Antique'S Morning Presentation: ABB India Muthoot Finance Cadila Healthcare Bharat Heavy Electricals Mahanagar Gas

AMP
STRICTLY CONFIDENTIAL
14 November 2019
ANTIQUE’S MORNING PRESENTATION
FROM THE RESEARCH DESK Market Snapshot
Global Indices Closing % Chg % YTD
QUARTERLY RESULTS REVIEW
Dow Jones 27,784 0.3 19.1
ABB India NASDAQ 8,482 (0.0) 27.8
Revenue led outperformance on operational level FTSE 7,351 (0.2) 9.3
Muthoot Finance CAC 5,907 (0.2) 24.9
Temporary blip in gold; strong otherwise DAX 13,230 (0.4) 25.3
Cadila Healthcare Russia 1,438 (0.8) 34.5
Steady quarter hit by seasonality; long road to full recovery Bovespa 106,060 (0.6) 20.7
Bharat Heavy Electricals Nikkei 23,320 (0.9) 16.4
Execution disappoints; lower than expected provisioning helps Hang Seng 26,571 (1.8) 2.8
beat expectation Shanghai Composite 2,905 (0.3) 16.5
Mahanagar Gas
In-line earnings, prognosis better; BUY Indian Indices Closing % Chg % YTD
ANTIQUE'S INDIA ECONOMIC MONITOR Sensex 40,116 (0.6) 11.2
Nifty 11,840 (0.6) 9.0
CPI
MSCI India 570 (1.3) 2.2
Core CPI declines by 50bp; Expect rate cut in Dec policy meet
CNX Midcap 16,699 (0.7) (6.6)
BSE Smallcap 13,345 (1.1) (9.3)
Global News
n The Dow Jones Industrial Average and the S&P 500 hit record highs on Flows (USDm) Prev. Day MTD
Wednesday helped by a big jump in Walt Disney shares, but the Nasdaq FII 221 1,597
fell and gains were kept in check by fresh uncertainty over U.S.-China trade
relations.The Dow Jones Industrial Average rose 92.1 points, or 0.33%, to
27,783.59, the S&P 500 gained 2.13 points, or 0.07%, to 3,093.97 and the Provisional flows (USDm)
Nasdaq Composite dropped 3.99 points, or 0.05%, to 8,482.10. FIIs 81
n Japanese shares slipped on Wednesday after a keenly awaited speech from Local (123)
U.S. President Donald Trump disappointed investors, offering few details on
progress in trade talks with China. The Nikkei share average fell 0.85% to Volumes USDbn % Chg
23,319.87, having cooled since it hit an 13-month high of 23,591 on Friday.
The broader Topix lost 0.55% to 1,700.33, ending a six-day winning streak. Cash (NSE + BSE) 6.1 22.9
F&O (net) 190.7 49.9
Sector & Corporate News
n Engineering firm KEC International on Wednesday said the company has FII F&O Stock Fut Index Fut
bagged orders worth INR 22.55bn across various business verticals in the Net ($ mn) (54) (24)
domestic market. The RPG Group firm has secured three projects each from
Power Grid Corporation, Tamil Nadu Transmission Corporation and Karnataka Open Int (%) 1.3 3.2
Power Transmission Corporation with an aggregate value of INR 8.85 bn in
its transmission and distribution business. In its urban transportation business, ADR/GDR Gainers Last % Chg
the company bagged an order of INR 8.53 bn for the construction of elevated Reliance 40.8 2.8
viaduct along with 10 stations of the Delhi Metro Phase IV project, from Delhi
Metro Rail Corporation (DMRC). The company has secured an order of INR
5.17bn for the construction of roadbeds, major and minor bridges and ADR/GDR Losers Last % Chg
associated civil works, from Rail Vikas Nigam. SBI 42.6 (3.8)
n Tata Motors reported 19 per cent decline in global wholesales, including Dr Reddy 38.6 (2.9)
that of Jaguar Land Rover, to 89,108 units in October. The auto major had Tata Motors 11.7 (2.5)
sold 1,09,597 units in October last year. Global wholesales of all Tata Motors'
commercial vehicles and Tata Daewoo range last month stood at 28,478 Wipro 3.9 (2.0)
units, down 36 per cent from 44,380 units a year ago, the company said in ICICI Bank 13.5 (1.2)
a statement. The company's global sales of all passenger vehicles were at
60,630 units, down 7 per cent from 65,217 units in October 2018. Global
wholesales of JLR stood at 47,278 units. Jaguar wholesale units for the month
were 12,367 vehicles, while Land Rover wholesales stood at 34,911 units.into
a "binding agreement with Heidelberg Cement Bangladesh Ltd for divesting
its entire shareholding in ECBL and EPCL", the Aditya Birla Group firm said in
a regulatory filing.
Please refer to disclosures at the end of the Research Report

ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2019 | 2
Sectoral indices Delivery Spike

Closing % Chg % MTD % YTD Company Volume Spike (%) Chg (%)
BSE Auto 18,271 (0.1) (3.6) (12.3) Divi's Laboratories Ltd 524,462 600% -2.22%
BSE Bank 34,586 (1.9) 1.9 13.9 Mahindra & Mahindra Financial Services Ltd 895,743 521% -2.10%
BSE Cap Goods 18,026 (1.5) (4.2) (4.2) Coal India Ltd 3,142,878 369% -1.24%
BSE Cons dur 25,057 0.4 (6.8) 21.1 Bharti Airtel Ltd 4,517,096 352% -0.78%
BSE FMCG 11,960 (0.6) (2.3) 1.1 Glenmark Pharmaceuticals Ltd 1,188,012 344% -5.45%
BSE IT 15,158 0.2 (1.5) 7.6 Lupin Ltd 877,658 282% -0.73%
BSE Health 12,957 (1.3) (2.1) (6.9) REC Ltd 1,643,414 278% -1.81%
BSE Metal 9,516 (2.3) 2.3 (19.6) Housing Development & Infrastructure Ltd 806,686 272% 5.00%
BSE Oil 15,201 (0.7) (3.4) 10.6 Reliance Communications Ltd 67,391,326 263% -7.14%
BSE Power 1,935 (1.2) (2.6) (3.2) Hindustan Petroleum Corp Ltd 3,065,681 253% -2.48%
BSE PSU 6,897 (2.1) (4.1) (4.7)
BSE Realty 2,128 (2.0) 3.1 18.4
BSE TECK 7,389 (0.1) (1.0) 4.6 Derivatives Update
Long Build Up
Company Last % Chg % Chg OI OI (in 000)
CENTURYTEX 391.85 0.59 44.42 2971
MFSL 474.25 0.60 13.98 5420
ASHOKLEY 79.55 1.66 11.76 91404
Nifty Outperformers ICICIPRULI 525.6 0.36 10.43 7401
Price % Chg % MTD % YTD Short Build Up
Britannia Industries Ltd 3,270 4.8 0.1 5.0 Company Last % Chg % Chg OI OI (in 000)
Tata Consultancy Svcs Ltd 2,179 3.7 (4.0) 17.4 SUNTV 468.1 -11.45 31.61 3620
Reliance Industries Ltd 1,472 3.1 0.5 31.3 JUSTDIAL 512.95 -7.43 12.67 4159
Bajaj Finserv Ltd 8,978 0.8 10.4 38.6 BATAINDIA 1689.95 -1.08 10.69 2683
Hindustan Unilever Ltd 2,091 0.5 (3.9) 14.9 NMDC 101.25 -2.74 8.58 22638
Titan Co Ltd 1,159 0.3 (12.9) 24.5 Long Unwinding
Maruti Suzuki India Ltd 7,155 0.2 (5.4) (4.2) Company Last % Chg % Chg OI OI (in 000)
CUMMINSIND 563.75 0.70 -3.54 1824
Nifty Underperformers VOLTAS 701.6 1.81 -1.57 2698
Price % Chg % MTD % YTD TCS 2179.5 3.32 -1.56 19288
Indiabulls Housing Finance L 218 (8.5) 5.6 (74.4) NESTLEIND 14264 0.70 -1.49 479
Yes Bank Ltd 68 (6.6) (3.1) (62.5) Short Covering
Gail India Ltd 124 (5.0) (9.8) (31.3) Company Last % Chg % Chg OI OI (in 000)
Zee Entertainment Enterprise 291 (4.9) 11.5 (39.0) JINDALSTEL 142.45 -5.88 -8.46 40316
Adani Ports And Special Econ 371 (4.4) (6.3) (4.4) ESCORTS 652.25 -3.12 -7.62 4843
State Bank Of India 307 (3.6) (1.8) 3.7 JUBLFOOD 1580.25 -2.95 -7.17 2342
Grasim Industries Ltd 740 (3.6) (3.8) (10.4) COALINDIA 207.55 -1.38 -5.85 23460
Bulk Deals
Security Name Client Name Buy/Sell Qty Price Value (mn)
VSTIND HDFC Mutual Fund Sell 273,706 4,260.00 1,166.0
Yes Bank Limited Tobam Emerging Markets Fund Sell 15,971,393 72.00 1,149.9
Indiabulls Hsg Fin Ltd Tobam Emerging Markets Fund Sell 2,234,086 230.39 514.7
IRB Infrastructure Develo Platinum Investment Manegement Limited A/C Platinum Asia Fund Sell 2,431,091 71.89 174.8
Reliance Comm. Ltd. Alpha Leon Enterprises LLP Buy 15,000,022 0.65 9.8
Nifty Nifty P/E Nifty P/B

12500 3.5
29
11500 3.3
27
10500 3.1
25
9500 2.9
23 2.7
8500
7500 21 2.5
6500 19 2.3
Nov-15 Nov-16 Nov-17 Nov-18 Nov-19 Nov-15 Nov-16 Nov-17 Nov-18 Nov-19 Nov-15 Nov-16 Nov-17 Nov-18 Nov-19
Source: Bloomberg
Sensex FII Provisional Flows (INRbn) DII Provisional Flows (INRbn)

40500 100 60
37500 80 40
60
34500 40 20
31500 20 0
28500 0 -20
-20
25500 -40 -40
22500 -60 -60
Nov-15 Nov-16 Nov-17 Nov-18 Nov-19 Nov-17 May-18 Nov-18 May-19 Nov-19 Nov-17 May-18 Nov-18 May-19 Nov-19
Source: Bloomberg
Economy, Money & Banking Commodities Update

Forex Rate Last % Chg % MTD % YTD Commodities Last % Chg % MTD % YTD
INR~USD 72.1 (0.9) (1.6) (3.2) Gold ($/Ounce) 1,464 0.0 (3.2) 14.2
INR~EUR 79.4 (0.7) (0.3) 0.8 Crude Oil ($/Bl) 57 0.4 5.9 18.5
INR~GBP 92.6 (1.0) (0.8) (3.8) Aluminium ($/t) 1,766 (0.7) 0.7 (5.2)
Copper ($/t) 5,811 (0.6) 0.7 (2.3)
Bond Market Last Chg (bps) MTD (bps) YTD (bps) Zinc ($/t) 2,457 (2.4) (2.7) (2.4)
10 Year Bond 6.5 (3) 8 (84) Lead ($/t) 2,034 (1.2) (6.3) 1.3
Interbank call 5.0 (25) (15) (150) Nickel ($/t) 15,384 (1.8) (7.8) 45.1
INR/USD Gold and silver prices (USD/Tr.Oz) Crude prices (USD/barrel)

75 1600 22 80
1500
20
73 1400 70
1300 18
71 1200 60
16
1100
69 50
1000 14
67 Nov-15 Nov-16 Nov-17 Nov-18 Nov-19
40
Nov-18 Mar-19 Jul-19 Nov-19 Gold (LHS) Silver (RHS) Nov-15 Nov-16 Nov-17 Nov-18 Nov-19
Source: Bloomberg
Inflation vs 10 year yield Nifty premium/discount NSE volatility index (%)

50 21
10 42.0
8 35.9 37.2 18
40
6 30.3
4 30 22.8 15
2 20 12
0
10
Jan-18
Mar-18
May-18
Jul-18
Nov-18
Jan-19
Mar-19
May-19
Jul-19
Sep-18
Sep-19
9
15-Jul
26-Jul
11-Oct
22-Oct
2-Nov
13-Nov
8-Sep
19-Sep
30-Sep
0
6-Aug
17-Aug
28-Aug
06-Nov 07-Nov 08-Nov 11-Nov 13-Nov

WPI Inflation (%) 10 Yr Yield (%)
Source: Bloomberg
Current Reco : HOLD 3QCY19 RESULT REVIEW

Previous Reco
CMP
: HOLD
: INR1,491
ABB India
Target Price : INR1,510 Revenue led outperformance on operational level
Potential Return : 1%
ABB's 3QCY19 performance stood above expectations both at EBITDA and
PAT (continuing business) level driven by a broad-based impressive revenue
Dhirendra Tiwari performance as all segments (ex-Power Grid) reported revenue growth in
+91 22 4031 3436
double digits and margin expansion except for Industrial Automation which
dhirendra.tiwari@antiquelimited.com
saw muted margin performance. The company has seen consistent YoY
Amit Shah
margin improvement starting 1QCY19 driven by controlled costs on top of a
+91 22 4031 3437
amit.shah@antiquelimited.com healthy revenue growth in line with our expectations. While Power Grid
business performance remains muted, the automation businesses have seen
Abhijeet Singh
+91 22 4031 3414 an impressive PAT growth and are expected to remain the driving force in the
abhijeet.singh@antiquelimited.com near term. While we like ABB given its strong technological backbone and
parentage, we remain cautious on the valuation and maintain HOLD with a
Market data target price of INR 1,510 based on SOTP valuation of 30x its Power Grids
Sensex : 40,116 business and 45x ex-power grid CY20E earnings.
Sector : Industrials
Result highlights
Market Cap (INRbn) : 316.0
Market Cap (USDbn) : 4.421 n 3QCY19 sales coming in at INR 17.5bn (+17% YoY) were marginally ahead of our
O/S Shares (m) : 211.9 estimate of INR16.7bn (Consensus: INR16.9bn). Revenue growth was supported by
52-wk HI/LO (INR) : 1670/1210
strong growth seen in electrification products segment (+24% YoY), Industrial Automation
Avg Daily Vol ('000) : 61
Bloomberg : ABB IN
(+17% YoY) where as Robotics & Discrete Automation registered growth of 12.5% YoY
Source: Bloomberg n Gross margin stood stable at 35.0% (+40bps YoY) vs. our estimate of 34.5%.
Valuation
CY18 CY19e CY20e
n EBITDA of INR1.2b (+88.7% YoY) and margin of 7.1% (+270bps YoY)* vs. our estimate
EPS (INR) 24.1 31.2 37.9 of 7.2% (Consensus 7.1%).
P/E 61.8 47.8 39.4
n Other income at INR164m vs. our estimate of INR273m
P/BV 7.9 8.9 8.1
EV/EBITDA 65.8 47.0 38.2 n Finance cost stood at INR44mn (Antique est. - INR189m)
Dividend Yield (%) 0.3 0.4 0.5
Source: Company, Antique
n Tax rate at 30% vs. our estimate of 35%
Returns (%) n PAT from continued business stood at INR788mn (+119 % YoY) ahead of our estimate of
1m 3m 6m 12m INR670m supported by lower than estimated tax rate.
Absolute 1 8 11 15
Relative (4) 1 3 (0) n Reported PAT stood at INR1.4bn (+24% YoY)
Source: Bloomberg
n Order inflow at INR16.1b (+5% YoY) was driven by service orders (+16% YoY). Order
Shareholding pattern book stood at INR45bn.
Promoters : 75% Earnings summary
Public : 25% Year ended March (INRm) 2017 2018 2019e 2020e 2021e
Others : 0% Revenues(INRm) 86,422 90,873 66,901 73,797 85,426
Source: Bloomberg EBITDA(INRm) 6,905 7,360 4,578 6,307 7,700
EBITDA Margin (%) 8.0 8.1 6.8 8.5 9.0
Price performance vs Nifty
PAT(INRm) 3,704 4,199 5,109 6,611 8,021
140
PAT growth (%) 23.5 13.4 21.7 29.4 21.3
120
EPS (INR) 17.5 19.8 24.1 31.2 37.9
100 EPS growth (%) 23.5 13.4 21.7 29.4 21.3
80 P/E(x) 85.3 75.2 61.8 47.8 39.4
Nov-18 Mar-19 Jul-19 Nov-19 P/BV(x) 9.6 8.8 7.9 8.9 8.1
ABB NIFTY EV/EBITDA(x) 44.9 40.9 65.8 47.0 38.2
Source: Bloomberg, Indexed to 100 Source: Company, Antique
ABB 3QCY20 concall highlights

