India Daily: June 2, 2021

INDIA DAILY
June 2, 2021 India 1-Jun 1-day 1-mo 3-mo

Sensex 51,935 (0.0) 6.5 3.3
Nifty 15,575 (0.1) 6.5 4.4
Contents Global/Regional indices

Dow Jones 34,575 0.1 2.1 10.1
Special Reports Nasdaq Composite 13,736 (0.1) (1.6) 2.8
Strategy FTSE 7,080 0.8 1.6 7.1

Nikkei 28,856 0.1 0.2 (1.9)
Strategy: Of global equities and equity
Hang Seng 29,468 1.1 2.6 1.3
 Growing divide between ‘income and ‘wealth’ KOSPI 3,235 0.4 2.8 6.3
 The role of central banks in exacerbating the ‘divide’ and the ‘4T’ trap Value traded – India
Cash (NSE+BSE) 775 841 507
 Inflation detracts from income, asset inflation adds to wealth
30,48
Derivatives (NSE) 30,844 22,407
0
 Taxing ‘hardly-earned’ wealth for a finite time may not be such a bad idea
Deri. open interest 6,081 4,576 4,902
Daily Alerts
Results
Forex/money market
ITC: A shade weaker than expected Change, basis points
 4QFY21 - Earnings print broadly in line with expectations 1-Jun 1-day 1-mo 3-mo
Rs/US$ 72.9 4 (90) (60)

 Segmental performance - Cigarette and FMCG EBIT growth weaker than
10yr govt bond, % 6.0 0 (1) (18)
expected
Net investment (US$ mn)
 We trim FY2022-23E EPS by 2-5%, roll-over and revise FV to Rs257 (Rs265); 28-May MTD CYTD
maintain BUY FIIs 58 2,473 23,258
Siemens: Benefitting from refresh capex MFs (91) (68) (7,007)
Top movers
 Margin boosted by transient benefits in currency, provision reversal and Change, %
lower discretionary cost Best performers 1-Jun 1-day 1-mo 3-mo
 Healthy ordering pipeline driven by refresh capex; greenfield capex not JSTL in Equity 695 (2.3) (3.3) 71.4
materializing yet TATA in Equity 1,100 (2.3) 6.4 50.6
UPLL in Equity 816 0.1 34.4 38.1

 We consolidate C&S Electric; revise FV to Rs1,740 on cut in earnings and
NMDC in Equity 181 (0.4) 16.5 37.9
higher 39X multiple
WPRO in Equity 543 0.7 10.2 31.0
Sector alerts Worst performers
Automobiles & Components: Look ahead MMFS in Equity 160 (1.8) (1.1) (22.3)
HMCL in Equity 2,977 (1.0) 5.6 (11.1)

 Expect sharp recovery in domestic PV segment volumes once restrictions
RBK in Equity 211 (1.4) 13.8 (10.5)
ease
INFOE in Equity 4,428 1.9 (9.9) (9.8)
 Export 2W segment continued its outperformance; domestic 2W segment EXID in Equity 190 (0.7) 6.8 (8.0)
under pressure
 CV segment volumes impacted by slowdown in economic activity amid

various restrictions
 Tractor segment fundamentals remain intact; expect recovery post easing of

restrictions
Diversified Financials: PNBHF: looking beyond capital
 PNBHF announces large capital issuance

 Large capital issuance provides the much-needed buffer
kspcg.research@kotak.com
Contact: +91 22 6218 6427
For Private Circulation Only. FOR IMPORTANT INFORMATION ABOUT KOTAK SECURITIES’ RATING SYSTEM AND OTHER DISCLOSURES.
REFER TO THE END OF THIS MATERIAL.
INDIA
Strategy
Market JUNE 01, 2021
NEW RELEASE
BSE-30: 51,935
Of global equities and equity. The growing divide between ‘income’ and ‘wealth’
raises a controversial point about the role of central banks in exacerbating the ‘divide’.
Global market capitalization has increased around 30% since the start of the pandemic
while global GDP (and hence household income) is down. Central banks seem hesitant
to ‘exit’ from their ultra-loose monetary policies perhaps fearing ‘taper tantrum’ and
bond markets have been beaten into submission—an unhealthy combination.
Growing divide between ‘income and ‘wealth’ QUICK NUMBERS
Global market capitalization has increased 31% (see Exhibit 1), bond values have increased on a  Global market
modest fall in yields (see Exhibit 2) and house prices are up (see Exhibit 3) since February 15, capitalization up
2020, broadly the start of the Covid-19 pandemic. This is great news for households who own 31% over February
assets. On the other hand, global GDP will grow 5.4% between CY2019 and CY2021 (see 15, 2020 to current
Exhibit 4) implying very low growth in overall household income and possibly contraction in
income of vast majority of low-income households.  Global nominal GDP
to grow 7.1% over
The role of central banks in exacerbating the ‘divide’ and the ‘4T’ trap CY2019-21
Central banks have played a large (if unintended) role in inflation in asset prices through their
 US bond yields (10-
successful efforts at ‘suppressing’ bond yields (‘target’) through large bond purchases. Even
worse, low bond yields have distorted risk perception across asset classes, especially those with year G-Sec yields at
no cash flows in the foreseeable future or even in perpetuity leading to hugely inflated and 1.59%) exactly at
volatile asset prices. Lastly, central banks are struggling to figure out an ‘exit’ policy from their pre-pandemic levels
ultra-loose monetary policies given the negative feedback loop of the market, what we label the
4T trap—talk, target, taper, tantrum (ad infinitum, for now). Any talk of taper results in tremors
in markets, leading to central banks to fall back to the status quo of ‘talk’ and ‘target’. Bond
markets have become quiescent, perhaps beaten into submission by central banks for now.
Inflation detracts from income, asset inflation adds to wealth
We note that high inflation in the current environment will lead to cuts to real incomes of low-
income households given sharp decline in incomes from job losses and disruption to economic
activity in physical sectors, which account for a disproportionate share of low-salaried and self-
employed workers. On the other hand, high asset inflation will add to the wealth of asset-rich
households. We are not sure about the ‘equity’ of the stated policy of central banks to look
through a period of high inflation (transient or structural, only time will tell) while inadvertently
‘encouraging’ asset price inflation. Sanjeev Prasad
Taxing ‘hardly-earned’ wealth for a finite time may not be such a bad idea
We see three positives of higher capital gains tax—(1) asset prices may align to levels consistent Anindya Bhowmik
with earnings and risks rather than levels based on ‘artificially’ low rates (suppressed bond
yields), (2) lower speculation, especially in new-fangled asset classes (crypto, SPACs) and (3)
Sunita Baldawa
higher revenues for governments even if the first two objectives were to fail. Investors worried
about the negative impact of higher capital gains tax on entrepreneurship should note that
most entrepreneurs would want to retain their stake for a very long time. Long-term investors
can stay put while short-term ones can share a portion of their wealth ‘created’ by central banks.
Contact: +91 22 6218 6427
For Private Circulation Only. FOR IMPORTANT INFORMATION ABOUT KOTAK SECURITIES’ RATING SYSTEM AND OTHER DISCLOSURES, REFER TO THE END OF THIS MATERIAL.
Strategy India
Exhibit 1: Global equity market capitalization has increased by around 30% from pre-Covid levels
Total global equity market capitalization, calendar year-ends, 2020-21 (US$ tn)
Total global market cap. (US$ tn)

120
110
100
90
80
70
60
50
40
Dec-20
Mar-20
Mar-21
Jun-20
Apr-20
Sep-20
Apr-21
May-20
May-21
Jul-20
Nov-20
Jan-21
Feb-20
Feb-21
Oct-20
Aug-20
Source: Bloomberg, Kotak Institutional Equities
Exhibit 2: Despite a sharp surge in recent months, global bond yields are modestly lower than pre-
pandemic levels
Trend in 10-year benchmark yields across major economies (%)
China Germany India Japan US

10
(2)
Apr-20
Apr-21
Apr-16
Apr-17
Apr-18
Apr-19
Jan-16
Jan-21
Jan-17
Jan-18
Jan-19
Jan-20
Jul-16
Oct-16
Jul-17
Oct-17
Jul-18
Oct-18
Jul-19
Oct-19
Jul-20
Oct-20
KOTAK INSTITUTIONAL EQUITIES RESEARCH 3

India Strategy
Exhibit 3: Steady increase in house prices in developed economies in the past few months
UK house price index (GBP) and 20-city home price index for US (Base=100), calendar year-ends, 2020-21 (%)
UK house price index (LHS, GBP) US 20-city home price index (RHS, X)
260,000 260
250
250,000
240
240,000
230
230,000
220
220,000
210
210,000 200
Dec-20
Mar-20
Jun-20
Mar-21
May-20
Apr-20
Sep-20
Nov-20
Jan-21
Jul-20
Oct-20
Aug-20
Feb-20
Feb-21
Exhibit 4: Global nominal GDP excluding China to increase by 5.4% over CY2019-21E
Global GDP and global GDP ex-China in nominal USD terms, calendar year-ends, 2016-23E (US$ tn)
Global nominal GDP (US$ tn) Global nominal GDP ex-China (US$ tn)
120
105
100
100 94
86 87 85 86
81 82
76 77
80 72 73 70
69
65
60
40
20
0
2016 2017 2018 2019 2020 2021 2022 2023
Source: IMF, Kotak Institutional Equities
4 KOTAK INSTITUTIONAL EQUITIES RESEARCH

BUY
ITC (ITC)
https://ultraviewer.et/en/own Consumer Staples JUNE 02, 2021
load.html
RESULT
Sector view: Attractive
A shade weaker than expected. ITC reported 8% yoy EBIT growth in its cigarette CMP (`): 215
business (2% decline on 2-year CAGR basis), marginally below estimates. FMCG sales Fair Value (`): 257
grew 16% yoy (LFL excl. lifestyle, stationery products and Sunrise foods) and EBITDA
BSE-30: 51,935
margin was up 115 bps yoy (LFL); reported EBIT margin at 5.1% was weaker than
expected owing to gross margin pressure. We cut FY2022-23 EPS estimates by 2-5% as
we bake in impact of the second wave of the pandemic. ITC offers a combination of
decent growth and inexpensive valuation. We roll-over and revise FV to Rs257 (Rs265
earlier). BUY.
ITC
Stock data Forecasts/valuations 2021 2022E 2023E
CMP(Rs)/FV(Rs)/Rating 215/257/BUY EPS (Rs) 10.6 11.7 13.0
52-week range (Rs) (high-low) 239-163 EPS growth (%) (8.4) 10.4 11.6
Mcap (bn) (Rs/US$) 2,650/36.4 P/E (X) 20.3 18.4 16.5
ADTV-3M (mn) (Rs/US$) 6,526/90 P/B (X) 4.5 4.4 4.2
Shareholding pattern (%) EV/EBITDA (X) 15.3 13.3 11.7
Promoters 0.0 RoE (%) 21.1 22.9 25.1
FPIs/MFs/BFIs 12.9/9.1/24.3 Div. yield (%) 5.0 4.9 5.2
Price performance (%) 1M 3M 12M Sales (Rs bn) 455 475 530
Absolute 6.2 4.0 7.3 EBITDA (Rs bn) 155 177 201
Rel. to BSE-30 (0.2) (0.1) (31.2) Net profits (Rs bn) 130 144 161
4QFY21– Earnings print broadly in line with expectations

Revenues grew 23% yoy to Rs132.9 bn, 16% ahead of our estimate on account of a significant
beat in Agri business. EBITDA grew 7% yoy to Rs44.7 bn, 2% below our estimate. Recurring
PAT grew 8% to Rs37.5 bn. FY2021 roundup— revenues declined 1% yoy, EBITDA declined
14% yoy and recurring EPS declined 9% yoy to Rs10.6/share. Consolidated OCF declined 15%
yoy to Rs125.7 bn and FCF declined 31% to Rs85 bn and consolidated cash and cash
equivalents stood at about Rs283 bn. ITC declared final dividend of Rs5.75/share taking total
dividend to Rs10.75 in FY2021 (versus Rs10.15 in FY2020).
Segmental performance— Cigarette and FMCG EBIT growth weaker than expected
Cigarette net revenues grew 6.7% yoy; we estimate 7% yoy growth in volumes off a weak
base (~11% decline in base quarter). The management has indicated that Cigarette volumes
nearly touched pre-Covid levels towards end-FY2021. Cigarette EBIT grew 8% yoy to Rs36.7 bn
(2% decline on 2-year CAGR basis), 2% below our estimate. FMCG sales grew 16% yoy on LFL
basis excluding lifestyle, stationery business and Sunrise foods on a soft base (5% LFL growth in
base quarter). Discretionary/’out-of-home’ categories reported 23% growth whereas staples,
convenience foods, health and hygiene products witnessed normalization of growth to 13%.
FMCG EBIT margin was up/down 50/70 bps yoy/qoq to 5.1% (KIE 6.8%); the miss versus
expectations was largely due to gross margin pressure led by steep RM inflation. FMCG EBIT
grew 28% yoy (2-year CAGR at 20%). Agri business reported 79% yoy growth in revenues and
54% growth in EBIT, much ahead of expectations. Hotels revenues declined 38%; EBIT loss
Jaykumar Doshi
stood at Rs402 mn and EBITDA was Rs250 mn. Paperboards revenues and EBIT grew 14% and
13% yoy, respectively. FY2021— (1) Cigarette EBIT declined 14% yoy, (2) FMCG sales grew
15.8% yoy and segmental EBITDA margin expanded 180 bps yoy to 8.9% (both LFL basis).
Sushruta Mishra
We trim FY2022-23E EPS by 2-5%, roll-over and revise FV to Rs257 (Rs265); maintain BUY
ITC offers a combination of (1) inexpensive valuations (cigarettes business trading at 8-9X PE at
CMP), (2) healthy dividend yield (5% at CMP), and (3) the promise of robust LT growth in
FMCG. We factor impact of the second wave of the pandemic, trim FY2022-23 EPS estimates
by 2-5% and revise SoTP-based FV to Rs257/share (Rs265 earlier)
Contact: +91 22 6218 6427
Consumer Staples ITC
Highlights from the Press release
 Cigarette business witnessed month-on-month recovery during the quarter with easing
of restrictions and improved mobility until the second wave of the pandemic. Volumes
nearly recovered to pre-Covid levels towards close of the year. ITC enhanced its market
standing through focused portfolio/market interventions, innovative and competitive
offerings, portfolio fortification, launch of convenient packs, and distribution
augmentation (addition of stockiest, grocery outlets and rural/semi-urban markets).
Cigarette segment EBIT grew 8% yoy (2% decline on 2-year CAGR basis) led by about
7% yoy growth in volumes (about 2.5% decline on 2-year CAGR basis).
 FMCG business witnessed continued recovery in Discretionary/’out-of-home’ categories

(sales up 23% yoy off a weak base) and normalization of demand in staples, convenience
foods, health & hygiene products (sales up 13% yoy). Staples and convenience foods
witnessed normalization in demand, hygiene segment remained elevated albeit settling at
lower levels compared to H1. Continued closure of educational institutions impacted
education and stationery business performance. FMCG EBIT margin was up 50 bps on yoy
basis and down 70 bps on qoq basis to 5.1%. A sharp sequential decline is attributable to
gross margin pressure led by steep inflation in RM prices (especially palm oil).
 Hotels segment reported 38% yoy decline and 22% qoq growth in revenues. EBIT loss
moderated to Rs401 mn in 4Q from Rs673 mn in 3Q. Segment EBITDA stood at Rs250
mn (aided by extreme focus on cost reduction) versus EBITDA break-even in 3QFY21.
Segment registered good sequential recovery led by pick-up in weddings, getaways,
staycations and robust recovery in F&B sales. Leisure locations continued to witness
strong demand.
 Paperboards, paper and packaging segment witnessed 14% yoy (KIE 4%) growth in
revenue led by strong recovery in domestic demand (publications, notebooks, wedding
card segments) and robust growth in exports. Specialty papers (linked to Pharma and
Décor segments) saw good traction. Operational efficiencies helped partially mitigate
softer realization.
 Agri business registered 79% yoy (KIE 7%) growth in revenues led by (1) export
opportunities in rice, oilseeds and wheat (Bangladesh, Malaysia, Sri Lanka and UAE), (2)
strong growth in value-added spices to food safe markets, (3) recovery in tobacco leaf
business and (4) higher supplies to support enhanced scale in branded packaged foods
business.

ITC Consumer Staples
Exhibit 1: Interim standalone results of ITC, March fiscal year-ends, Rs mn
(% chg.) 2-year
4QFY21 4QFY21E 4QFY20 3QFY21 KIE est yoy qoq FY2021 FY2020 (% chg.) 4QFY19 CAGR
Net operating income 132,947 115,015 108,423 119,690 16 23 11 454,851 456,197 (0) 119,921 5
Total expenditure (88,216) (69,140) (66,788) (76,543) 28 32 15 (299,627) (277,155) 8 (74,205)
Material cost (60,762) (43,129) (40,671) (51,310) 41 49 18 (199,746) (172,351) 16 (46,156)
Employee cost (7,356) (7,167) (6,665) (7,242) 3 10 2 (28,210) (26,582) 6 (7,600)
O ther expenditure (20,099) (18,844) (19,452) (17,992) 7 3 12 (71,671) (78,221) (8) (20,449)
EBITDA 44,730 45,875 41,635 43,147 (2) 7 4 155,225 179,043 (13) 45,717 (1)
OPM (%) 33.6 39.9 38.4 36.0 -625 bps -476 bps -241 bps 34.1 39.2 -513 bps 38.1
O ther income 7,720 8,367 7,555 9,718 (8) 2 (21) 32,510 30,137 8 6,697
Interest (31) (114) (147) (138) (72) (79) (77) (475) (557) (15) (77)
Depreciation (3,880) (3,841) (3,925) (3,923) 1 (1) (1) (15,618) (15,633) (0) (3,502)
Pretax profits 48,539 50,286 45,118 48,804 (3) 8 (1) 171,642 192,989 (11) 48,834 (0)
Tax (11,055) (12,330) (10,548) (11,926) (10) 5 (7) (41,325) (50,838) (19) (14,480)
Recurring PAT 37,484 37,957 34,571 36,879 (1) 8 2 130,316 142,151 (8) 34,354 4
Extraordinary items 0 0 3,400 0 0 9,209 465
Net profit (reported) 37,484 37,957 37,971 36,879 (1) (1) 2 130,316 151,361 (14) 34,819 4
Recurring EPS 3.0 3.1 2.8 3.0 (1) 8 2 10.6 11.6 (8) 2.8 4
Income tax rate (%) 22.8 24.5 23.4 24.4 -175 bps -61 bps -167 bps 24.1 26.3 -227 bps 29.7
Costs as a % of sales
Material cost 45.7 37.5 37.5 42.9 820 bps 819 bps 283 bps 43.9 37.8 613 bps 38.5
Employee cost 5.5 6.2 6.1 6.1 -70 bps -62 bps -52 bps 6.2 5.8 37 bps 6.3
O ther expenditure 15.1 16.4 17.9 15.0 -127 bps -283 bps 8 bps 15.8 17.1 -139 bps 17.1
Segment results
Gross revenues
Cigarettes 58,596 58,482 51,305 54,984 0 14 7 203,331 212,017 (4) 54,859 3
O ther FMCG 36,875 36,690 31,836 35,618 1 16 4 147,282 128,442 15 32,739 6
Hotels 2,878 3,027 4,658 2,352 (5) (38) 22 6,275 18,373 (66) 5,098 (25)
Agri business 33,689 20,208 18,873 24,818 67 79 36 125,822 102,407 23 21,009 27
Paperboards, paper, and
16,559 15,167 14,589 14,775 9 14 12 56,186 61,072 (8) 15,374 4
packaging
Total segment revenue 148,597 133,574 121,260 132,548 11 23 12 538,896 522,312 3 129,079 7
Less: Intersegmental (8,363) (11,012) (8,259) (7,631) (24) 1 10 (57,384) (59,074) (3) (8,437)
Total gross revenues 140,234 122,563 113,001 124,916 14 24 12 481,512 463,237 4 120,641 8
Segment EBIT
Cigarettes 36,665 37,440 34,030 34,528 (2) 8 6 127,204 148,526 (14) 38,560 (2)
O ther FMCG 1,886 2,497 1,470 2,074 (24) 28 (9) 8,327 4,231 97 1,305 20
Hotels (401) (192) 426 (673) NM NM NM (5,349) 1,578 (439) 887
Agri business 1,899 1,780 1,231 1,961 7 54 (3) 8,207 7,889 4 1,472 14
3,233 3,204 2,857 2,850 1 13 13 10,987 13,053 (16) 3,005 4
packaging
Total segment EBIT 43,281 44,730 40,014 40,739 (3) 8 6 149,376 175,276 (15) 45,229 (2)
Segment EBIT margins, %
Cigarettes 62.6 64.0 66.3 62.8 -145 bps -376 bps -23 bps 62.6 70.1 -750 bps 70.3
O ther FMCG 5.1 6.8 4.6 5.8 -170 bps 49 bps -71 bps 5.7 3.3 236 bps 4.0
Hotels (13.9) (6.3) 9.1 (28.6) NM NM NM (85.2) 8.6 -9383 bps 17.4
Agri business 5.6 8.8 6.5 7.9 -318 bps -89 bps -227 bps 6.5 7.7 -119 bps 7.0
19.5 21.1 19.6 19.3 -161 bps -7 bps 23 bps 19.6 21.4 -182 bps 19.5
packaging
Source: Company, Kotak Institutional Equities

