Ambit Strategy Thematic TenBaggers5 05jan2016 PDF

Strategy
THEMATIC January 05, 2016
Ten Baggers 5.0 Exhibit A: Ten baggers 5.0

Ticker Company
Mcap
Over the past four years we have used our greatness framework to (US$ mn)
identify structurally strong businesses in India. These companies were Attractive valuations*
ITC IN ITC 39,216
identified based on their relentless improvement in financial
IDEA IN Idea Cellular 7,328
performance over long periods (usually, six years). Using FY15 annual
HCLT IN HCL Tech. 17,856
reports, we now refresh our annual list of ten baggers. The first four
TCS IN TCS 70,083
iterations (for FY11 to FY14) have cumulatively delivered ~26% CAGR
GPPV IN Gujarat Pipavav# 1,142
returns (over the past four years) vs BSE500 CAGR return of 14%. The
MRF IN MRF 2,579
sub-BSE500 tenbaggers list has delivered ~55% CAGR returns over the TTMT IN Tata Motors 18,462
last three years. Moderate valuations**
Our relentless focus on franchises that keep improving TRP IN Torrent Pharma 3,679
Whilst Good & Clean remains our preferred tactical way of playing Indian Rich valuations***
equities (click here for the 2nd September G&C portfolio), in a country like India LPC IN Lupin Ltd. 12,139
the robustness of the economy ensures that well-managed companies that are PSYS IN Persistent Systems+ 777
focused on building cash-generative franchises have a high chance of doing KJC IN Kajaria 1,175
well. Structural plays, like the ones we aim to identify in our ten-bagger BRIT IN Britannia+ 5,353
portfolios, are financially strong firms (with credible management teams) that SKB IN GSKConsumer+ 4,101
remain consistent performers on a cross-cyclical basis. Both in live portfolios and PI IN PI Industries 1,350
back-tests, the approach delivers impressive alpha in most years whilst investing MTCL IN Mindtree+ 1,826
in high-quality franchises. PAG IN Page Industries 2,270
FNXC IN Finolex Cables 576
A back-test of the greatness framework has yielded impressive returns
SI IN Supreme Inds 1,314
1,000 BRGR IN Berger Paints 2,742
Greatness EIM IN Eicher Motors+ 7,131
800 20.1% CAGR
model TVSL IN TVS Motor 2,046
600 SF IN Sundram Fasteners 520
Universe
15.1% CAGR AJP IN Ajanta Pharma# 1,753
400 (average
basis) Hatsun
13.6% CAGR HTSMF IN 676
200 BSE500 Agro#
LOG IN La Opala# 514
- HUVR IN HUL# 27,900
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
Jan-09
Jan-10
Jan-11
Jan-12
Jan-13
Jan-14
Jan-15
Jan-16
VO IN Vinati Organics# 360

MRCO IN Marico# 4,363
AIAE IN AIA Engg#+ 1,254
ATLP IN Atul Ltd.# 756
Source: Ambit Capital research. Note: The backtest is based on annual rebalancing with forward-looking
returns being calculated from December 31 of year X to December 31 of year X+1; for example, for the Source: Ambit Capital research
most recent year, the framework included numbers until FY14 and returns have been calculated from 31 * Trading below five-year P/E, P/B, EV/EBITDA
December 2014 to 31 December 2015. (on at least two of these three measures)
** Trading below either five-year P/E, five-year P/B
The greatness philosophy worksyear after year or five-year EV/EBITDA (on one of these three
Consistent improvements in corporate performance are more important than measures)
great leapsthis has been the guiding philosophy of our greatness *** Trading above five-year P/E, P/B, EV/EBITDA
# denotes new entrant to our ten baggers
framework, which lies at the core of our process of identifying structurally sound portfolio
businesses. Not only do the great firms perform significantly better than an + Indicates that the Ambit sector lead has a
average firm on a variety of measures, more importantly, they show a more bottom-up SELL on the name
consistent and calibrated approach to growth over long periods. In this note, we
update our greatness framework to include FY15 numbers.
As shown over the past four years, our framework uses the following attributes
to measure consistent financial improvements: judicious capex, conversion of Analyst Details
capex to sales, pricing discipline, balance sheet discipline, cash generation and Gaurav Mehta, CFA
net profit improvement, and return ratio improvement. +91 22 3043 3255
This years portfolio gauravmehta@ambitcapital.com
We find that 80 firms from the BSE500 pass more than two-thirds of the tests in Prashant Mittal, CFA
our greatness framework. Of these, the best 30 firms that clear our accounting +91 22 3043 3218
quality and corporate governance filters make it to this years list. Of these 30 prashantmittal@ambitcapital.com
firms, we have bottom-up coverage with BUYs on: ITC, PI Industries, HCL Tech, Saurabh Mukherjea, CFA
Page Industries, Finolex Cables, TCS, Tata Motors, Supreme Industries, Berger +91 22 3043 3174
Paints, TVS Motors, HUL and Marico. 70% of the stocks in this years portfolio saurabhmukherjea@ambitcapital.com
also featured in last years portfolio implying 30% churn.
Ambit Capital and / or its affiliates do and seek to do business including investment banking with companies covered in its research reports. As a result, investors should be aware that Ambit Capital
may have a conflict of interest that could affect the objectivity of this report. Investors should not consider this report as the only factor in making their investment decision.
Strategy
CONTENTS
Philosophy and framework. 3
Quantifying greatness. 5
Does this approach work?........................................................................................ 6
Ten baggers 5.0... 8
Greatness framework on sub-BSE500 firms.12
Performance check: Jan 2015 ten-bagger list.... 13
Performance check: Jan 2015s sub-BSE500 firms. 14
Valuations - A long-term perspective!..................................................................... 15
Appendix January 2016 ten-baggers business activity description.17
January 05, 2016 Ambit Capital Pvt. Ltd. Page 2

Strategy
Philosophy and framework

Greatness is not in where we stand, but in what direction we are moving.
- Oliver Wendell Holmes
The greatness framework
This quote appropriately captures the driving philosophy behind our greatness
framework that lies at the core of our process of identifying potential ten baggers. We The framework essentially
had unveiled this framework on 19 January 2012 with the first iteration of the hinges on using publicly
Tomorrows ten baggers note. This framework studies a firms structural strengths by available historical data to
assess which firms have, over
focusing not on absolutes but rather on improvements over a period of time and the
a sustained period of time
consistency of those improvements. (FY10-15), been able to
relentlessly and consistently:
A basic sketch of the underlying process behind the making of a great firm has been
recaptured in Exhibit 1 below. (a) Invest capital;
(b) Turn investment into
Exhibit 1: The greatness framework sales;
(c) Turn sales into profit;
a. Investment (gross b. Conversion of (d) Turn profit into
block) investment to sales balance sheet strength;
(asset turnover, sales) (e) Turn all of that into
free cash flow; and
(f) Invest free cash flows
again.
c. Pricing discipline
(PBIT margin) Clearly, this approach will
have limited value if there is a
structural break in the sector
or in the company, which
makes past performance a
e. Cash generation d. Balance sheet meaningless guide to future
discipline (D/E, cash performance. (For identifying
(CFO)
structural breaks of this sort,
ratio)
for example in the Indian
boiler-turbine-generator
Source: Ambit Capital research sector or in the Indian utilities
sector, we look to our sector
We rank the BSE500 universe of firms (excluding financial services firms and leads for help.)
excluding firms with insufficient data) on our greatness score, which consists of six
equally weighted headingsinvestments, conversion to sales, pricing discipline,
However, to the extent that
balance sheet discipline, cash generation and EPS improvement, and return ratio
such structural breaks tend to
improvement. be the exception than the
Under each of these six headings, we further look at two kinds of improvements: rule, the greatness model
helps in creating a shortlist of
Percentage improvements in performance over FY13-15 vs FY10-12; and stocks that investors can then
analyse in greater detail.
Consistency in performance over FY10-15 i.e. improvements adjusted for
underlying volatility in financial data Put simply, the greatness
model separates the wheat
A complete list of factors that are considered whilst quantifying greatness has been from the chaff. Yet, it does not
provided in Exhibit 2 on the next page. cook the whole meal for you!

Strategy
Exhibit 2: Factors used for quantifying greatness

Head Criteria
1 Investments a. Above median gross block increase (FY13-15 over FY10-12)*
b. Above median gross block increase to standard deviation
2 Conversion to sales a. Improvement in asset turnover (FY13-15 over FY10-12)*
b. Positive improvement in asset turnover adjusted for standard
deviation
c. Above median sales increase (FY13-15 over FY10-12)*
d. Above median sales increase to standard deviation
3 Pricing discipline a. Above median PBIT margin increase (FY13-15 over FY10-12)*
b. Above median PBIT margin increase to standard deviation
4 Balance sheet discipline a. Below median debt-equity decline (FY13-15 over FY10-12)*
b. Below median debt-equity decline to standard deviation
c. Above median cash ratio increase (FY13-15 over FY10-12)*
d. Above median cash ratio increase to standard deviation
Cash generation and
5 a. Above median CFO increase (FY13-15 over FY10-12)*
PAT improvement
b. Above median CFO increase to standard deviation
c. Above median adj. PAT increase (FY13-15 over FY10-12)*
d. Above median adj. PAT increase to standard deviation
6 Return ratio improvement a. Improvement in RoE (FY13-15 over FY10-12)*
b. Positive improvement in RoE adjusted for standard deviation
Both improvement and the
c. Improvement in RoCE (FY13-15 over FY10-12)* consistency of those
d. Positive improvement in RoCE adjusted for standard deviation improvements are important
Source: Ambit Capital research. Note: * Rather than comparing one annual endpoint to another annual endpoint
(say, FY10 to FY15), we prefer to average the data out over FY10- 12 and compare that to the averaged data
from FY13-15. This gives a more consistent picture of performance (as opposed to simply comparing FY10 to
FY15).
We rank the BSE500 universe of firms (excluding financial services firms) on this score
to arrive at this years rankings on this measure of structural strength. After removing
financial services firms and firms with insufficient data, 399 firms from the BSE500
were ranked based on this measure. The highlights from the distribution of these
firms on our greatness score are displayed on the next page.
On page 6, we show a back-test of this framework over FY04-2015 and find that it
works on a consistent basis. On pages 14-15, we show the real world performance of
these sets of portfolios over the last year and demonstrate that the construct works in
the real world as well. The lists from the BSE500 universe have cumulatively delivered
~26% CAGR returns (over the past four years) vs 14% CAGR returns for the BSE500
Index. The lists from the sub-BSE500 universe that we had published in our previous
three iterations have cumulatively delivered ~55% CAGR returns (over the past three
years) vs ~17% CAGR returns for the BSE Small-cap Index.
On pages 8-12, we delve into this years list of 30 firms that constitute our ten
baggers 5.0. This is followed by a list of 10 firms from the sub-BSE500 universe that
do well on the same framework.

