#Narnolia IEA Report: 15th Dec, 2016

IEA Report
15th Dec 2016

GODREJCP
"BUY"
15th Dec 2016
Management is rationalizing ad expenses and has increased home insecticide products prices by 2% in the late September 2016 to counter upward
movement of input prices. Going forward we expect relatively less impact on GODREJCP compared to other FMCG players, as company gets approx
46% of its revenue from international market. Secondly companys proactive initiatives of cutting promotions and increasing price of the products
gives us confidence on margin side. Demonetization will help company to increase market share as compared to regional players which have more
dependence on wholesale channels of distribution. Considering lesser dependence of company in Indian business, proactive approach towards
maintaining the margin and relatively less penetrated product portfolio, we have positive view on this stock and we maintain `BUY with target
price of Rs 1760. .................................... ( Page : 2-3)
COALINDIA
"NEUTRAL"
14th Dec 2016
Drop in realization along with persistent poor offtake and the risk of continued weakness in e-auction premium may keep Coal Indias earnings
subdued for FY2017E. Rising cost base with negative operating leverage leads to earning downgrade.
Earnings risk from weak volume growth and the coming wage revision keep us cautious on CIL.
As far as Q2FY17 result is concern stock price may get volatile, but going ahead attractive dividend yield will support price. Considering all these
things we downgrade our earning outlook for COALINDIA and change our rating to NEUTRAL (with a TP of Rs.310) from BUY.
................................................ ( Page : 4-8)
TATAMOTORS
"BUY"
13th Dec 2016
Going ahead, we expect that the current demonetization issue may be hampering the automotive industry for next couple of months. But we are
hopeful about the recovery very soon due to strong infrastructure activity and new emission norms in the CV space which will result in pre-buying
in 4QFY17. The company has plans to launch new models in the Passenger Vehicle segment in 2HFY17.The management has started restructuring of
its passenger vehicle segment by increasing its supplier base and increasing operational efficiencies by various cost cutting initiatives. New model
launches in Jaguar and Land Rover brands will provide further boost in the volumes of JLR. Based on the above arguments, we recommend 'BUY' on
this stock with a target price of Rs.530, an upside of 17%. ........................................................ ( Page :9-11)
CADILAHC
"Book Profit"
12th Dec 2016
Cadila Healthcare has finished remediation process at Moraiya facility, and full resolution is expected in few months. Despite ongoing pricing
pressure, US would remain a key growth driver on the back of proposed launches of 12-15 products in FY17.Based on the current fundamentals our
target for cadila is Rs.415 and we recommend to book profit around Rs. 415. ............................................... ( Page : 12-14)
BLUESTARCO
"BUY"
9th Dec 2016
Going forward Q3FY17 and Q4FY17 sales will be impacted due to scarcity of new currency. As per the management H2FY17 will have some
challenges because Room-Air conditioners buyers are first time buyers. Company is not seeing any behavioral change in demand from real estate
sector yet and expected things to normalized probably by March. On the positive side the order book is up by 15% over last year and this is good
sign for the future growth. The Company intends to continue to make investments in manufacturing, marketing, brand building, product
development as well as human resources in the next few quarters in order to capitalise on the imminent growth opportunities.We have change our
Sales and PAT estimates due to demonetization but in a long term point of view we are optimistic about the stock hence we recommend BUY to
the stock at a revised target price of Rs 535. ................................. ( Page : 13-16)
"BUY"
8th Dec 2016
PRAJIND
Praj reported weak set of the numbers in Q2FY17 but considering the government emphasis on reducing import bill of oil and produce more
domestically coupled with focus on higher blending in a scenario where crude prices are going high, may auger well for the company as praj is the
prominent and only Indian company in 2G technology based Boi-Ethanol. We find this correction healthy and consider it a good entry point around
Rs.75 for medium to long term investors. We remain positive with a target price of Rs. 88 . ............................................. ( Page : 17-19)
"SUBSCRIBE"
Lauras Labs Ltd
7th Dec 2016
Company strategic and early investments in R&D and manufacturing infrastructure has enabled to become one of the leading suppliers of APIs in
the ARV therapeutic area to reap long term benefits on account of a robust business model, healthy balance sheet, strong business prospects in
terms of multiple levers in place for growth and ability of the management to leverage its capabilities in a bid to cultivate its business. At the higher
end of the price band of Rs 428, the IPO is valued at 12.6x EV/EBITDA and 34.1x P/E on FY16 basis. We believe the company is being offered at
upper band of its valuations. We maintain "SUBCRIBE" on this IPO. .......................................... ( Page : 20 -21)
Narnolia Securities Ltd
IEA Edition No.-
905
BUY
Godrejcp
15th Dec 2016
Company Update
CMP
1455
Target Price
1760
Previous Target Price
1760
Upside
21%
Change from Previous
Market Data
BSE Code
532424
NSE Symbol
GODREJCP
1710/1120
49,554
266
8182
52wk Range H/L

Mkt Capital (Rs Cr)
Av. Volume(,000)
Nifty
Stock Performance
1M
3M
12M
Absolute
0.1
-10.2
16.7
Rel.to Nifty
1.5
-4.1
10.2
Share Holding Pattern-%

2QFY17
1QFY17 4QFY16
Promoters
63.3
63.3
63.3
Public
36.7
36.7
36.7
Others
0.0
0.0
0.0
100.0
100.0
100.0
Total
The company has indicated that due to demonetization liquidity in market is

stressed .The company is witnessing pressure at wholesale level where
maximum cash transactions are involved. The company gets ~40-45%
sales through wholesale network which is impacted by demonetization. On
the positive side, it is getting upward traction from modern trade and ecommerce which is growing in double digits.To counter the effect of
demonetization, GODREJCP is expanding its direct reach and extended the
credit terms to different channel partners. Management is rationalizing ad
expenses and has increased home insecticide products prices by 2% in the
late September 2016 to counter upward movement of input prices. Going
forward we expect relatively less impact on GODREJCP compared to other
FMCG players, as company gets approx 46% of its revenue from
international market. Secondly companys proactive initiatives of cutting
promotions and increasing price of the products gives us confidence on
margin side. Demonetization will help company to increase market share as
compared to regional players which have more dependence on wholesale
channels of distribution. Considering lesser dependence of company in
Indian business, proactive approach towards maintaining the margin and
relatively less penetrated product portfolio, we have positive view on this
stock and we maintain `BUY with target price of Rs 1760.
Q2FY17_Result Update
Sales grew by ~11% YoY to Rs 2439 Cr led by 18%growth in domestic

Household Insecticides business. Domestic Soap business declined by
~10% YoY to Rs 377 Cr and hair color business showed flat growth with Rs.
139 Cr of sales. International business grew by ~16% YoY to Rs.1120 Cr.
Gross margin improved by 94 Bps YoY to ~57% due to declined in input
prices. EBITDA margin improved by 43 Bps YoY to ~19%.PAT margin
improved by 296 Bps YoY to ~13% led by lower exceptional item(in 2QFY17
(Rs 0.47 cr Vs Rs77.51 cr in 2QFY17). PAT grew by 44% YoY to Rs 318 Cr.
Concall Highlights(Demonetization )
Company Vs NIFTY
150
GODREJCP
NIFTY
140
130
120
110
Demonetization: liquidity has hit. Situation is improving.

Expects modern trade and e-commerce to do well going forward.
The company has withdrawn consumer offers which in turn led to effective
price increase in 3QFY17.
Hair color is more impacted than home insecticide.
Saving from Project pie in India is estimated to be Rs 100 cr in FY17.
Retail is improving but wholesale is a question mark.
100
90
Financials
80
Sales
EBITDA
Net Profit
Rajeev Anand
EPS
rajeev.anand@narnolia.com
ROE
FY13
6416
982
796
23
24%
FY14
7602
1150
760
22
20%

