Antiquee Report

AMP
STRICTLY CONFIDENTIAL
23 May 2019
ANTIQUE’S MORNING PRESENTATION
FROM THE RESEARCH DESK Market Snapshot
QUARTERLY RESULTS REVIEW Global Indices Closing % Chg % YTD
IndusInd Bank Dow Jones 25,777 (0.4) 10.5
Core earnings in-tact; IL&FS dampens profits NASDAQ 7,751 (0.4) 16.8
Cipla FTSE 7,334 0.1 9.0
Growth drivers on track CAC 5,379 (0.1) 13.7

DAX 12,169 0.2 15.2
Jindal Steel & Power Russia 1,293 1.1 21.0
Impairment of Australian mine dampens the sentiment Bovespa 94,361 (0.1) 7.4
Crompton Greaves Consumer Electricals Nikkei 21,283 0.1 5.8
Positives priced in; Maintain HOLD Hang Seng 27,706 0.2 7.2
Shanghai Composite 2,892 (0.5) 16.0
Astral Poly Technik
Rex acquisition drags operational performance Indian Indices Closing % Chg % YTD
Future Consumer Sensex 39,110 0.4 8.4
Scaling up on …. Nifty 11,738 0.2 8.1
MSCI India 589 0.2 5.6
Bajaj Electricals
CNX Midcap 17,348 (0.1) (3.0)
Consumer segment shines, EPC business weak
BSE Smallcap 14,369 0.5 (2.3)
Somany Ceramics
EBITDA margin surprises, volumes to follow Flows (USDm) Prev. Day MTD
FII 224 (252)
Global News MF (152) 93
U.S. stocks finished lower Wednesday as lingering trade woes overshadowed
the release of the minutes from the Federal Reserve's policy meeting that was Provisional flows (USDm)
largely interpreted as accommodative. The Dow Jones Industrial Average FIIs (139)
DJIA, dropped 100 points, or 0.4%, to 25,776. Local (23)
Japan's Nikkei edged up on Wednesday in an overall cautious market as
data showed another drop in the nation's exports for April, which offset a Volumes USDbn % Chg
few positive signs for the economy. Exporters and technology shares pared Cash (NSE + BSE) 5.4 (7.4)
early gains and the Nikkei share average ended 0.1% higher at 21,283,
after trading in a narrow range as sentiment remained fragile with no signs
FII F&O Stock Fut Index Fut
of de-escalation in the Sino-U.S. trade war.
Net ($ mn) (69) 19
Sector & Corporate News Open Int (%) (0.0) 10.9
Oil and Natural Gas Corporation (ONGC) is reportedly planning to
ramp up production from 13 field development projects and three Enhanced Oil ADR/GDR Gainers Last % Chg
Recovery/Improved Oil Recovery (EOR/IOR) projects. In this regard, the company SBI 48.9 1.3
will spend around INR 65,773 cr. The ongoing field development and EOR/ Infosys 10.2 0.4
IOR projects are expected to produce a cumulative 54.6 mn tonne (mt) of crude Reliance 38.6 0.1
oil and 114 bn cubic meter (bcm) of natural gas in the next 3-4 years.
Cipla has received an approval to raise funds upto INR 3000 cr by issue of ADR/GDR Losers Last % Chg
non-convertible debentures (NCDs) (in form of bonds or otherwise) or bonds, Tata Motors 12.6 (1.9)
whether denominated in Indian Rupee and/or foreign currency (ies), though
ICICI Bank 11.5 (0.5)
a public issue or a private placement in accordance with the provisions of
the applicable law. The Board of directors of the company at its meeting Dr Reddy 37.8 (0.5)
held on May 22, 2019 has approved for the same. The company's board Wipro 4.5 (0.4)
also approved raising funds upto INR 3000 cr by issue of equity shares or HDFC 122.7 (0.2)
American depository receipts or global depository receipts or foreign currency
convertible bonds or other securities/financial instruments convertible into
equity shares, whether denominated in Indian Rupee and/or foreign currency
(ies), though a public issue or a private placement in accordance with the
provisions of the applicable law.
Please refer to disclosures at the end of the Research Report
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 23 May 2019 | 2
Sectoral indices Delivery Spike

Closing % Chg % MTD % YTD Company Volume Spike (%) Chg (%)
BSE Auto 18,591 0.6 (1.3) (10.8) IndusInd Bank Ltd 5,256,784 368% 4.91%
BSE Bank 34,208 0.9 2.6 12.6 Wipro Ltd 5,272,928 265% -1.32%
BSE Cap Goods 18,786 0.9 4.2 (0.2) Hindustan Zinc Ltd 878,495 182% -1.88%
BSE Cons dur 24,433 (0.6) 2.3 18.1 Tech Mahindra Ltd 1,702,753 168% -2.99%
BSE FMCG 11,694 (0.8) (0.6) (1.1) Federal Bank Ltd 7,147,463 160% 0.10%
BSE IT 15,206 (0.6) (6.5) 7.9 Jindal Steel & Power Ltd 5,105,383 134% -6.70%
BSE Health 13,290 0.2 (7.5) (4.5) HCL Technologies Ltd 1,041,376 109% 0.46%
BSE Metal 10,655 0.2 (7.5) (10.0) Canara Bank 1,163,985 102% -1.02%
BSE Oil 15,207 0.7 (1.0) 10.6 Tata Power Co Ltd/The 5,304,330 89% 0.62%
BSE Power 1,922 0.3 (2.4) (3.9) GAIL India Ltd 1,444,405 85% -0.53%
BSE PSU 7,511 0.9 0.9 3.8
BSE Realty 2,068 0.5 3.0 15.0
BSE TECK 7,483 (0.6) (6.2) 5.9 Derivatives Update
Long Build Up
Company Last % Chg % Chg OI OI (in 000)
JUSTDIAL 714.3 1.06 9.78 2828
INDUSINDBK 1525.35 5.26 8.42 11412
DISHTV 29.15 0.52 7.28 77758
Nifty Outperformers
SUNTV 555.85 1.93 5.22 6164
Price % Chg % MTD % YTD
Short Build Up
Indusind Bank Ltd 1,519 4.9 (5.5) (5.0) Company Last % Chg % Chg OI OI (in 000)
Sun Pharmaceutical Indus 421 3.0 (8.0) (2.2) HINDZINC 251.65 -1.70 13.23 4518
Bharat Petroleum Corp Ltd 384 2.6 1.2 5.9 CHOLAFIN 1407.85 -0.42 12.91 726
Bajaj Auto Ltd 3,047 2.3 2.1 12.0 JINDALSTEL 152.4 -6.53 11.00 24260
Coal India Ltd 241 1.7 (4.3) 0.2 WIPRO 283.6 -1.01 7.64 39958
Hero Motocorp Ltd 2,700 1.6 7.5 (13.0) Short Covering
Eicher Motors Ltd 21,225 1.5 4.2 (8.3)
Company Last % Chg % Chg OI OI (in 000)
IDBI 36.4 2.68 -6.68 29320
Nifty Underperformers NATIONALUM 49.95 1.32 -6.58 37260
Price % Chg % MTD % YTD WOCKPHARMA 395.85 3.25 -6.25 2931
Tech Mahindra Ltd 750 (3.0) (10.3) 3.7 RELCAPITAL 127.95 5.40 -5.90 13390
Indiabulls Housing Finance L 785 (2.9) 12.8 (8.1) Long Unwinding
Yes Bank Ltd 138 (2.4) (18.1) (24.3) Company Last % Chg % Chg OI OI (in 000)
Bharti Infratel Ltd 269 (2.4) 2.6 4.0 UBL 1428.8 -0.18 -13.39 1869
Itc Ltd 300 (2.0) (0.5) 6.4 SRF 2939.5 -0.71 -8.08 779
Zee Entertainment Enterprise 342 (1.6) (20.9) (28.2) CANFINHOME 344.65 -0.52 -6.54 3578
Tata Consultancy Svcs Ltd 2,082 (1.3) (7.9) 10.0 PVR 1762.15 -2.92 -5.80 773
Bulk Deals
Security Name Client Name Buy/Sell Qty Price Value (mn)
DISHTV T. Rowe Price International Discovery Fund Sell 12,075,386 28.73 347
VISHAL Veena Investments Private Limited Buy 474,590 286.00 136
VISHAL Asia Investment Corporation Mauritius Limited Sell 444,590 286.00 127
BALKRISHNA Akp Enterprises Llp Sell 2,666,483 33.10 88
BALKRISHNA Rap Enterprises Llp Sell 2,163,463 33.10 72
Vikas Multicorp Limited Nomura Singapore Limited Buy 11,928,292 4.13 49
Nifty Nifty P/E Nifty P/B

12000 3.7
29
11000 3.5
27
10000 25 3.3
9000 23 3.1
8000 21 2.9
7000 19 2.7
6000 17 2.5
May-15 May-16 May-17 May-18 May-19 May-15 May-16 May-17 May-18 May-19 May-15 May-16 May-17 May-18 May-19
Source: Bloomberg
Sensex FII Provisional Flows (INRbn) DII Provisional Flows (INRbn)

40000 100 60
37000 80
40
60
34000 40 20
31000 20 0
28000 0 -20
-20
25000 -40 -40
22000 -60 -60
May-15 May-16 May-17 May-18 May-19 May-17 Nov-17 May-18 Nov-18 May-19 May-17 Nov-17 May-18 Nov-18 May-19
Source: Bloomberg
Economy, Money & Banking Commodities Update

Forex Rate Last % Chg % MTD % YTD Commodities Last % Chg % MTD % YTD
INR~USD 69.7 0.1 (0.1) 0.1 Gold ($/Ounce) 1,274 0.0 (0.8) (0.7)
INR~EUR 77.8 (0.1) 0.3 2.8 Crude Oil ($/Bl) 61 (0.1) (4.1) 29.7
INR~GBP 88.1 0.4 2.7 1.1 Aluminium ($/t) 1,745 (1.0) (2.1) (6.3)
Copper ($/t) 5,894 (1.2) (8.3) (0.9)
Bond Market Last Chg (bps) MTD (bps) YTD (bps) Zinc ($/t) 2,682 (1.6) (9.4) 6.5
10 Year Bond 7.3 (4) (15) (11) Lead ($/t) 1,786 (0.5) (6.2) (11.0)
Interbank call 5.9 (5) (40) (65) Nickel ($/t) 11,980 (0.7) (1.3) 13.0
INR/USD Gold and silver prices (USD/Tr.Oz) Crude prices (USD/barrel)

75 1400 22 80
73
1300 20 70
71
69 1200 18
60
67 1100 16
65 50
1000 14
63 May-15 May-16 May-17 May-18 May-19 40
May-18 Sep-18 Jan-19 May-19 Gold (LHS) Silver (RHS) May-15 May-16 May-17 May-18 May-19
Source: Bloomberg
Inflation vs 10 year yield Nifty premium/discount NSE volatility index (%)

10 50 43.8 31
8 28
40 31.2
6 28.1 25
4 30 22
18.6
2 20 19
0 6.0 16
10
Jul-17
Oct-17
Jan-18
Jul-18
Oct-18
Jan-19
Apr-18
Apr-19
13
23-Jan
30-Jan
6-Feb
13-Feb
20-Feb
27-Feb
6-Mar
13-Mar
20-Mar
27-Mar
1-May
8-May
15-May
22-May
0
3-Apr
10-Apr
17-Apr
24-Apr
WPI Inflation (%) 10 Yr Yield (%) 16-May 17-May 20-May 21-May 22-May
Source: Bloomberg
Current Reco : BUY 4QFY19 RESULT REVIEW

Previous Reco
CMP
: BUY
: INR1,518
IndusInd Bank
Target Price : INR1,775 Core earnings in-tact; IL&FS dampens profits
Potential Return : 17%
IIB reported earnings of INR3.6bn (estimate of INR8.1bn). The quarter was
hit by ILFS exposure whereby bank recognized it as NPL and also took a P&L
hit of INR12.8bn (INR11.2bn provisions and INR1.5bn interest income
Sohail Halai reversals). Adjusted for this PBT grew 24% YoY. Bank tried to address some
+91 22 4031 3425
of the investor's concern raised recently by (1) disclosing exposure to stressed
sohail.halai@antiquelimited.com
exposures at 1.9% of the loans (13% of net-worth) and (2) providing details
Amit Mishra
on corporate fees which seems to be granular and therefore risk of any
+91 22 4031 3412 sudden shock seems to be limited. Nevertheless, corporate fees still stands
amit.mishra@antiquelimited.com high at 95bps (35-50bps for ICICIBC and AXSB) as compared to its peers
and may drift lower in coming years. We largely maintain our earnings
estimate and while we expect standalone bank RoAs to be ~1.7%, post-
merger with BHAFIN RoAs are likely to improve to 1.9%. Maintain Buy.
A large hit of IL&FS absorbed
Market data
Bank's recognized INR30bn (INR20bn to Holdco and INR10bn to SPV) of ILFS exposure as
Sensex : 39,110
NPL and made INR11.2bn of provisions during the quarter. Coverage on IL&FS now stands
Sector : BANKS
at 70% on Holdco and 25% on SPV. Based on its assessment, management is confident that
Market Cap (INRbn) : 915.8
this level of provisions should suffice. Further, there were interest income reversals of INR1.5bn
Market Cap (USDbn) : 13.135
which impacted NIMs negatively by 25bps, adjusted for this NIMs were stable QoQ at
O/S Shares (m) : 602.9
52-wk HI/LO (INR) : 2038/1333
3.8%.
Avg Daily Vol ('000) : 3,926 Disclosures with respect to stressed groups
Bloomberg : IIB IN
Bank disclosed its exposure (fund + non-fund based) to the stressed group which stood at
Source: Bloomberg
1.9% of the loans (13% of the net-worth). It also mentioned that these exposures are currently
Valuation standard and even if stress emerges, bank is adequately collateralized with security cover of
FY19e FY20e FY21e 140% on the exposure, of which 58% is in the form of listed and marketable securities. Bank
EPS (INR) 62 89 109 also disclosed its SMA 1 and SMA 2 book which stands at ~30bps of loans each. Further,
BPVS (INR) 443 543 632 SMA 2 exposure is spread across segment and is granular.
P/E (x) 24.4 17.1 14.0
Fee income - an engine of RoA and management tried to rest concerns
P/BV (x) 3.4 2.8 2.4
NIMs 4.6 4.6 4.4 Fee income grew 27% YoY in 4QFY19 (21% in FY19). Bank generates 2% of fees to average
Source: Bloomberg assets which did raise some concerns over the sustainability of the same and possible shock
as seen in peer bank. Thereby, bank disclosed its fee income granularity and disclosure
Returns (%)
highlights that fees from retail streams contribute 1% of average assets (largely in-line with
1m 3m 6m 12m
peer group) and 0.95% is generated through corporate fees. Major contributors in corporate
Absolute (10) 4 (1) (20)
fees are (1) forex (23bps of average assets), (2) trade and remittances (23bps), (3) investment
Relative (11) (5) (11) (29)
banking (syndication) - 18bps, (4) structured finance (16bps) and (5) loan processing fees
Source: Company, Antique
(16bps of which large corporate is 5bps). This does provide some comfort over granularity
Shareholding pattern and reduces the risk of any abrupt shock, but at 95bps of average assets as compared to 35-
45bps for its peers, there could be some moderation in coming years.
Promoters : 17%
Public : 83% Quarterly performance (INRmn)
Others : 0% Particulars 4QFY18 1QFY19 2QFY19 3QFY19 4QFY19A QoQ (%) YoY (%) 4QFY19E Var (%)
Source: Bloomberg Net Interest Income 20,076 21,224 22,033 22,881 22,324 -2.4 11.2 23,594 -5.4
Price performance vs Nifty Other Income 12,085 13,016 13,173 14,689 15,590 6.1 29.0 14,292 9.1
Net Income 32,161 34,240 35,206 37,569 37,914 0.9 17.9 37,887 0.1
120
Operating Expenses 14,467 15,129 15,281 16,400 17,237 5.1 19.1 16,498 4.5
100
Operating Profit 17,694 19,111 19,924 21,170 20,677 -2.3 16.9 21,389 -3.3
80 Provisions 3,355 3,500 5,903 6,067 15,607 157.3 365.1 9,225 69.2
60 Profit before Tax 14,339 15,611 14,022 15,103 5,070 -66.4 -64.6 12,164 -58.3
May-18 Sep-18 Jan-19 May-19 Net Profit 9,531 10,357 9,203 9,850 3,601 -63.4 -62.2 8,143 -55.8
IndusInd Bank NIFTY NNPA (%) 0.5 0.5 0.5 0.6 1.2 62bps 70bps 1.5 -30bps
Source: Bloomberg, Indexed to 100 Source: Company, Antique
Robust loan growth trend continues

Loans grew 29% YoY (+8% QoQ) driven by robust growth of 27% YoY in consumer finance
segment and 30% YoY in corporate segment. Within corporate segment exposure to
microfinance institution (of which a large part is likely to be exposure to BHAFIN) increased
30% YoY and 8% QoQ. Adjusted for this corporate loan growth was slower at 20% YoY and
3% QoQ. Consumer finance growth was driven across segments with CV/CE growing 26%
YoY and 6% QoQ and unsecured personal loans and credit cards up 53% YoY (17% QoQ).
Growth in LAP was the softest at 11% YoY (4% QoQ).
ILFS drives slippages higher, some increase in stress in consumer finance
Slippages in corporate segment increased to INR32.3bn of which IL&FS was INR30bn. Hence,
adjusted for this core corporate slippages of INR2.3bn was lower QoQ and largely in-line
with historic trend. Slippages in consumer finance segment increased QoQ to INR4.6bn
(annualized consumer finance slippage ratio of 3.2% vs. 2.6% in 3QFY19). During the
quarter, bank wrote-off INR1bn of IL&FS exposure. Thereby GNPL increased by 20bn, but
adjusted for IL&FS was flat QoQ. Reported coverage stood at 43% but excluding IL&FS was
at 54%.
Balance-sheet liquidity managed well but remains stretched
Deposit growth was strong at 11% QoQ and 29% YoY, therefore LD ratio moderated to 96%.
Of this CA grew 12% QoQ and 42% YoY and SA grew 9% QoQ and 19% YoY. Term
deposits grew 12% QoQ and 30% YoY. Therefore reported cost of funds increased 9bps
QoQ. With LD ratio continues to remain high, pressure on cost of funds is likely to stay.
Re-pricing of vehicle finance book and BHAFIN integration could help NIMs
Notwithstanding above, bank has two levers to protect/improve NIMs (1) incremental
disbursements in vehicle finance is likely to be at higher yields and benefits are expected to
flow gradually and (2) BHAFIN high yielding portfolio of 18%+ vs. 11.6% of IIB would push
overall yields higher. Also note, BHAFIN portfolio will still gain from re-pricing of cost of funds
as its incremental cost of funds stood at 9.5% in 4Q as compared to 6.75-7% (derived) for IIB.
We expect NIMs of the combined entity to be ~4.4% over FY20/21 vs. standalone NIMs of
3.9%.
BHAFIN compensates for IIB's weakness
BHAFINs continues to post a strong set of earnings with AUM and earnings growth of 38%
YoY and 67% YoY (90% in Indian GAAP) in FY19 respectively, corresponding to 5.4% RoAs
(on AUM). Notably, while loan addition to IIB is likely to be ~6%, contribution to earnings is
likely to be 16-18%. IIB has already started the transition process with INR44bn already
assigned to IIB and replacing ~80% of the borrowings of BHAFIN. With some synergistic
gain still to flow and we believe as compared to standalone RoAs of 1.7%, RoAs of the
merged entity is likely to be 1.9-2%.
We largely maintain our earnings estimate

INRbn Old estimates New estimates Variation (%)
FY19 FY20 FY21 FY19 FY20 FY21 FY19 FY20 FY21
NII 106.7 129.2 159.3 107.6 132.8 159.5 0.8 2.8 0.1
Other Income 56.1 66.6 80.5 59.8 67.5 81.4 6.6 1.3 1.1
Total Income 162.8 195.8 239.8 167.4 200.3 240.9 2.8 2.3 0.4
Operating Expenses 71.3 82.1 96.1 72.9 85.5 101.2 2.3 4.1 5.2
Operating Profits 91.6 113.7 143.7 94.5 114.8 139.7 3.2 1.0 -2.8
Provisions 25.4 21.0 25.9 31.8 21.3 25.3 25.1 1.3 -2.4
PBT 66.2 92.7 117.8 62.7 93.6 114.4 -5.2 1.0 -2.9
Tax 20.8 30.6 38.9 19.9 30.9 37.8 -4.7 1.0 -2.9
PAT 45.3 62.1 78.9 42.9 62.7 76.6 -5.4 1.0 -2.9
RoA (%) 1.8 2.0 2.0 1.6 1.9 1.9
RoE (%) 15.9 18.2 19.1 15.0 18.2 18.5
BV 440 539 632 443 543 632
EPS 66 88 112 62 89 109
One year forward P/Bv with RoA One year forward EPS
5.0 2.5 35.0
4.0 2.0 30.0

25.0
3.0 1.5
20.0
2.0 1.0 15.0

10.0
1.0 0.5
5.0
0.0 - 0.0
Nov-08
Nov-09
Nov-10
Nov-11
Nov-12
Nov-13
Nov-14
Nov-15
Nov-16
Nov-17
Nov-18
Nov-08
Nov-09
Nov-10
Nov-11
Nov-12
Nov-13
Nov-14
Nov-15
Nov-16
Nov-17
Nov-18
May-08
May-09
May-10
May-11
May-12
May-13
May-14
May-15
May-16
May-17
May-18
May-19
May-08
May-09
May-10
May-11
May-12
May-13
May-14
May-15
May-16
May-17
May-18
May-19
PB Avg PB -1SD +1SD
PE Avg PE -1SD +1SD -2SD +2SD
-2SD +2SD RoA (RHS)
Source: Company, Antique Source: Company, Antique
DuPont Analysis (merged entity): RoA's to improve to 1.9%

Y/E March FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19E FY20E FY21E
Net Interest Income 3.3 3.4 3.8 3.7 3.8 4.0 4.2 4.1 4.1 3.9
Core Fee Income 1.8 1.9 2.1 2.3 2.2 2.2 2.0 2.1 1.9 1.9
Core Income 5.1 5.3 5.9 5.9 6.0 6.2 6.2 6.2 6.0 5.8
Operating Expenses 2.6 2.7 3.0 3.1 3.1 3.1 3.0 2.8 2.6 2.5
Cost to Core Income 51.3 50.6 50.6 52.3 50.8 50.6 48.0 45.2 44.0 43.2
Core operating Profits 2.5 2.6 2.9 2.8 3.0 3.1 3.2 3.4 3.4 3.3
Non Interest income 2.0 2.1 2.4 2.6 2.7 2.7 2.3 2.3 2.1 2.0
Trading and others 0.2 0.2 0.4 0.4 0.5 0.5 0.3 0.2 0.2 0.2
Operating Profits 2.7 2.8 3.3 3.2 3.4 3.5 3.5 3.6 3.5 3.5
Provisions 0.3 0.4 0.6 0.4 0.5 0.9 0.6 1.2 0.7 0.6
NPA 0.3 0.3 0.4 0.3 0.4 0.4 0.4 1.0 0.5 0.5
PBT 2.3 2.4 2.7 2.8 2.9 2.7 2.9 2.4 2.9 2.8
Tax 0.8 0.8 0.9 0.9 1.0 0.8 0.9 0.8 1.0 0.9
RoA 1.6 1.6 1.8 1.9 1.9 1.9 2.0 1.6 1.9 1.9
Leverage (x) 12.4 11.0 9.9 10.1 8.9 8.3 8.7 9.1 9.4 9.7
RoE 19.2 17.8 17.9 19.5 17.3 15.4 17.2 15.0 18.2 18.5
Fee income contribution to RoAs has improved significantly over the years (%)
FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19
Trade Fees 0.16 0.19 0.22 0.23 0.26 0.27 0.27 0.25 0.27 0.27 0.25
Processing Fees 0.20 0.30 0.31 0.31 0.36 0.36 0.50 0.55 0.53 0.44 0.44
Fx 0.18 0.19 0.28 0.39 0.44 0.54 0.56 0.50 0.41 0.39 0.41
TPP 0.28 0.34 0.40 0.48 0.41 0.35 0.39 0.39 0.44 0.49 0.45
IB 0.02 0.06 0.15 0.15 0.22 0.30 0.34 0.37 0.37 0.37 0.34
Others 0.49 0.28 0.20 0.21 0.21 0.18 0.17 0.15 0.14 0.13 0.14
Overall 1.33 1.37 1.55 1.77 1.89 2.01 2.21 2.21 2.17 2.09 2.03
Diversified fee income stream Corporate fees at 95bps of average assets
Loan Trade & Rem.,

0.02% General
Proc. - General
Distribution, Banking,
Large Trade & Banking, 6.0%
20.0% Distribution, 0.14%
Corp, Rem.,
Forex, Loan Proc. - 0.45%
2.0% 1.0% Large Corp,
8.0%
Loan Proc. - 0.05% Forex,
Medium, 3.0% 0.18%
Loan Proc. - Loan Proc., Loan Proc.
Small, 2.0% 13.0% - Medium, Loan Proc.,
0.29%
IB - Structured 0.07%
Finance, 7.0%
Loan Proc. -
Small, 0.05% Trade &
Rem.,
Trade &
Securities/MM/ IB - Structured 0.23%
IB - Loan Forex, Rem.,
Trading, Finance,
Syndication, 10.0% 10.0% Forex,
10.0% 0.16%
8.0% 0.23%
IB Advisory, IB - Loan
1.0% label Syndication, IB Advisory,
0.18% 0.02%
Corporate banking Consumer banking Securities/MM/Trading Corporate banking Consumer banking
Core NIMs was stable QoQ Adjusted for IL&FS slippages and credit cost was contained
4.5 3.0 12.0
4.0 4.0 4.0 4.0 4.0 4.0 4.0 3.9
3.9 3.9 4.0 3.8 3.8 3.8 2.5 10.0
4.0
2.0 8.0
3.5
1.5 6.0
3.0 1.0 4.0
0.5 2.0
2.5
0.0 0.0
1QFY17
2QFY17
3QFY17
4QFY17
1QFY18
2QFY18
3QFY18
4QFY18
1QFY19
2QFY19
3QFY19
4QFY19
2.0
3QFY16
4QFY16
1QFY17
2QFY17
3QFY17
4QFY17
1QFY18
2QFY18
3QFY18
4QFY18
1QFY19
2QFY19
3QFY19
4QFY19
Credit Cost (%) (LHS) Credit Cost Ex-IL&FS (%) (LHS)