Overview
n Bangladesh market - Over USD 300bn
n Order Backlog - INR 44bn, Electrification - INR 14.4bn , R&M - INR 1.65bn, IA - INR
13bn, Motion - 16.77bn
n Order Inflow 3QCYCY20: Overall - INR 16bn Electrification - INR 6.35bn, Robotics
- INR 4.7bn, Motion - INR 6bn , Industrial Automation - INR 3.44bn
n Services form 18% of revenue and orders (up from 15%) post Power grid hive off.
n 3QCY19 has INR 190mn impact on account of write-downs pertaining to exit from
electrical BoP business.
n The reduced DTA benefit would be spread over 3QCY20 and 4QCY20.
n Installed based penetration has increased from 23% to 32%. Best in class penetration
rate globally within ABB is 60-65%.
n Unallocated expenses have reduced on account of reduced impact from write-downs
pertaining to exit from electrical balance of plant business.
Robotics & Discrete Automation
n Investing a lot in the business though automotive sector slowdown has impacted the
overall performance.
n Investing in non-automotive Robotics capability and in the medium term the company
plans to diversify it into non-automotive industries along with maintaining presence in
automotive sector.
Motion
n 7-8% of the revenue comes from the railway sector
Electrification
n The company benefit from demand from Data Centre, buildings, Power and Metro.
Industrial Automation
n The company has a strong services portfolio which is being driven by operational
expenditure in the core industries where major green field capex continues to shy away.
Quarterly performance
(INR m) 1Q CY18 2Q CY18 3Q CY18 4Q CY18 1Q CY19 2Q CY19 3Q CY19 YoY (%) QoQ (%) 9MCY19 9MCY18 YoY (%)
Revenue 15,665 16,657 14,916 19,663 18,503 17,258 17,456 17.0 1.2 53,216 47,238 12.7
Materials 10,781 11,344 9,758 13,253 12,667 11,246 11,352 16.3 0.9 35,264 31,883 10.6
% of Sales 68.8% 68.1% 65.4% 67.4% 68.5% 65.2% 65.0% 66.3% 67.5%
Staff 1,454 1,472 1,365 1,005 1,575 1,361 1,395 2.2 2.5 4,331 4,291 0.9
% of Sales 9.3% 8.8% 9.1% 5.1% 8.5% 7.9% 8.0% 8.1% 9.1%
SGA 2,535 2,978 3,140 3,251 2,806 3,412 3,476 10.7 1.9 9,693 8,652 12.0
% of Sales 16.2% 17.9% 21.1% 16.5% 15.2% 19.8% 19.9% 18.2% 18.3%
Total Expenditure 14,770 15,794 14,263 17,509 17,047 16,019 16,223 13.7 1.3 49,289 44,826 10.0
EBITDA 895 875 654 2,154 1,455 1,239 1,234 88.7 (0.4) 3,927 2,424 62.1
EBITDA Margin (%) 5.7% 5.3% 4.4% 11.0% 7.9% 7.2% 7.1% 7.4% 5.1%
Operational EBITA 611 2,599 1,310 1,800 1,258 1,322 1,258 (4.0) (4.8) 3,838 4,520
Operational EBITA (%) 3.9% 15.6% 7.7% 9.1% 6.8% 7.7% 7.2% 5.6% 5.5%
Other Income 228 183 269 160 191 204 164 (39.0) (19.4) 559 680 (17.8)
Interest 199 150 137 53 26 96 44 (67.8) (53.8) 166 486 (65.8)
Depreciation 225 228 236 239 233 220 227 (3.9) 3.0 680 689 (1.3)
Exceptional Items - - - - - - - - -
PBT 699 681 549 2,023 1,387 1,127 1,127 105.2 0.0 3,640 1,929 88.7
Tax 243 242 189 736 497 429 339 79.4 (21.1) 1,265 673 87.8
Tax rate (%) 34.8% 35.5% 34.4% 36.4% 35.8% 38.1% 30.1% 34.7% 34.9%
PAT from continuing operations 456 439 360 1,286 890 697 788 118.6 13.0 2,376 1,256 89.2
PAT from discontinued operations 569 582 723 693 272 607 565 (21.9) (6.9) 1,443 1,874
Exceptional Items - - - - - - - - -
Reported PAT 1,025 1,021 1,084 1,979 1,162 1,304 1,353 24.8 3.7 3,819 3,130 22.0
PAT Margin (%) 6.5% 6.1% 7.3% 10.1% 6.3% 7.6% 7.7% 7.2% 6.6%
Adj. PAT 456 439 360 1,286 890 697 788 2,376 1,256
EPS (Rs) 2.2 2.1 1.7 6.1 4.2 3.3 3.7 118.6 13.0 11.2 5.9 89.2
Order Intake 16,840 24,740 23,550 19,000 17,800 19,890 16,060 (31.8) (19.3) 53,750 65,130 (17.5)
Order Backlog 1,16,280 1,07,170 1,13,680 42,270 47,260 46,560 45,382 (60.1) (2.5) 45,382 1,13,680 (60.1)
Source: Company, Antique `
Segmental performance
(INR m) 1Q CY18 2Q CY18 3Q CY18 4Q CY18 1Q CY19 2Q CY19 3Q CY19 YoY (%) QoQ (%) 9MCY19 9MCY18 YoY (%)
Sales 25,200 26,986 25,406 31,209 27,997 28,688 28,092 10.6 (2.1) 84,777 77,592 9.3
Robotics & Motion 5,969 6,152 5,920 6,981 7,996 6,699 6,661 12.5 (0.6) 21,356 18,041 18.4
Electrification Products 6,509 6,461 5,711 7,480 7,307 7,344 7,094 24.2 (3.4) 21,744 18,680 16.4
Industrial Automation 3,024 3,768 3,455 5,155 3,614 3,783 4,045 17.1 6.9 11,442 10,246 11.7
Power Grids 9,698 10,606 10,321 11,593 9,080 10,863 10,292 (0.3) (5.3) 30,235 30,625 (1.3)
EBIT 2,521 2,562 2,686 3,369 1,800 1,610 2,319 (13.7) 44.1 5,728 7,769 (26.3)
Robotics & Motion 431 507 518 749 793 557 595 14.7 6.8 1,945 1,456 33.6
Electrification Products 670 576 493 756 641 713 619 25.4 (13.3) 1,973 1,739 13.4
Industrial Automation 394 382 399 725 365 339 247 (38.0) (27.1) 952 1,175 (19.0)
Power Grids 1,026 1,098 1,276 1,139 - - 859 (32.7) #DIV/0! 859 3,399 (74.7)
EBIT Margin (%)
Robotics & Motion 7.2 8.2 8.8 10.7 9.9 8.3 8.9 9.1 8.1
Electrification Products 10.3 8.9 8.6 10.1 8.8 9.7 8.7 9.1 9.3
Industrial Automation 13.0 10.1 11.5 14.1 10.1 9.0 6.1 8.3 11.5
Power Grids 10.6 10.3 12.4 9.8 - - 8.3 2.8 11.1
10
14
18
22
26
-
1,200
2,400
3,600
4,800
6,000
-
1,500
3,000
4,500
6,000
7,500
9,000
1Q CY15 (0.72)
1Q CY15 10.0 1Q CY15 8.4 2Q CY15 6.01
2Q CY15 10.2 2Q CY15 8.4 3Q CY15 6.72
3Q CY15 10.4 3Q CY15 8.8 4Q CY15 8.34

4Q CY15 13.3 4Q CY15 7.8 1Q CY16 10.41
1Q CY16 6.0 1Q CY16 10.2 2Q CY16 8.44
2Q CY16 8.1 2Q CY16 2.5 3Q CY16 4.37
3Q CY16 11.4 3Q CY16 4.2 4Q CY16 3.41
Revenue (INR bn)
Revenue (INR mn)

4Q CY16 15.2 4Q CY16 17.1
ANTIQUE STOCK BROKING LIMITED
1Q CY17 8.12
Revenue (INR mn)

1Q CY17 3.7 1Q CY17 7.6 2Q CY17 6.62
2Q CY17 8.9 2Q CY17 6.7 3Q CY17 (6.40)
Revenue and revenue growth trends
3Q CY17 13.4
Robotics & Motion performance trend

3Q CY17 9.0
4Q CY17 (31.86)
4Q CY17 18.8 4Q CY17 10.1
Industrial Automation performance trend

1Q CY18 -
1Q CY18 13.0 1Q CY18 7.2
2Q CY18 (25.42)
2Q CY18 10.1 2Q CY18 8.2
3Q CY18 11.5 3Q CY18 (22.45)
3Q CY18 8.8
4Q CY18 14.1 4Q CY18 15.07
4Q CY18 10.7
1Q CY19 10.1 1Q CY19 18.12
1Q CY19 9.9
2Q CY19 9.0 2Q CY19 3.60
2Q CY19 8.3
EBIT Margin (%, RHS)

Revenue grow th (%, RHS)
3Q CY19 6.1 3Q CY19 8.9 3Q CY19 17.03

0
8
0
4
8
-8
0
4
8
16
24
12
-16
12
-40 0.0
-32 0.5
-24 1.0
1.5
2.0
2.5
3.0
3.5
-
1,500
3,000
4,500
6,000
16 7,500
20 9,000
-
16 12,000
20 15,000
3,000
6,000
9,000
1Q CY15 7.91
1Q CY15 2.2 1Q CY15 12.3 2Q CY15 7.77
2Q CY15 4.1 2Q CY15 15.1 3Q CY15 9.67
3Q CY15 6.1 3Q CY15 11.7 4Q CY15 10.85

4Q CY15 10.8 4Q CY15 11.6 1Q CY16 8.63

1Q CY16 6.4 1Q CY16 14.1 2Q CY16 5.42
2Q CY16 4.7 2Q CY16 10.8 3Q CY16 5.75
3Q CY16 9.9
EBITDA (INR bn)
3Q CY16 1.9 4Q CY16 11.56
Revenue (INR mn)

4Q CY16 5.4 4Q CY16 12.0 1Q CY17 7.43
Revenue (INR mn)

Power Grids performance trend
1Q CY17 6.4 1Q CY17 11.3 2Q CY17 6.60
EBITDA and EBITDA margin trends
2Q CY17 7.2 2Q CY17 10.0 3Q CY17 6.97

3Q CY17 9.6 3Q CY17 9.7 4Q CY17 8.52
4Q CY17 12.4 4Q CY17 14.6 1Q CY18 5.71
Electrification Products performance trend
1Q CY18 9.3 1Q CY18 10.3 2Q CY18 5.37

FROM THE RESEARCH DESK
2Q CY18 10.3 2Q CY18 8.9 3Q CY18 4.38

3Q CY18 12.4 3Q CY18 8.6 4Q CY18 10.96
4Q CY18 9.8 4Q CY18 10.1
1Q CY19 7.86
1Q CY19 5.5 1Q CY19 8.8
2Q CY19 7.18
EBITDA margin (%, RHS)
2Q CY19 9.4

2Q CY19 9.7
3Q CY19 8.3 3Q CY19 7.07

3Q CY19 8.7
0
3
5
8
0
4
8
0.0
3.0
6.0
9.0
10
13
15
12
16
12.0
15.0
14 November 2019 | 7
ANTIQUE STOCK BROKING LIMITED
-
12
24
36
48
60
1Q CY15 (6.4)
2Q CY15 (6.1)
3Q CY15 61.3
4Q CY15 (17.2)
1Q CY16 (1.4)
2Q CY16 7.7
Order intake and growth trend
3Q CY16 29.5
4Q CY16 173.5
1Q CY17 28.0
Order Intake (INR bn)
2Q CY17 12.8
3Q CY17 (34.7)
4Q CY17 (48.3)
1Q CY18 10.2
2Q CY18 7.5
Grow th (%, RHS)
3Q CY18 21.6
FROM THE RESEARCH DESK
4Q CY18 (34.7)
1Q CY19 (31.1)
2Q CY19 (19.6)
0
50
-50
100
150
200
14 November 2019 | 8
Financials
Profit and loss account (INRm) Cash flow statement (INRm)
Year-ended Dec 31 CY16 CY17 CY18 CY19e CY20e Year-ended Dec 31 CY16 CY17 CY18 CY19e CY20e
Net Revenue 86,422 90,873 66,901 73,797 85,426 PBT 5,692 6,217 3,951 5,774 7,094
Op. Expenses 79,518 83,513 62,323 67,491 77,725 Depreciation & amortisation 1,510 1,580 928 974 1,023
EBITDA 6,905 7,360 4,578 6,307 7,700 Interest expense 919 773 539 500 600
Depreciation 1,510 1,580 928 974 1,023 (Inc)/Dec in working capital 4,433 5,098 (6,733) 7,981 (1,770)
EBIT 5,395 5,781 3,650 5,333 6,678 Tax paid 1,988 2,018 1,410 2,021 1,788
Other income 1,216 1,210 840 941 1,016 Other operating Cash Flow (3,976) (4,036) (2,819) (4,042) (3,575)
Interest Exp. 919 773 539 500 600 CF from operating activities 10,565 11,650 (2,725) 13,208 5,159
Reported PBT 5,692 6,217 3,951 5,774 7,094 Capital expenditure (1,309) (1,704) 2,662 (836) (766)
Tax 1,988 2,018 1,410 2,021 1,788 Inc/(Dec) in investments (293) 236 205 - -
PAT from continued operations 3,704 4,199 2,542 3,753 5,306 CF from investing activities (1,602) (1,468) 2,867 (836) (766)
PAT from discontinued operations 2,567 2,858 2,715 Inc/(Dec) in share capital (749) 209.7 2,676.5 (6,794.8) (0.0)
Net Profit 3,704 4,199 5,109 6,611 8,021 Inc/(Dec) in debt - (5,959) (21) - -
Adjusted PAT 3,704 4,199 5,109 6,611 8,021 Dividend Paid 911 1,020 2,267 - 1,540
Adjusted EPS (INR) 17.5 19.8 24.1 31.2 37.9 Others (2,741) (2,814) (5,072) (500) (3,681)
CF from financing activities (2,579) (7,542) (150) (7,295) (2,140)
Balance sheet (INRm) Net cash flow 6,383 2,640 (9) 5,077 2,253
Year-ended Dec 31 CY16 CY17 CY18 CY19e CY20e Opening balance 5,736 12,120 14,760 14,751 19,829
Share Capital 424 424 424 424 424 Closing balance 12,120 14,760 14,751 19,829 22,081
Reserves & Surplus 32,443 35,645 39,649 35,067 38,504
Networth 32,867 36,069 40,073 35,491 38,928 Growth indicators (%)
Debt 6,000 41 20 20 20 Year-ended Dec 31 CY16 CY17 CY18 CY19e CY20e
Net deferred Tax liabilities (1,304) (1,173) (1,150) (1,150) (1,150) Revenue 6.2 5.2 (26.4) 10.3 15.8
Capital Employed 37,563 34,937 38,944 34,362 37,799 EBITDA (3.1) 6.6 (37.8) 37.8 22.1
Gross Fixed Assets 14,059 15,251 11,419 12,812 14,162 Adj PAT 23.5 13.4 21.7 29.4 21.3
Accumulated Depreciation 1,510 3,064 2,488 4,019 5,626 Adj EPS 23.5 13.4 21.7 29.4 21.3
Capital work in progress 678 1,165 831 831 831
Net Fixed Assets 13,227 13,351 9,762 9,624 9,367 Valuation (x)
Investments 457 221 16 16 16 Year-ended Dec 31 CY16 CY17 CY18 CY19e CY20e
Non Current Investments 457 221 16 16 16 P/E 85.3 75.2 61.8 47.8 39.4
Current Assets, Loans & Adv. 62,113 75,369 79,841 62,377 68,089 P/BV 9.6 8.8 7.9 8.9 8.1
Inventory 9,403 11,536 9,279 11,680 12,679 EV/EBITDA 44.9 40.9 65.8 47.0 38.2
Debtors 29,707 27,878 16,869 19,709 21,131 EV/Sales 365.9 334.6 450.0 408.2 346.7
Cash & Bank balance 11,892 14,917 14,751 19,828 22,081 Dividend Yield (%) 0.3 0.3 0.3 0.4 0.5
Loans & advances and others 11,111 21,039 38,943 11,160 12,198
Current Liabilities & Prov. 38,461 54,210 50,676 37,655 39,673
Financial ratios
Liabilities 33,985 49,198 48,019 34,332 35,791
Year-ended Dec 31 CY16 CY17 CY18 CY19e CY20e
RoE (%) 11.8 12.2 13.4 25.7 21.6
Provisions 4,476 5,012 2,657 3,323 3,882
RoCE (%) 18.1 19.3 12.2 17.1 21.3
Net Current Assets 23,652 21,159 29,166 24,722 28,416
Asset/T.O (x) 2.6 2.5 1.9 2.0 2.3
Application of Funds 37,335 34,731 38,944 34,362 37,799
Net Debt/Equity (x) 0.2 0.0 0.0 0.0 0.0
Per share data EBIT/Interest (x) 7.2 9.0 8.3 12.5 12.8
No. of shares (m) 212 212 212 212 212
Margins (%)
Diluted no. of shares (m) 212 212 212 212 212
EBITDA Margin 8.0 8.1 6.8 8.5 9.0
BVPS (INR) 155.1 170.2 189.1 167.5 183.7
EBIT Margin 6.2 6.4 5.5 7.2 7.8
CEPS (INR) 24.6 27.3 16.4 22.3 29.9
PAT Margin 4.3 4.6 7.6 9.0 9.4
DPS (INR) 4.0 4.4 4.8 6.2 7.6
Source: Company Antique Source: Company, Antique
Current Reco : BUY 2QFY20 RESULT REVIEW

Previous Reco
CMP
: BUY
: INR650
Muthoot Finance
Target Price : INR938 Temporary blip in gold; strong otherwise
Potential Return : 44%
Quarterly performance
n Gold Loan growth YoY = 9%
Digant Haria
+91 22 4031 3422 n NII growth YoY = 32%
digant.haria@antiquelimited.com
n PPP growth YoY = 43%
Vidhi Shah n PAT growth YoY = 77%
+91 22 4031 3467
vidhi.shah@antiquelimited.com n Stage 3 = 3.4% in Q2FY20 vs. 3.2% in Q1FY20
Bhavik Mehta Analysis of results: Gold stock and gold AUM declined 3% and 1% sequentially, largely
+91 22 4031 3397
due to offering lower LTVs for a brief period due to liquidity constraint & employee strike in
bhavik.mehta@antiquelimited.com
Kerala. All subsidiaries i.e. MFI, housing, CV and insurance have performed quite well.
Subsidiaries now contribute to 13% of consolidated AUM and 6% of profits.
Market data One off adjustments: Operating income however was strong on account of ~INR2bn of
Sensex : 40,116 overdue interest collections. Such excess collections typically happen during times of
Sector : NBFC improvement in gold price. Adjusting for this, the NII, PPP and PBT would have grown by
Market Cap (INRbn) : 260.6 13%, 16% and 13% respectively. Tax rate going ahead will be 25.2%.
Market Cap (USDbn) : 3.615
O/S Shares (m) : 400.9
Management comments: Demand for gold loans continues to remain strong. Gold loan
52-wk HI/LO (INR) : 719/389 book growth for FY20 will be 15%, as company has tapped various funding avenues.
Avg Daily Vol ('000) : 382 Company has raised funds via foreign markets to diversify the borrowing profile as banks
Bloomberg : MUTH IN continue to ration quantum as well as pricing of the raw material. Pricing power continues to
Source: Bloomberg remain high and spreads will continue to remain around 12% range.
Valuation
FY19 FY20e FY21e
Our view - Strong growth ahead
EPS 49 65 74 Macro situation at its best: Gold prices at life highs in INR terms have resulted in strong
P/E (x) 13 10 9
demand for new loans and huge margin of safety on existing portfolio. Availability of loans
BVPS 244 293 351
for end customer has become difficult due to funding constraints faced by majority of NBFCs.
P/BV (x) 3 2 2
In such a situation, gold loan becomes extremely important avenue of funds for the customers.
To top it up, Muthoot Finance's self liquidating portfolio & strong balance sheet provides
Returns (%) huge comfort to lenders and allows easy access to growth capital on the debt side.
1m 3m 6m 12m
Absolute (2) 8 19 44 Liquidity constraints sorted, strong growth ahead: Prior to various measures taken
Relative (7) 2 11 25 by RBI & government, bank funding to even the good NBFCs remained constrained, both on
Source: Company, Antique quantum as well as pricing. Muthoot Finance too faced some liquidity constraints in Aug-Sep.
Shareholding pattern Now that liquidity constraints are firmly behind, Muthoot is poised to grow at 14%+ CAGR for
FY20-21 which translates to 20%+ PAT CAGR growth. Valuations at ~9x on FY21e earnings
Promoters : 73%
are attractive, given the improved macro as well as micro dynamics of the business. Maintain
Public : 27%
strong BUY.
Others : 0%
Source: Bloomberg
Key financials
FY17 FY18 FY19 FY20e FY21e
Price performance vs Nifty NII (Rs mn) 33,431 43,351 46,414 52,880 60,458
170 Net Income (Rs mn) 11,798 17,776 19,721 26,081 29,743
150 EPS (Rs) 29.5 44.4 49.2 65.1 74.2
130 BV (Rs) 163.1 195.3 244.4 293.1 351.0
110 P/E (x) 22.0 14.6 13.2 10.0 8.8
90 P/BV (x) 4.0 3.3 2.7 2.2 1.9
Nov-18 Mar-19 Jul-19 Nov-19 RoA (%) 4.5 6.2 6.1 7.0 7.0
Muthoot Finance NIFTY RoE (%) 19.4 24.8 22.4 24.2 23.1
Source: Bloomberg, Indexed to 100 Source: Company, Antique
Quarterly performance - Gold business

