India Strategy Sept2013

October 2013
India Strategy
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Contents
Section A: India Strategy - The Trilemma! ................................................................................. A1-56
Section B: 2QFY14 Highlights & Ready Reckoner ..................................................................... B1-12
Section C: Sectors & Companies .............................................................................................. C1-206
1.
2.
Automobiles
Ashok Leyland
Bajaj Auto
Eicher Motors
Exide Industries
Hero MotoCorp
Mahindra & Mahindra
Maruti Suzuki India
Tata Motors
2-13
6
7
8
9
10
11
12
13
Capital Goods
ABB
BHEL
Crompton Greaves
Cummins India
Havells India
Larsen & Toubro
Siemens
Thermax
14-24
17
18
19
20
21
22
23
24
3.
Cement
ACC
Ambuja Cement
Birla Corporation
Grasim Industries
India Cements
Jaiprakash Associates
Shree Cement
UltraTech Cement
25-36
29
30
31
32
33
34
35
36
4.
Consumer
Asian Paints
Britannia Industries
Colgate Palmolive
Dabur India
GSK Consumer
Godrej Consumer Products
Hindustan Unilever
ITC
Marico
Nestle India
Pidilite Industries
Radico Khaitan
United Spirits
37-52
40
41
42
43
44
45
46
47
48
49
50
51
52
State Bank
Union Bank
Yes Bank
5b. Financials - NBFC
Bajaj Finance
HDFC
IDFC
LIC Housing Finance
M & M Financial Services
Power Finance Corporation
Rural Electricfication
Shriram Transport
6.
7.
5a. Financials - Banks

Axis Bank
Bank of Baroda
Bank of India
Canara Bank
Federal Bank
HDFC Bank
ICICI Bank
Indian Bank
IndusInd Bank
ING Vysya Bank
Kotak Mahindra Bank
Oriental Bank
Punjab National Bank
53-74
59
60
61
62
63
64
65
66
67
68
69
70
71
8.
9.
Healthcare
Biocon
Cadila Healthcare
Cipla
Divis Laboratories
Dr Reddys Labs.
GSK Pharma
Glenmark Pharma
IPCA Laboratories
Lupin
Ranbaxy Labs.
Sanofi India
Sun Pharmaceuticals
Torrent Pharma
72
73
74
75-84
77
78
79
80
81
82
83
84
85-102
90
91
92
93
94
95
96
97
98
99
100
101
102
Media
D B Corp
Dish TV
HT Media
Jagran Prakashan
PVR
Sun TV Network
Zee Entertainment
103-113
107
108
109
110
111
112
113
Metals
Hindalco
Hindustan Zinc
Jindal Steel & Power
JSW Steel
Nalco
NMDC
Sesa Goa
SAIL
Tata Steel
114-125
117
118
119
120
121
122
123
124
125
Oil & Gas

BPCL
Cairn India
GAIL
Gujarat State Petronet
HPCL
IOC
Indraprastha Gas
MRPL
Oil India
126-141
130
131
132
133
134
135
136
137
138
ONGC
Petronet LNG
Reliance Industries
139
140
141
10. Real Estate

Anant Raj Industries
DLF
Jaypee Infratech
Mahindra Lifespaces
Oberoi Realty
Phoenix Mills
Prestige Estate Projects
Unitech
142-154
147
148
149
150
151
152
153
154
11. Retail
Future Retail
Jubilant Food
Shoppers Stop
Titan Industries
155-161
158
159
160
161
12. Technology
Cognizant Technology
HCL Technologies
Hexaware Technologies
Infosys
KPIT Cummins
Mindtree
MphasiS
Persistent Systems
TCS
Tech Mahindra
Wipro
162-176
166
168
169
170
171
172
173
173
174
175
176
13. Telecom
Bharti Airtel
Bharti Infratel
Idea Cellular
Reliance Communication
177-186
183
184
185
186
14. Utilities
187-200
CESC
191
Coal India
192
Jaiprakash Power Ventures
193
JSW Energy
194
NHPC
195
NTPC
196
Power Grid Corp.
197
PTC India
198
Reliance Infrastructure
199
Tata Power
200
15. Others
201-206
Bata India
201
Castrol India
202
Multi Commodity Exchange
203
Sintex Industries
204
United Phosphorus
205
V-Guard Industries
206
Note: All stock prices and indices for Section C as on 27 September 2013, unless otherwise stated
India Strategy | The Trilemma!
India Strategy
BSE Sensex: 19,727
S&P CNX: 5,833
The Trilemma
INR direction | Elections outcome | Sector preferences
INDIAN EQUITIES: CY13 YTD return are flat, zero returns over 6 years
2013 has been a year of flat markets. The 10-year CAGR up to 2012 is 19%, (20032013: 13%) despite a flat markets for the last 6 years. Over the last 4 quarters,
markets have been very range-bound.
Technology, Telecom, Healthcare, Cement continue to be top performers for 2013.
At 19,400, the BSE Sensex P/E is at 8% discount to LPA (12-month forward) and
Sensex P/B at 17% discount to LPA (12-month forward).
Market cap to GDP at 56% is well below the averages and is closer to the lows of
last decade.
FIIs continue to be buyers in 2013YTD worth USD13.4b; however DIIs are big sellers
to the tune of USD 8.3b.
2QFY14 PREVIEW: The dollar divide | Aggregate PAT up 3%; Nifty USDdenominated PAT up 19%, others down 5%
We expect MOSL Universe of 140 companies (ex RMs) to report aggregate 2QFY14
PAT growth of 3% YoY. This is an improvement over 2% YoY de-growth seen in 1QFY14.
2HFY14 performance is expected to be even better with PAT growth of 11-12% YoY.
The sharp 13% YoY depreciation of the INR vis--vis the USD is expected to boost PAT
growth of USD-denominated sectors such as Technology, Healthcare and Metals.
Within Nifty, USD-denominated companies' PAT is expected to grow 19% YoY,
whereas others' PAT is expected to decline 5% YoY.
Expect Sensex 2QFY14 PAT to grow 5% YoY.
Within Sensex, top 5 PAT growth companies are: Tata Steel (loss to profit), Maruti
(+110% YoY), Dr Reddy's (+39%), Sun Pharma (+36%) and TCS (+30%). Top 5 PAT degrowth companies: BHEL (-57% YoY), Bharti (-54%), State Bank (-35%), Tata Power
(-34%) and Jindal Steel (-31%).
FY14/15 Sensex EPS is downgraded 3-4% (from Jun-13 estimates).
FY13-15 Sensex EPS CAGR stands at 11% v/s 14% a quarter ago.
FY08-13 EPS CAGR at 7%; expect rebound in FY13-15
October 2013
FY15E
FY10
1,190
1,476
1,289
FY14E
834
1,123
FY13
820
FY11
833
FY09
FY07
FY03
523
FY06
FY02
450
FY05
236
348
FY04
216
FY01
718
FY08
1,024
FY12
FY01-08:
21% CAGR
272
FY13-15E:
11% CAGR
FY08-13:
7% CAGR
FY01-13A: 15% CAGR

FY01-15E: 15% CAGR
A1
2QFY14 performance of MOSL Universe by sector Seculars do, cyclicals undo

SECTOR
(no. of companies)
High growth sectors
Technology (9)
Health Care (13)
Media (7)
NBFC (8)
Consumer (13)
Metals (9)
Private Banks (8)
Auto (8)
Med/Low growth sectors
Retail (4)
Utilities (10)
PAT de-growth sectors
Oil Excl. RMs (9)
Real Estate (8)
Telecom (4)
Cement (8)
Capital Goods (8)
PSU Banks (8)
Others (6)
MOSL Excl. RMs (140)
Sensex (30)
Sep-13
Sales
YoY %
3,350
504
227
39
85
324
1,143
143
885
628
62
567
2,928
1,758
45
353
166
333
274
52
6,958
4,777
16
31
24
17
21
12
11
19
14
5
-1
5
10
15
11
9
-1
-5
6
11
12
12
EBITDA
Sep-13
YoY %
798
140
52
11
80
69
216
116
115
160
6
154
638
276
16
111
30
32
173
9
1,604
986
22
39
20
19
19
15
18
17
26
5
-3
5
0
6
7
11
-20
-22
-6
8
10
12
PAT
Sep-13
YoY %
444
98
34
5
52
46
90
66
53
89
2
87
277
170
6
12
14
18
56
4
815
509
16
29
17
15
14
13
13
12
11
8
9
8
-14
-1
-6
-7
-31
-32
-33
-2
3
5
PAT
Share %
Delta
Share %
55
12
4
1
6
6
11
8
7
11
0
11
34
21
1
2
2
2
7
0
100
NA
264
92
21
3
27
23
44
30
23
29
1
28
-193
-10
-2
-4
-26
-36
-115
0
100
NA
EBITDA Margins
Sep-13
YoY bp
23.8
27.8
22.7
29.3
94.3
21.2
18.9
80.5
13.0
25.4
9.4
27.2
21.8
15.7
36.3
31.4
18.1
9.5
63.3
16.6
23.0
20.6
111
154
-83
48
-217
58
102
-138
121
2
-19
-7
-213
-134
-156
72
-442
-215
-850
-50
-40
6
ELECTIONS: The game-changing juggernaut | Forthcoming State elections

may well be a gauge of the national mood
State elections - gauge of national mood: During Nov-Dec'13, assembly elections
will be held in 5 states of Rajasthan, Madhya Pradesh, Chattisgarh, Delhi and
Mizoram aggregating 73 of 543 Lok Sabha seats (13% of total seats). The assembly
elections assume significance because the results could be a referendum for the
General elections highlighting the national mood.
Decoding the election trends: Our analysis of elections led us to some interesting
findings and perspectives:
Seat share can be disproportionate to vote share: The data on seats won
percentage to vote share percentage suggests that parties have won less seats
in a particular year despite its vote share remaining the same. This suggests
that the margin of victory is slender in many seats (more than 35% seats were
won with less than 5% margin victory in 2009 general elections).
Higher voter turnout an indicator of a change in government?: The past 10
general election trends suggest that a voter turnout of 60% or above has
resulted in a change in government (barring 1984 which Congress won due to
sympathy wave on assassination of former Prime Minister, Ms. Indira Gandhi).
What could be the odds of an NDA government: Based on the opinion polls and
predictions, odds favor anti-incumbency. We analyse possible scenario which could
drive an NDA government. Association with allies and their performance remains
a key monitor to watch.
Markets - build-up pre-elections; sharp reactions post elections: Markets sees
some build-up prior to the elections. However, it witnesses sharp reactions post
the election results. Normally, a decisive voting in favour of a party is positively
October 2013
A2
perceived by the markets, whereas a fractured government witnesses negative

reactions.
ECONOMY: Three events to watch out for in 2HFY13 | Stable INR, declining
food inflation and uncertain government finance
Our views on three important events that for Indian economy in 2HFY14 are as under.
Sharp improvement in CAD to define INR path
Expect CAD to correct sharply to 2.9% of GDP in FY14 (4.8% in FY13)
Government/RBI measures (e.g. gold import curbs) have started yielding results
Expect INR to stabilize at 62/USD levels
Food inflation to fall on good monsoon
FY14 monsoon 6% above normal; the best since FY08
Foodgrain production should see a record of 265m tons (+4% YoY)
CPI Inflation to ease to 8% by Mar-14 v/s 10.4% a year ago
Measures to achieve fiscal deficit targets bunched up
Diesel price hike, disinvestments, spectrum sale have got bunched up in 2HFY14
Expect revenue shortfall of INR638b requiring matching expenditure cuts
Our FY14E GDP growth of 4.5% factors in slowdown in government expenditure.
MARKET OUTLOOK & MODEL PORTFOLIO

Nifty remains range-bound due to external and domestic factors
Nifty has largely remained range-bound with -3% returns YTDCY13, while Sensex
was flat, led by concerns of significant slowdown in domestic economy.
Corporate earnings growth at 7-8% remains well below the long term averages;
divergence between domestic and export oriented businesses is at a decade high.
Stable currency and elections will be key triggers
Change in RBI governor along with delayed tapering of QE has brought stability to
the currency. This should help to ease some of the recent monetary tightening
steps. Good monsoons should bring down the inflation and rejuvenate the rural
economy with more disposable income in the hands of the rural consumers.
In 3QFY14, various important state elections will be viewed as a proxy to the

General elections in 2014. This will be an important catalyst for the market.
Divergence in market valuations
The market breadth has worsened with huge divergence in sector valuations. At
one end of the valuations are global cyclicals like Metals, Oil & Gas and domestic
cyclicals like Capital Goods, Real Estate, PSU Banks which are trading significantly
below historic averages; some of them at historic lows.
At the other end, is the Consumer sector trading at close to all time high valuations.
Also, some sectors look attractive with current valuations close to their historical
averages like Technology and Healthcare.
Divergence is not only observed sector-wise; but even in terms of heavyweight

and mid-cap/small-cap stocks. While CNX Nifty has remained nearly flat (-3%
returns), mid-caps and small-caps have given -18% and -26% returns, respectively.
STRATEGY:
Navin Agarwal (Navin@MotilalOswal.com) | Rajat Rajgarhia (Rajat@MotilalOswal.com)
ECONOMIST: Dipankar Mitra (Dipankar.Mitra@MotilalOswal.com)

Sources of exhibits in this section include RBI, CMIE, Bloomberg, IMF, UN, Rogers International, Industry, Companies, and MOSL database
October 2013
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India Str at egy | The Trilemma!
2QFY14 PREVIEW The dollar divide

Aggregate PAT up 3%; Nifty USD-denominated PAT up 19%, others down 5%
We expect MOSL Univ erse of 140 c ompanies (ex RMs) to r eport aggregate 2QFY14 PAT
gr owth of 3% YoY. This is an improvement over 2% YoY de-growth seen in 1QFY14.
2HFY14 performance is e xpected t o be even better with PAT growth of 11-12% YoY.
The sharp 13% YoY depreciation of the INR vis--vis the USD is expected to boost PAT
gr owth of USD-denominated sectors such as Technology, Healthcare and Metals.
Within Nifty, USD-denominated companies' PAT is expected to grow 19% YoY, whereas
others' PAT is expected to decline 5% YoY.
Expect Sensex 2QFY14 PAT to grow 5% YoY.
Within Sensex, top 5 PAT growth companies are: Tata Steel (loss to profit), Maruti (+110%
YoY), Dr Reddy's (+39%), Sun Pharma (+36%) and TCS (+30%). Top 5 PAT de-growth
companies: BHEL (-57% YoY), Bharti (-54%), State Bank (-35%), Tata Power (-34%) and
Jindal Steel (-31%).
Expect 2QFY14 Aggregate PAT to grow 3% YoY

We expect MOSL Universe of 140 companies (excluding RMs i.e. 3 major oil refining &
marketing companies IOC, BPCL, HPCL) to report aggregate 2QFY14 PAT growth of 3%
YoY. This is an improvement over 2% YoY de-growth seen in 1QFY14.
2HFY14 performance is expected to be even better with PAT growth of 11-12% YoY,
inching towards the long-period average of 15%
Expect 2QFY14 PAT to grow 3% YoY; fifth consecutiv e quarter of PAT growth below LPA
Global crisis
quarters
11 9
3 12 11
3
-2
Mar-14E
Dec -13E
Sep-13E
J une-13
Dec-12
Mar-13
Sep-12
Mar-12
J une-12
Sep-10
Dec-10
J une-10
Mar-10
Dec-09
-9
Sep-09
Mar-09
-11 -13
J une-09
Dec-08
Sep- 08
Mar-08
J une-08
Sep- 07
Dec-07
J une-07
-5
17 13 12
Dec-11
26
Sep-11
31
24 26
Mar-11
34
MOSL Universe Comparable Universe PAT Growth ex R Ms

42
MOSL Universe
33
Quarterly PAT growth
27 30
23
LPA : 15%
19 18
J une-11
43
In terms of September quarter growth, the 3% YoY PAT growth of Sep- 2013 is the
lowest in the last 8 years, barring the global crisis quarter of Sep-2009. PAT margin has
hit an all-time low on the back of higher interest costs and MTM forex losses.
On the positive side, some financial metrics like Sales growth and EBITDA growth are
showing initial signs of things turning better. 2QFY14 sales growth is expected to be
12% v/s 4% in 1QFY14. This is expected to improve further in 2HFY14.
Likewise, 2QFY14 EBITDA growth at 10% YoY is much better than 5% YoY in 1QFY14.
2HFY14 EBITDA growth is expected to be even higher at 15%.
October 2013
A7
Sep-2013 Sales and PAT gr owth is the lowest in the last seven September quarters ex global crisis
38
MOSL Universe
2Q Sales growth
LPA: 21%
39
MOSL Universe
2Q PAT growth
LPA: 15%
34
27
26
26
21
16
2Q amidst
global crisis
12
2Q amidst
global crisis
-3
12
11
-9
Sep-07 Se p-08 S ep-09 Sep -10 S ep-11 S ep-12 Sep -13E
Sep-07 Sep -08 Se p-09 Sep-10 Sep-11 Sep -12 Sep -13E
Sep-13 quarter sales growth should improve to 12% YoY from 4% in previous quarter;
growth in next two quarters is expected to be 13-15%
43
38 38
44
MOSL Universe Comparable Universe Sales Growth ex R Ms (%)

MOSL Universe
39
36
Quarterly
Sales growth
29 31 26
24 28 25 21 23
LPA : 21%
15
19 20 16 13 9
19
4 12 13 15
Mar-12
June-12
S ep-12
Dec-12
Mar-13
June-13
Sep-13E
Dec-13E
Mar-14E
Dec-10
Mar-11
June-11
S ep-11
Dec-11
June-10
S ep-10
S ep-09
Dec-09
Mar-10
June-07
Sep- 07
Dec-07
Mar-08
June-08
Sep- 08
Dec-08
Mar-09
June-09
-7 -3
Global crisis
quarters
Sep-13 quarter EBITD A growth at 10% YoY is higher than 5% of Jun-13 quarter;
2H should be even better
37 35
35
27 28
25
0
MOSL Universe Comparable Universe EBITDA Growth

42
MOSL Universe
Quarterly EBITDA growth
31
26 23
LPA : 18%
32
3
17 14 12 8 15 15 11 11 9 5 10 15 15
October 2013
Dec-12
Mar-13
June-13
Sep-13E
Dec-13E
Mar-14E
Mar-11
June-11
Sep-11
Dec-11
Mar-12
June-12
Sep-12
Sep-10
Dec-10
Dec-08
Mar-09
June-09
Sep-09
Dec-09
Mar-10
June-10
June-07
Sep- 07
Dec-07
Mar-08
June-08
Sep- 08
-6 -5
Global crisis
quarters
A8
Sep-13 EBITDA margin (ex RMs and Financials) at 19.1%; below LPA for several quart ers now
22.5
21.9
FY10
FY11
FY12
FY13
4QE
3QE
19.8
19.5 19.2 19.1 19.7
2QE
18.6
1Q
2Q
1Q
4Q
3Q
2Q
1Q
4Q
3Q
2Q
1Q
FY09
19.6 19.1
19.0 19.3
4Q
20.1
19.0
4Q
3Q
2Q
1Q
18.8
3Q
20.7
2Q
21.5
MOSL Universe EBITDA Margin LPA: 20.5%
20.6
22.5
1Q
21.0
22.1
4Q
22.3
22.5
3Q
23.5
FY14E
Sep-13 PAT margin (ex RMs and Financials) at 10%; below LPA for se veral quarters now
14 .8
1 3.5
MOSL Universe PAT Margin LPA: 11.6%
FY09
FY10
FY11
FY12
FY13
4QE
3QE
2QE
1Q
4Q
3Q
10.5 1 0.7
1 0.6 1 0.1 1 0.7 10.3
10 .0
2Q
1Q
4Q
1 1.4 11.2
3Q
1 0.7
2Q
11.3
1Q
4Q
3Q
2Q
1Q
4Q
3Q
2Q
1Q
4Q
3Q
2Q
1Q
11 .0 10 .8
13.1 12.7
12.3 12.6 12.2 11.9
12.4
11.8 11.8
FY14E
PAT distribution also showing early signs of improvement

The distribution of PAT growth of India Inc is marginally improving on two fronts 1. Firstly, percentage of companies reporting PAT de-growth seems to be bottoming
out, down from a peak of 42% in Mar-2013 to an expected 38% in Sep-2013 and
further lower to 26% and 32% in the next two quarters.
2. At the same time, percentage of companies reporting PAT growth higher than 30%
seems to be rebounding after the bottom of 19% in the Jun-2013 quarter.
PAT distribution improving; fewer companies reporting PAT de-growth
-2
12 11
Sep 13E
June 13
Mar 1 3
Dec 12
Sep 12
28
June 12
34 42 4 0 30 3 9 39 42 41 38 2 6
23
24 1 7 17
19
17 21 25
16 1 3
20
25 18 2 2 20 1 8
20 17 18 16
31
21 24 2 5 26 2 7 24 24 19 21
Mar 14E
18 11
Mar 1 2
June 11
Mar 1 1
Dec 10
Sep 10
June 10
Mar 1 0
Dec 09
Sep 09
Ex RMs (%)
Dec 13E
13 11
27 30 27 2 5 24 31
41 32 3 5 31
9
18
14 1 4 9 13 10 20 1 8
24
17
18
22
21 1 8 23
22 1 0
14
24
4 1 43 51 38 32 3 9 35
32
27
21
June 09
Dec 08
Sep 08
June 08
Mar 0 8
Dec 07
Sep 07
June 07
Mar 0 7
<0%
Dec 11
15 24 26 20 -8 -15 -15 -11 23 42 26 22 24
PAT Growth Ex RMs (%)

October 2013
>0-15%
Sep 11
>15-30%
Mar 0 9
55 36 34 25
>30%
11 17 14 14
21 24 2 3 26
11
42
11 11 15
14
19
19 2 4 26
19 23 23
21 11
1 8 18 22
10
60 54 52
48 44 45
3 5 30 26
Dec 06
% of MOSL Universe companies
Earnings Growth
32
23
18
A9
Sector and company analysis: The dollar divide

Analyzing the Sep-13 results by sector clearly suggests the significant role of the strong
dollar and weak rupee.
During the quarter ending Sep-13, the INR depreciated a sharp 13% YoY (11% QoQ)
vis--vis the USD. This is expected to significantly boost the performance of USDdenominated sectors such as Technology, Healthcare and Metals.
Auto sector PAT growth (11% YoY) is also well above the aggregate (3% YoY) on the
back of USD-denominated sales and PAT of JLR in Tata Motors (PAT up 27% YoY).
Over and above the dollar divide, the "seculars v/s cyclicals" theme of the preceding
two quarters is expected to play out in the Sep-13 quarter as well. Secular sectors
like Consumer, Media, Retail and Telecom should clock far superior PAT growth
compared to their cyclical counterparts such as Capital Goods, Cement and Real
Estate.
The Financials sector overall is expected to report PAT de-growth of 7% YoY.
However, the relatively more secular sub-sectors of NBFCs (PAT +14% YoY) and
Private Banks (PAT +12% YoY) are likely to deliver much superior performance
than the cyclically vulnerable PSU Banks (PAT -33% YoY).
2QFY14 performance of MOSL Universe by sector Seculars do, cyclicals undo
SECTOR
(no. of companies)
High growth sectors
Technology (9)
Health Care (13)
Media (7)
NBFC (8)
Consumer (13)
Metals (9)
Private Banks (8)
Auto (8)
Med/Low growth sectors
Retail (4)
Utilities (10)
PAT de-growth sectors
Oil Excl. RMs (9)
Real Estate (8)
Telec om (4)
Cement (8)
Capital Goods (8)
PSU Banks (8)
Others (6)
Sensex (30)
October 2013
Sep-13
Sales
YoY %
3,350
504
227
39
85
324
1,143
143
885
628
62
567
2,928
1,758
45
353
166
333
274
52
6,958
4,777
16
31
24
17
21
12
11
19
14
5
-1
5
10
15
11
9
-1
-5
6
11
12
12
EBITDA
Sep-13
YoY %
798
140
52
11
80
69
216
116
115
160
6
154
638
276
16
111
30
32
173
9
1,604
986
22
39
20
19
19
15
18
17
26
5
-3
5
0
6
7
11
-20
-22
-6
8
10
12
PAT
Sep-13
YoY %
444
98
34
5
52
46
90
66
53
89
2
87
277
170
6
12
14
18
56
4
815
509
16
29
17
15
14
13
13
12
11
8
9
8
-14
-1
-6
-7
-31
-32
-33
-2
3
5
PAT
Share %
Delta
Share %
55
12
4
1
6
6
11
8
7
11
0
11
34
21
1
2
2
2
7
0
100
NA
264
92
21
3
27
23
44
30
23
29
1
28
-193
-10
-2
-4
-26
-36
-115
0
100
NA
EBITDA Margins
Sep-13
YoY bp
23.8
27.8
22.7
29.3
94.3
21.2
18.9
80.5
13.0
25.4
9.4
27.2
21.8
15.7
36.3
31.4
18.1
9.5
63.3
16.6
23.0
20.6
111
154
-83
48
-217
58
102
-138
121
2
-19
-7
-213
-134
-156
72
-442
-215
-850
-50
-40
6
A10
INR depreciated 13% YoY v/s the USD ...
... and 11% QoQ

70
62.2
68.8
2QFY14 USD-INR average

62.1, down 11% QoQ
65
55.9
55.2
54.2
62.6
60
54.2
59.5
26-Sep-13
19-Sep-13
12-Sep-13
4-Sep-13
28-Aug-13
21-Aug-13
13-Aug-13
S ep-13
5-Aug-13
Jun-13
29-Jul-13
Mar-12
22-Jul-13
Dec-12
15-Jul-13
Sep -12
8-Jul-13
1-Jul-13
55
The twin theme of "dollar divide" and "secular-cyclical" finds expression in virtually
every dissection of the Sep-2013 results Sales growth: Expect Technology, Healthcare, Media, Auto and Consumer to grow
sales higher than aggregate
EBITDA Margin, growth: The only sectors which are expected to expand EBITDA
margin are Technology, Auto, Metals, Telecom, Consumer and Media. These very
sectors lead EBITDA gro wth. Interestingly, Healthcare margins are expected to
shrink 83bp. This is mainly due to companies who have no or relatively low share
of USD revenues, viz, Glaxo, Sanofi and Cipla. Excluding these 3 companies,
Healthcare margins actually improve 13bp YoY.
PAT growth and contribution to growth: Technology sector (PAT + 26% YoY) accounts
for as high as 95% of the estimated incremental PAT over Sep-2012 quarter. Private
Banks, NBFC, Auto and Consumer are also high positive contributing sectors
whereas PSU Banks, Capital Goods and Cement are major drags on aggregate PAT.
Cement
-215
-442
Capital
Real
-134-156
Oil Excl.
Health
MOSL*
Media
Consumer
Retail
Cement
Utilities
Telec om
Metals
Real Es tate
Financials
Consumer
MOSL Ex .
Auto
Oil Ex. RMs
Media
Health Care
Technology
-5
-7 -19
-50 -83
Others
-1
-1
-1
October 2013
72 58 48
Telecom
Metal s
Auto
12 12 12 11 11
Technology
17 15 14
121 102
Retail
215
24
Cap Goods
31
EBITDA Margin delta by sector (bp): Technology tops again
Utiliti es
Sales growth by sector (%): USD-denominated businesses lead
A11
EBITDA growth by sector (%): USD and secular plays dominate

39
PAT growth by sector (%): A near encore of EBITD A growth

29
17 15
13 13 11
9
26
20 19 18
15
11 10
5
-1
-6 -7
-7
-3
-31 -32
Oil Ex. RMs
Re al Estate
Te lecom
Fi nancials
Ce me nt
Cap Goods
Ce me nt
Te lecom
Re al Estate
Media
MOSL Ex.
Uti litie s
Retail
Auto
Me tals
Consume r
Media
2
Cap. Goods
Contribution to 2QFY14 PAT growth by sector (%)
Health
Technology
Cap Goods
Ce ment
Re tai l
Uti litie s
Fi nancials
Oil Ex. RMs
MOSL Ex.
Re al Estate
Te le com
Consume r
Metals
Media
Health
Auto
Technol ogy
-20 -22
Sector-mix of 2QFY14 PAT (%)

21
92
44 30 28 27
23 23 21
3
12 11
11
-2 -4
-10
-26 -36
Retail
Health
Consume r
NBFC
Auto
Banks - PSU
Banks - Pvt
Uti litie s
Metals
Technology
Oil Ex. RMs
Banks - PSU
Cap. Goods
Ce me nt
Oil Ex. RMs
Te lecom
Re al Estate
Retail
Media
Health
Consume r
Auto
NBFC
Uti litie s
Banks - Pvt
Metals
Technology
-115
Other sector highlights

Oil & Gas PAT stagnating
Sep11
Dec11
Mar12
Jun12
Sep12
Dec12
Mar13
Jun13
Sep13E
167
129
135
145
163
157
126
133
161
Oil & Gas ex RMs Qtr PAT (INR b)
Overall
Expect Technology, Healthcare and Consumer to clock their highest ever sector
PAT in a quarter. Media should clock its highest ever September quarter PAT of
INR5.4b, which is close to its all-time high quarterly PAT of INR5.6b in 1QFY14.
For some sectors - Oil & Gas (ex RMs), Metals, Utilities and Cement - quarterly PAT
run rate is stuck in a band.
Consumer and Retail are the only two sectors where all companies are expected
to clock positive PAT growth. Cement has the dubious distinction of all companies
likely to report PAT de-growth.
Automobiles
PAT growth divergence
45 PAT growth YoY (%)

30
M&M
15
0
-15
B ajaj Auto
October 2013
Dec-13E
Mar-14E
Sep-13E
Mar-13
June-13
Dec-12
S ep-12
-30
PAT growth of 11% YoY is primarily led by 27% YoY growth in Tata Motors PAT on the
back of JLR. Ex Tata Motors, sector PAT is flat, dragged down by M&M (-13% YoY)
and Ashok Leyland (profit to loss).
Maruti 's profits remain volatile; expect 110% YoY growth in PAT in Sep-2013 quarter.
Capital Goods
Expect second successive quarter of 32% PAT de-growth YoY primarily given 57%
expected PAT de-growth for BHEL.
BHEL's performance is expected to remain weak for the rest of FY14; however,
some companies like Crompton, ABB and Siemens could post PAT growth in 2HFY14
given base effect of FY13.
A12
Technology, Consumer, Healthcare to clock all-time high quarterlyPAT; Media highest ever Sep quarter PAT
Technology Sector Quarterly PAT (INR b)
Consumer Sector Quarterly PAT (INR b)
97.9
65.0
67.4
73.9
76.2
76.1
80.5
85.6
42.9
39.6
54.4
44.3
40.8
38.0
Sep-13E
Jun-13
Mar-13
Dec-12
Sep-12
Jun-12
Dec-11
Sep-11
Sep-13E
Jun-13
Mar-13
Dec-12
Sep-12
Jun-12
Mar-12
Dec-11
Mar-12
36.4
35.5
Sep-11
46.3
44.8
Media Sector September Quarter PAT (INR b)
Healthcare Sector Quarterly PAT (INR b)
5.4
33.3
23.0
24.4
21.8
4.1
4.3
S ep-11
33.3
29.3
S ep-10
34.4
4.6
3.1
26.8
23.1
Cement: The worst over?
46
39
Ce ment PAT (INR b )

Yo Y (%)
48
38
32
28
-14
-30
Sep-13E
S ep-12
S ep-09
S ep-08
Sep-13E
Jun-13
Mar-13
Dec-12
Sep-12
Jun-12
Mar-12
Dec-11
Sep-11
0.9
Cement
All Cement companies are expected to clock PAT de-growth.

However, Sep-2013 quarter may well see the worst behind for the sector. Some
demand revival in the following quarters coupled with low base of 2HFY13 may
see 2HFY14 PAT bounce back to positive YoY growth.
Consumer
2HFY14
1HFY14
2HFY13
1HFY13
All Consumer companies are expected to clock positive PAT growth.

Aggregate PAT growth of 13% YoY is contingent on performance of ITC (+14% YoY)
and HUL (+7% YoY), which together account for almost two-thirds of sector PAT.
Financials
Expect first ever quarter of YoY PAT de-growth led by 33% de-growth in PSU Banks'
PAT on the back of higher NPA provisions and MTM losses on their securities
portfolio.
Within Financials, the private and the public sector present a study in contrast.
Among Private Banks and NBFCs, only one company in each sub-sector is expected
to see PAT de-growth - Federal Bank and IDFC. Against this, among PSU banks, only
one company is likely to report positive PAT growth, viz, Bank of Baroda.
Expect NBFCs led by PFC and REC to report a strong 14% PAT growth despite an
adverse business environment. HDFC will report mere 5% growth due to high
base of sale of investment gains in 2QFY13.
October 2013
A13
Sharp 33% YoY dip in PSU Banks' PAT

Pri vate Bank s
102
84
82
83
38
37
41
42
45
46
53
58
55
58
Dec-11
92
Financials PAT growth YoY (%)
51.1
PSU B anks
Sep-11
75
NBFC
to lead to first ever YoY PAT de-growth for Financials
83
36.5
87
56
17.6
13.4
47
55
52
52
68
72
69
66
13.7
10.3
4.9
10.5
Sep-13E
Jun-13
Mar-13
Dec-12
Sep-12
Jun-12
Mar-12
Dec-11
Sep-11
Sep-13E
Jun-13
Mar-13
Dec-12
Sep-12
Jun-12
Mar-12
-7.3
Only one company each in Pv t Banks and NBFC to see PAT de-growth; in contrast, only one PSU Bank to see PAT growth
28
HDFC
Kotak
Ma h.
In dusIn d
ING
Vys ya
Axi s
ICICI
Yes
PSU B anks 2QFY14 PAT growth
NB FC 2QF Y14 PAT growth
Pvt Banks 2QFY14 PAT growth
22
20
16
LIC HF
37
Ba jaj
32
-22
PNB
REC
23
S BI
HDFC
STF
IDFC -10
Fede ral -24
-20
23
21
69
Ori en tal
M&M Fi n
PFC
BOI
-35
-39
B OB
Cana ra
-44
Uni o n
-47
Indi a n -59
Metals
Metals PAT is expected to grow at a reasonably healthy 13% YoY on the back of
profit rebound in Tata Steel, Nalco, and SAIL.
Steel companies are expected to have a good quarter led by ~20% volume growth
on low base.
Non-ferrous companies are expected to benefit from higher rupee realization on
the back of weak INR.
Telecom
Telecom PAT is expected to decline 7% YoY despite 11% YoY growth in EBITDA on
the back of improving RPM.
Bharti is a major drag on sector PAT. Despite 8% EBITDA growth, PAT is expected to
decline 54% YoY on the back of MTM forex losses. Ex Bharti, sector PAT is expected
clock 47% growth, the highest across sectors.
Idea is expected to follow up its 100%+ PAT growth in 1QFY14 with 80% growth in
2Q.
Profit growth momentum for the sector is expected to be sustained in 2HFY14 and
FY15.
October 2013
A14
Nifty and the dollar divide

We classified the 50 Nifty companies into (1) USD-denominated and (2) Others. The
USD-denominated Nifty includes Technology, Healthcare, Metals, Oil & Gas (Reliance,
Cairn) and Tata Motors' JLR operations. The key findings are as under USD-denominated Nifty is expected to clock aggregate PAT growth of 19% YoY,
whereas others are likely to see PAT de-growth of 5%.
USD-denominated Nifty's Sales growth has been consistently higher than others,
but the gap is expected to widen sharply in Sep-2013 quarter on the back of 13%
YoY depreciation in the INR.
Interestingly however, such a steep depreciation of the rupee is not expected to
lead to a major boost in EBITDA margins (Sep-2013 USD-denominated EBITDA
margins are expected to be up only 50bp YoY). This implies that the weak INR has
significantly helped cushion cost pressures and/or increase volume growth on
the back of lower USD selling prices to customers.
EBITDA and PAT growth of both USD-denominated and others mirrors Sales growth.
For USD-denominated Nifty, PAT growth is broadly in line with EBITDA growth. For
non-USD Nifty, PAT growth is lower than EBITDA growth due to (1) higher interest
cost, and (2) MTM forex losses.
Nifty - USD sales growth poised to sky-rocket
$ D e n omi n a te d
T o ta l N i fty Co mp a n i e s
Oth e rs
25
Mar-14E
Dec-13E
Sep-13E
June-13
Mar-13
Dec-12
7
-1
6
0
9
4
-3
-3
June-13
Ma r-13
Dec-12
-11
18
10
10
6
-5
Mar-14E
7
10
9
8
25
Dec-13E
17
19
Sep-13E
11
$ D e no mi na te d
21
Se p-12
Sep-12
Mar-14E
15
June-12
June-12
Mar-12
Dec-11
Sep-11
June-11
-1
Sep-13E
17
25
26
Ma r-12
24
Dec-11
13
28
Se p-11
6
4
20
June-11
10
June-13
16
Mar-13
8
7
Dec-12
15
16
14
8
Expect USD PAT growth to be much higher than non-USD

T ota l Ni fty Com pa ni e s
Oth e rs
37
Mar-14E
16
13
Sep-12
16
$ D e n omi na te d
28
24
19
14
10
8
6
Dec-13E
T ota l Ni fty Comp a ni e s

Othe rs
26
June-12
Dec-13E
EBITDA growth in line with sales growth for USD & non-USD
17 .3 16 .8
1 5.4 1 5. 0 15 .3 15 .4 15 .0 16 .7 1 6.0 1 5.9 1 6. 2 16 .0
Mar-12
Dec-11
Sep-11
June-11
13
Sep-13E
10
12
8
6
3 2.8 32 .3
31 .5 32 .2 32 .3 30 .7 30 .9 30 .8 3 1.6 30 .6 3 1. 2 31 .5
16
June-13
Dec-12
$ D e n o m i n a te d
2 4.9 2 4.6 2 3.4 2 4. 0 23 .5 22 .9 22 .9 24 .0 2 3.5 2 2.6 2 3. 2 23 .4
19
Mar-13
20
Sep-12
June-12
Mar-12
June-11
20
Dec-11
25
Sep-11
30
T ota l N i fty Com pa ni e s

Othe rs
33
27
24
19 1 8
21
15
17
12
18
17
16
15
but no major impact on margins
Expect Sensex PAT growth of 5% YoY
Based on bottom-up estimates of its 30 constituent companies, Sensex 2QFY14

PAT is expected to grow 5% YoY.
This is a recovery of sorts from the -4% YoY recorded in 1QFY14. The growth is
expected to further improve in 2H to 11%. Still, for several quarters now, Sensex
PAT growth has remained below the LPA of 15%.
October 2013
A15
The top 5 PAT growth companies are expected to be: Tata Steel (loss to profit),
Maruti (+110% YoY), Dr Reddy's (+39%), Sun Pharma (+36%) and TCS (+30%).
The top 5 PAT de-growth companies are expected to be: BHEL (-57% YoY), Bharti
(-54%), State Bank (-35%), Tata Power (-34%) and Jindal Steel (-31%).
Expect 2QFY14 Sensex PAT growth of 5% YoY, 6th successive quarter below LPA of 15%
43
31 30
33 30
44
26
17 19
26 27
25 23
20
LPA: 15%
29
22
12 15
14
6
-7
11 11
2
-2
-25
-15
5
-4
-21
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
F Y07
F Y08
FY09
FY10
FY11
FY12
FY13
FY14E
Sensex Companies 2QFY14E Performance (INR b)

Company
Sep-13
Sales
Var % YoY
EBITDA
Sep-13 Var % YoY Sep-13
PAT
Var % YoY
PAT Contbn
(%) Delta Gr. (%)
High PAT Growth (8)

1,472
16
278
32
138
38
28
38
Tat a Steel
369
8
37
58
4
LP
1
8
Maruti Suzuki
101
21
10
90
5
110
1
3
Dr Reddy s Labs
34
21
8
24
5
39
1
1
Sun Pharma
35
42
14
38
10
36
2
3
TCS
208
33
65
47
46
30
9
11
HDFC Bank
45
20
33
27
20
28
4
4
Tata Mot or s
537
24
75
41
26
27
5
6
NTPC
145
-10
37
-13
22
17
5
3
Med/Low PAT Growth (10)
962
13
367
16
216
7
44
15
ITC
81
12
31
14
21
14
4
3
Infosys
127
29
36
24
27
12
5
3
Coal India
157
8
32
13
33
7
7
2
Hind. Unilever
68
8
11
12
9
7
2
1
Sesa Goa
197
14
71
17
24
7
5
2
Bajaj Auto
47
-5
10
6
8
6
2
0
ICICI Bank
39
15
35
10
21
6
4
1
ONGC
229
16
124
21
62
5
13
3
HDFC
16
17
17
7
12
5
2
1
Negative PAT Growth (12) 2,235
9
320
-4
136
-19
28
-32
Hero Motocorp
57
10
5
19
4
-1
1
0
Larsen & Toubr o
141
7
14
1
9
-5
2
0
Reliance Inds.
1,015
12
74
-4
53
-1
11
0
Cipla
27
31
6
7
4
-7
1
0
GAIL
132
16
15
10
9
-9
2
-1
Mahindra & Mahindra
84
-9
11
-18
8
-13
2
-1
Hindalco
225
14
24
9
8
-14
2
-1
Bharti Airtel
209
8
64
8
3
-54
1
-4
JSPL
49
5
14
-15
6
-31
1
-3
Tata Power
97
26
15
2
1
-34
0
-1
State Bank
117
6
65
-11
24
-35
5
-13
BHEL
82
-21
11
-43
5
-57
1
-7
Sensex (29)
4,668
12
964
12
490
5
100
21
Note: For Financials, Sales represents Net Interest Income, and EBITDA represents Operating Profit
October 2013
180
36
12
6
13
50
20
26
16
71
12
13
11
3
7
2
5
15
3
-151
0
-2
-2
-1
-4
-6
-6
-18
-13
-3
-60
-34
100
EBITDA margin
Sep-13 Var (bp)
19
10
10
23
40
31
73
14
25
38
38
28
21
16
36
21
91
54
105
14
10
10
7
23
12
12
11
31
30
16
56
13
21
226
314
349
63
-100
290
412
171
-75
101
80
-126
96
52
102
220
-391
207
-946
-204
71
-65
-122
-522
-59
-137
-44
19
-683
-374
-1124
-515
-1
A16
Intra-sector 2QFY14 earnings divergence (%)

Sectors
Sector
Growth (%)
High growth sectors

Technology
29
Health Care
Media
17
15
NBFC
14
Metals
14
Consumer
Banks - Private
Autos
13
12
11
Medium/Low growth sectors

Retail
9
Utilities
PAT degrowth sectors

Oil & Gas
-1
(Ex RMs)
Real Estate
-6
+30% Growth
15-30% growth
0-15% growth
-ve earnings
growth (%)
Tech Mahindra: 5 9%,

TCS: 30%
Infosys: 12%,
MphasiS: -3%
HCL Tech: 54%
Persistent Sys.: 9%
Ca dila: 7 5%, Dr Reddys:
Glenmark: 26%,
Sanofi India: 13%,
Cipla: -7%,
39%, Sun Pharma: 36%, Torrent Pharma: 15%,
Biocon: 7%
Ranbaxy Labs: -19%,
Divis Labs: 33%
Lupin: 15%
IPCA Labs.: -20%
PVR: 61%
DB Corp: 21%,
Zee Ent.: 14%,
HT Media: -41%,
Sun TV: 21%
Jagran Prak.: 9%
Dish TV: Loss
LIC Housing: 37%,
M&M Financial: 23%, HDFC: 5%, Shriram
IDFC: -10%
Bajaj Finance: 32%
REC.: 23%,PFC: 21%
Transport Fin: 4%
SAIL: 85%,
Hind. Zinc: 12%,
Hindalco: -14%,
Tat a Steel: LP
JSW Steel: 10%,
NMDC: -19%,
Sesa Goa: 7%
JSPL: -31%
United Spirits: 125%,
Godrej
ITC: 14%,Dabur: 13%,
Britannia: 69%,
Consumer: 18%,
Nestle: 12%, Asian
Radico Khaitan: 33%
Marico: 18%
Paints: 9%, HUL: 7%
HDFC Bank: 28%,
Axis Bank: 6%,
Federal Bank: -24%
Kotak Bank: 22%,
ICICI Bank : 6%,
IndusInd Bank: 20%,
Yes Bank: 3%
Maruti Suzuki: 110%,
Tata Motors: 2 7%,
Bajaj Auto: 6%
HeroM.: -1%, M&M:
Eicher Motors: 35%
Exide Inds.: 26%
-13%, AshokL: PL
Shopper s Stop: 64%,
Future Retail: 39%
JSW Energy: 55%
Oil India: -2%,

GAIL: -9%, RIL: -1%
Phoenix Mills: 10%,
DLF: -2%,
Unitech: 1%
Oberoi Realty: -21%
Teleco m
-7
Idea Cellular: 80%,
Reliance
Bharti
Bharti Infratel: 38%
Comm: 5%
Airtel: -54%
Cement
-31
SRCM: -64%, ACEM:
-38%, UTCEM: -28%,
ACC:-26%,Grasim:-1%
Capital Goods
-32
ABB: 69%
Crompton
Havells
L&T: -5%, Thermax:
Greaves: 24%
India: 7%
-20%, BHEL: -57%
Banks - PSU
-33
Bank of India: 69%
PNB: -22%, SBI: -35%,
BoB:-39%,UNBK:-47%
Earnings momentum: Represents number of companies in each of the growth brackets; PL: Profit to Loss; LP: Loss to
October 2013
Cairn India: 50%,

MRPL: LP
Prestige Estates: 62%
NTPC: 17%,
NHPC: 16%
Jub. Foodworks: 11%,

Titan Industries: 6%
Power Grid: 12%, Tata P ower: -34%,
Coal India: 7%,
PTC India: -46%
CESC: 4%
ONGC: 5%
Earnings
momentum
1
5 1
4 3
1 2
2 3 2
3 0
3
3 2
3 1
1 3
2 0
2 0
2 3 4
2 0
1
1 0
2 0
0
1 1
1
2 5
1 1
1 5
0
Profit
A17
FY14/15 ESTIMATES Earnings slowdown, downgrades persist

FY14/15 Sensex EPS cut 3%/4%; expect FY13-15 Sensex EPS CAGR of 11%
Aggr egate PAT to grow 6% in FY14; expect rebound in FY15 to 14%. FY13-15 Aggregate
PAT CAGR works out to 10%.
FY14 Sensex EPS is downgraded 3% (from Jun-13 estimates) to 1,289. SBI, Reliance, Coal
India, ICICI Bank and Hindalco are the major contributors.
FY15 Sensex EPS is downgraded 4% (from Jun-13 estimates) to 1,476. 5 companies ONGC, SBI, ICICI Bank, Coal India, and M&M - account for more than 100% of the downgrade.
FY13-15 Sensex EPS CAGR stands at 11% v/s 14% a quarter ago.
Aggregate PAT to grow 6% in FY14; expect rebound in FY15 to 14%

Based on bottom-up estimates, we expect MOSL Universe of 159 companies (ex RMs)
to report aggregate FY14 PAT growth of 6% YoY. Growth is dragged down by two major
factors First ever de-growth in Financials (-3%), a heavyweight sector accounting for 25%
of FY13 Aggregate PAT; and
6% growth in Oil & Gas (ex RMs), which has the second highest share of FY13
Aggregate PAT (18%).
Excluding Financials and Oil & Gas, FY14 PAT growth is a reasonable 11%. In FY15,
aggregate PAT growth is expected to rebound to 14%, largely led by a bounce back in
these very two sectors.
Expected FY14 PAT growth muted at 6%
led by F inancials' first ever PAT de-growth
MOSL ex RMs PAT growth (%)
Financials Sector PAT growth (%)

47
44
32
24
26
14
25
21
20
First ever PAT

de-growth for
the sector
18
15
15
14
11
6
6
-3
FY07
FY08 FY09
FY10
FY11
FY12
FY13 FY14E FY15E
FY07 FY08
FY09 FY10 FY11 FY12 FY13 FY14E FY15E
Expect FY13-15 Aggregate PAT CAGR of 10%

FY13-15 aggregate PAT CAGR works out to 10%. 50% of the FY13-15 PAT delta comes
from just 3 sectors - Technology, Oil & Gas and Financials. Besides these, FY15 numbers
are also contingent on (1) sustained high profit growth in Telecom (11% of FY13-15 PAT
delta), and (2) a sharp upswing in Auto (10% of FY13-15 PAT delta on the back of
expected 23% PAT growth in FY15).
October 2013
A18
FY14/15 Estima tes: Expect 10% PAT CAGR over FY13-15

Sales Gr./
EBIDTA
Margin
EBIDTA
PAT
PAT Gr. /
PAT
Sector
(No of Companies)
Sales
CAGR
EBIDTA Margin
Delta
CAGR (INR
CAGR
delta
(INR b)
(%)
(INR b)
(%)
(bp)
(%)
b)
(%)
FY13-15
FY13 FY14E FY15E FY13-15 FY13E FY13 FY14E FY15E (FY13-15) FY13 FY14E FY15E FY13-15 Sh. (%)
High PAT CAGR (>20%)

Telecom (4)
Media (8)
Health Care (13)
Real Estate (11)
Medium PAT CAGR (10-20%)
Technology (10)
Consumer (13)
Retail (3)
Auto (8)
Low PAT CAGR (up to 10%)
Excl. RMs (10)
Oil & Gas (13)
Cement (15)
Utilities (10)
Financials (31)
Private Banks (10)
PSU Banks (12)
NBFC (9)
Metals (9)
Capital Goods (8)
Others (6)
Sensex (30)
Nifty (50)
2,456
1,306
143
791
216
6,963
1,940
1,182
137
3,702
18,575
7,407
16,501
1,194
2,015
2,197
541
1,359
296
4,194
1,569
211
28,205
9,728
11,087
14
11
17
17
22
16
25
14
20
12
10
14
11
4
7
11
16
7
20
9
-1
10
12
12
11
12
9
14
15
14
14
12
15
18
14
7
2
0
14
14
16
18
15
16
7
3
11
9
8
8
13
10
16
16
18
15
18
15
19
13
8
8
5
9
10
13
17
11
18
8
1
10
10
10
10
708
397
41
193
77
1,226
489
242
14
480
4,678
1,122
1,356
242
605
1,735
452
997
286
787
188
37
6,649
1,930
2,285
50% of FY13-15 PAT delta c omes from just 3 sectors

- Technology, Oil & Gas, Financials
114
154
81
96
66
-5
-73
22
40
35
160
176
133
149
-1
80
48
92
43
-3
-77
56
105
101
104
17 211
16
45
18
19
17 112
20
36
18 785
18 383
16 168
19
9
17 226
11 2,526
11 643
11 715
10 110
12 383
12 904
17 278
8 432
17 193
10 351
-7 134
12
22
13 3,545
13 1,038
12 1,231
31
66
20
26
13
17
24
15
13
8
1
6
5
-7
5
-3
9
-19
15
8
-21
-1
6
7
6
35
70
25
19
32
17
13
18
19
23
11
13
16
26
11
15
17
13
15
0
0
19
14
15
14
33
68
23
22
22
17
18
16
16
15
6
9
10
8
8
6
13
-4
15
4
-11
9
10
11
10
21
11
1
7
2
37
20
8
0
10
41
16
20
2
8
14
10
-5
8
4
-4
1
100
NA
NA
FY14 sectorwise PAT share; FY15 share remains almost

the same
23
PAT delta (F Y13-15): % share

14
FY14 PAT Share (%)

18
12
2
11
10
6
2
Others
Telecom
Cement
Cap. Goods
11 10
85
193
20
-63
81
85
93
45
-43
55
-53
-88
-40
-117
66
-268
24
-491
-124
84
-96
-8
-12
6
1
Healthcare
20 16
28.8
30.4
28.7
24.4
35.7
17.6
25.2
20.5
10.1
13.0
25.2
15.2
8.2
20.2
30.0
79.0
83.5
73.4
96.4
18.8
12.0
17.6
23.6
19.8
20.6
Consumer
Auto
Metals
Utili ties
Technology
Oil ex RMs
Fi nancials
Cap. Goods
Retail
Cement
Real
Estate
Media
Consumer
Health
Care
Metal s
Utiliti es
Auto
Telecom
Fi nancial s
Oil ex RMs
Technology
-4
FY14/15 Sector earnings: Interesting observations
TELECOM: After four consecutive years of PAT decline, easing competitive pressure
should cause Telecom sector profits to rebound sharply in FY14 and FY15 with
growth rates of 66-70% per annum.
AUTO - TWO-WHEELERS: After negative growth in FY13 and likely muted growth
of 6% in FY14, two-wheeler PAT should see a bounce back in FY15 on the back of:
(1) Healthy monsoon reviving volume growth, especially in rural India,
(2) No royalty burden for Hero MotoCorp, and
(3) Full benefit of weak INR reflecting in Bajaj Auto's profits from exports.
October 2013
A19
CEMENT: Like Autos, even Cement would benefit from expected higher rural
demand in FY15 on the back of good monsoon led higher rural GDP growth. This
should help the sector reverse the muted PAT performance of the preceding years
i.e. 3% growth in FY13 and 7% de-growth in FY14.
HEALTHCARE v/s TECHNOLOGY: In FY14, both Healthcare and Technology sectors
are expected to clock similar healthy growth rates of 24-26%, on the back of weak
INR. Going forward, our numbers do not factor in further weakening of the INR.
Still, Healthcare PAT is expected to grow 19% in FY15 whereas Technology PAT is
expected to grow at a much lower 13%.
TELECOM: Expect sharp PAT recovery on easing competition
Telecom PAT (INR b)
157
Growth (%)
66
151
133
2-W: FY15 PAT to rise on higher volumes, no royalty for Hero

2-W PAT (B ajaj+Hero ) (INR b)
126
18
-4
55
56
52
46
40
90
25
19
74
67
Growth (%)
70
70
14
8
45
-25
-33
-40
FY08
FY09
FY10
FY11
FY12
FY13
-6
FY14E FY15E
CEMENT: Demand revival, pricing discipline to aid PAT rebound

Cement PAT (INR b )
103
108
Growth (%)
107
110
92
FY10
FY11
FY12
FY13
49
129
PAT growth (%)

Techno l ogy
Hea l thcare
27
81
FY15E
TECH v/s HEALTHCARE FY15 PAT: Healthcare to outgrow Tech
103
21
31
FY14E
18 19
26
17
19 18
FY11
FY12
20
24 26
19
13
17
3
-7
-10
-25
FY08
FY09
FY10
FY11
-7
FY12
FY13
FY14E FY15E
FY09
FY10
FY13
FY14E
FY15E
FY14 Sensex EPS cut 3% led by SBI

Over the last 3 months, Sensex EPS for FY14 has seen a downgrade of 3% from 1,327 to
1,289. More than half the downgrade is attributable to one single company, State
Bank of India. Reliance Industries, Coal India, ICICI Bank and Hindalco are the other
major contributors to the downgrade. The top 5 companies which are expected stem
the tide are all dollar plays - Wipro, Tata Motors/JLR, Infosys, TCS and Sun Pharma.
October 2013
A20
3% cut in FY14 Sensex EPS since June 2013

FY14 EPS (INR)
FY14 EPS Gro wth Yo Y (%)

16
16
14
14
14
11
8
1,431
1,387
1,395
1,389
1,368
1,327
1,289
Mar 12
Ju ne 12
SBI accounts for over half the INR37 cut in FY14 Sensex EPS
Bottom5ContributorstoFY14EPS(INR)
Se p 12
De c 12
Mar 13
6
6
Sep 13
Positive contributors to FY14 Sensex EPS are all dollar plays

7
To p 5 Co ntri buto rs to FY14 Se nse x EPS (INR )

5
5
June 13
4
5
4
2
19
SBI
Rel i a nce
Inds
Coa l Indi a ICICIBank
Hi ndal co
Hindalco, JSPL lead downgrades in FY14 despite weak INR
Wi pro
Tata
Motors
Infos ys
TCS
Su n
Pha rma
Companies with USD revenues see upgrades in FY14 EPS
Top 5 F Y14 EPS Downgrades (%)
Top 5 F Y14 EPS Up grad es (%)

14
14
12
11
7
-20
-19
Tata Po wer
Maruti
-24
-27
-31
Hi n dal co
JSPL
SBI
Tata
Motors
S un
Pharma
Ci pl a
Infos ys
Wi pro
FY15 Sensex EPS cut 4% led by 3 PSUs

Over the last 3 months, Sensex EPS for FY15 has seen a downgrade or 4% from 1,536 to
1,476. 5 companies - ONGC, SBI, ICICI Bank, Coal India, and M&M - account for more
than 100% of the downgrade. The dollar earners are likely to continue to their damage
control act even in FY15.
October 2013
A21
4% cut in FY15 Sensex EPS since June 2013

FY15EPS(INR)
FY15EPSGrowthYoY(%)
16
14
14
14
1,573
1,573
1,573
1,573
Dec12
Mar13
June13
Sep13
3 PSUs - ONGC, SBI, Coal India - lead FY15 Sensex EPS cut
Dollar plays remain positive contributors to FY15 Sensex EPS
Bottom5Contri butors toFY15EPS(INR)

9
Top5Contri butors toFY15EPS(INR)

8
7
6
5
8
4
23
ONGC
21
SBI
ICICI
Ba nk
Coa l
Indi a
Rel i ance
Inds
4 of the top 5 downgrades are common to both FY14, FY15
Infos ys
Wi pro
Ses a Goa
TCS
Sun
Pharma
Dollar plays continue their earnings upgrade into FY15 as well

Top5FY15EPSUpgrades (%)
Top5FY15EPSDowngrades (%)
19
19
16
11
8
18
22
26
21
26
Ta taPower Hi ndal co
SBI
JSPL
M&M
Sun
Pharma
Infos ys
Ses a Goa
Ci pla
Wipro
FY13-15 Sensex EPS CAGR at 11%

Post the FY14 and FY15 downgrades, Sensex EPS CAGR for FY13-15 stands lower at 11%
v/s 14% a quarter ago. Just five stocks in two sectors - Technology (TCS, Infosys, Wipro)
and Oil & Gas (ONGC, Reliance) - account for almost half the incremental PAT, FY15
over FY13.
October 2013
A22
FY08-13 EPS CAGR at 7%; expect rebound in FY13-15
FY15E
1,190
1,289
FY14E
F Y10
1,123
F Y13
834
F Y11
820
F Y09
F Y03
F Y07
F Y02
F Y06
F Y01
523
F Y05
236
F Y04
216
450
833
F Y08
1,024
718
348
1,476
F Y12
FY01-08:
21% CAGR
272
FY13-15E:
11% CAGR
FY08-13:
7% CAGR
FY01-13A: 15% CAGR

FY01-15E: 15% CAGR
Sensex Perfomance: Expect FY13-15 PAT CAGR of 11%
Company
High PAT Growth (6)
Tata St eel
Bharti Airtel
Sun Pharma
HDFC Bank
TCS
Hero MotoCorp
Medium PAT Growth (12)
Cipla
Dr Reddy s Labs
ITC
Tat a Motor s
Wipro
Infosys
HDFC
M&M
ONGC
Bajaj Auto
Maruti Suzuki
NTPC
Low PAT Growth (12)
ICICI Bank
Hind. Unilever
Reliance Inds.
Coal India
Sesa Goa
Larsen & Toubro
Hindalco
GAIL
State Bank
Tat a Power
JSPL
BHEL
Sensex (PAT free float)
October 2013
Sales
Sales
EBIDTA
EBITDA
PAT
PAT
PAT Contbn
(INR b)
CAGR
Margin (%)
CAGR
(INR b)
YoY (%)
CAGR to Delta
FY13 FY14 FY15 % FY13 FY14 FY15
% FY13 FY14 FY15 FY13 FY14 FY15
%
%
3,252
1,347
769
112
158
630
236
6,817
83
116
299
1,888
374
404
62
687
1,614
200
442
647
8,668
139
258
3,603
683
712
609
802
473
612
96
198
484
18,737
3,737
1,470
853
156
188
817
253
7,725
106
136
340
2,251
434
499
74
743
1,812
208
449
674
9,357
157
287
4,007
727
750
658
888
531
650
105
202
394
20,819
4,025 11 22.2
1,473
5 9.1
921
9 30.2
180 26 43.0
229 20 72.3
931 22 28.7
293 11
9.5
8,711 13 22.9
122 21 26.5
151 14 21.3
390 14 35.5
2,588 17 14.1
474 13 20.8
552 17 28.6
85 18 108.7
825 10 13.3
1,976 11 33.4
238
9 18.2
508
7 9.6
801 11 26.5
9,796
6 19.7
182 14 95.2
327 12 15.5
3,879
4 8.5
773
6 26.5
841
9 35.1
738 10 10.5
995 11 10.0
610 14 13.3
748 11 67.3
115 10 21.2
274 18 33.2
315 -19 19.4
22,533 10 21.3
24.5 25.7
11.1 11.1
31.9 33.6
42.2 41.2
75.6 78.9
30.2 28.8
10.6 13.1
22.7 23.4
23.3 22.4
21.1 22.0
36.6 36.4
14.9 14.7
22.6 22.1
27.5 27.8
105.7 105.8
12.2 12.9
32.2 35.6
20.1 20.3
10.2 11.0
24.3 23.9
18.7 19.9
94.4 93.5
15.8 15.7
7.6
8.7
28.3 28.1
37.3 34.7
10.2 10.0
10.5 11.5
11.8 11.5
59.7 63.2
23.0 21.7
29.9 29.8
16.9 12.8
21.2 22.3
20 283 394 478

15
2
33
31
15
23
30
55
24
31
45
51
26
67
86 106
22 139 178 204
31
21
22
31
14 845 927 1,103
11
13
16
18
16
15
18
21
16
74
85 100
20 103 116 138
16
72
86
94
15
94 107 123
16
48
56
63
8
36
41
48
14 242 247 314
15
30
34
39
15
24
24
31
6
92
98 114
7 1,020 949 1,017
13
83
87
97
13
33
35
38
5 210 216 236
10 177 187 198
8 106 103 106
7
49
40
48
19
32
29
31
6
40
37
37
7 179 141 162
11
9
7
8
11
35
26
30
-34
66
41
25
12 1,038 1,111 1,272
6
39
-92 2,042
-47
33
31
46
30
28
31
28
-11
4
4
10
11
28
22
19
20
15
-18
12
15
19
13
13
18
15
19
12
-7
2
-2
11
44
-1
15
7
7
-7
29
4
28
7
5
3
9
6
4
-3
3 -18
-4 -11
10
-9
17 -21
-48 -22
-14 -27
-5 -37
6
7
21
-4
81
14
24
15
38
19
12
19
16
19
10
16
14
16
27
16
28
17
7
12
8
9
6
3
17
7
0
15
13
18
-40
15
30
353
55
29
26
21
20
14
19
19
16
16
14
14
14
14
14
14
12
11
0
8
7
6
6
0
-2
-2
-5
-5
-6
-7
-38
11
44
7
7
5
9
14
2
57
1
1
6
8
5
6
3
2
16
2
1
5
-1
3
1
6
5
0
0
0
-1
-4
0
-1
-9
100
A23
FY14/15 company earnings: Key observations
INFOSYS v/s TCS: Our estimates suggest that in FY15 PAT growth of Infosys and TCS
should converge to 15-16%. However, TCS trades at over 30% premium valuation
compared to Infosys.
BHARTI AIRTEL: Bharti is poised to reverse three successive years of PAT de-growth
in FY14 and FY15.
HERO MOTOCORP: Expect 38% jump in FY15 earnings on the back of (1) higher
rural volumes, and (2) no burden of royalty to Honda, Japan.
TATA MOTORS: Expect reversal of FY13 PAT decline in the next two years led by (1)
strong performance by JLR overseas, and (2) recovery in domestic vehicle demand.
Trades at single digit P/E.
ONGC: If the expected oil sector reforms come through, ONGC's subsidy sharing
burden should significantly ease in FY15 and drive PAT growth.
HINDUSTAN UNILEVER: Expect single-digit PAT growth in each of the two years
FY14 and FY15. Yet, the stock continues to enjoy rich valuation (35x FY15E EPS).
INFY V/S TCS: PAT growth to converge, but TCS at premium

PAT Growth (%)
Infy
TCS
BHARTI: Poised to reverse 3 years of PAT de-growth
TCS V al n. Prem. (%)

25
PAT (INR B)
PE (x)
49
34
33
43
9
-2
-9
30
23
-20
24
22
14
13
30 3
4 34
11 26
22 23
13 31
13 28
16 15
67
85
90
60
43
23
FY09
FY10
FY11
FY12
FY13
FY14E
FY15E
FY08
F Y09
F Y10
FY11
FY12
F Y13
HERO MOTO: Higher volumes, zero royalty t o fuel FY15 PAT

PAT (INR B)
17
17
16
PAT(INRB)
13
21
13
22
20
24
21
FY08
FY09
FY10
FY11
FY12
FY13
22
31
FY14E FY15E
ONGC: Profit recovery contingent on oil sector reforms

PAT (INR B )
12
12
10
210
260
242
FY08
F Y09
F Y10
FY11
FY12
F Y13
October 2013
FY08
FY09
247
FY10
FY11
FY12
FY13
314
21
F Y14E FY15E
17
FY08
PE (x)
35
FY14E FY15E
38
35
35
38
30
30
29
7
194
9
15
PAT (INR B)
10
198
116
HIND. UNILEVER: Rich valuations but single-digit PAT growth
11
207
91
103
21
PE (x)
138
126
29
12P/E
10
FY14E F Y15E
PE(x)
19
15
14
55
TATA MOTOR S: Expect to rec over from FY13 PAT de-growth
PE (x)
17
30
25
25
21
21
FY09
FY10
FY11
26
FY12
33
FY13
FY14E FY15E
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Falling imports and export uptick resulted in reduced trade deficit for the last three months
Aug-13
Mar-13
Oct-12
May-12
Dec-11
Jul-11
Feb-11
Sep-10
Apr-10
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Apr-10
Trade bal a nce

Trend (Tra de b al ance)
Expo rts
Tre nd (Exports)
Trend (Impo rts)
S ep-10
Imports
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Oi l Imports
Tre nd (Oi l i mports )
8
Jul-13
Apr-13
Jan-13
Jul-12
Oct-12
Apr-12
Jan-12
Oct-11
Apr-11
Jul-13
Apr-13
Jan-13
Oct-12
Apr-11
Jul-13
Apr-13
Oct-12
Jan-13
Jul-12
Apr-12
Oct-11
Jan-12
Apr-11
Jul-11
21
20
18
Jul-12
2
0
Apr-12
Jan-12
12
24
23
Jul-11
Oct-11
15
Jul-11
18
No n-oi l -non -gol d

Trend
(Non-oi
Tren(No
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mports )
Gol d
Tre nd (Gol d i mp orts)
FY14 CAD to correct sharply to 2.9% of GDP
Trade in services on the other hand have seen higher surplus by USD1.6b per
month during YTDFY14 so far compared with no growth during YTDFY13.
This was entirely due to a pick up in services exports while imports remained
static.
While data would be available with a lag, reports suggest a pick up in remittances
as well.
All these factors together can reduce India's current account deficit (CAD) to only
USD51b from USD88b in FY14. This implies that vis--vis USD22b of CAD in 1QFY14
the CAD in the remaining quarters would come down dramatically below USD10b.
As a percentage of GDP this means a sharp correction of CAD to only 2.9% in FY14
from 4.8% in FY13.
A seasonal pick up in gold imports, higher oil prices and uncertainties of INR
adversely affecting exporters are the risk factors to this scenario.
Services surplus is higher than YTD levels by USD1b a month

Services surplus
FY12
FY13
FY14
7
5
4
2
0
Apr
October 2013
Ma y
Ju n
Jul
Aug
Sep
Oct
Nov
Dec
Ja n
Feb
Mar
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Elections The game-changing juggernaut

Forthcoming State elections may well be a gauge of the national mood
X State elections - gauge of national mood: During Nov-Dec'13, assembly elections
will be held in 5 states of Rajasthan, Madhya Pradesh, Chattisgarh, Delhi and
Mizoram aggregating 73 of 543 Lok Sabha seats (13% of total seats). The assembly
elections assume significance because the results could be a referendum for the
General elections highlighting the national mood.
Y Decoding the election trends: Our analysis of elections led us to some interesting
findings and perspectives:
A. Seat share can be disproportionate to vote share: The data on seats won
percentage to vote share percentage suggests that parties have won less seats
in a particular year despite its vote share remaining the same. This suggests
that the margin of victory is slender in many seats (more than 35% seats were
won with less than 5% margin victory in 2009 general elections).
B. Higher voter turnout an indicator of a change in government?: The past 10
general election trends suggest that a voter turnout of 60% or above has
resulted in a change in government (barring 1984 which Congress won due to
sympathy wave on assassination of former Prime Minister, Ms. Indira Gandhi).
Z What could be the odds of an NDA government: Based on the opinion polls and
predictions, odds favor anti-incumbency. We analyse possible scenario which
could drive an NDA government. Association with allies and their performance
remains a key monitor to watch.
[ Markets - build-up pre-elections; sharp reactions post elections: Markets sees

some build-up prior to the elections. However, it witnesses sharp reactions post
the election results. Normally, a decisive voting in favour of a party is positively
perceived by the markets, whereas a fractured government witnesses negative
reactions.
#1 State elections gauge of national mood
The second innings of UPA has been marred by corruption scandals, decadal low
growth, inflation, currency depreciation, etc hurting investor confidence and
creating uncertainty in the mind of the corporates.
With Lok Sabha elections due in the next 7 months, assembly elections during this
interim period are keenly awaited since they may act as a referendum to the
general elections to suggest the political mood of the nation.
There are 5 state elections before the General elections in April-May 2014
Rajasthan, Madhya Pradesh, Chattisgarh, Delhi and Mizoram. These states comprise
13% of the Lok Sabha seats (73 out of 543 seats).
The state elections are important, since in 4 of these states (except Mizoram),
Congress and BJP are the only two dominant parties. Thus, the outcome of these
assembly elections will likely reflect the national mood.
October 2013
A35
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AP (8%): Congress vote share ranged from 39-43%,

however, seat share moved from 12%-79%
Congres s
17
19
Tel uguDes a m
19
12
MP (5%): Congress seat share has consistently remained

lower than vote share before catching up in 2009
BJP
Others
7
14
25
0
28
36
Co ngre ss
0
14
10
33
79
69
43
34
25
69
47
39
16
40
86
73
42
18
41
44
40
Others
48
55
43
Votes
pol l ed %
(2004)
Sea ts
won %
(2009)
Vo tes
p ol l ed %
(2009)
12
Sea ts
won%
(1999)
Votes
pol l ed%
(1999)
Sea ts
won%
(2004)
Votes
pol l ed%
(2004)
Sea ts
won%
(2009)
Votes
pol l ed%
(2009)
Bihar (7%): Winners' vote share is always lower than

seat share indicating fractured mandate
B JP
R ash tri ya Jana ta Dal
Jan ata Da l (Uni ted )

Othe rs
32
55
31
50
23
15
13
22
15
30
24
14
Votes
pol l e d %
(1999)
Sea ts
won %
(2004)
Vo tes
p ol l ed %
(2004)
Se ats
wo n %
(2009)
Votes
pol l ed %
(2009)
28
18
33
28
21
43
Seats
won %
(1999)
Vote s
po l l ed %
(1999)
Seats
won %
(2004)
Rajasthan (5%): Congress vote share ranged from 41-47%

however, seat share swung from 16% in 2004 to 80% in 2009
10
10
11
13
Sea ts
won %
(1999)
BJP
0
36
43
Congress
0
10
16
45
41
Oth ers
4
80
19
16
47
84
64
47
49
37
16
Seats
won %
(1999)
Votes
s hare %
(1999)
Se ats
wo n %
(2004)
Votes
sh are %
(2004)
Seats
won %
(2009)
Vote s
s hare %
(2009)
Note: Brackets indicates state seats weightage in total Lok Sabha seats
Margin of victory: Our above thesis that parties win seats based on slender margin
is elucidated through the exhibit below. We observe that barring 2004, 36% of the
seats are won with victory margins of less than 5%. The chart below indicates the
decisive voting in 2004, wherein almost half of the seats were won with victory
margins of more than 10%.
More than one-third seats won with less than 5% margin
Les s tha norequa l to5%
Moretha n5%butl es s tha norequal to10%
39
40
25
24
49
Moretha n10%
37
27
23
October 2013
36
36
28
36
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2004
2009
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Telecom EV/EBITDA valuations a t 22% discount to historic

averages despite significant run
Tel e co m S ector EV/EB DITA (x)
Cement EV/EBITDA valuations slip below historical averages

Cement EV/EBDITA (x)
10 Yr Avg (x)
17.0
13.0
14.0
10.5
11.0
8.0
10 Yr Avg (x)
7.6
8.7
7.1
5.5
10 Yr Avg (x)
PSU B ank s P/B (x)
3.8
1.8
2.5
1.3
0.8
1.2
0.8
0.6
Nov12
Jan12
Mar11
May10
Jul09
Sep08
Nov07
Jan07
Mar06
May05
Jul04
Sep13
Nov12
Jan12
Mar11
May10
Jul09
Sep08
Nov07
Jan07
Mar06
May05
Jul04
Sep03
Healthcare valuations attractive at historical averages

30
Sep03
0.3
0.0
Heal thcareP/E(x)
Sep13
Nov12
Jan12
10 Yr Avg (x)
Sep13
2.3
1.8
Mar11
May10
Jul09
Sep08
Nov07
Jan07
Mar06
PSU Banks at historic lows of 0.6x P/B
5.0
1.3
May05
S ep13
Nov12
Jan12
Mar11
May10
Jul09
S ep08
Nov07
Jan07
Mar06
May05
Jul04
S ep03
Metals at 63% discount to market PB and less than 1x PB

Me tal s P/B (x)
3.0
Jul04
6.8
5.0
Sep03
8.0
Technology close t o historical average; still up side left
10YrAvg(x)
Technol ogyP/E(x)
27
10YrAvg(x)
22
26
22.3
22
21.9
16.9
17
16.0
12
18
Sep13
Nov12
Jan12
Mar11
May10
Jul09
Sep08
Nov07
Jan07
Mar06
May05
Jul04
Sep13
Nov12
Jan12
Mar11
May10
Jul09
Sep08
Nov07
Jan07
Mar06
May05
Jul04
Sep03
Sep03
14
Presenting sensitivity on top ideas
October 2013
We present our views on few top ideas, where underlying business is seeing an
improvement in fundamentals.
Several of these stocks are likely earning upgrade candidates, and are also trading
at attractive valuations. Our Model Portfolio has a positive bias towards these
names.
A48
Infosys: Revival in progress

What went wrong?
Revenue growth declined over FY11-13 (from 25.7% in FY11 to 5.8% in FY13) due
to focus on high end work at the expense of traditional, scale business.
Margins fell from 32.6% in FY11 to 28.6% in FY13 (despite currency depreciating
by 20%) led by lower growth and utilization (78.2% in FY11 to 70.7% in FY13)
Inflexibility in pricing and resistance to new deal structuring
What's changing?
Management structure change - Return of Mr N R Narayana Murthy

Focus back on growing traditional business amidst improved sentiment among
US clients
Proactively exercising levers of utilization, onsite costs and pyramid to revive
margins
What will this result in?
Revenue: FY13-15 USD revenue CAGR to 11.6% (closer to industry) as deal signings
improve (USD1.6b in 3 quarters)
Margins: 170bp expansion in operating margin from bottom (1QFY14-26.5%), led
by: [1] leverage from growth, [2] exercising cost efficiencies [3] favorable currency.
Valuations: Results in 22% upside at 17x FY15E.
Margin escalator: Current margins to our estimate to optimistic scenario in FY15
EPS estimates at various scenarios
Based on optimistic scenario

1.8%
ImpliedEPS
@15% rev
gr. & 34%
ma rgins
33.0%
1.0%
2.0%
0.2%
0.6%
1.1%
2.0%
ImpliedEPS
@12% rev
gr. & 34%
ma rgins
28.2%
FY15
aspired exit
margin
Onsite eff.
redn by 10%
Pyramid
adjustment
by 10pp
Util incr to
78%80%
F Y15 exit
margin(%)
Wage hikes
& INR depn.
Onsite
efforts redn
by 1% to29%
Op. lev from

growth
Util: +5.3pp
to 74.8%
1QFY14
EBITDA %
26.5%
Our FY15
EPS@12%
rev gr.
P/E - LHS (x)
USD re v Gr
44%
35%
12%
3%
216
YoY gr - R HS (USD rev)
26
35%
237
Valuation multiples will move higher with high margins

and better growth
Lowest EBITDA margins with low growth

EBITDA %
245
26%
16%
Low margin
21
Avg PE =
18.5
16
Avg Gr = 11.5 20%
10%
Avg Gr=12.7
0%
11
Avg PE = 14.1
High margin
FY06
FY07
FY08
FY09
FY10
FY11
FY12
FY13
-10%
6
Sep-13
29%
Dec-12
32%
Mar-12
33%
Jun-11
35%
Sep-10
33%
Dec-09
31%
Mar-09
32%
Jun-08
32%
October 2013
30%
6%
A49
ICICI Bank: Measured growth with focus on RoE enhancement

What went wrong?
Significant tightening by RBI led to concerns over growth, asset quality (especially
corporate sector) and earnings (higher pressure on margins and fees)
Lack of resolution for the structural issues faced by infrastructure sector, especially
power. Post consolidation phase, ICICIBC grew its domestic corporate portfolio
at a CAGR 52% over FY10/12, led by power (CAGR 45% over FY10/12).
What's changing?
Rapid branch network expansion will keep share of granular retail liabilities high
in the balance sheet ensuring stability to margins.
Recent efforts to resove issues in infrastructure segment should ease some of
the concerns raised.
Subsidiaries are now self-sufficient and can provide capital support to banking
business. With the healthy return ratios and capital from subsidiaries ICICIBC is
sufficiently capitalized till FY16.
Confidence on core earnings parameters (like margins, granularity of fees, ability

to manage asset quality shocks if any) remains high.
Return ratio to remain superior with Core ROA of 1.5%+. RoE will largely be a
function of growth opportunities in the system.
Improvement in subsidiaries profitability to ensure consolidated PAT growth
higher than standalone PAT growth. Management is targeting RoE of 18% over
the next few years. Thus, there will be dilution free growth for 2-3 years.
Strong capitalization increasing leverage to boost RoE (%)
R oE
1.7
9.6
1.2
October 2013
FY07
1,707
1,419
16.0 18.8
26.3
FY10
12.5
FY09
12.7
1,262
755
0.8
FY08
614
Sep-13
Jul-12
May-11
Mar-10
Jan-09
Nov-07
Sep-06
0.4
1.1
FY06
1.3
1.4
3.2
FY14E
FY13
1.6
1.2
3.1
29.6 29.8 29.3
3,350
FY12
1.5
1.8
3.0
0.9
30.7 30.8
FY14E
SA ra ti o (%)
B ranches
1.8
1.9
2.7
0.8
Branch expansion to benefit - retail deposit and loan opportunities
RoA (RHS, %)
2.7
2.7
FY13
FY11
2.5
3,100
FY10
2.5
FY13
FY09
Avg(x)
3.4
2.2
FY12
FY08
P/B (x)
2.0
2,752
FY07
Sustainability of return ratios to lead to re-rating of multiples
2.0
FY12
12.8
FY11
12.7
2,529
13.2
0.4
0.5
FY11
14.4
FY10
11.8
1.0
FY09
11.8
FY07
7.4
FY06
9.2
FY06
0.7
0.8
FY08
9.1
2.2
12.8
FY15E
11.5
9.9
Credi t Cost
3,600
13.4
12.1
NIM
14.8
FY15E
Ti er I
NIM at decadal high and credit cost contained (%)
A50
Please refer to our detailed

report in June 2013
Bharti: Structural changes in industry to drive profitability

What went wrong?
RPM declined from 53 paisa in FY10 to 42 paisa in FY13

EBITDA margin declined from 40% in FY10 to 30% in FY13, with African business
performance continuing to disappoint
Cash outlay of INR123b for 3G spectrum; data penetration also disappointed
INR depreciation led to a cumulative reported forex loss of INR 12b from FY11-13
What's changing?
Improving pricing discipline and profitability focus across operators (4% RPM
increase in 1QFY14). Africa business performance also expected to stabilize
Decreasing competitive intensity from challengers due to regulatory/balance
sheet/cash flow issues
Accommodative regulatory stance leading to correction in spectrum reserve prices
(cut by 37% / 62% for 1800 MHz/900 MHz). Increased policy visibility to spur M&A.
Revenue: CAGR of 9% over FY13-16 led by traffic CAGR of 7% and RPM CAGR of 4%
Margins: 336 bp improvement in EBITDA margins from FY13-15 led by RPM
improvement
Valuations: Results in 37% upside based on 9x FY15E EV/EBITDA for India, 6x
FY15E EV/EBITDA for Africa business, 15% disc to market value for stake in Bharti
Infratel and INR188b (INR49/share) for potential spectrum liability
YoY Mobile RPM decline and India EBITDA margin (%)
Earnings per share (INR)
Mob i l e RPM growth (%)

Indi a & SA EB ITDA margi n (%)
22
24
18
38
37
40
42
41
40
37
36
-1
16
14
33
11
35
-3
21
37
11
37
6
Bharti: EV/EBITDA band chart

Peak of 14.5x
13
Median of 8.8x
10
6.4
Bottom of 6.2x
Aug-13
Dec-12
Apr-12
Aug-11
Dec-10
Apr-10
Aug-09
Dec-08
Apr-08
Aug-07
Dec-06
Apr-06
October 2013
FY16E
FY15E
FY14E
F Y13
F Y12
F Y11
F Y10
F Y09
F Y08
F Y07
F Y06
Bharti: Earnings sensitivity to RPM
16
F Y05
F Y16E
F Y15E
F Y14E
FY13
FY12
FY11
-17 -17
FY10
-17
FY09
-21
FY06
FY05
-24
FY07
-18
FY08
-17
FY14E
FY15E
Wireless traffic (b minutes)

1,032
Wireless RPM (p)
44.4
Consolidated Revenue (INR b)
853
Consolidated EBITDA (INR b)
272
Con solidated PAT (INR b)
30
Incremental revenue for 1p higher RPM (INR b) 10.3
Incremental EBITDA for 1p higher RPM (INR b)
7.2
Potential EBITDA upgrade for 1p higher RPM
2.7%
Incr emental PAT for 1p RPM increase (INR b)
5.3
Potential PAT upgrade for 1p higher RPM
17%
1,100
46.2
921
309
55
11.0
7.7
2.5%
5.4
10%
A51

report in October 2013
BPCL: Transition from a downstream to integrated player

What went wrong?
Benefits of reforms in Jan 2013 (diesel price hikes, shift to cash subsidy in LPG/
Kerosene and limiting LPG cylinders) were scuttled by INR depreciation.
Relook at the refinery transfer pricing added to uncertainties in refining
profitability.
What's changing?
Diesel price hikes had brought some demand growth moderation in sale volumes
and is positive in short term from under recoveries perspective.
Despite skepticism, government has stuck to its monthly diesel price hikes.
Benchmark deals in BPCL's Mozambique imply at least 30% higher valuation than
our base case
Expect positive reserve announcement from the SEAL basin drilling in Brazil and
FID at Mozambique.
Diesel reforms to reduce under recoveries by 40% to INR960b by FY15 over FY13.
FID in Mozambique could significantly reduce the execution risk for the block.
SEAL basin (Brazil) reserve announcement would increase TP by INR50/sh
Silver lining led by E&P successes, valuing conservatively at USD1.8b (invested USD1.1b), at 30% discount to benchmark
Country
Successes
Mozambique
13
Brazil
Reserves announced by company
Comments
35-65 tcf
We v alue the block at USD3.5/boe, a ssuming

recoverable reserves of 45 tcf, and start of prodn from 2019
We value the block at USD10/boe, assuming recoverable
reserves of 200mmbbl, and start of prodn from 2018
150-200mmbbl (includes only

Wahoo discov ery, reser ves not
decared yet for SEAL discoveries)
Refining capacity set to increase by 1.6x.

Mu mba i
Kochi
B i na
NRL
39.5
3.0
9.0
30.5
3.0
6.0
9.5
.deregulated era could increase marketing profitability

To tal (mmt)
47.5
F Y15 EPS
9.0
41.9
12.0
15.5
15.5
12.0
14.0
2015E
2017E
34.8
1.2
Curre nt
Expect overall under recovery to reduce 40% by FY15 (INR b)

Ups tream
Govern men t
OMC's
1,385
Investment & E&P val ue

500
10 1,378
1,033
780
400
960
Barquentine
Discovery
Wahoo
Discovery
303
310
200
100
F Y10
F Y11
552
600
700
650
FY12
FY13
FY14E
F Y15E
B PCL stock pri ce

Golfinho
Discovery
Diesel
Reforms
Orca
300
410
260
145
October 2013
678
67
461
56
329
(9)
F Y09
829
1,000
1.5
2
2.5
Marketing margin on auto fuels (INR/ltr)
BPCL investment value on the rise led by E&P upsides
Total
1,610
713
53.7
Our base
case
9.0
65.6
Discovery
Petrol Deregulation
Lagosta
Discovery
0
Mar-09
Feb -10
Fe b-11
Fe b-12
Fe b-13 Mar-14E
A52

report in September 2013
Hindalco: At an inflexion point

What went wrong?
Lured by natural resources like coal and bauxite, nearly USD6b has been invested
in projects in India.
Delay in start-up coal mines due to regulatory hurdles led to ballooning of debt
and CWIP.
Execution of project has also been slower.
What's changing?
Mahan coal block cleared the major hurdle of MoEF clearance. Cabinet committee
on investment looking to expedite projects, which may benefit coal blocks for
Mahan and Aditya smelter.
Cost pressures have eased due to cooling of input prices.
INR/USD depreciation has come as a relief to rising operating costs in last 4-5
years.
Margins of Indian smelting business will expand due to easing of cost pressure
and favourable exchange rate.
Utkal Alumina has already started production resulting in additional cash flows.
Peaking of CapEx cycle will drive equity value.
EPS sensitivity
Depreciation of INR/USD exchange rate by INR1 results in 7% upside in FY15 EPS.

USD100/ton improvement in aluminum prices results in 15% upside in FY15 EPS.
FCF turning positive as HNDL exit capex cycle (INR b)
Free Cas h fl ows
125
119
26
10
-17
-49
106
88
24
85
20
42
40
-89
FY17
FY16
FY15
FY14
FY13
FY12
FY11
FY10
FY09
FY08
FY07
34
Equi ty val u e (RHS)
8.0
Ratio (x)
240
197
152 165
4.0
160
6.0
2.0
3.2
4.2
4.1
5.2
4.1
2.3 2.7
3.2
80
2.3
0.0
October 2013
FY17
FY16
FY15
FY14
FY13
FY12
FY11
FY10
FY09
FY08
INR/share
287 320
6.0
46
54
55
69
69
40
43
83
107
49
62
76
93
112
134
30
FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17
SOTP Valuation (INR b)
Deleveraging to lead to equity value accretion

Net Deb t /EBITDA
149
125
B efore wo rki ng capi ta l
114
97
50
27 43
7
16
28
After work i ng ca pi tal
Cap Ex
79
29
Operating cashflows are poised for rapid growth (INR b)
EBITDA
EV/EBTIDAx
Target EV
Net Debt
EQ = (EV-ne t Debt)
A. INR/share(EQ)
CWIP
B. INR/share (CWIP)
C. discount factor (%)
D. Investments (quoted)
E. INR/share (investments)
F.discount f actor (%)
TP (A+B*(1-C%)+E*(1-F%))
FY14E
93
5.5
514
483
31
15
279
135
12
48
23
20
152
FY15E
115
5.5
632
473
159
77
162
79
12
48
23
20
165
FY16E
134
5.5
738
435
303
147
75
36
12
48
23
20
197
FY17E
162
5.5
891
367
525
254
34
17
12
48
23
20
287
A53
Hero MotoCorp: Defending its turf

What went wrong?
Economic slowdown coupled with poor monsoon impacted FY13/1HFY14 growth

for the 2W industry with 3%/1% growth (v/s decadal average of 12% growth).
Increasing competitive pressures, with HMSI on expansion spree (product portfolio,
distribution and capacity), taking away large part of incremental volumes.
No new product launches since Nov-12, during which HMSI had 5 launches.
Margin erosion of 740bp to trough in FY13 of 9.5% and no EPS growth.
What's changing?
Product life cycle turning favorable, with 7-8 product actions lined-up from start
of festive season to 1HFY14 (product upgrades/refreshes in 2HFY14 and new
product launch in 1HFY15).
Entry in multiple new export markets can improve overall growth by ~3%. We are
estimating export volumes of ~0.23m units in FY14 v/s mgmt guidance of 0.35m units.
Royalty would stop from Jun-14, resulting in annual savings of ~INR8b or ~320bp
at EBITDA level.
Cost cutting initiatives to result in net 2-3pp improvement in margins starting
from 3QFY14, with full benefit reflecting in FY16.
Significant margin recovery led by savings on a) royalty of 3.2pp from 2QFY15 and
b) cost cutting initiatives. We are modeling in for margin improvement of 4.3pp
over FY13-16E to 13.8%.
Very attractive EPS growth of 27% CAGR over FY14-16E, based on our estimates
and over 32% based on mgmts targeted cost savings.
Levers to profitability
EBITDA Margins to improve meaningfully from FY15
Base Case
FY14E
FY15E
FY16E
Volume Growth (%)

5.0
13.4
Adj EBITDA Margins (%)
10.6
13.1
EPS (INR)
110.4
152.8
TP (@ 16x)
2,444
Cost cutting initiatives: Base case 100bp savings in FY16
Adj EBITDA Margins (%)
10.6
14.6
EPS (INR)
110.4
169.0
EPS Upgrades (%)
10.6
TP (@ 16x PE)
2,704
13.4
13.8
179.2
2,866
18.1
14.5
16.1
207.0
15.5
3,312
13.0
16.2
15
16.9
11.8
11.0
FY10
F Y11
F Y12
-3
FY13
Cas h (INR /s h)
110
13.1
Vol Gr (%)
13
13
10.6
13.1
13.8
FY14E
FY15E
F Y16E
Dividends to increase with rise in surplus cash
Impl i ed PE (x)
17.7 18.1
14.2
17
9.5
EPS to grow at 27% CAGR, after 4 years of muted EPS

EPS
EBITDA Ma rgi ns (%)
24
DPS (INR /s h)
105
11.2
60
65
70
75
45
48
64
112
101
119
FY08
FY09
FY10
FY11
FY12 FY13 FY14E FY15E FY16E
October 2013
106
110
153
179
289
153
117
175
190
235
306
FY10
FY11
FY12
FY13
FY14E
FY15E
FY16E
A54
ACC: Synergy benefits to drive profitability

What went wrong?
Weak demand-supply hurts sector utilization to 73% (-11pp since FY10), & pricing
power.
Severe cost escalations in RM, power and freight cost (11% CAGR in cost/ton over
CY10-12)
Recent pricing weakness adds further pressure.
Volume growth tapered to 1.6% YoY in CY12 and negative 1.8% YoY in 1HCY13
EBITDA margin contracted 2.4pp over CY10-12 to 17.7% (est. 14.6% in CY13E).
What's changing?
ACEM's acquiring 50.01% stake in ACC would unleash ~INR4.5b p.a of synergy
benefits over 2 years.
It also offers regional pricing power and volume synergies due to consolidation.
Gradual cost savings up to INR160-170/ton due to synergy benefits over next 2-3
years
EPS accretion of 4%/9% in CY14/15 (assuming 20%/50% of synergies to percolate)
INR5/bag of better pricing would translate into 12.6% EPS accretion.
EPS sensitivity
1% Change in pricing/volume would change CY14E EPS by 5.4%/1%

Synergy benefit to aid 5-9% accretion in CY13-14 EPS
INR10/bag of better pricing over synergies to aid ~35% accretion in CY14-15 EPS.
Industry's actual utilization much higher than reported
Re ported Uti l (%)
EPS expected to grow strongly (INR)
Actu al Uti l (%)
EPS
Ro E (%)
FY08
FY12
Max
Avg
83
FY14E
85
52
60
69
FY16E
CY08
CY09
CY10
CY11
CY12
Mi n
217
130
93
70
30
Jul-01
Apr-02
Jan-03
S ep-03
Jun-04
F eb-05
Nov-05
Jul-06
Apr-07
Dec-07
S ep-08
May-09
F eb-10
Nov-10
Jul-11
Apr-12
Dec-12
S ep-13
10
October 2013
13.1
14.0
56
66
16.8
84
CY13E CY14E CY15E
Levers to profitability
250
190
17.7
58
Trading at significant discount to replacement cos t

EV/ton (USD)
16.9
80
80
66
69
71
70
75
86
FY10
67
82
85
89
91
83
FY06
90
95
78
92
86
76
FY04
16.2
70
FY02
84
78
82
75
77
83
87
91
30.0
26.0
Base Case
CY13E CY14E CY15E
EBITDA/ton (INR) with synergy *
656
764
935
Change in EBITDA/ton (INR)
35
82
EPS with synergy (INR)
69
93
EPS accretion (%)
5
10
Fair value (INR/Sh)
1,313
1,484
Pricing power: Base case +INR10/bag price in CY14/CY15/CY16
Price higher by INR5/bag v/s est
EBITDA/ton (INR)
656
864
1,035
EPS with synergy & higher realn (INR)
79
103
EPS accretion (%)
20
22
Fair value (INR/Sh)
1,446
1,616
A55
MOSL model
portfolio
October 2013
Sector / Portfolio Picks
BSE-100
Financials
Private
ICICI Bank
HDFC Bank
Axis Bank
NBFCs
HDFC
LIC Housing
IDFC
PSU
SBI
BOB
Energy
Reliance Inds.
ONGC
BPCL
In formation Technology
Infosys
TCS
Tech Mahindra
Healthcare
Dr Reddy's
Lupin
Divi's Lab
Consumer / Retail
ITC
Marico
United Spirits
Automobiles
Tat a Motor s
Bajaj Auto
Hero Motocorp
Infrastructure & Related sectors
Larsen & Toubro
ACC
Telec om
Bharti Airtel
Idea Cellular
Metals
NMDC
Hindalco
Utilities
NTPC
Others
Oberoi Realty
Yes Bank
Just Dial
Eicher Motors
Bata
Shree Cement
Prestige Estates
SUN TV
Cash
Total
23.6
13.2
4.4
4.9
1.4
6.8
5.1
0.2
0.5
3.7
1.9
0.4
11.2
6.3
2.5
0.4
15.0
6.4
4.9
0.9
6.2
1.3
0.9
0.3
16.5
8.2
0.0
1.1
7.8
2.7
1.2
0.9
7.4
2.8
0.5
2.7
1.7
0.6
3.3
0.4
0.6
4.6
1.3
1.7
0.0
0.3
0.0
0.0
0.0
0.0
0.0
0.0
0.0
100.0
MOSL Wt
24.0
12
5
4
3
8
4
2
2
4
2
2
13.0
5
5
3
13.0
7
3
3
8.0
3
3
2
8.0
4
2
2
7.0
3
2
2
7.0
4
3
5.0
3
2
4.0
2
2
3.0
3
8.0
1
1
1
1
1
1
1
1
0.0
100.0
Wt relative to BSE-100
0.4
-1.2
0.6
-0.9
1.6
1.2
-1.1
1.8
1.5
0.3
0.1
1.6
1.8
-0.3
1.5
2.6
-2.0
0.6
-1.9
2.1
1.8
1.7
2.1
1.7
-8.5
-4.2
2.0
0.9
-0.8
0.3
0.8
1.1
-1.4
1.2
1.5
2.3
1.3
1.4
0.7
1.6
1.4
-1.6
1.7
7.3
1.0
0.7
1.0
1.0
1.0
1.0
1.0
1.0
0.00
Sector Stance
Neutral
Neutral
Buy
Neutral
Buy
Overweight
Buy
Buy
Buy
Neutral
Buy
Buy
Overweight
Neutral
Buy
Buy
Neutral
Buy
Neutral
Buy
Overweight
Buy
Buy
Buy
Underweight
Neutral
Buy
Buy
Neutral
Buy
Buy
Buy
Neutral
Buy
Buy
Overweight
Buy
Buy
Neutral
Buy
Buy
Underweight
Buy
Overweight
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Buy
A56
September 2013 Results Preview
MOSL Universe:
2QFY14 Highlights
&
Ready Reckoner
Note: In our quarterly performance tables, our four-quarter numbers may not always add up to the full-year
numbers. This is because of differences in classification of account heads in the companys quarterly and
annual results or because of differences in the way we classify account heads as opposed to the company.
All stock prices and indices as on 27 September 2013, unless otherwise stated.
October 2013
MOSL Universe
MOSL Universe: 2QFY14 aggregate performance highlights (Ex RMs)

Quarter-wise sales growth (% YoY)
Quarter-wise net profit growth (% YoY)
13%
9%
12%
9%
3%
3%
4%
-2%
Dec-12
Mar-13
June-13
Dec-12
Sep-13E
Ma r-13
June-13
Sep-13E
Sectoral sales growth - quarter ended September 2013 (%)

24.3
14.6
14.4
12.2
12.1
12.0
11.5
11.3
8.6
5.2
Real
Estate
Metals
Telecom
Utilities
6.9
5.6
4.9
4.9
Cement
Financials
10.3
Consumer
MOSL Ex.
RMs
Auto
Oil Ex. RMs
Media
Health
Care
Technology
-0.7
-1.3
-4.8
Cap Goods
16.7
Retail
31.2
-20.2
-22.4
Sectoral EBITDA growth - quarter ended September 2013 (%)

38.9
26.1
19.9
18.6
17.7
15.2
11.1
Cap Goods
-7.3
-31.1
-32.0
Cap Goods
Retail
-7.0
Cement
Utilities
-5.9
Cement
Financials
Oil Ex. RMs
Real
Estate
MOSL Ex.
RMs
Telecom
Consumer
Metals
Media
Health
Care
Technology
Auto
-3.3
Sectoral net profit growth - quarter ended September 2013 (%)
13.4
13.0
11.5
8.6
8.4
3.0
October 2013
Oil Ex. RMs
MOSL Ex.
RMs
Utilities
Retail
Auto
Metals
Consumer
Media
Health
Care
Technology
-1.3
Financials
15.1
Telecom
17.2
Real
Estate
28.5
B2
October 2013
MRPL
-57
-55
-43
-43
BHEL
Ambuja
Cements
Anant Raj
Inds
Shree
Cement
Oberoi Realty
BHEL
Future Retail
-47
-46
-10
41
-41
-44
Shree Cement
Thermax
NTPC
Ashok Leyland
Siemens
-10
Canara
Bank
Anant Raj
Inds
MCX
-20
Anant Raj Inds
MCX
-48
-23
PTC India
-75
-47
PTC India
-76
-47
Birla
Corporation
-77
Ashok
Leyland
Cipla
Bajaj
Finance
Tech
Mahindra
31
-25
-21
-27
Union Bank
-59
Birla
Corporation
-70
-67
-64
BHEL
69
Indian Bank
Top 10 by net profit growth (%)

-79
Siemens
Top 10 by EBITDA growth (%)
Shree
Cement
69
43
Tata Motors
44
32
MCX
69
32
KPIT Tech.
47
Tech
Mahindra
TCS
IndusInd
Bank
MphasiS
Top 10 by sales growth (%)
India
Cements
75
TCS
HCL
Technologies
48
33
Shopper's
Stop
80
34
Britannia
85
Tata Steel
60
35
ABB
90
36
Idea
Cellular
Cadila
Health
Bank of
India
65
ABB
Prestige
Estates
Sun
Pharma
Petronet
LNG
Jaypee
Infratech
38
SAIL
Prestige
Estates
90
Britannia
Maruti Suzuki
42
KPIT Tech.
United
Spirits
Maruti
Suzuki
MOSL Universe
Corporate Scoreboard (quarter ended September 2013)

Worst 10 by sales growth (%)
83
-17
-10
Worst 10 by EBITDA growth (%)
83
58
-35
Worst 10 by net profit growth (%)
125
110
64
-41
Source: MOSL
B3
MOSL Universe
Annual performance - MOSL universe

Sales
EBITDA
FY13 FY14E FY15E Chg.# Chg.@ FY13 FY14E FY15E Chg.# Chg.@ FY13
(%)
(%)
(%)
(%)
Auto (8)
3,702 4,152
4,753 13.0 12.2
480
561
659
13.0 16.9
226
Capital Goods (8) 1,569 1,547
1,598
5.0
-1.4
188
170
163
-6.9
-9.3
134
Cement (15)
1,194 1,237
1,410 11.9
3.7
242
236
290
8.6
-2.3
110
Consumer (13)
1,182 1,346
1,553 16.5 13.8
242
282
329
18.3 16.3
168
Financials (31)
2,197 2,436
2,826 13.5 10.9 1,735 1,858 2,178
12.3
7.1
904
Private Banks (10) 541
626
739 24.4 15.7
452
524
622
25.2 16.1
278
PSU Banks (12) 1,359 1,454
1,675
7.4
6.9
997
995 1,162
4.1
-0.2
432
NBFC (9)
296
355
412 26.6 20.0
286
338
394
26.0 18.4
193
Health Care (13)
791
927
1,065 24.3 17.2
193
221
264
26.0 14.2
112
Media (8)
143
168
191 12.6 17.3
41
48
57
8.7 18.1
19
Metals (9)
4,194 4,582
4,893
2.1
9.3
787
898
958
-3.0 14.2
351
Oil & Gas (13)
16,501 18,241 18,256 13.2 10.5 1,356 1,426 1,671
-6.3
5.2
715
Excl. RMs (10)
7,407 8,436
8,618 12.2 13.9 1,122 1,204 1,382
-5.3
7.3
643
Real Estate (11)
216
263
299 -4.6 21.6
77
96
111 -11.7 24.4
36
Retail (3)
137
166
196 16.9 20.4
14
16
20
18.8 15.2
9
Technology (10)
1,940 2,418
2,697 27.7 24.6
489
632
685
26.5 29.2
383
Telecom (4)
1,306 1,444
1,574
8.2 10.5
397
467
533
2.3 17.6
45
Utilities (10)
2,015 2,163
2,457
7.5
7.3
605
663
753
17.4
9.7
383
Others (6)
211
232
258 16.4 10.1
37
41
47
8.5
9.6
22
MOSL (162)
37,300 41321 44025 11.8 10.8 6,883 7615 8718
6.3 10.6 3,617
Excl.RMs (159)
28,205 31517 34388 11.1 11.7 6,649 7393 8429
7.1 11.2 3,545
Sensex (30)
9,728 10,870 11,774 13.3 11.7 1,930 2,163 2,462
10.9 12.1 1,038
Nifty (50)
11,087 12,340 13,346
9.1 11.3 2,285 2,544 2,891
10.0 11.3 1,231
# Growth FY13 over FY12; @ Growth FY14 over FY13;
For Banks : Sales = Net Interest Income, EBITDA = Operating Profits; Note: Sensex & Nifty Numbers
(INR Billion)
Net Profit
FY14E FY15E Chg.# Chg.@
(%)
(%)
244
300
-6.7
7.9
107
107
-7.5 -20.6
103
129
3.4
-6.8
193
227 21.1 14.9
877 1,009 14.8
-3.0
304
357 26.8
9.5
351
396
4.1 -18.9
222
255 26.6 14.8
140
166 20.1 25.5
23
29 11.4 20.2
381
380
-8.6
8.4
753
871
-9.4
5.3
680
769
-1.6
5.8
40
53 -24.0 12.8
10
12 16.1 12.5
473
535 27.1 23.6
74
126 -33.3 65.6
403
446
8.8
5.2
22
26
7.7
-0.6
3843 4417
3.4
6.2
3770 4315
5.4
6.4
1,111 1,272
9.9
7.0
1,311 1,494 14.4
6.5
are Free Float.
Valuations - MOSL universe

Sector
(No. of companies)
FY13
Auto (8)
14.4
Capital Goods (8)
12.7
Cement (15)
14.5
Consumer (13)
39.7
Financials (31)
9.0
Private Banks (10)
14.5
PSU Banks (12)
4.6
NBFC (9)
11.2
Health Care (13)
30.5
Media (8)
28.8
Metals (9)
8.0
Oil & Gas (13)
10.3
Excl. RMs (10)
10.2
Real Estate (11)
14.7
Retail (3)
34.6
Technology (10)
20.9
Telecom (4)
55.4
Utilities (10)
11.5
Others (6)
14.4
MOSL (162)
14.3
14.3
Sensex (30)
16.6
Nifty (50)
15.8
N.M. - Not Meaningful.
October 2013
P/E
(x)
FY14E FY15E
13.3
10.8
16.0
16.0
15.6
12.4
34.5
29.4
9.3
8.1
13.2
11.2
5.7
5.0
9.7
8.4
24.3
20.5
24.0
19.1
7.3
7.4
9.8
8.5
9.7
8.6
13.0
9.9
30.8
25.8
16.9
14.9
33.5
19.7
10.9
9.9
14.5
12.2
13.4
11.7
13.5
11.8
15.3
13.4
14.5
12.7
EV/EBITDA
(x)
FY13 FY14E FY15E
7.0
5.7
4.7
8.3
9.3
9.0
8.8
8.0
6.4
27.1
23.0
19.5
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
17.4
15.4
12.6
13.7
11.4
9.4
5.8
5.5
5.1
6.2
5.8
4.8
5.5
5.2
4.4
13.1
10.3
8.6
21.6
19.3
15.7
15.3
11.6
10.3
9.1
7.7
6.3
8.6
8.0
7.2
9.5
8.5
7.3
N.M
N.M
N.M
N.M
N.M
N.M
N.M
N.M
N.M
N.M
N.M
N.M
FY13
3.5
2.3
1.9
13.0
1.5
2.5
0.7
2.2
5.9
4.9
0.9
1.4
1.5
0.6
10.2
5.7
2.2
1.8
3.0
2.2
2.3
2.7
2.5
P/BV
(x)
FY14E FY15E
2.9
2.4
2.1
1.8
1.7
1.6
11.5
10.0
1.3
1.2
2.1
1.9
0.6
0.6
1.9
1.7
5.1
4.3
4.4
3.9
0.9
0.8
1.3
1.2
1.3
1.2
0.6
0.6
8.2
6.6
4.7
3.8
2.0
1.7
1.7
1.6
2.7
2.5
2.0
1.8
2.0
1.8
2.4
2.2
2.3
2.0
FY13
24.2
17.7
12.9
32.8
16.5
17.2
14.9
20.1
19.3
17.1
11.9
13.4
14.6
4.2
29.3
27.5
4.0
16.0
21.2
15.5
15.8
16.6
16.0
RoE
Div.
PAT
(%)
yld (%) CAGR
FY14E FY15E FY13 FY13-15
21.8
22.2
1.4
15.3
12.8
12.0
1.8 -10.8
10.9
12.4
1.3
8.3
33.2
34.2
1.4
16.3
14.0
14.4
2.6
5.7
16.0
16.5
1.5
13.4
10.8
11.2
4.7
-4.3
19.6
19.6
2.6
14.9
21.1
20.6
0.6
22.1
18.4
20.3
1.4
22.7
12.1
11.1
2.8
4.0
12.8
13.4
2.6
10.4
13.9
14.1
2.5
9.4
4.5
5.6
1.5
22.0
26.5
25.4
0.7
15.8
27.9
25.9
1.3
18.3
6.1
9.5
0.5
67.7
15.2
15.5
3.8
7.9
18.8
19.7
2.2
8.6
14.7
15.1
1.9
10.5
14.9
15.3
1.9
10.3
15.8
16.1
1.6
10.7
15.6
15.8
1.6
10.1
Source: MOSL
B4
MOSL Universe
Ready reckoner: quarterly performance

(INR Million)
Automobiles
Ashok Leyland
Bajaj Auto
Eicher Motors
Exide Inds.
Hero Motocorp
Mahindra & Mahindra
Maruti Suzuki
Tata Motors
Sector Aggregate
CMP
(INR)
27.09.13
Rating
Sep.13
Sales
Var.
% YoY
Sep.13
EBITDA
Var.
% YoY
Var.
% QoQ
Sep.13
15.7
769
-3.8
9,734
-5.7
1,452
1.6
2,394
-7.3
5,494
-13.0 10,523
-1.8
9,667
14.7 75,120
6.1 115,153
-77.0
6.4
30.4
27.2
18.9
-17.8
90.1
40.8
26.1
230.4
7.4
-12.6
-8.7
-19.3
-24.9
-17.1
20.8
6.4
-822
7,851
891
1,514
4,367
8,470
4,775
26,436
53,483
PL
6.0
35.0
26.0
-0.9
-13.4
109.9
27.0
11.5
Loss
6.4
-3.4
-4.5
-20.4
-6.9
-24.4
44.2
12.0
Var.
% QoQ
Net Profit
Var.
% YoY
Var.
% QoQ
15
1,992
3,539
132
2,048
844
1,368
340
Neutral
Buy
Buy
Neutral
Buy
Buy
Buy
Buy
27,348
47,252
15,746
16,514
56,782
84,430
100,528
536,575
885,176
-17.0
-5.0
6.2
8.9
10.2
-8.7
21.0
23.6
14.4
551
144
89
409
633
817
480
590
Neutral
Neutral
Buy
Buy
Neutral
Buy
Neutral
Buy
18,719
82,437
34,078
9,850
10,250
141,358
25,436
10,715
332,844
3.5
-20.7
16.5
-9.4
6.3
7.1
-24.6
-10.1
-4.8
7.5
29.8
7.9
-6.1
-2.5
12.6
-3.7
24.2
13.2
1,062
10,810
1,496
1,523
1,221
14,136
206
1,066
31,520
60.0
-43.1
0.4
-23.8
2.5
0.6
-79.3
-12.4
-22.4
-3.5
178.2
3.3
-13.2
-13.4
19.8
-84.0
31.0
34.1
361
5,496
679
1,293
846
8,687
-149
726
17,938
68.9
-56.9
24.4
-19.8
7.3
-5.1
PL
-20.3
-32.0
-10.6
18.1
12.9
-22.2
-17.8
4.5
Loss
44.5
7.5
Cement
ACC
Ambuja Cements
Birla Corporation
Grasim Industries
India Cements
Shree Cement
Ultratech Cement
Sector Aggregate
1,101
184
207
2,678
51
37
4,004
1,826
Buy
Neutral
Buy
Buy
Neutral
Buy
Buy
Buy
24,719
19,904
6,754
12,779
11,406
33,377
11,898
44,866
165,702
1.7
-8.0
7.6
-4.2
1.6
11.9
-10.1
-4.5
-0.7
-11.6
-15.1
-12.5
11.2
-7.9
0.7
-17.5
-9.5
-8.0
3,088
3,239
579
2,445
1,866
8,112
2,538
8,180
30,048
-26.7
-42.9
-47.4
-15.6
-9.0
5.2
-35.4
-18.6
-20.2
-28.8
-34.2
-13.3
20.8
-2.3
3.4
-33.1
-22.0
-16.5
1,840
2,099
365
3,791
149
804
830
3,934
13,811
-26.0
-37.7
-54.5
-1.0
-69.7
-37.2
-63.7
-28.5
-31.1
-29.0
-35.3
-20.7
67.6
-11.5
287.7
-70.8
-41.5
-25.3
Consumer
Asian Paints
Britannia
Colgate
Dabur
Godrej Consumer
GSK Consumer
Hind. Unilever
ITC
Marico
Nestle
Pidilite Inds.
Radico Khaitan
United Spirits
Sector Aggregate
471
775
1,233
170
832
4,238
621
349
220
5,097
253
128
2,621
Neutral
Buy
Neutral
Buy
Neutral
Neutral
Sell
Neutral
Buy
Neutral
Neutral
Buy
Buy
29,863
15,852
8,859
17,083
19,303
9,709
68,157
80,938
12,779
24,057
9,358
3,333
24,428
323,717
14.2
13.0
14.5
12.2
21.0
17.3
8.0
12.0
10.6
13.7
14.0
12.2
10.0
12.1
6.0
12.9
4.9
3.5
12.2
13.8
0.1
9.2
-7.4
8.7
-7.8
-6.7
11.4
5.6
4,241
1,110
1,893
3,024
2,896
1,689
10,905
30,756
1,687
5,052
1,684
573
3,053
68,563
17.4
83.0
7.7
14.3
18.7
20.3
11.6
14.4
14.2
13.9
14.8
16.7
20.6
15.2
-4.0
-5.0
14.5
28.4
31.2
42.4
0.5
10.2
-25.7
5.9
-24.8
-6.1
9.8
6.4
2,604
768
1,465
2,293
1,881
1,443
8,628
20,900
1,013
2,944
1,184
293
884
46,300
8.9
68.5
1.0
13.4
18.1
12.3
7.1
13.8
18.0
11.9
5.9
32.6
125.2
13.4
-5.4
-10.9
12.9
23.3
44.2
20.3
-2.5
10.5
-34.8
8.5
-23.4
-4.4
-25.2
4.4
Capital Goods
ABB
BHEL
Crompton Greaves
Cummins India
Havells India
Larsen & Toubro
Siemens
Thermax
Sector Aggregate
PULL OUT
October 2013
B5
MOSL Universe

(INR Million)
CMP
(INR)
27.09.13
Healthcare
Biocon
Cadila Health
Cipla
Divis Labs
Dr Reddy s Labs
Glenmark Pharma
GSK Pharma
IPCA Labs.
Lupin
Ranbaxy Labs
Sanofi India
Sun Pharma
Torrent Pharma
Sector Aggregate
Rating
Sep.13
Sales
Var.
% YoY
Var.
% QoQ
Sep.13
EBITDA
Var.
% YoY
Var.
% QoQ
Sep.13
Net Profit
Var.
% YoY
Var.
% QoQ
334
693
433
984
2,411
523
2,414
695
853
334
2,558
590
439
Neutral
Buy
Neutral
Buy
Buy
Buy
Buy
Buy
Buy
Neutral
Neutral
Buy
Buy
7,338
17,326
27,040
5,494
33,615
15,192
7,054
9,097
27,042
29,909
4,380
34,561
9,424
227,471
23.9
11.9
31.5
16.2
20.8
24.5
5.5
17.9
22.1
26.5
10.4
41.6
21.3
24.3
5.6
5.8
9.7
6.5
20.5
22.7
10.8
12.9
17.2
11.5
6.8
5.2
1.3
11.5
1,534
2,973
6,245
2,109
7,732
3,000
1,546
2,097
5,124
3,027
716
13,740
1,810
51,653
31.6
28.9
7.2
14.2
24.2
27.0
-22.3
17.3
17.3
4.1
-11.0
38.2
16.5
19.9
4.9
4.0
-7.5
7.6
54.4
21.3
36.0
22.6
12.7
15.3
15.0
0.0
-3.7
10.4
959
1,665
4,103
1,566
4,859
1,800
1,308
1,003
3,168
1,663
581
10,476
1,235
34,387
7.1
75.1
-6.6
32.7
39.3
26.4
-20.1
-19.8
15.0
-19.1
13.3
35.6
15.1
17.2
2.6
-14.9
-13.6
-10.4
48.4
39.9
37.6
39.8
-4.9
27.8
13.5
-6.8
-4.3
3.3
Media
D B Corp
Dish TV
HT Media
Jagran Prakashan
PVR
Sun TV
Zee Entertainment
Sector Aggregate
252
50
87
82
470
401
238
Buy
Buy
Neutral
Buy
Buy
Buy
Neutral
4,334
5,908
5,154
4,095
3,556
5,026
10,551
38,624
14.5
10.7
0.9
27.1
99.6
16.0
10.6
16.7
-3.6
2.1
-4.7
-0.9
6.1
-16.5
8.4
-0.8
1,058
1,515
445
911
693
3,805
2,907
11,334
23.0
-2.7
-21.2
16.5
114.4
15.6
33.5
18.6
-20.3
24.5
-42.8
-10.6
16.8
7.6
-0.3
-0.5
590
-198
196
529
262
1,828
2,145
5,351
21.4
Loss
-41.1
8.7
60.9
20.5
14.3
15.1
-22.5
Loss
-58.7
-8.5
58.5
11.2
-4.5
-3.9
Metals
Hindalco
Hindustan Zinc
JSPL
JSW Steel
Nalco
NMDC
SAIL
Sesa Sterlite
Tata Steel
Sector Aggregate
114
131
237
732
32
126
51
183
288
Buy
Buy
Neutral
Sell
Buy
Buy
Sell
Buy
Sell
225,222
34,041
48,919
104,363
15,184
25,103
124,425
196,875
369,030
1,143,162
13.7
18.8
5.1
17.6
-5.6
-3.9
15.0
13.6
8.1
11.3
14.0 24,017
14.1 16,796
7.7 14,486
11.5 19,414
-2.7
2,334
-12.6 15,200
21.2 15,427
38.7 71,339
12.5 36,553
16.2 215,566
9.2
16.4
-14.6
27.3
LP
-21.4
39.1
16.9
58.2
17.7
29.0
11.7
-3.8
11.0
52.6
-20.2
59.5
22.2
-0.9
12.4
8,155
17,318
6,213
5,605
1,692
13,556
9,257
24,182
3,646
89,623
-13.5
12.5
-30.8
9.6
3439.9
-19.2
85.3
6.8
LP
13.0
91.8
8.8
-10.5
19.9
6.0
-13.8
75.7
1.2
-67.5
0.2
851
311
402
21
143
486
Buy
Neutral
Buy
Buy
Buy
Buy
-16.0
-12.4
-44.5
6.8
-6.5
-11.7
-6.9
18.4
17.0
-76.0
-4.4
31.7
-2.1
7.9
-37.1
-25.4
-69.0
8.6
-6.0
-5.1
-14.3
370
1,017
270
795
1,432
159
4,044
15.5
18.7
-66.8
3.0
19.6
-11.5
-2.4
-40.2
-24.0
-55.0
58.0
-32.6
-9.8
-24.6
Others
Bata India
Castrol India
MCX
Sintex Inds.
United Phosphorous
V-Guard Inds
Sector Aggregate
PL: Profit to Loss; LP: Loss
4,809
7,527
682
12,047
22,952
3,605
51,621
13.5
4.3
-48.0
0.5
23.7
15.0
11.2
604
1,422
196
1,748
4,294
294
8,557
to Profit
PULL OUT
October 2013
B6
MOSL Universe

