09august 2017 India Daily

INDIA DAILY
August 9, 2017 India 8-Aug 1-day 1-mo 3-mo

Sensex 32,014 (0.8) 2.1 7.0
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Contents Global/Regional indices

Dow Jones 22,085 (0.1) 3.1 5.3
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Results FTSE 7,543 0.1 2.6 2.7
Nikkei 19,751 (1.2) (0.9) (0.5)
IOCL: Margin clarification takes the sheen away
Hang Seng 27,855 0.6 9.9 11.9
Dalmia Bharat: Scaling new peaks KOSPI 2,379 (0.6) (0.0) 3.8
Muthoot Finance: Growth muted, profitability improves Value traded India

Cash (NSE+BSE) 354 319 295
Jindal Steel and Power: Steel earnings weak, power improves Derivatives (NSE) 7,260 2,557 3,010
Brigade Enterprises: An eventful quarter, but weak on sales Deri. open interest 3,573 3,067 3,104
TeamLease Services: 1QFY18 below estimates, but some clarity on IT benefits

Forex/money market
Company alerts Change, basis points
Zee Entertainment Enterprises: NDR takeaways 8-Aug 1-day 1-mo 3-mo
Rs/US$ 63.8 3 (70) (93)
10yr govt bond, % 6.9 1 (13) (40)
Net investment (US$ mn)
7-Aug MTD CYTD
FIIs (26) (209) 8,686
MFs 217 444 7,915
Top movers
Change, %
Best performers 8-Aug 1-day 1-mo 3-mo
JPA IN Equity 26.2 (9.5) 18.6 100.0
TATA IN Equity 616.5 2.7 11.4 42.2
UT IN Equity 8.1 (8.5) 3.2 40.0
AL IN Equity 112.1 0.8 7.9 35.2
UNSP IN Equity 2548.2 (1.0) (2.8) 34.3
Worst performers
HDIL IN Equity 56.4 (18.6) (33.8) (42.0)
IDBI IN Equity 55.8 (2.4) (1.1) (32.0)
RCOM IN Equity 22.9 (4.2) 0.4 (29.5)
BHEL IN Equity 134.7 (3.1) (0.3) (23.9)
GNP IN Equity 668.3 (3.0) 0.5 (22.4)
Kotak Institutional Equities Research

kotak.research@kotak.com . Mumbai: +91-22-4336-0000
For Private Circulation Only. FOR IMPORTANT INFORMATION ABOUT KOTAK SECURITIES RATING SYSTEM AND OTHER DISCLOSURES.
REFER TO THE END OF THIS MATERIAL.
REDUCE
IOCL (IOCL)
Energy AUGUST 09, 2017
RESULT
Coverage view: Attractive
Margin clarification takes the sheen away. IOCLs clarification on refining margins Price (`): 413
implied 1QFY18 results were weaker than what was understood earlier. It also explains Target price (`): 435
the deviation in implicit refining performance during quarters of large inventory
BSE-30: 32,014
fluctuation for IOCL (and perhaps for HPCL). We marginally tweak estimates and retain
REDUCE with TP of `435. We will wait for better entry points, given near-term
overhang of GST-related stranded taxes and our concerns on marketing profitability.
C o mpan y d ata an d valuatio n summary
Indian Oil Corporation
Stock data Forecasts/Valuations 2017 2018E 2019E
52-week range (Rs) (high,low) 451-266 EPS (Rs) 54.6 37.5 40.6
Market Cap. (Rs bn) 2,006.7 EPS growth (%) 156.6 (31.3) 8.1
Shareholding pattern (%) P/E (X) 7.6 11.0 10.2
Promoters 57.3 Sales (Rs bn) 3,598.7 4,011.8 4,648.8
FIIs 5.4 Net profits (Rs bn) 258.7 177.8 192.2
MFs 3.4 EBITDA (Rs bn) 403.8 336.2 362.0
Price performance (%) 1M 3M 12M EV/EBITDA (X) 5.2 6.3 5.8
Absolute 8.1 (3.6) 41.9 ROE (%) 27.5 16.9 16.5
Rel. to BSE-30 5.9 (9.8) 24.9 Div. Yield (%) 4.6 3.5 3.4
Apt disclosure of margins moderates 1QFY18 outperformance for IOCL (maybe for HPCL too)
IOCLs normalized net income of `42 bn in 1QFY18 looks more reasonable compared to our
estimate of `39 bn, based on the managements clarification that the normalized refining
margins were US$6.4/bbl instead of US$7.7/bbl implied by disclosed inventory loss of `28 bn.
The company revisited its calculations to adjust the incidental impact from periodic revision in
refinery-transfer price (fortnightly or monthly) as compared to daily change in crude/product
prices, which benefits the OMCs in declining price environment (and vice versa). This explains
the sharp deviation in underlying refining performance for IOCL (and perhaps for HPCL, as
highlighted in our recent note) during quarters of large inventory fluctuation.
Other takeawaysentry tax liability of `82 bn, Paradip improvement, GST impact of `40-50 bn
IOCLs payable entry tax liability has reduced to `82 bn from `132 bn, as it settled provisional
amount of ~`50 bn with Haryana government for `22 bn, while writing back `28 bn in P&L.
Paradip refinery achieved refining margins of US$5.4/bbl, which is expected to improve
further fully by 3QFY18. The operating performance showed improvement with (1) higher
utilization at 88% versus 82.7% in 4QFY17, (2) increase in distillate yield to 79.9% from
77.8% in the previous quarter and (3) decline in fuel and loss to 11.6% from 12.9% earlier.
The off-take pipeline was fully commissioned and refinery achieved 105% utilization in July.
IOCL (and other OMCs) continue to seek set-off mechanism from the government for GST-
related stranded taxes of `40-50 bn; OMCs are yet to pass it on to the end-consumers.
Debt declined sharply to `349 bn as of June 30, 2017 from `548 bn as of end-FY2017,
reflecting (1) normalization of provisions related to advance taxes and duties, paid towards
end of the fiscal year, (2) reduction in working capital requirement due to lower crude prices,
(3) subsidy receipts from the government and (4) likely lower cash capex in 1QFY18. Tarun Lakhotia
tarun.lakhotia@kotak.com
The company has guided to a higher capital expenditure of `200 bn in FY2018 including Mumbai: +91-22-4336-0875
(1) `45 bn on refining, (2) `60 bn on marketing, (3) `19 bn on pipeline, (4) `12 bn on
Akshay Bhor
petchem and (5) `30 bn on E&P projects including potential acquisitions. akshay.bhor@kotak.com
Fine-tune estimates Mumbai: +91-22-4336-0876
We revise EPS estimates to `38.1 (-2%) in FY2018 and `41.1 (-1%) in FY2019 to factor in
(1) 1QFY17 performance, (2) revised exchange rate assumptions and (3) other minor changes.
Our SoTP-based TP remains unchanged at `435 on 6.5X EV/EBITDA plus the value of
investments.

kotak.research@kotak.com
Mumbai: +91-22-4336-0000
For Private Circulation Only. FOR IMPORTANT INFORMATION ABOUT KOTAK SECURITIES RATING SYSTEM AND OTHER DISCLOSURES, REFER TO THE END OF THIS MATERIAL.
IOCL Energy
Exhibit 1: OMCs refining margins has been at a sharp deviation to benchmark in most of the quarters with large inventory fluctuation
Refining margins, inventory movement and Singapore complex, 1QFY16 onwards (US$/bbl)
1QFY16 2QFY16 3QFY16 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 1QFY18 Average
HPCL
Reported refining margins 8.6 2.7 7.9 7.5 6.8 3.2 6.4 8.0 5.9 6.3
Adventitious gains/(loss) 1.8 (3.5) (3.5) (0.5) 3.3 (1.0) 2.5 (0.5) (3.0) (0.5)
Normalized refining margins (a) 6.7 6.2 11.4 8.0 3.6 4.2 3.9 8.5 8.8 6.8
Reuters Singapore complex 8.1 6.2 8.1 7.8 5.1 5.1 6.7 6.4 6.4 6.7
HPCL's premium over Singapore (1.3) 0.1 3.4 0.2 (1.6) (0.9) (2.9) 2.1 2.4 0.2
IOCL
Reported refining margins 10.8 0.9 6.0 3.0 10.0 4.3 7.7 9.0 4.3 6.2
Adventitious gains/(loss) 5.1 (6.0) (5.0) (3.1) 6.4 0.0 2.6 2.0 (3.4) 0.2
Normalized refining margins (a) (b) 5.7 6.9 11.0 6.1 3.6 4.3 5.1 6.9 7.7 6.4
Reuters Singapore complex 8.1 6.2 8.1 7.8 5.1 5.1 6.7 6.4 6.4 6.7
IOCL's premium over Singapore (2.4) 0.8 2.9 (1.7) (1.6) (0.8) (1.6) 0.5 1.3 (0.4)
Notes:
(a) We have computed normalized margins based on disclosed inventory fluctuation.
(b) IOCL disclosed normalized refining margins of US$6.4/bbl for 1QFY18.
Source: Company, Kotak Institutional Equities
Exhibit 2: Normalized profitability above estimates driven by higher refining margins

Calculation of normalized profitability (Rs bn)
FY2016 1QFY17 2QFY17 3QFY17 4QFY17 FY2017 1QFY18 1QFY18E

Gross contribution 578.0 223.8 140.4 192.4 206.6 763.0 176.1 150.2
Operating expenses (374.5) (87.0) (82.7) (113.0) (162.6) (445.2) (96.1) (95.9)
Reported EBITDA 203.5 136.8 57.7 79.5 44.1 317.8 80.0 54.2
Add: net under-recovery
Add: forex-related loss 14.1 3.3 (2.5) 3.1 (3.9)
Add: one-off provision/charges 7.1 19.7 66.2 86.0 (28.1)
Add: adventitious loss/(gain) 97.6 (74.8) 6.9 (30.5) (26.3) (124.8) 29.8 21.4
Normalized EBITDA 322.2 65.4 62.0 71.8 80.1 279.0 81.8 75.6
Other income 23.0 4.7 8.5 7.9 9.5 31.0 6.2 7.3
Finance cost 31.0 6.8 6.1 10.0 11.5 34.5 7.2 7.8
Depreciation 49.4 14.4 15.0 15.5 17.3 62.2 17.2 16.7
Normalized PBT 264.8 48.9 49.4 54.3 60.7 213.3 63.5 58.4
Normalized tax 90.0 16.6 16.8 18.5 20.7 72.5 21.6 19.9
Reported net income 109.2 82.7 31.2 39.9 37.2 191.1 45.5 26.2
Normalized net income 174.8 32.3 32.6 35.8 40.1 140.8 41.9 38.5
Normalized EPS (Rs) 36.9 6.8 6.9 7.6 8.5 29.7 8.8 8.1
Normalized refining margins (US$/bbl) 7.5 3.6 4.3 5.1 6.9 5.0 6.4 6.0
KOTAK INSTITUTIONAL EQUITIES RESEARCH 3

Energy IOCL
Exhibit 3: Sequential improvement in performance across segments, except petchem

Segment-wise contribution, March fiscal year-ends, 2016-18YTD (Rs bn)
FY2016 1QFY17 2QFY17 3QFY17 4QFY17 FY2017 1QFY18

Contribution (EBITDA + other income)
Refining
Reported 57.0 60.4 15.0 24.1 33.3 132.8 44.2
Add: one-off provision 19.7 25.6 45.3 (28.1)
Less: adventitious gain/(loss) (64.6) 52.6 0.5 20.9 17.2 91.1 (17.5)
Normalized 121.6 7.8 14.6 22.9 41.7 86.9 33.6
Marketing
Reported 50.9 41.0 11.6 34.4 (15.9) 71.1 9.1
Add: one-off provision 40.7 40.7
Less: adventitious gain/(loss) (30.7) 23.8 (7.3) 9.6 9.2 35.2 (12.4)
Normalized 81.6 17.2 18.9 24.8 15.6 76.5 21.4
Pipelines 59.3 16.1 15.5 15.2 14.6 61.3 15.9
Petchem 60.9 20.3 18.3 17.0 20.3 75.9 18.2
Others (2.0) 3.8 5.9 (3.2) 12.4 18.9 4.9
Reported EBITDA + other income 226.1 141.5 66.3 87.4 64.7 359.9 92.3
Forex gain/(loss) (14.1) (3.3) 2.5 (3.1) 15.0 11.1 6.1
Normalized EBITDA + other income 335.4 68.5 70.6 79.8 89.6 308.4 87.9
Operational performance
Crude throughput (mn tons) 56.7 16.1 15.6 16.4 17.1 65.2 17.5
Domestic sales (mn tons) 77.1 20.4 18.5 20.1 19.6 78.6 20.7
Export sales (mn tons) 3.6 1.0 1.2 1.2 1.5 4.8 1.8
Pipelines throughput (mn tons) 79.8 21.4 21.0 20.2 19.8 82.5 21.4
Refining margin (US$/bbl) 5.1 10.0 4.3 7.7 9.0 7.8 4.3
Underlying refining margin (US$/bbl) 7.5 3.6 4.3 5.1 6.9 5.0 6.4
Implied refining cost (US$/bbl) 3.0 2.6 2.4 2.3 1.9 2.3 2.4
Implied marketing EBITDA (Rs/ton) 1,011 804 959 1,164 740 916 953
4 KOTAK INSTITUTIONAL EQUITIES RESEARCH

IOCL Energy
Exhibit 4: Interim results of IOCL, March fiscal year-ends (Rs mn)
(% chg.) yoy
1QFY18 1QFY18E 1QFY17 4QFY17 1QFY18E 1QFY17 4QFY17 FY2018E FY2017 (% chg.)
Net sales 1,026,262 983,481 860,807 1,003,375 4.3 19.2 2.3 4,011,824 3,598,732 11.5
Total expenditure (974,347) (929,243) (723,972) (893,059) 4.9 34.6 9.1 (3,675,624) (3,194,960) 15.0
Increase/(Decrease) in stocks (67,193) 52,569 88,543 152,598
Purchase of products/crude for resale (354,973) (391,080) (357,385) (415,031) (9.2) (0.7) (14.5) (1,408,743) (1,419,255) (0.7)
Consumption of raw materials (456,080) (442,238) (332,193) (470,242) 3.1 37.3 (3.0) (1,894,898) (1,569,103) 20.8
Staff cost (24,141) (25,116) (17,716) (25,812) (3.9) 36.3 (6.5) (98,455) (80,371) 22.5
Other expenditure (71,960) (70,808) (69,247) (70,517) 1.6 3.9 2.0 (273,528) (278,829) (1.9)
EBITDA 51,915 54,239 136,835 110,316 (4.3) (62.1) (52.9) 336,200 403,772 (16.7)
Other income 12,276 8,291 4,703 20,593 48.1 161.0 (40.4) 33,433 42,086 (20.6)
Finance cost (7,180) (7,831) (6,800) (11,541) (8.3) 5.6 (37.8) (31,473) (34,454) (8.7)
Depreciation (17,213) (16,744) (14,350) (17,290) 2.8 20.0 (0.4) (68,872) (62,230) 10.7
Pretax profits 39,798 37,955 120,388 102,079 4.9 (66.9) (61.0) 269,287 349,174 (22.9)
Prior-period/extraordinary income 28,081 (66,230) 28,081 (85,961)
Current tax (13,762) (11,766) (24,753) (14,401) (81,364) (74,603)
Deferred tax (8,631) (12,945) 15,758 (19,711) 2,455
Net income 45,485 26,189 82,690 37,206 73.7 (45.0) 22.3 196,292 191,064 2.7
Adjusted net income 26,668 26,189 82,690 80,918 1.8 (67.7) (67.0) 177,756 253,463 (29.9)
Adjusted EPS (Rs) 5.6 5.5 17.4 17.1 37.5 53.5
Other comprehensive income (29,750) 3,607 (9,875) 48,675
Total comprehensive income 15,735 86,297 27,331 239,739
Tax rate (%) 33.0 31.0 31.3 (3.8) 27.4
Key data
Crude throughput (mn tons) 17.5 17.8 16.1 17.1 (1.6) 8.8 2.5 70.5 65.2 8.1
Domestic sales (mn tons) 20.7 21.0 20.4 19.6 (1.4) 1.6 5.6 79.8 78.6 1.5
Export sales (mn tons) 1.8 1.0 1.5 84.0 21.5 4.7 4.8 (2.7)
Petchem sales (mn tons) 0.6 0.6 0.7 (4.4) (12.8) 2.6 2.6 0.1
Pipelines throughput (mn tons) 21.4 21.4 19.8 (0.4) 7.6 84.6 82.5 2.5
Refining margin (US$/bbl) 4.3 4.5 10.0 9.0 6.7 7.8
Adventitious gain/(loss) -products (12,360) (8,829) 23,790 9,160 35,210
Adventitious gain/(loss) -refining (28,060) (12,572) 51,000 17,170 89,560
Net over-recovery/(under-recovery)
Exchange gain/(loss) 6,120 968 (3,320) 15,010 11,090
Contribution (EBITDA + other income)
Refining 44,240 60,360 33,320 (26.7) 32.8 117,905 132,760 (11.2)
Marketing 9,080 40,970 (15,880) (77.8) (157.2) 85,049 71,050 19.7
Pipelines 15,900 16,060 14,550 (1.0) 9.3 65,631 61,280 7.1
Petchem 18,190 20,320 20,310 (10.5) (10.4) 67,615 75,900 (10.9)
Others 4,860 3,820 12,380 27.2 (60.7) 33,433 18,910 76.8
Total 92,270 141,530 64,680 (34.8) 42.7 369,633 359,900 2.7
Source: Company, Kotak Institutional Equities Estimates
Exhibit 5: Paradip refinery utilization and distillate yield improved further

Refinery performance, 1QFY17 onwards
1QFY17 2QFY17 3QFY17 4QFY17 1QFY18

Refinery operations (including Paradip)
Throughput (mn tons) 16.1 15.6 16.4 17.1 17.5
Capacity utilization (%) 93.3 89.7 93.9 100.1 101.6
Distillate yield (%) 78.9 77.3 80.3 78.7 78.6
Fuel and loss (%) 9.5 9.5 9.5 9.3 9.0
Refinery operations (excluding Paradip)
Fuel and loss (%) 8.5 8.5 8.5 8.5 8.4
Paradip refinery
Fuel and loss (%) 21.9 18.3 15.3 12.9 11.6
Reported refining margins (US$/bbl) NA (1.0) 3.5 7.3 4.1

Energy IOCL
Exhibit 6: IOCL continue to lose market share in diesel

Growth in diesel consumption versus IOCL's sales, 1QFY15 onwards (%)
(%)
14 Growth in diesel consumption Growth in IOCL's diesel sales
12
10
(2)
(4)
(6)
(8)
1QFY15
4QFY15
3QFY16
1QFY17
2QFY17
4QFY17
1QFY18
2QFY15
3QFY15
1QFY16
2QFY16
4QFY16
3QFY17
Source: Company, PPAC, Kotak Institutional Equities
Exhibit 7: IOCL continues to lose market share in gasoline

Growth in gasoline consumption versus IOCL's sales, 1QFY15 onwards (%)
(%)
18 Growth in gasoline consumption Growth in IOCL's gasoline sales
16
14
12
10
0
1QFY15
4QFY15
3QFY16
1QFY17
2QFY17
4QFY17
1QFY18
2QFY15
3QFY15
1QFY16
2QFY16
4QFY16
3QFY17
Source: Company, PPAC, Kotak Institutional Equities

IOCL Energy
Exhibit 8: We assume robust refining margins and steady marketing margins

Key assumptions of IOCL, March fiscal year-ends, 2012-20E
2012 2013 2014 2015 2016 2017 2018E 2019E 2020E
Key assumptions (IOC standalone)
Exchange rate (Rs/US$) 47.9 54.4 60.5 61.2 65.4 67.1 65.3 67.5 69.0
Effective tariff protection (%) 1.9 2.3 2.3 2.3 2.0 2.1 2.0 2.0 2.0
Crude throughput (mn tons) 55.6 54.7 53.1 53.6 57.2 65.2 70.5 72.0 72.0
Net refining margin (US$/bbl) 3.6 3.2 4.2 0.3 5.1 7.8 6.7 7.0 7.0
Sales volume (mn tons) 69.9 70.4 68.8 70.3 74.4 75.9 77.8 80.8 84.2
Marketing margin on auto fuels (Rs/liter) 1.9 1.8 1.9 2.0 2.0
Subsidy under-recoveries (Rs mn) (22,584) (10,335) (10,826) (12,005) (91)
Source: Company, Kotak Institutional Equities estimates
Exhibit 9: Earnings sensitivity of IOC (standalone) to refining margins and marketing margins (Rs mn)
Fiscal 2018E Fiscal 2019E

Downside Base case Upside Downside Base case Upside
Refining margins
Refining margins (US$/bbl) 5.7 6.7 7.7 6.0 7.0 8.0
Net profits (Rs mn) 155,515 177,756 199,998 168,706 192,203 215,699
EPS (Rs) 32.8 37.5 42.2 35.6 40.6 45.5
% upside/(downside) (12.5) 12.5 (12.2) 12.2
Marketing margins
Auto fuels margins (Rs/liter) 1.4 1.9 2.4 1.4 2.0 2.5
Net profits (Rs mn) 157,917 177,756 197,596 170,924 192,203 213,481
EPS (Rs) 33.3 37.5 41.7 36.1 40.6 45.0
% upside/(downside) (11.2) 11.2 (11.1) 11.1
Exhibit 10: We compute fair value of Rs435 for IOCL

Fair valuation of IOCL, March 2019E (Rs/share)
EV/EBITDA based valuation

Downstream business (Rs bn)
March 2019E standalone EBITDA 362
EV/EBITDA (X) 6.5
EV of refining and marketing business (Rs bn) 2,353
EV of refining and marketing business (Rs) (A) 496
Investments (Rs bn)
ONGC 150
CPCL 31
Petronet LNG 35
GAIL India 14
Oil India 8
Value of investments (Rs bn) 239
Value of investments (Rs) (B) 50
Net debt, including tax liabilities (Rs bn) 523
Net debt, including tax liabilities (Rs) (C) 110
Total equity value (A) + (B) - (C) 436
Current stock price 413

Potential upside (%) 6

Energy IOCL
Exhibit 11: Consolidated profit model, balance sheet, cash model of IOCL, March fiscal year-ends, 2012-20E (Rs mn)
2012 2013 2014 2015 2016 2017 2018E 2019E 2020E

Profit model (Rs mn)
Net sales 4,345,086 4,470,964 4,732,101 4,375,261 3,471,764 3,598,732 4,011,824 4,648,810 5,120,972
EBITDA 188,448 128,593 162,880 100,099 225,830 423,251 350,003 376,187 388,926
Other income 32,627 35,385 34,446 41,808 23,588 42,389 33,683 34,725 35,754
Interest (58,399) (68,779) (56,524) (38,390) (33,992) (29,913) (34,994) (35,790) (34,229)
Depreciation (52,332) (55,755) (61,497) (47,548) (50,842) (65,016) (71,636) (75,803) (80,128)
Pretax profits 110,343 39,444 79,306 55,968 164,583 370,711 277,056 299,319 310,324
Extraordinary items (77,078) 17,468 16,681 13,643 (93,231) 28,081
Current tax (8,944) (3,719) (28,029) (12,630) (37,647) (77,956) (82,359) (82,194) (86,062)
Deferred tax 10,612 (3,399) (998) (7,559) (18,364) 2,455 (21,357) (19,544) (19,417)
Net profits 40,164 32,383 67,152 52,340 122,215 201,362 201,421 197,581 204,845
Adjusted net profits after minority interests 80,071 40,898 56,388 40,483 108,141 264,262 180,413 194,989 202,249
Adjusted earnings per share (Rs) 16.5 8.4 11.6 8.3 22.3 55.8 38.1 41.1 42.7
Balance sheet (Rs mn)

Total equity 611,605 626,413 672,052 691,157 909,217 1,015,332 1,132,782 1,248,085 1,367,594
Deferred tax liability 58,798 62,198 63,196 67,202 68,590 68,162 89,519 109,063 128,480
Total borrowings 791,196 867,398 918,172 606,441 564,407 603,576 657,951 646,326 610,701
Currrent liabilities 781,578 819,862 1,005,047 938,148 760,775 1,004,925 834,895 897,035 936,296
Total liabilities and equity 2,243,178 2,375,871 2,658,467 2,302,948 2,302,988 2,691,995 2,715,146 2,900,508 3,043,070
Cash 3,456 5,442 26,546 1,518 5,518 1,034 1,651 1,348 1,714
Current assets 1,194,077 1,259,157 1,386,185 992,932 749,516 980,262 912,062 1,004,982 1,062,183
Total fixed assets 863,717 929,410 1,014,640 1,074,342 1,181,091 1,252,627 1,340,860 1,431,107 1,513,601
Investments 181,928 181,861 231,097 234,156 366,863 458,072 460,572 463,072 465,572
Total assets 2,243,178 2,375,871 2,658,467 2,302,948 2,302,988 2,691,995 2,715,146 2,900,508 3,043,070
Free cash flow (Rs mn)

