3
5,142
15.7
C52
Radico Khaitan
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
RDCK IN
132.6
19 / 0
161 / 89
6 / 33 / -13
2013 2014E 2015E

12.6 14.6 17.0
2.0
2.3
2.8
0.9
1.1
1.4
6.6
8.0 10.6
9.9 20.9 32.2
57.0 63.6 72.3
12.1 13.3 15.6
10.3 11.3 13.5
17.6 17.6 17.6
21.8
2.5
13.3
1.1
18.0
2.3
11.4
0.8

Y/E March
Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh.(INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
CMP: INR144
13.6
2.0
9.2
1.1
2016E
19.2
3.2
1.6
11.9
12.8
82.2
15.5
13.8
17.6
12.1
1.8
8.0
1.2
Buy
We expect Radico to post 16% revenue growth to INR3.8b, led by 7%

volume growth.
The premium segment should continue to grow at a faster pace, aided
by up-trading.
Trade situation in Tamil Nadu remains fluid and will continue to hit
branded IMFL players in 3QFY14, despite comparable base.
We expect margin expansion of 80bp to 16.2%, owing to scale benefits.
We forecast PAT growth of 41% on a depressed base (22% PAT decline
in 3QFY13.)

Trade issues in Tamil Nadu; price hikes received, if any, during the
quarter.
ENA price trend and outlook.
(INR Million)
Y/E March
Net sales
YoY Change (%)
Total Expenses
EBITDA
Margins (%)
YoY Change (%)
Depreciation
Interest
Other Income
PBT
Tax
Rate (%)
Adjusted PAT
YoY Change (%)
E: MOSL Estimates
January 2014
FY13
1Q
3,038
2.1
2,514
524
17.3
22.4
90
168
62
328
75
22.9
253
21.8
2Q
2,970
13.9
2,479
491
16.5
10.7
85
172
84
318
110
34.6
208
40.4
3Q
3,260
8.1
2,760
501
15.4
12.1
90
216
85
279
95
34.1
184
-22.3
FY14
4Q
3,315
16.8
2,911
403
12.2
1.5
88
182
74
207
40
19.3
167
-1.4
1Q
3,573
17.6
2,963
611
17.1
16.5
95
204
85
396
90
22.7
306
21.2
2Q
3,521
18.5
2,957
564
16.0
14.9
97
198
89
358
78
21.8
280
35.0
3QE
3,782
16.0
3,169
613
16.2
22.4
106
206
92
392
133
34.0
259
40.9
4QE
3,687
11.2
3,161
525
14.2
30.2
126
144
73
329
112
34.0
217
29.7
FY13
FY14E
12,584
10.0
10,597
1,986
15.8
14,563
15.7
12,250
2,313
16.2
16.4
423
752
338
1,475
413
28.0
1,062
20.9
353
739
304
1,198
320
26.7
878
15.3
C53
United Spirits
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
UNSP IN
145.3
369 / 6
2,815 / 1,708
-8 / 2 / 24
CMP: INR2,537

Y/E March
Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh.(INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2013 2014E 2015E

106.0 98.5 114.5
12.6 11.7 15.7
1.7
4.2
7.7
13.9 29.1 53.3
7.3 109.9 82.9
402.7 576.4 608.6
3.4
5.1
8.7
10.1
8.6 11.7
28.8 15.5
9.4
182.9
6.3
32.8
0.2
87.1
4.4
33.8
0.2
47.6
4.2
24.8
0.2
2016E
131.0
18.3
9.9
67.9
27.6
653.9
10.4
13.3
7.4
37.3
3.9
21.1
0.2
Neutral
We expect UNSP to post 8% revenue growth to INR23.5b, led by 4%

volume growth. Trade issues in Tamil Nadu remain, and UNSP has
decided to exit its direct presence in the state.
Raw material prices remain inflationary.
We expect margin contraction of 80bp to 10.5%.
PAT would grow 18.8% to INR957m, led by lower interest cost post
partial repayment of loans.
The stock trades at 47.6x FY15E EPS of INR53.3. Neutral. Resolution of
legal uncertainty around UBHL stake sale of 6.98% and potential
divestment of W&M are key near-term catalysts for stock.

Volume growth and commentary on Tamil Nadu.
Recent legal issues surrounding UBHL stake sale to Diageo.
ENA price trend and outlook.
Movement in net debt.
(INR Million)
Y/E March
Volume Growth (%)
ENA Price/Case
Net Sales
YoY Change (%)
Total Exp
EBITDA
Margins (%)
Depreciation
Interest
PBT from operations
Other income
PBT
Tax
Rate (%)
PAT
YoY Change (%)
Reported PAT
E: MOSL Estimates
January 2014
FY13
1Q
2
151
20,573
6.3
17,223
3,350
16.3
162
1,656
1,532
607
2,139
689
32.2
1,450
5.9
0
1,450
2Q
-1
159
22,207
24.0
19,676
2,531
11.4
188
1,700
643
-48
595
202
34.0
393
-75.3
0
393
3Q
7
172
21,740
11.3
19,281
2,459
11.3
173
1,636
651
608
1,258
453
36.0
806
64.6
0
806
FY14
4Q
4
176
20,577
10.5
18,584
1,993
9.7
195
1,570
228
836
1,065
288
27.1
777
878.1
-217
560
1Q
0
171
21,924
6.6
19,142
2,782
12.7
195
1,595
992
781
1,773
592
33.4
1,181
-18.5
0
1,181
2Q
-1
180
20,387
-8.2
18,334
2,053
10.1
168
1,364
521
891
1,412
470
33.3
943
140.1
0
943
3QE
4
175
23,479
8.0
21,014
2,465
10.5
225
1,390
850
600
1,450
493
34.0
957
18.8
0
957
4QE
6
175
22,955
11.6
20,574
2,381
10.4
317
1,201
863
610
1,473
492
33.4
981
26.3
0
981
FY13
FY14E
3
165
85,097
12.8
74,763
10,334
12.1
718
6,562
3,054
2,002
5,056
1,632
32.3
3,424
278.0
-217
3,208
3
173
88,744
4.3
79,064
9,681
10.9
904
5,550
3,226
2,882
6,108
2,046
33.5
4,062
18.6
0
4,062
C54
December 2013 Results Preview | Sector: Financials - Banks
Financials Banks
Companies Covered
Post significant volatility in interest rate and forex in 1HFY14, 3QFY14 has seen a
stable macro-economic environment, which is a much-needed relief for financials.
While inflation continued to spring a negative surprise, RBI Governor's stance to wait
and watch for the monetary action was a positive surprise. However, growth and
inflation dynamics continue to be complex. Moderation in economic growth, high
inflation, delay in monetary easing and stretched balance sheets of some of the
corporates remain key risks for banks.
Axis Bank
Bank of Baroda
Bank of India
Canara Bank
HDFC Bank
Federal Bank
While concerns are well discounted in valuations, improvement in macro-economic

environment is critical for state-owned banks. Better visibility on growth, healthy
core operations and returns ratio, top management continuity, lower asset quality
issues, adequate capitalization, strengthening liability franchise and low hanging fruits
(ability to capture market share from state-owned banks due to superior service) etc
will keep premium valuation of private banks intact. Remain selective with the top
picks being HDFCB, ICICIBC, SBIN and OBC.
ICICI Bank
Indian Bank
IndusInd Bank
ING Vysya
Kotak Mahindra Bank
Oriental Bank
State Bank
Union Bank
Yes Bank

CMP
(INR)
27.12.13
Financials - Banks
Private Banks
Axis Bank
1,293
Federal Bank
84
HDFC Bank
669
ICICI Bank
1,108
IndusInd Bank
422
ING Vysya Bank
603
Kotak Mahindra Bank
737
Yes Bank
374
Pvt Bkg. Sector Aggregate
PSU Banks
Bank of Baroda
652
Bank of India
236
Canara Bank
282
Indian Bank
114
Oriental Bank
228
635
State Bank
1,770
Union Bank
130
PSU Bkg. Sector Aggregate
*Standalone
Rating
(INR Million)
Net Interest Income
Dec.13
Var.
Var.
% YoY % QoQ
Operating Profit
Dec.13
Var.
Var.
% YoY % QoQ
Net Profit
Dec.13
Var.
% YoY
Var.
% QoQ
Buy
Buy
Buy
Buy
Buy
Buy
Neutral
Buy
29,830
5,484
46,892
42,810
7,018
4,509
9,413
6,733
152,688
19.6
10.3
17.8
22.3
21.5
11.9
14.4
15.2
18.7
1.6 28,226
0.0
3,637
4.7 37,295
5.9 41,393
0.3
5,997
2.4
3,011
1.9
6,266
0.2
6,116
3.6 131,941
19.5
-7.7
19.5
19.9
27.0
14.4
9.4
8.5
17.8
2.6
2.8
10.1
6.5
2.0
9.0
3.3
-14.2
5.0
15,284
1,658
23,235
25,123
3,183
1,776
3,624
3,813
77,696
13.4
-21.3
25.0
11.6
19.1
9.4
0.2
11.4
14.2
12.2
-26.6
17.2
6.8
-3.6
0.7
2.8
2.7
8.6
Buy
Neutral
Neutral
Buy
Buy
Buy
Buy
Neutral
30,136
27,209
22,916
11,204
12,956
41,022
127,399
20,309
293,151
6.1
17.9
15.3
-2.0
7.6
9.9
14.2
7.4
11.6
4.1 21,795
7.7 19,864
4.6 15,439
2.4
7,440
1.1
9,042
2.2 26,735
4.0 71,484
3.9 13,511
3.9 185,310
-2.9
7.0
1.8
-0.5
-2.4
-0.3
-8.2
-0.5
-3.1
3.3
-5.5
8.3
5.4
9.6
5.5
13.3
10.3
7.5
9,762
6,083
3,403
2,545
2,498
7,596
22,819
3,099
57,804
-3.5
-24.3
-52.1
-23.0
-23.5
-41.8
-32.8
2.5
-29.4
-16.4
-2.2
-45.6
-16.8
-0.6
50.3
-3.9
48.9
-4.6
Alpesh Mehta (Alpesh.Mehta@MotilalOswal.com) / Sohail Halai (Sohail.Halai@MotilalOswal.com)

January 2014
C55
Initial signs of core operations' improvement - too early to judge

Bankers' comments on
asset quality are a
positive. However, little
relief from macroeconomic environment
Lower referrals to CDR, bankers comments of stable-to-declining trend in net

slippages, largely flat restructured book QoQ (partially helped by SEB bonds) and
expectation of few large ticket recoveries in the quarter is giving initial signs of
stabilization in asset quality for banks (mainly state-owned). However, growth remains
weak, business confidence low and lead indicators/green shoots of recovery not in
sight. Further, RBI and Government's tough stance on asset quality may spring a
negative surprise on NPL/provisions. Thus, we remain cautious on asset quality.
Margins to be stable/decline marginally in 3QFY14E

Bankers' comments:
State-owned banks
expect stable- toimproving NIMs, while
private banks guide for
flat- to-declining
NIMs QoQ
Easing of liquidity in the system has led to reduction in short term rates (6M/12M CD
rates on average basis for 3QFY14 are lower by 100/60bp over average of 2QFY14).
Further, our interactions with bankers suggest that incremental spreads over base
rate has increased and NIMs protection is a key focus area. While NIMs of certain
private banks are expected to moderate, led by higher reliance on bulk deposits and
lag impact of deposit re-pricing,stability in asset quality, aggressive reduction in bulk
deposits will help state-owned banks to contain cost of funds and maintain NIMs.
Banks with excess liquidity on balance sheet like CBK, BOI and BOB can surprise
positively by increasing the CD ratio. Thus, we expect NII growth of 4% QoQ and 12%
YoY for state-owned banks.
Deposit growth outpaces loan growth, overall growth muted

FCNR deposits were a
major source of business
(deposits and loans)
during the quarter
For the fortnight-ended Dec 13, 2013, loans/deposits grew by 15%/17% YoY. The reversal
in growth trends has been driven by (1) strong flows from FCNR window (bankers
have mobilized USD27b) and (2) shift of loans to credit substitutes as bond market
rates eased over the last few months. FCNR deposits, being a leveraged product, will
also help to report strong loan growth QoQ. In our view, core deposit growth is still
weak, and with the busy season round the corner, both deposit and lending rates
could be hiked in 4Q. We factor loan and deposit growth of 14% and 13% respectively.
Stress creation to remain high - factored in estimates

Bankers' comments:
State-owned banks guide
for flat- to-declining
stress assets, and private
banks guide for increase
in restructuring
Economic environment continues to be challenging and stress creation is expected to

remain high for the system. However, our interactions suggest that the situation has
not worsened and banks are holding on to the guidance given in 2QFY14. While recovery
mechanism remains slow, upgrades/recoveries from few large/mid-corporate
accounts could drive positive surprise. We factor net slippage ratio (for state-owned
banks) of 2.1% in 3QFY14E, compared to 1.9% in 2QFY14. Retail focused banks are
likely to be better placed (most private sector banks); however, unlike past, retail
delinquency has started to increase. Thus, NPA is expected to rise in this segment as
well.
CDR references - cumulative pipeline of 0.8% of loans

CDR references down
sharply in November and
December - one-off or
trend. The jury is out
January 2014
Preliminary data suggests that CDR referrals for 3QFY14 were high at ~INR290b,
compared to INR250b in 2QFY14. However, in the last two months, proposals were
just INR60b - significantly lower than the experience of prior months. Though the
trend is encouraging, we prefer to wait and watch as this could be on account of RBI
clamping down on banks for higher restructuring. Meanwhile, pipeline of restructuring
C56
(proposals received but yet not approved) at end-2QFY14 was high at INR450b (0.8%
of loans). During the , banks would also receive SEB bonds from Rajasthan, Haryana
and UP discoms, which may help contain the increase in restructured pool.
MTM and NPA provisioning to continue to dent profitability

No material change in
MTM requirement on
investments
Due to dichotomy of easing liquidity and inflationary pressures, yield curve has
flattened from being inverted. Since end of September 2013, one-year G-sec yields
have cooled down by 25bp+; however, the longer tenure yield has increased by 15bp+.
Thus, MTM position of banks is unlikely to be altered significantly and investment
depreciation will remain high for state-owned banks. Barring BoB, other state-owned
banks have adopted the policy of amortizing MTM (in line with RBI dispensation) over
FY14.
Aging NPAs to keep credit

cost high, expect QoQ
decline in net slippages.
This coupled with high credit cost will keep overall provisioning high. Hence, even as
PPP growth is expected to be 8% YoY, overall PAT is expected to decline by 5% YoY. For
private banks, credit cost is expected to be stable/increase and for couple of banks,
IIB and FB, investment depreciation will keep provisions high.
Sector strategy: Not out of woods yet, remain selective

The policy stance to contain inflationary expectation in the medium term will keep
interest rates higher in the system, thus delaying growth revival. Higher interest rates,
with moderating economic growth, will exert pressure on business growth and asset
quality of Indian financials. State-owned banks will be more impacted due to a high
share of corporate business. From an uncertain policy stance of inverted yield curve
(negative for financials) move towards flattening curve is positive from earnings
perspective (especially on margins), in our view.
Top bets: HDFCB, ICICIBC,
SBIN, BOB, OBC and YES
January 2014
Considering the slower pace of core deposit mobilization and expected pick-up in
lending activity, interest rates in both retail liability and lending side could rise. Private
banks have already increased the base rates by 20-25bp and some PSU banks increased
it by 10-25bp. If the core deposits growth will remain muted, then there is a possibility
of further 25bp hike in lending rates over three to six months. In this current
uncertainty, we remain selective and prefer banks with strong capitalization (risk of
dilution low) and liability franchise (emerge stronger in the upturn of economy),
management stability, P&L strength (to absorb credit cost risk) and those who have
recognized stress upfront (risk of setback remains low). Top picks: private banks HDFCB, ICICIBC and YES. State-owned banks: SBIN, BOB and OBC.
C57
Loan growth moderates led by shift to credit substitutes
Deposit growth improves led by inflow from FCNR window
CD rates: Interest rates cool off in 3QFY14
Yield curve flattens but settles at high level (%)
Net slippages expected to be at a high level
MTM requirement to impact profitability in 2HFY14E

(INR m)
Overall MTM
Unrecognized (to be
requirement (reported)
providedin 2HFY14)
SBIN
21,033
14,022
PNB
10,457
6,902
BoI
6,479
1,817
CBK
10,611
7,055
UNBK
2,343
2,008
INBK
2,660
1,773
OBC
2,425
1,617
January 2014
C58
Sens ex Index
MOSL Fi na nci al s Index
120
Sens ex Index
MOSL Fi nanci al s Index
120
115
105
110
90
105
75
100
Dec-13
Sep-13
Jun-13
Dec-12
Dec-13
Nov-13
Oct-13
Sep-13
Mar-13
60
95
CMP (INR)
27.12.13
Financials - Banks
Private Banks
Axis Bank
Federal Bank
HDFC Bank
ICICI Bank
IndusInd Bank
ING Vysya Bank
J&K Bank
Kotak Mahindra
South Indian Bank
Yes Bank
Pvt. Bank Aggregate
PSU Banks
Andhra Bank
Bank of Baroda
Bank of India
Canara Bank
Corporation Bank
Dena Bank
IDBI Bank
Indian Bank
Oriental Bank
Punjab Nat.l Bank
State Bank
Union Bank
PSU Bank Aggregate
January 2014
Rating
EPS (INR)
FY13 FY14E FY15E
P/E (x)
FY13 FY14E FY15E
P/BV (x)
FY13 FY14E FY15E
RoE (%)
FY13 FY14E FY15E
1,293
84
669
1,108
422
603
1,411
737
21
374
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Neutral
Neutral
Buy
110.7
9.8
28.3
72.2
20.3
39.6
217.5
29.3
3.8
36.3
128.6
7.8
35.8
84.1
25.5
38.4
234.5
33.0
3.4
43.3
145.7
9.7
44.8
92.7
29.9
41.4
246.4
37.8
3.6
49.7
11.7
8.6
23.7
15.4
20.8
15.2
6.5
25.2
5.5
10.3
16.7
10.1
10.8
18.7
13.2
16.6
15.7
6.0
22.3
6.1
8.6
14.2
8.9
8.7
15.0
11.9
14.1
14.6
5.7
19.5
5.7
7.5
12.3
1.8
1.1
4.4
2.0
3.0
2.1
1.4
3.6
1.0
2.3
2.9
1.6
1.0
3.7
1.8
2.6
1.6
1.2
3.1
0.9
1.9
2.4
1.4
1.0
3.1
1.6
2.3
1.5
1.0
2.7
0.8
1.6
2.1
18.5
13.9
20.3
14.8
17.8
14.6
23.6
15.5
20.5
24.8
17.2
16.9
10.1
21.6
15.2
16.7
12.4
21.5
15.0
14.9
24.1
17.0
16.6
11.5
22.7
14.7
17.1
10.5
19.4
14.8
14.3
22.9
17.2
63
652
236
282
263
63
66
114
228
635
1,770
130
Neutral
Buy
Neutral
Neutral
Neutral
Neutral
Neutral
Buy
Buy
Buy
Buy
Neutral
23.0
106.0
46.1
64.8
93.8
23.1
14.1
36.8
45.5
134.3
261.9
36.0
11.4
104.1
44.3
48.3
53.3
14.4
11.2
26.7
37.1
94.5
195.3
24.2
15.2
105.4
49.3
56.3
68.6
16.6
12.5
31.3
42.9
121.9
238.1
29.2
2.7
6.1
5.1
4.4
2.8
2.7
4.7
3.1
5.0
4.7
6.4
3.6
5.5
5.6
6.3
5.3
5.8
4.9
4.4
5.9
4.3
6.2
6.7
8.5
5.4
7.1
4.2
6.2
4.8
5.0
3.8
3.8
5.3
3.6
5.3
5.2
7.1
4.5
6.0
0.4
0.9
0.7
0.5
0.4
0.5
0.5
0.5
0.6
0.7
0.9
0.5
0.8
0.4
0.8
0.6
0.5
0.4
0.4
0.4
0.4
0.5
0.7
0.9
0.5
0.7
0.4
0.7
0.6
0.5
0.4
0.4
0.4
0.4
0.5
0.6
0.8
0.4
0.7
16.2
16.1
13.6
13.3
16.1
17.6
10.2
15.6
11.5
16.5
15.9
15.0
14.9
7.3
13.9
12.3
9.1
8.2
9.9
7.4
10.1
8.8
10.3
10.6
8.9
10.2
9.2
12.7
12.2
9.8
9.9
10.5
7.8
11.0
9.5
12.1
11.8
10.0
11.1
C59
Axis Bank
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
AXSB IN
468.0
605 / 10
1,549 / 764
12 / -11 / -15

Y/E March
NII
OP
NP
NIM (%)
EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
ABV/Sh. (INR)
RoE (%)
RoA (%)
Payout (%)
Valuations
P/E(X)
P/BV (X)
P/ABV (X)
Div. Yield (%)
2013
96.7
93.0
51.8
3.3
110.7
7.8
699.9
690.1
18.5
1.7
19.1
2014E
117.9
115.1
60.2
3.5
128.6
16.2
811.6
798.4
16.9
1.6
19.2
11.7
1.8
1.9
1.4
10.1
1.6
1.6
1.6
2015E 2016E
135.1
157.0
130.7
153.0
68.2
80.6
3.5
3.5
145.7
172.3
13.3
18.3
933.2 1,077.1
916.1 1,056.6
16.6
17.1
1.6
1.7
19.2
19.2
8.9
1.4
1.4
1.9
7.5
1.2
1.2
2.2
CMP: INR1,293
Buy
Loan growth is expected to be above industry average at ~17% YoY.

This would be driven by healthy momentum in retail and SME segment,
while corporate loan book is expected to be muted.
NIM is expected to moderate by 10bp+ to 3.7%, driven by pressure on
cost of funds and build-up of PSL (low yielding).
Fee income growth is expected to be lower than the balance sheet
growth at ~12%. Muted corporate fees and moderation in retail fees
on a higher base is expected to drag overall fees lower.
Stress creation in large/mid-corporate segment is expected to
continue. We factor a slippage ratio of ~1.8% (v/s 1.4% in 2QFY14) and
credit cost of 1.1% (v/s 0.6% in 2QFY14) for 3QFY14E. Bank may utilize
some of the contingency provision made earlier. Maintain Buy.
Key issues to watch for

Despite sharp increase in cost of funds, AXSB was able to manage its
cost of funds. Similar surprise could lead to earnings upgrade.
Bank increased its stress addition guidance to INR60b (v/s INR50b) in
1QFY14. Any revision in the same could alter the outlook.
(INR Million)
Y/E March
1Q
64,829
43,030
21,799
26.4
13,355
35,154
15,517
19,637
26.0
2,588
17,048
5,513
11,535
22.4
Interest Income
Interest Expense
Net Interest Income
% Change (Y-o-Y)
Other Income
Net Income
Operating Expenses
Operating Profit
% Change (Y-o-Y)
Other Provisions
Profit before Tax
Tax Provisions
Net Profit
% Change (Y-o-Y)
Operating Parameters
NIM (Reported,%)
NIM (Cal, %)
Deposit Growth (%)
Loan Growth (%)
CD Ratio (%)
Core CASA ratio (%)
Asset Quality
OSRL (INR b)
OSRL (%)
Gross NPA (INR b)
Gross NPA (on customer assets, %)
E: MOSL Estimates
January 2014
FY13
2Q
3Q
66,872
69,649
43,603
44,701
23,269
24,948
15.9
16.6
15,931
16,154
39,200
41,102
17,417
17,487
21,783
23,615
22.7
14.7
5,094
3,868
16,688
19,747
5,453
6,275
11,235
13,472
22.1
22.2
FY14
4Q
70,476
43,829
26,647
24.2
20,072
46,718
18,721
27,997
37.4
5,954
22,044
6,492
15,552
21.8
1Q
72,778
44,126
28,652
31.4
17,813
46,465
18,030
28,436
44.8
7,123
21,313
7,224
14,089
22.1
2Q
76,090
46,723
29,367
26.2
17,661
47,028
19,530
27,498
26.2
6,875
20,623
7,000
13,623
21.3
3QE
79,356
49,527
29,830
19.6
18,035
47,864
19,638
28,226
19.5
5,069
23,158
7,874
15,284
13.4
4QE
82,776
52,726
30,050
12.8
21,465
51,515
20,577
30,938
10.5
4,981
25,958
8,769
17,188
10.5
3.6
10.7
16.6
77.3
3.4
14.0
15.0
78.7
3.4
3.3
21.3
29.8
76.9
36.0
3.5
3.5
21.2
22.9
73.1
36.2
3.6
3.6
17.2
20.7
73.4
35.8
3.7
3.5
14.8
16.0
78.0
36.0
3.9
3.7
7.1
15.8
83.1
38.9
3.8
3.7
8.4
16.9
78.8
39.4
38.3
2.2
20.9
1.1
40.7
2.4
21.9
1.1
42.6
2.4
22.8
1.1
43.7
2.2
23.9
1.1
42.1
2.1
24.9
1.1
48.1
2.4
27.3
1.2
29.5
1.2
32.5
1.3
FY13
FY14E
271,826
175,163
96,663
20.6
65,511
162,174
69,142
93,031
25.2
17,504
75,527
23,733
51,794
22.1
311,001
193,102
117,899
22.0
74,974
192,873
77,774
115,098
23.7
24,047
91,051
30,866
60,185
16.2
3.5
3.3
14.8
16.0
78.0
36.0
3.5
14.0
15.0
78.7
43.7
2.2
23.9
1.1
32.5
1.3
C60
Bank of Baroda
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
BOB IN
422.5
275 / 4
900 / 429
3 / 3 / -34
CMP: INR652

Y/E March
2013 2014E 2015E
NII
113.2 120.0 140.8
OP
90.0 91.1 105.4
NP
44.8 44.0 44.5
NIM (%)
2.4
2.2
2.3
EPS (INR)
106
104
105
EPS Gr. (%)
-12.7
-1.8
1.2
BV/Sh. (INR)
707
789
871
ABV/Sh. (INR)
643
675
734
RoE (%)
16.1 13.9 12.7
RoA (%)
0.9
0.8
0.7
Div. Payout (%) 27.4 23.2 23.2
Valuations
P/E(X)
6.1
6.3
6.2
P/BV (X)
0.9
0.8
0.7
P/ABV (X)
1.0
1.0
0.9
Div. Yield (%)
3.3
3.2
3.2
2016E
159.4
117.7
50.2
2.2
119
12.8
964
832
13.0
0.7
23.2
5.5
0.7
0.8
3.6
Buy
Loan and deposit each is expected to grow 5% QoQ. However, on a YoY

basis, deposit growth is expected to be higher at 23%, compared to
19% YoY loan growth.
NIM is expected to be stable QoQ at 2.2%.
Fee income growth picked up in 2QFY14 and we expect the trend to
remain healthy. Hence, we factor a fee income growth of 17% YoY.
Contribution from net investment gains is expected to decline to
INR1.3b, compared to INR2.1b in 2QFY14.
Stress creation is expected to remain at a high level. Hence, factored
net slippage ratio of 2.1% and credit cost of 95bp. Further, at end2QFY14, management guided for restructuring of INR20b.
YoY PPP and PAT are expected to be decline led by YoY decline in NIM
and high provisioning expense. Maintain Buy.

Outlook on asset quality and restructuring management confident
of improving asset quality with large part of pain taken upfront.
Domestic CD ratio is at 70% - below industry average and improvement
in the same could cushion/provide push to NIM.
(INR Million)
Y/E March
Interest Income
Interest Expense
Net Interest Income
% Change (YoY)
Other Income
Net Income
Operating Expenses
Operating Profit
% Change (YoY)
Other Provisions
Profit before Tax
Tax Provisions
Net Profit
% Change (YoY)
NIM (Reported, %)
NIM (Calculated, %)
Deposit Growth (%)
Loan Growth (%)
CASA Ratio (%)
Tax Rate (%)
Asset Quality
OSRL (INR B)
OSRL (%)
Gross NPA (%)
E: MOSL Estimates
January 2014
1Q
85,576
57,595
27,981
21.8
7,708
35,689
13,281
22,407
23.2
8,938
13,469
2,081
11,389
10.3
FY13
2Q
3Q
87,226
88,449
58,603
60,040
28,623
28,409
11.5
7.0
8,283
8,406
36,906
36,815
13,205
14,380
23,701
22,435
11.4
-13.6
6,464
10,293
17,237
12,142
4,223
2,026
13,014
10,116
11.6
-21.6
FY14
4Q
90,716
62,576
28,140
0.6
11,909
40,049
18,602
21,447
5.1
15,984
5,463
-4,825
10,289
-32.2
1Q
94,869
65,978
28,891
3.3
12,306
41,197
16,836
24,361
8.7
10,179
14,182
2,503
11,679
2.5
2Q
94,735
65,787
28,948
1.1
9,739
38,687
17,596
21,090
-11.0
8,608
12,482
801
11,681
-10.2
2.7
2.6
22.3
23.0
32.2
15.4
2.7
2.6
24.0
22.2
31.8
24.5
2.7
2.5
18.8
14.8
32.2
16.7
2.5
2.3
23.1
14.2
30.4
-88.3
2.4
2.2
22.0
12.4
31.2
17.7
2.3
2.2
18.8
16.3
32.7
6.4
179.8
6.3
1.8
195.8
6.7
2.0
205.0
6.8
2.4
200.1
6.1
2.4
207.2
6.4
3.0
215.3
6.3
3.2
3QE
99,541
69,405
30,136
6.1
10,233
40,369
18,574
21,795
-2.9
9,744
12,052
2,290
9,762
-3.5
4QE
105,374
73,361
32,013
13.8
12,042
44,055
20,251
23,804
11.0
10,138
13,666
2,787
10,878
5.7
2.2
22.8
19.2
2.2
15.0
15.0
19.0
3.3
FY13
FY14E
351,967
238,814
113,153
9.7
36,306
149,459
59,467
89,992
4.9
41,679
48,312
3,505
44,807
-10.5
394,519
274,531
119,988
6.0
44,319
164,307
73,257
91,050
1.2
38,667
52,383
8,381
44,002
-1.8
20.4
2.7
2.4
23.1
14.2
31.6
7.3
16.0
3.4
200.1
6.1
2.4
3.4
2.2
15.0
15.0
C61
Bank of India
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
BOI IN
643.0
152 / 2
392 / 127
9 / -6 / -40

Y/E March
2013 2014E 2015E
NII
90.2 106.6 126.0
OP
74.6 84.0 95.2
NP
27.5 28.5 31.7
NIM (%)
2.3
2.3
2.3
EPS (INR)
46.1 44.3 49.3
EPS Gr. (%)
-1.1
-3.9 11.4
RoE (%)
13.6 12.3 12.2
RoA (%)
0.7
0.6
0.5
BV/Sh. (INR)
362
386
424
ABV/Sh. (INR)
298
316
344
Div. Payout (%) 29.4 24.4 24.4
Valuations
P/E(X)
5.1
5.3
4.8
P/BV (X)
0.7
0.6
0.6
P/ABV (X)
0.8
0.7
0.7
Div. Yield (%)
4.2
3.9
4.4
2016E
145.8
106.9
36.3
2.3
56.5
14.6
12.7
0.5
466
385
24.4
4.2
0.5
0.6
5.0
CMP: INR236
Neutral
On a sequential basis, loan and deposit growth is expected to be in

line with industry average. However, on a YoY basis, it is expected to
be strong at 25% and 28% respectively.
NIM is expected to improve marginally to 2.3%, aided by improvement
in international NIM.
Factored investment depreciation of INR1.1b as the bank is expected
to recognize MTM provisions (amortized over three quarters at end2QFY14) on domestic portfolio.
Slippages are expected to be at an elevated level; we have factored a
slippage ratio of 2.8% and credit cost of 0.9%. At end-2QFY14, bank
guided for a restructuring pipeline of INR10-15b.
While operating profit is expected to grow by 7% YoY, higher provisions
and tax rate of 30% (v/s 14% in 3QFY13) are expected to dent earnings
(decline of 24% YoY). Maintain Neutral.
Asset quality performance has been volatile over last few quarters;
outlook on slippages and restructuring pipeline remains a key.
Business growth is expected to remain strong. However, with scarcity
of capital, outlook on future growth is important.
(INR Million)
Y/E March
Interest Income
Interest Expense
Net Interest Income
% Change (Y-o-Y)
Other Income
Net Income
Operating Expenses
Operating Profit
% Change (Y-o-Y)
Other Provisions
Profit before Tax
Tax Provisions
Net Profit
% Change (Y-o-Y)
NIM (Reported, %)
NIM (Cal, %)
Deposit Growth (%)
Loan Growth (%)
CASA Ratio (Reported, %)
Tax Rate (%)
Asset Quality
OSRL (INR b)
OSRL (%)
Gross NPA (INR b)
Gross NPA (%)
E: MOSL Estimates
January 2014
1Q
77,092
56,656
20,436
11.0
8,409
28,844
12,109
16,736
19.9
4,722
12,013
3,139
8,875
71.5
FY13
2Q
3Q
80,055
80,227
58,095
57,142
21,960
23,085
15.3
11.7
8,941
9,371
30,901
32,456
12,360
13,898
18,541
18,558
19.5
7.2
15,521
9,158
3,020
9,400
1
1,365
3,019
8,035
-38.5
12.2
FY14
4Q
81,716
56,956
24,760
-1.0
10,939
35,700
14,949
20,751
3.0
15,106
5,645
-1,921
7,566
-20.6
1Q
85,412
60,042
25,370
24.1
11,808
37,178
15,374
21,804
30.3
6,946
14,858
5,217
9,642
8.6
2Q
92,393
67,121
25,272
15.1
11,003
36,274
15,249
21,025
13.4
12,323
8,702
2,484
6,218
106.0
2.3
2.3
15.7
22.9
32.0
26.1
2.4
2.4
11.2
20.0
32.8
0.0
2.4
2.5
13.6
20.3
33.8
14.5
2.5
2.5
20.0
16.5
32.8
-34.0
2.5
2.3
22.4
17.1
31.4
35.1
2.3
2.2
29.9
29.4
30.4
28.5
175.7
6.6
67.5
2.6
178.5
6.9
89.0
3.4
181.4
6.5
86.3
3.1
176.4
6.0
87.7
3.0
162.3
5.2
94.1
3.0
175.0
5.2
98.8
2.9
3QE
97,302
70,093
27,209
17.9
8,998
36,207
16,343
19,864
7.0
11,174
8,690
2,607
6,083
-24.3
4QE
101,858
73,106
28,752
16.1
10,400
39,152
17,879
21,273
2.5
11,628
9,644
3,098
6,546
-13.5
2.3
28.2
24.7
2.3
22.0
24.0
30.0
106.2
3.0
FY13
FY14E
319,089
228,849
90,240
8.5
37,660
127,900
53,315
74,585
11.4
44,508
30,077
2,584
27,493
2.7
376,965
270,363
106,602
18.1
42,209
148,811
64,846
83,965
12.6
42,071
41,894
13,406
28,488
3.6
32.1
2.5
2.3
20.0
16.5
32.8
8.6
32.0
113.3
3.1
176.4
6.0
87.7
3.0
113.3
3.1
2.3
22.0
24.0
C62
Canara Bank
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
CBK IN
443.0
125 / 2
550 / 190
14 / -31 / -52

Y/E March
2013 2014E 2015E
NII
78.8 88.6 104.5
OP
58.9 65.8 74.4
NP
28.7 21.4 24.9
NIM (%)
2.2
2.1
2.2
EPS (INR)
65
48
56
EPS Gr. (%)
-12.5 -25.5 16.5
BV/Sh. (INR)
513
551
595
ABV/Sh. (INR)
436
444
471
RoE (%)
13.3
9.1
9.8
RoA (%)
0.7
0.5
0.5
Div. Payout (%) 23.3 23.2 23.2
Valuations
P/E(X)
4.4
5.8
5.0
P/BV (X)
0.5
0.5
0.5
P/ABV (X)
0.6
0.6
0.6
Div. Yield (%)
4.6
3.4
4.0
2016E
118.3
82.3
26.7
2.1
60
7.2
630
501
9.9
0.4
23.2
4.7
0.4
0.6
4.3
CMP: INR282
Neutral
CBK has moved from consolidation phase to aggressive growth strategy

and thus loan growth is expected to be 35%+ YoY, on a lower base.
While systemic cost of funds has increased, further room to improve
CD ratio (72% at end-2QFY14) is expected to provide cushion to NIM.
Hence, factor stable NIM QoQ.
In line with the pick-up in balance sheet growth, fee income growth is
expected to be healthy at 20% YoY. However, overall non-interest
income is expected to be flat led by lower trading gains. Factored net
investment loss of INR2.6b v/s loss of INR170m in 2QFY14.
Modeled net slippage ratio of 1.7%, compared to 1.2% in 2QFY14 and
credit cost is expected to remain high at 0.6%+ -- ageing of the NPA
portfolio could lead to higher provisions.
While YoY PPP growth is expected to be flat, overall profitability would
be impacted by higher provisions. Maintain Neutral.
Outlook on slippages and restructuring.
CBK reported strong growth across segments. Aggressive growth
strategy in the current environment could add pressure on asset
quality.
(INR Million)
Y/E March
Interest Income
Interest Expense
Net Interest Income
% Change (Y-o-Y)
Other Income
Net Income
Operating Expenses
Operating Profit
% Change (Y-o-Y)
Other Provisions
Profit before Tax
Tax Provisions
Net Profit
% Change (Y-o-Y)
NIM (Cal, %)
Deposit Growth (%)
Loan Growth (%)
CD Ratio (%)
CASA Ratio (%)
Tax Rate (%)
Asset Quality
OSRL (INR b)
OSRL (%)
Gross NPA (INR b)
Gross NPA (%)
E: MOSL Estimates
January 2014
1Q
84,729
66,293
18,435
4.2
6,926
25,362
11,424
13,938
9.7
4,185
9,752
2,000
7,752
6.8
FY13
2Q
3Q
85,955
85,445
66,387
65,565
19,568
19,880
-0.2
3.6
6,081
8,458
25,649
28,338
12,828
13,174
12,821
15,164
-19.9
-2.8
4,211
6,259
8,610
8,905
2,000
1,800
6,610
7,105
-22.4
-18.9
FY14
FY13
FY14E
340,779
261,989
78,790
2.5
31,530
110,320
51,420
58,900
-0.9
22,179
36,721
8,000
28,721
-12.5
393,422
304,852
88,570
12.4
38,213
126,783
61,004
65,779
11.7
39,672
26,107
4,699
21,408
-25.5
2.3
16.0
25.0
73.3
4Q
84,651
63,744
20,906
2.5
10,065
30,971
13,994
16,977
13.9
7,524
9,454
2,200
7,254
-12.5
1Q
92,696
72,785
19,911
8.0
12,383
32,294
13,311
18,983
36.2
9,162
9,821
1,900
7,921
2.2
2Q
96,545
74,633
21,912
12.0
7,730
29,642
15,392
14,250
11.1
6,740
7,509
1,250
6,259
-5.3
3QE
99,796
76,880
22,916
15.3
8,414
31,329
15,890
15,439
1.8
11,289
4,150
747
3,403
-52.1
4QE
104,386
80,554
23,832
14.0
9,686
33,518
16,411
17,107
0.8
12,480
4,627
802
3,825
-47.3
2.2
25.7
35.2
72.5
2.2
16.0
25.0
73.3
18.0
17.3
2.2
8.8
4.2
68.1
24.2
21.8
85.3
2.8
159.0
6.6
62.6
2.6
2.1
11.5
4.9
67.4
23.3
20.5
2.2
7.7
-1.0
64.1
24.8
23.2
2.3
3.1
0.3
67.4
25.1
20.2
2.3
8.8
4.2
68.1
24.2
23.3
2.0
14.2
10.8
65.4
23.1
19.3
2.2
16.3
30.3
71.8
24.3
16.6
129.6
5.7
45.0
2.0
137.7
6.4
56.1
2.6
133.8
6.1
60.9
2.8
159.0
6.6
62.6
2.6
172.7
6.9
73.3
2.9
180.5
6.4
74.8
2.6
80.0
2.7
18.0
85.3
2.8
C63
Federal Bank
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
FB IN
855.2
72 / 1
110 / 44
5 / -7 / -31
CMP: INR84

Y/E March
NII
OP
NP
NIM (%)
EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
ABV/Sh. (INR)
RoE (%)
RoA (%)
Payout (%)
Valuations
P/E(X)
P/BV (X)
P/ABV (X)
Div. Yield (%)
2013 2014E 2015E

19.7 21.6 24.9
14.6 15.0 17.2
8.4
6.7
8.3
3.2
3.1
3.2
9.8
7.8
9.7
7.9 -20.3 24.0
74.4 80.6 88.2
71.1 76.5 83.9
13.9 10.1 11.5
1.3
0.9
1.0
21.3 20.9 20.9
8.6
1.1
1.2
2.1
10.8
1.0
1.1
1.7
8.7
1.0
1.0
2.1
2016E
28.7
19.8
9.5
3.2
11.1
14.9
97.0
91.9
12.0
1.0
20.9
7.6
0.9
0.9
2.4
Buy
Conservative approach amid challenging economic environment is

expected keep business growth lower, with loan and deposit growth
at 10% YoY and 13% YoY respectively.
Lower dependence on bulk deposits and expected NRI flows (NRI SA
deposits as well) will keep overall increase in cost of funds under
check. Further, growth is expected to be driven by better yielding
retail and SME segment, which will help the bank to keep margins
stable QoQ at 3.3%.
On a lower base, fee income growth is expected to be 25%+ YoY.
While retail and SME slippages are expected to be contained, slippages
in corporate segment may increase in line with managements
expectation at end-2QFY14.
Overall earnings are expected to decline 20%+ YoY driven by lower
NIM and net investment loss of INR350m, compared to a gain of INR1b+
in 3QFY13. Maintain Buy.

Outlook on mid-corporate segment and watch-list accounts.
Liability profile improved in 2QFY14 as the bank reduced its
proportion of bulk business in 2QFY14. Strategy in terms of their asset
growth for FY14/15.
(INR Million)
Y/E March
Interest Income
Interest Expense
Net Interest Income
% Change (YoY)
Other Income
Net Income
Operating Expenses
Operating Profit
% Change (YoY)
Other Provisions
Profit before Tax
Tax Provisions
Net Profit
% Change (YoY)
NIM (Reported,%)
NIM (Cal, %)
Deposit Growth (%)
Loan Growth (%)
CD Ratio (%)
CASA Ratio (%)
Asset Quality
Gross NPA (INR b)
Gross NPA (%)
E: MOSL Estimates
January 2014
1Q
15,367
10,451
4,916
6.9
1,243
6,160
2,695
3,465
-2.1
628
2,837
934
1,904
30.2
FY13
2Q
3Q
15,256
15,218
10,197
10,244
5,059
4,974
6.6
-5.8
1,394
2,039
6,453
7,012
2,957
3,073
3,496
3,939
-3.2
-5.9
305
744
3,192
3,196
1,041
1,088
2,151
2,108
12.5
4.4
FY14
4Q
15,835
11,037
4,798
-2.3
1,969
6,766
3,071
3,695
-0.8
982
2,713
494
2,219
-6.6
1Q
16,533
11,437
5,096
3.7
2,158
7,254
3,249
4,005
15.6
2,451
1,554
498
1,057
-44.5
2Q
17,144
11,661
5,484
8.4
1,434
6,918
3,378
3,539
1.2
110
3,429
1,171
2,258
5.0
3QE
17,466
11,982
5,484
10.3
1,666
7,150
3,513
3,637
-7.7
1,180
2,457
798
1,658
-21.3
4QE
18,281
12,708
5,573
16.2
2,000
7,573
3,769
3,805
3.0
1,277
2,527
822
1,705
-23.2
FY13
FY14E
61,676
41,929
19,747
1.1
6,644
26,391
11,795
14,596
-3.1
2,658
11,938
3,556
8,382
7.9
69,424
47,787
21,636
9.6
7,258
28,894
13,908
14,986
2.7
5,018
9,968
3,289
6,678
-20.3
3.4
3.4
59.3
19.0
75.2
20.9
3.6
3.6
56.0
8.0
73.3
21.2
3.5
3.4
62.6
18.9
76.5
21.5
3.1
3.1
81.5
16.8
76.5
19.9
3.1
3.1
12.7
8.5
72.4
21.4
3.3
3.3
14.7
16.3
74.3
22.7
3.3
13.4
9.6
74.0
3.2
8.0
7.0
75.8
3.4
3.2
17.7
16.8
76.5
19.9
3.1
8.0
7.0
75.8
14.1
3.6
14.4
3.8
15.6
3.9
15.5
3.4
14.8
3.5
14.7
3.4
15.6
3.5
16.8
3.5
15.5
3.4
16.8
3.5
C64
HDFC Bank
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
HDFCB IN
2,346.7
1,571 / 25
727 / 528
-1 / -9 / -11
CMP: INR669

Y/E March
NII
OP
NP
NIM (%)
EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
ABV/Sh. (INR)
RoE (%)
RoA (%)
Payout (%)
Valuations
P/E(X)
P/BV (X)
P/ABV (X)
Div. Yield (%)
2013
158.1
114.3
67.3
4.8
28.3
28.4
152.1
150.7
20.3
1.8
22.8
2014E
186.1
141.5
85.1
4.7
35.8
26.6
179.5
176.0
21.6
2.0
23.4
2015E
226.5
179.8
106.5
4.7
44.8
25.1
213.9
207.5
22.7
2.0
23.4
2016E
275.7
224.0
133.1
4.7
55.9
25.0
256.8
247.2
23.8
2.1
23.4
23.7
4.4
4.4
0.8
18.7
3.7
3.8
1.1
15.0
3.1
3.2
1.3
12.0
2.6
2.7
1.7
Buy
On the back of healthy retail business, HDFCB is expected to deliver

loan growth of 18%+ YoY. Deposit growth is expected to be in line with
loan growth at ~17% YoY.
NIM is expected to be stable QoQ and YoY at 4.3%. Thus, NII is expected
to grow ~5% QoQ and 18% YoY.
Fee income growth is expected to be lower than the balance sheet
growth and be at ~12% YoY. Contribution from trading income is
expected to be negligible.
Asset quality is expected to remain healthy, though stress in few
segments of retail loans has increased, which needs to be watched.
We build provisions of INR3.2b v/s INR3.9b in 2QFY14.
Earnings growth is expected to be healthy at 25+ YoY. Upgrade to Buy.

Commentary on retail portfolio, which has so far been holding up
well even amid a slowdown in economy.
Branch expansion has been strong in the last couple of years;
continuation of strategy would be a positive.
(INR Million)
Y/E March
1Q
81,757
45,234
36,524
28.2
16,494
53,018
26,266
26,752
31.6
5,816
20,936
6,762
14,174
30.6
Interest Income
Interest Expense
Net Interest Income
% Change (Y-o-Y)
Other Income
Net Income
Operating Expenses
Operating Profit
% Change (Y-o-Y)
Other Provisions
Profit before Tax
Tax Provisions
Net Profit
% Change (Y-o-Y)
NIM (Reported,%)*
NIM (Cal, %)#
Deposit Growth (%)
Loan Growth (%)
CASA Ratio (%)
Tax Rate (%)
Asset Quality
OSRL (%)
Gross NPA (INR B)
Gross NPA (%)
E: MOSL Estimates; * Reported on
January 2014
4.6
4.8
22.0
21.5
46.0
32.3
FY13
2Q
3Q
86,748
88,904
47,930
49,088
38,819
39,816
31.8
27.8
14,718
19,277
53,537
59,094
26,854
27,880
26,683
31,214
25.5
31.3
3,899
4,050
22,784
27,164
7,184
8,573
15,600
18,591
30.1
30.0
4.4
4.9
18.8
22.9
46.4
31.5
4.1
4.7
22.2
24.3
45.4
31.6
FY14
4QE
109,147
58,888
50,259
17.0
22,140
72,399
35,079
37,321
26.0
3,034
34,287
10,647
23,640
25.1
FY14E
350,649
192,538
158,111
22.7
68,526
226,637
112,361
114,276
21.7
16,770
97,506
30,249
67,257
30.2
412,859
226,756
186,103
17.7
81,295
267,399
125,856
141,543
23.9
15,414
126,129
40,992
85,137
26.6
4.7
18.0
22.0
47.5
32.5
36.0
1.2
4Q
93,239
50,287
42,953
20.6
18,036
60,989
31,362
29,627
17.3
3,005
26,622
7,723
18,898
30.1
1Q
96,630
52,443
44,187
21.0
19,256
63,443
30,382
33,061
23.6
5,271
27,790
9,351
18,439
30.1
2Q
100,933
56,168
44,765
15.3
18,444
63,209
29,342
33,867
26.9
3,859
30,007
10,184
19,823
27.1
4.3
4.9
20.1
22.7
47.4
29.0
4.6
4.8
17.8
21.2
44.7
33.6
4.3
4.8
14.2
16.0
45.0
33.9
4.8
16.8
17.9
4.8
18.0
22.0
31.8
31.1
4.4
4.8
20.1
22.7
47.4
31.0
0.2
29.4
1.1
32.7
1.1
36.0
1.2
0.2
23.3
1.0
0.1
0.1
0.1
0.2
0.2
20.9
21.3
24.3
23.3
27.2
1.0
0.9
1.0
1.0
1.0
total assets; # Cal. on interest earning assets
3QE
106,149
59,257
46,892
17.8
21,456
68,347
31,053
37,295
19.5
3,250
34,045
10,809
23,235
25.0
FY13
C65
ICICI Bank
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
ICICIBC IN
1,152.8
1,277 / 21
1,237 / 759
3 / -5 / -12
CMP: INR1,108

Y/E March
2013 2014E 2015E 2016E
NII
138.7 165.9 191.3
225.8
OP
132.0 162.0 184.8
215.4
NP
83.3 97.0 107.0
124.9
NIM (%)
3.0
3.2
3.3
3.4
EPS (INR)
72
84
93
108
EPS Gr (%)
28.7 16.5 10.3
16.7
BV/Sh (INR)*
459
518
583
659
ABV/Sh (INR)*
446
500
559
630
RoE (%)
14.8 15.2 14.7
15.2
RoA (%)
1.6
1.7
1.6
1.7
Div. Payout (%) 32.2 34.8 34.8
34.8
Valuations
AP/E (x)
12.8 10.7
9.5
7.9
AP/BV (x)
2.0
1.7
1.5
1.3
AP/ABV (x)
2.1
1.8
1.6
1.4
Div. Yield (%)
1.8
2.3
2.5
2.9
* BV adj for invt in susbdiaries, Prices adj
for sub value
Buy
On a YoY basis, loan and deposit growth is expected to be in line with

industry average at 16% and 14% respectively.
Margins are expected to be stable QoQ at ~3.3% (+30bp YoY). Hence,
NII growth is expected to be 20%+ YoY (+6% QoQ).
Fee income growth is expected to be in the mid-teens as lower base
of corporate fees catches up and traction in retail fees improve.
We expect creation of stress assets to increase in 3QFY14 driven by
restructuring of loans (in line with management guidance). Hence,
we expect credit cost to increase QoQ. At end-2QFY14, the bank had
guided for credit cost of 90-100bp for FY14 v/s 1HFY14 credit cost of
80bp.
While operating profit growth is expected to be healthy at 18%+ YoY,
overall earnings growth is expected to be moderate at 5% YoY, led by
higher credit cost. Maintain Buy.

Domestic loan growth and traction in retail portfolio.
Challenges have risen in large/mid-corporate segment. And while
retail segments performance is expected to remain strong, outlook
on large/mid-corporate segment remains important.
(INR Million)
Y/E March
Interest Income
Interest Expense
Net Interest Income
% Change (YoY)
Other Income
Net Income
Operating Expenses
Operating Profit
% Change (YoY)
Other Provisions
Profit before Tax
Tax Provisions
Net Profit
% Change (YoY)
NIM (Reported,%)
NIM (Cal, %)
Deposit Growth (%)
Loan Growth (%)
CASA Ratio (%)
Asset Quality
OSRL (INR b)
OSRL (%)
Gross NPA (INR b)
Gross NPA (%)
E: MOSL Estimates
January 2014
1Q
95,457
63,527
31,929
32.4
18,799
50,729
21,235
29,493
32.0
4,659
24,835
6,684
18,151
36.3
FY13
2Q
3Q
100,263 101,383
66,551
66,393
33,712
34,990
34.5
29.0
20,430
22,146
54,142
57,136
22,209
22,612
31,933
34,525
35.7
28.5
5,079
3,687
26,854
30,838
7,293
8,335
19,561
22,502
30.1
30.2
FY14
4Q
103,653
65,621
38,032
22.5
22,082
60,114
24,073
36,041
15.8
4,600
31,441
8,400
23,041
21.2
1Q
104,207
66,002
38,205
19.7
24,843
63,048
24,906
38,142
29.3
5,932
32,210
9,468
22,742
25.3
2Q
108,133
67,698
40,435
19.9
21,665
62,100
23,221
38,879
21.8
6,248
32,631
9,110
23,521
20.2
3.0
2.9
16.1
21.6
39.1
3.0
3.0
14.8
17.6
37.5
3.1
3.0
9.9
16.5
37.4
3.3
3.2
14.5
14.4
38.1
3.3
3.1
8.7
12.3
39.0
3.3
3.3
9.8
15.5
40.3
41.7
1.6
98.2
3.5
44.5
1.6
100.4
3.5
45.6
1.6
97.6
3.3
53.2
1.8
96.1
3.2
59.2
2.0
100.1
3.2
68.3
2.1
100.3
3.1
3QE
114,400
71,590
42,810
22.3
24,305
67,115
25,722
41,393
19.9
6,500
34,893
9,770
25,123
11.6
3.3
14.4
15.8
103.8
3.1
4QE
117,194
72,770
44,424
16.8
25,636
70,060
26,468
43,592
20.9
8,139
35,453
9,842
25,611
11.2
3.3
14.9
17.7
107.8
3.1
FY13
FY14E
400,756
262,092
138,664
29.2
83,457
222,121
90,129
131,992
27.1
18,025
113,967
30,712
83,255
28.8
443,934
278,060
165,874
19.6
96,448
262,322
100,317
162,005
22.7
26,819
135,186
38,190
96,996
16.5
3.3
3.0
14.5
14.4
38.1
3.3
14.9
17.7
53.2
1.8
96.1
3.2
107.8
3.1
C66
Indian Bank
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
INBK IN
429.8
49 / 1
219 / 61
10 / -10 / -51
CMP: INR114

Y/E March
2013 2014E 2015E
NII
45.2 44.5 51.7
OP
30.6 30.7 34.8
NP
15.8 11.5 13.5
NIM (%)
3.2
2.7
2.8
EPS (INR)
37
27
31
EPS Gr. (%)
-9.5 -27.6 17.4
BV/Sh. (INR)
243
263
287
ABV/Sh (INR)
207
208
221
RoE (%)
15.6 10.1 11.0
RoA (%)
1.0
0.7
0.7
Div. Payout (%) 20.8 23.8 23.2
Valuations
P/E (x)
3.1
4.3
3.6
P/ BV (x)
0.5
0.4
0.4
P/ABV (x)
0.5
0.5
0.5
Div. Yield (%)
5.8
4.8
5.5
2016E
58.2
37.6
14.9
2.7
35
10.6
313
242
11.2
0.6
23.2
3.3
0.4
0.5
6.1
Buy
Business growth is expected to be in line with industry average, with

YoY loan and deposit growth of 15% and 16% respectively.
Declining trend in NIM is expected to continue led by increase in cost
of funds. Hence, we model a 5bp QoQ decline.
Factor net slippage ratio of 3.3% and credit cost of 80bp. Further,
continued restructuring in large and mid-corporate segment would
add stress on balance sheet.
At end-2QFY14, AFS investments as a proportion of overall investment
stood at 27%, which could translate into MTM loss. We model net
investment loss of INR625m v/s gain of INR254m in 2QFY14.
Led by increasing operating expenses and higher provisioning
expense, PAT is expected to decline to INR2.5b v/s INR3.3b in 3QFY13.
We have not incorporated expected conversion of preference share
into equity impact of which could be negative 5% on BV. Maintain Buy.

Asset quality has been very volatile. Improvement in the same and
outlook would be a key for future performance.
Core operations have been under pressure any uptick would be
viewed positively.
(INR Million)
Y/E March
Interest Income
Interest Expense
Net Interest Income
% Change (Y-o-Y)
Other Income
Net Income
Operating Expenses
Operating Profit
% Change (Y-o-Y)
Other Provisions
Profit before Tax
Tax Provisions
Net Profit
% Change (Y-o-Y)
NIM (Rep, %)
NIM (Cal, %)
Deposit Growth (%)
Loan Growth (%)
CD Ratio (%)
CASA Ratio (%)
Tax Rate (%)
Asset Quality
Gross NPA (INR b)
Gross NPA (%)
E: MOSL Estimates
January 2014
1Q
33,738
22,206
11,532
12.0
2,227
13,759
5,356
8,402
7.6
1,457
6,945
2,328
4,617
13.5
FY13
2Q
3Q
34,104
35,465
22,901
24,030
11,203
11,434
-1.3
-2.3
3,645
2,402
14,848
13,837
5,764
6,355
9,084
7,481
-1.4
-17.9
2,022
4,116
7,063
3,365
2,096
59
4,967
3,306
6.0
-37.1
FY14
4Q
35,620
24,546
11,074
2.3
4,605
15,678
10,033
5,646
-29.2
4,758
888
-2,032
2,919
-15.5
1Q
36,658
25,690
10,968
-4.9
5,297
16,265
7,672
8,593
2.3
3,681
4,912
1,738
3,174
-31.3
2Q
38,013
27,077
10,937
-2.4
2,769
13,706
6,649
7,056
-22.3
2,250
4,807
1,749
3,058
-38.4
3.3
3.5
15.0
13.8
73.9
29.3
33.5
3.1
3.3
12.9
10.8
73.0
29.0
29.7
3.1
3.2
13.5
13.6
74.0
28.3
1.8
2.9
3.0
17.5
17.5
75.5
27.6
-228.9
2.7
2.9
17.8
16.3
73.0
26.9
35.4
2.6
2.8
16.4
15.6
72.5
28.0
36.4
15.5
1.7
19.8
2.1
31.8
3.2
35.7
3.3
37.2
3.4
41.8
3.8
FY13
FY14E
138,926
93,684
45,243
2.4
12,879
58,122
27,509
30,613
2.9
12,351
18,262
2,451
15,811
-9.5
154,508
110,011
44,497
-1.6
15,172
59,669
28,928
30,741
2.7
13,770
16,971
5,516
11,455
-27.6
2.7
2.7
16.0
15.0
74.6
50.4
4.1
3QE
39,228
28,024
11,204
-2.0
3,221
14,424
6,984
7,440
-0.5
3,906
3,535
990
2,545
-23.0
4QE
40,609
29,220
11,388
2.8
3,886
15,274
7,623
7,651
35.5
3,935
3,716
1,039
2,677
-8.3
2.7
16.4
15.1
73.2
2.7
16.0
15.0
74.6
28.0
28.0
3.1
3.2
17.5
17.5
75.5
27.6
13.4
46.4
4.0
50.4
4.1
35.7
3.3
32.5
C67
IndusInd Bank
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
IIB IN
522.9
221 / 4
531 / 318
-1 / -20 / -8

Y/E March
NII
OP
NP
NIM (%)
EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
ABV/Sh. (INR)
RoE (%)
RoA (%)
Payout (%)
Valuations
P/E (X)
P/BV (X)
P/ABV (X)
Div. Yield (%)
2013 2014E 2015E

22.3 28.0 33.8
18.4 24.7 29.0
10.6 13.3 15.6
3.7
3.8
3.8
20.3 25.5 29.9
18.3 25.4 17.4
141.9 162.9 187.5
140.2 160.7 184.0
17.8 16.7 17.1
1.6
1.7
1.6
20.3 17.5 17.5
20.8
3.0
3.0
0.7
16.6
2.6
2.6
0.9
14.1
2.3
2.3
1.1
2016E
40.5
34.4
18.3
3.7
35.0
17.1
216.4
211.5
17.3
1.6
17.5
12.1
2.0
2.0
1.2
CMP: INR422
Buy
Growth in commercial vehicle finance portfolio is likely to moderate

on the back of slower demand. However, introduction of new products
will drive growth in consumer finance portfolio. In corporate segment,
growth is expected to be driven by working capital. Loan growth is
expected to be above industry average at 22% YoY.
Margins are expected to moderate by 10-15bp QoQ to ~3.5%.
Fee income growth is expected to be healthy at ~25% YoY, driven by
traction in forex related and investment banking fees.
Overall asset quality is expected to be healthy; however, we may see
delinquencies and fresh restructuring inching up. Building a credit
cost ratio of 68bp, compared to 60bp in 2QFY14.
Bank is expected to make provisions of INR350m+ on account of
depreciation of investment (in accordance with amortization done in
2QFY14). Maintain Buy.
Growth strategy, traction in new products and fee-based income.
New additions to saving bank accounts and traction in SA deposits.
Outlook on asset quality, especially on CV portfolio (given the
slowdown in industry) and mid-corporate segment.
(INR Million)
Y/E March
1Q
16,320
11,479
4,841
24.1
3,188
8,029
3,989
4,040
29.6
535
3,505
1,143
2,363
31.1
FY13
2Q
3Q
17,279
18,005
12,182
12,227
5,097
5,778
21.6
34.2
3,205
3,558
8,302
9,336
4,104
4,614
4,198
4,722
26.1
35.2
491
787
3,708
3,935
1,205
1,262
2,503
2,673
29.6
29.8
FY14
4Q
18,228
11,615
6,612
42.4
3,679
10,291
4,857
5,435
43.4
819
4,616
1,542
3,074
37.6
1Q
19,122
12,327
6,795
40.4
4,706
11,501
5,085
6,416
58.8
1,321
5,095
1,747
3,348
41.7
2Q
20,186
13,186
6,999
37.3
4,167
11,167
5,288
5,879
40.0
889
4,991
1,688
3,302
32.0
3.7
3.7
27.7
26.4
81.9
29.3
33.4
3.7
3.7
23.5
27.3
85.2
30.0
34.3
3.7
3.7
11.1
24.2
92.3
31.8
33.8
Interest Income
Interest Expense
Net Interest Income
% Change (YoY)
Other Income
Net Income
Operating Expenses
Operating Profit
% Change (YoY)
Other Provisions
Profit before Tax
Tax Provisions
Net Profit
% Change (YoY)
NIM (Reported,%)
3.2
3.3
3.5
NIM (Cal, %)
3.3
3.3
3.6
Deposit Growth (%)
27.8
24.5
26.0
Loan Growth (%)
31.2
30.8
30.8
CD Ratio (%)
82.6
82.5
83.0
CASA Ratio (%)
27.9
28.0
28.7
Tax Rate (%)
32.6
32.5
32.1
Asset Quality
OSRL (INR b)
0.9
0.7
1.1
OSRL (%)
0.2
0.2
0.3
Gross NPA (INR b)
3.7
4.1
4.2
Gross NPA (%)
1.0
1.0
1.0
E: MOSL Estimates; Quarterly calculated margins based on total
January 2014
3QE
21,260
14,241
7,018
21.5
4,676
11,694
5,697
5,997
27.0
1,175
4,822
1,640
3,183
19.1
4QE
22,670
15,441
7,229
9.3
4,960
12,189
5,733
6,456
18.8
1,200
5,256
1,781
3,475
13.0
3.6
11.1
22.3
91.4
3.4
16.0
22.0
86.1
34.0
33.9
1.3
1.3
1.5
0.3
0.3
0.3
4.6
5.1
5.5
6.3
7.4
1.0
1.1
1.1
1.2
1.3
assets, yearly on interest earning assets
FY13
FY14E
69,832
47,504
22,329
31.0
13,630
35,958
17,564
18,395
34.0
2,631
15,764
5,152
10,612
32.2
83,237
55,196
28,042
25.6
18,509
46,551
21,803
24,748
34.5
4,584
20,164
6,856
13,309
25.4
3.4
3.7
27.7
26.4
81.9
29.3
32.7
34.0
1.3
0.3
4.6
1.0
7.4
1.3
3.8
16.0
22.0
91.4
C68
ING Vysya Bank

Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
VYSB IN
150.1
91 / 1
667 / 406
0 / -11 / 6
CMP: INR603

Y/E March
NII
OP
NP
NIM (%)
EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
ABV/Sh. (INR)
RoE (%)
RoA (%)
Payout (%)
Valuations
P/E(X)
P/BV (X)
P/ABV (X)
Div. Yield (%)
2013 2014E 2015E

15.4 17.7 20.2
9.9 12.2 14.1
6.1
7.1
7.7
3.2
3.2
3.1
39.6 38.4 41.4
30.2
-2.9
7.8
292.1 376.2 410.9
291.7 373.0 405.8
14.6 12.4 10.5
1.2
1.2
1.1
16.1 16.2 16.2
15.2
2.1
2.1
0.9
15.7
1.6
1.6
0.9
14.6
1.5
1.5
1.0
2016E
23.9
17.0
8.9
3.1
48.3
16.5
451.3
443.8
11.2
1.1
16.2
12.5
1.3
1.4
1.1
Buy
While on a sequential basis, loan growth is expected to be ~5%, YoY

growth is expected to be sub-10%. This is partially due to large
repayment of INR21.5b from the telecom segment.
NIM is expected to remain steady QoQ at 3.4%. While pressure on
cost of funds is expected to continue, redeployment of funds from
lower yielding investments to loans will provide cushion to NIM.
Fee income (ex-forex) is expected to grow by 11% YoY. However, forex
income is expected to be strong and help overall non-interest income.
Asset quality performance remains strong and it would be a key
indicator to watch.
Modeled provision expense of INR400m v/s INR181m in 2QFY14 and
INR246m in 3QFY13 to provide a buffer for credit cost. Maintain Buy.

Utilizing the strong capitalization for business growth would be vital.
Demonstration of operating leverage and performance and outlook
on asset quality remains critical.
Over the past few quarters, SA deposit growth has been in low single
digits, although it picked up in 2QFY14. Sustaining and improving the
same would be a positive.
(INR Million)
Y/E March
Interest Income
Interest Expense
Net Interest Income
% Change (Y-o-Y)
Other Income
Net Income
Operating Expenses
Operating Profit
% Change (Y-o-Y)
Other Provisions
Profit before Tax
Tax Provisions
Net Profit
% Change (Y-o-Y)
NIM (Reported,%)
NIM (Cal, %)
Deposit Growth (%)
Loan Growth (%)
CD Ratio (%)
CASA Ratio (%)
Tax Rate (%)
Asset Quality
Gross NPA (INR B)
Gross NPA (%)
Net NPA (%)
January 2014
1Q
11,714
8,281
3,433
31.0
1,710
5,142
2,967
2,175
48.1
267
1,908
607
1,301
38.4
FY13
2Q
3Q
11,976
12,389
8,288
8,359
3,688
4,029
21.5
24.5
1,689
1,866
5,377
5,895
3,100
3,263
2,276
2,633
20.2
24.6
64
246
2,213
2,387
710
764
1,502
1,623
30.2
35.8
FY14
4Q
12,537
8,301
4,237
32.7
2,004
6,241
3,398
2,843
29.0
336
2,507
804
1,703
33.7
1Q
13,086
8,832
4,254
23.9
2,445
6,699
3,430
3,269
50.3
681
2,588
837
1,751
34.6
2Q
13,173
8,770
4,403
19.4
1,847
6,250
3,487
2,764
21.4
181
2,583
820
1,763
17.4
3QE
13,915
9,405
4,509
11.9
2,175
6,684
3,673
3,011
14.4
400
2,611
836
1,776
9.4
4QE
14,867
10,291
4,576
8.0
2,422
6,998
3,814
3,184
12.0
520
2,664
850
1,814
6.5
3.3
3.3
14.6
22.8
81.5
33.3
31.8
3.5
3.4
17.8
20.8
83.0
32.8
32.1
3.6
3.6
19.1
20.2
83.8
31.7
32.0
3.7
3.5
17.4
10.6
76.9
32.5
32.1
3.6
3.4
14.1
13.0
80.7
30.2
32.3
3.5
3.5
10.7
9.4
82.1
32.5
31.7
3.5
11.5
9.2
82.1
3.3
12.0
16.0
79.6
32.0
5.9
2.0
0.19
5.8
1.9
0.13
5.7
1.8
0.05
5.7
1.8
0.03
5.9
1.8
0.19
5.7
1.7
0.19
6.5
1.8
0.21
FY13
FY14E
48,616
33,230
15,386
27.3
7,269
22,655
12,728
9,927
29.3
912
9,014
2,885
6,130
34.3
55,040
37,298
17,743
15.3
8,889
26,631
14,403
12,228
23.2
1,782
10,446
3,343
7,104
15.9
31.9
3.5
3.4
17.4
10.6
76.9
32.5
32.0
32.0
7.6
2.0
0.23
5.7
1.8
0.03
7.6
2.0
0.23
3.5
12.0
16.0
79.6
C69
Kotak Mahindra Bank

Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
KMB IN
766.6
565 / 9
804 / 588
-5 / -8 / 4
Financials & Valuation (Standalone, INR b)

Y/E March
2013 2014E 2015E
NII
32.1 37.4 43.7
OP
21.6 26.5 30.3
NP
13.6 14.8 17.4
NIM (%)
4.6
4.5
4.6
EPS (INR)
29.3 33.0 37.8
EPS Gr. (%)
18.5 12.6 14.6
Cons. BV. (INR) 204.3 236.3 273.0
Cons. RoE (%)
15.5 15.0 14.8
RoA (%)
1.8
1.7
1.7
Payout (%)
2.8
2.9
2.9
Valuations
P/E(X) (Cons.)
25.2 22.3 19.5
P/BV (X) (Cons.) 3.6
3.1
2.7
P/ABV (X) (Cons.) 3.7
3.2
2.8
Div. Yield (%)
0.1
0.1
0.1
2016E
51.9
35.1
20.0
4.7
43.0
13.8
314.8
14.6
1.7
2.9
17.1
2.3
2.4
0.1
CMP: INR737
Neutral
Lending business
Profit from the lending business is expected to moderate to ~7% YoY,
led by muted profitability for the standalone bank. Profitability for
Kotak Prime is expected to be strong at 25% YoY.
For the standalone bank, we expect loan growth to be moderate at
10% YoY and PAT to be flat. Margins are expected to be stable QoQ,
and credit cost (including standard asset provisioning) to be ~40bp
(30bp in 3QFY13).
Capital Market and Asset Management business
We expect PAT from Capital Market related businesses to be flat both
on a sequential and YoY basis.
In the Asset Management business, profitability is expected to
improve 23% YoY. Overall contribution of capital market and asset
management business would continue to be low at near 10%. Maintain
Neutral.
Business growth and CASA trends.
Asset quality trends, especially in the CV segment.
KMB Group: Earnings Trends
(INR Million)
Y/E March
Kotak Bank (Standalone)
Kotak Prime
Kotak Mah. Investments
Lending Business
YoY Growth (%)
Kotak Securities
Kotak Mah. Capital Co.
Capital Market Business
YoY Growth (%)
Intl. Subsidiaries
Kotak Mah. AMC & Trustee Co.
Kotak Investment Advisors
Asset Management Business
YoY Growth (%)
Consol. PAT excluding Kotak Life
YoY Growth (%)
Kotak OM Life Insurance
Consolidation Adjust.
Consol. PAT Including Kotak Life
YoY Growth (%)
E: MOSL Estimates
January 2014
1Q
2,824
940
40
3,804
9.0
230
60
290
20.8
-50
40
80
70
-58.8
4,164
6.8
320
-50
4,435
6.6
FY13
2Q
3Q
2,804
3,617
1,140
1,050
160
80
4,104
4,747
16.3
23.9
400
380
40
20
440
400
76.0
42.9
80
50
-50
110
90
60
120
220
50.0
266.7
4,664
5,367
20.8
28.7
470
530
-112
-125
5,022
5,772
16.0
24.6
FY14
4Q
4,362
1,190
50
5,602
40.1
130
40
170
-69.1
-10
20
80
90
-43.8
5,862
24.5
580
214
6,656
27.8
1Q
4,028
1,170
40
5,238
37.7
310
40
350
20.7
-100
70
10
-20
-128.6
5,568
33.7
710
-3
6,275
41.5
2Q
3,525
1,250
110
4,885
19.0
400
-20
380
-13.6
10
170
40
220
83.3
5,485
17.6
440
-96
5,829
16.1
3QE
3,624
1,313
125
5,062
6.6
360
30
390
-2.5
30
180
60
270
22.7
5,722
6.6
460
-50
6,132
6.2
4QE
3,661
1,401
124
5,186
-7.4
364
41
405
138.2
60
180
90
330
266.7
5,921
1.0
480
-80
6,321
-5.0
FY13
FY14E
13,607
4,307
336
18,250
22.9
1,145
167
1,312
-0.4
60
35
307
401
-0.8
19,964
20.4
1,900
21
21,885
19.4
14,839
5,133
399
20,371
11.6
1,434
91
1,525
16.2
0
600
200
800
99.3
22,696
13.7
2,090
-150
24,636
12.6
C70
Oriental Bank of Commerce

Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
OBC IN
291.8
67 / 1
367 / 121
22 / 3 / -42

Y/E March
NII
OP
NP
NIM (%)
EPS (INR)
EPS Growth (%)
BV/Sh. (INR)
ABV/Sh. (INR)
RoE (%)
RoA (%)
Div. Payout (%)
Valuations
P/E (x)
P/BV (x)
P/ABV (x)
Div. Yield (%)
2013 2014E 2015E

47.0 52.4 60.5
36.9 38.0 43.1
13.3 11.1 12.8
2.7
2.6
2.7
46
37
43
16.3 -18.6 15.7
415
437
470
350
342
364
11.5
8.8
9.5
0.7
0.5
0.5
23.4 23.2 23.2
5.0
0.6
0.7
4.0
6.2
0.5
0.7
3.2
5.3
0.5
0.6
3.8
2016E
68.0
46.8
14.9
2.6
50
16.1
508
398
10.2
0.5
23.2
4.6
0.4
0.6
4.4
CMP: INR228
Buy
Bank is cautiously growing its balance sheet. Hence, loan and deposit
growth each is expected to be lower than industry average at 9% YoY.
Margins are expected to be stable QoQ at 2.8%. While systemic interest
rate remains high, bank has reduced its dependence on bulk deposits,
which should help contain the increase in cost of funds.
Pressure on asset quality is expected to continue. Hence, factor net
slippage ratio of 2.7% v/s 2.8% in 2QFY14 and credit cost of 0.9% v/s 1%
in 2QFY14.
At end-2QFY14, management had given a guidance of INR20b of
restructuring for 2HFY14. While the restructured pool is expected to
increase, bonds issuance by SEBs will help to an extent.
Increase in provisions is expected to be driven by elevated provisioning
from depreciation on investments and higher tax rate, which in turn
will result in lower earnings (decline 24% YoY). Maintain Buy.
Balance sheet growth and outlook on NIM.
Tax rate: In 1QFY14, bank made higher tax provisions and effective
tax rate stood at 36%; declined to 8% in 2QFY14. Currently, we factor
a tax rate of 19%.
(INR Million)
Y/E March
Interest Income
Interest Expense
Net Interest Income
% Change (YoY)
Other Income
Net Income
Operating Expenses
Operating Profit
% Change (YoY)
Other Provisions
Profit before Tax
Tax Provisions
Net Profit
% Change (YoY)
NIM (Rep, %)
NIM (Cal,%)
Deposit Growth (%)
Loan Growth (%)
CD Ratio (%)
CASA Ratio (%)
Tax Rate (%)
Asset Quality
OSRL (INR b)
OSRL (%)
Gross NPA (INR b)
Gross NPA (%)
January 2014
1Q
42,872
31,613
11,258
10.6
4,084
15,343
6,377
8,965
11.9
3,321
5,644
1,730
3,914
10.4
FY13
2Q
3Q
44,146
44,687
32,575
32,643
11,571
12,044
16.9
5.7
4,068
3,778
15,639
15,822
6,427
6,559
9,212
9,264
21.5
12.0
4,599
6,038
4,614
3,226
1,592
-39
3,022
3,264
80.2
-7.9
FY14
4Q
45,343
33,205
12,138
13.6
4,617
16,755
7,290
9,465
25.5
7,588
1,878
-1,202
3,079
16.2
1Q
47,177
34,106
13,070
16.1
5,381
18,451
7,568
10,883
21.4
5,327
5,555
2,022
3,534
-9.7
2Q
46,758
33,949
12,809
10.7
3,119
15,928
7,677
8,251
-10.4
5,505
2,746
232
2,514
-16.8
2.8
2.7
9.4
16.0
71.3
24.0
30.7
2.8
2.7
9.8
12.5
71.8
24.1
34.5
2.8
2.7
7.9
11.7
72.7
23.9
-1.2
2.8
2.7
12.8
15.2
73.3
23.9
-64.0
2.9
2.8
11.5
12.4
71.8
23.5
36.4
2.8
2.7
6.7
9.2
73.3
24.5
8.4
105.7
9.3
33.8
3.0
109.4
9.2
34.7
2.9
109.9
8.9
36.9
3.0
99.4
7.6
41.8
3.2
102.7
8.0
43.0
3.4
94.1
7.3
48.9
3.8
3QE
48,273
35,317
12,956
7.6
4,029
16,985
7,943
9,042
-2.4
5,977
3,065
567
2,498
-23.5
4QE
51,202
37,606
13,596
12.0
4,634
18,230
8,454
9,776
3.3
6,523
3,253
688
2,564
-16.7
2.7
8.1
9.2
73.3
2.7
11.0
12.2
74.0
18.5
54.6
4.0
FY13
FY14E
177,048
130,036
47,012
11.5
16,547
63,559
26,652
36,907
17.5
21,546
15,361
2,081
13,279
16.3
193,410
140,978
52,432
11.5
17,162
69,594
31,642
37,952
2.8
23,333
14,619
3,508
11,110
-16.3
21.2
2.8
2.7
12.8
15.2
73.3
23.9
13.5
24.0
59.7
4.1
99.4
7.6
41.8
3.2
59.7
4.1
2.6
11.0
12.2
74.0
C71

Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
PNB IN
353.5
224 / 4
922 / 402
17 / -13 / -35
CMP: INR635

Y/E March
2013 2014E 2015E
NII
148.6 162.0 180.4
OP
109.1 110.9 123.4
NP
47.5 33.4 43.1
NIM (%)
3.4
3.4
3.3
EPS (INR)
134
94
122
EPS Gr. (%)
-6.7 -29.7 29.0
BV/Sh. (INR)
884
957 1,050
ABV/Sh. (INR)
751
754
801
ROE (%)
16.5 10.3 12.1
ROA (%)
1.0
0.7
0.7
Div. Payout (%) 23.3 23.2 23.2
Valuations
P/E(X)
4.7
6.7
5.2
P/BV (X)
0.7
0.7
0.6
P/ABV (X)
0.8
0.8
0.8
Div. Yield (%)
4.3
3.0
3.8
2016E
203.6
138.1
49.9
3.3
141
15.9
1,158
884
12.8
0.8
23.2
4.5
0.5
0.7
4.5
Buy
Loan growth is expected to improve QoQ (+4% QoQ) as the strategy of

consolidation is now behind. However, on a YoY basis, loan growth is
expected to be below industry average at 10%.
NIM is expected to moderate marginally to ~3.4%, led by increase in
cost of funds and incremental growth in low yielding segments (top
corporates and secured retail).
Fee income growth is expected to be moderate at 7% YoY.
Bank adopted the amortization of MTM in three quarters. Hence, we
factor net investment loss of INR2.2b, compared to a gain of INR410m
in 3QFY13.
With macro-economic environment challenges prevailing in the
system, we factor net slippage ratio of 2.3% v/s 2% in 2QFY14. Hence,
credit cost is expected to remain high at 1.2%. Maintain Buy.