Strategy
Quantifying greatness
From the universe of BSE500 firms, after removing financial services firms and firms *The greatness score is
with insufficient data, 399 firms were scored on the six headings highlighted on the
calculated by assigning
previous page. The cut-off for greatness was placed at 67%* and only 80 firms (20%
equal weightages to the six
of the total population of 399 firms) could manage a score above this cut-off.
factors outlined in Exhibit 2
Exhibit 3: Distribution of firms on the greatness score (total population: 399 firms) on page 4.
Zone of mediocrity Good, not Great Zone of greatness
232 firms 87 firms Thus, each of these six

90.0 Only 80 firms
score < 50% (between 50% factors carries a weightage
80.0 and 67%) score >67%
of 16.7%. The scoring on
No. of firms
70.0
60.0 sub-criteria within each of
50.0 these factors is binary, with
40.0
30.0 a firm getting either 1 or 0
20.0 based on whether it has
10.0 done better than the
10%-20%
20%-30%
30%-40%
40%-50%
50%-60%
60%-70%
70%-80%
80%-90%
90%-100%
0%-10%
respective threshold or not.
These scores are then

Source: Ambit Capital research cumulated to arrive at a
In the next exhibit, we present key financial data on the three zones defined above: final greatness score on 100
Mediocrity (232 firms), Good but not great (87 firms), and Great (80 firms). for the firm.
Exhibit 4: Zones of greatness - Financial summary

Mediocre Good but not great Great
Number of firms 232 87 80
Mcap (US$ mn)* 636 852 1,148
Share price (3-year CAGR)# 9% 26% 45%
Gross block (3-year CAGR) 11% 11% 16%
Sales (3-year CAGR) 7% 15% 19%
Adj PAT (3-year CAGR) -3% 17% 29%
CFO (3-year CAGR) 4% 17% 32%
PBIT Margin (3-year average) 10% 14% 15%
RoE (3-year average) 9% 18% 24%
RoCE (3-year average) 11% 19% 25%
Net debt: equity 0.31 0.13 0.31
FY16 P/E 22.8 24.2 21.3
FY16 P/B 2.3 4.1 4.5
Source: Capitaline, Ambit Capital research; Note: All figures are based on median values of the firms analysed
*Mcap as of 4 January 2016. # indicates share price performance from 04 January 2013 to 04 January 2016.
With regard to fundamentals, the superiority of the great firms compared with the
other two groups is evident in Exhibit 4 above. Of these 80 great firms, we identify
the ones that perform the best on our accounting and corporate governance filters,
and this leads to our final list of 30 great companies. Before we move onto these 30
potential ten baggers, we shall discuss a back-test of the greatness framework in the
next section to see whether great firms have indeed managed to deliver superior
returns historically.

Strategy
Does this approach work?

The greatness approach has served us well in live portfolios, both in the ten-baggers
format and as a tool for stock selection in the Good & Clean portfolios. That this
approach works on a cross-cyclical basis is supported by a back-test of the
framework.
Our back-test of the greatness framework in India, going back to 2003 (which
implies using data since 1997-98), shows that great firms have historically delivered
superior results. Using average returns as a measure to gauge the performance of
great firms, we note that they have managed to outperform the universe by 5.0%
(on average returns) and the BSE500 Index by 6.5% (in CAGR terms; over a 12-year
period from 2004 to 2015).
Great firms are firms that score more than 67% on our framework. We rebalance
these buckets once a year (on 31 December), taking into account the preceding six
years of financial data (FY10-15 in the case of ten baggers 5.0). The performance
over the subsequent year is measured on a calendar year basis.
Exhibit 5: Average performance of Great firms vs the Universe and BSE500 Index
(2004-2015)
1,000
Greatness
20.1% CAGR model Between 2004-15, Great firms
800
have outperformed the universe
Universe
600 15.1% CAGR (average by 5.0% points per annum (on
basis) average returns) and the BSE500
400 13.6% CAGR BSE500 Index by 6.5% points per annum
200
-
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
Jan-09
Jan-10
Jan-11
Jan-12
Jan-13
Jan-14
Jan-15
Jan-16
Source: Ambit Capital research; Note: The backtest is based on annual rebalancing with forward-looking returns
being calculated from December 31 of year X to December 31 of year X+1; for example, for the most recent
year, the framework included numbers until FY14 and returns have been calculated from 31 December 2014 to
31 December 2015.
Outperformance was also seen on a median basis. A median firm in the universe has
delivered 5.0% CAGR returns (over 2004-2015). In contrast, a median great firm
has managed to deliver 9.1% CAGR returns, thus resulting in an outperformance of
~4.1% (on a CAGR basis) for great firms vs. the universe.
Exhibit 6: Median performance of Great firms vs the Universe (2004-2015)
350
300 Outperformance was also seen
9.1% CAGR Greatness
250 on a median basis
model
200
5.0% CAGR Universe
150
(median
100 basis)
50
0
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
Jan-09
Jan-10
Jan-11
Jan-12
Jan-13
Jan-14
Jan-15
Jan-16
Source: Ambit Capital research; Note: The backtest is based on annual rebalancing with forward-looking returns
being calculated from December 31 of year X to December 31 of year X+1; for example, for the most recent
year, the framework included numbers until FY14 and returns have been calculated from 31 December 2014 to
31 December 2015.

Strategy
Note that this back-test does not consider accounting or management quality, which
we believe are factors that should improve the performance of our live portfolios.
Thats what the next section of this note focuses on.
Before we delve into this years list of 30 firms that constitute our ten baggers 5.0, the
following two exhibits show the performance of the live ten-baggers portfolio since
January 2012 when we first unveiled this framework. Whilst the BSE500 ten baggers
have managed to outperform the BSE500 Index by ~53% points (on a cumulative
basis) over the last four years, the ten baggers from the sub-BSE500 universe that we
highlighted in the previous three iterations have managed to outperform the BSE
Small-cap Index by a whopping 115% points (on a cumulative basis).
Outperformance for all our live ten-baggers from the BSE500 and the sub-BSE500
universe demonstrates that the construct works in the real world as well.
Exhibit 7: Performance of the BSE500 ten-bagger portfolios (since 19 January 2012)
80
70
60 52.6
50 43.4
Return (%)
40
30
20 9.8
6.7 The live performance of our ten-
10 bagger portfolios has been
- impressive too
(10) 2012 2013 2014 2015
Tenbagger iteration return index return cumulative alpha
Source: Bloomberg, Ambit Capital research
Exhibit 8: Performance of the sub-BSE500 ten-bagger portfolios (since 14 January

2013)
150
115.2
91.9
100
Return (%)
41.4
50
-
2013 2014 2015
(50)
Small-caps tenbagger iteration return BSE Smallcap index return cumulative alpha

Strategy
Ten baggers 5.0

In the latest iteration of the ten-bagger exercise, from the 80 firms that clear more
than two-thirds of our cut-off, we reach a shortlist of 30 firms after following a
process of elimination. This involves removing firms:
That fall in the Zone of Trouble in our accounting model (i.e. the bottom 4
An overlay of accounting,
deciles on accounting quality; for a full exposition of our accounting filter, please
corporate governance and
refer to our 17th December 2015 note);
subjective checks to the greatness
Firms with suspect corporate governance; and framework is the last but critical
Firms with structural issues around the underlying business (i.e. businesses where step
a great past is not likely to translate into a great future).
Note that the accounting filter mentioned in the first bullet eliminates 19 out of the
80 firms on the long list. Of remaining 61 firms, 31 are eliminated by the second and
third bullets.
There are 9 changes (implying 30% churn) with respect to last years list (refer to our
5th January 2015 note). A summary of these changes is as follows:
Exits: Gateway Distriparks, Monsanto India, Astral Poly Technik, Ipca, VST
Industries, eClerx Services, Coal India and Wabco India drop out on account of
deterioration in their greatness scores. We exclude Bata India on account of our
sector analysts negative view on its business.
Exhibit 9: Reasons behind the stocks exiting our ten-bagger portfolio
Company name Metrics in our Greatness model no longer met by the company
Gateway Distriparks Investment in gross block, balance sheet discipline, cash flows improvement, improvement in return ratios
Monsanto India Investment in gross block, sales improvement, cash flows improvement, balance sheet discipline
Astral Poly Technik Pricing discipline, balance sheet discipline, improvement in return ratios
Ipca Laboratories Sales improvement, pricing discipline, improvement in return ratios
VST Industries Investment in gross block, sales improvement, cash flows improvement, balance sheet discipline
eClerx Services Sales improvement, pricing discipline, balance sheet discipline, improvement in return ratios
Investment in gross block, sales improvement, pricing discipline, PAT and cash flows improvement, balance sheet discipline,
Coal India*
improvement in return ratios
Wabco India Sales improvement, pricing discipline, PAT and cash flows improvement, improvement in return ratios
Source: Ace Equity, Capitaline, Ambit Capital research * We have a Bottom-up Buy on this stock
Entrants: AIA Engineering, Ajanta Pharma, Hatsun Agro Products, La Opala,

