IEA Report 17th April

IEA Report
17th Apr 2017

BERGEPAINT "BUY" 17th Apr 2017
The implementation of One Rank One Pension (OROP), Seventh Pay Commission, revival of MGNREGA scheme, setting up of smart cities and
strong govt. initiatives on infrastructure development are likely to enhance demand both in rural and urban markets. Governments ambitious plan
``Housing for All by 2022 will be major growth driver for the company. Implementation of GST will boost companys market share going forward.
With the commencement of Assam Plant the company will enjoy a 10 year tax holiday at new plant and will also benefit from VAT exemption for
sales in Assam. Recent MoU with Chugoku Marine Paints of Japan will help to expand companys footprint in industrial paint segment. Thus,
considering strong revival in Urban and rural demand, GST implementation and commencement of Assam Plant, We remain positive on the stock
and recommend "BUY" with the target Price of Rs 267. ............................................................... ( Page : 2-4)
NESTLE "BUY" 13th Apr 2017

Our buy recommendation on NESTLE is based on Maggies market share gain, new product launches and expectation of urban demand recovery
going forward. The companys ROE improved to 31% in CY16 from 20% year ago. We expect ROE to improve further going ahead. Presently we
have positive view on this stock and recommend to `BUY this stock with target price of Rs 7920. ................ ( Page : 5-7)
DHFL "BUY" 12th Apr 2017

DHFL has continuously performed well in its operating parameters with healthy AUM growth and stable assets quality. We expect the AUM growth
of around 20% going forward. Recently huge rate cut by banks has raised the concerns over the margin protection for Housing Finance companies.
However due to strategy of management for efficient liability mix and increasing share of non-core home loan portfolio, we expect DHFL to
maintain its NIM at 3% level. Improving operating efficiency has boosted the bottom line of the company and we expect this trend to continue in
FY18. Also the stake sale deal will further boost the earnings for the company with free from concern of stake dilution for next 2 to 3 years. We
upgrade our target price to Rs 497 (2x FY18E BV) from earlier price of Rs 385. ............................................................... ( Page : 8-11)
BAJAJCORP "BUY" 11th Apr 2017

BAJAJCORPs ROE is improving for Last three year and we expect it to improve further. We expect improvement in companys ROE from 41% (FY16)
to 44%, 43% and 44% in FY17E,FY18E and FY19E respectively with 93% dividend payout. BJAJCORP is presently trading at 26 times of FY19E
expected EPS of Rs 16. Considering High ROE , strong balance sheet ,reasonable dividend yield with amble growth drivers going forward we
maintain `BUY with our previous target of Rs 490. ............................................... ( Page : 12-15)
TVSMOTOR "BOOK PROFIT" 10th Apr 2017

We initiated this stock at Rs.288 for a target price of Rs.365 on 28-Jul-2016, but considering the gradual improvement in the fundamentals of the
company we upgraded our target price from Rs.365 to Rs.465. The stock has achieved our recommended target and the current price reflects that
the stock has discounted all the positives and going ahead we may see some slowdown in demand of scooters and mileage segment motorcycles
for a couple of months due to higher sales of BS-III vehicles. Hence, we advise our investors to 'BOOK PROFIT' at current levels (up by 64% from
our initiating price of Rs.288). ........................................ ( Page : 16-18)
RELIANCE "HOLD" 7th Apr 2017

Jio is rapidly capturing market share by providing attractive offers to its prime members and has also promised to offer 20% more data than any
other rivals. Now Jio is targeting to boost its revenue by retaining its customers. Recently Reliance has rallied smartly and has crossed our target
price of Rs. 1408. We are still optimistic in this stock and hence we recommend HOLD rating for our long-term investors with the revised target
price of Rs. 1680. ........................................ ( Page : 19-22)
KEC "BOOK PROFIT" 6th Apr 2017

Revenue growth for 9MFY17 was subdued due to lower commodity prices and demonetization. But the operating margin continues to remain
accretive during the same period. We expect 5% and 15% revenue growth in FY17E and FY18E respectively based on the strong traction in
Transmission and railway business with strong operating margin. We recommended this stock at Rs. 148 for the target price of Rs. 217 and the
stock have achieved our recommended target price. Fundamentally we remain bullish on the stock based on strong order book position and
improving operating margin but on the valuation front, we are not comfortable at current price level (currently stock is trading at 3.2x of P/B of
FY17). Hence, we advise our investors to Book profits at the current price..................... ( PAGE : 23-27)
Narnolia Securities Ltd IEA Edition No.- 995
INDUSTRY - CHEMICAL
BSE Code - 509480
NSE Code - BERGEPAINT
17-Apr-17 NIFTY - 9151
Comapany Data Key Highlights of the report:

CMP 236
Target Price 267 Despite demonetization and price dip effects, the decorative segment
Previous Target Price registered a double digit volume growth (10%). Many new products were
Upside
launched which witnessed good growth amid demonetisation.
Change from Previous Margins are expected to recover as the company took 3% price hike in
52wk Range H/L 277/174 decorative business with effect from Mar 1, 2017.
Mkt Capital (Rs Cr) 22,925 Recently, the company commences operations at Assam plant. With the
Av. Volume (,000) 745 commencement of Assam Plan tax rate will decline. The company will enjoy a
10 year tax holiday at new plant and will also benefit from VAT exemption for
Share Holding Pattern %
sales in Assam.
4QFY17 3QFY17 2QFY17
Promoters 74.99 74.99 74.99 With the Commencement of Assam Plant and other key benficiaries (Urban
Public 25.01 25.01 25.01 recovery, GDP revival, GST, increased infrastructure spending) We
Others recommend "BUY" on the stock with the target price of Rs 267.
Total 100.0 100.0 100.0
Financials/Valuation FY12 FY13 FY14 FY15 FY16
Net Sales 2,948 3,346 3,870 4,322 4,634
ROE %
EBITDA 303 371 431 511 655
25 EBIT 256 314 361 418 555

26
PAT 180 218 249 265 370
24 23 23
22 EPS (Rs) 5 6 7 4 5
22 21 ROE (%) 23 23 22 21 25
ROCE (%) 15 15 14 14 20
20
BV 98 92 88 85 99
18 P/B (X) 5 7 7 12 12
FY12 FY13 FY14 FY15 FY16 P/E (x) 20 31 32 55 46
Stock Performance % Recent Development :

1Mn 3Mn 1Yr
Absolute 2.1 6.1 30.9 BERGEPAINT commences operations at Assam plant :
Rel.to Nifty 2.1 2.2 15.3 The company has commenced commercial operations of their integrated paint
170 BERGEPAINT NIFTY
and putty plant at Nagaon in Assam. The plant has an annual capacity of
48,000 kilolitres per annum of water based paints and 24 kilolitres of solvent
150
based paints. It would also manufacture 14,000 mt of resin and 24,000 mt of
130 wall putty With this, Company will have two plants in Assam, the other one
110 being at Nalbari.
90
70
BERGEPAINT signs MoU with Chugoku Marine Paints :
The company has entered into an MoU with Chugoku Marine Paints of Japan
50
for cooperation and collaboration in the field of marine and related industrial
Jul-16
Apr-16
Feb-17
Apr-17
Sep-16
Mar-17
Jan-17
Dec-16
Jun-16
Aug-16
Oct-16
May-16
Nov-16
paints. The plan is to establish a joint venture company. The MoU also allows
for joint efforts in marketing, supply, purchasing marine related industrial
BINEETA KUMARI paints.
bineeta.kumari@narnolia.com
Please refer to the Disclaimers at the end of this Report
Narnolia Securities Ltd
Quarterly Performance
Other expenses Financials 3QFY16 4QFY16 1QFY17 2QFY17 3QFY17 YoY % QoQ% FY15 FY16 YoY %
saw one-time Net Sales 1,235 1,139 1,246 1,271 1,297 5% 2% 4,322 4,634 7%
hit, which put Other Income 7 11 10 18 8 9% -56% 36 34 -4%
pressure on
COGS 643 575 621 644 684 6% 6% 2,531 2,573 2%
margins though
will not be Employee Cost 71 69 75 76 80 12% 5% 253 281 11%
impacted going Other Expenses 210 225 227 248 227 8% -8% 1,027 1,125 10%
forward. EBITDA 192 156 195 179 184 -4% 3% 511 655 28%
Depreciation 25 24 26 27 27 7% 0% 93 100 8%
Interest 6 5 3 5 4 -23% -13% 50 29 -42%
PBT 168 138 176 165 160 -5% -3% 404 561 39%
Tax 56 47 59 73 52 -7% -28% 139 191 37%
PAT 112 93 120 137 110 -2% -20% 265 370 40%
Volume Growth Remained Healthy despite challenges.

Net sales grew by 5% YoY to Rs 1297 Cr against Rs 1235 Cr in 3QFY16. Decorative segment show
reasonable growth despite demonetization and price dip.
Volume growth stood in double digits (10%) led by improvement in product mix, strong monsoon, and
new product launch.
Reported PAT for the quarter stood at Rs110 Cr (-2% YoY) against Rs 112 Cr in 3QFY16.
Sales Growth % Volume growth %

12% 11% 16%
11% 14%
14%
10% 14%
10% 9% 12%
12% 11% 10% 10%
8% 10%
10%
6% 6%
6% 5% 8%
6%
4%
4%
2%
2%
0% 0%
1QFY16 2QFY16 3QFY16 4QFY16 1QFY17 2QFY17 3QFY17 1QFY16 2QFY16 3QFY16 4QFY16 1QFY17 2QFY17 3QFY17
Margin Performance
Margin % 3QFY16 4QFY16 1QFY17 2QFY17 3QFY17 YoY(+/-) QoQ(+/-) FY15 FY16 YoY(+/-)
Gross Margin 48% 50% 50% 49% 47% -1% -2% 41% 44% 3%
EBITDA Margin 16% 14% 16% 14% 14% -1% 0% 12% 14% 2%
PAT Margin 9% 8% 10% 11% 8% -1% -2% 6% 8% 2%
Gross margin down 65 bps impacted by increase in input cost while EBITDA margin was down by 137
bps due to high employee costs (12% YoY) and one time hit of other expenses (8% YoY).
To offset the impact of increase in input cost the company have initiated 3% hike in decorative prices.
The impact of rising crude prices was lower in Decorative segment due to increase in no. of share of
water based paint rather than solvent based paint.
PAT margin down by 100bps YoY due to lower gross margin.