Slippage (%) Slippage Ex-IL&FS (%)
NIMs (%)
Robust loan growth continues Consumer finance growth driven by CV/CE and unsecured loans
40 45
39.4
35.0
35 40
30.4
30.4
30.2
29.8
29.6
28.5
30 35
26.0
26.2
25.8
25.9
25.0
30
25
25
20
20
15 15
10 10
28.6
28.6
26.9
25.2
24.6
22.0
22.0
23.9
25.7
28.0
28.7
28.1
27.0
28.5
29.7
26.4
25.1
27.9
24.3
24.5
25.1
28.2
29.4
32.4
34.7
28.6
5 5
0 0
4QFY16
1QFY17
2QFY17
3QFY17
4QFY17
1QFY18
2QFY18
3QFY18
4QFY18
1QFY19
2QFY19
3QFY19
4QFY19
4QFY16
1QFY17
2QFY17
3QFY17
4QFY17
1QFY18
2QFY18
3QFY18
4QFY18
1QFY19
2QFY19
3QFY19
4QFY19
Advances Gr. YoY (%) Corporate Loan Gr. YoY (%) Consumer Loan Gr. YoY (%)
Proportion of consumer loans stable QoQ Bank has improved its LCR QoQ
100 120
90
100
80
39.0
39.0
39.5
39.3
40.3
40.2
40.0
40.5
41.3
41.2
41.0
41.3
41.7
70 80
60
50 60
40
40
60.5
61.0
60.7
61.0
59.7
59.5
59.8
60.0
58.7
58.8
59.0
58.3
58.7
30
105.9
109.4
105.0
104.4
102.2
111.4
20
65.1
74.2
66.4
70.7
78.4
81.1
91.3
94.6
91.6
95.0
20
10
0
0
1QFY16
2QFY16
3QFY16
4QFY16
1QFY17
2QFY17
3QFY17
4QFY17
1QFY18
2QFY18
3QFY18
4QFY18
1QFY19
2QFY19
3QFY19
4QFY19
4QFY16
1QFY17
2QFY17
3QFY17
4QFY17
1QFY18
2QFY18
3QFY18
4QFY18
1QFY19
2QFY19
3QFY19
4QFY19
Corporate Loan (%) Consumer Loan (%) LCR (%)
Consumer finance growth was driven by CV/CE and unsecured loans segment
QoQ Gr. (%) YoY Gr. (%) Mix (%)
INRbn 4QFY19 4QFY18 1QFY19 2QFY19 3QFY19 4QFY19 4QFY18 1QFY19 2QFY19 3QFY19 4QFY19 4QFY18 1QFY19 2QFY19 3QFY19 4QFY19
Consumer Finance 726.8 7.7 5.3 5.6 6.9 6.8 25.7 28.0 28.7 28.1 27.0
Vehicle Finance 532.8 7.8 5.3 5.7 7.0 5.5 24.1 27.9 29.4 28.4 25.7 74.1 74.1 74.2 74.2 73.3
CV 244.4 10.8 4.2 6.2 6.0 4.9 27.3 32.9 34.2 29.9 23.0 46.9 46.4 46.6 46.2 45.9
Utility/Tractors 71.2 7.6 5.2 6.8 6.6 6.3 34.6 30.6 31.3 28.9 27.3 13.2 13.2 13.3 13.3 13.4
Car Loan 65.4 1.7 4.8 5.2 6.7 4.0 14.6 16.2 16.9 19.6 22.3 12.6 12.5 12.5 12.4 12.3
Small CV/3W 31.4 2.5 8.1 5.6 5.1 3.3 6.5 14.7 20.7 23.0 24.0 6.0 6.1 6.1 6.0 5.9
2 Wheeler 44.8 2.7 4.6 3.0 11.8 3.7 10.0 15.1 17.6 23.7 24.9 8.5 8.4 8.2 8.6 8.4
Equipment Fin. 75.7 10.0 9.4 4.9 8.9 10.5 33.0 36.8 36.7 37.5 38.1 12.9 13.4 13.3 13.6 14.2
LAP 89.3 2.4 2.1 1.8 2.8 4.3 13.6 12.0 10.3 9.4 11.4 14.0 13.6 13.1 12.6 12.3
Unsecured loans 104.8 14.5 8.7 9.3 10.8 16.7 58.9 52.2 49.5 50.6 53.5 11.9 12.3 12.7 13.2 14.4
Credit Cards 43.8 14.5 10.6 6.8 11.3 23.6 58.2 53.4 47.5 50.6 62.5 39.5 40.2 39.3 39.5 41.8
PL/Home loans 61.0 14.4 7.4 11.0 10.4 12.1 59.3 51.4 50.8 50.6 47.6 60.5 59.8 60.7 60.5 58.2
Quarterly performance: P&L and asset quality

INRmn 1QFY18 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19 3QFY19 4QFY19 QoQ (%) YoY (%)
Profit and Loss
Net Interest Income 17,741 18,210 18,948 20,076 21,224 22,033 22,881 22,324 -2 11
Other Income 11,673 11,876 11,868 12,085 13,016 13,173 14,689 15,590 6 29
Trading profits 1,930 1,750 1,100 950 1,370 990 2,030 1,400 -31 47
Fees 9,743 10,126 10,768 11,135 11,646 12,183 12,659 14,190 12 27
Trade 1,310 1,280 1,270 1,530 1,410 1,510 1,550 1,890 22 24
Processing 1,960 2,140 2,420 2,280 2,300 2,600 2,760 3,280 19 44
Fx Clients 1,980 1,830 2,020 1,970 2,280 2,230 2,750 2,890 5 47
TPP 2,100 2,370 2,560 2,730 2,780 2,800 2,680 3,020 13 11
Investment banking
Others 640 650 700 650 800 910 910 830 -9 28
Total Income 29,413 30,086 30,816 32,161 34,240 35,206 37,569 37,914 1 18
Operating Expenses 13,528 13,751 14,169 14,467 15,129 15,281 16,400 17,237 5 19
Employee 4,222 4,450 4,600 4,535 4,620 4,582 4,521 4,812 6 6
Others 9,306 9,300 9,569 9,932 10,509 10,699 11,879 12,424 5 25
Core operating profits 13,955 14,585 15,547 16,744 17,741 18,934 19,140 19,277 1 15
Operating Profits 15,885 16,335 16,647 17,694 19,111 19,924 21,170 20,677 -2 17
Provisions 3,100 2,938 2,362 3,355 3,500 5,903 6,067 15,607 157 365
PBT 12,786 13,398 14,285 14,339 15,611 14,022 15,103 5,070 -66 -65
Taxes 4,420 4,597 4,923 4,808 5,254 4,819 5,253 1,469 -72 -69
PAT 8,365 8,801 9,362 9,531 10,357 9,203 9,850 3,601 -63 -62
Asset Quality
GNPA 12,717 13,453 14,987 17,049 17,406 17,814 19,682 39,474 101 132
NNPA 5,083 5,369 5,922 7,457 7,624 7,876 10,293 22,483 118 202
GNPA (%) 1.1 1.1 1.2 1.2 1.2 1.1 1.1 2.1 97 93
NNPA (%) 0.4 0.4 0.5 0.5 0.5 0.5 0.6 1.2 62 70
PCR (Calculated, %) 60.0 60.1 60.5 56.3 56.2 55.8 47.7 43.0 -466 -1,322
Margins (%) - Reported
Yield on loans 11.5 11.3 11.0 11.1 11.2 11.4 11.5 11.3 -27 17
Cost of deposits 6.2 5.9 5.9 6.0 6.2 6.5 6.7 6.8 6 82
NIMs 4.0 4.0 4.0 4.0 3.9 3.8 3.8 3.8 1 -13
Capitalization - (%)
Tier I 16 15 15 15 14 14 14 14 -8 -88
CET 1 14 14 14 13 13 13 13 12 -72 -135
Risk Weighted Assets
(INR bn) 1,452 1,561 1,594 1,732 1,820 1,940 2,019 2,145 6 24
RWA to Total Assets 76.2 80.0 79.4 78.1 79.5 78.1 78.8 77.2 -156 -90
Quarterly performance: Balance sheet profile

INRbn 1QFY18 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19 3QFY19 4QFY19 QoQ YoY
Balance Sheet
Loans 1,164 1,232 1,285 1,450 1,507 1,631 1,732 1,864 8 29
Investments 421 421 462 501 527 501 537 593 10 18
Deposits 1,337 1,414 1,461 1,516 1,589 1,682 1,757 1,949 11 29
Borrowings 274 236 234 383 370 428 445 473 6 24
Total Assets 1,907 1,950 2,007 2,216 2,289 2,483 2,562 2,778 8 25
Deposits Break Up
CASA Deposits 505 598 626 667 690 734 765 841 10 26
% of total Deposits 37.8 42.3 42.9 44.0 43.4 43.6 43.6 43.1
Savings 316 402 422 459 477 511 500 545 9 19
% of total Deposits 62.2 57.7 57.1 56.0 56.6 56.4 56.4 56.9
Loan Break Up
Corporate 693 737 754 877 904 995 1,051 1,137 8 30
Large Corporate 330 361 366 443 450 495 508 522 3 18
Mid-corporate 226 236 241 257 265 301 323 334 3 30
Business Banking 136 140 148 178 189 199 220 282 28 59
Retail Loans 471 495 531 572 603 636 680 727 7 27
of which
Vehicle Finance 349 365 393 424 447 472 505 533 6 26
CV Loan 156 164 179 199 207 220 233 244 5 23
Utility Loan 45 48 52 56 59 63 67 71 6 27
Car Loan 48 50 53 53 56 59 63 65 4 22
Small CV/3 Wheeler 24 24 25 25 27 29 30 31 3 24
2 Wheeler loan 33 33 35 36 38 39 43 45 4 25
Equipment Financing 44 46 50 55 60 63 69 76 10 38
Loan against property 73 75 78 80 82 83 86 89 4 11
Credit Cards 19 22 24 27 30 32 35 44 24 63
Personal Loans 29 33 36 41 44 49 54 61 12 48
Loan Mix
Corporate 59.5 59.8 58.7 60.5 60.0 61.0 60.7 61.0
Retails 40.5 40.2 41.3 39.5 40.0 39.0 39.3 39.0
Asset Quality
Slippage Ratio 2.6 2.0 1.6 3.0 1.6 1.4 2.5 10.2 767 713
corporate 2.5 2.0 0.9 3.2 1.2 0.5 2.4 14.7 1,230 1,154
consumer finance 2.7 2.1 2.5 2.8 2.3 2.6 2.6 3.2 58 38
Retail GNPL
CV 1.1 1.0 0.9 1.0 0.9 0.9 1.1 1.2
Utility 1.4 1.4 1.3 1.3 1.4 1.3 1.3 1.3
CE 1.1 1.0 1.1 1.1 0.9 0.7 0.8 0.7
3W 1.3 1.1 1.2 1.3 1.1 1.3 1.3 1.4
2W 3.6 3.6 3.8 3.8 3.7 3.9 3.6 3.8
Cars 0.7 0.7 0.6 0.7 0.7 0.8 0.8 0.8
LAP/HL/PL 1.0 0.4 0.6 0.6 0.4 0.6 0.4 0.4
Tractors 0.9 1.1 1.2 1.3 1.2 1.7 1.5 1.8
Cards 1.2 1.5 1.7 1.6 1.8 1.8 1.9 1.9
Quarterly performance (BHAFIN)

INRmn 1QFY18 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19 3QFY19 4QFY19 QoQ (%) YoY (%)
Profit and Loss
Net Interest Income 2,452 2,747 3,615 4,146 3,527 4,693 5,221 5,701 9 38
Other Income 306 284 324 428 595 861 877 1,000 14 134
Fees 293 273 304 403 564 785 850 950 12 136
Total Income 2,757 3,031 3,938 4,574 4,122 5,555 6,099 6,701 10 47
Operating Expenses 1,468 1,609 1,944 1,986 2,110 2,220 2,101 2,407 15 21
Employee 1,091 1,189 1,473 1,499 1,592 1,596 1,512 1,706 13 14
Others 377 420 471 487 519 624 589 701 19 44
Operating Profits 1,289 1,422 1,994 2,587 2,011 3,335 3,998 4,294 7 66
Provisions 356 -13 -95 436 180 257 193 86 -56 -80
PBT 933 1,436 2,090 2,151 1,831 3,078 3,805 4,208 11 96
Taxes 451 82 161 17 409 749 922 997 8 5,728
PAT 482 1,354 1,929 2,134 1,422 2,329 2,884 3,212 11 50
DuPont Analysis (Standalone)

Y/E March FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19E FY20E FY21E
Net Interest Income 3.3 3.4 3.6 3.4 3.5 3.8 3.7 3.5 3.5 3.4
Core Fee Income 1.8 1.9 2.0 2.2 2.2 2.2 2.1 2.0 2.0 1.9
Core Income 5.1 5.3 5.6 5.7 5.8 5.9 5.8 5.6 5.5 5.3
Operating Expenses 2.6 2.7 2.7 2.9 2.9 3.0 2.8 2.6 2.4 2.3
Cost to Core Income 51.3 50.6 48.6 50.8 50.1 50.1 47.9 46.0 44.4 44.0
Core operating Profits 2.5 2.6 2.9 2.8 2.9 3.0 3.0 3.0 3.0 3.0
Non Interest income 2.0 2.1 2.4 2.6 2.6 2.6 2.4 2.3 2.2 2.1
Trading and others 0.2 0.2 0.4 0.3 0.4 0.4 0.3 0.2 0.2 0.2
Operating Profits 2.7 2.8 3.2 3.1 3.3 3.4 3.3 3.2 3.2 3.1
Provisions 0.3 0.4 0.6 0.4 0.5 0.7 0.6 1.2 0.7 0.6
NPA 0.3 0.3 0.4 0.3 0.4 0.4 0.5 1.1 0.6 0.5
PBT 2.3 2.4 2.7 2.7 2.7 2.7 2.7 2.0 2.6 2.5
Tax 0.8 0.8 0.9 0.9 0.9 0.9 0.9 0.7 0.9 0.9
RoA 1.6 1.6 1.8 1.8 1.8 1.8 1.8 1.3 1.7 1.7
Leverage (x) 12.4 11.0 10.0 10.5 9.2 8.7 9.2 10.0 10.8 11.4
RoE 19.2 17.8 17.5 19.0 16.6 15.4 16.6 13.2 18.4 18.8
Financials (Standalone)
Profit and loss account (INRm) Capital Adequacy Ratio
Year-ended March 31 FY17 FY18 FY19e FY20e FY21e Year-ended March 31 FY17 FY18 FY19e FY20e FY21e
Interest Income 1,44,057 1,72,807 2,22,612 2,83,145 3,52,487 RWA (INRm) 14,35,290 17,31,560 21,45,490 26,31,572 32,45,102
Interest Expense 83,431 97,833 1,34,150 1,75,074 2,23,696 Tier I (%) 14.7 14.6 13.7 12.9 12.1
Net Interest Income 60,626 74,974 88,462 1,08,071 1,28,791 Tier II (%) 0.6 0.4 0.5 0.4 0.3
% NII Growth 34.2 23.7 18.0 22.2 19.2 Total CAR (%) 15.3 15.0 14.2 13.2 12.4
Non-interest income 41,715 47,501 56,467 66,944 80,047
Net Revenue 1,02,341 1,22,476 1,44,929 1,75,015 2,08,838 Business Ratios
Employees Expenses 15,210 17,807 18,535 20,389 23,447 Year-ended March 31 FY17 FY18 FY19e FY20e FY21e
Other Op. Expenses 32,621 38,108 45,512 54,614 65,537 Credit / Deposit(%) 89.3 95.6 95.7 96.4 96.4
Operating Profit 54,510 66,561 80,882 1,00,012 1,19,854 Investment / Deposit (%) 29.0 33.0 30.4 29.9 29.7
% OP Growth 31.6 22.1 21.5 23.7 19.8 CASA (%) 36.9 44.0 43.1 41.3 39.1
Tax 14,918 18,747 16,795 27,084 32,563 RoaA (%) 1.8 1.8 1.3 1.7 1.7
Total Provisions 10,913 11,754 31,077 20,354 24,082 Core RoE (%) 15.4 16.6 13.2 18.4 18.8
Net Profit 28,679 36,060 33,011 52,574 63,210 Dividend Yield (%) 0.4 0.5 0.5 0.7 0.9
Balance sheet (INRm) Key assumptions

Net Worth 2,02,261 2,38,416 2,66,860 3,11,412 3,65,050 Deposit
Deposits 12,65,722 15,16,392 19,48,679 24,16,362 30,20,453 Deposit growth (%) 36.1 19.8 28.5 24.0 25.0
Borrowings 2,24,537 3,82,891 4,73,211 5,82,448 6,90,465 Cost of deposits (%) 6.3 5.8 6.3 6.5 6.7
Other Liabilities & Provisions 93,964 78,563 89,444 1,07,404 1,38,449 Advances
Total liabilities 17,86,484 22,16,262 27,78,194 34,17,626 42,14,418 Advances growth (%) 27.9 28.2 28.6 25.0 25.0
Cash & Balances with RBI 77,487 1,09,624 99,612 1,24,903 1,17,136 Yield on advances (%) 11.4 10.6 11.0 11.1 11.1
Bal. with banks/ call money 1,08,795 22,535 48,222 48,327 60,409 Investments
Investment 3,67,021 5,00,767 5,92,662 7,23,047 8,96,578 Investments growth (%) 7.8 36.4 18.4 22.0 24.0
Loans and advances 11,30,805 14,49,537 18,63,935 23,29,919 29,12,398 Yield on investments (%) 7.0 7.1 6.7 7.1 7.1
Fixed Assets 13,352 13,388 17,100 19,100 21,100
Other Assets 89,023 1,20,412 1,56,664 1,72,330 2,06,796
Earnings Ratios
Total assets 17,86,484 22,16,262 27,78,194 34,17,626 42,14,418
Year-ended March 31 FY17 FY18 FY19e FY20e FY21e
Interest Inc. / Avg.assets (%) 9.0 8.6 8.9 9.1 9.2
Asset Quality Interest Exp./ Avg. assets (%) 5.2 4.9 5.4 5.7 5.9
Year-ended March 31 FY17 FY18 FY19e FY20e FY21e NIM (%) 4.2 4.2 4.0 3.9 3.7
Gross NPA (INRm) 10,549 17,049 39,474 52,937 73,507 Int. exp/ Int earned (%) 57.9 56.6 60.3 61.8 63.5
Gross NPA (%) 0.93 1.17 2.10 2.25 2.49 Oth. Inc./ Tot. Inc. (%) 40.8 38.8 39.0 38.3 38.3
Net NPA (INRm) 4,389 7,457 22,483 28,122 35,223 Staff exp/Total opt. exp (%) 31.8 31.8 28.9 27.2 26.3
Net NPA (%) 0.39 0.51 1.21 1.21 1.21 Cost/ Income Ratio (%) 46.7 45.7 44.2 42.9 42.6
% coverage of NPA 58.4 56.3 43.0 46.9 52.1 Total Prov./ Operating Profit (%) 20.0 17.7 38.4 20.4 20.1
Delinquencies (%) 1.6 2.9 3.7 2.0 2.0 Loan loss prov./Avg. loans (bps) 0.7 0.7 1.6 0.9 0.8
Source: Company Antique
Per Share Data
Book value per share (INR) 391 437 512 602
Adj. BVPS (INR) 383 413 482 564
Price/ Book value 3.9 3.5 3.0 2.5
EPS(INR) 60 55 87 105
P/E Ratio 25.3 27.7 17.4 14.5
Financials (including BHAFIN)

Profit and loss account (INRm) Capital Adequacy Ratio
Interest Income 1,58,057 1,93,037 2,49,642 3,17,663 3,97,336 RWA (INRm) 14,87,378 17,91,120 21,66,991 26,65,748 32,87,246
Interest Expense 89,656 1,05,103 1,42,038 1,84,839 2,37,863 Tier I (%) 15.8 15.8 14.9 15.0 14.1
Net Interest Income 68,400 87,934 1,07,604 1,32,824 1,59,473 Tier II (%) 0.6 0.5 0.4 0.3 0.3
% NII Growth 34.2 28.6 22.4 23.4 20.1 Total CAR (%) 16.4 16.3 15.3 15.3 14.4
Non-interest income 44,979 48,842 59,801 67,491 81,387
Net Revenue 1,13,379 1,36,776 1,67,405 2,00,315 2,40,860 Business Ratios
Employees Expenses 19,275 23,059 24,941 27,934 32,124 Year-ended March 31 FY17 FY18 FY19e FY20e FY21e
Other Op. Expenses 34,083 39,863 47,944 57,533 69,039 Credit / Deposit(%) 94.9 101.9 99.6 102.0 102.0
Operating Profit 60,022 73,854 94,520 1,14,849 1,39,697 Investment / Deposit (%) 29.0 33.0 30.4 29.9 29.7
% OP Growth 31.2 23.0 28.0 21.5 21.6 CASA (%) 36.9 44.0 43.1 41.3 39.1
Tax 13,943 19,457 19,870 30,886 37,752 RoaA (%) 1.9 2.0 1.6 1.9 1.9
Total Provisions 14,503 12,438 31,792 21,256 25,298 Core RoE (%) 15.4 17.2 15.0 18.2 18.5
Net Profit 31,575 41,959 42,858 62,707 76,647 Dividend Yield (%) 0.3 0.4 0.6 0.9 1.1
Balance sheet (INRm) Key assumptions

Net Worth 2,26,243 2,69,331 3,08,570 3,86,148 4,49,401 Deposit
Deposits 12,65,722 15,16,392 19,48,679 24,16,362 30,20,453 Deposit growth (%) 36.1 19.8 28.5 24.0 25.0
Borrowings 2,95,787 4,65,831 5,20,991 6,77,289 8,46,611 Cost of deposits (%) 6.3 5.8 6.3 6.5 6.7
Other Liabilities & Provisions 1,02,907 83,828 1,02,244 1,22,774 1,58,262 Advances
Total liabilities 18,90,660 23,35,381 28,80,484 36,02,573 44,74,727 Advances growth (%) 28.9 28.6 25.6 27.0 25.0
Cash & Balances with RBI 1,05,551 1,31,354 1,19,692 1,55,148 1,84,010 Yield on advances (%) 12.1 11.4 12.0 12.1 12.1
Bal. with banks/ call money 1,08,795 22,535 48,222 61,873 77,341 Investments
Investment 3,67,026 5,00,772 5,92,668 7,23,054 8,96,588 Investments growth (%) 7.8 36.4 18.4 22.0 24.0
Loans and advances 12,01,635 15,44,817 19,41,015 24,65,089 30,81,361 Yield on investments (%) 7.0 7.3 6.9 7.1 7.1
Fixed Assets 13,587 13,669 17,438 19,813 22,313
Other Assets 94,066 1,22,235 1,61,450 1,77,595 2,13,114
Earnings Ratios
Total assets 18,90,660 23,35,382 28,80,484 36,02,573 44,74,727
Interest Inc. / Avg.assets (%) 9.3 9.1 9.6 9.8 9.8
Asset Quality Interest Exp./ Avg. assets (%) 5.3 5.0 5.4 5.7 5.9
Year-ended March 31 FY17 FY18 FY19e FY20e FY21e NIM (%) 4.6 4.7 4.6 4.6 4.4
Gross NPA (INRm) 10,549 17,049 39,474 52,937 73,507 Int. exp/ Int earned (%) 56.7 54.4 56.9 58.2 59.9
Gross NPA (%) 0.87 1.10 2.02 2.13 2.36 Oth. Inc./ Tot. Inc. (%) 39.7 35.7 35.7 33.7 33.8
Net NPA (INRm) 4,389 7,457 22,483 28,122 35,223 Staff exp/Total opt. exp (%) 36.1 36.6 34.2 32.7 31.8
Net NPA (%) 0.37 0.48 1.21 1.21 1.21 Cost/ Income Ratio (%) 47.1 46.0 43.5 42.7 42.0
% coverage of NPA 58.4 56.3 43.0 46.9 52.1 Total Prov./ Operating Profit (%) 24.2 16.8 33.6 18.5 18.1
Delinquencies (%) 1.6 2.9 3.7 2.0 2.0 Loan loss prov./Avg. loans (bps) 0.7 0.7 1.6 0.9 0.8
Per Share Data
Book value per share (INR) 385 443 543 632
Adj. BVPS (INR) 378 421 517 600
Price/ Book value 3.9 3.4 2.8 2.4
EPS(INR) 61 62 89 109
P/E Ratio 24.9 24.4 17.1 14.0

Previous Reco
CMP
: BUY
: INR554
Cipla
Target Price : INR620 Growth drivers on track
Cipla's 4Q19 reported Revenue/EBITDA/Adj.PAT stood at INR 44,040mn/
9,611mn/5,203mn beating est by 10%/38%/54%. Notwithstanding the
gSensipar driven superlative numbers, we believe the adjusted EBITDA
margins stood at ~18.5%, ~100bps ahead of our/cons estimates as easing
of supply bottlenecks, an industry leading domestic formulations
Kunal Randeria performance and a growing US business ensured continual improvement in
+91 22 4031 3386 operating performance.
kunal.randeria@antiquelimited.com Our positive long-term outlook on Cipla continues to be based on a)
improving execution in the US that is now being reflected in the numbers; b)
the continual growth in India, especially the rapidly-growing chronic therapies
and US revenue is likely to ease a complete margin collapse in RoW; c) South
Africa branded business remains on a sure-footing with market-leading
growth. Management has indicated that FY20 is likely to be a better year
than FY19 - double -digit growth in US and India, industry-leading growth in
South Africa and improving margins. While we acknowledge that competition
Market data to gVoltaren gel and gPulmicort is intensifying, continuity of gSensipar with
Sensex : 39,110 limited competition till at least 1QFY20, one limited competition launch incl.
albuterol and higher contribution from B2C business should ensure an
Sector : Pharmaceuticals
improved operating performance. The launch momentum should continue -
Market Cap (INRbn) : 445.6 we expect a busy 12-15 months with launches like gProventil and a basket
Market Cap (USDbn) : 6.390 of HIV drugs. Our INR 620 TP is based on 20x FY21 earnings plus NPV-
O/S Shares (m) : 805.7 based fair value of late-stage respiratory franchise that yields a fair value
52-wk HI/LO (INR) : 678/476 of INR 60. Maintain BUY
Avg Daily Vol ('000) : 2,327 4Q19 wrap
Bloomberg : CIPLA IN 19% YoY topline growth was on account of domestic formulations outperforming peers by
Source: Bloomberg growing 11% YoY, US going from strength to strength at ~USD 160mn (~USD 122-125mn
Valuation excl. gSensipar) and EU growing 43% YoY to INR 2,360mn as supplies of key products
resumed. Besides gSensipar, higher OOI helped gross margin which stood at 66.3%; although
FY19 FY20e FY21e
other expenses were higher than expectations, margins beat was driven by controlled R&D
EPS (INR) 19.0 22.8 27.6 and employee expenses. Cipla took an impairment of INR 2.1bn wrt Invagen. Tax rate was
P/E(x) 29.1 24.3 20.1 lower than expected at 25.5% (vs. ANTQe 28%). Net debt has come off sharply and now
P/BV(x) 3.0 2.7 2.4 stands at INR 1.6bn.
EV/EBITDA(x) 14.9 13.0 11.1 What next? Key businesses poised for growth
Dividend Yield (%) 0.0 0.0 0.0 While we acknowledge the pressure on some of the profitable molecules, we also note that
Source: Bloomberg the headwinds to underlying business seen in 1H have abated. We believe Cipla's launches
Returns (%) and its visible pipeline is capable of weathering headwinds in the near-term especially now
that supply pressures have started to ease, US B2C contribution increases and the worst of the
1m 3m 6m 12m EM declines behind the company. The US has finally broken the shackles and is expected to
Absolute (1) 2 7 6 grow solidly in the next few quarters; India business will grow 10-12% with Cipla making
Relative (3) (6) (5) (6) good progress on the chronic side and South Africa (private market), where Cipla continues
Source: Bloomberg to outperform the market comfortably. The gross margin pressures are likely to ease by FY20
as capacity pressures ease and with limited competition launches and higher domestic
Shareholding pattern contribution, pressure on gross margin is unlikely to escalate. Cipla's low US base and continual
launches, chronic driven-domestic growth and stable South Africa and EU business makes it
Promoters : 37% a sustainable growth story. Maintain BUY.
Public : 63%
Others : 0% Key financials
Year ended March (INRm) 2017 2018 2019 2020e 2021e
Source: Bloomberg
Revenues(INRm) 145,740 152,190 163,619 179,252 195,216
Price performance vs Nifty EBITDA(INRm) 24,756 28,262 30,968 34,587 39,155
140 EBITDA Margin (%) 17.0 18.6 18.9 19.3 20.1
120 PAT(INRm) 10,327 13,762 15,291 18,309 22,172
100 PAT growth (%) (31.6) 33.3 11.1 19.7 21.1
EPS (INR) 12.8 17.1 19.0 22.8 27.6
80
EPS growth (%) (31.6) 33.3 11.1 19.7 21.1
May-18 Sep-18 Jan-19 May-19
P/E(x) 43.2 32.4 29.1 24.3 20.1
Cipla NIFTY P/BV(x) 3.6 3.1 3.0 2.7 2.4
Source: Bloomberg Indexed to 100 EV/EBITDA(x) 19.0 16.4 14.9 13.0 11.1
Key takeaways from the conference call