Hindustan Unilever, Vinati Organics, Atul Ltd, Marico and Gujarat Pipavav are the
8 names that are added using FY15 data (implying that these firms greatness
scores improved when FY15 data was added to the model and FY09 data was
taken out of the model).
Having identified the 30 great firms that exhibit the ingredients required to be
tomorrows winners, we run a valuation check to ascertain if they are currently
trading at reasonable prices for outright investments. In our view, whilst valuations do
matter on a tactical basis, how the underlying fundamentals evolve for the firm over
long periods plays a more important role in determining returns than the beginning-
of-the-period valuation itself. Further, the performance of the previous iterations of
our ten-bagger portfolio corroborates our finding that beginning of the period
valuations do not play a significant role in shaping subsequent investment
returns. We discuss this in detail in the final section of this note.
To determine whether a particular stock is cheap or not, we categorise these stocks
into three buckets based on their relative attractiveness on valuations with respect to
their own history. We compare these firms with respect to their five-year average
valuations on three metricsP/B, P/E and EV/EBITDA. We find seven firms to be
inexpensive (on at least two of the three metrics): ITC, Idea Cellular, HCL Tech, TCS, For the long-term investor,
Gujarat Pipavav, MRF and Tata Motors. However, for the long term, all 30 stocks beginning-of-period valuations
remain candidates to be ten baggers from our perspective (as we have reiterated do not have a significant impact
time and again that current period valuations do not have a significant effect on on returns
long-term returns! Please see pages 17-18 for details).

Strategy
We have bottom-up coverage with BUYs on 12 of these names. These are: ITC, PI
Industries, HCL Techn, Page Industries, Finolex Cables, TCS, Tata Motors, Supreme
Industries, Berger Paints, TVS Motor, HUL and Marico.
Exhibit 10: January 2016 ten baggers - Valuation perspective
Blended FY15 and FY16
Mcap Cheap w.r.t. history? Overall cheap on
Sr. No. Ticker Company valuations
(US$ mn) how many counts?
P/E P/B EV/EBITDA P/E P/B EV/EBITDA
Attractive valuations*
1 ITC IN ITC Ltd. 39,216 26.1 7.7 16.8 YES YES YES 3
2 IDEA IN Idea Cellular 7,328 15.3 2.1 5.7 YES YES YES 3
3 HCLT IN HCL Tech. 17,856 16.0 4.5 12.0 YES YES YES 3
4 TCS IN TCS 70,083 22.1 8.3 16.0 YES YES YES 3
5 GPPV IN Gujarat Pipavav 1,142 23.0 3.5 16.3 YES YES YES 3
6 MRF IN MRF 2,579 9.8 2.6 5.4 YES - YES 2
7 TTMT IN Tata Motors 18,462 10.4 2.0 4.4 - YES YES 2
Moderate valuations**
8 TRP IN Torrent Pharma 3,679 24.4 8.3 11.5 - - YES 1
Rich valuations***
9 LPC IN Lupin Ltd. 12,139 35.3 8.5 24.7 - - - -
10 PSYS IN Persistent Systems# 777 17.4 3.5 10.3 - - - -
11 KJC IN Kajaria 1,175 38.8 9.5 19.1 - - - -
12 BRIT IN Britannia# 5,353 47.0 24.4 30.2 - - - -
13 SKB IN GSKConsumer# 4,101 42.9 11.9 30.7 - - - -
14 PI IN PI Industries Ltd. 1,350 32.1 8.6 21.0 - - - -
15 MTCL IN Mindtree# 1,826 21.4 5.6 15.0 - - - -
16 PAG IN Page Industries 2,270 66.0 32.8 38.9 - - - -
17 FNXC IN Finolex Cables 576 19.0 2.9 12.3 - - - -
18 SI IN Supreme Industries 1,314 27.3 6.6 14.5 - - - -
19 BRGR IN Berger Paints 2,742 59.1 13.4 30.3 - - - -
20 EIM IN Eicher Motors# 7,131 61.4 15.8 27.7 - - - -
21 TVSL IN TVS Motor 2,046 38.4 9.4 22.0 - - - -
22 SF IN Sundram Fasteners 520 24.2 4.0 12.1 - - - -
23 AJP IN Ajanta Pharma 1,753 34.2 12.1 22.2 - - - -
24 HTSMF IN Hatsun Agro Products 676 78.5 18.1 17.1 - - - -
25 LOG IN La Opala 514 70.3 16.5 41.2 - - - -
26 HUVR IN Hindustan Unilever 27,900 42.6 44.0 31.5 - - - -
27 VO IN Vinati Organics 360 19.7 5.0 11.2 - - - -
28 MRCO IN Marico Ltd. 4,363 46.1 14.4 28.1 - - - -
29 AIAE IN AIA Engineering# 1,254 19.9 3.8 12.3 - - - -
30 ATLP IN Atul Ltd. 756 19.5 4.4 12.4 - - - -
Source: Bloomberg, Capitaline, Ambit Capital research.
* Trading below five-year average P/E, P/B, EV/EBITDA (on at least two of these three measures)
** Trading below either five-year average P/E, five-year P/B or five-year EV/EBITDA (on one of these three measures)
*** Trading above five-year average P/E, P/B and EV/EBITDA
# denotes that the relevant Ambit sector lead has a bottom-up SELL in the name
Note: There are a few stocks that cleared both the greatness and accounting filters but did not make it to the final list of 30 stocks based on our lack of conviction
on the names. These are: Dr Reddys, Aurobindo Pharma, P&G Hygiene, KRBL Ltd, Suven Life sciences, Kaveri Seeds, Welspun India, Relaxo Footwears, Aarti
Industries, Granules India, Aarti Drugs, Arvind, Vardhman textiles, Kitex Garments, Geometric, Metalyst Forgings, Sun Pharma, BPCL, UPL Ltd, Amara Raja,
Hexaware, Tata Elxi, Navneet Education, Alembic Pharma, Ceat, Marksans Pharma, DCM Shriram, Greenply, Tube Investments, Rajesh Exports, Dishman Pharma,
Vakrangee, Bata India, Ratnamani Metals, Wipro

Strategy
Exhibit 11: January 2016 ten baggers financial snapshot

3-yr
3-yr Net 3-yr adj. 3-yr 3-yr avg 3-yr 3-yr FY15 Net
Sr. Mcap 6M ADV share FY16 FY16
Ticker Company Sales PAT CFO PBIT avg avg Debt/
No. (US$ mn) (US$ mn) price P/E P/B
CAGR CAGR CAGR margin RoE RoCE Equity
CAGR
1 ITC IN ITC Ltd. 39,216 34.1 5% 14% 16% 16% 34% 34% 50% (0.5) 26.1 7.7
2 IDEA IN Idea Cellular 7,328 10.0 7% 17% 65% 40% 14% 12% 12% 0.6 15.3 2.1
3 HCLT IN HCL Tech. 17,856 24.5 39% 21% 44% 29% 21% 37% 43% 0.0 16.0 4.5
4 TCS IN TCS 70,083 45.0 22% 25% 23% 41% 27% 41% 52% (0.4) 22.1 8.3
5 GPPV IN Gujarat Pipavav 1,142 2.4 49% 21% 81% 80% 38% 14% 14% (0.2) 23.0 3.5
6 MRF IN MRF# 2,579 7.7 45% 11% 37% 39% 11% 23% 28% 0.0 9.8 2.6
7 TTMT IN Tata Motors 18,462 56.8 7% 17% 0% 24% 9% 27% 21% 0.5 10.4 2.0
8 TRP IN Torrent Pharma 3,679 4.5 59% 20% 31% 18% 19% 36% 30% 0.8 24.4 8.3
Rich valuations***
9 LPC IN Lupin Ltd. 12,139 34.0 44% 22% 40% 70% 23% 30% 36% (0.2) 35.3 8.5
10 PSYS IN Persistent Systems 777 1.1 34% 24% 26% 22% 17% 21% 28% (0.6) 17.4 3.5
11 KJC IN Kajaria 1,175 1.5 61% 19% 30% 26% 13% 30% 32% 0.3 38.8 9.5
Britannia Industries
12 BRIT IN 5,353 9.7 80% 13% 46% 33% 8% 54% 57% (0.5) 47.0 24.4
Ltd.
GSKConsumer
13 SKB IN 4,101 1.2 19% 16% 18% 16% 16% 33% 49% (1.1) 42.9 11.9
Healthcare Ltd.
14 PI IN PI Industries Ltd. 1,350 2.8 74% 30% 46% 21% 14% 28% 33% 0.1 32.1 8.6
15 MTCL IN Mindtree Ltd. 1,826 4.6 61% 23% 33% 43% 17% 29% 37% (0.5) 21.4 5.6
16 PAG IN Page Industries 2,270 3.1 58% 30% 29% 11% 20% 59% 64% 0.4 66.0 32.8
17 FNXC IN Finolex Cables 576 0.4 62% 6% 11% -4% 8% 17% 20% (0.3) 19.0 2.9
18 SI IN Supreme Industries 1,314 0.9 32% 13% 10% 20% 13% 32% 37% 0.1 27.3 6.6
19 BRGR IN Berger Paints 2,742 1.1 50% 14% 13% 25% 9% 24% 25% 0.2 59.1 13.4
20 EIM IN Eicher Motors 7,131 20.3 84% 15% 26% 37% 9% 21% 25% (0.6) 61.4 15.8
21 TVSL IN TVS Motor 2,046 7.9 85% 12% 30% -45% 4% 19% 18% 0.5 38.4 9.4
22 SF IN Sundram Fasteners 520 0.3 48% 4% 10% -20% 7% 15% 14% 1.0 24.2 4.0
23 AJP IN Ajanta Pharma 1,753 4.4 134% 30% 60% 58% 26% 41% 50% (0.1) 34.2 12.1
Hatsun Agro
24 HTSMF IN 676 0.1 67% 22% 13% 6% 4% 35% 19% 2.7 78.5 18.1
Products
25 LOG IN La Opala 514 1.4 124% 25% 49% 48% 24% 34% 39% (0.4) 70.3 16.5
26 HUVR IN Hindustan Unilever 27,900 18.8 17% 11% 12% 2% 15% 103% 146% (1.4) 42.6 44.0
27 VO IN Vinati Organics 360 0.3 45% 20% 28% 79% 21% 31% 32% 0.1 19.7 5.0
28 MRCO IN Marico Ltd. 4,363 5.3 27% 13% 21% 18% 13% 29% 31% (0.0) 46.1 14.4
29 AIAE IN AIA Engineering 1,254 1.0 39% 16% 33% 48% 21% 20% 26% (0.3) 19.9 3.8
30 ATLP IN Atul Ltd. 756 1.0 60% 14% 38% 51% 12% 22% 24% 0.2 19.5 4.4
Source: Bloomberg, Ambit Capital research; # represents companies for which FY15 data is not available and FY14 data is used instead

