05march 2019 - India - Daily PDF

INDIA DAILY
March 5, 2019 India 1-Mar 1-day 1-mo 3-mo

Sensex 36,064 0.5 (1.4) (0.2)
Nifty 10,864 0.7 (0.4) (0.1)
Contents Global/Regional indices

Dow Jones 25,820 (0.8) 1.6 3.2
Daily Alerts Nasdaq Composite 7,578 (0.2) 2.4 5.9
Results FTSE 7,134 0.4 (0.6) 3.1

Nikkei 21,771 (0.2) 4.4 (0.7)
ABB: 'New ABB' also looks expensive
Hang Seng 28,960 0.5 3.5 8.0
 CY2018 reported steady growth and margin print; order inflows were up a
KOSPI 2,181 (0.4) (1.0) 3.8
strong 16% yoy
Value traded – India
 Divestment aimed at positioning ABB as the leader in digitalization
Cash (NSE+BSE) 388 347 239
 CY2019 continuing business estimates cut by ~11%; revise FV to Rs1,005 Derivatives (NSE) 4,081 9,145 4,392
from Rs1,040
Deri. open interest 2,653 2,752 2,770
Company alerts
Infosys: CEO meeting notes
Forex/money market
 EBIT margin - intent to defend band will be tested against the reality of
Change, basis points
many headwinds
1-Mar 1-day 1-mo 3-mo
 Infosys has a fair share of wins in a good demand environment Rs/US$ 71.0 12 (50) 34
 Strong depth of senior leadership augmented with focused external hires 10yr govt bond, % 7.6 - (17) (12)
Coal India: Dispatches improve Net investment (US$ mn)
28-Feb MTD CYTD

 Dispatch growth improves 3% yoy in February 2019; YTD growth at 4.5%
FIIs 121 #N/A 2,295
ahead of estimate
MFs (733) #N/A 1,310
 Strong premium for e-auction although drop in sales worrisome, inventory
Top movers
improves in West
Change, %
 Improved pricing and attractive valuation, maintain BUY Best performers 1-Mar 1-day 1-mo 3-mo
Biocon: AG for Humalog, and sub-cu for Herceptin YES IN Equity 238 2.8 34.9 37.0
 Lilly launches Humalog AG, while Roche set to launch Herceptin sub-cu in RECL IN Equity 137 0.7 17.6 30.7
the US POWF IN Equity 113 1.2 12.7 22.9
UPLL IN Equity 870 (0.9) 9.3 16.1

 Humira and Lantus biosimilars set the pricing trend in the EU
TECHM IN Equity 832 0.2 10.8 14.4
 Risk-reward unfavorable - SELL
Worst performers
Sector alerts RCOM IN Equity 7 1.5 18.9 (59.4)
Automobiles & Components: Analysis of state-wise tractor data RELI IN Equity 125 2.0 (44.9) (59.2)
 Key insights from state-wise tractor data RPWR IN Equity 12 14.9 2.9 (57.6)
UT IN Equity 1 3.8 (3.6) (41.3)

 Maintain positive view on tractor industry; reiterate BUY rating on Escorts
IDBI IN Equity 44 3.5 (5.7) (26.9)
and M&M
Automobiles & Components: Muted trends in auto industry continue
 Passenger vehicles: Low single-digit decline in industry volumes in January 2019
 M&M’s auto volumes grow by 10% yoy; tractor volumes decline yoy in
February 2019
 MHCV industry volumes remain under pressure in February 2019 due to
high base
 Royal Enfield volumes down 14% yoy in February 2019
Economy alerts
Economy: GST revenues remain range-bound
 January GST collections at Rs972 bn
 Central government will meet FY2019RE GST estimates through
kspcg.research@kotak.com
compensation cess funds Contact: +91 22 6218 6427
For Private Circulation Only. FOR IMPORTANT INFORMATION ABOUT KOTAK SECURITIES’ RATING SYSTEM AND OTHER DISCLOSURES.
REFER TO THE END OF THIS MATERIAL.
SELL
ABB (ABB)
Capital Goods MARCH 05, 2019
RESULT
Coverage view: Neutral
‘New ABB’ also looks expensive. A compelling digital automation offering Price (`): 1,241
(technology, references, open platform, partnerships) is reflecting in scale-up in ABB’s Fair Value (`): 1,005
customer engagement levels and in higher ~20% revenue share of services. The overall
BSE-30: 36,064
automation business scores low on growth (10% yoy growth in annual revenues, and
order backlog) and operating metrics (flattish yoy sub 7% EBITDA margin, high teens
pre-tax business returns). We expect sale of PG business to yield ~Rs195/share special
dividend in CY2020 (28X trailing earnings); cut fair value to Rs1,005 net of roll-forward.
Company data and valuation summary
ABB
Stock data Forecasts/Valuations 2019E 2020E 2021E
52-week range (Rs) (high,low) 1,549-1,123 EPS (Rs) 12.0 17.3 24.9
Market Cap. (Rs bn) 262.9 EPS growth (%) 12.7 44.1 44.0
Shareholding pattern (%) P/E (X) 103.4 71.8 49.9
Promoters 75.0 Sales (Rs bn) 66.9 76.3 91.4
FIIs 3.2 Net profits (Rs bn) 2.5 3.7 5.3
MFs 6.5 EBITDA (Rs bn) 4.6 5.5 7.4
Price performance (%) 1M 3M 12M EV/EBITDA (X) 54.2 44.0 31.6
Absolute (2.5) (11.9) (18.7) ROE (%) 6.7 8.6 11.1
Rel. to BSE-30 (1.4) (11.6) (23.2) Div. Yield (%) 0.4 0.5 16.1
CY2018 reported steady growth and margin print; order inflows were up a strong 16% yoy
ABB India reported CY2018 revenues of Rs67 bn, up 10% yoy on like-for-like basis after
classifying Power Grids segment as discontinued business in light of the global divestment of this
segment. Under the new structure, order inflows stood at Rs67 bn for the year, up 16% yoy led
by infrastructure, transportation and urbanization. Order book as of December 2018 grew 10%
yoy. With Power Grids segment discontinued, the remaining business has a higher proportion
of short-cycle orders as evident from relative scale of revenue, order inflow and order book. The
business also has a higher ~20% share of revenues coming from services. EBITDA margin for
CY2018 was flat yoy at 6.8%. PAT before discontinued operations grew 13% yoy.
Divestment aimed at positioning ABB as the leader in digitalization
The traditional verticals of ABB were Utilities, Industry and Transportation & Infrastructure. With
the global divestment of Power Grids business, the offerings to utilities will be through short-
cycle products such as switchgears and component supply to OEMs. Going forward, the key
focus areas are digitalization offerings catering mainly to industry, and electric mobility solutions.
ABB Ability witnessed good success in CY2018 with digital offerings for customers in cement,
steel and tire industries. Transportation business won ABB’s largest traction equipment order
worth Rs2.7 bn in India for supplying converters of electric locomotives to Diesel Locomotive
Works (DLW). During the year, ABB opened two smart factories in Nashik and Bengaluru for
power distribution products. The company also launched energy efficient IE4 motors for the first
time in India. These steps highlight that ABB is positioning itself as the one-stop solution
provider for Industry 4.0 where the focus will be on energy efficiency, automation and analytics. Aditya Mongia
CY2019 continuing business estimates cut by ~11%; revise FV to Rs1,005 from Rs1,040
We overlook strong 4QCY18 margin print as overall CY2018 performance of continuing Ajinkya Bhat
business appears muted on business growth, margin as well as returns versus the discontinued
Power Grids business. We arrive at 28X justified multiple for the forward earnings of continuing
business and use a similar multiple on trailing earnings for valuing discontinued Power Grids
business. We assume the sale proceeds to yield Rs195 per share of additional special dividend in
CY2020. Weakness in results for automation business yields 11% cut in CY2019 estimates.
Contact: +91 22 6218 6427
For Private Circulation Only. FOR IMPORTANT INFORMATION ABOUT KOTAK SECURITIES’ RATING SYSTEM AND OTHER DISCLOSURES, REFER TO THE END OF THIS MATERIAL.
ABB Capital Goods
Exhibit 1: Strong growth and margin improvement in 4QCY18 driven by short-cycle orders post discontinuation of Power Grids segment
ABB 4QCY18 – key numbers, December calendar year-ends (Rs mn)
% change
4QCY18 4QCY17 3QCY18 yoy qoq CY2018 CY2017 % change CY2019E CY2018 % change
Sales 19,663 17,088 14,916 15 32 66,901 60,937 10 76,254 66,901 14
Expenses (17,509) (15,632) (14,263) 12 23 (62,323) (56,792) 10 (70,750) (62,323) 14
Stock (300) 87 523 504 425 - 504
Raw material cost (12,953) (11,965) (10,281) 8 26 (45,640) (41,455) 10 (48,421) (45,640) 6
Employee expenses (1,005) (1,113) (1,365) (10) (26) (5,295) (5,187) 2 (4,206) (5,295) (21)
Other expenses (3,251) (2,641) (3,140) 23 4 (11,892) (10,575) 12 (18,123) (11,892) 52
EBITDA 2,154 1,456 654 48 230 4,578 4,146 10 5,504 4,578 20
Other income 160 167 269 (4) (41) 840 777 8 1,047 840 25
Interest (53) (136) (137) (61) (62) (539) (572) (6) (101) (539) (81)
Depreciation (239) (277) (236) (14) 1 (928) (1,012) (8) (984) (928) 6
PBT 2,023 1,211 549 67 268 3,951 3,338 18 5,466 3,951 38
Tax (736) (394) (189) 87 289 (1,410) (1,084) 30 (1,804) (1,410) 28
Net profit 1,286 816 360 58 257 2,542 2,255 13 3,662 2,542 44
Discontinued business PAT 693 899 723 2,567 1,945 32 2,567 2,567
Reported PAT 1,979 1,715 1,083 15 83 5,109 4,200 22 6,229 5,109 22
Key ratios (%)

Raw material/ Sales 67.4 69.5 65.4 67.5 67.3 63.5 67.5
Employee exp./ Sales 5.1 6.5 9.1 7.9 8.5 5.5 7.9
Other exp./ Sales 16.5 15.5 21.1 17.8 17.4 23.8 17.8
EBITDA margin 11.0 8.5 4.4 6.8 6.8 7.2 6.8
PBT Margin 10.3 7.1 3.7 5.9 5.5 7.2 5.9
PAT Margin 6.5 4.8 2.4 3.8 3.7 4.8 3.8
Tax rate 36.4 32.6 34.4 35.7 32.5 33.0 35.7
EPS 6.1 3.9 1.7 57.6 257.2 12.0 10.6 12.7 17.3 12.0 44.1
Order details
(a) 19,000 16,180 NA 17.4 NA 67,290 57,840 16.3 81,162 67,290 20.6
Order booking
(a) 42,270 38,350 NA 10.2 NA 42,270 38,350 10.2 53,325 42,270 26.2
Order backlog
Notes:
(a) After the discontinuation of Power Grids business, order book and order backlog numbers have been disclosed for 4QCY18, 4QCY17, CY2018 and
CY2017 on like-for-like basis for the continuing segments. Such disclosure has not been provided for 3QCY18 and 9MCY18.
Source: Company, Kotak Institutional Equities estimates
KOTAK INSTITUTIONAL EQUITIES RESEARCH 3

Capital Goods ABB
Exhibit 2: Strong growth was seen across all continuing segments; services now form a higher 18-20% share of revenues
ABB’s 4QCY18 segmental results (adjusted)(a) – key numbers, December calendar year-ends (Rs mn)
% change
4QCY18 4QCY17 3QCY18 yoy qoq CY2018 CY2017 % change CY2019E CY2018 % change
Revenues
Robotics & Motion 6,981 5,318 5,920 31.3 17.9 25,022 18,711 33.7 27,300 25,022 9.1
Electrification Products 7,480 6,332 5,711 18.1 31.0 26,161 23,574 11.0 29,275 26,161 11.9
Industrial Automation 5,155 4,687 3,455 10.0 49.2 15,400 13,620 13.1 17,935 15,400 16.5
Others 1,284 1,520 745 (15.5) 72.4 3,715 7,646 (51.4) 3,781 3,715 1.8
Less: inter-segmental (1,237) (769) (914) 60.8 35.4 (3,396) (2,613) 30.0 (2,037) (3,396) (40.0)
Net Sales 19,663 17,088 14,916 15.1 31.8 66,901 60,937 9.8 76,254 66,901 14.0
EBIT
Robotics & Motion 749 540 518 38.9 45 2,205 1,628 35.5 2,512 2,205 13.9
Electrification Products 756 924 493 (18) 53 2,496 2,812 (11.2) 2,927 2,496 17.3
Industrial Automation 725 881 399 (17.7) 82 1,899 1,700 11.7 2,242 1,899 18.0
Total 2,230 2,344 1,410 (4.9) 58.2 6,600 6,140 7.5 7,681 6,600 16.4
Interest expense (53) (136) (137) (61.1) (61.6) (539) (572) (5.8) (101) (539) (81.2)
Unallocated (155) (998) (724) (84.5) (78.6) (2,110) (2,229) (5.3) (2,114) (2,110) 0.2
Total Profit Before Tax 2,023 1,211 549 67.1 268.2 3,951 3,338 18.4 5,466 3,951 38.3
EBIT margin (%)

Robotics & Motion 10.7 10.1 8.8 8.8 8.7 9.2 8.8
Electrification Products 10.1 14.6 8.6 9.5 11.9 10.0 9.5
Industrial Automation 14.1 18.8 11.5 12.3 12.5 12.5 12.3
Notes:
(a) Reported historical gross segmental revenues have been adjusted by proportionately allocating excise duty in order to make them comparable with
the CY2018 numbers net of GST.
4 KOTAK INSTITUTIONAL EQUITIES RESEARCH

ABB Capital Goods
Exhibit 3: Balance sheet details of ABB India, December calendar year-ends, 2014-18 (Rs mn)
CY2014 1HCY15 CY2015 1HCY16 CY2016 1HCY17 CY2017 1HCY18 CY2018

Shareholders funds 28,120 29,148 30,086 31,570 32,867 33,534 36,069 37,101 40,073
Share capital 424 424 424 424 424 424 424 424 424
Reserves & surplus 27,696 28,724 29,662 31,146 32,443 33,110 35,645 36,678 39,649
Loan funds 3,711 6,713 6,000 6,151 6,000 6,000 6,041 40 20
Deferred tax liability (152) (192) (490) (538) (1,304) (1,262) (1,173) (1,151) (1,150)
Total sources of funds 31,678 35,670 35,596 37,183 37,564 38,272 40,937 35,990 38,944
Fixed assets 14,315 13,649 13,427 13,192 13,227 13,028 13,351 13,746 9,762
Investments 165 164 164 163 163 162 2,706 2,635 2
Cash & bank balances 2,260 2,295 5,736 7,205 11,892 13,355 14,917 13,293 14,751
Current assets 51,325 54,022 54,272 51,670 50,727 53,003 56,733 62,204 37,083
Inventories 8,938 10,480 9,396 10,302 9,403 10,525 11,536 13,124 9,279
Sundry debtors 31,575 32,333 33,909 31,106 29,707 28,265 27,641 29,256 16,869
Loans & advances 6,790 7,226 7,003 6,657 4,797 6,652 8,069 10,294 3,097
Other current assets 4,022 3,982 3,964 3,605 6,820 7,561 9,488 9,530 7,839
Current liabilities & provisions 36,386 34,460 38,003 35,046 38,445 41,276 46,770 55,887 29,448
Current liabilities 32,862 31,732 33,740 31,372 34,899 37,898 43,198 52,337 26,791
Provisions 3,524 2,728 4,263 3,674 3,546 3,379 3,572 3,551 2,657
Net working capital (excl. cash) 14,939 19,563 16,269 16,624 12,282 11,727 9,963 6,317 7,635
Assets of discontinued operations (net) 6,795
Total application of funds 31,678 35,670 35,596 37,183 37,564 38,272 40,937 35,990 38,944
Net working capital (as days of sales)

Current assets 242 252 243 222 214 216 228 228 139
Inventories 42 49 42 44 40 43 46 48 35
Sundry debtors 149 151 152 134 125 115 111 107 63
Loans & advances 32 34 31 29 20 27 32 38 12
Other current assets 19 19 18 15 29 31 38 35 29
Current liabilities & provisions 172 161 170 151 162 168 188 205 111
Current liabilities 155 148 151 135 147 155 174 192 101
Provisions 17 13 19 16 15 14 14 13 10
Net working capital (excl. cash) 71 91 73 71 52 48 40 23 29
Source: Company, Kotak Institutional Equities
Exhibit 4: We arrive at a justified one-year forward P/E multiple of 28X for ABB India’s continuing business
Justified multiple framework for ABB India, December calendar year-ends
Inputs for growth and terminal phase Inputs for cash conversion
Growth phase PAT CAGR (%) 22.0 PAT margin (%) 6.9
No. of years in initial growth phase (Growth_years) 10.0 Interest rate (%) 10.0
Terminal growth rate (Tg, %) 5.0 Marginal tax rate (%) 34.9
Cost of equity (COE, %) 13.0 Gross FATR (X) 6.9
Steady state capital structure - debt mix (%) — Average asset life (years) 10.0
WACC (%) 13.0 Working capital as days of sales 42
Component of justified multiple calculation Formula Calculation

One-year forward exit multiple on FCFE in terminal year 1 / (COE - Tg) 12.5
Terminal phase cash conversion ratio FCFE / PAT 0.81
One-year forward P/E multiple in terminal year 10.2
Discount factor for terminal year multiple to target year 1 / ((1+COE)^ growth years) 0.29
Bump up the multiple by the PAT jump over the growth years 1 * ( (1 + growth CAGR) ^ 6.3
(growth years-1)) * (1+Tg)
Justified one-year forward P/E multiple for terminal value component 18.8
Value of growth period
Value of growth period in terms of FCFE 11.9
Value of growth period in terms of P/E FCFE multiple * cash conversion 9.6
Justified one-year forward P/E multiple 28.0
Source: Company, Kotak Institutional Equities analysis

Capital Goods ABB
Exhibit 5: Change in estimates(a) for ABB India, December calendar year-ends, 2017-20E (Rs mn)
New estimates Old estimates (a) % change

CY2017 CY2018 CY2019E CY2020E CY2019E CY2020E CY2019E CY2020E
Order inflows 57,840 67,290 81,162 95,054 85,975 100,031 (6) (5)
Revenues 60,937 66,901 76,254 91,369 79,518 92,020 (4) (1)
Robotics and Motion 19,359 25,022 27,300 35,021 28,823 33,603 (5) 4
Electrification Products 24,391 26,161 29,275 32,788 28,556 32,145 3 2
Process Automation 14,092 15,400 17,935 21,674 19,254 23,077 (7) (6)
EBITDA 4,146 4,578 5,504 7,402 6,245 7,845 (12) (6)
EBITDA margin (%) 6.8 6.8 7.2 8.1 7.9 8.5 -64 bps -42 bps
Interest cost (572) (539) (101) — — —
Recurring PAT before discontinued operations 2,255 2,542 3,662 5,273 4,125 5,271 (11) 0
Recurring EPS (Rs) 10.6 12.0 17.3 24.9 19.5 24.9 (11) 0
Growth (%)
Order inflows (53.6) 16.3 20.6 17.1 27.8 16.3
Revenues 14.0 19.8 18.9 15.7
Robotics and Motion 9.1 28.3 15.2 16.6
Electrification Products 11.9 12.0 9.2 12.6
Process Automation 16.5 20.8 25.0 19.9
EBITDA 20.2 34.5 36.4 25.6
Recurring PAT before discontinued operations 44.1 44.0 62.3 27.8
Notes:
(a) Old estimates have been adjusted on pro-forma basis to exclude Power Grids segment as ABB has globally sold the business to Hitachi and has thus
classified that segment as discontinued business.