Operating cash flow, excl. working capital 54,233 54,632 113,893 56,818 182,394 326,645 254,473 251,034 261,091
Working capital changes (129,527) (27,738) 51,750 350,039 32,124 (77,704) (101,831) (30,780) (17,940)
Capital expenditure (166,297) (121,452) (151,548) (116,658) (151,324) (151,177) (153,612) (158,880) (155,079)
Investments 4,278 5,568 (64,573) (2,869) (16,163) (46,035) (2,500) (2,500) (2,500)
Other Income 20,578 21,338 19,290 18,434 22,704 29,220 33,683 34,725 35,754
Free cash flow (216,735) (67,652) (31,188) 305,765 69,735 80,949 30,213 93,599 121,326
Ratios (%)
Debt/equity 118.0 126.0 124.9 80.0 57.7 55.7 53.8 47.6 40.8
Net debt/equity 117.5 125.2 121.3 79.8 57.2 55.6 53.7 47.5 40.7
RoAE 12.4 6.1 8.0 5.5 12.6 26.0 15.9 15.3 14.4
RoACE 13.2 5.9 5.9 4.5 9.4 18.1 11.5 11.4 11.1
Key assumptions (IOC standalone)

Crude throughput (mn tons) 55.6 54.7 53.1 53.6 57.2 65.2 70.5 72.0 72.0
Effective tariff protection (%) 1.9 2.3 2.3 2.3 2.0 2.1 2.0 2.0 2.0
Net refining margin (US$/bbl) 3.6 3.2 4.2 0.3 5.0 7.8 6.7 7.0 7.0
Sales volume (mn tons) 69.9 70.4 68.8 70.3 74.4 75.9 77.8 80.8 84.2
Marketing margin on auto fuels (Rs/liter) 1.9 1.8 1.9 2.0 2.0
Subsidy under-recoveries (Rs mn) (22,584) (10,335) (10,826) (12,005) (91)
Adventitious gain/(loss) (Rs mn) 37,770 4,980 7,800 (22,220) (30,710) 35,210

ADD
Dalmia Bharat (DBEL)
Cement AUGUST 09, 2017
RESULT
Coverage view: Cautious
Scaling new peaks. Dalmia Bharat continued to report industry leading profitability Price (`): 2,642
`1,395/ton in 1QFY18 marked a new peak for the company, aided by strong Target price (`): 2,780
realizations despite moderate volume growth (+6% yoy) and incremental cost
BSE-30: 32,014
pressures. Valuations at 8X EV/EBITDA on FY2019E earnings are at a marked discount
to peers of equivalent size, even as the benefits of higher operating and financial
leverage will yield higher-than-industry earnings growth. Maintain ADD rating with a
revised target price of `2,780/share (from `2,700/share previously).
Dalmia Bharat
52-week range (Rs) (high,low) 2,784-1,186 EPS (Rs) 38.8 109.4 151.7
Market Cap. (Rs bn) 235.8 EPS growth (%) 80.7 181.9 38.6
Promoters 57.8 Sales (Rs bn) 74.0 89.7 104.6
MFs 4.1 EBITDA (Rs bn) 19.0 26.9 32.6
Absolute 3.2 17.2 83.3 ROE (%) 7.8 16.9 18.8
Rel. to BSE-30 0.2 8.4 59.4 Div. Yield (%) 0.1 0.1 0.1
Earnings strong, volume growth moderates
Dalmia Bharat reported consolidated revenues of `20.6 bn (+17% yoy, -6% qoq), EBITDA of
`5.6 bn (+12% yoy, +1% qoq) and net-income of `1.6 bn (+74% yoy, -11% qoq), against our
estimate of `20.8 bn, `5.6 bn and `1.7 bn. EBITDA/ton increased 15% qoq to `1,395/ton
(+6% yoy) aided by improved realizationsblended realizations increased 10% yoy to
`5,160/ton (+7% qoq). Cost (per ton) increased 12% yoy to `3,760 (+5% qoq) led by higher
fuel costs due to increase in pet-coke prices. Cement volumes increased 6% yoy to 4 mn tons
(-12% qoq) on generally weak industry offtakethe management highlighted that volume
growth for the industry in their markets increased 4% yoy.
De-leveraging playing out, creates room for new opportunities
Dalmia earned cash profit of `4.2 bn in the quarter (`3.4 bn in 1QFY17) which helped lower
net-debt to `46 bn in June 2017 from `52.4 bn in March 2017. The leverage ratio now stands
at net debt-to-EBITDA of 2.4X. Debt repayment during the quarter was `3.3 bn and over `11
bn over the past 12 months. We note that the management has traditionally maintained that
new opportunities can be looked at once net debt-to-EBITDA is reduced to below 2X and
utilization of extant capacities ramps-up reasonably.
Maintain ADD rating with a revised target price of `2,780/share Murtuza Arsiwalla
murtuza.arsiwalla@kotak.com
We maintain our positive stance on Dalmia Bharat with a revised target price of `2,780/share Mumbai: +91-22-4336-0870
(from `2,700/share) based on June 2019 earnings. Improving capacity utilization and
Abhishek Poddar
comforting leverage ratios will continue to help reduce the valuation gap between Dalmia abhishek.poddar@kotak.com
Bharat and peers of equivalent size. Potential acquisitions of the assets of a north-based player Mumbai: +91-22-4336-0861
such as Binani Cement will give the company a more diversified presence. We note that the
Samrat Verma
management categorically refused to comment on specific assets, but maintained that it will samrat.verma@kotak.com
evaluate all opportunities in the market place. Mumbai: +91-22-4336-0869

Mumbai: +91-22-4336-0000
Cement Dalmia Bharat
Exhibit 1: Dalmia Bharat reported 12% yoy increase in EBITDA led by 6% yoy growth in volumes
Quarterly results for Dalmia Bharat Ltd, March fiscal year-ends, 2017 - 2018E (Rs mn)
Change (%)
1QFY18 1QFY18E 1QFY17 4QFY17 1QFY18E 1QFY17 4QFY17 2018E 2017 (% chg)
Net sales 20,589 20,782 17,654 21,850 (1) 17 (6) 89,748 74,044 21
Raw materials (3,151) (3,459) (3,371) (4,220) (13,910) (12,916)
Employee costs (1,646) (1,656) (1,533) (1,375) (6,581) (6,092)
Power costs (3,229) (3,098) (2,018) (3,165) (12,615) (9,792)
Freight costs (3,735) (3,794) (3,175) (4,112) (15,513) (13,435)
O ther costs (3,261) (3,091) (2,595) (3,463) (14,238) (12,790)
EBITDA 5,566 5,684 4,963 5,517 (2) 12 1 26,891 19,019 41
EBITDA (%) 27.0 27.4 28.1 25.2 30.0 25.7
O ther income 700 722 887 715 3,436 2,988
Interest (2,117) (2,018) (2,412) (1,998) (8,124) (8,900)
Depreciation (1,532) (1,524) (1,338) (1,509) (6,445) (6,027)
PBT 2,617 2,864 2,100 2,724 15,759 7,080
Current tax (569) (859) (750) (807) (5,358) (2,657)
Deferred tax (52) (161) 241 630 (105)
PAT 1,996 2,005 1,189 2,159 (0) 68 (8) 11,031 4,318 155
Share of profit of associates
Minority interest 357 271 250 319 1,313 870
Net profit after minority 1,639 1,734 940 1,841 (5) 74 (11) 9,719 3,448 182
Extraordinaries -
Reported PAT 1,639 1,734 940 1,841 9,719 3,448
EPS (Rs/share) 18.5 19.5 10.6 20.7 109.4 38.8
Effective tax rate (%) 24 30 43 21 30 39
Operational parameters
Consolidated
Cement volumes (mn tons) 4.0 4.1 3.8 4.6 (3) 6 (12) 17.0 15.3 11
Blended realization (Rs/ton) 5,160 5,200 4,695 4,802 (1) 10 7 5,279 4,839 9
Blended EBITDA/ton (Rs) 1,395 1,378 1,320 1,212 1 6 15 1,582 1,243 27
OCL India
Cement volumes (mn tons) 1.6 1.6 1.5 1.6 1 3 (3) 6.0 5.6 6
Blended realization (Rs/ton) 5,228 5,470 4,574 5,316 (4) 14 (2) 5,450 5,190 5
Blended EBITDA/ton (Rs) 1,271 1,436 1,144 1,223 (11) 11 4 1,450 1,203 20
Dalmia ex-OCL
Cement volumes (mn tons) 2.4 2.6 2.2 2.9 (6) 8 (17) 11.0 9.7 14
Blended realization (Rs/ton) 5,115 4,774 4,779 4,513 7 7 13 5,187 4,636 12
Blended EBITDA/ton (Rs) 1,477 1,343 1,442 1,206 10 2 22 1,653 1,266 31
Other highlights from 1QFY18 results

Moderated volume growth, lower clinker sales impact dispatches. Dalmia reported
growth in cement volumes for 1QFY18 at 6% yoy to 4 mn tons, lower than the double-
digit volume growth reported by the company in preceding periods. We highlight that
while the company maintained ahead-of-industry growth rates, the moderation reflects
(1) overall industry weakness especially in the markets of Tamil Nadu that were impacted
by drought, (2) moderation as the preceding periods saw ramp-up of newly
commissioned capacities, (3) lower clinker sales during the quarter as core cement sales
still grew 8% yoy, and (4) impact of weak off-take preceding GST implementation.
Realizations show strength, but expect moderation in 2QFY18. Dalmia Bharat

reported blended realizations of `5,160/ton (+10% yoy,+7% qoq)strength reflecting
an increase in cement prices in the companys key markets in South & East. Prices have
since seen some moderation and will reflect in moderate decline in 2QFY18.
Costspower and fuel cost increase. Dalmias production cost increased by 15% yoy
to `3,957/ton (-3% qoq) led by higher power and fuel cost. The ramp-up of clinker
production in North East helped reduce raw material cost, though increase in cost of slag
from `800/ton to `1,200/ton partially offset the gains. Power and fuel cost continues to
be on the rise reflecting the increase in pet-coke prices, though we believe that the
impact of increase in pet-coke prices is reflected in the earnings and see little incremental
impact from here.

Dalmia Bharat Cement
Exhibit 2: Dalmia's realizations increased 10% yoy on account of price increases taken in April 2018
Quarterly cement realization of Dalmia Bharat, 1QFY15- 1QFY18 (Rs/ton)
Blended realizations (Rs/ton)

6,000
5,262 5,088 5,160
4,745 4,616 4,889 4,932 4,847 4,921 4,845 4,802
5,000 4,695
4,335
4,000
3,000
2,000
1,000
0
1QFY15
2QFY15
3QFY15
4QFY15
1QFY17
2QFY17
3QFY17
4QFY17
1QFY18
1QFY16
2QFY16
3QFY16
4QFY16
Exhibit 3: Dalmia's per ton cost increased 11% yoy led by higher fuel costs
Quarterly cement costs of Dalmia Bharat, 1QFY15- 1QFY18 (Rs/ton)
Costs (Rs/ton)
5,000
4,288
4,086 4,091 4,057
3,923 3,903 3,803 3,780 3,703
4,000 3,638 3,765
3,590
3,375
3,000
2,000
1,000
0
1QFY15
2QFY15
3QFY15
4QFY15
1QFY16
2QFY16
2QFY17
3QFY17
4QFY17
1QFY18
3QFY16
4QFY16
1QFY17

Exhibit 4: Profitability improvement was on the back of higher realizations during the quarter
Quarterly EBITDA/ton of Dalmia Bharat, 1QFY15- 1QFY18 (Rs/ton)
EBITDA (Rs/ton)
1,600
1,395
1,400 1,320
1,165 1,209 1,212
1,200 1,130 1,141 1,142
974 986
1,000
800 654
558
600
400 249
200
0
1QFY15
2QFY15
3QFY15
4QFY15
1QFY16
2QFY16
3QFY16
4QFY16
1QFY17
2QFY17
3QFY17
4QFY17
1QFY18
Exhibit 5: Dalmia Bharat, Changes in estimates, March fiscal year ends, FY2018-19E
Revised estimate Previous estimate Change (%)

2018E 2019E 2018E 2019E 2018E 2019E
Consolidated estimates (Rs mn)
Cement sales (mn tons) 17.0 19.0 17.7 19.8 (4) (4)
Revenues (Rs mn) 89,748 104,605 91,761 107,364 (2) (3)
EBITDA (Rs mn) 26,891 32,557 26,241 31,922 2 2
PAT (Rs mn) 9,719 13,468 9,709 13,693 0 (2)
EPS (Rs) 109.4 151.7 109.3 154.2 0 (2)
Dalmia Cement Bharat Ltd (Rs mn)
Realization/ton (Rs) 4,951 5,231 4,691 4,971 6 5
EBITDA/ton (Rs) 1,740 1,967 1,488 1,715 17 15
Revenues (Rs mn) 34,459 43,690 35,183 44,740 (2) (2)
EBITDA (Rs mn) 12,112 16,428 11,161 15,432 9 6
OCL India (Rs mn)
Realization/ton (Rs) 4,830 5,030 4,930 5,130 (2) (2)
EBITDA/ton (Rs) 1,450 1,534 1,466 1,546 (1) (1)
Revenues (Rs mn) 32,563 35,932 33,852 37,641 (4) (5)
EBITDA (Rs mn) 8,662 9,717 8,962 10,113 (3) (4)

Exhibit 6: We expect Dalmias's EBITDA to grow at CAGR of 24% over FY2017-2020E

Dalmia Bharat, Assumptions, March fiscal year-ends (Rs mn)
2015 2016 2017 2018E 2019E 2020E CAGR (%)

Capacity (mtpa) 9.0 9.0 11.5 11.5 11.5 11.5 -
Utilization (%) 56 40 52 61 73 78
Volumes (mn tons) 5.1 4.6 6.0 7.0 8.4 8.9 14
Growth (%) (8.4) (10.3) 31.4 16.0 20.0 7.0
Realization (Rs/ton) 4,541 4,791 4,391 4,951 5,231 5,431 7
Growth (%) 11.3 5.5 (8.3) 12.8 5.7 3.8
EBITDA (Rs/ton) 734 1,581 1,228 1,740 1,967 2,067 19
Growth (%) 26.5 115.4 (22.3) 41.7 13.0 5.1
OCL
Capacity (mtpa) 6.7 6.7 6.7 6.7 6.7 6.7 -
Utilization (%) 63 80 84 89 95 99
Volumes (mn tons) 4.3 5.4 5.6 6.0 6.3 6.6 6
Growth (%) 26.0 25.3 4.9 6.5 6.0 5.0
Realization (Rs/ton) 4,341 4,477 4,590 4,830 5,030 5,230 4
Growth (%) (1.8) 3.1 2.5 5.2 4.1 4.0
EBITDA (Rs/ton) 786 935 1,203 1,450 1,534 1,613 10
Growth (%) (11.0) 19.0 28.7 20.5 5.8 5.1
Consolidated financials
Revenue (Rs mn) 33,662 63,673 74,044 89,748 104,605 115,958 16
EBITDA (Rs mn) 4,546 15,079 19,019 26,891 32,557 36,156 24
EBITDA - attributable* (Rs mn) 5,810 12,349 16,962 24,068 29,419 32,664 24
PAT (Rs mn) 92 1,908 3,448 9,719 13,468 15,996
Net debt (Rs mn) 63,686 61,720 52,233 35,424 18,960 (1,639) (132)
Net debt - attributable (Rs mn) 45,177 41,518 49,662 32,781 19,906 3,901 (57)
Exhibit 7: Dalmia Bharat Limited, June 2019E, Valuation details
EBITDA Multiple EV Net Debt Equity Value Economic Value

(Rs mn) (X) (Rs mn) (Rs mn) (Rs mn) Stake (%) (Rs mn) Rs/share
DCBL 16,428 9 152,636 (17,039) 135,597 100 135,597 1,527
OCL 9,969 9 92,624 21,217 113,841 74.6 84,925 956
Others 4,602 9 42,753 (16,441) 26,312 26,312 296
Equity value (Rs/share) 246,834 2,780

Exhibit 8: Dalmia Bharat, Financial summary (Consolidated), March fiscal year-ends, 2015-2020E (Rs mn)
2015 2016 2017 2018E 2019E 2020E

Net sales 33,662 63,673 74,044 89,748 104,605 115,958
EBITDA 4,546 15,079 19,019 26,891 32,557 36,156
O ther income 2,413 2,349 2,988 3,436 3,530 3,958
Interest (4,344) (7,256) (8,900) (8,124) (7,793) (7,603)
Depreciation (2,716) (4,528) (6,027) (6,445) (6,915) (7,085)
Pretax profits (101) 5,644 7,080 15,759 21,378 25,425
Tax (469) (2,991) (2,762) (4,728) (6,414) (7,628)
Add: Share in associates 485 0 0 0 0 0
Less: Minority Interest (176) 745 870 1,313 1,497 1,802
Net profits 92 1,908 3,448 9,719 13,468 15,996
Extraordinary items (61) 0 0 0 0 0
Earnings per share (Rs) 1.1 21.5 38.8 109.4 151.7 180.1
Equity 162 178 178 178 178 178
Reserves and surplus 30,534 38,391 49,471 64,876 78,131 93,914
Borrowings 84,797 88,930 80,490 83,846 80,896 78,896
Deferred tax liability 4,006 5,674 15,764 15,134 14,475 13,855
Minority Interest 7,470 3,576 6,129 7,442 8,939 10,741
Currrent liabilities 17,089 22,829 27,746 25,499 26,491 28,190
Total liabilities and equity 144,057 159,578 179,778 196,974 209,110 225,773
Gross block 84,123 105,113 131,259 134,909 138,559 142,209
Net fixed assets 58,233 74,696 94,814 92,019 88,754 85,319
Capital work in progress 19,142 4,123 1,325 3,142 2,642 2,142
Cash 5,281 2,483 1,750 27,262 40,777 59,376
Current assets 24,853 25,342 27,508 25,417 27,804 29,803
Investments 16,905 25,752 27,434 22,186 22,186 22,186
Goodwill 19,643 27,182 26,947 26,947 26,947 26,947
Total assets 144,057 159,578 179,778 196,974 209,110 225,773
O perating cash flow, excl. working capital (673) 6,500 7,462 13,308 17,692 20,305
Working capital 689 4,362 3,913 (156) (1,394) (300)
Capital expenditure (4,953) (5,970) (4,662) (5,467) (3,150) (3,150)
Free cash flow (4,936) 4,892 6,713 7,685 13,148 16,854
Ratios
EBITDA margin (%) 13.5 23.7 25.7 30.0 31.1 31.2
PAT margin (%) 0.3 3.0 4.7 10.8 12.9 13.8
Net debt/equity (X) 2.1 1.6 1.1 0.5 0.2 (0.0)
Book value per share (Rs) 378 434 559 733 882 1060
Net debt/EBITDA (X) 14.0 4.1 2.7 1.3 0.6 (0.0)
RoAE (%) 0.3 5.5 7.8 16.9 18.8 18.6
RoACE (%) 1.3 5.8 6.8 9.8 11.2 11.7
CRoCI (%) 5.3 9.4 11.6 15.6 18.1 19.3

ADD
Muthoot Finance (MUTH)
NBFCs AUGUST 09, 2017
RESULT
Coverage view: Neutral
Growth muted, profitability improves. Muthoot Finance reported 30% earnings Price (`): 480
growth on the back of improving margins and expense management even as gold loan Target price (`): 500
growth was muted in 1Q. Its growth focus is slowly shifting to its subsidiaries that
BSE-30: 32,014
benefit from sectoral tailwinds and extremely low base. We take cognizance of improving
profitability (medium-term RoE of 19%), tweak estimates and roll over target price to
500 (440 earlier). Retain ADD.
Company data and valuation summary
Muthoot Finance
52-week range (Rs) (high,low) 489-261 EPS (Rs) 29.5 33.2 37.6
Market Cap. (Rs bn) 191.6 EPS growth (%) 45.5 12.5 13.0 QUICK NUMBERS
Promoters 73.7 NII (Rs bn) 33.6 34.8 39.0
PAT up 30% yoy
MFs 8.1 BVPS 163.1 188.6 217.3
Price performance (%) 1M 3M 12M P/B (X) 2.9 2.5 2.2 RoE (annualized) of
Absolute 6.8 21.6 20.0 ROE (%) 19.4 18.9 18.5 21%
Gold loan book up
Earnings beat estimates 8% yoy
Muthoot Finance (Muthoot) reported PAT of 3.5 bn, up 30% yoy and 15% ahead of
estimates. While gold loan growth was muted at 8% yoy to 278 bn, NIM expansion (80 bps
yoy) boosted NII. Strong expense controls (likely linked to lower growth) led to 30 bps yoy
improvement in expenses/assets ratio to 4.5%.
Profitability improves
Muthoots annualized RoE expanded to 21%, highest since 2QFY14. This is largely driven by
strong NIM as a consequence of falling interest rates and better (calculated) asset yields.
Notably, in the past, Muthoot, as a prudential policy, stopped income recognition on loans if
the effective LTV (including accrued interest and considering market price of gold) appeared
high. Thus, in a falling gold price regime, its NIMs were under pressure and vice versa.
Muthoots reported borrowing cost has declined 160 bps yoy to 9.3%, likely driven by
(1) reduction in high-cost gold bonds to 10% of borrowings from 18% in 1QFY17 and (2) a
decline in bank base/MCLR rates even as share of bank loans has been stable at 41% of total
borrowings.
The other factor driving profitability improvement is control over operating expenses. Typically,
Muthoots expense ratios (likely linked to sales) tend to go up when book growth increases but
the company is smartly able to pull down expenses when momentum slows down.
Nischint Chawathe
Raise TP to 500 nischint.chawathe@kotak.com
Mumbai: +91-22-4336-0887
We are raising our earnings estimates by 2% for FY2018-20E to reflect better expense
M B Mahesh CFA
management. We expect Muthoot to deliver 15% loan book and 14% earnings CAGR during mb.mahesh@kotak.com
the period; medium-term RoE will be about 19%. Mumbai: +91-22-4336-0886
Subsidiaries growing fast, challenging to value. Muthoots subsidiaries are growing rapidly Abhijeet Sakhare
abhijeet.sakhare@kotak.com
on an extremely low base and it is challenging to model or value them. Falling borrowing cost, Mumbai: +91-22-4336-0889
higher credit rating of Muthoot Finance and sectoral tailwinds will support near-term growth.
Raise TP to 500. We are revising our target price to 500 to reflect marginally higher
estimates, reduction in cost of equity and roll over to September 2019E. At our RGM-based
target price, the company will trade at 2.2X book.

Mumbai: +91-22-4336-0000
NBFCs Muthoot Finance
Exhibit 1: Muthoot Finance quarterly financial statements

March fiscal year-ends, 1QFY17- 1QFY18 (` mn)
(% chg.)
1QFY18 1QFY18E 1QFY17 4QFY17 1QFY18E 1QFY17 4QFY17 FY2018E FY2017 (% chg.) FY2019E
Income statement
Interest income 13,758 12,752 16,995 8 (19) 58,856 56,553 4 65,765
Interest expenses 5,326 5,571 5,460 (4) (2) 24,007 22,938 5 26,778
Net interest income 8,432 8,422 7,181 11,535 0 17 (27) 34,849 33,615 4 38,987
Provisions (including standard assets) 66 352 176 2,430 (81) (62) (97) 813 2,816 (71) 1,034
NII post provisions 8,366 8,070 7,005 9,105 4 19 (8) 34,036 30,799 11 37,953
Other income 228 150 256 137 52 (11) 66 914 914 1,051
Operating expenses 3,075 3,535 3,024 3,349 (13) 2 (8) 13,537 12,503 8 15,186
Admin expenses 1,198 1,300 1,013 1,213 (8) 18 (1) 4,607 4,763 (3) 5,152
Employee expenses 1,773 2,100 1,899 2,010 (16) (7) (12) 8,101 7,280 11 9,150
Depreciation 104 135 112 126 (23) (7) (17) 829 460 80 883
PBT 5,518 4,685 4,237 5,893 18 30 (6) 21,413 19,210 11 23,818
Tax 2,007 1,640 1,534 2,676 22 31 (25) 8,137 7,412 10 8,813
PAT 3,511 3,045 2,703 3,217 15 30 9 13,276 11,798 13 15,005
EPS (Rs) 9 8 7 8 15 30 9 33 30 13 38
Key highlights
Total AUMs (Rs mn) 278,517 284,049 258,226 272,785 (2) 8 2
Borrowings (Rs mn) 220,844 212,848 210,959 4 5
Yield of loans (KS - %) 20.0 20.3 25.1

Borrowings cost (KS - %) 9.9 11.3 10.4
Spread (KS - %) 10.1 9.0 14.7
NIM (KS - %) 12.2 11.4 17.0
Opex/ average assets (%) 4.5 4.8 4.9
RoA (%) 5.1 4.3 4.7
RoE (%) 21.0 18.8 19.8
Asset quality
Gross NPL (Rs mn) 6,279 5,618 5,621 12 12
Net NPLs (Rs mn) 5,260 4,599 4,602 14 14
Gross NPLs (%) 2.3 2.2 2.1
Net NPLs (%) 1.9 1.8 1.7
Operational highlights
Branches (#) 4,285 4,294 4,307 (0) (1)
Gold (weight in tons) 152 146 149 4 2
Employees (#) 23,391 23,165 24,205 1 (3)
Loan per gram (Rs) 1,832 1,769 1,831 4 0
Average gold loan per branch (Rs mn) 65 60 63 8 3
Focus shifting to subsidiaries

Muthoot Finances loan growth has been linked to buoyancy in gold prices. The company
has started building businesses outside the gold loan sector a strategy similar to that of
Manappuram.
Muthoot Homefin (88% subsidiary of Muthoot in June 2017, 100% hereon) has loan book
of 6 bn and Belstar Investment and Finance (64% subsidiary) of Muthoot has a loan book
of 6.3 bn. These two companies comprised 4% of Muthoots consolidated loan book in
4QFY17 and the company has guided for the ratio to increase to 8-10% of consolidated
loan book by March 2018; momentum in these businesses was strong in 1Q, likely on the
way to achieve managements stated targets. Additionally, Muthoot has a small subsidiary in
Sri Lanka.
These businesses are acquired and managed independently by separate teams. Muthoot,
being engaged in asset-backed lending, does not have experience of appraisal of customers
income/cash flows, which is required in case of home loans. It is hence difficult to take a call
on its underwriting.
We have not modeled these companies in our forecasts.