Please refer to the Disclaimers at the end of this Report
FY15
8276
1365
907
27
21%
FY16
8968
1639
1119
33
22%
Rs,Cr
FY17E
10258
2007
1406
41
23%
2
Financials Snap Shot
Net Revenue
Other Income
Total Revenue
COGS
GPM
Other Expenses
EBITDA
EBITDA Margin (%)
Depreciation
EBIT
Interest
PBT
Tax
Tax Rate (%)
Reported PAT
Dividend Paid
No. of Shares
FY14
7602
63
7665
3555
53.2%
2149
1150
15%
82
1068
107
1024
210
21%
760
199
34.0
INCOME STATEMENT
FY15
FY16
8276
8968
92
67
8368
9035
3842
3846
53.6%
57.1%
2293
2523
1365
1639
16%
18%
91
103
1275
1536
100
100
1266
1503
272
317
22%
21%
907
1119
211
225
34.0
34.0
Share Capital
Reserves
Net Worth
Long term Debt
Short term Debt
Deferred Tax
Capital Employed
Net Fixed Assets
Capital WIP
Debtors
Cash & Bank Balances
Trade payables
Total Provisions
Net Current Assets
Total Assets
FY14
34
3741
3775
1590
111
5
5366
1736
167
711
705
1234
80
652
8325
BALANCE SHEET
FY15
FY16
34
34
4277
5064
4311
5098
2023
2449
147
182
3
2
6334
7547
1732
1780
225
41
805
1118
894
746
1087
1037
124
100
230
624
9142
10153
FY17E
10258
61
10319
4233
58.7%
2253
2007
20%
137
1870
135
1796
377
21%
1406
235
34.0
FY17E
34
6178
6212
4227
207
2
10439
3750
0
1447
996
1180
115
1244
13229
EPS
Book Value
DPS
Payout (incl. Div. Tax.)
Valuation(x)
P/E
Price / Book Value
Dividend Yield (%)
Profitability Ratios
RoE
RoCE
Turnover Ratios
Asset Turnover (x)
Debtors (No. of Days)
Inventory (No. of Days)
Creditors (No. of Days)
Net Debt/Equity (x)
OP/(Loss) before Tax

Depreciation
Direct Taxes Paid
O.Profit before WC changes
CF from Op. Activity
Non Current investment
Capex
CF from Inv. Activity
Repay of LT Borrowings
Interest Paid
Divd Paid (incl Tax)
CF from Fin. Activity
Inc/(Dec) in Cash
Add: Opening Balance
Closing Balance

Please refer to the Disclaimers at the end of this Report
FY14
22.3
110.9
5.8
26%
RATIOS
FY15
FY16
26.6
32.9
126.6
149.7
6.2
6.6
23%
20%
FY17E
41.3
182.5
6.9
17%
38.2
7.7
0.7%
30.2
6.4
0.8%
41
9.0
0.5%
39
8.8
0.4%
20%
20%
21%
20%
22%
20%
23%
18%
0.9
34
111
59
0.4
0.9
35
102
48
0.5
0.9
46
124
42
0.5
0.8
52
130
42
0.7
CASH FLOW STATEMENT

FY14
FY15
FY16 FY17E
896
1024
1266
1503
77
82
91
103
-207
-238
-257
-317
1009
1162
1400
1706
820
1129
1005
711
0
34
34
34
-264
-133
-190
455
-865.2
-494.8 -1213.8 148.0
-84
-113
-119
-100
-188
-199
-211
-225
282
-633
-12
-325
237
1
-221
534
388
624
625
894
624
625
404
1428
625
404
561
996
Neutral
COAL INDIA LTD.
14-Dec-16
Rising cost1and poor offtake leads to rating change from BUY to Neutral.
Company Update
CMP
306
Target Price
310
370
Upside
17%
-16%
Market Data
BSE Code
533278
NSE Symbol
COALINDIA
350/272
189,791
176.7
52wk Range H/L

Mkt Capital (Rs Cr)
Av. Volume(,000)
Nifty
8221
Stock Performance
1Month
1Year
YTD
Absolute
-3.4
-6.8
1.5
Rel.to Nifty
-3.4
-13.7
-9.5

Q2FY17
Q1FY17 Q4FY16
Promoter
79.7
79.7
79.7
Public
20.4
20.4
20.4
100.0
100.0
100.0
Others
Total
Company Vs NIFTY
120
COALINDIA
NIFTY
115
110
105
100
95
90
85
Dec-16
Oct-16
Nov-16
Sep-16
Jul-16
Aug-16
Jun-16
Apr-16
May-16
Mar-16
Jan-16
Feb-16
Dec-15
80
Bhabani Prasad Dehury
Drop in realization along with persistent poor offtake and the risk of continued
weakness in e-auction premium may keep Coal Indias earnings subdued for
FY2017E. Rising cost base with negative operating leverage leads to earning
downgrade.
Earnings risk from weak volume growth and the coming wage revision keep us
cautious on CIL.
As far as Q2FY17 result is concern stock price may get volatile, but going ahead
attractive dividend yield will support price. Considering all these things we
downgrade our earning outlook for COALINDIA and change our rating to
NEUTRAL (with a TP of Rs.310) from BUY.
CIL Q2FY17 net takes a hit.
Coal India, reported lowest ever profit since listing on account of higher
employee cost and lower realisation. Net profit for Q2FY17 dropped 77.4 % to
Rs. 600.4 Cr from Rs. 2,654.4Cr in Q2FY16. Revenue fell 7.7 % to Rs. 15,645Cr
from Rs. 16,957.6Cr in Q2FY16.
Earnings before interest, tax and depreciation fell 78.2 % to Rs. 742.6 Cr, while
the EBITDA% stood at 4.6 % for Q2FY16. Coalindia revises salaries of over
3,00,000 employees every five years, with the last revision taking effect from
July 2011. In Q2Y17 the effect of salary hikes increased the employee cost by
14.6 % to Rs. 8,406.9 Cr.
Coal production in Q2FY17 fell 3.5 % to 104.41 mMT, while off take fell 5 % to
115.93 mMT. Company is already ~ 43 million tonnes short of its sales target in
the first nine months of FY17, is likely to miss the years target by a large
margin unless power demand picks up drastically. The company continues to
face subdued demand from power producers. Company able to sold ~16 % of
its production in auction. These sales are usually at a premium to the contract
prices, which makes value addition in EBIDTA. Unless the demand for coal
improved, especially from the power sector, actual production could deviate
from the projected path set by the miner.
Rs,Cr
Financials
Q1FY17
Q4FY16
Q1FY16
QoQ
YoY
Sales
16213
18422
17490
-12.0%
-7.3%
EBITDA
Net Profit
EBIDTA/t
EBIDTA %
EBIT%
PAT %
Offtake
Realization
743
600
64
5%
0%
4%
116
1399
4255
3130
319
23%
19%
17%
133
1383
3008
2544
247
17%
14%
15%
122
1434
-82.5%
-80.8%
-79.9%
(1851Bps)
(1916Bps)
(1328 Bps)
-13.0%
1.2%
-75.3%
-76.4%
-74.0%
(1262Bps)
(1353Bps)
(1084Bps)
-5.0%
-2.4%
bhabani.dehury@narnolia.com
Narnolia Securities Ltd,
Please refer to the Disclaimers at the end of this Report.
COALINDIA
A steep decline in e-auction prices dragged the profit lower
A steep decline in e-auction prices dragged the profit lower. Earlier recommendation was also based on one of our arguments that the
premium of E-auction prices are bottomed out, though the premium had inched up a bit in Q3FY17 but compared to a year ago it is far
below. Coal India earned Rs. 1356 a tonne on auction sales, compared with Rs.2000 a tonne a year ago. Average price for coal sold
through term contracts stood at Rs. 1,289 per tonne in Q2FY17.
Average realisation of coal in H1FY17 from FSAs stood at Rs 1,264 per MT. Realisation for coal from e-auctions during H1FY17 was Rs
1,463 per tonne, lower than the average e-auction realisation in Q1FY17 at Rs 1,570 per tonne.
After H1FY17 : Coal stock now is down to 20 days which is earlier at 28 Days
During the first half of 2016-17 coal offtake declined about 1 per cent against the previous corresponding period on the back of adequate
coal stacked at power plants and demand growing at a pace less than anticipated. In fact, in FY17, there was cut down in coal production
so that the coal does not catch fire at the pit heads. Management tried to reduce inventory at pitheads. Coal stock now is down to 20
days which is earlier at 28 Days.
Production growth in H1FY17 was flat though the company achieved 90 per cent of its targets. Marginal fall in sales, achieved 88 per cent
of its sales target in H1FY17. CIL managed to produce 230 MT coal and sold around 249 MT. Coal stock now is down to 20 days which is
earlier at 28 Days.
Coal production in Q2FY17 fell 3.5 % to 104.41 mMT, while off take fell 5 % to 115.93 mMT. Company is already ~ 43 million tonnes short
of its sales target in the first nine months of FY17, is likely to miss the years target by a large margin unless power demand picks up
drastically. Unless the demand for coal improved, especially from the power sector, actual production could deviate from the projected
path set by the miner.
About The company
Coal India Limited (CIL) as an organized state owned coal mining corporate came into being in November 1975 with the government
taking over private coal mines. With a modest production of 79 Million Tonnes (MTs) at the year of its inception CIL today is the single
largest coal producer in the world. Operating through 81 mining areas CIL is an apex body with 7 wholly owned coal producing
subsidiaries and 1 mine planning and consultancy company spread over 8 provincial states of India. CIL also fully owns a mining company
in Mozambique christened as 'Coal India Africana Limitada'.
CIL has eight fully owned Indian subsidiary companies (direct):
Eastern Coalfields Limited (ECL),
Bharat Coking Coal Limited (BCCL),
Central Coalfields Limited (CCL),
Western Coalfields Limited (WCL),
South Eastern Coalfields Limited (SECL),
Northern Coalfields Limited (NCL),
Mahanadi Coalfields Limited (MCL) and
Central Mine Planning & Design Institute Limited (CMPDIL).
CIL has a foreign subsidiary in Mozambique
Coal India Africana Limitada (CIAL).
Eastern Coalfields Limited - 62 MTs;

Bharat Coking Coal Limited - 53 MTs;
Central Coalfields Limited - 133 MTs;
Northern Coalfields Limited - 110 MTs;
Western Coalfields Limited - 60 MTs;
South Eastern Coalfields Limited - 240 MTs;
Mahanadi Coalfields Limited - 250 MTs.

