Company Update

November 20, 2014

Rating matrix

Atul Auto (ATUAUT)

Rating
Targe t

:
:

B uy
| 564

Targe t Pe r iod
Pote nt ial Ups ide

:
:

12 m onth s
38%

Makes room for next phase of growth!

Whats changed?
Target

Changed from | 350 to | 564

EPS FY16E
EPS FY17E
Rating

Changed f rom | 25.0 t o | 27.5

Introduc ed at | 37.6
U nchange d

Quarterly performance
( | Cr ore)

Q 2FY15

Q 2FY14

YoY ( %)

Q 1FY15

QoQ (%)

131.3
15.8

109.0
11.4

20.4
37.9

99.7
9.6

31.6
65.0

12.0
11.0

10.5
7.4

152 bps
48.6

9.6
9.7

243 bps
13.4

Rev enues
EB ITD A
EB ITD AM ( %)
PAT

Key financials
| Cr ore
Net Sales

FY14
429

FY15E
530

FY16E
651

FY17E
832

EB ITD A
Net Profit
EPS ( |)

45.4
29.8
13.6

62.9
45.9
20.9

86.0
60.3
27.5

117.4
82.5
37.6

Valuation summary
FY14

FY15E

FY16E

FY17E

P/E (x)
Target P/ E ( x)

30.2
41.5

19.6
26.9

14.9
20.5

10.9
15.0

EV/EB ITDA (x)

P/B V (x)
RoNW ( %)

18.8
9.5
31.6

14.2
7.4
37.9

10.4
5.3
35.8

7.1
3.9
36.2

RoCE ( %)

42.5

47.0

46.8

47.4

Stock data
Particular

Amount

M ark et Capit alization ( | Cr ore)

Tot al D ebt (FY14) ( | Cr ore)

| 899.5 Cr ore
| 0 Cr ore

Cash & Investments (FY14) (| Cror e)

| 45 Cr ore

EV (| Cror e)
52 week H / L ( |)

| 854.5 Cr ore
446 / 132

Equity capital (| crore)

Face value (|)

| 11 Cr ore
|5

Price performance
1M

3M

6M

12M

Atul Auto Ltd

19.3

15.9

112.2

189.0

Bajaj Auto Ltd

12.7

21.7

42.4

32.8

3.1

31.0

94.1

370.1

TVS Motor Company Ltd

| 410

Analyst
Nishant Vass
nishant.vass@icicisecurities.com
Venil Shah
venil.shah@icicisecurities.com

ICICI Securities Ltd | Retail Equity Research

Atul Autos earnings came in largely on expected lines with topline at

~| 131 crore, up ~20% YoY, aided by 17% YoY volume growth to
~11000 units. ASPs also improved ~1% QoQ as mix improved
Margins at 12.0% increased ~240 bps QoQ and ~150 bps YoY but
came in line with estimates
PAT at | 11 crore was up ~49% YoY, boosted by a lower-thanestimated tax rate
Volumes rise as geographical reach, distribution network increase!
Atul Autos growth trajectory has been impressive with volumes growing
at ~40% CAGR in FY09-14 even as the domestic three-wheeler segment
has grown at ~7% CAGR over the same period. Volumes have been
improving on the back of added dealerships and increasing geographic
presence along with market share gains in existing markets. Atuls
volumes have grown in both the passenger and goods carrier segments
where Atul has benefited from the launch of its rear-engine vehicle Atul
Gem in 2009, which has helped to serve a wider audience. Currently, Atul
is present in nearly all states barring Tamil Nadu and West Bengal. Also,
the dealer network comprises 190 primary dealers and ~110 sub-dealers
across the country. The management has guided that the number of
primary dealerships will rise to ~300 by the end of FY16E. This is likely to
help meet the managements target of 20% volume growth.
New products lined up to cater to new market segments, aid market share
Atul has attained a pan-India presence over the past three or four years,
establishing its brand in these new markets and gaining market share,
which has grown from 2.0% in FY09 to 7.7% in FY14. However, one of
the major shortcomings of Atul has been the lack of petrol engine
products, which is more in use in urban areas. With the management
guiding that the new petrol engine product will be launched in the next
nine to 12 months, we believe Atuls volumes are likely to remain on the
uptrend. The petrol product is also likely to boost export volumes with the
management expecting exports to grow exponentially on a low base.
New capacity to come on stream in FY17E, export story to start then!
In a segment that offers little scope for product differentiation, Atul has
been able to carve out a niche for itself focusing more on providing good
after-sale service and product customisation. The continued volume
growth and product acceptance is now expected to lead to doubling of
capacity. This facility would be focusing on export demand, which the
company expects to significantly rise as it competes with a complete
diesel/petrol portfolio. The facility is likely to be fully operational by
FY17E. Capex requirement for the project is likely to be ~| 150 crore, to
be funded through internal sources without resorting to debt.
Strong earnings growth, robust financials + reasonable valuations = BUY
We feel Atuls specialised focus has clearly paid rich dividends as
evidenced by market share gains. We believe that with further capacity
addition and new petrol product launch, Atul can efficiently tap export
markets along with urban markets in India and, thereby, continue the
strong growth momentum. The sharp rally in stock price over the past
two years has reflected the same. However, looking at the strong growth
potential coupled with strong balance sheet and robust return ratios
(>40% RoCE), we believe valuations at ~11x FY17E EPS remain very
attractive. We value Atul Auto at 15x FY17E EPS (~0.4x PEG CAGR FY1417E) to arrive at a target price of | 564 and recommend BUY.