Strategy
Exhibit 12: January 2016 ten baggers - Forward-looking data using consensus estimates
Mcap 6M ADV FY15-FY18E FY15-FY18E
Sr. No. Ticker Company
(US$ mn) (US$ mn) EPS CAGR BVPS CAGR
1 ITC IN ITC Ltd. 39,216 33.3 11% 11%
2 IDEA IN Idea Cellular 7,328 9.8 -2% 10%
3 HCLT IN HCL Tech. 17,856 24.0 10% 18%
4 TCS IN TCS 70,083 44.4 15% 26%
5 GPPV IN Gujarat Pipavav 1,142 2.4 9% 15%
6 MRF IN MRF 2,579 7.5 0% 17%
7 TTMT IN Tata Motors 18,462 56.0 12% 25%
8 TRP IN Torrent Pharma 3,679 4.5 24% 33%
Rich valuations***
9 LPC IN Lupin Ltd. 12,139 33.3 19% 25%
10 PSYS IN Persistent Systems 777 1.0 12% 15%
11 KJC IN Kajaria 1,175 1.5 24% 24%
12 BRIT IN Britannia Industries Ltd. 5,353 9.6 22% 32%
13 SKB IN GSKConsumer Healthcare Ltd. 4,101 1.3 17% 16%
14 PI IN PI Industries Ltd. 1,350 2.7 25% 28%
15 MTCL IN Mindtree Ltd. 1,826 4.6 16% 20%
16 PAG IN Page Industries 2,270 3.0 27% 32%
17 FNXC IN Finolex Cables 576 0.4 14% 12%
18 SI IN# Supreme Industries 1,314 0.9 15% 16%
19 BRGR IN Berger Paints 2,742 1.1 29% 20%
20 EIM IN Eicher Motors 7,131 19.9 41% 27%
21 TVSL IN TVS Motor 2,046 7.9 32% 28%
22 SF IN# Sundram Fasteners 520 0.3 24% 13%
23 AJP IN Ajanta Pharma 1,753 4.3 25% 35%
24 HTSMF IN# Hatsun Agro Products 676 0.1 80% 25%
25 LOG IN La Opala 514 1.4 32% 28%
26 HUVR IN Hindustan Unilever 27,900 18.3 10% 10%
27 VO IN Vinati Organics 360 0.3 17% 24%
28 MRCO IN Marico Ltd. 4,363 5.3 18% 20%
29 AIAE IN AIA Engineering 1,254 0.9 6% 15%
30 ATLP IN Atul Ltd. 756 1.0 19% 23%
Source: Bloomberg, Ambit Capital research; Note: # indicates FY15-17E CAGR

Strategy
Greatness framework on sub-BSE500 firms

In our January 2013 ten baggers 2.0 note, based on client feedback, we had inserted
a list of sub-BSE500 firms that did well on our framework primarily in the hope that
given the inefficient price discovery in the smaller-cap names, running the screen on
relatively lesser-known names should work even better. The results surely have been
very encouraging. The sub-BSE500 list from our ten baggers 2.0 portfolio delivered
22.4% in absolute terms and 41.2% points of alpha relative to the BSE Small-cap
Index from January 2013 to November 2013. Likewise, the sub-BSE500 list from our
ten baggers 3.0 portfolio delivered a staggering 137.3% returns in absolute terms
and 50.5% points of alpha relative to the BSE Small-cap Index. The most recent sub-
BSE500 list from our last iteration ten baggers 4.0 has again delivered 28% return
on an absolute basis and 23% alpha relative to the BSE Small-cap Index (please see
page 15 for performance details).
Continuing with this initiative, we present below a list of select small-caps from The framework should work
outside the BSE500 but above a market cap of Rs1,000mn that fare well on this better in the less-discovered sub-
years iteration of our greatness framework (after updating FY15 numbers). Based on BSE500 universe
client feedback, we have extended our forensic accounting model to all firms with a
market cap of Rs1,000mn and above. Whilst these stocks have cleared our
accounting screen, we may not have sufficient information on the quality of their
corporate governance.
Exhibit 13: January 2016 greatness framework on smaller caps outside BSE500
Mcap 6M ADV
Sr. No. Ticker Company FY16 P/E FY16 P/B
(US$ mn) (US$ mn)
1 TCPL IN TCPL Packaging# 87 0.0 13.6 4.1
2 PLM IN Poly Medicure 259 0.1 34.0 7.2
3 ATA IN Atul Auto 181 0.6 25.3 8.0
4 AVNT IN Avanti Feeds 282 0.7 11.3 5.1
5 KPR IN K P R Mill Ltd 495 0.9 14.4 2.9
6 FIEM IN Fiem Inds. 137 0.7 16.7 3.4
7 HSS IN Himatsing. Seide 312 3.5 11.8 2.2
8 FDM IN Fluidomat 16 0.0 N/A N/A
9 MUIL IN Multibase India Ltd# 49 0.1 N/A N/A
10 NCS IN Nucleus Software# 124 1.0 N/A N/A
Source: Bloomberg, Ambit Capital research; Note: Stocks that passed the two models but were omitted are:
Nandan Denim, Chamanlal Setia, Trident, Heritage Foods, Kovai Medical, Moreopen labs, RSWM, Alkyl Amines,
ShirpurGold, Ruchira Papers, Guj Alkalies,SKM Egg Products, Sreeleathers, Cupid, Paushak, Premco Global,
Lambodhara Textiles, Benares Hotels, KG Denim, Loyal Textile, Coromandel Engg, Mastek, APM Inds
# denotes new entrant to the portfolio
Note that unlike the ten-baggers list for the BSE500 universe (where we only consider
firms that meet the greatness score cut-off of 67% whilst being in the top 6 deciles of
our forensic accounting model), the criteria used to screen for ten baggers from the
sub-BSE500 universe has been made much more stringent. Only firms with a
greatness score above 80% that also fall in the top three deciles on accounting
quality in the sub-BSE500 universe have been included in this list.
On a separate note, if you havent already contacted your Ambit sales representative,
for a forensic check on your portfolio, you might want to do so now. Our forensic
model, refined and tested over five years, is very powerful.

Strategy
Performance check: Jan 2015 ten-bagger list

Exhibit 14: The ten-bagger list published on 05 January 2015 (click here for the 05
January 2015 note, Ten baggers 4.0)
Mcap Price
Ticker Company Performance
(US$ mn) 02-Jan-2015 04-Jan-2016
Attractive valuations
TCS IN TCS 70,080 2,579 2,370 -8%
ITC IN ITC 39,215 368 325 -12%
TTMT IN Tata Motors 18,462 506 377 -26%
HCLT IN HCL Tech 17,857 803 846 5%
IDEA IN Idea Cellular 7,328 160 136 -15%
IPCA IN Ipca Labs. 1,386 727 732 1%
ECLX IN eClerx Services 856 993 1,401 41%
Average for this bucket -2%
Moderate valuations
COAL IN Coal India 31,304 382 351 -8%
BATA IN Bata India 983 660 509 -23%
Average for this bucket -15%
Rich valuations
LPC IN Lupin 12,138 1,432 1,795 25%
EIM IN Eicher Motors 7,130 15,082 17,495 16%
SKB IN GlaxoSmith CHL 4,101 5,900 6,496 10%
BRIT IN Britannia Inds. 5,353 1,879 2,973 58%
TRP IN Torrent Pharma. 3,679 1,193 1,448 21%
MRF IN MRF 2,579 38,192 40,506 6%
BRGR IN Berger Paints 2,742 226 263 16%
PAG IN Page Industries 2,270 12,420 13,558 9%
TVSL IN TVS Motor Co. 2,046 267 287 7%
MTCL IN Mindtree 1,827 1,299 1,451 12%
WIL IN WABCO India 1,737 4,661 6,101 31%
SI IN Supreme Inds. 1,314 597 689 15%
PI IN P I Inds. 1,350 550 656 19%
PSYS IN Persistent Sys 777 937 647 -31%
MCHM IN Monsanto India 571 2,926 2,205 -25%
KJC IN Kajaria Ceramics 1,175 618 985 59%
ASTRA IN Astral Poly 770 387 428 11%
FNXC IN Finolex Cables 575 269 251 -7%
SF IN Sundram Fasten. 520 195 165 -15%
GDPL IN Gateway Distr. 512 350 314 -11%
VST IN VST Inds. 394 1,940 1,700 -12%
Average for this bucket 10%
Overall average 6%
BSE500 Index -3%
Outperformance 9%
In a difficult year for the Indian equity markets, last years iteration of ten baggers
published on 05 January 2015 has clocked 6% returns in absolute terms and 9%
points relative to the BSE500. This compares with cumulative absolute returns of
109% and relative returns (to BSE500) of 43% points delivered by the first three
iterations (click here for the 19 January 2012 note on ten baggers 1.0 and click here
for the 14 January 2013 note on ten baggers 2.0 and click here for the 26 November
2013 note on ten bagger 3.0). Moreover, the above exhibit also highlights that
beginning-of-the-period valuations have not made much difference to investment
returns, with the stocks categorised as attractively valued, based on initial valuations,
underperforming those classified as richly valued on average. This finding also
emerged from earlier ten bagger iterations. In effect, what our models have shown
time and again is that once you screen rigorously for high quality, there is little
value add in further screening through a demanding valuation filter.