(INR Million)
Oil & Gas

BPCL
Cairn India
GAIL
HPCL
IOC
Indraprastha Gas
MRPL
Oil India
ONGC
Petronet LNG
Reliance Inds.
Sector Aggregate
Excl. RMs
Real Estate
Anant Raj Inds
DLF
Jaypee Infratech
Mahindra Lifespace
Oberoi Realty
Phoenix Mills
Prestige Estates
Unitech
Sector Aggregate
CMP
(INR)
27.09.13
Sep.13
Sales
Var.
% YoY
329
318
326
52
190
211
276
33
454
275
123
840
Buy
628,031
Buy
50,949
Neutral
131,709
Neutral
2,810
Buy
596,881
Buy
1,215,928
Neutral
10,041
Neutral
188,626
Buy
25,526
Buy
229,313
Buy
104,000
Neutral 1,014,562
4,198,376
1,757,536
10.5
14.7
15.9
2.9
23.2
14.9
17.5
15.7
6.3
15.9
37.8
12.3
15.2
14.6
42
132
16
406
166
237
123
16
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Buy
1,009
20,537
9,590
868
1,980
746
4,419
6,230
45,378
-26.5
0.7
36.1
3.6
-23.2
12.2
83.0
15.4
11.5
26.1
-11.3
24.7
29.6
-9.3
6.8
-11.3
8.8
-1.1
424
7,722
4,446
139
1,150
492
1,193
885
16,450
-40.9
3.5
24.0
-7.7
-23.1
12.3
64.6
8.1
6.9
45.6
-15.7
32.6
49.2
-13.9
3.7
-7.4
17.6
-1.7
UR
Sell
Neutral
Neutral
24,365
4,345
6,868
26,174
61,752
-20.4
27.0
18.5
15.0
-1.3
8.0
9.6
27.9
-15.8
-1.9
2,071
717
364
2,670
5,822
-21.8
22.2
25.2
7.0
-3.3
Buy
Neutral
Buy
Neutral
Neutral
Sell
Buy
Neutral
Buy
Buy
79,037
6,194
127,385
7,087
7,613
17,656
4,155
207,982
46,535
109,044
503,645
29.8
22.0
29.2
24.9
27.7
35.2
27.1
33.1
32.1
NA
31.2
13.8 19,690
15.4
1,492
13.1 35,502
15.6
1,355
17.5
1,612
14.7
3,538
16.3
931
15.6 65,151
13.4 10,886
12.1 22,273
14.5 140,157
Buy
Neutral
Buy
Neutral
209,143
26,670
63,353
53,458
352,624
7.8
4.4
19.2
2.8
8.6
3.2 64,406
1.7 10,338
-3.1 19,175
-1.2 16,735
1.2 110,654
Retail
Future Retail
71
Jubilant Foodworks
1,173
Shopper's Stop
356
Titan Industries
235
Sector Aggregate
UR = Under Review
Technology
HCL Technologies
1,071
Hexaware Tech.
129
Infosys
3,006
KPIT Tech.
131
Mindtree
1,186
MphasiS
428
Persistent Systems
619
TCS
1,947
Tech Mahindra
1,306
Wipro
475
Sector Aggregate (ex Wipro)
Telecom
Bharti Airtel
Bharti Infratel
Idea Cellular
Reliance Comm
Sector Aggregate
October 2013
325
159
172
151
Rating
Sep.13
EBITDA
Var.
% YoY
7.0 12,470
25.4 39,607
2.5 15,223
-5.1
2,538
15.3 13,266
10.3 30,304
11.4
1,821
23.6
2,902
28.9 11,633
19.3 123,784
23.2
3,894
15.8 74,174
13.1 331,616
16.6 275,575
-70.3
14.8
10.3
0.7
-41.0
-66.6
-11.6
-74.9
1.4
20.5
-24.9
-3.7
-20.3
5.6
Var.
% QoQ
Var.
% QoQ
Sep.13
Net Profit
Var.
% YoY
37.7
3,743
31.6 34,775
4.0
8,931
-5.7
1,268
LP
4,443
LP 18,020
-5.4
807
72.5
-2,185
66.9
9,339
47.4 62,053
-2.1
1,988
4.8 53,395
61.8 196,577
27.2 170,372
Var.
% QoQ
-92.6
49.8
-9.4
-4.5
-80.9
-81.3
-18.7
PL
-2.2
5.2
-36.8
-0.7
-42.6
-1.3
149.0
11.2
10.5
0.4
LP
LP
-7.6
Loss
53.3
54.5
-11.8
-0.2
107.1
22.6
296
1,362
1,656
235
986
362
739
711
6,349
-41.1
-1.7
-8.5
-25.1
-20.7
9.7
61.8
0.7
-5.9
52.4
-24.8
104.4
49.3
-3.1
-13.4
-14.7
13.1
7.5
8.9
7.5
55.9
9.0
10.9
41
359
105
1,905
2,409
39.1
10.9
63.6
5.7
8.6
LP
5.5
351.5
4.4
15.7
48.2
35.9
23.6
43.4
22.2
31.1
4.6
46.7
43.8
NA
38.9
21.9
17.2
19.0
39.4
35.4
26.4
19.8
26.4
25.9
26.2
23.9
13,333
1,167
26,558
771
1,077
2,022
489
45,803
6,699
18,435
97,918
54.3
38.9
12.1
89.6
49.2
-3.4
9.4
30.4
58.6
NA
28.5
11.3
19.2
11.9
28.2
-20.5
5.0
-14.4
20.7
2.6
13.6
14.3
8.5
7.9
34.8
2.2
11.1
-1.6
-2.0
-8.7
-1.6
-3.0
3,350
3,428
4,309
1,383
12,470
-53.5
38.4
79.6
4.6
-7.0
-51.4
-4.1
-11.7
6.1
-25.1
B7
MOSL Universe

(INR Million)
CMP
(INR)
27.09.13
Utilities
CESC
Coal India
Jaiprakash Power
JSW Energy
NHPC
NTPC
Power Grid Corp.
PTC India
Tata Power
Sector Aggregate
PL: Profit to Loss; LP: Loss
336
307
16
46
20
148
99
46
393
82
Rating
Sep.13
14,675
156,744
10,134
21,963
18,312
144,566
37,413
31,146
35,018
96,643
566,615
to Profit; UR = Under Review
CMP
(INR)
27.09.13
Financials
Private Banks
Axis Bank
1,031
Federal Bank
298
HDFC Bank
610
ICICI Bank
923
IndusInd Bank
377
ING Vysya Bank
510
Kotak Mahindra Bank
682
Yes Bank
305
Pvt Bkg.Sector Aggregate
PSU Banks
Bank of Baroda
501
Bank of India
163
Canara Bank
225
Indian Bank
70
Oriental Bank
150
478
State Bank
1,642
Union Bank
115
PSU Bkg. Sector Aggregate
NBFC
Bajaj Finance
1,177
HDFC
783
IDFC
89
LIC Housing Fin
192
M & M Financial
257
Power Finance Corp
133
Rural Electric. Corp.
195
Shriram Transport Fin.
574
NBFC Bkg. Sector Aggregate
Financials Sector Aggregate
Buy
Neutral
Buy
Neutral
Neutral
Buy
Buy
Buy
Buy
Neutral
Rating
Sales
Var.
% YoY
9.2
7.6
11.9
5.8
3.3
-10.3
21.2
11.5
0.0
25.5
5.2
Sep.13
EBITDA
Var.
% YoY
Var.
% QoQ
Sep.13
Net Profit
Var.
% YoY
Var.
% QoQ
2.2
3,265
-4.8 32,285
28.9
8,591
-9.7
8,028
13.1 12,512
-7.4 36,803
2.0 32,479
12.4
300
6.8
4,425
3.5 15,330
-1.3 154,017
5.0
12.8
5.9
39.2
4.0
-12.9
21.7
-47.3
-2.4
1.6
4.9
1.7
-18.4
46.0
-13.0
16.9
-13.7
2.6
-11.8
0.6
-25.8
-8.5
1,411
33,050
3,325
2,510
8,455
22,167
11,327
242
3,137
1,369
86,992
3.8
7.4
-9.2
55.4
16.3
17.5
12.5
-45.7
-24.3
-33.6
8.4
7.7
-11.5
182.1
-38.9
18.1
-4.7
-1.2
-17.3
-16.2
26.6
-4.4
Net Profit
Sep.13
Var.
% YoY
Var.
% QoQ
Var.
% QoQ
Net Interest Income

Sep.13
Var.
Var.
% YoY % QoQ
Operating Profit
Sep.13
Var.
Var.
% YoY % QoQ
Buy
Buy
Neutral
Buy
Buy
Buy
Neutral
Buy
27,802
5,013
44,851
38,736
6,823
4,567
9,178
6,524
143,494
19.5
-0.9
20.2
14.9
33.9
23.8
21.1
24.5
18.6
-3.0 23,782
-1.6
3,348
1.5 32,753
1.4 35,178
0.4
5,494
7.4
3,052
0.1
6,044
-1.0
5,889
0.4 115,540
9.2
-4.3
27.4
10.2
30.9
34.1
25.3
21.5
16.6
-16.4
-16.4
-0.9
-7.8
-14.4
-6.6
-22.4
-13.4
-9.7
11,958
1,633
19,915
20,684
3,005
1,739
3,426
3,165
65,525
6.4
-24.1
27.7
5.7
20.1
15.8
22.2
3.4
12.2
-15.1
54.6
8.0
-9.1
-10.2
-0.7
-15.0
-21.0
-5.7
Buy
Neutral
Neutral
Buy
Buy
Buy
Buy
Neutral
28,615
25,787
20,488
11,097
12,912
39,378
116,796
18,920
273,991
0.0
17.4
4.7
-0.9
11.6
7.9
6.4
2.3
6.3
-1.0 20,394
1.6 18,630
2.9 14,225
1.2
7,064
-1.2
9,316
0.8 26,493
1.5 65,133
-0.9 12,121
0.9 173,376
-14.0
0.5
11.0
-22.2
1.1
4.6
-11.4
-4.8
-6.3
-16.3
-14.6
-25.1
-17.8
-14.4
-10.9
-13.7
-14.1
-15.0
7,956
5,101
3,709
2,026
2,410
8,259
23,798
2,959
56,219
-38.9
69.0
-43.9
-59.2
-20.2
-22.5
-34.9
-46.6
-32.6
-31.9
-47.1
-53.2
-36.2
-31.8
-35.2
-26.6
-47.2
-35.2
Buy
Buy
Buy
Buy
Buy
Neutral
Neutral
Buy
5,830
16,192
6,868
4,607
6,602
18,499
16,545
9,383
84,526
502,012
32.3
16.8
6.8
30.3
25.5
25.4
29.2
8.1
21.2
12.0
-2.3
3,308
6.5 17,022
0.1
7,543
1.3
4,356
7.1
4,669
-4.7 18,235
-0.9 16,711
4.0
7,826
0.8 79,671
0.7 368,588
35.8
7.2
3.9
28.4
28.8
25.2
29.0
9.9
18.5
4.9
0.0
1,702
3.9 12,103
-14.2
4,288
-1.3
3,326
12.2
2,302
-5.0 12,776
-1.8 11,825
6.5
3,520
-1.2 51,842
-10.6 173,586
32.2
5.1
-9.8
36.8
22.7
21.2
22.6
4.3
14.1
-7.3
-3.2
3.2
-22.6
7.1
20.4
0.4
-1.1
3.2
-0.6
-16.7
PULL OUT
October 2013
B8
MOSL Universe
Ready reckoner: valuations

CMP (INR)
27.09.13
Automobiles
Ashok Leyland
Bajaj Auto
Eicher Motors
Exide Inds.
Hero Motocorp
Mahindra & Mah.
Maruti Suzuki
Tata Motors
Sector Aggregate
Capital Goods
ABB
BHEL
Crompton Greaves
Cummins India
Havells India
Larsen & Toubro
Siemens
Thermax
Sector Aggregate
Cement
ACC
Ambuja Cements
Birla Corporation
Grasim Industries
India Cements
J P Associates
Shree Cement
Ultratech Cement
Century Textiles
Dalmia Bharat
J K Cements
JK Lakshmi Cem.
Madras Cement
Orient Paper
Prism Cement
Sector Aggregate
Consumer
Asian Paints
Britannia
Colgate
Dabur
Godrej Consumer
GSK Consumer
Hind. Unilever
ITC
Marico
Nestle
Pidilite Inds.
Radico Khaitan
United Spirits
Sector Aggregate
Rating
EPS (INR)
FY13 FY14E FY15E
P/E (x)
FY13 FY14E FY15E
EV/EBITDA (x)
FY13 FY14E FY15E
RoE (%)
FY13 FY14E FY15E
15
1,992
3,539
132
2,048
844
1,368
340
Neutral
Buy
Buy
Neutral
Buy
Buy
Buy
Buy
0.6
105.2
120.1
6.2
106.1
60.9
80.2
32.1
-1.2
117.2
146.4
7.7
110.4
68.3
79.1
35.9
0.6
135.6
180.1
8.9
152.8
79.4
101.2
42.8
24.0
18.9
29.5
21.5
19.3
13.9
17.1
10.6
14.4
-12.1
17.0
24.2
17.2
18.5
12.4
17.3
9.5
13.3
24.5
14.7
19.7
14.8
13.4
10.6
13.5
7.9
10.8
6.8
14.0
16.1
12.1
16.7
5.5
8.2
5.1
7.0
17.1
11.5
12.4
9.2
13.8
5.4
7.5
3.9
5.7
5.9
9.5
9.2
7.8
9.5
4.5
5.7
3.2
4.7
3.9
43.7
20.8
15.3
45.6
22.4
12.9
27.4
24.2
-7.4
38.7
22.3
16.7
41.2
19.8
11.4
23.9
21.8
3.6
37.2
23.3
17.0
47.7
18.5
13.2
22.4
22.2
551
144
89
409
633
817
480
590
Neutral
Neutral
Buy
Buy
Neutral
Buy
Neutral
Buy
6.5
26.8
3.0
23.8
34.4
53.4
0.8
27.0
8.2
16.9
5.6
21.7
35.5
43.8
7.6
26.2
11.5
10.2
8.3
24.7
39.3
51.5
20.2
31.3
84.9
5.4
29.8
17.1
18.4
15.3
565.7
21.8
12.7
66.8
8.5
15.9
18.8
17.8
18.7
63.6
22.5
16.0
47.9
14.1
10.7
16.5
16.1
15.9
23.7
18.8
16.0
35.3
3.0
18.3
12.4
12.6
10.4
64.5
13.4
8.3
25.9
4.6
10.2
14.8
12.2
10.1
25.9
13.0
9.3
21.4
5.0
7.5
12.7
10.1
9.1
12.3
10.7
9.0
5.4
23.5
-1.0
29.7
29.8
16.2
0.8
18.4
17.7
6.6
13.0
9.6
24.0
25.5
14.6
6.6
15.9
12.8
8.8
7.3
13.8
25.3
23.5
14.4
16.6
17.4
12.0
1,101
184
207
2,678
51
37
4,004
1,826
250
126
188
71
180
8
28
Buy
Neutral
Buy
Buy
Neutral
Buy
Buy
Buy
Neutral
Buy
Buy
Buy
Buy
Buy
Neutral
68.7
10.0
35.0
278.7
5.8
2.3
314.9
96.8
-3.7
24.3
33.0
16.0
17.0
5.4
-1.2
55.7
8.0
34.7
322.7
3.2
2.7
277.0
96.1
-12.5
20.2
26.7
9.1
14.8
5.2
-1.8
65.5
9.3
44.8
379.7
6.6
4.4
321.1
110.9
-5.7
24.5
43.9
11.3
21.8
7.3
2.9
16.0
18.4
5.9
9.6
8.7
16.2
12.7
18.9
-67.3
5.2
5.7
4.4
10.6
1.5
-23.4
14.5
19.8
22.9
6.0
8.3
15.9
13.7
14.5
19.0
-20.0
6.2
7.0
7.8
12.1
1.5
-16.1
15.6
16.8
19.8
4.6
7.1
7.7
8.4
12.5
16.5
-43.5
5.2
4.3
6.3
8.2
1.1
9.6
12.4
8.9
10.0
3.4
4.2
5.4
15.6
8.1
11.1
14.7
5.8
3.9
4.2
7.1
2.9
12.8
8.8
10.7
13.4
3.2
3.7
5.7
7.4
8.1
11.2
17.3
6.5
6.1
7.0
7.2
3.7
14.7
8.0
9.1
11.7
1.9
2.8
4.8
6.6
7.1
9.4
11.3
4.8
4.2
5.8
5.0
4.3
5.4
6.4
17.7
18.3
11.0
13.0
4.3
3.9
30.6
18.9
-1.9
6.6
14.4
15.4
18.3
9.7
-5.4
12.9
13.1
13.6
10.1
13.3
2.4
4.3
17.4
16.1
-6.7
5.2
10.7
8.2
14.1
8.9
-8.6
10.9
14.0
14.7
11.9
13.6
4.7
6.7
17.4
16.1
-3.4
6.1
15.6
9.6
18.2
11.7
14.5
12.4
471
775
1,233
170
832
4,238
621
349
220
5,097
253
128
2,621
Neutral
Buy
Neutral
Buy
Neutral
Neutral
Sell
Neutral
Buy
Neutral
Neutral
Buy
Buy
11.6
19.6
36.5
4.4
19.6
98.3
15.3
9.5
6.0
114.1
8.5
6.7
29.6
12.4
27.1
40.8
5.4
24.7
119.1
16.4
10.9
7.5
123.1
9.7
8.0
41.1
15.2
32.0
46.1
6.5
30.5
139.8
17.7
12.7
8.6
150.2
11.7
10.7
66.0
40.6
39.6
33.8
38.6
42.4
43.1
40.5
36.8
36.6
44.7
29.9
19.1
88.6
39.7
38.1
28.6
30.2
31.4
33.7
35.6
37.9
31.9
29.4
41.4
26.2
16.0
63.7
34.5
31.0
24.2
26.7
26.1
27.3
30.3
35.1
27.4
25.6
33.9
21.6
12.0
39.7
29.4
26.7
28.1
24.6
29.7
29.6
35.7
32.2
24.3
23.6
27.2
19.9
11.7
35.5
27.1
23.6
19.7
21.8
24.1
23.5
31.7
28.1
20.7
19.1
24.2
16.7
10.1
29.4
23.0
19.8
16.2
18.3
20.3
19.5
25.0
24.7
17.9
15.8
20.2
13.7
8.2
21.5
19.5
33.3
37.5
108.4
35.1
20.9
30.5
71.4
36.1
19.6
71.6
24.9
12.3
4.3
32.8
30.7
42.6
97.6
35.3
23.2
31.1
61.3
37.8
20.1
58.0
24.1
13.3
6.6
33.2
32.1
41.5
92.5
35.1
24.3
30.8
57.1
39.8
19.2
56.7
24.6
15.7
9.7
34.2
PULL OUT
October 2013
B9
MOSL Universe

CMP (INR)
27.09.13
Rating
EPS (INR)
FY13 FY14E FY15E
P/E (x)
FY13 FY14E FY15E
EV/EBITDA (x)
FY13 FY14E FY15E
RoE (%)
FY13 FY14E FY15E
Healthcare
Biocon
334
Cadila Health
693
Cipla
433
Divis Labs
984
Dr Reddy s Labs
2,411
Glenmark Pharma
523
GSK Pharma
2,414
IPCA Labs.
695
Lupin
853
Ranbaxy Labs
334
Sanofi India
2,558
Sun Pharma
590
Torrent Pharma
439
Sector Aggregate
Neutral
Buy
Neutral
Buy
Buy
Buy
Buy
Buy
Buy
Neutral
Neutral
Buy
Buy
16.4
31.9
15.8
45.4
90.2
18.4
80.0
25.7
23.1
13.0
76.7
14.7
27.8
18.8
35.8
20.2
54.8
107.1
25.4
62.5
31.8
31.5
13.0
87.3
21.6
29.8
21.1
41.4
22.6
66.5
127.0
31.9
79.1
51.0
41.9
12.9
105.5
24.7
34.1
20.4
21.7
27.3
21.7
26.7
28.4
30.2
27.1
36.9
25.7
33.3
40.0
15.8
30.5
15.8
16.7
19.2
14.8
19.0
16.4
30.5
13.6
20.3
25.8
24.2
23.9
12.9
20.5
10.4
14.5
15.1
15.6
16.9
15.5
23.2
14.8
19.4
7.4
23.4
24.0
10.8
17.4
9.6
13.5
13.5
12.9
14.5
13.3
30.9
12.5
15.9
13.8
22.1
17.4
10.1
15.4
8.5
11.5
12.0
10.1
12.3
11.2
23.1
9.4
13.1
7.5
18.1
15.0
8.8
12.6
12.1
23.7
14.1
26.0
20.7
18.1
33.7
23.1
22.5
31.4
14.8
22.5
35.8
19.3
12.8
22.8
15.6
26.7
20.3
20.5
25.1
23.4
23.8
-4.7
15.6
27.9
30.8
21.1
13.1
22.3
15.0
27.7
19.9
21.1
29.9
30.2
25.4
28.2
17.2
26.4
28.3
20.6
Media
D B Corp
Dish TV
Hindustan Media
HT Media
Jagran Prakashan
PVR
Sun TV
Zee Entertainment
Sector Aggregate
252
50
111
87
82
470
401
238
Buy
Buy
Buy
Neutral
Buy
Buy
Buy
Neutral
11.9
-1.2
11.5
7.1
4.7
11.2
17.3
7.5
15.3
-0.9
14.1
5.7
6.4
15.4
19.5
9.2
18.6
-0.2
16.3
6.0
7.7
24.2
24.1
11.0
21.2
-42.7
9.7
12.3
17.6
41.8
23.1
31.5
28.8
16.5
13.6
-58.9 -289.8
7.9
6.8
15.4
14.6
12.8
10.7
30.6
19.4
20.6
16.6
26.0
21.7
24.0
19.1
12.4
10.9
4.6
5.9
10.1
20.9
11.2
23.2
13.7
9.3
10.1
3.0
6.3
7.6
10.7
9.6
18.7
11.4
7.9
8.1
2.0
5.5
6.5
8.4
8.0
15.4
9.4
22.3
NA
17.9
10.1
17.5
9.6
23.6
19.6
17.1
25.7
NA
18.5
7.4
20.4
9.3
24.1
20.7
18.4
27.7
NA
17.9
7.2
21.5
13.3
26.7
21.4
20.3
Metals
Hindalco
Hindustan Zinc
JSPL
JSW Steel
Nalco
NMDC
SAIL
Sesa Sterlite
Tata Steel
Sector Aggregate
114
131
237
732
32
126
51
183
288
Buy
Buy
Neutral
Sell
Buy
Buy
Sell
Buy
Sell
17.0
16.4
37.2
49.7
2.3
16.7
5.7
35.9
1.6
14.0
16.7
27.3
65.5
3.3
15.7
8.2
34.7
33.6
15.0
16.4
32.3
71.4
3.3
16.0
5.5
35.8
32.2
6.7
8.0
6.4
14.7
13.9
7.5
8.9
5.1
183.5
8.0
8.1
7.8
8.7
11.2
9.8
8.0
6.2
5.3
8.6
7.3
7.6
8.0
7.3
10.3
9.9
7.8
9.2
5.1
8.9
7.4
8.9
5.2
7.1
7.2
3.6
3.7
7.4
4.1
7.2
5.8
7.7
4.2
8.4
6.6
3.5
3.9
7.5
3.8
6.0
5.5
6.2
3.5
6.1
6.3
3.0
3.8
8.1
3.5
6.3
5.1
18.0
23.4
17.7
6.6
5.0
26.8
5.8
14.4
0.7
11.9
13.1
20.2
12.0
9.1
6.9
22.2
8.0
13.5
14.9
12.1
12.5
17.1
13.3
10.1
6.6
19.6
5.1
13.0
13.1
11.1
Others
Bata India
Castrol India
MCX
Sintex Inds.
United Phosphorous
V-Guard Inds
Sector Aggregate
851
311
402
21
143
486
Buy
Neutral
Buy
Buy
Buy
Buy
26.8
9.0
54.9
13.3
18.1
21.1
30.7
9.7
29.4
9.9
21.0
29.1
38.5
10.9
29.9
11.3
25.2
39.1
31.8
34.4
7.3
1.6
7.9
23.1
14.4
27.7
32.1
13.7
2.1
6.8
16.7
14.5
22.1
28.5
13.5
1.9
5.7
12.4
12.2
19.2
25.0
5.7
4.4
4.8
14.6
9.5
16.6
23.1
11.3
4.2
3.8
10.5
8.5
13.4
20.1
11.7
3.5
3.1
8.0
7.3
27.1
83.8
26.0
14.3
18.2
26.7
21.2
25.6
71.4
12.7
9.8
18.5
29.4
18.8
26.5
71.3
12.3
10.1
19.0
31.1
19.7
17.8
19.3
21.4
18.0
22.5
20.6
38.6
21.9
27.1
25.7
29.3
27.4
14.7
24.3
PULL OUT
October 2013
B10
MOSL Universe

CMP (INR)
27.09.13
Oil & Gas
BPCL
Cairn India
Chennai Petroleum
GAIL
Guj. State Petronet
HPCL
Indraprastha Gas
IOC
MRPL
Oil India
ONGC
Petronet LNG
Reliance Inds.
Sector Aggregate
Ex RMS
Rating
EPS (INR)
FY13 FY14E FY15E
P/E (x)
FY13 FY14E FY15E
EV/EBITDA (x)
FY13 FY14E FY15E
RoE (%)
FY13 FY14E FY15E
329
318
56
326
52
190
276
211
33
454
275
123
840
Buy
Buy
Buy
Neutral
Neutral
Buy
Neutral
Buy
Neutral
Buy
Buy
Buy
Neutral
26.0
63.1
-118.6
31.7
9.6
26.7
25.3
18.3
-4.3
59.7
28.3
15.3
71.9
28.2
65.6
-2.3
28.9
9.0
16.3
26.4
19.5
1.3
60.1
28.9
10.6
74.0
34.8
55.2
30.2
28.8
9.2
26.3
31.6
28.0
6.8
68.9
36.7
12.9
80.6
12.6
5.0
-0.5
10.3
5.4
7.1
10.9
11.5
-7.7
7.6
9.7
8.0
11.7
10.3
10.2
11.7
4.8
-24.6
11.3
5.7
11.7
10.4
10.9
25.9
7.6
9.5
11.6
11.4
9.8
9.7
9.4
5.8
1.9
11.3
5.6
7.2
8.7
7.5
4.9
6.6
7.5
9.5
10.4
8.5
8.6
7.6
3.3
-7.0
8.0
3.6
9.9
5.5
10.3
14.4
3.8
3.8
5.8
8.5
6.2
5.5
7.2
2.5
11.0
8.8
3.0
9.8
5.0
10.7
6.2
3.6
3.5
6.6
8.9
5.8
5.2
6.4
2.5
5.2
7.8
3.0
8.0
4.0
6.7
3.5
2.9
2.8
5.7
8.0
4.8
4.4
11.5
24.8
-60.7
17.5
19.9
6.7
26.0
7.2
-11.1
19.4
16.8
28.8
12.3
13.4
14.6
11.6
23.8
-1.7
14.4
16.1
4.0
22.6
7.3
3.4
17.8
15.6
16.7
11.5
12.8
13.9
13.2
17.2
20.8
13.1
14.4
6.2
22.7
9.9
16.9
18.2
17.8
17.7
11.4
13.4
14.1
42
132
346
37
55
16
406
166
237
123
16
Buy
Buy
Neutral
UR
Buy
Buy
Buy
Buy
Buy
Buy
Buy
3.6
4.2
17.7
1.7
4.1
5.0
34.6
15.4
5.8
8.2
0.8
4.7
4.5
21.4
6.8
6.9
6.3
31.6
16.8
7.0
10.2
1.2
5.5
6.5
32.8
8.9
13.8
6.2
41.3
22.0
13.5
13.3
1.5
11.6
31.4
19.5
21.3
13.3
3.2
11.7
10.8
40.8
15.0
20.3
14.7
8.9
29.2
16.2
5.5
7.9
2.5
12.8
9.9
33.8
12.0
13.0
13.0
7.6
20.2
10.6
4.2
4.0
2.6
9.8
7.6
17.6
9.2
10.9
9.9
16.2
17.7
14.7
8.0
7.5
6.8
10.2
7.2
21.1
11.0
29.8
13.1
11.4
13.1
14.3
9.8
6.4
4.6
13.0
6.1
12.3
8.8
23.3
10.3
9.9
11.6
9.6
7.7
4.0
4.6
10.7
4.2
9.4
6.7
18.9
8.6
2.7
2.6
9.6
0.7
2.5
11.6
10.9
12.8
4.8
10.4
1.8
4.2
3.5
2.8
11.2
2.7
4.4
13.4
9.2
12.5
5.5
11.7
2.8
4.5
4.0
3.9
15.3
3.4
7.9
11.8
10.8
14.6
9.9
13.4
3.3
5.6
Retail
Jubi. Foodworks
Shopper's Stop
Titan Industries
Sector Aggregate
1,173
356
235
Sell
Neutral
Neutral
20.9
4.9
8.2
24.7
7.0
9.0
34.3
10.6
10.1
56.1
73.2
28.7
34.6
47.5
51.0
26.2
30.8
34.2
33.6
23.2
25.8
29.6
22.7
19.5
21.6
23.5
18.6
18.3
19.3
16.7
14.1
15.6
15.7
31.2
5.9
42.5
29.3
26.9
7.9
31.7
26.5
27.2
10.9
28.6
25.4
Technology
HCL Technologies
Hexaware Tech.
Infosys
KPIT Tech.
Mindtree
MphasiS
Persistent Systems
TCS
Tech Mahindra
Wipro
Sector Aggregate
1,071
129
3,006
131
1,186
428
619
1,947
1,306
475
Buy
Neutral
Buy
Neutral
Neutral
Sell
Buy
Neutral
Buy
Buy
57.0
10.9
164.9
10.6
81.7
37.5
46.9
71.2
93.2
25.0
76.7
13.8
186.5
15.9
118.8
35.9
57.7
91.0
122.8
30.9
85.2
14.9
215.5
17.5
130.8
42.4
66.8
104.2
131.1
34.0
18.8
11.8
18.2
12.4
14.5
11.4
13.2
27.3
14.0
19.0
20.9
14.0
9.3
16.1
8.2
10.0
11.9
10.7
21.4
10.6
15.4
16.9
12.6
8.6
14.0
7.5
9.1
10.1
9.3
18.7
10.0
14.0
14.9
12.4
8.3
12.8
6.4
9.8
8.9
6.2
20.7
8.8
13.8
15.3
9.0
6.3
10.3
4.3
7.3
8.9
4.9
15.0
6.6
10.6
11.6
8.1
5.5
8.7
4.0
5.7
7.3
4.3
13.4
6.0
9.6
10.3
32.2
30.1
25.7
22.7
25.8
19.1
20.2
37.8
32.6
25.3
27.5
37.4
33.4
24.4
26.0
33.2
16.9
20.9
38.7
33.9
27.6
27.9
32.4
32.3
25.8
24.6
28.1
18.7
20.4
35.2
28.5
25.5
25.9
325
159
172
151
Buy
Neutral
Buy
Neutral
6.0
5.6
3.1
0.9
7.7
7.4
6.0
4.9
13.7
9.9
8.9
11.2
54.2
28.6
56.4
160.3
55.4
42.4
21.5
28.8
31.0
33.5
23.7
16.2
19.3
13.5
19.7
8.1
8.7
11.7
10.6
9.1
7.1
7.9
8.2
9.3
7.7
5.8
7.0
6.5
7.4
6.3
4.2
6.3
7.4
0.6
4.0
5.2
8.0
12.8
3.4
6.1
8.4
10.3
16.6
7.5
9.5
Real Estate
Anant Raj Inds
DLF
Godrej Properties
HDIL
Indiabulls Real Est.
Jaypee Infratech
Mahindra Lifespace
Oberoi Realty
Phoenix Mills
Prestige Estates
Unitech
Sector Aggregate
Telecommunication
Bharti Airtel
Bharti Infratel
Idea Cellular
Reliance Comm
Sector Aggregate
October 2013
B11
MOSL Universe

CMP (INR)
27.09.13
Utilities
CESC
Coal India
Jaiprakash Power
JSW Energy
NHPC
NTPC
Power Grid Corp.
PTC India
Reliance Infra.
Tata Power
Sector Aggregate
UR = Under Review
336
307
16
46
20
148
99
46
393
82
CMP (INR)
27.09.13
Private Banks
Axis Bank
1,031
Federal Bank
298
HDFC Bank
610
ICICI Bank
923
IndusInd Bank
377
ING Vysya Bank
510
J&K Bank
1,129
Kotak Mah. Bank
682
South Indian Bank
20
Yes Bank
305
Pvt. Bank Aggregate
PSU Banks
Andhra Bank
53
Bank of Baroda
501
Bank of India
163
Canara Bank
225
Corporation Bank
245
Dena Bank
47
IDBI Bank
60
Indian Bank
70
Oriental Bank
150
Punjab Nat. Bank
478
State Bank
1,642
Union Bank
115
PSU Bank Aggregate
NBFC
Bajaj Finance
1,177
Dewan Housing
104
HDFC
783
IDFC
89
LIC Housing Fin
192
M & M Financial
257
Power Finance Corp 133
Rural Electric. Corp. 195
Shriram Transport
574
NBFC Aggregate
Sector Aggregate
October 2013
Rating
EPS (INR)
FY13 FY14E FY15E
P/E (x)
FY13 FY14E FY15E
EV/EBITDA (x)
FY13 FY14E FY15E
RoE (%)
FY13 FY14E FY15E
Buy
Neutral
Buy
Neutral
Neutral
Buy
Buy
Buy
Buy
Neutral
49.2
28.0
1.3
6.5
1.8
11.1
8.9
6.7
65.2
3.9
6.8
11.0
12.5
7.1
11.3
13.3
11.1
6.8
6.0
21.0
11.5
4.9
7.3
13.9
5.7
8.2
9.1
10.6
5.9
0.6
14.1
8.6
12.3
28.4
6.3
17.8
7.4
12.0
16.6
5.6
10.4
8.1
16.0
Rating
EPS (INR)
FY13 FY14E FY15E
P/E (x)
FY13 FY14E FY15E
Buy
Buy
Neutral
Buy
Buy
Buy
Buy
Neutral
Neutral
Buy
110.7
49.0
28.3
72.2
20.3
39.6
217.5
29.3
3.8
36.3
114.4
36.1
36.1
75.0
23.9
37.4
211.2
32.0
3.8
37.8
132.0
47.2
44.7
84.4
28.4
42.9
234.6
36.7
4.1
45.9
9.3
6.1
21.6
12.8
18.6
12.9
5.2
23.3
5.3
8.4
14.5
9.0
8.3
16.9
12.3
15.7
13.6
5.3
21.3
5.3
8.1
13.2
7.8
6.3
13.6
10.9
13.3
11.9
4.8
18.6
4.9
6.6
11.2
1.5
0.8
4.0
2.0
2.7
1.7
1.1
3.3
0.9
1.9
2.5
1.3
0.7
3.4
1.8
2.3
1.4
1.0
2.9
0.8
1.6
2.1
1.1
0.7
2.8
1.6
2.0
1.2
0.8
2.5
0.7
1.3
1.9
18.5
13.9
20.3
14.8
17.8
14.6
23.6
15.5
20.5
24.8
17.2
15.2
9.3
21.7
12.8
15.8
12.1
19.5
14.6
16.5
21.3
16.0
15.4
11.3
22.7
12.8
16.4
10.9
18.8
14.5
15.6
21.8
16.5
Neutral
Buy
Neutral
Neutral
Neutral
Neutral
Neutral
Buy
Buy
Buy
Buy
Neutral
23.0
106.0
46.1
64.8
93.8
23.1
14.1
36.8
45.5
134.3
261.9
36.0
16.4
85.7
44.6
46.6
86.6
18.8
14.1
25.5
37.2
113.3
206.1
27.4
17.6
93.5
48.2
53.6
93.7
20.8
15.7
29.5
42.7
129.4
236.8
31.5
2.3
4.7
3.5
3.5
2.6
2.0
4.2
1.9
3.3
3.6
6.3
3.2
4.6
3.2
5.8
3.7
4.8
2.8
2.5
4.2
2.7
4.0
4.2
8.0
4.2
5.7
3.0
5.4
3.4
4.2
2.6
2.3
3.8
2.4
3.5
3.7
6.9
3.7
5.0
0.4
0.7
0.5
0.4
0.4
0.3
0.4
0.3
0.4
0.5
0.9
0.4
0.7
0.3
0.6
0.4
0.4
0.4
0.3
0.4
0.3
0.3
0.5
0.8
0.4
0.6
0.3
0.6
0.4
0.4
0.3
0.3
0.4
0.2
0.3
0.4
0.8
0.4
0.6
16.2
16.1
13.6
13.3
16.1
17.6
10.2
15.6
11.5
16.5
16.5
15.0
14.9
10.5
11.6
11.7
8.8
13.2
12.7
9.4
9.7
8.7
12.2
11.7
10.0
10.8
10.4
11.5
11.6
9.4
12.9
12.7
9.8
10.3
9.3
12.7
12.2
10.6
11.2
Buy
Buy
Buy
Buy
Buy
Buy
Neutral
Neutral
Buy
118.8
35.2
31.4
12.1
20.3
15.7
34.3
38.7
64.7
146.1
44.2
35.9
13.0
24.2
17.8
38.8
46.4
69.7
181.1
54.1
40.9
14.9
29.6
22.5
42.7
53.8
80.0
9.9
3.0
25.0
7.3
9.5
16.4
3.9
5.0
8.9
11.2
9.0
8.1
2.4
21.8
6.8
7.9
14.5
3.4
4.2
8.2
9.7
9.3
6.5
1.9
19.1
5.9
6.5
11.4
3.1
3.6
7.2
8.4
8.1
1.7
0.4
4.8
1.0
1.5
3.3
0.7
1.1
1.8
2.2
1.5
1.5
0.4
4.3
0.9
1.3
2.8
0.6
0.9
1.5
1.9
1.3
1.2
0.3
3.9
0.8
1.1
2.4
0.5
0.8
1.3
1.7
1.2
21.9
17.1
23.8
14.1
16.8
23.4
20.1
23.6
20.6
20.1
16.5
19.8
16.3
25.6
13.7
17.4
20.7
19.6
23.7
18.3
19.6
14.0
20.8
17.2
25.7
14.1
18.4
22.4
18.7
23.1
17.9
19.6
14.4
53.2
29.6
1.4
7.7
1.9
11.9
8.7
6.8
50.5
3.0
56.8
31.4
2.3
6.9
2.0
13.8
10.5
6.8
55.5
3.4
6.3
10.4
11.2
5.9
10.7
12.5
11.4
6.7
7.8
26.8
10.9
5.9
9.8
7.0
6.6
10.1
10.7
9.4
6.7
7.1
23.7
9.9
4.2
6.3
12.6
4.8
9.1
9.7
9.4
7.1
-1.4
10.4
8.0
3.9
5.9
6.8
4.6
7.8
8.6
8.6
6.5
-1.3
9.7
7.2
P/BV (x)
FY13 FY14E FY15E
12.1
25.7
6.3
19.2
7.4
11.8
15.0
3.6
6.5
8.0
15.2
11.6
24.0
10.1
15.5
7.5
12.7
15.0
4.2
6.8
8.2
15.5
RoE (%)
FY13 FY14E FY15E
B12
September 2013 Results Preview
Sectors & Companies

BSE Sensex: 19,727
S&P CNX: 5,833
Note: In our quarterly performance tables, our four-quarter numbers may not always add up to the full-year
numbers. This is because of differences in classification of account heads in the companys quarterly and
annual results or because of differences in the way we classify account heads as opposed to the company.
All stock prices and indices as on 27 September 2013, unless otherwise stated.
October 2013
C1
September 2013 Results Preview | Sector: Automobiles
Automobiles
Companies Covered
Ashok Leyland
Bajaj Auto
Eicher Motors
Exide Industries
Demand remains weak; however festive-led buying and good monsoon provide
hope: Considering the slowdown in economic activity and consequent weakness in
consumer and business sentiments, demand continues to remain weak across auto
segments. MHCVs and cars have been the worst impacted. However, tractor volumes
continue to remain healthy (though growth moderated in 2Q post strong 1Q) on
favorable monsoon and high farm income. Two-wheelers are showing early signs of
recovery led by favorable monsoon and consequent strong demand from rural
markets.
Hero MotoCorp
Mahindra & Mahindra
Maruti Suzuki India
Tata Motors
2QFY14 margins to decline YoY on lower volumes and consequent high discounts:
EBITDA margins for our auto coverage universe (excluding JLR) is expected to decline
40bp YoY (-100bp QoQ) on continued demand weakness and consequent high
discounting pressure. While two-wheeler players (Bajaj, Hero and Royal Enfield)
are expected to report YoY improvement in margins, M&M, Tata Motors (S/A) and
Ashok Leyland would report a decline. MSIL would report YoY margin improvement
due to a low base (labor issues last year) and SPIL merger benefit, while on a QoQ
basis, margins would decline 180bp due to higher discounts and weaker mix (lower
diesel share). JLR expected to show strong margins of 16.9% (+40bp QoQ).
Easing of macro headwinds to be key catalyst for demand recovery: With the
expectation of an increase in rural incomes due to favorable monsoon coupled with
election spending-led improvement in macro-economic factors, we hope for a better
2H for the auto sector. Over the long term, easing macro headwinds such as lower
interest rates and higher economic growth would be the key driver for volume
growth, profitability and in turn for re-rating.
Valuation and view: Considering the current weakness in demand environment and
slower-than-earlier-anticipated economic recovery, we downgrade the volume
growth/earnings estimates across companies.
Our estimates for Bajaj Auto have been lowered by 8.2%/8.7% for FY14E/15E largely
reflecting continued weakness in domestic business, partially offset by favorable
INR/USD. For Maruti, our estimates are lowered by 8.7%/9.5% for FY14E/15E to factor
Expected quarterly performance summary

CMP
(INR)
27.09.13
Ashok Leyland
15
Bajaj Auto
1,992
Eicher Motors
3,539
Exide Inds.
132
Hero Motocorp
2,048
Mahindra & Mahindra
844
Maruti Suzuki
1,368
Tata Motors
340
Sector Aggregate
(INR Million)
Rating
Sep.13
Neutral
Buy
Buy
Neutral
Buy
Buy
Buy
Buy
27,348
47,252
15,746
16,514
56,782
84,430
100,528
536,575
885,176
Sales
Var.
% YoY
-17.0
-5.0
6.2
8.9
10.2
-8.7
21.0
23.6
14.4
Var. Sep.13
% QoQ
15.7
769
-3.8
9,734
-5.7
1,452
1.6
2,394
-7.3
5,494
-13.0 10,523
-1.8
9,667
14.7 75,120
6.1 115,153
EBITDA
Var.
% YoY
-77.0
6.4
30.4
27.2
18.9
-17.8
90.1
40.8
26.1
Var.
% QoQ
230.4
7.4
-12.6
-8.7
-19.3
-24.9
-17.1
20.8
6.4
Net Profit
Sep.13
Var.
% YoY
-822
PL
7,851
6.0
891
35.0
1,514
26.0
4,367
-0.9
8,470
-13.4
4,775
109.9
26,436
27.0
53,483
11.5
Var.
% QoQ
Loss
6.4
-3.4
-4.5
-20.4
-6.9
-24.4
44.2
12.0
Jinesh Gandhi (Jinesh@MotilalOswal.com) / Chirag Jain (Chirag.Jain@MotilalOswal.com)

October 2013
C2
the persistent weakness in demand and consequent pressure on margins due to high
discounts, weak mix (lower diesel share) coupled with adverse currency. Due to
continued weakness in UV demand, we lower M&M's consolidated FY14E/15E EPS by
4.4%/11.4%.
Demand environment and changing competitive landscape in the auto sector would
be key determinants of stocks' performance. We are hopeful of a demand recovery in
2HFY14 driven by festive season and benefit of favorable monsoon. Prefer Tata Motors
and Hero MotoCorp in large caps, and Eicher Motors in mid caps.
Volume snapshot for 2QFY14 ('000 units)

Two wheelers
Three wheelers
Passenger cars
UVs & MPVs
Total PVs
M&HCV
LCV
Total CVs
Total
2QFY14E
4,018
204
571
149
721
79
145
225
5,167
2QFY13
3,739
216
540
169
709
80
146
226
4,890
YoY (%)
7.4
-5.4
5.8
-11.6
1.7
-1.0
-0.2
-0.5
5.7
1QFY14 QoQ (%)

3,947
1.8
203
0.7
627
-8.9
177
-15.7
804
-10.4
60
32.4
124
17.5
184
22.3
5,137
0.6
1HFY14
7,964
407
1,131
326
1,457
139
269
408
10,237
1HFY13 YoY (%)

7,782
2.3
387
5.1
1,142
-1.0
333
-1.9
1,475
-1.2
151
-7.7
278
-3.2
429
-4.8
10,072
1.6
Source: SIAM, MOSL
Trend in industry volumes

Indus try ('000 uni ts )
Growth YoY (%)

60.0%
5,700
40.0%
4,900
2QFY14
1QFY14
4QFY13
3QFY13
2QFY13
1QFY13
4QFY12
3QFY12
2QFY12
1QFY12
4QFY11
3QFY11
2QFY11
-20.0%
1QFY11
2,500
4QFY10
0.0%
3QFY10
3,300
2QFY10
20.0%
1QFY10
4,100
Source: Company, MOSL
Revised EPS estimates (INR)

EPS
Bajaj Auto
Hero MotoCorp
Maruti *
M&M *
Tata Motors *
Ashok Leyland
Eicher Motors *
Exide Industries
* Consolidated
October 2013
Rev
117.2
110.4
79.1
68.3
35.9
-1.2
146.4
7.7
FY14E
Old
127.7
111.6
86.7
71.5
32.8
-0.4
145.5
7.8
Chg (%)
-8.2
-1.1
-8.7
-4.4
9.7
177.5
0.6
-1.2
Rev
135.6
152.8
101.2
79.4
42.8
0.6
180.1
8.9
FY15E
Old
148.6
153.5
111.9
89.6
40.0
1.1
180.1
8.9
Chg (%)
-8.7
-0.5
-9.5
-11.4
7.0
-43.4
0.0
0.9
C3
Commodity cost (Index)
103
100
1QF Y13
2QF Y14
USD
Euro
GBP
JPY
170
140
100
96
83
95
95
95 84
75
7883
80
R ubbe r
Jun12
Sep12
Dec12
Mar13
Jun13
Al umi n i um
110
Jun09
Sep09
Dec09
Mar10
Jun10
Sep10
Dec10
Mar11
Jun11
Sep11
Dec11
Mar12
Le ad
4QF Y12
1QF Y14
92
92
107
102
96
100
83
90
87
86
101
100
113
97
103
100
92
93
98
97
S teel (HR C)
3QFY12
4QFY13
100
93
95
95
93
99
2QFY12
3QFY13
113
1QF Y12
2QF Y13
Trend in movement of various currencies (Indexed)
Source: Bloomberg, MOSL
Trend in EBITDA margins (%)

Aggre gate
Trend in segment-wise EBITDA margins (%)

Aggrega te (i ncl JLR)
1QFY12
2QFY12
3QFY12
4QFY12
1QFY13
2QFY13
3QFY13
4QFY13
1QFY14
2QFY14
15.0
15
12.9
10.9
14.4
14.6
18
2W
9.0
7.9
9.4
10.3
10.2
10.6
12.3
11.7
9.4
14.7
13.9
13.6
13.4
13.1
1QF Y10
2QF Y10
3QF Y10
4QF Y10
1QF Y11
2QF Y11
3QF Y11
4QF Y11
1QF Y12
2QF Y12
3QF Y12
4QF Y12
1QF Y13
2QF Y13
3QF Y13
4QF Y13
1QF Y14
2QF Y14
13.9
15.0
6.8
9.8
7.5
6.8
2.6
4.1
2.0
2.0
9.4
12
Ca rs
CVs
Source: Compan y, MOSL
Trend in HDFC Bank's base r ate
Trend in petrol and diesel price s
HDFC Ban k B ase Rate
Di es el (INR /l tr)
Petrol (INR /l tr)
80
11.0
10.0
60
9.0
40
8.0
October 2013
Aug13
Mar13
Oct12
Dec11
May12
Jul11
Sep10
Feb11
Apr10
Nov09
Jan09
Jun09
Mar08
Aug08
Oct07
Sep10
Nov10
Jan11
Mar11
May11
Jul11
Sep11
Nov11
Jan12
Mar12
May12
Jul12
Sep12
Nov12
Jan13
Mar13
May13
Jul13
Sep13
Source: HDFC Bank PLR
May07
20
7.0
C4
Trend in key financials

Volumes (000 units)
2Q
YoY
QoQ
FY14
(%)
(%)
914
-12.9
-6.7
1,438
7.9
-7.8
266
15.3
-0.3
173
-7.9
-11.0
154
-31.0
0.8
EBITDA Margins (%)

Adj PAT (INR M)
2Q
YoY
QoQ
2Q
YoY
QoQ
FY14
(bp)
(bp)
FY14
(%)
(%)
BJAUT
20.6 220.0 210.0 7,851
6.0
6.4
HMCL*
9.7
70.0 -140.0 4,367
-0.9
-20.4
MSIL
9.6 350.0 -180.0 4,775 109.9
-24.4
MM
12.5 -140.0 -200.0 8,470
-13.4
-6.9
TTMT (S/A)
1.8 -410.0
-50.0 -5,997 -155.4 -170.8
TTMT (Cons)
14.0 170.0
70.0 26,436
27.0
44.2
Ashok Leyland
25
-17.7
13.0
2.8 -730.0 180.0
-822 -157.6
NA
Eicher Motors
9.9 240.0
60.0 1,157
75.2
29.8
Exide Industries
14.5 210.0 420.0 1,514
26.0
-4.5
Aggregate
2,969
-2.8
-6.5
9.3
-30
-100 19,801
-46.2
-45.4
*Normalized; **Aggregate includes Tata Motors standalone performance only
Relative Performance-3m (%)
Relative Performance-1Yr (%)
Sens ex Index
MOSL Automobi l es Index
110
Sens ex Index
MOSL Automobi l es Index
115
110
105
105
100
100
95
Sep-13
Jun-13
Mar-13
Dec-12
Sep-12
Sep-13
Aug-13
Jul-13
Jun-13
95
Comparative valuation
CMP (INR)
27.09.13
Automobiles
Ashok Leyland
Bajaj Auto
Eicher Motors
Exide Inds.
Hero Motocorp
Mahindra & Mah.
Maruti Suzuki
Tata Motors
Sector Aggregate
October 2013
15
1,992
3,539
132
2,048
844
1,368
340
Rating
EPS (INR)
FY13 FY14E FY15E
P/E (x)
FY13 FY14E FY15E
EV/EBITDA (x)
FY13 FY14E FY15E
RoE (%)
FY13 FY14E FY15E
Neutral
Buy
Buy
Neutral
Buy
Buy
Buy
Buy
0.6
105.2
120.1
6.2
106.1
60.9
80.2
32.1
24.0
18.9
29.5
21.5
19.3
13.9
17.1
10.6
14.4
6.8
14.0
16.1
12.1
16.7
5.5
8.2
5.1
7.0
3.9
43.7
20.8
15.3
45.6
22.4
12.9
27.4
24.2
-1.2
117.2
146.4
7.7
110.4
68.3
79.1
35.9
0.6
135.6
180.1
8.9
152.8
79.4
101.2
42.8
-12.1
17.0
24.2
17.2
18.5
12.4
17.3
9.5
13.3
24.5
14.7
19.7
14.8
13.4
10.6
13.5
7.9
10.8
17.1
11.5
12.4
9.2
13.8
5.4
7.5
3.9
5.7
5.9
9.5
9.2
7.8
9.5
4.5
5.7
3.2
4.7
-7.4
38.7
22.3
16.7
41.2
19.8
11.4
23.9
21.8
3.6
37.2
23.3
17.0
47.7
18.5
13.2
22.4
22.2
C5
Ashok Leyland
Bloomberg
Equity Shares (m)
M. Cap. (INR b)/(USD b)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
AL IN
2,660.7
40 / 1
29 / 12
11 / -36 / -43
Financials & Valuation (INR b)

Y/E March
2012
2013 2014E
2015E
Sales
129.0 124.8 113.5
137.7
EBITDA
13.2
8.8
3.4
9.5
NP
6.3
1.7
(3.3)
1.6
Adj. EPS (INR)
2.4
0.6
(1.2)
0.6
EPS Gr. (%)
(0.8) (73.3) (297.8) (149.5)
BV/Sh. (INR)
15.8
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
16.7
16.7
17.1
15.3
3.9
(7.4)
3.6
13.4
6.5
0.1
6.2
42.5
95.6 (16.1)
162.9
6.4
1.0
5.0
6.6
24.0 (12.1)
0.9
0.9
8.8 23.0
4.0
1.3
24.5
0.9
8.1
6.6
CMP: INR15
Neutral
Expect volumes to decline 17.7% YoY (+13% QoQ) on continued

weakness in industrial activity and slowdown in consumption spends.
MHCVs volumes are expected to report a decline of 18.4% YoY (+16%
QoQ) to 17,275 units, while LCV (Dost) volumes are expected to decline
by 16% YoY (+6.7% QoQ) to 7,280 units.
Margins expected to fall 730bp YoY to 2.8% (+180bp QoQ) on lower
volumes and higher discounting pressure. Sequentially, margins are
expected to improve on better volumes. Company has undertaken a
pricing action of INR20,000/unit in Aug 2013.
Expect to report a loss of INR822m (v/s profit of INR1,426m in 2QFY13)
on lower volumes and weak margins.
ALL has guided for 10% decline in MHCV industry for FY14. Company
has recently launched a new vehicle under ICV segment called Boss.
We lower FY14E/15E EPS on continued weakness in CV industry and
consequent margin pressure.
Key issues to watch out
Current demand environment and discounting trend, plant and
channel inventory for MHCVs.
Industry growth, market share guidance for FY14.
Pantnagar volume, RM cost and margin guidance for FY14.
Capex and investment guidance and divestment plans for FY14.
Quarterly Performance
(INR Million)
Y/E March
Total Volumes (nos)
Growth (%)
Realizations ('000)
Change (%)
Net Sales
Change (%)
RM/Sales %
Staff / sales %
Oth. Exp./ Sales %
EBITDA
EBITDA Margins (%)
Other Income
Interest
Depreciation
PBT before EO Exp
EO Exp/(Inc)
PBT
Tax
Effective Tax Rate (%)
Rep. PAT
Change (%)
Adj. PAT
Change (%)
E: MOSL Estimates
October 2013
FY13
1Q
27,487
42.6
1,094
-16.1
30,074
19.7
72.8
8.9
10.3
2,407
8.0
129
834
893
810
0
810
140
17.3
670
-22.3
670
-22.3
2Q
29,840
25.0
1,105
-15.4
32,960
5.8
72.8
8.0
9.1
3,341
10.1
239
1,036
984
1,559
0
1,559
133
8.5
1,426
-7.5
1,426
-7.5
3Q
22,666
-2.2
1,050
-16.2
23,805
-18.0
71.9
11.0
12.8
1,023
4.3
141
1,071
931
-838
-1,563
725
-17
-2.3
741
10.8
-858
-228.2
FY14
4Q
34,627
-4.9
1,077
-9.1
37,285
-13.5
75.8
7.6
11.4
1,983
5.3
115
828
1,000
271
-1,344
1,614
114
7.1
1,500
-42.0
251
-90.2
1Q
21,721
-21.0
1,088
-0.5
23,638
-21.4
75.5
10.9
12.6
233
1.0
123
1,007
952
-1,603
65
-1,669
-251
15.0
-1,418
-311.6
-1,362
-303.3
2QE
24,555
-17.7
1,114
0.8
27,348
-17.0
75.0
9.7
12.5
769
2.8
240
1,000
975
-966
0
-966
-145
15.0
-822
-157.6
-822
-157.6
3QE
21,283
-6.1
1,110
5.7
23,619
-0.8
75.0
11.6
12.0
320
1.4
150
1,000
1,000
-1,530
0
-1,530
-229
15.0
-1,300
-275.4
-1,300
51.6
FY13
4QE
34,380
-0.7
1,131
5.1
38,897
4.3
75.0
8.5
11.2
2,047
5.3
157
931
1,059
215
0
215
33
15.3
182
-87.9
182
-27.7
FY14E
114,620 101,439
11.6
-11.5
1,089
1,119
-13.4
2.8
124,812 113,502
-3.4
-9.1
73.1
75.1
8.6
9.9
11.3
12.0
8,765
3,368
7.0
3.0
624
670
3,769
3,938
3,808
3,985
1,812
-3,885
-2,896
65
4,707
-3,950
370
-592
7.9
15.0
4,337
-3,357
-33.0
-177.4
1,669
-3,302
-74.2
-297.8
C6
Bajaj Auto
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
BJAUT IN
289.4
576 / 9
2,229 / 1,658
6/6/4
CMP: INR1,992
Expect 2QFY14 volumes to decline 12.9% YoY (-6.7% QoQ) to 0.92m

units as weak consumer sentiments impacts sales.
EBITDA margins to improve 220bp YoY (+210bp QoQ) to 20.6% led by

favorable export realizations (USD/INR hedged at 59 levels v/s INR55.5
for 1Q and INR49.5/USD in FY13), partially offset by lower volumes,
weaker mix (lower 3W share), price cuts in Nigeria/Sri Lanka effective
Aug 2013 and higher marketing spend.
Expect PAT to rise 6% YoY (+6.4% QoQ) to INR7.85b, in line with EBITDA
rise.
We lower FY14E/FY15E EPS by 8.2%/8.7% as we cut our FY14E volume

assumptions on continued weakness in macro-economic environment
and consequent slower economic recovery, coupled with partial passthru of favorable Fx hedges to revive export demand.

Y/E March
2012
2013 2014E
2015E
Sales
195.3 200.0 207.6
237.6
EBITDA
NP
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
37.2
36.4
41.7
31.1
30.4
33.9
39.3
107.4 105.2 117.2
135.6
18.8
(2.0)
48.2
11.4
15.8
208.8 273.1 331.7
397.7
RoE (%)
56.7
43.7
38.7
37.2
RoCE (%)
73.0
59.8
53.3
51.4
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
48.7
49.7
49.9
51.4
18.6
9.5
13.8
2.3
18.9
7.3
14.0
2.3
17.0
6.0
11.5
2.5
14.7
5.0
9.5
3.0
Buy

Update on festive retail demand environment and channel inventory.
Revised guidance for FY14 volume and margins, new launches, update
on forex hedges on exports for FY14/FY15.
Update on RE60 launch timeline (for export and domestic market),
volume and margin guidance.
(INR Million)
Y/E March
Volumes ('000 units)
Change (%)
Realization (INR/unit)
Change (%)
Net Sales
Change (%)
Total Cost
(Inc)/Dec in Stock
Raw Materials
Staff Cost
Other Expenditure
EBITDA
EBITDA Margins (%)
Change (%)
Other Income
Interest
Depreciation
PBT
Adj. PAT
Change (%)
E: MOSL Estimates
October 2013
FY13
1Q
1,079.0
-1.3
45,095
4.7
48,657
3.4
39,940
1,156
33,925
1,604
3,362
8,717
17.9
3.8
1,820
0
352
10,184
29.5
7,184
1.0
2Q
1,049.2
-9.9
47,392
6.4
49,724
-4.1
40,572
-902
36,589
1,532
3,479
9,152
18.4
-6.2
1,667
2
410
10,407
28.8
7,407
(6.2)
3Q
1,127.7
4.9
47,996
3.5
54,127
8.6
44,010
0
39,211
1,592
3,360
10,118
18.7
2.8
2,032
1
411
11,738
30.2
8,187
(1.8)
FY14
4Q
981.2
-3.5
48,372
2.1
47,465
-4.5
39,099
0
34,088
1,666
3,588
8,366
17.6
-4.2
2,436
2
466
10,334
25.9
7,658
0.9
1Q
979.3
-9.2
50,150
11.2
49,111
0.9
40,044
622
33,445
1,837
4,322
9,067
18.5
4.0
1,756
1
444
10,378
28.9
7,377
2.7
2QE
913.5
-12.9
51,725
9.1
47,252
-5.0
37,518
0
32,368
1,800
3,500
9,734
20.6
6.4
1,806
3
480
11,057
29.0
7,851
6.0
3QE
1,061.3
-5.9
52,918
10.3
56,160
3.8
44,519
0
38,469
1,950
4,250
11,640
20.7
15.1
2,000
2
480
13,158
29.0
9,342
14.1
4QE
1,045.1
6.5
52,684
8.9
55,061
16.5
43,836
0
37,707
2,087
4,183
11,226
20.4
15.7
2,450
7
512
13,157
29.1
9,333
21.9
FY13
FY14E
4,237.2
(2.6)
47,195
5.1
199,973
2.4
163,620
0
144,066
6,395
13,788
36,353
18.2
-2.3
7,955
5
1,640
42,662
28.7
30,436
-2.0
3,999.2
(5.6)
51,907
10.0
207,584
3.8
166,538
622
142,610
7,674
16,255
41,046
19.8
12.9
8,012
13
1,916
47,130
29.4
33,903
11.4
C7
Eicher Motors
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
EIM IN
27.0
96 / 2
3,980 / 2,205
-2 / 34 / 52

Y/E December
2012 2013E 2014E
2015E
Net Income
63.9
69.9
88.4
109.4
5.5
6.8
8.7
12.1
3.2
4.0
4.9
6.6
120.1 146.4 180.1
242.8
EBITDA
Net Profit
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
5.0
21.8
23.0
34.8
603.6 708.2 839.8 1,023.8
RoE (%)
20.8
22.3
23.3
26.1
RoCE (%)
23.0
22.5
23.6
28.5
0.6
0.7
0.8
1.0
29.5
5.9
24.4
0.6
24.2
5.0
16.5
0.7
19.7
4.2
11.9
0.8
14.6
3.5
8.3
1.0
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
CMP: INR3,539
Buy
With higher production and continued demand momentum, Royal

Enfield's (RE) volumes are expected to improve 61% YoY (+21% QoQ).
Expect standalone margins at 17.8% (+280bp YoY, +10bp QoQ) led by
higher volumes and efficiencies of the new plant.
Expect VECV's volumes to decline by 12.7% YoY (-14.5% QoQ). However,
VECV is expected to outperform CV industry, given its high exposure
to buses and LMD segment. VECV's margins are expected to decline
10bp YoY (-200bp QoQ) due to ramp-up in MDEP (engine project).
Expect 6.2% YoY (-5.7% QoQ) growth in consolidated sales. Consolidated
margins expected to improve 170bp QoQ (-70bp YoY) to 10%.
Consolidated PAT (after minority) to remain flat at INR891m, as higher
profits from Royal Enfield would offset weakness in VECV.
RE plans to sell 175,000/250,000 units in CY13/CY14. However, the CV
business remains weak, with no signs of stability yet.
Update on key projects slated to commence operations in CY13 viz a)
medium duty engine project, b) bus body plant and c) new HCV range.
Update on CV demand trends, discount levels and channel inventory.
New launches and timelines under Royal Enfield business.
(INR Million)
Y/E December
Net Op Income
Growth (%)
EBITDA
EBITDA Margins (%)
Depreciation
Other income
Interest cost
PBT after EO item
Effective tax rate (%)
PAT
Minority interest
Recurring PAT
Growth (%)
Standalone (Royal Enfield)
Royal Enfield (units)
Net Realizations (INR/unit)
Change - YoY (%)
EBITDA Margins (%)
VECV (derived)
Total CV Volumes
Growth (%)
Net Realizations (INR '000/unit)
Change - YoY (%)
EBITDA Margins (%)
E: MOSL Estimates
October 2013
CY12
CY13
1Q
16,950
21.7
1,802
10.6
177
543
9
2,160
24.3
1,634
539
1,096
49.5
2Q
15,850
22.1
1,395
8.8
187
306
9
1,506
25.3
1,125
366
759
-0.6
3Q
14,831
2.2
1,114
7.5
213
246
12
1,135
17.4
937
277
660
-10.5
4Q
16,536
4.7
1,180
7.1
245
271
10
1,196
12.1
1,052
324
727
-14.9
1Q
17,243
1.7
1,705
9.9
275
444
6
1,868
28.9
1,328
348
979
-10.6
2Q
16,699
5.4
1,662
10.0
296
211
12
1,565
19.6
1,258
335
923
21.7
3QE
15,746
6.2
1,452
9.2
330
270
11
1,381
20.7
1,095
203
891
35.0
4QE
20,186
22.1
1,991
9.9
368
292
8
1,907
20.9
1,509
352
1,157
59.1
23,899
92,083
4.5
13.9
27,519
92,162
3.1
15.3
30,046
91,476
2.0
15.1
31,968
92,345
2.8
11.5
34,737
95,299
3.5
17.7
40,040
93,911
1.9
17.8
48,295
94,430
3.2
17.9
57,008
94,223
2.0
17.5
14,346
13.0
1,019
4.9
10.1
12,016
9.0
1,098
7.9
7.6
10,791
-14.1
1,108
10.6
5.8
11,735
-8.1
1,138
3.9
6.2
12,529
-12.7
1,099
7.9
8.0
11,027
-8.2
1,152
4.9
7.6
9,424
-12.7
1,171
5.6
5.6
10,596
-9.7
1,381
21.4
7.3
CY12
CY13E
63,899
11.6
5,490
8.6
822
1,366
38
5,997
20.8
4,749
1,506
3,243
5.0
69,874
9.4
6,810
9.7
1,269
1,218
37
6,721
22.8
5,189
1,238
3,951
21.8
113,432 180,078
92,015 94,418
3.0
2.5
13.9
17.7
48,888
-0.3
1,081
5.8
7.6
43,575
-10.9
1,197
17.4
7.2
C8
Exide Industries
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
EXID IN
850.0
112 / 2
166 / 115
-4 / -3 / -17
CMP: INR132
Expect revenue growth of 8.9% YoY (+1.6% QoQ) to INR16.5b.
EBITDA margins expected to improve 210bp YoY (-160bp QoQ).

Sequential decline in margins is due to INR/USD depreciation, weaker
product mix (lower share of inventor battery due to seasonality)
partially offset by price hike implemented in Aug 2013 and Sept 2013.
PAT expected to grow by 26% YoY (-4.5% QoQ) to INR1.5b.

Y/E March
Net Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Growth (%)
BV/Share (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2012
51.1
6.8
4.6
5.4
(27.4)
36.0
15.1
20.3
27.6
2013 2014E
60.7 66.1
7.8 10.1
5.2
6.5
6.2
7.7
13.4 24.6
40.3 45.9
15.3 16.7
21.2 23.6
26.0 22.8
24.3
3.7
14.1
1.1
21.5
3.3
12.1
1.2
17.2
2.9
9.2
1.3
2015E
76.4
11.5
7.6
8.9
16.6
52.5
17.0
23.8
22.4
Neutral

Update on demand environment for auto replacement and industrial
battery segment.
Outlook on RM cost trend, recent pricing action and currency hedges
if any.
Update on capacity expansion plans across product segments.
14.8
2.5
7.8
1.5
(INR Million)
Y/E March
Net Sales
Change (%)
RM/Sales %
Employee Cost (% of sales)
Other Exp. (% of Sales)
EBITDA
As a % of Sales
Change (%)
Non-Operating Income
Interest
Depreciation
PBT
Tax
Rep. PAT
Change (%)
Adj. PAT
Change (%)
E: MOSL Estimates
October 2013
FY13
1Q
15,521
24.8
65.1
5.4
14.5
2,321
14.9
4.3
157
14
276
2,187
665
30.4
1,522
-6.7
1,522
-6.7
2Q
15,168
29.1
66.2
5.9
15.5
1,882
12.4
108.5
125
10
282
1,716
514
30.0
1,202
135.0
1,202
135.0
3Q
14,622
17.0
67.2
5.8
15.7
1,647
11.3
-0.5
121
11
289
1,469
428
29.1
1,041
-0.2
1,041
-0.2
FY14
4Q
15,382
6.4
67.1
5.8
13.8
2,044
13.3
-4.0
304
8
288
2,053
588
28.7
1,465
2.8
1,465
2.8
1Q
16,261
4.8
64.3
5.8
13.8
2,622
16.1
13.0
62
4
300
2,381
795
33.4
1,586
4.2
1,586
4.2
2QE
16,514
8.9
65.5
5.8
14.3
2,394
14.5
27.2
100
5
310
2,179
665
30.5
1,514
26.0
1,514
26.0
3QE
16,337
11.7
64.5
6.0
14.3
2,497
15.3
51.6
135
5
320
2,306
703
30.5
1,603
54.0
1,603
54.0
4QE
16,967
10.3
64.7
5.8
14.3
2,586
15.3
26.5
318
6
291
2,607
794
30.5
1,813
23.8
1,813
23.8
FY13
FY14E
60,718
18.9
66.5
5.7
14.8
7,899
13.0
14.8
704
42
1,135
7,427
2,195
29.6
5,232
13.4
5,232
13.4
66,079
8.8
64.8
5.8
14.2
10,099
15.3
27.8
615
20
1,222
9,472
2,957
31.2
6,516
24.5
6,516
24.5
C9
Hero MotoCorp
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
HMCL IN
199.7
409 / 7
2,128 / 1,434
-2 / 28 / 3
CMP: INR2,048
Expect 2QFY14 volumes to rise 7.9% YoY (-7.8% QoQ) to 1.56m units.
1Q witnessed healthy sales due to strong demand during the marriage
season and benefit from healthy rabi crop harvest.
Adjusted margins to improve 70bp YoY (-140bp QoQ) to 9.7% on

adverse JPY/USD movement (vendors import with a quarter lag) and
lower volumes.
Demand environment for Hero MotoCorp has stabilized over the last
few months and with good monsoon, outlook for 2H looks strong. We
estimate a volume growth of 5%/13.4% for Hero for FY14E/15E
respectively.
We downgrade FY14E/FY15E EPS by 1.1%/0.5% as we moderate our

margin assumption on adverse INR/USD movement.

Y/E March
Sales
EBITDA
NP
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2012
233.7
34.1
23.8
119.1
18.4
214.8
65.6
49.9
43.5
2013
235.8
31.0
21.2
106.1
(10.9)
250.7
45.6
43.6
65.1
2014E
253.0
35.3
22.1
110.4
4.1
284.9
41.2
52.4
67.7
2015E
292.9
40.2
30.5
152.8
38.3
356.3
47.7
62.6
52.7
16.8
9.3
11.0
2.3
18.8
8.0
11.7
3.0
18.1
7.0
10.2
3.3
13.1
5.6
8.8
3.5
Buy

Update on festive retail demand environment and channel inventory.
Guidance on FY14 volume growth and margins, update on export
plans and new launches together with timelines.
(INR Million)
Y/E March
Total Volumes ('000nos)
Change (%)
Net Realization
Change (%)
Net Sales
Change (%)
RM Cost (% sales)
Staff Cost (% sales)
Other Exp (% sales)
EBITDA
EBITDA Margins (%)
Adj. EBITDA Margins (%)
Other Income
Interest
Depreciation
PBT
Tax
PAT
Adj. PAT
Change (%)
E: MOSL Estimates
October 2013
FY13
1Q
1,642
7.4
37,799
2.6
62,078
10.1
74.1
3.3
8.1
8,974
14.5
10.7
1,439
29
3,035
7,349
1,194
16.3
6,155
6,155
10.3
2Q
1,333
-13.7
38,649
3.2
51,512
-10.9
73.2
3.7
9.8
6,829
13.3
9.0
1,356
30
2,895
5,261
855
16.3
4,406
4,406
-27.0
3Q
1,573
-1.0
39,102
3.9
61,513
2.8
74.5
3.2
10.2
7,423
12.1
8.7
1,264
30
2,832
5,826
947
16.3
4,879
4,879
-20.4
FY14
4Q
1,525
-3.0
39,810
5.0
60,725
1.8
73.1
3.7
10.4
7,765
12.8
9.6
1,778
31
2,655
6,857
1,115
16.3
5,742
5,742
-4.9
1Q
1,559
-5.1
39,300
4.0
61,268
-1.3
72.7
3.6
9.3
8,825
14.4
11.1
1,449
30
2,744
7,502
2,016
26.9
5,486
5,486
-10.9
2QE
1,438
7.9
39,500
2.2
56,782
10.2
73.1
3.9
9.6
7,614
13.4
9.7
1,200
32
2,880
5,902
1,534
26.0
4,367
4,367
-0.9
3QE
1,695
7.7
39,700
1.5
67,291
9.4
73.0
3.5
9.4
9,504
14.1
11.0
1,650
31
2,903
8,220
2,137
26.0
6,083
6,083
24.7
FY13
4QE
1,688
10.7
40,091
0.7
67,683
11.5
73.2
3.7
9.4
9,319
13.8
10.7
2,024
33
3,045
8,265
2,146
26.0
6,118
6,118
6.6
FY14E
6,074
6,380
-2.6
5.0
38,828 39,660
3.6
2.1
235,827 253,025
0.9
7.3
73.8
73.0
3.5
3.7
9.6
9.4
30,991 35,261
13.1
13.9
9.5
10.6
5,838
6,324
119
125
11,418 11,572
25,292 29,888
4,110
7,834
16.3
26.2
21,182 22,054
21,182 22,054
-9.5
4.1
C10
Mahindra & Mahindra

Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
MM IN
598.6
505 / 8
1,026 / 742
-3 / -7 / -7

Y/E March
Sales
EBITDA
NP*
Adj. EPS (INR)*
EPS Gr. (%)*
Cons. EPS (INR)
BV/Share (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
Cons. P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
* Incl. MVML
2012 2013 2014E

318.5 404.4 401.7
37.7 47.1 48.4
28.9 36.3 34.3
48.3 60.7 57.3
12.2 25.8 (5.6)
51.2 60.9 68.3
206
248
292
23.0 22.4 19.8
23.1 23.2 21.3
29.7 26.6 28.2
17.5
17.1
4.1
-
13.9
14.3
3.4
7.2
1.5
14.7
12.8
2.9
6.8
1.6
2015E
444.5
53.6
36.7
61.4
7.0
79.4
340
18.5
20.7
27.7
13.8
11.0
2.5
5.5
1.7
CMP: INR844
Buy
While M&M continues to face pressure on UV business led by

correction in fuel price disparity and higher competitive pressures,
growth in tractors has also moderated after strong 1Q. We expect auto
business to report a decline of 15.4%, while tractor volumes are
expected to grow by 9.8%.
Expect M&M to report revenue decline of 9.6% YoY (-13.8% QoQ) due
to sharp decline in auto volumes.
EBITDA margin (incl. MVML) to decline 200bp QoQ (-140bp YoY) led by
lower volumes, higher discounts (in autos) and lower share of high
margin tractor volumes.
Adjusted PAT estimated at INR8.4b (-14.5% YoY, -8% QoQ).
Update on current retail demand environment for auto and tractor
division; plant and channel inventory.
Considering competitive launches in CY13, FY14 guidance on auto
volumes and margins.
Guidance for FY14 tractor volumes (current guidance of 10-12% for
FY14 industry growth).
Update on Ssangyong business and financial performance.
Quarterly Performance (incl. MVML)
(INR Million)
Y/E March
Total Volumes (nos)
Growth YoY (%)
Net Realization
Growth YoY (%)
Gross Sales
Less: Excise
Excise (%)
Net Sales
Growth YoY (%)
Total Cost
EBITDA
EBITDA Margins (%)
Change (%)
Other income
PBT
Tax
Reported PAT
Change (%)
Adj PAT
Change (%)
E: MOSL Estimates
October 2013
FY13
1Q
182,149
14.4
487,431
14.9
99,377
10,592
11.9
88,785
31.5
76,435
12,350
13.9
27.9
662
10,498
2,713
25.8
7,785
25.9
7,785
25.9
2Q
188,412
10.4
491,082
14.9
104,607
12,081
13.1
92,526
26.8
79,729
12,797
13.8
33.2
3,260
13,272
3,491
26.3
9,781
28.4
9,781
28.4
3Q
209,266
14.2
489,452
9.2
114,466
12,040
11.8
102,426
24.7
88,631
13,795
13.5
26.5
758
11,774
2,625
22.3
9,149
29.6
9,149
35.1
FY14
4Q
195,528
0.1
510,569
9.4
112,407
12,576
12.6
99,831
9.5
85,478
14,352
14.4
30.1
1,017
13,211
3,581
27.1
9,630
5.7
8,941
11.4
1Q
194,962
7.0
497,564
2.1
107,043
10,037
10.3
97,006
9.3
82,998
14,008
14.4
13.4
972
12,141
3,045
25.1
9,097
16.9
9,097
16.9
2QE
171,897
-8.8
486,701
-0.9
94,833
11,171
13.4
83,662
-9.6
73,284
10,379
12.4
-18.9
3,560
11,004
2,643
24.0
8,360
-14.5
8,360
-14.5
3QE
208,664
-0.3
483,816
-1.2
114,434
13,480
13.4
100,955
-1.4
87,121
13,834
13.7
0.3
860
11,604
2,788
24.0
8,817
-3.6
8,817
-3.6
4QE
206,556
5.6
470,797
-7.8
113,145
15,899
16.3
97,246
-2.6
84,383
12,863
13.2
-10.4
835
10,410
2,373
22.8
8,037
-16.5
8,037
-10.1
FY13
FY14E
775,358
10.0
494,696
11.1
430,856
47,290
12.3
383,566
22.2
330,273
53,293
13.9
28.1
5,697
48,754
12,410
25.5
36,344
21.3
36,344
25.8
782,079
0.9
484,439
-2.1
429,456
50,587
13.4
378,869
-1.2
327,786
51,084
13.5
6,227
45,159
10,848
24.0
34,311
-5.6
34,311
-5.6
C11
Maruti Suzuki India

Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
MSIL IN
302.1
413 / 7
1,773 / 1,217
-1 / 2 / -3

Y/E March
2012 2013 2014E
Sales
355.9 435.9 441.4
EBITDA
25.1 42.3 45.2
Adj. PAT
16.4 23.9 23.5
Con.adj.EPS(INR) 58.2 80.2 79.1
EPS Growth (%) (35.9) 37.8 (1.4)
BV/Share (INR) 525.7 615.0 679.9
RoE (%)
10.8 12.9 11.4
RoCE (%)
13.2 15.5 14.9
Payout (%)
13.3 10.1 14.1
Valuations
P/E (x)
23.5 17.1 17.3
P/CE (x)
2.6
9.1
8.6
EV/EBITDA (x)
11.9
7.7
7.0
Div. Yield (%)
0.6
0.6
0.9
2015E
508.4
56.0
30.6
101.2
27.9
767.2
13.2
16.8
11.9
13.5
7.1
5.2
0.9
CMP: INR1,368
Buy
Our quarterly estimates for 2QFY14 include SPIL's merger; hence, YoY
performance is strictly not comparable.
Expect volumes to improve 15.3% YoY (flat QoQ) on a lower base (labor
issues related production constraints last year). Realizations to
improve 5.4% YoY (-1.6% QoQ). Sequential decline in realizations is
due to higher discounts and weak product mix (higher petrol share).
Expect margins to improve 350bp YoY on a low base. Sequentially,
margins would fall by 180bp on higher discounts and lower share of
diesel vehicles.
We downgrade FY14E/15E EPS by 8.7%/9.5% as we moderate our margin
assumption on continued increase in discounts and adverse currency
movement.
Update on festive demand scenario, channel inventory, discounting
trends and new launches.
Guidance on FY14 volume growth, margins, forex hedges, localization
efforts.
Y/E March
1Q
2Q
Total Volumes (nos)
295,899 230,376
Change (%)
5.1
-8.7
Realizations (INR/car)
355,839 350,302
Change (%)
21.3
19.5
Net Sales
105,292
80,701
Change (%)
26.9
8.5
Other Operating Income
2,489
2,353
Net Op. Revenues
107,782
83,054
Change (%)
27.5
8.2
RM Cost (% of Sales)
77.8
79.6
Staff Cost (% of Sales)
2.1
2.8
Other exp. (% of Sales)
12.8
11.4
EBITDA
7,864
5,085
EBITDA Margins (%)
7.3
6.1
Change (%)
-3.0
15.4
Non-Operating Income
1,123
1,563
Interest
332
380
Depreciation
3,399
3,470
PBT
5,256
2,798
Tax
1,018
524
19.4
18.7
PAT
4,239
2,274
Adjusted PAT
4,239
2,274
Change (%)
-22.8
-5.4
E:MOSL Estimates; * Including SPIL Merger
October 2013
(INR Million)
FY13
3Q
301,453
25.9
363,471
15.7
109,570
44.5
2,434
112,003
44.9
78.4
2.2
11.5
8,913
8.0
121.0
1,886
459
3,583
6,756
1,743
25.8
5,013
5,013
143.8
FY14
4Q*
343,756
-4.6
379,812
19.1
130,563
13.3
2,478
133,040
13.4
65.6
2.9
16.4
19,996
15.0
132.9
3,990
726
8,159
15,101
2,705
17.9
12,396
12,396
93.7
1Q
266,434
-10.0
375,144
5.4
99,951
-5.1
2,422
102,373
-5.0
71.9
2.9
13.8
11,662
11.4
48.3
2,043
442
4,802
8,461
2,145
25.3
6,316
6,316
49.0
2QE
275,586
19.6
369,191
5.4
101,744
26.1
2,500
104,244
25.5
73.3
2.9
14.1
10,135
9.7
99.3
2,100
500
4,900
6,835
1,709
25.0
5,126
5,126
125.4
3QE
302,500
0.3
371,625
2.2
112,417
2.6
2,700
115,117
2.8
74.3
2.8
13.2
11,247
9.8
26.2
2,386
515
5,750
7,368
1,842
25.0
5,526
5,526
10.2
FY13
FY14E
4QE
309,894 1,171,484 1,154,414
-9.9
3.3
-1.5
377,699 363,749 373,487
-0.6
18.8
2.7
117,047 426,126 431,158
-10.4
22.2
1.2
2,594
9,753
10,217
119,641 435,879 441,375
-10.1
22.5
1.3
74.4
74.7
73.5
2.9
2.5
2.8
12.6
13.1
13.4
12,197
42,296
45,240
10.2
9.7
10.2
-39.0
68.3
7.0
2,871
8,124
9,400
558
1,898
2,015
5,855
18,612
21,307
8,654
29,910
31,318
2,134
5,989
7,830
24.7
20.0
25.0
6,520
23,921
23,489
6,520
23,921
23,489
-47.4
46.3
-1.8
C12
Tata Motors
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
TTMT IN
3,218.9
1,094 / 18
355 / 245
7 / 21 / 25

Y/E March
Net Sales
EBITDA
NP
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2012
1,657
237.0
125.6
39.0
38.5
103.0
38.4
24.1
11.7
2013
1,888
265.7
103.3
32.1
(17.7)
118.0
27.4
21.7
7.2
2014E
2,251
335.9
115.7
35.9
12.0
150.5
23.9
22.2
6.5
2015E
2,588
380.8
137.9
42.8
19.2
191.6
22.4
22.2
8.1
8.6
3.3
5.3
1.2
10.5
2.8
5.0
0.6
9.3
2.2
3.8
0.6
7.8
1.8
3.2
0.9
CMP: INR340
Buy
JLR volumes expected to grow 29% YoY (+10.4% QoQ) driven by strong
growth in Jaguar due to variant launches (smaller engines, AWD and
XF sportsbrake) and ramp-up of new Range Rover/Range Rover Sport.
EBITDA margins to improve 40bp QoQ on higher volumes and stronger
mix (higher Range Rover/Sport).
Standalone volumes to decline 31% YoY (+1% QoQ) led by 21.4%/50.1%
YoY decline in CVs/PVs respectively. Within CVs, MHCVs expected to
report a decline of 31% (despite lower base), while LCVs to decline by
17%. Standalone margins to remain weak at 1.8% (-50bp QoQ, -410bp
YoY) on lower volumes and higher discounting pressures.
Expect 23.6% YoY (+14.7% QoQ) rise in TTMT's consolidated revenue.
Consolidated margins to improve 170bp YoY (+70bp QoQ). Expect
consolidated PAT to rise by 27% YoY (+44.2% QoQ) to INR26.4b led by
strong JLR performance, translation gains partially offset by higher
standalone loss.
We upgrade FY14E/15E consolidated EPS by 9.7%/7% led by upgrades
in JLR partially and Fx translation gains offset by higher losses in S/A.
Current JLR demand trends and outlook for FY14, particularly China
and the US.
Order book for new Range Rover and Range Rover Sport and their
ramp-up schedule.
Update on Fx hedges, particularly for JLR operations.
FY14 volume guidance for MHCVs and PVs, channel inventory, discount
trends.
Quarterly Performance (Consolidated)
(INR Million)
Y/E March
Total Op Income
Growth (%)
EBITDA
EBITDA Margins (%)
Depreciation
Other Income
Interest Expenses
PBT before EO Exp
EO Exp/(Inc)
PBT after EO Exp
Tax rate (%)
PAT
Minority Interest
Share in profit of Associate
Adj PAT
Growth (%)
JLR EBITDA Margins (%)
S/A EBITDA Margins (%)
E: MOSL Estimates
October 2013
FY13
1Q
433,236
30.1
57,548
13.3
15,659
2,386
8,044
36,232
4,405
31,826
27.3
23,138
-276
-414
25,651
25.2
14.5
7.3
2Q
434,029
19.9
53,336
12.3
15,944
2,068
8,474
30,987
101
30,886
32.0
21,010
-230
-32
20,816
(7.3)
14.8
5.9
3Q
460,895
1.8
56,573
12.3
20,700
1,886
9,344
28,416
1,735
26,681
38.7
16,362
-152
67
17,341
(50.9)
14.0
2.2
FY14
4Q
560,016
10.0
78,015
13.9
23,391
1,775
9,670
46,729
-215
46,943
18.8
38,116
-178
1,517
39,280
-11.5
16.9
3.6
1Q
467,847
8.0
62,192
13.3
23,477
1,823
9,482
31,056
1,786
29,270
39.8
17,628
-198
-169
18,337
(28.5)
16.5
2.3
2QE
536,575
23.6
75,120
14.0
29,477
1,750
9,500
37,894
0
37,894
30.0
26,526
-250
160
26,436
27.0
16.9
1.8
3QE
572,175
24.1
78,674
13.8
30,000
1,500
9,500
40,674
0
40,674
30.0
28,472
-175
190
28,487
64.3
16.5
2.7
FY13
FY14E
4QE
674,385 1,888,176 2,250,982
20.4
14.0
19.2
98,398 245,473 314,384
14.6
13.0
14.0
32,765
75,693 115,718
1,341
8,115
6,414
9,354
35,533
37,837
57,619 142,362 167,243
0
6,027
0
57,619 136,335 167,243
28.9
27.7
31.0
40,968
98,625 115,380
-134
-837
-757
859
1,138
1,040
41,693 103,286 115,663
6.1
-17.7
12.0
17.3
15.2
16.8
3.9
4.8
2.7
C13
September 2013 Results Preview | Sector: Capital Goods
Capital Goods
Companies Covered
No respite from tardy pace of project execution: 1QFY14 witnessed sharp deceleration
in the pace of project execution. Slowdown was also witnessed in smaller segments
of the industry. In 2QFY14, the full scale impact of RBI's liquidity tightening measures
is likely to be evident. In 1QFY14 post results conference calls, several companies had
informed that they were forced to stop work on certain project sites due to delayed
payments from customers. With further liquidity tightening, we expect increase in
pile up of retention money, leading to increased debtors and stretched working capital.
(BHEL: 1QFY14 debtors ~INR40b, of which retention money was INR22b).
ABB
BHEL
Crompton Greaves
Cummins India
Havells India
Larsen & Toubro
Mega projects fail to get response, IDPL does cherry picking: Considering the strong
sectoral headwinds and ongoing issues with existing projects, developers' appetite
for mega projects is at its nadir. 2QFY14 witnessed annulment of RFQ for the 4,000MW
Orissa UMPP, which would be re-bid along with Cheyyur UMPP in Tamil Nadu on DFBOT
basis as per revised bidding norms. In all, three mega projects - two UMPPs of 4,000MW
each in Orissa and Tamil Nadu, and the Elevated Rail Corridor Project between
Churchgate and Virar in Mumbai (estimated value: INR210b) have invited EoIs from
developers. However, positive impact of lower competitive intensity was seen in
terms of L&T IDPL getting quality projects at higher IRRs (L2 price 12% higher). L&T
IDPL was able to bag its first power transmission line project from NTPC for its Kudgi
power plant for a consideration of INR13.5b with an annuity of INR1.96b for a period
of 35 years, representing an IRR of 19-21%. L&T IDPL also bagged another road project
from the Orissa government, in which it should be able to get an IRR of 19-21%.
(Project details: two-lane to four-lane, 165km, project value INR14.5b, concession 30
years, and DSCR of 1.3x).
Siemens
Thermax
Maintain Neutral rating on sector: For 2QFY14, we expect 5% YoY de-growth across
our Capital Goods coverage universe, with 23% YoY decline in EBITDA and 32% YoY
decrease in PAT. BHEL is likely to report subdued performance in 2QFY14, as well. We
expect 21% YoY decline in revenues, with 43% YoY decrease in EBITDA and 57% YoY
drop in PAT. Cummins India is likely to gain relative to its peers because of its
manufacturing operations in India, which have given an edge over other MNC peers.
Unlike 1QFY14, Havells is unlikely to be impacted by strong base effect in its Fans
business. We expect 6% YoY increase in revenues, with 3% YoY de-growth in PAT.
ABB
BHEL
Crompton Greaves
Cummins India
Havells India
Larsen & Toubro
Siemens
Thermax
Sector Aggregate
CMP
(INR)
27.09.13
551
144
89
409
633
817
480
590
(INR Million)
Rating
Sep.13
Neutral
Neutral
Buy
Buy
Neutral
Buy
Neutral
Buy
18,719
82,437
34,078
9,850
10,250
141,358
25,436
10,715
332,844
Sales
Var.
% YoY
3.5
-20.7
16.5
-9.4
6.3
7.1
-24.6
-10.1
-4.8
Var.
% QoQ
7.5
29.8
7.9
-6.1
-2.5
12.6
-3.7
24.2
13.2
Sep.13
1,062
10,810
1,496
1,523
1,221
14,136
206
1,066
31,520
EBITDA
Var.
% YoY
60.0
-43.1
0.4
-23.8
2.5
0.6
-79.3
-12.4
-22.4
Var.
% QoQ
-3.5
178.2
3.3
-13.2
-13.4
19.8
-84.0
31.0
34.1
Net Profit
Sep.13
Var.
% YoY
361
68.9
5,496
-56.9
679
24.4
1,293
-19.8
846
7.3
8,687
-5.1
-149
PL
726
-20.3
17,938
-32.0
Var.
% QoQ
-10.6
18.1
12.9
-22.2
-17.8
4.5
Loss
44.5
7.5
Satyam Agarwal (AgarwalS@MotilalOswal.com) / Nirav Vasa (Nirav.Vasa@MotilalOswal.com)

October 2013
C14
Impact of INR depreciation is likely to be most evident in the results of Siemens and
ABB because of their dependence on imported raw materials. Thermax's domestic
order inflow is expected to be hit in 2QFY14, given the constrained environment.
However, strong order inflows of INR21.5b in 1QFY14 would help the company meet
our order inflow expectation of INR55b. We remain Neutral on the sector. Our top
picks are Larsen and Toubro, Crompton Greaves, and Thermax.
Order i ntake YoY %
-2
20
20
36
64
3
1QFY14
3QFY13
1QFY13
3QFY12
1QFY12
3QFY11
1QFY11
3QFY10
1QFY10
3QFY09
1QFY09
3QFY08
2QFY09
3QFY09
4QFY09
1QFY10
2QFY10
3QFY10
4QFY10
1QFY11
2QFY11
3QFY11
4QFY11
1QFY12
2QFY12
3QFY12
4QFY12
1QFY13
2QFY13
3QFY13
4QFY13
1QFY14
1QFY08
-56
-15
-18
-22
-12
-16
2051.4
2196.3
2232.0
2340.1
2494.0
2704.9
2888.3
3007.5
3170.5
3199.4
3396.5
3405.4
3471.8
3380.6
3227.8
3318.4
3289.1
3260.9
3168.7
3241.5
-19
-7
-2
22
23
46
41
53
40
13
25
BTB (x)
2.7
2.8
2.6
2.7
2.8
3.0
3.0
3.0
3.1
2.9
2.9
2.9
2.8
2.6
2.4
2.4
2.3
2.3
2.2
2.3
Order book (INR bn)
95
Expect muted domestic order inflows in 2QFY14, as well
Domestic project execution impacted in constrained environment
8.5
11.7
8.7
12.1
9.6
13.5
11.5
15.4
8.2
11.6
9.1
13.4
10.6
16.1
11.9
16.5
8.9
13.3
9.7
14.3
10.2
15.2
10.5
15.8
8.4
12.0
8.5
12.2
9.1
13.0
12.1
17.7
8.3
10.9
7.9
12.1
7.8
11.2
11.0
15.8
6.1
7.6
1QFY14 -4.0
3QFY13
1QFY13
3QFY12
1QFY12
EBITDA Ma rgi n (%)
1QFY09
2QFY09
3QFY09
4QFY09
1QFY10
2QFY10
3QFY10
4QFY10
1QFY11
2QFY11
3QFY11
4QFY11
1QFY12
2QFY12
3QFY12
4QFY12
1QFY13
2QFY13
3QFY13
4QFY13
1QFY14
24.0
30.4
Net Profi t Margi n (%)
15.1
15.3
17.7
16.3
19.5
15.0
6.2
2.9
1.2
3QFY11
16.0
1QFY11
3QFY10
1QFY10
3QFY09
1QFY09
3QFY08
1QFY08
3QFY07
1QFY07
3QFY06
1QFY06
8.9
7.3
4.7
24.7
32.3
29.5
33.2
21.6
31.4
32.5
32.7
39.5
38.0
35.1
32.2
19.1
31.3
28.8
19.7
26.8
Eng Sector (revenue growth %)
Relative Performance - 3m (%)

Sens ex Index
MOSL Ca pi tal Goods Index
110
115
100
100
90
85
80
70
70
Sens ex Index
MOSL Ca pi tal Goods Index
55
Jun-13
October 2013
Jul -13
Aug-13 Sep-13
Sep-12 Dec-12 Mar-13 Jun-13 Sep-13
C15
CMP (INR)
27.09.13
Capital Goods
ABB
BHEL
Crompton Greaves
Cummins India
Havells India
Larsen & Toubro
Siemens
Thermax
Sector Aggregate
October 2013
551
144
89
409
633
817
480
590
Rating
EPS (INR)
FY13 FY14E FY15E
P/E (x)
FY13 FY14E FY15E
EV/EBITDA (x)
FY13 FY14E FY15E
RoE (%)
FY13 FY14E FY15E
Neutral
Neutral
Buy
Buy
Neutral
Buy
Neutral
Buy
6.5
26.8
3.0
23.8
34.4
53.4
0.8
27.0
84.9
5.4
29.8
17.1
18.4
15.3
565.7
21.8
12.7
35.3
3.0
18.3
12.4
12.6
10.4
64.5
13.4
8.3
5.4
23.5
-1.0
29.7
29.8
16.2
0.8
18.4
17.7
8.2
16.9
5.6
21.7
35.5
43.8
7.6
26.2
11.5
10.2
8.3
24.7
39.3
51.5
20.2
31.3
66.8
8.5
15.9
18.8
17.8
18.7
63.6
22.5
16.0
47.9
14.1
10.7
16.5
16.1
15.9
23.7
18.8
16.0
25.9
4.6
10.2
14.8
12.2
10.1
25.9
13.0
9.3
21.4
5.0
7.5
12.7
10.1
9.1
12.3
10.7
9.0
6.6
13.0
9.6
24.0
25.5
14.6
6.6
15.9
12.8
8.8
7.3
13.8
25.3
23.5
14.4
16.6
17.4
12.0
C16
ABB
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
ABB IN
211.9
117 / 2
830 / 448
7 / 8 / -36

Y/E December
Net Sales
EBITDA
Adj PAT
Adj EPS (INR)
EPS Gr (%)
BV/Sh (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2012 2013E 2014E

75.7 76.9 82.3
3.4
4.7
5.7
1.4
1.7
2.4
6.5
8.2 11.5
-25.5 27.1 39.4
122.6 127.0 134.6
5.4
6.6
8.8
5.7
7.1
8.8
53.8 40.0 30.0
127.4
6.7
52.6
0.4
66.8
4.3
25.9
0.7
47.9
4.1
21.4
0.7
2015E
92.4
6.8
3.4
16.0
39.0
145.0
11.4
10.1
30.0
34.5
3.8
17.5
1.0
CMP: INR551
Neutral
Though we expect gradual improvement, profitability will remain

muted, particularly in Project businesses, impacted by higher
competitive intensity, slower execution and low margin fixed price
contracts. Also, the benefit of softening commodity prices has largely
been negated by INR depreciation - 40% of the raw material
consumption is imported, largely from parent.
The order book currently stands at INR82.3b, down 9% YoY. ABB has
not received any meaningful large order in the last 12 months. We
expect order intake to grow 12% in CY13 over a low base.
There are signs of increasing pressure on working capital due to
tightening liquidity conditions; long cycle businesses in Power Systems
and Process Automation have high contractual retention. Debt has
grown from INR3.3b to INR5b in December 2012 and correction is likely
to take some time.
In 2QCY13, the project business had reported positive EBIT; watch for
sustainability of the same.
Order intake during the quarter, particularly large projects, as demand
environment is tough.
Profit margins are likely to be impacted by adverse currency
movement (INR depreciation). Imports constitute ~39% of material
consumption. While Power Products benefit from a depreciating INR,
given increased share of exports, Discrete and Process Automation
segments are impacted due to higher share of imports.
(INR Million)
Y/E December
Sales
Change (%)
EBITDA
Change (%)
As % of Sales
Adjusted EBITDA (%)
Depreciation
Interest
Other Income
PBT
Tax
Repoted PAT
Adj. PAT
Change (%)
Order Intake
Order Book
BTB (x)
E: MOSL Estimates
October 2013
CY12
1Q
17,903
(0.3)
975
-4.0
5.4
6.2
223
54
19
716
240
33.5
476
476
-20.0
16,320
90,280
1.2
2Q
18,838
10.0
1,060
24.0
5.6
4.6
231
77
14
766
250
32.6
516
516
33.2
20,450
91,892
1.2
3Q
18,086
3.7
664
-0.4
3.7
4.3
240
117
10
316
102
32.4
214
214
-3.6
16,800
90,606
1.2
CY13
4Q
20,823
(5.3)
666
-38.4
3.2
5.2
246
185
28
263
96
36.4
168
168
-73.8
15,790
86,720
1.1
1Q
19,700
10.0
1,065
9.2
5.4
5.4
246
198
14
636
210
33.0
426
426
-10.7
15,310
82,290
1.1
2Q
17,416
(7.5)
1,100
3.8
6.3
6.3
259
266
38
612
209
34.1
403
403
-21.9
17,310
82,350
1.1
3QE
18,719
3.5
1,062
60.0
5.7
4QE
21,070
1.2
1,473
121.2
7.0
264
275
20
543
182
33.5
361
361
68.9
20,160
82,272
1.1
327
312
2
837
280
33.4
557
557
232.1
24,904
82,265
1.1
CY12
CY13E
75,650
1.2
3,365
-7.0
4.4
5.1
941
432
71
2,062
688
33.4
1,374
1,374
-25.5
69,660
86,720
1.1
76,906
1.7
4,700
39.7
6.1
1097
1,050
74
2,627
881
33.5
1,747
1,747
27.1
77,684
82,265
C17
BHEL
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
BHEL IN
2,447.6
352 / 6
272 / 100
19 / -23 / -48

Y/E March
2012 2013
Net Sales
479.8 484.2
EBITDA
99.1 93.9
Adj PAT
68.9 65.5
EPS (INR)
28.2 26.8
EPS Gr. (%)
21.7 (4.9)
BV/Sh. (INR)
103.7 124.4
RoE (%)
30.3 23.5
RoCE (%)
33.0 24.5
Payout (%)
22.3 20.0
Valuations
P/E (x)
11.5
5.4
P/BV (x)
3.1
1.2
EV/EBITDA (x)
7.3
3.0
Div Yield (%)
4.4
3.8
Consolidated
2014E
393.8
66.6
41.3
16.9
(37.0)
135.3
13.0
13.7
30.0
2015E
315.0
40.3
24.9
10.2
(39.6)
141.9
7.3
8.0
30.0
8.5
1.1
4.6
3.5
14.1
1.0
5.0
2.1
CMP: INR144
Neutral
Recovery in the pace of project execution is likely to remain sluggish

in 2QFY14 because of multiple headwinds like lack of clarity on fuel
availability, shrinking peak demand deficit (as a result of lower growth
rates), etc. We understand that ~20% of BHEL's order book, largely
from the private sector, is non-moving / slow-moving in nature. Thus,
we expect revenues to decline 21% in 2QFY14, similar to the 24%
decline in 1QFY14.
EBITDA margin had declined to a historical low of 6% in 1QFY14, which
was also an aberration. However, we expect margins to remain under
pressure, given poor fixed cost absorption. We estimate EBITDA
margin at 13.1% (down 490bp YoY) for 2QFY14.
Order inflow for 1QFY14 was just INR14.7b (down 73% YoY), which
included orders for equipment like electrostatic precipitators, solar
power projects, etc. Considering the strong sector headwinds, we
expect the pace of order inflows to remain under pressure in 2QFY14,
as well. Larsen and Toubro (LT) has emerged as L1 in Malwa 1,320MW
project, and competition remains intense.
Order intake remains impacted, both for Power and Industry
segments.
Release of retention money (INR220b at the end of 1QFY14 from
debtors of ~INR400b on FY13 revenue base of INR502b).
(INR Million)
Y/E March
Sales (Net)
Change (%)
EBITDA
As a % Sales
Adjusted EBITDA
Change (%)
As a % Sales
Interest
Depreciation
Other Income
PBT
Tax
Reported PAT
Change (%)
Adj. PAT
Change (%)
Order intake
Order book (INRb)
BTB (x)
E: MOSL Estimates
October 2013
FY13
1Q
83,262
16.9
12,022
14.4
12,022
41.0
14.2
55
2,284
3,663
13,346
4,137
31.0
9,209
12.9
9,209
12.9
55,900
1,330
2.7
2Q
103,996
1.0
18,995
18.3
18,995
12.0
18.0
259
2,163
1,307
17,880
5,135
28.7
12,745
-9.7
12,745
-0.9
31,530
1,223
2.5
3Q
100,417
-4.8
16,341
16.3
16,341
-12.6
16.3
509
2,200
3,324
16,955
5,139
30.3
11,816
-17.5
11,816
-17.5
19,500
1,137
2.4
4Q
188,502
-2.2
46,512
24.7
46,512
-3.2
24.7
405
2,889
2,924
46,142
13,766
29.8
32,375
-4.2
32,375
-3.6
209,570
1,152
2.4
1Q
63,526
-23.7
3,886
6.1
3,886
-67.7
6.1
278
2,308
5,385
6,685
2,031
30.4
4,654
-49.5
4,654
-49.5
14,690
1,086
2.4
FY14
2QE
3QE
82,437
86,002
-20.7
-14.4
10,810
12,586
13.1
14.6
10,810
12,586
-43.1
-23.0
13.1
14.6
678
714
2,336
2,376
1,250
1,100
9,046
10,597
2,940
3,444
32.5
32.5
6,106
7,153
-52.1
-39.5
5,496
6,542
-56.9
-44.6
50,000
75,000
1,054
1,043
2.4
2.4
4QE
153,678
-18.5
39,289
25.6
39,289
-15.5
25.6
1,186
3,637
330
34,796
11,436
32.9
23,360
-27.8
22,750
-29.7
124,479
1,014
2.6
FY13
FY14E
476,177
0.8
93,894
19.7
93,894
-3.3
19.7
1,253
9,534
11,217
94,324
28,177
29.9
66,148
-6.0
65,537
-4.9
316,500
1,152
2.4
385,643
-19.0
66,571
17.3
66,571
-29.1
17.3
2,855
10,657
8,065
61,124
19,851
32.5
41,273
-37.6
40,663
-38.0
264,169
1,014
2.6
C18
Crompton Greaves
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
CRG IN
641.5
57 / 1
142 / 72
1 / -9 / -35

Y/E March
2012 2013 2014E
Net Sales
112.5 120.9 137.5
EBITDA
8.0
3.8
7.0
Adj PAT
3.7
1.9
3.6
EPS(INR)
5.8
3.0
5.6
EPS Gr. (%)
(59.7) (48.4) 87.3
BV/Sh. (INR)
56.3 55.5 60.2
RoE (%)
10.7 (1.0)
9.6
RoCE (%)
9.8
2.8
8.0
Payout (%)
20.7 20.1 20.0
Valuations
P/E (x)
15.3 29.7 15.8
P/BV (x)
3.0
1.6
1.5
EV/EBITDA (x)
13.6 16.9
9.3
Div Yield (%)
1.6
1.3
1.3
Consolidated
2015E
147.8
9.5
5.3
8.3
48.1
59.6
13.8
10.8
20.0
10.7
1.5
6.5
1.4
CMP: INR89
Buy
We expect standalone revenues to grow just 2.3% in 2QFY14, impacted

by expectations of 5% YoY decline in Industrial business and muted
3% growth in Power segment. EBITDA margin is likely to be 7.6% (down
120bp QoQ), impacted by poor cost absorption.
We expect overseas operations to turn around in 2Q (EBITDA margin
at 1.1%). In EUR terms, revenue growth would be 10% YoY (in INR
terms, growth would be 36% YoY). In 1QFY14, EBITDA was -0.6%,
impacted by (1) lower capacity utilization of just 65% in Belgium, and
(2) EUR3m-4m revenue impact in Hungary due to floods. We
understand that utilization rates in Belgium have improved. Canada
losses are expected to be maintained at INR300m in 2QFY14 (similar
QoQ).
In the domestic Power segment, order intake is likely to be robust,
driven by pick-up in ordering from SEBs. Revenues in Consumer
business had bounced back in 1QFY14 to 21% YoY and sustainability of
the same would be watched for.
Losses in Canada, which stood at INR300m in 1QFY14. Also, liquidated
damages are an important swing factor.
Margins in Belgium and Hungary, given that production in 2QFY14 is
expected to be at optimum levels.
Margins in exports, particularly from Kanjurmarg transformer factory.
The company will be a key beneficiary of the INR depreciation.
Quarterly performance (Consolidated)
(INR Million)
Y/E March
Sales (Net)
Change (%)
EBITDA
Change (%)
Adjusted EBITDA
As of % Sales (Adj)
Depreciation
Interest
Other Income
EO Income/(Exp)
PBT
Tax
Minority interest
Reported PAT
Adjusted PAT
Change (%)
Order book
Order Intake
BTB (x)
E: MOSL Estimates
October 2013
FY13
1Q
28,111
15.3
1,668
-8.3
1,793
6.4
466
99
192
0
1,294
445
34.4
-9.6
859
984
23.8
91,720
27,170
0.8
2Q
29,242
8.1
1,365
-39.6
1,490
5.1
544
190
208
0
838
414
49.4
4.2
420
545
(53.3)
94,000
25,750
1.0
3Q
29,718
-1.9
20
-98.9
850
2.9
566
213
304
1,207
-1,662
228
-13.7
-1.4
-1,888
149
(80.7)
92,320
22,570
0.8
4Q
33,873
10.1
779
-63.4
779
2.3
453
208
51
0
169
-78
-45.9
-5.7
253
253
(74.8)
91,250
29,830
1.0
1Q
31,572
12.3
1,448
-13.2
1,448
4.6
527
201
353
0
1,072
464
43.3
7.5
601
601
(38.9)
97,700
24,410
0.8
FY14
2QE
3QE
34,078
34,233
16.5
15.2
1,496
1,878
9.6
1,496
1,878
4.4
5.5
590
605
325
325
280
335
0
0
861
1,283
192
285
22.3
22.2
-10.0
-10.0
679
1,008
679
1,008
24.4
578.1
89,729
91,496
25,000
29,000
0.7
0.7
4QE
37,591
11.0
2,218
184.7
2,218
5.9
596
343
276
0
1,555
262
16.8
-27.5
1,321
1,321
422.7
93,905
33,000
0.7
FY13
FY14E
120,944
77.0
3,832
-48.6
4,912
4.1
2,029
709
754
1,207
640
1,009
157.5
-7.3
-361
1,926
(51.5)
91,250
105,450
0.8
137,474
13.7
7,039
83.7
7,039
5.1
2,318
1,110
1,160
0
4,771
1,203
25.2
-40.0
3,608
3,608
87.4
93,905
33,000
0.7
C19
Cummins India
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
KKC IN
277.2
113 / 2
550 / 365
-4 / -23 / -23

Y/E March
Net Sales
EBITDA
Adj PAT
EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div Yield (%)
2012
41.2
7.0
5.5
19.8
(6.9)
73.5
28.8
28.8
64.2
2013 2014E
45.9 42.2
8.3
7.0
6.6
6.0
23.8 21.7
20.1 (8.8)
87.3 93.8
29.7 24.0
29.8 24.2
58.9 70.0
20.6
5.6
16.3
2.5
17.1
4.7
14.8
2.5
2015E
46.2
8.1
6.9
24.7
13.8
101.6
25.3
25.5
68.6
18.8
4.4
14.8
3.2
16.5
4.0
12.8
3.5
CMP: INR409
Buy
Domestic powergen demand had declined 25% in 1QFY14; we expect

~33% decline in 2QFY14. This is on the back of a strong 27% demand
growth in FY13. The demand decline is led by improved power
availability, tight liquidity conditions, etc.
Export revenues had declined 34% in 1QFY14, led by high base effect,
particularly for the high horsepower (HHP) segment. In 2QFY14, we
expect export revenues to improve 11% YoY.
Pig iron prices have been largely stable QoQ and are down ~16% YoY.
Based on our channel checks, we understand that HHP engines have
witnessed price increases of 5-10% in the last two months, given the
currency volatility. For KKC, we expect raw material costs to decline to
62.1% in 2QFY14 from 62.4% in 1QFY14. However, EBITDA margin is
likely to decline to 15.5% (down 130bp QoQ), led by poor operating
leverage.
KKC's genset original equipment manufacturers (GOEMs) have tied
up with L&T Finance for financing purchases, which should lead to
market share gains.
HHP exports are showing signs of bottoming out and demand recovery
in US could be positive.
Producer pricing arrangement has been revised, and now the currency
reset is every year v/s the earlier practice of reset post three years.
Quarterly Performance (Standalone)
(INR Million)
Y/E March
Sales
Change (%)
EBITDA
Change (%)
As of % Sales
Depreciation
Interest
Other Income
Extra-ordinary Items
PBT
Tax
Reported PAT
Change (%)
Adjusted PAT
Change (%)
Operational Details
Domestic Sales
Change (%)
Exports
Change (%)
E: MOSL Estimates
October 2013
FY13
1Q
12,588
21.8
2,325
33.7
18.5
114
14
385
0
2,583
777
30.1
1,806
1.9
1,806
32.7
2Q
10,869
-0.3
1,999
13.6
18.4
117
13
338
0
2,207
596
27.0
1,611
25.3
1,611
25.3
3Q
10,895
13.2
2,086
29.4
19.1
118
9
661
475
3,096
755
24.4
2,341
66.1
1,817
28.9
4Q
11,543
10.9
1,939
-0.5
16.8
124
11
824
0
2,628
742
28.2
1,886
30.4
1,494
3.3
1Q
10,493
-16.6
1,756
-24.5
16.7
117
12
668
0
2,294
632
27.6
1,662
-8.0
1,662
(8.0)
8,210
10.1
4,210
52.4
7,650
(0.5)
3,030
0.7
8,223
21.3
2,490
(5.9)
8,320
20.2
2,960
(10.0)
7,550
(8.0)
2,737
(35.0)
FY14
2QE
3QE
9,850
10,700
-9.4
-1.8
1,523
1,887
-23.8
-9.5
15.5
17.6
125
140
15
15
400
550
0
0
1,783
2,282
490
650
27.5
28.5
1,293
1,632
-19.8
-30.3
1,293
1,632
(19.8)
(10.2)
6,275
(18.0)
3,350
10.6
7,750
(5.8)
2,750
10.4
FY13
FY14E
4QE
11,108
-3.8
1,845
-4.8
16.6
183
18
364
0
2,008
570
28.4
1,439
-23.7
1,439
(3.7)
45,894
11.5
8,349
19.7
18.2
473
46
2,067
616
10,513
2,872
27.3
7,641
29.2
6,606
20.1
42,151
-8.2
7,011
-16.0
16.6
565
60
1,982
0
8,368
2,343
28.0
6,025
(21.2)
6,025
(8.8)
7,409
(10.9)
3,446
16.4
32,400
12.5
12,690
8.3
-1,769
(9.8)
12,056
(5.0)
C20
Havells India
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
HAVL IN
124.8
79 / 1
817 / 557
-6 / -7 / -4

Y/E March
Net Sales
EBITDA
Adj PAT
Adj EPS (INR)
EPS Gr. (%)
BV/Share (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div Yield (%)
Consolidated
2012
65.2
6.6
4.3
34.1
64.6
76.6
44.5
26.4
25.5
2013 2014E
72.5 76.1
6.7
6.7
4.3
4.4
34.4 35.5
1.0
3.1
99.2 139.3
29.8 25.5
21.4 19.9
28.3 30.7
18.6
8.3
8.9
1.0
18.4
6.4
11.9
1.2
17.8
4.5
12.2
1.4
2015E
81.6
7.7
4.9
39.3
10.7
166.9
23.5
19.2
29.8
16.1
3.8
10.1
1.6
CMP: INR633
Buy
Sharp decline in standalone revenue growth to just 2% YoY in 1QFY14

was a negative surprise; Consumer business growth was just 7% YoY.
In 2QFY14, we expect growth in Consumer business to remain subdued
at 10-11%, as consumption demand has weakened further and the
slowdown is more pronounced in the 'premium' category. Reported
revenue should grow 6% YoY.
We expect EBITDA margin to decline to 11.9% in 2QFY14, down 45bp,
largely a result of volatile input costs, given the sharp currency
movements. While we understand that part of the cost increases have
been passed on, margins could be impacted due to timing differences.
For Sylvania, Europe is showing signs of stabilization, with revenue
decline of just 1% YoY in 1QFY14. Macro data points suggest some pickup in construction spending. However, LatAm is impacted by sharp
currency volatility, particularly in Brazil and Argentina.
'Price-volume' trade-off in domestic market, particularly given the
increased competitive intensity in specific segments.
Revenue growth in Fans business, which was largely flat in 1QFY14.
Revenues from Reo and financial targets post the launch of pumps.
Margins in LatAm, given the sharp currency volatility in few countries.
(INR Million)
Y/E March
Sales
Change (%)
Adj EBITDA
Change (%)
Adj EBITDA margin (%)
Depreciation
Interest
Other Income
PBT
Tax
Reported PAT
Change (%)
Adj PAT
Change (%)
E: MOSL Estimates
October 2013
FY13
1Q
10,328
25.4
1,281
44.1
12.4
118
102
28
1,004
204
20.3
800
23.5
880
55.5
2Q
9,642
13.4
1,192
9.5
12.4
159
99
20
1,054
185
17.5
870
23.8
789
6.5
3Q
10,584
17.8
1,399
15.2
13.2
146
58
15
1,173
227
19.3
947
20.0
976
17.6
4Q
11,696
11.7
1,460
2.1
12.5
156
26
34
1,342
243
18.1
1,099
20.0
1,075
5.3
1Q
10,513
1.8
1,411
10.1
13.4
156
56
32
1,154
207
18.0
947
18.3
1,029
16.9
FY14
2QE
3QE
10,250
11,600
6.3
9.6
1,221
1,412
2.5
0.9
11.9
12.2
165
168
25
25
40
45
1,071
1,264
225
265
21.0
21.0
846
998
-2.7
5.5
846
998
7.3
2.3
4QE
12,983
11.0
1,624
11.2
12.5
176
19
83
1,513
253
16.7
1,260
14.7
1,260
17.2
FY13
FY14E
42,250
16.9
5,331
17.0
12.6
579
286
96
4,571
858
18.8
3,713
21.3
3,720
21.8
45,346
7.3
5,591
4.9
12.3
665
125
200
5,002
950
19.0
4,051
9.1
4,134
11.1
C21
Larsen & Toubro

Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
LT IN
923.1
755 / 12
1,146 / 678
6 / -15 / -29

Y/E March
2012 2013 2014E
Sales
537.4 614.7 664.8
EBITDA
62.6 63.9 67.3
Adj PAT *
47.7 49.3 40.4
EPS (INR)*
52.0 53.4 43.8
EPS Gr. (%)
11.9
2.8 -18.0
BV/Sh (INR)
274.6 315.7 349.4
RoE (%)
18.0 16.2 14.6
RoCE (%)
14.3 14.4 12.5
Payout (%)
25.0 24.9 32.9
Valuations
P/E (x)*
18.5 18.3 18.7
P/BV (x)
3.5
3.1
2.3
EV/EBITDA (x)
14.3 14.4 11.9
Div Yield (%)
1.1
1.3
1.7
* Consolidated
2015E
745.5
73.6
47.5
51.5
17.5
387.1
14.4
12.5
32.3
15.9
2.1
11.0
1.9
CMP: INR817
Buy
Larsen and Toubro (LT) has announced order intake of INR239b in

2QFY14, including INR82b from Riyadh Metro and INR20b from Bathinah
Expressway in Oman. Domestic orders were constrained at INR121b
v/s an average of INR160b in the last two quarters. Given the tight
liquidity conditions, volume of orders bagged is still commendable.
Overseas projects are likely to contribute 25% of the intake in FY14.
Large Infrastructure projects under bidding include: Doha Metro
Project (Phase-2), Etihad Rail, Water Infrastructure, Highways /
Interchanges, Power T&D, etc. LT is favorably positioned in few large
tenders (also gleaned from media articles): Malwa EPC 1,320MW, NTPC
Tanda 1,320MW Boiler, Power T&D in Qatar, few road projects in ME,
Fertilizer project in India, etc.
We expect EBITDA margin to decline by 70bp in 2QFY14. However, as
the share of domestic revenue increases during the year, margins are
likely to improve in 2H.
Revision in FY14 guidance: We believe that while order intake growth
guidance could be maintained at 20% (supported by overseas
projects), achieving revenue (+15%) and margin (flat) guidance would
be challenging.
Net working capital continues to be under pressure due to tightening
liquidity and increased vendor support in a tough market.
Asset monetization plans and attempt to correct the capital structure.

