Q3FY13 Earnings Preview

Earnings Preview
(Oct - Dec 2012)
January 2013
IDFC Securities Research

(Dir) +91-22-6622 2600
Email: research@idfc.com
SEBI Registration Nos.: INB23 12914 37, INF23 12914 37, INB01 12914 33, INF01 12914 33.
For Private Circulation only. Important

disclosures appear at the back of this report
Q3FY13E earnings highlights

OurQ3FY13
Q3FY13Sensex
Sensexearnings
earningsgrowth
growth(ex-Financials,
(ex-Financials,pending
pendingreinitiating
reinitiatingcoverage)
coverage)stands
standsatat5.3%
5.3%yoy;
yoy;Post
Postinclusion
inclusionofofBloomberg
Bloomberg
Our
consensusestimates
estimatesfor
forfinancials
financialsininSensex,
Sensex,the
theearnings
earningsgrowth
growthstands
standsatat8.6%
8.6%yoy,
yoy,compared
comparedtoto5.2%
5.2%yoy
yoyininQ2FY13
Q2FY13
consensus
While commodities are expected to clock bottom-line growth of 11.4% yoy, earnings of non-commodities (ex-Financials) are likely to be
While commodities are expected to clock bottom-line growth of 11.4% yoy, earnings of non-commodities (ex-Financials) are likely to be
muted at 2.2% yoy; While Consumer Goods (16.5% yoy) is expected to report strong earnings growth, Telecom (-16.3% yoy) and
muted at 2.2% yoy; While Consumer Goods (16.5% yoy) is expected to report strong earnings growth, Telecom (-16.3% yoy) and
Automobiles (-7.5%yoy) are expected to report weak bottom-line growth
Automobiles (-7.5%yoy) are expected to report weak bottom-line growth
Top-linegrowth
growthofofSensex
Sensex(ex-Financials,
(ex-Financials,pending
pendingreinitiating
coverage) isisexpected
expectedatat9.6%
9.6%yoy,
yoy,Post
Postinclusion
inclusionofofBloomberg
Bloombergconsensus
consensus
Top-line
estimatesfor
forfinancials
financialsininSensex,
Sensex,the
theexpected
expectedgrowth
growthrate
rateisis10%;
10%;Top-line
Top-linegrowth
growthofofnon-commodities
non-commodities(ex-Financials)
(ex-Financials)remains
remainsrobust
robustatat
estimates
15.4%yoy;
yoy;Sectors
Sectorslike
likePharmaceuticals
Pharmaceuticals(10.5%
(10.5%yoy),
yoy),Consumer
ConsumerGoods
Goods(14%
(14%yoy)
yoy)and
andConstruction
Construction(14%
(14%yoy)
yoy)are
areexpected
expectedtotoreport
report
15.4%
strongtop-line
top-linegrowth;
growth;
strong
We estimate EBITDA margin for Sensex (ex-Financials) to remain flat with respect to comparable margin (15%) in Q2FY13; Margins of
We estimate EBITDA margin for Sensex (ex-Financials) to remain flat with respect to comparable margin (15%) in Q2FY13; Margins of
commoditiesstocks
stocksare
areexpected
expectedtotosee
seecompression
compressionofof~20bp
~20bpyoy
yoywhile
whilenon
noncommodities
commodities(ex-Financials)
(ex-Financials)are
areexpected
expectedtotoreport
report~110bp
~110bp
commodities
yoy margin compression
yoy margin compression
IDFCuniverse
universe(ex-Financials)
(ex-Financials)isisexpected
expectedtotopost
postaatop-line
top-linegrowth
growthofof7.5%
7.5%yoy
yoyand
andbottom-line
bottom-linedecline
declineofof4.1%
4.1%yoy
yoyininQ3FY13
Q3FY13due
duetotoyoy
yoy
IDFC
declineininPAT
PATofofMetals
Metalsand
andOil
Oil&&Gas
Gasstocks
stocks; ;EBITDA
EBITDAmargins
marginsare
areexpected
expectedtotodecline
declineby
by~120bp
~120bpyoy
yoytoto14.6%
14.6%
decline
OurSensex
SensexEPS
EPS(including
(includingBloomberg
Bloombergconsensus
consensusest
estfor
forFinancials)
Financials)remains
remainsatatRs1188
Rs1188(8%
(8%yoy)
yoy)for
forFY13
FY13and
andRs1345
Rs1345(13%
(13%yoy)
yoy)for
forFY14
FY14
Our
January 2013
Sensex earnings (ex-Financials) est to be up by 5.3%yoy