ABB Capital Goods
Exhibit 6: Key financials of ABB India, December calendar year-ends, 2011-21E (Rs mn)
2011 2012 2013 2014 2015 2016 2017 2018 2019E 2020E 2021E
Income statement
Net revenues 74,490 75,650 77,220 77,333 81,403 86,427 60,937 66,901 76,254 91,369 106,916
Total operating expenses (70,872) (72,689) (72,521) (71,776) (74,278) (79,482) (56,792) (62,323) (70,750) (83,967) (97,566)
Raw material cost (54,785) (54,595) (53,985) (52,429) (53,000) (56,173) (41,030) (45,137) (48,421) (57,562) (66,822)
Employee expenses (5,868) (6,240) (6,771) (7,052) (7,499) (7,678) (5,187) (5,295) (4,206) (4,928) (5,844)
Other expenses (10,218) (11,854) (11,765) (12,295) (13,779) (15,631) (10,575) (11,892) (18,123) (21,476) (24,899)
EBITDA 3,618 2,961 4,699 5,557 7,125 6,945 4,146 4,578 5,504 7,402 9,350
Other income 162 55 70 173 130 1,216 777 840 1,047 1,585 1,953
Interest (307) (432) (1,011) (1,050) (912) (919) (572) (539) (101) — —
Depreciation (795) (942) (1,033) (1,128) (1,598) (1,510) (1,012) (928) (984) (1,117) (1,263)
PBT 2,677 1,642 2,725 3,552 4,746 5,733 3,338 3,951 5,466 7,870 10,041
Tax (832) (705) (956) (1,267) (1,747) (1,988) (1,084) (1,410) (1,804) (2,597) (3,313)
Recurring PAT 1,845 937 1,769 2,285 2,999 3,745 2,255 2,542 3,662 5,273 6,727
Discontinued operations — — — — — — 1,945 2,567 2,567 642 —
Extraordinary income (post-tax) — — — — — — — — — 48,664 —
Reported PAT 1,845 937 1,769 2,285 2,999 3,745 4,200 5,109 6,229 54,578 6,727
Recurring EPS (Rs) 8.7 4.4 8.3 10.8 14.2 17.7 10.6 12.0 17.3 24.9 31.7
Balance sheet
Shareholders funds 25,345 26,016 26,776 28,120 30,086 32,867 36,069 40,073 44,874 49,856 54,869
Equity capital 424 424 424 424 424 424 424 424 424 424 424
Reserves and surplus 24,921 25,593 26,352 27,696 29,662 32,443 35,645 39,649 44,450 49,432 54,445
Loan funds 18 3,277 6,201 3,711 6,000 6,000 6,041 20 — — —
Total sources of funds 25,364 29,293 32,977 31,831 36,086 38,867 42,110 40,094 44,874 49,856 54,869
Total fixed assets 12,268 12,719 13,870 13,792 12,904 12,763 12,887 9,616 10,282 10,979 11,713
Investments 167 166 166 165 164 163 2,706 2 2 2 2
Cash and bank balance 2,691 868 3,166 2,260 5,736 11,892 14,917 14,751 20,698 29,146 30,719
Net working capital 9,493 14,600 14,976 14,939 16,269 12,282 9,963 7,635 5,802 8,433 11,140
Total application of funds 25,364 29,293 32,977 31,831 36,086 38,867 42,110 40,094 44,874 49,856 54,869
Cash flow statement
Cash flow from operating activites 1,181 (502) 3,301 4,790 3,817 8,626 7,998 8,087 8,100 2,816 3,330
Cash flow from investing activities (3,612) (3,398) (2,197) (1,477) (764) (681) (3,287) (1,429) (1,650) 53,644 (1,997)
Free cash flow (CFO+net capex) (355) (2,243) 1,084 3,721 2,915 7,586 6,152 10,431 6,450 1,001 1,334
Cash flow from financing activities (799) 2,106 1,191 (4,221) 422 (1,788) (1,710) (6,910) (503) (48,012) 239
Cash generated/(utilised) (3,230) (1,794) 2,296 (908) 3,474 6,156 3,001 (252) 5,947 8,448 1,573
Net cash at start of the year 5,776 2,545 752 3,149 2,241 5,716 11,869 14,871 14,619 20,566 29,014
Net cash at end of the year 2,644 767 3,166 2,260 5,736 11,892 14,917 14,751 20,698 29,146 30,719
Key ratios
EBITDA margin (%) 4.9 3.9 6.1 7.2 8.8 8.0 6.8 6.8 7.2 8.1 8.7
PAT margin (%) 2.5 1.2 2.3 3.0 3.7 4.3 3.7 3.8 4.8 5.8 6.3
Effective tax rate (%) 31.1 42.9 35.1 35.7 36.8 34.7 32.5 35.7 33.0 33.0 33.0
Net debt to equity (0.1) 0.1 0.1 0.1 0.0 (0.2) (0.2) (0.4) (0.5) (0.6) (0.6)
Return on Equity (%) 7.5 3.6 6.7 8.3 10.3 11.9 6.5 6.7 8.6 11.1 12.8
ROCE (%) 8.3 4.3 7.8 9.1 10.5 11.6 6.5 7.0 8.8 11.1 12.8
Book value per share (Rs) 120 123 126 133 142 155 170 189 212 235 259
Notes:
(a) We assume 25% tax outgo on gains from the sale of Power Grids business.

ADD
Infosys (INFO)
IT Services MARCH 05, 2019
UPDATE
Coverage view: Cautious
CEO meeting notes. Key highlights from our meeting with Mr. Salil Parekh, CEO of Price (`): 741
Infosys, are—(1) near term headwinds exist even as intent is to defend the current
margin band, (2) overall business momentum is strong, (3) depth of senior management Fair Value (`): 760
bench and targeted hiring are more than enough to address attrition and (4) Infosys is BSE-30: 36,064
open to reasonable sized acquisitions, if required, to boost capabilities in focused areas.
We maintain ADD rating on the stock.
Infosys
52-week range (Rs) (high,low) 772-542 EPS (Rs) 35.9 39.7 44.1
Market Cap. (Rs bn) 3,237.8 EPS growth (%) 11.2 10.6 10.9
Shareholding pattern (%) P/E (X) 20.6 18.6 16.8 
Promoters 12.8 Sales (Rs bn) 824.4 917.9 1,015.1
MFs 11.6 EBITDA (Rs bn) 210.7 233.2 258.9
Absolute (2.1) 11.7 29.4 ROE (%) 23.5 24.4 24.9
Rel. to BSE-30 (1.0) 12.1 22.2 Div. Yield (%) 3.5 3.0 3.2
EBIT margin—intent to defend band will be tested against the reality of many headwinds
Infosys will exit FY2019 with an EBIT margin closer to the lower end of the band i.e. 22%. The
reasons for the poor exit are - the full impact of the investment plan initiated at the beginning
of FY2019 in digital competencies, sales effort repurposing, localization, reskilling and large
deals. However there are a few mitigating factors that can aid in recovery through the course of
FY2020E—(1) FY2019 was characterized by aggressive investments which may not continue
with the same intensity, (2) the company will double down on operational levers to drive up
margins and (3) leverage from investments made by the company in FY2019. Infosys’ intent is
to defend 22-24% EBIT margin band though this will be tested against the reality of margin
headwinds and a weak FY2019 exit trajectory. Infosys is in the process of finalizing its business
and financial plan for FY2020E post which clarity will emerge and will be communicated along
with annual results.
Infosys has a fair share of wins in a good demand environment
Even as the company is cognizant of a potential macro slowdown, the impact of it is not visible
in the demand, deal closures or pipeline. Pickup in demand and growth has been a function of
strong spending environment and increase in win rates. Specifically on large deals Infosys is
realizing the benefit of increased engagement with third party advisory firms and hiring of deal
architects and directors. Overall deal pipeline is also strong. It will be interesting to watch for
the FY2020E revenue growth guidance in light of a moderating macro environment but strong
deal flow overall. We believe that Infosys can deliver double digit revenue growth in FY2020E
Strong depth of senior leadership augmented with focused external hires
Infosys believes that it has strong depth of leadership across verticals and services and has Kawaljeet Saluja
promoted internal talent where there has been attrition. This has been augmented through
targeted external hires in areas such as sales capacity, large deal teams and digital
Sathishkumar S
competencies. A few high profile hires are visible in consulting and large deals team. To control
attrition at a broader level in the organization, Infosys has made a number of interventions
through a higher number of promotions, retention bonuses and higher variable play. The
company is also working on soft factors of highlighting longer term career relevance that it
brings to the table through its training and reskilling programs for employees. Overall the
company believes that attrition rates can decline.
Contact: +91 22 6218 6427
Infosys IT Services
Open to niche and medium sized acquisitions for new capabilities/ markets
Infosys is open to using acquisitions to enhance digital competencies. M&A will be a priority
area. The company is also open to reasonable sized acquisitions in BPO and consulting
services. The important point is that Infosys could be lot more aggressive with M&A than it
has been in the past. The company has announced two acquisitions in the last 12-months –
(1) digital marketing and consumer insights firm, Wongdoody and (2) Nordics-based
salesforce implementation company, Fluido. The company has also announced a couple of
JVs that expand its presence in geographical markets—(1) in Singapore through a 60:40 JV
with Temasek and (2) Japan through a JV with Hitachi, Panasonic and Pasona Inc.
Digital competencies are strong

Infosys believes that its digital competencies are strong and it shows in high contribution of
digital to overall revenues, higher-than-company average margin profile and strong growth
rate of 30% and strong overall growth rates. The company has strengths in many aspects of
digital competencies including cloud, analytics, and digital experience among others.
However the perception of weak digital could possibly be with the late narrative on digital.
There are a few gaps in digital competencies which can be developed in-house or through
acquisitions.
Consulting is a focus area with repurposing towards digital consulting

Infosys recently hired Mark Livingston as Head of Consulting. Mark was instrumental in
successfully scaling up Cognizant’s consulting business. The mandate is to repurpose
consulting to the new digital world, a departure from the package heavy focus of the past.
Emphasis on driving downstream revenues through the consulting practice will continue.
The company is also open to using acquisitions to beef up the consulting practice.
Exhibit 1: TCV of deal wins (TTM) is at record highs
6,000 TTM TCVs (US$ mn) 5,620
4,829
5,000
4,205
3,907
4,000 3,4863,334 3,531
3,072
2,7882,909 2,8582,973
3,000 2,500
2,2982,445
2,213
1,9271,915
2,000
1,000
-
Sep-14
Sep-15
Sep-16
Sep-17
Sep-18
Mar-17
Mar-15
Mar-16
Mar-18
Jun-16
Jun-18
Jun-15
Jun-17
Dec-14
Dec-16
Dec-18
Dec-15
Dec-17

IT Services Infosys
Exhibit 2: Infosys - attrition rate trend
Quarterly annualized attrition (%)

30
26
22
19.9
18
14
10
Sep-12
Sep-13
Sep-14
Sep-15
Sep-16
Sep-17
Sep-18
Mar-12
Mar-13
Mar-14
Mar-18
Mar-15
Mar-16
Mar-17
Jun-12
Jun-16
Jun-17
Jun-18
Jun-13
Jun-14
Jun-15
Dec-12
Dec-13
Dec-14
Dec-15
Dec-11
Dec-16
Dec-17
Dec-18
Exhibit 3: Key senior management exits at Infosys in the past 3-4 years
Date Name Designation

Jan-19 Sudip Singh SVP, Global head- Energy, Utilities, Resources & Services
Dec-19 Ken Toombs Global head- Infosys consulting
Aug-18 M.D. Ranganath Chief Financial Officer
Jun-18 Sangita Singh Executive VP ,Head of Healthcare & Lifesciences
Jun-18 Nitesh Banga SVP -Global head of manufacturing and Edge products
Jan-18 Rajesh K Murthy President, Head— Energy, Resources, Utilities, Communications & Services
Oct-17 Pervinder Johar CEO- Edgeverve
Oct-17 Abdul Razack Head- Platforms, Big Data and analytics
Sep-17 Navin Budhiraja SVP - Head Architechture and Technology
Sep-17 Sanjay Rajagopalan SVP - Design and research
Aug-17 Dr Vishal Sikka CEO and MD
Jun-17 Sandeep Dadlani President, Head of Manufacturing, Retail, CPG and logistics
Jun-17 Gordon Muehl Industrial Internet business head
Jan-17 David Kennedy Chief Compliance Officer
Sep-16 Sanjay Purohit EVP and Global head of consulting
Jul-16 Sunil Gupta Infosys Edgeverve and Finacle COO
Jul-16 Vasudeva Nayak SVP - Global Head Mobility and assurance
Jul-16 Samson David SVP, Global head- cloud, infrastructure and security
Jul-16 Anup Uppadhayay Executive VP, Head of Strategic sales
Jul-16 Manish Tandon Executive VP, Head of Healthcare, Lifesciences and Hi-Tech
Jan-16 Michael Reh Head- Edgeverve and Finacle

Infosys IT Services
Exhibit 4: Strong growth in digital revenues
Digital revenues (LHS, US$ mn) Digital revenue Y-o-Y growth rate (RHS, %)
3,100 33
32 2,987 32
3,000
2,921 31
2,900
2,831 31 30
2,805
2,800 2,755 29
2,728
2,700 28
2,651
27
2,600
27 26
2,500
25
2,400 24
Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18
Exhibit 5: Profit model, balance sheet, cash model of Infosys, March fiscal year-ends, 2014-21E (Rs mn)
2014 2015 2016 2017 2018 2019E 2020E 2021E

Profit model
Revenues 501,330 533,190 624,410 684,850 705,220 824,432 917,854 1,015,124
EBITDA 136,340 149,010 170,780 186,050 190,100 210,739 233,165 258,916
Depreciation (13,740) (10,690) (14,590) (17,030) (18,620) (19,679) (21,674) (23,322)
Other income 26,690 34,270 31,250 30,790 31,930 25,790 26,121 29,800
Pretax profits 149,291 172,591 187,441 199,811 203,411 216,851 237,613 265,394
Tax (40,620) (49,290) (52,520) (55,980) (56,740) (60,520) (64,749) (73,647)
Profit after tax 108,671 123,301 134,921 143,831 146,671 156,331 172,864 191,748
Diluted earnings per share (Rs) 23.3 27.0 29.5 31.4 32.3 35.2 39.7 44.1
Balance sheet
Total equity 445,300 507,360 578,260 689,820 649,230 678,849 736,877 803,349
Assets held for sale — — — — 3,240 3,240 3,240 3,240
Minority interest — — — — 10 20 20 20
Current liabilities 124,360 155,530 173,150 141,660 141,010 145,511 152,294 159,357
Total liabilities and equity 569,660 662,890 751,410 831,480 793,490 827,620 892,431 965,966
Cash 259,500 303,670 326,970 226,250 198,180 198,544 233,442 276,358
Other current assets 180,240 209,940 258,790 276,940 299,660 328,603 355,562 383,622
Deferred taxation 6,290 5,360 5,330 3,330 7,410 7,410 7,410 7,410
Goodwill 22,440 35,950 44,760 36,520 22,110 22,110 22,110 22,110
Tangible fixed assets 70,950 85,270 96,640 124,920 144,500 149,323 152,277 154,837
Investments 30,240 22,700 18,920 163,520 121,630 121,630 121,630 121,630
Total assets 569,660 662,890 751,410 831,480 793,490 827,620 892,431 965,966
Free cash flow
Operating cash flow, excl. working capital 93,920 91,610 120,090 126,080 124,854 149,909 168,415 185,269
Working capital changes (2,810) (8,420) (21,460) (16,240) (1,114) (24,442) (20,175) (20,997)
Capital expenditure (27,450) (22,550) (27,230) (27,600) (19,980) (24,192) (24,629) (25,881)
Acquistions — (13,760) (7,470) — (600) — — —
Other income 23,800 25,510 23,810 29,570 31,930 25,790 26,121 29,800
Free cash flow 87,460 72,390 87,740 111,810 135,090 127,065 149,732 168,190
Key ratios and assumptions
Revenue growth (US$ terms) (%) 11.5 5.6 9.1 7.4 7.2 7.8 9.4 9.3
Re/US$ rate 60.8 61.2 65.7 67.1 64.5 69.9 71.1 72.0
EBITDA margin (%) 27.2 27.9 27.4 27.2 27.0 25.6 25.4 25.5
EBIT margin (%) 24.5 25.9 25.0 24.7 24.3 23.2 23.0 23.2
RoAE 26.3 25.9 24.9 22.7 21.9 23.5 24.4 24.9
RoIC 59.5 58.7 54.4 45.7 39.3 40.0 41.6 43.2

BUY
Coal India (COAL)
Oil, Gas & Consumable Fuels MARCH 05, 2019
UPDATE
Coverage view: Attractive
Dispatches improve. Coal India reported 3% yoy growth in dispatches in February Price (`): 233
2019, an improvement over the declining volumes in the preceding months. E-auction Fair Value (`): 290
premiums continue to strengthen (131% in December 2018), despite moderation in
BSE-30: 36,064
prices of imported coal. Maintain BUY rating with fair value of Rs290 on improved
earnings trajectory and attractive valuations (6.5X P/E on FY2020E adjusted earnings).
C ompany data and valuation summary

Coal India
Market Cap. (Rs bn) 1,444.2 EPS growth (%) 128.5 5.7 1.0
Promoters 78.3 Sales (Rs bn) 943.3 1,015.6 1,074.5
MFs 1.8 EBITDA (Rs bn) 197.6 217.9 226.7
Absolute 4.2 (5.0) (25.6) ROE (%) 64.2 67.5 71.3
Rel. to BSE-30 5.4 (4.7) (29.8) Div. Yield (%) 8.6 10.7 10.7
Dispatch growth improves 3% yoy in February 2019; YTD growth at 4.5% ahead of estimate
Coal India reported volume growth of 3% yoy in coal dispatches at 51.5 mn tons in February
2019, despite three subsidiaries reporting decline in volumes. The performance is a marked
improvement over the weak dispatch numbers in the preceding three months, and YTD growth
of 4.5% is ahead of our own estimates of 4% yoy growth, and closely tracking 4.3% YTD
growth in coal-based generation. We highlight dispatch volume growth declined in December
2018 and January 2019 by 1.3% yoy and 2.4% yoy respectively. Production volume growth too
remained positive at 6.6% yoy in February 2019. Overall YTD FY2019 performance now stands
reduced to 4.5% yoy growth in dispatches and 6.6% yoy growth in production volumes.
Among subsidiaries, WCL and ECL showed the highest dispatch growth of 23% yoy and 7.6%
yoy, respectively followed by MCL (+3.8% yoy). On the production front, five subsidiaries
reported volume growth with MCL reporting the highest growth of 17.1% yoy followed by
WCL at 10.1% yoy in February 2019.
Strong premium for e-auction although drop in sales worrisome, inventory improves in West
E-auction premiums increased to 131% in December 2018 from 111% seen in November
2018. Premiums are still well above those seen in FY2018, and continue to maintain their
uptrend despite the weakness in prices of imported coal. We note that e-auction sales were
down 33% yoy in 9MFY19, although overall e-auction revenues were growing by 0.5% yoy on
the back of 50% yoy growth in e-auction realizations. Coal inventory improved to 16 days in
February 2019, seeing a gradual improvement over the last two months. Plants with critical
inventories in West stand reduced to four, at the same level as seen in January 2019. East and
South have no plants with critical inventory while North has only one plant.
Murtuza Arsiwalla
Improved pricing and attractive valuation, maintain BUY
Coal India has had a much improved year with 9MFY19 delivering 100% yoy growth in
Samrat Verma
earnings on the back of 18% yoy growth in revenue. The continued divestment by the
government has made for valuations to be incrementally attractive at 6.5X P/E and 4.9X
EV/EBITDA on adjusted earnings coupled with 10.7% dividend yield on FY2020E earnings.
Maintain BUY with unchanged fair value of Rs290/share.
Contact: +91 22 6218 6427
Coal India Oil, Gas & Consumable Fuels
Exhibit 1: Coal India’s dispatches increased 3% yoy in February 2019; production volume increased by 6.6% yoy
Subsidiary-wise monthly dispatch volumes, March fiscal year-ends (mn tons)
Growth (%) YTD Quarterly
Feb-19 Feb-18 Jan-19 yoy mom 2019 2018 (% chg.) 3QFY19 3QFY18 (% chg.)
Dispatches
ECL 4.8 4.5 5.1 7.6 (4.7) 44.6 38.5 15.8 12.2 11.2 9.0
BCCL 2.6 3.0 2.8 (12.2) (6.2) 29.9 29.9 0.1 7.5 8.3 (8.9)
CCL 6.0 6.1 6.2 (1.6) (2.6) 61.2 61.2 — 17.2 18.0 (4.3)
NCL 8.1 8.1 8.9 (0.1) (9.1) 92.7 87.8 5.6 26.7 26.4 1.1
WCL 5.1 4.2 5.1 23.0 0.2 50.0 44.0 13.7 14.6 13.1 11.3
SECL 13.1 12.8 12.8 2.0 2.3 141.3 137.8 2.5 39.0 39.1 (0.3)
MCL 11.7 11.2 11.6 3.8 0.7 128.1 125.2 2.3 36.4 36.2 0.6
NEC 0.1 0.1 0.1 (21.4) 10.0 0.7 0.8 (10.7) 0.2 0.2 —
CIL 51.5 50.0 52.4 3.0 (1.9) 548.5 525.1 4.5 153.8 152.4 0.9
Production
ECL 5.3 4.8 5.2 8.9 2.1 43.4 37.6 15.4 12.5 11.4 9.6
BCCL 2.9 3.1 3.0 (9.2) (4.0) 27.3 28.6 (4.5) 6.9 8.4 (17.7)
CCL 7.0 7.5 6.9 (6.7) 2.2 55.5 50.5 10.0 18.9 16.5 14.6
NCL 8.3 7.8 9.2 7.2 (9.5) 92.2 79.4 16.1 26.3 24.7 6.6
WCL 5.9 5.3 6.1 10.1 (3.3) 44.1 38.3 15.3 15.5 12.6 23.5
SECL 14.1 13.3 13.6 5.9 4.0 138.5 129.2 7.2 38.5 40.5 (4.8)
MCL 14.5 12.4 13.2 17.1 9.4 126.1 126.4 (0.2) 37.2 37.9 (1.9)
NEC 0.1 0.2 0.1 (40.4) (10.0) 0.6 0.6 (1.2) 0.2 0.2 11.6
CIL 58.0 54.5 57.2 6.6 1.5 527.7 495.1 6.6 156.0 152.1 2.6
Exhibit 2: Monthly dispatches to power sector increased by 1% yoy in December 2018

Monthly trend of coal dispatches to power sector, March fiscal year-ends, Dec-2016 -Dec-2018
(mn tons) Dispatch to power (LHS, mn tons) YoY growth (RHS, %)

(%)
50 35
42 41 43 42 43 42
45
39 40 41 40 42 40 40 30
40 38 37 35 25
36 35 33 33 35 34
34
35 31 32 20
30 15
25 10
20 5
15 -
10 (5)
5 (10)
- (15)
Apr-17
Sep-17
Apr-18
Sep-18
Jul-17
Aug-17
Jul-18
Aug-18
Feb-17
Feb-18
Mar-17
Mar-18
Oct-17
Oct-18
Nov-17
Jun-18
Nov-18
Jun-17
May-17
May-18
Dec-16
Dec-17
Dec-18
Jan-17
Jan-18
Source: Ministry of Power, Kotak Institutional Equities

