2QFY2014ResultReview November2013

2QFY2014 Result Review
November 2013
INR aids earnings performance

For 2QFY2014, Sensex as well as our coverage companies* reported a lower-than-expected earnings growth, weighed, in particular, by earnings in cyclical sectors such as cement, capital goods and infrastructure. The earnings de-growth for these sectors emerged as a drag on overall profitability despite overall healthy revenue growth for Sensex and our coverage companies and in-line margin performance. Sensex companies posted a 5.9% yoy growth in earnings as compared to our estimate of 8.2% yoy and our coverage companies reported a marginal growth of 0.7% yoy in earnings in contrast to our estimate of 4.1% yoy growth. The overall earnings performance continued to be largely supported by companies in the export-oriented space namely IT and pharmaceuticals. The metals sector also supported earnings performance led by the impact of INR depreciation on import substitution and increase in steel exports. Both Sensex and our coverage companies reported higher-than-expected double-digit revenue growth at 13.9% yoy and 13.1% yoy during the quarter despite sluggish pace of economic growth. The performance can be mainly attributed to robust top-line growth in the IT, pharmaceuticals, automobile and oil and gas sectors. On the margins front, the performance came broadly in line with our expectations. Our coverage companies reported margin contraction of 25bp yoy and 89bp qoq mainly due to the stress in cyclical sectors reflecting weak pricing power.
External sector in better shape, macros poised for a recovery

Coupled with persistence of easy money, the signs of strengthening GDP growth in advanced economies have driven risk-on mode back in the global markets. Domestically, the improvement in export performance has come as a much-needed silver lining for the economy. We believe that the strong rebound in exports is likely to have a cascading positive impact on narrowing the CAD substantially and boosting investment and GDP growth. Addressing our external vulnerability by tackling the elevated CAD and attracting foreign inflows for its financing has boosted confidence in our markets. This is amply reflected by the return of strong FII inflows in equities as well as appreciation and consequent stability in the INR. Going ahead we believe that the expected easing of food prices, as the new harvest enters markets, is likely to lead to a moderation in inflationary pressures in the economy. The expectations on the outcome of elections are also likely to drive market sentiments.
Outlook and Valuation

We expect Sensex EPS to post a growth of 9.4% for FY2014. Attributing a 15x multiple to our Sensex EPS, we arrive at a target of 23,000 for the Sensex over the next one year implying an upside of about 14.0% from the present levels. We continue to have a positive outlook on export-oriented sectors like IT and pharmaceuticals owing to signs of recovery in advanced economies and the rupee depreciation on a yoy basis. We are positive on select metal stocks as well, considering recent capacity additions and under-utilized capacity getting employed for exports aided by improvement in global fundamentals as well as competitiveness due to rupee depreciation. We also selectively prefer large private banks as they remain structurally strong and are also likely to benefit from an imminent cyclical revival.
Please refer to important disclosures at the end of this report.

Exhibit 1: 2QFY2014 Angel coverage performance vis-a-vis estimates
Sector Net Sales 2QFY14A (%, yoy) Agriculture (2) Auto (7) Auto Anc. (10) Banks - New private (4) Banks - PSUs and Old private (23) Banks - Housing finance (2) Capital Goods (7) Cement (7) FMCG (12) Infrastructure (12) IT (12) Media (5) Metals (14) Mining (2) Oil & Gas (8) Pharmaceuticals (12) Power (2) Telecom (3) Coverage Universe (144) Source: Company, Angel Research 25.5 20.0 9.8 18.5 10.7 13.9 (5.6) (3.8) 9.5 6.5 29.5 19.1 8.4 4.2 15.4 20.9 0.7 7.3 13.1 2QFY14E (%, yoy) 16.8 19.8 9.7 19.3 6.5 9.4 (3.9) (0.4) 11.2 5.2 29.8 16.5 5.6 3.5 5.4 11.6 1.5 5.1 9.9 Net P rofit Profit 2QFY14A (%, yoy) 38.9 23.4 23.6 22.7 (40.6) 13.1 (48.2) (54.1) 13.9 (14.6) 30.8 14.2 19.8 (4.6) (0.7) 22.3 (18.9) 12.3 0.7 2QFY14E (%, yoy) 35.0 18.3 16.0 23.5 (22.3) 6.4 (28.1) (24.2) 13.8 (9.5) 24.5 12.2 24.3 3.6 (2.8) 18.7 (0.6) 25.1 4.1 (bps, yoy) 73 266 219 347 (606) (4) (626) (883) 108 (104) 141 (113) 163 (376) (122) 68 (108) 178 (25) Operating Margins 2QFY14A (bps, qoq) 26 163 13 65 (586) (34) 39 (653) 45 14 202 (60) (97) (928) 88 143 (211) 33 (89) 2QFY14E (bps, yoy) 12 124 120 93 (399) (58) (238) (459) 55 (90) 54 154 116 181 (144) 34 (42) 65 (32) (bps, qoq) (39) 21 (52) (152) (380) (89) 427 (218) (6) 10 112 211 (170) (419) 62 64 (146) (80) (107)
Exhibit 2: 2QFY2014 Sensex performance vis-a-vis estimates

Sector Weight (%) Auto (5) Capital Goods (1) Finance (4) FMCG (2) Infrastructure (1) IT (3) Metals (3) Mining (1) Oil & Gas (3) Pharma (2) Power (2) Telecom (1) Sensex* (28) 10.4 0.7 24.5 12.9 4.5 17.8 2.7 1.0 13.5 4.5 2.5 2.4 97.3 Net Sales 2QFY14A (%, yoy) 22.0 (14.8) 11.7 9.2 10.0 29.3 6.2 5.8 15.3 36.3 (0.9) 5.2 13.9 2QFY14E (%, yoy) 21.7 (11.6) 11.9 10.7 6.1 29.6 4.8 3.5 5.6 21.4 2.6 1.1 10.4 Net P rofit Profit 2QFY14A (%, yoy) 28.9 (54.1) (4.2) 10.5 12.2 25.8 83.4 (0.8) 1.5 41.6 (19.9) (29.0) 5.9 2QFY14E (%, yoy) 23.0 (31.8) 0.4 12.2 0.7 21.4 107.9 3.6 (2.0) 53.0 (3.8) 9.8 8.2 Operating Margins 2QFY14A (bps, yoy) 300 (1,186) (406) 196 (100) 108 190 (314) (82) 155 1 70 6 (bps, qoq) 167 70 (246) 148 113 184 (71) (914) 103 29 (198) (23) (26) 2QFY14E (bps, yoy) 144 (367) (264) 48 (116) 52 149 181 (132) 64 42 22 (1) (bps, qoq) 10 889 (83) 0 97 128 (108) (419) 53 (63) (157) (71) (34)
Source: Company, Angel Research; Note: *Sesa Goa and Cipla estimates have been excluded as comparable 2QFY2013 numbers are not available
November 2013

