Indian Elections 2014: and The Winners Are..

While we cant predict who will win the elections, a study of returns from the
markets and stocks 3 months prior to the last 5 General Elections in India has
thrown up fascinating results. Historically, 3 months prior to the elections, the
BSE200 Index has risen 12% on average. We looked at the BSE200 universe
and found several stocks that have usually rallied 3 months pre-elections L&T
(avg. +23.4%), Zee Entertainment (+21.7%), Maruti (+21.3%), M&M (+19.3%) and
Ambuja Cements (+15.3%) led by positive election sentiment. Interestingly,
the rally in these stocks continued for 3 months post-polls as well.
HDFC Bank (+14.3%) and OBC (+15.3%) have been the best performing private
and PSU banks respectively. Besides L&T, the Capital Goods outperformers
are Crompton (+34.5%), Siemens (+25.2%) and Voltas (+13.3%). Others include
Reliance Industries, Infosys, Wipro, Lupin, Reliance Infra, Bata and Exide.
BUY Larsen & Toubro (LT): LT has been the most consistent stock performer in the
pre-poll period, yielding positive absolute returns in the 3 months prior to each of
the last 5 general elections (avg. returns of +23%) and outperforming the market by
~11%. With a presence in an array of industries ranging from heavy engineering and
hydrocarbons to infrastructure, transport and power, LT is the most diversified play
on infrastructure revival and is poised to gain from any traction in infra spending. A
stable government with a strong development agenda will bode well for LT.
BUY Mahindra & Mahindra (MM): Over the past 5 general elections, the stock has
gained more than 19% in the 3 months prior to the polls. MM stands to benefit in
election years where political parties purchase large no. of SUVs for campaigning.
The tractor segment continues to perform well (+21% YTD). We think the stock is
trading at attractive levels; EV/EBITDA of 8.4x vs 5-yr average of 9.2x.
BUY Maruti (MSIL): The MSIL stock yielded average absolute returns of ~21% in
the 3 months prior to the last two elections and also outperformed the market by
~9% in the same period. The rural economy continues to support demand while
enhanced focus on localisation and cost reduction should drive a margin uptick in
FY15. New launches such as the Celerio AMT, new SX4, hatchback and a smaller
SUV should keep competition in check. At 14x FY15E earnings, the stock trades at a
16% discount to its long-term (5yr) average of 16.7x.
BUY Ambuja Cement (ACEM): Our analysis shows that ACEM has been the most
consistent cement stock in pre-election months. If a stable government with pro-
development policies comes into power, cement demand is likely to revive. The
cement sector is the best proxy play on infrastructure as balance sheets remain
strong. ACEM is trading at near replacement costs of US$ 120-130/t and hence the
downside from current levels should be limited. The stock is trading at an
EV/EBITDA of 8.7x which is well below its 5-yr average of 10.5x.
BUY Zee Entertainment (ZEE): Television media companies are likely to be the
biggest beneficiaries of increased advertising spend in the pre-poll period. This is
demonstrated by the strong performance of ZEE (average absolute returns of
~22% and market outperformance of ~12%) in the 3 months prior to elections.
Management continues to expect television industry ad-spend growth of 10-12%
in FY15. Thus, any increase owing to the elections represents a potential upside.
ZEE is trading at an EV/EBITDA of 6.1x vs. its 5-year average of 7.7x.
From our Sales & Sales
Trading Desk
INDIA | THEMATIC

26 February 2014

Election picks
Ticker
Abs. perf.^
(%)
Relative
perf.^ (%)
3m 3ma 3m 3ma
LT IN 23.4 16.4 11.4 8.1
Z IN 21.7 46.4 12.3 42.5
MSIL IN 21.3 22.9 9.5 10.0
MM IN 19.3 17.4 7.4 9.2
ACEM IN 15.3 9.7 3.3 1.5
Notable performers
Ticker
Abs. perf.^
(%)
Relative
perf.^ (%)
3m 3ma 3m 3ma
CRG IN 34.5 12.2 21.8 4.0
LPC IN 25.6 9.8 13.7 1.6
RELI IN 25.3 6.8 13.4 (1.4)
SIEM IN 25.2 19.7 13.3 11.4
WPRO IN 23.0 18.0 13.5 11.9
EXID IN 21.4 10.1 9.5 1.8
OBC IN 15.3 5.4 3.3 (2.8)
INFO IN 14.3 18.2 4.8 12.1
HDFCB IN 14.3 17.9 2.4 9.7
RIL IN 13.7 3.1 1.8 (5.2)
VOLT IN 13.3 17.9 1.3 9.6
BATA IN 11.1 3.4 10.4 0.6
Source: Bloomberg, RCML Research

^3m = 3 months prior to the last 5 general
elections; 3ma = 3 months post the last 5
general elections

Indian Elections 2014: And the Winners are...
This document is produced by the Sales and Trading Department of Religare Capital Markets Limited and is not Research.

