KotakMahindraBank

Coreperformanceontrack
KMBsQ3FY16consolidatedPATofRs9.45bnwasmarginallyaheadofestimatesas
January19,2016 banksearningsstartscomingbackontrack.Mergersynergiesareshowingupin
pace of customer acquisition, space rationalisation and higher cross sales while

Q3FY16ResultUpdate
NitinKumar integrationcosthasstabilizedatlowerlevels.Loangrowthstoodat3.3%QoQled
nitinkumar@plindia.com bystrongtractioninCV/CEandpersonalloansegment.OverallconsolidatedPAT
+912266322236 was led by Kotak Investments, Life insurance and international subsidiaries while
KotakSecuritiesreporteda8%YoYdropinnetprofits.GNPLinthebankingbook
PriteshBumb
priteshbumb@plindia.com remains stable at 2.3% of loans though coverage ratio improved to ~59%. KMB
+912266322232 maintained its credit cost guidance of 8085 bp on combined book and expect
merger to fully complete by April/May 2016 and we thus expect return ratios to
Rating Accumulate improve gradually. We retain Accumulate and increase our PT to Rs725 from
Price Rs667
Rs715aswerollourvaluationsbasedonSep17book.
TargetPrice Rs725 Core performance getting back on track: KMB reported standalone PAT of
ImpliedUpside 8.7% Rs6.35bn,~2%aheadofourestimates.NIIstoodstrongatRs17.66bn(5%QoQ
growth) and was led by 3.3% QoQ growth in advances portfolio and stable
Sensex 24,188
margins.Bankscoreperformancehasstartedgettingbackontrackbutwilltake
Nifty 7,351
twomorequarterstorecoverfullyasintegrationprocessisstillon.Feeincome
(PricesasonJanuary18,2016) growthalsoremainedmodestat2%QoQandwasledbyTPDfees.Management
guidedfeesgrowthof1520%goingaheadastheyarealreadywitnessinghigher
Tradingdata transactionvalueesp.onretailside.
MarketCap.(Rsbn) 1,221.7 SAgrowthtractioncontinues:KMBhaswitnessedgranularSAgrowthonhigher
Shareso/s(m) 1,830.5 rate offering of 6% to IVBL customers which has improved SA growth of the
3MAvg.Dailyvalue(Rsm) 667.7 overall bank to 9% QoQ. CASA mix however declined to 35% (36% in 2QFY16)
Majorshareholders impacted by 3.5% QoQ fall in demand deposits. Management is targeting to
Promoters 33.70% improvetheCASAratiofurtherto40%goingahead.
Foreign 34.70% Assetqualitylargelystable;banknowaccountsfor67%ofconsolprofits:Asset
DomesticInst. 4.20% quality was largely stable with GNPAs/NNPAs at 2.3% & 0.96% v/s 2.35% &
Public&Other 27.30% 1.05%inQ2FY16respectively.Creditcostsmoderatedfurtherto52bp(89bpfor
StockPerformance
9MFY16)andKMBmanagementfullyearguidanceof8085bp.Stressedassets
(transferredintorecoverydepartmentsocalledBadBankinQ1FY16)remained
(%) 1M 6M 12M
staticat6%ofIVBLsfund+nonfundexposureor2.5%ofmergedbook.Among
Absolute (5.0) (9.0) (4.3)
subsidiaries,KotakInvestments,Lifeinsuranceandintlsubsdidwell.
Relative 0.2 6.1 9.6
Keyfinancials(Y/eMarch) 2015 2016E 2017E 2018E
HowwedifferfromConsensus
EPS(Rs) PL Cons. %Diff. Netinterestincome 54,815 66,247 77,349 90,075
2017 20.8 29.5 29.3 Growth(%) 12.5 20.9 16.8 16.5
2018 23.6 38.3 38.3 Operatingprofit 44,277 55,304 65,723 76,453
PAT 27,942 30,140 38,339 43,487

EPS(Rs) 18.0 16.4 20.8 23.6

PricePerformance(RIC:KTKM.BO,BB:KMBIN) Growth(%) 25.0 (9.0) 27.4 13.5
(Rs) NetDPS(Rs) 0.9 1.1 1.3 1.3
800
700
600
Profitability&Valuation 2015 2016E 2017E 2018E
500 NIM(%) 4.41 3.72 3.29 3.31
400 RoAE(%) 13.7 12.9 14.3 14.1
300
200
RoAA(%) 2.23 1.68 1.62 1.59
100 P/BV(x) 4.8 5.0 4.4 3.8
0 P/ABV(x) 5.0 5.3 4.5 3.9
Nov15
Jul15