Exhibit 3: Sensex companies' 2QFY2014 performance
Weight Sector Bajaj Auto Bharti Airtel BHEL Coal India Dr. Reddy HDFC HDFC Bank Hero Moto Corp Hindalco HUL ICICI Bank Infosys ITC Jindal Steel Gail India L&T M&M Maruti Suzuki NTPC ONGC RIL SBI Sun Pharma Tata Motors Tata Power Tata Steel TCS Wipro Sensex* (%) 1.7 2.4 0.7 1.0 1.7 7.4 7.2 1.2 0.9 2.6 7.2 9.0 10.3 0.6 1.0 4.5 2.3 1.2 1.7 3.5 9.0 2.7 2.8 4.0 0.8 1.3 6.9 2.0 97.3 2QFY2014 5,061 21,343 8,984 15,411 3,357 1,908 6,321 5,696 6,246 6,747 6,210 12,965 7,776 3,633 13,945 14,510 8,814 10,212 16,272 22,312 103,758 15,529 4,192 56,216 2,200 36,645 20,977 10,992 448,232 Net Sales (` cr) 2QFY2013 4,817 20,283 10,546 14,573 2,881 1,736 5,354 5,151 6,115 6,155 5,414 9,858 7,146 3,541 11,361 13,195 9,659 8,070 16,120 19,788 90,336 14,320 2,657 42,819 2,520 34,133 15,621 9,271 393,441 % chg 5.1 5.2 (14.8) 5.8 16.5 9.9 18.1 10.6 2.1 9.6 14.7 31.5 8.8 2.6 22.7 10.0 (8.7) 26.5 0.9 12.8 14.9 8.4 57.8 31.3 (12.7) 7.4 34.3 18.6 13.9 2QFY2014 837 512 648 3,043 690 1,266 1,982 481 196 880 2,352 2,626 2,038 257 916 978 989 670 2,493 6,064 5,490 2,375 1,362 2,687 262 527 4,702 1,942 49,266 Net P rofit (` cr) Profit 2QFY2013 741 721 1,412 3,069 444 1,151 1,560 441 359 805 1,956 2,369 1,836 582 985 871 902 227 3,142 5,897 5,409 3,658 1,005 2,085 296 (407) 3,512 1,486 46,515 % chg 13.0 (29.0) (54.1) (0.8) 55.4 10.0 27.1 9.3 (45.3) 9.3 20.2 10.9 11.0 (55.8) (7.1) 12.2 9.7 194.7 (20.7) 2.8 1.5 (35.1) 35.5 28.9 (11.5) (229.6) 33.9 30.7 5.9
Source: Company, Angel Research; Note: Sesa Goa and Cipla estimates have been excluded as comparable 2QFY2013 numbers are not available
November 2013
Sectoral Analysis
Automobile - Strong JLR performance and favorable forex boost earnings
During 2QFY2014, our coverage automobile companies reported 23.4% yoy growth in earnings as compared to our estimate of 18.3% yoy led by favorable forex movement which aided EBITDA margins. The overall performance was largely supported by Tata Motors (TTMT) driven by strong earnings growth at JLR as well as Maruti Suzuki (due to the low base of last year on account of the strike at its plants). On a sequential basis too, our coverage automobile companies posted an impressive 20.9% qoq growth in earnings with a double-digit expansion in revenue. This can be attributed largely to the 21.6% qoq revenue growth as JLR's performance was aided by robust volume growth and translation gains on account of INR depreciation against the GBP . Excluding TTMT, earnings growth came in at 7.1% qoq as revenue declined by about 2.0% qoq on decline in volumes. contraction of 10.0% yoy for the remaining capital goods companies.
Cement - Decline in realisation impacts earnings

Our cement coverage universe posted a poor performance during 2QFY2014 due to steep fall in yoy realization. The demand scenario was weak across the country leading to price collapse and the fall in realization. Most of the companies reported a decline even on the top-line front, with the overall cement universe posting a top-line de-growth of 3.8% yoy. Weak realization resulted in a steep decline in OPM for the coverage companies in the range of 650-1,870bp yoy. Profitability was also impacted due to increase in freight costs. Poor operational performance resulted in a 54.1% yoy fall in bottom-line for our coverage cement companies.
FMCG - Healthy earnings continue for the sector

Most of the FMCG companies in our coverage universe have posted strong earnings performance in 2QFY2014, despite the slowdown, aided by higher volumes, better realization and superior product mix. The top-line growth of our FMCG universe stood at 9.5% yoy. However, the performance on the operating margins front has been mixed as the increase in gross margin was offset to an extent by higher advertisement and sales promotion expenditure for most of the companies on account of the slowdown in demand and intense competition. Our coverage FMCG universe posted a 108bp yoy expansion in OPM and 13.9% yoy growth on the bottom-line front.
Banking - Earnings divergence continued as expected

During 2QFY2014, New Private Banks continued to outshine their peers and delivered a strong earnings growth of 22.7% yoy, aided by healthy NII growth of 21.2% yoy. Old private banks faced higher asset quality pressures than new private ones and reported moderate earnings performance during the quarter, with earnings growth of 12.9% yoy. On the other hand, PSU Banks reported a weak performance, marred by elevated asset quality pressures (35.9% yoy higher Gross NPAs), higher opex growth (25.6% yoy), moderate growth in non-interest income (6.9% yoy) and MTM losses on higher yields (though RBI relaxations provided a breather this time). During the quarter, PSU banks posted a sharp bottom-line decline of 42.2% yoy (within which mid-PSUs reported much sharper earnings de-growth of 77.9% yoy as against 29.0% yoy for larger ones).
Infrastructure - L&T supports overall performance but earnings pressure continues

Our coverage infrastructure companies disappointed on the earnings front with a 14.6% yoy contraction owing to higher interest cost and lower-than-anticipated operational performance. L&T, the only infrastructure company in the Sensex, surprised positively on both, the revenue and the earnings front. This was mainly on the back of strong execution performance and higher-than-expected other income. Excluding the performance of L&T, mainly subdued revenue growth of 3.0% yoy resulted in a steep ~80.0% yoy contraction in earnings for the sector. This decline in earnings can be attributed to the persistence of high interest and commodity cost and slowdown in order inflow for the sector.
Capital goods - BHEL weighs on earnings performance

The capital goods companies in our coverage universe reported a sharp de-growth in earnings, weighed down mainly by BHEL's quarterly performance. BHEL, the only Sensex capital goods company, reported a disappointing performance due to slow-moving orders, delay in payments and project clearances at customers' ends as well as margin pressure owing to increase in provisioning. Excluding BHEL, revenues reported a modest 5.4% yoy growth and the operating margin expanded by 42bp yoy. But at the same time, higher interest cost due to enhanced working capital requirements, led to earnings
IT - Strong earnings performance continues

Our coverage IT companies posted a robust earnings growth of 30.8% yoy and 17.4% qoq as 2Q is traditionally a strong quarter because of the strong budget flush that happens before close of
November 2013

the annual capex cycle by clients. On the earnings front, performance came in better-than-expected owing to most of the companies delivering better USD revenue growth. Also, favorable INR depreciation and operational efficiencies helped the companies to post robust operating margins. With Europe showing signs of opening up to the outsourcing model, the Managements of most of the IT companies indicated that deal pipeline is looking strong. While signs of revival in discretionary spending in the US are still at a nascent level, non-discretionary domains continued to lead growth momentum. 2QFY2014 turned out to be the second consecutive quarter of broad-based growth, with contribution from all geographies, verticals and service lines.
Telecom - Disappointment on earnings growth

Overall our coverage telecom companies reported a mixed set of numbers. While Idea reported a largely in-line performance, Bharti's bottom-line was below our expectation due to higher finance charges as well as a one-time exceptional charge and RCom's results came in ahead of our as well as street expectations as margin increased by a whopping 354bp qoq. As the competitive intensity is receding and pricing power is coming back to operators, we expect incumbent players such as Bharti, Vodafone and Idea to perform well going ahead. We are currently neutral on the telecom sector as issues like one-time spectrum charge and renewal fees still persist.
Metals and mining - Tata Steel supports strong earnings performance

Most of the companies in the metals sector reported better-than-expected top-line growth. Amidst low steel demand in India, domestic steel majors have managed to report strong sales growth during 2QFY2014 on the back of 1) import substitution arising out of higher cost of imported steel and 2) increase in steel exports - both of which are a result of sharp INR depreciation against the USD. Our coverage metal companies reported a strong 19.8% yoy growth in earnings. But excluding Tata Steel, our coverage metal universe posted a largely flat earnings performance. Tata Steel's operating performance was boosted due to cost efficiencies and better performance from the European operations.
Continued benign global liquidity conditions boost sentiments