COALINDIA
Brief Highlights Q4FY16 Results :
Net Sales from Operations
Other Income
Total Income
COGS
Employee Benefit Expenses
Power & Fuel
Contractual Expenses
Other Expenses
Expenditure
EBITDA
Depreciation
EBIT
Interest
PROFIT BEFORE TAX
Tax
PROFIT AFTER TAX
Margin %
EBIDTA %
EBIT %
PAT %
Cost Calculation Per ton Analysis
COGS Cost (Rs/Ton)
Employee Cost (Rs/Ton)
Power & Fuel Cost (Rs/Ton)
Contractual Expenses in Rs /Ton
Other Expenses in Rs /Ton
Q2FY16
17490
1431
18921
2356
7530
654
2254
880
14481
3008
586
2422
2
3852
1333
2544
Q2FY16
17.2%
13.8%
14.5%
Q2FY16
193
617
54
185
72
Q2FY16
Coal offtake Volume in mMT

Realization per ton in Rs.
EBIDTA Per ton in Rs
Performance Segment Wise
122.0
1434
247
1QFY15
Q3FY16
19599
1354
20953
1218
7354
618
2962
864
14780
4820
628
4192
3
5543
1858
3718
Q3FY16
24.6%
21.4%
19.0%
Q3FY16
88
533
45
215
63
Q3FY16
138.0
1420
349
2QFY15
Q4FY16
21403
1496
22899
-115
7590
643
3423
1439
15869
5534
695
4839
12
6323
2081
4248
Q4FY16
25.9%
22.6%
19.8%
Q4FY16
-8
531
45
239
101
Q4FY16
143.0
1497
387
3QFY15
Q1FY17
Q2FY17
18422
1131
19552
1491
7647
623
2801
1211
14167
4255
667
3588
89
4629
1564
3130
Q1FY17
16213
1413
17625
2206
8407
652
2367
1168
15470
743
692
51
97
1366
766
600
Q2FY17
23.1%
19.5%
17.0%
Q1FY17
Q2FY17
133.2
1383
319
4QFY15
QoQ
QoQ
190
726
56
204
101
Q2FY17
115.9
1399
64
1QFY16
YoY
-12.0%
-7.3%
24.9%
-1.3%
-9.9%
-6.9%
48.0%
-6.3%
9.9%
11.6%
4.7%
-0.3%
-15.5%
5.0%
-3.5%
32.7%
9.2%
6.8%
-82.5%
-75.3%
3.7%
18.0%
-98.6%
-97.9%
9.0% 6281.6%
-70.5%
-64.5%
-51.0%
-42.5%
-80.8%
-76.4%
4.6% (1851Bps)
0.3% (1916Bps)
3.7% (1328 Bps)
112
574
47
210
91
Q1FY17
QoQ
70.1%
26.4%
20.4%
-2.8%
10.9%
YoY
(1262Bps)
(1353Bps)
(1084Bps)
YoY
-1.4%
17.5%
5.0%
10.5%
39.7%
QoQ
YoY
-13.0%
1.2%
-79.9%
-5.0%
-2.4%
-74.0%
2QFY16
3QFY16
FY15
74120
6571
80691
6726
29874
2347
8513
3083
56785
17335
2320
15016
7
21579
7857
13727
FY15
23.4%
20.3%
18.5%
FY15
894
289
1129
1197
888
FY15
45
5374
977
4QFY16
FY16
78010
5728
83738
5638
29660
2504
11129
3934
59704
18306
2466
15840
21
21548
7315
14274
FY16
23.5%
20.3%
18.3%
FY16
909
296
940
1227
870
FY16
49
5247
1004
1QFY17
YoY
4.9%
-37.6%
4.3%
9.3%
10.3%
-10.5%
10.1%
4.3%
3.7%
10.5%
13.7%
9.3%
-4.5%
6.5%
1.0%
9.0%
YoY
8 Bps
5 Bps
(22 Bps)
YoY
1.7%
2.6%
-16.7%
2.4%
-2.0%
YoY
7.5%
-2.4%
2.8%
2QFY17
Regulated (FSA)
E-auction
Washed Coal
Own Consumption
Sales/Offtake volume (m Tons)
99.2
16.8
3.0
0.7
119.7
96.1
10.6
2.8
0.8
110.3
115.0
5.6
3.0
1.0
124.6
115.7
13.9
3.2
1.0
133.8
109.0
16.0
3.4
1.5
129.9
103.0
14.7
3.1
0.9
121.7
116.4
15.2
3.7
2.0
137.3
119.3
20.4
4.2
1.2
145.1
107.7
20.5
3.8
1.1
133.1
93.0
19.0
3.0
0.7
115.7
Regulated (FSA)
E-auction
Washed Coal
Own Consumption
Blended Realisation (Rs/ton)
1320
2246
2393
3435
1260
2496
2442
3133
1295
3134
2620
3397
1422
2386
1972
1741
1318
2184
2229
3324
1294
1788
2328
2888
1277
1866
2369
2030
1350
1648
2318
2774
1239
1570
2555
2563
1292
1348
2788
2945
(Source: Company/Eastwind)

COALINDIA
Coal Production and Offtake
180
160
140
120
100
80
60
40
20
0
115
103
Coal Production in MT
Coal Offtake in MT
163
152
144
143
143
138
135
133
132
130
129
127
126
125
122
121
120
119
117
113
110
109
108
108
102
98
Margin%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
EBIDTA %
EBIT %
PAT %
0.0%
Segment wise revenue

25000
20000
Own Consumption Revenue

E-auction Revenue
Washed Coal Revenue

Regulated (FSA) Revenue
15000
10000
5000
0
Regulated % Contribution
E-auction % Contribution
Washed Coal % Contribution
Own Consumption % Contribution
Sales contribution by segments
Q3FY15
92.3%
4.5%
2.4%
0.8%
Q4FY15
85.9%
10.3%
2.4%
0.7%
Q1FY16
84.2%
12.4%
2.6%
1.2%
2QFY16
84.4%
12.0%
2.5%
0.7%
3QFY16
84.3%
11.0%
2.7%
1.4%

4QFY16
82.2%
14.1%
2.9%
0.8%
1QFY17
80.9%
15.4%
2.9%
0.8%
2QFY17
80.4%
16.4%
2.6%
0.6%
7

INCOME STATEMENT
RATIOS
P/L
Ratios
FY14
FY15
FY16
FY17E
FY14
FY15
FY16
FY17E
Revenue from Operations (Net)
68810
74120
78010
71530
Earnings Per Share
24
22
23
18
Other Income
8969
6571
5728
5368
Book Value per share
67
64
54
51
Total Revenue
77779
80691
83738
76898
DPS
28.6
28.6
27.4
17.0
COGS
7115
6726
5638
4904
139.9% 154.0% 141.8% 112.3%
Gross Margin %
90%
91%
93%
93%
Valuation(x)
Expenditure
52847
56785
59704
55699
P/E
12.0
16.7
13.6
17.3
EBITDA
15963
17335
18306
15830
P/BV
4.3
5.7
5.7
6.0
EBIDTA %
23%
23%
23%
22%
Dividend Yield
9.9%
7.9%
8.9%
5.5%
Depreciation, Amortisation and
1996
Impairment
2320 Expenses
2466
2503
EBIT
13967
15016
15840
13327
Return on Equity
36%
34%
42%
34%
Finance Costs
58
7
21
380
Return on capital employed33%
37%
46%
41%
PROFIT BEFORE TAX
22878
21579
21548
18316
Turnover Ratios
TOTAL TAX
7768
7857
7315
6693
Asset Turnover
0.7
0.7
0.7
0.7
Tax % to PBT
34%
36%
34%
37%
Debtor/Receivable Days
44
42
54
44
PROFIT AFTER TAX FOR THE 15112
YEAR
13727
14274
11184
Inventory Days
286
336
492
492
Total Dividend
21143
21143
20247
12562
Payable Days
4
5
5
5
No Of Share
632
632
632
632
Debt Equity Ratio
0.00
0.01
0.04
0.01
CMP
288
363
307
307
B/S
FY14
Share capital
6316
Reserves and surplus
36088
Shareholders' funds
42404
Long-term borrowings
171
Short-term borrowings
0
Trade payables
805
Long Term Provisions
33639
Total Liabilities
104242
Fixed assets (Total )
19100
Inventories
5568
Trade receivables
8241
Cash and bank balances
52390
Short-term loans and advances
6596
Current investments
2587
Total Assets
104242
BALANCE SHEET
FY15
FY16
6316
34037
40353
202
200
921
37499
110541
21274
6184
8522
53093
8827
1850
110541
6316
27581
33898
263
929
979
40166
110220
24255
7595
11464
38313
8279
1940
110220
FY17E
6316
26203
32520
230
220
980
44182
109708
26355
6606
8623
40330
7591
1895
109708
C/F
CASH FLOW STATEMENT

