Indigo : Ramdeo Agarwal, Motilal Oswal

Negative Working Capital : Only airline in India to work on negative working capital. Their
model is to fill inventory by selling tickets in advance & use that money for operations. They
have a virtuous business cycle of;
o

Good Service > Low Cost > Higher Connectivity Than Competitors & Wider
Network > Preference From Customers Leads To Advanced Booking > Working
Capital Requirement solved > Asset lite / less capital intensive model

Value Migration : The price gap between railway & air travel is narrowing. Less than 1% of
Indians have travelled by Air so far. A huge no of people may shift from railways to air.
Flying culture yet to begin in India. Unlimited growth potential over the next decade.
Oil Prices : Cheap oil is an additional advantage & not the only one. As oil prices go up, it
will be an advantage to Indigo being the leader in the segment.
Low Cost Advantage : Indigo is the lowest cost operator, next player after Indigo is Jet;
which has 50% higher costs if compared.
Market Share : Indigo has highest number of planes on order. They will add most of the
industry capacity going forward. Will result in increased market share.
Operational Barriers : There are no entry barriers, anyone with capital can set up an airline.
However, there are very high operational barriers. Very few players have been able to grow
to scale from scratch.

Value Migration : Value migration is happening on 2 fronts;

From full service carrier to low cost

From rail to air

Valuations : Earnings pay back of 8 years & dividend payback of around 7.5 years ( 95%
dividend policy ). Looks attractive at present.

Alcoholic Beverages : Sunil Singhania, Reliance Mutual Fund

Alcohol is gaining social acceptance : Compared to 90s & 00s, acceptance for drinking in
social environment has gone up with every year. Will go up further. It is normal to see 2
generations sharing a drink over a family gathering now days.
Opportunity Size : Multi-decade theme. More than 55% of our population has not even
entered drinking age yet.
Indias alcoholic beverage market : 38 billion US $ ( 75% unorganized sector, 25% organized
sector ). As discretionary spend goes up, Indians will spend more on premium liquor &
share of organized will only go up from present. Compared to India, Chinas alcohol
market is 250 billion US $ as on date.
Margins to move up : Globally, beverages companies make around 40% plus operating
margins. In India margins are at 10-12% due to various factors including higher
transportation costs, multiple taxes, different tax policies across geographies as alcohol
is a state subject, low paying capacity etc. See margins moving up towards 40% range in
the coming decade or so. Most of the analysts come up with 1 or 2% margin variations!
Need to look at the big picture. Margins are set to go up as prices increase, costs are
rationalized & operating leverage kicks in with additional demand.
Prohibition concerns : In one of the most regulated market i.e. Saudi Arabia, consumption
has gone up despite all efforts. Do not see it as a serious threat barring minor hiccups
here & there.

Healthcare / Hospitals Segment : S Naren, ICICI Prudential

Low cost advantage : India has cheapest public transport, stock brokerage fees, telecom
charges in the world. Though healthcare costs seem high from Indian point of view, they are
the cheapest in the world as on date, providing scope for medical tourism.
Opportunity : West is ageing, and bad demographics is a good news for healthcare services
providers. With advanced medical facilities, death rates are dropping as well, which brings
further longevity for the sector. Visa on arrival is good for hotels & hospitals both.
Cardiac, oncology & diabetes segments are sitting on a huge opportunity.
Insurance Penetration : Roughly 20% of population / 25 crore people have access to health
insurance.
Rentals : Rent for commercial real estate is one of the lowest in India. With new airports
coming in, new areas outside city limits being developed, real estate prices are attractive
enough for businesses to move into such locations.
He added that, in Indian markets the good quality is trading really expensive & there is no
value left in it. However the so called poor quality provides a huge opportunity. Addressing
the corporate governance concerns he said, It is cyclical in India! Promoters change as good
times come in.

Coromandel International : Kenneth Andrade

Investment Philosophy :

Like to buy early into companies that have good balance sheets, are leaders in their
segments & are consolidating their positions while at the bottom of the cycle.