Variance analysis
Q2FY15 Q2FY15E Q2FY14 YoY (%) Q1FY15 QoQ (%)
131.3
129.8
109.0
20.4
99.7
31.6
99.5
98.2
84.1
18.3
75.9
31.0

Total Operating Income

Raw Material Expenses
Employee Expenses
Other expenses
EBITDA
EBITDA Margin (%)
Other Income

8.2
7.8
15.8
12.0
0.9

8.0
8.2
15.4
11.9
0.8

6.9
6.6
11.4
10.5
0.6

19.6
17.9
37.9
152 bps
41.3

8.0
6.3
9.6
9.6
5.6

2.9
24.1
65.0
243 bps
-84.0

Depreciation
Interest
Tax
Reported PAT
EPS

1.4
0.2
4.1
11.0
5.0

1.5
0.1
4.4
10.2
4.6

1.3
0.2
3.2
7.4
3.4

4.6
4.5
29.4
48.6
48.6

1.5
0.1
4
9.7
4.4

-11.7
109.1
7.9
13.4
13.4

4.6 117,598
2.2
90,027

1.0
-0.4

Key Metrics
ASPs (| '000s)
RM/Unit (| '000s)

118,774
89,710

117559 113,534
88,594
87,803

Comments
Performance in line with estimates driven largely by volume growth

Lower-than-expected other expenses leading to better margins

Lower on a QoQ basis as last quarter had seen recovery of bad debt to the
tune of ~| 3 crore

Continued rise in ASPs

Source: Company, ICICIdirect.com Research

Change in estimates
FY16E

FY17E
Introduced
833

(| Crore)
Revenue

Old
655

EBITDA

82

86

5.4

117

Strong operating profits on the management's cost reduction plan coupled with
benefit of operating leverage

12.5

13.2

72 bps

14.1

Margin expectation increases on higher growth in volumes led to operating leverage

benefits coupled with cost cutting initiatives taken by the management

EBITDA Margin (%)

PAT
EPS (|)

New % Change
652
-0.4

55

60

10.1

83

25.0

27.5

10.1

37.6

Comments
New capacity to come on-stream in FY17E

Source: Company, ICICIdirect.com Research

Assumptions

Domestic volumes
Export volumes
ASPs (|)
RM/vehicle (|)
EBITDA/vehicle (|)

FY14
37,007

FY15E
43,356

Current
FY16E
51,526

FY17E
63,022

Earlier
FY16E
51,067

FY17E
N.A.

Comments

550
114,346

1,461
118,183

2,839
119,772

3,876
124,364

1,724
120,881

N.A.
N.A.

Export volume growth assumed as per the management guidance

ASPs to trend higher as export contribution improves and improved demand
scenario enables price hikes

88,250
12,086

90,023
14,026

90,013
15,814

93,236
17,542

93,526
14,370

N.A.
N.A.

