5 June 2017

Market snapshot Todays top research idea

Equities - India Close Chg .% YTD.% Key takeaways from HUL Analyst meet: Strengthening the Core; Higher
Sensex 31,273 0.4 17.5
premiumization to drive earnings
Nifty-50 9,654 0.4 17.9
Nifty-M 100 17,770 0.9 23.8 v Clear focus on thought leadership far ahead of peers and improving
Equities-Global Close Chg .% YTD.% accessibility of their core brands in each segment.
S&P 500 2,439 0.4 8.9 v Strengthening the Naturals portfolio across segments.
Nasdaq 6,306 0.9 17.1 v Zero based budgeting across all areas will yield significant margin
FTSE 100 7,548 0.1 5.7 improvement
DAX 12,823 1.2 11.7
We believe that a confluence of positives including expectations of normal
Hang Seng 10,666 0.4 13.5
monsoon, moderate inflation, government schemes aiding growth, weak base of
Nikkei 225 20,177 -1.6 5.6
Commodities Close Chg .% YTD.% the past three years, end of commodity price deflation, continued
Brent (US$/Bbl) 49 -0.6 -10.9 premiumization, and cost savings is leading to strong outlook for rural-focused
Gold ($/OZ) 1,279 1.0 11.0 companies. HUVR with its high salience of rural sales, wide brand portfolio, and
Cu (US$/MT) 5,640 -0.6 2.1 broad distribution reach is uniquely positioned to take advantage of this
Almn (US$/MT) 1,929 0.3 13.2 confluence of positive factors.
Currency Close Chg .% YTD.%
USD/INR
USD/EUR
64.4
1.1
-0.1
0.6
-5.1
7.2
Research covered
USD/JPY 110.4 -0.9 -5.6 Cos/Sector Key Highlights
YIELD (%) Close 1MChg YTDchg GST Clears the last lap
10 Yrs G-Sec 6.6 0.0 0.1 Hindustan Unilever Strengthening the Core; Higher premiumization to drive earnings
10 Yrs AAA Corp 7.7 0.0 0.1 Fifth consecutive month of positive returns for Nifty; midcaps
Bulls & Bears
Flows (USD b) 2-Jun MTD YTD underperform
FIIs 0.0 -0.1 7.8 Cement Capacity addition slowing; to revert to mean in FY19
DIIs 0.0 0.1 2.4 Automobiles Bajaj Auto, Tata Motors
Volumes (INRb) 2-Jun MTD* YTD* Operating loss increases on RM cost; Net debt will continue to rise
SAIL
Cash 254 261 287 eroding equity value; Maintain Sell
F&O 2,469 5,373 4,812
Note: YTD is calendar year, *Avg Piping hot news
Quote of the day Export volumes rose in FY17 on low commodity prices
Investing is the intersection of economics v Merchandise export value may have grown just 5% in 2016-17 after two
and psychology. successive years of contraction, but volumes of outbound shipments rose for
most goods at a faster pace, showed the data compiled by the commerce
ministry.

Chart of the Day: Indias share in world market cap at seven year high
Over last 12 months, world market cap has increased 17.6% (USD11.1t); Indias market cap has increased 33%

Source: Industry, MOSL

Research Team (Gautam.Duggad@MotilalOswal.com)

Investors are advised to refer through important disclosures made at the last page of the Research Report.
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.

1 2
Under GST regime, your
clothes bill unlikely to rise
The governments move to keep
the Goods and Services Tax (GST)
rates on various textiles
including cotton fibre and low-
priced garments roughly around
the current levels will prevent any
flare up in prices, industry
executives said on Sunday
3 4
Modi governments waterways
plan sails through green hurdle
in Uttar Pradesh
With a BJP government firmly in
saddle in Uttar Pradesh, a key
environmental hurdle holding up
the National Waterways project
has has been removed
6 7
Infosys industrial internet
business head Gordon Muehl
quits
Infosys Ltds hope of generating
more business by offering data
analytics solutions to its
manufacturing clients has received
a setback. Chief executive officer
(CEO) Vishal Sikkas former SAP SE
colleague and the head of
companys industrial internet
business, Gordon Muehl, has
resigned
5 June 2017
In the news today
Kindly click on textbox for the detailed news link
GST: Even as bullion sector heaves sigh of relief, diamond
exporters dub Centres move on .25% rate introduction retrograde
Diamond exporters have called the governments move to introduce a
0.25% goods and services tax rate (GST) on rough diamonds to keep a trail
on such items retrograde. However, the bullion sector heaved a sigh of
relief, as gold, silver and processed diamonds including jewellery will
be taxed at 3% (and not more) under the new indirect tax regime, against
the current tax incidence of around 2%. Nevertheless, it has now sought a
cut in the basic Customs duty on gold from the current 10% to discourage
smuggling
Tax sops may top agenda at
telecom meet
Telcos are expected to seek
immediate cuts in levies and 5
rationalisation of taxes when they
meet an inter-ministerial group
(IMG) that's been set up to look Andhra Pradeshs plan for
into their financial woes from June capital Amaravati faces green
12 to 17 . The panel will start by hurdle
meeting the more stressed Andhra Pradeshs plan to build a
companies such as Reliance new capital city, Amaravati, has
CommunicationsBSE -0.48 % run into a potential roadblock. The
environment ministry has formed
an expert panel to examine the
state governments master plan
for the capital after several
environmental concerns were
raised over the project
After NTPCs Rs 28,000 cr
capex plan revealed, Centre
waives buyback offer that
could have netted it Rs 8,000
cr
With NTPC flagging a whopping Rs
28,000-crore capex plan for FY18,
the Centre has exempted the
power PSU from buyback
obligation, which could have
fetched the exchequer nearly Rs
8,000 crore in the current fiscal...
2
 5 June 2017
Update

GST
Clears the last lap
All set for July roll out
GST council in its 15th meeting on June3, 2017 finalized the rates for the pending
commodities (refer exhibit 1 for details) and cleared the pending rules related to
transition provisions and returns paving way for the roll out of GST wef July 1,
2017. Once again the government has struck a fine balance to contain inflation by
keeping the tax rates as close to the current rates as possible. The council has also
increased the input tax credit (during transition) on items chargeable at more than
18% GST rates to 60% (v/s 40% as proposed earlier) to address the concerns of
Industry on loss of input credit; leading to destocking in the supply chain. Further,
a committee has been formed to address the complaints on anti-profiteering with
the roll out of GST. In our view the changes in the tax rates will positively impact
Page industries; while, it will be neutral for Arvind, Titan and Britannia amongst
our coverage universe.

Textile & garments witness rejigs: Positive Page; Neutral- Arvind

n The tax rates for the textile industry have been increased to 5% for natural
fabric/ yarn (exempt earlier) and 18% for manmade fabric/yarn (v/s ~12.5%
earlier). However, they can claim an input credit (currently not available for
exempted category) which will partially offset the increase in the tax rates.
n We believe that the companies will be able to pass on the increase in the tax
rates in the organized B2B chains; however, for the other supplies there may be
a slight adverse impact.
n The tax rates on readymade garments under GST have been fixed at 5% for
selling price less than INR1000 and at 12% for products above INR1000.
n We believe for the industry as a whole the rates have been kept neutral with a
slight decrease in the tax rates (~1-2%) for category below INR1000 and increase
of (~5-6%) for category above INR1000. However, for category above INR1000
we note that the companies will be allowed to avail an additional input credit of
~ 3-4%.
n We believe that the lower tax rate applicable to the innerwear category will aid
the ongoing premiumization.
n Impact for Page Industries: Positive as current indirect tax incidence for the
company was around 8-9%. It is also positive against expectations of 18% rate
on all branded garments.
n Impact for Arvind : Neutral as the price increase in the branded garments and
textiles is likely to be passed on. However, may have a slight adverse impact
during transition.
Under the current structure, the total output tax the company pays on
readymade portfolio is VAT 5.5% and Excise 1.2% while the input credit
which is not available is ~3.8%. Therefore, the total impact is 10.5%.
~80% of the readymade portfolio is above INR1000 which is levied with 12%
GST rate. Here, the company will have to take a price hike of 1.5% which
company shall be able to pass on.~20% of the portfolio is below INR1,000
which is primarily Unlimited brand and is levied with 5% GST.

5 June 2017 3
 On textiles currently, output tax is Nil and input credit which company is not
able avail is ~3%. This has been levied with 5% GST rate.
50% of the portfolio is exports which will not be impacted; while, in balance
the company is confident of passing on the hike except for unorganized
channel which may get impacted.
Management has highlighted that during the transition period, the company
may face difficulty with respect to existing stock where it will have to take a
hit in near term.

Jewelry taxes hiked to 3%; Likely to be passed on: Neutral Titan

n Indirect tax rate for Jewelry have been made slightly higher at 3% than exiting
rate of around 2% but was lower than fears of 5% rate. We believe that this will
not make too much of a difference to the category.
n Impact for Titan: Neutral. Given the pricing power of the Tanishq brand we do
not think passing on the increase of 1% will be any problem; but, if GST is
effectively implemented Titan which has only 5% share of the total jewelry
market in India could be a gainer over the medium term.

Biscuits taxed 18% across categories: Neutral- Britannia

n The GST rate for biscuits was fixed at a flat rate of 18% as against the current
practice wherein the products below Rs100/kg price points were given a
concession.
n We believe that the increase in the tax rates in this category is likely to affect
players like Parle and Priya Gold which have over 50% of their portfolio is under
the INR 100/kg price point
n The value segment was already declining in salience over the past 4-5 years.
Price increases/ grammage reduction in the value segment may give a further
boost to premiumization by narrowing the gap between the value and the mid-
range segment; where, Britannia has ~70% of its portfolio.
n Impact for Britannia: Neutral as it was paying anywhere between 15-17%
indirect tax on its biscuits over INR 100 per kg which is ~90% of portfolio. Less
than 10% of its portfolio was priced below INR 100 per kg (Tiger brand). We
believe that the rates for the mid to premium category are in line with the
industry expectation of 18%.

Exhibit 1: Changes in tax rates for major categories

Current Effective GST
Sectors Tax Rate Rate
Gems and Jewelry 2% 3%
Biscuits 5-17% 18%
Textile & Garments
Ready Made Garments
- Above 1000 6-8% 12%
- Below 1000 5-7% 5%
Textiles
Natural 0% 5%
Man made 12.5% 18%

5 June 2017 4
 Transitional input credits increased; Destocking to ease in few categories
n GST council has hiked the input duty credit on inventory bought before the roll
out of GST to 60% (vs 40% as proposed earlier), as per industry demand. The
increase has been made applicable to items which are taxed at a GST rate
exceeding 18% GST. This in our view will partially address the concerns of
destocking in the supply chain for some of the categories during the migration
to the era of GST.
n Impact on room air conditioners /Consumer durables: The large Multi Brand
outlets/ distributors had stopped buying since mid-May on concerns over input
credit on inventory post July as 40% credit would result in a 3-4% loss. This
resulted in a 20% drop in air-con primary sales in May.
n We believe that with this revision the primary sales should restart in June.

