ECONOMIC OVERVIEW

Exports (US $ RBI Repo Rate (%) Unemployment Rate Real GDP(Growth % FDI (US$ Billion)
Billion) (%) YoY)
24.49

60.08
55.62
6.75

7.2
9.7

43.79
6.25
20.84

4.8

6.1
Feb-16 Feb 17 Sep-15 Oct-16 € Aug-17
43,009Aug-17 6 Aug-16 March 17 FY 2016-17 FY 2017-18 FY 14-15 FY 15-16 FY 2016-17

The Reserve Bank of

GDP expected to stay The total FDI Unemployment rate Total exports grew by
India (RBI) has cut the
between 6.75 - 7.5% in investments India almost HALVED to 17.48% y-o-y to US$ 24.49
repo rate by 25 basis
FY 2016-17 on the received during April 4.8% in March 2017 billion in February 2017,
points each in October
back of government 2016-March 2017 rose 8 thereby increasing while overall trade deficit
2016 and August 2017
spending, thereby per cent year-on-year to disposable income, declined by 24 per cent y-o-
making the rate 6 per
making India an US$ 60.08 billion. forecasted to grow y to US$ 41.8 billion in
cent which will infuse
attractive destination by 7.7% this fiscal. April-February 2017
liquidity into the
for investment.
market.
 ECONOMIC OVERVIEW
Corporate Tax Rate GST Previous Planned
NIFTY
(%) Disinvestment
Beauty (‘000cr)
and
28 26
Personal
Care

72
10100

30
LPG 5 17

34.5
Soap 18 26
8700

25
Cellphon Expected Total planned
18 6
Aug-16 Aug- 17€
42,948 2015-16 2016-17 es revenue Disinvestment

The government
Nifty and Sensex The corporate tax rate is GST should help make Strong structural reforms,
plans to divest 15%
reached their all time at 25% for companies India more of a single a proactive government,
in NLC, 10% each
highs, with our with revenues less than market and thus spur positive demographics with
in NTPC, NHPC,
market’s growth 50 cr with plans to productivity, increasing urbanisation ,
SAIL, PFC, 5% in
highest among reduce the tax rate investment, relative low exposure to
REC & 3% in IOC,
emerging markets further, making India a competitiveness, job external risks make India
the revenue from
despite the market cap lucrative destination to creation and incomes, an investor friendly
which will help the
to GDP ratio being invest in. Our IIP is hence giving an impetus destination, with India
government spend
0.82 showcasing forecasted to grow by to the industry in the sure to make a greater
on infrastructure and
further potential 5.97% this fiscal long run mark on the world stage.
welfare schemes

KEY TAKEAWAY
Automobile
INDUSTRY ANALYSIS
 SWOT ANALYSIS
High growth rate due to strong export growth and Disincentivization of getting hybrids as placed at a higher

WEAKNESSES
increasing purchasing power of people. tax rate bracket (GST 30.3% to 43%)
More focus on using electricity and alternative fuels like Fluctuations in steel prices directly influence the
STRENGTHS

CNG and LPG. automobile industry

Support from the government in the form of policies and
schemes.
Easier raw material procurement due to improved logistic
management and supply chain mechanism after GST.
OPPORTUNITIES
Demand for two-wheeler automobiles lowered during
monsoons.
Influenced by government regulations. Rise in prices of
two-wheelers after BS-IV implementation by 5-10 per cent.

Increased government focus towards infra sector for Increase in prices of raw materials like steel,
heavy duty vehicles aluminium, copper, etc.

THREATS
Microcars to be most appealing option in urban cities to
tackle Indian traffic and pollution
Strategic alliances by foreign OEMs to bring technology
and competitive prices to Indian market
Increase in allocation under MNREGA from 38,000 to
48,000 Cr to promote two-wheelers in tier 3 cities
Promotion of usage of mass conveyance vehicles and
cab services to reduce demand for four-wheelers
Heavy competition from pre-existing players, both
foreign and domestic
Advent of e-vehicle players like Tesla to be a threat to
premium carmakers

% share of each segment in total Gross turnover of

Automobiles produced in Automobiles sold in India Automobiles exported
volume in FY17 manufacturers in
India (millions) (millions) (millions)
15 3 India ($US billion)
22 3
25 20 20 64 69
KPI

18 3.6 3.6 59
24 3.5 55
23 79
3.1
22
Passenger vehicle
Commercial vehicle
Three wheeler
2014 2015 2016 2017 Two wheeler 2014 2015 2016E 2017E
2014 2015 2016 2017 FY14 FY15 FY16 FY17
 EICHER MOTORS
MANAGEMENT BSE NSE ISIN

505200 EICHERMOT INE066A01013

HIGHLIGHTS
SECTOR : Auto - LCVs & HCVs
Leading player in mid-sized SIDDHARTHA LAL
motorcycle segment
SALES VOLUME
Incorporated on 14th October, 1892 S SANDILYA
CHAIRMAN
Operates in over 20 countries
Total sales 163171 195686

NON-EXECUTIVE
Overseas exports volume crossed Total motorcycle sales 147618 178345

DIRECTORS
35000 numbers PRATEEK MANVI MJ
JALAN SUBBAIAH
Total VE sales 15553 17341
Highest ever sales in 2015 at 5800+ SINHA
units
Q4 2015-16 Q4 2016-17
MARKET SHARE OF CV (BY VOLUME/ANNUM)
PRODUCTS
RECENT DEVELOPMENTS 6x

2087
9269 15553
Growth in
Hit new high of 30162.50 in Nifty 50 motorcycle sales in
index on 27th July, 2017 last 5 years
13168

Cutting bus and truck prices by up to

5% ZERO 22033

EICHER MOTORS TATA MOTORS

EML continues to be
Eicher Polaris to expand overseas; debt free company MAHINDRA & MAHINDRA ASHOK LEYLAND
started export to Nepal FORCE MOTORS
 RETURNS

3,895.38

81.48
BUY

58.11
57.18
1,560.02
2,123.62

39.77
144.76
1,206.56
602.05

794.3

Profit/Loss From Continuing

Operations Mar '16 Mar '17
DEC DEC DEC MAR MAR Mar-17 Mar-16 Dec-14 Return On Capital Employed(%)
'12 '13 '14 '16 '17 Dec-13 Dec-12 Return On Net Worth(%)
Growing reserves show good
health
PER SHARE RETURN PEER COMPARISON
3,541
.73 (OPERATING PROFIT)
3000 Increasing financials compared to
2500
2000
previous year.
1500
1000
649.3 500 Ever increasing market cap
9
0 0 200 400 600 800
Dec '12Dec '13Dec '14 Mar Mar Force Motors Tata Motors
'16 '17 Ashok Leyland Tata Motors Royal Enfield bikes to expand in
Eicher Motors
tier 2 cities, driving growth
RATIOS
377.98 23.25 23.25 24.64 24.64
Reduced truck and bus prices to
7,913.7 5.68 5.77 increase demand
1
Mar '16 Mar '17
60.33 Better exports; Potential in South
1,173.7 Inventory Turnover Ratio
9 Asian and African markets.
Dec '12 Dec '13 Dec '14Mar '16Mar '17 Investments Turnover Ratio
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
Fixed Assets Turnover Ratio
 MOTHERSON SUMI SYSTEMS BSE NSE ISIN
517334 MOTHERSUMI INE775A01035
HIGHLIGHTS MANAGEMENT SECTOR : Auto Ancillaries
Largest auto component maker in India
SALIENT NUMBERS
Incorporated on 1st January, 1986
VIVEK CHAAND SEHGAL Cash Flow from Operating Activities 678.3 706.8
Operates in 25 countries across six CHAIRMAN
continents
Net Profit 1773.7 2172.4
The stock has given 42% returns in a LAKSH VAAMAN SEHGAL
period of one year, outperforming BSE Sales 37226.7 42765.7
Sensex and Auto.
PANKAJ MITTAL
COO FY 2015-16 FY 2016-17

RECENT DEVELOPMENTS SHAREHOLDING PATTERN

CLIENTS
Rs.15,400 crore deal with Daimler AG
to supply full range of parts., the 0.14 36.9 35.34
biggest such deal in India
MSS continues to be
A healthy order book that stands at almost a debt free
€12.9 billion
26.6
company
Consistent rise in profit and 63.1
decrease in Debt/Equity ratio
over last four quarters. INDIAN FOREIGN

INSTITUTION NON-INSTITUTION
 RETURNS

34.99
30.09

29.33
BUY
711.9

24.6
317.2
Profit/Loss From Continuing
Operations Mar '15 Mar '16
MAR MAR MAR MAR MAR Mar-16 Mar-15 Mar-14 Return On Capital Employed(%)
'12 '13 '14 '15 '16 Mar-13 Mar-12 Return On Net Worth(%)
Capital expenditure of Rs.2000 Cr
planned for FY – 18.
OPERATING PEER COMPARISON
93.8
100.9 PROFIT(In Rs.Cr) (OPERATING PROFIT)
Increased volume and price
movements have been witnessed
based on the
market position and financial
strength. The stock gave 57%
0 500 1000 1500 2000
Mar Mar Mar Mar Mar Mar '13Mar '14Mar '15Mar '16Mar '17
WABCO India Amara Raja
return after dividend split.
'12 '13 '14 '15 '16 Exide Bosch
MSS Outstanding results and continuous
increase in significant numbers
Fixed Asset Turnover such as Price/Earning (P/E) ratio
124.2
Ratio has made the stock has to gain 23
5,882.4 per cent in the past three months
65.1 0 5 pushing the FY18 projected price-
3,868.1
0 0 earnings multiple to 28, which is
Mar'15 Mar'16 40 per cent higher than the 10-year
Mar '12Mar '13Mar '14Mar '15Mar '16 average.
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
Fixed Asset Turnover Ratio
Banking, Financial services and
Insurance
 Industry Analysis
PORTER’S FIVE FORCES ANALYSIS
1400
1200
Threat of New Bargaining Power Bargaining Power 1000
Competitive Rivalry Substitute Products
Entrants of Suppliers of Buyers 800
(High) (Low)
(Low) (Medium) (Low)
600
400
 At present public  High entry barriers,  For deposit substitutes  Largely, customers prefer  Nascent Debt market
sector banks, led by as RBI control’s the include investment in banks for its reliability. 200
& volatile stock
SBI & associates, issuance of licenses. gold,real estate, mutual  Gradually, customers market are less 0
control 77% of the  New licenses may funds & equity. have hedged inflation by opted.
reduce market share  For advances investing in other riskier FY17 FY16 FY15 FY14 FY13
banking sector.  Banks are an
 Issuing of new of pulic sector banks substitutes include avenues. indispensible source
licenses will bonds, IPO/FPO  Currently 95% of Indian of funds in India.
CAGR : 12.38% FY17-FY07
increase Population still invests in  Credit off-take has been surging ahead
competitive rivalry Fixed Deposits.
over the past decade, aided by strong
in rural areas over
economic growth, rising disposable
medium to long
term. incomes, increasing & easier access to
credit.

ROBUST DEMAND INNOVATION IN SERVICES

OPPORTUNITIES CHALLENGES Growth in Total Asset Base
• Increase in working population & • Mobile, Internet banking &
growing disposable incomes. extension of facilities at ATM to 2025 E
Increase in working The biggest risk to • Housing & Personal finance are improve operational efficiency. US$ 28.5 Trillion
population & growing India's banks is the expected to remain key demand • Vast un-banked population
disposable incomes. rise in bad loans drivers. highlights scope for innovation.