Likelihood of raw material prices to remain on an uptrend

Benefit of scale to start accruing as utilisation levels reach ~100% in FY16E
before the new facility is commissioned

Volumes to continue to grow on the back of increase in distribution network and

improved demand scenario

Source: Company, ICICIdirect.com Research

ICICI Securities Ltd | Retail Equity Research

Page 2

Key conference call takeaways

ICICI Securities Ltd | Retail Equity Research

The management has maintained the guidance for growth for the
next couple of years. New capacity is likely to come on stream
from FY17E onwards

The management has guided that the dealer network expansion

will continue with ~50 new dealers likely to be added in FY15E.
The current touch points count stands at ~300 with dealers at
~200

For the new plant in Gujarat, 54 acres of land has been acquired
and the project is expected to start soon. The expected capex for
the same is ~| 150 crore, which would be funded largely through
internal accruals

The management has indicated that the export segment is likely

to witness strong volume growth in the coming years with six
distributors established in Kenya, Mozambique, Bangladesh, etc.
The management has maintained its target of ~1500 units for
FY15E

The management has guided that the new petrol engine product
is likely to be launched in the next six months, which would lead
to Atuls entry in urban as well as export markets

The current facility can be expanded from 48,000 units to ~60,000

units by carrying out the de-bottlenecking activity

Page 3

Company Analysis
Revenues to grow as volumes remain on uptrend
Atul Auto is the only pure play 3-W manufacturer in India. With ~17%
share in the goods carrier segment and 5.5% share in the passenger
carrier segment, Atul has reached a respectable size in the market. Atul
has also gone pan-India with a presence across almost all states. We
expect volumes to remain on the uptrend as the market share increases in
newly launched markets. Also, the new petrol engine variant to be
launched next year is likely to add incremental volumes as Atul targets
urban markets for growth. We build in revenue growth at ~25% CAGR in
FY14-17E as volumes grow at ~21% CAGR in the same period.
Exhibit 1: Growth in revenues driven largely by volume growth
80

900
800

70

69.1

60

700

362.9

298.3

201.6

200

18.4

651.1

21.6

300

529.7

400
23.3

40

832.0

500

27.8
22.9

30
20
10
-

100
FY11

FY12

FY13

FY14

Net Sales

FY15E

FY16E

FY17E

Growth (%)

Source: Company, ICICIdirect.com Research

Atuls main forte has been the rural markets, especially the
large diesel segment, which is a ~2.5 lakh strong market.
Atul has a significant market share in the goods carrier

Exhibit 2: Segmental volumes dominated by goods carrier segment!!!

40,000

FY09

FY10

FY11
Passenger Carriers

FY12
Goods Carriers

FY13

21640

5015

17264

7153
-

13916

4350

10511

10,000

7330

8895

20,000

14773

13084

30,000

15917

segment in which it is a strong player

FY14

Source: Company, ICICIdirect.com Research

ICICI Securities Ltd | Retail Equity Research

Page 4

(%)

50

48.0

429.5

(| crore)

600

Exhibit 3: Market share movement over the years

6.0

15.2

5.0

12.2

3.0

15

3.9

3.4

2.0
1.0

5.5

12

8.8

8.2

18

2.4

5.5
1.0

(%)

(%)

4.0

16.7

1.4

0
FY09

FY10

FY11

FY12

Passenger Carriers

FY13

FY14

Goods Carriers

Source: Company, ICICIdirect.com Research

EBITDA margins to improve from current levels on operating leverage

Despite continued volume growth, Atuls margins have remained largely
subdued over the past two years as conversion costs have been high and
the sluggish market scenario has prevented OEMs from passing on costs.
Going ahead, we believe with an improvement in sentiment, demand
pick-up will encourage OEMs to take price hikes. Also, with a further
improvement in utilisation levels, operating leverage benefits are likely to
accrue and aid margins. Thus, we believe margins will trend higher and
grow to 13.2%, 14.1% in FY16E, FY17E, respectively.
Exhibit 4: Margins trends and forecasts
140

15

120

14.1 14
13.2

12
117.4

11.9

9.6
19.4

27.5

9.2

FY11

FY12

FY13

FY14

62.9

40

45.4

10.6

86.0

11.0

60

20

13

(%)