FY14
FY15
FY16
FY17E
Profit before tax

22880 21584 21548 18316
Depreciation / Impairment of
1996
fixed assets
2322
2466
2503
Income Tax Paid/Refund -8826
-9572
-7315
-6693
Operating profit before working
23107capital
23305
changes
29692 22561
Net cash flow from operating
14525
activities
14382 18228 20774
Purchase of Fixed Assets -4116
-4901
-4724
-3125
Change in investments
-1380
961
-90
45
Net cash flow from investing8580
activities894
-4812
-3156
Repayment of Borrowings -1263
193
790
-742
Interest & Finance cost pertaining
-58 to Financing
-7
Activities
-21
-380
Dividend & Dividend Tax -24243 -15596 -20247 -12562
Net cash flow from financing
-25350
activities
-15026 -19478 -13684
Net increase/ (-) decrease in
-2246
cash and 250
cash equivalents
-6062
3933
Cash and cash equivalents at
11685
the beginning
9439 of the
53093
year 38313
Cash and cash equivalents at
9439
the end 9689
of the year
47031 42246

BUY
TATA MOTORS LTD
13-Dec-16
Result Update
CMP
454
Target Price
530

Upside
17%
Market Data
BSE Code
500570
NSE Symbol
TATAMOTORS
52wk Range H/L
599/266
Mkt Capital (Rs Cr)
130,662
Av. Volume
530992
Nifty
8,171
1Month
1Year
YTD
Absolute
-10.4
-18.0
16.8
Rel.to Nifty
-8.9
-11.7
10.4
Promoter
Public
Others
Total
4QFY16
33.0
33.0
33.0
67.0
-100.0
67.0
-100.0
67.0
-100.0
Company Vs NIFTY
TATAMOTORS
Gross Margin improved by 190 bps due to soft commodity prices and
favourable product mix.
Company reported net profit of Rs.848 crore in 2QFY17 vs net loss of

Rs.1740 crore in the same quarter last year.

2QFY17 1QFY17
Result Highlights
EBITDA Margin contracted by 90 bps during the quarter due to higher other
expenses. Higher advertising & promotion expenses on new and awaiting
launches, Forex impact and one time provision of customer quality program
led to increase in other expenses.
Stock Performance
150
Tata Motors posted a growth of 7% YoY in the net revenue to Rs.65900

crore in 2QFY17. Passenger vehicles volume grew by 23% YoY due to
higher sales of Tiago, which has a waiting period of 8 to 12 weeks.
Commercial vehicle segment remained sluggish during the quarter due to
heavy rain and freight issue and posted 1% growth YoY. Jaguar and Land
Rover sales volumes were up by 84% and 15% respectively on account of
low priced model launches in both the brands during the quarter. Recently
launched F-Pace and Evoque convertible have received well response
across regions and XF long wheel base launched in China have also shown
strong volumes during the quarter. EBITDA Margin was declined by 110 bps
to 9.5% in 2QFY17 due to adverse foreign exchange impact of GBP274 mn.
NIFTY
140
130
Outlook
Going ahead, we expect that the current demonetization issue may be
hampering the automotive industry for next couple of months. But we are
hopeful about the recovery very soon due to strong infrastructure activity and
new emission norms in the CV space which will result in pre-buying in
4QFY17. The company has plans to launch new models in the Passenger
Vehicle segment in 2HFY17.The management has started restructuring of its
passenger vehicle segment by increasing its supplier base and increasing
operational efficiencies by various cost cutting initiatives. New model
launches in Jaguar and Land Rover brands will provide further boost in the
volumes of JLR. Based on the above arguments, we recommend 'BUY' on
this stock with a target price of Rs.530, an upside of 17%.
120
110
Rs. In crore
100
Financials
2QFY17
1QFY17
2QFY16
QoQ
YoY
90
Sales
EBITDA
Net Profit
EBIDTA%
PAT %
65900
6283
848
9.5%
1.3%
65895
7613
2260
11.6%
3.4%
61524
6519
-1740
10.6%
-2.8%
0%
-17%
-62%
7%
-4%
-149%
Dec-16
Nov-16
Oct-16
Sep-16
Jul-16
Aug-16
Jun-16
May-16
Apr-16
Mar-16
Jan-16
Feb-16
Dec-15
80
Naveen Kumar Dubey
naveen.dubey@narnolia.com
(Source: Company/Eastwind)
TATAMOTORS
Investment Argument
Strong Product Pipeline- Tata Motors have strong pipeline of new launches going ahead. New launches in India business
include Nexon and Hexa SUVs in FY17. On the JLR side New Land Rover Discovery is expected to launch in the 4QFY17, mid-size
Range Rover is expected to launch in 2QFY18 and Range Rover Sport expected launch in 4QFY18. These launches will make
Land Rover portfolio even stronger. JLR contributes 80% of the total revenue.
Restructuring of Passenger Vehicle segment- The management has started restructuring its passenger vehicle segment.
Earlier, not having a robust supplier base has cost the company in terms of production losses when parts did not reach factories on
time or did not arrive at all. So the company is now working on making its supplier base strong. The management is also working on
various cost cutting intiatives to improve operational efficiency of India Business.
Increasing Infrastructure activity and BS-IV norms to drive volumes- Being the largest CV player in the country, Tata Motors
is all set to take advantage of the new emission norms. Indian Automobile sector is upgrading itself to BS-IV from 1st April 2017,
which will be further upgraded to BS-VI by 2020. So we assume pre-buying to happen in the 4QFY17.
Exports and Defence future growth drivers - Export growth in FY17 is expected to be in the range of 20-25 percent and over
the next couple of years the mangement aims to take the export contribution to the total CV revenue to about 25%. Company
continues to have a good pipeline of defence orders both which have been received as well as expected.
Expanding presence in China- China looks a sweet spot for JLR in SUV space. The company has started production of Land
Rover and Range Rover models there through Cherry JV. Sales volume have also improved from 2700 units in November 2015 to
6000 units in November 2016. Manufacturing these models in China may result in low cost of production for the company.
Management Highlight
M&HCV segment volume growth in single digit for full year.
Buses and LCV segment will continue their positive growth trend for the rest of the year.
Exports growth in the range of 20-25%
Export contribution to the total CV revenue to about 25% in next couple of years.
Company continues to have a good pipeline of defence orders both which have been received as well as expected.
The manegement aims to capture more than 60% market share in next 2 years in 15 tons and above.
China joint venture was profitable in the quarter, declared its first dividend, which will mostly be reinvested back into the joint
venture.
The all-new XF Long wheel base that has been launched in the China market. Production has started and we look forward to
ramping up over the next couple of quarters.
50% of raw material cost is Euro denominated. Depreciation in GBP will have negative impact.
Production of XE has shifted to castle bromwich from Solihull and this will free up more capacity at Solihull to produce F-Pace.
XE,XF and F-Pace share the same plateform.
The new discovery would be launched in 4QFY17.
Capex less than GBP 3.75 billion.
Rs.3500 to 4000 crore for research and new product development in FY17 for India business.
The company will be increasing prices of its passenger vehicles starting from Rs.5000 upto Rs. 25000, depending on the model,
effective from January 1,2017.
Key Risks
80% revenue of the company comes from exports and any adverse movement in currency may impact margins directly.
50% of raw material is Euro denominated and depreciation of GBP may have negative impact.
10
TATAMOTORS
FY14
Revenue(Net of Excise Duty) 232,834
Other Income
829
Total Revenue
233,662
COGS
143,586
GPM
38%
Other Expenses
43,826
EBITDA
34,838
EBITDA Margin (%)
15%
Depreciation
11,078
EBIT
23,760
Interest
4,734
PBT
19,854
Tax
4,765
Tax Rate (%)
24%
Reported PAT
13,991
Dividend Paid
640
No. of Shares
274
Share Capital
Reserves
Net Worth
Long term Debt
Short term Debt
Deferred Tax
Total Capital Employed
Net Fixed Assets
Capital WIP
Debtors
Trade payables
Total Provisions
Net Current Assets
Total Assets
FY14
644
64,960
65,603
45,259
9,696
1,572
110,862
97,375
10,137
10,574
29,712
57,316
20,161
13,185
219,998