Healthy regulatory The issuing of EXPECTED CAGR:

oversight & credible new licenses will 34.56%
BUSINESS FUNDAMENTALS POLICY SUPPORT
monetary policy by the lead to an
RBI have lent strength increase in • Accounts for over 10% of the • Wide policy support in the form
& stability. competitive global pharmaceutical of private sector participation &
rivalry. production. liquidity infusion. 2016
• High net interest margins, along • Healthy regulatory oversight & US$ 1.97 Trillion
with low NPA levels, ensure credible monetary policy by the
healthy business fundamentals. RBI.
Kotak Mahindra Bank BSE
500247
NSE
KOTAKBANK
ISIN
INE237A01028

• Profile : Market Cap - ₹173,287 crore SECTOR : BFSI

• Bank's segments include Treasury, BMU and
Corporate centre, which includes dealing in
debt, equity, money market, forex market,
derivatives and investments and primary
dealership of Government securities and
Balance Sheet Management unit (BMU)
• Uday Kotak, 1985
• Presence(National)
Employees
• We must never get complacent and always remember that 44K
if we are not paranoid, others will eat our lunch. – Uday
Kotak ATMs
2163
• Recent Product - Introducing 811 for the first time in
India install a bank account. Up to 6% interest p.a.,
Zero balance account, open an account in just 5 mins, Shareholders
virtual debit card and scan & pay – Install Kotak. Get 160K
811.

• Management Institution
₹2.8 Trillion
• Mr. Dipak Gupta, Joint Managing Director
• Mr. Uday Kotak, Executive Vice-Chairman and Card holders
Managing Director 6 Million+
• Dr. Shankar Acharya, Non-Executive Chairman
Customer Base
• Recent News - Kotak Mahindra Bank reported a 23 per 8m
cent year-on-year rise in standalone net profit at Rs.
912.73 crore for the June quarter
FINANCIALS
Buy
• NIM - Net profit
margin is twice of peer
average
• Lending Growth - As
per June quarter KMB
has reported its
highest loan book
growth (18%) in the
last five quarters.
• Corporate loans –
The corporate loans
(1/3rd of total) has
NIM of company crossed 10K Crore first time in 5 Net profit soared by 30% in FY17 after
21% y-o-y growth for
yr increase in current & saving account balances another quarter.
• NPA - KMB’s non-
Growth Comparison - KMB performing loans
Growth Kotak Peers
remain well below the
industry average,
Net Profit Margin 22.13 10.8 helping make the bank
Cost of funds Ratio 5.58 5.69 one of the top gainers.
OI/TI 34.3 21.16 • 811- Kotak’s 811 app
EPS(MRQ) 23.97% -11.18% has helped rein in
clients. Reached 60.8
EPS(TTM) 40.67% 5.41%
billion rupees ($947.6
EPS Growth 16.84% 14.77% million) in mobile
transactions in June, a
Sales Growth 21.39% 20.52%
Kotak Mahindra Bank recorded the highest 115 % increase from
BPS increased to 209.1 from 181.9 in last year.
ever deposit of 69+ cr. In FY17 Capital Exp. Growth 15.52% 10.4% the year before.
HDFC Bank Ltd BSE

500180
NSE

HDFCBANK
ISIN

INE040A01026

• Market Cap (₹ cr): 4,49,657

• HDFC Bank is the largest private sector bank in SECTOR : BFSI
India with a pan-India network of over 4,715
branches and nearly 12260 ATMs.
• Established in 1994. Mr Aditya Puri is the MD
& CEO of the Bank.
• Presence in India, Bahrain, Hong Kong and
Dubai.
• Recent Product - HDFC launched ‘Project AI’ under
which bank would deploy robots at select bank
branches. These robots will offer options such as cash
withdrawal or deposit, forex, fixed deposits and demat
services displaying on the screen to persons coming
into the branch.
• Management
• Mrs Shyamala Gopinath, Chairperson
• Mr Aditya Puri, Managing Director
• Mr Paresh Sukthankar, Deputy Managing
Director
• Mr Kaizad Bharucha, Executive Director
• Mr Sashidhar Jagdishan, Chief Financial Officer

• Recently HDFC bank reported its results for first

quarter of FY18. The bank reported PAT of ₹ 3893.8 cr
up 20.2% YoY (down 2.4% QoQ primarily on account
of higher provisioning. Advances for the quarter grew
23.4% beating the industry estimates of 20%.
 FINANCIALS
Peer comparison – HDFC Bank Advances growth trend (Rs in cr)
Retail book continues to drive
growth (%)
Buy
Key Parameters HDFC Peer Avg.
580000
• Strong growth in
560000 Retail Wholesale
540000
bottomline and
Net Interest Margin (%) 4.3 3.25
520000 55
advances - During
60 5149 5347 54 53
Net Profit Margin (%) 20.99 16.38 500000 46 45 47 the year FY17 HDFC
50
480000 40 reported Net profit of
GNPA(%) 1.05 4.5 30 ₹ 14,550 cr, an
460000
440000 20 increase of 18.3%
NNPA (%) 0.33 2.1 10
420000
0 from FY16.
ROE 16.26 10.8 400000 Advances grew by
Capital Adequacy Ratio 19.4% to ₹ 554, 568
15.00 16.00
(CAR) (%) cr compared to
Growing advances with stable asset quality Higher retail book has helped bank
In almost every parameter HDFC has better previous year.
assisted in gaining market share in the total in improving NIM and lower
numbers than its peers which shows its slippages
credibility in the industry
system credit • Stable Asset Quality
– Asset quality of the
CASA ratio jumped QoQ (%) NIM trend for last 5 years Comparison with market bank remains one of
the best in the
CASA Ratio 4.55% NIM HDFC Bank S&P BSE Sensex industry with GNPA
60
4.50% 9.00
8.00
at 1.05% and NNPA
50 4.45% at 0.33%
7.00
40
4.40% 6.00

Monthly return
4.35% 5.00 • Lower COF and
30 4.30% 4.00
3.00 improved NIM -
4.25%
20
4.20% 2.00 Strong growth in low
1.00 cost CASA deposits
10 4.15% -
4.10% (1.00) helped bank in
0
Q4FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17 4.05% (2.00) expanding NIM to
2013 2014 2015 2016 2017 4.3% which remains
Improvement in low cost CASA portions in Bank has been able to maintain healthy HDFC returns have consistently the best in the
deposits has helped in improvement of NIM margins relatively stable across interest rate outperformed the benchmark sensex industry.
margins and economic cycles in the last 6 months
Infrastructure
Infrastructure Sector Analysis
Rising private investments for Infrastructure
The Real Estate (Regulation and Development) Act, 2016 passed by the Lok Development
Sabha on 15 Mar aims to protect home-buyers, help boost investments in the real 80%
estate industry (FDI), promote fair play in real estate transactions and ensure timely
60%
execution.
40%

Airports Authority of India plans to develop city-side infrastructure at 13 regional 20%

airports, with help from private entities. 0%
10th plan 11th plan 12th plan

Railway expenditure allocation has increased by 8% to Rs 131,000 cr for laying Public Private
down 3,500 km of railway lines in 2017-18. Diamond Quadrilateral is a project to
establish high speed rail network in India that will connect the Infrastructure Spending as percent of GDP
Delhi, Mumbai, Kolkata and Chennai.
12TH 5 YEAR…
Affordable housing has been given infrastructure status through Pradhan Mantri Awas 11TH 5 YEAR…
Yojana . 352 affordable housing projects worth Rs 38,000 crore (US$ 5.9 billion) in 53
FY17
cities across 17 states for building over 200,000 houses costing Rs 18 lakh (US$ 27,948)
per house on average. FY16

FY15

Lock-in period for long-term capital gains on land and buildings has been reduced from FY14
three to two years. With this tax benefits would be available for more investors and thus FY13
would spur a demand in infra shares.
10TH 5 YEAR…

The Ministry of Shipping plans to undertake development of 37 national waterways, 0 0.05 0.1

which would have positive impact on reduction of overall logistics cost. Enhanced
fund allocation on Sagarmala project to R600 crore for 2017-18 from R406 cr in Total infrastructure spending is about 10%
2016-17. of GDP (gross domestic product) during the
12th FYP up from 7.6% during the previous
The Central Electricity Authority expects investment in India's power transmission Plan as it includes power, bridges, dams,
sector to reach Rs 2.6 lakh crore during the 13th plan, & enhancement of capacity of roads and urban infrastructure development.
the inter-regional links by 45,700 MW.
Infrastructure Sector Analysis
12000
Construction of International North–South Transport Corridor, a 7,200-km-
10000
long Multi-mode network of ship, rail, and road route for moving freight between
India, Russia, Iran, Europe, and Central Asia. 8000

6000
Smart Cities Mission is being allocated USD8.29 billion to develop 100 cities all 4000
over the country making them citizen friendly and sustainable. It is all about
overlaying the city’s infrastructure, water supply, sewage, waste collection, urban 2000

mobility and other service provisions with ICT solutions 0

In March 2017, the Ministry of Commerce considered 5 proposals of SEZ

developers, to set up new Special Economic Zones in Karnataka.
NIFTY INFRA NIFTY INDIA

The burgeoning real estate industry in India gives a fillip to the demand for
concrete & building construction equipment The residential real estate demand is
driven by
• Rising population and growing urbanisation and rising income levels leading to Effect of Economic and Industry
higher demand for luxury projects Specific Factors on Infrastructure
• Growing demand for affordable housing to meet the demand from lower income Companies
groups
• Positive economic outlook supported by
impressive figures of GDP, LPI and
GST Effects
Housing Data will aid in the growth of
• Ease in doing business with removal of cascading effect of taxes and clarity in
infrastructure companies.
classification of works contracts as services and other contracts which do not
• GST, Affordable Housing Scheme,
result in immovable property would be composite supplies.
Sagarmala Project and other mentioned
• Availability of input tax credits would neutralize the concerns of increased
factors point towards growth simulation in
GST rate of 18%.
Infra sector.
• Increase in rate of services and withdrawal of exemptions and concessions for
power projects is expected to have an impact on power companies.
Company Analysis
MARKET CAP (RS CR)
= 82,030.40
Adani Ports and SEZ is the seamless
integration of 3 verticals consisting
of Ports, Logistics and Special
Economic Zone.
CEO - Karan Adani
Founder- Gautam Shantilal
Adani, the chairman and founder
of Adani Group (net worth - $6.3
billion as of April 2017)
Management - Chief Financial
Officer, Co. Secretary & Compl.
Officer, Chief Executive Officer,
Chairman & Managing Director
and 7 directors
BSE
512599
SECTOR : Infrastructure
Presence- operates across eight ports
in India and four International Ports
It is India’s largest port company had a
very modest beginning in 1998 with just
two berths at Mundra, in the Gulf of
Kachchh in Gujarat, India.
New Products- Adani Ports is striving
to become Green Port by managing port
operations and services responsibly,
creating safe, secure and eco-friendly
working environment.
Recent News -Adani Ports and Special
Economic Zone has incorporated a
wholly owned subsidiary company Adani
International Terminal Pte on June 30,
2017.
NSE ISIN
Adani Ports and SEZ INE821I01014
The company now has pan India
presence in ten locations with
the flagship Mundra port in the
Gulf of Kachchh, also India’s
largest commercial port.
Adani Ports India is setting
up LNG terminals along
India’s eastern and western
water margins as natural
extensions to the port
infrastructure
The company has set a target of
exceeding 200 MT of cargo
handling by 2020 at an
investment of Rs 9,000 crore,
but it is likely to achieve it by
2018.
Company Analysis