Gold Sep-19 Sep-18 % YoY Jun-19 % QoQ
NII 14,670 11,142 31.7 12,152 20.7
PPP 10,841 7,578 43.0 8,295 30.7
PAT 8,579 4,838 77.3 5,300 61.9
Gold loan AUM 349,419 320,370 9.1 351,708 (0.7)

Gold Holding (tons) 171 168 1.8 176 (2.8)
CAR 27.1 25.9 24.7

Tier I 26.7 25.3 24.3
Stage III Loan Assets (%) 3.43 1.91 3.20
Subsidiary business
Sep-19 Sep-18 % YoY Jun-19 % QoQ
Home Finance
Loan book 20,975 17,753 18.1 19,875 5.5
Revenue 908 562 61.6 620 46.5
Profits 139 99 40.4 62 124.2
Micro Finance
Loan book 21,074 13,806 52.6 19,385 8.7
Revenue 1,270 854 48.7 1,079 17.7
Profits 281 169 66.3 229 22.7
Temporary glitch, but growth is in full swing

Event 1: Muthoot Finance had temporarily stopped disbursements at its branches (29th July)
Gold loan NBFCs witnessed strong customer footfalls, especially post elections. However,
despite various measures taken by government and RBI, bank funding to even the good
NBFCs remained constrained, either by quantum or by exorbitant rates. Hence, it was a
situation where demand out-stripped supply.
Impact & current situation - Muthoot Finance significantly lowered its LTVs for sometime
in early August, which impacted its growth and also gave advantage to its competitors for
that brief period of time. However, as the liquidity situation improved, company restored its
LTV to original levels and continues to remain there.
Movement of gold rates charged by the gold loan NBFCs across periods
Loan - INR 2 lacs 2nd Aug 28th Aug 20th Sep 11th Nov
Gold Rate Gold Gold Rate Gold Gold Rate Gold Gold Rate Gold
(INR) (Gms) (INR) (Gms) (INR) (Gms) (INR) (Gms)
Muthoot Finance 1,750 120 2,150 96 2,300 87 2,525 85
Muthoot Fincorp 2,260 92 2,210 92 2,450 82 2,400 87
Manappuram 2,374 96 2,480 80 2,550 78 2,630 80
Source: Antique
Event 2: Regarding Strike in Kerala branches by negligible number of employees backed

by CITU Union (29th August)
CITU, which is the affiliate of Communist Party of India-Marxist (CPI-M), was trying hard to
unionize the employees and disrupt branch operations in parts of Kerala.
Impact & current situation - Some branches in the Kerala state were forcibly shut for
operations for few weeks. The strike ended on 10th October following discussions between
management representatives and trade union workers. This led to permanent closure of 38
branches in Kerala state.
Our View - Closing few branches may actually improve productivity and the "freed-up"
branch licenses can be used in profitable regions of North & East. Kerala contributes to ~10-
15% of overall retail liabilities and they can easily achieve the similar mobilization through
lesser branches since mobilization of NCDs is now done via demat accounts.
Event 3: Global Rating & successful ECB issuance (10th October)
MUTH was assigned BB+/Stable by Fitch, Ba2/Stable by Moody's and BB/Stable by S&P
Reason & current situation - Management intends to raise funds via Global Medium
Term Note Programme for up to USD 2bn. The rating is just one notch below India's sovereign
rating. As of now, it has raised USD 450mn for 3 year tenor at fixed rate of 6.125%.
Our View - Company is diversifying its liquidity profile by tapping foreign markets for the
first time due to bank's attitude of "take it or leave it". Despite raising at such high rates,
company will easily be able to maintain a 10-11% spread and margin of 12-13% as it has
the ability to pass the impact of borrowing cost on to its customers due to small ticket loans.
SOTP Valuation
We have followed SOTP valuation methodology, wherein we have valued the core business
using PE while the remaining businesses have been valued on relevant parameters. The key
risks to our call would be economy slowdown which will inherently lead to lower loan growth.
Business % Stake Basis on FY21E INR per share

Gold loan business Hold Co. 12x EPS 891
Housing finance business 100% 1.5x BV 26
Microfinance business 70% 1.5x BV 21
Price target 938
Financials
Profit and loss account (INRm) Growth ratios (%)
Year ended 31 Mar FY17 FY18 FY19 FY20e FY21e Year ended 31 Mar FY17 FY18 FY19 FY20e FY21e
Interest earned 56,369 62,665 68,782 80,363 90,126 AUM 11.8 7.6 18.4 14.0 12.5
Interest expended 22,938 19,314 22,368 27,483 29,668 Net Interest Income 31.5 29.7 7.1 13.9 14.3
Net interest income 33,431 43,351 46,414 52,880 60,458 Pre provisioning operating profits 46.5 39.0 0.6 15.8 17.2
Other income 1,098 666 24 26 28 PAT 45.7 50.7 10.9 32.2 14.0
Total Income 34,529 44,017 46,438 52,906 60,486
Total operating expenses 12,021 12,736 14,973 16,471 17,788 Yields, interest costs and spreads (%)
Pre-provisioning profit 22,508 31,282 31,465 36,436 42,697 Year ended 31 Mar FY17 FY18 FY19 FY20e FY21e
Depreciation 483 439 421 446 473 Yield on AUMs 21.7 22.0 21.3 21.5 21.3
Provisions & contingencies 2,816 2,397 275 1,121 1,481 Cost of borrowings 11.6 9.2 9.3 9.6 9.3
Profit before tax 19,210 28,447 30,768 34,868 40,744 Spread 10.1 12.9 12.0 11.9 12.0
Income taxes 7,411 10,671 11,047 8,787 11,001 NIM on AUM 12.9 15.2 14.4 14.1 14.3
Net profit 11,798 17,776 19,721 26,081 29,743

Operating efficiencies
Balance sheet (INRm) Year ended 31 Mar FY17 FY18 FY19 FY20e FY21e
Year ended 31 Mar FY17 FY18 FY19 FY20e FY21e Cost to income ratio (%) 34.8 28.9 32.2 31.1 29.4
LIABILITIES Op.costs/avg AUM (%) 4.6 4.5 4.6 4.4 4.2
Share Capital 3,995 4,000 4,007 4,007 4,007

Reserve and Surplus 61,170 74,120 93,921 1,13,439 1,36,619
Asset quality and provisioning
Networth 65,164 78,120 97,927 1,17,446 1,40,626
Year ended 31 Mar FY17 FY18 FY19 FY20e FY21e
GNPL (% of loans) 2.1 4.4 2.7 3.0 3.0
Borrowings 2,09,855 2,11,670 2,68,332 3,04,233 3,33,792
NNPL (% of loans) 1.7 3.8 2.4 2.0 2.0
Other Liabilities & Provisions 32,112 18,132 14,428 15,294 16,212
Coverage ratio (%) 18.0 14.8 13.9 33.3 33.3
Total 3,07,131 3,07,923 3,80,687 4,36,972 4,90,629
Return ratios & capital management

ASSETS
Fixed Assets 2,182 2,062 2,154 2,283 2,420
RoAA (%) 4.5 6.2 6.1 7.0 7.0
Investment 2,091 3,954 9,826 10,415 11,040
RoAE (%) 19.4 24.8 22.4 24.2 23.1
Deferred tax assets 560 64 175 186 197
Leverage 4.3 4.0 3.7 3.5 3.3
Loans and Advances 2,74,242 2,95,068 3,49,329 3,98,235 4,48,015
Cash and Bank balance 15,343 4,870 17,355 23,894 26,881
Du Pont Analysis (on average AUM)
Other current assets 12,713 1,904 1,848 1,959 2,076
Total 3,07,131 3,07,923 3,80,687 4,36,972 4,90,629
Interest earned 21.7 22.0 21.3 21.5 21.3
Interest expended 8.8 6.8 6.9 7.4 7.0
Per share data (INR)
Gross interest spread 12.9 15.2 14.4 14.1 14.3
Other income 0.4 0.2 0.0 0.0 0.0
EPS 29.5 44.4 49.2 65.1 74.2
Total income 13.3 15.5 14.4 14.2 14.3
BVPS 163.1 195.3 244.4 293.1 351.0
Employee expenses 2.8 2.7 2.8 2.6 2.5
Adj BVPS 151.6 167.9 224.4 274.5 329.9
Other expenses 1.8 1.7 1.9 1.8 1.7
DPS 6.0 10.0 12.0 14.0 14.0
Pre provisioning profits 8.7 11.0 9.8 9.7 10.1
P/E 22.0 14.6 13.2 10.0 8.8
Depreciation 0.2 0.2 0.1 0.1 0.1
P/B 4.0 3.3 2.7 2.2 1.9
Provisions 1.1 0.8 0.1 0.3 0.4
Pre-tax earnings 7.4 10.0 9.5 9.3 9.6
Tax 2.9 3.7 3.4 2.4 2.6
RoA 4.5 6.2 6.1 7.0 7.0
Leverage 4.3 4.0 3.7 3.5 3.3
RoE 19.4 24.8 22.4 24.2 23.1

Previous Reco
CMP
: BUY
: INR225
Cadila Healthcare
Target Price : INR300 Steady quarter hit by seasonality; long road to full recovery
Potential Return : 33% Cadila's Adjusted Revenue/EBITDA/PAT was in-line/4%/6% behind our
estimates but reported PAT were impacted by ~INR 2,681mn of levorphanol
write-off. While the overall numbers were optically modest, Cadila's core
growth drivers - domestic formulations and US - were ahead of expectations.
Even the margin pressure (Adj. EBITDA ~17.5%) can be largely attributed to
seasonality in Heinz portfolio as Wellness business saw mid-single digit margin.
Kunal Randeria
+91 22 4031 3386 We acknowledge the near-term uncertainties, especially on the US front with
kunal.randeria@antiquelimited.com loss in sales from onco front (~USD 50mn), sharp decline in levorphanol and
gAndrogel. With a high US base, long-term domestic underperformance and
lack of blockbuster products, the concerns have been compounded by the
Warning Letter that has led to a ~30% derating. Despite these issues, we
believe the stock offers an attractive entry point as a) while Moraiya accounts
for ~30% of filings, several approvals/launches seen in FY20/21/22 are from
Ahmedabad SEZ plant and products like gDoxil and transdermals are not
Moraiya dependent. Several injectable products are likely to be site transferred
Market data by FY20-end; b) gLialda and gAndrogel have troughed and levorphanol trough
Sensex : 40,116 is likely to be in the near future and gAsacol HD is unlikely to face competition
Sector : Pharmaceuticals till Sep-2021 thus reducing negative surprises; c) domestic business ~30% of
Market Cap (INRbn) : 230.1 revenue is slowly turning around as seen in 2Q20 and secondary data
Market Cap (USDbn) : 3.219 (outperformance in FY20). Our FY20 and FY21 numbers are below estimates
O/S Shares (m) : 1,023.7
- domestic growth of 8-10% vs. guidance of low-teens, no incremental
contribution from Moraiya translating to US sales declining from ~USD 900mn
52-wk HI/LO (INR) : 375/206
to USD 810mn in FY21 and margins at 20%. Despite conservative estimates,
Avg Daily Vol ('000) : 1,086
the stock trades at <14x FY21 earnings which is ~25% discount to peers.
Bloomberg : CDH IN Applying 18x multiple translates into a fair value of INR 300. Maintain BUY.
Source: Bloomberg
2Q20 wrap - decent quarter beyond the optics
Valuation Cadila's 2Q revenue was largely in-line but more importantly, US and India were ahead of
FY19 FY20e FY21e expectations that compensated for weak EU, wellness and alliance business. India grew at
EPS (INR) 18.1 10.9 16.6 10% YoY, the highest in several quarters (excl. GST-impacted qtr) while US seems to have
P/E 12.5 20.6 13.6 benefitted from some losartan gains. Gross margin was strong on account of better domestic
P/BV 2.2 2.1 1.9 performance. EBITDA margin was below expectations as other operating expenses were
EV/EBITDA 9.85 11.13 9.63 higher than expected; this can be largely attributed to a seasonally weak performance from
Dividend Yield (%) 1.8 1.8 1.8
Wellness. FCF improved to INR 8.9bn on account of improved working capital. Net debt
was down ~INR 3bn on better FCF.
What next? Bear case priced in
Returns (%) While we acknowledge the concerns, we believe that the current valuations factor in the bear
1m 3m 6m 12m case - no recovery in US earnings till FY22, tepid growth in domestic business and continual
Absolute (2) 2 (16) (37) pressure on current US business. We model US revenue declining from ~USD 900mn in FY19 to
Relative (7) (4) (22) (45) ~USD 810mn in FY21 as we assume no new revenue from Moraiya (inability to launch gCanasa,
Source: Bloomberg gUloric, gDelzicol, gQudexy XR and gLyrica) and also gLialda (from Moraiya) continues declining
in FY20. Signs of domestic revival seen in secondary data were visible in2Q results. We remain
Shareholding pattern cautious and build in 8-10% growth vs. guidance of growing faster than IPM.
Promoters : 75% Key financials
Public : 25% Year ended March (INRm) 2017 2018 2019 2020e 2021e
Others : 0% Revenues(INRm) 96,253 1,19,725 1,31,662 1,36,847 1,46,058
EBITDA Margin (%) 19.8 23.8 22.6 19.0 20.1
PAT(INRm) 13,612 17,916 18,494 13,213 16,945
120
PAT growth (%) (10.6) 31.6 3.2 (39.6) 51.7
100
EPS (INR) 13.3 17.5 18.1 10.9 16.6
80 EPS growth (%) (10.6) 31.6 3.2 (39.6) 51.7
60 P/E(x) 16.9 12.9 12.5 20.6 13.6
Cadila Healthcare NIFTY EV/EBITDA(x) 13.8 9.3 9.9 11.1 9.6
Source: Bloomberg Indexed to 100 Source: Company, Antique
Key takeaways from conference call

US
n Base business (excl. Sentynl and gAndrogel) grew 22% YoY and 6% QoQ. Base business
(excl. Sentynl and gAndrogel) will grow in high-single digits in FY20. Base Gx biz grew
11%
n Market share gains in several products incl. losartan
n Price erosion is 1.8% YoY
n In 2Q, 8 ANDAs filed and got 6 approvals. Expect to launch 15 products in FY20
n Expect 5 transdermals approvals in FY21. Cumulative 9 filings so far
n Specialty: Aim for 1 NDA every year after FY20
n gDoxil: making production batches to ensure that it can supply enough
India
n Revamping is starting to show results
n Branded portfolio grew 11.5% YoY. De-growth in trade Gx and seeing challenges
n As per AWACS, Cadila grew 13.7%. As per secondary data, derma (11.7% vs. 8.2%),
gynaec (11.5% vs. 6.5) and hormones (15.5% vs. 11.6%). Cardio-diabetes doing better
than before but not better than market.
n Big brands (> INR 500mn) grew 12% YoY; Brands (INR 250-500mn) grew 20% YoY
n ~55% business is mass and ~45% is specialty
n Not seeing a great revival in market
RoW/Other businesses
n Biologics (India + RoW) grew YoY to INR 892mn vs. INR 729mn
n Wellness: looming to double direct distribution. ~INR 100mn cost synergies in FY20 and
~INR 250mn in FY21
n Financial
n ~INR 120mn of one-off expenses in Other expenses
n ~USD 27mn of levorphanol still in Balance sheet
n Gross debt: INR 78.8bn; net debt INR 66.8bn. ~INR 3-4bn reduction in 2H20
n Capex: ~INR 8bn. Large part of capex is for injectable site, then SEZ expansion.
Maintance capex is ~INR 0.5-0.75bn
Regulatory
n Moraiya: Will be ready for inspection by Jun-2020. Dismantling injectable infrastructure
n Initiated injectable site transfers from Moraiya (currently 0 revenue from Moraiya) to Liva.
Will be over by end-FY20
n Liva was last inspected in Aug-2018
Recent tentative approvals

Brand Compound Market size (USD mn) Competition Plant Potential launch
Uloric Febuxostat 420 8+ Moraiya 2QFY20
Canasa Mesalamine 250 3 Moraiya Jun-19
Lyrica Pregabalin 3600 20+ Moraiya Jun-19
Exjade Deferasirox 120 6 Moraiya Sep-19
Delzicol Mesalamine 250 2-3 Moraiya Mar-20
Qudexy XR Topiramate XR 200 5-6 Moraiya Mar-20
Xeljanz Tofacitinib 1800 4 Moraiya FY22
Vimpat Lacosamide 800 10+ Moraiya Mar-22
Doxil Doxorubicin 160 3 Alidac 2Q20
Sensipar Cinacalcet 1200 8+ Ahmedabad SEZ Feb-22
Myrbetriq Mirabegron 250 3 Ahmedabad SEZ Mar-22
Tecfidera Dimethyl Fumarate 3300 10+ Ahmedabad SEZ FY22
Janumet XR Sitaglipin+metformin XR 1800 5 Ahmedabad SEZ Jul-22
Mozobil Plerixafor Inj 170 1 Alidac Jul-23
Januvia Sitagliptin phosphate 2000 6+ Ahmedabad SEZ Jul-22
Jentadueto linagliptin + metformin 400 8-10 Ahmedabad SEZ May-25
Tradjenta Linagliptin 500 8+ Ahmedabad SEZ May-25
Source: FDA, Antique
Cadila 2Q20 P&L

Cadila P&L (INR m) Q2FY20A Q2FY19A Q1FY20A % YoY % QoQ Q2FY20E % Delta vs Q2FY20E % Delta
ANTQe (cons) vs cons
Gross Sales 32,442 28,441 34,062 14% -5% 32,578 0%
Other op. income 1,224 1,171 901 5% 36% 995 23%
Net Total Income 33,666 29,612 34,963 14% -4% 33,574 0% 34,438 -2%
Expenses
Raw material 11,565 9,919 12,595 17% -8% 12,119 -5%
Staff cost 5,967 5,212 5,898 14% 1% 5,701 5%
Mfg & Other expense 7,211 4,887 7,662 48% -6% 6,776 6%
R&D 2,667 2,716 2,488 -2% 7% 2,476 8%
EBITDA (excl. other income) 6,256 6,878 6,320 -9% -1% 6,501 -4% 6,691 -7%
% EBITDA Margin 18.6% 23.2% 18.1% -464 bps 51 bps 19.4% -78 bps 19.4% -85 bps
Other income 269 304 226 19% 280 -4%
Interest Expense 897 357 891 750
Depreciation 1,723 1,475 1,716 17% 0% 1,690 2%
Profit Before Tax (PBT) 3,905 5,350 3,939 -27% -1% 4,341 -10%
Tax 395 1,247 791 -68% -50% 912 -57%
% Tax rate 32% 23% 20% 21%
Minority interest* -132 107 217 150
JVs 111 179 105 100
Exceptional 2,681 0 0 0
Reported PAT 1,072 4,175 3,036 -74% -65% 3,379

Adjusted Net Profit 3,171 4,175 3,036 -24% 4% 3,379 -6% 3,498 -9%
(* positive number represents minority's share of company's profits or company's share of associate profit)
% Cost Ratios Q2FY20A Q2FY19A Q1FY20A % YoY % QoQ Q2FY20E % Delta vs Q2FY20E % Delta
Raw Materials 34.4 33.5 36.0 86 bps -167 bps 36.1 -174 bps
Staff cost 17.7 17.6 16.9 12 bps 85 bps 17.0 74 bps
R&D 7.9 9.2 7.1 -125 bps 81 bps 7.4 55 bps
Mfg & Other expense 21.4 16.5 21.9 492 bps -50 bps 20.2 124 bps
Sales Break-up Q2FY20A Q2FY19A Q1FY20A % YoY % QoQ Q2FY20E % Delta vs Q2FY20E % Delta
Formulations 26,858 24,615 25,824 25,826
- US 14,484 13,204 13,670 10% 6% 13,572 7%
- India 9,778 8,857 9,476 10% 3% 9,468 3%
- LatAm 718 660 570 9% 26% 718 0%
- EM 1,471 1,374 1,634 7% -10% 1,539 -4%
- EU 407 520 474 -22% -14% 529 -23%
Other biz 5,584 3,826 8,239 6,753
- Consumer wellness 3,172 1,348 6,064 135% -48% 4,179 -24%
- Animal Health & others 1,348 1,346 1,205 0% 12% 1,467 -8%
- APIs 1,049 890 692 18% 52% 935 12%
- Alliances 15 242 278 -94% -95% 172 -91%
Total sales 32,441 28,441 34,063 32,578
Source: Company, Antique; Consensus as on 13-Nov-2019
Cadila 2Q20 P&L (Continued)......