5 June 2017 5
 2 June 2017
Update | Sector: Consumer

Hindustan Unilever
BSE SENSEX S&P CNX
31,273 9,654 CMP: INR1,087 TP: INR1,215(+12%) Buy
Strengthening the Core
Higher premiumization to drive earnings

Stock Info We attended HUVR annual investor meet 2017. Following are the key takeaways:
Bloomberg HUVR IN n Clear focus on thought leadership far ahead of peers and improving
Equity Shares (m) 2164.246 accessibility of their core brands in each segment.
52-Week Range (INR) 1101 / 783 n Far more emphasis on premiumization across segments than earlier.
1, 6, 12 Rel. Per (%) 13/11/9
n Strengthening the Naturals portfolio across segments keeping Lever Ayush as
M.Cap. (INR b) 1937.3
the master brand in addition to other specific natural brands like Indulekha,
M.Cap. (USD b) 28.9
Avg Val, INRm
St Ives and the new skin and hair brand Citra.
1208
Free float (%) 32.8 n Zero based budgeting across all areas will we believe yield far more in terms
of margins than we had anticipated, particularly when allied with strong
Financials Snapshot (INR b) premiumization.
Y/E Mar 2017 2018E 2019E n Increase in sampling and sachets to drive market development of premium
Net Sales 313.0 348.3 395.0 products and formats of the future.
EBITDA (Rs b) 60.5 70.0 82.3
n Building strong capabilities across channels.
Net Profit 42.5 49.3 58.4
n A confluence of positives including expectations of normal monsoon,
EPS 19.6 22.8 27.0
EPS Gr. (%) 1.9 16.1 18.4
moderate inflation, government schemes aiding consumption growth, weak
BV/Sh. (INR) 30.8 31.8 33.6 base of the past three years, end of commodity price deflation, continued
P/E (x) 55.4 47.7 40.3 premiumization, and cost savings is leading to outlook for rural-focused
P/BV (x) 35.3 34.2 32.4 companies being brighter than in the past few years
RoE (%) 65.6 72.8 82.5 n For HUVR, the salience of rural sales is one of the highest, brand portfolio is
RoCE (%) 87.3 96.6 109.6 the widest, and distribution reach is the broadest among peers, making it
uniquely positioned to take advantage of the confluence of positive factors.
Shareholding pattern (%)
n We expect earnings CAGR of 17% over FY17-19, far superior than the 6-11%
As On Mar-17 Dec-16 Mar-16
for the past 3/5/10 years. This along with best-of-the-breed return ratios and
Promoter 67.2 67.2 67.2
dividend yield justifies HUVRs premium valuations. The stock trades at 40x
DII 5.7 5.8 4.8
FII 13.3 13.1 14.2
FY19E EPS. We reiterate Buy with a price target of INR1,215 (45x FY19E EPS;
Others 13.9 13.9 13.8 5% premium to 3-year average).
FII Includes depository receipts
n Delivery and Strategy going forward: FY17 was a challenging year with
Stock Performance (1-year) markets remaining subdued (urban and rural), commodity cost inching up and
Hind. Unilever
Sensex - Rebased extreme climatic conditions. In the latter half of the year when the markets
1,150 were just witnessing an uptick in demand, demonetization pulled the demand
1,050 back. Even in this tough environment HUVR has delivered a resilient
950 performance of 4% USG and 1% UVG with 40bp improvement in margins.
850 Going forward things looks even more positive for rural-focused consumer
750 companies like HUVR than in the past four years (Juggernaut moves
Jun-16

Jun-17
Sep-16

Dec-16

Mar-17

forward). For the companys core strategy remains the same but with
renewed focus.

5 June 2017 6
 Key thrusts for the future are:
n Strengthening the Core brands (Surf Excel, Lux, Red Label, Kissan, Vim and
Dove): The core portfolio for HUVR is distinctive for different parts of India.
Apart from gaining market share, the key focus is on making the core business
aspirational, increasing the size of the pie and lead market penetration. Every
12-24 months, company looks to renovate or innovate the brands to make it
relevant and aspirational. They have been investing behind market development
to increase its size and also making it more sustainable. Categories like male
grooming, hair conditioners, cleaning liquids, fabric conditioners, hand wash and
face wash are witnessing strong double digit growths led by market
development efforts by HUVR. With greater reach across channels the company
is in a better position to lead the market and gain share across categories.
n Accelerating premiumization across categories: Company is looking to
accelerate the process of premiumization across categories and brands. By
premiumizing the company offers higher order benefits at a higher price.
Premiumization in detergents is far more important compared to other
categories due to the 100% penetration levels. The premium brands (Rin + Surf
Excel) have been growing ahead of the market for HUVR and still there is huge
scope as only 1 in 10 washes in India uses a HUVR premium laundry powder.
Matics has been another big success. Unlike detergents, premiumization has
been slower in soaps as liquid soaps and body wash gels are still very small as of
now. In the skin care segment company is also looking to accelerate the through
trend setting innovations across brands like Ponds, Lakme and Fair & Lovely. E.g.
for premiumisation Introduced water saving detergent bar that delivers
superior brightness. In dish wash the company has introduced Vim bar with
Pudina to fight grease and smell and in detergents Wheel has been fortified with
lemon. In skin care, introduced weightless mousse.
n Strengthening the Naturals Portfolio: Company has now built a strong naturals
portfolio based on expertise & efficacy through the existing brands (Tresemme,
Clinic plus, Vim and Fair & Lovely) as well as extending their presence in new/
recent Ayurvedic brand (Ayush, Indulekha, St. Ives and Citra). Company is now
looking to strengthen its natural portfolio using existing brands, building Ayush
as the master brand (will be rolled out across the country from just South India
as of now, where it has received excellent response) and also bringing specialist
brands (Indulekha - Ayurvedic medicinal hair oil brand and Citra mainly
focused on skin care, using natural herbs from ASEAN and Japan, price
positioning at a premium to Ayush) in the market place.
n Zero based budgeting (ZBB) & Symphony to drive savings: ZBB which is a 6-
stage approach for driving sustainable cost reduction by changing the mindset
of the employees. Symphony program (for end to end value chain) is an
organization wide engagement to drive savings in material costs, non-material
costs, marketing & trade spends and overheads. This will help reduce any cost
which doesnt add value. There was a 1.5x increase in savings from 2014 to 2016
through these programs. We think that ZBB across all areas will yield far more
on margins than what the market was expecting earlier particularly when it ends
up questioning all set practices of the company. The company has identified 5
out of its 29 factories for implementation of first stage of ZBB. Assuming overall
costs were 100 as much as 45 was identified as non- value added. Of the 45, ~16
5 June 2017 7
 were targeted for culling and savings are being made on 12. There has also been
healthy improvement in inventory days through robust sales and operations
planning, optimization of networks and learnings from other industries.
n Increasing use of Sampling and sachets: Company has been increasing the use
of science based sampling across categories for market development. This has
helped company drive trials of their products and thus better growth. Product
experience has been elevated through the use of food ambassadors, dry
sampling (small SKUs free with a large one) and partnering (giving samples with
other FMCG companys products). Access packs CAGR growth in case of foods
for example has increased from 30% in 2012 to 100% by 2016.
n Building strong capabilities across channels: Company is strengthening the
existing channels (Wholesale, General trade [GT] and Pharmacy) by increasing
number of stores for its products, more assortment across stores and increasing
frequency of refill. Technology and talent will play a key role in effective
coverage and increasing throughput from current store. Technology is helping
company to make tailor made assortment for every store. Apart from the
traditional channels, it has been building channels of the future (Modern trade
and E-commerce) to be present across all relevant channels for consumers and
also be in top in that channel. The market share for HUVR in e-commerce is
higher than Modern trade (MT) and the market share in MT is higher than in GT.
If GT market share is 100, MT is 118 and e-commerce is 130-140. Management
believes they can sustain this advantage over peers because of wider product
offerings, their leading brands appearing earlier on screens, focusing on better
presentation for faster conversion, ahead of time skills developed on
ecommerce and modern trade and learnings from Unilevers global experience.
n Valuation and view: We expect HUVR to report 17% PAT CAGR over FY17-19
against 6.1% CAGR in the last three years, 10.6% CAGR in the last five years and
10.7% CAGR in the last 10 years. Valuations are not cheap at 40.1x FY19E EPS,
but we believe that given the potentially strong earnings growth, premium
valuations are justified, particularly as return ratios and dividend yield remain
best of the breed. We had upgraded the stock to BUY after the strong 4QFY17
results. We maintain our Buy rating and target price of INR1,215 (45x FY19E EPS;
5% premium to 3-year average).

Exhibit 1: Changes to the model have resulted in 1.6%/4.3% change in FY18/FY19 EPS
New Old Change
FY18E FY19E FY18E FY19E FY18E FY19E
Sales 354,778 402,179 354,778 398,676 0.0% 0.9%
EBITDA 69,997 82,323 68,910 78,893 1.6% 4.3%
PAT 49,312 58,367 48,556 55,973 1.6% 4.3%
Source: Company, MOSL

5 June 2017 8
 Database Periodical | 5 June 2017

Bulls & Bears

India Valuations Handbook
Strategy: Fifth consecutive month of positive returns for Nifty; midcaps underperform
n Fifth consecutive month of positive returns for Nifty: The Nifty has sustained its upward momentum and
delivered 3.4% returns in May, the fifth consecutive month of positive returns. Strong domestic liquidity, good
earnings season, progress on GST, and prediction of normal monsoon ensured that the momentum remained
intact. Midcaps have underperformed the Nifty for the first time in five months, reflecting the expensive
valuations in certain pockets (midcaps trading at 7% premium to large caps). Liquidity remains benign, with FII
flows of USD1.5b and Domestic MFs flows also at USD1.5b in May.
n Earnings season concludes; Nifty PAT 6% ahead of estimate: The last quarter of FY17 concluded with a modest
beat v/s expectations. MOSL Universe delivered 13.9% sales growth (our estimate was 14.2%), 9.3% EBITDA
growth (our estimate was 6.5%), and 28.7% PAT growth (our estimate was 23.3%). For the Nifty, sales grew
13.5% (our estimate was 13.4%), EBITDA grew 4.6% (our estimate was 3.4%), and PAT grew 15.2% (our estimate
was 8.6%). We have marginally revised the Sensex EPS upwards by 3% to INR1,349 for FY17, by 0.6% to INR1,581
for FY18 and by 0.9% to INR1,922 for FY19. However, just four companies (Tata Motors, Tata Steel, L&T and
Reliance) account for the entire INR50b delta in Nifty PAT over our estimate. The upgrade/downgrade ratio is
skewed in favor of downgrades, with 69 companies FY18E EPS getting downgraded by 3%+ v/s 46 companies
FY18E EPS getting upgraded by 3%+.
n Indian markets best performing in YTD CY17: For CY17 YTD, India (+17%), MSCI EM (+17%), Korea (+16%),
Taiwan (+9%) and Indonesia (+8%) were the best performers among key global markets in local currency terms.
Among key markets, Russia (-18%) has delivered negative returns. MSCI EM (+25%) outperformed MSCI India
(+13%) in trailing 12 months. However, over the last five years, MSCI India has outperformed MSCI EM by 91%.
n Sectoral performance trends; Healthcare underperformance continues: In May, Pvt Banks (+8%), Consumer
(+7%), Technology (+6%), Auto (+6%) and Telecom (+1%) delivered positive returns, while Healthcare (-10%),
Media (-7%), Utilities (-5%) and PSU Banks (-3%) were laggards. Barring Healthcare, Technology, Oil and Utilities,
all other sectors trade at a premium to their respective LPA. In this edition of Bulls & Bears, we take a deep dive
into valuation metrics of the NBFC sector.
n Valuation comfort lacking; downgraded ratings for 17 stocks in this earnings season: The Nifty has delivered
~17% returns in YTD CY17, led by confluence of positive factors, namely strong liquidity, progress on GST,
prediction of normal monsoon, BJPs strong performance in UP, and less than feared impact of demonetization.
Barring the month of May, midcaps have outperformed the Nifty consistently and now trade at a premium of 7%
to large caps. While the just-concluded earnings season was better than expectations on aggregate, the internals
do not suggest strong underlying operating recovery, as yet. Going forward, we note that GST could result in
material changes to our current optimistic 17% Nifty earnings growth forecast for FY18. We remain concerned
on valuations. We have downgraded the ratings of 17 stocks (largely owing to expensive valuations) in this
earnings season and have upgraded the ratings of five stocks. At current trailing P/E of 22.4x and forward P/E of
19x, we see limited triggers for further re-rating, unless accompanied by earnings revival. We prefer stocks with
earnings visibility, pricing power and operating catalysts. Our top ideas include: Yes Bank, ICICI Bank, Tata
Motors, Maruti, ITC, Britannia, Aurobindo Pharma, ONGC, Coal India, Hindalco, Amara Raja, and JK Cements.
Exhibit 2: Nifty MoM change (%) fourth consecutive month of positive return
Nifty MoM Change (%) 10.8