Central banks in advanced economies have continued to support a revival in economic growth through benign liquidity conditions. The Federal Reserve (Fed), for instance, has surprised markets positively and maintained a dovish stance, delaying the tapering of QE3. The Fed has decided to continue purchasing securities to the tune of USD85bn per month (USD45bn in treasury securities and USD40bn in mortgage-backed securities) to maintain downward pressure on longer-term interest rates and support economic recovery. It has also maintained that the Fed funds rate at 0.25% is likely to remain at this exceptionally low level at least as long as the unemployment rate remains above 6.5% and long-term inflation expectations are well anchored. Hence coupled with persistence of easy money, the signs of strengthening GDP growth in advanced economies have driven risk-on mode back in the global markets. At the same time, domestically too positives are shaping up easing concerns on the external front. We do believe that with concerted policy action our external sector vulnerabilities have receded substantially. Strong export growth along with slowing import demand and curbs on gold imports are expected to narrow our trade deficit and CAD substantially. In addition, as a result of the RBI's measures to attract debt and NRI inflows, the financing of the CAD is unlikely to be as challenging as expected earlier. So far, it is believed that the RBI has garnered about USD20bn under its schemes to attract FCNR (B) deposits and foreign currency borrowings. At the same time, the RBI governor has indicated that majority of the oil marketing companies' dollar demand is back in the forex markets. Buoyed by these developments, FIIs have poured in USD5.8bn in the Indian equity markets since September 2013 in contrast with outflows of USD3.7bn witnessed during June - August 2013. Therefore, we believe that the economy is now better poised to tackle risks on account of the imminent tapering of QE3 in the coming months.
Oil and Gas - Mixed earnings performance

Our overall coverage oil and gas companies reported a marginal 0.7% yoy decline in earnings mainly owing to pressure on margins (on expected lines). Sensex oil and gas companies reported a better earnings performance (1.5% yoy growth). This is because heavyweights like RIL and ONGC supported the overall earnings of the coverage oil and gas companies excluding which our coverage oil and gas universe reported earnings de-growth of 7.6% yoy. For ONGC, higher rupee realization boosted the earnings performance.
Pharmaceuticals - Strong earnings performance

Our overall coverage pharmaceutical companies posted a strong 22.3% yoy growth in earnings during the quarter supported by robust revenue performance as well as margin expansion. Excluding the disappointing performance of Ranbaxy (on account of forex losses and extraordinary expenditure), earnings growth for the remaining pharmaceutical companies in our coverage came in much higher at 38.6% yoy.
November 2013
2QFY2014 Result Review Export growth to have a cascading positive impact

Exports have reported robust growth since July 2013 for four straight months on the back of pick-up in external demand, weaker rupee and a low base. The improvement in export performance has come as a much-needed silver lining for the economy. In the April - October period, the trade deficit has narrowed sharply to USD90.7bn as compared to USD112.0bn in the corresponding period of the previous year. We maintain that the strong export growth along with compression of gold imports in particular is expected to narrow the CAD considerably at about 3.0-3.5% of GDP during FY2014 as compared to 4.8% of GDP in FY2013. The RBI governor has pegged the CAD for FY2014 at USD56bn ie lower by a whopping USD32bn as against the previous year's deficit. We continue to maintain that significant export growth is likely to be the starting point of overall sustainable improvement in our macro fundamentals. The growth in non-oil exports is expected to trigger a virtuous investment cycle in the economy. We believe that given the weightage of value-added exports in our economy of at least about 16%, a sustained exports growth at a double-digit run rate could potentially add 100-150bp to the overall GDP growth. Exhibit 4: Positive trends in export and import growth...
(%) 20.0 15.0 10.0 5.0 (5.0) (10.0) (15.0) (20.0) Apr-12 Jun-12 Aug-12 Oct-12 Dec-12 Feb-13 Apr-13 Jun-13 Aug-13 Oct-13 (14.5) Export growth Import growth 13.5
18.2% (18.4% in September 2013) mainly due to the persistence of high vegetable and fruit prices for the fourth consecutive month. Amongst its components, vegetable inflation continued to be driven mainly by prices of onions (278%), sweet potato (206%), tomato (122%) and ginger (109%) and contributed substantially (about 150bp) to the headline print. At the same time, core inflation also picked up to a six-month high at 2.6% as compared to 2.1% in the previous month and 5.2% in October 2012 reflecting the pass through of higher input costs in the manufacturing sector despite weak pricing power. CPI inflation during October 2013 touched a seven month high as it further inched upwards to 10.1% as compared to 9.8% in September 2013. Inflation in food articles (accounting for almost 50% weightage in the index) edged higher to 12.3% as against 11.3% in the previous month. CPI inflation has persisted to remain elevated and close to double-digit levels and core CPI inflation has also remained sticky at 8%-levels. High retail inflation has to a large extent entrenched inflationary expectations. Going ahead, we believe that food inflation is likely to moderate with cooling off of vegetable prices in particular. This can be attributed to good monsoon, the 5% rise in area under kharif sowing and modest improvement in kharif production as per the first advance estimates. At the same time, rabi production is likely to improve meaningfully on account of soil moisture and water reservoir levels. Put together, these factors are expected to result in easing food inflation pressures in the economy. Exhibit 6: Pick-up in headline WPI as well as CPI inflation
(%) 12.0 11.0 10.0 9.0 8.0 7.0 6.0 5.0 4.0
Jun-13 Aug-12 Dec-12 Mar-13 Aug-13 Jun-12 Jan-13 Apr-12 Apr-13 Sep-13 Sep-12 Oct-12 Nov-12 May-13 May-12 Feb-13 Oct-13 Jul-12 Jul-13
WPI Inflation
CPI inflation
10.1
7.0
Source: Ministry of Commerce, Angel Research
Exhibit 5: ... lead to substantial narrowing of the trade deficit

(USD bn) (5) (10) (15) (20) (25)
Mar-12 May-12 Aug-12 Nov-12 Dec -12 Mar-13 May-13 Jan-12 Feb -12 Aug-13 Apr-12 Jun-12 Jul-12 Sep-12 Oct-12 Jan-13 Feb -13 Apr-13 Jun-13 Jul-13 Sep-13 Oct-13
Source: Office of Economic Adviser, Mospi, Angel Research
Exhibit 7: Amongst WPI components, primary articles inflation is high...

(%) 16.0 14.0 12.0 10.3 10.0 8.0 6.0 4.0 2.0 0.0 Apr-12 Jun-12 Aug-12 Oct-12 Dec-12 Feb-13 Apr-13 Jun-13 Aug-13 Oct-13 2.5 Primary Articles Fuel and Power Manufactured Products 14.7
Source: Ministry of Commerce, Angel Research
Food inflation likely to ease going forward

The headline WPI inflation paced up towards an 8-month high during October 2013 at 7.0% as compared to 6.5% in the previous month. Food inflation continued to remain elevated at
Source: Office of Economic Adviser, Angel Research
November 2013

Exhibit 8: ...Driven by elevated food inflation at above 18.0%
(%) 25.0 20.0 15.0 10.0 5.0 Apr-12 Jun-12 Aug-12 Oct-12 Dec-12 Feb-13 Apr-13 Jun-13 Aug-13 Oct-13 Food Articles Non-food Primary Articles
We maintain that a turnaround in the investment cycle is key to meaningfully stimulate growth in the economy. In this context, we believe that positive outcome in the state elections over the
18.2
coming 2 months would build up expectations of a strong government at the helm in the upcoming general elections. Taking cues thereon we believe that market sentiments are likely to be
6.8
boosted further. Going forward, if and when such a government comes to power with a strong mandate we expect further structural reforms in the economy aimed at clearing supply-side bottlenecks and reviving the investment cycle that would in turn support economic growth.
Source: Office of Economic Adviser, Angel Research
Revival in investment key to economic outlook