Muthoot Finance NBFCs
AUM growth of 8% yoy and up 2% qoq

Gold prices were up just 0.5% qoq in 1QFY18 and down 5% yoy. Historic trends suggest
that gold loan growth is very volatile and has high linkages with gold price movements. With
no strong directional view on gold prices, we model moderate growth of 13-16% in our
forecasts. The company is increasingly focusing on non-gold segments, which through
provide diversification pose a risk to nascent and fast-growing portfolio.
Exhibit 2: AUM growth has been quite volatile over the past decade
AUM and yoy growth, March fiscal year-ends, 2006-20E (%)
(Rs bn) AUM (LHS) Yoy growth (%) (RHS) (%)

450 415 130
357
360 100
307
260 273
270 247 234 244 70
219
180 159 40
74
90 10
22 34
8 15
- (20)
2018E
2019E
2020E
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Exhibit 3: Gold prices were up ~2% in 1QFY18

Domestic gold price (`/gm)
3,500
3,000
2,500
2,000
1,500
1,000
500
-
Aug-11
Aug-12
Aug-13
Aug-14
Aug-15
Aug-16
Aug-17
Feb-14
Feb-16
Feb-12
Feb-13
Feb-15
Feb-17
Source: Bloomberg, Kotak Institutional Equities

Exhibit 4: Muthoots loan growth over the long term is driven by growth in customer base, aided by modest growth in gold prices
Average ticket size, loan accounts and loan book, March fiscal year-ends, 2011-1QFY18
CAGR
2011 2012 2013 2014 2015 2016 2017 1QFY18 (2011-17)
Average ticket size (Rs) 33,438 39,900 41,120 40,000 37,865 36,500 37,186 37,196 2
Loan accounts (mn) 4.7 6.2 6.3 5.7 6.2 6.6 7.3 7.5 8
Loan book (Rs bn) 117,518 213,730 260,004 218,620 234,050 243,789 272,785 278,517 15
High growth in housing and microfinance subsidiaries
Muthoot Homefin is a subsidiary focused on affordable housing in economically weaker

sections and lower income groups in Tier-II & Tier-III locations. It has a loan book of 6.0
bn (441 mn in 1QFY17). It has a network of about 11 branches and per loan ticket size
of 1.1 mn lower than most housing finance companies. Muthoot holds 88% stake.
Muthoot owns 64% in Belstar Investment Finance a microfinance business with loan
book of 6.3 bn (up 119% in last one year). The company operates MFI business in six
states and one UT of Tamil Nadu, Karnataka, Madhya Pradesh, Maharashtra, Kerala,
Odisha and Pondicherry.
Exhibit 5: Increasing share of subsidiaries
2017 1QFY17 1QFY18 YoY (%)

Loan book (Rs mn)
Muthoot (parent) 272,785 258,606 278,517 8
Subsidiaries 10,076 3,313 12,242 270
Homefin 4,408 441 5,957 1,251
Belstar (MFI) 5,668 2,872 6,285 119
Share of subsidiaries (%) 3.7 1.3 4.4
PBT (Rs mn)
Muthoot (parent) 19,210 4,237 5,518 30
Subsidiaries 157 17 113 565
Homefin 53 (5) 61 NM
Belstar (MFI) 104 22 52 136
Net worth (Rs mn)
Muthoot (parent) 65,164 58,915 68,683 17
Subsidiaries 1,785 985 1,874 90
Homefin 882 564 918 63
Belstar (MFI) 903 421 956 127
NIM up 80 bps yoy
Muthoot reported NIM of 12.2% in 1QFY18, 17% in 4QFY17 as compared to 11.4% in

1QFY17. 4QFY17 NIM was exceptionally high due to one-off impact as explained below.
Most gold loans of Muthoot have tenure of 12 months. In most cases, loan has a bullet
repayment; assuming 120 dpd NPL norms, its accrued interest before a loan can be
classified as NPL, can be up to a period of 16 months. In the past, Muthoot may stop
interest recognition if LTV (including accrued interest) crosses its comfort LTV levels. Post
discussion with income tax authorities, the company decided to recognize all income and
then make a relevant provision against the same. The one-time impact of the same was
reflected in 4QFY17 calculated lending rate was up to 25% from 20-21% over the last
few quarters.

A key notable improvement is on the liability side. Reported cost of borrowings was down
40 bps to 9.3% largely due to increase in share of NCDs (25% from 18% in 4QFY17).
We expect Muthoot to pass on the benefit of lower interest rate to its borrowers. At the
same time, we expect competition to continue. We are hence factoring compression in
interest spread to 9.2% in FY2020E from a higher base of 10.4% in FY2017.
Exhibit 6: We forecast NIM compression over FY2018-20E after the expansion seen in FY2017
Yield on loans, cost of funds and NIMs, March fiscal year-ends, 2010-20E (%)
Yield on loans (LHS-%) Cost of borrowings (LHS-%) NIM (RHS-%)

25 14.0
22.3 21.9
21.1 20.4
19.9 19.7 20.1 13.0 20.3 19.8
18.8 19.3
20 12.6
12.0
11.7
11.5
15 11.2 13.4 13.2 11.2
10.9 10.8 11.9 11.8
10.7 11.5
10.7 10.7 10.4 10.1
10 8.4 8.8 10.0 9.8
9.5 9.5
5 8.4
0 7.0
2018E
2019E
2020E
2010
2011
2012
2013
2014
2015
2016
2017
Source: Company, Kotak Institutional Equities estimate
Gross NPL inch up slightly
Reported GNPL ratio increased ~20 bps qoq. Muthoot reported GNPLs of 6.3 bn
(2.3% of loans) in 1QFY18, up from 5.6 bn (2.1% of loans) in 4QFY17. The increase in
NPL may be seasonal in nature. We await further clarification from the management.
Provision coverage of 16% is in line with 14-16% range over the past 2-3 years. We
expect provisions to be a bit higher due to its new policy to recognize higher income and
make extra provisions against the same. Eventual credit losses will, however, remain
unchanged.
Strong cost control

Operating costs increased 2% yoy, as staff costs declined 7% yoy while non-staff expenses
increased 18% yoy.
Cost to assets ratio declined to 4.5% from 4.9% in 4QFY17 and 4.8% in 1QFY18.
Muthoot has been showing good level of cost control in recent quarters with cost ratios
(% of AUM) have been around 4.4-4.9% range compared to 5.1-5.3% in FY2015. We
expect expenses to increase by 11-12% over FY2018-20E, translating into cost to asset ratio
of 3.8% by FY2020E from 4.3% in FY2017.

Exhibit 7: Operating expenses to assets ratio is expected to decline

Operating expenses to average AUMs, March fiscal year-ends, 2010-20E
Staff expenses (LHS) Non-staff expenses (LHS) Operating expenses (RHS)

2.6 5.0
2.1 4.6
1.6 4.2
1.0 3.8
0.5 3.4
- 3.0
2018E
2019E
2020E
2010
2011
2012
2013
2014
2015
2016
2017
Exhibit 8: Muthoot Finance old and new estimates

March fiscal year-ends, 2018E-20E (Rs mn)
New estimates Old estimates New vs old (%)

2018E 2019E 2020E 2018E 2019E 2020E 2018E 2019E 2020E
Loans under management 307,076 357,217 414,918 307,076 357,217 414,918 0
NIM (%) 12.0 11.7 11.5 12.0 11.8 11.0
Interest income 58,856 65,765 74,511 58,856 65,765 74,511 0
Interest expenses 24,007 26,778 30,289 23,939 26,656 30,193 0 0 0
Net Interest income 34,849 38,987 44,222 34,917 39,109 44,318 (0) (0) (0)
Provisions 813 1,034 1,173 813 1,034 1,173 0
Operating expenses 13,537 15,186 16,898 14,082 15,722 17,513 (4) (3) (4)
Profit before tax 21,413 23,818 27,360 20,936 23,404 26,841 2 2 2
Tax 8,137 8,813 10,123 7,956 8,659 9,931 2 2 2
Profit after tax 13,276 15,005 17,237 12,980 14,744 16,910 2 2 2
EPS (Rs) 33 38 43 32 37 42 2 2 3
BVPS (Rs) 189 217 250 188 216 249 0 0 1
Source: Kotak Institutional Equities estimates

Exhibit 9: Muthoot is trading at 2X one-year forward book

One-year forward trading PER and PBR, August 2013 - August 2017 (X)
Rolling PER (X) (LHS) Rolling PBR (X) (RHS)

3.0
14.2
2.5
11.4
2.0
8.6
1.5
5.8
1.0
3.0 May-14 0.5
May-15
May-17
May-16
Nov-13
Nov-15
Nov-16
Nov-14
Feb-14
Feb-15
Feb-16
Feb-17
Aug-13
Aug-14
Aug-16
Aug-17
Aug-15
Source: Company, Bloomberg, Kotak Institutional Equities estimates

Exhibit 10: Muthoot Finance key financial ratios and growth rates
March fiscal year-ends, 2015-20E (%)
2015 2016 2017 2018E 2019E 2020E

Growth in key parameters (%)
Profit and loss statement - yoy (%)
Interest income (13) 13 18 4 12 13
Interest costs (20) 7 2 5 12 13
Net interest income (5) 19 32 4 12 13
Net total income (4) 18 32 4 12 13
Provisioning expenses (15) 337 73 (71) 27 13
Net income (post provisions) (4) 13 29 10 12 13
Operating expneses 6 (1) 10 8 12 11
Staff expenses 7 2 13 11 13 15
Other operating expenses (1) 0 8 (3) 12 6
Depreciation expenses 77 (34) (18) 80 7 6
PBT post extraordinaries (14) 28 46 11 11 15
Tax (14) 42 46 10 8 15
PAT (14) 21 46 13 13 15
Balance sheet - yoy (%)
Gold loans 7 4 12 13 16 16
Gold loans (incl sell down) 7 4 12 13 16 16
Fixed assets (19) (19) (5) 14 7 6
Other current assets (9) (22) 70 13 16 16
Total assets 5 1 17 13 16 16
Borrowings (2) (4) 13 13 17 16
Current liabilities 51 25 47 12 15 15
Total liabilities 2 (1) 18 13 16 16
Share capital 7 0 0 0 0 0
Reserves and surplus 20 11 17 17 16 16
Shareholders funds 19 11 16 16 15 15
Key ratios (%)

Interest yield (incl loans sold down) 18.8 20.1 21.9 20.3 19.8 19.3
Interest cost (incl loan sold down) 10.7 11.8 11.5 10.7 10.4 10.1
Spreads 8 8 10 10 9 9
NII/ loans under management 10 11 13 12 12 11
Operating costs/ net income (post provisions) 52.9 46.4 39.4 38.7 38.9 38.2
Cash/ total assets + loan sold down 6.5 2.5 4.8
Tax rate 34.8 38.5 38.6 38.0 37.0 37.0
Debt/ equity (X) 3.8 3.3 3.2 3.2 3.2 3.2
Du Pont analysis
(% of average assets including loans sold down)
Net interest income 8.2 9.5 11.4 10.3 10.0 9.8
Other income 0.2 0.2 0.3 0.3 0.3 0.3
Credit costs 0.1 0.6 1.0 0.2 0.3 0.3
Operating expenses 4.4 4.2 4.3 4.0 3.9 3.8
PBT post extraordinaries 3.9 4.9 6.5 6.3 6.1 6.1
1-tax rate 0.7 0.6 0.6 0.6 0.6 0.6
RoA 2.6 3.0 4.0 3.9 3.9 3.8
Average assets / average equity (X) 5.6 5.0 4.8 4.8 4.8 4.8
RoE 14.3 15.1 19.4 18.9 18.5 18.4

Exhibit 11: Muthoot Finance income statement and balance sheet

March fiscal year-ends, 2015-20E (` mn)
2015 2016 2017 2018E 2019E 2020E

Income statement (Rs mn)
Interest income 42,623 48,130 56,553 58,856 65,765 74,511
Interest costs 21,064 22,577 22,938 24,007 26,778 30,289
Net interest income 21,559 25,553 33,615 34,849 38,987 44,222
Other income 624 620 914 914 1,051 1,209
Net total income 22,183 26,173 34,529 35,763 40,038 45,431
Provisioning expenses 371 1,624 2,816 813 1,034 1,173
Net income (post provisions) 21,811 24,549 31,713 34,950 39,004 44,258
Operating expneses 11,533 11,382 12,503 13,537 15,186 16,898
Staff expenses 6,304 6,419 7,280 8,101 9,150 10,493
Other operating expenses 4,387 4,405 4,763 4,607 5,152 5,467
Depreciation expenses 841 558 460 829 883 937
PBT post extraordinaries 10,279 13,167 19,210 21,413 23,818 27,360
Tax 3,573 5,071 7,412 8,137 8,813 10,123
PAT 6,705 8,096 11,798 13,276 15,005 17,237
No of shares (mn) 397 399 400 400 400 400
EPS - adjusted for bonus (Rs) 17 20 30 33 38 43
BVPS - adjusted for bonus (Rs) 128 141 163 189 217 250

Assets
Gold loans 234,050 243,355 272,199 307,076 357,217 414,918
Investments 385 982 2,091 3,591 3,591 3,591
Fixed assets 2,642 2,138 2,022 2,304 2,454 2,604
Current assets 30,616 24,012 40,819 46,061 53,583 62,238
Cash and bank balances 17,366 6,791 15,343
Other cash balance 17,366
Other current assets 13,250 17,221 25,476 46,061 53,583 62,238
Total assets 267,693 270,487 317,131 359,032 416,845 483,351
Liabilities
Borrowings 194,640 186,409 210,959 237,770 277,199 322,578
Current liabilities 22,226 27,886 41,008 45,929 52,818 60,741
Total liabilities 216,866 214,295 251,967 283,699 330,017 383,319
Share capital 3,971 3,990 3,995 3,995 3,995 3,995
Reserves and surplus 46,855 52,202 61,169 71,339 82,833 96,037
Shareholders funds 50,826 56,192 65,164 75,334 86,828 100,032
Aggregate loan book (incl sell down)
Loans under management 234,050 243,789 272,785 307,076 357,217 414,918
Total assets under management 267,693 270,487 317,131 359,032 416,845 483,351

BUY
Jindal Steel and Power (JSP)
Metals & Mining AUGUST 09, 2017
RESULT
Steel earnings weak, power improves. JSPs EBITDA of `13.5 bn (+36% yoy, -13% Price (`): 140
qoq) was lower than our estimate. Weak earnings were due to muted steel volume Target price (`): 165
growth (+4% yoy) impacted by GST implementation, lower steel realizations and
BSE-30: 32,014
disruption in Australian mining operations. Angul blast furnace was commissioned in
August 2017we expect a sharp jump in steel earnings in 2HFY18 from BF ramp-up
and the commissioning of BOF. We will change estimates post the earnings call.
Jindal Steel and Power
52-week range (Rs) (high,low) 159-62 EPS (Rs) (20.9) (7.4) 7.0
Shareholding pattern (%) P/E (X) (6.7) (18.7) 19.9
FIIs 15.2 Net profits (Rs bn) (19.1) (6.8) 6.4
MFs 2.8 EBITDA (Rs bn) 46.6 66.5 84.2
Absolute 5.6 25.6 65.5 ROE (%) (6.1) (2.3) 2.2
1QFY18 earningspower earnings improve while steel & overseas coal mining were weak
Jindal Steel & Power reported consolidated EBITDA of `13.5 bn (+36% yoy, -13% qoq), 8%
lower than our estimate. Standalone EBITDA of `7.5 bn (+13% yoy, -18% qoq) was 10% lower
than our estimate due to weak steel realizations (-3% qoq). Besides, the decline in earnings at
Australian mining operations from discontinued extraction due to mining contractors
insolvency also led to EBITDA miss. Weak earnings in these businesses were partially offset by
strong growth in powerEBITDA increased 23% qoq to `4.7 bn (+157% yoy) led by higher
generation (+36% qoq, +47% yoy) and lower costs.
The company reported net loss of `3.9 bn (`4.5 bn adjusted net loss in 1QFY17) against our
estimate of `3.7 bn. Depreciation charge declined 4% qoq to `9.6 bn.
Standalone steel operationsweak realizations, subdued deliveries
Standalone steel deliveries increased 4% yoy to 810,000 tons (-12% qoq) and was lower than
the production of 900,000 tons (+7% yoy). The company highlighted that demand for TMT
rebars and wire rods remained weak; we highlight that as per JPC data steel demand growth of
close to 5% for April-June 2017 was largely led by flat products. JSPs deliveries were also
subdued as customer off-take was weak on run-up to GST implementation and there was
destocking across the supply chain. Realizations declined by `1,500/ton qoq resulting in
EBITDA/ton falling by 7% qoq to `9,250/ton (+9% yoy, KIE: `9,900/ton).
Power earnings improve on higher generation; Blast furnace commissioned in August 2017
Jindal Powers earnings increased 23% qoq to `4.7 bn largely on the back of 36% qoq increase
Abhishek Poddar
in power generation to 3,186 mn units (+47% yoy). Early summer onset and good seasonal abhishek.poddar@kotak.com
demand led to more off-take from thermal power plantsthe increase in companys sales was Mumbai: +91-22-4336-0861
aided by higher power sales to exchanges. The company stated that net debt was maintained at
Samrat Verma
last quarters levels (`455 bn in March 2017). samrat.verma@kotak.com
Mumbai: +91-22-4336-0869
The Angul Blast furnace was under trial runs in the previous quarter after being lit in May 2017.
The company commissioned the BF on August 7, 2017. Weak earnings in the standalone steel
business in 1QFY18 were due to lower demand from the run-up to GST and monsoons.
We expect steel earnings to improve starting 3QFY18 post monsoons and Angul BF ramp-up.
We will update our estimate post the earnings call.
Mumbai: +91-22-4336-0000
Jindal Steel and Power Metals & Mining
Exhibit 1: Interim results of Jindal Steel & Power (consolidated), March fiscal year-ends (Rs mn)
(% chg.)
1QFY18 1QFY18E 1QFY17 4QFY17 1QFY18E 1QFY17 4QFY17 FY2018E FY2017 (%chg)
Net sales 59,364 63,108 46,962 64,861 (6) 26 (8) 302,727 216,555 40
Total expenditure (45,837) (48,479) (37,045) (49,340) (5) 24 (7) (236,217) (169,975) 39
Inc/(Dec) in stock 2,291 657 902 (1,096) (4,482)
Raw materials (20,640) (23,337) (14,603) (22,652) (12) 41 (9) (66,353)
Staff cost (2,320) (2,708) (2,269) (2,256) (14) 2 3 (9,136)
Other expenditure (25,167) (23,092) (6,587) (23,337) 9 282 8 (90,005)
EBITDA 13,527 14,629 9,917 15,521 (8) 36 (13) 66,509 46,580 43
Other income 92 312 90 2,482 100 2,384
Interest (9,006) (9,202) (8,605) (8,642) (2) 5 4 (38,948) (33,896) 15
Depreciation (9,622) (10,333) (9,171) (10,059) (7) 5 (4) (41,205) (39,490) 4
Pretax profits (5,101) (4,814) (7,548) (3,090) 6 (32) 65 (11,161) (26,706) (58)
Exceptional item 6,257 (3,723)
Tax 887 615 1,410 (428) 3,880 5,027 (23)
Net income (4,214) (4,199) (12,395) (3,518) 0 (66) 20 (7,281) (25,402) (71)
Share of profit from associates 10 15 14 (16) 30 27 11
Minority Interest 334 500 1,560 505 436 2,562 (83)
Net income (3,871) (3,684) (10,822) (3,029) 5 (64) 28 (6,815) (22,813) (70)
Adjusted net income (3,871) (3,684) (4,564) (3,029) (6,815) (19,090)
Ratios
EBITDA margin (%) 22.8 23.2 21.1 23.9 22.0 21.7
ETR (%) 17.4 12.8 18.7 (13.8) 34.8 18.8
EPS (Rs) (4.2) (4.0) (5.0) (3.3) (7.4) (20.9)
Segmental revenue
Iron & Steel 47,134 32,845 52,614 44 (10) 179,256
Power 18,218 18,893 15,646 (4) 16 63,784
Others 2,528 609 2,791 8,907
Segmental PBIT
Iron & Steel 3,085 4,376 3,979 (30) (22) 11,245
Power 3,292 (54) 1,009 (6,253) 226 2,999
Others (1,377) (1,588) 2,059 (598)
Segmental PBIT (%)
Iron & Steel 6.5 13.3 7.6 6.3
Power 18.1 (0.3) 6.5 4.7
Other highlights from the results
Oman steel plant. The EBITDA at Oman was flat qoq at US$32 mn (US$34 mn in
1QFY17). Crude steel production increased by 3% yoy to 360,000 tons.
Mining operationsweak earnings. There was sharp decline in earnings in

international mining operations due to discontinued operations in Australia. Note that
Australian operations earned EBITDA of AU$30 mn in 4QFY17 (also aided by Fx gains)
which have likely turned to losses due to suspension of mining operations from
contractor issues. The company expects Australian mining operations to resume from
August 2017.
Increase in authorized share capital. JSPs board, subject to shareholders approval has
increased in the authorized share capital from `2 bn to `3 bn through additional `1 bn in
preference shares. The board has also approved the issue of further securities not
exceeding `50 bn and issuance of NCDs for `50 bn.