3.1 4.0 4.2 4.6 3.4

2.0 1.5 1.6 1.7 3.7 3.3
1.4 0.2 1.4
0.1
0.8 0.3 1.6 0.5
2.0
4.8 4.7
6.6 7.6
May-15

Dec-15

May-16

May-17
Jun-15

Apr-16

Dec-16
Aug-15

Jun-16

Apr-17
Oct-15
Nov-15

Jan-16

Mar-16

Aug-16
Jul-15

Oct-16
Nov-16

Jan-17

Mar-17
Sep-15

Feb-16

Jul-16

Sep-16

Feb-17

5 June 2017 9
 n Sectoral valuation trends; Consumer, Private Banks and Technology top outperformers: Consumer trades
above its historical average valuations. At a P/Eof 39.3x, it is at 33% premium to its historical average, and at a
P/B of 11.6x, it is at 22% premium. Sales seems to have recovered gradually after demonetization in 4QFY17, a
lingering impact persists mostly for companies with greater exposure to rural regions and the wholesale
channel. 1HFY18 will have some effect of GST implementation.
n Private Banks are trading at 2.9x P/B, above their long-period average valuations (33% premium), driven by
continued outperformance of retail lenders and improvement in return ratios. The sector was the best-
performing in May (+8% return MoM). Loan growth at 25%+ for mid-sized banks and 15%+ for larger banks is
significantly ahead of system loan growth of ~6%.
n The Technology sector trades at a P/E of 16.2x, near its historical average of 16.1x. 4QFY17 earnings started on a
soft note, with TCS and Infosys both reporting below-expectation revenue growth. The end was no better, with
organic growth guidance at HCLT weak and margins at TECHM a negative shock. Now that the seasonally weak
bit of the year is behind, expectations are of a revival in BFSI gradually through the year.

Sector valuations: Defensives lag Cyclicals

Relative to Sensex Relative to Sensex
PE (x) PB (x)
Sector P/E (%) P/B (%)
Current 10 Yr Avg Prem/Disc (%) Current 10 Yr Avg Current 10 Yr Avg Prem/Disc (%) Current 10 Yr Avg
Auto 19.9 14.8 34.2 5 -16 4 3.1 29.8 46 16
Banks - Private 21.9 16.6 31.5 15 -5 2.9 2.2 33.1 8 -17
Banks - PSU 11.8 -74.8 -115.7 -38 -475 0.9 1.1 -15.5 -67 -60
NBFC 23.3 17.8 30.6 23 3 4 3.2 26.2 47 19
Capital Goods 31.1 26.6 17.1 64 50 3.3 4.1 -19.4 19 47
Cement 26 17.6 48.1 37 1 3.1 2.3 34.9 14 -14
Consumer 39.3 29.6 32.6 107 73 11.6 9.5 22.3 324 264
Healthcare 20.2 22.3 -9 7 29 3.4 4.1 -17.9 22 54
Media 26.4 22.6 16.9 39 30 5.4 4.3 25.8 99 62
Metals 13.1 12.3 6.5 -31 -29 1.3 1.6 -18.3 -53 -43
Oil & Gas 11.1 11.8 -6.3 -42 -31 1.5 1.6 -7.8 -45 -39
Retail 46.9 33.4 40.5 147 92 8.3 9.2 -9.5 204 246
Technology 16.2 16.1 1 -15 -7 3.7 4.2 -13.8 33 58
Telecom Loss - - - - 2.2 2.7 -20.1 -21 1
Utilities 11.8 15.3 -22.5 -38 -9 1.6 2 -22.8 -43 -23

Indias share in world market cap above historical average

n Indias share in the world market cap is at 2.6%, above at its long-term average
of 2.4%. Over last 12 months, world market cap has increased 17.6% (USD11.1t);
Indias market cap has increased 33%.

Trend in India's contribution to world market cap (%) Market cap change in last 12 months (%)
India's Contribution to World Mcap (%) 0.8 2.0 0.5 1.1 1.5 0.6 6.7 26.9 5.6 3.5
3.5
3.3 Mkt cap chg 12M (%) Curr Mcap (USD Tr)
40
3.0 33
Average of 2.4% 2.6 26 26 25 22
2.5 15 14 13
5
2.0
1.6
1.5
India

Korea

China
Taiwan
Brazil

Japan
Indonesi

Russia

US

UK
Jul-08

Jun-12

Nov-15
Jun-16
May-07

May-11

Apr-15
Dec-07

Feb-09
Sep-09
Mar-10

Dec-11

Jan-13
Aug-13
Mar-14
Sep-14

Dec-16
Oct-10

5 June 2017 10
 Sector Update | 2 June 2017

Cement
Capacity addition slowing; to revert to mean in FY19
Bulk of the additions to come up in the South and East; unlikely to impact
pricing

n We attended a conference call with cement equipment supplier, FL Smith on the likely
capacity additions in India over the next two years.
n FL Smith expects aggregate capacity addition of ~30mt over FY17-19 - 10mt in FY18
and 20mt in FY19. This is against annual capacity addition of ~20mt over FY12-16,
indicating some slowdown in the pace of capacity addition. It expects most of the
addition to be in the South and the East.
n We estimate capacity addition of 31mt over FY17-19, with the South and the East
accounting for ~58% of the incremental capacity. Given the strong pricing discipline in
the South, we believe higher capacity addition is unlikely to impact pricing in the
region. Similarly, given the robust demand in the East, we do not expect significant
price correction due to additional supplies.

Moderate slowdown in capacity addition

n FL Smith estimates capacity addition of 12-13mt in FY17, which it expects would
reduce to ~10mt in FY18. Majority of the capacity addition would be in the
South, with players like NCL Industries and Penna Cement setting up capacities.
n In FY19, capacity addition is likely to be higher at 20mt, with most of the
capacity addition being in the East and the South.
n Going by FL Smith estimates, the average annual capacity addition over FY17-19
works out to ~15mt, indicating a slowdown from the annual addition of ~20mt
over FY12-16.

South and East likely to see highest capacity addition

n FL Smith expects capacity addition to be the highest in the South and the East.
n The South is likely to see the highest capacity addition over the next two years,
with investments by NCL Industries, Penna Cement, Shree Cement, Sagar
Cement, KCP Industries, JSW Cement, and My Home Industries in the region.
n The North is likely to see limited clinker capacity addition over the next 12
months - additions by Wonder Cement and Ambuja Cement are likely to be
completed by the end of FY19.
n The West is likely to see nominal capacity addition in the form of Chettinand
Cement in Sholapur and Penna Cement's grinding unit.
n The Central markets are likely to see capacity addition only in the form of
UltraTech's 3.5mt in Dhar (Madhya Pradesh).
n The East is likely to see capacity additions by JSW Cement, Emami Cement and
Shree Cement, which could put utilization levels in the region at risk.

5 June 2017 11
 Other takeaways
n Cement plant costing: The cost of putting up a cement plant (excluding
infrastructure like rail/WHRS) works out to be INR5,500-6,000/t.
n Enquiry levels picking up; conversion of enquiries to orders yet to begin: While
ordering activity is still quite low, FL Smith has had a lot of enquiries from mid-
sized cement players in the last couple of quarters.

Our expectations
South and East to witness 58% of overall supply addition: Our analysis suggests
that while capacity utilization in the South remains weak, capacity addition in the
region would be strong over the next two years. Additionally, the East, which was
reeling under severe pricing pressure till about three months ago, is also likely to
witness supply influx.

Exhibit 3: % share of capacity addition regionally

East West South Central North

19%
28%

11%

12%

29%

Source: Company, MOSL

Supply-heavy South and East markets unlikely to see major pricing pressure: We
believe as pricing discipline is very strong in South India, higher capacity addition is
unlikely to impact pricing in the region. Similarly, given the robust demand in East
India, incremental supplies in the region are unlikely to translate into a significant
price correction.

5 June 2017 12
 Sector Update | 2 June 2017

Automobiles
CMP: INR2,846 TP: INR3,422 (+20%) Buy

Bloomberg BJAUT IN Below estimate at ~314k (est. 340k); -9.8% YoY

Equity Shares (m) 289.4 Domestic volume decline 15% YoY; exports down 3% YoY
M.Cap. (INR b) / (USD b) 840.6/13.1
52-Week Range (INR) 3122/2510 n BJAUTs May 2017 sales were 313,756 units (lower than est. of ~340,000), -9.8% YoY.
1, 6, 12 Rel. Per (%) -7/-14/-7 Domestic volume declined 14.8% YoY (-2.2% MoM) while exports declined 2.6% YoY.
Overall FY18 volume est. at 4.02m asking for a residual monthly run rate of 337.9k
Financial & Valuation (INR b) units.
Y/E MARCH 2017 2018E 2019E n Domestic volumes declined 14.8% YoY to 174k units (v/s est. of 190k units).
Sales 217.8 246.6 280.5 Motorcycle volumes declined by ~9.8% YoY as domestic motorcycle sales declined 13%
EBITDA 44.2 50.3 58.7 YoY to 156.5k as growth continues to be under pressure. Motorcycle exports declined
NP 38.3 43.5 51.6 by 5.4% YoY.
Adj. EPS (INR) 132 150 178 n Dominar volume for May-17 came in at ~2.7k units, led by a good response for the
EPS Gr. (%) -2.6 13.7 18.5 product including exports of ~1.2k units. Management is very positive on the brand
BV/Sh. (INR) 589 661 732
going forward. As per management on Dominar, sure to achieve the target of about
RoE (%) 25.3 24.1 25.6
9,000-10,000 sales of Dominar. Whether it will happen by September or December
RoCE (%) 24.6 23.3 24.8
that is a question of time. The feel that we have from the buyers of Dominars is
Payout (%) 50.5 52.0 60.0
fantastic but we may have to give it some more time than what we expected.
Valuation
P/E (x) 21.5 18.9 16.0
n Management indicated domestic volume recovery by 2QFY18 and has steady retail
P/BV (x) 4.8 4.3 3.9 market share at ~19% currently.
EV/EBITDA (x) 15.6 12.8 10.6 n 3W volumes still not recovered as the category were the worst hit on demonetization
Div. Yield (%) 1.9 2.3 2.8 impact. Domestic 3Ws declined by 28% YoY while 3W exports continue its growth
momentum for the second consecutive month and grew 20% YoY.
n The stock trades at 18.9x/15.9 FY18E/19E EPS. Maintain Buy.