Y/E March
(INR Million)
FY13
1Q
2Q
3Q
Net Sales
119,554 131,952 154,294
Change (%)
26.1
17.4
10.3
EBITDA
10,847
14,054
14,620
Change (%)
-3.7
15.5
6.9
Margin (%)
9.1
10.7
9.5
Adjusted EBITDA
12,447
14,054
15,870
Change (%)
10.5
15.5
1.2
Adjusted Margin (%)
10.4
10.7
10.3
Depreciation
1,919
2,040
2,004
Interest
2,284
2,350
2,380
Other Income
6,081
3,294
5,431
Extraordinary Inc/(Exp)
-383
2,672
0
Reported PBT
12,341
15,630
15,668
Tax
3,705
4,257
4,450
30.0
27.2
28.4
Reported PAT
8,636
11,373
11,218
Adjusted PAT
10,025
9,151
10,393
Change (%)
34.4
14.6
-7.8
Order Intake
196
210
195
Order book (INR b)
1,531
1,585
1,623
BTB (x)
2.8
2.8
2.7
E: MOSL Estimates; MTM Forex loss in 3QFY12 of INR2b
October 2013
4Q
202,938
9.9
24,509
-1.5
12.1
25,759
-4.2
12.1
2,222
2,810
3,744
187
23,408
5,528
23.6
17,880
17,758
-1.5
279
1,536
2.5
1Q
125,551
5.0
10,715
-1.2
8.5
11,795
-5.2
9.4
2,103
2,453
4,726
0
10,885
3,325
30.5
7,560
8,316
-17.0
252
1,654
2.7
FY14
2QE
3QE
141,358 168,315
7.1
9.1
14,136
17,252
0.6
18.0
10.0
10.3
14,136
17,252
0.6
8.7
10.0
10.3
2,150
2,250
2,750
3,000
3,000
3,500
0
0
12,236
15,502
3,548
4,496
29.0
29.0
8,687
11,007
8,687
11,007
-5.1
5.9
250
200
1,761
1,791
2.8
2.8
4QE
223,106
9.9
25,171
2.7
11.3
25,171
-2.3
11.3
2,286
3,297
5,217
0
24,804
5,726
23.1
19,079
19,079
7.4
190
1,756
2.7
FY13
FY14E
608,733
14.5
64,071
2.0
10.5
66,071
1.9
11.0
8,185
9,824
18,509
2,475
67,046
17,940
26.8
49,106
47,327
5.6
880
1,536
2.5
658,329
8.1
67,274
5.0
10.2
67,274
1.8
10.4
8,789
11,500
16,443
0
63,428
17,125
27.0
46,302
47,058
-0.6
891
1,756
2.7
C22
Siemens
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
SIEM IN
352.0
169 / 3
750 / 414
-1 / -17 / -38

Y/E September
Net Sales
EBITDA
Adj PAT
Adj EPS (INR)
EPS Gr (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2012 2013E 2014E

129.2 106.4 107.8
8.9
2.5
5.8
5.0
0.3
2.7
14.8
0.8
7.6
-40.5 -94.3 789.9
116.4 113.0 116.8
12.9
0.8
6.6
14.3
5.4
7.6
48.8 49.7 49.7
32.5 565.7
4.1
4.2
17.4 62.9
0.8
0.1
63.6
4.1
25.2
0.7
2015E
125.3
12.6
7.1
20.2
168.0
127.0
16.6
18.4
49.7
23.7
3.8
12.0
1.8
CMP: INR480
Neutral
We expect revenues to decline 25% YoY in 4QFY13, impacted by delays

in offtake by customers, sluggish industrial capex and depletion of
order book (BTB at just 1.1x) because of macro headwinds.
Profit margins have been impacted by cost escalations. We expect
margins to remain under pressure due to pricing pressure and slower
execution in the Power business. In 3QFY13, the company made
provisions on projects (for cost/time overruns) of INR1,354m; we have
not factored in these provisions as exceptional, as they pertain to
normal business operations.
Weak INR would have a negative impact on profit margins, as raw
material imports are ~40% of revenues.
EBITDA margin would be a key factor to watch for. SIEM's earnings
have historically been volatile, impacted by multiple factors.
Order intake had surprised positively in 2QFY13, supported by few
large orders; sustainability of the same would be a key positive. SIEM
has bagged various orders from Delhi Metro Rail Corporation in
4QFY13, which could be an important contributor.
Segmental working capital appears to be under pressure and would
be closely watched due to tightening liquidity.
Profit margins are likely to be adversely impacted by unfavorable
currency movement (INR depreciation).

Y/E September
(INR Million)
FY12
1Q
2Q
3Q
Total Revenues
25,004
40,171
30,186
Change (%)
-3.1
28.7
8.5
EBITDA
1,132
5,445
1,298
As % of Revenues
4.5
13.6
4.3
Adjusted EBITDA
1,132
3,336
1,298
As % of Revenues
4.5
8.3
4.3
Depreciation
445
487
519
Interest Income
-30
-76
-122
Other Income
235
120
551
240
PBT
893
5,432
1,018
Tax
291
1,444
175
32.6
26.6
17.2
Reported PAT
602
3,988
843
Adjusted PAT
602
3,361
530
Change (%)
-74.7
22.5
-65.7
Order Intake (INR b)
28
18
27
Order book (INR b)
140
126
124
BTB (x)
1.2
1.0
1.0
E: MOSL Estimates; Adj EBITDA: Adjusted for change in project
October 2013
FY13
4Q
33,752
-4.6
995
2.9
995
2.9
559
-66
126
1,208
1,704
-154
-9.1
1,858
409
-77.0
29
137
1.1
revenues
1Q
2Q
3Q
24,962
29,556
26,426
-0.2
-26.4
-12.5
1,556
754
-62
6.2
2.6
-0.2
1,841
1,654
1,292
7.4
5.6
4.9
588
610
626
-87
-84
-39
69
125
26
0
0
0
951
185
-701
314
-115
-213
33.0
-62.3
30.4
636
300
-488
636
300
-488
5.8
-91.1
-192.1
20
28
26
132
130
130
1.0
1.1
1.2
and cost estimates
4QE
25,436
-24.6
206
0.8
206
0.8
382
-340
180
0
-335
-186
55.5
-149
-149
-136.5
36
142
1.4
FY12
FY13E
129,199
7.4
8,913
6.9
8,913
6.9
2,010
-269
575
1,999
9,208
1,777
19.3
7,431
5,032
-40.5
102
137
1.1
106,380
-17.7
2,455
2.3
2,206
-550
400
0
99
-200
-202.6
299
299
-94.1
111
142
1.3
C23
Thermax
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
TMX IN
119.2
70 / 1
684 / 526
-4 / -1 / 0

Y/E March
Net Sales
EBITDA
Adj PAT
EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (X)
P/BV (X)
EV/EBITDA (X)
Div Yield (%)
2012 2013 2014E

60.3 54.3 54.7
5.9
5.0
4.9
4.0
3.2
3.1
33.9 27.0 26.2
5.7 (20.2) (2.9)
139.9 160.0 175.8
27.4 18.4 15.9
22.9 14.8 13.3
20.7 25.9 34.3
15.1
3.7
9.2
1.4
20.2
3.4
12.3
1.3
22.5
3.4
13.0
1.5
2015E
61.4
5.9
3.7
31.3
19.5
191.9
17.4
15.3
41.5
18.8
3.1
10.7
2.2
CMP: INR590
Buy
The domestic ordering environment remains muted, particularly given

the tight liquidity conditions. In 1QFY14, excluding the Reliance order,
domestic order intake was just INR5.2b and compares with an average
of INR9b-11b/quarter during April-December 2012.
Execution is likely to remain constrained, particularly for the Energy
business. In 2QFY14, we expect Energy business revenues to decline
12% YoY and Environment business revenues by 4% YoY.
Increasing exports is a priority across businesses. The Chairperson
stated in the recent issue of Fireside, "We have to continue to focus
on the export market and try and make up for the shortfalls in domestic
order bookings".
Consolidated PAT has been impacted by losses in subsidiaries (down
21% in FY13). However, in 1QFY14, subsidiaries reported PAT of INR27m
(after seven consecutive quarters of losses), largely driven by
improved performance in Danstoker and lower losses in Chinise
subsidiaries (expect PAT breakeven by the end of FY14).
Order intake remains constrained, also for standard products. Exports
are an important focus area and increasing trend will be a positive.
Subsidiaries' profit had shown signs of improvement in 1QFY14.
EBITDA margins have been outperforming expectations despite
decline in sales, benefiting from softening commodity prices and
cost efficiency measures. However, maintaining these at current
levels would be challenging.
(INR Million)
Y/E March
Sales
Change (%)
EBITDA
Change (%)
As of % Sales
Depreciation
Interest
Other Income
PBT
Tax
Reported PAT
Adj PAT
Change (%)
Order Book
Order Intake
BTB (x)
E: MOSL Estimates
October 2013
FY13
1Q
9,835
-5.8
964
-15.1
9.8
132
37
187
981
309
31.5
672
672
-15.9
44,740
12,580
0.9
2Q
11,924
-8.5
1,218
-13.3
10.2
139
34
274
1,318
407
30.9
911
911
-10.4
44,120
11,620
0.9
3Q
10,468
-17.5
1,119
-18.0
10.7
133
20
124
1,090
326
29.9
764
764
-20.1
46,490
12,840
0.9
4Q
14,682
-13.0
1,672
-9.7
11.4
145
5
244
1,767
614
34.7
1,153
1,153
-11.2
43,358
11,550
1.2
1Q
8,628
-12.3
814
-15.5
9.4
142
8
81
745
243
32.6
503
503
-25.2
55,300
21,230
1.2
FY14
2QE
3QE
10,715
11,059
-10.1
5.6
1,066
1,048
-12.4
-6.3
10.0
9.5
146
152
23
25
150
200
1,048
1,072
322
329
30.7
30.7
726
743
726
743
-20.3
-2.8
53,735
56,224
9,150
13,548
1.2
1.2
4QE
15,788
7.5
1,813
8.4
11.5
167
44
245
1,847
567
30.7
1,280
1,280
11.0
54,001
11,963
1.2
FY13
FY14E
46,909
-11.6
5,071
-13.1
10.8
549
96
730
5,156
1,657
32.1
3,500
3,500
-14.0
43,358
48,590
0.9
46,189
-1.5
4,742
-6.5
10.3
607
100
677
4,711
1,446
30.7
3,265
3,265
-6.7
54,001
55,890
1.2
C24
September 2013 Results Preview | Sector: Cement
Cement
Companies Covered
Demand continues to remain weak, utilization falls to lowest levels
ACC
Cement demand growth is expected to remain sluggish in 2QFY14, impacted by

continued weakness in housing and infrastructure vertical and seasonal impact of
monsoon. We estimate growth of 1.3% YoY (-8% QoQ) in 2QFY14 and ~3% for FY14.
Capacity utilization is expected to decline YoY (-3pp YoY/9% QoQ) at 66% - lowest
levels in last 13 years. Our interactions with dealers across regions highlight limited
visibility in near term demand recovery, although they are hopeful of election impact
to play out in favor of demand uptick in 2HFY14, resulting in 5% volume growth.
Ambuja Cements
Birla Corporation
Grasim Industries
India Cements
Prices have been volatile in 2QFY14; net decline of INR4/bag QoQ

Shree Cement
UltraTech Cement
Weak demand resulted in weaker pricing by ~INR4/bag QoQ (-INR18/bag YoY). Prices
have been volatile over quarters, with upticks in July and slides in August, followed
by a sharp rise in second half of September. This includes specific trends of (a) INR14/
bag QoQ decline in north, (b) INR9/bag decline in east, (c) INR3/bag decline in west
and (d) INR2-4/bag increase in central and south. We factor for YoY stability and INR10/
bag YoY increase in realizations in FY14 and FY15 respectively.
Weaker demand and price to exert pressure on profitability

Profitability is expected to be under pressure in 2QFY14, as lower realizations and
negative operating leverage will be a drag. We estimate EBITDA at ~INR686 (-INR6/bag
QoQ, -INR15/bag YoY for pure cement players). We expect cost pressures from higher
diesel prices and negative operating leverage, impact of which would be diluted by
soft energy prices. On the back of moderation in cost push and potential demand
recovery in 2HFY14, we estimate EBITDA/ton at INR884/998 for FY14/FY15 respectively,
based on ~INR7.5/INR10 per bag QoQ price increases.
Valuation and view

We revise the realizations improvement assumption for FY14/15 at INR0/10 per bag
YoY (v/s earlier estimate of -INR3/15 per bag) to factor (1) relatively lower-thanexpected price decline in 2QFY14 (hence, upgrade in FY14 realizations) and (2) weaker
demand revival visibility (thus, downgrade FY15 realizations). This downgrades our
FY15 EPS estimates by 12-14% for ACC/ACEM/UTCEM/SRCM and ~3.5% for Grasim.
CMP
(INR)
27.09.13
ACC
1,101
Ambuja Cements
184
Birla Corporation
207
Grasim Industries
2,678
India Cements
51
37
Shree Cement
4,004
Ultratech Cement
1,826
Sector Aggregate
(INR Million)
Rating
Sep.13
Buy
Neutral
Buy
Buy
Neutral
Buy
Buy
Buy
24,719
19,904
6,754
12,779
11,406
33,377
11,898
44,866
165,702
Sales
Var.
% YoY
1.7
-8.0
7.6
-4.2
1.6
11.9
-10.1
-4.5
-0.7
Var.
% QoQ
-11.6
-15.1
-12.5
11.2
-7.9
0.7
-17.5
-9.5
-8.0
Sep.13
3,088
3,239
579
2,445
1,866
8,112
2,538
8,180
30,048
EBITDA
Var.
% YoY
-26.7
-42.9
-47.4
-15.6
-9.0
5.2
-35.4
-18.6
-20.2
Var.
% QoQ
-28.8
-34.2
-13.3
20.8
-2.3
3.4
-33.1
-22.0
-16.5
Net Profit
Sep.13
Var.
% YoY
1,840
-26.0
2,099
-37.7
365
-54.5
3,791
-1.0
149
-69.7
804
-37.2
830
-63.7
3,934
-28.5
13,811
-31.1
Var.
% QoQ
-29.0
-35.3
-20.7
67.6
-11.5
287.7
-70.8
-41.5
-25.3
Jinesh K Gandhi (Jinesh@MotilalOswal.com) / Sandipan Pal (Sandipan.Pal@MotilalOswal.com)

October 2013
C25
While demand recovery is expected to be gradual, slowing capacity addition coupled

with higher capex and opex cost would support cement prices and profitability, going
forward. Recovery in demand would be critical for operations and stock's performance.
In large caps, we prefer ACC and Shree Cement, while in mid caps we prefer Birla
Corp, Madras Cement and Dalmia Bharat.
Demand growth flattish YoY in a seasonally strong quarter
Des pa tches (MT)
12.2
10.8
utilization to decline YoY due to unusually weak demand
Growth (%)
100%
10.2 9.0 9.8
9.4 9.3
6.9
4.0
3.2
90%
4.9
6.0
6.1
2.6
5.6
3.3 2.7
0.9
80%
70%
50 46 49 55 53 48 51 58 54 51 56 64 59 54 57 67 61 55
2QFY14E
4QFY13
2QFY13
4QFY12
2QFY12
4QFY11
2QFY11
4QFY10
2QFY10
4QFY09
2QFY09
2QFY14E
1QFY13
2QFY13
3QFY13
4QFY13
1QFY14
2QFY12
3QFY12
4QFY12
1QFY12
4QFY10
1QFY11
2QFY11
3QFY11
4QFY11
1QFY10
2QFY10
3QFY10
60%
Source: CMA/MOSL
320
322
316
307
30
20
10
0
3QFY09
4QFY09
1QFY10
2QFY10
3QFY10
4QFY10
1QFY11
2QFY11
3QFY11
4QFY11
1QFY12
2QFY12
3QFY12
4QFY12
1QFY13
2QFY13
3QFY13
4QFY13
1QFY14
2QFY14
-3
40
North
4QFY13
1QFY14
2QFY14
295
50
262
261
259
245
331
3QFY13
272
12
7.9
8.3
17
2QFY13
Vol ume growth (%)
15.8
13.4
12.4
8.5
11.4
6.4
3.6
4.3
4.0
9.4
10.4
13.8
8.3
2.7
2.0
-2.2
0.7
1.3
Vol umes (MT) - RHS
Trend in average quarterly cement price (INR/bag)
282
283
275
272
303
300
293
289
294
270
264
265
262
264
295
287
286
281
277
MOSL cement universe volumes to grow 1.3% YoY (-8% QoQ)
Eas t
Wes t
South
Centra l Na ti onal
Avera ge
Source: CMA/MOSL
Realization to moderate sequentially as suggested by

price trend
Weaker realizations coupled with negative operating leverage

to dent profitability
835
804
686
4QFY13
1QFY14
2QFY14E
797
3QFY13
1,157
988
2QFY13
1,004
4QFY12
1QFY13
855
614
3QFY12
1,031
1QFY12
2QFY12
927
3QFY11
925
1QFY11
394
593
878
4QFY10
2QFY11
828
3QFY10
1,310
1,216
1QFY10
2QFY10
4,309
4,274
1QFY14
4QFY13
2QFY14E
4,328
4,316
3QFY13
4,505
4,221
4QFY12
4,471
4,146
3QFY12
2QFY13
4,049
3,853
1QFY12
2QFY12
1QFY13
3,899
3,490
4QFY11
3,279
3,654
1QFY11
3QFY11
3,449
4QFY10
2QFY11
3,401
3QFY10
3,771
3,747
2QFY10
1QFY10
4QFY11
EBITDA (INR/ton)
Rea l i za ti on (INR/ton)
Source: Company/MOSL
October 2013
C26
Trend in key operating parameters
ACC
Ambuja Cement
UltraTech
Birla Corp
India Cement
Shree Cement
Dalmia Bharat
J K Cements
JK Lakshmi Cem.
Madras Cement
Orient Paper
Prism Cement
Sector Agg.
Volume (m tons)
2QFY14
YoY (%)
QoQ (%)
24,719
1.7
-11.6
19,904
-8.0
-15.1
44,866
-4.5
-9.5
6,754
7.6
-12.5
11,406
1.6
-7.9
11,898
-10.1
-17.5
7,357
9.7
4.2
6,903
-3.1
5.0
4,194
-14.4
-8.2
9,669
-3.3
0.7
3,418
-3.7
-8.2
11,272
6.1
-0.3
162,360
-2.5
-9.0
Realization (INR/ton)
2QFY14
YoY (BP) QoQ (BP)
12.5
-480
-300
16.3
-990
-470
18.2
-320
-290
8.6
-900
-10
16.4
-190
90
21.3
-840
-500
16.1
-970
190
13.7
-450
-20
10.2
-1,260
-520
14.8
200
190
11.6
-850
-750
2.8
-30
-30
14.9
-520
-250
EBITDA (INR/ton)
2QFY14
YoY (%)
QoQ (%)
1,840
-26.0
-29.0
2,099
-37.7
-35.3
3,934
-28.5
-41.5
365
-54.5
-20.7
149
-69.7
-11.5
830
-63.7
-70.8
256
-63.2
-27.4
233
-56.9
-24.4
-14
-102.8
-109.1
757
-43.1
9.9
167
-54.4
-55.3
-342
7.1
-28.4
10,272
-43.1
-41.1
EBITDA Margins (%)

2QFY14
YoY (Rs)
QoQ (Rs)
4,218
-284
-80
4,157
-364
-140
4,879
-110
32
4,010
24
-100
4,258
-97
70
3,438
-464
-140
4,309
-103
50
4,621
-45
43
3,585
-479
-160
4,365
-270
60
3,454
-169
-30
3,659
-318
100
4,274
-232
-35
2QFY14
556
677
889
495
716
724
731
633
366
840
402
124
686
Trend in key financial parameters
ACC
Ambuja Cement
UltraTech
Birla Corp
India Cement
Shree Cement
Dalmia Bharat
J K Cements
JK Lakshmi Cem.
Madras Cement
Orient Paper
Prism Cement
Sector Agg.
Net Sales (INR m)

2QFY14
YoY (%)
QoQ (%)
5.5
1.5
-10.4
4.8
0.0
-12.3
9.1
-2.5
-10.2
1.7
7.0
-10.3
2.6
3.7
-1.6
3.1
2.0
-2.1
1.6
10.0
1.5
1.5
-2.2
4.0
1.2
-3.0
-4.1
2.1
3.0
-5.1
1.0
1.0
-7.4
1.1
20.0
-17.7
35.2
1.3
-8.0
Net Profit (INR m)

YoY (INR) QoQ (INR)
-224
-145
-508
-225
-178
-136
-303
-120
-100
-5
-461
-209
-444
105
-215
-3
-559
-210
-443
125
-328
-266
-52
-60
-302
-118
Revised EPS estimates (INR)

FY14E/CY13E
Old
Chg (%)
Rev
ACC
Ambuja Cement
Grasim
UltraTech
Birla Corp
India Cement
Shree Cement
55.7
8.0
322.7
96.1
34.7
3.2
277.0
53.8
8.3
313.6
99.9
35.3
4.1
280.7
3.5
-2.7
2.9
-3.8
-1.8
-22.5
-1.3
Rev
FY15E/CY14E
Old
65.5
9.3
379.7
110.9
44.8
6.6
321.1
76.0
10.8
367.1
126.5
50.2
9.0
365.3
Chg (%)
-13.7
-14.2
3.4
-12.3
-10.7
-26.3
-12.1
Recent correction makes valuations attractive (FY12)
EV (USD/Ton)
200
Repl a cement Cos t a t
USD140/ton Ultra Tech
150
Ambuja
100
Indi a Cement
ACC
50
Gra s i m
Shree
Bi rl a Corp
0
0%
6%
12%
18%
24%
30%
36%
42%
48%
RoCE (%)
October 2013
C27
Relative Performance - 3m (%)
Sens ex Index
MOSL Cement Index
Sens ex Index
MOSL Cement Index
110
120
100
105
90
90
80
75
70
60
Jun-13
Jul -13
Sep-12 Dec-12 Ma r-13 Jun-13 Sep-13
Aug-13 Sep-13
CMP (INR)
27.09.13
Cement
ACC
Ambuja Cements
Birla Corporation
Grasim Industries
India Cements
J P Associates
Shree Cement
Ultratech Cement
Century Textiles
Dalmia Bharat
J K Cements
JK Lakshmi Cem.
Madras Cement
Prism Cement
Sector Aggregate
October 2013
1,101
184
207
2,678
51
37
4,004
1,826
250
126
188
71
180
28
Rating
EPS (INR)
FY13 FY14E FY15E
P/E (x)
FY13 FY14E FY15E
EV/EBITDA (x)
FY13 FY14E FY15E
RoE (%)
FY13 FY14E FY15E
Buy
Neutral
Buy
Buy
Neutral
Buy
Buy
Buy
Neutral
Buy
Buy
Buy
Buy
Neutral
68.7
10.0
35.0
278.7
5.8
2.3
314.9
96.8
-3.7
24.3
33.0
16.0
17.0
-1.2
16.0
18.4
5.9
9.6
8.7
16.2
12.7
18.9
-67.3
5.2
5.7
4.4
10.6
-23.4
14.5
8.9
10.0
3.4
4.2
5.4
15.6
8.1
11.1
14.7
5.8
3.9
4.2
7.1
12.8
8.8
17.7
18.3
11.0
13.0
4.3
3.9
30.6
18.9
-1.9
6.6
14.4
15.4
18.3
-5.4
12.9
55.7
8.0
34.7
322.7
3.2
2.7
277.0
96.1
-12.5
20.2
26.7
9.1
14.8
-1.8
65.5
9.3
44.8
379.7
6.6
4.4
321.1
110.9
-5.7
24.5
43.9
11.3
21.8
2.9
19.8
22.9
6.0
8.3
15.9
13.7
14.5
19.0
-20.0
6.2
7.0
7.8
12.1
-16.1
15.6
16.8
19.8
4.6
7.1
7.7
8.4
12.5
16.5
-43.5
5.2
4.3
6.3
8.2
9.6
12.4
10.7
13.4
3.2
3.7
5.7
7.4
8.1
11.2
17.3
6.5
6.1
7.0
7.2
14.7
8.0
9.1
11.7
1.9
2.8
4.8
6.6
7.1
9.4
11.3
4.8
4.2
5.8
5.0
5.4
6.4
13.1
13.6
10.1
13.3
2.4
4.3
17.4
16.1
-6.7
5.2
10.7
8.2
14.1
-8.6
10.9
14.0
14.7
11.9
13.6
4.7
6.7
17.4
16.1
-3.4
6.1
15.6
9.6
18.2
14.5
12.4
C28
ACC
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
ACC IN
187.9
207 / 3
1,515 / 912
7 / -10 / -30
CMP: INR1,101

Y/E December
Sales
EBITDA
NP
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
EV/Ton (x)
2012 2013E 2014E

111.3 110.4 123.0
19.7 15.8 18.7
12.9 10.5 12.3
68.7 55.8 65.5
14.1 -18.8 17.4
393
455
480
17.7 13.1 14.0
17.4 11.8 13.4
61.8 61.1 62.1
16.0
2.8
8.8
90
19.8
2.4
10.2
84
16.8
2.3
8.0
79
2015E
140.7
23.6
15.8
83.8
28.0
517
16.8
16.8
55.4
13.1
2.1
7.0
78
Buy
Dispatches in 3QCY14 are estimated to grow 1.5% YoY (-10% QoQ) to

5.48mt. Average realizations are expected to decline by 2% QoQ
(-6.3% YoY) to INR4,218/ton.
Revenue is expected to de-grow by 12% QoQ (1.7% YoY) to INR24.7b.
EBITDA margin is expected to compress by 4.8pp YoY (-3pp QoQ) to
12.5% due to (a) lower realizations growth, (b) negative operating
leverage and (c) consolidation of loss-making RMC business in 4QCY14.
EBITDA/ton is estimated to decline by ~INR224/ton YoY (-INR145/ton
YoY) to INR556/ton.
PAT would decline 26% YoY (-29% QoQ) to INR1.84b.
We upgrade the EPS estimates by 6.1%/3% for CY13E/CY14E to INR57.1
and INR78.2 respectively to factor better realizations.
The stock trades at 14.2x CY14E EPS, 6.7x EV/EBITDA and USD77/ton.
Upgrade to Buy from Neutral.

Volume growth recovery and outlook.
Cement pricing outlook and sustainability, considering recent
volatility (prices were down in July-August followed by sharp uptick
in September-end).
Progress in ongoing capex for Jamul expansion of 5mt.

Y/E December
(INR Million)
CY12
1Q
2Q
3Q
Cement Sales (m ton)
6.72
6.05
5.40
YoY Change (%)
9.1
2.0
-5.1
Cement Realization
4,231
4,558
4,502
YoY Change (%)
8.7
12.5
19.1
QoQ Change (%)
0.7
7.7
-1.2
Net Sales
28,430
27,576
24,310
YoY Change (%)
18.5
14.8
13.1
EBITDA
5,988
6,306
4,215
Margins (%)
21.1
22.9
17.3
Depreciation
1,305
1,356
1,352
Interest
316
301
257
Other Income
1,121
1,360
975
PBT before EO Item
5,487
6,009
3,581
PBT after EO Item
2,134
6,009
3,581
Tax
580
1,829
1,094
Rate (%)
27.2
30.4
30.6
Reported PAT
1,554
4,179
2,487
Adjusted PAT
3,859
4,179
2,487
Margins (%)
13.6
15.2
10.2
YoY Change (%)
10.1
24.2
48.4
E: MOSL Estimates; * Merger of RMC business from 4QCY12
October 2013
CY13
4Q*
5.94
-0.2
4,166
-0.8
-7.5
30,989
24.0
3,172
10.2
1,575
273
1,468
2,792
2,792
400
14.3
2,392
2,392
7.7
-15.2
1Q
6.42
-4.5
4,269
0.9
2.5
29,111
2.4
4,468
15.3
1,383
108
1,205
4,182
5,861
1,484
25.3
4,377
3,124
10.7
-19.1
2Q
6.12
1.2
4,298
-5.7
0.7
27,952
1.4
4,335
15.5
1,387
179
908
3,677
3,677
1,086
29.5
2,591
2,591
9.3
-38.0
3QE
5.48
1.5
4,218
-6.3
-1.9
24,719
1.7
3,088
12.5
1,415
150
1,050
2,573
2,573
733
28.5
1,840
1,840
7.4
-26.0
4QE
6.09
2.5
4,371
4.9
3.6
28,620
-7.6
3,924
13.7
1,483
113
1,687
4,014
4,014
1,131
28.2
2,883
2,883
10.1
20.5
CY12
CY13E
24.11
1.6
4,358
9.7
24.11
0.0
4,291
-1.5
111,305
18.0
19,681
17.7
5,589
1,147
4,923
17,869
14,515
3,903
26.9
10,612
12,918
11.6
11.9
110,402
-0.8
15,814
14.3
5,668
550
4,850
14,446
16,124
4,434
27.5
11,690
10,473
9.5
-18.9
C29
Ambuja Cements
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
ACEM IN
1,542.2
284 / 5
221 / 148
6 / 2 / -15
CMP: INR184
Dispatches in 3QCY13 are estimated to grow 0% YoY (-12% QoQ) to

4.79mt. Average realizations are expected to decline by 3.3% QoQ (8% YoY) to INR4,157/ton.
EBITDA margin is expected to decline by 9.9pp YoY (-4.7pp QoQ) to

16.3%, impacted by lower realizations and negative operating leverage.
EBITDA/ton is estimated at ~INR677/ton (-INR225/ton QoQ, and INR508/ton YoY).
PAT estimated to decline 38% YoY (-35% QoQ) to INR2.1b.
The stock trades at 17.5x CY14E EPS, 10x EV/EBITDA and USD130/ton.
Maintain Buy with a target price of INR174 (9x CY14E EV/EBITDA).

Y/E December
Sales
EBITDA
NP
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
EV/Ton (USD)
2012 2013E 2014E

96.7 92.8 103.0
24.7 18.3 20.9
15.4 12.4 14.4
10.0
8.0
9.3
22.4 -19.6 15.7
56.9 61.1 65.2
18.3 13.6 14.7
27.6 19.7 21.2
49.8 52.6 56.3
18.4
3.2
9.7
138
22.9
3.0
13.2
135
19.8
2.8
11.4
129
2015E
119.6
25.3
17.7
11.5
23.6
70.9
16.9
24.2
50.6
16.0
2.6
9.0
123
Buy

volatility (prices were down in July-August, followed by a sharp uptick
in September-end).
Progress in ongoing mining land acquisition and capex in Nagaur
(Rajasthan) plant of 4.5mt.
(INR Million)
Y/E December
Sales Volume (m ton)*
YoY Change (%)
YoY Change (%)
QoQ Change (%)
Net Sales
YoY Change (%)
EBITDA
Margins (%)
Depreciation
Interest
Other Income
PBT before EO Item
PBT after EO Exp/(Inc)
Tax
Rate (%)
Reported Profit
Adj PAT
YoY Change (%)
E: MOSL Estimates
October 2013
CY12
1Q
6.18
9.6
4,257
8.5
4.4
26,315
18.9
7,470
28.4
1,209
168
1,122
7,215
-2,791
4,424
1,301
29.4
3,122
5,075
24.5
2Q
5.63
6.5
4,556
10.7
7.0
25,660
17.9
7,223
28.2
1,215
180
908
6,736
0
6,736
2,047
30.4
4,689
4,689
34.9
3Q
4.79
-0.4
4,521
20.3
-0.8
21,645
19.8
5,673
26.2
1,373
166
939
5,074
-499
4,575
1,535
33.6
3,040
3,371
96.6
CY13
4Q
5.39
-5.6
4,293
5.2
-5.0
23,133
-0.7
4,282
18.5
1,576
243
1,100
3,563
-279
3,284
1,164
35.5
2,120
2,300
-28.8
1Q
5.96
-3.6
4,271
0.3
-0.5
25,448
-3.3
5,118
20.1
1,204
132
1,339
5,121
1,741
6,862
1,983
28.9
4,879
3,641
-28.3
2Q
5.46
-3.1
4,297
-5.7
0.6
23,457
-8.6
4,920
21.0
1,223
171
1,051
4,578
0
4,578
1,336
29.2
3,242
3,242
-30.9
3QE
4.79
0.0
4,157
-8.0
-3.3
19,904
-8.0
3,239
16.3
1,300
135
1,150
2,954
0
2,954
855
29.0
2,099
2,099
-37.7
4QE
5.56
3.3
4,312
0.4
3.7
23,990
3.7
5,030
21.0
1,340
144
1,260
4,805
0
4,805
1,385
28.8
3,420
3,420
48.7
CY12
CY13E
21.99
2.5
4,400
11.0
21.77
-1.0
4,263
-3.1
96,749
13.8
24,675
25.5
5,373
757
4,042
22,588
-3,570
19,018
6,048
31.8
12,971
15,435
23.0
92,800
49.2
18,307
19.7
5,068
582
4,800
17,458
1,741
19,199
5,559
29.0
13,640
12,403
-19.6
C30
Birla Corporation
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
BCORP IN
77.0
16 / 0
342 / 191
-9 / -20 / -19
2012 2013 2014E

22.5 25.6 28.6
3.1
3.5
3.5
2.4
2.7
2.7
31.1 35.0 34.7
-25.2 12.8
-1.0
291.3 318.2 343.5
10.7 11.0 10.1
11.3 10.8
9.9
22.6 24.9 27.0
6.6
0.7
2.3
15
5.9
0.6
2.8
17

Y/E March
Sales
EBITDA
NP
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
EV/Ton (x)
CMP: INR207
6.0
0.6
2.9
17
2015E
31.1
4.8
3.5
44.8
29.2
377.8
11.9
12.7
23.3
4.6
0.5
1.7
14
Buy
2QFY14 volumes are estimated to grow 7% YoY (-10.3% QoQ) to 1.68mt,

on a low base of last year, when the mining ban was imposed. Average
realizations are expected to decline by 3.1% QoQ (-5.6% QoQ) to
INR3,725/ton.
EBITDA margin is expected to decline by 9pp YoY (stable QoQ) to 8.6%,
impacted by lower realizations and YoY higher cost. EBITDA/ton is
estimated to decline by ~INR12/ton QoQ (-INR356/ton QoQ) to INR344/
ton.
PAT is estimated to decline 55% YoY (-21% QoQ) to INR365m.
We upgrade FY14E/15E EPS estimates by 2.2%/6.3% to factor lower
volume but better realizations.
The stock trades at 3.9x FY15E EPS, 1.3x EV/EBITDA and USD13/ton.
Maintain Buy with a target price of INR400 (4x FY15E EV/EBITDA).

in September-end).
Status of mining ban at Rajasthan plant and any contingency plans.
(INR Million)
Y/E March
Cement Sales (m ton)
YoY Change (%)
Cement Realization
YoY Change (%)
QoQ Change (%)
Net Sales
YoY Change (%)
EBITDA
Margins (%)
Depreciation
Interest
Other Income
Profit before Tax
Tax
Rate (%)
PAT
Margins (%)
YoY Change (%)
E: MOSL Estimates
October 2013
FY13
1Q
1.61
5.6
4,079
19.5
12.9
6,580
18.1
1,258
19.1
235
237
346
1,132
284
25.1
847
12.9
-24.3
2Q
1.57
11.4
3,946
25.6
-3.2
6,274
24.2
1,102
17.6
252
141
347
1,056
254
24.0
802
12.8
206.8
3Q
1.57
12.9
3,750
7.1
-5.0
6,126
14.7
514
8.4
285
171
270
328
6
1.7
322
5.3
-26.3
FY14
4Q
1.59
-2.6
3,847
6.5
2.6
6,658
2.4
663
10.0
272
99
701
992
265
26.8
726
10.9
26.4
1Q
1.88
17.0
3,845
-5.7
0.0
7,720
17.3
668
8.7
302
207
367
525
66
12.5
460
6.0
-45.7
2QE
1.68
7.0
3,725
-5.6
-3.1
6,754
7.6
579
8.6
300
200
350
429
64
15.0
365
5.4
-54.5
3QE
1.64
5.0
3,875
3.3
4.0
6,902
12.7
924
13.4
300
200
400
824
124
15.0
700
10.1
117.4
4QE
1.65
3.7
4,087
6.2
5.5
7,236
8.7
1,303
18.0
303
206
570
1,365
218
16.0
1,147
15.9
58.0
FY13
FY14E
6.47
8.5
3,827
12.0
6.86
6.0
3,881
1.4
25,638
14.1
3,536
13.8
1,044
649
1,663
3,507
809
23.1
2,698
10.5
12.8
28,611
11.6
3,474
12.1
1,205
813
1,688
3,144
472
15.0
2,672
9.3
-1.0
C31
Grasim Industries
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
GRASIM IN
91.7
246 / 4
3,511 / 2,121
9 / -9 / -24
2012 2013 2014E

249.8 276.4 271.2
53.2 56.6 59.0
35.3 35.6 39.7
288.6 278.7 322.7
16.2
-3.4 15.8
1,861 2,142 2,435
15.5 13.0 13.3
21.4 18.1 18.0
9.0
9.4
9.1
9.3
1.4
5.7
90
9.6
1.3
6.2
102

Y/E March
Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
EV/Ton (USD)
CMP: INR2,678
8.3
1.1
5.4
78
2015E
315.2
75.4
47.5
379.7
17.7
2,783
13.6
20.9
8.4
7.1
1.0
4.1
67
Buy
VSF volumes are estimated to grow 4.2% YoY (14.6% QoQ) to 88,899
tons, impacted by uncertain global economic outlook. VSF realizations
are estimated to improve by ~INR2/kg QoQ, down INR8/kg YoY, to
INR118.5/kg.
This is due to the price increase taken in VSF segment in August 2013,
as import parity price has gone up in line with INR depreciation. We
assume price/kg of INR118/120 for FY14E/15E.
Standalone EBITDA margin is estimated to improve by 150bp QoQ (2.6pp YoY) to 19.1% YoY.
EBITDA is estimated to de-grow by 15.6% YoY (+20.8% QoQ) to
INR2.44b, translating into PAT of INR3.8b - de-growth of 1% YoY (+68%
QoQ).
The stock trades at 7.2x FY15E consolidated EPS, 4.6x FY15E EV/EBITDA
and USD78/ton. Maintain Buy with a target price of INR3,557 (FY15E
SOTP-based).

Outlook on VSF business and strategy to utilize upcoming capacities
(~47% capacity growth).
Cement business outlook on demand and pricing, and status of
capacity addition.
(INR Million)
Y/E March
VSF Volume (ton)
YoY Change (%)
VSF Realization (INR/ton)
YoY Change (%)
QoQ Change (%)
Net Sales
YoY Change (%)
EBITDA
Margins (%)
Depreciation
Interest
Other Income
PBT before EO Items
PBT after EO Items
Tax
Rate (%)
Reported PAT
Adj. PAT
YoY Change (%)
E: MOSL Estimates
October 2013
FY13
1Q
77,013
40.4
128,024
-16.0
5.5
12,390
21.0
2,953
23.8
360
61
844
3,376
0
3,376
647
19.2
2,729
2,729
-13.1
2Q
85,312
8.0
126,656
1.6
-1.1
13,345
9.6
2,898
21.7
386
78
2,106
4,540
0
4,540
712
15.7
3,827
3,827
11.0
3Q
78,579
0.5
121,668
-5.3
-3.9
12,157
-2.2
2,154
17.7
395
107
951
2,603
0
2,603
623
24.0
1,980
1,980
-27.9
FY14
4Q
95,161
0.3
119,150
-1.8
-2.1
13,765
-1.1
2,141
15.6
451
145
1,181
2,726
2,044
4,770
1,046
21.9
3,724
2,128
-12.6
1Q
77,518
0.7
116,501
-9.0
-2.2
11,489
-7.3
2,024
17.6
484
78
959
2,420
0
2,420
159
6.6
2,261
2,261
-17.2
2QE
88,899
4.2
118,501
-6.4
1.7
12,779
-4.2
2,445
19.1
500
125
2,300
4,120
0
4,120
330
8.0
3,791
3,791
-1.0
3QE
85,343
8.6
118,501
-2.6
0.0
12,494
2.8
2,350
18.8
650
175
1,050
2,575
0
2,575
206
8.0
2,369
2,369
19.7
4QE
103,835
9.1
118,852
-0.2
0.3
14,354
4.3
2,748
19.1
658
205
1,191
3,077
0
3,077
281
9.1
2,796
2,796
31.4
FY13
FY14E
336,065
9.5
123,678
-4.5
355,594
5.8
118,378
-4.3
51,814
6.3
10,145
19.6
1,592
391
5,082
13,245
2,044
15,289
3,029
19.8
12,260
10,621
-9.8
51,116
-1.3
9,567
18.7
2,292
583
5,500
12,192
0
12,192
975
8.0
11,217
11,217
5.6
C32
India Cements
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
ICEM IN
307.2
16 / 0
105 / 43
-3 / -44 / -54
2012 2013 2014E

42.0 46.0 47.7
9.0
8.4
8.1
3.0
1.8
1.0
8.5
5.8
3.2
266.2 -31.3 -45.3
132.1 133.1 134.0
7.3
4.3
2.4
10.1
8.4
7.4
24.5 43.6 72.0
6.0
0.4
4.5
45
8.7
0.4
4.8
49

Y/E March
Sales
EBITDA
NP
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
EV/Ton (USD)
CMP: INR51
15.9
0.4
5.4
49
2015E
52.9
9.0
1.9
6.6
107.7
137.5
4.7
8.4
45.8
7.7
0.4
4.5
46
Neutral
India Cements' volumes are expected to grow by 3.7% YoY (-2% QoQ)
to 2.61mt. Better pricing environment (strong uptick in Andhra Pradesh)
to result in 1.7% QoQ (-2.2% YoY) growth in realizations to INR4,258/
ton. We estimate revenue of ~INR70m from IPL (v/s INR52m in 2QFY13).
EBITDA is estimated at INR1.9b (-9% YoY and -2% QoQ) and EBITDA
margin to improve by 1pp QoQ (-1.9pp YoY) to 16.4%, translating into
PAT de-growth of 70% YoY (-11% QoQ) to INR149m.
Pure Cement's EBITDA/ton is estimated to increase by ~INR122/ton
QoQ (-INR77/ton YoY) to INR694/ton.
We downgrade FY14E EPS estimates by 4.5% and upgrade FY15E by
8.4% to INR3.9/INR9.7, led by lower volume but better realizations
growth.
Valuations stand at 4.6x FY15E EPS, 3.6x FY15E EBITDA and USD43/ton.
Maintain Neutral with a target price of INR44 (3.5x FY15E EV/EBITDA).

Demand and pricing outlook, especially in South India.
Expected timeline and potential cost savings from captive coal block
in Indonesia and AP power plant.
Roadmap for stake increase in Trinetra (Rajasthan plant).
(INR Million)
Y/E March
Sales Dispatches (m ton)
YoY Change (%)
YoY Change (%)
QoQ Change (%)
Net Sales
YoY Change (%)
Total Expenditure
EBITDA
Margins (%)
Depreciation
Interest
Other Income
PBT before EO expense
PBT
Tax
Rate (%)
Reported PAT
Adj PAT
YoY Change (%)
Margins (%)
E: MOSL Estimates
October 2013
FY13
1Q
2.38
2.9
4,464
7.6
5.1
12,014
13.7
9,237
2,777
23.1
692
949
37
1,173
973
353
36.2
621
748
-26.7
6.2
2Q
2.51
3.5
4,355
3.1
-2.4
11,227
3.1
9,176
2,051
18.3
699
667
32
717
717
226
31.5
491
491
-29.6
4.4
3Q
2.42
10.8
4,364
2.9
0.2
10,824
15.0
8,897
1,927
17.8
708
822
34
431
431
169
39.3
261
261
-53.6
2.4
FY14
4Q
2.78
6.7
4,221
-0.6
-3.3
11,906
6.7
10,228
1,679
14.1
720
638
84
404
404
141
34.8
263
263
-59.4
2.2
1Q
2.65
11.3
4,188
-6.2
-0.8
12,384
3.1
10,473
1,910
15.4
680
999
25
257
257
89
34.6
168
168
-77.5
1.4
2QE
2.61
3.7
4,258
-2.2
1.7
11,406
1.6
9,540
1,866
16.4
730
950
40
226
226
77
34.1
149
149
-69.7
1.3
3QE
2.42
-0.2
4,408
1.0
3.5
10,955
1.2
9,063
1,892
17.3
750
950
40
232
232
79
34.1
153
153
-41.5
1.4
4QE
2.77
-0.1
4,609
9.2
4.6
12,947
8.7
10,516
2,432
18.8
780
947
95
799
799
271
33.9
528
528
100.6
4.1
FY13
FY14E
10.06
5.6
4,360
3.4
10.44
3.9
4,368
0.2
45,970
9.4
37,537
8,433
18.3
2,818
3,078
186
2,724
2,524
888
35.2
1,636
1,765
-40.5
3.8
47,691
3.7
39,592
8,099
17.0
2,940
3,846
200
1,514
1,514
516
34.1
998
998
-43.4
2.1
C33
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
JPA IN
2,219.1
81 / 1
107 / 28
2 / -49 / -61

Y/E March
2012 2013 2014E
Sales
128.5 133.6 149.9
EBITDA
34.4 33.3 37.6
NP
10.2
4.9
5.9
Adj. EPS (INR)
4.8
2.3
2.7
EPS Gr. (%)
37.5 -52.9 17.9
BV/Sh. (INR)
57.9 60.1 63.5
RoE (%)
9.4
3.9
4.3
RoCE (%)
9.3
7.5
8.4
Payout (%)
22.7 22.8 14.9
Valuations
P/E (x)
7.6 16.2 13.7
P/BV (x)
0.6
0.6
0.6
EV/ EBITDA (x)
8.1
9.4
7.4
Div. Yield (%)
2.6
1.2
1.5
2015E
162.7
40.9
9.7
4.4
63.4
66.9
6.7
9.3
22.8
8.4
0.5
6.6
2.4
CMP: INR37
Buy
In 2QFY14E, we expect JPA to post revenue of INR33.4b, EBITDA of

INR8.1b and net profit of INR804m.
In cement business, we have assumed a realization of INR4,214/ton
v/s INR4,264/ton sequentially. We have estimated volumes of 3.35mt,
up 3% YoY.
EPC division's revenue is expected at INR13.5b (up 5% YoY) and EBIT
margin of 25% v/s 34.2% YoY.
JPA recently sold its 4.8mt of Gujarat-based capacity to Ultratech for
INR38b. Consideration involves takeover of INR36.5b of debt in Jaypee
Cement (100% subsidiary of JPA) and INR1.5b equity issuance.
As per media report, JPA is also considering to sell its Himachal-based
cement capacity and hydro assets in Jaiprakash Power.
We expect JPA to post standalone net profit of INR5.9b in FY14E (up
20% YoY) and INR9.7b in FY15E (up 63.4% YoY). The stock trades at a
reported PER of 8.4x FY15E.

Cement realizations and cost.
Update on further disinvestment.
EPC division's profitability and visibility on revenue/order book.
Ramp-up in real estate division, revenue recognition.
(INR Million)
Y/E March
FY13
1Q
29,636
-6.9
7,713
-0.2
26.0
1,763
4,653
731
9
2,037
649
31.8
1,388
1,379
28.7
2Q
29,825
-4.8
7,711
3.1
25.9
1,778
4,544
448
33
1,870
590
31.6
1,280
1,280
-0.5
3Q
33,984
2.8
7,625
-6.5
22.4
1,813
5,327
1,176
8
1,670
561
33.6
1,109
1,101
-45.9
FY14
4Q
38,642
-4.9
8,507
-16.6
22.0
1,908
5,490
679
43
1,831
596
32.5
1,235
1,192
-57.3
1Q
33,149
11.9
7,847
1.7
23.7
1,943
5,900
371
2QE
33,377
11.9
8,112
5.2
24.3
1,950
5,900
950
Sales
Change (%)
EBITDA
Change (%)
As of % Sales
Depreciation
Interest
Other Income
Extra-ordinary income
PBT
4,327
1,212
Tax
982
408
22.7
33.7
Reported PAT
3,345
804
Adj PAT
207
804
Change (%)
-85.0
-37.2
Cement Business
Volumes (m ton)
3.59
3.25
3.71
3.95
3.61
3.35
Revenues (INR m)
15,629
13,719
14,747
16,363
15,393
14,117
Realization (INR/t)
4,354
4,221
3,971
4,147
4,264
4,214
E: MOSL Estimates, *Change (% YoY) is not comparable due to Jaypee Cement de-merger
3QE
39,419
16.0
9,655
26.6
24.5
1,950
5,900
1,075
4QE
43,963
13.8
11,996
41.0
27.3
2,006
5,972
1,202
2,880
970
33.7
1,911
1,911
73.5
5,220
2,232
42.8
2,988
2,988
150.6
4.15
18,319
4,414
4.39
20,695
4,714
FY13
FY14E
132,087
149,907
13.5
37,610
18.4
25.1
7,848
23,672
3,598
3,952
13,639
4,592
33.7
9,047
5,910
20.1
31,755
24.0
7,261
20,114
3,034
93
7,507
2,495
33.2
5,013
4,920
14.50
60,459
4,170
15.50
68,524
4,421
Nalin Bhatt (NalinBhatt@MotilalOswal.com)/Aditya Bahety (Aditya.Bahety@MotilalOswal.com)

October 2013
C34
Shree Cement
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
SRCM IN
34.8
139 / 2
5,210 / 3,413
1 / -6 / 0
CMP: INR4,004
We expect cement volumes to grow 2% YoY (-2.1% QoQ) to 3.1mt

(including clinker) and realizations are expected to decline by 2.9%
QoQ (-11.9% YoY) to INR3,438/ton.
Merchant power sale is estimated at 325m units (v/s 307m units YoY
and 795m QoQ) at ~INR3.8/unit (v/s INR3.88 QoQ and INR3.97 YoY).
Realizations de-growth and QoQ increase in cost trend, due to negative

operating leverage, led to cement business profitability at INR724/
ton (-INR209/ton QoQ and -INR461/ton QoQ).
Power EBITDA contribution estimated at INR293m (v/s INR326m YoY/

INR840m QoQ). Adjusted PAT seen at INR0.83b (v/s INR2.3b YoY v/s
INR2.8b QoQ).
Valuations at 11.4x FY15E EPS, 6.6x FY15E EBITDA and USD76/ton.

Maintain Buy with a target price of INR5,400 (FY15E SOTP-based).

Y/E June
Sales
EBITDA
NP
Adj EPS (INR)
EPS Growth (%)
BV/Share (Rs)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
EV/Ton (USD)
2012 2013 2014E

47.8 55.7 59.1
13.9 15.4 15.4
5.7 10.0
7.3
274.4 314.9 277.0
37.1 14.8 -12.0
785 1,103 1,283
24.0 30.6 17.4
19.6 28.1 20.4
14.5
8.1 13.5
14.6
5.1
9.1
120
12.7
3.6
8.1
97
14.5
3.1
8.1
79
2015E
67.4
17.8
8.4
321.1
15.9
1,495
17.4
21.3
12.5
12.5
2.7
7.1
73
Buy

Volume and pricing outlook for North India.
Pet coke price trend and update on any forward agreements for
merchant power.
Update on cement capacity addition and capex plans.
(INR Million)
Y/E March
Sales Dispat. (m ton)
YoY Change (%)
Realization (INR/Ton)
YoY Change (%)
QoQ Change (%)
Net Sales
YoY Change (%)
EBITDA
Margins (%)
Depreciation
Interest
Other Income
PBT before EO Exp
Extra-Ord Expense
PBT
Tax
Rate (%)
Reported PAT
Adj PAT
YoY Change (%)
E: MOSL Estimates
October 2013
FY13
1Q
3.04
22.4
3,902
14.7
4.1
13,230
55.3
3,930
29.7
942
543
300
2,745
10
2,736
454
16.6
2,281
2,289
438.0
2Q
3.00
5.2
3,724
4.1
-4.6
14,281
19.4
3,717
26.0
818
563
323
2,659
120
2,539
365
14.4
2,174
2,277
284.6
3Q
3.26
-6.2
3,498
-1.7
-6.1
14,281
0.3
4,054
28.4
1,265
447
576
2,918
1
2,917
176
6.0
2,741
2,741
85.2
FY14
4Q
3.17
-6.0
3,578
-4.6
2.3
14,414
0.4
3,796
26.3
1,332
378
916
3,003
0
3,002
159
5.3
2,843
2,843
-19.1
1Q
3.10
2.0
3,438
-11.9
-3.9
11,898
-10.1
2,538
21.3
1,450
450
350
988
0
988
158
16.0
830
830
-63.7
2QE
3.15
5.0
3,608
-3.1
4.9
14,557
1.9
3,548
24.4
1,550
500
400
1,898
0
1,898
304
16.0
1,594
1,594
-30.0
3QE
3.48
7.0
3,833
9.6
6.2
16,305
14.2
4,756
29.2
1,600
525
500
3,131
0
3,131
501
16.0
2,630
2,630
-4.1
4QE
3.36
6.0
3,886
8.6
1.4
16,367
13.5
4,543
27.8
1,988
531
750
2,774
0
2,774
576
20.8
2,198
2,198
-22.7
FY13
FY14E
12.46
-16.2
3,628
3.4
13.09
5.1
3,699
1.9
55,671
-4.0
15,378
27.6
4,356
1,931
2,114
11,205
11
11,194
1,155
10.3
10,040
10,049
59.6
59,127
6.2
15,385
26.0
6,588
2,006
2,000
8,791
0
8,791
1,538
17.5
7,253
7,253
-27.8
C35
UltraTech Cement
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
UTCEM IN
274.0
500 / 8
2,075 / 1,405
7 / -7 / -13

Y/E March
Sales
EBITDA
NP
Adj EPS (INR)
EPS Growth (%)
BV/Share (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
EV/Ton (USD)
2012 2013 2014E

181.7 200.2 208.4
40.0 45.2 45.6
24.1 26.6 26.3
87.8 96.8 96.1
71.4 10.4
-0.8
469.2 555.7 640.0
20.5 18.9 16.1
23.5 21.4 18.1
10.4 10.9 12.2
20.8
3.9
12.1
157
18.9
3.3
10.3
145
19.0
2.9
10.5
127
2015E
235.5
54.3
30.4
110.9
15.4
736.9
16.1
19.6
12.6
16.5
2.5
8.8
121
CMP: INR1,826
Buy
Cement volumes are estimated to grow -2.5% YoY (-10% QoQ) to

9.06mt. Realizations are estimated to decline by 1.7% QoQ (-4% YoY)
to INR4,050/ton. Its supplementary business of white cement and RMC
are estimated to grow 5% and -5% YoY respectively in volume and
5.6% YoY in realizations.
Realizations decline coupled with sequential cost push (4.4% QoQ)
led by negative operating leverage and higher employee costs would
result in an impact on EBITDA/ton of INR889/ton (-INR136/ton QoQ, INR178/ton YoY). EBITDA margin would decline 3pp QoQ (-3.2pp YoY)
to 18.2%.
EBITDA is estimated to de-grow 19% YoY (-22% QoQ) to INR8.2b,
translating into PAT de-growth of 28% YoY (-42% QoQ) to INR3.9b.
We upgrade the EPS estimates for FY14E/15E by 1.4%/3% to INR101.2/
INR130.2 respectively.
The stock trades at 13.4x FY15E EPS, 7.3x FY15E EV/EBITDA and USD114/
ton. Maintain Buy with a target price of INR2,130 (9x FY15E EV/EBITDA).
in September-end).
Update on capacity addition of 10.2mt, which is slated to commission
in 1HFY14. Progress and timeline over JPA deal.
Update on financial performance of Star Cement, UAE.
Y/E March
(INR Million)
FY13
1Q
2Q
3Q
4Q
Sales (m ton)
10.33
9.29
9.94
11.13
YoY Change (%)
4.8
0.7
-1.7
-3.6
Grey Cement Realn.(INR/ton) *
4,121
4,219
4,050
4,011
YoY Change (%)
9.9
20.4
7.8
3.0
QoQ Change (%)
5.8
2.4
-4.0
-1.0
Net Sales
50,719
46,994
48,574
53,892
YoY Change (%)
16.6
20.3
6.4
1.0
EBITDA
12,897
10,052
10,243
11,993
Margins (%)
25.4
21.4
21.1
22.3
Depreciation
2,281
2,325
2,388
2,460
Interest
498
600
521
478
Other Income
869
706
1,212
1,833
PBT
10,987
7,834
8,545
10,888
Tax
3,203
2,334
2,537
3,626
Rate (%)
29.2
29.8
29.7
33.3
Reported PAT
7,784
5,500
6,008
7,262
Adj PAT
7,784
5,500
6,008
7,262
YoY Change (%)
14.0
97.2
5.5
-15.8
E: MOSL Estimates; * Grey cement realization is our estimate
October 2013
FY14
1Q
10.09
-2.3
4,120
0.0
2.7
49,575
-2.3
10,491
21.2
2,521
660
1,882
9,192
2,466
26.8
6,726
6,726
-13.6
2QE
9.06
-2.5
4,050
-4.0
-1.7
44,866
-4.5
8,180
18.2
2,791
700
700
5,389
1,455
27.0
3,934
3,934
-28.5
3QE
10.36
4.2
4,220
4.2
4.2
52,553
8.2
11,641
22.2
2,850
750
1,000
9,041
2,441
27.0
6,600
6,600
9.9
4QE
11.60
4.2
4,419
10.2
4.7
61,451
14.0
15,279
24.9
3,065
775
1,018
12,457
3,379
27.1
9,077
9,077
25.0
FY13
FY14E
40.65
-0.2
4,102
9.8
41.11
1.1
4,215
2.8
200,179
10.2
45,185
22.6
9,454
2,097
4,620
38,254
11,700
30.6
26,554
26,554
10.7
208,445
4.1
45,591
21.9
11,227
2,885
4,600
36,079
9,741
27.0
26,338
26,338
-0.8
C36
September 2013 Results Preview | Sector: Consumer
Consumer
Companies Covered
Sales to grow 12%, PAT to grow 13% - similar to 1QFY14
Asian Paints
We expect our Consumer coverage universe to post 12.1% revenue growth and 13.4%
PAT growth in 2QFY14. EBITDA is likely to grow 15.2%, with 60bp margin expansion, led
by Hindustan Unilever (HUVR), ITC, Asian Paints (APNT), GSK Consumer (SKB) and
Britannia (BRIT). We expect ITC to post 12% sales growth (~3% cigarette volume
decline) and 14% PAT growth. HUVR's sales are likely to grow 8% (volume growth of
~5%), with EBITDA margin expanding 50bp to 16%.
Colgate Palmolive
Dabur India
GSK Consumer
Growth has not picked up; rural markets to continue outperforming

Our recent interactions with 14 Consumer/Retail companies indicate that demand for
staples has not picked up yet. We expect volume growth for most of our Staples
universe to remain broadly similar to 1QFY14 levels. Rural growth will continue to
outperform urban, in our view. Good monsoons provide some respite for rural
consumption in 2H, post the harvesting season. Premiumization, the overarching
theme of the Consumer sector, has weakened and virtually halted, expect in the Oral
Care category.
Hindustan Unilever
ITC
Marico
Nestle India
Pidilite Industries
Radico Khaitan
2Q gross margins to sustain; currency depreciation impact to be visible 3Q

onwards
United Spirits
While the underlying commodity price movements have not been dramatic, the INR
depreciation led raw material inflation leads to downside risks ahead to gross margins.
Required price hikes have not been initiated yet and we expect the same to commence
soon. HUVR, APNT, Pidilite (PIDI) and Dabur have relatively higher exposure to
imported raw material. Companies have selectively withdrawn promotions and are
looking at cutting ad spends to buffer the impact of input cost inflation. We expect
HUVR, ITC and BRIT to post margin expansion. Colgate is likely to report margin decline
due to high promotional activity after P&G's Oral B launch.
Asian Paints
Britannia
Colgate
Dabur
Godrej Consumer
GSK Consumer
Hind. Unilever
ITC
Marico
Nestle
Pidilite Inds.
Radico Khaitan
United Spirits
Sector Aggregate
CMP
(INR)
27.09.13
471
775
1,233
170
832
4,238
621
349
220
5,097
253
128
2,621
(INR Million)
Rating
Sep.13
Neutral
Buy
Neutral
Buy
Neutral
Neutral
Sell
Neutral
Buy
Neutral
Neutral
Buy
Buy
29,863
15,852
8,859
17,083
19,303
9,709
68,157
80,938
12,779
24,057
9,358
3,333
24,428
323,717
Sales
Var.
% YoY
14.2
13.0
14.5
12.2
21.0
17.3
8.0
12.0
10.6
13.7
14.0
12.2
10.0
12.1
Var.
% QoQ
6.0
12.9
4.9
3.5
12.2
13.8
0.1
9.2
-7.4
8.7
-7.8
-6.7
11.4
5.6
Sep.13
4,241
1,110
1,893
3,024
2,896
1,689
10,905
30,756
1,687
5,052
1,684
573
3,053
68,563
EBITDA
Var.
% YoY
17.4
83.0
7.7
14.3
18.7
20.3
11.6
14.4
14.2
13.9
14.8
16.7
20.6
15.2
Var.
% QoQ
-4.0
-5.0
14.5
28.4
31.2
42.4
0.5
10.2
-25.7
5.9
-24.8
-6.1
9.8
6.4
Net Profit
Sep.13
Var.
% YoY
2,604
8.9
768
68.5
1,465
1.0
2,293
13.4
1,881
18.1
1,443
12.3
8,628
7.1
20,900
13.8
1,013
18.0
2,944
11.9
1,184
5.9
293
32.6
884
125.2
46,300
13.4
Var.
% QoQ
-5.4
-10.9
12.9
23.3
44.2
20.3
-2.5
10.5
-34.8
8.5
-23.4
-4.4
-25.2
4.4
Gautam Duggad (Gautam.Duggad@MotilalOswal.com)

October 2013
C37

Sens ex Index
MOSL Cons umer Index
110
105
100

Sens ex Index
MOSL Cons umer Index
135
120
105
Sep-13
Jun-13
Mar-13
Dec-12
90
Sep-12
P&G entered toothpastes with the launch of Oral B. HUVR re-launched Fair & Lovely
with white color after several quarters of weak performance. Marvella Slim RO purifiers
and Rin Pink Bar are some of HUVR's other innovations. Dabur launched Vatika Enriched
Coconut Oil with Hibiscus. Godrej Consumer (GCPL) launched Good Knight Fast Card, a
paper-based household insecticide.
Little to choose from: Weak demand, margin headwinds and expensive

valuations
Sep-13
Aug-13
Jul-13
Jun-13
95
90
New launches continue selectively
The Consumer sector faces two key risks ahead: (a) continued weak volume growth,
given poor macroeconomic parameters, and (b) risks to margins from INR depreciation,
led raw material inflation and reluctance to implement price hikes, given volume
growth implications. While the progress of monsoons has been good, the benefits
will be visible only in 2H and may not completely offset the weakness in urban
demand, in our view. We are also not too enthused with the street's expectation of
election stimulus for rural consumption (75% of budgeted fiscal deficit target has
already been reached in five months). This coupled with multi-year high valuations
for the sector makes choice difficult. We continue to prefer niche plays with strong
pricing power and greater visibility on earnings growth. Dabur and Marico remain our
top picks in the sector. In the large caps, we prefer ITC. Probability of earnings
downgrade is higher than upgrade in the sector - Colgate, GCPL, UNSP, APNT have
earnings downgrade risks.
2QFY14 volume growth expectations

Quarter Ending
Asian Paints
Colgate (Toothpaste)
Dabur
Godrej Consumer
Soaps
GSK Consumer
Hindustan Unilever
ITC (cigarette)
Marico
Parachute
Hair Oil
Saffola
Radico Khaitan
United Spirits
Jun-11
15.0
14.0
8.6
Sep-11
15.0
15.0
10.0
Dec-11
12.0
15.0
10.8
Mar-12
18.0
14.0
12.4
Jun-12
-2.0
13.0
12.0
Sep-12
5.0
11.0
10.5
Dec-12
13.0
8.0
9.5
Mar-13
3.0
11.0
12.0
Jun-13
10.0
11.0
9.0
Sep-13
10.0
10.0
8.0
9.0
14.0
8.3
8.0
19.0
8.0
9.8
7.5
20.0
12.0
9.1
5.0
17.0
7.0
10.0
5.5
22.0
7.4
9.0
1.5
6.0
4.5
7.0
0.5
2.0
6.0
5.0
1.5
4.0
8.0
6.3
2.5
7.0
7.0
4.0
-1.5
5.0
7.0
5.0
-3.0
10.0
32.0
15.0
12.3
15.4
10.0
26.0
11.0
9.7
8.0
13.0
20.0
15.0
10.5
0.7
11.1
17.5
3.3
6.8
5.1
18.0
25.0
12.0
8.2
1.9
9.0
20.0
6.0
7.8
-1.0
6.0
30.0
4.0
6.5
7.0
5.0
4.0
6.0
24.0
16.0
15.0
5.0
10.0
10.0
7.4
7.6
7.0
3.8
0.2
5.0
Impact of input price changes

Input
Price Trend (Y-o-Y)
LAB
Up
Soda Ash
Down
Palm Fatty Acid
Down
Palm Oil
Up
HDPE
Up
Sugar
Down
Titanium Dioxide
Up
Copra
Up
October 2013
Unit
INR/Kg
INR/50Kg
US$/MT
MYR/MT
INR/Kg
INR/Qtl
INR/Kg
INR/Qtl
CMP (INR)
138.1
1055
659
2320
106
3127.5
272
6100
12m change %
18.0
-7.5
-3.2
9.7
14.0
-17.3
8.8
51.6
Impact
Negative
Positive
Positive
Negative
Negative
Positive
Negative
Negative
Companies
HUL
HUL
HUL, Godrej Consumer
Britannia, Nestle, HUL, ITC
All Companies
Britannia, Nestle, GSK Consumer
Asian Paints
Marico
C38
New launches during 2QFY14

Company
HUL
HUL
HUL
Dabur
Dabur
Colgate
GCPL
Brand
F&L
Rin Pink Bar
Marvella Slim RO purifier
Vatika Enriched Coconut Oil
Oxylife Men Craeme Bleach
Colgate SlimSoft
Good knight Fast Card
Palm Fatty Acid (INR/ton)
Category
Skin Care
Detergents
Water Purifier
Hair Oils
Male Grooming
Toothbrush
Home Insecticides
LAB prices (INR/kg)

138
113 111
70,000
114
109
60,000
46,363
46,704
50,000
90
44,171
40,000
84 102
84 86
86
43,025
121
76
41,170
30,000
32,441
Mar09
Jun09
Sep09
Dec09
Mar10
Jun10
Sep10
Dec10
Mar11
Jun11
Sep11
Dec11
Mar12
Jun12
Sep12
Dec12
Mar13
Jun13
Sep13
Sep13
Jun13
Mar13
Dec12
Sep12
Jun12
Mar12
Dec11
Sep11
Jun11
Mar11
Dec10
Sep10
20,000
Copra prices (INR/Qtl)
Sugar prices (INR/Qtl)
7,500
3,895
4,000
7,075
5,950
3,600
5,500
3,383
3,200
3,220
3,135
3,800
2,800
3,200
1,500
Consumer
Asian Paints
Britannia
Colgate
Dabur
Godrej Consumer
GSK Consumer
Hind. Unilever
ITC
Marico
Nestle
Pidilite Inds.
Radico Khaitan
United Spirits
Sector Aggregate
October 2013
471
775
1,233
170
832
4,238
621
349
220
5,097
253
128
2,621
Sep13
Jun13
Mar13
Jan13
Oct12
Jul12
Source: Companies, MOSL
CMP (INR)
27.09.13
Apr12
Jan12
Nov11
Aug11
May11
Nov10
Sep13
May13
Jan13
Sep12
May12
Jan12
Sep11
May11
Jan11
Sep10
May10
Jan10
Sep09
May09
Jan09
Sep08
May08
Jan08
2,400
Feb11
3,500
Rating
EPS (INR)
FY13 FY14E FY15E
P/E (x)
FY13 FY14E FY15E
EV/EBITDA (x)
FY13 FY14E FY15E
RoE (%)
FY13 FY14E FY15E
Neutral
Buy
Neutral
Buy
Neutral
Neutral
Sell
Neutral
Buy
Neutral
Neutral
Buy
Buy
11.6
19.6
36.5
4.4
19.6
98.3
15.3
9.5
6.0
114.1
8.5
6.7
29.6
40.6
39.6
33.8
38.6
42.4
43.1
40.5
36.8
36.6
44.7
29.9
19.1
88.6
39.7
26.7
28.1
24.6
29.7
29.6
35.7
32.2
24.3
23.6
27.2
19.9
11.7
35.5
27.1
33.3
37.5
108.4
35.1
20.9
30.5
71.4
36.1
19.6
71.6
24.9
12.3
4.3
32.8
12.4
27.1
40.8
5.4
24.7
119.1
16.4
10.9
7.5
123.1
9.7
8.0
41.1
15.2
32.0
46.1
6.5
30.5
139.8
17.7
12.7
8.6
150.2
11.7
10.7
66.0
38.1
28.6
30.2
31.4
33.7
35.6
37.9
31.9
29.4
41.4
26.2
16.0
63.7
34.5
31.0
24.2
26.7
26.1
27.3
30.3
35.1
27.4
25.6
33.9
21.6
12.0
39.7
29.4
23.6
19.7
21.8
24.1
23.5
31.7
28.1
20.7
19.1
24.2
16.7
10.1
29.4
23.0
19.8
16.2
18.3
20.3
19.5
25.0
24.7
17.9
15.8
20.2
13.7
8.2
21.5
19.5
30.7
42.6
97.6
35.3
23.2
31.1
61.3
37.8
20.1
58.0
24.1
13.3
6.6
33.2
32.1
41.5
92.5
35.1
24.3
30.8
57.1
39.8
19.2
56.7
24.6
15.7
9.7
34.2
C39
Asian Paints
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
APNT IN
959.2
452 / 7
525 / 376
5 / -9 / 16
CMP: INR471

Y/E March
Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh.(INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2012 2013 2014E

96.3 109.0 125.5
15.1 16.7 18.8
9.9 11.1 11.9
10.3 11.6 12.4
17.3 12.7
6.4
28.7 34.9 40.2
36.0 33.3 30.7
47.8 44.2 42.2
38.8 41.6 48.5
2015E
145.4
22.2
14.6
15.2
22.8
47.2
32.1
42.7
46.1
40.5
14.6
25.9
1.1
36.0
12.0
23.6
1.4
33.8
10.4
20.9
16.8
27.5
8.8
17.5
19.6
Neutral
We expect Asian Paints (APNT) to post 14% revenue growth to

INR29.9b in 2QFY14, with 8-10% volume growth in domestic decorative
paints.
Inventory build-up ahead of price hikes should boost volume growth,
in our view.
APNT has taken ~4% price hike in YTD FY14 to pass on the impact of INR
depreciation led raw material cost inflation.
We expect margin expansion of 40bp to 14.2%, as the benefit of low
cost inventory is available in 2QFY14. We expect the currency impact
on margins to manifest 3Q onwards.
Power issues at the Khandala plant are in the process of being
addressed and could help defray overheads over larger base as capacity
utilization improves.
We estimate PAT growth for 2QFY14 at 9%.
The stock trades at 27.5x FY15E EPS of INR15.2. Neutral.

Update on Sleek integration
Comments on volume growth trends and demand scenario
Outlook on raw material scenario
(INR Million)
Y/E March
Volume Growth %
Net Sales
Change (%)
Raw Material/PM
Gross Profit
Gross Margin (%)
Operating Expenses
% of Sales
EBITDA
Margin (%)
Change (%)
Interest
Depreciation
Other Income
PBT
Tax
PAT before Minority
Minority Interest
Adjusted PAT
Change (%)
E: MOSL Estimates
October 2013
FY13
1Q
-2.0
25,373
12.4
14,838
10,535
41.5
6,156
24.3
4,379
17.3
12.7
109
334
326
4,262
1,273
29.9
2,989
106
2,884
9.5
2Q
5.0
26,160
16.5
15,714
10,445
39.9
6,834
26.1
3,612
13.8
14.0
122
357
422
3,555
1,041
29.3
2,514
122
2,392
14.6
3Q
13.0
30,371
18.7
18,133
12,238
40.3
7,292
24.0
4,947
16.3
24.6
79
366
467
4,969
1,466
29.5
3,503
151
3,352
30.5
FY14
4Q
2.0
27,137
6.9
15,523
11,614
42.8
7,878
29.0
3,735
13.8
-0.5
58
489
577
3,766
1,178
31.3
2,589
78
2,511
-3.2
1Q
10.0
28,183
11.1
16,138
12,045
42.7
7,627
27.1
4,418
15.7
0.9
86
599
506
4,239
1,390
32.8
2,850
98
2,752
-4.6
2QE
10.0
29,863
14.2
17,560
12,304
41.2
8,063
27.0
4,241
14.2
17.4
160
510
465
4,035
1,291
32.0
2,744
140
2,604
8.9
3QE
9.0
35,133
15.7
20,377
14,756
42.0
8,818
25.1
5,938
16.9
20.0
140
520
514
5,791
1,853
32.0
3,938
155
3,783
12.8
4QE
10.0
32,297
19.0
18,285
14,012
43.4
9,797
30.3
4,215
13.0
12.8
191
424
495
4,095
1,268
31.0
2,826
110
2,716
8.2
FY13
FY14E
8.0
109,041
13.6
64,209
44,832
41.1
28,160
25.8
16,672
15.3
12.8
367
1,546
1,793
16,552
4,957
29.9
11,595
456
11,139
12.7
8.0
125,476
15.1
72,360
53,117
42.3
34,306
27.3
18,811
15.0
12.8
576
2,053
1,978
18,160
5,803
32.0
12,358
503
11,855
6.4
C40
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
BRIT IN
119.5
93 / 1
784 / 400
3 / 43 / 56
CMP: INR775
Buy
We expect Britannia (BRIT) to post sales of INR15.9b, a growth of ~13%

YoY. Volume growth would be 5-6%, aided by lower base.
We estimate 270bp EBITDA margin expansion to 7%, driven by better

control on overheads and conversion costs.
BRIT is least impacted by INR depreciation, as less than 20% of its raw
material basket is USD-linked.
According to the management, overall volume growth for the industry

has come off by two-third in 12 months.
BRIT is one of the few stocks in our universe where we see strong
probability of earnings upgrade, driven by sustained margin
expansion. The stock trades at 22x FY15E EPS. Buy.

Y/E March
Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh.(INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2012
49.7
2.6
1.7
14.1
29.5
43.5
32.3
34.5
60.5
2013 2014E
55.6 63.3
3.2
4.5
2.3
3.2
19.6 27.1
39.3 38.4
52.2 63.6
37.5 42.6
60.4 63.7
52.9 50.0
50.0
16.1
31.7
1.2
35.9
13.5
25.4
1.5
25.9
11.1
17.8
1.9
2015E
72.7
5.4
3.8
32.0
18.0
77.0
41.5
58.7
50.0
22.0
9.1
14.6
2.3

Volume growth in biscuits
Comments on growth in non-biscuits portfolio
(INR Million)
Y/E March
Net Sales
YoY Change (%)
COGS
Gross Profit
Margins (%)
Other Exp
% of Sales
Total Exp
EBITDA
Margins (%)
YoY Growth (%)
Depreciation
Interest
Other Income
PBT
Tax
Rate (%)
Adjusted PAT
YoY Change (%)
E: MOSL Estimates
October 2013
FY13
1Q
12,216
10.8
7,575
4,642
38.0
3,991
32.7
11,566
651
5.3
37.6
130
95
179
605
170
28.1
435
4.0
2Q
14,028
8.7
9,042
4,986
35.5
4,379
31.2
13,422
606
4.3
-17.6
143
88
266
642
186
29.0
456
-4.8
3Q
14,533
16.5
9,192
5,341
36.8
4,559
31.4
13,752
782
5.4
-4.2
149
91
257
797
228
28.6
570
5.3
FY14
4Q
14,866
13.5
9,369
5,497
37.0
4,337
29.2
13,706
1,161
7.8
70.6
149
104
369
1,277
399
31.2
878
65.7
1Q
14,034
14.9
8,374
5,660
40.3
4,492
32.0
12,867
1,168
8.3
79.5
153
34
267
1,249
386
30.9
863
98.6
2QE
15,852
13.0
9,987
5,865
37.0
4,755
30.0
14,742
1,110
7.0
83.0
157
25
170
1,098
329
30.0
768
68.5
3QE
16,568
14.0
10,272
6,296
38.0
5,169
31.2
15,441
1,127
6.8
44.1
164
24
180
1,119
336
30.0
783
37.5
4QE
16,798
13.0
10,647
6,151
36.6
5,007
29.8
15,654
1,144
6.8
-1.4
163
13
191
1,159
336
29.0
822
-6.4
FY13
FY14E
55,644
12.4
35,184
20,459
36.8
17,255
31.0
52,440
3,204
5.8
18.5
571
377
1,066
3,322
983
29.6
2,339
18.9
63,252
13.7
39,279
23,972
37.9
19,424
30.7
58,704
4,548
7.2
41.9
637
96
808
4,624
1,387
30.0
3,237
38.4
C41
Colgate Palmolive
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
CLGT IN
136.0
168 / 3
1,580 / 1,170
-8 / -6 / -3
CMP: INR1,233
We expect sales growth of 15% YoY to INR8.85b; toothpaste volume

growth is estimated at 10%.
We expect 130bp contraction in EBITDA margin to 20.9% on account of

higher ad spends due to product launches and heightened
promotional activity post P&G's Oral B launch.
Lower tax rate in the base quarter (19.4% in 2QFY13 v/s estimated 25%
in 2QFY14) would result in flat PAT.
P&G's Oral B launch has not generated much response as yet in the
market. However, competitive intensity has stepped up further.
The stock trades at 27.4x FY15E EPS. Neutral.

Y/E March
Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh.(INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2012 2013 2014E

26.2 30.8 35.4
5.8
6.6
7.4
4.5
5.0
5.6
32.8 36.5 40.8
10.9 11.3 11.8
31.2 38.1 45.6
109.4 108.4 97.6
110.1 108.5 97.7
78.0 70.0 70.0
38.5
40.5
28.9
2.0
34.6
33.2
25.2
2.1
31.0
27.7
22.3
2.3
2015E
41.0
8.8
6.3
46.1
12.9
54.1
92.5
92.6
70.0
27.4
23.4
18.7
2.6
Neutral

Volume growth in Toothpastes
Market share trends in Toothpastes
(INR Million)
Y/E March
Toothpaste Volume Gr %
Net Sales
YoY Change (%)
COGS
Gross Profit
Gross Margin (%)
Other operating Expenses
% to sales
Other operating Income
EBITDA
Margins (%)
YoY Growth (%)
Depreciation
Interest
Financial other Income
PBT
Tax
Rate (%)
Adj PAT
YoY Change (%)
E: MOSL Estimates
October 2013
FY13
1Q
11.0
7,361
20.5
2,997
4,364
59.3
2,939
39.9
200
1,625
21.5
21.7
105
0
112
1,632
457
28.0
1,174
16.9
2Q
11.0
7,738
17.7
3,238
4,499
58.1
2,928
37.8
187
1,758
22.2
28.2
106
0
149
1,801
350
19.4
1,451
34.9
3Q
8.0
7,627
13.9
3,045
4,582
60.1
3,294
43.2
211
1,499
19.1
2.4
113
0
117
1,504
393
26.1
1,111
-3.9
FY14
4Q
11.0
8,116
18.3
3,222
4,894
60.3
3,407
42.0
200
1,687
20.3
-0.7
113
0
121
1,695
463
27.3
1,232
-5.8
1Q
11.0
8,446
14.7
3,283
5,164
61.1
3,662
43.4
151
1,653
19.2
1.7
117
0
171
1,707
409
24.0
1,297
10.5
2QE
10.0
8,859
14.5
3,676
5,182
58.5
3,499
39.5
210
1,893
20.9
7.7
119
1
180
1,953
488
25.0
1,465
1.0
3QE
10.0
8,763
14.9
3,435
5,328
60.8
3,724
42.5
230
1,834
20.4
22.3
127
1
152
1,857
505
27.2
1,352
21.8
4QE
9.0
9,367
15.4
3,722
5,645
60.3
3,932
42.0
319
2,032
21.0
20.5
122
2
97
2,005
567
28.3
1,438
16.7
FY13
FY14E
10.3
30,841
17.5
12,502
18,339
59.5
12,568
40.8
797
6,568
20.8
#DIV/0!
437
0
499
6,630
1,663
25.1
4,968
11.3
10.0
35,435
14.9
14,116
21,319
60.2
14,817
41.8
909
7,411
20.4
426.4
485
5
600
7,522
1,970
26.2
5,552
11.8
C42
Dabur India
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
DABUR IN
1,740.7
296 / 5
177 / 121
-2 / 19 / 31
CMP: INR170
We expect sales to grow 12.2% to INR17.1b, led by 8-9% domestic

organic volume growth.
Dabur's rural growth would continue to outperform urban growth, in

our view. In our recent interaction, the management had indicated
that rural markets are growing twice as fast as the urban markets.
INR depreciation puts the earlier margin expansion guidance of 100bp

at risk. We expect weighted average ~5% price hikes and reduction in
ad spends to protect margins.
We estimate marginal 30bp operating margin expansion to 17.7%, led

by improvement in international margins. Dabur has recently launched
Vatika Enriched Coconut Oil with Hibiscus in South India.
We expect PAT growth of 13.4% to INR2.29b.
The stock trades at 26.1x FY15E EPS of INR6.5. Buy.

Y/E March
Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh.(INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2012
52.8
8.7
6.4
3.7
13.2
9.9
37.4
30.0
37.6
2013 2014E
61.5 71.8
10.0 12.1
7.7
9.4
4.4
5.4
19.3 22.7
12.6 15.3
35.1 35.3
38.1 40.7
40.2 42.7
46.0
17.2
35.1
0.8
38.6
13.5
29.7
1.0
2015E
83.7
14.2
11.3
6.5
20.4
18.6
35.1
40.8
42.7
31.4
11.1
24.2
1.4
26.1
9.1
20.3
1.6
Buy

Domestic volume growth and outlook on rural demand
International business outlook
Competitive intensity in Hair Oils
(INR Million)
Y/E March
Volume Growth (%)
Net Sales
YoY Change (%)
Total Exp
EBITDA
Margins (%)
YoY Growth (%)
Depreciation
Interest
Other Income
PBT
Tax
Rate (%)
Minority Interest
Adjusted PAT
YoY Change (%)
E: MOSL Estimates
October 2013
FY13
1Q
12.0
14,620
21.4
12,576
2,044
14.0
14.9
267
213
356
1,921
378
19.7
2
1,541
20.6
2Q
10.5
15,226
20.6
12,582
2,644
17.4
9.3
270
149
275
2,500
464
18.6
13
2,023
16.4
3Q
9.5
16,307
12.3
13,615
2,693
16.5
19.0
305
78
273
2,582
478
18.5
-6
2,111
22.2
FY14
4Q
12.0
15,311
12.3
12,708
2,603
17.0
16.4
282
150
355
2,527
507
20.1
0
2,020
18.4
1Q
9.0
16,511
12.9
14,156
2,355
14.3
15.2
287
133
420
2,355
484
20.6
10
1,860
20.7
2QE
8.0
17,083
12.2
14,059
3,024
17.7
14.3
278
150
324
2,919
613
21.0
13
2,293
13.4
3QE
10.0
19,379
18.8
16,027
3,353
17.3
24.5
314
80
319
3,277
688
21.0
-6
2,595
22.9
4QE
12.0
18,803
22.8
15,387
3,416
18.2
31.2
278
137
390
3,392
726
21.4
-6
2,672
32.3
FY13
FY14E
10.0
61,464
16.3
51,463
10,001
16.3
15.2
1,124
589
1,242
9,530
1,826
19.2
24
7,680
19.3
10.0
71,776
16.8
59,629
12,147
16.9
4.0
1,158
500
1,454
11,943
2,511
21.0
11
9,421
22.7
C43
GlaxoSmithKline Consumer
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
SKB IN
42.1
178 / 3
6,020 / 2,875
-4 / -4 / 39
CMP: INR4,238
Neutral
We expect GSK Consumer to report net sales of INR9.7b, up 17.3% YoY,

led by 7% volume growth, similar to 2QCY13.
We estimate 40bp EBITDA margin expansion to 17.4% on account of

price hikes.
Despite higher tax rates, we estimate 14% growth in PAT.
The stock trades at 30.3x CY14E EPS. Neutral.

Y/E December
Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh.(INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2011 2012 2013E

26.9 30.8 36.0
4.2
4.6
5.2
3.6
4.1
5.0
84.5 98.3 119.1
18.4 16.4 21.1
272.1 322.1 382.7
31.0 30.5 31.1
55.6 54.6 54.2
48.2 49.1 49.1
50.2
15.6
32.2
0.8
40.5
13.2
27.5
1.0
35.6
11.1
31.7
1.2
2014E
41.6
6.5
5.9
139.8
17.4
453.8
30.8
53.6
49.1

MFD volume growth
Outlook on market growth and raw material environment
Comments on Noodles strategy
30.3
9.3
25.0
1.4
(INR Million)
Y/E December
MFD Volume Growth (%)
Net Sales
YoY Change (%)
Total Exp
EBITDA
Margins (%)
YoY Change (%)
Depreciation
Interest
Other Income
PBT
Tax
Rate (%)
Adj PAT
YoY Change (%)
E: MOSL Estimates
October 2013
CY12
1Q
7.0
8,130
14.5
6,514
1,617
20.3
11.3
119
12
479
1,964
645
32.8
1,320
19.3
2Q
7.4
7,297
11.7
6,191
1,107
15.2
12.3
86
8
572
1,585
519
32.8
1,066
29.3
3Q
6.0
8,275
14.9
6,871
1,405
17.0
19.1
77
3
578
1,903
617
32.4
1,286
24.8
CY13
4Q
6.0
7,091
17.8
6,581
510
7.2
-17.3
79
1
606
1,035
338
32.7
697
17.9
1Q
8.0
9,399
15.6
7,691
1,708
18.2
5.6
107
1
680
2,279
715
31.4
1,564
18.5
2Q
7.0
8,529
16.9
7,343
1,187
13.9
7.2
122
2
759
1,822
623
34.2
1,200
12.5
3QE
7.0
9,709
17.3
8,019
1,689
17.4
20.3
170
10
728
2,237
794
35.5
1,443
12.3
4QE
8.0
8,322
17.4
7,697
625
7.5
22.6
178
32
775
1,189
389
32.7
801
15.0
CY12
CY13E
7.0
30,794
14.7
26,156
4,638
15.1
9.5
361
24
2,234
6,487
2,119
32.7
4,368
23.0
7.5
35,959
16.8
30,750
5,209
14.5
12.3
577
45
2,942
7,528
2,520
33.5
5,008
14.7
C44

Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
GCPL IN
340.3
283 / 5
977 / 655
-8 / 2 / 18

Y/E March
Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh.(INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
CMP: INR832
2012
48.5
8.6
5.3
15.5
5.7
82.7
18.7
20.7
29.7
2013 2014E
63.9 78.3
10.0 12.5
6.7
8.4
19.6 24.7
26.7 26.0
93.7 106.7
20.9 23.2
24.8 28.4
40.8 40.5
55.4
10.4
35.4
0.5
43.7
9.1
30.5
0.9
2015E
91.5
15.0
10.4
30.5
23.3
125.5
24.3
30.2
32.8
34.7
8.0
24.2
1.2
28.1
6.8
20.1
1.2
Neutral
We expect GCPL to post 21% revenue growth to INR19.3b in 2QFY14,

led by strong momentum in domestic Household Insecticides and Hair
Colors. Darling Phase II and Soft & Genteel should provide inorganic
boost for the quarter.
Indonesia should see some QoQ recovery. However, full recovery
would be visible only from the beginning of 3QFY14.
We expect 30bp margin contraction to 15% due to higher brand spends.
Benefits of low cost palm oil inventory would be eroded by higher ad
spends.
INR depreciation impact in P&L would be reflected due to MTM on (a)
palm oil payables, and (b) interest cost. Impact on forex loans would
be capitalized. We expect PAT growth of 18% to INR1.9b. However, in
our estimates, we do not build in forex losses.

Comments on volume growth trend in Soaps and sustenance of
turnaround witnessed in Hair Colors
International business (Africa and Latin America) outlook
(INR Million)
Y/E March
Net Sales
YoY Change (%)
EBITDA
Margins (%)
YoY Growth (%)
Depreciation
Interest
Other Income
Forex gain / (loss)
PBT
Tax
Rate (%)
Minority Int
Adj PAT
YoY Change (%)
E: MOSL Estimates
October 2013
FY13
1Q
13,886
39.2
1,988
14.3
39.3
199
164
181
-176
1,630
192
11.8
213
1,225
22.2
2Q
15,953
34.5
2,440
15.3
18.0
206
200
194
-76
2,151
476
22.1
83
1,593
24.8
3Q
16,913
25.8
2,806
16.6
5.8
205
189
188
-27
2,574
674
26.2
178
1,722
3.1
FY14
4Q
17,155
29.7
2,752
16.0
11.5
160
222
281
-48
2,602
531
20.4
19
2,052
22.4
1Q
17,203
23.9
2,208
12.8
11.0
221
240
178
-154
1,769
338
19.1
126
1,305
6.5
2QE
19,303
21.0
2,896
15.0
18.7
240
206
194
0
2,644
642
24.3
120
1,881
18.1
3QE
21,141
25.0
3,700
17.5
31.9
220
194
188
0
3,474
844
24.3
178
2,452
42.4
4QE
20,679
20.5
3,745
18.1
36.1
214
141
319
154
3,863
783
20.3
310
2,770
35.0
FY13
FY14E
63,908
31.7
9,985
15.6
16.0
770
775
844
-328
8,957
1,792
20.0
493
6,672
26.7
78,327
22.6
12,547
16.0
25.7
895
782
880
0
11,750
2,607
22.2
735
8,408
26.0
C45
Hindustan Unilever
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
HUVR IN
2,161.5
1,342 / 22
725 / 432
-5 / 28 / 10
CMP: INR621

Y/E March
Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh.(INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2012 2013 2014E

217.4 252.1 281.3
32.9 40.0 45.5
25.9 33.1 35.4
12.0 15.3 16.4
23.4 27.8
6.9
16.3 21.5 26.8
73.8 71.4 61.3
95.4 94.2 83.5
62.5 55.4 58.0
51.8
38.2
39.7
1.2
40.5
28.9
32.2
1.4
37.9
23.2
28.1
1.5
2015E
320.5
51.3
38.2
17.7
7.9
31.0
57.1
81.2
65.0
35.1
20.0
24.7
1.9
Sell
We expect HUVR to post 5% volume growth and 8% revenue growth.

Consumer demand remains subdued, though it has not deteriorated
QoQ.
We expect 50bp EBITDA margin expansion to 16%, led by higher gross
margins. However, we note that the time lag in passing on the impact
of raw material inflation can put 2HFY14 margins at risk.
Promotional intensity remains high in Detergents and Oral Care.
However, it is coming off selectively in Soaps. Skin Care revenue base
will ease (Fair & Lovely, F&L re-launched in 1QFY13) in 2QFY14. HUVR
has re-launched F&L in white color.
This coupled with higher tax rate (up ~240bps) to restrict PAT growth
to 7% in our view. However it has lowered its tax rate guidance to
24.5-25% vs. earlier 26-27%.
The stock trades at 35.1x FY15E EPS of INR17.7. Sell.

Comments on volume growth and consumer demand environment
Pricing environment, given pressure on gross margins from INR
depreciation
(INR Million)
Y/E March
Volume Growth (%)
S&D EBIT Margin (%)
PP EBIT Margin (%)
Net Sales (incl service inc)
YoY Change (%)
COGS
Gross Profit
Margin %
Operating Exp
% to sales
EBITDA
YoY Change (%)
Margins (%)
Depreciation
Interest
Other Income
PBT
Tax
Rate (%)
Adjusted PAT
YoY Change (%)
E: MOSL Estimates
October 2013
FY13
1Q
9.0
12.2
25.8
63,788
14.1
33,677
30,110
47.2
20,446
32.1
9,664
28.1
15.2
576
53
2,186
11,221
2,676
23.8
8,546
47.7
2Q
7.0
14.3
24.2
63,108
12.5
32,695
30,414
48.2
20,646
32.7
9,767
18.2
15.5
577
63
1,488
10,615
2,556
24.1
8,059
22.9
3Q
5.0
12.4
28.3
66,548
11.7
34,191
32,357
48.6
21,470
32.3
10,888
12.2
16.4
593
75
1,337
11,557
2,827
24.5
8,730
14.5
FY14
4Q
6.0
12.0
25.8
64,658
12.1
34,326
30,333
46.9
20,615
31.9
9,718
16.6
15.0
614
60
1,058
10,102
2,293
22.7
7,808
17.7
1Q
4.0
13.4
26.8
68,090
6.7
34,828
33,262
48.9
22,406
32.9
10,856
12.3
15.9
664
62
1,768
11,897
3,046
25.6
8,851
3.6
2QE
5.0
14.5
24.6
68,157
8.0
34,760
33,397
49.0
22,492
33.0
10,905
11.6
16.0
646
38
1,517
11,738
3,111
26.5
8,628
7.1
3QE
8.0
12.0
28.0
75,200
13.0
38,201
36,998
49.2
24,440
32.5
12,558
15.3
16.7
664
45
1,203
13,053
3,459
26.5
9,594
9.9
4QE
8.0
11.8
26.0
75,847
17.3
40,132
35,715
47.1
24,571
32.4
11,144
14.7
14.7
677
5
1,010
11,473
3,113
27.1
8,359
7.1
FY13
FY14E
8.0
12.5
25.3
258,102
16.7
134,888
123,214
47.7
83,176
32.2
40,037
21.6
15.5
2,360
251
6,069
43,495
11,653
26.8
33,143
24.6
7.0
13.0
26..0
287,293
11.3
147,921
139,372
48.5
93,909
32.7
45,463
13.6
15.8
2,651
150
5,498
48,160
12,729
26.4
35,432
6.9
C46
ITC
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
ITC IN
7,738.1
2,700 / 43
380 / 259
8 / 8 / 25

Y/E March
Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh.(INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2012 2013 2014E

248.0 296.1 335.4
88.5 106.3 124.2
49.9 61.6 74.2
7.9
9.5 10.9
22.3 20.4 15.3
24.0 26.3 28.9
32.8 36.1 37.8
45.4 50.2 53.9
66.7 76.1 76.1
44.5
14.5
29.5
1.3
36.6
13.3
24.3
1.8
31.9
12.1
20.7
2.0
2015E
385.4
142.1
85.5
12.7
16.5
32.0
39.8
56.1
76.1
27.4
10.9
17.9
2.4
CMP: INR349
Neutral
We expect ITC to post 2.5-3% volume decline in Cigarettes. Traction in

64mm Cigarettes is compensating for the decline in the 69mm segment,
in our view.
Net sales are likely to grow 12% to INR80.9b.
We expect margin expansion of 80bp to 38%, led by Cigarettes, where

ITC has taken 17-18% price hike YTD. One more round of price hike is
likely in Gold Flake Premium and Gold Flake.
Non-Cigarette FMCG sales growth would moderate to 17-18%. We build

in EBIT loss of INR120m.
We estimate 13.8% PAT growth to INR20.9b.

Cigarette volume trend post the price hikes and update on 64mm
segment
Demand outlook for FMCG-Others
Profitability in FMCG-Others portfolio
Signs of pick-up in Hotels business
INR Million
Y/E March
Cigarette Vol Gr (%)
Cigarette-net EBIT Margin (%)
Non Cigarette FMCG Loss
Net Sales
YoY Change (%)
Total Exp
EBITDA
Growth (%)
Margins (%)
Depreciation
Interest
Other Income
PBT
Tax
Rate (%)
Adj PAT
YoY Change (%)
E: MOSL Estimates
October 2013
FY13
1Q
1.5
57.5
-388
67,065
14.6
43,313
23,752
21.3
35.4
1,948
138
1,699
23,366
7,344
31.4
16,021
20.2
2Q
0.5
61.4
-303
72,266
18.7
45,383
26,883
21.0
37.2
1,889
233
1,850
26,611
8,247
31.0
18,364
21.3
3Q
1.5
61.1
-240
77,121
22.8
48,543
28,578
20.0
37.1
2,052
252
3,298
29,572
9,053
30.6
20,519
20.6
FY14
4Q
2.5
58.3
119
82,574
18.8
55,511
27,063
18.9
32.8
2,067
243
2,540
27,293
8,014
29.4
19,280
19.4
1Q
-2.0
63.4
-189
74,107
10.5
46,194
27,913
17.5
37.7
2,153
170
2,032
27,622
8,709
31.5
18,913
18.1
2QE
-3.0
62.2
-120
80,938
12.0
50,181
30,756
14.4
38.0
2,077
198
2,164
30,645
9,745
31.8
20,900
13.8
3QE
2.0
61.8
230
88,304
14.5
54,748
33,555
17.4
38.0
2,257
214
3,694
34,778
11,025
31.7
23,753
15.8
4QE
3.0
59.0
250
96,202
16.5
64,232
31,970
18.1
33.2
2,317
199
3,033
32,488
10,554
32.5
21,933
13.8
FY13
FY14E
1.5
59.6
-813
299,013
18.9
192,738
106,275
20.1
35.5
7,956
865
9,387
106,842
32,658
30.6
74,184
20.4
0.5
60.3
810
339,550
13.6
215,356
124,195
16.9
36.6
8,805
780
10,923
125,533
40,033
31.9
85,500
15.3
C47
Marico
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
MRCO IN
643.8
141 / 2
251 / 191
-4 / -1 / 4
CMP: INR220
Buy
We expect sales growth of 10.6% to INR12.8b, led by ~10% domestic

organic volume growth. We expect Parachute, Saffola and value-added
hair oils to post 6%, 10% and 15% volume growth, respectively.
International business should post 15% revenue growth, in our view.
We estimate a gross margin decline of 50bp, as copra prices are

increasing. Also, MRCO has taken selective price cuts in Parachute
and Saffola to drive volume growth.
MRCO has guided 250-300bp YoY international margin expansion.
Expect PAT growth of 18%.

Y/E March
Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh.(INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2012
39.7
4.7
3.2
5.2
34.2
18.6
28.0
30.5
13.5
2013 2014E
45.8 51.9
6.1
7.3
3.9
4.8
6.0
7.5
15.6 24.4
30.5 37.1
19.6 20.1
28.8 30.0
12.5 10.7
42.3
11.8
29.2
0.3
36.6
7.2
23.6
0.3
29.4
5.9
19.1
0.4
2015E
60.3
8.6
5.5
8.6
14.9
44.7
19.2
29.9
9.3
25.6
4.9
15.8
0.4

Comments on volume growth trends in key categories
Performance of Paras brand
Recovery in Middle East business
Management comments on Kaya and input cost outlook
(INR Million)
Y/E March
Domestic organic vol gr (%)
Net Sales
YoY Change (%)
COGS
Gross Profit
Gross margin (%)
Other Expenditure
% to Sales
EBITDA
Margins (%)
YoY Change (%)
Depreciation
Interest
Other Income
PBT
Tax
Rate (%)
Minority Interest
Adjusted PAT
YoY Change (%)
E: MOSL Estimates
October 2013
FY13
1Q
14.0
12,672
21.7
6,469
6,203
48.9
4,364
34.4
1,839
14.5
47.0
193
135
150
1,660
403
24.2
0
1,258
48.0
2Q
10.0
11,559
19.5
5,606
5,953
51.5
4,476
38.7
1,477
12.8
27.8
225
145
75
1,182
293
24.8
30
859
9.7
3Q
9.0
11,640
10.9
5,587
6,053
52.0
4,433
38.1
1,620
13.9
31.1
195
146
127
1,406
360
25.6
-23
1,068
21.2
FY14
4Q
8.0
9,973
9.7
4,410
5,563
55.8
4,373
43.9
1,189
11.9
9.3
253
113
115
938
189
20.1
26
723
1.2
1Q
10.0
13,797
8.9
6,710
7,086
51.4
4,816
34.9
2,270
16.5
23.5
206
121
167
2,109
512
24.3
44
1,553
23.5
2QE
10.0
12,779
10.6
6,262
6,517
51.0
4,831
37.8
1,687
13.2
14.2
258
145
98
1,381
338
24.5
30
1,013
18.0
3QE
12.0
13,403
15.1
6,701
6,701
50.0
4,959
37.0
1,742
13.0
7.6
224
146
159
1,531
367
24.0
-23
1,186
11.0
4QE
12.0
12,000
20.3
5,644
6,356
53.0
4,718
39.3
1,638
13.6
37.7
287
164
221
1,408
331
23.5
26
1,051
45.4
FY13
FY14E
11.0
45,843
15.5
22,073
23,771
51.9
17,646
38.5
6,125
13.4
29.5
866
540
468
5,186
1,245
24.0
79
3,862
21.1
51,949
13.3
25,288
26,661
51.3
19,324
37.2
7,337
14.1
19.8
975
576
644
6,429
1,549
24.1
-76
4,804
24.4
C48
Nestle India
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
NEST IN
96.4
491 / 8
5,865 / 4,306
-2 / 6 / 12
CMP: INR5,097
Neutral
We expect Nestle India (NEST) to report net sales of INR24b, up 13.7%

YoY on a low base; we expect growth to be price-led.
Our channel checks indicate that discretionary consumption and

processed foods offtake remains soft.
We estimate flat EBITDA margin at 21%.
PAT would grow 12% to INR2.94b on account of higher capital costs

and tax rates.
Recovery in volume growth remains a key factor to monitor, as we

believe stock performance will hinge on the same.
The stock trades at 36.3x CY14E EPS. Neutral.

Y/E December
Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh.(INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2011 2012 2013E

74.9 83.0 93.6
15.4 18.3 20.4
10.0 11.0 11.9
103.8 114.1 123.1
19.6
9.9
7.9
132.1 186.5 238.4
94.0 71.6 58.0
88.3 59.6 55.9
54.3 49.4 54.9
52.5
41.2
34.6
0.9
47.8
29.2
29.0
0.9
44.3
22.9
25.8
1.1
2014E
109.4
23.9
14.5
150.2
22.0
291.3
56.7
62.3
62.0
36.3
18.7
21.6
1.5

Volume growth
Performance of new launches
(INR Million)
Y/E December
Net Sales
YoY Change (%)
COGS
Gross Profit
Margin (%)
Operating Exp
EBITDA
Margins (%)
YoY Growth (%)
Depreciation
Interest
Other income
PBT
Tax
Rate (%)
Adjusted PAT
YoY Change (%)
E: MOSL Estimates
October 2013
CY12
1Q
20,475
13.1
9,384
11,091
54.2
6,647
4,444
21.7
15.3
528
23
136
4,029
1,272
31.6
2,757
5.0
2Q
19,866
12.7
9,024
10,842
54.6
6,554
4,288
21.6
24.5
673
220
113
3,507
1,085
30.9
2,423
10.3
3Q
21,156
7.8
9,712
11,444
54.1
7,010
4,434
21.0
8.1
735
44
173
3,827
1,197
31.3
2,630
-2.0
4Q
21,526
10.1
9,644
11,882
55.2
6,926
4,957
23.0
20.1
835
99
211
4,233
1,293
30.5
2,940
9.7
1Q
22,481
9.8
10,158
12,323
54.8
7,113
5,210
23.2
17.2
821
79
200
4,510
1,581
35.1
2,929
6.2
CY13
2Q
3QE
22,132
24,057
11.4
13.7
10,004
10,994
12,128
13,063
54.8
54.3
7,357
8,011
4,771
5,052
21.6
21.0
11.3
13.9
887
845
85
80
249
197
4,048
4,323
1,334
1,379
33.0
31.9
2,714
2,944
12.0
11.9
4QE
24,936
15.8
11,410
13,526
54.2
8,198
5,328
21.4
7.5
800
106
132
4,554
1,270
27.9
3,285
11.7
CY12
CY13E
83,023
10.8
37,764
45,259
54.5
27,136
18,122
21.8
18.1
2,772
387
633
15,597
4,847
31.1
10,750
7.4
93,605
12.7
42,565
51,040
54.5
30,679
20,361
21.8
12.4
3,354
350
778
17,435
5,564
31.9
11,871
10.4
C49
Pidilite Industries
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
PIDI IN
506.1
128 / 2
303 / 189
2 / -8 / 20

Y/E March
Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh.(INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
CMP: INR253
2012
28.2
4.9
3.6
7.0
7.8
26.6
26.3
29.0
36.0
2013 2014E
33.3 38.2
6.1
7.2
4.4
5.1
8.5
9.7
21.0 14.0
34.0 40.2
24.9 24.1
31.8 32.6
35.5 36.3
36.2
9.5
25.3
0.8
29.9
7.4
20.6
1.0
26.2
6.3
17.3
1.2
2015E
45.5
8.5
6.1
11.7
21.4
47.7
24.6
33.1
35.9
21.6
5.3
14.3
1.4
Neutral
We expect Pidilite Industries (PIDI) to post 14% revenue growth, led

by high single-digit volume growth in the Consumer and Bazaar
segments. Growth in Industrial Chemicals will continue to be muted,
in our view.
Continued weak macro environment would put further pressure on
PIDI's revenues.
EBITDA margins would remain flat YoY at 18%.
INR depreciation led raw material inflation would adversely impact
margins.
PAT growth is likely to be muted at 6% due to lower tax rate of 22.5%
in base quarter.
Uncertainty regarding the synthetic elastomer project continues and
the company is yet to take a call on the project implementation.
The stock trades at 21.6x FY15E EPS of INR11.7. We see downside risks
to our earnings estimate.

Volume growth in Fevicol
Performance of Construction Chemicals business
Outlook on Industrial segment
Progress on Elastomer project, if any
(INR Million)
Y/E March
Sales
Change (%)
Gross Profit
Gross Margin %
Operating Expenses
% of sales
EBITDA
EBITDA Margin %
Change (%)
Depreciation
Interest
Other Income
PBT
Tax
Adj PAT
Change (%)
E: MOSL Estimates
October 2013
FY13
1Q
9,125
18.8
4,087
44.8
2,180
23.9
1,907
20.9
25.4
124
91
139
1,831
498
27.2
1,333
23.6
2Q
8,209
16.0
3,680
44.8
2,212
26.9
1,468
17.9
14.5
128
18
121
1,443
325
22.5
1,117
29.3
3Q
8,376
21.6
3,770
45.0
2,257
26.9
1,514
18.1
27.3
141
86
164
1,450
413
28.5
1,037
19.9
FY14
4Q
7,608
16.7
3,645
47.9
2,397
31.5
1,248
16.4
30.2
139
36
235
1,307
352
26.9
956
27.6
1Q
10,148
11.2
4,681
46.1
2,441
24.1
2,240
22.1
17.5
153
36
90
2,140
595
27.8
1,546
16.0
2QE
9,358
14.0
4,164
44.5
2,480
26.5
1,684
18.0
14.8
151
16
138
1,655
472
28.5
1,184
5.9
3QE
9,799
17.0
4,400
44.9
2,597
26.5
1,803
18.4
19.1
167
82
186
1,741
496
28.5
1,245
20.0
4QE
8,916
17.2
4,139
46.4
2,691
30.2
1,449
16.3
16.1
163
95
334
1,525
435
28.5
1,090
14.1
FY13
FY14E
33,317
18.3
15,182
45.6
9,046
27.2
6,136
18.4
24.0
532
232
659
6,031
1,588
26.3
4,443
24.9
38,222
14.7
17,385
45.5
10,208
26.7
7,176
18.8
17.0
634
229
748
7,062
1,997
28.3
5,064
14.0
C50
Radico Khaitan
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
RDCK IN
132.6
17 / 0
156 / 89
1 / -6 / 1
CMP: INR128
Buy
We expect Radico Khaitan (RDCK) to post 12% revenue growth to

INR3.3b in 2QFY14, led by 7% volume growth.
We expect premiumization trend to continue, with double-digit

growth in premium portfolio.
EBITDA margin would expand 70bp to 17.2%, led by higher gross

margins and better control on overheads.

Y/E March
Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh.(INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2012
11.4
1.7
0.8
6.0
10.9
52.4
11.3
9.9
15.4
2013 2014E
12.6 14.1
2.0
2.3
0.9
1.1
6.7
8.0
11.5 19.5
57.0 63.6
12.3 13.3
10.3 11.2
17.6 17.6
16.6
1.9
11.4
1.2
14.9
1.8
10.4
1.6
12.5
1.6
9.0
1.2
2015E
16.5
2.8
1.4
10.7
33.0
72.4
15.7
13.3
17.6

Trade issues in Tamil Nadu
ENA price trend and outlook
9.4
1.4
7.2
1.6
(INR Million)
Y/E March
Net sales
YoY Change (%)
Total Expenses
EBITDA
Margins (%)
YoY Change (%)
Depreciation
Interest
Other Income
PBT
Tax
Rate (%)
Adjusted PAT
YoY Change (%)
E: MOSL Estimates
October 2013
FY13
1Q
3,038
2.1
2,514
524
17.3
22.4
90
168
62
328
75
22.9
253
21.8
2Q
2,970
13.9
2,479
491
16.5
10.7
85
159
84
331
110
33.3
221
49.1
3Q
3,260
8.1
2,760
501
15.4
12.1
90
216
85
279
95
34.1
184
-22.3
FY14
4Q
3,315
16.8
2,911
403
12.2
1.5
88
182
74
207
40
19.3
167
-1.4
1Q
3,573
17.6
2,963
611
17.1
16.5
95
204
85
396
90
22.7
306
21.2
2QE
3,333
12.2
2,760
573
17.2
16.7
100
151
91
412
119
29.0
293
32.6
3QE
3,652
12.0
3,060
592
16.2
18.2
106
206
92
371
108
29.0
264
43.4
4QE
3,556
7.3
3,032
524
14.7
30.0
122
153
71
320
118
36.8
203
21.2
FY13
FY14E
12,584
10.0
10,597
1,987
15.8
14,114
12.2
11,814
2,300
16.2
15.8
423
714
338
1,500
435
29.0
1,065
19.5
353
726
304
1,211
320
26.4
891
17.0
C51
United Spirits
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
UNSP IN
145.3
381 / 6
2,815 / 990
14 / 33 / 99

Y/E March
Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh.(INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2012 2013 2014E

82.1 92.9 104.7
11.9 12.6 14.5
2.4
3.6
6.0
19.5 29.6 41.1
-30.9 51.4 39.1
397.9 693.3 620.4
4.9
4.3
6.6
8.3
8.4
9.8
15.4 13.5 10.9
134.2
6.6
35.7
0.1
88.6
3.8
31.3
0.2
63.7
4.2
26.8
0.2
2015E
121.6
19.6
9.6
66.0
60.5
681.3
9.7
13.1
0.7
39.7
3.8
19.5
0.0
CMP: INR2,621
Buy
We expect United Spirits (UNSP) to post 10% revenue growth to

INR24.4b in 2QFY14, led by 5% volume growth. Lower base (volume
decline of 1% in 2QFY13) should aid performance, though the Tamil
Nadu issue continues.
The premium segment would grow at a faster pace, aided by

up-trading.
We expect margin expansion of 110bp to 12.5%.
PAT would more than double to INR884m (PAT had declined 75% in
2QFY13).
The stock trades at 39.7x FY15E EPS of INR66. Buy.