Indian Elections 2014: And
the Winners are...
This document is produced by the Sales and Trading Department of Religare
Capital Markets Limited and is not Research.

Trading Desk
INDIA | THEMATIC

26 February 2014 Page 2 of 13

Fig 1 - Election winners

Absolute Performance (%)^ Relative Performance (%)^ Valuation (x)
Recommendations P/E EV/EBITDA
Ticker 3m 3ma 6ma 3m 3ma 6ma Last 5 yrs Current Last 5 yrs Current^
Larsen & Toubro 23.4 16.4 (2.4) 11.4 8.1 (10.8) 17.5 19.3 13.7 14.9
Zee** 21.7 46.4 22.3 12.3 42.5 73.9 17.8 34.3 7.7 6.1
Maruti 21.3 22.9 18.3 9.5 10.0 (6.4) 17.6 17.5 9.8 8.2
M&M 19.3 17.4 9.6 7.4 9.2 1.3 11.6 12.5 9.2 8.4
Ambuja Cements 15.3 9.7 (5.1) 3.3 1.5 (13.5) 19.1 18.3 10.5 8.7

Notable performers

Crompton 34.5 12.2 11.6 21.8 4.0 3.3 21.5 27.7 11.9 12.8
Lupin 25.6 9.8 4.9 13.7 1.6 (3.5) 36.8 24.6 14.1 15.2
Reliance Infra 25.3 6.8 10.7 13.4 (1.4) 2.3 9.7 5.6 15.2 8.8
Siemens 25.2 19.7 18.5 13.3 11.4 10.1 36.7 35.0 20.3 21.2
Wipro* 23.0 18.0 29.1 13.5 11.9 20.7 18.3 18.4 11.3 13.4
Exide 21.4 10.1 15.4 9.5 1.8 7.1 21.1 16.4 11.5 9.9
OBC 15.3 5.4 9.3 3.3 (2.8) 0.9 5.7 4.5 na na
Infosys* 14.3 18.2 41.4 4.8 12.1 33.0 20.4 20.1 11.5 13.9
HDFC Bank 14.3 17.9 37.9 2.4 9.7 11.5 23.6 18.9 na na
Reliance Industries 13.7 3.1 2.3 1.8 (5.2) (6.1) 13.1 11.3 9.8 8.6
Voltas 13.3 17.9 21.6 1.3 9.6 13.3 14.6 20.8 9.0 15.0
Bata# 11.1 3.4 4.5 10.4 0.6 11.4 25.5 26.9 15.6 15.8
Source: Bloomberg, RCML Research | ^3m stands for 3 months prior to the last 5 general elections; 3ma and 6ma represent the 3 months and 6 months post the last 5
general elections
* Averages exclude the strong rally during the IT boom (in this case, during the 1999 elections) | ** Averages exclude the strong rally in 1999 when ZEE saw a
fundamental turnaround stock doubled | # Relative performance excludes the massive underperformance prior to and after the 1999 general elections | ^ current
valuation represents the consensus (Bloomberg) valuation

the Winners are...

Trading Desk
INDIA | THEMATIC


Overview
Barring 2004 which saw a flattish trend, markets have typically traded strongly in the
run-up to the general elections (3m prior avg. of +12%). Interestingly, this
outperformance was more pronounced prior to the 1999 and 2009 general elections
where a particular party was expected to win by a majority.
The BJP appears the favorite to win this years general election especially following its
rout of the ruling Congress party in a series of important state assembly polls. The scale
of the BJPs victory and the strong support shown for the anti-corruption Aam Admi Party
(AAP) has highlighted widespread anger with the Congress-led government and indicates
the likelihood of a change of government at the Centre. Having said this, AAPs decision
to contest the Lok Sabha polls presents a potential threat given their socially popular
policies which can drain the economy.
Investors love political certainty and change is always welcomed. Thus, in this report, we
focus on stocks that have outperformed significantly in the lead-in to the last five general
elections. Based on our analysis, we recommend LT, MM, MSIL, ACEM and ZEE to play a
potential election rally.
We also highlight some companies which, though not directly impacted by elections,
have steadily outperformed in election months. HDFCB and OBC have been the best
performing private sector and PSU banks respectively. Besides L&T, other Capital Goods
outperformers are: CRG, SIEM and VOLT. Others include: RIL, INFO, WPRO, LPC, RELI,
BATA and EXID.
Fig 2 - Market performance pre and post the last 5 general elections
(%)
Average
3m pre-polls 3m post-polls 6m post-polls
BSE200 11.9 8.2 8.3
INR/USD depreciation 1.1 1.4 0.7