US
Maintain 1 limited competition launch per quarter guidance. Expect double-
digit growth on adjusted basis (adjusted for gSensipar)
12+ ANDA filings
gSensipar: Adj for gSensipar, growth was in-line with guidance (~USD 125mn exit rate)
File 2 respiratory products in FY20. 1 launch every year from FY21
First inhaler launch in FY20 (albuterol). Albuterol: 55mn unit market and unit price is
~USD 20 per unit currently. So see a lot of scope to take a fair share of the market
Specialty funding: Part funding through balance sheet and part through P&L. Have
already started funding and some of it is part of R&D already
Tramadol readouts will come out next year
gAdvair trial: started late CY18/early-CY19 and will last 15 months
South Africa
Growing 3x market at 10.4% YoY
Mirren portfolio will strengthen OTC
Maximum price increase allowed was 1% in South Africa in FY19
Global tender business
Revenues have rebased
India
FY19: Adj for GST, 8% YoY growth
Trade generics slightly higher than Rx business. Seeing some de-stocking in trade generics
business
Comfortable base for FY20 as inventory reduction has stabilized in Rx business. Grow
faster than market (market growing at 9-10%)
In-licensed LG Lifesciences portfolio targeting IVF and growth hormone
Chronic ~60% of India Rx business
Financial
Gross margin: driven by gSensipar
Other expenses: Investment in branded markets. Litigations and provisions related to
receivables ~INR 500mn
EBITDA shown double-digit growth adjusted for the above mentioned items. For FY20,
expect margins to expand from normalized FY19 levels
O/S fx hedges: USD 135mn, ZAR 374mn. Cash flow hedges: USD 162mn and ZAR
240mn
Other financial liabilities: Increased due to investments in subsidiaries and JVs
Chances of impairment of any intangibles is pretty low now
Capex: <INR 5bn and hope to keep it at same level in FY20
Tax for FY20: 27-29%
Other comments
Supply constraints fully resolved
Challenges seen in 1HFY19 are behind the company
Broadly respiratory products in China and may target some oncology in China
Regulatory
Kurkumbh: Already responded to FDA
Goa: Received EIR for Jan-2019 inspection
Cipla's market share in key products

Brand Market share
May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19
Voltaren 0.0% 0.0% 0.0% 0.0% 0.0% 4.2% 9.4% 17.8% 29.0% 33.4% 32.6% 31.7%
Albenza 0.0% 0.0% 0.0% 0.0% 0.7% 32.2% 44.2% 46.9% 48.4% 42.6% 42.3% 44.1%
Reyataz 0.0% 0.0% 0.0% 0.0% 0.0% 1.8% 5.4% 6.9% 9.9% 11.5% 14.9% 19.1%
Xeloda 0.0% 0.0% 0.0% 0.0% 0.0% 6.7% 17.7% 19.7% 19.0% 11.9% 1.5% 1.9%
Depo-testosterone 0.0% 0.0% 0.0% 0.0% 0.0% 0.2% 5.4% 11.6% 14.7% 15.3% 12.9% 10.2%
Pulmicort 15.4% 16.5% 18.5% 22.0% 22.6% 24.8% 25.1% 25.7% 26.0% 27.0% 28.5% 28.4%
Wellbutrin SR 0.0% 0.2% 0.6% 1.3% 1.6% 2.0% 2.2% 2.3% 2.4% 2.4% 2.6% 2.8%
Legacy products Market share

Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19
Mobic 43.0% 41.4% 40.3% 40.4% 40.4% 39.2% 37.3% 34.7% 32.5% 31.5% 31.1% 31.4%
Topamax 46.8% 45.9% 46.0% 46.1% 45.2% 45.5% 45.4% 39.4% 33.9% 33.9% 34.3% 33.9%
Zoloft 17.6% 16.2% 13.1% 15.8% 16.6% 17.7% 18.6% 18.5% 18.4% 18.2% 18.4% 18.5%
Lexapro 17.8% 15.5% 15.0% 15.8% 16.1% 14.5% 13.8% 14.8% 14.6% 15.3% 15.1% 13.6%
Norvasc 14.7% 14.2% 11.4% 8.2% 7.6% 8.4% 8.9% 9.0% 8.5% 8.2% 8.9% 8.9%
Neurontin 21.1% 19.4% 18.8% 17.9% 17.6% 19.6% 20.2% 20.3% 19.9% 20.0% 19.9% 19.9%
Fosamax 33.1% 33.7% 34.1% 35.8% 36.4% 34.7% 35.6% 34.8% 35.1% 35.3% 35.6% 35.4%
Amrix 18.0% 17.9% 19.0% 19.7% 18.1% 18.6% 23.1% 27.4% 26.7% 27.8% 25.9% 25.8%
Wellbutrin XL 10.8% 11.2% 11.0% 10.8% 10.3% 9.7% 9.5% 9.0% 9.1% 8.9% 8.7% 9.0%
Lamictal 12.5% 11.0% 10.0% 9.0% 8.3% 8.2% 8.1% 8.0% 8.5% 8.4% 7.9% 7.1%
Source: Bloomberg
Cipla 4Q19 P&L

Cipla P&L (INR m) Q4FY19A Q4FY18A Q3FY19A % YoY % QoQ Q4FY19E % Delta vs Q4FY19E % Delta vs
ANTQe (cons) cons
Net Sales 42,710 34,958 39,057 22% 9% 39,211 9%
Other op. income 1,330 2,022 1,013 -34% 31% 837 59%
Net Total Income 44,040 36,980 40,070 19% 10% 40,048 10% 43,894 0%
Expenses
Raw material 14,858 13,303 14,627 12% 2% 14,626 2%
Staff cost 7,125 6,990 7,179 2% -1% 7,176 -1%
R&D 3,032 2,657 2,990 14% 1% 3,058 -1%
Mfg & Other expense (est) 9,414 8,461 8,203 11% 15% 8,234 14%
Reported EBITDA 9,611 5,569 7,071 73% 36% 6,954 38% 7,539 27%
% EBITDA Margin 21.8% 15.1% 17.6% 676 bps 417 bps 17.4% 446 bps 17.2%
Other income 954 400 785 21% 678 41%
Interest income
Interest Expense 448 352 442 477 -6%
Depreciation 5,103 2,848 2,931 79% 74% 2,484 105%
Profit Before Tax (PBT) 5,014 2,769 4,483 81% 12% 4,671 7%
Tax 1,278 462 1,257 177% 2% 1,308 -2%
% Tax rate 25.5% 16.7% 28.0% 28.0%
Minority interest* -95 -254 -100 -4% -50
Exceptionals 0 775 0
Share of Profit (+) / Loss (-) of associates -159 1 10 -26633% -1758% -35
Adjusted PAT 5,203 2,561 3,336 103% 56% 3,379 54%
Reported PAT 3,672 1,786 3,336 106% 10% 3,379 9% 3,211 14%
% Cost Ratios Q4FY19A Q4FY18A Q3FY19A % YoY % QoQ Q4FY19E % Delta vs Q4FY19E % Delta vs
ANTQe (cons) cons
Raw Materials 33.7 36.0 36.5 -224 bps -277 bps 36.5 -278 bps
Staff cost 16.2 18.9 17.9 -272 bps -174 bps 17.9 -174 bps
R&D (est) 6.9 7.2 7.5 -30 bps -58 bps 7.6 -75 bps
Mfg & Other expense (est) 21.4 22.9 20.5 -150 bps 90 bps 20.6 82 bps
Sales Break-up Q4FY19A Q4FY18A Q3FY19A % YoY % QoQ Q4FY19E % Delta vs Q4FY19E % Delta vs
ANTQe (cons) cons
Domestic formulations 15,000 13,530 15,850 11% -5% 15,289 -2%
US 11,430 6,750 8,490 69% 35% 9,299 23%
South Africa 5,130 4,670 5,570 10% -8% 5,490 -7%
Europe 2,360 1,650 1,850 43% 28% 1,652 43%
RoW 7,050 7,008 5,757 1% 22% 5,842 21%
APIs 1,740 1,350 1,540 29% 13% 1,640 6%
Others (incl. other operating income) 1,330 2,022 1,013 -34% 31% 837 59%
Total revenue 44,040 36,980 40,070 19% 10% 40,048 10%
Cipla P-IV pipeline

Molecule Brand Indication US FTF Patent Remarks
Sales expiry/
($mn) Launch time
Ranolazine Ranexa 400 May-19 Launch after Lupin's 3m exclusivity expires in May
Solifenacin Vesicare Overactive baldders 1000 Teva possibly May-19 Teva settles with Astellas for launch after paediatric
succinate exclusivity. Alkem, Ajanta, Auro, Cadila, Cipla, Glenmark
among Indian players to get TA; total 12+ TAs
Mometasone Nasonex Nasal congestion 750 N/A Jun-19 Apotex launched in Mar'16. Last patent '353 expires in
furoate Apr'18. Expect Cipla to supply to Teva as court found its
ANDA non-infringing on patents
Albuterol Proventil Asthma 180 Perrigo 4Q20 Filed in Dec'16. Assuming launch within 20 months of filing.
Smaller market than other albuterols - Ventolin and ProAir
Efavirenz Sustiva HIV 150 N/A Oct-19 Gilead expects competition from Dec'17. Mylan only one to
have FA; >10 players have TA incl. Teva, Emcure, Strides
and Auro
Darunavir Prezista HIV 1100 N/A Dec-19 "Cipla, Lupin, Teva & Hetero(Multiple strengths) have
Ethanolate tentative approval.
“Mylan (75mg,150mg,300mg,400mg,600mg) has not
received approval yet. Lupin undisclosed settlement with J&J.
In mid 2015 Cipla admitted that patents were valid"
Ritanovir Norvir HIV <200 Dec-2016/3QFY18 Cipla, Auro and 2 other players have TA. Used in
combination
Olopatadine Pataday Allergic conjunctivitis 150 NA Dec-22/Dec-20 Cipla sued in Jan'14 over '186 (May'24) and '609 (Dec'22)
(occular itching) patents. Apotex sued in Jul'13 and Wockhardt in Sep'13,
Barr (Teva) got approval in Jul'15. No launch yet. Novartis
has settled with 'certain generic manufacturers'
Salmeterol + Advair Asthma/COPD 1700 NA Mar-21 Plan to file around Sep-2019. Expect launch in FY21. Mylan
fluticasone Diskus couldn't get approval in Jun-2018; Hikma likely to be 2nd
launcher
Ritanovir + Kaletra HIV 115 May-21 Cipla, Auro and 3 other players have TA. However, Cipla is
lopinavir the only one to have approval in pellets
Emtricitabine Emtriva HIV <100 May-21 Cipla, Auro and Matrix have TA. Other filers include Lupin.
Cipla and Lupin sued in 2012
Efavirenz+ Atripla HIV 2000 Teva possibly May-21 Teva filed first, followed by Mylan. Lupin filed in 2014.
Emtricitabine+ Settlement reached with Gilead for Truvada and Atripla.
Tenofovir Cipla, Auro and 3-4 others have TA
Emtricitabine; Truvada HIV 2500 NA May-21 Lupin amended its ANDA and will not launch before Jan'18.
Tenofovir Disoproxil Lupin could be among the initial launchers with Mylan but
Fumarate doesn't have TA yet. Cipla, Auro, Strides + 2 others have TA
Paclitaxel Abraxane Cancer 650 Cipla possibly Mar-22 Sued in Dec'16 challenging '788, '536, '229, '260, earliest
of which expiring Oct'20. Other filers are Teva (Cephalon)
settled for Mar-22 launch. Glenmark plans to file in 2019.
Abraxane market may expand if approved for other
indications (adjuvant PanC), squamous NSCLC
Lenalidomide Revlimid Multiple myeloma 6800 Natco Mar-23 Assumed launch date. Natco will launch on Mar-22 as per
settlement; Dr.Reddy's will be 2nd entrant. Cadila, Cipla,
Apotenx and 2-3 other filers
Apremilast Otezla Plaque psoriasis 1200 N/A Dec-23 Patents running till 2034. Multiple filers incl. Cipla,
Glenmark, MSN, Teva, Auro, Sandoz and Mankind among
others
Levalbuterol Xopenex Asthma/COPD 150 Teva Dec-23 This is the MDI variant. The genericised one (levalbuterol
tartrate HFA hcl) is a nebulizer. Watson sued in 2012 and Cipla in
May'15
carfilzomib Kyprolis 700 Apr-25 Sued in Oct'16. 8-10 filers till date
Darunavir Prezista HIV 1100 Dec-19/Aug-24 "Cipla, Lupin, Teva & Hetero(Multiple strengths) have
Ethanolate tentative approval. “Mylan (75mg,150mg,300mg, 400mg,
600mg) has not received approval yet. Lupin undisclosed
settlemetn with J&J"
Formoterol + Symbicort Asthma/COPD 1300 NA Jan-24 Expect it to be limited competition
budesonide
Vortioxetine HCL Trintellix Depression 149 Jun-27 Multiple filers incl. Cipla Lupin, Unichem, MSM, Apotex.
Dolutegravir Tivicay HIV 1400 Oct-27 Cipla, Dr.Reddy's, Sandoz and Apotex are the filers
Abacavir + Triumeq HIV 2210 Oct-27 Cipla, Mylan, Reddy's are the filers
dolutegravir+
lamivudine
Efinaconazole Jublia 280 Acurx Jan-28 Multiple filers incl. Cipla Lupin, Cadila, Strides etc
dimethyl Tecfidera Multiple Sclerosis 3800 Feb-28 20+ filers. Mylan's IPR targets '514 patent expiring 2028; if
difumarate successful, generic entry can be in Jun-2020. Cipla has also
challenged via P-IV patents post Apr-2019
Ibrutinib Imbruvica caps Cancer 600 Dec-27 Last patent in 2031. Multiple filers incl. Cipla,
Shilpa, Sun, Cadila. Trial to start in Oct-2020
Olopatadine Pazeo Ocular allergy 100 May-32 Challenging '154 and '053 patents expiring 2032. Other
filers are Teva, Lupin, Apotex
Invagen P-IV pipeline

Molecule Brand Indication US FTF Patent Remarks
Sales expiry/
($mn) Launch time
Vilazodone Viibryd MDD Depression 340 N/A Sep-19 Alembic, Invagen, Apotex, Accord and Teva sued in Mar'15;
Hydrochloride no FDA approval yet, Teva has TA, Alembic got TA in Apr'17.
Trial date Jan-18
Ticagrelor Brilinta Blood thinner 350* N/A Dec-19 to Apr-28 Invagen sued (Oct'15) over 5 patents expiring between
Jul'18-Apr'30; Mylan, Sigma, Watson, Alembic sued at the
same time, while Sandoz, Micro Labs, HEC, Amneal,
Prinston, Apotex sued in Nov'15. Trial scheduled for Mar-
Apr '18
Rivaroxaban Xarelto Deep vein thrombosis400 N/A Apr-24 In Oct'15 , Bayer sued several generics incl. Auro and
Torrent. Sued InvaGen in Feb'16 (Jan P-IV). . In Jul-18, court
upheld patent expiring Aug-2024
Lurasidone Latuda Bipolar disorder 1700 N/A 1-Nov-26 Auro, Cipla, Lupin, Sun and MSN among Indian filers which
have TA. Dainippon Sumi settled with 16 generics with some
allowed to launch on 1-Feb-2023. Amneal, Emcure, Zydus,
Torrent, and Aurobindo admit that the ’827 patent (2024) is
valid and infringed. InvaGen, Dr. Reddy’s, and Accord admit
that the ’794 (2026) and ’827 patents are valid and
infringed.
linagliptin/ Tradjenta/ Diabetes 1200* May-25 Patents expiring from 2017; generic cos targeting patents
linagliptin+ Jentadueto expiring from 2025. Auro, Cadila, Sun, Reddy's and
metformin Invagen among Indian companies sued in Aug'15
Canagliflozin Invokana Diabetes 700 None Dec-27 Sued for challengin several patents incl. 2029. 15+ filers
incl. Cipla, Auro, Reddy, Laurus, Indoco, Cadila, Lupin
Cipla P&L changes

FY20e FY21e
Old New Y/y change % Old New Y/y change %
Domestic 71,364 69,944 12% -2% 80,642 77,988 12% -3%
US - $ 537 562 14% 5% 612 609 8% -1%

US - INR 38,104 39,371 15% 3% 43,443 42,605 8% -2%
South Africa - INR 24,138 22,124 3% -8% 26,069 23,894 8% -8%

Europe - INR 7,321 8,020 15% 10% 8,419 9,223 15% 10%
Other markets - INR 29,195 28,669 5% -2% 30,655 30,103 5% -2%
Export APIs - INR 7,223 7,223 3% 0% 7,439 7,439 3% 0%
Net sales 177,344 175,352 10% -1% 196,667 191,252 9% -3%
Gross profit 113,323 111,348 9% -2% 126,260 122,401 10% -3%

- margin 63.9% 63.5% 64.2% 64.0%
Reported EBITDA 34,602 34,587 12% 0% 39,461 39,155 13% -1%

- margin 19.1% 19.3% 19.7% 20.1%
Net profit (Reported) 19,213 18,309 -5% 23,051 22,172 -4%
EPS 23.9 22.8 20% -5% 28.7 27.6 21% -4%

Source: Company,Antique
Financials
Profit and loss account (INRm) Cash flow statement (INRm)
Year ended 31 Mar 2017 2018 2019 2020e 2021e Year ended 31 Mar 2017 2018 2019 2020e 2021e
Net Revenue 145,740 152,190 163,619 179,252 195,216 PBT 12,222 17,468 20,786 24,883 30,089
Op. Expenses 120,984 123,929 132,651 144,665 156,062 Depreciation & amortisation 13,229 13,228 13,263 11,696 11,364
EBITDA 24,756 28,262 30,968 34,587 39,155 Interest expense 1,594 1,142 1,684 1,457 1,168
Depreciation 12,799 13,228 13,263 11,696 11,364 (Inc)/Dec in working capital 2,307 (9,154) (11,552) (8,412) (9,556)
EBIT 11,957 15,033 17,705 22,890 27,791 Tax paid (4,503) (2,501) (5,695) (6,843) (8,275)
Other income 2,287 3,577 4,766 3,450 3,466 Less: Interest/Dividend Income Recd. (125) (137) (151) (166) (183)
Interest Exp. 1,592 1,142 1,684 1,457 1,168 Other operating Cash Flow (901) (2,269) (980) (72) (72)
Extra Ordinary Items -gain/(loss) - 775 - - - CF from operating activities 23,824 17,778 17,355 22,544 24,536
Reported PBT 12,652 18,243 20,786 24,883 30,089 Capital expenditure (11,360) (7,500) (5,000) (6,701) (7,650)
Tax 1,953 2,501 5,695 6,843 8,275 Inc/(Dec) in investments (1,749) (2,576) (11,857) 72 72
Reported PAT 10,699 15,742 15,091 18,040 21,815 Add: Interest/Dividend Income Recd. 121 137 151 166 183
Minority Int./Profit (loss) From Asso. (70) (28) (153) (153) (153) CF from investing activities (12,988) (9,939) (16,706) (6,463) (7,395)
Net Profit 10,629 15,714 14,938 17,888 21,662 Inc/(Dec) in share capital 120 - - - -
Adjusted PAT 10,327 13,762 15,291 18,309 22,172 Inc/(Dec) in debt (10,803) (146) 2,183 (14,751) (14,751)
Adjusted EPS (INR) 12.8 17.1 19.0 22.8 27.6 Dividend Paid (1,936) (1,936) (2,420) (2,904) -
Others (557) (2,342) (4,984) (1,457) (1,168)
Balance sheet (INRm) CF from financing activities (13,175) (4,425) (5,222) (19,112) (15,919)
Year ended 31 Mar 2017 2018 2019 2020e 2021e Net cash flow (2,339) 3,414 (4,573) (3,032) 1,222
Share Capital 1,609 1,610 1,611 1,611 1,611 Opening balance 8,582 6,242 9,656 5,084 2,052
Reserves & Surplus 123,645 140,682 148,511 164,069 186,393 Closing balance 6,242 9,656 5,084 2,052 3,274
Networth 125,254 142,292 150,123 165,680 188,005
Debt 41,126 40,980 43,162 28,411 13,660 Growth indicators (%)
Minority Interest 4,382 3,524 3,320 2,898 2,388 Year ended 31 Mar 2017 2018 2019 2020e 2021e
Net deferred Tax liabilities 5,888 3,157 2,239 2,239 2,239 Revenue(%) 6.5 4.4 7.5 9.6 8.9
Capital Employed 176,650 189,953 198,844 199,229 206,292 EBITDA(%) (1.0) 14.2 9.6 11.7 13.2
Gross Fixed Assets 95,906 107,596 113,050 119,751 127,401 Adj PAT(%) (31.4) 33.3 11.1 19.7 21.1
Accumulated Depreciation 18,334 31,562 42,825 52,943 62,816 Adj EPS(%) (31.6) 33.3 11.1 19.7 21.1
Capital work in progress 7,192 5,124 3,311 3,311 3,311
Net Fixed Assets 84,765 81,157 73,536 70,118 67,895 Valuation (x)
Goodwill 26,784 28,147 28,691 27,113 25,622 Year ended 31 Mar 2017 2018 2019 2020e 2021e
Investments 10,744 12,492 23,197 23,197 23,197 P/E 43.2 32.4 29.1 24.3 20.1
Non Current Investments 2,370 1,470 1,939 1,939 1,939 P/BV 3.6 3.1 3.0 2.7 2.4
Current Investments 8,374 11,022 21,258 21,258 21,258 EV/EBITDA 19.0 16.4 14.9 13.0 11.1
Current Assets, Loans & Adv. 85,726 104,932 112,196 120,193 133,815 EV/Sales 3.2 3.1 2.8 2.5 2.2
Inventory 34,853 40,447 39,648 43,613 47,974 Dividend Yield (%) 0.0 0.0 0.0 0.0 0.0
Debtors 24,974 31,025 41,507 47,733 54,893
Cash & Bank balance 6,242 9,656 5,084 2,052 3,274
Financial ratios
Loans & advances and others 19,657 23,805 25,957 26,794 27,673
Year ended 31 Mar 2017 2018 2019 2020e 2021e
RoE (%) 8.5 10.3 10.5 11.6 12.5
Current Liabilities & Prov. 31,369 36,776 38,775 41,392 44,237
RoCE (%) 8.1 10.2 11.6 13.2 15.4
Liabilities 26,763 29,126 30,194 32,442 34,900
Asset/T.O (x) 1.2 1.1 1.1 1.2 1.3
Provisions 4,606 7,650 8,582 8,950 9,337
Net Debt/Equity (x) 0.2 0.1 0.1 0.0 (0.1)
Net Current Assets 54,356 68,156 73,421 78,801 89,578
EBIT/Interest (x) 8.9 16.3 13.3 18.1 26.8
Application of Funds 176,650 189,953 198,844 199,229 206,292
Per share data Margins (%)

EBITDA Margin(%) 17.0 18.6 18.9 19.3 20.1
No. of shares (m) 804 804 804 804 804
EBIT Margin(%) 8.2 9.9 10.8 12.8 14.2
Diluted no. of shares (m) 804 804 804 804 804
PAT Margin(%) 7.0 8.8 9.1 10.0 11.2
BVPS (INR) 155.7 176.9 186.6 206.0 233.7
CEPS (INR) 29.2 36.0 35.2 37.0 41.2 Source: Company Antique