Sep15
Mar15
Jan15

Jan16
May15

PE(x) 37.2 40.8 32.0 28.2

Netdividendyield(%) 0.1 0.2 0.2 0.2

Source:Bloomberg Source:CompanyData;PLResearch

PrabhudasLilladherPvt.Ltd.and/oritsassociates(the'Firm')doesand/orseekstodobusinesswithcompaniescoveredinitsresearchreports.Asaresultinvestorsshouldbeawarethat

theFirmmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthereport.Investorsshouldconsiderthisreportasonlyasinglefactorinmakingtheirinvestmentdecision.
Pleaserefertoimportantdisclosuresanddisclaimersattheendofthereport
 KotakMahindraBank

Exhibit1: Q3FY16FinancialsSteadyperformance
Standalone(Rsmn) Q3FY16 Q3FY15 YoYgr.(%) Q2FY16 QoQgr.(%)
Netinterestincome(NII) 17,66210,594 66.7 16,787 5.2
Otherincome 7,222 4,940 46.2 6,157 17.3
Totalincome 24,88415,534 60.222,945 8.5
Operatingexpenses 12,832 8,160 57.3 12,497 2.7
Staffexpenses 6,182 3,679 68.0 6,230 (0.8)
Otherexpenses 6,650 8,160 (18.5) 6,267 6.1
Operatingprofit 12,052 7,374 63.410,448 15.4
Coreoperatingprofit 11,467 6,914 65.8 9,798 17.0
Totalprovisions 2,353 299 686.8 1,764 33.4
Profitbeforetax 9,700 7,374 31.5 8,684 11.7
Tax 3,352 2,431 37.9 2,989 12.2
Profitaftertax 6,347 7,374 (13.9) 5,695 11.5

Balancesheet(Rsmn)
Deposits 1,309,390730,660 79.21,232,111 6.3
Advances 1,153,450646,410 78.41,116,618 3.3
GrossNPL 26,90312,199 120.5 26,554 1.3
NetNPL 11,108 6,298 76.4 11,676 (4.9)
RestructuredAssets(Rsmn) 3,460 1,591 117.5 4,030 (14.1)

Ratios(%)
Profitabilityratios
RoaA 0.4 0.5 (12) 0.3 2
RoaE 11.1 13.8 1,106 10.2 82
NIM 4.3 4.7 (40) 4.3

AssetQualityratios
GrossNPLratio 2.3 1.9 40 2.4 (5)
NetNPLratio 1.0 1.0 (1) 1.1 (9)
Coverageratio 58.7 48.4 1,034 56.0 268
Rest.assets/Totaladv. 0.3 0.2 5 0.4 (6)

Business&OtherRatios
Lowcostdepositmix 35.0 31.5 350 36.0 (100)
Costincomeratio 51.6 52.5 (96) 54.5 (290)
Nonint.inc/totalincome 29.0 31.8 (278) 26.8 219
Creditdepositratio 88.1 88.5 8,809 90.6 (254)
CAR 15.0 16.7 (170) 14.9 10
TierI 16.2 17.7 (150) 16.1 10

Source:CompanyData,PLResearch
*Pleasenote:YoYfinancialsforBankarenotcomparableonINGKotakmerger

January19,2016 2
 KotakMahindraBank

Exhibit2: Consolidated Loan Book CV/CE, auto and personal loans reported strong
growthduringthequarter
LoanBook(Rsmn) Q3FY16 Q3FY15 YoYgr.(%) Q2FY16 QoQgr.(%)
CV/CE 65,500 50,270 30.3 61,230 7.0
AutoLoans 164,100 141,960 15.6 157,260 4.3
PersonalLoans 88,350 59,680 48.0 81,990 7.8
Homeloans&LAP 223,270 137,380 62.5 216,970 2.9
Corporate 399,880 259,330 54.2 375,690 6.4
BizBanking 233,820 60,790 284.6 226,160 3.4
Agriculture 168,110 108,490 55.0 171,120 (1.8)
Others 68,330 42,680 60.1 56,270 21.4
TotalAdvances 1,411,360 860,580 64.0 1,346,690 4.8

LoanBookmix(%) Q3FY16 Q3FY15 YoY(bps) Q2FY16 QoQ(bps)