Metals & Mining Jindal Steel and Power
Exhibit 2: Interim results of Jindal Steel & Power (standalone), March fiscal year-ends (Rs mn)
(% chg.)
1QFY18 1QFY18E 1QFY17 4QFY17 1QFY18E 1QFY17 4QFY17 FY2018E FY2017 (%chg)
Net sales 36,414 38,471 31,604 42,756 (5) 15 (15) 205,708 144,492 42
Total expenditure (28,918) (30,111) (24,983) (33,621) (4) 16 (14) (164,066) (115,910) 42
Inc/(Dec) in stock 1,613 471 (1,658) - (3,323)
Raw materials (15,197) (15,184) (11,356) (15,674) (11) 25 (22) (84,490) (51,587) 64
Staff cost (1,339) (1,414) (1,347) (1,149) (5) (1) 17 (5,635) (5,316) 6
Other expenditure (13,996) (13,514) (4,125) (15,140) 4 239 (8) (31,630) (23,118) 37
EBITDA 7,495 8,360 6,621 9,135 (10) 13 (18) 41,641 28,582 46
Other income 90 89 30 89
Interest (5,323) (5,674) (6,038) (5,149) (6) (12) 3 (27,037) (22,804) 19
Depreciation (4,806) (5,109) (4,891) (4,887) (6) (2) (2) (23,986) (20,437) 17
Pretax profits (2,634) (2,333) (4,308) (812) 13 (39) 224 (9,351) (14,570) (36)
Tax 857 700 1,542 (349) 22 (44) (345) 2,992 4,705 (36)
Net income (1,777) (1,633) (2,767) (1,161) 9 (36) 53 (6,359) (9,864) (36)
Adjusted net income (1,777) (1,633) (2,767) (1,161) (6,359) (9,864)
Ratios
EBITDA margin (%) 20.6 21.7 20.9 21.4 (5) (2) (4) 20.2 19.8
ETR (%) 32.5 30.0 35.8 (43.0) 32.0 32.3
EPS (Rs) (1.9) (1.8) (3.0) (1.3) 9 (36) 53 (7.0) (10.8)
Volumes (mn tons)
Steel Products 0.81 0.82 0.78 0.92 (1) 4 (12) 4.80 3.35 43
Operational details (Rs/ton)
Blended realizations (Rs/ton) 44,955 46,974 40,517 46,474 (4) 11 (3) 42,828 43,130 (1)
EBITDA/ton (Rs/ton) 9,253 10,207 8,488 9,929 (9) 9 (7) 8,670 8,532 2
Exhibit 3: Jindal Power EBITDA increased 23% qoq on higher generation of 3,180 mn units (+36% qoq) and lower costs
Jindal Power, Interim results, 1QFY16 - 1QFY18 (mn units, Rs mn)
(Change %)
1QFY16 2QFY16 3QFY16 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 1QFY18 yoy qoq
Jindal Power
Sales (Rs mn) 6,160 8,890 8,150 6,920 6,680 7,340 8,540 8,630 10,790 62 25
Power generation (mn units) 1,875 2,728 2,580 2,358 2,171 2,313 2,356 2,336 3,186 47 36
JPL realizations (Rs/unit) 3.7 3.6 3.5 3.3 3.4 3.5 4.0 4.1 3.8 10 (8)
EBITDA 1,800 1,680 1,860 1,190 1,820 1,820 3,020 3,820 4,680 157 23
Cost/unit (Rs/unit) 2.6 2.9 2.7 2.7 2.5 2.7 2.6 2.3 2.1 (14) (7)
EBITDA/unit (Rs/unit) 1.1 0.7 0.8 0.6 0.9 0.9 1.4 1.8 1.6 75 (10)
Exhibit 4 : JSP's steel EBITDA increased 13% yoy aided by higher realizations and 4% yoy increase in volumes
JSP's domestic steel sales and realizations, 1QFY16 - 1QFY18, (mn tons, Rs/ton)
(Change %)
1QFY16 2QFY16 3QFY16 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 1QFY18 yoy qoq
Revenues (Rs mn) 34,527 34,964 31,763 36,611 31,604 33,210 36,923 42,756 36,414 15 (15)
EBITDA (Rs mn) 7,104 6,331 4,230 5,992 6,621 5,371 7,810 9,135 7,495 13 (18)
Steel product sales (tons) 820,000 780,000 740,000 1,000,000 780,000 810,000 840,000 920,000 810,000 4 (12)
Blended realization (Rs/ton) 42,106 44,826 42,923 36,611 40,517 41,000 43,956 46,474 44,955 11 (3)
EBITDA/ton 8,663 8,117 5,716 5,992 8,488 6,630 9,298 9,929 9,253 9 (7)

Jindal Steel and Power Metals & Mining
Exhibit 5: The EBITDA at Oman steel plant remained flat qoq at US$32 mn in 1QFY18
Production and EBITDA performance of Oman steel plant, 3QFY16 - 1QFY18 (US$ mn)
3QFY16 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 1QFY18

Oman
Crude steel production (tons) 290,000 350,000 350,000 280,000 310,000 390,000 360,000
EBITDA (US$ mn) 7 17 34 13 21 32 32

BUY
Brigade Enterprises (BRGD)
Real Estate AUGUST 09, 2017
RESULT
An eventful quarter, but weak on sales. Brigades sales for the quarter stood at a Price (`): 275
low 0.31 mn sq. ft but it still managed to generate marginally positive OCF. It raised Target price (`): 320
`5 bn of equity and commenced construction of two large annuity projects. Response
BSE-30: 32,014
to new launches in Chennai and Bangalore were weak, and so were sales of completed
projects, despite the pre-GST push in the sector witnessed by peers. We await
management guidance on FY2018 sales. Maintain BUY with target of `320 /share.
Brigade Enterprises
52-w eek range (Rs) (high,low ) 304-140 EPS (Rs) 13.5 11.1 11.4
Market Cap. (Rs bn) 37.3 EPS grow th (%) 23.2 (17.4) 2.1
QUICK NUMBERS
Brigade records
MFs 9.0 EBITDA (Rs bn) 5.7 5.7 5.9 weak quarter on
Price performance (%) 1M 3M 12M EV /EBITDA (X) 10.8 11.1 11.6 sales, at 0.31 mn sq.
Absolute 5.3 14.1 68.0 ROE (%) 9.7 7.5 6.5 ft for `1.8 bn

Results review: Operating cash flow positive, but marginally
Collections and annuity income for 1QFY18 stood at `5.3 bn, with higher operating expenses
pulling down operating cash flow (marginally positive for the quarter). Capex increased to
`1.3 bn as Brigade commenced work on Brigade Tech Gardens, Bangalore. `5 bn of equity was
raised during 1Q; debt increased by `1.2 bn. One new project commenced revenue recognition.
Also, Brigade has appointed a new CFO, Mr Pradeep KP.
Operations review: Weak start to the year
Brigade sold 0.31 mn sq. ft in 1QFY18 for a value of `1.8 bn, its weakest quarterly performance
in the past four years. This is despite three new launches (of over 2 mn sq. ft) across various
markets in Bangalore and Chennai. Most of the sales were reported from Brigade Beuna Vista
(officially launched in 1Q, but under soft marketing for a while). The other two launches
reported dismal sales. Deliveries stood high as Brigade completed 2.6 mn sq. ft of projects.
The company commenced construction on the entire 3.3 mn sq. ft of Brigade Tech Gardens
(SEZ), Bangalore. It also began pre-construction activity and awarding contracts at Brigade WTC,
Chennai. Holiday Inn Chennai commenced commercial operations during 1QFY18. Brigade has
guided to launch residential and commercial projects for sale across 4.1 mn sq. ft in 9MFY18.
It also intends to commence construction on two hotel properties.
Guidance on sales
Unsold area offered for sale stands at 7.34 mn sq. ft, 0.92 mn sq. ft of which are from
completed projects. We expect more clarity on FY2018 pre-sales guidance from the
management conference call, including its strategy on the sale of unsold area of completed
projects. Our sales estimates for FY2018 stand at `12.4 bn as we expect new launches and
sales at completed projects to perform. Samar Sarda
samar.sarda@kotak.com
Mumbai: +91-22-4336-0874

Mumbai: +91-22-4336-0000
Brigade Enterprises Real Estate
Results review: 1QFY18
Exhibit 1: Operating cash flow manages to stay positive in 1QFY18

Brigade: Cash flow statement, March fiscal year-ends, 4QFY15-1QFY18 (Rs mn)
4QFY15 1QFY16 2QFY16 3QFY16 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 1QFY18
Collections (Resi+rentals+hotels GOP) 3,825 4,065 5,566 5,184 5,148 4,456 5,172 5,741 5,475 5,305
Construction costs (residential) (2,627) (2,389) (3,099) (3,008) (3,115) (2,851) (2,673) (2,521) (2,678) (2,649)
Land owner payments (JDA) (266) (81) (96) (158) (80) (151) (207) (260) (198) (170)
Employee and administration expenses (554) (480) (551) (323) (489) (349) (481) (391) (638) (883)
Sales and marketing expenses (248) (187) (220) (251) (266) (319) (194) (177) (245) (210)
Statutory payments (including taxes) (273) (252) (325) (372) (444) (204) (493) (419) (562) (506)
Other expenses and payments (33) (3) (10) (100) (269) (22) (55) (73) (55) (284)
Interest expenses (gross for all verticals) (338) (419) (723) (475) (420) (562) (502) (551) (491) (581)
Operating cash flow before land and capex (514) 254 542 497 65 (2) 567 1,349 608 22
Capex (791) (500) (670) (491) (614) (606) (679) (614) (1,195) (1,330)
Land /JD /JV /TDR (1,744) (3,519) (757) (428) (427) (94) (694) (501) (197) (1,272)
Investment in subsidiaries (510) (49) (179)
Free cash flow (3,559) (3,814) (1,064) (422) (976) (702) (806) 234 (784) (2,580)
Exhibit 2: Sales from completed projects were slow during 1QFY18

Brigade: 1QFY18 results snapshot, March fiscal year-ends (Rs mn)
% change
1QFY18 1QFY17 4QFY17 1QFY17 4QFY17 2017 2016 % change 2018E
Financials snapshot
Net sales 5,550 4,945 5,537 12 0 20,241 20,379 (1) 22,267
Operating costs (4,288) (3,787) (3,556) 13 21 (14,498) (15,478) (6) (16,617)
EBITDA 1,263 1,157 1,981 9 (36) 5,744 4,902 17 5,650
Other income 97 127 69 (24) 39 342 328 5 313
Interest costs (608) (536) (592) 13 3 (2,465) (1,990) 24 (2,087)
Depreciation (317) (325) (328) (2) (3) (1,226) (1,059) 16 (1,325)
PBT 435 423 1,130 3 (62) 2,396 2,180 10 2,552
Taxes (142) (127) (305) 12 (53) (732) (798) (8) (868)
PAT 293 297 825 (1) (65) 1,664 1,382 20 1,684
Consolidated PAT 283 245 826 1,531 1,237 1,510
EPS (Rs/share) 2.2 2.6 7.3 13.5 10.9 11.1
Key ratios
EBITDA margin (%) 22.8 23.4 35.8 28.4 24.1 25.4
PAT margin (%) 5.3 6.0 14.9 8.2 6.8 7.6
Effective tax rate (%) 32.7 29.9 27.0 30.5 36.6 34.0

Real Estate Brigade Enterprises
Exhibit 3: Brigades sales performance in 1QFY18 was weak

Brigade: Residential and commercial sales, March fiscal year-ends, 1QFY15-1QFY18
1QFY15 2QFY15 3QFY15 4QFY15 1QFY16 2QFY16 3QFY16 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 1QFY18
Sales (mn sq. ft)
Residential 0.46 0.72 0.76 0.70 0.57 0.57 0.44 0.40 0.36 0.50 0.23 0.36 0.28
Commercial 0.02 0.08 0.05 0.01 0.05 0.14 0.08 0.01 0.09 0.07 0.01 0.04
Total 0.48 0.81 0.81 0.71 0.62 0.71 0.44 0.48 0.37 0.58 0.30 0.37 0.31
Sales (Rs mn)
Residential 2,387 3,580 3,882 3,457 3,032 3,079 2,410 2,159 2,072 2,883 1,313 2,100 1,554
Commercial 91 507 270 41 304 901 605 50 497 550 90 276
Total 2,478 4,087 4,152 3,498 3,336 3,980 2,410 2,764 2,122 3,380 1,863 2,190 1,830
Realizations (Rs /sq. ft)
Residential 5,167 4,952 5,101 4,939 5,338 5,383 5,490 5,411 5,740 5,801 5,759 5,801 5,630
Commercial 5,688 6,108 5,294 8,200 6,333 6,436 7,378 5,000 5,847 7,639 9,000 7,667
Blended 5,184 5,071 5,113 4,962 5,416 5,590 5,490 5,746 5,720 5,808 6,210 5,887 5,865
Exhibit 4: Annuity income will drive growth

Brigade: Profit model, balance sheet, cash flow model, March fiscal year-ends, 2016-20E (Rs mn)
2016 2017 2018E 2019E 2020E

Profit model
Net sales 20,379 20,241 22,267 24,324 25,582
EBITDA 4,902 5,744 5,650 5,860 6,283
O ther income 328 342 313 318 313
Interest (1,990) (2,465) (2,087) (2,037) (2,180)
Depreciation (1,059) (1,226) (1,325) (1,531) (1,752)
Pre-tax profits 2,180 2,396 2,552 2,610 2,664
Tax (835) (927) (868) (887) (906)
Deferred taxation 37 195
Net income 1,382 1,664 1,684 1,723 1,758
Adjusted net income 1,237 1,531 1,510 1,542 1,642
Earnings per share (Rs) 10.9 13.5 11.1 11.4 12.1
Balance sheet
Total equity 14,703 16,954 23,055 24,187 25,420
Minority interests 924 2,269 2,452 2,641 2,765
Non-current liabilities 17,481 17,652 20,628 21,472 22,343
Current liabilities 23,027 26,645 28,231 32,485 33,608
Total liabilities and equity 56,133 63,520 74,365 80,785 84,135
Non-current assets
Fixed assets 26,556 29,943 34,083 41,971 49,693
O ther non-current assets 5,325 4,431 5,424 5,422 5,423
Current assets 23,489 28,000 33,712 32,246 27,873
Investments 764 1,146 1,146 1,146 1,146
Total assets 56,133 63,520 74,365 80,785 84,135
Free cash flow
O perating cash flow, excl. working capital 2,314 2,862 2,561 3,073 3,394
Working capital changes (1,960) (166) (2,517) 1,230 4,377
Capital expenditure (9,139) (4,613) (5,466) (9,419) (9,473)
Investments (420) (382)
Free cash flow (9,205) (2,299) (5,421) (5,116) (1,702)
Ratios (%)
Debt/equity 173.7 151.9 126.4 132.8 131.5
Net debt/equity 166.3 145.6 109.8 126.8 128.4
RoE (%) 8.5 9.4 7.4 6.4 6.5
RoCE (%) 3.2 3.0 3.1 2.8 2.7
Book value per share (Rs) 129.9 149.2 170.0 178.3 187.4

ADD
TeamLease Services (TEAM)
Others AUGUST 09, 2017
RESULT
Coverage view:
1QFY18 below estimates, but some clarity on IT benefits. TeamLeases 1QFY18
EBITDA missed estimates on account of certain Ind-AS-related adjustments (ESOP costs) Price (`): 1,423
and weaker-than-expected performance of the other HR services. Staffing segment Target price (`): 1,480
performance was healthy with 14% increase in associate employee count in a BSE-30: 32,014
seasonally weak quarter. We increase our TP to 1,480 (from 1,245) primarily as we
incorporate the Section 80JJAA tax benefits until FY2025 based on the revised
interpretation of the Act. We roll forward to June 2019E and retain ADD.
C ompany data and valuation summary
TeamLease Serives
52-week range (Rs) (high,low) 1,537-823 EPS (Rs) 38.8 41.3 53.6
MFs 17.3 EBITDA (Rs bn) 0.4 0.7 0.9
Absolute (1.5) 28.3 26.6 ROE (%) 19.2 17.0 18.4
Rel. to BSE-30 (3.5) 19.9 11.4 Div. Yield (%) 0.0 0.0 0.0
EBITDA miss on Ind-AS-related impact and weak performance of HR services

TeamLeases 1QFY18 EBITDA of 130 mn missed our estimates by 13% on Ind-AS-related
adjustments (primarily ESOP costs of ~0.5 mn) and lower-than-expected revenue and
profitability of the HR services segment. Staffing segment performance was robust with overall
headcount (associate employees + apprentices) increasing by 14% yoy.
GST medium-term positive though may lead to some short-term pressure

Management mentioned that post GST implementation, they have not seen any major increase
in enquiries from clients who are busy in sorting out GST-related paperwork. They expect some
pickup to happen only towards the end of the year when companies can effectively start
tracking the punctuality of their vendors in filing tax returns, which would enable them to claim
input tax credit. Management mentioned that the telecom vertical, which is ~11% of their
associate employee base, is seeing some pressure owing to consolidation in the industry, and
this may have some impact on 2QFY18 associate employee count.
Section 80JJAA tax benefits no sunset clause
The interpretation of Section 80JJAA tax benefits seems to be finally reaching a consensus with
TeamLease and its peers guiding for: (1) 30% deduction on the salary of new employees
available for three years, (2) incremental benefit for the new employees added in a particular
year, and (3) no sunset clause on the benefit, as long as companies add employees on a net
basis. For instance, in FY2018, TeamLease can claim tax benefits for employees added in both
FY2017 and FY2018, subject to a cap of its taxable income. We thus raise our FY2020 EPS by
38% as we ascribe this tax benefit, as opposed to regular tax rate earlier (we were building tax
benefit over FY2017-19 only). We have cut FY2018 EPS by 4% to incorporate Ind-AS-related
adjustments (higher ESOP expense and amortization of intangibles).
Target price raised to 1,480 to factor in tax benefits; retain ADD

We raise our TP to 1,480 primarily as we now incorporate tax benefits until FY2025. We note
Garima Mishra
that our computation of tax benefits for TeamLease employs a fair amount of subjectivity. In our
garima.mishra@kotak.com
model, TeamLeases average employee cost reaches 25,000 by FY2023 (the salary cap for Mumbai: +91-22-4336-0862
which tax benefits are available); we thus assume tax benefits to taper off by FY2025 (sunset of
FY2023 tax benefits). Usual disclaimers apply tax benefits may be lower than expected on
lower gross employee addition and other conditions including a sunset clause, which the
government may impose. We retain ADD as TeamLease remains well-positioned to benefit from
the formalization of a large labor market.
Mumbai: +91-22-4336-0000
Others TeamLease Services
Exhibit 1: 1QFY18 EBITDA miss on Ind-AS-related adjustments and weaker performance of HR services
Consolidated quarterly financials of TeamLease, March fiscal year-ends (Rs mn)
Change (%) Yoy growth

1QFY18 1QFY18E 1QFY17 4QFY17 KIE yoy qoq FY2018 FY2017 (%)
Revenue from operations 8,530 9,018 6,875 8,169 (5.4) 24.1 4.4 38,263 30,419 25.8
Employee benefits expense (8,227) (8,687) (6,685) (7,865) (5.3) 23.1 4.6 (36,874) (29,377) 25.5
Other expenses (172) (181) (140) (183) (4.9) 23.3 (6.2) (728) (599) 21.6
Total Expenses (8,399) (8,868) (6,824) (8,049) (5.3) 23.1 4.4 (37,602) (29,976) 25.4
EBITDA 130 150 51 120 (13.2) 156.0 8.3 661 443 49.3
Finance Costs (2) (2) (2) (3) 24.1 15.0 (9.0) (11) (11)
Depreciation and amortization expense (20) (13) (10) (21) 54.4 102.6 (5.9) (81) (43) 89.3
Other income 58 36 61 58 63.3 (4.9) 0.3 155 224 (30.8)
PBT 166 171 100 154 (2.7) 65.8 7.5 724 613 18.1
Tax expense (2) (58) (36) 183 (96.3) (94.1) (101.2) (17) 50 (134.4)
Net profit 164 113 64 338 45.5 156.2 (51.5) 707 663 6.5
Operational metrics
Number of associate employees 153,402 154,902 134,602 149,902 (1.0) 14.0 2.3 143,852 126,463 13.8
Mark-up per associate per month 729 702 712 702 3.8 2.4 3.8 707 702 0.8
Key ratios (%)
Employee cost as proportion of sales 96.5 96.3 97.2 96.3 96.3 96.6
Other cost as proportion of sales 2.0 2.0 2.0 2.2 2.0 2.0
EBITDA margin 1.5 1.7 0.7 1.5 1.7 1.5
Tax rate 1.3 34 36 (119) 34 (8)
Segmental performance
Revenues
Staffing and allied services 8,165 8,650 6,782 7,806 (5.6) 20.4 4.6 36,483 29,453 23.9
IT staffing services 246 251 234 (2.1) nm 5.2 1,058 508 nm
Other HR services 118 150 93 129 (21.1) 26.9 (8.0) 722 458 57.8
Total operating income 8,530 9,051 6,875 8,169 (5.8) 24.1 4.4 38,263 30,419 25.8
EBIT
Staffing and allied services 124 78 108 59.6 15.0
IT staffing services 27 34 nm (19.3)
Other HR services 7 0 24 2,425 (71.2)
Unallocated 11 24 (8) (56.5) (228.9)
Total 169 102 157 64.9 7.4
Less: finance costs (2) (2) (3) 15.0 (9.0)
PBT 166 100 154 66.0 7.7
xx

TeamLease Services Others
Exhibit 2: Steady hiring across sectors led to stable associate employee headcount addition
Associate employee count for TeamLease, March fiscal year-ends
(#) Associate employee count (#)

140,000
130,000
120,000
110,000
100,000
90,000
80,000
70,000
2QFY16
4QFY16
3QFY17
1QFY18
1QFY16
3QFY16
1QFY17
2QFY17
4QFY17
Exhibit 3: Core employee productivity holding steady

Associates and trainees handled per core staffing employee, March fiscal year-ends
(#) Associate+trainee count (#) [LHS] (#)

180,000 Associates+trainees handled per core staffing employee (#) [RHS] 220
160,000
200
140,000
120,000 180
100,000
160
80,000
60,000 140
40,000
120
20,000
0 100
4QFY17
1QFY18
1QFY17
2QFY17
3QFY17
2011
2012
2013
2014
2015
2016
Earnings call takeaways
GST benefit would manifest in two ways either unorganized players become organized,
thereby leading to lesser pricing pressure for the likes of TeamLease; or they go out of
business, which leads to a market-share gain by organized staffing companies. The
market-share gain process can pick up pace towards end of FY2018 when employers
start taking cognizance of their vendors tax filing performance.
Certain companies that were not employing temporary staff due to additional service tax
payment requirement can now do so as they will get full input tax credit on the GST paid
on such services.
Uniform wage code, which mandates a minimum wage of ~18,000 for all employees is
a negative for the formal sector staffing sector. The company is representing against the
same.

Earnings changes
Our FY2018 EPS is cut by 4% as we incorporate Ind-AS-related changes.
Our FY2019 EPS estimate gets raised by 5% due to higher tax benefit (flow-through
impact of employees added in the previous year).
We were giving TeamLease the benefit of Section80JJAA tax benefits only until FY2019.
However, based on the companys revised guidance we accord these benefits for a longer
time horizon; consequently we raise our FY2020 EPS estimate by 38%.
Exhibit 4: Summary of changes to assumptions for TeamLease, March fiscal year-ends
New estimates Old estimates % revision

2018E 2019E 2020E 2018E 2019E 2020E 2018E 2019E 2020E
Total
Sales (Rs mn) 38,263 46,389 56,135 37,915 45,879 55,522 0.9 1.1 1.1
Sales growth (%) 25.8 21.2 21.0 24.6 21.0 21.0
EBITDA (Rs mn) 661 855 1,082 676 869 1,096 (2.2) (1.7) (1.3)
EBITDA margin (%) 1.7 1.8 1.9 1.8 1.9 2.0
EBIT (Rs mn) 580 759 962 634 822 1,043 (8.5) (7.6) (7.8)
PBT (Rs mn) 724 937 1,188 766 975 1,240 (5.5) (3.8) (4.2)
Tax rate (%) 2.4 2.2 2.1 3.8 10.4 32.0
Net Profit (Rs mn) 707 917 1,163 737 874 843 (4.1) 5.0 38.0
EPS (Rs) 41.3 53.6 68.0 43.1 51.1 49.3 (4.1) 5.0 38.0
EPS growth (%) 7 30 27 11 19 (4)
Temporary staffing
Temporary staff count (#) 143,852 163,631 185,721 143,536 162,913 184,906 0.2 0.4 0.4
Salary per employee (Rs) 256,664 274,630 293,855 257,762 275,805 295,112 (0.4) (0.4) (0.4)
Fee per employee per month (Rs) 707 736 765 734 767 802 (3.7) (4.1) (4.6)
Revenue (Rs mn) 36,331 44,180 53,607 36,002 43,689 53,017 0.9 1.1 1.1
EBITDA (Rs mn) 447 566 747 416 550 738 7.5 3.0 1.2
EBITDA margin (%) 1.2 1.3 1.4 1.2 1.3 1.4
IT Staffing
Revenue (Rs mn) 1,058 1,150 1,252 1,202 1,318 1,446 (12.0) (12.8) (13.4)
EBITDA (Rs mn) 155 165 180 176 189 208 (12.1) (13.0) (13.6)
EBITDA margin (%) 14.7 14.3 14.3 14.7 14.4 14.4
Apprentice staffing
Apprentice count (#) 32,815 41,018 49,222 32,815 41,018 49,222 0.0 0.0 0.0
Average monthly fee per apprentice (Rs) 450 450 450 450 450 450 0.0 0.0 0.0
Revenue (Rs mn) 152 199 244 152 199 244 0.0 0.0 0.0
EBITDA (Rs mn) 58 100 122 61 100 122 (5.0) 0.0 0.0
EBITDA margin (%) 38.0 50.0 50.0 40.0 50.0 50.0
Other HR services
Revenue (Rs mn) 722 861 1,032 559 673 815 29.2 27.9 26.7
EBITDA (Rs mn) 3 25 34 8 22 28 (67.1) 12.3 18.8
EBITDA margin (%) 0.4 2.9 3.3 1.5 3.3 3.5
Our TP increase to 1,480 (from 1,245) primarily on account of incorporation of tax

benefits until FY2025 (FY2019 earlier). We note this assumption is fairly subjective, as the
tax benefit calculation is dependent on the gross employee addition, their salaries
(employees earning more than 25,000 a month are not eligible), etc. The government
putting in a sunset clause, or any other amendments, remains key variables.