Q2FY20A Q2FY19A Q1FY20A
Reported
Net sales 32,442 28,441 34,062
OOI 1,224 1,171 901
Total revenue 33,666 29,612 34,963
Gross profit 22,101 19,693 22,368
- margin 65.6% 66.5% 64.0%
EBITDA 6,256 6,878 6,320
- margin 19.3% 24.2% 18.6%
fx gain/(loss) in OOI 48 463 77

fx gain/(loss) in COGS 38 118 0
fx gain/(loss) above EBITDA and below COGS (excl. other income)
Adjusted
Adjusted revenue 33,268 29,149 34,886
one-off exp/(gains) -350
Adjusted gross profit 21,665 19,112 22,291
- adj gross margin 65.1% 65.6% 63.9%
one-off exp/(gains) -350 700
Adjusted EBITDA 5,820 6,297 6,943

- adj EBITDA margin 17.5% 21.6% 19.9%
Wellness key numbers (INR mn) Q2FY20A Q2FY19A Q1FY20A

Revenue 3,260 1,382 6,203
Gross profit 1,848 953 3,673
- gross margin 56.7% 68.9% 59.2%
EBITDA 204 385 1,220
- EBITDA margin 6.3% 27.9% 19.7%
Revenue 30,008 27,767 28,684

Gross profit 19,817 18,159 18,618
- gross margin 66.0% 65.4% 64.9%
EBITDA 5,616 5,912 5,723
- EBITDA margin 18.7% 21.3% 20.0%
Cadila key drugs

Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Jun-19 Aug-19 Sep-19
Flomax 33% 34% 35% 37% 37% 37% 38% 38% 39%
Trokendi 28% 30% 31% 32% 40% 41% 40% 40% 40%
Prilosec 4% 5% 5% 7% 7% 7% 7% 7% 7%
Coreg 19% 19% 19% 19% 27% 28% 32% 32% 32%
Mobic 18% 26% 27% 27% 28% 27% 26% 27% 27%
Lamictal 22% 23% 26% 26% 26% 27% 27% 21% 21%
Effexor 20% 19% 21% 25% 28% 38% 33% 20% 22%
Asacol HD 70% 72% 74% 81% 83% 85% 86% 87% 87%
Lialda 52% 53% 48% 41% 44% 45% 34% 33% 36%
Androgel 1.62% 0% 0% 0% 0% 45% 48% 23% 18% 16%
Losartan 12% 8% 1% 1% 1% 2% 8% 16% 17%
Trazodone 0% 0% 2% 11% 17% 21% 22% 23% 23%
Crestor 0% 0% 0% 0% 1% 0% 4% 8% 8%
Arimidex 10% 9% 9% 12% 22% 22% 3% 17% 21%
Zetia 0% 0% 0% 4% 10% 12% 12% 12% 12%
Cadila P&L changes

FY20e FY21e
Old New growth change % Old New growth change %
Total Domestic formulations 38,169 38,088 8% 0% 41,933 41,844 10% 0%
Domestic API 1,345 1,345 5% 0% 1,426 1,426 6% 0%
Consumer products 18,945 18,784 133% -1% 20,840 20,662 9% -1%
Animal Health & Others 5,488 5,385 5% -2% 6,094 5,870 7% -4%
Total Domestic business 63,948 63,603 28% -1% 70,292 69,802 9% -1%
North America USD 781 786 -12% 1% 814 805 3% -1%

North America INR 54,675 55,048 -12% 1% 56,992 56,353 3% -1%
Europe EUR 29 23 -20% -23% 31 23 -23% -26%

Europe INR 2,328 1,791 -21% -23% 2,452 1,791 -23% -27%
Latin America BRL 166 162 11% -3% 189 184 11% -3%
Latin America INR 2,906 2,829 3% -3% 3,407 3,225 11% -5%
Emerging markets 6,238 6,238 12% 0% 6,986 6,986 12% 0%

Total international formulations 66,147 65,906 -10% 0% 69,838 68,356 3% -2%
API exports 2,816 2,816 -5% 0% 3,268 2,956 5% -10%

Net sales 1,34,273 1,32,883 4% -1% 1,44,801 1,41,897 6% -2%
Excise 0 0 0 0
Other operating revenue 3,963 3,963 4,381 4,162
Total operating revenue 1,38,236 1,36,847 4% -1% 1,49,182 1,46,058 6% -2%
Gross profit 88,153 88,344 5% 0% 95,461 93,982 7% -2%

- margin 63.8% 64.6% 64.0% 64.3%
EBITDA 27,327 26,022 -12% -5% 30,300 29,419 8% -3%

- margin 19.8% 19.0% 20.3% 20.1%
PAT (Reported) 14,644 11,171 17,366 16,945

Net profit (adjusted) 14,644 13,213 17,366 16,945
EPS(Rs) 14.3 12.9 -29% -10% 17.0 16.6 16% -2%

Financials
Year ended 31 Mar 2017 2018 2019 2020e 2021e Year ended 31 Mar 2017 2018 2019 2020e 2021e
Net Revenue 96,253 1,19,725 1,31,662 1,36,847 1,46,058 PBT 16,119 23,120 23,827 17,080 21,252
Op. Expenses 77,175 91,266 1,01,925 1,10,825 1,16,639 Depreciation & amortisation 3,750 5,400 5,986 6,737 6,924
EBITDA 19,078 28,459 29,737 26,022 29,419 Interest expense 568 1,468 1,905 2,658 2,167
Depreciation 3,750 5,400 5,986 6,737 6,924 (Inc)/Dec in working capital (4,315) (14,178) (8,713) (3,126) (3,390)
EBIT 15,328 23,059 23,751 19,285 22,495 Tax paid (2,376) (6,206) (6,754) (3,416) (4,569)
Other income 1,286 1,133 2,011 1,131 1,402 Less: Interest/Div. Income Recd. (578) (500) (536) (331) (602)
Interest Exp. 492 914 1,935 3,336 2,645 Other operating Cash Flow (51) 89 13,108 - -
Extra Ordinary Items -gain/(loss) (3) - - (2,681) - CF from operating activities 13,117 9,193 28,823 19,602 21,782
Reported PBT 16,119 23,278 23,827 14,399 21,252 Capital expenditure (29,350) (10,353) (10,464) (7,707) (7,804)
Tax 2,557 5,644 5,303 3,416 4,569 Inc/(Dec) in investments 53 116 (47,459) - -
Reported PAT 13,900 18,262 18,993 11,171 16,945 Add: Interest/Div. Income Recd. 578 500 536 331 602
Minority Int./Profit (loss) From Asso. (291) (346) (499) - - CF from investing activities (28,719) (9,737) (57,387) (7,377) (7,202)
Net Profit 13,609 17,916 18,494 11,171 16,945 Inc/(Dec) in debt 27,652 1,574 23,955 2,028 (2,500)
Adjusted PAT 13,612 17,916 18,494 13,213 16,945 Dividend Paid (3,938) (10) (4,314) (6,163) (6,163)
Adjusted EPS (INR) 13.3 17.5 18.1 10.9 16.6 Others (556) (1,049) (795) (2,658) (2,167)
CF from financing activities 23,158 515 18,846 (6,793) (10,830)
Balance sheet (INRm) Net cash flow 7,556 (29) (9,718) 5,433 3,750
Year ended 31 Mar 2017 2018 2019 2020e 2021e Opening balance 8,370 15,926 15,897 8,792 14,225
Share Capital 1,024 1,024 1,024 1,024 1,024 Closing balance 15,926 15,897 6,179 14,225 17,975
Reserves & Surplus 68,576 86,421 1,02,839 1,10,340 1,20,860
Networth 69,600 87,445 1,03,863 1,11,364 1,21,884 Growth indicators (%)
Debt 49,453 51,126 71,466 73,494 70,994 Year ended 31 Mar 2017 2018 2019 2020e 2021e
Minority Interest 1,561 1,910 12,929 12,929 12,929 Revenue(%) -2.16 24.39 9.97 3.94 6.73
Net deferred Tax liabilities 1,164 2,812 2,523 2,523 2,523 EBITDA(%) -19.94 49.17 4.49 -12.49 13.06
Capital Employed 1,21,778 1,43,293 1,90,781 2,00,310 2,08,330 Adj PAT(%) -10.75 31.62 3.23 -28.56 28.25
Gross Fixed Assets 81,029 93,390 1,57,579 1,65,286 1,73,091 Adj EPS(%) -10.63 31.65 3.23 -39.60 51.69
Accumulated Depreciation 23,478 28,564 35,942 42,679 49,603
Capital work in progress 15,433 15,272 8,372 8,372 8,372 Valuation (x)
Net Fixed Assets 72,984 80,098 1,30,009 1,30,980 1,31,860 Year ended 31 Mar 2017 2018 2019 2020e 2021e
Investments 1,134 3,852 3,251 3,251 3,251 P/E 16.9 12.9 12.5 20.6 13.6
Non Current Investments 643 1,104 952 952 952 P/BV 3.3 2.6 2.2 2.1 1.9
Current Investments 491 2,748 2,299 2,299 2,299 EV/EBITDA 13.83 9.33 9.85 11.13 9.63
Current Assets, Loans & Adv. 78,089 96,703 1,01,571 1,11,509 1,20,083 EV/Sales 2.74 2.22 2.23 2.12 1.94
Inventory 18,037 23,853 26,880 28,224 29,635 Dividend Yield (%) 1.4 1.6 1.8 1.8 1.8
Debtors 22,775 32,063 39,508 42,669 46,082
Cash & Bank balance 15,435 13,149 6,493 11,926 15,676
Financial ratios
Loans & advances and others 21,842 27,638 28,690 28,690 28,690
Year ended 31 Mar 2017 2018 2019 2020e 2021e
RoE (%) 22.11 22.82 19.33 12.28 14.53
RoCE (%) 16.75 18.25 15.42 10.44 11.70
Liabilities 16,736 18,884 19,226 20,187 21,197
Asset/T.O (x) 0.99 0.92 0.81 0.71 0.73
Provisions 13,693 18,476 24,824 25,241 25,667
Net Debt/Equity (x) 0.48 0.40 0.60 0.53 0.43
EBIT/Interest (x) 33.77 26.47 13.31 6.12 9.03
Application of Funds 1,21,778 1,43,293 1,90,781 2,00,311 2,08,330
Per share data Margins (%)

Year ended 31 Mar 2017 2018 2019 2020e 2021e Year ended 31 Mar 2017 2018 2019 2020e 2021e
EBITDA Margin(%) 19.8 23.8 22.6 19.0 20.1
No. of shares (m) 1,024 1,024 1,024 1,024 1,024
EBIT Margin(%) 15.9 19.3 18.0 14.1 15.4
Diluted no. of shares (m) 1,024 1,024 1,024 1,024 1,024
PAT Margin(%) 14.0 14.8 13.8 9.6 11.5
BVPS (INR) 67.99 85.42 101.45 108.78 119.06
CEPS (INR) 17.24 23.11 24.40 17.49 23.32 Source: Company Antique
DPS (INR) 3.20 3.50 4.00 4.00 4.00