CV/CE 4.6 5.8 (1.2) 4.5 0.09
AutoLoans 11.6 16.5 (4.9) 11.7 (0.05)
PersonalLoans 6.3 6.9 (0.7) 6.1 0.17
Homeloans&LAP 15.8 16.0 (0.1) 16.1 (0.29)
Corporate 28.3 30.1 (1.8) 27.9 0.44
BizBanking 16.6 7.1 9.5 16.8 (0.23)
Agriculture 11.9 12.6 (0.7) 12.7 (0.80)
Others 4.8 5.0 (0.1) 4.2 0.66
Source:CompanyData,PLResearch

Exhibit3: Q3FY16 Subsidiary performance Share of bank in total consolidated profits

nowstandsat67%vs65%in3QFY15(alsoaidedbyINGmerger)
ConsolFinancials(Rsmn) Q3FY16 Q3FY15 YoYgr.(%) Q2FY16 QoQgr.(%)
StandaloneBank 6,347 7,374 (13.9) 5,695 11.5
KotakPrime 1,260 1,200 5.0 1,270 (0.8)
KMCC 60 (60) (200.0) 70 (14.3)
KotakSecurities 550 600 (8.3) 780 (29.5)
Internationalsubsidiaries 260 140 85.7 320 (18.8)
KotakAMC 40 (10) (500.0) 230 (82.6)
KotakInvestmentAdvisors (10) 20 (150.0) NA
KotakMahindraInvestments 390 240 62.5 360 8.3
Lendingbusiness 7,607 8,574 (11.3) 6,965 9.2
Flowbusiness,Subsidiaries 1,290 930 38.7 1,760 (26.7)
ConsolPAT(exinsurance) 8,897 9,504 (6.4) 8,725 2.0
Insurance 600 510 17.6 480 25.0
ConsolidatedPAT 9,497 10,014 (5.2) 9,205 3.2
Source:CompanyData,PLResearch

January19,2016 3
 KotakMahindraBank

KeyQ3FY16Concallhighlights:
Updatesonbusinessfrommerger:
Integrationprocessisunderwayandbankexpectstocompletethemergerfully
byAprilMay2016.

LiabilitiesSeeingtractioninSAforerstwhileIVBLwhichsawgrowthof30%vs
40%growthforKotakBank.

Assets/Products Started selling Auto products (Kotak Prime) in eIVBL

branches(312branches)whichwasnotthereintheerstwhileBank.SMEbook
(largelytraderbook)continuestoseetraction,withrobustassetquality.Some
oftheproductshavebeenunifiedinmergedcolikegoldloans,personalloans,
LAP.

Crossselling,customeracquisitionandcost/spacerationalisationhasstarted
yieldingresults.KMBexpectssynergybenefitstofullyshowinFY17.

BalancesheetGrowth/Outlook:
Loan book Loan growth stood at 3.3% QoQ and management suggested
growing the portfolio at 2x the nominal GDP growth. Traction to pickup from
Wholesaleincomingquarters,whileretail/SMEtractionwillcontinue.

CASA CASA ratio currently at 35% and the momentum remains strong. KMB
wouldliketoseeitsCASAmixmovingtowards40%goingahead.

Mortgages/LAPStillseeinggoodgrowthbutcertainsegmentofmarkethave
got aggressive but KMB continues to have stable metrics on LTVs, yields and
assetquality.Historically,60%ofeIVBLbookhasbeenSME/LAP.

Agri KMB was lacking on agriculture financing business, but on merger have
acquired decent agri portfolio offering crop loans, tractor financing & broader
Agri Financing. Crop loans are basically Kisan Credit Card (KCC) with business
being flattish as integration of risk system, credit underwriting etc has taken
time.

Margins:
Marginsarelikelytoremainbetween4.14.3%goingahead.

Fees,Opex&capacitybuilding:
Feesremainstepid(onmergedentity)howevertransactionsvaluehaspicked
upandKMBisconfidenttoreturnfeegrowthbacktotrendlevels.

OpexEmployeecostswereflatsequentiallyonlowermergercostincurredof
Rs130mn(v/sRs630mninQ1FY16)andhoweverotheropexincreasedonhigher
advertisementcosts.

BranchesPlantotakebranchesto1400byDec2017.

January19,2016 4
 KotakMahindraBank

AssetQuality:
Have seen marginal stress from the eIVBL book but total stressed asset book
remainsat6%ofeIVBLsfundbased+nonfundor2.5%ofcombinedbook.

CreditcostCreditcostinQ3FY16was~52bpstoadvances(merged).Outlook:
Havebeenguiding35bpofcreditcostonKMBbook,while5055bpsonVYSBs
asset quality and still maintain the total credit cost guidance of 8085bps for
FY16.