Snapshot of volumes for May-17

YoY MoM Residual
Residual
YoY (%) MoM (%) FY18 Monthly
Company Sales May-17 May-16 Apr-17 FY18YTD FY17YTD Gr. (%) Growth (%)
chg (%) chg chg estimate Run rate
Bajaj Auto 313,756 347,655 -9.8 329,800 -4.9 643,556 677,764 -5.0 4,022,263 9.7 13.1 337,871
Motorcycles 277,115 307,344 -9.8 293,932 -5.7 571,047 599,242 -4.7 3,553,944 10.4 13.8 298,290
Total Two-
Wheelers 277,115 307,344 -9.8 293,932 -5.7 571,047 599,242 -4.7 3,553,944 10.4 13.8 298,290
Three-Wheelers 36,641 40,311 -9.1 35,868 2.2 72,509 78,522 -7.7 468,319 5.0 7.7 39,581
Domestic 174,047 204,234 -14.8 177,887 -2.2 351,934 430,367 -18.2 2,503,807 11 18.0 215,187
Exports 139,709 143,421 -2.6 151,913 -8.0 291,622 247,397 17.9 1,518,456 7.6 5.4 122,683

5 June 2017 13
 Tata Motors
CMP: INR479 TP: INR635 (+33%) Buy
Stock Info
Bloomberg TTMT IN Above est at 38.3k units (v/s est 34.4k), decline of 4% YoY
Equity Shares (m) 3395.9 PVs grew 24% YoY led by new launches; CVs decline by 12% YoY
M.Cap.(INR b)/ (USDb) 1525/22.8
52-Week Range (INR) 599 / 417
1, 6, 12 Rel. Per (%)
n Tata Motors May-17 sales volumes declined by 4% YoY (+24% MoM) to 38,361 units
1/-9/-11
(v/s est 34,406 units) led by lower than expected decline in CV volumes post pre
Financials Snapshot (INR b) buying.
Y/E MARCH 2017 2018E 2019E n While PV segment with 24% YoY growth in volumes restricted further decline in
Net Sales 2,697 3,009 3,722 overall sales. Cars volume grew 24% YoY led by continued strong demand of Tiago,
EBITDA 369.1 410.3 594.7 Tigor and Hexa.
NP 67.3 104.6 223.6
n The MHCV segment demand for Tata Motors was lower on the back of severe global
Adj. EPS (INR) 19.8 30.8 65.8
supply constraints of Fuel Injection Pumps for BS4 engines along with lackluster
EPS Gr. (%) -48.4 55.4 113.8
BV/Sh. (INR) 171.0 203.0 270.1 demand post pre-buying after ban on BS 3 vehicles during March 2017. Management
RoE (%) 9.8 16.5 27.8 said "The market continues to remain weak and the demand has still not picked up.
RoCE (%) 9.2 10.4 17.3 There are early signs of retails of BS4 vehicles but it has still been slow. The sale in
Payout (%) 0.0 1.1 0.5 M&HCV was affected primarily due to severe global supply constraints of Fuel
Valuations
Injection Pumps for BS4 engines. These issues are expected to be resolved on short
P/E (x) 24.2 15.5 7.3
P/BV (x) 2.8 2.4 1.8 notice with full capacity available as of July 2017. On the SCV and Pick-up segments,
EV/EBITDA (x) 5.8 4.2 2.4 there is a strong sales recovery with full availability of BS4 products and good market
Div. Yield (%) 0.0 0.1 0.1 response to new variants like Xenon Yodha and Ace Mega."
n Total CV volumes declined by ~12% YoY (+59% MoM). Overall M&HCV sales (incl
exports) declined by ~33% YoY to 10,286 units (v/s est 7,485 units)
n LCV sales (incl exports) increased by 7% YoY to 17,131 units (est 11,571 units).
n The stock trades at 15.5x/7.3x FY18E/19E consol. EPS respectively. Maintain Buy.

Snapshot of volumes for May-17

YoY MoM Residual
Residual
YoY (%) MoM (%) FY18 Monthly
Company Sales May-17 May-16 Apr-17 FY18YTD FY17YTD Gr. (%) Growth (%)
chg (%) chg chg estimate Run rate
Tata Motors 38,361 40,071 -4.3 30,973 23.9 69,334 79,453 -12.7 626,588 15.5 20.4 55,725
HCV's 10,286 15,276 -32.7 6,231 65.1 16,517 28,393 -41.8 184,978 5.2 14.2 16,846
LCV's 17,131 15,960 7.3 10,968 56.2 28,099 31,409 -10.5 233,196 11.6 15.5 20,510
CV's 27,417 31,236 -12.2 17,199 59.4 44,616 59,802 -25.4 418,174 8.7 14.9 37,356
Cars 9,840 7,925 24.2 12,048 -18.3 21,888 17,200 27.3 178,364 30.2 30.6 15,648
UV's 1,104 910 21.3 1,726 -36.0 2,830 2,451 15.5 30,050 47.0 51.3 2,722

5 June 2017 14
 2 June 2017
Results Update | Sector: Metals

SAIL
BSE SENSEX S&P CNX
31,273 9,654
CMP: INR57 TP: INR30(-47%) Sell
Bloomberg SAIL IN
Equity Shares (m) 4,130 Operating loss increases on RM cost
M.Cap.(INRb)/(USDb) 235.4 / 3.7 Net debt will continue to rise eroding equity value; Maintain Sell
52-Week Range (INR) 69 / 41 SAILs EBITDA loss increased from INR0.4b in 3QFY17 to INR2.6b in 4QFY17 (est.
1, 6, 12 Rel. Per (%) -8/-3/19
Avg Val, INRm 408
profit of INR0.3b) as higher raw material cost offset the benefit of higher
Free float (%) 25.0 realization and lower employee cost. Adj. loss after tax of INR7.7b (est. INR13b,
due to tax credits) was down from INR7.9b in 3Q on FX gains in other income.
Financials & Valuations (INR b) For FY17, EBITDA improved from a loss of INR33b in FY16 to just break-even of
Y/E March 2017 2018E 2019E INR0.4b. Adj. loss after tax reduced from INR38b in FY16 to INR27b in FY17.
Sales 448.8 542.4 652.2 n Steel sales declined 9% YoY to 3.4mt (est. of 3.5mt), on a strong base and
EBITDA 5.3 12.5 71.9
some impact of demonetization of currency notes. Crude steel production
NP -25.5 -51.9 1.5
Adj. EPS (INR) -6.2 -12.6 0.4
was marginally higher YoY to 3.8mt.
EPS Gr(%) -31.0 103.3 -102.9 n Pure steel sales realization increased ~3% QoQ to INR32,700/t, lower than
BV/Sh. (INR) 89.1 76.5 76.9 the peers on account of higher mix of long-products.
RoE (%) -6.7 -15.2 0.5 n EBITDA/t declined INR640 QoQ to negative INR767 on higher raw material
RoCE (%) -2.3 -2.7 4.3 cost.
P/E (x) -9.2 -4.5 155.2
n Borrowings increased by ~INR26b QoQ to ~INR414b. Number of employees
P/BV (x) 0.6 0.7 0.7
has reduced by 5.6k YoY to 82.9k002E
Net debt will continue to rise eroding equity value; Maintain Sell
Estimate change SAILs margins would remain under-pressure in the near term on elevated
TP change coking coal cost. Realizations are also weak on correction in global steel prices.
Rating change While operating leverage would drive gains over the medium-term, delivery on
volumes is key. SAIL has been facing issues in ramping-up capacity. While it is
guiding ~16mt sales in FY18, we estimate it would be lower at ~15mt. Margins
are expected to improve but not enough to absorb the cash drag. We estimate
net debt would continue to increase and erode equity value. TP is INR30/sh,
based on 0.4x FY18E P/BV. Maintain Sell.

Quarterly Performance (Standalone) INR m

5 June 2017 15
 In conversation

1. GMR Infra soars 14% after FY17 debt drops 47%, operational
performance strong, Madhu Terdal, Group CFO
n Gross debt down to Rs 19,856 crore in FY17 from Rs 37,480 crore in FY16 & Net
debt / EBITDA at 4.3 from 10.2 in FY16
n EBITDA grew 12% to Rs 3,497 crore and margin expanded 400 basis points to 42
percent
n Delhi and Hyderabad Airport declared dividends for the first time.
n Won arbitration award for Maldives Airport and received compensation of Rs
1,800 crore during the year.
n Company can get Rs 800-1,000 crore from Kakinada land and Rs 300-400 crore
from sale of another land parcel
n Chhattisgarh power project is now under SDR & the loan of Rs 2,992 crore was
converted into equity, by which consortium lenders own 52 percent of equity of
the project
n EPC order book jumped to around Rs 7,100 crore after adding Eastern Dedicated
Freight Corridor railway project of Rs 2,281 crore.

2. Expect to hit 70% business in B2C space, says kwality, Nawal

Sharma, President & Head-Business Transformation
n Consumer business which is area of strategic focus has grown by 31% percent.
n FY17 at 60:40 in favor of B2B / B2C but over the next three-four years time we
want to hit 70% B2C space", said Sharma.

3. Wellness segment contributes majority of growth: Thyrocare's

Velumani, A Velumani, Chairman, CEO & MD
n Don't see any challenges for FY18, faster growth of competition puts more
pressure on unorganised players than on organised players.
n Preventive care segment is doing exceedingly good,
n Wellness segment contributes majority of the growth
n To remain focused on core competence i.e.diagnosis and would continue to
remain focused because of higher EBITDA and better multiples

4. Expect 15% growth in June; GST will not lead to price hike:
Blue Star, B Thiagarajan, Joint MD & Nilesh Gupta, Managing
Partner at Vijay Sales
n Slowdown in demand is more than anticipated.
n On GST front, real calculations reveal that prices will not be going up due to GST
n Prices may go up due to commodity prices or something like that.
n Expects 15 percent growth in June.

5 June 2017 16
 From the think tank

Resolve bad loans for quick growth

n Indias GDP growth slumped to a two-year low of 6.1% in the January-to-March
quarter from 7% in the third quarter of 2016-17. This shows a noticeable impact
of demonetisation that kicked off a month into the third quarter. This is not
unexpected. The Central Statistics Office (CSO) has maintained its earlier full-
year growth estimate at 7.1% in its provisional estimates of national income for
2016-17. This is in line with the Economic Surveys projection that
demonetisation would impact economic growth, up to 0.5% in real terms. Real
gross value added (GVA), by excluding indirect taxes from GDP, slowed down to
5.6% in the March quarter, factoring in a higher adjustment for inflation. Part of
the reason is also statistical.

Pharma sector needs a RERA-type law

n In a widely publicised speech given at the opening of a hospital in Surat on April
17, Prime Minister Narendra Modi indicated that his government may bring in a
legal framework under which doctors will have to prescribe generic medicines.
During the same occasion he said, It is the Governments responsibility that
everyone should get health services at minimal price. It is a noble intention and
indeed the responsibility of the government to make healthcare accessible and
affordable to all. However, I might add, without compromising on the quality
and choice of care. A landmark act introduced in the US in 1984, the Drug Price
Competition and Patent Term Restoration Act transformed the drug market in
that country by allowing a generic medicine, that has demonstrated mere
bioequivalence with the branded drug, to be dispensed as a substitute for a
prescription of the branded drug.