INCOME STATEMENT
FY15
FY16
FY17E
262,796 275,561 283,390
EPS
899
982
1,107
Book Value
263,695 276,543 284,497
DPS
159,920 162,419 166,620
39%
41%
41% Valuation(x)
50,618
60,425
68,337
P/E
39,239
36,756
32,818
Price / Book Value
15%
13%
12% Dividend Yield (%)
13,389
17,014
20,668
25,850
19,742
12,150
RoE
4,861
4,623
4,215
RoCE
21,887
16,100
9,041
Turnover Ratios
7,643
2,873
2,343
Asset Turnover (x)
35%
18%
26% Debtors (No. of Days)
13,986
11,024
8,449
169
129
274
289
289
Net Debt/Equity (x)
BALANCE SHEET
FY15
FY16
644
679
55,618
80,103
56,262
80,783
56,071
51,876
13,140
11,224
1,343
3,166
112,333 132,659
112,423 128,851
9,330
7,809
12,579
12,990
32,116
32,880
57,407
63,633
21,171
20,519
14,626
15,718
238,658 269,298
FY17E
679
88,423
89,102
51,876
9,919
3,166
140,979
143,157
7,809
13,359
29,052
65,441
20,856
9,391
280,107
FY14
51
240
2.3
5%
FY17E
29
309
0.4
2%
7.8
1.7
0.59%
9.3
2.3
0.00%
8.7
1.2
0.18%
15.5
1.5
0.10%
21%
21%
25%
23%
14%
15%
9%
9%
1.1
16.6
69.3
89.9
0.7
FY14
13,991
Depreciation
11,074
Direct Taxes Paid
4,308
OP before WC changes
34,685
36,151
Capex
(26,975)
(29,893)
Repayment of Long Term Borrowings
23,321
Interest Paid
(6,171)
(689)
(3,883)
Inc/(Dec) in Cash
2,375
12,351
Closing Balance
16,628
RATIOS
FY15
FY16
51
38
206
280
0.6
0%
2%
1.1
17.5
66.8
79.7
1.0
1.0
17.2
75.1
84.3
0.6
1.0
17.2
75.1
84.3
0.6
CASH FLOW STATEMENT

FY15
FY16
FY17E
13,986
11,024
9,041
13,386
17,014
20,668
4,194
1,994
2,343
43,049
38,609
35,676
35,183
39,167
35,835
(31,614) (32,682) (34,974)
(34,519) (38,611) (34,014)
27,393
10,887
(6,307)
(5,704)
(4,215)
(681)
(86)
(129)
5,201
(3,193)
(5,650)
5,865
(2,637)
(3,828)
16,628
21,128
32,880
21,128
19,350
29,052
11
Book Profit
CADILA HEALTHCARE LTD
12th Dec 2016
Company Update
CMP
393
Target Price
415
415
Upside
6%
0%
Market Data
BSE Code
532321
NSE Symbol
CADILAHC
429/295
52wk Range H/L

Mkt Capital (Rs Cr)
40284
43.3
8246
Av. Volume(,000)
Nifty
Cadila Healthcare has reported flat Revenue of Rs. 2353 Cr in

2QFY17 vs Rs.2351 Cr in the corresponding Quarter of FY16.
Remediation process at Moraiya facility is completed but waiting
for full resolution which Management expects to be completed in
next few months. The company has filed 4 ANDAs (Abbreviated
New Drug Application) and received approval for 1 ANDA during
the Quarter.Ongoing pricing pressure in the US market had offset
the revenue growth of Asacol HD AG which was launched in US
market in Aug-16. The management expects 7 ANDAs approvals in
2HFY17. Cumulatively the company has filed 279 ANDAs in the US
market. Going forward management expects growth in emerging
markets as well as in domestic market.
Result Highlights of 2QFY17

Profit after tax has declined by 29% to Rs. 338 Cr on YoY
Stock Performance
1M
3M
12M
EBITDA margin has declined to 21.9% in 2QFY17 as compared to 26% in

2QFY16( Decline of 410bps)
US Formulations sales has declined by 1.5% to Rs. 9888 Cr in this quarter
Absolute
-1.6
0.2
15.7
Rel.to Nifty
1.7
-5.8
8.7
Formulation business from Latin America has grown by 24.6% to Rs. 656
Cr in 2QFY17

2QFY17
1QFY17 4QFY16
Promoters
74.8
74.8
74.8
Public
Others
Total
25.2
25.2
25.2
100
100
100
Europe Formulations business has reported revenue of Rs. 557 in

2QFY17 vs Rs. 649 Cr in same period in FY16
Outlook and Valuation

Cadila Healthcare has finished remediation process at Moraiya facility, and
full resolution is expected in few months. Despite ongoing pricing pressure,
US would remain a key growth driver on the back of proposed launches of
12-15 products in FY17.Based on the current fundamentals our target for
cadila is Rs.415 and we recommend to book profit around Rs. 415.
Company Vs NIFTY
115
CADILAHC
Animal health and other business has shown a robust growth of 51.9% to
Rs. 1225 Cr in 2QFY17 as compared to Rs. 806 Cr in 2QFY16
NIFTY
110
105
100
90
Financials
2012
2013
2014
2015
Rs,Cr
2016
85
Sales
EBITDA
Net Profit
EPS
P/E
5263
1084
652
4
49.5
6358
1125
653
4
49.4
7224
1200
803
4
57.8
8651
1756
1151
5
49.9
9838
2383
1523
6
45.6
95
Dec-16
Nov-16
Oct-16
Sep-16
Aug-16
Jul-16
Jun-16
May-16
Apr-16
Mar-16
Jan-16
Feb-16
Dec-15
80
Aditya Gupta
aditya.gupta@narnolia.com

12
Key Product launches in FY18
Generic name
Brand Name
Market size Expected launch Patent expiration Comments

(USD mn)
PrevacidSolutab
240
FY18
17-Nov-19 Cadila won the non-infringement case in Mar'14 and wil launch on approval
Asacol HD
250
FY18
15-Nov-21 Cadila has tied for an AG launch or can launch its own ANDA post approval
Lialda
300
FY18
8-Jun-20 Cadila is sole FTF. Other filers are Osmotica, Mylan&Watson with litigation ongoing
Rapamune (1 mg, 2mg)
190
FY18
Expired Cadila has launched 0.5 mg strength (USD 12 mn) has TA on other two strengths; Dr.
Reddy's has launched 1mg & 2 mg strengths
Lansoprazole
Mesalamine
Mesalamine
Sirolimus
Concall Highlights
Management plans to file ~40 ANDAs annually

The company has filed 4 ANDA and received approval for 1 ANDA during the Quarter
Management expects 7 ANDA's appprovals in FY17
Moraiya capacity utilization stands at ~60%.
The company is planning a capex of ~Rs1, 000 crore in FY17 for construction of few Greenfield and brownfield facilities
R&D expense is expected to be flattish YoY in FY17
Tax rate expected at ~22-25% in FY17
Filings with USFDA
Filings with USFDA

30
ANDA filings
26
ANDA approvals
25
20
20
15
10
5
5
0
4
1
4
1
About Company
Cadila Healthcare (CDH) is a well diversified Pharma company with presence across
more than 100 countries in the world and among the few Indian players to have
presence in Consumer and Animal health businesses. Cadila ranks among the Top 5
companies
in the Indian pharma market and the India branded business contributes
more than 30% of its sales. US contributes 35% of its revenues and is among the
top 15 generic companies in the US in terms of prescriptions. Cadila is one of the
leading players in CV, gastrointestinal and womens healthcare segments. It is also
present in respiratory, pain management, CNS, anti-infectives, oncology,
neurosciences, dermatology and nephrology segments. It also plans to tap some
unique opportunities through its JVs with Takeda, Hospira, Bayer and Bharat Serums
13