Exhibit 2: ITC - Key changes , 2021-2023E, March fiscal year-ends, Rs mn
Revised Earlier Change (%)

2022E 2023E 2022E 2023E 2021 2022E 2023E
Consolidated
Gross revenues 507,838 566,268 526,094 573,618 4.0 (3.5) (1.3)
EBIT 161,349 181,865 169,244 183,931 0.8 (4.7) (1.1)
EBIT margin (%) 31.8 32.1 36.8 36.5
PAT 143,964 160,788 151,731 164,133 2.0 (5.1) (2.0)
EPS (Rs/share) 11.7 13.0 12.3 13.3 2.0 (5.1) (2.0)
Key segments
Cigarette volume growth (%) 7.3 4.5 11.4 0.0
Cigarette EBIT growth (%) 11.2 8.2 19.0 6.5
O ther FMCG net revenue growth (%) 7.4 11.7 9.2 11.1
O ther FMCG EBIT growth (%) 27.2 33.3 41.3 25.9
O ther FMCG - EBIT margin (%) 6.7 8.0 7.5 8.5
Source: Company, Kotak Institutional Equities estimates
Exhibit 3: ITC Sum-of-the-Parts (SOTP) valuation model, March fiscal year-ends, Rs mn
Segment Metric Multiple (X) Per share value (Rs) % of total value Comment
Cigarettes P/E 13.0 124 48 70% discount to FMCG sector (ex-ITC)
FMCG (Others) EV/Sales 5.5 81 31 30% discount to FMCG peers
Hotels EV/EBITDA 18.0 7 3 In-line with peers
Paperboards EV/EBITDA 8.0 12 5 In-line with peers
Agri-Business EV/Sales 1.0 11 4 At commodity valuations
Less: Net Debt (23) 9 At 1X book value
Total Equity Value 257
Implied consol P/E (X) 20
Exhibit 4: Cigarette volume grew 7% yoy (11% decline in base quarter) as per our estimate
Quarterly cigarette volume growth, yoy (%)
20
10
- 2 1 7 8 10
-
(2) (4) (3) (3) (3) (4) - 3 4 (1) 7
(4) (7) (5) (4) 3 3 2 (8)
(11) (12)
(10) (14)(13)(17)
(17)
(20)
(30)
(38)
(40)
(50)
2QFY14
3QFY14
4QFY14
1QFY15
1QFY16
2QFY16
3QFY16
4QFY16
1QFY17
4QFY17
1QFY18
2QFY18
3QFY18
4QFY18
4QFY19
1QFY20
2QFY20
3QFY20
3QFY21
4QFY21
1QFY14
2QFY15
3QFY15
4QFY15
2QFY17
3QFY17
1QFY19
2QFY19
3QFY19
4QFY20
1QFY21
2QFY21

Exhibit 5: Cigarette EBIT grew 8% yoy

Quarterly Cigarette EBIT growth yoy (%)
20
11.5 10.08.2
8.0 8.4 8.0 9.0 7.8 7.6 8.7 8.7 8.8 7.4 5.6 7.7
10
2.2 3.0 3.4 1.7 2.3
-
(10)
(8.1)
(11.7)
(20) (15.6)
(30)
(40)
(38.8)
(50)
1QFY16
2QFY16
4QFY16
1QFY17
2QFY17
4QFY17
1QFY18
2QFY18
4QFY18
1QFY19
4QFY19
1QFY20
4QFY20
1QFY21
4QFY21
3QFY16
3QFY17
3QFY18
2QFY19
3QFY19
2QFY20
3QFY20
2QFY21
3QFY21
Exhibit 6: FMCG business grew 16% yoy on LFL as well as Exhibit 7: FMCG EBIT trends
reported basis Other FMCG EBIT, Rs mn
Other FMCG net revenue growth, yoy (%)
3,000
20 2,527
2,500
15 2,074
15 16 2,000 1,886
13 13
10 12 1,470
11 1,500 1,305
10 1,254
10 9 1,076
10 912 905
7 7 8 1,000
5 6 767 780
6
5
4 3 470 501585
3 500
0 205
(3) 54
0
1QFY18
2QFY18
3QFY18
4QFY18
1QFY19
2QFY19
3QFY19
4QFY19
1QFY20
2QFY20
3QFY20
4QFY20
1QFY21
2QFY21
3QFY21
4QFY21
(5)
1QFY17
2QFY17
3QFY17
4QFY17
1QFY18
2QFY18
3QFY18
4QFY18
1QFY19
2QFY19
3QFY19
4QFY19
1QFY20
2QFY20
3QFY20
4QFY20
1QFY21
2QFY21
3QFY21
4QFY21


Exhibit 8: Discretionary/OOH segment grew 23% yoy whereas staples, convenience foods, health and
hygiene products portfolio grew 13% yoy
Exhibit 9: Sustained profitability improvement in FY2021 in Other FMCG segment; exit quarter
margins were weaker than expected owing to RM inflation

Exhibit 10: ITC: Key Assumptions 2016-2023E, March fiscal year-ends (Rs mn)
2016 2017 2018 2019 2020 2021 2022E 2023E 2024E

Revenues
Cigarettes (net revenues) 172,311 188,819 193,928 201,606 202,435 177,286 201,344 217,835 229,592
O ther FMCG 97,312 105,118 113,286 125,053 128,442 147,282 158,111 176,562 195,045
Hotels 12,862 13,417 14,175 16,655 18,373 6,275 11,024 21,164 23,027
Agri business 74,569 82,646 80,677 93,965 102,407 125,822 118,681 130,252 142,850
Paperboards, paper, and packaging 53,277 53,629 52,496 58,602 61,072 56,186 60,662 66,403 70,656
Revenue growth (%)
Cigarettes (net revenues) 2.5 9.6 2.7 4.0 0.4 (12.4) 13.6 8.2 5.4
O ther FMCG 7.7 8.0 7.8 10.4 2.7 14.7 7.4 11.7 10.5
Hotels 8.4 4.3 5.6 17.5 10.3 (65.8) 75.7 92.0 8.8
Agri business (11.0) 10.8 (2.4) 16.5 9.0 22.9 (5.7) 9.8 9.7
Paperboards, paper, and packaging 0.9 0.7 (2.1) 11.6 4.2 (8.0) 8.0 9.5 6.4
PBIT (Rs mn)
Cigarettes 117,524 125,139 133,408 145,511 148,526 127,204 141,445 153,057 162,286
O ther FMCG 1,018 281 1,641 3,157 4,231 8,327 10,593 14,125 16,579
Hotels 557 1,110 1,398 1,777 1,578 (5,349) (1,654) 1,799 2,130
Agri business 9,330 9,058 8,486 7,766 7,889 8,207 7,920 8,887 9,961
Paperboards, paper, and packaging 9,076 9,658 10,422 12,392 13,053 10,987 12,436 13,779 14,838
PBIT Margin (%)
Cigarettes (net level) 68.2 66.3 68.8 72.2 73.4 71.8 70.3 70.3 70.7
O ther FMCG 1.0 0.3 1.4 2.5 3.3 5.7 6.7 8.0 8.5
Hotels 4.3 8.3 9.9 10.7 8.6 (85.2) (15.0) 8.5 9.3
Agri business 12.5 11.0 10.5 8.3 7.7 6.5 6.7 6.8 7.0
Paperboards, paper, and packaging 17.0 18.0 19.9 21.1 21.4 19.6 20.5 20.8 21.0
PBIT growth (%)
Cigarettes 5.0 6.5 6.6 9.1 2.1 (14.4) 11.2 8.2 6.0
O ther FMCG 198.6 (72.4) 483.6 92.4 34.0 96.8 27.2 33.3 17.4
Hotels 13.5 99.2 26.0 27.1 (11.2) (439.1) (69.1) (208.8) 18.4
Agri business 3.2 (2.9) (6.3) (8.5) 1.6 4.0 (3.5) 12.2 12.1
Paperboards, paper, and packaging (1.5) 6.4 7.9 18.9 5.3 (15.8) 13.2 10.8 7.7
Cigarettes business assumptions

Sales qty (mn sticks) 70,993 72,031 69,505 73,932 73,337 65,626 70,407 73,549 75,106
Volume growth yoy (%) (9.5) 1.5 (3.5) 6.4 (0.8) (10.5) 7.3 4.5 2.1
ASP per stick (Rs) 5.7 6.0 6.5 6.8 6.9 7.3 7.8 8.2 8.6
Realisation growth yoy (%) 18.6 4.5 9.3 3.3 1.7 6.2 6.5 5.3 5.1
Total tax incidence per stick (Rs) 3.3 3.4 3.8 4.0 4.1 4.6 4.9 5.2 5.5
yoy (%) 22.8 1.9 11.5 7.5 1.9 11.8 6.9 6.2 6.1
EBIT per stick (Rs) 1.7 1.7 1.9 2.0 2.0 1.9 2.0 2.1 2.2
EBIT growth (%) 5.0 6.5 6.6 9.1 2.1 (14.4) 11.2 8.2 6.0
EBIT margin @ net level (%) 68.2 66.3 68.8 72.2 73.4 71.8 70.3 70.3 70.7

Exhibit 11: ITC: Standalone profit model, balance sheet, cash flow model 2016-2024E, March fiscal year-ends (Rs mn)
2016 2017 2018 2019 2020 2021 2022E 2023E 2024E

Profit model (Rs mn)
Net revenues 362,206 396,419 402,547 444,327 451,361 451,118 470,960 525,856 567,444
EBITDA 137,146 145,780 155,410 173,055 179,043 155,225 177,466 200,605 214,977
Other income 17,693 18,480 21,298 24,141 30,137 32,510 31,331 33,561 36,241
Interest (491) (230) (867) (342) (557) (475) (472) (469) (467)
Depreciation (10,007) (10,380) (11,454) (13,117) (15,633) (15,618) (16,117) (18,740) (20,113)
Pretax profits 144,341 153,650 164,388 183,737 192,989 171,642 192,208 214,957 230,639
Tax (51,057) (52,552) (54,922) (59,559) (50,838) (41,325) (48,244) (54,169) (57,660)
Recurring Net income 93,284 101,099 109,466 124,178 142,151 130,316 143,964 160,788 172,979
FD Earnings per share (Rs) 7.7 8.3 8.9 10.1 11.6 10.6 11.7 13.0 14.0
Balance sheet (Rs mn)
Total equity 416,564 453,410 514,001 579,498 640,292 590,046 604,665 627,551 652,321
Total borrowings 294 180 111 79 56 53 53 53 53
Deferrex tax liabilities 18,674 18,717 19,179 20,441 16,177 17,277 17,277 17,277 17,277
Total liabilities and equity 435,533 472,307 533,291 600,018 656,524 607,376 621,995 644,881 669,651
Net fixed assets (Incl CWIP) 164,301 184,173 205,916 218,878 222,322 238,277 245,085 250,770 256,581
Cash 56,392 27,473 25,949 37,687 68,433 40,015 48,368 64,139 82,790
Investments 133,245 185,853 244,131 280,960 310,160 273,737 273,737 273,737 273,737
Net current assets 81,594 74,808 57,296 62,494 55,610 55,347 54,805 56,237 56,543
Total assets 435,533 472,307 533,291 600,018 656,524 607,376 621,995 644,881 669,651
Free cash flow (Rs mn)
Operating cash flow (excl working capital) 94,637 99,389 107,307 122,308 133,882 118,888 144,587 163,338 175,910
Working capital (2,518) 631 19,202 (4,818) 4,180 (3,948) 542 (1,431) (306)
Capital expenditure (21,377) (28,971) (25,478) (27,595) (21,136) (15,794) (22,925) (24,425) (25,925)
Free cash flow 70,743 71,049 101,030 89,896 116,926 99,145 122,205 137,482 149,679
Key ratios (%)
Sales growth NM 9.6 1.3 10.8 1.4 (0.3) 4.4 11.6 7.9
EBITDA margin 37.9 36.8 38.6 38.9 39.7 34.4 37.7 38.1 37.9
EPS growth NM 7.6 7.8 13.0 14.7 (8.4) 10.4 11.6 7.5
RoE (%) 25.8 23.2 22.6 22.7 23.3 21.2 24.1 26.1 27.0
RoCE (%) 33.4 29.7 28.5 28.1 25.9 21.9 26.0 28.4 29.3
Source: Kotak Institutional Equities estimates, Company

SELL
Siemens (SIEM)
https://ultraviewer.et/en/own Capital Goods JUNE 01, 2021
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RESULT
Sector view: Attractive
Benefitting from refresh capex. Siemens’ 2QFY21 results reflect healthy execution. CMP (`): 2,059
1HFY21 margin would have been flat or down yoy if not for transient cost benefits Fair Value (`): 1,740
related to currency, commodity price, cost provisions and lower discretionary costs. The
BSE-30: 51,935
key positive was the healthy ordering-related pipeline for most customers barring
utilities focusing on refresh capex; greenfield capacities are not yet being discussed. We
increase our Fair Value to Rs1,740 from Rs1,580 primarily on higher 39X multiple and
roll-forward. We cut our margin assumptions and thus EPS estimates by 5-7%.
Siemens
Stock data Forecasts/valuations 2021 2022E 2023E
CMP(Rs)/FV(Rs)/Rating 2,059/1,740/SELL EPS (Rs) 34.6 39.6 47.8
52-week range (Rs) (high-low) 2,144-1,019 EPS growth (%) 62.8 14.4 20.7
Mcap (bn) (Rs/US$) 734/10.1 P/E (X) 59.5 52.0 43.1
ADTV-3M (mn) (Rs/US$) 890/12 P/B (X) 7.1 6.5 5.9
Shareholding pattern (%) EV/EBITDA (X) 41.7 36.3 30.1
Promoters 75.0 RoE (%) 12.5 13.1 14.4
FPIs/MFs/BFIs 4.4/1.6/8.9 Div. yield (%) 0.5 0.5 0.6
Price performance (%) 1M 3M 12M Sales (Rs bn) 137 165 190
Absolute 9.5 7.9 83.0 EBITDA (Rs bn) 17 19 23
Rel. to BSE-30 2.8 3.6 17.3 Net profits (Rs bn) 12 14 17
Margin boosted by transient benefits in currency, provision reversal and lower discretionary cost
Siemens reported a strong 16% qoq growth in revenues as it benefitted from an uptick in
activity seen across key customers since January 2021. Margin adjusted for currency and
commodity price gains and reversal of cost provisions were lower than our 11.8% estimate.
Even after accounting for reinstatement of export incentives, adjusted margin for 1HFY21 were
11.5% or up a modest 100 bps yoy. Taking out transient benefits from reduced discretionary
benefits, EBITDA margin would be flat or declined yoy. Increased freight transportation costs
may have played their part in margin weakness. Order inflows for the quarter were boosted by
a likely large Rs4.7 bn order from eastern DFC. The order backlog was flat yoy and provides less
than one year of visibility on current revenue run-rate.
Healthy ordering pipeline driven by refresh capex; greenfield capex not materializing yet
Siemens mentioned strong momentum seen in ordering from both the government and private
sector customers barring utilities. The strong growth momentum is reflected in the comfort of
customers to pay for the commodity price increase, again barring utilities. Key business verticals
that are driving growth in ordering include (1) digitalization (pharma, F&B, chemicals), (2) smart
infrastructure (data centers, smart buildings), (3) generation (waste-heat recovery orders) and (4)
mobility (dedicated freight corridors, metros). The key area of weakness was in the power T&D
segment that accounts for the largest share in the energy segment. Here competition is intense
and utilities are considering deferring their ordering plans on expectation of correction in
commodity prices.
Aditya Mongia
We consolidate C&S Electric; revise FV to Rs1,740 on cut in earnings and higher 39X multiple
We cut estimates for FY2021/22 by 5%/7% accounting for the second wave adjusting current
Teena Virmani
reported margin for transient FX boost. We build a ~11.5% EBITDA margin in FY2022, similar
to the current run-rate of margin adjusted for one-offs in currency and cost provisions. In
essence, we expect the reduction in margin as discretionary cost comes back (100-150 bps) to
be negated by operating leverage benefits and faster growth in digital revenues. We ascribe a
39X multiple on June 2023E EPS versus 35X earlier based on select business themes (data
centers, EV-charging, energy efficiency). The stock trades at expensive 46X June 2023E EPS.
Contact: +91 22 6218 6427
Capital Goods Siemens
Key highlights of the results and conference call
 Results were healthy on execution. Siemens reported a good sequential growth in

revenues driven by strong order inflows. Challenges were seen in the quarter on higher
logistic costs, semiconductor chip shortage and higher commodity prices. Price actions
taken by the company to pass on higher commodity prices of aluminum, silver and
copper, curtailment of discretionary spend, optimization of fixed costs in terms of lower
rent, electricity and lower employee costs helped tide over the near-term pressure. In the
months of April and May too, the company’s factories and project sites are operational
and opportunity pipeline remained strong.
 Large orders bagged during the 1HFY21. Siemens bagged projects like solar power
evacuation in Rajasthan, waste heat recovery plant from a cement major, lift irrigation
project involving VSI based drives, signaling project from EDFC, setting up of GIS/AIS
substation, power distribution and building management project during 1HFY21. Growth
in the order inflow was driven mainly by short cycle orders from the private sector.
Government project awarding was impacted due to delays in decision making owing to
Covid but demand and pipeline from government projects continue to remain strong
particularly from transmission projects, conversion of AIS to GIS, metros, etc. The private
sector pipeline remains strong on waste heat recovery projects, data centre, hospital,
ecommerce and EV charging.
 Key developments on technology during the quarter. During the quarter, the
company entered into partnership with Ola Electric for world’s largest E-vehicle facility. It
also signed MoU with Switch Mobility for E-mobility solutions for providing charging
infrastructure technology and software. It also strengthened competitiveness via
localization of vacuum interrupter. It expects to enhance medium voltage switchgear
competitiveness by localizing production of vacuum interrupter.
 Part of the cost reduction to be sustained. Price action taken during the quarter has
helped in maintaining the margins. Also, forex gains also helped in improving margins
during 1HFY21 as against forex loss during 1HFY20. The company expects to sustain 30-
40% of the cost savings in future. Along with this, increased localization in smart
infrastructure, energy and mobility segment would also aid margins.
 Future growth outlook. Siemens has shared an optimistic outlook for the Smart
Infrastructure and Digital industries segment. It expects to benefit from growth in data
centre, hospitals and ecommerce in smart infrastructure segment and expects PLI scheme
in auto and pharma to indirectly benefit digital industries segment. Energy and mobility
segments, which are dependent upon government capex, will also benefit but with a lag.