EBITDA (Rs/Cr) EBIDTAM % PAT (Rs/Cr) PATM%
250 16% 16% 16% 160 12%
11%
16% 140 10%
9% 10%
200 15% 8%
120 8%
8%
14% 14% 15% 7% 8%
150 100
14% 14%
13% 13% 80 6%
14% 137
195
192
100
184
179
60 112 120
156
110
154
13% 4%
149
89 93
13% 40 77
50
2%
12% 20
- 12% 0 0%
Concall Highlights:
Volume growth stood in double digits (10%).
Expects demand to improve going forward.
Confident of volume growth to in the range of 1.5-1.6x to GDP growth.
Tier 1 and 2 cities were impacted more than tier 3 for the company. Tier 3 was better because
favourable monsoon has started showing results.
Growth will be driven by semi urban and rural markets, expansion of distribution network,
innovations and new product launches.
Both in standalone and JV (joint venture) businesses the company added new clients in auto
segment. More clients are expected to be added in the JV.
Berger signed an MoU with Promat (USD3bn company of Belgium) for co-operation in the field
of fire protection and high performance insulation coating in India, Nepal and Bangladesh,
which entails production, distribution and supply of specialised fire resistant coatings. The
segment is very small in the overall industrial business of the company.
Expects both gross and EBITDA margins to be stable.

FY17 capex guidance of Rs 150Cr.
View & Valuation
The implementation of One Rank One Pension (OROP), Seventh Pay Commission, revival of
MGNREGA scheme, setting up of smart cities and strong govt. initiatives on infrastructure
development are likely to enhance demand both in rural and urban markets. Governments
ambitious plan ``Housing for All by 2022 will be major growth driver for the company.
Implementation of GST will boost companys market share going forward. With the
commencement of Assam Plant the company will enjoy a 10 year tax holiday at new plant
and will also benefit from VAT exemption for sales in Assam. Recent MoU with Chugoku
Marine Paints of Japan will help to expand companys footprint in industrial paint segment.
Thus, considering strong revival in Urban and rural demand, GST implementation and
commencement of Assam Plant, We remain positive on the stock and recommend "BUY"
with the target Price of Rs 267.

Na
BUY
NESTLE INDIA LTD 13th April. 2017
Company Update Smart bounce back by Maggie shows strong brand value:
CMP 6518
Target Price 7920 Nestle came out with bang after Maggie fiasco which shook it two years
ago. Due to Maggie ban, contribution in Revenue from Prepared dishes and
Previous Target Price 7714
cooking aids went down from 29% in CY14 to 16% in CY15, a decline of
Upside 22% 56% YoY. Nestle relaunched Maggie on 9 nov., 2015 and within 53 days of
Change from Previous 3% relaunch , it regained market share of 33% which shows strong brand
power. Presently, Maggies market share has reached to 60% versus peak
market share of 75% which is commendable. It shows new managements
Market Data
aggression and focus towards NESTLEs future growth. Going forward we
BSE Code 500790 expect brand Maggie to consolidate further with more market share gain.
NSE Symbol NESTLEIND
52wk Range H/L 7930/5490 New product launches, the key of future growth:
Mkt Capital (Rs Cr) 62,844 After Maggie fiasco, companys new management has become more
Av. Volume(,000) 31 aggressive in launching new products. The company has launched more
Nifty 9,203 than 25 products in last few quarters. NESTLE has strong backing of its
parent with more than 2000 products globally .Going forward, it has plans to
Stock Performance launch more new products from its parents global product portfolio.
1M 3M 12M According to management, new products are doing well.
Absolute 6.9 11.8 12.0 Historically NESTLE has strong pricing power:
Rel.to Nifty 3.5 0.4 -10.4
As in most the FMCG categories input prices have bottomed out and have
started moving up. Hence going forward we expect growth for FMCG will be
Share Holding Pattern-%
pricing led. NESTLE has strong premium product portfolio and strong
pricing power. Hence going forward we expect strong growth for NESLE.
Promoters 62.8 62.8 62.8
Public 37.2 37.2 37.2
Others - - - Urban demand recovery led growth going forward:
Total 100 100 100
For last four years urban demand is struggling due to higher inflation and
lower economic activities which is one of the causes of companys dismal
Company Vs NIFTY performance. As NESTLEs most of the sales comes from urban areas,
130 NESTLEIND NIFTY approx. 75%, hence any recovery in urban demand will be huge positive for
125 the company. We expect better demand scenario for urban market going
120 ahead led by declining inflation and interest rate scenario.
115
110
105
Rs,Cr
100
95 Financials 4QCY16 3QCY16 (QoQ)-% 4QCY15 (YoY)-%
90 Sales 2286 2363 -3% 1959 17%
85
80 EBITDA 403 447 -10% 353 14%
Net Profit 164 269 -39% 183 -10%
EBITDA% 18% 19% (129 Bps) 18% (37 Bps)
Rajeev Anand PAT% 7% 11% (421 Bps) 9% (216 Bps)
rajeev.anand@narnolia.com
Narnolia Securities Ltd 5
Segmental Revenue (%):
Milk products and nutrition Beverages

Prepared dishes and cooking aids Chocolate and confectionery
120%
100%
16% 16% 15% 14% 14% 14% 12% 13%
80% 16%
23% 25% 27% 28% 28% 29% 29%
60% 16%
18% 16% 14% 14% 13% 14% 13%
40%
55%
20% 43% 43% 44% 44% 45% 43% 45%
0%
2008 2009 2010 2011 2012 2013 2014 2015
EBITDA Margin and NPM:
EBITDA margin% NPM %
25% 23%
22% 22%
21%
19% 19% 19%
20% 18% 18%
15%
15% 13%
12% 12% 12%
11%
10%
9%
10% 7% 7%
5%
0% -3%
-5%
KEY RISKS:
Any sharp increase in milk and other key input prices will be margin dilutive for the company. Delay in
urban demand recovery will be another risk to our recommendation.
View and Valuation
Our buy recommendation on NESTLE is based on Maggies market share gain, new product launches
and expectation of urban demand recovery going forward. The companys ROE improved to 31% in
CY16 from 20% year ago. We expect ROE to improve further going ahead. Presently we have positive
view on this stock and recommend to `BUY this stock with target price of Rs 7920.

Financials Snap Shot
INCOME STATEMENT RATIOS
CY13 CY14 CY15 CY16 CY13 CY14 CY15 CY16
Revenue 9062 9806 8123 9159 EPS 116 123 58 96
Other Income 83 87 110 149 Book Value 246 294 292 313
Total Revenue 9145 9894 8233 9309 DPS 57 74 50 51
COGS 4122 4524 3469 3880 Payout (incl. Div. Tax.) 49% 60% 85% 53%
GPM% 54.5% 53.9% 57.3% 57.6% Valuation(x)
Other Expenses 2218 2410 2147 2410 P/E 46 41 99 68
EBITDA 1968 2057 1555 1807 Price / Book Value 22 17 20 21
EBITDA Margin (%) 21.6% 20.9% 19.0% 19.6% Dividend Yield (%) 1.1% 1.5% 0.9% 0.8%
Depreciation 330 338 347 354 Profitability Ratios
EBIT 1638 1719 1208 1453 RoE 47% 42% 20% 31%
Interest 37 14 3 4 RoCE 46% 60% 43% 48%
PBT 1678 1774 814 1440 Turnover Ratios
Tax 561 590 250 515 Asset Turnover (x) 1.4 1.7 1.3 1.3
Tax Rate (%) 33.4% 33.2% 30.8% 35.8% Debtors (No. of Days) 6 4 3 4
Reported PAT 1117 1185 563 925 Inventory (No. of Days) 36 33 30 31
Dividend Paid 546 713 479 492 Creditors (No. of Days) 23 24 25 27
No. of Shares 10 10 10 10 Net Debt/Equity (x) 0.5 0.0 0.0 0.0
BALANCE SHEET CASH FLOW STATEMENT

CY13 CY14 CY15 CY16 CY13 CY14 CY15 CY16
Share Capital 96 96 96 96 OP/(Loss) before Tax 1,678 1,774 814 1,409
Reserves 2272 2741 2721 2917 Depreciation 330 338 367 354
Net Worth 2369 2837 2818 3014 Direct Taxes Paid (486) (589) (342) (515)
Long term Debt 1189 15 17 33 (Inc)/Dec in Wkg Cap 92 (202) 179 (361)
Short term Debt 0 4 1 0 CF from Op. Activity 1,796 1,644 1,098 1,161
Deferred Tax 53 7 0 0 Non Current investments (224) (4) - (133)
Capital Employed 3558 2853 2835 3047 Capital expenditure (345) (189) (151) (143)
Net Fixed Assets 3664 3421 3129 2918 CF from Inv. Activity (470) (432) (70) (586)
Capital WIP 295 245 0 0 Interest Paid (36) (15) (3) (4)
Debtors 84 99 78 98 Divd Paid (incl Tax) (546) (713) (493) (492)
Cash & Bank Balances 749 446 500 880 CF from Fin. Activity (580) (1,635) (498) (50)
Trade payables 633 729 744 799 Inc/(Dec) in Cash 775 (423) 529 525
Provisions 1407 1602 1862 2293 Add: Opening Balance 591 1,366 943 500
Net Current Assets 955 608 1004 1646 Closing Balance 1,366 446 1,472 1,025
Total Assets 6314 5820 6080 6806

BUY
DEWAN HOUSING FINANCE CORPORATION LTD. 11-Apr-17
Result Update Stake sale in DHFL Pramerica Life Insurance (DPLI) completed.
CMP 393 Stake sale in DHFL Pramerica Life Insurance (DPLI) has been completed at
Target Price 497 the higher valuation range of Rs 2000 Cr. Earlier DHFL entered into an
agreement with its promoter to sell its 100% of share held in DHFL Pramerica
Life Insurance (DPLI) (equivalent to 50% of the paid-up capital of DPLI) to its
Upside 26% wholly owned subsidiary DHFL Investment Ltd (DIL). Investment of DHFL in
Change from Previous 29% DPLI was mere Rs 31 Cr. To fund this transaction, DIL will issue compulsorily
convertible debentures (CCDs) to the promoters entity (Wadhawan Global
Capital). Due to this deal we factor 25% increase in networth. With strong
Market Data
capitalization and focus on affordable segment we expect 20% growth in
BSE Code 511072 AUM going forward.
NSE Symbol
DHFL
52wk Range H/L 395/182
3Q FY17 Result Highlight
Mkt Capital (Rs Cr) 10159
Av. Volume (,000) 281 DHFL posted 3Q FY17 PAT at Rs 244 Cr up 31% YoY owing to better NIMs
Nifty 8898 which improved by 11 bps YoY and was stable QoQ. NII growth was strong
at 21% YoY. Operating expenses were under control and grew by just 9%
YoY. C/I ratio improved to 26.5% against 29.5% a year back. AUM grew by
Stock Performance
19% YoY despite the challenging times during demonetization. Disbursement
1Month 1Year YTD
was muted to 10% growth YoY, however considering demonetization impact
Absolute 14.5 109.6 57.3 we had anticipated it even lower. Assets quality was stable with GNPA at 95
Rel.to Nifty 12.8 87.2 44.3 bps sequentially.
AUM Growth Impressive Despite Demonetization, Assets Quality Stable.