Trade issues in Tamil Nadu
ENA price trend and outlook
Debt reduction
Updates on Diageo integration
(INR Million)
Y/E March
Volume Growth %
ENA Price/Case
Net Sales
YoY Change (%)
Total Exp
EBITDA
Margins (%)
Depreciation
Interest
PBT from operations
Other income
PBT
Tax
Rate (%)
PAT
YoY Change (%)
Reported PAT
E: MOSL Estimates
October 2013
FY13
1Q
2
151
20,573
6.3
17,223
3,350
16.3
162
1,656
1,532
607
2,139
689
32.2
1,450
5.9
0
1,450
2Q
-1
159
22,207
24.0
19,676
2,531
11.4
188
1,700
643
-48
595
202
34.0
393
-75.3
0
393
3Q
7
172
21,740
11.3
19,281
2,459
11.3
173
1,636
651
608
1,258
453
36.0
806
64.6
0
806
FY14
4Q
4
176
20,577
10.5
18,584
1,993
9.7
195
1,570
228
836
1,065
288
27.1
777
878.1
-217
560
1Q
0.2
171
21,924
6.6
19,142
2,782
12.7
195
1,595
992
781
1,773
592
33.4
1,181
-18.5
0
1,181
2QE
5
173
24,428
10.0
21,374
3,053
12.5
244
1,649
1,160
180
1,340
455
34.0
884
125.2
0
884
3QE
6
175
24,784
14.0
21,438
3,346
13.5
225
1,586
1,534
170
1,704
579
34.0
1,125
39.6
0
1,125
4QE
6
175
24,075
17.0
20,911
3,165
13.1
240
1,545
1,380
212
1,592
552
34.7
1,040
33.9
0
1,040
FY13
FY14E
3
165
85,097
12.8
74,763
10,334
12.1
718
6,562
3,054
2,002
5,056
1,632
32.3
3,424
278.0
-217
3,208
5
173
95,210
11.9
82,865
12,346
13.0
904
6,375
5,066
1,343
6,409
2,179
34.0
4,230
23.5
0
4,230
C52
September 2013 Results Preview | Sector: Financials - Banks
Financials Banks
Companies Covered
A quarter marked by significant volatility and sharp earnings downgrades
Axis Bank
At the financial year's beginning, supportive growth and inflation dynamics paved
the way for further monetary easing, which could have ensured better growth and
asset quality for banks in 2HFY14. However, two important events (from July 15, 2013,
RBI tightened liquidity and inverted the yield curve, and on September 20 attempts
were made to flatten the yield curve at a higher level) during the quarter led to
significant volatility and earnings downgrades for financials. RBI's future course of
action is largely macro economic data dependent and on events in external markets.
In our view, in the short term, inflation and INR are likely to be major factors influencing
the monetary action. Thus, interest rates are likely to remain high, which will have an
impact on growth and asset quality and resultantly earnings of financial stocks.
Bank of Baroda
Bank of India
Canara Bank
HDFC Bank
Federal Bank
ICICI Bank
Indian Bank
IndusInd Bank
In this uncertain environment, we remain selective and prefer banks with strong
capitalization (risk of dilution low) and liability franchise (emerge stronger in the
upturn of economy), management stability, P&L strength (to absorb credit cost risk)
and those who have recognized stress upfront (risk of setback remains low). We
downgrade UNBK from Under review to Neutral and CBK to Neutral from Buy. Top
picks are: ICICIBC and Bank of Baroda. Preferred beta names are YES, OBC and AXSB.
ING Vysya
Kotak Mahindra Bank
Oriental Bank
State Bank
Union Bank
Yes Bank

CMP
(INR)
27.09.13
Financials - Banks
Private Banks
Axis Bank
1,031
Federal Bank
298
HDFC Bank
610
ICICI Bank
923
IndusInd Bank
377
ING Vysya Bank
510
Kotak Mahindra Bank*
682
Yes Bank
305
Pvt Bkg.Sector Aggregate
PSU Banks
Bank of Baroda
501
Bank of India
163
Canara Bank
225
Indian Bank
70
Oriental Bank
150
478
State Bank
1,642
Union Bank
115
PSU Bkg. Sector Aggregate
*Standalone
Rating
(INR Million)
Net Interest Income
Sep.13
Var.
Var.
% YoY % QoQ
Operating Profit
Sep.13
Var.
Var.
% YoY % QoQ
Net Profit
Sep.13
Var.
% YoY
Var.
% QoQ
Buy
Buy
Neutral
Buy
Buy
Buy
Neutral
Buy
27,802
5,013
44,851
38,736
6,823
4,567
9,178
6,524
143,494
19.5
-0.9
20.2
14.9
33.9
23.8
21.1
24.5
18.6
-3.0 23,782
-1.6
3,348
1.5 32,753
1.4 35,178
0.4
5,494
7.4
3,052
0.1
6,044
-1.0
5,889
0.4 115,540
9.2
-4.3
27.4
10.2
30.9
34.1
25.3
21.5
16.6
-16.4
-16.4
-0.9
-7.8
-14.4
-6.6
-22.4
-13.4
-9.7
11,958
1,633
19,915
20,684
3,005
1,739
3,426
3,165
65,525
6.4
-24.1
27.7
5.7
20.1
15.8
22.2
3.4
12.2
-15.1
54.6
8.0
-9.1
-10.2
-0.7
-15.0
-21.0
-5.7
Buy
Neutral
Neutral
Buy
Buy
Buy
Buy
Neutral
28,615
25,787
20,488
11,097
12,912
39,378
116,796
18,920
273,991
0.0
17.4
4.7
-0.9
11.6
7.9
6.4
2.3
6.3
-1.0 20,394
1.6 18,630
2.9 14,225
1.2
7,064
-1.2
9,316
0.8 26,493
1.5 65,133
-0.9 12,121
0.9 173,376
-14.0
0.5
11.0
-22.2
1.1
4.6
-11.4
-4.8
-6.3
-16.3
-14.6
-25.1
-17.8
-14.4
-10.9
-13.7
-14.1
-15.0
7,956
5,101
3,709
2,026
2,410
8,259
23,798
2,959
56,219
-38.9
69.0
-43.9
-59.2
-20.2
-22.5
-34.9
-46.6
-32.6
-31.9
-47.1
-53.2
-36.2
-31.8
-35.2
-26.6
-47.2
-35.2
Alpesh Mehta (Alpesh.Mehta@MotilalOswal.com) / Sohail Halai (Sohail.Halai@MotilalOswal.com)

October 2013
C53
A quarter marred by significant earnings downgrades

In 2QFY14 preview, we have downgraded the estimates for our coverage universe by
7-11% to factor lower net trading gains, lower margins (~10bp lower than what was
expected earlier) and higher credit cost (increase of 5-7bp). While the impact is likely
to be felt across the board, state-owned banks are expected to be impacted the most
(downgrade of 9/15% over FY14E/15E), while private banks are likely to sail through
with less dent on earnings (6/8% over FY14E/15E).
Financials: Earnings downgrade led by increased risk in the system (INR b)
Aggregate Private Banks
Aggregate State-owned Banks
Aggregate Banks
Old Est.
New Est.
Chg (%)
Old Est.
New Est.
Chg (%)
Old Est.
New Est.
FY14 FY15 FY14 FY15 FY14 FY15 FY14 FY15 FY14 FY15 FY14 FY15 FY14 FY15 FY14 FY15
NII
601
722
586
693
-2.5
-4.0 1,136 1,318 1,110 1,277
-2.3
-3.1 1,738 2,040 1,696 1,970
PPP 514
625
496
591
-3.5
-5.5
776
920
749
876
-3.5
-4.8 1,290 1,545 1,245 1,466
PAT 298
359
280
330
-6.1
-8.1
298
363
273
311
-8.5 -14.5
596
722
553
641
Chg (%)
FY14 FY15
-2.4
-3.4
-3.5
-5.1
-7.3 -11.3
Source: MOSL
Outlook on 2QFY14 earnings - levers for profitability are less

NIMs are expected to be flat/decline marginally, despite sharp rise in cost of funds as
the bankers enjoyed strong pricing power in the quarter. Though loan growth has
picked up, non SLR investments are expected to moderate. Thus, customer asset growth
is likely to be the trend witnessed so far. Incremental stress additions are expected to
be in line with the guidance given during 1Q results. However, banks' guidance for 2H/
full year is expected to worsen. Forex income is expected to be strong (especially for
banks with higher foreign operations) due to significant volatility in forex markets.
While net investment gain is expected to be significantly lower/negative, exact
amount of losses on investment portfolio is difficult to quantify. Some of the problem
faced are a) Amount of portfolio transferred to HTM during the quarter b) Within
available portfolio non interest sensitive AFS portfolio like Treasury bills, Cash mgmt
bills etc c) exact cut of yield on portfolio d) excess SLR held in the portfolio and e) back
to back hedging used on the interest sensitive portfolio like swaps etc.
Hence, for 2QFY14, we expect NII/operating profit growth of 10%/2% YoY, while PAT is
expected to be lower by 14%+ YoY. Higher margins pressure, weak fees, opex, sharp
fall in QoQ trading gains and asset quality pressures will significantly pressurize
earnings of state-owned banks. For 2QFY14, we expect state-owned banks to report
NII growth of 6%, though operating profit and PAT is expected to decline by ~6% and
33% YoY respectively. Private banks on the other hand are expected to suffer from
lower net trading gains and weak fees. While pressure on revenue drivers has
increased, flexibility on the opex side will help earnings of private banks, in our view.
We expect private banks to report NII/operating profit/profit growth of 19%/17%/12%
YoY for 2QFY14.
Margins to be stable in 2QFY14, but expect moderation in 2H

Led by significant liquidity tightness (CD ratio at lifetime high of 78%), banks have a
pricing power in the system, indicated by an increase in base rates (up 25bp for private
and roll back of the cut in the quarter by state-owned banks). Further, our discussions
with banks suggest that spreads over base rate for incremental lending has risen and
incremental net slippages are likely to be lower QoQ due to seasonal factors. Thus,
October 2013
C54
NIMs are likely to be flat/decline marginally in 2Q despite a) rise in cost of funds, b)

higher CRR maintenance impact (from 70% on an average daily basis to 99%) and c)
lower arbitrage opportunities due to RBI move of addressing liquidity requirements
from MSF window v/s LAF earlier and sharp rise in MSF spread over Repo to 300bp (on
September 20 reduced to 200bp) v/s 100bp earlier. Banks with excess liquidity on
balance sheet like CBK, BOI and BOB can surprise positively by increasing the CD ratio.
In 2HFY14, we expect moderation in margins as a) cost of funds will hit margins, b)
bond markets volatility likely to reduce, leading to large corporate shifting to bond
markets again, c) corporates realigning their funding requirements with a changed
scenario and d) expected high net slippages/restructuring in 2H. Positive surprises
however can come from a) higher retail liabilities growth and b) change in liquidity
stance by RBI.
2Q - Sharp improvement in loan growth; macro challenges will keep business

growth low in 2H
For the fortnight ended September 20, 2013, loans/deposits each grew by 18%/14%
YoY and on a sequential basis were up 1.1%/3.8% respectively. Over the last five to six
fortnights, loan growth has picked up from 14% to 18% due to shifting of funding
requirement by corporates from bond market (on sharp rise in rates) to traditional
bank funding (as base rate remains low). With the all-time high CD ratio of 78% and
continued tightness in liquidity, we expect an increase in lending/deposits rates.
Thus, loan growth is expected to moderate and expect some pick-up in deposit growth
as real interest rates becomes positive. Sequential depreciation of 4/5% in INR may
help banks with higher proportion of international portfolio (BoB, BoI and ICICIBC) to
report better growth rates.
Sanctions pipeline narrows down; more reforms needed to instill confidence

Given that investment pick-up has a direct correlation with other segments of economy,
it remains critical for the Government to speed up the reforms process, faster
implementation of reforms already announced and remove supply side constraints.
Our interactions with bankers suggest that new project proposals are not yet picking
up. However, business sentiments, after showing some improvement in 1Q, have
weakened in 2Q. Even if new sanctions were to take place, actual disbursements will
take 6-9 months. Till then working capital, retail and agriculture are likely to be the
key growth drivers. We expect a moderate growth of 13-14% over FY13-15E.
RBI actions led to delay in recovery and change in outlook for asset quality
In 1QFY14, looking at the macro scenario, we expected an improvement in asset quality
from 2HFY14. However, post RBI's actions and continued sharp depreciation in INR,
we expect stress levels to remain high at least till end-FY14. We factor a net slippage
ratio (for state-owned banks) of 2% in 2QFY14, compared to 3.3% in 1QFY14. 1Q is
seasonally the worst quarter for banks, and with the expectation of recovery from
agriculture segment, we expect net slippages (at high levels) to be lower. Retail focused
banks are likely to be better placed (most private sector banks). However, unlike the
past, retail delinquency has started to increase. Thus, NPAs are expected to rise in this
segment too but will remain manageable.
October 2013
C55
Restructuring would continue - CDR references, a key indicator

Lag impact of the cases (amounting to INR700b+ (1.2% of loans)) referred in 1HCY13
will be felt in 2QFY14 as some of them get approvals during the quarter. Further, our
channel checks suggest that incremental flow in CDR and in bilateral remains high in
2QFY14 as well. SEBs restructuring under the FRP has further been delayed and is
expected to take place in 3QFY14. Provisioning would also be higher led by (1) increase
in provision requirement on standard restructured loans (0.75% to be spread over
four quarters of FY14), (2) incremental restructuring would attract provisions of 5%
and (3) net slippages to remain elevated. In 2HFY14, we expect additional provisioning
requirement for the un-hedged forex exposures of corporates.
Trading gains: From expected earnings driver in 1QFY14 to a drag in 2QFY14

RBI's actions led to sharp volatility in bond markets. 1/5/10-year G-sec yields touched
a peak of 11.7/9.7/9.2% from a low of 7.6/7.7/7.4% in 2QFY14, before settling at 9.3/8.8/
8.7% as on September 30. Significant volatility in yields during the quarter may help
banks with strong treasury desks to report decent profits. Further, significant volatility
in currency markets will also help banks to report strong forex revenue in the quarter.
As a one-off measure, RBI allowed banks to transfer investment portfolio from AFS to
HTM and amortize the MTM losses on AFS portfolio if any, over the next three quarters.
Higher impact expected for PNB, SBIN, CBK, OBC, AXSB and YES.
Other earnings drivers: Fees well factored; pension liabilities unascertainable
Moderate economic growth, lower capex etc will keep corporate fees under
pressure. RBI's strict stance on retail products will also keep retail fees under
check.
Moderation in revenue for private banks may be partially compensated by flexible
opex structure.
Situation remains grim for state-owned banks on the opex front as it largely
remains fixed. Further, adoption of LIC's new mortality table will exert pressure
on earnings.
Sector strategy: Uncertain environment; remain selective
The policy stance to contain inflationary expectation in the medium term and
protect INR in the near term will keep interest rates higher in the system, thus
delaying growth revival. Higher interest rates, with moderating economic growth,
will keep pressure on business growth and asset quality of Indian financials. Stateowned banks to be more impacted due to high share of corporate business.
From uncertain policy stance of inverted yield curve (negative for financials), the
move towards flattening curve is positive from earnings perspective (especially
on margins), in our view. However, RBI's stance is contingent on various domestic
and external developments, which if required can be reverted. Thus, the overall
macro environment is likely to remain uncertain for financials.
Considering the current tightness in liquidity, high CD ratio of 78% and increasing
deposit/credit gap, interest rates, in both retail liability and lending side, should
rise. Private banks have already increased the base rates by 20-25bp and some
October 2013
C56
PSU banks increased it by 10-25bp. If the current tightness continues, then there is
a possibility of further 25bp hike in lending rates over three to six months.
In this current uncertainty, we remain selective and prefer banks with strong
capitalization (risk of dilution low) and liability franchise (emerge stronger in the
upturn of economy), management stability, P&L strength (to absorb credit cost
risk), levered to interest rate reversal cycle (earnings cushion) and those who
have recognized stress upfront (risk of setback remains low). Top picks: ICICIBC
and Bank of Baroda. Preferred beta names are YES, OBC and AXSB.
deposit growth remains moderate
14.1
71.8
13.8
1QFY14
20-Sep
11.1
13.2
3QFY13
4QFY13
69.0
70.9
13.9
64.8
14.4
13.5
62.3
1QFY13
61.0
17.0
3QFY12
4QFY12
18.5
17.5
56.3
58.3
54.9
1QFY12
2QFY12
16.8
15.9
52.1
20-Sep
49.9
56.2
1QFY14
4QFY11
54.2
4QFY13
3QFY11
53.5
3QFY13
14.4
50.3
2QFY13
47.1
48.1
1QFY13
2QFY11
47.6
4QFY12
1QFY11
46.9
3QFY12
17.7
17.2
15.0
13.7
43.7
44.9
46.4
13.9
41.5
2QFY12
42.7
15.9
15.1
40.9
1QFY12
3QFY10
4QFY10
18.7
16.5
39.4
4QFY11
22.0
19.8
19.5
37.7
3QFY11
Chg YoY (%)
Short-term rates have eased marginally
15-Jul -13
20-Sep-13
40.3
41.2
21.5
20.0
34.3
2QFY11
30-Jun-13
2QFY10
19.2
24.5
34.1
1QFY11
Shift in yield curve in 2QFY14 (%)
1QFY10
17.1
21.9
32.4
4QFY10
17.9
13.8
30.2
3QFY10
16.0
16.2
12.7
2QFY10
28.0
28.7
Depos i ts (INR t)
64.1
Chg YoY (%)
1QFY10
Loa ns (INR t)
2QFY13
Loan growth picks up in 2QFY14...
18-Jul -13
6 Month (%)
12 Month (%)
12
30-Sep-13
10
11
10
9
8
Sep-13
Jun-13
31
394
205
1QFY13
25
1QFY14
916
FY13
33
313
679
FY12
41
226
2QFY14E
1QFY14
4QFY13
3QFY13
2QFY13
49
FY11
31
1.1
1QFY13
4QFY12
3QFY12
2QFY12
1.1
2.0
4QFY13
2.0
1.7
130
87
210
2.7
2.0
No. of Ca s es Recd.
202
2.7
Agg. Debt (INR b)
3.3
3QFY13
Net Sl i ppa ge Ra ti o
3.1
1QFY12
Referrals to CDR remain high
2QFY13 189
Net slippage ratio to decline but still high (%)
Apr-13
10 yea r
Feb-13
5 Yea r
Sep-12
Jun-12
2 Year
FY10
1 Yea r
Nov-12
7
7
27
October 2013
C57
Sens ex Index
MOSL Fi nanci a ls Index
Sens ex Index
MOSL Fi na nci a ls Index
110
115
100
105
90
95
80
85
70
75
Jun-13
Jul -13 Aug-13 Sep-13
CMP (INR)
27.09.13
Financials - Banks
Private Banks
Axis Bank
1,031
Federal Bank
298
HDFC Bank
610
ICICI Bank
923
IndusInd Bank
377
ING Vysya Bank
510
J&K Bank
1,129
Kotak Mah. Bank
682
South Indian Bank
20
Yes Bank
305
Pvt. Bank Aggregate
PSU Banks
Andhra Bank
53
Bank of Baroda
501
Bank of India
163
Canara Bank
225
Corporation Bank
245
Dena Bank
47
IDBI Bank
60
Indian Bank
70
Oriental Bank
150
Punjab Nat. Bank
478
State Bank
1,642
Union Bank
115
PSU Bank Aggregate
October 2013
Rating
EPS (INR)
FY13 FY14E FY15E
P/E (x)
FY13 FY14E FY15E
P/BV (x)
FY13 FY14E FY15E
RoE (%)
FY13 FY14E FY15E
Buy
Buy
Neutral
Buy
Buy
Buy
Buy
Neutral
Neutral
Buy
110.7
49.0
28.3
72.2
20.3
39.6
217.5
29.3
3.8
36.3
114.4
36.1
36.1
75.0
23.9
37.4
211.2
32.0
3.8
37.8
132.0
47.2
44.7
84.4
28.4
42.9
234.6
36.7
4.1
45.9
9.3
6.1
21.6
12.8
18.6
12.9
5.2
23.3
5.3
8.4
14.5
9.0
8.3
16.9
12.3
15.7
13.6
5.3
21.3
5.3
8.1
13.2
7.8
6.3
13.6
10.9
13.3
11.9
4.8
18.6
4.9
6.6
11.2
1.5
0.8
4.0
2.0
2.7
1.7
1.1
3.3
0.9
1.9
2.5
1.3
0.7
3.4
1.8
2.3
1.4
1.0
2.9
0.8
1.6
2.1
1.1
0.7
2.8
1.6
2.0
1.2
0.8
2.5
0.7
1.3
1.9
18.5
13.9
20.3
14.8
17.8
14.6
23.6
15.5
20.5
24.8
17.2
15.2
9.3
21.7
12.8
15.8
12.1
19.5
14.6
16.5
21.3
16.0
15.4
11.3
22.7
12.8
16.4
10.9
18.8
14.5
15.6
21.8
16.5
Neutral
Buy
Neutral
Neutral
Neutral
Neutral
Neutral
Buy
Buy
Buy
Buy
Neutral
23.0
106.0
46.1
64.8
93.8
23.1
14.1
36.8
45.5
134.3
261.9
36.0
16.4
85.7
44.6
46.6
86.6
18.8
14.1
25.5
37.2
113.3
206.1
27.4
17.6
93.5
48.2
53.6
93.7
20.8
15.7
29.5
42.7
129.4
236.8
31.5
2.3
4.7
3.5
3.5
2.6
2.0
4.2
1.9
3.3
3.6
6.3
3.2
4.6
3.2
5.8
3.7
4.8
2.8
2.5
4.2
2.7
4.0
4.2
8.0
4.2
5.7
3.0
5.4
3.4
4.2
2.6
2.3
3.8
2.4
3.5
3.7
6.9
3.7
5.0
0.4
0.7
0.5
0.4
0.4
0.3
0.4
0.3
0.4
0.5
0.9
0.4
0.7
0.3
0.6
0.4
0.4
0.4
0.3
0.4
0.3
0.3
0.5
0.8
0.4
0.6
0.3
0.6
0.4
0.4
0.3
0.3
0.4
0.2
0.3
0.4
0.8
0.4
0.6
16.2
16.1
13.6
13.3
16.1
17.6
10.2
15.6
11.5
16.5
16.5
15.0
14.9
10.5
11.6
11.7
8.8
13.2
12.7
9.4
9.7
8.7
12.2
11.7
10.0
10.8
10.4
11.5
11.6
9.4
12.9
12.7
9.8
10.3
9.3
12.7
12.2
10.6
11.2
C58
Axis Bank
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
AXSB IN
468.0
482 / 8
1549 / 764
8 / -25 / -15

Y/E March
NII
OP
NP
NIM (%)
EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
ABV/Sh. (INR)
RoE (%)
RoA (%)
Payout (%)
Valuations
P/E(X)
P/BV (X)
P/ABV (X)
Div. Yield (%)
2012 2013 2014E

80.2 96.7 111.1
74.3 93.0 105.3
42.4 51.8 53.6
3.3
3.3
3.3
102.7 110.7 114.4
24.4
7.8
3.4
547.4 699.9 795.5
18.2 690.1 782.8
20.3 18.5 15.2
1.6
1.7
1.5
18.2 19.1 19.2
9.3
1.5
1.5
1.7
9.0
1.3
1.3
1.8
2015E
127.9
121.0
61.7
3.3
132.0
15.3
905.6
892.1
15.4
1.5
19.2
7.8
1.1
1.2
2.1
CMP: INR1,031
Buy
Loan growth is expected to remain healthy at 18%+ YoY. However,

deposit growth is expected to be lower at 5% YoY. Low deposit growth
is partially on account of capital infusion benefits - bank utilized it by
reducing bulk deposits proportion in 1QFY14.
Margins are expected to moderate by ~10bp to 3.75%, as high bulk
deposit rate and waning impact of capital raised will increase pressure
on cost of funds.
Fee income growth expected to be sub 10%, led by muted corporate
fees and slowdown in retail fees. Net investment gain is likely to be
negligible led by limited opportunity to book trading gains and MTM
expected on AFS portfolio.
Factoring slippage ratio of 1.7% (v/s 1.6% in 1QFY14) and credit cost of
1% (v/s 1.2% in 1QFY14) for 2QFY14E. Overall, we lower the earnings
estimate by 8/10% for FY14E/15E, to factor lower risk adjusted NIMs.
Maintain Buy.
Key issues to watch for
Impact on trading income (net of MTM) - due to steep rise in yields.
Bulk deposit proportion and cost of funds movement.
Growth in retail business, traction in SA deposits and asset quality.
(INR Million)
Y/E March
1Q
64,829
43,030
21,799
26.4
13,355
35,154
15,517
19,637
26.0
2,588
17,048
5,513
11,535
22.4
Interest Income
Interest Expense
Net Interest Income
% Change (Y-o-Y)
Other Income
Net Income
Operating Expenses
Operating Profit
% Change (Y-o-Y)
Other Provisions
Profit before Tax
Tax Provisions
Net Profit
% Change (Y-o-Y)
Operating Parameters
NIM (Reported,%)
NIM (Cal, %)
Deposit Growth (%)
Loan Growth (%)
CD Ratio (%)
CASA Ratio (%)
Asset Quality
OSRL (INR b)
OSRL (%)
Gross NPA (INR b)
Gross NPA (on customer assets, %)
E: MOSL Estimates
October 2013
FY13
2Q
3Q
66,872
69,649
43,603
44,701
23,269
24,948
15.9
16.6
15,931
16,154
39,200
41,102
17,417
17,487
21,783
23,615
22.7
14.7
5,094
3,868
16,688
19,747
5,453
6,275
11,235
13,472
22.1
22.2
FY14
4Q
70,476
43,829
26,647
24.2
20,072
46,718
18,721
27,997
37.4
5,954
22,044
6,492
15,552
21.8
1Q
72,778
44,126
28,652
31.4
17,813
46,465
18,030
28,436
44.8
7,123
21,313
7,224
14,089
22.1
2QE
74,135
46,332
27,802
19.5
16,001
43,803
20,021
23,782
9.2
6,066
17,716
5,758
11,958
6.4
3QE
76,766
49,576
27,190
9.0
18,351
45,541
20,689
24,852
5.2
5,841
19,011
6,179
12,833
-4.7
4QE
80,913
53,444
27,469
3.1
22,152
49,621
21,346
28,275
1.0
6,385
21,890
7,217
14,673
-5.6
3.6
5.2
18.6
82.3
3.4
6.5
18.2
81.5
3.2
14.0
15.0
78.7
3.4
3.3
21.3
29.8
76.9
39.1
3.5
3.5
21.2
22.9
73.1
40.5
3.6
3.6
17.2
20.7
73.4
40.0
3.7
3.5
14.8
16.0
78.0
44.4
3.9
3.7
7.1
15.8
83.1
42.4
38.3
2.2
20.9
1.1
40.7
2.4
21.9
1.1
42.6
2.4
22.8
1.1
43.7
2.2
23.9
1.1
42.1
2.1
24.9
1.1
27.8
1.2
31.1
1.3
35.7
1.4
FY13
FY14E
271,826
175,163
96,663
20.6
65,511
162,174
69,142
93,031
25.2
17,504
75,527
23,733
51,794
22.1
304,592
193,478
111,113
14.9
74,317
185,431
80,086
105,345
13.2
25,414
79,931
26,377
53,553
3.4
3.5
3.3
14.8
16.0
78.0
44.4
3.3
14.0
15.0
78.7
43.7
2.2
23.9
1.1
35.7
1.4
C59
Bank of Baroda
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
BOB IN
422.5
212 / 3
900 / 429
-1 / -31 / -42
CMP: INR501

Y/E March
2012 2013 2014E
NII
103.2 113.2 117.5
OP
85.8 90.0 88.3
NP
50.1 44.8 36.2
NIM (%)
2.8
2.4
2.1
EPS (INR)
121
106
86
EPS Gr. (%)
12.4 -12.7 -19.2
BV/Sh. (INR)
621
707
775
ABV/Sh. (INR)
597
643
651
ROE (%)
22.1 16.1 11.6
ROA (%)
1.2
0.9
0.6
Div. Payout (%) 16.2 27.4 23.2
Valuations
P/E(X)
4.7
5.8
P/BV (X)
0.7
0.6
P/ABV (X)
0.8
0.8
Div. Yield (%)
4.3
3.4
2015E
134.4
101.9
39.5
2.2
94
9.2
848
693
11.5
0.6
23.2
5.4
0.6
0.7
3.7
Buy
Loans and deposits are expected to grow 14% YoY and 19% YoY
respectively. This would partially be helped by currency depreciation,
which would translate into strong growth in international portfolio
(formed 31% of overall business).
NIM is expected to be stable at 2.4%.
Fee income growth is expected to be ~7%. Factored net investment
loss of INR500m v/s investment gains of INR2.9b in 1QFY14.
Factored net slippage ratio of 2.3% and credit cost of 85bp. Further,
fresh restructuring is expected to remain high (INR23b was done in
1QFY14).
Flat NII growth, sharp increase in both operating and provisioning
expense is expected to drag PAT lower by 39% YoY to INR8b.
Overall, we lower the earnings estimate by 12/20% for FY14E/15E, to
factor lower NIMs and loan growth. Upgrade to Buy.

Outlook on asset quality and restructuring - management had in the
past indicated that 2QFY14 would be the last quarter of high slippages,
which is expected to decline in 2HFY14.
(INR Million)
Y/E March
Interest Income
Interest Expense
Net Interest Income
% Change (YoY)
Other Income
Net Income
Operating Expenses
Operating Profit
% Change (YoY)
Other Provisions
Profit before Tax
Tax Provisions
Net Profit
% Change (YoY)
NIM (Reported, %)
NIM (Calculated, %)
Deposit Growth (%)
Loan Growth (%)
CASA Ratio (%)
Tax Rate (%)
Asset Quality
OSRL (INR B)
OSRL (%)
Gross NPA (INR B)
Gross NPA (%)
E: MOSL Estimates
October 2013
1Q
85,576
57,595
27,981
21.8
7,708
35,689
13,281
22,407
23.2
8,938
13,469
2,081
11,389
10.3
FY13
2Q
3Q
87,226
88,449
58,603
60,040
28,623
28,409
11.5
7.0
8,283
8,406
36,906
36,815
13,205
14,380
23,701
22,435
11.4
-13.6
6,464
10,293
17,237
12,142
4,223
2,026
13,014
10,116
11.6
-21.6
FY14
4Q
90,716
62,576
28,140
0.6
11,909
40,049
18,602
21,447
5.1
15,984
5,463
-4,825
10,289
-32.2
1Q
94,869
65,978
28,891
3.3
12,306
41,197
16,836
24,361
8.7
10,179
14,182
2,503
11,679
2.5
2.7
2.6
22.3
23.0
32.2
15.4
2.7
2.6
24.0
22.2
31.8
24.5
2.7
2.5
18.8
14.8
32.2
16.7
2.5
2.3
23.1
14.2
30.4
-88.3
2.4
2.2
22.0
12.4
31.2
17.7
179.8
6.3
53.2
1.8
195.8
6.7
58.8
2.0
205.0
6.8
73.2
2.4
200.1
6.1
79.8
2.4
207.2
6.4
97.6
3.0
2QE
96,242
67,628
28,615
0.0
8,861
37,475
17,081
20,394
-14.0
10,572
9,822
1,866
7,956
-38.9
3QE
99,283
69,657
29,626
4.3
9,463
39,089
17,928
21,161
-5.7
10,907
10,255
2,000
8,255
-18.4
4QE
105,739
75,410
30,329
7.8
11,073
41,402
19,026
22,376
4.3
11,954
10,422
2,121
8,301
-19.3
2.2
19.0
14.4
2.2
21.8
16.1
2.2
12.0
13.0
19.0
19.5
108.0
3.2
117.0
3.3
FY13
FY14E
351,967
238,814
113,153
9.7
36,306
149,459
59,467
89,992
4.9
41,679
48,312
3,505
44,807
-10.5
396,134
278,673
117,460
3.8
41,702
159,163
70,870
88,293
-1.9
43,609
44,684
8,490
36,194
-19.2
20.3
2.7
2.4
23.1
14.2
31.6
7.3
19.0
122.9
3.3
200.1
6.1
79.8
2.4
122.9
3.3
2.1
12.0
13.0
C60
Bank of India
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
BOI IN
596.6
97 / 2
392 / 127
9 / -51 / -53
CMP: INR163

Y/E March
NII
OP
NP
NIM (%)
EPS (INR)
EPS Gr. (%)
ROE (%)
ROA (%)
BV/Sh. (INR)
ABV/Sh. (INR)
Div.Payout (%)
Valuations
P/E(X)
P/BV (X)
P/ABV (X)
Div. Yield (%)
2012
83.1
66.9
26.8
2.5
47
2.5
15.6
0.7
327
285
20.2
2013 2014E
90.2 104.9
74.6 80.4
27.5 26.6
2.3
2.3
46.1 44.6
-1.1
-3.3
13.6 11.7
0.7
0.5
362
396
298
307
29.4 24.4
3.5
0.5
0.5
6.1
3.7
0.4
0.5
5.7
2015E
123.5
92.3
28.7
2.4
48.2
8.1
11.6
0.5
433
332
24.4
3.4
0.4
0.5
6.2
Neutral
Loans and deposits growth is expected to be 23% YoY and 28% YoY,
partially aided by currency depreciation, which is expected to translate
into strong growth in international portfolio (formed 27% of overall
business at end-1QFY14).
NIM is expected to moderate by 10bp+ to 2.4%. Factored net
investment loss of INR1b, compared to a gain of INR1.6b in 2QFY13
and INR6b in 1QFY14.
Slippages are expected to be high; we have factored a slippage ratio
of 2.9% and credit cost of 1%.
Sequentially, PAT is expected to decline 48%+. However, on a lower
base of 2QFY13, PAT growth is expected to be strong at 69% YoY.
Overall, we lower the earnings estimate by 8% for FY14E, to factor in
lower NIMs and higher credit cost. Maintain Neutral.

Asset quality performance has been volatile over the last few
quarters. Outlook on slippages and restructuring pipeline.
AFS as a proportion of overall investment is at 35%. Hence, net
investment gains could lead to divergence in profitability.
(INR Million)
Y/E March
Interest Income
Interest Expense
Net Interest Income
% Change (Y-o-Y)
Other Income
Net Income
Operating Expenses
Operating Profit
% Change (Y-o-Y)
Other Provisions
Profit before Tax
Tax Provisions
Net Profit
% Change (Y-o-Y)
NIM (Reported, %)
NIM (Cal, %)
Deposit Growth (%)
Loan Growth (%)
CASA Ratio (Reported, %)
Tax Rate (%)
Asset Quality
OSRL (INR b)
OSRL (%)
Gross NPA (INR b)
Gross NPA (%)
E: MOSL Estimates
October 2013
1Q
77,092
56,656
20,436
11.0
8,409
28,844
12,109
16,736
19.9
4,722
12,013
3,139
8,875
71.5
FY13
2Q
3Q
80,055
80,227
58,095
57,142
21,960
23,085
15.3
11.7
8,941
9,371
30,901
32,456
12,360
13,898
18,541
18,558
19.5
7.2
15,521
9,158
3,020
9,400
1
1,365
3,019
8,035
-38.5
12.2
FY14
4Q
81,716
56,956
24,760
-1.0
10,939
35,700
14,949
20,751
3.0
15,106
5,645
-1,921
7,566
-20.6
1Q
85,412
60,042
25,370
24.1
11,808
37,178
15,374
21,804
30.3
6,946
14,858
5,217
9,642
8.6
2.3
2.3
15.7
22.9
32.0
26.1
2.4
2.4
11.2
20.0
32.8
0.0
2.4
2.5
13.6
20.3
33.8
14.5
2.5
2.5
20.0
16.5
32.8
-34.0
2.5
2.3
22.4
17.1
31.4
35.1
175.7
6.6
67.5
2.6
178.5
6.9
89.0
3.4
181.4
6.5
86.3
3.1
163.5
5.6
87.7
3.0
162.3
5.2
94.1
3.0
2QE
88,305
62,518
25,787
17.4
8,848
34,635
16,005
18,630
0.5
11,343
7,287
2,186
5,101
69.0
3QE
91,452
64,915
26,537
15.0
9,048
35,585
16,365
19,220
3.6
11,397
7,823
2,347
5,476
-31.8
4QE
94,550
67,304
27,246
10.0
10,675
37,921
17,188
20,733
-0.1
11,612
9,121
2,759
6,362
-15.9
2.2
27.8
23.3
2.2
24.3
17.4
2.3
17.0
16.8
30.0
30.0
102.0
3.2
110.2
3.3
FY13
FY14E
319,089
228,849
90,240
8.5
37,660
127,900
53,315
74,585
11.4
44,508
30,077
2,584
27,493
2.7
359,720
254,780
104,940
16.3
40,379
145,319
64,932
80,387
7.8
41,298
39,090
12,509
26,581
-3.3
30.2
2.5
2.3
20.0
16.5
32.8
8.6
32.0
116.3
3.4
163.5
5.6
87.7
3.0
116.3
3.4
2.3
17.0
16.8
C61
Canara Bank
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
CBK IN
443.0
100 / 2
550 / 190
2 / -46 / -54

Y/E March
2012
NII
76.9
OP
59.4
NP
32.8
NIM (%)
2.4
EPS (INR)
74
EPS Gr. (%)
-18.5
BV/Sh. (INR)
464
ABV/Sh. (INR)
414
ROE (%)
17.1
ROA (%)
0.9
Div. Payout (%) 17.2
Valuations
P/E(X)
P/BV (X)
P/ABV (X)
Div. Yield (%)
2013 2014E
78.8 83.0
58.9 62.4
28.7 20.6
2.2
2.0
65
47
-12.5 -28.2
513
550
436
435
13.3
8.8
0.7
0.5
23.3 23.2
3.5
0.4
0.5
5.8
4.8
0.4
0.5
4.1
2015E
98.3
71.1
23.8
2.1
54
15.2
592
449
9.4
0.5
23.2
4.2
0.4
0.5
4.8
CMP: INR225
Neutral
Low CD ratio (65%) to help NIMs, hence, expect it to be stable QoQ.

High proportion of AFS portfolio (52% of investment coupled with
duration of 3.8 years) at end-1QFY14 coupled with rise in G-sec yields
is expected to drag earnings. Factored net investment loss of INR3.2b.
Modeled a slippage ratio of 3% v/s 4.8% in 1QFY14.
Restructuring is expected to add pressure on overall asset quality. At
end-1QFY14, management had guided for further restructuring of
INR40b, of which INR30b was on account of SEBs.
factor lower NIMs and higher provisions (credit cost and MTM loss).
CBK is highly levered to systemic interest rate and with expectation
of rates being elevated, benefit on NIMs and treasury gains may not
play out. Elevated stress creation and ageing of the portfolio will keep
credit cost and earnings under pressure. Hence, downgrade to Neutral.
CBK is highly levered to interest rate, which could not only impact
NIM, but also translate into high MTM losses and weak earnings.
Slippages and restructuring. Proportion of infrastructure loans is
highest among peers, which could add pressure on asset quality.
(INR Million)
Y/E March
Interest Income
Interest Expense
Net Interest Income
% Change (Y-o-Y)
Other Income
Net Income
Operating Expenses
Operating Profit
% Change (Y-o-Y)
Other Provisions
Profit before Tax
Tax Provisions
Net Profit
% Change (Y-o-Y)
NIM (Cal, %)
Deposit Growth (%)
Loan Growth (%)
CD Ratio (%)
CASA Ratio (%)
Tax Rate (%)
Asset Quality
OSRL (INR b)
OSRL (%)
Gross NPA (INR b)
Gross NPA (%)
E: MOSL Estimates
October 2013
1Q
84,729
66,293
18,435
4.2
6,926
25,362
11,424
13,938
9.7
4,185
9,752
2,000
7,752
6.8
FY13
2Q
3Q
85,955
85,445
66,387
65,565
19,568
19,880
-0.2
3.6
6,081
8,458
25,649
28,338
12,828
13,174
12,821
15,164
-19.9
-2.8
4,211
6,259
8,610
8,905
2,000
1,800
6,610
7,105
-22.4
-18.9
FY14
FY13
FY14E
340,779
261,989
78,790
2.5
31,530
110,320
51,420
58,900
-0.9
22,179
36,721
8,000
28,721
-12.5
380,248
297,287
82,962
5.3
36,774
119,735
57,377
62,358
5.9
36,568
25,790
5,158
20,632
-28.2
2.3
13.0
16.0
69.9
4Q
84,651
63,744
20,906
2.5
10,065
30,971
13,994
16,977
13.9
7,524
9,454
2,200
7,254
-12.5
1Q
92,696
72,785
19,911
8.0
12,383
32,294
13,311
18,983
36.2
9,162
9,821
1,900
7,921
2.2
2QE
94,001
73,513
20,488
4.7
7,691
28,179
13,954
14,225
11.0
9,589
4,636
927
3,709
-43.9
3QE
95,351
74,248
21,103
6.2
8,006
29,109
14,942
14,168
-6.6
9,000
5,167
1,033
4,134
-41.8
4QE
98,201
76,742
21,459
2.6
8,694
30,153
15,170
14,983
-11.7
8,816
6,166
1,297
4,869
-32.9
2.0
14.6
19.9
67.0
2.0
20.3
23.2
69.0
2.0
13.0
16.0
69.9
20.0
20.0
21.0
2.2
8.8
4.2
68.1
24.2
21.8
88.6
3.2
159.0
6.6
62.6
2.6
2.1
11.5
4.9
67.4
23.3
20.5
2.2
7.7
-1.0
64.1
24.8
23.2
2.3
3.1
0.3
67.4
25.1
20.2
2.3
8.8
4.2
68.1
24.2
23.3
2.0
14.2
10.8
65.4
23.1
19.3
129.6
5.7
45.0
2.0
137.7
6.4
56.1
2.6
133.8
6.1
60.9
2.8
159.0
6.6
62.6
2.6
181.8
7.3
73.3
2.9
79.7
3.1
85.0
3.1
20.0
88.6
3.2
C62
Federal Bank
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
FB IN
171.0
51 / 1
551 / 221
2 / -43 / -38
CMP: INR298

Y/E March
NII
OP
NP
NIM (%)
EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
ABV/Sh. (INR)
ROE (%)
ROA (%)
Payout (%)
Valuations
P/E(X)
P/BV (X)
P/ABV (X)
Div. Yield (%)
2012 2013 2014E

19.5 19.7 20.5
15.1 14.6 14.2
7.8
8.4
6.2
3.8
3.2
2.9
45.4 49.0 36.1
32.3
7.9 -26.4
333.3 371.8 400.2
326.0 355.4 377.8
14.4 13.9
9.3
1.4
1.3
0.8
23.0 21.3 20.9
6.1
0.8
0.8
3.0
8.3
0.7
0.8
2.2
2015E
24.1
16.8
8.1
2.9
47.2
31.0
437.5
412.0
11.3
0.9
20.9
6.3
0.7
0.7
2.9
Buy
Business growth is expected to be marginally above industry average,

with loan and deposit growth at 17% YoY and 19% YoY respectively.
Systemic interest rates have risen. However, lower dependence on
bulk deposits and expected NRI flows (NRI SA deposits as well) will
keep overall increase in cost of funds under check. Nevertheless, we
expect NIM to decline by 5bp+ and to be near 3.1%.
Fee income growth is expected to be at 18%. Modeled net investment
loss of INR50m v/s gain of INR922m in 1QFY14.
While slippages in retail and SME are showing signs of stability/
improvement, corporate slippages continue to keep the asset quality
volatile. Hence, factored a net slippage ratio of 1.7%.
factor lower margins. Maintain Buy.

Slippages in corporate segment and update on a large government
account, which was expected to be recovered.
Liability profile improved in 1QFY14 as the bank reduced its
proportion of bulk business in 1QFY14. Medium term strategy in terms
of loan growth and liability mix.
(INR Million)
Y/E March
Interest Income
Interest Expense
Net Interest Income
% Change (YoY)
Other Income
Net Income
Operating Expenses
Operating Profit
% Change (YoY)
Other Provisions
Profit before Tax
Tax Provisions
Net Profit
% Change (YoY)
NIM (Reported,%)
NIM (Cal, %)
Deposit Growth (%)
Loan Growth (%)
CD Ratio (%)
CASA Ratio (%)
Asset Quality
Gross NPA (INR b)
Gross NPA (%)
E: MOSL Estimates
October 2013
1Q
15,367
10,451
4,916
6.9
1,243
6,160
2,695
3,465
-2.1
628
2,837
934
1,904
30.2
FY13
2Q
3Q
15,256
15,218
10,197
10,244
5,059
4,974
6.6
-5.8
1,394
2,039
6,453
7,012
2,957
3,073
3,496
3,939
-3.2
-5.9
305
744
3,192
3,196
1,041
1,088
2,151
2,108
12.5
4.4
FY14
4Q
15,835
11,037
4,798
-2.3
1,969
6,766
3,071
3,695
-0.8
982
2,713
494
2,219
-6.6
1Q
16,533
11,437
5,096
3.7
2,158
7,254
3,249
4,005
15.6
2,451
1,554
498
1,057
-44.5
2QE
16,792
11,780
5,013
-0.9
1,682
6,695
3,347
3,348
-4.3
946
2,402
769
1,633
-24.1
3QE
17,393
12,310
5,083
2.2
1,717
6,800
3,496
3,304
-16.1
849
2,455
786
1,669
-20.8
4QE
18,291
12,959
5,332
11.1
1,893
7,225
3,704
3,521
-4.7
862
2,659
851
1,809
-18.5
FY13
FY14E
61,676
41,929
19,747
1.1
6,644
26,391
11,795
14,596
-3.1
2,658
11,938
3,556
8,382
7.9
69,009
48,485
20,524
3.9
7,451
27,974
13,796
14,178
-2.9
5,108
9,070
2,902
6,168
-26.4
3.4
3.4
17.8
19.0
75.2
28.4
3.6
3.6
4.8
8.0
73.3
29.0
3.5
3.4
10.4
18.9
76.5
29.5
3.1
3.1
17.7
16.8
76.5
26.9
3.1
3.1
12.7
8.5
72.4
29.0
3.0
18.6
17.1
72.4
3.0
20.6
14.1
72.4
2.9
16.0
14.0
75.2
3.4
3.2
17.7
16.8
76.5
26.9
2.9
16.0
14.0
75.2
14.1
3.6
14.4
3.8
15.6
3.9
15.5
3.4
14.8
3.5
16.2
3.7
17.1
3.7
17.6
3.4
15.5
3.4
17.6
3.4
C63
HDFC Bank
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
HDFCB IN
2,346.7
1,431 / 23
727 / 528
-1 / -7 / -9
CMP: INR610

Y/E March
NII
OP
NP
NIM (%)
EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
ABV/Sh. (INR)
RoE (%)
RoA (%)
Payout (%)
Valuations
P/E(X)
P/BV (X)
P/ABV (X)
Div. Yield (%)
2012
128.8
93.9
51.7
4.8
22.0
30.4
127.4
126.4
18.7
1.7
22.8
2013
158.1
114.3
67.3
4.8
28.3
28.4
152.1
150.7
20.3
1.8
22.8
2014E
188.2
142.2
85.8
4.7
36.1
27.6
179.7
175.7
21.7
2.0
23.4
2015E
228.6
180.4
106.5
4.7
44.7
24.1
214.1
207.8
22.7
2.0
23.4
21.6
4.0
4.0
0.9
16.9
3.4
3.5
1.2
13.6
2.8
2.9
1.5
Neutral
On the back of buoyant retail demand, HDFCB is expected to deliver

healthy loan growth of 18%+ YoY. Deposit growth is also expected to
be in line with loan growth at ~17% YoY.
Margins are expected to moderate by 10bp+ QoQ but will remain
steady on a YoY basis. Resultantly, NII growth is expected to be ~2%
QoQ and 20% YoY.
Ex-forex, fee income growth is expected to remain healthy at ~17%.
However, contribution from trading income is expected to be
negligible.
Asset quality is expected to remain healthy, though stress in few
segments of retail loans has increased, which needs to be watched.
Hence, we build provisions of INR3.2b, compared to INR3b (which
also included INR750m for floating provisions) in 2QFY13. Neutral.

Commentary on retail portfolio, which has been holding out strongly
amid a slowdown in economy.
Branch expansion has been strong in the last couple of years;
continuation of strategy would be positive.
(INR Million)
Y/E March
1Q
81,757
45,234
36,524
28.2
16,494
53,018
26,266
26,752
31.6
5,816
20,936
6,762
14,174
30.6
Interest Income
Interest Expense
Net Interest Income
% Change (Y-o-Y)
Other Income
Net Income
Operating Expenses
Operating Profit
% Change (Y-o-Y)
Other Provisions
Profit before Tax
Tax Provisions
Net Profit
% Change (Y-o-Y)
NIM (Reported,%)*
NIM (Cal, %)#
Deposit Growth (%)
Loan Growth (%)
CASA Ratio (%)
Tax Rate (%)
Asset Quality
OSRL (%)
Gross NPA (INR B)
Gross NPA (%)
E: MOSL Estimates; * Reported on
October 2013
4.6
4.8
22.0
21.5
46.0
32.3
FY13
2Q
3Q
85,247
88,904
47,930
49,088
37,317
39,816
26.7
27.8
13,451
19,277
50,768
59,094
25,055
27,880
25,713
31,214
21.0
31.3
2,929
4,050
22,784
27,164
7,184
8,573
15,600
18,591
30.1
30.0
4.2
4.7
18.8
22.9
46.4
31.5
4.1
4.7
22.2
24.3
45.4
31.6
FY14
4Q
93,239
50,287
42,953
20.6
18,036
60,989
31,362
29,627
17.3
3,005
26,622
7,723
18,898
30.1
1Q
96,630
52,443
44,187
21.0
19,256
63,443
30,382
33,061
23.6
5,271
27,790
9,351
18,439
30.1
4.3
4.9
20.1
22.7
47.4
29.0
4.6
4.8
17.8
21.2
44.7
33.6
0.1
0.1
0.1
0.2
0.2
20.9
21.3
24.3
23.3
27.2
1.0
0.2
1.0
1.0
1.0
total assets; # Cal. on interest earning assets
2QE
99,129
54,278
44,851
20.2
17,405
62,256
29,503
32,753
27.4
3,250
29,503
9,589
19,915
27.7
3QE
104,686
56,449
48,237
21.1
20,565
68,802
31,372
37,430
19.9
3,250
34,180
10,681
23,499
26.4
4QE
110,381
59,416
50,965
18.7
21,372
72,337
33,343
38,994
31.6
4,308
34,686
10,750
23,936
26.7
FY13
FY14E
350,649
192,538
158,111
22.7
68,526
226,637
112,361
114,276
21.7
16,770
97,506
30,249
67,257
30.2
410,826
222,586
188,240
19.1
78,599
266,839
124,601
142,238
24.5
16,079
126,159
40,371
85,788
27.6
4.7
20.0
22.0
46.7
32.0
41.4
1.4
4.7
17.3
18.3
4.8
20.0
19.2
4.8
20.0
22.0
32.5
31.3
31.0
4.3
4.8
20.1
22.7
47.4
31.0
31.7
1.1
37.1
1.3
41.4
1.4
0.2
23.3
1.0
C64
ICICI Bank
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
ICICIBC IN
1,152.8
1,064 / 17
1,237 / 759
5 / -16 / -19
CMP: INR923

Y/E March
2012 2013 2014E 2015E
NII
107.3 138.7 156.6
181.6
OP
103.9 132.0 147.8
169.8
NP
64.7 83.3 86.5
97.4
NIM (%)
2.7
3.0
3.1
3.2
EPS (INR)
56
72
75
84
EPS Gr (%)
25.4 28.7
4.0
12.5
BV/Sh (INR)*
409
459
512
571
ABV/Sh (INR)*
397
446
494
545
RoE (%)
12.8 14.8 12.8
12.8
RoA (%)
1.4
1.6
1.5
1.5
Div. Payout (%) 34.1 32.2 34.2
34.8
Valuations
AP/E (x)
10.2
9.5
8.2
AP/BV (x)
1.6
1.4
1.2
AP/ABV (x)
1.7
1.4
1.3
Div. Yield (%)
2.2
2.4
2.7
* BV adjusted for investment in susbdiaries,
Prices adj for sub value
Buy
On a YoY basis, loan and deposit growth is expected to be below

industry average at 14% and 8% respectively. Growth in international
portfolio is also likely to remain moderate despite the currency
depreciation (forms 27% of overall loans).
Margins are expected to remain stable at ~3.3%.
Fee income growth is expected to be in the high single digit. While
net investment gain is expected to be negative (v/s INR1.7b in 2QFY13),
higher contribution from dividend income would help overall noninterest income to grow by 5%+ YoY.
Bank's asset quality has been holding fairly well over the past few
quarters and we expect it to continue, given the benign asset quality
in retail segment. At end-1QFY14, the bank had guided for further
restructuring (under CDR) of INR10-12b.
factor lower risk adjusted margins. Maintain Buy.

Domestic loan growth and traction in retail portfolio.
While performance in asset quality has been strong, moderation in
economic growth may lead to higher-than-expected restructuring.
(INR Million)
Y/E March
Interest Income
Interest Expense
Net Interest Income
% Change (YoY)
Other Income
Net Income
Operating Expenses
Operating Profit
% Change (YoY)
Other Provisions
Profit before Tax
Tax Provisions
Net Profit
% Change (YoY)
NIM (Reported,%)
NIM (Cal, %)
Deposit Growth (%)
Loan Growth (%)
CASA Ratio (%)
Tax Rate (%)
Asset Quality
OSRL (INR b)
OSRL (%)
Gross NPA (INR b)
Gross NPA (%)
October 2013
1Q
95,457
63,527
31,929
32.4
18,799
50,729
21,235
29,493
32.0
4,659
24,835
6,684
18,151
36.3
FY13
2Q
3Q
100,263 101,383
66,551
66,393
33,712
34,990
34.5
29.0
20,430
22,146
54,142
57,136
22,209
22,612
31,933
34,525
35.7
28.5
5,079
3,687
26,854
30,838
7,293
8,335
19,561
22,502
30.1
30.2
FY14
4Q
103,653
65,621
38,032
22.5
22,082
60,114
24,073
36,041
15.8
4,600
31,441
8,400
23,041
21.2
1Q
104,207
66,002
38,205
19.7
24,843
63,048
24,906
38,142
29.3
5,932
32,210
9,468
22,742
25.3
3.0
2.9
16.1
21.6
39.1
26.9
3.0
3.0
14.8
17.6
37.5
27.2
3.1
3.0
9.9
16.5
37.4
27.0
3.3
3.2
14.5
14.4
38.1
26.7
3.3
3.1
8.7
12.3
39.0
29.4
41.7
1.6
98.2
3.5
41.6
1.5
100.4
3.5
45.6
1.6
97.6
3.3
53.2
1.8
96.1
3.2
59.2
2.0
100.1
3.2
2QE
108,038
69,302
38,736
14.9
21,598
60,334
25,156
35,178
10.2
6,250
28,928
8,245
20,684
5.7
3QE
110,980
71,381
39,598
13.2
23,797
63,395
26,786
36,609
6.0
6,750
29,859
8,510
21,349
-5.1
4QE
111,112
71,061
40,051
5.3
24,868
64,919
27,036
37,883
5.1
7,409
30,474
8,701
21,773
-5.5
FY13
FY14E
400,756
262,092
138,664
29.2
83,457
222,121
90,129
131,992
27.1
18,025
113,967
30,712
83,255
28.8
434,337
277,747
156,591
12.9
95,106
251,697
103,884
147,812
12.0
26,341
121,471
34,923
86,548
4.0
3.1
7.6
13.9
3.1
11.0
12.6
3.1
10.5
13.4
28.5
28.5
28.6
3.3
3.2
14.5
14.4
38.1
26.7
110.7
3.3
53.2
1.8
96.1
3.2
104.1
3.2
108.1
3.3
3.1
10.5
13.4
28.6
110.7
3.3
C65
Indian Bank
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
INBK IN
429.8
30 / 0
219 / 61
-6 / -65 / -69
CMP: INR70

Y/E March
2012
NII
44.2
OP
34.6
NP
17.5
NIM (%)
3.6
EPS (INR)
41
EPS Gr. (%)
1.9
BV/Sh. (INR)
215
ABV/Sh (INR)
197
RoE (%)
19.8
RoA (%)
1.3
Valuations
P/E (x)
P/ BV (x)
P/ABV (x)
Div. Yield (%)
2013 2014E
45.2 45.4
30.6 31.2
15.8 11.0
3.2
2.8
37
26
-9.5 -30.7
243
262
207
211
15.6
9.7
1.0
0.6
20.8 23.8
1.9
0.3
0.3
9.5
2.7
0.3
0.3
7.5
2015E
52.0
34.6
12.7
2.8
29
15.5
285
227
10.3
0.6
20.9
2.4
0.2
0.3
7.6
Buy
Business growth is expected to be marginally above industry average,

with loan and deposit growth of 18% and 17% respectively.
Declining trend in NIM is expected to continue, led by an increase in
cost of funds. Hence, we model a 5bp QoQ decline.
Slippages are expected to be at a high level, as economic environment
continues to be challenging. Factor net slippage ratio of 2% and credit
cost of 85bp. Further, continued restructuring in large and midcorporate segment would add stress on the balance sheet.
At end-1QFY14, AFS investments as a proportion of overall investments
stood at 36%, which could translate into MTM loss. We model net
investment loss of INR750m v/s a gain of INR2.6b in 1QFY14.
Led by weak core income and higher provisioning expense, PAT is
expected to be INR2b v/s INR5b in 2QFY13.
factor higher provisions. Maintain Buy.

Asset quality has been very volatile. Improvement in the same and
outlook would be a key for future performance.
Improvement in core operations (NIMs and fees).
(INR Million)
Y/E March
Interest Income
Interest Expense
Net Interest Income
% Change (Y-o-Y)
Other Income
Net Income
Operating Expenses
Operating Profit
% Change (Y-o-Y)
Other Provisions
Profit before Tax
Tax Provisions
Net Profit
% Change (Y-o-Y)
NIM (Rep, %)
NIM (Cal, %)
Deposit Growth (%)
Loan Growth (%)
CD Ratio (%)
CASA Ratio (%)
Tax Rate (%)
Asset Quality
Gross NPA (INR b)
Gross NPA (%)
E: MOSL Estimates
October 2013
1Q
33,738
22,206
11,532
12.0
2,227
13,759
5,356
8,402
7.6
1,457
6,945
2,328
4,617
13.5
FY13
2Q
3Q
34,104
35,465
22,901
24,030
11,203
11,434
-1.3
-2.3
3,645
2,402
14,848
13,837
5,764
6,355
9,084
7,481
-1.4
-17.9
2,022
4,116
7,063
3,365
2,096
59
4,967
3,306
6.0
-37.1
FY14
4Q
35,620
24,546
11,074
2.3
4,605
15,678
10,033
5,646
-29.2
4,758
888
-2,032
2,919
-15.5
1Q
36,658
25,690
10,968
-4.9
5,297
16,265
7,672
8,593
2.3
3,681
4,912
1,738
3,174
-31.3
2QE
37,750
26,653
11,097
-0.9
3,227
14,324
7,260
7,064
-22.2
4,210
2,853
827
2,026
-59.2
3QE
38,965
27,653
11,312
-1.1
3,421
14,733
7,442
7,291
-2.5
3,698
3,593
1,042
2,551
-22.8
4QE
40,702
28,662
12,040
8.7
3,860
15,900
7,652
8,248
46.1
3,718
4,530
1,319
3,211
10.0
FY13
FY14E
138,926
93,684
45,243
2.4
12,879
58,122
27,509
30,613
2.9
12,351
18,262
2,451
15,811
-9.5
154,075
108,659
45,417
0.4
15,804
61,221
30,026
31,196
5.3
15,306
15,890
4,926
10,964
-30.7
2.7
2.8
16.0
15.0
74.6
46.8
3.8
3.3
3.5
15.0
13.8
73.9
29.3
33.5
3.1
3.3
12.9
10.8
73.0
29.0
29.7
3.1
3.2
13.5
13.6
74.0
28.3
1.8
2.9
3.0
17.5
17.5
75.5
27.6
-228.9
2.7
2.9
17.8
16.3
73.0
26.9
35.4
2.8
16.9
18.1
73.7
2.8
16.9
17.6
74.4
2.8
16.0
15.0
74.6
29.0
29.0
29.1
3.1
3.2
17.5
17.5
75.5
27.6
13.4
15.5
1.7
19.8
2.1
31.8
3.2
35.7
3.3
37.2
3.4
40.1
3.5
43.2
3.7
46.8
3.8
35.7
3.3
31.0
C66
IndusInd Bank
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
IIB IN
522.9
197 / 3
531 / 318
-1 / -12 / 4

Y/E March
NII
OP
NP
NIM (%)
EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
ABV/Sh. (INR)
RoE (%)
RoA (%)
Payout (%)
Valuations
P/E (X)
P/BV (X)
P/ABV (X)
Div. Yield (%)
2012 2013 2014E

17.0 22.3 27.5
13.7 18.4 23.0
8.0 10.6 12.5
3.6
3.7
3.7
17.2 20.3 23.9
38.5 18.3 17.8
96.7 141.9 161.6
17.8 140.2 159.6
19.2 17.8 15.8
1.6
1.6
1.6
14.9 20.3 17.5
18.6
2.7
2.7
0.8
15.7
2.3
2.4
1.0
2015E
33.7
27.8
14.9
3.8
28.4
18.8
185.1
181.6
16.4
1.6
17.5
13.3
2.0
2.1
1.1
CMP: INR377
Buy
Though growth in commercial vehicle finance portfolio is likely to

moderate on the back of slower demand, introduction of new products
will drive growth in the consumer finance portfolio. In the corporate
segment, growth is expected to be driven by working capital. Loan
growth is expected to be above industry average at 27% YoY.
Margins are expected to decline by 5-7bp to ~3.6%.
Fee income growth is expected to be healthy at ~25% YoY. While there
may be some MTM losses, strong growth in forex income is expected
to contain the impact on PBT.
Amid a slowdown in CV segment, IIB's asset quality performance
remains healthy. However, we may see delinquencies and fresh
restructuring inching up.
We lower our earnings estimate by 10/13% for FY14E/15E, to factor
lower NIMs. Maintain Buy.
Growth strategy, traction in new products and fee-based income.
Additions to saving bank accounts and traction in SA deposits.
Outlook on asset quality, especially on CV portfolio (given the
slowdown in the industry).
(INR Million)
Y/E March
1Q
16,320
11,479
4,841
24.1
3,188
8,029
3,989
4,040
29.6
535
3,505
1,143
2,363
31.1
FY13
2Q
3Q
17,279
18,005
12,182
12,227
5,097
5,778
21.6
34.2
3,205
3,558
8,302
9,336
4,104
4,614
4,198
4,722
26.1
35.2
491
787
3,708
3,935
1,205
1,262
2,503
2,673
29.6
29.8
FY14
4Q
18,228
11,615
6,612
42.4
3,679
10,291
4,857
5,435
43.4
819
4,616
1,542
3,074
37.6
1Q
19,122
12,327
6,795
40.4
4,706
11,501
5,085
6,416
58.8
1,321
5,095
1,747
3,348
41.7
3.7
3.7
27.7
26.4
81.9
29.3
33.4
3.7
3.7
23.5
27.3
85.2
30.0
34.3
Interest Income
Interest Expense
Net Interest Income
% Change (YoY)
Other Income
Net Income
Operating Expenses
Operating Profit
% Change (YoY)
Other Provisions
Profit before Tax
Tax Provisions
Net Profit
% Change (YoY)
NIM (Reported,%)
3.2
3.3
3.5
NIM (Cal, %)
3.3
3.3
3.6
Deposit Growth (%)
27.8
24.5
26.0
Loan Growth (%)
31.2
30.8
30.8
CD Ratio (%)
82.6
82.5
83.0
CASA Ratio (%)
27.9
28.0
28.7
Tax Rate (%)
32.6
32.5
32.1
Asset Quality
OSRL (INR b)
0.9
0.7
1.1
OSRL (%)
0.2
0.2
0.3
Gross NPA (INR b)
3.7
4.1
4.2
Gross NPA (%)
1.0
1.0
1.0
E: MOSL2013
Estimates; Quarterly calculated margins based on total
October
2QE
20,013
13,190
6,823
33.9
4,116
10,939
5,445
5,494
30.9
975
4,519
1,514
3,005
20.1
3QE
21,054
14,179
6,874
19.0
4,336
11,210
5,790
5,420
14.8
875
4,545
1,523
3,023
13.1
4QE
21,708
14,690
7,018
6.1
4,715
11,733
6,109
5,625
3.5
909
4,715
1,587
3,129
1.8
3.7
24.7
27.5
84.4
3.5
23.5
24.4
83.6
3.3
19.0
22.0
84.0
33.5
33.5
33.7
1.3
1.3
0.3
0.3
4.6
5.1
5.8
6.7
7.7
1.0
1.1
1.1
1.3
1.4
assets, yearly on interest earning assets
FY13
FY14E
69,832
47,504
22,329
31.0
13,630
35,958
17,564
18,395
34.0
2,631
15,764
5,152
10,612
32.2
81,897
54,387
27,510
23.2
17,874
45,384
22,429
22,955
24.8
4,080
18,876
6,371
12,505
17.8
3.4
3.7
27.7
26.4
81.9
29.3
32.7
33.8
1.3
0.3
4.6
1.0
7.7
1.4
3.7
19.0
22.0
83.6
C67
ING Vysya Bank

Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
VYSB IN
150.1
77 / 1
667 / 395
6 / -13 / 22
CMP: INR510

Y/E March
NII
OP
NP
NIM (%)
EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
ABV/Sh. (INR)
RoE (%)
RoA (%)
Payout (%)
Valuations
P/E(X)
P/BV (X)
P/ABV (X)
Div. Yield (%)
2012 2013 2014E

12.1 15.4 18.0
7.7
9.9 12.4
4.6
6.1
6.9
3.0
3.2
3.2
30.4 39.6 37.4
15.4 30.2
-5.6
258.2 292.1 375.3
2.0 291.7 370.6
14.3 14.6 12.1
1.1
1.2
1.2
17.5 16.1 16.2
12.9
1.7
1.7
1.1
13.6
1.4
1.4
1.0
2015E
21.2
14.7
7.9
3.2
42.9
14.9
411.3
403.1
10.9
1.1
16.2
11.9
1.2
1.3
1.2
Buy
NIM is expected to improve sequentially by ~20bp, led by the benefit

of capital raised of INR18.4b at end-1QFY14. Thus, NII is expected to
grow 24% YoY.
Fee income growth is expected to be lower than the balance sheet
growth at ~11% YoY.
While VYSB has surprised positively over the quarters, in 1QFY14, asset
quality came under pressure (slippage ratio of 2.1% v/s 0.7% in FY13).
Hence, it would be a key matrix to watch.
Modeled provision expense of INR475m v/s INR681m in 1QFY14 and
INR64m in 2QFY13 to provide buffer for credit cost and MTM loss.
The stock trades at 1.4x FY14E and 1.2x FY15E BV, and 13.6x FY14E and
11.9x FY15E EPS. Maintain Buy.

NIM would benefit in 2QFY14 from the recently raised capital.
However, outlook on core NIM would be important.
Demonstration of operating leverage and performance and outlook
on asset quality remain critical.
Over the past few quarters, SA deposit growth has been in low single
digits - improvement in the same would be a positive.
(INR Million)
Y/E March
Interest Income
Interest Expense
Net Interest Income
% Change (Y-o-Y)
Other Income
Net Income
Operating Expenses
Operating Profit
% Change (Y-o-Y)
Other Provisions
Profit before Tax
Tax Provisions
Net Profit
% Change (Y-o-Y)
NIM (Reported,%)
NIM (Cal, %)
Deposit Growth (%)
Loan Growth (%)
CD Ratio (%)
CASA Ratio (%)
Tax Rate (%)
Asset Quality
Gross NPA (INR B)
Gross NPA (%)
Net NPA (%)
October 2013
1Q
11,714
8,281
3,433
31.0
1,710
5,142
2,967
2,175
48.1
267
1,908
607
1,301
38.4
FY13
2Q
3Q
11,976
12,389
8,288
8,359
3,688
4,029
21.5
24.5
1,689
1,866
5,377
5,895
3,100
3,263
2,276
2,633
20.2
24.6
64
246
2,213
2,387
710
764
1,502
1,623
30.2
35.8
FY14
4Q
12,537
8,301
4,237
32.7
2,004
6,241
3,398
2,843
29.0
336
2,507
804
1,703
33.7
1Q
13,086
8,832
4,254
23.9
2,445
6,699
3,430
3,269
50.3
681
2,588
837
1,751
34.6
2QE
13,487
8,920
4,567
23.8
1,935
6,502
3,450
3,052
34.1
475
2,577
837
1,739
15.8
3QE
14,041
9,455
4,586
13.8
2,020
6,606
3,636
2,969
12.8
450
2,519
819
1,701
4.8
4QE
14,568
9,928
4,641
9.5
2,293
6,934
3,860
3,074
8.1
527
2,547
832
1,715
0.7
3.3
3.3
14.6
22.8
81.5
33.3
31.8
3.5
3.4
17.8
20.8
83.1
32.8
32.1
3.6
3.6
19.1
20.2
83.8
31.7
32.0
3.7
3.5
17.4
10.6
76.9
32.5
32.1
3.6
3.4
14.1
13.0
80.7
30.2
32.3
3.6
17.7
15.5
81.5
3.4
17.4
15.3
82.3
3.3
14.0
18.0
79.6
32.5
32.5
5.9
2.0
0.2
5.8
1.9
0.1
5.7
1.8
0.1
5.7
1.8
0.0
5.9
1.8
0.2
6.6
1.9
0.2
7.4
2.0
0.3
FY13
FY14E
48,616
33,230
15,386
27.3
7,269
22,655
12,728
9,927
29.3
912
9,014
2,885
6,130
34.3
55,182
37,135
18,047
17.3
8,693
26,740
14,376
12,365
24.6
2,133
10,231
3,325
6,906
12.7
32.7
3.5
3.4
17.4
10.6
76.9
32.5
32.0
32.5
8.5
2.2
0.3
5.7
1.8
0.0
8.5
2.2
0.3
3.5
14.0
18.0
79.6
C68
Kotak Mahindra Bank

Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
KMB IN
766.6
523 / 8
804 / 588
2/0/0
Financials & Valuation (Standalone, INR b)

Y/E March
2012 2013 2014E
NII
25.1 32.1 37.7
OP
16.6 21.6 26.7
NP
10.9 13.6 14.9
NIM (%)
4.6
4.6
4.4
EPS (INR)
24.7 29.3 32.0
EPS Gr. (%)
16.3 18.5
9.2
Cons. BV. (INR) 174.2 204.3 235.3
Cons. ROE (%)
15.4 15.5 14.6
ROA (%)
1.9
1.8
1.6
Payout (%)
2.8
2.8
2.9
Valuations
P/E(X) (Cons.)
23.3 21.3
P/BV (X) (Cons.)
3.3
2.9
P/ABV (X) (Cons.)
3.4
3.0
Div. Yield (%)
0.1
0.1
2015E
44.4
30.9
17.3
4.4
36.7
14.6
271.0
14.5
1.6
2.9
18.6
2.5
2.6
0.1
CMP: INR682
Neutral
Lending business
Profit from the lending business is expected to moderate to ~12% YoY,
led by the moderation in profitability for standalone bank and YoY
decline in earnings for Kotak Prime and Kotak Investments.
For the standalone bank, we expect loan and PAT growth of ~17% YoY
and 22% YoY respectively. Margins are expected to moderate by 10bp+
QoQ and credit cost (including standard asset provisioning) to be ~70bp
(stable YoY).
Capital Market and Asset Management business
We expect PAT from capital market related businesses to be flat QoQ.
However, it is expected to be lower by 20% on a YoY basis.
In the asset management business, profitability is expected to improve
42% YoY. Though, overall contribution to PAT from this segment would
continue to remain low at ~3%.
The stock trades at 18.6x FY15E EPS and 2.5x FY15E BV. Maintain Neutral.
Business growth and CASA trends.
Asset quality trends, especially in the CV segment.
KMB Group: Earnings Trends
(INR Million)
Y/E March
Kotak Bank (Standalone)
Kotak Prime
Kotak Mah. Investments
Lending Business
YoY Growth (%)
Kotak Securities
Kotak Mah. Capital Co.
Capital Market Business
YoY Growth (%)
Intl. Subsidiaries
Kotak Mah. AMC & Trustee Co.
Kotak Investment Advisors
Asset Management Business
YoY Growth (%)
Consol. PAT excluding Kotak Life
YoY Growth (%)
Kotak OM Life Insurance
Consolidation Adjust.
Consol. PAT Including Kotak Life
YoY Growth (%)
E: MOSL Estimates
October 2013
1Q
2,824
940
40
3,804
9.0
230
60
290
20.8
-50
40
80
70
-58.8
4,164
6.8
320
-50
4,434
6.6
FY13
2Q
3Q
2,804
3,617
1,140
1,050
160
80
4,104
4,747
16.3
23.9
400
380
40
20
440
400
76.0
42.9
80
50
-50
110
90
60
120
220
50.0
266.7
4,664
5,367
20.8
28.7
470
530
-110
-130
5,024
5,767
16.0
24.5
FY14
4Q
4,362
1,190
50
5,602
40.1
130
40
170
-69.1
-10
20
80
90
-43.8
5,862
24.5
580
220
6,662
27.9
1Q
4,028
1,170
40
5,238
37.7
310
40
350
20.7
-100
70
10
-20
-128.6
5,568
33.7
710
-10
6,268
41.4
2QE
3,426
1,112
55
4,592
11.9
302
50
352
-19.9
30
70
70
170
41.7
5,114
9.7
600
-50
5,664
12.7
3QE
3,678
1,156
70
4,904
3.3
317
50
367
-8.2
30
70
80
180
-18.2
5,452
1.6
550
-50
5,952
3.2
4QE
3,736
1,167
84
4,987
-11.0
337
64
401
135.8
40
76
90
206
128.8
5,594
-4.6
515
-90
6,019
-9.7
FY13
FY14E
13,607
4,307
336
18,250
22.9
1,145
167
1,312
-0.4
60
35
307
401
-0.8
19,964
20.4
1,900
21
21,885
19.4
14,868
4,604
249
19,721
8.1
1,267
204
1,471
12.1
0
286
250
536
33.5
21,728
8.8
2,375
-200
23,903
9.2
C69
Oriental Bank of Commerce

Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
OBC IN
291.8
44 / 1
368 / 121
7 / -45 / -55

Y/E March
NII
OP
NP
NIM (%)
EPS (INR)
EPS Growth (%)
BV/Sh. (INR)
ABV/Sh. (INR)
RoE (%)
RoA (%)
Div. Payout (%)
Valuations
P/E (x)
P/BV (x)
P/ABV (x)
Div. Yield (%)
2012
42.2
31.4
11.4
2.7
39
-24.0
380
325
10.7
0.7
23.4
2013 2014E
47.0 52.8
36.9 40.3
13.3 10.9
2.7
2.6
46
37
16.3 -18.3
415
443
350
368
11.5
8.7
0.7
0.5
23.4 23.2
3.3
0.4
0.4
6.1
4.0
0.3
0.4
5.0
2015E
60.0
45.4
12.4
2.6
43
14.7
476
401
9.3
0.5
23.2
3.5
0.3
0.4
5.7
CMP: INR150
Buy
Loan and deposit growth each is expected to be lower than the industry
average at 11% YoY.
Expect pressure on cost of funds to translate into lower NIM - building
6-7bp of sequential decline.
Asset quality is expected to remain under pressure. Hence, factored a
net slippage ratio of 1.8% v/s 1.3% in 1QFY14 and credit cost of 1.2%
v/s 1.1% in 1QFY14.
At end-1QFY14, AFS as a proportion of overall investment stood at
42%, with a duration of 4.5 years. And with an increase in G-sec yields,
we factor a net investment loss of INR100m v/s gain of INR1.7b in
1QFY14.
Overall, we lower the earnings estimate by 8/13% for FY14E/15E to
factor lower margins and loan growth. Maintain Buy.
Balance sheet growth and outlook on NIM.
Pipeline of restructuring and outlook on SEBs restructuring.
Tax rate: In 1QFY14, bank made higher tax provisions and effective
tax rate stood at 36%. Currently, we factor a tax rate of 22%.
(INR Million)
Y/E March
Interest Income
Interest Expense
Net Interest Income
% Change (YoY)
Other Income
Net Income
Operating Expenses
Operating Profit
% Change (YoY)
Other Provisions
Profit before Tax
Tax Provisions
Net Profit
% Change (YoY)
NIM (Rep, %)
NIM (Cal,%)
Deposit Growth (%)
Loan Growth (%)
CD Ratio (%)
CASA Ratio (%)
Tax Rate (%)
Asset Quality
OSRL (INR b)
OSRL (%)
Gross NPA (INR b)
Gross NPA (%)
October 2013
1Q
42,872
31,613
11,258
10.6
4,084
15,343
6,377
8,965
11.9
3,321
5,644
1,730
3,914
10.4
FY13
2Q
3Q
44,146
44,687
32,575
32,643
11,571
12,044
16.9
5.7
4,068
3,778
15,639
15,822
6,427
6,559
9,212
9,264
21.5
12.0
4,599
6,038
4,614
3,226
1,592
-39
3,022
3,264
80.2
-7.9
FY14
4Q
45,343
33,205
12,138
13.6
4,617
16,755
7,290
9,465
25.5
7,588
1,878
-1,202
3,079
16.2
1Q
47,177
34,106
13,070
16.1
5,381
18,451
7,568
10,883
21.4
5,327
5,555
2,022
3,534
-9.7
2.8
2.7
9.4
16.0
71.3
24.0
30.7
2.8
2.7
9.8
12.5
71.8
24.1
34.5
2.8
2.7
7.9
11.7
72.7
23.9
-1.2
2.8
2.7
12.8
15.2
73.3
23.9
-64.0
2.9
2.8
11.5
12.4
71.8
23.5
36.4
105.7
9.3
33.8
3.0
109.4
9.2
34.7
2.9
109.9
8.9
36.9
3.0
99.4
7.6
41.8
3.2
102.7
8.0
43.0
3.4
FY13
FY14E
177,048
130,036
47,012
11.5
16,547
63,559
26,652
36,907
17.5
21,546
15,361
2,081
13,279
16.3
196,822
144,014
52,808
12.3
18,412
71,220
30,938
40,281
9.1
25,808
14,473
3,618
10,855
-18.3
2QE
48,353
35,441
12,912
11.6
3,893
16,805
7,489
9,316
1.1
6,226
3,090
680
2,410
-20.2
3QE
49,838
36,693
13,145
9.1
4,186
17,330
7,657
9,673
4.4
6,790
2,883
432
2,451
-24.9
4QE
51,454
37,773
13,681
12.7
4,953
18,634
8,224
10,409
10.0
7,465
2,944
484
2,460
-20.1
2.8
10.6
10.9
71.8
2.7
12.1
10.9
71.8
2.7
14.0
13.1
72.7
22.0
15.0
16.5
2.8
2.7
12.8
15.2
73.3
23.9
13.5
48.8
3.3
99.4
7.6
41.8
3.2
45.1
3.4
47.4
3.5
2.6
14.0
13.1
72.7
25.0
48.8
3.3
C70

Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
PNB IN
353.5
169 / 3
922 / 402
-6 / -38 / -49

Y/E March
2012 2013 2014E
NII
134.1 148.6 160.8
OP
106.1 109.1 111.5
NP
48.8 47.5 40.0
NIM (%)
3.5
3.4
3.4
EPS (INR)
144
134
113
EPS Gr. (%)
2.9
-6.7 -15.7
BV/Sh. (INR)
777
884
971
ABV/Sh. (INR)
692
751
759
ROE (%)
21.1 16.5 12.2
ROA (%)
1.2
1.0
0.8
Div. Payout (%) 17.7 23.3 23.2
Valuations
P/E(X)
3.6
4.2
P/BV (X)
0.5
0.5
P/ABV (X)
0.6
0.6
Div. Yield (%)
5.7
4.7
2015E
180.5
125.9
45.7
3.3
129
14.2
1,070
813
12.7
0.8
23.2
3.7
0.4
0.6
5.4
CMP: INR478
Buy
Business growth is expected to be low amid management's focus on

consolidation, with loan and deposit growth of 8% YoY and 2% YoY.
NIM is expected to be stable QoQ at ~3.5%, led by an improvement in
liability profile over the past few quarters.
At end-1QFY14, the bank had 35% of portfolio in AFS, with a duration
of 4.7 years. And due to an increase in G-sec yields, we model a net
investment loss of INR1.2b v/s investment gain of INR1.9b in 1QFY14.
Net slippage ratio is likely to decline from the levels of 1QFY14, which
is seasonally a weak quarter. Also, there was a large corporate account
of INR16.6b (i.e. 45%+ of overall slippages) that slipped into NPA. We
factor a net slippage ratio of 1% v/s 3.3% in 1QFY14. Further,
restructuring would keep the stress high.
factor lower NIMs, MTM loss and increase in credit cost. Maintain Buy.
Management strategy: (1) consolidation of balance sheet, (2)
proportion of bulk deposits and CASA ratio and (3) asset quality
management.
Pipeline of restructured loans.
(INR Million)
Y/E March
Interest Income
Interest Expense
Net Interest Income
% Change (YoY)
Other Income
Net Income
Operating Expenses
Operating Profit
% Change (YoY)
Other Provisions
Profit before Tax
Tax Provisions
Net Profit
% Change (YoY)
NIM (Rep, %)
NIM (Cal, %)
Deposit Growth (%)
Loan Growth (%)
CD Ratio (%)
CASA Ratio (%)
Tax Rate (%)
Asset Quality
OSRL (INR B)
OSRL (%)
Gross NPA (INR B)
Gross NPA (%)
October 2013
1Q
105,540
68,608
36,931
18.5
11,680
48,611
20,203
28,409
14.8
10,325
18,084
5,627
12,457
12.7
FY13
2Q
3Q
104,211 105,288
67,717
67,954
36,494
37,333
5.7
5.6
9,054
9,705
45,548
47,038
20,219
20,219
25,329
26,819
0.2
0.2
10,738
8,016
14,590
18,803
3,935
5,747
10,656
13,056
-11.6
13.5
FY14
4Q
103,788
66,001
37,787
14.2
11,740
49,527
21,010
28,517
-2.9
14,777
13,740
2,423
11,317
-20.5
1Q
104,045
64,970
39,075
5.8
13,421
52,496
22,758
29,738
4.7
10,665
19,073
6,320
12,753
2.4
3.6
3.5
18.9
21.2
76.4
35.6
31.1
3.5
3.4
17.3
18.4
73.5
37.0
27.0
3.5
3.4
8.2
13.2
77.1
38.4
30.6
3.5
3.4
3.2
5.1
78.8
40.9
17.6
3.5
3.5
3.0
3.6
76.9
39.6
33.1
240.5
8.2
99.9
3.3
259.0
8.8
140.2
4.7
285.3
9.6
140.0
4.6
305.3
9.9
134.7
4.3
319.1
10.5
150.9
4.8
2QE
106,947
67,569
39,378
7.9
10,078
49,456
22,964
26,493
4.6
14,165
12,327
4,068
8,259
-22.5
3QE
109,886
69,560
40,326
8.0
10,547
50,874
23,742
27,132
1.2
13,426
13,706
4,523
9,183
-29.7
4QE
113,743
71,761
41,982
11.1
11,024
53,007
24,846
28,161
-1.2
13,514
14,647
4,808
9,839
-13.1
FY13
FY14E
418,933
270,368
148,565
10.8
42,159
190,724
81,651
109,074
2.8
43,856
65,218
17,741
47,477
-2.8
434,622
273,861
160,761
8.2
45,071
205,832
94,309
111,523
2.2
51,771
59,753
19,718
40,034
-15.7
3.4
2.0
7.6
77.6
3.4
10.2
11.0
77.6
3.4
14.0
12.0
77.5
33.0
33.0
32.8
3.5
3.4
3.2
5.1
78.8
40.9
27.2
194.7
5.5
305.3
9.9
134.7
4.3
165.4
5.1
179.9
5.3
3.4
14.0
12.0
77.5
33.0
194.7
5.5
C71
State Bank of India

Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
SBIN IN
684.0
1,123 / 18
2,550 / 1,453
-2 / -26 / -33
CMP: INR1,642

Y/E March
NII
OP
NP
NIM (%)
EPS (INR)
EPS Gr. (%)
Cons.BV (INR)
Cons.ABV (INR)
RoE (%)
RoA (%)
Div. Payout (%)
Valuations
Cons. P/E (x)
Cons. P/BV (x)
Cons P/ABV (x)
Div. Yield (%)
2012
432.9
315.7
117.1
3.8
229
35.9
1,541
1,321
16.0
0.9
17.8
2013
443.3
310.8
141.0
3.3
262
14.6
1,769
1,475
15.9
1.0
18.5
2014E
469.2
284.3
111.3
3.0
206
-21.3
1,937
1,474
11.2
0.7
18.7
2015E
539.2
346.2
128.8
3.0
237
14.9
2,130
1,604
11.8
0.7
18.6
5.9
0.9
1.1
2.5
7.5
0.8
1.1
2.0
6.6
0.7
1.0
2.3
Buy
Loan growth is expected to be strong at 20%+ YoY, while deposit growth

is expected to be lower at ~14%.
Expect the downward trajectory in NIM to continue. Modeled NIM
decline of ~10bp QoQ (down 35bp YoY); hence, NII is expected to grow
by 6% YoY.
Factored net investment loss of INR1b, compared to a gain of INR6.7b
in 1QFY14 and INR4.9b in 2QFY13, thus dragging earnings lower.
On a sequential basis, net slippages (on a high base) are expected to
decline, with expectation of both lower gross slippages and higher
recoveries and upgrades (predominantly led by agriculture segment).
We factor a net slippage ratio of 1.8% and credit cost of 90bp.
Hence, we expect PAT to decline 35% YoY and be at INR23.8b.
factor higher credit cost. Maintain Buy.

Mr Pratip Chaudhuri retired as Chairman in September 2013. Strategy
of new management and outlook on margin, asset quality and loan
growth in FY14 would be critical.
(INR Million)
Y/E March
Interest Income
Interest Expense
Net Interest Income
% Change (YoY)
Other Income
Net Income
Operating Expenses
Operating Profit
% Change (YoY)
Other Provisions
Profit before Tax
Tax Provisions
Net Profit
% Change (YoY)
NIM (Reported, %)
NIM (Cal, %)
Deposit Growth (%)
Loan Growth (%)
Domestic CD Ratio (%)
CASA Ratio (%)
Tax Rate (%)
Asset Quality
OSRL (INR B)
OSRL (%)
Gross NPA (INR B)
Gross NPA (%)
October 2013
1Q
289,225
177,979
111,246
14.7
34,931
146,177
64,410
81,767
12.9
24,563
57,204
19,688
37,516
136.9
FY13
2Q
3Q
296,068 303,436
186,330 191,892
109,738 111,545
4.7
-3.2
33,466
36,485
143,205 148,030
69,668
70,122
73,536
77,908
-1.6
7.3
18,256
26,679
55,280
51,229
18,699
17,268
36,581
33,961
30.2
4.1
FY14
4Q
307,842
197,058
110,784
-4.4
55,467
166,251
88,645
77,606
-19.1
41,810
35,797
2,804
32,992
-18.5
1Q
317,183
202,065
115,119
3.5
44,743
159,862
84,349
75,513
-7.6
28,659
46,854
14,443
32,411
-13.6
3.6
3.7
16.1
18.9
77.8
46.1
34.4
3.3
3.4
16.5
17.2
76.6
45.0
33.8
3.3
3.4
15.6
15.6
79.2
45.5
33.7
3.2
3.2
15.2
20.5
82.4
46.5
7.8
3.2
3.2
14.0
15.7
78.8
44.7
30.8
164
1.8
472
5.0
219
2.4
492
5.2
238
2.4
535
5.3
322
3.1
512
4.8
330
3.1
609
5.6
FY13
FY14E
4QE
340,114 1,196,571 1,319,400
220,585 753,258 850,233
119,529 443,313 469,167
7.9
2.4
5.8
53,912 160,348 170,416
173,441 603,661 639,583
94,588 292,844 355,256
78,854 310,817 284,327
1.6
-1.6
-8.5
33,538 111,308 123,074
45,316 199,509 161,253
14,129
58,459
49,988
31,186 141,050 111,264
-5.5
20.5
-21.1
2QE
327,789
210,993
116,796
6.4
35,843
152,639
87,506
65,133
-11.4
30,644
34,489
10,692
23,798
-34.9
3QE
334,314
216,590
117,723
5.5
35,918
153,641
88,814
64,827
-16.8
30,233
34,594
10,724
23,870
-29.7
3.1
14.2
20.2
3.0
15.3
18.4
3.0
15.0
15.0
31.0
31.0
641
5.6
678
5.7
31.2
3.3
3.3
15.2
20.5
82.4
46.5
29.3
31.0
706
5.7
322
3.1
512
4.8
706
5.7
3.0
15.0
15.0
C72
Union Bank of India

Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
UNBK IN
550.5
64 / 1
288 / 97
-2 / -52 / -50
2013 2014E
75.4 76.3
55.8 51.0
21.6 16.5
2.8
2.4
36
27
11.5 -23.8
263
284
224
222
15.0 10.0
0.7
0.5
25.8 23.2
3.2
0.4
0.5
6.9
4.2
0.4
0.5
4.8
2015E
89.2
58.5
18.9
2.5
31
14.9
308
226
10.6
0.5
23.2
3.7
0.4
0.5
5.5
October 2013
Neutral
While pressure on cost of funds has increased, lower interest income

reversals QoQ would provide a cushion. Hence, factored NIM decline
of 5bp (on an already lower base).
Net investment loss is expected to be INR500m v/s a gain of INR1.7b
in 1QFY14 and INR1.2b in 2QFY13.
Asset quality has been volatile over the past few quarters and given
the emerging challenges in macro-economic environment, we factor
a net slippage ratio of 1.8% and credit cost of 0.8%.
Restructured loans portfolio would continue to rise. At end-1QFY14,
bank had given a guidance of INR50b, of which INR23b was on account
of SEBs (implementation of which may get delayed to 3QFY14).
facor lower NIMs and higher provisions. Sustained pressure on asset
quality (higher restructuring guidance), low capitalization and
management change in Nov-12 will remain as a overhang on the stock.
Downgrade to Neutral from Under Review.

Asset quality outlook.
Guidance of 2.9% NIM given at end-1QFY14 seems optimistic and
there may be a downward revision in the same.
(INR Million)
Y/E March
Interest Income
Interest Expense
Net Interest Income
% Change (YoY)
Other Income
Net Income
Operating Expenses
Operating Profit
% Change (YoY)
Other Provisions
Profit before Tax
Tax Provisions
Net Profit
% Change (YoY)
NIM (Reported,%)
NIM (Cal, %)
Deposit Growth (%)
Loan Growth (%)
CD Ratio (%)
CASA Ratio (%)
Tax Rate (%)
Asset Quality
Gross NPA (INR b)
Gross NPA (%)
E: MOSL Estimates

Y/E March
2012
NII
92.4
OP
27.1
NP
17.9
NIM (%)
3.0
EPS (INR)
32
EPS Gr. (%)
-18.5
BV/Sh. (INR)
236
ABV/Sh. (INR)
197
RoE (%)
14.8
RoA (%)
0.7
Valuations
P/E(X)
P/BV (X)
P/ABV (X)
Div. Yield (%)
CMP: INR115
1Q
60,699
42,482
18,217
14.6
4,912
23,129
10,459
12,671
8.7
5,185
7,486
2,370
5,116
10.2
FY13
2Q
3Q
61,098
63,199
42,597
44,284
18,502
18,915
11.4
9.9
5,458
6,395
23,960
25,310
11,234
11,726
12,727
13,584
5.6
5.8
4,871
8,573
7,856
5,010
2,310
1,986
5,546
3,024
57.3
53.5
FY14
4Q
66,251
46,456
19,795
8.7
8,755
28,550
11,703
16,846
5.4
6,555
10,291
2,397
7,894
2.1
1Q
68,573
49,482
19,091
4.8
7,563
26,654
12,536
14,118
11.4
6,816
7,302
1,700
5,602
9.5
2QE
69,886
50,966
18,920
2.3
5,630
24,550
12,429
12,121
-4.8
8,011
4,110
1,151
2,959
-46.6
3QE
71,920
53,005
18,915
0.0
6,436
25,351
13,061
12,289
-9.5
6,511
5,778
1,734
4,045
33.8
4QE
75,591
56,208
19,382
-2.1
7,314
26,696
14,220
12,476
-25.9
6,807
5,669
1,816
3,853
-51.2
3.0
3.0
11.5
19.1
78.3
30.9
31.7
3.0
3.0
15.6
19.4
78.1
30.5
29.4
3.0
2.9
16.6
21.3
79.4
31.3
39.6
2.9
2.8
18.3
17.0
80.3
31.0
23.3
2.6
2.5
22.3
16.0
74.6
29.1
23.3
2.5
23.7
17.1
73.6
2.4
20.4
14.4
75.0
2.4
15.0
12.0
78.0
28.0
30.0
65.4
3.8
64.7
3.7
63.8
3.4
63.1
3.0
70.9
3.5
75.9
3.7
81.1
3.8
FY13
FY14E
251,247
175,819
75,428
11.0
25,520
100,949
45,122
55,827
6.3
25,185
30,642
9,063
21,579
20.7
285,969
209,661
76,308
1.2
26,943
103,250
52,246
51,005
-8.6
28,144
22,860
6,401
16,459
-23.7
32.0
3.0
2.8
18.3
17.0
80.3
31.0
29.6
28.0
87.6
3.7
63.1
3.0
87.6
3.7
2.4
15.0
12.0
78.0
C73
Yes Bank
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
YES IN
358.6
109 / 2
547 / 216
19 / -34 / -26
CMP: INR305

Y/E March
2012
NII
16.2
OP
15.4
NP
9.8
NIM (%)
2.7
EPS (INR)
28
EPS Gr. (%)
32.1
BV/Sh. (INR)
132
ABV/Sh. (INR)
132
RoE (%)
23.1
RoA (%)
1.5
Valuations
P/E(X)
P/BV (X)
P/ABV (X)
Div. Yield (%)
2013 2014E
22.2 26.7
21.4 24.4
13.0 13.6
2.8
2.8
36.3 37.8
31.0
4.2
162
192
162
192
24.8 21.3
1.5
1.3
19.2 19.1
8.4
1.9
1.9
2.0
8.1
1.6
1.6
2.0
2015E
31.7
29.2
16.5
2.8
45.9
21.6
230
228
21.8
1.3
19.1
6.6
1.3
1.3
2.5
Buy
Loan and deposit growth is expected to be above industry average at

~20% YoY and 30%+ YoY respectively.
While higher dependence on bulk deposits is expected to increase
the cost of funds, increase in base rate by 25bp would provide a cushion
and help the bank maintain NIM at ~2.9%.
Some MTM is expected on corporate bond portfolio (in provisions
line). However, gains from swap (in non-interest income line) that
the bank entered into, is expected to provide a cushion to earnings.
Growth in fee income, ex-financial markets, is expected to be 19/20%.
YES continues to demonstrate strong asset quality performance even
as the economic environment continues to pose challenges. We expect
the healthy trend to continue.
factor lower risk adjusted margins. Maintain Buy.

Outlook on NIM and positioning of investment portfolio.
Roll out branch network and continuation of the same would be
important for building its retail business (especially SA deposits).
Capital raising plans.
(INR Million)
Y/E March
Interest Income
Interest Expense
Net Interest Income
% Change (Y-o-Y)
Other Income
Net Income
Operating Expenses
Operating Profit
% Change (Y-o-Y)
Other Provisions
Profit before Tax
Tax Provisions
Net Profit
% Change (Y-o-Y)
NIM (Reported,%)
NIM (Cal, %)
Deposit Growth (%)
Loan Growth (%)
Customer assets growth (%)
CD Ratio (%)
CASA Ratio (%)
Asset Quality
Gross NPA (INR B)
Gross NPA (%)
E: MOSL Estimates
October 2013
1Q
18,863
14,142
4,722
33.3
2,881
7,603
3,007
4,596
41.4
300
4,296
1,395
2,901
34.3
FY13
2Q
3Q
19,864
21,336
14,622
15,493
5,242
5,843
35.9
36.7
2,768
3,132
8,009
8,975
3,162
3,341
4,847
5,635
25.6
41.3
317
567
4,530
5,068
1,469
1,645
3,061
3,423
30.2
34.7
FY14
4Q
22,877
16,495
6,381
42.4
3,794
10,175
3,836
6,339
47.3
975
5,364
1,742
3,622
33.2
1Q
23,979
17,388
6,591
39.6
4,421
11,012
4,212
6,800
47.9
970
5,830
1,821
4,008
38.2
2.8
2.8
15.2
16.4
32.4
76.7
16.3
2.9
2.9
18.6
22.9
32.5
80.4
17.3
3.0
3.1
20.2
22.3
27.4
77.8
18.3
3.0
3.0
36.2
23.7
30.9
70.2
18.9
3.0
2.9
29.9
24.3
24.2
73.4
20.2
1.1
0.3
1.0
0.2
0.8
0.2
0.9
0.2
1.0
0.2
2QE
25,129
18,605
6,524
24.5
3,733
10,257
4,367
5,889
21.5
1,200
4,689
1,524
3,165
3.4
3QE
26,366
19,814
6,552
12.1
3,633
10,185
4,326
5,858
4.0
1,200
4,658
1,491
3,167
-7.5
4QE
27,547
20,482
7,066
10.7
3,790
10,855
4,982
5,874
-7.3
1,121
4,753
1,542
3,211
-11.3
2.9
31.0
19.7
2.8
28.8
20.4
2.8
14.0
18.0
73.4
72.7
72.7
1.6
0.3
2.3
0.4
3.2
0.6
FY13
FY14E
82,940
60,752
22,188
37.3
12,574
34,762
13,345
21,417
39.1
2,160
19,257
6,251
13,007
33.1
103,021
76,289
26,732
20.5
15,576
42,308
17,888
24,421
14.0
4,491
19,930
6,378
13,552
4.2
2.9
2.8
36.2
23.7
30.9
70.2
18.9
0.9
0.2
2.8
14.0
18.0
72.7
24.1
3.2
0.6
C74
September 2013 Results Preview | Sector: Financials - NBFC
Financials NBFC
Growth to remain healthy; margins and asset quality, a key monitorable
Companies Covered
The performance of retail NBFCs (HFCs and AFCs) is expected to remain strong, led by
healthy loan growth (+20%) and stable asset quality outlook (though incremental
data points show some weakness). Margins are likely to moderate/remain stable
despite recent spike in cost of wholesale funds as companies have utilised excess
liqudity on balance sheet and have also raised lending rates during the quarter. While
competition from banks in the retail financing space is intensifying, growth outlook
remains healthy, led by the buoyancy in semi urban and rural economy, market share
gain, loan mix change, unique customer base and expanding branch network. Within
the NBFC space, we continue to like HDFC, IDFC, BAF and MMFS.
Bajaj Finance
HDFC
IDFC
LIC Housing Fin
M & M Financial
Power Finance Corp
The new RBI Governor has indicated to issue new banking licences by January 2014;
among NBFCs under our coverage, Shriram Transport Finance Company, Bajaj Finance
and IDFC are strong contenders for the same.

Housing finance companies: For housing finance companies (HFCs), 2QFY14 is likely
to remain a steady quarter, as growth in individual loans remains buoyant and asset
quality remains healthy. We expect overall loan growth for HDFC and LIC Housing
Finance (LICHF) to remain healthy at +20%. Margins are likely to remain stable/
marginally moderate on a sequential basis. No major regulatory changes were
announced during the quarter. HDFC remains our preferred pick; we also like LICHF
on valuation however margin pressure likely to persist.
Infrastructure finance companies: Infrastructure sector continues to remain in a fragile
state. Over the past few months, Government cleared projects worth over INR1t,
which is good for the sector and will have a positive impact but with a lag. Fuel
availability remains the most critical issue for power sector and resolution is still not
in sight. Among infrastructure finance companies, we expect growth to remain healthy
for REC and PFC at +20%; however, growth rate for IDFC is likely to moderate at sub
10%. Margins are likely to be under pressure due to spike in cost of funds. While no

CMP
(INR)
27.09.13
Financials - NBFC
Bajaj Finance
1,177
HDFC
783
IDFC
89
LIC Housing Fin
192
M & M Financial
257
Power Finance Corp
133
195
574
NBFC Bkg. Sector Aggregate
Rating
Buy
Buy
Buy
Buy
Buy
Neutral
Neutral
Buy
(INR Million)
Net Interest Income
Sep.13
Var.
Var.
% YoY % QoQ
Operating Profit
Sep.13
Var.
Var.
% YoY % QoQ
Net Profit
Sep.13
Var.
% YoY
5,830
16,192
6,868
4,607
6,602
18,499
16,545
9,383
84,526
3,308
17,022
7,543
4,356
4,669
18,235
16,711
7,826
79,671
1,702
12,103
4,288
3,326
2,302
12,776
11,825
3,520
51,842
32.3
16.8
6.8
30.3
25.5
25.4
29.2
8.1
21.2
-2.3
6.5
0.1
1.3
7.1
-4.7
-0.9
4.0
0.8
35.8
7.2
3.9
28.4
28.8
25.2
29.0
9.9
18.5
0.0
3.9
-14.2
-1.3
12.2
-5.0
-1.8
6.5
-1.2
32.2
5.1
-9.8
36.8
22.7
21.2
22.6
4.3
14.1
Var.
% QoQ
-3.2
3.2
-22.6
7.1
20.4
0.4
-1.1
3.2
-0.6
Sunesh Khanna (Sunesh.Khanna@MotilalOswal.com) / Alpesh Mehta (Alpesh.Mehta@MotilalOswal.com)

October 2013
C75
large accounts are likely to fall into NPA category, however delayed power/
infrastructure reforms continues to remin overhang on the asset quality will remain a
key monitorable in the current environment. In light of above issues and slow progress
on the power sector reforms we downgrade REC/PFC to Neutral.
Asset finance companies: Retail asset finance companies (AFCs) delivered strong
performance both in terms of growth and asset quality in the current cycle. Among
AFCs under our coverage, we expect both MMFS and Bajaj Finance to report healthy
growth in AUM led by good monsoon and continued buoyancy in rural India. SHTF
delivered healthy growth in the previous three quarters despite the sluggish CV sales;
however, such high growth is concerning, given the stress in the CV segment and
increasing delinquency levels. Margins are likely to moderate sequentially due to
increase in wholesale funding costs. Asset quality will remain a key monitorable,
given the continued stress on CV/UV/tractors/car sales. BAF is our prefered pick in
this segment
Sens ex Index
MOSL Fi nanci a ls Index
Sens ex Index
MOSL Fi na nci a ls Index
110
115
100
105
90
95
80
85
70
75
Jun-13
Jul -13 Aug-13 Sep-13
CMP (INR)
27.09.13
Financials - NBFC
Bajaj Finance
1,177
Dewan Housing
104
HDFC
783
IDFC
89
LIC Housing Fin
192
M & M Financial
257
Power Finance Corp 133
Rural Electric. Corp. 195
Shriram Transport
574
NBFC Aggregate
October 2013
Rating
EPS (INR)
FY13 FY14E FY15E
P/E (x)
FY13 FY14E FY15E
Buy
Buy
Buy
Buy
Buy
Buy
Neutral
Neutral
Buy
118.8
35.2
31.4
12.1
20.3
15.7
34.3
38.7
64.7
9.9
3.0
25.0
7.3
9.5
16.4
3.9
5.0
8.9
11.2
146.1
44.2
35.9
13.0
24.2
17.8
38.8
46.4
69.7
181.1
54.1
40.9
14.9
29.6
22.5
42.7
53.8
80.0
8.1
2.4
21.8
6.8
7.9
14.5
3.4
4.2
8.2
9.7
6.5
1.9
19.1
5.9
6.5
11.4
3.1
3.6
7.2
8.4
P/BV (x)
FY13 FY14E FY15E
1.7
0.4
4.8
1.0
1.5
3.3
0.7
1.1
1.8
2.2
1.5
0.4
4.3
0.9
1.3
2.8
0.6
0.9
1.5
1.9
1.2
0.3
3.9
0.8
1.1
2.4
0.5
0.8
1.3
1.7
RoE (%)
FY13 FY14E FY15E
21.9
17.1
23.8
14.1
16.8
23.4
20.1
23.6
20.6
20.1
19.8
16.3
25.6
13.7
17.4
20.7
19.6
23.7
18.3
19.6
20.8
17.2
25.7
14.1
18.4
22.4
18.7
23.1
17.9
19.6
C76
Bajaj Finance
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
BAF IN
49.8
59 / 1
1,591 / 966
3 / -3 / -3

Y/E March
2012 2013 2014E
NII
12.5 17.2 22.5
PPP
7.6 10.5 13.9
PAT
4.1
5.9
7.3
EPS (INR)
98.4 118.8 146.1
EPS Gr. (%)
45.9 20.8 23.0
BV/Share (INR) 487
676
797
RoA on AUM (%) 3.8
3.8
3.6
RoE (%)
24.0 21.9 19.8
Payout (%)
12.2 15.0 15.0
Valuations
P/E (x)
12.0
9.9
8.0
P/BV (x)
2.4
1.7
1.5
Div. Yield (%)
1.0
1.3
1.9
* Adj for value of subs
CMP: INR1,177
2015E
28.0
17.4
9.0
181.1
23.9
946
3.5
20.8
15.0
6.5
1.2
2.3
Buy
Bajaj Finance continues to ride high on its diversification strategy and

strong focus.
Healthy growth momentum continues in consumer and SME
segments. Loan book is expected to grow at a at 28% YoY.
Margins are likely to moderate during this quarter due to spike in cost
of funds; in the last quarter, margins stood at 12.9%.
We expect NII to grow at 32% YoY and flat QoQ.
Asset quality is expected to remain stable. As in June 2013, GNPAs
were 1.14% and NNPAs were 0.25%.
We expect provisions of INR730m v/s INR534m during 2QFY13 and
INR639m during the last quarter.
The stock trades at 1.5x FY14E and 1.2x FY15E BV. Maintain Buy.

Business growth momentum, as the company has been growing its
AUMs at 25%+ for the past 12 quarters.
Margin trends, as the wholesale cost of funds increased during the
quarter.
Asset quality trends in CE and two-wheeler business.
(INR Million)
Y/E March
Interest Income
Interest Expenses
Net Interest Income
YoY Growth (%)
Fees and other income
Net Income
YoY Growth (%)
Operating Expenses
Operating Profit
YoY Growth (%)
Provisions and Cont.
Profit before Tax
Tax Provisions
Net Profit
YoY Growth (%)
Adj PAT (Post Tax)
YoY Growth (%)
Loan Growth (%)
Cost to Income Ratio (%)
Tax Rate (%)
E: MOSL Estimates
October 2013
1Q
7,013
2,636
4,377
21.2
494
4,871
15.7
2,010
2,861
-24.5
320
2,540
677
1,864
-27.3
1,387
-45.9
61.2
41.3
26.6
FY13
2Q
3Q
7,355
8,250
2,947
3,209
4,408
5,041
31.9
54.7
537
500
4,945
5,541
26.3
46.0
1,983
2,195
2,963
3,346
-11.7
2.6
534
513
2,429
2,833
616
762
1,813
2,072
84.3
-32.2
1,287
1,608
-49.1
-28.8
57.7
47.3
40.1
39.6
25.4
26.9
FY14
4Q
8,323
3,265
5,058
36.4
466
5,524
27.9
2,336
3,188
-8.0
450
2,738
746
1,992
-21.4
1,638
-35.4
36.3
42.3
27.2
1Q
9,283
3,314
5,969
36.4
477
6,446
32.3
2,703
3,743
30.9
639
3,104
911
2,193
17.7
1,757
26.7
34.6
41.9
29.4
2QE
9,376
3,546
5,830
32.3
500
6,330
28.0
2,563
3,767
27.1
730
3,037
877
2,160
19.1
1,702
32.2
32.1
40.5
28.9
3QE
10,032
3,653
6,380
26.5
550
6,930
25.1
2,684
4,245
26.9
800
3,445
999
2,447
18.1
1,939
20.6
27.7
38.7
29.0
4QE
10,105
3,945
6,160
21.8
596
6,756
22.3
2,695
4,060
27.4
941
3,119
715
2,404
20.7
1,874
14.4
30.0
39.9
22.9
FY13
FY14E
29,248
12,057
17,191
23.5
1,998
19,189
18.2
8,523
10,666
-23.1
1,818
8,848
2,803
5,913
45.5
5,913
45.5
36.3
44.4
31.7
36,932
14,458
22,474
30.7
2,123
24,597
28.2
10,645
13,952
30.8
3,110
10,842
3,501
7,272
23.0
7,272
23.0
30.0
43.3
32.3
C77
HDFC
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
HDFC IN
1,546.4
1,210 / 19
931 / 632
4 / -10 / -3

Y/E March
2012
NII
52.1
PPP
57.5
PAT
41.2
Adj. EPS (INR)
22.7
EPS Gr. (%)
19.8
BV/Share (INR) 129
ABV / Share (INR)100
RoAA (%)
2.7
Core RoE (%)
22.3
Payout (%)
45.8
Valuations
AP/E (x)
26.0
P/BV (x)
6.1
AP/ABV (x)
5.9
Div. Yield (%)
1.4
2013 2014E
61.8 73.7
67.2 77.9
48.5 55.5
26.2 30.3
15.3 15.9
162
181
109
128
2.7
2.6
23.8 25.6
46.6 46.4
21.6
4.8
5.2
1.6
17.5
4.3
4.2
1.8
2015E
85.4
90.4
63.3
34.7
14.3
200
147
2.5
25.7
46.4
14.0
3.9
3.3
2.1
CMP: INR783
Buy
HDFC's loan growth (net of sell-downs) is likely to remain healthy at

~19.8% YoY and 5% QoQ.
Spreads should largely be stable at ~2.3% levels as the company has

utilised excess liqudity on balance sheet; furthur HDFC has also retail
& corporate lending rates by 25/100bp during the quarter.
NII is likely to remain strong at INR16.2b, registering a growth of 16.8%

YoY.
Non-interest income is likely to de-grow 30% YoY and 13% QoQ as we

estimate zero gains on sale of investments during the quarter.
Asset quality has remained healthy over the past several quarters and
the trend is likely to continue. In 1QFY14, GNPAs were 0.77% on 90days overdue basis.
The stock trades at 4.2x FY14E AP/ABV and 3.3x FY15E AP/AEPS (price
adjusted for value of other businesses and book value adjusted for
investments made in those businesses). Maintain Buy.

Loan growth and movement in spreads (on individual loans).
Asset quality trends; progress on the recovery of a corporate account
that became NPL during 1QFY14.
Spreads movement in the wake of increased wholesale rates.
(INR Million)
Y/E March
Interest Income
Interest Expense
Net Interest Income
YoY Change (%)
Profit on Sale of Inv.
Other operating income
Net Operating Income
YoY Change (%)
Other Income
Total Income
Operating Expenses
Pre Provisioning Profit
YoY Change (%)
Provisions
PBT
YoY Change (%)
Provision for Tax
PAT
YoY Change (%)
E: MOSL Estimates
October 2013
1Q
46,924
33,882
13,042
19.1
202
2,223
15,467
18.8
74
15,541
1,342
14,199
19.0
400
13,799
17.4
3,780
10,019
18.6
FY13
2Q
3Q
49,273
50,604
35,414
35,215
13,859
15,389
11.5
24.5
941
963
2,480
853
17,281
17,206
17.3
18.3
78
84
17,358
17,290
1,477
1,439
15,881
15,851
17.2
17.6
400
400
15,481
15,451
15.7
16.3
3,970
4,050
11,511
11,401
18.6
16.2
FY14
4Q
54,207
34,398
19,808
13.6
1,049
1,405
22,263
14.4
116
22,379
1,132
21,247
14.9
250
20,997
15.1
5,445
15,552
17.3
1Q
52,844
37,636
15,208
16.6
0
2,726
17,933
15.9
80
18,013
1,635
16,378
15.3
300
16,078
16.5
4,350
11,728
17.1
2QE
55,616
39,424
16,192
16.8
0
2,350
18,542
7.3
90
18,632
1,610
17,022
7.2
442
16,580
7.1
4,477
12,103
5.1
3QE
59,105
41,001
18,104
17.6
800
1,650
20,554
19.5
90
20,644
1,635
19,009
19.9
465
18,544
20.0
5,007
13,537
18.7
4QE
61,665
37,429
24,236
22.4
856
1,752
26,844
20.6
90
26,934
1,415
25,520
20.1
658
24,862
18.4
6,704
18,158
16.8
FY13
FY14E
200,695
138,909
61,786
18.5
3,156
7,274
72,216
16.9
351
72,567
5,389
67,178
16.9
1,450
65,728
16.0
17,245
48,483
17.6
229,231
155,490
73,741
19.3
1,656
8,478
83,874
16.1
350
84,224
6,295
77,929
16.0
1,865
76,064
15.7
20,537
55,527
14.5
C78
IDFC
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
IDFC IN
1,514.7
135 / 2
185 / 76
2 / -43 / -49
2013 2014E
25.8 28.3
29.4 33.1
18.4 19.8
12.1 13.0
18.0
7.6
90
100
81
91
2.9
2.7
15.1 15.7
26.2 26.9
7.3
1.0
0.8
2.9

Y/E March
2012
NII
20.3
PPP
24.6
Cons. PAT
15.5
EPS (INR)
10.3
EPS Gr. (%)
17.1
BV/Share (INR)
81
ABV/Share (INR) 73
RoAA (%)
2.9
Core RoE (%)
16.2
Payout (%)
25.2
Valuations
P/E (x)
8.7
P/BV (x)
1.1
P/ABV (x)
0.9
Div. Yield (%)
2.6
* Adj for value of subs
CMP: INR89
6.8
0.9
0.7
3.2
2015E
31.5
37.1
22.6
14.9
14.5
111
102
2.8
16.0
26.9
6.0
0.8
0.7
3.7
Buy
IDFC has consciously moderated loan growth in the wake of uncertain

macro environment. Loan growth is expected at 2.5% QoQ and 9% YoY.
We expect margins to contract 10bp on a QoQ basis, translating into
~5.4% QoQ and 23.4% YoY growth in NII.
Revenue from Investment Banking and Broking business is expected
to decline sequentially, given the subdued activity levels in capital
markets. However, we expect revenue from Asset Management to
improve marginally YoY. Loan related and other fee income too is
expected to increase sequentially YoY to INR530m.
Cost to income ratio on a 12-month rolling basis is likely to remain
stable at 15.3%.
Asset quality is expected to remain stable. We model provisions of
INR1.2b, against INR305m in 2QFY13 and INR592m during last quarter.
The stock trades at 0.9x FY14 P/BV and 0.8x FY15E P/BV. Buy.

Loan growth guidance, given the uncertain macro environment.
Movement in spreads in the wake of increase in wholesale cost of
funds.
Asset quality trends.
(INR Million)
Y/E March
NII
% Change (YoY)
- Infra Loans
- Treasury
Fees
- Asset management
- IB and Broking
- Fixed Income
- Loan related/others
Principal investments
Other Income
Net Income
% Change (YoY)
Operating Expenses
Operating Profit
% Change (YoY)
Provisions
PBT
Tax
PAT
Less: Consol Adjustments
Consol PAT
% Change (YoY)
E: MOSL Estimates
October 2013
1Q
6,220
28.8
5,550
670
1,462
640
90
120
612
20
14
7,716
8.3
1,160
6,556
9.6
1,026
5,530
1,713
3,817
19
3,798
21.1
FY13
2Q
3Q
6,430
6,560
29.1
22.4
5,960
6,110
470
450
1,568
1,676
690
870
210
80
190
300
478
426
490
70
16
59
8,504
8,365
(18.6)
(6.0)
1,241
1,333
7,263
7,032
(20.5)
(7.9)
305
518
6,957
6,514
2,188
1,965
4,770
4,549
13
(2)
4,757
4,551
(9.3)
19.4
FY14
4Q
6,430
9.9
6,030
400
2,412
890
400
570
552
1,290
9
10,141
22.7
1,559
8,581
26.9
1,647
6,934
1,646
5,289
32
5,257
57.0
1Q
6,860
10.3
6,310
550
2,679
930
130
1,390
229
630
6
10,174
31.9
1,384
8,790
34.1
592
8,198
2,627
5,571
34
5,537
45.8
2QE
6,868
6.8
6,387
481
1,600
725
145
200
530
500
0
8,968
5.5
1,425
7,543
3.9
1,200
6,343
2,030
4,313
25
4,288
(9.8)
3QE
7,005
6.8
6,515
490
1,980
800
150
300
730
625
0
9,610
14.9
1,475
8,135
15.7
1,000
7,135
2,283
4,852
25
4,827
6.1
4QE
7,153
11.2
6,652
501
2,327
944
169
300
915
709
0
10,190
0.5
1,556
8,634
0.6
1,089
7,544
2,409
5,136
16
5,120
(2.6)
FY13
FY14E
25,640
22.0
23,650
1,990
7,118
3,090
780
1,180
2,068
1,870
98
34,726
(0.0)
5,294
29,432
(0.3)
3,496
25,936
7,511
18,425
62
18,362
18.2
27,887
8.8
25,865
2,022
8,586
3,399
594
2,190
2,403
1,850
6
38,943
12.1
5,841
33,102
12.5
3,881
29,221
9,349
19,872
100
19,772
7.7
C79
LIC Housing Finance

Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
LICHF IN
505.0
97 / 2
300 / 152
7 / -19 / -36

Y/E March
NII
PPP
Adj. PAT
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh (INR)
RoAA (%)
RoE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
Div. Yield (%)
2012 2013 2014E

13.9 15.3 18.9
13.9 14.5 17.8
10.0 10.2 12.2
19.8 20.3 24.2
-8.4
2.2 19.4
112.5 128.3 149.3
1.8
1.5
1.5
20.3 16.8 17.4
19.9 21.7 20.9
10.6
1.7
1.9
9.5
1.5
2.0
7.9
1.3
2.5
2015E
23.2
21.8
14.9
29.6
22.3
173.1
1.4
18.4
20.9
6.5
1.1
2.8
CMP: INR192
Buy
LICHF's loan growth is likely to remain healthy at 22% YoY on the back
of buoyant demand in the individual loans segment.
Individual loans segment is likely to grow by 23% YoY and 6% QoQ,

while the developer segment is expected to grow by 4% QoQ. Share
of builder loan is likely to fall below 3% of overall book.
We expect margins to expand by ~15bp YoY (re-pricing of the teaser

rate loans), which would provide cushion to margins.
Asset quality is likely to remain stable. We model provisioning reversal

of ~INR200m (v/s provisioning of INR171m in 1QFY14); the reversal
would be on account of provisioning release for teaser loans.

Asset quality in the developer category; outlook on performance in
the developer portfolio.
Margin trends; LICHF has been disappointing on the margin front for
past few quarters. Margins bounced back last quarter; however,
sustaining/improving the margins will be key.
Overall asset quality trends.
(INR Million)
Y/E March
Interest Income
Interest Expenses
Net Interest Income
YoY Growth (%)
Fees and other income
Net Income
YoY Growth (%)
Operating Expenses
Operating Profit
YoY Growth (%)
Provisions and Cont.
Profit before Tax
Tax Provisions
Net Profit
YoY Growth (%)
Adj PAT (Post Tax)
YoY Growth (%)
Loan Growth (%)
Borrowings Growth (%)
Tax Rate (%)
E: MOSL Estimates
October 2013
1Q
17,179
13,674
3,505
-2.9
494
3,999
-5.0
521
3,479
-8.2
436
3,043
766
2,277
-11.2
2,277
-11.2
24.1
23.7
13.0
25.2
FY13
2Q
3Q
18,081
19,050
14,546
15,353
3,535
3,697
5.8
13.5
537
500
4,073
4,196
4.0
10.6
679
673
3,393
3,524
1.2
8.0
69
319
3,324
3,205
894
843
2,430
2,362
147.0
-22.7
2,430
2,362
-3.8
4.6
23.2
23.8
24.2
22.1
16.7
16.0
26.9
26.3
FY14
4Q
20,281
15,673
4,608
24.3
466
5,074
17.5
946
4,128
19.2
-35
4,163
1,002
3,162
24.7
3,162
24.7
23.4
22.6
18.6
24.1
1Q
21,303
16,755
4,547
29.7
477
5,024
25.6
613
4,411
26.8
171
4,240
1,135
3,105
36.3
3,105
36.3
22.1
22.6
12.2
26.8
2QE
22,368
17,761
4,607
30.3
500
5,107
25.4
751
4,356
28.4
-200
4,556
1,230
3,326
36.8
3,326
36.8
22.5
20.6
14.7
27.0
3QE
23,350
18,649
4,701
27.2
550
5,251
25.1
822
4,429
25.7
-225
4,654
1,257
3,398
43.8
3,398
43.8
22.9
23.0
15.7
27.0
4QE
24,924
19,858
5,066
9.9
596
5,662
11.6
1,033
4,629
12.1
-261
4,890
1,330
3,560
12.6
3,560
12.6
22.0
23.6
18.2
27.2
FY13
FY14E
74,591
59,246
15,345
10.3
1,998
17,343
6.8
2,819
14,524
4.7
789
13,736
3,504
10,232
11.9
10,232
2.2
23.4
22.6
16.3
25.5
91,945
73,023
18,921
23.3
2,123
21,044
21.3
3,219
17,826
22.7
-515
18,341
4,952
13,389
30.9
12,221
19.4
22.0
23.6
15.3
27.0
C80
M & M Financial Services

Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
MMFS IN
563.0
145 / 2
288 / 171
3 / 28 / 37
CMP: INR257
MMFS continues to ride high on its multi-product strategy and strong

rural focus. Healthy growth momentum in the car segments is likely
to sustain on the back of festive season . AUMs expected to grow at a
healthy pace at 30% levels.
Margins are likely to remain flat during this quarter; despite rise in
cost of funds as the company has raised lending rates during the quarter
which is likely to cushion margins
We expect NII to grow at 35% YoY and flat QoQ.
Asset quality is expected to remain stable. As in June 2013, GNPAs

were 4.2% and NNPAs were at 1.9%.
We expect provisions of INR1.15b v/s INR836m during 2QFY13 and

INR1.25b during last quarter.
The stock trades at 3x FY14E and 2.6x FY15E BV. Maintain Buy.