Siemens Capital Goods
Exhibit 1: Siemens reported strong growth in revenues though margin in 1HFY21 was boosted by Rs0.9 bn of FX gains, Rs0.23 bn of
change in cost provisions – adjusted margin for 1HFY21 was 11.5%, boosted by reduction in discretionary spending
Siemens (standalone) 2QFY21 - key numbers, September fiscal year-ends (Rs mn)
% change
2QFY21 2QFY21E 2QFY20 1QFY21 vs est. yoy qoq 1HFY21 1HFY20 yoy (%) FY2021E FY2020 yoy (%)
Net operating income 33,543 31,180 26,224 29,011 8 28 16 62,554 52,910 18 137,191 105,407 30
Expenses (29,129) (27,503) (24,046) (25,400) 21 15 (54,529) (47,367) 15 (120,670) (95,310) 27
Stock 983 — 2,586 1,322 2,305 5,007 — (5,385)
Raw material (23,990) (21,270) (18,864) (21,124) 27 14 (45,114) (38,029) 19 (93,290) (62,754) 49
Employee (3,681) (3,742) (4,154) (3,968) (11) (7) (7,649) (8,115) (6) (17,002) (16,013) 6
Other Exp (2,441) (2,491) (3,614) (1,630) (32) 50 (4,071) (6,230) (35) (10,378) (11,158) (7)
EBITDA 4,414 3,677 2,178 3,611 20 103 22 8,025 5,543 45 16,521 10,097 64
Other income 540 814 805 570 1,110 1,660 3,017 3,101
EBIDT 4,954 4,491 2,983 4,181 9,135 7,203 19,538 13,198
Interest (47) (86) (109) (35) (82) (186) (292) (296)
Depreciation (581) (745) (653) (616) (1,197) (1,264) (2,676) (2,709)
PBT 4,326 3,660 2,221 3,530 18 95 23 7,856 5,753 37 16,570 10,193 63
Tax (1,168) (937) (574) (908) (2,076) (1,479) (4,242) (2,628) 61
Net profit 3,158 2,723 1,647 2,622 16 92 20 5,780 4,274 35 12,328 7,565 63
Extraordinary items 125 — 74 278 403 74 — —
RPAT 3,283 2,723 1,721 2,900 21 91 13 6,183 4,348 42 12,328 7,565 63
Key ratios (%)
Raw material/Sales 68.6 68.2 62.1 68.3 68.4 62.4 68.0 64.6
Employee expenses/Sales 11.0 12.0 15.8 13.7 12.2 15.3 12.4 15.2
Other expenses/Sales 7.3 8.0 13.8 5.6 6.5 11.8 7.6 10.6
EBITDA margin 13.2 11.8 8.3 12.4 12.8 10.5 12.0 9.6
Tax rate 27.0 25.6 25.8 25.7 26.4 25.7 25.6 25.8
PAT margin 9.4 8.7 6.3 9.0 9.2 8.1 9.0 7.2
EPS (Rs) 8.9 7.6 4.6 7.4 16 92 20 16.2 12.0 34.6 21.2 63
Order details
Order booking 33,090 25,440 32,060 30 3 65,150 57,361 14 115,694
Order backlog 126,770 124,600 127,970 2 (1) 126,770 124,600 2 123,600

Exhibit 2: Strong performance was seen in Gas and Power and Smart Infrastructure in terms of margins. Revenues remained strong across
all segments except mobility on yoy basis
Segmental revenues and margins of Siemens for 2QFY21, September fiscal year-ends (Rs mn)
% change
2QFY21 2QFY21E 2QFY20 1QFY21 vs. est. yoy qoq 1HFY21 1HFY20 yoy (%) FY2021E FY2020 yoy (%)
Revenues
Gas and Power 11,913 11,807 10,267 10,169 1 16 17 22,082 19,153 15 46,608 40,529 15
Smart infrastructure 10,455 8,984 7,745 8,821 16 35 19 19,276 15,335 26 45,531 27,635 65
Mobility 2,341 2,735 2,378 1,864 (14) (2) 26 4,205 4,463 (6) 10,554 8,443 25
Digital industry 7,917 6,847 5,267 7,699 16 50 3 15,616 11,268 39 32,035 19,415 65
Portfolio of companies 1,305 1,164 933 936 12 40 39 2,241 1,937 16 4,419 3,843 15
Others 293 279 243 184 5 21 59 477 400 19 1,014 966 5
Total 34,224 31,817 26,833 29,673 8 28 15 63,897 52,556 22 140,161 100,831 39
Less: Intersegmental (681) (636) (609) (662) (1,343) (1,126) (2,971) (2,137)
Total revenues 33,543 31,180 26,224 29,011 8 28 16 62,554 51,430 22 137,191 98,694 39
EBIT
Gas and Power 1,804 1,358 887 1,277 33 103 41 3,081 1,861 66 5,548 4,014 38
Smart infrastructure 952 629 26 663 51 3,562 44 1,615 770 110 3,650 1,013 260
Mobility 237 232 271 168 2 (13) 41 405 535 (24) 1,138 953 19
Digital industry 686 616 263 802 11 161 (14) 1,488 893 67 3,029 1,156 162
Portfolio of companies 125 64 71 50 95 76 150 175 98 79 363 200 81
Others 29 32 7 35 (10) 314 (17) 64 45 42 117 63 86
Total 3,833 2,932 1,525 2,995 31 151 28 6,828 4,202 62 13,845 7,399 87
Add other income 540 814 805 570 1,110 1,660 3,017 3,099 (3)
Less Finance cost (47) (86) 109 (35) (82) 32 (292) (292) 0
Total PBT 4,326 3,660 2,439 3,530 18 77 23 7,856 5,894 33 16,570 10,206 62
EBIT margin (%)
Gas and Power 15.1 11.5 8.6 12.6 14.0 9.7 11.9 9.9
Smart infrastructure 9.1 7.0 0.3 7.5 8.4 5.0 8.0 3.7
Mobility 10.1 8.5 11.4 9.0 9.6 12.0 10.8 11.3
Digital industry 8.7 9.0 5.0 10.4 9.5 7.9 9.5 6.0
Portfolio of companies 9.6 5.5 7.6 5.3 7.8 5.1 8.2 5.2
Others 9.9 11.5 2.9 19.0 13.4 11.3 11.5 6.5
Total 11.4 9.4 5.8 10.3 10.9 8.2 10.1 7.5
Exhibit 3: Revenue visibility remains at less than one year on forward sales. Order inflow has
remained stable for past three quarters
Order booking, order backlog & visibility trend for Siemens, September fiscal year-ends, 1QFY12-2QFY21
Order booking (Rs bn, LHS) Order backlog (Rs bn, LHS) Visibility (X, RHS)
175 1.8
150 1.6
1.4
125
1.2
100 1.0
75 0.8
0.6
50
0.4
25 0.2
0 0.0
1QFY12
1QFY13
3QFY13
3QFY14
1QFY15
1QFY16
3QFY16
3QFY17
1QFY18
1QFY19
3QFY19
3QFY20
1QFY21
3QFY12
1QFY14
3QFY15
1QFY17
3QFY18
1QFY20

Exhibit 4: Siemens is dependent on non-government business and on short-cycle business has increased to 83% of its revenues during
1H21
Split of revenues of Siemens India, September fiscal year-ends, 2017-21 (Rs bn)
Non-government Government Product / System Project Domestic Export

127 130 99 53 63 127 130 99 53 63 127 130 99 53 63
23.1% 17.1% 20.4% 18.7% 22.4% 20.4% 21.8%

29.8% 27.1% 25.5% 31.6% 31.3% 32.2%
33.6% 35.5%
76.9% 82.9% 79.6% 81.3% 77.6% 79.6% 78.2%

70.2% 72.9% 74.5% 68.4% 68.7% 67.8%
66.4% 64.5%
2018 2019 2020 1H20 1H21 2018 2019 2020 1H20 1H21 2018 2019 2020 1H20 1H21
Exhibit 5: Gross margin has remained strong on cost-reduction measures and price actions
Raw material cost to sales for Siemens, September fiscal year-ends, 2007-1H21 (%)
90
78.4 78.6 76.2 75.2
75.6
80 72.8 74.6 70.8
67.4 65.4 66.7 67.5 68.1 68.4 68.4
70
60
50
40
30
20
10
-
2007
2008
2009
2011
2012
2013
2015
2016
2017
2020
2010
2014
2018
2019
1H21

Exhibit 6: We cut our estimates by 5%/7% on lower margin and also incorporate C&S acquisition
Change in estimates for Siemens, September fiscal year-ends, 2019-22E (Rs mn)
New estimates Old estimates Revision(%)

2019 2020 2021E 2022E 2021E 2022E 2021E 2022E
Revenues 130,005 98,694 137,191 164,958 132,924 151,774 3 9
Gas and Power 51,736 40,529 46,608 51,269 47,824 52,607 (3) (3)
Smart infrastructure 37,387 27,635 45,531 60,228 38,689 44,492 18 35
Mobility 11,203 8,443 10,554 12,665 11,820 13,593 (11) (7)
Digital industry 26,874 19,415 32,035 38,442 32,035 38,442 — —
Portfolio of companies 4,595 3,843 4,419 4,861 4,419 4,861 — —
Others less intersegmental (1,790) (1,171) (1,956) (2,507) (1,864) (2,221) 5 13
EBITDA 15,115 9,903 16,521 18,841 16,957 19,249 (3) (2)
EBITDA margin (%) 11.6 10.0 12.0 11.4 12.8 12.7
PBT 16,963 10,206 16,570 18,953 17,605 20,553 (6) (8)
PAT 11,231 7,574 12,328 14,101 13,098 15,291 (6) (8)
EPS (Rs) 31.5 21.3 34.6 39.6 36.8 43.0 (6) (8)
Growth (%)
Revenues 2 (24) 39 20 35 14
Gas and Power 7 (22) 15 10 18 10
Smart infrastructure (2) (26) 65 32 40 15
Mobility 14 (25) 25 20 40 15
Digital industry 13 (28) 65 20 65 20
Portfolio of companies (51) (16) 15 10 15 10
EBITDA 15 (34) 67 14 71 14
PAT 26 (33) 63 14 73 17

Exhibit 7: We estimate ~17%/19% CAGR in revenues/PAT for Siemens over the next decade, yielding to a revised earnings multiple of 39X
Our assessment of drivers of revenue growth for Siemens India over the next decade, September fiscal year-ends, 2023-33 (%)
CAGR Comment
Revenue CAGR
Nominal growth in GDP 10
Add-on growth from increasing share
We assume improvement in share of manufacturing in GDP 25% by 2032 versus
of manufacturing over the next 3
current 17% levels and reflect it on base on business linked to manufacturing
decade
Base growth 13
We expect a ~20% CAGR in revenues of Motors and Drives, a portfolio that accounts
for ~15% of current overall revenue base. We envisage push from EESL towards
upgrading existing base of inefficient mtors to accelerate replacement demand over
Motors and Drives 0.6
the next five years. We expect EESL to then focus on increasing penetration of drives
in motor systems, helping sustain growth momentum in the motors and drives
segment over the next decade.
We factor in ~70,000 EV charging points to be set up over the next five years,
matching the number of petrol outlets in the country at present. We build in 140,000
charging points over the next decade. This would potentially suffice to service a base
EV charging 0.5
of 1/2 mn EVs on roads over the next five/ten years, much lower than the country's
target of having 5 mn vehicles on road over the next five years. We assume a 10%
share for Siemens based on our assessment of its share gobally.
Builgings Technologies - Commercial We factor add on market volumes of Rs100 bn over the next decade from energy
0.8
buildings efficiency and other measures to upgrade old buildings
We expect a 15% CAGR in the infrastructure sub-segment based on announced
Buildings Tecnologies - Infrastructure 0.2
projects for the next five years in year business lines - metros, airports, datacenters
We assume 1% share of spending in setting up 100 Smart Cities expenditure as annual
Buildings Technologies - Smart Ciities 0.1 revenues for data aggregation and assessment. We extrapolate to the 500 cities that
would be part of the DataSmart strategy over time
We factor in a strong 25% growth in the data centers market for Siemens India for
Data centers 0.2 the next five years and expect sustained growth in its smart buildings segment over
the next decade.
We expect advent of communication technologies high on speed and low on latency

combined with Industry 4.0 solutions to accelerate the current high-teens growth
Automation 1.4 trajectory of robotics business in India over the next decade - we factor in ~20%
revenue CAGR. We expect automation in general to see a gradual acceptance over
next decade as more use cases help establish cost savings.
Revenue CAGR 17
PAT CAGR
Difference between revenue and PAT We assume a ~250 bps expansion over FY2023-33 on account of gross margin benefit
2
CAGR (100 bps) and operating leverage (150 bps)
PAT CAGR 19

Exhibit 8: Siemens’ (standalone) financials, September fiscal year-ends, 2012-23E (Rs mn)
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021E 2022E 2023E
Income statement
Sales 129,199 113,526 106,625 105,124 108,095 110,148 127,251 130,005 98,694 137,191 164,958 189,702
Expenses (120,286) (109,319) (100,683) (95,363) (97,891) (99,636) (114,090) (114,890) (88,791) (120,670) (146,117) (167,164)
RM (98,478) (85,368) (75,542) (70,814) (71,812) (73,505) (85,864) (87,561) (63,207) (93,290) (112,171) (128,997)
O ther expenses (9,849) (10,427) (11,023) (10,607) (11,940) (12,205) (13,739) (11,854) (10,180) (10,378) (13,874) (15,505)
Employee expenses (11,959) (13,524) (14,118) (13,942) (14,139) (13,926) (14,487) (15,475) (15,404) (17,002) (20,071) (22,662)
EBITDA 8,913 4,207 5,942 9,761 10,204 10,512 13,161 15,115 9,903 16,521 18,841 22,537
O ther income 575 345 1,039 1,604 1,644 2,547 2,800 3,940 3,099 3,017 2,857 3,174
Interest (270) (189) (82) (73) (91) (77) (82) (112) (292) (292) (292) (292)
Depreciation (2,010) (2,502) (2,291) (2,156) (2,264) (1,966) (1,967) (1,980) (2,504) (2,676) (2,453) (2,548)
PBT 7,208 1,861 4,608 9,137 9,493 11,016 13,912 16,963 10,206 16,570 18,953 22,871
Tax (2,379) (246) (2,403) (5,131) (3,146) (3,982) (4,973) (5,732) (2,632) (4,242) (4,852) (5,855)
Net profit 4,830 1,615 2,205 4,006 6,347 7,034 8,939 11,231 7,574 12,328 14,101 17,016
Extraordinary items (1,399) 325 3,827 7,828 22,824 4,302 — (362) (9) 403 — —
RPAT 3,430 1,940 6,032 11,834 29,171 11,336 8,939 10,869 7,565 12,731 14,101 17,016
EPS (Rs) 13.6 4.5 6.2 11.2 17.8 19.8 25.1 31.5 21.3 34.6 39.6 47.8
Balance sheet
Equity share capital 704 712 712 712 712 712 712 712 712 712 712 712
Reserves & surplus 38,922 39,591 43,044 50,554 65,107 76,335 82,342 89,724 94,028 102,486 111,854 123,159
Shareholders funds 39,626 40,303 43,756 51,266 65,819 77,047 83,054 90,436 94,740 103,198 112,566 123,871
Loan funds — — — — — — — — — — — —
Total sources of funds 39,626 40,303 43,756 51,266 65,819 77,047 83,054 90,436 94,740 103,198 112,566 123,871
Gross block 24,356 26,852 28,114 28,802 27,757 16,348 18,420 19,702 18,583 22,583 25,383 28,463
Accumulated depreciation (10,234) (13,063) (14,558) (15,269) (15,802) (4,083) (5,948) (7,798) (8,792) (11,468) (13,921) (16,469)
Net block 14,122 13,789 13,556 13,533 11,955 12,265 12,472 11,904 11,651 11,115 11,462 11,994
CWIP 850 889 409 321 791 1,430 624 583 880 880 880 880
Net fixed assets 14,972 14,678 13,965 13,854 12,746 13,695 13,096 12,487 12,531 11,995 12,342 12,874
Cash balances 9,768 6,038 11,210 20,959 35,094 40,713 36,457 48,913 55,517 45,028 49,070 55,975
Net current assets excl. cash 11,300 14,858 14,762 11,515 13,079 18,569 29,244 26,076 19,723 22,601 27,581 31,450
Net deferred tax assets 3,176 4,297 3,739 3,175 3,253 2,442 2,665 2,410 2,481 2,481 2,481 2,481
Total assets 39,626 40,303 43,756 51,266 65,819 77,047 83,054 90,436 94,740 102,836 112,204 123,509
Cash flow statement
Cash flow from operations 433 1,018 6,078 6,204 5,082 5,538 422 12,305 6,765 9,400 9,010 12,814
Capex (3,785) (1,874) 2,305 (2,188) (2,874) 3,289 (1,788) (336) (98) (2,140) (2,800) (3,080)
Free cash flow (3,352) (856) 8,383 4,016 2,208 8,827 (1,366) 11,969 6,667 7,260 6,210 9,734
Cash flow from financing activities (2,593) (2,844) (2,204) (2,703) (16,121) (2,598) (3,054) (3,113) (3,847) (4,565) (5,025) (6,003)
Net cash generated (2,116) (3,681) 5,512 10,077 (8,308) 16,416 (2,889) (1,347) 7,604 (9,792) 4,376 7,240
Cash balance at start of year 11,625 9,767 6,038 11,210 20,959 12,278 28,349 25,133 23,440 30,712 20,585 24,627
Cash balance at end of year 9,767 6,038 11,210 20,959 12,316 28,349 25,133 23,440 30,712 20,585 24,627 31,532
Growth (%)
Revenue growth 6.7 (12.1) (6.1) (1.4) 2.8 1.9 15.5 2.2 (24.1) 39.0 20.2 15.0
EBITDA growth (34.0) (52.8) 41.2 64.3 4.5 3.0 25.2 14.8 (34.5) 66.8 14.0 19.6
Recurring PAT growth (42.9) (66.6) 36.5 81.7 58.5 10.8 27.1 25.6 (32.6) 62.8 14.4 20.7
Key ratios (%)
EBITDA margin 6.9 3.7 5.6 9.3 9.4 9.5 10.3 11.6 10.0 12.0 11.4 11.9
PAT margin 3.7 1.4 2.1 3.8 5.9 6.4 7.0 8.6 7.7 9.0 8.5 9.0
RoE 12.4 4.0 5.2 8.4 10.8 9.8 11.2 12.9 8.2 12.5 13.1 14.4
RoCE 12.0 3.6 5.2 8.4 10.7 9.8 11.1 12.9 7.9 12.2 12.9 14.2