BUY
Market Cap (in Millions Rs.) Revenues (in Millions Rs.) EBITDA (in Millions Rs.)
1000000 25000 16000
800000 14000
20000
12000
600000
15000 10000
400000 8000
200000 10000 6000
0 5000 4000
Q1 Q2 Q3 Q4 Till 28 2000
2017 2017 2017 2017 July
2017
0
Q1 2017 Q2 2017 Q3 2017 Q4 2017
0
Q1 2017 Q2 2017 Q3 2017 Q4 2017
• Adani Ports is keen to complete
its own 'Sagarmala' dream by
Closing Stock – This graph shows that Adani having presence in the three
STOCK PRICE (IN RUPEES)
28 July 17 - 395.75 Ports and SEZ is going bullish key states of Maharashtra,
500
450 again. Karnataka and Andhra Pradesh,
400
350 The increase in stock price can be apart from setting up trans-
300
250 attributed to infrastructure push shipment terminals in Southeast
200
150 by Govt. like ‘Sagarmala’ Project’ Asia and East Africa.
100
50 and Adani Ports signing up new
0
deals. • Adani Ports signed a MOU
31-JAN-17 28-FEB-17 31-MAR-17 30-APR-17 31-MAY-17 30-JUN-17
with Malaysia’s MMC Ports to
do feasibility study of Carey
Island Port Project as an
Risk Returns extension of Port Klang.
% PROMOTERS
6.15% FOREIGN INSTITUTIONS • Adani Ports and SEZ would
Adani Ports 0.54 8.57 1.88%
2.57%
NBFC AND MUTUAL FUNDS focus on cleaner forms of
3.55% 49.75% GENERAL PUBLIC energy that will shave operating
OTHERS costs by as much as 10%-15%.
Industry 0.53 10.14
23.52% FINANCIAL INSTITUTIONS
FOREIGN PROMOTERS
Nifty 0.94 5.26
CENTRAL GOVT
Company Analysis
MARKET CAP (RS CR)
= 7,941.01
IRB Infrastructure Developers
Limited is a road build–operate–
transfer (BOT) operator.
CEO - Ajay Deshmukh
Chairman & MD - Virendra D.
Mhaiskar
Presence- headquartered in
Mumbai,India.
Management - Chief Financial
Officer, Chief Executive
Officer, Chairman & Managing
Director and 17 directors.
BSE NSE ISIN
532947 IRB Infrastructure INE821I01014
Developers Ltd
SECTOR : Infrastructure
It has a portfolio of over 20 Road BOT Its clients include government
projects. It has in-house integrated agencies, such as National
project execution capabilities in its Highways Authority of India
business verticals, including (NHAI) and state road
construction, operation and maintenance development authorities, which
of highways. develop highways.
New Products- Includes development Its construction business
complements its BOT vertical
and operation of roadways; Real Estate,
by executing engineering,
which includes real estate development,
procurement and construction,
and Others, which includes windmill (sale
and operation and management
of electricity generated by windmill),
hospitality and airport infrastructure (O&M) aspects of BOT
concessions.
Recent News - IRB Infrastructure gains IRB Infra appointed former
NHAI chief, Rajinder Pal Singh
4% on financial closure for Udaipur-
as board chairman. He had
Gujarat road project which it had bagged
worked in various areas like
this project last year by offering the
finance, industry, urban
premium of Rs 163.80 crore to NHAI.
development and infrastructure
development.
Company Analysis

BUY
Market Cap (in Millions Rs.) Revenues (in Millions Rs.) EBITDA (in Millions Rs.)
100000 20000 8500
80000
15000 8000
60000
40000 10000 7500
20000
5000 7000
0
Q1 Q2 Q3 Q4 Till 28
2017 2017 2017 2017 July 0 6500 Key Insights and Deals
2017 Q1 2017Q2 2017Q3 2017Q4 2017Q1 2018 Q1 2017Q2 2017Q3 2017Q4 2017Q1 2018

STOCK PRICE (IN RUPEES) • Reached financial closure for Rs

Closing Stock – The Stock graph shows that IRB
2,088 cr road project which
300 28 July 17 - 225.75 is going bullish again.
involved 6 laning of 113.8 km
250 The increase in stock price can be
length of NH-8 stretch between
200 attributed to infrastructure push
Udaipur to Guj border.
150 by Govt. and the successful IPO
100 of IRB InvIT that would help
50 • Bagged six-laning highway
them deleverage and improve
0 project in Rajasthan. The
30-JAN-17 28-FEB-17 31-MAR-17 30-APR-17 31-MAY-17 30-JUN-17 appetite for projects. The initial
concession period of the project
public offer of IRB InvIT Fund
is 20 years including
was oversubscribed 1.26 times.
construction period of 910 days.
Risk Return 2.42% 0.94% The company will get tolling
5.07% PROMOTERS rights on the project.
s%
7.23%
FOREIGN INSTITUTIONS
• Bagged Rs 2,100 crore project
IRB 1.08 7.47 NBFC AND MUTUAL FUNDS from NHAI. The Rs 2,100 crore
project is to be developed on
26.97% 57.37% GENERAL PUBLIC design, built, finance, operate
Industry 1.3 5.95
and transfer under the National
OTHERS
Highways Development
Nifty 0.94 5.26
FINANCIAL INSTITUTIONS Programme.
Manufacturing
 INDUSTRY ANALYSIS 1/2
STEEL PRODUCTION STEEL CONSUMPTION
 Total finished steel production in India has increased at a CAGR of  Lower per capita consumption compared to international average
4.70 per cent during FY12– 16, with country’s steel production Per capita steel consumption in India, the world's third largest
reaching to 90.98 million tonnes per annum (MTPA) in FY16. producer of the metal, stood at 59.4 kg per person in 2014, against a
 The country became the 3rd largest crude steel producer in 2016 global average of 216.6 kg
and will become the 2nd largest in 2017, as large public & private  The potential growth of stainless steel in India is enormous
sector players strengthen steel production capacity in view of rising considering the fact that the per capita consumption at 1.9 kg is still
demand. much lower than world average of 6 kg.
 Moreover, capacity has increased to 124.77 million tonnes (MT) in  India’s comparatively low per capita steel consumption & expected
FY171 , which is 2.2 per cent more than FY16, while in the coming growth in consumption due to growing infrastructure construction,
10 years the country is anticipated to produce 300 MT of steel automobile and railways sectors has offered scope for growth
 As of 2017, India is the world’s 2 rd largest producer of crude steel  The consumption of real steel has grew at a CAGR of 1.87 per cent
(up from 8 th in 2003) during FY08-FY171
 Easy availability of low-cost manpower & presence of abundant
iron ore reserves make India competitive in the global set up REAL CONSUMPTION OF STEEL (MILLION TONNES)
90
81.52
80 76.99
73.5 74.1
71
70 66.4
59.3 61.54
WORLD CRUDE STEEL PRODUCTION -2016 (MMT) 60
52.1 52.4
78.6 50
95.6 China
40
104.8 Japan
30
India
162.3 20
808.4 United States
10
Russia
0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
 INDUSTRY ANALYSIS 2/2
Bargaining Bargaining
Competitive Threat of New Substitute
Power of Power of
Rivalry Entrants Products
Suppliers Customers
(Medium) (Low) (Low)
(Medium) (Medium)

 The steel industry is  Capital intensive,  Major steel consumption

highly concentrated,
with the top 5 players
accounting for more
than 70% of the market
share
 Steel companies usually
compete on the basis of  Several regulatory
production capacity,
economies of scale,
access to raw material,
etc.
industry players are  Low threat of substitutes
large and enjoy
economies of scale.
Some have their own
mines for sourcing key
raw materials
clearances required,
including environmental,
land acquisition, etc.
 Large integrated
Aluminium and plastics companies have their
are being used in few own mines to source key
cases in automotive and raw materials.
other consumer durable  Suppliers of materials
sectors. However, it still are generally from the
does not pose significant same industry.
threat to steel  Price is generally market
determined
sectors, such as
automobiles, oil & gas,
shipping, consumer
durables and power
generation, enjoy high
bargaining power and
get favorable bulk deals.
 Smaller customers,
however, do not enjoy
this benefit

NATIONAL STEEL POLICY 2017

Increase per Capita Steel Consumption to 160 Kgs by 2030-31. To domestically meet entire demand of high grade automotive steel, electrical steel,
special steels and alloys for strategic applications by 2030-31. Increase domestic availability of washed coking coal so as to reduce import
dependence on coking coal from ~85 per cent to ~65 per cent by 2030-31

ANTI-DUMPING MEASURES
Anti-dumping Measures Various trade measures were put in place by the Government in 2016. Anti-dumping duties on China, the United States and
other countries proved to be a significant relief for domestic steel producers. A Minimum Import Price (MIP) imposed on certain steel imports in
February last year for a period of six months was later extended. This restricted low-priced steel imports into India to a very large extent.
 HIGHLIGHTS BSE NSE ISIN
Second largest steel company in India (measured by 500470 TATASTEEL INE081A01012
domestic production) with an annual capacity of 9.7
million tonnes SECTOR : STEEL - LARGE
Incorporated on 26Th August, 1907
NEWS UPDATES
Operates in 26 countries
 Tata Steel in long-term tariff contract with Railways-15th July, 2017

Revenues : ₹117,151 crore(US$18 billion) (2016)  Tata Steel commissions solar plant at iron ore mine-11 July 2017
 Tata Steel's April-June quarter output at 2.94 MT-03 July 2017
 Tata Steel, BFC new ISL entrants-14 June 2017
Number of employees : 74,000 (2017)

MANAGEMENT
PRODUCTS
 Tata Pipes
 Tata Precision Tubes
 Tata Shaktee
Ratan N Tata Chairman Emeritus  Tata Steelium
 Tata Structura
Natarajan Chandrasekaran Chairman  Tata Tiscon
T V Narendran Managing Director  Tata Wiron
 10
9.5
BUY

9.1
8.9

8.8
8.5
7.9
33.2

7.5
7.0
6.6
CAGR:
82.6per
cent

9.96 Tata Steel is among the top ten global

steel companies with an annual crude
FY16 FY18 FY12 FY13 FY14 FY15 FY16
steel capacity of nearly 30 MTPA
Production Sales
It is one of the top steel producing
Projected crude steel Production Production and sale of steel (million companies globally with an
(million tonnes) tonnes) annual crude steel capacity of 23.88
MT (in FY17)
FY 15-16 FY 16-17
38,210
+25% 8
6.9 6.9 7 7.1 10.84% of the total market share in
India’s finished steel market and
47,933 7
Cr Revenue 5.84 11.72% of the total market share of
6
from crude steel market.
operations 5
4 Nearly 70 new products launched in
10,102
Cr
+8% 10,896
3
2 1.4
2016-17 financial year.

EBITDA 0.75
1.1 0.9
1 0.21 As on December 7, 2016, Tata Steel
0 announced its plans to invest
2012 2013 2014 2015 2016 USD1.36 billion during 2017-2027, to

9.27
+7% 9.97
support its steel manufacturing at
Port Talbot, United Kingdom.
Production Sales
MnT Crude steel MnT
production
Financial growth (USD billion)
KEY ACHIEVEMENTS MANAGEMENT
BSE NSE ISIN
500228 JSWSTEEL INE019A01038
PORTFOLIO
Sajjan Jindal SECTOR : STEEL - LARGE
Mr. Seshagiri
Rao TYPE - PUBLIC COMPANY
FOUNDED- 1982
VINOD JAYANT VIJAY
NOWAL ACHARYA KELKAR
PARENT- JSW GROUP
HEADQUARTERS-
MUMBAI,INDIA
PRODUCTS SUBSIDIARIES- ISPAT INDUSTRIES LTD.
•HOT ROLLED(HR)
REVENUE- ₹556.04 BILLION
•COLD ROLLED(CR) (US$8.6 BILLION) (2016-17)
•COLOR COATED PROFIT- ₹13.34 BILLION
(US$210 MILLION)(2016-17)
PRODUCTS
EMPLOYEES- 11103
•GALVANIZED
AREA SERVED- WORLDWIDE
•GALVALUME
FOUNDER- SAJJAN JINDAL
•TMT BARS
•WIRE RODS
 8,465
PROFIT/LOSS

7,646
7,515
7,221

7,137
4,000.00

BUY
6,165
5,228

2,000.00

0.00
Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
339

-2,000.00

534

532
419

359
332

221

-4,000.00 Revenue from operations 32% y-o-y

FY11 FY12 FY13 FY14 FY15 FY16 FY17 growth. (Rs. 60,536 cr.)
Gross Revenue NPAT

FY 15-16 FY 16-17 Production volume grew by 26%, vis-a-

vis the domestic growth of 8.5% and
Net debt to EBITDA improved to global growth of 0.8%.
40,85 +39%56,91 3.41 times from 6.39 times.
7cr Revenue from 3cr Net debt to equity improved to 1.85
Board proposed a dividend of 225%
operations times from 2.18 times.
because of generating a high PAT of
Rs.3467cr. during 2016-17 year.