Management strategy: (1) balance sheet growth, (2) liability mix and
(3) asset quality management.
Pipeline of restructured loans.
(INR Million)
Y/E March
Interest Income
Interest Expense
Net Interest Income
% Change (YoY)
Other Income
Net Income
Operating Expenses
Operating Profit
% Change (YoY)
Other Provisions
Profit before Tax
Tax Provisions
Net Profit
% Change (YoY)
NIM (Rep, %)
NIM (Cal, %)
Deposit Growth (%)
Loan Growth (%)
CD Ratio (%)
CASA Ratio (%)
Tax Rate (%)
Asset Quality
OSRL (INR B)
OSRL (%)
Gross NPA (INR B)
Gross NPA (%)
January 2014
1Q
105,540
68,608
36,931
18.5
11,680
48,611
20,203
28,409
14.8
10,325
18,084
5,627
12,457
12.7
FY13
2Q
3Q
104,280 105,288
67,804
67,954
36,476
37,333
5.6
5.6
9,072
9,705
45,548
47,038
20,219
20,219
25,329
26,819
0.2
0.2
10,738
8,016
14,590
18,803
3,935
5,747
10,656
13,056
-11.6
13.5
FY14
4Q
103,788
66,001
37,787
14.2
11,740
49,527
21,010
28,517
-2.9
14,777
13,740
2,423
11,317
-20.5
1Q
104,045
64,970
39,075
5.8
13,421
52,496
22,758
29,738
4.7
10,665
19,073
6,320
12,753
2.4
2Q
107,335
67,180
40,155
10.1
8,993
49,149
23,800
25,348
0.1
18,987
6,361
1,306
5,055
-52.6
3.6
3.5
18.9
21.2
76.4
35.6
31.1
3.5
3.4
17.3
18.4
73.5
37.0
27.0
3.5
3.4
8.2
13.2
77.1
38.4
30.6
3.5
3.4
3.2
5.1
78.8
40.9
17.6
3.5
3.5
3.0
3.6
76.9
39.6
33.1
3.5
3.5
1.2
6.5
77.4
40.7
20.5
240.5
8.2
99.9
3.3
259.0
8.8
140.2
4.7
285.3
9.6
140.0
4.6
305.3
9.9
134.7
4.3
319.1
10.5
150.9
4.8
348.2
11.1
165.3
5.1
3QE
111,877
70,855
41,022
9.9
9,984
51,006
24,271
26,735
-0.3
15,565
11,171
3,575
7,596
-41.8
4QE
117,388
75,622
41,766
10.5
11,787
53,553
24,443
29,110
2.1
17,324
11,785
3,800
7,985
-29.4
FY13
FY14E
418,933
270,368
148,565
10.8
42,159
190,724
81,651
109,074
2.8
43,856
65,218
17,741
47,477
-2.8
440,646
278,627
162,018
9.1
44,185
206,204
95,272
110,931
1.7
62,541
48,390
15,001
33,389
-29.7
3.5
9.4
9.8
77.4
3.4
14.0
12.0
77.5
32.0
32.2
3.5
3.4
3.2
5.1
78.8
40.9
27.2
191.3
5.4
305.3
9.9
134.7
4.3
179.3
5.4
3.4
14.0
12.0
77.5
31.0
191.3
5.4
C72
State Bank of India

Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
SBIN IN
684.0
1,211 / 20
2,550 / 1,453
-3 / -20 / -36
CMP: INR1,770

Y/E March
NII
OP
NP
NIM (%)
EPS (INR)
EPS Gr. (%)
Cons. BV (INR)
Cons.ABV (INR)
RoE (%)
RoA (%)
Div. Payout (%)
Valuations
Cons. P/E (x)
Cons. P/BV (x)
Cons P/ABV (x)
Div. Yield (%)
2013
443.3
310.8
141.0
3.3
262
14.6
1,769
1,475
15.9
1.0
18.5
2014E
496.9
289.4
105.1
3.2
195
-25.4
1,928
1,439
10.6
0.6
18.5
2015E
553.9
336.3
127.7
3.1
238
21.9
2,122
1,564
11.8
0.7
18.5
2016E
635.2
386.4
145.6
3.1
272
14.3
2,344
1,730
12.3
0.7
18.5
6.4
0.9
1.1
2.3
8.5
0.9
1.2
1.8
7.1
0.8
1.1
2.1
6.2
0.7
1.0
2.4
Buy
Loan growth is expected to be in line with industry at 17%+ YoY, while

deposit growth is expected to be lower at ~15%.
Expect NIM to improve by ~5bp QoQ, modeled NIM at 3.7%, with an
increase in 20bp base rate during the quarter. Also, NII is expected to
grow by 14% YoY.
Fee income growth is expected to be flat YoY. We factor net investment
loss of INR4b, compared to a gain of INR2.2b in 2QFY14 and INR5.4b in
3QFY13, thus dragging earnings.
Macro-economic environment remains challenging and we factor net
slippage ratio of 2.1% and credit cost of 100bp.
Thus, we expect PAT to decline 33% YoY and be at INR22.8b.
Excluding subsidiaries, the stock trades at 0.8x FY15E consolidated BV
(adjusted for value of insurance) and 7.1x FY15E EPS. Maintain Buy.

Business growth and margin outlook.
Performance relating to asset quality and restructuring pipeline.
(INR Million)
Y/E March
Interest Income
Interest Expense
Net Interest Income
% Change (YoY)
Other Income
Net Income
Operating Expenses
Operating Profit
% Change (YoY)
Other Provisions
Profit before Tax
Tax Provisions
Net Profit
% Change (YoY)
NIM (Reported, %)
NIM (Cal, %)
Deposit Growth (%)
Loan Growth (%)
Domestic CD Ratio (%)
CASA Ratio (%)
Tax Rate (%)
Asset Quality
OSRL (INR B)
OSRL (%)
Gross NPA (INR B)
Gross NPA (%)
January 2014
1Q
289,225
177,979
111,246
14.7
34,931
146,177
64,410
81,767
12.9
24,563
57,204
19,688
37,516
136.9
FY13
2Q
3Q
296,068 303,436
186,330 191,892
109,738 111,545
4.7
-3.2
33,466
36,485
143,205 148,030
69,668
70,122
73,536
77,908
-1.6
7.3
18,256
26,679
55,280
51,229
18,699
17,268
36,581
33,961
30.2
4.1
FY14
4Q
307,842
197,058
110,784
-4.4
55,467
166,251
88,645
77,606
-19.1
41,810
35,797
2,804
32,992
-18.5
1Q
317,183
202,065
115,119
3.5
44,743
159,862
84,349
75,513
-7.6
28,659
46,854
14,443
32,411
-13.6
2Q
339,221
216,707
122,514
11.6
32,778
155,292
92,175
63,117
-14.2
30,287
32,829
9,079
23,750
-35.1
3.6
3.7
16.1
18.9
77.8
46.1
34.4
3.3
3.4
16.5
17.2
76.6
45.0
33.8
3.3
3.4
15.6
15.6
79.2
45.5
33.7
3.2
3.2
15.2
20.5
82.4
46.5
7.8
3.2
3.2
14.0
15.7
78.8
44.7
30.8
3.2
3.3
14.0
19.0
80.5
43.6
27.7
164
1.8
472
5.0
219
2.4
492
5.2
238
2.4
535
5.3
322
3.1
512
4.8
330
3.1
609
5.6
392
3.6
642
5.6
3QE
352,292
224,892
127,399
14.2
36,666
164,066
92,582
71,484
-8.2
39,791
31,693
8,874
22,819
-32.8
FY13
FY14E
4QE
367,550 1,196,571 1,376,246
235,703 753,258 879,367
131,847 443,313 496,879
19.0
2.4
12.1
54,833 160,348 169,020
186,679 603,661 665,899
107,368 292,844 376,474
79,312 310,817 289,425
2.2
-1.6
-6.9
42,662 111,308 141,399
36,650 199,509 148,026
10,531
58,459
42,927
26,119 141,050 105,098
-20.8
20.5
-25.5
28.7
3.3
3.3
15.2
20.5
82.4
46.5
29.3
29.0
729
5.9
322
3.1
512
4.8
729
5.9
3.3
15.1
17.3
3.3
16.0
15.0
28.0
680
5.8
3.2
16.0
15.0
C73
Union Bank of India

Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
UNBK IN
596.8
78 / 1
288 / 97
8 / -39 / -62
CMP: INR130

Y/E March
2013 2014E 2015E
NII
75.4 80.4 93.4
OP
55.8 54.9 60.3
NP
21.6 14.5 17.6
NIM (%)
2.8
2.5
2.5
EPS (INR)
36
24
29
EPS Gr. (%)
11.5 -32.9 21.0
BV/Sh. (INR)
263
281
304
ABV/Sh. (INR)
224
209
216
RoE (%)
15.0
8.9 10.0
RoA (%)
0.7
0.4
0.4
Div. Payout (%) 25.8 23.2 23.2
Valuations
P/E(X)
3.6
5.4
4.5
P/BV (X)
0.5
0.5
0.4
P/ABV (X)
0.6
0.6
0.6
Div. Yield (%)
6.1
3.7
4.5
2016E
109.9
68.8
20.2
2.5
34
15.4
330
244
10.7
0.4
23.2
3.9
0.4
0.5
5.2
Neutral
Loan and deposit are expected to grow at 21% YoY and 25% YoY
respectively.
While pressure on cost of funds has increased, lower dependence on
bulk borrowings will help the bank to contain cost of funds. Hence,
factored flat NIM of 2.5% (on an already lower base).
We model net investment gains of INR250m v/s INR710m in 3QFY13.
Fee income growth is expected to be in mid-teens.
Stress creation is expected to remain elevated. Hence, we factor net
slippage ratio of 2.5% and credit cost of 0.9% for 3QFY14.
Restructured loans portfolio would continue to rise. At end-2QFY14,
management had given a guidance of expected restructuring of
INR20b+ for 2HFY14.
PPP and earnings are expected to remain flat YoY. Maintain Neutral.

Performance of net slippages on the asset quality front and
restructuring pipeline, which is on the rise.
CASA ratio and margins are on a continuous decline. Trends and efforts
to improve the same need to be watched.
(INR Million)
Y/E March
Interest Income
Interest Expense
Net Interest Income
% Change (YoY)
Other Income
Net Income
Operating Expenses
Operating Profit
% Change (YoY)
Other Provisions
Profit before Tax
Tax Provisions
Net Profit
% Change (YoY)
NIM (Reported,%)
NIM (Cal, %)
Deposit Growth (%)
Loan Growth (%)
CD Ratio (%)
CASA Ratio (%)
Tax Rate (%)
Asset Quality
Gross NPA (INR b)
Gross NPA (%)
E: MOSL Estimates
January 2014
1Q
60,699
42,482
18,217
14.6
4,912
23,129
10,459
12,671
8.7
5,185
7,486
2,370
5,116
10.2
FY13
2Q
3Q
61,098
63,199
42,597
44,284
18,502
18,915
11.4
9.9
5,458
6,395
23,960
25,310
11,234
11,726
12,727
13,584
5.6
5.8
4,871
8,573
7,856
5,010
2,310
1,986
5,546
3,024
57.3
53.5
FY14
4Q
66,251
46,456
19,795
8.7
8,755
28,550
11,703
16,846
5.4
6,555
10,291
2,397
7,894
2.1
1Q
68,573
49,482
19,091
4.8
7,563
26,654
12,536
14,118
11.4
6,816
7,302
1,700
5,602
9.5
2Q
72,711
53,167
19,545
5.6
6,112
25,656
13,407
12,249
-3.7
9,368
2,882
801
2,081
-62.5
3QE
76,400
56,091
20,309
7.4
6,887
27,196
13,685
13,511
-0.5
9,237
4,274
1,175
3,099
2.5
4QE
79,679
58,202
21,477
8.5
7,886
29,363
14,362
15,001
-11.0
9,837
5,164
1,426
3,738
-52.6
3.0
3.0
11.5
19.1
78.3
30.9
31.7
3.0
3.0
15.6
19.4
78.1
30.5
29.4
3.0
2.9
16.6
21.3
79.4
31.3
39.6
2.9
2.8
18.3
17.0
80.3
31.0
23.3
2.6
2.5
22.3
16.0
74.6
29.1
23.3
2.5
2.5
27.0
25.7
77.2
28.3
27.8
2.5
24.7
21.6
76.9
2.5
20.0
15.0
76.8
27.5
65.4
3.8
64.7
3.7
63.8
3.4
63.1
3.0
70.9
3.5
80.6
3.6
89.1
3.9
FY13
FY14E
251,247
175,819
75,428
11.0
25,520
100,949
45,122
55,827
6.3
25,185
30,642
9,063
21,579
20.7
297,363
216,941
80,422
6.6
28,447
108,868
53,990
54,879
-1.7
35,257
19,622
5,102
14,520
-32.7
27.6
3.0
2.8
18.3
17.0
80.3
31.0
29.6
26.0
98.2
4.0
63.1
3.0
98.2
4.0
2.5
20.0
15.0
76.8
C74
Yes Bank
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
YES IN
358.6
134 / 2
547 / 216
1 / -28 / -30
CMP: INR374

Y/E March
2013 2014E 2015E
NII
22.2 27.1 31.9
OP
21.4 26.4 29.8
NP
13.0 15.5 17.8
NIM (%)
2.8
2.8
2.9
EPS (INR)
36.3 43.3 49.7
EPS Gr. (%)
31.0 19.5 14.6
BV/Sh. (INR)
161.9 196.9 237.1
ABV/Sh. (INR) 161.8 196.5 234.5
RoE (%)
24.8 24.1 22.9
RoA (%)
1.5
1.5
1.5
Div. Payout (%) 19.2 19.1 19.1
Valuations
P/E(X)
10.3
8.6
7.5
P/BV (X)
2.3
1.9
1.6
P/ABV (X)
2.3
1.9
1.6
Div. Yield (%)
1.6
1.9
2.2
2016E
37.2
34.4
20.2
3.0
56.2
13.2
282.5
278.2
21.7
1.4
19.1
6.6
1.3
1.3
2.5
Buy
Loan growth is expected improve on a sequential basis. However, on

a YoY basis, it is expected to be largely in line with industry average at
15%. Deposit growth to outpace loan growth and be at 25%+ YoY.
NIM is expected to moderate as cost of funds remains high and bank
has refrained from increasing its base rate. We factor a 5bp+ QoQ
decline in NIM.
Fee income (ex-financial markets) growth is expected to moderate as
the higher base of financial advisory catches up. Expect YoY decline in
financial advisory income. Growth in transaction banking and fees
from third party distribution is expected to remain strong.
YES has demonstrated strong asset quality performance over the
quarters amid a challenging economic environment. We expect the
healthy trend to continue.
Maintain Buy.

Impact and outlook on cost of funds and consequently on NIM.
Rollout of branch network and continuation of the same would be
vital to build its retail business (especially SA deposits).
Capital raising plans.
(INR Million)
Y/E March
Interest Income
Interest Expense
Net Interest Income
% Change (Y-o-Y)
Other Income
Net Income
Operating Expenses
Operating Profit
% Change (Y-o-Y)
Other Provisions
Profit before Tax
Tax Provisions
Net Profit
% Change (Y-o-Y)
NIM (Reported,%)
NIM (Cal, %)
Deposit Growth (%)
Loan Growth (%)
Customer assets growth (%)
CD Ratio (%)
CASA Ratio (%)
Asset Quality
Gross NPA (INR B)
Gross NPA (%)
E: MOSL Estimates
January 2014
1Q
18,863
14,142
4,722
33.3
2,881
7,603
3,007
4,596
41.4
300
4,296
1,395
2,901
34.3
FY13
2Q
3Q
19,864
21,336
14,622
15,493
5,242
5,843
35.9
36.7
2,768
3,132
8,009
8,975
3,162
3,341
4,847
5,635
25.6
41.3
317
567
4,530
5,068
1,469
1,645
3,061
3,423
30.2
34.7
FY14
4Q
22,877
16,495
6,381
42.4
3,794
10,175
3,836
6,339
47.3
975
5,364
1,742
3,622
33.2
1Q
23,979
17,388
6,591
39.6
4,421
11,012
4,212
6,800
47.9
970
5,830
1,821
4,008
38.2
2Q
25,013
18,292
6,721
28.2
4,461
11,182
4,053
7,129
47.1
1,791
5,338
1,626
3,711
21.3
2.8
2.8
15.2
16.4
32.4
76.7
16.3
2.9
2.9
18.6
22.9
32.5
80.4
17.3
3.0
3.1
20.2
22.3
27.4
77.8
18.3
3.0
3.0
36.2
23.7
30.9
70.2
18.9
3.0
2.9
29.9
24.3
24.2
73.4
20.2
2.9
3.0
29.2
13.6
12.7
70.6
20.4
1.1
0.3
1.0
0.2
0.8
0.2
0.9
0.2
1.0
0.2
1.3
0.3
3QE
26,378
19,645
6,733
15.2
3,773
10,506
4,390
6,116
8.5
550
5,566
1,753
3,813
11.4
4QE
27,887
20,838
7,050
10.5
4,210
11,260
4,904
6,355
0.3
570
5,785
1,780
4,005
10.6
3.0
27.0
15.3
2.9
15.0
15.0
70.6
70.2
2.0
0.4
2.6
0.5
FY13
FY14E
82,940
60,752
22,188
37.3
12,574
34,762
13,345
21,417
39.1
2,160
19,257
6,251
13,007
33.1
103,257
76,162
27,095
22.1
16,865
43,959
17,560
26,400
23.3
3,881
22,518
6,981
15,538
19.5
2.9
2.8
36.2
23.7
30.9
70.2
18.9
0.9
0.2
2.8
15.0
15.0
70.2
20.5
2.6
0.5
C75
December 2013 Results Preview | Sector: Financials - NBFC
Financials NBFC
Growth rates to remain healthy; marginal pressure on spreads
Companies Covered
The performance of retail NBFCs (HFCs and AFCs) is expected to remain strong, led by
healthy loan growth (+20%), largely stable margins and asset quality outlook. While
competition from banks in the retail financing space is intensifying, growth outlook
remains healthy, led by the buoyancy in semi urban and rural economy, market share
gain, loan mix change, unique customer base and expanding branch network. Within
the NBFC space, we continue to like HDFC, IDFC and BAF.
Bajaj Finance
HDFC
IDFC
LIC Housing Fin
Housing finance companies: For housing finance companies (HFCs), 3QFY14E is likely
to remain a steady quarter, as growth in individual loans remains buoyant and asset
quality healthy. We expect overall loan growth for HDFC and LIC Housing Finance
(LICHF) to remain healthy at +20%. Margins are likely to remain stable/marginally
moderate on a sequential basis. No major regulatory changes were announced during
the quarter. HDFC remains our preferred pick; we also like LICHF on valuation.
M & M Financial
Power Finance Corp
Infrastructure finance companies: Infrastructure sector continues to remain in a fragile

state. However, government has cleared projects worth over INR1.5t over the past
few months, which is good for the sector and will have a positive impact but with a
lag. While the reforms initiated for discoms have started to bear results and is a relief
for state-owned NBFCs like RECL and POWF, fuel availability remains the most critical
issue for the power sector and a resolution is still not in sight. Among the infrastructure
finance companies, we expect growth to remain healthy for REC and PFC at +20%.
However, growth rates for IDFC are likely to moderate sub 10%. Margins are likely to
moderate during the quarter. While large account unlikely to fall into the NPA category,
asset quality will remain a key monitorable in the current environment.

CMP
(INR)
27.12.13
Financials - NBFC
Bajaj Finance
1,530
HDFC
789
IDFC
106
LIC Housing Fin
217
M & M Financial
320
Power Finance Corp
163
217
673
NBFC Bkg. Sector Aggregate
Rating
Buy
Buy
Buy
Buy
Buy
Neutral
Neutral
Buy
(INR Million)
Net Interest Income
Dec.13
Var.
Var.
% YoY % QoQ
Operating Profit
Dec.13
Var.
Var.
% YoY % QoQ
Net Profit
Dec.13
Var.
% YoY
6,517
17,347
6,726
4,691
7,208
21,122
17,533
9,322
90,466
3,823
18,017
7,641
4,394
4,906
20,932
17,790
7,652
85,155
1,965
13,069
4,340
3,381
2,505
13,777
12,398
3,351
54,787
29.3
12.7
2.5
26.9
28.4
25.9
22.6
4.2
18.5
12.4
9.9
-2.0
3.5
6.3
0.1
0.6
3.0
3.6
32.6
13.7
8.7
24.7
29.4
27.0
24.4
5.6
19.7
25.3
3.8
1.7
-4.0
6.1
1.6
1.7
3.8
3.1
22.2
14.6
-4.6
43.1
25.1
19.6
18.9
-3.1
15.7
Var.
% QoQ
17.6
3.2
-10.8
9.0
13.2
0.6
5.4
2.5
2.9
Sunesh Khanna (Sunesh.Khanna@MotilalOswal.com) / Alpesh Mehta (Alpesh.Mehta@MotilalOswal.com)

January 2014
C76
Asset finance companies: Retail asset finance companies (AFCs) delivered strong
performance both in terms of growth and asset quality in the current cycle. Among
AFCs under our coverage, we expect both MMFS and Bajaj Finance to report healthy
growth in AUM led by good monsoon, strong festival season and continued buoyancy
in rural India. SHTF delivered healthy growth in the previous three quarters despite
the sluggish CV sales; however, such high growth is concerning, given the stress in CV
segment and increasing delinquency levels. Margins are likely to moderate
sequentially due to increase in wholesale funding costs. Asset quality will remain a
key monitorable, given the continued stress on CV/UV/tractors/car sales. BAF is our
preferred pick in this segment.
Sens ex Index
MOSL Fi na nci al s Index
120
Sens ex Index
MOSL Fi nanci al s Index
120
115
105
110
90
105
75
100
Dec-13
Sep-13
Jun-13
Dec-12
Dec-13
Nov-13
Oct-13
Sep-13
Mar-13
60
95
CMP (INR)
27.12.13
Financials - NBFC
Bajaj Finance
1,530
Dewan Housing
212
HDFC
789
IDFC
106
LIC Housing Fin
217
M & M Financial
320
Power Finance Corp 163
Rural Electric. Corp. 217
Shriram Transport
673
NBFC Aggregate
January 2014
Rating
EPS (INR)
FY13 FY14E FY15E
P/E (x)
FY13 FY14E FY15E
Buy
Buy
Buy
Buy
Buy
Buy
Neutral
Neutral
Buy
118.8
35.2
31.4
12.1
20.3
15.7
34.3
38.7
64.7
12.9
6.0
25.2
8.7
10.7
20.4
4.7
5.6
10.4
12.2
150.9
44.2
35.2
12.8
24.7
17.8
41.0
47.2
65.0
180.6
54.1
40.1
14.6
28.9
21.2
45.2
52.9
73.7
10.1
4.8
22.4
8.3
8.8
18.0
4.0
4.6
10.4
10.5
8.5
3.9
19.7
7.2
7.5
15.1
3.6
4.1
9.1
9.3
P/BV (x)
FY13 FY14E FY15E
2.3
0.8
4.9
1.2
1.7
4.0
0.9
1.2
2.1
2.5
1.9
0.7
4.4
1.1
1.4
3.5
0.8
1.0
1.8
2.1
1.6
0.6
4.0
1.0
1.3
3.0
0.7
0.9
1.5
1.8
RoE (%)
FY13 FY14E FY15E
21.9
17.1
23.8
14.1
16.8
23.4
20.1
23.6
20.6
20.3
20.4
16.3
25.6
13.4
17.8
20.8
20.7
24.1
17.5
19.8
20.6
17.2
25.2
13.9
17.9
21.2
19.6
22.6
17.1
19.6
C77
Bajaj Finance
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
BAF IN
49.8
76 / 1
1,591 / 966
7/1/8
CMP: INR1,530
Bajaj Finance continues to ride high on its diversification strategy and

strong focus. Healthy growth momentum seen in the consumer and
SME segments. AUM is expected to grow at a healthy pace at 30%.
Margins are likely to improve during this quarter due to robust

consumer durable sales; during last quarter, margins stood at 11.9%.
We expect NII to grow at 30% YoY and 12% QoQ.
Asset quality is expected to remain stable. As on September 2013,

GNPAs were 1.14% and NNPAs were 0.26%.
We expect provisions of INR950m v/s INR510m during 3QFY13 and

INR523m during the last quarter.
We expect net profit to grow at 20% YoY to INR1.7b.
The stock trades at 1.7x FY14E and 1.5x FY15E BV. Maintain Buy.

Y/E March
2013 2014E 2015E
NII
17.2 22.5 28.0
PPP
10.5 13.9 17.3
PAT
5.9
7.5
9.0
EPS (INR)
119
151
181
EPS Gr. (%)
21
27
20
BV/Share (INR) 676
801
950
RoA on AUM (%) 3.8
3.7
3.5
RoE (%)
21.9 20.4 20.6
Payout (%)
12.6 14.0 14.0
Valuations
P/E (x)
11.8
9.3
7.8
P/BV (x)
2.1
1.7
1.5
Div. Yield (%)
1.1
1.6
1.9
2016E
34.0
21.0
10.5
210
16
1,123
3.3
20.3
14.0
6.7
1.2
2.3
Buy

Business growth momentum, as the company has been growing its
AUMs at 25%+ rate for the past 12 quarters.
Margin trends as NIMs generally increase during 3Q.
Asset quality trends in CE and two-wheeler business.
(INR Million)
Y/E March
Income from operations
Other Operating Income
Operating Income
YoY Growth (%)
Interest expenses
Net Income
YoY Growth (%)
Other income
Total Income
Operating Expenses
Operating Profit
YoY Growth (%)
Provisions and Cont.
Profit before Tax
Tax Provisions
Net Profit
YoY Growth (%)
Loan Growth (%)
Cost to Income Ratio (%)
Tax Rate (%)
E: MOSL Estimates
January 2014
1Q
6,670
343
7,013
56.0
2,636
4,377
41.6
18
4,394
2,010
2,384
41.2
320
2,063
677
1,387
73.1
60.5
45.9
32.8
FY13
2Q
3Q
6,858
7,917
497
333
7,355
8,250
49.6
36.9
2,947
3,209
4,408
5,041
35.9
26.6
11
36
4,419
5,077
1,983
2,195
2,437
2,882
40.9
35.1
534
513
1,903
2,369
616
762
1,287
1,608
37.3
32.2
52.6
41.3
45.0
43.5
32.4
32.1
FY14
4Q
7,803
520
8,323
34.5
3,265
5,058
31.4
112
5,170
2,336
2,834
40.6
450
2,384
746
1,638
56.7
35.4
46.2
31.3
1Q
8,837
446
9,283
32.4
3,314
5,969
36.4
41
6,010
2,703
3,307
38.8
639
2,669
911
1,757
26.7
32.8
45.3
34.1
2Q
8,742
875
9,617
30.7
3,821
5,796
31.5
23
5,819
2,769
3,050
25.2
523
2,527
857
1,670
29.8
29.0
47.8
33.9
3QE
9,887
400
10,287
24.7
3,821
6,466
28.3
24
6,490
2,718
3,772
30.9
950
2,822
892
1,930
20.1
30.6
42.0
31.6
4QE
9,466
500
9,966
19.7
3,441
6,525
29.0
103
6,628
2,793
3,836
35.3
709
3,126
956
2,170
32.5
30.0
42.8
33.5
FY13
FY14E
29,248
1,689
30,937
37.5
12,057
18,880
26.4
177
19,057
8,523
10,357
25.6
1,818
8,540
2,803
5,913
45.5
36.3
45.1
33.5
36,932
2,203
39,135
26.5
14,397
24,738
31.0
191
24,929
10,982
13,756
32.8
2,821
10,935
3,616
7,510
27.0
30.0
44.4
33.1
C78
HDFC
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
HDFC IN
1,546.4
1,219 / 20
931 / 632
-6 / -18 / -14
CMP: INR789

Y/E March
2013 2014E 2015E
NII
61.8 70.5 81.9
PPP
67.2 75.0 87.2
PAT
48.5 54.4 61.9
Adj. EPS (INR)
26.2 29.6 33.9
EPS Gr. (%)
15.3 13.3 14.3
BV/Sh. (INR)
161.7 180.3 199.1
ABV / Sh. (INR) 108.5 127.1 146.0
RoAA (%)
2.7
2.6
2.5
Core RoE (%)
23.8 25.6 25.2
Payout (%)
46.6 46.4 46.4
Valuations
AP/E (x)
22.5 18.7 15.1
P/BV (x)
4.9
4.4
4.0
AP/ABV (x)
5.4
4.4
3.5
Div. Yield (%)
1.6
1.8
2.0
2016E
94.5
100.5
71.5
39.3
16.1
221.3
168.2
2.5
24.8
46.4
13.0
3.6
3.0
2.3
Buy
HDFC's loan growth (net of sell-downs) is likely to remain healthy at

20% YoY and 4.5% QoQ.
Spreads should be largely stable at 2.2-2.3% levels. HDFC has recently
reduced home loan rates by 25bp for retail customers.
NII is likely to remain strong at INR16.2b, registering a growth of 15%
YoY.
Non-interest income is likely to grow 26% YoY.
Asset quality has remained healthy over the past several quarters and
the trend is likely to continue. In 2QFY14, GNPAs were 0.79% on 90
days overdue basis.
We model provisions of INR175m v/s INR400m seen in 3QFY13.
We expect profit to grow at 14.6% YoY at INR13.06b.
The stock trades at 4.4x FY14E AP/ABV and 3.5x FY15E AP/AEPS (price
adjusted for value of other businesses and book value adjusted for
investments made in those businesses). Maintain Buy.

Loan growth and movement in spreads (on individual loans).
Asset quality trends; progress on the recovery of a corporate account
that became NPL during 1QFY14.
(INR Million)
Y/E March
Net Interest Income
YoY Change (%)
Profit on Sale of Inv.
Other operating income
Net Operating Income
YoY Change (%)
Other Income
Total Income
Operating Expenses
Pre Provisioning Profit
YoY Change (%)
Provisions
PBT
YoY Change (%)
Provision for Tax
PAT
YoY Change (%)
E: MOSL Estimates
January 2014
1Q
13,042
19.1
202
2,223
15,467
18.8
74
15,541
1,342
14,199
19.0
400
13,799
17.4
3,780
10,019
18.6
FY13
2Q
3Q
13,859
15,389
11.5
24.5
941
963
2,480
853
17,281
17,206
17.3
18.3
78
84
17,358
17,290
1,477
1,439
15,881
15,851
17.2
17.6
400
400
15,481
15,451
15.7
16.3
3,970
4,050
11,511
11,401
18.6
16.2
FY14
4Q
19,808
13.6
1,049
1,405
22,263
14.4
116
22,379
1,132
21,247
14.9
250
20,997
15.1
5,445
15,552
17.3
1Q
15,208
16.6
0
2,726
17,933
15.9
80
18,013
1,635
16,378
15.3
300
16,078
16.5
4,350
11,728
17.1
2Q
15,789
13.9
868
2,347
19,003
10.0
80
19,083
1,720
17,363
9.3
150
17,213
11.2
4,550
12,663
10.0
3QE
17,347
12.7
650
1,650
19,647
14.2
90
19,737
1,720
18,017
13.7
175
17,842
15.5
4,773
13,069
14.6
4QE
22,187
12.0
638
1,691
24,515
10.1
100
24,615
1,331
23,284
9.6
178
23,106
10.0
6,186
16,919
8.8
FY13
FY14E
61,786
18.5
3,156
7,274
72,216
16.9
351
72,567
5,389
67,178
16.9
1,450
65,728
16.0
17,245
48,483
17.6
70,530
14.2
2,156
8,413
81,098
12.3
350
81,448
6,406
75,042
11.7
803
74,239
12.9
19,859
54,380
12.2
C79
IDFC
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
IDFC IN
1,514.7
161 / 3
185 / 76
1 / -28 / -48

Y/E March
2013 2014E 2015E
NII
25.8 27.6 30.1
PPP
29.4 32.0 35.9
Cons. PAT
18.4 19.4 22.2
EPS (INR)
12.1 12.8 14.6
EPS Gr. (%)
18.0
5.5 14.5
BV/Share (INR) 90.3 99.8 110.7
ABV/Share (INR) 81.3 90.8 101.7
RoAA (%)
2.9
2.8
3.0
Core RoE (%)
15.1 15.5 15.7
Payout (%)
26.2 27.3 27.3
Valuations
P/E (x)
8.7
8.3
7.2
P/BV (x)
1.2
1.1
1.0
P/ABV (x)
1.1
0.9
0.8
Div. Yield (%)
2.5
2.7
3.0
* Adj for value of subs
2016E
33.7
40.0
24.7
16.3
11.6
122.9
113.8
3.0
15.6
27.4
6.5
0.9
0.7
3.4
CMP: INR106
Buy
IDFC has consciously moderated loan growth in the wake of uncertain

macro environment. Loan growth is expected at 1.5% QoQ and 4.7%
YoY.
We expect margins to contract 5bp on a QoQ basis, translating into 2%
YoY growth in NII.
Revenue from Investment Banking and Broking business is expected
to decline sequentially, given the subdued activity levels in capital
markets. However, we expect revenue from fixed income to improve
sequentially. Loan related and other fee income is expected to increase
sequentially to INR300m.
Cost to income ratio on a 12-month rolling basis is likely to remain
stable at 15%. Asset quality is expected to remain stable; we model
provisions of INR1.3b, against INR518m in 3QFY13 and INR501m during
the last quarter.
We expect profit to decline ~5% YoY to INR4.4b.
The stock trades at 0.9x FY14E EPS and 0.8x FY15E ABV. Buy.
Loan growth guidance, given the uncertain macro environment.
Movement in spreads.
Asset quality trends.
(INR Million)
Y/E March
NII
% Change (YoY)
- Infra Loans
- Treasury
Other operating income
- Asset management
- IB and Broking
- Fixed Income
- Loan related/others
Principal investments
Other Income
Net Income
% Change (YoY)
Operating Expenses
Operating profit
% Change (YoY)
Provisions
PBT
Tax
PAT
Less: Consol Adjustments
Consol PAT
% Change (YoY)
E: MOSL Estimates
January 2014
1Q
6,220
29
5,550
670
1,462
640
90
120
612
20
14
7,716
8
1,160
6,556
10
1,026
5,530
1,713
3,817
19
3,798
21
FY13
2Q
3Q
6,430
6,560
29
22
5,960
6,110
470
450
1,568
1,676
690
870
210
80
190
300
478
426
490
70
16
59
8,504
8,365
(19)
(6)
1,241
1,333
7,263
7,032
(21)
(8)
305
518
6,957
6,514
2,188
1,965
4,770
4,549
13
(2)
4,757
4,551
(9)
19
FY14
4Q
6,430
10
6,030
400
2,412
890
400
570
552
1,290
9
10,141
23
1,559
8,581
27
1,647
6,934
1,646
5,289
32
5,257
57
1Q
6,860
10
6,310
550
2,715
930
130
1,390
265
630
6
10,211
32
1,384
8,826
35
592
8,234
2,627
5,607
34
5,573
47
2Q
6,860
7
6,420
440
1,061
1,040
80
(180)
121
960
6
8,886
4
1,375
7,512
3
501
7,011
2,099
4,912
44
4,868
2
3QE
6,726
3
6,255
471
1,565
950
115
200
300
775
0
9,066
8
1,425
7,641
9
1,300
6,341
1,966
4,375
35
4,340
(5)
4QE
6,726
5
6,255
471
1,931
1,043
123
280
486
849
1
9,507
(6)
1,465
8,043
(6)
1,335
6,708
2,076
4,632
37
4,596
(13)
FY13
FY14E
25,640
22
23,650
1,990
7,118
3,090
780
1,180
2,068
1,870
98
34,726
(0)
5,294
29,432
(0)
3,496
25,936
7,511
18,425
62
18,362
18
27,172
6
25,240
1,932
7,272
3,963
448
1,690
1,171
1,850
12
37,670
8
5,649
32,021
9
3,727
28,294
8,767
19,527
150
19,377
6
C80
LIC Housing Finance

Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
LICHF IN
505.0
110 / 2
300 / 152
4 / -25 / -35
2013 2014E 2015E

15.3 19.2 22.2
14.5 18.6 21.3
10.2 12.5 14.6
20.3 24.7 28.9
2.2 22.0 16.9
128.3 149.7 172.9
1.5
1.5
1.5
16.8 17.8 17.9
21.7 20.9 20.9
10.4
1.6
1.8
8.5
1.4
2.3

Y/E March
NII
PPP
Adj. PAT
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh (INR)
RoAA (%)
RoE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
Div. Yield (%)
CMP: INR217
7.3
1.2
2.5
2016E
26.1
24.9
17.3
34.3
18.6
200.4
1.5
18.4
20.9
6.1
1.0
3.0
Buy
LICHFs loan growth is likely to remain healthy at 19% YoY on the back
of buoyant demand in the individual loans segment.
Individual loan segment is likely to grow by 20.5% YoY and 4.3% QoQ,
while the developer segment is expected to remain flat QoQ. Share
of builder loan is likely to fall below 3% of overall book.
We expect margins to remain flat QoQ at 2.21%. During the quarter,
LICHF raised retail PLR by 10bp and also withdrew the 15bp rebate on
Bhagyalakshmi Scheme.
Asset quality is likely to remain stable. We model provisioning reversal
of ~INR225m (v/s provisioning of INR319m in 3QFY13). The reversal
would be on account of provisioning release for teaser loans.
We expect net profit to grow at 43% YoY to INR3.38b.

Asset quality in the developer category; outlook on performance in
the developer portfolio.
Margin trends, as LICHF has been disappointing on the margin front
for past few quarters. Margins bounced back in the last quarter;
however, sustaining/improving margins will be key.
Overall asset quality trends.
(INR Million)
Y/E March
Interest Income
Interest Expenses
Net Interest Income
YoY Growth (%)
Fees and other income
Net Income
YoY Growth (%)
Operating Expenses
Operating Profit
YoY Growth (%)
Provisions and Cont.
Profit before Tax
Tax Provisions
Net Profit
YoY Growth (%)
Loan Growth (%)
Borrowings Growth (%)
Tax Rate (%)
E: MOSL Estimates
January 2014
1Q
17,179
13,674
3,505
-2.9
494
3,999
-5.0
521
3,479
-8.2
436
3,043
766
2,277
-11.2
24.1
23.7
13.0
25.2
FY13
2Q
3Q
18,081
19,050
14,546
15,353
3,535
3,697
5.8
13.5
537
500
4,073
4,196
4.0
10.6
679
673
3,393
3,524
1.2
8.0
69
319
3,324
3,205
894
843
2,430
2,362
147.0
-22.7
23.2
23.8
24.2
22.1
16.7
16.0
26.9
26.3
FY14
4Q
20,281
15,673
4,608
24.3
466
5,074
17.5
946
4,128
19.2
-35
4,163
1,002
3,162
24.7
23.4
22.6
18.6
24.1
1Q
21,303
16,755
4,547
29.7
477
5,024
25.6
613
4,411
26.8
171
4,240
1,135
3,105
36.3
22.1
22.6
12.2
26.8
2Q
22,237
17,703
4,534
28.2
787
5,321
30.7
744
4,577
34.9
341
4,237
1,136
3,101
27.6
20.4
20.6
14.0
26.8
3QE
23,456
18,765
4,691
26.9
550
5,241
24.9
847
4,394
24.7
-225
4,619
1,238
3,381
43.1
19.2
20.7
16.2
26.8
4QE
24,844
19,430
5,414
17.5
797
6,211
22.4
1,015
5,196
25.9
-360
5,556
1,490
4,066
28.6
16.9
18.4
16.3
26.8
FY13
FY14E
74,591
59,246
15,345
10.3
1,998
17,343
6.8
2,819
14,524
4.7
789
13,736
3,504
10,232
11.9
23.4
22.6
16.3
25.5
91,840
72,654
19,186
25.0
2,611
21,797
25.7
3,219
18,578
27.9
-73
18,652
4,999
13,653
33.4
16.9
18.4
14.8
26.8
C81
M & M Financial Services

Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
MMFS IN
563.0
180 / 3
356 / 179
4 / 16 / 32
CMP: INR320

Y/E March
2013 2014E 2015E
NII
22.2 28.7 35.0
PPP
15.3 19.7 24.4
PAT
8.7 10.0 11.9
EPS (INR)
15.7 17.8 21.2
EPS Gr. (%)
29.8 13.4 19.2
BV/Sh (INR)
79.1 92.2 107.9
ABV/Sh (INR)
76.1 86.7 99.1
RoA on AUM (%) 3.9
3.4
3.2
RoE (%)
23.4 20.8 21.2
Payout (%)
27.1 26.3 26.3
Valuations
P/E (x)
19.7 17.4 14.6
P/BV (x)
3.9
3.4
2.9
P/ABV (x)
4.1
3.6
3.1
Div. Yield (%)
1.2
1.3
1.5
2016E
41.5
28.9
14.1
25.0
17.9
126.3
114.8
3.1
21.4
26.3
12.4
2.5
2.7
1.8
Y/E March
1Q
Operating Income
8,351
Other Income
39
Total income
8,390
YoY Growth (%)
49.8
Interest Expenses
3,475
Net Income
4,916
Operating Expenses
1,667
Operating Profit
3,248
YoY Growth (%)
56.6
Provisions
854
Profit before Tax
2,395
Tax Provisions
784
Net Profit
1,610
YoY Growth (%)
57.6
AUM growth (%)
39.3
Borrowings growth (%)
44.8
33.9
Provisions/Operating Profits (%)
26.3
Tax Rate (%)
32.8
E: MOSL Estimates; We have not included
January 2014
Buy
MMFS continues to ride high on its multi-product strategy and strong

rural focus. Healthy growth momentum in the CV, used vehicle and
car segments is likely to sustain on the back of the festive season
gone by. AUMs are expected to grow at a healthy pace at 30% levels.
Margins are likely to remain flat during this quarter; during last quarter,
margins stood at 9.5%.
We expect NII to grow at 29% YoY and 6% QoQ.
Asset quality is expected to remain stable. As in September 2013,
GNPAs were 4.1% and NNPAs were 1.9%.
We expect provisions of INR1.1b v/s INR975m during 3QFY13 and
INR1.25b during the last quarter.
We expect net profit to grow at ~25% YoY to INR2.5b.

Business growth momentum, given the good monsoon festival
season. Also, growth as MMFS has been growing its AUMs at 30%+
rate for the past 12 quarters.
Margin trends as it raised lending rates during the quarter.
Asset quality trends, given continued weakness in car sales.
(INR Million)
FY13
FY14
FY13
FY14E
2Q
3Q
4Q
1Q
2Q
3QE
4QE
9,157
9,956
11,103
10,925
12,031
12,934
14,584
38,413
50,474
135
53
153
60
96
95
99
533
350
9,292
10,009
11,256
10,985
12,127
13,029
14,682
38,947
50,823
43.9
35.0
32.9
30.9
30.5
30.2
30.4
39.4
30.5
3,898
4,344
4,471
4,761
5,253
5,725
6,055
16,188
21,794
5,394
5,665
6,784
6,224
6,875
7,303
8,628
22,759
29,030
1,768
1,872
2,112
2,064
2,250
2,397
2,614
7,420
9,325
3,626
3,793
4,673
4,160
4,625
4,906
6,014
15,339
19,705
51.8
35.6
31.2
28.1
27.6
29.4
28.7
41.7
28.5
836
815
329
1,252
1,262
1,100
862
2,833
4,476
2,790
2,977
4,344
2,907
3,363
3,806
5,152
12,507
15,229
914
975
1,160
995
1,151
1,302
1,767
3,833
5,216
1,876
2,002
3,184
1,912
2,212
2,505
3,384
8,674
10,014
38.4
29.4
39.9
18.7
17.9
25.1
6.3
39.9
15.4
35.6
32.0
35.1
34.8
30.2
27.8
27.5
35.1
27.5
38.9
34.5
35.1
36.8
30.0
28.1
31.0
35.1
31.0
32.8
33.1
31.1
33.2
32.7
32.8
30.3
32.6
32.1
23.1
21.5
7.0
30.1
27.3
22.4
14.3
18.5
22.7
32.7
32.8
26.7
34.2
34.2
34.2
34.3
30.6
34.2
EO inc. of INR154m in 4QFY13 for presentation purpose; According taxes have been adj.
C82
Power Finance Corporation

Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
POWF IN
1,319.9
215 / 3
227 / 97
2 / 5 / -28
CMP: INR163

Y/E March
NII
PPP
Adj. PAT
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh (INR)
Adj. RoAA (%)
RoE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
Div. Yield (%)
2013 2014E 2015E

62.7 83.3 92.4
60.5 77.2 88.5
45.2 54.2 59.7
34.3 41.0 45.2
43.4 19.7 10.2
183.9 213.4 247.1
3.1
3.0
2.8
20.1 20.7 19.6
24.2 23.2 23.2
4.8
0.9
4.3
4.0
0.8
4.7
3.6
0.7
5.4
2016E
107.2
102.9
70.3
53.2
17.7
286.9
2.9
19.9
23.2
3.1
0.6
6.3
Neutral
Loan growth is expected to remain healthy at 21% YoY. On a sequential

basis, loans and borrowings are expected to grow by ~4% and ~5%
respectively.
NII is expected to grow at a healthy 26% YoY on the back of healthy
loan growth. Margins are likely to moderate QoQ.
We expect MTM loss of INR1.25b during the quarter, compared with a
gain of INR1.25b loss incurred in 2QFY14.
We expect NIM to remain moderate at 4.8%, compared to 5% reported
during 2QFY14.
Barring a couple of accounts, asset quality at large remained healthy.
However, it will remain a key monitorable, given the uncertain macro
environment and issues related to fuel linkages.
The stock trades at 0.8x FY14E and 0.7x FY15E BV. Maintain Neutral.

Growth trends and asset quality performance, against the backdrop
of challenging fuel linkages issues hurting power generation
companies.
Movement in spreads and yields on assets.
Overall disbursement trends and disbursements to SEBs for
transnational finance.
Y/E March
1Q
Interest Income
39,000
Interest Expenses
25,060
Net Interest Income
13,940
YoY Gr %
40.8
Other Income
90
Net Operational Income
14,030
YoY Gr %
36.9
Exchange gain/(loss)
-770
Total Net Income
13,260
YoY Gr %
39.6
Operating Expenses
286
YoY Gr %
5.8
% to Income
2.2
Operating Profit
12,974
YoY Gr %
40.6
Provisions
20
PBT
12,954
Tax
3,240
Tax Rate %
25.0
PAT
9,714
YoY Gr %
41.6
Adjusted PAT (For Forex)
10,292
YoY Gr %
38.6
E:MOSL Estimates; Quarterly and annual
January 2014
(INR Million)
FY13
2Q
3Q
41,300
44,190
26,550
27,410
14,750
16,780
36.6
53.0
160
90
14,910
16,870
37.0
50.5
-240
-460
14,670
16,410
151.2
6.4
351
389
6.2
34.0
2.4
2.4
14,320
16,022
159.9
5.9
-30
900
14,350
15,122
3,978
3,940
27.7
26.1
10,372
11,182
147.5
0.9
10,545
11,522
31.4
45.6
numbers would not
FY14
4Q
1Q
2Q
3QE
4QE
45,920
49,590
52,230
53,954
57,068
28,660
30,160
31,120
32,832
35,460
17,260
19,430
21,110
21,122
21,608
40.4
39.4
43.1
25.9
25.2
250
100
220
200
212
17,510
19,530
21,330
21,322
21,820
36.6
39.2
43.1
26.4
24.6
90
-1,070
-1,350
-1,250
-1,180
17,600
18,460
19,980
20,072
20,640
35.2
39.2
36.2
22.3
17.3
426
319
721
390
495
4.1
11.8
105.6
0.4
16.2
2.4
1.7
3.6
1.9
2.4
17,174
18,141
19,259
19,682
20,145
36.2
39.8
34.5
22.8
17.3
-90
910
1,370
1,250
1,189
17,264
17,231
17,889
18,432
18,957
4,320
5,230
5,159
5,530
5,834
25.0
30.4
28.8
30.0
30.8
12,944
12,001
12,730
12,902
13,123
57.9
23.5
22.7
15.4
1.4
12,877
12,746
13,691
13,777
13,939
59.9
23.8
29.8
19.6
8.3
match due to differences in classification
FY13
FY14E
170,410
107,680
62,730
52.7
590
63,320
40.2
-1,380
61,940
41.5
1,450
12.1
2.3
60,490
42.4
800
59,690
15,478
25.9
44,212
45.8
45,235
44.0
212,842
129,572
83,270
32.7
732
84,002
32.7
-4,850
79,152
27.8
1,925
32.7
2.4
77,227
27.7
4,719
72,508
21,753
30.0
50,756
14.8
54,154
19.7
C83
Rural Electrification Corp

Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
RECL IN
987.5
214 / 3
268 / 146
-6 / 1 / -19
2013 2014E 2015E

52.8 69.7 76.7
52.9 67.1 74.2
38.2 46.6 52.2
38.7 47.2 52.9
35.4 22.0 12.1
178.2 213.6 253.3
3.3
3.4
3.3
23.6 24.1 22.6
24.9 24.9 24.9
5.7
1.2
3.8
4.7
1.0
4.6

Y/E March
NII
PPP
PAT
EPS (INR)
EPS Gr. (%)
BV/Sh (INR)
RoAA (%)
RoE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
Div. Yield (%)
CMP: INR217
4.2
0.9
5.2
2016E
86.5
87.1
61.4
62.2
17.6
300.0
3.3
22.5
24.9
3.5
0.7
6.1
Loan growth is expected to remain healthy at 21% YoY and ~4% QoQ.
RECLs margins have stood at 4.86% (highest in last four years). This
was led by an improvement in yields, while it also maintained a tight
leash on cost of funds. However, in the current quarter, we expect
10bp moderation in margins.
We factor forex MTM loss of INR950m v/s INR950m in 2QFY14.
Barring a couple of accounts, asset quality at large remained healthy,
though it will be a key monitorable, given the uncertain macro
environment. We model provisions of INR450m during the quarter.
We expect PAT to grow by 13% YoY to INR11.5b.
The stock trades at 1x FY14E and 0.9x FY15E BV. Maintain Neutral.

Growth trends and asset quality performance, against the backdrop
of challenging macro environment.
Movement in spreads and yield on assets.
Overall disbursement trends and disbursements to SEBs for
transnational finance.
Y/E March
FY13
1Q
2Q
3Q
Interest Income
29,968
32,405
35,014
Interest Expenses
18,314
19,603
20,711
Net Interest Income
11,654
12,802
14,303
YoY Gr (%)
28.1
34.8
42.3
Other Operational Income
717
514
322
Net Operational Income
12,372
13,316
14,626
YoY Gr (%)
30.4
36.1
41.0
Other Income
-133
79
-34
Total Net Income
12,239
13,394
14,591
YoY Gr (%)
27.2
52.3
27.9
Operating Expenses
456
585
507
YoY Gr (%)
8.7
34.2
-34.9
% to Income
3.7
4.4
3.5
Operating Profit
11,784
12,809
14,085
YoY Gr %
28.0
53.2
32.5
Op. Profit adj. forex gain /loss
12,158
12,949
14,305
YoY Gr (%)
31.0
34.7
46.5
Provisions
0
0
250
PBT
11,784
12,809
13,835
YoY Gr (%)
31.6
53.2
33.2
Tax
3,016
3,270
3,568
Tax Rate (%)
25.6
25.5
25.8
PAT
8,767
9,539
10,267
YoY Gr (%)
32.5
52.8
33.4
Adjusted PAT
9,046
9,643
10,430
YoY Gr (%)
35.6
34.3
47.9
E:MOSL Estimates; Quarterly and annual numbers would not
January 2014
Neutral
(INR Million)
FY14
4Q
1Q
2Q
3QE
4QE
35,522
39,141
41,672
42,714
43,788
21,435
22,439
24,240
25,181
26,237
14,088
16,702
17,432
17,533
17,551
38.0
43.3
36.2
22.6
24.6
726
675
432
600
839
14,813
17,377
17,864
18,133
18,390
37.1
40.5
34.2
24.0
24.1
112
-374
-815
-725
-611
14,925
17,004
17,049
17,408
17,779
36.3
38.9
27.3
19.3
19.1
656
564
514
567
960
-2.2
23.8
-12.1
12.0
46.3
4.4
3.3
3.0
3.3
5.4
14,269
16,440
16,535
16,840
16,819
38.8
39.5
29.1
19.6
17.9
14,310
17,020
17,488
17,790
17,735
38.4
40.0
35.1
24.4
23.9
1,057
560
340
450
634
13,212
15,880
16,194
16,390
16,185
29.0
34.8
26.4
18.5
22.5
3,609
4,343
5,088
4,671
4,457
27.3
27.3
31.4
28.5
27.5
9,603
11,537
11,107
11,719
11,728
25.9
31.6
16.4
14.1
22.1
9,633
11,958
11,761
12,398
12,392
25.5
32.2
22.0
18.9
28.6
match due to differences in classification
FY13
FY14E
132,910
80,063
52,847
36.0
2,279
55,126
39.2
23
55,149
35.2
2,203
-5.3
4.0
52,946
37.7
53,721
37.8
1,307
51,640
36.1
13,463
26.1
38,176
35.5
38,752
35.6
167,314
97,627
69,688
31.9
2,546
72,234
31.0
-2,525
69,709
26.4
2,605
18.2
3.7
67,104
26.7
70,034
30.4
1,984
65,120
26.1
18,559
28.5
46,561
22.0
48,509
25.2
C84
Shriram Transport Finance

Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
SHTF IN
226.3
152 / 2
842 / 465
12 / -19 / -18
CMP: INR673

Y/E March
2013 2014E 2015E
Net Inc.
34.6 37.1 43.0
PPP
28.7 30.6 35.0
PAT
13.6 13.6 15.4
Cons.PAT
14.6 14.7 16.7
EPS (INR)
60.0 60.0 68.1
EPS Gr. (%)
7.9
0.1 13.4
Cons. EPS (INR) 64.7 65.0 73.7
Cons. EPS Gr. (%) 11.9
0.4 13.5
BV/Sh(INR)
317.1 369.0 427.9
Cons. BV (INR) 323.0 379.9 444.4
RoA on AUM (%) 2.6
2.3
2.3
RoE (%)
20.6 17.5 17.1
Payout (%)
13.6 13.3 13.3
Valuations
P/Cons. EPS (x)
8.5
8.5
7.5
P/Cons. BV (x)
1.7
1.5
1.2
Div. Yield (%)
1.3
1.2
1.4
2016E
48.9
39.4
17.3
18.7
76.1
11.8
82.5
11.9
493.8
516.7
2.3
16.5
13.3
6.7
1.1
1.6
AUMs are likely to grow at 19%/3% YoY/QoQ. We expect disbursements

growth to remain muted at 6% YoY and 2% QoQ.
Sequentially, disbursements may see some moderation in growth at
6% YoY and 2% QoQ. Disbursements grew sharply with a growth rate
of over 31% in 1HFY14.
Margins are expected to remain flat sequentially at 6.9%. Hence, NII
(incl. securitization income) should grow 5% YoY.
Given the uncertain macro environment and slowdown in CV sales,
asset quality continues to be a key monitorable.
We have factored higher provisions of INR2.7b v/s INR2b in 3QFY13
and INR2.6b in 2QFY14.
We expect PAT to decline 3% YoY at INR3.35b.
The stock trades at 1.5x FY14E and 1.2x FY15E consolidated BV. Buy.

Business growth, pickup in growth was observed during last two
quarters and management commentary on the same.
Movement in borrowing costs and margins.
Asset quality trends, given sluggish CV sales.
Quaterly Performance
Y/E March
FY13
FY14
1Q
2Q
3Q
4Q
1Q
2Q
3QE
Interest Income
8,876
10,946
12,046
13,104
13,856
15,598
16,846
Interest expenses
6,173
6,859
7,350
8,057
8,692
9,809
10,495
Net Interest Income
2,702
4,087
4,696
5,046
5,163
5,789
6,351
YoY Growth (%)
1.8
16.0
51.0
74.1
91.1
41.6
35.2
Securitization income
5,323
4,590
4,252
3,892
3,859
3,262
2,971
Net Income (Incl. Securitization)
8,025
8,678
8,947
8,939
9,022
9,051
9,322
YoY Growth (%)
2.6
4.0
11.3
11.0
12.4
4.3
4.2
Fees and Other Income
702
314
300
569
1,084
529
625
Net Operating Income
8,727
8,991
9,247
9,508
10,106
9,580
9,947
YoY Growth (%)
5.2
4.5
11.0
14.4
15.8
6.6
7.6
Operating Expenses
1,940
1,872
1,999
2,049
2,498
2,212
2,295
Operating Profit
6,787
7,119
7,248
7,459
7,609
7,369
7,652
YoY Growth (%)
2.5
4.4
12.1
14.2
12.1
3.5
5.6
Provisions
2,026
2,106
2,126
2,193
2,764
2,643
2,830
Profit before Tax
4,761
5,013
5,122
5,266
4,845
4,725
4,822
Tax Provisions
1,543
1,638
1,662
1,713
1,435
1,457
1,471
Net Profit
3,219
3,376
3,460
3,552
3,410
3,268
3,351
YoY Growth (%)
-7.3
12.7
14.3
15.3
6.0
-3.2
-3.1
AUM Growth (%)
13.3
15.8
18.6
23.5
25.2
22.0
18.7
Disbursement Growth (%)
12.2
28.6
42.0
54.6
47.9
17.5
5.7
Securitization Inc. / Net Inc. (%)
61.0
51.1
46.0
40.9
38.2
34.0
29.9
22.2
20.8
21.6
21.6
24.7
23.1
23.1
Tax Rate (%)
32.4
32.7
32.5
32.5
29.6
30.8
30.5
E: MOSL Estimates; * Quaterly nos and full year nos will not tally due to different way of reporting
January 2014
Buy
(INR Million)
FY13
FY14E
4QE
17,570
45,028
10,840
28,439
6,730
16,588
33.4
36.1
2,988
18,057
9,718
34,645
8.7
7.4
684
1,885
10,401
36,530
9.4
8.9
2,413
7,860
7,989
28,670
7.1
8.5
2,862
8,508
5,126
20,162
1,542
6,556
3,584
13,606
0.9
8.2
14.0
23.5
-1.5
34.6
28.7
49.4
23.2
21.5
30.1
32.5
financial nos
63,869
39,836
24,033
44.9
13,079
37,113
7.1
2,922
40,034
9.6
9,417
30,617
6.8
11,099
19,518
5,904
13,614
0.1
14.0
15.0
32.7
23.5
30.3
C85
December 2013 Results Preview | Sector: Healthcare
Healthcare
Companies Covered
EBITDA to grow by 27% on the back of strong operational performance by

Dr. Reddy's, Ranbaxy, Glenmark and Divi's Labs
Biocon
For 3QFY14E, we expect sales growth of 22% YoY and EBITDA of 27% YoY for our
pharma universe (excluding one-offs). Adjusted PAT is likely to grow 30% YoY. Strong
operational performance will be driven by continued foreign currency benefit along
with a low base effect for some companies.
Cadila Healthcare
Cipla
Divis Laboratories
Dr Reddys Labs.
EBITDA growth would be mainly led by strong performance by Dr. Reddy's, Ranbaxy,
Glenmark and Divi's Labs. Growth for Dr. Reddy's and Glenmark will be driven by
increased contribution from recently-launched products in the US and better sales
mix. Ranbaxy is expected to report high growth on an abnormally low base of 4QCY12,
which was impacted by gLipitor recall and high consent decree related costs. Divi's
Labs is also expected to report robust EBITDA margin growth aided by favorable
currency and low base effect (3QFY13 had lowest EBITDA in three years). Among
MNCs, Sanofi India may report healthy operational performance aided by improving
margin profile and growth in products exiting DPCO-1995. GSK Pharma may continue
to report YoY decline in EBITDA due to supply chain and trade channel related issues.
GSK Pharma
Glenmark Pharma
IPCA Laboratories
Lupin
Ranbaxy Labs.
Sanofi India
Sun Pharmaceuticals
Torrent Pharma
3QFY14E aggregates excluding one-offs

Healthcare Universe
Aggregates
MNC Pharma
Big 5 Generics
CRAMS
Second Tier generics
Sector Aggregate
Note: Above numbers
Generics include Sun,
YoY Growth (%)

EBITDA Margin
Net Profit Margin
Sales EBITDA Adj PAT Dec-13 Dec-12 Chg.(bp) Dec-13 Dec-12 Chg.(bp)
2.0
-26.1
-22.1
16.6 22.9
-630
14.6 19.2
-453
25.4
35.3
37.9
23.8 22.1
175
15.6 14.2
142
17.8
31.5
23.4
38.0 34.0
397
28.3 27.0
130
17.6
17.3
23.2
19.1 19.2
-6
11.5 11.0
53
21.8
27.3
29.5
22.7 21.7
99
14.9 14.0
89
exclude one-offs to facilitate comparison of core operations. Big-5
Ranbaxy, Cipla, Dr Reddy's and Lupin.