CAUTIOUS
Automobiles & Components
India JUNE 01, 2021
UPDATE
BSE-30: 51,935
Look ahead. Auto volumes reported by OEMs were largely impacted by the Covid
second wave-led restrictions in various states. Export 2W segment volumes remained
strong and domestic tractor segment volumes came in better than our expectations led
by the strong recovery in the last few days of May. We expect sharp recovery in the
domestic PV segment given a strong order book and lower channel inventory. All the
other segments remained under pressure. Yoy comparison of volumes is not relevant
due to the lockdown.
Expect sharp recovery in domestic PV segment volumes once restrictions ease
As per our estimates, domestic PV industry volumes declined by >50% on a mom basis in May
2021 due to (1) several restrictions in various states for the second wave of Covid-19 pandemic
and (2) supply-chain constraints faced by a few OEMs. Maruti’s total volumes declined by 71%
mom in May 2021 led by steep declines across segments. The company has channel inventory
of around 2-3 weeks versus normal average of 4-6 weeks and has order backlog of ~200,000
units resulting in higher waiting periods for certain models. Overall, we expect the company’s
volumes to recover strongly once the situation normalizes. Tata Motors and Hyundai Motors
domestic volumes declined by 40-49% on a mom basis in May 2021. Also, M&M’s total
volumes declined by 56% on a mom basis in May 2021.
Export 2W segment continued its outperformance; domestic 2W segment under pressure
Bajaj Auto and TVS Motor total volumes declined by 30% on a mom basis led by weakness in
domestic 2W and 3W segment volumes in May 2021. However, the export segment continued
to remain strong, which arrested the volume decline for both of these companies. Hero
MotoCorp and Royal Enfield volumes were down by 49-51% on a mom basis in May 2021. In
the domestic market, dealer inventory continues to remain at higher levels.
CV segment volumes impacted by slowdown in economic activity amid various restrictions
Commercial vehicle volumes continued to rise on mom basis aided by strong growth in freight
volumes and high truck utilization levels until March 2021. However, in April and May 2021,
volumes were impacted due to various restrictions in states that hampered economic activity.
Truck rentals declined by 23% on a mom basis in May 2021 resulting in fleet utilization coming
down to 35-40%. As a result, truck rentals also declined by 5-8% on a mom basis in May
2021, which had held up well until March 2021. Demand recovery is expected to be U-shaped
rather than V-shaped given an uncertain economic environment, as per IFTRT. Tata Motors total
CV volumes declined by 32% mom and Ashok Leyland total CV volumes declined by 62%
mom.
Tractor segment fundamentals remain intact; expect recovery post easing of restrictions
Tractor volumes came in better than our expectations led by strong recovery in the last few days
of May, as farmers start preparing their land for the upcoming Kharif crop season. A bumper Hitesh Goel
Rabi harvest, record procurement, food prices holding up, gradual opening up of mandis and
expectations of a normal monsoon should support tractor demand going forward. M&M tractor
volumes declined by 12% mom whereas Escorts volumes declined by 8% mom in May 2021. Rishi Vora
Inventory levels are almost at normal levels now in tractors.
In terms of our volume forecast for FY2022E, we expect some downward revision to our
M&HCV numbers and we have already cut our domestic 2W industry volume growth from 15%
to 12% on a yoy basis. We continue to remain optimistic about recovery in domestic PV and
tractor segments.
Refer to Exhibits 1 to 9 for details on monthly sales numbers for OEMs. kspcg.research@kotak.com
Contact: +91 22 6218 6427
India Automobiles & Components
Exhibit 1: Maruti Suzuki reported 71% mom decline in volumes in May 2021
Maruti Suzuki monthly sales volume, March fiscal year-ends (units)
FYTD
May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21 2022 2021
Sales volume (units)
Alto, S Presso 1,995 10,458 17,258 19,709 27,246 28,462 22,339 24,927 25,153 23,959 24,653 25,041 4,760 29,801 1,995
Swift, Baleno, Ritz, Celerio, Dzire, New WagnoR 6,262 26,696 51,529 61,956 84,213 95,067 76,630 77,641 76,935 80,517 82,201 72,318 20,343 92,661 6,262
Gypsy, Ertiga, S-Cross, Brezza, XL6 3,636 9,764 19,177 21,030 23,699 25,396 23,753 25,701 23,887 26,884 26,174 25,484 6,355 31,839 3,636
Omni and Eeco 1,617 3,803 8,501 9,115 11,220 13,309 11,183 11,215 11,680 11,891 11,547 11,469 1,096 12,565 1,617
Ciaz 192 553 1,303 1,223 1,534 1,422 1,870 1,270 1,347 1,510 1,628 1,567 349 1,916 192
Light commercial vehicle 163 1,026 2,232 2,292 2,128 3,169 3,181 5,726 3,602 2,722 3,315 1,272 868 2,140 163
Sales to other OEMs 23 839 1,307 1,379 2,568 6,037 5,263 3,808 5,703 5,500 5,899 5,303 1,522 6,825 23
Total domestic 13,888 53,139 101,307 116,704 152,608 172,862 144,219 150,288 148,307 152,983 155,417 142,454 35,293 177,747 13,888
Exports 4,651 4,289 6,757 7,920 7,834 9,586 9,004 9,938 12,445 11,486 11,597 17,237 11,262 28,499 5,283
Total volumes 18,539 57,428 108,064 124,624 160,442 182,448 153,223 160,226 160,752 164,469 167,014 159,691 46,555 206,246 19,171
Yoy change (%)
Alto, S Presso (87.8) (44.2) 49.1 94.7 35.7 (0.3) (15.1) 4.4 (2.8) (12.9) 54.2 138.6
Swift, Baleno, Ritz, Celerio, Dzire, New WagnoR (91.1) (57.6) (10.4) 14.2 47.3 26.6 (1.8) 18.2 (8.8) 15.3 102.9 224.9
Gypsy, Ertiga, S-Cross, Brezza, XL6 (81.0) (45.1) 26.3 13.5 10.1 9.9 2.4 8.0 45.1 18.9 119.9 74.8
Omni and Eeco (86.2) (59.0) (13.4) 5.3 12.8 32.9 10.0 46.9 (5.2) 5.9 93.5 (32.2)
Ciaz (94.7) (76.2) (45.6) (23.4) (10.6) (40.0) 29.1 (28.9) 61.3 (40.6) (12.6) 81.8
Light commercial vehicle (92.7) (49.1) 28.9 47.4 4.0 30.5 40.3 259.9 49.7 507.6 350.4 432.5
Total domestic (88.9) (53.7) 1.3 20.2 32.2 19.8 0.4 19.5 2.6 11.8 96.5 154.1
Exports (48.8) (56.4) (27.0) (15.3) 9.0 4.7 29.7 31.4 29.3 11.9 146.1 142.1
Total volumes (86.2) (54.0) (1.1) 17.1 30.8 18.9 1.7 20.2 4.3 11.8 99.3 151.1
2-year CAGR (%)
Alto, S Presso (40.3) (32.4) (25.9) (11.7) (6.9) (13.6) (5.0) 3.8 (1.6) 21.0 4.9 (46.1)
Swift, Baleno, Ritz, Celerio, Dzire, New WagnoR (38.9) (16.8) (6.8) 6.7 21.1 2.8 23.0 0.9 5.3 (0.2) 0.1 (46.1)
Gypsy, Ertiga, S-Cross, Brezza, XL6 (28.9) (11.5) 8.2 4.7 10.6 0.5 12.7 3.2 11.0 1.2 7.5 (42.4)
Omni and Eeco (44.1) (26.6) (18.3) (12.5) (1.3) (10.8) (15.9) (12.2) (9.6) (16.2) (0.8) (69.5)
Ciaz (40.8) 421.0 (58.2) (50.4) (39.6) (30.2) (48.2) (32.2) (30.0) (33.4) (25.0) (68.8)
Light commercial vehicle (20.6) 13.8 12.7 2.2 21.4 22.3 84.9 15.3 11.5 13.3 (25.9) (37.6)
Total domestic (37.4) (18.9) (11.1) (0.3) 11.9 (0.6) 11.2 2.1 4.9 2.6 3.1 (47.0)
Exports (32.2) (18.7) (13.1) (5.3) 5.2 9.4 20.4 14.0 9.5 5.3 37.1 11.3
Total volumes (37.1) (18.9) (11.2) (0.6) 11.5 (0.1) 11.7 2.9 5.2 2.8 5.6 (41.2)
Exhibit 2: M&M’s May 2021 total volumes declined by 35% on a mom basis; tractor volumes down by 12% on a mom basis
Mahindra & Mahindra monthly sales volume, March fiscal year-ends (units)
FYTD
Passenger UVs (incl. Verito) 3,867 8,075 11,025 13,651 14,857 18,622 18,212 16,182 20,634 15,391 16,700 18,285 8,004 26,289 3,867
Commercial Vehicles 5,170 10,417 13,103 15,299 18,907 20,588 19,029 13,930 13,388 9,202 17,116 14,104 7,236 21,340 5,170
3-wheelers 39 13 83 307 587 3,118 3,854 2,865 2,841 2,357 4,461 2,043 272 2,315 39
Exports (Auto sector) 484 853 1,467 1,169 1,569 2,021 1,636 2,210 2,286 1,827 2,126 2,005 1,935 3,940 1,217
Auto division 9,560 19,358 25,678 30,426 35,920 44,349 42,731 35,187 39,149 28,777 40,403 36,437 17,447 53,884 10,293
Tractors (Dom + Exp) 24,341 36,544 25,402 24,458 43,386 46,558 32,726 22,417 34,778 28,146 30,970 27,523 24,184 51,707 29,113
Total 33,901 55,902 51,080 54,884 79,306 90,907 75,457 57,604 73,927 56,923 71,373 63,960 41,631 105,591 39,406
Yoy change (%)
Passenger UVs (incl. Verito) (81.2) (57.1) (34.5) 1.1 3.7 0.9 24.4 3.1 4.2 40.7 393.5 107.0
Commercial vehicles (71.1) (36.5) (17.9) 4.2 0.2 (12.7) 9.5 (13.0) (41.4) (42.0) 636.2 40.0
3-wheelers (99.1) (99.7) (98.2) (94.3) (92.2) (56.4) (41.5) (46.7) (65.1) (38.7) 959.6 597.4
Exports (Auto sector) (79.5) (72.3) (45.0) (53.6) (40.8) (25.2) (37.6) 2.8 29.8 (0.7) 67.3 299.8
Auto division (79.0) (54.5) (36.0) (15.7) (17.1) (14.5) 3.6 (10.3) (25.5) (11.4) 445.9 82.5
Tractors (Dom + Exp) (1.5) 10.4 27.1 65.1 17.2 2.5 55.6 24.6 50.4 24.8 127.5 (0.6)
Total (51.7) (26.1) (15.1) 7.8 (1.3) (6.6) 21.2 0.7 (2.3) 3.4 239.6 22.8
2-year CAGR (%)
Passenger UVs (incl. Verito) (33.3) (25.3) (16.9) (16.7) (12.0) 6.1 3.6 (7.0) (23.2) (22.3) (4.3) (37.7)
Commercial vehicles (26.4) (17.6) (13.2) (9.2) (8.1) (1.7) (9.2) (23.1) (34.0) (16.3) (9.8) (36.4)
3-wheelers (94.5) (87.8) (75.9) (70.9) (32.9) (17.8) (21.9) (31.2) (35.4) (19.8) (31.2) (75.6)
Exports (Auto sector) (50.4) (24.8) (37.1) (35.4) (18.8) (32.0) (15.1) (15.8) (23.1) (26.5) (2.7) (9.5)
Auto division (34.5) (26.2) (20.7) (19.2) (12.9) (2.7) (5.9) (16.2) (28.3) (19.9) (8.7) (38.0)
Tractors (Dom + Exp) (5.0) 5.8 17.3 7.4 (0.9) 12.3 13.5 25.1 21.8 25.4 (1.8) (1.1)
Total (19.2) (14.5) (8.9) (7.5) (7.3) 3.1 0.4 (2.6) (12.9) (7.1) (5.9) (23.0)

Automobiles & Components India
Exhibit 3: VECV volumes declined sequentially in April 2021

VECV monthly sales volume, March fiscal year-ends (units)
FYTD
Domestic volumes 430 1,016 1,733 2,190 2,940 3,815 3,088 4,069 4,964 4,825 6,054 1,555 656 2,211 468
Export volumes 231 305 401 250 510 315 473 618 555 510 816 541 519 1,060 272
Total sales 661 1,321 2,134 2,440 3,450 4,130 3,561 4,687 5,519 5,335 6,870 2,096 1,175 3,271 740
Yoy change (%)
Domestic volumes (90.3) (75.4) (53.1) (30.3) (6.4) 15.3 4.7 (7.6) 1.9 24.5 329.7 52.6
Export volumes (24.0) (16.7) 31.0 (21.4) (4.3) (15.3) (5.8) 23.6 7.4 (9.6) 1,117.9 124.7
Total sales (86.1) (70.7) (46.7) (29.5) (6.1) 12.2 3.2 (4.4) 2.4 20.2 365.4 77.8
2-year CAGR (%)
Domestic volumes (57.0) (42.0) (32.8) (28.1) (13.7) (10.1) (10.8) (2.1) (4.9) (9.1) (34.8) (61.6)
Export volumes (39.0) (27.3) (52.4) (24.8) (33.2) (22.4) (21.4) (6.2) (26.0) (18.1) 57.2 30.7
Total sales (54.3) (39.9) (36.0) (27.6) (15.8) (12.0) (12.4) (2.5) (7.7) (10.3) (26.5) (50.3)
Exhibit 4: Royal Enfield volume declined by 49% on a mom basis in May 2021
Royal Enfield monthly sales volume, March fiscal year-ends (units)
FYTD
Royal Enfield 19,113 38,065 40,334 50,144 60,041 66,891 63,782 68,995 68,887 69,659 66,058 53,298 27,294 80,592 19,204
Domestic 18,429 36,510 37,925 47,571 55,998 62,760 59,084 65,492 64,372 65,114 60,173 48,789 20,073 68,862 18,429
Exports 684 1,555 2,409 2,573 4,043 4,131 4,698 3,503 4,515 4,545 5,885 4,509 7,221 11,730 775
Yoy change (%)
Royal Enfield (69.4) (34.8) (25.7) (5.2) 0.9 (7.0) 5.6 36.9 8.4 9.6 84.4 42.8
Domestic (69.4) (33.7) (22.9) (2.4) 2.1 (7.1) 1.4 35.1 5.0 6.4 84.4 8.9
Exports (68.3) (52.3) (53.0) (38.0) (12.9) (6.7) 121.7 81.8 102.6 93.6 84.8 955.7
2-year CAGR (%)
Royal Enfield (28.5) (23.6) (15.0) (8.5) (2.6) (1.5) 8.8 (2.7) 5.5 4.2 (7.9) (33.8)
Domestic (29.1) (24.8) (16.4) (10.6) (5.3) (4.7) 8.1 (4.7) 4.1 1.5 (9.2) (42.3)
Exports (9.3) 8.1 37.4 59.1 218.6 155.8 24.7 57.1 33.1 56.7 9.8 82.8
Exhibit 5: Escorts volumes declined by 8% on a mom basis in May 2021

Escorts monthly sales volume, March fiscal year-ends (units)
FYTD
Escorts 6,594 10,851 5,322 7,268 11,851 13,664 10,165 7,733 9,021 11,230 12,337 6,979 6,423 13,402 7,299
Domestic 6,454 10,623 4,953 6,750 11,453 13,180 9,662 7,230 8,510 10,690 11,730 6,386 6,158 12,544 7,067
Exports 140 228 369 518 398 484 503 503 511 540 607 593 265 858 232
Yoy change (%)
Escorts (3.4) 21.1 9.5 80.1 9.2 2.3 33.0 88.0 48.8 30.6 126.6 (2.6)
Domestic (0.5) 22.8 9.9 79.4 8.9 1.1 30.9 90.0 45.6 32.8 124.4 (4.6)
Exports (58.7) (26.9) 3.9 90.4 19.2 51.7 91.3 63.3 134.4 (2.2) 181.0 89.3
2-year CAGR (%)
Escorts 4.3 (2.6) 22.9 5.7 2.0 12.7 29.7 22.7 24.5 1.8 15.1 (3.0)
Domestic 4.3 (5.0) 20.2 5.0 1.2 12.4 31.0 21.5 24.3 1.3 13.2 (2.6)
Exports 0.7 70.5 93.7 34.2 33.2 17.6 14.2 49.4 29.5 13.2 46.1 (11.6)

India Automobiles & Components
Exhibit 6: Hero MotoCorp total volumes declined by 51% mom in May 2021
Hero MotoCorp monthly sales volume, March fiscal year-ends (units)
FYTD
Total sales 112,682 450,586 514,509 584,456 715,718 806,848 591,091 447,335 485,889 505,467 576,957 372,285 183,044 555,329 112,682
Yoy change (%) (82.7) (26.9) (4.0) 7.5 16.9 34.6 14.4 5.3 (3.1) 1.5 72.4 62.4
2-year CAGR (%) (20.0) (13.0) (7.6) (3.5) 4.8 (1.6) (0.7) (8.8) (9.5) (0.4) (19.5) (47.0)
Exhibit 7: Ashok Leyland CV volume declined by 62% mom in May 2021

Ashok Leyland monthly sales volume, March fiscal year-ends (units)
FYTD
LCV 1,154 1,639 3,070 3,736 4,702 5,401 5,545 5,878 5,752 5,901 5,860 4,007 1,246 5,253 1,154
MHCV 266 755 1,705 2,589 3,642 4,588 5,114 6,884 7,374 7,802 9,901 4,333 1,953 6,286 266
Total CVs 1,420 2,394 4,775 6,325 8,344 9,989 10,659 12,762 13,126 13,703 15,761 8,340 3,199 11,539 1,420
Yoy change (%)
LCV (72.7) (62.6) (27.0) (3.8) 16.5 14.2 31.7 41.9 40.4 43.7 1,583.9 8.0
MHCV (97.0) (91.0) (74.6) (51.6) (23.2) (10.6) (14.3) (2.0) (4.9) 5.9 440.7 634.2
Total CVs (89.2) (81.3) (56.3) (31.5) (5.0) 1.3 4.8 14.3 10.8 19.4 623.3 125.3
2-year CAGR (%)
LCV (39.9) (14.5) (6.0) (4.4) 0.5 12.2 18.3 6.8 9.1 3.2 (3.2) (45.7)
MHCV (74.1) (60.6) (55.6) (49.4) (31.6) (23.4) (21.9) (29.2) (23.4) (21.4) (31.9) (53.3)
Total CVs (61.1) (43.9) (39.7) (34.4) (18.8) (9.9) (9.2) (18.5) (13.3) (14.5) (21.8) (50.7)
Exhibit 8: TVS Motor total volumes declined by 30% mom in May 2021
TVS Motor monthly sales volume, March fiscal year-ends (units)
FYTD
Motorcycles 26,722 84,401 106,062 119,878 139,698 173,263 133,531 119,051 136,790 137,259 157,294 133,227 125,188 258,415 118,623
Scooters 16,120 65,666 78,603 87,044 103,877 127,138 106,196 77,705 98,319 95,525 104,513 65,213 19,627 84,840 82,286
Mopeds 13,376 41,009 59,123 70,304 69,757 81,720 71,792 61,483 59,487 51,797 45,630 27,753 9,601 37,354 54,519
Three-wheelers 2,688 7,311 8,956 10,172 14,360 12,603 11,190 13,845 12,553 13,166 15,246 12,790 12,473 25,263 11,505
Total sales 58,906 198,387 252,744 287,398 327,692 394,724 322,709 272,084 307,149 297,747 322,683 238,983 166,889 405,872 266,933
Yoy change (%)
Motorcycles (81.3) (35.7) (2.0) 9.6 12.7 37.9 26.0 27.1 45.0 15.8 135.9 368.5
Scooters (83.6) (33.7) (25.3) (20.3) (12.4) 4.7 26.2 4.0 35.8 57.5 205.7 21.8
Mopeds (74.9) (22.8) 13.1 22.9 19.7 33.8 21.2 30.2 10.8 (8.7) 37.8 (28.2)
Total three-wheelers (79.0) (46.4) (35.0) (30.3) (4.3) (17.1) (35.1) (13.2) (13.3) (24.2) 41.8 364.0
Total sales (80.8) (33.2) (9.6) (1.1) 3.8 22.1 21.1 17.5 30.7 17.6 122.9 183.3
2-year CAGR (%)
Motorcycles (19.1) (6.5) (4.6) (8.4) 7.3 5.5 5.4 10.9 5.8 5.6 (3.5) (6.4)
Scooters (20.1) (18.7) (17.1) (14.6) (8.3) (2.5) (7.8) 7.4 4.8 3.0 (18.1) (55.3)
Mopeds (23.2) (6.4) (0.9) (17.2) (0.7) (2.5) 1.2 (9.6) (17.5) (20.0) (34.9) (57.6)
Total three-wheelers (23.3) (18.0) (12.0) 4.0 (5.5) (6.6) 4.5 (3.0) (2.1) 2.8 (1.2) (1.2)
Total sales (20.5) (11.3) (8.5) (12.1) (0.5) 0.4 0.1 4.2 (0.3) (0.4) (13.4) (26.3)

Automobiles & Components India
Exhibit 9: Bajaj Auto total volumes declined by 30% mom in May 2021; export segment continues to remain strong
Bajaj Auto monthly sales volume, March fiscal year-ends (units)
FYTD
Domestic motorcycles 39,286 146,695 152,474 178,220 219,500 268,631 188,196 128,642 157,404 148,934 181,393 126,570 60,342 186,912 39,286
Export motorcycles 73,512 108,427 86,082 142,838 185,351 201,659 196,797 209,942 227,532 183,629 148,740 221,603 180,212 401,815 105,521
Total motorcycles 112,798 255,122 238,556 321,058 404,851 470,290 384,993 338,584 384,936 332,563 330,133 348,173 240,554 588,727 144,807
Domestic three-wheelers 788 4,494 6,502 7,659 9,231 12,529 10,737 10,964 13,353 15,877 17,158 7,901 488 8,389 788
Exports three-wheelers 13,542 18,481 10,774 27,482 27,224 29,219 26,510 22,984 26,910 26,577 22,157 31,942 30,820 62,762 19,411
Total three-wheelers 14,330 22,975 17,276 35,141 36,455 41,748 37,247 33,948 40,263 42,454 39,315 39,843 31,308 71,151 20,199
Total sales 127,128 278,097 255,832 356,199 441,306 512,038 422,240 372,532 425,199 375,017 369,448 388,016 271,862 659,878 165,006
Yoy change (%)
Domestic motorcycles (80.9) (26.4) (10.8) 3.0 23.8 10.8 6.7 3.6 (0.2) 1.4 84.3 53.6
Exports motorcycles (53.9) (28.6) (43.1) (6.2) 16.3 28.9 17.8 30.7 30.4 12.4 32.1 145.1
Total motorcycles (69.1) (27.4) (26.0) (1.3) 20.2 17.9 12.1 18.9 15.8 7.2 56.5 113.3
Domestic three-wheelers (97.4) (85.0) (81.1) (78.2) (75.8) (65.4) (65.8) (62.2) (61.9) (27.4) (5.4) (38.1)
Exports three-wheelers (43.7) (21.2) (56.6) (7.3) 0.3 4.2 (6.5) 3.5 (0.5) 16.5 64.5 127.6
Total three-wheelers (73.5) (56.9) (70.9) (45.7) (44.2) (35.1) (37.7) (33.8) (35.2) (5.0) 24.4 118.5
Total sales (69.7) (31.3) (32.9) (8.7) 9.8 10.5 4.7 10.9 7.8 5.7 52.3 113.8
2-year CAGR (%)
Domestic motorcycles (14.6) (13.0) (9.7) (10.3) (2.3) (4.2) (9.6) (12.0) (10.6) (9.2) (21.6) (45.8)
Exports motorcycles (11.0) (19.0) (0.6) 8.3 15.4 18.0 21.8 24.4 13.9 20.0 17.5 6.3
Total motorcycles (13.1) (15.3) (5.9) (3.1) 4.2 5.4 6.4 4.8 0.7 1.0 (2.5) (18.8)
Domestic three-wheelers (63.4) (57.5) (54.6) (51.0) (42.8) (39.7) (31.1) (31.1) (32.8) (33.6) (45.1) (87.3)
Exports three-wheelers (25.2) (41.6) (13.8) (8.6) (9.1) (7.3) (2.6) (3.0) (5.8) (15.2) 1.8 13.2
Total three-wheelers (41.3) (49.5) (31.2) (28.4) (24.7) (21.5) (15.3) (15.7) (19.2) (25.0) (16.4) (24.0)
Total sales (17.1) (20.1) (9.7) (6.2) 0.5 1.9 3.7 2.2 (2.3) (3.1) (4.3) (19.5)
Exhibit 10: May 2021 volumes were impacted by restrictions is various states due to Covid
OEM sales volumes summary, March fiscal year-end
Residual volume
Residual monthly run rate (Yoy
OEM May-21 Yoy chg (%) Mom chg (%) FYTD22 volume run rate growth)
Ashok Leyland 3,199 125.3 (61.6) 11,539 15,588 57.0
Bajaj Auto 271,862 113.8 (29.9) 659,878 405,477 3.0
Eicher Motor (RE) 27,294 42.8 (48.8) 80,592 70,461 18.8
Eicher Motor (VECV) 1,175 77.8 (43.9) 3,271 5,214 32.2
Escorts 6,423 (2.6) (8.0) 13,402 10,243 3.0
Hero Motocorp 183,044 62.4 (50.8) 555,329 589,320 3.9
Maruti Suzuki 46,555 151.1 (70.8) 206,246 173,154 20.4
Mahindra and Mahindra 41,631 22.8 (34.9) 105,591 73,381 4.6
TVS Motors 166,889 183.3 (30.2) 405,872 307,402 1.0

ATTRACTIVE
Diversified Financials
India JUNE 01, 2021
UPDATE
BSE-30: 51,935
PNBHF: looking beyond capital. PNBHF’s stock has appreciated by >40% over the
past two trading sessions on the back of the proposed capital issuance. The large
infusion reduces a big overhang on the stock/business and likely provides comfort to
lenders, especially as PNB’s stake reduces to ~20%. Incrementally, the company will
need to demonstrate its ability to grow rapidly and lever up its balance sheet to deliver
on its stated guidance of ~15% RoE, especially in the backdrop of going slow in prime
housing loans and running down high-yield non-retail loans.
PNBHF announces large capital issuance
PNB Housing Finance’s board has approved capital infusion of Rs40 bn through a mix of
preferential issue (~Rs32 bn) and warrants (Rs8 bn) at issue price of Rs390 (CMP Rs450 on the
day prior to announcement). The capital raise is led by Carlyle Group (80% contribution). Post
the capital infusion, Carlyle Group will hold majority stake in the company (30.2%). PNB’s stake
will reduce to ~20.3% from 32.6%.
Salisbury Investments, family investment vehicle of Mr Aditya Puri, has picked up 0.2% stake.
His induction to the board over time will provide comfort to debt and equity investors.
As per revised trademark agreement, if PNB Housing Finance’s stake declines to <20%, PNB
Housing will have 24 months of transition period to change the brand name. Also, the company
has to pay royalty fees of maximum of 0.2% of revenue or 2% of PAT subject to a minimum
charge of Rs149.7 mn and a maximum charge of Rs300 mn once PNB’s stake falls to <30%.
Large capital issuance provides the much-needed buffer
PNBHF’s capital issuance of Rs40 bn (45% of March 2021 net worth) is significantly higher than
its previous guidance of Rs18 bn. We believe that such large issuance will likely provide comfort
to debt market investors and lenders. PNBHF’s funding from bonds and CPs reduced to 18% in
FY2021 from 53% in FY2017. PNB’s lenders have derived significant strength from Punjab
National Bank’s ownership to support in an eventuality. However, PNB was unable to
participate in the recent round, reducing its stake to 20.3% from 32.6.%; this poses some risk
to argument of PNB’s parentage support for PNBHF. In this backdrop, we believe a higher
capitalization buffer will help alleviate this concern of rating agencies and lenders.
We do not rule out PNBHF incrementally providing additional buffers (provisions/write-offs) on Nischint Chawathe
its stressed book.
 PNBHF’s gross stage 3 loans increased to 12.7% in FY2021 from <0.2% in FY2019 in the
M B Mahesh, CFA
non-retail segment; its aggregate gross stage-2 and 3 loans (included exposures proactively
classified as SICR) were Rs26.6 bn (22.5% of non-retail loan book; 7.4% SICR); the company
has ECL coverage of 47% on stage 2 and 3 loans. The company may need to provide
Dipanjan Ghosh
~Rs7.5-8 bn to increase coverage on these loans to 75-77%; the management expects large
recovery from one account in 1HFY22E.
 PNBHF’s gross stage 3 loans in the retail segment were 2.5% in FY2021, up from <0.6% in Abhijeet Sakhare
FY2019. Its aggregate gross stage 2 and 3 loans (included exposures proactively classified as
SICR) were Rs38.5 bn (7.6% of retail loan book; 1.3% SICR); the company has ECL coverage
of 17% on stage 2 and 3 loans. Collection efficiency was higher than pre-Covid levels in Ashlesh Sonje
4QFY21 at ~98.3%.
 PNBHF has restructured 2.7% of retail loans and 2.9% of non-retail loans; this translates to
2.8% of overall loans.
Contact: +91 22 6218 6427
Diversified Financials India
Where do we go from here?