Strategy
Performance check: Jan 2015s sub-BSE500 ten

baggers
Exhibit 15: Superior firms on greatness from sub-BSE500 published on 05 January
2015 (click here for the 05 January 2015, Ten baggers 4.0)
Mcap Price Performance

Ticker Company
(US$ mn) 02-Jan-2015 04-Jan-16
SVLS IN Suven Life Scie. 498 212.8 260.45 22%
LOG IN La Opala RG 514 446.55 617.5 38%
PLM IN Poly Medicure 259 452.1 390.95 -14%
MUNI IN Mayur Uniquote 326 422.75 469.65 11%
GRAN IN Granules India 461 82.87 146.65 77%
SEL IN Suprajit Engg. 259 138 143.75 4%
ATA IN Atul Auto 181 677.95 550.9 -19%
AVNT IN Avanti Feeds 282 320.94 413.9 29%
KPR IN K P R Mill Ltd 495 377.3 874.9 132%
HPPL IN Huhtamaki PPL 260 185.75 237.9 28%
FIEM IN Fiem Inds. 137 872.2 760.75 -13%
HSS IN Himatsing. Seide 312 94.25 211.2 124%
WMP IN Wim Plast 180 1507.8 2000.75 33%
SIYA IN Siyaram Silk 168 957.45 1191.9 24%
IDR IN Indag Rubber 82 185.25 208.2 12%
ADFI IN Adi Finechem 52 332.85 249.1 -25%
FDM IN Fluidomat 16 210.15 215.7 3%
Overall average 28%
BSE Smallcap Index 4%
Outperformance 23%
The sub-BSE500 list of firms published on 05 January 2015 has also shown strength
and delivered a stellar performance over the year. These stocks are up 28% on
average over the year (vs 4% for the BSE Small-cap Index), resulting in ~23% points
of outperformance since publication. Absolute returns of 22% (and relative returns of
41%) for the first iteration of the sub-BSE500 ten baggers (published on 14 January
2013), a whopping 51% outperformance for the November 2013 iteration and 25%
outperformance of the last iteration suggest that the framework indeed does a
reasonably good job in the sub-BSE500 universe as well.

Strategy
Valuations - A long-term perspective!

Over long periods, it is how the underlying fundamentals evolve for the firm that
plays a more important role in determining returns rather than the beginning-period
valuation itself. Put another way, over long periods how a business fundamentally
performs is overwhelmingly the most important driver of investment returns (so much
so that the price at the time of entering the stock becomes almost irrelevant). This
point can be understood better with the following exhibits that plot ten-year returns
over FY04-14 vs FY04 valuations as measured by P/B and P/E at the beginning of the
period (in 2005).
Exhibit 16: Valuation impact on long-term returns - P/B
40% R = 0.071
FY05-FY15 share price CAGR
30%
20%
10%
0%
- 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0
-10%
-20%
-30%
-40%
-50%
FY05 price to book
Source: Ambit Capital research; Note: FY04-14 returns here are stock returns relative to Sensex
The value of the R-squared makes the story self-explanatory. A low value for this
parameter indicates that the beginning-period valuations do not play any meaningful
role in explaining stock returns over the next ten years. This holds true for both P/B
and P/E as measures of valuation.
Exhibit 17: Valuation impact on long-term returns - P/E
40% R = 0.0143
FY05-FY15 share price CAGR
30%
20%
10%
0%
- 20.0 40.0 60.0 80.0 100.0
-10%
-20%
-30%
-40%
-50%
FY05 price to earnings
Source: Ambit Capital research; Note: FY04-14 returns here are stock returns relative to Sensex. Trailing P/E has
been restricted to 100.
Further, that valuations do not play an overwhelming role in shaping investment

returns is also evidenced by the performance of the latest iteration of our ten-bagger
portfolio.
The following exhibits plot the returns since publication for the 30 stocks published as
a part of the ten-bagger portfolio on 05 January 2015 vs their trailing valuations as
measured by P/B and P/E at the beginning of the period.

Strategy
Exhibit 18: Tenbaggers 4.0 - Beginning-period P/B and stock returns
80% R = 0.0635
Share price performance
60%
40%
20%
0%
- 10.0 20.0 30.0 40.0 50.0 60.0
-20%
-40%
Trailing Price to Book
Here again, a low R-squared value indicates that the beginning-period P/B does not
influence stock returns in any major way. This holds true for P/E as a measure of
valuation as well.
Exhibit 19: Tenbaggers 4.0: beginning-period P/E and stock returns
80% R = 0.0791
Share price performance
60%
40%
20%
0%
- 20.0 40.0 60.0 80.0 100.0
-20%
-40%
Trailing Price to Earnings

Strategy
Appendix - January 2016 ten baggers

business activity description
BSE500 ten baggers business description
Sr. No. Ticker Company Business description
Tata Consultancy Services, a division of Tata Sons Limited, is a global IT services organization that provides
a comprehensive range of IT services to its clients in diverse industries. The Company, caters to finance
1 TCS IN TCS
and banking, insurance, telecommunication, transportation, retail, manufacturing, pharmaceutical, and
utility industries.
ITC Limited, a member of BAT Group of UK, is a holding company, which has a diversified presence in
2 ITC IN ITC Cigarettes, Hotels, Paperboards & Specialty Papers, Packaging, Agri Business, Packaged Foods &
Confectionery, Branded Apparel, Greeting Cards and other FMCG products.
Tata Motors Limited manufactures cars and commercial automotive vehicles in India. The Company
designs, manufactures and sells heavy commercial, medium commercial and small commercial vehicles
3 TTMT IN Tata Motors
including trucks, tankers, vans, buses, ambulances and minibuses. Tata also manufactures small cars and
sports utility vehicles.
HCL Technologies Limited provides software development and related engineering services. The Group's
technologies utilize a variety of technologies, including Internet and e-commerce, networking, internet
4 HCLT IN HCL Technologies
telephony, embedded software, ASIC/VLSI design and testing, satellite and wireless communications, and
component based object technologies, including COM, DCOM and COBRA.
5 IDEA IN Idea Cellular Idea Cellular Limited offers cellular services, SMS services, and mobile communication devices.
AIA Engineering specialises in the design, development, manufacture, installation and servicing of high
6 AIAE IN AIA Engg chromium wear, corrosion and abrasion resistant castings used in the cement, mining and thermal power
generation industries.
Hatsun Agro is the largest private sector dairy company in India. It produces and markets wide range of
7 HTSMF IN Hatsun Agro dairy products dairy whitener, skimmed milk powder, Agmark certified ghee, butter, cooking butter, milk,
varities of curd, paneer etc. It also exports to 38 countries worldwide.
Gujarat Pipavav is managed and operated by APM Terminals, the ports and terminals company of the
maritime giant, the A.P. Moller-Maersk Group. APM Terminals is one of the largest container terminal
8 GPPV IN Gujarat Piapavav
operators in the world and offers the global shipping community an integrated Global Terminal Network
of 56 ports and 154 inland facilities in 63 countries.
Lupin Limited manufactures bulk actives and formulations. The principal bulk actives manufactured by it
include Rifampicin, Pyrazinamide, Ethambutol (anti-TB), Cephalosporins (anti-infectives) and
9 LPC IN Lupin
cardiovasculars. The company also possesses competencies in phytomedicines, in which medicines are
made out of plant and herbal resources supported by the discipline of modern medicine.
Eicher Motors Ltd. manufactures light commercial vehicles which are sold domestically and are also
10 EIM IN Eicher Motors exported to other countries. Eicher Motors also manufactures tractors, two-wheelers and automotive
gears.
Glaxo SmithKline Consumer Healthcare Limited manufactures and sells malted milk food products. The
11 SKB IN GlaxoSmith C H L Group's products, which include energy & protein products, cereals, baby foods, ghee & butter, are sold
under the "Horlicks", "Boost", "Viva", "Brylcream", "Eno", "Maltova" and "Gopika" brand names.
Britannia Industries Limited manufactures bakery products such as biscuits, bread, cakes and rusks. The
12 BRIT IN Britannia Inds. Company also manufactures and exports soybean products, cashew kernels, marine products, and general
merchandise items.
Torrent Pharmaceuticals Ltd. manufactures bulk drugs and pharmaceutical formulations. The Company's
formulations include cardio-vascular, psychotropic and anti-biotic drugs while its bulk drugs include
13 TRP IN Torrent Pharma.
atenolol, ciprofloxacin and norfloxacin. Torrent Pharmaceuticals has wholly owned subsidiaries in several
regulated and less regulated international markets.
MRF Limited manufactures and distributes tyres and tubes for automobiles, aircrafts, motorcycles and
14 MRF IN MRF cycles. The Company also manufactures conveyor belts, paint and coats, and hoses. Every MRF tyre
designed is the result of a special acid test on the race and rally tracks.
Berger Paints India Limited manufactures and distributes paints, enamels, varnishes, and synthetic resins.
15 BRGR IN Berger Paints The Company's products are used in home, office, factory, interiors, exteriors, metal, wood, plastic, and
others.
Page Industries Limited develops, produces, and distributes branded underwear for men, women, and
16 PAG IN Page Industries
children in India and Sri Lanka.