Oil, Gas & Consumable Fuels Coal India
Exhibit 3: Coal inventory at plants improved in February 2019; number of plants with critical inventory declines in West and North
Inventory position of coal across power plants in India, March fiscal year-ends, 2017-18
Feb-2019 Jan-2019 Dec-2018
Days Critical (#) Super-Critical (#) Days Critical (#) Super-Critical (#) Days Critical (#) Super-Critical (#)
North 20 1 — 15 1 1 13 — 3
West 14 2 2 12 1 3 10 2 3
South 15 — — 13 — — 9 2 —
East 14 — — 10 — — 8 — —
All India 16 3 2 12 2 4 10 4 6
Feb-2018 Jan-2018 Dec-2017

Days Critical (#) Super-Critical (#) Days Critical (#) Super-Critical (#) Days Critical (#) Super-Critical (#)
North 13 6 6 11 — 5 13 4 —
West 9 6 14 8 5 9 8 3 5
South 12 4 3 13 — 1 9 1 —
East 6 6 5 6 — — 6 — —
All India 10 22 29 9 5 15 9 8 5
Source: CEA, Kotak Institutional Equities
Exhibit 4: Coal-based generation declined by 2.6% yoy in January 2019

Key details of installed capacity, generation and PLF in India, March fiscal year-ends
Monthly YTD
Jan-19 Jan-18 yoy (%) Jan-19 Jan-18 yoy (%)
Overall
Installed capacity (MW) 349,288 334,400 4.5 349,288 334,400 4.5
Generation (MU) 100,306 103,221 (2.8) 1,042,116 1,005,079 3.7
PLF (%) 49.0 50.4 -139 bps 51.7 50.5 121 bps
Coal
Installed capacity (MW) 197,453 193,822 1.9 197,453 193,822 1.9
Generation (MU) 83,073 85,249 (2.6) 821,568 787,990 4.3
PLF (%) 58.4 60.3 -184 bps 58.8 57.3 145 bps
Source: CEA, Kotak Institutional Equities
Exhibit 5: Railways freights remained flat in January 2019 even as volumes increased
Volume and freight rates for coal movement by railway (mn tons, Rs/ton km)
Volumes (LHS, mn tons) Freight (RHS,Rs/ton km)

60 2.2
2.1
55
2.0
50 1.9
45 1.8
1.7
40
1.6
35 1.5
May/17
May/18
Dec/17
Jan/17
Dec/18
Jan/19
Apr/17
Sep/17
Jan/18
Apr/18
Sep/18
Jul/17
Aug/17
Jul/18
Aug/18
Feb/17
Feb/18
Mar/17
Mar/18
Oct/17
Oct/18
Nov/18
Jun/17
Nov/17
Jun/18
Source: Indian Railways, Kotak Institutional Equities

Coal India Oil, Gas & Consumable Fuels
Exhibit 6: Spot e-auction premiums increased sharply to 131% in December 2018

Monthly trend in spot coal volumes and premium for Coal India, March fiscal year-end, Dec-2016 – Dec-2018
(mn tons) Spot e-auction volumes (mn tons, LHS) Spot e-auction premium (%, RHS)
(%)
10 131 140
9 111
102 120
8 95 93 97
92
7 87 100
80 76
6 74 73
65 67 63 80
5 58
47 60
4 42 44
32 35
3 30 31 28 29 40
2
20
1 4.6 4.9 5.3 5.4 4.1 4.2 3.2 3.9 3.4 3.1 4.3 5.2 9.1 4.6 6.0 3.8 3.4 3.5 3.6 2.4 2.2 2.6 0.2 1.0 3.4
0 -
Aug-17
Aug-18
Sep-17
Sep-18
Apr-17
Apr-18
Jul-17
Jul-18
Feb-17
Feb-18
Mar-18
Mar-17
Oct-17
Oct-18
Nov-16
Jun-17
Nov-17
May-18
Nov-18
May-17
Jun-18
Dec-18
Dec-16
Jan-17
Dec-17
Jan-18
Source: Ministry of Power, Kotak Institutional Equities
Exhibit 7: Imported coal prices averaged at US$84/ton in February 2019

Trend in price of imported coal, March fiscal year-ends, Feb-2010 - Feb-2019
Thermal coal (US$/ton) Exchange rate (Rs/US$)
140
130
120
110
100
90
80
70
60
50
40
Aug-10
Aug-11
Aug-12
Aug-13
Aug-14
Aug-15
Aug-16
Aug-17
Aug-18
Feb-12
Feb-13
Feb-14
Feb-15
Feb-10
Feb-11
Feb-16
Feb-17
Feb-18
Feb-19
Source: Bloomberg, Kotak Institutional Equities
Exhibit 8: Our earnings assumptions factor 4% yoy growth in volumes for FY2019E
Key operational and financial assumptions, March fiscal year-ends, 2016-21E (Rs mn)
Growth (%)
2017 2018 2019E 2020E 2021E 2017 2018 2019E 2020E 2021E
Volumes (mn tons) 543 580 604 633 654 2 7 4 5 3
Realization (Rs/ton) 1,389 1,408 1,522 1,561 1,600 (2) 1 8 3 3
Revenue (Rs mn) 754,666 817,000 919,632 988,092 1,045,976 (0) 8 13 7 6
Employee costs (335,143) (426,336) (383,902) (400,125) (417,879) 13 27 (10) 4 4
Overburden (26,722) (33,583) (34,096) (36,762) (39,358) (5) 26 2 8 7
EBITDA 122,242 83,845 197,624 217,916 226,721 (33) (31) 136 10 4
PAT 92,678 70,198 160,367 169,588 171,217 (35) (24) 128 6 1

Oil, Gas & Consumable Fuels Coal India
Exhibit 9: Profit model, balance sheet, cash model of Coal India, March fiscal year-ends, 2016-21E (Rs mn)
2016 2017 2018 2019E 2020E 2021E

Profit model
Net sales 756,443 754,666 817,000 919,632 988,092 1,045,976
Transport and loading recovery 22,386 27,382 29,806 26,348 27,673 28,599
Total income 793,271 794,430 830,011 943,315 1,015,648 1,074,454
EBITDA 181,791 122,242 83,845 197,624 217,916 226,721
Interest income 48,042 37,306 29,518 20,975 6,240 6,470
Other Income (ex transport, interest) 10,515 18,008 28,884 71,976 71,976 71,976
Interest expense (207) (4,117) (4,318) (4,149) (4,156) (4,156)
Depreciation (24,664) (29,101) (30,664) (32,982) (37,383) (40,561)
Pretax profits 215,476 144,337 107,264 253,444 254,594 260,450
Tax (73,148) (51,660) (37,067) (93,077) (85,005) (89,232)
Net income 142,329 92,678 70,198 160,367 169,588 171,217
Extraordinary items 415 (18) — — — —
Reported profit 142,743 92,660 70,198 160,367 169,588 171,217
Earnings per share (Rs) 23 15 11 26 27 28
Balance sheet
Paid-up common stock 63,164 62,074 62,074 62,074 62,074 62,074
Total shareholders' equity 338,976 245,268 198,466 213,592 201,629 191,295
Minority interest 1,048 3,459 3,625 3,625 3,625 3,625
Total borrowings 11,988 30,078 15,309 15,598 15,598 15,598
Shifting and rehab fund 31,777 38,197 43,666 43,666 43,666 43,666
Total liabilities and equity 383,788 317,002 261,065 276,481 264,518 254,184
Net fixed assets 183,608 220,900 275,774 312,190 344,206 334,489
Capital work-in progress 58,942 103,078 102,864 122,462 142,059 150,770
Investments 29,019 14,829 15,086 15,086 15,086 15,086
Cash 383,128 312,298 314,751 203,000 189,433 234,770
Current assets (excl. cash) 427,055 482,357 512,892 527,045 543,109 551,321
Current liabilities and provisions 718,408 843,787 1,013,852 955,464 1,021,562 1,084,739
Deferred tax asset 20,445 27,328 53,551 52,161 52,187 52,488
Misc. expenditure — — — — — —
Total assets 383,788 317,002 261,065 276,481 264,518 254,184
Free cash flow
Operating cash flow, excl. working capital 165,021 121,761 100,862 194,739 206,945 211,478
Working capital changes (62,730) 70,077 139,530 (72,542) 50,035 54,964
Capital expenditure (43,450) 162,491 (85,324) (88,996) (88,996) (39,554)
Investments (885) 14,191 (258) — — —
Free cash flow 57,957 368,519 154,810 33,201 167,985 226,888
Ratios
Net debt/equity (%) (109) (115) (151) (88) (86) (115)
Return on equity (%) 38 32 32 78 82 87
Book value per share (Rs) 54 40 32 34 32 31
ROCE (%) 39 34 38 94 99 104

SELL
Biocon (BIOS)
Pharmaceuticals MARCH 05, 2019
UPDATE
Coverage view: Neutral
AG for Humalog, and sub-cu for Herceptin. LLY announced the US launch of an AG Price (`): 633
version of Humalog (insulin lispro), as it seeks to aggressively protect volumes from
Sanofi’s Admelog (biosimilar Humalog), while also aggressively pushing for volumes for Fair Value (`): 370
Basaglar (biosimilar Lantus). Separately, Roche announced the US approval of its BSE-30: 36,064
Herceptin sub-cu formulation, seeking to introduce it as a life-cycle management in
advance of the biosimilar entry in 2HCY19. Both the developments indicate increasing
aggression by innovators to protect share from biosimilars in the US. SELL.
Biocon
Market Cap. (Rs bn) 379.7 EPS growth (%) 87.7 41.5 14.9
Promoters 60.7 Sales (Rs bn) 55.2 69.3 80.1
MFs 3.2 EBITDA (Rs bn) 13.3 19.2 22.2
Absolute (5.0) 1.4 1.0 ROE (%) 11.7 14.7 14.3
Rel. to BSE-30 (3.9) 1.7 (4.7) Div. Yield (%) 0.6 0.9 1.0
Lilly launches Humalog AG, while Roche set to launch Herceptin sub-cu in the US
Eli Lilly announced the launch of an AG version of Humalog. The launch comes in response to
Sanofi’s Admelog (biosimilar Humalog) launch (4QCY18 sales: US$60 mn), which has seen
share gains in the price sensitive Medicare/Medicaid segments. As per our analysis, net pricing
for Humalog is ~US$30/pen, down from a peak of ~US$54/pen back in CY2013, thanks to
increasing rebates for the insulin class of drugs. While the net pricing for the AG version is
unlikely to be at a sharp discount to the brand version, it is an attempt by LLY to lower out of
pocket for consumers, and competitively position the AG against Admelog. This is significant, as
LLY has already captured >30% share of the US Lantus market. While BIOS’s Humalog is at
least a year away from filing, its success in the US glargine market is contingent on its ability to
get an AP rating, failing which, we believe share gains will be very slow, unless MYL opts for
aggressive pricing, which will restrict the opportunity to ~US$200 mn. In the meantime, the EU
market for Lantus remains challenging on pricing (down to ~US$7/pen in some countries), as
well as market share.
Separately, Roche announced the US approval for sub-cu version of Herceptin, dubbed
Herceptin Hylecta. The launch signals Roche’s attempts to switch away a portion of the
Herceptin market in advance of biosimilar competition in 2HCY19. While we expect the sub-cu
version to have a slower ramp in the US as compared to the EU, we believe the product can
likely capture 10-20% share of the Herceptin market. This is significant, as we anyway, expect
the landscape for Herceptin to deteriorate in the US, with the US likely to be a five player
market at the time of BIOS’ launch.
Humira and Lantus biosimilars set the pricing trend in the EU
MYL/BIOS’s launched Fulphila earlier in July at ~33% discount on list pricing (>40% discount
likely on net prices). Strong execution by MYL has seen it now approaching ~20% market
share, though, this only covers ~37% of the market, given ~63% switch by the innovator to Chirag Talati, CFA
OnPro device. With Coherus now in the market and potentially Amneal, Apotex, Sandoz and
Fresenius likely to launch in the coming 12-24 months, the pricing environment will likely
Kumar Gaurav
deteriorate substantially. We believe the market landscape in the EU remains fiercely
competitive, with Humira pricing indicatively down 60-70% across the EU, and the top three
companies (Samsung, Amgen and Sandoz) cornering the bulk of the biosimilar market.
Risk-reward unfavorable – SELL
We believe the market is ignoring the commercial risks, particularly, given the aggressive price
erosion now in the EU. SELL with an unchanged fair value of `370/share.
Contact: +91 22 6218 6427
Pharmaceuticals Biocon
Exhibit 1: SOTP target price at `370/share
rNPV
Product Status Probability Launch (FY) US$ mn Rs mn Rs/share
Biocon base business 2,041 136,732 228
Insulin franchise US/EU Various Various Various 253 16,955 28
Biosimilar Herceptin US/EU Approved 100% 2019 282 18,913 31
Neulasta US/EU Launched 100% 2018 221 14,831 25
Avastin US Phase III 50% 2021 84 5,595 9
Humira US / EU Phase III / launched Various Various 84 5,655 9
Sandoz and other pipeline products Early-stage Various ≥2023 340 22,780 38
Pipeline products 1,265 84,729 141
Technology valuation 3,305 221,461 369

FY2019 net (debt)/cash 11 788 1
SOTP value 3,318 222,249 370
Source: Kotak Institutional Equities estimates
Exhibit 2: Profit model, balance sheet, cash model of Biocon

March fiscal year-ends, 2013-21E, ` mn
2013 2014 2015 2016 2017 2018 2019E 2020E 2021E
Net revenues 24,277 28,673 30,898 33,370 39,216 41,297 55,243 69,269 80,101
Gross Profit 12,404 15,189 16,570 18,570 23,107 23,046 33,131 42,391 48,476
Staff costs (3,584) (4,663) (5,334) (5,580) (6,872) (8,459) (10,451) (11,913) (13,921)
R&D expenses (1,640) (1,310) (1,688) (2,740) (2,662) (2,158) (2,899) (4,139) (4,008)
Other expenses (2,326) (2,445) (2,590) (3,050) (3,778) (4,138) (6,468) (7,187) (8,339)
EBITDA 4,854 6,271 6,958 7,200 9,795 8,291 13,313 19,152 22,208
Depreciation & amortisation (1,793) (2,036) (2,210) (2,490) (2,772) (3,851) (4,505) (5,344) (6,002)
EBIT 3,061 4,235 4,748 4,710 7,023 4,440 8,807 13,808 16,207
Net Interest (81) (17) (89) (250) (260) (615) (672) (665) (658)
Other income 1,103 559 531 1,230 1,571 2,062 1,750 1,467 1,529
Profit before tax 4,083 4,777 5,190 5,690 8,334 5,887 9,885 14,609 17,077
Tax & Deferred Tax (975) (1,069) (957) (1,340) (1,616) (1,569) (2,175) (3,652) (4,440)
Less: minority interest (39) (170) (310) (350) (597) (594) (721) (1,064) (1,271)
Net Income (adjusted) 3,069 3,538 3,923 4,000 6,121 3,724 6,989 9,893 11,366
EPS adjusted (Rs) 5.1 5.9 6.5 6.7 10.2 6.2 11.6 16.5 18.9
Balance sheet
Equity 27,599 31,090 34,428 42,996 52,138 56,485 63,456 70,951 79,610
Total borrowings 2,488 8,497 10,306 24,673 22,054 19,201 19,001 18,801 18,601
Deferred tax liability 412 528 417 965 964 891 891 891 891
Other liabilities 13,662 17,391 18,603 15,947 18,786 23,320 23,101 25,381 27,822
Total liabilities 44,161 57,506 63,754 84,581 93,942 99,897 106,449 116,024 126,924
Net fixed assets 18,229 27,308 33,065 39,878 44,643 50,042 56,037 61,192 63,191
Investments 5,866 7,649 2,303 9,859 13,827 6,752 6,752 6,752 6,752
Cash 6,729 8,044 9,375 15,386 10,443 13,228 16,452 17,403 22,742
Other current assets 13,337 14,505 19,011 19,458 25,029 29,875 27,208 30,677 34,239
Total assets 44,161 57,506 63,754 84,581 93,942 99,897 106,449 116,024 126,924
Cashflow statement
Operating profit before working capital 7,575 6,717 6,981 6,511 9,084 9,657 16,098 19,954 23,079
Tax paid (940) (1,487) (1,334) (1,043) (414) (1,971) (2,175) (3,652) (4,440)
Change in working capital (1,923) 377 (3,540) (1,762) (2,270) (1,065) 2,448 (1,188) (1,122)
Capital expenditure (3,586) (7,885) (8,381) (6,180) (6,084) (7,382) (8,500) (8,500) (6,000)
Free cash flow 1,126 (2,278) (6,274) (2,474) 316 (761) 7,870 6,614 11,517
Margins and ratios
Gross profit margin (%) 51.1 53.0 53.6 55.6 58.9 55.8 60.0 61.2 60.5
EBITDA margin (%) 20.0 21.9 22.5 21.6 25.0 20.1 24.1 27.6 27.7
Tax rate (%) 23.9 22.4 18.4 23.6 24.0 27.0 22.0 25.0 26.0
RoAE (%) 20.2 11.4 15.2 14.2 12.9 6.9 14.5 14.7 15.1
RoACE (%) 9.0 9.7 9.8 6.8 9.0 5.6 10.2 14.7 15.8