INCOME STATEMENT
FY13
FY14
FY15
FY16
Revenue (Net of Excise Duty) 6358
7224
8651
9838
EPS
Other Income
37
51
55
94
Book Value
Total Revenue
6395
7275
8707
9932
DPS
COGS
2320
2714
3197
3277
GPM
36.5%
37.6%
36.9%
33.3%
Valuation(x)
Other Expenses
2008
2239
2491
2846
P/E
EBITDA
1125
1200
1756
2383
Price / Book Value
EBITDA Margin (%)
18%
17%
20%
24%
Dividend Yield (%)
Depreciation
185
201
287
302
EBIT
940
999
1468
2081
RoE
Interest
169
90
68
49
RoCE
PBT
809
959
1456
2126
Turnover Ratios
Tax
119
106
259
571
Asset Turnover (x)
Tax Rate (%)
15%
11%
18%
27%
Reported PAT
653
804
1151
1523
Dividend Paid
180
216
240
688
No. of Shares
180
216
240
264
Net Debt/Equity (x)
Souce: Eastwind/Company
Share Capital
Reserves
Net Worth
Long term Debt
Short term Debt
Deferred Tax
Net Fixed Assets
Capital WIP
Debtors
Trade payables
Total Provisions
Net Current Assets
Total Assets
FY13
102
2842
2945
1426
1257
101
4371
3761
736
955
584
657
314
1778
7374
BALANCE SHEET
FY14
FY15
102
102
3337
4149
3439
4252
1362
1150
902
1184
96
59
4801
5402
4015
4150
892
798
1134
1588
549
670
911
1091
369
473
1542
2145
7987
9047
FY16
102
5250
5352
896
1211
61
6248
4790
0
1680
695
1345
215
2241
10016
FY13
3.6
16.4
1.0
27%
RATIOS
FY14
FY15
3.7
4.8
16.0
17.7
1.0
1.0
27%
21%
FY16
5.8
20.3
2.6
45%
49.4
11.0
1%
57.8
13.5
0%
49.9
13.5
0%
45.6
13.0
1%
22%
22%
23%
21%
27%
27%
28%
33%
0.9
55
70
38
0.5
0.9
57
69
46
0.4
1.0
67
65
46
0.3
1.0
62
54
50
0.2
Souce: Eastwind/Company
CASH FLOW STATEMENT

FY13
FY14
FY15
FY16
809
942
1446
2124
Depreciation
185
201
287
302
Direct Taxes Paid
-272
-173
-387
-662
923 capital1191
changes 1413
2719
603
903
994
1994
Purchase of Non Current investments
0
0
1
0
Capital expenditure on fixed-724
assets including
-484 capital
-512advances
-972and capi
-682
-438
-465
-904
353
552
570
232
Interest Paid
-164
-86
-67
-47
-179
-219
-235
-697
286
-529
-351
-953
Inc/(Dec) in Cash
207
-64
178
137
470
677
613
790
Closing Balance
677
613
790
928

14
BUY
BLUE STAR LTD.
9-Dec-16
Impact of Demonetization
Result Update
CMP
471
Target Price
535
Demonetization may impact Q3FY17 sales of the company. Generally 3rd

quarter is always a weak season for ACs and only 35% of total sales is done
through cash in tier I and tier II markets so we do not see huge impact of
demonetization. But in tier III, tier IV and tier V markets cash sales ratio is
higher (60%) than tier I and tier II markets so here we can see some impact
of it but it will for short term period. Overall there will be marginal impact of
demonetization in the company and company is not seeing any behavioural
change in demand from real sector yet.

Upside
14%
Market Data
450 cr expansion on the cards
BSE Code
Blue Star is planning to invest Rs 450 crore in the next three years. The airconditioner maker is getting consumers focus after entering the residential
air conditioner and water purifier segment.
500067
NSE Symbol
BLUESTARCO
581/306
4,497
485
8247
52wk Range H/L

Mkt Capital (Rs Cr)
Av. Volume
Nifty
Q2FY17_Result Highlights
The Company has reported a Total Operating Income of Rs 899 cr for the
quarter ended Sep 30, 2016 on a consolidated basis as compared to Rs 777
cr in the same period last year representing a growth of 16%. EBITDA Rs 41
cr As compare to 35 cr in the same period last year. Financial Expenses for
the quarter declined by 22% to Rs 8.75 crores from Rs 11.27 crores in
Q2FY16, mainly due to reduced cost of borrowings.
Stock Performance
1Month
3 Month
1Year
Absolute
-13.4
27.1
11.0
Rel.to Nifty
-9.5
20.9
11.3

2QFY17
1QFY17 4QFY16
Promoter
39.12
39.04
39.46
Public
60.88
60.96
60.54
Others
--
--
--
100
100
100
Total
Going forward Q3FY17 and Q4FY17 sales will be impacted due to scarcity of
new currency. As per the management H2FY17 will have some challenges
because Room-Air conditioners buyers are first time buyers. Company is not
seeing any behavioral change in demand from real estate sector yet and
expected things to normalized probably by March. On the positive side the
order book is up by 15% over last year and this is good sign for the future
growth. The Company intends to continue to make investments in
manufacturing, marketing, brand building, product development as well as
human resources in the next few quarters in order to capitalise on the
imminent growth opportunities.We have change our Sales and PAT
estimates due to demonetization but in a long term point of view we are
optimistic about the stock hence we recommend BUY to the stock at a
revised target price of Rs 535.
Company Vs NIFTY
160
BLUESTARCO
NIFTY
150
140
130
120
110
Rs 'Cr
100
90
Bibha Kashyap
bibha.kashyap@narnolia.com
Dec-16
Oct-16
Nov-16
Sep-16
Aug-16
Jul-16
Jun-16
May-16
Apr-16
Mar-16
Jan-16
Dec-15
Nov-15
80
Financials
FY13
FY14
FY15
FY16
FY17E
Sales
EBITDA
Net Profit
EBIDTA%
P/E
2924
90
39
3.1%
0.01
2934
150
78
5.1%
0.03
3182
167
54
5.3%
0.02
3770
216
109
5.7%
0.03
3825
228
113
6.0%
0.03
15
Investment Arguments :
The wide product range including state-of-the-art inverter split air conditioners, enhanced distribution reach and
premium brand equity will further strenghten the performance of the product business.
The electro-mechanical projects business has been showing signs of improvement in some markets and application
segments.
With additional product lines being added to the Companys portfolio such as water purifiers, Blue Star expects air
coolers and air purifiers, to sustain its growth momentum in FY17 as well.
Substantial repayment of debt would be constrained by working capital needs as the company expects strong growth
in FY17.
The companys Room-Air conditioning (RAC) business has been outgrowing the industry by 10% points over the last
few quarters, resulting in the company consistently increasing its market share.
Order book :
Book to bill
1.17
1.07
1.02
0.87
0.90
1.09
1.12
0.97
1.04
0.97
0.92
0.89
0.94
0.97
0.93
0.92
0.92
0.95
0.95
Order book(Cr)
2500
2000
1500
500
2019
2162
1678
1614
1848
1676
1628
1412
1438
1744
1737
1478
1572
1492
1412
1388
1493
1604
1605
1628
1628
1,776
1840
1000
1QFY12
2QFY12
3QFY12
4QFY12
1QFY13
2QFY13
3QFY13
4QFY13
1QFY14
2QFY14
3QFY14
4QFY14
1QFY15
2QFY15
3QFY15
4QFY15
1QFY16
2QFY16
3QFY16
3QFY16
4QFY16
1QFY17
2QFY17
1.4
1.2
1
0.8
0.6
0.4
0.2
0
Trend of EBITDA , EBIT & PAT Margin(%):

Gross Margin %
EBIDTA %
8%
6%
4%
2%
0%
-2%
-4%
-6%
1QFY12
2QFY12
3QFY12
4QFY12
1QFY13
2QFY13
3QFY13
4QFY13
1QFY14
2QFY14
3QFY14
4QFY14
1QFY15
2QFY15
3QFY15
4QFY15
1QFY16
2QFY16
3QFY16
4QFY16
1QFY17
2QFY17
35%
30%
25%
20%
15%
10%
5%
0%

16
Recent management commentaries:

As per the management consumer durables category around 12 percent is sold through the e-commerce portals and
air conditioners was at five percent.
Company has increased market share in room air conditioner business and commercial refrigeration products like
water coolers and deep freezers.
Expected revenue growth 30%
Expected margin will be between 9.5%-10.5%
volume will grow somewhere around 10 %.
Segment wise performance

The Electro-Mechanical Projects and Packaged Air Conditioning Systems business, accounting for 62% of the total
revenues in the quarter, increased by 14% to Rs 559.88 crores from Rs 491.55 crores propelled by Government
infrastructure-related projects. Segment Results registered a marginal increase of 2% to Rs 30.27 crores. Project
execution progress remained slow as customers phase out their requirements based on available capital thereby
deferring overall project completion.
The Unitary Products revenues in the quarter increased by 18% to Rs 291.56 crores, while Segment Results grew 68%
to Rs 21.75 crores over the same period. Enhanced product penetration amongst the existing channels, greater demand
during the onset of the festive season, enhanced product portfolio and deeper penetration contributed to the
growth and profitability in this segment.
The Professional Electronics and Industrial Systems business revenues increased by 25% to Rs 46.38 crores, while
Segment Results registered an increase of 11% to Rs 7.25 crores owing to a few large surveillance projects billed during
the quarter.
Segment wise Revenue(Cr)

Electro Mechanical Projects & Packaged Air-conditioning systems
Cooling Products
376
34 169
396
47 156
481
70 307
342
396
32
374
43 169
349
42 155
355453
60
335 484
26
396
37 205
357
37 196
505
454
46
327 556
25
459
12 246
238 439
9
546
540
18
419
744
11
292 533
9
367
334
31
283 463
67
368
52 164
382
59 157
33
800
700
600
500
400
300
200
100
-
342
328
Professional Electronics & Industrial Equipment