Strategy

TVS Motor Company Limited manufactures motorcycles, mopeds and scooters. The Company also
manufactures spark ignition operated outboard motors, combustion spark ignition engines, critical engines
17 TVSL IN TVS Motor Co.
and transmission parts. TVS Motor Co. also owns a subsidiary that manufactures rubber molded and
plastic molded auto components, air brake hoses and molds.
Mindtree Limited is an international IT company. The Company delivers business and technology solutions
through global software development. Mindtree develops applications to help companies enhance their
18 MTCL IN Mindtree
enterprise operations. The Company also delivers product-development services and designs reusable
building blocks for high-tech companies.
Ajanta Pharma is a specialty pharmaceutical company engaged in development, manufacture and
marketing of quality finished dosages in domestic and international markets. Its focus is on
19 AJP IN Ajanta Pharma commercializing unique generic products and pioneering synergistic combination products in the
therapeutic areas of anti-malarial, cardiovascular, dermatology, male erectile dysfunction, pain
management, and ophthalmology.
Supreme Industries Limited manufactures industrial and engineered molded products and storage and
material handling crates. The Company also manufactures chemicals, multilayer sheets, multilayer films,
20 SI IN Supreme Inds.
packaging films and expanded polyethylene foam, PVC pipes and fittings, molded furniture and disposable
EPS containers.
PI's business activities include 1) Agri Inputs offering plant protection products, and speciality plant nutrient
21 PI IN P I Inds. products and solutions and 2) Custom Synthesis & Manufacturing for contract research and production of
agro chemicals, intermediates and other niche fine chemicals for global innovators.
Persistent Systems Limited offers outsourced software product development. The Company offer services
22 PSYS IN Persistent Sys
that include testing, support, and professional services.
La Opala is manufacturer and marketer of life style products in tableware segment. The company deals
23 LOG IN La Opala
with glass and glassware and products include opalware and crystal.
Kajaria Ceramics Limited manufactures glazed and unglazed ceramic tiles. The Company sells its products
24 KJC IN Kajaria Ceramics
in India and it also exports them to other countries.
HUL is Indias largest FMCG company with a heritage of over 80 years in India. It has over 35 brands
25 HUVR IN HUL spanning across categories like soaps, detergents, shampoos, skin care, toothpastes, detergents, packaged
foods etc. It is a subsidiary of Unilever, one of the worlds largest FMCG company.
Finolex Cables Ltd. manufactures a wide range of telecommunication and electrical cables. The Company's
products include flexible cables for appliances and industrial use electrification, winding wires, automobile
26 FNXC IN Finolex Cables
cables, welding cables, and cables for submersible pumps. The Company also manufactures jelly filled
phone cables, high frequency/radio frequency cables and PVC Sheets.
Sundram Fasteners Limited manufactures a wide range of nuts, bolts and related fastener equipment.
27 SF IN Sundram Fasten. Products include high-tensile fasteners and equipment for the automotive industry, such as cold extruded
parts, radiator caps and gear shifters. The Company also manufactures water pumps and fuel pumps.
Marico Limited is one of India's leading consumer products companies operating in the beauty and
wellness space. Currently present in 25 countries across emerging markets of Asia and Africa, Marico has
28 MRCO IN Marico
nurtured multiple brands in the categories of hair care, skin care, health foods, male grooming, and fabric
care.
Vinati Organics Ltd. is a specialty chemical company producing aromatics, monomers, polymers and other
29 VO IN Vinati Organics
speciality products and has a sturdy market presence in over 22 countries.
Atul Ltd is an improvement driven, integrated chemical company serving customers across the globe. With
depth in science and technology, Atul manages almost all Unit Processes and Unit Operations to
30 ATLP IN Atul Ltd.
manufacture about 1,380 products and formulations and has state-of-the-art facilities and processes to
ensure safety and treatment of gaseous, liquid and solid pollutants.
Source: Bloomberg

Strategy
Sub-BSE500 ten baggers business description

TCPL Packaging Ltd., (formerly known as Twenty-First Century Printers Ltd) began commercial production in
1 TCPL IN TCPL Packaging April 1990. It is one of India's largest manufacturers of printed folding cartons, and one of the few listed
packaging companies in India.
Poly Medicure Limited manufactures disposable healthcare products. The Company offers a wide range of
2 PLM IN Poly Medicure products for infusion therapy, anesthesia, urology, gastroenterology, blood management, surgery and
drainage, and catheters.
3 ATA IN Atul Auto Atul Auto Ltd. manufactures three-wheeled commercial diesel vehicles.
Avanti Feeds Ltd. manufactures and distributes shrimp feed. The Company also processes, packages, and
4 AVNT IN Avanti Feeds
exports shrimp throughout the world.
KPR Mill Limited manufactures apparel products. The Company's products include carded and combed cotton
5 KPR IN K P R Mill Ltd
and knitted fabrics.
6 FIEM IN Fiem Inds. FIEM Industries Limited manufactures automotive lighting and signaling equipment and rear view mirrors.
Himatsingka Seide Limited manufactures home textile products. The Company produces decorative fabrics,
7 HSS IN Himatsing. Seide spun silk, blended fabrics, bridal wear, fashion wear and other related textile products. Himatsingka Seide
offers its products to distributors across the United States and Europe.
Fluidmat Ltd. manufactures fluid coupling, turbo couplings, flexible coupling, and mechanical power
8 FDM IN Fluidomat
transmission equipment.
Multi base India is a Dow corning company that manufactures silicon based thermoplastics with application
9 MUIL IN Multibase India
in automotives, personal care, personal hygiene, telecom and engineering polymers
Nucleus Software provides lending and transaction banking products to the global financial services industry.
10 NCS IN Nucleus Software
Its two flagship products are FinnOne and FinnAxia
Source: Bloomberg

Strategy
Institutional Equities Team

Saurabh Mukherjea, CFA CEO, Institutional Equities (022) 30433174 saurabhmukherjea@ambitcapital.com
Research
Analysts Industry Sectors Desk-Phone E-mail
Nitin Bhasin - Head of Research E&C / Infra / Cement / Industrials (022) 30433241 nitinbhasin@ambitcapital.com
Aadesh Mehta, CFA Banking / Financial Services (022) 30433239 aadeshmehta@ambitcapital.com
Aakash Adukia Oil & Gas / Chemicals / Agri Inputs (022) 30433273 aakashadukia@ambitcapital.com
Abhishek Ranganathan, CFA Retail / Mid-caps (022) 30433085 abhishekr@ambitcapital.com
Achint Bhagat, CFA Cement / Roads / Home Building (022) 30433178 achintbhagat@ambitcapital.com
Ashvin Shetty, CFA Automobile (022) 30433285 ashvinshetty@ambitcapital.com
Bhargav Buddhadev Power Utilities / Capital Goods (022) 30433252 bhargavbuddhadev@ambitcapital.com
Deepesh Agarwal, CFA Power Utilities / Capital Goods (022) 30433275 deepeshagarwal@ambitcapital.com
Dhiraj Mistry, CFA Consumer (022) 30433264 dhirajmistry@ambitcapital.com
Gaurav Khandelwal, CFA Automobile (022) 30433132 gauravkhandelwal@ambitcapital.com
Gaurav Mehta, CFA Strategy / Derivatives Research (022) 30433255 gauravmehta@ambitcapital.com
Girisha Saraf Mid-caps / Small-caps (022) 30433211 girishasaraf@ambitcapital.com
Karan Khanna, CFA Strategy (022) 30433251 karankhanna@ambitcapital.com
Kushank Poddar Technology (022) 30433203 kushankpoddar@ambitcapital.com
Pankaj Agarwal, CFA Banking / Financial Services (022) 30433206 pankajagarwal@ambitcapital.com
Paresh Dave, CFA Healthcare (022) 30433212 pareshdave@ambitcapital.com
Parita Ashar, CFA Metals & Mining (022) 30433223 paritaashar@ambitcapital.com
Prashant Mittal, CFA Derivatives (022) 30433218 prashantmittal@ambitcapital.com
Rahil Shah Banking / Financial Services (022) 30433217 rahilshah@ambitcapital.com
Rakshit Ranjan, CFA Consumer (022) 30433201 rakshitranjan@ambitcapital.com
Ravi Singh Banking / Financial Services (022) 30433181 ravisingh@ambitcapital.com
Ritesh Gupta, CFA Oil & Gas / Chemicals / Agri Inputs (022) 30433242 riteshgupta@ambitcapital.com
Ritesh Vaidya, CFA Consumer (022) 30433246 riteshvaidya@ambitcapital.com
Ritika Mankar Mukherjee, CFA Economy / Strategy (022) 30433175 ritikamankar@ambitcapital.com
Ritu Modi Automobile (022) 30433292 ritumodi@ambitcapital.com
Sagar Rastogi Technology (022) 30433291 sagarrastogi@ambitcapital.com
Sumit Shekhar Economy / Strategy (022) 30433229 sumitshekhar@ambitcapital.com
Utsav Mehta, CFA E&C / Industrials (022) 30433209 utsavmehta@ambitcapital.com
Vivekanand Subbaraman, CFA Media (022) 30433261 vivekanands@ambitcapital.com
Sales
Name Regions Desk-Phone E-mail
Sarojini Ramachandran - Head of Sales UK +44 (0) 20 7614 8374 sarojini@panmure.com
Dharmen Shah India / Asia (022) 30433289 dharmenshah@ambitcapital.com
Dipti Mehta India / USA (022) 30433053 diptimehta@ambitcapital.com
Hitakshi Mehra India (022) 30433204 hitakshimehra@ambitcapital.com
Krishnan V India / Asia (022) 30433295 krishnanv@ambitcapital.com
Nityam Shah, CFA USA / Europe (022) 30433259 nityamshah@ambitcapital.com
Parees Purohit, CFA UK / USA (022) 30433169 pareespurohit@ambitcapital.com
Praveena Pattabiraman India / Asia (022) 30433268 praveenapattabiraman@ambitcapital.com
Shaleen Silori India (022) 30433256 shaleensilori@ambitcapital.com
Singapore
Pramod Gubbi, CFA Director Singapore +65 8606 6476 pramodgubbi@ambitpte.com
Shashank Abhisheik Singapore +65 6536 1935 shashankabhisheik@ambitpte.com
USA / Canada
Ravilochan Pola - CEO Americas +1(646) 361 3107 ravipola@ambitpte.com
Production
Sajid Merchant Production (022) 30433247 sajidmerchant@ambitcapital.com
Sharoz G Hussain Production (022) 30433183 sharozghussain@ambitcapital.com
Nikhil Pillai Database (022) 30433265 nikhilpillai@ambitcapital.com
E&C = Engineering & Construction