TeamLease Services Others
Exhibit 5: DCF-based June 2019E target price of Rs1,480

DCF-based valuation of TeamLease, March fiscal year-ends (Rs mn)
2016 2017 2018E 2019E 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E 2035E
Net sales 28,509 34,885 44,492 53,941 65,273 78,986 94,790 112,808 133,123 155,765 180,701 206,917 234,144 261,442 288,000 391,790
Yoy growth (%) 27 22 28 21 21 21 20 19 18 17 16 15 13 12 10 5
EBIT 228 400 580 759 962 1,219 1,501 1,831 2,214 2,653 3,144 3,652 4,133 4,615 5,083 6,915
EBIT margin (%) 0.8 1.1 1.3 1.4 1.5 1.5 1.6 1.6 1.7 1.7 1.7 1.8 1.8 1.8 1.8 1.8
EBIT*(1-tax rate) 156 433 566 743 941 1,187 1,454 1,765 1,771 1,751 2,075 2,411 2,728 3,046 3,355 4,564
Depreciation/Amortisation 30 43 81 96 121 151 181 215 253 295 343 393 446 500 554 768
(Inc.)/Dec. in working capital (150) (19) (297) (264) (317) (383) (442) (442) (484) (608) (670) (704) (731) (733) (714) (469)
Capital expenditure (46) (839) (94) (91) (136) (137) (142) (162) (183) (204) (225) (236) (245) (246) (239) (157)
Free cash flows (10) (382) 257 484 609 817 1,051 1,376 1,357 1,234 1,523 1,863 2,197 2,567 2,956 4,707
Years discounted 1 2 3 4 5 6 7 8 9 10 11 16
Discount factor 0.92 0.81 0.72 0.64 0.57 0.51 0.45 0.40 0.36 0.32 0.28 0.16
Discounted cash flow 558 665 760 885 776 627 688 748 784 814 833 736
Associate employee count (#) 108,860 126,463 143,852 163,631 185,721 208,937 236,116 264,470 293,583 322,966 352,060 378,494 401,803 420,521 438,007 477,763
Risk-free rate 6.5

Risk premium 6.0
Beta (X) 1.0 WACC (%)
Cost of equity (%) 12.5 1,480 11.5 12.0 12.5 13.0 13.5
WACC (%) 12.5 4.0 1,621 1,505 1,404 1,315 1,236
Terminal growth rate (%) 5.0 Terminal 4.5 1,673 1,548 1,439 1,344 1,261
Sum of free cash flow 12,143 growth 5.0 1,734 1,597 1,480 1,378 1,288
Terminal value 10,309 rate (%) 5.5 1,805 1,654 1,526 1,415 1,320
Enterprise value 22,452 6.0 1,889 1,720 1,579 1,459 1,355
Investments
Net debt (2,845)
Equity value 25,296
No. of shares (mn) 17
Equity value per share (Rs) 1,480
WACC used (%) 13

Terminal growth rate 5
Capitalization rate 8
Terminal value calculation
Cash flow in terminal year 4,707
Terminal value 65,897
Discount period (years) 16
Discount factor 0.2
Discounted value 10,309

Exhibit 6: Consolidated income statement, balance sheet and cash flow, March fiscal year-ends, 2011-20E (Rs mn)
2011 2012 2013 2014 2015 2016 2017 2018E 2019E 2020E
Income statement
Total operating income 6,868 9,258 12,507 15,296 20,071 25,049 30,419 38,263 46,389 56,135
Associate employee expenses (6,351) (8,627) (11,755) (14,432) (18,990) (23,773) (28,606) (35,961) (43,663) (52,917)
Gross profit 518 632 752 865 1,081 1,276 1,812 2,302 2,726 3,218
EBITDA (390) (207) (111) 120 241 258 443 661 855 1,082
Depreciation (66) (38) (36) (19) (27) (30) (43) (81) (96) (121)
EBIT (456) (245) (147) 101 213 228 400 580 759 962
Other income 115 83 110 79 114 154 224 155 189 237
Financial charges (2) (3) (5) (2) (1) (4) (11) (11) (11) (11)
Pre-tax profit (343) (165) (43) 178 326 378 613 724 937 1,188
Taxation (18) (130) 50 (17) (20) (25)
Net income (recurring) (343) (165) (43) 178 308 248 663 707 917 1,163
Exceptional items (53)
Net income (reported) (395) (165) (43) 178 308 248 663 707 917 1,163
Weighted average number of shares (mn) 12 15 15 15 15 16 17 17 17 17
EPS (Rs) (33.2) (10.8) (2.8) 11.6 20.1 15.9 38.8 41.3 53.6 68.0
Balance sheet
Equity share capital 4 5 5 5 5 171 171 171 171 171
Reserves & surplus 215 1,042 1,005 1,183 1,483 2,945 3,640 4,347 5,264 6,427
Shareholders funds 219 1,047 1,010 1,188 1,488 3,116 3,811 4,518 5,435 6,598
Loan funds 29 81 121 8 194 11
Total source of funds 247 1,127 1,131 1,197 1,488 3,309 3,822 4,518 5,435 6,598
Net fixed assets 211 195 107 107 95 111 1,029 1,042 1,037 1,053
Investments 0 0 0 0 0 103 103 103 103
Cash balances 180 822 780 847 1,147 2,590 1,593 1,979 2,637 3,468
Current assets 574 952 1,355 1,478 1,827 3,039 4,048 5,145 6,237 7,547
Inventories 15 9 5 2 2 2 2 2 2 3
Sundry debtors 345 543 618 595 813 1,205 1,872 2,355 2,855 3,455
Other current assets 76 114 340 367 498 1,054 982 1,235 1,497 1,812
Loans and advances 139 286 392 515 514 778 1,192 1,552 1,882 2,278
Current liabilities and provisions 718 842 1,112 1,236 1,638 2,476 3,101 3,900 4,729 5,722
Total application of funds 247 1,127 1,131 1,197 1,488 3,309 3,822 4,518 5,435 6,598
Cash flow statement
Operating cash flow before WCchanges (390) (207) (111) 120 222 45 351 644 835 1,057
Change in working capital/ other adjustments 144 (255) (133) 1 53 (150) (19) (297) (264) (317)
Capital expenditure (293) 61 161 60 99 (22) (917) 61 98 101
Free cash flow (539) (400) (83) 181 375 (127) (585) 408 669 842

BUY
Zee Entertainment Enterprises (Z)
Media AUGUST 09, 2017
UPDATE
NDR takeaways. We hosted Punit Goenka (MD & CEO, Zee) for investor meetings in Price (`): 542
UK. The management is confident of healthy ad growth driven by viewership strength, Target price (`): 570
15% CAGR in domestic subscription revenue and 30%+ EBITDA margin after absorbing
BSE-30: 32,014
investments in digital. Further expansion in regional, refresh of digital offerings and
movies are the three areas of focus and new growth drivers of the company. Zee is
positioned well and focused to deliver outperformance for the foreseeable future.
Zee Entertainment Enterprises
52-w eek range (Rs) (high,low ) 590-428 EPS (Rs) 13.9 15.8 19.7
Market Cap. (Rs bn) 519.3 EPS grow th (%) 27.7 13.1 25.1
MFs 4.2 EBITDA (Rs bn) 19.3 22.1 26.4
Price performance (%) 1M 3M 12M EV /EBITDA (X) 24.8 21.7 18.0
Absolute 6.6 6.9 8.9 ROE (%) 20.8 20.9 22.1
Rel. to BSE-30 3.5 (1.1) (5.2) Div. Yield (%) 0.4 0.6 0.8
Business on a strong footing; focused bets to steer the company ahead
Zees strong performance over FY2013-17 was led by an increase in network viewership share
to 17% from 12%. The management attributed its success to (1) strategy to lead
fragmentation and (2) stable team for key revenue and creative functions. We expect Zees
outperformance to continuerecent comeback of Zee TVs ratings and continued strength in
regional genres positions it well. Increase in programming hours on Zee TV and &TV and new
launches (Malayalam GEC and movie channels in Kannada, Tamil) would enable further market
share gains in the medium term. Zee stepped up investments on movie acquisition; a balanced
mix of movies (blockbuster and library) can support healthy growth and profitability. Overall,
Zee can deliver above-industry ad growth and 15% growth in domestic subscription revenue.
Ad environment in July was weaker than in June due to GST implementation. Expect weak 2Q.
Digitalgearing for a refresh; Zee has the ingredients, execution holds the key to success
Zee has stepped up investments, is augmenting team and is in the process of refreshing its
digital platform (OTT) in 2H. Its platform will have a large collection of movies, exclusive digital
content (original + 3rd party) for kids and youth, and existing TV content. All revenue models
(AVOD, SVOD and TVOD) will co-exist. Zees investment in Margo networks would enable
efficient distribution of digital content. Zee is open to acquisitions in media content and media
tech space. In our view, it will take a long time for subscription-based model to evolve in India.
Ad supported model calls for measured and well-calibrated investments in content. Key success
factor would be the ability to produce quality content for a digital audience at scale. We believe
Zee has the right ingredients and the extent of success will hinge on execution and willingness
to invest. Having lost the first-mover advantage, Zee is cognizant of the need for investments.
Rich valuations well-deserved
Zees strategy, execution, continuous investments, profitability and structural improvements Jaykumar Doshi
(digitization) give us comfort. We expect Zee to deliver above-industry revenue growth and 33- jaykumar.doshi@kotak.com
Mumbai: +91-22-4336-0863
34% EBITDA margin (excluding investments in digital) for the foreseeable future. Valuations are
rich but sustainable given high earnings visibility. Successful execution on the digital front would
hold key to sustainability of valuations in the long-term; we believe Zee has the potential and
will watch its digital refresh closely. We value Zee at 28X Jun-19 earnings (excl. RPS impact).

Mumbai: +91-22-4336-0000
Media Zee Entertainment Enterprises
Key takeaways from NDR
Zee TVslippage, corrective measures, comeback and plans ahead. Flagship

channel Zee TVs viewership slipped in 2HFY17. The management attributed it to
mistakes in content strategy. The change in leadership and subsequent course correction
in content strategy helped Zee TV make a strong comeback. We note that Zee TV is back
to #2 spot in the month of July. The management indicated that it has plans to increase
original programming to 28 hrs/week from current 25 hrs/week by the end of Sep-17
quarter.
&TVinvestments, performance and expectations. Zee management indicated that it

expects &TV (its second Hindi GEC TV) to break-even in FY2019 in line with its initial
guidance of break-even within three years. Zees cumulative investments (operating
losses) in &TV would be close to the lower end of the guidance of `7-10 bn loss. We note
that viewership share of &TV has stagnated at 6% despite a healthy share of 4-5% in its
opening week (March 2015). The management has increased programming hours on
&TV to 26 hrs/week in the recent past and it targets 10% viewership share in Hindi GEC.
Regional portfoliosuccess in Tamil and expansion plans. Zee Tamils viewership

share has increased to about 15% from 5% over the past 15 months after almost eight
years of investments without much luck. Zee management attributed the success to the
new team that runs Zee Tamil; it is confident of the good work to continue. All other
regional channels are performing well. Zee has plans to close a few gaps in its regional
portfolio in the medium term(1) launch of Malayalam GEC in Kerala market, (2) movie
channels in regional genres where it operates GEC but does not have a movie channel
(Kannada and Tamil).
Domestic subscription revenue growthexpect 15% CAGR irrespective of

implementation of TRAI tariff order. Zee management reiterated its guidance of
15% CAGR in domestic subscription revenues over the next three to five years led by
(1) monetization in phase III markets, (2) increase in TV penetration from 64% and HD
penetration, (3) modest improvement in monetization in phase I-II markets, and
(4) gradual monetization from phase IV markets. On the court case, pertaining to TRAI
tariff order, the High Court verdict would be out within a couple of months but the
management expects the losing party to approach the Supreme Court. As per Zee
management, the matter can remain sub-judice for at least six to nine months if not
more. Separately, Zee management indicated that it is confident of similar growth
trajectory even if it were to implement TRAI tariff order.
International subscription revenue growthflat to low single digit in c/c terms.

Zee management caters to South Asian diaspora in international markets. The
management indicated that its penetration is already high and this market is saturated.
Growth in international subscription revenue would be flat to low single digits in c/c
terms. Zee intends to cater to this market through its OTT platform. Digital offering and
content will help it attract new viewers and increase subscription yields as compared to
traditional distribution platform (we note traditional distributors retain the bulk of the
ARPU).
International ad revenue growthsluggish in the near term. Zees international ad

revenue growth has been impacted by weakness in the Middle East market and ban of
advertising on foreign channels in Bangladesh. The management is working to resolve the
latter but is unable to guide on timelines as of now.

Zee Entertainment Enterprises Media
Profitability. Zees ex-sports EBITDA margin of 33% in FY2017 was slightly suppressed
by investments in new initiatives. The management indicated that but for investments, it
its underlying EBITDA margin is 35-36%. That said, it reiterated EBITDA margin guidance
of 30%+ in view of its intent to reinvest margins in excess of 30% in the business. Key
investments in 2HFY18 would be in refreshing its OTT offering. We note that our margin
estimate of 33.1-33.8% for FY2018/19 does not factor in digital investment as exact
timelines and quantum of investments are not known. Given this, there is about 150-200
bps risk to our margin forecast.
Management thoughts on digital. Zee views digital platform as a medium to engage

with a new audience that is not present on TV. As per the CEO, people born in India after
2005 are not TV viewers. Digital presents an opportunity to content owners/producers to
reach out to this new audience. Digital will supplement TV in the near term; as per BARC
data time spent on TV has not dropped over the past nine months since the launch of
RJio even as data consumption has increased to 9X over the past nine to -12 months.
That said, the management does concede that in the medium to long term the shift of
consumption from linear to digital platform would result in cannibalization of revenues.
Zee views itself as an entertainment content company with the ability to produce close to
500 hours of original content per week across nine languages (Zee Networks weekly
production on TV).
Key competitors in digital ecosystem. Zee views market leader, Hotstar, as the key
competitor of its OZEE platform. Given the limited potential of subscription-based model
in India, it does not see Netflix making inroads in the Indian market in a big way. Amazon
Prime and Voot are other platforms it is closely watching.
Increase in inventory, loans & advances and cash generation. Zee has stepped up its
investment in movies following its exit from sports broadcasting. The management
indicated that the increase in inventory and loans and advances in FY2017 was largely
pertaining to outgo for acquisition of movie rights (and small working capital investment
in movie production business). As per our estimates, cumulative outgo on movies was
about `9 bn in FY2017 as against `3-4 bn/year in the previous 2-3 years. It was towards
acquisition of (1) satellite/digital rights of new movies and a basket of old movies across
Hindi and regional genres, and (2) advances paid for rights of upcoming movies. The
management has indicated that its investments in movies would remain elevated in
FY2018 and perhaps in FY2019 following which it expects moderation. Increase in
working capital and acquisitions would weigh on cash generation in FY2018.
Betting big on movies. Movies are an important part of Zees content offering. The
management indicated that its movie genre has grown faster than the companys ad
growth. The payback period of tentpole (blockbuster) movies is elongated (say 3-5 years),
but the payback of a library of old movies is about a year. A mix of new and old movies is
required for running movie channels; if the mix is balanced well it can support
profitability. We note that Zees elevated investments in movies is partly in view of its
plans to launch regional movie channels in Tamil and Kannada markets and partly on
account of digital rights acquired for OTT platform.
Movie production. Zee plans to produce 10-11 movies this year across a number of
languages. Its endeavor is to produce 25 movies annually in the medium term. The
management indicated that typically, it will produce/co-produce about two movies having
production cost in the range of `600-800 mn. All other movies would have much lower
budgets. The management indicated that working capital locked in this business is about
`1 bn as of now and peak working capital requirement of this business would be `2.5
bn.

Exit from sports. The key reasons for exit from the sports business were(1) Break-even
in sports business was a moving goalpost. Zee operated sports broadcasting for about 10
years and experienced break-even targets being pushed back a number of times due to
very high inflation in sports content costs, (2) Consideration offered for sports business
was compelling and it generated healthy return for Zee after factoring cumulative
investments in the business, (3) lastly, Zee is free to re-enter sports broadcasting after a
non-compete of four years if at all outlook changes dramatically.
Content contracts with Reliance Jio. Zee signed a 1-year content contract with RJio in
early/mid-2016 prior to the launch of RJios mobile services. The management indicated
that last years contract was at a negligible price. It is presently renegotiating its content
agreement with RJio. Zee views itself as a content entertainment company and it does
not mind providing its content to RJio so long as it gets satisfactory subscription revenue
from it.
Capital allocation. Zee management indicated that it intends to keep cash and cash
equivalents of `10 bn and return excess cash generated to investors. Zee cash and cash
equivalents stood at `35.3 bn as at Jun-17 end. Of this, about `21 bn would go towards
full redemption of all redeemable preference shares subject to board approval. We note
that, in the recent annual report, Zee has articulated its dividend policy of 25-30%
dividend payout ratio.
Near-term ad outlook2Q could be weaker than 1Q. Zee management indicated

that its ad revenue growth had recovered after demonetization to 14-15% in the of April
and May. However, it declined in June as advertisers pushed back campaigns ahead of
GST implementation. July was weaker than June for TV advertising. Given this, ad growth
in 2Q could be weaker than in 1Q. That said, we note that recovery in Zee TVs
viewership would aid ad growth in 2Q with some lag.

Exhibit 1: BARC ratings market share, 09-Oct-15 to 28-Jul-17 (Week 41, 2015 to Week 30, 2017) (%)
Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17
Hindi GEC- Ratings market share (Urban + Rural) in top 7 channels (%)
Star Plus 21.0 20.7 21.3 21.7 22.0 21.9 20.9 20.8 20.7 21.5 22.1 21.7 21.7 21.8 21.0 19.8
Colors 20.7 20.8 20.4 18.2 17.0 17.9 20.8 20.8 20.8 21.5 19.7 18.8 18.8 16.5 16.7 17.1
Zee TV 16.9 17.9 17.5 19.0 18.2 16.9 15.1 14.9 14.6 14.1 15.1 16.1 16.6 18.2 17.4 20.4
Life Ok 14.9 14.2 12.9 13.0 13.1 13.1 12.5 12.0 12.3 11.6 12.2 11.8 11.5 11.7 11.6 11.4
Sony TV 9.3 9.8 11.2 11.6 11.4 12.8 12.8 13.4 13.9 13.4 13.6 12.9 12.5 11.9 12.5 12.5
SAB 11.4 11.3 11.6 11.2 11.7 11.4 12.3 11.9 11.5 11.5 11.7 13.1 13.9 14.6 15.1 12.5
&TV 5.8 5.2 5.0 5.3 6.6 6.1 5.7 6.2 6.2 6.4 5.6 5.6 5.1 5.3 5.8 6.3
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Zee TV's market share in Urban and Rural markets (%)

Urban 14.4 15.0 14.8 15.6 15.4 14.6 12.9 12.9 12.6 12.2 12.9 14.0 14.4 16.3 15.5 18.0
Rural 22.3 23.3 22.9 24.7 24.1 21.4 19.3 18.5 18.7 18.4 19.5 19.9 20.6 21.7 21.4 25.5
Network market share (Urban + Rural) in Hindi GEC (%)

Zee 22.7 23.1 22.5 24.3 24.8 23.0 20.7 21.0 20.8 20.5 20.7 21.6 21.6 23.5 23.2 26.7
Star 35.9 34.9 34.3 34.7 35.1 35.0 33.4 32.8 33.0 33.1 34.2 33.5 33.2 33.5 32.6 31.2
Sony 20.7 21.1 22.8 22.8 23.1 24.2 25.1 25.4 25.4 24.9 25.3 26.1 26.4 26.5 27.5 25.0
TV 18 20.7 20.8 20.4 18.2 17.0 17.9 20.8 20.8 20.8 21.5 19.7 18.8 18.8 16.5 16.7 17.1
Free-to-Air Hindi GEC- Ratings market share (Urban + Rural) in top 4 channels (%)
Zee Anmol 26.7 25.7 26.4 29.1 29.4 28.3 29.2 25.8 24.2 22.6 24.6 23.7 22.1 23.8 27.9 29.9
Star Utsav 23.3 26.5 27.7 27.8 30.8 27.0 23.6 24.1 21.8 25.2 23.5 21.5 22.0 20.1 15.4 14.2
Colors Rishtey 22.9 19.6 19.3 17.8 16.6 20.5 22.4 22.2 27.5 29.4 26.4 24.4 25.9 25.3 28.4 28.9
Sony PAL 27.1 28.2 26.6 25.3 23.2 24.2 24.8 27.8 26.5 22.8 25.6 30.5 30.0 30.9 28.3 27.1
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Hindi movies- Ratings market share (Urban + Rural) in top 8 channels (%)
Sony Max 40.8 39.7 24.2 20.5 20.1 18.8 18.7 18.3 17.3 17.0 16.6 16.7 35.2 29.2 18.9 18.0
Zee Cinema 20.4 18.2 18.1 18.6 17.7 15.5 16.2 16.5 15.7 14.9 14.7 13.8 11.3 12.5 13.9 14.0
Star Gold 17.9 18.4 18.9 17.2 16.1 15.6 12.9 11.9 12.1 13.3 13.6 12.9 9.9 11.0 13.6 13.8
Mov ies OK 11.3 8.6 10.2 10.2 9.0 8.1 7.6 8.2 7.9 7.7 7.2 7.3 5.3 5.9 7.2 8.1
& Pictures 9.6 9.2 8.9 9.3 9.1 8.2 8.1 8.6 7.8 8.9 8.0 7.4 5.8 6.5 7.2 7.8
Rishtey Cineplex 5.8 10.0 11.1 9.1 8.2 8.3 10.4 11.2 10.2 10.8 12.7 9.7 11.4 12.3 13.7
Sony Wah 9.7 13.1 18.9 15.0 17.0 15.4 17.1 16.1 16.2 16.8 12.9 12.9 15.1 13.9
Zee Anmol Cinema 10.6 11.2 10.5 10.9 11.9 12.8 12.3 10.0 10.6 11.8 10.8
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Network market share (Urban + Rural) in Hindi movies (%)

Zee 30.0 27.4 27.1 27.9 26.8 34.3 35.5 35.7 34.4 35.7 35.6 33.5 27.1 29.6 32.9 32.5
Star 29.3 27.1 29.1 27.4 25.1 23.6 20.5 20.1 20.0 21.1 20.8 20.3 15.3 16.9 20.8 21.9
Sony 40.8 39.7 33.9 33.6 39.0 33.9 35.7 33.8 34.4 33.1 32.9 33.6 48.0 42.1 33.9 31.9
TV 18 5.8 10.0 11.1 9.1 8.2 8.3 10.4 11.2 10.2 10.8 12.7 9.7 11.4 12.3 13.7
Notes:
(a) Sharp jump in Sony Max ratings in the months of April and May is due to IPL.
Source: BARC, Kotak Institutional Equities

Exhibit 2: BARC ratings market share, 09-Oct-15 to 28-Jul-17 (Week 41, 2015 to Week 30, 2017) (%)
Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17
Marathi- Ratings market share in top 7 channels (%)
Zee Marathi 37.4 35.7 34.9 36.8 39.4 40.2 45.0 43.3 45.3 47.3 47.4 44.4 45.8 44.3 43.1 40.5
Zee Talkies 17.2 14.8 14.8 15.7 15.9 15.7 13.5 13.1 12.7 13.5 12.9 17.8 19.1 18.1 18.0 18.5
Colors Marathi 25.1 25.4 24.8 22.3 19.8 17.3 16.0 16.7 18.7 15.3 15.0 14.6 12.6 13.1 13.4 12.9
Star Prav ah 7.4 7.1 8.3 8.0 8.7 8.9 8.3 9.0 8.9 9.2 10.8 9.3 10.2 11.3 11.3 11.1
F akt Marathi 7.9 7.3 6.4 8.1 8.1 7.7 5.8 7.0 5.7 6.4 4.7 4.7 4.0 4.1 4.8 4.7
Maiboli 5.0 9.7 10.8 9.1 8.1 5.6 5.1 4.6 4.4 3.9 4.7 4.2 3.7 2.8 2.8 2.9
Zee Yuva 4.7 6.3 6.3 4.3 4.4 4.5 4.9 4.6 6.2 6.7 9.5
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Network market share in top 7 Marathi channels (%)

Zee Network 54.5 50.4 49.8 52.5 55.3 60.5 64.8 62.7 62.3 65.2 64.8 67.1 69.4 68.6 67.8 68.5
Bangla- Ratings market share in top 5 channels (%)

Zee Bangla 30.1 30.9 31.7 34.7 33.2 30.3 30.6 30.0 29.4 30.6 29.5 29.3 29.4 27.6 28.4 28.1
Star J alsha 44.0 42.3 43.6 41.2 45.1 49.4 46.7 48.4 48.3 51.0 51.1 49.1 49.0 49.5 49.7 49.9
J alsha mov ies 11.9 14.0 12.6 12.8 11.2 10.4 12.4 11.4 11.8 9.3 10.1 12.0 10.2 10.2 10.4 10.2
Colors Bangla 6.6 5.8 5.7 5.1 4.1 3.9 4.3 4.4 4.6 4.1 3.5 3.4 3.6 4.8 5.3 5.6
Zee Bangla Cinema 7.3 7.0 6.4 6.1 6.4 6.0 6.0 5.8 5.8 5.0 5.8 6.2 7.9 7.9 6.2 6.2
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Network market share in top 5 Bangla channels (%)

Zee Network 37.5 37.9 38.1 40.8 39.6 36.3 36.6 35.8 35.3 35.6 35.3 35.5 37.3 35.5 34.6 34.3
Star Netw ork 55.9 56.3 56.1 54.1 56.3 59.8 59.1 59.8 60.1 60.3 61.2 61.1 59.1 59.7 60.1 60.1
Telugu- Ratings market share in top 7 channels (%)

Zee Telugu 23.3 24.1 22.2 20.8 20.2 20.6 19.5 18.4 19.6 20.9 19.6 19.8 20.2 20.7 18.1 17.6
Star Maa TV 20.5 20.1 20.3 18.2 18.9 18.1 18.1 19.7 19.4 19.4 20.0 18.6 17.4 17.7 19.3 22.1
Gemini TV 18.5 17.4 18.8 21.6 24.0 25.2 25.0 25.9 25.4 24.0 24.7 25.2 25.7 23.8 22.3 20.8
ETV Telugu 21.5 21.6 21.6 20.8 21.5 20.7 21.1 21.4 19.8 21.1 18.9 19.6 20.2 18.9 19.6 19.2
Gemini Mov ies 9.1 9.6 10.2 9.8 9.6 8.4 8.0 7.8 8.2 7.5 8.0 8.0 7.4 8.0 8.5 8.0
Zee Cinemalu 2.0 2.7 2.5 2.8 2.8 3.6 3.4 3.8 4.1 4.8 5.2
Star Maa mov ies 7.1 7.1 6.8 8.8 5.7 4.9 5.6 4.3 4.8 4.3 5.0 5.3 5.3 6.8 7.4 7.2
Total 92.9 92.9 93.2 91.2 94.3 95.1 94.4 95.7 95.2 95.7 95.0 94.7 94.7 93.2 92.6 92.8
Kannada- Ratings market share in top 6 channels (%)