CMP
(INR)
27.12.13
466
786
405
1,222
2,519
538
2,958
718
906
464
2,749
576
475
(INR million)
Rating
Biocon
Neutral
Cadila Health
Buy
Cipla
Neutral
Divis Labs
Buy
Dr Reddy s Labs
Buy
Glenmark Pharma
Buy
GSK Pharma
Neutral
IPCA Labs.
Buy
Lupin
Buy
Ranbaxy Labs
Sell
Sanofi India
Neutral
Sun Pharma
Buy
Torrent Pharma
Buy
Sector Aggregate
Note: Historic numbers exclude upside from
Dec.13
7,614
18,222
26,575
6,280
35,947
15,628
6,118
8,049
26,513
28,791
4,668
39,084
9,718
233,208
one-off
Sales
Var.
Var.
% YoY % QoQ
20.1
3.8
13.6
4.3
28.4
5.8
17.8
11.0
25.5
7.1
20.2
7.7
-6.8
-1.4
14.8
-4.9
11.6
5.3
15.7
2.8
16.5
-1.2
43.9
0.3
21.9
1.3
21.8
3.7
opportunities
Dec.13
1,713
2,791
5,857
2,384
7,729
3,221
1,106
1,785
5,668
2,335
684
15,767
1,827
52,867
EBITDA
Var.
% YoY
20.9
9.5
18.8
31.5
36.2
28.5
-42.2
12.7
11.9
467.1
34.9
36.8
13.3
27.3
Var.
% QoQ
1.4
7.1
3.8
-3.7
-8.6
6.1
2.4
-23.9
4.2
20.5
-31.4
-1.0
5.6
-0.9
Net Profit
Dec.13
Var.
% YoY
1,096
19.5
1,504
46.1
3,590
5.9
1,780
23.4
4,503
23.9
1,757
11.6
1,013
-35.9
1,189
35.3
3,797
35.1
1,121
LP
566
26.4
11,515
43.9
1,261
12.3
34,691
29.5
Var.
% QoQ
7.1
-18.0
-2.3
-13.1
-34.8
22.3
-0.4
-8.2
12.3
83.5
-26.4
-2.9
17.9
-6.1
Alok Dalal (Alok.Dalal@MotilalOswal.com) / Hardick Bora (Hardick.Bora@MotilalOswal.com)

January 2014
C86
At the macro level, we expect operating performance for our universe to benefit
from the favorable currency. Moreover, marginal QoQ change in USD/INR may not
lead to material MTM forex impact on loans/derivatives. We expect adjusted PAT
growth at 30%.
Core 3QFY14 performance: key highlights

Dr. Reddy's, Ranbaxy, Glenmark and Divi's Labs to record strong operational
performance: We expect Dr. Reddy's, Ranbaxy, Glenmark and Divi's Labs to record
strong EBITDA growth for 3QFY14E. We attribute the following company specific reasons
for this performance:
1. Dr. Reddy's: We expect Dr. Reddy's to report strong growth of 36% in core EBITDA.
This will be driven by a robust 41% growth in US base business, in turn aided by
increasing market share in recent product launches like gDacogen and gReclast.
Russia is also expected to report strong growth this quarter. Hence, we expect
core EBITDA margin to expand 170bp YoY to 21.5%.
2. Ranbaxy: Company would witness a sharp increase in EBITDA YoY on an abnormally
low base. In 4QCY12, its operations were impacted by gLipitor recall and high
consent decree related expenses. With steady contribution from Absorica, the
company is likely to report a healthy quarter on this low base.
3. Glenmark: We expect Glenmark's 3QFY14E performance to be driven by 20% YoY
core revenue growth, primarily led by US generics. Core EBITDA growth of 28%
would be faster than the revenue growth, primarily due to improving sales mix.
4. Divi's Labs: Given its largely unhedged operations and ~14.5% YoY depreciation of
INR v/s USD, we expect Divi's Labs to report 37% YoY growth in EBITDA. This growth
will come over a low base of 3QFY13, when the company reported the lowest
EBITDA margin since 3QFY10, due to adverse sales mix.
5. MNCs: We expect GSK Pharma's operating performance to continue to be impacted
by supply chain and trade channel related issues. Sanofi India may report a healthy
operational performance aided by improving margin profile and growth in
products exiting DPCO-1995.
Sector view
Generics
Emerging markets to help improve profitability gradually from FY14.
New launches imperative for driving growth in core US business.
Differentiation becoming imperative -- low competition/patent challenge
products, brands, NCE research will be key differentiators.
Increasing MNC interest in generics space -- may lead to large acquisitions/supply
arrangements with Indian companies.
Top picks: Dr Reddy's, Lupin, Sun Pharma and IPCA Labs.
CRAMS (Contract Research & Manufacturing Services)
Favorable macro trends: India on the threshold of significant opportunity, given
the optimum combination of strong chemistry and regulatory skills and low costs.
Inventory de-stocking impacted performance over 2010-12. Expect healthy
performance in FY14.
Top picks: Divi's Laboratories.
January 2014
C87
MNC Pharma
Portfolio realignment in favor of lifestyle products to drive growth in medium-tolong term.
Branded generics, patented products and in-licensing to drive long term growth.
Parent's commitment to listed entity is imperative.
Short term adverse impact likely from the proposed new pharma policy.
Key developments
The major developments during the quarter were Torrent Pharma's acquisition of
part of Elder's domestic business and GSK Pharma's open offer announcement.
1. Torrent Pharma acquires part of Elder Pharma's domestic business for INR20b;
steep valuation would prolong payback period
Torrent Pharma has entered into a binding agreement to acquire a part of Elder
Pharma's domestic formulations business for a consideration of INR20b. The deal
is expected to be cash/EPS accretive by FY16E/17E.
TRP will be acquiring 30 brands from three of the five segments of Elder where
TRP recently entered or plans to enter in the near future. The acquired business
has sales of INR4b and EBITDA margin of 35%. This implies valuation of ~5x sales
and ~14x EBITDA.
While the deal puts TRP in a strong position in the high cash churning domestic
pharma market, the high valuations of the deal have induced TRP to take on high
leverage (D/E to increase from 0.5x in FY13 to 1.3x in FY15E). The ensuing interest
expense will elongate the pay-back period and decrease return ratios.
2. GSK Pharma announces open offer to increase stake by 24% to 75% for USD1b
GlaxoSmithKline Pharma Plc (GSK UK) has made an open offer to acquire 24.3%
stake in Glaxo Pharma India (GLXO) for INR 64b at INR3100/share. The offer is at a
premium of ~26% to previous day's closing price of GLXO. Subject to regulatory
clearance, the offer period is expected to begin in February 2014.
GSK UK currently holds 50.67% stake in GLXO which will go up to 75% if the open
offer is successful. GSK UK intends to keep the Indian pharma arm listed.
According to the parent, the transaction will be earnings neutral for the first year
and accretive thereafter. It will be funded through GSK UK's existing cash resources.
Over the last few years, emerging markets including India have become a very
important market for GSK UK's long term plans. Same time last year, GSK UK made
an open offer to increase its shareholding in the consumer arm from 43.16% to
75%. Last month, GSK UK had committed a capex program of USD140m for a new
facility at Bangalore.
January 2014
C88
Key launches in the US - hits and misses

3QFY14 saw some interesting developments in terms of generic launches in the US.
While Lupin overcame requisite regulatory hurdles to launch two low competition
products, Ranbaxy's exclusive copy of generic Diovan and Valcyte continue to remain
out of sight.
Hits and misses
Hits
Miss
Generic
name
Choline
Fenofibrate
Brand
equivalent
Trilipix
Indication
Anti-diabetic
US sales
(USD m)
450
Abacavir Sulfate;
Lamivudine;
Zidovudine
Valsartan
Valgancyclovir
Trizivir
Anti-retroviral
111
Diovan
Valcyte
Anti-hypertensive
Cytomegalovirus
Infections
1,900
400
Competition
Mylan (launched);
Impax & Actavis (settled);
Sandoz & Anchen (sued)
None
NA
NA
Source: MOSL Research
Hits
Lupin launches first exclusive copy of generic Trizivir
Lupin has announced its launch of generic Trizivir. It has FTF exclusivity on the drug
which generated annual US sales of USD111m for its innovator. Company successfully
proved non-infringement of the combination patents and had already obtained the
necessary ANDA approval on Dec 5, 2013. This implies that subsequent Para IV ANDA
filers will have to successfully challenge the current set of patents to enter the market;
these expire between September 2016 and November 2018. We believe that LPC is
the only Para IV ANDA filer and Mylan is the other known ANDA filer with a Para III
certification. As such, marketing exclusivity may continue for LPC beyond the statutory
six months.
We expect revenue contribution of USD16m from this opportunity over the next 12
months, with a PAT of USD9m-10m. We assign a value of INR6/share to this opportunity
and add it to the target price.
and second generic version of Trilipix
Lupin also launched its generic version of Trilipix in the US. The product has USD450m
of sales. Lupin is the second generic producer to enter the market. Company had filed
a Para IV ANDA for the product and was sued by the innovator, Abbott, in March 2010.
The case was subsequently settled in June 2012.
Apart from Lupin, there are at least five other Para IV filers. Mylan already launched
its generic in July 2013, while Impax and Actavis too have settled for an early launch.
Suits against Sandoz and Anchen Pharma are still ongoing. We believe competition
could be limited to four players in the short term, with two more players entering in
the longer run.
We estimate USD11m/18m sales in FY14E/15E, with 2% contribution to EPS, which is
already modeled in our estimates.
January 2014
C89
Misses
Ranbaxy's generic Diovan still out of sight
While the street was hopeful after dismissal of Mylan's pleas for revoking Ranbaxy's
exclusivity and allowing another generic player in the market, Ranbaxy's exclusive
copy is already late by a year. Despite the recent issuance of import alert on Mohali
plant, the management continues to maintain that RBXY still holds the exclusive
marketing rights for 180 days and is confident of monetizing it.
Diovan generates USD1.9b in sales from the US for Novartis. If successfully launched,
we expect this opportunity to generate one-off sales of ~USD100m for Ranbaxy over
the exclusivity period. We also expect Novartis to introduce an authorized generic
version through its generic unit, Sandoz.
while generic Valcyte also seems to be delayed
Another FTF opportunity for Ranbaxy, generic Valcyte, also seems to find some delay
in launch. Company received tentative approval from the US FDA on June 24, 2008,
while the litigation with Roche was still ongoing. Subsequent to a win in the lower
court, Ranbaxy settled with Roche to launch its generic version of Valcyte sometime
in September 2013.
Valcyte generates ~USD300m in US sales for Roche. On successful launch, we expect
this opportunity to generate one-off sales of ~USD19m for Ranbaxy over the exclusivity
period. Since Ranbaxy is the AG, it will be the only generic player in the market.
INR depreciation will aid sales, but higher MTM losses would limit benefit
for some
In 3QFY14, the average USD/INR rate of INR depreciated by ~14.5% against that in
3QFY13. Thus, we expect companies with largely un-hedged net exports to realize the
benefit of favorable currency at EBITDA level. Some companies that are likely to benefit
the most include: (1) Biocon, (2) Cipla, (3) Divi's Labs, (4) IPCA and (5) Dr. Reddy's.
Similarly, USD/INR has been largely flat QoQ. We do not expect companies with large
forex debt and derivative exposures to report any MTM losses/gains, thus allowing
the operational benefit to flow through to PAT level. Companies with large forex
liabilities are: (1) Ranbaxy, (2) IPCA, (3) Cadila and (4) Glenmark.
Currency movement (INR/USD)
74
67
60
53
Dec-13
Nov-13
Oct-13
Sep-13
Aug-13
Jul-13
Jun-13
May-13
Apr-13
Mar-13
Feb-13
Jan-13
Dec-12
Nov-12
Oct-12
Sep-12
Aug-12
Jul-12
46
Source: Bloomberg
January 2014
C90
Sens ex Index
MOSL Hea l thca re Index
Sens ex Index
MOSL Hea l thcare Index
140
110
125
106
110
102
95
98
80
Sep-13
Oct-13
Nov-13
Dec-12 Ma r-13 Jun-13 Sep-13 Dec-13
Dec-13
CMP (INR)
27.12.13
Healthcare
Biocon
Cadila Health
Cipla
Divis Labs
Dr Reddy s Labs
Glenmark Pharma
GSK Pharma
IPCA Labs.
Lupin
Ranbaxy Labs
Sanofi India
Sun Pharma
Torrent Pharma
Sector Aggregate
January 2014
466
786
405
1,222
2,519
538
2,958
718
906
464
2,749
576
475
Rating
EPS (INR)
FY13 FY14E FY15E
P/E (x)
FY13 FY14E FY15E
EV/EBITDA (x)
FY13 FY14E FY15E
RoE (%)
FY13 FY14E FY15E
Neutral
Buy
Neutral
Buy
Buy
Buy
Neutral
Buy
Buy
Sell
Neutral
Buy
Buy
16.4
31.9
14.2
45.4
90.2
18.4
80.0
25.7
23.1
13.0
76.7
14.7
27.8
28.5
24.6
28.4
26.9
27.9
29.2
37.0
27.9
39.2
35.7
35.8
39.0
17.1
32.6
8.3
15.4
13.1
15.6
12.7
13.9
20.8
11.4
14.4
9.7
23.6
16.0
8.6
13.9
12.1
23.7
12.7
26.0
20.7
18.1
33.7
23.1
22.5
31.4
14.8
22.5
35.8
19.1
20.4
33.5
18.9
58.7
115.0
23.1
55.6
34.1
32.4
11.5
99.4
22.1
29.3
22.3
40.1
20.9
67.0
133.5
29.1
68.5
48.0
42.1
13.8
116.2
25.8
30.7
22.8
23.4
21.4
20.8
21.9
23.3
53.2
21.1
28.0
40.4
27.6
26.0
16.2
25.5
20.9
19.6
19.4
18.2
18.9
18.5
43.2
14.9
21.5
33.5
23.7
22.3
15.5
21.6
13.0
16.6
13.2
15.6
14.8
13.1
46.7
12.6
16.2
22.2
21.3
16.3
11.1
16.2
11.7
13.6
11.6
12.5
12.5
11.5
34.4
10.4
13.5
8.5
18.3
13.8
10.4
12.9
13.8
21.5
14.7
28.5
21.4
19.0
22.9
24.9
24.4
-18.5
17.4
28.6
30.3
21.3
13.7
21.9
14.2
27.7
20.4
19.9
27.7
28.3
25.1
35.0
18.3
27.2
25.8
20.6
C91
Biocon
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
BIOS IN
200.0
93 / 2
486 / 255
17 / 57 / 56
CMP: INR466

Y/E March
Sales
EBITDA
Net Profit
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2013 2014E 2015E

24.9 29.4 34.6
5.4
6.4
7.6
3.3
4.0
4.5
16.4 19.9 22.3
-3.4 21.4 12.2
134.7 147.6 162.0
12.1 13.5 13.7
17.8 13.8 14.0
34.5 35.1 35.1
28.5
3.5
15.3
1.6
23.5
3.2
13.3
1.3
20.9
2.9
11.7
1.4
2016E
41.3
9.4
5.5
27.3
22.8
179.8
15.2
15.4
35.1
17.0
2.6
9.7
1.8
Neutral
We expect Biocon's sales to grow 20% YoY to INR7.6b, led by 37%

growth in CRO division. Biopharma division is expected to grow 16%.
We expect licensing income at INR76m (INR88m in 3QFY13).
EBITDA is estimated to grow 21% YoY to INR1.7b, with EBITDA margin
up 20bp to 22.5% due to better sales mix and favorable currency.
The management indicated that the long-term derivative contracts
for the BMS deal have expired and thus the quarter could see greater
the benefit of depreciating INR at operating level.
We expect adjusted PAT to grow just 15% YoY to INR1b, in line with the
operational performance.
Key growth drivers for FY14E/15E will be 1) traction in insulin initiative
in RoW, 2) ramp-up in CRO division, 3) contribution from immunosuppressants supplies and 4) branded formulations. However, high
R&D costs and long term capex in the near term will exert pressure on
profitability and return ratios.
The stock trades at 23.5x FY14E and 20.9x FY15E earnings. Option values
for the future include separate listing of Contract Research business
and potential out-licensing of the Oral Insulin NCE by BMS. Return
ratios are likely to remain subdued, with both RoE and RoCE in the
13-14% range from FY13 to FY15E. Maintain Neutral.

Update on initiatives to out-licence Anti-CD6.
Progress on product registration for Rh-Insulin in Europe/US.
Ramp-up in contract services business.
Consolidated Quarterly Performance
Y/E March
(INR Million)
FY13
1Q
2Q
Net Sales
5,767
5,924
YoY Change (%)
30.6
16.5
Total Expenditure
4,540
4,759
EBITDA
1,227
1,165
Margins (%)
21.3
19.7
Depreciation
427
446
Interest
32
11
Other Income
159
495
PBT
927
1,203
Tax
137
304
Rate (%)
14.8
25.3
Minority Interest
2
3
PAT
788
896
YoY Change (%)
12.5
4.6
Margins (%)
13.7
15.1
Licensing income
139
0
YoY Change (%)
-0.7
-100.0
Contract research
1,224
1,291
YoY Change (%)
39.1
39.1
E: MOSL Estimates; Note - Quarterly nos will not add
January 2014
3Q
4Q
6,342
6,244
22.6
2.3
4,925
5,199
1,417
1,045
22.3
16.7
461
459
29
9
253
1,639
1,180
2,215
253
281
21.4
12.7
10
23
917
1,911
26.4
73.7
14.5
30.6
88
19
-69.9
-95.9
1,397
1,660
24.7
40.7
up to full-year nos
FY14
1Q
2Q
3QE
6,948
7,339
7,614
20.5
23.9
20.1
5,486
5,650
5,901
1,462
1,689
1,713
21.0
23.0
22.5
483
500
496
4
3
7
284
187
222
1,259
1,373
1,433
297
319
308
23.6
23.2
21.5
27
31
29
935
1,023
1,096
18.7
14.2
19.5
13.5
13.9
14.4
76
34
76
-45.3
-13.9
1,546
1,881
1,918
26.3
45.7
37.3
due to restatements
4QE
7,541
20.8
5,873
1,668
22.1
504
10
233
1,387
330
23.8
27
1,030
-46.1
13.7
117
517.1
2,177
31.1
FY13
FY14E
24,853
19.1
19,423
5,430
21.8
1,793
81
2,546
6,101
975
16.0
38
5,088
50.3
20.5
1,386
0.0
26
0.0
29,442
18.5
22,910
6,532
22.2
1,982
24
927
5,452
1,254
23.0
114
4,084
-19.7
13.9
900
-35.1
659
2,469.0
C92
Cadila Healthcare
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
CDH IN
204.7
161 / 3
925 / 631
3 / -9 / -22

Y/E March
Sales
EBITDA
Net Profit
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
23.4
4.7
16.6
1.1
2013 2014E 2015E

63.6 70.7 80.3
11.3 11.2 13.5
6.5
6.9
8.2
31.9 33.5 40.1
15.5
5.0 19.5
143.8 168.3 198.2
23.7 21.5 21.9
17.9 15.6 17.0
30.5 25.5 24.3
24.6
5.5
16.2
0.9
CMP: INR786
2016E
92.8
17.0
10.5
51.3
27.9
236.3
23.6
20.7
24.7
19.6
4.0
13.6
1.4
15.3
3.3
10.6
1.4
Buy
We expect Cadila Healthcare's (CDH) 3QFY14E revenue to grow 14%

YoY to INR18.2b, led by 28% YoY growth in the US formulations. Total
export formulations is expected to grow 21% YoY to INR9.4b, while
domestic formulations is likely to grow 8% YoY to INR6.2b, impacted
by the new drug policy.
We expect EBITDA to grow 9% YoY to INR2.8b as fixed overheads
continue to weigh on operations. Continued delay in FDA approvals
has prolonged the consolidation phase.
However, adjusted PAT is expected to grow 46% YoY to INR1.5b, aided
primarily by lower taxes, compared to 3QFY13.
While FY14 continues to be a year of consolidation for CDH, we believe
pressure on margins would start to ease as the new drug approvals
start coming through for key markets.
We believe CDH has made investments in the right areas and will
unlock value at the appropriate time. We expect FY15 to be a year of
recovery for CDH.
The stock trades at 23.4x FY14E and 19.6x FY15E EPS. Maintain Buy.

Update on US launches from the Moraiya facility.
Progress on improvement in balance sheet.
(INR Million)
Y/E March
Net Revenues
YoY Change (%)
Total Expenditure
EBITDA
Margins (%)
Depreciation
Interest
Other Income
PBT after EO Income
Tax
Rate (%)
Min. Int/Adj on Consol
Reported PAT
Adj PAT
YoY Change (%)
Margins (%)
Adj PAT incl one-offs
Domestic formulation sales
YoY Change (%)
US sales
YoY Change (%)
E: MOSL Estimates
January 2014
FY13
1Q
15,486
24.3
12,370
3,116
20.1
434
572
553
2,663
654
24.5
61
1,948
1,948
39.4
12.6
1,948
5,818
27.2
3,592
50.1
2Q
15,476
24.3
13,171
2,306
14.9
432
405
65
1,533
494
32.2
88
951
951
-5.7
6.1
951
6,018
28.0
3,674
19.7
3Q
16,041
16.0
13,491
2,550
15.9
496
479
171
1,746
630
36.1
86
1,029
1,029
-29.9
6.4
1,029
5,699
21.4
3,920
14.1
FY14
4Q
16,119
15.3
13,255
2,864
17.8
466
316
87
2,170
-583
-26.9
128
2,625
2,625
47.0
16.3
2,625
5,708
14.4
3,882
9.9
1Q
16,371
5.7
13,513
2,858
17.5
466
278
125
2,239
203
9.1
80
1,956
1,956
0.4
11.9
1,956
6,252
7.5
3,874
7.9
2Q
17,468
12.9
14,863
2,605
14.9
518
319
248
2,017
101
5.0
82
1,834
1,834
92.9
10.5
1,834
6,263
4.1
4,730
28.7
3QE
18,222
13.6
15,431
2,791
15.3
568
350
100
1,974
375
19.0
95
1,504
1,504
46.1
8.3
1,504
6,155
8.0
5,032
28.4
4QE
18,632
15.6
15,674
2,958
15.9
618
350
100
2,091
397
19.0
100
1,593
1,593
-39.3
8.6
1,593
5,993
5.0
5,270
35.8
FY13
FY14E
63,581
20.8
52,324
11,257
17.7
1,828
1,686
370
8,112
1,195
14.7
364
6,553
6,553
15.8
10.3
6,553
23,232
22.6
15,068
21.2
70,692
11.2
59,480
11,213
15.9
2,168
1,298
574
8,320
1,076
12.9
357
6,887
6,887
5.1
9.7
6,887
24,916
7.3
18,906
25.5
C93
Cipla
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
CIPLA IN
802.9
325 / 5
450 / 354
2 / -8 / -12
CMP: INR405
Cipla's core revenue for 3QFY14E is likely to grow 28% YoY to INR26.6b.
The domestic formulations business is expected to grow 15% YoY to

INR10.6b due to the impact of pricing policy. Export formulations
revenue is estimated to increase 41% YoY to INR13.6b due to
consolidation of Cipla Medpro.
EBITDA is estimated to grow 19% YoY to INR5.8b, with EBITDA margin

likely contracting by 180bp YoY to 22% on account of higher employees
and R&D cost.
We expect adjusted PAT to grow 6% YoY to INR3.6b on account of higher

interest costs and depreciation as well as lower other income.
We believe that the coming quarters will be challenging for Cipla due
to (1) impact on sales/profits due to the drug pricing policy and (2)
increasing pressure on profitability due to the ongoing business
transition.
The stock trades at 21.4x FY14E and 19.4x FY15E earnings. Maintain
Neutral.

Y/E March
Sales
EBITDA
Net Profit
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2013 2014E 2015E

82.8 102.3 114.9
22.0 23.6 26.2
11.4 15.2 16.8
14.2 18.9 20.9
4.7 32.4 10.6
112.2 128.4 146.5
12.7 14.7 14.2
19.4 18.5 18.1
12.1 18.6 22.4
28.4
3.6
15.2
0.5
21.4
3.2
14.2
0.7
19.4
2.8
12.7
1.0
2016E
128.7
29.5
19.6
24.5
17.2
168.3
14.5
18.7
0.0
16.6
2.4
11.1
0.0
Neutral

Update on launch of inhalers in Europe.
Improvement in profitability at Cipla Medpro.
(INR Million)
Y/E March
Net Revenues
YoY Change (%)
Total Expenditure
EBITDA
Margins (%)
Depreciation
Interest
Other Income
Profit before Tax
Tax
Rate (%)
Reported PAT
Adj PAT
YoY Change (%)
Margins (%)
Domestic formulation sales
YoY Change (%)
Export formulations
YoY Change (%)
E: MOSL Estimates
January 2014
FY13
1Q
19,581
23.0
14,184
5,397
27.6
729
11
531
5,188
1,182
22.8
4,006
2,632
3.9
13.4
9,388
30.4
8,101
23.0
2Q
21,918
23.3
15,149
6,770
30.9
740
54
641
6,618
1,618
24.4
5,000
3,536
14.5
16.1
9,332
13.7
10,389
38.2
3Q
20,705
17.8
15,775
4,930
23.8
780
93
535
4,592
1,203
26.2
3,389
3,389
25.6
16.4
9,241
9.3
9,692
38.0
FY14
4Q
19,667
5.4
15,572
4,095
20.8
783
176
585
3,720
1,045
28.1
2,676
2,676
-1.9
13.6
7,780
8.3
9,536
11.5
1Q
24,639
25.8
17,885
6,754
27.4
789
408
691
6,249
1,500
24.0
4,749
4,749
80.4
19.3
11,039
17.6
10,344
27.7
2Q
25,124
14.6
19,482
5,642
22.5
914
450
756
5,034
1,358
27.0
3,676
3,676
4.0
14.6
10,398
11.4
12,190
17.3
3QE
26,575
28.4
20,718
5,857
22.0
1,040
450
420
4,787
1,197
25.0
3,590
3,590
5.9
13.5
10,622
15.0
13,640
40.7
4QE
25,931
31.8
20,534
5,397
20.8
1,170
450
420
4,197
1,049
25.0
3,147
3,147
17.6
12.1
8,883
14.2
14,570
52.8
FY13
FY14E
82,793
97.0
60,815
21,979
26.5
3,305
276
1,323
19,721
5,443
27.6
15,449
11,440
1.7
13.8
35,892
15.6
37,718
27.1
102,268
95.4
78,619
23,649
23.1
3,913
1,757
2,288
20,266
5,103
25.2
15,163
15,163
32.5
14.8
40,942
14.1
50,744
34.5
C94
Divi's Laboratories
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
DIVI IN
132.7
162 / 3
1,228 / 905
2 / 14 / 3

Y/E March
Sales
EBITDA
Net Profit
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
CMP: INR1,222
2013 2014E 2015E

21.4 25.1 30.7
8.1
9.9 12.2
6.0
7.8
8.9
45.4 58.7 67.0
12.9 29.4 14.2
188.4 223.6 260.4
26.0 28.5 27.7
33.1 37.1 36.1
38.7 40.0 45.0
2016E
37.0
14.8
11.5
86.9
29.7
307.6
30.6
39.4
45.0
26.9
6.5
20.0
1.2
20.8
5.5
16.3
1.6
18.2
4.7
13.2
2.1
14.1
4.0
10.8
2.7
Buy
Divi's Laboratories (DIVI) is likely to post 18% YoY increase in 3QFY14E

revenue to INR6.3b on increased capacity utilization at the new SEZ
unit and favorable currency impact. Growth would be driven by both
CCS and API business.
EBITDA is likely to grow 32% YoY to INR2.4b on a low base of 3QFY13
when the company reported the lowest EBITDA margin in three years.
Thus, EBITDA margin is likely to expand 400bp YoY to 38%.
We expect PAT to grow 23% YoY to INR1.8b, slower than EBITDA mainly
due to higher depreciation, lower other income and higher taxes.
There was a forex gain of INR160m in 3QFY13.
Divi's expects FY14 revenue to grow by 15-20% (15% guided earlier),
with FY15 growth expected above 20%. Capacity utilization at DSN SEZ
would continue to ramp up aided by the US FDA approval for the
remaining three blocks (inspection in 4QFY14).
The power shortage issue has been resolved and will aid margin
expansion. Management expects to maintain at least 38% EBITDA
margin, going forward.
The stock trades at 20.8x FY14E and 18.2x FY15E earnings. Maintain
Buy.

Ramp-up at Vizag SEZ and timeline for its US FDA inspection.
Impact of subsiding power cost on profitability.
(INR Million)
Y/E March
Net Op Revenue
YoY Change (%)
Total Expenditure
EBITDA
Margins (%)
Depreciation
Interest
Other Income
PBT
Tax
Rate (%)
Reported PAT
Adj PAT
YoY Change (%)
Margins (%)
CCS Revenues
YoY Change (%)
Carotenoid Revenues
YoY Change (%)
E: MOSL Estimates;
January 2014
FY13
1Q
4,684
30.6
2,780
1,904
40.7
175
4
418
2,143
469
21.9
1,674
1,674
63.2
35.7
2,148
22.2
210
50.0
2Q
4,726
33.5
2,880
1,846
39.1
188
3
-112
1,544
364
23.6
1,180
1,180
11.2
25.0
2,268
37.5
250
4.2
3Q
5,333
28.6
3,521
1,813
34.0
204
4
234
1,838
396
21.5
1,442
1,442
17.7
27.0
2,507
36.9
185
-7.5
FY14
4Q
6,496
-8.2
3,989
2,507
38.6
203
6
93
2,391
573
23.9
1,818
1,818
-15.3
28.0
3,118
-15.3
265
15.2
1Q
5,159
10.1
3,200
1,959
38.0
209
4
547
2,293
546
23.8
1,747
1,747
4.4
33.9
2,476
15.3
280
33.3
2Q
5,659
19.7
3,182
2,477
43.8
225
4
376
2,624
574
21.9
2,049
2,049
73.7
36.2
2,716
19.7
330
32.0
3QE
6,280
17.8
3,896
2,384
38.0
230
8
196
2,342
562
24.0
1,780
1,780
23.4
28.3
2,952
17.8
241
30.0
4QE
8,022
23.5
4,915
3,107
38.7
294
11
188
2,990
777
26.0
2,213
2,213
21.7
27.6
3,669
17.7
604
127.9
FY13
FY14E
21,399
15.1
13,297
8,102
37.9
769
18
497
7,812
1,792
22.9
6,020
6,020
12.9
28.1
10,272
15.1
910
12.3
25,120
17.4
15,194
9,926
39.5
958
27
1,307
10,249
2,460
24.0
7,789
7,789
29.4
31.0
11,813
15.0
1,454
59.8
C95
Dr Reddy's Laboratories
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
DRRD IN
170.1
428 / 7
2,554 / 1,721
0 / 4 / 28
CMP: INR2,519
We expect Dr Reddy's Laboratories (DRRD) to post 26% YoY growth in

revenue (no one-off this quarter) for 3QFY14E to INR36b.
Growth would be led by 41% YoY growth in US revenue and 38% YoY
growth in the Russia/CIS. Domestic formulation is likely to grow 8%
YoY, while PSAI is estimated to grow 23% YoY.
Core EBITDA would grow 36% YoY to INR7.7b, driven by improving

product mix in the US base business and strong growth in Russia. This
quarter will see the full benefit of gVidaza launch along with continued
upside from gDacogen.
Thus, we expect core EBITDA margin to expand 170bp YoY.
Adjusted PAT would be INR4.5b, up 24% YoY - lower than the growth in
EBITDA mainly due to higher tax expense.
While there is uncertainty on timely FDA approvals, recently-launched

limited competition injectable products and pipeline of 65 pending
ANDAs will support growth in the US over medium term.
The stock trades at 21.9x FY14E and 18.9x FY15E core earnings. Maintain
Buy.

Y/E March
Sales
EBITDA
Net Profit
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2013
116.3
24.8
15.1
90.2
21.9
435.4
20.7
17.2
16.3
2014E
135.6
29.6
19.3
115.0
27.4
536.9
21.4
17.8
13.8
2015E
153.2
34.5
22.4
133.5
16.1
654.0
20.4
19.5
12.2
2016E
171.0
38.0
24.6
146.5
9.8
784.2
18.7
19.2
11.1
27.9
5.8
17.6
0.6
21.9
4.7
14.6
0.6
18.9
3.9
12.3
0.6
17.2
3.2
10.8
0.6
Buy

View on pipeline for products in the US.
FY15 outlook for both generics and PSAI businesses.
Quarterly Performance - IFRS
(INR Million)
Y/E March
1Q
Gross Sales
25,406
YoY Change (%)
28.4
Total Expenditure
20,410
EBITDA
4,996
Margins (%)
19.7
Amortization
1,296
Other Income
25
Profit before Tax
3,725
Tax
365
Rate (%)
9.8
Net Profit
3,360
One-off/low-competition PAT in US 715
Adjusted PAT
2,645
YoY Change (%)
17.5
Margins (%)
10.4
US Sales
7,920
YoY Change (%)
37.6
Branded formualtion sales
8,968
YoY Change (%)
32.8
E: MOSL Estimates
January 2014
FY13
2Q
28,809
27.0
21,900
6,909
24.0
2,064
796
5,641
1,567
27.8
4,074
586
3,488
29.9
12.1
9,270
47.4
9,056
17.1
3Q
28,651
3.5
22,977
5,674
19.8
1,382
168
4,460
827
18.5
3,633
0
3,633
71.4
12.7
9,243
-16.8
9,654
24.6
FY14
4Q
33,400
25.6
26,215
7,185
21.5
1,495
2,162
7,852
2,141
27.3
5,711
325
5,386
101.5
16.1
11,413
30.7
9,323
18.5
1Q
28,449
12.0
23,051
5,398
19.0
1,603
342
4,137
528
12.8
3,609
335
3,273
23.8
11.5
10,871
37.3
9,459
5.5
2Q
33,575
16.5
25,119
8,456
25.2
1,733
972
7,695
792
10.3
6,903
0
6,903
97.9
20.6
13,244
42.9
11,543
27.5
3QE
35,947
25.5
28,218
7,729
21.5
1,833
273
6,168
1,665
27.0
4,503
0
4,503
23.9
12.5
13,020
40.9
11,769
21.9
4QE
37,641
12.7
29,661
7,980
21.2
1,933
293
6,340
1,712
27.0
4,628
0
4,628
-14.1
12.3
12,400
8.6
11,199
20.1
FY13
FY14E
116,266
20.2
91,503
24,763
21.3
6,237
3,151
21,676
4,900
22.6
16,777
1,627
15,150
55.7
13.0
37,846
18.7
37,001
22.9
135,612
16.6
106,049
29,563
21.8
7,102
1,879
24,340
4,697
19.3
19,643
335
19,307
27.4
14.2
49,541
30.9
43,970
18.8
C96
GlaxoSmithKline Pharmaceuticals
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
GLXO IN
84.7
251 / 4
2,964 / 2,005
20 / 15 / 31

Y/E December
Sales
EBITDA
Net Profit
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2012 2013E 2014E

26.0 25.0 28.0
7.9
5.0
6.7
6.8
4.7
5.8
80.0 55.6 68.5
7.3 -30.5 23.2
237.3 242.3 247.2
33.7 22.9 27.7
49.4 33.8 41.3
71.3 92.3 91.6
37.0
12.5
29.1
1.7
53.2
12.2
46.7
1.5
43.2
12.0
34.4
1.9
2015E
32.2
9.0
7.4
87.1
27.2
259.2
33.6
50.1
85.1
34.0
11.4
25.8
2.2
CMP: INR2,958
Neutral
We expect GlaxoSmithKline Pharmaceuticals (GLXO) to report 7% YoY

growth in 4QCY13E sales to INR6.1b, impacted by the lower volume
offtake during the quarter due to trade channel dispute and impact of
the pricing policy.
EBITDA is likely to decline by 42% YoY to INR1.1b and EBITDA margin

down 11% YoY to 18.1%. Profitability will continue to be impacted by
supply chain related issues highlighted in 1QCY13 and price revisions
taken due to the policy.
We expect adjusted PAT to decline 36% YoY to INR1.5b in 4QCY13E, in

line with EBITDA decline, due to subdued operational performance.
Performance for 1QCY13 was impacted by supply chain related issues,

some of which were expected to get resolved by 3QCY13. While some
of these factors are temporary in nature, we believe the normalization
in margins will be gradual.
GLXO deserves premium valuations due to strong parentage (giving

access to large product pipeline), brand-building ability and likely
positioning in post patent era. It is one of the few companies with the
ability to drive reasonable growth without any major capital
requirement, leading to high RoCE of 45-50%.
The stock trades at 53.2x CY13E and 43.2x CY14E EPS. Maintain Neutral.

Update on supply chain and trade channel issues.
Impact of Drug Price Control Order (DPCO) 2013.
(INR Million)
Y/E December
Net Sales
YoY Change (%)
Total Expenditure
EBITDA
Margins (%)
Depreciation
Interest
Other Income
PBT before EO Expense
Tax
Rate (%)
Adjusted PAT
YoY Change (%)
Margins (%)
Extra-Ord Expense
Reported PAT
E: MOSL Estimates
January 2014
CY12
1Q
6,228
3.3
4,271
1,957
31.4
41
0
804
2,720
863
31.7
1,857
-0.3
29.8
628
1,229
2Q
6,520
16.1
4,492
2,028
31.1
43
0
479
2,464
768
31.2
1,696
11.8
26.0
61
1,635
3Q
6,685
10.0
4,696
1,989
29.8
48
0
479
2,419
783
32.4
1,636
12.1
24.5
113
1,523
4Q
6,567
16.0
4,653
1,914
29.1
46
3
477
2,341
762
32.5
1,579
7.2
24.1
198
1,382
1Q
6,321
1.5
4,693
1,629
25.8
42
0
817
2,404
698
29.1
1,706
-8.1
27.0
16
1,690
CY13
2Q
3Q
6,369
6,205
-2.3
-7.2
5,232
5,126
1,137
1,080
17.9
17.4
50
50
0
0
454
455
1,541
1,485
590
468
38.3
31.5
951
1,017
-44.0
-37.8
14.9
16.4
-201
8
1,151
1,010
4QE
6,118
-6.8
5,013
1,106
18.1
52
0
439
1,493
480
32.1
1,013
-35.9
16.6
0
1,013
CY12
CY13E
25,999
11.2
18,112
7,888
30.3
178
3
2,239
9,944
3,176
31.9
6,769
7.2
26.0
999
5,769
25,035
-3.7
20,063
4,972
19.9
193
0
2,164
6,943
2,236
32.2
4,708
-30.5
18.8
371
4,336
C97
Glenmark Pharmaceuticals
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
GNP IN
270.9
146 / 2
612 / 458
6 / -13 / -9

Y/E March
Sales
EBITDA
Net Profit
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2013 2014E 2015E

40.2 50.1 59.3
9.9 10.6 12.4
3.2
5.0
6.3
12.0 18.4 23.1
-8.6 54.0 25.5
88.8 102.0 122.0
13.5 18.1 19.0
11.4 16.1 18.6
13.6 10.2 14.1
44.9
6.1
16.8
0.4
29.2
5.3
15.8
0.4
23.3
4.4
13.1
0.6
2016E
69.2
13.9
7.9
29.1
25.9
146.4
19.9
19.9
15.9
18.5
3.7
11.5
0.7
CMP: INR538
Buy
We expect Glenmark Pharmaceuticals (GNP) to post 20% YoY growth

in core revenue (excluding one-offs and R&D income) for 3QFY14E to
INR15.6b, led primarily by 38% growth in US generics business.
Reported sales would grow 14% YoY to INR15.7b.
The branded business is likely to grow 6% YoY due to slowdown in

semi-regulated markets. We do not expect any R&D licensing income
for the quarter (INR493m recorded in 3QFY13).
Core EBITDA is likely to grow 29% YoY to INR3.2b, with core EBITDA
margin up 130bp YoY, driven by better sales mix. Reported EBITDA
would stand at INR3.3b, up 14% YoY.
Adjusted PAT is expected at INR1.8b, up 12% YoY, lower than EBITDA,

mainly due to higher depreciation cost. Reported PAT is likely to
decline 14% YoY due to higher licensing income last year.
We expect GNP to gradually reduce its net debt over FY14E-16E period,
resulting in improvement in D/E from 1x in FY13 to 0.5x by FY16E. We
also expect gradual improvement in return ratios over the same
period.

Product pipeline for the US.
Update on free cash flow generation and debt repayment schedule.
Timeline for reporting clinical data for NCE pipeline
Quarterly performance
(INR Million)
Y/E March
Net Revenues (Core)
YoY Change (%)
EBITDA
Margins (%)
Depreciation
Interest
Other Income
PBT
Tax
Rate (%)
Reported PAT (incl one-offs)
Minority Interest
Adj PAT (excl one-offs)
YoY Change (%)
Margins (%)
US Sales
YoY Change (%)
E: MOSL Estimates
January 2014
FY13
1Q
10,404
19.8
2,198
21.1
275
380
-521
1,022
218
21.3
804
21
506
-53.6
4.9
3,924
56.2
2Q
12,552
18.9
2,560
20.4
321
384
219
2,074
477
23.0
1,597
30
1,424
91.3
11.3
4,307
43.5
3Q
13,813
34.0
3,158
22.9
356
400
95
2,497
366
14.7
2,130
1
1,575
1,972.1
11.4
4,365
36.8
FY14
4Q
13,355
25.3
2,694
20.2
318
436
-196
1,744
46
2.6
1,698
30
1,486
565.9
11.1
4,291
24.9
1Q
12,379
19.0
2,474
20.0
349
464
37
1,698
392
23.1
1,306
19
1,287
154.1
10.4
4,470
13.9
2Q
14,630
16.6
3,153
21.6
605
485
138
2,201
628
28.5
1,573
30
1,437
0.9
9.8
5,579
29.5
3QE
15,702
13.7
3,273
20.8
602
496
48
2,223
400
18.0
1,823
26
1,757
11.6
11.2
6,003
37.5
4QE
16,632
24.5
3,504
21.1
611
425
45
2,513
479
19.1
2,034
26
1,886
26.9
11.3
6,234
45.3
FY13
FY14E
50,123
24.7
10,610
21.2
1,270
1,600
-403
7,337
1,107
15.1
6,230
83
4,992
54.0
10.0
16,887
39.1
59,343
18.4
12,404
20.9
2,167
1,870
268
8,635
1,900
22.0
6,735
100
6,366
27.5
10.7
22,158
31.2
C98
IPCA Laboratories
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
IPCA IN
126.2
91 / 1
744 / 462
3 / 1 / 29

Y/E March
Sales
EBITDA
Net Profit
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2013 2014E 2015E

28.1 32.5 39.1
6.2
7.6
9.2
3.2
4.3
6.1
25.7 34.1 48.0
17.4 32.6 40.9
123.1 150.4 188.8
23.1 24.9 28.3
25.2 26.2 30.4
18.1 20.0 20.0
27.9
5.8
15.3
0.7
21.1
4.8
12.6
1.0
14.9
3.8
10.4
1.3
2016E
46.0
11.1
7.5
59.6
24.2
236.5
28.0
31.5
20.0
12.0
3.0
8.5
1.7
CMP: INR718
Buy
We expect Ipca Laboratories' (IPCA) 3QFY14E revenue to grow 15% YoY

to INR8b, led by 16% growth in export formulations. Domestic
formulation is expected to grow 14% YoY, while total API sales would
increase 11% YoY.
EBITDA is likely to grow 13% YoY to INR1.8b, with a mere 40bp decline
in EBITDA margin to 22.2%.
Despite moderate operational performance, we expect adjusted PAT

to grow 35% YoY to INR1b, boosted by higher other income. This is due
to a forex loss of INR186m on forex loans and hedges reported in
3QFY13.
We expect significant ramp-up in IPCA's international formulations

revenue led by 25% CAGR in export formulations and 40% CAGR in US
business over FY13-16E. Domestic formulations growth is likely to be
maintained at 14-15%.
We expect IPCA to clock FY13-16E EPS CAGR of 32% on the back of 18%
revenue CAGR, aided by 190bp EBITDA margin expansion and reversal
of MTM losses.
The stock is valued at 21.1x FY14E EPS and 14.9x FY15E EPS. Maintain
Buy.

Ramp-up at recently-approved Indore SEZ for the US.
Outlook for institutional tender business post FY14.
(INR Million)
Y/E March
Net Revenues (Core)
YoY Change (%)
EBITDA
Margins (%)
Depreciation
Interest
Other Income
PBT
Tax
Rate (%)
Reported PAT
Adj PAT
YoY Change (%)
Margins (%)
Domestic formulation
YoY Change (%)
Export formualtions
YoY Change (%)
E: MOSL Estimates
January 2014
FY13
1Q
6,344
19.7
1,329
21.0
199
95
-470
565
135
23.9
430
430
-30.3
6.8
2,242
18.6
2,245
8.7
2Q
7,713
23.7
1,788
23.2
209
89
155
1,646
395
24.0
1,251
1,251
60.5
16.2
2,628
14.6
3,392
30.2
3Q
7,010
14.0
1,584
22.6
216
74
-146
1,148
269
23.4
879
879
37.5
12.5
2,127
13.4
3,175
9.5
FY14
4Q
6,717
19.7
1,423
21.2
216
55
103
1,255
501
39.9
754
754
-1.5
11.2
1,784
20.8
3,131
30.8
1Q
8,056
27.0
1,710
21.2
241
71
-435
963
245
25.4
718
718
67.0
8.9
2,504
11.7
3,300
47.0
2Q
8,467
9.8
2,345
27.7
252
57
-346
1,690
396
23.4
1,295
1,295
3.5
15.3
2,762
5.1
3,626
6.9
3QE
8,049
14.8
1,785
22.2
250
75
125
1,585
396
25.0
1,189
1,189
35.3
14.8
2,425
14.0
3,669
15.6
4QE
7,952
18.4
1,730
21.8
265
60
60
1,465
366
25.0
1,099
1,099
45.7
13.8
2,056
15.3
4,082
30.4
FY13
FY14E
28,131
19.3
6,232
22.2
867
334
-488
4,543
1,299
28.6
3,243
3,243
17.4
11.5
8,781
16.6
11,942
19.9
32,524
15.6
7,571
23.3
1,008
264
-596
5,703
1,403
24.6
4,300
4,300
32.6
13.2
9,747
11.0
14,677
22.9
C99
Lupin
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
LPC IN
447.5
405 / 7
946 / 569
2 / 5 / 38

Y/E March
Sales
EBITDA
Net Profit
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
CMP: INR906
2013 2014E 2015E

93.7 108.0 123.1
20.0 25.0 29.8
10.3 14.5 18.8
23.1 32.4 42.1
30.4 40.2 29.9
116.3 149.3 185.7
22.5 24.4 25.1
33.3 35.7 33.8
15.6 17.7 21.2
2016E
141.2
33.8
21.6
48.2
14.5
227.1
23.4
32.0
0.0
39.2
7.8
20.6
0.4
28.0
6.1
16.2
0.7
21.5
4.9
13.5
0.9
18.8
4.0
11.5
0.0
Buy
We expect Lupin's (LPC) 3QFY14E revenue to grow 12% YoY to INR27.7b,

driven mainly by 18% YoY growth in advanced market formulations
(excl. one-off US sales). Domestic formulations are expected to grow
5% YoY, impacted by trade channel related issues.
Core revenue, excluding one-off upside from generic Tricor and Trizivir,
is expected at INR26.5b, up 12% YoY.
EBITDA is estimated to increase 14% YoY to INR6.5b, with EBITDA
margin expanding 40bp YoY, mainly aided by improving sales mix in US
generics and operating leverage benefits. Core EBITDA is expected to
be INR5.6b, with core EBITDA margin at 21.4%, flat YoY.
We expect adjusted PAT at INR3.8b, up 35% YoY, aided by lower tax
expenses YoY. Reported PAT is expected at INR4.6b, up 34% YoY.
Key growth drivers for FY14E/15E will be the strong product pipeline
for the US, including higher contribution from oral contraceptives.
While India formulations will see a slowdown in FY14E impacted by
the new pricing policy, we expect growth to rebound to historical
levels of 18-20% in FY15E.
The stock trades at 28x FY14E and 21.5x FY15E EPS. Maintain Buy.

Outlook on future launches in the US.
Revival in constant currency sales growth in I'rom.
Outlook on domestic formulations business, post DPCO 2013.
Y/E March
Net Sales
YoY Change (%)
Total Expenditure
EBITDA
Margins (%)
Depreciation
Interest
Other Income
PBT
Tax
Rate (%)
Reported PAT
EO Exp/(Inc)
Minority Interest
Recurring PAT
YoY Change (%)
Margins (%)
Advanced mkt formulations
YoY Change (%)
Emerging mkt formulations
YoY Change (%)
E: MOSL Estimates; Quarterly nos
January 2014
(INR Million)
FY13
1Q
2Q
22,192
22,393
43.8
28.6
17,961
17,848
4,230
4,545
19.1
20.3
654
690
101
101
582
657
4,058
4,412
1,208
1,438
29.8
32.6
2,850
2,974
0
0
46
69
1,783
2,753
-15.1
3.2
8.0
12.3
11,826
11,745
68.6
34.6
8,049
8,256
27.4
23.0
will not add up to
FY14
3Q
4Q
1Q
2Q
3QE
4QE
24,659
25,374
24,207
26,315
27,724
29,747
37.6
34.7
9.1
17.5
12.4
17.2
18,961
19,271
18,867
20,083
21,209
22,846
5,698
6,103
5,340
6,232
6,515
6,901
23.1
24.1
22.1
23.7
23.5
23.2
688
1,290
624
606
700
750
77
133
54
49
54
54
617
547
565
1,178
390
390
5,550
5,227
5,226
6,755
6,151
6,487
2,116
1,080
2,172
2,582
1,538
1,628
38.1
20.7
41.6
38.2
25.0
25.1
3,434
4,148
4,055
4,173
4,613
4,859
0
0
-1,000
0
0
0
82
66
44
111
90
80
2,812
3,000
3,331
3,383
3,797
3,959
12.5
262.1
86.8
22.9
35.1
32.0
11.4
11.8
13.8
12.9
13.7
13.3
14,646
14,875
13,917
14,183
16,687
17,600
57.5
37.2
17.7
20.8
13.9
18.3
7,660
8,063
7,861
9,270
8,566
9,589
15.4
35.0
-2.3
12.3
11.8
18.9
full year nos due to restatement of past quarters
FY13
FY14E
94,617
37.9
74,041
20,576
21.7
3,322
410
2,403
19,247
5,842
30.4
13,405
0
263
10,348
46.7
10.9
53,100
48.0
32,027
24.9
107,993
14.1
83,004
24,988
23.1
2,680
211
2,522
24,620
7,920
32.2
17,700
-1,000
325
14,470
39.8
13.4
63,270
19.2
35,286
10.2
C100
Ranbaxy Laboratories
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
RBXY IN
423.1
196 / 3
525 / 254
6 / 34 / -17
2012 2014E 2015E

124.6 136.7 141.8
19.4 11.3 27.3
5.5
4.8
5.8
30.2 -14.7 39.5
13.0 11.5 13.8
-32.5 -11.8 20.6
96.4 79.4 113.1
31.4 -18.5 35.0
21.0
9.3 23.9
0.0 20.4 42.3
32.0 36.3
4.3
5.2
10.2 22.2
0.0
0.5
are 15 months

Y/E March
Sales*
EBITDA*
Adj. PAT
Rep. EPS (INR)*
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
* FY14E figures
CMP: INR464
30.1
3.7
8.5
1.2
2016E
140.5
19.3
10.6
25.0
25.0
80.5
132.3
18.9
14.6
23.4
16.7
3.1
11.9
1.2
Sell
We expect Ranbaxy Laboratories (RBXY) to post 6% YoY growth in sales

for 4QFY14E to INR28.8b, impacted by a slowdown in India, Europe
and Africa. Excluding the upside from gActos last year, core sales are
expected to grow 16% YoY.
EBITDA is expected to grow 188% YoY to INR2.3b, on an abnormally
low base of 4QCY12, which was impacted by gAtorvastatin recall and
high consent decree related costs. Similarly, growth in core EBITDA
would be ~5x, with core EBITDA margin up 6.4% YoY.
We expect reported PAT at INR1.4b, compared to INR4.9b loss reported
in 4QCY12. PAT, adjusted for forex impact and FTFs, is expected at
INR1.1b, compared to a loss of INR45m in the previous quarter.
We believe the outlook for RBXY remains challenging as quality/
compliance issues have impacted its operations and will weigh on
investor confidence.
It is imperative for the company to improve core business margins as
one-offs have started to wane off.
The stock trades at 36.3x FY14E and 30.1x FY15E EPS. Maintain Sell.

Timeline for resolving US FDA issues under the consent decree.
Improvement in core EBITDA margin.
Launch timeline for Divan and Valcyte.
CY12
FY14
2Q
3Q
4Q
1Q
2Q
3QE
4QE
Net Income
32,284
26,910
27,112
25,005
26,834
28,016
28,791
YoY Change (%)
54.2
28.4
-28.5
-34.0
-16.9
4.1
6.2
EBITDA
5,113
3,495
811
1,906
2,625
1,938
2,335
Margins (%)
15.8
13.0
3.0
7.6
9.8
6.9
8.1
Depreciation
783
816
805
797
763
849
880
Interest
484
389
537
512
488
503
510
Other Income
-2,972
1,889
-334
254
-1,378
-297
604
874
4,178
-865
851
-3
289
1,550
Extra-Ord Expense
5,993
-3,933
3,657
-818
4,863
4,202
-382
-5,119
8,112
-4,522
1,669
-4,866
-3,913
1,931
Tax
683
542
340
353
311
570
465
Rate (%)
-13.3
6.7
-7.5
21.1
-6.4
-14.6
24.1
Reported PAT
-5,802
7,570
-4,862
1,316
-5,177
-4,483
1,466
Minority Interest
56
29
59
59
64
58
56
Reported PAT (incl one-offs)
-5,857
7,542
-4,924
1,257
-5,241
-4,542
1,410
Adj PAT (excl. one-offs)
1,447
2,055
-45
904
1,302
611
1,121
YoY Change (%)
37.1
26.9
-101.2
-55.7
-10.0
-70.3
-45.5
Margins (%)
4.5
7.6
-0.2
3.6
4.9
2.2
3.9
Adj PAT incl one-offs
2,781
2,340
810
904
1,302
611
1,121
US Sales (USD m)
254
155
136
110
138
126
131
YoY Change (%)
167.4
84.2
-64.8
-72.5
-45.8
-18.8
-3.9
India formulation sales
5,541
5,829
5,418
5,427
5,426
5,748
5,510
YoY Change (%)
14.9
13.0
-0.4
10.3
-2.1
-1.4
1.7
E: MOSL Estimates; Reporting period changed to March ending; FY14E figures are 15 months
(INR Million)
Y/E March
January 2014
5QE
28,072
3.5
2,454
8.7
910
510
350
1,384
0
1,384
415
30.1
968
56
912
912
0.0
3.2
912
135
-0.9
5,765
6.4
CY12
FY14E
124,597
22.6
19,379
15.6
3,202
1,796
340
14,721
2,272
12,449
2,939
23.6
9,510
282
9,228
5,496
-32.5
4.4
9,679
946
31.4
22,073
11.6
136,719
9.7
11,266
8.2
4,205
2,527
-466
4,068
7,866
-3,798
2,117
-55.7
-5,915
293
-6,208
4,848
-11.8
3.5
7,538
385
-59.3
24,832
12.5
C101
Sanofi India
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
SANL IN
23.0
63 / 1
2,940 / 2,180
-3 / 0 / 10

Y/E December
Sales
EBITDA
Net Profit
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2012 2013E 2014E

14.9 17.1 19.7
2.3
2.8
3.1
1.8
2.3
2.7
76.7 99.4 116.2
-7.6 29.6 16.9
518.0 571.1 635.1
14.8 17.4 18.3
21.5 25.6 26.6
50.0 46.7 44.9
35.8
5.3
25.3
1.2
27.6
4.8
21.3
1.5
23.7
4.3
18.3
1.6
2016E
22.7
3.7
3.2
137.2
18.0
720.1
19.0
27.7
38.1
20.0
3.8
15.0
1.6
CMP: INR2,749
Neutral
We expect Sanofi India's (SANL) revenue to increase 17% YoY in

4QCY13E to INR4.6b, led by the domestic formulations business.
EBITDA is likely to grow 35% YoY to INR684m on a low base of 4QCY12.

EBITDA margin would stand at 14.7% v/s 12.7% in 4QCY12.
We expect PAT to grow 26% YoY to INR566m. Growth is likely to be

lower than EBITDA due to higher depreciation and amortization
expenses.
SANL's profitability has declined significantly in the last six years, with
EBITDA margin declining from 25% for CY06 to 15.6% for CY12, mainly
impacted by discontinuation of Rabipur sales in the domestic market
and acquisition of Universal Healthcare in 2011.
RoE has declined from 28.6% to 14.8% over the same period.
We believe the stock price performance is likely to remain muted in

the short term until clarity emerges on future growth drivers.
The stock trades at 27.6x CY13E and 23.7x CY14E EPS. Maintain Neutral.

Amortization of goodwill and brands acquired from Universal
Medicare.
Impact of the Drug Price Control Order (DPCO), 2013.
(INR Million)
Y/E December
Net Sales
YoY Change (%)
Total Expenditure
EBITDA
Margins (%)
Depreciation
Interest
Other Income
PBT
Tax
Effective tax Rate (%)
Reported PAT
Adj PAT
YoY Change (%)
Margins (%)
Domestic sales
YoY Change (%)
E: MOSL Estimates
January 2014
CY12
1Q
3,225
16.7
2,733
492
15.3
183
4
289
594
193
32.5
401
401
-20.8
12.4
2,765
24.5
2Q
3,741
23.5
3,219
522
14.0
186
4
267
599
194
32.4
405
405
-18.5
10.8
3,040
24.6
3Q
3,966
26.8
3,161
805
20.3
307
3
266
761
248
32.6
513
513
-6.4
12.9
3,288
27.7
4Q
4,007
18.6
3,500
507
12.7
223
3
382
663
215
32.4
448
448
24.3
11.2
3,315
18.9
1Q
3,629
12.5
3,161
468
12.9
223
3
414
656
213
32.5
443
443
10.5
12.2
3,169
14.6
CY13
2Q
3Q
4,100
4,725
9.6
19.1
3,477
3,728
623
997
15.2
21.1
227
234
1
0
396
402
791
1,165
279
396
35.3
34.0
512
769
512
769
26.4
49.9
12.5
16.3
3,420
3,699
12.5
12.5
4QE
4,668
16.5
3,984
684
14.7
254
1
403
832
266
31.9
566
566
26.4
12.1
3,671
10.7
CY12
CY13E
14,939
21.5
12,604
2,335
15.6
907
14
1,204
2,617
722
27.6
1,895
1,895
-0.9
12.7
12,408
23.8
17,122
14.6
14,350
2,772
16.2
938
5
1,615
3,444
1,154
33.5
2,290
2,290
20.9
13.4
13,959
12.5
C102
Sun Pharmaceuticals
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
SUNP IN
2,071.2
1,192 / 19
650 / 347
-3 / 6 / 45

Y/E March
2013 2014E 2015E
Sales
112.4 159.9 190.0
EBITDA
49.1 69.1 79.3
Rep. PAT
30.1 27.0 60.5
Rep.EPS (INR)
14.5 13.0 29.2
Core PAT
30.5 45.8 53.4
Core EPS (INR) 14.8 22.1 25.8
EPS Gr. (%)
31.3 50.0 16.6
BV/Sh. (INR)
72.4 82.4 107.5
RoE (%)
22.5 28.6 27.2
RoCE (%)
31.5 27.5 41.0
Payout (%)
17.3 21.8 12.9
Valuations
P/E (x)
39.0 26.0 22.3
P/BV (x)
8.0
7.0
5.4
EV/EBITDA (x)
15.3 15.3 15.3
Div. Yield (%)
0.7
0.7
0.7
2016E
240.1
105.9
84.0
40.6
61.1
29.5
14.3
143.4
23.5
41.8
10.9
19.5
4.0
15.3
0.7
CMP: INR576
Buy
We expect Sun Pharmaceuticals (SUNP) to post 48% YoY growth in

sales to INR42.2b, driven by 75% growth in US revenue on account of
URL and DUSA Pharma consolidation and traction in base business.
Domestic formulation is likely to grow 14% YoY, while RoW markets
will increase 29%. Core sales are expected to grow 44% YoY to INR39b.
EBITDA is likely to increase 45% YoY to INR18.3b. We expect EBITDA
margin to decline 90bp YoY to 43.3% due to declining profitability in
business, excluding Taro. Thus, we expect core EBITDA margin to
decline 210bp YoY to 40.3%, with core EBITDA at INR15.7b.
We expect reported PAT to grow 52% YoY to INR13.4b. Adjusted PAT is
expected to stand 44% higher at INR11.5b.
We believe the US will continue to be the core earnings driver for
SUNP along with support from India and RoW markets.
While India formulations will see a slowdown in FY14E impacted by
the pricing policy, we expect growth to rebound to historical levels of
16-18% in FY15E.
The stock trades at 26x FY14E and 22.3x FY15E core EPS. Maintain Buy.

Outlook on competitive landscape for Taro's products.
Sustainability of price increases at URL Pharma.

Y/E March
(INR Million)
FY13
FY14
1Q
2Q
3Q
4Q
1Q
2Q
3QE
Net Revenues
26,581
26,572
28,520
30,715
34,822
41,921
42,262
YoY Change (%)
62.5
40.3
33.0
31.8
31.0
57.8
48.2
Total Expenditure
14,413
14,889
15,909
18,116
19,515
23,637
23,953
EBITDA
12,169
11,684
12,611
12,599
15,306
18,284
18,309
Margins (%)
45.8
44.0
44.2
41.0
44.0
43.6
43.3
Depreciation
801
829
844
887
978
1,005
1,050
Net Other Income
-231
1,476
936
1,102
735
1,079
1,032
PBT before EO Exp
11,136
12,331
12,703
12,814
15,063
18,358
18,291
EO Exp/(Inc)
0
5,836
0
0
25,174
0
0
PBT
11,136
6,495
12,703
12,814 -10,111
18,358
18,291
Tax
1,925
2,139
2,369
1,773
1,511
2,760
3,018
Rate (%)
17.3
17.3
18.6
13.8
10.0
15.0
16.5
Profit after Tax
9,211
4,356
10,335
11,041 -11,622
15,598
15,273
Share of Minority Partner
1,256
1,161
1,521
925
1,139
1,975
1,852
Reported PAT
7,956
3,195
8,814
10,116 -12,761
13,623
13,421
One-off upsides
2,276
1,303
812
976
1,145
1,763
1,907
Adj Net Profit
5,679
7,728
8,002
9,140
11,269
11,861
11,515
YoY Change (%)
29.5
41.7
31.0
25.6
98.4
53.5
43.9
Margins (%)
21.4
29.1
28.1
29.8
32.4
28.3
27.2
US Sales
15,411
13,301
14,946
17,879
20,314
25,880
26,116
YoY Change (%)
147.8
66.5
43.7
76.9
31.8
94.6
74.7
Taro Sales
7,751
7,084
8,856
7,209
7,441
11,421
11,036
YoY Change (%)
0.0
32.7
40.7
9.8
-4.0
61.2
24.6
E: MOSL Estimates; Qtr. no. dont match with annual no. because of reinstatement of financials; Est.
January 2014
FY13
FY14E
4QE
40,936 112,389 159,940
33.3
40.4
42.3
23,696
63,327
90,802
17,239
49,062
69,138
42.1
43.7
43.2
1,080
3,362
4,113
1,032
3,284
3,878
17,191
48,984
68,903
0
5,836
25,174
17,191
43,149
43,729
3,074
8,205
10,363
17.9
16.8
15.0
14,117
34,944
33,366
1,442
4,863
6,408
12,675
30,081
26,958
1,488
5,367
6,302
11,187
30,550
45,831
22.4
31.5
50.0
27.3
27.2
28.7
24,586
59,238
59,946
37.5
70.6
1.2
9,381
33,788
33,217
30.1
52.7
-1.7
include one-off upsides.
C103
Torrent Pharma
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
TRP IN
169.2
80 / 1
521 / 328
-2 / 3 / 24

Y/E March
Sales
EBITDA
Net Profit
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2013 2014E 2015E

32.1 38.4 47.7
6.9
7.2
9.6
4.7
5.0
5.2
27.8 29.3 30.7
43.2
5.3
4.8
84.9 108.1 129.8
35.8 30.3 25.8
33.5 27.9 22.2
52.2 27.8 29.3
17.1
5.6
11.7
4.8
16.2
4.4
11.1
1.5
15.5
3.7
10.4
1.6
2016E
56.2
11.6
6.2
36.8
20.1
155.9
25.8
19.9
29.3
12.9
3.0
8.4
1.9
CMP: INR475
Buy
We expect Torrent Pharmaceuticals (TRP) to post 22% YoY growth in

3QFY14E sales to INR9.7b, led by strong growth in all markets outside
India, except Brazil. We expect domestic formulations to grow 11%
YoY to INR2.9b, while Brazil is expected to continue to show a
slowdown this quarter.
EBITDA is likely to grow 12% YoY to INR1.8b, with EBITDA margin
declining 140bp YoY.
Adjusted PAT would be INR1.2b, up 13% YoY, in line with operational
performance.
Over the last six years, Torrent has delivered 30.5% EPS CAGR, even as
capital employed CAGR was just 17.5%. RoCE has increased from 14.5%
in FY05 to 35.7% in FY13.
We believe that current valuations do not reflect the improvement in
business profitability (ex Europe), scale-up of international operations,
and Torrent's strong positioning in domestic formulations, particularly
in chronic therapeutic segments.

Sustained recovery in domestic formulations.
Performance of Brazilian operations amid market pressures.
Outlook for US business.
(INR Million)
Y/E March
Net Revenues (Core)
YoY Change (%)
EBITDA
Margins (%)
Depreciation
Interest
Other Income
Extra-Ord Expense
Tax
Rate (%)
Reported PAT
Minority Interest
Adj PAT
YoY Change (%)
Margins (%)
Dom. formulations sales
YoY Change (%)
Intl. formulations sales
YoY Change (%)
E: MOSL Estimates
January 2014
FY13
1Q
7,669
18.4
1,560
20.3
201
94
140
1,404
0
1,404
374
26.6
1,030
12
1,019
14.1
13.3
2,778
13.5
4,212
33.3
2Q
7,662
12.1
1,443
18.8
203
80
123
1,284
-110
1,394
309
24.1
1,085
12
963
-3.7
12.6
2,710
14.7
4,362
13.5
3Q
7,975
14.8
1,612
20.2
204
67
89
1,429
0
1,429
309
21.6
1,121
-3
1,123
35.0
14.1
2,586
12.7
4,490
14.2
FY14
4Q
8,710
29.2
2,200
25.3
220
100
80
1,960
370
1,590
480
24.5
1,110
0
1,480
164.4
17.0
2,180
9.8
5,260
34.1
1Q
9,300
21.3
1,880
20.2
210
80
80
1,670
-200
1,870
380
22.8
1,490
0
1,290
26.7
13.9
3,120
12.3
5,390
28.0
2Q
9,590
25.2
1,730
18.0
220
150
100
1,460
-60
1,520
390
26.7
1,130
0
1,070
11.2
11.2
2,970
9.6
5,720
31.1
3QE
9,718
21.9
1,827
18.8
229
90
130
1,638
0
1,638
377
23.0
1,261
0
1,261
12.3
13.0
2,870
11.0
5,773
28.6
4QE
9,814
12.7
1,786
18.2
239
19
140
1,668
0
1,668
334
20.0
1,335
0
1,335
-9.8
13.6
2,442
12.0
5,796
10.2
FY13
FY14E
32,120
19.1
6,930
21.6
830
340
430
6,190
370
5,820
1,470
23.7
4,350
20
4,705
43.2
14.6
10,240
12.7
18,340
23.8
38,422
19.6
7,223
18.8
898
339
450
6,436
-260
6,696
1,480
23.0
5,216
0
4,956
5.3
12.9
11,402
11.3
22,679
23.7
C104
December 2013 Results Preview | Sector: Media
Media
Companies Covered
Advertising: Regulatory ad cap to impact broadcasters; expect healthy

growth for regional print
D B Corp
Broadcasters are likely to be adversely impacted by the regulatory cap on

advertisement duration. The regulator, TRAI reduced the duration of advertisements
from 14 minutes/hour in 2QFY14 to 12 minutes/hour in 3QFY14. Strong market share
and sports revenue would translate to ~20% ad revenue growth for Zee v/s NIL for Sun
TV, which has been unable to adjust pricing in line with the sharp correction in
advertising inventory. Ad growth for regional print is likely to remain strong at 15/16%
YoY for DB Corp/HMVL and ~10% YoY (like-to-like) for Jagran. For HT English, we expect
ad growth to improve to 6% YoY (v/s 4% YoY in 2QFY14).
Dish TV
H T Media
Jagran Prakashan
PVR
Sun TV Network
Zee Entertainment
Expect 21% YoY earnings growth for Media universe

While Jagran/HMVL are expected to report the highest YoY earnings growth at ~50%
(low base), DB Corp and Zee should continue with steady performance (12/17%
earnings growth). Dish TV's net loss is expected to decline ~70% QoQ driven by strong
EBITDA growth. HT Media's PAT is expected to grow by ~9%.
DTH: Industry subscriber additions to increase QoQ

We expect DTH subscriber additions to increase QoQ, led by festive demand. However,
gross additions for Dish TV are likely to remain relatively muted (~0.45m in 3QFY14),
driven by some erosion in market share, led by higher competitive pressure.
Hiccups in digitization process continue

There have been hiccups in phase-I implementation, as cable subscribers are yet to
fully transition to "addressable" systems. The regulator, TRAI recently extended the
deadline for phase-I gross billing and phase-II customer application form collection
to 31 December 2013.
Abbreviations and acronyms
GEC: General entertainment
channel
DTH: direct to home
Digitization remains a strong theme for broadcasting; earnings revival

continues for regional print
Our industry interactions suggest that the ad environment remains challenging. The
print media sector continues to post earnings recovery, led by yield improvement
focus for regional print and cost management. Digitization remains a strong theme
for broadcasting and distribution stocks, as the government and regulator have been
aggressively monitoring the digitization progress.
D B Corp
Dish TV
HT Media
Jagran Prakashan
PVR
Sun TV
Zee Entertainment
Sector Aggregate
CMP
(INR)
27.12.13
285
60
75
90
628
376
279
(INR million)
Rating
Dec.13
Buy
Buy
Neutral
Buy
Buy
Buy
Neutral
5,042
6,163
5,739
4,516
3,632
5,212
11,181
41,486
Sales
Var.
% YoY
14.9
10.5
4.9
29.4
79.4
7.3
19.1
17.9
Var.
% QoQ
15.1
4.0
7.3
9.2
-0.7
11.8
1.5
6.0
Dec.13
1,421
1,648
993
1,083
636
3,983
2,936
12,700
EBITDA
Var.
% YoY
19.2
19.7
13.5
18.9
85.2
5.8
12.4
14.7
Var.
% QoQ
32.0
11.5
54.3
18.0
-15.0
17.9
-5.4
11.9
Net Profit
Dec.13
Var.
% YoY
824
16.7
-53
Loss
576
9.1
680
47.5
213
146.3
1,888
-0.6
2,165
11.6
6,293
21.7
Var.
% QoQ
37.0
Loss
177.5
49.2
-28.4
21.0
-8.4
18.2
Shobhit Khare (Shobhit.Khare@MotilalOswal.com)

January 2014
C105
Media: Quarterly financials

1QFY13
2QFY13
3QFY13
4QFY13 1QFY14E
Advertisement Revenue (INR b)

ZEEL
4.5
5.3
5.1
4.8
5.3
Sun TV
2.8
2.8
3.3
3.1
3.1
Dish TV
NM
NM
NM
NM
NM
DB Corp
2.7
2.6
3.2
2.8
3.3
Jagran Prakashan
2.2
2.2
2.4
2.3
2.9
HT Media
3.7
3.6
4.1
3.8
4.1
HMVL
1.2
1.1
1.2
1.1
1.3
Subscription Revenue (INR b)
ZEEL
3.6
3.9
4.1
4.5
4.2
Sun TV
1.5
1.5
1.6
1.6
1.8
Dish TV
4.6
4.7
4.9
5.0
5.3
DB Corp
0.7
0.7
0.7
0.7
0.8
Jagran Prakashan
0.6
0.7
0.7
0.8
0.9
HT Media
0.5
0.6
0.6
0.6
0.6
HMVL
0.4
0.4
0.4
0.4
0.4
Total Revenue (INR b)
ZEEL
8.4
9.5
9.4
9.6
9.7
Sun TV
4.3
4.3
4.9
4.7
6.0
Dish TV
5.2
5.3
5.6
5.6
5.8
DB Corp
3.8
3.8
4.4
4.0
4.5
Jagran Prakashan
3.2
3.2
3.5
3.4
4.1
HT Media
4.9
5.1
5.5
5.0
5.4
HMVL
1.6
1.6
1.6
1.6
1.8
EBITDA (INR b)
ZEEL
2.3
2.2
2.6
2.4
2.9
Sun TV
3.2
3.3
3.8
3.5
3.5
Dish TV
1.6
1.6
1.4
1.2
1.2
DB Corp
0.76
0.86
1.19
0.94
1.33
Jagran Prakashan
0.79
0.78
0.91
0.54
1.02
HT Media
0.67
0.57
0.87
0.72
0.78
HMVL
0.28
0.29
0.29
0.29
0.40
EBITDA Margin (%)
ZEEL
27.7
22.8
27.8
25.1
30.0
Sun TV
75.9
75.9
77.5
73.7
58.8
Dish TV
29.9
29.2
24.7
21.6
21.0
DB Corp
20.3
22.7
27.2
23.6
29.6
Jagran Prakashan
24.8
24.3
26.1
15.8
24.7
HT Media
13.7
11.1
16.0
14.3
14.4
HMVL
17.7
18.0
17.6
18.9
22.0
Adj. PAT (INR b)
ZEEL
1.58
1.88
1.94
1.80
2.25
Sun TV
1.64
1.52
1.90
1.78
1.64
Dish TV
-0.32
-0.21
-0.45
-0.44
-0.30
DB Corp
0.44
0.49
0.71
0.55
0.76
Jagran Prakashan
0.39
0.49
0.46
0.28
0.58
HT Media
0.41
0.33
0.53
0.40
0.48
HMVL
0.21
0.22
0.21
0.23
0.30
* Consolidated numbers from 1QFY14. Not comparable with previous quarters
January 2014
2QFY14
3QFY14
YoY (%)
QoQ (%)
5.8
2.7
NM
3.1
2.8
3.9
1.3
6.1
3.3
NM
3.7
3.2
4.5
1.4
20
0
NM
15
33
9
16
5
22
NM
18
12
17
8
4.6
1.9
5.4
0.8
0.9
0.6
0.4
4.8
1.9
5.6
0.8
0.9
0.6
0.4
16
21
14
14
30
14
15
4
0
5
4
1
0
1
11.0
4.7
5.9
4.4
4.1
5.3
1.8
11.2
5.2
6.2
5.0
4.5
5.7
1.9
19
7
10
15
29
5
16
2
12
4
15
9
7
6
3.1
3.4
1.5
1.08
0.92
0.64
0.41
2.9
4.0
1.6
1.42
1.08
0.99
0.42
12
6
20
19
19
14
48
-5
18
11
32
18
54
3
28.2
72.4
25.0
24.6
22.2
12.0
23.2
26.3
76.4
26.7
28.2
24.0
17.3
22.7
-156bp
-105bp
205bp
103bp
-212bp
131bp
502bp
-193bp
401bp
179bp
359bp
179bp
527bp
-58bp
2.36
1.56
-0.16
0.60
0.46
0.21
0.25
2.17
1.89
-0.05
0.82
0.68
0.58
0.31
12
-8
-1
21
-88
-67
17
37
48
49
9
177
50
26
C106
3QFY14 ad revenue growth (YoY, %)
3QFY14 subscription/circulation revenue growth (YoY, %)
Industry DTH subscriber base and additions trend
Newsprint prices have started to trend down but impact to be offset by INR depreciation (USD/MT)

January 2014
C107
100
102
95
98
90
Nov-13
Sep-13
Dec-12
106
Dec-13
105
Oct-13
110
Dec-13
110
Mar-13
114
Sens ex Index
MOSL Medi a Index
Sep-13
Sens ex Index
MOSL Medi a Index
Jun-13
CMP (INR)
27.12.13
Media
D B Corp
Dish TV
Hindustan Media
HT Media
Jagran Prakashan
PVR
Sun TV
Zee Entertainment
Sector Aggregate
January 2014
285
60
113
75
90
628
376
279
Rating
EPS (INR)
FY13 FY14E FY15E
P/E (x)
FY13 FY14E FY15E
EV/EBITDA (x)
FY13 FY14E FY15E
RoE (%)
FY13 FY14E FY15E
Buy
Buy
Buy
Neutral
Buy
Buy
Buy
Neutral
11.9
-1.2
11.5
7.1
4.7
11.2
17.3
7.5
24.0
18.2
15.2
-50.8 -175.2 2202.2
9.8
7.3
6.0
10.5
10.5
9.4
19.2
13.9
10.7
55.9
37.1
23.8
21.7
20.7
16.7
37.1
29.3
24.7
31.5
25.3
20.2
11.1
14.0
7.2
7.2
11.3
15.2
10.9
20.5
13.4
22.3
NA
17.9
10.1
17.5
9.6
23.6
19.6
17.1
15.7
-0.3
15.4
7.1
6.5
16.9
18.2
9.5
18.8
0.0
18.9
8.0
8.4
26.4
22.6
11.3
10.4
11.2
2.6
4.1
8.0
13.6
9.4
21.3
12.2
8.8
9.5
1.7
3.4
6.5
10.1
7.8
17.9
10.2
26.3
NA
20.1
9.2
20.5
10.2
23.1
21.5
18.9
28.0
NA
20.1
9.4
23.3
14.3
25.5
21.9
20.7
C108
D B Corp
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
DBCL IN
183.4
52 / 1
292 / 210
5 / 10 / 17

Y/E March
2013 2014E 2015E
Net Sales
15.9 18.5 20.7
EBITDA
3.76 5.00 5.72
Adj. Net Profit 2.18 2.87 3.45
Adj. EPS (INR)
11.9 15.7 18.8
Adj. EPS Gr. (%)
7.9 31.6 20.3
BV/Sh (INR)
56.2 63.1 71.2
RoE (%)
22.3 26.3 28.0
RoCE (%)
18.0 22.0 23.9
Div. Payout (%) 53.7 55.7 57.0
Valuations
P/E (x)
24.0 18.2 15.2
P/BV (x)
5.1
4.5
4.0
EV/EBITDA (x)
14.0 10.4
8.8
Div. Yield (%)
1.9
2.6
3.2
2016E
23.2
6.50
4.01
21.9
16.2
80.6
28.8
25.0
57.0
13.0
3.5
7.5
3.8
CMP: INR285
Buy
We expect print advertising revenue to grow 15% YoY to INR3.66b.
Circulation revenue is likely to grow 14% YoY to INR0.83b.
Aggregate revenue is likely to increase 15% YoY to INR5.04b.
We estimate 3QFY14 EBITDA at INR1.42b, up 19% YoY. We expect EBITDA

margin to expand ~100bp YoY to 28.2%.
Net profit is likely to grow 17% YoY to INR0.82b.
The stock trades at 18.2x FY14E and 15.2x FY15E EPS. Buy.

YoY ad growth (we expect 15%)
EBITDA margin (we expect 28.2%).
(INR Million)
Y/E March
Sales
YoY (%)
Operating Expenses
EBITDA
YoY (%)
EBITDA margin (%)
Depreciation
Interest
Other Income
PBT
Tax
PAT
Minority Interest
Adj PAT
YoY (%)
Revenue break-up (INR m)
Ad revenue (print)
Circulation revenue
Radio
Event management
Others
Total revenue
E: MOSL Estimates
January 2014
FY13
FY14
FY13
FY14E
1Q
3,770
6.6
3,005
765
-23.8
20.3
135
17
46
658
222
33.7
436
0
437
-28.5
2Q
3,784
6.9
2,923
861
11.6
22.7
143
19
38
736
251
34.0
486
0
486
20.7
3Q
4,389
11.0
3,197
1,192
17.1
27.2
151
19
38
1,060
352
33.2
708
2
706
27.6
4Q
3,981
10.4
3,042
939
24.0
23.6
151
22
92
858
307
35.7
551
-1
552
21.7
1Q
4,494
19.2
3,166
1,328
73.7
29.6
158
25
45
1,191
430
36.1
761
0
761
74.3
2Q
4,380
15.8
3,303
1,077
25.1
24.6
159
23
39
934
332
35.6
602
0
602
23.8
3QE
5,042
14.9
3,621
1,421
19.2
28.2
160
28
45
1,279
455
35.6
824
0
824
16.7
4QE
4,556
14.5
3,382
1,175
25.1
25.8
165
27
81
1,064
379
35.6
685
0
685
24.1
15,923
8.8
12,163
3,760
5.9
23.6
581
80
213
3,313
1,132
34.2
2,181
0
2,181
7.9
18,473
16.0
13,472
5,001
33.0
27.1
640
102
210
4,468
1,597
35.7
2,872
0
2,872
31.7
2,701
656
140
46
227
3,770
2,636
698
153
40
257
3,784
3,184
729
191
9
276
4,389
2,779
731
183
31
257
3,981
3,253
767
172
15
288
4,494
3,099
796
175
18
292
4,380
3,662
831
214
18
318
5,042
3,202
833
206
18
297
4,556
11,300
2,814
667
126
1,017
15,923
13,216
3,227
766
69
1,194
18,473
C109
Dish TV
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
DITV IN
1,064.8
64 / 1
81 / 40
13 / -13 / -30
CMP: INR60
Buy
We expect revenue to increase 10.5% YoY and 4% QoQ to INR6.16b.
Subscription revenue is likely to increase 5% QoQ to INR5.64b.
We expect gross additions of 0.45m and net additions of 0.25m.
EBITDA margin would expand 170bp QoQ to 26.7%, largely on operating

leverage from ARPU improvement.
Net loss is likely to decline by 67% QoQ to INR53m.
The stock trades at an EV of 11.2x FY14E and 9.5x FY15E EBITDA. Buy.