the Winners are...

Trading Desk
INDIA | THEMATIC


Election picks
BUY Larsen & Toubro (LT)
LT has been the most consistent stock performer in the pre-election period,
yielding positive absolute returns in the 3 months prior to each of the last 5 general
elections (average returns of +23%).
In the same period, LT has also outperformed the market by ~11% (it traded in-line
only prior to the 1996 elections but has significantly outperformed prior to each of
the last 4 general elections).
With a presence in an array of industries ranging from heavy engineering and
hydrocarbons to infrastructure, transport and power, LT is the most diversified play
on infrastructure revival and is poised to gain from any traction in infrastructure
spending. A stable government with a strong development agenda will bode well
for the company.
Fig 3 - LTs absolute performance 3m prior to elections
(%) 1996 1998 1999 2004 2009 Average
Larsen & Toubro 9.0 27.9 31.0 10.3 38.6 23.4

Fig 4 - LTs relative performance 3m prior to elections
(%) 1996 1998 1999 2004 2009 Average
Larsen & Toubro (0.0) 22.8 9.1 11.5 13.7 11.4
Our Capital Goods analyst has a fundamental HOLD rating on LT with a Mar15 TP of
Rs 1,100, and believes macro headwinds would likely cap stock valuations over the
medium-to-long term.

the Winners are...

Trading Desk
INDIA | THEMATIC


BUY Mahindra & Mahindra (MM)
MM stands to benefit in election years where political parties purchase large no.
of SUVs for campaigning. Over the past 5 general elections, the stock has gained
more than 19% on average in the 3 months pre-polls and rallied 17% in the
3 months post-polls.
Barring 1998, MM has outperformed the market in the run-up to every general
election (average relative outperformance of 7%).
MMs Tractor segment (which contributes ~29% of sales and ~35% of EBITDA)
continues to perform well. With YTD growth at 21%, MM raised its tractor volume
guidance to 18-20% for FY14. For FY15, the company expects growth at 8-10% (over
a high base) as sales would benefit from a good monsoon this year.
For the Auto segment, we expect 7-8% volume growth in FY15 on a favourable FY14
base of -10% and recovery in macro sentiment with improvement in political
stability. MM is looking to launch three new platforms in CY15, including two
compact UV platforms and one in the CV segment.
With the margin trajectory remaining healthy, we believe the stock is attractively
priced; stripping off the value of its subsidiaries, the standalone business trades at
an attractive valuation of 9.6x FY15E P/E. Our Autos research team has a BUY rating
and Mar15 TP of Rs 1,190 on MM.

Fig 5 - MMs absolute performance 3m prior to elections
(%) 1996 1998 1999 2004 2009 Average
Mahindra & Mahindra 7.3 (12.3) 31.9 10.8 59.0 19.3
Fig 6 - MMs relative performance 3m prior to elections
(%) 1996 1998 1999 2004 2009 Average
Mahindra & Mahindra (1.7) (17.5) 10.0 12.0 34.0 7.4

the Winners are...