Colors Kannada 29.1 27.5 30.3 30.2 30.2 31.8 29.8 30.5 29.3 31.4 28.2 27.5 28.0 30.0 28.1 26.4
Colors Super 2.5 2.2 3.5 3.9 4.3 4.5 6.0 6.0 6.4 6.9 6.8 7.2
Zee Kannada 17.9 20.3 18.7 19.1 19.6 18.1 19.8 20.8 22.0 21.3 21.1 20.9 22.4 21.1 20.8 21.7
Uday a TV 16.4 15.6 17.4 16.7 15.5 15.7 11.7 10.6 9.9 10.7 11.5 10.9 10.8 11.3 12.2 13.1
Suv arna 19.0 17.1 15.0 16.2 17.2 17.0 19.5 19.8 19.4 18.1 18.1 18.8 16.4 14.4 15.4 15.4
Uday a Mov ies 17.6 19.5 18.6 17.8 15.0 15.3 15.8 14.3 15.0 13.9 15.1 16.0 15.9 16.3 16.7 16.2
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Tamil- Ratings market share in top 5 channels (%)

Sun TV 61.1 58.4 56.6 56.5 57.1 56.4 58.9 58.1 57.9 58.4 56.8 55.9 55.0 50.9 49.5 46.9
STAR V ijay 10.1 10.9 11.7 12.6 11.7 11.7 9.8 9.8 10.5 11.2 11.5 12.5 13.8 15.3 16.6 21.1
KTV 17.0 18.7 18.2 16.1 15.0 15.4 13.8 14.8 14.2 13.4 14.7 15.3 15.7 16.5 17.2 15.9
Polimer 4.7 5.2 4.9 4.4 4.6 4.4 4.3 4.0 4.2 4.4 4.4 4.4 4.6 4.5 3.8 3.5
Zee Tamizh 7.2 6.9 8.6 10.3 11.7 12.2 13.2 13.2 13.2 12.7 12.5 12.0 10.8 12.9 12.9 12.5
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Oriya- Ratings market share in top 4 channels (%)

Sarthak TV 53.9 51.9 52.7 53.2 53.2 53.5 55.3 54.0 56.1 53.6 45.2 50.7 47.7 49.7 47.3 52.3
Tarang TV 29.9 32.5 34.1 32.6 31.6 30.0 27.3 25.9 25.9 28.9 33.1 32.0 34.1 35.6 36.3 32.4
Odisha TV 7.5 7.8 7.6 9.1 10.3 10.1 9.7 12.3 10.5 10.0 13.5 9.9 10.8 6.4 8.7 9.5
Colors Oriy a 8.8 7.9 5.6 5.1 5.0 6.4 7.7 7.9 7.4 7.6 8.2 7.4 7.5 8.3 7.7 5.8
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Source: BARC, Kotak Institutional Equities

Exhibit 3: Consolidated financial summary of Zee Entertainment, March fiscal year-ends, 2013-20E (Rs mn)
2014 2015 2016 2017 2018E 2019E 2020E

Total revenues 44,217 48,837 58,514 64,332 66,715 78,168 89,423
EBITDA 12,033 12,538 15,094 19,260 22,106 26,403 30,781
Other income 1,807 2,278 2,016 2,240 3,382 3,599 4,102
Interest (158) (103) (123) (161) (125) (130) (135)
Depreciation (501) (673) (840) (1,152) (1,344) (1,488) (1,604)
Pretax profits 13,181 14,040 16,147 20,187 24,020 28,385 33,144
Extraordinary items (331) 12,234
Taxes (4,291) (4,284) (5,528) (6,805) (8,887) (9,452) (11,037)
Minority interest 21 20 (22) 5 5 5 5
RPS div idends (incl tax) (101) (1,453) (1,457) (1,211) (1,211) (969) (727)
PAT 8,810 8,323 8,810 22,205 13,926 17,969 21,385
Adj PAT (pre-exceptional; excl RPS impact) 8,911 9,776 10,482 13,386 15,137 18,937 22,106
EPS (Rs) 9.2 8.7 9.2 23.1 14.5 18.7 22.3
Adj EPS (Rs) - (excl RPS impact) 9.3 10.2 10.9 13.9 15.8 19.7 23.0

Total Equity 27,207 35,306 42,145 66,567 78,496 92,561 107,586
Preference capital 20,169 20,192 20,169 0 (0) 0 0
Minority interest 61 4 85 10 10 10 10
Total borrow ings 29 12 9 19,088 15,270 11,453 7,635
Currrent liabilities 12,850 14,544 16,532 14,702 15,524 18,134 20,683
Total capital 47,467 55,514 62,408 85,665 93,776 104,024 115,231
Cash and cash eq 16,500 20,476 21,346 40,935 38,579 44,706 51,772
Inv entories 11,736 11,878 13,160 16,843 18,343 19,843 21,343
Receiv ables 10,281 10,692 13,245 13,059 14,622 17,133 19,600
Loans and adv ances 7,645 11,627 12,972 14,156 15,525 17,783 19,860
Other current assets 1,243 1,706 2,127 3,429 3,729 4,029 4,429
Net fixed assets 11,730 12,254 14,960 9,721 16,277 16,439 16,686
Inv estments 884 894 576 1,321 1,321 1,321 1,321
Deferred tax assets 298 531 556 903 903 903 903
Total assets 47,467 55,514 62,408 85,665 93,776 104,023 115,231

Operating cash flow , excl. W-cap, ex-taxes 12,976 13,209 15,713 19,170 23,611 27,708 30,786
Working capital (4,904) (2,236) (2,632) (5,670) (3,910) (3,958) (3,896)
Taxes paid (4,242) (4,164) (5,827) (6,810) (8,887) (9,452) (11,037)
Capital expenditure (1,482) (1,147) (4,064) (2,768) (7,900) (1,650) (1,850)
Other income (net) 1,108 1,126 1,003 1,001 3,257 3,469 3,967
Free cash flow (prior to RPS dividends) 3,456 6,788 4,193 4,923 6,170 16,117 17,970
RPS div idends (101) (1,453) (1,457) (1,211) (1,211) (969) (727)
Free cash flow to equity holders 3,355 5,335 2,736 3,712 4,959 15,148 17,243
Key assumptions / metrics

Ad rev enue grow th (%) 21.2 11.8 28.9 9.2 15.5 18.0 14.4
Domestic subscription rev enue grow th (%) 13.2 8.0 14.5 11.7 15.0 16.5 13.5
Ov erseas subscription rev enue grow th (%) 5.5 (23.6) 15.7 3.0 4.0 3.0
Content cost as % of rev enue 37.7 38.6 41.2 42.2 40.9 37.8 38.3
Effectiv e tax rate (%) 32.6 30.5 34.2 33.7 37.0 33.3 33.3
EBITDA margin (%) 27.2 25.7 25.8 29.9 33.1 33.8 34.4
ROAE 26.6 26.6 22.7 40.9 19.2 21.0 21.4
ROACE 24.9 21.8 21.6 20.5 17.5 20.2 21.6
Sports operating profit (976) (266) (349) 96
Source: Companies, Kotak Institutional Equities

June 2017: Results calendar
India Daily Summary - August 9, 2017

Mon Tue Wed Thu Fri Sat Sun
7-Aug 8-Aug 9-Aug 10-Aug 11-Aug 12-Aug 13-Aug
KOTAK INSTITUTIONAL EQUITIES RESEARCH
Amara Raja Batteries Astral Poly Technik Ajanta Pharma Adani Pow er Alkem Laboratories Adani Enterprises
Britannia Industries Bank of India Ashoka Buildcon Bharat Forge Bank of Baroda Adani Port and SEZ
Dr Lal Pathlabs Brigade Enterprises Aurobindo Pharma BHEL Bosch DLF
Natco Pharma Century Textile Bank of India Coffee Day Enterprises BPCL J K Cement
Tata Steel GlaxoSmithkline Consumer City Union Bank Dhanuka Agritech Cadila Healthcare PI Industries
Welspun India Jagran Prakashan Eicher Motors GAIL (India) CESC Reliance Communications
Whirlpool Jindal Steel and Pow er Engineers India Great Eastern Shipping Co. CG Pow er and Industrial
Kaveri Seed Mahanagar Gas GSPL Cipla
Muthoot Finance Max Financial Services Gujarat Pipavav Port Gatew ay Distriparks
NCC National Aluminium Co. Laurus Labs GMR Infrastructure
SRF NHPC Manpasand Beverages Godrej Industries
Tata Chemicals NMDC Motherson Sumi Systems HCG
TeamLease Services Tata Motors Page Industries Hindalco Industries
Thermax Varun Beverages Petronet LNG HSIL
Timken PFC Ipca Laboratories
S H Kelkar and Company JSW Energy
Sunteck Realty Kalpataru Pow er Transmission
Union Bank Oil India
United Brew eries Oracle Financial Services
Rajesh Exports
Rural Electrification Corp.
SAIL
State Bank of India
Strides Shasun
Sun Pharmaceuticals
Sun TV Netw ork
Tata Global Beverages
TVS Motor
Vardhman Textiles
AIA Engineering Dish TV
Apollo Hospitals
Coal India
Grasim Industries
IDBI
Jain Irrigation
Prestige Estates Projects
Sadbhav Engineering
Tata Pow er
Castrol India Gillette India
P&G Hygiene
India Daily Summary - Augu
Source: NES, Kotak Institutional Equities

44
Kotak Institutional Equities: Valuation summary of KIE Universe stocks
Target O/S
45
Price (Rs) price Upside Mkt cap. shares EPS (Rs) EPS growth (%) PER (X) EV/EBITDA (X) Price/BV (X) Dividend yield (%) RoE (%) ADVT-3mo
Company Rating 8-Aug-17 (Rs) (%) (Rs mn) (US$ mn) (mn) 2017 2018E 2019E 2017 2018E 2019E 2017 2018E 2019E 2017 2018E 2019E 2017 2018E 2019E 2017 2018E 2019E 2017 2018E 2019E (US$ mn)
Automobiles
Amara Raja Batteries SELL 801 740 (7.6) 136,812 2,148 171 28.0 29.0 35.5 (2.6) 3.5 22.4 28.6 27.6 22.5 16.0 15.3 12.7 5.3 4.6 3.9 0.5 0.5 0.7 20.3 17.7 18.7 5.0
Apollo Tyres BUY 280 345 23.3 142,374 2,235 509 21.6 17.0 24.2 4.1 (21.4) 42.6 13.0 16.5 11.5 9.2 9.9 7.1 2.0 1.8 1.6 1.1 1.1 1.1 15.8 11.3 14.5 18.3
Ashok Leyland ADD 112 110 (1.9) 328,065 5,150 2,926 5.1 4.3 5.8 46.7 (15.4) 33.5 21.9 25.9 19.4 15.5 14.5 11.2 5.2 4.7 4.1 1.3 1.2 1.5 25.3 19.4 22.6 20.3
Bajaj Auto REDUCE 2,912 2,525 (13.3) 842,521 13,227 289 132.3 130.5 150.2 (2.6) (1.4) 15.1 22.0 22.3 19.4 16.3 16.0 13.5 4.9 4.4 4.0 1.8 1.8 2.1 25.3 21.0 21.6 12.8
Balkrishna Industries ADD 1,618 1,760 8.8 156,350 2,455 97 74.8 88.0 105.7 19.7 17.7 20.1 21.6 18.4 15.3 12.4 10.4 8.5 4.4 3.6 3.0 0.5 0.5 0.6 22.9 21.7 21.5 4.0
Bharat Forge SELL 1,187 925 (22.1) 276,432 4,340 233 29.4 34.8 43.1 9.8 18.3 24.1 40.4 34.1 27.5 24.4 18.2 15.4 6.7 5.9 5.1 0.5 0.7 0.9 18.2 18.4 19.8 12.9
CEAT ADD 1,765 1,950 10.5 71,394 1,121 40 91.8 80.3 122.3 (16.6) (12.5) 52.3 19.2 22.0 14.4 12.2 11.6 8.5 3.0 2.7 2.3 0.7 0.6 0.8 16.6 12.7 17.0 29.3
Eicher Motors SELL 32,121 19,700 (38.7) 874,395 13,727 27 612.7 783.8 907.7 24.4 27.9 15.8 52.4 41.0 35.4 38.7 29.3 24.8 22.3 15.7 11.7 0.1 0.1 0.1 53.3 44.8 37.8 23.9
Exide Industries SELL 214 200 (6.7) 182,113 2,859 850 8.2 9.0 9.8 11.1 10.5 8.3 26.3 23.7 21.9 17.0 14.7 13.5 3.7 3.4 3.1 1.1 1.4 1.4 14.6 14.8 14.6 5.6
Schaeffler India ADD 4,360 5,000 14.7 72,451 1,137 17 117.0 144.6 177.7 (1.5) 23.6 22.9 37.3 30.1 24.5 22.3 17.6 14.4 5.0 4.4 3.9 0.3 0.5 0.8 14.2 15.5 16.8 0.3
Hero Motocorp SELL 3,913 3,200 (18.2) 781,494 12,269 200 169.1 183.8 203.3 9.5 8.7 10.7 23.1 21.3 19.2 15.5 14.2 12.7 7.7 6.8 5.9 2.2 2.3 2.6 35.7 33.8 32.8 23.6
Mahindra CIE Automotive ADD 243 275 13.0 92,015 1,445 378 4.6 9.6 12.3 14.2 106.7 28.5 52.5 25.4 19.8 19.7 12.1 9.9 2.8 2.5 2.2 6.7 10.5 12.1 0.7
Mahindra & Mahindra BUY 1,400 1,625 16.1 869,529 13,651 569 65.8 73.2 84.3 12.1 11.2 15.2 21.3 19.1 16.6 15.3 12.7 11.0 3.0 2.7 2.4 0.9 1.0 1.2 15.1 14.9 15.3 27.3
Maruti Suzuki ADD 7,756 8,050 3.8 2,342,903 36,782 302 238.9 276.6 346.9 34.6 15.8 25.4 32.5 28.0 22.4 20.4 16.8 13.3 6.5 5.6 4.7 1.0 0.9 1.1 21.9 21.4 22.9 55.2
Motherson Sumi Systems SELL 337 225 (33.2) 708,705 11,126 2,105 7.7 10.0 12.2 18.4 29.9 21.4 43.7 33.6 27.7 17.8 13.6 11.6 8.6 7.4 6.3 0.6 0.9 1.1 25.6 23.5 24.4 14.5
MRF ADD 66,722 74,000 10.9 282,979 4,443 4 3,505 3,045 4,192 (40.8) (13.1) 37.7 19.0 21.9 15.9 10.2 10.8 7.9 3.3 2.9 2.4 0.1 0.1 0.1 18.7 13.9 16.5 16.9
SKF REDUCE 1,555 1,500 (3.5) 81,999 1,287 51 46.3 56.7 65.6 (4.7) 22.5 15.7 33.6 27.4 23.7 22.3 18.8 15.7 4.5 4.0 3.6 1.0 1.1 1.3 13.5 14.6 15.2 0.3
Suprajit Engineering SELL 285 215 (24.6) 37,432 588 131 8.5 9.8 11.7 54.9 15.5 19.6 33.6 29.1 24.3 20.1 16.5 14.1 7.0 5.8 4.9 0.4 0.5 0.6 22.7 21.9 21.9 0.9
Tata Motors BUY 430 560 30.2 1,460,280 21,475 3,396 27.7 34.6 51.9 (32.8) 24.8 50.0 15.5 12.4 8.3 5.3 5.8 4.5 2.5 2.1 1.7 13.7 18.4 22.4 53.6
Timken REDUCE 691 650 (6.0) 47,015 738 68 14.3 19.6 24.8 3.7 37.2 26.5 48.4 35.3 27.9 29.1 20.5 16.1 7.6 6.4 5.6 0.1 0.3 1.1 16.9 19.7 21.4 0.7
TVS Motor SELL 596 290 (51.3) 282,914 4,442 475 10.8 13.4 16.8 20.1 24.9 25.0 55.4 44.3 35.5 33.9 24.8 20.6 12.7 10.8 9.0 0.4 0.7 0.9 25.3 26.3 27.7 9.2
WABCO India ADD 5,541 5,850 5.6 105,090 1,650 19 112.5 130.7 171.4 5.0 16.1 31.2 49.2 42.4 32.3 30.5 26.6 20.0 8.3 7.1 5.9 0.1 0.2 0.2 18.3 18.0 19.9 0.6
Automobiles Cautious 10,175,262 158,293 (4.1) 13.3 28.8 25.8 22.8 17.7 12.8 11.5 9.2 4.8 4.2 3.5 0.8 0.8 1.0 18.7 18.2 19.9 335.9
Banks
Axis Bank REDUCE 499 525 5.1 1,196,914 18,791 2,395 15.4 24.2 35.1 (55.5) 57.7 45.1 32.5 20.6 14.2 2.4 2.3 2.0 1.0 0.7 1.1 6.8 10.0 13.1 55.8
Bank of Baroda ADD 157 210 34.1 360,716 5,663 2,310 6.0 15.9 22.3 125.6 165.7 40.3 26.2 9.8 7.0 1.4 1.4 1.3 0.8 2.0 2.9 3.8 9.6 12.4 25.9
Bank of India ADD 153 170 11.4 163,563 2,568 1,055 (14.8) 1.8 26.5 80.2 112.3 1,362.3 (10.3) 84.2 5.8 1.6 1.1 0.8 3.3 0.2 3.5 (6.6) 0.7 10.0 14.4
Canara Bank REDUCE 347 350 1.0 207,051 3,251 597 18.8 17.4 55.3 136.3 (7.2) 217.2 18.5 19.9 6.3 1.5 1.5 1.2 0.3 0.8 3.4 3.1 9.2 17.4
City Union Bank REDUCE 168 160 (4.9) 111,242 1,746 601 8.4 8.7 10.7 12.5 4.2 22.5 20.1 19.3 15.8 3.0 2.7 2.4 0.8 0.8 1.0 15.2 13.8 15.1 1.7
DCB Bank REDUCE 186 200 7.8 57,076 896 308 7.0 7.0 9.4 2.3 0.5 33.1 26.5 26.4 19.8 2.8 2.3 2.1 10.8 9.6 10.6 7.6
Equitas Holdings ADD 166 180 8.7 56,046 880 338 4.7 1.0 5.0 (23.8) (78.3) 392.1 35.1 161.7 32.9 2.6 2.6 2.4 9.3 1.5 7.2 4.9
HDFC Bank REDUCE 1,778 1,575 (11.4) 4,578,347 71,876 2,563 56.8 68.2 80.5 16.7 20.1 18.0 31.3 26.1 22.1 5.2 4.5 3.9 0.6 0.7 0.9 17.9 18.2 18.6 35.5
ICICI Bank BUY 296 370 25.2 1,895,163 29,753 6,408 15.3 13.4 21.4 1.2 (12.4) 59.7 19.3 22.0 13.8 2.4 2.2 1.9 0.8 0.9 1.4 11.0 8.4 12.3 85.4
IDFC Bank ADD 57 70 23.6 192,695 3,025 3,399 3.0 3.0 3.7 149.7 (1.5) 26.0 18.9 19.2 15.2 1.3 1.2 1.2 1.3 1.0 1.3 7.2 6.7 7.9 11.0
IndusInd Bank ADD 1,639 1,620 (1.1) 980,817 15,398 598 47.9 58.8 69.4 24.8 22.6 18.0 34.2 27.9 23.6 4.9 4.2 3.6 15.7 16.2 16.0 22.4
J&K Bank BUY 80 100 25.1 44,521 699 521 (31.3) 10.5 14.8 (464.8) 133.6 41.3 (2.6) 7.6 5.4 1.0 0.9 0.8 2.8 3.9 (27.0) 9.3 12.1 0.9
Karur Vysya Bank ADD 137 140 2.4 82,640 1,297 709 9.9 8.7 11.9 6.8 (12.8) 37.3 13.8 15.8 11.5 1.9 1.8 1.6 - 1.6 2.2 12.6 10.9 13.0 3.2
Punjab National Bank ADD 149 170 14.2 316,642 4,971 2,128 6.2 11.6 20.1 125.2 85.6 73.8 23.9 12.9 7.4 2.0 1.9 1.2 1.7 2.9 3.6 6.3 10.1 27.9

RBL Bank SELL 512 390 (23.8) 194,204 3,049 408 11.9 14.7 18.7 32.0 23.5 27.6 43.1 34.9 27.3 4.6 3.3 3.0 0.4 0.4 0.6 12.2 11.0 11.2 13.8
State Bank of India BUY 304 350 15.3 2,621,122 41,150 8,632 13.1 15.2 27.7 2.6 15.3 82.7 23.1 20.0 11.0 2.3 1.8 1.5 0.9 0.9 1.0 6.3 6.2 9.7 71.3
Ujjivan Financial Services BUY 327 400 22.4 39,106 614 119 17.3 0.2 16.0 (1.2) (98.8) 7,334.7 18.9 1,520.3 20.4 2.2 2.3 2.1 0.4 0.0 0.5 14.0 0.1 10.4 11.3
Union Bank ADD 142 165 15.9 97,892 1,537 1,228 4.5 6.4 16.7 (77.0) 41.4 161.0 31.5 22.3 8.5 1.9 1.7 1.2 2.7 3.6 8.7 11.0
YES Bank SELL 1,763 1,520 (13.8) 806,949 12,668 456 73.0 74.0 85.3 20.8 1.4 15.3 24.2 23.8 20.7 3.8 3.3 3.0 0.6 0.7 0.8 18.6 14.4 14.8 76.1
Banks Attractive 14,220,906 223,257 64.3 29.5 52.5 28.5 22.0 14.4 2.0 1.8 1.6 0.7 0.8 1.0 7.2 8.2 11.3 517.2
NBFCs
Bajaj Finserv ADD 5,336 4,700 (11.9) 849,141 13,331 159 153.2 184.2 220.6 24.8 20.2 19.8 34.8 29.0 24.2 5.4 4.1 3.5 0.3 0.3 0.3 16.7 16.1 15.7 13.4
Bharat Financial Inclusion REDUCE 816 790 (3.1) 112,575 1,767 138 21.0 33.6 51.3 (11.6) 59.9 52.8 38.8 24.3 15.9 4.8 3.9 3.1 15.1 17.3 21.7 36.4
Cholamandalam ADD 1,202 1,250 4.0 187,918 2,950 156 46.0 56.3 68.8 27.0 22.5 22.1 26.2 21.4 17.5 4.8 4.0 3.4 0.4 0.5 0.6 18.0 18.7 19.3 5.3
HDFC ADD 1,720 1,800 4.7 2,739,618 43,010 1,589 49.6 54.5 63.1 4.8 9.9 15.8 34.7 31.6 27.3 6.5 5.8 4.7 1.0 1.1 1.3 20.4 19.4 19.2 79.9
ICICI Prudential Life REDUCE 433 435 0.4 621,837 9,762 1,432 11.7 11.6 12.7 1.9 (0.9) 9.2 36.9 37.2 34.1 10.3 9.3 8.4 29.7 26.3 25.9 7.1
IIFL Holdings REDUCE 591 510 (13.7) 187,927 2,950 318 21.6 25.6 29.8 33.6 18.6 16.5 27.4 23.1 19.8 4.3 3.8 3.3 0.8 0.9 1.1 22.6 22.0 23.1 3.1
L&T Finance Holdings REDUCE 175 150 (14.5) 319,441 5,015 1,895 5.5 6.7 8.7 13.0 21.0 30.7 31.9 26.3 20.2 4.1 3.7 3.3 0.5 1.1 1.2 13.7 14.9 17.4 11.3
LIC Housing Finance REDUCE 680 690 1.5 343,221 5,388 505 42.3 45.9 55.7 16.5 8.5 21.5 16.1 14.8 12.2 2.8 2.4 2.0 0.9 1.0 1.2 19.1 19.2 19.9 19.4
Mahindra & Mahindra Financial SELL 426 325 (23.6) 242,038 3,800 565 7.1 16.1 19.2 (40.5) 126.9 19.7 60.1 26.5 22.1 4.0 3.7 3.4 0.6 1.3 1.5 6.4 13.5 14.8 15.3
Max Financial Services NR 600 160,387 2,518 267 5.8 5.7 (4.0) 33.6 (0.5) (168.9) 104.1 104.6 (151.8) 0.3 0.4 (0.3) 8.8 8.2 (5.4) 11.3
Muthoot Finance ADD 480 500 4.3 191,618 3,008 400 29.5 33.2 37.6 45.5 12.5 13.0 16.2 14.4 12.8 2.9 2.5 2.2 1.0 1.4 1.6 19.4 18.9 18.5 5.5
PFC REDUCE 136 145 6.9 358,127 5,622 2,640 8.1 17.0 23.3 (65.2) 111.2 36.6 16.8 8.0 5.8 1.1 1.5 1.1 3.7 3.8 5.1 5.7 11.9 14.8 15.4
PNB Housing Finance SELL 1,549 1,170 (24.4) 257,959 4,050 168 31.5 43.4 54.4 22.2 37.5 25.5 49.1 35.7 28.5 4.6 4.3 3.9 0.4 0.6 0.8 13.6 12.4 14.3 7.6
Rural Electrification Corp. REDUCE 179 180 0.6 353,313 5,547 1,975 38.9 24.2 23.4 36.4 (37.7) (3.7) 4.6 7.4 7.7 1.1 1.3 1.0 5.4 2.9 2.8 20.2 13.6 11.1 27.6
Shriram City Union Finance SELL 2,130 1,850 (13.1) 140,457 2,205 66 84.2 122.7 149.6 5.1 45.7 21.9 25.3 17.4 14.2 2.9 2.6 2.2 0.5 0.7 0.8 11.6 15.1 16.0 1.3
Shriram Transport REDUCE 971 1,050 8.2 220,269 3,458 227 55.4 66.2 83.1 6.7 19.5 25.6 17.5 14.7 11.7 2.1 1.9 1.6 1.0 1.0 1.2 11.7 12.6 14.1 15.1
NBFCs Neutral 7,285,846 114,382 1.4 10.0 18.3 23.1 21.0 17.8 3.7 3.3 2.8 1.1 1.0 1.2 15.9 15.5 15.7 517.2