Current Reco : HOLD 2QFY20 RESULT REVIEW

Previous Reco
CMP
: HOLD
: INR55
Bharat Heavy Electricals
Target Price : INR51 Execution disappoints; lower than expected
Potential Return : -8% provisioning helps beat expectation
BHEL's 2QFY20 results were ahead of our expectation at operating profit
Dhirendra Tiwari levels supported by provisioning write back during the quarter. Sales at
+91 22 4031 3436 INR62b was below our estimates of INR67b, gross profit at INR23b was
dhirendra.tiwari@antiquelimited.com
below our estimate of INR28.6b, however operating profit at INR2.7b was
Amit Shah ahead of our estimate of INR2.2b on account of provision write back of
+91 22 4031 3437 INR760m as against provision creation of INR5.2b in 2QFY19. Execution for
amit.shah@antiquelimited.com BHEL continues to remain challenging given a) land availability issues at the
Abhijeet Singh client side and b) BHEL's regulating supplies where it faces payment delays
+91 22 4031 3414 from clients. Order inflow improved 44% YoY on lower base, order backlog
abhijeet.singh@antiquelimited.com remains stable at INR1.1t. We continue to maintain our HOLD rating on the
stock given a) likelihood of constrained execution, b) weak order pipeline
for FY21 and c) continued pressure on margins on account of intense
Market data competition. We value stock at 10x its FY21E EPS of INR5.1 arriving at target
Sensex : 40,116 price of INR51.
Sector : Industrials 2QFY20 execution disappoints
Market Cap (INRbn) : 190.1
Sales for the quarter stood at INR62.3b (-8.2% YoY), below our estimate of INR67.3b, led by
Market Cap (USDbn) : 2.637
weak execution in power segment (-23% YoY). Power segment sales during the quarter were
O/S Shares (m) : 3,482.1
impacted on account of a) land availability issues from the client side and b) BHEL regulated
52-wk HI/LO (INR) : 79/41
its supply to customers given payment issues faced in few of the projects. Industrial segment
Avg Daily Vol ('000) : 21,076
sales registered healthy growth of 24% YoY supported by better execution in the transportation
Bloomberg : BHEL IN
and solar segment.
Source: Bloomberg
Valuation Operating margins improves 70bps YoY to 4.3% supported by provision write back
FY19 FY20e FY21e Gross margins during the quarter witnessed sharp decline of 410bps YoY to 37% impacted by
EPS (INR) 3.5 2.6 5.1 adverse revenue mix and competitively bagged projects executed during the quarter. Despite
P/E 15.8 21.3 10.9 sharp decline in gross margins, operating margins improved 70bps YoY to 4.3% supported by
P/BV 0.6 0.6 0.6 lower provisioning during the quarter. During the quarter there was provision write back of
EV/EBITDA 6.6 9.1 5.1 INR760m as against provision creation of INR5.2b in 2QFY219. Operating profit at INR2.7b
Dividend Yield (%) 2.5 1.9 3.7 (+11% YoY) was ahead of our estimate of INR2.2b on account of lower provisioning.
Order intake at INR74b in 2QFY20 (+44% YoY), L1 pipeline stands at INR210b
Returns (%) n During 2QFY20, BHEL's order intake stands at INR74b v/s INR52b in 2QFY19 sharp
1m 3m 6m 12m
improvement of 44% YoY. BHEL's order intake had declined from peak levels of ~INR600b
Absolute 27 8 (9) (21)
in FY10/FY11 to average levels of INR238b in FY19, Order backlog at the end of2Q
Relative 21 1 (15) (31)
FY20 stood at INR1.1t, down 6% YoY led by weak order inflow during the quarter.
n BHEL is L1 in INR210b of orders and key orders where BHEL is favorably placed includes
Shareholding pattern 2x660mw Khurja, 2x660 Talcher; 1x800mw Adilabad project. Incrementally BHEL also
expects projects like 2x800mw Singrauli, Lara and Talabeera projects to be finalized
Promoters : 63%
during FY20 end.
Public : 37%
Others : 0% n Incrementally BHEL expects ordering of 9-10GW of tenders to be finalized in near to
medium term and has also participated in the NTPC tender for FGD of 33GW.
Source: Bloomberg
Receivables position improves however still at elevated level
BHEL has been able to bring down its receivables position (trade receivables+ contract assets)
120 from INR389b in 2QFY19 to INR380b in 2QFY20, however still remains at elevated. Of the
100 INR380b of receivables, State constitutes INR178b, central constitutes INR123b and private
80 stands at INR44b.
60 Valuations and view
Nov-18 Mar-19 Jul-19 Nov-19 We maintain HOLD rating on the stock , given a) likelihood of constrained execution, b) weak
BHEL NIFTY order pipeline for FY21 and c) continued pressure on margins on account of intense competition.
Source: Bloomberg Indexed to 100 We value stock at 10x its FY21E EPS of INR5.1 arriving at target price of INR51.
Quarterly financials
(INR m) 1Q FY19 2Q FY19 3Q FY19 4Q FY19 1QFY20 2QFY20 YoY (%) QoQ (%) 1HFY20 1HFY19 YoY (%)
Revenue 59,355 67,799 73,364 1,02,972 45,317 62,257 (8.2) 37.4 1,07,574 1,27,154 (15)
Raw Material 33,677 39,757 45,808 58,400 26,073 39,099 (1.7) 50.0 65,172 73,434 (11)
% of Sales 56.7 58.6 62.4 56.7 57.5 62.8 60.6 57.8
Employee Cost 14,255 15,398 13,015 19,809 14,509 14,713 (4.4) 1.4 29,223 29,654 (1)
% of Sales 24 23 18 19 32 24 27 23
Other Exp 8,551 10,236 12,354 10,811 7,402 5,776 (43.6) (22.0) 13,178 18,786 (30)
% of Sales 14.4 15.1 16.8 10.5 16.3 9.3 12.3 14.8
Total Exp 56,483 65,391 71,177 89,019 47,984 59,588 (8.9) 24.2 1,07,573 1,21,874 (12)
EBITDA 2,872 2,408 2,187 13,952 (2,667) 2,669 10.8 (200.1) 2 5,280 (100)
EBITDA Margin (%) 4.8 3.6 3.0 13.5 (5.9) 4.3 0.0 4.2
Other Income 1,786 1,517 2,265 1,209 1,455 1,356 (10.6) (6.8) 2,812 3,303 (15)
Interest 639 689 577 964 1,080 1,187 72.3 9.9 2,267 1,328 71
Depreciation 1,761 521 1,124 1,342 1,148 1,193 129.1 3.9 2,341 2,282 3
Exceptional Items - - - - - - - -
PBT 2,259 2,715 2,751 12,854 (3,440) 1,645 (39.4) NM (1,795) 4,974 NM
Tax 703 863 831 6,027 (1,277) 459 (46.8) NM (818) 1,566 NM
Tax rate (%) 31 31.8 30 47 37 27.9 46 31
Adjusted PAT 1,556 1,852 1,920 6,827 (2,163) 1,186 (36.0) NM (977) 3,408 NM
Exceptional Items - - - - - - - -
Reported PAT 1,556 1,852 1,920 6,827 (2,163) 1,186 (36.0) NM (977) 3,408 NM
PAT Margin (%) 2.6 2.7 2.6 6.6 (4.8) 1.9 (0.9) 2.7
EPS (Rs) 0.4 0.5 0.5 1.9 (0.6) 0.3 (36.0) NM (0.3) 0.9 NM
Segmental performance
INR mn 1Q FY19 2Q FY19 3Q FY19 4Q FY19 1QFY20 2QFY20 YoY (%) QoQ (%) 1HFY20 1HFY19 YoY (%)
Revenue
Power 46,362 51,532 55,123 81,034 34,915 42,215 (18.1) 20.9 77,130 97,893 (21.2)
Industry 11,539 14,538 16,035 17,331 9,188 18,075 24.3 96.7 27,263 26,077 4.5
Total 57,901 66,069 71,157 98,365 44,103 60,290 (8.7) 36.7 1,04,393 1,23,970 (15.8)
EBIT
Power 4,878 4,257 5,921 13,066 (541) 4,337 1.9 (901.1) 3,796 9,135 (58.4)
Margin % 10.5 8.3 10.7 16.1 (1.6) 10.3 4.9 9.3
Industry 585 696 557 2,534 349 546 (21.5) 56.5 895 1,281 (30.1)
Margin % 5.1 4.8 3.5 14.6 3.8 3.0 3.3 4.9
Financials
Year-ended March 31 FY17 FY18 FY19 FY20e FY21e Year-ended March 31 FY17 FY18 FY19 FY20e FY21e
Net Revenue 2,84,470 2,89,257 3,03,490 3,06,719 3,52,229 PBT 13,019 15,850 20,579 12,026 23,522
Op. Expenses 2,67,116 2,69,941 2,82,070 2,91,608 3,26,651 Depreciation & amortisation 8,488 7,864 4,748 4,934 5,189
EBITDA 17,354 19,317 21,420 15,112 25,578 Interest expense (3,207) (2,657) (2,881) (460) (1,433)
Depreciation 8,488 7,864 4,748 4,934 5,189 (Inc)/Dec in working capital (2,817) (3,382) (47,489) 2,781 (3,184)
EBIT 8,866 11,453 16,672 10,178 20,390 Tax paid 1,320 7,784 8,425 3,031 5,928
Other income 7,659 6,943 6,776 5,888 7,200 Other operating Cash Flow (9,379) (15,568) (16,849) (6,061) (11,855)
Interest Exp. 3,506 2,546 2,869 4,040 4,067 CF from operating activities 7,423 9,891 (33,468) 16,250 18,166
Extra Ordinary Items -gain/(loss) (6,740) - - - - Capital expenditure (2,279) (2,990) (4,098) (6,035) (3,000)
Reported PBT 6,279 15,850 20,579 12,026 23,522 Inc/(Dec) in investments 27 (293) 214 (1,339) (4,016)
Tax 1,320 7,784 8,425 3,031 5,928 CF from investing activities (2,252) (3,284) (3,885) (7,373) (7,016)
Reported PAT 4,959 8,066 12,154 8,995 17,595 Inc/(Dec) in share capital (1,741) 4,026 (21,530) (0) (0)
Net Profit 4,959 8,066 12,154 8,995 17,595 Inc/(Dec) in debt (367) (324) 24,955 12,567 7,372
Adjusted PAT 4,959 8,066 12,154 8,995 17,595 Dividend Paid 995 (3,469) (2,800) (4,382) (5,082)
Adjusted EPS (INR) 1.4 2.2 3.5 2.6 5.1 CF from financing activities (1,113) 233 626 8,185 2,290
Net cash flow 4,058 6,841 (36,726) 17,063 13,440
Balance sheet (INRm) Opening balance 1,00,860 1,04,918 1,11,759 75,033 92,096
Year-ended March 31 FY17 FY18 FY19 FY20e FY21e Closing balance 1,04,918 1,11,758 75,032 92,096 1,05,536
Share Capital 4,895 7,343 6,964 6,964 6,964
Reserves & Surplus 3,18,049 3,18,668 3,07,035 3,11,820 3,21,180 Growth indicators (%)
Networth 3,22,944 3,26,011 3,13,999 3,18,784 3,28,145 Year-ended March 31 FY17 FY18 FY19 FY20e FY21e
Debt 896 572 25,527 38,094 45,466 Revenue 11.6 1.7 4.9 1.1 14.8
Net deferred Tax liabilities (40,447) (37,254) (40,305) (40,305) (40,305) EBITDA NM 11.3 10.9 -29.4 69.3
Capital Employed 2,83,393 2,89,328 2,99,221 3,16,574 3,33,306 Adj PAT NM 62.7 50.7 -26.0 95.6
Gross Fixed Assets 51,744 54,043 56,543 59,543 62,543 Adj EPS NM 62.7 58.9 -26.0 95.6
Accumulated Depreciation 16,833 24,267 28,967 33,871 39,059
Capital work in progress 1,683 1,945 2,232 6,500 6,500 Valuation (x)
Net Fixed Assets 36,595 31,721 29,808 32,172 29,984 Year-ended March 31 FY17 FY18 FY19 FY20e FY21e
Investments 6,614 6,907 6,694 8,032 12,048 P/E 40.7 25.0 15.8 21.3 10.9
Non Current Investments 6,614 6,907 6,694 8,032 12,048 P/BV 0.6 0.6 0.6 0.6 0.6
Current Assets, Loans & Adv. 5,27,599 5,61,298 5,67,353 5,62,381 5,93,829 EV/EBITDA 5.0 4.2 6.6 9.1 5.1
Inventory 73,724 62,558 82,398 83,501 92,807 EV/Sales 0.3 0.3 0.5 0.4 0.4
Debtors 3,18,633 2,79,715 3,06,166 2,81,750 2,89,770 Dividend Yield (%) 1.5 2.4 2.5 1.9 3.7
Cash & Bank balance 1,04,918 1,11,759 75,033 92,096 1,05,536
Loans & advances and others 30,324 1,07,266 1,03,756 1,05,033 1,05,716
Financial ratios
Current Liabilities & Prov. 2,87,415 3,10,598 3,04,634 2,86,012 3,02,555
Year-ended March 31 FY17 FY18 FY19 FY20e FY21e
RoE (%) 1.5 2.5 3.8 2.8 5.4
Liabilities 87,092 1,05,869 1,13,751 84,510 83,805
RoCE (%) 5.8 6.4 8.0 5.2 8.5
Provisions 2,00,324 2,04,730 1,90,883 2,01,502 2,18,750
Asset/T.O (x) 1.6 1.7 1.6 1.4 1.6
Net Current Assets 1,35,266 1,38,941 1,87,686 1,84,273 1,85,738
Net Debt/Equity (x) (0.3) (0.3) (0.2) (0.2) (0.2)
Application of Funds 2,83,393 2,89,328 2,99,220 3,16,574 3,33,306
EBIT/Interest (x) 4.7 7.2 8.2 4.0 6.8
Per share data
Margins (%)
No. of shares (m) 3,671 3,671 3,482 3,482 3,482
EBITDA Margin(%) 6.1 6.7 7.1 4.9 7.3
Diluted no. of shares (m) 3,671 3,671 3,482 3,482 3,482
EBIT Margin 3.1 4.0 5.5 3.3 5.8
BVPS (INR) 88.0 88.8 90.2 91.6 94.2
PAT Margin 1.7 2.7 3.9 2.9 4.9
CEPS (INR) 3.7 4.3 4.9 4.0 6.5
DPS (INR) 0.8 1.3 1.4 1.0 2.0 Source: Company Antique


Previous Reco
CMP
: BUY
: INR1,004
Mahanagar Gas
Target Price : INR1,145 In-line earnings, prognosis better; BUY
Potential Return : 14% MAHGL's 2QFY20 operating profits at INR 2.7bn (+23% YoY) stood in-line
with our/street estimates, even as growth in sales volume missed estimates
and margins stood shade better. PAT at INR 2.7bn (+98%YoY) stood ahead
of estimates, as MAGL adopted revised corporate tax rates and provisioned
for re-measured deferred tax liability, leading to a negative tax incidence in
Nitin Tiwari the quarter. Highlights: a) total gas sales volume at 3mmscmd (+1.3% YoY);
+91 22 4031 3434 b) CNG sales at 2.2mmscmd, with a weak growth of just 1% YoY as disruption
nitin.tiwari@antiquelimited.com in domestic gas supply (ONGC) impacted sales c) PNG sales stood at
0.80mmscmd, registering a tepid growth of just +2.2% YoY, as disruption in
domestic supply and lower industrial demand impacted sales. d) EBITDA per
unit at a INR 9.9/scm (1QFY20: INR 10.2/scm; 2QFY19: INR 8.13/scm) on
favorable spot LNG prices and healthy realizations. Maintain BUY, with a
target price of INR 1,145/sh, as we find the stock attractively valued, trading
at 13.3x FY21e.
Market data Volume growth continues to be tepid…
Sensex : 40,116 Q2FY20 Adj. EBITDA at INR 2.73bn (+23.4% YoY; -1.2% QoQ), came in line with our and
Sector : Oil & Gas street estimates as weaker growth in volume (+1.3% YoY) was offset by strong unit margins
Market Cap (INRbn) : 99.1 (INR 9.9/scm). The growth continued to slow down and stood sequentially lower (1Q: 3.3%
Market Cap (USDbn) : 1.375 YoY), on) disruption of gas supply from ONGC, b) termination of gas supply by three industrial
O/S Shares (m) : 98.8 off-takers, c) lower off-take of gas by at-least 15 industrial off-takers and d) base effect, as
52-wk HI/LO (INR) : 1067/754 growth was significantly strong in 2QFY19 at 9.5% YoY following addition of large number
Avg Daily Vol ('000) : 716 of three wheeler to vehicle pool over 1QFY19 and 2QFY19. The growth in volume however
Bloomberg : MAHGL IN is expected to pick pace with addition of 500 BEST buses in 2HFY20 and another 500 in
Source: Bloomberg FY21.
Valuation …offset by robust margins
FY19 FY20e FY21e Weaker growth in volumes was however offset by healthy unit margins driven by timely
EPS (INR) 55.3 77.7 75.4 revision in prices. EBITDA at INR 9.9/scm, though sequentially lower, is at high not seen
P/E 18.2 12.9 13.3 before 1QFY20. Even as the raw material cost increased sequentially to 13.7/scm (2Q: INR
P/BV 4.1 3.8 3.4 12.9/scm), a timely revision in prices helped safeguard the margins. However, moving into
EV/EBITDA 10.71 8.94 9.13 2HFY20 margins could moderate as operating expenses tends to be higher in second half.
Dividend Yield (%) 2.0 3.9 3.8 Infrastructure investment continues
Source: Company, Antique MAHGL plans to invest incremental ~INR 3bn in 2HFY20 and INR 5bn in FY21 to grow its
Returns (%) pipeline and CNG network in order to improve penetration and tap latent potential. The
1m 3m 6m 12m
current CNG network of 244 stations (of 13 in Raigarh) is planned to be augmented by ~
20-25new stations in FY20.
Absolute 10 28 18 17
Relative 4 20 10 2 View & Valuation
Source: Bloomberg We maintain our BUY rating on MAHGL with a TP of INR 1,145/sh as the stock is trading at
attractive valuations of 13.sx FY21e, given the estimated earnings CAGR ~ 17% (FY19-21e)
Shareholding pattern and ROE of ~27%.
Promoters : 33% Key financials
Public : 67% Year ended March (INRm) 2017 2018 2019 2020e 2021e
Others : 0% Revenues(INRm) 20,340 22,330 27,911 33,304 34,867
EBITDA Margin (%) 31.7 34.9 31.7 32.0 29.7
PAT(INRm) 3,934 4,779 5,464 7,677 7,449
140
PAT growth (%) 26.5 21.5 14.3 40.5 (3.0)
120 EPS (INR) 39.8 48.4 55.3 77.7 75.4
100 EPS growth (%) 26.5 21.5 14.3 40.5 (3.0)
80 P/E(x) 25.2 20.8 18.2 12.9 13.3
Mahanagar Gas NIFTY EV/EBITDA(x) 15.0 12.3 10.7 8.9 9.1
Source: Bloomberg Indexed to 100 Source: Company, Antique
Result Highlights
Comparison with estimates
(INRmn) Actual Antq Estimate % Variance Cons Estimate % Variance
Revenue 7,835.8 7,858.8 (0.3) 7,979.0 (1.8)
EBITDA 2,734.1 2,716.7 0.6 2,731.0 0.1
PBT 2,558.4 2,501.7 2.3 2,406.0 6.3
Adj net income 2,706.2 1,651.1 63.9 1,881.0 43.9
FDEPS (INR) 27.3 16.7 63.9 19.0 43.9
Quarterly earnings snapshot

(INRmn) 2QFY20 2QFY19 %ChgYoY 1QFY20 %ChgQoQ 1HFY19 1HFY18 %ChgYoY
Revenue 7,836 6,965 12.5 7,575 3.4 15,411 13,288 16.0
Expenditure 5,102 4,750 7.4 4,807 6.1 9,908 8,834 12.2
Operating profit 2,734 2,215 23.4 2,768 (1.2) 5,502 4,454 23.5
Other income 230 182 26.5 203 13.0 433 335 29.3
Interest 15 1 1,108.3 14 5.8 28 1 2,250.0
Depreciation 391 308 27.0 372 5.1 763 603 26.5
Exceptional Item - 0 - 0 (129) (100.0)
PBT 2,558 2,088 22.6 2,586 (1.1) 5,145 4,055 26.9
Tax (148) 724 (120.4) 884 (116.7) 736 1,408 (47.7)
PAT 2,706 1,363 98.5 1,702 59.0 4,409 2,647 66.5
Adj. PAT 2,706 1,363 98.5 1,702 59.0 4,409 2,732 61.4
EBITDA margin (%) 35 32 37 36 34
FDEPS (Rs) 27.4 13.8 98.5 17.2 59.0 44.6 27.7 61.4
Operational highlights
Operational performance 2QFY20 2QFY19 %ChgYoY 1QFY20 %ChgQoQ 1HFY19 1HFY18 %ChgYoY
CNG sales (mmscmd) 2.20 2.18 1.0 2.16 1.7 2.18 2.15 1.5
PNG Sales (mmscmd) 0.80 0.78 2.2 0.80 (0.7) 0.80 0.77 4.5
Total Gas Sale (mmscmd) 3.00 2.96 1.3 2.97 1.1 2.98 2.92 2.3
Avg. Realization(INR/scm) 28.14 25.36 11.0 27.78 1 22.23 22.42 (0.8)
Gross Spread (INR/scm) 14.68 12.50 17.5 15.15 (3.1) 14.92 12.74 17.1
EBITDA (INR/scm) 9.91 8.13 21.8 10.25 (3.3) 10.08 8.35 20.7
Material Cost (INR/scm) 13.71 13.08 4.8 12.89 6.4 13.30 12.14 9.6
CNG volume register a growth of 1% YoY to 2.2mmscmd;

growth impacted by disruption in domestic gas supply PNG sales registers a weak growth of 2.2% YoY; on disruption
and scrapping of buses by BEST in 1QFY20 in domestic supply and weaker industrial demand
(m m scm d) (%) (m m scm d) (%)
2.3 14 0.9 12
12 10
2.2 10
0.8 8
8
2.1 6
6
0.7 4
4
2.0
2 2
1.9 0 0.6 0
Dec-17
Mar-18
Jun-18
Dec-18
Mar-19
Jun-19
Dec-17
Mar-18
Jun-18
Dec-18
Mar-19
Jun-19
Sep-18
Sep-19
Sep-18
Sep-19
CNG sales (mmscmd) YoY Grow th (%, RHS) PNG Sales (mmscmd) YoY Grow th (%, RHS)
Source: Company, Antique Source: Company, Antique
Total gas sales registered a YoY growth of 2.8% to 3 mmscmd; EBITDA per unit QoQ lower but healthy at INR 9.9/scm as
CNG at 73.4% forms the largest component of sales sequentially higher realization takes care of increase in RM cost
(m m scm d) INR/scm ) (INR/scm )
16 16
100% 14
14 14
12
80% 12 12
10
10 10
60% 8 8 8
40% 6 6 6
4 4 4
20%
2 2 2
0% 0 0 0
Dec-17
Mar-18
Jun-18
Dec-18
Mar-19
Jun-19
Sep-18
Sep-19
Dec-17
Mar-18
Jun-18
Dec-18
Mar-19
Jun-19
Sep-18
Sep-19
CNG PNG-Dom Gross Mgn (INR/scm) EBITDA/scm

PNG-Ind/Comm YoY Grow th (LHS) Material Cost (INR/scm)
Source: Company, Antique Source: Company, Antique

Valuation
Maintain BUY; TP of INR 1,145/sh
We maintain our BUY rating on MAHGL, with a TP of INR 1145/sh, as the stock is trading at
attractive valuations of 13.3x FY21e, at a meaningful discount to its peers. Our TP is premised
upon our estimated earnings CAGR of 17% (FY19-21e), backed by a volume CAGR of 6%.
Our TP is an equally weighted average of a) P/E valuation of INR 1508 (at 20x FY21e), b)
EV/EBITDA valuation of INR 1039/sh (at 9x FY21e) and c) P/BV valuation of 889/sh (at 3x
FY21 BV).
Valuation table
Valuation -P/E
Multiple 20
Equity Value (per Sh) 1508
Market Cap 148973
Valuation -EV/EBITDA
Multiple 9
EV 93055
Debt -LT 0
Cash +Invst 9,529
Equity Value (per Sh) 1,039
Market Cap 102583
Valuation -P/BV
Multiple 3
Equity Value (per Sh) 889.0
Market Cap 87817.5
Average Market Cap 113125