Previous Reco
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Jindal Steel & Power
Target Price : INR176 Impairment of Australian mine dampens the sentiment
Jindal Steel and Power's (JSPL) 4QFY19 consolidated revenue at ~INR 100.2bn
was in line with estimates and higher 16.6% YoY and 5% QoQ. Sequential
improvement in revenue was led largely by continuing ramp up of the Angul
Blast furnace with domestic sales volumes improving 21% QoQ to 1.45mn
Pallav Agarwal tons. This was partially offset by a decline in blended standalone realizations
+91 22 4031 3411
pallav.agarwal@antiquelimited.com
to ~INR50,000/ton, down 10% QoQ impacted by a drop in steel prices of
~INR2,500/ton and lower revenues from other products like power, cement,
Vikrant Gupta iron ore and pellets. Consolidated EBITDA at ~INR 18.5bn came in 8% below
+91 22 4031 3429 our estimates primarily on account of lower than expected performance in
vikrant.gupta@antiquelimited.com the international mining operations in Mozambique, Australia and South
Africa. JSPL reported a consolidated adjusted loss of ~INR4.1bn as compared
to a profit of ~INR1.3bn in Q4FY18 and a loss of ~INR0.24bn in Q4FY18. JSPL
booked an impairment loss of ~INR13bn reflected in the depreciation and
Market data amortization costs with respect to its Australian mining operations and an
Sensex : 39,110 exceptional loss of ~INR17.3bn related to write off of differential coal royalty
Sector : Metals and disputed electricity duty liability.
Standalone EBITDA ahead of estimates driven by Angul production ramp up
O/S Shares (m) : 967.9 Domestic steel sales volumes at 1.45MT improved 23% YoY and 21%QoQ. Sequential
52-wk HI/LO (INR) : 251/123 improvement in volumes was driven by continued ramp up of Angul plant. Standalone EBITDA
Avg Daily Vol ('000) : 7,708 came in at ~INR14.4bn against estimates of ~INR13.5bn, down 5% YoY and 3% QoQ. The
Bloomberg : JSP IN beat on our estimates was on account of higher than expected sales volumes while EBITDA/
Source: Bloomberg ton at ~INR9,900 came in line with estimates. Oman EBITDA came in at ~USD35mn in line
Valuation with estimates, down 50% YoY but up 9% QoQ.
FY19 FY20e FY21e JPL EBITDA flat YoY and QoQ
EPS(INR) -1.6 -2.2 2.8 Jindal Power reported an EBIDTA of INR2.67bn flat YoY and QoQ with power generation at
PE (x) nm nm nm 2,609mn units as against 2,609mn units in Q3FY19 and 2,310mn units in Q4FY18. Outlook
P/B (x) 0.5 0.5 0.5 is expected to improve with tenders from NHPC, States of Bengal, Gujarat and Bihar in
EV/EBITDA (x) 6.4 6.4 5.7 which the company has participated. Low availability of coal through e- auction continues to
Dividend Yield (%) - 0.7 0.7 remain a concern in the short term.
Impairment taken on Australian mines; risk of further write downs
Returns (%)
JSPL has taken an impairment of ~INR13bn with respect to Australian mines with the Wongawilli
1m 3m 6m 12m
mines being placed under care and maintenance this quarter. The net asset value of its
Absolute (14) (4) (10) (37)
Australia mines now stands at ~AUD500mn with a risk of further impairments possible if the
Relative (15) (12) (19) (44)
approvals for Russell Vale mine do not come through. JPL, through its subsidiaries, had invested
Source: Bloomberg
~INR11.5bn to execute hydro projects which have not commened. With the government
Shareholding pattern delaying its contribution to the projects along with delay in other approvals and licenses there
is a risk of impairment at a later date.
Promoters : 60%
Public : 40% Leverage levels flat QoQ, targeting net debt reduction of INR120bn over two years
Others : 0% Consolidated net debt (adjusted for impact of forex translation) at end of 4QFY19 was
Source: Bloomberg INR390bn as against INR392bn last quarter. Net debt declined by INR41.4bn over
March'2018 levels on a constant currency basis. The company has given a capex guidance
Price performance vs Nifty
of ~INR10bn for FY20e and targeted debt reduction of ~INR120bn over the next two years.
120
100 Valuation and outlook
80
60 Blast furnace and steel melt shop (SMS) at Angul continued to ramp up, however the synthetic
40 gas based Direct Reduced Iron plant of 1.8MTPA capacity is not operational currently. We
May-18 Sep-18 Jan-19 May-19 expect domestic steel spreads to broadly stabilize at the Q4 exit run rate of ~INR9,500/ton
with the impact of subdued steel prices and higher iron ore prices to be offset by an improving
JSPL NIFTY
product mix and targeted operational efficiencies. We maintain our BUY rating with a revised
Source: Bloomberg Indexed to 100
SOTP of ~INR176 (earlier ~INR185) per share.
Consolidated performance (INR mn)

Q4FY19 Q4FY18 YoY (%) Q3FY19 QoQ (%)
Net sales 100,234 85,988 16.6 95,656 4.8
(Inc)/Dec in stock 1,757 (501) (450.8) (3,714) (147.3)
Raw material consumed 41,015 29,778 37.7 40,539 1.2
Staff costs 2,787 2,377 17.2 2,795 (0.3)
Other expenses 36,228 32,969 9.9 35,267 2.7
Total expense 81,787 64,623 26.6 74,887 9.2
EBITDA 18,447 21,365 (13.7) 20,769 (11.2)
Depreciation 23,733 9,599 147.2 10,357 129.2
EBIT (5,286) 11,766 (144.9) 10,412 (150.8)
Other income - 5 (100) 148 (100.0)
Net interest 11,631 10,714 8.6 10,424 11.6
PBT (16,917) 1,057 nm 136 nm
Tax (7,122) 944 (854.3) 1,008 (806.2)
Exceptional items (17,339) (4,376) -
Net profit (27,133) (4,264) nm (872) nm
Share of profit from associates - 17 -
Minority Interest (5,676) (1,166) nm (632) nm
PAT after minority/associates (21,458) (3,081) nm (240) nm
Adjusted PAT (4,119) 1,295 nm (240) nm
Ratios Q4FY19 Q4FY18 YoY (%) Q3FY19 QoQ (%)

EBITDA margin (%) 18.4 24.8 21.7
Effective tax rate (%) 20.8 (28.4) 741.5
Jindal Power
INR mn Q4FY19 Q4FY18 YoY (%) Q3FY19 QoQ (%)
Revenues 9,990 9,520 4.9 10,040 (0.5)
Realization per unit 4.2 4.5 (7.1) 4.2 (0.5)
EBITDA 2,670 2,650 0.8 2,730 (2.2)
EBITDA per unit 1.1 1.2 (10.8) 1.1 (2.2)
PBT 440 (2,820) (115.6) (2,020) (121.8)
PAT 130 (2,720) (104.8) (1,600) (108.1)
Generation - mn units 2,609 2,310 12.9 2,609 -
Standalone quarterly performance (INR mn)

Net sales 72,668 57,516 26.3 67,309 8.0
(Inc)/Dec in stock 974 (1,143) (185.2) (1,979) (149.2)
Raw material consumed 33,507 22,317 50.1 32,039 4.6
Staff costs 1,467 1,241 18.2 1,693 (13.4)
Other expenses 22,321 19,914 12.1 20,754 7.6
Total expense 58,269 42,329 37.7 52,508 11.0
EBITDA 14,399 15,188 (5.2) 14,801 (2.7)
Depreciation 5,757 4,683 22.9 5,722 0.6
EBIT 8,643 10,505 (17.7) 9,080 (4.8)
Other income - - 145
Net interest 9,795 6,864 42.7 6,351 54.2
PBT (1,153) 3,641 (131.7) 2,873 (140.1)
Tax (6,149) 247 nm 1,107 nm
Extraordinary (16,538) (1,943) -
Reported net profit (11,542) 1,451 nm 1,766 nm
Adjusted net profit 4,996 3,394 47.2 1,766 182.9
Ratios
EBITDA margin (%) 19.8 26.4 22.0
Effective tax rate (%) 34.8 14.6 38.5
SoTP valuation
FY21e Multiple Valuation
(INRm) (INR mn)
Steel EBITDA incl Shadeed Oman 67,506 6.0 405,034
Jindal Power stake 96.42% stake valuation 28,733

Total enterprise value 433,766
Less: Consolidated net debt of the company excluding power 255,373
Target market capitalization 178,393
No of equity shares (mn) 1,016
Target price (INR per share) 176
CMP (INR per share) 152
Potential upside % 15
Source: Antique
Financials
Year-ended March 31 FY17 FY18 FY19 FY20e FY21e Year-ended March 31 FY17 FY18 FY19 FY20e FY21e
Net revenues 210,505 273,834 395,195 417,731 456,129 PBT (30,429) (18,641) (28,017) (1,667) 5,179
Total Expense 163,925 209,143 311,139 335,959 370,236 Depreciation & amortisation 39,490 38,830 54,804 42,876 43,623
EBITDA 46,580 64,691 84,056 81,771 85,892 Interest expense 33,896 38,657 42,642 42,089 38,601
Depreciation & amortisation 39,490 38,830 54,804 42,876 43,623 (Inc)/Dec in working capital (6,280) 7,654 37,204 (15,682) (660)
EBIT 7,090 25,861 29,252 38,895 42,269 Tax paid 5,027 2,398 3,902 (662) (2,358)
Other income 100 29 157 1,527 1,510 CF from operating activities 41,704 68,899 110,535 66,954 84,385
Financial expense 33,896 38,657 42,642 42,089 38,601 Capital expenditure (25,000) (16,066) (56,781) (11,000) (11,000)
Exceptional items loss(gain) 3,723 5,874 14,784 - - Net Investments 83 (2,219) (5) - -
PBT (30,429) (18,641) (28,017) (1,667) 5,179 Income from investments 100 29 157 1,527 1,510
Provision for Tax (5,027) (2,398) (3,902) 662 2,358 CF from investing activities (24,817) (18,256) (56,630) (9,473) (9,490)
PAT (25,402) (16,242) (24,115) (2,329) 2,820 Inc/(Dec) in equity share capital 0 53 - 48 -
Share in profit from JV 27 87 - - - Inc/(Dec) in preference share capital - 11,948 - 6,687
Minority Interest (2,562) (2,064) (7,662) (67) (39) Inc/(Dec) in debt 31,448 (30,147) (51,780) - (25,000)
Attributable PAT (22,813) (14,091) (16,453) (2,262) 2,860 Other items (15,871) 6,068 40,102 (3,300) (3,669)
Adj. PAT after min. & asso. (19,090) (8,218) (1,669) (2,262) 2,860 Dividends & Interest paid (33,896) (38,657) (42,642) (43,125) (39,637)
Basic EPS (INR) (20.9) (8.5) (1.7) (2.2) 2.8 CF from financing activities (18,319) (50,735) (54,320) (39,691) (68,306)
Diluted EPS (INR) (20.9) (8.1) (1.6) (2.2) 2.8 Net cash flow (1,432) (91) (415) 17,790 6,589
Opening balance 6,204 4,772 4,681 4,266 22,056
Balance sheet (INRm) Closing balance 4,772 4,681 4,266 22,056 28,645
Year-ended March 31 FY17 FY18 FY19 FY20e FY21e
Equity share capital 915 968 968 1,016 1,016 Growth indicators (%)
Reserves & surplus 299,590 302,878 323,308 330,474 336,236 Year-ended March 31 FY17 FY18 FY19 FY20e FY21e
Shareholder's funds 300,505 303,846 324,275 331,490 337,252 Revenue 14.6 30.1 44.3 5.7 9.2
Minority interest 6,467 4,403 (3,011) (2,721) (2,682) EBITDA 35.5 38.9 29.9 (2.7) 5.0
Debt 472,767 442,620 390,840 390,840 365,840 PAT (30.1) (57.0) (79.7) 35.5 (226.4)
Deferred tax liability / (asset) 53,586 50,284 53,643 53,643 53,643 EPS (30.1) (61.2) (79.7) 35.5 (226.4)
Capital employed 833,326 801,153 765,748 773,253 754,053
Gross fixed assets 783,127 846,580 912,864 910,107 921,107 Valuation (x)
Less: Accumulated depreciation 129,476 168,002 222,805 259,773 297,220 Year-ended March 31 FY17 FY18 FY19 FY20e FY21e
Net fixed assets 653,651 678,578 690,059 650,334 623,886 P/E nm nm nm nm 54.0
Capital work in progress 97,162 49,775 40,272 54,029 54,029 P/BV 0.5 0.5 0.5 0.5 0.5
Goodwill on Consolidation 5,670 5,922 6,164 6,164 6,164 EV/EBITDA 13.0 9.0 6.4 6.4 5.7
Investments 3,677 1,458 1,452 1,452 1,452 EV/Sales 2.9 2.1 1.4 1.3 1.1
Inventory 35,993 49,596 65,095 89,761 95,659 Dividend Yield (%) - - - 0.7 0.7
Debtors 17,166 18,261 30,292 37,229 41,282
Cash & cash equivalent 4,772 4,681 4,266 22,056 28,645
Financial ratios
RoE (%) (6.4) (2.7) (0.5) (0.7) 0.8
Other current assets 50,009 56,158 50,012 50,012 50,012
RoCE (%) 0.9 3.2 3.8 5.0 5.6
Current assets, loans & adv. 145,816 156,572 157,902 219,263 238,772
Net Debt/Equity (x) 1.6 1.4 1.2 1.1 1.0
Creditors 68,954 87,755 125,736 155,030 167,330
EBIT/Interest (x) 0.2 0.7 0.7 0.9 1.1
Other liabilities & provisions 3,696 3,397 4,365 3,248 3,247
Current liabilities & prov. 72,650 91,151 130,100 158,278 170,577
Margins (%)
Net current assets 73,166 65,421 27,801 61,273 68,522
Application of funds 833,326 801,153 765,748 773,253 754,054
EBITDA 22.1 23.6 21.3 19.6 18.8
Per share data EBIT 3.4 9.4 7.4 9.3 9.3

PAT (9.1) (3.0) (0.4) (0.5) 0.6
Outstanding shares (m) 915 968 968 1,016 1,016
Turnover ratios
BVPS (INR) 328 314 335 326 332
CEPS (INR) 43 40 57 42 43
Debtors (days) 30 24 28 33 33
DPS (INR) - - - 1.0 1.0
Inventory (days) 80 87 76 98 94
Creditor (days) 154 153 148 168 165
Current Reco : HOLD 4QFY19 RESULT UPDATE

Previous Reco
CMP
: HOLD
: INR219
Crompton Greaves Consumer Electricals
Target Price : INR245 Positives priced in; Maintain HOLD
Potential Return : 12% Crompton Greaves Consumer (Crompton) reported in line performance during
4QFY19 as the Electric Consumer Durables (ECD) segment drove the overall
revenue growth while the lighting business remained subdued during the
quarter, pretty much a reflection of the full year FY19. ECD segment saw an
impressive broad based performance as both fans and water heaters
Dhirendra Tiwari contributed to revenue growth although the growth was, to some extent,
+91 22 4031 3436 impacted by an extended winter season. Within fans, although the premium
dhirendra.tiwari@antiquelimited.com
segment continues to deliver disproportionate growth and increase its
Abhijeet Singh revenue contribution (revenue share of premium fans in FY19 - 25%, FY18 -
+91 22 4031 3414 21%), the company is comfortably placed even within in the mid segment.
abhijeet.singh@antiquelimited.com This ensured a retail off take market share of 23.8% for fans in FY19. The
company experienced some margin pressure for ECD during the quarter on
account of increased input costs. The lighting segment's subdued revenue
growth can be attributed to the sustained price erosion witnessed starting
Market data 1QFY19. However, the green shoot for the quarter was the lighting business
Sensex : 39,110 margin coming back to the double digit trajectory as the management
Sector : Industrials indicated some arrest in price erosion in the bulbs category. With a host of
Market Cap (INRbn) : 137.3 innovative launches in the fans (Aura fluidic, Avancer Prime etc.) and lighting
Market Cap (USDbn) : 1.969 (Anti-bacteria) businesses along with a significant market share in each
O/S Shares (m) : 627.0 coupled with significant growth opportunities in geysers and coolers, the
52-wk HI/LO (INR) : 273/190 company is well placed to deliver an EPS CAGR of 13%. However, at current
Avg Daily Vol ('000) : 452 valuations, we continue to remain cautious on the stock and maintain HOLD
Bloomberg : CROMPTON IN with a target price of INR 245 based on 30x its FY21 EPS.
Source: Bloomberg
Result highlights:
Valuation Crompton Consumer's 4QFY19 revenue came in at INR 12bn in line with our estimates
FY19 FY20e FY21e
growing 7% YoY. The Electric Consumer Durables (ECD) segment drove the overall revenue
EPS (INR) 6.4 6.8 8.2
growth recording a growth of 10% during the quarter while the lighting business continues
P/E (x) 34.1 32.0 26.9
to be subdued (grew 2% YoY). Thus, for FY19, revenue stood at INR 45bn (growth of
P/BV (x) 12.5 12.1 10.2
10% YoY).
EV/EBITDA (x) 22.9 20.6 17.4
Dividend Yield (%) 1.5 1.6 1.9 The company saw 80bps decline in EBITDA margin which came in at 13.8% during the
quarter. This was primarily due to 220bps decline in the ECD business margin while the
lighting business margin saw an improvement of 40bps. For FY19, the company was
Returns (%)
able to maintain a flat EBITDA margin at 13% despite a 40bps gross margin compression.
1m 3m 6m 12m
Absolute (6) 5 8 (10) PAT at INR 1.4bn, grew 36% and was, to some extent, buoyed by a write back of INR
Relative (7) (4) (3) (20) 285mn against current tax expense in respect of an earlier assessment year. For FY19,
Source: Bloomberg PAT came in INR 4bn recording a growth of 24% YoY.
Shareholding pattern Concall highlights:
Promoters : 34%
Tax write-back: At the time of demerger, goodwill of INR 7.8bn was reflected in balance
Public : 66%
sheet. So, the company claimed tax benefit on amortization of goodwill. The company
Others : 0%
expects to credit the refund amount of tax for FY17, FY18, FY19. The amount credited
during this quarter pertains to FY16. The total benefit is expected to INR 2.5bn.
Source: Bloomberg
The company didn't witness any systemic slowdown as most of the purchases for the
Price performance vs Nifty company's products are cash based. Another possible reason could be that the company
120
has less exposure to the rural areas for the company's portfolio of products.
100
Over the next few years, the company is looking to expand to new verticals after expanding
80
coolers and geysers out of its small appliances business. The company is also exploring
60
inorganic growth options for the same.
CG Consumer Electricals Advertisement spends to be around 2.5% of sales in FY20.
NIFTY
Total prepayment to suppliers in FY19 - INR 3bn. Therefore, gain vis a vis an investment
in Mutual Funds (assuming 7% return) is around INR 60-70mn for FY198.
Lighting
LED net of EESL grew 11% in value and 25% in volume.
Price decline seems to have flattened out in the B2C segment for bulbs while there is
some price erosion expected to continue in Baton and B2B segments.
LED business is 85% of the total business currently.
Focus is to drive the B2B business which is currently 50% of the overall lighting business.
Separate team for B2B and hiring of key account managers focusing on the B2B business.
Key Initiatives during the quarter: Anti-bacterial light bulb launched at the back end of
4QFY19. Apart from basic lighting function, it kills 85% of the bacteria. Price is 15%
premium to the traditional pricing. This is backed by strong advertising and the company
is also going to advertise in the Cricket World Cup 2019.
Low double digit margin is a sustainable margin for the lighting business.
For B2C, about 30% of the business is lamps and 70% is fixtures (batons and panels
make the bulk of fixtures).
EESL sales constitute INR 370mn for the quarter and INR 1400mn for the year.
Targeting double digit profit growth for F20.
Electric Consumer Durables
Growth driven by all segments
Performance somewhat impacted by late onset of summer.
Fans
3 major innovations introduced at the back end of the quarter-(1) Aura fluidic ceiling
fan(first in industry 5 year warranty), (2) Specialty fan designed for focused air (particularly
to be used in kitchens), (3) Fan designed for geographies with voltage fluctuation issues.
Significant advertising and marketing spend particularly towards Aura model launch.
Fans growth was in line with ECD segment growth where in each segment (economy,
premium and others) contributed to growth.
Crompton has a significant presence in all the segments and expects a disproportionate
growth from the premium segments while maintaining strong presence in the mid and
low segments.
Premium fans contribution to revenue :FY19 - 25%, FY18 - 21%
Retail off take share for fans - 25.1% during the quarter and for FY19 it stands at 23.8%.
Pumps
Strong performance continues driven by Crest Mini recording high double digit volume
growth especially in Southern region.
Agricultural Pumps - 20% growth. Going forward, agricultural segment is expected to be
the growth driver.
In Residential pumps, the company is market leader in East and North. So, there is
enough headroom for growth in Western and Southern region where the company feels
it is relatively small in terms of market share.
Geysers
Currently small in terms of market share. Significantly more potential for growth moving
growth.
Coolers
Launched a new desert cooler range particularly targeting the northern market.
Quarterly performance
(INR mn) 4QFY18 1QFY19 2QFY19 3QFY19 4QFY19 YoY (%) QoQ (%) FY19 FY18 YoY (%)
Revenue 11,263 12,039 10,378 10,303 12,069 7.2 17.1 44,789 40,797 9.8
Raw Material 7,704 8,143 7,411 7,032 8,332 8.2 18.5 30,918 27,996 10.4
% of Sales 68.4% 67.6% 71.4% 68.3% 69.0% 69.0% 68.6%
Employee Cost 700 718 675 760 765 9.3 0.6 2,919 2,827 3.3
% of Sales 6.2% 6.0% 6.5% 7.4% 6.3% 6.5% 6.9%
Other Exp 1,215 1,505 1,053 1,250 1,301 7.0 4.1 5,109 4,664 9.5
% of Sales 10.8% 12.5% 10.1% 12.1% 10.8% 11.4% 11.4%
Total Exp 9,618 10,366 9,139 9,042 10,398 8.1 15.0 38,946 35,486 9.7
EBITDA 1,645 1,673 1,239 1,261 1,671 1.6 32.5 5,843 5,310 10.0
EBITDA Margin (%) 14.6% 13.9% 11.9% 12.2% 13.8% 13.0% 13.0%
Other Income 109 88 98 124 170 55.5 37.0 480 308 56.1
Interest 161 152 150 150 143 (10.9) (4.7) 596 637 (6.5)
Depreciation 31 31 32 33 33 7.1 1.2 129 126 2.2
Exceptional Items - - - - - - -
PBT 1,562 1,578 1,155 1,202 1,664 6.5 38.5 5,598 4,854 15.3
Tax 530 535 386 405 259 (51.2) (36.1) 1,585 1,617 (2.0)
Tax rate (%) 33.9% 33.9% 33.4% 33.7% 15.5% 28.3% 33.3%
Adjusted PAT 1,032 1,043 769 797 1,405 36.2 76.4 4,014 3,238 24.0
Exceptional Items - - - - - - -
Reported PAT 1,032 1,043 769 797 1,405 36.2 76.4 4,014 3,238 24.0
PAT Margin (%) 9.2% 8.7% 7.4% 7.7% 11.6% 9.0% 7.9%
EPS (Rs) 1.6 1.7 1.2 1.3 2.2 36.2 76.4 6.4 5.2 24.0
Note: Tax expense for 4QFY19 consists of INR 285mn worth of credit pertaining to a previous assesement year, adjusting for which PAT stands at 1.1bn
Segmental performance
(INR mn) 4QFY18 1QFY19 2QFY19 3QFY19 4QFY19 YoY (%) QoQ (%) FY19 FY18 YoY (%)
Sales 11,263 12,039 10,378 10,303 12,069 7.2 17.1 44,789 41,051 9.1
Lighting products 3,379 2,791 3,250 3,188 3,425 1.4 7.5 12,653 12,770 (0.9)
Electric consumer durables 7,884 9,248 7,128 7,116 8,644 9.6 21.5 32,136 28,281 13.6
EBIT 2,085 1,989 1,554 1,610 2,077 (0.4) 29.0 7,230 6,820 6.0
Lighting products 374 188 206 282 393 5.0 39.0 1,069 1,473 (27.4)
Electric consumer durables 1,711 1,802 1,348 1,327 1,685 (1.5) 26.9 6,162 5,347 15.2
EBIT Margin (%)
Lighting products 11.1 6.7 6.3 8.9 11.5 8.4 11.5
Electric consumer durables 21.7 19.5 18.9 18.7 19.5 19.2 18.9
Revenue and revenue growth trend Revenue mix trend

15,000 15 100%
12,000 80%
10
9,000 60%
5
6,000 40%
0
3,000 20%
- -5 0%
3Q FY16
4Q FY16
1Q FY17
2Q FY17
3Q FY17
4Q FY17
1Q FY18
2Q FY18
3Q FY18
4Q FY18
1Q FY19
2Q FY19
3Q FY19
4Q FY19
3Q FY16
4Q FY16
1Q FY17
2Q FY17
3Q FY17
4Q FY17
1Q FY18
2Q FY18
3Q FY18
4Q FY18
1Q FY19
2Q FY19
3Q FY19
4Q FY19
Revenue (INR mn) Revenue growth (%, RHS) Series1 Series2
EBITDA and EBITDA margin trend PAT and PAT growth trend
2,000 15 1,500 45
1,600 14 1,200 30
1,200 13 900 15
800 12 600 0
400 11 300 -15
- 10 0 -30
3Q FY16
4Q FY16
1Q FY17
2Q FY17
3Q FY17
4Q FY17
1Q FY18
2Q FY18
3Q FY18
4Q FY18
1Q FY19
2Q FY19
3Q FY19
4Q FY19
3Q FY16
4Q FY16
1Q FY17
2Q FY17
3Q FY17
4Q FY17
1Q FY18
2Q FY18
3Q FY18
4Q FY18
1Q FY19
2Q FY19
3Q FY19
4Q FY19
EBITDA (Rs mn) EBITDA margin (%, RHS) PAT (INR mn) PAT growth (%, RHS)
Lighting segment revenue and margin trend ECD segment revenue and margin trend
4,000 16 10,000 25
3,200 8,000 22
13
2,400 6,000 19
10
1,600 4,000 16
7
800 2,000 13
- 4 - 10
3Q FY16
4Q FY16
1Q FY17
2Q FY17
3Q FY17
4Q FY17
1Q FY18
2Q FY18
3Q FY18
4Q FY18
1Q FY19
2Q FY19
3Q FY19
4Q FY19
3Q FY16
4Q FY16
1Q FY17
2Q FY17
3Q FY17
4Q FY17
1Q FY18
2Q FY18
3Q FY18
4Q FY18
1Q FY19
2Q FY19
3Q FY19
4Q FY19
Lighting Revenue (INR mn) EBIT Margin (%, RHS) ECD Revenue (INR mn) EBIT Margin (%, RHS)