PNBHF had guided for RoA of 1.6-1.8% over the next 1-2 years with gearing which could
potentially touch around 8X, to translate into RoE of ~15%. PNBHF’s asset/equity will
decline to 5.8X (pro forma, on adding back proposed capital issuance to FY2021 net worth).
The guidance of 8X leverage during 4QFY21 earnings call possibly did not factor such large
capital issuance; as such, we expect management to revisit its medium-term guidance of
leverage and RoA.
Exhibit 3 shows pro forma RoE of PNBHF at various levels of RoA; its near-term RoE will likely
be suppressed given its low leverage. Most HFCs have reported RoAs of <2% (Exhibit 4);
small HFCs engaged in affordable housing loans have reported high RoA but on a much
lower base.
High growth crucial to lever up; running down of non-retail book poses
challenges to overall loan growth
PNBHF will need to deliver high growth to lever up, apart from maintaining optimal
profitability. While it is premature to discuss the latter, we believe that the company will
need to rapidly scale up its LAP (26% of loans including non-residential premises) and recent
affordable/mass housing offering to drive loan book growth. Some challenges to overall
growth are posed by (1) its stated stance to run down its construction finance book (16% of
loans) and (2) likely lower focus on prime salaried home loan segment; this is reflected by
increasing gap in salaried home loan rates offered by frontline banks/HDFC and PNBHF.
Exhibit 12 shows the loan book break of PNBHF as of FY2021. Individual housing loans
dominate its book at 58% of total while non-retail loans (corporate term loans, LRD and
construction finance) comprise ~16%; the balance being LAP including non-residential
premises loan.
The company has decided to run down this high-yielding non-retail loan book, which will
likely provide comfort to lenders. Thus, it will need to cover up this 16% as well, in addition
to delivering overall loan book.
In FY2021, its disbursements yield on salaried home loans is 8.7% and self-employed was
9.17%. Prime salaried home loan rates offered by HDFC/frontline banks from ~6.75%. In its
recent earnings call, management acknowledged that the gap as expanded about they
intend to cover by better TAT/servicing etc.
PNBHF is incrementally focusing on affordable/mass housing loans at 11-12% yield. In the

past, the company was focused on prime housing loans (self-employed as well as salaried).
Affordable housing is however a relatively new segment, about two years old and comprised
about 10% of disbursements in FY2021. This segment has different business dynamics in
appraising and servicing the borrower. These loans will carry ticket size of up to Rs3 mn.
Notably, loans up to Rs3 mn comprised only 48% of salaried home loans as of March 2021,
up from 36% in March 2018.
LAP including non-residential premises loan earned about 10% in FY2021; this (26% of
loans) remains a focus area of the company.

India Diversified Financials
Exhibit 1: ~Rs40 bn proposed capital infusion in PNB Housing Finance

Capital infusion exercise for PNB Housing Finance, March fiscal year-end, May 2021
Capital Proposed share allocation (# mn) Shareholding (%)
amount Equity Post equity Post warrant
(Rs mn) shares Warrants Total Current allotment allotment
Pluto investments (Carlyle group) 31,850 65.3 16.3 81.6 26.1 30.2
Salisbury Investments Private Limited 250 0.5 0.1 0.6 0.2 0.2
General Atlantic Singapore 3,900 8.0 2.0 10.0 9.9 9.8 9.8
Alpha Investments (Fund managed by SSG group) 4,000 8.2 2.1 10.3 3.3 3.8
Overall 40,000 82.0 20.5 102.5
Punjab National Bank 32.6 20.3
Source: Company
Exhibit 2: ~10% BVPS dilution

Impact of capital issuance for PNB Housing, March fiscal year-end, 2021
Case: 1 Case: 2
O pening NW (Rs mn)-(1) 89,230 89,230
O pening shares (# mn) 168 168
Opening BVPS (Rs) 530 530
Opening PBR 1.2 1.2
Proposed infusion (Rs mn)-(2) 31,980 31,980
Price (Rs) 390 390
Shares (# mn) 82 82
Warrants (Rs mn)-(3) 1,999 7,995
Price (Rs) 390 390
Shares (# mn) — 21
Closing NW-(4):(1)+(2)+(3) 123,209 129,205
Closing share (# mn) 250 271
Closing BVPS (Rs) 492 477
Closing PBR 1.3 1.3
Notes:
(1) Case 1 includes warrant premium but does not reflect exercise.
(2) Case 2 factors warrant exercise.
Source: Company, Bloomberg, Kotak Institutional Equities
Exhibit 3: PNB Housing will have to deliver strong 30-40% asset CAGR and ~60-80 bps increase in RoA over FY2021-24E to be able to
deliver mid-teen RoEs
Scenario analysis of RoA and RoE (post capital infusion), March fiscal year-ends, 2022-24E
2022E 2023E 2024E
Scenario: 1 Scenario: 2 Scenario: 3 Scenario: 4 Scenario: 1 Scenario: 2 Scenario: 3 Scenario: 4 Scenario: 1 Scenario: 2 Scenario: 3 Scenario: 4
ROA (%)-assumed 1.2 1.4 1.6 1.8 1.2 1.4 1.6 1.8 1.2 1.4 1.6 1.8
Asset growth CAGR (%)-assumed 10 20 30 40 10 20 30 40 10 20 30 40
ROE (%) 8.0 9.7 11.5 13.4 7.0 9.2 11.7 14.4 7.3 10.2 13.7 17.7
Notes:
(1) We have assumed payout ratio of 20% from FY2022E.

Exhibit 4: Larger HFCs have RoAs of <2%

AUM and RoA for select HFCs, March fiscal year-end, 2021
AUM (Rs bn) ROA (%)

2019 2020 2021 2019 2020 2021
Aavas Financiers 59 78 95 3.0 3.1 2.9
Can Fin Homes 184 207 221 1.7 1.9 2.1
HDFC (core) 4,619 5,168 5,699 1.7 1.7 2.0
LIC Housing Finance 1,946 2,106 2,273 1.4 1.2 1.3
PNB Housing Finance 847 833 745 1.5 0.7 1.0
Repco Home Finance 110 116 121 2.4 2.5 NA
Notes:
(1) FY2021 data for LIC Housing Finance is KIE estimate and Repco Home Finance data is as of 9MFY21.

Exhibit 5: ECL coverage increased to 4.1% in FY2021 from 2.6% in FY2020

Asset quality details for PNB Housing Finance, March fiscal year-ends, 2018-21
2018 2019 2020 2021 YoY (%)
Overall business
Gross loans (Rs mn)
Gross stage-1 and 2 568,283 736,681 657,146 594,920 (9)
Gross stage-1 712,449 632,344 557,520 (12)
Gross stage-2 24,233 24,802 37,400 51
Gross stage-3 1,861 3,549 18,562 27,620 49
Total loans 570,144 740,230 675,708 622,540 (8)
Gross loan mix (%)
Gross stage-1 and 2 99.7 99.5 97.3 95.6 -169 bps
Gross stage-1 96.2 93.6 89.6 -403 bps
Gross stage-2 3.3 3.7 6.0 234 bps
Gross stage-3 0.3 0.5 2.7 4.4 169 bps
ECL on loans (Rs mn)
Stage-1 and 2 2,339 3,633 10,932 12,950 18
Stage-1 1,403 6,657 6,480 (3)
Stage-2 2,229 4,275 6,470 51
Stage-3 529 743 6,725 12,490 86
Total ECL 2,868 4,376 17,656 25,440 44
ECL coverage (%)
Coverage on stage-1 and 2 0.4 0.5 1.7 2.2 51 bps
Coverage on stage-1 0.2 1.1 1.2 11 bps
Coverage on stage-3 28.4 20.9 36.2 45.2 899 bps
Overall ECL coverage 0.5 0.6 2.6 4.1 147 bps
Retail segment
Gross loans (Rs mn)
Gross stage-1 and 2 558,121 522,963 491,980 (6)
Gross stage-1 545,086 507,298 466,240 (8)
Gross stage-2 13,034 15,665 25,740 64
Gross stage-3 3,250 6,609 12,710 92
Total loans 561,371 529,571 504,690 (5)
Gross loan mix (%)
Gross stage-1 and 2 75.4 77.4 79.0 163 bps
Gross stage-1 73.6 75.1 74.9 -18 bps
Gross stage-2 1.8 2.3 4.1 182 bps
Gross stage-3 0.4 1.0 2.0 106 bps
Stage-1 and 2 805 4,067 5,390 33
Stage-1 279 2,336 2,510 7
Stage-2 526 1,731 2,880 66
Stage-3 645 1,679 3,590 114
Total ECL 1,449 5,746 8,980 56
ECL coverage (%)
Coverage on stage-1 and 2 0.1 0.8 1.1 32 bps
Overall ECL coverage 0.3 1.1 1.8 69 bps
Corporate segment
Gross loans (Rs mn)
Gross stage-1 and 2 180,235 134,183 102,950 (23)
Gross stage-1 169,037 125,045 91,290 (27)
Gross stage-2 11,199 9,138 11,660 28
Gross stage-3 299 11,954 14,910 25
Total loans 180,534 146,137 117,860 (19)
Gross loan mix (%)
Gross stage-1 and 2 24.3 19.9 16.5 -332 bps
Gross stage-1 22.8 18.5 14.7 -384 bps
Gross stage-2 1.5 1.4 1.9 52 bps
Gross stage-3 0.0 1.8 2.4 63 bps
Stage-1 and 2 2,828 6,865 7,550 10
Stage-1 1,125 4,321 3,960 (8)
Stage-2 1,703 2,544 3,590 41
Stage-3 99 5,045 8,900 76
Total ECL 2,927 11,910 16,450 38
ECL coverage (%)
Coverage on stage-1 and 2 1.6 5.1 7.3 222 bps
Overall ECL coverage 1.6 8.1 14.0 581 bps

Exhibit 6: PNB Housing has ~30% coverage on stressed loans

Stressed loans and coverage, March fiscal year-ends, 2019-21 (Rs mn)
2019 2020 2021 YoY
Gross stage-2 24,233 24,802 37,400 50.79
(% of gross loans) 3.3 3.7 6.0 234 bps
Retail loans 13,034 15,665 25,740 64
(% of retail gross loans) 2.3 3.0 5.1 214 bps
Non-retail loans 11,199 9,138 11,660 28
(% of non-retail gross loans) 6.2 6.3 9.9 364 bps
From stage-1 (SICR) 15,420
Retail loans 6,670
(% of retail gross loans) 1.3
Non-retail loans 8,750
(% of non-retail gross loans) 7.4
O thers 21,980
Retail loans 19,070
Gross stage-3 3,549 18,562 27,620 49
(% of gross loans) 0.5 2.7 4.4 169 bps
Retail loans 3,250 6,609 12,710 92
(% of retail gross loans) 0.6 1.2 2.5 127 bps
Non-retail loans 299 11,954 14,910 25
(% of non-retail gross loans) 0.2 8.2 12.7 447 bps
Restructured loans 17,230
(% of gross loans) 2.8
Retail loans 13,860
ECLGS (Rs mn) 1,300
(% of gross loans) 0.2
Write-offs (Rs mn) 381 (767) 835
(% of opening AUM) 0.1 (0.1) 0.1 19 bps
Overall stressed loans (%) 3.8 6.3 13.5 720 bps
O verall ECL provisions 4,376 17,656 25,440 44
Coverage on stressed loans (excluding write-offs, %) 15.8 40.7 30.4 -1027 bps
Notes:
(1) We have assumed disbursements under ECLGS similar to 3QFY21 in 4QFY21.
(2) We have assumed restructured loans in stage-1.

Exhibit 7: ~Rs7.5-8 bn of additional provisions required to ramp up ECL coverage on non-retail stage 2 and 3 loans to >75%
Asset quality details, March fiscal year-end, 2021
ECL coverage Various scenarios of ECL coverage (%) Additional ECL provisions requried (Rs mn)
(%) Scenario-1 Scenario-2 Scenario-3 Scenario-4 Scenario-1 Scenario-2 Scenario-3 Scenario-4
Gross stage-2 and 3 29 29 35 40 46 (129) 3,489 7,108 10,726
Retail 17 17 19 22 24 (83) 878 1,840 2,801
Non-retail 47 47 57 67 77 (46) 2,611 5,268 7,925
Gross stage-2 17 16 21 26 31 (398) 1,412 3,221 5,031
Retail 11 10 13 15 18 (306) 338 981 1,625
Non-retail 31 30 40 50 60 (92) 1,074 2,240 3,406
Gross stage-3 45 46 53 59 66 269 2,078 3,887 5,695
Retail 28 30 33 35 38 223 541 859 1,176
Non-retail 60 60 70 80 90 46 1,537 3,028 4,519
Notes:
(1) We have assumed restructured loans in stage-1.
(2) We have assumed that the company currently has 10% coverage on restructured loans as of FY2021.
Exhibit 8: Asset quality deteriorated from FY2020 Exhibit 9: Credit cost inched up in FY2020-21
GNPL/gross stage 3 for PNBHF, March fiscal year-ends, 2012-21 Credit cost for PNBHF, March fiscal year-ends, 2011-21
GNPL/gross stage 3 (%) Credit cost (% of AUM)

6.0 1.75
1.5
4.8 4.4 1.40
1.1
3.6 1.05
2.7
2.4 0.70
0.5
0.5
1.0 0.4 0.4
0.3 0.3
1.2 0.35 0.2 0.3
0.6 0.5 0.2
0.3 0.2 0.2 0.2 0.3
0.0 0.00
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2013
2011
2012
2014
2015
2016
2017
2018
2019
2020
2021
Source: Company, Kotak Institutional Equities Source: Company, Kotak Institutional Equities

Exhibit 10: AUM growth has declined over the past few years Exhibit 11: Disbursements declined sharply in FY2020 and
AUM for PNBHF, March fiscal year-ends, 2010-21 FY2021
Disbursements for PNBHF, March fiscal year-ends, 2010-21
(Rs bn) AUM (LHS) YoY (RHS) (%)
1,000 80 (Rs bn) Disbursements (LHS) YoY (RHS) (%)
67 145
60 59 62 400 150
800 53 60
50
320 72 100
36 61
600 40 57 53
49 43
25 26
240 50
19
400 20 9
160 0
(2)
200 0 (48) (44)
(11)
80 -50
0 -20
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
- -100
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Exhibit 12: Share of LAP and NRP loans has increased over the past few years
AUM mix for PNBHF, March fiscal year-ends, 2014-21 (%)
Individual housing LAP+NRP Construction finance+corporate term loans+LRD

100
11 15 17 19 22 21 18 16
80
24
24 22 19 20 21 24 26
60
40
65 62 61 61 59 58 58 58
20
0
2015
2017
2018
2020
2014
2016
2019
2021

Exhibit 13: Loans <Rs3 mn in individual housing increase to 48% Exhibit 14: Low-ticket loan share on the rise
Ticket-size wise break-up of individual housing loans, March fiscal Ticket-size wise break-up of LAP, March fiscal year-ends, 2018-21 (%)
year-ends, 2018-21 (%)
Upto Rs3 mn Rs3-7.5 mn Rs7.5-20 mn Upto Rs3 mn Rs3-7.5 mn Rs7.5-20 mn

Rs20-50 mn Rs50-100 mn >Rs100 mn Rs20-50 mn Rs50-100 mn >Rs100 mn
0.7 0.5 0.4 0.3 4.1
100 100.0 7.2 7 5.2
1.9 1.6 1.4 1.1
6.7 6.2 5 4.6
12 13.9 12.0
12.9 13.5 15.1
80 16.6 15.8 80.0
18.6 17.5
19.4 20.4
60 60.0
33.7 20.2
35.6 20.4
37.7 20.0 19.6
40 37.8 40.0
18.2 19.9
17.4 16.8
20 20.0
36.3 38.2 44.8 48.2 22.6 21.0 23.8 26.4

0 -
2018 2019 2020 2021 2018 2019 2020 2021
Exhibit 15: NIM picked up from trough levels in FY2021 Exhibit 16: Cost ratios have declined over the past few years
Calculated yields, cost of funds and NIM for PNBHF, March fiscal year- Cost ratios for PNBHF, March fiscal year-ends, 2011-21
ends, 2012-21 (%)
Yields on loans (LHS) Cost of funds (LHS) Cost-to-income (LHS) Cost-to-average AUM (RHS)
Spread (RHS) NIM (RHS) (%) (%)
50 2.0
12.5 11.8 11.5 11.7 11.7 3.5
11.2 11.0
10.6 10.3 10.6
10.1
10.0 3.1 40 1.6
3.3 3.3
3.2 3.2 1.3 1.3
3.1 3.1 1.2 1.2
3.0 3.0 2.9 30 1.1 1.2
7.5 2.9 2.7 1.0
2.8 0.9 0.8
0.8
2.5 2.6 20 0.7 0.8
5.0 2.5 2.3 0.6
2.4
2.3 2.3
2.2
2.5 2.1 1.9 10 0.4
1.9
8.9 8.7 9.4 9.4 8.7 8.6 7.9 8.2 8.4 8.0 17 24 31 34 35 30 28 23 24 21 18
0.0 1.5 0 0.0
2012
2014
2015
2017
2019
2020
2021
2013
2016
2018
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021

Exhibit 17: Share of market borrowings has declined over the past few years
Funding mix for PNB Housing Finance, March fiscal year-ends, 2017-21 (%)
NCD CP Bank loans Deposits ECB NHB refianace Assignment

100 -
7.7 8.8 12.9 16.9
4.2 18.8
6.5
2.5 8.5
80
5.7 7.4 10.9
28.0 19.5 6.7 8.3
17.2
60 7.7
6.9 19.6
23.7
12.3 17.5 18.2
40
9.6 24.4
22.2
40.9 0.5
20 37.5 1.6
28.0
22.5
16.4
0
2017 2018 2019 2020 2021

Exhibit 18: PNB Housing Finance – key growth rates and ratios
March fiscal year-ends, 2018-21
Ind-AS Ind-AS Ind-AS Ind-AS