Avg Value Per sh 1145
Source: Antique
Key Assumption - MGL

FY15 FY16 FY17 FY18 FY19 FY20e FY21e
CNG
Sales (mmscmd) 1.8 1.8 1.9 2.0 2.2 2.3 2.5
CNG Growth (%) 7% 2% 5% 4.5% 9.2% 4.0% 9.0%
Blended CNG price (Rs/kg) 37.2 39.4 37.1 38.1 48.6 52.9 50.3
PNG
Sales(mmscmd) 0.6 0.6 0.7 0.7 0.8 0.8 0.9
PNG Growth (%) 3% 1% 6% 7.1% 9.2% 4.4% 7.2%
Blended PNG Price (Rs/scm) 32.0 26.0 23.9 25.8 30.9 29.6 29.7
Total gas consumption (mmscmd) 2.4 2.4 2.57 2.70 2.95 3.1 3.3
EBITDA/scm 5.6 5.7 6.9 7.91 8.22 9.50 8.50
INR/USD 61.6 65.5 67 65 70 70 70
Financials
Year ended 31 Mar 2017 2018 2019 2020e 2021e Year ended 31 Mar 2017 2018 2019e 2020e 2021e
Net Revenue 20,340 22,330 27,911 33,304 34,867 PBT 6,007 7,265 8,369 10,264 9,958
Op. Expenses 13,898 14,529 19,056 22,655 24,528 Depreciation & amortisation 951 1,112 1,259 1,237 1,333
EBITDA 6,442 7,801 8,855 10,649 10,339 Interest expense 10 1 3 - -
Depreciation 951 1,112 1,259 1,237 1,333 (Inc)/Dec in working capital 82 (101) 98 (425) (50)
EBIT 5,490 6,689 7,595 9,412 9,006 Tax paid (1,895) (2,118) (2,614) (2,436) (2,359)
Other income 527 577 777 852 952 Less: Interest/Div. Income Recd. (527) (577) (777) (852) (952)
Interest Exp. 10 1 3 - - CF from operating activities 4,629 5,582 6,338 7,787 7,930
Reported PBT 6,007 7,265 8,369 10,264 9,958 Capital expenditure (2,538) (2,835) (3,705) (3,462) (3,750)
Tax 2,072 2,486 2,905 2,586 2,509 Inc/(Dec) in investments (733) (2,210) 337 (300) (300)
Reported PAT 3,934 4,779 5,464 7,677 7,449 Add: Interest/Div. Income Recd. 527 577 777 852 952
Net Profit 3,934 4,779 5,464 7,677 7,449 CF from investing activities (2,744) (4,468) (2,591) (2,910) (3,098)
Adjusted PAT 3,934 4,779 5,464 7,677 7,449 Inc/(Dec) in share capital (641) 4 1,065 (1,070) -
Adjusted EPS (INR) 39.8 48.4 55.3 77.7 75.4 Inc/(Dec) in debt 675 547 745 (141) 481
Dividend Paid (2,177) (2,182) (2,297) (4,453) (4,320)
Balance sheet (INRm) Others (10) (49) (1,200) - -
Year ended 31 Mar 2017 2018 2019 2020e 2021e CF from financing activities (2,153) (1,680) (1,687) (5,664) (3,839)
Share Capital 988 988 988 988 988 Net cash flow (268) (566) 2,061 (786) 993
Reserves & Surplus 17,413 19,966 23,001 25,156 28,284 Opening balance 1,750 1,481 919 2,988 2,202
Networth 18,400 20,954 23,989 26,143 29,272 Closing balance 1,482 915 2,979 2,202 3,195
Debt 3,905 4,452 5,197 5,056 5,537
Net deferred Tax liabilities 1,376 1,748 2,048 2,198 2,348 Growth indicators (%)
Capital Employed 23,682 27,154 31,234 33,398 37,157 Year ended 31 Mar 2017 2018 2019 2020e 2021e
Gross Fixed Assets 20,778 24,167 27,733 26,778 28,778 Revenue(%) -2.1 9.8 25.0 19.3 4.7
Accumulated Depreciation 7,775 8,887 10,146 11,383 12,717 EBITDA(%) 26.5 21.1 13.5 20.3 -2.9
Capital work in progress 4,115 3,566 3,697 8,115 9,865 Adj PAT(%) 26.5 21.5 14.3 40.5 -3.0
Net Fixed Assets 17,118 18,847 21,284 23,510 25,927 Adj EPS(%) 26.5 21.5 14.3 40.5 -3.0
Goodwill 44 39 47 46 46
Investments 4,667 6,877 6,540 6,840 7,140 Valuation (x)
Current Investments 4,667 6,877 6,540 6,840 7,140 Year ended 31 Mar 2017 2018 2019 2020e 2021e
Current Assets, Loans & Adv. 4,413 4,340 6,539 6,541 7,837 P/E 25.2 20.8 18.2 12.9 13.3
Inventory 238 240 191 407 446 P/BV 5.4 4.7 4.1 3.8 3.4
Debtors 949 916 996 1,369 1,433 EV/EBITDA 15.05 12.28 10.71 8.94 9.13
Cash & Bank balance 1,481 919 2,988 2,202 3,195 EV/Sales 4.77 4.29 3.40 2.86 2.71
Loans & advances and others 1,745 2,266 2,364 2,564 2,764 Dividend Yield (%) 1.9 1.9 2.0 3.9 3.8
Liabilities 2,273 2,750 2,964 3,267 3,461
Financial ratios
Provisions 288 199 212 272 332
Year ended 31 Mar 2017 2018 2019 2020e 2021e
RoE (%) 22.0 24.3 24.3 30.6 26.9
RoCE (%) 26.5 28.6 28.7 31.8 28.2
Application of Funds 23,682 27,154 31,234 33,398 37,157
Asset/T.O (x) 1.1 1.1 1.2 1.3 1.2
Per share data Net Debt/Equity (x) (0.1) (0.2) (0.2) (0.2) (0.2)
Year ended 31 Mar 2017 2018 2019 2020e 2021e EBIT/Interest (x) 589.9 8,073.3 2,616.3 - -
No. of shares (m) 99 99 99 99 99
Diluted no. of shares (m) 99 99 99 99 99
Margins (%)
BVPS (INR) 186.3 212.1 242.8 264.7 296.3
Year ended 31 Mar 2017 2018 2019 2020e 2021e
EBITDA Margin(%) 31.7 34.9 31.7 32.0 29.7
CEPS (INR) 49.5 59.6 68.1 90.2 88.9
EBIT Margin(%) 27.0 30.0 27.2 28.3 25.8
DPS (INR) 19.0 19.0 20.0 38.9 37.7
PAT Margin(%) 18.85 20.86 19.05 22.48 20.80
Source: Company Antique
ANTIQUE'S INDIA ECONOMIC MONITOR
CPI
Core CPI declines by 50bp; Expect rate cut in Dec policy meet
CPI reading for Oct'19 came in at 4.6% YoY, higher than expectation (of 4.4%
YoY) and Sep'19 reading (of 4.0% YoY). The higher than expected inflation
was due to sharp uptick in food inflation (especially in rural centres) - largely
driven by vegetables, pulses and meat & fish. Key positive from the Oct CPI
reading is that the rural weakness seems to be receding with YTD rural
inflation picking up from 1.2% in Jan'19 to 4.3% in Oct'19. The core CPI has
Pankaj Chhaochharia declined by ~50 bps to 3.5% due to sharp drop in price rise for miscellaneous
+91 22 4031 3340 services especially at rural centre's (overall core declined by ~270bps since
pankaj.chhaochharia@antiquelimited.com Oct'18) indicating demand weakness. With 'accommodative' monetary policy
stance and RBI focus on closing the negative output gap, we believe there is
Dhirendra Tiwari
+91 22 4031 3436
a possibility of a rate cut in the upcoming December monetary policy (overall,
dhirendra.tiwari@antiquelimited.com we expect ~50 bps repo rate cut by Mar'20).
Key highlights of Oct'19 CPI reading are
(1) Sharp drop in price rise for miscellaneous services especially at rural centre's pulled
down core inflation by 50 bps from 4.0% in Sep'19 to 3.5% in Oct'19;
(2) Rural weakness has sharply receded with YTD rural inflation increasing from 1.2% in
Jan'19 to 4.3% in Oct'19;
(3) Food & Beverage (both at urban/rural centre's) continues to be key drivers to Oct CPI
reading; while Fuel & Light (both rural and urban seeing a decline) continues to be a key
drag;
(5) Food & Beverages (both rural and urban) saw the highest MoM increase; while Rural
Pan/tobacco and Rural miscellaneous services saw the highest MoM decline to Oct CPI
reading;
(6) Sharp divergence between urban and rural exists in food & beverage, clothing & footwear
and fuel & light;
(7) Sharp rise in the food & beverage inflation to 6.9% YoY (as compared to 4.7% YoY in
previous month) - highest since July'16 due to sharp rise in prices in both rural and urban
centers. Key segments seeing sharp growth are a) vegetable and pulses (increased by
26.1% and 11.7% YoY respectively) which is emerging out of prolonged deflationary
pressure); and b) Meat & fish (increased by 9.7%) due to lower base;
8) Miscellaneous services saw a sharp MoM decline in price rise mainly due to household
goods & services, health and personal care & effects (especially at rural centre's);
CPI summary
12.0
10.0
8.0
(%, YoY)
6.0
4.0
2.0
0.0
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Apr-12
Apr-13
Apr-14
Apr-15
Apr-16
Apr-17
Apr-18
Apr-19
CPI Core CPI

Source: Mospi, Bloomberg, Antique
Segment-wise summary
(%, yoy) Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19
CPI 3.0 3.0 3.2 3.1 3.2 4.0 4.6
Food inflation 1.4 2.0 2.4 2.3 3.0 4.7 6.9
Cereals 1.2 1.2 1.3 1.3 1.3 1.7 2.2
Fish & meat 9.0 9.1 8.5 10.3 9.7
Eggs 1.9 1.8 1.6 0.6 0.3 3.3 6.3
Milk and products 0.4 0.4 0.7 1.1 1.4 1.7 3.1
Fruits -4.9 -5.2 -4.2 -0.9 -0.7 0.8 4.1
Vegetables 2.9 5.5 4.7 2.8 6.9 15.4 26.1
Pulses & products -0.9 2.1 5.7 6.8 6.9 8.4 11.7
Fuel & light 2.6 2.5 2.2 -0.3 -1.7 -2.2 -2.0
Clothing & footwear 2.0 1.8 1.5 1.4 1.2 1.0 1.6
Housing 4.8 4.8 4.8 4.9 4.8 4.7 4.6
Miscellaneous 5.1 4.6 4.5 4.7 4.7 4.5 3.4
Household goods & services 5.1 4.6 4.3 4.0 3.7 3.5 2.4
Health 8.4 8.0 8.2 8.0 7.8 7.7 5.6
Transport & comm 2.5 1.6 0.7 1.6 1.2 0.1 -0.5
Recreation and amusement 5.6 5.6 5.3 5.6 5.5 5.1 5.0
Education 6.9 6.7 6.8 6.4 6.1 6.2 6.1
Personal care and effects 3.1 2.7 3.2 4.3 6.4 6.7 5.5
Core CPI 4.5 4.2 4.1 4.3 4.2 4.0 3.5
Source: Mospi, Bloomberg, Antique
Valuation Guide
Company Reco CMP TP Return M.Cap M.Cap Net profit (INRbn) EPS (INR) P/E (x) EV/EBITDA (x) P/BV (x) RoE (%) RoCE (%) Absolute (%)
(INR) (INR) (%) (INRbn) ( U S D b n ) FY19 FY20 FY21 FY19 FY20 FY21 FY19 FY20 FY21 FY19 FY20 FY21 FY20 FY20 FY20 1m 12m
AGROCHEM
Bayer Cropscience Buy 3,341 3,770 13 114.7 1.6 2.4 2.6 5.6 70.7 75.4 125.6 47.3 44.3 26.6 28.5 29.0 14.7 5.4 13.0 17.9 0 -16
Dhanuka Agri Buy 298 470 58 14.2 0.2 1.1 1.3 1.5 23.7 26.7 31.4 12.6 11.2 9.5 9.7 8.2 6.3 1.9 18.4 23.0 -1 -27
PI Industries Hold 1,416 1,170 (17) 195.5 2.7 4.1 5.1 6.6 29.7 36.8 48.1 47.6 38.5 29.4 33.8 26.0 19.9 7.2 20.3 26.5 6 69
Rallis India Buy 170 190 12 33.1 0.5 1.6 1.8 2.0 8.0 9.1 10.5 21.3 18.8 16.1 13.4 11.7 9.9 2.4 13.2 17.0 -3 0
Sharda Cropchem Hold 261 290 11 23.5 0.3 2.0 1.5 1.8 19.5 17.0 20.4 13.3 15.3 12.8 5.8 5.9 4.7 1.7 11.4 15.5 -5 -18
UPL Buy 541 650 20 413.5 5.7 22.8 26.7 35.5 29.7 34.9 46.4 18.2 15.5 11.7 14.9 8.3 6.9 2.5 17.2 11.2 -8 7
AUTOMOBILES
Apollo Tyres Buy 164 196 20 93.6 1.3 9.0 5.1 7.5 15.4 8.9 13.1 10.6 18.4 12.5 7.0 8.0 6.6 0.9 5.0 5.0 -4 -27
Ashok Leyland Hold 81 80 (1) 236.6 3.3 20.4 12.7 10.8 7.0 4.3 3.7 11.6 18.6 21.9 7.3 10.0 10.7 2.7 14.7 13.2 19 -24
Atul Auto Buy 221 288 31 4.8 0.1 0.5 0.5 0.5 23.7 23.5 22.2 9.3 9.4 10.0 5.6 5.8 6.1 1.7 19.0 28.5 2 -34
Bajaj Auto Buy 3,206 3,729 16 927.7 12.9 43.3 47.3 53.9 149.7 163.5 186.4 21.4 19.6 17.2 18.4 19.0 16.3 3.8 19.5 25.3 8 20
Bharat Forge Hold 428 402 (6) 199.4 2.8 10.3 9.7 10.4 22.2 20.7 22.3 19.3 20.7 19.2 10.9 12.4 11.7 3.5 16.9 14.7 0 -27
Ceat Hold 972 1,020 5 39.3 0.5 3.0 2.4 2.8 73.4 59.4 68.0 13.2 16.4 14.3 8.3 8.6 7.2 1.3 8.4 9.1 4 -22
Eicher Motors Buy 21,352 26,213 23 582.7 8.1 22.2 22.1 26.7 817.5 813.9 984.5 26.1 26.2 21.7 17.4 19.2 14.9 5.5 22.6 26.9 17 -8
Endurance Tech Sell 1,072 673 (37) 150.7 2.1 5.2 6.2 6.3 36.7 44.4 44.8 29.2 24.1 23.9 13.3 11.4 10.3 4.8 19.9 23.8 8 -12
Escorts Buy 652 755 16 79.9 1.1 4.7 4.4 5.4 55.4 51.5 62.9 11.8 12.7 10.4 10.4 11.2 9.1 1.6 12.9 15.5 6 -1
Hero MotoCorp Hold 2,589 2,556 (1) 517.1 7.2 33.8 32.6 31.9 169.5 163.3 159.8 15.3 15.9 16.2 10.5 11.3 11.3 3.5 22.2 28.7 -1 -9
Mahindra & Mahindra Buy 575 715 24 714.5 9.9 48.3 44.8 45.6 38.8 36.1 36.7 14.8 15.9 15.7 10.6 10.8 10.2 1.9 12.0 10.9 1 -25
Mahindra CIE Buy 144 211 46 54.5 0.8 5.5 4.3 5.0 14.5 11.3 13.3 9.9 12.8 10.8 5.9 7.3 6.0 1.2 9.4 10.5 -1 -45
Maruti Suzuki Sell 7,155 5,405 (24) 2,161.3 30.0 75.0 59.9 74.2 248.4 198.3 245.7 28.8 36.1 29.1 19.4 23.8 19.6 4.4 12.6 16.5 5 -3
Minda Corp Buy 92 109 20 20.8 0.3 1.5 1.4 1.7 6.6 6.4 7.3 13.8 14.3 12.5 7.7 9.0 7.8 1.5 12.1 11.3 12 -30
Minda Industries Hold 327 357 9 85.7 1.2 2.9 3.3 4.7 10.9 12.5 17.8 30.1 26.1 18.3 13.2 11.3 8.8 4.3 16.5 16.4 -8 -8
Motherson Sumi Hold 134 124 (7) 424.5 5.9 16.1 16.0 21.6 5.1 5.1 6.8 26.3 26.5 19.7 9.4 8.7 6.9 3.5 14.0 11.8 36 -12
Schaeffler India Ltd Hold 4,258 4,309 1 133.1 1.8 4.6 4.2 4.8 148.1 134.4 153.9 28.7 31.7 27.7 16.9 18.9 16.5 4.3 14.6 19.0 3 -23
SKF India Buy 2,150 2,451 14 110.4 1.5 3.4 3.5 4.3 67.9 70.3 87.5 31.7 30.6 24.6 21.7 23.3 18.6 5.4 18.9 25.0 2 16
Tata Motors Buy 171 197 15 532.5 7.4 17.3 -11.5 17.4 5.1 -3.4 5.1 33.5 -50.3 33.2 4.7 4.9 4.2 1.0 -2.0 2.2 33 -4
Timken India Buy 871 978 12 65.5 0.9 1.5 2.1 2.5 19.8 28.3 32.6 44.1 30.8 26.7 22.1 17.5 15.2 4.3 14.9 18.8 13 68
TVS Motors Buy 460 544 18 218.4 3.0 6.7 8.3 10.3 14.1 17.4 21.7 32.6 26.4 21.1 16.2 13.3 10.9 5.7 21.7 25.2 16 -17
BUILDING MATERIALS
Astral Poly Technik Hold 1,082 740 (32) 163.0 2.3 2.0 2.8 3.7 16.7 18.8 24.6 64.7 57.6 44.1 42.6 33.9 26.8 10.6 20.1 25.9 -7 32
Cera Sanitaryware Hold 2,512 3,080 23 32.7 0.5 1.2 1.5 1.8 88.6 116.0 140.4 28.4 21.7 17.9 16.1 13.5 11.3 3.9 19.7 23.7 2 3
Finolex Industries Hold 586 580 (1) 72.7 1.0 4.0 3.8 4.5 32.2 30.8 36.4 18.2 19.0 16.1 11.8 13.4 11.4 2.6 14.3 17.2 0 15
Greenlam Industries Hold 1,014 850 (16) 24.5 0.3 0.8 0.8 1.0 31.9 35.1 42.0 31.7 28.9 24.1 16.8 14.6 12.4 4.9 18.2 17.7 17 10
Kajaria Ceramics Buy 520 590 13 82.7 1.1 2.3 3.1 3.7 14.6 19.2 23.5 35.7 27.0 22.1 18.1 16.7 13.1 4.5 18.0 19.9 -7 17
Somany Ceramics Buy 184 260 42 7.8 0.1 0.6 0.7 0.9 13.8 17.2 21.4 13.3 10.7 8.6 7.6 6.0 4.9 1.2 11.4 10.9 -5 -40
Supreme Industries Hold 1,132 1,110 (2) 143.8 2.0 3.5 4.9 5.6 27.3 38.6 44.2 41.5 29.3 25.6 19.8 18.2 15.2 6.0 21.6 23.2 -6 16
CEMENT
ACC Hold 1,494 1,715 15 280.6 3.9 10.6 14.0 14.3 56.6 74.3 76.2 26.4 20.1 19.6 11.8 9.7 9.5 2.4 12.6 19.0 2 1
Ambuja Cement Hold 195 215 10 387.7 5.4 12.4 13.8 14.5 6.3 6.9 7.3 31.1 28.1 26.7 18.8 16.2 15.4 1.8 6.4 9.0 1 -8
Dalmia Bharat Buy 822 1,180 44 158.5 2.2 2.6 2.6 5.0 13.7 13.2 25.8 59.9 62.1 31.9 10.0 8.5 7.4 1.5 2.4 5.0 1
Grasim Industries Buy 740 945 28 486.5 6.7 25.7 23.5 26.0 39.2 35.8 39.5 18.9 20.7 18.7 11.8 13.9 12.0 1.1 5.5 7.0 6 -16
JK Lakshmi Cement Buy 301 450 50 35.4 0.5 0.8 2.2 2.7 6.8 18.8 23.3 44.5 16.0 12.9 11.5 7.5 6.4 2.0 13.6 14.7 6 12
Orient Cement Buy 75 115 52 15.5 0.2 0.5 1.4 1.8 2.3 6.8 8.7 32.4 11.1 8.7 9.0 5.9 5.4 1.3 12.5 12.6 -11 -12
Shree Cements Hold 19,744 19,700 (0) 687.8 9.5 12.0 15.0 18.9 345.0 429.6 543.2 57.2 46.0 36.3 25.0 18.6 15.5 6.3 14.6 17.6 6 29
UltraTech Cement Buy 4,116 5,040 22 1,187.8 16.5 24.1 36.6 45.5 87.8 126.8 157.6 46.9 32.4 26.1 20.5 14.5 12.5 3.2 11.2 12.4 -1 5
FMCG & RETAIL
Asian Paints Buy 1,770 1,894 7 1,698.2 23.5 22.1 29.0 36.3 23.1 30.3 37.9 76.8 58.5 46.7 47.9 37.7 30.3 14.8 27.6 32.7 -2 34
Bajaj Consumer Care Buy 245 373 53 36.1 0.5 2.3 2.5 2.8 15.3 16.9 18.7 16.0 14.5 13.1 12.1 11.5 10.4 7.6 52.0 60.2 6 -30
Colgate Palmolive Hold 1,561 1,446 (7) 424.5 5.9 7.5 8.5 9.8 27.4 31.3 36.2 57.0 49.9 43.2 34.1 32.2 28.1 27.3 56.8 75.9 3 41
Avenue Supermarts Buy 1,960 1,833 (6) 1,223.2 17.0 9.4 13.1 17.5 15.0 21.0 28.0 130.6 93.3 70.1 74.6 58.8 44.9 17.7 19.0 24.0 7 42
Emami BUY 325 424 30 147.4 2.0 5.6 5.8 6.4 12.4 12.7 14.1 26.3 25.6 23.0 20.2 18.5 16.3 6.1 25.7 31.4 6 -26
Future Consumer BUY 24 50 109 46.2 0.6 -0.1 -0.5 -0.2 0.0 -0.3 -0.1 -576.7 -86.4 -266.2 53.2 44.4 27.3 4.7 -5.3 3.9 1 -54
Future Lifestyle BUY 393 561 43 79.2 1.1 1.9 2.2 2.8 9.7 11.2 14.2 40.5 35.2 27.8 15.9 13.5 11.0 3.8 11.3 15.2 -2 2
Future Retail Buy 349 666 91 175.4 2.4 7.3 7.1 9.4 14.6 14.2 18.7 23.9 24.5 18.7 19.3 14.5 11.0 3.9 17.0 18.5 -8 -34
Godrej Consumer Buy 729 777 7 745.6 10.3 14.8 17.5 20.2 14.4 17.1 19.7 50.5 42.5 37.0 35.0 30.0 25.9 8.7 22.1 23.4 6 2
Hindustan Unilever Hold 2,091 0 1,840 (12) 4,526.6 62.8 60.8 70.9 83.2 28.1 32.8 38.5 74.3 63.7 54.3 51.7 43.6 37.9 54.6 89.1 128.8 4 22
ITC Buy 254 382 50 3,119.5 43.3 124.6 153.6 171.4 10.2 12.5 14.0 25.0 20.3 18.2 17.7 15.8 14.1 4.9 25.6 33.2 4 -8
Jyothy Labs Buy 177 205 16 65.1 0.9 2.1 2.2 2.5 5.6 6.0 6.8 31.7 29.4 25.9 22.5 19.9 17.5 5.0 16.9 21.5 11 -5
Kansai Nerolac Hold 542 530 (2) 291.9 4.0 4.7 6.2 7.1 8.7 11.5 13.3 62.5 47.1 40.8 38.8 31.6 27.0 7.7 17.2 22.4 6 29
Marico Hold 366 412 12 473.1 6.6 9.3 11.4 13.3 7.2 8.8 10.3 50.8 41.5 35.6 36.5 28.7 24.5 13.6 35.1 46.1 -5 5
Nestle HOLD 14,233 13,045 (8) 1,372.3 19.0 17.5 20.6 25.2 181.4 214.0 260.9 78.5 66.5 54.6 48.5 44.6 37.3 30.3 50.3 69.9 0 39
Shoppers Stop Hold 362 409 13 31.8 0.4 0.8 0.6 0.6 9.0 7.0 6.6 40.4 51.7 55.1 12.3 5.2 4.3 3.1 6.1 31.4 -13 -28
Trent Buy 502 600 19 178.6 2.5 1.3 1.8 2.2 3.9 5.5 6.7 130.2 92.0 74.9 76.6 27.9 22.1 5.9 6.5 16.4 -1 51
V-Mart Retail Hold 1,680 1,979 18 30.5 0.4 0.7 0.6 0.9 39.4 31.4 49.5 42.6 53.6 34.0 22.4 14.1 10.8 6.6 13.0 27.7 -18 -24
V2 Retail Buy 119 204 72 4.0 0.1 0.5 0.2 0.3 13.8 5.6 7.4 8.6 21.1 16.0 8.7 3.9 3.1 1.3 6.1 16.9 -6 -55
Valuation Guide
Company Reco CMP TP Return M.Cap M.Cap Net profit (INRbn) EPS (INR) PE (x) EV/EBITDA (x) P/BV (x) RoE (%) RoCE (%) Absolute (%)
INDUSTRIALS & ENGINEERING