Likes to buy efficient capital with low leverage & attractive valuation.

Direct Beneficiary Transfer : Every year, the government gives close to 66000 crore fertilizer
subsidy. Most of it is given via providing fertilizers at a subsidized rates in the market.
Government has started a pilot programme to directly transfer this subsidy to farmers account
& let them buy from open markets.
As on date, most money goes to urea because of 70% subsidized rates. Other fertilizers have
only 20 to 30% subsidy. DBT can change the way farmers spend their money. As gap narrows
between other fertilizers & urea prices in open markets, it will become a free market economy.
Crop Insurance Scheme : Crop insurance scheme is a step in the right direction & provides
safety factor for farmers, which may result in higher spending on the agri inputs side.
Capacity Utilization : Coromandel is operating at a 70% capacity as on FY 2016. Has 60%
market share in DAP & other complex fertilizers.
Business Composition : 85% of coromandels fertilizer business is not making any money. Its
only 15% business that is contributing to overall profits & cash generation. Company is
deploying additional cash to diversify into various segments & further strengthening its

presence in south India. ROE has gone down in last 5 years, but that is completely okay
given the weak environment due to monsoon failures. As & when the business bounces back,
and 85% of the business starts making money, we will see dramatic improvement in
numbers. Debt is comfortable, clean balance sheet shall enable faster growth.

Repco : Shiv Puri, TVF Capital

Indias urban housing market is worth 486 billion US $, out of which HDFC has a loan
book of around 40 billion US $. Their loan book has grown 40 times in last 20 years or so.
Meanwhile they have maintained a culture of keeping very high asset quality, control on
costs etc.

Indias rural housing market is worth 405 billion US $ as on date. Repcos loan book size
stands at 1 billion US $. They have the capital, team & the right culture to keep on
growing the business. Why cant Repco grow their loan book to 40 billion US $ going
forward ?

It lends money to borrowers who do not have documents / tax return etc. But we have to
consider that, in each such family there are multiple members who work in unorganized
sector or are self-employed. All these family members earn some amount of money &
contribute to family expenses. In totality, they generate enough cash flow to sustain &
repay their housing loans on time.

See higher growth rate in below 10 lakh & 10 to 20 lakh home loan category going
forward.

Federal Bank : Akash Prakash, Amansa Capital

90% of deposits are retail deposits, Federal Banks reliance on bulk deposits among the
lowest.

Federal Bank receives 12% of indias overseas remittances.

PSU problem provides an opportunity : Banks growth stagnated, as there was virtually
no growth in their corporate book in the last 3 years. New mid-level team is focused on
getting new clients on board. As PSUs are undercapitalized & cannot expand their loan
books in near future, it provides an opportunity to get good quality corporate customers
on board & grow Federal Banks loan book.

70% of the banking system i.e. PSUs are undercapitalized to lend further. It is an
opportunity for well capitalized private sector banks to grow.

Cost to income ratios are moving down & credit quality is improving.

Corporate loan growth is back. Gold loan was stagnated in last 3-4 years. Bank plans to
increase gold loan book aggressively.

Most of the provisioning is done. May be another 100-200 crore is remaining here &
there.

ROA should move from 0.5% to 1% in coming years.

Buying since 70 plus levels. Doubled up when the stock fell to 40. Holding the stock
since last 4 years.

Tata Motors & DLF : Rakesh Jhunjhunwala

Tata Motors : Land Rover / Jaguar growth rate should surprise the markets. Commercial
vehicles will bounce back & maintain the leadership as economic activity improves.
World over, customers are shifting towards crossover vehicles from sedans & SUVs.

Based on his projections, expects 90 to 95 rs EPS in a few year time. Stock should get
rerated. Tata Motors will be the largest company in India by way of market
capitalization.
Expects it to surpass TCS market cap.

DLF : Sum of the parts valuation of approved & under construction floor space + rental
income works out to be more than 70000 crores, while todays market cap is 23000
crores.

Believes that biggest opportunities in life are created in situations like this where
companies are considered to be dead dogs & no one is willing to touch them.