NEUTRAL
Automobiles & Components
India MARCH 01, 2019
UPDATE
BSE-30: 36,064
Analysis of state-wise tractor data. Our analysis of state-wise tractor data indicates
(1) strong double-digit volume growth in East and Central regions in FY2019 so far while
volumes were down marginally in Western India, (2) M&M has lost 110 bps market share
due to 100-250 bps decline in share across regions except in West India and (3) Escorts
has gained share in both its stronger and weaker markets. We remain positive on
medium-term growth outlook for the tractor industry due to (1) low penetration and
(2) continued focus on farm mechanization owing to labor shortage in the country;
expect 5% growth in the tractor industry in FY2020E—BUY stays on both Escorts and
M&M.
Key insights from state-wise tractor data
 Domestic tractor industry volumes grew by 12% yoy during April 2018 to January 2019. Our
analysis of tractor demand across states indicates (1) strong growth in Eastern (+29.4% yoy)
and Central regions (+14.8% yoy), (2) marginally lower than industry average growth in
North and South regions and (3) volumes in the Western states (includes Gujarat and
Maharashtra) declined by 0.8% yoy. In terms of states, there was a robust growth in six
major states: Bihar (+36% yoy), West Bengal (+25% yoy), UP (+19% yoy), Haryana (+19%
yoy), MP (+17% yoy) and Karnataka (+16% yoy) in FY2019 so far, even as volumes declined
by 10% yoy in Maharashtra and 1-2% yoy in Punjab, Tamil Nadu and Rajasthan over the
period (refer to Exhibits 1-2 for details).
 M&M and TAFE have lost 110 bps and 80 bps market share respectively during April 2018 to
January 2019 while Escorts and Sonalika have gained 100 bps and 50 bps share respectively
over this period. Smaller overseas players such as Kubota (+39% yoy) and New Holland
(+25% yoy) have grown at a faster pace and have gained some market share in FY2019 so
far.
 M&M has lost 100-250 bps market share across regions except in West India (market share
flattish yoy) and in terms of product segments, the company has lost 400-500 bps market
share in <30 HP and 40-50 HP categories while it has gained 160 bps market share in 30-40
HP segments. We note that M&M had gained around 140 bps market share over FY2016-18
and the company’s market share in FY2019 so far is back to FY2016 levels.
 Escorts has gained 30-180 bps market share in its strong markets such as Bihar, Haryana,
MP, Rajasthan and UP led by focus on separation of distribution networks of Farmtrac and
Powertrac brands. The company has also managed to gain some market share in its weaker
markets such as Odisha, Maharashtra and Tamil Nadu aided possibly by launch of new Hitesh Goel
products across segments.
Maintain positive view on tractor industry; reiterate BUY rating on Escorts and M&M Nishit Jalan
We remain positive on medium-term growth outlook for the tractor industry due to (1) relatively
low penetration and (2) continued focus on farm mechanization owing to labor shortage in the
Rishi Vora
country. Assuming a normal monsoon, we expect tractor industry volumes to grow by 5% yoy
in FY2020E; we are not building in any decline in market share for M&M going ahead as we
don’t see any structural reason to worry about M&M’s market share in the tractor segment.
Reiterate BUY rating on (1) Escorts with an unchanged fair value of `1,050 valuing the
company at 15X December 2020E EPS and (2) M&M with an unchanged SoTP-based fair value
of `1,000—valuations of core business are attractive at 7.5X FY2020E EPS.
Contact: +91 22 6218 6427
India Automobiles & Components
Exhibit 1: Tractor sales volumes have declined yoy in Maharashtra, Punjab, Rajasthan and Tamil Nadu in FYTD19 (data till January 2019)
State-wise tractor volumes, volume growth and volume mix, March fiscal year-ends, 2011-19 (units, %)
2011 2012 2013 2014 2015 2016 2017 2018 Apr-Jan19 Apr-Jan18
Andhra Pradesh + Telengana 44,099 41,958 30,784 44,163 37,028 43,243 65,840 76,976 69,915 63,696
Bihar 27,244 29,162 34,854 40,437 36,090 35,394 38,081 43,155 51,786 38,148
Chattisgarh 12,861 13,277 15,803 24,271 20,011 16,862 17,944 19,457 19,214 17,770
Gujarat 40,951 56,664 43,183 46,751 46,411 39,418 47,112 48,769 49,274 44,083
Haryana 24,123 26,040 27,871 35,290 30,626 22,685 25,812 36,568 33,117 27,883
Karnataka 28,403 31,533 23,745 30,601 33,758 32,679 34,170 36,600 35,968 31,073
Madhya Pradesh 48,435 50,597 70,803 87,835 63,744 48,275 62,847 72,958 73,460 62,924
Maharashtra 53,604 57,191 44,401 65,631 49,839 42,012 52,414 73,253 52,980 58,947
O rissa 11,134 9,254 9,210 12,125 10,878 12,665 15,068 20,586 19,013 18,052
Punjab 26,621 25,987 28,254 30,187 26,074 17,835 16,760 20,687 17,281 17,674
Rajasthan 35,173 53,175 63,266 74,920 64,565 61,228 60,239 64,735 56,160 56,863
Tamil Nadu 20,638 26,298 18,548 9,886 8,072 14,626 17,635 26,970 24,414 24,900
Uttar Pradesh 76,981 82,613 84,537 95,660 92,219 71,202 85,588 114,635 114,675 96,723
West Bengal 13,045 12,187 12,751 13,760 12,751 12,917 17,663 21,609 22,888 18,310
O thers 18,946 20,950 19,752 22,634 19,397 21,891 25,671 34,520 38,376 29,531
Domestic tractor volumes 482,258 536,886 527,762 634,151 551,463 492,932 582,844 711,478 678,521 606,577
Yoy growth (%)
Andhra Pradesh 27.0 (4.9) (26.6) 43.5 (16.2) 16.8 52.3 16.9 9.8
Bihar (6.2) 7.0 19.5 16.0 (10.8) (1.9) 7.6 13.3 35.8
Chattisgarh 26.4 3.2 19.0 53.6 (17.6) (15.7) 6.4 8.4 8.1
Gujarat 68.2 38.4 (23.8) 8.3 (0.7) (15.1) 19.5 3.5 11.8
Haryana (15.9) 7.9 7.0 26.6 (13.2) (25.9) 13.8 41.7 18.8
Karnataka 18.7 11.0 (24.7) 28.9 10.3 (3.2) 4.6 7.1 15.8
Madhya Pradesh 45.3 4.5 39.9 24.1 (27.4) (24.3) 30.2 16.1 16.7
Maharashtra 56.2 6.7 (22.4) 47.8 (24.1) (15.7) 24.8 39.8 (10.1)
O rissa 40.2 (16.9) (0.5) 31.7 (10.3) 16.4 19.0 36.6 5.3
Punjab (6.9) (2.4) 8.7 6.8 (13.6) (31.6) (6.0) 23.4 (2.2)
Rajasthan 10.6 51.2 19.0 18.4 (13.8) (5.2) (1.6) 7.5 (1.2)
Tamil Nadu 30.5 27.4 (29.5) (46.7) (18.3) 81.2 20.6 52.9 (2.0)
Uttar Pradesh 4.5 7.3 2.3 13.2 (3.6) (22.8) 20.2 33.9 18.6
West Bengal 42.5 (6.6) 4.6 7.9 (7.3) 1.3 36.7 22.3 25.0
O thers 11.1 10.6 (5.7) 14.6 (14.3) 12.9 17.3 34.5 30.0
Total 19.8 11.3 (1.7) 20.2 (13.0) (10.6) 18.2 22.1 11.9
Volume mix (%)
Andhra Pradesh 9.1 7.8 5.8 7.0 6.7 8.8 11.3 10.8 10.3 10.5
Bihar 5.6 5.4 6.6 6.4 6.5 7.2 6.5 6.1 7.6 6.3
Chattisgarh 2.7 2.5 3.0 3.8 3.6 3.4 3.1 2.7 2.8 2.9
Gujarat 8.5 10.6 8.2 7.4 8.4 8.0 8.1 6.9 7.3 7.3
Haryana 5.0 4.9 5.3 5.6 5.6 4.6 4.4 5.1 4.9 4.6
Karnataka 5.9 5.9 4.5 4.8 6.1 6.6 5.9 5.1 5.3 5.1
Madhya Pradesh 10.0 9.4 13.4 13.9 11.6 9.8 10.8 10.3 10.8 10.4
Maharashtra 11.1 10.7 8.4 10.3 9.0 8.5 9.0 10.3 7.8 9.7
O rissa 2.3 1.7 1.7 1.9 2.0 2.6 2.6 2.9 2.8 3.0
Punjab 5.5 4.8 5.4 4.8 4.7 3.6 2.9 2.9 2.5 2.9
Rajasthan 7.3 9.9 12.0 11.8 11.7 12.4 10.3 9.1 8.3 9.4
Tamil Nadu 4.3 4.9 3.5 1.6 1.5 3.0 3.0 3.8 3.6 4.1
Uttar Pradesh 16.0 15.4 16.0 15.1 16.7 14.4 14.7 16.1 16.9 15.9
West Bengal 2.7 2.3 2.4 2.2 2.3 2.6 3.0 3.0 3.4 3.0
O thers 3.9 3.9 3.7 3.6 3.5 4.4 4.4 4.9 5.7 4.9
Total 100 100 100 100 100 100 100 100 100 100
Source: TMA, Kotak Institutional Equities

Automobiles & Components India
Exhibit 2: Volume share of East region has increased by 250 bps in FYTD19 (data till January 2019)
Region-wise tractor market sales and market share, March fiscal year-ends, 2011-19 (units, %)
2011 2012 2013 2014 2015 2016 2017 2018 YTDFY19 YTDFY18
Sales volume (units)
North 168,860 193,888 210,865 243,773 218,682 177,662 194,398 244,088 227,431 205,805
Central 61,296 63,874 86,606 112,106 83,755 65,137 80,791 92,415 92,674 80,694
West 94,555 113,855 87,584 112,382 96,250 81,430 99,526 122,022 102,254 103,030
East 61,940 64,849 69,042 80,856 73,650 77,709 90,096 111,775 125,350 96,872
South 95,607 100,420 73,665 85,034 79,126 90,994 118,033 141,178 130,812 120,176
Total 482,258 536,886 527,762 634,151 551,463 492,932 582,844 711,478 678,521 606,577
Yoy growth (%)
North 0.6 14.8 8.8 15.6 (10.3) (18.8) 9.4 25.6 10.5
Central 40.9 4.2 35.6 29.4 (25.3) (22.2) 24.0 14.4 14.8
West 61.2 20.4 (23.1) 28.3 (14.4) (15.4) 22.2 22.6 (0.8)
East 11.7 4.7 6.5 17.1 (8.9) 5.5 15.9 24.1 29.4
South 24.1 5.0 (26.6) 15.4 (6.9) 15.0 29.7 19.6 8.9
Total 19.8 11.3 (1.7) 20.2 (13.0) (10.6) 18.2 22.1 11.9
Volume share (%)
North 35.0 36.1 40.0 38.4 39.7 36.0 33.4 34.3 33.5 33.9
Central 12.7 11.9 16.4 17.7 15.2 13.2 13.9 13.0 13.7 13.3
West 19.6 21.2 16.6 17.7 17.5 16.5 17.1 17.2 15.1 17.0
East 12.8 12.1 13.1 12.8 13.4 15.8 15.5 15.7 18.5 16.0
South 19.8 18.7 14.0 13.4 14.3 18.5 20.3 19.8 19.3 19.8
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Exhibit 3: M&M has lost market share in all the regions except West in FYTD19 (data till January 2019); Escorts has gained share
Player-wise regional market share, March fiscal year-ends, 2011-19 (%)
2011 2012 2013 2014 2015 2016 2017 2018 FYTD19 FYTD18
North
M&M (with PTL) 33.7 34.1 34.4 36.6 36.5 34.8 36.0 36.2 35.7 36.6
TAFE (with Eicher Motors) 25.3 29.4 29.4 29.8 29.5 28.9 25.9 24.4 23.3 24.9
Escorts Ltd 20.0 17.2 16.3 15.8 15.4 15.4 16.5 16.4 15.4 14.9
Sonalika 10.8 9.7 10.9 11.8 13.7 12.6 12.8 13.4 13.8 12.6
Others (John Deere, New Holland etc) 10.2 9.5 9.0 6.0 4.9 8.3 8.8 9.6 11.8 11.0
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Central
M&M (with PTL) 38.9 38.8 38.8 38.9 37.3 36.0 38.7 37.7 36.4 37.9
Escorts Ltd 15.2 13.5 12.3 11.7 11.2 11.8 13.0 13.5 13.5 12.2
Sonalika 9.8 9.8 10.8 11.1 13.2 14.1 13.4 13.8 12.2 13.0
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
West
M&M (with PTL) 47.1 47.2 45.6 45.5 45.1 44.4 45.3 45.2 43.4 43.2
Escorts Ltd 8.5 6.1 5.8 4.9 4.2 4.8 5.2 6.4 6.7 5.6
Sonalika 7.1 6.8 8.5 9.6 10.9 11.5 11.0 10.7 9.3 9.8
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
East
M&M (with PTL) 50.2 47.1 47.1 43.0 41.7 49.3 51.0 50.7 48.4 50.7
Escorts Ltd 12.3 11.2 11.4 9.9 9.7 10.5 11.2 11.5 12.3 10.4
Sonalika 11.1 11.6 10.9 11.2 12.7 15.0 15.6 15.7 14.8 14.6
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
South
M&M (with PTL) 49.3 48.9 48.4 48.4 46.9 48.4 48.6 48.8 46.0 48.2
Escorts Ltd 5.0 4.8 4.6 3.6 4.1 4.0 4.2 3.7 3.9 3.5
Sonalika 3.8 4.1 4.8 5.3 6.9 6.8 7.2 7.2 7.8 7.0
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Overall
M&M (with PTL) 42.2 41.8 40.6 41.0 40.3 41.3 42.8 42.7 41.3 42.4
Escorts Ltd 13.2 11.4 11.6 10.7 10.4 10.3 10.8 11.0 11.0 10.0
Sonalika 8.6 8.3 9.6 10.3 12.0 11.9 11.9 12.1 11.9 11.4
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

Exhibit 4: M&M has lost market share in all the segments except 30-40 HP segment in FYTD19 (data till January 2019)
HP-wise player-wise market share, March fiscal year-ends, 2011-19 (%)
Market share (%) 2013 2014 2015 2016 2017 2018 FYTD19 FYTD18
Upto 30 HP
M&M 55.7 53.8 51.5 50.0 49.9 49.3 46.4 50.9
TAFE 26.7 25.7 22.3 18.1 15.2 16.8 16.8 16.7
Escorts 1.9 0.8 1.0 1.9 2.1 3.5 4.1 3.2
Sonalika 4.3 6.2 9.6 9.5 10.1 9.8 8.4 9.5
John Deere — — — — — — 1.3 —
O thers 11.4 13.5 15.7 20.4 22.8 20.7 23.1 19.7
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
30-40 HP
M&M 36.3 36.6 36.4 38.3 41.0 37.3 39.7 38.1
TAFE 29.9 30.0 29.7 29.6 26.8 28.2 22.3 29.5
Escorts 14.2 14.3 14.3 13.1 12.6 14.5 15.2 13.0
Sonalika 11.4 12.1 13.0 12.6 12.5 11.4 12.3 11.0
John Deere 3.9 3.4 2.7 2.7 4.5 6.2 6.9 6.2
O thers 4.3 3.6 4.0 3.7 2.6 2.3 4.2 2.2
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.8 100.0
40-50 HP
M&M 42.7 43.0 42.6 43.7 44.9 48.1 44.0 48.9
TAFE 23.4 23.1 23.5 21.7 19.6 15.3 18.4 15.4
Escorts 12.9 10.9 9.7 10.7 11.7 10.4 10.1 9.8
Sonalika 6.3 7.4 9.4 10.0 10.1 11.2 10.9 10.9
John Deere 6.8 7.9 7.3 7.5 8.4 9.7 8.6 9.7
O thers 7.7 7.7 7.5 6.5 5.2 5.3 8.2 5.3
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.3 100.0
> 51 HP
M&M 17.8 23.7 26.0 27.6 28.3 26.6 26.0 27.8
TAFE 1.0 1.7 2.7 3.6 2.8 3.2 3.3 3.1
Escorts 5.8 6.4 9.7 6.0 6.8 7.8 5.4 7.8
Sonalika 37.1 35.7 31.3 25.5 23.7 24.2 20.9 24.1
John Deere 20.2 17.5 16.0 25.4 26.3 25.8 27.0 25.3
O thers 18.1 15.0 14.3 12.0 12.2 12.4 17.3 12.0
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Total
M&M 40.6 41.0 40.3 41.3 42.8 42.7 41.3 42.4
TAFE 25.0 24.8 24.4 23.0 20.5 19.2 18.5 19.3
Escorts 11.6 10.7 10.4 10.3 10.8 11.0 11.0 10.0
Sonalika 9.6 10.3 12.0 11.9 11.9 12.1 11.9 11.4
John Deere 5.7 5.9 5.3 6.1 7.6 8.7 8.7 8.4
O thers 7.5 7.3 7.5 7.4 6.4 6.2 8.6 8.5
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

Exhibit 5: M&M has lost share in key states (AP, Telangana, Haryana, Karnataka, Maharashtra, etc.) in FYTD19 (data till January 2019)
M&M state-wise market share, March fiscal year-ends, 2011-19 (%)
M&M's market share
2011 2012 2013 2014 2015 2016 2017 2018 YTDFY19 YTDFY18
Andhra Pradesh + Telangana 52.4 48.7 47.0 47.2 46.8 48.4 47.9 40.0 46.8 48.5
Bihar 46.6 42.3 41.7 43.8 45.2 45.5 47.6 46.6 47.3 47.2
Chattisgarh 48.7 45.8 45.7 46.6 46.0 45.6 48.7 46.8 46.1 46.5
Gujarat 42.2 44.3 43.8 43.0 44.6 43.4 43.4 41.9 42.0 40.3
Haryana 25.6 27.8 30.5 33.4 33.9 35.3 34.5 30.8 29.8 32.1
Karnataka 45.6 43.9 45.9 49.1 45.6 47.5 49.2 48.3 43.7 46.7
Madhya Pradesh 36.3 37.0 37.3 36.7 34.5 32.6 35.9 35.3 33.9 35.5
Maharashtra 50.9 50.1 47.4 47.3 45.6 45.3 47.1 47.5 44.6 45.3
O rissa 49.5 52.1 51.1 52.0 51.3 49.9 51.9 49.1 41.3 48.7
Punjab 36.2 39.9 37.3 40.4 37.5 39.5 41.7 41.4 42.8 41.5
Rajasthan 26.1 27.8 29.5 29.6 28.5 28.6 30.1 30.7 31.2 31.3
Tamil Nadu 52.0 55.2 54.0 51.3 53.5 51.0 50.1 48.3 47.0 49.6
Uttar Pradesh 38.6 37.9 37.7 37.2 37.5 39.1 39.9 40.5 38.4 40.7
West Bengal 53.2 56.0 55.6 54.1 50.7 51.4 51.8 53.2 52.7 52.9
O thers 45.1 44.4 48.3 48.7 47.4 49.4 49.9 71.3 49.3 49.6
Total 42.2 41.8 40.6 41.0 40.3 41.3 42.8 42.7 41.3 42.4
Exhibit 6: Escorts has gained share across most major states in FYTD19 (data till January 2019)
Escorts state-wise market share, March fiscal year-ends, 2011-19 (%)
2011 2012 2013 2014 2015 2016 2017 2018 YTDFY19 YTDFY18
Andhra Pradesh + Telangana 3.8 3.4 4.6 3.7 4.6 5.0 4.9 4.4 3.6 4.3
Bihar 15.9 15.7 16.0 14.8 13.8 15.3 15.2 16.0 15.2 14.6
Chattisgarh 7.5 6.2 6.3 6.4 7.1 7.1 7.9 8.5 8.2 7.9
Gujarat 8.9 6.6 5.6 5.0 5.2 6.2 7.1 8.6 8.5 7.5
Haryana 25.1 21.0 19.1 17.5 16.6 18.4 18.5 19.9 19.2 17.4
Karnataka 5.1 5.8 5.0 3.1 3.5 3.1 2.9 2.7 3.3 2.5
Madhya Pradesh 17.2 15.4 13.7 13.2 12.6 13.4 14.4 14.8 14.8 13.4
Maharashtra 8.3 5.6 6.0 4.8 3.3 3.4 3.5 5.0 5.0 4.2
O rissa 3.8 2.6 2.0 1.2 1.5 1.8 2.8 4.7 6.0 4.1
Punjab 16.8 12.3 13.5 12.0 13.5 12.6 13.0 10.1 7.1 9.7
Rajasthan 17.0 16.2 15.3 14.6 13.9 13.4 14.8 14.8 13.9 13.6
Tamil Nadu 7.5 5.7 3.5 4.1 4.0 3.0 3.8 3.0 5.6 2.7
Uttar Pradesh 20.9 18.4 17.4 17.4 16.4 17.4 18.6 17.6 16.6 16.0
West Bengal 13.6 10.3 9.0 8.3 10.6 10.1 11.5 9.5 8.4 9.0
O thers 11.8 10.3 9.5 7.9 8.6 7.1 8.4 11.4 13.5 10.2
Total 13.2 11.4 11.6 10.7 10.4 10.3 10.8 11.0 11.0 10.0
Exhibit 7: Reservoir levels have been in negative since November 2018; improved last week compared to past 10-year average
Reservoir levels for 84 large reservoirs, billion cubic meters (BCM)
15-Nov-18 29-Nov-18 13-Dec-18 27-Dec-18 10-Jan-19 24-Jan-19 7-Feb-19 21-Feb-19 28-Feb-19
Current live storage (BCM) 103.7 98.4 92.4 86.4 80.4 74.2 68.4 64.4 65.5
Live capacity at FRL (BCM) 162.0 162.0 162.0 162.0 162.0 162.0 162.0 162.0 162.0
Corresponding storage last year 104.9 99.3 94.4 88.0 81.2 73.4 67.0 61.6 58.3
Corresponding storage last 10-year average 107.4 103.1 98.6 93.3 86.7 79.6 72.5 66.9 63.0
% storage as FRL capacity 64.0 60.7 57.0 53.3 49.6 45.8 42.2 39.7 40.5
Corresponding % last year 64.7 61.3 58.3 54.3 50.1 45.3 41.4 38.0 36.0
Corresponding % (last 10-year average) 66.3 63.6 60.9 57.6 53.5 49.1 44.7 41.3 38.9
Current year's storage as % of last year 98.9 99.1 97.9 98.1 99.0 101.1 102.0 104.5 112.5
Current year's storage as % of last 10-yr average 96.6 95.4 93.7 92.5 92.7 93.2 94.3 96.2 104.1
Reservoir surplus/(deficiency) (%) (3.4) (4.6) (6.3) (7.5) (7.3) (6.8) (5.7) (3.8) 4.1