Y/E March
2013 2014E 2015E
Net Sales
21.7 24.2 27.8
EBITDA
5.8
6.2
7.2
Adj. Net Profit
-1.3
-0.4
0.0
Adj. EPS (INR)
-1.2
-0.3
0.0
Adj. EPS Gr. (%)
NA
NA
NA
BV/Sh (INR)
-1.5
-1.8
-1.8
RoE (%)
NA
NA
NA
RoCE (%)
1.2
4.6 10.2
Div. Payout (%)
NA
NA
NA
Valuations
P/E (x)
NA
NA
NA
P/BV (x)
NA
NA
NA
EV/EBITDA (x)
12.7 11.2
9.5
EV/Sub (INR)
6,830 6,057 5,293
2016E
32.3
9.2
2.1
2.0
NA
0.2
NA
58.4
NA
30.2
NA
7.1
4,558

Quarterly gross adds (we expect 0.45m)
ARPU (we expect INR169)
EBITDA margin (we expect 26.7%)
(INR Million)
Y/E March
Sales
YoY Change (%)
Operating expenses
EBITDA
YoY Change (%)
EBITDA margin (%)
Depreciation
Interest
Other Income
PBT
Adjusted net profit
YoY Change (%)
Net Subs (m)
ARPU (INR/month)
Revenue break-up (INR m)
Subscription revenue
Lease rentals
Others
Total revenue
E: MOSL Estimates
January 2014
FY13
FY14
FY13
FY14E
1Q
5,200
12.9
3,644
1,556
38.7
29.9
1,512
473
106
-324
-324
76.8
9.8
156
2Q
5,336
10.7
3,779
1,557
27.9
29.2
1,533
317
80
-213
-213
-56.3
10.0
159
3Q
5,578
13.7
4,201
1,377
14.6
24.7
1,713
288
175
-449
-449
4.4
10.5
160
4Q
5,554
5.9
4,354
1,200
-16.7
21.6
1,450
344
157
-436
-436
-11.0
10.7
157
1Q
5,784
11.2
4,567
1,217
-21.8
21.0
1,444
354
277
-304
-304
-6.0
10.9
167
2Q
5,926
11.1
4,447
1,479
-5.0
25.0
1,504
345
211
-160
-160
-24.9
11.0
165
3QE
6,163
10.5
4,514
1,648
19.7
26.7
1,534
324
158
-53
-53
-88.3
11.3
169
4QE
6,331
14.0
4,464
1,867
55.6
29.5
1,568
304
158
153
153
-135.2
11.5
171
21,668
10.7
15,873
5,795
16.3
26.7
6,276
1,284
512
-1,252
-1,252
-21.2
10.7
157
24,204
11.7
17,992
6,211
7.2
25.7
6,050
1,328
804
-363
-363
-71.0
11.5
166
4,556
460
184
5,200
4,729
430
177
5,336
4,943
380
255
5,578
5,001
320
233
5,554
5,280
300
203
5,784
5,370
260
296
5,926
5,636
251
276
6,163
5,809
250
271
6,331
19,228
1,597
843
21,668
22,096
1,061
1,047
24,204
C110
H T Media
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
HTML IN
235.0
18 / 0
124 / 74
-11 / -34 / -36
CMP: INR75
Neutral
We expect HT Media to post revenue of INR5.74b, up 5% YoY.
We expect ad revenue to grow 9% YoY to INR4.52b.
We expect circulation revenue to increase 14% YoY to INR0.64b.
EBITDA margin is likely to increase by 130bp YoY to 17.3%.
Net profit should grow 9% YoY to INR0.58b.
The stock trades at 10.5x FY14E and 9.4x FY15E EPS. Neutral.

Y/E March
2013 2014E 2015E
Net Sales
20.5 21.9 23.6
EBITDA
2.83 3.19 3.35
Adj. Net Profit 1.68 1.68 1.89
Adj. EPS (INR)
7.1
7.1
8.0
Adj. EPS Gr. (%)
2.5
0.0 12.6
BV/Sh (INR)
74.0 81.4 89.9
RoE (%)
10.1
9.2
9.4
RoCE (%)
10.0 11.1 10.7
Div. Payout (%)
6.5
7.5
8.2
Valuations
P/E (x)
10.5 10.5
9.4
P/BV (x)
1.0
0.9
0.8
EV/EBITDA (x)
4.9
4.1
3.4
Div. Yield (%)
0.5
0.9
0.9
2016E
25.7
3.66
2.18
9.3
15.5
99.8
9.8
11.1
8.2

YoY English ad growth (we expect 6% YoY growth)
Hind ad growth (we expect 16% YoY growth)
EBITDA margin (we expect 17.3%)
8.1
0.8
2.5
1.0
(INR Million)
Y/E March
Revenue
YoY (%)
Operating expenses
EBITDA
YoY (%)
EBITDA margin (%)
Depreciation
Interest
Other Income
PBT
Tax
PAT
Minority Interest
Reported PAT
Adj PAT
YoY (%)
Ad revenue growth (%)
-English
-Hindi
Circulation revenue growth (%)
-English
-Hindi
E: MOSL Estimates
January 2014
FY13
1Q
4,899
-1.4
4,230
669
-25.9
13.7
220
103
209
555
129
23.2
426
19
407
407
-21.0
-3
-6
5
8
-3
13
2Q
5,107
3.6
4,542
565
-20.7
11.1
242
98
244
469
107
22.8
362
29
333
333
-24.0
-2
-3
1
11
1
16
3Q
5,470
3.9
4,596
875
12.6
16.0
220
110
238
783
222
28.3
562
34
528
528
9.5
2
-3
15
12
6
15
FY14
4Q
5,005
1.3
4,288
718
49.3
14.3
232
135
247
597
167
27.9
430
29
401
401
82.5
1
3
-3
19
27
16
1Q
5,409
10.4
4,630
779
16.5
14.4
219
137
276
699
183
26.2
516
41
475
475
16.7
10
8
14
16
25
12
2Q
5,347
4.7
4,703
644
13.9
12.0
223
174
570
816
177
21.7
639
57
582
207
-37.7
6
4
11
14
11
15
3QE
5,739
4.9
4,746
993
13.5
17.3
231
140
275
897
252
28.1
645
70
576
576
9.1
9
6
16
14
12
15
4QE
5,407
8.0
4,630
777
8.3
14.4
243
143
274
665
188
28.2
477
59
418
418
4.3
11
8
16
14
13
15
FY13
FY14E
20,482
1.9
17,656
2,826
-1.6
13.8
914
446
938
2,404
624
26.0
1,780
111
1,669
1,669
1
0
-2
5
13
7
15
21,901
6.9
18,709
3,192
13.0
14.6
916
594
1,395
3,077
800
26.0
2,277
2,051
1,676
0
9
7
14
14
14
14
C111
Jagran Prakashan
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
JAGP IN
331.9
30 / 0
118 / 78
7 / -2 / -22
CMP: INR90
Jagran's financials will not be comparable on a YoY basis due to inclusion

of 'Nai Duniya'.
We expect advertising revenue to grow 33% YoY to INR3.18b on

reported basis. On a like-to-like basis, we expect ad revenue growth
of 10%.
We expect circulation revenue to grow 30% YoY to INR0.91b on a

reported basis.
Aggregate revenue is likely to increase 29% YoY to INR4.52b.
We estimate EBITDA at INR1.08b and EBITDA margin at 24%.
Adjusted earnings are expected at INR0.68b, up 3% YoY despite

consolidation of Nai Duniya.

Y/E March
2013 2014E 2015E
Net Sales
15.3 17.1 18.9
EBITDA
3.0
3.9
4.6
Adj. Net Profit
1.5
2.0
2.7
Adj. EPS (INR)
4.7
6.5
8.4
Adj. EPS Gr. (%) -17.3 38.3 30.2
BV/Sh (INR)
29.5 33.6 38.5
RoE (%)
17.5 20.5 23.3
RoCE (%)
18.8 15.8 16.9
Div. Payout (%) 50.2 45.3 41.8
Valuations
P/E (x)
19.2 13.9 10.7
P/BV (x)
3.0
2.7
2.3
EV/EBITDA (x)
10.5
7.7
6.2
Div. Yield (%)
2.2
2.8
3.3
2016E
20.9
5.3
3.2
10.0
19.5
45.0
24.0
18.1
35.0
8.9
2.0
5.1
3.3
Buy

YoY ad growth (we expect 33% including ad revenue of Nai Duniya)
EBITDA margin (we expect 24%)
Quarterly Performance (Consolidated from 1QFY14)

Y/E March
FY13*
3Q
3,489
7.7
2,578
911
7.0
26.1
166
77
-9
659
0
0.0
461
11.6
(INR Million)
FY14#
3QE
4,516
29.4
3,433
1,083
18.9
24.0
194
78
78
889
209
23.5
680
47.5
1Q
2Q
4Q
1Q
2Q
4QE
Sales
3,175
3,221
3,428
4,131
4,137
4,327
YoY (%)
4.2
5.5
10.4
30.1
28.4
26.2
Operating expenses
2,387
2,439
2,888
3,111
3,219
3,450
EBITDA
788
782
540
1,019
918
877
YoY (%)
-3.9
-1.1
-18.0
29.3
17.5
62.3
EBITDA margin (%)
24.8
24.3
15.8
24.7
22.2
20.3
Depreciation
148
161
185
181
190
205
Interest
76
59
65
71
78
77
Other Income
-7
133
109
-12
-55
78
PBT
557
694
398
755
595
673
Tax
0
0
-4
177
139
159
0.0
0.0
-1.1
23.5
23.3
23.6
Adjusted net profit
390
486
283
578
456
514
YoY (%)
-21.5
6.2
-34.0
48.1
-6.2
81.6
Key Metrics
Ad revenue growth (YoY, %)
8
4
7
8
31
29
33
31
Circulation revenue growth (YoY,%)
10
9
12
21
35
35
30
19
RM/Sales (%)
36
34
34
36
34
36
37
36
E: MOSL Estimates; * Standalone # consolidated, Nai Duniya financials included from 4QFY13 onwards
January 2014
FY13
FY14E
13,314
7.0
10,292
3,021
-3.2
22.7
660
278
225
2,308
-4
(0.2)
1,620
-17.3
17,111
28.5
13,213
3,898
29.0
22.8
770
305
89
2,912
684
23.5
2,228
37.5
4
13
35
14
19
29
C112
PVR
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
PVRL IN
39.6
25 / 0
651 / 230
2 / 84 / 112
CMP: INR628
We expect revenue to grow 79.4% YoY (decline 0.7% QoQ) to INR3,632m

in 3QFY14. We estimate footfalls at 16.5m, ATP at INR172 and F&B SPH
at INR54.
EBITDA margin is likely to expand 50bp YoY (shrink 300bp QoQ) to

17.5%, aided by synergies from Cinemax acquisition.
We expect PAT to grow 146% YoY (decline 28% QoQ) to INR213m.
While 3Q had the highest content release, apart from Dhoom-3, none
of the movies performed well. Hence, footfalls and revenues were
adversely impacted.
We downgrade our FY14E and FY15E EBITDA by 9.7% and 5.3%,

respectively.
The stock is trading at an EV of 13.6x FY14E and 10.1x FY15E EBITDA. We

maintain Buy, with a target price of INR635 (8x FY16E EV/EBITDA).

Y/E March
Sales
EBITDA
NP
EPS (INR)
EPS Gr (%)
BV/Sh (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2013 2014E 2015E

8.1 14.0 17.3
1.2
2.3
3.0
0.4
0.7
1.1
11.2 16.9 26.4
14.7 50.7 56.2
162.2 172.8 196.3
9.6 10.2 14.3
7.8 11.9 16.4
10.4 13.7 11.0
55.9
3.9
26.6
0.2
37.1
3.6
13.6
0.5
23.8
3.2
10.1
0.6
2016E
21.1
3.9
1.7
41.5
57.0
234.4
19.3
20.9
8.4
15.1
2.7
7.8
0.8
Buy
Key issues to watch out for

Growth in footfalls.
New screen openings.
Synergies with Cinemax.
(INR Million)
Y/E March
Net Sales
YoY Change (%)
Total Expenditure
EBITDA
Margins (%)
Depreciation
Interest
Other Income
Extra-Ord expense
PBT
Tax
Rate (%)
MI & Profit/Loss of Asso. Cos.
Reported PAT
Adj PAT
YoY Change (%)
Margins (%)
E: MOSL Estimates
1Q
1,799
53.3
1,461
338
18.8
179
47
8
120
0
120
42
34.8
-3
76
81
37.1
4.2
FY13
2Q
3Q
1,927
2,024
64%
43.2
1,561
1,681
366
343
19.0
17.0
89
118
52
92
9
11
234
145
0
234
145
73
56
31.1
38.5
-1
2
162
91
162
87
14
-3.9
8.4
4.5
FY14
4Q
2,448
108.0
2,284
164
6.7
175
176
19
-167
13
-180
-294
164
3
117
104
4.8
1Q
3,352
86%
2,758
594
17.7
182
194
21
238
41
197
57
29.1
4
143
165
105
4.3
2Q
3,658
90%
2,910
748
20.4
209
210
13
342
23
319
42
13.2
-1
275
298
84
7.5
3QE
3,632
79%
2,997
636
17.5
196
189
16
266
0
266
53
20.0
0
213
213
146
5.9
4QE
3,283
34%
3,004
279
8.5
213
197
19
-112
-190
78
16
20.0
0
62
-90
-187
1.9
FY13
FY14E
8,053
55.7
6,884
1,169
14.5
560
368
91
332
-12
320
(124)
-38.7
2
445
459
0.9
5.5
13,954
73.3
11,696
2,258
16.2
826
817
113
729
0
729
230
31.5
0
499
499
0.1
3.6
Niket Shah (Niket.Shah@MotilalOswal.com) / Atul Mehra (Atul.Mehra@MotilalOswal.com)

January 2014
C113
Sun TV Network
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
SUNTV IN
394.1
148 / 2
494 / 327
-1 / -10 / -21

Y/E March
2013 2014E 2015E
Net Sales
18.2 21.3 24.7
EBITDA
13.8 15.0 17.7
Adj. Net Profit
6.8
7.2
8.9
Adj. EPS (INR)
17.3 18.2 22.6
Adj. EPS Gr. (%) -1.6
5.1 23.8
BV/Sh (INR)
73.4 80.4 88.5
RoE (%)
23.6 23.1 25.5
RoCE (%)
45.3 46.2 49.1
Div. Payout (%) 54.8 53.9 55.4
Valuations
P/E (x)
21.7 20.7 16.7
P/BV (x)
5.1
4.7
4.3
EV/EBITDA (x)
10.5
9.4
7.8
Div. Yield (%)
2.5
2.7
3.3
2016E
28.2
20.3
10.9
27.7
22.7
98.3
28.2
51.4
56.0
CMP: INR376
Buy
We expect revenue to increase 7.3% YoY to INR5.2b.
Advertising and broadcasting revenue is likely to remain flat YoY at

INR3.27b.
We expect total subscription revenue (domestic + international) to

grow 20.8% YoY to INR1.9b.
EBITDA is likely to grow 5.8% YoY to INR3.98b.
We expect PAT to remain flat YoY at INR1.89b.

YoY ad growth (we expect flat)
QoQ subscription growth (we expect flat)
13.6
3.8
6.6
4.1
(INR Million)
Y/E March
FY13
1Q
4,258
-6.2
3,230
-11.7
75.9
933
2
132
2,427
784
32.3
1,643
1,643
-12.4
2Q
4,333
-4.0
3,290
-10.0
75.9
1,138
5
96
2,243
726
32.4
1,517
1,517
-15.8
3Q
4,859
14.3
3,763
10.3
77.5
1,044
17
106
2,808
910
32.4
1,899
1,899
13.1
FY14
4Q
4,727
10.7
3,486
6.2
73.7
1,017
24
216
2,661
886
33.3
1,775
1,775
11.6
1Q
6,019
41.4
3,537
9.5
58.8
1,174
7
134
2,489
845
33.9
1,644
1,644
0.1
2Q
4,664
7.6
3,377
2.6
72.4
1,176
9
378
2,570
879
34.2
1,692
1,560
2.9
3QE
5,212
7.3
3,983
5.8
76.4
1,293
14
193
2,868
981
34.2
1,888
1,888
-0.6
FY13
FY14E
4QE
5,414
14.5
4,149
19.0
76.6
1,158
18
194
3,167
1,079
34.1
2,088
2,088
17.7
Revenue
18,176
21,309
YoY (%)
3.4
17.2
EBITDA
13,769
15,045
YoY (%)
-1.7
9.3
As of % Sales
75.8
70.6
Depreciation and Amortization
4,132
4,801
Interest
48
48
Other Income
550
899
PBT
10,139
11,095
Tax
3,306
3,783
32.6
34.1
Reported PAT
6,833
7,312
Adj PAT
6,833
7,181
YoY (%)
-1.6
5.1
Revenue Breakup (INR m)
Advertising and Broadcast
2,800
2,810
3,270
3,050
3,140
2,683
3,270
3,424
11,930
12,517
International
260
260
260
260
290
323
305
309
1,040
1,227
DTH
890
900
945
1,000
1,060
1,084
1,106
1,121
3,735
4,370
Domestic Cable
300
340
370
380
420
492
492
504
1,390
1,908
Films and Others
8
23
14
37
1,109
82
40
56
81
1,287
Total
4,258
4,333
4,859
4,727
6,019
4,664
5,212
5,414
18,176
21,309
E: MOSL Estimates; *1QFY14/2QFY14 includes IPL revenue of INR985.4m/INR54.2m and IPL EBITDA loss of INR307.9m/INR30.9m
January 2014
C114
Zee Entertainment Enterprises

Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
Z IN
954.0
267 / 4
292 / 194
7 / 6 / 17

Y/E March
2013 2014E 2015E
Net Sales
37.0 43.1 50.3
EBITDA
9.5 12.1 14.3
Adj. Net Profit
7.2
9.1 10.8
Adj. EPS (INR)
7.5
9.5 11.3
Adj. EPS Gr. (%) 27.9 26.4 18.9
BV/Sh (INR)
41.0 47.7 55.7
RoE (%)
19.6 21.5 21.9
RoCE (%)
29.1 32.8 32.6
Div. Payout (%) 26.6 25.0 25.0
Valuations
P/E (x)
37.1 29.3 24.7
P/BV (x)
7.0
6.0
5.1
EV/EBITDA (x)
26.5 20.6 17.3
Div. Yield (%)
0.7
0.9
1.0
2016E
59.6
18.2
13.9
14.6
28.4
66.0
23.9
35.5
25.0
CMP: INR279
Neutral
We expect advertising revenue to increase 20% YoY to INR6.1b.
We estimate subscription revenue growth of 16% YoY to INR4.77b.
EBITDA margin is likely to decline 160bp YoY to 26.3%.
Adjusted PAT would grow 12% YoY to INR2.17b.

YoY ad growth (we expect 20%)
Sports loss (we expect INR300m)
19.2
4.3
13.3
1.3
(INR Million)
Y/E March
Advertsing Revenue
Growth (%)
Subscription Revenue
Growth (%)
Other Sales and Services
Net Sales
Change (%)
Prog, Transmission & Direct Exp
Staff Cost
Selling and Other Exp
EBITDA
Change (%)
As of % Sales
Depreciation
Finance cost
Other Income
PBT
Tax
PAT
Minority Interest/Associates
Adj PAT after Minority Interest
Change (%)
Subscription revenue (INR m)
Domestic
International
Total Subscription revenue
E: MOSL Estimates
January 2014
FY13
FY14
FY13
FY14E
1Q
4,472
18
3,641
19
317
8,430
20.7
3,757
888
1,453
2,332
49.5
27.7
99
18
301
2,517
947
37.6
1,570
-12
1,582
18.3
2Q
5,281
34
3,950
36
305
9,536
32.7
4,791
873
1,695
2,177
4.9
22.8
96
23
260
2,318
444
19.2
1,874
-2
1,876
20.3
3Q
5,094
29
4,098
26
197
9,388
24.4
4,185
895
1,697
2,611
20.9
27.8
90
16
360
2,865
933
32.6
1,933
-8
1,941
39.3
4Q
4,792
15
4,546
13
305
9,643
11.0
4,669
835
1,716
2,423
51.5
25.1
115
29
538
2,817
1,014
36.0
1,803
8
1,795
26.3
1Q
5,301
19
4,241
16
191
9,733
15.5
4,108
956
1,754
2,915
25.0
30.0
87
22
722
3,528
1,289
36.5
2,239
-8
2,246
42.0
2Q
5,833
10
4,581
16
599
11,013
15.5
5,041
992
1,875
3,105
42.6
28.2
91
34
549
3,529
1,166
33.0
2,363
0
2,363
25.9
3QE
6,113
20
4,769
16
299
11,181
19.1
5,293
1,002
1,950
2,936
12.4
26.3
100
34
376
3,178
1,017
32.0
2,161
-4
2,165
11.6
4QE
5,817
21
4,939
9
377
11,132
15.4
4,893
1,016
2,034
3,189
31.6
28.7
115
32
369
3,412
1,100
32.3
2,313
-4
2,316
29.0
19,639
24.0
16,234
22.6
1,123
36,997
21.7
17,401
3,491
6,561
9,544
29.0
25.8
399
86
1,459
10,517
3,338
31.7
7,179
-15
7,194
26.0
23,063
17.4
18,530
14.1
1,466
43,059
16.4
19,335
3,966
7,613
12,145
27.3
28.2
392
122
2,023
13,655
4,574
33.5
9,080
-15
9,095
26.4
2,504
1,137
3,641
2,808
1,141
3,949
2,962
1,136
4,098
3,374
1,172
4,546
3,168
1,073
4,241
3,350
1,231
4,581
3,554
1,216
4,769
3,734
1,205
4,939
11,648
4,586
16,234
13,806
4,725
18,530
C115
December 2013 Results Preview | Sector: Metals
Metals
Companies Covered
Ferrous
Hindalco
Early green shoots in Europe; steel prices improve in N.America and Europe
Hindustan Zinc
In 3QFY14, steel prices showed an improvement in North America and Europe,

increasing by 3% and 2% QoQ respectively due to better demand expectation. There
are some early green shoots on economic recovery in these regions as major sentiments
indicators are showing an uptrend. On the other hand, China and CIS region witnessed
a price correction (down 1% each QoQ). Demand growth seems to be moderating in
China to more reasonable single digit levels. Key raw material prices such as iron ore
and coking coal were mostly unchanged. Iron ore prices increased marginally by 1%
QoQ to USD136/t, while coking coal prices declined 1% QoQ to USD141/t.

JSW Steel
Nalco
NMDC
Sesa Sterlite
SAIL
Tata Steel
Domestic steel prices rise on cost pressure; steel demand still weak
Indian steel prices moved higher due to price hikes taken by producers to cover for
the higher cost. Long product (TMT) prices increased 2% QoQ. Sponge iron and pellet
prices increased 5% and 7% QoQ respectively. Prices for iron ore fines inched upwards
on constraint supply. Iron ore fines prices in Odisha region moved from a low of
INR1,500/t in 2QFY14 to INR2,200/t currently. NMDC also hiked prices for both fines
and lumps twice in 3QFY14. However, demand scenario still remains weak in the
country. Most steel producers are expected to report flat QoQ volumes, while margins
are expected be higher due to higher realizations.
Hindalco
Hindustan Zinc
JSPL
JSW Steel
Nalco
NMDC
SAIL
Sesa Sterlite
Tata Steel
Sector Aggregate
CMP
(INR)
27.12.13
122
133
262
1,007
38
142
72
201
424
(INR Million)
Rating
Dec.13
Buy
Buy
Neutral
Sell
Buy
Buy
Sell
Neutral
Sell
217,351
34,349
50,836
109,072
16,579
28,966
112,375
195,686
361,732
1,126,945
Sales
Var.
% YoY
10.7
8.1
5.9
31.5
-2.1
41.5
5.3
14.6
12.7
13.3
Var. Dec.13
% QoQ
-0.3 22,120
-3.5 17,682
2.0 15,335
-5.0 20,808
-4.6
2,865
16.8 18,391
-2.6 12,417
8.6 67,183
-1.3 41,778
0.4 218,579
EBITDA
Var.
% YoY
27.1
18.4
-14.3
58.4
56.9
32.2
9.1
14.9
86.6
27.6
Var.
% QoQ
5.0
-6.1
-1.5
-6.9
7.0
23.1
43.2
-3.4
12.8
3.7
Net Profit
Dec.13
Var.
% YoY
6,265
30.2
17,582
9.0
6,728
-22.4
6,507
121.5
1,843
55.0
15,827
22.4
6,405
30.6
13,060
-20.9
8,001
LP
82,219
35.6
Var.
% QoQ
9.8
3.8
21.9
-17.8
2.9
20.1
86.9
-6.8
-12.7
5.9
Sanjay Jain (SanjayJain@MotilalOswal.com) / Pavas Pethia (Pavas.Pethia@MotilalOswal.com)

January 2014
C116
International steel market

European steel prices improve 2% QoQ (EURO/t)
N. American steel prices improve 3% QoQ (USD/t)
Chinese steel prices correct 1% QoQ (USD/t)
CIS prices correct 1% QoQ (USD/t)
Iron ore prices (CFR China) improved 1% QoQ (USD/t)
Coking coal prices corrected 1% QoQ (USD/t)
January 2014
C117
Indian steel market

Iron ore fines prices (INR/t)
Pellet (Barbil) prices (INR/t)
Source: Steel Mint, Company, MOSL
Indian long steel prices (INR/T, exl. ED & VAT)
Steel intermediate prices (INR/T, exl. ED & VAT)
Source: Steel Mint, MOSL
Non-ferrous
Aluminum prices remain weak; other base metals prices improve
Average 3QFY14 non-ferrous metal prices were mixed with zinc and copper increasing
2% and 1% QoQ respectively, while lead prices were flat. However, aluminum prices
corrected 1% QoQ. Aluminum spot premiums also corrected on an average basis by
8% QoQ to USD230/t. However, premium has once again jumped to ~USD260/t levels
in December. We factor aluminum, zinc and lead prices of USD2,000/t, USD1,900/t and
USD2,100/t in FY15E. We believe that non-ferrous companies are structurally better
placed than steel companies in terms of demand and pricing scenario in India. Hindalco
and NMDC are our top picks in the metal space.
January 2014
C118
Base metal prices were mixed QoQ (Quarterly averageUSD/ton)

Quarter
Avg.
3QFY14
2QFY14
1QFY14
4QFY13
3QFY13
2QFY13
1QFY13
4QFY12
3QFY12
2QFY12
1QFY12
4QFY11
3QFY11
2QFY11
1QFY11
1,894
1,859
1,840
2,032
1,946
1,885
1,927
2,024
1,897
2,223
2,249
2,393
2,315
2,012
2,017
Zinc
QoQ
(%)
2
1
-9
4
3
-2
-5
7
-15
-1
-6
3
15
0
-12
YoY
(%)
-3
-1
-5
0
3
-15
-14
-15
-18
10
12
5
5
15
37
Aluminium
Avg. QoQ YoY
(%) (%)
1,770
-1 -11
1,780
-3
-7
1,834
-8
-7
2,002
0
-8
1,997
4
-4
1,918
-3 -20
1,978
-9 -24
2,175
4 -13
2,090 -13 -11
2,398
-8
15
2,598
4
24
2,502
7
16
2,343
12
17
2,089
0
16
2,092
-3
41
Copper
Avg. QoQ
(%)
7,139
1
7,073
-1
7,147 -10
7,931
0
7,908
3
7,705
-2
7,869
-5
8,308
11
7,488 -17
8,982
-2
9,137
-5
9,644
12
8,633
19
7,242
3
7,013
-3
YoY
(%)
-10
-8
-9
-5
6
-14
-14
-14
-13
24
30
33
30
24
50
Avg.
2,103
2,101
2,053
2,301
2,198
1,974
1,973
2,093
1,982
2,458
2,550
2,603
2,389
2,031
1,943
Lead
QoQ
(%)
0
2
-11
5
11
0
-6
6
-19
-4
-2
9
18
5
-12
Relative performance-3m (%)
Alumina
QoQ
(%)
1
-3
-4
5
3
0
0
-4
-12
-8
4
7
15
-5
3
Silver (INR/kg)
Avg. QoQ
YoY
(%)
(%)
46,273
0
-23
46,077
3
-17
44,837
-20
-18
55,927
-7
1
59,949
8
11
55,755
2
-5
54,406
-2
-5
55,256
3
15
53,770
-9
35
58,791
2
96
57,430
20
101
48,008
20
82
39,929
33
46
29,948
5
28
28,557
8
30
YoY
(%)
-1
1
3
8
-1
-15
-22
-19
-10
17
21
20
20
18
61
Relative performance-1Yr (%)
Sens ex Index
MOSL Meta l s Index
120
YoY Avg.
(%)
-4 322
6 318
4 327
10 341
11 326
-20 316
-23 317
-20 317
-17 329
21 372
31 404
17 391
4 366
6 317
29 335
Sens ex Index
MOSL Meta l s Index
115
115
100
110
85
105
70
100
Dec-13
Sep-13
Jun-13
Dec-12
Dec-13
Nov-13
Oct-13
Sep-13
Mar-13
55
95
CMP (INR)
27.12.13
Metals
Hindalco
Hindustan Zinc
JSPL
JSW Steel
Nalco
NMDC
SAIL
Sesa Sterlite
Tata Steel
Sector Aggregate
January 2014
122
133
262
1,007
38
142
72
201
424
Rating
EPS (INR)
FY13 FY14E FY15E
P/E (x)
FY13 FY14E FY15E
Buy
Buy
Neutral
Sell
Buy
Buy
Sell
Neutral
Sell
17.0
16.4
37.2
49.7
2.3
16.7
6.0
20.8
1.6
7.2
8.1
7.0
20.3
16.5
8.5
11.9
9.7
270.2
10.6
12.0
16.7
27.3
43.7
3.1
15.9
6.7
19.0
40.4
13.7
17.3
29.8
58.8
3.2
17.4
6.8
24.2
47.0
10.2
8.0
9.6
23.1
12.4
8.9
10.8
10.6
10.5
10.0
8.9
7.7
8.8
17.1
11.9
8.2
10.6
8.3
9.0
8.9
EV/EBITDA (x)
FY13 FY14E FY15E
8.1
4.6
8.7
6.8
3.9
4.3
8.6
2.2
7.3
5.4
8.5
4.2
9.1
7.1
4.0
4.7
9.6
3.9
6.8
6.0
6.7
3.5
7.5
7.1
3.2
4.2
8.4
3.3
6.2
5.3
RoE (%)
FY13 FY14E FY15E
18.0
23.4
17.7
6.6
5.0
26.8
6.1
9.5
0.7
10.6
11.4
20.1
12.0
6.1
6.5
22.3
6.4
7.8
17.7
10.4
11.8
18.0
12.3
8.4
6.5
20.4
6.2
9.0
18.0
10.7
C119
Hindalco
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
HNDL IN
2,064.8
252 / 4
137 / 83
-1 / 15 / -14

Y/E March
Sales
EBITDA
NP
Adj. EPS (INR)
EPS Gr(%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV
EV/EBITDA (x)
Div. Yield (%)
2013 2014E 2015E 2016E

801.9 868.2 991.4 1,103.3
80.6 86.9 112.5
131.6
32.5 24.8 28.4
32.7
17.0 12.0 13.7
15.8
-4.4 -29.2 14.3
15.2
100.7 110.4 122.5
136.7
18.0 11.4 11.8
12.2
5.8
5.0
6.6
7.5
9.7 13.6 11.9
10.4
7.2
1.2
8.9
1.1
10.2
1.1
8.5
1.1
8.9
1.0
6.7
1.1
7.7
0.9
5.4
1.1
CMP: INR122
Buy
Net sales to increase 16% QoQ: We expect net sales to increase 16%
QoQ (up 7% YoY) to INR73b due to higher sales volumes in both
aluminum and copper segment. Aluminum sales volume is expected
to increase 2% QoQ, while copper sales volume is likely to increase
10% QoQ. HNDL's blended realization for aluminum is likely to remain
flat QoQ to INR159,340/t as aluminum LME prices are more or less flat
QoQ. We expect Novelis shipments to remain flat QoQ at 721kt, while
operating margins are expected to increase 4% QoQ to USD330/ton.
Standalone EBITDA to increase 8% QoQ: We expect standalone EBITDA
to increase 8% QoQ to INR5.9b due to higher aluminum and copper
sales volume and better margins in copper segment.
Maintain Buy: Hindalco is at an inflexion point as operating cash flows
are poised for rapid growth and as benefits of USD8b investment have
begun. Margins of aluminum business should expand, driven by
declining cost of production. Novelis' free cash flows will also improve
in FY15E as it exits the capex cycle. Reiterate Buy.

Mahan coal block is critical to drive profitability of its 359ktpa Mahan
smelter. The coal block has received stage I forest clearance so far.

Y/E March
Alumina (Production, kt)
Aluminium (sales, kt)
Copper (sales, kt)
Avg LME Aluminium (USD/T)
Net Sales
Change (YoY %)
EBITDA
Change (YoY %)
Interest
Depreciation
Other Income
PBT (before EO item)
Extra-ordinary Income
PBT (after EO item)
Total Tax
% Tax
Adjusted PAT
Change (YoY %)
Novelis Shipments (kt)
Novelis adj. EBITDA (USDm)
Consolidated adj. PAT
E: MOSL Estimates
January 2014
1Q
335
124
71
1,978
60,279
0.0
4,631
-46.6
815
1,705
1,714
3,826
1,300
5,126
878
23.0
2,948
-54.2
722
259
7,864
(INR Million)
FY13
2Q
3Q
328
326
127
135
73
82
1,918
1,997
61,635
68,717
-1.7
3.4
5,153
5,821
-23.0
-18.6
279
1,690
1,728
1,884
1,324
1,741
4,471
3,988
1,440
4,471
5,428
882
1,093
19.7
27.4
3,589
2,895
-28.6
-35.8
719
647
277
185
9,431
4,811
FY14
4Q
330
147
84
2,002
69,938
-8.5
6,432
-25.6
1,577
1,726
2,312
5,442
5,442
621
11.4
4,820
-24.7
698
240
8,970
1Q
348
130
68
1,834
58,379
-3.2
4,785
3.3
1,487
1,831
2,249
3,716
2,030
5,746
1,005
27.0
2,711
-8.0
708
218
4,162
2Q
334
132
77
1,780
63,049
2.3
5,398
4.8
1,832
1,964
2,798
4,401
3QE
355
135
85
1,770
73,263
6.6
5,851
0.5
1,487
1,964
2,230
4,630
4QE
359
170
85
1,900
79,757
14.0
7,606
18.2
2,578
2,666
2,017
4,379
4,401
830
18.9
3,571
-0.5
718
228
5,705
4,630
1,179
25.5
3,451
19.2
721
238
6,265
4,379
1,001
22.9
3,378
-29.9
749
261
7,188
FY13
FY14E
1,319
532
310
1,974
260,569
-2.0
22,037
-29.3
4,360
7,042
7,091
17,726
2,740
20,466
3,474
17.0
14,252
-36.3
2,786
961
32,485
1,396
566
315
1,821
274,448
5.3
23,639
7.3
7,384
8,424
9,295
17,126
17,126
4,015
23.4
13,111
-8.0
2,896
945
24,795
C120
Hindustan Zinc
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
HZ IN
4,225.3
562 / 9
143 / 94
0 / 25 / -11

Y/E March
Sales
EBITDA
NP
Adj. EPS (INR)
EPS Gr(%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV
EV/EBITDA (x)
Div. Yield (%)
2013 2014E 2015E

127.0 138.4 142.2
64.8 71.5 71.8
69.1 70.4 73.1
16.4 16.7 17.3
24.4
1.9
3.7
76.4 89.4 103.1
23.4 20.1 18.0
25.6 22.6 20.2
22.2 21.8 21.0
8.1
1.7
5.4
2.3
8.0
1.5
4.2
2.3
7.7
1.3
3.5
2.3
2016E
156.2
81.6
78.0
18.5
6.7
117.9
16.7
20.1
19.7
7.2
1.1
2.4
2.3
CMP: INR133
Buy
Net sales to decrease 3% QoQ due to lower volumes: We expect net

sales to decrease 3% QoQ (up 8% YoY) to INR34b on lower sales volume.
Realizations are expected to be marginally higher. LME zinc prices
have increased 2% QoQ, while lead prices have been flat QoQ. We
expect mine metal production of 230kt, while integrated lead/zinc
production is likely to be 220kt.
EBITDA to decrease 6% QoQ: We expect EBITDA to decrease 6% QoQ
to INR17.6b (+18% YoY) due to lower volumes. Integrated silver
production is expected to be 77t (down 17% QoQ).
Maintain Buy: HZL has guided for 950kt of MIC production in FY14 and
335tons of silver. We model 892kt of MIC production and 343t of
integrated silver production. We expect EBITDA to post 5% CAGR over
FY13-15E on higher sales volumes. The stock trades at 7.7x FY15E EPS
and at an EV of 3.5x FY15E EBITDA. Maintain Buy.

Management has guided for mine production (MIC basis) of 950k
tons in FY14. Growth in production from Zawar and Kayar and further
ramp-up at SK Mines are crucial to drive overall mine production.
Y/E March
Production (integrated)
Zn refined (000 tons)
Pb refined (000 tons)
Silver (tons)
Net Sales
Change (YoY %)
EBITDA
As % of Net Sales
Interest
Depreciation
Other Income
PBT (after EO item)
Total Tax
% Tax
Reported PAT
Adjusted PAT
Change (YoY %)
Avg LME Zinc (USD/T)
Avg LME Lead (USD/T)
Silver (USD/oz)
E: MOSL Estimates
January 2014
(INR Million)
1Q
157
27
79
27,477
-3.5
14,286
52.0
129
1,734
5,743
18,166
0
18,166
2,353
13.0
15,813
15,813
5.5
1,927
1,973
28
FY13
2Q
3Q
153
168
23
20
80
62
28,655
31,780
8.7
14.0
14,431
14,940
50.4
47.0
-21
75
1,746
1,772
5,398
5,063
18,104
18,156
0
0
18,104
18,156
2,706
2,031
14.9
11.2
15,398
16,125
15,398
16,125
12.9
26.1
1,885
1,946
1,974
2,198
28
31
FY14
4Q
181
32
100
39,087
24.7
21,160
54.1
108
1,219
4,118
23,951
-175
23,776
2,117
8.9
21,658
21,818
53.7
2,032
2,301
30
1Q
173
27
86
29,842
8.6
15,031
50.4
109
1,843
5,403
18,481
795
19,275
2,671
13.9
16,605
15,920
0.7
1,840
2,053
22
2Q
195
29
92
35,591
24.2
18,834
52.9
80
1,865
2,669
19,558
-612
18,946
2,544
13.4
16,403
16,932
10.0
1,859
2,101
20
3QE
196
24
77
34,349
8.1
17,682
51.5
80
1,883
4,726
20,445
0
20,445
2,862
14.0
17,582
17,582
9.0
1,897
2,105
21
4QE
217
31
88
38,571
-1.3
20,001
51.9
80
1,902
5,270
23,289
0
23,289
3,261
14.0
20,029
20,029
-8.2
1,900
2,100
21
FY13
FY14E
659
102
321
126,998
11.4
64,816
51.0
291
6,470
20,322
78,377
-175
78,201
9,206
11.8
68,995
69,149
24.4
1,948
2,112
29
781
111
343
138,353
8.9
71,548
51.7
350
7,494
18,068
81,772
0
81,772
11,337
13.9
70,435
70,435
1.9
1,874
2,090
21
C121

Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
JSP IN
934.8
245 / 4
473 / 182
1 / 18 / -51

Y/E March
Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Gr(%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV
EV/EBITDA (x)
Div. Yield (%)
2013 2014E 2015E

198.1 199.7 253.2
65.7 61.6 73.9
34.8 25.5 27.9
37.2 27.3 29.8
-14.2 -26.7
9.1
227.3 229.0 255.1
17.7 12.0 12.3
12.3
9.2
9.5
4.4
7.5
6.9
7.0
1.2
7.4
0.6
9.6
1.1
9.1
0.8
8.8
1.0
7.5
0.8
2016E
303.9
90.2
33.2
35.4
19.0
287.8
13.1
11.5
5.8
7.4
0.9
5.7
0.8
CMP: INR262
Neutral
Net sales to decline 4% YoY: We expect standalone net sales to

decrease 4% YoY (up 1% QoQ) to INR36.9b on lower sales volume.
Steel sales volume would decrease 4% YoY (down 5% QoQ) to 705,000t.
We expect pellet sales volume to decrease 33% YoY (down 35% QoQ).
Power sales are likely to remain flat YoY (up 421% QoQ) to 605m units.
We expect standalone EBITDA to decrease 7% QoQ to INR10.1b.
Jindal Power's sales volume to increase 2% QoQ: Power sales volumes
at Jindal Power are likely to increase 2% QoQ (up 21% YoY) to 2b units,
while the average rate is expected to be INR3.2/unit. PAT would grow
22% QoQ to INR3.6b.
Maintain Neutral: Valuations are not demanding though headwinds
still remain. Stock is trading at FY15E P/BV of 1x. We value the stock at
INR271 based on SOTP. Maintain Neutral.

Angul steel melt shop is expected to be lit in 2HFY14 but it will take
couple of months for production to stabilize. Coal gasification and
sponge iron unit are expected to start in 2HFY14. Also, the CPP at
Angul will be fully commissioned in FY14. There is still no clarity on
final signing of lease for the Utkal B1 coal block due to delay from the
state government side. The coal block is critical to derive profitability
from the Angul 1.6mtpa project.
2,400mw Brownfield expansion is on time and is expected to be
commissioned during 2HFY14. It has coal linkage for 1,200mw, while
remaining 1,200mw is yet to get linkage coal allotment.

Y/E March
Sales volume
Steel (000 tons)
Pellets (000 tons)
CPP (M kwh)
Jindal Power (M kwh)
Net Sales
EBITDA
As % of Net Sales
Interest
Depreciation
Other Income
PBT (after EO item)
Total Tax
% Tax
Reported PAT
Adjusted PAT
JPL PAT
Adj consol PAT
E: MOSL Estimates
January 2014
1Q
561
395
584
2,015
33,311
10,377
31.2
2,186
2,372
122
5,942
-5,741
201
76
38.1
124
4,602
3,144
9,594
(INR Million)
FY13
2Q
3Q
639
734
436
623
547
603
1,746
1,651
35,890
38,209
12,607
12,781
35.1
33.4
1,779
2,876
2,489
2,543
74
39
8,413
7,401
0
0
8,413
7,401
2,591
2,196
30.8
29.7
5,822
5,205
5,822
5,205
2,603
2,558
8,973
8,673
FY14
4Q
909
658
517
1,999
42,137
11,363
27.0
2,369
3,081
1,358
7,271
-1,000
6,271
1,496
23.9
4,774
5,774
2,822
8,602
1Q
665
551
384
2,000
34,252
10,477
30.6
2,318
3,036
63
5,185
-2,000
3,185
796
25.0
2,389
4,389
3,217
6,943
2Q
740
639
116
1,952
36,556
10,833
29.6
3,337
3,036
56
4,516
-1,000
3,516
950
27.0
2,567
3,567
3,006
5,521
3QE
705
417
605
1,996
36,854
10,109
27.4
2,755
3,226
223
4,351
0
4,351
1,218
28.0
3,133
3,133
3,675
6,728
4QE
801
517
476
2,037
39,513
10,339
26.2
3,030
3,444
1,526
5,391
0
5,391
1,510
28.0
3,882
3,882
3,765
6,350
FY13
FY14E
2,843
2,112
2,251
7,411
149,547
47,127
31.5
9,209
10,485
1,593
29,026
-6,741
22,285
6,360
28.5
15,926
21,404
11,126
34,842
2,829
3,842
1,381
7,984
147,175
41,758
28.4
11,440
12,742
1,867
19,443
-3,000
16,443
4,474
27.2
11,970
14,970
13,662
25,542
C122
JSW Steel
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
JSTL IN
241.7
243 / 4
1,010 / 452
6 / 44 / 15

Y/E March
2013 2014E 2015E 2016E
Sales
382.1 483.0 507.1
529.0
EBITDA
65.0 87.5 87.1
86.9
Adj. PAT
11.1 10.6 14.2
12.3
Adj. EPS (INR)
49.7 43.7 58.8
50.9
EPS Gr(%)
-25.3 -12.2 34.6
-13.3
BV/Sh. (INR)
764.8 672.9 718.8
756.9
RoE (%)
6.6
6.1
8.4
6.9
RoCE (%)
8.4 10.4
9.0
8.4
Payout (%)
25.9 68.8 19.2
22.0
Valuations
P/E (x)
20.3 23.1 17.1
19.8
P/BV
1.3
1.5
1.4
1.3
EV/EBITDA (x)
7.9
7.1
7.1
7.0
Div. Yield (%)
1.0
1.0
1.0
1.0
Note: JSW Ispat included in FY14 and FY15
CMP: INR1,007
Sell
Standalone (S/A) revenue to increase 32% YoY: We expect standalone

net sales to increase 32% YoY to INR109b due to 35% increase in
volumes on account of merger with JSW Ispat. Average steel realization
would fall 3% YoY (up 1% QoQ) to INR37,194/ton.
S/A EBITDA to increase 58% YoY: We expect JSTL's EBITDA to increase
58% YoY to INR20.8b. We expect EBITDA/ton to decrease 1% QoQ to
USD114. Gains due to higher realization will be offset by higher iron
ore fines prices. NMDC's e-auction data for Karnataka suggests
significant jump in premiums over floor prices for fines.
Maintain Sell: JSTL has been able to sustain margins despite weak
demand scenario. It has so far benefited from lower fines prices in
the Karnataka region. However, iron ore fines prices have started to
increase due to constraint supply. This will exert pressure on margins.
The stock trades at an expensive 17.1x FY15E EPS and EV of 7.1x FY15E
EBITDA. Maintain Sell.

Given that availability of iron ore remains critical in Karnataka, JSTL's
FY14 and FY15 production guidance will be the key figures to watch
out. It is targeting to produce 11.55mt of saleable steel and 12mt of
crude steel in FY14.
Company is investing ~INR22b in the 55mw WHRB, railway siding,
lime calcinations, 1mtpa coke oven plant and 4mtpa pellet plant for
its Dolvi units. Turnaround of profitability of Dolvi units due to plant
level integrations could provide upside to our estimates.

FY13
1Q
2Q
3Q
Sales ('000 tons)
2,109
2,170
2,170
Realization (INR per ton)
42,853
40,880
38,214
Net Sales
90,376
88,709
82,924
EBITDA
17,728
15,252
13,136
As % of Net Sales
19.6
17.2
15.8
EBITDA (INR per ton)
8,406
7,028
6,053
EBITDA (USD per ton)
155
127
112
Interest
4,067
4,208
4,546
Depreciation
4,678
4,812
4,975
Other Income
723
783
566
PBT (before EO Item)
9,706
7,015
4,181
EO Items
-5,921
4,224
-3,274
PBT (after EO Item)
3,786
11,239
907
Total Tax
1,096
3,016
-460
% Tax
28.9
26.8
-50.7
Reported PAT
2,690
8,223
1,367
Preference Dividend
70
70
70
Adjusted PAT
6,912
4,976
2,938
Consolidated adj PAT
4,091
2,468
586
E: MOSL Estimates; Note: JSW Ispat is excluded until 4QFY13
(INR Million)
Y/E March
January 2014
FY14
4Q
2,430
38,234
92,909
16,973
18.3
6,985
129
4,425
5,274
537
7,811
1,299
9,110
3,377
37.1
5,732
70
5,549
3,136
1Q
2,550
36,699
93,582
17,491
18.7
6,859
122
6,418
6,439
723
5,357
-8,529
-3,173
-965
30.4
-2,208
70
4,290
1,596
2Q
3,130
36,695
114,857
22,340
19.4
7,137
115
6,890
6,852
1,208
9,806
-8,394
1,412
400
28.3
1,013
70
7,911
3,305
3QE
2,933
37,194
109,072
20,808
19.1
7,096
114
6,959
6,989
1,220
8,080
0
8,080
1,616
20.0
6,464
70
6,507
2,633
4QE
2,933
37,504
109,981
21,938
19.9
7,481
121
7,028
7,129
1,232
9,013
0
9,013
1,803
20.0
7,210
70
7,266
3,019
FY13
FY14E
8,879
39,973
354,918
63,088
17.8
7,105
130
17,245
19,739
2,609
28,713
-3,672
25,041
7,029
28.1
18,012
279
20,374
10,280
11,545
37,028
427,492
82,576
19.3
7,153
118
27,294
27,409
4,383
32,256
-16,923
15,333
2,853
18.6
12,479
279
25,974
10,553
C123
Nalco
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
NACL IN
2,577.2
98 / 2
52 / 24
0 / 21 / -34

Y/E March
Sales
EBITDA
NP
Adj. EPS (INR)
EPS Gr(%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV
EV/EBITDA (x)
Div. Yield (%)
2013 2014E 2015E

69.2 68.0 78.7
9.1 11.1 11.6
5.9
7.9
8.2
2.3
3.1
3.2
-31.5 33.5
3.5
46.3 47.9 49.6
5.0
6.5
6.5
7.2
8.7
8.9
63.6 47.6 46.0
16.5
0.8
5.3
3.3
12.4
0.8
4.0
3.3
2016E
81.6
13.2
9.3
3.6
14.1
51.8
7.2
9.8
40.3
11.9
0.8
3.2
3.3
10.5
0.7
2.4
3.3
CMP: INR38
Buy
Net sales to decrease 5% QoQ on lower sales: We expect net sales to

decrease 5% QoQ (down 2% YoY) to INR16.6b due to lower alumina
volumes. Aluminum sales volume is likely to increase 7% QoQ to 80kt.
Aluminum realization is expected to decrease 3% QoQ, while alumina
realization is expected to decrease 2% QoQ to INR19,205/t.
EBITDA to increase 7% QoQ: We expect EBITDA to increase 7% QoQ to
INR2.9b due to better availability of linkage coal, compared to last
quarter.
Power cost to remain high till Utkal coal block commissioning; maintain
Buy: NACL has a strong balance sheet, with cash surplus of ~INR50b,
post capex. Potential upsides from the Utkal e-block, further expansion
of the alumina refinery, weakening INR and peaking of labor cost as
older employees retire over the next three to five years are long term
positives. Maintain Buy.

Utkal coal block remains the key to company's future profitability. It
has received stage I forest clearance so far.
Progress on Panchpatmali bauxite mining lease renewal. Currently,
it is operating through temporary one year permit.
Status of investment in NPCIL JV. It will be investing INR8.95b for a
26% stake in the venture.
Aluminum production has been affected due constraint in supply of
linkage coal from MCL and lower LME prices. Nalco is operating at 2530% lower capacity and the trend is likely to continue due to weak
LME and lower linkage coal supply.

Y/E March
Aluminium Sales ('000 tons)
Alumina Sales ('000 tons)
Avg LME Aluminium (USD/ton)
Alumina Exports (USD/ton)
Net Sales
Change (YoY %)
Total Expenditure
EBITDA
As % of Net Sales
Interest
Depreciation
Other Income
PBT
Total Tax
% Tax
Reported PAT
Adjusted PAT
E: MOSL Esitmates
January 2014
1Q
102
253
1,978
343
17,481
-0.8
14,439
3,042
17.4
32
1,224
1,403
3,190
959
30.1
2,231
2,231
(INR Million)
FY13
2Q
3Q
101
102
190
220
1,918
1,997
323
328
16,083
16,928
-0.3
16.7
16,100
15,102
-16
1,827
-0.1
10.8
41
2
1,239
1,231
1,391
1,127
95
1,720
47
531
49.5
30.9
48
1,189
48
1,189
FY14
4Q
98
320
2,008
341
18,673
4.6
14,456
4,216
22.6
0
1,361
1,190
4,046
1,585
39.2
2,460
2,460
1Q
85
283
1,834
325
15,606
-10.7
14,076
1,530
9.8
0
1,245
1,787
2,072
476
23.0
1,597
1,597
2Q
75
374
1,780
316
17,382
8.1
14,706
2,677
15.4
0
1,286
1,228
2,619
827
31.6
1,792
1,792
3QE
80
336
1,770
310
16,579
-2.1
13,714
2,865
17.3
0
1,292
1,138
2,711
868
32.0
1,843
1,843
4QE
83
354
1,900
323
18,406
-1.4
14,363
4,043
22.0
0
1,299
1,202
3,946
1,263
32.0
2,683
2,683
FY13
FY14E
403
983
1,975
334
69,165
4.6
60,096
9,069
13.1
75
5,054
5,111
9,050
3,122
34.5
5,928
5,928
323
1,348
1,821
318
67,973
-1.7
56,859
11,114
16.4
0
5,121
5,355
11,348
3,433
30.3
7,915
7,915
C124
NMDC
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
NMDC IN
3,964.7
563 / 9
172 / 93
10 / 28 / -21

Y/E March
Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Gr(%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV
EV/EBITDA (x)
Div. Yield (%)
2013 2014E 2015E

107.0 116.9 127.7
77.8 74.5 81.4
66.3 63.2 68.8
16.7 15.9 17.4
-9.2
-4.6
8.9
69.4 77.1 86.3
26.8 22.3 20.4
26.7 22.2 20.3
51.1 51.4 47.2
8.5
2.0
4.5
4.9
8.9
1.8
4.7
4.9
2016E
131.4
83.2
70.4
17.8
2.3
95.9
19.3
19.2
46.1
8.2
1.6
4.2
4.9
8.0
1.5
4.0
4.9
CMP: INR142
Buy
Iron ore sales to increase 41% YoY: We expect standalone net sales to
increase 41% YoY (up 17% QoQ) to INR30b due to higher realization
and sales volume. We expect iron ores sales volume to increase 39%
YoY (up 14% QoQ) to 7.4mt. NMDC has achieved iron ore sales of 4.8mt
in the first two months of the quarter. Iron ore realization is likely to
increase 6% QoQ to INR3,487/ton due to price hikes taken by NMDC in
October and December. Lumps percentage is expected to be 36% in
3QFY14.
EBITDA to increase 23% QoQ: We expect EBITDA to increase 23% QoQ
to INR18.4b due to higher realization and volumes.
Sales volume to post CAGR of 10% over FY13-15E: We continue to
believe that iron ore supply is getting tighter in India, which will
improve the pricing power for iron ore fines. We expect NMDC to
deliver ~10% CAGR in volumes during FY13-15E. NMDC trades at 1.6x
FY15E BV and at an EV of 4.2x FY15E EBITDA. Valuation attractive. Buy.

NMDC's internal target of iron ore sales volumes at 30-32mt is higher
than our estimates of 29.6m ton for FY14.

Y/E March
Production (m tons)
Sales (m tons)
Avg Iron ore realization (USD/t)
Avg Iron ore realization (INR/t)
Lumps % (production)
Net Sales
Change (QoQ %)
Change (YoY %)
Total Expenditure
EBITDA
Change (QoQ %)
Change (YoY %)
As % of Net Sales
EBITDA per ton (USD)
Interest
Depreciation
Other Income
PBT (before EO Item)
PBT (after EO Item)
Total Tax
% Tax
Reported PAT
Adjusted PAT
Change (QoQ %)
Change (YoY %)
E: MOSL Esitmates
January 2014
(INR Million)
1Q
6.9
6.9
76
4,102
37
28,404
9.5
2.1
5,383
23,020
16.4
2.1
81.0
62
0
328
5,521
28,214
FY13
2Q
3Q
5.4
5.4
5.9
5.3
80
70
4,130
3,630
39
36
26,120
20,477
-8.0
-21.6
-14.7
-27.4
6,771
6,564
19,349
13,913
-15.9
-28.1
-20.6
-38.5
74.1
67.9
60
48
0
0
332
339
5,831
5,563
24,848
19,137
28,214
9,154
32.4
19,060
19,060
13.7
5.8
24,848
8,062
32.4
16,786
16,786
-11.9
-14.5
19,137
6,209
32.4
12,928
12,928
-23.0
-30.5
FY14
4Q
9.6
8.2
71
3,680
34
32,043
56.5
23.5
10,487
21,556
54.9
9.0
67.3
48
132
387
5,474
26,511
-4,058
22,453
7,804
34.8
14,650
17,297
33.8
3.2
1Q
6.9
7.3
70
3,735
37
28,706
-10.4
1.1
9,654
19,052
-11.6
-17.2
66.4
47
0
364
5,209
23,897
2Q
5.9
6.5
61
3,290
34
24,799
-13.6
-5.1
9,863
14,936
-21.6
-22.8
60.2
37
0
348
5,384
19,972
3QE
7.2
7.4
63
3,487
36
28,966
16.8
41.5
10,574
18,391
23.1
32.2
63.5
40
0
357
5,241
23,275
4QE
8.5
8.5
66
3,703
36
34,423
18.8
7.4
12,313
22,109
20.2
2.6
64.2
42
0
366
5,426
27,170
23,897
8,176
34.2
15,722
15,722
-9.1
-17.5
19,972
6,788
34.0
13,184
13,184
-16.1
-21.5
23,275
7,448
32.0
15,827
15,827
20.1
22.4
27,170
8,694
32.0
18,476
18,476
16.7
6.8
FY13
FY14E
27.2
26.3
75
3,880
36
107,043
28.5
29.6
65
3,566
36
116,894
11.6
9.2
42,405
74,488
10.1
-4.3
63.7
42
0
1,434
21,260
94,315
0
94,315
31,106
33.0
63,208
63,208
11.5
-4.6
-4.9
29,205
77,838
-12.8
72.7
54
0
1,385
22,389
98,841
-4,058
94,783
31,228
32.9
63,556
66,277
-9.2
C125
Sesa Sterlite
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
SSLT IN
2,964.8
597 / 10
209 / 119
12 / 33 / -5
CMP: INR201
Net sales to increase 9% QoQ: We expect consolidated net sales to

increase 9% QoQ due to higher sales volume in copper and power
business.
EBITDA to decrease 3% QoQ: We expect consolidated EBITDA to

decrease 3% QoQ to INR67.2 due to lower volumes in zinc/lead
segment. Depreciation is expected to be higher by 9% QoQ to
INR22.4b. Adj PAT is likely to decrease 7% QoQ to INR13.1b.
Maintain Neutral: Assuming LME price of USD2,000/ton for aluminum,

USD1,900/ton for zinc and USD2,100/ton for lead in FY15E, our SOTPbased valuation works out to INR235/share. Maintain Neutral.

Y/E March
2013 2014E 2015E 2016E
Sales
721.6 720.5 829.4
909.6
EBITDA (attrib.) 174.9 176.2 208.6
231.6
NP
61.7 56.3 71.7
74.7
Adj. EPS (INR)
20.8 19.0 24.2
25.2
EPS Gr(%)
-32.9 -19.8 16.3
32.7
BV/Sh. (INR)
87.7 122.2 152.0
169.8
RoE (%)
9.5
7.8
9.0
8.9
RoCE (%)
14.0 11.1 11.7
12.1
Payout (%)
19.7 21.6 16.9
20.9
Valuations
P/E (x)
9.7 10.6
8.3
8.0
P/BV
0.9
0.8
0.7
0.7
EV/EBITDA (x)*
5.8
5.8
4.6
3.9
Div. Yield (%)
1.7
1.7
1.7
2.2
Note: Sesa-Sterlite merged entity basis;
* attributable
Neutral

It is widely believed that the Indian government needs to urgently
divest in HZ and Balco so that the much-needed monies can be raised
to partially bridge the fiscal deficit and meet divestment targets. We
believe delisting HZ and merging it with Sesa-Sterlite is perhaps the
best option for capital efficiency - HZ's cash will become fungible and
available for servicing CAIR's acquisition debt.

Y/E March
1Q
184,639
(INR Million)
FY13
2Q
3Q
177,909 170,751
FY14
4Q
188,339
Net Sales
Change (YoY %)
Total Expenditure
116,632 115,688 112,297 120,889
EBITDA
68,007
62,221
58,454
67,450
As % of Net Sales
36.8
35.0
34.2
35.8
Interest
9,761
25,310
15,554
19,391
D&A
12,294
12,403
12,919
16,264
Other Income
5,443
8,613
9,924
5,462
51,395
33,120
39,904
37,257
-1,644
2,756
-1,106
-2,094
PBT (after EO item)
49,751
35,877
38,798
35,163
Total Tax
4,309
4,694
4,074
4,262
% Tax
8.7
13.1
10.5
12.1
Reported PAT
45,442
31,183
34,725
30,901
Minority interest
21,933
15,786
19,327
19,216
Adjusted PAT
25,153
12,641
16,503
13,779
Change (YoY %)
E: MOSL Estimates; Please note that these consolidated numbers for
January 2014
FY13
FY14E
1Q
2Q
3QE
4QE
143,610 180,260 195,686 200,955 717,800 720,511
-22.2
1.3
14.6
6.7
0.4
88,820 110,710 128,503 131,055 465,480 459,088
54,790
69,550
67,183
69,901 252,320 261,423
38.2
38.6
34.3
34.8
35.2
36.3
15,710
14,730
15,278
15,258
46,640
60,976
18,870
20,520
22,390
24,240
75,680
86,020
6,680
4,870
6,911
7,784
29,530
26,245
26,890
39,170
36,425
38,187 159,530 140,672
0
1,730
-405
-405
150
920
26,890
40,900
36,020
37,782 159,680 141,592
3,100
5,010
4,595
-6,320
10,240
6,386
11.5
12.2
12.8
-16.7
6.4
4.5
23,790
35,890
31,424
44,102 146,250 135,206
17,790
20,140
18,770
21,281
73,730
77,981
6,000
14,020
13,060
23,225
72,520
56,305
-76.1
10.9
-20.9
68.6
-22.4
previous quarters are based on proforma estimates.
C126
Steel Authority of India

Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
SAIL IN
4,130.4
296 / 5
102 / 38
3 / 36 / -29

Y/E March
Sales
EBITDA
NP
Adj. EPS (INR)
EPS Gr(%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV
EV/EBITDA (x)
Div. Yield (%)
2013 2014E 2015E

450.9 468.7 502.7
51.2 54.1 68.0
24.8 27.5 27.9
6.0
6.7
6.8
-34.1 10.6
1.5
100.8 107.0 112.6
6.1
6.4
6.2
7.2
6.0
6.0
41.5 27.5 17.3
11.9
0.7
9.4
2.8
10.8
0.7
9.6
2.8
10.6
0.6
8.4
1.4
2016E
570.3
81.1
27.7
6.7
-0.7
118.1
5.8
6.0
17.5
10.7
0.6
7.7
1.4
CMP: INR72
Sell
Net sales to increase 5% YoY due to higher volumes: We expect net

sales to increase 5% YoY (down 3% QoQ) to INR112b due to higher
sales volumes. SAIL has already achieved 1.8mt of sales in the first
two months of 3QFY14. We expect sales volumes to increase 5% YoY to
2.9mt. Realization is expected to remain flat YoY (up 1% QoQ) to
INR38,750/ton.
Margins to improve 43% QoQ to USD69/ton: We expect EBITDA/ton to
increase 43% QoQ to USD69/ton due to higher realization and absence
of excessive provisioning done in 2QFY14.
INR720b capex benefits to accrue slowly; maintain Sell: We expect
earnings to post 6% CAGR over FY13-15E, despite 8% CAGR in volumes,
due to SAIL's uncompetitive cost structure, execution delays, weak
domestic steel scenario and poor operating efficiencies. Full benefits
of the INR720b capex will accrue gradually due to poor execution. The
stock still appears expensive at 10.6x FY15E EPS and an EV of 8.4x
FY15E EBITDA. Maintain Sell.

BOF commissioning at ISP and RSP will be critical for volume ramp-up
in FY14 and FY15.

Y/E March
Sales (m tons)
Change (YoY %)
Realization (INR per ton)
Change (YoY %)
Net Sales
Change (%)
EBITDA
Change (YoY %)
EBITDA per ton (INR)
EBITDA per ton (USD)
Interest
Depreciation
Other Income
PBT (after EO Inc.)
Total Tax
% Tax
Reported PAT
Adjusted PAT
Change (YoY %)
E: MOSL Estimates
January 2014
1Q
2.5
-9.1
43,110
5.9
107,775
-3.7
15,153
15.5
6,061
112
1,249
4,018
2,785
10,101
3,137
31.1
6,964
8,485
1.2
(INR Million)
FY13
2Q
3Q
2.6
2.8
-8.2
5.8
41,362
38,800
5.3
-8.7
108,202 106,701
-3.4
-3.4
11,093
11,384
-16.4
-28.0
4,241
4,140
77
76
1,862
2,220
4,026
4,049
2,255
2,209
7,879
7,016
2,448
2,173
31.1
31.0
5,431
4,843
4,996
4,904
-50.2
-55.4
FY14
4Q
3.2
38,533
-9.9
123,304
-9.9
9,039
-51.7
2,825
52
2,145
1,838
2,178
7,398
2,944
39.8
4,454
4,844
-43.2
1Q
2.6
4.8
39,190
-9.1
102,679
-4.7
9,673
-36.2
3,692
66
1,918
3,929
2,262
5,209
700
13.4
4,509
5,270
-37.9
2Q
3.0
15.3
38,260
-7.5
115,355
6.6
8,669
-21.9
2,875
46
2,165
3,988
1,527
13,924
2,121
15.2
11,804
3,427
-31.4
3QE
2.9
5.5
38,750
-0.1
112,375
5.3
12,417
9.1
4,282
69
2,265
4,350
1,561
7,363
957
13.0
6,405
6,405
30.6
4QE
3.5
7.8
39,060
1.4
134,757
9.3
19,245
112.9
5,578
90
2,510
4,652
1,498
13,581
1,766
13.0
11,816
11,816
143.9
FY13
FY14E
11.1
-2.9
40,302
-2.5
445,983
-5.4
46,669
-23.4
4,217
77
7,476
13,932
9,426
32,394
10,701
33.0
21,693
23,228
-37.5
12.0
8.3
38,812
-3.7
465,166
4.3
50,003
7.1
4,172
69
8,858
16,919
6,848
40,077
5,543
13.8
34,534
26,777
15.3
C127
Tata Steel
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
TATA IN
971.4
412 / 7
448 / 195
4 / 48 / -11

Y/E March
Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Gr(%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV
EV/EBITDA (x)
Div. Yield (%)
2013
1,347
123.2
1.5
1.6
-91.6
217.3
0.7
6.6
-12.3
2014E
1,425
164.4
39.3
40.4
2,476
240.6
17.7
9.4
21.6
2015E
1,467
181.7
45.7
47.0
16.4
281.2
18.0
10.1
18.6
2016E
1,491
196.0
58.1
59.8
27.1
333.5
19.5
10.7
16.7
270.2
2.0
8.2
1.9
10.5
1.8
6.8
1.9
9.0
1.5
6.2
1.9
7.1
1.3
5.7
2.1
CMP: INR424
Sell
Tata Steel India (TSI): We expect net revenue to increase 7% YoY (up
1% QoQ) to INR100b due to higher sales volume. Steel volumes are
expected to increase 9% YoY (up 1% QoQ) to 2.1mt. Realization is
expected to decline 1% YoY (up 1% QoQ). We expect EBITDA to increase
11% QoQ to INR33b and EBITDA/ton to increase 12% QoQ to USD239/
ton due to higher realization and some gains on costs.
TSE and others: We expect Tata Steel Europe (TSE) and other
subsidiaries to report EBITDA/ton of USD34 due to slightly higher
prices. We expect steel shipments to increase 10% YoY (down 2% QoQ)
to 4.3mt.
Indian steel demand still subdued; early green shoots in Europe;
maintain Sell: We expect domestic steel environment to remain
challenging due to weak demand scenario and increasing capacity in
India. On the other hand, there are early green shoots on European
demand recovery. However, business environment still remains
challenging in the region. The stock trades at 9x FY15E EPS and an EV of
6.2x FY15E EBITDA. Maintain Sell.

Funding of TSE modernization and upgradation program as TSE's cash
flows are insufficient to support its capex.

Y/E March
1Q
1,590
-0.2
51,530
89,080
29,768
33.4
17,419
321
4,544
3,544
1,519
23,199
-1,970
21,229
7,663
36.1
13,566
15,536
(INR Million)
FY13
2Q
3Q
1,730
1,887
5.0
16.3
48,459
45,387
91,506
93,703
25,162
25,262
27.5
27.0
13,327
12,360
241
228
4,539
5,090
3,913
4,339
2,397
357
19,107
16,190
96
19,203
16,190
5,695
5,726
29.7
35.4
13,508
10,464
13,412
10,464
4Q
2,279
28.9
44,394
107,705
33,040
30.7
14,061
259
4,594
4,608
4,747
28,586
-6,841
21,744
8,652
39.8
13,092
19,933
1Q
2,005
26.1
44,719
94,554
28,343
30.0
13,493
241
4,664
4,596
1,442
20,525
2Q
2,038
17.8
44,742
99,210
29,379
29.6
13,284
214
4,366
5,510
3,257
22,760
3QE
2,050
8.6
44,980
100,496
32,541
32.4
14,791
239
4,497
4,642
359
23,761
4QE
2,170
-4.8
44,980
104,019
32,436
31.2
14,144
228
4,632
4,688
4,771
27,887
20,525
6,964
33.9
13,561
13,561
22,760
7,173
31.5
15,587
15,587
23,761
7,841
33.0
15,920
15,920
27,887
9,203
33.0
18,684
18,684
321,071
22,389
-7,886
-7,433
3,020
-26
346,505
43,689
-66,775
8,843
3,420
33
328,048
36,880
11,423
11,213
3,140
44
366,449
37,054
9,510
9,168
3,460
26
361,732
41,778
8,311
8,001
3,417
38
Steel Sales ('000 tons)

Change (YoY %)
Avg Seg.Realn. (INR/tss)
Net Sales
EBITDA
(% of Net Sales)
Steel EBITDA(INR/tss)
Steel EBITDA(USD/tss)
Interest
Depreciation
Other Income
PBT (before EO Inc.)
EO Income(exp)
PBT (after EO Inc.)
Total Tax
% Tax
Reported PAT
Adjusted PAT
Consolidated Financials
Net Sales
338,212 341,327
EBITDA
36,003
23,101
Reported PAT
5,170
-4,133
Adj. PAT (after MI & asso)
7,949
-4,066
TSE Sales (000 tons)
3,210
3,420
TSE EBITDA(USD/tss)
36
-2
E: MOSL Estimates; tss=ton of steel sales
January 2014
FY14
FY13
FY14E
7,486
12.9
47,099
381,994
113,232
29.6
14,314
263
18,768
16,404
9,020
87,081
-8,715
78,366
27,736
35.4
50,630
59,345
8,263
10.4
44,858
398,279
122,699
30.8
14,060
232
18,159
19,436
9,829
94,933
94,933
31,181
32.8
63,752
63,752
368,817 1,347,115 1,425,046

48,691 123,212 164,403
13,005 -73,624
42,071
12,673
3,323
41,054
3,488
13,070
13,505
65
11
43
C128
December 2013 Results Preview | Sector: Oil & Gas
Oil & Gas

Companies Covered
BPCL
Cairn India
GAIL
HPCL
IOC
Indraprastha Gas
MRPL
Oil India
ONGC
Petronet LNG
Reliance Industries
Singapore GRMs down 20% QoQ to USD4.3/bbl in 3QFY14, crude flattish QoQ: Refinery
margins would be under pressure, with seasonally weak Reuters Singapore GRMs
declining 20% QoQ to USD4.3/bbl, primarily driven by lower gasoline cracks. Increase
in Arab L-H differential would improve RILs premium over Singapore GRMs (estimated
at USD3.2/bbl for 3QFY14) though. Crude prices were flat QoQ in 3QFY14 (Brent average
at USD109/bbl; flat YoY and QoQ), led by easing of geo-political concerns in Iran. INR/
USD averaged at 62, up 14% YoY and flat QoQ.
Except for PE, petchem spreads down QoQ: Except for PE (simple spread over naphtha
improved 3.8% QoQ), petchem spreads declined 3-13% QoQ. However, led by higher
international prices and steep INR depreciation, the domestic premium to international
prices reduced significantly in 3QFY14, except for PVC.
QoQ increase in under-recoveries primarily due to higher losses on LPG: We estimate
14% QoQ increase in under-recoveries to INR406b, led by increase in per unit LPG
losses. We model upstream sharing similar to 2QFY14 (subsidy at USD56/bbl) and expect
the government to compensate ~INR200b in 3QFY14. However, on the back of higher
retail selling price for diesel and capping of LPG cylinders, the YoY demand growth
softened (-1% YTD for diesel; +2% YTD for LPG) and provided some respite to ballooning
under-recoveries. We model upstream sharing at INR686/650/551b and downstream
sharing at nil/nil/INR46b for FY14/FY15/FY16, with the rest shared by the government.
Valuation and view: Given the expected diesel deregulation in 12-18 months, and
notification of gas price hike in the coming weeks, we prefer ONGC/OINL in upstream
(significant earnings growth opportunity) and BPCL among the OMCs (strong balance
sheet and E&P potential). We maintain Neutral on GAIL due to headwinds for gas
availability. However, we believe PLNG is available at attractive valuations, given its
medium-term earnings potential. We maintain Buy on Cairn India for its attractive
valuations. We reiterate Neutral on RIL, as the next earnings growth is still some time
away when its new core business/E&P projects commission from FY16/FY17. Key
things to watch for: RIL update on key projects and Cairn Indias ramp-up/exploration.