Strategy
ITC LTD (ITC IN, BUY) Idea Cellular Ltd (IDEA IN, NOT RATED)
450 250
400 200
350 150
300 100
250
50
200
0
Dec-12
Feb-13
Apr-13
Aug-13
Dec-13
Feb-14
Apr-14
Aug-14
Dec-14
Jun-13
Oct-13
Jun-14
Oct-14
Jan-13
Apr-13
Jul-13
Oct-13
Jan-14
Apr-14
Jul-14
Oct-14
Jan-15
Apr-15
Jul-15
Oct-15
Jan-16
ITC LTD
IDEA CELLULAR LTD

HCL Technologies Ltd (HCLT IN, BUY) Tata Consultancy Svcs Ltd (TCS IN, BUY)
1,200 3,000
1,000 2,500
800 2,000
600 1,500
400 1,000
200 500
0 0
Dec-12
Mar-13
Sep-13
Dec-13
Mar-14
Sep-14
Dec-14
Mar-15
Sep-15
Dec-15
Dec-12
Mar-13
Sep-13
Dec-13
Mar-14
Sep-14
Dec-14
Mar-15
Sep-15
Dec-15
Jun-13
Jun-14
Jun-15
Jun-13
Jun-14
Jun-15
HCL TECHNOLOGIES LTD TATA CONSULTANCY SVCS LTD
Source: Bloomberg, Ambit Capital research Source: Bloomberg, Ambit Capital research
MRF Ltd (MRF IN, NOT RATED) Gujarat Pipavav Port Ltd (GPPV IN, NOT RATED)
50,000 300
40,000 250
200
30,000
150
20,000
100
10,000 50
0 0
Dec-12
Mar-13
Sep-13
Dec-13
Mar-14
Sep-14
Dec-14
Mar-15
Sep-15
Jun-13
Jun-14
Jun-15
Jan-13
Apr-13
Jul-13
Oct-13
Jan-14
Apr-14
Jul-14
Oct-14
Jan-15
Apr-15
Jul-15
Oct-15
Jan-16
MRF Ltd GUJARAT PIPAVAV PORT LTD

Strategy
Tata Motors (TTMT IN, BUY) Atul Ltd (ATLP IN, NOT RATED)
700 2,000
600
500 1,500
400
1,000
300
200 500
100
0 0
Jan-13
Apr-13
Jul-13
Oct-13
Jan-14
Apr-14
Jul-14
Oct-14
Jan-15
Apr-15
Jul-15
Oct-15
Jan-16
Jan-13
Apr-13
Jul-13
Oct-13
Jan-14
Apr-14
Jul-14
Oct-14
Jan-15
Apr-15
Jul-15
Oct-15
Jan-16
TATA MOTORS LTD ATUL LTD
Torrent Pharma Ltd (TRP IN, NOT RATED) Lupin Ltd (LPC IN, NOT RATED)
1,800 2,500
1,600
1,400 2,000
1,200
1,000 1,500
800 1,000
600
400 500
200
0 0
Dec-12
Mar-13
Sep-13
Dec-13
Mar-14
Sep-14
Dec-14
Mar-15
Sep-15
Dec-12
Mar-13
Sep-13
Dec-13
Mar-14
Sep-14
Dec-14
Mar-15
Sep-15
Jun-13
Jun-14
Jun-15
Jun-13
Jun-14
Jun-15
TORRENT PHARMACEUTICALS LTD LUPIN LTD
Persistent Systems Ltd (PSYS IN, SELL) Kajaria Ceramics Ltd (KJC IN, NOT RATED)
1,000 1,000
800 800
600 600
400 400
200 200
0 0
Dec-12
Mar-13
Jun-13
Sep-13
Dec-13
Mar-14
Jun-14
Sep-14
Dec-14
Mar-15
Jun-15
Sep-15
Dec-15
Dec-12
Mar-13
Sep-13
Dec-13
Mar-14
Sep-14
Dec-14
Mar-15
Sep-15
Jun-13
Jun-14
Jun-15
PERSISTENT SYSTEMS LTD KAJARIA CERAMICS LTD

Strategy
Britannia Industries Ltd (BRIT IN, SELL) Glaxosmithkline Consumer (SKB IN, SELL)
4,000 7,000
3,500 6,000
3,000 5,000
2,500
4,000
2,000
3,000
1,500
1,000 2,000
500 1,000
0 0
Dec-12
Mar-13
Sep-13
Dec-13
Mar-14
Sep-14
Dec-14
Mar-15
Sep-15
Dec-12
Mar-13
Sep-13
Dec-13
Mar-14
Sep-14
Dec-14
Mar-15
Sep-15
Jun-13
Jun-14
Jun-15
Jun-13
Jun-14
Jun-15
BRITANNIA INDUSTRIES LTD GLAXOSMITHKLINE CONSUMER HEA
PI Industries Ltd (PI IN, BUY) Mindtree Ltd (MTCL IN, SELL)
800 1,800
700 1,600
600 1,400
500 1,200
1,000
400
800
300 600
200 400
100 200
0 0
Dec-12
Mar-13
Sep-13
Dec-13
Mar-14
Sep-14
Dec-14
Mar-15
Sep-15
Dec-12
Mar-13
Sep-13
Dec-13
Mar-14
Sep-14
Dec-14
Mar-15
Sep-15
Dec-15
Jun-13
Jun-14
Jun-15
Jun-13
Jun-14
Jun-15
PI INDUSTRIES LTD MINDTREE LTD
Page Industries Ltd (PAG IN, BUY) Finolex Cables Ltd (FNXC IN, BUY)
18,000 350
16,000 300
14,000
12,000 250
10,000 200
8,000 150
6,000 100
4,000
2,000 50
0 0
Dec-12
Mar-13
Jun-13
Sep-13
Dec-13
Mar-14
Jun-14
Sep-14
Dec-14
Mar-15
Jun-15
Sep-15
Dec-12
Mar-13
Sep-13
Dec-13
Mar-14
Sep-14
Dec-14
Mar-15
Sep-15
Jun-13
Jun-14
Jun-15
PAGE INDUSTRIES LTD FINOLEX CABLES LTD

Strategy
Supreme Industries Ltd (SI IN, BUY) Berger Paints India Ltd (BRGR IN, BUY)
800 300
700 250
600
500 200
400 150
300
200 100
100 50
0
0
Dec-12
Mar-13
Jun-13
Sep-13
Dec-13
Mar-14
Jun-14
Sep-14
Dec-14
Mar-15
Jun-15
Sep-15
Dec-12
Mar-13
Sep-13
Dec-13
Mar-14
Sep-14
Dec-14
Mar-15
Sep-15
Jun-13
Jun-14
Jun-15
SUPREME INDUSTRIES LTD BERGER PAINTS INDIA LTD
Eicher Motors Ltd (EIM IN, SELL) TVS Motor (TVSL IN, BUY)
25,000 350
300
20,000
250
15,000 200
10,000 150
100
5,000
50
0 0
Dec-12
Mar-13
Sep-13
Dec-13
Mar-14
Sep-14
Dec-14
Mar-15
Sep-15
Dec-12
Mar-13
Sep-13
Dec-13
Mar-14
Sep-14
Dec-14
Mar-15
Sep-15
Jun-13
Jun-14
Jun-15
Jun-13
Jun-14
Jun-15
EICHER MOTORS LTD TVS MOTOR CO LTD
Sundram Fasteners (SF IN, NOT RATED) Ajanta Pharma Ltd (AJP IN, NOT RATED)
250 1,800
1,600
200 1,400
1,200
150 1,000
100 800
600
50 400
200
0 0
Jan-13
Apr-13
Jul-13
Oct-13
Jan-14
Apr-14
Jul-14
Oct-14
Jan-15
Apr-15
Jul-15
Oct-15
Jan-16
Jan-13
Apr-13
Jul-13
Oct-13
Jan-14
Apr-14
Jul-14
Oct-14
Jan-15
Apr-15
Jul-15
Oct-15
Jan-16
SUNDRAM FASTENERS LTD AJANTA PHARMA LTD