Subsidiaries:
Insurance KMB has contributed ~50% growth to incremental insurance
business,whilealsoofferinsuranceat95%oftheeIVBLbranches.

Kotak Prime Shifting strategy to make Kotak Prime as an asset finance

company catering to financing auto vehicles (so have seen some other
businessesdrawdown).

Digitalinitiatives:
LaunchedBharatBankingappwhichdoesnotrequireinternetconnectionand
cando23differenttransactionsincl.smallvaluefundtransfer.

7%marketshareinmobilebankingtransactions.

Exhibit4: Marginsremainedstableat4.3%

NIM(%)

6.00%

5.50%
5.0% 5.0%
5.00% 4.7% 4.7% 4.8% 4.8% 4.7%
4.6%
4.9% 5.0%
4.8% 4.8% 4.9% 4.9% 4.3%
4.50% 4.7% 4.7% 4.2%

4.00% 4.3%

3.50%
1Q12
2Q12
3Q12
4Q12
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
4Q14
1Q15
2Q15
3Q15
4Q15
1Q16
2Q16
3Q16

Source:CompanyData,PLResearch

January19,2016 5
 KotakMahindraBank

Exhibit5: CASAgrowthwasmainlyledbySAdepositswhileCAmixdeclined

CASA(%)

40.0%
36.0% 36.0%
35.0%
35.0% 32.0% 31.9% 31.1%
29.2% 29.2% 34.0%
30.0% 27.0%28.0% 27.0% 31.0% 31.5%
28.8% 29.7%
25.0% 26.5%
26.0% 25.9%
20.0%

15.0%

1Q12
2Q12
3Q12
4Q12
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
4Q14
1Q15
2Q15
3Q15
4Q15
1Q16
2Q16
3Q16

Source:CompanyData,PLResearch

Exhibit6: Credit cost steady on lower slippages; FY16 guidance Exhibit7: AssetqualityremainsstableasmostpaintakeninQ1FY16
maintainedat8085bp
GrossNPA(%) NetNPA(%)
1.50% CreditCost 1.3% 2.5%
1.1%
2.0%
1.00%
0.6% 1.5%
0.5% 0.5% 0.5% 0.5%
0.50% 0.7% 0.7% 1.0%
0.2% 0.2%
0.0% 0.4% 0.4%
0.3% 0.5%
0.00% 0.1% 0.2%
0.0% 0.0%
0.3%
4Q11
1Q12
2Q12
3Q12
4Q12
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
4Q14
1Q15
2Q15
3Q15
4Q15
1Q16
2Q16
3Q16
0.50%
1Q12
2Q12
3Q12
4Q12
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
4Q14
1Q15
2Q15
3Q15
4Q15
1Q16
2Q16
3Q16

Source:CompanyData,PLResearch
Source:CompanyData,PLResearch

Exhibit8: Subsidiaryperformancecontinuetoholdup

KotakPrime KotakSec KMCC KotakLife AMC Intnlsubs KIAL KIL

4,500

3,500

2,500
Rsm

1,500

500

(500)
2Q13

3Q13

4Q13

1Q14

2Q14

3Q14

4Q14

1Q15

2Q15

3Q15

4Q15

1Q16

2Q16

3Q16

Source:CompanyData,PLResearch

January19,2016 6
 KotakMahindraBank

Exhibit9: ConsolidatedROEsMergersynergiestoreflectinreturnratiosinFY17
ROADecomposition 2011 2012 2013 2014 2015 2016E 2017E 2018E
NetInterestIncome 5.62% 4.51% 4.38% 4.50% 4.54% 3.96% 3.60% 3.71%
Fees 2.61% 2.58% 2.02% 2.01% 2.50% 2.34% 2.10% 2.16%
Investmentprofits 0.23% 0.14% 0.19% 0.20% 0.31% 0.24% 0.20% 0.19%
Netrevenues/Assets 8.46% 7.24% 6.60% 6.70% 7.35% 6.55% 5.90% 6.06%
OperatingExpense 4.39% 3.73% 3.33% 3.25% 3.68% 3.21% 2.82% 2.86%
Provisions 0.29% 0.14% 0.22% 0.30% 0.16% 0.62% 0.40% 0.46%
Taxes 1.18% 1.09% 1.01% 1.06% 1.20% 0.88% 0.87% 0.89%
TotalCosts 5.85% 4.97% 4.56% 4.61% 5.03% 4.72% 4.09% 4.21%
ROA 2.61% 2.27% 2.04% 2.09% 2.32% 1.83% 1.81% 1.85%
Equity/Assets 17.03% 15.98% 14.49% 15.35% 16.50% 13.51% 11.74% 11.76%
ROE 15.3% 14.2% 14.1% 13.6% 14.0% 13.6% 15.4% 15.8%