CMP Rat ing
(INR)
27.12.13
BPCL
352
Cairn India
324
GAIL
341
60
HPCL
239
IOC
213
Indraprastha Gas
267
MRPL
42
Oil India
484
ONGC
292
Petronet LNG
122
Reliance Inds.
879
Sector Aggregate
Excl. RMs
Sales
Dec.13
Buy
608,136
Buy
49,049
Neutral
150,337
Neutral
2,766
Buy
575,297
Buy
1,300,404
Neutral
10,674
Neutral
192,772
Buy
26,242
Buy
221,055
Buy
108,490
Neutral 1,018,710
4,263,931
1,780,094
Var.
% YoY
-2.4
14.7
20.5
6.2
9.1
12.8
22.8
7.1
8.7
5.3
28.8
8.5
8.8
10.2
EBITDA
Var. Dec.13
% QoQ
-1.5
847
5.5 37,526
7.8 21,469
-0.1
2,487
10.9
1,812
18.4 12,610
5.8
2,040
2.7
4,112
-3.3 12,205
-0.9 116,566
14.3
3,804
-1.8 73,215
6.5 288,694
0.6 273,425
Var.
% YoY
-96.3
14.2
8.9
6.4
-53.3
-75.4
9.0
131.9
8.5
3.7
-28.1
-12.6
-17.3
0.8
(INR Million)
Net Profit
Var. Dec.13
% QoQ
-95.0 -3,873
6.2 29,369
52.8 12,367
-0.8
1,152
-82.1 -5,076
-59.6 -1,310
1.9
951
-43.7
1,413
-8.1
9,431
-2.9 57,675
4.5
1,484
-6.7 52,029
-13.8 155,612
-1.2 165,871
Var.
% YoY
PL
-6.9
-3.7
-3.2
PL
PL
10.1
LP
0.3
3.7
-53.4
-5.4
-28.4
-0.1
Var.
% QoQ
PL
-13.2
35.1
1.0
PL
PL
2.5
-40.1
4.4
-4.9
-18.4
-5.2
-23.4
-4.6
Harshad Borawake (HarshadBorawake@MotilalOswal.com)/Kunal Gupta(Kunal.Gupta@MotilalOswal.com)

January 2014
C129
GRMs down 20% QoQ; crude flat QoQ, Arab L-H spread increases QoQ
Crude price was flat QoQ at USD109/bbl (USD/bbl)
Brent-WTI spread widened QoQ to USD12/bbl in 3QFY14 (USD/bbl)
Brent cru de (month ly a ve rage )

Brent cru de (q uarterl y avera ge)
10
150
120
-10
90
-20
60
-30
30
-40
De c-07 Dec-08 De c-09 Dec-10 Dec-11 Dec-12 Dec-13
Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13
Singapore GRM down 20% QoQ to USD4.3/bbl in 3QFY14 (USD/bbl) Gasoline cracks declined meaningfully during 3QFY14 (USD/bbl)
Si nga pore GRM (Mon thl y Avg)
Si nga pore GRM (Qtr Avg)
3QFY13
4QFY13
1QFY14
35
12
18.5
-5
3QFY14
16.9
5.8
15
2QFY14
(3.4)
(9.9)
-25
(25.0)
Fuel Oil
Jet/Kero
Di esel
Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13
LPG
Naphtha
Gasoline
-45
Arab L-H differential higher QoQ in 3QFY14 (USD/bbl)

Arab L-H (month l y average)
Arab L-H (quarterl y a ve rage )
12
Our key assumptions

Our crude price assumption for FY14/15/16 is USD108.5/105/
105/bbl and USD100/bbl o ver long term.
9
6
We expect regional benchmark Singapore Reuters GRM

to remain in the USD7-9/bbl range for the near term.
We model Sing apore GRM at USD5.6/bbl in FY14.
3
2.6
0
De c-07 De c-08 Dec-09 Dec-10 Dec-11 De c-12 Dec-13
Source: Reuters, Bloomberg, MOSL
January 2014
3QFY14
2QFY14
1QFY14
40
4QFY13
PSF
3QFY13
20
3QFY14
46
2QFY14
5
1QFY14
30
4QFY13
52
3QFY13
10
2QFY13
40
1QFY13
58
4QFY12
15
3QFY12
50
2QFY12
64
2QFY13
POY
20
1QFY13
PV C
4QFY12
PP
3QFY12
PE
60
POY/PSF spreads also improved QoQ (INR/kg)
2QFY12
Polymer spreads increased QoQ in 2QFY14 (INR/kg)
C130
Petchem margins declined QoQ in 3QFY14 (INR/kg)

(RIL Basic prices - INR/kg)
PP
PVC
POY
PE
80.3
83.4
91.9
91.2
89.4
93.0
92.5
104.4
107.6
3.1
20.4
84.0
84.1
92.1
91.9
92.2
97.9
95.9
109.7
109.8
0.1
19.2

Sense x Inde x
MOSL Oil & Gas Inde x
Dec13
Nov13

Sensex Index
MOSL Oi l & Gas Index
120
110
100
Dec13
Sep13
Jun13
Mar13
Dec12
90
91.2
91.7
92.4
93.8
94.0
97.3
95.0
107.2
103.4
-3.6
10.0
34.7
31.4
43.3
40.3
37.9
40.6
44.3
46.6
48.4
3.8
27.6
Int.Spreads
POY
PSF
PVC
38.5
32.1
43.5
41.0
40.7
45.4
47.7
51.9
50.6
-2.5
24.2
7.9
55.2
61.1
4.2
50.5
55.2
13.3
54.0
57.4
12.6
53.3
55.7
10.6
53.2
57.5
11.1
55.8
59.9
15.2
56.9
58.1
15.0
61.4
62.1
13.1
56.3
58.9
-13.0
-8.3
-5.2
23.8
5.8
2.4
Source: Bloomberg/MOSL
3QFY14 under-recoveries up 14% QoQ to INR406b; we model upstream share at INR686/650/

551b in FY14/15/16
(INR b)
FY13 1QFY14 2QFY14 3QFY14E 4QFY14E
Fx Rate (INR/USD)
54.5
55.9
Brent (USD/bbl)
111
103
Product Sales (mmt)
104
25
Product-wise Gross Under recoveries (INR b)
Auto Fuels
915
105
Domestic Fuels
696
149
Total
1,610
254
Sharing of Gross Under recoveries (INR b)
Government
1,000
80
Upstream
600
153
OMC's
10
21
Total
1,610
254
Sharing of Gross Under recoveries (%)
Government
62
31
Upstream
37
60
OMC's
1
8
Total
100
100
Petrol and diesel price difference (INR/liter)

Retai l p ri ce s
(INR/l tr)
85
97.1
96.4
95.8
96.2
98.3
101.4
96.3
107.9
106.0
-1.8
7.9
Simple Spreads
PP
Petrol
FY14E
FY15E
FY16E
62.5
111
24
62.0
109
26
62.0
111
25
60.6
109
100
61.0
105
114
60.0
105
120
187
168
355
204
202
406
177
191
368
673
710
1,383
354
697
1,051
234
685
918
178
167
10
355
203
162
41
406
236
204
(72)
368
697
686
0
1,383
401
650
0
1,051
321
551
46
918
50
47
3
100
50
40
10
100
64
55
(19)
100
50
38
50
62
0
0
100
100
Source: Bloomberg,
Diesel under-recoveries averaged INR10.1/liter for 3QFY14

Di e sel under recovery (INR/l tr)
Di ese l
25
20
70
20.4
17.1
14.5
15
55
10.5
10
Jul13
Apr13
Feb13
Nov12
Jun12
Sep12
Apr12
3.8
Jan12
3QFY10
2QFY09
Dec-13
Dec-12
Dec-11
Dec-10
Dec-09
Dec-08
Dec-07
Dec-06
Dec-05
(5)
Dec-04
10
1QFY08
25
Nov11
5.1
4QFY11
40
Dec-03
35
60
5
100
MOSL
Dec13
Sep13
Oct13
115
110
105
100
95
53.5
56.2
61.8
63.5
62.0
63.5
63.3
72.8
72.3
-0.7
16.7
PE
Sep13
3QFY12
4QFY12
1QFY13
2QFY13
3QFY13
4QFY13
1QFY14
2QFY14
3QFY14
QoQ (%)
YoY (%)
PSF
Source: Compan y, MOSL

January 2014
C131
ONGC's net realization estimated at USD45/bbl
109.2
FY11
FY12
FY13
3QE
2Q
1Q
4Q
3Q
2Q
1Q
4Q
3Q
2Q
1Q
4Q
3Q
109.0
FY14
2Q
1Q
1Q
40
4Q
Ga s - Tra ns mi ss ion (mms cmd)

116 115 120 120 117 119 119 116 110
106 105 99 99
95 96
64
51
3Q
45
48
2Q
3QE
47
1Q
FY13
64
47
4Q
FY12
45
44
3Q
FY11
2Q
102.9
45 67
2Q
63
114.0
83
1Q
63
110.2
48
4Q
62
109.9
39
3Q
63
109.9
63 17
24
70
65
63
121.6
Gross Rea li za tion
2Q
33
77
111.5
115.9
121.3
Subs idy Burden
73
108.9
79.2
89.1
80.8
1Q 48 33
Net Rea li za tion
GAIL transmission volumes under pressure (mmscmd)
FY14
Expect RIL premium to Singapore GRM at USD3.2/bbl

Premi um/ (dis count)
Si nga pore GRM
Cairn's Rajasthan production likely to average 185kbpd

RIL
Ra jas tha n Gros s Prodn (kbpd)

185
167 172 170 169 173 175
20
14
116 125 118 125 125 125
138
45
2
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3QE
FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14
FY11
FY12
FY13
FY14
CMP (INR)
27.12.13
Oil & Gas
BPCL
Cairn India
Chennai Petroleum
GAIL
Guj. State Petronet
HPCL
Indraprastha Gas
IOC
MRPL
Oil India
ONGC
Petronet LNG
Reliance Inds.
Sector Aggregate
Ex RMS
January 2014
352
324
68
341
60
239
267
213
42
484
292
122
879
Rating
Buy
Buy
Buy
Neutral
Neutral
Buy
Neutral
Buy
Neutral
Buy
Buy
Buy
Neutral
EPS (INR)
FY13 FY14E FY15E
26.0
63.1
-118.6
31.7
9.6
26.7
25.3
18.3
-4.3
59.7
28.3
15.3
71.9
35.3
64.9
-17.5
33.2
8.4
12.4
25.8
16.8
1.1
54.7
29.8
9.8
74.1
38.5
55.2
29.7
28.9
8.9
23.5
29.0
27.6
6.4
67.3
35.8
11.5
84.1
P/E (x)
FY13 FY14E FY15E
EV/EBITDA (x)
FY13 FY14E FY15E
RoE (%)
FY13 FY14E FY15E
13.5
5.1
-0.6
10.7
6.3
9.0
10.6
11.6
-9.8
8.1
10.3
8.0
12.2
10.9
10.8
8.8
2.7
-7.9
7.9
4.4
10.7
5.5
11.7
17.6
4.6
4.6
6.3
7.8
6.5
5.7
11.5
24.8
-60.7
17.5
19.9
6.7
26.0
7.2
-11.1
19.4
16.8
28.8
12.3
13.4
14.6
10.0
5.0
-3.9
10.3
7.1
19.3
10.3
12.7
38.9
8.9
9.8
12.4
11.9
10.3
10.1
9.1
5.9
2.3
11.8
6.7
10.2
9.2
7.7
6.7
7.2
8.2
10.6
10.5
8.9
9.0
8.4
2.8
16.2
7.9
3.6
10.3
4.8
11.0
7.4
4.0
4.0
6.8
9.3
6.3
5.6
7.7
2.5
5.5
7.9
3.5
8.1
4.1
6.7
3.9
3.0
3.6
6.1
7.9
5.3
4.9
14.5
23.6
-13.4
16.4
15.0
3.0
22.1
6.3
2.9
16.3
15.9
15.5
11.5
12.8
14.0
14.3
17.2
22.1
13.0
14.1
5.6
21.1
9.8
15.9
17.9
17.3
16.1
11.8
13.4
14.1
C132
BPCL
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
BPCL IN
723.0
254 / 4
449 / 256
3 / -11 / -8
CMP: INR352

Y/E March
2013 2014E 2015E
Sales
2,422 2,507 2,574
EBITDA
66.7 68.7 68.4
Adj. PAT
18.8 25.5 27.8
Adj. EPS (INR)
26.0 35.3 38.5
EPS Gr. (%)
140.9 35.7
9.0
B V/Sh.(INR)
232
255
281
RoE (%)
11.5 14.5 14.3
RoCE (%)
8.3
7.8
7.4
Payout* (%)
35.2 35.1 35.4
Valuations
P/E (x)
13.5 10.0
9.1
P/BV (x)
1.5
1.4
1.2
EV/EBITDA (x)
8.5
8.4
7.7
Div. Yield (%)
3.1
2.9
3.0
*Based on standalone
2016E
2,699
70.1
28.6
39.5
2.7
310
13.4
8.2
26.6
8.9
1.1
6.3
2.6
Buy
Similar to prior quarters, the profitability of OMCs (BPCL, HPCL, IOCL)

would depend more on subsidy sharing, which is ad-hoc, than on
business fundamentals. Government subsidy compensation typically
comes with a delay.
3QFY14 gross under-recoveries are up 14% QoQ, led by higher LPG
losses.
We model OMCs subsidy sharing nil/nil/INR46b and upstream subsidy
sharing at INR686/650/551b for FY14/FY15/16, with the government
sharing the balance.
We peg refinery throughput at 6mmt for 3QFY14 v/s 5.6mmt in 3QFY13
and 6mmt in 2QFY14.
We expect BPCL to report net loss of INR3.9b in 3QFY14.
BPCL trades at 9.1x FY15E EPS and 0.5x FY15E adjusted (for investments
and E&P) BV. E&P upsides from Mozambique and Brazil are the key
medium-term triggers. Buy.

(a) subsidy sharing, and
(b) GRMs.

Y/E March
Net Sales
Change (%)
EBITDA
% of Sales
Depreciation
Interest
Other Income
PBT
Tax
Tax rat e (%)
PAT
Change (%)
Adj. PAT
Adj. EPS
Key Assumption (INR b)
Gross under recovery
Upstream sharing
Govt. sharing
Net Under/(Over) recovery
As a % of Gross
E: MOSL Estimates
January 2014
(INR Million)
FY13
FY14
1Q
2Q
3Q
4Q
1Q
2Q
3QE
545,227 568,595 623,398 662,820 587,053 617,574 608,136
18.2
34.5
6.0
2.5
7.7
8.6
-2.4
-81,757
41,932
22,584
65,527
9,054
16,806
847
-15.0
7.4
3.6
9.9
1.5
2.7
0.1
4,801
3,983
4,657
5,820
5,305
5,382
5,400
5,205
4,117
5,758
3,172
5,253
3,244
3,025
3,395
16,516
4,307
5,366
3,695
4,839
3,706
-88,368
50,348
16,476
61,901
2,191
13,020
-3,873
0
0
0
13,928
688
3,708
0
0.0
0.0
0.0
22.5
31.4
28.5
0.0
-88,368
50,348
16,476
47,973
1,503
9,311
-3,873
nm
nm
-47.5
21.1
nm
-81.5
nm
-88,368
50,348
16,476
47,973
1,503
9,311
-3,873
-122.2
69.6
22.8
66.4
2.1
12.9
-5.4
116
37
0
80
68.5
90
36
72
-18
nm
94
36
60
-2
nm
90
60
87
-57
nm
61
37
19
5
8.9
88
42
44
2
2.4
99
40
50
10
10.1
FY13
FY14E
4QE
553,225 2,400,041 2,365,988
-16.5
13.3
-1.4
28,979
48,287 55,686
5.2
2.0
2.4
5,414
19,261 21,501
3,183
18,252 14,705
4,227
29,583 16,466
24,609
40,357 35,947
7,822
13,928 12,218
31.8
34.5
34.0
16,787
26,429 23,729
-65.0
101.6
-10.2
16,787
26,429 23,729
23.2
36.6
32.8
87
48
56
-18
nm
390
168
219
2
0.6
335
166
169
0
0.0
C133
Cairn India
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
CAIR IN
1,910.2
620 / 10
350 / 268
-4 / 0 / -7

Y/E March
Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Gr. (%)
B V/Sh.(INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2013
175.2
134.9
119.2
63.1
51.7
250
24.8
24.5
21.6
2014E
186.5
141.0
124.0
64.9
2.9
301
23.6
22.3
23.4
2015E
192.5
139.9
105.5
55.2
-15.0
341
17.2
19.0
23.4
2016E
187.6
127.1
94.5
49.5
-10.4
378
13.8
15.3
23.4
5.1
1.3
3.4
3.5
5.0
1.1
2.8
4.0
5.9
1.0
2.5
3.4
6.6
0.9
2.5
3.1
CMP: INR324
Buy
We expect Cairn Indias 3QFY14 Rajasthan production to increase to

185kbpd from 176kbpd in 2QFY14, primarily led by ramp-up in
production at Aishwariya and increase in production from Mangala
fields, and total net sales of 129.5kboepd (v/s 119kboepd in 3QFY13
and 123kboepd in 2QFY14).
We expect net sales of INR49b (v/s INR46b in 2QFY14), led by increase
in average production at its Rajasthan block. We estimate EBITDA at
INR37.5b v/s INR32.9b in 3QFY13 and INR35.3b in 2QFY14.
We expect other income to increase, led by higher cash balance. We
estimate forex loss of INR1b v/s gain of INR4.3b in 2QFY14 due to ~1% INR
appreciation as on 31 December 2013 as compared to 30 September 2013.
We model Brent crude price of USD108.5/105/105/bbl in FY14/15/16 and
long-term price of USD100/bbl, and take a quality discount of 12.5%
for Cairn India.
Key operational things to watch in the medium-term would be (a)
progress on already announced buy-back program, (b) production
ramp-up, and (c) reserve updates, with ongoing 100 well exploration
program at Rajasthan. With increasing cash balance on the balance
sheet, clarity on utilization would be positive.
The stock currently trades at 5.9x FY15E EPS of INR55.2. Maintain Buy.

(a) net realization, and (b) forex fluctuations.
(INR Million)
Y/E March
FY13
1Q
44,400
19.6
34,921
352
4,373
295
964
8,663
39,528
1,271
4.1
38,257
40.3
3Q
Net Sales
42,776
Change (%)
38.1
EBITDA
32,862
Exploration w/off
277
D,D&A
4,824
Interest
52
Other Income (Net)
1,819
Forex Fluctuations
2,357
PBT
31,884
Tax
323
Tax rate* (%)
1.1
Adj. PAT
31,561
YoY Change (%)
39.5
Merger arrangement gain
1,888
PAT
38,257
23,222
33,449
Adj. EPS
20.0
12.2
16.5
Key Assumptions and Cains share in production (kboepd)
Exchange rate (INR/USD)
54.2
55.5
54.2
Brent Price (USD/bbl)
108.7
110.0
110.0
Ravva & Cambay Prodn
10.2
9.2
9.1
Rajasthan Prodn
117.0
120.3
119.0
Total
127.2
129.4
128.1
E: MOSL Es tima tes; * Excluding for ex fluctuations, include s
January 2014
2Q
44,431
67.5
34,516
262
4,515
188
2,226
-7,858
23,918
697
2.2
23,222
204.3
FY14
FY13
FY14E
186,473
6.4
140,991
3,746
23,760
435
4,890
10,112
128,052
4,009
3.4
124,043
4.5
0
124,043
64.9
60.5
108.3
10.2
127.5
137.7
4Q
43,634
19.5
32,582
3,657
4,747
152
2,219
-28
26,218
582
2.2
25,636
17.3
1Q
40,629
-8.5
30,099
1,001
5,193
105
1,251
6,820
31,871
599
2.4
31,272
-18.3
2Q
46,499
4.7
35,325
513
5,465
110
1,109
4,292
34,637
787
2.6
33,851
45.8
3QE
49,049
14.7
37,526
980
6,085
110
1,184
-1,000
30,535
1,166
3.7
29,369
-6.9
4QE
50,295
15.3
38,042
1,252
7,017
110
1,346
0
31,008
1,457
4.7
29,551
15.3
25,636
13.4
31,272
16.4
33,851
17.7
29,369
15.4
29,551
15.5
175,241
33.6
134,880
4,549
18,459
687
7,228
3,134
121,548
2,872
2.4
118,676
49.5
1,888
120,564
62.1
62.1
110.6
10.0
122.8
132.9
62.0
109.2
10.1
129.5
139.6
61.9
110.6
10.1
136.5
146.6
54.5
108.3
9.3
118.6
127.8
54.2
113.5
8.6
118.0
126.6
MAT credit.
56.0
102.8
10.6
121.0
131.6
C134
GAIL (India)
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
GAIL IN
1,268.5
432 / 7
395 / 273
0 / 2 / -12

Y/E March
Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Gr. (%)
B V/Sh.(INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2013 2014E 2015E

473.3 570.1 671.5
62.8 71.3 71.0
40.2 42.1 36.7
31.7 33.2 28.9
10.1
4.7 -12.8
191
213
231
17.5 16.4 13.0
19.4 17.0 13.9
35.2 34.9 34.9
8.4
1.4
7.2
2.8
8.0
1.3
7.2
2.9
9.2
1.2
7.2
2.6
2016E
727.7
74.6
37.9
29.9
3.3
251
12.4
14.2
34.9
8.9
1.1
6.6
2.6
CMP: INR341
Neutral
We expect GAIL to report PAT of INR12.4b (down 4% YoY; up 35% QoQ).

We estimate GAILs subsidy sharing at nil in 3QFY14 v/s INR6.1b in
3QFY13 and INR7b in 2QFY14. GAILs subsidy sharing has been
provisionally capped at INR14b for FY14 (already shared in 1HFY14).
Subsidy sharing assumption: For FY14/FY15/FY16, we model upstream
sharing at INR686/650/551b. For GAIL, we have assumed a sharing of
INR14/14/12b in FY14/15/16 v/s INR26.9b in FY13.
We model gas transmission volumes at 96mmscmd v/s 105 in 3QFY13
and 95 in 2QFY14. Segmental EBIT (pre-subsidy) is expected to increase
by 47% QoQ, mainly led by nil subsidy sharing.
Adjusted for investments, the stock trades at 9.2x FY15E EPS of INR28.9.
Though we like the managements strategy to build network to enable
gas sourcing, we remain Neutral due to medium-term earnings
concern led by likely under-utilization of its new network on account
of headwinds to incremental gas availability.

(a) subsidy sharing, (b) transmission volumes, and (c) cost of natural
gas for consumption in LPG and petrochemicals segment.
(INR Million)
Y/E March
FY13
FY14
1Q
2Q
3Q
4Q
1Q
2Q
110,886 113,612 124,743 124,086 128,556 139,446
25.0
17.1
10.8
18.7
15.9
22.7
18,991
13,803
19,722
11,367
14,642
14,055
17.1
12.1
15.8
9.2
11.4
10.1
2,169
2,491
2,424
2,726
2,808
2,888
588
261
552
549
612
1,082
612
2,685
1,841
3,317
1,018
2,798
16,846
13,736
18,587
11,409
12,241
12,883
5,508
3,882
5,738
5,227
4,159
3,726
32.7
28.3
30.9
45.8
34.0
28.9
11,338
9,854
12,849
6,065
8,082
9,157
15.1
-10.0
32.6
68.0
-28.7
-7.1
8.9
7.8
10.1
4.8
6.4
7.2
Net Sales
Change (%)
EBITDA
% of Net Sales
Depreciation
Interest
Other Income
PBT
Tax
Rate (%)
Adj PAT
Change (%)
EPS (INR)
Key Assumptions
Ga s Trans. volume (mmsmd)
Petchem sales (000MT)
Segmental EBIT Breakup (INR m)
Transmission
Natural Gas
LPG
Natur al Gas Trading
Petrochemicals
LPG & Liq.HC (pre-subsidy)
Unalloc at ed; GAILTEL
Total
Less: Subsidy
Total
E: MOSL Estimates
January 2014
3QE
4QE
150,337 151,792
20.5
22.3
21,469
21,147
14.3
13.9
2,914
2,959
1,108
1,145
1,500
1,553
18,948
18,595
6,580
6,093
34.7
32.8
12,367
12,503
-3.7
106.1
9.7
9.9
FY13
FY14E
473,327
17.5
63,882
13.5
9,809
1,950
8,455
60,578
20,356
33.6
40,105
17.6
31.6
570,131
20.5
71,313
12.5
11,569
3,947
6,869
62,666
20,558
32.8
42,108
5.0
33.2
110
66
106
101
105
128
99
132
99
121
95
108
96
115
96
116
105
427
97
460
5,673
709
4,956
1,958
11,373
81
24,751
-7,000
17,751
6,049
-489
2,447
4,182
8,521
69
20,779
-7,857
12,922
6,195
133
2,986
4,395
12,063
-834
24,939
-6,143
18,796
406
620
3,469
4,716
10,799
-338
19,671
-5,872
13,799
5,538
550
3,025
4,383
6,891
-255
20,132
-7,000
13,132
5,762
426
4,870
3,909
4,707
17
19,691
-6,987
12,704
4,901
413
3,590
3,975
7,266
0
20,145
0
20,145
4,540
413
3,196
4,229
7,363
0
19,741
0
19,741
18,323
973
13,858
15,250
42,756
-1,022
90,139
-26,872
63,268
20,741
1,802
14,682
16,495
26,226
-238
79,708
-13,987
65,721
C135

Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
GUJS IN
562.7
34 / 1
82 / 47
1 / 1 / -31
CMP: INR60
We expect GSPL to report net sales of INR2.8b and PAT of INR1.2b

(down 3% YoY and up 1% QoQ).
We build flattish QoQ gas transmission volumes at 21mmscmd in

3QFY14 (v/s 27.3mmscmd in 3QFY13 and 21.2mmscmd in 2QFY14), led
by decline in KG-D6 production.
GSPL has won all three bids for cross -country pipelines conducted by
PNGRB last year. We await clarity on the timelines and other details
regarding these pipelines.
We build gas transmission volumes of 21.5mmscmd in FY14. We model

average tariff at INR1,375/mscm in FY14. The stock trades at 6.7x FY15E
EPS of INR8.9. Maintain Neutral.

Y/E March
Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Gr. (%)
B V/Sh.(INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2013 2014E 2015E

11.6 11.3 11.2
10.6 10.2 10.0
5.4
4.7
5.0
9.6
8.4
8.9
3.1 -12.2
6.1
52
59
67
19.9 15.0 14.1
22.3 17.7 16.4
12.6 12.2 13.9
6.3
1.1
4.0
1.7
7.1
1.0
3.6
1.7
6.7
0.9
3.5
1.7
2016E
12.0
10.7
5.5
9.8
9.8
76
13.7
16.2
13.1
6.1
0.8
3.2
1.7
Neutral

(a) transmission volumes, and
(b) tariff.
(INR Milllion)
Y/E March
Net Sales
Change (%)
EBITDA
% of Net Sales
% Change
Depreciation
Interest
Other Income
PBT
Tax
Rate (%)
PAT
Change (%)
EPS (INR)
Transmission Vol. (mmscmd)
Implied tariff (INR/mscm)
E: MOSL Estimates
January 2014
FY13
1Q
2,676
-5.9
2,465
92.1
-5.9
439
317
176
1,884
636
33.7
1,248
-9
2.2
31.1
903
2Q
2,732
-2.7
2,520
92.2
-2.5
464
316
226
1,966
638
32.5
1,328
3
2.4
28.6
993
3Q
2,606
-4.9
2,338
89.7
-7.1
478
314
230
1,776
586
33.0
1,190
-6
2.1
27.3
1,043
FY14
4Q
3,590
29.9
3,268
91.0
29.7
480
315
158
2,630
1,015
38.6
1,615
25
2.9
22.2
1,768
1Q
2,961
10.6
2,691
90.9
9.2
458
380
139
1,992
729
36.6
1,263
1
2.2
22.1
1,411
2Q
2,770
1.4
2,508
90.6
-0.5
470
367
141
1,812
671
37.1
1,141
-14
2.0
21.2
1,365
3QE
2,766
6.2
2,487
89.9
6.4
485
380
150
1,772
620
35.0
1,152
-3
2.0
21.3
1,350
4QE
2,785
-22.4
2,478
89.0
-24.2
503
382
157
1,750
580
33.1
1,170
-28
2.1
21.4
1,374
FY13
FY14E
11,603
4.0
10,591
91.3
3.4
1,861
1,263
790
8,257
2,876
34.8
5,381
3
9.6
27.3
1,135
11,282
-2.8
10,164
90.1
-4.0
1,915
1,509
586
7,326
2,601
35.5
4,725
-12
8.4
21.5
1,375
C136
HPCL
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
HPCL IN
339.0
81 / 1
381 / 158
13 / -14 / -24
2013 2014E 2015E

2,065 2,313 2,162
39.4 35.0 41.6
9.0
4.2
8.0
26.7 12.4 23.5
-0.7 -53.4 89.1
405
413
428
6.7
3.0
5.6
6.8
4.8
6.1
37.3 34.8 35.3
9.0
0.6
8.5
3.6
19.3
0.6
7.2
1.5

Y/E March
Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Gr. (%)
B V/Sh.(INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
CMP: INR239
10.2
0.6
6.1
3.0
2016E
2,282
40.3
8.3
24.5
4.5
444
5.6
5.9
35.3
9.8
0.5
4.9
3.1
Buy

comes with a delay.
losses.
We peg refinery throughput at 3.9mmt for 3QFY14 v/s 4.2mmt in
3QFY13 and 3.9mmt in 2QFY14.
We expect HPCL to report net loss of INR5.1b in 3QFY14.
HPCL trades at 10.2x FY15E EPS and 0.6x FY15E BV. We have a Buy rating
due to our positive stance on diesel reforms and attractive valuations.

(b) GRMs.

Y/E March
(INR Million)
FY13
FY14
1Q
2Q
3Q
4Q
1Q
2Q
440,765 484,639 527,510 612,379 517,639 518,602
8.0
30.9
10.1
16.9
17.4
7.0
-88,759
22,480
3,877 101,826
-6,879
10,142
-20.1
4.6
0.7
16.6
-1.3
2.0
nm
nm
-89.1
86.3
nm
-54.9
4,544
4,910
4,947
4,914
5,100
5,426
5,492
3,899
6,135
2,852
4,668
3,962
2,524
3,419
2,446
3,910
2,042
2,435
3,784
6,181
6,229 -15,479
0
0
-92,488
23,271
1,471
82,492 -14,605
3,189
0
0
0
5,699
0
0
0.0
0.0
0.0
6.9
0.0
0.0
-92,488
23,271
1,471
76,793 -14,605
3,189
nm
nm
-94.6
65.8
nm
-86.3
-272.8
68.6
4.3
226.5
-43.1
9.4
Net Sales
Change (%)
EBITDA
% of Net Sales
Change (%)
Depreciation
Interest
Other income
Exceptional Item
PBT
Tax
Rate (%)
PAT
Change (%)
Adj. EPS
Key Assumptions (INR b)
Gross under recovery
Upstream sharing
Govt. subsidy
Net Under recovery
Net Sharing (%)
E: MOSL Estimates; * 1QFY14 net
January 2014
107
83
87
85
34
33
33
11
0
67
55
126
73
-17
-2
-52
69
nm
nm
nm
sales includes receivables from ONGC
58
35
18
5
9
82
39
41
2
2
FY13
3QE
575,297
9.1
1,812
0.3
-53.3
5,500
3,838
2,450
0
-5,076
0
0.0
-5,076
nm
-15.0
94
38
47
9
10
FY14E
4QE
701,831 2,065,294 2,313,369
14.6
15.9
12.0
29,941
39,424
35,016
4.3
2
2
-70.6
-246.7
12.6
5,678
19,315
21,704
3,575
18,377
16,042
2,114
12,300
9,040
0
714
0
22,802
14,746
6,310
2,096
5,699
2,096
9.2
38.6
33.2
20,706
9,047
4,214
-73.0
-0.7
-53.4
61.1
26.7
12.4
83
46
53
-17
nm
362
112
248
2
nm
318
158
160
0
nm
C137
Indian Oil Corporation

Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
IOCL IN
2,428.0
517 / 8
375 / 186
3 / -17 / -28
2013 2014E 2015E

4,607 4,714 4,783
127.4 116.5 182.8
44.5 40.7 67.0
18.3 16.8 27.6
-62.7 -8.5 64.7
261
272
290
7.2
6.3
9.8
7.6
6.2 10.2
35.2 34.9 36.0
11.6
0.8
9.2
2.9
12.7
0.8
9.8
2.4

Y/E March
Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Gr. (%)
B V/Sh.(INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
CMP: INR213
7.7
0.7
5.9
3.8
2016E
4,687
194.9
69.7
28.7
4.1
310
9.6
10.5
34.5
7.4
0.7
5.3
3.8
Buy

comes with a delay.
losses.
We peg refinery throughput at 12.7mmt for 3QFY14 v/s 14.2mmt in
3QFY13 and 13.3mmt in 2QFY14.
We expect IOCL to report net loss of INR1.3b in 3QFY14.
IOCL trades attractively at 0.7x FY15E BV and 7.7x FY15E EPS. Buy.

(b) GRMs.

Y/E March
Net Sales
Change (%)
EBITDA
% of Net Sales
% Change
Depreciation
Interest
Other Income
PBT
Tax
Rate (%)
Adj. PAT
Change (%)
PAT
Adj. EPS
Gross under recovery (INR b)
Upstream sharing
Govt. sharing
Net Under recovery
E: MOSL Estimates
January 2014
(INR Million)
FY13
1Q
2Q
3Q
966,028 1,057,913 1,152,767
-4.1
18.7
0.1
-202,360
90,627
51,310
-20.9
8.6
4.5
nm
nm
-52.2
12,775
12,865
13,243
18,491
15,108
16,726
9,117
33,460
11,978
-224,510
96,113
33,320
0
0
0
nm
0.0
0.0
-224,510
96,113
33,320
nm
nm
-61.5
-224,510
96,113
33,320
-92.5
39.6
13.7
255
204
212
80
81
81
0
161
135
175
-38
-4
FY14
FY13
FY14E
4Q
1Q
2Q
3QE
4QE
1,284,497 1,102,332 1,098,595 1,300,404 1,426,274 4,461,204 4,927,604
0.6
14.1
3.8
12.8
11.0
3.1
10.5
165,205 -13,994
31,224
12,610
79,575
104,782
109,415
12.9
-1.3
2.8
1.0
5.6
2.3
2.2
17.7
nm
-65.5
-75.4
-51.8
-38.3
4.4
13,128
13,858
14,342
14,500
14,454
52,010
57,154
13,766
14,702
13,542
13,613
12,960
64,092
54,817
13,244
11,621
13,500
14,193
14,124
67,798
53,438
151,554 -30,932
16,839
-1,310
66,285
56,478
50,881
6,426
0
0
0
10,176
6,426
10,176
4.2
nm
0.0
nm
15.4
11.4
20.0
145,128 -30,932
16,839
-1,310
56,109
50,053
40,705
2.1
nm
-82.5
nm
-61.3
-57.1
-18.7
145,128 -30,932
16,839
-1,310
56,109
50,053
40,705
59.8
-12.7
6.9
-0.5
23.1
20.6
16.8
187
136
183
212
198
858
729
76
82
86
85
109
320
362
237
43
92
106
126
533
368
-127
12
4
21
-38
5
0
C138
Indraprastha Gas
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
IGL IN
140.0
37 / 1
329 / 236
-5 / -12 / -3
CMP: INR267

Y/E March
Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Gr. (%)
B V/Sh.(INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2013 2014E 2015E

33.7 40.4 45.2
7.6
7.9
8.6
3.5
3.6
4.1
25.3 25.8 29.0
15.3
2.0 12.4
107
127
149
26.0 22.1 21.1
32.4 28.3 27.0
21.7 19.4 20.7
10.6
2.5
5.3
2.1
10.3
2.1
4.8
1.9
9.2
1.8
4.1
2.2
2016E
50.5
9.4
4.5
32.0
10.5
174
19.9
25.8
18.7
8.3
1.5
3.4
2.2
Neutral
We expect IGL to report volumes of 3.9mmscmd and PAT of INR951m

(up 10% YoY and 3% QoQ) for 3QFY14.
Lack of domestic gas has forced IGL to use high cost LNG leading to
significant price increase in the last 2-3 years. This has led to fall in
IGL's volume growth from robust double digit to single digit thereby
limiting earnings growth in near term.
We expect 3QFY14 CNG volumes to grow 3% YoY to 2.9mmscmd and
PNG volumes to grow 9% YoY to 1mmscmd.
We model in total volumes of 3.8/4.1/4.4mmscmd in FY14/FY15/FY16.
The stock trades at 9.2x FY15E EPS of INR29.
Post the High Court quashing PNGRB's tariff cut order, PNGRB has now
approached the Supreme Court and the hearing is still on. We maintain
our Neutral rating due to lack of clarity in predicting earnings for IGL
and await the Supreme Court decision.

(a) EBITDA margin,
(b) sales volume and
(c) Supreme Court case verdict
(INR Million)
Y/E March
Net Sales
Change (%)
EBITDA
EBITDA (Rs/scm)
% of Net Sales
% Change
Depreciation
Interest
Other Income
PBT
Tax
Rate (%)
PAT
PAT (INR/ scm)
Change (%)
EPS
Ga s Volumes (mmscmd)
CNG
PNG
Tot al
E: MOSL Estimates
January 2014
FY13
FY14
FY13
FY14E
1Q
7,602
41.7
1,793
5.6
23.6
13.9
427
155
36
1,247
396
31.8
850
2.6
6.2
6.1
2Q
8,546
43.2
2,060
6.1
24.1
30.9
477
140
39
1,482
489
33.0
992
2.9
28.5
7.1
3Q
8,694
31.4
1,871
5.5
21.5
25.7
474
141
26
1,282
418
32.6
863
2.5
24.9
6.2
4Q
8,818
22.4
1,848
5.5
21.0
9.7
489
125
38
1,272
437
34.3
835
2.5
3.4
6.0
1Q
9,015
18.6
1,924
5.7
21.3
7.3
532
128
51
1,315
442
33.6
873
2.6
2.6
6.2
2Q
10,090
18.1
2,001
5.7
19.8
-2.9
548
98
49
1,404
476
33.9
928
2.6
-6.5
6.6
3QE
10,674
22.8
2,040
5.7
19.1
9.0
560
100
60
1,440
490
34.0
951
2.7
10.1
6.8
4QE
10,637
20.6
1,956
5.5
18.4
5.8
610
104
64
1,306
443
34.0
862
2.4
3.2
6.2
33,661
33.8
7,572
5.6
22.5
19.8
1,867
562
138
5,282
1,741
33.0
3,541
2.6
15.3
25.3
40,416
20.1
7,921
5.6
19.6
4.6
2,249
430
223
5,465
1,851
33.9
3,613
2.6
2.0
25.8
2.67
0.88
3.55
2.80
0.88
3.69
2.80
0.91
3.71
2.77
0.98
3.74
2.77
0.95
3.71
2.87
0.97
3.84
2.89
0.99
3.88
2.87
1.07
3.94
2.76
0.91
3.67
2.85
0.99
3.84
C139
MRPL
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
MRPL IN
1,752.6
74 / 1
70 / 26
-5 / 12 / -39

Y/E March
Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Gr. (%)
B V/Sh.(INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2013 2014E 2015E

657.0 749.9 781.8
8.4 18.9 32.0
-8.0
1.9 11.2
-4.3
1.1
6.4
n m -123.9 484.3
37
38
43
-11.1
2.9 15.9
-0.2
5.4 20.3
0.0 21.4 23.9
-9.8
1.1
15.3
-
38.9
1.1
7.0
0.5
6.7
1.0
3.6
3.1
2016E
805.0
36.5
15.3
8.7
36.6
49
18.9
24.2
22.8
4.9
0.9
2.6
4.0
CMP: INR42
Neutral
We expect MRPL to report PAT of INR1.4b for 3QFY14 (v/s loss of INR3.6b
in 3QFY13 and profit of INR2.4b in 2QFY14).
We estimate EBITDA at INR4.1b (v/s INR1.8b in 3QFY13 and INR7.3b in
2QFY14). Regional benchmark Reuters Singapore GRM declined 22%
QoQ to USD4.3/bbl from USD5.5/bbl due to decline in gasoline cracks.
On the operational front, we expect refinery throughput at 3.8mmt.
Medium-term GRM outlook continues to be subdued due to
overcapacity and sluggish global demand. Expect GRM to be volatile
(occasional spurts) due to occasional bunching up of shutdowns.
For MRPL, we model in GRM of USD3.8/bbl for FY14 and USD5.4/bbl for
FY15.
Key event to watch out is the schedule of commissioning of its upgradation and expansion project.
The stock trades at 6.7x FY15E EPS and at an EV of 3.6x FY15E EBITDA.
Maintain Neutral.

(a) GRMs,
(b) forex fluctuations and
(c) inventory changes.
Y/E March
Net Sales
Change (%)
EBITDA
% of Net Sales
Change (%)
Depreciation
Interest
Other Income
PBT b/f forex/exceptional
Forex gain/(loss)
Exceptional items
PBT
Tax
Rate (%)
PAT
Change (%)
EPS (INR)
GRM (USD/bbl)
Throughput (mmt)
E: MOSL Estimates
January 2014
(INR Million)
FY13
1Q
2Q
3Q
4Q
1Q
2Q
128,099 163,101 179,921 185,795 152,659 187,623
-4.2
39.8
39.1
17.3
19.2
15.0
-6,476
11,569
1,774
1,428
1,683
7,305
nm
7.1
1.0
0.8
1.1
3.9
nm
1,435
-41
-82
nm
nm
-1,375
-1,456
-1,550
-1,663
-1,688
-1,761
-1,102
-701
-777
-706
-779
-926
495
369
192
105
293
335
-8,458
9,781
-362
-836
-491
4,953
-6,490
2,836
-2,570
856
-5,166
-2,495
0
30
0
445
1,118
0
-14,948
12,647
-2,932
465
-4,539
2,458
-257
-796
-664
-1,095
0
-100
nm
6.3
nm
235.7
nm
4.1
-15,206
11,851
-3,596
-630
-4,539
2,358
n m 4,811.4
nm
nm
nm
-80.1
-8.7
6.8
-2.1
-0.4
-2.6
1.3
-4.2
9.2
1.9
2.0
2.9
5.0
2.9
3.6
3.8
4.1
3.3
3.7
FY14
3QE
192,772
7.1
4,112
2.1
nm
-1,800
-1,000
350
1,662
0
0
1,662
-249
15.0
1,413
nm
0.8
3.3
3.8
4QE
198,495
6.8
5,810
2.9
nm
-1,890
-1,095
407
3,231
0
0
3,231
-550
17.0
2,681
nm
1.5
3.9
3.9
FY13
FY14E
656,915
22.1
8,294
1.3
-39.9
-6,044
-3,286
1,160
125
-5,368
475
-4,769
-2,812
nm
-7,580
nm
-4.3
2.5
14.4
731,549
11.4
18,910
2.6
128.0
-7,139
-3,800
1,384
9,355
-7,661
1,118
2,812
-900
32.0
1,912
-125.2
1.1
3.8
14.6
C140
Oil India
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
OINL IN
601.1
291 / 5
630 / 415
-1 / -28 / -4
CMP: INR484

Y/E March
Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Gr. (%)
B V/Sh.(INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2013 2014E 2015E

95.3 97.5 113.7
42.5 43.0 54.2
35.9 32.9 40.4
59.7 54.7 67.3
4.1
-8.4 22.9
320
354
396
19.4 16.3 17.9
26.0 21.6 24.0
58.2 37.3 37.3
8.1
1.5
4.2
6.2
8.9
1.4
4.0
3.7
7.2
1.2
3.0
4.5
2016E
127.4
62.2
44.2
73.6
9.4
442
17.6
23.6
37.3
6.6
1.1
2.5
5.0
Buy
We expect OINL to report PAT of INR9.4b (v/s INR9.4b in 3QFY13 and

INR9b in 2QFY14). OINLs subsidy sharing has been ad-hoc at USD56/
bbl for 1HFY14, similar to FY13 and we model the same for 3QFY14.
We estimate EBITDA at INR12.2b (up 9% YoY and down 8% QoQ). We
estimate gross realization at USD109/bbl v/s USD109/bbl in 3QFY13
and USD108/bbl in 2QFY14 and net realization at USD53/bbl v/s USD53/
bbl in 3QFY13 and USD52/bbl in 2QFY14.
Subsidy sharing assumption: For FY14/15/16, we model upstream
sharing at INR686/650/551b, and OINLs share at 13.4% of upstream. We
expect OINL to share INR23.4b in 3QFY14.
Our Brent price assumption is USD108.5/105/105/bbl for FY14/15/16 and
at USD100/bbl for long term. We model upstream sharing at INR686/
650/551b in FY14/15/16.
The stock trades at 7.2x FY15E EPS of INR67.3. We remain positive on
OINL due to recently announced diesel reforms, gas price hike and its
strong operational foothold: (1) steady production growth, (2) high
share of oil in its reserves (55% in 1P and 62% in 2P), and (3) attractive
valuations (>40% discount to its global peers on EV/BOE, 1P basis).
Maintain Buy.

(a) subsidy sharing, (b) DD&A charges, and (c) oil & gas production
volumes.
(INR Billion)
Y/E March
Net Sales
Change (%)
EBITDA
% of Net Sales
Change (%)
D,D&A
Interest
OI (incl. Oper. other inc)
PBT
Tax
Rate (%)
PAT
Change (%)
Adj. PAT
Adj. EPS (INR)
Key Assumptions (USD/bbl)
Exchange rate (INR/USD)
Gross Oil Realization
Subsidy
Net Oil Realization
Subsidy (INR b)
E: MOSL Estimates
January 2014
FY13
FY14
FY13
FY14E
1Q
23.3
2.0
11.0
47.0
-12.2
2.0
0.0
4.8
13.8
4.5
32.5
9.3
9.5
9.3
15.5
2Q
24.0
-26.6
11.5
47.8
-29.2
2.6
0.0
5.2
14.1
4.6
32.4
9.5
-16.2
9.5
15.9
3Q
24.1
-3.3
11.2
46.6
-15.7
2.2
0.0
4.9
13.9
4.5
32.4
9.4
-7.3
9.4
15.6
4Q
23.8
38.2
8.8
37.1
82.6
2.4
0.0
4.6
11.0
3.4
30.7
7.6
71.9
7.6
12.7
1Q
19.8
-15.1
7.0
35.2
-36.4
2.7
0.0
4.7
9.0
2.9
32.2
6.1
-34.5
6.1
10.1
2Q
27.1
13.0
13.3
49.0
15.8
4.7
0.0
4.7
13.3
4.3
32.2
9.0
-5.3
9.0
15.0
3QE
26.2
8.7
12.2
46.5
8.5
2.7
0.0
4.8
14.3
4.9
34.0
9.4
0.3
9.4
15.7
4QE
24.3
2.2
10.5
43.2
19.1
2.8
0.0
4.8
12.5
4.2
33.3
8.3
9.1
8.3
13.9
95.3
-2.5
42.5
44.6
287.6
9.2
0.0
19.6
52.8
16.9
32.1
35.9
4.1
35.9
59.7
97.5
2.3
43.0
44.1
1.1
12.8
0.1
19.0
49.1
16.2
33.0
32.9
-8.4
32.9
54.7
54.2
109.8
56.0
53.8
20.2
55.2
108.6
56.0
52.6
20.8
54.2
108.6
56.0
52.6
19.5
54.4
111.4
56.0
55.4
18.5
56.0
101.9
56.0
45.9
19.8
62.5
108.3
56.0
52.3
22.3
62.0
109.0
56.0
53.0
23.4
61.9
109.2
70.6
38.6
29.4
54.5
109.6
56.0
53.6
78.9
60.6
107.1
59.6
47.5
94.9
C141
ONGC
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
ONGC IN
8,555.5
2,499 / 40
354 / 234
-3 / -21 / 3

Y/E March
Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Gr. (%)
B V/Sh.(INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
CMP: INR292
2013 2014E 2015E

1,624 1,810 1,950
549
586
666
240
255
310
28.3 29.8 35.8
(8.8)
6.2 21.5
178
196
218
16.8 15.9 17.3
15.2 14.9 16.9
45.4 39.3 39.1
2016E
2,036
750
336
38.8
8.6
242
16.9
16.4
39.1
10.3
1.6
4.3
3.3
9.8
1.5
4.0
3.4
8.2
1.3
3.6
4.1
7.5
1.2
3.2
4.5
Buy
We expect ONGC to report adjusted PAT of INR58b (v/s INR56b in

3QFY13 and INR61b in 2QFY14). ONGCs subsidy sharing has been adhoc at USD56/bbl for 1HFY14, similar to FY13 and we model the same
for 3QFY14.
We estimate EBITDA at INR117b (v/s INR112b in 3QFY13 and INR120b
in 2QFY14).
We estimate gross realization at USD109/bbl v/s USD110/bbl in 3QFY13
and USD109/bbl in 2QFY14, and net realization at USD45/bbl v/s USD48/
bbl in 3QFY13 and USD45/bbl in 2QFY14.
Subsidy sharing assumption: For FY14/15/16, we model upstream
sharing at INR686/650/551b, and ONGCs share at 84.1% of upstream.
We expect ONGC to share INR138.6b in 3QFY14.
Our Brent price assumption is USD108.5/105/105/bbl for FY14/15/16 and
at USD100/bbl for long term.
We remain positive on the stock due to (a) likely gas price hike in near
term, (b) continued diesel price hikes, (c) attractive valuations with
an implied dividend yield of 4%. The stock trades at 8.2x FY15E
consolidated EPS of INR35.8. Maintain Buy.

(a) subsidy sharing,
(b) DD&A charges, and
(c) oil & gas production volumes.
Quaterly performance (Standalone)
(INR Billion)
Y/E March
Net Sales
Change (%)
EBITDA
% of Net Sales
D,D & A
Interest
Other Income
PBT
Tax
Rate (%)
PAT
Adjusted PAT
Change (%)
Adj. EPS (INR)
Fx rate (INR/USD)
Gross Oil Realization
Subsidy
Net Oil Realization
Subsidy (INR b)
E: MOSL Estimates
January 2014
FY13
FY14
FY13
FY14E
1Q
200.8
24.0
110.4
55.0
32.0
0.3
11.3
89.4
28.6
32.0
60.8
60.8
48.4
7.1
2Q
197.9
-12.5
102.7
51.9
37.3
0.0
20.0
85.4
26.4
30.9
59.0
59.0
-31.8
6.9
3Q
209.9
15.8
112.4
53.5
44.1
0.0
13.9
82.1
26.5
32.2
55.6
55.6
20.0
6.5
4Q
213.9
13.7
102.9
48.1
71.3
0.0
16.9
48.5
14.6
30.2
33.9
33.9
-40.0
4.0
1Q
192.2
-4.3
84.0
43.7
39.0
0.0
12.9
57.8
17.7
30.6
40.2
40.2
-33.9
4.7
2Q
223.1
12.8
120.0
53.8
45.0
0.0
15.9
90.9
30.3
33.3
60.6
60.6
2.8
7.1
3QE
221.1
5.3
116.6
52.7
45.6
0.0
13.8
84.8
27.1
31.9
57.7
57.7
3.7
6.7
4QE
206.8
-3.3
102.0
49.3
57.5
0.2
14.3
58.6
18.6
31.8
40.0
40.0
18.1
4.7
822.5
8.6
428.4
52.1
184.6
0.3
62.0
305.4
96.2
31.5
209.3
209.3
-9.1
24.5
843.1
2.5
422.5
50.1
187.0
0.2
56.8
292.1
93.6
32.1
198.5
198.5
-5.1
23.2
54.2
109.9
63.3
46.6
123.5
55.2
109.9
63.1
46.8
123.3
54.2
110.2
62.2
48.0
124.3
54.4
114.0
63.1
50.9
123.1
56.0
102.9
62.7
40.2
126.2
62.5
109.0
64.2
44.8
138.0
62.0
109.2
64.3
44.9
138.6
61.9
111.0
78.3
32.7
174.3
54.5
111.0
62.9
48.1
494.2
60.6
108.0
67.4
40.7
577.1
C142
Petronet LNG
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
PLNG IN
750.0
91 / 1
169 / 106
-7 / -10 / -33
CMP: INR122
2013 2014E 2015E

314.7 401.7 442.6
18.4 15.6 19.3
11.5
7.4
8.6
15.3
9.8 11.5
4.9 -36.0 17.5
59.3 67.1 76.3
28.8 15.5 16.1
24.1 16.8 18.1
19.1 21.1 19.9
8.0
2.1
6.0
2.1
12.4
1.8
7.0
1.4
10.6
1.6
6.4
1.6
2016E
523.8
23.1
10.4
13.8
19.9
87.4
16.9
19.3
19.9
8.8
1.4
5.2
1.9
PLNG's reported numbers will not be comparable due to

commissioning of the Kochi terminal. We expect PLNG to report PAT
of INR1.5b (down 53% YoY and 18% QoQ) for 3QFY14, primarily due to
Kochi plants depreciation and interest burden post commissioning
of the plant in August 2013. We estimate EBITDA at INR3.8b (down
28% YoY and up 5% QoQ).
We have built in LNG volumes at 2.7mmt in 3QFY14, 9% higher QoQ.
We model 10.5mmtpa volumes at Dahej in FY14, of which 7.5mmtpa
would be on long-term contract and 3mmtpa on short-term. We model
in 0.1mmt volumes from Kochi in FY14.
We model 5% escalation in re-gasification tariff till FY16 and flat
thereafter at Dahej.
The stock trades at 10.6x FY15E consolidated EPS of INR11.5. PLNG is
well placed to benefit from the continued gas deficit in the country
and completion of the Kochi - Bangalore pipeline leg will be positive
for the stock. Maintain Buy.

Y/E March
Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Gr. (%)
B V/Sh.(INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
Buy

(a) interest and depreciation charges for Kochi terminal,
(b) spot volumes, and
(c) marketing margin on spot volumes.
(INR Million)
Y/E March
Net Sales
Change (%)
EBITDA
% of Net Sales
Change (%)
Depreciation
Interest
Other Income
PBT
Tax
Rate (%)
PAT
Change (%)
EPS (INR)
Dahej Ga s Volume (TB TU)
Dahej Ga s Volume s (mmt)
Kochi Gas V olumes (mmt)
Avg. Dahej Regas (INR/mmbtu)
E: MOSL Estimates
January 2014
FY13
FY14
1Q
70,304
52.1
4,571
6.5
4.3
459
329
266
4,048
1,340
33.1
2,708
5.5
3.6
127.2
2.5
2Q
75,484
40.6
5,182
6.9
15.6
467
317
248
4,646
1,500
32.3
3,146
20.8
4.2
135.0
2.7
3Q
84,228
33.1
5,289
6.3
4.1
472
291
149
4,675
1,490
31.9
3,185
7.8
4.2
140.6
2.8
44.9
49.1
47.6
4Q
84,656
32.8
4,344
5.1
18.8
468
247
203
3,831
1,380
36.0
2,451
0.0
3.3
122.0
2.4
0.0
45.3
1Q
84,442
20.1
3,978
4.7
-13.0
467
240
152
3,423
1,170
34.2
2,253
-16.8
3.0
129.5
2.6
41.8
2Q
94,935
25.8
3,639
3.8
-29.8
597
386
161
2,818
1,000
35.5
1,818
-42.2
2.4
122.8
2.4
0.0
41.3
3QE
108,490
28.8
3,804
3.5
-28.1
1,042
739
175
2,198
714
32.5
1,484
-53.4
2.0
133.3
2.7
0.0
40.8
4QE
113,818
34.4
4,212
3.7
-3.0
1,107
740
208
2,574
836
32.5
1,737
-29.1
2.3
137.3
2.7
0.1
43.8
FY13
FY14E
314,672
38.6
19,385
6.2
10.1
1,866
1,184
865
17,200
5,710
33.2
11,490
8.7
15.3
524.8
10.4
0.0
46.7
401,684
27.7
15,634
3.9
-19.4
3,212
2,106
697
11,012
3,721
33.8
7,291
-36.5
9.7
522.9
10.4
0.1
41.9
C143
Reliance Industries
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
RIL IN
3,230.7
2,839 / 46
955 / 765
1 / -6 / -2
CMP: INR879
We expect RIL to report GRM of USD7.5/bbl for 3QFY14 v/s USD7.7/bbl

in 2QFY14. Singapore GRMs decreased 22% QoQ due to weak gasoline
cracks. We also expect some QoQ easing in petchem profits.
We estimate average KG-D6 volume at 12mmscmd for 3QFY14 v/s

14mmscmd in 2QFY14.
We expect RIL to report PAT of INR52b (v/s INR55b in 3QFY13 and

INR54.9b in 2QFY14).
RIL trades at 11.6x FY15E adjusted EPS of INR84.1. RILs new refining/
petchem projects are likely to add to earnings from end-FY16/FY17,
but medium-term outlook on core business remains weak, with RoE
reaching sub-12%. We maintain Neutral.

Y/E March
Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Gr. (%)
B V/Sh.(INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2013 2014E 2015E

3,603 4,043 3,982
308
304
358
210
217
246
71.9 74.1 84.1
4.8
3.1 13.8
616
679
750
12.3 11.5 11.8
11.6 10.9 11.5
14.6 16.4 16.3
13.5
1.4
8.9
1.0
13.1
1.3
9.3
1.1
2016E
3,963
402
275
93.9
11.7
830
11.9
11.8
16.4
11.6
1.2
8.0
1.2
10.3
1.1
7.4
1.4
Neutral

(a) GRMs,
(b) petchem margin, and
(c) KG-D6 production.
(INR Billion)
Y/E March
FY13
1Q
918.8
13.4
67.5
7.3
-32.0
24.3
7.8
19.0
54.3
9.6
17.7
44.7
-21.0
15.3
2Q
903.4
15.0
77.1
8.5
-21.7
22.8
7.4
21.1
68.0
14.3
21.0
53.8
-5.7
18.4
3Q
938.9
10.3
83.7
8.9
14.9
24.6
8.1
17.4
68.5
13.5
19.7
55.0
23.9
18.8
FY14
4Q
842.0
-1.2
78.3
9.3
19.2
22.4
7.1
22.4
71.2
15.3
21.5
55.9
31.9
19.1
FY14E
1Q
876.5
-4.6
70.8
8.1
4.9
21.4
8.1
25.4
66.6
13.1
19.7
53.5
19.7
18.3
2Q
1,037.6
14.9
78.5
7.6
1.9
22.3
8.1
20.6
68.7
13.8
20.1
54.9
2.1
18.8
3QE
1,018.7
8.5
73.2
7.2
-12.6
22.4
8.1
22.1
64.9
12.8
19.8
52.0
-5.4
17.8
4QE
1,109.5
31.8
80.8
7.3
3.3
22.7
8.2
21.2
71.1
14.5
20.4
56.6
1.3
19.4
3,602.9
9.2
307.9
8.5
-8.4
94.7
30.4
80.0
262.8
52.8
20.1
210.0
4.8
71.6
4,042.3
12.2
303.3
30.1
-1.5
88.7
32.4
89.2
271.3
54.3
20.0
217.1
3.3
74.3
56.0
103
8.4
6.6
1.8
14.8
62.1
111
7.7
5.4
2.3
14.0
62.0
110
7.5
4.3
3.2
12.0
62.0
110
8.0
6.0
2.0
14.4
54.5
111
9.2
7.8
1.4
26.2
60.5
109
7.9
5.6
2.3
13.8
29.5
18.9
3.5
52.8
31.7
25.0
3.6
60.8
30.2
23.1
3.5
56.9
34.9
23.0
4.3
62.3
128.3
73.3
28.9
230.5
126.3
90.0
14.8
231.2
Net Sales
Change (%)
EBITDA
% of Net Sales
Change (%)
Depreciation
Interest
Other Income
PBT
Tax
Rate (%)
Adj. PAT
Change (%)
Adj. EPS (INR)
Fx Rate (INR/USD)
54.2
55.5
54.2
54.2
Brent Price (USD/bbl)
109
110
110
114
RIL GRM
7.6
9.5
9.6
10.1
Singapore GRM
6.7
9.1
6.5
8.7
Premium/(disc) to Singapore
0.9
0.4
3.1
1.4
KG-D6 Gas Prodn (mmscmd)
33.0
28.5
24.0
19.2
Segmental EBIT Breakup (INRb)
Refining
21.5
35.4
36.2
35.2
Petrochemicals
17.6
17.4
19.4
19.0
E&P
9.7
8.7
5.9
4.6
Total
48.8
61.6
62.2
59.2
E: MOSL Estimates; Segmental EBIT includes non-interest other income
January 2014
FY13
C144
December 2013 Results Preview | Sector: Real Estate
Real Estate
Companies Covered
Realty index beats broader index in 3QFY14
DLF
Godrej Properties
Jaypee Infratech
Mahindra Lifespaces
Oberoi Realty
Phoenix Mills
BSE Realty Index has outperformed the broader index by 13% in 3QFY14, largely
due to factors like value buying on select stocks, relatively comforting monetary
policy, political expectations, along with a few favorable global macro
developments.
While core operations are yet to see a drastic improvement, near-to-medium
term risk perceptions have proved to be ameliorating sequentially during
3QFY14.
Operational strengths are improving due to rising discipline and conservativeness
of managements. But the recovery has been slow on account of headwinds and
re-appurtenance of concerns over approvals, demand slowdown etc.
Physical market trends not showing improvement, rather slowdown

concerns galore
Mumbai market is continuing with torpidity, with select instances of products
getting success on account of attractive positioning and pricing. IBREL's Sky Forest,
Sky, Lodha's Blue Moon (Central Mumbai), L&T's in Powai, Kalpataru's in
Goregaon, Shaporji's in Kandivali have garnered decent response with better
pricing and/or subvention scheme (10-20% discount to market). However,
broader market is still under tepid response. New provision of 20% allocation
for affordable housing in case of bigger projects may lead to further delay in
project planning and approvals.
NCR market has witnessed limited fresh launches, with major developers guiding
for demand contraction. Last major launches were Tata Housing's in Dwarka
Expressway (@INR11,000/sf), DLF Crest (@INR15,000/sf) in Phase V. Response to
Godrej Properties launch of Summit with 25:75 scheme, other upcoming launch
of IBREL and Mahindra Lifespaces are key to watch out.
Bangalore market continues to see strong demand in mid-income segment, albeit
there has been major slowdown in premium (>INR10m ticket size) projects.
While Prestige, being relatively better placed with mid-segment inventory, is
expected to maintain healthy pre-sales momentum, Sobha is likely to see a
deceleration in pre-sales run-rate due to high mix of premium projects.
Sobha Developers

CMP
(INR)
27.12.13
DLF
171
Godrej Properties
168
69
Jaypee Infratech
24
Mahindra Lifespace
401
Oberoi Realty
230
Phoenix Mills
229
Prestige Estates
166
Sobha Developers
311
Sector Aggregate
(INR Million)
Rating
Dec.13
Buy
Neutral
Buy
Buy
Buy
Buy
Buy
Buy
Buy
19,857
2,968
4,358
8,987
930
1,942
735
4,744
4,965
49,486
Sales
Var.
% YoY
51.6
11.4
31.6
-3.7
51.4
-32.1
6.1
-3.6
15.5
18.4
Var.
% QoQ
1.5
-3.2
-3.3
12.8
-3.5
2.8
4.0
-0.2
-8.2
1.4
Dec.13
6,851
772
1,314
4,059
128
1,146
493
1,233
1,390
17,385
EBITDA
Var.
% YoY
687.2
2.7
0.0
-3.9
41.8
-32.9
4.0
-13.4
1.2
42.2
Var.
% QoQ
15.2
-4.5
-22.1
14.6
4.4
33.1
3.0
3.9
-3.0
8.2
Net Profit
Var.
% YoY
1,130
-60.3
390
9.9
623
19.2
1,397
-9.9
174
28.5
867
-35.5
359
5.2
777
-15.5
535
1.8
6,253
-26.8
Dec.13
Var.
% QoQ
12.9
13.8
-23.3
34.6
-33.4
35.2
-1.6
0.2
-5.4
7.7
Sandipan Pal (Sandipan.Pal@MotilalOswal.com)

January 2014
C145

Sensex Index
MOSL Real Estate Index
135
120
105
Dec-13
Nov-13
Oct-13
Sep-13
90
Prefer companies poised in favorable operating cycle

We prefer companies which have reasonably cleared their older inventories and
are riding on new and strong operating cycles, led by fresh launches, robust presales and favorable market outlook.
With downside risk to realizations and volumes hereon, the cash flow certainty
lies with players with strong FY12-14 pre-sales and reasonably strong balance
sheet to carry forward execution.
While the asset valuations (discount to NAV) are attractive, the relative strengths
in earnings visibility render comforts to select companies. We prefer Sobha, DLF,
Prestige, and IBREL.

Sensex Index
MOSL Real Estate Index
115
Key expectations
100
85
70
Dec-13
Sep-13
Jun-13
Mar-13
Dec-12
55
In 2QFY14 Real estate universe is expected to post a revenue growth of 18% YoY
(up +1.4% QoQ), EBITDA growth of 42.2% YoY (down 8.2% QoQ) and PAT de-growth
of 26.8% YoY (+7.7% QoQ). We expect the Operating cash flow (OCF) and FCFE to
improve YoY for across most developers.
Status of planned launches and approvals

Demand trend and pricing stability in so-far performing markets (Bangalore,
Chennai, Pune).
Scale-up in execution reflected in improvement in revenue booking or cash
collections (DLF, UT).
Leasing velocity and managements' outlook in commercial verticals (PEPL, Oberoi,
DLF).
New acquisitions and visibility on the same (Oberoi, MILFE, Godrej).
Cash flow and trend in leverage (DLF, PHNX, Godrej).
Quarterly Trend in Presales value (INR b)

Presales (INR b)
NCR Centric developers
DLF
Unitech
Anantraj
JPIN
Mumbai Centric developers
IBREL
HDIL
ORL
Bangalore Centric developers
Sobha
PEPL
Purva
Diversified
MAHLIFE
GPL
January 2014
FY11
149.0
59.4
43.2
5.4
41.0
79.1
48.4
20.7
10.1
31.4
10.9
13.8
6.6
16.9
7.0
10.0
1Q
27.9
11.1
10.2
1.0
5.7
8.3
3.8
1.9
2.6
6.5
3.0
2.1
1.4
4.0
1.7
2.3
2Q
24.5
6.3
10.7
1.6
5.8
14.9
4.9
7.7
2.3
13.9
4.9
7.8
1.2
2.9
0.8
2.2
FY12
3Q
37.7
11.1
9.4
0.9
16.4
6.9
4.5
0.6
1.8
10.8
4.5
4.7
1.6
5.0
3.0
2.0
FY13
4Q
46.7
24.3
7.8
3.6
11.0
9.6
6.3
0.5
2.8
13.9
5.0
6.0
2.9
6.9
0.6
6.4
1Q
23.9
6.0
7.0
1.6
9.3
9.1
6.0
1.0
2.1
18.2
4.8
10.0
3.4
4.8
0.5
4.3
2Q
28.8
6.3
8.4
0.7
13.4
9.3
6.1
1.0
2.2
15.9
5.3
8.2
2.4
7.9
0.9
7.0
3Q
23.8
12.5
6.8
0.5
4.0
14.2
12.0
2.2
16.5
5.3
7.5
3.7
5.2
1.5
3.7
4Q
25.4
13.4
5.9
0.4
5.7
8.1
5.9
2.2
19.2
6.8
5.4
7.0
6.3
1.5
4.8
Source:
FY14
1Q
2Q
34.0
12.3
24.3
7.3
4.5
2.7
1.2
0.5
4.0
1.8
19.3
8.3
15.9
6.4
2.5
1.1
0.9
0.8
18.8
20.6
6.0
6.3
10.2
10.7
2.6
3.6
4.9
3.4
0.7
0.7
4.2
2.7
Company, MOSL
C146
Bank loan to developers stood at INR1437b as on Sep-13
Quarterly trend in launch and presales
Soruce: RBI, MOSL
Top 6 cities launch, sales trend (value)
Source: Liases Foras, MOSL
Inventory position (months)
Launch trend (msf) key cities highlight
Pre-sales volume (msf) across cities highlight
Sharp upswing in Bangalore (9M launch > CY12

annual launch)
NCR and Mumbai (MMR) flat YoY
Pan India shows a YoY growth in new launches
Launch trend (msf) across key cities
January 2014
Mumbai (MMR) flattish, while NCR volume plunged

sharply
Bangalore (-20% YoY) and Pune volume declined,
albeit Chennai posted a growth
Overall Pan India witnessed 11% YoY decline in
volume in 9MCY13
Pre-sales volume (msf) across cities highlight
C147
Pre-sales value (INR b) across cities highlight

Lower volume sales partially offset by better value
sales
The trend is evident in MMR (a growth in value),
NCR, Bangalore (lower decline than in volume
terms)
Pan India suggests only 2% YoY decline (v/s 11% in
volume terms)
Pre-sales value (INR b) across cities highlight
NCR has seen a decline in transaction price. There has

been a rising mix of Noida and Gr. Noida sales.
Price trend in NCR
MMR prices are still high but time correction is on.

However, there has been a proliferation of 20:80
schemes across markets. Central Mumbai's certain
launches (IBREL, Lodha) have seen decent response.
Price trend in MMR (Mumbai)
Bangalore witnessed the sharpest rise. This is partially

due to higher mix of premium-end products from
developers, encouraged by strong uptrend in pre-sales
in past couple of years. This could be a test to
affordability going forward.
Price trend in Bangalore
January 2014
C148
Trends in commercial landscape across cities:

9MCY13 pan India demand (20msf) marginally higher than supply (18 months). However, in absolute terms, demand is still weak
and de-grew 5% YoY (over 9MCY12). CY12 was 21% YoY de-growth over CY11. Bangalore remains the best performing market, with
consistently higher (than MMR, NCR) volume and lowest vacancy level. NCR volume moderated (-26% YoY), but Mumbai posted a
strong growth (+34% YoY). New supply in Mumbai almost halved, thus improving vacancy level.
4QCY11
1QCY12
2QCY12
3QCY12
4QCY12
1QCY13
2QCY13
3QCY13
2.0
1.0
0.8
0.6
0.3
4.7
1.0
2.7
1.7
0.3
0.3
6.0
0.7
0.5
0.7
0.6
0.2
0.3
0.2
3.1
1.7
2.7
2.3
0.6
0.6
1.0
0.2
9.1
1.1
1.6
0.7
1.2
0.5
0.1
0.5
5.7
1.3
1.5
0.7
1.5
1.0
0.1
0.2
6.3
0.8
1.0
0.6
1.0
0.8
0.3
4.5
1.3
0.1
2.8
1.6
0.3
1.1
0.1
7.2
1.6
1.2
3.0
1.2
0.5
0.4
0.5
8.4
0.9
1.1
3.6
0.7
0.5
0.5
0.2
7.5
1.7
0.4
1.8
0.7
0.3
0.5
0.5
5.9
1.2
0.9
3.0
0.8
0.4
0.8
0.5
7.6
1.1
1.2
1.6
1.4
0.4
0.9
0.3
6.8
0.7
1.3
1.0
0.9
0.3
0.5
0.1
4.9
1.2
1.0
4.2
0.9
0.4
0.3
0.2
8.2
0.9
0.9
2.9
1.1
0.6
0.3
0.2
6.9
31
23
16
25
26
11
19
22
31
23
15
24
26
10
18
22
30
23
14
24
25
10
15
22
30
23
13
23
25
10
14
21
31
22
14
20
25
8
17
20
32
22
13
22
24
11
18
21
31
22
13
20
22
11
18
20
32
21
14
18
21
13
18
20
Source: DTZ
Supply (msf)
NCR
Mumbai
Bangalore
Chennai
Pune
Hyderabad
Kolkata
India
Absorption (msf)
NCR
Mumbai
Bangalore
Chennai
Pune
Hyderabad
Kolkata
India
Vacancy (%)
NCR
Mumbai
Bangalore
Chennai
Pune
Hyderabad
Kolkata
India
CMP (INR)
27.12.13
Real Estate
DLF
Godrej Properties
Indiabulls Real Est.
Jaypee Infratech
Mahindra Lifespace
Oberoi Realty
Phoenix Mills
Prestige Estates
Sobha Developers
Sector Aggregate
January 2014
171
168
69
24
401
230
229
166
311
Rating
EPS (INR)
FY13 FY14E FY15E
P/E (x)
FY13 FY14E FY15E
EV/EBITDA (x)
FY13 FY14E FY15E
RoE (%)
FY13 FY14E FY15E
Buy
Neutral
Buy
Buy
Buy
Buy
Buy
Buy
Buy
4.2
8.9
4.1
5.0
34.6
15.4
5.8
8.2
22.2
40.9
18.9
16.9
4.8
11.6
15.0
39.4
20.4
14.1
20.8
23.9
19.7
7.6
9.0
9.8
12.0
22.8
13.4
8.6
16.0
2.6
9.6
2.5
11.6
10.9
12.8
4.8
10.4
10.5
5.4
3.2
8.2
7.8
5.3
26.9
13.0
5.8
9.6
23.3
5.0
9.9
12.6
4.8
28.5
18.1
10.8
12.4
28.8
53.4
20.5
8.9
4.5
14.9
17.7
39.2
17.3
13.4
20.6
34.5
16.8
5.5
5.0
14.1
12.7
21.2
13.4
10.8
16.0
17.0
16.4
7.1
5.7
13.3
11.4
11.5
11.7
7.5
11.7
14.0
11.9
5.4
5.9
11.4
8.1
8.5
8.9
6.5
9.8
2.0
8.8
4.7
11.3
7.9
9.8
4.6
11.1
10.3
5.0
3.0
8.4
7.0
9.4
7.8
12.5
8.1
12.7
11.9
6.2
C149
DLF
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
DLFU IN
1,781.0
305 / 5
289 / 120
12 / -15 / -34

Y/E March
Net Sales
EBITDA
Adj PAT
EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2013 2014E 2015E

77.7 82.7 92.1
26.3 29.4 35.0
7.1
5.7
8.8
4.2
3.2
5.0
-40.8 -23.5 54.9
152.9 157.2 159.9
2.6
2.0
3.0
6.0
5.9
6.7
55.8 73.0 47.1
40.9
1.1
19.3
1.2
53.4
1.1
16.1
1.2
34.5
1.1
13.7
1.2
2016E
99.1
38.6
12.3
6.9
39.2
164.4
4.0
7.5
33.9
24.8
1.0
12.0
1.2
CMP: INR171
Buy
We expect DLF to post a sequentially flattish performance in 3QFY14,

as there has been no new launch and no major project expected to
cross the revenue recognition threshold.
3QFY14 revenue is seen at INR19.9b (flat QoQ, 52% YoY against the
one-off 3QFY13), EBITDA at INR6.9b (estimated margin of 35%), and
PAT at INR1.1b (+13% QoQ, -60% YoY). Weak profitability to continue
for a few more quarters, as many of its recent launches with stronger
margins are likely to cross the threshold 1QFY15 onwards.
Expectation of sequential improvement in margin is partially
attributable to possible exclusion of Primerica insurance, which was
earlier contributing losses (deal with DHFL concluded in Dec-13).
In the absence of any new launch, we expect pre-sales run-rate to
decline QoQ to INR7b (v/s INR7.3b in 2Q). Expect cash flow situation
to deteriorate QoQ, as 2QFY14 had seen a one-off inflow of INR4b+
under the subvention scheme at Crest project.
In 2QFY14 (ex-dividend and Crest one-offs), DLF posted marginally
positive FCFE. Thus, with expectation of sequential worse-off in FCFE
in 3Q and receipt of balance payment in DHFL-Primerica deal, leverage
is likely to remain largely flattish-to-marginally down QoQ.
DLF trades at 34.5x FY15E EPS, 1.1x FY15E BV and 36% discount to our
NAV estimate of INR267. Maintain Buy with a target price of INR213.
Progress in launch plan and revised management guidance
Trend in operating cash flow after a good 2QFY14.
Timeline for Aman Resort and other divestment plans to reach deleveraging target.
(INR Million)
Y/E March
Sales
Change (%)
EBITDA
Change (%)
As % of Sales
Depreciation
Interest
Other Income
PBT
Tax
Reported PAT Pre MI
Adj. PAT
Change (%)
Presales (msf)
Presales (INR b)
Realization (INR/sf)
Leasing (msf)
E: MOSL Estimates
January 2014
FY13
1Q
21,977
(10.1)
10,670
-4.0
48.6
1,786
6,226
1,311
3,970
1,137
29
2,833
2,928
(18.3)
1.3
6.0
4,638
0.3
2Q
20,395
-19.5
7,464
-36.4
36.6
1,837
5,224
1,173
1,575
394
25.0
1,271
1,385
(62.8)
1.6
6.3
3,914
0.2
3Q
13,100
-35.6
870
-89.4
6.6
2,479
5,809
9,812
2,395
-84
-3.5
2,442
2,848
10.2
2.3
12.5
5,435
0.4
FY14
4Q
22,256
-15.0
7,258
-9.0
32.6
1,861
5,882
932
118
-196
-165.5
314
-42
(102.0)
2.0
13.4
6,679
0.2
1Q
23,141
5.3
9,156
-14.2
39.6
1,782
5,914
1,391
2,909
913
31.4
1,996
1,812
(38.1)
1.8
24.3
13,425
0.4
2Q
19,561
-4.1
5,948
-20.3
30.4
1,660
6,091
2,685
1,680
855
50.9
825
1,001
(27.8)
0.9
7.3
8,022
0.6
3QE
19,857
51.6
6,851
687.2
35
1,697
5,941
2,059
1,317
356
27
962
1,130
(60.3)
0.9
7.0
7,611
0.4
4QE
20,178
-9.3
7,424
2.3
37
1,718
5,913
2,445
2,238
646
29
1,592
1,763
LTP
2.6
19.6
7,496
0.4
FY13
FY14E
77,728
-19.3
26,262
-32.7
33.8
7,962
23,140
13,229
8,059
1,251
15.5
6,808
7,119
(40.7)
7.2
38.2
5,299
1.2
82,737
6.4
29,378
11.9
35.5
6,856
23,859
8,580
8,144
2,769
34.0
5,375
5,705
(19.9)
6.2
58.1
9,309
1.8
C150
Godrej Properties
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
GPL IN
199.2
33 / 1
310 / 159
-6 / -45 / -53
CMP: INR168

Y/E March
Net Sales
EBITDA
NP
EPS (INR)
EPS Gr. (%)
BV/Sh (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2013 2014E 2015E

10.4 11.4 15.1
2.9
3.0
4.3
1.4
1.6
2.0
8.9
8.2
9.9
41.3
-8.0 21.9
91.6 113.9 122.7
9.6
8.8
8.4
8.6
9.2
9.4
13.2 14.3 11.8
18.9
1.8
9.8
1.2
20.5
1.5
10.8
1.2
2016E
18.3
5.5
2.5
12.6
26.6
268.2
9.8
10.9
9.3
16.8
1.4
8.0
1.2
13.3
0.6
6.5
1.2
Neutral
Godrej Properties 3QFY14 revenue to grow 11% YoY to ~INR3b, EBITDA

is expected at INR772m (margin at 26%, flat QoQ) and PAT to grow
9.9% YoY to INR390m.
Launch has been delayed due to approval process, albeit a few of its
planned launches in Mumbai have been getting good enquiry as per
our recent interactions with the management.
We expect pre-sales to remain muted, with no major new launches
and moderation in demand in ongoing markets at Ahmedabad, NCR
and Pune. Negative FCFE is expected to increase the gearing from
0.6x.
To boost demand, company has come up with various attractive offers,
including 25:75 scheme in projects like Summit (Gurgaon),
Ahmedabad, Kolkata, Mumbai and Pune.
The stock trades at 17% discount to SOTP value of INR199/share, 16.8x
FY15E EPS and 1.4x FY15E BV. Maintain Neutral.