Financials
Net Revenue 39,759 40,797 44,789 50,382 57,599 PBT 4,306 4,854 5,616 6,409 7,631
Op. Expenses 34,857 35,486 38,931 43,902 49,946 Depreciation & amortisation 110 126 129 155 158
EBITDA 4,902 5,310 5,858 6,480 7,654 Interest expense 655 637 596 418 418
Depreciation 110 126 129 155 158 (Inc)/Dec in working capital 791 170 1,626 2,690 895
EBIT 4,792 5,184 5,729 6,325 7,495 Tax paid (1,399) (1,617) (1,590) (2,115) (2,518)
Other income 195 308 483 502 553 Less: Interest/Dividend Income Recd. 195 308 483 502 553
Interest Exp. 655 637 596 418 418 Other operating Cash Flow (1,554) (382) (943) (929) (929)
Extra Ordinary Items -gain/(loss) (25) - - - - CF from operating activities 3,105 4,096 5,916 7,131 6,208
Reported PBT 4,306 4,854 5,616 6,409 7,631 Capital expenditure 35 6 19 (904) (124)
Tax 1,399 1,617 1,590 2,115 2,518 Inc/(Dec) in investments (3,185) (490) (1,766) - -
Reported PAT 2,907 3,238 4,025 4,294 5,112 Add: Interest/Dividend Income Recd. 190 220 260 250 250
Net Profit 2,907 3,238 4,025 4,294 5,112 CF from investing activities (2,960) (264) (1,487) (654) 126
Adjusted PAT 2,932 3,238 4,025 4,294 5,112 Inc/(Dec) in debt 1,328 (15) (2,993) (400) -
Adjusted EPS (INR) 4.7 5.2 6.4 6.8 8.2 Dividend Paid (1,095) (1,886) (2,345) (2,501) (2,978)
Note: Tax expense for FY19 consists of INR 285mn worth of credit pertaining to a previous Others (577) (858) 558 (3,431) (3,141)
assesement year, adjusting for which PAT stands at 3.7bn CF from financing activities (345) (2,758) (4,779) (6,332) (6,119)
Net cash flow (200) 1,074 (350) 145 214
Balance sheet (INRm) Opening balance 900 700 1,774 1,424 1,569
Year-ended March 31 FY17 FY18 FY19 FY20e FY21e Closing balance 700 1,774 1,424 1,569 1,783
Share Capital 1,254 1,254 1,254 1,254 1,254
Reserves & Surplus 4,138 6,641 9,731 10,115 12,249
Growth indicators (%)
Networth 5,392 7,895 10,985 11,369 13,503
Revenue 9.7 2.6 9.8 12.5 14.3
Debt 6,500 6,486 3,493 3,093 3,093
EBITDA 17.0 8.3 10.3 10.6 18.1
Net deferred Tax liabilities (182) (479) (597) (597) (597)
Adj PAT 23.0 10.4 24.3 6.7 19.1
Capital Employed 11,710 13,902 13,881 13,865 15,999
Adj EPS 22.9 10.4 24.3 6.7 19.1
Gross Fixed Assets 8,616 8,622 8,641 9,545 9,669
Net Fixed Assets 8,616 8,622 8,641 9,545 9,669
Valuation (x)
Investments 3,185 3,676 5,442 5,442 5,442
Current Investments 3,185 3,676 5,442 5,442 5,442
P/E 46.8 42.4 34.1 32.0 26.9
Current Assets, Loans & Adv. 9,167 11,474 12,018 13,153 15,512
P/BV 25.5 17.4 12.5 12.1 10.2
Inventory 2,348 3,032 3,524 3,666 4,204
EV/EBITDA 28.5 26.1 22.9 20.6 17.4
Debtors 5,434 5,536 5,660 6,902 7,890
EV/Sales 3.5 3.4 3.0 2.6 2.3
Cash & Bank balance 700 1,774 1,424 1,569 1,783
Dividend Yield (%) 0.7 1.2 1.5 1.6 1.9
Loans & advances and others 685 1,131 1,411 1,016 1,634
Financial ratios
Liabilities 8,448 9,695 12,048 14,110 14,468
Provisions 811 175 173 164 156
RoE (%) 76.4 48.7 42.6 38.4 41.1
Net Current Assets (91) 1,604 (202) (1,122) 887
RoCE (%) 52.1 42.9 44.7 49.2 53.9
Asset/T.O (x) 5.0 4.4 4.8 6.0 6.1
Net Debt/Equity (x) 0.5 0.1 (0.3) (0.3) (0.3)
Per share data
EBIT/Interest (x) 7.6 8.6 10.4 16.4 19.3
No. of shares (m) 627 627 627 627 627
Margins (%)
BVPS (INR) 8.6 12.6 17.5 18.1 21.5
EBITDA Margin 12.3 13.0 13.1 12.9 13.3
CEPS (INR) 4.8 5.4 6.6 7.1 8.4
EBIT Margin 12.1 12.7 12.8 12.6 13.0
DPS (INR) 1.5 2.6 3.2 3.4 4.1
PAT Margin 7.3 7.9 8.9 8.4 8.8
Current Reco : HOLD 4QFY19 RESULT REVIEW

Previous Reco
CMP
: HOLD
: INR1,196
Astral Poly Technik
Target Price : INR930 Rex acquisition drags operational performance
Potential Return : (22%) Astral Poly Technik (ASTRA) reported revenue and EBITDA growth of 21% and
1% YoY respectively, whereas adjusted PAT declined 13% YoY in 4QFY19.
Key highlights are: (1) plastics and adhesive business grew 23% and 16%
Manish Mahawar
+91 22 4031 3433 YoY respectively; (2) pipes volumes (inclusive of Rex) grew 23% YoY; (3)
manish.mahawar@antiquelimited.com newly acquired business Rex contributed ~INR0.5bn to sales; (3) Standalone
Prateek Jain pipes and Rex achieved EBITDA margin of 16.9% and 8.7% respectively; (4)
+91 22 4031 3377 Adhesives EBITDA margin declined on account of higher brand spends; (5)
prateek.jain@antiquelimited.com Adhesives plants are currently running at 37% capacity utilization and (6)
Himanshu Binani working capital days in pipes segment reduced from 47 days to 38 days in
+91 22 4031 3417
FY19. ASTRA guided for ~15% sustainable EBITDA margin in pipes segment.
himanshu.binani@antiquelimited.com
Management expects 15% volume growth in pipes in FY20. Management
has maintained guidance for revenue growth of 20% in adhesive segment
Market data in FY20. We maintain HOLD with TP at INR930 based on 30xFY21EPS as the
Sensex : 39,110 positives are already priced in at CMP.
Sector : Mid Cap In-line revenue growth
ASTRA reported revenue growth of 21% YoY to INR7.74bn (consensus - INR7.67bn) on the
O/S Shares (m) : 119.8 back of 23% and 16% YoY growth in piping and adhesives segment. Realisation in pipes
52-wk HI/LO (INR) : 1295/815 segments remained flat YoY. The company has acquired Rex Polyextrusion (Rex) on July 9,
Avg Daily Vol ('000) : 75 2018 and it has contributed ~INR0.5bn to the revenue in 4QFY19. ASTRA guided for 15%
Bloomberg : ASTRA IN volume growth in pipes segment and maintained its revenue growth guidance of 20% adhesive
Source: Bloomberg segment. Management is confident of growth momentum to continue in FY20.
Valuation
New acquisition drags the EBITDA margin
FY19 FY20e FY21e
EPS (INR) 16.7 23.6 30.9 EBITDA margin declined 320bps YoY to 15.4% (consensus - 16%), primarily aided by lower
P/E 71.5 50.6 38.7 other expenditure led by certain expenses being net off from sales (IND AS impact). Piping
P/BV 11.2 9.3 7.6 EBITDA margin declined by 190bps YoY. Adhesives EBITDA margin declined 720bps YoY on
EV/EBITDA 37.5 30.0 23.7 account of higher brand spends in 4QFY19. EBITDA margin expansion was subdued majorly
Dividend Yield (%) 0.1 0.1 0.2
on account of high single digit EBITDA margin in Rex (8.7%). It expects overall EBITDA
Source: Bloomberg margin to expand from FY20 aided by (1) launch of value added products (valves, etc.) (2)
Returns (%) normalization of margin for Rex business (14% is normalized EBITDA in Rex) and (3)
1m 3m 6m 12m commercialization of Hosur facility.
Absolute (1) 9 15 30
Relative (2) 0 3 16
Other highlights:
Source: Bloomberg 1) ASTRA has already purchased land (100,000 Sq. yard) to establish manufacturing
Shareholding pattern facility in Bhubaneswar, Odisha and is expected to commercialize in September 2020.
Promoters : 58%
2) On July 9, 2018, the company has acquired 51% stake of Rex Polyextrusion, engaged in
Public : 42% the business of Manufacturing and supply of corrugated and other plastic piping solutions,
Others : 0% for a consideration of INR0.75bn paid in cash. Further, ASTRA shall issue 0.72mn shares
Source: Bloomberg
up in exchange for the balance 49% of equity share of Rex. Accordingly, paid up equity
share capital of the Company has increased from INR119.8mn to INR120.5mn.
140 3) Management guided for capex of INR1-1.25bn in FY20.
120
Valuation and outlook
100
We believe ASTRA is poised for growth with a strong brand driving into structural demand
80
tailwinds, new product launches and E-way bill implementation. We estimate the company to
clock revenue and PAT CAGRs of 20% and 36% respectively with strong pre-tax RoCE of
Astral NIFTY
>25% over FY19-21E. Maintain HOLD.
Detailed financial performance:

4QFY19 Result Snapshot INRm - Consolidated
Particulars 4QFY19 4QFY18 YoY (%) 3QFY19 QoQ (%) FY18 FY19 FY20E FY21E
Net Sales 7,747 6,388 21.3 6,337 22.3 21,060 25,073 30,341 36,276
Total Op. Income 7,747 6,388 21.3 6,337 22.3 21,060 25,073 30,341 36,276
Expenditure 6,558 5,205 26.0 5,400 21.4 17,892 21,224 25,544 30,292
Raw Materials 5,027 4,149 21.2 4,079 23.2 13,380 16,080 19,813 23,579
Cost of traded goods 120 45 168.1 108 11.7 454 397 0 0
Staff Cost 361 292 23.4 386 (6.5) 1,065 1,391 1,669 1,959
Other Expenditure 1,050 719 46.1 829 26.7 2,994 3,355 4,062 4,754
Operating Profit 1,190 1,183 0.5 937 27.0 3,168 3,849 4,797 5,984
OPM (%) 15.4 18.5 -317 14.8 57 15.0 15.4 15.8 16.5
Depreciation 224 152 47.3 202 10.8 571 814 820 870
Other Income 38 23 69.9 32 20.8 127 154 180 220
Interest 73 42 73.6 74 (1.6) 166 257 255 250
Extraord. Item (forex) 14 -49 66 -50 -62 0 0
PBT 945 963 (1.9) 759 24.6 2,508 2,870 3,902 5,084
Tax 292 300 (2.7) 235 24.0 725 861 1,015 1,322
PAT 653 664 (1.5) 523 24.8 1,783 2,009 2,888 3,762
Share of JV Loss/Minority Interest 32 14 120.1 -4 (956.8) 32 51 56 62
Reported PAT 622 649 (4.2) 527 17.9 1,751 1,958 2,831 3,700
NPM (%) 8.0 10.2 -214 8.3 -29 8.3 7.8 9.3 10.2
Adjusted PAT 608 698 (12.9) 461 31.8 1,801 2,020 2,831 3,700
Pipes Matrix
4QFY19 4QFY18 YoY (%) 3QFY19 QoQ (%)
Volume (MT) 38,877 31,617 23.0 27,882 39.4
Realisation (INR/MT) 155,776 156,283 (0.3) 175,174 (11.1)
EBITDA (INR/MT) 24,392 27,454 (11.2) 28,140 (13.3)
4QFY16 18.0 4QFY16 1,084 4QFY16 4,224
1QFY17 21.2 1QFY17 1,106 1QFY17 3,172
2QFY17 14.9 2QFY17 1,314 2QFY17 3,337

3QFY17 12.1 3QFY17 1,032 3QFY17 3,558
4QFY17 12.5 4QFY17 1,289 4QFY17 4,708
1QFY18 1.0 1QFY18 1,276 1QFY18 2,986

ANTIQUE STOCK BROKING LIMITED
Pipes Volume Growth Trend (%)

2QFY18 27.0 2QFY18 1,349 2QFY18 4,002
Adhesives Revenue Trend (INR mn)

Standalone Revenue Trend (INR mn)
3QFY18 28.4 3QFY18 1,369 3QFY18 4,052
4QFY18 10.1 4QFY18 1,625 4QFY18 4,941
1QFY19 15.0 1QFY19 1,472 1QFY19 3,443
2QFY19 4.5 2QFY19 1,656 2QFY19 4,376
3QFY19 4.2 3QFY19 1,573 3QFY19 4,884
4QFY19 23.0 4QFY19 1,880 4QFY19 6,056
4QFY16 (4.6) 4QFY16 11.7 4QFY16 12.4
1QFY17 (4.3) 1QFY17 12.4 1QFY17 12.8
2QFY17 (4.8) 2QFY17 14.0 2QFY17

12.8

3QFY17 3QFY17 11.3 3QFY17 14.5

0.2
4QFY17 (0.9) 4QFY17 13.7 4QFY17 15.3
1QFY18 1QFY18 9.6 1QFY18

(6.7)
13.0
2QFY18 (5.6) 2QFY18 14.6 2QFY18
14.2
Pipes Realisation Growth Trend (%)

Adhesives EBITDA Margin Trend (%)
Standalone EBIDTA Margin Trend (%)
3QFY18 (11.3) 3QFY18 15.1 3QFY18 13.4
4QFY18 (4.7) 4QFY18 20.8 4QFY18 17.6

FROM THE RESEARCH DESK
1QFY19 0.2 1QFY19 14.4 1QFY19 16.8
2QFY19 4.6 2QFY19 15.1 2QFY19 16.6
3QFY19 15.7 3QFY19 10.8 3QFY19

16.1
4QFY19 (0.3) 4QFY19 13.6 4QFY19 15.7
23 May 2019 | 32
Financials
Net Revenue 18,947 21,060 25,073 30,341 36,276 PBT 2,007 2,475 2,870 3,846 5,022
Depreciation 502 571 814 820 870 (Inc)/Dec in working capital (1,133) 391 (252) (1,290) (817)
EBIT 2,136 2,597 3,035 3,977 5,114 Tax paid (562) (725) (861) (1,015) (1,322)
Other income 91 127 154 180 220 Other operating Cash Flow 91 127 217 - -
Interest Exp. 175 166 257 255 250 CF from operating activities 1,080 3,005 3,045 2,617 4,004
Extra Ordinary Items -gain/(loss) (19) (50) (62) - - Capital expenditure (1,379) (2,040) (3,330) (1,000) (1,000)
Reported PBT 2,034 2,508 2,870 3,902 5,084 Inc/(Dec) in investments - - (1) - -
Tax 562 725 861 1,015 1,322 CF from investing activities (1,379) (2,040) (3,331) (1,000) (1,000)
Reported PAT 1,472 1,783 2,009 2,888 3,762 Inc/(Dec) in share capital (103) (86) 496 - -
Minority Int./Profit (loss) From Ass. (26) (32) (51) (56) (62) Inc/(Dec) in debt 318 (394) 705 (1,265) (440)
Net Profit 1,446 1,751 1,958 2,831 3,700 Dividend Paid (42) (49) (140) (210) (490)
Adjusted PAT 1,460 1,788 2,003 2,831 3,700 Others (184) (153) (230) (199) (188)
Adjusted EPS (INR) 12.2 14.9 16.7 23.6 30.9 CF from financing activities (11) (682) 831 (1,674) (1,119)
Net cash flow (310) 283 545 (57) 1,885
Balance sheet (INRm) Opening balance 499 182 437 981 924
Year-ended March 31 FY17 FY18 FY19 FY20e FY21e Closing balance 189 465 981 924 2,809
Share Capital 120 120 120 120 120
Reserves & Surplus 8,349 10,063 12,657 15,278 18,699 Growth indicators (%)
Networth 8,468 10,182 12,777 15,398 18,818 Year-ended March 31 FY17 FY18 FY19 FY20e FY21e
Debt 1,624 1,230 1,935 670 230 Revenue(%) 12.9 11.2 19.1 21.0 19.6
Minority Interest 123 135 150 206 268 EBITDA(%) 27.1 20.1 21.5 24.6 24.7
Net deferred Tax liabilities 265 331 533 533 533 Adj PAT(%) 27.3 22.4 12.0 41.4 30.7
Capital Employed 10,480 11,878 15,394 16,807 19,849 Adj EPS(%) 27.3 22.4 12.0 41.4 30.7
Accumulated Depreciation 2,322 2,893 3,707 4,527 5,397 Valuation (x)
Capital work in progress 250 731 808 808 808 Year-ended March 31 FY17 FY18 FY19 FY20e FY21e
Net Fixed Assets 5,340 6,809 9,324 9,504 9,634 P/E 98.1 80.1 71.5 50.6 38.7
Goodwill 2,322 2,347 2,538 2,538 2,538 P/BV 16.9 14.1 11.2 9.3 7.6
Investments 0 0 2 2 2 EV/EBITDA 54.8 45.5 37.5 30.0 23.7
Non Current Investments 0 0 2 2 2 EV/Sales 7.6 6.8 5.8 4.7 3.9
Current Assets, Loans & Adv. 6,956 7,595 9,128 10,730 14,536 Dividend Yield (%) 0.0 0.0 0.1 0.1 0.2
Inventory 2,721 3,572 3,958 4,323 5,168
Debtors 3,385 3,067 3,391 5,403 6,460
Financial ratios
Cash & Bank balance 182 437 981 (53) 1,851
RoE (%) 18.8 19.2 17.4 20.1 21.6
Loans & advances and others 668 519 798 1,057 1,057
RoCE (%) 23.2 24.4 23.4 25.8 29.1
Asset/T.O (x) 2.6 2.4 2.2 2.2 2.3
Liabilities 4,117 4,839 5,538 5,922 6,816
Net Debt/Equity (x) 0.2 0.1 0.1 0.0 (0.1)
Provisions 21 34 60 45 45
EBIT/Interest (x) 12.8 16.4 12.4 16.3 21.3
Margins (%)
Per share data Year-ended March 31 FY17 FY18 FY19 FY20e FY21e
EBITDA Margin(%) 13.9 15.0 15.4 15.8 16.5
EBIT Margin(%) 11.3 12.3 12.1 13.1 14.1
No. of shares (m) 120 120 120 120 120
PAT Margin(%) 7.7 8.4 7.9 9.3 10.1
BVPS (INR) 70.7 85.0 106.7 128.6 157.1 Source: Company Antique
CEPS (INR) 16.5 19.7 23.6 31.0 38.7

DPS (INR) 0.3 0.4 1.0 1.5 2.0


Previous Reco
CMP
: BUY
: INR42
Future Consumer
Target Price : INR69 Scaling up on ….
Future Consumer Limited (FCL) outperformed our expectations during 4QFY19
led by a better sales growth and lower cost. During 4QFY19 revenue growth
was in high double digits in major categories. Gross margin, though in line,
contracted while EBITDA margin expanded led by lower operating expenses.
Abhijeet Kundu The company continued to witness sequential improvement in profitability
+91 22 4031 3430
abhijeet.kundu@antiquelimited.com
during the quarter. Centre of plate segment recorded strong volume growth
led by high growth in Karmiq and Ektaa brands. FY19, Revenue grew 29%
YoY to INR38.8bn while EBITDA grew 81YoY to INR1.01bn. During FY19 Tasty
Treat and Karmiq recorded revenue of INR1.9bn (68% YoY growth) and
INR1.6bn (2.2x growth). Care mate grew by 41% YoY during FY19. We believe
FCL should be able to sustain double digit growth in revenue led by new
Market data product launches and increase in distribution. Further we expect profitability
Sensex : 39,110 to improve led by larger scale of operations and superior mix. We believe
Sector : Retail
that better performance of Future Retail's small format stores and FCL's
Market Cap (USDbn) : 1.157 growing presence in this format will aid its revenue growth. We maintain
O/S Shares (m) : 1,920.5 our BUY recommendation on the stock at the current levels with a target price
52-wk HI/LO (INR) : 59/35 of INR69 at EV/sales of 2xFY21e.
Avg Daily Vol ('000) : 805
Bloomberg : FCON IN Revenue, better than expected
Source: Bloomberg During 4QFY19, FCL's net sales grew 28% YoY to INR10.4bn, led by strong growth in Centre
Valuation of Plate (COP) (51% revenue share), Home and Personal Care (HPC; 7% revenue share),
FY19 FY20e FY21e and Fresh Business (23% revenue share). FY19 revenue grew 29% YoY to INR38.8bn. During
EPS (INR) (0.0) 0.1 0.4
FY19, COP grew 22 YoY led by 23% growth in Golden Harvest (65% of COP) and 127% YoY
P/E(x) (1013.2) 333.0 98.5
P/BV(x) 8.2 7.9 7.4 growth in value added brands (13% of COP) like Golden Harvest premium, Karmiq, Sangi's
EV/EBITDA(x) 76.3 40.9 25.0 kitchen and Ekta. Processed foods grew 14% YoY during FY19 led by 68% YoY growth in
Dividend Yield (%) - - - Tasty Treat (35% of processed foods). Home and personal care (HPC) grew 37% YoY during
Source: Company, Antique the year led by 26% YoY growth in Clean Mate (32% of HPC), 41% YoY growth in Care mate
Returns (%) (23% of HPC) , 52%YoY growth in TS (13%of HPC) and 53% YoY growth in Pratha (10% of
1m 3m 6m 12m HPC).
Absolute (2) (9) (15) (25)
Relative (3) (16) (24) (34) Brands across categories gaining scale
Source: Bloomberg
During FY19, Karmiq and Tasty Treat have crossed INR1bn revenue while Care mate and
Shareholding pattern Clean mate are in line to achieve INRbn revenue. Golden Harvest has revenue of more than
Promoters : 46% INR10bn while Nilgiris and Fresh & Pure have revenue over INR 2bn.
Public : 54%
Control on other expenses aid profitability
Others : 0%
In 4QFY19 gross margin contracted 82bp YoY to 12.7%. However, EBITDA margin expanded
Source: Bloomberg
52bp YoY to 2.8% due to lower employee cost and other expenditure. Employee cost declined
by 6% YoY. Other expenditure grew at a lower rate over sales growth leading to 34bps YoY
120
drop, to 7.1% of sales. During FY19 gross margin dropped by 56bp to 13.2% while EBITDA
100
margin improved 75bps to 2.6%.
80
60 Valuation and outlook
We maintain our BUY recommendation on the stock at the current levels with a target price of
Future Consumer NIFTY
INR69 at EV/ sales of 2x FY21e. Currently the stock is trading at 1.1X FY21e EV/Sales.
Quarterly financials
Y/E March (INRm) 4QFY19 4QFY18 YoY (%) FY19 FY18 YoY (%)
Net Sales 10,374 8,112 27.9 38,806 30,080 29.0
COGS 9,056 7,014 29.1 33,697 25,952 29.8
Gross Profit 1,318 1,097 20.1 5,109 4,128 23.8
Gross Margin(%) 12.7 13.5 -82bp 13.2 13.7 -56bp
Employee Expenses 293 310 (5.7) 1,310 1,259 4.0
% of net sales 2.8 3.8 -100bp 3.4 4.2 -81bp
Other expenses 739 605 22.1 2,785 2,309 20.6
% of net sales 7.1 7.5 -34bp 7.2 7.7 -50bp
EBITDA 287 182 58 1,014 560 81.1
EBITDA Margin(%) 2.8 2.2 52bp 2.6 1.9 75bp
Depreciation (net) 143 146 (2.2) 532 455 16.9
EBIT 144 36 298.1 483 105 358.2
EBIT Margin(%) 1.4 0.4 94bp 1.2 0.4 89bp
Other income 72 39 84.1 307 196 56.8
Interest costs 209 105 98.7 734 490 49.7
PBT 7.6 -30 (125.5) 55 -189 (129.1)
Tax -181 -25 -166 -25
Tax Rate(%) 84.0 (300.2) 13.2
Recurring PAT 188.3 -5 - 221 -164 (234.3)
Minority interest/associates -111 -106 -287 -170
Recurring PAT post Mi/associates 78 -111 -66 -334
Non-recurring items 0 0 2 74
Reported PAT 78 -111 (170.1) -64 -260 (75.4)
NPM(%) 0.7 (1.4) 211bp (0.2) (0.9) 70bp
Financials
Net Revenue 21,158 30,038 38,806 56,195 71,514 PBT (427) (150) 55 682 1,498
Op. Expenses (21,062) (29,498) (37,792) (54,240) (68,305) Depreciation & amortisation 326 417 532 744 1,042
EBITDA 96 540 1,014 1,955 3,209 Interest expense 448 526 734 881 1,057
Depreciation (326) (417) (532) (744) (1,042) (Inc)/Dec in working capital (1,968) (2,356) (987) (2,849) (1,845)
EBIT (230) 123 483 1,210 2,167 Tax paid (2) (3) (21) (136) (374)
Other income 250 253 307 353 388 Less: Interest/Dividend Income Recd. (250) (253) (307) (353) (388)
Interest Exp. (448) (526) (734) (881) (1,057) CF from operating activities (1,874) (1,820) 5 (1,030) 990
Extra Ordinary Items -gain/(loss) - 35 2 - - Capital expenditure (1,329) (910) (717) (700) (150)
Reported PBT (427) (115) 57 682 1,498 Inc/(Dec) in investments 626 (35) (384) (37) (40)
Tax 9 (25) (166) 136 374 Add: Interest/Dividend Income Recd. 250 253 307 353 388
Reported PAT (436) (90) 223 546 1,123 CF from investing activities (452) (692) (794) (384) 198
Minority Int./Profit (loss) From Asso. (174) (170) (287) (287) (287) Inc/(Dec) in share capital 3,340 1,068 (50) 272 813
Net Profit (610) (260) (64) 259 837 Inc/(Dec) in debt (677) 1,919 1,856 2,200 500
Adjusted PAT (610) (295) (66) 259 837 Others (32) (502) (781) (1,434) (2,181)
Adjusted EPS (INR) (0.4) (0.1) (0.0) 0.1 0.4 CF from financing activities 2,631 2,484 1,025 1,037 (868)
Net cash flow 305 (28) 236 (377) 319
Balance sheet (INRm) Opening balance 170.0 475.4 447.5 683.6 306.5
Year ended 31 Mar 2017 2018 2019 2020e 2021e Closing balance 475.4 447.5 683.6 306.5 625.8
Share Capital 9,884 11,413 11,443 11,480 11,480
Reserves & Surplus (999) (1,460) (1,541) (1,306) (493) Growth indicators (%)
Networth 8,885 9,953 9,902 10,174 10,987 Year ended 31 Mar 2017 2018 2019 2020e 2021e
Debt 4,714 6,633 8,490 10,690 11,190 Revenue(%) 24.3 42.0 29.2 44.8 27.3
Minority Interest 78 42 (24) (32) (32) EBITDA(%) (158.8) 459.4 87.9 92.7 64.2
Net deferred Tax liabilities 440 413 413 413 413 Adj PAT(%) (43.5) (51.7) (77.6) (491.2) 223.4
Capital Employed 14,117 17,041 18,781 21,245 22,558 Adj EPS(%) (38.9) (68.0) (69.3) (404.2) 238.1
Accumulated Depreciation (889) (1,305) (1,837) (2,581) (3,623) Valuation (x)
Capital work in progress 895 695 306 306 306 Year ended 31 Mar 2017 2018 2019 2020e 2021e
Net Fixed Assets 7,660 8,151 8,524 8,480 7,588 P/E (99.6) (311.1) (1,013.2) 333.0 98.5
Goodwill 1,677 1,639 1,423 1,423 1,423 P/BV 7.8 8.1 8.2 7.9 7.4
Investments 404 430 729 729 729 EV/EBITDA 765.2 140.2 76.3 40.9 25.0
Non Current Investments 404 341 728 728 728 EV/Sales 3.5 2.5 2.0 1.4 1.1
Current Investments 0 89.57 0 0 0 Dividend Yield (%) - - - - -
Current Assets, Loans & Adv. 7,178 10,004 12,016 15,877 19,274
Inventory 1,757 2,242 2,468 3,569 4,537
Financial ratios
Debtors 3,242 4,929 6,747 9,770 11,756
Year ended 31 Mar 2017 2018 2019 2020e 2021e
RoE (%) (8.5) (3.1) (0.7) 2.6 7.9
Cash & Bank balance 475 448 684 306 626
RoCE (%) 0.2 2.4 4.4 7.8 11.7
Asset/T.O (x) 2.0 2.2 2.5 3.1 3.6
Net Debt/Equity (x) 0.5 0.6 0.8 1.0 1.0
Liabilities 2,647 2,985 3,710 5,049 6,226
EBIT/Interest (x) (0.0) (0.7) (1.1) (1.8) (2.4)
Provisions 154 198 202 215 230
Net Current Assets 4,377 6,821 8,105 10,613 12,818 Margins (%)
Application of Funds 14,117 17,041 18,781 21,245 22,558 Year ended 31 Mar 2017 2018 2019 2020e 2021e
Per share data EBITDA Margin(%) 0.5 1.8 2.6 3.5 4.5
EBIT Margin(%) (1.1) 0.4 1.2 2.2 3.0
Year ended 31 Mar 2017 2018 2019 2020e 2021e
PAT Margin(%) (2.8) (1.0) (0.2) 0.5 1.2
No. of shares (m) 1647.3 1913.3 1913.3 1913.3 1913.3
Diluted no. of shares (m) 1647.3 1913.3 1913.3 1913.3 1913.3 Source: Company Antique
BVPS (INR) 5.4 5.2 5.2 5.3 5.7