3QFY17 2QFY17 1QFY17 AUM of DHFL grew with healthy rate of 19% YoY despite the demonetization.
Promoters 39.3 39.3 34.9 This strong growth was mainly contributed by project loan which grew by 85%
YoY while Core home loan book grew by 11% YoY. The share of project loan
Public 60.7 60.7 65.1
in total portfolio increased to 12.5% against 8% a year back. Disbursements
Others - - -
grew by 10% YoY in 3Q FY17 despite demonetization. The management
Total 100 100 100 highlighted that the disbursements were down 12% MoM in November 2016
but recovered to pre-demonetization levels in December 2016. Management
Company Vs NIFTY is confident of continuing the same growth level going forward. Assets quality
180
was stable with GNPA at 95 Bps and provision coverage ratio at 101.5%
DHFL NIFTY
170 which resulted in almost nil NNPA.
160
150 Improving Margins and Cost Efficiency.
140
NIM of DHFL improved by 11 bps YoY to 3.06% backed by decline in cost of
130
120 fund by 50 bps. Change in liability mix with reduction in bank rate has
110 supported this decline in cost of fund.
100 Operating Expenses grew by 9% YoY led lower other expenses. Employee
90
80
expenses grew by 18% YoY. Thus the C/I ratio improved to 26.5% against
29.5% a year back. This decline in cost to income ratio has helped the
company to achieve the pre-provisioning profit of 27% YoY. C/I Ratio at
26.5% is still very high from its industry peers, so a lot of scope to improve
DEEPAK KUMAR further.
Deepak.kumar@narnolia.com

DHFL
Concall Highlights
>> Management is confident to protect the NIM going forward.

>> Project loan will continue to grow going forward. Share of project financing is expected to increase to 14-15%
over the next few quarters due to the strong pipeline.
>> Targeting the C/I ratio at 21%.
>> Collection dropped to 12% in the month of November. Collection for December month was as per pre-
demonetization period.
>> Yield on LAP-13.55%-13.75%. Yield on Project loan is 15.45%-16.2%. Yield on SME is >13%.
>> Will not raise equity in 2 to 3 years.
>> Disbursements were up 10% YoY primarily driven by home loans and LAP (up 15% YoY). Disbursements in
project financing were flat-to-marginally-negative on a YoY basis.
>> Not utilized the RBI dispensation scheme.
View & Valuation

DHFL has continuously performed well in its operating parameters with healthy AUM growth and stable assets
quality. We expect the AUM growth of around 20% going forward. Recently huge rate cut by banks has raised the
concerns over the margin protection for Housing Finance companies. However due to strategy of management for
efficient liability mix and increasing share of non-core home loan portfolio, we expect DHFL to maintain its NIM at
3% level. Improving operating efficiency has boosted the bottom line of the company and we expect this trend to
continue in FY18. Also the stake sale deal will further boost the earnings for the company with free from concern of
stake dilution for next 2 to 3 years. We upgrade our target price to Rs 497 (2x FY18E BV) from earlier price of Rs
385.
Quarterly Performance (Rs in Cr)

Financials 3QFY15 4QFY15 1QFY16 2QFY16 3QFY16 4QFY16 1QFY17 2QFY17 3QFY17
Interest Income 1,488 1,541 1,633 1,762 1,845 1,914 1,932 2,122 2,315
NII 355 365 399 405 425 436 456 491 514
Net Total Income 393 407 419 454 466 488 484 536 565
Operating Expense 126 121 126 132 137 155 136 140 150
PPP 267 286 293 322 328 333 348 396 416
Provisions 25 35 32 45 48 50 45 45 45
PBT 242 251 261 277 280 283 303 351 371
Net Profit 160 162 173 180 186 190 201 232 244
Profitability Metrix 3QFY15 4QFY15 1QFY16 2QFY16 3QFY16 4QFY16 1QFY17 2QFY17 3QFY17
Yield% (Cal.) 11.67 11.25 11.18 11.48 11.46 11.30 10.92 11.53 12.06
Cost of Fund% (Cal.) 10.05 9.90 9.69 9.92 9.75 9.77 9.45 9.18 9.29
Spread% (Cal) 2.82 2.57 2.78 2.88 3.05 2.91 2.87 2.35 2.77
NIM% 2.77 2.89 2.96 2.86 2.87 2.96 2.91 3.05 3.07
C/I Ratio 32.18 29.73 29.97 29.03 29.46 31.76 28.11 26.09 26.48
9
DHFL
(Rs in Cr)
Assets Quality 3QFY15 4QFY15 1QFY16 2QFY16 3QFY16 4QFY16 1QFY17 2QFY17 3QFY17
GNPA% 0.77 0.84 0.8 0.81 0.84 0.93 0.98 0.96 0.95
NNPA% 0 0 0 0 0 0 0 0 0
PCR% 108.2 100.2 106.9 111 110.79 101.74 99.3 99.6 101.5
3QFY15 4QFY15 1QFY16 2QFY16 3QFY16 4QFY16 1QFY17 2QFY17 3QFY17

AUM 52,637 56,884 60,002 62,837 65,962 69,524 72,012 75,223 78,296
On- Book 47,776 51,040 53,796 56,312 58,992 61,775 63,647 65,346 68,961
Off- Book 4,861 5,845 6,206 6,525 6,970 7,749 8,365 9,877 9,335
AUM MIX %
Disbursement Growth% YoY
Housing LAP/LRF Project Others
120 35%
32%
30% 31% 31%
100 6 8 9 10 12 13
17 16 16 16 25% 24%
26%
80 16 16 22%
20%
60 18%
15%
14%
76 74 12%
40 72 72 70 69 10% 10%
20 5%
0%
0
2QFY16 3QFY16 4QFY16 1QFY17 2QFY17 3QFY17
NIM% Borrowing Mix %

3.10 Bank Money Market NHB Others
3.05 3.07
3.00
2.96 2.96 100 12 12 14 10 13
2.90 2.89 2.91
2.86 2.87 80
32 33 32 43
2.80 42
2.77 60
2.70 40
53 53 52 44
2.60 42
20
-
3QFY16 4QFY16 1QFY17 2QFY17 3QFY17

DHFL

INCOME STATEMENT (Consolidated) RATIOS
FY13 FY14 FY15 FY16 Spreads Analysis (%) FY13 FY14 FY15 FY16
Interest Income 3,883 4,776 5,839 7,159 Yield on Loan Portfolio % 13.7 13.1 12.9 12.7
Interest Expenses 3,119 3,783 4,460 5,490 Cost Of Borrowing % 10.7 10.6 10.4 9.8
Net Interest Income 764 993 1,380 1,669 Spread % 3.0 2.5 2.5 2.9
Other Income 257 194 142 157 Profitability Ratios (%)
Total Net Income 1,021 1,187 1,522 1,827 NIM % 2.7 2.7 2.9 3.0
Employee Benefits Expense 141 176 196 228 ROA % 1.5 1.3 1.3 1.2
Other Expenses 216 195 252 298 ROE % 14.1 15.5 15.1 15.1
Total Oper. Expenses 365 382 474 550 EPS (Rs) 17.6 20.6 21.3 25.0
Pre Provisioning Profit 656 805 1,048 1,277 Cost to Income Ratio % 35.8 32.2 31.1 30.1
Provisions / Write offs (Net) 45 70 105 175 Asset-Liability Profile
Profit Before Tax 611 735 943 1,102 Loans/Borrowings (X) 1.1 1.0 1.0 1.0
Total Tax 159 206 322 373 Debt/Equity (x) 8.5 9.5 8.7 10.3
Profit After Tax 452 529 621 729 PCR % Specific 113 104 100 102
Gross NPAs (Rs cr) 263 394 473 568
Gross NPAs % 0.7 0.8 0.8 0.9
Net NPAs (Rs cr) 43 93 72 50
CRAR % 19.0 16.5 17.6 17.0
Loan Mix %
BALANCE SHEET Housing Loan 83 78 75 72
FY13 FY14 FY15 FY16 LAP 11 16 18 16
Share Capital 128 128 146 292 Project 6 6 6 10
Reserves 3,109 3,447 4,490 4,725 Others - - 1 2
Net Worth 3,237 3,575 4,636 5,017 Total AUM (Rs in Cr) 36,117 44,822 56,884 69,524
Long term Debt 26,565 32,295 36,889 45,119 Borrowing Mix %
Short term Debt 876 1,595 3,637 6,437 NCD 11 20 28 33
Total Borrowing 27,441 33,890 40,526 51,556 Bank 71 68 58 53
Long Term Provision 264 331 430 583 Others 18 12 14 14
Other Liability 4,862 6,063 9,046 10,697 Resource Mobilization (Rs in Cr)
32,058 39,487 48,921 61,104
Total Liability 35,803 43,859 54,638 67,853
Fixed Assets 438 988 985 781 About the Company
Non-current investments 191 307 611 720 DHFL was founded in 1984 and is promoted by Wadhawan
Current investments 85 269 396 173 Group. Focused on low and medium income group it operates
Loans/Advances 34,222 41,016 51,511 62,295 mainly in tier 1 and tier 2 cities with its presence in 363 cities. It
Cash & Bank Balances 513 983 676 3,408 has total AUM of Rs 783 Billion .
Other Assets 356 297 460 476 Chairman & MD Kapil Wadhawan
Total Assets 35,803 43,859 54,638 67,853 CEO Harsil Mehta
11

BUY
BAJAJ CORP LTD. 11th April. 2017
Company Update GST, a game changer:

CMP 411 GST may be the game changer for the well established FMCG players.
Target Price 490 BAJAJCORP deals in Hair oil and In Hair oil segment approx. 50% of market is
dominated by unorganized players. Going forward we expect BAJAJCORP to gain
market share led by lower price differential with unorganized players. This shift of
Upside 19% market share will happen gradually which will lead to growth for BAJAJCORP for
Change from Previous NA coming 5-7 years.
Strong brand presence and RoE:

Market Data
BSE Code 533229 The Companys flagship brad Bajaj Almond Drop hair oil has strong presence in the
NSE Symbol BAJAJCORP light hair oil market with approx. 60% of market share. In last eight years, it has
continuously gained market share which shows strength of the brand. On the other
52wk Range H/L 438/340
hand, BJAJCORP has one of the best RoE among our horizon companies after
Mkt Capital (Rs Cr) 6,065 HINDUNILVR and COLPAL. We expect improvement in companys RoE from 41%
Av. Volume(,000) 105 (FY16) to 44%,43% and 44% in FY17E,FY18E and FY19E respectively.
Nifty 9,181
Healthy Dividend Yield Gives holding comfort:
Stock Performance
1M 3M 12M The Company is giving dividend regularly and, at the present price, its dividend
Absolute 13.0 10.0 9.3 yield is approx. 2.8% which is positive for long term investment. It gives cash
Rel.to Nifty 10.1 -1.5 -12.4 flows to the investor at regular period and a reason to hold company for long
term.
Robust plan for Exports:
3QFY17 2QFY17 1QFY17 BAJAJCORPs International business grew by 72% YoY in Q3FY17 and
Promoters 66.9 66.9 66.9 contributed more than 5% in this quarter. Company has robust plans for exports
and Planning for entering in larger market Russia, Indonesia and Egypt going
Public 33.1 33.1 33.1
ahead.
Others - - -
Total 100.0 100.0 100.0 Outlook
BAJAJCORPs ROE is improving for Last three year and we expect it to
Company Vs NIFTY improve further. We expect improvement in companys ROE from 41% (FY16) to
125
44%, 43% and 44% in FY17E,FY18E and FY19E respectively with 93% dividend
BAJAJCORP NIFTY
120 payout. BJAJCORP is presently trading at 26 times of FY19E expected EPS of Rs
115 16. Considering High ROE , strong balance sheet ,reasonable dividend yield with
110 amble growth drivers going forward we maintain `BUY with our previous target of
105 Rs 490.
100
Rs,Cr
95
Financials FY15 FY16 FY17E FY18E FY19E
90
85 Sales 826 876 792 780 844
80 EBITDA 239 274 265 242 259
Net Profit 173 196 220 220 235
EPS 12 13 15 15 16
Rajeev Anand ROE 35% 41% 44% 43% 44%
rajeev.anand@narnolia.com
BAJAJCORP
ROE and P/E: Dividend Yield:

35 50% 3.20%
ROE P/E Dividend Yield
2.80%
29 29 2.70%
30 27 27 45%
25
2.20%
25 23 40% 1.73%
1.70% 1.46%
20 35% 1.12%
1.20% 0.99%
0.78%
15 30% 0.65%
0.70%
0.34%
10 25% 0.20%
29% 35% 41% 44% 43% 44%

5 20%
FY14 FY15 FY16 FY17E FY18E FY19E
Q3FY17 Result Concall Highlights
The company has to increase direct reach but it will not cost much.
Due to demonetization, whole sale trade is impacted and there is no sign of it coming back in near term.
Management is looking for acquisition but Target Company is still not in the view.
27% rise in modern trade volume in this quarter. Modern trade contributed 5.2% of the total sales in Q3FY17.
Contribution from rural remained 42.5% in this quarter and in pre demonetization it was 43.6%.
New product launch will happen in 1QFY18.
Announced temporary incentive to channel partners.
Canteen trade reduced by13.5% in this quarter.
The company has reserve of LLP till March 2018. It can go beyond this if volume will remain like that.
LLP prices remained Rs46/kg for this quarter and presently, it is trading at Rs 54/kg.
Volume growth in light hair oil 2.1%
International business grew by 72% YoY in this quarter and contributed more than 5% in this quarter.
Plans for entering in larger market Russia, Indonesia and Egypt is under way.
About The Company
BAJAJ CORP is engaged in the business activity of trading and manufacturing of cosmetics, toiletries and other personal care
products. It is a fast moving consumer goods (FMCG) company. The Company's products include Bajaj Kailash Parbat Thanda Tel,
Bajaj Almond Drops Hair Oil, Bajaj Brahmi Amla Hair Oil, Bajaj Jasmine Hair Oil, Bajaj Nomark Oily Skin Face Wash, Bajaj Nomarks
Herbal Scrub Soap, Bajaj Nomark Oily Skin Cream, Bajaj Nomarks Neem Soap, Bajaj Nomarks Oil Control Soap and others. The
Company has approximately nine Factory, of which four units are situated in Himachal Pradesh , three units are situated in
Uttrakhand for manufacturing of various variants of hair oils and Nomarks and other unit is situated in Guwahati and one unit
Bangladesh.The company reaches consumers through 3.6mn retail outlets serviced by 7707 distributors and 11500 wholesalers.

BAJAJCORP
Almond Drops Hair Oil (ADHO) Volume Gr(%)YOY

8%
6%
ADHO Volume Gr(%)YOY
6%
4%
2%
2%
2% 1%
0%
-2%
-4% -4%
-4%
-6%
Net Sales and PAT (in cr.)

250
Net Sales(in cr) PAT(in cr)

200
150
209
208
204
197
196
100
187
54 52 58 58
47 49
50
0
Prices of Light Liquid Paraffin(LLP) and Refined Oil
110 Light Liquid Paraffin(LLP) price(Rs/Kg) Refined Oil price(Rs/kg)

93.76
90 86.21 83.97
82.02
73.15 75.97
70
59.51 58.82
54.7
50 46.41 43.91 46.37
30
10
-10 1QFY16 2QFY16 3QFY16 4QFY16 1QFY17 3QFY17

BAJAJCORP

FY16 FY17E FY18E FY19E FY16 FY17E FY18E FY19E
Revenue 876 792 780 844 EPS 13.3 14.9 14.9 15.9
Other Income 29 41 33 34 Book Value 32.6 33.7 34.8 36.0
Total Revenue 905 833 813 878 DPS 13.8 13.8 13.8 14.7
GPM 66.0% 65.5% 64.1% 63.8% Valuation(x)
EBITDA 274 265 242 259 Price / Book Value 11.8 12.0 11.6 11.3
EBITDA Margin (%) 31% 33% 31% 31% Dividend Yield (%) 3.0% 2.8% 2.8% 3.0%
EBIT 269 259 236 253 RoE 41% 44% 43% 44%
Interest 0 1 1 1 RoCE 56% 52% 46% 48%
Tax Rate (%) 18% 21% 18% 18% Debtors (No. of Days) 11 12 11 11
No. of Shares 15 15 15 15 Net Debt/Equity (x) 0 0 0 0

FY16 FY17E FY18E FY19E FY16 FY17E FY18E FY19E
Share Capital 15 15 15 15 OP/(Loss) before Tax 297 281 268 286
Net Worth 481 497 513 531 Direct Taxes Paid -53 -61 -48 -52
Long term Debt 0 0 0 0 Oper. Prof. bef. WC change 274 287 275 293
Short term Debt 10 15 15 15 CF from Op. Activity 193 222 232 241
Deferred Tax 1 1 1 1 Capital expenditure -17 -18 -7 -7
Capital Employed 481 497 513 531 CF from Inv. Activity 6 -29 -27 -37
Net Fixed Assets 97 91 92 93 Divd Paid (incl Tax) -204 -204 -204 -217
Capital WIP 1 1 1 1 CF from Fin. Activity -194 -200 -205 -218
Debtors 25 26 23 25 Inc/(Dec) in Cash 5 -7 1 -14
Cash & Bank Balances 58 51 52 37 Add: Opening Balance 4 58 51 52
Trade payables 44 39 39 42 Closing Balance 9 51 52 37
Total Provisions 0 0 0 0
Net Current Assets 340 367 383 399
Total Assets 566 580 595 617

BOOK PROFIT
TVS MOTOR COMPANY LTD 10-Apr-17
Result Update
New launches and bottoming out of exports to drive growth
CMP 472
Target Price NA TVS Motors reported strong volume growth of 9%YoY in FY17. 23%YoY
Previous Target Price growth in the Moped segment during the year led to 11%YoY in two wheelers
segment. Three wheelers segment de-grew by 38%YoY in FY17. Exports
Upside
witnessed a tough time during FY17 because of currency availability issue in
Change from Previous the various African countries where the company has good export exposure.
In March 2017 the company posted 24%YoY growth in the exports which
Market Data suggest that the weakness in the export has bottomed out. The
BSE Code 532343 management is also very auspicious based on the robust pipeline of
launches across all categories in FY18. Scooters and premium segment
NSE Symbol TVSMOTOR motorcycles will drive the higher realization and margins for the company.
52wk Range H/L 474/278 The most awaited concept bike in alliance with BMW will also be launched in
Mkt Capital (Rs Cr) 2017. TVS-BMW alliance will further strengthen company's presence in
22,258
premium bike segment which in turn boost company's margin by the change
Av. Volume 99639 in product mix and give an opportunity to expand it's footprint in foreign
Nifty 9,198 markets.
Stock Performance Result Update

1Month 3Month 1Year TVS Motors 3QFY17 revenues grew by 3% YoY to Rs.2983 crore. The
Absolute 11.6 25.2 49.0 growth came from higher sales of Mopeds during the quarter.
Rel.to Nifty 8.5 12.8 27.1 Gross Margin improved by 30 bps YoY due to soft commodity prices.
EBITDA Margin remained 7.3% same as previous year.
Share Holding Pattern-% Depreciation was higher during the quarter. As per Ind AS amortization of
3QFY17 2QFY17 1QFY17 some tools & dies were accounted in depreciation.
Promoter 57.40 57.40 57.40 PAT margin improved by 20 bps on account of lower tax rate due to higher
Public 42.60 42.60 42.60 R&D expenses.
Others -- -- --
Outlook and Valuation
Total 100.00 100.00 100.00
We initiated this stock at Rs.288 for a target price of Rs.365 on 28-Jul-2016,
Company Vs NIFTY but considering the gradual improvement in the fundamentals of the
150 company we upgraded our target price from Rs.365 to Rs.465. The stock
TVSMOTOR NIFTY
has achieved our recommended target and the current price reflects that
140
the stock has discounted all the positives and going ahead we may see
130 some slowdown in demand of scooters and mileage segment motorcycles
for a couple of months due to higher sales of BS-III vehicles. Hence, we
120
advise our investors to 'BOOK PROFIT' at current levels (up by 64% from
110 our initiating price of Rs.288). Rs. In crore
100
Financials 3QFY17 2QFY17 3QFY16 QoQ YoY
90
Sales 2983 3426 2896 -13% 3%
80 EBITDA 218 277 210 -21% 4%
Jul-16
Sep-16
Feb-17
Jan-17
Dec-16
Jun-16
Aug-16
May-16
Oct-16
Nov-16
Apr-16
Apr-17
Mar-17
Net Profit 133 177 120 -25% 10%

EBIDTA% 7.3% 8.1% 7.3%
Naveen Kumar Dubey PAT % 4.4% 5.2% 4.2%
naveen.dubey@narnolia.com
TVSMOTOR
Investment Arguments
Strong pipeline of new launches- New product launches in scooter and premium segment motorcycle will help company to
achieve its target of 18% markets share by FY18 from currently 15.5%. New premium segment products will also boost the
realization and margins for the company going ahead.
TVS-BMW alliance to deliver synergies- TVS has entered in a contract manufacturing agreement with BMW motorrad with an
investment of Euro 20mn. The project is going as per plan and the first product will be launched in FY17. The strategic alliance will
help TVS to earn higher realization and margins and will provide a platform to both TVS and BMW to showcase their technological
expertise.
Restructuring of Three wheeler business- Three wheelers segment of the company has not been placed well in the domestic
market in comparison to market leader Bajaj Auto. The management is moving towards the non-permit driven markets to increase
the penetration in different parts of the country.
Improvement in Indonesian Subsidiary- Indonesian subsidiary has reported 55% growth in volumes in first half as compared to
previous year. TVS has invested Rs.33 crore in the 3QFY17 and will invest Rs.25 crore in 4QFY17 considering the improvement on
EBITDA level.
Concall Highlights
Management expects double digit growth in FY18.
Capex plan Rs.400 crore in FY17.
BMW project going as per plan and the product will be launched in 2017.
Urban and rural mix are 55% and 45% respectively. Urban sales is higher due to scooterization.
Newly launched Victor monthly run-rate is 20000 units.
Moped segment growth is coming from new model launches and 40% contribution of total sales is from North region.
Management is also looking into non permit driven markets for 3 wheelers.
Exports have been sluggish due to restricted availability of dollars and currency devaluation in some countries.
Market share target 18% in 2 wheelers and 27-28% for 3 wheelers in exports.
25 crore of investment in Indonesian subsidiary in 4QFY17 looking at the growth on 9 month basis.
The Indonesian subsidiary has started showing improvements in topline with 55% growth in 1HFY17 vs HFY16.
Margin guidance of 10 percent by FY18.
Inventory days-28 in 3QFY17 and it will be 30-32 days in 4QFY17.
No big pressure on commodity prices of rising steel price.
The company will review prices in 4QFY17 depending on the commodity price increases.
Tax benefit in Himachal plant will lapse in FY17. It contributes around 10% of total production.
Tax rate would be in the range of 24-25% in FY17.
Plant Detail
Plant Location Capacity Vehicles Manufactured