Y/E March
2012
NII
16.2
PPP
10.8
PAT
6.2
EPS (INR)
12.1
EPS Gr. (%)
33.6
BV/Share (INR) 57.5
ABV/Share (INR) 18.3
RoA on AUM (%) 3.8
RoE (%)
22.8
Payout (%)
27.1
Valuations
P/E (x)
21.3
P/BV (x)
4.5
P/ABV (x)
4.6
Div. Yield (%)
1.1
2013 2014E
22.2 28.4
15.3 19.8
8.7 10.0
15.7 17.8
29.8 13.4
79.1 92.2
76.1 86.7
3.9
3.4
23.4 20.7
27.1 26.3
16.4
3.2
3.4
1.4
14.5
2.8
3.0
1.6
2015E
35.4
25.3
12.7
22.5
26.6
108.8
100.1
3.3
22.4
26.3
11.4
2.4
2.6
2.0
Y/E March
1Q
Operating Income
8,351
Other Income
39
Total income
8,390
YoY Growth (%)
49.8
Interest Expenses
3,475
Net Income
4,916
Operating Expenses
1,667
Operating Profit
3,248
YoY Growth (%)
56.6
Provisions
854
Profit before Tax
2,395
Tax Provisions
784
Net Profit
1,610
YoY Growth (%)
57.6
AUM growth (%)
39.3
Borrowings growth (%)
44.8
33.9
Provisions/Operating Profits (%)
26.3
Tax Rate (%)
32.8
E: MOSL Estimates; We have not included
October 2013
Buy

Business growth momentum, as the company has been growing its
AUMs at 30%+ rate for the past 10 quarters.
Margin trends, as the wholesale cost of funds increased during the
quarter.
Asset quality trends, given continued weakness in car sales.
(INR Million)
FY13
FY14
FY13
FY14E
2Q
3Q
4Q
1Q
2QE
3QE
4QE
9,157
9,956
11,103
10,925
11,744
12,684
14,050
38,413
49,402
135
53
153
60
150
100
139
533
450
9,292
10,009
11,256
10,985
11,894
12,784
14,189
38,947
49,852
43.9
35.0
32.9
30.9
28.0
27.7
26.1
39.4
28.0
3,898
4,344
4,471
4,761
5,142
5,464
5,672
16,188
21,039
5,394
5,665
6,784
6,224
6,752
7,320
8,517
22,759
28,813
1,768
1,872
2,112
2,064
2,083
2,340
2,537
7,420
9,023
3,626
3,793
4,673
4,160
4,669
4,980
5,980
15,339
19,789
51.8
35.6
31.2
28.1
28.8
31.3
28.0
41.7
29.0
836
815
329
1,252
1,150
1,000
1,110
2,833
4,512
2,790
2,977
4,344
2,907
3,519
3,980
4,870
12,507
15,278
914
975
1,160
995
1,218
1,377
1,681
3,833
5,271
1,876
2,002
3,184
1,912
2,302
2,603
3,190
8,674
10,008
38.4
29.4
39.9
18.7
22.7
30.0
0.2
39.9
15.4
35.6
32.0
35.1
34.8
31.2
28.8
28.8
35.1
28.8
38.9
34.5
35.1
36.8
23.2
21.5
32.3
35.1
32.3
32.8
33.1
31.1
33.2
30.8
32.0
29.8
32.6
31.3
23.1
21.5
7.0
30.1
24.6
20.1
18.6
18.5
22.8
32.7
32.8
26.7
34.2
34.6
34.6
34.5
30.6
34.5
EO inc. of INR154m in 4QFY13 for presentation purpose; According taxes have been adj.
C81
Power Finance Corporation

Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
POWF IN
1,319.9
176 / 3
227 / 97
16 / -31 / -36
CMP: INR133

Y/E March
2012 2013 2014E
NII
41.1 62.7 74.4
PPP
42.5 60.5 69.8
Adj. PAT
31.5 45.2 51.3
Adj. EPS (INR)
23.9 34.3 38.8
EPS Gr. (%)
3.9 43.4 13.3
BV/Share (INR) 157.5 183.9 211.8
Adj. RoAA (%)
2.7
3.1
2.8
RoE (%)
17.5 20.1 19.6
Payout (%)
30.3 24.2 24.4
Valuations
P/E (x)
5.6
3.9
3.4
P/BV (x)
0.8
0.7
0.6
Div. Yield (%)
4.5
5.3
5.8
2015E
81.8
79.0
56.3
42.7
9.9
243.7
2.6
18.7
23.5
3.1
0.5
6.4
Neutral
Loan growth is expected to remain healthy at ~23% YoY. On a sequential

basis, loans and borrowings are expected to grow by ~4% and ~5%
respectively.
NII is expected to grow at a healthy 25% YoY on the back of healthy
loan growth. Margins are likely to moderate QoQ.
We expect MTM loss of INR1.2b during the quarter, compared with a
gain of INR1.1b loss incurred in 1QFY14.
We expect NIMs to remain moderate at 4.4%, compared to 4.7%
reported during 1QFY14.
Barring a couple of accounts, asset quality by large remained healthy,
though it will remain a key monitorable, given the uncertain macro
environment and issues related to fuel linkages.
The stock trades at 0.63x FY14E and 0.55x FY15E BV. We are downgrading
our rating from Buy to Neutral.

Growth trends and asset quality performance, against the backdrop
of challenging fuel linkage issues.
Movement in spreads and yields on assets.
Overall disbursements trends and disbursements to SEBs for
transitional finance.
Forex loss due to sharp depreciation in INR.
Y/E March
1Q
Interest Income
39,000
Interest Expenses
25,060
Net Interest Income
13,940
YoY Gr %
40.8
Other Income
90
Net Operational Income
14,030
YoY Gr %
36.9
Exchange gain/(loss)
-770
Total Net Income
13,260
YoY Gr %
39.6
Operating Expenses
286
YoY Gr %
5.8
% to Income
2.2
Operating Profit
12,974
YoY Gr %
40.6
Provisions
20
PBT
12,954
Tax
3,240
Tax Rate %
25.0
PAT
9,714
YoY Gr %
41.6
Adjusted PAT (For Forex)
10,292
YoY Gr %
38.6
E:MOSL Estimates; Quarterly and annual
October 2013
(INR Million)
FY13
2Q
3Q
41,300
44,190
26,550
27,410
14,750
16,780
36.6
53.0
160
90
14,910
16,870
37.0
50.5
-240
-460
14,670
16,410
151.2
6.4
351
389
6.2
34.0
2.4
2.4
14,320
16,022
159.9
5.9
-30
900
14,350
15,122
3,978
3,940
27.7
26.1
10,372
11,182
147.5
0.9
10,545
11,522
31.4
45.6
numbers would not
FY14
4Q
1Q
2QE
3QE
4QE
45,920
49,590
49,888
50,237
51,886
28,660
30,181
31,388
32,644
33,016
17,260
19,409
18,499
17,593
18,870
40.4
39.2
25.4
4.8
9.3
250
100
130
140
212
17,510
19,509
18,629
17,733
19,082
36.6
39.1
24.9
5.1
9.0
90
-1,070
-1,200
-650
-580
17,600
18,439
17,429
17,083
18,502
35.2
39.1
18.8
4.1
5.1
426
319
394
359
593
4.1
11.8
12.4
-7.7
39.2
2.4
1.7
2.3
2.1
3.2
17,174
18,120
17,035
16,724
17,909
36.2
39.7
19.0
4.4
4.3
-90
910
1,200
700
732
17,264
17,210
15,835
16,024
17,177
4,320
5,230
3,959
4,006
4,360
25.0
30.4
25.0
25.0
25.4
12,944
11,980
11,876
12,018
12,816
57.9
23.3
14.5
7.5
-1.0
12,877
12,725
12,776
12,506
13,249
59.9
23.6
21.2
8.5
2.9
match due to differences in classification
FY13
FY14E
170,410
107,680
62,730
52.7
590
63,320
40.2
-1,380
61,940
41.5
1,450
12.1
2.3
60,490
42.4
800
59,690
15,478
25.9
44,212
45.8
45,235
44.0
201,601
127,229
74,371
18.6
582
74,953
18.4
-3,500
71,453
15.4
1,665
14.8
2.3
69,788
15.4
3,542
66,246
17,555
26.5
48,691
10.1
51,256
13.3
C82
Rural Electrification Corp

Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
RECL IN
987.5
193 / 3
268 / 146
4 / -11 / -16

Y/E March
2012 2013 2014E
NII
38.9 52.8 66.8
PPP
38.5 52.9 65.2
PAT
28.2 38.2 45.9
EPS (INR)
28.6 38.7 46.4
EPS Gr. (%)
10.1 35.4 20.1
BV/Share (INR) 149.2 178.2 213.1
RoAA (%)
3.0
3.3
3.4
RoE (%)
20.5 23.6 23.7
Payout (%)
30.5 24.9 24.9
Valuations
P/E (x)
6.8
5.0
4.2
P/BV (x)
1.3
1.1
0.9
Div. Yield (%)
3.8
4.3
5.1
2015E
74.9
75.4
53.1
53.8
15.8
253.5
3.3
23.1
24.9
3.6
0.8
5.9
CMP: INR195
Loan growth is expected to remain healthy at 20%+ levels. We model

a loan growth of ~24% YoY and ~4% QoQ.
RECL's margins have stood at 4.96% (highest in last four years). This
was led by an improvement in yields, while it also maintained a tight
leash on cost of funds. However, in the current quarter, we expect
margins to moderate and decline 25bp sequentially to 4.88%.
We factor forex MTM loss of INR700m for 2QFY14.
Barring a couple of accounts, asset quality by large remained healthy,
though it will remain a key monitorable, given the uncertain macro
environment. We model provisions of INR400m during the quarter.
The stock trades at 0.9x FY14E and 0.8x FY15E BV. We are downgrading
our rating from Buy to Neutral.

Growth trends and asset quality performance against the backdrop
of challenging macro environment.
Movement in spreads and yield on assets.
Overall disbursement trends and disbursements to SEBs for
transitional finance.
Forex loss due to sharp depreciation in INR.
Y/E March
FY13
1Q
2Q
3Q
Interest Income
29,968
32,405
35,014
Interest Expenses
18,314
19,603
20,711
Net Interest Income
11,654
12,802
14,303
YoY Gr (%)
28.1
34.8
42.3
Other Operational Income
717
514
322
Net Operational Income
12,372
13,316
14,626
YoY Gr (%)
30.4
36.1
41.0
Other Income
-133
79
-34
Total Net Income
12,239
13,394
14,591
YoY Gr (%)
27.2
52.3
27.9
Operating Expenses
456
585
507
YoY Gr (%)
8.7
34.2
-34.9
% to Income
3.7
4.4
3.5
Operating Profit
11,784
12,809
14,085
YoY Gr %
28.0
53.2
32.5
Op. Profit adj. forex gain /loss
12,158
12,949
14,305
YoY Gr (%)
31.0
34.7
46.5
Provisions
0
0
250
PBT
11,784
12,809
13,835
YoY Gr (%)
31.6
53.2
33.2
Tax
3,016
3,270
3,568
Tax Rate (%)
25.6
25.5
25.8
PAT
8,767
9,539
10,267
YoY Gr (%)
32.5
52.8
33.4
Adjusted PAT
9,046
9,643
10,430
YoY Gr (%)
35.6
34.3
47.9
E:MOSL Estimates; Quarterly and annual numbers would not
October 2013
Neutral
(INR Million)
FY14
4Q
1Q
2QE
3QE
4QE
35,522
39,141
40,315
41,524
42,892
21,435
22,439
23,770
24,711
26,124
14,088
16,702
16,545
16,814
16,769
38.0
43.3
29.2
17.5
19.0
726
675
600
600
671
14,813
17,377
17,145
17,414
17,440
37.1
40.5
28.8
19.1
17.7
112
-374
-475
-375
-302
14,925
17,004
16,670
17,039
17,138
36.3
38.9
24.5
16.8
14.8
656
564
659
726
656
-2.2
23.8
12.7
43.3
-0.1
4.4
3.3
4.0
4.3
3.8
14,269
16,440
16,011
16,313
16,483
38.8
39.5
25.0
15.8
15.5
14,310
17,020
16,711
16,913
17,002
38.4
40.0
29.0
18.2
18.8
1,057
560
400
450
574
13,212
15,880
15,611
15,863
15,909
29.0
34.8
21.9
14.7
20.4
3,609
4,343
4,293
4,362
4,399
27.3
27.3
27.5
27.5
27.7
9,603
11,537
11,318
11,500
11,510
25.9
31.6
18.6
12.0
19.9
9,633
11,958
11,825
11,935
11,886
25.5
32.2
22.6
14.4
23.4
match due to differences in classification
FY13
FY14E
132,910
80,063
52,847
36.0
2,279
55,126
39.2
23
55,149
35.2
2,203
-5.3
4.0
52,946
37.7
53,721
37.8
1,307
51,640
36.1
13,463
26.1
38,176
35.5
38,752
35.6
163,872
97,043
66,829
26.5
2,546
69,375
25.8
-1,525
67,850
23.0
2,605
18.2
3.8
65,245
23.2
67,645
25.9
1,984
63,262
22.5
17,397
27.5
45,865
20.1
47,605
22.8
C83
Shriram Transport Finance

Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
SHTF IN
226.3
130 / 2
842 / 465
5 / -22 / -11

Y/E March
2012 2013 2014E
Net Inc.
32.3 34.6 38.7
PPP
26.4 28.7 32.1
PAT
12.6 13.6 14.3
Cons.PAT
13.1 14.6 15.8
EPS (INR)
55.6 60.0 63.0
EPS Gr. (%)
4.5
7.9
5.0
Cons. EPS (INR) 57.8 64.7 69.7
Cons. EPS Gr. (%) 9.9 11.9
7.8
BV/Share (INR) 264.8 317.1 371.6
Cons. BV (INR) 266.5 323.0 384.2
RoA on AUM (%) 2.8
2.6
2.3
RoE (%)
23.1 20.6 18.3
Payout (%)
13.6 13.6 13.3
Valuations
P/Cons. EPS (x)
9.9
8.9
8.2
P/Cons. BV (x)
2.2
1.8
1.5
Div. Yield (%)
1.1
1.2
1.3
CMP: INR574
2015E
45.6
37.4
16.3
18.1
72.1
14.5
80.0
14.8
433.9
454.5
2.3
17.9
13.3
7.2
1.3
1.4
SHTF's asset growth improved in FY13. We expect company's AUM

growth to remain healthy at ~22%/3% YoY/QoQ. We estimate
disbursements growth to remain muted at 4% YoY and stable QoQ.
Sequentially, disbursements may see some decline as they grew
sharply by 48%/3% YoY/QoQ in 1QFY14. We model AUM growth of 6%
QoQ at INR556b.
Margins are expected to moderate 10bp sequentially. Thus, NII (incl.
securitization income) should grow 8% YoY.
Given the uncertain macro environment and slowdown in CV sales,
asset quality continues to be a key monitorable.
We have factored higher provisions of INR2.6b v/s INR2.5b in 1QFY13
and INR2.1b in 2QFY13.

Business growth; pick-up in growth was observed during last two
quarters and management's commentary on the same.
Movement in borrowing costs.
Asset quality trends, given the sluggish CV sales.
Quaterly Performance
Y/E March
FY13
FY14
1Q
2Q
3Q
4Q
1Q
2QE
3QE
Interest Income
8,876
10,946
12,046
13,104
13,856
15,380
16,379
Interest expenses
6,173
6,859
7,350
8,057
8,692
9,562
9,848
Net Interest Income
2,702
4,087
4,696
5,046
5,163
5,818
6,531
YoY Growth (%)
1.8
16.0
51.0
74.1
91.1
42.3
39.1
Securitization income
5,323
4,590
4,252
3,892
3,859
3,565
3,408
Net Income (Incl. Securitization)
8,025
8,678
8,947
8,939
9,022
9,383
9,939
YoY Growth (%)
2.6
4.0
11.3
11.0
12.4
8.1
11.1
Fees and Other Income
702
314
300
569
825
725
725
Net Operating Income
8,727
8,991
9,247
9,508
9,848
10,108
10,664
YoY Growth (%)
5.2
4.5
11.0
14.4
12.8
12.4
15.3
Operating Expenses
1,940
1,872
1,999
2,049
2,499
2,282
2,334
Operating Profit
6,787
7,119
7,248
7,459
7,348
7,826
8,331
YoY Growth (%)
2.5
4.4
12.1
14.2
8.3
9.9
14.9
Provisions
2,026
2,106
2,126
2,193
2,503
2,725
3,025
Profit before Tax
4,761
5,013
5,122
5,266
4,845
5,101
5,306
Tax Provisions
1,543
1,638
1,662
1,713
1,435
1,581
1,671
Net Profit
3,219
3,376
3,460
3,552
3,411
3,520
3,634
YoY Growth (%)
-7.3
12.7
14.3
15.3
6.0
4.3
5.0
AUM Growth (%)
13.3
15.8
18.6
23.5
25.2
26.1
25.9
Disbursement Growth (%)
12.2
28.6
42.0
54.6
47.9
31.3
18.1
Securitization Inc. / Net Inc. (%)
61.0
51.1
46.0
40.9
39.2
35.3
32.0
22.2
20.8
21.6
21.6
25.4
22.6
21.9
Tax Rate (%)
32.4
32.7
32.5
32.5
29.6
31.0
31.5
E: MOSL Estimates; * Quaterly nos and full year nos will not tally due to different way of reporting
October 2013
Buy
(INR Million)
FY13
FY14E
4QE
16,625
45,028
10,084
28,439
6,541
16,588
29.6
36.1
3,860
18,057
10,401
34,645
16.4
7.4
741
1,885
11,142
36,530
17.2
8.9
2,497
7,860
8,645
28,670
15.9
8.5
3,196
8,508
5,449
20,162
1,730
6,556
3,719
13,606
4.7
8.2
24.0
23.5
10.2
34.6
34.6
49.4
22.4
21.5
31.7
32.5
financial nos
62,240
38,187
24,053
45.0
14,692
38,746
11.8
3,016
41,762
14.3
9,612
32,150
12.1
11,449
20,701
6,417
14,284
5.0
24.0
25.0
35.2
23.0
31.0
C84
September 2013 Results Preview | Sector: Healthcare
Healthcare
Companies Covered
EBITDA to grow 19% YoY on strong operational performance by Sun

Pharma, Dr Reddy's, Glenmark and Cadila
Biocon
For 2QFY14, we expect revenue growth of 24% YoY and EBITDA growth of 19% YoY for
Healthcare Universe (excluding one-offs). Adjusted PAT is likely to grow 16% YoY.
Cadila Healthcare
Cipla
Divis Laboratories
EBITDA growth would be mainly led by strong performance by Sun Pharma, Dr

Reddy's, Glenmark and Cadila. For Sun Pharma, growth would be driven by
consolidation of URL and DUSA Pharma. For Dr Reddy's and Glenmark, it would be
driven by new launches and better sales mix. Cadila would witness strong EBITDA
growth over a low base of 2QFY13.
Dr Reddys Labs.
GSK Pharma
Glenmark Pharma
IPCA Laboratories
Lupin
EBITDA growth would be lower than revenue growth due to subdued operational
performance from Cipla and Ranbaxy on account of deteriorating profitability in the
base business and other cost pressures. GSK Pharma may continue to report YoY
decline in EBITDA due to supply chain related issues, while Sanofi India will suffer
from high base effect. At the macro level, we expect operating performance for the
rest of our Healthcare Universe to benefit from favorable currency.
Ranbaxy Labs.
Sanofi India
Sun Pharmaceuticals
Torrent Pharma
2QFY14E aggregates, excluding one-offs

Healthcare Universe
YoY Growth (%)
EBITDA Margin
Net Profit Margin
Aggregates
Sales EBITDA Adj PAT Sep-13 Sep-12 Chg.(bp) Sep-13 Sep-12 Chg.(bp)
MNC Pharma
7.3
-19.0
-12.1
19.8 26.2
-645
16.5 20.2
-366
Big 4 Generics
29.1
21.5
17.3
24.3 25.8
-153
16.6 18.3
-166
CRAMS
16.2
14.2
32.7
38.4 39.1
-68
28.5 25.0
354
Second Tier generics 19.9
22.1
17.8
19.4 19.0
34
11.5 11.7
-21
Sector Aggregate
23.9
18.7
15.9
22.5 23.5
-99
15.0 16.0
-103
Note: Above numbers exclude one-offs to facilitate comparison of core operations. Big-4
Generics include Ranbaxy, Cipla, Dr Reddy's and Sun.

CMP
(INR)
27.09.13
334
693
433
984
2,411
523
2,414
695
853
334
2,558
590
439
(INR million)
Rating
Biocon
Neutral
Cadila Health
Buy
Cipla
Neutral
Divis Labs
Buy
Dr Reddy s Labs
Buy
Glenmark Pharma
Buy
GSK Pharma
Buy
IPCA Labs.
Buy
Lupin
Buy
Ranbaxy Labs
Neutral
Sanofi India
Neutral
Sun Pharma
Buy
Torrent Pharma
Buy
Sector Aggregate
Note: Historic numbers exclude upside from
Sep.13
7,338
17,326
27,040
5,494
33,615
15,192
7,054
9,097
27,042
29,909
4,380
34,561
9,424
227,471
one-off
Sales
Var.
Var.
% YoY % QoQ
23.9
5.6
11.9
5.8
31.5
9.7
16.2
6.5
20.8
20.5
24.5
22.7
5.5
10.8
17.9
12.9
22.1
17.2
26.5
11.5
10.4
6.8
41.6
5.2
21.3
1.3
24.3
11.5
opportunities
Sep.13
1,534
2,973
6,245
2,109
7,732
3,000
1,546
2,097
5,124
3,027
716
13,740
1,810
51,653
EBITDA
Var.
% YoY
31.6
28.9
7.2
14.2
24.2
27.0
-22.3
17.3
17.3
4.1
-11.0
38.2
16.5
19.9
Var.
% QoQ
4.9
4.0
-7.5
7.6
54.4
21.3
36.0
22.6
12.7
15.3
15.0
0.0
-3.7
10.4
Net Profit
Sep.13
Var.
% YoY
959
7.1
1,665
75.1
4,103
-6.6
1,566
32.7
4,859
39.3
1,800
26.4
1,308
-20.1
1,003
-19.8
3,168
15.0
1,663
-19.1
581
13.3
10,476
35.6
1,235
15.1
34,387
17.2
Var.
% QoQ
2.6
-14.9
-13.6
-10.4
48.4
39.9
37.6
39.8
-4.9
27.8
13.5
-6.8
-4.3
3.3
Alok Dalal (Alok.Dalal@MotilalOswal.com) / Hardick Bora (Hardick.Bora@MotilalOswal.com)

October 2013
C85
Adjusted PAT growth at 16% would be lower than EBITDA growth, mainly because of
MTM losses on forex loans and derivatives in 2QFY14 vis--vis gains reported in 2QFY13.
Core 2QFY14 performance: Highlights

Sun Pharma, Dr Reddy's, Glenmark and Cadila to record strong operational
performance
We expect Sun Pharma, Dr Reddy's, Glenmark and Cadila to record strong EBITDA
growth for 2QFY14. We attribute the following company-specific reasons for this
performance:
1. Sun Pharma: We expect Sun Pharma to report 33% growth in 2QFY14, driven by
consolidation of URL and DUSA Pharma, and strong growth in US base business
and RoW markets. We believe that Taro's declining profitability will be offset by
faster than expected turnaround at URL and DUSA Pharma.
2. Dr Reddy's: We expect Dr Reddy's to report strong growth of 24% in core EBITDA.
This will be driven by a robust 43% growth in US base business, in turn aided by
increasing market share in recent product launches like gDacogen and gReclast.
Russia is also expected to report strong growth. Consequently, we expect core
EBITDA margin to expand 60bp YoY to 23%.
3. Glenmark: Glenmark's performance would be driven by 24.5% YoY revenue growth,
led by US generics and growth in SRM branded formulations. EBITDA growth of
27% would be faster than revenue growth primarily due to improving sales mix
and increasing contribution from recent launches in the US generic market.
4. Cadila: Cadila Healthcare is likely to report EBITDA growth of 29% on the back of an
abnormally low base. In 2QFY13, the company had reported its lowest gross margin
since 2QFY06, impacted by ANVISA strike in Brazil, flat growth in US, while fixed
overheads impacted operational performance. We estimate EBITDA margin at
17.2% v/s 14.9% in 2QFY13.
5. We expect Ranbaxy Labs and Cipla to report subdued operational performance
due to deteriorating profitability in the base business and rising cost pressures.
6. MNCs: We expect GSK Pharma's operating performance to continue to be impacted
by supply chain related issues, which we believe will take time to normalize.
Sanofi India could witness decline in EBITDA margin, mainly due to high base
effect.
Expect no fireworks from CRAMS companies
Divi's Labs is the only CRAMS company in our universe. We expect Divi's Labs to report
subdued EBITDA growth, impacted by high power costs and fixed overheads at new
SEZ unit.
Sector view
Generics
Emerging markets to help improve profitability gradually from FY14.
New launches imperative for driving growth in core US business.
Differentiation becoming imperative - low competition/patent challenge products,
brands, NCE research will be key differentiators.
Increasing MNC interest in Generics space - may lead to large acquisitions/supply
arrangements with Indian companies.
Top picks: Dr Reddy's, Lupin, Sun Pharma and IPCA Labs.
October 2013
C86
CRAMS (Contract Research & Manufacturing Services)

Favorable macro trends: India on the threshold of significant opportunity, given
the optimum combination of strong chemistry and regulatory skills, and low costs.
Inventory de-stocking impacted performance over 2010-2012; expect healthy
performance in FY14.
Top pick: Divi's Laboratories.
MNC Pharma
Portfolio realignment in favor of lifestyle products to drive growth in medium-tolong term.
Branded generics, patented products and in-licensing to drive long-term growth.
Parent's commitment to listed entity is imperative.
Short-term adverse impact likely from the proposed New Pharma Policy.
Top pick: GlaxoSmithKline Pharmaceuticals.
Key developments
The major development during the quarter was the FDA alert for Ranbaxy.
Ranbaxy Labs' Mohali plant received import alert and fell under consent decree
Ranbaxy Labs (RBXY) received an import alert for its Mohali plant on 13 September
2013. The alert was for two separate locations at Mohali Phase-III Industrial Area
and SEZ Unit-I. Subsequently, the FDA ordered that the facility be subject to certain
terms of consent decree entered by Ranbaxy in January 2012.
The Mohali facility was approved by USFDA, WHO, ANVISA (Brazil) and TGA
(Australia) in CY10. RBXY was supplying only exhibit batches to the US; hence, the
financial impact on current sales is zero. There are 16-18 ANDAs filed from the
Mohali plant awaiting approval. These will be impacted until the FDA issues are
resolved.
We note that this development has occurred despite the company spending almost
five years in resolving quality compliance issues raised by the FDA in 2008. This
could weigh heavily on investor confidence in particular, as these issues come
under the leadership of the new management.
Key launches in US - hits and misses

2QFY14 saw some interesting developments in terms of generic launches in the US.
While Sun Pharma and Dr Reddy's were able to capitalize on key product launches,
Ranbaxy's exclusive copies of generic Diovan and Valcyte continue to be out of sight.
Hits and misses
Hits
Miss
October 2013
Generic
name
Repaglinide
Azacitidine
Valsartan
Valgancyclovir
Brand
equivalent
Prandin
Vidaza
Diovan
Valcyte
US sales
Indication
(USD m)
Competition
Anti-diabetic
200
None
Oncology
380
Sandoz (AG)
Anti-hypertensive
1900
NA
Cytomegalovirus Infections 400
NA
Source: MOSL Research
C87
Hits
Sun Pharma launches generic Prandin in US
Sun Pharma (SUNP) received FDA approval for launching its generic version of
Novo Nordisk's Prandin (Repaglinide 1mg & 2mg tablet). Prandin generates
USD200m in sales annually.
After long-winding patent litigation, Sun Pharma won a favorable ruling in June
2013 from a US court, allowing it to launch its generic copy of Prandin, should it
receive FDA approval for the same. SUNP is the sole FTF filer and will enjoy 180day exclusivity. Other known filers include Mylan, Actavis, Paddock and Aurobindo
Pharma, and will enter the market post SUNP's exclusivity.
We estimate one-off sales of ~USD50m, with PAT of USD35m from this launch, to
be realized during the exclusivity. Since this is a non-recurring opportunity, we
have assigned INR2/share to our DCF estimate for one-off opportunities.
Dr Reddy's monetizes generic Vidaza
Dr Reddy's (DRRD) received final USFDA approval for generic Vidaza (injectable
product) for the US market. The product currently generates annual revenues of
~USD380m for its innovator, Celgene.
All the patents on the product have expired, but there has been no generic entry
till date. DRRD will launch this product in few weeks. There are seven DMF filers
including DRRD, of which we believe 3-4 may enter the market eventually. Our
interactions suggest that it is difficult to manufacture Vidaza and there is a
requirement of PK study at actual MDS points, which can present some challenge.
Hence, the upside from this launch is more sustainable in nature.
Limited competition presents a high margin opportunity in the foreseeable future.
We believe this drug can generate sales of USD25m annually, with PAT of USD15m.
While the addition to EPS was marginal, it reaffirms DRRD's capability to identify
and monetize such opportunities at a time when USFDA has intensified its
vigilance.
Misses
Ranbaxy's generic Diovan still out of sight
While the street was hopeful after dismissal of Mylan's pleas for revoking
Ranbaxy's exclusivity and allowing another generic player in the market, Ranbaxy's
exclusive copy is already late by a year. Despite the recent issuance of import alert
on Mohali, the management continues to maintain that it still holds exclusive
marketing rights for 180 days and is confident of monetizing it.
Diovan generates USD1.9b in sales from the US for Novartis. If successfully
launched, we expect this opportunity to generate one-off sales of ~USD100m for
Ranbaxy over the exclusivity period. We also expect Novartis to introduce an
authorized generic version through its generics unit, Sandoz.
Generic Valcyte also seems to be delayed
Another FTF opportunity for Ranbaxy, generic Valcyte, also seems to be delayed.
The company received tentative approval from USFDA on 24 June 2008, while the
litigation with Roche was still ongoing. Subsequent to a win in lower court, Ranbaxy
settled with Roche to launch the authorized generic (AG) version of Valcyte
sometime in March 2013.
October 2013
C88
Sensex Index
MOSL Healthcare Index
110
Valcyte generates ~USD300m in US sales for Roche. On successful launch, we expect

this opportunity to generate one-off sales of ~USD19m for Ranbaxy over the
exclusivity period. Since Ranbaxy is the AG, it will be the only generic player in the
market.
105
INR depreciation to aid sales, but higher MTM losses to limit benefit for
some
100
Sep-13
Aug-13
Jul-13
Jun-13
95

Sensex Index
MOSL Healthcare Index
135
120
105
In 2QFY14, the average USD/INR rate was ~12.5% lower than in 2QFY13. We expect
companies with largely un-hedged net exports to realize the benefit of favorable
currency at EBITDA level. Companies that are likely to benefit include: (1) Biocon, (2)
Cipla, (3) Divi's Labs, and (4) Dr Reddy's.
At the same time, the QoQ INR depreciation has been ~5%. We expect companies
with large forex debt and derivative exposure to report higher MTM losses, offsetting
the benefit at PAT level. Companies likely to be impacted are: (1) Ranbaxy, (2) IPCA,
(3) Cadila, and (4) Glenmark.
Currency movement (INR/USD)
Sep-13
Jun-13
Mar-13
Dec-12
Sep-12
90
72
67
62
57
52
Sep-13
Aug-13
Jul-13
Jun-13
May-13
Apr-13
Mar-13
Feb-13
Jan-13
Dec-12
Nov-12
Oct-12
Sep-12
Aug-12
Jul-12
47
Source: Bloomberg
CMP (INR)
27.09.13
Healthcare
Biocon
334
Cadila Health
693
Cipla
433
Divis Labs
984
Dr Reddy s Labs
2,411
Glenmark Pharma
523
GSK Pharma
2,414
IPCA Labs.
695
Lupin
853
Ranbaxy Labs
334
Sanofi India
2,558
Sun Pharma
590
Torrent Pharma
439
Sector Aggregate
October 2013
Rating
EPS (INR)
FY13 FY14E FY15E
P/E (x)
FY13 FY14E FY15E
EV/EBITDA (x)
FY13 FY14E FY15E
RoE (%)
FY13 FY14E FY15E
Neutral
Buy
Neutral
Buy
Buy
Buy
Buy
Buy
Buy
Neutral
Neutral
Buy
Buy
16.4
31.9
15.8
45.4
90.2
18.4
80.0
25.7
23.1
13.0
76.7
14.7
27.8
20.4
21.7
27.3
21.7
26.7
28.4
30.2
27.1
36.9
25.7
33.3
40.0
15.8
30.5
10.4
14.5
15.1
15.6
16.9
15.5
23.2
14.8
19.4
7.4
23.4
24.0
10.8
17.4
12.1
23.7
14.1
26.0
20.7
18.1
33.7
23.1
22.5
31.4
14.8
22.5
35.8
19.3
18.8
35.8
20.2
54.8
107.1
25.4
62.5
31.8
31.5
13.0
87.3
21.6
29.8
21.1
41.4
22.6
66.5
127.0
31.9
79.1
51.0
41.9
12.9
105.5
24.7
34.1
17.8
19.3
21.4
18.0
22.5
20.6
38.6
21.9
27.1
25.7
29.3
27.4
14.7
24.3
15.8
16.7
19.2
14.8
19.0
16.4
30.5
13.6
20.3
25.8
24.2
23.9
12.9
20.5
9.6
13.5
13.5
12.9
14.5
13.3
30.9
12.5
15.9
13.8
22.1
17.4
10.1
15.4
8.5
11.5
12.0
10.1
12.3
11.2
23.1
9.4
13.1
7.5
18.1
15.0
8.8
12.6
12.8
22.8
15.6
26.7
20.3
20.5
25.1
23.4
23.8
-4.7
15.6
27.9
30.8
21.1
13.1
22.3
15.0
27.7
19.9
21.1
29.9
30.2
25.4
28.2
17.2
26.4
28.3
20.6
C89
Biocon
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
BIOS IN
200.0
67 / 1
360 / 255
-12 / 17 / 15
CMP: INR334

Y/E March
Sales
EBITDA
Net Profit
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2012 2013 2014E

20.9 24.9 29.3
5.2
5.4
6.2
3.4
3.3
3.8
16.9 16.4 18.8
-7.6
-3.4 14.9
113.6 134.7 146.9
14.9 12.1 12.8
13.0 17.8 13.4
34.3 34.5 35.1
19.6
2.9
11.2
1.5
20.2
2.5
10.3
2.3
17.6
2.3
9.5
1.7
2015E
34.0
7.4
4.2
21.1
12.2
160.6
13.1
13.7
35.1
15.7
2.1
8.4
1.9
Neutral
We expect Biocon's sales to grow 24% YoY to INR7.34b, led by 36%

growth in CRO division. Biopharma division is likely to grow 17% YoY.
We expect licensing income at INR153m (nil in 2QFY13).
EBITDA is likely to grow 32% YoY to INR1.53b and EBITDA margin would
expand by 120bp to 20.9% due to superior sales mix and favorable
currency.
We expect adjusted PAT to grow just 7% YoY to INR959m due to base
effect (high other income on 2QFY13).
Key growth drivers for FY14/15 would be: (1) traction in Insulin initiative
in RoW, (2) ramp-up in CRO division, (3) contribution from immunosuppressant supplies, and (4) branded formulations. However, high
R&D costs and long-term capex would put pressure on near-term
profitability and return ratios.
The stock trades at 17.6x FY14E and 15.7 x FY15E earnings. Option values
for the future include separate listing of Contract Research business
and potential out-licensing of the Oral Insulin NCE by BMS. Return
ratios are likely to remain subdued, with both RoE and RoCE in the 1314% range over FY13-15. Maintain Neutral.

Update on initiatives to out-license Anti-CD6
Progress on product registration for Rh-Insulin in Europe/US
Ramp up in Contract Services business.
Consolidated Quarterly Performance

Y/E March
(INR Million)
FY13
1Q
2Q
Net Sales
5,767
5,924
YoY Change (%)
30.6
16.5
Total Expenditure
4,540
4,759
EBITDA
1,227
1,165
Margins (%)
21.3
19.7
Depreciation
427
446
Interest
32
11
Other Income
159
495
PBT
927
1,203
Tax
137
304
Rate (%)
14.8
25.3
Minority Interest
2
3
PAT
788
896
YoY Change (%)
12.5
4.6
Margins (%)
13.7
15.1
Licensing income
139
0
YoY Change (%)
-0.7
-100.0
Contract research
1,224
1,291
YoY Change (%)
39.1
39.1
E: MOSL Estimates; Note - Quarterly nos will not add
October 2013
3Q
4Q
6,342
6,244
22.6
2.3
4,925
5,199
1,417
1,045
22.3
16.7
461
459
29
9
253
1,639
1,180
2,215
253
281
21.4
12.7
10
23
917
1,911
26.4
73.7
14.5
30.6
88
19
-69.9
-95.9
1,397
1,660
24.7
40.7
up to full-year nos
FY14
1Q
2QE
3QE
6,948
7,338
7,550
20.5
23.9
19.1
5,486
5,804
5,980
1,462
1,534
1,570
21.0
20.9
20.8
483
486
496
4
25
25
284
227
222
1,259
1,250
1,272
297
265
261
23.6
21.2
20.5
27
26
27
935
959
984
18.7
7.1
7.3
13.5
13.1
13.0
76
153
152
-45.3
0.0
0.0
1,546
1,755
1,860
26.3
36.0
33.2
due to restatements
4QE
7,510
20.3
5,902
1,607
21.4
518
46
193
1,236
331
26.8
26
879
-54.0
11.7
226
0.0
1,859
12.0
FY13
FY14E
24,853
19.1
19,423
5,430
21.8
1,793
81
2,546
6,101
975
16.0
38
5,088
50.3
20.5
1,386
0.0
26
0.0
29,346
18.1
23,173
6,174
21.0
1,982
100
926
5,017
1,154
23.0
106
3,757
-26.2
12.8
900
-35.1
659
2,469.0
C90
Cadila Healthcare
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
CDH IN
204.7
142 / 2
925 / 631
-4 / -11 / -24
CMP: INR693

Y/E March
Sales
EBITDA
Net Profit
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2012 2013 2014E

52.6 63.6 71.2
10.8 11.3 12.4
5.7
6.5
7.3
27.6 31.9 35.8
-10.6 15.5 12.2
125.7 143.8 170.0
27.5 23.7 22.8
22.9 17.9 17.6
27.1 30.5 25.3
25.1
5.5
14.6
0.9
21.7
4.8
14.5
1.0
2015E
81.3
14.4
8.5
41.4
15.6
200.6
22.3
18.6
24.8
19.3
4.1
13.5
1.3
16.7
3.5
11.5
1.6
Buy
We expect Cadila Healthcare's (CDH) 2QFY14 revenues to grow 12%

YoY to INR17.3b, led by 21% YoY growth in US formulations. Total export
formulations would grow 20% YoY to INR8.55b. Domestic formulations
would grow 3% YoY to INR6.2b, impacted by the New Drug Policy.
We expect EBITDA to grow 29% YoY to INR2.97b on a low base. The
company had witnessed de-growth in Brazil while fixed overheads
impacted operational performance in 2QFY13.
Adjusted PAT is expected to grow 75% YoY to INR1.66b, aided by lower
taxes and lower forex losses compared to 2QFY13.
While FY14 continues to be a year of consolidation for CDH, we believe
pressure on margins would start easing, as new drug approvals start
coming through for key markets.
We believe CDH has made investments in the right areas and will
unlock value at the appropriate time. We expect FY15 to be a year of
recovery for CDH.
We estimate 14% EPS CAGR for FY13-15, with stable RoCE/RoE at ~18%/
~24% over the next two years.
The stock trades at 19.3x FY14E and 16.7x FY15E EPS. Maintain Buy.

Update on US launches from the Moraiya facility
Progress on improvement in balance sheet.
(INR Million)
Y/E March
Net Revenues
YoY Change (%)
Total Expenditure
EBITDA
Margins (%)
Depreciation
Interest
Other Income
PBT after EO Income
Tax
Rate (%)
Min. Int/Adj on Consol
Reported PAT
Adj PAT
YoY Change (%)
Margins (%)
Adj PAT incl one-offs
Domestic formulation sales
YoY Change (%)
E: MOSL Estimates
October 2013
FY13
1Q
15,486
24.3
12,370
3,116
20.1
434
572
553
2,663
654
24.5
61
1,948
1,948
39.4
12.6
1,948
5,818
27.2
2Q
15,476
24.3
13,171
2,306
14.9
432
405
65
1,533
494
32.2
88
951
951
-5.7
6.1
951
6,018
28.0
3Q
16,041
16.0
13,491
2,550
15.9
496
479
171
1,746
630
36.1
86
1,029
1,029
-29.9
6.4
1,029
5,699
21.4
FY14
4Q
16,119
15.3
13,255
2,864
17.8
466
316
87
2,170
-583
-26.9
128
2,625
2,625
47.0
16.3
2,625
5,708
14.4
1Q
16,371
5.7
13,513
2,858
17.5
466
278
125
2,239
203
9.1
80
1,956
1,956
0.4
11.9
1,956
6,252
7.5
2QE
17,326
11.9
14,353
2,973
17.2
480
387
100
2,206
441
20.0
100
1,665
1,665
75.1
9.6
1,665
6,199
3.0
3QE
18,451
15.0
15,265
3,186
17.3
500
387
100
2,399
480
20.0
100
1,819
1,819
76.8
9.9
1,819
6,269
10.0
4QE
19,015
18.0
15,627
3,388
17.8
520
387
90
2,571
527
20.5
150
1,894
1,894
-27.8
10.0
1,894
6,279
10.0
FY13
FY14E
63,581
20.8
52,324
11,257
17.7
1,828
1,686
370
8,112
1,195
14.7
364
6,553
6,553
15.8
10.3
6,553
23,232
22.6
71,162
11.9
58,757
12,405
17.4
1,966
1,439
415
9,415
1,651
17.5
430
7,334
7,334
11.9
10.3
7,334
24,916
7.3
C91
Cipla
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
CIPLA IN
802.9
348 / 6
450 / 353
-1 / 9 / 10
CMP: INR433

Y/E March
Sales
EBITDA
Net Profit
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2012 2013 2014E

70.2 82.8 106.1
16.6 22.0 24.7
10.9 12.7 16.3
13.6 15.8 20.2
13.9 16.4 27.8
95.0 112.2 130.1
14.3 14.1 15.6
18.0 19.4 19.2
14.3 12.1 17.3
2015E
121.9
27.3
18.2
22.6
11.7
150.4
15.0
18.9
20.7
32.1
4.6
21.1
0.4
27.6
3.9
16.3
0.5
21.6
3.4
14.6
0.7
19.3
2.9
13.1
0.9
Neutral
Cipla's core revenue for 2QFY14 is likely to grow 23% YoY to INR27b.
Growth in core sales (adjusted for Lexapro in 2QFY13) will be 31%.
The domestic formulations business is expected to grow 10% YoY to
INR10.3b due to the impact of the pricing policy. Export formulations
sales would grow 38% YoY to INR14.3b due to consolidation of Cipla
Medpro.
EBITDA is likely to decline 8% YoY to INR6.2b, with EBITDA margin
expected to contract to 23.1% on account of higher employee and
R&D costs. Core EBITDA growth would be 7%.
We expect adjusted PAT to decline 7% YoY to INR4.1b, on account of
higher interest costs and lower other income.
The coming quarters will be challenging for Cipla due to the impact of
the new pricing policy and increasing pressure on profitability due to
rising manpower, R&D and interest costs.
This is also evident in the 14-15% organic growth guidance for FY14,
despite 26% growth in 1Q alone. As such, we expect some moderation
in growth and profitability over the coming quarters.
Stock trades at 21.6x FY14E and 19.3x FY15E earnings. Maintain Neutral.

Update on launch of inhalers in Europe
Impact of Cipla Medpro consolidation.
(INR Million)
Y/E March
Net Revenues
YoY Change (%)
Total Expenditure
EBITDA
Margins (%)
Depreciation
Interest
Other Income
Profit before Tax
Tax
Rate (%)
Reported PAT
Adj PAT
YoY Change (%)
Margins (%)
Domestic formulation sales
YoY Change (%)
Other operating income
YoY Change (%)
E: MOSL Estimates
October 2013
FY13
1Q
19,581
23.0
14,184
5,397
27.6
729
11
531
5,188
1,182
22.8
4,006
3,055
20.6
15.6
9,388
30.4
408
-0.7
2Q
21,918
23.3
15,149
6,770
30.9
740
54
641
6,618
1,618
24.4
5,000
4,392
42.1
20.0
9,332
13.7
460
-0.5
3Q
20,705
17.8
15,775
4,930
23.8
780
93
535
4,592
1,203
26.2
3,389
3,389
25.6
16.4
9,241
9.3
398
-14.5
FY14
4Q
19,667
5.4
15,572
4,095
20.8
783
176
585
3,720
1,045
28.1
2,676
2,676
-1.9
13.6
7,780
8.3
605
21.4
1Q
24,639
25.8
17,885
6,754
27.4
789
408
691
6,249
1,500
24.0
4,749
4,749
55.5
19.3
11,039
17.6
1,792
339.1
2QE
27,040
23.4
20,794
6,245
23.1
850
300
450
5,545
1,442
26.0
4,103
4,103
-6.6
15.2
10,303
10.4
550
19.6
3QE
27,767
34.1
21,672
6,095
22.0
900
250
420
5,365
1,341
25.0
4,024
4,024
18.7
14.5
10,266
11.1
575
44.5
4QE
26,691
35.7
21,055
5,636
21.1
1,177
180
239
4,517
1,136
25.2
3,381
3,381
26.4
12.7
8,951
15.0
701
16.0
FY13
FY14E
82,793
97.0
60,815
21,979
26.5
3,305
276
1,323
19,721
5,443
27.6
15,449
12,719
13.0
15.4
35,892
15.6
1,871
8.1
106,136
102.8
81,407
24,730
23.3
3,716
1,138
1,800
21,676
5,419
25.0
16,257
16,257
27.8
15.3
40,560
13.0
3,618
93.4
C92
Divi's Laboratories
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
DIVI IN
132.7
131 / 2
1,233 / 905
-4 / -5 / -14
CMP: INR984
Divi's Laboratories (DIVI) is likely to post 16% YoY growth in 2QFY14

revenue to INR5.49b largely on account of and favorable currency
movement. Growth would be driven by both CCS and API businesses.
We expect EBITDA to grow 14% YoY to INR2.1b, impacted by higher

material and employee cost. EBITDA margin would contract 70bp YoY.
We expect PAT to grow 33% YoY to INR1.56b, mainly due to higher

other income. There was a forex loss of INR208m in 2QFY13.
For FY14, DIVI expects sales growth to be in line with FY13 (i.e. 15%),
as capacity utilization would ramp up significantly only after FDA
approval of the remaining three blocks at the DSN SEZ (expected in
2HFY14). The new units at Vizag are expected to be inspected by USFDA
in 2HFY14.
While operational performance for 1HFY14 could be subdued, this is

mainly due to delayed FDA inspection for the new SEZ units (now
expected in 2HFY14 instead of 2HFY13 earlier).
The stock trades at 17.8x FY14E and 14.7x FY15E earnings. Maintain
Buy.

Y/E March
Sales
EBITDA
Net Profit
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2012 2013 2014E

18.6 21.4 24.7
6.8
8.1
9.6
5.3
6.0
7.3
40.2 45.4 54.8
24.1 12.9 20.8
160.6 188.4 221.3
27.1 26.0 26.7
34.1 33.1 34.9
37.6 38.7 40.0
24.3
6.1
19.0
1.3
21.5
5.2
16.0
1.5
2015E
30.2
11.9
8.8
66.5
21.3
257.8
27.7
35.7
45.0
17.8
4.4
13.5
1.9
14.7
3.8
10.8
2.6
Buy

Ramp-up at Vizag SEZ and timeline for USFDA inspection
Impact of subsiding power cost (in Andhra Pradesh) on profitability.
(INR Million)
Y/E March
Net Op Revenue
YoY Change (%)
Total Expenditure
EBITDA
Margins (%)
Depreciation
Interest
Other Income
PBT
Tax
Rate (%)
Reported PAT
Adj PAT
YoY Change (%)
Margins (%)
CCS Revenues
YoY Change (%)
Carotenoid Revenues
YoY Change (%)
E: MOSL Estimates;
October 2013
FY13
1Q
4,684
30.6
2,780
1,904
40.7
175
4
418
2,143
469
21.9
1,674
1,674
63.2
35.7
2,148
22.2
210
50.0
2Q
4,726
33.5
2,880
1,846
39.1
188
3
-112
1,544
364
23.6
1,180
1,180
11.2
25.0
2,268
37.5
250
4.2
3Q
5,333
28.6
3,521
1,813
34.0
204
4
234
1,838
396
21.5
1,442
1,442
17.7
27.0
2,507
36.9
185
-7.5
FY14
4Q
6,496
-8.2
3,989
2,507
38.6
203
6
93
2,391
573
23.9
1,818
1,818
-15.3
28.0
3,118
-15.3
265
15.2
1Q
5,159
10.1
3,200
1,959
38.0
209
4
547
2,293
546
23.8
1,747
1,747
4.4
33.9
2,476
15.3
280
33.3
2QE
5,494
16.2
3,385
2,109
38.4
215
7
147
2,034
468
23.0
1,566
1,566
32.7
28.5
2,637
16.2
325
30.0
3QE
6,173
15.7
3,765
2,408
39.0
230
8
149
2,319
557
24.0
1,763
1,763
22.2
28.6
2,901
15.7
241
30.0
4QE
7,866
21.1
4,786
3,080
39.2
303
8
152
2,920
725
24.8
2,194
2,194
20.7
27.9
3,695
18.5
488
84.0
FY13
FY14E
21,399
15.1
13,297
8,102
37.9
769
18
497
7,812
1,792
22.9
6,020
6,020
12.9
28.1
10,272
15.1
910
12.3
24,692
15.4
15,136
9,556
38.7
958
27
995
9,566
2,296
24.0
7,270
7,270
20.8
29.4
11,710
14.0
1,333
46.5
C93
Dr Reddy's Laboratories
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
DRRD IN
167.9
405 / 6
2,472 / 1,617
2 / 32 / 42
CMP: INR2,411
We expect Dr Reddy's Laboratories (DRRD) to post 17% YoY growth in

revenue (no one-off this quarter) for 2QFY14 to INR33.61b. Growth in
core sales will be 21% YoY.
Growth would be led by 43% YoY growth in core US revenue and 24%
YoY growth in the Russia/CIS. Domestic formulations would grow 4%
YoY, while PSAI would grow 9% YoY. Reported sales growth, adjusted
for Geodon contribution in 2QFY13, would be 17%.
Core EBITDA would grow 24% YoY to INR7.73b, driven by improving

product mix in the US business and strong growth in Russia. We expect
core EBITDA margin to expand by 60bp YoY. EBITDA growth on reported
basis would be 12% YoY.
Adjusted PAT would be INR4.86b, up 39% YoY - higher than the growth
in EBITDA due to lower amortization and tax expense. We expect
reported PAT (incl. one-off contributions) to grow 19% YoY.
While there is uncertainty revolving around timely FDA approvals,

recently launched limited competition products like gDacogen,
gReclast injections and pipeline of 65 pending ANDAs will support
growth in the US over the medium term.
The stock trades at 22.5x FY14E and 19x FY15E core earnings. Buy.

Y/E March
Sales
EBITDA
Net Profit
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2012 2013 2014E

96.7 116.3 136.0
23.7 24.8 28.8
12.4 15.1 18.0
74.0 90.2 107.1
12.0 21.9 18.7
342.1 435.4 528.2
21.6 20.7 20.3
19.7 17.2 18.0
18.2 16.3 14.9
32.6
7.0
17.6
0.6
26.7
5.5
16.9
0.6
22.5
4.6
14.5
0.6
2015E
151.0
33.2
21.3
127.0
18.6
638.9
19.9
18.4
12.8
19.0
3.8
12.3
0.6
Buy

View on pipeline for products in the US
FY14-15 outlook for both generics and PSAI businesses.
Quarterly Performance - IFRS
FY13
1Q
2Q
3Q
4Q
Gross Sales
25,406
28,809
28,651
33,400
YoY Change (%)
28.4
27.0
3.5
25.6
Total Expenditure
20,410
21,900
22,977
26,215
EBITDA
4,996
6,909
5,674
7,185
Margins (%)
19.7
24.0
19.8
21.5
Amortization
1,296
2,064
1,382
1,495
Other Income
25
796
168
2,162
Profit before Tax
3,725
5,641
4,460
7,852
Tax
365
1,567
827
2,141
Rate (%)
9.8
27.8
18.5
27.3
Net Profit
3,360
4,074
3,633
5,711
One-off/low-competition PAT in US 715
586
0
325
Adjusted PAT
2,645
3,488
3,633
5,386
YoY Change (%)
17.5
29.9
71.4
101.5
Margins (%)
10.4
12.1
12.7
16.1
US Sales
7,920
9,270
9,243
11,413
YoY Change (%)
37.6
47.4
-16.8
30.7
Branded formualtion sales
8,968
9,056
9,654
9,323
YoY Change (%)
32.8
17.1
24.6
18.5
E: MOSL Estimates; Note-Estimates do not include one-off upsides.
(INR Million)
Y/E March
October 2013
FY14
1Q
28,449
12.0
23,051
5,398
19.0
1,603
342
4,137
528
12.8
3,609
335
3,273
23.8
11.5
10,871
37.3
9,459
5.5
2QE
33,615
16.7
25,884
7,732
23.0
1,653
273
6,351
1,493
23.5
4,859
0
4,859
39.3
14.5
11,875
28.1
10,372
14.5
3QE
34,914
21.9
27,478
7,437
21.3
1,703
273
6,006
1,412
23.5
4,595
0
4,595
26.5
13.2
12,710
37.5
11,382
17.9
4QE
39,018
16.8
30,824
8,194
21.0
1,753
409
6,849
1,596
23.3
5,254
0
5,254
-2.5
13.5
13,950
22.2
11,027
18.3
FY13
FY14E
116,266
20.2
91,503
24,763
21.3
6,237
3,151
21,676
4,900
22.6
16,777
1,627
15,150
55.7
13.0
37,846
18.7
37,001
22.9
135,997
17.0
107,237
28,760
21.1
6,712
1,296
23,344
5,028
21.5
18,316
335
17,981
18.7
13.2
49,406
30.5
42,239
14.2
C94
GlaxoSmithKline Pharmaceuticals
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
GLXO IN
84.7
204 / 3
2,899 / 1,931
-3 / 6 / 17
CMP: INR2,414
We expect GlaxoSmithKline Pharmaceuticals (GLXO) to post 6% YoY

growth in 3QCY13 sales to INR7.05b.
EBITDA is likely to decline by 22% YoY to INR1.55b. EBITDA margin is

expected to decline 7.9% to 21.9%, which we believe will be impacted
by supply chain related issues highlighted in 1QCY13.
We expect adjusted PAT to decline 20% YoY to INR1.31b in 3QCY13, in

line with EBITDA decline, due to subdued operational performance.
Performance for 1QCY13 was impacted by supply chain related issues,

some of which were expected to get resolved by 3QCY13. While some
of these factors are temporary in nature, we believe the normalization
in margins will be gradual.
GLXO deserves premium valuations due to strong parentage (giving

access to large product pipeline), brand-building ability and likely
positioning in post patent era. It is one of the few companies with the
ability to drive reasonable growth without any major capital
requirement, leading to high RoCE of 45-50%.
The stock trades at 38.7x CY13E and 30.6x CY14E EPS. Maintain Buy.

Y/E December
Sales
EBITDA
Net Profit
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2011 2012 2013E

23.4 26.0 26.8
7.4
7.9
6.0
6.3
6.8
5.3
74.5 80.0 62.5
8.6
7.3 -21.8
226.7 237.3 249.3
32.9 33.7 25.1
47.9 49.4 36.9
68.8 71.3 82.1
32.5
10.7
24.6
1.9
30.3
10.2
23.3
2.1
38.7
9.7
30.9
1.9
2014E
29.2
8.0
6.7
79.1
26.5
264.8
29.9
44.5
79.3
Buy
30.6
9.1
23.1
2.3

Impact of normalization of supply chain issues
Impact of Drug Price Control Order (DPCO), 2013
Update on new launches.
(INR Million)
Y/E December
Net Sales
YoY Change (%)
Total Expenditure
EBITDA
Margins (%)
Depreciation
Interest
Other Income
PBT before EO Expense
Tax
Rate (%)
Adjusted PAT
YoY Change (%)
Margins (%)
Extra-Ord Expense
Reported PAT
E: MOSL Estimates
October 2013
CY12
1Q
6,228
3.3
4,271
1,957
31.4
41
0
804
2,720
863
31.7
1,857
-0.3
29.8
628
1,229
2Q
6,520
16.1
4,492
2,028
31.1
43
0
479
2,464
768
31.2
1,696
11.8
26.0
61
1,635
3Q
6,685
10.0
4,696
1,989
29.8
48
0
479
2,419
783
32.4
1,636
12.1
24.5
113
1,523
4Q
6,567
16.0
4,653
1,914
29.1
46
3
477
2,341
762
32.5
1,579
7.2
24.1
198
1,382
1Q
6,321
1.5
4,693
1,629
25.8
42
0
817
2,404
698
29.1
1,706
-8.1
27.0
16
1,690
CY13
2Q
3QE
6,369
7,054
-2.3
5.5
5,232
5,508
1,137
1,546
17.9
21.9
50
50
0
0
454
434
1,541
1,930
590
623
38.3
32.3
951
1,308
-44.0
-20.1
14.9
18.5
-201
-185
1,151
1,493
4QE
6,993
6.5
5,376
1,617
23.1
53
0
315
1,879
605
32.2
1,274
-19.3
18.2
-185
1,459
CY12
CY13E
25,999
11.2
18,112
7,888
30.3
178
3
2,239
9,944
3,176
31.9
6,769
7.2
26.0
999
5,769
26,796
3.1
20,809
5,987
22.3
194
0
2,020
7,812
2,516
32.2
5,297
-21.7
19.8
371
4,925
C95
Glenmark Pharmaceuticals
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
GNP IN
270.9
142 / 2
612 / 387
-12 / 8 / 18
CMP: INR523
We expect Glenmark Pharmaceuticals (GNP) to post 24.5% YoY growth

in core revenue (excluding one-offs and R&D income) for 2QFY14 to
INR15.19b. Growth on reported basis would be 21% YoY.
Growth would be led by strong performance in branded SRM and US

generics. The branded business is likely to grow 19% YoY. We do not
expect any R&D licensing income for the quarter (nil in 2QFY13).
Core EBITDA is likely to grow 27% YoY to INR3b, while core EBITDA
margin is expected to increase by 30bp YoY. Repored EBITDA would
grow 17% YoY.
GNP is likely to report adjusted PAT of INR1.8b, up 26% YoY, in line with
operational performance. There was forex gain of INR150m in 2QFY13.
We do not expect any significant impact in 2QFY14, as GNP has
transferred its forex loans to its subsidiaries.
We expect GNP to gradually reduce its net debt over FY14-15, resulting
in improvement in D/E from 1x in FY13 to 0.6x by FY15.
RoCE is likely to improve from 16% in FY13 to 21% in FY15 and RoE from
18% to 22%.

Y/E March
Sales
EBITDA
Net Profit
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2012 2013 2014E

40.2 50.1 60.1
9.9 10.6 12.0
3.2
5.0
6.9
12.0 18.4 25.4
-8.6 53.9 37.6
88.8 102.0 123.9
13.5 18.1 20.5
11.4 16.1 18.5
13.6 10.2 13.3
43.6
5.9
16.4
0.4
28.3
5.1
15.5
0.4
20.6
4.2
13.3
0.6
2015E
70.2
14.1
8.6
31.9
25.8
151.1
21.1
19.9
14.5
16.4
3.5
11.2
0.8
Buy

Approvals for US
Update on free cash flow generation and debt repayment schedule
Timeline for reporting clinical data for NCE pipeline.
Quarterly performance
Y/E March
(INR Million)
FY13
FY14
1Q
2Q
3Q
4Q
1Q
2QE
Net Revenues (Core)
10,404
12,552
13,813
13,355
12,379
15,192
YoY Change (%)
19.8
18.9
34.0
25.3
19.0
21.0
EBITDA
2,198
2,560
3,158
2,694
2,474
3,000
Margins (%)
21.1
20.4
22.9
20.2
20.0
19.7
Depreciation
275
321
356
318
349
336
Interest
380
384
400
436
464
479
Other Income
-521
219
95
-196
37
41
PBT
1,022
2,074
2,497
1,744
1,698
2,226
Tax
218
477
366
46
392
401
Rate (%)
21.3
23.0
14.7
2.6
23.1
18.0
Reported PAT (incl one-offs)
804
1,597
2,130
1,698
1,306
1,825
Minority Interest
21
30
1
30
19
25
Adj PAT (excl one-offs)
506
1,424
1,575
1,486
1,287
1,800
YoY Change (%)
-53.6
91.3 1,972.1
565.9
154.1
26.4
Margins (%)
4.9
11.3
11.4
11.1
10.4
11.9
US Sales
3,924
4,307
4,365
4,291
4,470
5,305
YoY Change (%)
56.2
43.5
36.8
24.9
13.9
23.2
Note: 2Q, 3Q, 4Q numbers are not comparable due to shift to IFRS accounting. 1Q numbers
Estimates include one-off upsides.
October 2013
3QE
4QE
15,887
16,637
15.0
24.6
3,118
3,425
19.6
20.6
353
346
489
563
43
47
2,319
2,564
371
509
16.0
19.9
1,948
2,055
26
31
1,882
1,902
19.5
27.9
11.8
11.4
5,411
6,034
24.0
40.6
are comparable as
FY13
FY14E
50,123
60,095
24.7
19.9
10,610
12,018
21.2
20.0
1,270
1,384
1,600
1,995
-403
168
7,337
8,807
1,107
1,673
15.1
19.0
6,230
7,134
83
100
4,992
6,871
53.9
37.6
10.0
11.4
16,887
21,219
39.1
25.6
per IFRS;
C96
IPCA Laboratories
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
IPCA IN
126.2
88 / 1
730 / 401
1 / 27 / 40

Y/E March
Sales
EBITDA
Net Profit
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2012 2013 2014E

23.6 28.1 33.2
5.1
6.2
7.5
2.8
3.2
4.0
21.9 25.7 31.8
4.7 17.4 23.6
99.4 123.1 148.5
24.0 23.1 23.4
24.1 25.2 24.9
17.0 18.1 20.0
31.8
7.0
18.1
0.5
27.1
5.7
14.8
0.7
21.9
4.7
12.5
0.9
2015E
41.1
9.8
6.4
51.0
60.6
189.3
30.2
32.8
20.0
13.6
3.7
9.4
1.5
CMP: INR695
Buy
We expect Ipca Laboratories' (IPCA) 2QFY14 revenue to grow 18% YoY

to INR9.1b, led mainly by 29% growth in export formulations. Domestic
formulations would grow 9% YoY, while total API sales would grow
13% YoY.
EBITDA is likely to grow 17% YoY to INR2.1b, with a minor 10bp decline
in EBITDA margin to 23.1%.
Despite healthy operational performance, we expect adjusted PAT to

decline 20% YoY to INR1b, impacted by higher INR depreciation and
MTM loss on forex loans.
We expect significant ramp-up in IPCA's international formulations

revenue, led by 30% CAGR in export formulations and 70% CAGR in US
business over FY13-15. Domestic formulations growth is likely to be
maintained at 15%.
We expect IPCA to clock EPS CAGR of 40% over FY13-15 on the back of
21% revenue CAGR, aided by 170bp EBITDA margin expansion.

Ramp-up at recently approved Indore SEZ for US
Outlook for institutional tender business after FY14.
(INR Million)
Y/E March
Net Revenues (Core)
YoY Change (%)
EBITDA
Margins (%)
Depreciation
Interest
Other Income
PBT
Tax
Rate (%)
Reported PAT
Adj PAT
YoY Change (%)
Margins (%)
Domestic formulation
YoY Change (%)
Export formualtions
YoY Change (%)
E: MOSL Estimates
October 2013
FY13
1Q
6,344
19.7
1,329
21.0
199
95
-470
565
135
23.9
430
430
-30.3
6.8
2,242
18.6
2,245
8.7
2Q
7,713
23.7
1,788
23.2
209
89
155
1,646
395
24.0
1,251
1,251
60.5
16.2
2,628
14.6
3,392
30.2
3Q
7,010
14.0
1,584
22.6
216
74
-146
1,148
269
23.4
879
879
37.5
12.5
2,127
13.4
3,175
9.5
FY14
4Q
6,717
19.7
1,423
21.2
216
55
103
1,255
501
39.9
754
754
-1.5
11.2
1,784
20.8
3,131
30.8
1Q
8,056
27.0
1,710
21.2
241
71
-435
963
245
25.4
718
718
67.0
8.9
2,504
11.7
3,300
47.0
2QE
9,097
17.9
2,097
23.1
244
91
-446
1,316
312
23.8
1,003
1,003
-19.8
11.0
2,853
8.6
4,359
28.5
3QE
8,171
16.6
1,844
22.6
249
82
51
1,564
391
25.0
1,173
1,173
33.4
14.4
2,553
20.0
3,758
18.4
4QE
7,880
17.3
1,831
23.2
304
112
19
1,434
318
22.2
1,116
1,116
47.9
14.2
2,101
17.8
3,615
15.5
FY13
FY14E
28,131
19.3
6,232
22.2
867
334
-488
4,543
1,299
28.6
3,243
3,243
17.4
11.5
8,781
16.6
11,942
19.9
33,203
18.0
7,482
22.5
1,038
356
-812
5,276
1,266
24.0
4,009
4,009
23.6
12.1
10,010
14.0
15,031
25.9
C97
Lupin
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
LPC IN
447.5
382 / 6
908 / 540
3 / 31 / 37

Y/E March
Sales
EBITDA
Net Profit
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
PP/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
CMP: INR853
2012 2013 2014E

68.2 93.7 112.6
11.8 20.0 24.2
7.9 10.3 14.1
17.7 23.1 31.5
-8.8 30.4 36.3
89.9 116.3 148.0
21.7 22.5 23.8
24.6 33.3 33.5
20.0 15.6 18.4
2015E
128.6
28.9
18.8
41.9
33.1
182.9
25.4
33.1
21.9
48.1
9.5
33.3
0.4
36.9
7.3
19.4
0.5
27.1
5.8
15.9
0.7
20.3
4.7
13.1
0.9
Buy
We expect Lupin's (LPC) 2QFY14 core revenues to grow 22% YoY to

INR27.04b, driven mainly by 29% YoY growth in advance market
formulations (excluding one-off US sales). Domestic formulations are
expected to grow 13% YoY.
Reported revenue would include one-off upside from generic Tricor
and is expected at INR28.17b, up 26% YoY.
Core EBITDA is likely to grow 17% YoY to INR5.12b, with core EBITDA
margin declining 80bp YoY to 18.9% impacted by increased competition
in Antara and generic Tricor. Reported EBITDA is expected to be
INR5.92b, with reported EBITDA margin at 21%.
We estimate adjusted PAT at INR3.17b, up 15% YoY, impacted mainly
by lower other income. Reported PAT would be INR3.9b, up 32% YoY.
Key growth drivers for FY14/15 will be the strong product pipeline for
the US, including higher contribution from oral contraceptives.
While India formulations would see a slowdown in FY14, impacted by
the New Pricing Policy, we expect growth to rebound to historical
levels of 18-20% in FY15.

Outlook on future launches in the US
Revival in constant currency sales growth in I'rom.
Y/E March
Net Sales
YoY Change (%)
Total Expenditure
EBITDA
Margins (%)
Depreciation
Interest
Other Income
PBT
Tax
Rate (%)
Reported PAT
EO Exp/(Inc)
Minority Interest
Recurring PAT
YoY Change (%)
Margins (%)
Advanced mkt formulations
YoY Change (%)
Emerging mkt formulations
YoY Change (%)
E: MOSL Estimates; Quarterly nos
October 2013
(INR Million)
FY13
1Q
2Q
22,192
22,393
43.8
28.6
17,961
17,848
4,230
4,545
19.1
20.3
654
690
101
101
582
657
4,058
4,412
1,208
1,438
29.8
32.6
2,850
2,974
0
0
46
69
1,783
2,753
-15.1
3.2
8.0
12.3
11,826
11,745
68.6
34.6
8,049
8,256
27.4
23.0
will not add up to
FY14
3Q
4Q
1Q
2QE
3QE
4QE
24,659
25,374
24,207
28,174
29,972
30,230
37.6
34.7
9.1
25.8
21.5
19.1
18,961
19,271
18,867
22,257
23,498
23,730
5,698
6,103
5,340
5,917
6,474
6,499
23.1
24.1
22.1
21.0
21.6
21.5
688
1,290
624
650
700
750
77
133
54
54
54
54
617
547
565
390
390
390
5,550
5,227
5,226
5,603
6,110
6,085
2,116
1,080
2,172
1,681
1,527
1,527
38.1
20.7
41.6
30.0
25.0
25.1
3,434
4,148
4,055
3,922
4,582
4,558
0
0
-1,000
0
0
0
82
66
44
75
85
96
2,812
3,000
3,331
3,168
3,818
3,783
12.5
262.1
86.8
15.0
35.8
26.1
11.4
11.8
13.8
11.2
12.7
12.5
14,646
14,875
13,917
15,909
18,081
17,694
57.5
37.2
17.7
35.5
23.5
19.0
7,660
8,063
7,861
9,754
9,420
9,978
15.4
35.0
-2.3
18.1
23.0
23.7
full year nos due to restatement of past quarters
FY13
FY14E
94,617
37.9
74,041
20,576
21.7
3,322
410
2,403
19,247
5,842
30.4
13,405
0
263
10,348
46.7
10.9
53,100
48.0
32,027
24.9
112,582
19.0
88,352
24,230
21.5
2,724
216
1,735
23,024
6,907
30.0
17,117
-1,000
300
14,100
36.3
12.5
63,759
20.1
37,012
15.6
C98
Ranbaxy Laboratories
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
RBXY IN
422.9
141 / 2
560 / 254
-22 / -29 / -43

Y/E December
2011 2012 2013E
Sales
102.3 124.6 115.8
EBITDA
17.0 19.4 13.5
Net Profit
6.0
5.5
5.5
Rep. EPS (INR)
30.2
-4.3
Adj. EPS (INR)
14.1 13.0 13.0
EPS Gr. (%)
25.9
-7.7
0.0
BV/Sh. (INR)
67.8 96.4 89.8
RoE (%)
31.4
-4.7
RoCE (%)
20.9 21.0 12.6
Payout (%)
-3.4
0.0 -62.0
Valuations
P/E (x)
20.3 22.0 22.0
P/BV (x)
4.9
3.0
3.2
EV/EBITDA (x)
0.0
7.4 13.8
Div. Yield (%)
0.0
0.0
0.7
CMP: INR334
2014E
135.1
23.2
5.5
33.0
12.9
-0.4
116.9
28.2
19.7
17.7
22.1
2.4
7.5
1.7
Neutral
We expect Ranbaxy Laboratories (RBXY) to post 26% YoY growth in

core sales for 3QCY13 to INR29.91b, driven by strong 80% growth in
core US sales over a low base of 3QCY12. Reported sales is expected to
grow 11% YoY.
Core EBITDA is likely to grow just 4% YoY to INR3.03b, mainly due to
deteriorating profitability in the base business and higher R&D and
remediation costs related to USFDA. Core EBITDA margin would shrink
220bp YoY to 10.1%.
We expect adjusted PAT to decline 19% YoY to INR1.66b mainly due to
lower other income and higher interest costs.
RBXY had reported a forex gain of INR1.24b above EBITDA in 3QCY12,
against which we expect forex loss of INR1.58b in 3QCY13.
There was also a forex gain of INR3.93b in extraordinary expenses,
against which we expect a loss of INR2.6b in 3QCY13.
We believe the outlook for RBXY remains challenging, as quality /
compliance issues have impacted its operations and will weigh on
investor confidence. It is imperative for the company to improve core
business margins, as one-offs have started waning off.
The stock trades at 22x FY14E and 22.1x FY15E EPS. Maintain Neutral.

Timeline for resolving USFDA issues under the consent decree
Improvement in core EBITDA margin.
Y/E December
(INR Million)
CY12
1Q
2Q
3Q
4Q
Net Income
37,868
32,284
26,910
27,112
YoY Change (%)
73.6
54.2
28.4
-28.5
EBITDA
9,552
5,113
3,495
811
Margins (%)
25.2
15.8
13.0
3.0
Depreciation
798
783
816
805
Interest
377
484
389
537
Other Income
1,556
-2,972
1,889
-334
9,933
874
4,178
-865
Extra-Ord Expense
-4,050
5,993
-3,933
3,657
PBT after EO Expense
13,983
-5,119
8,112
-4,522
Tax
1,374
683
542
340
Rate (%)
9.8
-13.3
6.7
-7.5
Reported PAT
12,609
-5,802
7,570
-4,862
Minority Interest
138
56
29
59
Reported PAT (incl one-offs)
12,468
-5,857
7,542
-4,924
Adj PAT (excl. one-offs)
2,039
1,447
2,055
-45
YoY Change (%)
18.3
37.1
26.9
-102.9
Margins (%)
5.4
4.5
7.6
-0.2
US Sales (USD m)
399
254
155
136
YoY Change (%)
156.7
167.4
84.2
-64.8
India formulation sales
4,922
5,541
5,829
5,418
YoY Change (%)
13.0
14.9
13.0
-0.4
E: MOSL Estimates; Estimates include upside from FTF opportunities
October 2013
1Q
25,005
-34.0
1,906
7.6
797
512
254
851
-818
1,669
353
21.1
1,316
59
1,257
904
-55.7
3.6
110
-72.5
5,427
10.3
CY13
2Q
3QE
26,834
29,909
-16.9
11.1
2,625
3,027
9.8
10.1
763
800
488
500
-1,378
-1,228
-3
500
4,863
2,604
-4,866
-2,104
311
110
-6.4
-5.2
-5,177
-2,214
64
40
-5,241
-2,254
1,302
1,663
-10.0
-19.1
4.9
5.6
138
145
-45.8
-6.3
5,426
5,995
-2.1
2.9
4QE
34,046
25.6
5,935
17.4
830
510
604
5,199
-420
5,619
1,144
20.4
4,475
40
4,435
1,627
0.0
4.8
217
58.9
5,743
6.0
CY12
CY13E
124,597
22.6
19,379
15.6
3,202
1,796
340
14,721
2,272
12,449
2,939
23.6
9,510
282
9,228
5,496
-7.7
4.4
946
31.4
22,073
11.6
115,794
-7.1
13,493
11.7
3,187
2,012
-1,747
6,547
6,229
319
1,916
601.1
-1,597
203
-1,800
5,496
0.0
4.7
385
-59.3
24,832
12.5
C99
Sanofi India
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
SANL IN
23.0
59 / 1
2,899 / 2,060
-5 / -6 / 6

Y/E December
Sales
EBITDA
Net Profit
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2011 2012 2013E

12.3 14.9 16.6
1.8
2.3
2.5
1.9
1.8
2.0
83.0 76.7 87.3
23.3
-7.6 13.9
479.7 518.0 559.0
17.3 14.8 15.6
25.3 21.5 23.0
46.0 50.0 53.1
30.8
5.3
32.1
1.3
33.3
4.9
23.4
1.3
29.3
4.6
22.1
1.6
2014E
19.1
2.9
2.4
105.5
20.8
612.3
17.2
25.0
49.5
24.2
4.2
18.1
1.8
CMP: INR2,558
Neutral
We expect Sanofi India's (SANL) revenues to grow 10% YoY in 3QCY13

to INR4.38b, led by the domestic formulations business.
EBITDA is likely to decline 11% YoY to INR716m on a high base of

3QCY12. EBITDA margin would stand at 16.4% v/s 20.3% in 3QCY12.
We expect PAT to grow 13% YoY to INR581m, despite subdued

operational performance, due to lower depreciation (high
amortization charges in 3QCY12) and higher other income.
SANL's profitability has declined significantly in the last six years, with
EBITDA margin declining from 25% in CY06 to 15.6% in CY12, mainly
impacted by discontinuation of Rabipur sales in the domestic market
and acquisition of Universal Healthcare in 2011.
RoE has declined from 28.6% to 14.8% over CY06-12.
We believe the stock price performance is likely to remain muted

until clarity emerges on future growth drivers.
The stock trades at 29.3x FY14E and 24.2x FY15E EPS. Maintain Neutral.

Amortization of goodwill and brands acquired from Universal
Medicare
Impact of Drug Price Control Order (DPCO), 2013.
(INR Million)
Y/E December
Net Sales
YoY Change (%)
Total Expenditure
EBITDA
Margins (%)
Depreciation
Interest
Other Income
PBT
Tax
Effective tax Rate (%)
Reported PAT
Adj PAT
YoY Change (%)
Margins (%)
Domestic sales
YoY Change (%)
E: MOSL Estimates
October 2013
CY12
1Q
3,225
16.7
2,733
492
15.3
183
4
289
594
193
32.5
401
401
-20.8
12.4
2,765
24.5
2Q
3,741
23.5
3,219
522
14.0
186
4
267
599
194
32.4
405
405
-18.5
10.8
3,040
24.6
3Q
3,966
26.8
3,161
805
20.3
307
3
266
761
248
32.6
513
513
-6.4
12.9
3,288
27.7
4Q
4,007
18.6
3,500
507
12.7
223
3
382
663
215
32.4
448
448
24.3
11.2
3,315
18.9
1Q
3,629
12.5
3,161
468
12.9
223
3
414
656
213
32.5
443
443
10.5
12.2
3,169
14.6
CY13
2Q
3QE
4,100
4,380
9.6
10.4
3,477
3,663
623
716
15.2
16.4
227
235
1
3
396
388
791
867
279
286
35.3
33.0
512
581
512
581
26.4
13.3
12.5
13.3
3,344
3,617
10.0
10.0
4QE
4,450
11.1
3,779
671
15.1
254
4
294
708
233
32.9
475
475
6.1
10.7
3,519
6.2
CY12
CY13E
14,939
21.5
12,604
2,335
15.6
907
14
1,204
2,617
722
27.6
1,895
1,895
-0.9
12.7
12,408
23.8
16,559
10.8
14,081
2,478
15.0
938
10
1,492
3,023
1,011
33.5
2,011
2,011
6.2
12.1
13,649
10.0
C100
Sun Pharmaceuticals
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
SUNP IN
2,071.2
1,221 / 20
597 / 328
9 / 39 / 68

Y/E March
2012* 2013 2014E 2015E
Sales
80.1 112.4 156.4
179.6
EBITDA
31.9 48.4 66.0
74.1
Reported PAT
25.9 29.8 26.0
56.8
Reported EPS (INR)12.5 14.4 12.5
27.4
Core PAT
25.9 30.5 44.6
51.1
Core EPS (INR) 12.5 14.8 21.6
24.7
EPS Gr. (%)
42.7 31.3 46.1
14.4
BV/Sh. (INR)
58.7 72.4 81.9
105.2
RoE (%)
21.5 22.5 27.9
26.4
RoCE (%)
30.4 31.5 25.5
38.7
Payout (%)
17.2 17.5 23.9
13.9
Valuations
P/E (x)
47.1 40.0 27.4
23.9
P/BV (x)
10.0
8.1
7.2
5.6
EV/EBITDA (x)
36.6 15.3 15.3
15.3
Div. Yield (%)
0.4
0.7
0.7
0.7
*Including Para-IV/one-off upsides
CMP: INR590
Buy
We expect Sun Pharmaceuticals (SUNP) to post 39% YoY growth in

core revenues to INR33.94b. Growth will be mainly driven by
consolidation of URL and DUSA Pharma, and traction in US base
business, while domestic formulations will report flat growth YoY. We
expect reported sales to grow 42% to INR37.8b.
Core EBITDA is likely to grow 33% YoY to INR13.24b. Core EBITDA margin
would contract 180bp YoY to 39% in 2QFY13, impacted by falling
profitability from Taro. Reported EBITDA is expected to grow 40% to
INR16.32b.
We expect adjusted PAT to grow 31% YoY to INR10.1b. Reported PAT is
likely to be significantly higher at INR12.41b due to Protonix-related
provisioning in 2QFY13.
We believe that the US market will remain the core earnings driver for
SUNP, along with support from India and RoW markets.
While India formulations will see a slowdown in FY14, impacted by
the New Pricing Policy, we expect growth to rebound to historical
levels of 16-18% in FY15.
The stock trades at 27.4x FY14E and 23.9x FY15E core EPS. Buy.

Outlook on competitive landscape for Taro's products
Sustainability of price increases at URL Pharma.

Y/E March
Net Revenues
YoY Change (%)
Total Expenditure
EBITDA
Margins (%)
Depreciation
Net Other Income
PBT before EO Exp
EO Exp/(Inc)
PBT
Tax
Rate (%)
Profit after Tax
Share of Minority Partner
Reported PAT
One-off upsides
Adj Net Profit
YoY Change (%)
Margins (%)
US Sales
YoY Change (%)
E: MOSL Estimates; Quarterly no.
upsides.
October 2013
(INR Million)
FY13
1Q
2Q
3Q
26,581
26,572
28,520
62.5
40.3
33.0
14,413
14,889
15,909
12,169
11,684
12,611
45.8
44.0
44.2
801
829
844
-231
1,476
936
11,136
12,331
12,703
0
5,836
0
11,136
6,495
12,703
1,925
2,139
2,369
17.3
17.3
18.6
9,211
4,356
10,335
1,256
1,161
1,521
7,956
3,195
8,814
2,276
1,303
812
5,679
7,728
8,002
29.5
41.7
31.0
21.4
29.1
28.1
15,411
13,301
14,946
147.8
66.5
43.7
dont match with annual no.
FY14
4Q
30,715
31.8
18,116
12,599
41.0
887
1,102
12,814
0
12,814
1,773
13.8
11,041
925
10,116
976
9,140
25.6
29.8
17,879
76.9
because
1Q
2QE
34,822
37,790
31.0
42.2
19,515
21,467
15,306
16,324
44.0
43.2
978
1,000
735
836
15,063
16,160
25,174
0
-10,111
16,160
1,511
2,633
10.0
16.3
-11,622
13,526
1,139
1,113
-12,761
12,414
1,174
1,938
11,239
10,476
97.9
35.6
32.3
27.7
20,314
17,673
31.8
32.9
of reinstatement of
FY13
FY14E
3QE
4QE
42,168
41,593 112,389 156,374
47.9
35.4
40.4
39.1
24,998
24,406
63,327
90,385
17,171
17,187
49,062
65,988
40.7
41.3
43.7
42.2
1,050
1,080
3,362
4,108
986
1,036
3,284
3,593
17,107
17,143
48,984
65,473
0
0
5,836
25,174
17,107
17,143
43,149
40,299
2,790
2,913
8,205
9,847
16.3
17.0
16.8
15.0
14,317
14,230
34,944
30,452
1,062
1,161
4,863
4,476
13,255
13,069
30,081
25,976
1,907
1,488
5,367
6,506
11,348
11,581
30,550
44,644
41.8
26.7
31.5
46.1
26.9
27.8
27.2
28.5
18,126
15,908
59,238
59,946
21.3
-11.0
70.6
1.2
financials; Estimates include one-off
C101
Torrent Pharma
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
TRP IN
169.2
74 / 1
465 / 315
0 / 22 / 21

Y/E March
Sales
EBITDA
Net Profit
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2012
27.0
5.2
3.3
19.4
21.7
70.5
29.7
28.8
29.2
2013 2014E
32.1 38.3
6.9
7.4
4.7
5.0
27.8 29.8
43.1
7.2
84.9 108.5
35.8 30.8
33.5 29.6
52.3 28.1
22.6
6.2
14.1
1.9
15.8
5.2
10.8
5.2
14.7
4.0
10.1
1.7
2015E
43.3
8.4
5.8
34.1
14.4
132.6
28.3
28.7
29.3
12.9
3.3
8.8
1.9
CMP: INR439
Buy
We expect Torrent Pharmaceuticals (TRP) to post 21% YoY growth in

2QFY14 sales to INR9.42b, led by strong growth in all markets outside
India except Brazil. Domestic formulations would grow 8% YoY to
INR3.1b, while Brazil would continue to witness slowdown.
EBITDA is likely to grow 16.5% YoY to INR1.81b, with EBITDA margin

declining 100bp YoY.
Adjusted PAT would be INR1.23b, up 15% YoY.
Over the last six years, TRP has delivered 30.5% EPS CAGR, even as
capital employed CAGR was just 17.5%. RoCE has increased from 14.5%
in FY05 to 35.7% in FY13.
We believe that current valuations do not reflect the improvement in

business profitability (ex Europe), scale up of international operations,
and TRP's strong positioning in domestic formulations, particularly in
chronic therapeutic segments.

Outlook on Brazilian operations for FY14-15
Sustained recovery in domestic formulations
Impact of Drug Price Control Order (DPCO), 2013.
(INR Million)
Y/E March
Net Revenues (Core)
YoY Change (%)
EBITDA
Margins (%)
Depreciation
Interest
Other Income
Extra-Ord Expense
Tax
Rate (%)
Reported PAT
Minority Interest
Adj PAT
YoY Change (%)
Margins (%)
Dom. formulations sales
YoY Change (%)
Intl. formulations sales
YoY Change (%)
E: MOSL Estimates
October 2013
FY13
1Q
7,669
18.4
1,560
20.3
201
94
140
1,404
0
1,404
374
26.6
1,030
12
1,019
14.1
13.3
2,778
13.5
4,212
33.3
2Q
7,772
13.7
1,553
20.0
203
80
123
1,394
0
1,394
309
22.2
1,085
12
1,073
7.3
13.8
2,710
14.7
4,362
13.5
3Q
7,975
14.8
1,612
20.2
204
67
89
1,429
0
1,429
309
21.6
1,121
-3
1,123
35.0
14.1
2,586
12.7
4,490
14.2
FY14
4Q
8,710
29.2
2,200
25.3
220
100
80
1,960
370
1,590
480
24.5
1,110
0
1,480
164.4
17.0
2,180
9.8
5,260
34.1
1Q
9,300
21.3
1,880
20.2
210
80
80
1,670
-200
1,870
380
22.8
1,490
0
1,290
26.7
13.9
3,120
12.3
5,390
28.0
2QE
9,424
21.3
1,810
19.2
221
85
100
1,604
0
1,604
369
23.0
1,235
0
1,235
15.1
13.1
2,927
8.0
5,518
26.5
3QE
9,684
21.4
1,854
19.1
229
90
130
1,665
0
1,665
383
23.0
1,282
0
1,282
14.1
13.2
2,922
13.0
5,686
26.6
4QE
9,888
13.5
1,809
18.3
238
99
140
1,612
0
1,612
375
23.3
1,237
0
1,237
-16.4
12.5
2,420
11.0
6,128
16.5
FY13
FY14E
32,120
19.1
6,930
21.6
830
340
430
6,190
370
5,820
1,470
23.7
4,350
20
4,705
43.1
14.6
10,240
12.7
18,340
23.8
38,295
19.2
7,353
19.2
898
354
450
6,551
-200
6,751
1,507
23.0
5,244
0
5,044
7.2
13.2
11,389
11.2
22,722
23.9
C102
September 2013 Results Preview | Sector: Media
Media
Companies Covered
Ad environment challenging
D B Corp
The ad environment is likely to remain challenging due to the slowing economy. In

2QFY14, we expect Zee/Sun TV to clock 10/13% YoY ad growth (including broadcast
revenue for Sun TV). We expect our print universe ad growth to be impacted due to
bulk of the "shraadh" season falling in 2QFY14 against 3Q last year. Regional print
companies are likely to post double-digit ad growth, though ad growth would remain
under pressure for English language publications. We expect DB Corp/Jagran/HT Media
to post ad growth of 16/10/12%.
Dish TV
H T Media
Jagran Prakashan
PVR
Sun TV Network
Expect strong earnings growth for Sun TV/DB Corp
Zee Entertainment
We expect Sun TV/DB Corp to report the highest YoY PAT growth at ~21%, followed by
Zee. Zee's adjusted PAT is likely to grow 14% YoY. Dish TV's net loss would decline
~35% QoQ, driven by EBITDA margin expansion. HT Media's PAT is likely to decline
41% YoY due to muted ad growth and newsprint price inflation caused by INR
depreciation.
DTH: Subscriber additions to remain largely flat QoQ

We expect DTH subscriber additions to remain largely flat QoQ due to lack of catalysts
during 2QFY14. We expect Dish TV to add 0.4m subscribers on a gross basis in 2QFY14.
Hiccups in digitization process continue

There have been hiccups in the phase-I implementation, as cable subscribers are yet
to fully transition to "addressable" systems. The regulator, TRAI has given directions
to MSOs/LCOs operating in phase-I to implement "subscriber management system"
to maintain subscriber details and their choice of services. The last date for collection
of customer application forms from digital cable subscribers in phase-II has been
extended to 15 November 2013 from 20 September 2013.
Abbreviations and acronyms
GEC: General entertainment
channel
DTH: direct to home
Digitization remains a strong theme for broadcasting; earnings revival

continues for print
Our industry interactions suggest that the ad environment is likely to remain
challenging for the rest of FY14. The print media sector continues to post earnings
recovery, led by yield improvement focus for regional print and cost management.
Digitization remains a strong theme for broadcasting and distribution stocks, as the
government has remained committed to the timelines.
D B Corp
Dish TV
HT Media
Jagran Prakashan
PVR
Sun TV
Zee Entertainment
Sector Aggregate
CMP
(INR)
27.09.13
252
50
87
82
470
401
238
(INR million)
Rating
Sep.13
Buy
Buy
Neutral
Buy
Buy
Buy
Neutral
4,334
5,908
5,154
4,095
3,556
5,026
10,551
38,624
Sales
Var.
% YoY
14.5
10.7
0.9
27.1
99.6
16.0
10.6
16.7
Var.
% QoQ
-3.6
2.1
-4.7
-0.9
6.1
-16.5
8.4
-0.8
Sep.13
1,058
1,515
445
911
693
3,805
2,907
11,334
EBITDA
Var.
% YoY
23.0
-2.7
-21.2
16.5
114.4
15.6
33.5
18.6
Var.
% QoQ
-20.3
24.5
-42.8
-10.6
16.8
7.6
-0.3
-0.5
Net Profit
Sep.13
Var.
% YoY
590
21.4
-198
Loss
196
-41.1
529
8.7
262
60.9
1,828
20.5
2,145
14.3
5,351
15.1
Var.
% QoQ
-22.5
Loss
-58.7
-8.5
58.5
11.2
-4.5
-3.9
Shobhit Khare (Shobhit.Khare@MotilalOswal.com) / Anil Shenoy (Anil.Shenoy@MotilalOswal.com)

October 2013
C103
Media: Quarterly financials

FY12
FY13
1Q
2Q
3Q
4Q
1Q
2Q
3Q
Advertisement Revenue (INR b)
ZEEL
3.8
3.9
4.0
4.2
4.5
5.3
5.1
Sun TV
2.7
2.7
2.9
2.8
2.8
2.8
3.3
Dish TV
NM
NM
NM
NM
NM
NM
NM
DB Corp
2.7
2.6
2.9
2.5
2.7
2.6
3.2
Jagran Prakashan*
2.0
2.1
2.2
2.1
2.2
2.2
2.4
HT Media
3.8
3.7
4.1
3.7
3.7
3.6
4.1
HMVL
1.1
1.1
1.0
1.1
1.2
1.1
1.2
Subscription Revenue (INR b)
ZEEL
3.1
2.9
3.3
4.0
3.6
3.9
4.1
Sun TV
1.6
1.4
1.4
1.4
1.5
1.5
1.6
Dish TV
3.9
4.1
4.3
4.3
4.6
4.7
4.9
DB Corp
0.6
0.6
0.6
0.6
0.7
0.7
0.7
Jagran Prakashan*
0.6
0.6
0.6
0.6
0.6
0.7
0.7
HT Media
0.5
0.5
0.5
0.5
0.5
0.6
0.6
HMVL
0.3
0.3
0.3
0.3
0.4
0.4
0.4
Total Revenue (INR b)
ZEEL
7.0
7.2
7.5
8.7
8.4
9.5
9.4
Sun TV
4.5
4.5
4.3
4.3
4.3
4.3
4.9
Dish TV
4.6
4.8
4.9
5.2
5.2
5.3
5.6
DB Corp
3.5
3.5
4.0
3.6
3.8
3.8
4.4
Jagran Prakashan*
3.0
3.1
3.2
3.1
3.2
3.2
3.5
HT Media
5.0
4.9
5.3
4.9
4.9
5.1
5.5
HMVL
1.5
1.5
1.4
1.6
1.6
1.6
1.6
EBITDA (INR b)
ZEEL
1.6
2.1
2.2
1.6
2.3
2.2
2.6
Sun TV
3.7
3.7
3.4
3.3
3.2
3.3
3.8
Dish TV
1.1
1.2
1.2
1.4
1.6
1.6
1.4
DB Corp
1.00
0.77
1.02
0.76
0.76
0.86
1.19
Jagran Prakashan*
0.82
0.79
0.85
0.66
0.79
0.78
0.91
HT Media
0.90
0.71
0.78
0.48
0.67
0.57
0.87
HMVL
0.27
0.31
0.17
0.21
0.28
0.29
0.29
EBITDA Margin (%)
ZEEL
22.3
28.9
28.6
18.4
27.7
22.8
27.8
Sun TV
80.6
81.0
80.2
76.9
75.9
75.9
77.5
Dish TV
24.4
25.2
24.5
27.5
29.9
29.2
24.7
DB Corp
28.4
21.8
25.7
21.0
20.3
22.7
27.2
Jagran Prakashan*
26.9
25.9
26.3
21.2
24.8
24.3
26.1
HT Media
18.2
14.4
14.8
9.7
13.7
11.1
16.0
HMVL
18.1
20.3
11.7
13.7
17.7
18.0
17.6
Adj. PAT (INR b)
ZEEL
1.34
1.56
1.39
1.42
1.58
1.88
1.94
Sun TV
1.88
1.80
1.68
1.59
1.64
1.52
1.90
Dish TV
-0.18
-0.49
-0.43
-0.49
-0.32
-0.21
-0.45
DB Corp
0.61
0.40
0.55
0.45
0.44
0.49
0.71
Jagran Prakashan*
0.50
0.46
0.41
0.43
0.39
0.49
0.46
HT Media
0.52
0.44
0.48
0.22
0.41
0.33
0.53
HMVL
0.19
0.22
0.11
0.14
0.21
0.22
0.21
* Consolidated numbers from 1QFY14. Not comparable with previous quarters
October 2013
4Q
FY14
1Q
2QE
YoY
(%)
QoQ
(%)
4.8
3.1
NM
2.8
2.3
3.8
1.1
5.3
3.1
NM
3.3
2.9
4.1
1.3
5.8
3.2
NM
3.1
2.8
3.8
1.3
10
13
NM
16
29
4
12
10
1
NM
-6
-2
-7
-3
4.5
1.6
5.0
0.7
0.8
0.6
0.4
4.2
1.8
5.3
0.8
0.9
0.6
0.4
4.5
1.8
5.4
0.8
0.9
0.64
0.4
13
22
14
14
30
13
12
6
4
3
4
1
5
3
9.6
4.7
5.6
4.0
3.4
5.0
1.6
9.7
6.0
5.8
4.5
4.1
5.4
1.8
10.6
5.0
5.9
4.3
4.1
5.2
1.8
11
16
11
15
27
1
12
8
-16
2
-4
-1
-5
-1
2.4
3.5
1.2
0.94
0.54
0.72
0.29
2.9
3.5
1.2
1.33
1.02
0.78
0.40
2.9
3.8
1.5
1.06
0.91
0.45
0.35
34
16
-3
23
17
-21
23
0
8
24
-20
-10
-43
-11
25.1
73.7
21.6
23.6
15.8
14.3
18.9
30.0
58.8
21.0
29.6
24.7
14.4
22.0
27.5 472bp -240bp

75.7 -23bp 1693bp
25.6 -354bp 460bp
24.4 167bp -514bp
22.3 -199bp -240bp
8.6 -242bp -576bp
19.8 179bp -227bp
1.80
1.78
-0.44
0.55
0.28
0.40
0.23
2.25
1.64
-0.30
0.76
0.58
0.48
0.30
2.14
14
1.83
21
-0.20
-7
0.59
21
0.53
9
0.20
-41
0.26
21
Source: Company,
-5
11
-35
-22
-8
-59
-13
MOSL
C104
^ Z W ^ D
Y&zzz
16
13
10
10
ZEEL
DB Corp
Sun TV
Ja gra n
Pra ka s ha n
HT Medi a
Y&zzz
22
13
13
ZEEL
Ja gra n
Prakas han
Sun TV
14
14
13
Di s h TV
DB Corp
HT Medi a
/d,
d,
Y
Y&z
Y&z
Y&z
Y&z
Y&z
Y&z
Y&z
Y&z
Y&z
Y&z
Y&z
Y&z
Y&z
Y&z
Y&z
Y&z
Y&z
Y&z
Y&z
Y&z
E/EZh^Dd
News print pri ce INR
45,000
News pri nt pri ce USD (RHS)
800
700
35,000
600
25,000
500
Aug13
Mar13
Sep12
Apr12
Nov11
Jun11
Dec10
Jul10
Feb10
Sep09
Apr09
Nov08
Jun08
400
Jan08
15,000
^ DK^>
K

Sens ex Index
MOSL Medi a Index
104
Sens ex Index
MOSL Medi a Index
Sep-13
Sep-13
Jun-13
Jul-13
Aug-13
94
Jun-13
96
Mar-13
98
Dec-12
100
Sep-12
120
115
110
105
100
95
90
102
CMP (INR)
27.09.13
Media
D B Corp
Dish TV
Hindustan Media
HT Media
Jagran Prakashan
PVR
Sun TV
Zee Entertainment
Sector Aggregate
October 2013
252
50
111
87
82
470
401
238
Rating
EPS (INR)
FY13 FY14E FY15E
P/E (x)
FY13 FY14E FY15E
EV/EBITDA (x)
FY13 FY14E FY15E
RoE (%)
FY13 FY14E FY15E
Buy
Buy
Buy
Neutral
Buy
Buy
Buy
Neutral
11.9
-1.2
11.5
7.1
4.7
11.2
17.3
7.5
21.2
-42.7
9.7
12.3
17.6
41.8
23.1
31.5
28.8
12.4
10.9
4.6
5.9
10.1
20.9
11.2
23.2
13.7
22.3
NA
17.9
10.1
17.5
9.6
23.6
19.6
17.1
15.3
-0.9
14.1
5.7
6.4
15.4
19.5
9.2
18.6
-0.2
16.3
6.0
7.7
24.2
24.1
11.0
16.5
13.6
-58.9 -289.8
7.9
6.8
15.4
14.6
12.8
10.7
30.6
19.4
20.6
16.6
26.0
21.7
24.0
19.1
9.3
10.1
3.0
6.3
7.6
10.7
9.6
18.7
11.4
7.9
8.1
2.0
5.5
6.5
8.4
8.0
15.4
9.4
25.7
NA
18.5
7.4
20.4
9.3
24.1
20.7
18.4
27.7
NA
17.9
7.2
21.5
13.3
26.7
21.4
20.3
C106
D B Corp
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
DBCL IN
183.4
46 / 1
280 / 196
-3 / 7 / 21

Y/E March
2012
Net Sales
14.6
EBITDA
3.55
Adj. Net Profit 2.02
Adj. EPS (INR)
11.0
Adj. EPS Gr. (%) -12.3
BV/Sh (INR)
50.7
RoE (%)
23.0
RoCE (%)
18.1
Valuations
P/E (x)
23.0
P/BV (x)
5.0
EV/EBITDA (x)
13.3
Div. Yield (%)
2.0
2013 2014E
15.9 18.4
3.76 4.93
2.18 2.81
11.9 15.3
7.9 28.8
56.2 63.0
22.3 25.7
18.0 21.6
53.7 55.7
21.3
4.5
12.5
2.2
16.6
4.0
9.3
2.9
2015E
20.6
5.63
3.40
18.6
21.1
70.9
27.7
23.6
57.0
13.7
3.6
7.9
3.6
CMP: INR252
Buy
We expect print advertising revenues to grow 16% YoY to INR3.06b.
Circulation revenues are likely to grow 14% YoY to INR0.8b.
We expect aggregate revenues to increase 15% YoY to INR4.33b.
We estimate EBITDA at INR1.06b, up 23% YoY. EBITDA margin should

expand ~170bp YoY to 24.4%.
Net profit is likely to grow 21% YoY to INR0.59b.
The stock trades at 16.6x FY14E and 13.7x FY15E EPS. Buy.

YoY ad growth (we expect 16%)
EBITDA margin (we expect 24.4%)
(INR Million)
Y/E March
Sales
YoY (%)
Operating Expenses
EBITDA
YoY (%)
EBITDA margin (%)
Depreciation
Interest
Other Income
PBT
Tax
Adj PAT
YoY (%)
Revenue break-up (INR m)
Ad revenue (print)
Circulation revenue
Radio
Event management
Others
Total revenue
E: MOSL Estimates
October 2013
FY13
FY14
FY13
FY14E
1Q
3,770
6.6
3,005
765
-23.8
20.3
135
17
46
658
222
33.7
437
-28.5
2Q
3,784
6.9
2,923
861
11.6
22.7
143
19
38
736
251
34.0
486
20.7
3Q
4,389
11.0
3,197
1,192
17.1
27.2
151
19
38
1,060
352
33.2
706
27.6
4Q
3,981
10.4
3,042
939
24.0
23.6
151
22
92
858
307
35.7
552
21.7
1Q
4,494
19.2
3,166
1,328
73.7
29.6
158
25
45
1,191
430
36.1
761
74.3
2QE
4,334
14.5
3,276
1,058
23.0
24.4
159
26
50
923
334
36.1
590
21.4
3QE
5,030
14.6
3,633
1,398
17.3
27.8
160
26
55
1,267
458
36.1
809
14.6
4QE
4,540
14.0
3,397
1,143
21.7
25.2
164
26
65
1,018
368
36.1
650
17.7
15,923
8.8
12,163
3,760
5.9
23.6
581
80
213
3,313
1,132
34.2
2,181
7.9
18,398
15.5
13,472
4,927
31.0
26.8
640
102
214
4,398
1,589
36.1
2,810
28.8
2,701
656
140
46
227
3,770
2,636
698
153
40
257
3,784
3,184
729
191
9
276
4,389
2,779
731
183
31
257
3,981
3,253
767
172
15
288
4,494
3,058
796
179
16
286
4,334
3,662
831
214
16
308
5,030
3,200
833
202
16
288
4,540
11,300
2,814
667
126
1,017
15,923
13,173
3,227
766
63
1,169
18,398
C107
Dish TV
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
DITV IN
1,064.8
54 / 1
85 / 40
9 / -30 / -45
CMP: INR50
Buy
We expect revenues to grow 11% YoY and 2% QoQ to INR5.9b.
Subscription revenues are likely to increase 3% QoQ to INR5.4b.
We expect gross additions of 0.4m and net additions of 0.15m.
EBITDA margin should expand 460bp QoQ to 25.6% largely due to lower
content costs.
Net loss is expected to decline 35% QoQ to INR198m.
The stock trades at an EV/EBITDA of 10.1x FY14E and 8.1x FY15E. Buy.

Y/E March
2012 2013 2014E
Net Sales
19.6 21.7 24.3
EBITDA
5.0
5.8
6.0
Adj. Net Profit
-1.6
-1.3
-0.9
Adj. EPS (INR)
-1.5
-1.2
-0.9
Adj. EPS Gr. (%)
NA
NA
NA
BV/Sh (INR)
-0.9
-1.5
-2.3
RoE (%)
NA
NA
NA
RoCE (%)
NA
1.2
-0.9
Div. Payout (%)
NA
NA
NA
Valuations
P/E (x)
NA
NA
NA
P/BV (x)
NA
NA
NA
EV/EBITDA (x)
12.4 10.9 10.1
EV/Sub (INR)
6,435 5,891 5,169
2015E
28.0
7.3
-0.2
-0.2
NA
-2.5
NA
6.4
NA
NA
NA
8.1
4,517

Quarterly gross additions (we expect 0.4m)
ARPU (we expect INR164)
(INR Million)
Y/E March
Sales
YoY Change (%)
Operating expenses
EBITDA
YoY Change (%)
EBITDA margin (%)
Depreciation
Interest
Other Income
PBT
Adjusted net profit
YoY Change (%)
Net Subs (m)
ARPU (INR/month)
Revenue break-up (INR m)
Subscription revenue
Lease rentals
Others
Total revenue
E: MOSL Estimates
October 2013
FY13
FY14
FY13
FY14E
1Q
5,200
12.9
3,644
1,556
38.7
29.9
1,512
473
106
-324
-324
76.8
9.8
156
2Q
5,336
10.7
3,779
1,557
27.9
29.2
1,533
317
80
-213
-213
-56.3
10.0
159
3Q
5,578
13.7
4,201
1,377
14.6
24.7
1,713
288
175
-449
-449
4.4
10.5
160
4Q
5,554
5.9
4,354
1,200
-16.7
21.6
1,450
344
157
-436
-436
-11.0
10.7
157
1Q
5,784
11.2
4,567
1,217
-21.8
21.0
1,444
354
277
-304
-304
-6.0
10.9
165
2QE
5,908
10.7
4,393
1,515
-2.7
25.6
1,499
308
94
-198
-198
-6.9
11.1
164
3QE
6,123
9.8
4,650
1,473
6.9
24.1
1,556
265
70
-278
-278
-38.1
11.5
167
4QE
6,466
16.4
4,663
1,802
50.2
27.9
1,629
233
45
-15
-15
-96.6
11.7
169
21,668
10.7
15,873
5,795
16.3
26.7
6,276
1,284
512
-1,252
-1,252
-21.2
10.7
157
24,280
12.1
18,273
6,007
3.7
24.7
6,127
1,274
486
-908
-908
-27.5
11.7
166
4,556
460
184
5,200
4,729
430
177
5,336
4,943
380
255
5,578
5,001
320
233
5,554
5,280
300
204
5,784
5,415
285
208
5,908
5,644
271
208
6,123
5,978
290
199
6,466
19,228
1,597
843
21,668
22,316
1,145
818
24,280
C108
H T Media
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
HTML IN
235.0
21 / 0
124 / 81
-14 / -20 / -11
CMP: INR87
Neutral
We expect revenues to grow 1% YoY to INR5.15b.
Ad revenues are likely to grow 4% YoY to INR3.80b.
We expect circulation revenues to increase 13% YoY to INR0.64b.
EBITDA margin should contract 242bp YoY to 8.6% due to newsprint

price inflation, led by INR depreciation.
Net profit is likely to decline 41% YoY to INR0.20b.
The stock trades at 15.6x FY14E and 14.8x FY15E EPS. Neutral.

Y/E March
2012
Net Sales
20.0
EBITDA
2.85
Adj. EPS (INR)
7.0
Adj. EPS Gr. (%) -9.5
BV/Sh (INR)
67.4
RoE (%)
10.9
RoCE (%)
10.4
Div. Payout (%)
6.7
Valuations
P/E (x)
12.7
P/BV (x)
1.3
EV/EBITDA (x)
6.1
Div. Yield (%)
0.5
2013 2014E
20.5 22.0
2.83 2.48
1.68 1.33
7.1
5.7
2.5 -20.6
74.0 80.0
10.1
7.4
10.0
8.4
6.5
7.5
12.4
1.2
5.9
0.5
2015E
23.8
2.56
1.40
6.0
5.3
86.5
7.2
8.8
8.2
15.6
1.1
6.4
0.5
14.8
1.0
5.6
0.6

English ad growth (we expect 1% YoY growth)
Hindi ad growth (we expect 12% YoY growth)
(INR Million)
Y/E March
Revenue
YoY (%)
Operating expenses
EBITDA
YoY (%)
EBITDA margin (%)
Depreciation
Interest
Other Income
PBT
Tax
PAT
Minority Interest
Reported PAT
Adj PAT
YoY (%)
Ad revenue growth (%)
-English
-Hindi
Circulation revenue growth (%)
-English
-Hindi
E: MOSL Estimates
October 2013
FY13
1Q
4,899
-1.4
4,230
669
-25.9
13.7
220
103
209
555
129
23.2
426
19
407
407
-21.0
-3
-6
5
8
-3
13
2Q
5,107
3.6
4,542
565
-20.7
11.1
242
98
244
469
107
22.8
362
29
333
333
-24.0
-2
-3
1
11
1
16
3Q
5,470
3.9
4,596
875
12.6
16.0
220
110
238
783
222
28.3
562
34
528
528
9.5
2
-3
15
12
6
15
FY14
4Q
5,005
1.3
4,288
718
49.3
14.3
232
135
247
597
167
27.9
430
29
401
401
82.5
1
3
-3
19
27
16
1Q
5,409
10.4
4,630
779
16.5
14.4
219
137
276
699
183
26.2
516
41
475
475
16.7
10
8
14
16
25
12
2QE
5,154
0.9
4,708
445
-21.2
8.6
223
88
220
354
99
28.0
255
59
196
196
-41.1
4
1
12
13
15
12
3QE
5,890
7.7
5,091
799
-8.7
13.6
231
100
225
693
195
28.1
498
58
440
440
-16.6
9
6
16
11
10
12
4QE
5,542
10.7
5,089
453
-36.9
8.2
238
98
241
359
101
28.0
259
37
221
221
-44.8
10
8
16
12
10
12
FY13
FY14E
20,482
1.9
17,656
2,826
-1.6
13.8
914
446
938
2,404
624
26.0
1,780
111
1,669
1,669
1
0
-2
5
13
7
15
21,994
7.4
19,518
2,476
-12.4
11.3
911
423
962
2,105
577
27.4
1,528
1,332
1,332
-20
8
6
14
13
14
12
C109
Jagran Prakashan
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
JAGP IN
331.9
27 / 0
118 / 79
-12 / -16 / -16
CMP: INR82
Quarterly financials will not be comparable on a YoY basis due to

inclusion of 'Nai Duniya'.
We expect advertising revenues to grow 29% YoY to INR2.84b on

reported basis. On a like to like basis, we expect ad revenue growth to
be 10% YoY.
We expect circulation revenues to grow 30% YoY to INR0.87b on a

reported basis. On a like to like basis, we expect circulation revenue
growth of 13% YoY.
Aggregate revenues are likely to increase 27% YoY to INR4.10b.
We estimate EBITDA at INR0.91b, up 17% YoY, and EBITDA margin at

22.3%.
Adjusted earnings should grow 9% YoY to INR0.53b, despite

consolidation of 'Nai Duniya'.

Y/E March
2012
Net Sales
13.6
EBITDA
3.17
Adj. EPS (INR)
5.6
Adj. EPS Gr. (%) -18.3
BV/Sh (INR)
23.8
RoE (%)
24.5
RoCE (%)
15.5
Valuations
P/E (x)
14.7
P/BV (x)
3.5
EV/EBITDA (x)
9.5
Div. Yield (%)
4.2
2013 2014E
15.3 17.0
2.96 3.92
1.47 2.14
4.7
6.8
-17.3 44.8
29.5 33.9
17.5 21.3
18.8 16.4
50.2 43.3
17.8
2.8
9.8
2.4
12.3
2.4
7.1
3.0
2015E
18.7
4.63
2.67
8.5
25.2
38.9
23.2
16.9
41.5
9.8
2.1
5.7
3.6
Buy

YoY ad growth (we expect 29% including ad revenues of Nai Duniya)
Quarterly Performance (Consolidated from 1QFY14)

Y/E March
Sales
YoY (%)
Operating expenses
EBITDA
YoY (%)
EBITDA margin (%)
Depreciation
Interest
Other Income
PBT
Tax
Reported net profit
Extra-ordinary item
Adjusted net profit
YoY (%)
Key Metrics
Ad revenue growth (YoY, %)
Circulation revenue growth (YoY,%)
RM/Sales (%)
E: MOSL Estimates
October 2013
(INR Million)
FY13
FY14
FY13
FY14E
1Q
3,175
4.2
2,387
788
-3.9
24.8
148
76
-7
557
0
0.0
557
167
390
-21.5
2Q
3,221
5.5
2,439
782
-1.1
24.3
161
59
133
694
0
0.0
694
208
486
6.2
3Q
3,489
7.7
2,578
911
7.0
26.1
166
77
-9
659
0
0.0
659
198
461
11.6
4Q
3,428
10.4
2,888
540
-18.0
15.8
185
65
109
398
-4
-1.1
402
119
283
-34.0
1Q
4,131
30.1
3,111
1,019
29.3
24.7
181
71
-12
755
177
23.5
578
0
578
48.1
2QE
4,097
27.2
3,184
913
16.8
22.3
188
72
40
693
163
23.5
530
0
530
9.0
3QE
4,475
28.3
3,357
1,118
22.8
25.0
196
73
79
929
218
23.5
711
0
711
54.2
4QE
4,287
25.1
3,418
869
60.9
20.3
205
70
80
673
158
23.5
515
0
515
82.1
13,314
7.0
10,292
3,021
-3.2
22.7
660
278
225
2,308
-4
(0.2)
2,313
693
1,620
-17.3
16,990
27.6
13,071
3,920
29.7
23.1
770
286
187
3,051
717
23.5
2,334
0
2,334
44.1
8
10
36
4
9
34
7
12
34
8
21
36
31
35
34
29
30
35
33
25
36
31
15
36
4
13
35
14
19
29
C110
PVR
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
PVRL IN
39.6
19 / 0
476 / 186
12 / 50 / 145

Y/E March
Sales
EBITDA
NP
EPS (INR)
EPS Growth (%)
BV/Share (INR)
RoE (%)
RoCE (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
EV/Sales (x)
2012 2013 2014E

5.2
8.1 14.3
0.8
1.2
2.3
0.3
0.4
0.6
9.8 11.2 15.4
225.4 14.7 36.6
109.3 162.2 171.2
8.1
9.6
9.3
10.4
7.8 12.2
47.6
4.3
26.7
3.9
41.6
2.9
21.1
3.1
30.4
2.7
10.6
1.7
2015E
17.3
2.9
1.0
24.2
57.5
191.9
13.3
15.1
19.3
2.4
8.3
1.4
CMP: INR470
Buy
We expect PVR to report revenues of INR3.5b for 2QFY14, marking a

growth of 100% due to consolidation of Cinemax with PVR. We expect
footfalls of 16.6m, with average ticket price (ATP) at INR175 and spend
per head (SPH) of INR55.5 on food and beverages (F&B).
EBITDA margin is likely to expand 150bp YoY to 19.5%, primarily on

account higher growth in F&B and advertisement revenues, and
synergies from Cinemax acquisition.
Due to higher margins and Cinemax consolidation, we expect PAT to

grow 60% YoY.
The stock trades at an EV of 10.6x FY14E and 8.3x FY15E EBITDA.

Maintain Buy.
Key issues to watch out for

Growth in footfalls
New screen openings
Synergies with Cinemax
Y/E March
1Q
Net Sales
1,799
YoY Change (%)
53.3
Total Expenditure
1,461
EBITDA
338
Margins (%)
18.8
Depreciation
179
Interest
47
Other Income
8
PBT before EO expense
120
Extra-Ord expense
0
PBT
120
Tax
42
Rate (%)
34.8
Min. Int. & Profit/Loss of Asso. Cos.
-3
Reported PAT
81
YoY Change (%)
37.1
Margins (%)
4.5
E: MOSL Estimates
(INR Million)
FY13
2Q
3Q
1,782
2,024
28.1
43.2
1,458
1,681
323
343
18.2
17.0
89
118
52
92
52
11
235
145
0
33
235
111
73
56
31.0
50.0
-1
2
163
53
14.8
-22.4
9.1
2.6
FY14
4Q
2,448
108.0
2,284
164
6.7
175
176
19
-167
0
-167
-294
176
3
124
5.1
1Q
3,352
86.0
2,758
594
17.7
182
194
21
238
41
197
57
29.1
4
136
105
4.1
2QE
3,556
100.0
2,862
693
19.5
213
178
25
327
0
327
65
20.0
0
262
61
7.4
3QE
3,913
93.0
3,142
771
19.7
211
203
30
386
0
386
89
23.0
0
297
326
7.6
4QE
3,444
41.0
3,168
276
8.0
207
207
36
-102
0
-102
-20
20.0
0
-82
-166
-2.4
FY13
FY14E
8,053
55.7
6,884
1,169
14.5
560
368
91
332
-12
320
(124)
-38.7
2
445
0.9
5.5
14,274
77.2
11,937
2,337
16.4
824
794
113
833
0
833
208
25.0
0
625
0.4
4.4
Niket Shah (Niket.Shah@MotilalOswal.com)

October 2013
C111
Sun TV Network
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
SUNTV IN
394.1
158 / 3
494 / 311
-3 / -2 / 12

Y/E March
2012
Net Sales
17.6
EBITDA
14.0
Adj. Net Profit
6.9
Adj. EPS (INR)
17.6
Adj. EPS Gr. (%) -10.0
BV/Sh (INR)
67.1
RoE (%)
26.3
RoCE (%)
51.2
Valuations
P/E (x)
22.7
P/BV (x)
6.0
EV/EBITDA (x)
11.0
Div. Yield (%)
2.4
2013 2014E
18.2 22.1
13.8 15.8
6.8
7.7
17.3 19.5
-1.6 12.2
73.4 80.7
23.6 24.1
45.3 47.5
54.8 54.0
23.1
5.4
11.2
2.4
20.5
5.0
9.6
2.6
2015E
25.8
18.6
9.5
24.1
24.0
90.4
26.7
50.6
51.8
16.6
4.4
7.9
3.1
CMP: INR401
Buy
We expect revenues to increase 16% YoY to INR5b.
Advertising and broadcasting revenues are likely to grow 13% YoY to

INR3.16b.
We expect total subscription revenues (domestic + international) to

grow 22% YoY to INR1.84b.
EBITDA is likely to grow 16% YoY to INR3.8b.
PAT would grow 21% YoY to INR1.83b.