NEUTRAL
India MARCH 01, 2019
UPDATE
BSE-30: 36,064
Muted trends in auto industry continue. Retail demand in the automobile industry
remained weak in February 2019. OEMs have corrected dealer inventory levels in
February 2019, which led to weakness in volumes across segments. We expect the
weakness in volumes to continue until general elections across auto segments. FY2020
could also be a challenging year for the sector due to transition to BS-6 norms from
April 1, 2020. We remain selective in the sector.
Passenger vehicles: Low single-digit decline in industry volumes in January 2019
Maruti’s overall volumes grew by 1% yoy to 148,682 units in February 2019 led by (1) 1% yoy
growth in domestic volumes and (2) 20% yoy decline in exports. Entry and compact segment
volumes declined by 2% yoy. Ciaz volumes declined by 37% yoy, SUV volumes were up 7% yoy
led possibly by launch of new Ertiga and vans segment volumes grew by 17% yoy. In terms of
other OEMs, Tata Motors PV volumes grew by 2% yoy while Honda car sales increased by 16%
yoy while Toyota volumes declined by 2% yoy.
M&M’s auto volumes grow by 10% yoy; tractor volumes decline yoy in February 2019
Mahindra reported 10% yoy volume growth in the automotive segment, which was driven by
10-16% yoy growth in three-wheeler and export volumes. CV segment volumes were flattish
yoy while utility vehicle volumes increased by 17% yoy—the positive impact of launch of
XUV300. M&M’s overall tractor volumes declined by 8% yoy due to weak domestic volumes.
Escorts reported 12% yoy growth in tractor volumes led by strong growth in both domestic and
export volumes, which reflects some market share gains for the company.
MHCV industry volumes remain under pressure in February 2019 due to high base
Tata Motors reported 5% yoy decline in domestic CV volumes led by 18% yoy decline in
M&HCV truck volumes; this segment was largely impacted by drop in cargo sales due to low
consumer sentiments. However, the tipper segment continued to grow strongly and was
relatively unaffected on the back of road construction, affordable housing, irrigation projects
and government spending on infrastructure projects. VECV’s volumes declined by 8% yoy led
by 8% yoy decline in domestic volumes while exports declined by 8% yoy. Ashok Leyland
although reported a flat yoy growth led by 11% yoy growth in LCV volumes.
Royal Enfield volumes down 14% yoy in February 2019
Royal Enfield volumes declined by 14% yoy led by 16% yoy decline in domestic volumes offset
by exports (up 49% yoy). Bajaj Auto and TVS Motors reported 10% and 3% yoy growth
respectively in February 2019. We have been highlighting that two-wheeler industry volumes Hitesh Goel
will likely be subdued over the next two years due to increase in vehicle prices post increase in
insurance costs and a weaker consumer sentiment.
Nishit Jalan
Rishi Vora
Contact: +91 22 6218 6427
Exhibit 1: Maruti Suzuki reported flattish volumes (yoy) in February 2019; van segment volumes grew by 17% yoy
Maruti Suzuki monthly sales volume, March fiscal year-ends (units)
YTD January-Mar
Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 2018 2019
M800, Alto, A-Star, Wagon R 33,789 37,511 37,794 37,864 29,381 37,710 35,895 34,971 32,835 29,954 27,661 33,408 24,751 389,672 362,224
Swift, Baleno, Ritz, Celerio, Dzire 65,213 68,885 83,834 77,263 71,570 74,373 71,364 74,011 64,789 72,533 51,334 65,523 72,678 679,590 779,272
Gypsy, Ertiga, S-Cross, Brezza 20,324 22,764 20,804 25,629 19,321 24,505 17,971 21,639 20,764 23,512 20,225 22,430 21,834 230,995 238,634
Omni and Eeco 12,425 13,689 15,886 16,717 12,185 15,791 13,663 14,645 13,668 14,053 15,850 15,145 14,565 141,448 162,168
Ciaz 4,897 4,321 5,116 4,024 1,579 48 7,002 6,246 3,892 3,838 4,734 2,934 3,084 54,592 42,497
Light commercial vehicle 1,252 1,412 1,544 1,703 1,626 1,723 1,805 2,038 2,152 2,128 1,675 2,710 2,188 8,621 21,292
Total domestic 137,900 148,582 164,978 163,200 135,662 154,150 147,700 153,550 138,100 146,018 121,479 142,150 139,100 1,504,918 1,606,087
Exports 11,924 12,016 8,008 9,312 9,319 10,219 10,489 8,740 8,666 7,521 6,859 9,571 9,582 114,058 98,286
Total volumes 149,824 160,598 172,986 172,512 144,981 164,369 158,189 162,290 146,766 153,539 128,338 151,721 148,682 1,618,976 1,704,373
Yoy change (%)
M800, Alto, A-Star, Wagonr 2.1 21.1 (2.8) (3.1) 15.1 (10.9) 1.3 (9.1) 1.1 (21.6) (14.0) 0.3 (26.7) (7.0)
Swift, Baleno, Ritz, Celerio, Dzire 31.5 11.3 31.8 50.8 76.7 17.8 (3.6) 1.7 3.7 10.8 (3.8) (3.5) 11.4 14.7
Gypsy, Ertiga, S-Cross, Brezza 13.8 24.3 0.8 13.4 39.2 (4.9) (16.2) 8.7 (11.2) 1.9 4.9 8.4 7.4 3.3
Omni and Eeco (12.5) 17.7 14.0 32.7 32.3 0.5 (1.9) 6.6 7.9 3.6 38.8 23.6 17.2 14.6
Ciaz (16.8) (12.1) (27.2) (14.8) (60.0) (99.2) 8.4 11.5 (5.2) (4.3) 98.7 (42.0) (37.0) (22.2)
Light commercial vehicle 820.6 364.5 275.7 297.9 689.3 145.1 147.3 131.9 146.8 112.2 130.7 92.1 74.8
Total domestic 14.2 16.1 14.2 24.9 45.5 0.1 (2.8) 1.4 1.5 0.5 1.8 1.1 0.9 6.7
Exports 24.9 2.1 19.1 48.1 (29.0) (9.9) (10.4) (25.1) (17.0) (19.1) (36.4) (11.0) (19.6) (13.8)
Total volumes 15.0 14.9 14.4 26.0 36.3 (0.6) (3.4) (0.5) 0.2 (0.7) (1.3) 0.2 (0.8) 5.3
Exhibit 2: Mahindra & Mahindra: CV volumes increased by 1% yoy in February 2019; domestic tractor volumes were down 7% yoy
Mahindra & Mahindra monthly sales volume, March fiscal year-ends (units)
YTD
Passenger UVs (incl. Verito) 22,389 26,555 21,927 20,715 18,137 19,781 19,758 21,411 24,066 16,188 15,091 23,872 26,109 223,016 227,055
Commercial Vehicles 20,946 25,496 18,963 18,748 19,229 19,284 20,326 22,917 24,353 19,673 16,906 22,625 21,154 191,301 224,178
3-wheelers 5,138 6,602 4,327 4,355 4,323 5,540 5,289 6,940 6,931 5,703 4,693 6,003 5,652 48,023 59,756
Exports (Auto sector) 2,654 3,424 2,880 3,031 3,466 2,594 2,951 3,754 3,066 3,537 3,065 3,222 3,090 24,828 34,656
Auto division 51,127 62,077 48,097 46,849 45,155 47,199 48,324 55,022 58,416 45,101 39,755 55,722 56,005 487,168 545,645
Tractors (Dom + Exp) 20,658 28,277 30,925 29,330 40,529 22,679 17,785 37,581 47,376 25,949 17,404 22,212 18,978 290,411 310,748
Total 71,785 90,354 79,022 76,179 85,684 69,878 66,109 92,603 105,792 71,050 57,159 77,934 74,983 777,579 856,393
Yoy change (%)
Passenger UVs (incl. Verito) 8.7 4.7 13.1 2.1 12.2 (5.6) 2.2 (15.5) 0.7 1.0 (2.9) 0.8 16.6 1.8
Commercial vehicles 27.9 11.3 25.9 15.3 27.1 28.4 24.7 19.4 26.3 26.5 (3.6) 7.7 1.0 17.2
3-wheelers 50.0 30.4 25.9 7.3 68.9 46.7 35.4 17.1 13.1 28.0 20.5 26.5 10.0 24.4
Exports (Auto sector) 15.4 26.4 88.5 134.4 86.8 30.8 14.3 17.1 30.9 39.7 38.0 22.5 16.4 39.6
Auto division 19.7 10.8 22.0 11.8 26.4 13.1 14.7 2.5 13.1 16.9 1.4 7.0 9.5 12.0
Tractors (Dom + Exp) 37.7 46.2 18.3 14.6 23.1 20.4 6.9 (17.9) 17.7 12.9 (5.9) 0.7 (8.1) 7.0
Total 24.4 19.9 20.5 12.9 24.8 15.4 12.5 (6.9) 15.1 15.4 (0.9) 5.1 4.5 10.1
Exhibit 3: Tata Motors reported 6% yoy volume decline in February 2019; domestic CV volumes declined by 5% yoy
Tata Motors monthly sales volume, March fiscal year-ends (units)
YTD January-M
MHCVs 20,706 24,321 18,271 17,565 17,456 16,143 19,698 23,292 19,203 16,172 17,836 17,541 166,046 183,177
LCVs 24,970 31,296 20,915 22,861 26,147 23,535 25,389 28,127 24,610 21,785 22,179 22,634 227,776 238,182
Total CVs 45,676 55,617 39,186 40,426 43,603 39,678 45,087 51,419 43,813 37,957 40,015 40,175 41,741 393,822 463,100
UVs 6,393 7,908 6,659 6,043 6,044 5,706 6,558 6,351 6,818 5,655 6,263 6,920 45,163 63,017
Cars 11,692 12,628 10,676 11,525 12,372 11,483 12,112 12,221 11,633 11,462 8,161 11,090 123,920 112,735
Total PVs 18,085 20,536 17,335 17,568 18,416 17,189 18,670 18,572 18,451 17,117 14,424 18,010 18,410 169,083 194,162
Total sales 63,761 76,153 56,521 57,994 62,019 56,867 63,757 69,991 62,264 55,074 54,439 58,185 60,151 562,905 657,262
Yoy change (%)
MHCVs 19.1 20.1 208.9 70.8 59.4 26.2 31.5 37.0 23.8 (8.2) (18.4) (4.8) 10.3
LCVs 40.6 47.9 72.4 33.4 44.4 28.3 29.7 19.4 16.7 (2.7) (10.0) (12.5) 4.6
Total CVs 30.0 34.3 117.1 47.4 50.1 27.4 30.5 26.8 19.7 (5.1) (13.9) (9.3) (8.6) 17.6
UVs 174.3 223.3 309.3 447.4 406.6 101.1 127.5 21.7 31.1 (0.4) 1.4 1.0 39.5
Cars 15.8 (5.1) (5.5) 17.1 22.4 (6.2) 4.8 (0.9) 2.0 (2.1) (1.1) (17.8) (9.0)
Total PVs 45.5 30.4 34.1 60.5 62.9 14.0 29.3 5.8 11.1 (1.5) (0.0) (11.4) 1.8 14.8
Total sales 34.0 33.3 82.5 51.2 53.7 23.0 30.1 20.4 17.0 (4.0) (10.6) (10.0) (5.7) 16.8

Exhibit 4: Ashok Leyland volumes were flat yoy in February 2019 ;MHCV volumes down by 3% yoy
Ashok Leyland monthly sales volume, March fiscal year-ends (units)
YTD
LCV 4,455 5,396 3,709 3,238 4,534 4,203 4,228 5,141 5,352 4,403 4,198 5,047 4,954 38,045 49,007
MHCV 13,726 17,057 8,968 10,421 11,257 10,996 13,158 14,232 9,797 8,718 11,295 14,694 13,291 114,403 126,827
Total CVs 18,181 22,453 12,677 13,659 15,791 15,199 17,386 19,373 15,149 13,121 15,493 19,741 18,245 152,448 175,834
Yoy change (%)
LCV 62.7 57.6 45.0 10.4 44.9 42.2 37.9 44.2 40.7 15.3 27.1 13.2 11.2 28.8
MHCV 21.2 11.8 97.9 69.8 21.8 21.8 24.5 20.6 7.2 (18.0) (29.2) 7.7 (3.2) 10.9
Total CVs 29.2 20.2 78.8 50.6 27.6 26.9 27.5 26.0 17.0 (9.2) (19.5) 9.1 0.4 15.3
Exhibit 5: VECV reported 8% yoy volume decline in February 2019; domestic MHCV volumes declined by 14% yoy
VECV monthly sales volume, March fiscal year-ends (units)
YTD
Domestic sales
LCV 1,499 2,193 1,124 1,864 1,857 1,731 1,423 1,536 1,369 908 1,240 1,478 1,530
MHCV 4,284 5,787 2,265 3,404 3,639 3,427 3,420 4,149 3,752 2,909 3,872 3,699 3,699
Total 5,783 7,980 3,389 5,268 5,496 5,158 4,843 5,685 5,121 3,817 5,112 5,177 5,337 47,897 54,403
Export sales
LCV 329 404 168 115 233 223 195 201 169 328 151 105 333
MHCV 684 861 382 491 586 535 910 702 536 457 850 526 598
Total 1,013 1,265 550 606 819 758 1,105 903 705 785 1,001 631 931 7,736 8,794
Total sales 6,796 9,245 3,939 5,874 6,315 5,916 5,948 6,588 5,826 4,602 6,113 5,808 6,268 55,633 63,197
Yoy change (%)
LCV 9.9 20.1 (8.6) 9.1 56.6 51.3 45.8 22.7 11.5 (10.8) (12.1) (11.2) 2.1
MHCV 23.7 26.2 68.0 51.6 65.7 33.1 20.3 8.3 16.0 (4.4) 6.5 (14.9) (13.7)
Total domestic 19.8 24.5 31.5 33.2 62.5 38.7 26.8 11.8 14.7 (6.0) 1.3 (13.9) (7.7) 13.6
Export sales
LCV 213.3 101.0 0.0 (19.6) 26.6 (4.7) (21.1) 24.1 1.8 404.6 36.0 (31.8) 1.2
MHCV 53.4 80.5 15.4 10.8 83.7 45.4 99.6 2.0 (0.2) (23.8) 6.4 (4.0) (12.6)
Total exports 83.8 86.6 10.2 3.4 62.8 25.9 57.2 6.2 0.3 18.0 10.0 (10.1) (8.1) 13.7
Total sales 26.3 30.4 28.0 29.4 62.5 36.9 31.6 11.0 12.8 (2.6) 2.7 (13.5) (7.8) 13.6
Exhibit 6: Escorts reported 12% yoy volume growth in February 2019; domestic tractor volumes grew by 10% yoy
Escorts monthly sales volume, March fiscal year-ends (units)
YTD
Escorts 6,462 11,790 6,186 8,325 9,983 5,626 4,812 10,617 13,140 8,005 4,598 5,991 7,240 68,627 84,523
Domestic 6,295 11,557 6,094 8,087 9,758 5,483 4,674 10,396 12,867 7,641 4,212 5,762 6,918 66,889 81,892
Exports 167 233 92 238 225 143 138 221 273 364 386 229 322 1,738 2,631
Yoy change (%)
Escorts 52.2 66.5 26.3 20.9 72.8 3.6 5.2 2.5 28.8 56.4 27.5 12.7 12.0 23.2
Domestic 53.4 64.8 28.0 19.5 72.1 3.9 6.3 2.5 28.7 54.6 21.2 11.7 9.9 22.4
Exports 16.8 258.5 (33.8) 105.2 110.3 (7.7) (22.0) 5.7 33.8 104.5 196.9 46.8 92.8 51.4

Exhibit 7: Royal Enfield reported 14% yoy volume decline in February 2019
Royal Enfield monthly sales volume, March fiscal year-ends (units)
YTD
Royal Enfield 73,077 76,087 76,187 74,697 74,477 69,063 69,377 71,662 70,451 65,744 58,278 72,701 62,630 745,708 765,267
Domestic 71,354 74,209 74,627 72,510 72,588 67,001 68,014 70,065 70,044 65,026 56,026 70,872 60,066 728,322 746,839
Exports 1,723 1,878 1,560 2,187 1,889 2,062 1,363 1,597 407 718 2,252 1,829 2,564 17,386 18,428
Yoy change (%)
Royal Enfield 25.0 26.6 26.7 23.1 17.9 5.0 2.1 1.7 1.4 (6.2) (13.0) (6.6) (14.3) 2.6
Domestic 25.8 26.7 27.4 23.6 17.7 3.9 1.7 1.0 3.0 (4.1) (14.3) (7.0) (15.8) 2.5
Exports 1.2 20.1 (1.1) 6.7 26.9 58.4 23.3 53.9 (72.5) (69.4) 40.7 9.3 48.8 6.0
Exhibit 8: TVS Motor’s volumes increased by 3% yoy in February 2019; motorcycles volumes up by 8% yoy
TVS Motors monthly sales volume, March fiscal year-ends (units)
YTD January-M
Motorcycles 113,296 134,412 131,704 126,711 128,825 121,434 131,743 166,489 150,429 119,883 107,189 111,253 122,551 1,221,129 1,418,211
Scooters 93,573 100,972 89,245 95,879 102,763 118,996 126,676 142,562 151,040 111,763 91,480 85,299 86,935 1,033,944 1,202,638
Mopeds 74,073 80,381 72,469 75,545 69,613 67,426 71,657 101,645 82,838 75,496 60,040 72,725 76,125 796,549 825,579
Three-wheelers 9,731 10,894 11,377 11,730 12,413 13,323 13,141 13,282 14,120 12,823 12,686 13,353 13,742 87,790 141,990
Total sales 290,673 326,659 304,795 309,865 313,614 321,179 343,217 423,978 398,427 319,965 271,395 282,630 299,353 3,139,412 3,588,418
Yoy change (%)
Motorcycles 92.0 40.5 31.8 7.4 14.9 11.0 17.7 15.7 20.0 28.6 12.5 12.8 8.2 16.1
Scooters 35.6 20.0 9.6 11.9 13.6 28.8 10.8 17.2 41.3 42.6 9.4 (0.3) (7.1) 16.3
Mopeds (5.3) 13.0 21.4 5.3 5.4 9.6 (13.5) 19.1 8.9 5.3 (12.6) (7.7) 2.8 3.6
Total three-wheelers 86.3 103.2 114.5 78.2 140.9 70.0 56.1 47.6 56.1 48.4 36.7 51.6 41.2 61.7
Total sales 37.5 27.4 23.7 9.9 14.5 18.4 8.1 17.8 25.5 27.0 5.7 4.0 3.0 14.3
Exhibit 9: Bajaj volumes increased by 10% yoy in February 2019; domestic motorcycle volumes up by 6% yoy
Bajaj Auto monthly sales volume, March fiscal year-ends (units)
YTD
Domestic motorcycles 175,489 158,987 200,742 192,543 200,949 201,433 218,437 273,029 281,582 205,259 157,252 203,358 186,523 1,815,590 2,321,107
Export motorcycles 122,025 110,952 148,875 150,052 136,803 131,247 144,486 157,910 151,403 141,285 141,603 147,102 141,462 1,283,805 1,592,228
Total motorcycles 297,514 269,939 349,617 342,595 337,752 332,680 362,923 430,939 432,985 346,544 298,855 350,460 327,985 3,099,395 3,913,335
Domestic three-wheelers 38,534 44,613 28,722 32,082 33,627 36,078 37,194 38,474 38,360 29,559 23,099 28,103 35,183 325,024 360,481
Exports three-wheelers 21,835 19,796 36,829 32,367 33,050 31,585 36,975 32,596 35,354 30,827 24,245 28,587 29,921 248,024 352,336
Total three-wheelers 60,369 64,409 65,551 64,449 66,677 67,663 74,169 71,070 73,714 60,386 47,344 56,690 65,104 573,048 712,817
Total sales 357,883 334,348 415,168 407,044 404,429 400,343 437,092 502,009 506,699 406,930 346,199 407,150 393,089 3,672,443 4,626,152
Yoy change (%)
Domestic motorcycles 23.2 5.0 24.0 23.0 85.9 22.1 27.2 10.4 33.1 44.6 39.2 24.7 6.3 27.8
Exports motorcycles 18.9 19.6 12.8 24.4 41.7 30.9 28.8 29.2 32.5 15.8 22.2 16.9 15.9 24.0
Total motorcycles 21.4 10.5 18.9 23.6 65.0 25.5 27.9 16.6 32.9 31.3 30.6 21.3 10.2 26.3
Domestic three-wheelers 129.1 150.2 80.0 83.1 78.2 67.2 28.3 12.0 7.6 (22.0) (36.9) (28.1) (8.7) 10.9
Exports three-wheelers 86.1 95.4 85.0 69.3 54.8 50.7 66.7 31.9 68.1 25.3 (10.9) 13.8 37.0 42.1
Total three-wheelers 111.4 130.3 82.8 75.9 65.8 59.0 44.9 20.3 30.0 (3.4) (25.8) (11.7) 7.8 24.4
Total sales 30.8 22.8 25.9 29.7 65.2 30.1 30.5 17.1 32.5 24.7 18.3 15.3 9.8 26.0

Exhibit 10: Residual volumes growth run-rate are positive for two-wheeler OEMs (potential downside risks to FY2019 volume estimates)
Summary table of OEM volumes
Residual volume
Residual monthly run rate (Yoy
OEM Feb-19 Yoy chg (%) Mom chg (%) FYTD19 Yoy chg (%) volume run rate growth)
Ashok Leyland 18,245 0.4 39.1 175,834 15.3 18,502 (17.1)
Bajaj Auto 393,089 9.8 (3.4) 4,626,152 26.0 400,331 19.7
Eicher Motor (RE) 62,630 (14.3) (4.7) 765,267 2.6 79,458 6.8
Eicher Motor (VECV) 6,268 (7.8) 36.2 63,197 13.6 7,897 (14.5)
Escorts 7,240 12.0 (9.6) 84,523 23.2 11,766 (0.1)
Maruti Suzuki 148,682 (0.8) (3.2) 1,704,373 5.3 181,897 13.3
Mahindra and Mahindra 74,983 4.5 5.5 856,393 10.1 75,391 (16.6)
Tata Motors (standalone) 60,151 (5.7) 9.2 657,262 16.8 72,417 (5.3)
TVS Motors 299,353 3.0 (6.4) 3,588,418 14.3 329,526 0.8

INDIA
Economy
Public Finance MARCH 05, 2019
UPDATE
BSE-30: 36,064
GST revenues remain range-bound. 11MFY19 GST run rate at around Rs896 bn has
remained range-bound through FY2019. In fact, the run rate has not changed much
from that of FY2018. However, with the unallocated compensation cess available for
equal sharing between the states and center, there is unlikely to be any shortfall in the
center’s GST revenue. We will review the viability of FY2020 GST revenue targets along
with states’ budget estimates.
January GST collections at Rs972 bn

QUICK NUMBERS
Based on the monthly PIB release, total GST collection was at Rs972 bn in January, lower than
Rs1,025 bn in December. Reduction of rates across 23 items that took effect from January 1  January GST
could have led to revenue reduction. CGST collection amounted to Rs176 bn (December: Rs178 collections at Rs972
bn), SGST was at Rs242 bn (Rs248 bn), IGST at Rs470 bn (Rs512 bn), and compensation cess bn
was at Rs85 bn (Rs87 bn). After allocations from the IGST, CGST for January was at Rs371 bn
(December: Rs361 bn) and SGST was Rs399 bn (December: Rs395 bn). We note that these  11MFY19 run-rate
numbers are prior to refunds and the final numbers will be released at month-end by the CGA at Rs896 bn;
(cash-accounting basis). 7.35 mn returns were filed in January against 7.33 mn in December. unallocated
compensation cess
Central government will meet FY2019RE GST estimates through compensation cess funds
fund likely around
Accounting for refunds, on a cash accounting basis, January collections would likely be around Rs800 bn
Rs881 bn, implying an 11MFY19 run-rate of around Rs896 bn. For11MFY19, CGST would be
around Rs4.1 tn with unallocated IGST at Rs267 bn. SGST would likely be around Rs4.6 tn. We  Maintain our
note that in FY2019RE the government had reduced its CGST target to Rs5 tn along with the FY2019 GFD/GDP
unallocated IGST at Rs500 bn. This implies that the government needs to garner Rs1.2 tn in the estimate at 3.4%
final month towards central share. However, if the government does not make any further
allocation to states from the compensation cess fund, the shortfall will be nullified due to the
equal sharing of unallocated compensation fund (notified on January 29, 2019). We note that
the unallocated amount would be around Rs800 bn at end-FY2019.
Suvodeep Rakshit
Upasna Bhardwaj
Avijit Puri
Contact: +91 22 6218 6427
For Private Circulation Only.