6369 +81% 11,54 Net profit margin increased to At 15.8 MT ,the crude steel
+6.83% from -9.53%. production was the highest ever and
cr Operating 3cr so were total sales of 14.7MT.
EBITDA Projected crude steel production (million tonnes)
Export presence in over 100 countries
73,50
7cr
+10% 80,91
1 cr CAGR: 197.5
across five continents.

Total Assets per cent

The current installed capacity is 18

11.6 +28% 15.8 FY18
MTPA. $11 billion conglomerate, with
presence across India, USA, South
MnT Crude steel MnT FY17 America & Africa.
production
Metal, mining, and chemical
 Macro analysis – The chemical industry
800000 Indian scenario
Industrial Gases
700000
600000 • 3rd largest producer in Asia and 7th largest by
Dyes and Pigments output in the world.
500000
• 1.3% of International chemical trade.
400000
Bases, Gases, and • 32 largest companies generating 42%
300000 OtherInorganic Compounds of industry turnover
200000
Hydrocarbons,Oxygen-
• 16% of the world’s production of dyestuff and dye
100000 functionCompounds and intermediates
0 OtherOrganic Chemicals
2010 2011 2012 2013 2014 2015
Impact of GST
Chemical industry turnover in Rs. million

• Integration of chemicals market by decimating the

2020
2016
2017
Speciality chemicals
tax complications
Expected growth 11% • Lowering of the cascading effect of multiple
USD 139 billion market to reach USD 70
USD 224 billion
billion taxations

Percentage of GDP
India Exports Prospects
Brazil Chemical • Promising prospects for the industry derive largely
13% industry from population growth, the rapid expansion of
2% the Indian middle class and rising purchasing
Malaysia U.S.A
14% 34% Products are power
covered under • The growth of plastic in primary forms and
Others
98%
chemical industry synthetic rubber is set to give a positive push to
the industry. The Swachh Bharat programme is
Indonesia
Global speciality expected to have a major impact on demand for
17%
China chemical industry plastic in primary forms
22%
Export of chemicals amounts to USD
1.21 billion, about 16.8 per cent of export 2013 2023
share of India. 2.8% 6-7% FDI under automatic route
 Chemical Industry Outlook
India’s Chemical Industry (2013-16) Expected Growth of Indian Chemical 403
Industry
226
• 2.11 per cent of national GDP 139
• 3rd largest chemical industry in Asia
• Covers more than 70,000 commercial products
• Government allows 100 per cent FDI 2016 2020
• Heavy growth prospects in domestic markets Market Size (in billion USD)
Growth Drivers of Indian Chemical Industry
• Rise in GDP & purchasing power
• Low-cost Manufacturing
• Govt. Policy support & increase
in investment initiatives
2025 • World class engineering & strong R&D capabilities
• Big Infrastructural Investment

CAGR
Total production of major chemicals (000’ MT) Chemical exports of India (USD billion)
4.71% Supportive Govt. Policies
CAGR 4.71% • Excise duty reduced from 14% to 10%
9396 9440 9628 9632 9884
9170 • Strong laws on anti-dumping to further
26.45 26.44 26.97
6740 22.43 promote the industry
• Policies to set up Integrated Petroleum
13.58 Chemicals & Petrochemicals Investment
Regions (PCPIR)
• Manufacturing of most chemical
products is de-licensed
FY11 FY12 FY13 FY14 FY15 FY16 FY17
FY13 FY14 FY15 FY16 FY17

Competitive Rivalry
(Medium)
• Highly fragmented with
rivalry amongst Companies
• Stiff competition from foreign
competitors as well owing to
100 % FDI
• International companies may
dump chemicals at low price
Threat of New Entrants Substitute Products Bargaining Power of Bargaining Power of
(High) (Low) Suppliers (High) Customers (Medium)
• Huge capital • Buyers tend to have
• Small chemical companies rely • Customers have multiple
requirements & patent specific chemical
on supplies from larger plants, sources of supply
protection are significant requirements
or petrochemical units • Chemical companies are
barriers • No direct substitutes for
• Inputs for a chemical plant bound by long-term contracts
• Other barriers include - a specific chemical
• cannot be easily substituted • Niche specialty chemicals
R&D & personnel requirement
have some pricing power
requirements
Porter’s Five Forces Analysis
 Pondy Oxides & Chemicals
• CMP: Rs. 435.85
Scrip Details: Shareholding Pattern (%)
• Market Cap: Rs. 243.03 Cr BVPS 61.22
• Incorporated on 21st March 1995 52 Week H/L 123.80 / 548.90 Promoters 51.01
• Key People: Chairman- Anil Kumar Bansal,
Div (%) 20 Public (FII+DII) 48.99
Managing Director- Ashish Bansal P/B 7.12 Other 0.00
• Presence : National FVPS (Rs) 10 Total 100.0
• Product range: PVC Stabilisers, Metallic Oxides

18.16
Earnings per share (Rs) Return on Equity (%) 28.25 Net Sales Growth (%)
30.9
12.03
19.15 24.59
18.13
8.89 12.47
2.58 2.48 2.52 7.64 7.48

March March March March March March March March March March March March March March March
2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016

-16.8

10.77 Key Risks:

Net Profit (Rs. Cr)
Net Sales (Rs. Cr) 222.59 215.93
• Cyclicality in end-user industries- POCL’s
186.3
6.93 7.12 growth prospects are heavily linked to the
148.08 overall macro economic situation
• Stricter pollution control norms
• Thin margins if employee or fuel costs
3.11
increase
• Client concentration: Amara Raja Batteries
accounts for 30-40% of domestic sales,
which is effectively 17-18% of POCL’s
Jun 2016 Sep 2016 Dec 2016 Mar 2017 Jun 2016 Sep 2016 Dec 2016 Mar 2017 total sales
 Snapshot: POCL vs. Industry Average

Latest Equity (Rs. In Millions)

EV/EBITDA (TTM)
55.76
5.81
POCL Ind. Avg
BUY
Market Cap/Sales(TTM) 0.30 Quick Ratio (TTM) 0.7 0.4
Dividend Yield (%) 0.69 Debt to Equity (TTM) 2.07 0.08 • According to the "India
ROCE (%) 22.26 PE (TTM) 17.9 8.70 Automotive Battery Market
Total Debt/Equity(x) 2.07 Price to Book (TTM) 3.68 4.45 Forecast & Opportunities, 2018",
the Indian automotive battery
market is projected to grow at a
Imports Mar-17 Mar-16 % Var CAGR of approximately 13%
Sales 215.93 141.33 52.79 during 2013-18, in value terms
406.34
Other Income -1.51 0.29 P to L • The demand for industrial batteries
309.45 287.63 PBIDT 20.01 8.47 136.28
will remain strong given the
255.67 world-wide impetus on solar
Interest 2.41 2.25 7.08
187.48 energy. Also, the back-up power
PBDT 18.10 6.22 190.84
113.76 demand in India could grow on
Depreciation 1.22 1.23 -0.33 power supply bottlenecks and
PBT 16.87 5.00 237.75 increasing industrialization
TAX 6.10 2.07 195.16 • POCL’s products - lead and zinc
Mar'11 Mar'12 Mar'13 Mar'14 Mar'15 Mar'16 Deferred Tax -0.08 0.06 P to L ingots - are primarily used in the
Total Outflow (Rs. Cr) PAT 10.77 2.93 267.81 manufacture of lead acid batteries
i.e. automotive and industrial
batteries.
• Battery replacement demand to
Exports 25 grow at a robust pace
213.66
Dividend History • Expected fall in crude oil prices to
180.08 20
aid margin expansion
140.61 15
126.73 127.23 137.11 • Export focus to reap long term
10 benefits
5 • POCL has moved to sourcing
0 based on flexible pricing thereby
cushioning itself from volatility in
lead prices leading to stable
Mar'11 Mar'12 Mar'13 Mar'14 Mar'15 Mar'16 margins
Dividend %
Total Inflow (Rs. Cr)
 Macro analysis – Mining and metals industry
6,00,000 India: Global position in mineral production
Production
5,00,000 Mineral Rank
4,00,000 Value added
Coal 3
3,00,000 Chromite 3
Profit
2,00,000 Iron ore 4
Number of Enterprises
1,00,000 Bauxite 6
0 Number of Employees Manganese Ore 5
2010 2011 2012 2013 2014 2015

Mining and metals industry in Rs. million

Steel Iron ore Coal

2015 2016
88 million 90 million
tonnes tonnes
Expected
Largest steel Largest iron ore Largest producer Operational mines Largest estimated
production in Of world’s
producer in 2016 producer of coal in 2016 coal reserves
tonnes by 2016 deposits

Impact of currency depreciation Bauxite

• Rupee’s depreciation - positive for the Indian mining sector. Most of the mining companies in
India are net exporters and would experience a positive impact on bottom lines. 2015 2016
• Hikes in export duty, and restriction on mining and blanket bans have prevented the government 88 million 90 million
tonnes tonnes
from earning forex revenue on exports. Largest bauxite
reserves

Impact of GST • Contraction of CAGR of 3.2% expected.

• Will bring the required amount of transparency • “Housing for All by Year 2022”, to boost
• Tax incidence expected to increase marginally under GST regime residential sector, thus indicating boom in
and by more than 20% post GST regime metals and mining.
 Metals and Mining Industry Outlook
Advantage India

1. Competitive Advantage
Bargaining Power of Suppliers
Threat of New Entrants
(LOW-Moderate) Competitive •Strategic location. Hence easy to export
(LOW)
Rivalry to developed countries as well as fast
(LOW) Threat of developing Asian markets
Bargaining Power of
Substitute •88 Varied types of minerals produced-
Customers (LOW)
Products (LOW) metallic, non metallic, fuel related,
minor.

Exports versus Imports •High Demand: Contributors are rising

2. Growth Drivers
100 •Imports falling power, cement, infrastructure, & cement
Value in USD

80 because of the production,

60 rising local •Innovative Assistance: Support to
Billions

Exports
40
production global projects from Indian Companies
20 Imports
0 •Exports falling and betterment of research and
because of high
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016

development facilities.
domestic demand. •Policy Support: 100% FDI; Privatization
Financial Years
of coal blocks; relaxed customs; tax
incentives.
Recent Trends

3. Opportunities
China Longer
Captive duration
USA Mining leases.
India for Coal
•2016 Coal Production:593mil Tonnes.
Australia
Shares in global Indonesia Focus on 2021 target Production: 1.2bil Tonnes
coal production.
Rest of the World Overseas Domestic •High amount of coal Reserves.
India= 7.4% Ventures market
 Company Analysis
BSE NSE ISIN
Sector: Mining & Minerals
590078 MAITHANALL INE683C01011
•Market Cap: 1,345.68 crore.
Profile

•Manufacturer and exporter of Script:

customized manganese alloys. Customers
•CMP: 462.25
•Founders: Mr. S.C. Agarwalla and
Mr. B.K. Agarwalla •Face Value: Rs. 10
•Usha Martin •52 week H/L: 201-543.90
•Jindal Stainless •Book Vakue: Rs. 200.79
•Price/Book: 2.30
Products

• SKP Group
•Ferro Manganese •Dividend Yield: 0.43%
•Silicon Manganese
•Ferro Silicon
Net Worth (in crores) CAGR: Company Stats:
450 •Current Ratio: 1.45
Management

400 •Quick Ratio: 1.12

•Chairman and MD: Mr. S.C. 350 •Debt to Equity Ratio: 0.25
Agarwalla 300 •Inventory turnover Ratio: 2.70
•CEO: Mr. Subodh Agarwalla 250 •Asset turnover ratio: 2.70
•President and CFO: Mr. Sudhanshu 200
Agarwalla 150
100 Shareholding:
50 Promoter: 70.69%
0
The company also operates three FII+DII: 29.31%
2011 2012 2013 2014 2015 2016
wind turbine generators (one in
News