Source:CompanyData,PLResearch

Exhibit10: WemaintainAccumulatewithincreasedTPofRs725(from715)aswerollover
toSep17adjustedbookforBank&Kotakprime,whileonSOTPbasisforsubsidiaries
Value(Rsm) PerShare(Rs) ValuationBasis
KotakSecurities 91,264 50 20xSep17Earnings
AssetManagement 32,496 18 6%ofAUMs
KMCC 6,018 3 20xSep17Earnings
Internationalsubsidiaries 14,779 8 2.5xSep17book
Others 38,928 21 20xSep17Earnings
Insurance 32,192 18 P/NBAP
Total 215,675 118
Exinsurance 183,484 100

TotalSubsidiaryvaluation 215,675 118
Lendingbizvaluation 1,111,117 607 4.2xSep17book
Sep17PT 725

Source:CompanyData,PLResearch

January19,2016 7
 KotakMahindraBank

IncomeStatement(Rsm) QuarterlyFinancials(Rsm)
Y/eMarch 2015 2016E 2017E 2018E Y/eMarch Q4FY15 Q1FY16 Q2FY16 Q3FY16
Int.EarnedfromAdv. 104,734 118,565 132,571 148,636 InterestIncome 25,809 39,914 40,057 41,217
Int.EarnedfromInvt. 22,158 23,931 25,750 27,707 InterestExpense 14,578 23,932 23,269 23,555
Others 354 390 460 547 NetInterestIncome 11,231 15,982 16,787 17,662
TotalInterestIncome 127,246 142,886 158,781 176,889 NonInterestIncome 6,681 5,924 6,157 7,222
Interestexpense 72,432 76,639 81,432 86,814 CEB 3,890 4,180 4,570 4,660
NII 54,815 66,247 77,349 90,075 Treasury 1,640 1,380 910
Growth(%) 12.5 20.9 16.8 16.5 NetTotalIncome 17,912 21,906 22,945 24,884
TreasuryIncome 3,761 4,134 4,546 4,998 OperatingExpenses 9,306 15,937 12,497 12,832
NTNII 30,103 39,499 47,735 56,904 EmployeeExpenses 3,789 9,288 6,230 6,182
NonInterestIncome 33,864 43,634 52,281 61,901 OtherExpenses 5,517 6,649 6,267 6,650
TotalIncome 161,110 186,520 211,062 238,791 OperatingProfit 8,607 5,970 10,448 12,052
Growth(%) 16.4 15.8 13.2 13.1 CoreOperatingProfit 6,967 4,590 9,538 12,052
OperatingExpense 44,402 54,577 63,907 75,524 Provisions 669 3,053 1,764 2,353
OperatingProfit 44,277 55,304 65,723 76,453 Loanlossprovisions 619 2,662 1,891 1,483
Growth(%) 18.4 24.9 18.8 16.3 InvestmentDepreciation 50 364 (140) 839
NPAProvisions 2,757 8,807 9,828 10,178 Profitbeforetax 7,937 2,917 8,684 9,700
InvestmentProvisions (1,072) 1,537 (1,162) 1,536 Tax 2,667 1,019 2,989 3,352
TotalProvisions 1,904 10,585 8,931 12,006 PATbeforeEO 5,271 1,898 5,695 6,347
PBT 42,373 44,718 56,792 64,446 Extraordinaryitem
TaxProvisions 14,431 14,578 18,453 20,959 PAT 5,271 1,898 5,695 6,347

EffectiveTaxRate(%) 34.1 32.6 32.5 32.5 KeyRatios

PAT 27,746 29,934 38,122 43,260 Y/eMarch 2015 2016E 2017E 2018E
Growth(%) 25.4 7.9 27.4 13.5 CMP(Rs) 667 667 667 667