Growth in industrial output as measured by the IIP continues to remain sluggish led down primarily by the performance of the manufacturing sector. The IIP reported a modest growth of 2.0% during September 2013 as compared to 0.4% during the previous month and 0.7% de-growth in September 2012. The weakness in investment as well as consumption space is reflected by the contraction of 6.8% and 10.8% in capital goods and consumer durables segment respectively. Exhibit 9: Sluggish pace of growth in industrial activity
(%) 15.0 12.0 9.0 6.0 3.0 (3.0) IIP 3MMA IIP
Outlook and Valuation

We expect Sensex EPS to post a growth of 9.4% for FY2014. Attributing a 15x multiple to our Sensex EPS, we arrive at a target of 23,000 for the Sensex over the next one year implying an upside of about 14.0% from the present levels. We continue to have a positive outlook on export-oriented sectors like IT and pharmaceuticals owing to signs of recovery in advanced economies and the rupee depreciation on a yoy basis. We are positive on select metal stocks as well, considering recent capacity additions and under-utilized capacity getting employed for exports aided by improvement in global fundamentals as well as competitiveness due to rupee depreciation. We also selectively prefer large private banks as they remain structurally strong and are also likely to benefit from an imminent cyclical revival. Exhibit 11: Sensex one-year forward P/E
30.0 Sensex 1 year forward P/E 15 year Avg 5 year Avg
25.0
(6.0) Apr-10 Aug-10 Dec-10 Apr-11 Aug-11 Dec-11 Apr-12 Aug-12 Dec-12 Apr-13 Aug-13
Source: Mospi, Angel Research
20.0
Exhibit 10: Sensex EPS growth over FY2013-15

(` )
1,700 1,500 1,300 1,100 900 700 500 FY2013 FY2014E FY2015E 1,192
9 row .4% g th
17.9 % gr owth
15.0
10.0
1,538
5.0 Nov-01
Nov-03
Nov-05
Nov-07
Nov-09
Nov-11
Nov-13
1,304
Source: Angel Research
Source: Angel Research
November 2013
Stock Watch
November 2013
Stock W atch | November 2013 Watch

Company Name Agri / Agri Chemical Rallis United Phosphorus Auto & Auto Ancillary Amara Raja Batteries Apollo Tyres Ashok Leyland Automotive Axle# Bajaj Auto Bharat Forge Bosch India* CEAT Exide Industries FAG Bearings* Hero Motocorp JK Tyre Mahindra and Mahindra Maruti Motherson Sumi Subros Tata Motors TVS Motor Financials Allahabad Bank Andhra Bank Axis Bank Bank of Baroda Bank of India Canara Bank Central Bank Corporation Bank Dena Bank Federal Bank HDFC HDFC Bank ICICI Bank IDBI Bank Indian Bank Neutral Neutral Buy Neutral Neutral Neutral Neutral Neutral Neutral Accumulate Neutral Buy Buy Neutral Accumulate 87 59 1,084 609 210 237 52 268 54 78 794 642 1,022 63 102 1,475 85 752 1,364 108 4,343 3,324 50,868 25,667 12,520 10,508 5,421 4,096 1,901 6,630 123,929 153,954 117,929 8,443 4,409 7,267 5,235 19,329 15,917 14,574 12,333 7,777 5,574 3,356 2,844 8,679 26,708 25,965 9,286 5,919 7,573 5,590 22,724 17,875 16,010 13,428 8,695 6,050 3,531 3,235 10,350 32,441 30,092 10,419 6,374 2.5 2.6 3.4 2.1 2.2 2.1 2.2 1.9 2.3 3.0 3.6 4.6 3.2 1.9 2.7 2.5 2.6 3.4 2.2 2.1 2.1 2.3 1.9 2.3 2.9 3.6 4.7 3.2 2.0 2.7 25.2 13.1 129.2 105.0 53.0 62.2 (11.2) 60.7 15.6 8.6 37.5 35.9 81.9 10.4 27.8 29.7 15.2 157.5 122.7 59.6 59.9 11.7 86.2 19.6 10.2 44.7 45.5 96.5 19.2 32.6 3.4 4.5 8.4 5.8 4.0 3.8 (4.6) 4.4 3.5 9.0 21.2 17.9 12.5 6.1 3.7 2.9 3.9 6.9 5.0 3.5 4.0 4.4 3.1 2.8 7.6 17.8 14.1 10.6 3.3 3.1 0.5 0.5 1.4 0.8 0.5 0.5 0.7 0.5 0.4 1.0 4.4 3.6 1.6 0.4 0.4 0.5 0.4 1.18 0.7 0.5 0.4 0.7 0.4 0.3 0.9 3.9 2.99 1.5 0.4 0.4 11.5 8.4 17.1 13.2 13.2 11.5 (10.4) 9.3 10.6 11.0 30.1 21.6 14.6 6.9 11.4 12.3 9.2 18.1 13.9 13.3 10.2 11.0 12.2 12.2 11.9 30.6 23.0 15.3 11.9 12.2 Neutral Neutral Neutral Neutral Buy Accumulate Neutral Neutral 328 76 15 240 1,893 287 254 114 2,360 325 9,571 1,481 2,183 146 1,023 314 419 5,594 3,851 4,097 363 54,790 6,675 27,022 913 9,669 2,293 39,480 571 57,604 49,537 15,023 144 100,557 2,418 3,504 13,141 11,264 700 21,710 6,214 8,890 5,260 6,178 1,409 25,059 7,530 40,406 45,053 29,041 1,231 228,397 7,844 3,986 14,225 13,796 890 24,818 6,897 10,322 5,843 6,894 1,664 28,156 8,294 46,153 52,429 32,582 1,412 263,471 8,878 16.6 12.3 3.8 8.7 20.5 16.2 16.3 12.0 14.7 13.4 14.2 11.3 12.6 11.6 8.8 10.0 14.3 6.0 16.1 12.2 8.0 10.7 21.0 16.8 17.7 11.7 15.2 15.4 14.5 11.1 12.3 11.3 8.8 10.2 14.5 6.2 21.4 14.7 (0.8) 11.1 124.2 16.6 319.3 76.4 6.7 73.3 104.7 70.2 59.7 96.5 14.8 1.7 41.8 5.0 23.2 15.8 1.1 25.8 146.6 21.7 398.8 83.3 7.8 98.7 145.5 73.2 65.2 111.7 18.4 3.6 50.0 6.4 15.3 5.2 (19.2) 21.6 15.2 17.3 27.0 3.3 16.9 18.8 18.9 2.0 15.7 17.0 17.2 14.1 8.9 10.1 14.1 4.8 13.4 9.3 12.9 13.2 21.6 3.0 14.6 14.0 13.6 1.9 14.3 14.7 13.9 6.7 7.5 7.9 4.1 1.0 1.5 1.3 5.5 2.7 4.3 0.9 2.5 2.3 6.9 0.5 3.2 2.3 4.7 0.5 2.4 1.7 3.3 0.8 1.4 1.2 4.3 2.3 3.7 0.7 2.2 2.0 5.5 0.4 2.7 2.0 3.7 0.5 1.8 1.5 30.0 20.0 (5.0) 6.2 40.2 16.2 15.8 30.2 15.8 13.0 39.1 27.7 22.0 14.7 31.9 3.5 30.4 18.3 25.6 18.1 7.4 13.8 37.4 18.7 16.9 25.5 16.1 15.4 45.1 22.8 20.5 14.8 29.7 7.2 27.5 20.1 1.5 0.4 0.5 0.6 2.3 1.3 2.7 0.3 1.3 1.4 1.4 0.4 1.1 0.9 0.6 0.4 0.5 0.2 1.3 0.3 0.4 0.5 1.9 1.1 2.3 0.2 1.1 1.2 1.2 0.4 0.9 0.7 0.5 0.3 0.4 0.2 Neutral Buy 162 158 225 3,147 6,991 1,696 10,091 1,983 11,302 14.9 16.5 14.9 16.5 7.7 19.2 8.8 22.5 21.0 8.2 18.4 7.0 4.4 1.3 3.7 1.1 22.4 17.0 21.9 17.2 1.9 0.9 1.7 0.7 Reco CMP (`) Target Price (`) Mkt Cap (` cr) Sales (` cr) FY14E FY15E OPM (%) FY14E FY15E EPS (`) FY14E FY15E PER (x) FY14E FY15E P/BV (x) FY14E FY15E RoE (%) FY14E FY15E EV/Sales (x) FY14E FY15E
Accumulate 8,606
Accumulate 1,380 Accumulate 1,977 Accumulate Accumulate Neutral Buy Neutral Accumulate Neutral 139 935 1,640 256 24 373 51
May 2011