Progress in approvals in planned launches and demand momentum
in major markets.
Leasing progress in BKC and other commercial projects.
Trend in cash flow and leverage.
(INR Million)
Y/E March
Total Revenue
Change (%)
EBITDA
Change (%)
As of % Sales
Depreciation
Interest
Other Income
PBT
Tax
PAT before MI
Reported PAT
Change (%)
Presales (msf)**
Presales (INR b)
Realizations (INR/sf)
E MOSL Estimates; ** GPL's share
January 2014
FY13
1Q
2,261
73.1
403
100
17.8
10
6
67
454
196
43.2
258
172
70.6
0.7
4.3
6,100
2Q
2,327
66.9
719
124
30.9
11
7
4
705
215
30.6
489
326
67.5
1.1
7.0
6,179
3Q
2,664
77.9
751
181
28.2
11
8
14
746
233
31.3
513
355
24.0
0.6
3.7
6,687
FY14
4Q
3,119
-11.0
984
25
31.6
12
9
20
983
271
27.5
713
532
33.7
0.5
4.8
9,391
1Q
2,016
-10.9
406
1
20.1
12
8
427
812
299
36.8
514
395
130.1
0.5
4.2
8,715
2Q
3,065
31.7
808
12
26.4
14
8
139
925
319
34.5
606
343
5.1
0.4
2.7
6,178
3QE
2,968
11.4
772
2.7
26.0
15
8
70
819
254
31.0
565
390
9.9
0.5
3.2
6,400
4QE
3,367
8.0
978
-1
29.0
20
9
53
1,001
302
30.2
699
497
-6.5
0.7
5.4
7,925
FY13
FY14E
10,371
34.7
2,858
80.9
27.6
44
30
104
2,889
916
31.7
1,973
1,384
41.3
2.9
19.8
6,822
11,415
10.1
2,963
3.7
26.0
62
34
689
3,557
1,174
33.0
2,383
1,625
17.3
2.1
15.6
7,385
C151

Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
IBREL IN
424.0
29 / 0
87 / 50
0 / 3 / -12

Y/E March
Net Sales
EBITDA
NP
EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div Yield (%)
2013 2014E 2015E

13.0 20.8 24.2
4.7
6.8
8.3
1.7
3.3
5.1
4.1
7.8 12.6
17.4 88.7 62.9
159.9 163.5 170.8
2.5
4.7
7.0
5.1
7.3
8.6
57.0 52.8 39.0
16.9
0.4
10.7
2.9
8.9
0.4
7.8
5.0
2016E
27.4
9.4
5.8
14.5
14.6
178.7
7.7
9.7
42.6
5.8
0.4
6.0
5.8
5.1
0.4
4.8
7.2
CMP: INR69
Buy
We expect revenue at INR4.3b (32% YoY), EBITDA at INR1.3b (flat YoY),

with margin of 30% and PAT of INR623m (+19% YoY). We have kept our
estimate of Blu crossing revenue threshold in 4QFY14 (leading to surge
in 4Q revenue), but with a chance of getting deferred to 1QFY15 - in
which case, we expect downgrade in 4QFY14E/FY14E estimates. We
await clarity on the same from management.
Post strong 1QFY14, due to lack of any major launch, we expect 3QFY14
pre-sales run-rate to witness flattish QoQ trend. However, expect cash
flow to remain steady due to execution progress, leading to decline
in net debt (missing in 2QFY14 due to PE exit).
IBREL trades at 40% discount to NAV estimate of INR125 and 5.8x FY15E
EPS and 0.4x FY14E BV. Maintain Buy with a target price of INR94.

Pre-sales in Central Mumbai projects (Blu and Sky).
Progress in planned launches in NCR, Chennai (delayed on
approvals).
Cash flow and leverage guidance.
Leasing at IPIT, which witnessed a few cancellations in 2QFY14.
Any management guidance on potential buyback.
(INR Million)
Y/E March
Sales
Change (%)
EBITDA
Change (%)
As % of Sales
Depreciation
Interest
Other Income
PBT
Tax
Rep. PAT (Pre Min. & associates)
Change (%)
Reported PAT
Change (%)
Presales (msf)
Presales (INR b)
E MOSL Estimates
January 2014
FY13
1Q
2,147
-14.3
791
52.9
36.9
52
439
72
372
85
22.8
287
-22.6
378
30
2Q
3,423
3.1
1,209
17.9
35.3
53
697
83
542
177
32.7
364
-5.1
322
-18.2
1.2
12.1
10,202
3Q
3,313
-7.1
1,314
27.4
39.7
44
660
200
810
309
38.2
501
22.6
523
25.3
1.0
12.0
12,193
FY14
4Q
4,123
-7.4
1,372
29.7
33.3
54
473
103
947
345
36.4
602
7.4
519
-7.5
0.7
5.9
8,153
1Q
5,083
136.8
1,467
85.4
28.9
55
491
165
1,087
385
35.4
702
144.4
726
92
1.6
15.9
10,205
2Q
4,506
31.6
1,687
39.5
37.4
46
526
201
1,316
452
34.4
863
136.9
812
152
0.7
6.4
9,333
3QE
4,358
31.6
1,314
0.0
30.2
46
600
165
833
250
30.0
583
16.4
623
19
0.9
6.8
8,000
4QE
6,806
65.1
2,338
70.4
34.4
68
774
159
1,656
576
34.8
1,080
79.3
1,127
117
1.0
8.4
8,126
FY13
FY14E
13,006
-6.5
4,686
21
36
204
2,269
457
2,671
916
34.3
1,742
5.1
1,742
5
2.9
30.0
10,370
20,754
59.6
6,807
45
33
215
2,391
690
4,891
1,663
34.0
3,288
88.7
3,288
89
4.1
38
9,086
C152
Jaypee Infratech
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
JPIN IN
1,388.9
33 / 1
59 / 14
19 / 4 / -64
CMP: INR24
We expect revenue at INR9b (-4% YoY), EBITDA at INR4.1b (-4%), margin

at 45% and PAT at INR1.4b (-10% YoY).
We have assumed INR3b of land revenue (from INR15b of divestment

concluded in 1QFY14, INR5.1b done till date), and INR360m of
Expressway revenue (v/s INR3,020m in 2QFY14).
Pre-sales momentum is expected to remain subdued due to weak

demand and no new launch at Parcel 3. Agra project is yet to overcome
clearence issue. We maintain FY14E pre-sales at INR14b (v/s 1HFY14
pre-sales of INR5.8b).
Weakening operations and high leverage level have been key

concerns. JPIN trades at 5x FY15E EPS, 0.5x FY14E BV. Maintain Buy.

Y/E March
Net Sales
EBITDA
Adj PAT
Adj EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2013 2014E 2015E

32.7 38.9 36.7
14.8 18.5 17.4
6.9
7.3
6.6
5.0
5.3
4.8
-46.2
5.1
-9.6
44.5 48.6 52.2
11.6 11.3
9.4
10.9 12.7 11.7
23.4 22.3 24.6
4.8
0.5
7.6
4.2
4.5
0.5
5.7
4.2
5.0
0.5
5.9
4.2
2016E
37.6
17.6
6.5
4.6
-2.2
55.6
8.6
11.1
25.2
5.1
0.4
5.7
4.2
Buy

Traffic growth and toll revenue trend in expressway.
Response to Parcel 3, Agra launches and overall market outlook.
Any further divestment plan and deleveraging.
(INR Million)
Y/E March
Sales
Change (%)
EBITDA
Change (%)
As of % Sales
Depreciation
Interest
Other Income
PBT
Tax
Reported PAT
Change (%)
Adj PAT
Change (%)
Presales (msf)
Presales (INR b)
E: MOSL Estimates
January 2014
FY13
1Q
6,783
9.9
2,721
-8.5
40.1
6
98
8
2,625
525
20.0
2,099
-11.7
2,099
-11.7
2.5
9.3
3,724
2Q
7,047
-1.5
3,584
-8.9
50.9
35
1,323
35
2,262
453
20.0
1,810
-41.7
1,810
-41.7
3.0
13.4
4,452
3Q
9,331
3.4
4,224
-15.0
45.3
54
2,259
27
1,939
388
20.0
1,551
-60.5
1,551
-60.5
1.2
4.3
3,563
FY14
4Q
9,582
4.1
4,238
-2.7
44.2
55
2,435
109
1,857
371
20.0
1,485
-57.5
1,485
-57.5
1.4
5.7
4,107
1Q
7,692
13.4
3,352
23.2
43.6
86
2,315
74
1,025
215
21.0
810
-61.4
810
-61.4
1.0
4.0
4,098
2Q
7,966
13.0
3,541
-1.2
44.4
67
2,212
51
1,313
275
21.0
1,038
-42.6
1,038
-42.6
0.5
1.8
3,600
3QE
8,987
-3.7
4,059
-3.9
45.2
80
2,300
90
1,769
371
21.0
1,397
-9.9
1,397
-9.9
1.0
3.5
3,500
4QE
14,257
48.8
7,500
77.0
52.6
99
2,373
106
5,134
1,079
21.0
4,055
173.1
4,055
173.1
1.4
4.7
3,490
FY13
Cons.
32,743
3.8
14,767
-10.5
45.1
149
6,115
179
8,682
1,737
20.0
6,945
-46.2
6,945
-46.2
8.1
32.7
4,037
FY14E
Cons.
38,902
18.8
18,451
24.9
47.4
332
9,200
321
9,241
1,941
21.0
7,300
5.1
7,300
5.1
3.8
14.0
3,663
C153
Mahindra Lifespaces
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
MLIFE IN
40.8
16 / 0
472 / 327
-1 / -12 / -12

Y/E March
Net Sales
EBITDA
Adj PAT
Adj EPS (INR)
EPS Growth (%)
BV/Share (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2013 2014E 2015E

7.4
7.3
7.6
2.4
2.0
2.4
1.4
1.1
1.2
34.6 26.9 28.5
18.7 -22.3
6.0
316.9 339.1 363.8
10.9
7.9
7.8
11.4
8.5
9.0
18.4 24.1 22.2
11.6
1.3
10.2
1.2
14.9
1.2
13.3
1.2
14.1
1.1
11.4
1.2
2016E
9.2
2.9
1.6
38.7
35.6
399.4
9.7
10.5
16.5
10.4
1.0
9.1
1.2
CMP: INR401
Mahindra Lifespaces' (MILFE) 3QFY14 standalone revenue is expected

to remain subdued at INR930m (flattish QoQ, albeit +51% YoY, due to
weak 3QFY13), margins at ~14%, EBITDA at INR128m (+41% YoY), while
PAT at INR174m (+28% YoY).
Ashvita III and Aqualily C (consol) are the key projects with expectation
of crossing the revenue threshold by 3QFY14.
In the absence of any major launches, we expect pre-sales to remain
subdued, with relative seasonal improvement and driven by Nagpur,
Hyderabad and Chennai projects. While launch pipeline, post recent
acquisitions, has been strong, it hinges on progress in approvals. We
estimate FY14E pre-sales at INR4.4b (v/s INR4.4b in FY13).
The stock trades at 14% discount to SOTP of INR455/share, 14.1x FY15E
EPS and 1.1x FY15E BV. Maintain Buy.

Progress in approvals in recent acquisitions.
Trend in gearing level.
Leasing progress in Jaipur DTA, and clarity on possible re-sizing.
Progress of land acquisition in North Chennai SEZ.

Y/E March
FY13
FY14
1Q
2Q
3Q
4Q
1Q
2Q
3QE
4QE
Sales
1,041
838
614
1,022
670
963
930
945
Change (%)
27.8
-10.6
-60.1
-27.0
-35.6
14.9
51.4
-7.5
EBITDA
319
151
91
172
93
123
128
160
As % of Sales
30.6
18.0
14.7
16.8
13.9
12.8
13.8
16.9
Change (%)
84.8
-41.7
-80.4
-46.1
-70.8
-18.4
41.8
-6.7
Depreciation
4
4
4
5
5
5
8
8
Interest
14
14
19
15
107
97
120
139
Other Income
134
301
133
140
237
382
240
242
PBT
434
433
200
292
218
402
240
256
Tax
141
119
64
60
60
141
66
78
32.5
27.5
31.0
20.5
27.6
35.0
27.5
30.5
Adj. PAT
293
314
136
232
158
261
174
178
Change (%)
71.5
-0.1
-65.7
-27.7
-46.2
-16.7
28.5
-23.5
Unaudited Consolidated (incl. MWC Projects)
Revenue
1,209
1,511
1,320
3,343
1,761
1,962
1,700
1,910
Change (%)
17.4
-3.8
-23.7
24.6
45.6
51.6
28.8
-42.9
PAT (pre-minority)
183
246
207
925
263
224
250
457
Change (%)
28.3
-22.7
-31.2
166.1
43.4
-10.0
20.8
-50.6
Revenue from MWCs*
168
673
706
2,322
1,090
999
770
966
Operational performance
Sales volume (msf)
0.2
0.2
0.4
0.4
0.2
0.2
0.3
0.4
Sales value (INR b)
0.5
0.9
1.5
1.5
0.7
0.7
1.0
1.9
3,250
4,110
3,969
3,974
4,300
4,500
4,000
4,428
E: MOSL Estimates; *Revenue outside Standalone is largely contributed by Mahindra World City (MWC) Chennai
January 2014
Buy
(INR Million)
FY13
FY14E
3,515
-25.0
731
20.8
-39.6
18
62
707
1,359
384
28.3
975
-18.9
3,508
-0.2
504
14.4
-31.0
30
463
1,100
1,111
345
31.0
767
-21.3
7,383
5.3
1,562
18.7
3,868
7,333
-0.7
1,193
-22.3
3,825
1.1
1.0
4.4
4.4
3,895
4,325
and Jaipur
C154
Oberoi Realty
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
OBER IN
328.2
76 / 1
328 / 154
20 / 8 / -31

Y/E March
Net Sales
EBITDA
Adj PAT
Adj EPS (INR)
EPS Growth (%)
BV/Share (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2013 2014E 2015E

10.5 10.8 13.4
6.1
6.0
8.3
5.0
4.3
5.9
15.4 13.0 18.1
9.1 -15.5 39.4
126.8 137.5 153.2
12.8
9.8 12.5
17.3 14.2 18.0
15.2 18.0 12.9
15.0
1.8
10.6
0.9
17.7
1.7
11.4
0.9
12.7
1.5
8.1
0.9
2016E
17.6
11.0
7.9
24.0
32.8
174.9
14.7
21.2
9.7
9.6
1.3
5.8
0.9
CMP: INR230
Buy
We expect another muted quarter to follow in 3QFY14, with subdued

pre-sales run-rate, possibly a marginally better contribution from
Esquire, as revival in execution from mid-2QFY14 should improve
buyers' perception.
Revenue is seen at INR1.9b (-32% YoY), EBITDA margin back to 59%
(after one-offs in 2Q) and EBITDA at INR1.1b (-33% YoY). We estimate
PAT of INR867m (-36% YoY).
Due to absence of any launch, declining pre-sales and customer
collections, we expect the cash balance to reduce further, depending
on the pace of execution in Esquire and Oasis.
With the recent run-up in stock price, management commentary would
be crucial on some of the elusive aspects like Oasis launch and hotel
deal (earlier guided for 4QFY14), Mulund verdict (as hearings are over),
any positives in Commerz II leasing, and any other possible launch
plan (JVLR, Goregaon phase III)
While management had earlier guided for Esquire crossing revenue
recognition threshold in 4QFY14, any deviation from the same would
lead to meaningful downgrade in 4QFY14E/FY14E P&L numbers.
The stock trades attractively at 12.7x FY15E EPS, 1.5x FY15E BV and at
13% discount to our NAV estimate of INR270. Buy with a TP of INR242.
Sales momentum in Esquire (Goregaon) and Grande (Andheri).
Visibility on new launches (Mulund/Phase III of Exquisite).
Clarity on Oasis launch and hotel tie-up.
Leasing visibility in Commerz II.
Visibility on change in usage at JVLR project.
Consolidated Quarterly Performance
(INR Million)
Y/E March
Total Revenue
Change (%)
EBITDA
Change (%)
As of % Sales
Depreciation
Interest
Other Income
PBT
Tax
Reported PAT
Change (%)
Presales (msf)
Presales (INR b)
E: MOSL Estimates
January 2014
FY13
1Q
1,999
24.2
1,139
26.1
57
70
1
309
1,376
368
26.8
1,008
-4.7
0.1
2.1
16,771
2Q
2,577
15.7
1,496
29.5
58
71
1
250
1,674
430
25.7
1,244
11.6
0.1
2.2
17,077
3Q
2,861
52.8
1,707
50.5
60
71
1
219
1,854
509
27.5
1,345
31.7
0.1
2.2
17,451
FY14
4Q
3,039
19.3
1,779
8.3
59
72
1
221
1,927
475
24.7
1,452
1.1
0.1
2.2
18,813
1Q
2,184
9.3
1,335
17.2
61
69
1
210
1,476
457
31.0
1,018
1.0
0.05
0.9
18,887
2Q
1,890
-26.7
861
-42.5
46
68
1
127
919
278
30.2
642
-48.4
0.04
0.8
20,844
3QE
1,942
-32.1
1,146
-32.9
59
88
1
200
1,257
390
31.0
867
-35.5
0.05
0.8
17,778
4QE
4,772
57.0
2,660
49.5
56
127
1
-6
2,525
791
31.3
1,734
19.4
0.12
2.6
20,876
FY13
FY14E
10,476
27.0
6,121
26.6
58.4
285
4
999
6,827
1,783
26.1
5,045
9.1
0.5
8.7
17,508
10,788
3.0
6,001
-2.0
56
352
0
531
6,176
1,916
31.0
4,260
-15.5
0.3
5.1
19,948
C155
Phoenix Mills
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
PHNX IN
144.8
33 / 1
293 / 185
-1 / -22 / -17

Y/E March
Net Sales
EBITDA
Adj PAT
EPS (INR)
EPS Growth (%)
BV/Share (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2013 2014E 2015E

4.7 12.8 17.1
2.6
5.8
7.7
0.8
0.8
1.6
5.8
5.8 10.8
-20.3
0.4 85.3
122.1 125.6 134.1
4.8
4.6
8.1
6.6 10.2 11.9
40.3 40.1 21.7
2016E
22.8
10.0
3.0
20.4
88.7
152.1
13.4
15.9
11.5
CMP: INR229
39.4
1.9
20.7
0.9
39.2
1.8
11.5
0.9
21.2
1.7
8.5
0.9
11.2
1.5
6.3
0.9
Buy
We expect High Street Phoenix's (HSP) 3QFY14 revenue at INR735m,

(6% YoY), EBITDA at INR493m (margin of 67%) and PAT of INR359m
(5.2% YoY). We expect rentals to post 15-16% YoY growth to ~INR564,
in line with growth in consumption. We model for 11% rental CAGR
over FY13-16E (v/s management expectation of 15% over FY13-18).
Hotel operations are expected to witness closure of new operator
soon. We expect 3QFY14 operation performance to improve QoQ, with
higher occupancy and F&B opening of Mekong, Libai and EXO Bar.
Pune, Bangalore and Chennai Market City malls have largely reached
threshold trading density. Incremental leasing are happening at 22.5x of average rentals. We expect Market city portfolio to continue
posting 8-10% QoQ growth in total rentals in 3QFY14.
With IL&FS loan, due to Kurla Market City stake increase, we expect
the net debt to increase by ~INR2b QoQ.
The stock trades at a PER of 21.2x FY15E EPS, 1.7x FY15E BV and 24%
discount to NAV of INR289. Buy with a target price of INR260.

Sales momentum in Phase II projects in Market City.
Progress in Pune and Bangalore Phase II residential launch, which
have been delayed till 4QFY14.
Progress on ramp-up in recently-commenced malls.
Improvement in operating cash flow, which can lead to de-leveraging.
Update on proposed stake purchases in market city projects.
(INR Million)
Y/E March
Sales
Change (%)
EBITDA
Change (%)
As % of Sales
Depreciation
Interest
Other Income
PBT
Tax
Reported PAT Pre MI
Change (%)
Adj. PAT
Change (%)
E: MOSL Estimates
January 2014
FY13
1Q
626
17.0
394
19.3
63
67
58
143
413
107
26
306
12.4
306
12.4
2Q
665
23.4
438
31.4
66
69
72
156
454
123
27
330
38.2
330
38.2
FY14
3Q
693
20.1
474
27.0
68
69
70
126
461
120
26
341
26.9
341
26.9
4Q
722
20.3
479
31.8
66
71
66
140
483
122
25
361
32.2
361
32.2
1Q
698
11.5
475
20.4
68
65
72
215
553
135
24
418
36.7
418
36.7
2Q
707
6.4
479
9.2
68
65
97
172
488
123
25
365
10.6
365
10.6
3QE
735
6.1
493
4.0
67
69
100
155
479
120
25
359
5.2
359
5.2
4QE
801
10.9
525
9.6
66
74
101
157
507
129
25
378
4.6
378
4.6
FY13
Cons.
4,699
19.1
2,632
24.5
56.0
474
1,430
521
1,248
428
34.3
813
-5.9
842
-20.3
FY14E
Cons.
12,778
171.9
5,796
120.2
45.4
1,169
3,773
510
1,364
450
33.0
914
12.4
845
0.4
C156

Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
PEPL IN
350.0
58 / 1
195 / 105
9 / -1 / -16
CMP: INR166

Y/E March
Net Sales
EBITDA
Adj PAT
Adj EPS (INR)
EPS Growth (%)
BV/Share (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2013 2014E 2015E

19.5 24.7 30.9
5.8
7.1
9.3
2.9
3.4
4.3
8.2
9.6 12.4
246.2 17.9 28.8
78.4 86.6 97.6
10.4 11.1 12.7
11.7 11.9 14.1
17.2 14.6 11.3
20.4
2.1
13.6
0.7
17.3
1.9
11.7
0.7
2016E
35.9
11.0
5.6
16.0
29.2
112.2
14.3
15.6
8.6
13.4
1.7
8.9
0.7
10.4
1.5
7.3
0.7
Buy
We expect P&L to maintain stability, with INR4.7b of revenue booking

(-4% YoY) and margins of 26%, translating into EBITDA of INR1.2b
(-13% YoY), and PAT of INR777m (-16% YoY).
Garden Bay and Philadelphia are two projects expected to cross the
revenue booking threshold in 3Q, with a meaningful number of
threshold crossings slated in 4QFY14.
PEPL is likely to maintain its pre-sales strength in 3QFY14, with
expected bookings of ~INR10b. Soft launch of phase I of Lakeside
Habitat (@INR4,750/sf for apartment and @INR7,500/sf for villas) has
received good initial response.
Malls at Hyderabad and Mangalore will be operational in Mar-14, while
Hotel Aloft will be by Feb-14. There has been no major leasing in the
completed Polygon. Hence, we expect a rather stable rental run-rate
in 3QFY14, with possible improvement of INR30-50m from further
stabilization of Vijaya Mall.
The stock trades at 13.4x FY15E EPS, 1.7x FY15E BV and at 21% discount
to our NAV estimate of INR196. Buy with a target price of INR186.

Outlook of Bangalore residential market and leasing momentum.
Execution progress in ongoing projects, collections and movements
of debtors.
Cash flow dynamics, land acquisition and debt movements.
(INR Million)
Y/E March
Total Revenue
Change (%)
EBITDA
Change (%)
As of % Sales
Depreciation
Interest
Other Income
PBT
Tax
Reported PAT
Adj PAT
Change (%)
Presales (msf)
Presales (INR b)
Leasing (msf)
E: MOSL Estimates
January 2014
FY13
1Q
2,192
-12
704
2.1
32.1
77
240
272
659
166
25.2
493
493
35.3
2.0
10.1
4,953
0.06
2Q
2,414
88.5
725
47.2
30.0
83
191
195
647
190
29.3
457
457
73.9
1.6
8.2
5,037
0.07
3Q
4,921
195
1,424
184.1
28.9
83
209
195
1,328
407
30.7
920
920
227.9
1.4
7.5
5,236
0.24
FY14
4Q
5,597
177
1,321
92.5
23.6
87
258
278
1,253
363
28.9
890
890
132.6
0.9
5.4
6,085
0.08
1Q
4,983
127
1,289
83.2
25.9
80
257
310
1,263
396
31.4
867
867
75.8
1.8
10.2
5,779
0.16
2Q
4,753
97
1,187
63.7
25.0
83
265
288
1,126
350
31.1
776
776
69.9
1.8
10.7
5,839
0.48
3QE
4,744
-3.6
1,233
-13.4
26.0
85
269
247
1,127
349
31.0
777
777
-15.5
1.8
9.8
5,417
0.25
4QE
5,708
2
1,528
15.7
26.8
87
285
229
1,385
424
30.6
961
961
8.0
1.3
7.5
5,561
0.21
FY13
Cons.
19,476
85.1
5,791
95.2
30
682
1,489
636
4,256
1,314
30.9
2,941
2,860
246.2
6.0
31.2
5,212
0.5
FY14E
Cons.
24,684
26.7
7,111
22.8
29
834
1,787
617
5,106
1,583
31.0
3,523
3,373
17.9
6.7
38.1
5,655
1.1
C157
Sobha Developers
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
SOBHA IN
98.1
31 / 0
472 / 214
-8 / -21 / -28

Y/E March
Net Sales
EBITDA
Adj PAT
EPS (INR)
EPS Growth (%)
BV/Share (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
CMP: INR311
2013 2014E 2015E

18.6 20.7 23.7
5.5
5.8
6.8
2.2
2.3
2.8
22.2 23.3 28.8
5.5
5.0 23.8
217.9 231.8 251.2
10.5 10.3 11.9
14.5 14.3 15.8
31.6 34.4 27.8
2016E
29.9
8.5
3.9
39.9
38.7
281.8
15.0
18.8
20.0
14.1
1.4
7.9
2.2
13.4
1.3
7.5
2.6
10.8
1.2
6.5
2.6
7.8
1.1
5.1
2.6
Buy
We expect a weaker operational quarter for Sobha in 3QFY14, with

sequential deterioration in pre-sales run-rate on account of higher
inventory in premium ticket size projects which are seeing a slowdown
in Bangalore currently.
Revenue is expected to post 16% YoY growth to INR5b, EBITDA at
INR1.4b (+1% YoY), with margins of 28%, while PAT is seen at INR535m
(+2% YoY).
There has been no fresh launch from the guided pipeline. However, it
has entered into a JDA with Lakshmi Machine Works (LMW) Ltd for
4.76 acres of land at Coimbatore. The indicative saleable area for the
project would be ~0.33msf, with Sobha having 70% area sharing. Given
most of the approvals were already in place, the project was soft
launched in the name of Elan at ~INR5,200/sf, which may increase to
INR5,400/sf during the formal launch.
Given prevailing weakness in premium product's saleability, Sobha's
management is revisiting its launch plan, with greater focus on medium
segment projects. However, its actual launch may be still a couple of
months away, considering the approval timeline, which may pose a
threat to its full year guidance. We have cut FY14E pre-sales estimates
by 8% to INR23.6b.
The stock trades attractively at 10.8x FY15E EPS, 1.2x FY15E BV and at
37% discount to our NAV estimate of INR480. Buy with a TP of INR410.

Outlook of Bangalore residential market.
Management's revised launch plan and guidance.
Execution progress in ongoing projects, collections.
Land acquisition, debt movements and commercial capex.
(INR Million)
Y/E March
Sales
Change (%)
EBITDA
Margin (%)
Depreciation
Interest
Other Income
PBT
Tax
Net PAT
Reported PAT
Change (%)
Presales (msf)
Presales (INR b)
E: MOSL Estimates
January 2014
FY13
1Q
4,332
56
1,198
28
140
377
16
697
247
35
450
450
69
0.8
4.8
5,737
2Q
4,148
41
1,285
31
141
443
14
715
214
30
501
501
42
0.9
5.3
5,586
3Q
4,298
37
1,374
32
153
439
15
797
271
34
526
526
4
0.9
5.3
5,911
FY14
4Q
5,867
12
1,626
28
160
446
11
1,031
336
33
696
696
-29
1.1
6.8
6,259
1Q
4,616
7
1,390
30
165
396
14
843
342
41
501
501
11
0.9
6.0
6,548
2Q
5,408
30
1,433
26.5
172
434
37
864
298
34
566
566
13
1.0
6.3
6,326
3QE
4,965
16
1,390
28.0
177
440
20
793
258
33
535
535
2
0.7
5.0
6,784
4QE
5,698
-3
1,623
28.5
177
453
15
1,008
330
33
679
679
-2
1.1
6.2
5,915
FY13
FY14E
18,645
32
5,483
29.4
594
1,705
55
3,239
1,068
33
2,171
2,172
5
3.8
22.2
5,891
20,687
11
5,836
28.2
691
1,723
86
3,508
1,228
35
2,280
2,281
5
3.7
23.6
6,356
C158
December 2013 Results Preview | Sector: Retail
Retail
Companies Covered
We expect our Retail universe (excluding Future Retail, which has undergone
restructuring) to post 6.4% sales growth, 16.5% EBITDA growth and 4.6% PAT growth.
Titan's subdued performance in the Jewelry business, moderation in same store sales
(SSS) for Jubilant and continuation of healthy 8-10% SSS growth for traditional retailers
would be the highlights of 3QFY14, in our view.
Future Retail
Jubilant Foodworks
Shoppers Stop
Titan Company
Consumer sentiment mixed; Jewelry, QSR bear the brunt

In sharp contrast to 1HFY14, specialty retail segments like Jewelry and QSR are bearing
the brunt of muted consumer sentiment and weak macro factors. However, traditional
retailers should do well, as segments such as Apparel, Footwear, Bags and Accessories
have seen improvement. Channel checks suggest good pick-up in the latter part of
December (especially post Christmas), backed by incentives/discounts and activations
by retailers. Jewelry retailers are likely to post lackluster numbers, as the festive and
wedding season sales were sub-par. Our discussions with various jewelers suggest
15-20% industry-wide decline in festive season sales. We expect Jubilant Foodworks
to post another muted quarter, as discretionary spending has not yet revived, given
the backdrop of sticky food inflation and its impact on consumer wallets.
Aggressive space expansion

Amidst the challenging retail spending environment, we note that space expansion
has continued unabated. Shoppers Stop opened four stores during the quarter while
we expect Jubilant to have opened ~40 stores (in line with its annual guidance of 135
store openings). Titan has also guided for unchanged expansion plans (100ksf in FY14),
notwithstanding the near-term demand and regulatory challenges.
Regulatory challenges in Jewelry; media speculation around roll-back

Regulatory challenges are currently overshadowing the fundamentals (weak demand,
gold price correction, etc). Supply crunch led widening of gold premium is creating
competitive disadvantage for branded players. Titan is yet to receive approval for
higher hedging limits/hedging on overseas exchanges. Our channel checks with
Jewelers suggest significant increase in smuggled gold. Recent media articles suggest
that the government/regulators are mulling roll-back of restrictive measures. While
the timing/quantum of such measures is unfathomable, any softening in regulatory
stance will aid branded players, in our view. 3QFY14 also witnessed the first ever FDI
application in multi-brand retail. Tesco has proposed to buy 50% stake in Trent.
Future Retail
Jubilant Foodworks
Shopper's Stop
Titan Company
Sector Aggregate
CMP
(INR)
27.12.13
74
1,257
416
229
(INR Million)
Rating
Dec.13
UR
Sell
Neutral
Neutral
24,560
5,007
7,141
30,127
66,835
Sales
Var.
% YoY
-22.5
30.0
18.2
1.0
-6.4
Var.
% QoQ
6.0
14.7
-1.5
29.4
15.1
EBITDA
Dec.13
Var.
% YoY
2,112
-24.0
801
19.2
536
18.3
2,862
15.5
6,311
-1.1
Var.
% QoQ
3.0
22.7
34.7
9.4
10.4
Net Profit
Dec.13
Var.
% YoY
-77
PL
412
9.3
226
32.5
2,066
1.3
2,628
-0.1
Var.
% QoQ
Loss
24.0
128.4
10.7
18.5
Gautam Duggad (Gautam.Duggad@MotilalOswal.com)

January 2014
C159
Retail becoming an event-based play in the short term

Slowdown in discretionary consumption and continued challenging macro backdrop
keeps us cautious on the Retail sector. We believe stock performance is now also
contingent upon certain events, e.g. Titan on regulatory softening, Shoppers Stop on
potential tie-up with MNC retailer. Relatively, we still prefer Titan, as we believe it is
a long-term play on aspiration-led lifestyle consumption, which in turn is driven by
favorable demographics. Jubilant's valuations deter us from turning constructive at
this stage, despite its attractive long-term prospects in a growing QSR space.
Shoppers Stop: Double-digit LTL growth should sustain
Gold prices down 6.3% YoY and 9% QoQ
Jubilant Foodworks' SSS growth has sharply decelerated
Sens ex Index
MOSL Retai l Index
114
110
120
100
80
60
40
106
102
Dec-13
Sep-13
Jun-13
Mar-13
Dec-13
Nov-13
Oct-13
Sep-13
Dec-12
20
0
98
January 2014
Sens ex Index
MOSL Reta i l Index
C160
Area addition plans on track

Shoppers Stop: Four stores added in 3QFY14
Jubilant Foodworks: Expect addition of 40 stores in 3QFY14
CMP (INR)
27.12.13
Retail
Jubi. Foodworks
Shopper's Stop
Titan Company
Sector Aggregate
January 2014
1,257
416
229
Rating
EPS (INR)
FY13 FY14E FY15E
P/E (x)
FY13 FY14E FY15E
EV/EBITDA (x)
FY13 FY14E FY15E
RoE (%)
FY13 FY14E FY15E
Sell
Neutral
Neutral
20.9
4.9
8.2
60.1
85.7
28.0
35.5
32.3
27.1
21.4
23.8
31.2
5.9
42.5
29.3
23.2
7.0
8.4
31.1
9.7
9.6
54.1
59.7
27.2
33.5
40.4
42.9
23.8
28.2
27.4
21.7
19.5
21.3
19.9
17.4
16.3
17.2
25.7
7.9
30.2
25.2
25.6
10.1
27.8
24.4
C161
Future Retail
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
FRL IN
231.6
17 / 0
276 / 63
1 / -29 / -78

Y/E December
2010 2011 2012*
Sales
89.3 110.1 180.2
EBITDA
8.2
9.6 16.1
Adj. PAT
1.7
1.9
0.7
Adj. EPS (INR)
8.2
8.7
3.1
EPS Gr. (%)
25.8
7.1 -64.3
* 18 months, 2013 is calendar year
2013E
125.5
10.8
-0.03
-0.1
-103.8
CMP: INR74
Under Review
For 4QCY13, reported results will include the numbers of only Future
Retail. The base quarter numbers included Pantaloon, Brand Factory
and Central. Hence, the quarterly numbers will not be comparable on
a like-to-like basis.
We expect Future Retail to report sales of INR24.6b.
In the Value segment, SSS growth would be 8%.
We estimate EBITDA at INR2.1b and EBITDA margin at 8.5%.
We expect interest cost of INR1.5b, flat QoQ, but down 5% YoY due to
debt reduction post de-leveraging deals.
We expect loss of INR50m at the PAT level.
Our stock recommendation is Under Review.

SSS performance - commentary on consumer demand.
Progress on debt reduction and inventory optimization.
Quarterly Performance: Core Retailing
(INR Million)
Y/E June
Net Sales
YoY Change (%)
Total Exp
EBITDA
Growth (%)
Margins (%)
Depreciation
Interest
Other Income
PBT
Tax
Rate (%)
Adjusted PAT
E: MOSL Estimates
January 2014
FY12
1Q
29,106
12.8
26,583
2,523
18.6
8.7
828
1,305
79
468
138
29.5
330
2Q
28,933
4.9
26,321
2,612
9.6
9.0
877
1,582
40
193
58
30.1
135
3Q
30,264
7.6
27,488
2,776
12.0
9.2
887
1,725
16
180
60
33.3
120
4Q
29,627
3.6
26,864
2,763
6.9
9.3
929
1,804
28
58
19
33.0
39
CY13
5Q
30,600
5.1
27,953
2,647
4.9
8.7
975
1,761
132
44
14
33.0
29
6Q
31,708
9.6
28,929
2,779
6.4
8.8
1,215
1,567
69
66
22
33.0
44
1Q
23,360
-22.8
21,580
1,780
-35.9
7.6
730
1,160
30
-80
-26
33.0
-54
2Q
22,561
-23.9
20,659
1,901
-31.2
8.4
788
1,280
60
-107
-40
37.5
-67
3Q
23,170
-24.3
21,120
2,050
-22.6
8.8
800
1,440
60
-130
-50
38.5
-80
4QE
24,560
-22.5
22,448
2,112
-24.0
8.6
804
1,483
60
-115
-38
33.0
-77
C162
Jubilant Foodworks
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
JUBI IN
65.4
82 / 1
1,390 / 928
-5 / 9 / -12

Y/E March
Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh.(INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2013 2014E 2015E

14.1 18.3 24.2
2.4
2.9
3.9
1.4
1.5
2.0
20.9 23.2 31.1
26.0 11.0 33.9
67.1 90.3 121.4
31.2 25.7 25.6
42.8 36.4 36.6
0.0
0.0
0.0
60.1
18.7
32.3
0.0
54.1
13.9
27.0
0.0
40.4
10.4
19.6
0.0
2016E
31.0
4.9
2.6
39.6
27.4
147.3
26.9
38.1
30.3
31.7
8.5
15.2
1.0
CMP: INR1,257
Sell
We expect 3% increase in sales to INR5b. LTL sales growth would be

8%.
Discretionary spending remains weak due to poor consumer sentiment

coupled with higher inflation.
We expect 140bp EBITDA margin contraction to 16% due to low

operating leverage and costs related to Dunkin operations. However,
we note that JUBI has withdrawn its 1-for-1 scheme (under which it
was offering one pizza free with every pizza purchased) in midNovember.
We estimate 9.3% PAT growth for 3QFY14 to INR412m.
We expect JUBI to add 40 stores during 3QFY14.
The stock trades at 40.4x FY15E EPS of INR31.1. Sell.

Comments on (1) demand outlook for Quick Service Restaurants
(QSRs) and Pizzas, and (2) competition in Home Delivery Pizza format.
Performance of Dunkin Donuts and margin guidance.
Changes in expansion and capex strategy, if any.
(INR Million)
Y/E March
No of Stores
LTL Growth (%)
Net Sales
YoY Change (%)
Gross Profit
Gross Margin (%)
Other Expenses
EBITDA
EBITDA Growth (%)
Margins (%)
Depreciation
Interest
Other Income
PBT
Tax
Rate (%)
Adjusted PAT
YoY Change (%)
E: MOSL Estimates
January 2014
FY13
1Q
489
22.3
3,145
45.0
2,309
73.4
1,736
573
36.3
18.2
117
0
19
475
152
31.9
323
39.3
2Q
515
19.8
3,421
42.3
2,530
74.0
1,943
587
34.5
17.2
138
0
20
468
145
30.9
323
36.5
3Q
552
16.1
3,851
39.0
2,863
74.3
2,192
672
30.3
17.4
140
1
20
551
174
31.6
377
28.0
FY14
4Q
576
7.7
3,658
29.3
2,703
73.9
2,091
612
20.7
16.7
152
0
20
480
153
31.9
327
11.4
1Q
602
6.3
3,965
26.1
2,937
74.1
2,270
667
16.4
16.8
179
0
22
510
170
33.3
340
5.1
2Q
632
6.6
4,367
27.6
3,195
73.2
2,542
653
11.3
15.0
179
0
24
498
165
33.2
332
2.8
3QE
672
8.0
5,007
30.0
3,720
74.3
2,919
801
19.2
16.0
196
1
25
629
217
34.5
412
9.3
4QE
711
12.0
4,926
34.7
3,686
74.8
2,885
800
30.7
16.2
211
1
29
618
203
32.9
415
26.9
FY13
FY14E
576
16.2
14,076
38.4
10,405
73.9
7,961
2,444
30.0
17.4
547
1
78
1,974
623
31.6
1,351
26.0
711
10.0
18,265
29.8
13,537
74.1
10,616
2,921
19.5
16.0
765
1
100
2,255
755
33.5
1,500
11.0
C163
Shoppers Stop
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
SHOP IN
82.2
34 / 1
474 / 318
24 / -4 / -16
CMP: INR416
We estimate 18.2% increase in sales to INR7.14b. Same store sales

(SSS) growth should come in at 10%, bolstered by good performance
in Apparel, Leather and Footwear.
We estimate EBITDA margin at 7.5%, flat YoY, but the highest in four
quarters.
Hypercity would continue to be a drag on consolidated profitability.
SHOP has added four Shoppers Stop department stores and one
HyperCITY store during 3QFY14.
The stock trades at 42.9x FY15E EPS (standalone). Maintain Neutral.

Y/E March
Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh.(INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2013 2014E 2015E

22.3 26.8 31.2
1.3
1.6
2.0
0.4
0.6
0.8
4.9
7.0
9.7
-37.9 43.5 39.1
82.5 88.3 96.3
5.9
7.9 10.1
7.3
9.9 12.2
13.6 15.0 15.0
85.6
5.0
27.6
0.2
59.7
4.7
21.7
0.3
42.9
4.3
17.3
0.3
2016E
35.8
2.4
1.0
11.9
22.8
105.4
11.3
13.7
20.0
34.9
3.9
14.5
0.6
Neutral

Comments on SSS performance.
Margin outlook for the future.
Changes in expansion strategy, if any.
Guidance on HyperCITY breakeven.
(INR Million)
Y/E March
LTL Sales Gr (%)
Deptt Stores
Net Sales
YoY Change (%)
Total Exp
EBITDA
Growth (%)
Margins (%)
Depreciation
Interest
Other Income
PBT
Tax
Rate (%)
Adjusted PAT
YoY Change (%)
E: MOSL Estimates
January 2014
FY13
1Q
1.0
52
4,467
13.7
4,330
138
-47.7
3.1
120
77
74
15
3
17.9
12
-89.3
2Q
2.0
55
5,796
16.5
5,505
291
-24.9
5.0
142
77
31
102
38
37.1
64
-67.3
3Q
12.5
55
6,041
20.4
5,588
453
9.6
7.5
120
86
32
279
108
38.7
171
-11.4
FY14
4Q
10.0
55
6,251
15.6
5,868
383
5.4
6.1
125
79
35
214
62
29.1
152
10.4
1Q
12.0
60
5,371
20.2
5,137
234
69.4
4.3
133
98
32
34
11
32.2
23
86.1
2Q
15.5
61
7,252
25.1
6,854
398
36.7
5.5
167
98
33
166
66
40.1
99
55.2
3QE
10.0
65
7,141
18.2
6,605
536
18.3
7.5
122
101
34
346
119
34.5
226
32.5
4QE
8.0
65
7,068
13.1
6,622
447
16.8
6.3
95
111
88
330
106
32.1
224
47.6
FY13
FY14E
7.4
55
22,555
16.7
21,291
1,264
-11.4
5.6
507
319
172
610
211
34.6
399
-37.9
11.0
65
26,831
19.0
25,218
1,614
27.6
6.0
517
408
187
876
303
34.6
573
43.5
C164
Titan Company
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
TTAN IN
887.8
204 / 3
302 / 200
-3 / -9 / -28

Y/E March
Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh.(INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2013 2014E 2015E

101.1 113.0 135.4
10.1 10.7 13.0
7.3
7.5
8.5
8.2
8.4
9.6
20.1
3.1 14.2
22.1 27.9 34.7
42.5 30.2 27.8
59.4 38.2 35.9
30.0 30.0 30.0
28.0
10.3
19.0
1.1
27.2
8.2
19.5
1.1
23.8
6.6
16.3
1.3
2016E
158.8
15.8
10.5
11.8
22.7
42.9
27.5
36.9
30.0
19.4
5.3
13.2
1.5
CMP: INR229
Neutral
We estimate sales at INR30.1b, up 1% YoY.
Continued weak consumer sentiment in discretionary categories

coupled with regulatory challenges would impact Jewelry
performance. Performance in Watches would also remain weak.
Lackluster festive and wedding season along with correction in gold

prices would characterize the Jewelry division's 3QFY14 performance.
We estimate margin expansion of 120bp YoY due to mix improvement

in Jewelry division (TTAN is yet to re-commence sale of gold coins).
Lack of gold coin sales would impact segment EBIT in absolute terms.
Watch margins would contract YoY due to currency impact and lack of
operating leverage resulting from decline in volumes.

Hedging strategy, once existing 'gold on lease' contracts expire. TTAN
has not yet received regulatory approvals for higher hedging limits.
Commentary around consumer demand outlook in its core categories
as well as Fragrance and Helmets.
Expansion plans.
(INR Million)
Y/E March
Net Sales
YoY Change (%)
Total Exp
EBITDA
EBITDA Growth (%)
Margins (%)
Depreciation
Interest
Other Income
PBT
Tax
Rate (%)
Adjusted PAT
YoY Change (%)
E: MOSL Estimates
January 2014
FY13
1Q
22,057
9.2
19,937
2,120
10.3
9.6
123
126
252
2,123
561
26.4
1,561
8.7
2Q
22,760
8.6
20,266
2,494
19.4
11.0
130
121
238
2,481
679
27.4
1,801
21.3
3Q
29,829
23.2
27,351
2,478
20.1
8.3
142
117
571
2,791
752
26.9
2,039
24.4
FY14
4Q
25,931
14.8
23,467
2,464
34.1
9.5
150
142
496
2,669
819
30.7
1,850
28.2
1Q
31,077
40.9
28,627
2,449
15.6
7.9
146
170
382
2,515
691
27.5
1,825
16.9
2Q
23,290
2.3
20,672
2,617
4.9
11.2
149
200
304
2,573
706
27.4
1,867
3.6
3QE
30,127
1.0
27,265
2,862
15
9.5
153
164
286
2,831
764
27.0
2,066
1.3
4QE
28,461
9.8
25,701
2,759
12.0
9.7
141
327
184
2,475
633
25.6
1,842
-0.4
FY13
FY14E
101,127
15.6
91,020
10,116
37
10.0
545
506
1,008
10,072
2,811
27.9
7,262
20.1
112,954
11.7
102,266
10,688
6
9.5
589
861
1,156
10,394
2,794
26.9
7,600
4.7
C165
December 2013 Results Pr evie w | Sector: Technology
Technology
Companies Covered
Cognizan t Technology
HCL Technologies
H exaware Technologie s
Infosys
KPIT Cummins
MindTre e
MphasiS
Persistent Systems
TCS
Tech Mahindra
Wipro
Seasonality speed breaker to cyclical traction: The industry appears well placed to
deliver faster growth in FY14 than in FY13, and there are early indicators that growth
could continue accelerating in FY15. However, as far as 3QFY14 is concerned, the macro
traction is not enough to offset the seasonal weakness brought about by furloughs
and shutdowns. We expect constant currency (CC) growth rates to be below 3% across
the top-tier, with the exception of HCL Technologies (HCLT), where we expect
improvement in Software Services growth. Infosys (INFO) could lag, given that seasonal
disruption will get compounded by significant shuffle at the top level. Among tier-II
IT too, we expect growth to be muted at ~3% QoQ for Mindtree (MTCL), Persistent
Systems (PSYS) and KPIT.
Cross-currency tailwind on the back of GBP appreciation: The GBP has appreciated by
4.4% QoQ in 3QFY14, and companies with higher GBP revenue booking should benefit.
TCS expects positive impact of ~100bp from cross-currency movements. We see lower
impact for INFO (~50bp) based on 2QFY14 currency mix. HCLT, Tech Mahindra (TECHM)
and Wipro (WPRO) should see impact comparable to TCS.
Margin headwinds for HCLT, MTCL, PSYS: Impact from wage hikes will be a margin
headwind for HCLT(120bps) and MTCL. PSYS will suffer from tough 2Q comparable,
where license sale flowed down to operating margin. Hikes to 20% of personnel at
MTCL along with investments in people would pull margin down by ~150bp. With
QoQ movement in INR/USD relatively stable, we expect limited margin pressures
across the board. We expect cost optimization measures at INFO to drive 100bp QoQ
improvement in operating margin.
Watch for commentary on CY14 budgets, CTSH guidance, INFO's outlook: Come January,
the companies will have a clearer idea on the clients' technology budgets for the full
year. Also, CTSH's revenue growth guidance for CY14 will set the tone for expectations
for the industry. INFO is expected to deliver much better growth than its guidance,
and some idea of the impact of changes in the management will be conveyed in its
relative performance.

CMP Rating
(INR)
27.12.13
HCL Technologies
1,249
Buy
H exaware Tech.
132 Neutral
Infosys
3,562
Buy
KPIT Tech.
174 Neutral
Mindtree
1,556
Neutral
MphasiS
425 Neutral
Persistent Systems
988 Buy
TCS
2,159
Neutral
Tech Mahindr a
1,861
Buy
Wipro
555 Buy
Sector Aggregate (ex Wipro)
Dec.13
82,070
6,393
130,291
7,206
7,922
15,931
4,381
214,328
48,472
112,855
516,994
Sales
Var.
% YoY
30.8
27.3
25.0
27.9
34.3
26.7
31.6
33.4
32.1
NA
30.3
Var. Dec.13
% QoQ
3.1 20,719
2.9
1,466
0.5 35,245
2.5
1,157
2.9
1,539
-0.1
2,797
1.3
1,072
2.2 67,984
1.6 11,233
NA 23,267
1.8 143,212
EBITDA
Var.
% YoY
48.6
73.1
18.7
31.1
27.8
20.1
30.1
46.1
41.2
NA
37.4
Var.
% QoQ
-1.0
-0.8
4.0
6.3
-3.7
0.2
-4.5
2.4
1.1
NA
2.0
(INR Million)
Net Profit
Dec.13
Var.
Var.
% YoY % QoQ
14,105
49.4
-0.4
1,013
34.7
2.5
27,609
16.5
5.1
664
11.0
-0.4
986
-0.2
-23.4
1,916
3.9
0.8
523
5.7
-13.9
52,584
48.1
11.8
6,671
131.6
-2.6
19,993
NA
NA
106,072
39.2
6.4
Ashish Chopra (Ashish.Chopra@MotilalOswal.com)/Siddharth Vora (Siddharth.Vora@MotilalOswal.com)

January 2014
C166

Se nsex Inde x
MOSL Te chnology Index
118
113
108
103
Dec-13
Nov-13
Oct-13
Sep-13
98
Tier-I offers better risk-reward; prefer INFO, TECHM: We do not expect any further
bridging of the valuation gap between tier-II and tier-I on the following counts: [1] In
terms of growth fundamentals, tier-II continues to at best, match tier-I, despite a
significantly lower revenue base, [2] Current discount to top-tier IT is much lower to
historical P/E discount at which tier-II has traded, and [3] Cash conversion capability at
tier-II has been significantly inferior.
INFO and TECHM are our top picks in tier-I. While we believe that TCS will continue to
outperform its peers, valuations keep us Neutral on the stock. HCLT is a play on the
rising IMS opportunity, combined with expectation of improvement in growth mix.
Constant currency growth rates to be below 3% across the top-tier, with the exception of HCLT
Se nsex Inde x
MOSL Te chnology I ndex
200
150
4.2
3.6 3.2 3.1
2.5
1.7
100
50
Dec-13
Sep-13
Jun-13
Mar-13
Dec-12
Only HCL Tech and Wipro to have incremental revenues greater than last quarter
Among tier-II IT too, we expect constant currency revenue growth to be at ~3% QoQ
4.3
3.2 3.63.0

January 2014
C167
EBITDA margin: Infosys to benefit from cost saving measures; wage hike to impact HCL Tech
*EBITDA margin in USD for Cognizant
Estimate aggregate top-tier USD revenue growth at 3.1% QoQ

Revenues (USD m)
Revenues (INR b)
Company
3QFY14E
3QFY13
YoY (%)
2QFY14 QoQ (%) 3QFY14E
3QFY13
YoY (%)
2QFY14
TCS
3,457
2,948
17.3
3,337
3.6
214
161
33.4
210
Infosys
2,101
1,911
10.0
2,066
1.7
130
104
25.0
130
Wipro
1,684
1,577
6.8
1,631
3.2
113
109
3.1
108
HCLT
1,324
1,154
14.7
1,270
4.2
82
63
30.8
80
Tech Mahindra
782
675
15.8
758
3.1
29.2
22.8
28.5
28.8
Aggregate
9,348
8,265
13.1
9,062
3.1
569
460
23.7
556
EBITDA Margin (%)
PAT (INR b)
Company
3QFY14E
3QFY13
YoY (%)
2QFY14 QoQ (%) 3QFY14E
3QFY13
YoY (%)
2QFY14
TCS
31.7
29.0
280
31.6
10
53
36
48.1
47
Infosys
27.1
28.5
-140
26.1
90
28
24
16.5
26
Wipro*
22.9
19.6
330
21.2
160
20
17
16.5
19
HCLT
25.2
22.2
300
26.3
-100
14
9
49.4
14
Tech Mahindra
23.2
21.7
148
23.3
-11
6.7
2.9
132
6.8
Aggregate
27.5
25.3
218
27.1
38
121
89
36.4
114
* Wipro: QoQ margins in overall business is expanding as 2Q excludes translation gains on revenues
QoQ (%)
2.2
0.5
4.8
3.1
1.4
2.4
QoQ (%)
11.8
5.1
3.5
-0.4
-3
6.5
Across tier-II, growth will be lower at 2.6% QoQ; expect aggregate margins to decline 40bp
Company
3QFY14E
Persistent Systems
71
Hexaware
103
KPIT Cummins
116
Mindtree
128
Mphasis
263
Aggregate
680
Company
3QFY14E
Persistent Systems
24.5
Hexaware
22.9
KPIT Cummins
16.1
Mindtree
19.4
Mphasis
17.6
Aggregate
19.2
January 2014
Revenues (USD m)
3QFY13
YoY (%)
2QFY14
61
16.3
68
92
11.6
99
103
12.3
112
110
16.3
124
237
10.9
260
603
12.8
663
EBITDA Margin (%)
3QFY13
YoY (%)
2QFY14
24.7
-30
26.0
16.9
610
23.8
15.7
40
15.5
20.4
-100
20.8
18.5
-100
17.5
18.7
40
19.6
QoQ (%)
3.2
4.3
3.6
3.0
1.1
2.6
3QFY14E
4.4
6.4
7.2
7.9
15.9
42
QoQ (%) 23QFY14E

-150
0.5
-90
1.3
60
0.7
-130
1.0
10
1.9
-40
5.3
Revenues (INR b)
3QFY13
YoY (%)
2QFY14 QoQ (%)
3.3
31.6
4.3
1.3
5.0
27.3
6.2
2.9
5.6
27.9
7.0
2.5
5.9
34.3
7.7
2.9
12.6
26.7
15.9
-0.1
32
28.9
41
1.5
PAT (INR b)
3QFY13
YoY (%)
2QFY14 QoQ (%)
0.5
6
0.6
-13.9
0.7
83
1.0
27.4
0.6
11
0.7
-0.4
1.0
0
1.3
-23.4
1.8
4
1.9
0.8
4.6
16
5.5
-1.9
C168
3QFY14 currency highlights (INR)

USD
Rates (INR)
EUR
GBP
AUD
USD
Change (QoQ, %)
EUR
GBP
Average
62.0
84.4
100.4
57.5
-0.1
2.7
Closing
61.8
85.1
102.1
55.2
-1.3
0.6
1.0
-5.5
AUD
4.3
1.2
3QFY14 currency highlights (USD)

EUR
Rates (USD)
GBP
AUD
EUR
Chang e (QoQ, %)
GBP
AUD
Average
1.36
1.62
0.93
2.7
4.4
1.2
Closing
1.37
1.66
0.89
1.6
2.3
-4.3
Cross currencies: Assumed rates v/s actuals

Guided at
EUR
GBP
AUD
INR/USD
Infosys
1.30
1.52
0.91
62.61
Wipro
1.34
1.57
0.93
61.98
Actual (Average)
1.36
1.62
0.93
61.98
Change (%)
EUR
GBP
AUD
INR/USD
Impact on USD revenue
Infosys
4.7
6.5
1.5
-1.0
0.99
Wipro
1.6
3.2
-0.3
0.0
0.59
EPS estimates (INR): MOSL v/s Consensus
Infosys
TCS
Wipro
HCL Tech
Tech Mahindra
Cognizant
Persistent Systems
Mindtree
KPIT Tech.
Hexaware
CMP (INR)
27.12.13
Technology
HCL Technologie s 1,249
H exaware Tech.
132
Infosys
3,562
KPIT Tech.
174
Mindtree
1,556
MphasiS
425
Persistent Systems 988
TCS
2,159
Tech Mahindr a
1,861
Wipro
555
Sector Aggregate
January 2014
3QFY14
MOSL
Consensus
48.3
46.4
26.8
25.7
8.1
8.2
19.9
19.2
30.3
30.0
1.1
1.1
13.1
15.2
30.7
30.5
3.4
3.7
3.4
3.8
FY14
MOSL
Consensus
184.5
182.7
96.7
94.6
31.4
30.9
81.6
80.7
123.6
121.7
4.8
5.0
59.9
61.8
113.3
114.6
13.9
14.2
12.5
12.7
Rating
EPS (INR)
FY13 FY14E FY15E
Buy
Neutral
Buy
Neutral
Neutral
Neutral
Buy
Neutral
Buy
Buy
57.0
10.9
164.9
10.6
81.7
37.5
46.9
71.2
93.0
25.0
81.6
12.5
184.5
13.9
113.3
51.3
59.9
96.7
126.5
31.4
93.8
14.0
218.8
17.0
129.7
42.0
73.7
110.3
149.0
35.1
FY15
MOSL
Consensus
218.8
214.8
110.3
112.0
35.1
35.2
93.8
90.4
146.2
136.8
5.6
6.0
73.7
75.1
129.7
130.6
17.0
15.2
14.0
14.2
P/E (x)
FY13 FY14E FY15E
21.9
12.1
21.6
16.5
19.0
11.3
21.1
30.3
20.0
22.2
24.8
15.3
10.5
19.3
12.5
13.7
11.7
16.5
22.3
14.7
17.7
19.1
13.3
9.4
16.3
10.2
12.0
10.1
13.4
19.6
12.5
15.8
16.7
Upside/Downside to Consensus (%)

3QFY14
FY14
FY15
4.2
1.0
1.9
4.4
2.2
-1.5
-0.6
1.6
-0.2
3.9
1.1
3.7
0.9
1.5
6.9
-5.4
-4.0
-7.4
-13.7
-3.2
-1.9
0.8
-1.1
-0.7
-9.3
-2.0
12.4
-10.6
-1.0
-1.3
EV/EBITDA (x)
FY13 FY14E FY15E
8.9
5.1
12.3
4.4
7.5
8.2
5.3
16.6
3.4
12.6
12.7
9.7
6.4
12.9
6.9
10.5
6.3
8.2
16.1
9.4
13.0
13.2
8.8
5.5
10.6
5.2
8.2
7.6
7.0
14.3
8.0
11.3
11.6
RoE (%)
FY13 FY14E FY15E
32.2
29.3
25.7
22.7
25.8
19.1
20.2
37.8
32.6
21.6
26.7
39.2
28.8
24.3
23.6
32.3
16.0
21.9
40.8
35.1
25.2
28.4
34.5
26.8
26.3
23.3
29.4
16.7
23.0
36.7
32.5
24.1
26.3
C169
Cognizant
Bloomberg
Equity Shares (m)
M.Cap. (USD b)
52-Week Range (USD)
CTSH US
307.3
31
100 / 61
CMP: USD99
For 4QCY13, CTSH has guided revenue of at least USD2,352m, which

implies QoQ growth of 2%. It has upgraded its full-year revenue growth
guidance to at least 20.3% to USD8,840m from at least 19%, earlier.
We expect CTSH to beat its 4QCY13 guidance and post revenue of

USD2,362m, up 2.5% QoQ.
CTSH has discontinued its practice of filling employee bonus levels

linked to sales growth targets which was considered as a precursor to
the likely guidance for the following calendar year.
With ~78% of revenues from North America, CTSH is unlikely to benefit

from GBP appreciation, which is expected to add 50-100bp to its
tier-I peers' USD revenue growth.
We expect EBITDA margin to contract 50bp QoQ to 20.3%. Our SGA

estimate is 19.5%, +30bp QoQ due to promotions given out during the
quarter.
We estimate net income at USD328m, +2.6% QoQ, and net margin at

13.9%, flat QoQ.
The stock trades at 20.7x CY14E and 17.9x CY15E EPS. Not Rated.
Financials & Valuation (USD b)

Y/E December
Sales
EBITDA
PAT
EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div yld (%)
2012 2013E 2014E

7.3
8.9 10.5
1.5
1.8
2.1
1.1
1.2
1.5
3.5
4.0
4.8
21.0 17.0 18.8
16.0 19.6 24.5
23.9 22.8 21.8
28.9 29.1 27.2
0.0
0.0
0.0
28.7
6.2
18.3
0.0
24.6
5.1
14.8
0.0
20.7
4.1
12.3
0.0
2015E
12.0
2.4
1.7
5.6
15.6
30.0
20.4
25.4
0.0
17.9
3.3
10.1
0.0
Not Rated

Guidance for CY14 will set the tone for industry expectations for FY15.
Commentary on US and Europe demand environment post positive
commentary from Accenture.
Quarterly Performance (US GAAP)
Y/E December
Revenues
Q-o-Q Change (%)
Direct Expenses
SG&A
SG&A as % of Sales
EBITDA
Margins (%)
Other Income
Depreciation
PBT bef. Extr a-ordinary
Pr ovision for Tax
Rate (%)
PAT before EO
Q-o-Q Change (%)
Headcount addition
Closing Headcount
Utilization (%)
E: MOSL Estimates
January 2014
(USD Million)
CY12
1Q
2Q
3Q
4Q
1,711
1,795
1,892
1,948
2.9
4.9
5.4
3.0
985
1,031
1,112
1,151
374
397
385
402
21.9
22.1
20.3
20.6
353
368
395
396
20.6
20.5
20.9
20.3
4
3
9
10
35
36
39
39
322
335
364
366
79
83
87
87
24.4
24.8
24.0
23.8
244
252
277
279
7.3
3.4
9.9
0.7
2,800
4,500
5,400
6,300
140,500 145,000 150,400 156,700
67
68
70
68
CY13
1Q
2Q
3Q
2,021
2,161
2,306
3.7
7.0
6.7
1,200
1,272
1,382
413
421
443
20.4
19.5
19.2
408
469
480
20.2
21.7
20.8
11
-6
2
42
42
43
377
420
439
93
120
120
24.6
28.5
27.2
284
300
320
1.9
5.7
6.4
6,000
1,600
2,100
162,700 164,300 166,400
67
70
75
4QE
2,362
2.5
1,421
461
19.5
480
20.3
13
44
449
121
27.0
328
2.6
8,000
174,300
74
CY12
CY13E
7,346
20.0
4,278
1,558
21.2
1,511
20.6
26
149
1,388
336
24.2
1,051
19.0
19,000
156,700
68
8,850
20.5
5,276
1,738
19.6
1,837
20.8
19
170
1,686
454
26.9
1,232
17.2
17,600
174,300
72
C170
December 2013 Results Preview | Sector: Technology
HCL Technologies
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
HCLT IN
705.8
882 / 14
1,261 / 615
14 / 45 / 90
2013 2014E 2015E

257.3 331.3 367.3
57.5 84.0 87.9
40.3 58.0 67.1
57.0 81.6 93.8
62.6 43.1 14.9
205.9 277.4 353.7
32.2 39.2 34.5
29.1 33.3 29.9
21.1 15.9 17.7
21.9
6.1
14.3
1.0
15.3
4.5
9.6
1.0

Y/E June
Sales
EBITDA
PAT
EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div yld (%)
CMP: INR1,249
13.3
3.5
8.7
1.3
2016E
414.8
97.4
74.8
103.9
10.7
431.7
29.9
26.9
23.3
12.0
2.9
9.0
1.9
Buy
We expect USD revenue growth of 4.2% QoQ to USD1,324m. Traction

in IMS is likely to remain strong and we estimate 8.6% QoQ growth to
USD457m. Software Services revenue would grow 1.9% QoQ to
USD810m.
Cross-currency movements would have a positive impact of ~90bp.
Our volume growth estimate in Software Services stands at 1.4% QoQ.
In INR terms, we expect 3.1% QoQ revenue growth to INR82.07b.
Wage hikes given during the quarter would be a 120bp headwind to
margins. We expect EBITDA margin to decline 110bp QoQ to 25.2%.
Our PAT estimate for the quarter is INR14.1b, down 0.4% QoQ. Our PAT
margin estimate is 17.2%, a contraction of 60bp QoQ.
HCLT announced signing of deals with a TCV of over USD1b in 1QFY14,
the fourth consecutive quarter of USD1b+ deal signing. TPI has
suggested that 4QCY13 will see healthy deal closures, driving
expectation of healthy deal signings at HCLT.

TCV of deals signed during the quarter.
Growth in Software Services segment.
Growth in US after improved outlook (Europe outgrew US in the last
three quarters).
Quarterly Performance (US GAAP)

Y/E June
(INR Million)
FY13
1Q
2Q
3Q
Revenues
60,910
62,738
64,246
Q-o-Q Change (%)
2.9
3.0
2.4
EBITDA
13,288
13,945
14,156
Margins (%)
21.8
22.2
22.0
Other Income
-253
154
887
PAT
8,642
9,444
10,189
Q-o-Q Change (%)
2.8
9.3
7.9
Y-o-Y Change (%)
80.0
70.9
75.1
Diluted EPS (INR)
12.3
13.5
14.4
USD Revenues
1,114
1,154
1,191
Q-o-Q Change (%)
3.2
3.6
3.2
Gross Margin (%)
34.9
35.5
35.6
SGA (%)
13.0
13.2
13.6
Tax rate (%)
23.8
23.7
24.0
Net Employee additions
1,016
-141
-791
E: MOSL Estimates; After adjusting for ESOP charges
January 2014
FY14
4Q
69,442
8.1
16,147
23.3
782
11,975
17.5
42.4
17.0
1,228
3.1
36.5
13.3
21.5
1,102
1Q
79,610
14.6
20,930
26.3
-1,200
14,160
18.2
63.9
20.0
1,270
3.5
39.0
12.7
20.2
1,691
2QE
82,070
3.1
20,719
25.2
-734
14,105
-0.4
49.4
19.9
1,324
4.2
38.3
13.0
22.0
2,770
3QE
85,019
3.6
21,711
25.5
-196
15,245
8.1
49.6
21.5
1,371
3.6
38.4
12.8
22.0
2,000
4QE
84,574
-0.5
20,626
24.4
-124
14,462
-5.1
20.8
20.4
1,410
2.8
37.3
12.9
22.0
2,050
FY13
FY14E
257,336
22.4
57,536
22.4
1,570
40,250
331,273
28.7
83,985
25.4
-2,254
57,972
63.9
57.0
4,687
12.9
35.6
13.3
23.2
1,186
44.0
81.6
5,375
14.7
38.2
12.9
21.6
8,511
C171
Hexaware Technologies
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
HEXW IN
296.9
39 / 1
139 / 72
7 / 47 / 47

Y/E December
Sales
EBITDA
PAT
EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div yld (%)
2012 2013E 2014E

19.5 23.0 26.5
4.1
5.2
5.6
3.3
3.8
4.2
10.9 12.5 14.0
22.2 15.1 11.6
40.3 47.2 57.1
27.0 26.6 24.5
31.2 33.4 30.0
48.7 29.5 36.2
12.1
3.3
8.6
4.1
10.5
2.8
6.5
2.9
2015E
29.8
6.0
4.7
15.6
11.6
68.0
23.0
26.7
3.9
9.4
2.3
5.6
3.9
CMP: INR132
Neutral
We estimate revenue growth of 4.3% QoQ to USD103.1m. In Rupee

terms, we expect revenue growth of 2.9% QoQ to INR6.4b(average
INR/USD assumed at 62 for 4QCY13 v/s realized rate of INR62.91/USD
for HEXW in 3Q).
HEXW managed to more than recover the EBITDA margin shrinkage

that resulted from client specific issues in 4QCY12, in line with its
guidance for gradual pick-up in margins in CY13.
We have seen a margin recovery of 690bp in 9MCY13. We model EBITDA

margin decline of 90bp QoQ to 22.9% in 4QCY13.
Also, we expect SGA to increase by 10bp QoQ to 17%.
Our PAT estimate for the quarter is INR1,013m, a growth of 2.5% QoQ.
Our implied PAT margin estimate is 15.8%, down 10bp QoQ.
Barings recently acquired the promoters' stake in the company for a

maximum of INR135 per share. Post this, HEXW has discontinued giving
any guidance on revenues and margins. Dividend policy is under
review - for the first time in many years, no dividend was announced
last quarter.
The stock trades at 9.4x CY14E and 8.4x CY15E EPS. Neutral.
8.4
1.9
4.8
3.9

Strategy under the new promoters.
Dividend policy.
Peoplesoft implementation and large deals traction.
Quarterly Performance (Indian GAAP)
(USD Million)
Y/E December
Revenues
Q-o-Q Change (%)
Direct Cost
Other Operating Exps
Operating Profit
Margins (%)
Other Income
Depreciation
Pr ovision for Tax
Rate (%)
Net Income bef. Extra-ordinary
Q-o-Q Change (%)
USD Revenues
Q-o-Q Change (%)
Diluted EPS - After EOI (INR)
E: MOSL Estimates
January 2014
CY12
1Q
4,383
31.2
2,574
827
982
22.4
138
71
1,049
165
15.7
884
0.2
88.0
4.6
2.9
2Q
5,001
14.1
2,995
859
1,147
22.9
49
76
1,120
230
20.5
890
0.7
91.2
3.6
3.0
3Q
5,075
1.5
3,067
910
1,098
21.6
55
88
1,065
225
21.1
840
-5.6
92.8
1.8
2.8
CY13
4Q
5,023
-1.0
3,210
966
847
16.9
138
89
896
144
16.1
752
-10.5
92.4
-0.4
2.6
1Q
5,077
1.1
3,162
936
979
19.3
118
93
1,004
211
21.0
793
19.8
94.1
1.8
2.6
2Q
5,366
5.7
3,252
841
1,273
23.7
62
94
1,241
262
21.1
979
23.5
94.8
0.7
3.3
3Q
6,211
15.7
3,683
1,050
1,478
23.8
-120
98
1,260
272
21.6
988
0.9
98.8
4.3
3.3
4QE
6,393
2.9
3,840
1,087
1,466
22.9
-67
100
1,298
286
22.0
1,013
2.5
103.1
4.3
3.4
CY12
CY13E
19,482
34.3
11,846
3,562
4,074
20.9
290
324
4,040
764
18.9
3,276
22.8
364
18.3
10.9
23,047
18.3
13,937
3,914
5,196
22.5
-7
385
4,803
1,031
21.5
3,773
15.2
390.8
7.3
12.5
C172
Infosys
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
INFO IN
571.4
2,035 / 33
3,570 / 2,190
4 / 32 / 46

Y/E March
Sales
EBITDA
PAT
EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div Y ield (%)
2013
403.5
115.6
94.2
164.9
13.3
696.5
25.7
28.5
25.5
2014E
504.6
134.5
105.4
184.5
11.9
824.7
24.3
27.9
24.4
21.6
5.1
15.6
1.2
19.3
4.3
12.9
1.3
2015E 2016E
564.5
638.1
155.8
180.6
125.0
145.4
218.8
254.4
18.6
16.3
985.0 1,169.2
26.3
25.7
27.5
27.0
22.9
23.6
16.3
3.6
10.6
1.4
14.0
3.0
8.7
1.7
CMP: INR3,562
Buy
Infosys' guidance of 9-10% growth in full-year USD revenues implies

-1.6% revenue CQGR to meet the lower end and -0.8% CQGR to meet
the higher end. We expect the company to beat the higher end of the
guided band.
For 3QFY14, we expect overall revenue to grow 1.7% QoQ to USD2.1b.