ABB Hold 1,498 1,510 1 317.4 4.4 5.1 6.6 8.0 24.1 31.2 37.9 62.1 48.0 39.6 34.1 28.6 24.2 8.9 25.7 17.1 1 16
Bajaj Elec. Hold 326 305 (6) 33.4 0.5 1.7 0.5 1.6 16.3 5.2 15.3 20.0 63.2 21.3 14.1 23.0 14.4 3.0 4.8 8.0 -15 -35
BEML Buy 961 1,125 17 40.0 0.6 0.6 1.9 2.6 15.1 44.7 62.5 63.6 21.5 15.4 18.4 12.5 9.7 1.7 8.2 12.1 8 36
Bharat Electronics Buy 109 138 27 265.8 3.7 19.3 17.6 19.8 7.9 7.2 8.1 13.8 15.1 13.4 9.2 9.0 7.9 2.7 18.7 27.2 0 14
BHEL Hold 55 51 (7) 190.1 2.6 12.2 9.0 17.6 3.5 2.6 5.1 15.6 21.1 10.8 6.6 9.0 5.1 0.6 2.8 5.2 27 -17
Blue Star Hold 797 755 (5) 76.8 1.1 1.9 2.3 2.9 19.7 23.9 30.2 40.4 33.4 26.4 22.9 22.5 17.7 7.9 24.8 33.5 -1 38
Crompton Consumer Hold 259 291 12 162.5 2.3 3.7 4.6 5.5 6.0 7.4 8.8 43.4 35.0 29.4 28.1 26.1 21.6 11.9 37.7 43.5 2 25
Cummins India Hold 566 575 2 156.8 2.2 7.2 6.2 7.3 26.1 22.4 26.2 21.7 25.3 21.6 17.7 23.0 19.1 3.6 14.6 18.3 -1 -28
Engineers India Buy 102 137 35 64.3 0.9 3.7 4.7 5.4 5.9 7.4 8.6 17.4 13.7 11.9 10.3 9.5 7.0 2.5 19.5 29.8 -4 -13
GE T&D Hold 179 151 (16) 45.8 0.6 2.1 0.6 1.5 8.3 2.2 6.0 21.6 80.3 29.7 10.8 21.1 13.2 3.2 4.0 9.1 6 -22
Havells India Hold 674 707 5 422.0 5.9 7.9 8.9 11.1 12.7 14.3 17.7 53.3 47.2 38.2 34.3 31.9 25.8 8.8 19.8 24.8 3 0
Hitachi Home & Life Buy 1,914 2,390 25 52.0 0.7 0.9 1.3 1.9 31.6 48.9 68.3 60.6 39.1 28.0 32.7 25.0 18.3 7.1 19.7 21.6 -3 8
Honeywell Automation Buy 27,518 31,150 13 243.3 3.4 3.6 4.9 6.1 405.9 558.2 692.2 67.8 49.3 39.8 45.9 35.9 29.2 10.9 24.8 36.2 -4 34
KEC International Buy 278 371 34 71.4 1.0 4.9 6.7 7.9 18.9 25.9 30.9 14.7 10.7 9.0 7.6 6.6 5.7 2.4 24.4 25.7 -1 -1
Kirloskar Pneumatic Buy 137 225 64 8.8 0.1 0.6 0.7 1.0 8.6 11.3 15.0 15.9 12.2 9.1 9.7 7.6 6.2 1.6 14.1 18.9 -6 -13
Lakshmi Machine Works Hold 3,315 3,023 (9) 35.4 0.5 2.2 0.8 1.7 193.7 73.8 151.1 17.1 44.9 21.9 10.9 33.8 12.1 1.4 3.9 10.2 1 -45
Larsen & Toubro Buy 1,393 1,730 24 1,954.8 27.1 86.1 101.3 125.3 61.5 72.3 89.5 22.7 19.3 15.6 18.9 16.5 13.6 1.6 14.2 8.9 -2 1
Siemens Buy 1,635 1,792 10 582.1 8.1 11.9 16.0 19.0 33.5 44.8 53.4 48.7 36.5 30.6 33.8 27.5 22.7 6.6 18.7 25.8 4 85
Techno Electric Buy 266 320 20 29.2 0.4 1.7 2.1 2.3 15.5 19.0 20.4 17.1 13.9 13.0 11.4 9.2 8.6 2.0 15.0 19.2 -1
Thermax Hold 1,071 1,158 8 127.7 1.8 3.9 4.6 5.5 32.6 38.4 46.3 32.9 27.9 23.1 27.5 21.8 18.1 3.8 14.4 19.3 -4 4
Voltas Buy 702 710 1 232.3 3.2 5.2 6.3 8.2 15.6 19.0 24.8 45.0 36.9 28.3 38.0 31.0 25.2 5.1 14.5 25.2 4 29
IT
Cyient Hold 400 490 23 44.0 0.6 4.7 5.0 5.4 42.4 43.9 48.3 9.4 9.1 8.3 5.8 5.2 4.2 1.6 18.2 21.2 -13 -39
HCL Tech Buy 1,139 1,190 5 1,544.6 21.4 101.7 104.3 118.9 73.6 75.8 86.5 15.5 15.0 13.2 10.6 8.8 7.9 3.1 22.7 28.4 5 14
Hexaware Tech Hold 330 340 3 98.5 1.4 5.8 6.6 7.0 19.9 22.5 23.8 16.6 14.7 13.9 12.3 10.8 9.6 3.6 26.6 32.9 -11 4
Infosys Buy 691 850 23 2,944.1 40.8 154.1 165.9 183.3 35.4 38.5 42.6 19.5 18.0 16.2 12.9 11.9 10.8 3.9 22.4 30.5 -12 6
Larsen Toubro Infotech Buy 1,650 1,750 6 287.0 4.0 15.3 15.7 17.8 89.0 90.8 102.6 18.5 18.2 16.1 15.0 14.0 12.0 5.0 29.6 41.8 11 -1
Mphasis Buy 891 1,080 21 166.1 2.3 10.7 11.7 13.2 56.1 62.9 71.1 15.9 14.2 12.5 11.7 9.7 8.5 2.9 21.4 26.9 -1 -7
NIIT Tech Buy 1,483 1,500 1 92.6 1.3 4.1 5.1 6.2 66.4 83.5 100.3 22.3 17.8 14.8 12.9 10.4 8.4 3.9 23.3 31.8 6 29
Persistent Sys Hold 625 610 (2) 47.7 0.7 3.5 3.8 4.1 44.0 47.8 51.8 14.2 13.1 12.1 5.9 5.4 4.6 1.9 15.3 21.3 7 15
TCS Hold 2,179 2,060 (5) 8,174.9 113.3 314.7 324.0 353.8 83.0 86.3 94.3 26.2 25.2 23.1 19.6 18.6 16.8 7.5 32.6 42.7 10 18
TeamLease Buy 2,508 3,150 26 42.9 0.6 1.0 1.3 1.8 57.5 78.6 103.3 43.6 31.9 24.3 42.1 29.3 22.0 6.4 22.2 24.1 -18 -10
Tech Mahindra Hold 757 720 (5) 730.6 10.1 43.6 43.9 46.8 48.3 49.7 55.4 15.7 15.2 13.7 10.3 10.2 8.9 2.8 19.9 25.0 5 8
Wipro Hold 253 250 (1) 1,445.9 20.0 102.2 95.6 106.2 15.0 16.4 17.7 16.9 15.4 14.3 9.3 10.0 8.9 2.4 16.1 18.4 4 4
LOGISTICS
Adani Ports Buy 371 450 21 767.9 10.6 44.4 49.3 54.7 21.4 24.3 26.9 17.3 15.3 13.8 13.8 11.8 10.3 2.8 19.3 15.8 -9 12
Allcargo Logistics Buy 97 130 35 23.7 0.3 2.4 2.6 3.1 9.8 10.7 12.7 9.8 9.1 7.6 6.0 5.1 4.0 1.1 12.5 13.9 -2 -9
Arshiya Ltd Buy 18 78 337 4.3 0.1 -1.5 1.4 3.3 -12.6 11.2 26.7 -1.4 1.6 0.7 51.0 23.6 12.7 0.5 15.4 12.6 3 -50
Blue Dart Express Hold 2,183 2,465 13 51.8 0.7 0.9 1.0 1.7 36.9 43.5 70.4 59.1 50.1 31.0 29.2 28.0 18.4 7.1 14.9 18.5 -5 -26
ConCor Buy 577 625 8 351.6 4.9 9.7 10.4 13.1 15.9 17.1 21.5 36.2 33.8 26.8 24.3 19.4 15.7 3.3 9.8 12.7 0 8
Gateway Distiparks Hold 84 127 52 9.1 0.1 0.6 0.2 0.7 5.3 2.1 6.4 15.8 39.5 13.1 21.2 5.8 5.0 0.7 1.7 9.4 -12 -47
Navkar Corp. Buy 34 70 106 5.1 0.1 0.5 0.8 1.1 3.5 5.5 7.2 9.7 6.2 4.7 5.9 4.7 3.7 0.3 4.6 7.1 0 -45
Transport Corp. Buy 273 370 36 21.0 0.3 1.5 1.6 2.0 19.0 21.3 26.4 14.4 12.8 10.3 10.2 9.3 7.5 2.0 16.9 15.4 -4 -1
VRL Logistics Hold 267 300 13 24.1 0.3 0.9 1.1 1.4 10.2 12.3 15.1 26.2 21.7 17.7 10.4 7.4 6.3 3.4 16.4 19.9 1 -10
METALS & MINING
Hindalco Industries Buy 193 211 9 433.8 6.0 55.0 65.2 68.4 24.7 29.3 30.8 7.8 6.6 6.3 5.4 5.1 4.7 0.7 10.9 11.0 2 -16
Hindustan Zinc Buy 209 241 16 881.4 12.2 79.6 79.5 84.7 18.8 18.8 20.1 11.1 11.1 10.4 6.8 6.1 5.4 2.3 22.2 28.5 0 -21
Jindal Steel & Power Buy 142 173 21 145.0 2.0 -1.7 -1.6 12.4 -1.6 -1.6 12.2 -86.5 -91.1 11.6 6.5 6.5 5.1 0.4 -0.5 4.8 43 -19
JSW Steel Hold 249 235 (5) 601.3 8.3 76.4 46.6 64.2 31.6 19.3 26.6 7.9 12.9 9.4 5.6 7.7 6.5 1.6 12.9 11.2 12 -27
MOIL Buy 146 202 38 37.7 0.5 4.7 5.3 5.4 18.4 20.5 20.9 8.0 7.1 7.0 2.3 1.9 1.5 1.1 16.2 21.8 10 -15
NALCO Buy 44 53 22 81.2 1.1 17.3 8.9 7.9 9.3 4.8 4.2 4.7 9.2 10.3 1.7 3.2 3.7 0.8 8.4 10.0 8 -35
NMDC Buy 101 153 52 308.6 4.3 46.4 52.0 56.5 15.2 17.0 18.5 6.6 5.9 5.5 3.9 4.0 3.5 1.1 18.8 24.4 3 -7
SAIL Hold 38 41 8 156.3 2.2 27.4 19.6 20.9 6.6 4.8 5.0 5.7 8.0 7.5 6.6 7.3 6.9 0.4 4.8 6.4 16 -41
Tata Steel Buy 398 448 13 451.4 6.3 104.0 53.4 74.4 86.4 44.4 61.7 4.6 9.0 6.4 4.8 6.7 5.9 0.7 7.6 8.5 15 -32
Valuation Guide
Company Reco CMP TP Return M.Cap M.Cap Net profit (INRbn) EPS (INR) PE (x) EV/EBITDA (x) P/BV (x) RoE (%) RoCE (%) Absolute (%)
OIL & GAS