Company Name IOB J & K Bank LIC Housing Finance Oriental Bank Punjab Natl.Bank South Ind.Bank St Bk of India Syndicate Bank UCO Bank Union Bank Vijaya Bank Yes Bank Capital Goods ABB* BGR Energy BHEL Blue Star Crompton Greaves Jyoti Structures KEC International Thermax Cement ACC Ambuja Cements India Cements J K Lakshmi Cement Ramco Cements Shree Cement^ UltraTech Cement Construction Ashoka Buildcon Consolidated Co IRB Infra ITNL IVRCL Infra Buy Neutral Buy Buy Neutral 50 4 88 113 14 60 104 156 788 69 2,916 2,192 420 1,912 1,715 3,772 7,423 5,440 2,131 1,824 4,191 7,970 5,931 21.0 2.4 45.1 29.2 7.7 21.5 6.2 45.3 30.4 7.6 5.0 (2.9) 14.6 30.1 (2.5) 5.5 (0.4) 15.1 32.3 (2.1) 9.9 (1.3) 6.0 3.7 (5.4) 9.1 (10.3) 5.8 3.5 (6.6) 0.7 0.1 0.8 0.5 0.2 0.7 0.2 0.7 0.5 0.2 8.8 14.2 14.9 7.6 13.4 14.2 1.8 0.5 3.0 2.4 0.6 1.8 0.5 3.2 2.5 0.6 Buy Neutral Neutral Buy Neutral Neutral Neutral 1,050 174 59 68 162 4,290 1,818 1,225 79 19,711 26,958 1,826 803 3,847 14,945 49,863 11,230 9,369 4,648 2,029 3,779 6,051 20,715 12,715 10,770 5,222 2,354 4,449 6,742 23,948 15.7 20.3 12.3 16.5 19.3 25.3 20.7 17.6 22.6 13.3 18.8 21.3 24.0 20.0 53.0 8.1 2.8 9.4 9.5 249.2 85.9 70.0 9.9 5.9 12.4 15.4 282.5 93.5 19.8 21.6 21.4 7.3 17.1 17.2 21.2 15.0 17.7 10.0 5.5 10.5 15.2 19.4 2.5 2.8 0.5 0.6 1.5 3.3 2.9 2.3 2.6 0.5 0.5 1.3 2.7 2.6 13.0 13.7 2.4 8.4 9.1 20.6 14.5 15.9 15.5 5.1 10.3 13.4 19.6 14.0 1.5 2.4 0.8 0.6 1.8 2.2 2.5 1.2 2.0 0.7 1.1 1.5 1.8 2.3 Sell Accumulate Neutral Buy Accumulate Neutral Neutral Neutral 596 107 137 139 108 23 40 628 442 122 193 124 12,630 771 33,532 1,250 6,922 186 1,031 7,483 7,474 3,541 41,082 2,941 13,272 3,312 7,709 5,480 8,096 3,995 38,590 3,099 14,789 3,555 8,399 6,187 5.8 12.1 14.5 3.4 5.7 9.0 6.2 9.1 7.0 10.8 14.1 4.2 6.6 9.0 6.9 9.6 9.0 21.7 15.9 6.0 5.6 6.2 5.1 26.7 13.8 23.3 14.3 9.3 7.8 8.4 7.7 31.7 66.0 4.9 8.6 23.2 19.2 3.6 7.8 23.5 43.2 4.6 9.6 15.0 13.9 2.7 5.2 19.8 4.8 0.6 1.5 2.9 1.8 0.3 0.8 3.6 4.6 0.5 1.4 2.5 1.7 0.2 0.7 3.2 7.3 22.3 18.6 12.9 9.8 7.7 16.6 16.1 10.9 19.7 15.0 18.0 12.5 9.7 20.7 17.0 1.6 0.5 0.6 0.5 0.6 0.3 0.3 1.3 1.5 0.4 0.7 0.5 0.6 0.3 0.3 1.2 Reco Neutral Neutral Neutral Neutral Accumulate Accumulate Neutral Neutral Accumulate Neutral Neutral Accumulate CMP (`) 50 1,180 210 178 517 21 1,740 83 73 119 40 345 Target Price (`) 577 23 79 381 Mkt Cap (` cr) 4,639 5,720 10,605 5,180 18,269 2,789 119,042 4,981 5,468 7,120 1,965 12,421 Sales (` cr) FY14E FY15E 7,849 3,184 2,063 6,817 20,622 1,790 65,883 6,831 7,367 10,630 2,891 4,424 8,451 3,544 2,507 7,379 23,258 2,000 73,902 7,512 8,210 11,936 2,930 5,261 OPM (%) FY14E FY15E 2.3 3.9 2.3 2.6 3.3 2.7 3.1 2.5 3.0 2.4 1.9 2.8 2.3 4.0 2.3 2.6 3.3 2.7 3.0 2.4 3.1 2.4 1.8 2.9 EPS (`) FY14E FY15E 6.8 244.5 24.5 44.2 124.0 3.6 167.2 25.9 18.9 26.3 8.1 43.1 14.7 228.7 28.9 51.2 158.9 4.2 222.9 22.1 20.9 38.5 8.4 49.4 PER (x) FY14E FY15E 7.4 4.8 8.6 4.0 4.2 5.7 10.4 3.2 3.8 4.5 4.9 8.0 3.4 5.2 7.3 3.5 3.3 4.9 7.8 3.7 3.5 3.1 4.7 7.0 P/BV (x) FY14E FY15E 0.4 1.0 1.5 0.4 0.6 0.9 1.3 0.5 0.8 0.5 0.5 1.7 0.4 0.9 1.3 0.4 0.5 0.8 1.1 0.4 0.6 0.4 0.4 1.4 RoE (%) FY14E FY15E 5.0 22.3 17.7 10.2 13.3 15.8 11.4 15.4 18.0 9.6 9.4 24.0 10.2 17.9 18.2 10.9 15.2 16.3 13.8 11.8 17.3 12.9 9.1 22.7 EV/Sales (x) FY14E FY15E -
May 2011
10