This includes positive impact of 50bp from cross-currency, implying
constant currency (CC) revenue growth of 1.2% QoQ. In INR terms, we
expect revenue growth of 0.5% QoQ to INR130.3b.
We expect EBITDA margin to expand 100bp QoQ to 27.1%.
Infosys has been aggressive in addressing cost optimization and we

expect some gains from the lower hanging fruits to show on the
margins, as well. We expect overall utilization including trainees to
decline 70bp QoQ to 73% due to the shutdown and furloughs
experienced during the quarter.
We expect PAT to increase 5.1% QoQ to INR27.6b, led by higher margins.
The stock trades at 19.3x FY14E and 16.3x FY15E earnings. Buy.

Commentary on early indicators for FY15.
Deal signings in the BITS segment and growth in the same.
Revenue growth beat to that implied by guidance and performance
on margins after recent cost optimization initiatives.
Quarterly Performance (IFRS)
(INR Million)
Y/E March
Revenues
Q-o-Q Change (%)
EBITDA
Margins (%)
Other Income
PAT
Q-o-Q Change (%)
Diluted EPS (INR)
USD Revenues
Q-o-Q Change (%)
Operating Metrics
Gross Margin (%)
SGA (%)
Tax rate (%)
Utiliz. - excl. trainees (%)
Q-o-Q Volume Growth (%)
Q-o-Q Realization chg (%)
E: MOSL Estimates
January 2014
FY13
1Q
96,160
8.6
29,460
30.6
4,760
22,890
-1.2
40.1
1,752
-1.1
42.2
11.6
27.8
1,157
71.6
2.8
(3.7)
2Q
3Q
98,580 104,240
2.5
5.7
28,720
29,700
29.1
28.5
7,060
5,030
23,690
23,690
3.5
0.0
41.5
41.5
1,797
1,911
2.6
6.3
40.9
11.8
28.3
2,610
73.3
3.8
(0.2)
39.8
11.3
25.5
1,508
73.2
2.7
3.6
FY14
4Q
104,540
0.3
27,694
26.5
6,740
23,940
1.1
41.9
1,938
1.4
37.9
11.4
23.7
1,419
73.9
1.6
(0.2)
1Q
2Q
3QE
112,670 129,650 130,291
7.8
15.1
0.5
29,830
33,890
35,245
26.5
26.1
27.1
5,770
5,100
5,582
23,740
26,260
27,609
-0.8
10.6
5.1
41.5
42.1
48.3
1,991
2,066
2,101
2.7
3.8
1.7
37.9
11.4
26.8
575
75.9
3.4
(0.6)
37.9
11.8
26.4
2,964
77.8
2.6
1.2
38.3
11.3
26.5
3,443
77.1
1.3
0.4
FY13
FY14E
4QE
131,942 403,520 504,553
1.3
19.6
25.0
36,044 115,570 134,508
27.3
28.6
26.7
5,792
23,590
22,245
28,320
94,206 105,426
2.6
13.3
11.9
49.6
164.9
184.5
2,128
7,398
8,287
1.3
5.8
12.0
38.5
11.1
26.5
2,790
75.5
1.4
(0.1)
40.1
11.5
26.3
6,694
73.0
11.8
(3.0)
38.1
11.4
26.6
9,772
76.6
10.8
0.4
C173
KPIT Technologies
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
KPIT IN
198.3
34 / 0.6
186 / 92
19 / 31 / 52
CMP: INR174

Y/E March
Sales
EBITDA
PAT
EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div yld (%)
2013 2014E 2015E

22.4 28.0 31.9
3.7
4.5
5.3
2.0
2.8
3.4
10.6 13.9 17.0
31.5 31.8 22.6
53.3 64.5 81.6
22.7 23.6 23.3
30.2 29.4 28.7
9.5
7.2
8.8
16.5
3.3
8.5
0.6
12.5
2.7
6.4
0.6
10.2
2.1
4.8
0.9
2016E
36.4
6.1
4.0
20.1
18.0
101.7
22.0
27.2
7.5
8.6
1.7
3.5
0.9
Neutral
KPIT expects revenue growth in 3QFY14 to be higher than in 2QFY14.

We expect USD revenue to grow 3.6% QoQ to USD116m. In INR terms,
we expect revenue growth of 2.5% QoQ to INR7.2b.
We expect EBITDA margin to expand 60bp QoQ to 16.1%.On the back
of absence of two one-offs that hurt margins in 2QFY14: [1] leadership
training at Stanford: -71bp(INR50m), and [2] industry event
sponsorship: -43bp (INR30m). Consequently our SGA estimate for the
quarter stands at 16.1%, -200bp QoQ. In absolute terms, our SGA
estimate is INR1,160m v/s INR1,275m in 2QFY14.
Our PAT estimate for the quarter is INR664m, down 0.4% QoQ. Our PAT
margin estimate is 9.2%, down 30bp QoQ. PAT would be sequentially
lower on account of an estimated forex loss of INR45m v/s loss of
INR14m in 2QFY14.
KPIT has guided a revenue band of USD465m-475m for FY14, implying
growth at 13.3-15.7%, which would be revisited this quarter. We
estimate FY14 revenue at USD461m, a growth of 12.2%.

Growth in top account (Cummins) and SAP.
Revision in full year revenue guidance.
Margins performance and outlook.
(INR Million)
Y/E March
Revenues
QoQ Change (%)
Direct Expenses
SG&A
EBITDA
Margins (%)
Other Income
Depreciation
Interest
PBT bef. Extra-or dinary items
Pr ovision for Tax
Rate (%)
PAT after MI
QoQ Change (%)
PAT aft. Minority and EO
QoQ Change (%)
Diluted EPS (INR)
USD Revenues
QoQ Change (%)
Offshore util. (%)
Onsite util. (%)
E: MOSL Estimates
January 2014
FY13
1Q
5,383
42.1
3,506
1,065
812
15.1
30
113
35
694
185
26.6
486
16.9
27
513
24.9
2.8
98
33.5
74.1
94.7
2Q
5,672
5.4
3,703
1,024
945
16.7
-191
114
34
605
191
31.6
407
(16.8)
55
461
(10.0)
2.5
103
5.5
74.7
94.5
3Q
5,633
4.7
3,706
1,045
882
15.7
77
118
42
800
183
22.8
599
47.2
-94
504
(1.6)
2.7
103
0.0
72.9
92.8
FY14
4Q
5,699
1.2
3,725
963
1,011
17.7
-86
121
42
762
207
27.1
512
(19.3)
0
512
1.5
2.6
106
2.0
74.1
94.3
1Q
6,132
7.6
4,200
960
972
15.9
59
122
63
847
246
29.0
601
17.5
0
601
17.5
3.0
109
3.1
73.4
94.2
2Q
7,028
14.6
4,665
1,274
1,088
15.5
23
148
74
889
222
24.9
667
11.0
0
667
11.0
3.4
112.2
3.1
72.9
92.4
3QE
7,206
2.5
4,889
1,160
1,157
16.1
1
156
69
933
269
28.8
664
(0.4)
0
664
(0.4)
3.4
116
3.6
73.0
92.0
4QE
7,648
6.1
5,070
1,247
1,332
17.4
39
153
67
1,151
331
28.8
819
23.3
0
819
23.3
4.1
123
6.1
75.0
94.0
FY13
FY14E
22,386
50.3
14,640
4,096
3,650
16.3
-170
466
154
2,860
766
26.8
2,003
62.0
-13
1,990
63.8
10.6
410
33.6
73.9
94.1
28,014
25.1
18,823
4,642
4,549
16.2
122
579
272
3,820
1,068
27.9
2,753
43.6
0
2,753
38.3
13.9
461
12.2
73.6
93.1
C174
MindTree
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
MTCL IN
41.5
65 / 1
1,599 / 680
10 / 76 / 113
CMP: INR1,556

Y/E March
Sales
EBITDA
PAT
EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div Yld (%)
2013 2014E 2015E

23.6 30.4 35.1
4.9
6.0
7.4
3.4
4.7
5.4
81.7 113.3 129.7
52.2 38.6 14.5
314.5 386.4 496.4
25.8 32.3 29.4
37.0 35.5 34.6
14.7 13.2 13.1
2016E
40.2
8.6
6.2
147.7
13.9
622.1
26.4
31.7
12.9
19.0
4.9
12.2
0.8
13.7
4.0
9.7
1.0
12.0
3.1
7.5
1.1
10.5
2.5
6.0
1.2
Neutral
We model 3QFY14 revenue at USD127.8m, a growth of 3% QoQ. The

company expects furloughs to impact revenue growth in 3Q; the
Hi-tech vertical continues to be volatile.
In INR terms, our revenue estimate stands at INR7.9b, up 2.9% QoQ.
QoQ depreciation in average realized INR is usually different at MTCL
than for peers due to its accounting practice of taking prevailing USD
rate at the beginning of the month for the whole month.
Our EBITDA margin estimate is 19.4%, down 140bp QoQ. Wage hikes
to 20% of personnel at MTCL along with investments in people would
pull margins down.
Our PAT estimate for the quarter is INR986m, which implies a PAT
margin of 12.4%, well below 16.7% in the previous quarter, which was
inflated by forex gains of INR200m. We model INR163m of forex losses
during the quarter.
MTCL had reiterated its confidence of improving its growth rate in
FY14 v/s FY13. The confidence emanates from deal wins worth
~USD400m in the last three quarters.
The stock trades at 13.7x FY14E and 12x FY15E EPS. Maintain Neutral.

Performance and outlook for the Hi-tech vertical.
Deal wins on the back of strong couple of quarters.
Outlook on FY15 based on early conversations with top clients.
(INR Million)
Y/E March
Revenues
Q-o-Q Change (%)
Direct Expenses
SGA
Operating Profit
Margins (%)
Other Income
Forex Gain / (Loss)
Depreciation & Amort.
Interest
Pr ovision for Tax
Rate (%)
Reported PAT
Q-o-Q Change (%)
USD Revenue
Q-o-Q Change (%)
Util including trainees (%)
E: MOSL Estimates
January 2014
FY13
1Q
5,630
23.3
3,442
1,014
1,174
20.9
52
86
159
3
1,150
260
22.6
890
63.3
105.5
4.1
68.9
2Q
5,963
5.9
3,570
1,074
1,319
22.1
74
-415
159
4
815
93
11.4
722
-18.9
107.3
1.7
71.7
3Q
5,901
-1.0
3,517
1,180
1,204
20.4
70
142
151
2
1,263
275
21.8
988
36.8
109.9
2.5
71.4
FY14
4Q
6,124
3.8
3,745
1,216
1,163
19.0
154
-153
155
1
1,008
219
21.7
789
-20.1
113.0
2.8
69.6
1Q
6,477
5.8
3,824
1,462
1,191
18.4
117
618
181
1
1,744
390
22.4
1,354
71.6
117.7
4.2
69.6
2Q
7,696
18.8
4,448
1,650
1,598
20.8
48
200
197
2
1,647
360
21.9
1,287
-4.9
124.0
5.4
65.9
3QE
7,922
2.9
4,684
1,698
1,539
19.4
107
-163
201
2
1,280
294
23.0
986
-23.4
127.8
3.0
67.0
4QE
8,255
4.2
4,805
1,734
1,717
20.8
108
-161
216
2
1,446
333
23.0
1,114
13.0
133.1
4.2
67.0
FY13
FY14E
23,618
23.3
14,274
4,484
4,860
20.6
350
-340
624
10
4,236
847
20.0
3,389
55.1
435.7
8.2
70.4
30,350
28.5
17,761
6,544
6,045
19.9
380
494
795
7
6,117
1,377
22.5
4,740
39.9
502.6
15.4
67.3
C175
Mphasis
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
MPHL IN
210.0
89 / 1
513 / 335
4/5/2
CMP: INR425

Y/E October
2012 2013 Mar.14E Mar.15E
Sales
53.6 58.0
26.5
66.8
EBITDA
10.5 10.3
4.6
12.5
PAT
7.9
7.4
3.4
8.8
EPS (INR)
37.5 35.3
16.0
42.0
EPS Gr. (%)*
-4.6
-5.8
8.4
9.5
BV/Sh. (INR)
210
235
243
260
RoE (%)*
19.1 15.9
16.1
16.7
RoCE (%)*
19.6 17.4
17.4
18.8
Payout (%)
45.3 48.1
43.8
50.0
Valuations
P/E (x)*
11.3 12.0
11.1
10.1
P/BV (x)
2.0
1.8
1.8
1.6
EV/EBITDA (x)* 6.0
6.8
6.4
5.1
Div yld (%)
4.0
4.0
4.0
4.9
*Annualized values for 5m FY14E
Neutral
We model revenue at USD262.6m, which implies 1.1% QoQ growth,

driven by large deal ramp-up at Digital Risk and growth in mature
markets.
HP revenues continue to decline and we have modeled INR200m of
reversal of receivables outstanding from India Government.
Digital Risk remains the sole growth engine for Mphasis, given that
the current run rate excludes the new deal win of USD102m (to be
executed over three years) and the other large deal of USD101m too is
not at steady state. Revenues from Digital Risk should continue to
grow at a fast clip.
In INR terms, we estimate revenue at INR15.9b, down 0.1% QoQ.
EBITDA margin should expand 10bp QoQ to 17.6%. We expect EBITDA
to be flattish (up 0.2% QoQ) at INR2.79b.
We expect SG&A expense to go up by 90bp to 10.3% v/s 9.4% in 3QFY13.
We have assumed tax rate at 26% for the quarter.
We expect PAT to increase by 5% QoQ to INR2.02b. Our PAT margin
estimate is 11.5%, down 100bp QoQ due to incremental investments
in S&M as guided by the management.
The stock trades at 11.1x FY14E and 10.1x FY15E EPS. Maintain Neutral.

Outlook for Digital Risk, HP Channel and Direct Channel.
Change in headcount and hiring outlook.
Mphasis - Quarterly Performance

Y/E October
Revenues
Q-o-Q Change (%)
Direct Expenses
Sales, Gen. & Admin. Exp.
Operating Profit
Margins (%)
Other Income
Depreciation
Pr ovision for Tax
Rate (%)
PAT bef. Extra-or dinary
Q-o-Q Change (%)
Diluted EPS (INR)
USD Revs
Q-o-Q Change (%)
E: MOSL Estimates
January 2014
1Q
2Q
13,672 13,289
5.7
-2.8
9,995
9,454
1,155
1,221
2,522
2,614
18.4
19.7
338
340
468
455
2,392
2,499
544
605
22.7
24.2
1,848
1,894
-5.1
2.5
8.8
9.0
271
266
-2.0
-1.8
(INR Million)
FY12
FY13
5MFY14
FY13E
5M
3Q
4Q
1Q
2Q
3Q
4Q Jan-14 Mar-14
FY14E
13,551 13,062 12,571 14,054 15,398 15,940 15,931 10,535 57,963 26,465
2.0
-3.6
-5.4
11.8
9.6
3.5
-0.1
-33.9
8.2
-54.3
9,596
9,088
9,052 10,168 11,136 11,602 11,575 7,657 41,958 19,232
1,280
1,274
1,191
1,468
1,463
1,548
1,559
1,039
5,670
2,597
2,675
2,700
2,328
2,418
2,799
2,790
2,797
1,839 10,335 4,636
19.7
20.7
18.5
17.2
18.2
17.5
17.6
17.5
17.8
17.5
441
394
423
290
193
156
168
366 1,062
534
415
407
378
350
365
353
358
241 1,446
599
2,701
2,687
2,373
2,358
2,627
2,593
2,607
1,965
9,951
4,572
614
594
529
593
701
691
691
521 2,514
1,212
22.7
22.1
22.3
25.1
26.7
26.6
26.5
26.5
25.3
26.5
2,087
2,093
1,844
1,765
1,926
1,902
1,916
1,444
7,437
3,360
10.2
0.3
-2.6
-4.3
9.1
-1.2
0.8
-24.6
-6.1
-54.8
9.9
9.9
8.8
8.4
9.2
9.0
9.1
6.9
35.3
16.0
252
248
237
263
265
260 262.6
117.6
1,025
380
-5.2
-1.6
-6.0
11.0
1.0
-2.1
1.1
-55.2
-1.1
-62.9
C176
Persistent Systems
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
PSYS IN
40.0
40 / 1
1,058 / 477
9 / 85 / 83
CMP: INR988

Y/E March
Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Gr. (%)
B V/Sh.(INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2013 2014E 2015E

12.9 16.9 19.7
3.4
4.2
4.7
1.9
2.4
2.9
46.9 59.9 73.7
31.2 27.6 23.0
262.1 300.5 360.0
20.2 21.9 23.0
14.8 16.1 17.7
19.2 20.0 19.0
21.1
3.8
10.3
0.9
16.5
3.3
7.9
1.2
13.4
2.7
6.8
1.4
2016E
23.1
5.6
3.6
90.3
22.6
434.2
23.4
18.2
17.7
10.9
2.3
5.4
1.6
Buy
We expect PSYS' overall USD revenue to grow 3.2% QoQ to USD70.7m.

In INR terms, we expect revenue to grow 1.3% to INR4.38b.
Growth in Services is expected to be driven by platforms, with product
engineering expected to be relatively muted. IP revenues are
expected to be flat as license revenues in the location based IP in 2Q
will be replaced by HPCA revenue ramp up in 3Q.
We expect EBITDA margin to decline 150bp QoQ to 24.5%. On the back
of lower license sales in this quarter and the costs related to Ohio
centre, which is yet to start generating revenues.
PSYS continues to see healthy traction in terms of deal pipeline and
revenues in its major geography, the US. The seasonal weakness in 3Q
is not as likely to impact growth during the quarter.
While IP-led revenues will remain volatile, PSYS expects to grow the
segment by 20%+ YoY. It remains confident of healthy organic growth
in the IP segment, driven by HPCA, Connectors, TNPM and r-Cloud.
Our PAT estimate for the quarter is INR523m, down from INR608m in
the previous quarter due to lower other income (loss of INR66m v/s
INR24m in 2Q) on the back of forex losses and higher tax rate.

Traction in SMAC and outlook on Product Engineering Services growth.
Commentary on potential of winning large deals.
Commentary on HPCA (Radia) renewals and overall IP revenues
expectation.
(INR Million)
Y/E March
Revenues
Q-o-Q Change (%)
EBITDA
Margins (%)
Other Income
Depreciation
Pr ovision for Tax
Rate (%)
PAT aft. Minority and EO
Q-o-Q Change (%)
Diluted EPS (INR)
USD Revenues
Q-o-Q Change (%)
E: MOSL Estimates
January 2014
FY13
1Q
3,007
12.3
807
26.8
-47
185
575
160
27.7
416
-0.7
10.4
54.9
6.3
2Q
3,269
8.7
890
27.2
-78
189
623
176
28.3
446
7.4
11.2
60.1
9.4
3Q
3,330
1.9
824
24.7
84
198
710
215
30.3
495
10.9
12.4
60.8
1.2
FY14
4Q
3,340
0.3
831
24.9
102
211
722
203
28.1
519
4.8
13.0
62.1
2.2
1Q
3,573
7.0
777
21.7
263
237
803
232
28.9
571
10.0
14.3
63.0
1.5
2Q
4,324
21.0
1,122
26.0
-24
263
835
227
27.2
608
6.5
15.2
68.5
8.6
3QE
4,381
1.3
1,072
24.5
-66
264
742
219
29.5
523
-13.9
13.1
70.7
3.2
4QE
4,666
6.5
1,233
26.4
13
264
982
290
29.5
693
32.4
17.3
75.3
6.5
FY13
FY14E
12,945
29.4
3,352
25.9
61
783
2,630
754
28.7
1,876
31.2
46.9
237.8
14.7
16,943
30.9
4,204
24.8
186
1,027
3,363
968
28.8
2,395
27.6
59.9
277.4
16.6
C177
Tata Consultancy Services

Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
TCS IN
1,958.7
4,229 / 68
2,258 / 1,248
5 / 33 / 63
2013
629.9
180.9
139.4
71.2
31.0
209.8
37.8
43.8
30.9
2014E
824.2
255.0
189.4
96.7
35.7
264.1
40.8
49.8
33.1
30.3
10.3
23.0
1.0
22.3
8.2
16.1
1.5

Y/E March
Sales
EBITDA
PAT
EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. yield (%)
CMP: INR2,159
2015E 2016E
944.3 1,088.9
280.6
317.0
216.1
247.3
110.3
14.1
14.1
19.1
337.0
422.3
36.7
43.5
43.5
39.3
29.0
11.9
19.6
6.4
14.3
1.5
17.1
5.1
12.2
1.6
Neutral
We expect revenue to grow 3.6% QoQ to USD3,457m. Break-up of the

3.6% QoQ revenue growth: [1] 2.6% QoQ due to organic revenue growth
in constant currency, [2] 1% QoQ due to positive cross-currency impact
(4.4% GBP appreciation against USD).
In INR terms, we expect revenue growth of 2.2% QoQ to INR214.3b.
We expect operating margin to be flat on constant currency basis.
Currency movements are likely to result in a margin headwind of 2530bp. We are currently modeling QoQ EBIT margin expansion of 10bp
to 30.3%.
Our SGA assumption for the quarter is 17.4% (v/s 17.3% in 2QFY14).
We expect positive other income of INR4.8b (v/s a negative INR427m
in 2QFY14), driven by forex gain of INR1.75b during the quarter (v/s
loss of INR3.3b in 2QFY14).
Our PAT estimate stands at INR52.5b, up 11.8% QoQ and implies PAT
margin of 24.5%, up 210bp QoQ. Our effective tax rate assumption is
24% (down 80bp QoQ).
TCS has mentioned that there are initial indicators of FY15 being better
than FY14.
The stock trades at 22.3x FY14E and 19.6x FY15E EPS. Maintain Neutral.

Client budgets and outlook for FY15 compared to growth in FY14.
Probability of higher growth due to reinvestment of currency gains.
Roadmap on investments of currency gains to pull margin back to
~27%
Quarterly Performance (IFRS)
(INR Million)
Y/E March
Revenues
Q-o-Q Change (%)
EBITDA
Margins (%)
Other Income
PAT
Q-o-Q Change (%)
Diluted EPS (INR)
USD Revenues
Q-o-Q Change (%)
Operating Metrics
Gross Margin (%)
SGA (%)
Tax rate (%)
Util - excl. trainees (%)
Q-o-Q Volume Gr (%)
E: MOSL Estimates
January 2014
FY13
FY14
1Q
148,687
12.1
43,328
29.1
1,754
32,806
11.9
16.8
2,728
3.0
2Q
156,208
5.1
44,403
28.4
3,103
35,121
7.1
17.9
2,853
4.6
3Q
160,699
2.9
46,540
29.0
2,133
35,518
1.1
18.1
2,948
3.3
4Q
164,301
2.2
46,599
28.4
4,185
35,969
1.3
18.4
3,040
3.1
1Q
179,871
9.5
51,532
28.6
2,517
37,962
5.5
19.4
3,165
4.1
2Q
209,772
16.6
66,390
31.6
-427
47,018
23.9
24.0
3,337
5.4
3QE
214,328
2.2
67,984
31.7
4,686
52,584
11.8
26.8
3,457
3.6
47.2
18.1
22.2
81.3
5.3
46.4
18.0
21.0
81.6
5.0
47.4
18.4
21.8
81.7
1.3
47.8
19.4
23.9
82.0
4.4
47.2
18.6
24.1
82.7
6.1
49.0
17.3
24.8
83.4
7.8
49.1
17.4
24.0
84.2
2.7
FY13
FY14E
4QE
220,243 629,895
2.8
28.8
69,123 180,870
31.4
28.7
2,551
11,174
51,790 139,413
-1.5
31.0
26.4
71.2
3,552
11,568
2.8
13.7
824,214
30.8
255,029
30.9
9,326
189,354
35.8
96.7
13,511
16.8
49.0
17.7
24.0
84.8
2.4
47.2
18.5
22.3
81.7
15.2
48.6
17.7
24.2
83.8
17.6
C178
Tech Mahindra
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
TECHM IN
231.9
432 / 7
1,872 / 895
6 / 61 / 93
Financials & Valuation (INR b)*

Y/E March
2013
Sales
143.3
EBITDA
30.6
Adj. PAT
19.8
Adj. EPS (INR)
93.0
EPS Gr. (%)
32.1
B V/Sh.(INR)
321.3
RoE (%)
32.6
RoCE (%)
35.3
Payout (%)
5.9
Valuations
P/E (x)
20.0
P/BV (x)
5.8
EV/EBITDA (x)
11.6
Div. Yield (%)
0.3
* TECHM standalone
CMP: INR1,861
2014E
186.6
41.4
27.0
126.6
36.2
409.8
35.1
35.2
4.0
2015E
211.9
46.5
32.4
149.7
18.2
538.8
32.5
32.3
3.4
2016E
242.0
52.6
37.5
172.5
15.3
653.7
29.7
30.4
2.9
15.1
4.6
8.3
0.3
12.7
3.5
7.2
0.3
10.8
2.9
6.0
0.3
Buy
We expect revenue to grow 3.1% QoQ to USD782m, aided by large

deal traction and pick-up in demand for Enterprise Business Solutions
(EBS, 20% of Satyam's revenues) and Business Intelligence (5-6% of
revenues).
In INR terms, we expect revenue growth of 1.6% QoQ to INR48.5b.
Our SGA assumption for the quarter is 16.5% (v/s 16.3% in 2QFY14).
We expect EBITDA margin to decline by 10bp QoQ to 23.2% on account
of 70bp drop in utilization due to shutdown and furloughs experienced
during the quarter.
Our PAT estimate is INR6.67b (after adjusting for restructuring fees), a
decline of 2.5% QoQ. This implies PAT margin of 13.8%, down 60bp
QoQ due to higher forex losses (INR910m v/s INR260m in 2QFY14).
Our other income estimate is a loss of INR278m v/s a gain of INR380 in
2QFY14.

Commentary on large deal traction and deals TCV following a healthy
2Q.
Commentary on BT and Telecom vertical outlook.
Large deal progress in the Enterprise business at Satyam.
(INR Million)
Y/E March
Revenues
Q-o-Q Change (%)
Direct Cost
Other Operating Exps
Operating Profit
Margins (%)
Other Income
Interest
Depreciation
Pr ovision for Tax
Rate (%)
Minority Interest
Net Income bef. Extra-ordinary
Q-o-Q Change (%)
Adj. for Restructuring item
Extra-ordinary items
Net Income aft. EO & R estr. fees
Q-o-Q Change (%)
Diluted EPS (INR)
USD Revenues
Q-o-Q Change (%)
E: MOSL Estimates
January 2014
FY13
1Q
33,727
21,007
5,328
7,392
21.9
1,129
251
915
7,355
1,911
26.0
-40
5,404
335.0
0
5,069
1.5
23.8
615
2Q
35,237
4.5
22,271
5,397
7,569
21.5
-697
214
908
5,750
1,176
20.5
-15
4,559
-15.6
335.0
0
4,224
-16.7
19.8
644
4.7
3Q
36,683
4.1
22,761
5,965
7,957
21.7
1,308
204
866
8,195
1,931
23.6
-109
6,155
35.0
335.0
-2,940
2,880
-31.8
27.3
675
4.7
FY14
4Q
37,673
2.7
23,968
5,992
7,713
20.5
381
253
1,207
6,634
1,461
22.0
-137
5,036
-18.2
335.0
1,340
6,041
109.8
22.0
698
3.5
1Q
41,032
8.9
25,693
6,694
8,645
21.1
2,073
223
1,174
9,321
2,328
25.0
-130
6,863
36.3
335.0
0
6,528
8.1
30.7
724
3.7
2Q
47,715
16.3
28,826
7,779
11,110
23.3
380
241
1,222
10,027
2,840
28.3
-4
7,183
4.7
335.0
0
6,848
4.9
32.1
758
4.7
3QE
48,472
1.6
29,242
7,998
11,233
23.2
-278
163
1,256
9,535
2,479
26.0
-50
7,006
-2.5
335.0
0
6,671
-2.6
31.3
782
3.1
4QE
49,370
1.9
30,810
8,146
10,414
21.1
517
68
1,267
9,596
2,495
26.0
-50
7,051
0.6
111.7
0
6,939
4.0
32.5
796
1.9
FY13
FY14E
143,320
186,589
30.2
114,570
30,617
41,401
22.2
2,692
696
4,919
38,479
10,142
26.4
-234
28,103
32.9
1,116.7
0
26,986
48.2
126.6
3,060
16.2
90,007
22,682
30,631
21.4
2,121
922
3,896
27,934
6,479
23.2
-301
21,154
56.8
1,340.0
-1,600
18,214
53.2
93.0
2,633
C179
Wipro
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
WPRO IN
2,465.1
1,369 / 22
558 / 315
14 / 48 / 34

Y/E March
Sales
EBITDA
PAT
EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div Yld (%)
2013 2014E 2015E

374.3 435.1 489.7
83.7 96.4 108.4
61.4 77.0 86.3
25.0 31.4 35.1
17.3 25.5 12.1
115.6 133.0 158.8
21.6 25.2 24.1
21.9 25.6 25.4
28.0 23.9 22.8
22.2
4.8
16.3
1.3
17.7
4.2
12.9
1.4
15.8
3.5
11.2
1.4
2016E
550.8
120.5
96.9
39.5
12.3
186.6
22.9
24.5
25.3
14.1
3.0
9.8
1.8
CMP: INR555
Buy
Wipro had guided a revenue growth band of 1.8%-3.6% QoQ for

3QFY14, implying revenue of USD1,660m-1,690m. We model revenue
growth at the midpoint of the guided band (2.4% QoQ in constant
currency terms; 3.2% QoQ in reported currency terms) to USD1,684m.
We expect SGA to be 12.1% (v/s 12.3% in 2Q) and overall EBIT margin
to expand 180bp QoQ to 20.6%. This is because the revenue in 2Q
excluded translation gains on currency.
We expect net employee additions of 3,715 (v/s a reduction of 65 in

2QFY14).
IT Services EBIT margin is likely to decline by 10bp QoQ to 22.4%.
Our PAT estimate for the quarter is INR18.4b, an increase of 13.6%

QoQ.
We expect Wipro to sustain its performance for the future quarters as

well, and guide 2-4% QoQ growth in constant currency.

Revenue growth guidance for 4QFY14.
Commentary on large deal wins and ramp-up schedule.
Outlook on growth in Americas.
Wipro Quarterly Performance (IFRS)

Y/E March
Revenues
Q-o-Q Change (%)
EBIT
Margins (%)
Other Income
PAT
Q-o-Q Change (%)
Y-o-Y Change (%)
Diluted EPS (INR)
USD Revenues
Q-o-Q Change (%)
Gross Margin (%)
SGA (%)
IT Services EBIT (%)*
Tax rate (%)
Utilization-incl.trainees (%)
Offshore revenues (%)
Rev Guidance (USDm)
(INR Million)
FY13
1Q
2Q
106,530 106,566
7.9
0.0
18,722
18,587
17.6
17.4
1,223
2,662
15,802
16,106
6.7
1.9
18.4
23.8
6.4
6.6
1,515
1,541
-1.4
1.7
31.6
31.3
14.0
13.9
21.0
20.7
20.2
23.9
2,632
2,017
68.3
66.8
46.2
46.6
1,5201,5201,550
1,550
3Q
109,487
2.7
18,700
17.1
3,402
17,164
6.6
17.9
7.0
1,577
2.4
31.0
13.9
20.2
21.9
2,336
64.8
46.2
1,5601,590
FY14
4Q
96,078
-12.2
17,067
17.8
2,744
17,373
1.2
17.3
6.4
1,585
0.5
30.3
12.5
20.2
20.1
2,907
64.9
46.6
1,5851,630
1Q
2Q
3QE
97,294 107,727 112,855
1.3
10.7
4.8
17,650
20,229
23,267
18.1
18.8
20.6
2,918
4,949
2,831
16,233
19,321
19,993
-6.6
19.0
3.5
2.7
20.0
16.5
6.6
7.8
8.1
1,588
1,631
1,684
0.2
2.7
3.2
30.9
31.1
32.7
12.8
12.3
12.1
20.0
22.5
22.4
20.7
22.9
23.0
1,469
-65
3,715
64.7
66.1
66.1
46.1
45.8
46.0
1,5751,6201,6601,610
1,650
1,690
FY13
FY14E
4QE
117,222 374,256 435,097
3.9
17.4
16.3
25,032
67,346
86,179
21.4
18.0
19.8
2,953
11,250
13,652
21,446
61,362
76,993
7.3
23.4
17.3
25.5
8.7
25.0
31.4
1,735
6,218
6,638
3.0
5.0
6.8
33.3
30.4
32.1
12.0
12.4
12.3
23.3
20.5
22.1
23.0
21.5
22.5
4,165
9,892
9,284
66.9
66.7
66.2
46.4
37.4
46.1
E: MOSL Estimates
January 2014
C180
December 2 013 Result s Preview | Sect or: Telecom
Telecom
Companies Covered
Bharti Airtel
Bharti Infratel
Idea Cellular
Reliance Communication
Expect seasonal uptick in traffic, though offset by lower discounting and Odisha cyclone
impact: We expect average wireless traffic (Bharti/Idea/RCom/Vodafone) to increase
by ~3% QoQ in 3QFY14 against 3.6% QoQ decline in 2QFY14 and 2.9% growth in 3QFY13.
At the industry level, there has been a volume impact of lower discounted minutes
during the festive season and disruption due to cyclone in Odisha (contributes 2% of
industry revenue).
Blended RPM to improve by ~1% QoQ: Post 4-8% RPM increase in 1HFY14 (v/s 4QFY13),
we expect RPM to improve ~1% QoQ on a blended basis, largely led by data growth.
We expect voice RPM to remain largely flat QoQ, as bulk of the tariff actions undertaken
earlier this year have already reflected in the 2QFY14 numbers.
EBITDA margin to remain stable for Bharti/Idea: We expect EBITDA margin to remain
largely stable QoQ. While Idea is likely to witness a disproportionate growth in network
costs due higher site rollout intensity, 3QFY14 has been traditionally marked with
higher sales and marketing cost for Bharti India.
Bharti Africa operational momentum to remain strong: We believe that operational
momentum in the Africa business remains strong. Operations in Nigeria have been
returning to normalcy post the earlier impact of shutdowns. We model 2-3% QoQ
growth in USD denominated revenue/EBITDA for Bharti Africa after factoring an impact
of ~4% QoQ due to adverse movement in the local currency basket v/s USD.
Abbreviations and acronyms

RPM: revenue per minute
TRAI: Telecom R egulat or y
Authority of India
ARPU: average revenue per
user
MOU: minutes of use
Subscriber additions normalizing: Subscriber additions during 3QFY14 seem to be

normalizing at ~5m/month for the industry post sharp decline in September 2013 due
to change in subscriber reporting criteria by RCom.
Spectrum auction key event to watch: We attended the pre-bid conference organized
by the Department of Telecom (DoT) for the upcoming spectrum auction in February
2014. Key issues raised by the industry included: (1) ascending spectrum usage charge
(SUC) regime (3-8% v/s flat 3% for auctioned spectrum recommended by TRAI) being
a disincentive for incumbents to bid for additional spectrum, (2) need to increase
visibility on contiguity/continuity of spectrum being bid for, and (3) ensuring a
minimum 5MHz spectrum block for operators planning to bid for the 900/1,800MHz
Bharti Airtel
Bharti Infratel
Idea Cellular
Reliance Comm
Sector Aggregate
CMP
(INR)
27.12.13
329
168
167
131
(INR Million)
Rating
Dec.13
Buy
Neutral
Buy
Neutral
219,792
27,493
65,731
55,457
368,472
Sales
Var.
% YoY
13.5
4.7
17.8
4.6
12.1
Var. Dec.13
% QoQ
3.1 70,565
2.4 10,994
3.9 20,748
2.8 19,746
3.1 122,053
EBITDA
Var.
% YoY
22.2
12.0
40.8
19.4
23.5
Var.
% QoQ
3.3
2.5
5.2
4.7
3.8
Net Profit
Dec.13
Var.
% YoY
11,315
298.9
3,534
39.1
5,058
121.3
3,293
188.3
23,200
163.5
Var.
% QoQ
121.0
27.4
13.0
21.0
53.7
Shobhit Khare (Shobhit.Khare@MotilalOswal.com)

January 2014
C181
spectrum exclusively for 3G/4G rollouts. In contrast with the cold response to the
earlier two spectrum auctions held in November 2012 and March 2013, we believe the
industry is warming up to the upcoming spectrum auctions.
Valuation and view: During FY13-16, we expect 15/23/14% EBITDA CAGR for Bharti/
Idea/RCom led by 7/9/3% traffic CAGR and 2-4% RPM CAGR in the India wireless
business. Reiterate Buy on Bharti (trades at ~5.9x proportionate FY15E EV/EBITDA)
and Idea (trades at ~6.3x FY15E EV/EBITDA), and Neutral on RCom (trades at ~6.9x
FY15E EV/EBITDA).
Wireless subscriber net additions (m)
19 20 20
15 13
Industry subscriber
additions have stabilized
11
7 7 8 8
9 10
3
7 8
2
-1
-2 -1
-2 -2
-5
3 3 2 2
-6
-14
-21
Jan-11
Feb-11
Mar-11
Apr-11
May-11
Jun-11
Jul-11
Aug-11
Sep-11
Oct-11
Nov-11
Dec-11
Jan-12
Feb-12
Mar-12
Apr-12
May-12
Jun-12
Jul-12
Aug-12
Sep-12
Oct-12
Nov-12
Dec-12
Jan-13
Feb-13
Mar-13
Apr-13
May-13
Jun-13
Jul-13
Aug-13
Sep-13
Oct-13
-26
Source: TRAI, MOSL
QoQ wireless traffic growth (%)
5
2
3QFY14E
-3 -3
-6-5
2QFY14
1QFY13
4QFY12
3QFY12
34
2 3 13
-2 -3 -3
-4
2QFY12
1QFY12
-2 -2
1QFY14
We expect wireless traffic

to grow ~3% QoQ
4QFY13
V odafon e-Indi a
8
3QFY13
RCOM
2QFY13
Bh arti (Indi a )
Idea
9
7
7
5 4
4 5 3
4
2
10 1 1
Trend in wireless RPM (INR)

B harti
Idea
Vod afone -Indi a
RCOM
45
We expect blended RPM

to increase 1% QoQ
44.6
44.4
44.1
43.3
44
42
41
January 2014
3QFY14E
2QFY14
1QFY14
4QFY13
3QFY13
2QFY13
1QFY13
4QFY12
3QFY12
2QFY12
1QFY12
39
C182
Aggregate traffic growth and RPM trend for wireless majors
5
3
1
1
-1
QoQ tra ffi c growth (%)

6
4
QoQ RPM growth (%)

5
3
-2
0
-1
-2
2QFY14
12
12
3QF Y14E
1QFY14
4QFY13
-4
3QFY13
2QFY13
1QFY13
4QFY12
3QFY12
2QFY12
1QFY12
-3
Aggregate India wireless revenue growth (YoY, %)

15
11
7
4QFY13
3QFY13
2QFY13
1QFY13
4QFY12
3QFY12
2QFY12
1QFY12
13
*Bharti, Idea, RCom, Vodafone
3QFY14E
15
14
2QFY14
13
1QFY14
Aggregate revenue
growth to remain
strong at 13% YoY
2
3
Source: TRAI, MOSL
Net Debt/EBITDA (FY13)

5.9
3.2
2.6
Leverage remains
reasonable for Bharti/
Idea, but alarming for
RCom
RCom
Voda fone Indi a
Bh arti
2.1
Ide a
Net Debt/Equity (FY13)
1.4
1.2
0.9
RCo m
Idea
B harti

January 2014
C183
3QFY14: Summary Expectations

Wireless KPIs
1Q
4Q
1Q
FY13
2Q
3Q
1Q
FY14
2Q
3QE
YoY
(%)
QoQ
(%)
169
95
143
142
173
100
147
145
176
106
150
148
181
113
153
150
187
117
155
154
186
115
135
153
182
114
119
147
188
122
123
152
191
125
127
155
193
127
116
156
198
129
119
159
8.8
13.5
0.1
7.8
2.3
1.7
2.1
2.2
166
92
139
138
171
98
145
143
174
103
149
146
178
110
152
149
184
115
154
152
187
116
145
153
184
115
127
150
185
118
121
150
190
123
125
154
192
126
122
155
196
128
117
157
6.4
11.8
-7.3
4.8
1.8
1.7
-3.4
1.3
190
160
103
169
183
155
101
164
187
159
100
167
189
160
99
173
185
156
98
174
177
148
102
169
185
158
119
176
193
167
128
187
200
174
119
196
192
164
121
191
196
168
129
197
5.8
6.3
8.2
12.0
1.9
2.4
6.5
3.2
445
391
233
308
411
423
364
227
297
396
419
369
224
303
405
431
379
227
318
424
433
379
228
324
433
417
359
236
313
418
435
384
271
329
438
455
406
291
344
459
455
398
282
346
461
437
368
277
334
445
441
376
291
341
455
1.4
-2.0
7.5
3.8
3.8
1.0
2.2
5.0
2.2
2.2
42.8
40.9
44.4
54.8
41.1
43.2
42.6
44.7
55.2
41.4
44.6
43.1
44.5
55.0
41.3
43.8
42.2
43.7
54.4
40.8
42.7
41.2
43.1
53.6
40.2
42.6
41.2
43.2
53.9
40.4
42.6
41.1
43.8
53.6
40.2
42.4
41.1
43.9
54.3
40.7
44.0
43.7
42.0
56.6
42.5
44.0
44.6
43.5
57.2
42.9
44.4
44.6
44.1
57.8
43.3
4.3
8.5
0.6
7.9
7.9
0.9
0.1
1.4
1.0
1.0
221
109
98
128
170
217
106
99
128
170
219
114
100
133
178
231
124
103
142
190
239
131
105
148
197
234
126
102
144
192
241
132
103
148
197
253
143
105
155
207
258
147
106
160
213
251
259
7.6
3.1
139
145
9.5
4.3
102
103
-0.3
1.1
156
161
8.8
3.5
207
215
8.8
3.5
101
100
98
90
Dec-13
110
Nov-13
104
Oct-13
120
Sep-13
107
Dec-13
130
Sep-13
110
Sens ex Ind ex
MOSL Tel ecom Inde x
Jun-13
Sens ex Inde x
MOSL Tel ecom Inde x
Mar-13
January 2014
4Q
Dec-12
EOP Wireless Subs (m)

Bharti (India)
Idea
RCOM
Voda fone - India
AV. Wirele ss Subs (m)
Bharti (India)
Idea
RCOM
Voda fone - India
ARPU (INR/month)
Bharti (India)
Idea
RCOM
Voda fone - India
MOU/Sub
Bharti (India)
Idea
RCOM
Voda fone India (report ed)
Vodafone India (adj)
Revenue per min (p)
Bharti (India)
Idea
RCOM
Wireless traffic (B min)
Bharti (India)
Idea
RCOM
FY12
2Q
3Q
C184
Quarterly Financials (INR b)

1Q
Revenue
Bharti (ex Africa)
Bharti (consolidated)
Idea
RCOM
Vodafone - India (implie d)
EBITDA (INR b)
Bharti (ex Africa)
Idea
RCOM
EBITDA Margin (%)
Bharti (ex Africa)
Idea
RCOM#
PAT (INR b)
Bharti (ex Africa)
Idea
RCOM
EPS (INR)
Bharti
Idea
RCOM
Capex (INR b)
Bharti (ex Africa)
Idea
RCOM
FY12
2Q
3Q
4Q
1Q
FY13
2Q
3Q
4Q
1Q
FY14
2Q
3QE
YoY
(%)
QoQ
(%)
126.3
169.7
45.2
53.0
70.0
126.8
172.7
46.2
50.4
70.5
131.6
184.8
50.3
50.5
73.3
134.2
187.3
53.7
53.1
77.4
126.6
185.6
55.0
53.2
79.4
126.9
188.1
53.1
52.0
77.7
131.0
193.6
55.8
53.0
79.2
133.6
195.8
60.6
54.1
84.1
141.2
202.6
65.4
54.1
90.4
140.8
213.2
63.2
53.9
89.0
146.0
219.8
65.7
55.5
93.0
11.5
13.5
17.8
4.6
17.4
3.7
3.1
3.9
2.8
4.5
46.0
57.1
12.0
16.0
45.7
58.2
11.9
16.1
45.2
59.6
13.4
16.1
47.4
62.3
15.1
16.3
40.4
54.9
14.4
16.5
40.9
57.0
14.2
16.4
41.5
57.7
14.7
16.5
45.2
60.6
17.5
16.7
49.3
65.4
21.0
17.0
49.1
68.3
19.7
18.9
51.0
70.6
20.7
19.7
23.1
22.2
40.8
19.4
4.1
3.3
5.2
4.7
36.4
33.6
26.6
30.2
36.1
33.7
25.7
31.8
34.4
32.2
26.7
31.9
35.3
33.3
28.1
30.7
31.9
29.6
26.1
31.0
32.3
30.3
26.8
31.5
31.6
29.8
26.4
31.2
33.9
30.9
28.9
30.9
34.9
32.3
32.1
31.4
34.8
32.0
31.2
35.0
35.0
32.1
31.6
35.6
331bp
228bp
515bp
442bp
11bp
7bp
39bp
65bp
15.2
12.2
1.8
2.2
14.5
10.3
1.1
3.2
12.7
10.1
2.0
2.4
13.5
10.1
3.4
2.0
15.8
7.6
2.3
1.9
13.9
7.2
2.4
1.3
8.9
2.8
2.3
1.1
10.8
5.1
3.8
-2.4
14.8
6.9
4.9
1.3
14.0
5.1
4.5
2.7
19.0
11.3
5.1
3.3
114.1
298.9
121.3
188.3
35.5
121.0
13.0
21.0
3.2
2.7
2.7
2.7
2.0
1.9
0.7
1.3
1.8
1.3
2.8
278.9
121.0
0.5
1.1
0.3
1.6
0.6
1.2
0.7
1.0
0.7
0.9
0.7
0.6
0.7
0.6
0.9
-1.2
1.4
0.6
1.3
1.3
1.5
1.6
120.9
188.3
13.0
21.0
24.7
10.4
3.6
20.6
11.0
3.5
7.8
9.0
3.6
11.0
8.4
4.3
26.5
4.1
3.7
25.5
9.7
4.2
12.0
6.5
4.2
18.8
13.3
3.4
12.6
4.3
2.1
10.4
8.8
3.8
19.7
11.6
3.9
65.0
77.9
-5.2
89.3
31.6
3.0
CMP (INR)
27.12.13
Telecommunication
Bharti Airtel
329
Bharti Infratel
168
Idea Cellular
167
Reliance Comm
131
Sector Aggregate
January 2014
Rating
Buy
Neutral
Buy
Neutral
EPS (INR)
FY13 FY14E FY15E
6.0
5.6
3.1
0.9
9.1
7.3
6.0
5.7
15.7
8.8
9.2
12.0
P/E (x)
FY13 FY14E FY15E
54.8
30.2
54.8
139.1
54.9
36.2
23.2
27.7
22.9
30.2
20.9
19.2
18.3
10.9
18.3
EV/EBITDA (x)
FY13 FY14E FY15E
7.3
9.5
8.4
7.6
7.7
6.8
7.9
7.8
8.9
7.4
5.7
7.3
6.3
6.9
6.1
RoE (%)
FY13 FY14E FY15E
4.2
6.3
7.4
0.6
4.0
6.0
7.8
12.9
4.0
6.6
9.2
9.1
17.0
8.0
9.9
C185
Bharti Airtel
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
BHARTI IN
3,997.4
1,314 / 21
374 / 267
-2 / 5 / -6

Y/E March
Net Sales
EBITDA
Adj. Net Profit
Adj. EPS (INR)
Adj. EPS Gr. (%)
BV/Sh (INR)
RoE (%)
RoCE (%)
Div. Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2013
769.0
232.6
22.8
6.0
-46.6
143.4
4.2
4.3
10
2014E
862.3
278.6
35.9
9.1
51.3
164.4
6.0
5.6
10
54.8
2.3
8.1
0.2
36.2
2.0
7.3
0.3
2015E 2016E
950.9 1,033.7
320.2
353.9
62.7
81.2
15.7
20.3
73.0
29.5
177.1
194.4
9.2
10.9
6.9
7.5
10
10
20.9
1.9
6.0
0.5
16.2
1.7
5.1
0.6
CMP: INR329
Buy
We expect consolidated revenue to grow 13.5% YoY and 3% QoQ to

INR219.8b. We expect India revenue to grow 10% YoY to INR146b and
Africa business revenue to grow 3% QoQ to USD1.15b.
Consolidated EBITDA margin is likely to increase ~10bp QoQ. We
expect ~20bp QoQ EBITDA margin expansion for India business.
India mobile revenue is likely to grow 10% YoY to INR117.7b, driven by
7% YoY traffic growth (+3% QoQ) and YoY wireless RPM growth of 4%
(+1% QoQ). We estimate EBITDA margin for the mobile business at
33.5%, flat QoQ.
Africa business performance is likely to post 2.8/2.4% revenue/EBITDA
growth QoQ in USD terms. We estimate an ARPU of USD5.7 and
subscriber base of 68m.
Consolidated net profit is expected to increase ~3x YoY to INR11.3b.
We have assumed forex loss of INR2.1b in our 3QFY14 estimates.
Bharti trades at prop.EV/EBITDA of 7.3x FY14E and 5.9x FY15E. Buy.
RPM growth (we expect RPM to increase by ~1% QoQ), mobile traffic
in India business (we expect 3% QoQ growth), forex loss (we have
modeled INR2.1b forex loss), and Africa business financials (we expect
2-3% revenue/EBITDA growth in USD terms).

Y/E March
(INR Million)
FY13
1Q
2Q
3Q
4Q
Revenue
185,601 193,999 193,624 195,821
YoY Growth (%)
9.3
12.3
4.8
4.6
EBITDA
54,856
59,369
57,749
60,605
YoY Growth (%)
-3.9
2.1
-3.1
-2.8
QoQ Growth (%)
-12.0
8.2
-2.7
4.9
Margin (%)
29.6
30.6
29.8
30.9
Net Finance Costs
7,367
9,250
12,310
11,157
Shar e of JV/associa t e /others
706
982
943
875
Depreciation & Amortization
35,901
36,891
37,350
38,006
Profit before Tax
12,294
14,211
9,032
12,317
Income Tax Expense / (Income)
4,543
7,195
6,192
7,254
Profit after Tax
7,751
7,016
2,839
5,063
Minority interest
-129
196
-2
23
Reported Net Profit / (Loss)
7,622
7,212
2,836
5,086
YoY Growth (%)
-37.3
-29.8
-72.0
-49.4
India - Mobile ARPU (INR/month)
185
177
185
193
India - Mobile MOU/sub/month
433
417
435
455
Consolidated net debt (INR b)
656
612
585
586
India - Mobi le Traffic (B Min)
239
234
241
253
QoQ Growth (%)
3.7
-2.1
2.8
5.1
India - Mobile RPM (p/min)
42.7
42.6
42.6
42.4
QoQ Growth (%)
-2.6
-0.2
-0.1
-0.5
Africa - Revenue (USD m)
1,066
1,097
1,133
1,120
Africa - EBITDA (USD m)
275
298
300
285
Africa - EBITDA margin (%)
25.8
27.1
26.5
25.4
E: MOSL Estimates
January 2014
FY14
1Q
2Q
3QE
202,639 213,244 219,792
9.2
9.9
13.5
65,449
68,321
70,565
19.3
15.1
22.2
8.0
4.4
3.3
32.3
32.0
32.1
11,676
16,111
9,528
3,075
833
1,651
38,470
39,394
40,209
18,377
13,649
22,479
9,685
8,635
11,292
8,693
5,015
11,187
-1,804
106
129
6,889
5,120
11,315
-9.6
-29.0
298.9
200
192
196
455
437
441
593
620
587
258
251
259
2.1
-2.7
3.0
44.0
44.0
44.4
3.9
0.0
0.9
1,062
1,119
1,151
283
301
308
26.7
26.9
26.7
FY13
FY14E
4QE
226,630 769,045 862,304
15.7
7.6
12.1
74,237 232,579 278,573
22.5
-1.9
19.8
5.2
32.8
30.2
32.3
9,259
40,085
46,574
1,756
3,506
7,315
41,028 148,148 159,101
25,707
47,852
80,212
13,292
25,183
42,903
12,415
22,669
37,309
129
88
-1,441
12,544
22,757
35,869
146.6
-46.6
57.6
201
185
197
450
436
444
567
586
567
269
968
1,038
4.0
44.7
42.4
44.3
0.8
1,180
4,416
4,512
320
1,157
1,211
27.1
26.2
26.8
C186
Bharti Infratel
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
BHIN IN
1,888.7
318 / 5
216 / 126
3 / 0 /-

Y/E March
2013 2014E 2015E
Net Sales
102.7 108.7 118.1
EBITDA
38.3 43.5 46.8
Adj. Net Profit
10.0 13.7 16.6
Adj. EPS (INR)
5.6
7.3
8.8
Adj. EPS Gr. (%) 29.6 30.0 21.1
BV/Sh (INR)
91.0 94.5 98.5
RoE (%)
6.3
7.8
9.1
RoCE (%)
5.6
6.8
7.6
Div. Payout (%) 86.5 52.2 53.9
Valuations
P/E (x)
30.2 23.2 19.2
P/BV (x)
1.8
1.8
1.7
EV/EBITDA (x)
8.1
7.0
6.3
Div. Yield (%)
2.9
2.3
2.8
2016E
128.5
50.4
19.6
10.4
18.3
103.2
10.3
8.4
55.1
16.2
1.6
5.6
3.4
CMP: INR168
Neutral
We expect revenue to grow 4.7% YoY to INR27.5b.
Revenue from rent is likely to grow 2% QoQ while energy and other
reimbursements are likely to grow 3% QoQ.
We expect EBITDA to grow 2.5% QoQ to INR11b. EBITDA margin would

remain flat QoQ at 40%.
We expect 27.4% QoQ increase in reported PAT to INR3.53b due to

impact of one-offs related to mark-to-market impact on investments
during 2QFY14.
Bharti Infratel trades at an EV/EBITDA of 6.3x FY14E and 5.7x FY15E.

Neutral.

Consolidated co-location additions (we expect ~2,400), trend in
consolidated sharing revenue per sharing operator (we expect 0.6%
QoQ increase).
(INR Million)
Y/E March
FY13
1Q
24,165
Sales
YoY Change (%)
Operating expenses
15,306
EBITDA
8,859
YoY Change (%)
EBITDA margin (%)
36.7
Depreciation
5,396
Interest
849
Other Income
543
PBT
3,157
Tax
1,023
32.4
Adjusted net profit
2,134
YoY Change (%)
Revenue mix
Rent revenue mix (%)
63
Energy & other reimbursements (%) 37
E: MOSL Estimates
January 2014
FY14
2Q
25,555
3Q
26,264
15,977
9,578
16,448
9,816
37.5
5,528
1,033
646
3,663
1,186
32.4
2,477
37.4
5,620
996
569
3,769
1,228
32.6
2,541
62
38
62
38
FY13
4Q
26,736
11.3
16,687
10,049
-16.7
37.6
5,655
1,067
1,369
4,696
1,845
39.3
2,873
34.3
1Q
26,220
8.5
15,670
10,550
19.1
40.2
5,528
1,044
1,469
5,447
1,871
34.3
3,576
67.6
2Q
26,837
5.0
16,108
10,729
12.0
40.0
5,326
1,335
569
4,637
1,863
40.2
2,774
12.0
3QE
27,493
4.7
16,499
10,994
12.0
40.0
5,325
985
663
5,347
1,813
33.9
3,534
39.1
61
39
61
39
60
40
60
40
FY14E
4QE
28,199 102,720 108,749
5.5
8.7
5.9
16,932
64,418
65,209
11,267
38,302
43,540
12.1
8.2
13.7
40.0
37.3
40.0
5,321
22,199
21,500
976
3,945
4,340
805
3,127
3,506
5,776
15,285
21,207
1,950
5,282
7,497
33.8
34.6
35.4
3,825
10,003
13,710
33.1
33.2
37.1
60
40
62
38
60
40
C187
Idea Cellular
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
IDEA IN
3,316.7
555 / 9
188 / 99
-8 / 8 / 49
CMP: INR167
Buy
We expect consolidated revenue to grow 17.8% YoY (4% QoQ) to

INR65.7b.
Mobile traffic growth would be 4% QoQ (9.5% YoY). We expect RPM to

remain flat QoQ (8.5% growth YoY).
ARPU is likely to increase 2% QoQ to INR168 (v/s 6% decline in 2QFY14).
We expect EBITDA margin to expand 40bp QoQ to 31.6%. We estimate

EBITDA loss in new circles at INR1.3b.
Net profit would increase 121% YoY and 13% QoQ to INR5.06b.
Idea trades at an EV/EBITDA of 7.8x FY14E and 6.3x FY15E. Maintain

Buy.

Y/E March
2013 2014E 2015E
Net Sales
224.6 263.2 296.5
EBITDA
60.0 83.4 98.1
Adj. Net Profit
10.1 20.0 30.4
Adj. EPS (INR)
3.1
6.0
9.2
Adj. EPS Gr. (%) 39.6 97.6 52.0
BV/Sh (INR)
43.6 49.8 57.9
RoE (%)
7.4 12.9 17.0
RoCE (%)
5.7
8.3 11.3
Div. Payout (%) 11.5 11.5 11.5
Valuations
P/E (x)
54.8 27.7 18.3
P/BV (x)
3.8
3.4
2.9
EV/EBITDA (x)
11.4
7.8
6.3
Div. Yield (%)
0.2
0.4
0.6
2016E
330.1
112.3
36.4
11.0
19.7
67.6
17.5
12.3
11.5
15.2
2.5
5.7
0.8

RPM trajectory (we expect RPM to remain flat QoQ), mobile traffic
(we expect 4% QoQ growth), and EBITDA loss in new circles (we expect
INR1.3b).

Y/E March
(INR Million)
FY13
1Q
2Q
3Q
4Q#
Gross Revenue
55,037
53,140
55,785
60,614
YoY Growth (%)
21.7
15.0
10.9
12.9
QoQ Growth (%)
2.5
-3.4
5.0
8.7
EBITDA
14,355
14,225
14,734
17,491
YoY Growth (%)
19.2
19.9
9.6
16.1
QoQ Growth (%)
-4.8
-0.9
3.6
18.7
Margin (%)
26.1
26.8
26.4
28.9
Net Finance Costs
2,670
2,164
2,416
2,244
8,324
8,526
8,836
9,092
Profit before Tax
3,361
3,536
3,482
6,155
Inc ome Tax Exp. / (Income)
1,019
1,136
1,196
2,313
Adj Net Profit / (Loss)
2,342
2,400
2,286
3,842
YoY Growth (%)
32.1
126.9
13.7
12.0
Margin (%)
4.3
4.5
4.1
6.3
Mobile ARPU (INR/month)
156
148
158
167
QoQ Growth (%)
-2.5
-5.1
6.8
5.7
Mobile MOU/sub/month
379
359
384
406
QoQ Growth (%)
0.0
-5.3
7.0
5.7
Mobi le Traffic (B Min)
131
126
132
143
QoQ Growth (%)
5.3
-4.0
5.2
8.5
Mobile RPM (INR)
0.41
0.41
0.41
0.41
QoQ Growth (%)
-2.5
0.2
-0.2
0.0
E: MOSL Estimates; # Adjusted for one-off provision for licence and WPC
January 2014
FY14
1Q#
65,388
18.8
7.9
21,013
46.4
20.1
32.1
2,211
11,353
7,450
2,572
4,878
108.2
7.5
174
4.2
398
-2.0
147
2.8
0.44
6.3
charges of
2Q
63,233
19.0
-3.3
19,715
38.6
-6.2
31.2
1,949
10,795
6,971
2,495
4,476
86.5
7.1
164
-5.7
368
-7.5
139
-5.8
0.45
1.9
INR0.76b
FY13
FY14E
3QE
4QE
65,731
68,871 224,578 263,223
17.8
13.6
14.9
17.2
3.9
4.8
20,748
22,189
60,045
83,415
40.8
26.9
17.9
38.9
5.2
6.9
31.6
32.2
26.7
31.7
1,817
1,741
9,494
7,719
11,052
11,333
34,778
44,533
7,879
9,115
15,774
31,163
2,821
3,263
5,664
11,151
5,058
5,852
10,110
20,013
121.3
52.3
39.8
98.0
7.7
8.5
4.5
7.6
168
172
156
167
2.4
2.5
-0.9
7.2
376
385
376
381
2.2
2.4
1.2
1.2
145
152
532
583
4.3
4.9
17.4
9.5
0.45
0.45
0.41
0.44
0.1
0.1
-2.1
6.0
in 4QFY13 and INR0.25b in 1QFY14
C188
Reliance Communications
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
RCOM IN
2,064.0
271 / 4
164 / 50
-8 / 1 / 69
CMP: INR131
We expect revenue to grow 2.8% QoQ to INR55.5b.
We expect RPM to increase 1.4% QoQ to INR0.44.
With lower impact of seasonality on RCom, wireless traffic is likely to

grow 1.4% QoQ to 103b minutes.
Consolidated EBITDA would grow 5% QoQ to INR19.7b.
We estimate PAT at INR3.3b.
RCom trades at an EV/EBITDA of 8.9x FY14E and 6.9x FY15E. Neutral.

Y/E March
Net Sales
EBITDA
Adj. Net Profit
Adj. EPS (INR)
Adj. EPS Gr. (%)
BV/Sh (INR)
RoE (%)
RoCE (%)
Div. Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2013
210.0
66.1
1.9
0.9
-80.3
142.8
0.6
3.3
9.0
2014E
220.7
76.6
11.8
5.7
506.4
143.9
4.0
4.6
4.0
2015E
239.1
89.6
24.8
12.0
110.1
155.6
8.0
5.7
2.6
2016E
258.2
98.4
37.1
18.0
49.7
173.3
10.9
7.2
1.7
139.1
0.9
10.0
0.2
22.9
0.9
8.9
0.2
10.9
0.8
6.9
0.2
7.3
0.8
5.7
0.2
Neutral

Key things to watch for: RPM trend (we expect 1.4% QoQ growth),
traffic growth (we expect 1.4% QoQ).
(INR Million)
Y/E March
Gross Revenue
YoY Growth (%)
QoQ Growth (%)
EBITDA
YoY Growth (%)
QoQ Growth (%)
Margin (%)
Net Finance Costs
Profit before Tax
Income Tax Expense / (Income)
Adjusted Net Profit / (Loss)
YoY Growth (%)
Margin (%)
Reported Net Profit / (Loss)
Wireless ARPU (INR/month)
QoQ Growth (%)
Wireless MOU/sub/month
QoQ Growth (%)
Wireless Traffic (B Min)
QoQ Growth (%)
Wireless RPM (INR)
QoQ Growth (%)
E: MOSL Estimates
January 2014
FY13
1Q
53,192
7.7
0.2
16,502
3.0
1.1
31.0
5,534
9,093
1,875
-39
1,914
-14.4
3.6
1,624
98
-1.0
228
0.4
105
1.8
0.43
-1.3
2Q
52,020
3.2
-2.2
16,382
2.1
-0.7
31.5
5,929
9,130
1,323
0
1,323
-59.0
2.5
1,021
102
3.8
236
3.6
102
-2.5
0.43
0.2
3Q
53,013
4.9
1.9
16,533
2.6
0.9
31.2
6,054
9,337
1,142
0
1,142
-52.6
2.2
1,055
119
16.6
271
14.8
103
0.5
0.44
1.6
FY14
4Q
54,059
1.8
2.0
16,684
2.2
0.9
30.9
7,475
10,892
-1,683
751
-2,434
-220.7
-4.5
3,027
128
7.5
291
7.4
105
2.3
0.44
0.1
1Q
54,116
1.7
0.1
17,010
3.1
2.0
31.4
6,870
8,831
1,309
7
1,302
-32.0
2.4
1,082
119
-7.1
282
-2.9
106
1.0
0.42
-4.3
2Q
53,942
3.7
-0.3
18,856
15.1
10.9
35.0
6,758
9,365
2,733
12
2,721
105.7
5.0
6,750
121
1.7
277
-1.8
101
-4.9
0.43
3.6
3QE
55,457
4.6
2.8
19,746
19.4
4.7
35.6
6,941
9,497
3,308
15
3,293
188.3
5.9
3,043
129
6.5
291
5.0
103
1.4
0.44
1.4
FY13
FY14E
4QE
57,170 210,035 220,685
5.8
3.3
5.1
3.1
20,966
66,101
76,578
25.7
2.5
15.9
6.2
36.7
31.5
34.7
6,937
24,992
27,506
9,531
38,452
37,224
4,498
2,657
11,849
20
712
53
4,478
1,945
11,795
-284.0
-80.3
506.4
7.8
0.9
5.3
4,228
6,727
15,104
130
109
123
1.1
6.9
12.4
291
251
282
0.0
9.0
12.3
105
416
415
2.0
4.1
-0.2
0.45
0.43
0.44
1.1
-1.8
0.1
C189
December 2013 Results Preview | Sector: Utilities
Utilities
Companies Covered
CESC
Coal India
Jaiprakash Po wer V entures
We expect Utilities companies in our coverage to report aggregate revenue growth of

8% YoY and PAT de-growth of 2% YoY. The PAT de-growth would be led by Coal India
(down 8.5% YoY) and IPPs like JSW Energy (down 18% YoY), JP Power (down 10% YoY)
and R Infra (down 20% YoY). We expect NTPC and Powergrid to report PAT growth of
11% and 8% YoY, respectively, led by benefit from commercialization. We estimate
decline in Tata Power PAT due to lower contribution from mining business.
JSW Energy
NHPC
NTPC
Power Grid
PTC India
October-November generation growth muted at 3.5% YoY; PLF down 280bp: In

October-November 2013, all India generation saw muted growth at 3.5% YoY, led by
lower demand from SEBs. Overall PLF declined 280bp YoY to 53.1%. Coal and lignite
based generation grew 3.6% YoY but PLF declined 730bp, led by fuel supply issues and
lower demand. Gas-based generation continued to de-grow (down 41% YoY) on account
of decline in gas production in India. Hydro generation was up 31% YoY, led by good
monsoons, while nuclear generation grew 9% YoY.
Tat a Power
Power deficit declines to ~4% for October-November; peak deficit remains low: Power
demand witnessed YoY de-growth of 4% and 2%, respectively in October and November
2013. Power supply grew 2% YoY, leading to base deficit of ~4% v/s 9% for the same
period last year. The southern region registered significant improvement, with deficit
declining to 5.2% from 18% last year. The substantial improvement is on account of
lower demand, led by good monsoons and reluctance of SEBs to buy high cost power.
The deficit in the western region has declined substantially to 0.9% from 3.7%.
Imported coal prices look up QoQ, INR appreciates; ST (IEX) prices remain below
INR3/unit: On an average, imported coal prices during the quarter were USD79/ton
v/s USD88/ton in 3QFY13 and USD73/ton in 2QFY14. 3QFY14 represents the first quarter
of increase in global coal prices after 9 quarters. However, the impact of increase is
limited, as the INR gained some ground and appreciated to INR62/USD v/s INR63/USD
in 2QFY14. However, continued uptrend in global coal prices could hurt operating

CMP
(INR)
27.12.13
CESC
449
Coal India
283
Jaiprakash Power
19
JSW Energy
56
NHPC
20
NTPC
137
Power Grid Corp.
100
PTC India
66
431
Tata Po wer
90
Sector Aggregate
(INR Million)
Rating
Dec.13
Buy
Neutral
Buy
Neutral
Neutral
Buy
Buy
Buy
Buy
Neutral
12,470
183,710
6,114
26,215
9,534
169,638
39,198
22,222
34,453
97,578
601,132
Sales
Var.
% YoY
19.9
6.0
43.2
10.8
-5.6
7.5
16.6
18.3
-0.3
7.9
8.0
Var. Dec.13
% QoQ
-23.6
3,043
19.2 45,493
-36.9
3,775
29.5
9,370
-42.2
4,834
4.2 39,223
-1.6 34,229
-29.2
272
21.7
4,300
11.3 16,783
6.1 161,322
EBITDA
Var.
% YoY
14.4
6.1
40.9
11.9
-21.2
-1.8
17.1
-9.2
-12.2
-9.5
3.6
Var.
% QoQ
-19.1
62.8
-50.4
11.8
-52.5
-4.5
1.5
-59.9
-9.8
-17.4
1.8
Net Profit
Dec.13
Var.
% YoY
1,275
26.2
42,828
-8.5
-875
Loss
3,062
-17.6
2,544
5.3
24,571
11.3
11,963
8.0
250
14.7
3,018
-19.5
2,489
-9.8
91,124
-1.8
Var.
% QoQ
-25.5
39.9
PL
32.5
-67.2
11.7
16.2
-59.6
-12.7
-1.4
8.8
Nalin Bhatt (NalinBhatt@MotilalOswal.com)

January 2014
C190
margins of companies like JSW Energy, Adani Power, etc. The short term prices in the
day-ahead market have remained muted and range below INR3/unit.
Valuation and view: The Power sector has begun to witness several initiatives by
authorities to address concerns on SEBs, fuel supply pacts and PPAs. It would, however,
take a while before clarity on several issues emerges. In this environment, we continue
to prefer CPSUs, which are relatively better positioned on these fronts.
Oct-Nov 2013: All-India generation growth muted
Coal plant PLF dipped by 7.25p YoY
Power demand growth negative for Oct-Nov
Base deficit remains range-bound at ~4%
Peak deficit too remains low
ST prices remain muted, though up QoQ (INR/unit)
January 2014
C191
RB Index* prices improve QoQ (USD/ton)
INR range-bound, up marginally QoQ
* 6,000Kcal, FoB South Africa
Source: CEA, CERC and Bloomberg
100
60
95
Sep-13
Dec-13
75
Dec-13
105
Sep-13
90
Jun-13
110
Mar-13
105
Dec-12
Sense x Index
MOSL Uti l i ti es Index
115
Nov-13
Se nse x Index
MOSL Uti l i ti es Index
120
Oct-13
CMP (INR)
27.12.13
Rating
EPS (INR)
FY13 FY14E FY15E
P/E (x)
FY13 FY14E FY15E
EV/EBITDA (x)
FY13 FY14E FY15E
RoE (%)
FY13 FY14E FY15E
Utilities
CESC
Coal India
Jaiprakash Power
JSW Energy
NHPC
NTPC
Power Grid Corp.
PTC India
Reliance Infra.
Tata Power
Sector Aggregate
January 2014
449
283
19
56
20
137
100
66
431
90
Buy
Neutral
Buy
Neutral
Neutral
Buy
Buy
Buy
Buy
Neutral
49.2
28.0
1.3
6.5
1.7
10.5
8.9
6.7
65.2
3.9
55.0
28.5
1.3
7.6
2.1
11.5
8.5
8.1
50.6
3.7
56.9
30.5
2.2
6.7
2.4
13.5
10.3
8.1
54.8
3.6
9.1
10.1
14.6
8.6
11.7
13.1
11.2
9.9
6.6
23.1
11.2
8.2
9.9
14.5
7.3
9.3
12.0
11.7
8.1
8.5
24.1
10.8
7.9
9.3
8.7
8.3
8.4
10.2
9.7
8.2
7.9
25.2
9.7
4.1
7.4
15.4
6.2
8.4
8.8
10.3
8.3
-2.3
15.9
8.5
5.1
5.8
13.1
5.0
9.0
9.1
9.3
7.0
0.3
11.5
7.9
4.8
5.5
7.1
5.2
7.7
8.2
8.8
6.4
0.6
10.7
7.2
12.3
28.4
6.3
17.8
7.0
11.2
16.6
5.6
10.7
8.1
15.8
12.5
24.8
5.8
19.0
7.8
11.4
14.7
5.1
6.7
9.6
15.0
11.6
23.6
9.6
15.1
8.6
12.5
14.7
5.6
6.9
8.1
15.4
C192
Generation and PLFs of various plants

Capacity
(MW)*
Adani Power
- Mundra
- Tirora
GVK
- JP 1 & 2
- Gautami
GMR
- Barge Mounted
- Chennai
- Vemagiri
JPL
- Chattisgarh
Rel Infra
- Dahanu
- Samalkot (AP)
- Goa
- Kochi
Rel Power
- Rosa
Tata Power
- Trombay
- TISCO (Jamshedpur)
- Mundra UMPP
- Maithon
Torr ent Power
- Existing
- Sugen
JSW Energy
- Rajwest
- Karnataka/Ratnagiri
CESC
Lanco Infratech
- Kondapali
- Amarkantak
- UPCL
- Anpara
KSK
- Wardha
Sterlite
- Jharsuguda
*Monitored capacity by CEA
January 2014
Nov-13
Generation PLF (%)
Nov-12
Generation PLF (%)
YTDFY14
Generation PLF (%)
YTDFY13
Generation
PLF (%)
4,620
1,980
2,572.6
1,070.9
77.3
75.1
2,046.1
0.0
63.0
0.0
19,301.4
6,012.4
71.3
56.9
13,835.4
475.7
52.1
38.6
455
464
79.2
0.0
23.8
0.0
101.9
58.1
30.7
17.2
624.3
0.0
23.5
0.0
1,327.0
873.6
49.9
32.2
570
200
370
160.6
106.1
0.0
38.6
72.6
0.0
30.3
31.6
44.5
18.9
21.6
16.5
362.0
539.0
0.0
10.9
46.1
0.0
356.4
384.0
0.0
27.7
32.9
0.0
1,000
703.7
97.7
572.3
79.5
5,715.9
97.6
5,237.2
89.4
500
220
48
174
341.8
37.8
21.0
0.0
95.0
23.6
59.9
0.0
369.4
45.0
21.6
0.0
102.6
28.0
61.6
0.0
2,846.3
325.5
170.7
47.0
97.2
25.3
60.9
9.3
2,911.1
548.1
165.1
0.0
99.4
42.7
58.9
0.0
1,200
796.1
92.1
821.6
95.1
5,557.2
79.1
5,300.6
75.4
1,580
441
4,000
1,050
683.9
167.2
1,268.2
545.9
73.9
64.5
44.0
72.2
765.5
206.6
1,266.7
0.0
62.2
79.7
73.3
0.0
5,176.8
1,632.2
14,882.7
4,057.1
53.0
77.4
63.5
66.0
6,666.2
1,955.7
5,232.9
2,726.2
68.5
89.1
68.1
54.1
500
1,148
273.8
164.2
95.1
19.6
203.3
236.1
67.2
28.2
1,707.8
1,536.9
72.9
22.9
2,172.7
3,376.3
88.1
50.4
1,080
2,060
1,285
160.4
609.3
683.9
20.6
98.4
73.9
325.0
1,413.1
655.5
83.6
95.3
70.9
3,305.3
8,787.0
6,301.2
52.3
83.1
83.7
2,284.3
10,084.8
6,304.1
72.2
95.3
83.8
716
600
1,200
1,200
113.6
209.0
361.3
635.4
21.7
48.4
41.8
73.5
170.1
257.4
663.5
525.5
32.5
59.6
88.5
60.8
990.5
1,452.9
4,239.8
4,450.3
23.7
41.4
60.3
63.3
1,831.6
2,086.2
3,698.7
4,450.3
43.8
59.4
72.7
38.0
1,140
506.1
61.7
251.6
64.7
2,719.7
57.9
2,265.4
71.6
2,400
602.1
34.8
536.6
31.1
5,915.3
42.1
5,498.6
40.0
Source: CEA
C193
CESC
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
CESC IN
125.6
56 / 1
450 / 253
14 / 23 / 37

Y/E March
Sales
EBITDA
Net Profit
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2013 2014E 2015E

52.4 60.1 65.5
12.5 14.0 14.3
6.2
6.9
7.2
49.2 55.0 56.9
11.6 11.8
3.5
416.4 465.7 517.0
12.3 12.5 11.6
10.9 10.9 10.4
14.2 12.7 14.1
9.1
1.1
6.3
1.6
8.2
1.0
5.4
1.6
7.9
0.9
5.0
1.8
2016E
72.0
15.2
7.8
62.0
8.9
573.2
11.4
10.4
12.9
7.2
0.8
4.4
1.8
CMP: INR449
Buy
We expect CESC to report PAT of INR1.3b, a growth of 26%, on account

of higher accretion to regulated assets capitalized in FY13 and tariff
hike in 4QFY13. We expect revenue of INR12.5b (up 20% YoY) and
EBITDA of INR3b (up 14% YoY).
We estimate generation of 2.1b units and sales of 2.6BU in 3QFY14.