Nalagarh, Himachal Pradesh 6 Lakhs units Two Wheeler
Mysore, Karnataka 5 Lakhs units Two Wheeler
Hosur, Tamil Nadu 26 Lakhs units Two/Three Wheeler
Key Risks
1. Dollar availability issue in export market

2. Focus on gaining market share can hamper margins in short term

TVSMOTOR

FY14 FY15 FY16 FY17 FY14 FY15 FY16 FY17
Net Revenue 8,384 10,312 11,516 12,769 EPS 3.9 6.9 7.8 7.8
Total Revenue 8,410 10,335 11,555 12,817 DPS 1.6 2.2 2.9 2.9
COGS 5,903 7,311 8,073 9,002 Payout (incl. Div. Tax.) 42% 32% 38% 38%
GPM 30% 29% 30% 30% Valuation(x)
Other Expenses 1,448 1,739 1,942 2,154 P/E 24.8 25.0 30.9 51.4
EBITDA Margin (%) 6% 6% 7% 6% Dividend Yield (%) 2% 1% 1% 1%
EBIT 343 424 541 525 RoE 16% 25% 23% 20%
Interest 80 62 68 59 RoCE 20% 23% 26% 24%
Tax Rate (%) 42% 32% 29% 28% Debtors (No. of Days) 15.4 14.7 15.6 15.6
Reported PAT 186 328 369 370 Inventory (No. of Days) 41.2 50.8 45.8 45.8
Dividend Paid 78 106 139 139 Creditors (No. of Days) 45.0 45.8 51.4 51.4

Reserves 1,113 1,113 1,277 1,535 Depreciation 149 179 216 264
Net Worth 1,161 1,325 1,583 1,814 Direct Taxes Paid (134) (159) (148) (144)
Long term Debt 518 560 509 354 OP before WC 466 591 796 837
Deferred Tax 133 160 185 185 (318) (108) (109) -
Total Capital Employed 1,679 1,885 2,092 2,168 Capex (272) (376) (484) (395)
Net Fixed Assets 1,565 1,730 1,997 2,128 CF from Inv. Activity (235) (415) (583) (395)
Capital WIP 48 93 - - Repayment of Borrowings - - - -
Debtors 353 415 491 545 Interest Paid (47) (46) (68) (59)
Cash & Bank Balances 98 28 54 109 Divd Paid (incl Tax) (69) (84) (139) (139)
Trade payables 1,033 1,295 1,622 1,799 CF from Fin. Activity (252) (96) (337) (305)
Total Provisions 135 162 107 119 Inc/(Dec) in Cash (17) (428) (31) 56
Net Current Assets (66) 192 (23) (30) Add: Opening Balance 77 96 28 54
Total Assets 3,632 4,569 4,922 5,285 Closing Balance 60 (331) (4) 109

BOOK PROFIT
TVS MOTOR COMPANY LTD 10-Apr-17
Result Update
New launches and bottoming out of exports to drive growth
CMP 472
Target Price NA TVS Motors reported strong volume growth of 9%YoY in FY17. 23%YoY
Previous Target Price growth in the Moped segment during the year led to 11%YoY in two wheelers
segment. Three wheelers segment de-grew by 38%YoY in FY17. Exports
Upside
witnessed a tough time during FY17 because of currency availability issue in
Change from Previous the various African countries where the company has good export exposure.
In March 2017 the company posted 24%YoY growth in the exports which
Market Data suggest that the weakness in the export has bottomed out. The
BSE Code 532343 management is also very auspicious based on the robust pipeline of
launches across all categories in FY18. Scooters and premium segment
NSE Symbol TVSMOTOR motorcycles will drive the higher realization and margins for the company.
52wk Range H/L 474/278 The most awaited concept bike in alliance with BMW will also be launched in
Mkt Capital (Rs Cr) 22,258 2017. TVS-BMW alliance will further strengthen company's presence in
premium bike segment which in turn boost company's margin by the change
Av. Volume 99639 in product mix and give an opportunity to expand it's footprint in foreign
Nifty 9,198 markets.
Stock Performance Result Update

1Month 3Month 1Year TVS Motors 3QFY17 revenues grew by 3% YoY to Rs.2983 crore. The
Absolute 11.6 25.2 49.0 growth came from higher sales of Mopeds during the quarter.
Rel.to Nifty 8.5 12.8 27.1 Gross Margin improved by 30 bps YoY due to soft commodity prices.
EBITDA Margin remained 7.3% same as previous year.
Share Holding Pattern-% Depreciation was higher during the quarter. As per Ind AS amortization of
3QFY17 2QFY17 1QFY17 some tools & dies were accounted in depreciation.
Promoter 57.40 57.40 57.40 PAT margin improved by 20 bps on account of lower tax rate due to higher
Public 42.60 42.60 42.60 R&D expenses.
Others -- -- --
Total 100.00 100.00 100.00 Outlook and Valuation
We initiated this stock at Rs.288 for a target price of Rs.365 on 28-Jul-2016,
but considering the gradual improvement in the fundamentals of the
Company Vs NIFTY
company we upgraded our target price from Rs.365 to Rs.465. The stock
150
TVSMOTOR NIFTY has achieved our recommended target and the current price reflects that
140 the stock has discounted all the positives and going ahead we may see
130 some slowdown in demand of scooters and mileage segment motorcycles
for a couple of months due to higher sales of BS-III vehicles. Hence, we
120
advise our investors to 'BOOK PROFIT' at current levels (up by 64% from
110 our initiating price of Rs.288).
Rs. In crore
100 Financials 3QFY17 2QFY17 3QFY16 QoQ YoY
90
Sales 2983 3426 2896 -13% 3%
80 EBITDA 218 277 210 -21% 4%
Jul-16
Sep-16
Feb-17
Jan-17
Dec-16
Jun-16
Aug-16
May-16
Oct-16
Nov-16
Apr-16
Apr-17
Mar-17
Net Profit 133 177 120 -25% 10%

EBIDTA% 7.3% 8.1% 7.3%
Naveen Kumar Dubey PAT % 4.4% 5.2% 4.2%
naveen.dubey@narnolia.com
TVSMOTOR
Investment Arguments
Strong pipeline of new launches- New product launches in scooter and premium segment motorcycle will help company to
achieve its target of 18% markets share by FY18 from currently 15.5%. New premium segment products will also boost the
realization and margins for the company going ahead.
TVS-BMW alliance to deliver synergies- TVS has entered in a contract manufacturing agreement with BMW motorrad with an
investment of Euro 20mn. The project is going as per plan and the first product will be launched in FY17. The strategic alliance will
help TVS to earn higher realization and margins and will provide a platform to both TVS and BMW to showcase their technological
expertise.
Restructuring of Three wheeler business- Three wheelers segment of the company has not been placed well in the domestic
market in comparison to market leader Bajaj Auto. The management is moving towards the non-permit driven markets to increase
the penetration in different parts of the country.
Improvement in Indonesian Subsidiary- Indonesian subsidiary has reported 55% growth in volumes in first half as compared to
previous year. TVS has invested Rs.33 crore in the 3QFY17 and will invest Rs.25 crore in 4QFY17 considering the improvement on
EBITDA level.
Concall Highlights
Management expects double digit growth in FY18.
Capex plan Rs.400 crore in FY17.
BMW project going as per plan and the product will be launched in 2017.
Urban and rural mix are 55% and 45% respectively. Urban sales is higher due to scooterization.
Newly launched Victor monthly run-rate is 20000 units.
Moped segment growth is coming from new model launches and 40% contribution of total sales is from North region.
Management is also looking into non permit driven markets for 3 wheelers.
Exports have been sluggish due to restricted availability of dollars and currency devaluation in some countries.
Market share target 18% in 2 wheelers and 27-28% for 3 wheelers in exports.
25 crore of investment in Indonesian subsidiary in 4QFY17 looking at the growth on 9 month basis.
The Indonesian subsidiary has started showing improvements in topline with 55% growth in 1HFY17 vs HFY16.
Margin guidance of 10 percent by FY18.
Inventory days-28 in 3QFY17 and it will be 30-32 days in 4QFY17.
No big pressure on commodity prices of rising steel price.
The company will review prices in 4QFY17 depending on the commodity price increases.
Tax benefit in Himachal plant will lapse in FY17. It contributes around 10% of total production.
Tax rate would be in the range of 24-25% in FY17.
Plant Detail
Plant Location Capacity Vehicles Manufactured

Nalagarh, Himachal Pradesh 6 Lakhs units Two Wheeler
Mysore, Karnataka 5 Lakhs units Two Wheeler
Hosur, Tamil Nadu 26 Lakhs units Two/Three Wheeler
Key Risks
1. Dollar availability issue in export market

2. Focus on gaining market share can hamper margins in short term

TVSMOTOR

Net Revenue 8,384 10,312 11,516 12,769 EPS 3.9 6.9 7.8 7.8
Total Revenue 8,410 10,335 11,555 12,817 DPS 1.6 2.2 2.9 2.9
COGS 5,903 7,311 8,073 9,002 Payout (incl. Div. Tax.) 42% 32% 38% 38%
Other Expenses 1,448 1,739 1,942 2,154 P/E 24.8 25.0 30.9 51.4
EBIT 343 424 541 525 RoE 16% 25% 23% 20%
Interest 80 62 68 59 RoCE 20% 23% 26% 24%
Tax Rate (%) 42% 32% 29% 28% Debtors (No. of Days) 15.4 14.7 15.6 15.6
Reported PAT 186 328 369 370 Inventory (No. of Days) 41.2 50.8 45.8 45.8
Dividend Paid 78 106 139 139 Creditors (No. of Days) 45.0 45.8 51.4 51.4