80

40.1

(| crore)

100

11
10
9

8
EBITDA

FY15E

FY16E

FY17E

EBITDA Margin (%)

Source: Company, ICICIdirect.com Research

ICICI Securities Ltd | Retail Equity Research

Page 5

Exhibit 5: Net ASPs to trend higher as product/geography mix improves

130,000

124,364

125,000
118,183

120,000
115,000
(|)

119,772

113,252

114,346

FY13

FY14
ASPs (|)

110,480

110,000

103,872

105,000
100,000
95,000
90,000

FY11

FY12

FY15E

FY16E

FY17E

Source: Company, ICICIdirect.com Research

Profitability to improve as volumes and margins increase!!!

Profitability is likely to remain on an uptrend as the management focus on
growing profitably remains intact. With increasing volumes and an
improvement in margins, profitability is likely to remain on an uptrend.
We expect PAT to increase at ~35% CAGR in FY14-17E mainly as
capacity utilisation improves leading to margin expansion.
Exhibit 6: Increase in profitability as financial performance improves!
90

120
107.5

80

100

70

66.6
54.0

40
45.9

30

FY12

29.8

FY11

25.9

15.6

10

9.4

20

FY13

FY14

60

82.5

64.8

60.3

(| crore)

50

31.3

36.8

40
20

15.0

0
PAT

FY15E

FY16E

FY17E

Growth (%)

Source: Company, ICICIdirect.com Research

ICICI Securities Ltd | Retail Equity Research

Page 6

(%)

80

60

Capex to be funded by strong CFO generation

Atul possesses strong balance sheet strength, with zero debt on the
books. For the major capex planned in FY15E, FY16E, the management
has guided at meeting the capex need by using existing cash as well as
CFOs. We believe that in the next two years, with CFO generation likely to
remain robust as the demand scenario improves, Atuls debt-free status is
likely to sustain.
Exhibit 7: Major capex to be funded by strong CFOs.to retain debt-free status
100
90
80
60

FY13
Capex

10.0

68.0
70.9
63.2

55.6
45.0

FY12

FY14
CFO

1.4

FY11

3.3

11.3

37.8

3.8

10

11.5

20

27.5
11.4

30

75.0
57.6

40

94.2
81.1

50

10.4
27.0
9.4

(| crore)

70

FY15E

FY16E

FY17E

Cash & Equivalents

Source: Company, ICICIdirect.com Research

Return ratio improvement reflects overall improvement in financials

Despite the planned capex in FY15E, FY16E, due to an improvement in
profitability, return ratios are likely to remain on an uptrend. We believe
return ratios are likely to remain at current levels and expect RoE, RoCE to
remain above 40%, 30%for FY15E, FY16E, respectively.
Exhibit 8: Return ratios to remain buoyant!!
60
48.0

50

38.8

(%)

40

35.0

30

23.4

20

42.5

34.9

47.0

47.4

37.9

35.8

36.2

FY15E

FY16E

FY17E

31.6

27.8

46.8

10
0
FY11

FY12

FY13

FY14
RoCE

RoE

Source: Company, ICICIdirect.com Research

ICICI Securities Ltd | Retail Equity Research

Page 7

Outlook & valuation

We feel Atuls specialised focus has clearly paid rich dividends as
evidenced by market share gains. We believe with further capacity
addition and new petrol product launch, Atul can efficiently tap export
markets along with urban market in India and, thereby, continue the
strong growth momentum. The sharp rally in stock price over the past
two years has reflected the same. However, looking at the strong growth
potential coupled with strong balance sheet and robust return ratios
(>40% RoCE), we believe valuations at ~11x FY17E EPS remain very
attractive. We value Atul Auto at 15x FY17E EPS (~0.4x PEG CAGR FY1417E) to arrive at a target price of | 564 and recommend BUY.
Exhibit 9: Two-year rolling forward P/E

rating of the multiples. We believe with increasing visibility

1000
900
800
700
600

Price

25.5x

22.5x

13.4x

1.2x

10.3x

Oct-14

Apr-14

Oct-13

Apr-13

Oct-12

Apr-12

Oct-11

Apr-11

Oct-10

Apr-10

Oct-09

Apr-09

Oct-08

500
400
300
200
100
0
Apr-07

(|)