India Economy
Exhibit 1: GST run rate below required rate but shortfall likely to be covered with utilization of unallocated compensation cess fund
Summary of GST collections, March fiscal year-ends (Rs bn)
Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19
Monthly collections (PIB press releases)
Center 325 288 316 579 370 306 490 351 439 361 371
Center GST (CGST) 187 159 160 159 153 153 165 168 164 178 176
Centre's share of IGST (C-IGST) 138 129 157 420 217 153 325 183 274 183 195
States 403 340 367 638 411 350 529 388 463 395 399
States' GST (SGST) 257 217 220 223 212 211 228 231 225 248 242
States' share of IGST (S-IGST) 146 123 147 415 200 140 301 157 238 147 157
Unallocated IGST 222 239 192 (335) 82 209 (92) 158 (33) 182 117
Compensation cess 86 73 81 84 76 80 80 80 79 87 85
Total 1,035 940 956 965 940 944 1,007 976 947 1,025 972
FYTD collections (post refund adjustments)
Centre 521 971 1,383 1,563 1,975 2,421 2,759 3,193 3,530 3,976 4,384
- CGST 321 602 911 1,490 1,851 2,149 2,629 2,973 3,404 3,754 4,117
- Unallocated IGST 200 369 471 72 124 272 130 220 126 222 267
State 399 732 1,092 1,730 2,132 2,473 2,993 3,372 3,825 4,211 4,601
Total 1,004 1,860 2,712 3,609 4,498 5,364 6,298 7,191 8,058 8,974 9,855
FY2019RE
Centre 5,539
- Unallocated IGST 500
State 5,078
Compensation cess 900
Total 11,517
Required run rate to meet FY2019RE
Centre 456 457 462 497 509 520 556 586 670 782 1,155
State 425 435 443 418 421 434 417 426 417 433 476
Total 956 966 978 988 1,003 1,025 1,044 1,081 1,153 1,271 1,662
FYTD19 run rate
Centre 521 486 461 391 395 404 394 399 392 398 399
State 399 366 364 432 426 412 428 421 425 421 418
Total 1,004 930 904 902 900 894 900 899 895 897 896
Source: CGA, PIB, Kotak Economics Research estimates
30 KOTAK ECONOMIC RESEARCH

Kotak Institutional Equities: Valuation summary of KIE Universe stocks
31
Fair O/S ADVT

Price (Rs) Value Upside Mkt cap. shares EPS (Rs) EPS growth (%) P/E (X) EV/EBITDA (X) P/B (X) RoE (%) Dividend yield (%) 3mo
Company Rating 1-Mar-19 (Rs) (%) (Rs bn) (US$ bn) (mn) 2019E 2020E 2021E 2019E 2020E 2021E 2019E 2020E 2021E 2019E 2020E 2021E 2019E 2020E 2021E 2019E 2020E 2021E 2019E 2020E 2021E (US$ mn)
Amara Raja Batteries REDUCE 727 700 (4) 124 1.8 171 29 35 40 4.9 21 14.7 25 21 18.1 13 10.7 9.2 3.7 3.2 2.8 15.7 16.6 16.6 0.6 0.7 0.8 4.9
Apollo Tyres BUY 220 310 41 126 1.8 541 16 21 25 20 33 17 13.7 10.3 8.8 7.8 6.6 5.5 1.2 1.1 1.0 9.1 11.2 11.9 1.4 1.4 1.4 7.4
Ashok Leyland BUY 87 140 62 254 3.6 2,926 6.7 8.0 8.0 12.7 18 -0.2 12.9 10.9 10.9 8.2 6.7 7.0 3.0 2.6 2.2 25 26 22 2.3 2.8 2.8 31
Bajaj Auto REDUCE 2,864 2,400 (16) 829 11.7 289 147 162 171 5.0 10.3 5.2 19.4 17.6 16.8 14 12 11.2 3.9 3.5 3.1 21 21 19.7 2.1 2.3 2.4 19.6
Balkrishna Industries BUY 895 950 6 173 2.4 193 42 49 53 11.1 17 9.6 22 18.4 16.8 11.4 10.0 8.9 3.6 3.1 2.7 18.1 18.2 17.1 0.6 0.6 0.7 9.7
Bharat Forge SELL 519 445 (14) 242 3.4 466 23 25 25 43 6.9 2.0 22 21 21 13 11.8 11.2 4.4 3.8 3.4 21 19.6 17.5 1.0 1.1 1.2 13.1
CEAT ADD 1,111 1,150 4 45 0.6 40 67 80 91 3.2 19 13.9 16.6 14.0 12.3 9.5 8.5 7.6 1.6 1.4 1.3 9.9 10.8 11.2 0.7 0.7 0.8 9.9
Eicher Motors SELL 19,938 18,400 (8) 544 7.7 27 855 963 1,039 7.8 12.7 8.0 23 21 19.2 16 14 13 7.6 6.0 4.8 37 32 28 0.2 0.2 0.0 36
Endurance Technologies SELL 1,275 925 (27) 179 2.5 141 36 42 51 23 16 22 36 31 25 16 14 11.7 6.9 5.8 4.8 19.3 18.9 19.3 0.4 0.5 0.6 0.6
Escorts BUY 674 1,050 56 57 1.2 89 57 66 72 47 15 8.9 11.8 10.2 9.4 7.0 5.9 4.9 2.0 1.7 1.5 17.1 17.0 16.1 1.3 1.5 1.6 19.6
Exide Industries SELL 218 220 1 186 2.6 850 9.1 10.2 11.5 10.9 12.2 12.7 24 21 19.0 13 11.7 10.3 3.1 2.9 2.6 13.7 14.0 14.5 1.4 1.6 1.8 6.5
Hero Motocorp SELL 2,676 2,400 (10) 534 7.5 200 168 173 181 (9.1) 2.9 4.5 15.9 15.5 14.8 9.3 8.9 8.3 4.1 3.7 3.4 27 25 24 3.1 3.2 3.4 29
Mahindra CIE Automotive ADD 235 265 13 89 1.3 378 14.5 16 18 48 11.2 9.3 16.2 14.6 13.3 9.2 8.1 7.3 2.1 1.8 1.6 13.7 13.3 12.7 — — — 0.5
Mahindra & Mahindra BUY 649 1,000 54 807 11.4 1,138 46 50 54 22 8.3 8.7 14.0 12.9 11.9 10.4 8.6 7.7 2.1 1.9 1.7 16.2 15.5 15.0 1.4 1.5 1.7 42
Maruti Suzuki BUY 6,935 7,600 10 2,095 29.6 302 264 328 367 3.1 24 12.0 26 21 18.9 14 10.8 9.2 4.4 3.9 3.4 17.9 19.5 19.1 1.0 1.2 1.3 85
Motherson Sumi Systems SELL 161 125 (22) 507 7.2 3,158 5.5 6.7 7.6 0.1 22 13.8 29 24 21 10.6 9.0 7.7 4.6 4.0 3.6 16.5 17.9 17.9 0.9 1.0 1.2 16.6
MRF REDUCE 57,129 56,000 (2) 242 3.4 4 2,672 3,214 3,590 0.1 20 11.7 21 17.8 15.9 9.0 7.7 6.6 2.2 2.0 1.8 11.0 11.8 11.8 0.1 0.1 0.1 6.4
Schaeffler India REDUCE 5,400 5,300 (2) 90 1.3 31 144 179 211 14.9 24 18 38 30 26 11.1 8.4 6.9 6.2 5.2 4.4 17.9 18.8 18.7 0.2 0.2 0.2 0.5
SKF ADD 1,933 2,050 6 99 1.4 51 67 82 97 17 22 17 29 23 20.0 18 15 12 4.7 4.1 3.5 16.4 17.3 17.5 0.6 0.7 0.9 1.2
Tata Motors BUY 180 280 55 612 8.0 3,396 (9.4) 19 30 (147) 301 57 NM 9.5 6.1 5.5 4.2 3.5 0.9 0.9 0.7 NM 9.4 13.1 — — — 42
Timken SELL 567 550 (3) 43 0.6 68 19 22 25 39 16 15.0 30 26 23 18 15 13 4.6 3.9 3.3 16.6 16.2 15.8 0.2 0.2 0.2 0.2
TVS Motor SELL 468 350 (25) 222 3.1 475 14.6 18 19 4.7 22 7.7 32 26 24 16 14 13 6.7 5.8 5.0 22 23 22 0.9 1.1 1.2 12.9
Varroc Engineering BUY 605 950 57 82 1.2 135 32 42 61 (4.1) 32 43 18.9 14.3 10.0 9.0 7.2 5.3 2.5 2.1 1.7 13.2 14.8 17.5 — — — 0.3
WABCO India SELL 6,525 6,100 (7) 124 1.7 19 183 222 230 27 22 3.6 36 29 28 25 20 18 6.7 5.5 4.7 21 21 17.9 0.2 0.2 0.2 0.6
Automobiles & Components Neutral 8,305 116.9 (17.8) 46 16 25 17.1 14.8 9.9 8.0 6.9 3.0 2.7 2.3 12.0 15.6 15.9 1.1 1.2 1.3 395
Banks
Axis Bank REDUCE 702 670 (5) 1,806 25.5 2,567 18 46 53 1,555 161 14.4 40 15.2 13.3 — — — 2.9 2.5 2.1 7.0 16.2 16.2 0.4 1.0 1.1 105
Bank of Baroda ADD 108 140 30 286 4.0 2,652 10.4 25 29 214 143 16 10.4 4.3 3.7 — — — 0.9 0.7 0.6 6.6 15.7 13.8 — — — 23
Canara Bank ADD 242 280 16 183 2.6 733 9.4 53 68 116 458 30 26 4.6 3.6 — — — 1.3 0.9 0.6 1.9 10.1 11.8 — — — 18.8
City Union Bank ADD 188 200 6 138 1.9 732 9.5 10.6 12.3 7.1 11.0 16 19.7 17.8 15.3 — — — 3.1 2.8 2.4 15.7 15.4 15.8 0.9 1.0 1.2 2.4
DCB Bank BUY 183 210 15 57 0.8 308 10.3 12.7 17 29 24 33 17.9 14.4 10.8 — — — 2.1 1.9 1.6 11.7 13.0 15.3 0.5 0.7 0.9 4.5
India Daily Summary - March 5, 2019

Equitas Holdings BUY 116 180 55 40 0.6 340 6.1 9.7 13.4 558 60 39 19.1 12.0 8.6 — — — 1.7 1.5 1.3 8.7 12.5 15.0 — — — 4.6
Federal Bank BUY 86 110 28 170 2.4 1,972 6.1 8.3 10.1 36 37 22 14.2 10.3 8.5 — — — 1.4 1.3 1.2 9.4 11.9 13.3 1.6 2.2 2.7 15.9
HDFC Bank ADD 2,083 2,200 6 5,671 80.0 2,595 78 93 110 15 20 18 27 22 18.9 — — — 3.9 3.5 3.0 16.6 16.2 16.8 0.7 0.9 1.0 74
ICICI Bank BUY 354 430 21 2,282 32.2 7,072 8.3 27 32 (12.9) 223 19 42 13.1 11.0 — — — 2.4 2.0 1.7 5.0 15.0 15.8 0.5 1.5 1.8 93
IDFC First Bank NR 48 — — 227 3 3,404 (3.3) 1.6 2.6 (229) 149 66 NM 30 18.0 — — — 1.2 1.2 1.1 NM 4.0 6.4 — 0.5 0.8 9.7
IndusInd Bank BUY 1,516 1,700 12 914 12.9 600 56 75 94 (7) 35 25 27 20 16.1 — — — 3.3 3.0 2.6 14.2 15.0 16.4 0.4 0.6 0.7 41
J&K Bank BUY 39 90 130 22 0.3 557 7.1 9.6 18 95 35 84 5.5 4.1 2.2 — — — 0.5 0.4 0.3 6.2 8.0 13.5 3.6 4.9 9.0 0.6
Karur Vysya Bank ADD 69 85 23 55 0.8 799 2.3 4.4 8.6 (51) 89 96 30 15.7 8.0 — — — 1.1 0.9 0.8 2.7 4.9 9.1 0.8 1.6 3.2 1.5
Punjab National Bank ADD 77 95 24 291 4.1 2,761 (15) 13.0 15 67 188 18 NM 5.9 5.0 — — — 1.6 0.9 0.8 NM 11.2 11.6 — — — 25
RBL Bank SELL 596 515 (14) 254 3.6 420 20 28 34 35 35 22 29 22 17.7 — — — 3.5 3.1 2.8 12.2 14.7 15.8 0.5 0.7 0.8 9.7
KOTAK INSTITUTIONAL EQUITIES RESEARCH
State Bank of India BUY 273 370 36 2,436 34.4 8,925 7.4 38 51 201 412 35 37 7.2 5.4 — — — 1.6 1.2 1.0 3.0 13.9 16.2 0.1 0.2 0.2 74
Ujjivan Financial Services BUY 287 350 22 35 0.5 121 15 25 31 2,480 62 23 18.7 11.6 9.4 — — — 1.8 1.6 1.4 10.1 14.6 15.7 0.5 0.9 1.2 9.9
Union Bank ADD 77 90 17 90 1.3 1,169 0.3 11.2 29 101 3,653 160 258 6.9 2.6 — — — 1.1 0.7 0.4 0.1 5.6 13.3 0.1 2.2 5.7 11.3
YES Bank SELL 237 200 (16) 549 7.8 2,303 18 18 23 (1.5) 0.1 30 13.1 13.1 10.1 — — — 2.0 1.8 1.5 15.2 13.5 15.6 1.3 1.3 1.6 182
Banks Attractive 15,505 218.8 750 166 26 34 12.6 10.0 1.9 1.6 1.4 5.6 12.9 14.2 0.5 0.8 1.0 705
Source: Company, Bloomberg, Kotak Institutional Equities estimates
KOTAK ECONOMIC RESEARCH 31


Fair O/S ADVT
Building Products
Astral Poly Technik SELL 1,085 720 (34) 130 1.8 120 18 22 26 20 25 17 62 49 42 32 27 23 10 8.5 7.1 18.3 18.7 18.3 0.1 0.1 0.1 1.2
Building Products Cautious 130 1.8 20 25 17 61 49 42 32 27 23 10 8.4 7.1 16.4 17.2 16.9 0.1 0.1 0.1 1.2
Capital goods
ABB SELL 1,241 1,005 (19) 263 3.7 212 12.0 17 25 12.7 44 44 103 72 50 54 44 32 6.6 5.9 5.3 6.7 8.6 11.1 0.4 0.5 16.1 2.4
Ashoka Buildcon BUY 121 205 69 34 0.5 282 10.2 11.0 11.2 21 7.3 1.8 11.9 11.1 10.9 8.0 7.4 6.8 1.6 1.4 1.3 14.0 13.4 12.2 1.1 1.1 1.2 0.4
Bharat Electronics BUY 85 100 18 207 2.9 2,437 5.7 5.8 5.2 (2.9) 2.5 (11.6) 14.9 14.5 16.4 9.2 7.6 7.6 2.3 2.1 2.0 16.5 15.4 12.6 2.3 2.4 2.1 12.7
BHEL REDUCE 66 65 (2) 230 3.3 3,482 3.0 2.7 4.2 29 (9.4) 53 22 24 15.9 12 10.1 6.8 0.7 0.7 0.7 3.3 3.0 4.5 2.4 1.8 2.5 12.2
Carborundum Universal SELL 381 315 (17) 72 1.0 189 13.7 17 19 20 22 14.3 28 23 19.9 16 13 10.8 4.2 3.7 3.3 15.7 17.3 17.7 1.1 1.3 1.5 0.4
CG Power and Industrial BUY 37 67 83 23 0.3 627 3.0 4.8 7.0 273 59 45 12.0 7.6 5.2 5.6 3.9 2.9 0.9 0.8 0.7 7.1 11.1 14.8 — — — 7.1
Cochin Shipyard BUY 364 555 53 48 0.7 132 35 37 39 16 6.4 6.9 10.5 9.9 9.2 4.2 4.1 5.0 1.4 1.3 1.2 13.8 13.8 13.5 2.8 2.9 3.2 0.3
Cummins India REDUCE 705 720 2 195 2.8 277 28 32 37 16 15 15 25 22 19.0 20 17 15 4.6 4.3 4.0 18.8 20 22 2.1 2.5 2.9 7.8
Dilip Buildcon BUY 447 775 73 61 0.9 137 59 54 63 26 (8.0) 16 7.6 8.3 7.1 5.5 4.7 4.3 1.9 1.5 1.3 28 20 19.4 0.3 0.3 0.3 2.2
IRB Infrastructure BUY 141 250 77 50 0.7 351 27 30 16 21 8.6 (44.6) 5.2 4.8 8.6 6.4 6.9 8.6 0.8 0.7 0.6 15.7 14.9 7.6 2.2 2.6 2.7 4.5
Kalpataru Power Transmission BUY 398 530 33 61 0.9 153 31 35 43 58 14.6 22 13.0 11.3 9.2 7.9 6.3 5.1 2.0 1.7 1.4 16.3 16.1 16.9 0.4 0.4 0.4 0.4
KEC International BUY 268 360 35 69 1.0 257 20 25 31 11.8 24 23 13.4 10.7 8.7 7.9 6.7 5.5 2.8 2.3 1.9 23 23 23 0.8 1.0 1.2 1.4
L&T BUY 1,309 1,530 17 1,835 25.9 1,401 63 67 77 22 6.3 14.8 21 19.5 17.0 17 16 15 3.2 2.9 2.6 16.4 15.5 16.1 1.6 1.7 2.0 52
Sadbhav Engineering BUY 209 280 34 36 0.5 172 13.8 17 17 7.3 26 (0.6) 15.2 12.1 12.1 11.0 8.8 7.7 1.7 1.5 1.4 12.0 13.4 11.8 — — — 0.6
Siemens SELL 1,009 995 (1) 359 5.1 356 29 34 40 14.1 20 17 35 29 25 21 17 14 4.0 3.7 3.3 11.8 13.1 14.0 0.8 1.0 1.1 10.9
Thermax REDUCE 998 990 (1) 119 1.7 113 27 38 43 29 42 12.4 37 26 23 26 19 16 26 19 16 10.7 13.9 14.2 0.8 1.0 1.2 0.9
Capital goods Neutral 3,662 51.7 20 8.7 12.6 21 18.9 16.8 2.5 2.3 2.1 12.2 12.2 12.6 1.5 1.5 2.9 705
Commercial & Professional Services
SIS REDUCE 792 800 1 58 0.8 73 27 36 43 19 36 19 30 22 18.4 17 13 10.8 4.9 4.1 3.4 17.7 20 20 0.3 0.4 0.5 0.5
TeamLease Services SELL 2,894 2,000 (31) 49 0.7 17 59 76 99 37 29 30 49 38 29 50 38 29 9.1 7.4 5.9 20 21 22 — — — 0.8
Commercial & Professional Services Cautious 108 1.5 26 33 23 36 27 22 24 18 15 6.2 5.1 4.2 17.1 18.8 19.0 0.2 0.2 0.3 1.2
Commodity Chemicals
Asian Paints REDUCE 1,392 1,225 (12) 1,336 18.8 959 24 30 36 19 25 19 57 46 38 35 28 24 14 12 11 26 29 30 0.8 1.0 1.2 28
Tata Chemicals ADD 565 700 24 144 2.0 255 40 48 53 (22) 18 11.8 14.0 11.9 10.6 6.5 5.3 4.5 1.2 1.1 1.1 8.9 9.8 10.3 2.7 3.0 3.0 6.0
Commodity Chemicals Neutral 1,479 20.9 2.1 23 17 44 36 31 25 20 17 6.9 6.3 5.7 15.6 17.6 18.7 1.0 1.2 1.4 34
Conglomerate
Godrej Industries RS 495 — — 166 2.3 336 16 20 — 8.9 24 31 25 27 29 4.1 3.6 13.9 15.1 0.4 0.4 2.9
Conglomerate Neutral 166 2.3 8.9 24 31 25 27 29 4.1 3.6 13.1 14.2 0.4 0.4 2.9
Construction Materials
ACC SELL 1,482 1,280 (14) 278 3.9 188 54 68 79 9.9 27 15 28 22 18.8 14 11.5 9.9 2.6 2.4 2.2 10.1 11.6 12.2 0.9 0.9 0.9 13.2
Ambuja Cements REDUCE 217 190 (13) 432 6.1 1,986 7.2 9.4 11.2 (4.8) 31 19 30 23 19.4 9.2 7.7 6.4 1.9 1.8 1.7 6.6 8.1 9.1 0.7 1.3 1.3 7.7
Dalmia Bharat ADD 1,078 1,170 — 207 2.9 192 6.6 35 50 (55) 421 44 175 34 23 15 10.7 9.3 2.1 2.0 1.9 1.2 6.2 8.3 — — — 0.0
Grasim Industries ADD 791 930 18 520 7.3 657 65 74 98 37 13.6 33 12.2 10.7 8.1 7.4 6.9 5.8 0.9 0.8 0.7 7.3 7.9 9.7 0.7 0.7 0.7 15.7
India Cements REDUCE 92 84 (9) 29 0.4 308 3.0 6.4 9.0 (7.9) 112 42 31 14.5 10.2 8.9 7.2 6.3 0.5 0.5 0.5 1.8 3.7 5.0 1.1 1.1 1.1 7.7
J K Cement ADD 732 770 5 57 0.8 70 31 61 62 (28) 97 1.9 24 12.0 11.8 10.3 9.1 7.4 2.1 1.9 1.6 10.3 16.5 14.8 1.1 1.1 1.1 0.3
JK Lakshmi Cement ADD 326 325 (0) 38 0.5 118 3.1 22 31 (31) 624 37 105 14.6 10.7 13 7.1 5.8 2.6 2.3 1.9 2.5 16.8 19.5 0.6 0.6 0.6 0.4
Orient Cement ADD 75 80 7 15 0.2 205 0.1 6.2 10.4 (97.5) 11,412 67 1,394 12.1 7.2 11.4 6.3 4.6 1.6 1.4 1.3 0.1 12.4 18.5 2.0 2.7 2.7 0.1
Shree Cement SELL 16,687 11,750 (30) 581 8.2 35 339 512 642 (15) 51 25 49 33 26 21 15 12 6.0 5.2 4.4 12.7 17.0 18.2 0.3 0.3 0.3 5.7
UltraTech Cement SELL 3,878 2,550 (34) 1,065 15.0 275 79 128 166 (10.7) 62 30 49 30 23 21 15 13 3.8 3.4 3.0 8.1 12.0 13.8 0.3 0.3 0.3 19.8
Construction Materials Cautious 3,239 45.7 4.2 42 28 31 22 16.9 11.9 9.7 8.0 2.2 2.0 1.8 7.0 9.2 10.7 0.5 0.6 0.6 71