QoQ subscription growth (we expect 4%)
(INR Million)
Y/E March
FY13
1Q
4,258
-6.2
3,230
-11.7
75.9
933
2
132
2,427
784
32.3
1,643
1,643
-12.4
2Q
4,333
-4.0
3,290
-10.0
75.9
1,138
5
96
2,243
726
32.4
1,517
1,517
-15.8
3Q
4,859
14.3
3,763
10.3
77.5
1,044
17
106
2,808
910
32.4
1,899
1,899
13.1
Revenue
YoY (%)
EBITDA
YoY (%)
As of % Sales
Depreciation and Amortization
Interest
Other Income
PBT
Tax
Reported PAT
Adj PAT
YoY (%)
Revenue Breakup (INR m)
Advertising and Broadcast
2,800
2,810
3,270
International
260
260
260
DTH
890
900
945
Domestic Cable
300
340
370
Films and Others
8
23
14
Total
4,258
4,333
4,859
E: MOSL Estimates; * 1QFY14 includes IPL revenue of INR985.4m
October 2013
FY14
4Q
4,727
10.7
3,486
6.2
73.7
1,017
24
216
2,661
886
33.3
1,775
1,775
11.6
1Q
6,019
41.4
3,537
9.5
58.8
1,174
7
134
2,489
845
33.9
1,644
1,644
0.1
2QE
5,026
16.0
3,805
15.6
75.7
1,174
10
141
2,761
933
33.8
1,828
1,828
20.5
FY13
FY14E
3QE
5,641
16.1
4,369
16.1
77.5
1,291
14
148
3,212
1,086
33.8
2,126
2,126
12.0
4QE
5,400
14.2
4,062
16.5
75.2
1,162
17
238
3,122
1,052
33.7
2,070
2,070
16.6
18,176
3.4
13,769
-1.7
75.8
4,132
48
550
10,139
3,306
32.6
6,833
6,833
-1.6
22,086
21.5
15,773
14.6
71.4
4,801
48
660
11,584
3,915
33.8
7,669
7,669
12.2
3,050
3,140
3,161
3,679
260
290
300
303
1,000
1,060
1,071
1,087
380
420
466
473
37
1,109
28
100
4,727
6,019
5,026
5,641
and IPL EBITDA loss of INR307.9m
3,451
303
1,111
485
50
5,400
11,930
1,040
3,735
1,390
81
18,176
13,431
1,196
4,329
1,844
1,287
22,086
C112
Zee Entertainment Enterprises

Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
Z IN
954.0
227 / 4
267 / 174
-5 / 8 / 23
CMP: INR238
Neutral
We expect advertising revenues to grow 10% YoY to INR5.8b.
We estimate subscription revenue growth at 13% YoY to INR4.47b.
EBITDA margin is likely to expand 470bp YoY to 27.5%.
Adjusted PAT is expected to increase 14% YoY to INR2.14b.
The stock trades at 26.1x FY14E and 21.7x FY15E EPS. Neutral.

Y/E March
2012
Net Sales
30.4
EBITDA
7.4
Adj. Net Profit
5.7
Adj. EPS (INR)
5.9
Adj. EPS Gr. (%) -1.4
BV/Sh (INR)
35.8
RoE (%)
17.5
RoCE (%)
25.5
Valuations
P/E (x)
40.4
P/BV (x)
6.8
EV/EBITDA (x)
29.4
Div. Yield (%)
0.6
2013 2014E
37.0 42.4
9.5 11.7
7.2
8.7
7.5
9.2
27.9 21.4
41.0 47.5
19.6 20.7
29.1 31.5
26.6 25.0
31.6
6.0
22.5
0.8
26.1
5.1
18.1
1.0
2015E
49.2
14.0
10.5
11.0
20.0
55.2
21.4
31.8
25.0

Sports loss (we expect INR350m)
21.7
4.4
14.9
1.2
(INR Million)
Y/E March
Advertsing Revenue
Subscription Revenue
Other Sales and Services
Net Sales
Change (%)
Prog, Transmission & Direct Exp
Staff Cost
Selling and Other Exp
EBITDA
Change (%)
As of % Sales
Depreciation
Finance cost
Other Income
PBT
Tax
PAT
Minority Interest/Associates
Adj PAT after Minority Interest
Change (%)
Subscription revenue (INR m)
Domestic
International
Total Subscription revenue
E: MOSL Estimates
October 2013
FY13
FY14
FY13
FY14E
1Q
4,472
3,641
317
8,430
20.7
3,757
888
1,453
2,332
49.5
27.7
99
18
301
2,517
947
37.6
1,570
-12
1,582
18.3
2Q
5,281
3,950
305
9,536
32.7
4,791
873
1,695
2,177
4.9
22.8
96
23
260
2,318
444
19.2
1,874
-2
1,876
20.3
3Q
5,094
4,098
197
9,388
24.4
4,185
895
1,697
2,611
20.9
27.8
90
16
360
2,865
933
32.6
1,933
-8
1,941
39.3
4Q
4,792
4,546
305
9,643
11.0
4,669
835
1,716
2,423
51.5
25.1
115
29
538
2,817
1,014
36.0
1,803
8
1,795
26.3
1Q
5,301
4,241
191
9,733
15.5
4,108
956
1,754
2,915
25.0
30.0
87
22
722
3,528
1,289
36.5
2,239
-8
2,246
42.0
2QE
5,809
4,474
268
10,551
10.6
4,845
975
1,824
2,907
33.5
27.5
100
22
385
3,170
1,027
32.4
2,143
-2
2,145
14.3
3QE
6,113
4,724
201
11,037
17.6
4,737
985
1,897
3,418
30.9
31.0
106
22
388
3,678
1,192
32.4
2,486
-3
2,489
28.3
4QE
5,840
4,935
301
11,077
14.9
5,642
989
1,970
2,475
2.2
22.3
111
21
392
2,736
884
32.3
1,851
-3
1,854
3.3
19,639
16,234
1,123
36,997
21.7
17,401
3,491
6,561
9,544
29.0
25.8
399
86
1,459
10,517
3,338
31.7
7,179
-15
7,194
26.0
23,063
18,374
960
42,397
14.6
19,333
3,906
7,444
11,715
22.7
27.6
403
87
1,886
13,111
4,392
33.5
8,719
-15
8,734
21.4
2,504
1,137
3,641
2,808
1,141
3,949
2,962
1,136
4,098
3,374
1,172
4,546
3,168
1,073
4,241
3,356
1,118
4,474
3,554
1,170
4,724
3,728
1,207
4,935
11,648
4,586
16,234
13,806
4,569
18,374
C113
September 2013 Results Preview | Sector: Metals
Metals
Companies Covered
Ferrous
Hindalco
Steel prices flat/marginally lower in most regions, except North America
Hindustan Zinc
Average steel prices were flat/marginally negative in most regions, except North
America, where prices increased 10% QoQ. HRC prices declined QoQ in CIS (down 2%)
and Europe (down 2%), while prices in China and Turkey were flat QoQ. However, iron
ore prices showed an uptrend, increasing 6% QoQ to USD134/t, while coking coal
prices were flat QoQ at USD142/t. Indian steel prices were also weak, with prices
declining 1-3% QoQ despite depreciating rupee. However, current prices are higher
than the 2QFY14 average due to the price hike taken by producers in September.
Global steel prices were flat/marginally lower QoQ (USD/ton)

CIS
North Ameri ca
Europe RHS(Euro/ton)
Chinese steel prices were also flat QoQ (USD/ton)

HRC
710
Sep-13
Jul-13
Jun-13
Apr-13
Mar-13
Jan-13
Nov-12
Oct-12
640
Sep-11
Sep-13
Jul-13
May-13
Apr-13
500
Feb-13
410
Oct-12
500
Dec-12
570
Aug-12
460
Jun-12
600
Apr-12
510
Jan-12
700
Mar-12
560
Nov-11
800
Sep-11
Rebar
780
Jul-12
Tata Steel
Aug-12
SAIL
Apr-12
Sesa Sterlite
May-12
NMDC
Feb-12
Nalco
Dec-11
JSW Steel
Nov-11
Hindalco
Hindustan Zinc
JSPL
JSW Steel
Nalco
NMDC
SAIL
Sesa Sterlite
Tata Steel
Sector Aggregate
CMP
(INR)
27.09.13
114
131
237
732
32
126
51
183
288
(INR Million)
Rating
Sep.13
Buy
Buy
Neutral
Sell
Buy
Buy
Sell
Buy
Sell
225,222
34,041
48,919
104,363
15,184
25,103
124,425
196,875
369,030
1,143,162
Sales
Var.
% YoY
13.7
18.8
5.1
17.6
-5.6
-3.9
15.0
13.6
8.1
11.3
Var. Sep.13
% QoQ
14.0 24,017
14.1 16,796
7.7 14,486
11.5 19,414
-2.7
2,334
-12.6 15,200
21.2 15,427
38.7 71,339
12.5 36,553
16.2 215,566
EBITDA
Var.
% YoY
9.2
16.4
-14.6
27.3
LP
-21.4
39.1
16.9
58.2
17.7
Var.
% QoQ
29.0
11.7
-3.8
11.0
52.6
-20.2
59.5
22.2
-0.9
12.4
Net Profit
Var.
% YoY
8,155
-13.5
17,318
12.5
6,213
-30.8
5,605
9.6
1,692 3439.9
13,556
-19.2
9,257
85.3
24,182
6.8
3,646
LP
89,623
13.0
Sep.13
Var.
% QoQ
91.8
8.8
-10.5
19.9
6.0
-13.8
75.7
1.2
-67.5
0.2
Sanjay Jain (SanjayJain@MotilalOswal.com) / Pavas Pethia (Pavas.Pethia@MotilalOswal.com)

October 2013
C114
^ Z W ^ D
/YY^/EZ
&
&
^ Z
dDdD
^ DK^>
/YYh^
CIF
FOB
Sp ot coki n g coa l (fob Austra l i a)
160
180
140
160
120
140
100
Sep13
Jun13
Apr13
Jan13
Nov12
Sep13
Aug13
Jul13
Jun13
May13
Apr13
Mar13
Feb13
Jan13
Dec12
Dec12
Nov12
Oct12
Sep12
120
80
^ DK^>

t
/
/EZ h^ , /EZ

W
/
/
D
Z d ^
^ t
t^

E

Y&z
YY ,
K

Relative performance-3m (%)

Sens ex Index
MOSL Metal s Index
Sep-13
Aug-13
Jul-13
Jun-13
140
125
110
95
80
QoQ respectively. Base metals spot premiums have started correcting post indication
of warehousing rule changes by LME. However, INR realization of base metals will be
higher due to 11% depreciation in INR against USD. We factor aluminum, zinc and lead
prices of USD2,000/t, USD1,900/t and USD2,100/t in FY15. We believe that non-ferrous
companies are structurally better placed than steel companies in terms of demand
and pricing scenario in India. Hindalco is our top pick in the metal space.
Base metals US spot premium (USD/ton)
Alumi ni um
Zi nc
Copper
300
Relative performance-1Yr (%)
235
Sens ex Index
MOSL Meta l s Index
170
110
95
80
65
50
105
Sep-13
May-13
Jan-13
Sep-12
May-12
Jan-12
Sep-11
May-11
Jan-11
Sep-10
May-10
Jan-10
Sep-09
May-09
Jan-09
Aug-08
Apr-08
Dec-07
Aug-07
Apr-07
Sep-13
Jun-13
Mar-13
Dec-12
Sep-12
40
Base metal prices decline 8-11% QoQ (Quarterly averageUSD/ton)

Quarter
Avg.
2QFY14
1QFY14
4QFY13
3QFY13
2QFY13
1QFY13
4QFY12
3QFY12
2QFY12
1QFY12
4QFY11
3QFY11
2QFY11
1QFY11
1,858
1,840
2,032
1,946
1,885
1,927
2,024
1,897
2,223
2,249
2,393
2,315
2,012
2,017
Zinc
QoQ
(%)
1
-9
4
3
-2
-5
7
-15
-1
-6
3
15
0
-12
YoY
(%)
-1
-5
0
3
-15
-14
-15
-18
10
12
5
5
15
37
Aluminium
Avg. QoQ YoY
(%) (%)
1,780
-3
-7
1,834
-8
-7
2,002
0
-8
1,997
4
-4
1,918
-3 -20
1,978
-9 -24
2,175
4 -13
2,090 -13 -11
2,398
-8
15
2,598
4
24
2,502
7
16
2,343
12
17
2,089
0
16
2,092
-3
41
Copper
Avg. QoQ
(%)
7,069
-1
7,147 -10
7,931
0
7,908
3
7,705
-2
7,869
-5
8,308
11
7,488 -17
8,982
-2
9,137
-5
9,644
12
8,633
19
7,242
3
7,013
-3
YoY
(%)
-8
-9
-5
6
-14
-14
-14
-13
24
30
33
30
24
50
Avg.
2,102
2,053
2,301
2,198
1,974
1,973
2,093
1,982
2,458
2,550
2,603
2,389
2,031
1,943
Lead
QoQ
(%)
2
-11
5
11
0
-6
6
-19
-4
-2
9
18
5
-12
YoY
(%)
1
3
8
-1
-15
-22
-19
-10
17
21
20
20
18
61
Silver (INR/kg)
Avg. QoQ
YoY
(%)
(%)
46,040
3
-17
44,837
-20
-18
55,927
-7
1
59,949
8
11
55,755
2
-5
54,406
-2
-5
55,256
3
15
53,770
-9
35
58,791
2
96
57,430
20
101
48,008
20
82
39,929
33
46
29,948
5
28
28,557
8
30
EV/EBITDA (x)
FY13 FY14E FY15E
RoE (%)
FY13 FY14E FY15E
YoY Avg.
(%)
6 318
4 327
10 341
11 326
-20 316
-23 317
-20 317
-17 329
21 372
31 404
17 391
4 366
6 317
29 335
Alumina
QoQ
(%)
-3
-4
5
3
0
0
-4
-12
-8
4
7
15
-5
3
CMP (INR)
27.09.13
Metals
Hindalco
Hindustan Zinc
JSPL
JSW Steel
Nalco
NMDC
SAIL
Sesa Sterlite
Tata Steel
Sector Aggregate
October 2013
114
131
237
732
32
126
51
183
288
Rating
EPS (INR)
FY13 FY14E FY15E
P/E (x)
FY13 FY14E FY15E
Buy
Buy
Neutral
Sell
Buy
Buy
Sell
Buy
Sell
17.0
16.4
37.2
49.7
2.3
16.7
5.7
35.9
1.6
6.7
8.0
6.4
14.7
13.9
7.5
8.9
5.1
183.5
8.0
14.0
16.7
27.3
65.5
3.3
15.7
8.2
34.7
33.6
15.0
16.4
32.3
71.4
3.3
16.0
5.5
35.8
32.2
8.1
7.8
8.7
11.2
9.8
8.0
6.2
5.3
8.6
7.3
7.6
8.0
7.3
10.3
9.9
7.8
9.2
5.1
8.9
7.4
8.9
5.2
7.1
7.2
3.6
3.7
7.4
4.1
7.2
5.8
7.7
4.2
8.4
6.6
3.5
3.9
7.5
3.8
6.0
5.5
6.2
3.5
6.1
6.3
3.0
3.8
8.1
3.5
6.3
5.1
18.0
23.4
17.7
6.6
5.0
26.8
5.8
14.4
0.7
11.9
13.1
20.2
12.0
9.1
6.9
22.2
8.0
13.5
14.9
12.1
12.5
17.1
13.3
10.1
6.6
19.6
5.1
13.0
13.1
11.1
C116
Hindalco
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
HNDL IN
2,064.8
235 / 4
137 / 83
5 / 20 / -8

Y/E March
Sales
EBITDA
NP
Adj. EPS (INR)
EPS Gr(%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV
EV/EBITDA (x)
Div. Yield (%)
2012 2013 2014E

808.2 801.9 888.4
81.9 80.6 93.4
34.0 32.5 28.9
17.7 17.0 14.0
-2.9
-4.4 -17.4
88.3 100.7 113.2
20.3 18.0 13.1
7.3
5.8
5.6
9.9
9.7 11.7
6.4
1.3
6.9
1.3
6.7
1.1
8.7
1.2
8.1
1.0
7.7
1.2
2015E
994.7
114.9
31.0
15.0
7.1
126.5
12.5
6.8
10.9
7.6
0.9
6.2
1.2
CMP: INR114
Buy
Net sales to increase 33% QoQ: We expect net sales to increase 33%
QoQ (up 26% YoY) to INR78b due to higher realization in aluminum
segment and higher sales volumes in both aluminum and copper
segments. Aluminum sales volume is expected to increase 20% QoQ,
while copper sales volume is likely to increase 25% QoQ. 1QFY14
copper production was affected due to maintenance shutdown. HNDL's
blended realization for aluminum is likely to increase 6% QoQ to
INR164,500/ton despite decline in LME prices on account of INR
depreciation. We expect Novelis' shipments to increase 3% QoQ to
729kt, while operating margins are expected to increase 9% QoQ to
USD335/ton.
Standalone EBITDA to increase 49% QoQ: We expect standalone EBITDA
to increase 49% QoQ to INR7.1b due to higher aluminum and copper
sales volume and better aluminum realization.
Maintain Buy: Hindalco is at an inflexion point as operating cash flows
are poised for rapid growth, since benefits of USD8b investment have
begun. Margins of aluminum business should expand, driven by
declining cost of production. Novelis' free cash flows will also improve
in FY15 as it exits capex cycle. Reiterate Buy.
Mahan coal block is critical to drive profitability of its 359ktpa Mahan
smelter. The coal block has received stage I forest clearance so far.

Y/E March
Alumina (Production, kt)
Aluminium (sales, kt)
Copper (sales, kt)
Exchange USD/INR
Avg LME Aluminium (USD/T)
Net Sales
EBITDA
EBITDA - Aluminium
EBITDA-Copper
Interest
Depreciation
Other Income
PBT (before EO item)
Extra-ordinary Income
PBT (after EO item)
Total Tax
% Tax
Adjusted PAT
Novelis Shipments (kt)
Novelis adj. EBITDA (USDm)
Consolidated adj. PAT
E: MOSL Estimates
October 2013
1Q
335
124
71
54.2
1,978
60,279
4,631
3,415
1,216
815
1,705
1,714
3,826
1,300
5,126
878
23.0
2,948
722
259
7,864
(INR Million)
FY13
2Q
3Q
328
326
127
135
73
82
55.2
54.2
1,918
1,997
61,635
68,717
5,153
5,821
2,609
3,110
2,544
2,711
279
1,690
1,728
1,884
1,324
1,741
4,471
3,988
1,440
4,471
5,428
882
1,093
19.7
27.4
3,589
2,895
719
647
277
185
9,431
4,811
FY14
4Q
330
147
84
54.3
2,002
69,938
6,432
3,388
3,044
1,577
1,726
2,312
5,442
5,442
621
11.4
4,820
698
240
8,970
1Q
348
130
68
56.0
1,834
58,379
4,785
3,515
1,270
1,487
1,831
2,249
3,716
2,030
5,746
1,005
27.0
2,711
708
218
4,253
2QE
351
156
85
62.5
1,782
77,742
7,122
4,385
2,737
1,562
1,831
2,439
6,169
3QE
355
157
85
62.0
1,900
78,528
8,320
5,588
2,732
2,573
2,529
2,265
5,483
4QE
359
170
85
62.0
1,950
80,750
9,022
6,290
2,732
2,578
2,533
2,089
6,001
6,169
1,295
21.0
4,873
729
244
8,155
5,483
1,367
24.9
4,116
701
231
6,718
6,001
1,326
22.1
4,675
758
258
8,456
FY13
FY14E
1,319
532
310
54.5
1,974
260,569
22,037
12,523
9,515
4,360
7,042
7,091
17,726
2,740
20,466
3,474
17.0
14,252
2,786
961
32,485
1,413
612
323
60.6
1,867
295,399
29,249
19,778
9,471
8,199
8,724
9,042
21,368
21,368
4,994
23.4
16,374
2,896
951
28,927
C117
Hindustan Zinc
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
HZ IN
4,225.3
553 / 9
147 / 94
4 / 3 / -6

Y/E March
Sales
EBITDA
NP
Adj. EPS (INR)
EPS Gr(%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV
EV/EBITDA (x)
Div. Yield (%)
2012 2013 2014E

114.1 127.0 139.7
60.7 64.8 69.4
55.6 69.1 70.7
13.2 16.4 16.7
13.1 24.4
2.3
63.6 76.4 89.5
22.5 23.4 20.2
27.2 25.6 22.7
21.5 22.2 21.7
9.9
2.1
6.2
1.8
8.0
1.7
5.2
2.4
7.8
1.5
4.2
2.4
2015E
144.2
69.2
69.5
16.4
-1.7
102.3
17.1
19.3
22.1
8.0
1.3
3.5
2.4
CMP: INR131
Buy
Net sales to increase 14% QoQ on higher volumes: We expect net

sales to increase 14% QoQ (grow 19% YoY) to INR34b on higher sales
volume and realization. LME zinc and lead prices increased 1% and 2%
QoQ respectively, while INR depreciation against USD will further
boost prices. We expect mine metal production of 240kt, while
integrated lead/zinc production is likely to be 220kt.
EBITDA to increase 12% QoQ: We expect EBITDA to increase 12% QoQ
to INR16.8b (+16% YoY) due to higher volumes and realization.
Integrated silver production is expected to be 84 tons.
Maintain Buy: HZL has guided for 1mt of MIC production in FY14 along
with 360 tons of saleable silver. We model 978kt of MIC production
and 359 tons of integrated silver production. We expect EBITDA to
post 3% CAGR over FY13-15E on higher sales volume. The stock trades
at 8x FY15E EPS and at an EV of 3.5x FY15E EBITDA. Maintain Buy.
Management has guided for a mine production (MIC basis) of 1mt in
FY14. Increase in production from Zawar and Kayar and further rampup at SK Mines will be critical to drive overall mine production.
(INR Million)
Y/E March
Zn (000 tons)
Pb (000 tons)
Silver (tons)
Net Sales
Change (YoY %)
EBITDA
As % of Net Sales
Interest
Depreciation
Other Income
PBT (after EO item)
Total Tax
% Tax
Reported PAT
Adjusted PAT
Change (YoY %)
Avg LME Zinc (USD/T)
Avg LME Lead (USD/T)
Silver (USD/oz)
E: MOSL Estimates
October 2013
1Q
157
29
79
27,477
-3.5
14,286
52.0
129
1,734
5,743
18,166
0
18,166
2,353
13.0
15,813
15,813
5.5
1,927
1,973
28
FY13
2Q
3Q
153
168
24
22
80
62
28,655
31,780
8.7
14.0
14,431
14,940
50.4
47.0
-21
75
1,746
1,772
5,398
5,063
18,104
18,156
0
0
18,104
18,156
2,706
2,031
14.9
11.2
15,398
16,125
15,398
16,125
12.9
26.1
1,885
1,946
1,974
2,198
28
31
FY14
4Q
181
32
100
39,087
24.7
21,160
54.1
108
1,219
4,118
23,951
-175
23,776
2,117
8.9
21,658
21,818
53.7
2,032
2,301
30
1Q
173
29
86
29,842
8.6
15,031
50.4
109
1,843
5,403
18,481
795
19,275
2,671
13.9
16,605
15,920
0.7
1,840
2,053
22
2QE
188
30
84
34,041
18.8
16,796
49.3
109
1,862
5,312
20,137
0
20,137
2,819
14.0
17,318
17,318
12.5
1,860
2,105
21
3QE
200
32
92
36,436
14.6
18,047
49.5
109
1,880
4,945
21,002
0
21,002
2,940
14.0
18,062
18,062
12.0
1,900
2,100
21
4QE
220
34
97
39,392
0.8
19,493
49.5
109
1,899
5,219
22,703
0
22,703
3,178
14.0
19,525
19,525
-10.5
1,900
2,100
21
FY13
FY14E
659
107
321
126,998
11.4
64,816
51.0
291
6,470
20,322
78,377
-175
78,201
9,206
11.8
68,995
69,149
24.4
1,948
2,112
29
781
125
359
139,710
10.0
69,366
49.7
438
7,485
20,879
82,323
0
82,323
11,609
14.1
70,714
70,714
2.3
1,875
2,089
21
C118

Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
JSP IN
934.8
221 / 4
474 / 182
-7 / -37 / -51

Y/E March
Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Gr(%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV
EV/EBITDA (x)
Div. Yield (%)
2012 2013 2014E

182.1 198.1 201.8
68.9 65.7 60.3
40.6 34.8 25.6
43.4 37.2 27.3
8.1 -14.2 -26.6
193.7 227.3 227.9
25.2 17.7 12.0
17.2 12.3
9.0
3.8
4.4
7.5
5.5
1.2
5.7
0.7
6.4
1.0
7.1
0.7
2015E
273.7
81.6
30.2
32.3
18.2
256.4
13.3
10.4
6.4
8.7
1.0
8.4
0.8
7.3
0.9
6.1
0.8
CMP: INR237
Neutral
Net sales to increase marginally: We expect standalone net sales to

increase 1% YoY (up 6% QoQ) to INR36.2b on higher sales volume.
Steel sales volume would increase 3% YoY (down 1% QoQ) to 658kt.
We expect pellet sales volume to increase 21% YoY (down 4% QoQ).
Power sales are likely to grow 68% YoY (up 139% QoQ) to 919m units.
We expect standalone EBITDA to decrease 10% QoQ to INR9.4b.
Jindal Power's sales volume to decline 2% QoQ: Power sales volume
at Jindal Power is likely to decrease 2% QoQ (up 12% YoY) to 2b units,
while the average rate is likely to remain flat at INR3.2/unit. PAT would
grow 4% QoQ to INR3.4b.
Maintain Neutral: Valuations are not demanding although headwinds
still remain. Stock is trading at FY15E P/BV of 0.9x. We value the stock
at INR238 based on SOTP. Maintain Neutral.
Angul steel's melt shop is expected to be lit in August but it will take
couple of months for production to stabilize. Coal gasification and
sponge iron unit is expected to start by December 2013. Also, the CPP
at Angul will be fully commissioned in FY14. There is still no clarity on
final signing of lease for the Utkal B1 coal block due to delay from the
state government side. The coal block is critical to derive profitability
of Angul 1.6mtpa project.
(INR Million)
Y/E March
1Q
Sales volume
Steel (000 tons)
Pellets (000 tons)
CPP (M kwh)
Jindal Power (M kwh)
Net Sales
EBITDA
As % of Net Sales
Interest
Depreciation
Other Income
PBT (after EO item)
Total Tax
% Tax
Reported PAT
Adjusted PAT
JPL Power Sales (MU)
JPL PAT
Adj consol PAT
E: MOSL Estimates
October 2013
561
395
584
2,015
33,311
10,377
31.2
2,186
2,372
122
5,942
-5,741
201
76
38.1
124
4,602
2,015
3,144
9,594
FY13
2Q
639
436
547
1,746
35,890
12,607
35.1
1,779
2,489
74
8,413
0
8,413
2,591
30.8
5,822
5,822
1,746
2,603
8,973
FY14
3Q
4Q
1Q
2QE
3QE
4QE
734
623
603
1,651
38,209
12,781
33.4
2,876
2,543
39
7,401
0
7,401
2,196
29.7
5,205
5,205
1,651
2,558
8,673
909
658
517
1,999
42,137
11,363
27.0
2,369
3,081
1,358
7,271
-1,000
6,271
1,496
23.9
4,774
5,774
1,999
2,822
8,602
665
551
384
2,000
34,252
10,477
30.6
2,318
3,036
63
5,185
-2,000
3,185
796
25.0
2,389
4,389
2,000
3,217
6,943
658
527
919
1,955
36,170
9,436
26.1
2,480
3,006
85
4,035
0
4,035
1,130
28.0
2,905
2,905
1,955
3,356
6,213
705
417
924
2,016
37,162
9,638
25.9
2,755
3,226
223
3,880
0
3,880
1,086
28.0
2,794
2,794
2,016
3,491
6,343
869
517
939
2,037
42,494
10,501
24.7
3,253
3,646
1,526
5,128
0
5,128
1,436
28.0
3,692
3,692
2,037
3,537
6,071
FY13
FY14E
2,843
2,112
2,251
7,411
149,547
47,127
31.5
9,209
10,485
1,593
29,026
-6,741
22,285
6,360
28.5
15,926
21,404
7,411
11,126
33,841
2,897
3,729
3,623
7,984
150,079
40,052
26.7
10,806
12,914
1,896
18,228
-2,000
16,228
4,448
27.4
11,780
13,780
7,984
13,600
25,570
C119
JSW Steel
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
JSTL IN
241.7
177 / 3
894 / 452
32 / 4 / -7

Y/E March
2012 2013 2014E 2015E
Sales
343.7 382.1 468.7
466.9
EBITDA
61.0 65.0 85.4
88.2
Adj. PAT
14.8 11.1 15.8
17.2
Adj. EPS (INR)
66.5 49.7 65.5
71.4
EPS Gr(%)
-11.6 -25.3 31.7
9.0
BV/Sh. (INR)
738.2 764.8 679.8
738.3
RoE (%)
9.1
6.6
9.1
10.1
RoCE (%)
8.8
8.4 10.1
9.5
Payout (%)
27.1 25.9 25.5
15.8
Valuations
P/E (x)
11.0 14.7 11.2
10.3
P/BV
1.0
1.0
1.1
1.0
EV/EBITDA (x)
7.0
7.0
6.6
6.3
Div. Yield (%)
1.0
1.4
1.4
1.4
Note: JSW Ispat included in FY14 and FY15
CMP: INR732
Sell
Standalone (S/A) revenue to increase 18% YoY: We expect standalone

net sales to increase 18% YoY to INR104b due to 27% increase in
volumes on account of merger with JSW Ispat. Average steel realization
would fall 8% YoY (up 3% QoQ) to INR37,813/ton.
S/A EBITDA to increase 27% YoY: We expect JSTL's EBITDA to increase
27% YoY to INR19.4b. We expect EBITDA/ton to increase 3% QoQ to
INR7,034 (USD113).
Maintain Sell: JSW Steel has been able to sustain margins despite a
weak demand scenario. Iron ore costs have not inched up much despite
tight supply in Karnataka due to the export ban and weak demand
from secondary steel producers. However, the uncertainty still remains
over stability in steel prices and relative pricing power in weak demand
environment. Further, weaker INR/USD rate poses significant balance
sheet challenges due to ~USD3b of forex debt. The stock trades at an
expensive 10.3x FY15E EPS and an EV of 6.3x FY15E EBITDA. Sell.
Given that availability of iron ore remains critical in Karnataka, JSW's
FY14 and FY15 production guidance will be the key figure to watch
out. It is targeting to produce 11.55mt of saleable steel and 12mt of
crude steel in FY14.
JSW is investing ~INR22b in the 55mw WHRB, railway siding, lime
calcinations, 1mtpa coke oven plant and 4mtpa pellet plant for its
Dolvi units. Turnaround in profitability of Dolvi units due to plant
level integrations could provide upside to our estimates.

FY13
1Q
2Q
3Q
Sales ('000 tons)
2,109
2,170
2,170
Realization (INR per ton)
42,853
40,880
38,214
Net Sales
90,376
88,709
82,924
EBITDA
17,728
15,252
13,136
As % of Net Sales
19.6
17.2
15.8
EBITDA (INR per ton)
8,406
7,028
6,053
EBITDA (USD per ton)
155
127
112
Interest
4,067
4,208
4,546
Depreciation
4,678
4,812
4,975
Other Income
723
783
566
PBT (before EO Item)
9,706
7,015
4,181
EO Items
-5,921
4,224
-3,274
PBT (after EO Item)
3,786
11,239
907
Total Tax
1,096
3,016
-460
% Tax
28.9
26.8
-50.7
Reported PAT
2,690
8,223
1,367
Preference Dividend
70
70
70
Adjusted PAT
6,879
5,115
3,652
Consolidated adj PAT
3,997
3,393
620
E: MOSL Estimates; Note: JSW Ispat is excluded until 4QFY13
(INR Million)
Y/E March
October 2013
FY14
4Q
2,430
38,234
92,909
16,973
18.3
6,985
129
4,425
5,274
537
7,811
1,299
9,110
3,377
37.1
5,732
70
4,728
2,270
1Q
2,550
36,699
93,582
17,491
18.7
6,859
122
6,418
6,439
723
5,357
-8,529
-3,173
-965
30.4
-2,208
70
4,674
1,232
2QE
2,760
37,813
104,363
19,414
18.6
7,034
113
6,482
6,568
730
7,093
0
7,093
1,419
20.0
5,675
70
5,605
3,824
3QE
2,990
37,510
112,155
19,774
17.6
6,613
107
6,547
6,700
737
7,264
0
7,264
1,453
20.0
5,811
70
5,742
3,966
4QE
3,220
37,200
119,784
23,502
19.6
7,299
118
6,612
6,834
744
10,801
0
10,801
2,160
20.0
8,641
70
8,571
6,800
FY13
FY14E
8,879
39,973
354,918
63,088
17.8
7,105
130
17,245
19,739
2,609
28,713
-3,672
25,041
7,029
28.1
18,012
279
20,374
10,280
11,520
37,316
429,883
80,182
18.7
6,960
115
26,060
26,541
2,934
30,515
-8,529
21,986
4,067
18.5
17,919
279
24,592
15,822
C120
Nalco
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
NACL IN
2,577.2
83 / 1
52 / 24
-3 / -8 / -43

Y/E March
Sales
EBITDA
NP
Adj. EPS (INR)
EPS Gr(%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV
EV/EBITDA (x)
Div. Yield (%)
2012
66.1
11.4
8.7
3.4
-19.2
45.5
7.6
10.0
48.9
9.5
0.7
2.9
4.3
2013 2014E
69.2 67.6
9.1 11.6
5.9
8.4
2.3
3.3
-31.5 41.7
46.3 48.1
5.0
6.9
7.2
9.2
63.6 44.9
13.9
0.7
3.6
3.9
2015E
78.7
11.6
8.4
3.3
-0.2
49.9
6.6
9.1
45.0
9.8
0.7
3.5
3.9
9.9
0.6
3.0
3.9
CMP: INR32
Buy
Net sales to decrease 3% QoQ on lower volumes: We expect net sales

to decrease 3% QoQ (down 6% YoY) to INR15.2b on lower aluminum
volumes. Aluminum sales volume is likely to decline 9% QoQ to 77kt.
Aluminum production has been affected due to constraints in supply
of linkage coal from MCL and lower LME prices. Nalco is operating at
25-30% lower capacity and the trend is likely to continue due to weak
LME prices and lower linkage coal supply. Aluminum realization is
expected to increase 6% QoQ , despite weak LME, due to INR
depreciation against USD. Similarly, alumina realization is expected
to increase 4% QoQ to INR18,934/t.
EBITDA to increase 53% QoQ: We expect EBITDA to increase 53% QoQ
to INR2.3b due to higher realization in both aluminum and alumina
segments.
Power cost to remain high till Utkal coal block commissioning; Buy:
NACL has a strong balance sheet, with cash surplus of INR42b-50b post
capex. Potential upsides from the Utkal-E block, further expansion of
the alumina refinery, weakening INR and peaking of labor cost as older
employees retire over the next three to five years are long term
positives. We recently upgraded our stock rating to Buy.
Utkal coal block remains the key to company's future profitability. It
has received stage I forest clearance so far.
Progress on Panchpatmali bauxite mining lease renewal. Currently,
it is operating through a temporary one-year permit.
Status of investment in NPCIL JV. It will be investing INR8.95b for a
26% stake in the venture.

Y/E March
Aluminium Prod. ('000 tons)
Aluminium Sales ('000 tons)
Alumina Sales ('000 tons)
Avg LME Aluminium (USD/ton)
Alumina Exports (USD/ton)
Net Sales
Total Expenditure
EBITDA
As % of Net Sales
Interest
Depreciation
Other Income
PBT
Total Tax
% Tax
Reported PAT
Adjusted PAT
E: MOSL Esitmates
October 2013
1Q
103
102
253
1,978
343
17,481
14,439
3,042
17.4
32
1,224
1,403
3,190
959
30.1
2,231
2,231
(INR Million)
FY13
2Q
3Q
102
100
101
102
190
220
1,918
1,997
323
328
16,083
16,928
16,100
15,102
-16
1,827
-0.1
10.8
41
2
1,239
1,231
1,391
1,127
95
1,720
47
531
49.5
30.9
48
1,189
48
1,189
FY14
4Q
98
98
320
2,008
341
18,673
14,456
4,216
22.6
0
1,361
1,190
4,046
1,585
39.2
2,460
2,460
1Q
85
85
283
1,834
325
15,606
14,076
1,530
9.8
0
1,245
1,787
2,072
476
23.0
1,597
1,597
2QE
77
77
284
1,782
303
15,184
12,850
2,334
15.4
0
1,251
1,405
2,488
796
32.0
1,692
1,692
3QE
84
84
329
1,900
323
17,988
14,441
3,547
19.7
0
1,257
1,138
3,428
1,097
32.0
2,331
2,331
4QE
83
83
356
1,950
332
18,799
14,649
4,151
22.1
0
1,263
1,202
4,089
1,308
32.0
2,780
2,780
FY13
FY14E
403
403
983
1,975
334
69,165
60,096
9,069
13.1
75
5,054
5,111
9,050
3,122
34.5
5,928
5,928
328
328
1,251
1,867
321
67,577
56,015
11,562
17.1
0
5,016
5,532
12,077
3,677
30.4
8,400
8,400
C121
NMDC
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
NMDC IN
3,964.7
499 / 8
200 / 93
2 / -13 / -40

Y/E March
Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Gr(%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV
EV/EBITDA (x)
Div. Yield (%)
2012 2013 2014E

112.6 107.0 115.0
89.3 77.8 72.8
73.0 66.3 62.2
18.4 16.7 15.7
12.3
-9.2
-6.1
61.6 69.4 76.9
31.6 26.8 22.2
31.5 26.7 22.1
26.3 51.1 52.2
6.8
2.0
3.3
3.6
7.5
1.8
3.7
5.6
2015E
119.9
74.0
63.6
16.0
2.1
84.8
19.6
19.6
51.1
8.0
1.6
3.9
5.6
7.8
1.5
3.8
5.6
CMP: INR126
Buy
Iron ore sales to decrease 4% YoY: We expect standalone net sales to

decrease 4% YoY (down 13% QoQ) to INR25.1b due to lower realization,
despite higher iron ore sales volume. We expect iron ore sales volume
to increase 6% YoY (down 15% QoQ) to 6.2mt in a seasonally weak
quarter. Iron ore realization is likely to decrease 10% QoQ to INR3,379/
ton due to price correction taken by NMDC in July and August. Lumps
percentage is expected to be 36% in 2QFY14.
EBITDA to decline 20% QoQ: We expect EBITDA to decrease 20% QoQ
to INR15.2b due to lower realization and volumes in a seasonally weak
quarter.
Sales volume to post CAGR of 10% over FY13-15E: We continue to
believe that iron ore supply is getting tighter in India, which will
improve the pricing power for iron ore fines. We expect NMDC to
deliver ~10% volume CAGR during FY13-15E. NMDC trades at 1.5x FY15E
BV and at an EV of 3.8x FY15E EBITDA. With 70% of the book in cash and
dividend yield of 5.6%, valuations are compelling. Reiterate Buy.
NMDC's internal target of iron ore sales volume for FY14 is 30-32mt,
which is ~10% ahead of our estimates.

Y/E March
Production (m tons)
Sales (m tons)
Avg Iron ore realization (USD/t)
Avg Iron ore realization (INR/t)
Lumps (%)
Net Sales
Change (YoY %)
EBITDA
Change (YoY %)
As % of Net Sales
EBITDA per ton (USD)
EBITDA per ton (INR/t)
Interest
Depreciation
Other Income
PBT (before EO Item)
PBT (after EO Item)
Total Tax
% Tax
Reported PAT
Adjusted PAT
Change (QoQ %)
Change (YoY %)
E: MOSL Esitmates
October 2013
(INR Million)
1Q
6.9
6.9
76
4,102
37
28,404
2.1
23,020
2.1
81.0
62
3,358
0
328
5,521
28,214
FY13
2Q
3Q
5.4
5.4
5.9
5.3
80
70
4,130
3,630
39
36
26,120
20,477
-14.7
-27.4
19,349
13,913
-20.6
-38.5
74.1
67.9
60
48
3,305
2,612
0
0
332
339
5,831
5,563
24,848
19,137
28,214
9,154
32.4
19,060
19,060
13.7
5.8
24,848
8,062
32.4
16,786
16,786
-11.9
-14.5
19,137
6,209
32.4
12,928
12,928
-23.0
-30.5
FY14
4Q
9.6
8.2
71
3,680
34
32,043
23.5
21,556
9.0
67.3
48
2,616
132
387
5,474
26,511
-4,058
22,453
7,804
34.8
14,650
17,297
33.8
3.2
1Q
6.9
7.3
70
3,735
37
28,706
1.1
19,052
-17.2
66.4
47
2,627
0
364
5,209
23,897
2QE
6.2
6.2
65
3,379
36
25,103
-3.9
15,200
-21.4
60.6
39
2,452
0
373
5,107
19,935
3QE
7.6
7.6
63
3,379
36
29,443
43.8
18,800
35.1
63.9
40
2,477
0
382
5,249
23,667
4QE
8.3
8.3
62
3,379
36
31,760
-0.9
19,755
-8.4
62.2
39
2,395
0
391
5,440
24,804
23,897
8,176
34.2
15,722
15,722
-9.1
-17.5
19,935
6,379
32.0
13,556
13,556
-13.8
-19.2
23,667
7,573
32.0
16,094
16,094
18.7
24.5
24,804
7,937
32.0
16,866
16,866
4.8
-2.5
FY13
FY14E
27.2
26.3
75
3,880
36
107,043
-4.9
77,838
-12.8
72.7
54
2,963
0
1,385
22,389
98,841
-4,058
94,783
31,228
32.9
63,556
66,277
29.0
29.3
65
3,467
36
115,012
7.4
72,807
-6.5
63.3
41
2,486
0
1,509
21,005
92,303
0
92,303
30,065
32.6
62,238
62,238
0.6
-6.1
-9.2
C122
Sesa Sterlite
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
SSLT IN
2,964.8
542 / 9
205 / 119
-1 / 13 / 1

Y/E March
2012 2013 2014E 2015E
Sales
683.7 711.9 749.6
841.2
EBITDA*
181.3 170.6 191.0
206.6
NP
102.2 106.5 102.8
106.1
Adj. EPS (INR)
34.5 35.9 34.7
35.8
EPS Gr(%)
-29.1 15.8
0.5
-0.3
BV/Sh. (INR)
38.0 77.7 88.5
115.3
RoE (%)
16.4 14.4 13.5
13.0
RoCE (%)
25.2 22.3 13.2
12.9
Payout (%)
11.9 11.4 11.8
11.4
Valuations
P/E (x)
5.3
5.1
5.3
5.1
P/BV
0.7
0.7
0.7
0.6
EV/EBITDA (x)
5.3
6.1
5.6
4.9
Div. Yield (%)
1.9
1.9
1.9
1.9
Note: Sesa-Sterlite merged entity basis;
* attributable
CMP: INR183
Buy
Net sales to increase 39% QoQ: We expect consolidated net sales to

increase 39% QoQ due to resumption of copper refining operations at
Tuticorin smelter and higher realization in zinc/lead business.
EBITDA to increase 22% QoQ: We expect consolidated EBITDA to
increase 22% QoQ to INR71.4b. Adj. PAT is likely to increase just 1%
QoQ to INR24.2b due to higher tax rate, compared to earlier quarters.
Maintain Buy: Assuming LME price of USD2,000/ton for aluminum,
SD1,900/ton for zinc and USD2,100/ton for lead in FY15E, our SOTPbased valuation works out to INR213/share. Currently, the INR/USD
rate is higher than our assumption of 60 for FY15E. While a weaker INR
results in ballooning of forex debt, there is greater gain in EBITDA for
the oil and zinc-lead-silver businesses. We maintain a Buy.
Specific capex for Liberia is estimated at USD80-90/t of capacity, while
it is targeting to end FY14 with 2mtpa. However, given constraints in
cash flows post mining ban, it will be raising external funds for the
project.
It is widely believed that the Indian Government needs to urgently
divest in HZ and Balco so that the much-needed funds can be raised
to partially bridge the fiscal deficit and meet divestment targets. We
believe delisting HZ and merging it with Sesa-Sterlite is perhaps the
best option in terms of capital efficiency HZ's cash will become
fungible and available for servicing CAIR's acquisition debt.
(INR Million)
Y/E March
FY13
FY14
FY13
FY14E
1Q
2Q
3Q
4Q
1Q
2QE
3QE
4QE
Net Sales
183,529 173,381 171,000 183,943 141,909 196,875 203,110 207,683 711,852 749,577
EBITDA
66,457
61,050
57,349
65,016
58,385
71,339
73,149
76,864 249,872 279,738
As % of Net Sales
36.2
35.2
33.5
35.3
41.1
36.2
36.0
37.0
35.1
37.3
Interest
4,002
19,550
9,795
13,272
10,721
13,377
17,650
17,869
46,620
59,617
Depreciation
12,104
12,206
12,644
16,054
14,710
15,968
16,474
17,937
53,008
65,088
Other Income
7,961
11,129
12,442
7,980
12,373
7,959
12,799
9,923
39,511
43,054
PBT (before XO item)
58,312
40,423
47,352
43,670
45,328
49,953
51,825
50,981 189,756 198,086
Extra-ordinary gain (loss)
0
0
1,888
0
0
0
0
0
1,888
0
PBT (after XO item)
58,312
40,423
49,240
43,670
45,328
49,953
51,825
50,981 191,644 198,086
Total Tax
2,956
2,736
1,687
2,032
2,310
4,678
4,752
4,379
9,412
16,118
% Tax
5.1
6.8
3.4
4.7
5.1
9.4
9.2
8.6
4.9
8.1
Reported PAT
55,355
37,687
47,553
41,637
43,018
45,275
47,073
46,602 182,232 181,968
Less: Minority int.
21,365
15,040
18,723
18,290
19,124
21,093
19,482
19,514
73,417
79,212
Adjusted PAT
33,990
22,647
28,830
23,348
23,894
24,182
27,591
27,088 106,458 102,756
E: MOSL Estimates; * Please note that these consolidated numbers, including previous quarters, are on best effort basis estimates.
Numbers may differ from actuals due to complexity post Sesa-Sterlite merger.
October 2013
C123
Steel Authority of India

Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
SAIL IN
4,130.4
211 / 3
102 / 38
4 / -23 / -47

Y/E March
Sales
EBITDA
NP
Adj. EPS (INR)
EPS Gr(%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV
EV/EBITDA (x)
Div. Yield (%)
2012 2013 2014E

466.6 449.3 481.5
64.0 50.5 61.7
37.7 23.7 34.0
9.1
5.7
8.2
-23.5 -37.1 43.4
97.5 100.5 106.3
9.7
5.8
8.0
10.6
7.1
7.0
26.9 43.5 29.0
5.6
0.5
5.0
3.9
8.9
0.5
7.4
3.9
6.2
0.5
7.5
3.9
2015E
501.4
62.1
22.9
5.5
-32.7
110.6
5.1
5.3
21.1
9.2
0.5
8.1
2.0
CMP: INR51
Sell
Net sales to increase 15% YoY due to higher volumes: We expect net
sales to increase 15% YoY (up 21% QoQ) to INR124b due to higher sales
volumes. SAIL has already achieved 2.2mt of sales in the first two
months of 2QFY14. We expect sales volumes to increase 22% YoY to
3.2mt. Realization is expected to remain flat QoQ (decline 5% YoY) to
INR39,375/ton.
Margins to improve 18% QoQ to USD78/ton: We expect EBITDA/ton to
increase 18% QoQ to USD78/ton due to higher operating leverage on
higher sales volume. Other income would fall by 28% QoQ to INR1.6b
as more cash will be deployed to support capex.
INR720b capex benefits to accrue slowly; maintain Sell: We expect
earnings to decline at 2% per annum over FY13-15E, despite 9% CAGR
in volumes, due to SAIL's uncompetitive cost structure, execution
delays, decline in steel realization and poor operating efficiencies.
The full benefits of INR720b capex will accrue gradually due to poor
execution. The stock still appears expensive at 9.2x FY15E EPS and an
EV of 8.1x FY15E EBITDA. Maintain Sell.
BOF commissioning at ISP and RSP will be critical for volume ramp-up
in FY14 and FY15.

Y/E March
Sales (m tons)
Change (YoY %)
Realization (INR per ton)
Change (YoY %)
Net Sales
Change (%)
EBITDA
Change (YoY %)
EBITDA per ton (INR)
EBITDA per ton (USD)
Interest
Depreciation
Other Income
PBT (after EO Inc.)
Total Tax
% Tax
Reported PAT
Adjusted PAT
Change (YoY %)
E: MOSL Estimates
October 2013
1Q
2.5
-9.1
43,110
5.9
107,775
-3.7
15,153
15.5
6,061
112
1,249
4,018
2,785
10,101
3,137
31.1
6,964
8,485
1.2
(INR Million)
FY13
2Q
3Q
2.6
2.8
-8.8
5.8
41,616
38,800
5.9
-8.7
108,202 106,701
-3.4
-3.4
11,093
11,384
-16.4
-28.0
4,267
4,140
77
76
1,862
2,220
4,026
4,049
2,255
2,209
7,879
7,016
2,448
2,173
31.1
31.0
5,431
4,843
4,996
4,904
-50.2
-55.4
FY14
4Q
3.2
38,533
-9.9
123,304
-9.9
9,039
-51.7
2,825
52
2,145
1,838
2,178
7,398
2,944
39.8
4,454
4,844
-43.2
1Q
2.6
4.8
39,190
-9.1
102,679
-4.7
9,673
-36.2
3,692
66
1,918
3,929
2,262
5,209
700
13.4
4,509
5,270
-37.9
2QE
3.2
21.5
39,375
-5.4
124,425
15.0
15,427
39.1
4,882
78
2,149
4,265
1,628
10,640
1,383
13.0
9,257
9,257
85.3
3QE
3.0
9.1
39,060
0.7
117,180
9.8
14,324
25.8
4,775
77
2,249
4,350
1,561
9,286
1,207
13.0
8,079
8,079
64.7
4QE
3.5
7.8
38,750
0.6
133,688
8.4
18,155
100.9
5,262
85
2,492
4,652
1,498
12,509
1,626
13.0
10,883
10,883
124.7
FY13
FY14E
11.1
-3.1
40,360
-2.4
445,983
-5.4
46,669
-23.4
4,223
78
7,476
13,932
9,426
32,394
10,701
33.0
21,693
23,228
-37.5
12.2
10.7
39,082
-3.2
477,972
7.2
57,579
23.4
4,708
78
8,809
17,196
6,948
37,644
4,916
13.1
32,727
33,491
44.2
C124
Tata Steel
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
TATA IN
971.4
280 / 4
448 / 195
-4 / -13 / -33

Y/E March
Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Gr(%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV
EV/EBITDA (x)
Div. Yield (%)
2012 2013 2014E

1,329 1,347 1,470
124.2 123.2 163.7
18.1
1.5 32.6
18.6
1.6 33.6
-70.1 -91.62,041.7
260.2 217.3 233.8
7.9
0.7 14.9
9.2
6.6
9.3
27.6 -12.3 26.7
15.5 183.5
1.1
1.3
6.5
7.2
4.2
2.8
8.6
1.2
6.0
2.8
2015E
1,473
164.2
31.2
32.2
-4.3
256.3
13.1
8.8
27.8
8.9
1.1
6.3
2.8
CMP: INR288
Sell
Tata Steel India (TSI): We expect net revenue to increase 12% YoY (up
9% QoQ) to INR103b due to higher sales volume. Steel volumes are
expected to increase 20% YoY (down 4% QoQ) to 2.1mt. Realization is
expected to increase 1% QoQ (decline 6% YoY). We expect EBITDA to
increase 15% QoQ to INR33b and EBITDA/ton to increase 10% QoQ to
USD236/ton.
TSE and others: We expect Tata Steel Europe (TSE) and other
subsidiaries to report EBITDA/ton of USD15 in a seasonally weak
quarter. We expect steel shipments to decrease 5% YoY (up 2% QoQ)
to 4.1mt.
Steel environment challenging, price outlook negative; maintain Sell:
We expect steel environment to remain challenging due to a weak
demand scenario. We expect TSI margins to suppress further as lower
iron ore prices will eat away certain captive iron benefits. TSE's capex
program, despite insufficient cash flows, will be an additional
overhang on the stock. The stock trades at 8.9x FY15E EPS and an EV of
6.3x FY15E EBITDA. Maintain Sell.
Funding of TSE modernization and upgradation program, as TSE's cash
flows are insufficient to support its capex.

Y/E March
(INR Million)
FY13
2Q
3Q
1,730
1,890
5.0
16.5
48,459
45,314
91,506
93,703
25,162
25,262
27.5
27.0
14,545
13,366
246
232
4,539
5,090
3,913
4,339
2,397
357
19,203
16,190
5,695
5,726
29.7
35.4
13,508
10,464
13,412
10,464
4Q
2,279
28.9
44,394
107,705
33,040
30.7
14,498
263
4,594
4,608
4,747
21,744
8,652
39.8
13,092
19,933
1Q
2,005
26.1
44,719
94,554
28,343
30.0
14,136
245
4,664
4,596
1,442
20,525
6,964
33.9
13,561
13,561
2QE
2,080
20.2
45,313
102,842
32,607
31.7
15,676
236
4,804
4,642
2,409
25,570
8,438
33.0
17,132
17,132
3QE
2,200
16.4
44,950
107,496
34,853
32.4
15,842
242
4,948
4,688
359
25,575
8,440
33.0
17,135
17,135
4QE
2,315
1.6
44,640
109,999
32,998
30.0
14,254
220
5,097
4,735
4,771
27,937
9,219
33.0
18,718
18,718
321,071
22,389
-7,886
-7,433
3,020
-26
346,505
43,689
-66,775
8,843
3,420
33
328,048
36,880
11,423
11,213
3,140
44
369,030
36,553
3,493
3,646
3,213
17
383,212
44,590
10,082
10,175
3,417
40
389,668 1,347,115 1,469,958

45,695 123,212 163,718
9,292 -73,624
34,114
9,407
3,323
34,441
3,488
13,070
13,258
51
11
38
1Q
Sales ('000 tons)
1,590
Change (YoY %)
-0.2
Avg Seg.Realn. (INR/tss)
51,530
Net Sales
89,080
EBITDA
29,768
(% of Net Sales)
33.4
Steel EBITDA(INR/tss)
18,722
Steel EBITDA(USD/tss)
326
Interest
4,544
Depreciation
3,544
Other Income
1,519
PBT (after EO Inc.)
21,229
Total Tax
7,663
% Tax
36.1
Reported PAT
13,566
Adjusted PAT
15,536
Consolidated Financials
Net Sales
338,212 341,327
EBITDA
36,003
23,101
Rep. PAT (before MI & asso.)
5,170
-4,133
Adj. PAT (after MI & asso)
7,949
-4,066
TSE Sales (000 tons)
3,210
3,420
TSE EBITDA(USD/tss)
36
-2
E: MOSL Estimates; tss=ton of steel sales
October 2013
FY14
FY13
FY14E
7,489
12.9
47,081
381,994
113,232
29.6
15,120
263
18,768
16,404
9,020
78,366
27,736
35.4
50,630
59,345
8,600
14.8
44,900
414,891
128,801
31.0
14,977
235
19,514
18,661
8,981
99,607
33,061
33.2
66,546
66,546
C125
September 2013 Results Preview | Sector: Oil & Gas
Oil & Gas

Companies Covered
BPCL
Cairn India
GAIL
HPCL
IOC
Indraprastha Gas
MRPL
INR depreciation to partly compensate for 15% QoQ fall in GRM; crude rises 7% QoQ:
Strong crude prices in 2QFY14 (Brent average at USD110/bbl; +7% QoQ, flat YoY), led
by geo-political concerns in Syria and INR depreciation (average at INR62.5/USD, +12%
YoY and QoQ) will benefit oil producers. Refinery margins will be under pressure,
with Reuters Singapore GRM falling 15% QoQ to USD5.5/bbl, primarily driven by lower
gasoline cracks (end of driving season in US and Europe) and lower fuel oil cracks.
Petchem spreads recover QoQ: Simple spreads over naphtha improved 4.9% and 8.7%
QoQ for PE and PP, but decreased by a marginal 1.3% QoQ for PVC. However, led by
higher international prices and steep INR depreciation, the domestic premium to
international prices reduced significantly in 2QFY14. During the quarter, polymer
producers (RIL and GAIL) also benefitted from full impact of increase in polymer
customs duty from 5% to 7.5% in May 2013.
Oil India
ONGC
Petronet LNG
Reliance Industries
Higher crude prices coupled with significant INR depreciation led to QoQ increase in
under-recoveries: We estimate 42% QoQ increase in under-recoveries to INR362b,
led by almost doubling of diesel losses. We model upstream sharing similar to 1QFY14
(subsidy at USD56/bbl) and expect the government to compensate INR200b in 2QFY14.
However, on the back of higher retail selling prices for diesel and capping of LPG
cylinders, the YoY growth softened (2% YTD for diesel and -3% YTD for LPG) and provided
some respite to ballooning under-recoveries. For FY14/FY15, we model upstream
sharing at INR700b/650b, downstream sharing at nil, and balance by the government.
Valuation and view: In event of likely deregulation over coming years, we prefer
ONGC/OINL in upstream (significant earnings growth opportunity) and BPCL in OMC's
(relatively strong balance sheet and E&P potential). Maintain Neutral on Gail India
due to headwinds for gas availability, however believe PLNG is available at attractive
valuation given its medium term earnings potential. Maintain Buy on Cairn India for
its attractive valuation and Neutral on RIL as the next earnings growth is still some
time away when its new core-business/E&P projects commission from FY16/FY17.

CMP
Rating
(INR)
27.09.13
BPCL
329
Cairn India
318
GAIL
326
52
HPCL
190
IOC
211
Indraprastha Gas
276
MRPL
33
Oil India
454
ONGC
275
Petronet LNG
123
Reliance Inds.
840
Sector Aggregate
Excl. RMs
Sales
Sep.13
Buy
628,031
Buy
50,949
Neutral
131,709
Neutral
2,810
Buy
596,881
Buy
1,215,928
Neutral
10,041
Neutral
188,626
Buy
25,526
Buy
229,313
Buy
104,000
Neutral 1,014,562
4,198,376
1,757,536
Var.
% YoY
10.5
14.7
15.9
2.9
23.2
14.9
17.5
15.7
6.3
15.9
37.8
12.3
15.2
14.6
EBITDA
Var. Sep.13
% QoQ
7.0 12,470
25.4 39,607
2.5 15,223
-5.1
2,538
15.3 13,266
10.3 30,304
11.4
1,821
23.6
2,902
28.9 11,633
19.3 123,784
23.2
3,894
15.8 74,174
13.1 331,616
16.6 275,575
Var.
% YoY
-70.3
14.8
10.3
0.7
-41.0
-66.6
-11.6
-74.9
1.4
20.5
-24.9
-3.7
-20.3
5.6
(INR Million)
Net Profit
Var. Sep.13
% QoQ
37.7
3,743
31.6 34,775
4.0
8,931
-5.7
1,268
LP
4,443
LP 18,020
-5.4
807
72.5
-2,185
66.9
9,339
47.4 62,053
-2.1
1,988
4.8 53,395
61.8 196,577
27.2 170,372
Var.
% YoY
-92.6
49.8
-9.4
-4.5
-80.9
-81.3
-18.7
PL
-2.2
5.2
-36.8
-0.7
-42.6
-1.3
Var.
% QoQ
149.0
11.2
10.5
0.4
LP
LP
-7.6
Loss
53.3
54.5
-11.8
-0.2
107.1
22.6
Harshad Borawake (HarshadBorawake@MotilalOswal.com)/Kunal Gupta(Kunal.Gupta@MotilalOswal.com)

October 2013
C126
GRM down 15% QoQ; crude up 7% QoQ; Arab L-H spread increases QoQ
Crude price was up 7% QoQ at USD110/bbl
Brent-WTI s pread halved QoQ to USD4/bbl in 2QFY14
Brent cru de (month ly a ve rage )

Brent cru de (q uarterl y avera ge)
10
150
120
-10
90
-20
60
-30
30
-40
S ep-07 Se p-08 S ep-09 S ep-10 Se p-11 S ep-12 S ep-13
S ep-07 S ep-08 S ep-09 S ep-10 Se p-11 Se p-12 Se p-13
Singapore GRM was down 15% QoQ to USD5.5/bbl in 2QFY14
Gasoline and FO cracks meaningfully down QoQ (USD/bbl)
Si ngapo re GRM (Monthl y Avg)

Si ngapo re GRM (Qtr Avg)
2QFY13
3QFY13
4QFY13
1QFY14
2QFY14
12
30
9
18.9
9.7
16.6
-35.6
Fuel Oil
Se p-07 Sep-08 Sep-09 Sep-10 Se p-11 Sep-12 Se p-13
Naphtha
Jet/Kero
-45
-10.0
Di esel
-5.8
LPG
-20
Gasoline
Arab L-H differential higher QoQ in 2QFY14 (USD/bbl)

Arab L-H (month l y average)
Arab L-H (quarterl y a ve rage )
Our key assumptions

Our crude price assumptions f or FY14/15/long-term ar e
USD108.5/105/100/bbl.
12
10
8
6
We expect regional benchmark Singapore Reuters GRM

to remain in the USD7-9/bbl range for the near term.
We model Singapore GRM a t USD6.5/bbl in FY14.
4
2
2.6
0
Sep-07 Sep-08 Sep -09 Sep-10 Sep-11 Sep-12 Sep -13
Source: Reuters, Bloomberg, MOSL
PV C
POY
October 2013
PSF
75
65
55
2QFY14
1QFY14
4QFY13
2QFY13
1QFY13
45
4QFY12
2QFY14
0
1QFY14
20
4QFY13
5
3QFY13
30
2QFY13
10
1QFY13
40
4QFY12
15
3QFY12
50
2QFY12
20
3QFY12
PP
60
2QFY12
PE
POY/PSF spreads also improved QoQ (INR/kg)
3QFY13
Polymer spreads increased QoQ in 2QFY14 (INR/kg)
C127
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ONGC's net realization estimated at USD48/bbl
102.9
FY14
FY11
FY12
FY13
2QE
1Q
4Q
3Q
2Q
1Q
4Q
3Q
2Q
1Q
4Q
3Q
2Q
1Q
51
4Q
FY13
63
48
3Q
FY12
40
47
2Q
FY11
Ga s - Tra ns mi ss ion (mms cmd)

116 115 120 120 117 119 119 116 110
106 105 99 99 99
1Q
63
47
1Q
114.0
62
44
4Q
110.2
63
45
3Q
109.9
63
83
2Q
109.9
121.6
77
48
1Q
111.5
33
70
39
4Q
67
73
24
65
3Q
115.9
79.2
63 16
2Q
121.3
Gross Rea li za tion
80.8
108.9
Subs idy Burden
1Q 48 33
89.1
Net Rea li za tion
GAIL transmission volumes under pressure (mmscmd)
FY14
Expect RIL premium to Singapore GRM at USD2.3/bbl

Premium/ (di scount)
Singapore GRM
Cairn's Rajasthan production likely to average 180kbpd

RIL
Ra jas tha n Gros s Prodn (kbpd)

180
167 172 170 169 173
20
14
116 125 118 125 125 125
138
8
45
2
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
4
FY08
FY09
FY10
FY11
FY12
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2QE
FY13 FY14
FY11
FY12
FY13
FY14
CMP (INR)
27.09.13
Oil & Gas
BPCL
Cairn India
GAIL
Guj. State Petronet
HPCL
Indraprastha Gas
IOC
MRPL
Oil India
ONGC
Petronet LNG
Reliance Inds.
Sector Aggregate
Ex RMS
October 2013
329
318
326
52
190
276
211
33
454
275
123
840
Rating
EPS (INR)
FY13 FY14E FY15E
P/E (x)
FY13 FY14E FY15E
EV/EBITDA (x)
FY13 FY14E FY15E
RoE (%)
FY13 FY14E FY15E
Buy
Buy
Neutral
Neutral
Buy
Neutral
Buy
Neutral
Buy
Buy
Buy
Neutral
26.0
63.1
31.7
9.6
26.7
25.3
18.3
-4.3
59.7
28.3
15.3
71.9
12.6
5.0
10.3
5.4
7.1
10.9
11.5
-7.7
7.6
9.7
8.0
11.7
10.3
10.2
7.6
3.3
8.0
3.6
9.9
5.5
10.3
14.4
3.8
3.8
5.8
8.5
6.2
5.5
11.5
24.8
17.5
19.9
6.7
26.0
7.2
-11.1
19.4
16.8
28.8
12.3
13.4
14.6
28.2
65.6
28.9
9.0
16.3
26.4
19.5
1.3
60.1
28.9
10.6
74.0
34.8
55.2
28.8
9.2
26.3
31.6
28.0
6.8
68.9
36.7
12.9
80.6
11.7
4.8
11.3
5.7
11.7
10.4
10.9
25.9
7.6
9.5
11.6
11.4
9.8
9.7
9.4
5.8
11.3
5.6
7.2
8.7
7.5
4.9
6.6
7.5
9.5
10.4
8.5
8.6
7.2
2.5
8.8
3.0
9.8
5.0
10.7
6.2
3.6
3.5
6.6
8.9
5.8
5.2
6.4
2.5
7.8
3.0
8.0
4.0
6.7
3.5
2.9
2.8
5.7
8.0
4.8
4.4
11.6
23.8
14.4
16.1
4.0
22.6
7.3
3.4
17.8
15.6
16.7
11.5
12.8
13.9
13.2
17.2
13.1
14.4
6.2
22.7
9.9
16.9
18.2
17.8
17.7
11.4
13.4
14.1
C129
BPCL
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
BPCL IN
723.0
238 / 4
449 / 256
3 / -18 / -11

Y/E March
2012 2013 2014E
Sales
2,121 2,422 2,669
EBITDA
48
67
67
Adj. PAT
8
19
20
Adj. EPS (INR)
10.8 26.0 28.2
EPS Gr. (%)
-52.2 140.9
8.2
BV/Sh.(INR)
220
233
252
RoE (%)
5.0 11.5 11.6
RoCE (%)
5.2
8.9
8.9
Payout* (%)
35.5 35.2 35.2
Valuations
P/E (x)
30.5 12.6 11.7
P/BV (x)
1.5
1.4
1.3
EV/EBITDA (x)
11.3
7.6
7.2
Div. Yield (%)
1.7
3.3
2.3
*Based on standalone
2015E
2,694
67
25
34.8
23.5
276
13.2
8.8
35.3
9.5
1.2
6.5
2.9
CMP: INR329
Buy
As in earlier quarters, profitability of OMCs (BPCL, HPCL, IOCL) would

depend more on subsidy sharing, which is ad-hoc, than on business
fundamentals. Government subsidy compensation typically comes
with a delay.
2QFY14 gross under-recoveries are up 42% QoQ due to the impact of

INR depreciation and increase in crude price.
For FY14/FY15, we model OMCs' subsidy sharing at nil and upstream

sharing at INR700b/650b, with the government sharing the balance.
We peg refinery throughput at 5.9mmt for 2QFY14 v/s 5.9mmt in

2QFY13 and 5.6mmt in 1QFY14.
We expect BPCL to report PAT of INR3.7b, led by our assumption of

INR200b subsidy sharing by the government in 2QFY14.
BPCL trades at 9.5x FY15E EPS and 1.2x FY15E BV. E&P upsides from
Mozambique and Brazil are the key medium-term triggers. Buy.

(a) subsidy sharing, and
(b) GRM.
(INR Million)
Y/E March
Net Sales
Change (%)
EBITDA
% of Sales
Depreciation
Interest
Other Income
PBT
Tax
Tax rate (%)
PAT
Change (%)
Adj. PAT
Adj. EPS
Key Assumption (INR b)
Gross under recovery
Upstream sharing
Govt. sharing
Net Under/(Over) recovery
As a % of Gross
E: MOSL Estimates
October 2013
FY13
FY14
FY13
1Q
545,227
18.2
-81,757
-15.0
4,801
5,205
3,395
-88,368
0
0.0
-88,368
nm
-88,368
-122.2
2Q
568,595
34.5
41,932
7.4
3,983
4,117
16,516
50,348
0
0.0
50,348
nm
50,348
69.6
3Q
623,398
6.0
22,584
3.6
4,657
5,758
4,307
16,476
0
0.0
16,476
-47.5
16,476
22.8
4Q
662,820
2.5
65,527
9.9
5,820
3,172
5,366
61,901
13,928
22.5
47,973
21.1
47,973
66.4
1Q
587,053
7.7
9,054
1.5
5,305
5,253
3,695
2,191
688
31.4
1,503
nm
1,503
2.1
2QE
628,031
10.5
12,470
2.0
5,300
5,008
3,778
5,940
2,197
37.0
3,743
-92.6
3,743
5.2
3QE
676,743
8.6
13,251
2.0
5,350
4,894
3,778
6,785
2,510
37.0
4,275
-74.1
4,275
5.9
116
37
0
80
68.5
90
36
72
-18
nm
94
36
60
-2
nm
90
60
87
-57
nm
61
37
19
5
8.9
89
42
49
-2
nm
96
42
53
1
0.9
FY14E
4QE
635,631 2,400,041 2,527,457
-4.1
13.3
5.3
17,842
48,287
52,617
2.8
2.0
2.1
5,448
19,261
21,403
4,811
18,252
19,966
4,005
29,583
15,256
11,588
40,357
26,504
3,614
13,928
9,009
31.2
34.5
34.0
7,974
26,429
17,495
-83.4
101.6
-33.8
7,974
26,429
17,495
11.0
36.6
24.2
87
48
43
-4
nm
390
168
219
2
0.6
333
169
164
0
0.1
C130
Cairn India
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
CAIR IN
1,910.2
607 / 10
350 / 268
-7 / 12 / -9

Y/E March
Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh.(INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
CMP: INR318
2012 2013 2014E

131.1 175.2 191.5
108.1 134.9 145.7
92.9 119.2 125.3
41.6 63.1 65.6
46.7 51.7
3.9
253
250
302
21.0 24.8 23.8
20.3 24.5 23.2
0.0 21.6 23.4
2015E
181.5
130.9
105.4
55.2
-15.9
342
17.2
19.0
23.4
7.6
1.3
4.9
NA
5.0
1.3
3.4
3.6
4.8
1.1
2.5
4.1
5.8
0.9
2.5
3.5
Buy
We expect Cairn India's 2QFY14 Rajasthan production to increase to

180kbpd from 173kbpd in 1QFY14, primarily led by ramp-up in
production at Aishwariya and Bhagyam fields and total net sales of
126kboepd (v/s 120kboepd in 2QFY13 and 121kboepd in 1QFY14).
Net sales would be INR51b (v/s INR41b in 1QFY14), led by increase in
average production at its Rajasthan block and INR depreciation. We
estimate EBITDA at INR39.6b v/s INR34.5b in 2QFY13 and INR30.1b in
1QFY14.
Other income is likely to increase, led by higher cash balance. We
estimate forex gain of INR4b v/s gain of INR6.8b in 1QFY14 due to ~4%
INR depreciation during the quarter (INR/USD on 30 September 2013
as compared to 30 June 2013).
We model Brent crude price of USD108.5/105/100/bbl for FY14/15/longterm, and take a quality discount of 9% for Cairn India.
Key operational factors to watch in the medium-term would be: (a)
production ramp-up and (b) reserve updates, with ongoing 100-well
exploration program at Rajasthan. With increasing cash balance on
the balance sheet, clarity on its utilization will be positive.
The stock currently trades at 5.8x FY15E EPS of INR55.2. Maintain Buy.

(a) net realization, and (b) forex fluctuations.
(INR Million)
Y/E March
FY13
1Q
44,400
19.6
34,921
352
4,373
295
964
8,663
39,528
1,271
4.1
38,257
40.3
3Q
Net Sales
42,776
Change (%)
38.1
EBITDA
32,862
Exploration w/off
277
D,D&A
4,824
Interest
52
Other Income (Net)
1,819
Forex Fluctuations
2,357
PBT
31,884
Tax
323
Tax rate* (%)
1.1
Adj. PAT
31,561
YoY Change (%)
39.5
Merger arrangement gain
1,888
PAT
38,257
23,222
33,449
Adj. EPS
20.0
12.2
16.5
Key Assumptions and Cain's share in production (kboepd)
Exchange rate (INR/USD)
54.2
55.5
54.2
Brent Price (USD/bbl)
108.7
110.0
110.0
Ravva & Cambay Prodn
10.2
9.2
9.1
Rajasthan Prodn
117.0
120.3
119.0
Total
127.2
129.4
128.1
E: MOSL Estimates; * Excluding forex fluctuations, includes
October 2013
2Q
44,431
67.5
34,516
262
4,515
188
2,226
-7,858
23,918
697
2.2
23,222
204.3
FY14
FY13
FY14E
191,537
9.3
145,731
7,209
23,692
450
8,425
10,862
133,666
8,348
6.8
125,318
5.6
0
125,318
65.6
60.6
108.5
10.6
126.8
137.5
4Q
43,634
19.5
32,582
3,657
4,747
152
2,219
-28
26,218
582
2.2
25,636
17.3
1Q
40,629
-8.5
30,099
1,001
5,193
105
1,251
6,820
31,871
599
2.4
31,272
-18.3
2QE
50,949
14.7
39,607
1,500
5,932
110
1,487
4,042
37,594
2,818
8.4
34,775
49.8
3QE
50,491
18.0
38,800
1,820
6,097
115
2,224
0
32,992
2,771
8.4
30,221
-4.2
4QE
49,468
13.4
37,226
2,889
6,471
121
3,463
0
31,209
2,160
6.9
29,050
13.3
25,636
13.4
31,272
16.4
34,775
18.2
30,221
15.8
29,050
15.2
175,241
33.6
134,880
4,549
18,459
687
7,228
3,134
121,548
2,872
2.4
118,676
49.5
1,888
120,564
62.1
62.5
111.0
10.6
126.0
136.6
62.0
110.0
10.6
129.5
140.1
61.9
110.2
10.6
130.9
141.5
54.5
108.5
9.3
118.6
127.8
54.2
113.5
8.6
118.0
126.6
MAT credit.
56.0
102.8
10.6
121.0
131.6
C131
GAIL (India)
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
GAIL IN
1,268.5
414 / 7
396 / 273
2 / -2 / -21

Y/E March
Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh.(INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2012 2013 2014E

402.8 473.3 531.5
57.0 62.8 62.5
36.5 40.2 36.6
28.8 31.7 28.9
2.6 10.1
-8.9
170
191
210
17.9 17.5 14.4
21.0 19.4 15.0
35.1 35.2 34.9
9.2
1.6
7.9
2.6
8.4
1.4
7.2
2.8
9.2
1.3
8.1
2.6
2015E
609.8
70.4
36.5
28.8
-0.3
229
13.1
14.0
34.9
9.2
1.2
7.3
2.6
CMP: INR326
Neutral
We expect GAIL to report PAT of INR9b (down 9% YoY; up 11% QoQ).

Subsidy sharing would be INR7b in 2QFY14 v/s INR7.9b in 2QFY13 and
INR7b in 1QFY14. GAIL's subsidy sharing has been ad-hoc at INR7b for
every quarter in FY13.
Subsidy sharing assumption: For FY14/FY15, we model upstream
sharing at INR700/650b. For GAIL, we have assumed a sharing of INR29b
in FY14 v/s INR26.9b in FY13.
We model gas transmission volumes at 99mmscmd v/s 106 in 2QFY13
and 99.5 in 1QFY14. Segmental EBIT (pre-subsidy) is expected to
increase by 11% QoQ, led by petrochemicals and LPG segments.
Adjusted for investments, the stock trades at 9.2x FY15E EPS of INR28.8.
Though we like the management's strategy to build network to enable
gas sourcing, we remain Neutral due to medium-term earnings
concern led by likely under-utilization of its new network on account
of headwinds to incremental gas availability.
(a) subsidy sharing, (b) transmission volumes, and (c) cost of natural
gas for consumption in LPG and petrochemicals segment.
(INR Million)
Y/E March
FY13
FY13
FY14E
1Q
110,886
25.0
18,991
17.1
2,169
588
612
16,846
5,508
32.7
11,338
15.1
11,338
8.9
2Q
113,612
17.1
13,803
12.1
2,491
261
2,685
13,736
3,882
28.3
9,854
-10.0
9,854
7.8
3Q
124,743
10.8
19,722
15.8
2,424
552
1,841
18,587
5,738
30.9
12,849
17.7
12,849
10.1
4Q
124,086
18.7
11,367
9.2
2,726
549
3,317
11,409
5,227
45.8
6,182
27.9
6,065
4.8
1Q
128,556
15.9
14,642
11.4
2,808
612
1,018
12,241
4,159
34.0
8,082
-28.7
8,082
6.4
2QE
131,709
15.9
15,223
11.6
2,898
650
1,850
13,525
4,594
34.0
8,931
-9.4
8,931
7.0
3QE
134,008
7.4
17,838
13.3
2,948
679
1,850
16,061
5,455
34.0
10,606
-17.5
10,606
8.4
4QE
137,219
10.6
15,961
11.6
3,011
1,019
2,912
14,843
4,672
31.5
10,171
64.5
10,170
8.0
473,327
17.5
63,882
13.5
9,809
1,950
8,455
60,578
20,356
33.6
40,222
10.1
40,105
31.6
531,492
12.3
63,663
12.0
11,665
2,960
7,631
56,669
18,879
33.3
37,789
-6.0
37,788
29.8
110
66
106
101
105
128
99
132
99
121
99
115
100
115
100
117
105
427
100
468
5,673
709
4,956
1,958
11,373
81
24,751
-7,000
17,751
6,049
-489
2,447
4,182
8,521
69
20,779
-7,857
12,922
6,195
133
2,986
4,395
12,063
-834
24,939
-6,143
18,796
406
620
3,469
4,716
10,799
-338
19,671
-5,872
13,799
5,538
550
3,025
4,383
6,891
-255
20,132
-7,000
13,132
5,453
527
3,225
5,002
8,156
0
22,363
-7,000
15,363
5,298
546
3,155
4,700
11,004
0
24,704
-7,000
17,704
5,496
453
4,105
4,925
10,621
0
25,601
-8,056
17,545
18,323
973
13,858
15,250
42,756
-1,022
90,139
-26,872
63,268
21,786
2,077
13,511
19,010
36,671
-255
92,800
-29,056
63,744
Net Sales
Change (%)
EBITDA
% of Net Sales
Depreciation
Interest
Other Income
PBT
Tax
Rate (%)
PAT
Change (%)
Adj PAT
EPS (INR)
Key Assumptions
Gas Trans. volume (mmsmd)
Petchem sales ('000MT)
Segmental EBIT Breakup (INR m)
Transmission
Natural Gas
LPG
Natural Gas Trading
Petrochemicals
LPG & Liq.HC (pre-subsidy)
Unallocated; GAILTEL
Total
Less: Subsidy
Total
E: MOSL Estimates
October 2013
FY14
C132

Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
GUJS IN
562.7
29 / 0
84 / 47
-10 / -27 / -41
CMP: INR52
We expect GSPL to report net sales of INR2.8b and PAT of INR1.3b

(down 4% YoY and flat QoQ) in 1QFY14.
We build lower gas transmission volumes at 22mmscmd in 2QFY14

(v/s 28.6mmscmd in 2QFY13 and 22.1mmscmd in 1QFY14), led by
decline in KG-D6 production.
GSPL has won all three bids for cross-country pipelines conducted by
PNGRB last year. We await clarity on the timelines and other details
regarding these pipelines.
We build gas transmission volumes of 22.2mmscmd and model average

tariff at INR1,325/mscm in FY14. The stock trades at 5.5x FY15E EPS of
INR9.2. Maintain Neutral.

Y/E March
Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh.(INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2012
11.2
10.2
5.2
9.3
3.1
44
23.3
23.6
13.0
2013 2014E
11.6 11.4
10.6 10.3
5.4
5.1
9.6
9.0
3.1
-5.5
52
60
19.9 16.1
22.2 18.1
12.6 12.2
5.6
1.2
3.7
1.9
5.4
1.0
3.6
1.9
5.6
0.8
3.0
1.9
2015E
11.2
10.1
5.2
9.2
2.0
68
14.4
16.7
12.9
5.5
0.7
2.9
1.9
Neutral

(a) transmission volumes and
(b) tariff.
(INR Milllion)
Y/E March
Net Sales
Change (%)
EBITDA
% of Net Sales
% Change
Depreciation
Interest
Other Income
PBT
Tax
Rate (%)
PAT
Change (%)
EPS (INR)
Transmission Vol. (mmscmd)
Implied tariff (INR/mscm)
E: MOSL Estimates
October 2013
FY13
1Q
2,676
-5.9
2,465
92.1
-5.9
439
317
176
1,884
636
33.7
1,248
-9
2.2
31.1
903
2Q
2,732
-2.7
2,520
92.2
-2.5
464
316
226
1,966
638
32.5
1,328
3
2.4
28.6
993
3Q
2,606
-4.9
2,338
89.7
-7.1
478
314
230
1,776
586
33.0
1,190
-6
2.1
27.3
1,043
FY14
4Q
3,590
29.9
3,268
91.0
29.7
480
315
158
2,630
1,015
38.6
1,615
25
2.9
22.2
1,768
1Q
2,961
10.6
2,691
90.9
9.2
458
380
139
1,992
729
36.6
1,263
1
2.2
22.1
1,411
2QE
2,810
2.9
2,538
90.3
0.7
480
380
215
1,893
625
33.0
1,268
-4
2.3
22.0
1,325
3QE
2,780
6.7
2,510
90.3
7.3
510
380
221
1,841
607
33.0
1,233
4
2.2
22.0
1,310
4QE
2,862
-20.3
2,530
88.4
-22.6
515
399
246
1,862
543
29.1
1,319
-18
2.3
22.7
1,334
FY13
FY14E
11,603
4.0
10,591
91.3
3.4
1,861
1,263
790
8,257
2,876
34.8
5,381
3
9.6
27.3
1,135
11,413
-1.6
10,269
90.0
-3.0
1,963
1,539
820
7,588
2,504
33.0
5,084
-6
9.0
22.2
1,345
C133
HPCL
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
HPCL IN
339.0
64 / 1
381 / 158
-3 / -38 / -44

Y/E March
Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh.(INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2012 2013 2014E

1,781 2,065 2,383
34.1 39.4 35.6
9.1
9.0
5.5
26.9 26.7 16.3
-40.8
-0.7 -38.9
387
404
414
7.1
6.7
4.0
6.7
6.8
5.5
37.0 37.3 35.1
7.1
0.5
8.4
4.5
7.1
0.5
8.1
4.5
11.6
0.5
7.6
2.6
2015E
2,275
39.8
8.9
26.3
61.4
432
6.2
6.4
35.1
7.2
0.4
6.1
4.2
CMP: INR190
Buy

with a delay.
2QFY14 gross under-recoveries are up 42% QoQ, due to impact of INR

depreciation and increase in crude price.


We expect HPCL to report PAT of INR4.4b in 2QFY14, led by our

assumption of INR200b subsidy sharing by the government in 2QFY14.
HPCL trades at 7.2x FY15E EPS and 0.4x FY15E BV. We have a Buy rating
due to our positive stance on diesel reforms and attractive valuations.

(b) GRM.
(INR Million)
Y/E March
FY13
1Q
440,765
8.0
-88,759
-20.1
nm
4,544
5,492
2,524
3,784
-92,488
0
0.0
-92,488
nm
-272.8
Net Sales
Change (%)
EBITDA
% of Net Sales
Change (%)
Depreciation
Interest
Other income
Exceptional Item
PBT
Tax
Rate (%)
PAT
Change (%)
Adj. EPS
Key Assumptions (INR b)
Gross under recovery
Upstream sharing
Govt. subsidy
Net Under recovery
Net Sharing (%)
E: MOSL Estimates; * 1QFY14 net
October 2013
2Q
484,639
30.9
22,480
4.6
nm
4,910
3,899
3,419
6,181
23,271
0
0.0
23,271
nm
68.6
3Q
527,510
10.1
3,877
0.7
-89.1
4,947
6,135
2,446
6,229
1,471
0
0.0
1,471
-94.6
4.3
FY14
4Q
612,379
16.9
101,826
16.6
86.3
4,914
2,852
3,910
-15,479
82,492
5,699
6.9
76,793
65.8
226.5
1Q
517,639
17.4
-6,879
-1.3
nm
5,100
4,668
2,042
0
-14,605
0
0.0
-14,605
nm
-43.1
107
83
87
85
34
33
33
11
0
67
55
126
73
-17
-2
-52
69
nm
nm
nm
sales includes receivables from ONGC
58
35
18
5
9
FY13
2QE
596,881
23.2
13,266
2.2
-41.0
5,218
4,559
3,163
0
6,653
2,210
33.2
4,443
-80.9
13.1
3QE
610,586
15.7
12,439
2.0
220.8
5,789
4,484
3,663
0
5,829
1,936
33.2
3,892
164.6
11.5
83
40
46
-2
nm
91
40
50
1
1
FY14E
4QE
658,017 2,065,294 2,383,123
7.5
15.9
15.4
16,732
39,424
35,559
2.5
2
1
-83.6
-246.7
10.9
5,890
19,315
21,997
4,260
18,377
17,969
3,825
12,300
12,692
0
714
0
10,408
14,746
8,284
-1,394
5,699
2,752
nm
38.6
33.2
11,802
9,047
5,532
-84.6
-0.7
-38.9
34.8
26.7
16.3
82
46
40
-3
nm
362
112
248
2
nm
315
160
155
0
nm
C134
Indian Oil Corporation

Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
IOCL IN
2,428.0
513 / 8
375 / 186
-8 / -30 / -21

Y/E March
Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh.(INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2012 2013 2014E

4,072 4,607 4,752
180.3 127.4 119.3
119.3 44.5 47.3
49.2 18.3 19.5
52.4 -62.7
6.3
249
261
274
20.2
7.2
7.3
12.9
7.6
6.9
10.2 33.8 30.8
4.3
0.8
6.7
2.4
11.5
0.8
9.2
2.9
10.8
0.8
9.5
2.8
2015E
4,668
182.2
68.0
28.0
43.9
292
9.9
10.2
28.5
7.5
0.7
5.9
3.8
CMP: INR211
Buy

with a delay.
2QFY14 gross under-recoveries are up 42% QoQ, due to the impact of

INR depreciation and increase in crude price.


We expect IOCL to report a PAT of INR18b in 2QFY14, led by our

assumption of INR200b subsidy sharing by the government in 2QFY14.
IOCL trades at an attractive 0.7x FY15E BV and 7.5x FY15E EPS. Buy.

(b) GRM.
(INR Million)
Y/E March
FY13
FY14
FY13
FY14E
1Q
2Q
3Q
4Q
1Q
2QE
3QE
4QE
Net Sales
966,028 1,057,913 1,152,767 1,284,497 1,102,332 1,215,928 1,321,307 1,353,265 4,461,204 4,992,832
Change (%)
-4.1
18.7
0.1
0.6
14.1
14.9
14.6
5.4
3.1
11.9
Raw Material Consumed
583,006 433,753 571,328 462,966 534,835 622,943 641,723 638,262 2,051,053 2,437,762
Staff Cost
13,316
12,074
15,858
31,464
17,309
17,500
17,500
17,691
72,713
70,000
Finished Goods Purchase
490,231 460,076 451,893 573,810 464,835 522,289 597,589 616,001 1,976,009 2,200,714
Other Exp
81,835
61,384
62,377
51,052
99,347
22,892
24,036
27,869
256,648
174,144
EBITDA
-202,360
90,627
51,310 165,205 -13,994
30,304
40,459
53,443
104,782
110,212
% of Net Sales
-20.9
8.6
4.5
12.9
-1.3
2.5
3.1
3.9
2.3
2.2
% Change
nm
nm
-52.2
17.7
nm
-66.6
-21.1
-67.7
-38.3
5.2
Depreciation
12,775
12,865
13,243
13,128
13,858
14,000
14,000
14,019
52,010
55,877
Interest
18,491
15,108
16,726
13,766
14,702
13,426
13,406
13,406
64,092
54,941
Other Income
9,117
33,460
11,978
13,244
11,621
15,143
16,143
16,532
67,798
59,438
PBT
-224,510
96,113
33,320 151,554 -30,932
18,020
29,195
42,549
56,478
58,832
Tax
0
0
0
6,426
0
0
5,839
7,104
6,426
12,943
Rate (%)
nm
0.0
0.0
4.2
nm
0.0
20.0
16.7
11.4
22.0
Adj. PAT
-224,510
96,113
33,320 145,128 -30,932
18,020
23,356
35,445
50,053
45,890
Change (%)
nm
nm
-61.5
2.1
nm
-81.3
-29.9
-75.6
-57.1
-8.3
PAT
-224,510
96,113
33,320 145,128 -30,932
18,020
23,356
35,445
50,053
45,890
Adj. EPS
-92.5
39.6
13.7
59.8
-12.7
7.4
9.6
14.6
20.6
18.9
Gross under recovery (INR b)
255
204
212
187
136
190
205
197
858
728
Upstream sharing
80
81
81
76
82
90
90
108
320
370
Govt. sharing
0
161
135
237
43
105
113
97
533
358
Net Under recovery
175
-38
-4
-127
12
-5
2
-9
5
0
E: MOSL Estimates
October 2013
C135
Indraprastha Gas
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
IGL IN
140.0
39 / 1
329 / 236
-7 / -4 / -1
CMP: INR276
We expect IGL to report volumes of 3.9mmscmd and PAT of INR807m

(down 8% YoY and 19% QoQ) for 2QFY14.
Historically, owing to favorable economics vis--vis alternative fuels,

IGL has been able to pass on any hike in its gas cost, thereby insulating
any impact on its EBITDA margin. However, with absence of KG-D6 gas
supply, there is pressure on the company's margins, as it is sourcing
more expensive RLNG to meet demand.
We expect 2QFY14 CNG volumes to grow 5% YoY to 2.9mmscmd and

PNG volumes to grow 7% YoY to 1mmscmd.
We model in total volumes of 3.9/4.3mmscmd in FY14/FY15. The stock

trades at 8.1x FY15E EPS of INR31.6.
Post the High Court quashing PNGRB's tariff cut order, PNGRB has now
approached the Supreme Court and the hearing is still on. Maintain
Neutral.

Y/E March
Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh.(INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2012
25.2
6.3
3.1
21.9
18.4
88
27.5
33.2
22.8
2013 2014E
33.7 41.3
7.6
8.1
3.5
3.7
25.3 26.4
15.3
4.5
107
127
26.0 22.6
32.4 29.1
21.7 18.9
12.6
3.1
6.7
1.8
10.9
2.6
5.1
2.0
9.7
2.0
4.6
1.9
2015E
47.5
9.2
4.4
31.6
19.7
152
22.7
29.0
19.0
8.1
1.7
3.7
2.3
Neutral

(a) EBITDA margin and
(b) Sales volumes.
(INR Million)
Y/E March
Net Sales
Change (%)
EBITDA
EBITDA (INR/scm)
% of Net Sales
% Change
Depreciation
Interest
Other Income
PBT
Tax
Rate (%)
PAT
PAT (INR/scm)
Change (%)
EPS
Gas Volumes (mmscmd)
CNG
PNG
Total
E: MOSL Estimates
October 2013
FY13
FY14
FY13
FY14E
1Q
7,602
41.7
1,793
5.6
23.6
13.9
427
155
36
1,247
396
31.8
850
2.6
6.2
6.1
2Q
8,546
43.2
2,060
6.1
24.1
30.9
477
140
39
1,482
489
33.0
992
2.9
28.5
7.1
3Q
8,694
31.4
1,871
5.5
21.5
25.7
474
141
26
1,282
418
32.6
863
2.5
24.9
6.2
4Q
8,818
22.4
1,848
5.5
21.0
9.7
489
125
38
1,272
437
34.3
835
2.5
3.4
6.0
1Q
9,015
18.6
1,924
5.7
21.3
7.3
532
128
51
1,315
442
33.6
873
2.6
2.6
6.2
2QE
10,041
17.5
1,821
5.1
18.1
-11.6
537
125
49
1,208
401
33.2
807
2.3
-18.7
5.8
3QE
11,127
28.0
2,205
5.9
19.8
17.9
557
125
56
1,579
525
33.2
1,055
2.8
22.2
7.5
4QE
11,138
26.3
2,107
5.8
18.9
14.0
586
122
59
1,457
490
33.6
967
2.7
15.7
6.9
33,661
33.8
7,572
5.6
22.5
19.8
1,867
562
138
5,282
1,741
33.0
3,541
2.6
15.3
25.3
41,321
22.8
8,057
5.6
19.5
6.4
2,212
500
215
5,559
1,858
33.4
3,701
2.6
4.5
26.4
2.67
0.88
3.55
2.80
0.88
3.69
2.80
0.91
3.71
2.77
0.98
3.74
2.77
0.95
3.71
2.94
0.95
3.89
3.05
0.98
4.03
2.99
1.06
4.05
2.76
0.91
3.67
2.94
0.98
3.92
C136
MRPL
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
MRPL IN
1,752.6
58 / 1
71 / 26
3 / -38 / -51
CMP: INR33
We expect MRPL to report a loss of INR2.2b (v/s profit of INR11.9b in

2QFY13 and loss of INR4.5b in 1QFY14) in 2QFY14.
EBITDA is likely to be INR2.9b (v/s INR11.6b in 2QFY13 and INR1.7b in

1QFY14). Regional benchmark Reuters Singapore GRM is down 15%
QoQ to USD5.5/bbl from USD6.5/bbl due to decline in gasoline and
fuel oil cracks.
On the operational front, we expect refinery throughput at 3.6mmt.
Medium-term GRM outlook continues to be subdued due to

overcapacity and sluggish global demand. We expect GRM to be
volatile (occasional spurts) due to occasional bunching up of
shutdowns.
For MRPL, we model in GRM of USD4/bbl for FY14 and USD5.5/bbl for
FY15. The stock trades at 4.4x FY15E EPS and an EV of 3x FY15E EBITDA.
Maintain Neutral.

Y/E March
Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh.(INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2012 2013 2014E

537.7 656.9 769.0
22.6
8.3 20.0
9.1
-7.6
2.3
5.2
-4.3
1.3
-22.8
nm -129.8
41
37
38
13.2 -11.1
3.4
13.1
-0.3
5.5
22.4
0.0 27.3
6.4
0.8
4.1
3.0
-7.7
0.9
13.5
-
25.9
0.9
5.8
0.9
2015E
791.6
31.4
11.9
6.8
430.0
43
16.9
20.3
24.0
4.4
0.7
3.0
4.7
Neutral

(a) GRM,
(b) Forex fluctuations and
(c) Inventory changes.
(INR Million)
Y/E March
Net Sales
Change (%)
Raw Material (incl. inv chg)
Staff Cost
Other Expenditure
EBITDA
% of Net Sales
% Change
Depreciation
Interest
Other Income
PBT b/f forex/exceptional
Forex gain/(loss)
Exceptional items
PBT
Tax
Rate (%)
PAT
Change (%)
EPS
GRM (USD/bbl)
Throughput (mmt)
E: MOSL Estimates
October 2013
FY13
1Q
128,099
-4.2
133,106
421
1,048
-6,476
nm
nm
-1,375
-1,102
495
-8,458
-6,490
0
-14,948
-257
nm
-15,206
nm
-8.7
-4.2
2.9
2Q
163,101
39.8
150,154
568
809
11,569
7.1
1,435
-1,456
-701
369
9,781
2,836
30
12,647
-796
6.3
11,851
4,811.4
6.8
9.2
3.6
3Q
179,921
39.1
177,051
459
637
1,774
1.0
-41
-1,550
-777
192
-362
-2,570
0
-2,932
-664
nm
-3,596
nm
-2.1
1.9
3.8
FY14
4Q
185,795
17.3
182,529
397
1,441
1,428
0.8
-82
-1,663
-706
105
-836
856
445
465
-1,084
233.2
-619
nm
-0.4
2.0
4.1
1Q
152,659
19.2
149,399
502
1,076
1,683
1.1
nm
-1,688
-779
293
-491
-5,166
1,118
-4,539
0
nm
-4,539
nm
-2.6
2.9
3.3
2QE
188,626
15.7
184,066
520
1,138
2,902
1.5
nm
-1,700
-805
350
747
-3,000
0
-2,253
68
3.0
-2,185
-118.4
-1.2
2.8
3.6
3QE
214,510
19.2
206,080
525
1,442
6,463
3.0
nm
-1,750
-850
485
4,348
0
0
4,348
-652
15.0
3,696
nm
2.1
4.5
4.1
4QE
213,204
14.8
202,300
500
1,425
8,979
4.2
nm
-2,359
-1,397
536
5,757
0
0
5,757
-476
8.3
5,281
nm
3.0
5.8
4.2
FY13
FY14E
656,915
22.1
642,840
1,846
3,935
8,294
1.3
-39.9
-6,044
-3,286
1,160
125
-5,368
475
-4,769
-2,801
nm
-7,569
nm
-4.3
2.5
14.4
768,999
17.1
741,845
2,047
5,081
20,027
2.6
141.5
-7,497
-3,831
1,664
10,362
-8,166
1,118
3,313
-1,060
32.0
2,253
-129.8
1.3
4.0
15.2
C137
Oil India
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
OINL IN
601.1
273 / 4
630 / 415
-7 / -16 / -11

Y/E March
Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh.(INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2012
97.7
46.9
34.5
57.3
19.4
295
20.7
27.7
38.5
7.9
1.5
3.5
4.2
2013 2014E
95.3 99.6
42.5 44.7
35.9 36.1
59.7 60.1
4.1
0.6
320
357
19.4 17.8
26.0 23.6
58.2 37.3
7.6
1.4
3.8
6.6
7.6
1.3
3.6
4.2
2015E
112.9
52.8
41.4
68.9
14.7
401
18.2
24.4
37.3
6.6
1.1
2.9
4.8
CMP: INR454
Buy
We expect OINL to report a PAT of INR9.3b (v/s INR9.5b in 2QFY13 and

INR6.1b in 1QFY14). OINL's subsidy sharing has been ad-hoc at USD56/
bbl for FY13. Similar to FY13, we model subsidy sharing at USD56/bbl
until there is further clarity. The government has set up a committee
to look into the subsidy sharing mechanism and provide clarity over
the longer term.
We estimate EBITDA at INR11.6b (flat YoY and up 67% QoQ). We
estimate gross realization at USD110/bbl v/s USD109/bbl in 2QFY13
and USD102/bbl in 1QFY14, and net realization at USD54/bbl v/s USD53/
bbl in 2QFY13 and USD46/bbl in 1QFY14.
Subsidy sharing assumption: For FY14/15, we model upstream sharing
at INR700/650b, and OINL's share at 13.4% of upstream. We model
OINL to share INR23.3b in 2QFY14.
Our Brent price assumption is USD108.5/105/100/bbl for FY14/15/longterm. We model upstream sharing at INR700b/650b in FY14/15.
The stock trades at 6.6x FY15E EPS of INR68.9. We remain positive on
OINL due to recently announced diesel reforms, gas price hike and
strong operational foothold: (1) steady production growth, (2) high
share of oil in its reserves (55% in 1P and 62% in 2P), and (3) attractive
valuations (>40% discount to its global peers on EV/BOE, 1P basis).
Buy.
(a) subsidy sharing, (b) DD&A charges, and (c) oil & gas production
volumes.
(INR Billion)
Y/E March
Net Sales
Change (%)
EBITDA
% of Net Sales
Change (%)
D,D&A
Interest
OI (incl. Oper. other inc)
PBT
Tax
Rate (%)
PAT
Change (%)
Adj. PAT
Adj. EPS (INR)
Key Assumptions (USD/bbl)
Exchange rate (INR/USD)
Gross Oil Realization
Subsidy
Net Oil Realization
Subsidy (INR b)
E: MOSL Estimates
October 2013
FY13
FY14
FY13
FY14E
1Q
23.3
2.0
11.0
47.0
-12.2
2.0
0.0
4.8
13.8
4.5
32.5
9.3
9.5
9.3
15.5
2Q
24.0
-26.6
11.5
47.8
-29.2
2.6
0.0
5.2
14.1
4.6
32.4
9.5
-16.2
9.5
15.9
3Q
24.1
-3.3
11.2
46.6
-15.7
2.2
0.0
4.9
13.9
4.5
32.4
9.4
-7.3
9.4
15.6
4Q
23.8
38.2
8.8
37.1
82.6
2.4
0.0
4.6
11.0
3.4
30.7
7.6
71.9
7.6
12.7
1Q
19.8
-15.1
7.0
35.2
-36.4
2.7
0.0
4.7
9.0
2.9
32.2
6.1
-34.5
6.1
10.1
2QE
25.5
6.3
11.6
45.6
1.4
2.7
0.0
5.0
13.9
4.6
33.0
9.3
-2.2
9.3
15.5
3QE
27.0
11.8
12.6
46.7
12.1
2.7
0.0
5.0
15.0
4.9
33.0
10.0
6.6
10.0
16.7
4QE
27.3
15.0
13.5
49.5
53.5
3.2
0.0
5.7
16.0
5.4
33.5
10.7
39.4
10.7
17.7
95.3
-2.5
42.5
44.6
287.6
9.2
0.0
19.6
52.8
16.9
32.1
35.9
4.1
35.9
59.7
99.6
4.6
44.7
44.9
5.3
11.2
0.1
20.4
53.9
17.8
33.0
36.1
0.6
36.1
60.1
54.2
109.8
56.0
53.8
20.2
55.2
108.6
56.0
52.6
20.8
54.2
108.6
56.0
52.6
19.5
54.4
111.4
56.0
55.4
18.5
56.0
101.9
56.0
45.9
19.8
62.5
110.0
56.0
54.0
23.3
62.0
109.0
55.0
54.0
23.2
61.9
109.2
64.5
44.7
27.4
54.5
109.6
56.0
53.6
78.9
60.6
107.5
57.9
49.6
93.7
C138
ONGC
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
ONGC IN
8,555.5
2,348 / 38
354 / 234
-4 / -17 / -7
CMP: INR275

Y/E March
2012 2013 2014E
Sales
1,464 1,614 1,812
EBITDA
577.7 539.6 583.7
Adj. PAT
263.1 239.9 248.9
Adj. EPS (INR) 30.4 28.3 28.9
EPS Gr. (%)
23.3 (8.8)
3.7
BV/Sh.(INR)
159
177
194
RoE (%)
20.7 16.8 15.6
RoCE (%)
19.4 15.6 14.8
Payout (%)
32.8 39.2 39.3
Valuations
P/E (x)
9.0
9.7
9.5
P/BV (x)
1.7
1.6
1.4
EV/EBITDA (x)
3.6
3.8
3.5
Div. Yield (%)
3.5
3.5
3.5
2015E
1,976
702.8
317.4
36.7
27.5
217
17.8
16.9
38.3
7.5
1.3
2.8
4.4
Buy
We expect ONGC to report adjusted PAT of INR62b (v/s INR59b in

2QFY13 and INR40.2b in 1QFY14). ONGC's subsidy sharing has been adhoc at USD56/bbl for FY13. Similar to FY13, we model subsidy sharing
at USD56/bbl until there is further clarity. The government has set up
a committee to look into the subsidy sharing mechanism and provide
clarity over the longer term.
We estimate EBITDA at INR124b (v/s INR103b in 2QFY13 and INR84b in
1QFY14).
We estimate gross realization at USD111/bbl v/s USD110/bbl in 2QFY13
and USD103/bbl in 1QFY14, and net realization at USD47.7/bbl v/s
USD46.8/bbl in 2QFY13 and USD40.2/bbl in 1QFY14.
Subsidy sharing assumption: For FY14/15, we model upstream sharing
at INR700/650b, and ONGC's share at 82.5% of upstream. We expect
ONGC to share INR141.9b in 2QFY14.
Our Brent price assumption is USD108.5/105/100/bbl for FY14/15/longterm. We model upstream sharing at INR700b/650b in FY14/15. The
stock trades at 7.5x FY15E consolidated EPS of INR36.7. Maintain Buy.

(a) subsidy sharing,
(b) DD&A charges, and
(c) Oil & Gas production volumes.
Quaterly performance (Standalone)
(INR Billion)
Y/E March
Net Sales
Change (%)
EBITDA
% of Net Sales
D,D & A
Interest
Other Income
PBT
Tax
Rate (%)
PAT
Adjusted PAT
Change (%)
Adj. EPS
Fx rate (INR/USD)
Gross Oil Realization
Subsidy
Net Oil Realization
Subsidy (INR b)
E: MOSL Estimates
October 2013
FY13
FY14
FY13
FY14E
1Q
200.8
24.0
110.4
55.0
32.0
0.3
11.3
89.4
28.6
32.0
60.8
60.8
48.4
7.1
2Q
197.9
-12.5
102.7
51.9
37.3
0.0
20.0
85.4
26.4
30.9
59.0
59.0
-31.8
6.9
3Q
209.9
15.8
112.4
53.5
44.1
0.0
13.9
82.1
26.5
32.2
55.6
55.6
20.0
6.5
4Q
213.9
13.7
102.9
48.1
71.3
0.0
16.9
48.5
14.6
30.2
33.9
33.9
-40.0
4.0
1Q
192.2
-4.3
84.0
43.7
39.0
0.0
12.9
57.8
17.7
30.6
40.2
40.2
-33.9
4.7
2QE
229.3
15.9
123.8
54.0
44.4
0.1
13.3
92.6
30.6
33.0
62.1
62.1
5.2
7.3
3QE
228.9
9.1
123.1
53.8
52.9
0.1
12.1
82.2
27.1
32.9
55.1
55.1
-0.9
6.4
4QE
214.3
0.2
108.8
50.8
55.6
0.1
13.5
66.7
21.9
32.8
44.8
44.8
32.2
5.2
822.5
8.6
428.4
52.1
184.6
0.3
62.0
305.4
96.2
31.5
209.3
209.3
-9.1
24.5
864.7
5.1
439.6
50.8
191.9
0.2
51.8
299.3
97.2
32.5
202.1
202.1
-3.4
23.6
54.2
109.9
63.3
46.6
123.5
55.2
109.9
63.1
46.8
123.3
54.2
110.2
62.2
48.0
124.3
54.4
114.0
63.1
50.9
123.1
56.0
102.9
62.7
40.2
126.2
62.5
111.0
63.3
47.7
141.9
62.0
110.0
63.0
47.0
141.9
61.9
110.2
74.0
36.2
167.3
54.5
111.0
62.9
48.1
494.2
60.6
108.5
65.7
42.8
577.2
C139
Petronet LNG
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
PLNG IN
750.0
92 / 1
175 / 106
-11 / -14 / -28
CMP: INR123
We expect PLNG to report PAT of INR2b (down 37% YoY and 12% QoQ)
for 2QFY14. We estimate EBITDA at INR3.9b (down 25% YoY and 2%
QoQ).
We have built in LNG volumes at 2.6mmt in 2QFY14, flat QoQ. We

model 10.6mmtpa volumes in FY14 at Dahej, of which 7.5mmtpa would
be on long-term contract and 3.1mmtpa on short-term. We model in
0.2mmt volumes from Kochi in FY14.
We model 5% escalation in re-gasification tariff till FY15 and flat

thereafter at Dahej.
The stock trades at 9.5x FY15E consolidated EPS of INR12.9. Lower spot
LNG prices and sale of ADB's stake are key near-term positives for the
stock. Buy.

Y/E March
Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh.(INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2012 2013 2014E

227.0 314.7 411.0
18.7 18.4 16.2
11.0 11.5
8.0
14.6 15.3 10.6
76.8
4.9 -30.7
47
59
68
35.3 28.8 16.7
27.2 24.1 17.5
20.7 19.1 21.1
8.4
2.6
6.2
2.0
8.0
2.1
6.0
2.0
11.6
1.8
6.8
1.6
2015E
443.0
20.7
9.7
12.9
21.7
78
17.7
19.7
19.9
9.5
1.6
5.9
1.8
Buy

(a) interest and depreciation charges for Kochi terminal,
(b) Spot volumes, and
(c) Marketing margin on spot volumes.
(INR Million)
Y/E March
Net Sales
Change (%)
EBITDA
% of Net Sales
Change (%)
Depreciation
Interest
Other Income
PBT
Tax
Rate (%)
PAT
Change (%)
EPS (INR)
Dahej Gas Volume (TBTU)
Dahej Gas Volumes (mmt)
Kochi Gas Volumes (mmt)
Avg. Dahej Regas (INR/mmbtu)
E: MOSL Estimates
October 2013
FY13
FY14
FY13
FY14E
1Q
70,304
52.1
4,571
6.5
4.3
459
329
266
4,048
1,340
33.1
2,708
5.5
3.6
127.2
2.5
2Q
75,484
40.6
5,182
6.9
15.6
467
317
248
4,646
1,500
32.3
3,146
20.8
4.2
135.0
2.7
3Q
84,228
33.1
5,289
6.3
4.1
472
291
149
4,675
1,490
31.9
3,185
7.8
4.2
140.6
2.8
4Q
84,656
32.8
4,344
5.1
18.8
468
247
203
3,831
1,380
36.0
2,451
0.0
3.3
122.0
2.4
1Q
84,442
20.1
3,978
4.7
-13.0
467
240
152
3,423
1,170
34.2
2,253
-16.8
3.0
129.5
2.6
2QE
104,000
37.8
3,894
3.7
-24.9
742
432
225
2,945
957
32.5
1,988
-36.8
2.7
130.8
2.6
3QE
109,348
29.8
4,079
3.7
-22.9
1,016
621
230
2,672
868
32.5
1,804
-43.4
2.4
135.8
2.7
4QE
113,191
33.7
4,251
3.8
-2.1
1,018
627
231
2,838
922
32.5
1,916
-21.8
2.6
136.8
2.7
314,672
38.6
19,385
6.2
10.1
1,866
1,184
865
17,200
5,710
33.2
11,490
8.7
15.3
524.8
10.4
410,982
30.6
16,202
3.9
-16.4
3,243
1,920
839
11,878
3,918
33.0
7,960
-30.7
10.6
533.0
10.6
44.9
49.1
47.6
45.3
41.8
40.8
41.2
43.3
46.7
41.8
C140
Reliance Industries
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
RIL IN
3,230.7
2,714 / 44
955 / 761
-5 / 4 / -5

Y/E March
Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh.(INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2012 2013 2014E

3,299 3,603 4,007
336.2 307.9 306.0
200.4 210.0 216.3
67.7 71.9 74.0
(1.2)
4.8
3.0
561
616
679
13.0 12.3 11.5
12.1 11.6 11.0
14.7 14.6 16.5
13.7
1.5
8.1
1.0
12.9
1.4
8.5
1.1
12.5
1.2
8.9
1.1
2015E
3,879
338.8
236.1
80.6
9.1
746
11.4
11.0
16.4
11.5
1.1
8.0
1.2
CMP: INR840
Neutral
We expect RIL to report GRM of USD7.8/bbl in 2QFY14 v/s USD8.4/bbl

in 1QFY14. Singapore GRM decreased 15% QoQ due to weak gasoline
and fuel oil cracks. We also expect some recovery in petchem profits.
We expect average 2QFY14 KG-D6 volume of 13.5mmscmd v/s

14.8mmscmd in 1QFY14.
We expect RIL to report PAT of INR53.4b (v/s INR53.8b in 2QFY13 and

INR53.5b in 1QFY14).
RIL trades at 11.5x FY15E adjusted EPS of INR80.6. RIL's new refining/
petchem projects are likely to add to earnings from end-FY16/FY17,
but medium-term outlook on core business remains weak, with RoE
reaching sub-12%. Maintain Neutral.