2018 2019 2020 2021
Growth in key parameters (%)
Balance sheet
Loans 48 30 (10) (9)
AUM 50 36 (2) (11)
Investment (26) 89 (54) (1)
Net assets 47 33 (6) (10)
Borrowings 52 33 (6) (12)
Shareholders' funds 18 15 6 12
Profit and loss statement
Net interest income 79 8 11 15
Total income 55 29 4 (3)
O perating expenses 24 34 (7) (18)
PPO P 67 27 7 0
PAT 61 42 (46) 44
Core PBT NA 9 5 16
Spread calculation (%)
Yield on loans 10.3 10.1 10.6 11.0
Cost of funds 7.9 8.2 8.4 8.0
Spread 2.4 1.9 2.3 3.1
NIM (% of on-balance sheet loans) 3.2 2.5 2.6 3.2
Other key ratios (%)
Cost-to-income 22.6 23.6 21.1 18.0
Cost-to-average AUM 0.9 0.8 0.7 0.6
Credit cost 0.5 0.3 1.5 1.1
Tax rate 31.9 31.3 20.3 23.0
Payout ratio 17.8 12.7 — —
Asset quality details
Gross stage-2 (%) 1.7 3.3 3.7 6.0
Gross stage-3 (%) 0.3 0.5 2.7 4.4
ECL coverage on stage-3 (%) 28.4 20.9 36.2 45.2
Overall ECL coverage (%) 0.5 0.6 2.6 4.1
Du-Pont (% of average assets and off-balance sheet loans)
NII 2.6 2.0 1.9 2.3
Provisions 0.5 0.2 1.3 1.0
NII post-provisions 2.2 1.8 0.6 1.4
O ther income 0.6 0.7 0.5 0.4
Assignment income 0.2 0.4 0.4 0.1
Total income 2.9 2.9 1.4 1.9
O perating expenses 0.8 0.7 0.6 0.5
Employee expenses 0.3 0.4 0.2 0.2
Depreciation 0.0 0.0 0.1 0.1
O ther expenses 0.5 0.3 0.3 0.2
PBT 2.2 2.1 0.9 1.4
Tax 0.7 0.7 0.8 0.8
ROA 1.5 1.5 0.7 1.0
Leverage 9.4 11.5 12.2 10.5
ROE 13.9 16.9 8.3 11.0

Exhibit 19: PNB Housing Finance – financial summary

March fiscal year-ends, 2018-2021 (Rs mn)
2018 2019 2020 2021

Income statement
Interest income 50,467 67,929 76,882 71,898
Other operational income 4,420 8,865 7,936 4,140
Interest expense 35,366 51,664 58,750 50,998
Net interest income 15,101 16,265 18,133 20,901
Net operational income 19,522 25,130 26,069 25,041
Other income 6 39 77 202
Total income 19,528 25,169 26,146 25,242
Operating expenses 4,416 5,935 5,522 4,554
Employee expenses 1,441 3,039 2,331 2,113
Other expenses 2,975 2,896 3,192 2,441
PPOP 15,112 19,233 20,624 20,689
Provisions 2,766 1,890 12,514 8,619
PBT 12,346 17,344 8,110 12,070
Tax 3,934 5,429 1,648 2,771
PAT 8,412 11,915 6,462 9,298
Core PBT 13,608 14,824 15,599 18,159
EPS (Rs) 50 71 38 55
BVPS (Rs) 394 450 476 530
Balance sheet
Lons 571,648 742,879 666,280 606,447
Cash and bank balances 28,170 40,341 85,144 69,686
Investments 24,130 45,607 20,757 20,448
Fixed assets 852 1,077 1,348 1,050
Other assets 5,345 8,787 15,768 16,290
Net assets 630,145 838,690 789,297 713,922
Borrowings 542,695 723,627 682,160 599,420
Other liabilities 21,777 39,623 27,160 25,272
Total liabilities 564,471 763,251 709,320 624,692
Net worth 65,673 75,439 79,978 89,230
Share Capital 1,666 1,675 1,682 1,683
Reserves 64,008 73,764 78,296 87,548
AUM 792,283 792,283 792,283 792,283

March 2021: Results calendar
India Daily Summary - June 2, 2021

Mon Tue Wed Thu Fri Sat
KOTAK INSTITUTIONAL EQUITIES RESEARCH
31-May 1-Jun 2-Jun 3-Jun 4-Jun 5-Jun

Aurobindo Pharma Gujarat Gas Motherson Sumi Systems GIC Bank of India Interglobe Aviation
Honeyw ell Auto ITC Muthoot Finance Gujarat State Petronet Bharat Forge
Narayana Hrudaya PVR Punjab National Bank
Varroc Engineering
7-Jun 8-Jun 9-Jun 10-Jun 11-Jun 12-Jun
MRF Max Financial Services Bata India J K Cements
New India Assurance Petronet LNG TeamLease Services
Union Bank of India Prestige Estates Projects
14-Jun 15-Jun 16-Jun 17-Jun 18-Jun 19-Jun
CESC Timken India
Source: NSE, Kotak Institutional Equities

38
Kotak Institutional Equities: Valuation summary of KIE Universe stocks
39
Price (Rs) Fair Value Upside Mkt cap. O/S shares EPS (Rs) EPS growth (%) P/E (X) EV/EBITDA (X) P/B (X) RoE (%) Dividend yield (%) ADVT-3M
Company Rating 1-Jun-21 (Rs) (%) (Rs bn) (US$ bn) (mn) 2021E 2022E 2023E 2021E 2022E 2023E 2021E 2022E 2023E 2021E 2022E 2023E 2021E 2022E 2023E 2021E 2022E 2023E 2021E 2022E 2023E (US$ mn)
Automobiles & Components
Amara Raja Batteries SELL 739 725 (2) 126 1.7 171 38 42 48 (2) 10 16 20 18 15 11.2 9.7 8.4 3.0 2.7 2.4 16.4 15.9 16.3 1.5 1.4 1.6 20
Apollo Tyres ADD 222 240 8 141 1.9 638 13 15 19 57 17 24 17 14 12 6.6 6.0 5.0 1.2 1.2 1.1 7.8 8.3 9.5 1.6 1.2 1.2 25
Ashok Leyland REDUCE 122 125 3 357 4.9 2,936 (1) 2 6 (207) 239 254 NM 67 19 102.2 23.7 11.0 5.2 5.0 4.2 NM 7.6 24 0.0 0.5 1.6 38
Bajaj Auto BUY 4,239 4,600 9 1,227 17 289 157 199 239 (11) 27 20 27 21 18 20.4 15.7 12.5 4.9 4.5 4.1 20 22 24 3.3 2.8 3.4 37
Balkrishna Industries SELL 2,175 1,500 (31) 421 5.8 193 61 67 79 23 10 19 36 33 27 22.7 20.0 16.8 7.0 6.1 5.2 21 20.0 20 0.8 0.9 0.9 16
Bharat Forge SELL 667 375 (44) 310 4.3 466 (5) 11 19 (164) 319 76 NM 63 36 49.1 28.6 19.7 6.2 5.8 5.1 NM 9.5 15.2 0.0 0.5 0.5 19
CEAT ADD 1,325 1,500 13 54 0.7 40 114 98 126 82 (15) 29 12 14 11 6.8 6.9 5.8 1.6 1.5 1.3 14.9 11.4 13.3 1.4 1.4 1.8 5
Eicher Motors SELL 2,666 2,200 (17) 729 10.0 272 49 75 103 (26) 51 38 54 36 26 36.5 26.8 20.4 7.5 6.4 5.4 15.0 19.3 23 0.6 0.5 0.5 34
Endurance Technologies SELL 1,485 1,260 (15) 209 2.9 141 38 49 62 (7) 30 27 40 30 24 19.7 15.1 12.3 5.9 5.0 4.3 14.6 16.6 17.9 0.4 0.5 0.7 3
Escorts BUY 1,163 1,700 46 118 2.2 101 86 91 101 58 6 11 13 13 11 9.2 8.4 7.1 2.2 1.9 1.7 16.2 14.9 14.6 0.6 1.2 1.3 23
Exide Industries REDUCE 190 180 (5) 162 2.2 850 9 10 12 (10) 16 12 21 18 16 11.8 10.0 9.0 2.3 2.2 2.0 11.5 12.3 12.8 1.1 2.4 2.4 9
Hero Motocorp REDUCE 2,977 2,900 (3) 595 8.2 200 148 195 211 (7) 32 8 20 15 14 12.1 9.8 8.8 3.9 3.5 3.2 20 24 24 3.5 3.9 4.2 41
Mahindra CIE Automotive SELL 196 150 (24) 74 1.0 378 3 8 15 (70) 178 88 70 25 13 17.2 8.7 7.0 1.5 1.4 1.3 2.2 5.9 10.4 — — — 1
Mahindra & Mahindra BUY 806 975 21 1,002 13.8 1,138 29 39 53 22 34 36 28 21 15 14.0 12.9 9.9 2.6 2.3 2.1 9.4 11.9 14.5 1.1 0.7 1.0 58
Maruti Suzuki SELL 7,091 5,600 (21) 2,142 29.4 302 140 213 266 (25) 52 25 51 33 27 31.8 19.2 15.0 4.2 3.8 3.4 8.5 12.0 13.6 0.6 0.8 0.9 81
Motherson Sumi Systems ADD 237 200 (16) 750 10.3 3,158 4 9 11 (1) 139 23 65 27 22 15.4 8.0 6.3 6.0 4.6 3.6 9.7 19.3 18.3 0.4 0.6 0.7 47
MRF SELL 83,083 78,000 (6) 352 4.8 4 3,155 3,735 4,321 (6) 18 16 26 22 19 10.8 9.4 7.8 2.6 2.3 2.1 10.4 11.1 11.5 0.1 0.1 0.2 28
Schaeffler India SELL 5,201 4,350 (16) 163 2.2 31 93 153 191 (21) 65 25 56 34 27 28.0 18.6 14.8 5.2 4.6 4.1 9.5 14.4 16.1 — — — 1
SKF SELL 2,350 1,890 (20) 116 1.6 49 60 75 90 3 25 19 39 31 26 26.5 22.0 18.0 7.4 6.2 5.2 19.0 20.0 20.0 4.6 0.5 0.6 1
Tata Motors SELL 318 205 (36) 1,218 15.5 3,829 (4) 16 25 82 541 52 NM 19 13 6.8 4.9 4.1 2.2 2.0 1.7 NM 10.7 14.4 — — — 276
Timken SELL 1,310 830 (37) 99 1.4 75 22 36 43 (34) 65 20 60 37 30 34.8 22.4 18.6 7.2 6.1 5.2 11.1 18.1 18.4 0.1 0.1 0.1 1
TVS Motor SELL 613 425 (31) 291 4.0 475 13 20 26 (1) 55 28 48 31 24 20.5 15.8 12.9 7.0 6.0 5.1 15.7 21 23 0.5 0.8 1.0 25
Automobiles & Components Cautious 10,716 146.3 14 84 31 46 25 19 14.1 10.2 8.3 3.7 3.3 2.9 8.1 13.3 15.4 1.0 1.0 1.2 790
Banks
AU Small Finance Bank SELL 989 800 (19) 309 4.2 312 39 27 34 75 (29) 24 25 36 29 — — — 5.2 4.6 4.0 22.9 12.9 13.9 — — — 28
Axis Bank BUY 745 810 9 2,283 31.3 3,064 22 48 58 273 122 21 35 16 13 — — — 2.4 2.1 1.9 7.1 13.6 14.6 0.4 1.0 1.2 164
Bandhan Bank ADD 303 350 16 488 6.7 1,611 14 23 28 (27) 65 26 22 13 11 — — — 3.1 2.5 2.0 13.5 19.1 20.0 — 1— 1— 42
Bank of Baroda ADD 79 95 20 410 5.6 5,178 2 16 20 35 890 29 50 5 4 — — — 0.7 0.6 0.5 1.2 11.0 12.8 0.0 4.0 5.2 66
Canara Bank REDUCE 159 150 (6) 262 3.6 1,647 16 17 20 172 7 21 10 10 8 — — — 0.7 0.7 0.6 4.6 4.5 5.3 — — — 48
City Union Bank REDUCE 167 160 (4) 123 1.7 739 8 8 11 24 (2) 45 21 21 15 — — — 2.4 2.3 2.1 10.6 9.6 12.7 1.4 0.9 1.4 8
DCB Bank BUY 102 150 48 32 0.4 311 11 12 17 (1) 8 43 9 9 6 — — — 1.0 1.0 0.8 10.0 9.9 12.8 1.1 1.2 1.7 3
Equitas Holdings BUY 89 100 12 30 0.4 342 8 8 16 30 5 97 11 11 5 — — — 1.1 1.0 0.8 9.2 8.8 15.4 — — — 2
Equitas Small Finance Bank ADD 60 65 8 69 0.9 1,139 3 4 5 46 21 22 18 15 12 — — — 2.1 1.8 1.6 12.5 12.8 13.7 — — — 2

Federal Bank BUY 86 100 17 171 2.3 1,996 8 9 13 3 9 54 11 10 6 — — — 1.1 1.1 0.9 10.4 10.3 14.4 0.8 1.8 2.8 31
HDFC Bank ADD 1,512 1,650 9 8,342 114.4 5,513 56 65 75 18 15 16 27 23 20 — — — 4.2 3.7 3.3 16.6 16.5 17.0 0.0 1.1 1.2 199
ICICI Bank BUY 650 710 9 4,499 61.7 6,917 23 33 36 91 41 10 28 20 18 — — — 3.3 2.9 2.6 12.3 14.6 14.3 0.3 1.0 1.1 194
IndusInd Bank ADD 1,010 1,050 4 781 10.7 773 37 65 85 (41) 73 31 27 16 12 — — — 1.9 1.7 1.5 7.6 11.1 13.1 0.5 0.9 1.2 97
Karur Vysya Bank BUY 56 65 16 45 0.6 799 4 7 11 53 63 53 12 8 5 — — — 0.8 0.7 0.6 5.3 8.2 11.6 0.9 3.4 5.2 1
Punjab National Bank REDUCE 42 36 (14) 459 6.3 10,481 3 5 6 577 46 28 12 8 7 — — — 0.7 0.7 0.6 4.9 5.8 6.9 — — — 83
RBL Bank BUY 211 240 14 126 1.7 598 8 17 32 (15) 103 85 25 12 7 — — — 1.1 1.0 0.9 4.4 7.9 13.3 0.6 1.2 2.3 45
SBI Cards and Payment Services ADD 1,046 975 (7) 984 13.5 941 10 18 27 (21) 68 54 100 59 39 — — — 15.6 12.6 9.6 16.9 23 28 0.1 0.1 0.2 50
State Bank of India BUY 433 470 9 3,860 53.0 8,925 23 39 49 41 69 26 19 11 9 — — — 2.0 1.7 1.4 8.4 12.7 14.1 0.0 0.0 0.0 278
Ujjivan Financial Services BUY 212 345 63 26 0.4 121 34 44 — 25 32 (100) 6 5 - — — — 1.0 0.9 — 17.0 19.3 NM 2.0 2.8 0.0 2
Ujjivan Small Finance Bank ADD 30 34 15 51 0.7 1,728 (0) 1 3 (103) 2,275 112 NM 23 11 — — — 1.9 1.7 1.4 0.3 7.4 13.5 0.0 0.0 0.0 2
Union Bank REDUCE 34 30 (13) 235 3.2 6,407 3 2 4 134 (39) 159 12 20 8 — — — 0.6 0.6 0.5 3.2 1.9 4.8 1.2 0.8 2.0 7
YES Bank SELL 13 11 (18) 334 4.6 25,055 (1) (1) (0) 89 37 89 NM NM NM — — — 1.3 1.4 1.3 NM NM NM 0.0 0.0 0.0 24
Banks Attractive 23,920 328.2 111 53 25 26 17 14 2.1 1.9 1.7 7.9 10.9 12.3 0.2 0.8 1.0 1,376
Source: Company, Bloomberg, Kotak Institutional Equities estimates


Building Products
Astral SELL 1,859 1,100 (41) 374 5.1 201 20 23 27 63 17 16 92 79 69 57.3 48.4 41.6 19.7 16.3 13.8 24 23 22 0.1 0.2 0.3 10
Building Products Cautious 374 5.1 63 17 16 92 79 69 57.3 48.4 41.6 19.7 16.3 13.8 21 21 20 0.1 0.2 0.3 10
Capital goods
ABB BUY 1,693 1,550 (8) 359 4.9 212 8 21 28 (54) 157 35 209 81 60 122.0 57.0 41.7 9.9 9.2 8.3 4.8 11.7 14.5 0.3 0.4 0.4 3
Ashoka Buildcon BUY 92 145 58 26 0.4 281 12 12 13 (14) 1 9 8 8 7 6.3 5.3 4.4 0.9 0.8 0.8 12.2 11.2 11.2 2.1 2.1 2.3 2
Bharat Electronics BUY 147 150 2 358 4.9 2,437 8 8 8 4 (1) 7 19 19 18 12.3 11.6 10.5 3.2 2.9 2.7 17.9 16.1 15.7 2.0 2.0 2.1 33
BHEL SELL 71 31 (56) 248 3.4 3,482 (4) 2 3 (4) 149 42 NM 33 23 (15.1) 14.0 10.5 0.9 0.9 0.8 NM 2.6 3.7 (2.8) 1.2 1.5 84
Carborundum Universal ADD 590 545 (8) 112 1.5 190 15 21 26 4 37 26 39 29 23 22.6 17.4 13.8 5.2 4.7 4.1 14.3 17.2 19.2 0.7 1.0 1.2 2
Cochin Shipyard BUY 377 550 46 50 0.7 132 41 48 43 (15) 16 (10) 9 8 9 4.9 4.8 4.8 1.2 1.1 1.0 13.8 14.6 12.0 3.1 3.4 3.8 2
Cummins India BUY 780 890 14 216 3.0 277 23 31 39 (10) 36 25 34 25 20 35.1 24.1 18.3 4.9 4.6 4.3 14.8 19.0 22 1.9 2.2 2.8 17
Dilip Buildcon BUY 542 630 16 79 1.1 146 22 40 58 (23) 84 45 25 13 9 7.7 6.1 5.2 2.0 1.6 1.3 8.5 13.1 15.6 0.2 0.1 0.2 3
IRB Infrastructure BUY 116 145 25 41 0.6 351 3 9 12 (84) 178 28 35 13 10 7.9 7.2 5.9 0.6 0.6 0.5 1.7 4.6 5.7 3.3 1.3 1.8 3
Kalpataru Power Transmission BUY 415 525 26 62 0.8 153 33 37 46 29 12 27 13 11 9 5.4 5.2 4.3 1.7 1.4 1.2 14.2 13.4 14.5 2.1 1.0 1.3 2
KEC International BUY 402 430 7 103 1.4 257 21 27 35 (2) 24 32 19 15 11 10.5 8.5 6.8 3.1 2.6 2.2 18.0 18.7 21 0.6 0.7 0.9 3
L&T BUY 1,474 1,850 25 2,071 28.4 1,405 49 71 95 (23) 46 34 30 21 16 20.8 15.3 13.3 3.2 3.1 2.9 11.3 15.2 19.0 2.4 2.0 2.6 64
Siemens SELL 2,059 1,740 (16) 733 10.1 356 35 40 48 63 14 21 59 52 43 41.7 36.3 30.1 7.1 6.5 5.9 12.5 13.1 14.4 0.5 0.5 0.6 12
Thermax SELL 1,412 1,200 (15) 168 2.3 113 23 33 42 22 42 28 61 43 34 42.8 31.8 24.7 42.8 31.8 24.7 8.3 11.1 13.5 0.5 1.1 1.5 1
Capital goods Attractive 4,625 63.5 (17) 58 28 38 24 19 3.0 2.8 2.6 8.0 11.8 14.0 1.4 1.5 1.9 234
Commercial & Professional Services
SIS BUY 442 430 (3) 66 0.9 149 25 20 23 63 (20) 20 18 22 19 12.6 12.7 11.3 3.6 3.2 2.8 23 15.1 16.0 1.4 1.1 1.3 2
TeamLease Services ADD 3,423 3,775 10 59 0.8 17 53 84 113 161 56 35 64 41 30 57.4 35.8 26.7 8.8 7.3 5.9 14.8 19.4 21 — — — 1
Commercial & Professional ServicesAttractive 124 1.7 76 (5) 25 27 28 23 19.7 17.9 15.1 5.0 4.3 3.7 18.4 15.2 16.4 0.7 0.6 0.7 3
Commodity Chemicals
Asian Paints REDUCE 2,931 2,500 (15) 2,811 38.6 959 33 38 47 20 15 24 90 78 63 57.2 50.7 42.6 22.0 19.6 17.4 27 27 29 0.6 0.7 0.9 70
Berger Paints SELL 798 600 (25) 775 10.6 971 8 10 12 11 34 24 106 79 64 66.3 51.5 42.4 25.0 21.3 18.3 25 29 31 0.3 0.5 0.6 13
Kansai Nerolac REDUCE 576 610 6 310 4.3 539 10 12 15 1 21 26 58 48 38 37.2 31.5 25.2 7.5 6.9 6.2 13.6 15.1 17.3 0.5 0.7 0.9 2
Tata Chemicals SELL 706 540 (24) 180 2.5 255 11 32 36 (66) 198 14 66 22 19 10.9 7.6 6.8 1.3 1.3 1.3 2.0 5.7 6.5 1.4 4.5 5.1 67
Commodity Chemicals Neutral 4,077 55.9 2 29 23 87 67 55 48.2 39.6 33.4 11.9 11.1 10.3 13.6 16.4 18.7 0.6 0.8 1.1 152
Construction Materials
ACC REDUCE 1,975 1,950 (1) 371 5.1 188 75 95 106 4 27 11 26 21 19 12.6 10.5 9.2 2.9 2.7 2.4 11.7 13.5 13.5 0.7 1.2 1.3 27
Ambuja Cements REDUCE 324 320 (1) 644 8.8 1,986 13 13 16 28 1 22 24 24 20 10.8 8.8 7.1 2.8 2.6 2.3 11.3 11.2 12.4 5.6 0.8 1.0 28
Dalmia Bharat BUY 1,815 1,800 (1) 340 4.7 187 54 58 80 286 7 37 34 31 23 12.3 11.0 8.7 2.7 2.5 2.2 8.7 8.2 10.3 — — — 5
Grasim Industries ADD 1,445 1,520 5 951 13.0 657 68 86 108 (22) 27 25 21 17 13 9.2 7.6 6.1 1.4 1.3 1.2 7.3 8.3 9.4 0.6 0.6 0.5 36
J K Cement ADD 2,846 2,300 (19) 220 3.0 77 87 127 140 35 47 10 33 22 20 15.6 12.2 11.4 6.1 4.9 4.0 20 24 22 0.4 0.4 0.4 2
JK Lakshmi Cement ADD 540 550 2 64 0.9 118 38 39 43 60 2 11 14 14 13 7.6 6.9 6.3 3.0 2.5 2.1 23 19.7 18.4 0.7 1.1 1.2 5
Orient Cement ADD 134 140 5 27 0.4 205 10 10 11 147 (6) 9 13 14 12 6.2 5.9 6.1 2.1 1.9 1.7 17.7 14.5 14.2 1.5 1.5 1.5 2
Shree Cement SELL 27,623 20,000 (28) 997 13.7 36 641 833 983 47 30 18 43 33 28 24.7 19.3 16.4 6.5 5.5 4.7 16.4 18.1 18.0 0.2 0.2 0.2 25
The Ramco Cements SELL 950 800 (16) 224 3.1 236 32 34 43 26 4 27 29 28 22 16.3 14.0 11.2 3.9 3.5 3.0 14.2 13.0 14.6 0.3 0.4 0.5 9
UltraTech Cement REDUCE 6,601 6,300 (5) 1,906 26.1 289 193 245 282 (3) 27 15 34 27 23 17.1 14.1 12.6 4.3 3.8 3.4 13.4 15.0 15.3 0.6 0.3 0.4 55
Construction Materials Attractive 5,742 78.8 7 22 19 29 24 20 13.5 11.2 9.5 3.1 2.8 2.5 10.5 11.4 12.2 1.0 0.5 0.5 194