32
Fair O/S ADVT
33
Consumer Durables & Apparel
Crompton Greaves Consumer SELL 210 200 (5) 132 1.9 627 6.0 7.2 8.5 16 21 17 35 29 25 22 18 16 12 9.0 6.9 39 35 32 1.0 1.2 — 1.5
Havells India SELL 708 520 (27) 443 6.2 625 13.4 17 20 21 23 18 53 43 36 34 27 23 10 9.2 8.0 21 23 24 0.7 0.8 1.0 12.9
Page Industries SELL 22,247 22,300 0 248 3.5 11 397 479 578 28 21 21 56 46 38 36 30 25 25 20 16 48 48 47 1.2 1.0 1.2 19.2
TCNS Clothing Co. BUY 810 830 3 50 0.7 64 21 22 26 37 3.4 20 39 37 31 26 20 16 8.8 6.9 5.5 26 21 19.7 — — — 0.3
Vardhman Textiles ADD 1,055 1,230 17 61 0.9 56 124 129 139 20.8 4.1 7.5 8.5 8.2 7.6 6.8 6.5 5.8 1.1 1.0 0.9 13.4 12.6 12.4 1.9 2.8 2.8 0.2
Voltas SELL 575 500 (13) 190 2.7 331 16 18 22 (5.2) 11.8 20 35 31 26 26 23 19 4.4 4.0 3.6 13.2 13.4 14.5 0.6 0.6 0.8 9.6
Whirlpool SELL 1,439 1,220 (15) 183 2.6 127 33 40 46 20 21 15 43 36 31 27 22 19 8.5 7.2 6.3 21 22 22 0.3 0.6 1.0 1.3
Consumer Durables & Apparel Cautious 1,305 18.4 17 16 38 33 28 24 21 18 6.9 6.0 18.3 18.6 18.9 0.8 0.9 45
Consumer Staples
Bajaj Consumer Care ADD 349 405 16 52 0.7 148 15 17 19 7.8 10.1 9.1 23 21 18.9 18 15 13 11 11 11 47 53 57 4.0 4.0 4.3 0.4
Britannia Industries REDUCE 3,077 2,935 (5) 740 10.4 240 50 60 71 19 21 18 62 51 43 41 34 29 17 14 12 31 31 30 0.6 0.7 0.9 14.2
Colgate-Palmolive (India) ADD 1,246 1,400 12 339 4.8 272 27 32 37 16 16 17 45 39 33 26 23 20 20 17 15 46 47 48 1.3 1.5 1.8 9.7
Dabur India REDUCE 445 390 (12) 787 11.1 1,762 8.8 10.3 11.9 12.8 17 16 51 43 37 42 35 30 14 12 11 27 30 30 0.8 1.0 1.2 16.0
GlaxoSmithKline Consumer RS 7,207 — — 303 4.3 42 218 240 265 31 10.1 10.6 33 30 27 23 21 18 7.6 6.8 6.1 25 24 24 1.2 1.5 1.7 4.0
Godrej Consumer Products REDUCE 679 700 3 694 9.8 1,022 15 18 21 6.6 19 16 45 38 33 31 26 22 9.1 8.0 7.0 22 23 23 0.8 0.9 1.1 11.6
Hindustan Unilever REDUCE 1,735 1,600 (8) 3,756 53.0 2,160 29 34 39 18 18 13.8 60 51 45 42 35 31 47 39 33 83 83 79 1.2 1.4 1.6 43
ITC ADD 278 325 17 3,408 48.1 12,275 9.8 11.0 12.2 10.4 11.3 11.8 28 25 23 18 16 14 6.2 5.8 5.5 21 22 24 2.1 2.4 2.8 51
Jyothy Laboratories ADD 180 210 17 66 0.9 364 5.5 6.2 7.2 24 13.8 16 33 29 25 23 20 17 4.9 4.3 3.8 16.2 16.0 16.4 0.6 0.8 1.1 0.8
Marico ADD 335 380 13 432 6.1 1,291 7.2 8.8 10.3 14.5 23 17 47 38 32 33 27 23 16 14 13 35 40 42 1.4 1.6 1.9 9.0
Nestle India REDUCE 10,452 10,600 1 1,008 14.2 96 167 194 220 31 16 13.7 63 54 47 37 32 28 27 25 23 45 49 51 1.1 1.3 1.5 13.1
Tata Global Beverages ADD 197 220 12 125 1.8 631 7.3 8.7 9.8 — 18 13.0 27 23 20 16 13 11.7 1.7 1.7 1.6 6.5 7.4 8.0 1.5 1.8 2.0 5.6
United Breweries REDUCE 1,378 1,390 1 364 5.1 264 24 30 37 59 26 23 58 46 37 29 25 21 11 9.3 7.7 21 22 23 0.3 0.4 0.5 12.3
United Spirits REDUCE 565 550 (3) 410 5.8 727 10.9 13.3 17 44 22 25 52 42 34 32 26 22 12 8.5 5.8 27 24 20 — 0.4 0.4 13.5
Varun Beverages BUY 811 900 11 148 2.1 183 16 19 26 39 22 33 51 42 31 17 15 11.7 7.4 6.4 5.4 15.5 16.5 18.7 0.3 0.1 0.2 0.9
Consumer Staples Cautious 12,631 178.2 16 15 14.2 43 37 33 28 24 21 11 10 9.2 27 28 28 1.3 1.5 1.7 206
Diversified Financials
Bajaj Finance REDUCE 2,661 2,250 (15) 1,538 21.7 575 67 90 118 54 34 31 40 30 23 — — — 8.0 6.4 5.1 22 24 25 0.3 0.3 0.4 60
Bajaj Finserv ADD 6,441 6,500 1 1,025 14.5 159 242 307 384 38 27 25 27 21 16.8 — — — 4.2 3.5 2.9 17.5 18.3 19.1 0.2 0.2 0.2 19.5
Bharat Financial Inclusion NA 950 — — 133 1.9 139 63 68 86 93 8.1 27 15.1 13.9 11.0 — — — 3.4 2.7 2.1 25 21 21 — — — 9.5
Cholamandalam BUY 1,269 1,475 16 198 2.8 156 76 91 111 30 20 22 16.6 13.9 11.4 — — — 3.4 2.8 2.3 21 21 21 0.7 0.9 1.1 5.5
HDFC ADD 1,859 2,125 14 3,199 45.1 1,676 54 60 71 (29) 11.6 18 35 31 26 — — — 4.3 3.9 3.6 13.3 13.2 14.4 1.1 1.2 1.4 79
IIFL Holdings REDUCE 346 410 18 110 1.6 319 26 28 33 (9.0) 9.4 17 13.3 12.2 10.4 — — — 1.9 1.7 1.5 15.6 15.1 15.9 1.6 1.8 2.1 1.0

L&T Finance Holdings REDUCE 128 145 13 256 3.6 1,996 11.7 13.0 15.0 59 11.2 16 11.0 9.9 8.5 — — — 1.9 1.6 1.4 17.7 17.7 17.7 1.6 2.0 1.9 13.1
LIC Housing Finance BUY 475 590 24 240 3.4 505 46 54 63 4.8 17 17 10.4 8.9 7.6 — — — 1.6 1.4 1.2 16.2 16.0 16.4 1.5 1.8 2.1 12.7
Magma Fincorp BUY 111 145 30 30 0.4 237 11.3 15 18 16 35 18 9.9 7.3 6.2 — — — 1.1 1.0 0.9 12.1 14.3 14.9 1.5 2.1 2.4 0.2
Mahindra & Mahindra Financial ADD 411 475 15 254 3.6 614 22 27 33 25 23 23 18.8 15.3 12.4 — — — 2.6 2.3 2.1 13.6 14.9 16.4 1.2 1.5 1.8 10.5
Muthoot Finance ADD 531 550 4 213 3.0 400 48 45 50 11.3 (6.0) 11.2 11.1 11.8 10.6 — — — 2.3 2.0 1.8 23 18.3 17.9 2.1 2.0 2.2 11.3
PNB Housing Finance REDUCE 910 950 4 152 2.2 167 62 70 83 (3.5) 12.8 19 14.7 13.0 10.9 — — — 2.1 1.9 1.7 15.1 14.8 15.6 0.4 0.4 0.4 2.6
Shriram City Union Finance ADD 1,652 1,950 18 109 1.5 66 146 158 188 45 8.2 19 11.3 10.5 8.8 — — — 1.8 1.6 1.4 16.2 15.4 16.0 1.1 1.2 1.4 0.5
Shriram Transport BUY 1,160 1,475 27 263 3.7 227 109 128 147 57 18 15 10.7 9.1 7.9 — — — 1.8 1.5 1.3 16.9 17.3 17.2 1.3 1.5 1.9 20
Diversified Financials Neutral 7,720 108.9 8.0 18 21 24 20 16.9 3.6 3.1 2.7 14.9 15.4 16.2 0.8 1.0 1.1 246


Fair O/S ADVT
Electric Utilities
CESC BUY 686 800 17 91 1.3 133 63 97 107 (6.8) 55 10.4 11.0 7.1 6.4 6.9 5.7 5.2 0.7 0.7 0.6 6.7 10.0 10.2 1.7 1.6 1.6 4.9
JSW Energy REDUCE 66 67 2 107 1.5 1,640 4.3 5.4 5.7 42 25 5.6 15.1 12.1 11.5 5.9 5.0 4.5 0.9 0.8 0.8 6.2 7.2 7.1 — — — 0.7
NHPC ADD 23 28 21 232 3.3 10,260 2.7 2.7 3.5 10.4 0.9 28 8.6 8.5 6.7 7.7 7.5 6.4 0.8 0.7 0.7 9.1 8.8 10.9 6.5 6.0 7.9 2.1
NTPC BUY 143 190 33 1,179 16.6 8,245 13.0 14.7 17 3.9 12.8 14.1 11.0 9.7 8.5 9.2 8.2 6.9 1.1 1.0 0.9 10.2 10.8 11.4 2.7 3.1 3.5 23
Power Grid BUY 183 235 28 959 13.5 5,232 18 21 24 16 17 11.5 10.0 8.6 7.7 7.3 6.8 6.4 1.6 1.4 1.3 16.7 17.6 17.6 3.3 3.9 4.3 16.6
Tata Power BUY 67 85 27 181 2.6 2,705 4.4 5.2 7.6 (18.3) 19 46 15.4 12.9 8.8 9.8 10.2 9.7 1.1 1.0 0.9 7.5 8.2 10.9 — — — 6.2
Electric Utilities Attractive 2,750 38.8 7.8 15 15 10.7 9.3 8.0 1.1 1.1 1.0 10.7 11.4 12.2 2.9 3.2 3.8 53
Fertilizers & Agricultural Chemicals
Bayer Cropscience SELL 4,273 3,550 (17) 147 2.1 34 94 114 135 7.4 21 19 45 38 32 28 23 19 7.2 6.3 5.5 17.0 18.0 18.6 0.4 0.5 0.6 0.4
Dhanuka Agritech ADD 415 435 5 20 0.3 49 20 24 28 (22.1) 21 17 21 17.2 14.6 15 11.7 9.5 2.9 2.6 2.3 14.7 15.8 16.4 1.0 1.2 1.5 0.1
Godrej Agrovet ADD 482 540 12 93 1.3 189 11.4 16 20 (1.0) 38 — 42 31 24 21 16 13 4.8 4.2 — 12.2 14.6 15.9 0.4 0.5 0.6 0.7
Kaveri Seed SELL 409 515 26 26 0.4 66 34 34 37 7.3 0.1 8.3 11.9 11.9 11.0 8.7 8.0 6.9 2.9 2.5 2.2 26 22 21 2.0 2.4 2.4 10.1
PI Industries BUY 930 970 4 128 1.8 138 30 39 46 13.9 27 19 31 24 20 22 17 14 5.7 4.8 4.0 20.0 21 21 0.5 0.6 0.7 1.3
Rallis India ADD 151 195 29 29 0.4 195 8.8 10.5 11.1 1.7 20 5.4 17.2 14.3 13.6 11.4 9.5 8.5 2.3 2.1 2.0 13.8 15.4 15.0 2.4 2.6 2.9 1.0
UPL ADD 870 775 (11) 443 6.3 507 45 55 62 6.0 21 12.9 19.2 15.9 14.1 11.6 10.1 8.8 4.1 3.4 2.8 23 23 22 1.0 1.3 1.4 21
Fertilizers & Agricultural Chemicals Attractive 886 12.5 5.5 21 14.5 24 19.4 16.9 14 12 10.6 4.4 3.8 3.2 18.8 19.4 18.9 0.8 1.1 1.2 35
Gas Utilities
GAIL (India) BUY 344 455 32 775 10.9 2,255 29 33 34 40 13.8 5.9 12.0 10.6 10.0 7.7 6.7 6.3 1.8 1.6 1.5 15.3 16.0 15.5 3.2 3.3 3.6 23
GSPL SELL 159 170 7 90 1.3 564 15 14.3 13.6 31 (7.6) (4.6) 10.3 11.1 11.7 4.2 4.1 3.8 1.6 1.4 1.3 16.1 13.2 11.4 1.5 1.3 1.3 1.0
Indraprastha Gas SELL 292 250 (14) 204 2.9 700 11.9 13.7 15 16 14.7 11.3 25 21 19.2 15 13 11.8 5.0 4.4 3.9 22 22 22 0.9 1.3 1.7 8.9
Mahanagar Gas ADD 920 950 3 91 1.3 99 57 62 64 19 7.6 4.2 16.1 14.9 14.3 9.3 8.6 8.0 3.8 3.4 3.1 25 24 23 2.5 3.0 3.5 4.2
Petronet LNG BUY 223 270 21 335 4.7 1,500 15 18 20 11.2 15 11.8 14.5 12.5 11.2 9.6 8.2 7.2 3.2 2.9 2.6 23 24 24 3.5 4.0 4.9 9.6
Gas Utilities Attractive 1,496 21.1 29 12.4 6.8 13.6 12.1 11.3 8.4 7.4 6.8 2.2 2.0 1.9 16.5 16.9 16.5 2.8 3.1 3.5 46
Health Care Services
Apollo Hospitals ADD 1,152 1,275 11 160 2.3 139 23 30 37 177 30 21 49 38 31 18 16 14 4.6 4.2 3.9 9.6 11.7 12.9 0.5 0.7 0.8 14.7
Aster DM Healthcare BUY 156 240 54 79 1.1 505 6.1 8.3 11.9 120 37 44 26 18.9 13.1 12 9.8 7.8 2.5 2.3 2.0 10.3 12.7 16.1 — — — 0.3
Dr Lal Pathlabs SELL 1,018 945 (7) 85 1.2 83 24 28 33 17 15 18 42 37 31 26 22 19 9.0 7.6 6.4 23 22 22 0.5 0.5 0.6 1.7
HCG BUY 192 260 35 17 0.2 85 (2.5) 0.9 3.4 (261) 137 263 NM 207 57 18 14 11.7 3.3 3.3 3.1 NM 1.6 5.6 — — — 0.3
Narayana Hrudayalaya BUY 219 265 21 45 0.6 204 1.9 4.5 7.5 (25) 139 64 116 48 29 19 15 11.8 4.2 3.8 3.4 3.7 8.3 12.2 — — — 0.2
Health Care Services Attractive 386 5.4 72 38 34 45 33 25 17 14 11.9 4.2 3.8 3.4 9.3 11.7 13.8 0.3 0.4 0.5 17.1
Hotels & Restaurants
Coffee Day Enterprises NR 275 — — 58 0.8 211 7.6 10.1 12.5 127 34 24 36 27 22 12 10.4 9.6 2.3 2.1 0.0 6.5 8.1 9.2 — — — 0.9
Jubilant Foodworks BUY 1,277 1,450 14 168 2.4 132 24 32 42 67 33 30 52 40 30 26 20 16 13 9.8 7.6 28 28 28 0.2 0.2 0.3 47
Lemon Tree Hotels ADD 75 80 7 59 0.8 786 0.5 1.2 2.0 162 157 68 159 62 37 39 22 17 6.9 6.2 5.8 4.5 10.6 16.3 — — 1.2 0.5
Hotels & Restaurants Attractive 286 4.0 88 42 33 55 39 29 21 16 13 6.1 5.3 4.6 11.0 13.6 15.7 0.1 0.1 0.4 49
Insurance
HDFC Life Insurance ADD 363 435 20 732 10.3 2,007 6.5 8.1 9.8 18 24 21 56 45 37 — — — 14 12 11 26 29 31 0.5 0.6 0.7 4.3
ICICI Lombard SELL 950 720 (24) 432 6.1 454 26 32 36 35 24 15 37 30 26 — — — 8.0 6.7 5.6 23 24 23 0.6 0.8 0.9 6.3
ICICI Prudential Life BUY 325 480 48 467 6.6 1,436 8.9 10.3 12.3 (21) 16 20 36 32 26 — — — 6.1 5.3 4.6 18.1 18.1 18.7 0.5 0.5 0.6 7.8
Max Financial Services BUY 402 530 32 108 1.5 268 6.3 6.4 6.5 37 1.8 1.8 64 63 62 — — — 8.3 8.0 7.8 0.5 0.6 0.6 4.0
SBI Life Insurance BUY 608 790 30 608 8.6 1,000 12.7 14.3 16 10.8 12.4 12.1 48 42 38 — — — 8.0 6.9 6.0 18.0 17.5 17.0 0.3 0.4 0.4 2.4
Insurance Attractive 2,347 33.1 6.8 18 17 45 38 33 8.4 7.3 6.3 18.6 19.1 19.4 0.3 0.4 0.4 25