CEPS (INR) (0.5) (0.3) (0.2) (0.1) 0.0
DPS (INR) 0.0 0.0 0.0 0.0 0.0

Previous Reco
CMP
: BUY
: INR551
Bajaj Electricals
Target Price : INR639 Consumer segment shines, EPC business weak
Potential Return : 16% Bajaj Electricals (BJE) reported below expectation performance in 4QFY19
with EPC segment driving down the overall profitability while the consumer
business continues to show an impressive growth trajectory driven by its
fans and appliances segment. The company attributed margin pressure in
Dhirendra Tiwari EPC business to the enhanced execution (INR 15bn for FY19) of the low margin
+91 22 4031 3436
dhirendra.tiwari@antiquelimited.com Uttar Pradesh order. The consumer business margin (at 6.6%) has seen
170bps increase in FY19 after three years of sub 5%. This, the management
Abhijeet Singh attributes to the Range and Reach Expansion Program which is further
+91 22 4031 3414 expected to drive margin expansion going forward. The management has
abhijeet.singh@antiquelimited.com
guided for 1% increase in the Consumer business margin for FY20 and even
going ahead. We have significantly reduced our revenue estimates as the
management highlighted a reduced focus on the EPC business which could
translate into a revenue decline for the same. The bright prospects for the
Market data high margin, low working capital Consumer Products augurs well for the
Sensex : 39,110
overall margin profile as well as balance sheet strength and hence is also
Sector : Industrials
expected to bring down debt going forward. A reduction in revenue owing
to the EPC business and factoring in margin improvement in the high margin
Consumer business implies a 6% cut in our FY21 EPS estimates. Ergo, we
52-wk HI/LO (INR) : 659/379 maintain BUY with a revised target price of INR 639 (INR 675 eariler) based
Avg Daily Vol ('000) : 131 on 25x its FY21E earnings (implied EV/EBIT of 18x for Consumer business
Bloomberg : BJE IN and 8x for EPC business).
Source: Bloomberg
Key highlights from result:
Valuation
Bajaj Electrical reported in line revenue which came in at INR 17.7bn (+10% YoY) during
FY19 FY20e FY21e
the quarter as the EPC business grew 7% while the Consumer Products business saw
EPS (INR) 16.3 19.7 25.6
15% growth during the quarter. For FY19, revenue stood at INR 66.7bn growing 42%
P/E 33.9 27.9 21.6
P/BV 5.3 4.7 4.1
YoY.
EV/EBITDA 20.7 18.0 15.6 EBITDA margin at 3.9% dropped 550bps during the quarter as the EPC business saw
Dividend Yield (%) 0.9 1.1 1.4 700bps margin compression while the Consumer Products business saw 40bps expansion
Source: Bloomberg in margin. Thus, for FY19, EBITDA margin stood at 5.2% (down 100bps YoY).
Returns (%)
PAT at INR 285mn declined 71% and was further exacerbated by an increase in interest
1m 3m 6m 12m
expense (2.7x YoY) on account of an increased working capital. For FY19, PAT stood at
Absolute (2) 20 18 (9)
INR 1.7bn recording 14% growth.
Relative (4) 10 5 (19)
Source: Bloomberg The current order book stands at INR 48.4bn, comprising of INR 7bn for Transmission
Shareholding pattern Line Towers, INR 40.3bn for Power Distribution and INR 1.1bn for Illumination Projects.
Promoters : 63%
Key highlights from concall:
Public : 37% Bajaj Electricals intends to reduce short term debt and has passed an enabling resolution
Others : 0% to raise INR 6bn of equity pertaining to the same.
Source: Bloomberg No major price increase taken during the quarter as there was no major input price
Price performance vs Nifty increase during the quarter.
120 Total gross debt stands at INR 15.8bn and the company expects a lower number for
100 FY20 as it expects accelerated payments to come in from the UP order.
80 Nirlep Acquisition - The Company is in the process of expanding the brand across the
60 distribution network in a phased manner. Till now, the primary sales are driving the sales
May-18 Sep-18 Jan-19 May-19 and the company expects to push it appropriately by the festive season.
Bajaj Electricals NIFTY
Out of the total receivables, INR 12bn pertains to UP order at the gross level and INR
7.4bn at the net level.
EPC
Margin was impacted by higher fixed cost during the quarter as the execution slowed.
Also, earlier Bihar order was a relatively higher margin order than the current UP order
that is being executed.
UP project revenue - INR 16bn for FY19.
The company doesn't expect the Working capital to inch up anymore.
The company is particular in terms of margin when booking EPC orders going forward
and expects to maintain the EPC margin in the range of 5-6%.
Consumer Products
The company improved market share across product categories - Appliances, Fans and
Lighting.
The company expects to grow 10% more than the market growth.
The company's focus lies on Brand Enhancement and New Product Introduction
Growth guidance for FY20: (1) Appliances: 20-25%, (2)Fans: 20-25% and (3) Lighting:10-
15%
Margin guidance: 7.5-8%
Appliances
Growth: 4QFY19 - 22%, FY19 - 30%
Revenue for FY19 - INR 14.3bn
Fans
Growth: 4QFY19 - 19%, FY19 - 25.5%
Revenue for FY19 - INR 7bn
Lighting
Growth: 4QFY19 - 6%, FY19 - 10.4%
Revenue for FY19 - INR 4.1bn
LED contribution to lighting revenue stands at 70% for 4QFY19
Morphy Richards
Growth: 4QFY19: 20% decline, FY19 - 1%
Revenue for FY19 - INR 2bn
Quarterly performance
Particulars (INR mn) Q1FY18 Q2FY18 Q3FY18 Q4FY18 Q1FY19 Q2FY19 Q3FY19 Q4FY19 YoY (%) QoQ (%) FY19 FY18 growth (%)
Revenues 10,205 9,356 11,451 16,063 11,399 15,984 21,618 17,729 10.4 (18.0) 66,731 47,075 41.8
Raw material 7,595 6,587 8,304 11,664 8,234 12,353 17,051 13,829 18.6 (18.9) 51,576 34,149 51.0
% of Sales 74.4 70.4 72.5 72.6 72.2 77.3 78.9 78.0 77.3 72.5 6.5
Staff costs 764 848 827 740 849 987 916 815 10.1 (11.0) 3,567 3,179 12.2
% of Sales 7.5 9.1 7.2 4.6 7.4 6.2 4.2 4.6 5.3 6.8 (20.9)
Others 1,394 1,492 1,618 2,309 1,518 1,845 2,273 2,391 3.6 5.2 8,105 6,812 19.0
% of Sales 13.7 16.0 14.1 14.4 13.3 11.5 10.5 13.5 12.1 14.5 (16.1)
Total expenditure 9,752 8,926 10,748 14,713 10,601 15,185 20,240 17,036 15.8 (15.8) 63,248 44,140 43.3
EBITDA 452 429 703 1,350 798 799 1,378 694 (48.6) (49.6) 3,484 2,934 18.7
EBITDA Margin (%) 4.4 4.6 6.1 8.4 7.0 5.0 6.4 3.9 5.2 6.2 (16.3)
Depreciation 80 88 83 89 92 94 100 99 11.7 (0.9) 385 339 13.3
EBIT 372 342 620 1,261 706 705 1,278 595 (52.8) (53.5) 3,099 2,595 19.4
Interest 150 141 144 155 177 230 333 419 171.1 25.8 1,159 589 96.9
Other income 105 106 96 226 93 58 55 263 16.5 375.9 654 532 23.0
Exceptional items - - - (894) - - - - - (894)
PBT 327 307 572 438 623 533 1,000 439 0.0 (56.1) 2,594 1,645 57.7
Tax 123 117 204 365 218 192 361 153 (58.1) (57.6) 924 809 14.2
Tax rate (%) 37.4 38.1 35.6 83.3 34.9 36.0 36.1 34.9 35.6 49.2 NM
Reported net profit 205 190 368 73 405 341 639 285 290.4 (55.4) 1,671 836 99.8
Adjusted net profit 205 190 368 967 405 341 639 285 (70.5) (55.4) 1,671 1,445 15.6
Adjusted Diluted EPS 2.0 1.8 3.6 9.4 3.9 3.3 6.2 2.8 (70.5) (55.4) 16.2 14.0 15.6
Segmental performance
Particulars (INR mn) Q1FY18 Q2FY18 Q3FY18 Q4FY18 Q1FY19 Q2FY19 Q3FY19 Q4FY19 YoY (%) QoQ (%) FY19 FY18 growth (%)
Revenue
Consumer Products 4,695 5,141 6,002 6,446 5,969 6,423 7,606 7,410 15.0 (2.6) 27,408 22,285 23.0
EPC 5,598 4,213 5,449 9,615 5,430 9,559 14,012 10,318 7.3 (26.4) 39,319 24,876 58.1
Others 1 1 0 2 1 3 1 1 (53.3) 0.0 5 4 35.1
EBIT
Consumer Products 33 287 391 376 420 369 552 460 22.1 (16.7) 1,801 1,087 65.7
EPC 398 146 321 1,082 333 397 790 434 (59.9) (45.1) 1,953 1,946 0.4
Others (2) (1) (2) 0 (1) 1 (2) (2) NM 0.0 (3) (5) NM
EBIT Margin (%)
Consumer Products 0.7 5.6 6.5 5.8 7.0 5.7 7.3 6.2 6.6 4.9
EPC 7.1 3.5 5.9 11.2 6.1 4.1 5.6 4.2 5.0 7.8
Others NM NM NM NM NM NM NM NM NM NM
Consumer Durables - Revenue and growth trends Consumer Durables - EBIT and margin trends
8 30 600 8
6 15 450 6
4 0 300 4
2 -15 150 2
- -30 - 0
Q1FY17
Q2FY17
Q3FY17
Q4FY17
Q1FY18
Q2FY18
Q3FY18
Q4FY18
Q1FY19
Q2FY19
Q3FY19
Q4FY19
Q1FY17
Q2FY17
Q3FY17
Q4FY17
Q1FY18
Q2FY18
Q3FY18
Q4FY18
Q1FY19
Q2FY19
Q3FY19
Q4FY19
Revenue (INR bn) Grow th (%, RHS) EBIT (INR mn) EBIT Margin (%, RHS)
EPC - Revenue and growth trends EPC - EBIT and margin trends
15 180 1,250 13
160
12 140 1,000 10
120
9 100 750 8
80
6 60 500 5
40
3 20 250 3
0
- -20 - 0
Q1FY17
Q2FY17
Q3FY17
Q4FY17
Q1FY18
Q2FY18
Q3FY18
Q4FY18
Q1FY19
Q2FY19
Q3FY19
Q4FY19
Q1FY17
Q2FY17
Q3FY17
Q4FY17
Q1FY18
Q2FY18
Q3FY18
Q4FY18
Q1FY19
Q2FY19
Q3FY19
Q4FY19
Revenue (INR bn) Grow th (%, RHS) EBIT (INR mn) EBIT Margin (%, RHS)
Revenue mix EBIT mix

100% 100%
80% 80%
60% 60%
40% 40%
20% 20%
0% 0%
Q1FY17
Q2FY17
Q3FY17
Q4FY17
Q1FY18
Q2FY18
Q3FY18
Q4FY18
Q1FY19
Q2FY19
Q3FY19
Q4FY19
Q1FY17
Q2FY17
Q3FY17
Q4FY17
Q1FY18
Q2FY18
Q3FY18
Q4FY18
Q1FY19
Q2FY19
Q3FY19
Q4FY19
Consumer Business EPC Consumer Business EPC

Financials
Net Revenue 42,617 47,075 66,731 64,344 64,631 PBT 1,680 2,538 2,594 3,122 4,044
EBITDA 2,428 2,934 3,483 3,927 4,384 Interest expense 804 589 1,159 1,178 884
Depreciation 299 339 385 398 414 (Inc)/Dec in working capital (4,436) (3,193) (9,667) 332 1,317
EBIT 2,129 2,595 3,099 3,529 3,971 Tax paid (604) (809) (924) (1,093) (1,415)
Other income 356 532 654 771 957 CF from operating activities (2,256) (536) (6,453) 3,937 5,242
Interest Exp. 804 589 1,159 1,178 884 Capital expenditure (482) (382) (534) (431) (500)
Extra Ordinary Items -gain/(loss) - (894) - - - Inc/(Dec) in investments (209) 658 (362) (51) (442)
Reported PBT 1,680 2,538 2,594 3,122 4,044 CF from investing activities (691) 276 (897) (481) (942)
Tax 604 809 924 1,093 1,415 Inc/(Dec) in share capital 1 4 (1) - -
Reported PAT 1,077 836 1,671 2,029 2,628 Inc/(Dec) in debt 3,486 1,721 8,599 (1,050) (2,100)
Net Profit 1,077 836 1,671 2,029 2,628 Dividend Paid (388) (301) (601) (730) (946)
Adjusted PAT 1,077 1,445 1,671 2,029 2,628 Others (104) (589) (659) (1,178) (884)
Adjusted EPS (INR) 10.6 14.0 16.3 19.7 25.6 CF from financing activities 2,995 835 7,338 (2,958) (3,930)
Net cash flow 48 576 (11) 497 371
Balance sheet (INRm) Opening balance 555 653 257 160 657
Year ended 31 Mar 2017 2018 2019 2020e 2021e Closing balance 603 1,228 246 657 1,028
Share Capital 203 206 206 206 206
Reserves & Surplus 8,512 9,241 10,572 11,871 13,553 Growth indicators (%)
Networth 8,715 9,448 10,778 12,076 13,758 Year ended 31 Mar 2017 2018 2019 2020e 2021e
Debt 5,455 7,176 15,775 14,725 12,625 Revenue(%) (7.2) 10.5 41.8 (3.6) 0.4
Net deferred Tax liabilities (560) (735) (638) (638) (638) EBITDA(%) (8.1) 20.9 18.7 12.7 11.7
Capital Employed 13,611 15,888 25,916 26,164 25,746 Adj PAT(%) (2.4) 34.2 15.6 21.4 29.5
Gross Fixed Assets 5,205 5,631 6,131 6,631 7,131 Adj EPS(%) (2.8) 31.9 15.9 21.4 29.5
Accumulated Depreciation 2,105 2,444 2,829 3,227 3,640
Capital work in progress 79 35 69 - - Valuation (x)
Net Fixed Assets 3,179 3,222 3,371 3,404 3,491 Year ended 31 Mar 2017 2018 2019 2020e 2021e
Investments 803 145 507 558 1,000 P/E 51.8 39.3 33.9 27.9 21.6
Non Current Investments 803 145 507 558 1,000 P/BV 6.4 6.0 5.3 4.7 4.1
Current Assets, Loans & Adv. 26,325 30,625 47,142 45,081 43,525 EV/EBITDA 25.3 21.7 20.7 18.0 15.6
Inventory 5,712 5,792 8,210 7,051 7,083 EV/Sales 1.4 1.4 1.1 1.1 1.1
Debtors 16,467 20,121 31,426 30,497 27,446 Dividend Yield (%) 0.6 0.4 0.9 1.1 1.4
Cash & Bank balance 653 257 160 657 1,028
Financial ratios
Year ended 31 Mar 2017 2018 2019 2020e 2021e
RoE (%) 13.3 15.9 16.5 17.8 20.3
Liabilities 6,357 8,544 14,814 10,577 9,739
RoCE (%) 22.0 21.2 18.0 16.5 19.0
Provisions 10,340 9,559 10,290 12,302 12,530
Asset/T.O (x) 4.0 3.3 3.2 2.5 2.6
Net Debt/Equity (x) 0.6 0.7 1.4 1.2 0.8
EBIT/Interest (x) 3.1 5.3 3.2 3.6 5.6
Per share data
Year ended 31 Mar 2017 2018 2019 2020e 2021e
Margins (%)
No. of shares (m) 101.3 103.1 102.8 102.8 102.8
Year ended 31 Mar 2017 2018 2019 2020e 2021e
EBITDA Margin(%) 5.7 6.2 5.2 6.1 6.8
Diluted no. of shares (m) 101.3 103.1 102.8 102.8 102.8
EBIT Margin(%) 5.0 5.5 4.6 5.5 6.1
BVPS (INR) 86.0 91.6 104.8 117.5 133.8
PAT Margin(%) 2.5 3.0 2.5 3.1 4.0
CEPS (INR) 13.6 11.4 20.0 23.6 29.6
DPS (INR) 3.2 2.4 4.9 5.9 7.7 Source: Company Antique


Previous Reco
CMP
: BUY
: INR380
Somany Ceramics
Target Price : INR570 EBITDA margin surprises, volumes to follow
Somany Ceramics (SOMC) reported 4QFY19 result with EBITDA margin well
above ours as well as consensus estimates. Its consolidated revenue declined
Manish Mahawar 4% YoY whereas EBITDA/PAT jumped 13%/32% YoY respectively. Key
+91 22 4031 3433 highlights are: (1) tiles volumes and realization declined 3% and 1% YoY
manish.mahawar@antiquelimited.com respectively; (2) higher outsourced volumes led to subdued gross margin
Prateek Jain (3) EBITDA margin jumped 220bps YoY to 13.6% mainly led by lower gas
+91 22 4031 3377 prices; (4) bathware segment revenue was up 10% YoY; (5) GVT plant in
prateek.jain@antiquelimited.com South India (3.5msm) started commercial production in March 2019 and (6)
Himanshu Binani reduced receivable days by 16 days in 4QFY19. Management expects to
+91 22 4031 3417 achieve double digit volume growth and higher EBITDA margin YoY in FY20E.
himanshu.binani@antiquelimited.com
We believe, with recent industry developments and the worst already behind,
SOMC will have a momentous delta created on account of 1) higher volume
growth 2) better realisation, 3) better product mix, 4) improved working
Market data
capital cycle, 5) declining gas prices and 6) low base. We have conservatively
Sensex : 39,110
assumed a 10% and 11% tile volume growth in FY20 and FY21, along with
Sector : Mid Cap
incremental realisation of 3% and 2% in FY20 and FY21. We expect the
company to report revenue/EBITDA/PAT CAGR of 13%/29%/44% respectively
over FY19-FY21E. Maintain BUY with a target price of INR570, based on
20xFY21E EPS.
52-wk HI/LO (INR) : 578/270
Avg Daily Vol ('000) : 17 Higher base results in muted volume growth
Bloomberg : SOMC IN SOMC reported consolidated revenue decline of 4% YoY to INR5.2bn (Antique estimate -
Source: Bloomberg
INR5.7bn), led by tile volume and realization decline of 3%/1% YoY respectively. Overall tile
Valuation revenue declined 4% YoY. Volume growth was subdued on account of a) higher base and b)
FY19 FY20e FY21e strict control over receivable days. Management guided for double digit volume growth in
EPS (INR) 10.9 18.8 28.5 FY20. Sanitaryware & bath fittings revenue grew 10% YoY. SOMC expects to achieve revenue
P/E(x) 34.8 20.2 13.3 of INR3.5-4bn over 3-4 years in sanitaryware.
P/BV(x) 2.6 2.4 2.1
Increase in gas prices YoY impacts EBITDA margin
EV/EBITDA(x) 12.3 9.4 7.0
Dividend Yield (%) 0.5 0.8 0.9 Consolidated EBITDA margin came in at 13.6%, up 220bps YoY. It was impacted by low
Source: Company, Antique power & fuel cost and other expenditure. EBITDA jumped 13% YoY to INR705mn (Antique
estimate - INR533mn). Average gas price was INR30.5/scm vs ~INR36/scm in 3QFY19.
Returns (%)
Current gas price for SOMC is at INR33/scm and expected to increase by INR2/scm June
1m 3m 6m 12m
2019 onwards. Management guided improvement in EBITDA margin YoY in FY20E.
Absolute (8) 19 35 (31)
Relative (9) 10 21 (38) Other highlights
Source: Bloomberg 1) SOMC's first plant in south India near Tiruchirapali (GVT Tiles with annual capacity of
Shareholding pattern 3.8msm) started commercial production in March 2019. SOMC expects to achieve 100%
capacity utlisation by 2QFY20.
Promoters : 52%
Public : 48% 2) Management has guided for capex of ~INR450mn and ~INR500mn in FY20E. SOMC
Others : 0% expects a greenfield expansion in tiles in FY21
Source: Bloomberg 3) Advertisement and brand expenditure is guided to be at 3-3.5% of sales in FY20.
Price performance vs Nifty 4) SOMC has divested its investment in Commander Vitrified Tiles Private Limited which
resulted in higher volumes from outsourced manufacturing.
120
Valuation and outlook
100
80
60
40 We estimate the company to clock revenue and PAT CAGRs of 13% and 44% respectively
May-18 Sep-18 Jan-19 May-19 over FY18-21E. We believe the stock will continue to trade at a discount to Kajaria, considering
its lower margin profile and return ratios. With the implementation of the E-way bill, we
Somany Ceramics NIFTY
expect the shift from unorganized to organized players to pick up. Maintain BUY.
Source: Bloomberg, INdexed to 100
Conference call highlights

Revenue: Tile volume appears to decline YoY on account of higher base led by excess
credit period and inventory dumping in the base quarter. Management expects double digit
tile volume growth in FY20. Sanitaryware and faucets are expected to grow at 25-
30% YoY in FY20.
Price hikes: SOMC has taken price hike in May in ceramic wall tiles (INR10-15 per box).
Also, there is a minimal price hike in bathware as well.
EBITDA: SOMC expects improvement in margins on the back of better product mix, lower
gas prices and price hikes. Management guided for gas price to increase by INR2/scm from
current prices of ~INR33/scm. SOMC guided for advertisement expenditure to be in range
of 3-3.5% in FY20.
JV: SOMC doesn't expect to enter into any new JV's in the near term. None of its JVs were
running on coal-based manufacturing. JV volumes are expected to rise in FY20, while
outsourced volumes will be lower.
Retail Focus: SOMC currently has 330 exclusive franchises which are guided to increase to
370 in FY20. It has 1,800 active dealers and 9,000 touch points at present.
Capex: Management has guided for capex of ~INR450mn and ~INR500mn in FY20E.
SOMC expects a greenfield expansion in tiles in FY21
Plants: SOMC's first plant in south India near Tiruchirapali (GVT Tiles with annual capacity
of 3.5msm) started commercial production in March 2019. SOMC expects to achieve 100%
capacity utlisation by 2QFY20. Sanitaryware and faucets capacity utilization was at 61%
and 82% respectively in FY19. SOMC expects to achieve 100% capacity utilization in
sanitaryware by 2QFY20.
Quarterly Financials:
3QFY19 Result Snapshot (Consolidated) INRmn
Particulars Q4FY19 Q4FY18 % change Q3FY19 % change FY18 FY19 FY20E FY21E
Revenues 5,188 5,409 (4.1) 4,254 22.0 17,127 17,151 19,305 22,034
Raw material 2,456 2,545 (3.5) 1,793 37.0 7,054 7,218 8,045 9,030
Staff costs 543 529 2.7 560 (3.0) 2,189 2,262 2,533 2,761
Others 1,485 1,713 (13.3) 1,551 (4.3) 6,026 6,037 6,638 7,508
Total expenditure 4,484 4,787 (6.3) 3,904 14.8 15,269 15,517 17,216 19,299
EBITDA 705 621 13.4 350 101.1 1,859 1,634 2,089 2,735
Depreciation 115 116 (1.6) 110 3.9 413 443 485 523
EBIT 590 505 16.9 240 145.8 1,446 1,191 1,604 2,212
Less: Interest Expense 117 100 16.8 115 1.4 399 459 415 370
Add: Other income 56 49 NA 45 NA 181 192 201 262
Profit Before Tax 530 454 16.6 170 212.1 1,228 924 1,391 2,104
Less: Provision for Tax 113 145 (21.7) 73 54.9 393 268 473 715
Less: Minority Interest 48 31 10 87 69 121 182
Adjusted Profit 368 279 32 87 324.8 748 586 797 1,206
Add: Exceptional items (127) (19) 5 (44) (122) 0 0
Reported Profit 241 259 (7.0) 92 163.1 704 463 797 1,206
No. of Diluted shares outstanding (mn) 42 42 42 42 42 42 42
Adjusted Diluted EPS 8.7 6.6 32.2 2.0 324.8 17.7 13.8 18.8 28.5
Key parameters
Sales Vol (MSM) 15.4 15.9 -3.3% 12.8 20.6%
Realisation / SM (INR) 290 292 -0.6% 294 -1.4%
EBIDTA / SM (INR) 46 39 17.3% 27 66.8%
Tiles Volume Distribution

(mn. sq. meters) Q4FY19 Q4FY18 YoY (%) Q3FY19 QoQ (%)
Own Manufacturing 6.1 6.5 -6.5% 5.2 17.6%
Joint Ventures 5.5 6.0 -8.8% 4.6 19.4%
Third-Party Outsourcing 3.8 3.4 12.6% 3.0 27.6%
Total 15.4 15.9 -3.3% 12.8 20.6%
Tiles Revenue Distribution