Strategy
Hatsun Agro Products Ltd (HTSMF IN, NOT RATED) La Opala Rg Ltd (LOG IN, NOT RATED)
500 700
600
400
500
300 400
200 300
200
100
100
0 0
Jan-13
Apr-13
Jul-13
Oct-13
Jan-14
Apr-14
Jul-14
Oct-14
Jan-15
Apr-15
Jul-15
Oct-15
Jan-16
Jan-13
Apr-13
Jul-13
Oct-13
Jan-14
Apr-14
Jul-14
Oct-14
Jan-15
Apr-15
Jul-15
Oct-15
Jan-16
HATSUN AGRO PRODUCTS LTD LA OPALA RG LTD
Hindustan Unilever Ltd (HUVR IN, BUY) Vinati Organics Ltd (VO IN, NOT RATED)
1,200 700
1,000 600
800 500
400
600
300
400
200
200 100
0 0
Dec-12
Mar-13
Sep-13
Dec-13
Mar-14
Sep-14
Dec-14
Mar-15
Sep-15
Jun-13
Jun-14
Jun-15
Jan-13
Apr-13
Jul-13
Oct-13
Jan-14
Apr-14
Jul-14
Oct-14
Jan-15
Apr-15
Jul-15
Oct-15
Jan-16
HINDUSTAN UNILEVER LTD VINATI ORGANICS LTD
Marico Ltd (MRCO IN, BUY) AIA Engineering Ltd (AIAE IN, SELL)
500 1,400
1,200
400
1,000
300 800
200 600
400
100
200
0 0
Dec-12
Mar-13
Jun-13
Sep-13
Dec-13
Mar-14
Jun-14
Sep-14
Dec-14
Mar-15
Jun-15
Sep-15
Dec-12
Mar-13
Jun-13
Sep-13
Dec-13
Mar-14
Jun-14
Sep-14
Dec-14
Mar-15
Jun-15
Sep-15
MARICO LTD AIA ENGINEERING LTD

Strategy
TCPL Packaging Ltd (TCPL IN, NOT RATED) Poly Medicure Ltd (PLM IN, NOT RATED)
800 600
700 500
600
500 400
400 300
300 200
200
100 100
0 0
Jan-13
Apr-13
Jul-13
Oct-13
Jan-14
Apr-14
Jul-14
Oct-14
Jan-15
Apr-15
Jul-15
Oct-15
Jan-16
Jan-13
Apr-13
Jul-13
Oct-13
Jan-14
Apr-14
Jul-14
Oct-14
Jan-15
Apr-15
Jul-15
Oct-15
Jan-16
TCPL PACKAGING LTD POLY MEDICURE LTD
Atul Auto Ltd (ATA IN, NOT RATED) Avanti Feeds Ltd (AVNT IN, NOT RATED)
800 800
700 700
600 600
500 500
400 400
300 300
200 200
100 100
0 0
Apr-13
Apr-14
Apr-15
Apr-13
Apr-14
Apr-15
Jan-13
Jul-13
Oct-13
Jan-14
Jul-14
Oct-14
Jan-15
Jul-15
Oct-15
Jan-16
Jan-13
Jul-13
Oct-13
Jan-14
Jul-14
Oct-14
Jan-15
Jul-15
Oct-15
Jan-16
ATUL AUTO LTD AVANTI FEEDS LTD
KPR Mill Ltd (KPR IN, NOT RATED) Fiem Industries Ltd (FIEM IN, NOT RATED)
1,000 1,000
800 800
600 600
400 400
200 200
0 0
Jan-13
Apr-13
Jul-13
Oct-13
Jan-14
Apr-14
Jul-14
Oct-14
Jan-15
Apr-15
Jul-15
Oct-15
Jan-16
Jan-13
Apr-13
Jul-13
Oct-13
Jan-14
Apr-14
Jul-14
Oct-14
Jan-15
Apr-15
Jul-15
Oct-15
Jan-16
KPR MILL LTD FIEM INDUSTRIES LTD

Strategy
Himatsingka Seide Ltd (HSS IN, NOT RATED) Fluidomat Ltd (FDM IN, NOT RATED)
250 350
300
200
250
150 200
100 150
100
50
50
0 0
Jan-13
Apr-13
Jul-13
Oct-13
Jan-14
Apr-14
Jul-14
Oct-14
Jan-15
Apr-15
Jul-15
Oct-15
Jan-16
Jan-13
Apr-13
Jul-13
Oct-13
Jan-14
Apr-14
Jul-14
Oct-14
Jan-15
Apr-15
Jul-15
Oct-15
Jan-16
HIMATSINGKA SEIDE LTD FLUIDOMAT LTD
Multibase India Ltd (MUIL IN, NOT RATED) Nucleus Software Exports Ltd (NCS IN, NOT RATED)
350 400
300 350
250 300
250
200
200
150
150
100 100
50 50
0 0
Jan-13
Apr-13
Jul-13
Oct-13
Jan-14
Apr-14
Jul-14
Oct-14
Jan-15
Apr-15
Jul-15
Oct-15
Jan-16
Jan-13
Apr-13
Jul-13
Oct-13
Jan-14
Apr-14
Jul-14
Oct-14
Jan-15
Apr-15
Jul-15
Oct-15
Jan-16
MULTIBASE INDIA LTD NUCLEUS SOFTWARE EXPORTS LTD

Strategy
Explanation of Investment Rating

Investment Rating Expected return (over 12-month)
BUY >10%
SELL <10%
NO STANCE We have forward looking estimates for the stock but we refrain from assigning valuation and recommendation
UNDER REVIEW We will revisit our recommendation, valuation and estimates on the stock following recent events
NOT RATED We do not have any forward looking estimates, valuation or recommendation for the stock
Disclaimer
This report or any portion hereof may not be reprinted, sold or redistributed without the written consent of Ambit Capital. AMBIT Capital Research is disseminated and available primarily electronically,
and, in some cases, in printed form.
Addit ional information on reco mme nde d securit ies is available on request .
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Disclosures
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27. There is no m ateri al disci plinary acti on that has been taken by any regul atory authority im pacti ng equity research anal ysis acti vities .
28. All m arket data i ncl uded i n this report are dated as at the previ ous s tock m arket cl osi ng day from the date of this report.
29. Ambi t and/ or its ass oci ates have fi nanci al i nterest/equity s harehol di ng i n HCL Tech, TCS, Lupi n, Bri tanni a, Hi ndus tan Unilever, TCP L P ack agi ng & Fi em Industri es.
Analy st Ce rtif icatio n

Each of the anal ysts identifi ed i n this report certi fies , with res pect to the com pani es or securiti es that the indivi dual analys es, that (1) the vi ews expressed i n this report refl ect his or her personal vi ews about all of the subject
com panies and s ecuriti es and (2) no part of his or her com pens ati on was , is or will be directl y or indirectl y dependent on the specifi c recommendations or vi ews expressed in this report.
Copyri ght 2015 AMBIT Capital Private Limited. All ri ghts res erved.
Ambit Capital Pvt. Ltd.

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Lower Parel, Mumbai 400 013, India.
Phone: +91-22-3043 3000 | Fax: +91-22-3043 3100
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Strategy

THEMATIC January 05, 2016

Ten Baggers 5.0 Exhibit A: Ten baggers 5.0

VO IN Vinati Organics# 360

Philosophy and framework. 3

Does this approach work?........................................................................................ 6

Ten baggers 5.0... 8

Greatness framework on sub-BSE500 firms.12

Performance check: Jan 2015 ten-bagger list.... 13

Performance check: Jan 2015s sub-BSE500 firms. 14

Valuations - A long-term perspective!..................................................................... 15

Appendix January 2016 ten-baggers business activity description.17

January 05, 2016 Ambit Capital Pvt. Ltd. Page 2

Philosophy and framework

January 05, 2016 Ambit Capital Pvt. Ltd. Page 3

Exhibit 2: Factors used for quantifying greatness

January 05, 2016 Ambit Capital Pvt. Ltd. Page 4

232 firms 87 firms Thus, each of these six

respective threshold or not.

These scores are then

Exhibit 4: Zones of greatness - Financial summary

January 05, 2016 Ambit Capital Pvt. Ltd. Page 5

Does this approach work?

January 05, 2016 Ambit Capital Pvt. Ltd. Page 6

Tenbagger iteration return index return cumulative alpha

Source: Bloomberg, Ambit Capital research

Exhibit 8: Performance of the sub-BSE500 ten-bagger portfolios (since 14 January

Source: Bloomberg, Ambit Capital research

January 05, 2016 Ambit Capital Pvt. Ltd. Page 7

Ten baggers 5.0

Entrants: AIA Engineering, Ajanta Pharma, Hatsun Agro Products, La Opala,

January 05, 2016 Ambit Capital Pvt. Ltd. Page 8

January 05, 2016 Ambit Capital Pvt. Ltd. Page 9

Exhibit 11: January 2016 ten baggers financial snapshot

January 05, 2016 Ambit Capital Pvt. Ltd. Page 10

January 05, 2016 Ambit Capital Pvt. Ltd. Page 11

Greatness framework on sub-BSE500 firms

January 05, 2016 Ambit Capital Pvt. Ltd. Page 12

Performance check: Jan 2015 ten-bagger list

January 05, 2016 Ambit Capital Pvt. Ltd. Page 13

Performance check: Jan 2015s sub-BSE500 ten

Mcap Price Performance

January 05, 2016 Ambit Capital Pvt. Ltd. Page 14

Valuations - A long-term perspective!

Further, that valuations do not play an overwhelming role in shaping investment

January 05, 2016 Ambit Capital Pvt. Ltd. Page 15

Exhibit 18: Tenbaggers 4.0 - Beginning-period P/B and stock returns

Source: Bloomberg, Ambit Capital research

Source: Bloomberg, Ambit Capital research

January 05, 2016 Ambit Capital Pvt. Ltd. Page 16

Appendix - January 2016 ten baggers

January 05, 2016 Ambit Capital Pvt. Ltd. Page 17

Sr. No. Ticker Company Business description

January 05, 2016 Ambit Capital Pvt. Ltd. Page 18

Sub-BSE500 ten baggers business description

January 05, 2016 Ambit Capital Pvt. Ltd. Page 19

Institutional Equities Team

January 05, 2016 Ambit Capital Pvt. Ltd. Page 20

Source: Bloomberg, Ambit Capital research

MRF Ltd GUJARAT PIPAVAV PORT LTD

January 05, 2016 Ambit Capital Pvt. Ltd. Page 21

PERSISTENT SYSTEMS LTD KAJARIA CERAMICS LTD

January 05, 2016 Ambit Capital Pvt. Ltd. Page 22