BalanceSheet(Rsm) EquityShrs.Os.(m) 1,545 1,831 1,831 1,831

Y/eMarch 2015 2016E 2017E 2018E MarketCap(Rsm) 1,030,936 1,221,679 1,221,679 1,221,679
ParValue 5 5 5 5 M/CaptoAUM(%) 74.7 55.9 48.6 41.8
No.ofequityshares 1,545 1,831 1,831 1,831 EPS(Rs) 18.0 16.4 20.8 23.6
Equity 7,724 9,153 9,153 9,153 BookValue(Rs) 138 133 153 176
Networth 216,814 247,938 285,393 328,148 Adj.BV(100%)(Rs) 134 127 147 170
Adj.Networth 209,881 235,618 273,637 316,746 P/E(x) 37.2 40.8 32.0 28.2
Deposits 748,603 1,362,458 1,607,700 1,897,086 P/BV(x) 4.8 5.0 4.4 3.8
Growth(%) 26.7 82.0 18.0 18.0 P/ABV(x) 5.0 5.3 4.5 3.9
LowCostdeposits 272,174 483,672 586,810 711,407 DPS(Rs) 0.9 1.1 1.3 1.3
%oftotaldeposits 36.4 35.5 36.5 37.5 DividendYield(%) 0.1 0.2 0.2 0.2

TotalLiabilities 1,380,689 2,184,300 2,515,707 2,921,069 Profitability(%)

NetAdvances 907,792 1,501,884 1,795,238 2,132,648 Y/eMarch 2015 2016E 2017E 2018E
Growth(%) 23.5 65.4 19.5 18.8 NIM 4.4 3.7 3.3 3.3
Investments 333,476 489,400 514,773 564,306 RoAA 2.2 1.7 1.6 1.6
TotalAssets 1,380,689 2,184,300 2,515,707 2,921,069 RoAE 13.7 12.9 14.3 14.1
Source:CompanyData,PLResearch.

Efficiency
*PleasenoteConsolidatedFinancialsareexinsurance Y/eMarch 2015 2016E 2017E 2018E
CostIncomeRatio(%) 50.1 49.7 49.3 49.7
CDRatio(%) 121.3 110.2 111.7 112.4
BusinessperEmp.(Rsm) 53 52 56 61
ProfitperEmp.(Rslacs) 8.9 5.5 6.3 6.5
BusinessperBranch(Rsm) 2,422 2,387 2,618 2,878
ProfitperBranch(Rsm) 41 25 29 31

AssetQuality
Y/eMarch 2015 2016E 2017E 2018E
GrossNPAs(Rsm) 13,848 21,407 24,346 26,984
NetNPAs(Rsm) 6,932 12,320 11,757 11,402
Gr.NPAstoGrossAdv.(%) 1.5 1.4 1.4 1.3
NetNPAstoNetAdv.(%) 0.8 0.8 0.7 0.5
NPACoverage(%) 49.9 42.4 51.7 57.7
Source:CompanyData,PLResearch.

January19,2016 8
 KotakMahindraBank

PrabhudasLilladherPvt.Ltd.

3rdFloor,SadhanaHouse,570,P.B.Marg,Worli,Mumbai400018,India
Tel:(9122)66322222Fax:(9122)66322209
RatingDistributionofResearchCoverage PLsRecommendationNomenclature

60% BUY : Over15%OutperformancetoSensexover12months

47.7% Accumulate : OutperformancetoSensexover12months
50% 41.1%
%ofTotalCoverage

Reduce : UnderperformancetoSensexover12months
40%
Sell : Over15%underperformancetoSensexover12months
30%
TradingBuy : Over10%absoluteupsidein1month
20% 11.2%
TradingSell : Over10%absolutedeclinein1month
10%
0.0% NotRated(NR) : Nospecificcallonthestock
0%
BUY Accumulate Reduce Sell UnderReview(UR) : Ratinglikelytochangeshortly