How centres new procurement policy to boost make in India

could make India run afoul of multilateral trade framework
n The ever-larger presence of the State in the Indian economy is driven home
again by the recently approved public procurement policy for local goods for
boosting Make in India. The Indian state and its arms, namely government
ministries, departments, public sector bodies and organisations, will now be a
major market for home-made goods. This is expected to provide a major boost
to domestic manufacturing under Make in India. Using public procurement for
driving industrial production is not a new strategy. Countries with large state
sectors have often tried to do so. One of the major examples is China. China has
used procurement by its state-owned enterprises (SOEs) as an effective tool for
benefitting local enterprises. Given that SOEs are major players in the Chinese
economy both from production and consumption perspectives, many producer
SOEs have benefitted from procurement policies favouring local enterprises.

5 June 2017 17
 International
Trade realities expose the absurdity of a brexit no deal
n No deal is better than a bad deal. That, as almost everybody must now know, is
the position of the woman who is and would be UK prime minister. But this
proposition is either empty or nonsensical. Why empty? The deal the UK will
have with the EU has to be worse than the one it has now: that is what Brexit
means. Why, after all, would the EU offer better terms to a non-member? So, it
will be bad. Theresa Mays proposition only has meaning if she indicates what
sort of bad deal, in the range of bad deals, would be worse than no deal at all.
But this the prime minister has not deigned to indicate. Why nonsensical? For
trade to continue after Brexit, there must be deals. Brexiters find it difficult to
understand that the UK must co-operate with the EU, even after Brexit. Co-
operation means deals. The question is not whether the UK needs deals, but
rather which deals it must have.

5 June 2017 18
 Click excel icon
for detailed Valuation snapshot
valuation guide

CMP TP % Upside EPS (INR) P/E (x) P/B (x) ROE (%)
Company Reco (INR) (INR) Downside FY17E FY18E FY19E FY17E FY18E FY17E FY18E FY17E FY18E FY19E
Automobiles
Amara Raja Buy 871 1,044 20 28.0 34.5 41.8 31.1 25.3 5.7 4.8 20.3 20.8 21.2
Ashok Ley. Buy 93 117 26 4.6 5.5 7.1 20.2 16.9 4.4 3.9 23.3 24.4 26.9
Bajaj Auto Buy 2,846 3,422 20 132.3 150.4 178.2 21.5 18.9 4.8 4.3 25.3 24.1 25.6
Bharat Forge Buy 1,194 1,242 4 26.2 37.7 49.7 45.6 31.7 6.8 5.9 16.2 19.9 22.5
Bosch Neutral 23,832 23,287 -2 473.1 650.7 776.2 50.4 36.6 8.3 7.3 15.8 21.2 22.2
CEAT Buy 1,848 1,741 -6 93.3 104.9 133.9 19.8 17.6 3.1 2.7 16.9 16.3 17.9
Eicher Mot. Buy 29,180 30,402 4 613.8 892.0 1,135.1 47.5 32.7 16.5 11.7 40.3 41.9 38.5
Endurance Tech. Buy 867 948 9 23.5 30.8 37.9 36.9 28.2 7.1 5.8 20.8 22.6 23.1
Escorts Neutral 716 711 -1 23.2 35.9 44.4 30.9 19.9 3.6 3.1 12.3 16.8 17.9
Exide Ind Buy 227 274 21 8.2 9.5 11.8 27.9 24.0 3.9 3.5 14.0 14.5 15.8
Hero Moto Neutral 3,842 3,622 -6 169.1 198.1 201.2 22.7 19.4 7.6 6.4 35.7 35.9 31.3
M&M Buy 1,418 1,603 13 54.3 69.6 81.7 26.1 20.4 3.3 3.0 14.2 14.2 14.4
Mahindra CIE Not Rated 247 - 5.4 9.9 11.8 46.1 25.0 2.9 2.6 6.4 10.8 11.5
Maruti Suzuki Buy 7,114 8,060 13 248.6 300.0 370.9 28.6 23.7 5.9 5.1 20.3 21.2 22.3
Tata Motors Buy 479 635 33 19.8 30.8 65.8 24.2 15.5 2.8 2.4 9.8 16.5 27.8
TVS Motor Buy 542 581 7 11.7 16.7 26.7 46.1 32.4 10.7 8.5 25.6 29.2 35.9
Aggregate 28.5 21.8 4.9 4.2 17.1 19.3 22.8
Banks - Private
Axis Bank Neutral 508 525 3 15.4 23.4 41.2 33.1 21.7 2.2 2.1 6.9 9.9 15.7
DCB Bank Neutral 202 170 -16 7.0 8.8 11.2 28.9 23.0 3.0 2.7 10.9 12.4 14.0
Equitas Hold. Buy 160 210 31 4.7 4.8 7.5 34.0 33.1 2.4 2.3 8.9 7.1 10.1
Federal Bank Buy 114 125 9 4.8 5.8 7.3 23.7 19.8 2.3 2.1 9.9 10.9 12.5
HDFC Bank Buy 1,636 1,790 9 56.8 67.1 79.4 28.8 24.4 4.9 4.2 17.9 18.2 19.0
ICICI Bank Buy 318 365 15 16.8 16.8 19.2 18.9 18.9 2.1 2.0 10.1 9.1 9.8
IDFC Bank Neutral 59 62 6 3.0 3.3 4.3 19.6 17.8 1.4 1.3 7.2 7.4 9.0
IndusInd Buy 1,517 1,700 12 50.1 59.4 72.0 30.3 25.5 4.5 3.9 16.0 16.5 17.3
J&K Bank Neutral 84 89 6 -31.3 4.4 8.0 NM 19.1 0.8 0.7 -27.0 4.0 7.0
Kotak Mah. Bk Buy 963 1,050 9 26.8 32.3 40.5 35.9 29.8 4.6 4.0 13.8 14.5 15.7
RBL Bank Under Review 551 - 11.9 17.6 23.8 46.3 31.2 4.9 4.3 12.3 14.6 17.3
South Indian Buy 29 31 7 2.2 2.9 3.6 13.3 10.1 1.1 1.0 9.4 10.6 12.2
Yes Bank Buy 1,482 2,110 42 73.0 90.5 114.0 20.3 16.4 3.8 3.2 18.9 17.9 19.4
Aggregate 28.0 22.6 3.2 2.9 11.4 12.9 14.5
Banks - PSU
BOB Buy 179 217 21 6.0 19.0 24.9 29.9 9.4 1.2 1.1 4.1 12.3 14.5
BOI Neutral 146 147 1 -14.8 13.7 22.0 NM 10.6 0.7 0.6 -6.7 6.1 9.0
Canara Neutral 360 380 6 18.8 33.0 48.9 19.2 10.9 0.8 0.7 4.2 6.8 9.4
IDBI Bk Neutral 61 49 -19 1.5 6.4 8.6 39.7 9.4 0.6 0.5 1.4 5.8 7.3
Indian Bk Buy 319 360 13 29.3 33.3 38.1 10.9 9.6 1.1 1.0 10.1 10.6 11.1
OBC Neutral 155 150 -3 -31.6 17.1 21.4 NM 9.1 0.4 0.4 -8.4 4.6 5.4
PNB Buy 153 184 20 6.2 10.3 14.5 24.6 14.9 0.9 0.8 3.6 5.6 7.5
SBI Buy 287 375 30 0.3 19.7 25.9 950.0 14.6 1.3 1.2 -0.2 8.9 10.7
Union Bk Neutral 160 174 9 7.6 24.6 34.5 21.0 6.5 0.5 0.5 2.7 8.1 10.5
Aggregate 102.4 12.2 1.0 0.9 0.9 7.4 9.3
NBFCs
Bajaj Fin. Buy 1,360 1,550 14 33.6 47.0 63.6 40.5 28.9 7.7 6.3 21.7 24.0 26.2
Bharat Fin. Neutral 744 769 3 21.0 32.4 45.3 35.4 23.0 4.2 3.5 15.1 16.7 19.5
Dewan Hsg. Buy 414 559 35 29.6 38.6 45.5 14.0 10.7 1.6 1.5 14.4 14.5 15.2
GRUH Fin. Neutral 404 421 4 8.1 10.3 12.5 49.6 39.3 13.2 11.0 30.4 30.6 30.9
HDFC Buy 1,610 1,797 12 46.8 50.7 55.9 34.4 31.8 6.4 5.8 19.3 18.3 17.4
Indiabulls Hsg Buy 1,131 1,227 8 69.0 82.2 101.6 16.4 13.8 3.9 3.5 25.5 27.0 29.6
LIC Hsg Fin Neutral 733 723 -1 38.2 44.6 51.2 19.2 16.4 3.4 2.9 19.4 19.3 19.0
Manappuram Not Rated 89 - 8.2 11.1 14.0 10.9 8.0 2.5 2.2 23.9 29.0 32.2
M&M Fin. Buy 389 400 3 7.1 12.9 16.4 54.9 30.1 3.4 3.2 6.4 10.9 12.9
Muthoot Fin Buy 428 465 9 29.7 34.5 40.0 14.4 12.4 2.7 2.4 19.7 20.2 20.6