Trading Desk
INDIA | THEMATIC


BUY Maruti (MSIL)
Since MSIL was listed in 2003, we have only the last two elections as benchmark
notably, the stock has outperformed significantly in the run-up to both.
MSIL is one of the better names to play the potential election rally in our opinion.
The stock yielded average absolute returns of ~21% in the 3 months prior to the last
two elections and also outperformed the market by ~9% in the same period.
9MFY14 volume growth of 0.3% was led by the rural segment (~30% of volumes,
+18% YoY), even as urban sales (down 5-6%) reflected the broad macro slowdown.
The company has 1,250 outlets, of which 50% are in smaller towns/rural areas.
MSIL has largely maintained its market share in the passenger car segment at
49-50% (FY14E vs. 50-51% in FY05) despite fierce competition. We believe the worst
is over and new launches such as the Celerio AMT, the new SX4, a hatchback and a
smaller SUV (XA-Alpha/SX4 Cross) will help the company compete against Amaze
(Honda), Grand i-10 (Hyundai) and Ecosport (Ford).
Enhanced focus on localisation and cost reduction would drive a margin uptick in
FY15 (we estimate 12% EBITDA margins vs. 10.3% averaged over FY10-FY14).
Additional support should come from a weak JPY (PAT sensitivity at 2.5% on a +1%
change in the JPY/INR). We expect revenue/EBITDA/PAT CAGR of 13%/22%/24%
over FY13-FY16, driven by margin expansion/volume pickup after the prolonged
slump. While Suzukis announcement relating to the Gujarat plant surprised us and
the street, management has partially alleviated these concerns, implying no
material earnings impact.
At 14x FY15E earnings, the stock trades at a 16% discount to its long-term (5yr)
average of 16.7x. Our Autos team has a BUY rating and Mar15 TP of Rs 2,080
on MSIL.

Fig 7 - MSILs absolute performance 3m prior to elections
(%) 2004 2009 Average
Maruti 9.6 33.0 21.3

Fig 8 - MSILs relative performance 3m prior to elections
(%) 2004 2009 Average
Maruti 10.8 8.1 9.5

the Winners are...

Trading Desk
INDIA | THEMATIC


BUY Ambuja Cement (ACEM)
Q4 (Jan-Mar) is among the seasonally better quarters for cement names.
Coincidentally, 4 out of the last 5 general elections have taken place between
March and May (the only exception being the 1999 elections in October).
ACEM has been the most consistent Cement stock in the pre-poll period, yielding
positive absolute returns in the 3 months prior to the last 5 general elections
(average returns of +15% which includes the rally prior to the 1999 elections; the
cement pack rallied by ~50% in the same period).
Fig 9 - ACEM's absolute performance 3m prior to elections
(%) 1996 1998 1999 2004 2009 Average*
Ambuja Cements 2.6 1.6 58.7 9.8 3.6 15.3
Source: Bloomberg, RCML Research | *Average includes the performance prior to 1999 elections when the cement
pack rallied by ~50%

Overall, we believe the worst is over for the economy (and also for the cement
sector after a prolonged 3-year slump), as we see a gradual recovery in GDP in FY15
(5.3% vs. 4.7% in FY14). Further, if a stable government with pro-development
policies (i.e increased focus on infrastructure) comes into power, cement demand
is likely to revive. The cement sector is the best proxy play on infrastructure as
balance sheets remain strong.
ACEM has a major presence in regions other than South India (the South faces the
maximum concerns related to oversupply), which augurs well for the companys
volume as well as price growth in coming years. Various infrastructure projects such
as metro projects in Gujarat & Rajasthan and the Delhi Freight Corridor augur well
for the company. Further, ACEM is protected from volatility in cement prices as 80%
of its sales come from the retail segment, which is far more stable than the
bulk segment.
The companys EBITDA/t has reduced to Rs 522 in Q3CY13 the lowest since
Q2FY05 on account of continued volatility in cement prices, low demand and cost
push. Now however, our channel checks suggest price hikes in major parts of India
and some improvement in demand. Our sensitivity analysis on prices indicates that
if we build in a 7% price hike (last 8yr average) in the next two years instead of
3-4% currently, then earnings increase by 14-15%, all else remaining constant.
ACEM has underperformed the index by 10%+ over the last 3 months. We believe
concerns over earnings downgrades and the ACC-ACEM deal are priced in. The
stock is trading near replacement cost of US$ 120-130/t and past history suggests
that unless markets correct very sharply, large-cap cement stocks dont see a
major downside once they trade near replacement cost. Any improvement in
demand and consequently pricing could lead to strong outperformance from
the company. Our Cement analyst has a HOLD rating and Mar15 TP of Rs 165 on
ACEM.

the Winners are...