(%) Q4FY19 Q4FY18 YoY (%) Q3FY19 QoQ (%)
Own Manufacturing 41.1 42.3 (113) 42.2 (107)
Joint Ventures 35.6 40.2 (460) 35.8 (20)
Third-Party Outsourcing 23.3 17.6 573 22.1 127
Total 100.0 100.0 100.0
Financials
Net Revenue 17,309 17,127 17,151 19,305 22,034 PBT 1,765 1,184 540 1,068 1,660
Depreciation 313 413 443 485 523 (Inc)/Dec in working capital (730) (482) 384 (33) (516)
EBIT 2,024 1,446 1,191 1,604 2,212 Tax paid (495) (327) (268) (473) (715)
Other income 172 181 192 201 262 Less: Interest/Dividend Income Recd. (98) (128) - - -
Interest Exp. 390 399 459 415 370 Other operating Cash Flow (10) 50 192 201 262
Extra Ordinary Items -gain/(loss) (41) (44) (122) - - CF from operating activities 1,172 1,109 1,749 1,663 1,583
Reported PBT 1,765 1,184 801 1,391 2,104 Capital expenditure (1,045) (1,299) (1,028) (700) (700)
Tax 615 393 268 473 715 Inc/(Dec) in investments (268) 195 459 - -
Reported PAT 1,150 791 533 918 1,389 CF from investing activities (1,313) (1,104) (569) (700) (700)
Minority Int./Profit (loss) From Asso. 169 87 69 121 182 Inc/(Dec) in share capital 60 38 (38) (0) 0
Net Profit 982 704 463 797 1,206 Inc/(Dec) in debt 557 422 (290) (500) (500)
Adjusted PAT 941 748 341 797 1,206 Dividend Paid (117) (137) (102) (153) (179)
Adjusted EPS (INR) 23.2 17.7 10.9 18.8 28.5 Others (396) (419) (608) (293) (187)
CF from financing activities 104 (96) (1,038) (946) (866)
Balance sheet (INRm) Net cash flow (37) (91) 142 16 17
Year-ended March 31 FY17 FY18 FY19 FY20e FY21e Opening balance 186 149 136 400 417
Share Capital 85 85 85 85 85 Closing balance 149 58 400 417 434
Reserves & Surplus 5,157 5,722 6,045 6,689 7,717
Networth 5,242 5,807 6,130 6,774 7,802 Growth indicators (%)
Debt 4,970 5,396 5,106 4,606 4,106 Year-ended March 31 FY17 FY18 FY19 FY20e FY21e
Minority Interest 834 959 867 989 1,171 Revenue(%) 1.2 (1.0) 0.1 12.6 14.1
Net deferred Tax liabilities 474 524 532 532 532 EBITDA(%) 72.7 (20.5) (12.1) 27.9 30.9
Capital Employed 11,520 12,686 12,635 12,900 13,610 Adj PAT(%) 62.0 (20.5) (54.4) 133.6 51.5
Gross Fixed Assets 5,597 7,097 8,158 8,858 9,558 Adj EPS(%) 51.7 (23.7) (38.1) 71.9 51.5
Accumulated Depreciation 323 615 1,058 1,543 2,066
Capital work in progress 563 279 247 247 247 Valuation (x)
Net Fixed Assets 5,837 6,761 7,347 7,562 7,739 Year-ended March 31 FY17 FY18 FY19 FY20e FY21e
Current Assets, Loans & Adv. 8,596 9,630 9,233 9,618 10,644 P/E 16.4 21.5 34.8 20.2 13.3
Inventory 2,208 2,597 2,545 2,269 2,535 P/BV 3.1 2.8 2.6 2.4 2.1
Debtors 4,268 5,037 4,179 4,760 5,433 EV/EBITDA 8.4 10.9 12.3 9.4 7.0
Cash & Bank balance 1,426 1,278 1,083 1,099 1,117 EV/Sales 1.1 1.2 1.2 1.0 0.9
Loans & advances and others 695 718 1,426 1,489 1,559 Dividend Yield (%) 0.6 0.6 0.5 0.8 0.9
Liabilities 1,636 2,332 1,986 2,172 2,433
Financial ratios
Provisions 1,277 1,373 1,959 2,109 2,339
RoE (%) 19.8 13.5 5.7 12.3 16.6
RoCE (%) 23.4 13.4 10.9 14.1 18.7
Asset/T.O (x) 1.9 1.4 1.4 1.5 1.7
Per share data Net Debt/Equity (x) 0.7 0.7 0.7 0.5 0.4
Year-ended March 31 FY17 FY18 FY19 FY20e FY21e EBIT/Interest (x) 5.6 4.1 3.0 4.4 6.7
No. of shares (m) 42 42 42 42 42
Margins (%)
BVPS (INR) 123.7 137.0 144.6 159.8 184.1
EBITDA Margin(%) 13.5 10.9 9.5 10.8 12.4
CEPS (INR) 34.5 28.4 23.0 33.1 45.1
EBIT Margin(%) 11.7 8.4 6.9 8.3 10.0
DPS (INR) 2.3 2.3 2.0 3.0 3.5
PAT Margin(%) 5.4 4.3 2.0 4.1 5.4
Valuation Guide
Company Reco CMP TP Return M.Cap M.Cap Net profit (INRbn) EPS (INR) P/E (x) EV/EBITDA (x) P/BV (x) RoE (%) RoCE (%) Absolute (%)
(INR) (INR) (%) (INRbn) ( U S D b n ) FY19 FY20 FY21 FY19 FY20 FY21 FY19 FY20 FY21 FY19 FY20 FY21 FY20 FY20 FY20 1m 12m
AGROCHEM
Bayer Cropscience Buy 4,077 4,740 16 140.0 2.0 2.9 5.3 7.1 83.2 117.8 158.2 49.0 34.6 25.8 30.5 17.6 13.5 2.9 12.6 17.7 -2 -10
Dhanuka Agri Buy 359 510 42 17.1 0.2 1.1 1.3 1.5 23.7 26.6 31.7 15.2 13.5 11.3 11.6 9.1 7.3 2.3 18.4 26.7 -6 -39
PI Industries Hold 1,127 1,170 4 155.6 2.2 4.1 5.2 6.5 29.7 37.9 47.0 37.9 29.7 24.0 26.9 20.7 16.2 5.7 20.8 27.4 12 32
Rallis India Buy 149 200 35 28.9 0.4 1.6 1.8 2.2 8.0 9.5 11.1 18.6 15.7 13.4 11.6 9.7 8.2 2.1 13.7 18.8 -6 -27
Sharda Cropchem Buy 353 460 30 31.9 0.5 2.0 2.4 3.0 22.6 26.7 32.9 15.6 13.2 10.7 8.2 6.1 4.7 2.1 17.4 23.8 -8 -14
UPL Buy 1,015 1,150 13 516.7 7.4 22.8 31.8 42.0 44.7 62.5 82.5 22.7 16.2 12.3 17.1 9.3 7.5 3.0 20.0 12.4 8 48
AUTOMOBILES
Apollo Tyres Buy 183 247 35 104.8 1.5 9.0 10.0 12.8 15.4 17.5 22.5 11.9 10.4 8.2 7.4 6.7 5.6 1.0 9.6 9.7 -14 -33
Ashok Leyland Buy 88 100 14 257.9 3.7 18.6 20.4 13.6 6.3 7.0 4.6 13.8 12.6 18.9 7.7 6.0 8.2 2.7 21.8 19.8 -4 -40
Atul Auto Buy 308 422 37 6.8 0.1 0.5 0.6 0.6 23.0 27.6 28.1 13.4 11.1 11.0 8.6 7.2 6.8 2.3 22.2 33.0 -8 -27
Bajaj Auto Buy 3,047 3,664 20 881.8 12.6 43.3 47.6 53.0 149.7 164.6 183.2 20.3 18.5 16.6 17.5 15.8 14.1 3.6 19.7 28.3 0 10
Bharat Forge Hold 465 491 6 216.7 3.1 10.3 11.2 11.9 22.2 24.0 25.6 21.0 19.4 18.2 11.6 10.9 10.3 3.9 20.1 22.1 -4 -32
Ceat Hold 994 1,081 9 40.2 0.6 2.8 3.2 3.6 68.1 80.1 90.1 14.6 12.4 11.0 9.0 7.6 6.3 1.3 10.9 12.7 -9 -24
Eicher Motors Buy 21,225 25,059 18 579.1 8.3 22.2 25.9 29.3 817.5 953.1 1,079.7 26.0 22.3 19.7 17.2 14.5 11.4 5.3 26.1 34.6 4 -28
Endurance Tech Sell 1,151 900 (22) 161.8 2.3 5.2 5.6 6.3 36.7 39.7 45.0 31.4 29.0 25.6 14.5 12.9 11.0 5.2 17.9 23.3 -2 -9
Escorts Buy 594 976 64 72.9 1.0 4.7 5.2 5.9 55.4 61.1 69.7 10.7 9.7 8.5 9.5 7.9 6.8 1.5 15.0 20.5 -20 -32
Hero MotoCorp Sell 2,700 2,251 (17) 539.2 7.7 33.8 34.1 30.0 169.5 170.8 150.1 15.9 15.8 18.0 10.8 10.6 11.8 3.8 23.8 34.2 2 -22
Mahindra & Mahindra Buy 641 961 50 796.3 11.4 45.6 55.3 55.5 36.7 44.5 44.6 17.4 14.4 14.4 11.8 9.8 9.6 2.1 14.8 13.7 -4 -23
Mahindra CIE Buy 227 345 52 86.1 1.2 5.5 6.1 6.9 14.5 16.2 18.4 15.7 14.0 12.4 9.0 7.9 6.7 1.8 13.3 15.4 1 -4
Maruti Suzuki Sell 6,900 5,201 (25) 2,084.3 29.9 75.0 76.9 87.3 248.4 254.7 288.9 27.8 27.1 23.9 18.5 17.3 15.1 4.2 16.2 23.0 -2 -19
Minda Corp Buy 120 174 46 27.2 0.4 1.7 2.2 2.5 7.4 9.8 10.9 16.1 12.2 11.0 10.6 8.2 7.4 1.8 17.1 16.6 -12 -32
Minda Industries Hold 351 321 (9) 92.1 1.3 3.8 4.5 5.2 14.5 17.1 20.1 24.3 20.5 17.5 13.4 11.3 9.7 4.3 22.9 21.0 -8 -18
Motherson Sumi Hold 119 168 41 375.0 5.4 19.2 25.7 29.5 6.1 8.1 9.3 19.5 14.6 12.7 7.7 5.8 4.8 2.8 20.8 22.1 -21 -44
Schaeffler India Ltd Hold 4,872 5,562 14 152.3 2.2 4.6 5.4 5.8 148.1 171.8 185.4 32.9 28.4 26.3 19.5 16.2 14.4 4.8 18.2 24.9 -13 -8
SKF India Buy 1,839 2,174 18 94.4 1.4 3.4 3.8 4.3 67.9 77.8 86.9 27.1 23.6 21.1 17.7 15.3 13.2 3.8 17.1 25.4 -8 3
Tata Motors Buy 179 246 38 560.6 8.0 17.3 45.7 57.7 5.1 13.5 17.0 35.1 13.3 10.5 4.7 3.3 3.0 0.6 4.5 3.6 -23 -42
Timken India Buy 672 738 10 50.5 0.7 1.5 1.8 2.1 19.8 23.3 28.4 34.0 28.8 23.6 17.1 14.8 12.3 4.5 16.4 22.6 16 -3
TVS Motors Buy 481 583 21 228.3 3.3 6.7 9.4 11.1 14.1 19.8 23.3 34.1 24.3 20.6 16.8 12.4 10.6 6.0 24.6 29.4 -6 -15
BUILDING MATERIALS
Astral Poly Technik Hold 1,194 930 (22) 143.0 2.1 2.0 2.8 3.7 16.7 23.6 30.9 71.4 50.5 38.6 37.4 29.8 23.5 9.3 20.1 25.8 -3 32
Century Plyboards India Buy 166 220 33 36.9 0.5 1.7 2.0 2.5 7.5 8.9 11.5 22.1 18.6 14.5 13.6 11.4 9.3 3.2 18.6 18.4 -8 -39
Cera Sanitaryware Hold 2,919 2,820 (3) 38.0 0.5 1.2 1.4 1.7 88.6 107.1 128.3 33.0 27.3 22.7 18.7 15.6 13.2 4.6 18.3 25.2 3 1
Finolex Industries Hold 465 560 20 57.8 0.8 3.8 3.9 4.3 31.0 32.5 35.5 15.0 14.3 13.1 6.8 6.0 5.3 1.9 13.0 18.7 0 -27
Greenlam Industries Buy 858 930 8 20.7 0.3 0.8 0.9 1.1 32.5 39.1 46.4 26.4 22.0 18.5 13.6 11.6 10.0 4.0 20.1 23.6 -12 -28
Greenply Industries Buy 150 160 7 18.3 0.3 0.8 1.0 1.2 6.8 7.9 9.8 22.0 19.0 15.2 12.5 10.5 8.6 1.8 9.7 9.7 -10 -46
Kajaria Ceramics Buy 610 700 15 96.9 1.4 2.3 3.2 4.4 14.4 20.2 27.9 42.2 30.2 21.8 21.2 16.1 11.8 5.3 18.8 26.2 -1 12
Somany Ceramics Buy 380 570 50 16.1 0.2 0.3 0.8 1.2 10.9 18.8 28.5 34.8 20.2 13.4 12.3 9.4 7.0 2.4 12.3 14.1 -6 -30
Supreme Industries Buy 1,038 1,050 1 131.9 1.9 3.3 4.5 5.3 25.8 35.7 42.0 40.2 29.0 24.7 18.2 15.3 13.2 5.5 20.0 26.8 -11 -17
CEMENT
ACC Hold 1,615 1,705 6 303.3 4.3 10.6 12.7 13.9 56.6 67.5 74.0 28.5 23.9 21.8 12.9 11.4 10.5 2.6 11.5 17.5 -3 23
Ambuja Cement Hold 221 220 (0) 437.9 6.3 12.4 13.3 14.7 6.3 6.7 7.4 35.2 32.9 29.7 21.4 19.1 17.1 2.0 6.2 8.6 -3 6
Dalmia Bharat Buy 1,086 1,290 19 209.6 3.0 2.7 3.8 6.5 14.2 19.9 33.8 76.7 54.6 32.1 12.7 11.4 9.5 1.9 3.5 5.6 1
Grasim Industries Buy 857 1,025 20 563.8 8.1 26.3 27.6 28.5 40.1 42.0 43.4 21.4 20.4 19.8 13.5 13.4 12.3 1.1 5.7 7.7 -1 -18
JK Lakshmi Cement Buy 370 336 (9) 43.6 0.6 2.1 1.8 2.7 18.1 15.3 23.1 20.4 24.3 16.0 10.4 10.6 8.1 2.6 11.2 12.4 3 -3
Orient Cement Hold 113 115 2 23.1 0.3 0.5 1.1 1.7 2.3 5.6 8.2 48.4 20.2 13.7 11.3 8.2 6.9 2.0 10.4 11.9 27 -6
Shree Cements Hold 20,208 19,300 (4) 704.0 10.1 12.0 16.0 19.0 345.0 458.8 544.4 58.6 44.0 37.1 25.5 19.6 16.3 6.4 15.5 18.1 5 26
UltraTech Cement Hold 4,647 4,625 (0) 1,276.4 18.3 24.3 36.0 44.6 88.7 124.6 154.4 52.4 37.3 30.1 21.7 15.9 13.4 3.6 11.0 12.0 11 26
FMCG & Retail
Asian Paints Buy 1,368 1,499 10 1,312.6 18.8 21.6 25.2 31.9 22.5 26.3 33.3 60.8 52.0 41.1 37.0 31.0 24.7 11.9 24.6 32.9 -4 7
Bajaj Consumer Care Buy 337 479 42 49.8 0.7 2.3 2.7 3.2 15.4 18.3 21.8 21.9 18.4 15.5 16.6 13.8 11.5 9.5 52.2 64.7 1 -25
Colgate Palmolive Buy 1,151 1,455 26 313.2 4.5 7.6 8.8 9.9 28.0 32.3 36.4 41.2 35.7 31.7 23.7 20.4 17.8 11.7 36.0 54.3 -5 -6
Avenue Supermarts BUY 1,299 1,656 27 810.8 11.6 9.3 12.2 16.2 14.9 19.6 25.9 87.3 66.2 50.1 49.4 38.9 29.6 11.9 19.7 28.0 1 -4
Emami BUY 357 495 39 162.0 2.3 5.2 6.5 7.5 11.5 14.2 16.5 30.9 25.1 21.6 20.9 17.0 14.3 6.5 28.0 32.8 -9 -32
Future Consumer BUY 42 70 66 80.7 1.2 -0.2 1.2 1.4 -0.3 0.6 0.7 -124.7 73.7 60.7 91.2 37.7 27.1 7.4 11.2 10.7 -2 -23
Future Lifestyle BUY 470 565 20 91.5 1.3 1.6 1.8 2.4 8.0 9.4 12.2 59.0 50.1 38.6 18.2 15.4 12.5 4.6 9.5 14.7 -2 11
Future Retail Buy 436 680 56 218.9 3.1 7.2 7.7 9.2 14.3 15.4 18.3 30.4 28.3 23.8 22.5 16.3 12.9 4.8 18.6 23.7 2 -21
Godrej Consumer Hold 659 685 4 673.3 9.7 14.8 17.2 20.0 14.4 16.8 19.6 45.6 39.2 33.7 31.6 26.4 22.8 7.9 21.8 23.9 -2 -11
Hindustan Unilever Hold 1,768 1,746 (1) 3,827.8 54.9 60.8 71.7 80.0 28.1 33.2 37.0 62.8 53.3 47.8 43.6 36.3 32.2 33.2 74.9 111.9 1 13
ITC Buy 300 349 16 3,674.1 52.7 123.9 137.9 153.9 10.1 11.2 12.6 29.6 26.6 23.9 21.0 18.8 16.7 5.9 23.1 33.2 -1 10
Jyothy Labs Buy 163 200 23 59.8 0.9 2.1 2.2 2.4 5.6 5.9 6.7 29.2 27.5 24.4 21.3 19.0 17.2 4.7 16.7 21.9 -9 -23
Kansai Nerolac Hold 418 409 (2) 225.1 3.2 4.7 5.4 6.3 8.7 10.1 11.7 48.2 41.3 35.7 28.9 25.0 21.9 6.0 15.3 23.1 -4 -15
Marico Buy 364 381 5 469.7 6.7 9.3 11.3 13.3 7.2 8.7 10.3 50.5 41.7 35.4 36.2 29.8 25.0 13.4 34.6 45.4 0 17
Nestle HOLD 10,701 9,484 (11) 1,031.7 14.8 17.5 19.3 22.9 181.4 200.6 237.1 59.0 53.3 45.1 36.1 32.7 27.9 23.0 47.4 71.0 -2 11
Shoppers Stop BUY 471 595 27 41.4 0.6 0.8 1.2 1.3 9.0 13.2 15.1 52.6 35.7 31.2 16.0 12.5 10.7 3.8 11.2 19.8 4 -13
Trent BUY 382 398 4 127.1 1.8 1.3 1.6 2.3 3.9 4.9 6.9 99.3 78.4 55.6 55.2 45.0 32.6 6.9 9.2 11.6 8 17
V-Mart Retail HOLD 2,285 2,512 10 41.4 0.6 0.7 0.9 1.1 39.4 47.1 61.7 58.0 48.5 37.0 30.5 25.6 19.6 8.4 18.9 29.4 -15 0
V2 Retail BUY 209 393 88 7.1 0.1 0.5 0.4 0.6 13.8 12.2 18.4 15.1 17.1 11.4 14.9 8.9 6.0 2.1 13.2 19.8 -18 -50
Valuation Guide
Company Reco CMP TP Return M.Cap M.Cap Net profit (INRbn) EPS (INR) PE (x) EV/EBITDA (x) P/BV (x) RoE (%) RoCE (%) Absolute (%)
INDUSTRIALS & ENGINEERING

ABB Buy 1,457 1,381 (5) 308.8 4.4 5.1 3.2 4.5 24.1 15.2 21.2 60.4 50.0 41.1 33.1 30.3 25.3 8.6 9.3 14.8 -1 22
Bajaj Elec. Buy 551 639 16 56.4 0.8 1.7 2.0 2.6 16.3 19.7 25.6 33.9 27.9 21.5 20.7 17.9 15.5 4.7 17.8 16.5 -2 -5
BEML Buy 922 1,150 25 38.4 0.6 1.4 2.1 3.0 32.9 50.2 71.9 28.0 18.4 12.8 14.9 11.4 8.7 1.5 8.7 12.1 2 -1
Bharat Electronics Buy 101 127 25 246.3 3.5 16.2 16.6 19.3 6.6 6.8 7.9 15.2 14.8 12.8 9.4 9.2 8.1 2.4 17.3 24.6 14 -13
BHEL Hold 65 72 10 227.2 3.3 13.7 17.3 20.8 3.9 5.0 6.0 16.6 13.1 10.9 7.8 5.4 3.3 0.7 5.1 9.7 -11 -13
Blue Star Hold 747 756 1 72.0 1.0 1.9 2.4 2.8 19.7 25.5 29.1 37.9 29.3 25.7 21.5 17.0 15.2 7.3 26.3 35.2 14 5
Crompton Consumer Hold 219 245 12 137.3 2.0 4.0 4.3 5.1 6.4 6.8 8.2 34.1 32.0 26.9 22.9 20.6 17.4 12.1 38.4 49.2 -8 -9
CG Power & Ind. Sol. Buy 39 70 80 24.4 0.3 1.1 2.4 3.1 1.8 3.8 5.0 21.2 10.1 7.8 6.5 5.0 4.3 0.8 8.7 12.0 11 -46
Cummins India Buy 729 935 28 202.1 2.9 7.8 8.7 10.0 28.1 31.5 36.0 26.0 23.1 20.3 22.3 19.9 17.1 4.5 20.2 27.4 -2 -1
Engineers India Hold 113 120 6 71.6 1.0 3.7 4.5 5.0 5.5 6.6 7.5 20.7 17.1 15.1 11.8 9.8 8.1 3.0 18.3 32.1 -2 -18
GE T&D Hold 264 265 1 67.5 1.0 2.3 2.6 2.7 8.9 10.0 10.6 29.6 26.4 24.9 16.3 15.9 14.8 4.3 17.4 31.7 3 -27
Havells India Hold 756 700 (7) 472.6 6.8 8.6 11.1 12.5 13.8 17.8 20.0 54.7 42.4 37.8 34.9 28.8 25.8 10.4 25.9 34.9 -1 39
Hitachi Home & Life Buy 1,806 2,100 16 49.1 0.7 0.9 1.3 1.6 31.6 47.5 60.0 57.1 38.0 30.1 31.0 20.2 16.3 6.7 19.2 24.1 -5 -29
Honeywell Automation Buy 24,143 27,450 14 213.5 3.1 3.6 4.4 5.4 405.9 502.2 610.0 59.5 48.1 39.6 40.0 32.9 27.0 9.8 22.6 35.9 1 31
KEC International Buy 286 390 37 73.5 1.1 5.0 5.8 6.7 19.3 22.4 26.0 14.8 12.7 11.0 7.6 6.4 5.5 2.3 20.4 26.7 -3 -23
Kirloskar Pneumatic Buy 185 245 32 11.9 0.2 0.6 0.7 0.9 8.6 10.2 13.6 21.5 18.1 13.6 13.2 10.6 8.6 2.2 12.8 18.9 0 4
Lakshmi Machine Works Hold 5,403 5,900 9 57.7 0.8 2.6 3.0 3.3 232.0 268.2 295.0 23.3 20.1 18.3 14.1 11.6 9.1 2.9 15.5 28.7 -8 -35
Larsen & Toubro Buy 1,461 1,656 13 2,049.2 29.4 86.1 100.7 121.8 61.4 71.8 86.8 23.8 20.3 16.8 18.4 15.9 13.6 1.9 15.0 9.4 8 10
Siemens Buy 1,169 1,370 17 416.3 6.0 11.3 13.9 15.8 31.8 39.2 44.5 36.8 29.9 26.3 23.0 18.7 16.1 4.7 16.4 26.0 0 14
Techno Electric Buy 231 320 38 26.1 0.4 1.7 2.1 2.1 15.5 19.0 19.1 14.9 12.1 12.1 10.1 8.1 7.6 1.7 15.0 19.2 -6
Thermax Hold 964 1,050 9 114.9 1.6 3.6 4.1 5.0 29.9 34.8 42.0 32.2 27.7 23.0 24.9 19.8 14.5 3.7 13.9 20.5 -1 -15
Voltas Buy 584 650 11 193.3 2.8 5.2 6.1 7.7 15.6 18.5 23.2 37.4 31.5 25.2 31.6 25.8 21.0 4.3 14.2 24.0 -6 7
IT
Cyient Hold 550 620 13 61.1 0.9 5.0 5.5 5.9 44.4 48.8 52.7 12.4 11.3 10.4 8.5 7.0 5.9 2.1 20.1 23.3 -6 -30
HCL Tech Buy 1,061 1,200 13 1,439.0 20.6 101.7 106.1 117.2 73.6 77.1 85.1 14.4 13.8 12.5 9.8 8.2 7.4 2.9 23.1 28.4 -4 19
Hexaware Tech Hold 357 330 (7) 106.3 1.5 5.8 6.4 6.8 19.9 21.8 23.2 18.0 16.4 15.4 13.4 11.4 10.1 3.9 25.8 32.5 3 -16
Infosys Buy 710 810 14 3,098.3 44.4 154.1 174.9 191.7 35.4 40.2 44.1 20.0 17.6 16.1 12.2 12.3 11.0 4.4 25.7 35.5 -3 21
Larsen Toubro Infotech Buy 1,781 2,000 12 309.1 4.4 15.3 16.8 19.3 87.3 96.4 110.3 20.4 18.5 16.1 16.2 13.7 12.0 5.4 31.6 44.5 6 12
Mphasis Buy 963 1,080 12 179.4 2.6 10.9 12.5 13.8 56.7 64.6 71.5 17.0 14.9 13.5 11.8 10.0 8.7 2.9 20.2 25.7 0 -11
NIIT Tech Buy 1,284 1,550 21 79.3 1.1 4.1 5.3 6.4 66.4 86.5 103.4 19.3 14.8 12.4 10.8 8.6 6.9 3.3 24.1 33.5 -2 20
Persistent Sys Hold 606 660 9 48.2 0.7 3.7 4.0 4.4 46.2 50.2 55.2 13.1 12.1 11.0 5.8 5.1 4.3 1.8 15.9 22.2 -5 -27
TCS Buy 2,082 2,100 1 7,811.5 112.0 316.9 342.0 377.1 84.7 91.4 100.7 24.6 22.8 20.7 18.6 16.5 14.8 7.0 34.1 45.0 -3 19
TeamLease Buy 2,836 3,000 6 48.5 0.7 1.1 1.5 1.9 61.7 90.4 109.0 46.0 31.4 26.0 46.1 31.5 25.5 6.8 24.3 25.2 -3 3
Tech Mahindra Buy 750 870 16 738.1 10.6 43.6 49.4 51.5 48.3 56.4 61.7 15.5 13.3 12.1 10.5 9.3 8.3 2.7 22.1 27.9 -7 8
Wipro Hold 283 255 (10) 1,708.5 24.5 102.2 101.6 108.1 15.0 16.9 18.0 18.9 16.7 15.7 11.4 11.5 10.5 2.7 17.0 19.7 -3 43
LOGISTICS
Adani Ports Buy 386 420 9 799.3 11.5 41.2 48.4 58.3 19.9 23.4 28.1 19.4 16.5 13.7 13.5 11.6 9.9 2.8 18.3 16.6 -1 3
Allcargo Logistics Buy 106 140 33 26.0 0.4 2.1 2.6 3.1 8.7 10.8 12.7 12.2 9.8 8.3 6.3 5.2 4.3 1.1 11.9 14.3 -6 -11
Arshiya Ltd Buy 28 78 176 6.9 0.1 -1.6 1.3 3.2 -13.5 10.4 26.0 -2.1 2.7 1.1 56.6 26.5 14.8 0.7 14.6 12.2 -8 -53
Blue Dart Express Hold 2,703 2,700 (0) 64.1 0.9 0.9 1.3 1.8 36.9 54.4 77.1 73.2 49.7 35.0 36.3 26.5 19.3 8.5 18.2 26.7 -16 -19
ConCor Buy 485 605 25 295.4 4.2 9.7 10.5 13.2 15.9 17.3 21.6 30.4 28.1 22.5 20.4 16.0 12.8 2.7 9.9 13.2 -4 -13
Gateway Distiparks Hold 135 130 (4) 14.7 0.2 0.6 0.5 0.8 5.3 4.6 7.6 25.6 29.3 17.8 27.9 9.1 8.1 1.1 3.7 9.6 -5 -19
Navkar Corp. Buy 30 70 133 4.5 0.1 0.6 0.8 1.1 3.9 5.1 7.2 7.6 5.8 4.2 5.3 4.3 3.4 0.2 4.3 6.7 -20 -80
Transport Corp. Buy 292 380 30 22.4 0.3 1.4 1.7 2.1 18.2 22.7 27.4 16.1 12.9 10.7 11.4 9.4 7.9 2.1 18.0 16.7 2 6
VRL Logistics Hold 264 310 17 23.8 0.3 0.9 1.1 1.4 10.2 12.7 15.5 25.9 20.7 17.0 10.3 8.4 7.1 3.3 16.9 21.6 -1 -34
METALS & MINING
Hindalco Industries Buy 198 253 28 444.6 6.4 55.0 64.1 69.1 24.7 28.8 31.1 8.0 6.9 6.4 5.4 5.1 4.5 0.7 10.7 11.3 -1 -14
Hindustan Zinc Hold 250 278 11 1,058.2 15.2 79.6 89.5 95.8 18.8 21.2 22.7 13.3 11.8 11.0 8.1 6.5 5.7 2.7 24.7 34.6 -9 -5
Jindal Steel & Power Buy 152 184 21 147.5 2.1 2.8 2.3 7.6 2.8 2.3 7.5 54.4 66.3 20.4 6.8 6.5 5.7 0.5 0.7 4.9 -13 -33
JSW Steel Hold 277 257 (7) 669.4 9.6 73.5 52.5 54.7 30.4 21.7 22.6 9.1 12.8 12.2 6.0 7.6 7.2 1.8 14.9 13.9 -4 -11
MOIL Buy 155 238 54 39.9 0.6 4.8 5.3 5.3 18.7 20.6 20.7 8.3 7.5 7.5 2.7 2.1 1.8 1.1 15.9 24.0 -1 -21
NALCO Buy 50 80 59 93.2 1.3 17.6 12.6 13.8 9.4 6.8 7.4 5.3 7.4 6.7 2.2 3.0 2.7 0.8 11.0 15.2 -6 -29
NMDC Buy 95 141 49 289.8 4.2 41.0 45.1 46.4 13.4 14.7 15.2 7.1 6.4 6.2 4.4 3.9 3.7 1.0 16.9 25.1 -8 -16
SAIL Hold 51 45 (11) 210.0 3.0 21.1 12.8 20.6 5.1 3.1 5.0 10.0 16.4 10.2 7.7 8.3 7.1 0.5 3.2 6.0 -7 -26
Tata Steel Buy 473 576 22 537.6 7.7 104.0 68.2 75.5 86.4 56.6 62.7 5.5 8.4 7.5 5.1 6.0 5.8 0.8 9.6 10.2 -10 -12
Valuation Guide
Company Reco CMP TP Return M.Cap M.Cap Net profit (INRbn) EPS (INR) PE (x) EV/EBITDA (x) P/BV (x) RoE (%) RoCE (%) Absolute (%)
OIL & GAS