40
41
Consumer Durables & Apparel
Crompton Greaves Consumer SELL 398 305 (23) 250 3.4 628 9 10 11 19 4 15 42 41 35 36 30 26 12.9 10.5 8.5 35 29 27 0.5 0.6 0.6 9
Havells India SELL 1,029 845 (18) 644 8.8 626 17 20 24 41 23 18 62 50 43 40 34 29 13.1 11.4 9.9 23 24 25 0.6 0.7 0.8 26
Page Industries REDUCE 31,055 30,500 (2) 346 4.8 11 305 486 598 (1) 59 23 102 64 52 65 43 35 39.1 32.5 27.5 40 56 57 0.8 1.1 1.4 16
Polycab ADD 1,680 1,700 1 251 3.4 149 59 62 69 14 6 10 29 27 25 21 18 15 5.3 4.5 3.9 20 18.1 17.1 0.4 0.4 0.5 8
TCNS Clothing Co. REDUCE 535 390 (27) 33 0.5 68 (7) 11 15 (162) 269 37 NM 47 35 109 16 13.1 5.3 4.6 3.9 NM 10.4 12.2 — — — 1
Voltas SELL 1,013 830 (18) 335 4.6 331 13 24 29 (21) 85 23 79 42 35 61 35 28 6.7 6.0 5.4 9.2 15.0 16.4 0.3 0.6 0.7 27
Whirlpool SELL 2,159 1,930 (11) 274 3.8 127 26 48 63 (30) 85 30 83 45 34 51 31 23 9.9 8.9 8.1 12.5 21 25 0.4 0.9 1.5 3
Consumer Durables & Apparel Cautious 2,133 29.3 4 36 19 60 44 37 42 30 25 10.2 8.9 17.0 20 21 0.5 0.7 90
Consumer Staples
Bajaj Consumer Care ADD 287 325 13 42 0.6 148 15 16 18 21 8 9 19 18 16 15.0 14.0 12.4 5.6 5.1 4.5 32 30 30 3.5 3.8 3.8 5
Britannia Industries ADD 3,449 3,650 6 831 11.4 241 78 70 82 32 (9) 16 44 49 42 33 35 30 23.4 42.8 39.5 46 61 96 3.1 2.2 1.7 29
Colgate-Palmolive (India) ADD 1,713 1,760 3 466 6.4 272 38 39 44 34 3 12 45 44 39 30.3 28.8 25.8 40.0 40.1 37.2 75 92 99 2.2 2.2 2.4 14
Dabur India ADD 537 555 3 949 13.0 1,767 10 10 12 11 8 18 56 52 44 47 42 36 12.4 11.9 10.9 24 24 26 0.9 1.0 1.2 19
Godrej Consumer Products ADD 849 925 9 868 11.9 1,023 17 18 21 25 6 16 49 46 40 36 33 28 9.2 8.2 7.5 20 18.7 19.5 0.0 1.1 1.4 22
Hindustan Unilever ADD 2,358 2,650 12 5,541 76.0 2,350 34 40 48 9 19 18 70 58 49 48 40 34 11.7 11.3 10.9 29 19.7 23 1.3 1.6 1.9 67
ITC BUY 215 257 19 2,649 36.3 12,330 11 12 13 (8) 10 12 20 18 17 15.3 13.3 11.7 4.5 4.4 4.2 21 23 25 5.0 4.9 5.2 90
Jyothy Laboratories ADD 156 170 9 57 0.8 367 6 6 7 26 3 19 26 26 22 18.0 18.4 15.7 4.0 3.9 3.7 16.4 15.3 17.4 2.6 2.9 3.2 2
Marico ADD 481 465 (3) 621 8.5 1,290 9 10 11 11 11 13 53 48 42 38 34 30 19.1 17.9 16.7 37 39 41 1.6 1.7 2.0 16
Nestle India ADD 17,759 18,250 3 1,712 23.5 96 216 255 301 6 18 18 82 70 59 53 46 40 84.8 61.4 46.5 106 102 90 1.1 1.0 1.2 22
Tata Consumer Products ADD 666 650 (2) 614 8.4 922 10 11 15 21 16 32 69 59 45 38 33 27 4.2 4.0 3.8 6.3 7.0 8.7 0.6 0.6 0.8 35
United Breweries ADD 1,251 1,365 9 331 4.5 264 5 14 31 (72) 212 119 275 88 40 86 45 23 9.2 8.4 7.2 3.4 10.0 19.2 0.0 0.5 1.3 8
United Spirits ADD 612 680 11 445 6.1 727 6 11 16 (45) 75 48 96 55 37 46 33 24 10.4 8.7 7.5 11.1 17.3 22 — — 0.8 17
Varun Beverages BUY 1,007 1,150 14 291 4.0 289 14 26 37 (16) 89 42 73 39 27 27 17 14 8.2 7.0 5.7 11.5 19.4 23 0.1 0.3 0.3 5
Consumer Staples Attractive 15,417 211.5 3 14 18 47 41 35 34 29 25 9.5 9.2 8.6 20 22 25 1.9 2.0 2.2 350
Diversified Financials
Aavas Financiers ADD 2,274 2,500 10 178 2.4 79 37 45 57 17 21 27 62 51 40 — — — — — — 12.9 13.6 15.0 0.0 0.0 0.0 3
Aditya Birla Capital NR 119 — — 287 3.9 2,414 4 6 8 4 36 43 28 21 14 — — — — — — 7.8 9.7 12.4 47.5 52.3 59.3 7
Bajaj Finance SELL 5,785 4,200 (27) 3,492 47.9 602 73 139 174 (16) 89 25 79 42 33 — — — 9.4 7.8 6.5 12.8 21 21 0.2 0.2 0.3 194
Bajaj Finserv ADD 11,832 11,450 (3) 1,883 25.8 159 281 426 526 33 52 24 42 28 22 — — — 5.3 5.1 4.4 13.3 18.7 21 0.1 0.1 0.1 65
Cholamandalam BUY 546 625 15 447 6.1 820 18 30 36 44 62 20 30 18 15 — — — 5.0 4.0 3.3 17.1 23 23 0.4 0.6 0.7 40
Computer Age Management Services SELL 2,511 1,900 (24) 123 1.7 49 42 49 56 18 17 14 60 51 45 — — — 23.7 20.1 17.1 39 43 41 2.5 1.3 1.5 6
HDFC BUY 2,581 3,050 18 4,660 63.9 1,804 67 72 86 (35) 8 19 39 36 30 — — — 4.3 4.0 3.6 12.0 11.5 12.6 0.8 0.8 1.0 133
HDFC AMC SELL 2,965 2,260 (24) 632 8.7 213 62 71 83 5 14 17 48 42 36 — — — 13.2 11.4 9.9 30 29 30 1.1 1.3 1.5 12
IIFL Wealth ADD 1,182 1,300 10 104 1.4 89 42 50 60 75 20 21 28 24 20 — — — 3.7 3.5 3.3 12.7 15.1 17.6 5.9 2.9 3.6 1

L&T Finance Holdings ADD 92 115 25 227 3.1 2,469 4 8 10 (55) 111 24 24 11 9 — — — 1.2 1.1 1.0 4.8 10.2 11.4 0.0 0.7 0.7 19
LIC Housing Finance ADD 478 430 (10) 241 3.3 505 59 73 79 24 24 8 8 7 6 — — — 1.4 1.2 1.0 15.3 16.7 15.9 2.1 2.6 2.8 21
Mahindra & Mahindra Financial ADD 160 200 25 198 2.7 1,230 3 14 16 (81) 421 15 59 11 10 — — — 1.4 1.3 1.2 2.6 11.4 12.0 0.5 1.8 2.0 26
Muthoot Finance REDUCE 1,309 1,250 (4) 525 7.2 401 92 105 113 23 14 7 14 12 12 — — — 3.6 3.0 2.5 29 26 23 1.4 1.6 1.7 19
Shriram City Union Finance BUY 1,674 1,725 3 110 1.5 66 153 173 196 1 13 13 11 10 9 — — — 1.4 1.3 1.1 13.2 13.3 13.4 2.0 1.6 1.8 1
Shriram Transport BUY 1,411 1,575 12 357 4.9 253 98 139 167 (11) 41 20 14 10 8 — — — 1.7 1.5 1.3 12.6 15.2 16.0 1.3 1.5 1.8 48
Diversified Financials Attractive 13,569 186.2 (11) 37 17 36 26 22 4.2 3.8 3.4 11.7 14.4 15.2 0.6 0.7 0.8 598


Electric Utilities
CESC BUY 680 815 20 90 1.2 133 96 106 117 (3) 11 10 7 6 6 5.4 4.4 4.0 0.7 0.6 0.6 11.2 10.3 10.4 6.6 2.0 2.4 4
JSW Energy REDUCE 126 70 (44) 207 2.8 1,640 6 5 7 (12) (1) 25 23 23 18 9.6 8.8 8.4 1.6 1.5 1.4 7.5 6.9 8.0 — — — 13
NHPC ADD 26 27 5 259 3.5 10,045 4 3 4 26 (2) 1 7 7 7 10.4 9.8 9.2 0.8 0.8 0.7 11.1 10.4 10.0 7.6 7.7 7.7 2
NTPC BUY 110 125 13 1,069 14.7 9,697 15 15 17 32 4 8 8 7 7 8.6 6.6 5.6 0.9 0.8 0.8 12.2 11.8 11.8 3.6 4.2 4.5 32
Power Grid BUY 224 250 11 1,174 16.1 5,232 25 28 30 18 15 7 9 8 7 6.9 6.0 5.6 1.6 1.5 1.3 18.8 19.4 18.7 4.5 5.3 7.0 39
Tata Power ADD 105 110 5 334 4.6 3,196 4 6 6 (10) 52 (1) 26 17 17 8.9 7.8 7.6 1.6 1.5 1.4 6.6 8.9 8.2 — — — 82
Electric Utilities Attractive 3,133 43.0 20 10 7 9 8 8 1.2 1.1 1.0 12.6 12.6 12.5 3.7 4.1 4.9 173
Fertilizers & Agricultural Chemicals
Bayer Cropscience SELL 5,254 4,600 (12) 236 3.2 45 130 159 184 0 22 15 40 33 29 28 24 20 9.2 7.6 6.2 23 25 24 0.5 0.6 0.7 2
Dhanuka Agritech SELL 931 775 (17) 43 0.6 48 44 43 47 49 (3) 10 21 22 20 15.4 15.9 14.4 5.6 4.7 4.1 28 23 22 0.4 1.4 1.8 2
Godrej Agrovet SELL 552 455 (18) 106 1.5 192 16 20 23 41 25 12 34 27 24 20 16 15 4.3 3.9 3.6 13.4 15.2 15.5 1.4 1.8 2.0 2
PI Industries REDUCE 2,614 2,420 (7) 397 5.4 152 50 61 74 50 22 23 53 43 35 38 30 24 7.3 6.5 5.6 18.5 16.0 17.1 0.2 0.3 0.4 15
Rallis India ADD 311 310 (0) 60 0.8 195 11 14 17 26 26 20 27 22 18 18.8 14.9 12.2 3.8 3.3 2.9 14.8 16.5 17.4 1.0 1.1 1.2 4
UPL SELL 816 650 (20) 623 8.6 765 38 46 55 62 22 20 22 18 15 10.1 8.5 7.3 3.5 3.0 2.6 16.8 18.3 19.1 1.2 1.5 1.8 85
Fertilizers & Agricultural ChemicalsCautious 1,466 20.1 47 22 19 30 24 20 14.7 12.4 10.6 4.8 4.2 3.6 16.1 17.1 17.6 0.8 1.0 1.2 111
Gas Utilities
GAIL (India) BUY 161 170 6 713 9.8 4,510 10 13 14 (22) 30 4 16 12 12 12.0 8.6 8.0 1.5 1.4 1.3 10.2 12.4 12.0 2.5 3.4 3.7 42
GSPL SELL 277 200 (28) 156 2.1 564 13 12 8 (23) (11) (32) 21 23 35 9.5 10.3 13.8 2.1 2.0 1.9 10.6 8.7 5.6 0.7 0.9 0.7 4
Indraprastha Gas ADD 525 575 10 367 5.0 700 16 23 26 (4) 43 11 33 23 20 23.1 16.5 14.5 6.2 5.3 4.5 21 25 24 0.5 1.0 1.3 17
Mahanagar Gas BUY 1,183 1,350 14 117 1.6 99 63 75 105 (16) 20 39 19 16 11 12.0 9.9 6.9 3.6 3.2 2.8 20 22 26 1.9 2.5 4.0 10
Petronet LNG BUY 241 300 24 362 5.0 1,500 20 21 23 16 4 9 12 11 10 6.6 6.3 5.8 3.1 2.9 2.8 27 26 28 6.4 7.1 8.2 13
Gas Utilities Attractive 1,715 23.5 (11) 20 7 17 14 13 11.2 9.0 8.3 2.3 2.1 2.0 13.6 15.1 14.9 2.7 3.4 3.9 86
Health Care Services
Apollo Hospitals ADD 3,240 2,860 (12) 466 6.4 144 5 48 65 (71) 785 36 599 68 50 42.5 25.6 21.4 10.2 9.4 8.4 2.0 14.4 17.8 0.1 0.6 0.8 41
Aster DM Healthcare BUY 144 220 53 72 1.0 500 3 10 12 (52) 245 21 51 15 12 8.9 6.1 5.3 2.1 1.9 1.7 4.3 13.6 14.5 — — — 2
Dr Lal Pathlabs SELL 2,898 1,810 (38) 242 3.3 83 35 43 46 29 23 7 83 68 63 53.1 41.9 39.4 19.4 16.8 14.6 26 27 25 0.5 0.7 0.7 19
HCG BUY 182 175 (4) 23 0.3 143 (8) (2) (2) 30 71 21 NM NM NM 17.8 10.2 8.9 2.7 2.8 2.9 NM NM NM — — — 1
Metropolis Healthcare SELL 2,500 1,800 (28) 128 1.8 51 36 44 47 21 21 7 69 57 54 43.2 34.5 31.1 17.9 15.0 12.7 30 29 26 0.4 0.5 0.6 6
Narayana Hrudayalaya BUY 493 540 10 101 1.4 204 (3) 10 13 (152) 421 31 NM 51 39 69.7 19.3 16.3 9.4 7.9 6.6 NM 16.8 18.4 — — — 2
Health Care Services Attractive 1,031 14.1 (46) 274 24 201 54 43 32.8 20.7 17.9 8.6 7.8 6.9 4.3 14.5 15.9 0.2 0.5 0.6 69
Hotels & Restaurants
Burger King SELL 147 115 (22) 56 0.8 382 (4) (1) 1 (66) 78 167 NM NM 226 536.3 34.7 21.1 8.3 8.8 8.6 NM NM 3.9 0.0 0.0 0.0 6
Jubilant Foodworks BUY 3,056 3,200 5 403 5.5 132 17 33 51 (29) 98 54 182 92 60 51.0 35.8 27.1 32.0 24.9 19.1 18.5 31 36 0.2 0.4 0.6 24
Lemon Tree Hotels REDUCE 41 39 (6) 33 0.4 790 (2) (0) 1 (1,176) 72 237 NM NM 70 74.0 35.4 13.8 4.7 4.5 4.2 NM NM 6.3 — (1.5) (0.1) 1
Westlife Development ADD 489 460 (6) 76 1.0 156 (5) 1 6 (1,655) 125 346 NM 382 86 104.4 30.9 21.3 15.2 14.6 12.5 NM 3.9 15.7 — 0.0 0.0 2
Hotels & Restaurants Attractive 569 7.8 (164) 358 116 NM 147 68 62.1 34.9 23.5 18.1 16.2 13.7 NM 11.1 20 0.1 0.2 0.4 33

42
43
Insurance
HDFC Life Insurance ADD 665 750 13 1,345 18.5 2,011 7 8 9 5 13 14 98 87 76 — — — 15.9 14.7 13.5 17.6 17.5 18.5 0.3 0.3 0.3 29
ICICI Lombard SELL 1,467 1,150 (22) 667 9.1 490 32 35 40 23 8 15 45 42 37 — — — 9.0 7.8 6.6 22 21 19.6 0.5 0.5 0.5 12
ICICI Prudential Life BUY 552 660 20 793 10.9 1,436 7 7 9 (10) 11 15 83 74 65 — — — 8.7 7.9 7.2 11.5 11.2 11.7 0.3 0.0 0.0 25
Max Financial Services BUY 936 1,000 7 323 4.4 343 10 12 16 (6) 29 29 98 76 59 — — — — — — 13.5 15.4 17.5 0.1 0.3 0.3 10
SBI Life Insurance BUY 966 1,360 41 966 13.3 1,002 15 16 18 2 12 9 66 59 54 — — — 9.6 8.4 7.5 15.3 15.2 14.6 0.3 0.3 0.3 59
Insurance Attractive 4,094 56.2 6 14 14 73 64 56 10.9 9.6 8.5 14.8 14.9 15.2 0.2 0.2 0.2 136
Internet Software & Services
Info Edge SELL 4,428 3,170 (28) 570 7.8 128.3 22 43 53 (19) 98 23 203 103 84 174.5 95.7 76.0 12.6 11.5 10.4 8.0 11.7 13.1 0.1 0.2 0.3 44
Just Dial SELL 910 595 (35) 57 0.8 61.9 35 31 36 (17) (11) 17 26 29 25 26.8 23.1 20.1 4.5 3.9 3.4 16.8 14.1 14.2 — — — 36
Internet Software & Services Cautious 627 8.6 (18) 51 21 127 84 70 125.0 78.7 64.3 10.8 9.8 8.8 8.5 11.7 12.7 0.1 0.2 0.3 80
IT Services
HCL Technologies ADD 951 1,080 14 2,580 35.4 2,714 48 51 57 18 7 11 20 19 17 12.0 11.0 9.8 4.1 3.7 3.2 24 21 20 2.3 2.2 2.2 84
Infosys BUY 1,387 1,600 15 5,911 81.1 4,250 46 52 61 17 15 16 30 26 23 20.3 17.7 15.2 7.7 6.9 6.1 27 27 28 1.9 2.2 2.5 151
L&T Infotech REDUCE 3,891 3,850 (1) 680 9.3 176 110 127 149 27 15 18 35 31 26 23.7 21.6 18.4 9.4 7.8 6.5 30 28 27 0.6 0.9 1.0 18
L&T Technology Services ADD 2,687 2,800 4 282 3.9 106 63 88 106 (19) 40 21 43 31 25 26.3 19.9 16.6 8.2 6.9 5.8 21 24 25 0.6 0.8 1.0 14
Mindtree SELL 2,418 1,620 (33) 398 5.5 165 67 82 88 76 22 8 36 29 27 22.7 20.0 18.5 9.2 7.8 6.6 30 29 26 0.8 1.4 1.5 38
Mphasis REDUCE 1,950 1,650 (15) 365 5.0 187 65 77 86 2 18 13 30 25 23 19.3 16.6 14.6 5.6 5.1 4.6 19.7 21 21 3.3 2.1 2.3 14
TCS REDUCE 3,153 3,250 3 11,665 160.0 3,699 89 108 122 4 21 13 35 29 26 24.0 19.8 17.8 13.3 11.2 10.3 38 42 42 1.2 2.1 3.1 132
Tech Mahindra BUY 1,031 1,150 12 898 12.3 880 51 61 68 11 20 11 20 17 15 11.5 10.1 8.8 3.6 3.3 2.9 19.2 20 20 3.7 2.3 2.5 53
Wipro ADD 543 480 (12) 2,974 40.8 5,504 19 20 23 15 7 15 28 27 23 18.1 16.3 14.1 5.6 4.7 4.0 19.5 18.8 18.7 0.4 0.9 0.9 98
IT Services Attractive 25,753 353.3 10 15 14 30 26 23 19.7 17.1 15.1 7.8 6.8 6.0 26 26 26 1.5 1.9 2.5 602
Media
DB Corp. REDUCE 94 81 (14) 16 0.2 175 5 14 14 (66) 167 1 18 7 7 5.8 3.0 3.1 0.9 1.0 1.0 5.4 14.3 14.6 2.1 12.8 13.9 0
Jagran Prakashan REDUCE 56 37 (34) 15 0.2 281 4 7 8 (44) 87 NA 14 8 NA 3.5 2.3 NA 0.8 0.8 NA 5.7 10.3 11.5 3.5 8.9 8.9 1
PVR BUY 1,307 1,650 26 79 1.1 55 (93) 40 60 (420) 143 53 NM 33 22 (22.3) 12.6 9.8 3.4 3.1 2.8 NM 10.0 13.7 (0.7) 0.3 0.5 26
Sun TV Network REDUCE 526 465 (12) 207 2.8 394 38 40 42 7 7 5 14 13 12 9.8 8.9 8.4 3.5 3.3 3.2 26 26 26 4.8 5.2 5.7 21
Zee Entertainment Enterprises REDUCE 213 210 (2) 205 2.8 960 12 15 18 5 29 16 18 14 12 10.3 8.4 7.2 2.0 1.9 1.7 11.6 13.9 14.9 1.2 1.9 2.1 47
Media Cautious 523 7.2 (25) 61 13 23 14 13 12.8 8.2 7.3 2.4 2.3 2.1 10.6 16.1 16.9 2.4 3.5 3.9 95
Metals & Mining
Hindalco Industries BUY 395 500 27 887 12.2 2,220 26 43 45 44 67 4 15 9 9 7.7 5.7 5.1 1.3 1.2 1.0 9.1 13.4 12.4 0.8 0.8 1.0 101
Hindustan Zinc BUY 328 370 13 1,384 19.0 4,225 19 24 24 17 25 1 17 14 14 10.5 8.0 7.9 4.3 4.3 4.3 22 31 31 6.5 7.2 7.3 14
Jindal Steel and Power ADD 397 520 31 404 5.5 1,020 63 74 55 3,790 18 (25) 6 5 7 4.3 3.5 4.0 1.3 1.0 0.9 20 21 13.4 — — — 77
JSW Steel REDUCE 695 640 (8) 1,679 23.0 2,417 33 59 51 227 79 (13) 21 12 14 10.9 7.3 8.0 3.6 2.9 2.4 19.1 27 19.3 1.0 1.3 1.1 151
National Aluminium Co. SELL 72 65 (10) 133 1.8 1,866 4 7 6 452 71 (10) 18 10 11 8.1 5.3 6.1 1.4 1.3 1.2 7.8 13.1 11.1 2.8 4.8 4.4 35
NMDC REDUCE 181 110 (39) 532 7.3 2,931 20 14 8 34 (28) (40) 9 13 21 8.8 16.5 28.6 1.7 1.6 1.6 19.8 13.2 7.5 2.7 3.9 2.3 39