Company Name Jaiprakash Asso. Larsen & Toubro Nagarjuna Const. Punj Lloyd Sadbhav Engg. Simplex Infra Unity Infra FMCG Asian Paints Britannia Colgate Dabur India GlaxoSmith Con* Godrej Consumer HUL ITC Marico Nestle* Tata Global IT HCL Tech^ Hexaware* Infosys Infotech Enterprises KPIT Cummins Mindtree Mphasis& NIIT Persistent TCS Tech Mahindra Wipro Media D B Corp HT Media Jagran Prakashan PVR Sun TV Network Reco Neutral Buy Buy Neutral Buy Neutral Neutral CMP (`) 46 964 25 26 77 75 23 Target Price (`) 1,188 29 90 945 1,220 130 240 155 1,500 464 795 2,500 1,750 567 289 104 104 429 Mkt Cap (` cr) 10,297 89,273 640 873 1,162 370 169 48,746 10,487 16,992 28,102 18,612 29,284 123,688 244,527 13,307 52,715 8,769 73,345 3,618 192,329 3,195 2,761 5,727 8,653 365 3,486 391,883 38,734 117,829 4,866 1,880 2,702 2,303 14,873 Sales (` cr) FY14E FY15E 13,238 66,667 6,044 12,726 2,458 6,237 2,179 12,473 6,470 3,588 7,120 3,617 7,801 28,415 33,414 4,849 9,330 8,070 33,138 2,300 49,988 2,135 2,769 3,011 6,938 1,023 1,671 81,883 18,565 44,029 1,797 2,195 1,683 1,401 2,287 15,218 74,669 6,533 14,226 2,727 6,908 2,359 14,581 7,339 4,130 8,188 4,259 9,094 31,962 38,654 5,578 10,860 8,958 36,758 2,720 55,817 2,344 3,134 3,485 7,373 1,113 1,934 95,264 21,309 49,961 1,996 2,360 1,845 1,719 2,551 OPM (%) FY14E FY15E 26.9 10.0 8.0 8.2 10.6 9.1 12.9 15.8 8.6 17.4 16.8 16.1 15.1 13.6 35.8 15.0 21.8 9.8 25.2 22.8 26.7 18.5 16.0 20.3 18.8 6.5 25.1 31.4 22.5 22.8 25.1 14.5 21.0 18.5 69.7 26.9 10.0 8.0 8.2 10.6 9.0 13.0 16.0 8.9 17.8 16.9 16.4 15.8 13.7 36.5 15.5 21.9 9.9 23.7 21.9 27.2 18.2 16.1 20.8 18.3 7.1 25.8 31.1 21.7 23.5 26.5 15.0 22.3 18.2 71.1 EPS (`) FY14E FY15E 1.6 46.9 2.4 0.9 4.6 9.9 9.3 13.2 31.6 38.3 5.3 125.0 24.2 16.6 11.0 7.3 122.6 7.2 81.5 12.7 179.9 22.8 13.4 112.8 42.8 1.9 59.9 97.4 121.0 31.5 14.6 7.7 6.4 17.5 20.0 2.5 52.2 2.6 1.0 5.4 13.9 9.5 15.7 37.8 44.9 6.2 152.0 30.0 18.3 12.8 9.0 149.2 8.3 87.0 13.8 216.2 25.3 15.7 128.2 46.4 3.8 72.1 115.8 129.7 36.5 17.3 8.4 7.2 23.4 23.8 PER (x) FY14E FY15E 29.7 20.6 10.4 30.6 16.7 7.6 2.5 38.5 27.7 32.6 30.2 35.4 35.5 34.4 28.0 28.2 44.6 19.6 12.9 9.5 18.6 12.5 10.7 12.2 9.6 11.8 14.5 20.5 13.8 15.2 18.2 10.4 12.7 33.2 18.9 18.5 18.5 9.6 25.7 14.3 5.4 2.4 32.4 23.2 27.9 25.8 29.1 28.6 31.3 24.1 23.0 36.6 17.2 12.1 8.7 15.5 11.3 9.1 10.7 8.9 5.9 12.1 17.3 12.8 13.1 15.3 9.5 11.4 24.8 15.9 P/BV (x) FY14E FY15E 0.8 2.8 0.3 0.3 1.3 0.3 0.2 11.8 11.5 28.7 10.6 11.2 7.4 32.9 9.1 5.5 21.8 2.2 3.9 2.4 3.8 2.0 1.9 3.2 1.5 0.6 2.8 7.0 4.2 3.5 4.7 1.2 2.6 3.4 4.7 0.7 2.6 0.2 0.3 1.2 0.3 0.2 9.4 8.4 23.3 8.4 8.9 6.1 23.8 7.4 4.5 15.9 2.1 3.0 2.0 3.2 1.7 1.6 2.4 1.3 0.5 2.3 5.5 3.2 2.9 4.0 1.1 2.3 3.1 4.1 RoE (%) FY14E FY15E 2.6 14.2 2.5 1.0 8.1 3.7 7.9 33.7 48.8 96.2 39.1 34.8 24.1 111.7 35.4 21.5 56.1 8.9 30.2 25.7 21.1 16.2 20.0 26.5 15.7 4.7 19.3 34.2 30.1 22.5 24.0 10.7 20.9 10.4 26.4 4.0 14.5 2.6 1.2 8.7 5.0 7.6 32.3 41.9 92.5 36.5 34.1 24.6 88.2 33.9 21.7 50.3 9.5 25.5 24.0 20.9 15.3 19.0 23.2 14.7 9.0 19.1 31.5 24.8 21.6 24.2 10.7 21.5 12.9 27.8 EV/Sales (x) FY14E FY15E 2.6 1.4 0.5 0.6 0.7 0.5 0.7 3.9 1.6 4.5 4.0 4.7 3.9 4.3 7.2 2.7 5.8 1.1 2.1 1.5 3.2 1.0 1.0 1.6 0.8 0.1 1.6 4.7 1.8 2.3 2.6 0.5 1.7 2.0 6.3 2.3 1.3 0.5 0.6 0.7 0.5 0.7 3.3 1.4 3.9 3.4 3.9 3.3 3.8 6.1 2.4 4.9 1.0 1.7 1.3 2.7 0.8 0.8 1.3 0.6 0.0 1.2 3.9 1.5 1.8 2.3 0.3 1.5 1.6 5.5
Neutral 508 Accumulate 875 Neutral 1,250 Neutral 161 Neutral 4,426 Neutral 860 Neutral 572 Neutral 308 Neutral 206 Neutral 5,468 Neutral 142 Buy Accumulate Neutral Sell Accumulate Accumulate Accumulate Neutral Reduce Buy Accumulate Buy Accumulate Buy Buy Neutral Accumulate 1,050 121 3,349 286 143 1,377 412 22 872 2,001 1,666 478 265 80 81 580 377
May 2011
11