(a) GRM,
(b) Petchem margin, and
(c) KG-D6 production.
(INR Billion)
Y/E March
Net Sales
Change (%)
EBITDA
% of Net Sales
Change (%)
Depreciation
Interest
Other Income
PBT
Tax
Rate (%)
PAT
Change (%)
Adj. EPS (INR)
Fx Rate (INR/USD)
Brent Price (USD/bbl)
RIL GRM
Singapore GRM
Premium/(disc) to Singapore
KG-D6 Gas Prodn (mmscmd)
Segmental EBIT Breakup (INRb)
Refining
Petrochemicals
E&P
Others
Total
E: MOSL Estimates; EPS adjusted
October 2013
FY13
FY14
FY13
FY14E
1Q
918.8
13.4
67.5
7.3
-32.0
24.3
7.8
19.0
54.3
9.6
17.7
44.7
-21.0
15.3
2Q
903.4
15.0
77.1
8.5
-21.7
22.8
7.4
21.1
68.0
14.3
21.0
53.8
-5.7
18.4
3Q
938.9
10.3
83.7
8.9
14.9
24.6
8.1
17.4
68.5
13.5
19.7
55.0
23.9
18.8
4Q
842.0
-1.2
78.3
9.3
19.2
22.4
7.1
22.4
71.2
15.3
21.5
55.9
31.9
19.1
1Q
876.5
-4.6
70.8
8.1
4.9
21.4
8.1
25.4
66.6
13.1
19.7
53.5
19.7
18.3
2QE
1,014.6
12.3
74.2
7.3
-3.7
21.4
8.1
22.1
66.7
13.3
20.0
53.4
-0.7
18.3
3QE
1,020.1
8.7
79.5
7.8
-5.0
23.6
8.2
22.1
69.8
15.0
21.5
54.8
-0.4
18.8
4QE
1,095.7
30.1
81.6
7.4
4.3
24.8
8.4
21.7
70.0
15.4
22.0
54.6
-2.3
18.7
3,602.9
9.2
307.9
8.5
-8.4
94.7
30.4
80.0
262.8
52.8
20.1
210.0
4.8
71.6
4,006.8
11.2
306.0
30.6
-0.6
91.2
32.9
91.3
273.2
56.9
20.8
216.3
3.0
74.0
54.2
109
7.6
6.7
0.9
33.0
55.5
110
9.5
9.1
0.4
28.5
54.2
110
9.6
6.5
3.1
24.0
54.2
114
10.1
8.7
1.4
19.2
56.0
103
8.4
6.6
1.8
14.8
62.5
111
7.8
5.5
2.3
13.5
62.0
110
8.8
6.9
1.9
12.5
61.9
110
9.0
7.0
2.0
12.0
54.5
111
9.2
7.8
1.4
26.2
60.6
109
8.5
6.5
2.0
13.2
36.2
19.4
5.9
0.8
62.2
35.2
19.0
4.6
0.5
59.2
29.5
18.9
3.5
0.8
52.8
29.0
23.0
4.2
0.1
56.3
35.8
22.0
4.0
0.1
61.9
35.7
23.0
3.6
0.3
62.5
128.3
73.3
28.9
1.3
230.5
130.0
86.9
15.3
1.3
232.1
21.5
35.4
17.6
17.4
9.7
8.7
0.0
0.1
48.8
61.6
for treasury shares
C141
September 2013 Results Preview | Sector: Real Estate
Real Estate
Companies Covered
2QFY14 witnessed severe sectoral underperformance
BSE Realty index underperformed the broader index by ~22% in 2QFY14. As

uncertainties over macro and politico-economical outlook galore, the relatively
weaker dynamics of real estate sector garnered a hawkish reaction from
investors, apprehensive on liquidity stress.
Near-to-medium term risk continues to remain beyond comfort zone due to
weakening demand, high inventory, stressed balance sheets and risk of defaults.
Core operational strengths are improving due to rising discipline and conservative
strategies of managements. But the recovery has been slow due to weakness in
fundamental support.
DLF
Jaypee Infratech
Mahindra Lifespaces
Oberoi Realty
Phoenix Mills
Concerns to persist in near term
Price appreciations in recent past aid the risk of potential 10-20% contraction in
realizations. If it is in tandem with a decline in volumes as well, it could hurt the
monetization plan of developers meaningfully and weaken the cash flow.
Despite strategic discipline adopted by most developers, the improvement in
operational cash flow, liquidity and P&L would be slow and gradual over the
current base due to broader challenges.
In a contracting demand scenario, (a) product proposition, (b) targeting right
customer segment, (c) brand and (d) attractive pricing would play a crucial role
to grab demand market share.
Price correction is essential in select metros to boost demand, as rate-sensitive
theory is weak in the near term. Even if a rate cut happens, bearing of the same
over buyers' affordability is much less than the impact of price correction.
Unitech
Prefer companies poised in favorable operating cycle
We prefer companies which have reasonably cleared their older inventories

and are riding on new and strong operating cycles, led by fresh launches, robust
pre-sales and favorable market outlook.
With downside risk to realizations and volumes hereon, cash flow certainty lies
with players with strong FY12-13 pre-sales and reasonably strong balance sheet
to carry forward execution.
Anant Raj Inds

DLF
Jaypee Infratech
Mahindra Lifespace
Oberoi Realty
Phoenix Mills
Prestige Estates
Unitech
Sector Aggregate
CMP
(INR)
27.09.13
42
132
16
406
166
237
123
16
(INR Million)
Rating
Sep.13
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Buy
1,009
20,537
9,590
868
1,980
746
4,419
6,230
45,378
Sales
Var.
% YoY
-26.5
0.7
36.1
3.6
-23.2
12.2
83.0
15.4
11.5
Var.
% QoQ
26.1
-11.3
24.7
29.6
-9.3
6.8
-11.3
8.8
-1.1
Sep.13
424
7,722
4,446
139
1,150
492
1,193
885
16,450
EBITDA
Var.
% YoY
-40.9
3.5
24.0
-7.7
-23.1
12.3
64.6
8.1
6.9
Var.
% QoQ
45.6
-15.7
32.6
49.2
-13.9
3.7
-7.4
17.6
-1.7
Net Profit
Sep.13
Var.
% YoY
296
-41.1
1,362
-1.7
1,656
-8.5
235
-25.1
986
-20.7
362
9.7
739
61.8
711
0.7
6,349
-5.9
Var.
% QoQ
52.4
-24.8
104.4
49.3
-3.1
-13.4
-14.7
13.1
7.5
Sandipan Pal (Sandipan.Pal@MotilalOswal.com)

October 2013
C142

Sensex Index
MOSL Real Estate Index
While asset valuations (discount to NAV) are cheap for almost all, the relative
strengths in earnings visibility render comforts to select companies.
We prefer Prestige, IBREL, DLF and Sobha.
105
90
Physical markets to witness seasonal weakness
75
Sep-13
Aug-13
Jul-13
Jun-13
60

Sensex Index
MOSL Real Estate Index
Sep-13
Jun-13
Mar-13
Dec-12
Sep-12
120
100
80
60
40
2QFY14 witnessed typical sequential weakness due to monsoon and non-preferred

buying season. New launches have been low across most developers after a strong
1HCY13. Old inventory would be key drivers to pre-sales in the quarter.
Southern markets (Bangalore and Chennai) are likely to post sequential decline
in pre-sales, but maintain strengths YoY. Key launches include Sobha's premium
projects in Yamlur, Bangalore (Palladian; INR8,500/sf), and Calicut (Bella Encosta;
INR7,200/sf), and PEPL's launches of super premium villas Silver Spring, Chennai
(@INR9,800/sf, ticket size of INR60m) and Royal Garden Phase II, Bangalore
(1.69msf, @INR4,200/sf).
Gurgaon witnessed limited fresh launches with DLF, Unitech, Anantraj etc not
offering new projects. Last major launches were Tata Housing's launch in Dwarka
Expressway (@INR11/sf), DLF Crest (@INR15/sf) in Phase V. Upcoming launches of
IBREL, GPL, MLIFE are key to watch out.
In Mumbai, approvals and launches have picked up, including some success in
recent launches (mostly in 1QFY14) like IBREL's Sky Forest, Sky, Lodha's Blue Moon
(Central Mumbai), L&T's in Powai, Kalapataru's in Goregaon, Shaporji's in Kandivali,
which have garnered a decent response with better pricing and/or subvention
scheme (10-20% discount to market). Increasingly, projects are offering discounts,
rent-free periods, 20:80 schemes (EMI waiver during construction period) etc.
Key expectations
In 2QFY14 Real estate universe is expected to post a revenue growth of 11.5% YoY
(down 1.1% QoQ), EBITDA growth of 6.9% YoY (down 1.7% QoQ) and PAT degrowth
of 5.9% YoY (+7.5% QoQ). We expect the Operating cash flow (OCF) and FCFE to
improve YoY for across most developers.
October 2013
Status of planned launches and approvals (crucial for Oberoi, UT, MLIFE, PHNX,
Godrej etc).
Demand and pricing stability in hitherto performing markets (Bangalore, Chennai,
Pune).
Scale-up in execution reflected in improvement in revenue booking or cash
collections (DLF, UT).
Leasing velocity and managements' outlook in commercial verticals (PEPL, Oberoi,
DLF).
New acquisitions and visibility on the same (Oberoi, MILFE, Godrej).
Cash flow and trend in leverage (DLF, PHNX, Godrej).
Project completion (JPIN,HDIL etc).
C143
Quaterly sales trends (INR b)

Presales (INR b)
NCR Centric developers
DLF
Unitech
Anantraj
JPIN
Mumbai Centric developers
IBREL
HDIL
ORL
Bangalore Centric developers
Sobha
PEPL
Purva
Diversified
MAHLIFE
GPL
1Q
2Q
FY12
3Q
11.1
10.2
1.0
5.7
6.3
10.7
1.6
5.8
11.1
9.4
0.9
16.4
24.3
7.8
3.6
11.0
52.8
38.1
7.0
38.9
6.0
7.0
1.6
9.3
6.3
8.4
0.7
13.4
12.5
6.8
0.5
4.0
13.4
5.9
0.4
5.7
38.2
28.1
3.2
32.4
24.3
4.5
1.2
4.0
3.8
1.9
2.6
4.9
7.7
2.3
4.5
0.6
1.8
6.3
0.5
2.8
19.5
10.6
9.5
6.0
1.0
2.1
6.1
1.0
2.2
12.0
NA
2.2
5.9
NA
2.2
30.0
NA
8.7
15.9
2.5
0.9
3.0
2.1
1.4
4.9
7.8
1.2
4.5
4.7
1.6
5.0
6.0
2.9
17.4
20.6
7.0
4.8
10.0
3.4
5.3
8.2
2.4
5.3
7.5
3.7
6.8
5.4
7.0
22.2
31.1
16.5
6.0
10.2
2.6
1.7
2.3
0.8
2.2
3.0
2.0
0.6
6.4
6.0
12.8
0.5
4.4
0.9
7.0
1.5
4.0
Bank loans to developers stood at INR1.27t as in Mar-13

Loa n (INR b)
1,400
1,200
1,000
800
600
400
200
0
4Q
FY12
1Q
2Q
FY13
3Q
4Q
FY13
FY14
1Q
1.5
4.4
0.7
4.9
20.3
4.2
Home loans disbursement trend

Di s burs ement (INR b)
Growth (%)
20
5
0
-5
-10
Mar-13
Sep-12
Mar-12
Sep-11
Mar-11
Sep-10
Mar-10
Sep-09
Mar-09
Sep-08
Mar-08
Sep-07
Mar-07
Sep-06
Mar-06
Sep-05
1Q2008
2Q2008
3Q2008
4Q2008
1Q2009
2Q2009
3Q2009
4Q2009
1Q2010
2Q2010
3Q2010
4Q2010
1Q2011
2Q2011
3Q2011
4Q2011
1Q2012
2Q2012
3Q2012
4Q2012
1Q2013
2Q2013
3Q2013
4Q2013
1Q2014
10
69
102
102
136
92
132
119
163
119
184
158
231
155
243
197
272
181
280
231
310
231
335
201
380
268
15
Source: RBI, MOSL
Top 6 cities launches and sales trend (msf) Sales value (INR b) till June-13: New launches improve QoQ,
but absorption velocity and average realization were stable QoQ. Hyderabad, Bangalore, Pune best
placed in terms of inventory months
Top 6 cities launch and presales trend (msf)
55
71 81 68 81 70 73 71
300
4,000
250
200
1QCY10
2QCY10
3QCY10
4QCY10
1QCY11
2QCY11
3QCY11
4QCY11
1QCY12
2QCY12
3QCY12
4QCY12
1QCY13
2QCY13
150
29
23
21
14
3,500
3,000
2,500
Chennai
69 77 75 63 69 60
4,500
Hyderabad
53
350
Pune
72
83
35
5,000
Bangalore
70
84
400
NCR
74
91 91
98
97
45
Mumbai
104 103
116
Sa l es val ue (INR b)
Rea l i zati ons (INR/s f)
3QCY09 232
4QCY09 227
1QCY10
248
2QCY10 221
250
3QCY10
4QCY10 227
243
1QCY11
2QCY11 217
3QCY11 225
4QCY11
294
335
1QCY12
297
2QCY12
3QCY12
355
270
4QCY12
349
1QCY13
2QCY13
338
La unch (ms f)
Sa l es (ms f)
127
Status of unsold stock (months)
Source: Liases Foras/MOSL

October 2013
C144
Mumbai: Approvals gain traction, new launches rise steadily; launches at discounted prices and favorable
payment scheme garnered good response; average realizations have seen time correction; absorption
velocity has been reviving from a low base; inventory high but stable QoQ
18
15
16
11
11
12
14
16
16
17
21
16
12
12
Pricing trend
Sa l es vo l ume (ms f)
Sa l es va l ue (INR b)
93
85 83 94 87
79
71
64
53
50
80
72
67
57
62
51
14,000
12,000
10,000
8,000
6,000
4,000
2,000
3QCY09
4QCY09
1QCY10
2QCY10
3QCY10
4QCY10
1QCY11
2QCY11
3QCY11
4QCY11
1QCY12
2QCY12
3QCY12
4QCY12
1QCY13
2QCY13
3QCY09
4QCY09
1QCY10
2QCY10
3QCY10
4QCY10
1QCY11
2QCY11
3QCY11
4QCY11
1QCY12
2QCY12
3QCY12
4QCY12
1QCY13
2QCY13
181312131211 9 8 9 8 9 1010 1010 9
Avg. Quoted pri ces (INR/sf)

Avg. sal e s p ri ce s (INR/s f)
3QCY09
4QCY09
1QCY10
2QCY10
3QCY10
4QCY10
1QCY11
2QCY11
3QCY11
4QCY11
1QCY12
2QCY12
3QCY12
4QCY12
1QCY13
2QCY13
Sales trend
27
New launches trend (msf)
NCR: Sales remain steady hitherto on the back of good number of recent launches in past 6-9 months;
moderation in velocity and pricing visible in Dwarka Expressway projects; price rise in recent times
poses some risks going forward; Noida inventory high but stable QoQ
Sales performance trend
59
Launch volume trend (msf)
Sal es vo l ume (ms f)

Sal es va l ue (INR b)
50
48
37
17
26
34
32
19
30
11
Avg Quote d pri ces (INR/sf)

Avg. s al es pri ces (INR/sf)
113
40
40
49
26
19
Pricing trend
5,500
124
112
103
93
84
91
89
82
79
6870
66 59 69 62
19232723262027221823312126202522
4,500
3,500
2,500
3QCY09
4QCY09
1QCY10
2QCY10
3QCY10
4QCY10
1QCY11
2QCY11
3QCY11
4QCY11
1QCY12
2QCY12
3QCY12
4QCY12
1QCY13
2QCY13
3QCY09
4QCY09
1QCY10
2QCY10
3QCY10
4QCY10
1QCY11
2QCY11
3QCY11
4QCY11
1QCY12
2QCY12
3QCY12
4QCY12
1QCY13
2QCY13
3QCY09
4QCY09
1QCY10
2QCY10
3QCY10
4QCY10
1QCY11
2QCY11
3QCY11
4QCY11
1QCY12
2QCY12
3QCY12
4QCY12
1QCY13
2QCY13
1,500
Bangalore: Outperformance prevails; inventory and prices rose but still manageable; sales velocity revived
in 2Q post a decline in the past couple of quarters (partly due to lower launches)
Sales performance trend
S al es vol ume (msf)
S al es val ue (INR b)
63
54
54
67 43
3536 33 35
27 23 30
50
23 23
39
12
In ven tory ask pri ces (INR/sf)

S ol d p ri ce s (INR/sf)
5,200
4,400
3,600
2,800
2QCY09
3QCY09
4QCY09
1QCY10
2QCY10
3QCY10
4QCY10
1QCY11
2QCY11
3QCY11
4QCY11
1QCY12
2QCY12
3QCY12
4QCY12
1QCY13
2QCY13
8 4 8 8 1110 7 9 7 9 14111616121013
1QCY09
2QCY09
3QCY09
4QCY09
1QCY10
2QCY10
3QCY10
4QCY10
1QCY11
2QCY11
3QCY11
4QCY11
1QCY12
2QCY12
3QCY12
4QCY12
1QCY13
2QCY13
Pricing trend
2,000
1QCY09
3QCY09
1QCY10
3QCY10
1QCY11
3QCY11
1QCY12
3QCY12
1QCY13
23
18
16
20
22
22
30
18
17
12
9
13
17
23
34
30
30
68
Launch volume trend (msf)
Source: Liases Foras/MOSL

October 2013
C145
Overall leasing run-rate continues to weaken, with cautious sentiment, barring better resilience in Bangalore market.
Overall vacancy level improved; absorption outpaces supply. Bangalore remains the better among bigger markets.
3QFY11
4QFY11
1QFY12
2QFY12
3QFY12
4QFY12
1QFY13
2QFY13
1.6
2.4
1.6
0.8
0.6
7.0
2.0
1.0
0.8
0.6
0.3
4.7
1.0
2.7
1.7
0.3
0.3
6.0
0.7
0.5
0.7
0.6
0.2
0.3
0.2
3.1
1.7
2.7
2.3
0.6
0.6
1.0
0.2
9.1
1.1
1.6
0.7
1.2
0.5
0.1
0.5
5.7
1.3
1.5
0.7
1.5
1.0
0.1
0.2
6.3
0.8
1.0
0.6
1.0
0.8
0.3
4.5
1.0
1.0
2.4
0.6
0.4
0.6
1.4
7.4
1.6
1.2
3.0
1.2
0.5
0.4
0.5
8.4
0.9
1.1
3.6
0.7
0.5
0.5
0.2
7.5
1.7
0.4
1.8
0.7
0.3
0.5
0.5
5.9
1.2
0.9
3.0
0.8
0.4
0.8
0.5
7.6
1.1
1.2
1.6
1.4
0.4
0.9
0.3
6.8
0.7
1.3
1.0
0.9
0.3
0.5
0.1
4.9
1.2
1.0
4.2
0.9
0.4
0.3
0.2
8.2
32
24
18
27
28
10
21
24
31
23
16
25
26
11
19
22
31
23
15
24
26
10
18
22
30
23
14
24
25
10
15
22
30
23
13
23
25
10
14
21
31
22
14
20
25
8
17
20
32
22
13
22
24
11
18
21
31
22
13
20
22
11
18
20
Source: DTZ
Supply (msf)
NCR
Mumbai
Bangalore
Chennai
Pune
Hyderabad
Kolkata
India
Absorption (msf)
NCR
Mumbai
Bangalore
Chennai
Pune
Hyderabad
Kolkata
India
Vacancy (%)
NCR
Mumbai
Bangalore
Chennai
Pune
Hyderabad
Kolkata
India
CMP (INR)
27.09.13
Real Estate
Anant Raj Inds
DLF
Godrej Properties
HDIL
Indiabulls Real Est.
Jaypee Infratech
Mahindra Lifespace
Oberoi Realty
Phoenix Mills
Prestige Estates
Unitech
Sector Aggregate
UR: Under Review
October 2013
42
132
346
37
55
16
406
166
237
123
16
Rating
EPS (INR)
FY13 FY14E FY15E
P/E (x)
FY13 FY14E FY15E
EV/EBITDA (x)
FY13 FY14E FY15E
RoE (%)
FY13 FY14E FY15E
Buy
Buy
Neutral
UR
Buy
Buy
Buy
Buy
Buy
Buy
Buy
3.6
4.2
17.7
1.7
4.1
5.0
34.6
15.4
5.8
8.2
0.8
11.6
31.4
19.5
21.3
13.3
3.2
11.7
10.8
40.8
15.0
20.3
14.7
16.2
17.7
14.7
8.0
7.5
6.8
10.2
7.2
21.1
11.0
29.8
13.1
2.7
2.6
9.6
0.7
2.5
11.6
10.9
12.8
4.8
10.4
1.8
4.2
4.7
4.5
21.4
6.8
6.9
6.3
31.6
16.8
7.0
10.2
1.2
5.5
6.5
32.8
8.9
13.8
6.2
41.3
22.0
13.5
13.3
1.5
8.9
29.2
16.2
5.5
7.9
2.5
12.8
9.9
33.8
12.0
13.0
13.0
7.6
20.2
10.6
4.2
4.0
2.6
9.8
7.6
17.6
9.2
10.9
9.9
11.4
13.1
14.3
9.8
6.4
4.6
13.0
6.1
12.3
8.8
23.3
10.3
9.9
11.6
9.6
7.7
4.0
4.6
10.7
4.2
9.4
6.7
18.9
8.6
3.5
2.8
11.2
2.7
4.4
13.4
9.2
12.5
5.5
11.7
2.8
4.5
4.0
3.9
15.3
3.4
7.9
11.8
10.8
14.6
9.9
13.4
3.3
5.6
C146

Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
ARCP IN
294.6
12 / 0.2
104 / 41
-14 / -38 / -44
CMP: INR42

Y/E March
Net Sales
EBITDA
Adj PAT
Adj EPS (INR)
EPS Growth (%)
BV/Share (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2012 2013 2014E

3.1
5.6
5.8
1.7
1.6
2.1
1.1
1.1
1.4
3.8
3.6
4.7
-32.5
-6.6 31.1
129.9 132.8 137.0
3.1
2.7
3.5
3.6
3.1
3.8
11.7
0.0
9.7
10.9
0.3
13.4
1.0
11.6
0.3
16.2
0.0
8.9
0.3
11.9
1.0
2015E
6.5
2.4
1.6
5.5
16.2
142.0
4.0
4.4
8.3
7.6
0.3
9.9
1.0
Buy
2QFY14 P&L to improve QoQ due to INR0.5b of land divestment in

June 2013, which is likely to contribute ~INR0.35b to EBITDA. However,
cost escalations in key ongoing projects are likely to dent margins.
Overall, we estimate 6pp QoQ uptick in EBITDA margin.
EBITDA to de-grow -41% YoY to INR424m. Revenue is estimated at
INR1b (-27% YoY), while PAT to decline 41% YoY to INR296m.
Revenue from POCM projects and rentals to remain flat QoQ. Higher
operating time in Hotel Retreat (for the full quarter post renovation)
may lead to moderate incremental revenue growth to INR184m YoY
(INR11m QoQ). New leasing continues to be muted in Manesar and
Rai IT Park.
Pre-sales momentum would remain dependent on Golf Course Road
projects (across plots, villas and row houses), while QoQ pre-sales in
Neemrana (140 unit) and Sector 91 project (16 unit) have been
comparatively better. ARCP plans to launch the Golf Course group
housing project (2.6msf) during Diwali, which could accelerate presales momentum.
Core operations have been subdued, with disappointment in cash
flow trends and rental assets. The stock trades at 7.6x FY15E EPS of
INR5.5 and 0.3x FY15E BV. Maintain Buy with a target price of INR60.

Cash collections were disappointing so far. Any improvement would
be a key factor as the company is also acquiring new land.
Sales velocity in Golf Course Road project.
Any positive surprises on Bhagwandas and Hauz Khas monetization.
(INR Million)
Y/E March
Total Sales
Change (%)
Total Expenditure
EBITDA
Change (%)
As of % Sales
Depreciation
Interest
Other Income
PBT
Tax
PAT before MI
Change (%)
Reported PAT
Change (%)
E MOSL Estimates
October 2013
FY13
1Q
989
18.0
488
501
1.5
51
32
37
44
475
110
23
354
1.0
355
1.2
2Q
1,373
50.5
656
717
40.8
52
33
41
41
683
185
27
499
37.5
502
44.6
3Q
1,818
97.3
1,058
760
55.0
42
34
41
42
727
178
26
549
61.7
548
74.1
FY14
4Q
1,406
212.9
1,778
-372
-286.8
-26
41
38
39
-412
-64
16
-348
-403.8
-362
-396.6
1Q
800
-19.1
509
291
-41.8
36
35
33
41
265
63
24
201
-43.2
194
-45.3
2QE
1,009
-26.5
585
424
-41
42
37
35
45
397
101
26
296
-40.7
296
-41.1
3QE
1,569
-13.7
1,052
518
-31.8
33
41
37
50
490
127
26
363
-34.0
358
-34.8
4QE
2,434
73.1
1,614
820
-320.4
34
42
39
44
783
211
27
572
-264.4
567
-256.6
FY13
FY14E
5,586
79.3
3,981
1,605
-5.5
29
140
157
166
1,473
409
27.8
1,060
-10.5
1,060
-6.6
5,813
4.1
3,760
2,053
27.9
35
155
144
179
1,933
503
26.0
1,430
34.9
1,390
31.1
C147
DLF
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
DLFU IN
1,780.8
235 / 4
289 / 120
-9 / -49 / -50
CMP: INR132

Y/E March
Net Sales
EBITDA
Adj PAT
EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2012 2013 2014E

96.3 77.7 89.3
39.0 26.3 33.9
11.8
7.1
8.0
7.1
4.2
4.5
-26.8 -40.8
7.6
150.9 152.9 158.5
4.5
2.6
2.8
7.4
6.0
6.1
33.1 55.8 51.9
18.6
0.9
11.5
1.5
31.4
0.9
16.8
1.5
29.2
0.8
12.4
1.5
2015E
96.8
36.9
11.6
6.5
44.7
154.9
3.9
6.6
35.9
20.2
0.9
11.3
1.5
Buy
DLF's 2QFY14E revenue is estimated at INR20.5b (flat YoY), EBITDA at

INR7.7b (+3.5% YoY) and PAT at INR1.36b (-2% YoY). EBITDA margin is
estimated at 37.5% (-2pp QoQ).
Launch of Camellia had resulted in strong revenue booking and margin
expansion in 1QFY14. Hence, we expect relatively lower incremental
pre-sales and execution in Camellia would lead to weaker revenue
booking and margin contraction in 2QFY14E.
DLF had assumed INR0.77b of profit in 1QFY14 which pertains to one
of the wind mills transactions. Thus, 2Q EBITDA margin could get
impacted due to provisioning of remaining divestments.
Post strong pre-sales in super luxury projects in 1QFY14, DLF is expected
to witness a decline in run-rate in 2Q (~INR7.5b), due to the absence
of new launches and lower pre-sales velocity in recent launches.
Expect cash flow situation to improve QoQ, with receipt of balance
INR5.25b from wind mills' divestments, along with improvement in
collections from super luxury projects. However, core FCFE would
continue to remain negative.
DLF trades at 20.2x FY15E EPS, 0.9x FY15E BV and ~50% discount to our
NAV estimate of INR270. Maintain Buy with a target price of INR230.

Pre-sales and launch momentum; execution in line with
management's guidance.
Clarity on Aman Resort and other planned divestments.
Trend in FCFE and leverage, where management has guided for a
strong improvement in 2HFY14.
(INR Million)
Y/E March
Sales
Change (%)
Total Expenditure
EBITDA
Change (%)
As % of Sales
Depreciation
Interest
Other Income
PBT
Tax
Reported PAT
Adj. PAT
Change (%)
E: MOSL Estimates
October 2013
FY13
1Q
21,977
(10.1)
11,307
10,670
-4.0
48.6
1,786
6,226
1,311
3,970
1,137
29
2,928
2,928
(18.3)
2Q
20,395
-19.5
12,932
7,464
-36.4
36.6
1,837
5,224
1,173
1,575
394
25.0
1,385
1,385
(62.8)
3Q
13,100
-35.6
12,230
870
-89.4
6.6
2,479
5,809
9,812
2,395
-84
-3.5
2,848
2,848
10.2
FY14
4Q
22,256
-15.0
14,998
7,258
-9.0
32.6
1,861
5,882
932
118
-196
-165.5
-42
-42
(102.0)
1Q
23,141
5.3
13,985
9,156
-14.2
39.6
1,782
5,914
1,391
2,909
913
31.4
1,812
1,812
(38.1)
2QE
20,537
0.7
12,815
7,722
3.5
37.6
1,786
5,624
1,345
1,656
414
25
1,362
1,362
(1.7)
3QE
22,769
73.8
14,231
8,538
881.2
37.5
1,801
5,294
1,399
2,843
711
25.0
2,282
2,282
(19.9)
4QE
22,844
2.6
14,387
8,457
16.5
37.0
1,834
5,225
1,245
2,644
661
25.0
2,287
2,287
LTP
FY13
FY14E
77,728
-19.3
51,466
26,262
-32.7
33.8
7,962
23,140
13,229
8,059
1,251
15.5
7,119
7,119
(40.7)
89,290
14.9
55,417
33,873
29.0
37.9
7,202
22,056
5,380
9,993
2,698
27.0
8,022
8,022
12.7
C148
Jaypee Infratech
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
JPIN IN
1,388.9
22 / 0.4
59 / 14
-8 / -65 / -77

Y/E March
Net Sales
EBITDA
Adj PAT
Adj EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2012
31.6
16.5
12.9
9.3
-10.1
41.6
24.5
13.8
12.6
2013 2014E
32.7 40.9
14.8 20.2
6.9
8.7
5.0
6.3
-46.2 25.9
44.5 49.6
11.6 13.4
10.9 13.9
23.4 18.6
1.7
0.4
5.3
6.3
3.2
0.4
6.8
6.3
2.5
0.3
4.6
6.3
2015E
40.4
19.9
8.6
6.2
-2.0
54.6
11.8
13.1
19.0
2.6
0.3
4.6
6.3
CMP: INR16
Buy
We expect revenue at INR9.6b (+36% YoY), EBITDA at INR4.4b (+24%),

margin at 46.4% (+2.8pp QoQ) and PAT at INR1.7b (-8.5% YoY).
We have assumed INR3.75b of land revenue (from INR15b of
divestment concluded in 1QFY14), and INR335m of expressway
revenue (v/s INR290m in 1QFY14).
Pre-sales momentum is expected to remain subdued due to current
dynamics of Noida and Parcel 3. We maintain FY14E pre-sales estimate
at INR24b (v/s 1QFY14 pre-sales of INR4b).
Weakening operations and high leverage level have been key
concerns. JPIN trades at 2.6x FY15E EPS, 0.3x FY14E BV. Maintain Buy.
Traffic growth and toll revenue trend in expressway.
Response to Parcel 3 Agra launches and overall market outlook.
Any further divestment plan and deleveraging.
(INR Million)
Y/E March
Sales
Change (%)
Total Expenditure
EBITDA
Change (%)
As of % Sales
Depreciation
Interest
Other Income
PBT
Tax
Reported PAT
Change (%)
Adj PAT
Change (%)
E: MOSL Estimates
October 2013
FY13
1Q
6,783
9.9
4,062
2,721
-8.5
40.1
6
98
8
2,625
525
20.0
2,099
-11.7
2,099
-11.7
2Q
7,047
-1.5
3,462
3,584
-8.9
50.9
35
1,323
35
2,262
453
20.0
1,810
-41.7
1,810
-41.7
3Q
9,331
3.4
5,107
4,224
-15.0
45.3
54
2,259
27
1,939
388
20.0
1,551
-60.5
1,551
-60.5
FY14
4Q
9,582
4.1
5,344
4,238
-2.7
44.2
55
2,435
109
1,857
371
20.0
1,485
-57.5
1,485
-57.5
1Q
7,692
13.4
4,340
3,352
23.2
43.6
86
2,315
74
1,025
215
21.0
810
-61.4
810
-61.4
2QE
9,590
36.1
5,144
4,446
24.0
46.4
100
2,350
100
2,096
440
21.0
1,656
-8.5
1,656
-8.5
3QE
15,252
63.4
6,386
8,866
109.9
58.1
130
2,300
125
6,561
1,378
21.0
5,183
234.2
5,183
234.2
4QE
8,342
-12.9
4,778
3,564
-15.9
42.7
166
2,235
224
1,387
292
21.0
1,095
-26.2
1,095
-26.2
FY13
Cons.
32,743
3.8
17,976
14,767
-10.5
45.1
149
6,115
179
8,682
1,737
20.0
6,945
-46.2
6,945
-46.2
FY14E
Cons.
40,876
24.8
20,648
20,228
37.0
49.5
482
9,200
523
11,069
2,324
21.0
8,744
25.9
8,744
25.9
C149
Mahindra Lifespaces
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
MLIFE IN
40.8
17 / 0.3
472 / 327
-18 / 2 / 2

Y/E March
Net Sales
EBITDA
Adj PAT
Adj EPS (INR)
EPS Growth (%)
BV/Share (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2012
7.0
1.9
1.2
29.2
10.1
283
10.3
10.9
22.8
2013 2014E
7.4
7.2
2.4
2.1
1.4
1.3
34.6 31.6
18.7
-8.8
317
344
10.9
9.2
11.4
9.5
18.4 20.7
13.9
1.4
11.4
1.2
11.7
1.3
10.2
1.2
12.8
1.2
13.0
1.2
2015E
7.6
2.3
1.7
41.3
30.6
382
10.8
11.6
15.8
9.8
1.1
10.7
1.2
CMP: INR406
Buy
Mahindra Lifespaces' (MILFE) 2QFY14E standalone revenue is

estimated to grow 3.6% YoY to ~INR868m. EBITDA is expected to
decline 7.7% YoY to INR139m (margin at 16%, v/s 18% YoY and 14%
QoQ) and PAT to de-grow 25% YoY to INR235m. We estimate Antheia
Phase I and Ashvita Phase II to commence revenue in 2QFY14E.
In the absence of new launches, we expect pre-sales to remain
subdued and driven by Nagpur, Hyderabad and Chennai. While launch
pipeline, post recent acquisitions, has been strong, it hinges on
progress in approvals. We estimate FY14E pre-sales at INR4.9b (v/s
INR4.5b in FY14).
The stock trades at 14% discount to our one-year forward SOTP value
of INR482/share, 9.8x FY15E EPS and 1.1x FY15E BV. Maintain Buy.
Progress in approvals in recent acquisitions.
Trend in gearing level.
Leasing progress in Jaipur DTA and clarity on possible re-sizing.
Progress of land acquisition in North Chennai SEZ.

Y/E March
(INR Million)
FY13
FY14
1Q
2Q
3Q
4Q
1Q
2QE
3QE
4QE
Sales
1,041
838
614
1,022
670
868
885
981
Change (%)
27.8
-10.6
-60.1
-27.0
-35.6
3.6
44.2
-3.9
Total Expenditure
723
688
524
850
577
729
726
825
EBITDA
319
151
91
172
93
139
159
156
As % of Sales
30.6
18.0
14.7
16.8
13.9
16.0
18.0
15.9
Change (%)
84.8
-41.7
-80.4
-46.1
-70.8
-7.7
76.1
-9.0
Depreciation
4
4
4
5
5
7
7
7
Interest
14
14
19
15
107
116
126
135
Other Income
134
301
133
140
237
311
234
237
Extra-ordinary
0
0
0
-1
0
0
0
-1
PBT
434
433
200
292
218
327
261
252
Tax
141
119
64
60
60
91
73
71
32.5
27.5
31.0
20.5
27.6
28.0
28.0
28.3
Reported PAT
293
314
136
232
158
235
188
181
Adj. PAT
293
314
136
232
158
235
188
181
Change (%)
71.5
-0.1
-65.7
-27.7
-46.2
-25.1
38.7
-22.2
E: MOSL Estimates; *Revenue outside Standalone is largely contributed by Mahindra World City (MWC) Chennai
October 2013
FY13
FY14E
3,515
3,405
-25.0
-3.1
2,784
2,858
731
547
20.8
16.1
-39.6
-25.1
18
27
62
483
707
1,019
2
2
1,359
1,056
384
296
28.3
28.0
975
760
975
760
-18.9
-22.0
and Jaipur
C150
Oberoi Realty
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
OBER IN
328.2
55 / 1
328 / 154
-9 / -40 / -44
CMP: INR166
We expect OBER's 2QFY14E revenue to degrow 23% YoY to INR2b,

EBITDA down 23% YoY to INR1.1b and PAT to de-grow 21% to INR1b,
with EBITDA margin of 58%.
Esquire has received IOD and is expected to witness revival in

construction followed by revenue recognition by 4QFY14. Till then,
Exquisite will continue to remain the key revenue driver, with no
inventory left in completed projects at JVLR (Splendor and Grande).
We expect sales volume to remain subdued in the absence of any

major contribution of JVLR projects and weakening velocity at Esquire.
While IOD at Esquire should improve buyers' sentiment hereon,
2QFY14E is likely to remain muted.

Y/E March
Net Sales
EBITDA
Adj PAT
Adj EPS (INR)
EPS Growth (%)
BV/Share (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2012 2013 2014E

8.2 10.5 12.0
4.8
6.1
6.8
4.6
5.0
5.5
14.1 15.4 16.8
-10.5
9.1
9.0
113.8 126.8 141.2
13.1 12.8 12.5
17.1 17.3 17.3
16.6 15.2 14.0
11.8
1.5
8.6
1.2
10.8
1.3
7.2
1.2
2015E
15.0
9.4
7.2
22.0
31.4
159.7
14.6
20.5
15.9
9.9
1.2
6.1
1.2
7.6
1.0
4.2
1.8
Buy

Sales momentum in Esquire (Goregaon) and Grande (Andheri).
Visibility on new launches (Mulund/Phase III of Exquisite).
Clarity over Oasis launch.
Leasing visibility in Commerz II.
Visibility on change in usage at JVLR project from commercial to
residential.
Visibility on new project acquisitions.
(INR Million)
Y/E March
Total Revenue
Change (%)
Total Expenditure
Adm Exp
Construction Exp
Employee Cost
EBITDA
Change (%)
As of % Sales
Depreciation
Interest
Other Income
PBT
Tax
Reported PAT
Change (%)
E: MOSL Estimates
October 2013
FY13
1Q
1,999
24.2
860
67
697
96
1,139
26.1
57
70
1
309
1,376
368
26.8
1,008
-4.7
2Q
2,577
15.7
1,081
73
910
98
1,496
29.5
58
71
1
250
1,674
430
25.7
1,244
11.6
3Q
2,861
52.8
1,155
69
987
99
1,707
50.5
60
71
1
219
1,854
509
27.5
1,345
31.7
FY14
4Q
3,039
19.3
1,260
48
1,122
91
1,779
8.3
59
72
1
221
1,927
475
24.7
1,452
1.1
1Q
2,184
9.3
849
63
689
97
1,335
17.2
61
69
1
210
1,476
457
31.0
1,018
1.0
2QE
1,980
-23.2
830
74
646
110
1,150
-23.1
58
88
1
291
1,351
365
27.0
986
-20.7
3QE
2,156
-24.6
906
74
722
110
1,251
-26.7
58
88
1
315
1,477
414
28.0
1,063
-20.9
4QE
5,659
86.2
2,611
84
2,403
124
3,048
71.3
54
108
1
396
3,335
904
27.1
2,431
67.5
FY13
FY14E
10,476
27.0
4,355
257
3,715
383
6,121
26.6
58.4
285
4
999
6,827
1,783
26.1
5,045
9.1
11,980
14.4
5,196
295
4,460
441
6,783
10.8
57
353
0
1,212
7,638
2,140
28.0
5,498
9.0
C151
Phoenix Mills
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
PHNX IN
144.8
34 / 1
293 / 181
6 / -16 / 16

Y/E March
Net Sales
EBITDA
Adj PAT
EPS (INR)
EPS Growth (%)
BV/Share (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2012 2013 2014E

3.9
4.7 11.0
2.1
2.6
4.8
1.1
0.8
1.0
7.3
5.8
7.0
25.5 -20.3 20.6
118.1 122.1 126.8
6.2
4.8
5.5
6.1
6.6
9.5
32.1 40.3 33.4
32.5
2.0
23.7
0.8
40.8
1.9
21.1
0.8
2015E
14.0
6.1
2.0
13.5
92.4
136.7
9.9
11.6
26.0
33.8
1.9
12.3
0.8
17.6
1.7
9.4
1.3
CMP: INR237
Buy
We expect High Street Phoenix's (HSP) 2QFY14E rentals at INR746m,

(12% YoY), EBITDA at INR492m (margin of 66%) and PAT of INR362m
(9.7% YoY). The rental growth is led by a steady rise in revenue sharing
component (which stands at ~15%) and higher incremental rentals.
We expect 11% CAGR in HSP rentals in FY14E.
HSP Hotel, post termination of contract with Shangri La, is named as
Palladium for the interim period, and is in an advanced stage of
negotiation with a new hotel operator. The hotel is operating with 228
rooms, with the expansion plan stalled briefly.
Expect pre-sales in Phase II of market development to remain
subdued, with lower inventory under offer and sequential weakness
in markets. Launch of Pune residential is scheduled for pre-Diwali.
It plans to launch ~4msf of residential projects over next 12 months,
including Bangalore East (1msf), Phase II of Bangalore West (2msf),
Pune (0.3msf) and last phase of Chennai (0.4msf).
There has been an acquisition of the balance 3.3% stake from Horizon
in Island Star in 2QFY14 (with o/f of ~INR87m).
The stock trades at a PER of 17.6x FY15E EPS of INR13.5, 1.7x FY15E BV
and 16% discount to its one-year forward NAV of INR282. Maintain
Buy.

Sales momentum in Phase II projects in Market City.
Progress on ramp-up in recently-commenced malls.
Improvement in operating cash flow, which can lead to de-leveraging.
Progress in proposed stake purchase in Market City projects.
(INR Million)
Y/E March
Sales
Change (%)
EBITDA
Change (%)
As % of Sales
Depreciation
Interest
Other Income
PBT
Tax
Adj. PAT
Change (%)
E: MOSL Estimates
October 2013
FY13
1Q
626
17.0
394
19.3
63
67
58
143
413
107
26
306
12.4
2Q
665
23.4
438
31.4
66
69
72
156
454
123
27
330
38.2
FY14
3Q
693
20.1
474
27.0
68
69
70
126
461
120
26
341
26.9
4Q
722
20.3
479
31.8
66
71
66
140
483
122
25
361
32.2
1Q
698
11.5
475
20.4
68
65
72
215
553
135
24
418
36.7
2QE
746
12.2
492
12.3
66
69
68
130
485
123
27
362
9.7
3QE
746
7.6
500
5.4
67
69
70
125
486
120
27
366
7.3
4QE
793
9.9
532
11.1
67
71
68
130
522
134
26
389
7.6
FY13
Cons.
4,699
19.1
2,632
24.5
56.0
474
1,430
521
1,248
428
34.3
842
-20.3
FY14E
Cons.
10,970
133.4
4,822
83.2
44.0
973
2,872
529
1,507
497
33.0
1,015
20.6
C152

Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
PEPL IN
350.0
43 / 1
195 / 105
-3 / -29 / -16
CMP: INR123

Y/E March
Net Sales
EBITDA
Adj PAT
Adj EPS (INR)
EPS Growth (%)
BV/Share (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2012 2013 2014E

10.5 19.5 24.1
3.0
5.8
7.2
0.8
2.9
3.6
2.4
8.2 10.2
-51.7 246.2 24.8
65.6 78.4 87.1
3.8 10.4 11.7
6.6 11.7 12.5
55.8 17.2 13.8
51.9
1.9
19.2
1.0
15.0
1.6
11.0
1.0
2015E
30.8
9.3
4.7
13.3
30.3
99.0
13.4
15.1
10.6
12.0
1.4
8.8
1.0
9.2
1.2
6.7
1.0
Buy
We expect P&L to maintain strengths, with INR4.4b of revenue

booking and margins of 27%, translating into EBITDA of INR1.2b (+65%
YoY), and PAT of INR739m (+62% YoY).
We expect key projects to commence and contribute to POCM revenue
in 2QFY14E -- Royal Woods and Technopolish. QoQ decline is assumed
due to lower number of fresh projects commencing revenue.
During 2QFY14, PEPL launched super premium villas Silver Spring,
Chennai (@INR9,800/sf, ticket size of INR60m) and Royal Garden Phase
II, Bangalore (1.69msf, @INR4,200/sf). We estimate pre-sales of INR89b in 2QFY14E (v/s INR8.2b YoY and INR10.2b QoQ). We estimate FY14E/
15E pre-sales at INR36/38b.
Rentals are expected to increase by INR50-60m QoQ to INR6.3b due to
higher contribution from full quarter operations at Vijaya Mall (one
month in 1QFY14) and Exora B3. Cessna Block 7 would commence
revenue from October 2013. Vijaya Mall is operating at 68% occupancy,
with commencement of Satyam Cinema being awaited.
The stock trades at 9.2x FY15E EPS, 1.2x FY15E BV and at 39% discount
to our NAV estimate of INR202. Maintain Buy with a target price of
INR180.

Outlook of Bangalore residential market and leasing.
Execution progress in ongoing projects, collections and movements
of debtors.
Cash flow dynamics, land acquisition and debt movements.
(INR Million)
Y/E March
Total Revenue
Change (%)
Total Expenditure
EBITDA
Change (%)
As of % Sales
Depreciation
Interest
Other Income
PBT
Tax
Reported PAT
Change (%)
E: MOSL Estimates
October 2013
FY13
1Q
2,192
-12
1,488
704
2.1
32.1
77
240
272
659
166
25.2
493
35.3
2Q
2,414
88.5
1,689
725
47.2
30.0
83
191
195
647
190
29.3
457
73.9
3Q
4,921
195
3,497
1,424
184.1
28.9
83
209
195
1,328
407
30.7
920
227.9
FY14
4Q
5,597
177
4,277
1,321
92.5
23.6
87
258
278
1,253
363
28.9
890
132.6
1Q
4,983
127
3,694
1,289
83.2
25.9
80
257
310
1,263
396
31.4
867
75.8
2QE
4,419
83.0
3,226
1,193
64.6
27.0
99
269
246
1,072
332
31.0
739
61.8
3QE
4,611
-6
3,297
1,314
-7.7
28.5
112
269
252
1,185
367
31.0
818
-11.2
4QE
5,200
-7
3,578
1,622
22.8
31.2
139
281
240
1,441
442
30.7
999
12.2
FY12
Cons.
19,476
85.1
13,685
5,791
95.2
30
682
1,489
636
4,256
1,314
30.9
2,941
246.2
FY13E
Cons.
24,073
23.6
16,854
7,219
24.7
30
834
1,671
676
5,390
1,671
31.0
3,719
24.8
C153
Unitech
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
UT IN
2,438.8
40 / 1
41 / 15
-11 / -36 / -39

Y/E March
Net Sales
EBITDA
Adj PAT
Adj. EPS (INR)
EPS Growth (%)
BV/Share (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2012
24.2
3.3
2.4
0.9
-58.2
37.8
2.0
2.8
0.0
2013 2014E
24.4 27.4
3.3
4.2
2.1
3.3
0.8
1.2
-11.7 55.7
35.2 36.1
1.8
2.8
2.7
2.8
0.0 12.8
18.2
0.4
29.4
0.0
20.7
0.5
30.9
0.0
13.3
0.5
24.2
0.9
2015E
30.4
5.1
3.9
1.5
19.3
45.6
3.3
3.2
10.7
11.1
0.4
19.6
0.9
CMP: INR16
Buy
We expect only a moderate growth in 2QFY14 P&L as execution

improvement has been subdued. We estimate revenue at INR6.2b
(+15% YoY), EBITDA at INR0.9b (+8% YoY) and PAT at INR711m (+0.7%
YoY). Margin is estimated at 14.2% (v/s 13.1% in 1QFY14).
Focus on new launches has been low till date. It is preparing grounds
to launch the luxury project Ivy Terraces in sector 70, Gurgaon, which
would be the first major launch in the city after a long hiatus. It is also
planning to launch The Palm at Noida (Sector 117).
Due to limited fresh launches and weakness in Noida market (which
has been a key sales driver in FY13), we expect pre-sales to remain
subdued in 2QFY14E.
UT trades at 60% discount to its one-year forward NAV estimate of
INR40 and 11.1x FY15E EPS and 0.4x FY14E BV. Maintain Buy.
Sales momentum on the back of lesser new launches (estimate
INR21b in FY14E).
Progress in construction and delivery (company aims at INR4-4.5b/
qtr run-rate v/s INR3b currently), along with an improvement in
debtor days.
Cash flow health and repayment need.
(INR Million)
Y/E March
Sales
Change (%)
Total Expenditure
EBITDA
Change (%)
As of % Sales
Depreciation
Interest
Other Income
Prior period adjustment
PBT
Tax
Reported PAT
Change (%)
Adjusted PAT
Change (%)
October 2013
FY13
1Q
4,077
-33.8
3,530
547
-54.3
13.4
99
117
345
-1
677
261
38.5
373
-63.5
374
-62.0
2Q
5,398
-13.8
4,580
818
-40.8
15.2
98
87
340
-268
973
240
24.7
439
-53.3
707
-23.6
3Q
6,447
26.8
5,340
1,107
7.6
17.2
98
84
346
0
1,272
415
32.6
842
46.4
841
52.4
FY14
4Q
8,483
26.3
7,685
797
-1,567
9.4
104
17
857
269
1,533
463
30.2
304
-180.4
1,070
4,636
1Q
5,726
40.4
4,974
752
37.4
13.1
112
57
251
3
834
264
31.6
570
52.7
629
68.2
2QE
6,230
15.4
5,345
885
8.1
14.2
102
60
283
0
1,006
342
34.0
664
51.4
711
0.7
3QE
6,861
6.4
5,763
1,098
-0.9
16.0
111
65
273
0
1,195
406
34.0
788
-6.3
840
-0.1
4QE
8,627
1.7
7,116
1,511
89.5
17.5
118
80
283
1
1,596
562
35.2
1,034
240.1
1,086
1.4
FY13
FY14E
24,405
0.8
21,135
3,270
-0.3
13.4
398
305
1,888
0
4,454
1,378
30.9
2,095
-15.2
3,130
31.9
27,444
12.4
23,198
4,245
29.8
15.5
443
262
1,090
0
4,630
1,574
34.0
3,056
45.9
3,262
4.2
C154
September 2013 Results Preview | Sector: Retail
Retail
Companies Covered
For the quarter ended September 2013, we expect our Retail Universe to post flat
sales and 3.3% EBITDA decline. Excluding Future Retail (FRL), which has undergone
restructuring, aggregate sales, EBITDA and PAT should grow 17%, 11% and 8.2%,
respectively. Speciality retailers like Titan Industries (TTAN) and Jubilant Foodworks
(JUBI) will continue to report subdued numbers due to pressure on discretionary
consumption. For traditional retailers, we expect continuation of 8-10% same store
sales (SSS) growth.
Future Retail
Jubilant Foodworks
Shoppers Stop
Titan Industries
Demand remains muted

Consumer sentiment and footfalls remain subdued. The quarter saw Independence
Day sale and end of season discount sale. Post the strong 67% volume growth in
1QFY14, TTAN's Jewelry division should report single-digit volume growth in 2Q, as
gold price has spiked. This coupled with supply issues post RBI's 20:80 guidelines has
exacerbated the situation on the ground. For JUBI, we expect 6-8% SSS growth,
impacted by splitting of stores and weaker consumer sentiment. For FRL and Shoppers
Stop (SHOP), we expect high single-digit SSS growth.
Space expansion selective

Retail space expansion continues. SHOP opened three stores and closed one during
the quarter. We expect JUBI to have opened ~30 stores. We expect traditional retailers
to continue expanding, notwithstanding the weak consumer sentiment, as they
believe there could be shortage of quality retail space after three years.
Regulatory actions continue in Jewelry segment

RBI has continued with its regulatory onslaught on the Jewelry segment. It has linked
gold imports to exports and has introduced the 20:80 scheme, whereby 20% of the
imported quantity will be earmarked for exports and the next import consignment
will be permitted only after 75% of the earlier 20% quantity is actually exported. It has
also withdrawn the Gold-On-Lease scheme. The cumulative impact of all this will be
reflected in TTAN's return ratios, working capital and leverage, as its balance sheet
turns net debt from net cash. Our ground level checks suggest supply issues for
jewelers, widening of premium and rising price gap between branded and 'mom and
pop' jewelers due to surge in smuggled quantities.
Future Retail
Jubilant Foodworks
Shopper's Stop
Titan Industries
Sector Aggregate
CMP
(INR)
27.09.13
71
1,173
356
235
(INR Million)
Rating
Sep.13
UR
Sell
Neutral
Neutral
24,365
4,345
6,868
26,174
61,752
Sales
Var.
% YoY
-20.4
27.0
18.5
15.0
-1.3
Var.
% QoQ
8.0
9.6
27.9
-15.8
-1.9
EBITDA
Sep.13
Var.
% YoY
2,071
-21.8
717
22.2
364
25.2
2,670
7.0
5,822
-3.3
Var.
% QoQ
8.9
7.5
55.9
9.0
10.9
Net Profit
Sep.13
Var.
% YoY
41
39.1
359
10.9
105
63.6
1,905
5.7
2,409
8.6
Var.
% QoQ
LP
5.5
351.5
4.4
15.7
Gautam Duggad (Gautam.Duggad@MotilalOswal.com)

October 2013
C155
No imminent trigger
The Retail sector has been impacted by well entrenched slowdown in discretionary
consumption. The situation has marginally changed in favor of traditional retailers v/
s specialty retailers like TTAN and JUBI. Elongated discount season and low base are
the driving factors, in our view. We expect another subdued quarter with cautious
commentaries. We have a Neutral rating on TTAN and SHOP, and a Sell rating on JUBI.
For FRL, which has recently completed the listing of its newly crafted fashion entity,
Future Lifestyle Fashion, our rating is Under Review.
Shoppers Stop - low base should drive 10% same store growth
Gold prices down 4.1% YoY and up 7% QoQ
LTL Sal es Gr (%)
38.5%
21
36.0%
35.6%
22
16
14
12.2%
5
11
20.0%
12
10
8.0%
10
-1
-6.3% -4.1%
2QFY14
1QFY14
4QFY13
3QFY13
2QFY13
1QFY13
4QFY12
3QFY12
2QFY12
1QFY12
Jun-13
Mar-13
Dec-12
Sep-12
Jun-12
Mar-12
Dec-11
Sep-11
Jun-11
Mar-11
Dec-10
Sep-10
Jun-10
1
Mar-10
Dec-09
23.2%
13
13
32.3%
Jubilant Foodworks' LTL sales growth is weakening consistently

36.7
33.2
30.1
26.2
26.7
22.3
19.8
16.1
1QFY14
6.3
4QFY13
3QFY13
2QFY13
1QFY13
4QFY12
3QFY12
2QFY12
1QFY12
4QFY11
7.7
80
95
70
October 2013
Sep-13
100
Jun-13
90
Mar-13
105
Sep-13
100
Aug-13
110
Jul-13
110
Jun-13
115
Sens ex Index
MOSL Reta il Index
Dec-12
Sens ex Index
MOSL Reta il Index
Sep-12
C156
Area addition plans on track

Shoppers Stop
Jubilant Foodworks
96
100 105 110 112 118 123 128
1QFY14
93
4QFY13
90
3QFY13
Jun-13
Mar-13
Dec-12
Sep-12
87
2QFY13
59
1QFY13
55
4QFY12
55
439
392 411
602
3QFY12
54
364 378
552 576
515
465 489
2QFY12
52
Jun-12
Jun-11
51
Mar-12
Mar-11
Dec-11
Dec-10
12
43
Sep-11
38
12
Ci ties
1QFY12
49
8
36
12
10
9
41
12
Stores
13
4QFY11
12
12
10
Hyperci ty
3QFY11
Shoppers Stop
CMP (INR)
27.09.13
Retail
Jubi. Foodworks
Shopper's Stop
Titan Industries
Sector Aggregate
October 2013
1,173
356
235
Rating
EPS (INR)
FY13 FY14E FY15E
P/E (x)
FY13 FY14E FY15E
EV/EBITDA (x)
FY13 FY14E FY15E
RoE (%)
FY13 FY14E FY15E
Sell
Neutral
Neutral
20.9
4.9
8.2
56.1
73.2
28.7
34.6
29.6
22.7
19.5
21.6
31.2
5.9
42.5
29.3
24.7
7.0
9.0
34.3
10.6
10.1
47.5
51.0
26.2
30.8
34.2
33.6
23.2
25.8
23.5
18.6
18.3
19.3
16.7
14.1
15.6
15.7
26.9
7.9
31.7
26.5
27.2
10.9
28.6
25.4
C157
Future Retail
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
FRL IN
231.6
16 / 0.3
276 / 63
-8 / -57 / -74

Y/E June
Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh.(INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
* 18 months
2009 2010 2011

63.4 89.3 110.1
6.5
8.2
9.6
1.2
1.7
1.9
6.5
8.2
8.7
-18.0 25.8
7.1
119.4 136.1 140.1
5.4
6.0
6.2
12.5 14.2 12.1
10.2
9.8 10.3
13.9
0.8
5.9
0.7
11.0
0.7
4.7
0.9
2012*
122.5
11.0
1.1
4.8
-45.2
139.5
3.4
12.0
25.0
10.3
0.6
5.8
1.0
18.8
0.6
5.9
1.3
CMP: INR71
Under Review
For 3QCY13, reported results will include the numbers of only Future
Retail. The base quarter had numbers of Pantaloon, Brand Factory and
Central. Hence, the quarterly numbers will not be comparable.
We expect Future Retail to report sales of INR24.4b.
SSS growth in the value segment would be 7-8%.
We estimate EBITDA at INR2.07b (8.5% margin).
Interest cost would decline 53% QoQ to INR1.2b, as debt transfer of

Pantaloon Retail format reflects in the numbers.
Adjusted PAT would be INR41m.
Our stock rating is Under Review. The demerger of Future Lifestyle

Fashion is complete and the stock has listed recently.

Same store sales (SSS) performance; commentary on consumer
demand
Clarity on debt and inventory strategy
Quarterly Performance: Core Retailing
(INR Million)
Y/E June
Net Sales
YoY Change (%)
Total Exp
EBITDA
Growth (%)
Margins (%)
Depreciation
Interest
Other Income
PBT
Tax
Rate (%)
Adjusted PAT
YoY Change (%)
E: MOSL Estimates
October 2013
FY12
1Q
29,106
12.8
26,583
2,523
18.6
8.7
828
1,305
79
468
138
29.5
330
-22.8
2Q
28,933
4.9
26,321
2,612
9.6
9.0
877
1,582
40
193
58
30.1
135
-71.4
3Q
30,264
7.6
27,488
2,776
12.0
9.2
887
1,725
16
180
60
33.3
120
-76.2
4Q
29,627
3.6
26,864
2,763
6.9
9.3
929
1,804
28
58
19
33.0
39
-92.1
CY13
5Q
30,600
5.1
27,953
2,647
4.9
8.7
975
1,761
132
44
14
33.0
29
-90.6
6Q
31,708
9.6
28,929
2,779
6.4
8.8
1,215
1,567
69
66
22
33.0
44
-67.2
1Q
23,360
-22.8
21,580
1,780
-35.9
7.6
730
1,160
30
-80
-26
33.0
-54
-144.6
2Q
22,561
-23.9
20,659
1,901
-31.2
8.4
788
1,280
60
-107
0
33.0
-107
-462.8
3QE
24,365
-20.4
22,294
2,071
-21.8
8.5
850
1,200
40
61
20
33.0
41
-
C158
Jubilant Foodworks
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
JUBI IN
63.5
74 / 1
1,397 / 928
0 / -10 / -19
CMP: INR1,173
Sell
We expect Jubilant Foodworks (JUBI) to report 27% increase in sales

to INR4.3b. LTL sales growth would be ~8%.
Discretionary consumption remains weak and should impact quick

service restaurant (QSR) spends too.
JUBI is likely to post 70bp contraction in EBITDA margin to 16.5% due

to higher promotions and Dunkin Donuts expansion costs.
We estimate 11% PAT growth for 2QFY14 to INR359m.
We expect JUBI to have added 30 stores in 2QFY14.
The stock trades at 34.2x FY15E EPS of INR34.3 and does not reflect the
slowdown and cyclicality of business model. Sell.

Y/E March
Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh.(INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2012
10.2
1.9
1.1
16.6
48.9
45.6
36.4
48.9
0.0
2013 2014E
14.1 18.6
2.4
3.1
1.4
1.6
20.9 24.7
26.0 18.0
67.1 91.8
31.2 26.9
42.8 38.2
0.0
0.0
70.6
25.7
39.6
0.0
56.1
17.5
30.1
0.0
47.5
12.8
23.9
0.0
2015E
24.8
4.2
2.2
34.3
38.9
126.1
27.2
38.7
0.0
34.2
9.3
16.9
0.0
Management comments on demand outlook

Performance of Dunkin Donuts
Changes in expansion and capex strategy, if any
(INR Million)
Y/E March
No of Stores
LTL Growth (%)
Net Sales
YoY Change (%)
Gross Profit
Gross Margin (%)
Other Expenses
% of Sales
EBITDA
EBITDA Growth (%)
Margins (%)
Depreciation
Interest
Other Income
PBT
Tax
Rate (%)
Adjusted PAT
YoY Change (%)
E: MOSL Estimates
October 2013
FY13
1Q
489
22.3
3,145
45.0
2,309
73.4
1,736
55.2
573
36.3
18.2
117
0
19
475
152
31.9
323
39.3
2Q
515
19.8
3,421
42.3
2,530
74.0
1,943
56.8
587
34.5
17.2
138
0
20
468
145
30.9
323
36.5
3Q
552
16.1
3,851
39.0
2,863
74.3
2,192
56.9
672
30.3
17.4
140
1
20
551
174
31.6
377
28.0
FY14
4Q
576
7.7
3,658
29.3
2,703
73.9
2,091
57.2
612
20.7
16.7
152
0
20
480
153
31.9
327
11.4
1Q
602
6.3
3,965
26.1
2,937
74.1
2,270
57.3
667
16.4
16.8
179
0
22
510
170
33.3
340
5.1
2QE
632
8.0
4,345
27.0
3,224
74.2
2,507
57.7
717
22.2
16.5
193
0
24
548
189
34.5
359
10.9
3QE
664
12.0
5,277
37.0
3,920
74.3
3,039
57.6
881
31.2
16.7
196
1
25
709
245
34.5
465
23.2
4QE
697
12.0
4,994
36.5
3,689
73.9
2,891
57.9
799
30.4
16.0
196
1
28
630
199
31.7
431
31.7
FY13
FY14E
576
16.2
14,076
38.4
10,405
73.9
7,961
56.6
2,444
30.0
17.4
547
1
78
1,974
623
31.6
1,351
26.0
701
10.0
18,580
32.0
13,771
74.1
10,707
57.6
3,064
25.4
16.5
765
1
100
2,397
803
33.5
1,594
18.0
C159
Shoppers Stop
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
SHOP IN
82.2
29 / 0.5
494 / 321
-6 / -17 / -16
CMP: INR356
We expect Shoppers Stop (SHOP) to report 18.5% increase in sales to

INR6.9b. SSS growth would be 10%, driven by low base of 2% growth
in 2QFY13.
We estimate EBITDA margin at 5.3%, still below the normal trend of 78%, but up 30bp YoY due to better operating leverage, led by higher
SSS growth.
Hypercity would remain a drag on consolidated profitability and post

losses.
SHOP added three Shoppers Stop departmental stores and closed one
during 2QFY14.
The stock trades at 33x FY15E standalone EPS. Maintain Neutral.

Y/E March
Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh.(INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2012
19.0
1.4
0.6
7.8
-14.5
78.9
9.9
11.0
14.6
2013 2014E
22.3 26.8
1.3
1.6
0.4
0.6
4.9
7.0
-37.9 43.5
82.5 88.3
5.9
7.9
7.3
9.9
13.6 15.0
44.8
4.4
20.7
0.3
72.1
4.2
23.7
0.2
50.2
4.0
18.6
0.3
2015E
31.2
2.1
0.9
10.6
51.9
97.0
10.9
13.1
15.0
33.0
3.6
14.1
0.5
Neutral

Comments on same store sales (SSS) performance
Comments on ensuing festive season demand
(INR Million)
Y/E March
LTL Sales Gr %
Deptt Stores
Net Sales
YoY Change (%)
Total Exp
EBITDA
Growth (%)
Margins (%)
Depreciation
Interest
Other Income
PBT
Tax
Rate (%)
Adjusted PAT
YoY Change (%)
E: MOSL Estimates
October 2013
FY13
1Q
1.0
52
4,467
13.7
4,330
138
-47.7
3.1
120
77
74
15
3
17.9
12
-89.3
2Q
2.0
55
5,796
16.5
5,505
291
-24.9
5.0
142
77
31
102
38
37.1
64
-67.3
3Q
12.5
55
6,041
20.4
5,588
453
9.6
7.5
120
86
32
279
108
38.7
171
-11.4
FY14
4Q
10.0
55
6,251
15.6
5,868
383
5.4
6.1
125
79
35
214
62
29.1
152
10.4
1Q
12.0
60
5,371
20.2
5,137
234
69.4
4.3
133
98
32
34
11
32.2
23
86.1
2QE
10.0
62
6,868
18.5
6,504
364
25.2
5.3
145
91
32
160
55
34.5
105
63.6
3QE
10.0
60
7,141
18.2
6,605
536
18.3
7.5
122
101
34
346
119
34.5
226
32.5
4QE
8.0
63
7,452
19.2
6,972
481
25.5
6.4
116
117
89
336
117
34.9
219
44.1
FY13
FY14E
7.4
55
22,555
16.7
21,291
1,264
-11.4
5.6
507
319
172
610
211
34.6
399
-37.9
10.0
60
26,831
19.0
25,218
1,614
27.6
6.0
517
408
187
876
303
34.6
573
43.5
C160
Titan Industries
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
TTAN IN
887.8
208 / 3
314 / 200
-4 / -13 / -14
CMP: INR235
We expect Titan Industries (TTAN) to post sales of INR26.2b, up 15%

YoY.
TTAN's Jewelry business is facing multiple challenges: (a) demand

slowdown due to pressure on discretionary consumption, (b) supply
shortage due to 20:80 scheme, and (c) withdrawal of gold-on-lease
scheme.
After strong 67% volume growth in Jewelry in 1Q, we expect Jewelry

volumes to grow in single digits. However, TTAN has been pushing
Diamond Jewelry, which should result in higher share of Studded
Jewelry.
We estimate margin decline of 50bp YoY, led by promotional offer on

Diamond Jewelry and continued impact of INR depreciation on Watch
margins. PAT should grow 9% to INR1.96b.
We expect the Watch segment to post a subdued quarter.
The stock trades at 21x FY15E EPS of INR11.2. Neutral.

Y/E March
Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh.(INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2012 2013 2014E

88.4 101.1 120.1
8.3 10.1 11.2
6.0
7.3
8.3
6.8
8.2
9.3
40.5 20.1 13.9
16.3 22.1 28.5
48.9 42.5 32.6
66.9 59.4 52.6
30.1 30.0 30.0
34.5
14.4
23.9
0.9
28.7
10.6
19.5
1.0
25.2
8.2
17.1
1.2
2015E
142.0
13.3
9.9
11.2
19.8
36.3
30.7
49.1
30.0
21.0
6.5
14.0
1.4
Neutral

Clarity on gold supply and exports strategy in Jewelry, if any
Hedging strategy
Changes in expansion strategy, if any
(INR Million)
Y/E March
Net Sales
YoY Change (%)
Total Exp
EBITDA
EBITDA Growth (%)
Margins (%)
Depreciation
Interest
Other Income
PBT
Tax
Rate (%)
Adjusted PAT
YoY Change (%)
E: MOSL Estimates
October 2013
FY13
1Q
22,057
9.2
19,937
2,120
10.3
9.6
123
126
252
2,123
561
26.4
1,561
8.7
2Q
22,760
8.6
20,266
2,494
19.4
11.0
130
121
238
2,481
679
27.4
1,801
21.3
3Q
29,829
23.2
27,351
2,478
20.1
8.3
142
117
571
2,791
752
26.9
2,039
24.4
FY14
4Q
25,931
14.8
23,467
2,464
34.1
9.5
150
142
496
2,669
819
30.7
1,850
28.2
1Q
31,077
40.9
28,627
2,449
16
7.9
146
170
382
2,515
691
27.5
1,825
16.9
2QE
26,174
15.0
23,426
2,748
10.2
10.5
141
170
250
2,688
726
27.0
1,962
8.9
3QE
32,215
8.0
29,219
2,996
20.9
9.3
153
164
628
3,307
893
27.0
2,414
18.4
4QE
30,637
18.1
27,608
3,028
22.9
9.9
149
240
178
2,817
627
22.3
2,190
18.4
FY13
FY14E
101,127
15.6
91,020
10,116
37
10.0
545
506
1,008
10,072
2,811
27.9
7,262
20.1
120,102
18.8
108,880
11,222
11
9.3
589
744
1,439
11,328
2,936
25.9
8,391
15.6
C161
September 2013 Results Preview | Sector: Technology
Technology
Companies Covered
Cognizant Technology
HCL Technologies
Infosys
Currency to steal the show: While 2Q is a seasonally strong quarter for revenue growth,
and 2QFY14 should pan out in line with seasonality, significant INR depreciation will
dominate Technology companies' financial performance for the quarter. We expect
aggregate EBITDA margin to expand 220bp QoQ for top-tier companies, with the range
being 140-270bp QoQ. Margin expansion would be the least for Infosys due to full
quarter impact of offshore wage hikes and the highest for TCS, as wage hikes were
absorbed in 1Q.
KPIT Cummins
MindTree
MphasiS
Persistent Systems
TCS
Expect growth traction across the board: We expect no changes to the usual suspects
when it comes to growth outperformance in 2QFY14. TCS (+4.9% QoQ including ALTI),
and Cognizant (CTSH, +5.2% QoQ) would continue to lead the pack. Other companies
across the top-tier are also expected to post decent growth ranging between 2-3%
QoQ. In tier-II companies, we expect strong growth across the board (MTCL, PSYS,
HEXW, KPIT).
Tech Mahindra
Wipro
Cross-currency headwinds from AUD and INR: Companies are likely to be impacted
negatively (on USD revenue line) by depreciation in AUD (~8% QoQ) and INR (~10%+
QoQ). Across the top-tier, we expect USD revenues to be impacted negatively by 50100bp from depreciation in sequential average rates of AUD and INR v/s the USD.
Watch out for Infosys after a series of significant surprises, deal signings: The last
three quarters kicked off the results calendar, with significant surprise at INFO, on the
positive side in 3QFY13 and 1QFY14 and negative in 4QFY13. NRN's return to the fold
should imply little likelihood of a stark negative surprise, given his recent commentary.
TPI gave an outlook of healthy deal closures in the second half of calendar year, and
the sentiment in US has been improving. Deal signing activity across the board will be
keenly watched in company results.

CMP
Rating
(INR)
27.09.13
HCL Technologies
1,071
Buy
Hexaware Tech.
129
Neutral
Infosys
3,006
Buy
KPIT Tech.
131
Neutral
Mindtree
1,186
Neutral
MphasiS
428
Sell
Persistent Systems
619
Buy
TCS
1,947
Neutral
Tech Mahindra
1,306
Buy
Wipro
475
Buy
Sector Aggregate
Sep.13
79,037
6,194
127,385
7,087
7,613
17,656
4,155
207,982
46,535
109,044
503,645
Sales
Var.
% YoY
29.8
22.0
29.2
24.9
27.7
35.2
27.1
33.1
32.1
NA
31.2
Var. Sep.13
% QoQ
13.8 19,690
15.4
1,492
13.1 35,502
15.6
1,355
17.5
1,612
14.7
3,538
16.3
931
15.6 65,151
13.4 10,886
12.1 22,273
14.5 140,157
EBITDA
Var.
% YoY
48.2
35.9
23.6
43.4
22.2
31.1
4.6
46.7
43.8
NA
38.9
Var.
% QoQ
21.9
17.2
19.0
39.4
35.4
26.4
19.8
26.4
25.9
26.2
23.9
(INR Million)
Net Profit
Sep.13
Var.
Var.
% YoY % QoQ
13,333
54.3
11.3
1,167
38.9
19.2
26,558
12.1
11.9
771
89.6
28.2
1,077
49.2
-20.5
2,022
-3.4
5.0
489
9.4
-14.4
45,803
30.4
20.7
6,699
58.6
2.6
18,435
NA
13.6
97,918
28.5
14.3
Ashish Chopra (Ashish.Chopra@MotilalOswal.com)/Siddharth Vora (Siddharth.Vora@MotilalOswal.com)

October 2013
C162

Sensex Index
MOSL Technology Index
150
135
120
105
Sep-13
Aug-13
Jul-13
Jun-13
90
INFO, TECHM are our top picks: After a healthy run in valuations over the last four
months amid favorable currency, improving demand environment and receding
concerns around Immigration Bill, we expect select companies to outperform. We
expect INFO's recent deal signings and cost optimization efforts to drive a healthy
financial performance. INFO is our top pick in the sector. We see re-rating potential at
TECHM, as the merged entity guns stronger for deals. Our Neutral rating on TCS is only
due to steep valuations. Among tier-II companies, we prefer PSYS for its strong business
mix and receding profitability concerns.
TCS and Cognizant will continue to be growth leaders
Sensex Index
MOSL Technology Index
155
TCS
Infos ys
Wi pro
HCL Tech
Cogni zant
140
4.9
110
2.4
2.4
3
0
1QFY14
4QFY13
3QFY13
2QFY13
1QFY13
4QFY12
-3
3QFY12
Sep-13
Jun-13
Mar-13
Dec-12
95
Sep-12
5.2
3.0
2QFY14E
125
TCS and Wipro showing incremental revenue acceleration

200
150
100
50
0
-50
TCS
Infos ys
Wi pro
HCL
Cogni za nt
Healthy growth across the board in tier-II companies

Tech Mahi ndra
Pers i s tent Sys tem
Hexa ware
KPIT Cummi ns
Mi ndtree
10
5.5
4.2
2.8 4.5 4.3
3
-1
-4
1QFY13
2QFY13
3QFY13
4QFY13
1QFY14
2QFY14E

October 2013
C163
Margins uptick driven by depreciating rupee

EBITDA Margins across the top tier
TCS
Infos ys
HCL Tech
Wi pro
Cogni za nt
36%
31.3%
27.9%
31%
26%
24.9%
22.6%
21.8%
21%
*EBITDA margins in USD for Cognizant
2QFY14E
1QFY14
4QFY13
3QFY13
2QFY13
1QFY13
4QFY12
3QFY12
16%
Aggregate top-tier USD revenue growth estimated at 3.4% QoQ

Company
TCS
Infosys
Wipro
HCLT
Aggregate
2QFY14E
3,321
2,038
1,627
1,265
8,250
Company
TCS
Infosys
Wipro
HCLT
Aggregate
2QFY14E
31.3
27.9
22.6
24.9
27.7
Revenues (USD m)
YoY (%)
1QFY14
16.4
3,165
13.4
1,991
5.6
1,588
13.5
1,228
13.0
7,972
EBITDA Margin (%)
2QFY13
YoY (%)
1QFY14
28.4
290
28.6
29.1
-130
26.5
20.1
260
20.5
21.8
310
23.3
25.5
218
25.6
2QFY13
2,853
1,797
1,541
1,114
7,304
QoQ (%)
4.9
2.4
2.4
3.0
3.5
2QFY14E
208
127
109
79
523
QoQ (%)
270
140
220
170
216
2QFY14E
46
27
18
13
104
Revenues (INR b)
YoY (%)
1QFY14
33.1
180
29.2
113
2.3
99
29.8
69
24.0
461
PAT (INR b)
2QFY13
YoY (%)
1QFY14
35
30.4
38
24
12.1
24
16
14.5
16
9
54.3
12
84
24.6
90
2QFY13
156
99
107
61
422
QoQ (%)
15.6
13.1
10.7
13.8
13.7
QoQ (%)
20.7
11.9
13.6
11.3
15.8
Across tier-II companies, margins are expected to improve on aggregate and growth is likely to be driven by better macro
environment
Company
2QFY14E
Tech Mahindra
745
Persistent Systems
66
Mphasis
277
Hexaware
99
KPIT Cummins
113
Mindtree
123
Aggregate
1,423
Company
2QFY14E
Tech Mahindra
23.4
Persistent Systems
22.4
Mphasis
17.9
Hexaware
24.1
KPIT Cummins
19.1
Mindtree
21.2
Aggregate
21.8
October 2013
Revenues (USD m)
2QFY13
Yoy (%)
1QFY14
644
15.6
724
60
10.7
63
248
11.5
265
93
6.8
95
103
9.6
109
107
14.5
118
1,256
13.3
1,374
EBITDA Margin (%)
2QFY13
Yoy (%)
1QFY14
21.5
191
21.1
27.2
-483
21.7
17.6
31
15.8
21.6
245
23.7
16.7
246
15.9
22.1
-94
18.4
20.7
110
19.6
QoQ (%)
2.8
5.5
4.2
4.5
4.2
4.3
3.6
2QFY14E
46.5
4.2
17.7
6.2
7.1
7.6
89
QoQ (%)
232
66
206
36
326
279
216
2QFY14E
6.7
0.5
2.0
1.2
0.8
1.1
12.2
Revenues (INR b)
Yoy (%)
1QFY14 QoQ (%)
32.1
41.0
13.4
27.1
3.6
16.3
35.2
15.4
14.7
22.0
5.4
15.4
24.9
6.1
15.6
27.7
6.5
17.5
30.7
78
14.4
PAT (INR b)
2QFY13
Yoy (%)
1QFY14 QoQ (%)
6.5
3
5.1
32
0.4
9
0.6
-14
2.1
-3
1.9
5
0.8
39
1.0
19
0.4
86
0.6
28
0.7
49
1.4
-20
11.0
11
10.5
16
2QFY13
35.2
3.3
13.1
5.1
5.7
6.0
68
C164
2QFY14 Currency highlights (INR)
Average
Closing
USD
Rates (INR)
EUR
GBP
AUD
USD
62.1
62.4
82.2
84.6
56.9
58.3
10.9%
5.4%
96.3
101.1
Change (QoQ, %)
EUR
GBP
AUD
12.5%
12.3%
2.8%
8.9%
11.7%
6.5%
2QFY14 Currency highlights (USD)

EUR
Rates (USD)
GBP
AUD
EUR
Change (QoQ, %)
GBP
Average
1.33
1.55
0.92
1.5
1.0
Closing
1.35
1.62
0.93
3.8
AUD
-7.7
6.3
1.8
Cross currencies: Assumed rates v/s actuals

Guided at
EUR
GBP
AUD
INR/USD
Infosys
Wipro
Actual (Average)
1.30
1.31
1.33
1.52
1.54
1.55
0.91
0.97
0.92
59.39
57.24
62.07
Change (%)
EUR
GBP
AUD
INR/USD
Impact on USD revenue
Infosys
Wipro
1.9
1.2
2.0
0.7
0.3
-5.6
4.5
8.4
0.23
-0.58
EPS Estimates (INR) - MOSL v/s Consensus
Infosys
TCS
Wipro
HCL Tech
Mphasis
Tech Mahindra
Cognizant
Hexaware
KPIT Cummins
Mindtree
Persistent Systems
CMP (INR)
27.09.13
Technology
HCL Technologies 1,071
Hexaware Tech.
129
Infosys
3,006
KPIT Tech.
131
Mindtree
1,186
MphasiS
428
Persistent Systems 619
TCS
1,947
Tech Mahindra
1,306
Wipro
475
Sector Aggregate
October 2013
2QFY14
MOSL
Consensus
46.5
43.1
23.4
21.9
7.5
7.4
18.9
15.4
9.6
10.2
31.5
36.3
1.10
1.20
3.9
4.3
3.9
3.6
25.8
26.2
12.2
13.6
FY14
MOSL
Consensus
186.5
178.3
91.0
88.9
30.9
29.1
76.7
72.0
35.9
41.0
122.8
121.5
4.2
4.9
13.8
13.5
15.9
14.3
118.8
96.5
57.7
56.9
FY15
MOSL
Consensus
215.5
200.4
104.2
102.5
34.0
32.4
85.2
80.5
42.4
43.3
131.1
129.1
4.8
5.7
14.9
14.3
17.5
16.1
130.8
104.4
66.8
63.9
Upside/Downside to Consensus (%)

2QFY14
FY14
FY15
7.9
4.6
7.6
6.8
2.3
1.7
1.0
6.0
4.9
22.6
6.5
5.8
-5.7
-12.4
-2.1
-13.1
1.1
1.5
-8.5
-14.2
-15.1
-9.4
1.9
4.2
8.2
11.6
8.4
-1.7
23.1
25.3
-10.3
1.3
4.5
Rating
EPS (INR)
FY13 FY14E FY15E
P/E (x)
FY13 FY14E FY15E
EV/EBITDA (x)
FY13 FY14E FY15E
RoE (%)
FY13 FY14E FY15E
Buy
Neutral
Buy
Neutral
Neutral
Sell
Buy
Neutral
Buy
Buy
57.0
10.9
164.9
10.6
81.7
37.5
46.9
71.2
93.2
25.0
18.8
11.8
18.2
12.4
14.5
11.4
13.2
27.3
14.0
19.0
20.9
12.4
8.3
12.8
6.4
9.8
8.9
6.2
20.7
8.8
13.8
15.3
32.2
30.1
25.7
22.7
25.8
19.1
20.2
37.8
32.6
25.3
27.5
76.7
13.8
186.5
15.9
118.8
35.9
57.7
91.0
122.8
30.9
85.2
14.9
215.5
17.5
130.8
42.4
66.8
104.2
131.1
34.0
14.0
9.3
16.1
8.2
10.0
11.9
10.7
21.4
10.6
15.4
16.9
12.6
8.6
14.0
7.5
9.1
10.1
9.3
18.7
10.0
14.0
14.9
9.0
6.3
10.3
4.3
7.3
8.9
4.9
15.0
6.6
10.6
11.6
8.1
5.5
8.7
4.0
5.7
7.3
4.3
13.4
6.0
9.6
10.3
37.4
33.4
24.4
26.0
33.2
16.9
20.9
38.7
33.9
27.6
27.9
32.4
32.3
25.8
24.6
28.1
18.7
20.4
35.2
28.5
25.5
25.9
C165
Cognizant
Bloomberg
Equity Shares (m)
M.Cap. (USD b)
52-Week Range (USD)
CTSH US
303.8
25
84 / 61
CMP: USD83
For 3QCY13, CTSH guided revenues of at least USD2,250m, implying

QoQ growth of 4.1%, having upgraded its full-year revenue guidance
to at least 19% from at least 17% earlier.
We expect CTSH to beat its 3QCY13 guidance and post revenues of

USD2,275m, up 5.2% QoQ.
CTSH's full-year growth guidance implies 3.6% growth in 2H. With the
company citing improved macro environment, reflected in our 3QCY13
estimate, we expect it to beat even its revised guidance.
With ~78% of revenues from North America, CTSH is likely to remain

relatively unscathed from the impact of cross-currency movements,
compared to its top-tier Indian peers.
We expect EBITDA margin of 21.8% for the quarter, up 10bp QoQ. Our
SGA estimate is 21%, up 150bp QoQ due to wage hikes effective from
1 July 2013.
We expect net income of USD336m, up 11.7% QoQ, and net margin of

14.8%, up 90bp QoQ.
The stock trades at 8.8 CY13E and 10.3 CY14E earnings. Not Rated.
Financials & Valuation (USD b)

Y/E December
Sales
EBITDA
PAT
EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div yld (%)
2011
6.1
1.3
0.9
2.9
20.0
12.8
23.4
28.6
0.0
2012 2013E
7.3
8.8
1.5
1.9
1.1
1.3
3.5
4.2
21.0 20.5
16.0 19.7
23.9 23.4
28.9 29.8
0.0
0.0
29.0
6.5
18.8
0.0
24.0
5.2
15.0
0.0
19.9
4.2
11.8
0.0
2014E
10.3
2.1
1.5
4.8
15.5
24.6
21.7
27.1
0.0
17.2
3.4
9.8
0.0
Not Rated

Guidance for 4Q and expected revision of CY13 revenue guidance
Commentary on deal ramp-ups following weak outlook cited by
Accenture
Quarterly Performance (US GAAP)
(USD Million)
Y/E December
Revenues
Q-o-Q Change (%)
Direct Expenses
SG&A
SG&A as % of Sales
EBITDA
Margins (%)
Other Income
Depreciation
PBT bef. Extra-ordinary
Provision for Tax
Rate (%)
PAT before EO
Q-o-Q Change (%)
Headcount addition
Closing Headcount
Utilization
E: MOSL Estimates
October 2013
CY12
1Q
1,711
2.9
985
374
21.9
353
20.6
4
35
322
79
24.4
244
7.3
2,800
140,500
67
2Q
1,795
4.9
1,031
397
22.1
368
20.5
3
36
335
83
24.8
252
3.4
4,500
145,000
68
3Q
1,892
5.4
1,112
385
20.3
395
20.9
9
39
364
87
24.0
277
9.9
5,400
150,400
70
CY13
4Q
1,948
3.0
1,151
402
20.6
396
20.3
10
39
366
87
23.8
279
0.7
6,300
156,700
68
1Q
2,021
3.7
1,200
413
20.4
408
20.2
11
42
377
93
24.6
284
1.9
6,000
162,700
67
2Q
2,161
7.0
1,272
421
19.5
469
21.7
-6
42
420
120
28.5
300
5.7
1,600
164,300
70
3QE
2,274
5.2
1,301
478
21.0
495
21.8
12
44
463
127
27.5
336
11.7
6,946
171,200
72
4QE
2,355
3.5
1,348
495
21.0
512
21.7
12
46
478
129
27.0
349
4.0
5,878
177,100
72
CY12
CY13E
7,346
20.0
4,278
1,558
21.2
1,511
20.6
26
149
1,388
336
24.2
1,051
19.0
19,000
156,700
68
8,812
19.9
5,122
1,806
20.5
1,884
21.4
28
173
1,739
469
27.0
1,269
20.7
20,400
177,100
70
C166
HCL Technologies
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
HCLT IN
705.8
756 / 12
1,104 / 557
3 / 30 / 79
CMP: INR1,071

Y/E June
Sales
EBITDA
PAT
EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div yld (%)
2012 2013 2014E

210.3 257.3 327.9
39.4 57.5 77.5
24.6 40.3 54.5
35.1 57.0 76.7
52.0 62.6 34.5
155.4 205.9 267.5
25.6 32.2 37.4
21.2 29.1 32.2
34.2 21.1 17.0
30.5
6.9
18.6
1.1
18.8
5.2
12.2
1.1
14.0
4.0
8.9
1.2
2015E
360.8
81.4
61.0
85.2
11.1
334.9
32.4
28.8
19.5
12.6
3.2
8.0
1.2
Buy
We expect HCLT's revenues to grow 3% QoQ to USD1,265m. Traction in

IMS should be strong - we estimate 6.1% QoQ growth to USD410m. We
expect Software Services revenue growth of 1.5% QoQ to USD800m.
Cross-currency movements would have a negative impact of ~60bp.
Our volume growth estimate for Software Services is 2.6% QoQ. In
INR terms, we expect revenue growth of 13.8% QoQ to INR79.04b.
While wage hikes to a section of the staff will be a 60bp headwind to
margins, we expect EBITDA margin to expand 160bp QoQ to 24.9%
(after ESOP charges), owing to INR depreciation of ~10.5% QoQ.
Our PAT estimate for the quarter is INR13,333m, up 11.3% QoQ. Our
PAT margin estimate is 16.9% (after ESOP charges).
HCLT announced deal signings with TCV of over USD1b+ in 4QFY13,
taking total deals in FY13 to USD3b+. TPI has suggested that 2HCY13
will see healthy deal closures, driving expectations of healthy deal
signings at HCLT.
The stock trades at 14x FY14E and 12.6x FY15E EPS. Maintain Buy.

TCV of deals signed during the quarter
Growth in Software Services segment
Growth in US after improved outlook (Europe outgrew US in last three
quarters)
Quarterly Performance (US GAAP)

Y/E June
(INR Million)
FY13
1Q
2Q
3Q
Revenues
60,910
62,738
64,246
Q-o-Q Change (%)
2.9
3.0
2.4
EBITDA
13,288
13,945
14,156
Margins (%)
21.8
22.2
22.0
Other Income
-253
154
887
PAT
8,642
9,444
10,189
Q-o-Q Change (%)
2.8
9.3
7.9
Y-o-Y Change (%)
80.0
70.9
75.1
Diluted EPS (INR)
12.3
13.5
14.4
USD Revenues
1,114
1,154
1,191
Q-o-Q Change (%)
3.2
3.6
3.2
Gross Margin (%)
34.9
35.5
35.6
SGA (%)
13.0
13.2
13.6
Tax rate (%)
23.8
23.7
24.0
Net Employee additions
1,016
-141
-791
Util. - incl. trainees (%)
74.2
75.6
79.0
Q-o-Q Vol Gr in s/w serv. (%)
2.5
0.4
0.4
Q-o-Q Realization change (%)
-1.9
0.5
0.7
Offshore revenues (%)
44.3
44.9
44.6
E: MOSL Estimates; After adjusting for ESOP charges
October 2013
FY14E
4Q
69,442
8.1
16,147
23.3
782
11,975
17.5
42.4
17.0
1,228
3.1
36.5
13.3
21.5
1,102
80.6
1.4
-0.8
45.4
1Q
79,037
13.8
19,690
24.9
-765
13,333
11.3
54.3
18.9
1,265
3.0
37.8
12.9
22.0
2,950
81.0
2.6
-1.0
45.8
2Q
81,502
3.1
19,046
23.4
-351
13,107
-1.7
38.8
18.5
1,315
4.0
36.5
13.2
22.0
1,850
80.5
2.9
0.1
45.7
3Q
83,907
2.9
19,726
23.5
683
14,401
9.9
41.3
20.3
1,353
2.9
36.6
13.1
22.0
2,600
81.0
1.7
0.5
45.3
4Q
83,467
-0.5
19,015
22.8
437
13,644
-5.3
13.9
19.2
1,391
2.8
35.9
13.1
22.0
2,300
81.0
2.2
-0.1
45.4
FY13
FY14E
257,336
22.4
57,536
22.4
1,570
53,583
327,913
27.4
77,477
23.6
1,570
58,049
118.2
57.0
5,951
43.3
35.6
13.3
23.2
1,186
78.6
7.5
-2.0
44.8
8.3
76.7
6,152
3.4
36.7
13.1
22.0
9,700
81.1
7.8
-0.9
45.6
C167
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
HEXW IN
296.9
38 / 1
134 / 72
-9 / 47 / 1
2011
14.5
2.6
2.7
8.9
319.3
34.4
26.3
23.6
43.9
14.4
3.8
12.8
3.1
2012 2013E
19.5 23.0
4.1
5.2
3.4
4.1
10.9 13.8
22.2 26.3
40.3 42.3
27.8 32.5
31.2 37.2
48.7 35.4
11.8
3.2
8.4
4.2

Y/E December
Sales
EBITDA
PAT
EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div yld (%)
CMP: INR129
2014E
26.5
5.7
4.5
14.9
8.5
50.0
29.9
34.9
33.9
9.3
3.0
6.3
3.9
8.6
2.6
5.6
4.0
Neutral
For 3QCY13, HEXW had guided for USD revenue of USD98.1m-100m,

implying QoQ growth of 3.5-5.5%. We estimate revenue growth of
4.5% QoQ to USD99.1m, at the midpoint of the guided band. In INR
terms, we expect revenue growth of 15.4% QoQ to INR6.19b.
HEXW managed to more than recover its EBITDA margin shrinkage
that resulted from client-specific issues in 4QCY12. It had guided for
gradual pick-up in margins in CY13.
We saw a recovery of 240bp in 1QCY13 and another 440bp in 2QCY13.
We model EBITDA margin uptick of 40bp QoQ to 24.1% in 3QCY13, as
wage hikes become effective, offsetting most of the gains from
favorable currency.
Also, we expect SGA to revert to 17.3% of sales, up from 14.7% (the
lowest ever) in 2Q.
Our PAT estimate for the quarter is INR1,167m, up 19.2% QoQ, driven
primarily by uptick in INR revenues. Our implied PAT margin estimate
is 18.8%, up 60bp QoQ.
HEXW had guided for a strong 2H, and we model 4.3% QoQ growth in
4Q, taking full-year revenue growth to 7.4%. Barings recently acquired
the promoters' stake in the company for a maximum of INR135/share,
casting doubts on further upside in the stock.
The stock trades at 9.3x CY13E and 8.6x CY14E earnings. Neutral.

Outlook on strategy under the new promoters
Guidance for 4QCY13 and margin outlook
Peoplesoft implementation and large deals outlook
Quarterly Performance (Indian GAAP)
(USD Million)
Y/E December
Revenues
Q-o-Q Change (%)
Direct Cost
Other Operating Exps
Operating Profit
Margins (%)
Other Income
Depreciation
Provision for Tax
Rate (%)
Net Income bef. Extra-ordinary
Q-o-Q Change (%)
USD Revenues
Q-o-Q Change (%)
Diluted EPS - After EOI (INR)
E: MOSL Estimates
October 2013
CY12
1Q
4,383
31.2
2,574
827
982
22.4
138
71
1,049
165
15.7
884
0.2
88.0
4.6
2.9
2Q
5,001
14.1
2,995
859
1,147
22.9
49
76
1,120
230
20.5
890
0.7
91.2
3.6
3.0
3Q
5,075
1.5
3,067
910
1,098
21.6
55
88
1,065
225
21.1
840
-5.6
92.8
1.8
2.8
CY13
4Q
5,023
-1.0
3,210
966
847
16.9
48
89
806
144
17.9
662
-21.2
92.4
-0.4
2.3
1Q
5,077
1.1
3,162
936
979
19.3
118
93
1,004
211
21.0
793
19.8
94.1
1.8
2.6
2Q
5,366
5.7
3,252
841
1,273
23.7
62
94
1,241
262
21.1
979
23.5
94.8
0.7
3.3
3QE
6,194
15.4
3,633
1,068
1,492
24.1
121
96
1,516
349
23.0
1,167
19.2
99.1
4.5
3.9
4QE
6,410
3.5
3,823
1,106
1,481
23.1
182
99
1,565
361
23.0
1,204
3.2
103.4
4.3
4.0
CY12
CY13E
19,482
34.3
11,846
3,562
4,074
20.9
380
324
4,130
764
18.5
3,366
26.2
364
18.3
10.9
23,046
18.3
13,870
3,951
5,225
22.7
483
382
5,326
1,183
22.2
4,143
23.1
391.4
7.4
13.8
C168
Infosys
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
INFO IN
571.4
1,718 / 28
3,173 / 2,190
-11 / -1 / 12

Y/E March
Sales
EBITDA
PAT
EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div Yield (%)
2012
337.3
107.2
83.2
145.5
21.9
585.0
28.0
32.9
32.3
2013
403.5
115.6
94.2
164.9
13.3
695.8
25.7
28.5
25.5
2014E
499.5
137.4
106.5
186.5
13.1
829.4
24.4
28.6
24.1
2015E
552.4
153.3
123.1
215.5
15.6
986.3
25.8
27.1
23.2
20.7
5.1
14.1
1.6
18.2
4.3
12.8
1.4
16.1
3.6
10.3
1.5
14.0
3.0
8.7
1.7
CMP: INR3,006
Buy
INFO's guidance of 6-10% growth in annual USD revenues implies

flattish CQGR to meet the mid-point and 1.45% CQGR to meet the
higher end of the guidance. We expect the company to beat the higher
end of its implied revenue growth guidance for FY14.
We expect overall revenues to grow 2.4% QoQ to USD2.04b. This

includes negative impact of 60bp from cross-currency, implying CC
revenue growth of 3% QoQ. In INR terms, we expect revenue growth
of 13.1% QoQ to INR127.4b.
EBITDA margin is likely to expand 140bp QoQ, as tailwinds from 10.4%

QoQ depreciation in INR should be offset by ~200bp headwind from
offshore wage hikes becoming effective during the quarter.
INFO has been aggressive in addressing cost optimization, and we

expect some gains from the lower hanging fruits to show on margins
as well. We expect overall utilization including trainees to increase by
60bp QoQ to 73%.
We expect PAT to grow 11.9% QoQ to INR26.6b, led by higher margins

during the quarter.
The stock trades at 16.1x FY14E and 14x FY15E EPS. Maintain Buy.

Revenue growth guidance for FY14
Deal signings in the BITS segment and growth in the same
Performance on margins
Pricing movement QoQ
Quarterly Performance (IFRS)
(INR Million)
Y/E March
Revenues
Q-o-Q Change (%)
EBITDA
Margins (%)
Other Income
PAT
Q-o-Q Change (%)
Diluted EPS (INR)
USD Revenues
Q-o-Q Change (%)
Operating Metrics
Gross Margin (%)
SGA (%)
Tax rate (%)
Utiliz. - excl. trainees (%)
Q-o-Q Volume Growth (%)
Q-o-Q Realization chg (%)
E: MOSL Estimates
October 2013
FY13
FY14E
1Q
96,160
8.6
29,460
30.6
4,760
22,890
-1.2
40.1
1,752
-1.1
2Q
98,580
2.5
28,720
29.1
7,060
23,690
3.5
41.5
1,797
2.6
FY13
3Q
104,240
5.7
29,700
28.5
5,030
23,690
0.0
41.5
1,911
6.3
4Q
104,540
0.3
27,694
26.5
6,740
23,940
1.1
41.9
1,938
1.4
1Q
112,670
7.8
29,830
26.5
5,770
23,740
-0.8
41.6
1,991
2.7
2QE
127,385
13.1
35,502
27.9
3,914
26,558
11.9
46.5
2,038
2.4
FY14
3QE
128,912
1.2
35,766
27.7
5,041
27,679
4.2
48.5
2,079
2.0
4QE
130,510
1.2
36,263
27.8
5,771
28,573
3.2
50.0
2,105
1.2
403,520
19.6
115,570
28.6
23,590
94,206
13.3
164.9
7,398
5.8
499,478
23.8
137,361
27.5
20,496
106,549
13.1
186.5
8,213
11.0
42.2
11.6
27.8
1,157
71.6
2.8
(3.7)
40.9
11.8
28.3
2,610
73.3
3.8
(0.2)
39.8
11.3
25.5
1,508
73.2
2.7
3.6
37.9
11.4
23.7
1,419
73.9
1.6
(0.2)
37.9
11.4
26.8
575
75.9
2.4
(0.1)
38.5
10.7
26.5
1,709
77.9
2.1
(0.1)
38.5
10.7
26.5
3,231
76.5
1.4
(0.1)
38.5
10.7
26.5
2,634
75.6
5.3
0.0
40.1
11.5
26.3
6,694
73.0
0.0
-
38.4
10.9
26.6
8,149
76.5
0.0
-
C169
KPIT Cummins
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
KPIT IN
198.3
26 / 0.4
160 / 92
-8 / 31 / 0
CMP: INR131

Y/E March
Sales
EBITDA
PAT
EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div yld (%)
2012
14.9
2.1
1.2
8.0
41.4
39.0
22.4
20.6
8.7
2013 2014E
22.4 28.3
3.7
5.3
2.0
3.2
10.6 15.9
31.5 51.0
53.3 68.9
23.6 26.7
30.2 34.4
9.5
6.3
16.3
3.3
12.1
0.5
12.4
2.5
6.4
0.8
8.2
1.9
4.3
0.8
2015E
32.1
5.5
3.5
17.5
9.6
73.0
25.2
31.0
8.6
7.5
1.8
4.0
1.1
Neutral
KPIT expects higher revenue growth in 2QFY14 than in 1Q (3.1% QoQ).

We expect USD revenues to grow 4.2% QoQ to USD113.4m. In INR
terms, we expect revenue growth of 15.6% QoQ to INR7.09b.
With wage hikes already effective in 1Q, we expect margins to expand
by 320bp QoQ to 19.1% owing to sharp INR depreciation. Our SGA
estimate for the quarter is 15.5%, down 20bp QoQ. In absolute terms,
our SGA estimate is INR1,099m v/s INR960m in 4QFY13.
Our PAT estimate for the quarter is INR770.9m, up 28.2% QoQ. Our PAT
margin estimate is 10.9%, up 110bp QoQ. PAT would be boosted by
higher margins, but partially offset by forex losses.
KPIT has guided revenues of USD465m-475m for FY14, a growth of
13.3-15.7%. We estimate FY14 revenues at USD465.3m, up 13.4%.
The SAP segment is likely to boost revenues and margins in 2HFY14.
Top account, Cummins should sustain its 1Q levels in the near term.
The two contribute ~43% to KPIT's revenues.
The stock trades at 8.2x FY14E and 7.5x FY15E EPS. Maintain Neutral.

Growth in top account (Cummins) and SAP segment
Overall revenue guidance
Outlook on margins
(INR Million)
Y/E March
Revenues
QoQ Change (%)
Direct Expenses
SG&A
EBITDA
Margins (%)
Other Income
Depreciation
Interest
PBT bef. Extra-ordinary items
Provision for Tax
Rate (%)
PAT after MI
QoQ Change (%)
PAT aft. Minority and EO
QoQ Change (%)
Diluted EPS (INR)
USD Revenues
QoQ Change (%)
Offshore util. (%)
Onsite util. (%)
E: MOSL Estimates
October 2013
FY13
1Q
5,383
42.1
3,506
1,065
812
15.1
30
113
35
694
185
26.6
486
16.9
27
513
24.9
2.8
98
33.5
74.1
94.7
2Q
5,672
5.4
3,703
1,024
945
16.7
-191
114
34
605
191
31.6
407
(16.8)
55
461
(10.0)
2.5
103
5.5
74.7
94.5
3Q
5,633
4.7
3,706
1,045
882
15.7
77
118
42
800
183
22.8
599
47.2
-94
504
(1.6)
2.7
103
0.0
72.9
92.8
FY14
4Q
5,699
1.2
3,725
963
1,011
17.7
-86
121
42
762
207
27.1
512
(19.3)
0
512
1.5
2.6
106
2.0
74.1
94.3
1Q
6,132
7.6
4,200
960
972
15.9
59
122
63
847
246
29.0
601
17.5
0
601
17.5
3.0
109
3.1
73.4
94.2
2QE
7,087
15.6
4,634
1,099
1,355
19.1
-80
130
63
1,083
312
28.8
771
28.2
0
771
28.2
3.9
113.4
4.2
74.0
94.0
3QE
7,359
3.8
4,803
1,141
1,415
19.2
-41
140
63
1,171
337
28.8
834
8.1
0
834
8.1
4.2
119
4.7
74.0
94.0
4QE
7,714
4.8
4,970
1,196
1,548
20.1
-13
145
63
1,326
382
28.8
944
13.3
0
944
13.3
4.8
124
4.8
75.0
95.0
FY13
FY14E
22,386
50.3
14,640
4,096
3,650
16.3
-170
466
154
2,860
766
26.8
2,003
62.0
-13
1,990
63.8
10.6
410
33.6
73.9
94.1
28,292
26.4
18,607
4,395
5,290
18.7
-75
537
252
4,427
1,277
28.8
3,150
64.3
0
3,150
58.3
15.9
465
13.4
74.1
94.3
C170
MindTree
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
MTCL IN
41.5
49 / 1
1,216 / 635
9 / 25 / 73
2012 2013 2014E

19.2 23.6 30.0
2.9
4.9
6.3
2.2
3.4
5.0
53.7 81.7 118.8
116.5 52.2 45.4
233.5 314.5 400.9
25.2 25.8 33.2
25.6 37.0 36.8
7.4 14.7 11.8
22.1
2.2
15.1
0.3
14.5
3.7
9.0
1.0

Y/E March
Sales
EBITDA
PAT
EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div Yld (%)
CMP: INR1,186
10.0
2.9
6.7
1.2
2015E
33.9
7.4
5.5
130.8
10.1
531.7
28.1
33.1
13.0
9.1
2.2
5.2
1.4
Neutral
MTCL reiterated its guidance of growing 2QFY14 USD revenues at a

rate similar to 1Q. We model QoQ revenue growth of 4.3% to
USD122.8m. Despite significant traction in overall deals, the Hi-tech
vertical is likely to witness QoQ decline.
In INR terms, our growth estimate stands at INR7.6b or 17.5% QoQ. For
accounting, MTCL follows the practice of taking the USD/INR rate
prevalent at the beginning of a month for the whole month. In
consistently depreciating INR scenario of 2Q, the QoQ depreciation in
average realized INR is greater for MTCL than for peers.
We estimate EBITDA margin at 21.4%, up 280bp QoQ. We expect
significant tailwinds from currency to be offset by wage hikes effective
during the quarter for ~65% of the salary base.
Our PAT estimate for the quarter is INR1,076.9m, which implies PAT
margin of 14.1%, well below the PAT margin of 20.9% in the previous
quarter, which was inflated by INR618m worth of forex gains. We model
INR114m of forex losses in 2QFY14.
MTCL had reiterated its confidence of improving its growth rate in
FY14 v/s FY13. This confidence emanates from deal wins worth
USD256m in the last two quarters.
The stock trades at 10x FY14E and 9.1 FY15E earnings. Neutral.

Performance and outlook of the Hi-tech vertical
Deal wins on the back of strong couple of quarters
Margin outlook in a weak currency environment
(INR Million)
Y/E March
Revenues
Q-o-Q Change (%)
Direct Expenses
SGA
Operating Profit
Margins (%)
Other Income
Forex Gain / (Loss)
Depreciation & Amort.
Interest
Provision for Tax
Rate (%)
Reported PAT
Q-o-Q Change (%)
USD Revenue
Q-o-Q Change (%)
Util including trainees (%)
E: MOSL Estimates
October 2013
FY13
1Q
5,630
23.3
3,442
1,014
1,174
20.9
52
86
159
3
1,150
260
22.6
890
63.3
105.5
4.1
68.9
2Q
5,963
5.9
3,570
1,074
1,319
22.1
74
-415
159
4
815
93
11.4
722
-18.9
107.3
1.7
71.7
3Q
5,901
-1.0
3,517
1,180
1,204
20.4
70
142
151
2
1,263
275
21.8
988
36.8
109.9
2.5
71.4
FY14
4Q
6,124
3.8
3,745
1,216
1,163
19.0
154
-153
155
1
1,008
219
21.7
789
-20.1
113.0
2.8
69.6
1Q
6,477
5.8
3,824
1,462
1,191
18.4
117
618
181
1
1,744
390
22.4
1,354
71.6
117.7
4.2
69.6
2QE
7,613
17.5
4,282
1,718
1,612
21.2
96
-114
193
1
1,399
323
23.0
1,077
-20.5
122.8
4.3
71.0
3QE
7,829
2.8
4,391
1,738
1,700
21.7
106
0
201
1
1,604
377
23.5
1,227
14.0
126.3
2.8
69.0
4QE
8,088
3.3
4,502
1,779
1,807
22.3
120
0
216
1
1,710
402
23.5
1,308
6.6
130.5
3.3
70.0
FY13
FY14E
23,618
23.3
14,274
4,484
4,860
20.6
350
-340
624
10
4,236
847
20.0
3,389
55.1
435.7
8.2
70.4
30,007
27.0
16,999
6,698
6,310
21.0
439
504
790
4
6,458
1,491
23.1
4,966
46.5
497.2
14.1
69.9
C171
Mphasis
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
MPHL IN
210.0
90 / 1
513 / 335
-1 / 4 / 3
CMP: INR428

Y/E October
Sales
EBITDA
PAT
EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div yld (%)
2011 2012 2013E

51.0 53.6 59.7
9.9 10.5 11.1
8.3
7.9
7.6
39.3 37.5 35.9
-19.1
-4.6
-4.3
185.7 209.6 216.9
23.1 19.1 16.9
22.2 19.6 18.9
16.5 45.3 50.1
2014E
68.6
13.3
8.9
42.4
18.0
236.0
18.7
21.1
47.2
10.9
2.3
7.3
1.5
11.4
2.0
6.1
4.0
11.9
2.0
7.1
4.2
10.1
1.8
5.6
4.7
Sell
We expect MPHL's 4QFY13 revenues to grow 4.2% QoQ to USD276.6m,

driven by Digital Risk and mature market growth.
The company is likely to report healthy growth, as (1) headwinds of
reducing emerging markets business are behind, with exit from India
business completed last quarter, (2) the pace of decline in HP business
has reduced, and (3) HP's overall contribution to total revenues has
declined substantially. Digital Risk continues to grow at a healthy rate,
with annualized exit rate of USD170m, last quarter.
In INR terms, we expect revenues at INR17.6b, up 14.7% QoQ. EBITDA
margin is likely to expand 180bp QoQ to 20%, primarily on account of
exit from low margin India business and currency benefit. In absolute
terms, we expect EBITDA to grow 26.4% QoQ to INR3.54b.
We expect SG&A expense to increase by 90bp to 10.3% v/s 9.4% in
3QFY13. We have assumed tax rate of 26% for the quarter.
PAT is likely to grow 5% QoQ to INR2.02b. Our PAT margin estimate is
11.5%, down 100bp QoQ due to incremental investments in S&M, as
guided by the management.
The stock trades at 11.9x FY13E and 10.1x FY14E EPS. Maintain Sell.

Outlook for Digital Risk, HP Channel and Direct Channel
Margin outlook post currency benefit and incremental investments
in sales
Change in headcount and hiring outlook
Mphasis - Quarterly Performance
(INR Million)
Y/E October
Revenues
Q-o-Q Change (%)
Direct Expenses
Sales, Gen. & Admin. Exp.
Operating Profit
Margins (%)
Other Income
Depreciation
Provision for Tax
Rate (%)
PAT bef. Extra-ordinary
Q-o-Q Change (%)
Diluted EPS (INR)
USD Revs
Q-o-Q Change (%)
E: MOSL Estimates
October 2013
FY12
1Q
13,672
5.7
9,995
1,155
2,522
18.4
338
468
2,392
544
22.7
1,848
-5.1
8.8
271
-2.0
2Q
13,289
-2.8
9,454
1,221
2,614
19.7
340
455
2,499
605
24.2
1,894
2.5
9.0
266
-1.8
3Q
13,551
2.0
9,596
1,280
2,675
19.7
441
415
2,701
614
22.7
2,087
10.2
9.9
252
-5.2
FY13
4Q
13,062
-3.6
9,088
1,274
2,700
20.7
394
407
2,687
594
22.1
2,093
0.3
9.9
248
-1.6
1Q
12,571
-5.4
9,052
1,191
2,328
18.5
423
378
2,373
529
22.3
1,844
-2.6
8.8
237
-6.0
2Q
14,054
11.8
10,168
1,468
2,418
17.2
290
350
2,358
593
25.1
1,765
-4.3
8.4
263
11.0
3Q
15,398
9.6
11,136
1,463
2,799
18.2
193
365
2,627
701
26.7
1,926
9.1
9.2
265
1.0
4QE
17,656
14.7
12,300
1,818
3,538
20.0
-422
385
2,732
710
26.0
2,022
5.0
9.6
276.6
4.2
FY12
FY13E
53,574
5.1
38,133
4,930
10,511
19.6
1,513
1,745
10,279
2,357
22.9
7,922
-4.6
37.5
1,036
-7.4
59,679
11.4
42,656
5,940
11,083
18.6
484
1,478
10,090
2,533
25.1
7,557
-4.6
35.9
1,042
0.5
C172
Persistent Systems
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
PSYS IN
40.0
25 / 0.4
630 / 409
-2 / 10 / 44

Y/E March
Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh.(INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2012 2013 2014E

10.0 12.9 16.8
2.3
3.4
4.0
1.4
1.9
2.3
35.4 46.9 57.7
3.8 32.4 23.0
216.4 262.1 306.8
17.9 20.2 20.9
17.5 14.7 16.0
49.3 19.2 20.8
17.5
2.9
8.9
1.0
13.2
2.4
6.0
1.5
10.7
2.0
4.7
1.9
2015E
19.6
4.3
2.7
66.8
15.8
366.1
20.4
16.8
21.0
9.3
1.7
4.1
2.3
CMP: INR619
Buy
We expect PSYS' USD revenues to grow 5.5% QoQ to USD66.5m and

INR revenues to grow 16.3% QoQ to INR4.15b.
Growth in Services as well as IP-led business is likely to be strong. We
expect Services revenues to grow 4% QoQ, and HPCA (Radia) revenues
to drive IP-led segment growth of 10.8% QoQ.
EBITDA margin should expand 70bp QoQ to 22.4%. 500bp tailwind to
margins (~450bp from currency and 40-50bp on lower costs) should be
offset by ~350bp headwind (260-270bp offshore wages, 20-30bp
campus joinees, ~50bp on higher CSR, and 20-30bp on new facility in
US).
Our PAT estimate for the quarter is INR488.6m, down from INR571m in
the previous quarter due to lower other income (INR7m v/s INR263m
in 1Q) on the back of forex losses.
The stock trades at 10.7x FY14E and 9.3x FY15E earnings. Buy.

Revenue growth outlook in IP and SMAC
Commentary on potential of winning large deals
Strategy on reinvestment of currency benefits
Commentary on HPCA (Radia) renewals
(INR Million)
Y/E March
Revenues
Q-o-Q Change (%)
EBITDA
Margins (%)
Other Income
Depreciation
Provision for Tax
Rate (%)
PAT aft. Minority and EO
Q-o-Q Change (%)
Diluted EPS (INR)
USD Revenues
Q-o-Q Change (%)
E: MOSL Estimates
October 2013
FY13
1Q
3,007
12.3
807
26.8
-47
185
575
160
27.7
416
2.4
10.4
54.9
6.3
2Q
3,269
8.7
890
27.2
-78
189
623
176
28.3
446
7.4
11.2
60.1
9.4
3Q
3,330
1.9
824
24.7
84
198
710
215
30.3
495
10.9
12.4
60.8
1.2
FY14
4Q
3,340
0.3
831
24.9
102
211
722
203
28.1
519
4.8
13.0
62.1
2.2
1Q
3,573
7.0
777
21.7
263
237
803
232
28.9
571
10.0
14.3
63.0
1.5
2QE
4,155
16.3
931
22.4
7
245
693
204
29.5
489
-14.4
12.2
66.5
5.5
3QE
4,391
5.7
1,062
24.2
-41
248
772
228
29.5
544
11.4
13.6
70.8
6.5
4QE
4,679
6.6
1,280
27.3
-31
251
997
294
29.5
703
29.1
17.6
75.5
6.6
FY13
FY14E
12,945
29.4
3,352
25.9
61
783
2,630
754
28.7
1,876
32.3
46.9
237.8
14.7
16,798
29.8
4,049
24.1
198
981
3,266
959
29.4
2,307
23.0
57.7
275.8
16.0
C173
Tata Consultancy Services

Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
TCS IN
1,957.2
3,811 / 61
2,076 / 1,198
-4 / 19 / 47
CMP: INR1,947

Y/E March
Sales
EBITDA
PAT
EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. yield (%)
2012
488.9
144.2
106.4
54.4
22.5
166.7
36.7
44.1
46.0
2013
629.9
180.9
139.4
71.2
31.0
209.8
37.8
43.8
30.9
2014E
816.5
246.6
178.1
91.0
27.7
260.7
38.7
48.4
33.0
2015E
931.2
268.3
204.0
104.2
14.6
331.0
35.2
42.2
27.8
35.8
11.7
26.3
1.3
27.3
9.3
20.7
1.1
21.4
7.5
15.0
1.5
18.7
5.9
42.2
1.5
Neutral
We expect 2QFY14 revenues to grow 4.9% QoQ to USD3,321m, driven

by [1] ~5% organic revenue growth in CC terms, [2] ALTI contribution
of 1.2%, and [3] negative cross-currency impact of -1% QoQ.
In INR terms, we expect revenue growth of 15.6% QoQ to INR208b.
There will be marginal impact from promotions during the quarter,
along with integration of lower margin ALTI. Despite these, we expect
EBITDA margin to expand 270bp QoQ to 31.3%.
Our SGA assumption for the quarter is 17.3% (v/s 18.6% in 1QFY14).
We expect negative other income of -INR588m (v/s INR2.5b in 1QFY14),
driven by forex loss of INR2.5b during the quarter.
Our PAT estimate stands at INR45.8b, up 20.7% QoQ. PAT margin would
be 22%, up 90bp QoQ. We have assumed effective tax rate of 24%
(similar to 1Q).
TCS has maintained its guidance of beating Nasscom's growth guidance
of 12-14% for FY14.
The stock trades at 21.4x FY14E and 18.7x FY15E EPS. Maintain Neutral,
with a price target of INR2,000.

Commentary on sustainable margins
Probability of higher growth due to reinvestment of currency gains
Deal signings
Quarterly Performance (IFRS)
(INR Million)
Y/E March
Revenues
Q-o-Q Change (%)
EBITDA
Margins (%)
Other Income
PAT
Q-o-Q Change (%)
Diluted EPS (INR)
USD Revenues
Q-o-Q Change (%)
Operating Metrics
Gross Margin (%)
SGA (%)
Tax rate (%)
Util - excl. trainees (%)
Q-o-Q Volume Gr (%)
E: MOSL Estimates
October 2013
FY13
FY14
FY13
FY14E
1Q
148,687
12.1
43,328
29.1
1,754
32,806
11.9
16.8
2,728
3.0
2Q
156,208
5.1
44,403
28.4
3,103
35,121
7.1
17.9
2,853
4.6
3Q
160,699
2.9
46,540
29.0
2,133
35,518
1.1
18.1
2,948
3.3
4Q
164,301
2.2
46,599
28.4
4,185
35,969
1.3
18.4
3,040
3.1
1Q
179,871
9.5
51,532
28.6
2,517
37,962
5.5
19.4
3,165
4.1
2QE
207,982
15.6
65,151
31.3
-588
45,803
20.7
23.4
3,321
4.9
3QE
211,334
1.6
64,355
30.5
1,101
46,456
1.4
23.7
3,409
2.6
4QE
217,361
2.9
65,554
30.2
1,772
47,855
3.0
24.5
3,506
2.9
629,895
28.8
180,870
28.7
11,174
139,413
31.0
71.2
11,568
13.7
816,548
29.6
246,592
30.2
4,802
178,075
27.7
91.0
13,400
15.8
47.2
18.1
22.2
81.3
5.2
46.4
18.0
21.0
81.6
5.0
47.4
18.4
21.8
81.7
1.2
47.8
19.4
23.9
82.0
4.4
47.2
18.6
24.1
82.7
6.1
48.7
17.3
24.0
84.1
6.8
48.2
17.7
24.0
82.7
2.0
48.0
17.8
24.0
82.2
2.2
47.2
18.5
22.3
81.7
15.2
48.0
17.8
24.0
82.9
19.1
C174
Tech Mahindra
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
TECHM IN
231.9
303 / 5
1,434 / 865
-14 / 19 / 31
CMP: INR1,306
Financials & Valuation (INR b)*

Y/E March
2012 2013 2014E
Sales
54.9 143.3 182.3
EBITDA
9.2 30.6 40.3
Adj. PAT
9.3 19.8 26.1
Adj. EPS (INR)
70.4 93.2 122.8
EPS Gr. (%)
29.8 32.4 31.7
BV/Sh.(INR)
339.7 322.3 410.7
RoE (%)
26.0 32.6 33.9
RoCE (%)
14.3 35.3 33.7
Payout (%)
5.7
5.8
4.1
Valuations
P/E (x)
18.6 14.0 10.6
P/BV (x)
3.8
4.1
3.2
EV/EBITDA (x)
18.4
7.8
5.9
Div. Yield (%)
0.3
0.4
0.4
* TECHM standalone
2015E
198.3
41.1
27.9
131.1
6.8
529.1
28.5
28.6
3.8
10.0
2.5
5.2
0.4
Buy
We expect TECHM's revenues to grow 2.8% QoQ to USD745m, partially

aided (50bp) by one month of revenues from the acquisition of
Complex IT. Revenues from BT are likely to decline sequentially, with
growth in all other major segments.
In INR terms, we expect revenue growth of 13.4% QoQ to INR46.5b.
We expect EBITDA margin to expand by 230bp QoQ on account of INR
depreciation, following partial offset of tailwinds, with transitionrelated expenses at onsite.
Our PAT estimate for the quarter is INR6.7b (after adjusting for
restructuring fees), up 2.6% QoQ. This implies PAT margin of 14.4%,
down 150bp QoQ. 1Q PAT was boosted by INR1.4b forex gains.
TECHM trades at 10.6x FY14E and 10x FY15E EPS. Maintain Buy, with a
price target of INR1,580 (12x FY15E EPS).

Commentary on large deals traction and success
Commentary on BT contract under re-negotiation
Large deals progress at Satyam
(INR Million)
Y/E March
Revenues
Q-o-Q Change (%)
Direct Cost
Other Operating Exps
Operating Profit
Margins (%)
Other Income
Interest
Depreciation
Provision for Tax
Rate (%)
Minority Interest
Net Income bef. Extra-ordinary
Q-o-Q Change (%)
Adjust. for Restructuring item
Extra-ordinary items
Net Income aft. EO & Rest. fees
Q-o-Q Change (%)
Diluted EPS (INR)
USD Revenues
Q-o-Q Change (%)
E: MOSL Estimates
October 2013
FY13
1Q
33,727
21,007
5,328
7,392
21.9
1,129
251
915
7,355
1,911
26.0
-40
5,404
335.0
0
5,069
1.5
23.8
615
2Q
35,237
4.5
22,271
5,397
7,569
21.5
-697
214
908
5,750
1,176
20.5
-15
4,559
-15.6
335.0
0
4,224
-16.7
19.9
644
4.7
3Q
36,683
4.1
22,761
5,965
7,957
21.7
1,308
204
866
8,195
1,931
23.6
-109
6,155
35.0
335.0
-2,940
2,880
-31.8
27.4
675
4.7
FY14
4Q
37,673
2.7
23,968
5,992
7,713
20.5
381
253
1,207
6,634
1,461
22.0
-137
5,036
-18.2
335.0
1,340
6,041
109.8
22.1
698
3.5
1Q
41,032
8.9
25,693
6,694
8,645
21.1
2,073
223
1,174
9,321
2,328
25.0
-130
6,863
36.3
335.0
0
6,528
8.1
30.7
724
3.7
2QE
46,535
13.4
27,971
7,678
10,886
23.4
188
224
1,297
9,553
2,388
25.0
-130
7,034
2.5
335.0
0
6,699
2.6
31.5
745
2.8
3QE
47,100
1.2
28,293
7,771
11,035
23.4
25
224
1,283
9,554
2,388
25.0
-130
7,035
0.0
335.0
0
6,700
0.0
31.5
760
2.0
4QE
47,594
1.0
29,999
7,853
9,742
20.5
609
224
1,269
8,858
2,214
25.0
-130
6,513
-7.4
335.0
0
6,178
-7.8
29.1
768
1.0
FY13
FY14E
143,320
182,261
27.2
111,957
29,997
40,307
22.1
2,895
895
5,022
37,285
9,319
25.0
-520
27,446
29.7
1,340.0
0
26,106
43.3
122.8
2,996
13.8
90,007
22,682
30,631
21.4
2,121
922
3,896
27,934
6,479
23.2
-301
21,154
56.8
1,340.0
-1,600
18,214
53.2
93.2
2,633
C175
Wipro
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
WPRO IN
2,461.1
1,169 / 19
501 / 315
-5 / 4 / 20

Y/E March
Sales
EBITDA
PAT
EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div Yld (%)
2012 2013 2014E

318.7 374.3 434.1
74.1 83.7 98.2
62.5 72.0 85.8
21.3 25.0 30.9
-1.3 17.3 23.6
116.5 115.6 138.0
23.8 25.3 27.6
20.2 21.9 25.8
28.2 28.0 24.3
22.3
4.1
16.5
1.3
19.0
4.1
13.8
1.5
15.4
3.4
10.6
1.6
2015E
473.9
104.8
94.2
34.0
10.1
162.7
25.5
24.1
23.5
14.0
2.9
9.6
1.7
CMP: INR475
Buy
Wipro had guided 2-4% QoQ revenue growth for 2QFY14, implying
revenues of USD1,620m-1,650m.
We model revenue growth at 3% QoQ in CC terms and at 2.4% in

reported currency terms to USD1,627m.
We expect SGA to be 12.3% (v/s 12.8% in 1Q) and EBIT margin to expand
230bp QoQ to 20.4%.
IT Services EBIT margin should expand 210bp QoQ to 22.1% on tailwinds

from currency and some leverage from SGA, offsetting headwinds
from wage hikes.
Our PAT estimate for the quarter is INR18.4b, up 13.6% QoQ.
We expect Wipro to sustain its performance for the next quarter as

well, and estimate 2-4% QoQ growth in CC terms.
The stock trades at 15.4x FY14E and 14x FY15E earnings. Buy.