17
FY14
8.6
51.2
2.3
0.3
RATIOS
FY15
FY16
6.0
12.1
50.7
73.7
4.7
7.6
0.8
0.6
23.3
3.9
1%
51.1
6.1
2%
28.1
4.6
2%
33.1
7.0
2%
17%
24%
12%
26%
16%
23%
21%
32%
1.3
95.9
81.5
103.2
0.0
1.5
82.3
78.9
101.5
0.1
1.5
80.5
75.6
105.9
0.0
1.6
80.5
70.0
103.5
0.0
INCOME STATEMENT
FY14
Revenue (Net of Excise Duty)2934
Other Income
18
Total Revenue
2952
COGS
2087
GPM
1
Other Expenses
450
EBITDA
150
EBITDA Margin (%)
5%
Depreciation
38
EBIT
113
Interest
54
PBT
76
Tax
2
Tax Rate (%)
3%
Reported PAT
78
Dividend Paid
21
No. of Shares
9
FY15
3182
8
3190
2214
1
533
167
5%
43
124
49
43
-8
-19%
54
42
9
FY14
18
443
461
0
494
2
461
271
1
771
68
830
73
491
2336
FY15
18
438
456
24
373
1
479
279
2
718
44
885
88
311
2175
FY16
3770
17
3787
2607
1
600
216
6%
60
156
43
135
27
20%
109
68
9
FY17E
3825
20
3846
2724
1
583
228
6%
53
175
54
141
28
20%
113
68
9
BALANCE SHEET
Share Capital
Reserves
Net Worth
Long term Debt
Short term Debt
Deferred Tax
Net Fixed Assets
Capital WIP
Debtors
Trade payables
Total Provisions
Net Current Assets
Total Assets
FY16
18
472
663
18
345
2
681
285
6
831
54
1094
46
417
2590
FY17E
18
517
535
18
315
2
553
295
6
843
3
1085
43
240
2422
EPS
Book Value
DPS
Valuation(x)
P/E
Price / Book Value
Dividend Yield (%)
RoE
RoCE
Turnover Ratios
Asset Turnover (x)
Net Debt/Equity (x)
FY17E
12.6
59.5
7.6
0.6
CASH FLOW STATEMENT

FY14
FY15
FY16
FY17E
76
43
135
141
Depreciation
38
43
60
53
Direct Taxes Paid
-19
-26
-52
-28
171capital changes
186
191
248
67
215
242
180
Capital expenditure on fixed assets

-40 including
-60capital advances
-55
and-63
capital wor
11
-49
-44
-77
0
25
0
0
Interest Paid
-54
-50
-43
-54
-27
-39
-107
-68
-26
-190
-205
-153
Inc/(Dec) in Cash
52
-24
-7
-51
17
68
44
54
Closing Balance
68
44
54
3

18
Limited Downside- target- 88/Praj Industries
8-Dec-16
Result Update
CMP
77
Target Price
88
14%
Upside
Market Data
BSE Code
522205
NSE Symbol
PRAJIND
105/70
1,387
51
8143
52wk Range H/L

Mkt Capital (Rs Cr)
Av. Volume ('000)
Nifty
Stock Performance
1Month
3 Month
1Year
Absolute
-11.1
-17.4
-12.7
Rel.to Nifty
-7.6
-8.8
-16.3

2QFY17
1QFY17 4QFY16
Promoters
34%
34%
34%
Public
66%
66%
66%
Higher Crude Price to Support Operational performance

OPEC has come to an agreement to cut supply to support international oil
prices, resulting recent spike in crude oil prices to support company's
operational performance going forward. Company's order book may improve
going forward with higher demand for ethanol blending in India, coupled with
government focus on to curtail oil import by way of higher ethanol blending.
We expect speedy work on IOCs project to set up 2G based Ethanol plant.
After demonetization move, which we believe will not impact business much
as Praj functions in B2B business model and 40% of the revenue comes
from the export business.
Q2FY17 Result Highlights

Total revenue in Q2FY17 is decline by 1.28% YoY to Rs. 206 Cr as against
Rs.210 Cr in Q2FY16. Lower execution of Ethanol segment led to decline in
revenue. Ethanol revenue decline by 10% YoY. Brewery business remain
flattish on YoY and Emerging business grow by 32% YoY.
EBITDA for the Quarter contracted by 40 bps YoY to Rs.6 Cr in Q2FY17
compare to Rs.7 Cr in Q2FY16. Higher employee benefit expenses led to
decline in EBITDA. Company need to make provision of Rs. 2 Cr for the
retire employee benefit. PAT decline due to lower EBITDA to Rs. 3 Cr in
Q2FY17 compare to Rs.5 in Q2FY16.
Order inflow during the quarter de grow by 46% YoY to Rs. 200 Cr as
against Rs. 369 Cr in Q2FY16.
Current order book of the company stand at Rs. 1025 Cr (including Rs.235
cr of Petro bass order)
Company Vs NIFTY
130
PRAJIND
NIFTY
120
110
100
90
80
Praj reported weak set of the numbers in Q2FY17 but considering the
government emphasis on reducing import bill of oil and produce more
domestically coupled with focus on higher blending in a scenario where crude
prices are going high, may auger well for the company as praj is the
prominent and only Indian company in 2G technology based Boi-Ethanol. We
find this correction healthy and consider it a good entry point around Rs.75
for medium to long term investors. We remain positive with a target price of
Rs. 88
In Rs. Cr
70
60
50
40
Sandip Jabuani
Financials
FY13
FY14
FY15
FY16
FY17E
Sales
EBITDA
Net Profit
EBIDTA M%
PAT M%
919
85
68
9.2%
7%
986
78
55
8.0%
6%
1012
93
76
9.2%
8%
1016
111
70
10.9%
7%
963
63
45
8.4%
6%
sandip.jabuani@narnolia.com
19
Key take way from Concall / Managment Interviwe

Praj selected as technology supplier by IOC (Indian Oil Corporation) and signed MoU for the setting up three 2G technology
based Boi- Ethanol plant.
Each plant requires 550-600 Cr of capital investment. Main portion will invest by OMCs and government.
Praj need to invest around 7-12% of equity in 2G Ethanol plant
Management is in talk with new contractor to resume Petro bass order. More clear view by calendar year end.
Tax rate for FY17:- 30%
Order Book and Order Inflow growth

Order Book
Order Inflow Growth (YoY%)
1400
1200
1000
100%
92%
990
1050
875
820
800
730
600
1147
1010
1115
980
1025
24%
40%
34%
20%
21%
0%
10%
-20%
-11%
-31%
60%
40%
730
400
200
1030
73%
960
80%
-40%
-32%
-34%
-46%
-47%
-60%
Segment Order Book and Order Intake (Order Intake is Rs.200 Cr in Q2FY17)
2QFY17
2QFY17 (Order Intake)

Ethanol
30%
Brewery
40%
Emerging
51%
62%
8%
9%
Segment Revenue
Ethanol
250
Brewery
Emerging
227
200
217
183
180
159
150
134
91
100
73
66
49
52
50
8
16
106
31
117
105
80
69
104
116
130
127
84
66
48
43
44
33
50
23
23
117
72
40
55
23
66
23
2QFY14 3QFY14 4QFY14 1QFY15 2QFY15 3QFY15 4QFY15 1QFY16 2QFY16 3QFY16 4QFY16 1QFY17 2QFY17

20
RATIOS
FY14
FY15
3.1
4.3
32.8
35.1
2.6
1.9
84%
44%
FY16
3.9
37.3
1.9
48%
9.5
1.1
5%
17.0
1.6
5%
14.5
1.8
3%
22.7
2.4
2%
12%
11%
9%
9%
12%
9%
11%
11%
0.7
125
69
94
0.0
0.8
119
93
74
0.0
0.8
101
70
64
0.0
0.9
132
79
74
0.0
INCOME STATEMENT
FY13
Revenue (Net of Excise Duty)919
Other Income
31
Total Revenue
950
COGS
507
GPM
1
Other Expenses
214
EBITDA
85
EBITDA Margin (%)
9%
Depreciation
22
EBIT
63
Interest
2
PBT
92
Tax
21
Tax Rate (%)
23%
Reported PAT
68
Dividend Paid
34
No. of Shares
18
FY14
986
24
1010
479
0
304
78
8%
24
55
1
77
20
27%
55
46
18
FY15
1012
34
1046
506
1
280
93
9%
38
55
2
86
8
9%
76
34
18
FY16
1016
15
1030
467
0
287
111
11%
34
77
1
90
20
23%
70
34
18
EPS
Book Value
DPS
Valuation(x)
P/E
Price / Book Value
Dividend Yield (%)
RoE
RoCE
Turnover Ratios
Asset Turnover (x)
Net Debt/Equity (x)
FY13
35
535
571
0
14
10
571
250
48
316
75
238
189
298
1246
FY14
35
547
583
0
21
9
583
268
2
320
57
200
212
291
1276
FY15
35
587
622
0
17
1
622
241
1
280
100
177
133
337
1216
FY16
36
626
661
0
16
0
661
223
1
367
82
207
29
345
1162
FY13
FY14
FY15
FY16
92
77
86
90
Depreciation
22
24
38
34
Direct Taxes Paid
48
28
9
36
94capital changes
95
113
127
28
(3)
150
52
13
20
21
36
Capital expenditure on fixed assets
53 including
39 capital advances
16
and13
capital wor
26
18
(80)
(1)
0
0
0
0
Interest Paid
2
1
2
1
33
46
34
69
(58)
(40)
(40)
(68)
Inc/(Dec) in Cash
(5)
(25)
29
(18)
72
68
44
76
Closing Balance
68
44
76
62
Share Capital
Reserves
Net Worth
Long term Debt
Short term Debt
Deferred Tax
Net Fixed Assets
Capital WIP
Debtors
Trade payables
Total Provisions
Net Current Assets
Total Assets