Target O/S
Cement
ACC SELL 1,812 1,500 (17.2) 340,299 5,342 188 34.3 46.4 69.8 (13.3) 35.0 50.6 52.8 39.1 26.0 27.0 20.9 14.5 3.9 3.7 3.4 0.9 0.9 0.9 7.5 9.8 13.6 12.2
Ambuja Cements REDUCE 274 250 (8.8) 544,365 8,546 1,986 5.8 7.8 11.4 11.4 33.9 46.2 47.3 35.3 24.2 16.1 12.3 8.7 2.8 2.7 2.5 1.0 1.1 1.1 7.7 7.7 10.7 13.0
Dalmia Bharat ADD 2,642 2,780 5.2 235,048 3,690 89 38.8 109.4 151.7 80.7 181.9 38.6 68.0 24.1 17.4 15.1 10.1 7.8 4.7 3.6 3.0 0.1 0.1 0.1 7.8 16.9 18.8 5.6
Grasim Industries ADD 1,109 1,250 12.7 728,753 11,441 467 67.8 85.6 100.5 23.5 26.2 17.3 16.3 12.9 11.0 9.6 7.9 6.3 1.6 1.5 1.3 0.5 0.5 0.5 10.8 12.0 12.6 30.8
India Cements SELL 193 175 (9.4) 59,535 935 308 5.7 7.9 11.9 17.0 39.7 49.7 NM 24.4 16.3 10.2 9.1 7.3 1.2 1.1 1.1 0.6 0.6 0.6 3.5 4.7 6.7 17.1
J K Cement REDUCE 1,033 1,100 6.5 72,235 1,134 70 34.6 67.9 96.1 304.7 96.5 41.5 29.9 15.2 10.8 14.6 9.9 7.8 4.1 3.3 2.6 0.8 0.8 0.8 14.3 24.2 27.2 0.7
JK Lakshmi Cement ADD 440 555 26.1 51,810 813 118 6.9 21.2 43.1 251.8 204.5 103.7 63.4 20.8 10.2 19.3 9.2 6.1 3.7 3.2 2.5 0.5 0.5 0.5 5.9 16.5 27.2 0.9
Orient Cement ADD 155 180 15.9 31,826 500 205 (1.6) 8.9 12.9 (151.6) 668.3 45.2 (99.1) 17.4 12.0 24.6 8.8 7.1 3.2 2.8 2.4 0.3 1.2 1.3 (3.2) 17.3 21.5 0.9
Shree Cement SELL 18,005 14,000 (22.2) 627,244 9,847 35 384.4 599.4 690.6 233.2 56.0 15.2 46.8 30.0 26.1 25.2 18.0 14.3 8.1 6.5 5.2 0.8 0.1 0.1 19.3 24.0 22.2 4.9
UltraTech Cement SELL 4,057 3,100 (23.6) 1,113,661 17,484 275 96.2 130.8 162.7 11.4 36.0 24.3 42.2 31.0 24.9 22.0 17.4 14.2 4.7 4.1 3.6 0.2 0.2 0.2 11.8 14.0 15.3 16.1
Cement Cautious 3,804,776 59,732 32.3 45.7 28.6 39.0 26.8 20.8 16.5 12.7 9.9 3.6 3.2 2.8 0.5 0.4 0.4 9.3 12.0 13.6 102.1
Consumer products
Asian Paints REDUCE 1,147 1,000 (12.8) 1,100,536 17,278 959 20.0 21.9 25.8 6.9 9.2 17.9 57.3 52.5 44.5 36.3 32.7 27.4 14.5 13.0 11.8 0.9 1.0 1.2 27.2 26.1 27.8 18.2
Bajaj Corp. ADD 399 460 15.4 58,786 923 148 15.8 16.9 19.4 (0.5) 7.1 14.5 25.2 23.6 20.6 21.2 20.3 17.1 11.9 11.5 10.9 2.9 3.3 3.6 47.8 49.5 54.2 0.5
Britannia Industries ADD 4,071 3,700 (9.1) 488,755 7,673 120 73.7 87.9 108.9 7.3 19.2 24.0 55.2 46.3 37.4 38.1 31.2 25.1 18.1 14.5 11.6 0.5 0.7 0.8 37.0 34.8 34.6 8.7
Coffee Day Enterprises ADD 243 280 15.4 49,997 785 206 2.2 6.0 10.2 208.8 166.9 69.8 108.2 40.5 23.9 14.2 12.2 10.8 2.2 2.1 2.0 2.1 5.4 8.5 0.4
Colgate-Palmolive (India) ADD 1,067 1,200 12.5 290,168 4,555 272 20.6 24.5 29.9 (8.4) 18.8 22.1 51.7 43.5 35.6 30.4 25.6 21.1 22.8 19.2 16.1 0.9 1.2 1.5 48.7 47.8 49.0 6.9
Dabur India REDUCE 315 300 (4.7) 554,791 8,710 1,762 7.2 7.7 8.8 3.6 7.4 13.9 44.0 40.9 35.9 36.6 35.2 30.6 11.4 10.0 8.8 0.7 1.0 1.2 28.0 26.1 26.1 9.4
GlaxoSmithKline Consumer ADD 5,505 5,900 7.2 231,528 3,635 42 156.1 170.4 190.1 0.9 9.2 11.6 35.3 32.3 29.0 24.1 22.0 19.2 7.4 6.7 6.1 1.3 1.5 1.6 23.6 21.9 22.2 1.0
Godrej Consumer Products SELL 947 820 (13.4) 644,962 10,125 681 19.1 21.3 24.6 11.3 11.3 15.3 49.5 44.5 38.6 35.3 32.1 27.4 12.2 10.6 9.1 0.3 0.8 0.8 27.3 25.5 25.4 14.4
Hindustan Unilever REDUCE 1,191 1,100 (7.6) 2,577,877 40,471 2,160 19.6 23.2 26.7 3.2 18.0 15.4 60.7 51.4 44.5 41.8 35.2 30.5 39.7 37.6 35.7 1.4 1.5 1.8 66.5 75.0 82.2 27.0
ITC ADD 274 340 24.0 3,334,163 52,344 12,235 8.3 9.2 10.2 9.9 11.0 11.0 33.2 29.9 27.0 22.0 19.8 17.7 7.4 7.0 6.6 1.7 2.1 2.4 20.4 22.0 23.9 77.6
Jubilant Foodworks SELL 1,331 900 (32.4) 87,809 1,379 66 10.5 16.2 25.7 (33.9) 53.9 58.9 126.7 82.3 51.8 35.9 25.6 19.8 10.9 10.1 9.1 0.2 0.4 0.7 9.0 12.8 18.5 16.8
Jyothy Laboratories NR 382 69,440 1,090 182 6.5 10.9 11.4 25.1 67.1 5.0 58.6 35.1 33.4 28.5 26.1 22.9 6.4 6.0 5.7 1.6 1.6 1.8 12.2 17.6 17.6 1.1
Manpasand Beverages REDUCE 774 700 (9.5) 44,260 695 57 12.7 18.2 24.8 25.8 43.6 35.9 60.9 42.4 31.2 28.6 21.5 14.6 3.8 3.5 3.2 0.1 0.1 0.2 8.3 8.7 10.8 1.6
Marico REDUCE 334 290 (13.2) 430,953 6,766 1,291 5.8 6.6 7.7 14.7 13.7 15.9 57.2 50.3 43.4 36.7 35.3 30.4 18.5 16.6 14.9 1.0 1.1 1.3 34.7 34.8 36.1 6.6
Nestle India REDUCE 6,708 6,100 (9.1) 646,757 10,154 96 105.0 123.4 148.3 13.2 17.6 20.1 63.9 54.4 45.2 31.8 30.3 25.5 21.5 20.1 18.9 0.9 1.3 1.6 34.7 38.2 43.0 5.1
Page Industries REDUCE 16,244 14,100 (13.2) 181,185 2,844 11 234.7 296.9 360.0 13.1 26.5 21.2 69.2 54.7 45.1 43.8 35.3 28.9 27.2 21.8 17.6 0.6 0.8 0.9 43.8 44.3 43.2 4.8
PC Jeweller ADD 291 290 (0.4) 104,356 1,638 394 11.8 14.0 16.4 5.7 18.8 17.4 24.8 20.9 17.8 13.1 9.5 8.1 3.1 2.7 2.4 0.2 0.3 0.5 14.6 14.4 14.1 8.8
Pidilite Industries REDUCE 809 775 (4.3) 414,991 6,515 513 16.8 17.9 21.4 7.1 6.8 19.4 48.3 45.2 37.8 31.8 30.3 25.3 12.0 10.3 8.9 0.6 0.7 0.9 28.2 24.5 25.2 6.1
S H Kelkar and Company SELL 260 270 4.0 37,544 589 145 7.2 8.4 9.8 37.3 16.5 15.6 35.8 30.7 26.6 22.4 19.0 16.2 4.6 4.2 3.8 0.7 0.9 1.1 13.3 14.3 15.0 0.6
Tata Global Beverages ADD 166 160 (3.6) 104,768 1,645 631 6.1 7.0 8.4 17.3 15.0 20.0 27.3 23.7 19.8 13.3 11.9 10.1 1.7 1.6 1.5 1.4 1.6 1.9 6.1 6.9 8.0 8.1
Titan Company SELL 609 470 (22.9) 541,017 8,494 888 8.9 12.4 14.6 14.2 38.9 17.7 68.3 49.2 41.8 45.6 32.9 27.5 12.7 10.9 9.4 0.4 0.6 0.7 20.4 23.9 24.1 20.4
United Breweries SELL 821 650 (20.8) 217,063 3,408 264 8.7 11.9 16.1 (23.0) 37.3 34.7 94.4 68.7 51.0 34.4 28.6 23.9 9.3 8.4 7.4 0.1 0.2 0.3 10.3 12.8 15.3 3.3
United Spirits REDUCE 2,548 2,400 (5.8) 370,324 5,814 145 27.3 34.8 55.4 59.7 27.2 59.4 93.2 73.3 46.0 42.3 38.4 27.7 19.1 12.6 8.7 21.8 20.7 22.4 27.0
Varun Beverages BUY 523 550 5.2 95,435 1,498 182 8.6 12.0 15.6 66.3 39.9 29.5 60.8 43.4 33.5 14.7 13.3 11.5 4.9 4.5 4.0 11.8 11.0 12.6 1.3
Consumer products Cautious 12,677,461 199,026 8.8 15.1 16.3 47.2 41.0 35.3 30.0 26.5 22.8 11.2 10.2 9.2 1.1 1.3 1.6 23.8 24.8 26.2 275.8
Energy
BPCL SELL 505 435 (13.9) 1,095,581 17,200 1,967 40.9 34.3 39.1 8.2 (16.1) 14.2 12.4 14.7 12.9 10.4 10.7 9.2 3.3 2.9 2.6 4.3 2.0 2.3 28.3 21.2 21.1 28.8
Castrol India ADD 393 480 22.3 194,115 3,047 495 13.5 14.8 16.1 12.3 9.5 8.6 29.0 26.5 24.4 18.5 17.4 15.9 32.6 31.7 30.6 2.8 3.1 3.3 114.1 121.1 127.4 5.5
GAIL (India) ADD 387 435 12.5 654,027 10,268 1,691 22.4 27.0 28.8 66.2 21.0 6.5 17.3 14.3 13.4 10.5 9.1 8.7 1.7 1.6 1.5 2.3 2.2 2.3 11.0 11.6 11.5 17.8
GSPL ADD 185 180 (2.8) 104,425 1,639 564 8.8 11.2 11.8 11.7 26.9 5.7 21.0 16.6 15.7 10.6 8.4 7.8 2.3 2.1 1.9 0.8 1.2 1.6 11.7 13.3 12.8 2.0
HPCL REDUCE 436 420 (3.7) 664,615 10,434 1,524 43.1 34.5 33.5 70.2 (19.9) (3.0) 10.1 12.6 13.0 7.9 9.2 9.5 3.3 2.8 2.5 4.6 2.4 2.3 33.9 23.9 20.2 28.1
Indraprastha Gas SELL 1,224 970 (20.7) 171,339 2,690 140 43.3 50.0 54.9 30.6 15.4 10.0 28.3 24.5 22.3 17.1 15.0 13.6 5.9 5.1 4.5 0.7 0.9 1.2 22.7 22.2 21.4 6.4
IOCL REDUCE 413 435 5.3 2,006,703 31,504 4,739 54.6 37.5 40.6 156.6 (31.3) 8.1 7.6 11.0 10.2 5.2 6.3 5.8 2.0 1.8 1.6 4.6 3.5 3.4 27.5 16.9 16.5 38.0
Mahanagar Gas SELL 1,062 775 (27.0) 104,922 1,647 99 39.8 43.3 45.6 27.4 8.8 5.4 26.7 24.5 23.3 16.1 14.5 13.8 5.7 5.2 4.8 1.8 2.0 2.1 23.4 22.2 21.4 2.8
ONGC ADD 164 190 15.9 2,104,651 33,041 12,833 16.8 14.9 19.6 24.7 (11.6) 31.5 9.7 11.0 8.4 4.7 4.6 3.8 0.9 0.9 0.8 3.7 3.0 4.0 10.6 8.4 10.4 21.3
Oil India SELL 282 285 0.9 213,627 3,354 757 30.2 24.3 29.8 (2.0) (19.6) 22.5 9.3 11.6 9.5 6.2 7.1 5.9 0.8 0.8 0.7 5.0 3.9 4.8 9.4 6.4 7.8 2.1
Petronet LNG ADD 211 235 11.2 317,025 4,977 1,500 11.4 13.2 15.2 102.7 16.3 15.0 18.6 16.0 13.9 12.2 9.9 8.5 4.2 3.5 3.0 1.2 1.7 2.1 24.4 23.9 23.5 27.5
Reliance Industries REDUCE 1,603 1,500 (6.4) 4,741,945 74,445 2,959 101.1 81.6 92.7 17.8 (19.2) 13.5 15.9 19.6 17.3 15.1 13.2 9.6 1.8 1.7 1.6 0.7 0.8 1.0 11.2 8.3 8.8 105.5
Energy Attractive 12,372,975 194,246 42.3 (17.8) 15.2 12.1 14.7 12.8 8.6 8.6 7.1 1.7 1.6 1.5 2.5 2.0 2.3 14.1 10.8 11.5 285.7

46
Target O/S
47
Industrials
ABB SELL 1,389 1,160 (16.5) 294,362 4,621 212 17.7 23.3 32.9 24.9 32.0 41.2 78.6 59.6 42.2 41.5 33.3 25.7 9.0 8.2 7.2 0.3 0.5 0.6 11.9 14.4 18.2 3.8
BHEL SELL 135 100 (25.7) 329,569 5,174 2,448 2.0 2.5 6.5 169.9 21.8 163.0 66.5 54.6 20.8 20.5 20.4 7.9 1.0 1.0 1.0 0.3 0.5 1.2 1.5 1.9 4.8 12.5
Carborundum Universal SELL 334 290 (13.3) 63,071 990 189 9.3 11.4 14.7 21.4 22.8 28.9 36.0 29.3 22.7 18.9 18.5 14.3 4.6 4.1 3.7 0.5 1.0 1.3 13.6 14.8 17.2 0.8
CG Power and Industrial REDUCE 78 78 0.6 48,573 763 627 2.9 3.7 5.4 (45.6) 25.3 47.0 26.4 21.0 14.3 11.3 9.3 6.2 1.2 1.3 1.4 1.0 1.4 4.2 5.9 9.4 4.0
Crompton Greaves Consumer REDUCE 216 210 (2.7) 135,220 2,123 627 4.7 5.3 6.5 21.1 13.8 22.6 46.1 40.5 33.1 28.2 24.9 20.5 25.0 15.9 10.9 0.5 0.7 0.9 76.1 47.9 39.3 3.5
Cummins India SELL 936 830 (11.4) 259,542 4,075 277 26.3 28.4 32.2 1.4 8.2 13.3 35.7 32.9 29.1 31.7 29.7 25.3 6.9 6.4 5.9 1.5 1.7 1.8 20.2 20.2 21.2 6.2
Havells India SELL 485 410 (15.5) 303,291 4,761 625 9.5 9.9 13.1 35.9 4.0 33.1 51.1 49.1 36.9 34.6 29.1 22.1 9.3 8.4 7.6 0.6 0.8 1.2 18.8 18.0 21.7 10.2
Kalpataru Power Transmission BUY 356 400 12.4 54,632 858 153 14.2 16.8 25.1 85.5 18.5 49.2 25.1 21.1 14.2 9.0 7.6 6.2 2.3 2.1 1.9 0.6 0.6 0.6 9.2 10.3 13.9 0.5
KEC International ADD 297 315 6.0 76,368 1,199 257 11.9 15.5 20.2 59.2 31.0 30.3 25.1 19.1 14.7 11.5 9.6 8.0 4.8 4.0 3.2 0.5 0.7 0.9 19.7 22.8 24.3 4.5
L&T REDUCE 1,171 1,210 3.3 1,640,025 25,747 1,399 42.3 49.7 59.1 43.0 17.5 18.9 27.7 23.6 19.8 22.8 19.3 16.7 3.5 3.2 3.0 1.8 1.5 1.8 13.5 14.3 15.6 55.1
Siemens SELL 1,344 1,020 (24.1) 478,786 7,517 356 22.4 28.8 36.8 31.8 28.7 27.7 60.0 46.6 36.5 37.4 28.7 22.2 6.9 6.5 6.1 0.8 1.1 1.4 11.8 14.5 17.3 4.2
Thermax REDUCE 898 920 2.5 106,955 1,679 113 21.4 32.7 37.6 (14.7) 52.8 15.1 42.0 27.5 23.9 24.5 20.0 17.4 4.0 3.6 3.2 0.7 0.8 0.9 9.7 13.8 14.3 0.5
Voltas SELL 537 460 (14.4) 177,834 2,792 331 15.4 17.4 18.0 41.8 13.5 3.1 35.0 30.8 29.9 30.4 24.9 21.2 5.4 4.7 4.2 0.5 0.7 0.8 16.6 16.3 14.9 15.0
Industrials Cautious 3,968,228 62,298 51.2 18.8 28.5 36.6 30.8 24.0 24.0 20.4 16.5 3.5 3.3 3.1 1.1 1.1 1.4 9.7 10.8 12.9 120.8
Infrastructure
Adani Port and SEZ ADD 415 410 (1.2) 859,031 13,486 2,071 18.1 15.1 17.2 30.6 (16.5) 14.2 22.9 27.5 24.1 19.3 16.6 15.2 4.9 4.2 3.7 0.3 0.4 0.6 24.4 16.6 16.4 23.0
Ashoka Buildcon BUY 182 250 37.6 34,014 534 188 (0.5) 13.7 19.2 86.9 2,760.9 40.5 (353.7) 13.3 9.5 8.9 12.9 10.5 2.0 1.8 1.5 0.9 1.0 1.2 (0.6) 14.4 17.6 0.6
Container Corporation REDUCE 1,169 1,160 (0.7) 284,796 4,471 244 32.6 38.5 44.3 1.4 18.1 15.1 35.9 30.4 26.4 20.8 15.9 13.2 3.2 3.1 2.9 1.2 1.8 2.1 9.2 10.3 11.2 6.1
Gateway Distriparks BUY 267 275 3.0 29,041 456 109 6.8 8.8 12.7 (32.4) 28.9 44.2 39.2 30.4 21.1 31.0 27.6 22.2 2.9 2.7 2.5 2.6 1.0 1.4 6.6 9.1 12.3 1.2
Gujarat Pipavav Port BUY 141 155 10.0 68,093 1,069 483 5.2 5.3 7.1 50.4 3.3 32.7 27.2 26.4 19.9 15.4 13.9 11.5 3.4 3.3 3.2 2.7 2.8 3.7 12.8 12.9 16.5 2.2
IRB Infrastructure BUY 219 255 16.2 77,126 1,211 351 20.4 28.4 30.7 11.8 39.4 8.2 10.8 7.7 7.1 6.4 6.9 5.4 1.5 1.2 1.0 14.2 17.2 15.7 8.2
Sadbhav Engineering ADD 289 340 17.6 49,584 778 172 11.0 12.9 14.4 40.1 17.8 11.3 26.4 22.4 20.1 18.1 14.3 11.9 3.0 2.7 2.4 12.0 12.6 12.5 0.5
Infrastructure Attractive 1,401,685 22,005 24.4 2.4 15.7 24.3 23.8 20.6 15.1 14.0 12.2 3.7 3.3 2.9 0.6 0.8 1.0 15.2 13.8 14.2 41.9
Internet
Info Edge ADD 1,037 1,015 (2.1) 125,857 1,976 121 16.9 21.8 26.4 62.9 29.2 20.9 61.4 47.5 39.3 49.3 33.6 27.1 6.3 5.8 5.3 0.3 0.5 0.6 10.8 12.7 14.0 1.7
Just Dial REDUCE 365 390 6.7 25,411 399 70 17.4 15.3 17.8 (15.1) (12.6) 16.6 20.9 24.0 20.5 13.8 11.7 9.0 2.8 2.5 2.3 0.4 0.5 14.8 11.1 11.7 13.0
Internet Attractive 151,268 2,375 21.6 13.6 19.6 46.4 40.9 34.2 37.8 27.7 22.3 5.2 4.8 4.3 0.2 0.5 0.6 11.3 11.7 12.7 14.7
Media
DB Corp. REDUCE 374 390 4.2 68,847 1,081 184 20.5 23.1 28.3 27.1 12.5 22.7 18.2 16.2 13.2 10.4 8.9 7.3 4.3 3.9 3.6 1.1 3.5 4.3 25.6 25.4 28.4 0.7
DishTV ADD 76 95 24.3 81,493 1,279 1,066 1.0 1.7 2.4 (84.2) 63.5 40.6 NM 45.6 32.4 9.1 7.8 6.8 16.6 12.2 8.9 25.1 30.8 31.6 7.1
Jagran Prakashan REDUCE 180 200 11.1 58,828 924 311 10.6 13.3 15.3 2.3 25.4 14.9 16.9 13.5 11.7 8.4 7.4 6.4 2.7 2.8 2.6 4.4 4.7 18.6 20.1 23.3 0.3
PVR REDUCE 1,410 1,400 (0.7) 65,885 1,034 47 21.4 32.3 43.6 (20.8) 51.0 35.0 65.9 43.6 32.3 20.7 16.8 13.9 6.8 6.0 5.2 0.1 0.2 0.3 10.9 14.6 17.1 5.1
Sun TV Network ADD 726 865 19.2 285,948 4,489 394 26.2 28.5 34.9 14.3 8.9 22.5 27.7 25.5 20.8 19.2 17.3 14.0 7.4 6.9 6.2 2.1 2.3 2.6 28.0 28.0 31.3 16.4
Zee Entertainment Enterprises BUY 540 570 5.6 518,642 8,142 960 13.9 15.8 19.7 27.7 13.1 25.1 38.7 34.3 27.4 24.8 21.7 17.9 7.8 6.6 5.6 0.4 0.6 0.8 20.8 20.9 22.1 18.7
Media Attractive 1,080,702 16,966 (3.3) 15.3 24.5 32.7 28.4 22.8 17.2 15.1 12.6 6.8 6.1 5.3 0.8 1.4 1.6 20.8 21.6 23.4 48.3
Metals & Mining
Coal India ADD 245 280 14.3 1,521,126 23,880 6,207 14.9 22.7 26.3 (34.2) 51.9 16.0 16.4 10.8 9.3 10.7 7.8 6.6 6.2 5.6 5.1 8.1 6.5 7.5 30.1 54.5 57.2 13.3
Hindalco Industries BUY 235 250 6.4 526,993 8,273 2,227 8.6 19.3 24.3 561.5 125.1 26.1 27.4 12.2 9.7 8.0 6.8 5.8 1.1 1.0 0.9 0.4 0.4 0.4 4.4 8.7 9.9 36.3