PLF would be almost flat YoY.
CESC has recently commissioned its mall in Kolkata. It would also earn
rental income in the standalone entity. The full-year impact of the
rental income would be ~INR150m.
Spencers has been consistently consolidating (closing less profitable

stores) and plans to concentrate more on hyperstores.
CESC has synchronized one of its units at the 600MW Dhariwal project
and it would be commissioned shortly.
We expect standalone (ex Spencers) PAT of INR6.9b in FY14 (up 12%)

and INR7.2b in FY15 (up 4%).

Performance of Spencers - same store sales (SSS) growth, store
EBITDA.
Details on commissioning of Chandrapur facility.
Details on Ranchi distribution circle.
Quarterly Performance (Standalone Numbers - excl Spencers Retail)

Y/E March
Sales
Change (%)
EBITDA
Change (%)
As of % Sales
Depreciation
Interest
Other Income
PBT
Tax
Reported PAT
Adjusted PAT
Change (%)
Generation
Sales
Realization (Rs/unit)
Overall PLF (Derived) (%)
E: MOSL Estimates
January 2014
(INR Million)
FY13
FY14
FY13
FY14E
1Q
14,200
20.0
2,900
8.6
20.4
770
780
210
1,560
310
19.9
1,250
1,250
12.5
2Q
13,440
8.3
3,110
19.6
23.1
760
890
240
1,700
340
20.0
1,360
1,360
19.3
3Q
10,400
0.8
2,660
24.9
25.6
770
860
240
1,270
260
20.5
1,010
1,010
36.5
4Q
15,130
9.7
4,570
5.8
30.2
760
850
240
3,200
640
20.0
2,560
2,560
2.0
1Q
14,360
1.1
3,210
10.7
22.4
840
900
190
1,660
350
21.1
1,310
1,310
4.8
2Q
16,320
21.4
3,760
20.9
23.0
840
1,030
270
2,160
450
20.8
1,710
1,710
25.7
3QE
12,470
19.9
3,043
14.4
24.4
830
800
200
1,613
338
21.0
1,275
1,275
26.2
4QE
17,849
18.0
4,820
5.5
27.0
858
814
165
3,312
695
21.0
2,617
2,617
2.2
52,420
14.1
13,240
14.4
25.3
3,060
3,380
930
7,730
1,550
20.1
6,180
6,180
12.4
60,124
14.7
14,833
12.0
24.7
3,368
3,544
825
8,745
1,833
21.0
6,912
6,912
11.8
2,430
3,388
4.2
90.6
2,426
3,173
4.2
90.4
2,067
2,383
4.4
77.0
1,792
2,414
6.3
66.8
2,404
3,342
4.3
89.6
2,450
3,299
4.9
91.3
2,104
2,634
4.7
78.4
1,912
3,129
5.7
71.3
8,715
11,357
4.6
81.2
8,870
12,405
4.8
82.7
C194
Coal India
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
COAL IN
6,316.4
1,787 / 29
372 / 238
3 / -14 / -30
CMP: INR283
We expect Coal India to report revenue of INR183.7b (up 6% YoY) and

PAT of INR43b (down 9% YoY) for 3QFY14. Dispatches would grow 7%
YoY to 129m tons; we estimate production at 125m tons, up 6.5% YoY.
The RB Index has improved from USD73/ton in 2QFY14 to USD78/ton the first ever QoQ improvement after nine consecutive quarters of
decline. The INR has appreciated marginally to INR62 from INR63 in
the previous quarter. Higher coal prices could help improve realizations
for e-auction/washed coal, going forward.
ACQ realization is likely to be higher in 3QFY14, as Coal India had

taken a tariff hike effective from mid-May.
We expect consolidated PAT of INR180b in FY14 (up 2%) and INR193b

in FY15 (up 7%). The stock trades at 9.3x FY15E EPS.

Y/E March
2013 2014E 2015E 2016E
Sales
683.0 711.5 755.4
802.3
EBITDA
180.8 196.2 209.1
222.2
NP*
176.6 179.9 192.8
203.7
EPS (INR)*
28.0 28.5 30.5
32.3
EPS Gr. (%)
9.3
1.9
7.2
5.7
BV/Sh. (INR)
76.7 88.1 100.3
113.2
RoE (%)**
28.4 24.8 23.6
22.2
RoCE (%)
56.9 52.5 48.8
45.4
Payout (%)
50.1 50.1 50.1
60.1
Valuations
P/E (x)
10.1
9.9
9.3
8.8
P/BV (x)
3.7
3.2
2.8
2.5
EV/EBITDA (x)
6.5
5.8
5.5
4.8
Div. Yield (%)
4.9
5.0
5.4
6.8
*Adj. EPS, **RoE is adj.for OB reserves
accounts, as appplicable under IFRS
Neutral

Volumes, realization trend for 3Q and guidance for FY14/15.
E-auction and ACQ mix guidance for FY14/15.
Modalities of coal import.
Clarity on OFS/buyback and special dividend.
(INR Million)
Y/E March
FY13
1Q
165,006
13.8
48,146
-0.1
29.2
5,356
126
20,714
-103
63,275
18,582
29.4
44,693
44,796
8.4
Sales
Change (%)
EBITDA
Change (%)
As of % Sales
Depreciation
Interest
Other Income
EO Income/(Expense)
PBT
Tax
Reported PAT
Adjusted PAT*
Change (%)
Key Operational metrics
Production
102.5
Sales/Offtake
113.0
Blended Realization (INR/ton)
- Regulated
1,267
- E-auction
2,562
- Washed Coal
2,315
- Own Consumption
3,023
E: MOSL Estimates; *Pre Exceptional
January 2014
2Q
3Q
145,725 173,250
10.8
12.9
28,617
42,883
15.5
-5.6
19.6
24.8
3,872
4,204
102
96
20,929
23,605
-107
-2,849
45,464
59,338
14,703
18,387
32.3
31.0
30,761
40,951
30,781
46,801
37.8
26.8
FY14
FY13
FY14E
4Q
199,046
2.5
61,191
61.6
30.7
4,698
127
22,065
0
78,431
24,508
31.2
53,923
54,139
-10.5
1Q
164,724
-0.2
39,579
-17.8
24.0
4,757
74
22,196
-50
56,894
19,585
34.4
37,310
37,360
-16.6
2Q
154,115
5.8
27,940
-2.4
18.1
4,949
80
21,828
-91
44,647
14,124
31.6
30,524
30,615
-0.5
3QE
183,710
6.0
45,493
6.1
24.8
4,850
100
23,000
0
63,543
20,715
32.6
42,828
42,828
-8.5
4QE
208,915
5.0
83,159
35.9
39.8
4,858
145
23,700
0
101,855
32,726
32.1
69,129
69,129
27.7
683,027
9.4
180,836
15.6
26.5
18,130
452
87,467
69
249,790
76,227
30.5
173,564
176,624
9.9
711,464
4.2
196,171
8.5
27.6
19,414
399
90,724
-50
267,031
87,150
32.6
179,881
179,931
1.9
89.1
101.7
117.4
120.5
143.3
130.0
102.9
115.3
97.6
109.1
125.0
129.0
152.2
139.3
452.2
465.2
477.7
492.7
1,281
2,460
2,092
2,626
1,232
2,941
2,491
2,703
1,403
2,308
2,264
2,759
1,296
2,140
2,117
2,810
1,262
2,220
2,327
1,816
1,300
2,250
2,200
5,000
1,396
2,246
2,116
5,477
1,298
2,544
2,300
2,781
1,318
2,212
2,186
2,848
C195
Jaiprakash Power Ventures

Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
JPVL IN
2,938.0
55 / 1
41 / 9
4 / -13 / -60
CMP: INR19
For 3QFY14, we expect JPVL to post revenue of INR6b (up 43% YoY),
EBITDA of INR3.8b (up 41% YoY) and net loss of INR875 (down 10%
YoY).
We estimate generation at 475MU from Karcham Wangtoo and at

821MU from Bina. Vishnuprayag was not operational during the
quarter.
Nigrie (1.3GW) is likely to be commissioned in FY14 and Bara I (2GW)

in FY15.
The Amelia North mine is also expected to commission in 2HFY14.
We expect JPVL to post net profit of INR3.8b in FY14 (up 1%) and INR6.3b
in FY15 (up 67%). The stock trades at 8.7x FY15E EPS.

Y/E March
Sales
EBITDA
NP
EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2013 2014E 2015E

24.6 33.5 72.8
19.3 25.2 46.5
3.8
3.8
6.3
1.3
1.3
2.2
(6.1)
0.8 66.9
22.0 22.9 21.9
6.3
5.8
9.6
5.9
6.1
9.8
14.6
0.8
14.3
-
14.5
0.8
13.1
-
2016E
109.3
63.7
13.7
4.7
116.8
26.2
19.4
14.0
-
8.7
0.9
7.1
-
4.0
0.7
4.6
-
Buy

Clarity on offloading hydro assets.
Coal availability for Bina TPS (500MW).
Updates on clearance of Dongri Tal II coal mine.
Updates on commissioning of Nigrie (1.3GW) and Bara I (2GW).
(INR Million)
Y/E March
1Q
Sales
5,454
Change (%)
98.1
EBITDA
4,900
Change (%)
98.6
As of % Sales
89.9
Depreciation
674
Interest
2,278
Other Income
91
PBT
2,039
Tax
210
10.3
Reported PAT
1,830
Adjus ted PAT (Pre Exceptional)
1,830
Change (%)
162.9
Operational Details - Generation (MU)
Baspa
343
Vishnuprayag
574
Karcham Wangtoo
1,191
Bina
0
E: MOSL Estimates
January 2014
FY13
FY14
FY13
FY14E
2Q
9,058
39.4
8,115
33.4
89.6
774
2,885
73
4,528
868
19.2
3,660
3,660
30.4
3Q
4,270
7.6
2,679
-25.0
62.7
960
2,874
113
-1,043
-67
6.4
-976
-976
-263.9
4Q
3,744
27.5
1,637
-32.9
43.7
831
2,946
105
-2,034
-811
39.9
-1,223
-973
1,338.8
1Q
7,863
44.2
5,882
20.0
74.8
1,082
3,506
48
1,343
414
30.8
929
1,179
-35.6
2Q
9,692
7.0
7,610
-6.2
78.5
1,075
3,574
74
3,036
517
17.0
2,519
2,519
-31.2
3QE
6,114
43.2
3,775
40.9
61.7
1,350
3,650
200
-1,025
150
-14.6
-875
-875
-10.3
4QE
8,437
125.3
6,623
304.6
78.5
1,603
3,916
263
1,367
455
33.3
912
912
-193.7
22,526
39.4
17,331
19.0
76.9
3,239
10,983
382
3,491
200
5.7
3,292
3,542
-11.7
32,106
42.5
23,890
37.8
74.4
5,110
14,645
585
4,720
1,536
32.5
3,184
3,434
-3.0
660
937
2,154
11
151
261
467
171
104
116
242
238
426
438
1,528
301
650
0
2,279
319
158
0
475
821
185
0
185
880
1,258
1,888
4,054
421
915
1,314
2,863
421
C196
JSW Energy
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
JSW IN
1,640.1
91 / 1
75 / 34
7 / 15 / -25
CMP: INR56

Y/E March
Sales
EBITDA
NP
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. yield (%)
2013 2014E 2015E

89.3 99.4 102.4
27.9 36.6 32.1
10.6 12.4 11.0
6.5
7.6
6.7
219.7 17.1 -11.6
37.8 42.1 46.9
17.8 19.0 15.1
14.4 15.9 14.7
31.0 19.8 25.0
8.6
1.5
6.3
3.6
7.3
1.3
5.1
2.7
2016E
102.7
28.7
9.8
6.0
-10.9
51.2
12.2
13.2
25.0
8.3
1.2
5.2
3.0
9.3
1.1
5.2
2.7
Neutral
We expect JSWEL to report consolidated revenue of INR26b (up 11%

YoY) and PAT of INR3.1b (down 18% YoY).
We estimate generation of 5.4BU, including coal and lignite capacity.
The growth in generation would primarily be led by RajWest project.
We assume moderation in generation for Vijayanagar and Ratnagiri
projects.
We have assumed short-term realization of INR4.6/unit, almost flat
YoY. We expect fuel cost to be ~INR2.7/unit (coal based) as the mix of
South African and Indonesian coal changes during the quarter.
The entire capacity of RajWest project (1,080MW) is operational.
Clearance for enhancing the capacity of the Kaprudi lignite mine is
still pending.
We expect JSWEL to report consolidated PAT of INR12.4b in FY14 (up
17%) and INR11.0b in FY15 (down 12%). Stock trades at 8.3x FY15E EPS.

ST realization, fuel mix and fuel cost for 3QFY14, and guidance for
FY14/15.
RajWest project: lignite mine clearance.
Capacity addition targets under the 12th plan.
(INR Million)
Y/E March
Total Operating Income
Change (%)
EBITDA
Change (%)
Depreciation
Interest
Other Income
Extraordinary items
PBT
Tax
Reported PAT
Share of profit from Assoc
Minority interest
Exceptional Income/ (Expense)
Reported PAT (Post MI)
Adjusted PAT
Change (%)
Operational Details
Sales Mix (MUs)
- Long Term
- Merchant
- PPA
- Merchant
E: MOSL Estimates
January 2014
FY13
FY14
FY13
FY14E
1Q
21,915
72.2
5,834
48.4
1,697
2,426
764
2,325
150
160
106.4
-10
0
-44
1,915
34
1,949
43.0
2Q
20,765
108.4
5,769
388.2
1,605
2,281
453
-925
3,261
721
22.1
2,540
0
-1
-925
2,541
1,615
n.a.
3Q
23,652
33.7
8,370
139.5
1,572
2,364
300
610
4,125
1,005
24.4
3,120
0
15
610
3,105
3,715
n.a.
4Q
23,010
10.6
7,959
35.6
1,741
2,557
617
-43
4,322
848
19.6
3,474
-117
0
-43
3,357
3,314
96.9
1Q
24,310
10.9
9,226
58.1
2,008
2,747
453
1,872
3,052
870
28.5
2,182
46
-5
1,872
2,141
4,013
105.9
2Q
20,246
-2.5
8,378
45.2
2,032
2,927
549
1,675
2,293
569
24.8
1,724
61
37
685
1,626
2,311
43.1
3QE
26,215
10.8
9,370
11.9
2,350
3,100
400
0
4,320
1,188
27.5
3,132
40
30
0
3,062
3,062
-17.6
4QE
28,191
22.5
9,651
21.3
2,468
3,205
407
0
4,386
1,303
29.7
3,083
40
27
0
3,016
3,016
-9.0
89,343
46.0
27,932
92.9
6,615
9,628
2,134
1,966
11,857
2,733
23.1
9,124
-117
-29
1,556
9,037
10,592
219.8
99,370
11.2
36,626
31.1
8,858
11,978
1,809
3,547
14,052
3,930
28.0
10,122
187
89
2,557
9,846
12,403
17.1
2,233
2,498
4.56
3.64
4.40
2,036
2,205
4.81
3.65
4.60
2,264
2,616
4.77
3.30
4.60
2,271
2,570
4.67
2.99
4.60
2,704
2,275
4.88
3.81
4.48
2,268
1,507
5.26
4.30
5.20
2,472
2,819
4.89
3.74
4.55
2,309
3,140
5.12
3.98
4.60
8,808
9,885
4.70
3.26
4.55
9,753
9,741
5.02
3.89
4.65
C197
NHPC
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
NHPC IN
12,300.7
242 / 4
29 / 15
7 / -1 / -33
CMP: INR20
We expect NHPC to report revenue of INR9.5b (down 6% YoY) and PAT

of INR2.5b (up 5% YoY) for 3QFY14. Generation is likely to decline from
2.6BU in 3QFY13 to 2.4BU due to the impact of floods.
In FY14, NHPC is targeting to add 937MW of projects, while it has

commissioned TLDP III (132MW) during 1QFY14 and 3 units of URI II
(120MW) in 2Q/3QFY14. Nimo Bazgo (45MW), 1 unit of URI II (120MW)
and Parbati III are also expected to commission in FY14.
NHPC has guided addition of only 164MW TLDP IV during FY15/16.

However, given substantial delays in FY13 capacity addition and current
expectation of ~937MW addition in FY14, we expect slippages in
commissioning in FY14, to be passed on to FY15.
We expect NHPC to report consolidated PAT of INR26.5b in FY14 (up

25%) and INR29.5b in FY15 (up 11.5%). The stock trades at 8.4x FY15E
EPS.

Y/E March
Sales
EBITDA
NP
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (X)
P/BV (X)
EV/EBITDA (X)
Div. Yield (%)
2013 2014E 2015E

64.0 64.3 70.5
41.8 41.3 45.7
23.6 26.5 29.5
1.7
2.1
2.4
-5.9 25.4 11.5
24.7 26.6 28.0
7.0
7.8
8.6
8.5
8.0
8.7
30.8 33.7 36.0
11.7
0.8
8.4
3.0
9.3
0.7
8.4
3.5
2016E
72.9
46.0
30.7
2.8
17.8
29.4
8.5
8.8
37.6
8.4
0.7
7.2
4.2
7.1
0.7
6.8
4.6
Neutral

Incentives for 3QFY14 and progress on projects impacted by floods.
Total capacity addition for FY14/15.
Updates on Parbati II and Subhanshri Lower projects.
(INR Million)
Y/E March
Sales
Change (%)
EBITDA
Change (%)
As of % Sales
Depreciation
Interest
Other Income
EO Income/(Expense)
PBT
Tax
Reported PAT
Adjusted PAT
Change (%)
Operational Details
Generation (MUs)
Increase/ (Decrease) (%)
Installed Capacity (MW)
- Owned
- JV's
E: MOSL Estimates
January 2014
FY13
FY14E
1Q
14,218
-3.3
9,040
-5.5
63.6
2,218
798
2,451
0
8,475
1,777
21.0
6,698
6,450
6.6
2Q
17,725
-4.6
12,036
-9.4
67.9
2,532
1,047
2,406
0
10,863
3,028
27.9
7,834
7,272
-6.4
FY13
3Q
10,104
14.6
6,132
61.9
60.7
2,390
989
1,890
0
4,644
1,526
32.9
3,118
2,416
-18.8
4Q
10,994
-23.8
6,050
-39.1
55.0
2,546
1,020
3,156
2,400
8,041
2,208
27.5
5,833
2,863
35.7
1Q
16,194
13.9
10,707
18.4
66.1
2,760
1,160
2,486
0
9,272
2,073
22.4
7,199
7,160
11.0
2Q
16,500
-6.9
10,187
-15.4
61.7
2,825
1,203
3,002
0
9,161
2,085
22.8
7,076
7,747
6.5
FY14
3QE
9,534
-5.6
4,834
-21.2
50.7
2,625
1,200
2,500
0
3,509
965
27.5
2,544
2,544
5.3
4QE
12,142
10.4
7,139
18.0
58.8
2,214
958
1,433
0
5,401
2,355
43.6
3,045
3,045
6.4
53,066
-6.2
33,240
-9.1
62.6
9,693
3,854
9,928
2,400
32,021
8,539
26.7
23,482
19,000
0.6
54,370
2.5
32,868
-1.1
60.5
10,425
4,521
9,421
0
27,343
7,478
27.3
19,865
20,497
7.9
6,148
-2.2
5,287
3,767
1,520
7,634
10.0
5,518
3,998
1,520
2,563
-17.8
5,551
4,031
1,520
2,496
4.6
5,562
4,042
1,520
6,388
3.9
5,694
4,174
1,520
6,719
-12.0
5,814
4,294
1,520
2,350
-8.3
5,979
4,459
1,520
2,286
-8.4
6,499
4,979
1,520
22,825
22.2
5,562
4,042
1,520
21,737
-4.8
5,979
4,459
1,520
C198
NTPC
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
NTPC IN
8,245.5
1,133 / 18
167 / 123
-10 / -14 / -21

Y/E March
Sales
EBITDA
NP
Adj EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2013
647.0
171.1
86.4
10.5
8.3
97.5
11.2
14.3
43.4
2014E
660.4
165.3
94.7
11.5
9.7
104.5
11.4
11.0
42.2
2015E
759.5
188.2
111.5
13.5
17.7
112.5
12.5
11.4
41.2
2016E
809.2
212.8
124.5
15.1
11.6
121.4
12.9
11.7
41.2
13.1
1.4
8.6
4.2
12.0
1.3
9.1
3.2
10.2
1.2
8.2
3.5
9.1
1.1
7.5
3.9
CMP: INR137
Buy
We expect NTPC to report PAT of INR24.5b (up 11% YoY). Profit growth
would mainly be led by the addition of new capacities.
Generation is likely to be flat YoY, mainly led by lower generation
from gas-based capacity at ~2.8BU v/s 5.2BU in 3QFY13, down 46% YoY.
We expect coal-based generation to remain flat.
For FY14, the capacity addition target stands at 1.8GW. While NTPC has
commissioned 1.1GW by December 2013, the total commercialization
target for FY14 is 1.5GW.
NTPC's Farakka project in West Bengal has started movement of
imported coal by barges through inland waterways. NTPC will
transport 3mmtpa of coal through inland waterways to the Farakka
station for seven years.
NTPC's Koldam project dam refilling exercise has begun and the project
is expected to be commissioned next year.
We expect NTPC to report PAT of INR94.7b in FY14 (up 10%) and INR112b
in FY15 (up 18%). The stock trades at 10.2x FY15E EPS. Maintain Buy.

Plant availability factor (PAF) for coal-based projects and generation
loss.
Guidance on capacity addition/commercialization for FY14/15.
Updates on captive coal block development.
(INR Million)
Y/E March
FY13
1Q
159,600
12.6
36,306
26.7
22.7
7,602
4,994
8,849
2Q
161,197
4.8
42,243
30.4
26.2
7,865
3,035
10,482
3Q
157,749
2.9
39,952
39.9
25.3
8,288
5,304
7,546
FY14
4Q
164,618
1.2
39,065
-5.0
23.7
10,213
5,912
17,714
16,841
57,495
13,679
23.8
43,816
22,054
-3.9
1Q
156,129
-2.2
42,653
17.5
27.3
9,423
6,174
7,459
0
34,514
9,244
26.8
25,270
22,263
-7.6
2Q
162,723
0.9
41,088
-2.7
25.3
9,679
6,205
7,871
0
33,075
8,146
24.6
24,929
21,989
13.1
Sales
Change (%)
EBITDA
Change (%)
As of % Sales
Depreciation
Interest
Other Income
EO Inc./(Exp.)
PBT
32,559
41,825
33,907
Tax
7,573
10,402
7,940
23.3
24.9
23.4
Reported PAT
24,987
31,424
25,968
Adjusted PAT
24,093
19,440
22,069
Change (%)
26.7
31.4
6.7
Capacity
- NTPC
34,810
34,810 34,810
35,810
35,810
35,810
- JVs
4,364
4,364
4,864
5,364
5,364
5,364
Total
39,174
39,174 39,674
41,174
41,174
41,174
Addition
2,160
500
1,500
E: MOSL Estimates; Adj profit based on the calculations provided by the management
January 2014
3QE
169,638
7.5
39,223
-1.8
23.1
10,000
6,400
7,890
0
30,713
6,143
20.0
24,571
24,571
11.3
36,310
5,864
42,174
1,000
FY13
FY14E
4QE
171,900 643,164 660,390
4.4
5.2
2.7
39,607 157,565 162,571
1.4
19.9
3.2
23.0
24.5
24.6
10,389
33,968
39,491
6,825
19,244
25,604
9,648
44,591
32,868
0
16,841
0
32,041 165,786 130,344
6,151
39,592
29,684
19.2
23.9
22.8
25,890 126,194 100,660
25,890
86,352
94,712
17.4
8.3
9.7
36,970
6,059
43,029
855
35,810
5,364
41,174
4,160
36,970
6,059
43,029
1,855
C199
Power Grid Corporation

Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
PWGR IN
5,231.6
522 / 8
117 / 87
5 / -19 / -22

Y/E March
Sales
EBITDA
NP
EPS (INR)
EPS Gr. (%)
BV/Sh. (INR )
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2013 2014E 2015E

127.6 155.1 181.1
109.4 135.1 158.0
41.4 44.7 53.7
8.9
8.5 10.3
24.6 -4.4 20.0
56.7 66.5 73.2
16.6 14.7 14.7
9.3
9.2
9.0
35.0 33.3 35.0
11.2
1.8
10.0
2.8
11.7
1.5
9.3
2.6
9.7
1.4
8.8
3.1
2016E
216.8
190.3
66.6
12.7
24.1
81.4
16.5
9.6
35.0
7.8
1.2
8.0
3.8
CMP: INR100
Buy
We expect PWGR to report PAT of INR12b (up 8% YoY) for 3QFY14.

Profit growth would be led mainly by capitalization. We expect PWGR
to capitalize INR60b during the quarter, higher than the average
INR25b/quarter in 1HFY14. We expect capex of INR53b in 3QFY14.
We estimate Consultancy revenue at INR1.4b and Telecom revenue at

INR725m. We estimate contribution of ~INR850m to PBT from
Consultancy and Telecom.
PWGR has synchronized the Raichur-Solapur 765kV single circuit

transmission line, integrating the southern region with the all-India
grid. The line has load carrying capacity of 2GW.
PWGR has raised INR54b through fresh issue of shares, which would
enable it to meet equity funding requirement for projects under
construction.
We expect PAT of INR44.7b in FY14 (down 4%) and INR54b in FY15 (up
20%). The stock trades at 9.7x FY15E EPS and 1.4x FY15E BV.

Capitalization/capex guidance for FY14/15.
Updates on green energy projects.
Updates on state JVs.
(INR Million)
Y/E March
Sales
Change (%)
EBITDA
Change (%)
As of % Sales
Depreciation
Interest
Other Income
Extraordinary Inc / (Exp)
PBT
Tax
Reported PAT
Adjus ted PAT (Pre Exceptional)
Change (%)
Operational Details
Capitalization
Regulated Equity
E: MOSL Estimates
January 2014
FY13
FY14
1Q
28,883
31.1
24,646
33.6
85.3
7,565
6,461
920
0
11,540
2,836
24.6
8,705
9,065
29.1
2Q
30,858
36.3
26,693
40.6
86.5
8,252
5,295
1,570
-140
14,856
3,597
24.2
11,259
10,071
32.5
3Q
33,617
36.3
29,231
39.0
87.0
8,653
6,848
1,286
6
15,009
3,717
24.8
11,291
11,072
43.0
4Q
33,738
8.8
28,311
8.7
83.9
9,049
6,747
2,417
-117
15,049
3,954
26.3
11,094
10,926
0.9
1Q
35,565
23.1
30,557
24.0
85.9
9,644
7,599
803
60
14,177
3,747
26.4
10,431
10,370
14.4
2Q
39,816
29.0
33,709
26.3
84.7
9,660
8,014
1,228
0
17,263
4,815
27.9
12,447
10,296
2.2
3QE
39,198
16.6
34,229
17.1
87.3
10,057
8,259
1,300
0
17,213
5,250
30.5
11,963
11,963
8.0
41,000
190,112
26,600
198,092
25,860
205,850
78,540
215,000
29,500
223,850
20,500
230,000
60,000
248,000
FY13
4QE
40,535
20.1
36,584
29.2
90.3
12,868
7,751
1,296
0
17,260
5,181
30.0
12,079
12,073
10.5
FY14E
127,095 155,115
26.6
22.0
108,880 135,079
29.9
24.1
85.7
87.1
33,519
42,230
25,352
31,623
6,193
4,626
-247
0
56,449
65,853
14,104
18,993
25.0
28.8
42,345
46,859
41,359
44,702
24.6
8.1
75,000 172,000
270,500 215,000
185,000
270,500
C200
PTC India
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
PTCIN IN
296.0
20 / 0
81 / 35
3 / 33 / -19
CMP: INR66
We expect PTCIN to report revenue of INR22b (up 18% YoY) and PAT of
INR250m (up 15% YoY) for 3QFY14.
We estimate volumes at ~6.3BU (up 6% YoY) and adjusted trading

margin at ~Paisa3.8/kwh.
On the Simhapuri/Meenaxi tolling business, we expect PTCIN to

achieve sales volume of 460MU and PBT spread of INR0.30/unit, flat
QoQ.
Higher rebate and surcharge income had boosted PAT in 2QFY14 and
provisioning of the same in 3QFY14 remains a key monitorable.
We expect PTCIN to report consolidated PAT of INR2.4b in FY14 (up

21%) and INR2.4b in FY15 (flat YoY). The stock trades at 8.2x FY15E EPS.

Y/E March
Sales
EBITDA
NP
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. yield (%)
2013 2014E 2015E

88.6 107.2 126.6
1.7
1.6
1.4
2.0
2.4
2.4
6.7
8.1
8.1
-3.2 21.0
-0.4
78.6 80.8 83.3
5.6
5.1
5.6
3.8
5.4
5.6
45.0 45.4 45.0
9.9
0.8
9.4
3.0
8.1
0.8
7.0
2.8
8.2
0.8
6.4
3.1
2016E
139.3
1.5
2.7
9.0
11.5
86.3
6.4
6.8
45.0
7.3
0.8
5.1
3.7
Buy

Trading volumes and margins for FY14 and guidance for FY15.
Simhapuri and Meenakshi business volumes and PBT contribution.
Receipt of outstanding dues from Uttar Pradesh DISCOMs.
Guidance on commissioning of projects.

Y/E March
(INR Million)
FY13
FY14
FY13
1Q
2Q
3Q
4Q
1Q
2Q
3QE
4QE
Sales
19,869
27,928
18,778
21,987
27,704
31,402
22,222
25,921
88,569
Change (%)
-20.1
16.9
41.2
52.3
39.4
12.4
18.3
17.9
EBITDA
313
569
300
512
340
679
272
293
1,700
Change (%)
-34.4
28.3
42.9
58.7
8.6
19.2
-9.2
-42.7
17.0
As of % Sales
1.6
2.0
1.6
2.3
1.2
2.2
1.2
1.1
1.9
Depreciation
10
10
11
11
11
11
11
13
42
Interest
1
4
4
0
4
3
2
1
9
Other Income
26
63
12
23
81
189
70
91
119
Extraordinary Income/(Expense)
-23
0
0
7
3
1
0
0
-17
PBT
304
619
297
530
410
854
329
370
1,785
Tax
98
173
79
147
114
235
79
91
497
32.3
28.0
26.7
27.7
27.8
27.5
24.0
24.5
27.9
Reported PAT
206
446
218
371
296
619
250
279
1,287
Adjusted PAT
229
446
218
377
293
618
250
279
1,270
Change (%)
-49.4
25.4
129.2
26.2
27.8
38.7
14.7
-26.0
Operational Details
Power Traded (MUs)
6,566
9,428
5,871
6,732
8,068
10,450
6,240
7,075
28,597
Growth (% YoY)
-2.4
8.9
28.6
53.7
22.9
10.8
6.3
5.1
17.6
Adj Margins (Ps/Unit)
3.98
3.06
3.74
3.71
3.48
4.06
3.75
3.80
3.31
E: MOSL Estimates; % Change for FY13E not comparable given inclusion of tolling profits from 1QFY13 onwards
January 2014
FY14E
107,249
1,584
-6.8
1.5
46
10
431
-4
1,964
519
26.4
1,445
1,441
31,833
11.3
3.79
C201
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
RELI IN
263.0
113 / 2
572 / 308
2 / 19 / -26
CMP: INR431
We expect RELI to report revenue of INR34.5b (flat YoY) and PAT of

INR3b (down 20% YoY) for 3QFY14. EPC revenue for the quarter would
be INR17.8b (v/s INR19.3b in 3QFY13).
In the Cement business, the total capacity under development is

5mtpa, both in MP and Maharashtra. The grinding unit at Butibori is
commissioned.
Civil work for the Metro-1 project in Mumbai is 100% complete. The
project is expected to commission in 2HFY14. RELI has asked for a 3fold hike in the Mumbai Metro's tariff, led by cost escalation of
~INR20b.
In the Delhi metro, RELI's total investment is INR28b, including equity

of INR7b. RELI is confident of receiving complete equity.
EPC revenues might be impacted in FY14/15 due to delays in large

capacity projects of Chittrangi, Krishnapattnam and Tilaiya.
We expect RELI to report standalone PAT of INR13.3b in FY14 (down

22.5%) and INR14.4b in FY15 (up 8.3%). The stock trades at 7.9x FY15E
EPS.

Y/E March
Sales
EBITDA
NP
Adj. EPS(INR)
EPS Gr. (%)
BV/Sh. (INR)
ROE (%)
ROCE (%)
Payout (%)
Valuations
P/E (X)
P/BV (X)
EV/EBITDA (X)
Div. yield (%)
2013 2014E 2015E

142.7 142.1 149.7
18.6 17.8 18.8
17.2 13.3 14.4
65.2 50.6 54.8
-14.3 -22.3
8.3
734
777
823
10.7
6.7
6.9
10.7
8.3
8.6
11.2 14.9 15.4
6.6
0.6
-0.8
1.5
8.5
0.6
0.3
1.6
7.9
0.5
0.6
1.7
2016E
166.5
21.1
17.0
64.8
18.2
879
7.6
9.3
13.0
6.6
0.5
0.2
1.7
Buy

Performance of EPC division and order book position
Performance of Infrastructure business and updates on projects under
construction
Contribution from Cement business
Y/E March
(INR Million)
FY13
1Q
2Q
3Q
Sales
34,473
35,002
34,552
Change (%)
-5.8
-11.4
-22.8
EBITDA
4,598
4,535
4,898
Change (%)
-33.9
-36.1
-24.9
As of % Sales
13.3
13.0
14.2
Depreciation
1,130
922
980
Interest
1,902
1,980
2,055
Other Income
2,586
3,457
2,433
Exceptional item
4,183
PBT
4,152
5,090
8,480
Tax (incl con ting encies)
882
949
1,887
21.2
18.6
22.2
Reported PAT
3,270
4,141
6,594
PAT (Pr e Exceptionals)
3,270
4,141
3,749
Change (%)
13.8
-15.5
-7.6
Operational Details - EPC Division
Revenues
17,749
19,184 19,260
EBID TA
3,031
2,836
3,050
Margin (%)
17.1
14.8
15.8
E: MOSL Estimates; Quarterly nos. are on standalone basis
January 2014
FY14
FY13
FY14E
4Q
39,193
-31.6
5,126
-17.0
13.1
888
1,902
1,374
0
3,710
-2,280
-61.5
5,990
5,990
-7.5
1Q
32,789
-4.9
4,401
-4.3
13.4
828
2,172
3,141
0
4,542
800
17.6
3,742
3,742
14.4
2Q
28,318
-19.1
4,768
5.1
16.8
847
2,316
3,004
0
4,608
1,150
25.0
3,458
3,458
-16.5
3QE
34,453
-0.3
4,300
-12.2
12.5
1,000
2,250
2,500
0
3,550
533
15.0
3,018
3,018
-19.5
4QE
46,523
18.7
4,315
-15.8
9.3
1,024
2,273
2,524
0
3,542
441
12.5
3,101
3,101
-48.2
143,220
-19.6
19,158
-28.4
13.4
3,921
8,794
10,806
4,183
21,432
1,437
6.7
19,995
17,150
-12.6
142,083
-0.8
17,784
-7.2
12.5
3,699
9,011
11,169
0
16,243
2,924
18.0
13,319
13,319
-22.3
23,049
3,533
15.3
16,537
2,312
14.0
12,375
1,785
14.4
17,874
1,877
10.5
26,754
1,772
6.6
79,243
16,114
20.3
73,540
7,746
10.5
C202
Tata Power
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
TPWR IN
2,373.3
213 / 3
113 / 68
12 / -2 / -27
CMP: INR90

Y/E March
Sales
EBITDA
NP
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. yield (%)
2013 2014E 2015E

95.7 105.3 114.9
20.2 24.7 25.8
9.2
8.8
8.4
3.9
3.7
3.6
(47.7) (4.1) (4.5)
49.1 52.7 55.8
8.1
9.6
8.1
7.5
8.3
8.9
27.6 33.2 26.7
23.1
1.8
15.1
1.5
24.1
1.7
11.5
1.5
25.2
1.6
10.7
1.5
2016E
120.2
28.0
8.5
3.6
1.0
59.2
8.3
11.9
29.5
24.9
1.5
7.4
1.5
Neutral
We expect TPWR to report standalone PAT of INR2b (up 55% YoY) and
consolidated PAT of INR2.5b (down 10% YoY) for 3QFY14.
Generation from TPWR's 2,021MW (Mumbai region) capacity in
October-November 2013 was 1.7BU, down 20% YoY. Mundra UMPP
generation was 3.3BU and PLF was 57%. Maithon generation was 1.1BU
and PLF was 73%.
Global coal prices have increased in 3QFY14, after nine consecutive
quarters of decline. The RB Index for 3QFY14 stood at USD79/ton, up
from USD73/ton in 2QFY14, its lowest since FY11. Improvement in coal
price could lead to higher contribution from mining SPVs. INR
appreciation (INR62/USD in 3Q v/s INR63/USD in 2Q) would, however,
marginally impact translation gains.
CERC is expected to deliver its final judgement on the Mundra UMPP
tariff hike, as the stakeholders' views are heard. TPWR seeks INR0.67/
unit tariff hike to ward off the losses on account of fuel cost underrecovery.
We expect TPWR to report consolidated PAT of INR8.8b in FY14 (down
4%) and INR8.4b in FY15 (down 5%). The stock trades at 25.2x FY15E
EPS.

Contribution/loss from Maithon/Mundra UMPP project.
CERC order on Mundra UMPP tariff revision.
Sales/Realization for KPC/Arutmin mines.
(INR Million)
Y/E March
Units Generated
Total Operating Income
Change (%)
EBITDA
Change (%)
As of % Sales
Depreciation
Interest
Other Income
PBT
Tax
Reported PAT
Adjusted PAT
Change (%)
Consolidated Adjusted PAT
Change (%)
E: MOSL Estimates
January 2014
FY13
1Q
4,259
22,841
18.9
3,759
-12.1
16.5
1,548
1,386
3,456
4,281
1,158
27.1
3,123
4,140
40.8
3,059
-26.4
2Q
4,272
25,198
29.3
5,279
26.0
21.0
1,556
1,643
1,963
4,043
1,083
26.8
2,960
2,969
-18.8
2,062
-53.4
3Q
3,873
25,491
13.2
5,685
19.7
22.3
1,281
1,788
318
2,934
770
26.2
2,164
1,285
-30.3
2,759
-50.0
FY14
4Q
3,366
22,143
-6.8
5,793
30.4
26.2
-744
1,965
1,204
5,776
3,776
65.4
2,000
885
-61.4
1,337
-62.0
1Q
3,897
26,075
14.2
7,420
97.4
28.5
1,360
2,363
2,456
6,153
1,926
31.3
4,227
3,527
-14.8
1,081
-64.7
2Q
3,404
21,995
-12.7
6,023
14.1
27.4
1,396
1,620
1,299
3,470
852
24.6
2,618
2,703
-9.0
2,525
22.4
3QE
3,977
28,040
10.0
5,631
-1.0
20.1
1,450
2,600
1,400
2,981
984
33.0
1,997
1,997
55.5
2,489
-9.8
4QE
4,916
29,190
31.8
5,610
-3.2
19.2
1,461
2,743
1,445
2,852
945
33.1
1,907
1,907
115.4
2,772
107.3
FY13
FY14E
15,770
95,673
12.6
20,517
16.2
21.4
3,641
6,783
6,940
17,034
6,787
39.8
10,247
9,279
-13.6
9,217
-47.7
16,195
105,301
10.1
24,685
20.3
23.4
5,667
9,326
6,600
16,291
4,707
28.9
11,585
11,627
25.3
8,867
-3.8
C203
Bata India
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
BATA IN
64.3
68 / 1
1,086 / 688
-6 / 18 / 13
CMP: INR1,054
Buy
We expect revenue to grow 13.5% YoY (19.3% QoQ) to INR5,777m in

4QCY13. Same store sales (SSS) growth is likely to sustain at ~9% level.
EBITDA margin is likely to remain flat YoY at 15.7%. 4Q is the best

quarter for Bata in terms of revenues and margins.
We expect PAT to grow 16.5% YoY (58.2% QoQ) to INR595m.
The stock is trading at 27.4x CY14E and 22.5x CY15E EPS. We value the
stock at 25x CY15E and arrive at a target price of INR1,170. Maintain
Buy.

Y/E December
2012 2013E 2014E
Sales
18.4 20.9 24.3
EBITDA
2.7
3.1
3.8
NP
1.7
2.0
2.5
EPS (INR)
26.8 30.7 38.5
EPS Gr. (%)
-33.4 14.7 25.3
BV/Sh.(INR)
108.8 131.4 159.4
RoE (%)
27.1 25.6 26.5
RoCE (%)
39.3 37.9 38.7
Payout (%)
26.0 26.4 27.1
Valuations
P/E (x)
39.4 34.4 27.4
P/BV (x)
9.7
8.0
6.6
EV/EBITDA (x)
24.0 20.8 16.9
Dividend yield
0.6
0.7
0.9
2015E
28.4
4.5
3.0
46.8
21.6
193.5
26.5
39.1
27.3

Stores added during the quarter (our expectation: 25) and guidance
on new store additions (our expectation: 100 in CY14).
Details about new advertisement campaign, loyalty program.
SSS growth (our expectation: 9%).
22.5
5.5
13.7
1.0
(INR Million)
Y/E December
Net Sales
YoY Change (%)
Total Expenditure
EBITDA
Margins (%)
Depreciation
Interest
Other Income
PBT
Tax
Rate (%)
Reported PAT
Adj PAT
YoY Change (%)
Margins (%)
E: MOSL Estimates
CY12
1Q
4,059
29.9
3,462
598
14.7
122
2
60
534
174
32.6
360
360
-67.1
8.9
2Q
5,038
16.5
4,206
831
16.5
124
2
67
773
247
31.9
527
527
28.4
10.5
3Q
4,237
13.8
3,727
510
12.0
127
2
97
478
158
33.0
320
320
5.3
7.6
CY13
4Q
5,090
18.0
4,286
805
15.8
140
5
76
734
226
30.7
509
509
13.0
10.0
1Q
4,538
11.8
3,910
628
13.8
131
2
69
564
180
32.0
384
384
6.6
8.5
2Q
5,725
13.6
4,764
961
16.8
141
2
78
895
276
30.8
619
619
17.6
10.8
3Q
4,844
14.3
4,212
633
13.1
156
2
89
563
187
33.2
376
376
17.3
7.8
4QE
5,777
13.5
4,870
907
15.7
159
2
116
861
267
31.0
595
595
16.8
10.3
CY12
CY13E
18,425
19.0
15,680
2,744
14.9
514
10
300
2,519
804
31.9
1,716
1,716
-24.0
9.3
20,879
13.3
17,751
3,128
15.0
565
8
361
2,915
942
32.3
1,974
1,974
15.0
9.5

January 2014
C204
Castrol India
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
CSTRL IN
494.6
156 / 3
371 / 289
3 / -15 / -3
CMP: INR315
We estimate EBITDA margin at ~20% v/s 20.3% in 3QCY13 and 22% in

4QCY12.
We expect revenue to grow 8% YoY led by 5% volume growth and 14%

increase in realization.
For the full-year, CY13, we model 2% volume degrowth, compensated

by 8% increase in realization.
We expect net profit to increase 3% YoY to INR1.2b.
The stock trades at 28.9x CY14E EPS. Our DCF-based target price is
INR297. Though we remain positive on CSTRL's long term prospects,
given rich valuations, we have a Neutral rating.

Y/E December
Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh.(INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2012 2013E 2014E

31.2 31.8 34.1
6.2
6.7
7.7
4.5
4.8
5.4
9.0
9.7 10.9
-8.1
8.8 12.3
13.1 14.1 10.7
83.8 71.4 71.4
109.1 94.2 94.7
96.7 90.0 85.5
34.8
24.0
24.3
2.4
32.4
22.3
22.3
2.4
28.9
29.5
19.5
2.5
2015E
36.9
8.6
6.0
12.1
11.1
12.3
88.0
120.9
86.6
Neutral
26.0
25.6
0.0
2.9
(INR Million)
Y/E December
Volumes (m litres)
Realizations (INR/ ltr)
Net Sales
YoY Change (%)
Net Raw Material
Employee Expenses
Other Operating Expenses
Total Expenditure
EBITDA
YoY Change (%)
Margins (%)
Depreciation
Interest
Other Income
PBT before EO Item
PBT
Tax
Rate* (%)
Reported PAT
Adj PAT
YoY Change (%)
Margins (%)
E: MOSL Estimates
CY12
1Q
52.6
149
7,817
4.1
4,590
265
1,394
6,249
1,568
-12.6
20.1
60
7
335
1,836
0
1,836
607
33.1
1,229
1,229
-10.0
15.72
2Q
56.7
150
8,513
7.8
4,974
339
1,506
6,819
1,694
-13.4
19.9
60
3
162
1,793
0
1,793
584
32.6
1,209
1,209
-15.2
14.20
3Q
46.1
156
7,213
7.4
4,334
310
1,354
5,998
1,215
-6.8
16.8
66
1
130
1,278
0
1,278
421
32.9
857
857
-9.9
11.88
CY13
4Q
48.5
156
7,580
-1.5
4,345
370
1,200
5,915
1,665
8.8
22.0
80
10
181
1,756
0
1,756
577
32.9
1,179
1,179
10.4
15.6
1Q
50.1
156
7,814
0.0
4,429
335
1,366
6,130
1,684
7.4
21.6
71
5
245
1,853
1,853
610
32.9
1,243
1,243
1.1
15.9
2Q
54.1
159
8,588
0.9
4,638
385
1,659
6,682
1,906
12.5
22.2
73
3
226
2,056
198
2,254
718
31.9
1,536
1,338
10.7
15.6
3Q
44.8
161
7,196
-0.2
4,091
432
1,212
5,735
1,461
20.2
20.3
79
1
197
1,578
30
1,608
563
35.0
1,045
1,015
18.4
14.1
4QE
50.9
161
8,190
8.0
4,699
310
1,555
6,564
1,626
-2.4
19.9
79
9
235
1,773
1,773
563
31.7
1,210
1,210
2.7
14.8
CY12
CY13E
203.9
153.0
31,209
4.7
16,894
1,284
5,520
23,699
6,142
-6.7
19.7
266
21
808
6,663
0
6,663
2,189
32.9
4,474
4,474
-7.0
14.3
199.9
164.8
31,788
1.9
17,857
1,462
5,792
25,111
6,677
8.7
21.0
302
18
903
7,260
228
7,488
2,454
32.8
5,034
4,806
7.4
15.1
Harshad Borawake (HarshadBorawake@MotilalOswal.com)/Kunal Gupta(Kunal.Gupta@MotilalOswal.com)

January 2014
C205
December 2013 Results Preview | Sector: Technology
Just Dial
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
JUST IN
70.0
97 / 2
1,440 / 589
12 / 108 / -
CMP: INR1,386
We expect revenue to grow 28.5% YoY (8% QoQ) in 3QFY14 to

INR1,223m, largely driven by growth in paid campaigns.
EBITDA margin would expand 290bp YoY (shrink 340bp QoQ) to 27.9%,
primarily driven by lower employee cost and higher operating
leverage. However, margins will see a sequential decline due to higher
ad spends during the quarter.
PAT is likely to grow 113% YoY to INR276m, driven by higher margins.

Y/E March
Sales
EBITDA
NP
EPS (INR)
EPS Gr. (%)
BV/Sh.(INR)
ROE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2013 2014E 2015E

3.6
4.7
6.0
1.0
1.4
2.0
0.7
1.2
1.6
10.1 16.6 23.0
6.3 64.6 38.1
61.3 71.1 84.8
26.3 25.2 29.5
37.5 35.8 41.7
41.1 38.4 40.4
136.6
22.5
95.6
0.3
83.0
19.4
66.0
0.5
60.1
16.3
46.9
0.8
2016E
7.3
2.6
2.0
29.1
26.6
102.2
31.1
44.0
39.9
Buy

Progress in monetization of new launches (Search Plus) during the
quarter.
Guidance on one-time advertising expenditure for new launches.
47.5
13.5
36.2
1.0
(INR Million)
Y/E March
Net Sales
YoY Change (%)
Total Expenditure
EBITDA
Margins (%)
Depreciation
Interest
Other Income
Extra-Ord expense
PBT
Tax
Rate (%)
Reported PAT
Adj PAT
YoY Adj PAT Change (%)
Margins (%)
E: MOSL Estimates
FY13
FY14
1Q
817
2Q
876
3Q
952
4Q
983
567
250
30.6
28
0
19
242
0
242
75
31
166
166
629
247
28.2
34
0
18
231
-15
216
71
33
145
155
710
273
27.8
42
0
64
295
0
295
81
27.6
214
214
20.4
17.7
714
238
25.0
41
0
34
232
0
232
102
44.0
130
130
13.6
21.8
1Q
1,046
28.0
683
363
34.7
42
0
73
393
0
393
113
29
280
280
68.5
26.8
2Q
1,127
28.6
774
352
31.3
44
0
87
394
0
394
108
27
287
287
84.9
25.4
3QE
1,223
28.5
887
336
27.5
44
0
102
394
0
394
118
30.0
276
276
112.5
22.5
4QE
1,282
30.5
886
396
30.9
45
0
109
460
0
460
140
30.5
320
320
49.6
24.9
FY13
FY14E
3,628
38.4
2,619
1,008
27.8
144
0
135
1,000
-15
984
300
30.4
685
700
38.8
19.3
4,679
29.0
3,230
1,449
31.0
168
0
370
1,651
0
1,651
487
29.5
1,164
1,164
66.3
24.9

January 2014
C206
September 2013 Results Preview | Sector: Diversified
Sintex Industries
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
SINT IN
324.1
11 / 0
74 / 17
11 / -23 / -57

Y/E March
2013 2014E 2015E
Net sales
51.1 55.1 58.4
EBITDA
7.7
8.3
9.2
Adj. PAT
4.1
3.3
3.5
Adj EPS (INR)
13.3 10.1 10.9
EPS Gr. (%)
2.1 -23.9
7.6
BV/share (INR) 100.4 107.3 117.9
RoE (%)
14.3
9.9
9.7
RoCE (%)
10.3
9.5
9.4
Payout (%)
7.8
8.4
7.2
Valuations
P/E (x)
2.5
3.3
3.1
P/BV (x)
0.3
0.3
0.3
EV/EBITDA (x)
4.8
5.0
4.7
Div. Yield (%)
2.1
2.1
2.1
2016E
66.6
11.2
4.6
14.1
29.4
132.1
11.3
10.8
7.0
2.4
0.3
3.9
2.1
CMP: INR34
Buy
We expect Sintex's 3QFY14 revenue to grow 4% YoY to INR14.8b, EBITDA

to increase 2% YoY to INR2.3b and adj PAT to remain flat YoY to INR1b.
We expect:
Monolithic to post 23% YoY de-growth, margin at 14% (stable QoQ).
Prefab to register a growth of 18% YoY, margins 23%.
Overseas composites to grow 19% YoY, margin 9.7% (partly driven by

stabilization of acquisitions in Poland and Germany). Overseas
automobile vertical is yet to show signs of an improvement, albeit
the growth in electrical and medical imaging segments.
Domestic to remain flat YoY (+2%), with margin of 15.5%.
The stock trades at FY15E P/E of 3.1x and EV/EBITDA of 4.7x. We value
Sintex at INR38 (3.5x FY15E EPS).

Outlook in monolithic business and improvement in working capital.
Operations stabilization in recent acquisitions in Germany and Poland,
along with outlook on overseas composite business.
Capex plan in textile business.
(INR Million)
Y/E March
1Q
Operating Income
10,806
YoY Growth (%)
-2.8
EBITDA
1,776
EBITDA Margin (%)
16.4
YoY Growth (%)
-3.4
Depreciation
483
Interest
354
Other Income
42
Extraordinary items
-289
Profit before Tax
692
Tax Provisions
241
Tax / PBT
25
PAT before MI & Income from Assoc
451
Min. Int. and Profit from Associate
17
Consolidated PAT
468
Adj. Consolidated PAT
757
YoY Growth (%)
-20.0
E: MOSL Estimates
FY13
2Q
11,985
3.6
1,828
15.3
-13.6
505
361
64
-49
978
258
25
721
3
723
772
-21.6
3Q
14,272
22.9
2,198
15.4
9.6
520
312
36
-450
953
420
30
533
3
536
986
43.2
FY14
4Q
14,013
36.9
1,890
13.5
-13.7
546
436
456
-116
1,247
-250
-18
1,497
13
1,510
1,626
79.0
1Q
11,281
4.4
1,609
14.3
-13.2
564
434
87
-37
661
201
29
460
6
466
503
-33.5
2Q
13,649
13.9
2,121
15.5
1.8
572
476
5
-84
993
269
27
724
5
729
813
5.3
3QE
14,795
3.7
2,309
15.7
1.9
556
467
71
-15
1,342
376
28
967
9
976
991
0.4
4QE
15,342
9.5
2,273
14.8
9.9
532
454
116
-14
1,390
379
27
1,011
10
1,021
1,035
-36.4
FY13
FY14E
51,079
14.7
7,695
15.1
7.2
2,054
1,462
596
-903
3,871
669
14.0
3,202
0
3,238
4,141
17.2
55,067
7.8
8,312
15.1
8.0
2,224
1,831
280
-150
4,386
1,225
27.0
3,162
30
3,132
3,282
-20.8
Sandipan Pal (Sandipan.Pal@MotilalOswal.com)

January 2014
C207
September 2013 Results Preview | Sector: Agrochemicals
UPL
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
UPLL IN
442.6
86 / 1
195 / 113
12 / 31 / 47

Y/E March
Sales
EBITDA
NP
Adj EPS (INR)
EPS Growth (%)
BV/Share (Rs)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2013 2014E 2015E

91.9 106.9 119.2
16.6 20.2 23.1
8.0
9.7 11.5
18.1 22.0 26.0
42.1 21.4 18.3
105.0 123.5 145.4
18.2 19.3 19.4
17.3 18.9 19.5
17.5 16.4 16.3
10.7
1.8
6.7
1.3
8.8
1.6
5.7
1.6
2016E
132.6
25.9
13.8
31.3
20.1
172.6
19.7
20.2
13.7
7.4
1.3
4.8
1.8
6.2
1.1
4.0
1.8
CMP: INR193
Buy
We expect consolidated revenue to grow 21.6% YoY to INR27.9b. While

domestic revenue would grow 26% YoY, international revenue would
grow 16% YoY.
EBITDA margin is likely to expand 120bp YoY to 18.8% due to favorable

forex movement and operating leverage, translating into EBITDA
growth of 30% YoY to INR5.3b.
We expect PAT to grow of 39% YoY to INR2.4b.
Valuations are attractive at 7.4x FY15E EPS and EV of 4.8x FY15E EBITDA.
Maintain Buy, with a target price of INR235 (9x FY15E EPS).

Update on season in US and Rabi crop in India.
Any revision in outlook for FY14, considering favorable climatic
patterns and weaker INR.
Status of integration of DVA Agro, Brazil and turnaround of Sipcam
Isagro, Brazil.
(INR Million)
Y/E March
Net Revenues
YoY Change (%)
Total Expenditure
EBITDA
Margins (%)
Depreciation
Interest
Other Income
Extra-Ord Expense
Tax
Rate (%)
Reported PAT
Income from Associate Co
Adjusted PAT
YoY Change (%)
Margins (%)
Market-mix
Domestic
YoY Change (%)
% of sales
Exports
YoY Change (%)
% of sales
Total Sales (incl OI)
E: MOSL Estimates
FY13
FY14E
1Q
22,222
19.8
18,278
3,944
17.7
734
1,109
275
2,375
0
2,375
703
29.6
1,672
357
2,029
10.1
9.1
2Q
18,560
4.8
15,299
3,261
17.6
820
869
262
1,834
0
1,834
457
24.9
1,377
-179
1,198
68.0
6.5
FY13
3Q
22,956
20.2
18,914
4,042
17.6
961
1,013
280
2,348
0
2,348
685
29.2
1,663
72
1,735
52.9
7.6
4Q
28,207
32.3
22,836
5,372
19.0
1,022
1,299
183
3,234
352
2,881
186
6.5
2,695
89
3,114
38.0
11.0
1Q
24,558
10.5
19,992
4,566
18.6
863
1,358
265
2,609
0
2,609
683
26.2
1,927
200
2,127
4.8
8.7
2Q
23,316
25.6
19,058
4,259
18.3
968
1,212
282
2,360
199
2,162
578
26.7
1,584
-38
1,745
45.7
7.5
FY14
3QE
27,917
21.6
22,661
5,256
18.8
950
1,250
300
3,356
0
3,356
1,007
30.0
2,349
70
2,419
39.4
8.7
4QE
31,061
10.1
24,922
6,140
19.8
968
1,239
174
4,106
0
4,106
717
17.5
3,390
63
3,452
10.9
11.1
91,945
19.9
75,327
16,618
18.1
3,537
4,290
1,000
9,791
352
9,439
2,032
21.5
7,407
339
8,022
36.2
8.7
106,853
16.2
86,632
20,221
18.9
3,749
5,060
1,020
12,432
199
12,233
2,984
24.4
9,250
295
9,695
20.8
9.1
6,220
16.0
27.6
16,280
20.7
72.4
22,500
4,910
-13.7
26.1
13,910
13.5
73.9
18,820
4,010
5.2
17.3
19,230
23.4
82.7
23,240
2,910
24.9
10.3
25,470
33.2
89.7
28,380
7,690
23.6
31.0
17,130
5.2
69.0
24,820
6,380
29.9
27.0
17,220
23.8
73.0
23,600
5,036
25.6
18.3
22,411
16.5
81.7
27,447
3,276
12.6
10.2
28,729
12.8
89.8
32,006
18,050
5.0
19.4
74,890
23.9
80.6
92,940
22,382
24.0
20.7
85,491
14.2
79.3
107,873
Jinesh K Gandhi (Jinesh@MotilalOswal.com)

January 2014
C208
September 2013 Results Preview | Sector: Electrical Goods
V-Guard Industries
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
VGRD IN
29.8
14 / 0
570 / 405
-6 / -9 / -16

Y/E March
Sales
EBITDA
NP
EPS (iNR)
EPS Gr. (%)
BV/Sh (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2013 2014E 2015E

13.6 16.2 20.0
1.1
1.4
1.8
0.6
0.8
1.1
21.1 27.1 36.0
23.8 28.6 32.7
87.6 108.9 136.7
26.7 27.6 29.3
27.4 29.2 33.4
19.4 21.4 22.6
22.4
5.4
14.2
0.7
17.5
4.3
10.8
1.1
13.2
3.5
8.4
1.5
2016E
25.0
2.3
1.4
46.0
28.0
173.4
29.7
37.5
20.2
10.3
2.7
6.5
1.7
CMP: INR472
Buy
We expect revenue to grow 14.7% YoY (19.9% QoQ) to INR4,003m in

3QFY14. Growth would bounce back from the 2QFY14 growth rate of
6.6% on the back of demand uptick witnessed in the South India
market, post November 2013.
EBITDA margin would expand 215bp YoY (140bp QoQ) to 9.5%, driven
by ~300bp YoY decline in other expenses to 5.5% (primarily due to
lower ad spends).
We expect PAT to grow 41.5% YoY (50% QoQ) to INR217m.
The stock is trading at 17.5x FY14E and 13.2x FY15E EPS. Maintain Buy.

Update on demand environment in South India market.
Demand for digital UPS, given resumption of power cuts.
(INR Million)
Y/E March
Net Sales
YoY Change (%)
Total Expenditure
EBITDA
Margins (%)
Depreciation
Interest
Other Income
PBT
Tax
Rate (%)
Reported PAT
Adj PAT
YoY Change (%)
Margins (%)
E: MOSL Estimates
1Q
3,190
32.8
2,847
343
10.7
28
45
5
276
69
25.1
207
207
67.3
6.5
FY13
2Q
3Q
3,135
3,490
48.2
41.5
2,835
3,233
300
257
9.6
7.4
29
29
43
49
11
15
239
194
59
40
24.8
20.7
180
153
180
153
162.9
23.2
5.7
4.4
FY14
4Q
3,787
38.5
3,588
199
5.3
29
63
5
113
24
21.1
89
89
-53.4
2.4
1Q
4,082
28.0
3,772
309
7.6
29
55
11
237
60
25.5
176
176
-14.6
4.3
2Q
3,340
6.6
3,070
271
8.1
29
48
11
205
60
29.4
145
145
-19.4
4.3
3QE
4,003
14.7
3,622
381
9.5
34
64
10
294
76
26.0
217
217
41.5
5.4
4QE
4,734
25.0
4,272
462
9.8
40
65
10
367
94
25.5
273
273
205.7
5.8
FY13
FY14E
13,602
40.0
12,503
1,099
8.1
114
200
36
822
193
23.4
629
629
23.8
4.6
16,160
18.8
14,738
1,422
8.8
135
236
42
1,093
284
26.0
809
809
28.5
5.0

January 2014
C209
Disclosures
This report is for personal information of the authorized recipient and does not construe to be any investment, legal or taxation advice to you. This research report does not constitute an offer, invitation or inducement
to invest in securities or other investments and Motilal Oswal Securities Limited (hereinafter referred as MOSt) is not soliciting any action based upon it. This report is not for public distribution and has been
furnished to you solely for your information and should not be reproduced or redistributed to any other person in any form.
Unauthorized disclosure, use, dissemination or copying (either whole or partial) of this information, is prohibited. The person accessing this information specifically agrees to exempt MOSt or any of its affiliates
or employees from, any and all responsibility/liability arising from such misuse and agrees not to hold MOSt or any of its affiliates or employees responsible for any such misuse and further agrees to hold MOSt
or any of its affiliates or employees free and harmless from all losses, costs, damages, expenses that may be suffered by the person accessing this information due to any errors and delays.
The information contained herein is based on publicly available data or other sources believed to be reliable. While we would endeavour to update the information herein on reasonable basis, MOSt and/or its
affiliates are under no obligation to update the information. Also there may be regulatory, compliance, or other reasons that may prevent MOSt and/or its affiliates from doing so. MOSt or any of its affiliates or
employees shall not be in any way responsible and liable for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report . MOSt or any of its affiliates
or employees do not provide, at any time, any express or implied warranty of any kind, regarding any matter pertaining to this report, including without limitation the implied warranties of merchantability, fitness
for a particular purpose, and non-infringement. The recipients of this report should rely on their own investigations.
This report is intended for distribution to institutional investors. Recipients who are not institutional investors should seek advice of their independent financial advisor prior to taking any investment decision
based on this report or for any necessary explanation of its contents.
MOSt and/or its affiliates and/or employees may have interests/positions, financial or otherwise in the securities mentioned in this report. To enhance transparency, MOSt has incorporated a Disclosure of Interest
Statement in this document. This should, however, not be treated as endorsement of the views expressed in the report.
Disclosure of Interest Statement
1. Analyst ownership of the stock
2. Group/Directors ownership of the stock
3. Broking relationship with company covered
4. Investment Banking relationship with company covered
Companies where there is interest

Sesa Sterlite
Bharti Airtel, Birla Corporation, Cairn India, Eicher Motors, GSK Pharma, Hero MotoCorp, HPCL, IOC, Marico,
Nestle India, State Bank of India, Tech Mahindra
None
None
Analyst Certification
The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the research analyst(s) was, is, or
will be directly or indirectly related to the specific recommendations and views expressed by research analyst(s) in this report. The research analysts, strategists, or research associates principally responsible
for preparation of MOSt research receive compensation based upon various factors, including quality of research, investor client feedback, stock picking, competitive factors and firm revenues.
Regional Disclosures (outside India)

This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such distribution, publication, availability or use would be contrary to
law, regulation or which would subject MOSt & its group companies to registration or licensing requirements within such jurisdictions.
For U.K.
This report is intended for distribution only to persons having professional experience in matters relating to investments as described in Article 19 of the Financial Services and Markets Act 2000 (Financial
Promotion) Order 2005 (referred to as "investment professionals"). This document must not be acted on or relied on by persons who are not investment professionals. Any investment or investment activity to
which this document relates is only available to investment professionals and will be engaged in only with such persons.
For U.S.
Motilal Oswal Securities Limited (MOSL) is not a registered broker - dealer under the U.S. Securities Exchange Act of 1934, as amended (the1934 act) and under applicable state laws in the United States.
In addition MOSL is not a registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the Advisers Act and together with the 1934 Act, the Acts), and under applicable state
laws in the United States. Accordingly, in the absence of specific exemption under the Acts, any brokerage and investment services provided by MOSL, including the products and services described herein are
not available to or intended for U.S. persons.
This report is intended for distribution only to Major Institutional Investors as defined by Rule 15a-6(b)(4) of the Exchange Act and interpretations thereof by SEC (henceforth referred to as major institutional
investors). This document must not be acted on or relied on by persons who are not major institutional investors. Any investment or investment activity to which this document relates is only available to major
institutional investors and will be engaged in only with major institutional investors. In reliance on the exemption from registration provided by Rule 15a-6 of the U.S. Securities Exchange Act of 1934, as amended
(the Exchange Act) and interpretations thereof by the U.S. Securities and Exchange Commission (SEC) in order to conduct business with Institutional Investors based in the U.S., MOSL has entered into
a chaperoning agreement with a U.S. registered broker-dealer, Motilal Oswal Securities International Private Limited. (MOSIPL). Any business interaction pursuant to this report will have to be executed within
the provisions of this chaperoning agreement.
The Research Analysts contributing to the report may not be registered /qualified as research analyst with FINRA. Such research analyst may not be associated persons of the U.S. registered broker-dealer, MOSIPL,
and therefore, may not be subject to NASD rule 2711 and NYSE Rule 472 restrictions on communication with a subject company, public appearances and trading securities held by a research analyst account.
For Singapore
Motilal Oswal Capital Markets Singapore Pte Limited is acting as an exempt financial advisor under section 23(1)(f) of the Financial Advisers Act(FAA) read with regulation 17(1)(d) of the Financial Advisors
Regulations and is a subsidiary of Motilal Oswal Securities Limited in India. This research is distributed in Singapore by Motilal Oswal Capital Markets Singapore Pte Limited and it is only directed in Singapore
to accredited investors, as defined in the Financial Advisers Regulations and the Securities and Futures Act (Chapter 289), as amended from time to time.
In respect of any matter arising from or in connection with the research you could contact the following representatives of Motilal Oswal Capital Markets Singapore Pte Limited:
Anosh Koppikar
Kadambari Balachandran
Email : anosh.koppikar@motilaloswal.com
Email : kadambari.balachandran@motilaloswal.com
Contact: (+65) 68189232
Contact: (+65) 68189233 / 65249115
Office address: 21 (Suite 31), 16 Collyer Quay, Singapore 049318
Motilal Oswal Securities Ltd

Motilal Oswal Tower, Level 9, Sayani Road, Prabhadevi, Mumbai 400 025
Phone: +91 22 3982 5500 E-mail: reports@motilaloswal.com

MO - India Strategy - Jan 2014

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

MO - India Strategy - Jan 2014

Uploaded by

Copyright:

Available Formats

January 2014

Happy New Year

5a. Financials - Banks

Punjab National Bank

Oil & Gas

2013 India At A Glance

in the Private Sector

specialties business to Mylan for USD1.6b

Coal Price Pooling approval implying that Coal

India is now liable to supply 68% of total coal

2011; announces OMO of INR100b

(17-year old alliance)

per Rangarajan committee formula

Current account deficit at record 4.8% of GDP for FY13

window for FCNR(B) and overseas bank borrowing

BJP sweeps in 3 out of 5 state elections (Chattisgarh,

OMCs dollar demand back to the market

Corporates and over 3000+ investor meetings

Sachin Tendulkar bids farewell from all forms of

9th Annual India General Conference covering close to 100

estimates FY14 CAD at USD56b

cricket with tears and cheers

New RBI chief Raghuram Rajan assumes office, opens swap

Government/RBI indicates return of majority of

2QFY14 GDP growth recovers to 4.8%

Just Dial listed, most successful IPO of the year,

RBI ups repo rate, cuts MSF rate by 25bp

JD(U) splits away from NDA ahead of election

India hikes bullion import duty to a record 10%

Ordinance passed for Food Security Programme approved by

GDP at 4.8% for Q4FY13

tion on ICICI, Axis and HDFC Bank exposing money

SC gave the clearance for resumption of

the Union Cabinet

DMK pulled out of the ruling UPA coalition

No applications received for bidding in Mar'13

First draft guidelines of US Immigration Bill

RBI releases Guidelines for Licensing of New Banks

month, deregulate bulk diesel sales and caps

Madhya Pradesh and Rajasthan); AAP forms govt in Delhi.

2014 Events Calendar

3QFY14 BoP (expected to remain moderate at less than 2%

Interim Budget session of Parliament

MOBIZ - Insights from domain

FY14 Monetary Policy (expected to cut rates

FY14 GDP (expected at 4.5%)

FY14 BoP (expected at 2.3% of GDP)

State elections for Andhra Pradesh and Sikkim

2QFY15 Monetary Policy (RBI expected

1QFY15 Monetary Policy review (expected to

State elections for Odisha

2014 FIFA World Cup

2014 FIFA World Cup

2QFY15 Monetary Policy review

Parliament Monsoon session

3QFY15 Monetary Policy

State elections for Maharashtra, Jammu &

4QFY14 Monetary Policy review (expected to cut rates by

Advance estimate of FY14 GDP

3QFY14 Monetary Policy review

Parliament Winter session

India Strategy | Happy New Year

S&P CNX: 6,314

2014: Happy New Year!!