DISCLAIMER/DISCLOSURES
ANALYSTCERTIFICATION
We/I, Mr. Nitin Kumar (B.E, PGDM, CFA), Mr. Pritesh Bumb (MBA, M.com), Research Analysts, authors andthe names subscribed to this report, hereby certify that all of the views expressed in this research report
accuratelyreflectourviewsaboutthesubjectissuer(s)orsecurities.Wealsocertifythatnopartofourcompensationwas,is,orwillbedirectlyorindirectlyrelatedtothespecificrecommendation(s)orview(s)inthis
report.
Terms&conditionsandotherdisclosures:
PrabhudasLilladherPvt.Ltd,Mumbai,India(hereinafterreferredtoasPL)isengagedinthebusinessofStockBroking,PortfolioManager,DepositoryParticipantanddistributionforthirdpartyfinancialproducts.PLisa
subsidiaryofPrabhudasLilladherAdvisoryServicesPvtLtd.whichhasitsvarioussubsidiariesengagedinbusinessofcommoditybroking,investmentbanking,financialservices(marginfunding)anddistributionofthird
partyfinancial/otherproducts,detailsinrespectofwhichareavailableatwww.plindia.com
ThisdocumenthasbeenpreparedbytheResearchDivisionofPLandismeantforusebytherecipientonlyasinformationandisnotforcirculation.Thisdocumentisnottobereportedorcopiedormadeavailableto
otherswithoutpriorpermissionofPL.Itshouldnotbeconsideredortakenasanoffertosellorasolicitationtobuyorsellanysecurity.
Theinformationcontainedinthisreporthasbeenobtainedfromsourcesthatareconsideredtobereliable.However,PLhasnotindependentlyverifiedtheaccuracyorcompletenessofthesame.NeitherPLnoranyofits
affiliates,itsdirectorsoritsemployeesacceptsanyresponsibilityofwhatsoevernaturefortheinformation,statementsandopiniongiven,madeavailableorexpressedhereinorforanyomissiontherein.
Recipientsofthisreportshouldbeawarethatpastperformanceisnotnecessarilyaguidetofutureperformanceandvalueofinvestmentscangodownaswell.Thesuitabilityorotherwiseofanyinvestmentswilldepend
upontherecipient'sparticularcircumstancesand,incaseofdoubt,adviceshouldbesoughtfromanindependentexpert/advisor.
Either PL or its affiliates or itsdirectorsor its employees or itsrepresentatives or its clientsortheir relativesmay have position(s), make market, act as principal or engage in transactionsof securitiesofcompanies
referredtointhisreportandtheymayhaveusedtheresearchmaterialpriortopublication.
PLmayfromtimetotimesolicitorperforminvestmentbankingorotherservicesforanycompanymentionedinthisdocument.
PLisintheprocessofapplyingforcertificateofregistrationasResearchAnalystunderSecuritiesandExchangeBoardofIndia(ResearchAnalysts)Regulations,2014
PLsubmitsthatnomaterialdisciplinaryactionhasbeentakenonusbyanyRegulatoryAuthorityimpactingEquityResearchAnalysisactivities.
PLoritsresearchanalystsoritsassociatesorhisrelativesdonothaveanyfinancialinterestinthesubjectcompany.
PLoritsresearchanalystsoritsassociatesorhisrelativesdonothaveactual/beneficialownershipofonepercentormoresecuritiesofthesubjectcompanyattheendofthemonthimmediatelyprecedingthedateof
publicationoftheresearchreport.
PLoritsresearchanalystsoritsassociatesorhisrelativesdonothaveanymaterialconflictofinterestatthetimeofpublicationoftheresearchreport.
PLoritsassociatesmighthavereceivedcompensationfromthesubjectcompanyinthepasttwelvemonths.
PLoritsassociatesmighthavemanagedorcomanagedpublicofferingofsecuritiesforthesubjectcompanyinthepasttwelvemonthsormandatedbythesubjectcompanyforanyotherassignmentinthepasttwelve
months.
PLoritsassociatesmighthavereceivedanycompensationforinvestmentbankingormerchantbankingorbrokerageservicesfromthesubjectcompanyinthepasttwelvemonths.
PLoritsassociatesmighthavereceivedanycompensationforproductsorservicesotherthaninvestmentbankingormerchantbankingorbrokerageservicesfromthesubjectcompanyinthepasttwelvemonths
PLoritsassociatesmighthavereceivedanycompensationorotherbenefitsfromthesubjectcompanyorthirdpartyinconnectionwiththeresearchreport.
PL encourages independence in research reportpreparation and strivesto minimize conflict inpreparationof research report. PL or its analystsdid not receive any compensationor other benefits from the subject
Companyorthirdpartyinconnectionwiththepreparationoftheresearchreport.PLoritsResearchAnalystsdonothaveanymaterialconflictofinterestatthetimeofpublicationofthisreport.