Hindustan Zinc REDUCE 285 265 (6.9) 1,202,737 18,882 4,225 19.7 22.8 24.9 1.4 16.0 9.0 14.5 12.5 11.4 10.7 8.1 6.8 3.9 3.2 2.6 10.3 1.8 1.8 24.4 28.1 25.1 9.7
Jindal Steel and Power BUY 140 165 18.3 127,646 2,004 915 (20.9) (7.4) 7.0 30.1 64.3 194.0 (6.7) (18.7) 19.9 12.6 8.9 6.7 0.4 0.4 0.4 (6.1) (2.3) 2.2 22.2
JSW Steel ADD 231 235 1.8 558,015 8,760 2,417 14.6 17.6 20.6 1,484.3 20.9 16.8 15.8 13.1 11.2 8.0 7.6 7.1 2.4 2.1 1.8 1.0 1.0 1.0 16.3 16.9 17.1 20.1
National Aluminium Co. ADD 70 76 8.7 135,112 2,121 1,933 3.7 5.8 6.3 25.7 57.4 8.9 19.1 12.1 11.1 9.2 5.0 4.3 1.3 1.2 1.1 5.1 1.4 1.4 6.1 10.5 10.5 2.8
NMDC SELL 128 105 (17.7) 403,871 6,340 3,164 8.2 9.3 9.6 14.4 13.8 2.6 15.6 13.7 13.4 9.7 8.9 8.8 1.8 1.7 1.7 4.0 4.3 4.3 10.0 12.8 12.7 5.1
Tata Steel ADD 616 645 4.6 598,706 9,399 971 41.4 56.6 65.6 306.4 36.8 16.0 14.9 11 9.4 7.9 6.9 6.4 1.7 1.7 1.5 1.3 1.6 1.6 10.4 15.6 17.0 56.9
Vedanta BUY 298 320 7.5 1,106,609 17,373 3,717 19.7 29.6 38.8 157.9 50.2 31.1 15.1 10.1 7.7 8.4 6.9 5.6 1.8 1.6 1.5 3.4 3.0 3.9 14.0 17.2 20.3 47.3
Metals & Mining Attractive 6,180,814 97,034 47.2 45.9 20.6 17.3 11.9 9.8 9.0 7.4 6.4 2.2 2.0 1.8 5.2 3.1 3.5 12.6 16.8 18.2 213.6
Pharmaceutical
Apollo Hospitals REDUCE 1,251 1,250 (0.1) 174,053 2,732 139 15.9 30.2 38.4 0.2 90.1 27.1 78.8 41.4 32.6 27.1 21.2 18.0 4.7 4.4 4.0 0.5 0.6 0.8 6.3 11.0 12.8 8.3
Aurobindo Pharma ADD 726 760 4.6 425,526 6,680 584 39.4 45.8 52.2 16.1 16.2 14.2 18.4 15.9 13.9 13.1 10.9 9.2 4.5 3.6 2.9 0.3 0.3 0.4 27.9 25.1 22.9 39.0
Biocon SELL 350 230 (34.3) 209,970 3,296 601 10.2 7.6 9.6 52.8 (25.6) 26.9 34.3 46.1 36.3 22.7 20.7 16.1 4.0 3.8 3.5 0.8 1.0 12.9 8.5 10.0 21.9
Cipla BUY 578 650 12.4 465,302 7,305 805 12.5 23.9 33.5 (25.5) 91.2 40.4 46.3 24.2 17.2 19.9 14.7 10.7 3.6 3.2 2.8 0.8 0.9 1.2 8.1 14.0 17.4 10.8
Dr Lal Pathlabs REDUCE 822 880 7.0 68,516 1,076 83 19.1 20.9 24.0 20.2 9.4 14.7 43.0 39.3 34.3 27.5 23.8 20.5 10.4 8.5 7.1 0.4 0.4 0.4 27.4 23.8 22.6 2.2
Dr Reddy's Laboratories SELL 2,102 2,250 7.1 348,369 5,469 166 72.5 75.9 124.5 (47.9) 4.7 63.9 29.0 27.7 16.9 15.7 14.8 8.5 2.8 2.6 2.3 1.0 0.6 0.9 9.5 9.7 14.4 19.2
HCG BUY 270 280 3.8 23,125 363 85 2.6 2.5 4.5 1,629.0 (3.1) 78.1 103.5 106.8 60.0 25.4 21.0 16.2 5.3 5.1 4.7 5.2 4.8 8.1 0.5
Laurus Labs REDUCE 574 610 6.3 60,662 952 106 18.0 19.9 30.9 32.8 10.7 55.2 31.9 28.8 18.5 16.7 15.0 11.1 4.6 3.9 3.2 17.4 14.7 19.2 1.5
Lupin ADD 975 1,020 4.7 440,228 6,911 450 56.8 42.7 56.0 12.6 (24.8) 31.1 17.1 22.8 17.4 10.4 12.4 9.5 3.2 2.9 2.5 0.9 0.7 0.9 20.8 13.4 15.5 39.5
Sun Pharmaceuticals REDUCE 500 530 5.9 1,200,463 18,846 2,406 28.9 24.5 29.6 30.7 (15.2) 20.7 17.3 20.4 16.9 10.5 11.1 8.5 3.3 2.9 2.5 1.2 1.0 1.2 20.4 15.0 15.8 47.3
Torrent Pharmaceuticals REDUCE 1,270 1,155 (9.1) 214,939 3,374 169 55.2 54.8 63.2 (46.1) (0.7) 15.2 23.0 23.2 20.1 16.2 15.2 13.2 4.9 4.2 3.7 0.9 1.0 1.1 23.8 19.7 18.2 3.7
Pharmaceuticals Cautious 3,631,153 57,006 1.5 (1.7) 27.2 22.5 22.9 18.0 13.6 13.2 10.0 3.6 3.2 2.8 0.8 0.7 1.0 16.1 13.9 15.3 193.9


Target O/S
Real Estate
Brigade Enterprises BUY 275 320 16.4 37,315 586 136 13.5 11.1 11.4 23.2 (17.4) 2.1 20.4 24.7 24.2 10.8 11.1 11.6 1.8 1.6 1.5 0.9 0.9 9.7 7.5 6.5 0.8
DLF REDUCE 179 170 (4.8) 318,448 4,999 1,784 3.9 1.6 1.8 109.1 (59.8) 16.6 45.9 114.2 97.9 15.8 18.5 16.9 1.3 1.3 1.3 1.1 1.1 2.9 1.1 1.3 34.9
Godrej Properties REDUCE 504 330 (34.5) 109,061 1,712 216 9.6 4.9 8.4 29.4 (48.5) 71.2 52.7 102.4 59.8 57.7 889.0 101.6 5.4 5.2 4.9 - 0.5 11.0 5.2 8.4 2.9
Oberoi Realty REDUCE 376 390 3.7 127,775 2,006 339 11.2 27.4 45.9 (11.1) 145.2 67.6 33.7 13.7 8.2 23.0 8.7 7.9 2.3 2.0 1.6 0.5 0.5 0.5 6.9 15.4 21.7 1.5
Prestige Estates Projects BUY 264 260 (1.5) 98,963 1,554 375 10.1 8.3 10.1 (42.0) (17.7) 21.9 26.2 31.8 26.1 16.5 15.1 14.3 2.2 2.1 2.0 0.6 0.6 0.6 8.8 6.8 7.8 1.6
Sobha ADD 378 440 16.4 36,389 571 96 15.1 19.6 21.5 10.1 30.0 9.5 25.1 19.3 17.6 13.5 11.9 11.3 1.4 1.3 1.3 1.9 1.9 1.9 5.6 7.0 7.3 1.8
Real Estate Attractive 759,227 11,919 17.1 5.7 34.7 34.9 33.1 24.6 17.3 16.3 15.2 1.8 1.7 1.6 0.3 0.8 0.9 5.1 5.1 6.6 44.9
Technology
HCL Technologies REDUCE 882 900 2.1 1,258,247 19,753 1,400 59.2 62.7 65.1 50.2 6.0 3.9 14.9 14.1 13.5 11.0 10.3 9.3 3.7 3.3 3.0 2.8 0.9 3.7 27.2 24.6 23.1 25.7
Hexaware Technologies REDUCE 261 250 (4.4) 79,040 1,241 304 13.7 15.2 16.7 5.9 10.9 9.8 19.1 17.2 15.7 13.0 11.4 10.0 4.6 4.2 3.8 2.1 3.1 3.1 26.5 25.7 25.5 4.6
Infosys ADD 965 1,070 10.9 2,215,633 34,784 2,175 62.7 64.0 69.8 6.3 1.9 9.2 15.4 15.1 13.8 10.7 11.0 9.7 3.2 3.4 3.1 2.8 3.4 3.7 22.6 21.6 23.6 58.0
L&T Infotech BUY 777 850 9.4 132,935 2,087 175 55.8 59.5 63.7 13.3 6.7 7.1 13.9 13.1 12.2 9.7 9.3 7.9 4.3 3.7 3.2 1.2 3.1 3.6 37.6 30.5 28.3 0.8
Mindtree NR 474 79,631 1,250 164 25.1 29.3 33.4 (30.1) 16.7 14.3 18.9 16.2 14.2 10.1 9.8 7.6 3.1 2.9 2.6 1.4 1.7 1.9 17.0 18.4 19.5 5.4
Mphasis SELL 582 530 (8.9) 122,358 1,921 193 38.3 41.3 42.3 11.3 7.8 2.4 15.2 14.1 13.7 9.8 10.3 9.5 2.0 2.1 2.0 2.9 3.4 3.4 13.0 13.8 14.7 1.0
TCS REDUCE 2,503 2,350 (6.1) 4,932,080 77,430 1,914 133.4 133.1 143.3 8.6 (0.3) 7.7 18.8 18.8 17.5 13.8 13.8 12.4 5.6 6.1 5.6 2.1 3.3 3.6 32.6 30.5 33.4 48.1
Tech Mahindra ADD 398 450 13.0 347,194 5,451 883 32.1 32.9 36.6 (10.4) 2.7 11.4 12.4 12.1 10.9 7.3 7.0 5.6 2.1 1.9 1.7 3.1 2.3 2.3 18.3 16.7 16.6 18.5
Wipro REDUCE 287 250 (13.0) 1,398,850 21,961 4,507 17.5 17.5 19.1 (3.0) 0.3 9.2 16.4 16.4 15.0 10.0 10.5 9.3 2.7 2.7 2.3 0.3 0.3 0.5 17.2 16.3 16.4 15.0
Technology Cautious 10,565,967 165,877 9.0 (1.2) 7.0 16.8 17.0 15.9 11.7 11.7 10.4 3.9 4.1 3.7 2.1 2.5 3.1 23.0 24.1 23.2 177.0
Telecom
Bharti Airtel REDUCE 418 430 2.9 1,670,114 26,219 3,997 9.5 2.8 8.5 (2.3) (70.7) 204.8 43.8 149.6 49.1 7.7 9.0 7.5 2.5 2.5 2.4 0.2 0.2 0.2 5.7 1.7 5.0 28.4
Bharti Infratel REDUCE 382 350 (8.4) 706,643 11,094 1,850 14.9 15.8 18.0 18.3 6.6 14.0 25.7 24.1 21.2 12.0 10.6 9.5 4.6 4.5 4.4 4.3 3.2 3.7 16.2 18.7 21.0 14.9
IDEA RS 92 330,549 5,189 3,605 (1.3) (10.5) (9.0) (114.8) (734.6) 15.1 (72.5) (8.7) (10.2) 8.0 12.3 9.7 1.3 1.6 1.9 (1.8) (16.7) (16.7) 20.0
Tata Communications ADD 629 720 14.4 179,294 2,815 285 10.5 13.6 18.8 540.1 29.9 37.5 59.9 46.1 33.5 10.5 10.2 9.0 11.3 9.1 7.2 1.0 1.0 1.0 51.0 21.8 23.9 7.8
Telecom Cautious 2,886,599 45,317 (32.0) (90.2) 542.5 45.1 458.5 71.4 8.3 9.8 8.2 2.6 2.7 2.7 1.2 0.9 1.0 5.9 0.6 3.8 71.0
Utilities
Adani Power SELL 32 26 (17.7) 121,879 1,913 3,857 (5.4) 3.4 3.4 (471.2) 163.4 (1.3) (5.8) 9.2 9.3 10.2 6.0 5.7 4.1 2.8 2.2 (40.4) 36.3 26.3 5.0
CESC ADD 957 890 (7.0) 126,857 1,992 133 52.1 77.7 99.7 86.6 49.0 28.4 18.4 12.3 9.6 8.3 7.9 6.9 0.9 0.8 0.8 1.3 1.3 1.4 5.9 7.0 8.5 12.0
JSW Energy ADD 71 67 (5.5) 116,280 1,826 1,640 3.8 6.6 6.9 (50.0) 72.6 5.2 18.7 10.8 10.3 6.7 5.9 5.4 1.1 1.1 1.0 2.8 2.8 2.8 6.6 10.0 9.9 9.4
NHPC ADD 31 32 2.4 320,604 5,033 10,259 3.0 3.8 4.0 24.4 27.7 6.9 10.6 8.3 7.7 9.5 7.7 6.7 1.1 1.1 1.0 5.0 6.8 7.2 10.0 13.0 13.3 2.7
NTPC BUY 171 180 5.2 1,411,211 22,155 8,245 12.3 13.8 15.9 7.2 12.1 15.1 13.9 12.4 10.8 11.2 10.5 8.5 1.5 1.4 1.3 2.6 2.4 2.8 11.0 11.4 12.2 12.8
Power Grid BUY 222 250 12.5 1,162,459 18,250 5,232 14.4 15.6 18.7 26.1 8.8 19.4 15.5 14.2 11.9 10.0 8.8 7.7 2.3 2.1 1.8 1.3 1.4 1.7 16.3 15.5 16.3 17.3
Reliance Power SELL 42 38 (9.1) 117,254 1,841 2,805 4.2 4.8 5.0 (14.3) 14.6 4.5 10.0 8.8 8.4 9.1 7.8 7.5 0.5 0.5 0.5 5.5 6.1 6.0 2.5
Tata Power REDUCE 78 80 2.2 211,649 3,323 2,800 6.4 4.9 7.0 15.7 (22.5) 42.1 12.3 15.9 11.2 13.3 10.2 10.4 1.9 1.7 1.5 1.5 1.5 1.5 13.3 11.2 14.5 5.2
Utilities Attractive 3,588,193 56,332 (0.9) 29.4 15.4 15.7 12.1 10.5 10.3 8.7 7.7 1.5 1.4 1.3 2.1 2.3 2.5 9.7 11.6 12.2 66.8
Others
Astral Poly Technik SELL 654 450 (31.2) 78,345 1,230 120 12.1 14.6 18.7 43.7 21.3 27.6 54.2 44.7 35.0 30.2 23.7 19.0 9.3 7.7 6.4 0.1 0.1 0.1 17.8 18.8 19.9 1.0
Avenue Supermarts SELL 902 685 (24.1) 563,111 8,840 624 8.5 12.7 16.2 49.1 49.8 27.2 106.1 70.9 55.7 57.0 41.7 32.6 13.2 12.1 10.0 17.9 18.7 19.7
Bayer Cropscience ADD 4,465 4,900 9.7 157,856 2,478 34 82.3 112.9 135.6 (7.7) 37.2 20.0 54.2 39.5 32.9 36.0 27.4 22.2 7.7 8.3 7.0 0.5 0.6 14.9 19.9 23.1 1.1
Cera Sanitaryware REDUCE 2,918 2,620 (10.2) 37,955 596 13 76.3 91.2 109.1 18.9 19.6 19.6 38.3 32.0 26.7 21.9 18.7 15.9 7.4 6.1 5.0 0.3 0.3 0.3 21.2 20.8 20.4 0.2
Dhanuka Agritech REDUCE 765 800 4.5 38,275 601 50 23.9 26.6 33.3 11.3 11.3 25.4 32.1 28.8 23.0 22.5 19.8 15.7 7.6 6.4 5.4 2.1 0.9 1.1 24.1 24.2 25.5 0.4
Godrej Industries RS 629 211,597 3,322 336 13.7 14.6 15.9 42.1 6.8 8.9 46.1 43.2 39.6 43.3 38.1 32.3 6.6 5.8 5.2 0.3 0.3 0.3 14.8 14.4 13.9 4.9
HSIL ADD 361 360 (0.3) 26,099 410 72 14.2 16.3 21.1 (5.2) 14.7 29.3 25.4 22.1 17.1 11.4 9.1 7.7 1.8 1.7 1.6 1.1 1.1 1.1 7.3 7.9 9.6 0.8
InterGlobe Aviation ADD 1,296 1,400 8.1 468,562 7,356 360 46.0 72.1 92.2 (18.9) 56.5 28.0 28.1 18.0 14.0 19.6 11.5 8.3 13.4 7.7 5.0 2.6 4.1 5.3 62.3 54.2 42.9 11.6
Kaveri Seed SELL 659 525 (20.3) 45,507 714 66 28.5 33.9 41.2 9.0 19.2 21.3 23.1 19.4 16.0 28.7 16.7 13.4 4.4 4.7 4.0 1.5 2.2 19.9 23.5 27.1 8.3
PI Industries ADD 746 910 21.9 102,695 1,612 136 33.5 32.4 37.8 44.9 (3.3) 16.7 22.3 23.0 19.7 18.5 16.8 13.7 6.5 5.2 4.3 0.5 0.5 0.6 33.4 25.2 23.8 2.6
Rallis India ADD 240 260 8.5 46,595 732 194 9.7 11.3 14.6 32.1 15.9 29.2 24.7 21.3 16.5 17.0 13.1 10.0 4.1 3.7 3.2 1.3 1.4 1.5 18.6 18.3 20.7 1.0
SRF BUY 1,547 1,840 19.0 88,821 1,394 57 88.5 88.1 105.4 20.2 (0.4) 19.6 17.5 17.5 14.7 11.0 10.1 8.6 2.9 2.5 2.2 0.7 0.8 0.9 17.6 15.3 16.0 3.7
Tata Chemicals ADD 596 650 9.1 151,847 2,384 255 33.5 44.8 48.8 9.5 33.5 9.0 17.8 13.3 12.2 9.2 7.6 6.6 2.2 1.7 1.6 1.8 1.8 1.8 13.1 14.7 13.5 5.6
TeamLease Services ADD 1,423 1,480 4.0 24,324 382 17 38.8 41.3 53.6 143.7 6.6 29.7 36.7 34.4 26.5 51.3 33.8 25.4 6.4 5.4 4.5 19.2 17.0 18.4 0.3
UPL ADD 863 920 6.6 438,584 6,885 507 35.7 44.9 56.5 12.2 25.9 25.8 24.2 19.2 15.3 14.4 12.1 10.1 5.3 4.4 3.6 0.6 0.8 1.1 23.8 24.9 25.7 16.8
Vardhman Textiles ADD 1,200 1,350 12.5 68,869 1,081 55 114.0 101.8 122.8 23.2 (10.7) 20.7 10.5 11.8 9.8 7.1 7.7 6.2 1.7 1.4 1.3 1.1 1.7 1.7 16.9 12.4 13.6 0.7
Whirlpool SELL 1,180 1,020 (13.6) 149,709 2,350 127 25.2 30.9 38.0 28.8 22.6 22.8 46.8 38.1 31.1 28.4 23.6 19.5 10.4 8.6 7.1 0.5 0.6 24.6 24.7 25.0 1.1
Others 2,634,699 41,363 13.8 26.8 22.6 32.1 25.3 20.7 19.9 15.9 13.0 6.3 5.2 4.2 0.9 1.2 1.5 19.6 20.3 20.5 58.9
KIE universe 97,449,813 1,528,434 20.2 8.0 23.7 22.4 20.8 16.8 12.3 11.3 9.5 2.9 2.7 2.4 1.6 1.4 1.7 13.1 13.0 14.5
KIE universe (ex-energy) 85,076,839 1,334,188 14.7 16.0 25.5 25.6 22.1 17.6 13.5 12.2 10.3 3.3 3.0 2.7 1.4 1.4 1.6 12.9 13.6 15.3
Notes:
(a) We have used adjusted book values for banking companies.
(b) 2017 means calendar year 2016, similarly for 2018 and 2019 for these particular companies.
(c) Exchange rate (Rs/US$)= 63.70

48
Disclosures
"Each of the analysts named below hereby certifies that, with respect to each subject company and its securities for which the analyst is
responsible in this report, (1) all of the views expressed in this report accurately reflect his or her personal views about the subject companies
and securities, and (2) no part of his or her compensation was, is, or will be, directly or indirectly, related to the specific recommendations or
views expressed in this report: Murtuza Arsiwalla, Nischint Chawathe, Tarun Lakhotia, Samar Sarda, Abhishek Poddar, Jaykumar Doshi,
Garima Mishra."
Kotak Institutional Equities Research coverage universe

Distribution of ratings/investment banking relationships
Percentage of companies covered by Kotak Institutional
70%
Equities, within the specified category.
60%
Percentage of companies within each category for
which Kotak Institutional Equities and or its affiliates has
50%
provided investment banking services within the
previous 12 months.
40% 36.2% * The above categories are defined as follows: Buy = We
expect this stock to deliver more than 15% returns over
30% 27.6% the next 12 months; Add = We expect this stock to
23.0% deliver 5-15% returns over the next 12 months; Reduce
= We expect this stock to deliver -5-+5% returns over
20% the next 12 months; Sell = We expect this stock to deliver
13.3%
less than -5% returns over the next 12 months. O ur
10% target prices are also on a 12-month horizon basis.
2.6% 3.6% 3.1% These ratings are used illustratively to comply with
1.5%
applicable regulations. As of 30/06/2017 Kotak
0%
Institutional Equities Investment Research had
BUY ADD REDUCE SELL
investment ratings on 196 equity securities.
Source: Kotak Institutional Equities As of June 30, 2017
Ratings and other definitions/identifiers

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

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09august 2017 India Daily

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INDIA DAILY

August 9, 2017 India 8-Aug 1-day 1-mo 3-mo

Contents Global/Regional indices

Muthoot Finance: Growth muted, profitability improves Value traded India

TeamLease Services: 1QFY18 below estimates, but some clarity on IT benefits

Zee Entertainment Enterprises: NDR takeaways 8-Aug 1-day 1-mo 3-mo

Rs/US$ 63.8 3 (70) (93)

10yr govt bond, % 6.9 1 (13) (40)

Net investment (US$ mn)

7-Aug MTD CYTD

FIIs (26) (209) 8,686

MFs 217 444 7,915

Best performers 8-Aug 1-day 1-mo 3-mo

JPA IN Equity 26.2 (9.5) 18.6 100.0

TATA IN Equity 616.5 2.7 11.4 42.2

UT IN Equity 8.1 (8.5) 3.2 40.0

AL IN Equity 112.1 0.8 7.9 35.2

UNSP IN Equity 2548.2 (1.0) (2.8) 34.3

HDIL IN Equity 56.4 (18.6) (33.8) (42.0)

IDBI IN Equity 55.8 (2.4) (1.1) (32.0)

RCOM IN Equity 22.9 (4.2) 0.4 (29.5)

BHEL IN Equity 134.7 (3.1) (0.3) (23.9)

GNP IN Equity 668.3 (3.0) 0.5 (22.4)

Kotak Institutional Equities Research

Kotak Institutional Equities Research

Source: Company, Kotak Institutional Equities

Exhibit 2: Normalized profitability above estimates driven by higher refining margins

FY2016 1QFY17 2QFY17 3QFY17 4QFY17 FY2017 1QFY18 1QFY18E

Source: Company, Kotak Institutional Equities

KOTAK INSTITUTIONAL EQUITIES RESEARCH 3

Exhibit 3: Sequential improvement in performance across segments, except petchem

FY2016 1QFY17 2QFY17 3QFY17 4QFY17 FY2017 1QFY18

Source: Company, Kotak Institutional Equities

4 KOTAK INSTITUTIONAL EQUITIES RESEARCH

Exhibit 4: Interim results of IOCL, March fiscal year-ends (Rs mn)

Source: Company, Kotak Institutional Equities Estimates

Exhibit 5: Paradip refinery utilization and distillate yield improved further

1QFY17 2QFY17 3QFY17 4QFY17 1QFY18

Source: Company, Kotak Institutional Equities

KOTAK INSTITUTIONAL EQUITIES RESEARCH 5

Exhibit 6: IOCL continue to lose market share in diesel

Exhibit 7: IOCL continues to lose market share in gasoline

Source: Company, PPAC, Kotak Institutional Equities

6 KOTAK INSTITUTIONAL EQUITIES RESEARCH

Exhibit 8: We assume robust refining margins and steady marketing margins

Source: Company, Kotak Institutional Equities estimates

Fiscal 2018E Fiscal 2019E

Source: Company, Kotak Institutional Equities estimates

Exhibit 10: We compute fair value of Rs435 for IOCL

EV/EBITDA based valuation

Current stock price 413

Source: Company, Kotak Institutional Equities Estimates

KOTAK INSTITUTIONAL EQUITIES RESEARCH 7

2012 2013 2014 2015 2016 2017 2018E 2019E 2020E

Balance sheet (Rs mn)

Free cash flow (Rs mn)

Key assumptions (IOC standalone)

Source: Company, Kotak Institutional Equities Estimates