FY13
3.8
32.1
1.9
49%
21
Lauras Labs Ltd
"SUBSCRIBE"
7th Dec 2016
IPO Note
Issue Detail
Company Overview
Type
Issue Size
100% Book Building

Rs. 1350 Crore
Offer Price
*Rs (426 - 428)/Equity Share
Min App Size
35 Shares
Issue Open
6-Dec-16
Issue Close
Shares Offer
Face Value
Lead Mgrs
8-Dec-16
3.115
Rs 10
Citigroup Global Markets India
Pvt Ltd, Jefferies India Pvt Ltd ,
Kotak Mahindra Capital
Company Ltd.
Listing
Registrar
NSE,BSE
Laurus Labs Ltd was incorporated in 2005 which is Hyderabad based pharmaceutical company.
Laurus Labs is in the business of manufacturing generic active pharmaceutical ingredients (APIs)
for therapeutic areas of antiretrovirals (ARVs) and Hepatitis C. Company also manufacture APIs in
oncology and other therapeutic areas.
Company operate in four buisness : Generics - APIs , Generics - FDFs , Synthesis and Ingredients.
Generics -API business comprises the development , manufacture and sale of APIs and advanced
intermediates . Generics FDF business comprises the development and manufacturing oral solid
formulation. Synthesis business includes contact development and manufacturing services for
global pharmaceutical companies . Ingredients business comprises the manufacture & sale of
speciality ingredients for use in the nutraceutical and cosmeceutical sectors. Company has lunched
59 products . company's key customers Asper pharmacare Ltd , Auropharma , Cipla , Mylan , Natco
, Strides shasun Ltd . Company owned 32 patents and had 150 pending patent application in
several countries . Company has three manufaturing facilities in visakhapatnam , andhra Pradesh.
Company sells its products in 32 countries in sub saharan africa , south east asis and Latin America.
Karvy Computershare Pvt Ltd
Market Cap
(Post Issue)
4527.8
No of shares ( Post & Pre Issue)

No of Shares (Pre Issue)
Offer for Sale
98,746,904
24,107,440
Fresh Issue made

No of Shares (Post Issue)
7042253
105789157
Bid allocation pattern
Company Strategies
> Company is a leading developer and manufacturer of generics APIs in select , high- growth
therapeutics areas of ARV and Hepatitis C.
> Company has strong R&D capabilities & process chemistry skills . Company is focused on
undertaking dedicated R&D in existing products where company believe there is significant growth
potential.
> Copany has maintained long standing relationship with multi national pharmaceutical companies
. Company cumulative revenue from such customers has grown year over year for the last three
financial years.
> Company experienced Promoters and Qualified Operational Personnel
Risk
QIB
50%
Non-Institutional
15%
Retail
35%
> Any manufacturing or quality control problems may subject us to regulatory action, damage our
reputation and have an adverse effect on business, results of operations, financial condition and
cash flows.
> Company derive a significant portion of revenue from a few customers, most of whom
Company do not have long term contractual arrangements with, and the loss of one or more such
customers, the deterioration of their financial condition or prospects, or a reduction in their
demand for our products could adversely affect business, results of operations, financial condition
and cash flows
Objects of the Issue:

Particulars
Pre-payment of term loans
General corporate purposes.
Recommendation
Company strategic and early investments in R&D and manufacturing infrastructure has enabled to become one of the leading suppliers of
APIs in the ARV therapeutic area to reap long term benefits on account of a robust business model, healthy balance sheet, strong business
prospects in terms of multiple levers in place for growth and ability of the management to leverage its capabilities in a bid to cultivate its
business.
At the higher end of the price band of Rs 428, the IPO is valued at 12.6x EV/EBITDA and 34.1x P/E on FY16 basis. We believe the company is
being offered at upper band of its valuations. We maintain "SUBSCRIBE" on this IPO.
Lauras Labs Ltd

Financials
Yearly Profit & Loss Account (Consolidated Figure)
Figure in Rs (Crore)
30th Sept
2016
Total Income
EBITDA
PAT
EBITDA Margin
PAT Margin
No of Shares
Post Issue Diluted EPS
Price
P/E( At upper price band)
P/E( At lower price band)
EV/EBITDA( At upper price band), X
EV/EBITDA( At lower price band), X
ROE %
31 March
2016
31 March
2015
31 March
2014
942
209
75
22%
8%
10.57
14.21
1,791
380
133
21%
7%
10.57
12.55
1,361
234
68
17%
5%
10.57
6.47
1,169
218
97
19%
8%
10.57
9.20
Rs 426 - 428
34.1
33.9
12.85
12.80
16%
15.6%
9.5%
27.1%
Figure in Rs (Crore)
Balance Sheet
30th Sept
2016
31 March
2016
31 March
2015
31 March
2014
EQUITY AND LIABILITIES

Share capital
Reserves and surplus
830
82
769
82
640
78
281
Shareholders' funds
929
852
722
358
283
576
461
481
304
432
188
312
859
942
735
500
60
8
38
45
10
5
45
12
Long-term borrowings
Short-term borrowings
Total Borrowing
Deferred tax liability (net)
Long-term provisions
Other Long Term Liabilities
Non - current liabilities
99
7
44
4
0
106
96
60
16
308
354
25
249
145
20
231
133
7
227
164
7
687
2581
413
2303
371
1888
399
1273
Long-term loans and advances

Non current investment
Other non-current assets
1276
152
6
13.74
1155
129
7
9.06
911
94
7
13.97
615
69
0
14.53
Non-current assets
1447
1300
1026
698
521
533
14
39
26
487
445
28
30
13
475
285
59
31
12
328
195
23
25
4
1134
2581
1003
2303
862
1888
575
1273
Trade payables
Other current liabilities
Short-term provisions
Current liabilities
TOTAL Liabilities
Fixed assets
Inventory
Trade receivables
Cash and bank balances
Short-term loans and advances
Other Current Assets
Current assets
Total

201 | 2nd Floor | Marble Arch Building | 236B-AJC Bose Road |
Kolkata-700 020 , Ph : 033-40501500
email: narnolia@narnolia.com, website
: www.narnolia.com
Risk Disclosure & Disclaimer: This report/message is for the personal information of
the authorized recipient and does not construe to be any investment, legal or taxation
advice to you. Narnolia Securities Ltd. (Hereinafter referred as NSL) is not soliciting any
action based upon it. This report/message is not for public distribution and has been
furnished to you solely for your information and should not be reproduced or
redistributed to any other person in any from. The report/message is based upon publicly
available information, findings of our research wing East wind & information that we
consider reliable, but we do not represent that it is accurate or complete and we do not
provide any express or implied warranty of any kind, and also these are subject to change
without notice. The recipients of this report should rely on their own investigations,
should use their own judgment for taking any investment decisions keeping in mind that
past performance is not necessarily a guide to future performance & that the the value of
any investment or income are subject to market and other risks. Further it will be safe to
assume that NSL and /or its Group or associate Companies, their Directors, affiliates
and/or employees may have interests/ positions, financial or otherwise, individually or
otherwise in the recommended/mentioned securities/mutual funds/ model funds and
other investment products which may be added or disposed including & other
mentioned in this report/message.

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IEA Report

15th Dec 2016

15th Dec 2016

14th Dec 2016

13th Dec 2016

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Change from Previous

52wk Range H/L

Share Holding Pattern-%

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Financials Snap Shot

OP/(Loss) before Tax

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Change from Previous

52wk Range H/L

Share Holding Pattern-%

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Financials Snap Shot

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Change from Previous

52wk Range H/L

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Financials Snap Shot

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Previous Target Price

Change from Previous

52wk Range H/L

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