Trading Desk
INDIA | THEMATIC


BUY Zee Entertainment (ZEE)
Television media companies are likely to be the biggest beneficiaries of increased
advertising spend in the pre-poll period.
This is demonstrated by the strong performance of ZEE in the 3 months prior to
elections where the stock yielded average absolute returns of ~22% and also
outperformed the market by ~12%.
Fig 10 - ZEE's absolute performance 3m prior to elections
(%) 1996 1998 1999 2004 2009 Average*
Zee 10.0 72.3 200.2 (13.1) 17.8 21.7
Source: Bloomberg, RCML Research | *Average excludes the strong rally in ZEE during 1999 during which the
company saw a fundamental turnaround (stake sale in Siticable, tie-up with Nickelodeon, J V with Star News and
launch of regional channels)

In its latest earnings call, management said it continues to see a stable and robust
advertisement spend environment, notwithstanding a slowdown in volume growth
of FMCG. Management continues to expect television industry ad-spend growth of
10-12% in FY15. Thus, any increase owing to the general elections represents a
potential upside.

the Winners are...

Trading Desk
INDIA | THEMATIC


Notable outperformers
In this section, we highlight some of the stocks that have outperformed consistently
prior to the last 5 general elections (although polls do not affect these stocks on a
fundamental basis. We reckon they are worth monitoring given their historically
unidirectional performance in the pre-election period.
Reliance Infra (RELI) & Reliance (RIL)
On an average basis, both RIL and RELI have yielded strong returns in the run-up to
elections. RIL is the most consistent and best performing Energy stock while RELI is
the best performing Utility stock.
RELI has posted positive returns in the 3 months prior to each of the last 5 general
elections (+25% on average). In the same period, RELI has also outperformed the
market by ~13%.
We note that RELI rallied ~50% (vs. 39% for the ADAG group) in the 3 months
before the 2012 UP elections where the Samajwadi Party emerged as frontrunner.
In the same period, RELI outperformed the markets by ~43% (vs. ~32% for the
ADAG group). This indicates that RELI is best positioned within the ADAG group to
benefit from a pre-election rally.
Fig 11 - RELI and RILs absolute performance 3m prior to elections
(%) 1996 1998 1999 2004 2009 Average
Reliance Infra 8.9 44.0 20.0 14.2 39.4 25.3
Reliance Industries 10.1 2.0 29.7 (12.5) 39.3 13.7

Fig 12 - RELI and RILs relative performance 3m prior to elections
(%) 1996 1998 1999 2004 2009 Average
Reliance Infra (0.1) 38.9 (1.9) 15.4 14.5 13.4
Reliance Industries 1.1 (3.1) 7.8 (11.3) 14.4 1.8
On four of the last five occasions, RIL has given positive returns in the 3 months
prior to the general elections (+14% on average). While RIL underperformed the
market prior to the 1998 and 2004 elections, on an average the stock remains
either in line or outperforms the broader market.
Our Energy analyst has a HOLD rating on RIL with a Mar15 TP of Rs 950.

the Winners are...

Trading Desk
INDIA | THEMATIC


Wipro (WPRO) & Infosys (INFO)
WPRO and INFO have been the best performing IT stocks in the months leading up
to the last 5 general elections. Even if we exclude the sharp rally in 1999, they have
yielded 23% and ~14% average absolute returns respectively.
Fig 13 - Wipro and Infosys' absolute performance 3m prior to elections
(%) 1996 1998 1999 2004 2009 Average*
Wipro 4.4 24.2 57.6 (4.1) 67.4 23.0
Infosys 37.9 0.7 99.0 (6.9) 25.4 14.3
Source: Bloomberg, RCML Research | * Average excludes the rally during 1999 the IT bubble coincided with the
run-up to the general elections
INFO is our top pick within the IT sector. In its recent quarterly results, management
raised its FY14 US$ revenue guidance to 11.5-12% growth, implying healthy 1.4%
QoQ growth for Q4. We continue to like INFO as a demand recovery play, and an
improving macro could drive upgrades. Our IT research team has a BUY rating on
INFO and a Mar15 TP of Rs 3,700.
Our IT research team has a HOLD rating on WPRO (Mar15 TP Rs 550). We believe
the growth recovery is priced into expectations, with limited scope for major
consensus EPS upgrades. WPRO currently trades at 16x FY15E, which appears fair.