Revenue growth guidance for 3QFY14
Commentary on margins and investment plans
Outlook on declining segments like Telecom OEMs and Hi-tech
Wipro Quarterly Performance (IFRS)
(INR Million)
Y/E March
Revenues
Q-o-Q Change (%)
EBIT
Margins (%)
Other Income
PAT
Q-o-Q Change (%)
Y-o-Y Change (%)
Diluted EPS (INR)
USD Revenues
Q-o-Q Change (%)
Gross Margin (%)
SGA (%)
IT Services EBIT (%)
Tax rate (%)
Utilization-incl.trainees (%)
Q-o-Q Volume Growth(%)
Q-o-Q Realization Chg. (%)
Offshore revenues (%)
Rev Guidance (USDm)
FY13
1Q
106,530
7.9
18,722
17.6
1,223
15,802
6.7
18.4
6.4
1,515
-1.4
31.6
14.0
21.0
20.2
2,632
69.5
0.8
-2.2
46.2
1,5201,550
2Q
106,566
0.0
18,587
17.4
2,662
16,106
1.9
23.8
6.6
1,541
1.7
31.3
13.9
20.7
23.9
2,017
67.5
0.2
1.5
46.6
1,5201,550
3Q
109,487
2.7
18,700
17.1
3,402
17,164
6.6
17.9
7.0
1,577
2.4
31.0
13.9
20.2
21.9
2,336
65.0
-1.0
3.3
46.2
1,5601,590
FY14
4Q
96,078
-12.2
17,067
17.8
2,744
17,373
1.2
17.3
6.4
1,585
0.5
30.3
12.5
20.2
20.1
2,907
65.1
2.5
-2.0
46.6
1,5851,630
1Q
97,294
1.3
17,650
18.1
2,918
16,233
-6.6
2.7
6.6
1,588
0.2
30.9
12.8
20.0
20.7
1,469
64.7
0.9
-0.7
46.1
1,5751,610
2QE
109,044
12.1
22,273
20.4
1,778
18,435
13.6
14.5
7.5
1,627
2.4
32.7
12.3
22.1
23.0
2,715
66.1
3.4
-1.0
46.3
1,6201,650
3QE
112,411
3.1
23,569
21.0
2,227
19,779
7.3
15.2
8.0
1,663
2.2
33.2
12.3
22.8
23.0
3,515
66.0
1.7
0.5
46.2
4QE
115,360
2.6
24,699
21.4
3,189
21,389
8.1
23.1
8.7
1,698
2.1
33.6
12.2
23.4
23.0
3,515
66.0
1.8
0.3
46.3
FY13
FY14E
374,256
17.4
67,346
18.0
11,250
61,362
434,110
16.0
88,190
20.3
10,111
75,835
17.3
25.0
6,218
5.0
30.4
12.4
20.5
21.5
9,892
66.7
4.2
1.7
46.2
23.6
30.9
6,576
5.8
32.7
12.4
22.1
22.5
11,214
65.7
6.3
0.0
46.1
E: MOSL Estimates
October 2013
C176
Sept ember 2013 Results Pr eview | Sect or: Telecom
Telecom
Companies Covered
Bharti Airtel
Bharti Infratel
Idea Cellular
Reliance Communication
Seasonal weakness - wireless traffic to decline ~3% QoQ: In 2QFY14, we expect average
wireless traffic (Bharti/Idea/RCom/Vodafone) to decline ~3% QoQ. At the aggregate
level, 2Q traffic growth has historically declined by 6-7 percentage points as compared
to the average QoQ growth witnessed during the preceding three quarters (3Q-1Q).
Based on the average traffic growth of 3% in the preceding three quarters (3QFY131QFY14), a 'normal' seasonal impact should result in ~3% decline in traffic at the
aggregate level, in-line with our estimates.
Blended RPM to remain flat: Post 4-6% increase in 1QFY14, we expect voice RPM to
remain flat QoQ on a blended basis. TRAI guidelines of reduction in SMS termination
charges and double confirmation for VAS services are likely to impact "non-voice
non-data" revenues (9-10% of India wireless revenues for Bharti/Idea) but should be
offset by strong data revenue growth (~7% of wireless revenues for Bharti/Idea).
EBITDA margin to decline 150/190bp QoQ for Bharti/Idea: We expect 150-190bp EBITDA
margin decline for Bharti/Idea due to negative operating leverage. Our estimates
imply 7/9% QoQ domestic wireless EBIDTA decline for Bharti/Idea, in line with seasonal
weakness.
Abbreviations and acronyms

RPM: revenue per minute
TRAI: Telecom R egulat or y
Authority of India
ARPU: average revenue per
user
MOU: minutes of use
Bharti Africa - expect performance to stabilize: Post disappointments during the past
few quarters in the Africa business, led by regulatory/political uncertainties as well
as competitive action, we expect the performance to stabilize. We model 2/3% QoQ
growth in USD denominated revenues/EBITDA for Bharti Africa.
Subscriber additions remain muted; Aircel's net adds leadership surprises: Subscriber
additions in 2QFY14 remained positive but relatively muted, likely due to seasonal
weakness as well as continued operator discipline towards increasing channel
efficiencies. We note that Indian wireless subscriber base had declined by 71m during
the period July 2012 to February 2013, led by stringent TRAI regulations on the
subscriber acquisition process, decline in industry level channel commissions, and
footprint reduction by challengers. Aircel added the highest subscribers for the second
straight month in August. Given the recent RPM increase for wireless operators (4-6%
QoQ in 1QFY14), we would watch for the net adds trend to ascertain whether Aircel's
strong subscriber growth is driven by opening up of any pricing advantage.
Bharti Airtel
Bharti Infratel
Idea Cellular
Reliance Comm
Sector Aggregate
CMP
(INR)
27.09.13
325
159
172
151
(INR Million)
Rating
Sep.13
Buy
Neutral
Buy
Neutral
209,143
26,670
63,353
53,458
352,624
Sales
Var.
% YoY
7.8
4.4
19.2
2.8
8.6
Var.
% QoQ
3.2
1.7
-3.1
-1.2
1.2
EBITDA
Sep.13
Var.
% YoY
64,406
8.5
10,338
7.9
19,175
34.8
16,735
2.2
110,654
11.1
Var.
% QoQ
-1.6
-2.0
-8.7
-1.6
-3.0
Net Profit
Sep.13
Var.
% YoY
3,350
-53.5
3,428
38.4
4,309
79.6
1,383
4.6
12,470
-7.0
Var.
% QoQ
-51.4
-4.1
-11.7
6.1
-25.1
Shobhit Khare (Shobhit.Khare@MotilalOswal.com) / Anil Shenoy (Anil.Shenoy@MotilalOswal.com)

October 2013
C177
Sharp reserve price cut by TRAI re-confirms that policy regime turning accommodative;
spectrum auction expected in January 2014; spectrum trading can accelerate
consolidation: Recent TRAI recommendations re-confirm our view of a more
accommodative stance by the regulator. The Supreme Court mandated spectrum
auction as well as auction for renewal of spectrum for two operators each in Delhi/
Mumbai/Kolkata is likely to be scheduled in January 2014. TRAI has recommended
~37%/62% cut in reserve price for 1800MHz/900MHz (for Delhi, Mumbai and Kolkata)
to ~INR75b/INR33b. The reserve price is at the upper end of our spectrum valuation
estimate of INR45b-75b. Also, TRAI has allowed spectrum trading, which can be a
significant reform and can accelerate the pace of industry consolidation, in our view.
Assuming spectrum valuation at current reserve prices, our next four-year spectrum
liability incorporated in current target prices (based on 75% of earlier reserve price)
would decline for Bharti from ~INR188b (INR47/share) to ~INR142b (INR36/share) and
for Idea from ~INR129b (INR39/share) to ~INR118b (INR36/share).
Passive consolidation "in progress" - M&A to follow?: We believe incumbents could
be gearing up to be natural consolidators post announcement of final policy on M&A
(expected in October 2013), given (1) increased market maturity (2) funding/leverage
constraints for challengers, and (3) some gaps in incumbents' portfolio like 3G dark
circles and circles where their revenue market share is below 15% (especially Idea,
with single-digit revenue market share in 8/22 circles).
Valuation and view: Over FY13-15, we expect 15/26/11% EBITDA CAGR for Bharti/Idea/
RCom led by 6/10/4% traffic CAGR and 4-5% RPM CAGR in the India wireless business.
We reiterate Buy on Bharti (trades at ~6.1x proportionate FY15E EV/EBITDA) and Idea
(trades at ~6.5x FY15E EV/EBITDA), and Neutral on RCom (trades at ~7.4x FY15E EV/
EBITDA).
Wireless subscriber net additions (m)

19 20 20
Industry subscriber
additions have stabilized
15 13
11
7 7 8 8
9 10 7 8
8
2
-5
-2 -1
-2 -2
3 3 2
-1
-14
-21
Jan-11
Feb-11
Mar-11
Apr-11
May-11
Jun-11
Jul-11
Aug-11
Sep-11
Oct-11
Nov-11
Dec-11
Jan-12
Feb-12
Mar-12
Apr-12
May-12
Jun-12
Jul-12
Aug-12
Sep-12
Oct-12
Nov-12
Dec-12
Jan-13
Feb-13
Mar-13
Apr-13
May-13
Jun-13
Jul-13
-26
Source: TRAI, MOSL
October 2013
C178
^ Z W ^ d
YY
Y&z

Y&z
Y&z
Y&z
s /
Y&z
Y&z
ZKD
Y&z
Y&z
Y&z
/
Y&z
t
YY
zz
Y&z
dZWD/EZ
Bha rti
Idea
Voda foneIndi a
RCOM
47
tZWD
YY
45.7
44.0
43.7
42.5
45
43
41
2QFY14E/A
1QFY14E
4QFY13
3QFY13
2QFY13
1QFY13
4QFY12
3QFY12
2QFY12
1QFY12
39
ZWD
QoQ traffi c growth (%)
6
1
5
3
4
2
1
2
0
0
1QFY14E
4QFY13
3
1QFY13
4QFY12
3QFY12
2QFY12
2
2QFY13
1
1QFY12
14
15
15
13
12
2QFY14E
/zz
13
11
/ Z s
3QFY13
2QFY13
1QFY13
4QFY12
3QFY12
2QFY12
1QFY12
4QFY13
K
3
1QFY14

YY

3
1
2QFY14E/A
QoQ RPM growth (%)
3QFY13
10
8
6
4
2
0
2
4
^ dZ/ DK^>

Bharti: Non-voice contribution

Non Voi ce a s a % revenu e
17.3
16.8
16.3
4.3
Traditional VAS and SMS

are likely to be under
pressure, offset by
continued strong data
growth
1QFY13
Data as a % revenu e
17.4
17.3
5.7
6.5
7.4
5.2
2QFY13
3QFY13
4QFY13
1QFY14
Idea: Non-voice contribution

Non Voi ce as a % reven ue
Data a s a % revenu e
14.5
15.6
14.6
15.2
16.0
5.7
7.2
5.4
6.6
4.5
1QFY13
2QFY13
3QFY13
4QFY13
1QFY14
Net Debt/EBITDA (FY13)

5.9
3.2
2.6
RCom
Voda fone Indi a
Bh arti
2.1
Ide a
Leverage remains
reasonable for Bharti/ Net Debt/Equity (FY13)
Idea, but alarming for
RCom
1.4
1.2
0.9
RCo m
Idea
B harti
Source: Compan y, MOSL
October 2013
C180
2QFY14: Summary Expectations

Wireless KPIs
FY12
YoY
(%)
QoQ
(%)
193
127
128
154
4.0
9.8
-5.3
1.1
1.3
1.5
1.6
-0.4
190
123
124
154
192
126
127
155
2.9
8.2
-12.4
1.0
1.3
2.1
1.9
0.6
193
167
128
187
200
174
129
196
190
164
125
189
7.4
10.7
23.0
11.8
-4.9
-5.9
-2.9
-3.6
435
384
271
329
438
455
406
291
344
459
455
398
283
346
461
433
374
275
334
445
3.9
4.3
16.3
6.4
6.4
-4.9
-5.9
-3.0
-3.6
-3.6
42.6
41.2
43.2
53.9
40.4
42.6
41.1
43.8
53.6
40.2
42.4
41.1
43.9
54.3
40.7
44.0
43.7
45.6
56.6
42.5
44.0
43.7
45.7
56.6
42.5
3.4
6.1
5.8
5.0
5.6
0.0
0.0
0.1
0.0
0.0
234
126
102
144
192
241
132
103
148
197
253
143
105
155
207
258
147
106
160
213
3Q
4Q
1Q
2Q
3Q
4Q
169
95
143
142
173
100
147
145
176
106
150
148
181
113
153
150
187
117
155
154
186
115
135
153
182
114
119
147
188
122
123
152
191
125
126
155
166
92
139
138
171
98
145
143
174
103
149
146
178
110
152
149
184
115
154
152
187
116
145
153
184
115
127
150
185
118
121
150
190
160
103
169
183
155
101
164
187
159
100
167
189
160
99
173
185
156
98
174
177
148
102
169
185
158
119
176
445
391
233
308
411
423
364
227
297
396
419
369
224
303
405
431
379
227
318
424
433
379
228
324
433
417
359
236
313
418
42.8
40.9
44.4
54.8
41.1
43.2
42.6
44.7
55.2
41.4
44.6
43.1
44.5
55.0
41.3
43.8
42.2
43.7
54.4
40.8
42.7
41.2
43.1
53.6
40.2
221
109
98
128
170
217
106
99
128
170
219
114
100
133
178
231
124
103
142
190
239
131
105
148
197
140
95
115
85
90
Sep-13
105
Jun-13
165
Sep-13
115
Aug-13
190
Jul-13
125
Sens ex Inde x
MOSL Tel ecom Index
Mar-13
Se nse x Index
MOSL Te l ecom Index
Jun-13
249
6.4
-3.5
141
12.6
-4.0
104
1.8
-1.2
155
7.5
-3.0
206
7.5
-3.0
Dec-12
October 2013
FY14
1Q
2QE
2Q
Sep-12
EOP Wireless Subs (m)

Bharti (India)
Idea
RCOM
Voda fone - India
AV. Wirele ss Subs (m)
Bharti (India)
Idea
RCOM
Voda fone - India
ARPU (INR/month)
Bharti (India)
Idea
RCOM
Voda fone - India
MOU/Sub
Bharti (India)
Idea
RCOM
Voda fone India (report ed)
Vodafone India (adj)
Revenue per min (p)
Bharti (India)
Idea
RCOM
Wireless traffic (B min)
Bharti (India)
Idea
RCOM
FY13
1Q
C181
Quarterly F inancials (INR b)

FY12
Revenue
Bharti (ex Africa)
Bharti (consolidated)
Idea
RCOM
Vodafone - India (implie d)
EBITDA (INR b)
Bharti (ex Africa)
Idea
RCOM
EBITDA Margin (%)
Bharti (ex Africa)
Idea
RCOM#
PAT (INR b)
Bharti (ex Africa)
Idea
RCOM
EPS (INR)
Bharti
FY13
FY14
1Q
2QE
YoY
(%)
QoQ
(%)
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
126.3
169.7
45.2
53.0
70.0
126.8
172.7
46.2
50.4
70.5
131.6
184.8
50.3
50.5
73.3
134.2
187.3
53.7
53.1
77.4
126.6
185.6
55.0
53.2
79.4
126.9
188.1
53.1
52.0
77.7
131.0
193.6
55.8
53.0
79.2
133.6
195.8
60.6
54.1
84.1
141.2
202.6
65.4
54.1
90.4
138.9
209.1
63.4
53.5
87.7
9.5
11.2
19.2
2.8
12.9
-1.6
3.2
-3.1
-1.2
-3.0
46.0
57.1
12.0
16.0
45.7
58.2
11.9
16.1
45.2
59.6
13.4
16.1
47.4
62.3
15.1
16.3
40.4
54.9
14.4
16.5
40.9
57.0
14.2
16.4
41.5
57.7
14.7
16.5
45.2
60.6
17.5
16.7
49.3
65.4
21.0
17.0
46.0
64.4
19.2
16.7
12.5
13.1
34.8
2.2
-6.6
-1.6
-8.7
-1.6
36.4
33.6
26.6
30.2
36.1
33.7
25.7
31.8
34.4
32.2
26.7
31.9
35.3
33.3
28.1
30.7
31.9
29.6
26.1
31.0
32.3
30.3
26.8
31.5
31.6
29.8
26.4
31.2
33.9
30.9
28.9
30.9
34.9
32.3
32.1
31.4
33.1
30.8
30.3
31.3
15.2
12.2
1.8
2.2
14.5
10.3
1.1
3.2
12.7
10.1
2.0
2.4
13.5
10.1
3.4
2.0
15.8
7.6
2.3
1.9
13.9
7.2
2.4
1.3
8.9
2.8
2.3
1.1
10.8
5.1
3.8
-2.4
14.8
6.9
4.9
1.3
12.1
3.4
4.3
1.4
-13.1
-53.5
79.6
4.6
-18.5
-51.4
-11.7
6.1
3.2
2.7
2.7
2.7
2.0
1.9
0.7
1.3
1.8
0.8
-55.9
-53.4
0.5
1.1
0.3
1.6
0.6
1.2
0.7
1.0
0.7
0.9
0.7
0.6
0.7
0.6
0.9
-1.2
1.4
0.6
1.3
0.7
79.3
4.6
-6.9
6.1
24.7
20.6
7.8
11.0
26.5
25.5
12.0
18.8
12.6
10.4
11.0
9.0
8.4
4.1
9.7
6.5
13.3
4.3
3.6
3.5
3.6
4.3
3.7
4.2
4.2
3.4
2.5
interconnect revenue of ~INR5.9b and one-time EBITDA of ~INR2.4b
20.6
5.1
3.1
-19.0
-47.8
-26.7
64.0
18.0
26.8
Idea
RCOM
Capex (INR b)
Bharti (ex Africa)
Idea
RCOM
* 2QFY13 adjusted for one-time
88bp -178bp
51bp -150bp
350bp -187bp
-19bp -13bp
CMP (INR)
27.09.13
Telecommunication
Bharti Airtel
325
Bharti Infratel
159
Idea Cellular
172
Reliance Comm
151
Sector Aggregate
October 2013
Rating
Buy
Neutral
Buy
Neutral
EPS (INR)
FY13 FY14E FY15E
6.0
5.6
3.1
0.9
7.7
7.4
6.0
4.9
13.7
9.9
8.9
11.2
P/E (x)
FY13 FY14E FY15E
EV/EBITDA (x)
FY13 FY14E FY15E
54.2
28.6
56.4
160.3
55.4
8.1
8.7
11.7
10.6
9.1
42.4
21.5
28.8
31.0
33.5
23.7
16.2
19.3
13.5
19.7
7.1
7.9
8.2
9.3
7.7
5.8
7.0
6.5
7.4
6.3
RoE (%)
FY13 FY14E FY15E
4.2
6.3
7.4
0.6
4.0
5.2
8.0
12.8
3.4
6.1
8.4
10.3
16.6
7.5
9.5
C182
Bharti Airtel
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
BHARTI IN
3,997.4
1,300 / 21
370 / 257
1 / 7 / 18
CMP: INR325

Y/E March
Net Sales
EBITDA
Adj. Net Profit
Adj. EPS (INR)
Adj. EPS Gr. (%)
BV/Sh (INR)
RoE (%)
RoCE (%)
Div. payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2012
714.5
237.1
42.6
11.2
-29.6
140.7
8.1
6.2
10.0
2013
769.0
232.6
22.8
6.0
-46.6
143.4
4.2
4.3
10.0
2014E
853.0
271.9
30.3
7.7
27.9
158.5
5.2
5.0
10.0
2015E
920.7
309.4
54.7
13.7
78.7
171.4
8.4
6.2
10.0
28.9
2.3
8.1
0.3
54.2
2.3
8.0
0.2
42.4
2.1
7.6
0.2
23.7
1.9
6.1
0.4
Buy
We expect consolidated revenues to grow 8% YoY and 3% QoQ to

INR209.1b. India revenues would grow 5% YoY to INR139b while Africa
business revenues would grow 2% QoQ to USD1.08b.
Consolidated EBITDA margin is likely to decline by ~150bp. We expect
~180bp QoQ EBITDA margin decline for the India business, largely due
to decline in traffic at flat RPM due to seasonal weakness.
India mobile revenues would decline 3% QoQ to INR112b, due to 3.5%
QoQ traffic decline and flat wireless RPM. We estimate EBITDA margin
for mobile business at 30.4%.
After weak performance in 1QFY14 (revenue decline of 5%), Africa
business is expected to post stronger results, with 2/3% revenue/
EBITDA growth QoQ in USD terms. We estimate an ARPU of USD5.5 and
subscriber base of 67m.
Consolidated net profit is likely to decline 54% YoY to INR3.4b. PAT for
India & SA is expected to remain flat YoY.
We have estimated a forex loss of INR 2.8b for Bharti for 2QFY14.
Bharti trades at proportionate EV/EBITDA of 7.6x FY14E and 6.1x FY15E.
Maintain Buy.

QoQ mobile traffic growth in India business (we expect 3.5% decline),
forex loss (we have modeled INR 2.8b), African business financials
(we have 2/3% revenue/EBITDA growth QoQ in USD terms.
Y/E March
(INR Million)
FY13
1Q
2Q
3Q
4Q
Revenue
185,601 193,999 193,624 195,821
YoY Growth (%)
9.3
12.3
4.8
4.6
EBITDA
54,856
59,369
57,749
60,605
YoY Growth (%)
-3.9
2.1
-3.1
-2.8
QoQ Growth (%)
-12.0
8.2
-2.7
4.9
Margin (%)
29.6
30.6
29.8
30.9
Net Finance Costs
7,367
9,250
12,310
11,157
Depreciation & Amortization
35,901
36,891
37,350
38,006
Profit before Tax
12,294
14,211
9,032
12,317
Income Tax Expense / (Income)
4,543
7,195
6,192
7,254
Profit after Tax
7,751
7,016
2,839
5,063
Minority interest
-129
196
-2
23
Reported Net Profit / (Loss)
7,622
7,212
2,836
5,086
YoY Growth (%)
-37.3
-29.8
-72.0
-49.4
Consolidated net debt (INR b)
656
612
585
586
India - Mobi le Traffic (B Min)
239
234
241
253
QoQ Growth (%)
3.7
-2.1
2.8
5.1
India - Mobile RPM (p/min)
42.7
42.6
42.6
42.4
QoQ Growth (%)
-2.6
-0.2
-0.1
-0.5
Africa - Revenue (USD m)
1,066
1,097
1,133
1,120
Africa - EBITDA (USD m)
275
298
300
285
Africa - EBITDA margin (%)
25.8
27.1
26.5
25.4
E: MOSL Estimates
October 2013
FY14
1Q
2QE
3QE
202,639 209,143 216,734
9.2
7.8
11.9
65,449
64,406
68,582
19.3
8.5
18.8
8.0
-1.6
6.5
32.3
30.8
31.6
11,676
13,037
10,006
38,470
41,430
41,950
16,125
10,816
17,561
8,573
7,079
8,785
7,553
3,738
8,776
-664
-388
-395
6,889
3,350
8,380
-9.6
-53.5
195.4
593
674
648
258
249
257
2.1
-3.5
3.0
44.0
44.0
44.5
3.9
0.0
1.2
1,062
1,085
1,124
283
291
306
26.7
26.8
27.2
FY13
FY14E
4QE
224,461 769,045 852,977
14.6
7.6
10.9
73,454 232,579 271,891
21.2
-1.9
16.9
7.1
32.7
30.2
31.9
9,762
40,085
44,481
42,578 148,148 164,429
22,111
47,852
66,614
10,014
25,183
34,450
12,097
22,669
32,164
-395
88
-1,842
11,702
22,757
30,322
130.1
-46.6
33.2
631
586
631
267
968
1,032
4.0
45.0
42.4
44.4
1.1
1,162
4,416
4,433
313
1,157
1,193
26.9
26.2
26.9
C183
Bharti Infratel
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
BHIN IN
1,888.7
301 / 5
216 / 126
13/-15/-

Y/E March
Net Sales
EBITDA
Adj. Net Profit
Adj. EPS (INR)
Adj. EPS Gr. (%)
BV/Sh (INR)
RoE (%)
RoCE (%)
Div. payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2013
102.7
38.3
10.0
5.6
29.6
91.0
6.3
5.6
86.5
2014E
107.7
42.0
14.0
7.4
33.0
94.1
8.0
7.0
58.2
2015E
117.5
46.5
18.6
9.9
32.9
98.1
10.3
8.6
60.1
28.6
1.7
7.7
3.0
21.5
1.7
6.9
2.7
16.2
1.6
6.1
3.7
CMP: INR159
Neutral
We expect revenue to grow 1.7% QoQ to INR26.7b.
Revenue from rent is likely to grow 1.9% QoQ, while energy and other
reimbursements are likely to grow 1.5% QoQ.
We expect EBITDA to decline 2% QoQ to INR10.34b due to one-off

income of INR193m in 1QFY14; proforma EBITDA is expected to remain
largely flat. EBITDA margin would decline ~150bp QoQ to 38.8%;
however, profroma EBITDA margin is likely to improve by ~35bp.
We expect 4.1% QoQ decline in reported PAT to INR3.43b. On a liketo-like basis, PAT is expected to increase 7% QoQ.
Bharti Infratel trades at an EV/EBITDA of 6.9x FY14E and 6.1x FY15E.

Neutral.

EBITDA margin (we expect 38.8%), Rental revenue mix (we expect
61%).
(INR Million)
Y/E March
1Q
Sales
24,165
YoY Change (%)
Operating expenses
15,306
EBITDA
8,859
YoY Change (%)
EBITDA margin (%)
36.7
Depreciation
5,396
Interest
849
Other Income
543
PBT
3,157
Tax
1,023
32.4
Adjusted net profit
2,134
YoY Change (%)
Revenue mix
Rent revenue mix (%)
63
Energy & other reimbursements (%) 37
E: MOSL Estimates
October 2013
FY13
FY14
2Q
25,555
3Q
26,264
15,977
9,578
16,448
9,816
37.5
5,528
1,033
646
3,663
1,186
32.4
2,477
37.4
5,620
996
569
3,769
1,228
32.6
2,541
62
38
62
38
FY13
4Q
26,736
11.3
16,687
10,049
-16.7
37.6
5,655
1,067
1,369
4,696
1,845
39.3
2,873
34.3
1Q
26,220
8.5
15,670
10,550
19.1
40.2
5,528
1,044
1,469
5,447
1,871
34.3
3,576
67.6
2QE
26,670
4.4
16,333
10,338
7.9
38.8
5,597
1,039
1,484
5,186
1,758
33.9
3,428
38.4
3QE
27,172
3.5
16,675
10,497
6.9
38.6
5,683
1,037
1,487
5,264
1,784
33.9
3,479
36.9
4QE
27,682
3.5
17,023
10,659
6.1
38.5
5,771
1,032
1,502
5,358
1,811
33.8
3,545
23.4
61
39
61
39
61
39
61
39
61
39
FY14E
102,720 107,744
8.7
4.9
64,418
65,701
38,302
42,043
8.2
9.8
37.3
39.0
22,199
22,579
3,945
4,151
3,127
5,942
15,285
21,254
5,282
7,225
34.6
34.0
10,003
14,029
33.2
40.3
62
38
61
39
C184
Idea Cellular
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
IDEA IN
3,316.7
571 / 9
177 / 79
1 / 47 / 94

Y/E March
2012 2013 2014E
Net Sales
195.4 224.6 263.8
EBITDA
50.9 60.0 81.7
Adj. Net Profit
7.2 10.1 19.8
Adj. EPS (INR)
2.2
3.1
6.0
Adj. EPS Gr. (%) -19.6 39.6 95.6
BV/Sh (INR)
39.5 43.6 49.8
RoE (%)
5.7
7.4 12.8
RoCE (%)
5.4
5.7
8.2
Div. Payout (%)
0.0 11.5 11.5
Valuations
P/E (x)
78.7 56.4 28.8
P/BV (x)
4.4
4.0
3.5
EV/EBITDA (x)
13.8 11.6
8.2
Div. Yield (%)
0.0
0.2
0.4
2015E
299.3
95.6
29.6
8.9
49.4
57.7
16.6
11.5
11.5
19.3
3.0
6.5
0.6
CMP: INR172
Buy
Idea's consolidated revenues are likely to grow 19% YoY (decline 3%

QoQ) to INR63.4b.
We expect Idea to report mobile traffic decline of 4% QoQ (13% growth

YoY). We expect RPM to remain flat QoQ (6% growth YoY).
ARPU is likely to decline 6% QoQ to INR164 (v/s 4% increase in 1QFY14).
EBITDA margin would decline 190bp QoQ to 30.3%. EBITDA loss in new
circles is estimated at INR1.73b.
Net profit is expected to decline 12% QoQ to INR4.3b.
Idea trades at an EV/EBITDA of 8.2x FY14E and 6.5x FY15E. Maintain

Buy.

QoQ RPM trend (we expect RPM to remain flat), mobile traffic (We
expect 4% QoQ decline) & EBITDA loss in new circles (we expect INR
1.73b).

FY13
1Q
2Q
3Q
4Q#
Gross Revenue
55,037
53,140
55,785
60,614
YoY Growth (%)
21.7
15.0
10.9
12.9
QoQ Growth (%)
2.5
-3.4
5.0
8.7
EBITDA
14,355
14,225
14,734
17,491
YoY Growth (%)
19.2
19.9
9.6
16.1
QoQ Growth (%)
-4.8
-0.9
3.6
18.7
Margin (%)
26.1
26.8
26.4
28.9
Net Finance Costs
2,670
2,164
2,416
2,244
8,324
8,526
8,836
9,092
Profit before Tax
3,361
3,536
3,482
6,155
Inc ome Tax Exp. / (Income)
1,019
1,136
1,196
2,313
Adj Net Profit / (Loss)
2,342
2,400
2,286
3,842
YoY Growth (%)
32.1
126.9
13.7
12.0
Margin (%)
4.3
4.5
4.1
6.3
Mobile ARPU (INR/month)
156
148
158
167
QoQ Growth (%)
-2.5
-5.1
6.8
5.7
Mobile MOU/sub/month
379
359
384
406
QoQ Growth (%)
0.0
-5.3
7.0
5.7
Mobi le Traffic (B Min)
131
126
132
143
QoQ Growth (%)
5.3
-4.0
5.2
8.5
Mobile RPM (INR)
0.41
0.41
0.41
0.41
QoQ Growth (%)
-2.5
0.2
-0.2
0.0
E: MOSL Estimates; # Adjusted for one-off provision for licence and WPC
(INR Million)
Y/E March
October 2013
1Q#
65,388
18.8
7.9
21,013
46.4
20.1
32.1
2,211
11,353
7,450
2,572
4,878
108.2
7.5
174
4.2
398
-2.0
147
2.8
0.44
6.3
charges of
FY14
FY13
FY14E
2QE
3QE
4QE
63,353
65,841
69,213 224,578 263,794
19.2
18.0
14.2
14.9
17.5
-3.1
3.9
5.1
19,175
20,140
21,592
60,045
81,670
34.8
36.7
23.4
17.9
36.0
-8.7
5.0
7.2
30.3
30.6
31.2
26.7
31.0
1,953
1,608
1,544
9,494
7,316
10,593
10,789
11,066
34,778
43,800
6,629
7,744
8,982
15,774
30,554
2,320
2,710
3,144
5,664
10,746
4,309
5,033
5,838
10,110
19,807
79.6
120.2
52.0
39.8
95.9
6.8
7.6
8.4
4.5
7.5
164
167
170
156
166
-5.9
1.7
2.1
-0.9
6.3
374
377
375
376
379
-5.9
0.6
-0.4
1.2
0.8
141
146
150
532
584
-4.0
3.0
2.9
17.4
9.8
0.44
0.44
0.45
0.41
0.44
0.0
1.1
2.4
-2.1
5.5
INR0.76b in 4QFY13 and INR0.25b in 1QFY14
C185
Reliance Communications
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
RCOM IN
2,064.0
312 / 5
164 / 50
25 / 169 / 131

Y/E March
Net Sales
EBITDA
Adj. Net Profit
Adj. EPS (INR)
Adj. EPS Gr. (%)
BV/Sh (INR)
RoE (%)
RoCE (%)
Div. Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2012 2013 2014E

203.4 210.0 219.5
64.5 66.1 71.1
9.9
1.9 10.0
4.8
0.9
4.9
-33.8 -80.3 416.4
157.9 142.8 143.8
2.9
0.6
3.4
2.7
3.3
3.8
6.5
9.0
6.6
31.6 160.5
1.0
1.1
10.4 10.6
0.2
0.2
2015E
236.2
81.4
23.1
11.2
130.3
154.8
7.5
5.6
2.8
31.1
1.1
9.3
0.2
13.5
1.0
7.4
0.2
CMP: INR151
Neutral
We expect revenues to decline 1.2% QoQ to INR53.4b.
After 4% RPM growth in 1QFY14, we expect RPM to remain flat at

INR0.46.
With lower impact of seasonality on RCom, wireless traffic decline is

likely to be relatively lower at 1.2% to 104b minutes.
Consolidated EBITDA is likely to decline 2% QoQ to INR16.7b.
We expect RCom to report proforma PAT of INR1.38b.
RCom trades at an EV/EBITDA of 9.3x FY14E and 7.4x FY15E. Neutral.

RPM trend (we expect flat RPM), traffic growth (we expect 1.2%
decline).
(INR Million)
Y/E March
1Q
Gross Revenue
53,192
YoY Growth (%)
7.7
QoQ Growth (%)
0.2
EBITDA
16,502
YoY Growth (%)
3.0
QoQ Growth (%)
1.1
Margin (%)
31.0
Net Finance Costs
5,534
9,093
Profit before Tax
1,875
Income Tax Expense / (Income)
-39
Adjusted Net Profit / (Loss)
1,914
YoY Growth (%)
-14.4
QoQ Growth (%)
-5.1
Margin (%)
3.6
Extraordinary Exp/Minority Interest 290
Reported Net Profit / (Loss)
1,624
Wireless ARPU (INR/month)
98
QoQ Growth (%)
-1.0
Wireless MOU/sub/month
228
QoQ Growth (%)
0.4
Wireless Traffic (B Min)
105
QoQ Growth (%)
1.8
Wireless RPM (INR)
0.43
QoQ Growth (%)
-1.3
E: MOSL Estimates
October 2013
FY13
2Q
52,020
3.2
-2.2
16,382
2.1
-0.7
31.5
5,929
9,130
1,323
0
1,323
-59.0
-30.9
2.5
302
1,021
102
3.8
236
3.6
102
-2.5
0.43
0.2
3Q
53,013
4.9
1.9
16,533
2.6
0.9
31.2
6,054
9,337
1,142
0
1,142
-52.6
-13.6
2.2
87
1,055
119
16.6
271
14.8
103
0.5
0.44
1.6
FY14
4Q
54,059
1.8
2.0
16,684
2.2
0.9
30.9
7,475
10,892
-1,683
751
-2,434
-220.7
-313.1
-4.5
-5,461
3,027
128
7.5
291
7.4
105
2.3
0.44
0.1
1Q
54,117
1.7
0.1
17,012
3.1
2.0
31.4
6,870
8,831
1,311
7
1,304
-31.9
-153.6
2.4
220
1,084
129
1.1
283
-2.7
106
0.2
0.46
3.9
2QE
53,458
2.8
-1.2
16,735
2.2
-1.6
31.3
6,490
8,854
1,391
7
1,383
4.6
6.1
2.6
250
1,133
125
-2.9
275
-3.0
104
-1.2
0.46
0.1
3QE
55,055
3.9
3.0
18,014
9.0
7.6
32.7
6,101
8,881
3,032
16
3,016
164.0
118.0
5.5
250
2,766
128
1.9
276
0.5
107
2.2
0.46
1.4
FY13
FY14E
4QE
56,911 210,035 219,541
5.3
3.3
4.5
3.4
19,376
66,101
71,137
16.1
2.5
7.6
7.6
34.0
31.5
32.4
6,103
24,992
25,563
8,909
38,452
35,475
4,365
2,657
10,099
23
712
54
4,342
1,945
10,045
-278.4
-80.3
416.4
43.9
7.6
0.9
4.6
250
-4,782
970
4,092
6,727
9,075
130
109
128
2.1
6.9
17.6
277
251
278
0.5
9.0
10.6
109
416
426
2.4
4.1
2.4
0.47
0.43
0.46
1.6
-1.8
6.3
C186
September 2013 Results Preview | Sector: Utilities
Utilities
Companies Covered
CESC
Coal India
JSW Energy
NHPC
NTPC
Power Grid
PTC India
We expect utility companies in our coverage to report aggregate 2QFY14 revenue

growth of 5.2% YoY and PAT growth of 8.4% YoY. PAT growth would mainly be led by
JSW Energy (55.4% on lower base), and PSUs NTPC, PGCIL and NHPC to grow by 17.5%,
12.5% and 16.3% respectively led by benefits coming from new capacity additions.
We expect Coal India's PAT to grow by 7.4% to INR33b. We estimate a decline in Tata
Power's PAT due to lower contribution from mining business, while PTC India's PAT is
expected to be lower due to tolling arrangement conversion to trading.
July/Aug 2013 generation grew by 6.4% YoY but PLF dips by 165bp: In July/Aug 2013, all
India generation grew by 6.4% YoY, led by lower demand from SEBs. The overall PLF
was down by 165bp to 54.5% v/s 56.2% for the same period last year. Coal and lignitebased generation grew by 5.2% YoY but PLF was down by 560bp led by higher hydro
generation, which impacted coal-based demand. Gas-based generation continued to
de-grew (45% YoY) on account of decline in gas production in India. Hydro generation
was up by 35% YoY led by good monsoon, while nuclear generation grew by 15% YoY.
Generation growth could be better in the second half led by elections.
Tata Power
Power deficit declines to 3.6% for July/August 2013; peak deficit for YTD FY14 also
down to 6.3%: For July/August 2013, power demand has increased by 1.8% YoY and
supply increased by 8% YoY, leading to a deficit of 3.6% v/s 9.1% for the same period
last year. Southern region registered significant improvement, with the deficit reducing
to 4.8% from 14.3% last year. Substantial improvement is on account of lower demand
led by good monsoon and reluctance of SEBs to buy high cost power. The deficit in
western region has substantially lowered to 0.5% from 3.3%. Improvement in the
western region is led by addition of large projects in the states of Madhya Pradesh,
Gujarat and Maharashtra.
Imported coal prices remain weak, INR depreciation nullifies impact; ST (IEX) prices
dip to INR2/unit: Imported coal prices' average during the quarter stood at USD73/t v/

CMP
(INR)
27.09.13
CESC
336
Coal India
307
Jaiprakash Power
16
JSW Energy
46
NHPC
20
NTPC
148
Power Grid Corp.
99
PTC India
46
393
Tata Power
82
Sector Aggregate
(INR Million)
Rating
Sep.13
Buy
Neutral
Buy
Neutral
Neutral
Buy
Buy
Buy
Buy
Neutral
14,675
156,744
10,134
21,963
18,312
144,566
37,413
31,146
35,018
96,643
566,615
Sales
Var.
% YoY
9.2
7.6
11.9
5.8
3.3
-10.3
21.2
11.5
0.0
25.5
5.2
Var. Sep.13
% QoQ
2.2
3,265
-4.8 32,285
28.9
8,591
-9.7
8,028
13.1 12,512
-7.4 36,803
2.0 32,479
12.4
300
6.8
4,425
3.5 15,330
-1.3 154,017
EBITDA
Var.
% YoY
5.0
12.8
5.9
39.2
4.0
-12.9
21.7
-47.3
-2.4
1.6
4.9
Var.
% QoQ
1.7
-18.4
46.0
-13.0
16.9
-13.7
2.6
-11.8
0.6
-25.8
-8.5
Net Profit
Var.
% YoY
1,411
3.8
33,050
7.4
3,325
-9.2
2,510
55.4
8,455
16.3
22,167
17.5
11,327
12.5
242
-45.7
3,137
-24.3
1,369
-33.6
86,992
8.4
Sep.13
Var.
% QoQ
7.7
-11.5
182.1
-38.9
18.1
-4.7
-1.2
-17.3
-16.2
26.6
-4.4
Nalin Bhatt (NalinBhatt@MotilalOswal.com)/Aditya Bahety (Aditya.Bahety@MotilalOswal.com)

October 2013
C187
s USD88/t YoY. Benefit to generators has been limited as the decline in prices was
offset by depreciation in INR (14.3% to USD62.5/INR, v/s USD55/INR YoY). Short term
prices in the day ahead market remained muted, with prices at INR2.3/unit for July
2013 and INR2/unit for August 2013, while average prices for the quarter stood at
INR2.4/unit. Short term forward contract prices dipped below ~INR4/unit.
Valuation and view: Power sector has begun to witness several initiatives by authorities
to address concerns on SEBs, fuel supply pacts and PPAs. It would however take some
time for clarity on several issues to emerge. In this environment, we continue to
prefer CPSUs which are relatively better positioned on these fronts.
July/Aug-13: All-India generation grew 6.4% YoY

Al l Indi a Genera ti on (BUs )
Coal plant PLF dipped by 5.5ps YoY

Centre Sector
Gr (YoY, %)
14
14
9 9
Sta te Sector
Pri vate Sector
100
8
5
2
8
2 2 4
6
3
85
7
4 4
6 7
70
0
73
72
70
74
71
73
73
71
77
75
79
76
75
73
72
78
73
76
78
68
80
77
84
76
80
78
-4
55
Power demand grew by 1.8% in July/Aug-13

FY14
100
FY13
Base deficit declines in July/Aug-13 to 3.6%
Gr (%)
16%
92
FY14
14
FY12
FY13
11
8%
8
8
6
3
Mar
...Forward ST price dip below INR4/unit

4.8
5.3
May-14
Apr-14
Mar-14
Feb-14
Jan-14
Dec-13
Nov-13
Oct-13
Sep-13
2.4
3.8
2QFY14
2.7
1QFY14
4QFY13
3QFY13
2QFY13
3QFY12
4QFY11
3QFY11
October 2013
4.4
3.2
3.5
3.1
1QFY13
3.5
3.4
2.9
2QFY12
4QFY12
3.1
1QFY12
3.6
4.6
4.4
2.3
3.1
2QFY11
1QFY11
Feb
Jan
Dec
Nov
Mar
Feb
Jan
Dec
Nov
Oct
Sept
Aug
July
June
May
April
ST prices slightly decline to 2.4 (INR/unit)...
2
May
-8%
60
Apr
79 84 85 86 83 80 84 79 85 85 73 86
Oct
0%
68
Sep
83
Aug
83
87
Jul
91
Jun
84
76
Jul-11
Aug-11
Sep-11
Oct-11
Nov-11
Dec-11
Jan-12
Feb-12
Mar-12
Apr-12
May-12
Jun-12
Jul-12
Aug-12
Sep-12
Oct-12
Nov-12
Dec-12
Jan-13
Feb-13
Mar-13
Apr-13
May-13
Jun-13
Jul-13
Aug-13
Jul-11
Aug-11
Sep-11
Oct-11
Nov-11
Dec-11
Jan-12
Feb-12
Mar-12
Apr-12
May-12
Jun-12
Jul-12
Aug-12
Sep-12
Oct-12
Nov-12
Dec-12
Jan-13
Feb-13
Mar-13
Apr-13
May-13
Jun-13
Jul-13
Aug-13
40
C188
QoQ (%)
* 6,200Kcal, FoB South Africa
2QFY14
1QFY14
-10%
1QFY11
2QFY14
1QFY14
4QFY13
3QFY13
2QFY13
1QFY13
4QFY12
3QFY12
2QFY12
1QFY12
4QFY11
3QFY11
2QFY11
1QFY11
-0.40
4QFY13
91 88 104121121117107105 96 88 86 85 81 73
50
-2%
3QFY13
-0.15
14%
6%
2QFY13
75
22%
55 55 54 54 57
1QFY13
0.10
51 50
INR/USD
63
46 46 45 45 45 46
4QFY12
100
2QFY12
0.35
YoY (%)
1QFY12
66
61
56
51
46
41
36
4QFY11
QoQ
0.60
3QFY11
YoY
125
2QFY11
Avg RB Index (USD/ton)
INR declines to all-time low compared to USD
3QFY12
RB Index* prices decline substantially (USD/ton)
Source: CEA, CERC and Bloomberg
Sens ex Index
MOSL Util i ti es Index
105
Se ns e x Index
MOSL Uti l i ti e s Inde x
110
100
100
95
90
90
80
Sep-13
Aug-13
Jul-13
Jun-13
85
70
Se p-12 Dec-12 Ma r-13 Jun-13 Se p-13
CMP (INR)
27.09.13
Rating
EPS (INR)
FY13 FY14E FY15E
P/E (x)
FY13 FY14E FY15E
EV/EBITDA (x)
FY13 FY14E FY15E
RoE (%)
FY13 FY14E FY15E
Buy
Neutral
Buy
Neutral
Neutral
Buy
Buy
Buy
Buy
Neutral
49.2
28.0
1.3
6.5
1.8
11.1
8.9
6.7
65.2
3.9
6.8
11.0
12.5
7.1
11.3
13.3
11.1
6.8
6.0
21.0
11.5
4.9
7.3
13.9
5.7
8.2
9.1
10.6
5.9
0.6
14.1
8.6
12.3
28.4
6.3
17.8
7.4
12.0
16.6
5.6
10.4
8.1
16.0
Utilities
CESC
Coal India
Jaiprakash Power
JSW Energy
NHPC
NTPC
Power Grid Corp.
PTC India
Reliance Infra.
Tata Power
Sector Aggregate
October 2013
336
307
16
46
20
148
99
46
393
82
53.2
29.6
1.4
7.7
1.9
11.9
8.7
6.8
50.5
3.0
56.8
31.4
2.3
6.9
2.0
13.8
10.5
6.8
55.5
3.4
6.3
10.4
11.2
5.9
10.7
12.5
11.4
6.7
7.8
26.8
10.9
5.9
9.8
7.0
6.6
10.1
10.7
9.4
6.7
7.1
23.7
9.9
4.2
6.3
12.6
4.8
9.1
9.7
9.4
7.1
-1.4
10.4
8.0
3.9
5.9
6.8
4.6
7.8
8.6
8.6
6.5
-1.3
9.7
7.2
12.1
25.7
6.3
19.2
7.4
11.8
15.0
3.6
6.5
8.0
15.2
11.6
24.0
10.1
15.5
7.5
12.7
15.0
4.2
6.8
8.2
15.5
C189
Generation and PLFs of various plants

Capacity
(MW)*
Adani Power
- Mundra
- Tirora
GVK
- JP 1 & 2
- Gautami
GMR
- Barge Mounted
- Chennai
- Vemagiri
JPL
- Chattisgarh
Rel Infra
- Dahanu
- Samalkot (AP)
- Goa
- Kochi
Rel Power
- Rosa
Tata Power
- Trombay
- TISCO (Jamshedpur)
- Mundra UMPP
- Maithon
Torrent Power
- Existing
- Sugen
JSW Energy
- Rajwest
- Karnataka/Ratnagiri
CESC
Lanco Infratech
- Kondapali
- Amarkantak
- UPCL
- Anpara
KSK
- Wardha
Sterlite
- Jharsuguda
*Monitored capacity by CEA
October 2013
Aug-13
Generation PLF (%)
Aug-12
Generation PLF (%)
YTDFY14
Generation PLF (%)
YTDFY13
Generation
PLF (%)
4,620
1,980
2,118.0
799.1
61.6
47.1
1,414.1
0.0
41.1
0.0
11,683.3
2,980.0
68.9
54.2
8,180.7
0.0
48.8
0.0
455
464
74.8
0.0
22.5
0.0
143.1
92.8
43.0
27.4
399.4
0.0
24.0
0.0
969.4
654.0
58.4
38.6
570
200
370
0.0
52.3
0.0
0.0
35.8
0.0
38.1
46.7
70.4
23.7
32.0
26.1
137.0
316.8
177.5
6.6
43.4
13.1
275.5
249.9
658.3
34.3
34.2
48.7
1,000
657.5
88.4
707.3
95.1
3,592.4
97.8
3,522.9
95.9
500
220
48
174
357.3
39.4
21.7
0.0
96.0
24.5
61.9
0.0
385.1
58.8
23.3
0.0
103.5
36.6
66.4
0.0
1,771.9
213.6
105.7
0.0
96.5
26.6
60.3
0.0
1,878.3
409.3
114.6
0.0
102.3
51.0
65.4
0.0
1,200
707.7
79.3
649.2
72.7
3,364.1
76.3
3,160.5
71.7
1,580
441
4,000
1,050
817.2
184.5
1,661.1
298.8
46.2
68.9
55.8
38.3
817.3
265.0
394.5
0.0
65.0
94.3
33.1
0.0
3,378.4
1,028.6
9,718.5
2,391.3
55.7
77.8
66.2
62.0
4,214.9
1,278.7
1,930.8
1,377.0
69.2
91.1
48.9
49.3
500
1,148
177.7
210.0
59.7
25.1
254.2
428.8
85.4
51.2
1,008.1
971.7
68.6
23.2
1,447.3
2,292.8
93.1
54.7
1,080
2,060
1,285
325.0
1,232.7
811.7
40.4
80.4
84.9
295.1
1,401.6
814.6
73.5
91.5
85.2
2,358.7
6,409.8
4,049.3
59.5
84.7
85.8
1,365.3
7,157.5
4,070.6
68.9
94.6
86.3
716
600
1,200
1,200
108.6
159.6
226.3
503.4
20.8
35.8
25.3
56.4
202.9
293.5
331.9
239.6
38.8
65.7
31.2
26.8
651.4
896.3
2,689.1
2,553.2
24.9
40.8
61.0
57.9
1,309.0
1,357.1
1,836.5
1,474.8
50.1
61.6
74.6
33.5
1,140
285.6
58.1
227.0
56.5
1,308.9
63.4
1,495.8
75.4
2,400
487.7
27.3
749.6
42.0
3,753.2
52.6
3,702.6
43.5
Source: CEA
C190
CESC
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
CESC IN
125.6
42 / 1
368 / 253
3 / 22 / -2
2012 2013 2014E

46.0 52.4 58.5
10.8 12.5 13.7
5.5
6.2
6.7
44.1 49.2 53.2
13.5 11.6
8.0
386.6 416.4 463.9
12.1 12.3 12.1
10.6 10.9 10.7
11.3 14.2 13.2
7.6
0.9
5.4
1.5
6.8
0.8
5.2
2.1

Y/E March
Sales
EBITDA
Net Profit
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
CMP: INR336
6.3
0.7
4.5
2.1
2015E
64.8
14.3
7.1
56.8
6.7
515.0
11.6
10.4
14.1
5.9
0.7
4.1
2.4
Buy
We expect CESC to report PAT of INR1.4b, a growth of 3.8%, on account

of higher accretion to regulated assets, capitalized in FY13 and tariff
hike in 4QFY13. We thus expect CESC to report revenue of INR14.7b
(up 9.2% YoY), EBITDA of INR3.3b (up 5% YoY).
We estimate generation of 2.4bu in 2QFY14 and sales of 3.3bu. PLF in
2QFY14 is expected to be almost flat YoY.
CESC has entered into an agreement with the Jharkhand State
Electricity Board (JSEB) for distribution franchise of Ranchi for a period
of 15 years. This is the first distribution franchise for CESC and we
expect CESC to do well on the back of its experience in distribution
business in KLA.
Spencer has been consistently consolidating (closing less profitable
stores) and it has plans to concentrate more on hyper stores.
CESC has recently commissioned its mall in Kolkata. It would also earn
the rental income in the standalone entity. The full year impact of
rental income would be ~INR150m.
We expect CESC to post standalone PAT (ex. Spencer) of INR6.7b in
FY14E (up 8% YoY) and INR7.1b in FY15E (up 6.7% YoY).

Performance of Spencer - same stores revenue growth, stores'
EBITDA.
Details on Ranchi distribution circle.
Details on commissioning of Chandrapur (expected to CoD in FY14).
Quarterly Performance (Standalone Numbers - excl Spencers Retail)
Y/E March
Sales
Change (%)
EBITDA
Change (%)
As of % Sales
Depreciation
Interest
Other Income
PBT
Tax
Reported PAT
Adjusted PAT
Change (%)
Generation
Sales
Realisation (INR/unit)
Overall PLF (Derived) (%)
E: MOSL Estimates
October 2013
(INR Million)
FY13
FY14E
1Q
14,200
20.0
2,900
8.6
20.4
770
780
210
1,560
310
19.9
1,250
1,250
12.5
2Q
13,440
8.3
3,110
19.6
23.1
760
890
240
1,700
340
20.0
1,360
1,360
19.3
FY13
3Q
10,400
0.8
2,660
24.9
25.6
770
860
240
1,270
260
20.5
1,010
1,010
36.5
4Q
15,130
9.7
4,570
5.8
30.2
760
850
240
3,200
640
20.0
2,560
2,560
2.0
1Q
14,360
1.1
3,210
10.7
22.4
840
900
190
1,660
350
21.1
1,310
1,310
4.8
2QE
14,675
9.2
3,265
5.0
22.3
810
870
200
1,785
374
21.0
1,411
1,411
3.8
FY14
3QE
13,063
25.6
3,040
14.3
23.3
830
890
200
1,520
319
21.0
1,201
1,201
18.9
4QE
17,264
14.1
5,025
10.0
29.1
888
884
235
3,487
729
20.9
2,758
2,758
7.7
52,420
14.1
13,240
14.4
25.3
3,060
3,380
930
7,730
1,550
20.1
6,180
6,180
12.4
58,487
11.6
14,540
9.8
24.9
3,368
3,544
825
8,452
1,772
21.0
6,680
6,680
8.1
2,430
3,388
4.2
90.6
2,426
3,173
4.2
90.4
2,067
2,383
4.4
77.0
1,792
2,414
6.3
66.8
2,404
3,342
4.3
89.6
2,400
3,293
4.5
89.5
2,104
2,634
5.0
78.4
1,962
3,136
5.5
73.1
8,715
11,357
4.6
81.2
8,870
12,405
4.7
82.7
C191
Coal India
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
COAL IN
6,316.4
1,939 / 31
374 / 238
8 / -5 / -20
CMP: INR307

Y/E March
2012 2013 2014E 2015E
Sales
624.2 683.0 727.5
773.4
EBITDA
156.7 180.8 206.2
217.0
NP*
161.6 176.6 186.9
198.4
EPS (INR)*
25.6 28.0 29.6
31.4
EPS Gr. (%)
47.8
9.3
5.8
6.2
BV/Sh. (INR)
64.0 76.7 88.6
101.1
RoE (%)**
31.9 28.4 25.7
24.0
RoCE (%)
57.5 56.9 54.4
49.9
Payout (%)
50.1 50.1 50.1
50.1
Valuations
P/E (x)
12.0 11.0 10.4
9.8
P/BV (x)
4.8
4.0
3.5
3.0
EV/EBITDA (x)
8.7
7.3
6.3
5.9
Div. Yield (%)
3.3
4.6
4.8
5.1
*Adj. EPS, **RoE is adj.for OB reserves
accounts, as appplicable under IFRS
Neutral
We expect COAL to report PAT of INR33b (up 7.4% YoY). For 2QFY14E,
we expect dispatches to be ~108mt (up 7% YoY). We estimate CIL's
production in 2QFY14E at 95mt, up 6% YoY.
RB Index has declined QoQ to USD73/ton, v/s USD81/ton in 1Q. For
2QFY14E, currency has depreciated on a sequential basis from 57/USD
to 62.5/USD. Hence, the lower coal prices were up to a large extent
neutralized by the higher currency rates. Rupee deprecation thus acts
as a cushion to e-auction realizations.
The ACQ realization is expected to be higher in 2QFY14E YoY, as COAL
had taken a tariff hike effective from mid-May to compensate for the
decline in e-auction realizations and beneficiated coal.
Workers union has postponed its three-day strike to December 2013
led by assurance by the management to facilitate further discussion
with the Government on OFS.
We expect the company to report consolidated PAT of INR187b in FY14E
(up 5.8% YoY) and INR198b in FY15E (up 6.2% YoY).

Volume, realization trend for 2Q and guidance for FY14/15. E-auction
and ACQ mix guidance for FY14/15.
Clarity on OFS/buyback and special dividend.
(INR Million)
Y/E March
FY13
1Q
165,006
13.8
48,146
-0.1
29.2
5,356
126
20,714
-103
63,275
18,582
29.4
44,693
44,796
8.4
Sales
Change (%)
EBITDA
Change (%)
As of % Sales
Depreciation
Interest
Other Income
EO Income/(Expense)
PBT
Tax
Reported PAT
Adjusted PAT*
Change (%)
Key Operational metrics
Production
102.5
Sales/Offtake
113.0
Blended Realization (INR/ton)
- Regulated
1,267
- E-auction
2,562
- Washed Coal
2,315
- Own Consumption
3,023
E: MOSL Estimates; *Pre Exceptional
October 2013
FY13
FY14E
2Q
145,725
10.8
28,617
15.5
19.6
3,872
102
20,929
-107
45,464
14,703
32.3
30,761
30,781
37.8
3Q
173,250
12.9
42,883
-5.6
24.8
4,204
96
23,605
-2,849
59,338
18,387
31.0
40,951
46,801
26.8
4Q
199,046
2.5
61,191
61.6
30.7
4,698
127
22,065
0
78,431
24,508
31.2
53,923
54,139
-10.5
1Q
164,724
-0.2
39,579
-17.8
24.0
4,757
74
22,196
-50
56,894
19,585
34.4
37,310
37,360
-16.6
2QE
156,744
7.6
32,285
12.8
20.6
4,850
150
21,750
0
49,035
15,985
32.6
33,050
33,050
7.4
FY14
3QE
185,696
7.2
53,681
25.2
28.9
4,750
180
24,000
0
72,751
23,717
32.6
49,034
49,034
4.8
4QE
220,292
10.7
80,675
31.8
36.6
4,957
203
23,137
0
98,652
31,224
31.7
67,428
67,428
24.5
683,027
9.4
180,836
15.6
26.5
18,130
452
87,467
69
249,790
76,227
30.5
173,564
176,624
9.9
727,455
6.5
206,220
14.0
28.3
19,313
608
91,083
-50
277,332
90,511
32.6
186,821
186,871
5.8
89.1
101.7
117.4
120.5
143.3
130.0
102.9
115.3
95.0
108.0
125.0
130.0
158.8
138.4
452.2
465.2
481.7
491.7
1,281
2,460
2,092
2,626
1,232
2,941
2,491
2,703
1,403
2,308
2,264
2,759
1,296
2,140
2,117
2,810
1,325
2,250
2,200
2,850
1,300
2,250
2,200
2,850
1,491
2,218
2,213
2,927
1,298
2,544
2,300
2,781
1,358
2,212
2,186
2,848
C192

Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
JPVL IN
2,938.0
47 / 1
47 / 9
26 / -43 / -60
CMP: INR16
In 2QFY14E, we expect JPVL to post revenue of INR10.1b, up 11.9% YoY,

EBITDA of INR8.6b, up 5.9% YoY and net profit of INR3.3b (down 9.2%
YoY).
We estimate generation from Karcham Wangtoo at 2.3bu, compared

to 2.1bu in 1QFY14. We estimate generation of Bina to remain muted
during the quarter at 274mu led by lower demand from MPSEB.
Vishnuprayag was not operational during the quarter.
Nigrie (1.3gw) is expected to be commissioned during FY14 and Bara I

(2gw) in FY15, providing delta in FY14/15 earnings.
Amelia north mine is also expected to commission in 3QFY14.
We expect JPVL to post consolidated net profit of INR4.2b in FY14E (up

11% YoY) and INR6.7b in FY15E (up 60% YoY). The stock trades at a
reported PER of 7x FY15E.

Y/E March
Sales
EBITDA
NP
EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2012
16.2
14.6
4.0
1.4
129.4
18.6
7.5
6.1
11.7
0.9
14.6
-
2013 2014E
24.6 33.6
19.3 25.5
3.8
4.2
1.3
1.4
(6.1) 11.2
22.0 23.0
6.3
6.3
5.9
6.3
12.5
0.7
13.9
-
11.2
0.7
12.6
-
2015E
72.8
46.9
6.7
2.3
60.0
22.2
10.1
9.9
7.0
0.7
6.8
-
Buy

Clarity on offloading hydro assets.
Coal availability for Bina TPS (500mw).
Update on the clearance of Dongri Tal II coal mine.
Update on commissioning of Nigre (1.3gw) and Bara I (2gw).
(INR Million)
Y/E March
1Q
Sales
5,454
Change (%)
98.1
EBITDA
4,900
Change (%)
98.6
As of % Sales
89.9
Depreciation
674
Interest
2,278
Other Income
91
PBT
2,039
Tax
210
10.3
Reported PAT
1,830
Adjusted PAT (Pre Exceptional)
1,830
Change (%)
162.9
Operational Details - Generation (MU)
Baspa
343
Vishnuprayag
574
Karcham Wangtoo
1,191
Bina
0
E: MOSL Estimates
October 2013
FY13
FY14E
2Q
9,058
39.4
8,115
33.4
89.6
774
2,885
73
4,528
868
19.2
3,660
3,660
30.4
FY13
3Q
4,270
7.6
2,679
-25.0
62.7
960
2,874
113
-1,043
-67
6.4
-976
-976
-263.9
4Q
3,744
27.5
1,637
-32.9
43.7
831
2,946
105
-2,034
-811
39.9
-1,223
-973
1,338.8
1Q
7,863
44.2
5,882
20.0
74.8
1,082
3,506
48
1,343
414
30.8
929
1,179
-35.6
2QE
10,134
11.9
8,591
5.9
84.8
1,135
3,500
200
4,156
831
20.0
3,325
3,325
-9.2
FY14
3QE
6,235
46.0
3,871
44.5
62.1
1,350
3,650
200
-929
100
-10.8
-1,029
-829
-15.0
4QE
7,951
112.3
5,923
261.8
74.5
1,543
3,980
245
645
295
45.7
350
350
-136.0
22,526
39.4
17,331
19.0
76.9
3,239
10,983
382
3,491
200
5.7
3,292
3,542
-11.7
32,183
42.9
24,267
40.0
75.4
5,110
14,636
693
5,214
1,640
31.4
3,574
3,824
8.0
660
937
2,154
11
151
261
467
171
104
116
242
238
426
438
1,528
301
674
0
2,349
274
158
0
475
821
161
0
115
925
1,258
1,888
4,054
421
915
1,314
2,863
421
C193
JSW Energy
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
JSW IN
1,640.1
75 / 1
75 / 34
11 / -21 / -30

Y/E March
Sales
EBITDA
NP
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. yield (%)
2012 2013 2014E

61.2 89.3 98.7
14.5 27.9 35.2
3.3 10.6 12.6
2.0
6.5
7.7
-60.6 219.7 19.1
34.8 37.8 42.5
5.8 17.8 19.2
6.4 14.4 15.9
24.7 31.0 21.3
21.3
1.2
10.7
1.2
6.7
1.1
5.5
4.7
2015E
103.3
32.2
11.4
6.9
-9.7
47.5
15.5
14.5
25.0
5.6
1.0
4.8
3.8
6.2
0.9
4.6
4.0
CMP: INR46
Neutral
We expect JSWEL to report consolidated revenue of INR22b (up 5.8%

YoY) and PAT of INR2.5b, up 55% YoY on a lower base.
We expect JSWEL to generate 4.8bu during 2QFY14, including coal and
lignite capacity. The decline in generation is led by a decline in
Vijayanagar to 85% from 100% YoY; Ratnagiri PLF declined to 78% from
90% YoY and lignite PLFs also declined substantially. Lower generation
could have been led by better hydro generation this year.
We have assumed short term realization of INR4.6/unit, almost flat
YoY. We expect fuel cost to be ~INR2.6/unit (coal-based) as coal mix of
South African and Indonesian coal changes during the quarter.
We expect JSWEL to report consolidated PAT of INR12.6b in FY14E (up
19% YoY) and INR11.4b in FY15E (down 9.7% YoY). Stock trades at
reported P/E of 6.2x FY15E.
ST realization, fuel mix and fuel cost for 2QFY14 and guidance for
FY14/15.
RajWest project: lignite mine clearance and tariff approval.
Capacity addition plan for the 12th Plan as none of the projects are
under construction.
(INR Million)
Y/E March
Total Operating Income
Change (%)
EBITDA
Change (%)
Depreciation
Interest
Other Income
Extraordinary items
PBT
Tax
Reported PAT
Share of profit from Assoc
Minority interest
Exceptional Income/ (Expense)
Reported PAT (Post MI)
Adjusted PAT
Change (%)
Operational Details
Sales Mix (MUs)
- Long Term
- Merchant
Realization (INR/unit)
- PPA
- Merchant
E: MOSL Estimates
October 2013
FY13
FY14
FY13
FY14E
1Q
21,915
72.2
5,834
48.4
1,697
2,426
764
2,325
150
160
106.4
-10
0
-44
1,915
34
1,949
43.0
2Q
20,765
108.4
5,769
388.2
1,605
2,281
453
-925
3,261
721
22.1
2,540
0
-1
-925
2,541
1,615
n.a.
3Q
23,652
33.7
8,370
139.5
1,572
2,364
300
610
4,125
1,005
24.4
3,120
0
15
610
3,105
3,715
n.a.
4Q
23,010
10.6
7,959
35.6
1,741
2,557
617
-43
4,322
848
19.6
3,474
-117
0
-43
3,357
3,314
96.9
1Q
24,310
10.9
9,226
58.1
2,008
2,747
453
1,872
3,052
870
28.5
2,182
-46
-5
1,872
2,233
4,105
110.6
2QE
21,963
5.8
8,028
39.2
2,250
2,950
425
0
3,253
813
25.0
2,440
-55
-15
0
2,510
2,510
55.4
3QE
25,315
7.0
9,419
12.5
2,350
3,100
450
0
4,419
1,149
26.0
3,270
-55
-25
0
3,350
3,350
-9.8
4QE
26,672
15.9
8,553
7.5
2,432
3,333
473
0
3,261
690
21.2
2,571
-44
-37
0
2,652
2,652
-20.0
89,343
46.0
27,932
92.9
6,615
9,628
2,134
1,966
11,857
2,733
23.1
9,124
-117
-29
1,556
9,037
10,592
219.8
98,669
10.4
35,227
26.1
9,040
12,130
1,801
1,872
13,986
3,522
25.2
10,464
-200
-82
1,872
10,746
12,617
19.1
2,233
2,498
2,036
2,205
2,264
2,616
2,271
2,570
2,704
2,275
2,327
2,109
2,796
2,369
2,977
2,634
8,808
9,885
10,805
9,387
3.64
4.40
3.65
4.60
3.30
4.60
2.99
4.60
3.58
4.52
3.56
4.60
3.62
4.65
3.63
4.63
3.26
4.55
3.61
4.60
C194
NHPC
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
NHPC IN
12,300.7
244 / 4
29 / 15
11 / -5 / -2
CMP: INR20
We expect NHPC to report 2QFY14E revenue of INR18.3b (up 3.3% YoY)

and PAT of INR8.5b (up 16.3% YoY). We expect it to generate 7.3bu,
compared to 7.6bu in 2QFY13 - a decline in generation is due to lower
generation from plants impacted in the recent floods (mainly
Dhauliganga 280mw).
2015E
69.9
45.6
27.7
2.0
6.2
26.7
7.5
8.1
42.4
For FY14, NHPC is targeting to add 937mw of projects, while it has

commissioned TLDP III (132mw) during 1QFY14 and 2 units of URI II
(120mw) in 2QFY14.
In addition, Nimo Bazgo (45mw), 2 units of Uri-II (120mw) and Parbati

III are also expected to be commissioned in FY14E.
NHPC has guided for addition of only 164mw TLDP IV during FY15/16.
However, given substantial delays in FY13 capacity addition and current
expectation of ~937mw addition in FY14, we expect slippages in
commissioning in FY14 to be passed on to FY15.
10.1
0.7
7.8
4.2
We expect NHPC to report consolidated PAT of INR26b in FY14E (up

5.9% YoY) and INR27.7b in FY15E (up 6.5% YoY). Stock trades at reported
P/E of 7.6x FY15E.

Y/E March
Sales
EBITDA
NP
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (X)
P/BV (X)
EV/EBITDA (X)
Div. Yield (%)
2012
69.2
48.1
25.2
1.8
12.2
23.3
8.0
10.1
29.4
2013 2014E
64.0 63.7
42.8 41.1
24.5 26.0
1.8
1.9
-1.5
5.2
24.7 25.7
7.4
7.4
8.7
7.8
29.8 42.5
11.1
0.9
7.5
3.5
11.3
0.8
8.2
3.0
10.7
0.8
9.1
3.9
Neutral

Incentives for 2QFY14 and progress on projects impacted by floods.
Total capacity addition for FY14/15.
Status on Parbati II and Subhanshri lower project.
(INR Million)
Y/E March
Sales
Change (%)
EBITDA
Change (%)
As of % Sales
Depreciation
Interest
Other Income
EO Income/(Expense)
PBT
Tax
Reported PAT
Adjusted PAT
Change (%)
Operational Details
Generation (MUs)
Increase/ (Decrease) (%)
Installed Capacity (MW)
- Owned
- JV's
E: MOSL Estimates
October 2013
FY13
FY14
FY13
FY14E
1Q
14,218
-3.3
9,040
-5.5
63.6
2,218
798
2,451
0
8,475
1,777
21.0
6,698
6,450
6.6
2Q
17,725
-4.6
12,036
-9.4
67.9
2,532
1,047
2,406
0
10,863
3,028
27.9
7,834
7,272
-6.4
3Q
10,104
14.6
6,132
61.9
60.7
2,390
989
1,890
0
4,644
1,526
32.9
3,118
2,416
-18.8
4Q
10,994
-23.8
6,050
-39.1
55.0
2,546
1,020
3,156
2,400
8,041
2,208
27.5
5,833
2,863
35.7
1Q
16,194
13.9
10,707
18.4
66.1
2,760
1,160
2,486
0
9,272
2,073
22.4
7,199
7,160
11.0
2QE
18,312
3.3
12,512
4.0
68.3
2,650
1,100
2,900
0
11,662
3,207
27.5
8,455
8,455
16.3
3QE
10,205
1.0
5,505
-10.2
53.9
2,625
1,200
2,500
0
4,180
1,149
27.5
3,030
3,030
25.4
4QE
11,174
1.6
6,104
0.9
54.6
2,470
1,261
1,845
0
4,218
1,520
36.1
2,697
2,281
-20.3
53,066
-6.2
33,240
-9.1
62.6
9,693
3,854
9,928
2,400
32,021
8,539
26.7
23,482
19,000
0.6
55,884
5.3
34,827
4.8
62.3
10,505
4,721
9,730
0
29,331
7,950
27.1
21,381
20,926
10.1
6,148
-2.2
5,287
3,767
1,520
7,634
10.0
5,518
3,998
1,520
2,563
-17.8
5,551
4,031
1,520
2,496
4.6
5,562
4,042
1,520
6,388
3.9
5,694
4,174
1,520
7,317
-4.2
5,694
4,294
1,520
2,560
-0.1
5,934
4,414
1,520
2,457
-1.6
6,499
4,979
1,520
22,825
22.2
5,562
4,042
1,520
22,716
-0.5
6,499
4,979
1,520
C195
NTPC
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
NTPC IN
8,245.5
1,219 / 20
174 / 123
9 / -1 / -16
CMP: INR148

Y/E March
Sales
EBITDA
NP
Adj EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2012 2013 2014E

615.9 647.0 674.0
140.4 171.1 163.6
79.7 91.9 97.9
9.7 11.1 11.9
0.2 15.3
6.5
88.9 97.5 104.5
11.3 12.0 11.8
12.0 14.3 10.9
41.5 43.4 42.2
2015E
801.4
191.2
114.1
13.8
16.6
112.6
12.7
11.6
41.2
15.3
1.7
10.5
2.7
13.3
1.5
9.1
3.9
12.5
1.4
9.7
3.0
10.7
1.3
8.6
3.3
Buy
We expect NTPC to report PAT of INR22.2b (up 17.5% YoY). The growth
in profits is mainly led by the addition of new capacities.
We expect company's generation to be flat YoY, mainly led by lower
generation from the gas-based capacity at ~2.7bu, compared to 5bu in
2QFY13, down 46% YoY. We estimate coal-based generation to grow
by 5%, leading to flattish generation growth during the quarter.
For FY14, the capacity addition target stands at 1.8gw. However, in
1HFY14, the capacity addition has been nil. NTPC commercialized
Vallur unit II (500mw in Aug 2013. The total commercialization target
for FY14 is 1.5gw, of which 1gw has already been commercialized.
Government has cleared the dues of Loharinag-pala hydro power
project and paid INR5.4b to NTPC for the settlement of claim. Earlier,
Lohariang-pala project was cancelled after initial investments made
by NTPC.
We expect NTPC to report PAT of INR97.9b in FY14E (up 6.5% YoY) and
INR114b in FY15E (up 16.6% YoY). Maintain Buy.

Plant availability factor (PAF) for coal-based projects and generation
loss.
Guidance on capacity addition/commercialization for FY14E/15E.
Development on captive coal block development and jetty connecting
to Farakka and Kahalgaon projects.
(INR Million)
Y/E March
FY13
1Q
159,600
12.6
36,306
26.7
22.7
7,602
4,994
8,849
2Q
161,197
4.8
42,243
30.4
26.2
7,865
3,035
10,482
3Q
157,749
2.9
39,952
39.9
25.3
8,288
5,304
7,546
FY14
4Q
164,618
1.2
39,065
-5.0
23.7
10,213
5,912
17,714
16,841
57,495
13,679
23.8
43,816
22,054
-3.9
1Q
156,129
-2.2
42,653
17.5
27.3
9,423
6,174
7,459
0
34,514
9,244
26.8
25,270
23,263
-3.4
2QE
144,566
-10.3
36,803
-12.9
25.5
10,500
6,000
8,300
0
28,603
6,436
22.5
22,167
22,167
17.5
Sales
Change (%)
EBITDA
Change (%)
As of % Sales
Depreciation
Interest
Other Income
EO Inc./(Exp.)
PBT
32,559
41,825
33,907
Tax
7,573
10,402
7,940
23.3
24.9
23.4
Reported PAT
24,987
31,424
25,968
Adjusted PAT
24,093
18,869
22,069
Change (%)
26.7
27.5
6.7
Capacity
- NTPC
34,810
34,810
34,810
35,810
35,810
35,810
- JVs
4,364
4,364
4,864
5,364
5,364
5,364
Total
39,174
39,174
39,674
41,174
41,174
41,174
Addition
2,160
500
1,500
E: MOSL Estimates; Adj profit based on the calculations provided by the management
October 2013
FY13
FY14E
3QE
167,218
6.0
41,971
5.1
25.1
10,500
6,100
8,350
0
33,721
7,587
22.5
26,134
26,134
18.4
4QE
206,058
25.2
40,763
4.3
19.8
11,391
6,233
9,333
0
32,472
6,155
19.0
26,317
26,317
19.3
643,164
5.2
157,565
19.9
24.5
33,968
19,244
44,591
16,841
165,786
39,592
23.9
126,194
91,885
15.3
673,971
4.8
162,190
2.9
24.1
41,815
24,507
33,442
0
129,310
29,422
22.8
99,888
97,881
6.5
36,310
5,864
42,174
1,000
36,970
6,059
43,029
855
35,810
5,364
41,174
4,160
36,970
6,059
43,029
1,855
C196
Power Grid Corporation

Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
PWGR IN
5,324.2
527 / 8
122 / 87
-6 / -11 / -21

Y/E March
Sales
EBITDA
NP
EPS (INR)
EPS Gr. (%)
BV/Sh. (INR )
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2012 2013 2014E

101.6 127.6 154.5
85.1 109.4 134.5
33.2 41.4 46.4
7.2
8.9
8.9
30.6 24.6
-0.8
50.7 56.7 66.3
14.8 16.6 15.2
9.2
9.3
9.1
34.8 35.0 34.9
13.8
1.9
11.1
2.1
11.1
1.7
10.0
2.8
11.2
1.5
9.4
2.7
2015E
184.4
161.3
56.0
10.7
20.9
73.3
15.4
9.3
35.0
9.2
1.4
8.6
3.2
CMP: INR99
Buy
We expect PWGR to report 2QFY14E PAT of INR11.4b (up 12.5% YoY).

The growth in profit is mainly led by capitalization. In 2QFY14E, we
expect the company to capitalize INR30b, higher than INR26.6b in
1QFY14. We expect capex of INR45b in 2QFY14E.
PWGR has revised its capex target to INR1.1t from INR1t in the 12th
Plan. For FY14E, we assume a capex of INR222b and capitalization at
INR185b.
We estimate consultancy revenue at INR1,200m and telecom revenue

at INR700m. We expect contribution of ~INR700m to PBT from
consultancy and telecom.
Company has approved projects worth INR18b in 1HFY14 and has

awarded projects worth INR48.4b till August 2013. In FY13, PWGR had
approved projects worth INR126b and had awarded projects worth
INR161b.
We expect the company to report PAT of INR46.4b in FY14E (up 22.1%

YoY) and INR56b in FY15E (up 20.9% YoY). Stock trades at 9.4x FY15E EPS
and 1.4x FY15E book value.

Timelines for OFS + FPO.
Capitalization/capex for 2QFY14 and guidance for FY14/15.
Development in green energy projects.
Development in state JVs.
(INR Million)
Y/E March
Sales
Change (%)
EBITDA
Change (%)
As of % Sales
Depreciation
Interest
Other Income
Extraordinary Inc / (Exp)
PBT
Tax
Reported PAT
Adjusted PAT (Pre Exceptional)
Change (%)
Operational Details
Capitalization
Regulated Equity
E: MOSL Estimates
October 2013
FY13
FY14E
1Q
28,883
31.1
24,646
33.6
85.3
7,565
6,461
920
0
11,540
2,836
24.6
8,705
9,065
29.1
2Q
30,858
36.3
26,693
40.6
86.5
8,252
5,295
1,570
-140
14,856
3,597
24.2
11,259
10,071
32.5
FY13
3Q
33,617
36.3
29,231
39.0
87.0
8,653
6,848
1,286
6
15,009
3,717
24.8
11,291
11,072
43.0
4Q
33,738
8.8
28,311
8.7
83.9
9,049
6,747
2,417
-117
15,049
3,954
26.3
11,094
10,926
0.9
1Q
36,665
26.9
31,657
28.4
86.3
9,644
7,599
803
60
15,277
3,747
24.5
11,531
11,470
26.5
2QE
37,413
21.2
32,479
21.7
86.8
9,843
7,782
1,100
0
15,954
4,627
29.0
11,327
11,327
12.5
FY14
3QE
38,284
13.9
33,315
14.0
87.0
10,108
7,946
1,300
0
16,562
5,051
30.5
11,511
11,511
4.0
4QE
42,140
24.9
37,016
30.7
87.8
12,635
8,297
1,423
0
17,508
5,392
30.8
12,116
12,055
10.3
127,095
26.6
108,880
29.9
85.7
33,519
25,352
6,193
-247
56,449
14,104
25.0
42,345
41,359
24.6
154,502
21.6
134,466
23.5
87.0
42,230
31,623
4,626
0
65,240
18,817
28.8
46,424
46,363
12.1
41,000
190,112
26,600
198,092
25,860
205,850
78,540
215,000
29,500
223,850
30,000
232,850
40,000
244,850
85,500
270,500
172,000
215,000
185,000
270,500
C197
PTC India
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
PTCIN IN
296.0
14 / 0.2
81 / 35
0 / -28 / -39
CMP: INR46
We expect PTCIN to report 2QFY14E revenue of INR31b (up 11.5% YoY)

and PAT of INR242m (down 45.7% YoY). Decline in PAT is due to
conversion of tolling arrangement into trading.
In 2QFY14E, we expect PTC's volume at ~9.7bu (up 2.4% YoY). We expect

adjusted trading margin ~paisa3.25/kwh.
On Simhapuri/Meenaxi tolling business, we expect PTCIN to do sales

volume of 445mu and PBT spread of INR0.18/unit, compared to INR1.08/
unit in 2QFY14E due to change in the arrangement.
The conversion of tolling arrangement into trading business led to

de-growth in profits YoY. However, it reduces the risk on PTCIN's
balance sheet, which is positive in the long run.
We expect the company to report consolidated PAT of INR2b in FY14E

(up 2.1% YoY) and INR2b in FY15E (down 0.4% YoY). Stock trades at

Y/E March
Sales
EBITDA
NP
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. yield (%)
2012
76.5
1.5
2.0
6.9
22.9
76.3
5.4
8.6
45.0
6.6
0.6
9.0
4.0
2013 2014E
88.6 104.5
1.7
1.2
2.0
2.0
6.7
6.8
-3.2
2.1
78.6 79.5
5.6
3.6
3.8
3.7
45.0 65.7
6.8
0.6
5.9
4.3
6.7
0.6
7.1
4.1
2015E
122.6
1.1
2.0
6.8
-0.4
81.4
4.2
4.7
45.0
6.7
0.6
6.5
3.3
Buy

Trading volumes and margins for 2QFY14 and guidance for FY14/15.
Simhapuri and Meenakshi business volumes and PBT contribution.
Receipt of outstanding dues from Tamil Nadu and Uttar Pradesh
Discoms.
Guidance on commissioning of projects.

Y/E March
(INR Million)
FY13
FY14
FY13
1Q
2Q
3Q
4Q
1Q
2QE
3QE
4QE
Sales
19,869
27,928
18,778
21,987
27,704
31,146
22,000
23,683
88,569
Change (%)
-20.1
16.9
41.2
52.3
39.4
11.5
17.2
7.7
EBITDA
313
569
300
512
340
300
270
310
1,700
Change (%)
-34.4
28.3
42.9
58.7
8.6
-47.3
-9.9
-39.5
17.0
As of % Sales
1.6
2.0
1.6
2.3
1.2
1.0
1.2
1.3
1.9
Depreciation
10
10
11
11
11
11
11
13
42
Interest
1
4
4
0
4
3
2
1
9
Other Income
26
63
12
23
81
60
70
50
119
Extraordinary Income/(Expense)
-23
0
0
7
3
0
0
0
-17
PBT
304
619
297
530
410
346
327
345
1,785
Tax
98
173
79
147
114
104
98
42
497
32.3
28.0
26.7
27.7
27.8
30.0
30.0
12.3
27.9
Reported PAT
206
446
218
371
296
242
229
303
1,287
Adjusted PAT
229
446
218
377
293
242
229
303
1,270
Change (%)
-49.4
25.4
129.2
26.2
27.8
-45.7
5.0
-19.8
Operational Details
Power Traded (MUs)
6,566
9,428
5,871
6,732
8,075
9,655
6,053
7,198
28,597
Growth (% YoY)
-2.4
8.9
28.6
53.7
23.0
2.4
3.1
6.9
17.6
Adj Margins (Ps/Unit)
3.98
3.06
3.74
3.71
3.48
3.25
4.25
4.49
3.31
E: MOSL Estimates; % Change for FY13E not comparable given inclusion of tolling profits from 1QFY13 onwards
October 2013
FY14E
104,533
1,219
-28.3
1.2
46
10
261
-3
1,428
358
25.1
1,070
1,066
30,981
8.3
3.79
C198
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
RELI IN
263.0
103 / 2
572 / 308
9 / 16 / -34
CMP: INR393
We expect RELI to report 2QFY14E revenue of INR35b, flat YoY, and PAT
of INR3.1b (down 24% YoY). During the quarter, we expect RELI to post
EPC revenue of INR17.8b (v/s INR19.3b YoY).
In the cement business, total capacity under development is 5mt pa

both in Madhya Pradesh and Maharashtra. The grinding unit at Butibori
is commissioned.
Metro 1 project's, in Mumbai, civil work is 100% completed.

Commissioning is expected in 2HFY14. Company has sought a threefold hike in the Mumbai Metro's tariff, led by escalation cost of ~INR20b
in the project.
In the Delhi metro, total investment is INR28b, including equity of

INR7b. RELI is confident of receiving the complete equity.
EPC revenue in FY14E/15E may get impacted due to prolonged delay

in large capacity projects of Chittrangi, Krishnapattnam and Tilaiya.
We expect RELI to report standalone PAT of INR13.3b in FY14E (down

22.5% YoY) and INR14.6b in FY15E (up 9.9% YoY). Stock trades at

Y/E March
Sales
EBITDA
NP
Adj. EPS(INR)
EPS Gr. (%)
BV/Sh. (INR)
ROE (%)
ROCE (%)
Payout (%)
Valuations
P/E (X)
P/BV (X)
EV/EBITDA (X)
Div. yield (%)
2012 2013 2014E

178.5 143.2 142.4
25.7 19.2 18.1
20.0 17.2 13.3
76.0 65.2 50.5
88.2 -14.3 -22.5
686
769
793
11.4 10.4
6.5
13.3 10.5
8.0
8.9 11.2 14.9
5.2
0.6
0.5
1.5
6.0
0.5
0.6
1.7
7.8
0.5
-1.4
1.7
2015E
149.8
18.8
14.6
55.5
9.9
840
6.8
8.2
15.2
7.1
0.5
-1.3
1.9
Buy

Performance of EPC division and order book position.
Performance of infrastructure business and development in projects
under construction.
Contribution from cement business.
(INR Million)
Y/E March
FY13
1Q
34,473
-5.8
4,598
-33.9
13.3
1,130
1,902
2,586
2Q
35,002
-11.4
4,535
-36.1
13.0
922
1,980
3,457
3Q
34,552
-22.8
4,898
-24.9
14.2
980
2,055
2,433
4,183
8,480
1,887
22.2
6,594
3,749
-7.6
Sales
Change (%)
EBITDA
Change (%)
As of % Sales
Depreciation
Interest
Other Income
Exceptional item
PBT
4,152
5,090
Tax (incl contingencies)
882
949
21.2
18.6
Reported PAT
3,270
4,141
PAT (Pre Exceptionals)
3,270
4,141
Change (%)
13.8
-15.5
Operational Details - EPC Division
Revenues
17,749
19,184
19,260
EBITDA
3,031
2,836
3,050
Margin (%)
17.1
14.8
15.8
E: MOSL Estimates; Quarterly nos. are on standalone basis
October 2013
FY14
FY13
FY14E
4Q
39,193
-31.6
5,126
-17.0
13.1
888
1,902
1,374
0
3,710
-2,280
-61.5
5,990
5,990
-7.5
1Q
32,789
-4.9
4,401
-4.3
13.4
828
2,172
3,141
0
4,542
800
17.6
3,742
3,742
14.4
2QE
35,018
0.0
4,425
-2.4
12.6
1,000
2,100
2,500
0
3,825
689
18.0
3,137
3,137
-24.3
3QE
34,521
-0.1
4,367
-10.8
12.7
1,000
2,100
2,500
0
3,767
678
18.0
3,089
3,089
-17.6
4QE
40,033
2.1
4,869
-5.0
12.2
1,154
2,125
2,484
0
4,073
751
18.4
3,323
3,323
-44.5
143,220
-19.6
19,158
-28.4
13.4
3,921
8,794
10,806
4,183
21,432
1,437
6.7
19,995
17,150
-12.6
142,362
-0.6
18,062
-5.7
12.7
3,982
8,496
10,625
0
16,208
2,918
18.0
13,291
13,291
-22.5
23,049
3,533
15.3
16,537
2,312
14.0
17,803
1,780
10.0
17,874
1,877
10.5
21,326
1,776
8.3
79,243
16,114
20.3
73,540
7,746
10.5
C199
Tata Power
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
TPWR IN
2,373.3
194 / 3
113 / 68
0 / -20 / -28
CMP: INR82

Y/E March
Sales
EBITDA
NP
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. yield (%)
2012 2013 2014E

85.0 95.7 105.3
17.8 20.2 24.3
17.6
9.2
7.2
7.4
3.9
3.0
0.6 (47.7) (21.6)
47.3 49.1 51.8
9.8
8.1
8.0
6.2
7.5
8.2
39.9 27.6 33.2
11.0
1.7
14.6
1.5
21.0
1.7
14.1
1.6
26.8
1.6
10.4
1.6
2015E
114.9
24.9
8.2
3.4
13.0
54.9
8.2
8.6
32.3
23.7
1.5
9.7
1.6
Neutral
We expect TPWR to report standalone PAT of INR2b (down 32.3% YoY)

and consolidated PAT of INR1.4b (down 33.6% YoY).
Generation from its 2,021mw (Mumbai region) capacity in July-Aug
2013 stood at 1.8bu, down 22% YoY. Mundra UMPP generation for the
period stood at 3.6bu and PLF stood at 59.5%. Maithon generation
stood at 691mu at a PLF of 44.2%.
TPWR has filed a petition with CERC seeking a tariff hike of ~paise67/
unit for its Mundra project. The hearing of the same has been
completed and CERC has ordered to form a committee involving all
the stakeholders. The committee has submitted its report to CERC;
however, CERC has asked states to sign it with the approval from
respective state cabinet, which may further delay the process.
Global coal prices have declined sequentially to ~USD73 and currency
has depreciated to INR62.5/USD in 2QFY14, compared to INR57/USD in
1QFY14 thus nullifying the impact of coal price correction. Hence,
contribution from KPC/Arutmin mines may remain muted. Higher
translation gain would however accrue.
We expect TPWR to report consolidated PAT of INR7.2b in FY14E (down
21.6% YoY) and INR8.2b in FY15E (down 13% YoY).

Contribution/loss of Maithon/Mundra UMPP project.
Sales/realization for KPC/Arutmin mines and any downward revision
in volume growth/realization.
(INR Million)
Y/E March
Units Generated
Total Operating Income
Change (%)
EBITDA
Change (%)
As of % Sales
Depreciation
Interest
Other Income
PBT
Tax
Reported PAT
Adjusted PAT
Change (%)
Consolidated Adjusted PAT
Change (%)
E: MOSL Estimates
October 2013
FY13
1Q
4,259
22,841
18.9
3,759
-12.1
16.5
1,548
1,386
3,456
4,281
1,158
27.1
3,123
4,140
40.8
3,059
-26.4
2Q
4,272
25,198
29.3
5,279
26.0
21.0
1,556
1,643
1,963
4,043
1,083
26.8
2,960
2,969
-18.8
2,062
-53.4
3Q
3,873
25,491
13.2
5,685
19.7
22.3
1,281
1,788
318
2,934
770
26.2
2,164
1,285
-30.3
2,759
-50.0
FY14
4Q
3,366
22,143
-6.8
5,793
30.4
26.2
-744
1,965
1,204
5,776
3,776
65.4
2,000
885
-61.4
1,337
-62.0
1Q
3,897
26,075
14.2
7,420
97.4
28.5
1,360
2,363
1,799
5,496
1,926
35.0
3,570
3,527
-14.8
1,081
-64.7
2QE
4,387
27,868
10.6
5,620
6.5
20.2
1,400
2,300
1,100
3,020
1,012
33.5
2,008
2,008
-32.3
1,369
-33.6
3QE
3,977
26,309
3.2
5,700
0.3
21.7
1,450
2,325
1,200
3,125
1,062
34.0
2,062
2,062
60.5
1,914
-30.6
4QE
3,933
25,049
13.1
5,517
-4.8
22.0
1,457
2,338
1,162
2,884
937
32.5
1,947
1,947
119.9
2,894
116.4
FY13
FY14E
15,770
95,673
12.6
20,517
16.2
21.4
3,641
6,783
6,940
17,034
6,787
39.8
10,247
9,279
-13.6
9,217
-47.7
16,195
105,301
10.1
24,257
18.2
23.0
5,667
9,326
5,261
14,524
4,937
34.0
9,587
9,544
2.9
7,257
-21.3
C200
Bata India
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
BATA IN
64.3
55 / 1
989 / 688
-2 / 14 / -16
CMP: INR851
We expect 2QCY13 revenue to grow 13.5% YoY to INR4.8b, driven by

8% same store sales growth (SSSG) and new store openings. The
company had guided addition of 100 stores in CY13, of which it has
opened 37 in 1HCY13.
EBITDA margin is likely to increase 60bp YoY to 12.6%, primarily on

account of lower base last year and improvement in gross margin.
As a percentage of sales, we expect rent to increase from 13.2% in

3QCY12 to 13.6% in 3QCY13. We believe that rent will peak out at ~14%
as the company focuses on opening new stores on revenue sharing
model.
Driven by higher margins, we expect PAT growth to be 15.5% YoY.
We cut our EPS estimates by 2.5% for CY13 and 3% for CY14, primarily
on account of lower than expected sales due to slowdown.
The stock trades at 27.7x CY13E and 22.1x CY14E EPS. We value the
company at 26x CY14E EPS of INR38.5. Our target price is INR1,001.
Maintain Buy.

Y/E December
Sales
EBITDA
NP
EPS (INR)
EPS Gr. (%)
BV/Sh.(INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2012 2013E 2014E

18.4 20.9 24.3
2.7
3.1
3.8
1.7
2.0
2.5
26.8 30.7 38.5
-33.4 14.7 25.3
108.8 131.4 159.4
27.1 25.6 26.5
39.3 37.9 38.7
26.4 27.1
31.7
7.8
18.3
27.7
6.5
15.8
0.8
22.1
5.3
12.7
1.1
2015E
28.4
4.5
3.0
46.5
20.8
193.2
26.4
38.8
27.4
18.3
4.4
10.3
1.3
Buy

Gross margin expansion
New store openings
Rent as a percentage of sales
(INR Million)
Y/E December
Net Sales
YoY Change (%)
Total Expenditure
EBITDA
Margins (%)
Depreciation
Interest
Other Income
PBT
Tax
Rate (%)
Reported PAT
Adj PAT
YoY Change (%)
Margins (%)
E: MOSL Estimates
CY12
1Q
4,059
29.9
3,462
598
14.7
122
2
60
534
174
32.6
360
360
-67.1
8.9
2Q
5,038
16.5
4,206
831
16.5
124
2
67
773
247
31.9
527
527
28.4
10.5
3Q
4,237
13.8
3,727
510
12.0
127
2
97
478
158
33.0
320
320
5.3
7.6
CY13
4Q
5,090
18.0
4,286
805
15.8
140
5
76
734
226
30.7
509
509
13.0
10.0
1Q
4,538
11.8
3,910
628
13.8
131
2
69
564
180
32.0
384
384
6.6
8.5
2Q
5,725
13.6
4,764
961
16.8
141
2
78
895
276
30.8
619
619
17.6
10.8
3QE
4,809
13.5
4,205
604
12.6
144
2
91
549
179
32.6
370
370
15.5
7.7
4QE
5,803
14.0
4,869
934
16.1
157
2
113
889
289
32.5
600
600
17.9
10.3
CY12
CY13E
20,879
13.3
17,751
3,128
15.0
565
8
361
2,915
942
32.3
1,974
1,974
15.0
9.5
24,293
16.3
20,516
3,777
15.5
612
7
451
3,609
1,135
31.5
2,474
2,474
25.3
10.2

October 2013
C201
Castrol India
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
CSTRL IN
494.6
154 / 2
371 / 285
-11 / -6 / -6

Y/E December
Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh.(INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2011 2012 2013E

29.8 31.2 32.6
6.6
6.2
6.7
4.8
4.5
4.8
9.8
9.0
9.7
-2
-8
9
12.2 13.1 14.1
93.7 83.8 71.4
133.6 109.1 94.2
89.7 96.7 90.1
31.7
25.5
22.6
2.4
34.4
23.7
24.0
2.4
33.0
22.7
22.7
2.4
2014E
34.7
7.7
5.4
10.9
13
14.0
71.3
94.7
101.2
CMP: INR311
Neutral
We expect revenue to increase by 4.3% YoY to INR7.5b. We have

assumed a 2.3% volume growth on a YoY basis and realization growth
of 2%.
For CY13E, we have assumed 1% YoY volume increase and realization

growth of 8% YoY.
EBITDA margin is likely to increase 210bp YoY to 18.9%, primarily driven

by higher realizations.
We model net profit to increase by 18.7% YoY to INR1b.
CSTRL trades at a P/E of 33/29.2 CY13E/CY14E earnings estimates. Our

DCF-based target price for CSTRL is INR297/share. Though we remain
positive on the long term prospects of the company, given rich
valuations, we have a Neutral rating.
29.2
22.9
19.7
3.1
(INR Million)
Y/E December
Volumes (m litres)
Realizations (INR/ ltr)
Net Sales
YoY Change (%)
Net Raw Material
Employee Expenses
Other Operating Expenses
Total Expenditure
EBITDA
YoY Change (%)
Margins (%)
Depreciation
Interest
Other Income
PBT before EO Item
PBT
Tax
Rate* (%)
Reported PAT
Adj PAT
YoY Change (%)
Margins (%)
E: MOSL Estimates
CY12
1Q
52.6
149
7,817
4.1
4,590
265
1,394
6,249
1,568
-12.6
20.1
60
7
335
1,836
0
1,836
607
33.1
1,229
1,229
-10.0
15.72
2Q
56.7
150
8,513
7.8
4,974
339
1,506
6,819
1,694
-13.4
19.9
60
3
162
1,793
0
1,793
584
32.6
1,209
1,209
-15.2
14.20
3Q
46.1
156
7,213
7.4
4,334
310
1,354
5,998
1,215
-6.8
16.8
66
1
130
1,278
0
1,278
421
32.9
857
857
-9.9
11.88
CY13
4Q
48.5
156
7,580
-1.5
4,345
370
1,200
5,915
1,665
8.8
22.0
80
10
181
1,756
0
1,756
577
32.9
1,179
1,179
10.4
15.6
1Q
50.1
156
7,814
0.0
4,429
335
1,366
6,130
1,684
7.4
21.6
71
5
245
1,853
1,853
610
32.9
1,243
1,243
1.1
15.9
2Q
54.1
159
8,588
0.9
4,638
385
1,659
6,682
1,906
12.5
22.2
73
3
226
2,056
198
2,254
718
31.9
1,536
1,338
10.7
15.6
3QE
47.2
159
7,527
4.3
4,333
378
1,394
6,105
1,422
17.0
18.9
74
4
192
1,536
4QE
54.6
159
8,686
14.6
5,039
402
1,589
7,030
1,656
-0.5
19.1
76
6
233
1,807
1,536
519
33.8
1,017
1,017
18.7
13.51
1,807
604
33.4
1,203
1,203
2.0
13.85
CY12
CY13E
203.9
153.0
31,209
4.7
16,894
1,284
5,520
23,699
6,142
-6.7
19.7
266
21
808
6,663
0
6,663
2,189
32.9
4,474
4,474
-7.0
14.3
206.0
164.8
32,614
4.5
18,439
1,500
6,008
25,946
6,668
8.6
20.4
294
18
896
7,252
198
7,450
2,451
32.9
4,999
4,801
7.3
14.7
Harshad Borawake (HarshadBorawake@MotilalOswal.com)/Kunal Gupta(Kunal.Gupta@MotilalOswal.com)

October 2013
C202
September 2013 Results Preview | Sector: Diversified
Multi Commodity Exchange

Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
MCX IN
51.0
21 / 0
1,617 / 238
15 / -56 / -74

Y/E March
2012 2013 2014E
Sales
5.3
4.9
3.3
EBITDA
3.3
2.8
1.3
PAT
2.9
2.8
1.5
EPS (INR)
56.1 54.9 29.4
EPS Gr. (%)
65.6
-2.2 -46.4
BV/Sh. (INR)
195.5 226.8 237.7
RoE (%
31.0 26.0 12.7
RoCE (%)
24.8 24.8 12.2
Payout (%)
50.0 53.3 55.7
Valuations
P/E (x)
7.2
7.3 13.7
P/BV (x)
2.1
1.8
1.7
EV/ EBITDA (x)
2.5
2.9
5.4
Div. Yield (%)
7.0
7.3
4.1
2015E
3.1
1.2
1.5
29.9
1.6
248.5
12.3
11.9
66.5
13.5
1.6
5.3
4.9
CMP: INR402
Buy
2QFY14 is the first full quarter of impact of commodities transaction

tax (CTT), which has had a severe impact on volumes. In addition,
there are uncertainties around the parent group FTECH and its
subsidiary NSEL, which seemingly impacted volumes in the last month
of the quarter.
The value of total transactions at MCX during the quarter was ~INR21t,
down ~47% YoY and 44% QoQ.
We estimate no change in transaction yield, as a result of which our
revenue estimate for the quarter is INR682m, down 48% YoY and 45%
QoQ.
Volumes in Gold declined by ~41% QoQ, in Silver by ~53% QoQ, in
Copper by ~43% QoQ and in Crude Oil by ~36% QoQ.
Our EBITDA margin estimate for the quarter is 28.8%, down 22.7pp
QoQ, owing to strong operating leverage. Our absolute EBITDA
estimate is down 69% QoQ and 76% YoY to INR196m.
Our PAT estimate is INR375m, down 55% QoQ, and 67% YoY.

Volumes, post imposition of CTT.
Volumes ramp-up at MCX-SX.
(INR Million)
Y/E March
Sales
Q-o-Q Gr. (%)
Staff Costs
Admin and other expenses
Depreciation
EBIT
Margins (%)
Other Income
PBT
Tax
Rate (%)
PAT
Q-o-Q Gr. (%)
EPS (INR)
Total volumes (INR t)
Q-o-Q Gr. (%)
Y-o-Y Gr. (%)
E: MOSL Estimates
FY13
1Q
1,230
-0.7
78
396
67
689
56.0
233
921
274
29.7
647
-19.1
12.7
36.4
0.6
8.4
2Q
1,310
6.5
78
415
71
746
57.0
338
1,084
270
24.9
814
25.7
16.0
39.3
8.0
-17.8
3Q
1,246
-4.9
68
455
85
638
51.2
372
1,010
252
24.9
759
-6.8
14.9
37.0
-5.8
-3.6
FY14
4Q
1,207
-3.1
66
504
84
552
45.8
484
1,036
269
26.0
766
1.0
15.0
36.1
-2.6
-0.3
1Q
1,228
1.8
80
516
84
548
44.6
285
834
232
27.9
601
-21.5
11.8
37.5
4.0
3.0
2QE
682
-44.5
72
414
82
114
16.8
260
375
104
27.9
270
-55.0
5.3
20.9
-44.4
-42.7
3QE
653
-4.2
67
366
82
139
21.3
271
410
114
27.9
295
9.3
5.8
19.9
-4.4
-49.3
4QE
698
6.9
67
373
82
176
25.3
276
453
126
27.9
326
10.5
6.4
21.4
7.3
-42.2
FY13
FY14E
4,935
-6.2
340
1,770
314
2,510
50.9
1,355
3,865
1,065
27.6
2,800
-2.2
54.9
148.8
3,261
-33.9
245
1,669
326
1,021
31.3
1,062
2,083
583
28.0
1,500
-46.4
29.4
99.7
-4.6
-33.0
Ashish Chopra (Ashish.Chopra@MotilalOswal.com)/Siddharth Vora (Siddharth.Vora@MotilalOswal.com)

October 2013
C203
September 2013 Results Preview | Sector: Diversified
Sintex Industries
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
SINT IN
324.1
7/0
76 / 17
-3 / -59 / -74
CMP: INR21

Y/E March
2012 2013 2014E
Net sales
44.5 51.1 53.2
EBITDA
7.2
7.7
7.8
Adj. PAT
3.5
4.1
3.2
Adj EPS (INR)
13.0 13.3
9.9
EPS Gr. (%)
-22.4
2.1 -25.3
BV/share (INR) 97.7 100.4 105.8
RoE (%)
14.0 14.3
9.8
RoCE (%)
11.0 10.3
8.9
Payout (%)
6.7
7.8 10.0
Valuations
P/E (x)
1.7
1.6
2.2
P/BV (x)
0.2
0.2
0.2
EV/EBITDA (x)
3.9
4.4
4.2
Div. Yield (%)
3.0
3.2
3.2
2015E
56.6
9.0
4.0
11.3
13.5
117.4
10.1
9.0
6.6
1.9
0.2
3.5
3.2
Buy
We expect SINT's 2QFY14E revenue to grow 0.5% YoY to INR12b, EBITDA

to de-grow 5% YoY to INR1.7b and Adjusted PAT to 3% to INR795m.
Monolithic segment to post 25% YoY de-growth, while Prefab growth
to moderate at 13% YoY (v/s 19% YoY in 1QFY14).
Overseas, the automobile vertical is yet to show signs of an
improvement, albeit growth in electrical and medical imaging
segments and recent acquisitions will render cushion. Currency benefit
to bolster overseas business further. We estimate foreign composites
to grow 24% YoY.
Domestic composites to post 11% YoY decline on the back of weakness
in automobile segment, thus denting Bright's performance.
We assume a broadly flattish trend in QoQ margins in most verticals,
and estimate overall margins at 14.5% (+0.2pp QoQ, -0.8pp YoY).
Nonetheless, sharp INR depreciation is likely to dent reported PAT
severely. We assume MTM forex loss of INR665m on its un-hedged
portion of FCCB (USD110m).
The stock trades at FY15E P/E of 1.9x and EV/EBITDA of 3.5x. We value
SINT at INR30 and maintain a Buy.

Outlook in monolithic business and improvement in working capital.
Stabilization in operations of recent acquisitions in Germany and
Poland, along with outlook on overseas composite business.
Cash flow health and scope for deleveraging.
(INR Million)
Y/E March
1Q
Operating Income
10,806
YoY Growth (%)
-2.8
EBITDA
1,776
EBITDA Margin (%)
16.4
YoY Growth (%)
-3.4
Depreciation
483
Interest
354
Other Income
42
Extraordinary items
-289
Profit before Tax
692
Tax Provisions
241
Tax / PBT
25
PAT before MI & Income from Assoc
451
Min. Int. and Profit from Associate
17
Consolidated PAT
468
Adj. Consolidated PAT
757
YoY Growth (%)
-20.0
E: MOSL Estimates
FY13
2Q
11,985
3.6
1,828
15.3
-13.6
505
361
64
-49
978
258
25
721
3
723
772
-21.6
3Q
14,272
22.9
2,198
15.4
9.6
520
312
36
-450
953
420
30
533
3
536
986
43.2
FY14
4Q
14,013
36.9
1,890
13.5
-13.7
546
436
456
-116
1,247
-250
-18
1,497
13
1,510
1,626
79.0
1Q
11,281
4.4
1,609
14.3
-13.2
564
434
87
-37
661
201
29
460
6
466
503
-33.5
2QE
12,047
0.5
1,748
14.5
-4.9
579
434
84
-665
153
31
20
123
8
130
795
3.0
3QE
14,804
3.7
2,324
15.7
1.9
579
452
87
80
1,461
292
20
1,168
8
1,176
1,096
11.1
4QE
15,069
7.5
2,128
14.1
4.8
595
452
85
35
1,202
289
25
913
8
920
885
-45.5
FY13
FY14E
51,079
14.7
7,695
15.1
7.2
2,054
1,462
596
-903
3,871
669
14.0
3,202
0
3,238
4,141
17.2
53,202
4.2
7,810
14.7
1.5
2,317
1,772
343
-587
3,477
813
20.0
2,664
30
2,634
3,221
-22.2
Sandipan Pal (Sandipan.Pal@MotilalOswal.com)

October 2013
C204
September 2013 Results Preview | Sector: Agrochemicals
United Phosphorus
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
UNTP IN
442.6
63 / 1
168 / 108
-9 / 17 / 5

Y/E March
Sales
EBITDA
NP
Adj EPS (INR)
EPS Growth (%)
BV/Share (Rs)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2012 2013 2014E

76.7 91.9 105.6
13.8 16.6 20.2
5.9
8.0
9.3
12.8 18.1 21.0
3.3 42.1 15.7
90.4 105.0 121.8
14.9 18.2 18.5
17.3 17.3 19.2
22.5 17.5 19.9
11.2
1.6
6.4
1.8
7.9
1.4
5.4
1.8
2015E
117.8
23.0
11.2
25.2
20.2
142.9
19.0
20.0
16.9
6.8
1.2
4.4
2.5
5.7
1.0
3.6
2.5
CMP: INR143
Buy
We estimate United Phosphorus (UNTP) will report 23.7% YoY growth

in consolidated revenue to INR22.9b. We expect 26% growth in
domestic revenue and 16% growth in international revenue.
EBITDA margin is expected to improve by 110bp YoY to 18.7% due to

favorable forex and operating leverage, translating into EBITDA
growth of 32% to INR4.3b.
However, higher depreciation, interest cost and losses from associate

to reduce PAT growth to 20% YoY to INR1.6b.
Current valuations of 6.8x FY14E EPS and 5.7x EV/EBITDA are very
attractive. Maintain Buy with a target price of INR202 (8x FY15E EPS).

Update on delayed start to season in the US.
Any revision in outlook for FY14, considering favorable climatic
patterns and weaker INR.
Status of integration of DVA Agro, Brazil and turnaround of Sipcam
Isagro, Brazil.
(INR Million)
Y/E March
Net Revenues
YoY Change (%)
EBITDA
Margins (%)
Depreciation
Interest
Other Income
Extra-Ord Expense
Tax
Rate (%)
Reported PAT
Income from Associate Co
Adjusted PAT
YoY Change (%)
Margins (%)
Market-mix
Domestic
YoY Change (%)
% of sales
Exports
YoY Change (%)
% of sales
Total Sales (incl OI)
E: MOSL Estimates
FY13
FY14
FY13
FY14E
1Q
22,222
19.8
3,944
17.7
734
1,109
275
2,375
0
2,375
703
29.6
1,672
357
2,029
10.1
9.1
2Q
18,560
4.8
3,261
17.6
820
869
262
1,834
0
1,834
457
24.9
1,377
-179
1,198
68.0
6.5
3Q
22,956
20.2
4,042
17.6
961
1,013
280
2,348
0
2,348
685
29.2
1,663
72
1,735
52.9
7.6
4Q
28,207
32.3
5,372
19.0
1,022
1,299
183
3,234
352
2,881
186
6.5
2,695
89
3,114
38.0
11.0
1Q
24,558
10.5
4,566
18.6
863
1,358
265
2,609
0
2,609
683
26.2
1,927
200
2,127
4.8
8.7
2QE
22,952
23.7
4,294
18.7
950
1,350
230
2,224
0
2,224
612
27.5
1,612
-180
1,432
19.6
6.2
3QE
27,139
18.2
5,099
18.8
950
1,350
300
3,099
0
3,099
930
30.0
2,169
70
2,239
29.1
8.3
4QE
30,986
9.8
6,291
20.3
986
1,389
140
4,056
0
4,056
653
16.1
3,403
80
3,483
11.8
11.2
91,945
19.9
16,618
18.1
3,537
4,290
1,000
9,791
352
9,439
2,032
21.5
7,407
339
8,022
36.2
8.7
105,635
14.9
20,250
19.2
3,749
5,447
935
11,989
0
11,989
2,877
24.0
9,111
170
9,281
15.7
8.8
6,220
16.0
27.6
16,280
20.7
72.4
22,500
4,910
-13.7
26.1
13,910
13.5
73.9
18,820
4,010
5.2
17.3
19,230
23.4
82.7
23,240
2,910
24.9
10.3
25,470
33.2
89.7
28,380
7,690
23.6
31.0
17,130
5.2
69.0
24,820
6,191
26.1
27.7
16,191
16.4
72.3
22,382
4,754
18.6
17.8
21,915
14.0
82.2
26,669
3,476
19.5
10.6
29,222
14.7
89.4
32,699
18,050
5.0
19.4
74,890
23.9
80.6
92,940
22,111
22.5
20.7
84,459
12.8
79.3
106,570
Jinesh K Gandhi (Jinesh@MotilalOswal.com)

October 2013
C205
September 2013 Results Preview | Sector: Electrical Goods
V-Guard Industries
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel Perf. (%)
VGRD IN
29.8
15 / 0
591 / 381
-19 / 7 / 16

Y/E March
Sales
EBITDA
NP
EPS (iNR)
EPS Gr. (%)
BV/Sh (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2012
9.6
0.9
0.5
17.0
27.0
70.6
26.6
27.3
2013 2014E
13.6 16.8
1.1
1.5
0.6
0.9
21.1 29.1
23.8 38.2
87.6 110.3
26.7 29.4
27.4 31.0
19.4 21.9
28.5
6.9
16.6
1.6
23.1
5.6
14.6
0.7
16.7
4.4
10.5
1.1
2015E
21.1
1.9
1.2
39.1
34.3
141.3
31.1
35.4
20.8
12.4
3.4
8.0
1.4
CMP: INR486
Buy
We expect 2QFY14 revenue to grow 15% YoY to INR3.6b, primarily due

to extended rains and improvement in power scenario in South India.
However, strong rural demand should result in 26% YoY growth in
2HFY14.
EBITDA margin is likely to decline 140bp YoY to 8.2%, primarily on

account of higher ad spends during the quarter and lower operating
leverage.
Due to lower margins, we expect PAT to decline 12% YoY. However, we

expect growth to bounce back, as ad spends in 2HFY14 reduce
considerably.
We cut our EPS estimates by 3% for FY14 and 4.5% for FY15 to factor in
lower growth due to slowdown and improvement in power situation
in South India. The stock trades at 16.7x FY14E and 12.4x FY15E EPS.
Maintain Buy with a revised target price of INR587.

Decline in invertor sales due to improvement in power scenario
Movement of copper prices
Update on new housing wiring cable capacity
(INR Million)
Y/E March
Net Sales
YoY Change (%)
Total Expenditure
EBITDA
Margins (%)
Depreciation
Interest
Other Income
PBT
Tax
Rate (%)
Reported PAT
Adj PAT
YoY Change (%)
Margins (%)
E: MOSL Estimates
1Q
3,190
32.8
2,847
343
10.7
28
45
5
276
69
25.1
207
207
67.3
6.5
FY13
2Q
3Q
3,135
3,490
48.2
41.5
2,835
3,233
300
257
9.6
7.4
29
29
43
49
11
15
239
194
59
40
24.8
20.7
180
153
180
153
162.9
23.2
5.7
4.4
FY14
4Q
3,787
38.5
3,588
199
5.3
29
63
5
113
24
21.1
89
89
-53.4
2.4
1Q
4,082
28.0
3,772
309
7.6
29
55
11
237
60
25.5
176
176
-14.6
4.3
2QE
3,605
15.0
3,311
294
8.2
25
61
10
218
59
27.0
159
159
-11.5
4.4
3QE
4,398
26.0
3,969
429
9.7
37
64
10
338
88
26.0
250
250
62.9
5.7
4QE
4,757
25.6
4,281
476
10.0
40
65
10
381
95
25.0
285
285
219.4
6.0
FY13
FY14E
13,602
40.0
12,503
1,099
8.1
114
200
36
822
193
23.4
629
629
23.8
4.6
16,840
23.8
15,331
1,509
9.0
132
244
42
1,175
305
26.0
869
869
38.2
5.2

October 2013
C206
N O T E S
July 2013
C210
Disclosures
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3. Broking relationship with company covered
4. Investment Banking relationship with company covered
Companies where there is interest

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None
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October 2013

5a. Financials - Banks

Oil & Gas

10. Real Estate

India Strategy | The Trilemma!

S&P CNX: 5,833

FY08-13 EPS CAGR at 7%; expect rebound in FY13-15

FY01-13A: 15% CAGR

India Strategy | The Trilemma!

2QFY14 performance of MOSL Universe by sector Seculars do, cyclicals undo

ELECTIONS: The game-changing juggernaut | Forthcoming State elections

India Strategy | The Trilemma!

perceived by the markets, whereas a fractured government witnesses negative

MARKET OUTLOOK & MODEL PORTFOLIO

In 3QFY14, various important state elections will be viewed as a proxy to the

Divergence is not only observed sector-wise; but even in terms of heavyweight

Navin Agarwal (Navin@MotilalOswal.com) | Rajat Rajgarhia (Rajat@MotilalOswal.com)

ECONOMIST: Dipankar Mitra (Dipankar.Mitra@MotilalOswal.com)

^ ^ W >W

India Str at egy | The Trilemma!

2QFY14 PREVIEW The dollar divide

Expect 2QFY14 Aggregate PAT to grow 3% YoY

MOSL Universe Comparable Universe PAT Growth ex R Ms

India Str at egy | The Trilemma!

Sep-07 Se p-08 S ep-09 Sep -10 S ep-11 S ep-12 Sep -13E

MOSL Universe Comparable Universe Sales Growth ex R Ms (%)

MOSL Universe Comparable Universe EBITDA Growth

India Str at egy | The Trilemma!

MOSL Universe EBITDA Margin LPA: 20.5%

PAT distribution also showing early signs of improvement

15 24 26 20 -8 -15 -15 -11 23 42 26 22 24

PAT Growth Ex RMs (%)

% of MOSL Universe companies

India Str at egy | The Trilemma!

Sector and company analysis: The dollar divide

India Str at egy | The Trilemma!

INR depreciated 13% YoY v/s the USD ...

... and 11% QoQ

2QFY14 USD-INR average

Oil Ex. RMs

EBITDA Margin delta by sector (bp): Technology tops again

Sales growth by sector (%): USD-denominated businesses lead

India Str at egy | The Trilemma!

EBITDA growth by sector (%): USD and secular plays dominate

PAT growth by sector (%): A near encore of EBITD A growth

Contribution to 2QFY14 PAT growth by sector (%)

Oil Ex. RMs

Sector-mix of 2QFY14 PAT (%)

Oil Ex. RMs

Oil Ex. RMs

Other sector highlights

Oil & Gas ex RMs Qtr PAT (INR b)

45 PAT growth YoY (%)

India Str at egy | The Trilemma!

Consumer Sector Quarterly PAT (INR b)

Media Sector September Quarter PAT (INR b)

Healthcare Sector Quarterly PAT (INR b)

Cement: The worst over?

Ce ment PAT (INR b )

All Cement companies are expected to clock PAT de-growth.

All Consumer companies are expected to clock positive PAT growth.

India Str at egy | The Trilemma!

Sharp 33% YoY dip in PSU Banks' PAT

Financials PAT growth YoY (%)

^ ^ W >W