Maharashtra and two in Rajasthan) Total Share Capital: 29.11

Equity Share Capital: 29.11
with a cumulative capacity of 3.8 1,345 CR 493.64 CR Reserves: 365.56
MW. Market Capital Total Assets Net Worth: 394.67Crore
 BUY/SELL
Net Sales Net Sales (Crores) CAGR= 13.62% EPS (Rs.) CAGR= -11.51% Peers:
1500 60 •20 Microns
50 Mkt Cap: 135.85cr; Earnings/share: 2.65
1000 40 •Ashapura Mine:
Mkt cap: 482.77cr; Earnings/share: 7.44
30
•Ferro Alloys
500 20
Mkt Cap:170.08cr; Earnings/ Share:-0.22
10 •Indian Metals:
0 0 Mkt Cap: 1410.9cr; Earnings/Share: 92.61
2011 2012 2013 2014 2015 2016 2011 2012 2013 2014 2015 2016

Recommendation: BUY
Expenses (Crores) CAGR= 14.82% Dividends (in crores) CAGR= 14.86%
1200 •MAL currently trades at a higher
8 Price/Book ratio than its peers.
1000
800 6 •MAL has a successful operating model
600 4
with relatively high net profit margin
400 and asset returns.
2
200 •Its YOY change in revenues and
0 0 earnings is better than its peers.
2011 2012 2013 2014 2015 2016
2011 2012 2013 2014 2015 2016 •In first 3 quarters of 2015-16, most
alloy companies reported losses and
EBITDA (in crores) CAGR= 2.92% PBT (in Crores) CAGR= 0% some companies even discontinued
150 150 operations. MAL was one exception
100 100
which reported a PAT of RS. 32.7cr.
•Compared to its peers, MAL has had
50 50
faster growth rate previously and a
0 0 current P/E ratio that suggests faster
2011 2012 2013 2014 2015 2016 2011 2012 2013 2014 2015 2016 growth in future.
Pharmaceuticals
 Industry Analysis
SWOT Analysis PESTEL Analysis Social Environmental
Strength Obesity trends in India
• Largest provider of generic Political
60 • Disposal are
medicines globally, with a 20%
• Make in India programme 40 posing a bigger than
share in supplies by volume.
• Department of previously anticipated
• Producer of some of the cheapest 20
Pharmaceuticals plan to 0 threat.
drugs in the world(labour costs
launch a venture capital fund 1975 1975 2014 2014 • Climatic conditions
are 50 to 55% cheaper than in women men women men
of Rs 1,000 crore and demographic
the West) Weakness • 50% public funding in the obesity variation might
• Low investment in R&D • Poor health insurance impact the drug
pharmaceuticals sector.
• Poor all round coverage. market
infrastructure is another Economic • Almost 47 percent of
challenge. older Indians have at
• Delays in clinical trial 350 least one chronic
280 disease. Legal
approvals.
210
Opportunities 140
• Global sales contribution of biologics 70 • The 2005
Technological
in pharma is expected to increase 0 Amendment to
from 24% in 2015 to 27% in 2020. 9 10 11 12 13 14 15 • Building new the Patents Act, 1970
• Patented products, consumer medical tourist technologies like reintroduced product
healthcare, biologics and public • Medical Tourism is projected Precision medicine patents for
health- offer significant potential. to grow at 20-25% over the and 3 D Printing pharmaceuticals.
These opportunities account for USD next 5 years. • Reliance and • Clinical trials with
5 billion. • Reduction in the overall expansion of compliance to GCP
Threats transaction costs with automated IT system helps to ensure that
• FDA- From 2008 to 2015, the the withdrawal of CST in pharma sector clinical research
US has issued around 50 • GST- Help pharmaceutical • started focusing on participants are not
warning letters to Indian companies the location- based exposed to undue
companies, 40% of which led to in rationalising their supply capabilities and wide risk and the data
import alerts. chain and would also enable a scale use of smart generated are valid
• Imports increased moderately by flow of seamless tax credit phones and accurate
less than 4% in value terms
Top 5 players in the market Mergers and Acquisitions
Sun Pharma- Largest Indian pharma company in the
14% US & 5th largest globally. • Ranbaxy and Sun pharma- Deal valued at US$4
40% Sun Pharma’s R&D spending is 9.1 per cent of the billion is one of the biggest Merger and
14%
total sales in the March quarter of FY16, which grew Acquisition transactions in India.
15% at a rate of 23 per cent YoY, in comparison with March • US-based Abbott Laboratories acquired the
17% quarter of FY15. domestic formulations business of Primal Heath
Cipla Lupin Piramal Enter care at a consideration of $3.72 billion
Cadila health Sun Pharma

In terms of
9 revenue share • 1970- Patent act passed; export
generic drugs Phase IV(after 2010)
initiatives taken.
21 form the largest • 1990-00-Liberalised market;
segment of the foreign operations; Amendment
70 Indian pharma Phase II (1970-1990)
Phase III (1990-2010) Act 2005
sector in terms of • 2010- NPPP; Increased patent
Generic drugs volume is the filing
OTC medicine largest provider of Phase 1(Before 1970) • 2010-15- Health policy draft;
Patent drugs generic medicines Government control and drug 100% FDI
Revenue share of generic, phase
OTC and patented drugs

R&D which focuses on

identifying disease
target, drug research
and development
Post-market
Obtaining Supply chain and Marketing, sales and
surveillance and
Regulatory approvals manufacturing Distribution
pharmaco-vigilance

Pharma Value Chain

 Aurobindo Pharmaceuticals
BSE-727.20 NSE-731.05
Aurobindo Pharmaceuticals
900
• Founded in 1986 by Mr. P.V. Consolidated Formulation Manufacturing 800
700
Ramaprasad Reddy and Mr. K. Revenue Revenue Facility 600
Nityananda Reddy. International- 87% US -55% India- 18 500
400
• Aurobindo Pharma became a Domestic- 13% Europe - 28% US- 3
300
EA & ARVs - 17% Brazil- 1
public company in 1992 and 200
Employees- 15000+ 100
listed its shares in the Indian 0
stock exchanges in 1995.
• Market Cap - 42,420 crore.
• On May 29, 2017, Aurobindo Pharma Ltd reported 4th quarter
Management- 2017 earnings of 9.10 per share.
• N Govindarajan- CEO & MD • Aurobindo Pharma Limited had revenues for the full year 2017
• Mr.K.Ragunathan-Non- of 148.45bn. This was 8.75% above the prior year's results. Market Share (In Crore rupees)
Executive Chairman • Aurobindo Pharma Limited had 4th quarter 2017 revenues of
40,821.28
35.82bn.
42,420.82 1,32,153.78
• Exports to over 125 countries • Obtained the approval of the US Food & Drug Administration
across the globe with more (USFDA) to manufacture and market its product, Meropenem
than 70 per cent of its revenues injection 500 mg/vial and 1g/ vial. March 2017. 45,481.64

derived out of international Formulations Revenue (Rs million)

Revenue Break-up(RS
operations. 48,011.48 55,824.68
million) 50,664.53
18913
• Successfully completed the Sun Pharma Cadila Health
31303.7
USFDA audit in its key plants. 21% Piramal Enter Lupin
61439.9
Revenue from the plant Cipla Aurobindo Pharm
currently stands at 88 mill $ and Emerging markets Europe US Dr Reddys Labs
is expected to reach 160 mill $
till the end of next year. This 79%
REVENUE CAGR- RETURN ON RETURN ON CAPITAL
move will increase the 33.4% EQUITY-32.2% EMPLOYED-26.2%
international presence of ARBP, Formulations Between 2012-13 & Between 2012-13 & Between 2012-13 & 2015-16
amidst an unstable market. API 2015-16 2015-16
Financial Statistics
NET SALES (IN
CRORES) 30
Profitability Ratios OPERATING PROFIT (IN
RP. CRORES) AND OPM
BUY
• We expect ARBP’s
15000 2012 2013 2014 2015 2016
20
4000
share price to remain
10000
10 3200 range bound in the
0 2400 near term as it has
5000 Mar '16 Mar '15 Mar '14 Mar '13 1600 moved up ~50% in
Operating Profit Margin(%)
800 less than two months.
0 0 However, the key
MAR`12
MAR`13
MAR`14
MAR`15
MAR`16 Net Profit Margin(%)
STANDALONE PROFIT catalysts in 2HFY18
STANDALONE CONSOLIDATED
Return On Capital Employed(%)
CONS OP PROFIT will help drive growth
Net Sales have seen a dramatic ARBP has always kept a healthy in the medium term.
The standalone operating profit Has
uprise. From march 2012 to march operating profit margin. In march We have increased our
seen an uprise from 573.5 cr
2016, sales have 4627 cr to 13896 cr. 2016, it had 26.71% opm, 17.67 % target multiple due to
to2449.04 in a 4 year span from
npm and 24.37% roce. enhanced visibility of
2012 to 2016.
growth.

EBITDA, PBT, PAT (RS IN CRORE) EPS GROWTH EQUITY DIVIDEND (%) AND • Only ARBP has
3000
NET PROFIT (RS IN CRORE) received approval by
60 2000 now for production of
2500
2000 40 1500 Renvela. Ranvela will
1500
drive atleast >12-13%
20 1000
of FY18E PAT for
1000
0 500 ARBP.
500
FY19e
FY18e
FY11
FY12
FY13
FY14
FY15
FY16
FY17

0
0
MAR`12
M AR`13MAR`14M AR`15MAR`16
MAR ` MAR ` MAR ` MAR ` MAR ` • PAT has tripled in the
-500 -500 12 13 14 15 16
past 4 years.(495 cr in
EBITDA PBT PAT
EPS(INR) EQUIT Y DIVIDEND NET PROFIT Mar` 13 to 1700 cr in
EBITDA has increased from 272.7 cr Mar` 17).
EPS is on a growth spree. From Net Profit has increased from 495 cr
to 2632.36 cr. PAT has reached FY11 to FY 17, EPS grew at 27% in march 2012 to 1619.67 cr in
1619.67 cr and PBT has reached • Expected increment in
CAGR, and is expected to grow at march 2016. At this rate it is
2140.37 cr. PAT for 2018 is
13% CAGR in the next 2 years. expected to cross 2000 cr by 2018 16.08%.
 Sun Pharmaceuticals
BSE-524.25 NSE-523.55
Sun Pharma
Among top Over half the Market 800
Strong
five Indian sales from capitalisatio Revenue base of 700
presence in
pharma North n of USD USD 2.1 billion
generics 600
• Sun Pharma was set up in 1983, companies market America 1321.6
500
crore
with a compact Sun Pharma 400
manufacturing facility for tablets 300
Formulation Revenue
and capsules 200
• Launches it’s IPO in 1993 and it’s 100
research unit became the first • In March 2017, Sun Pharma Ltd reported 1st quarter 0

pure research company to be 2017 earnings of 0.40 per share.

listed on Indian Stock Exchange • Its revenues increased from 3302.9 crore in FY11 to
• Sun Pharma’s US$ 4 billion 8046.28 crore in FY16 which is over 143 %.
acquisition of Ranbaxy in 2014 • Sun Pharma’s overseas arm Taro reported 26% decline in
creates world’s fifth largest its revenue from a year ago and 11% fall quarter-on-
pharma company quarter (q-o-q) to $196 million. Net profit fell 28% year-
on-year, while it was down 41% q-o-q.
Market Share (In Crore rupees)
Management-
• Dilip Shanghvi-Managing 40,821.28
Director Aggressive Expansion
42,420.82
• Israel Markov - Chairman
• It has 26 manufacturing facilities
Acquired 85.1 % Acquired Novartis AG, to
across four continents and 1,32,153.78
stakes in Russian distribute its cancer drug
employs more than 14,000 people 45,481.64
company Biosintez for Odomzo for around US$
• More than 72 per cent of its sales
US $ 24 million in 2016 175 million
come from international markets
48,011.48 55,824.68
• While some of the facilities of Sun Pharmaceutical are Entered into a 50,664.53
still under import alert, some plants of Sun have distribution agreement
received warning letters. The FDA does not give new with Mitsubishi Tanabe Sun Pharma Cadila Health Piramal Enter

drug approvals from facilities that receive a warning Pharma Corporation to Lupin Cipla Aurobindo Pharm
letter. Halol, which accounts for more than 50% of Sun’s market 14 prescription Dr Reddys Labs
US sales is grappling with USFDA norms brands in Japan
Financial Statistics
3000
Net Sales(in crores) Total Assets, Asset
Turnover Ratio
10000
Operating Profit SELL
2000
50000 1 • Morgan Stanley has
5000
slashed the target price
1000 on the stocks by 32%
0
0
2012 2013 2014 2015 2016
-1000
2012 2013 2014 2015 2016
0 0 • Sun is facing a
2012 2013 2014 2015 2016 -5000 confluence of challenges
-2000
TOTAL ASSETS
Standalone Profit Cons Op Profit
– lack of new approvals
-3000 ASSETS TURNOVER RATIO
owing to Halol, rising
Net Sales have seen a dramatic Total assets have increased from The standalone operating profit has cost structure from
rise. From march 2012 to march 7918.42 crores in Mrach 2012 to seen an downfall from 1758.62 cr to specialty build-out/R&D,
2016, sales have increased from 27146.75 crores in March 2016 -434.95 cr in a 4 year span from and erosion in the US
4015.56cr to 7614.64 cr. with declining asset turnover ratio 2012 to 2016. business.