trajectory

Apr-08

of earnings, multiples are likely to remain on an upward

Oct-07

The sustained improvement in performance has seen a re-

7.3x

Source: Company, ICICIdirect.com Research

Exhibit 10: Valuations

FY14
FY15E
FY16E
FY17E

Sales

Growth

EPS

Growth

PE

EV/EBITDA

RoNW

RoCE

(| cr)
429.5
529.7

(%)
44.0
23.3

(|)
13.6
20.9

(%)
91.7
54.0

(x)
30.2
19.6

(x)
18.8
14.2

(%)
31.6
37.9

(%)
42.5
47.0

651.1
832.0

22.9
27.8

27.5
37.6

31.3
36.8

14.9
10.9

10.4
7.1

35.8
36.2

46.8
47.4

Source: Company, ICICIdirect.com Research

ICICI Securities Ltd | Retail Equity Research

Page 8

Financial summary
Profit and loss statement
( Year- end M arc h)
Tot al Volumes ( Units )
Tot al ope r ating Income
G r owt h ( %)
Ra w Mat erial Expens es
Employee Expe ns es
O t her Expenses

| Crore

Cash flow statement

| Crore

FY14

FY15E

FY16E

FY17E

( Year- end M arch)

32,040

37,557

44,817

54,365

Pr ofit aft er Tax

430.3

531.3

652.3

833.4

18.3

23.5

22.8

27.8

331.4

403.5

489.4

623.7

Inc/( dec) in CL and Provisions

- 0.3

8.8

11.4

18.2

27.3

33.1

37.6

43.3

CF fr om operating act iv it ies

26.6

57.0

70.5

93.8

Add: D epreciat ion

( Inc) /dec in Curr ent Assets

FY14

FY15E

FY16E

FY17E

29.8

45.9

60.3

82.5

5.2

5.9

7.0

9.2

- 8.1

-3.6

- 8.2

- 16.1

26.2

31.8

39.4

49.0

( Inc) /dec in Investments

0.0

0.0

0.0

0.0

385.0

468.4

566.3

716.1

( Inc) /dec in Fixed Ass ets

- 10.4

-75.0

- 68.0

- 10.0

EB ITD A

45.4

62.9

86.0

117.4

O t hers

0.6

1.6

2.3

1.1

G r owt h ( %)

Tot al O pera ting Expe nditur e

13.2

38.5

36.8

36.5

CF fr om investing activities

- 9.8

-73.4

- 65.7

- 8.9

D epr e ciat ion

5.2

5.9

7.0

9.2

Issue/ (B uy back) of Equity

0.0

0.0

0.0

0.0

Inter est

0.3

0.5

0.4

0.4

Inc/( dec) in loan f unds

0.0

0.0

0.0

0.0

O t her Inc ome

2.9

8.2

6.1

6.9

D ividend paid & dividend tax

- 9.6

-19.2

- 12.8

- 23.1

42.8

64.7

84.6

114.6

0.0

0.0

0.0

0.0

Tot al Tax

13.0

18.7

24.3

32.1

PAT

29.8

45.9

60.3

82.5

G r owt h ( %)

15.0

54.0

31.3

EPS (|)

13.6

20.9

FD EPS (|)

13.6

20.9

FY15E

FY16E

PB T
O t hers

O t hers

- 0.3

-0.5

- 0.4

- 0.4

- 10.0

-19.8

- 13.2

- 23.5

Net Cas h f low

7.2

-35.6

- 8.0

61.9

36.8

O pening Cash
Closing Cash

37.8
45.0

45.0
9.4

9.4
1.4

1.4
63.2

27.5

37.6

27.5

37.6

Source: Company, ICICIdirect.com Research

FY15E

FY16E

FY17E

CF fr om financing activit ies

Source: Company, ICICIdirect.com Research

Balance sheet
( Year- end M arc h)

| Crore
FY14

FY17E

L iabilit ies

Key ratios
( Year- end M arch)

FY14

Per s hare data ( |)