Tata Steel BUY 1,100 1,400 27 1,325 18.2 1,219 71 256 143 26 260 (44) 15 4 8 7.0 3.5 4.7 1.8 1.3 1.1 11.8 36 16.0 2.3 2.6 1.6 331
Vedanta REDUCE 268 270 1 997 13.7 3,717 33 40 36 406 21 (11) 8 7 8 4.9 3.3 3.3 1.6 1.4 1.3 21 22 17.8 3.5 6.5 6.6 68
Metals & Mining Attractive 7,341 100.7 109 68 (22) 13 8 10 7.4 5.0 5.6 2.1 1.7 1.6 15.7 22 15.4 2.7 3.5 3.2 817



Price (Rs) Fair Value Upside Mkt cap. O/S shares EPS (Rs) EPS growth (%) P/E (X) EV/EBITDA (X) P/B (X) RoE (%) Dividend yield (%) ADVT-3mo
Oil, Gas & Consumable Fuels
BPCL BUY 471 550 17 1,021 14.0 2,093 67 34 41 541 (49) 20 7 14 11 5.7 8.8 7.6 1.8 2.1 2.0 32.2 14.3 17.9 16.8 3.7 4.4 87
Coal India BUY 148 185 25 910 12.5 6,163 19 17 18 (31) (8) 4 8 9 8 7.4 7.1 6.4 2.9 3.1 3.2 36.2 34.7 38.1 13.6 13.6 13.6 31
HPCL BUY 282 310 10 399 5.5 1,419 80 34 37 1,014 (58) 11 4 8 8 4.9 8.3 7.7 1.1 1.0 0.9 34.7 12.7 13.1 8.3 4.8 5.3 24
IOCL BUY 110 125 14 1,034 14.2 9,181 26 14 16 755 (46) 17 4 8 7 4.0 5.2 4.7 0.9 0.9 0.8 23.2 11.3 12.4 10.9 6.4 7.5 38
Oil India SELL 136 85 (38) 148 2.0 1,084 0 8 9 (100) 8,787 13 1,458 16 14 11.0 7.2 6.9 0.6 0.6 0.6 0.0 3.6 4.0 2.5 2.4 2.8 3
ONGC SELL 118 90 (23) 1,479 20.3 12,580 8 14 15 (42) 85 4 15 8 8 5.1 3.7 3.4 0.6 0.6 0.6 4.2 7.5 7.4 2.1 4.6 4.9 44
Reliance Industries ADD 2,169 2,050 (5) 13,771 188.9 6,349 72 80 100 8 11 25 30 27 22 17.8 13.1 10.5 1.9 1.8 1.7 7.5 7.0 8.1 0.3 0.3 0.4 255
Oil, Gas & Consumable Fuels Attractive 18,762 257.4 52 (8) 17 16 18 15 10.0 8.9 7.6 1.6 1.5 1.4 9.6 8.3 9.1 2.7 1.9 2.1 481
Pharmaceuticals
Aurobindo Pharma REDUCE 970 930 (4) 569 7.8 586 55 60 65 13 8 10 18 16 15 10.5 9.8 8.6 2.6 2.3 2.0 14.7 14.0 13.6 0.4 0.9 1.1 34
Biocon SELL 386 300 (22) 463 6.4 1,202 6 8 10 1 31 26 62 47 37 27.8 20.2 16.7 5.5 5.0 4.5 8.9 10.6 12.1 - 0.7 0.9 20
Cipla BUY 946 1,040 10 763 10.5 806 30 34 48 55 15 40 32 28 20 17.4 15.8 11.3 4.1 3.7 3.2 12.9 13.3 16.1 (0.0) 0.7 1.0 86
Divis Laboratories REDUCE 4,220 3,750 (11) 1,120 15.4 265 75 94 107 44 26 14 56 45 39 38.4 31.8 27.6 12.0 10.3 8.8 21.3 22.9 22.3 - (0.8) (0.9) 40
Dr Reddy's Laboratories SELL 5,317 4,700 (12) 884 12.1 166 156 184 251 20 18 37 34 29 21 19.7 16.3 12.3 5.2 4.5 3.8 15.2 15.6 18.0 0.5 0.6 0.6 83
Gland Pharma REDUCE 3,080 2,550 (17) 505 6.9 163 61 78 92 23 28 18 50 39 33 36.5 29.6 24.4 8.5 7.0 5.8 16.9 17.8 17.4 — — — 14
Laurus Labs REDUCE 532 390 (27) 286 3.9 536 18 21 25 284 15 17 29 25 22 19.3 16.4 13.7 11.0 7.7 5.6 37.9 30.4 26.2 (—) — — 25
Lupin BUY 1,209 1,320 9 549 7.5 450 27 41 54 24 51 31 45 30 23 19.8 14.4 11.3 3.9 3.5 3.1 8.8 11.9 13.8 0.5 0.5 0.7 45
Sun Pharmaceuticals ADD 671 740 10 1,610 22.1 2,406 25 25 30 47 3 19 27 26 22 18.0 15.7 13.2 3.5 3.1 2.8 12.8 12.4 12.6 1.0 0.8 0.9 73
Torrent Pharmaceuticals REDUCE 2,787 2,800 0 472 6.5 169 74 86 103 29 16 20 38 33 27 19.9 17.5 15.3 8.1 6.9 5.9 21.4 21.3 22.0 0.7 1.1 1.3 12
Pharmaceuticals Attractive 7,220 99.1 36 15 23 34 29 24 20.1 17.2 14.1 4.8 4.2 3.7 14.2 14.4 15.5 0.4 0.4 0.5 431
Real Estate
Brigade Enterprises BUY 260 310 19 55 0.8 204 (4) 14 19 (158) 480 38 NM 19 13 22.7 7.4 6.7 2.5 2.2 2.0 NM 12.7 15.6 1.0 1.0 1.0 1
DLF REDUCE 287 245 (15) 711 9.8 2,475 5 7 9 298 48 28 61 41 32 48.3 41.6 34.8 2.0 2.0 1.9 3.4 4.8 6.0 0.7 0.7 0.7 39
Embassy Office Parks REIT ADD 326 360 11 309 4.2 948 7 10 12 (26) 35 20 44 33 27 20.6 16.0 13.6 1.1 1.2 1.3 2.8 3.6 4.5 5.9 7.4 8.7 5
Godrej Properties SELL 1,361 890 (35) 378 5.2 278 (7) 13 27 (163) 286 113 NM 108 50 (114) 177.0 70.2 4.5 4.4 4.0 NM 4.1 8.3 — — — 17
Mindspace REIT ADD 277 320 16 164 2.3 593 5 14 18 (39) 170 25 53 20 16 23.7 13.7 11.6 1.0 1.0 1.0 3.3 5.0 6.2 3.5 7.0 7.6 1
Oberoi Realty ADD 605 610 1 220 3.0 364 20 29 39 8 40 37 30 21 15 23.7 19.2 10.7 2.3 2.1 1.9 8.2 10.6 12.9 0.3 0.3 0.3 4
Phoenix Mills BUY 791 940 19 136 1.9 172 3 11 31 (72) 244 193 258 75 26 33.8 21.0 12.4 2.8 2.7 2.5 1.2 3.7 10.1 0.1 0.3 0.4 2
Prestige Estates Projects ADD 272 340 25 109 1.5 401 6 11 24 (41) 93 116 48 25 12 6.9 6.1 5.2 1.0 0.9 0.9 2.9 3.9 7.7 0.6 0.6 0.6 2
Sobha BUY 496 480 (3) 47 0.6 95 11 38 54 (65) 259 43 47 13 9 8.0 5.4 4.5 1.9 1.7 1.5 4.1 13.8 17.4 1.4 1.4 1.4 3
Sunteck Realty BUY 279 345 24 41 0.6 140 7 18 17 4 141 (8) 37 15 17 25.0 12.5 14.2 1.3 1.2 1.1 3.5 8.1 6.9 0.4 0.4 0.4 2
Real Estate Attractive 2,170 29.8 18 105 43 69 34 24 27.5 18.8 14.3 1.8 1.8 1.7 2.6 5.2 7.2 1.5 2.0 2.2 76
Retailing
Aditya Birla Fashion and Retail BUY 198 230 16 182 2.5 938 (8) (4) 4 (277) 47 184 NM NM 55 33.1 25.9 11.7 6.8 7.4 6.6 NM NM 12.6 — — — 7
Avenue Supermarts SELL 3,045 1,950 (36) 1,973 27.1 648 17 22 39 (19) 32 77 180 137 77 112 88 52 16.2 14.5 12.2 9.4 11.2 17.1 — — — 20
Titan Company ADD 1,592 1,625 2 1,413 19.4 888 11 19 27 (35) 76 43 145 82 58 82 51 38 18.8 16.3 13.6 13.7 21.2 25.6 0.2 0.4 0.5 41
Retailing Attractive 3,568 48.9 (50) 106 93 267 130 67 88 62 39 16.0 14.4 12.1 6.0 11.1 18.1 0.1 0.1 0.2 68

44
Price (Rs) Fair Value Upside Mkt cap. O/S shares EPS (Rs) EPS growth (%) P/E (X) EV/EBITDA (X) P/B (X) RoE (%) Dividend yield (%) ADVT-3mo
45
Speciality Chemicals
Castrol India BUY 132 165 25 131 1.8 989 6 8 9 (28) 39 13 22 16 14 14.2 10.4 9.2 9.3 8.7 8.2 43.0 56.8 60.4 4.2 5.7 6.4 3
Pidilite Industries REDUCE 2,067 1,760 (15) 1,050 14.4 508 22 26 34 (3) 15 32 93 81 61 62 55 43 18.8 16.5 14.1 22.6 21.8 24.9 0.4 0.5 0.6 18
S H Kelkar and Company BUY 154 185 20 22 0.3 141 10 10 12 107 4 18 16 16 13 10.7 9.4 8.0 2.3 2.1 1.9 15.2 14.0 14.8 1.1 1.6 2.1 1
SRF SELL 6,559 6,000 (9) 389 5.3 59 205 240 303 49 17 26 32 27 22 19.2 16.6 13.4 5.6 4.8 4.0 20.3 19.0 20.2 0.4 0.4 0.5 19
Speciality Chemicals Attractive 1,592 21.8 7 20 25 52 43 34 32.7 27.5 22.3 10.7 9.3 8.0 20.7 21.7 23.2 0.7 0.9 1.1 42
Telecommunication Services
Bharti Airtel BUY 533 700 31 2,927 40.2 5,492 (5) 11 22 NM NM NM NM 49 24 8.9 7.4 5.8 5.0 4.9 4.4 NM 10.1 19.6 - 1.1 1.1 103
Indus Towers ADD 242 250 3 651 8.9 2,695 20 19 19 10 (8) 2 12 13 13 5.3 5.0 4.8 4.1 3.9 3.7 32.8 31.3 30.3 8.3 6.6 6.6 12
Vodafone Idea RS 9 — — 245 3.4 28,735 (8) (6) (4) NM NM NM NM NM NM 10.4 7.9 6.5 (0.7) (0.6) (0.4) 176.3 47.4 25.7 — — — 27
Tata Communications BUY 1,123 1,220 9 320 4.4 285 47 52 62 24 11 19 24 22 18 9.8 8.7 7.5 277.2 27.1 12.9 NM 226 95.6 1.2 1.4 1.7 14
Telecommunication Services Attractive 4,143 56.8 40 72 213 NM NM 64 8.7 7.2 5.9 9.9 12.2 13.8 NM NM 21.4 1.3 1.9 1.9 156
Transportation
Adani Ports and SEZ ADD 798 825 3 1,630 22.4 2,112 21 30 37 (18) 44 21 38 26 22 24.1 17.0 13.2 5.5 4.0 3.5 15.9 17.8 17.2 0.6 0.4 0.4 204
Container Corp. SELL 693 540 (22) 422 5.8 609 10 14 18 (41) 39 31 69 49 38 38.5 30.4 18.8 4.1 3.8 3.5 6.0 8.0 9.8 0.7 - 0.5 35
Gateway Distriparks BUY 283 215 (24) 35 0.5 125 8 9 12 79 20 28 37 31 24 12.9 12.3 10.3 2.4 2.3 2.1 6.8 7.5 9.1 1.8 1.1 1.1 2
GMR Infrastructure BUY 26 25 (3) 155 2.1 6,036 (5) (3) (2) (54) 26 33 NM NM NM 67.3 19.7 14.6 (2.9) (2.2) (2.3) 71.3 33.3 21.8 — — — 7
Gujarat Pipavav Port BUY 106 119 12 51 0.7 483 5 6 7 (25) 38 17 23 17 15 10.4 8.9 7.5 2.5 2.5 2.6 10.6 14.9 17.6 4.2 5.8 6.7 1
InterGlobe Aviation BUY 1,746 2,100 20 672 9.2 383 (143) (93) 129 (2,103) 35 239 NM NM 13 159.7 24.4 4.1 43.6 (32.8) 4.1 NM 1,423.8 1,119.6 — — — 24
Mahindra Logistics REDUCE 546 490 (10) 39 0.5 71 5 13 18 (43) 161 36 108 41 30 27.9 18.4 14.2 6.9 6.1 5.3 6.5 15.6 18.6 — — — 1
Transportation Attractive 3,005 41.2 (158) 177 494 NM 139 23 31.4 19.1 10.3 7.3 6.3 5.0 NM 4.5 21.4 0.5 0.3 0.4 275
KIE universe 167,408 2,296 33.9 33.1 17.7 30.7 23.1 19.6 14.6 11.8 10.4 3.3 3.0 2.7 10.8 13.1 14.0 1.3 1.4 1.6
Notes:
(a) We have used adjusted book values for banking companies.
(b) 2021 means calendar year 2020, similarly for 2022 and 2023 for these particular companies.
(c) Exchange rate (Rs/US$)= 72.89


Disclosures
Kotak Institutional Equities Research coverage universe

Distribution of ratings/investment banking relationships
Percentage of companies covered by Kotak Institutional
70%
Equities, within the specified category.
60%
Percentage of companies within each category for which Kotak
Institutional Equities and or its affiliates has provided
50%
investment banking services within the previous 12 months.
40% * The above categories are defined as follows: Buy = We

32.5% expect this stock to deliver more than 15% returns over the next
27.4% 12 months; Add = We expect this stock to deliver 5-15% returns
30%
23.6% over the next 12 months; Reduce = We expect this stock to
deliver -5-+5% returns over the next 12 months; Sell = We
20% 16.5% expect this stock to deliver less than -5% returns over the next
12 months. Our target prices are also on a 12-month horizon
basis. These ratings are used illustratively to comply with
10%
3.8% 4.7% applicable regulations. As of 31/12/2020 Kotak Institutional
2.8%
0.5% Equities Investment Research had investment ratings on 212
0% equity securities.
BUY ADD REDUCE SELL
Source: Kotak Institutional Equities As of March 31, 2021
Ratings and other definitions/identifiers

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

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INDIA DAILY

June 2, 2021 India 1-Jun 1-day 1-mo 3-mo

Contents Global/Regional indices

Strategy FTSE 7,080 0.8 1.6 7.1

Rs/US$ 72.9 4 (90) (60)

maintain BUY FIIs 58 2,473 23,258

Siemens: Benefitting from refresh capex MFs (91) (68) (7,007)

materializing yet TATA in Equity 1,100 (2.3) 6.4 50.6

UPLL in Equity 816 0.1 34.4 38.1

HMCL in Equity 2,977 (1.0) 5.6 (11.1)

 CV segment volumes impacted by slowdown in economic activity amid

 Tractor segment fundamentals remain intact; expect recovery post easing of

 PNBHF announces large capital issuance

Growing divide between ‘income and ‘wealth’ QUICK NUMBERS

Inflation detracts from income, asset inflation adds to wealth

Total global market cap. (US$ tn)

China Germany India Japan US

Source: Bloomberg, Kotak Institutional Equities

KOTAK INSTITUTIONAL EQUITIES RESEARCH 3

Source: IMF, Kotak Institutional Equities

4 KOTAK INSTITUTIONAL EQUITIES RESEARCH

4QFY21– Earnings print broadly in line with expectations

Highlights from the Press release

 FMCG business witnessed continued recovery in Discretionary/’out-of-home’ categories

6 KOTAK INSTITUTIONAL EQUITIES RESEARCH

Exhibit 1: Interim standalone results of ITC, March fiscal year-ends, Rs mn

Source: Company, Kotak Institutional Equities

KOTAK INSTITUTIONAL EQUITIES RESEARCH 7

Exhibit 2: ITC - Key changes , 2021-2023E, March fiscal year-ends, Rs mn

Revised Earlier Change (%)

Source: Company, Kotak Institutional Equities estimates

Exhibit 3: ITC Sum-of-the-Parts (SOTP) valuation model, March fiscal year-ends, Rs mn

Source: Company, Kotak Institutional Equities estimates

Source: Company, Kotak Institutional Equities

8 KOTAK INSTITUTIONAL EQUITIES RESEARCH

Exhibit 5: Cigarette EBIT grew 8% yoy

Source: Company, Kotak Institutional Equities

KOTAK INSTITUTIONAL EQUITIES RESEARCH 9

Source: Company, Kotak Institutional Equities

Source: Company, Kotak Institutional Equities

10 KOTAK INSTITUTIONAL EQUITIES RESEARCH

2016 2017 2018 2019 2020 2021 2022E 2023E 2024E

Cigarettes business assumptions

Source: Company, Kotak Institutional Equities estimates

KOTAK INSTITUTIONAL EQUITIES RESEARCH 11

2016 2017 2018 2019 2020 2021 2022E 2023E 2024E

Source: Kotak Institutional Equities estimates, Company

12 KOTAK INSTITUTIONAL EQUITIES RESEARCH

Key highlights of the results and conference call

 Results were healthy on execution. Siemens reported a good sequential growth in

14 KOTAK INSTITUTIONAL EQUITIES RESEARCH

Source: Company, Kotak Institutional Equities estimates

KOTAK INSTITUTIONAL EQUITIES RESEARCH 15

Source: Company, Kotak Institutional Equities estimates

Source: Company, Kotak Institutional Equities estimates

16 KOTAK INSTITUTIONAL EQUITIES RESEARCH

Non-government Government Product / System Project Domestic Export

23.1% 17.1% 20.4% 18.7% 22.4% 20.4% 21.8%

76.9% 82.9% 79.6% 81.3% 77.6% 79.6% 78.2%

Source: Company, Kotak Institutional Equities

KOTAK INSTITUTIONAL EQUITIES RESEARCH 17

New estimates Old estimates Revision(%)

Source: Company, Kotak Institutional Equities estimates