Earningsofofcommodities
commoditiesare
areexpected
expectedtotogrow
grow11.4%
11.4%yoy
yoydue
duetotoTata
TataSteel
Steel(expected
(expectedtotoreport
reportprofit
profitininQ3FY13
Q3FY13compared
compared
Earnings
reportedloss
lossininQ3FY12),
Q3FY12),which
whichoffsets
offsetsthe
theyoy
yoydecline
declineininearnings
earningsofofrest
restofofthe
theMetals
Metalsstocks
stocksininSensex;
Sensex;Among
AmongOil
Oil&&
totoreported
Gasstocks,
stocks,12.6%
12.6%earnings
earningsgrowth
growthininReliance
Reliancetotooffset
offsetearnings
earningsdecline
declineexpected
expectedininGAIL
GAIL(-13.4%
(-13.4%yoy)
yoy)
Gas
Non-commodities (ex-Financials)
(ex-Financials)are
areexpected
expectedtotoclock
clockmuted
mutedbottom-line
bottom-linegrowth
growthofof2.2%
2.2%yoy
yoyas
asearnings
earningsdecline
declineinin
Non-commodities
Automobiles(-7.5%
(-7.5%yoy)
yoy)totooffset
offsetgrowth
growthininConsumer
ConsumerGoods
Goods(16.5%
(16.5%yoy)
yoy)
Automobiles
(Rs m)
Sector
Net Sales
Q3FY13E
Q3FY12
EBITDA
% chg yoy
Q3FY13E
Q3FY12
Profit After Tax

% chg yoy
Q3FY13E
Q3FY12
% chg yoy
Automobiles
503,562
454,518
10.8
63,817
64,170
(0.6)
32,725
35,366
(7.5)
Construction
143,783
125,987
14.1
14,390
12,088
19.0
9,467
8,924
6.1
83,268
72,998
14.1
24,379
21,096
15.6
18,310
15,718
16.5
IT services
163,050
143,347
13.7
44,819
43,576
2.9
34,356
32,463
5.8
Metals
442,613
446,918
(1.0)
55,469
47,160
17.6
19,072
15,929
19.7
Oil & Gas
603,428
559,713
7.8
69,399
74,877
(7.3)
43,968
40,653
8.2
Pharmaceuticals
44,738
40,474
10.5
11,850
12,615
(6.1)
8,229
8,277
(0.6)
Power Equipment
38,964
36,918
5.5
6,533
6,599
(1.0)
4,700
5,014
(6.3)
Power Utilities
88,055
46,105
91.0
18,304
8,714
110.1
6,334
5,234
21.0
Telecoms
70,992
64,668
9.8
22,446
20,855
7.6
2,987
3,567
(16.3)
Consumer goods
(Rs m)
Financials *
NII
Pre-provisioning profit
Profit After Tax
135,446
116,246
16.5
113,481
92,048
23.3
63,549
53,215
19.4
Commodities
1,046,041
1,006,631
3.9
124,868
122,037
2.3
63,041
56,582
11.4
Non-commodities *
1,271,857
1,101,262
15.5
320,018
281,761
13.6
180,658
167,777
7.7
Sensex *
2,317,898
2,107,892
10.0
444,886
403,798
10.2
243,699
224,360
8.6
* - Financials estimates from Bloomberg consensus, pending reinitiating coverage of the sector
January 2013
Slower topline growth trend continues