5 June 2017 19
 Click excel icon
for detailed Valuation snapshot
valuation guide

CMP TP % Upside EPS (INR) P/E (x) P/B (x) ROE (%)
Company Reco (INR) (INR) Downside FY17E FY18E FY19E FY17E FY18E FY17E FY18E FY17E FY18E FY19E
PFC Neutral 128 117 -8 25.7 27.2 30.2 5.0 4.7 0.9 0.8 17.9 17.0 16.8
Repco Home Buy 789 900 14 29.1 36.0 43.3 27.1 21.9 4.3 3.7 17.4 18.2 18.5
REC Neutral 190 134 -29 31.4 35.0 40.4 6.1 5.4 1.1 1.0 19.9 19.1 19.1
Shriram City Union Buy 2,308 2,689 17 84.3 130.4 164.7 27.4 17.7 3.1 2.7 11.8 16.2 17.8
STF Buy 1,028 1,269 23 55.6 77.4 98.6 18.5 13.3 2.1 1.8 11.7 14.5 16.3
Aggregate 18.4 15.8 3.2 2.8 17.2 17.7 17.9
Capital Goods
ABB Sell 1,449 1,200 -17 19.7 25.1 32.2 73.5 57.8 9.4 8.1 12.7 13.9 15.8
Bharat Elec. Buy 172 200 16 6.9 7.2 8.1 24.8 24.0 5.1 4.0 20.6 16.5 16.8
BHEL Sell 140 100 -29 2.0 4.4 5.0 69.3 32.2 1.1 1.0 1.5 3.3 3.6
Blue Star Neutral 639 650 2 12.9 19.0 28.0 49.6 33.6 8.1 7.5 18.0 23.2 31.6
CG Cons. Elec. Buy 242 240 -1 4.7 5.6 6.7 51.7 43.4 28.1 20.2 76.4 54.2 50.3
CG Power & Indu. Sell 84 65 -22 4.1 2.3 4.5 20.4 36.6 1.3 1.2 6.2 3.4 4.2
Cummins Neutral 940 950 1 26.5 29.3 35.2 35.5 32.1 7.0 6.4 21.2 20.8 23.0
GE T&D Neutral 349 320 -8 5.7 8.9 10.6 61.0 39.1 8.7 7.6 12.4 20.7 21.5
Havells Neutral 484 480 -1 9.6 12.1 14.5 50.6 40.0 9.2 8.2 18.2 20.4 21.4
Inox Wind Under Review 144 - 12.8 -3.2 15.5 11.2 NM 1.5 1.5 14.9 -3.3 15.1
K E C Intl Neutral 267 250 -7 11.9 13.6 16.8 22.6 19.7 4.3 3.7 21.2 20.3 21.2
L&T Buy 1,784 2,000 12 63.3 68.0 78.3 28.2 26.3 3.3 3.2 12.6 12.5 13.6
Pennar Eng. Not Rated 131 - 5.8 7.5 10.0 22.5 17.5 1.9 1.7 8.6 10.0 11.8
Siemens Neutral 1,369 1,355 -1 17.8 24.3 33.3 76.8 56.4 7.1 6.2 9.3 11.0 13.7
Solar Ind Neutral 825 825 0 20.6 22.0 27.5 40.0 37.6 7.3 6.4 19.8 18.1 19.5
Suzlon Energy Not Rated 20 - 0.6 0.9 1.0 31.1 22.4 -1.8 -2.0 NM -8.8 -11.0
Thermax Sell 982 850 -13 30.8 32.3 34.0 31.8 30.4 4.4 3.9 14.3 13.6 12.9
Va Tech Wab. Buy 671 800 19 28.9 34.9 39.8 23.2 19.2 3.7 3.2 16.3 17.7 17.5
Voltas Sell 501 400 -20 15.5 16.0 18.1 32.4 31.3 5.0 4.5 18.0 15.1 15.3
Aggregate 35.2 31.3 3.9 3.7 11.2 11.7 12.9
Cement
Ambuja Cem. Buy 240 283 18 4.9 6.6 7.2 49.2 36.3 2.5 2.4 5.0 6.7 7.1
ACC Neutral 1,644 1,521 -8 33.7 49.2 63.6 48.7 33.4 3.6 3.7 7.5 11.0 14.2
Birla Corp. Buy 891 998 12 29.4 40.9 58.9 30.3 21.8 2.1 1.9 7.5 9.2 12.2
Dalmia Bharat Buy 2,426 3,162 30 38.8 66.7 87.1 62.6 36.4 4.3 3.9 7.2 11.3 13.1
Grasim Inds. Neutral 1,162 1,234 6 67.9 86.9 114.5 17.1 13.4 1.9 1.7 11.5 13.1 15.1
India Cem Neutral 213 210 -1 5.6 9.3 12.9 37.8 22.8 1.3 1.2 3.4 5.5 7.2
J K Cements Buy 1,104 1,322 20 33.7 46.4 59.5 32.8 23.8 4.4 3.8 14.4 17.0 18.6
JK Lakshmi Ce Buy 487 550 13 7.0 11.4 20.5 70.0 42.7 4.1 3.8 6.0 9.2 14.7
Ramco Cem Buy 719 823 14 27.3 31.1 37.5 26.4 23.2 4.7 4.0 19.2 18.6 19.1
Orient Cem Buy 156 185 19 -1.6 4.5 6.8 NM 34.6 3.2 3.0 -3.2 9.0 12.3
Prism Cem Buy 117 138 18 0.3 3.7 5.8 335.6 31.5 5.8 5.1 1.8 17.2 22.6
Shree Cem Buy 17,982 23,316 30 384.4 480.7 621.0 46.8 37.4 8.9 7.3 20.2 21.5 22.6
Ultratech Buy 4,230 4,928 16 96.1 121.4 159.1 44.0 34.9 5.0 4.5 12.0 13.6 15.7
Aggregate 36.7 27.5 3.6 3.3 9.7 11.8 13.7
Consumer
Asian Paints Neutral 1,163 1,210 4 21.0 23.1 27.4 55.3 50.3 14.7 14.1 28.5 28.6 30.6
Britannia Buy 3,575 4,050 13 73.7 82.1 101.3 48.5 43.6 15.9 14.8 36.9 35.2 37.2
Colgate Buy 1,026 1,180 15 21.2 25.7 31.1 48.3 40.0 21.9 20.7 50.4 53.2 60.3
Dabur Neutral 284 295 4 7.2 7.7 9.1 39.2 36.7 10.3 8.9 28.4 26.0 26.3
Emami Buy 1,137 1,250 10 26.5 29.2 34.7 42.9 38.9 14.7 11.8 35.8 33.8 32.2
Godrej Cons. Neutral 1,819 1,950 7 37.8 43.6 50.0 48.1 41.7 11.7 9.1 24.6 24.5 23.0
GSK Cons. Sell 5,421 4,380 -19 156.1 169.7 185.5 34.7 31.9 7.3 7.2 22.2 22.6 23.0
HUL Buy 1,087 1,165 7 19.6 22.4 25.9 55.4 48.4 35.3 34.6 65.6 72.1 81.4
ITC Buy 319 355 11 8.4 9.6 11.5 38.0 33.3 8.6 8.5 23.5 25.6 28.9
Jyothy Lab Neutral 366 390 7 11.2 8.9 11.0 32.6 40.9 6.1 6.2 21.1 15.1 18.4
Marico Neutral 322 335 4 6.3 6.9 8.4 51.2 46.3 17.9 15.2 36.7 35.5 38.1
Nestle Sell 6,645 5,715 -14 118.0 118.6 139.5 56.3 56.0 21.3 19.6 39.0 36.4 39.0

5 June 2017 20
 Click excel icon
for detailed Valuation snapshot
valuation guide

CMP TP % Upside EPS (INR) P/E (x) P/B (x) ROE (%)
Company Reco (INR) (INR) Downside FY17E FY18E FY19E FY17E FY18E FY17E FY18E FY17E FY18E FY19E
Page Inds Buy 14,276 18,000 26 238.7 313.9 400.0 59.8 45.5 23.9 18.9 40.0 41.6 42.8
Parag Milk Neutral 235 245 4 3.6 7.4 12.3 65.2 31.6 3.0 2.7 5.9 9.1 13.4
Pidilite Ind. Neutral 793 762 -4 16.7 18.4 21.2 47.4 43.0 12.3 10.0 28.2 25.6 24.0
P&G Hygiene Buy 7,698 8,760 14 144.9 155.8 181.6 53.1 49.4 43.9 35.0 45.3 78.9 74.0
United Brew Neutral 809 830 3 8.7 9.7 14.7 93.0 83.4 9.3 8.5 10.4 10.7 14.6
United Spirits Neutral 2,343 2,150 -8 26.7 37.4 51.8 87.7 62.7 17.6 12.1 21.3 19.3 19.7
Aggregate 46.2 41.0 12.8 11.9 27.7 29.1 30.6
Healthcare
Alembic Phar Neutral 537 640 19 21.6 26.0 32.1 24.9 20.6 5.4 4.5 23.1 23.6 24.1
Alkem Lab Neutral 1,977 1,900 -4 75.7 80.0 94.9 26.1 24.7 5.6 4.8 23.4 20.8 21.0
Ajanta Pharma Buy 1,606 2,028 26 58.4 66.4 79.9 27.5 24.2 9.1 6.9 37.7 32.3 30.0
Aurobindo Buy 593 750 26 39.3 44.1 50.2 15.1 13.4 3.8 3.0 28.3 24.8 22.5
Biocon Sell 972 900 -7 30.6 33.1 44.9 31.8 29.4 4.3 3.9 13.6 13.3 16.1
Cadila Buy 495 510 3 14.2 18.1 23.2 34.8 27.3 7.9 6.5 24.8 26.1 27.1
Cipla Neutral 529 500 -5 15.9 20.0 25.0 33.3 26.5 3.4 3.1 10.2 11.5 12.8
Divis Lab Neutral 618 600 -3 39.7 35.8 39.8 15.6 17.3 3.5 3.2 23.5 19.2 19.2
Dr Reddys Neutral 2,553 2,625 3 72.6 107.1 144.5 35.2 23.8 3.5 2.8 9.6 13.3 15.1
Fortis Health Buy 193 240 24 10.3 2.1 6.1 18.7 91.4 2.0 1.7 11.3 2.0 5.3
Glenmark Neutral 650 800 23 39.3 45.0 53.5 16.6 14.4 4.1 3.2 24.7 22.4 21.3
Granules Buy 141 200 42 7.3 8.1 11.4 19.4 17.3 3.2 2.3 20.0 16.4 17.6
GSK Pharma Neutral 2,460 2,700 10 34.4 51.9 60.1 71.6 47.3 15.4 18.8 21.5 39.7 54.4
IPCA Labs Neutral 503 480 -5 16.1 22.4 29.9 31.3 22.5 2.6 2.4 8.6 11.0 13.2
Lupin Buy 1,165 1,475 27 59.2 60.2 73.7 19.7 19.4 4.0 3.4 22.0 18.9 19.7
Sanofi India Buy 4,078 4,850 19 129.1 131.0 173.4 31.6 31.1 5.4 5.1 17.1 16.3 19.3
Sun Pharma Buy 515 650 26 26.1 25.4 30.8 19.7 20.3 3.6 3.2 19.2 16.8 17.9
Syngene Intl Not Rated 482 - 13.0 16.1 18.0 37.1 29.9 7.5 6.1 22.2 22.5 20.7
Torrent Pharma Buy 1,213 1,450 20 55.2 59.8 73.2 22.0 20.3 5.1 4.4 25.3 23.5 24.6
Aggregate 23.2 21.5 4.2 3.6 17.9 16.6 17.6
Logistics
Allcargo Logistics Buy 174 228 31 9.8 12.2 14.3 17.7 14.3 2.6 2.3 12.6 17.2 17.8
Blue Dart Not Rated 4,438 - 102.5 129.9 163.2 43.3 34.2 19.2 14.6 50.5 48.6 46.8
Concor Neutral 1,162 1,162 0 38.0 41.2 45.8 30.6 28.2 3.2 3.1 10.8 11.1 11.7
Gateway
Buy 245 310 27 6.8 11.6 14.3 36.0 21.1 2.1 2.0 5.9 9.9 11.7
Distriparks
Gati Not Rated 126 - 8.4 15.9 23.9 15.0 7.9 2.1 1.8 12.4 19.4 25.4
Transport Corp. Not Rated 324 - 16.9 21.0 25.9 19.1 15.4 3.0 2.5 16.7 17.8 18.6
Aggregate 29.0 24.0 3.6 3.3 12.2 13.7 15.0
Media
Dish TV Buy 84 106 26 1.0 2.1 3.8 84.9 40.8 18.2 12.6 24.1 36.5 44.1
D B Corp Buy 377 460 22 20.4 24.1 28.7 18.5 15.6 4.3 3.9 25.5 26.2 27.6
Den Net. Neutral 86 90 5 -8.6 -2.7 0.3 NM NM 1.6 1.7 -12.0 -5.3 0.7
Hind. Media Buy 274 360 31 26.4 27.1 29.9 10.4 10.1 1.8 1.6 19.3 16.6 15.6
HT Media Neutral 82 85 4 7.4 7.9 8.3 11.1 10.4 0.7 0.7 7.1 6.9 6.6
Jagran Prak. Buy 179 225 26 10.8 12.2 14.0 16.6 14.7 2.4 2.4 17.6 16.3 17.3
PVR Buy 1,458 1,666 14 20.5 36.1 54.7 71.0 40.4 7.1 6.1 10.4 16.1 20.5
Siti Net. Neutral 28 36 30 -1.8 -0.5 0.1 NM NM 3.8 4.2 -23.5 -7.8 1.5
Sun TV Neutral 835 860 3 24.9 29.5 38.4 33.6 28.3 8.4 7.7 25.0 27.3 31.9
Zee Ent. Buy 523 600 15 23.1 16.4 19.5 22.6 31.9 8.3 7.0 23.7 23.8 23.8
Aggregate 40.9 29.1 5.8 5.3 14.3 18.1 20.6
Metals
Hindalco Buy 197 250 27 16.2 22.6 25.9 12.2 8.7 1.5 1.2 14.0 15.6 15.1
Hind. Zinc Sell 238 235 -1 19.7 21.5 23.7 12.1 11.0 3.3 2.8 24.4 27.2 25.4
JSPL Buy 122 184 51 -20.9 -16.0 -2.5 NM NM 0.4 0.4 -7.9 -5.0 -0.8
JSW Steel Buy 195 241 24 14.8 20.1 22.6 13.2 9.7 2.1 1.8 17.3 19.7 18.8
Nalco Neutral 66 65 -1 3.7 3.6 4.0 17.8 18.3 1.2 1.2 7.2 6.7 7.3