• Challenges in the US will

EBITDA,PBT AND PAT(in Earnings per Share(Rs) Net Profit (Rs Crore) persist in FY18 due to
3000 pricing pressure,
crores) 25 5000
2000 increased competition for
20 4000 Taro and no meaningful
1000
15 3000 launches in nearby
0
2012 2013 2014 2015 2016 2000
future.
-1000 10
1000
-2000 5 • Earnings before interest,
-3000 0 0 tax, depreciation and
-4000 amortization (Ebitda) fell
43% from the same
EBITDA PBT PAT
quarter last year and 21%
from the previous quarter
EBITDA has decreased from From FY11 to FY 16, EPS grew by Net Profit has increased from 2587
1801.98 cr to -73.29 cr. PAT has 56.8 % from 12.5 to 19.6 cr in march 2012 to 4716 cr in
• Ebitda margin shrunk
reached -1073.36 cr and PBT has march 2016.
1,618 basis points on
reached -1067.91 cr.
year
FMCG
 INDUSTRY ANALYSIS
2025E
Urban/Rural Industry break up (2016)
2016
Growing demand 2015
2013
• Rising incomes 40
2012
USD 49
• Growing youth population Billion 2011
60
• 1st time modern trade shoppers spend 2010
tripled to USD 1 billion in 2015 2009
• Brand consciousness
0 50 100 150
• Faster growth (modern trade in Tier 2/3 RURAL URBAN
cities RURAL FMCG MARKET (USD BILLION)
• Urban segment is the largest contributor to the
overall revenue generated by the FMCG sector • Low penetration levels in rural market offers
in India room for growth
• Semi-urban and rural segments are growing at a • Disposable income in rural India has increased
rapid pace due to the direct cash transfer scheme

Trends in FMCG revenues over the years (USD Policy Support

Higher investment billion) • 100% single brand retail
• 51% multi brand retail
USD 60 USD 180 • 40% is the reach of initiatives like Food
billion 3 billion Security Bill and direct cash transfer
120 • USD 100 million is the minimum
100
capitalization for foreign FMCG companies to
80
• USD 743.72 million is the expenditure 60
invest in India
to be incurred by Patanjali I various 40 FMCG Market Share
food parks in Maharashtra, Madhya 20 120 103.7
0 100
Pradesh, Assam, Andhra Pradesh and
Uttar Pradesh 80 FMCG
60 49
• USD 254.5 million is the investment
REVENUE
40 Market
by Wipro to diversify and expand its
product range in energy drinks,
20
0
Share
2016 2020F
detergents and fabric conditioners
 SWOT Analysis Porter’s Five Forces
Strength
 Low operational costs Threat of new entry Competitive Rivalry
 Presence of established  Huge investments  Private label
distribution networks in both in setting up brands by retailers
distribution Threat are priced at a
urban and rural areas
network and of a discount to other
 Presence of well-known brands
promoting brands new players
in FMCG sector
 Highly fragmented entry  Highly fragmented
Weakness industry as more industry.
 Lower scope of investing MNCs are entering.
in technology and
achieving economies of
scale, especially in small
sectors
 Low exports levels Competitive
Supplier
 Counterfeit Products. Rivalry
Power
Opportunities
 GUntapped rural markets
 Rising income levels Supplier Power Buyer Power
 Large domestic market.  Big FMCG  Low switching cost
 Export potential companies are able induces the
 High consumer goods pending to dictate the prices customers’ product
Threat shift
through local
from  Influence of
sourcing from a
Threats subs. marketing
fragmented group
 Removal of import restrictions of key commodity strategies
resulting in replacing of suppliers
domestic brands Threat of substitution
 Slowdown in rural demand  Presence of multiple brands
 Tax and regulatory structure  Narrow product differentiation under
many brands
 Price war
Manpasand Beverages BSE NSE ISIN
539207 MANPASAND INE122R01018
Sector: FMCG
Profile: Market Cap: ₹ 4,618.21 Cr.

A customer centric approach, value for money offerings, strong

focus on affordable price points, innovation and research, brand
building, aggressive production capacity expansions and strong
distribution strategies are the company’s major strengths.
N
E
W

P
R
O
D
U
C • Manpasand Beverages PAT up 47.6% in Q4 FY 2015-16
T
S
• Earnings Per Share (EPS) for Q4FY16 was at Rs. 5.14
Management: Dhirendra Singh, Chairman and Managing
Director • For the year ended 31st March 2016, company has reported a
net profit of 5,056 lacs against a net profit 0f 2,995 lacs in the
Recent News: Manpasand Beverages made it to Forbes Asia’s previous year, which shows a growth of 68.8%.
latest ‘Best under a Billion’ list of top 200 publicly traded
companies in the Asia Pacific region. • Net sales of 55,670 lacs in FY 2015-16 is higher by 54.7%
compared to 35,975 lacs in the previous fiscal.

The Way Ahead: The company has tied up with leading food
and restaurant chains including Havmor, Barista, Baskin
Robbins, METRO Cash & Carry along with 2,000 modern
retail-format stores and is in advanced talks for tie-ups with
many multinational food chains and retailers
• The company has become debt free after pre-paying all of it’s
outstanding borrowings from the IPO proceeds.
• Manpasand Beverages is proud to be associated with Red
Cross Society to prevent Thalassemia and Sickle Cell Anaemia
 BUY
Debt- Equity Ratio Shareholder's funds (Rs. in lacs)
1 80000 • Current ratio of 1.73
0.8 60000 means that the
0.6 company would be
40000
0.4 able to pay it’s short
0.2 20000 term debts.
0
2011-12 2012-13 2013-14 2014-15 2015-16 F 0
2011-12 2012-13 2013-14 2014-15 2015-16 • Negative “net cash
used in investing
Revenue (in Rs. crores) I Peer Comparison activities” means that
the company has been
300
250
N Sales Qtr (Rs. Cr.) investing in expansion.
Div. Yld. (%)
200
150 A CMP (Rs.) • Positive “net cash flow
100 -100% -50% 0% 50% 100% from operating
50 N Manpasand Beverages Orient Beverages
activities” means that
0 the company has been
C Unno Industries Transglobe Foods
Jun-14

Jun-15

Jun-16
Apr-15

Apr-16
Aug-14

Aug-15

Aug-16
Dec-14
Feb-15

Dec-15
Feb-16

Dec-16
Feb-17
Oct-14

Oct-15

Oct-16

investing in expansion.
ANS Industries

Net Profit (in Rs. crores)

I • FMCG sector for
health beverages is
Dividend Payout (in %)
40 A 20
under an expansion
and experiencing good
30
L 15 growth.
20
• The company is
10 S 10
focusing on expanding
5
0 its product and
Jun-14

Apr-15
Jun-15

Apr-16
Jun-16
Aug-14

Dec-14
Feb-15

Aug-15

Dec-15
Feb-16

Aug-16

Dec-16
Feb-17
Oct-14

Oct-15

Oct-16

0 distribution channel to
-10
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 reach its existing core
business and also new
opportunities.
 BSE NSE ISIN
JYOTHY LABORATORIES LTD.
532926 JYOTHYLAB INE668
Profile: Market Cap: ₹ 6,805.87 Cr. Sector: FMCG

Jyothy Laboratories began its journey in 1983 with a single product – Ujala Supreme – in the fabric whitener
category. Over the years, the Company invested in market and product research to diversify into various
Strengths
household product categories such as insecticides, fabric stiffeners and soap, leading to the launch of
1. Ujala Supreme, the brand
successful products like Ujala, Maxo and Exo
starter, still the core product of
CEO: S. Raghunandan Rao the company.
2. Holds 80% of the market share.
Management: M P Ramachandran, Chairman and Managing Director 3. Undisputed market leader and
77.% commands a strong market
New Products: Market share share.
1. Household Insecticide. of Ujala,
2. Surface Cleaner. powerbrand Weaknesses
3. Air care Products. of Jyothy 1. Overdependence on a
single product, even
10.7% 8.3% with the launch of Exo
Presence(National/International) :
Growth rate Growth by and Maxo.
National of Exo, fastest value for 2. Product portfolio is too
Recent News: growing Margo, the concentrated in
superbrand of premium
• Henkel bids for 27% ownership in Jyothy category soap comparison to other
Jyothy companies.

The Way Ahead: The company expects a Opportunities

positive impact of the implementation of GST 41.6% 1. Ventured into Fabric Spa business,
15.5%
on the consumption sector, the unorganized Growth of which is an untapped market..
Growth for
sector vacating market share in favour of the Maxo ‘Fits All
Pril, that is Threats
organized FMCG industry. For frontline Machines’
vaporizer,
now available • The aerosol segment is having stiff
players like Jyothy, consumption tailwinds will as ‘superior competition.
making it
not only be reflected in organic sectoral growth degreaser’ bar
fastest growng • Even though Jyothy has a diversified
but also increase market share transfer to the with its own
brand in portfolio, the margins are not very
scrubber
organized sector of which it expects to emerge insecticide good.
as an important beneficiary.
15
Earning Per Share (Rs. Cr.)
800
Equity Dividend (%) BUY
10 600

400 • Company’s operating

5 income is increasing
200
and it is investing
0
Mar'13 Mar'14 Mar'15 Mar'16 Mar'17
F 0 aggressively in
Mar'13 Mar'14 Mar'15 Mar'16 Mar'17
expansion in untapped
Revenue (in Rs. crores)
I Peer Comparison sectors.
500 N CMP / BV • CAGR of 21.3% and
400 Sales Qtr (Rs. Cr.) 263% growth in
300
A NP Qtr (Rs. Cr.) revenues from 2011-16
Mar Cap (Rs. Cr.) shows the company is
200 N CMP (Rs.) on a growth spurt.
100 -100% -50% 0% 50% 100%
0
C Jyothy Lab. Pee Cee Cosma Hipolin
• Henkel is acquiring
26% in Jyothy
Apr-15
Jun-14

Jun-15

Apr-16
Jun-16
Aug-14

Dec-14
Oct-14

Feb-15

Aug-15

Dec-15
Feb-16

Aug-16

Dec-16
Feb-17
Oct-15

Oct-16

I Yuvraaj Hygiene Farmax India Ess Dee Alumin Laboratories, which

will give the company a
Net Profit (in Rs. crores) A Return on Equity (Rs. Cr.) peek into the German
market and get
50
120
100 L 40
expertise from Henkel.
80
• Net profit margin of
60
40
S 30
20 11.7% (FY2016- 17)
20
0 10
was among the best in
the country’s FMCG
Jun-14
Aug-14