BPCL Hold 384 365 (5) 833.5 12.0 71.3 59.5 58.0 32.9 27.4 26.7 11.7 14.0 14.4 8.8 12.3 12.7 1.9 15.6 13.6 14 3
Castrol India Buy 145 195 35 143.1 2.1 7.1 7.3 7.7 7.2 7.4 7.8 20.2 19.6 18.7 12.7 12.0 11.4 11.9 61.5 95.5 -8 -13
GAIL India Buy 337 440 31 759.7 10.9 63.3 67.2 71.8 28.1 29.8 31.8 12.0 11.3 10.6 7.4 6.7 6.0 1.6 14.6 19.9 -1 4
Gujarat Gas Buy 163 210 29 112.1 1.6 4.2 5.8 7.2 6.2 8.4 10.5 26.4 19.3 15.5 13.2 9.8 8.1 4.2 23.8 19.8 3 -4
Gujarat State Petronet Hold 188 225 20 106.2 1.5 8.0 8.5 8.6 14.1 15.2 15.3 13.3 12.4 12.3 8.2 7.7 7.3 1.6 14.0 17.4 -1 12
Gulf Oil Lubricants Buy 871 1,120 29 43.4 0.6 1.8 2.1 2.5 35.7 42.0 50.8 24.4 20.7 17.1 15.3 13.1 10.8 6.0 31.9 34.1 0 -5
HPCL Hold 289 280 (3) 440.0 6.3 60.3 36.1 50.3 39.6 23.7 33.0 7.3 12.2 8.7 5.6 8.7 6.7 1.5 12.4 9.9 13 1
Indian Oil Corp Hold 155 160 3 1,463.4 21.0 168.9 201.0 206.0 17.4 20.7 21.2 8.9 7.5 7.3 6.5 5.4 5.4 1.3 17.7 17.1 4 1
Indraprastha Gas Buy 306 350 15 213.9 3.1 7.3 8.2 8.9 10.4 11.7 12.8 29.4 26.2 24.0 17.1 15.3 13.7 4.7 19.2 27.7 -2 16
Mahanagar Gas Buy 849 1,100 30 83.9 1.2 5.5 6.2 6.7 55.3 62.8 67.9 15.4 13.5 12.5 9.0 8.3 7.7 3.3 25.0 28.9 -14 6
Oil India Buy 182 280 54 197.7 2.8 39.6 41.5 42.1 34.9 36.5 37.1 5.2 5.0 4.9 3.8 3.4 3.0 0.6 13.3 15.8 2 -21
ONGC Buy 177 205 16 2,226.7 31.9 316.4 361.0 374.0 24.7 28.1 29.1 7.2 6.3 6.1 4.1 3.5 3.2 0.9 15.1 16.2 8 1
Petronet LNG Hold 237 245 3 355.5 5.1 21.6 24.6 14.4 16.4 16.5 14.4 - 9.9 8.8 - 3.4 23.8 31.8 1 15
Reliance Industries Hold 1,340 1,245 (7) 8,496.7 121.9 398.4 486.2 583.6 67.3 82.1 98.6 19.9 16.3 13.6 12.8 11.2 9.4 2.1 12.7 11.7 -2 47
Pharma
Alembic Pharma Hold 525 590 12 99.0 1.4 5.8 5.2 5.9 30.7 27.6 31.2 17.1 19.1 16.8 12.0 12.2 9.9 3.2 17.9 18.5 -3 24
Cadila Healthcare Hold 250 370 48 256.3 3.7 18.4 18.7 21.3 18.0 18.3 20.8 13.9 13.7 12.0 10.2 9.3 8.1 2.3 17.6 11.9 -24 -28
Cipla Buy 553 620 12 445.6 6.4 15.3 18.3 22.2 19.0 22.8 27.6 29.1 24.3 20.1 14.9 13.0 11.1 2.7 11.6 13.2 -2 4
Dr Reddy's Lab Buy 2,658 3,000 13 441.2 6.3 18.7 20.9 24.6 112.8 126.1 148.2 23.6 21.1 17.9 14.4 11.5 10.0 2.8 14.1 14.1 -6 36
Lupin Hold 757 790 4 342.7 4.9 9.5 13.4 16.9 21.0 29.7 37.4 36.0 25.5 20.2 14.7 11.4 9.9 2.4 9.5 11.7 -13 3
Natco Buy 521 940 81 95.2 1.4 7.3 7.0 7.1 40.3 39.2 39.7 12.9 13.3 13.1 10.2 10.7 10.2 2.4 18.6 23.0 -3 -34
Strides Shasun Buy 414 580 40 37.1 0.5 0.6 2.6 3.4 6.6 28.7 38.6 62.9 14.4 10.7 13.4 8.9 7.8 1.3 9.3 8.4 -13 3
Torrent Pharma Hold 1,560 1,680 8 263.9 3.8 4.4 9.8 25.8 57.8 60.6 27.0 - 15.7 13.6 - 5.0 19.5 17.0 -14 17
INFRASTRUCTURE
Ashoka Buildcon Buy 120 182 52 33.6 0.5 3.0 3.5 3.4 10.6 12.4 12.2 11.3 9.7 9.8 9.1 6.9 7.1 1.4 15.7 14.7 -6 -28
Dilip Buildcon Buy 568 745 31 77.7 1.1 7.6 8.7 9.3 55.9 63.3 67.7 10.2 9.0 8.4 6.0 4.9 4.1 1.9 23.6 25.5 -7 -47
Gayatri Projects Hold 168 178 6 31.4 0.5 2.1 2.7 2.7 11.0 14.2 14.5 15.3 11.8 11.5 8.8 7.1 6.6 1.8 16.3 18.5 -4 -12
IRB Infra Buy 126 190 51 44.2 0.6 8.2 9.1 7.1 23.3 25.8 20.3 5.4 4.9 6.2 5.0 4.7 4.9 0.7 14.1 14.6 -4 -45
KNR Constructions Ltd. Buy 247 252 2 34.8 0.5 2.8 2.0 2.4 19.6 14.0 17.4 12.6 17.6 14.2 8.8 9.5 7.8 2.2 13.0 18.7 0 -14
NBCC Buy 57 58 1 103.0 1.5 4.8 5.5 8.0 2.6 3.0 4.4 21.6 18.8 12.9 19.9 11.2 8.1 3.9 22.3 20.7 -3 -38
NCC Ltd. Buy 110 136 24 65.9 0.9 6.4 6.8 7.2 10.7 11.4 12.0 10.3 9.6 9.2 5.4 5.2 4.9 1.3 14.5 23.3 8 4
NTPC Buy 130 161 24 1,282.3 18.4 124.2 146.9 161.6 12.5 14.8 16.3 10.3 8.7 7.9 10.3 9.5 8.5 1.1 12.8 8.0 -3 -7
Sadbhav Engg. Buy 233 282 21 40.0 0.6 2.3 2.6 3.4 13.3 15.3 20.1 17.6 15.2 11.6 12.9 9.5 7.2 1.7 11.9 14.3 2 -36
Sadbhav Infra Buy 79 166 111 27.7 0.4 -0.9 -0.9 0.8 -2.5 -2.5 2.4 -31.0 -31.3 32.8 8.3 6.5 5.5 4.7 -15.5 13.2 -10 -37
Welspun Ent. Buy 119 166 40 17.6 0.3 1.3 2.3 3.0 9.0 15.6 20.3 13.1 7.6 5.9 9.8 6.7 4.9 1.0 14.4 14.6 3 -39
MidCaps - Other
APL Apollo Tubes Buy 1,601 1,972 23 38.2 0.5 1.5 2.4 3.3 62.2 100.1 138.3 25.8 16.0 11.6 11.9 8.6 6.8 3.0 21.5 22.1 1 -16
CCL Products Buy 265 350 32 35.2 0.5 1.5 1.7 2.3 11.6 12.8 17.3 22.7 20.7 15.3 15.6 12.0 10.0 3.7 19.1 20.4 2 -15
Deepak Nitrite Buy 284 400 41 38.7 0.6 1.7 2.8 3.3 12.7 20.5 24.1 22.3 13.9 11.8 12.0 7.1 6.3 2.9 23.4 22.6 11 16
Ganesha Ecosphere Buy 295 440 49 6.4 0.1 0.5 0.6 0.8 22.6 27.0 36.7 13.0 10.9 8.0 6.2 6.1 4.3 1.4 13.5 18.7 -10 -22
Himadri Chemicals Buy 100 177 76 42.0 0.6 3.0 3.9 4.6 7.3 9.3 11.1 13.8 10.8 9.1 8.4 6.8 5.8 2.0 20.4 24.6 -12 -26
Indian Hume Pipe Buy 272 405 49 13.2 0.2 0.8 1.0 1.3 16.4 21.3 27.8 16.6 12.8 9.8 8.6 7.3 6.0 2.3 19.1 23.5 -3 -7
Jain Irrigation Buy 53 80 52 26.9 0.4 3.5 5.0 6.6 6.7 9.8 12.8 7.8 5.4 4.1 6.0 5.3 4.7 0.5 10.1 12.7 -9 -49
Mold-Tek Packaging Buy 239 370 55 6.6 0.1 0.3 0.4 0.5 11.3 14.2 18.4 21.1 16.8 13.0 10.5 8.8 7.3 3.0 19.2 14.4 -5 -28
Oberoi Realty Buy 556 630 13 202.0 2.9 8.1 8.8 10.7 22.3 24.3 29.5 24.9 22.9 18.8 16.3 15.2 12.2 2.3 10.5 14.0 5 11
Raymond Buy 803 1,240 54 49.3 0.7 1.7 2.4 3.1 28.1 38.7 49.7 28.5 20.7 16.2 11.7 9.6 8.3 2.2 11.5 14.2 6 -20
Sunteck Realty Buy 496 580 17 72.6 1.0 2.5 3.7 6.6 17.6 26.3 47.1 28.2 18.9 10.5 - - - 2.1 11.9 16.7 4 19
Valuation Guide
Company Reco CMP TP Return M.Cap M.Cap Net profit (INRbn) ABVS (INR) P/AdjBV (x) NNPA Ratio (%) P/E (x) RoE (%) RoA (%) Absolute (%)
FINANCIALS
Axis Bank Buy 779 815 5 2,004.5 28.8 46.8 99.8 138.7 222.7 264.4 305.7 3.5 2.9 2.5 2.3 1.8 1.4 20.4 13.8 1.2 3 50
Bank of Baroda Buy 126 150 19 431.2 6.2 24.1 58.4 85.5 105.1 123.1 148.2 1.2 1.0 0.9 4.0 3.4 2.9 5.7 13.6 0.7 2 -8
Canara Bank Hold 257 275 7 193.8 2.8 3.5 16.2 46.9 193.6 291.1 360.5 1.3 0.9 0.7 5.4 2.9 2.3 11.9 5.3 0.2 -5 6
City Union Bank Hold 209 195 (7) 153.5 2.2 6.8 7.4 8.6 60.3 68.0 77.5 3.5 3.1 2.7 1.8 2.0 2.0 20.8 14.2 1.5 2 25
DCB Bank Hold 230 220 (4) 71.3 1.0 3.3 4.0 5.3 89.2 100.1 114.6 2.6 2.3 2.0 0.7 0.5 0.5 17.8 13.2 1.0 11 25
Federal Bank Buy 101 110 9 201.3 2.9 12.4 16.5 21.2 61.6 67.2 75.1 1.6 1.5 1.4 1.5 1.3 1.0 12.2 11.9 0.9 7 23
HDFC Bank Buy 2,406 2,525 5 6,555.8 94.0 210.8 253.0 303.2 539.6 612.8 700.0 4.5 3.9 3.4 0.4 0.4 0.3 25.9 15.9 1.8 7 22
ICICI Bank Buy 405 465 15 2,613.9 37.5 33.6 147.2 171.7 147.1 170.1 187.7 2.8 2.4 2.2 2.3 1.4 1.2 17.8 14.5 1.4 2 39
IndusInd Bank Buy 1,519 1,775 17 915.8 13.1 42.9 62.7 76.6 421.5 516.7 599.8 3.6 2.9 2.5 1.2 1.2 1.2 17.1 18.2 1.9 -8 -18
Karur Vysya Bank Hold 80 86 7 64.3 0.9 2.1 4.2 7.3 59.2 64.8 74.1 1.4 1.2 1.1 5.0 4.1 3.3 15.4 6.3 0.6 5 -10
Kotak Mahindra Bank Buy 1,495 1,500 0 2,854.2 40.9 48.7 61.2 74.7 198.0 225.1 257.8 7.6 6.6 5.8 0.8 0.8 0.9 46.7 13.5 1.8 10 19
Punjab National Bank Hold 85 95 12 389.5 5.6 -41.8 37.6 68.6 47.7 70.6 81.9 1.8 1.2 1.0 7.5 4.6 4.1 10.7 7.7 0.5 -3 5
State Bank of India Buy 341 390 14 3,044.2 43.7 27.0 270.3 368.6 155.4 191.5 220.0 2.2 1.8 1.6 3.5 2.4 2.3 11.3 13.4 0.7 12 30
South Indian Bank Hold 14 18 30 25.2 0.4 2.3 5.8 7.5 22.9 25.9 29.5 0.6 0.5 0.5 2.5 1.9 1.5 4.4 10.7 0.6 -16 -43
Union Bank of India Hold 71 70 (2) 125.5 1.8 -29.5 12.5 24.5 56.1 83.5 106.8 1.3 0.9 0.7 6.8 4.7 3.4 10.1 5.0 0.2 -19 -18
YES Bank Hold 138 215 56 318.6 4.6 17.2 26.0 43.3 103.6 100.8 120.4 1.3 1.4 1.1 1.9 3.0 1.9 12.2 9.3 0.6 -41 -59
NBFCs
Bajaj Finance Hold 3,449 3,310 (4) 1,993.2 28.6 40.2 56.2 76.4 341.5 434.7 551.7 10.1 7.9 6.3 0.6 0.6 0.5 35.4 25.1 4.3 14 66
CanFin Homes Buy 343 399 16 45.7 0.7 3.0 3.3 3.9 131.8 153.0 177.4 2.6 2.2 1.9 0.2 0.4 0.3 13.9 17.0 1.7 8 -4
Cholamandalam Invst & Fin Buy 1,418 1,696 20 221.7 3.2 11.9 14.0 17.0 362.0 434.7 520.8 3.9 3.3 2.7 1.7 1.6 1.6 15.9 20.6 2.3 0 -5
Equitas Holding Buy 133 145 9 45.5 0.7 2.2 3.3 4.8 68.2 78.7 91.5 2.0 1.7 1.5 1.6 0.8 0.8 14.0 12.3 1.7 3 -15
Gruh Finance Not Rated 319 UR - 234.3 3.4 4.5 4.0 4.7 25.8 29.3 33.5 12.4 10.9 9.5 0.4 0.1 0.1 58.4 19.9 2.1 7 -2
HDFC Hold 2,139 2,052 (4) 3,681.8 52.8 96.3 104.2 117.9 449.4 488.8 533.9 4.8 4.4 4.0 0.0 0.0 0.0 35.3 11.9 2.2 11 20
LIC Housing Finance Sell 528 460 (13) 266.4 3.8 24.3 25.7 28.4 322.0 362.8 407.2 1.6 1.5 1.3 1.1 0.8 0.8 10.4 14.9 1.2 6 11
Manappuram Hold 128 125 (2) 107.5 1.5 9.3 10.1 11.2 53.0 61.2 71.0 2.4 2.1 1.8 0.3 0.6 0.6 10.6 20.4 4.8 8 15
M&M Finance Hold 401 415 4 247.7 3.6 15.6 16.3 17.4 124.0 136.9 143.1 3.2 2.9 2.8 4.8 5.0 5.2 15.1 14.2 2.2 -5 -14
Muthoot Capital Buy 751 1,088 45 12.4 0.2 0.8 1.0 1.3 288.7 350.0 426.6 2.6 2.1 1.8 3.1 3.0 4.0 12.3 19.2 3.3 -12 -18
Muthoot Finance Buy 619 814 31 247.9 3.6 19.7 22.0 25.3 237.0 264.3 308.8 2.6 2.3 2.0 2.0 2.0 2.0 11.3 20.8 5.9 5 55
PNB Hsg. Fin. Hold 795 966 21 133.5 1.9 11.9 12.7 13.4 450.5 526.5 606.7 1.8 1.5 1.3 0.2 0.3 0.4 10.5 16.5 1.5 1 -35
Repco Home Finance Hold 418 487 16 26.2 0.4 2.5 2.8 3.2 244.7 282.2 324.9 1.7 1.5 1.3 1.0 0.9 1.0 9.2 17.3 2.3 -2 -27
Shriram City Union Buy 1,452 1,999 38 95.8 1.4 9.9 11.5 13.5 748.3 908.21,078.8 1.9 1.6 1.3 5.0 4.1 3.6 8.3 16.8 3.5 -16 -34
Shriram Transport Buy 1,065 1,370 29 241.6 3.5 29.6 25.7 28.5 607.3 692.2 793.1 1.8 1.5 1.3 2.6 2.4 2.4 9.4 15.1 2.3 -9 -27
Sundaram Finance Buy 1,456 1,751 20 161.8 2.3 6.2 7.3 8.5 434.1 493.8 493.8 3.4 2.9 2.9 0.5 0.5 0.5 22.3 15.8 2.1 -1 -17
Ujjivan Financial Hold 330 315 (4) 40.0 0.6 2.0 2.8 3.7 159.2 180.3 209.9 2.1 1.8 1.6 0.4 0.5 0.5 14.2 13.4 2.1 4 -13
Events Calendar May 2019

Monday Tuesday Wednesday Thursday Friday Saturday Sun
20 May 21 May 22 May 23 May 24 May 25 May 26 May

Indraprastha Gas Ashok Leyland Atul Auto
Grasim Industries BEML
JSW Steel Finolex Industries
NCC Future Retail
Transport Corp of India
27 May 28 May 29 May 30 May 31 May

Adani Ports & SEZ Deep Industries Bharat Electronics Geojit Financial
Arshiya Himadri Speciality Chem Cadila Healthcare KNR Constructions
BHEL Navkar Corp Havells India Greenply Industries
Bayer Cropscience NMDC Indian Hume Pipe National Aluminium
Colgate Palmolive Punjab National Bank Repco Home Finance ONGC
Century Plyboards TeamLease Services Sadbhav Engineering
GAIL SAIL
Emami Ujjivan Financial
Mphasis
Motherson Sumi
Natco Pharma
Oil India
Sadbhav Infra
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AMP

Cipla FTSE 7,334 0.1 9.0

Growth drivers on track CAC 5,379 (0.1) 13.7

Sectoral indices Delivery Spike

Nifty Nifty P/E Nifty P/B

Sensex FII Provisional Flows (INRbn) DII Provisional Flows (INRbn)

Economy, Money & Banking Commodities Update

INR/USD Gold and silver prices (USD/Tr.Oz) Crude prices (USD/barrel)

Inflation vs 10 year yield Nifty premium/discount NSE volatility index (%)

Current Reco : BUY 4QFY19 RESULT REVIEW

Robust loan growth trend continues

We largely maintain our earnings estimate

5.0 2.5 35.0

4.0 2.0 30.0

2.0 1.0 15.0

Source: Company, Antique Source: Company, Antique

DuPont Analysis (merged entity): RoA's to improve to 1.9%

Diversified fee income stream Corporate fees at 95bps of average assets

Loan Trade & Rem.,

Source: Company, Antique Source: Company, Antique

3.0 1.0 4.0

Credit Cost (%) (LHS) Credit Cost Ex-IL&FS (%) (LHS)

Source: Company, Antique Source: Company, Antique

Corporate Loan (%) Consumer Loan (%) LCR (%)

Source: Company, Antique Source: Company, Antique

Quarterly performance: P&L and asset quality

Quarterly performance: Balance sheet profile

Quarterly performance (BHAFIN)

DuPont Analysis (Standalone)

Balance sheet (INRm) Key assumptions

Financials (including BHAFIN)

Balance sheet (INRm) Key assumptions

Current Reco : BUY 4QFY19 RESULT REVIEW

Key takeaways from the conference call

Cipla's market share in key products

Legacy products Market share

Cipla 4Q19 P&L

Cipla P-IV pipeline

Invagen P-IV pipeline

Cipla P&L changes

US - $ 537 562 14% 5% 612 609 8% -1%

South Africa - INR 24,138 22,124 3% -8% 26,069 23,894 8% -8%

Other markets - INR 29,195 28,669 5% -2% 30,655 30,103 5% -2%

Export APIs - INR 7,223 7,223 3% 0% 7,439 7,439 3% 0%

Net sales 177,344 175,352 10% -1% 196,667 191,252 9% -3%

Gross profit 113,323 111,348 9% -2% 126,260 122,401 10% -3%

Reported EBITDA 34,602 34,587 12% 0% 39,461 39,155 13% -1%

Net profit (Reported) 19,213 18,309 -5% 23,051 22,172 -4%

EPS 23.9 22.8 20% -5% 28.7 27.6 21% -4%

Per share data Margins (%)

Source: Company Antique

Current Reco : BUY 4QFY19 RESULT REVIEW

Consolidated performance (INR mn)

Ratios Q4FY19 Q4FY18 YoY (%) Q3FY19 QoQ (%)

Standalone quarterly performance (INR mn)

Jindal Power stake 96.42% stake valuation 28,733

Per share data EBIT 3.4 9.4 7.4 9.3 9.3

Current Reco : HOLD 4QFY19 RESULT UPDATE

Revenue and revenue growth trend Revenue mix trend

Source: Company, Antique Source: Company, Antique

400 11 300 -15

Source: Company, Antique Source: Company, Antique

Source: Company, Antique Source: Company, Antique

Current Reco : HOLD 4QFY19 RESULT REVIEW