Company Name Metal Bhushan Steel Coal India Electrosteel Castings GMDC Hind. Zinc Hindalco JSW Steel MOIL Monnet Ispat Nalco NMDC SAIL Sesa Sterlite Tata Steel Sarda Prakash Industries Godawari Power Oil & Gas Cairn India GAIL ONGC Reliance Industries Gujarat Gas* Indraprastha Gas Petronet LNG Gujarat State Petronet Pharmaceuticals Alembic Pharma Aurobindo Pharma Aventis* Cadila Healthcare Cipla Dr Reddy's Dishman Pharma GSK Pharma* Indoco Remedies Ipca labs Lupin Ranbaxy* Sun Pharma Reco CMP (`) 482 268 14 102 122 118 875 230 141 37 128 65 174 392 101 35 81 327 328 278 844 286 266 123 59 Target Price (`) 448 15 131 156 102 775 247 196 151 52 415 138 42 100 380 318 931 70 362 894 504 2,949 107 791 904 Mkt Cap (` cr) 10,914 169,121 452 3,228 51,549 24,403 21,149 3,857 901 9,407 50,788 26,969 51,689 38,072 363 474 266 62,470 41,657 237,971 272,662 3,671 3,725 9,251 3,334 3,771 8,122 6,081 15,310 30,896 41,414 654 20,329 913 8,617 38,070 17,715 119,140 Sales (` cr) FY14E FY15E 9,407 68,303 1,976 1,477 12,882 87,926 43,864 1,027 2,041 6,857 11,209 44,060 68,018 154,650 1,096 2,076 2,413 19,470 52,926 164,816 464,837 3,270 4,488 37,686 1,119 1,736 6,930 1,682 7,123 9,274 13,377 1,394 2,548 747 3,296 11,576 10,400 14,306 12,737 70,430 2,017 1,890 13,550 97,352 47,588 1,069 2,475 7,454 11,948 45,484 73,756 166,858 1,134 2,060 2,745 19,621 57,790 196,050 495,385 3,467 5,418 44,414 1,009 2,008 7,970 1,917 8,367 10,796 15,350 1,534 2,752 906 4,087 13,855 11,331 16,236 OPM (%) FY14E FY15E 32.2 32.5 11.8 42.2 53.6 8.7 16.8 42.0 22.2 14.3 68.5 9.3 34.6 9.4 16.8 15.0 14.9 73.0 13.1 33.7 6.9 16.5 17.6 4.4 91.4 17.1 18.5 15.6 15.5 23.1 23.4 22.5 20.0 15.3 22.3 22.0 6.6 43.0 36.9 27.6 12.7 46.4 51.9 8.9 17.4 46.0 18.9 15.6 66.6 9.8 34.6 9.9 17.3 16.9 16.1 63.4 12.8 36.6 7.1 14.1 15.5 4.4 91.5 18.9 18.5 15.6 15.7 23.1 23.1 22.4 21.2 15.3 23.5 22.0 8.4 42.0 EPS (`) FY14E FY15E 19.4 27.5 0.1 13.5 16.4 11.2 70.5 25.6 30.5 2.7 16.5 4.2 27.6 37.8 21.8 9.5 29.2 63.4 31.4 30.0 72.0 29.0 25.7 11.4 9.0 10.5 24.9 91.9 37.3 21.0 130.3 14.8 54.7 5.9 40.4 35.8 11.4 25.6 48.5 24.1 1.2 18.7 17.0 12.8 87.8 27.5 27.5 3.2 17.0 5.1 33.2 45.5 23.5 11.4 39.1 61.9 33.3 38.7 80.0 26.3 27.4 13.2 7.8 13.8 29.3 101.7 44.7 23.8 147.5 16.6 60.7 7.6 52.7 43.0 15.2 25.8 PER (x) FY14E FY15E 24.8 9.7 216.5 7.5 7.5 10.5 12.4 9.0 4.6 13.4 7.8 15.4 6.3 10.4 4.6 3.7 2.8 5.2 10.5 9.3 11.7 9.9 10.4 10.8 6.6 19.1 11.2 28.7 20.0 18.3 18.7 5.5 43.9 16.8 16.9 23.7 36.7 22.5 9.9 11.1 11.4 5.4 7.2 9.2 10.0 8.4 5.1 11.4 7.5 12.8 5.3 8.6 4.3 3.1 2.1 5.3 9.9 7.2 10.5 10.9 9.7 9.4 7.6 14.5 9.5 26.0 16.7 16.2 16.5 4.9 39.5 13.0 13.0 19.8 27.5 22.3 P/BV (x) FY14E FY15E 1.1 3.5 0.1 1.2 1.4 0.6 1.3 1.2 0.3 0.8 1.6 0.7 0.5 1.0 0.4 0.2 0.2 1.1 1.5 1.4 1.2 3.2 2.1 1.8 1.0 5.8 2.4 4.0 4.2 2.9 4.5 0.6 10.3 2.0 4.3 5.8 3.9 7.5 1.0 2.6 0.1 1.0 1.2 0.6 1.1 1.1 0.3 0.7 1.5 0.6 0.5 0.9 0.3 0.2 0.2 0.9 1.4 1.2 1.1 2.9 1.8 1.6 0.9 4.4 1.9 4.0 3.5 2.5 3.6 0.5 10.2 1.8 3.3 4.6 3.4 5.8 RoE (%) FY14E FY15E 4.5 39.0 0.1 16.4 19.8 6.0 10.1 14.7 7.2 5.8 21.7 6.4 10.6 10.4 8.2 6.5 9.5 23.1 15.5 16.0 11.2 35.2 22.1 17.8 16.1 34.4 26.1 15.6 22.9 17.2 26.8 10.8 23.2 12.5 28.7 27.1 11.1 35.3 10.4 30.5 1.9 19.9 17.7 6.5 12.0 14.1 6.1 6.6 20.7 4.9 9.2 11.5 8.2 7.3 11.5 19.0 14.7 18.4 11.3 28.1 20.3 17.9 12.4 34.7 23.9 17.1 22.9 16.8 24.2 11.0 25.8 14.4 28.8 25.8 13.1 29.0 EV/Sales (x) FY14E FY15E 3.8 1.7 0.6 1.9 2.1 0.8 1.0 1.4 2.1 0.7 2.6 1.0 1.3 0.5 0.4 0.6 0.8 1.9 0.8 1.2 0.6 1.0 0.8 0.3 2.5 2.4 1.6 3.0 2.4 3.3 3.2 1.1 7.2 1.4 2.7 3.4 1.8 8.4 2.9 1.6 0.1 1.3 1.6 0.7 0.9 1.4 1.6 0.7 2.3 1.1 1.0 0.5 0.3 0.5 0.7 1.6 0.7 0.9 0.5 0.8 0.7 0.3 2.7 2.0 1.3 2.5 2.0 2.8 2.7 0.9 6.7 1.2 2.2 2.8 1.6 7.1
Reduce Neutral Accumulate Buy Buy Reduce Reduce Accumulate Buy Neutral Buy Sell Neutral Accumulate Buy Buy Buy Buy Neutral Accumulate Accumulate Neutral Neutral Neutral Buy
Neutral 200 Buy 279 Neutral 2,641 Buy 748 Buy 385 Buy 2,436 Buy 81 Neutral 2,400 Neutral 99 Buy 683 Accumulate 850 Neutral 419 Neutral 575
May 2011
12