Aug-15

Aug-16
Apr-15
Jun-15

Apr-16
Jun-16
Dec-14
Feb-15

Dec-15
Feb-16

Dec-16
Feb-17
Oct-14

Oct-15

Oct-16

0
Mar'13 Mar'14 Mar'15 Mar'16 Mar'17
industry as our net
profit increased
substantially during the
year under report.
Technology media and telecom
 MEDIA TELECOMMUNICATION
4500
4000 1400
3500 1200
USD Million

3000
1000

USD Million
2500
2000 FDI inflows into the 800
1500 entertainment 600 Cumulative FDI inflow into
1000 sector during April the telecom sector totaled
400
500 2000 to March 2017 to USD 23.94 billion till
200
0 rose up to USD 6.49 March 2017
0
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
FY17
FY18
FY19
FY20
billion

FY07
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
FY17
Years
350
Years
35
300 30
250 25

USD Million
USD Million

200 20
Total Spending Total Revenue expected
150 15
increased from $7.8 to increased by 50% by
100 to $8.1 mn 10 2020
50 5
0 0
2008 2020 2016 2020
Years Years
350 120
300 100
250
80
USD Million

USD Million

200 Total Revenue 60 Wireless segment

150 expected to
40 accounted for around
100 increased by 5.5% in 2.4% of the total
50 2017 20
telecom segment
0 0
2008 2020 Wired Segment Wirless Segment
Years Years
P
Rs.3000 crore 18% Improved the payment terms for spectrum Sharing of active telecom
The burden will be on the auctions by including upfront and payment and operations like antenna
Optical Fiber customers as the cost will be and feeders between
payment in installments
Cable transferred to customers operators

E 40 lakh With the new services provided by Tele- Density ( total connection per 100
8.2% of people Jio, there has been increase in the individual)
GDP employed telecommunication revenue 17.9 in FY07 to 92.59 in FY17

S
Indian Literacy rate has increased
by 10% due to expansion in
12.7%
mobile network across India
The mobile data user in the country has India has become the top country in mobile
increased to 420 million by June 2017 data usage with users consuming more than
with rural India growing at a much higher 100 crore gigabyte of data per month and is
rate then the rural India. expected to increase in future.

T
Twitter Seva 25000 public Wi-Fi hotspots Corporate Tax Rate
online communication platform for Block level infrastructure telecom sector 34.6% as compared to the world
resolution of user complain in postal help.(GOVERNMENT OF INDIA) average of 22.5% as per the data from
and telecom sectors . August 2016. (TAX FOUNDATION.ORG)

E
With increase in number of telecom
towers, there is more exposure of
radiation as a result of which number of
cancer patient is increasing
With increase in print media , that Noise level in and around the
is digital , there is an afforestation mobile tower operators are more
as less numbers of trees are cut then the specified level

L
Recently Internet Service Providers
passed a law stating net neutrality as
illegal because the customer has the right
to visit any website
TRAI decided to impose a fine of Rs.3050 crore on
TRAI rejected the proposal to
India’s top three telecom providers for deliberately
sought a floor price for voice and
blocking calls from Jio as they were in non compliance
data services ,
of the terms and conditions of the license.
 Bharti Airtel
HIGHLIGHTS
Sales Volume
• Market Capitalization :- MANAGEMENT
Rs165,132.60 crore Net Income
• Airtel is an Indian global
Telecommunication service
company
Earnings before Taxation
• Present in India , Pakistan SUNIL MITTAL
Bangladesh and Srilanka. Cash Profit from Operations
• With over 3.5 lac biometric SHISHIR
devices, biggest digital PRIYADARSHI EBITDA before exceptional
transaction platforms in the Items
country.
• Overall ,the only company DINESH
MITTAL Gross Revenue
currently with 2G, 3G and 4G
services in all 22 circles. VK CRAIG
VISHWANATHAN EHRLICH 0 5000 10000 15000 20000

FY 2015-16(USD Million) FY 2016-17(USD Million)

DRIVING TRENDS
Company Shares
R E C E N T

•Airtel invested and

• The number of internet users in 30
India stood at 432 Mn as of Dec
upgraded more than 70% of
Other , 27.2
2016. our broadband customers to
• Smartphone shipments grew 40-100 mbps speeds 25 Bharti Airtel Ltd ,
14.8% Y-o-Y to 27 Mn in first through the new V-Fiber 22.1
quarter of 2017 as per IDC.
technology.
• With Govt. of India’s ‘Make in Vodafone India
India’ programme, mobile •Airtel became the first 20
Ltd , 17.3
production in India has already company to launch 3G
crossed the 100 Mn mark and is (2100Mhz + 2100Mhz) dual 15
ZERO Idea Cellular Ltd ,
set to touch 500 Mn in the next carrier implementation 14.1 Bharat Sanchar
two years. Reliance
achieving a speed of 42 Nigam Ltd , 10.7
• By 2020, India is set to become Communications
Mbps in DL, RJ, BH, TNC & 10 Ltd , 8.5
the world’s youngest country
with 64% of its population in JK.
working age group •The First to successfully 5
launch Payments Bank – in
line with the Government’s
vision of financial inclusion. 0
 • India’s No. 1 Telco's net profit
of Rs 373 crore for the three
GROSS REVENUE EBIT VALUES CUSTOMER BASE months ended March — its
8000
28000 1400 smallest in four years —was
27500 7000
1200
sharply lower that the average
27000 6000 estimates
26500 1000
5000

SELL
800
26000 4000 • Revenue fell over 12% to Rs
25500 600 21,935 crore from a year earlier
3000
25000 400 as data and voice rates fell
24500 2000
200
24000 1000
0
• FY2017 India revenue growth
23500 0
2012-13 2013-14 2014-15 2015-16 2016-17 of 3.6% to Rs 73,422 crore was
2015-2016 2016-2017 2015-2016 2016-2017
“muted” compared with the
NON WIRELESS REVENUE SHARE double-digit growth seen in
DTH SUBSCRIBER BASE
preceding years.
14
FY2017 • With the launch of Jio Phone, a
featured phone specifically
12
targeted to VOLTE, problems
FY2016 have increased for Airtel
10
• The Company’s consolidated
19 20 21 22 23 24 25 net debt as on March 31, 2017
8 increased by USD 1,490 Mn to
INCREASING REVENUE MARKET USD 14,094 Mn as compared to
SHARE last year
6
• With Reliance Jio offering free
FY2017 4 4G mobile handset with a
amount of Rs. 1500 which will
be returned back after 3 years,
2 will lead to decrease in the
FY2016 number of consumer base for
Airtel.
0
30 31 32 33 34 2014-15 2015-16 2016-17
 BSE NSE ISIN
PVR CINEMAS 532689 PVR INE191H0101
4
MANAGEMENT
HIGHLIGHTS
The Most Premium Film SECTOR : Media & Entertainment
And Retail Entertainment
Company SALIENT NUMBERS

Began its operations in 1997 AJAY BIJLI

CHAIRMAN & MD Cash Flow from Operating Activities 324.92 331.94
587 screens at 128 properties
in 51 Cities(18 States And 1 Net Profit 114.4 92.92
Union Territory) pan India. SANJEEV KUMAR
JOINT MD
Entered the billion dollar cap in Sales 1687.91 1,979.35
FY17 with market cap Rs.6261
Cr GAUTAM DUTTA
CEO FY 2015-16 FY 2016-17

IMPACT OF GST RECENT

Movie Tickets taxed at DEVELOPMENTS
28%, F&B at higher
rate of 21% in
Maharashtra/Delhi
Other regions have an
adverse impact due to the
hike in tax rate
ITC(input tax credit)
SHAREHOLDING PATTERN
•4DX screens in Bengaluru, 11.11
20.15
Mumbai India's first virtual reality
lounge at PVR ECX, Mall of India,
Noida.
•EBITDA rose to 376 Cr with
5% and Revenue with 14% to
Rs.2182Cr 68.74

offsets the hike on •Consistent rise in profit and

tax(F&B, Movie Cost) decrease in Debt/Equity
through rental
ratio(0.76) over last four INDIAN INSTITUTION NON-INSTITUTION
payments and security quarters.
costs
 BUY
2500 EBITDA 1800 Variation in Stock Price
REVENUE
1600
2000 1400
400 1200
1500 CAGR-28%
300 1000
1000 200 800
600
100 • Overall revenue of INR 6.4 billion
500 400
in Q1 FY18 marking a YoY
0 200 growth of 13.2 %.
0 0 • EBITDA margins declined to

Dec'16
Aug'16

Nov'16

May'17
Oct'16

Mar'17
Jan'17

Apr'17

Jun'17
Sep'16

Feb'17

Jul'17
17.6% in Q1 FY18
Adjusted PAT stood at INR 445mn in
EV/EBITDA Q1 FY18 as against INR 444mn in
Operating Profit(crore) EPS Q1 FY17
25 160 145.35152.09 • Expected revenue CAGR of 18 %
20
140 19.8 20 and PAT CAGR of 49 % over
.
120 FY17 -19
15 100
80 14 13.8 • This shows a ‘Buy’
10 60 50.72
40.87 recommendation of the stock as it
40 15.79
5 20
has room for growth and growth
0 0 3.28 drivers are in expansion into south
region, uptrend in advertisement
revenue
Mar'17 Mar'16 Mar'15 Mar'14 Mar'13
• The factors which drive the growth
PVR Most Aggressive of PVR are its aggressive screen
ROCE(%) Spends per Head(SPH) in Rs. additions, increase in RoCE and
screen addition
14 12.5 700 634
11.5 579 spend per head of the consumers.
12 10.7 600 100
516 Also, the ITC(Input Tax Credit) comes
9.5 464 80
10 500 421 as a benefit to the entertainment
8
8 400 60 industry, offsetting the tax rate in F&B
6 300 40 in regions other than Maharashtra and
20 Delhi.mkkk
4 200
2 100 0

0 0
FY14FY15FY16FY17FY18E FY14FY15FY16FY17FY18E
Information Technology
 IT & ITES – Industry Analysis
IT industry focus IT Key Players
 IT in India includes: IT Services + Business Process  TCS is the market leader accounting to 10.4% of the
Outsourcing IT& ITES sector revenue in FY2016, followed by Infosys,
 Currently focuses on low cost solution to services HCL, Wipro
business in global IT  Top 5 firms contribute to 25% of sector revenue.