Reserves 1,113 1,113 1,277 1,535 Depreciation 149 179 216 264
Net Worth 1,161 1,325 1,583 1,814 Direct Taxes Paid (134) (159) (148) (144)
Long term Debt 518 560 509 354 OP before WC 466 591 796 837
Deferred Tax 133 160 185 185 (318) (108) (109) -
Total Capital Employed 1,679 1,885 2,092 2,168 Capex (272) (376) (484) (395)
Net Fixed Assets 1,565 1,730 1,997 2,128 CF from Inv. Activity (235) (415) (583) (395)
Capital WIP 48 93 - - Repayment of Borrowings - - - -
Debtors 353 415 491 545 Interest Paid (47) (46) (68) (59)
Cash & Bank Balances 98 28 54 109 Divd Paid (incl Tax) (69) (84) (139) (139)
Trade payables 1,033 1,295 1,622 1,799 CF from Fin. Activity (252) (96) (337) (305)
Total Provisions 135 162 107 119 Inc/(Dec) in Cash (17) (428) (31) 56
Net Current Assets (66) 192 (23) (30) Add: Opening Balance 77 96 28 54
Total Assets 3,632 4,569 4,922 5,285 Closing Balance 60 (331) (4) 109

Hold
RELIANCE INDUSTRIES LTD 7-Apr-17
Company Update Recently Reliance Jio has withdrawn Jio summer surprise offer on TRAI's
CMP 1434 advice. Now to avail Jio services users have to opt for subscription plans.
We expect that this move will further boost the revenues from Jio.
Target Price 1680
According to management 72mn customers have already opted for Jio
Previous Target Price 1408 prime membership till 31 March 2017. As per the Jios management
Upside 17% estimates, EBITDA margin for Jio in FY18 will be more than 50%. Recently
Change from Previous 19% Jio has announced booster packages starting from Rs 11 going up to Rs
301 to provide additional data to its users. . On the Petro-chemicals front,
Reliance has commissioned the first phase of new Paraxylene (PX) project
Market Data at Jamnagar in Q3FY17 and with the commissioning of this plant, PX
BSE Code 500325 capacity will be more than double from 2.0 to 4.2 MTPA. Further
NSE Symbol RELIANCE management has guided for re-opening of its 1400 retail outlets, which will
52wk Range H/L boost the revenue of petrochemicals segment.
1448/925
Mkt Capital (Rs Cr) 465956 Outlook
Av. Volume(,000) 677 Jio is rapidly capturing market share by providing attractive offers to its
Nifty 9258 prime members and has also promised to offer 20% more data than any
other rivals. Now Jio is targeting to boost its revenue by retaining its
customers. Recently Reliance has rallied smartly and has crossed our target
Stock Performance price of Rs. 1408. We are still optimistic in this stock and hence we
1M 3M 12M recommend HOLD rating for our long-term investors with the revised
Absolute 8.4 36.9 39.3 target price of Rs. 1680
Rel.to Nifty 4.9 16.8 30.7 Corporate Highlights For The Quarter
Gross Refining Margin (GRM) of USD 10.8/bbl for the quarter
Share Holding Pattern-% In December 2016, RIL commissioned the first phase of new Paraxylene
3QFY17 2QFY17 1QFY17 project at Jamnagar
Promoters 46.5 46.7 46.7 Outstanding debt as on 31st December 2016 was Rs.194,381 cr
Public 53.5 53.3 53.3 compared to Rs. 180388 cr as on 31st March 2016.
Others 0.0 0.0 0.0 The capital expenditure for 3Q FY 17 was Rs. 37,791 crore.
Total 100.0 100.0 100.0 Interest cost was at Rs. 1,209 crore in 3QFY17 as against Rs. 945 crore
in corresponding period of FY16, increase is primarily on account of higher
Company Vs NIFTY average exchange rate for the quarter.
140 RELIANCE NIFTY Reliance has operated 1,151 petroleum retail outlets in the country in
130
3QFY17.
120 Exports from India operations were higher by 4.0% at Rs. 38,038 crore
110 Rs,Cr
Financials 2012 2013 2014 2015 2016
100
90
Sales 358501 397062 434460 375435 276544
EBITDA 34508 33045 34799 37364 44257
80
Net Profit 19724 20879 22493 23566 27630
Jul-16
Sep-16
Jan-17
Dec-16
Jun-16
Aug-16
May-16
Oct-16
Nov-16
Apr-16
Apr-17
Mar-16
Mar-17
EPS 60 65 70 73 85
Aditya Gupta P/E 12.4 12.0 13.4 11.3 12.3
aditya.gupta@narnolia.com
Petrochemical business
3Q FY17 revenue from the Petrochemicals segment increased by 17.8% YoY to Rs. 22,854 crore, primarily due to increase in
prices across polymers and polyester chain.Petrochemicals segment EBIT increased sharply by 25.5% to Rs. 3,301 crore,
supported by favorable product deltas and marginal volume growth.
E&P Business
3Q FY17 revenues for the Oil & Gas segment decreased by 31.0% YoY to Rs. 1,215 crore. The decline in revenue was led by
lower upstream production and lower domestic gas price realization. The unfavorable upstream price environment impacted
segment EBIT which was at Rs. (295) crore, as against Rs. 258 crore in the corresponding period of the previous year. Domestic
production (RIL share) was at 23.1 Bcfe, down 24% YoY. For the accounting quarter, upstream production (RIL Share) in US
Shale business was 41.4 Bcfe, down 19% YoY basis.
Organised Retail:
Revenues for 3Q FY17 grew by 47.2% Y-o-Y to Rs. 8,688 crore from Rs. 5,901 crore. The increase in turnover was led by growth
across all consumption baskets. The business delivered strong PBDIT of Rs. 333 crore in 3Q FY17 as against Rs.237 crore in the
corresponding period of the previous year. During the quarter, Reliance Retail added 111 stores across various store concepts.
Trends crossed a milestone of 300 stores during the quarter. At the end of the quarter, Reliance Retail operated 3,553 stores
across 686 cities with an area of over 13.25 million square feet.
Refining and Marketing:
During 3Q FY17, revenue from the Refining and Marketing segment increased by 7.5% YoY to Rs. 61,693 crore ($ 9.1 billion).
Segment EBIT was at Rs. 6,194 crore, down 4.3% YoY on account of lower volumes and decline in GRMs. GRM for 3Q FY17
stood at $ 10.8/bbl as against $ 11.5/bbl in 3Q FY16. Reliance GRM outperformed Singapore complex margins by $ 4.1/bbl.
Reliance Jamnagar refineries processed 17.8 MMT in 3Q FY17, marginally lower on QoQ. As at the end of the quarter, Reliance
operated 1,151 petroleum retail outlets in the country.
Digital service
During the quarter, Jio announced the launch of the Jio Happy New Year Offer (JNO) effective from 4th December 2016. Under
the JNO, all the Jio subscribers are entitled to certain special benefits, which comprise of Jios Data, Voice, Video and the full
bouquet of Jio applications and content, absolutely free, up to 31st March 2017.Till 31st Dec 2016 there were 72.4 million
subscribers on the network.Jio is the only operator in India to deploy pan-India LTE on a sub-GHz band, in addition to pan-India
1800MHz and 2300MHz spectrum band.
Key Operating Metrics:

3QFY14 4QFY14 1QFY15 2QFY15 3QFY15 4QFY15 1QFY16 2QFY16 3QFY16 4QFY16 1QFY17 2QFY17 3QFY17
GRM($/bbl) 7.6 7.6 7.6 7.6 7.6 7.6 7.6 7.6 7.6 7.6 7.6 7.6 7.6
Singapore GRM 4.3 4.3 4.3 4.3 4.3 4.3 4.3 4.3 4.3 4.3 4.3 4.3 4.3
Premium 3.3 3.3 3.3 3.3 3.3 3.3 3.3 3.3 3.3 3.3 3.3 3.3 3.3
Exchange rate 62 62 62 62 62 62 62 62 62 62 62 62 62
GRM(Rs/bbl) 472 472 472 472 472 472 472 472 472 472 472 472 472
Crude Refined(MT) 17 17 17 17 17 17 17 17 17 17 17 17 17
Crude Oil Price(USD/bbl) 111 111 111 111 111 111 111 111 111 111 111 111 111
Crude Revenue(Rs Cr/MMT) 230,691 230,691 230,691 230,691 230,691 230,691 230,691 230,691 230,691 230,691 230,691 230,691 230,691
Trend of Crude revenue 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0
Refining Business
Refining Revenue 110,045 107,676 96,668 98,081 103,590 81,777 56,442 68,729 60,768 57,385 48,064 56,568 60,527 61,693
Refining EBIT 3,243 3,240 3,962 3,814 3,844 3,267 4,902 5,252 5,461 6,491 6,394 6,593 5,975 6,194
Refining EBIT Margin 3% 3% 4% 4% 4% 4% 9% 8% 9% 11% 13% 12% 10% 10%
Petrochemicals
Petrochemicals Revenue 27,128 27,121 26,541 25,398 26,651 23,001 21,754 20,858 21,239 19,398 20,915 20,718 22,422 22,854
Petrochemicals EBIT 2,381 2,115 2,150 1,863 2,361 2,064 2,003 2,338 2,531 2,639 2,713 2,806 3,417 3,301
Petrochemicals EBIT Margin 9% 8% 8% 7% 9% 9% 9% 11% 12% 14% 13% 14% 15% 14%
Exploration & Production
Oil and Gas Revenue 2,682 2,926 2,798 3,178 3,002 2,841 2,513 2,057 2,067 1,765 1,638 1,340 1,327 1,215
Oil and Gas EBIT 956 607 762 1,042 818 832 489 32 242 90 14 (312) (491) (295)
Oil and Gas EBIT Margin 36% 21% 27% 33% 27% 29% 19% 2% 12% 5% 1% -23% -37% -24%
Retail
Organized Retail Revenue 3,470 3,941 3,653 3,999 4,167 4,686 4,788 4,698 5,091 6,042 5,781 6,666 8,079 8,688
Organized Retail EBIT 70 38 24 81 99 133 104 111 117 147 131 148 162 231
Organized Retail EBIT Margin 2% 1% 1% 2% 2% 3% 2% 2% 2% 2% 2% 2% 2% 3%
Investment Rationale
Massive Capex programme coming onstream: RIL has spent ~70% of the planned USD1850Cr capex (this number was
USD1650Cr earlier) on its four key projects (petcoke gasification, polyester expansion, off-gas cracker and ethane sourcing).
We believe that the three expansion projects: petcoke gasifier, refinery off-gas cracker, and ethane intake facilities will be
fully operational by FY17E.The companys massive capex programme will push future earnings.
Telecom launch in FY18: The commercial launch will give us better visibility on execution, business outlook, and earnings.
About the Company
RIL is the largest private player in the refining, petrochemical and E&P sectors in India.The petrochemicals segment includes
production and marketing operations of petrochemical products which include, polyethylene, polypropylene, polyvinyl chloride, poly
butadiene rubber, polyester yarn, polyester fibre, purified terephthalic acid, paraxylene, ethylene glycol, olefins, aromatics, linear
alkyl benzene, butadiene, acrylonitrile, caustic soda and polyethylene terephthalate. The refining segment includes production and
marketing operations of the petroleum products. The oil and gas segment includes exploration, development and production of
crude oil and natural gas. RIL has made significant investments in US shale gas. In terms of EBIT, Refining contribute 60% and
Petrochemicals 30%. RIL is also expanding its presence in the areas of consumer retailing and telecom.