Company Name Power GIPCL NTPC Real Estate DLF MLIFE Telecom Bharti Airtel Idea Cellular Rcom Others Abbott India* Bajaj Electricals Cera Sanitaryware Cravatex Finolex Cables Force Motors Goodyear India* Hitachi Honeywell Automation* IFB Agro ITD Cementation Jyothy Laboratories MRF Page Industries Relaxo Footwears Siyaram Silk Mills Styrolution ABS India* TAJ GVK Tata Sponge Iron TTK Healthcare Tree House TVS Srichakra United Spirits Vesuvius India* HSIL Reco CMP (`) 59 151 144 394 336 174 132 Target Price (`) 163 179 483 365 1,628 184 664 87 349 383 153 217 189 207 210 319 492 108 405 614 313 309 439 117 Mkt Cap (` cr) 892 124,177 25,717 1,609 134,453 57,819 27,297 3,167 1,603 742 62 1,081 380 820 292 2,106 131 164 2,944 7,148 5,383 1,100 236 694 339 448 402 874 224 36,703 819 651 Sales (` cr) FY14E FY15E 1,395 75,343 8,293 888 86,141 26,157 22,218 1,788 3,885 647 248 2,573 2,046 1,581 1,080 1,842 475 1,313 1,244 11,799 1,102 1,125 1,216 1,007 300 735 416 154 1,594 11,446 600 2,042 1,448 81,947 9,622 1,002 94,758 28,425 24,183 1,996 4,472 836 284 2,908 2,426 1,724 1,199 2,131 542 1,444 1,523 12,587 1,348 1,373 1,396 1,108 319 836 475 206 1,723 12,934 638 2,363 OPM (%) FY14E FY15E 31.9 23.5 36.5 27.0 32.3 31.3 33.3 12.5 4.0 13.5 6.5 10.2 3.6 8.9 8.9 5.8 10.2 10.6 13.6 14.1 20.3 11.1 10.8 8.3 35.8 14.7 4.8 54.1 6.0 12.0 20.1 14.6 32.5 23.9 36.1 29.9 32.2 31.3 33.7 12.7 5.8 13.4 7.2 10.2 4.3 8.7 9.1 6.0 10.7 11.2 13.9 13.5 20.2 12.6 11.0 8.7 36.2 16.2 6.5 54.9 6.0 12.0 19.4 14.8 EPS (`) FY14E FY15E 11.5 12.7 5.7 33.9 8.7 5.7 4.5 71.7 6.8 40.4 27.1 10.7 28.0 38.8 18.3 82.5 30.1 7.9 5.3 1,792.0 136.0 9.5 65.3 30.0 7.9 50.1 16.3 12.5 36.9 20.3 35.7 12.3 14.2 13.7 6.7 42.1 13.4 6.9 5.9 81.4 15.4 51.1 38.2 12.4 43.6 41.2 19.1 100.4 36.1 26.2 9.0 1,802.0 165.4 15.0 79.8 35.1 9.1 63.5 25.2 17.4 44.2 43.0 36.5 16.5 PER (x) FY14E FY15E 5.1 11.9 25.3 11.6 38.7 30.8 29.4 20.8 23.8 14.5 8.8 6.6 10.4 9.2 5.9 28.9 4.8 18.1 33.7 9.4 35.5 21.5 3.9 13.1 6.8 5.8 31.8 19.5 7.9 124.5 11.3 8.0 4.2 11.0 21.4 9.4 25.1 25.2 22.5 18.3 10.5 11.5 6.3 5.7 6.7 8.6 5.6 23.7 4.0 5.4 19.7 9.4 29.2 13.6 3.2 11.2 5.9 4.6 20.6 14.0 6.6 58.7 11.0 6.0 P/BV (x) FY14E FY15E 0.5 1.4 0.9 1.1 2.4 3.5 0.8 4.2 2.1 3.3 1.4 1.0 0.3 1.9 1.0 2.8 0.7 0.4 3.0 2.0 18.3 4.8 0.6 1.4 0.9 0.6 3.9 2.4 1.2 4.2 2.0 0.6 0.5 1.3 0.9 1.0 2.2 3.1 0.8 3.6 1.8 2.6 1.2 0.8 0.3 1.6 0.9 2.5 0.6 0.4 2.6 1.6 13.2 3.7 0.5 1.3 0.8 0.6 3.5 2.1 1.0 3.9 1.8 0.6 RoE (%) FY14E FY15E 10.4 12.3 3.7 9.9 6.5 11.5 2.7 21.7 8.8 25.4 15.7 15.0 3.1 23.0 19.2 10.1 15.8 2.2 10.6 23.5 59.8 24.2 18.0 11.5 13.9 11.5 12.6 12.2 15.5 4.4 19.4 7.5 11.7 12.4 4.1 11.2 9.2 12.3 3.4 21.2 17.3 25.6 18.5 14.8 4.6 20.6 17.0 11.2 16.2 7.2 14.1 19.2 52.6 30.5 18.7 12.2 14.4 13.2 18.0 15.0 16.3 6.9 17.1 9.4 EV/Sales (x) FY14E FY15E 0.8 2.4 5.2 2.4 2.2 2.4 3.0 1.5 0.4 1.1 0.4 0.3 0.2 0.3 0.4 1.0 0.2 0.5 2.5 0.8 5.0 1.3 0.4 0.7 1.4 0.1 0.8 5.5 0.2 3.5 1.2 0.8 0.6 2.3 4.3 2.2 1.9 2.2 2.6 1.3 0.4 0.9 0.4 0.3 0.2 0.3 0.3 0.9 0.2 0.5 2.0 0.7 4.1 1.0 0.4 0.6 1.2 0.0 0.7 3.9 0.2 3.1 1.0 0.7
Neutral Accumulate Buy Buy Accumulate Neutral Neutral
Accumulate 1,490 Accumulate 161 Accumulate 586 Neutral 239 Buy 71 Buy 291 Accumulate 355 Buy 108 Neutral 2,382 Buy 146 Buy 143 Buy 177 Neutral 16,854 Neutral 4,826 Accumulate 183 Buy 252 Buy 394 Buy 54 Buy 291 Buy 518 Buy 243 Accumulate 292 Neutral 2,526 Accumulate 404 Buy 99
Source: Company, Angel Research, Note: *December year end; #September year end; &October year end; ^June year end; Price as on November 22, 2013; Sesa Goa's numbers reflect the standalone Sesa Goa business only. We will revise our numbers once the consolidated entity Sesa- Sterlite is formed
May 2011
13
Disclaimer
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Ratings (Returns) :
Buy (> 15%) Reduce (-5% to -15%)
Accumulate (5% to 15%) Sell (< -15%)
Neutral (-5 to 5%)
September 2012
Please refer to important disclosures at the end of this report. 14
6th Floor, Ackruti Star, Central Road, MIDC, Andheri (E), Mumbai - 400 093. Tel: (022) 39357800
Research Team Fundamental: Sarabjit Kour Nangra Vaibhav Agrawal Bhavesh Chauhan Viral Shah V Srinivasan Yaresh Kothari Ankita Somani Sourabh Taparia Bhupali Gursale Vinay Rachh Amit Patil Twinkle Gosar Tejashwini Kumari Akshay Narang Harshal Patkar Nishant Sharma Technicals: Shardul Kulkarni Sameet Chavan Derivatives: Siddarth Bhamre Institutional Sales Team: Mayuresh Joshi Meenakshi Chavan Gaurang Tisani Production Team: Tejas Vahalia Dilip Patel Research Editor Production Incharge tejas.vahalia@angelbroking.com dilipm.patel@angelbroking.com VP - Institutional Sales Dealer Dealer mayuresh.joshi@angelbroking.com meenakshis.chavan@angelbroking.com gaurangp.tisani@angelbroking.com Head - Derivatives siddarth.bhamre@angelbroking.com Sr. Technical Analyst Technical Analyst shardul.kulkarni@angelbroking.com sameet.chavan@angelbroking.com VP-Research, Pharmaceutical VP-Research, Banking Sr. Analyst (Metals & Mining) Sr. Analyst (Infrastructure) Analyst (Cement, FMCG) Analyst (Automobile) Analyst (IT, Telecom) Analyst (Banking) Economist Research Associate Research Associate Research Associate Research Associate Research Associate Research Associate Research Associate sarabjit@angelbroking.com vaibhav.agrawal@angelbroking.com bhaveshu.chauhan@angelbroking.com viralk.shah@angelbroking.com v.srinivasan@angelbroking.com yareshb.kothari@angelbroking.com ankita.somani@angelbroking.com Sourabh.taparia@angelbroking.com bhupali.gursale@angelbroking.com vinay.rachh@angelbroking.com amit.patil@angelbroking.com gosar.twinkle@angelbroking.com tejashwini.kumari@angelbroking.com akshay.narang@angelbroking.com harshal.patkar@angelbroking.com nishantj.sharma@angelbroking.com
September 2012
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2QFY2014ResultReview November2013

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2QFY2014ResultReview November2013

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2QFY2014 Result Review

INR aids earnings performance

External sector in better shape, macros poised for a recovery

Outlook and Valuation

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