5 June 2017 21
 Click excel icon
for detailed Valuation snapshot
valuation guide

CMP TP % Upside EPS (INR) P/E (x) P/B (x) ROE (%)
Company Reco (INR) (INR) Downside FY17E FY18E FY19E FY17E FY18E FY17E FY18E FY17E FY18E FY19E
NMDC Under Review 113 - 10.0 12.0 12.7 11.4 9.4 1.6 1.5 12.4 14.9 15.7
SAIL Sell 57 30 -48 -6.2 -12.6 0.4 NM NM 0.6 0.7 -6.7 -15.2 0.5
Vedanta Neutral 229 225 -2 15.1 24.5 27.4 15.1 9.3 1.4 1.3 9.7 14.8 15.3
Tata Steel Sell 492 451 -8 37.0 39.5 45.7 13.3 12.5 1.5 1.4 15.4 11.4 12.1
Aggregate 16.8 13.6 1.4 1.3 8.0 9.4 11.8
Oil & Gas
BPCL Neutral 725 779 7 72.5 64.5 70.3 10.0 11.2 3.1 2.6 32.4 25.1 23.3
GAIL Neutral 402 358 -11 22.6 28.7 32.7 17.8 14.0 1.8 1.7 10.2 12.2 12.9
Gujarat Gas Sell 751 699 -7 20.4 38.5 46.6 36.7 19.5 6.3 5.0 17.8 28.5 27.5
Gujarat St. Pet. Neutral 179 171 -4 8.8 11.2 13.4 20.3 16.0 2.3 2.1 11.9 13.7 14.6
HPCL Buy 537 632 18 61.0 45.6 45.8 8.8 11.8 2.7 2.3 32.4 21.2 18.7
IOC Neutral 415 457 10 41.0 41.9 43.3 10.1 9.9 2.0 2.0 22.3 20.2 19.9
IGL Neutral 1,088 1,067 -2 43.1 46.7 51.8 25.2 23.3 5.2 4.4 21.0 20.6 19.5
MRPL Neutral 133 124 -7 11.7 12.8 13.3 11.4 10.4 2.3 2.0 24.8 20.5 18.4
Oil India Buy 301 363 21 19.3 34.7 37.4 15.6 8.7 0.8 0.8 5.7 9.3 9.6
ONGC Buy 174 229 32 16.4 20.6 23.9 10.6 8.4 1.0 1.0 10.4 11.7 13.0
PLNG Buy 446 547 23 22.7 25.9 35.1 19.6 17.2 4.1 3.5 23.6 22.1 25.2
Reliance Ind. Neutral 1,325 1,264 -5 106.6 121.7 127.8 12.4 10.9 1.4 1.2 11.9 11.8 11.2
Aggregate 11.9 10.9 1.6 1.5 13.2 13.4 13.4
Retail
Jubilant Food Sell 928 680 -27 10.0 12.2 17.9 92.7 76.3 7.6 7.1 8.2 9.3 12.6
Titan Co. Neutral 472 505 7 9.0 10.3 12.1 52.3 46.0 9.9 8.8 20.6 20.2 20.9
Aggregate 55.1 48.2 9.5 8.5 17.2 17.6 18.5
Technology
Cyient Buy 504 620 23 30.6 38.3 44.2 16.5 13.2 2.7 2.3 16.2 17.8 17.9
HCL Tech. Buy 857 960 12 59.8 61.9 67.6 14.3 13.9 3.6 3.5 27.5 25.4 26.0
Hexaware Neutral 242 235 -3 13.7 15.4 16.7 17.7 15.8 4.3 3.8 26.5 25.3 23.5
Infosys Buy 969 1,200 24 62.9 64.7 71.1 15.4 15.0 3.2 2.9 23.3 21.4 21.2
KPIT Tech Neutral 117 150 29 11.9 13.4 15.2 9.8 8.7 1.5 1.3 14.3 15.6 15.2
L&T Infotech Buy 782 850 9 55.5 59.7 65.0 14.1 13.1 4.9 3.8 40.4 32.8 28.3
Mindtree Neutral 541 475 -12 24.9 30.5 36.5 21.7 17.8 3.5 3.2 16.8 18.9 20.5
Mphasis Neutral 619 600 -3 38.9 41.7 45.0 15.9 14.8 2.1 2.4 13.2 14.0 15.7
NIIT Tech Neutral 539 470 -13 42.8 42.5 46.1 12.6 12.7 2.0 1.8 16.1 14.8 14.7
Persistent Sys Buy 607 700 15 37.7 43.9 51.4 16.1 13.8 2.5 2.4 17.0 18.1 20.3
Tata Elxsi Buy 1,358 1,607 18 56.3 68.0 80.4 24.1 20.0 7.6 6.1 37.1 33.7 32.3
TCS Neutral 2,562 2,400 -6 133.4 139.7 149.6 19.2 18.3 6.0 6.2 33.5 32.4 32.3
Tech Mah Buy 400 500 25 30.9 32.3 36.9 12.9 12.4 2.1 1.9 18.4 16.7 17.0
Wipro Neutral 552 500 -9 33.8 34.6 38.2 16.3 15.9 2.6 2.4 16.9 15.5 15.7
Zensar Tech Buy 873 1,020 17 54.9 67.6 78.4 15.9 12.9 2.4 2.1 16.3 17.7 17.8
Aggregate 16.9 16.5 3.9 3.7 23.2 22.7 22.0
Telecom
Bharti Airtel Buy 373 430 15 11.1 6.3 11.5 33.6 59.4 2.2 2.1 6.7 3.7 6.4
Bharti Infratel Buy 374 435 16 14.9 17.5 19.9 25.2 21.4 4.6 4.0 16.2 19.4 19.1
Idea Cellular Buy 80 110 38 -1.1 -12.9 -13.6 NM NM 1.2 1.4 -1.6 -20.8 -27.4
Tata Comm Buy 735 811 10 26.0 18.1 36.0 28.3 40.6 13.2 9.9 126.2 27.9 39.1
Aggregate 35.5 165.9 2.4 2.4 6.9 1.5 3.9
Utiltites
Coal India Buy 269 316 18 14.9 18.3 20.7 18.0 14.7 6.8 6.8 37.8 46.2 52.1
CESC Buy 917 1,040 13 51.9 73.4 80.6 17.7 12.5 2.1 1.8 11.4 15.5 15.0
JSW Energy Buy 64 88 38 3.9 2.1 1.8 16.5 30.1 1.0 1.0 6.7 3.3 2.8
NTPC Buy 162 198 22 13.0 13.4 16.2 12.5 12.1 1.4 1.3 11.5 10.9 12.3
Power Grid Buy 206 242 17 14.2 17.6 20.5 14.5 11.7 2.2 1.9 16.2 17.5 17.8
Tata Power Sell 81 67 -17 5.2 6.7 7.0 15.7 12.0 1.9 1.7 11.2 14.6 13.6
Aggregate 14.9 13.0 2.3 2.1 15.3 16.3 17.4
Others

5 June 2017 22
 Click excel icon
for detailed Valuation snapshot
valuation guide

CMP TP % Upside EPS (INR) P/E (x) P/B (x) ROE (%)
Company Reco (INR) (INR) Downside FY17E FY18E FY19E FY17E FY18E FY17E FY18E FY17E FY18E FY19E
Arvind Neutral 379 382 1 12.4 16.6 23.6 30.6 22.8 2.7 2.5 10.3 11.5 14.7
Bata India Under Review 550 - 13.5 15.6 19.3 40.9 35.3 5.4 4.8 13.9 14.5 15.9
Castrol India Buy 418 531 27 13.6 14.6 15.2 30.6 28.7 34.7 31.0 115.2 114.1 106.8
Century Ply. Buy 274 274 0 7.7 8.6 11.4 35.4 31.7 9.3 7.7 28.9 26.5 28.6
Coromandel Intl Under Review 419 - 16.0 18.3 23.6 26.2 22.8 4.5 4.1 18.2 18.9 21.7
Delta Corp Buy 156 229 47 4.2 5.3 7.1 37.1 29.6 3.9 2.7 11.1 11.3 11.5
Dynamatic Tech Buy 2,502 3,334 33 67.6 112.9 166.7 37.0 22.2 5.1 4.2 15.1 20.7 24.3
Eveready Inds. Buy 316 368 17 12.9 14.4 17.5 24.5 21.9 7.9 6.4 37.7 32.3 31.6
Interglobe Neutral 1,115 1,234 11 46.0 65.6 88.2 24.2 17.0 19.9 17.7 86.2 110.2 129.8
Indo Count Buy 180 229 27 13.0 14.6 17.6 13.9 12.4 4.2 3.1 34.8 28.8 25.9
Info Edge Buy 906 1,050 16 15.7 20.3 22.9 57.8 44.8 5.6 5.1 10.2 11.9 12.3
Inox Leisure Sell 287 240 -16 3.3 8.0 12.0 85.9 35.7 5.0 4.4 5.9 12.5 16.2
Jain Irrigation Under Review 103 - 5.5 7.6 10.0 18.6 13.5 1.6 1.5 8.6 11.7 14.8
Just Dial Neutral 445 465 4 17.5 18.5 21.1 25.5 24.1 3.4 3.1 14.8 13.4 13.7
Kaveri Seed Buy 633 653 3 19.1 29.5 36.3 33.2 21.5 4.3 4.7 13.6 20.5 25.4
Kitex Garm. Buy 381 551 45 26.0 31.0 36.7 14.7 12.3 4.0 3.2 29.9 28.7 27.7
Manpasand Buy 780 841 8 13.3 22.0 31.1 58.6 35.5 3.8 3.5 7.7 9.3 13.5
MCX Buy 1,006 1,325 32 24.8 30.5 42.9 40.5 32.9 3.8 3.6 9.9 11.1 14.6
Monsanto Buy 2,852 2,841 0 72.9 89.3 109.3 39.1 32.0 11.9 11.1 30.4 35.9 39.6
Navneet Education Buy 180 226 25 7.8 9.4 11.3 23.2 19.1 5.8 4.9 26.8 27.8 28.2
PI Inds. Buy 809 952 18 33.4 33.4 38.1 24.2 24.2 6.8 5.6 32.8 25.4 23.8
Piramal Enterp. Buy 2,816 3,044 8 72.6 104.1 144.6 38.8 27.0 3.7 3.4 9.8 13.0 16.4
SRF Buy 1,647 1,816 10 85.9 89.0 111.5 19.2 18.5 3.0 2.7 16.6 15.1 17.0
S H Kelkar Buy 281 367 30 7.2 9.6 12.2 38.8 29.3 5.0 4.5 13.7 16.1 18.2
Symphony Sell 1,335 1,288 -4 27.0 35.1 42.9 49.4 38.0 26.9 22.9 56.8 65.0 66.3
TTK Prestige Neutral 6,702 5,281 -21 106.9 137.7 176.0 62.7 48.7 9.9 9.0 16.5 19.4 22.2
V-Guard Neutral 181 167 -8 3.6 4.5 6.0 50.7 40.5 12.1 9.9 27.4 26.9 28.8
Wonderla Buy 370 393 6 7.0 11.9 16.0 53.0 31.0 4.8 4.3 9.5 14.8 17.5