BPCL Hold 510 560 10 1,106.5 15.3 71.3 57.8 66.3 32.9 26.6 30.6 15.5 19.2 16.7 11.1 12.2 11.1 2.5 15.1 14.5 5 61
Castrol India Buy 145 230 59 143.0 2.0 7.1 7.8 9.0 7.2 7.9 9.1 20.2 18.3 15.9 12.7 12.1 11.2 11.3 64.6 92.0 8 -4
GAIL India Buy 124 175 41 558.6 7.7 62.4 67.0 69.1 13.8 14.9 15.3 8.9 8.3 8.1 5.8 6.0 6.0 1.2 14.5 17.0 -2 -30
Gujarat Gas Buy 199 270 36 136.7 1.9 4.2 7.3 9.2 6.2 10.6 13.3 32.2 18.7 14.9 15.7 10.8 8.8 4.8 29.2 21.7 14 59
Gujarat State Petronet Hold 217 250 15 122.4 1.7 8.0 9.8 10.2 14.1 17.4 18.2 15.3 12.5 11.9 9.3 8.7 8.2 1.9 15.9 17.6 3 19
Gulf Oil Lubricants Buy 809 1,140 41 40.5 0.6 1.8 2.4 2.8 35.7 48.3 57.1 22.6 16.7 14.2 14.3 12.0 10.1 5.4 36.2 34.5 -8 3
HPCL Hold 291 390 34 443.9 6.2 60.3 38.9 51.8 39.6 25.5 34.0 7.4 11.4 8.6 5.6 8.4 7.0 1.5 13.3 10.8 -6 20
Indian Oil Corp Hold 134 185 38 1,260.1 17.5 177.4 162.6 175.1 18.3 16.7 18.0 7.3 8.0 7.4 5.7 5.6 5.4 1.1 14.4 14.1 -8 -8
Indraprastha Gas Buy 423 430 2 296.2 4.1 8.4 11.7 13.7 12.0 16.8 19.5 35.2 25.3 21.6 22.1 18.9 15.3 5.8 24.8 27.3 12 57
Mahanagar Gas Buy 1,003 1,145 14 99.1 1.4 5.5 6.9 7.5 55.3 70.1 75.8 18.1 14.3 13.2 10.7 9.9 9.1 3.8 27.8 28.8 6 19
Oil India Buy 161 255 59 174.3 2.4 39.6 47.4 48.6 34.9 41.8 42.8 4.6 3.8 3.8 3.4 3.0 2.8 0.6 15.2 16.2 5 -21
ONGC Buy 138 215 56 1,738.6 24.1 320.9 349.9 368.5 25.5 27.8 29.3 5.4 5.0 4.7 3.6 4.0 3.6 0.7 15.2 13.3 2 -14
Petronet LNG Hold 279 305 9 418.1 5.8 21.6 25.9 29.9 14.4 17.2 19.9 19.4 16.2 14.0 11.8 9.4 8.4 3.9 24.9 32.1 10 32
Reliance Industries Buy 1,472 1,555 6 9,333.1 129.4 398.4 457.4 555.3 67.3 77.3 93.8 21.9 19.1 15.7 13.8 12.6 10.7 2.0 11.2 10.5 8 34
PHARMA
Alembic Pharma Hold 570 580 2 107.4 1.5 5.8 6.7 5.9 31.0 35.7 31.1 18.4 15.9 18.3 13.4 11.2 11.2 3.3 22.5 22.1 6 -3
Alkem Labs Buy 2,066 2,240 8 247.0 3.4 7.7 10.4 12.2 64.7 87.1 102.0 31.9 23.7 20.3 22.0 17.5 14.3 3.9 17.8 19.8 6 7
Cadila Healthcare Buy 225 300 33 230.1 3.2 18.5 13.2 16.9 18.1 10.9 16.6 12.4 20.6 13.6 9.8 11.1 9.6 2.1 12.3 10.4 -3 -39
Cipla Buy 448 570 27 361.1 5.0 15.3 17.5 21.2 19.0 21.7 26.3 23.6 20.6 17.0 12.2 10.8 9.5 2.2 11.1 13.1 2 -14
Dr Reddy's Lab Buy 2,763 3,100 12 458.9 6.4 18.0 20.2 25.6 108.5 121.9 154.2 25.5 22.7 17.9 14.9 13.1 10.3 2.8 13.3 14.5 4 13
Lupin Hold 730 710 (3) 330.7 4.6 9.5 11.5 14.6 21.0 25.5 32.4 34.8 28.6 22.6 14.1 12.0 10.2 2.3 8.2 10.7 2 -13
Natco Buy 560 740 32 101.9 1.4 6.4 6.5 6.3 34.9 36.0 35.0 16.1 15.6 16.0 12.8 12.2 12.8 2.5 17.3 20.8 0 -22
Strides Shasun Buy 391 510 30 35.0 0.5 0.6 3.0 3.3 6.6 33.3 37.1 59.4 11.7 10.5 12.9 8.5 6.5 1.2 10.9 8.1 16 -15
Torrent Pharma Buy 1,773 1,890 7 299.9 4.2 4.4 9.6 11.4 25.8 56.4 67.1 68.8 31.4 26.4 17.7 15.8 13.8 5.7 19.0 15.9 4 7
INFRASTRUCTURE
Ashoka Buildcon Buy 94 146 55 26.4 0.4 3.3 3.3 3.7 11.9 11.8 13.1 7.9 8.0 7.2 6.5 5.8 5.8 1.1 14.3 11.8 -4 -27
Dilip Buildcon Buy 409 602 47 56.0 0.8 7.6 7.0 7.9 55.9 51.0 57.4 7.3 8.0 7.1 4.0 4.2 3.6 1.4 19.5 23.4 7 -13
Gayatri Projects Hold 95 191 101 17.8 0.2 2.1 2.4 3.0 11.3 12.7 15.9 8.4 7.5 6.0 6.2 5.3 4.5 1.0 14.5 16.6 -14 -47
IRB Infra Buy 73 121 66 25.7 0.4 8.5 8.2 7.4 24.2 23.4 21.2 3.0 3.1 3.5 4.9 6.7 6.7 0.4 12.4 10.5 22 -48
KNR Constructions Ltd. Buy 231 347 50 32.5 0.5 2.7 2.3 2.9 19.0 16.7 20.7 12.2 13.8 11.1 7.9 8.6 7.1 2.0 15.4 21.9 2 22
NBCC Hold 39 45 16 70.5 1.0 3.8 4.9 5.4 2.1 2.7 3.0 18.8 14.5 13.0 11.4 9.7 10.9 2.9 21.0 13.9 20 -40
NCC Ltd. Buy 56 80 42 33.7 0.5 6.2 4.1 6.0 10.4 6.9 10.0 5.4 8.2 5.6 3.4 4.6 3.7 0.6 8.2 15.4 17 -36
NTPC Buy 118 161 36 1,170.5 16.2 124.2 146.9 161.6 12.5 14.8 16.3 9.4 8.0 7.2 9.8 9.1 8.2 1.0 12.8 8.0 0 -10
RITES Buy 288 378 31 71.9 1.0 4.4 5.0 5.6 22.2 25.2 27.8 12.9 11.4 10.4 7.6 7.2 6.7 2.3 20.4 16.1 7 14
Sadbhav Engg. Buy 119 211 78 20.4 0.3 1.9 2.1 2.8 10.9 12.0 16.5 10.9 9.9 7.2 7.1 6.6 4.7 0.9 9.6 12.1 -10 -47
Sadbhav Infra Buy 40 76 91 13.9 0.2 -2.0 0.6 1.4 -5.6 1.7 4.0 -7.1 23.4 10.0 7.8 5.6 4.6 2.3 10.4 14.9 -10 -62
Welspun Ent. Buy 82 132 60 12.2 0.2 1.3 1.7 2.1 9.0 11.4 14.0 9.1 7.2 5.9 6.4 4.7 3.6 0.7 10.4 13.7 -11 -34
MIDCAPS - OTHER
APL Apollo Tubes Buy 1,499 1,787 19 36.3 0.5 1.5 1.9 3.1 62.2 80.4 129.8 24.1 18.6 11.5 11.3 10.4 7.6 3.0 17.7 17.7 11 19
CCL Products Buy 200 300 50 26.6 0.4 1.5 1.6 2.0 11.6 11.7 15.0 17.1 17.1 13.3 12.1 10.8 8.8 2.8 17.5 16.7 -16 -26
Deepak Nitrite Buy 362 425 17 49.4 0.7 1.7 3.2 3.8 12.7 23.5 28.1 28.4 15.4 12.9 14.6 8.7 7.8 3.6 26.4 22.9 19 36
Ganesha Ecosphere Buy 263 440 67 5.7 0.1 0.6 0.8 0.8 28.4 36.9 37.0 9.3 7.1 7.1 4.9 4.6 4.3 1.2 17.6 18.6 9 -3
Himadri Chemicals Buy 67 145 117 27.9 0.4 3.2 3.3 4.3 7.7 8.0 10.3 8.6 8.3 6.5 5.7 5.3 4.1 1.4 18.7 23.2 -11 -49
Indian Hume Pipe Buy 237 399 69 11.5 0.2 0.8 1.2 1.5 16.1 24.0 31.3 14.7 9.9 7.6 8.5 7.2 5.8 1.9 20.5 20.2 -9 -17
Mold-Tek Packaging Buy 278 380 37 7.7 0.1 0.3 0.4 0.5 11.5 14.6 19.1 24.1 19.0 14.6 12.4 10.7 8.7 3.5 19.8 14.9 -8 7
Oberoi Realty Buy 520 630 21 189.2 2.6 8.1 9.5 15.4 22.3 26.1 42.4 23.4 20.0 12.3 15.3 14.3 8.5 2.1 11.2 13.9 5 31
Phoenix Buy 725 1,000 38 111.2 1.5 3.8 3.8 4.2 24.7 24.5 27.4 29.4 29.6 26.5 15.5 14.3 13.6 2.8 10.1 9.5 4 21
Raymond Buy 792 1,240 57 48.6 0.7 1.7 2.6 3.4 28.1 42.9 55.0 28.1 18.5 14.4 11.5 9.5 8.2 2.2 12.6 14.1 36 3
Solar Industries Buy 1,024 1,280 25 92.7 1.3 2.6 3.3 3.8 29.6 36.6 42.5 34.6 28.0 24.1 19.4 17.7 14.4 6.2 24.2 22.9 -7 0
Sunteck Realty Buy 416 580 40 60.8 0.8 2.5 3.7 6.6 17.6 26.3 47.1 23.6 15.8 8.8 - - - 1.8 11.9 16.7 2 22
Valuation Guide
Company Reco CMP TP Return M.Cap M.Cap Net profit (INRbn) ABVS (INR) P/AdjBV (x) NNPA Ratio (%) P/E (x) RoE (%) RoA (%) Absolute (%)
FINANCIALS
Axis Bank Buy 711 800 13 2,005.0 27.8 46.8 68.0 140.8 221.6 283.7 326.2 3.2 2.5 2.2 2.3 1.6 0.9 29.5 8.8 0.8 4 16
Bank of Baroda Buy 93 110 17 359.1 5.0 -72.0 28.0 78.2 75.9 105.8 123.2 1.2 0.9 0.8 3.7 3.7 2.9 15.7 4.8 0.3 6 -17
Canara Bank Hold 197 240 22 148.4 2.1 3.5 14.0 38.7 193.8 255.4 300.7 1.0 0.8 0.7 5.4 3.8 3.1 14.5 4.2 0.2 10 -22
City Union Bank Hold 207 220 6 152.3 2.1 6.8 7.1 9.2 60.3 68.9 79.6 3.4 3.0 2.6 1.8 1.7 1.7 21.5 13.7 1.4 -5 26
DCB Bank Hold 183 210 15 56.7 0.8 3.3 4.0 5.1 89.2 98.1 112.2 2.0 1.9 1.6 0.7 1.0 0.9 14.1 13.2 1.0 -1 16
Federal Bank Buy 83 110 33 164.4 2.3 12.4 16.2 20.6 61.5 66.9 75.4 1.3 1.2 1.1 1.5 1.5 1.1 10.1 11.6 0.9 -1 5
HDFC Bank Buy 1,258 1,450 15 6,883.5 95.4 210.8 264.2 328.5 269.6 301.4 346.6 4.7 4.2 3.6 0.4 0.7 0.6 26.0 16.6 1.9 4 29
ICICI Bank Buy 486 575 18 3,139.0 43.5 33.6 95.1 177.3 147.5 160.9 180.7 3.3 3.0 2.7 2.3 1.4 1.0 32.9 9.6 0.9 13 33
IndusInd Bank Buy 1,414 1,650 17 980.1 13.6 40.5 53.6 70.8 416.5 503.0 598.0 3.4 2.8 2.4 1.2 1.2 0.5 18.7 15.8 1.7 13 -7
Karur Vysya Bank Hold 57 70 23 45.8 0.6 2.1 3.7 6.3 59.2 66.1 76.1 1.0 0.9 0.7 5.0 3.9 2.8 12.3 5.6 0.5 -4 -30
Kotak Mahindra Bank Buy 1,606 1,725 7 3,067.3 42.5 48.7 64.6 76.9 197.7 226.4 260.8 8.1 7.1 6.2 0.8 0.9 0.9 47.4 14.2 1.9 1 42
Punjab National Bank Hold 60 75 24 277.6 3.8 -99.8 33.8 52.7 42.9 61.9 76.3 1.4 1.0 0.8 6.6 5.7 3.8 12.0 6.7 0.4 5 -15
State Bank of India Buy 307 365 19 2,738.1 38.0 8.6 171.3 333.1 160.7 191.7 226.3 1.9 1.6 1.4 3.0 1.9 1.4 16.0 8.7 0.5 20 8
South Indian Bank Buy 11 14 33 19.5 0.3 2.5 5.0 8.2 20.4 24.2 28.2 0.5 0.4 0.4 3.5 2.3 1.8 3.9 9.4 0.5 7 -27
Union Bank of India Hold 53 55 5 93.0 1.3 -29.5 -8.8 30.7 56.1 62.4 74.1 0.9 0.8 0.7 6.8 4.7 3.4 -23.3 -3.0 -0.2 7 -35
YES Bank Under Review68 Under Review - 173.9 2.4 17.2 12.4 31.1 103.6 87.3 107.3 0.7 0.8 0.6 1.9 4.3 2.7 12.8 4.5 0.3 70 -69
NBFCs
Bajaj Finance Hold 4,1145 3,954 (5) 2,493.6 34.6 39.9 59.6 84.5 341.5 558.9 683.6 12.1 7.4 6.1 0.6 0.6 0.5 41.6 22.4 4.6 7 81
CanFin Homes Buy 381 510 34 50.7 0.7 3.0 3.6 4.3 131.8 156.3 185.1 2.9 2.4 2.1 0.2 0.4 0.5 13.9 18.8 1.9 0 37
Cholamandalam Invst & Fin Buy 297 395 33 232.4 3.2 11.9 13.1 15.8 394.8 93.9 112.2 0.8 3.2 2.6 1.7 1.6 1.6 17.8 19.4 2.3 4 16
Equitas Holding Buy 86 140 63 29.4 0.4 1.8 3.2 4.4 71.6 80.8 93.6 1.2 1.1 0.9 1.4 0.8 0.8 9.3 12.1 1.7 -15 -23
HDFC Hold 2,207 2,122 (4) 3,813.1 52.9 96.3 110.7 117.8 449.4 492.6 537.7 4.9 4.5 4.1 0.0 0.0 0.0 34.3 12.6 2.4 10 20
LIC Housing Finance Sell 420 380 (10) 211.9 2.9 24.3 25.1 29.6 322.0 361.7 408.0 1.3 1.2 1.0 1.1 0.8 0.8 8.5 14.5 1.2 16 -7
Manappuram Sell 163 144 (11) 137.7 1.9 9.3 11.7 13.3 53.7 64.6 77.2 3.0 2.5 2.1 0.3 0.6 0.6 11.8 23.1 5.3 18 92
M&M Finance Sell 326 335 3 201.5 2.8 15.6 13.7 17.5 177.4 191.4 209.2 1.8 1.7 1.6 4.8 5.0 5.2 14.6 12.1 1.9 2 -24
Muthoot Capital Buy 448 690 54 7.4 0.1 0.8 0.7 0.9 289.6 329.9 383.5 1.5 1.4 1.2 3.1 3.0 4.0 11.1 13.0 2.3 0 -46
Muthoot Finance Buy 650 938 44 260.6 3.6 19.7 26.1 29.7 244.4 293.1 351.0 2.7 2.2 1.9 2.4 2.0 2.0 10.0 24.2 7.0 -1 41
PNB Hsg. Fin. Hold 555 684 23 93.4 1.3 11.9 13.9 14.9 450.5 533.5 622.2 1.2 1.0 0.9 0.2 0.3 0.4 6.7 17.9 1.7 18 -44
Repco Home Finance Buy 289 391 36 18.1 0.3 2.3 2.9 3.3 244.1 282.9 326.2 1.2 1.0 0.9 1.9 1.1 1.2 6.1 17.8 2.5 4 -29
Shriram City Union Buy 1,334 1,661 25 88.0 1.2 9.9 10.8 13.3 968.51,105.3 1,277.9 1.4 1.2 1.0 5.0 4.1 3.6 8.2 15.7 3.4 -1 -15
Shriram Transport Buy 1,132 1,360 20 256.7 3.6 25.6 27.6 30.7 697.9 805.1 926.0 1.6 1.4 1.2 2.6 2.4 2.4 9.3 16.2 2.6 8 -9
Sundaram Finance Buy 1,604 1,886 18 178.2 2.5 5.3 7.6 9.2 507.8 574.9 574.9 3.2 2.8 2.8 0.8 0.8 0.8 23.4 15.2 2.7 -1 11
Ujjivan Financial Hold 268 325 21 32.5 0.5 1.5 2.4 3.5 155.0 175.1 203.9 1.7 1.5 1.3 0.3 0.5 0.5 13.3 12.2 1.6 -10 23
Events Calendar Nov 2019

Monday Tuesday Wednesday Thursday Friday Saturday Sun
11 Nov 12 Nov 13 Nov 14 Nov 15 Nov 16 Nov 17 Nov

Dilip Buildcon
Endurance Technologies
Future Lifestyle Fashions
Future Retail
Gayatri Projects
Gateway Distriparks
Grasim Industries
Jain Irrigation
KNR Constructions
MEP Infra
Minda Industries
MOIL
Mphasis
ONGC
Sadbhav Engineering
SAIL
Union Bank of India
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Antique'S Morning Presentation: ABB India Muthoot Finance Cadila Healthcare Bharat Heavy Electricals Mahanagar Gas

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Sectoral indices Delivery Spike

Nifty Nifty P/E Nifty P/B

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

Economy, Money & Banking Commodities Update

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

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

06-Nov 07-Nov 08-Nov 11-Nov 13-Nov

Current Reco : HOLD 3QCY19 RESULT REVIEW

ABB 3QCY20 concall highlights

Source: Company, Antique

Revenue (INR bn)

Revenue (INR mn)

Revenue (INR mn)

Robotics & Motion performance trend

Industrial Automation performance trend

EBIT Margin (%, RHS)

3Q CY19 6.1 3Q CY19 8.9 3Q CY19 17.03

Source: Company, Antique

4Q CY15 10.8 4Q CY15 11.6 1Q CY16 8.63

3Q CY16 1.9 4Q CY16 11.56

Revenue (INR mn)

Revenue (INR mn)

2Q CY17 7.2 2Q CY17 10.0 3Q CY17 6.97

1Q CY18 9.3 1Q CY18 10.3 2Q CY18 5.37

2Q CY18 10.3 2Q CY18 8.9 3Q CY18 4.38

EBIT Margin (%, RHS)

3Q CY19 8.3 3Q CY19 7.07

Current Reco : BUY 2QFY20 RESULT REVIEW

Quarterly performance - Gold business

Gold loan AUM 349,419 320,370 9.1 351,708 (0.7)

CAR 27.1 25.9 24.7

Stage III Loan Assets (%) 3.43 1.91 3.20

Temporary glitch, but growth is in full swing

Event 2: Regarding Strike in Kerala branches by negligible number of employees backed

Business % Stake Basis on FY21E INR per share

Net profit 11,798 17,776 19,721 26,081 29,743

LIABILITIES Op.costs/avg AUM (%) 4.6 4.5 4.6 4.4 4.2

Share Capital 3,995 4,000 4,007 4,007 4,007

Return ratios & capital management

Current Reco : BUY 2QFY20 RESULT REVIEW

Key takeaways from conference call

Recent tentative approvals

Cadila 2Q20 P&L

Reported PAT 1,072 4,175 3,036 -74% -65% 3,379

Cadila 2Q20 P&L (Continued)......

fx gain/(loss) in OOI 48 463 77

one-off exp/(gains) -350 700

Adjusted EBITDA 5,820 6,297 6,943

Wellness key numbers (INR mn) Q2FY20A Q2FY19A Q1FY20A

Revenue 30,008 27,767 28,684

Cadila key drugs

Cadila P&L changes

North America USD 781 786 -12% 1% 814 805 3% -1%

Europe EUR 29 23 -20% -23% 31 23 -23% -26%

Emerging markets 6,238 6,238 12% 0% 6,986 6,986 12% 0%

API exports 2,816 2,816 -5% 0% 3,268 2,956 5% -10%

Gross profit 88,153 88,344 5% 0% 95,461 93,982 7% -2%

EBITDA 27,327 26,022 -12% -5% 30,300 29,419 8% -3%

PAT (Reported) 14,644 11,171 17,366 16,945

EPS(Rs) 14.3 12.9 -29% -10% 17.0 16.6 16% -2%