HDFC Bank (HDFCB) & Oriental Bank (OBC)
HDFCB is the most consistent private bank while OBC is the best performing PSU
stock in terms of our election analysis. Both have given positive returns in the 3
months prior to each of the last 5 general elections.
Fig 14 - HDFCB and OBCs absolute performance 3m prior to elections
(%) 1996 1998 1999 2004 2009 Average
Oriental Bank 34.4 26.4 1.9 10.6 3.1 15.3
HDFC Bank 11.4 1.1 32.8 3.3 23.0 14.3

We like HDFCB for its strong earnings growth (25% CAGR over FY13-FY15E), robust
asset quality, high profitability (ROE of ~22%) and healthy capital ratios (tier I at
10%). Valuations at 3.1x FY15E BV/15x FY15E EPS post the recent correction are
lower than their long-term average. Our Financials research team rates HDFCB a
BUY with a Mar15 TP of Rs 760.
Although OBCs asset quality is likely to remain under pressure in the backdrop of a
higher restructuring pipeline and elevated slippages, our Financials team maintains
BUY on the stock on attractive valuations (0.35x FY15E BV) with a Mar15 TP
of Rs 230.

the Winners are...

Trading Desk
INDIA | THEMATIC


Crompton (CRG), Siemens (SIEM) & Voltas (VOLT)
Capital Goods stocks seem to perform the best in the pre-election period. The top
performers within the group are CRG, SIEM and VOLT.
CRG is the most consistent stock in the 3 months prior to elections, giving minimum
absolute returns of 20% in each of the last 4 general elections. CRG also
outperformed the market by ~22% in the same period.
SIEM and VOLT have given absolute returns of ~25% and ~13% respectively in the
3 months prior to the last 5 general elections and have outperformed the market by
~13% and ~2% in the same period.
Fig 15 - Top Capital Goods performers 3m prior to elections (absolute perf.)
(%) 1996 1998 1999 2004 2009 Average
Crompton na 34.3 47.2 35.6 20.9 34.5
Siemens 16.0 (17.3) 68.2 18.3 40.9 25.2
Voltas 3.0 23.3 (11.4) 8.6 42.9 13.3

CRGs domestic business is already doing well. Any uptick in domestic
power/industrial capacity addition will further boost the domestic business.
While SIEM enjoys its position in a high-entry-barrier business, higher import content
is its Achilles heel. We dont think elections will impact it directly, but the benefits of
improved business confidence cannot be denied.
The current recovery in VOLTs stock price is mostly linked to an improved outlook for
the international business. However, the domestic project business is facing delays in
project execution.
Our Capital Goods team has a BUY on CRG (Mar15 TP Rs 145), HOLD on SIEM (TP
Rs 560), and BUY on VOLT (TP Rs 135).
Lupin (LPC)
LPC is the best performing Pharma stock in the 3 months prior to the last 5 general
elections. LPC has yielded ~26% average absolute returns (this includes the
underperformance prior to the 1996 elections). It has also outperformed the
market by ~14% in the same period.

Fig 16 - LPCs absolute performance 3m prior to elections
(%) 1996 1998 1999 2004 2009 Average
Lupin (15.2) 9.7 69.7 41.4 22.6 25.6
LPC is one of our top picks within the Pharma space. We expect consensus EPS
upgrades to sustain on low-competition US launches (Niaspan, Yaz, Renagel) and
likely acquisitions, facilitating US brand portfolio/RoW market expansion. Our
Pharma research analyst has a BUY rating with a Dec15 TP of Rs 1,160.
the Winners are...

Trading Desk
INDIA | THEMATIC


Bata (BATA)
Bata is the most consistent Consumer stock in the 3 months prior to the last 5
general elections. Bata has yielded ~11% average absolute returns (this includes the
underperformance prior to the 1999 elections).

Fig 17 - Batas absolute performance 3m prior to elections
(%) 1996 1998 1999 2004 2009 Average
Bata 15.0 13.1 (24.0) 11.8 39.5 11.1

Bata is our top Consumer Discretionary pick. Operating leverage should kick in from
H2CY14/CY15 on a richer product mix/new store traction, and valuations at
26.3x/21.5x CY14E/CY15E earnings are reasonable. Our Consumer analyst rates
Bata a BUY with a Dec14 TP set at Rs 1,160.
Exide (EXID)
If we exclude underperformance prior to the 1998 elections (when peers also fell by
~10%), EXID has yielded ~21% average absolute returns. It has also outperformed
the market by ~9% in the same period.

Fig 18 - Exides absolute performance 3m prior to elections
(%) 1996 1998 1999 2004 2009 Average
Exide 50.5 (11.2) 31.0 13.8 23.2 21.4


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