5 June 2017 23
 MOSL Universe stock performance

Company 1 Day (%) 1M (%) 12M (%) Company 1 Day (%) 1M (%) 12M (%)
Automobiles Capital Goods
Amara Raja 0.6 -2.1 3.6 ABB 0.3 2.7 19.1
Ashok Ley. 1.8 11.1 -12.0 Bharat Elec. -0.3 -6.1 47.9
Bajaj Auto 0.2 -2.0 9.7 BHEL 1.3 -20.0 17.0
Bharat Forge -1.0 2.9 56.5 Blue Star 0.3 -5.3 50.7
Bosch 0.2 3.3 8.0 CG Cons. Elec. 4.5 9.7 75.6
CEAT 3.4 16.0 102.7 CG Power & Inds Sol. 0.5 7.0 13.2
Eicher Mot. 1.5 13.2 55.5 Cummins 1.8 -5.9 19.1
Endurance Tech. 3.4 7.2 GE T&D -1.4 4.2 6.2
Escorts 3.4 26.9 313.4 Havells -0.4 1.1 33.0
Exide Ind -0.4 -1.5 42.3 Inox Wind 2.6 -29.1 -34.0
Hero Moto 2.9 14.6 22.5 K E C Intl 0.3 23.2 94.2
M&M -0.4 5.8 6.4 L&T -0.4 3.2 20.7
Mahindra CIE 0.0 3.5 23.4 Pennar Eng. 1.5 -8.5 -12.6
Maruti Suzuki -0.4 6.1 70.0 Siemens 0.3 2.6 13.0
Tata Motors 0.5 6.0 5.6 Solar Ind -0.6 4.4 30.9
TVS Motor 1.2 9.5 82.6 Suzlon Energy 1.3 -4.6 27.4
Banks - Private Thermax -0.2 -4.5 30.2
Axis Bank -0.3 0.5 -3.1 Va Tech Wab. 0.9 -1.6 9.5
DCB Bank 0.9 2.6 111.9 Voltas -1.6 20.9 48.1
Equitas Hold. 2.4 -1.6 -3.9 Cement
Federal Bank -1.4 1.6 121.9 Ambuja Cem. 0.0 -0.5 4.7
HDFC Bank 0.5 6.1 39.2 ACC -0.5 3.4 6.2
ICICI Bank -0.6 15.3 31.8 Birla Corp. 0.3 15.6 114.6
IDFC Bank 1.6 -10.0 23.1 Dalmia Bharat 0.3 10.8 162.6
IndusInd 2.3 4.7 35.4 Grasim Inds. 1.6 0.7 33.5
J&K Bank -0.4 6.3 44.2 India Cem 1.7 1.1 118.3
Kotak Mah. Bk 0.0 4.9 29.1 J K Cements 0.0 13.2 90.5
RBL Bank 0.3 -6.0 JK Lakshmi Ce 0.4 4.3 43.7
South Indian 1.6 12.9 66.9 Ramco Cem -0.4 5.3 45.4
Yes Bank 2.6 -9.1 41.3 Orient Cem 3.8 -6.0 -5.2
Banks - PSU Prism Cem -1.2 -3.3 25.7
BOB 0.1 -5.1 26.7 Shree Cem 1.7 -6.1 30.7
BOI 1.3 -19.6 68.1 Ultratech 0.8 0.6 30.9
Canara 2.0 -1.9 85.1 Consumer
IDBI Bk 0.3 -21.4 -9.1 Asian Paints 0.3 4.2 13.9
Indian Bk -1.2 -0.3 246.9 Britannia -0.8 0.1 27.8
OBC 2.3 -9.9 88.0 Colgate -1.1 -0.3 19.0
PNB 0.9 -10.5 97.4 Dabur -0.3 0.0 -4.7
SBI 0.0 -0.3 43.3 Emami 1.7 8.9 11.9
Union Bk 1.6 -6.0 37.8 Godrej Cons. 0.2 2.3 17.9
NBFCs GSK Cons. 2.1 4.6 -5.1
Bajaj Fin. 2.5 7.1 71.1 HUL -0.8 17.0 25.1
Bharat Fin. 1.2 -5.5 12.0 ITC 1.4 14.6 33.8
Dewan Hsg. -0.7 -7.4 109.7 Jyothy Lab -0.5 -7.2 26.4
GRUH Fin. 2.6 2.8 45.5 Marico 1.5 0.9 29.2
HDFC 1.7 1.7 27.7 Nestle 0.7 -1.0 5.2
Indiabulls Hsg -0.9 5.5 54.8 Page Inds 0.5 -2.9 0.7
LIC Hsg Fin -0.5 3.9 54.6 Parag Milk -0.8 -1.7 -6.9
Manappuram 0.2 -5.3 68.1 Pidilite Ind. 3.7 10.3 10.7
M&M Fin. 7.6 17.1 20.9 P&G Hygiene 2.0 4.3 24.6
Muthoot Fin 4.5 8.6 76.7 United Brew 0.4 4.8 8.9
PFC -2.1 -21.8 54.0 United Spirits 1.4 21.1 -5.7
Repco Home 0.6 2.2 17.1 Healthcare
REC 0.3 -10.5 129.7 Alembic Phar 0.9 -13.2 -4.0
STF 0.0 2.0 -11.2 Alkem Lab 2.1 -0.5 51.6
Shriram City Union 1.6 5.8 42.7 Ajanta Pharma 0.2 -2.4 3.2
Aurobindo 2.3 -0.6 -24.8

5 June 2017 24
 MOSL Universe stock performance

Company 1 Day (%) 1M (%) 12M (%) Company 1 Day (%) 1M (%) 12M (%)
Biocon 1.6 -10.6 37.1 Titan Co. 0.3 -2.6 31.9
Cadila 5.0 10.5 52.5 Technology
Cipla 2.6 -4.7 12.7 Cyient 1.9 -9.6 4.4
Divis Lab 2.8 -1.4 -45.9 HCL Tech. -0.5 4.3 18.9
Dr Reddys 1.3 -1.1 -19.6 Hexaware 0.3 6.6 13.6
Fortis Health -2.7 -15.1 17.4 Infosys -0.2 5.3 -23.1
Glenmark -1.1 -27.0 -22.2 KPIT Tech -0.5 -12.1 -33.0
Granules -0.1 -7.1 3.0 L&T Infotech -1.5 9.9
GSK Pharma 0.0 1.5 -30.0 Mindtree 0.6 11.4 -17.3
IPCA Labs -1.4 -14.4 21.7 Mphasis 2.3 9.8 12.1
Lupin 1.3 -10.7 -21.1 NIIT Tech 0.6 16.2 7.9
Sanofi India -0.8 -2.9 -6.0 Persistent Sys -0.2 3.6 -16.6
Sun Pharma 1.2 -18.6 -31.1 Tata Elxsi -0.9 -11.1 -25.4
Syngene Intl -0.7 -3.0 24.7 TCS 0.4 11.8 -3.2
Torrent Pharma 0.5 -12.8 -9.4 Tech Mah 0.7 -4.4 -26.8
Logistics Wipro 1.9 11.5 2.2
Allcargo Logistics -0.1 -6.4 6.5 Zensar Tech 0.9 -0.2 -6.9
Blue Dart 0.2 -7.8 -23.8 Telecom
Concor 0.5 -3.3 4.5 Bharti Airtel 1.6 7.4 2.0
Gateway Distriparks -2.2 -8.4 -21.4 Bharti Infratel -0.5 5.4 -1.9
Gati 0.2 -9.7 -6.2 Idea Cellular 0.3 -5.7 -32.5
Transport Corp. 1.7 30.9 86.6 Tata Comm 1.7 2.9 64.9
Media Utiltites
Dish TV 0.5 -11.8 -5.1 Coal India 1.4 -2.3 -12.3
D B Corp 0.2 -0.3 2.2 CESC 0.9 -4.2 70.3
Den Net. -1.1 -10.1 -6.2 JSW Energy 0.8 2.1 -9.5
Hind. Media 0.1 -5.7 1.7 NTPC 1.3 0.2 12.1
HT Media 0.1 -0.3 -0.5 Power Grid -0.8 0.1 37.3
Jagran Prak. 0.0 -9.3 5.0 Tata Power 0.4 -2.9 12.1
PVR 0.2 -8.7 61.9 Others
Siti Net. -0.9 -20.0 -26.1 Arvind -0.2 -7.2 20.5
Sun TV 3.9 -9.6 126.0 Bata India 0.6 -5.9 -2.8
Zee Ent. 0.1 -2.3 14.7 Castrol India -1.2 -4.2 12.1
Metals Century Ply. 0.3 5.9 62.9
Hindalco -0.3 -1.7 85.8 Coromandel Intl -0.7 16.8 78.9
Hind. Zinc -0.2 -11.5 41.5 Delta Corp -0.6 -3.1 77.9
JSPL 1.4 7.2 93.9 Dynamatic Tech -2.8 -7.0 -0.6
JSW Steel -0.1 -0.5 41.3 Eveready Inds. -0.8 4.2 33.1
Nalco -1.6 -3.8 56.1 Interglobe -1.2 -0.9 10.0
NMDC 0.2 -11.3 30.8 Indo Count 2.8 -11.8 -2.2
SAIL 1.1 -3.3 35.8 Info Edge 0.1 7.4 15.6
Vedanta -1.1 -5.4 114.7 Inox Leisure -1.2 -1.8 39.7
Tata Steel -1.3 10.4 44.3 Jain Irrigation 1.1 -5.5 58.2
Oil & Gas Just Dial 1.0 -12.3 -34.3
BPCL -1.4 -2.0 44.7 Kaveri Seed 1.7 12.3 40.5
GAIL -1.5 -6.4 42.8 Kitex Garm. 1.8 -7.0 -19.4
Gujarat Gas -1.2 -10.5 46.3 Manpasand -2.2 10.6 42.3
Gujarat St. Pet. 0.8 -3.1 33.3 MCX 0.1 -15.0 2.3
HPCL -0.8 -2.6 76.7 Monsanto -0.3 11.5 18.4
IOC 0.1 -6.4 97.4 Navneet Educat. -0.1 8.0 108.4
IGL 2.4 2.6 91.5 PI Inds. -0.1 -6.3 18.6
MRPL -1.3 2.9 98.3 Piramal Enterp. 0.0 10.0 98.2
Oil India -1.1 -8.7 13.6 SRF 1.2 -6.8 28.4
ONGC 0.0 -9.5 22.5 S H Kelkar -1.9 -14.2 30.9
PLNG 0.6 4.7 62.2 Symphony 0.4 -8.2 11.4
Reliance Ind. -0.3 -3.4 38.6 TTK Prestige 1.3 6.4 45.7
Retail V-Guard -1.3 -4.7 83.1
Jubilant Food 1.7 -10.9 -8.8 Wonderla -0.7 -4.3 -4.2

5 June 2017 25
 NOTES

5 June 2017 26
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