Equity Capital

11.2

11.2

11.2

11.2

EPS

13.6

20.9

27.5

37.6

Re s erve and Surplus

83.3

110.0

157.5

216.9

Cash EPS

16.0

23.6

30.7

41.8

Tot al Shar eholder s funds

BV

43.1

55.2

76.9

104.0

D PS

7.5

7.5

5.0

9.0

Cash

20.5

4.3

0.6

28.8

94.5

121.2

168.7

228.1

Tot al D ebt

0.0

0.0

0.0

0.0

D ef erred Tax Liability

6.1

7.6

9.8

10.8

O t hers
Tot al Liabilities

2.3

2.1

0.2

0.3

100.8

129.1

178.9

239.5

Ass ets

O per ating Ratios ( %)

EB ITD A Margin

10.6

11.9

13.2

14.1

PB T / Net sales

10.0

12.2

13.0

13.8

G r oss Bloc k

83.4

93.4

106.4

236.4

L e ss: Ac c D e pr eciat ion

30.5

36.4

43.4

52.6

Net B lock

52.9

57.0

63.0

183.8

Ca pit al WIP

0.6

65.6

120.6

0.6

53.5

122.6

183.6

184.4

1.2

1.2

1.2

1.2

RoE

Inve nt ory

23.3

26.0

31.0

41.9

D ebt ors

13.1

14.5

16.9

22.8

RoCE

42.5

47.0

46.8

47.4

RoIC

72.8

105.3

138.7

61.6

L oans and Adva nces

2.9

2.6

2.9

2.5

O t her curre nt a ssets

0.6

0.3

0.8

0.6

10.9

Ca sh

45.0

9.4

1.4

63.2

Tot al Cur re nt Asse t s

84.8

52.8

53.0

131.0

Cr edit ors

27.1

33.4

41.0

54.7

Pr ovisions

7.8

9.6

11.8

14.7

O t her curre nt liability

8.8

9.5

11.0

12.7

Tot al Cur re nt Liabilities

43.7

52.5

63.9

82.1

D ebt /Equity

0.0

0.0

0.0

0.0

Net Cur rent Asset s

O t her non-curr ent asset s

41.2
5.0

0.3
5.0

- 10.9
5.0

48.9
5.0

Cur rent Rat io

1.9

1.0

0.8

1.6

100.8

129.1

Q uick Ratio

1.4

0.5

0.3

1.1

Tot al Fixed As sets

Inve st ment s

Applic ation of Funds

178.9.

Source: Company, ICICIdirect.com Research

ICICI Securities Ltd | Retail Equity Research

239.5

PAT Mar gin

Invent ory days

3.8

4.7

5.2

7.1

19.7

17.0

16.0

16.0

D ebt or days

11.1

10.0

9.5

10.0

Cr edit or days

23.0

23.0

23.0

24.0

31.6

37.9

35.8

36.2

Ret urn Ratios (%)

Valuat ion Rat ios (x)

P/ E

30.2

19.6

14.9

EV / EB ITD A

18.8

14.2

10.4

7.1

EV / Net Sales

2.0

1.7

1.4

1.0

M ark et Cap / Sales

2.1

1.7

1.4

1.1

Pr ice to B ook Value

9.5

7.4

5.3

3.9

Solvency Ratios

Source: Company, ICICIdirect.com Research

Page 9

ICICIdirect.com coverage universe (Auto & Auto Ancillary)

CMP
Sector / Company
Amara Raja (AMARAJ)
Apollo Tyre (APOTYR)
Ashok Leyland (ASHLEY)
Bajaj Auto (BAAUTO)
Balkrishna Ind. (BALIND)
Bosch (MICO)
Eicher Motors (EICMOT)`
Escorts (ESCORT)*
Exide Industries (EXIIND)

(|)

EPS (|)

M Cap
TP(|) Rating

P/E (x)

EV/EBITDA (x)

RoCE (%)

RoE (%)