ItisconfirmedthatMr.NitinKumar(B.E,PGDM,CFA),Mr.PriteshBumb(MBA,M.com),ResearchAnalystsofthisreporthavenotreceivedanycompensationfromthecompaniesmentionedinthereportinthepreceding
twelvemonths
CompensationofourResearchAnalystsisnotbasedonanyspecificmerchantbanking,investmentbankingorbrokerageservicetransactions.
TheResearchanalystsforthisreportcertifiesthatalloftheviewsexpressedinthisreportaccuratelyreflecthisorherpersonalviewsaboutthesubjectcompanyorcompaniesanditsortheirsecurities,andnopartofhis
orhercompensationwas,isorwillbe,directlyorindirectlyrelatedtospecificrecommendationsorviewsexpressedinthisreport.
Theresearchanalystsforthisreporthasnotservedasanofficer,directororemployeeofthesubjectcompanyPLoritsresearchanalystshavenotengagedinmarketmakingactivityforthesubjectcompany
Oursalespeople,traders,andotherprofessionalsoraffiliatesmayprovideoralorwrittenmarketcommentaryortradingstrategiestoourclientsthatreflectopinionsthatarecontrarytotheopinionsexpressedherein,
andourproprietarytradingandinvestingbusinessesmaymakeinvestmentdecisionsthatareinconsistentwiththerecommendationsexpressedherein.Inreviewingthesematerials,youshouldbeawarethatanyorallo
theforegoing,amongotherthings,maygiverisetorealorpotentialconflictsofinterest.
PLanditsassociates,theirdirectorsandemployeesmay(a)fromtimetotime,havealongorshortpositionin,andbuyorsellthesecuritiesofthesubjectcompanyor(b)beengagedinanyothertransactioninvolving
suchsecuritiesandearnbrokerageorothercompensationoractasamarketmakerinthefinancialinstrumentsofthesubjectcompanyoractasanadvisororlender/borrowertothesubjectcompanyormayhaveany
otherpotentialconflictofinterestswithrespecttoanyrecommendationandotherrelatedinformationandopinions.
DISCLAIMER/DISCLOSURES(FORUSCLIENTS)
ANALYSTCERTIFICATION
Theresearchanalysts,withrespecttoeachissueranditssecuritiescoveredbytheminthisresearchreport,certifythat:Alloftheviewsexpressedinthisresearchreportaccuratelyreflecthisorherortheirpersonal
viewsaboutalloftheissuersandtheirsecurities;andNopartofhisorherortheircompensationwas,isorwillbedirectlyrelatedtothespecificrecommendationorviewsexpressedinthisresearchreport
Terms&conditionsandotherdisclosures:
ThisresearchreportisaproductofPrabhudasLilladherPvt.Ltd.,whichistheemployeroftheresearchanalyst(s)whohaspreparedtheresearchreport.Theresearchanalyst(s)preparingtheresearchreportis/are
residentoutsidetheUnitedStates(U.S.)andarenotassociatedpersonsofanyU.S.regulatedbrokerdealerandthereforetheanalyst(s)is/arenotsubjecttosupervisionbyaU.S.brokerdealer,andis/arenotrequiredto
satisfytheregulatorylicensingrequirementsofFINRAorrequiredtootherwisecomplywithU.S.rulesorregulationsregarding,amongotherthings,communicationswithasubjectcompany,publicappearancesand
tradingsecuritiesheldbyaresearchanalystaccount.
This report is intended for distribution by Prabhudas Lilladher Pvt. Ltd. only to "Major Institutional Investors" as defined by Rule 15a6(b)(4) of the U.S. Securities and Exchange Act, 1934 (the Exchange Act) and
interpretationsthereofbyU.S.SecuritiesandExchangeCommission(SEC)inrelianceonRule15a6(a)(2).IftherecipientofthisreportisnotaMajorInstitutionalInvestorasspecifiedabove,thenitshouldnotactupon
thisreportandreturnthesametothesender.Further,thisreportmaynotbecopied,duplicatedand/ortransmittedonwardtoanyU.S.person,whichisnottheMajorInstitutionalInvestor.
In reliance on the exemption from registration provided by Rule 15a6 of the Exchange Act and interpretations thereof by the SEC in order to conduct certain business with Major Institutional Investors, Prabhudas
LilladherPvt.Ltd.hasenteredintoanagreementwithaU.S.registeredbrokerdealer,MarcoPoloSecuritiesInc.("MarcoPolo").
TransactionsinsecuritiesdiscussedinthisresearchreportshouldbeeffectedthroughMarcoPolooranotherU.S.registeredbrokerdealer.

RADHAKRISHNA
Digitally signed by RADHAKRISHNAN SREESANKAR

January19,2016 DN: c=IN, o=Personal, cn=RADHAKRISHNAN

SREESANKAR,
serialNumber=8859da2df03122989b585ad520865a4f59
9
N SREESANKAR be69fbc1b7ba2c5315941f987f41de, postalCode=400104,
st=MAHARASHTRA
Date: 2016.01.19 11:11:19 +05'30'