Revenue (Net of Excise Duty)
397062 434460 375435 276544 EPS 65 70 73 85
Other Income 7867 9001 8613 7612 Book Value 564 615 675 752
Total Revenue 404929 443461 384048 284156 DPS 9 10 10 12
EBIT 21813 23598 25817 31341 RoE 11% 11% 11% 11%
Interest 3463 3836 3316 3608 RoCE 9% 8% 8% 8%
Tax Rate (%) 20% 22% 24% 23% Debtors (No. of Days) 9 8 5 6

Reserves and surplus 179094 195730 215539 240695 Depreciation 13393 11201 11547 12916
Shareholders' funds 182030 198670 218482 243643 Direct Taxes Paid 4824 6213 6435 8264
Long term Debt 70960 101016 120777 142000 Operating profit before WCchanges
34373 38444 38994 52000
Total Borrowings 89322 133808 148742 165954 CF from Op. Activity 36918 43261 34374 104743
Non Current liabilities 12119 13025 23619 31439 Movement in Loans& Advances -2610 -426 -232 1917
Long term provisions 531 290 1554 1869 Capex -30726 -60087 -63364 -101199
Short term Provisions 4557 4446 5392 1636 CF from Inv. Activity -27650 -73070 -64898 -99282
Current liabilities 77912 82364 110588 161916 Repayment of LTB 19182 28215 29413 21223
Total liabilities 362357 428843 504486 606214 Interest Paid -4626 -5619 -6149 -3316
Net Fixed Assets 183439 232911 318523 419722 Divd Paid (incl Tax) -2949 -3123 -3268 -3790.92
Non Current Investments 13979 26867 25437 37005 CF from Fin. Activity 408 13713 8444 10105.1
Current investments 28869 33735 51014 39928 Inc/(Dec) in Cash 9676 -16096 -22080 15566.1
Current assets 155914 151069 136577 126587 Add: Opening Balance 40780 50456 34552 12545
Total Assets 362357 428843 504486 606214 Closing Balance 50456 34360 12472 28111.1
Please refer to the Disclaimers at the end of this Report.

BOOK PROFIT
KEC International 5-Apr-17
Result Update Recent Development:-

CMP 219
Target Price NA KEC has received Rs. 1781 Cr worth of Orders in Transmission and cable on
Previous Target Price 4th April 2017. KEC has secured 1270 Cr transmission orders from
Upside international market (Middle East, Africa, Sri Lanka and Americas), Rs. 432
Change from Previous Cr from India market and Rs. 79 Cr of order for EHV cable supply.
Companys efforts on growing in EPC business in Brazil is clearly paying off.
In last one month, KEC has received orders worth of Rs.2494 Cr from
Market Data
international market which has strengthened the international order book.
BSE Code 532714 Current order book stands at Rs.11628 Cr which implies strong revenue
NSE Symbol KEC visibilities of 1.26x of TTM revenue with improving operating margin.
52wk Range H/L 222/111 Fundamentally we remain bullish on the stock but valuation is little stretched.
Mkt Capital (Rs Cr) 5,639
Av. Volume 259102
Healthy Order Book:-
Nifty 9265
Current order book stands at Rs. 11175 Cr i.e. 1.3x of the trailing twelve
Stock Performance months revenue with Rs. 3800 Cr of orders in L1 position. Order intake
1Month 3 Month 1Year during the 9 months stood at Rs. 8634 Cr, up by 26% YoY. Management
Absolute 31.4 57.2 72.4 expects healthy orders from SEBs and railways which will provide robust
revenue visibility going ahead. Currently, SEA plant (Brazil) is running at
Rel.to Nifty 27.8 43.9 53.0
100% capacity utilization with 2 years orders in hand.

Operating Margin continues to be strong:-
Promoters 51% 51% 51% EBITDA margin in Q3FY17 has improved by 135 bps YoY to 9.3%. The
Public 49% 49% 49% Improvement in EBITDA margin was attributable to strong performance by
Others 0% 0% 0% SAE (500 bps up YoY), railway business (negative in Q3FY16) and cable
Total 100% 100% 100% business (negative in Q3FY16). Management is working on cost front in
cable business to improve margin and we expect margin improvement in
railway business as the revenue increase. Management has guided 9%
Company Vs NIFTY EBITDA margin in FY17 and improves further in FY18. KEC has bring down
180 KEC NIFTY account receivables days from 246 days in FY16 to 218 days at the end of
160 the Q3FY17 and we anticipate it to improve further based on retention money
140 release from Saudi project which result into improvement in bottom line going
120 forward.
100
In Rs. Cr.
80
Financials Q3FY17 Q2FY17 Q3FY16 YoY % QoQ %
60
Sales 1965 2121 2101 -7% -7%
40
EBITDA 182 185 167 9% -2%
Net Profit* 47 72 23 102% -35%
EBIDTA% 9.3% 8.7% 8.0% 130 bps 60 bps
Sandip Jabuani PAT 3.2% 3.1% 1.2% 200 bps 10 bps
sandip.jabuani@narnolia.com * Net profit is excluding other comprehensive income

Railway :- Potential Revenue growth driver
Management has cut down the revenue growth to 5% in FY17. But maintain the railway top line guidance of 450-500 Cr in FY17
and Rs.1000 Cr for the FY18E based on the huge opportunity in railway electrification project. Railway Ministry has set target to
award 2000 Km, 4000 Km and 6000 km of overhead electrification orders in FY17, FY18 and FY19 respectively. In railways, KEC
commands 20% market share, which may translate into approx.2400 Cr of expected new orders in FY18E. Railway ministrys focus
on execution helps contractor to execute project smoothly and timely. We expect improvement in EBITDA margin based on
incremental volume and speedy execution.
Result Highlights of Q3FY17
Net sales de grew by the 6.5% YoY to Rs. 1965 Cr in Q3FY17 as compared to Rs. 2101 Cr in Q3FY16
EBITDA margin has improved by 135 bsp to Rs. 182 Cr as against Rs 167 Cr on account of 10% plus margin in T&D and
improved performance of railway and SAE business.
KEC has reported 102% YoY growth in PAT with 200 bps improvement on back of higher EBITDA
During the quarter KEC has secured Rs.2706 Cr of new orders in Q3FY17 (up by 20% YoY) and Rs. 8634 Cr in 9 months of
FY17, which is up by 26% YoY
Order book as on 31st December stands at Rs.11175 Cr, ie. 1.3x of TTM revenue.
Managment / Concall Update
Demonetization, delay in conversation of L1 orders into firm order and land acquisition issue at Jammu and Kashmir project led
to de growth in revenue
Management has guided 5% and 10-15% revenue growth in FY17 and FY18 respectively.
EBITDA margin in FY17 will be 9% and it will improve further in FY18
EBITDA margin of SAE tower was 8-9% in Q3FY17
Faced some serious issue in logistic in November and December month due to demonization but now situation is under control.
Losses in Cable segment has come down significantly on YoY
Revenue loss of 50-60 Cr due to demonization
Maintain revenue guidance in railway segment of Rs. 450-500 Cr and Rs.1000 cr in FY18
Interest cost as % of sales will be 2.7% in FY18
Significant improvement in solar business from next year as the KEC is in L1 position of large project. EBITDA margin is slightly
below than normal margin but cash generating on PBT level
Expect to bring down AR collection days to 180 from 218 days based on the release of retention money from Saudi projects
Land acquisition issue at Jammu and Kashmir project has been resolved
Expect more orders from SEBs compare to PGCIL
Outlook and Valuation:-

Revenue growth for 9MFY17 was subdued due to lower commodity prices and demonetization. But the operating margin continues
to remain accretive during the same period. We expect 5% and 15% revenue growth in FY17E and FY18E respectively based on
the strong traction in Transmission and railway business with strong operating margin. We recommended this stock at Rs. 148 for
the target price of Rs. 217 and the stock have achieved our recommended target price. Fundamentally we remain bullish on the
stock based on strong order book position and improving operating margin but on the valuation front, we are not
comfortable at current price level (currently stock is trading at 3.2x of P/B of FY17). Hence, we advise our investors to
Book profits at the current price.

Quartely Performance 2QFY15 3QFY15 4QFY15 1QFY16 2QFY16 3QFY16 4QFY16 1QFY17 2QFY17 3QFY17 YoY% QoQ%
Net Sales 2,140 2,021 2,491 1,903 1,998 2,076 2,530 1,763 2,098 1,935 -7% -8%
Other Operating Income 33 32 30 20 23 25 29 22 23 30 19% 27%
Net Sales 2,173 2,053 2,521 1,923 2,021 2,101 2,559 1,785 2,121 1,965 -7% -7%
Change in Invenotry 16 41 76 (13) (1) (39) 74 (49) 8 (11)
RM Cost 1,276 1,053 1,243 900 1,025 924 1,282 870 1,014 854 -8% -16%
COGS 1,292 1,094 1,318 887 1,024 885 1,356 821 1,022 843 -5% -18%
Employee Expenses 149 145 144 158 161 155 168 173 187 186 19% -1%
Other Expenses 225 225 275 203 260 243 279 215 238 243 0% 2%
Erection & Subcontracting 386 485 599 489 421 609 533 390 441 459 -25% 4%
Excise Duty 45 41 36 47 52 27% 11%
Total Expenditure 2,052 1,949 2,336 1,782 1,866 1,934 2,336 1,635 1,936 1,783 -8% -8%
EBITDA 121 105 185 141 155 167 223 150 185 182 9% -2%
Depreciation 22 23 22 29 21 31 22 29 31 30 -5% -4%
EBIT 99 82 162 112 134 136 201 121 154 152 12% -2%
Intreset 91 81 71 71 68 69 71 72 60 58 -16% -2%
PBT 9 136 100 44 69 69 132 54 100 101 46% 0%
Tax (12) 70 37 27 25 43 52 23 35 38 -11% 8%
PAT 20 66 63 17 44 26 80 31 65 63 139% -4%
Margin Profile YoY (+/-) QoQ (+/-)

Gross Margin 40.5% 46.7% 47.7% 53.9% 49.3% 57.0% 47.0% 54.0% 51.8% 57.1% 10 530
EBIDTA 5.6% 5.1% 7.3% 7.3% 7.7% 7.8% 8.7% 8.4% 8.7% 9.3% 150 60
EBIT 4.5% 4.0% 6.4% 5.8% 6.6% 6.7% 7.9% 6.8% 7.3% 7.7% 100 40
PAT 0.9% 3.2% 2.5% 0.9% 2.2% 1.8% 3.1% 1.7% 3.1% 3.2% 140 10
Order Book 2QFY15 3QFY15 4QFY15 1QFY16 2QFY16 3QFY16 4QFY16 1QFY17 2QFY17 3QFY17 YoY% QoQ%
Transmission 7,356 6,921 7,131 7,903 7,207 7,028 7,087 7,334 7,442 8,054 15% 8%
SAE 931 876 951 948 1,086 937 1,134 1,769 1,510 1,342 43% -11%
Cables 279 263 570 632 592 469 472 104 216 224 -52% 4%
Railways 279 263 475 738 691 562 567 936 1,186 1,342 139% 13%
Water 466 438 380 316 - 281 189 208 216 112 -60% -48%
Solar 9 9 - - 296 75 38 52 183 101 34% -45%
Total 9,320 8,770 9,508 10,537 9,872 9,351 9,487 10,403 10,753 11,175 20% 4%
Order Intake
Transmission 583 1,478 1,909 2,375 1,024 1,595 1,370 1,469 1,738 1,651 4% -5%
SAE 231 485 421 123 181 247 206 678 465 298 20% -36%
Cables 253 412 393 309 181 270 206 198 279 244 -10% -13%
Railways - 48 84 278 90 90 56 424 528 460 412% -13%
Water - - - - - - - - - -
Solar 11 5 3 - 30 45 38 57 93 54 20% -42%
Total 1,078 2,428 2,811 3,085 1,506 2,246 1,877 2,825 3,103 2,706 20% -13%
28