IT Revenue Trends
Percentage of Revenue  Sector revenue rose to US$155 billion in 2016 from
200 Revenue Share US$146.5 billion in 2015
Export IT Services  Exports grew by 9% in 2015-16 compared to 14% growth
150 in FY15 and are expected to grow by 7-8% in FY18.
Domestic 21%  Domestic is projected to experience sharper growth of 10-
BPM
100 11% in FY18
23% 56%
 The revenue from IT is steeply declining from FY15 and is
Software
50 expected to become 5.3% in FY17.
Products
 Major chunk of revenues is coming from IT services and
0 BPM.
FY10 FY11 FY12 FY13 FY14 FY15 FY16

Automation in IT Future Prospects : Cloud, SMAC,

There is steeply declining in IT services revenue over the
year due to worldwide digital disruption .
 IT industry is moving towards Large scale automation.
 Almost all the major players are investing heavily and
automating their end-to-end processes
 Infosys’s Mana, Wipro’s Holmes and TCS Ignio have
replaced IT head count .
 Cost cut on Employee Wages resulting in non-linear growth
in future.
E-Commerce
 Cloud service market slated to grow 35% to reach
US$1.3 billion according to Gartner.
 SMAC collectively offers $1 trillion opportunity
 Indian Healthcare IT market is expected to grow 1.5
times in 2020.
 India is increasingly becoming preferred location for
data centers.
 Infosys BSE NSE ISIN
500209 INFY INE009A01021
Company Profile
Founded : 7 July 1981
Diversified Revenue Streams
Presence : National/International Financial services
Functions : Business consulting, Revenue Sector Wise
Information technology and Manufacturing
7.48 3.22
outsourcing services 27.09 Energy communication &
12.32 services
“We must bring iautomation into everything we Retail
do. In addition to doing our job, we must work
Health
on building a tool that helps us do the job
faster/better/cheaper.” -CEO & MD, Vishal 16.39 10.96 Hi Tech
Sikka
Other
22.53

Recent Moves Next Gen

Mar
2015 Panaya, Inc., a leading provider of automation technology Percentage Revenue in New Tech
10%
Jun New Tech
Skava, a leading provider of digital experience solutions
2015
Existing Tech
90%
Nov Noah-Consulting IT consulting for oil and gas
2015
8%
Aug AiKiDo, NextGen Design thinking IT platefrom
2015
Projected
growth rate
2016 Invested in UNSILO A Danish artificial intelligence startup of new
2017 2018
tech
 Infosys – Company Analysis
Analysis
BUY
EV/E
• Infosys have already moved to cloud
BIT Infosys TARGET PRICE
and digital services
1100 • Infosys Pay in America is already
EV/E
Industry
BITD higher than the average of all IT
1050
A companies. The company have also
taken measures to reduce the impact.
Mea 1000
n
• Infosys currently have 32% of local
P/E 950
hire the company also started
CURRENT PRICE TARGET PRICE recruitment of 200000 US citizens.
0 5 10 15 20

Local hires as % of overall USA

employeed(2016)
Infosys

Avg salary offered onsite in USD Net Profit (Crores) 46% 32% HCL

85,000 (2017) 16000

35% 55%
TCS
14000 35% Wipro
12000
80,000 TechM
10000
8000
75,000
6000 Buy- 70.6%
4000
70,000 Hold-19.6%
2000
0
Sell- 9.8%
65,000
2013 2014 2015 2016 2017
Infosys HCL TCS Wipro TechM
 HCL BSE NSE ISIN
532281 HCLTECH INE860A01027
Company Profile Diversified Revenue Streams
Founded : 11 Aug 1976 Growth Sector Wise
Presence : National/International
Functions : IT consulting, enterprise 3.40% 9.30% Financial Services
transformation, remote infrastructure 16%
Manufacturing
management, engineering and R&D
18.20% Healthcare
“The younger you are , the more courage and Public services
audacity you will have to set long term goals and
Retail
be there to personally work towards your vision” 22.50%
11.80% TMT
–Founder & Chairman

HCL RECENT UPDATES New Tech Growth

HCL’s Mode 1-2-3 strategy to future proof our customers' business
15
12
Client Addition YoY FY16-17
Buyback entailed 3.5cr equity shares at price of 1000 rupees per share
10 8
6
5
Return on Equity at 27% 5 3
1
Partnership with IBM by investing $140 Mn 0
$5 Mn+ $10Mn+ $20Mn+ $40Mn+ $50Mn+ $100Mn+
Operating Cash Flow/Net Income at 104%
Growth in Mode 2-3
$200Mn acquisition of Geometric to strengthen R & D

$85Mn acquisition of Butler America Aerospace tech services

 HCL– Company Analysis
Analysis
980
Target Price
BUY
EV/EBIT • HCL Pay in America is already
960
higher than the proposed bill rates
HCL 940 Hence new US regulations will not
Industry affect HCL
EV/EBITDA 920

900 • HCL currently have 55% of local hire

hence it satisy minimum criteria of
Mean P/E 880 50% local hiring
860
current price target price • Mode 2-3 has shown growth of
0 10 20
30.9% which shows HCL’s innovative
technology solutions.
Local hires as % of overall USA
employeed(2016)
Infosys
Networth Cr HCL
Avg salary offered onsite in USD 46% 32%
30000 27294
85,000 (2017) 35% 55%
TCS
25000 24224
19542 Wipro
20000 35%
80,000 TechM
15000 13159
10000 9835
75,000
5000 Buy- 70.6%
70,000 0 Hold-19.6%
FY 11- FY 12- FY 13- FY 14- FY 15- Sell- 9.8%
65,000 12 13 14 15 16
Infosys HCL TCS Wipro TechM
Aviation
 Aviation Industry

Impact of GST

INR 330 Billion Consolidated Business class

Growth Rate of
Deficit of the
Aviation Sector
states
Economy class

$49.07 Fuel/barrel
0 1 2 3 4 0 5 10 Rate of GST
0.00% 5.00%10.00%15.00%
2016 2015 2016 2015 Rate of Service Tax

The Indian aviation sector

Upcoming technology is likely to see 100% FDI in The annual Fall in average fare by
like block chain will investments totaling USD Maintenance Repair compounded increase 18% in 2016 over 2015
help in identity 15 billion during 2016- and Operation(MRO) in inbound and has made air travel
management, tokenising 2020 of which USD 10 units to enhance the outbound affordable for average
frequent flyer programs, billion is expected to MRO activities international traffic household income leading
tokenising e-tickets and come from the private generating large scale has been 4.8% and to unprecedented capacity
item custody change sector. employment for Indian 2.4% for domestic enhancement in aviation
tracking . youths. traffic. system
 Overview of the Industry

Competitive Rivalry
Threat Of New Entrants
3rd Largest domestic Bargaining Power Of Suppliers
passenger market in Bargaining Power Of Buyers
2016 with 100million Threat Of Substitutes 1 1
passengers
4th Largest total Porter’s 5 forces
passenger market in 2006-16 : Domestic International analysis
2016 with 335 million Passenger Traffic Passenger Traffic
Aviation industry
supports 9 million Scale 1-5(Low-high)
24
passengers grew at 11.8% will continue to
jobs in the country
grow at 8% rate
5

Others
GoAir
Spicejet
Air India
Travel and tourism in Per capita Income Technology
Jet
India is expected to has grown 8-9% Advancements –
Economic
grow at a CAGR of over the span of 5 Low Cost Carriers, Indigo
Growth Drivers
6.75% per annum years. Modern Airports
Of The Industry 0 50 100
between 2016-2025
Passengers Carried

Source: http://dgca.gov.in/reports/rep-ind.htm
www.motilaloswal.com/research
www.ibef.org/
 Impact of GST Domestic Passenger
Growth(YoY %)
The service tax rates The works contract would
would go up to 17- be taxed as a service rather
18%, which is a 9- than a cascading VAT and India's domestic air
12% increase in the service tax which is a passenger growth
cost of air travel for welcome move for the MRO slipped to ~15% YoY in
passengers. sector. Mar-17, after 20% YoY
growth for 16
consecutive months.

SWOT Analysis Of Airport

Industry Load Factor(in
Authority of India
%)

Strengths Weaknesses
• Stagnant growth of cargo While Mar-17 ASK
• Large land holdings business growth stood at 16.2%
• Expertise in providing air • Man power shortage and YoY, RPKs increased
navigation services training 14.7% YoY
• Experienced man power • Limited focus on marketing
Freight Traffic(in
Opportunities Threats million tonnes)
• Adoption of state of art • Competition from other
technology In FY16, domestic freight
airport developers traffic stood at 1.04
• International consulting • Stricter environment and
opportunities million tonnes, while
safety norms international freight
• Enhancing non • Obligation to implement
aeronautical services traffic was at 1.65
RCs million tonnes.
Source: http://dgca.gov.in
https://www.internationalairportreview.com/news
 SPICEJET
BSE
Code: 500285 | ISIN: INE285B01017 | Sector: Airlines

New promoter, Ajay Singh, Holdings

is close to the ruling party Boasts of a load factor of 94.3%
and has their backing. Will which is the highest in the
make it easier to get industry. Planes are being sweat
regulatory clearances. Being to the maximum possible level.
close to the power center Asset Utilization is to the fullest.
helps.
Stock has gone up around
10x since management Promoters Individuals Institutions
changed hands with more
FII Govt. Others
runway for growth.

SpiceJet is a genuine turnaround

story. It was on the verge of being
closed down when the management
and promoters changed in January
2015.

With fall in User Development

Ajay Singh Ajay Singh Chandan Sand
Fee(UDF) in Delhi Airport, CEO Managing Secretary
flying to get cheaper and benefit Director
SpiceJet which has Delhi as its
hub.
 Analysis and Recommendation
FY2017
Valuations Increasing EBITDA Margins FY2016

BUY
Low P/E of 17.72
EBITDA Margin FY2015
compared to peers
which are in the 20s. At saw an increase
FY2014
the same time has a from 7.39% in
EV/EBITDA of 8.48 FY14 to 16.18% in FY2013
showing good prospects FY15 to 21.48% in Management Actions and Fleet Increase
FY16 -20,000 0 20,000 40,000 60,000 80,000
in the market NET PROFIT EBITDAR NET REVENUE

As can be seen from the graph, the new

Debt Reduction Rising Profitability and Sales EBITDA Margin management has been able to bring the
25.00% airline back to profitability in the last 2
Interest Outgo has seen a Profit Growth of 31.09% CAGR 20.00% years.
decrease of 60% over past 2 over 5 years and Sales Growth 15.00%
years. Strong focus on debt of 25.82% CAGR over 10 years. Falling crude prices, which contribute
10.00%
reduction. Promoter cutting Phenomenal return on capital upto 45% of an airlines costs, helped.
5.00%
the flab from the employed of 68.28% last year. With new Boeing planes being
0.00% inducted, fuel savings will further
organization. FY14 FY15 FY16
increase by upto 12-15%.
EPS Other Earnings P/E Ratio Aircraft Fuel Expenses
30
10 4000
400
20 3000
0 300
FY14 FY15 FY16 FY17 2000
-10 200 10 1000
-20 100
0
0
0 FY13 FY14 FY15 FY16
-30 SpiceJet Jet Airways Indigo
FY12 FY13 FY14 FY15 FY16
 INDIGO
NSE Symbol: INDIGO | BSE
Code: 539448 | ISIN: INE646L01027 | Sector: Airlines

Revenue increasing at 25% CAGR
over 5 years and profit showing
38% CAGR over 3 years.
Unbelievable Return on Equity of
180% for previous 3 years.
Holdings
Very well capitalized with
current ratio increasing from
1.02 in FY14 to 1.07 in FY15 to
1.41 in FY16. Quick Ratio
improved from 1 in FY14 to 1.03
in FY15 to 1.37 in FY15.

India’s largest airline based on

fleet size, passengers carried Promoters Individuals Institutions
and market share which stands
FII Govt. Others
Quick Ratio at 41.2%.

With its corporate headquarters

based in Gurgaon and Delhi as its
hub, the airline stands to gain
massively from User Development
Current Ratio Fee rate cut at Delhi airport.

Aditya GhoshDevadas Mallya Mangalore

Promoters Rahul Bhatia and Sanjay Gupta
CEO Chairman & Managing Secretary
Rakesh Gangwal are old hands
0 0.5 1 1.5 in the US Aviation Industry Director
having worked for United
FY16 FY15 FY14 Airlines and US Airways,
bringing valuable knowledge and
experience
 Analysis and Recommendation
Equity Share FY2016
Increase in Passengers

BUY
Dividend
FY2015 Net
2000
The number of passengers 1500
Profit
catered to have been FY2014
1000 Sales
growing close to 20% an 500
annum for the past 2 years in 0 FY2013
the airline industry. Mar'13Mar'14Mar'15Mar'16
0 10000 20000
Latest Additions
30
Market Growth Basic EPS 21.48
70 20 16.18
Indigo, as the largest player 60
in the market has been able 50 7.39
40 10
to capture a significant share 30 12.32
of this growing pie. 20 4.26 9.3
10 0
Registered a CAGR of 0 FY2014 FY2015 FY2016
29.8% in seat kilometres EBITDA Margin
from FY14-15 to FY15-16 Ordered the latest generation
Net Profit Margin
Airbus A320neo (New Engine
Business Model Total Assets Option).
Business Model
15000
Provide upto 15% fuel savings
• Buys in bulk and hence
• Cutting costs and increasing and thus lower costs
manages to snag a hefty 10000
discount. margins and profitability.
• Reduces the time spent on 5000 • Benefited from falling crude oil
maintenance and cleaning prices.
0
by the cockpit crew • Unique business model - one
Mar'12 Mar'13 Mar'14 Mar'15 Mar'16
• Allowing faster type of plane
turnaround