(| Cr) FY15E FY16E FY17E FY15E FY16E FY17E FY15E FY16E FY17E FY15E FY16E FY17E FY15E FY16E FY17E

737

813

Buy

12,587

26.4

36.7

45.8

27.9

20.1

16.1

15.4

11.7

9.1

34.5

35.7

34.3

26.0

27.6

26.5

222
52

275
48

Buy
Hold

11,211
14,690

21.8
0.8

25.0
1.9

28.3
2.9

10.2
67.4

8.9
27.2

7.9
17.8

6.5
22.9

5.8
13.0

5.3
10.1

20.0
4.0

18.7
9.8

17.7
13.0

19.5
4.2

18.5
9.7

17.4
13.5

2,658

2,571

Hold

76,926 112.1 110.0 150.5

34.2

620

734

Buy

18,515 18,500
14,484 15,000
145
103

23.7

24.2

17.7

12.8

12.0

9.2

40.6

37.5

40.0

33.8

29.6

66.8

15.6

12.2

10.3

9.6

7.4

6.1

14.4

17.6

19.9

18.7

14.4

17.6

Hold

58,137 373.1 494.1 600.0

42.9

32.4

26.7

28.9

21.5

17.1

16.2

18.3

18.7

16.5

19.5

20.9

Buy
Sell

39,121 253.0 443.9 682.2

1,731 20.5 11.9 17.1

57.3
5.7

32.6
9.9

21.2
6.8

31.5
4.1

17.8
5.9

11.2
4.4

24.7
13.7

33.8
8.3

37.9
10.7

26.2
13.4

32.8
7.3

34.7
9.7

5,989

44.1

156

220

Buy

13,286

10.6

27.3

20.4

14.7

15.2

11.9

8.7

18.5

21.7

25.6

13.1

15.6

18.7

Hero Mototcorp (HERHON)

2,985

3,078

Hold

59,610 105.6 145.8 185.0

28.3

20.5

16.1

15.1

16.9

15.6

43.4

51.0

54.5

37.7

42.4

43.7

JK Tyre & Ind (JKIND)

M&M (MAHMAH)

509
1,227

627
1,457

Buy
Buy

2,088
72,429

6.1
20.7

4.7
16.5

4.1
14.5

4.7
14.0

3.9
8.6

3.3
7.5

20.1
18.9

21.6
20.1

22.5
20.6

25.6
19.8

25.3
19.3

22.5
18.9

Mahindra CIE (MAHAUT)*

232

260

Buy

Maruti Suzuki (MARUTI)

3,317

3,700

Buy

Motherson (MOTSUM)
Tata Motors (TELCO)

427

512

Buy

37,631

521
4,390

560
4,750

Buy
Buy

158,276
8,341

Wabco India (WABTVS)

7,532

5.7

56.5

7.6

83.9 108.3 122.9

59.3 74.5 84.8
13.9

37.1

22.5

16.6

11.9

9.3

7.4

8.0

12.8

16.1

7.8

11.9

15.9

100,225 117.9 156.4 205.6

6.2

28.1

21.2

16.1

15.3

11.8

9.0

15.1

18.1

20.3

14.9

17.0

19.0

26.9

38.1

20.8

15.9

12.4

9.3

7.0

26.3

32.1

37.4

28.8

39.3

38.0

43.3 61.6 73.5

75.1 128.2 169.7

10.3
58.5

7.3
34.2

6.1
25.9

4.6
30.4

4.0
19.8

3.4
14.7

21.7
16.1

23.2
22.0

23.2
22.9

21.3
20.1

23.7
26.2

22.5
28.2

11.2

10.3
20.5

Source: Company, ICICIdirect.com Research

ICICI Securities Ltd | Retail Equity Research

Page 10

RATING RATIONALE

ICICIdirect.com endeavours to provide objective opinions and recommendations. ICICIdirect.com assigns

ratings to its stocks according to their notional target price vs. current market price and then categorises them
as Strong Buy, Buy, Hold and Sell. The performance horizon is two years unless specified and the notional
target price is defined as the analysts' valuation for a stock.
Strong Buy: >15%/20% for large caps/midcaps, respectively, with high conviction;
Buy: >10%/15% for large caps/midcaps, respectively;
Hold: Up to +/-10%;
Sell: -10% or more;

Pankaj Pandey

Head Research

pankaj.pandey@icicisecurities.com

ICICIdirect.com Research Desk,

ICICI Securities Limited,
1st Floor, Akruti Trade Centre,
Road No 7, MIDC,
Andheri (East)
Mumbai 400 093
research@icicidirect.com
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ICICI Securities Ltd | Retail Equity Research

Page 11