Segment Revenue 2QFY15 3QFY15 4QFY15 1QFY16 2QFY163QFY16 4QFY16 1QFY17 2QFY17 3QFY17 YoY% QoQ%
Transmission-Rest 1,692 1,531 1,976 1,355 #### 1,557 1,887 1,184 1,529 1,273 -18% -17%
Transmission SAE 184 214 222 187 201 177 266 255 261 227 28% -13%
Total Transmission 1,876 1,745 2,198 1,542 #### 1,734 2,153 1,439 1,790 1,500 -13% -16%
Cables 237 254 217 259 262 230 292 245 228 278 21% 22%
Railway 29 22 58 45 34 81 50 70 66 105 30% 59%
Water 30 32 38 32 21 13 37 18 19 20 54% 5%
Solar 9 0 - 40 52 14 26 59 48% 127%
Total 2,172 2,053 2,520 1,878 #### 2,098 2,584 1,786 2,129 1,962 -6% -8%
Order Book Order Intake
Order Book Book to bill Order Intake Growth YoY%

12,000 2.00 10000 0.3
1.80 9000
10,000 0.25
1.60 8000
8,000 1.40 7000 0.2
1.20 6000 0.15
6,000 1.00 5000
0.80 4000 0.1
4,000 0.60 3000 0.05
2,000 0.40 2000
0.20 0
1000
- - 0 -0.05
FY12 FY13 FY14 FY15 FY16 Till FY12 FY13 FY14 FY15 FY16 Till
Q3FY17 Q3FY17
Strong Growth in Railway Segment :- Margin Trend :-
Railway Order Book Growth YoY%

EBITDA M % PAT M %
1,600 160%
1342 140% 10%
1,400
1,186 120% 9%
1,200 8%
100%
1,000 936 7%
80%
800 738 691 60% 6%
562 567 40% 5%
600 475
20% 4%
400 279 263 3%
0%
200 2%
-20%
1%
- -40%
0%
2QFY15 3QFY15 4QFY15 1QFY16 2QFY16 3QFY16 4QFY16 1QFY17 2QFY17 3QFY17
2QFY15 3QFY15 4QFY15 1QFY16 2QFY16 3QFY16 4QFY16 1QFY17 2QFY17 3QFY17

About the Company :-
KEC International Limited is an India-based company, engaged in infrastructure engineering, procurement and construction (EPC).
The Company is also a manufacturer of power cables and telecom cables in India. The Company operates in four business
verticals, which include power transmission and distribution, cables, railways and water. The Company is also a provider of turnkey
solution in the railway infrastructure EPC space. The Company has powered infrastructure development across 50 countries in
developed, developing and emerging economies of South Asia, the Middle East, Africa, Central Asia, the United States and South
East Asia. The Company has eight manufacturing facilities for lattice towers, monopoles, hardware and cables.
Power Transmission
Cabels Railways Water
& Distribution
Transmission Lines Substations Power Cabels

Civil & Track Work Water Resource
LT/HT/EHV
Managment
Lattice Distribution Platforms &
Network Telecom Cabel : Buildings
Towers/Poles
Optical Fiber and Water & Waste
Telecom/Tower/ Jelly filled Signalings Water Treatment
Hardware EPC/OPGE
Electrification
Supply EPC
Manufacturing Facilities
Tower Manufacturing
India, Brazil and Vadodara (Gujarat)
Mexico Mysore (Karnataka)
(SAE Annual Silvassa (Union
production capacity Territory)
100000 MTs)

FY14 FY15 FY16 FY17E FY14 FY15 FY16 FY17E
Revenue 7902 8468 8516 8943 EPS 2.6 6.3 7.4 11.5
Total Revenue 7916 8614 8527 8954 DPS 0.6 0.7 2.2 3.4
EBITDA 493 512 679 760 Payout (incl. Div. Tax.) 23% 11% 30% 30%
EBITDA Margin (%) 6% 6% 8% 9% Valuation(x)
Depreciation 71 88 88 84 P/E 26.0 12.8 16.4 16.0
EBIT 423 424 592 676 Price / Book Value 1.5 1.5 2.1 2.8
Interest 263 309 277 274 Dividend Yield (%) 0.87% 0.88% 1.82% 1.86%
PBT 173 261 325 412 Profitability Ratios
Tax 88 100 133 144 RoE 6% 12% 13% 17%
Tax Rate (%) 1 0 0 0 RoCE 24% 20% 28% 31%
Reported PAT 67 161 192 268 Turnover Ratios
Dividend Paid 15 18 57 80 Asset Turnover (x) 1.1 1.1 1.0 1.1
No. of Shares 26 26 26 26 Debtors (No. of Days) 176 166 193 193
Inventory (No. of Days) 45 38 38 38
Creditors (No. of Days) 148 143 126 126
Net Debt/Equity (x) 0.51 0.55 0.40 0.35
BALANCE SHEET CASH FLOW

FY14 FY15 FY16 FY17E FY14 FY15 FY16 FY17E
Net Worth 1192 1330 1512 1700 Direct Taxes Paid 113 122 135 144
Long term Debt 603 737 602 602 Op. before WC Change 499 596 853 770
Short term Debt 1207 1308 1723 1723 CF from Op. Activity (9) 153 (51) 478
Deferred Tax 73 70 66 66 Capex 161 90 78 0
Total Capital Employed 1794 2067 2114 2302 CF from Inv. Activity (136) 125 18 0
Net Fixed Assets 992 881 860 860 Repayment of LTB 305 640 264 0
Capital WIP 18 16 12 0 Interest Paid 263 309 277 274
Debtors 3808 3853 4495 4729 Divd Paid (incl Tax) 15 17 58 80
Cash & Bank Balances 144 206 111 0 CF from Fin. Activity 132 (216) (63) (354)
Trade payables 3213 3325 2939 3087 Inc/(Dec) in Cash (14) 62 (96) 124
Total Provisions 125 122 114 114 Add: Opening Balance 146 132 194 111
Net Current Assets 1374 1668 2151 2187 Closing Balance 132 194 98 235
Total Assets 7411 7745 8138 8322

201 | 2nd Floor | Marble Arch Building | 236B-AJC Bose Road |
Kolkata-700 020 , Ph : 033-40501500
email: narnolia@narnolia.com, website
: www.narnolia.com
Risk Disclosure & Disclaimer: This report/message is for the personal information of
the authorized recipient and does not construe to be any investment, legal or taxation
advice to you. Narnolia Securities Ltd. (Hereinafter referred as NSL) is not soliciting any
action based upon it. This report/message is not for public distribution and has been
furnished to you solely for your information and should not be reproduced or
redistributed to any other person in any from. The report/message is based upon publicly
available information, findings of our research wing East wind & information that we
consider reliable, but we do not represent that it is accurate or complete and we do not
provide any express or implied warranty of any kind, and also these are subject to change
without notice. The recipients of this report should rely on their own investigations,
should use their own judgment for taking any investment decisions keeping in mind that
past performance is not necessarily a guide to future performance & that the the value of
any investment or income are subject to market and other risks. Further it will be safe to
assume that NSL and /or its Group or associate Companies, their Directors, affiliates
and/or employees may have interests/ positions, financial or otherwise, individually or
otherwise in the recommended/mentioned securities/mutual funds/ model funds and
other investment products which may be added or disposed including & other mentioned
in this report/message.

IEA Report 17th April

Uploaded by

Copyright:

Available Formats

You might also like

IEA Report 17th April

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

IEA Report 17th April

Uploaded by

Copyright:

Available Formats

IEA Report

17th Apr 2017

NESTLE "BUY" 13th Apr 2017

DHFL "BUY" 12th Apr 2017

BAJAJCORP "BUY" 11th Apr 2017

TVSMOTOR "BOOK PROFIT" 10th Apr 2017

RELIANCE "HOLD" 7th Apr 2017

KEC "BOOK PROFIT" 6th Apr 2017

Comapany Data Key Highlights of the report:

25 EBIT 256 314 361 418 555

Stock Performance % Recent Development :

Volume Growth Remained Healthy despite challenges.

Sales Growth % Volume growth %

Please refer to the Disclaimers at the end of this Report

Expects both gross and EBITDA margins to be stable.

View & Valuation

Please refer to the Disclaimers at the end of this Report

Milk products and nutrition Beverages

EBITDA Margin and NPM:

EBITDA margin% NPM %

View and Valuation

Narnolia Securities Ltd 6

Please refer to the Disclaimers at the end of this Report

BALANCE SHEET CASH FLOW STATEMENT

Narnolia Securities Ltd 7

Please refer to the Disclaimers at the end of this Report

AUM Growth Impressive Despite Demonetization, Assets Quality Stable.

Narnolia Securities Ltd 8

>> Management is confident to protect the NIM going forward.

View & Valuation

Quarterly Performance (Rs in Cr)

3QFY15 4QFY15 1QFY16 2QFY16 3QFY16 4QFY16 1QFY17 2QFY17 3QFY17

NIM% Borrowing Mix %

Narnolia Securities Ltd 10

Please refer to the Disclaimers at the end of this Report

Financials Snap Shot

Please refer to the Disclaimers at the end of this Report

Company Update GST, a game changer:

Strong brand presence and RoE:

ROE and P/E: Dividend Yield:

29% 35% 41% 44% 43% 44%

Q3FY17 Result Concall Highlights

About The Company

Narnolia Securities Ltd 13

Please refer to the Disclaimers at the end of this Report

Almond Drops Hair Oil (ADHO) Volume Gr(%)YOY

Net Sales and PAT (in cr.)

Net Sales(in cr) PAT(in cr)

Prices of Light Liquid Paraffin(LLP) and Refined Oil

110 Light Liquid Paraffin(LLP) price(Rs/Kg) Refined Oil price(Rs/kg)

-10 1QFY16 2QFY16 3QFY16 4QFY16 1QFY17 3QFY17

Narnolia Securities Ltd 14

Please refer to the Disclaimers at the end of this Report

Financials Snap Shot

BALANCE SHEET CASH FLOW STATEMENT

Narnolia Securities Ltd 15

Please refer to the Disclaimers at the end of this Report

Stock Performance Result Update