34
Fair O/S ADVT
35
Internet Software & Services
Info Edge ADD 1,798 1,720 (4) 220 3.1 121.6 24 32 39 6.8 35 20 75 55 46 59 42 34 8.3 7.5 6.7 12.3 14.2 15.4 0.4 0.5 0.5 5.6
Just Dial ADD 534 545 2 35 0.5 67.4 30 31 33 39 5.1 6.8 18.1 17.2 16.1 10.0 8.8 7.7 3.7 3.1 2.7 20 19.8 17.9 0.6 0.6 0.6 11.8
Internet Software & Services Attractive 254 3.6 16 23 15 53 43 37 40 31 26 7.1 6.3 5.6 13.6 14.8 15.2 0.5 0.5 0.5 17.4
IT Services
HCL Technologies ADD 1,053 1,140 8 1,428 20.1 1,409 73 78 82 17 6.7 6.3 14.5 13.6 12.8 9.5 8.5 7.7 3.3 2.8 2.5 25 22 21 0.8 2.9 3.1 29
Hexaware Technologies REDUCE 359 345 (4) 107 1.5 302 19 21 25 17 10.9 16 18.6 16.7 14.5 13 11.4 9.6 4.5 4.0 3.5 27 25 26 2.4 2.4 2.8 6.6
Infosys ADD 741 760 3 3,238 45.7 4,350 36 40 44 11.2 10.6 10.9 21 18.6 16.8 14 13 11.4 4.7 4.4 4.0 24 24 25 3.5 3.0 3.2 82
L&T Infotech ADD 1,707 2,000 17 296 4.2 175 86 96 112 35 11.9 16 19.9 17.8 15.3 14 12 10.5 6.2 5.1 4.1 35 31 30 1.4 1.5 1.8 4.6
Mindtree ADD 933 1,000 7 153 2.2 165 45 52 61 31 14.1 17 21 18.0 15.4 13 11.2 9.5 4.8 4.1 3.5 25 24 24 1.5 1.7 2.0 22
Mphasis REDUCE 1,033 900 (13) 192 2.7 193 56 63 65 29 11.1 3.7 18.3 16.5 15.9 13 11.4 10.6 3.8 3.4 3.1 20 22 20 1.9 2.4 2.9 4.5
TCS REDUCE 1,995 1,825 (9) 7,488 105.7 3,829 83 91 100 23 10.3 9.6 24 22 19.9 17 16 14 7.4 7.0 6.6 33 33 34 1.7 3.2 3.5 85
Tech Mahindra ADD 832 875 5 734 10.4 891 49 56 64 13.8 16 14.5 17.1 14.8 12.9 10.3 8.6 7.3 3.3 2.9 2.4 21 21 20 1.1 1.2 1.4 34
Wipro REDUCE 376 355 (6) 1,700 24.0 4,507 20 24 26 19 19 9.2 18.6 15.7 14.3 12 10.1 9.2 2.9 2.6 2.4 17.0 17.5 17.5 0.4 2.7 2.9 24
IT Services Cautious 15,336 216.4 16 10.8 9.9 21 18.6 16.9 14 13 11.5 4.9 4.5 4.1 24 24 24 1.8 2.9 3.2 291
Media
DB Corp. ADD 179 220 23 31 0.4 184 16 21 24 (10.5) 31 18 11.3 8.6 7.3 5.8 4.4 3.7 1.8 1.6 1.5 14.9 19.5 21 2.2 5.6 7.0 0.3
DishTV ADD 41 30 (27) 76 1.1 1,925 0.2 1.4 2.4 145 593 71 207 30 17.4 4.4 3.7 3.0 15 11 7.9 7.9 43 53 — — — 9.9
Jagran Prakashan REDUCE 96 110 15 28 0.4 311 8.9 11.1 13.0 (8.1) 25 17 10.8 8.7 7.4 4.4 3.6 3.0 1.5 1.5 1.4 13.4 17.6 20 5.2 9.4 9.4 0.2
PVR RS 1,493 NA - 70 1.0 47 37 51 65 38 37 28 40 29 23 15 11.6 9.8 5.8 5.0 4.2 15.5 18.3 19.8 0.2 0.3 0.4 9.0
Sun TV Network REDUCE 616 600 (3) 243 3.4 394 38 39 42 31 2.7 7.4 16.3 15.8 14.7 10.7 10.3 9.4 4.5 4.0 3.6 30 27 26 2.4 2.8 3.2 19.9
Zee Entertainment Enterprises ADD 487 400 (18) 467 6.6 960 17 20 22 14.7 15 11.9 28 25 22 17 15 13 5.4 4.8 4.2 20 21 20 0.9 1.1 1.4 66
Media Attractive 916 12.9 20 19 16 23 19.7 17.1 10.6 9.3 8.3 4.7 4.2 3.7 20 21 22 1.4 1.8 2.2 105
Metals & Mining
Hindalco Industries BUY 196 275 40 440 6.2 2,229 27 27 29 24 (1.3) 7.8 7.2 7.3 6.8 4.9 4.7 4.2 0.7 0.7 0.6 10.5 9.5 9.3 0.6 0.6 0.6 25
Hindustan Zinc REDUCE 270 235 (13) 1,141 16.1 4,225 20 20 21 (6.0) (0.1) 7.3 13.6 13.6 12.7 8.4 7.7 6.9 3.3 3.0 2.8 24 23 23 7.4 3.7 3.9 3.3
Jindal Steel and Power REDUCE 162 145 (10) 156 2.2 968 4.4 4.4 13.2 152 (0.1) 198 36 36 12.2 6.7 6.8 5.8 0.5 0.5 0.5 1.5 1.4 4.1 — — — 27
JSW Steel REDUCE 282 265 (6) 682 9.6 2,406 31 19 23 17 (38) 16 9.0 14.5 12.5 6.1 8.1 7.3 2.1 1.9 1.7 25 13.5 14.0 1.2 1.2 1.2 26
National Aluminium Co. BUY 54 78 45 100 1.4 1,933 9.7 6.7 7.0 236 (31.3) 4.4 5.5 8.0 7.7 2.5 3.5 3.4 1.0 1.0 1.0 17.3 11.9 12.5 11.2 11.2 11.2 7.9
NMDC REDUCE 103 110 7 325 4.6 3,164 13.5 9.4 10.1 15 (31) 7.6 7.6 11.0 10.2 4.5 6.6 6.0 1.2 1.2 0.0 16.8 11.0 11.4 5.4 5.4 5.4 5.6
Tata Steel ADD 507 535 5 575 8.1 1,205 87 68 81 29 (21.7) 19 5.8 7.4 6.3 5.5 6.5 6.2 0.9 0.9 0.8 16.7 12.1 13.4 2.0 2.0 2.0 61
Vedanta BUY 173 275 59 645 9.1 3,717 18 29 30 (14.7) 59 2.8 9.4 5.9 5.8 5.6 4.4 4.1 1.0 1.0 0.9 10.9 16.9 16.4 9.8 9.8 9.8 37
Metals & Mining Attractive 4,065 57.4 15 (6.7) 11.3 8.9 9.5 8.5 5.8 6.0 5.5 1.3 1.2 1.1 14.1 12.4 12.8 4.9 3.8 3.9 27



Fair O/S ADVT
Oil, Gas & Consumable Fuels

BPCL SELL 346 275 (20) 750 10.6 1,967 30 33 35 (25) 10.6 6.5 11.5 10.4 9.8 8.5 7.7 7.2 1.8 1.7 1.5 16.5 16.8 16.4 3.5 3.8 4.1 22
Coal India BUY 233 290 25 1,444 20.4 6,207 26 27 28 128 5.7 1.0 9.0 8.5 8.4 6.4 5.8 5.4 5.6 5.9 6.1 64 67 71 8.6 10.7 10.7 23
HPCL SELL 233 185 (20) 355 5.0 1,524 31 27 29 (26) (12.3) 7.3 7.5 8.6 8.0 7.0 8.2 8.1 1.3 1.2 1.2 18.8 15.1 15.0 5.4 4.8 5.1 19.3
IOCL SELL 148 120 (19) 1,434 20.2 9,479 16 15 17 (22) (4.4) 8.7 9.2 9.6 8.8 5.4 5.6 5.4 1.2 1.1 1.0 13.4 12.0 12.2 4.3 4.2 4.5 30
Oil India BUY 178 235 32 202 2.8 1,135 29 30 31 17.7 4.8 0.8 6.1 5.8 5.8 4.5 4.2 4.1 0.7 0.7 0.6 11.5 11.4 11.0 7.4 7.7 7.8 4.5
ONGC BUY 149 215 44 1,913 27.0 3,752 24 26 26 40 5.3 0.5 6.1 5.8 5.8 3.3 3.1 2.9 0.8 0.7 0.7 13.3 13.0 12.2 5.4 5.7 5.7 26
Reliance Industries SELL 1,226 1,070 (13) 7,256 102.4 5,922 67 78 89 13.0 17 14.2 18.4 15.6 13.7 12 10.2 8.5 2.2 2.0 1.7 11.8 12.3 12.5 0.5 0.6 0.6 154
Oil, Gas & Consumable Fuels Attractive 13,353 188.4 15.0 7.7 7.2 11.5 10.7 10.0 7.4 6.8 6.1 1.7 1.5 1.4 14.3 14.2 13.9 2.9 3.2 3.2 278
Pharmaceuticals
Aurobindo Pharma ADD 725 785 8 425 6.0 584 41 61 64 (1.5) 48 5.4 17.6 11.9 11.3 12 8.4 7.7 3.1 2.5 2.1 18.9 21 18.5 0.7 0.9 1.0 30
Biocon SELL 633 370 (42) 380 5.4 601 11.6 16 19 88 42 14.9 54 38 33 29 20 18 6.0 5.4 4.8 11.7 14.7 14.3 0.6 0.9 1.0 15.2
Cipla BUY 552 600 9 444 6.3 805 19 25 32 6.1 34 28 30 22 17.4 16 13 10.1 2.8 2.6 2.3 9.9 12.1 13.2 0.7 0.9 1.2 16.2
Dr Reddy's Laboratories REDUCE 2,646 2,450 (7) 439 6.2 166 115 132 165 95 14.2 25 23 20 16.1 14 10.1 7.8 3.1 2.7 2.4 14.2 13.6 14.8 0.7 0.8 0.9 39
Laurus Labs BUY 342 400 17 36 0.5 106 11.0 20 27 (30.6) 80 35 31 17.3 12.8 13 8.5 6.9 2.3 2.0 1.7 7.6 12.4 13.7 — — — 0.2
Lupin REDUCE 787 850 8 356 5.0 450 24 35 48 (38) 47 39 33 23 16.3 15 10.9 8.2 2.5 2.3 2.0 7.6 10.5 12.5 0.3 0.7 0.9 22
Sun Pharmaceuticals ADD 447 475 6 1,073 15.1 2,406 18 22 27 16 23 23 25 21 16.7 13 10.3 8.4 2.6 2.3 2.1 10.7 12.0 12.5 0.6 1.0 1.2 94
Torrent Pharmaceuticals ADD 1,786 1,950 — 302 4.3 169 48 60 79 20 24 32 37 30 23 16 14 11.9 5.9 5.3 4.6 16.0 17.7 20 1.2 1.3 1.5 5.9
Pharmaceuticals Neutral 3,456 48.8 11.6 31 22 27 21 16.9 15 11.0 9.2 3.1 2.7 2.4 11.4 13.2 14.2 0.6 0.9 1.1 223
Real Estate
Brigade Enterprises BUY 202 290 44 27 0.4 136 21 26 32 85 25 25 9.8 7.9 6.3 8.6 7.0 5.3 1.1 1.0 0.8 11.6 13.0 14.4 1.2 1.2 1.2 0.4
DLF ADD 167 200 — 298 4.2 1,784 7.0 8.2 8.7 (71) 17.4 5.2 24 20 19.3 21 22 24 1.0 0.9 0.9 3.8 4.7 4.8 1.2 1.2 1.2 17.4
Godrej Properties SELL 713 400 (44) 163 2.3 216 7.1 23 24 (35) 231 4.2 100 30 29 168 28 27 4.8 4.1 3.6 5.8 14.6 13.3 — — — 3.0
Oberoi Realty BUY 489 470 (4) 178 2.5 340 47 35 56 273 (26) 60 10.3 14.0 8.7 11.5 14 6.1 1.9 1.7 1.4 22 12.8 17.7 0.4 0.4 0.4 3.2
Prestige Estates Projects ADD 204 270 32 77 1.1 375 10.6 12.9 20 7 22 58 19.3 15.9 10.1 10.4 9.9 7.6 1.9 1.7 1.5 9.0 11.3 15.8 0.7 0.7 0.7 1.0
Sobha REDUCE 435 495 14 41 0.6 95 26 33 39 14.8 24 18 16.5 13.3 11.3 11.8 9.8 8.9 1.9 1.7 1.5 10.1 13.5 14.3 1.6 1.6 1.6 1.3
Sunteck Realty REDUCE 348 360 3 51 0.7 140 17 20 36 14.2 13.0 84 19.9 17.6 9.6 17 15 6.9 1.7 1.6 1.4 8.9 9.3 15.1 0.3 0.3 0.3 1.2
Real Estate Neutral 836 11.8 (30) 9.8 32 19.9 18.1 13.7 16 15 11.4 1.5 1.4 1.3 7.7 7.9 9.5 0.7 0.7 0.7 27
Retailing
Aditya Birla Fashion and Retail BUY 223 235 5 172 2.4 773 2.1 3.2 5.2 35 54 63 108 70 43 30 24 19 14 12 9.1 13.6 17.9 24 — — — 3.7
Avenue Supermarts SELL 1,460 915 (37) 911 12.9 624 15 20 26 25 32 29 94 72 55 55 41 32 16 13 11 18.7 20 21 — — — 0.0
Titan Company REDUCE 1,023 900 (12) 908 12.8 888 17 21 25 33 26 18 60 48 40 40 32 26 15 12 10 27 28 27 0.4 0.5 0.7 36
Retailing Cautious 1,992 28.1 30 30 26 76 58 46 44 34 27 15 13 10 20 22 22 0.2 0.2 0.3 40
Speciality Chemicals
Castrol India SELL 161 145 (10) 159 2.2 989 7.2 7.8 8.4 4.2 9.0 7.9 22 21 19.1 14 13 11.7 14 12 11 65 62 60 3.1 3.3 3.6 2.9
Pidilite Industries REDUCE 1,144 1,025 (10) 581 8.2 508 18 23 28 (2.8) 31 20 64 49 41 41 33 27 14 12 10 24 27 28 0.6 0.7 0.8 10.5
S H Kelkar and Company BUY 149 210 41 22 0.3 145 6.3 8.3 9.8 (14.6) 32 18 24 17.9 15.2 16 12 10.7 2.3 2.1 2.0 10.3 12.5 13.5 1.2 1.3 1.8 0.3
SRF BUY 2,286 2,300 1 131 1.9 57 102 127 144 27 24 13.2 22 18.0 15.9 13 10.6 9.4 3.2 2.8 2.4 15.4 16.7 16.4 0.6 0.6 0.7 13.5
Speciality Chemicals Neutral 893 12.6 5.2 23 14.7 39 32 28 23 19 17 8.8 7.6 6.6 23 24 24 1.1 1.2 1.3 27

36
Fair O/S ADVT
37
Telecommunication Services
Bharti Airtel ADD 308 380 24 1,230 17.4 3,997 (10.0) (11.0) (5.4) NM NM NM NM NM NM 9.3 8.3 6.9 2.0 2.2 2.4 NM NM NM 2.0 2.0 2.0 30
Bharti Infratel REDUCE 293 275 (6) 542 7.7 1,850 14.0 13.3 14.9 1.7 (5.2) 12.6 21 22 19.6 8.1 8.4 7.7 3.3 3.3 3.2 15.5 14.9 16.6 3.9 3.7 4.2 15.5
Vodafone Idea NR 30 — — 261 3.7 4,359 (10.7) (2.4) (6.9) NM NM NM NM NM NM 32 11.5 10.0 0.4 0.5 0.6 NM NM NM — — — 10.6
Tata Communications ADD 593 580 (2) 169 2.4 285 (4.2) 3.0 5.2 NM 172 72 NM 198 115 10.9 9.7 9.0 NM NM 1,308 NM NM NM 1.1 1.3 1.3 3.8
Telecommunication Services Cautious 2,203 31.1 NM 10.8 25 NM NM NM 12.0 9.2 7.9 1.5 1.4 1.5 NM NM NM 2.0 2.0 2.1 60
Transportation
Adani Ports and SEZ BUY 333 390 17 691 9.7 2,071 21 23 29 16 7.2 27 15.6 14.5 11.5 12 10.3 9.1 2.8 2.4 2.1 19.5 18.1 19.5 0.4 0.5 0.5 25
Container Corp. SELL 478 460 (4) 291 4.1 609 14.9 17 20 2.0 17 16 32 28 24 18 15 13 2.9 2.7 2.6 9.3 10.2 11.2 1.5 1.8 1.7 8.2
Gateway Distriparks BUY 108 180 67 12 0.2 109 6.4 3.7 6.2 (16.0) (42) 68 16.9 29 17.3 19 8.0 6.8 1.1 2.0 1.8 6.6 4.8 10.8 — 2.8 2.8 0.3
Gujarat Pipavav Port BUY 85 115 35 41 0.6 483 4.6 5.4 6.5 12.3 17 20 18.5 15.7 13.1 9.3 7.9 6.5 2.0 2.0 1.9 11.0 12.6 14.9 4.6 5.4 6.4 0.5
InterGlobe Aviation BUY 1,122 1,235 10 431 6.1 383 (5) 36 80 (109) 786 123 NM 31 14.1 NM 19 7.3 6.2 5.3 4.0 NM 18.2 32 — 0.2 0.7 18.6
Mahindra Logistics REDUCE 453 470 4 32 0.5 71 12.0 16 21 22 33 33 38 28 21 21 15 11.7 6.6 5.5 4.6 18.7 21 23 — — — 0.2
Transportation Attractive 1,498 21.1 (25) 38 43 27 19.7 13.8 18 12 9.0 3.3 3.0 2.5 12.3 15.1 18.3 0.6 0.8 0.9 53
KIE universe 107,202 1512.5 16 30 17 22 17.3 14.9 11.1 9.8 8.7 2.7 2.4 2.2 11.9 14.0 14.7 1.5 1.8 2.0
KIE universe (ex-Oil, Gas & Consumable Fuels) 93,849 1324.0 16 37 19 26 19.0 16.0 12 10.9 9.6 2.9 2.6 2.4 11.3 13.9 14.9 1.3 1.6 1.8
Notes:
(a) We have used adjusted book values for banking companies.
(b) 2019 means calendar year 2018, similarly for 2020 and 2021 for these particular companies.
(c) Exchange rate (Rs/US$)= 70.87


Disclosures
Kotak Institutional Equities Research coverage universe

Distribution of ratings/investment banking relationships
Percentage of companies covered by Kotak Institutional
70%
Equities, within the specified category.
60%
Percentage of companies within each category for which Kotak
Institutional Equities and or its affiliates has provided
50%
investment banking services within the previous 12 months.
40% * The above categories are defined as follows: Buy = We

expect this stock to deliver more than 15% returns over the
29.1% 29.6% next 12 months; Add = We expect this stock to deliver 5-15%
30%
returns over the next 12 months; Reduce = We expect this stock
22.2% to deliver -5-+5% returns over the next 12 months; Sell = We
19.2%
20% expect this stock to deliver less than -5% returns over the next
12 months. Our target prices are also on a 12-month horizon
basis. These ratings are used illustratively to comply with
10%
3.9% applicable regulations. As of 31/12/2018 Kotak Institutional
1.5% 1.0% 0.0% Equities Investment Research had investment ratings on 203
0% equity securities.
BUY ADD REDUCE SELL
Source: Kotak Institutional Equities As of December 31, 2018
Ratings and other definitions/identifiers

Definitions of ratings
BUY. We expect this stock to deliver more than 15% returns over the next 12 months.
ADD. We expect this stock to deliver 5-15% returns over the next 12 months.
REDUCE. We expect this stock to deliver -5-+5% returns over the next 12 months.
SELL. We expect this stock to deliver <-5% returns over the next 12 months.
Our Fair Value estimates are also on a 12-month horizon basis.
Other definitions
Coverage view. The coverage view represents each analyst’s overall fundamental outlook on the Sector. The coverage view will consist of one of the following
designations: Attractive, Neutral, Cautious.
Other ratings/identifiers
NR = Not Rated. The investment rating and fair value, if any, have been suspended temporarily. Such suspension is in compliance with applicable regulation(s)
and/or Kotak Securities policies in circumstances when Kotak Securities or its affiliates is acting in an advisory capacity in a merger or strategic transaction
involving this company and in certain other circumstances.
CS = Coverage Suspended. Kotak Securities has suspended coverage of this company.
NC = Not Covered. Kotak Securities does not cover this company.
RS = Rating Suspended. Kotak Securities Research has suspended the investment rating and fair value, if any, for this stock, because there is not a sufficient
fundamental basis for determining an investment rating or fair value. The previous investment rating and fair value, if any, are no longer in effect for this stock
and should not be relied upon.
NA = Not Available or Not Applicable. The information is not available for display or is not applicable.
NM = Not Meaningful. The information is not meaningful and is therefore excluded.

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INDIA DAILY

March 5, 2019 India 1-Mar 1-day 1-mo 3-mo

Contents Global/Regional indices

Results FTSE 7,134 0.4 (0.6) 3.1

Coal India: Dispatches improve Net investment (US$ mn)

28-Feb MTD CYTD

the US POWF IN Equity 113 1.2 12.7 22.9

UPLL IN Equity 870 (0.9) 9.3 16.1

UT IN Equity 1 3.8 (3.6) (41.3)

Divestment aimed at positioning ABB as the leader in digitalization

Key ratios (%)

Source: Company, Kotak Institutional Equities estimates

KOTAK INSTITUTIONAL EQUITIES RESEARCH 3

EBIT margin (%)

Source: Company, Kotak Institutional Equities estimates

4 KOTAK INSTITUTIONAL EQUITIES RESEARCH

CY2014 1HCY15 CY2015 1HCY16 CY2016 1HCY17 CY2017 1HCY18 CY2018

Net working capital (as days of sales)

Source: Company, Kotak Institutional Equities

Component of justified multiple calculation Formula Calculation

Source: Company, Kotak Institutional Equities analysis

KOTAK INSTITUTIONAL EQUITIES RESEARCH 5

New estimates Old estimates (a) % change

Source: Company, Kotak Institutional Equities estimates

6 KOTAK INSTITUTIONAL EQUITIES RESEARCH

Source: Company, Kotak Institutional Equities estimates

KOTAK INSTITUTIONAL EQUITIES RESEARCH 7

Infosys has a fair share of wins in a good demand environment

Strong depth of senior leadership augmented with focused external hires

Digital competencies are strong

Consulting is a focus area with repurposing towards digital consulting

Exhibit 1: TCV of deal wins (TTM) is at record highs

6,000 TTM TCVs (US$ mn) 5,620

Source: Company, Kotak Institutional Equities

KOTAK INSTITUTIONAL EQUITIES RESEARCH 9

Exhibit 2: Infosys - attrition rate trend

Quarterly annualized attrition (%)

Date Name Designation

Source: Company, Kotak Institutional Equities

10 KOTAK INSTITUTIONAL EQUITIES RESEARCH

Exhibit 4: Strong growth in digital revenues

Source: Company, Kotak Institutional Equities

2014 2015 2016 2017 2018 2019E 2020E 2021E

Source: Company, Kotak Institutional Equities estimates

KOTAK INSTITUTIONAL EQUITIES RESEARCH 11

C ompany data and valuation summary

Source: Company, Kotak Institutional Equities

Exhibit 2: Monthly dispatches to power sector increased by 1% yoy in December 2018

(mn tons) Dispatch to power (LHS, mn tons) YoY growth (RHS, %)

Source: Ministry of Power, Kotak Institutional Equities

KOTAK INSTITUTIONAL EQUITIES RESEARCH 13

Feb-2018 Jan-2018 Dec-2017

Source: CEA, Kotak Institutional Equities

Exhibit 4: Coal-based generation declined by 2.6% yoy in January 2019

Source: CEA, Kotak Institutional Equities

Volumes (LHS, mn tons) Freight (RHS,Rs/ton km)

Source: Indian Railways, Kotak Institutional Equities

14 KOTAK INSTITUTIONAL EQUITIES RESEARCH

Exhibit 6: Spot e-auction premiums increased sharply to 131% in December 2018

Exhibit 7: Imported coal prices averaged at US$84/ton in February 2019

Source: Company, Kotak Institutional Equities estimates

KOTAK INSTITUTIONAL EQUITIES RESEARCH 15

2016 2017 2018 2019E 2020E 2021E