Sensexrevenue
revenuegrowth
growth (ex-Financials)
(ex-Financials)atat 9.6%
9.6%yoy
yoy
Sensex
18.2 16.9
17.8
12.8
16
10.0
8
5.2
1.8
Dec-12E
Sep-12
Jun-12
Mar-12
Dec-11
Sep-11
Jun-11
Mar-11
Dec-10
Sep-10
Jun-10
Mar-10
Dec-09
Sep-09
Jun-09
Mar-09
(2.3) (7.9)
Dec-08
-8
Sensex op.
op.margin
margin (ex-Financials)
(ex-Financials)totodecline
decline50bp
50bpyoy
yoy
Sensex
EBITDAmargins
marginsofofSensex
Sensexcompanies
companies(ex-Financials)
(ex-Financials)
EBITDA
expectedtotoreduce
reduceby
by~50bp
~50bpyoy
yoy(flat
(flatqoq);
qoq);Including
Including
expected
Financials(Bloomberg
(BloombergConsensus
Consensusestimate),
estimate),Sensex
Sensex
Financials
EBITDAmargins
marginsare
areexpected
expectedtotoremain
remainflat
flatyoy
yoy
EBITDA
Sharpmargin
margincompression
compressionisisexpected
expectedininPharma
Pharma(down
(down
Sharp
~470bpyoy),
yoy),ITITServices
Services(down
(down~290bp
~290bpyoy)
yoy)while
while
~470bp
marginsare
areexpected
expectedtotoimprove
improveininConsumer
Consumergoods
goods
margins
andConstruction
Construction
and
January 2013
Topline
linegrowth
growthininnon-commodities
non-commodities(ex-Financials)
(ex-Financials)totobe
be
Top
led by
by Consumer
Consumer Goods
Goods and
and Construction
Construction (both
(both 14.1%
14.1%
led
yoy);Power
PowerUtilities
Utilitiestotoreport
report91%
91%yoy
yoygrowth
growthled
ledby
bylow
low
yoy);
baseeffect
effectinincase
caseofofTata
TataPower
Power(write
(writeoff
offininIndonesian
Indonesian
base
miningstake
stakeininQ3FY12)
Q3FY12)
mining
EBITDA margin (%)
26
23.2
23.5
24.2
22.9
23
22.5
20.7
20.4
20
20.2
18.9
19.6
19.0
18.8
19.2
17
14
Dec-12E
25.3
Jun-12
19.9
23.0
Dec-11
24
25.9
22.6
Jun-11
22.6
Overall top-line
top-line growth
growth (excluding
(excluding Financials,
Financials, pending
pending
Overall
coverage)isislower
loweratat9.6%
9.6%yoy
yoy(vs
(vscomparable
comparable
reinitiating
12.5%ininQ2FY13)
Q2FY13)due
duetotoweak
weakgrowth
growthinincommodities
commoditiesatat
12.5%
4%yoy (weak
(weak growth
growth inin Metals);
Metals); Including
Including Financials
Financials
4%yoy
(BloombergConsensus
Consensusestimate),
estimate),Sensex
Sensextopline
toplinetotogrow
grow
(Bloomberg
10.%(lower
(lowerthan
than12.8%
12.8%ininQ2FY13)
Q2FY13)
10%
Dec-10
28.3
Jun-10
32
Dec-09
Net sales grow th (%)

31.1
Sensex earnings growth ex-Financials at 5.3% yoy

Rolling quarter Sensex earnings growths
Sensex PAT grow th (%)
100
78.5
75
50
32.5
28.4
30.5
25
16.7
13.8
9.7
7.9
8.2
Jun-11
Sep-11
14.5
5.2
4.2
8.6
Dec-09
Mar-10
Jun-10
PAT (Rs bn)
Sep-10
Dec-10
Mar-11
Sensex qoq profit grow th (RHS)
300
30%
200
15%
January 2013
Dec-12E
Sep-12
Jun-12
Mar-12
Dec-11
Sep-11
Jun-11
Mar-11
Dec-10
Sep-10
Jun-10
Mar-10
Dec-09
Sep-09
Jun-09
0%
Mar-09
100
-15%
Dec-11
Mar-12
Jun-12
Sep-12
Dec-12E
Sensexearnings
earningsgrowth
growthtotobe
bedriven
drivenby
byTata
TataSteel
Steel
Sensex
(Q3FY13EPAT
PATRs1.4bn
Rs1.4bnvs
vsQ3FY12
Q3FY12loss
lossRs4bn)
Rs4bn)and
and
(Q3FY13E
Reliance(+12.6%
(+12.6%yoy
yoyincrease
increaseininPAT)
PAT)
Reliance
PATmargins
marginsfor
forSensex
Sensexcompanies
companies(ex-Financials)
(ex-Financials)
PAT
areexpected
expectedtotodecline
decline35bp
35bpyoy
yoy(flat
(flatqoq)
qoq)toto8.2%;
8.2%;
are
however,including
includingBloomberg
Bloombergconsensus
consensusestimates
estimates
however,
forFinancials,
Financials,Sensex
SensexPAT
PATmargins
marginstotoremain
remainflat
flat
for
qoq.
qoq.
5
Financials* and Oil & Gas to drive Sensex earnings

Q3FY13 sector-wise contribution to Sensex earnings (% yoy)
Sector contributors to Sensex earnings
80.0
60.0
53.4
40.0
17.1
20.0
16.3
13.4
9.8
5.7
2.8
(1.6)
(3.0)
(13.7)
Automobiles
Telecoms
(0.2)
Power Equipment
Pharmaceuticals
Construction
Power Utilities
IT services
Metals
Consumer goods
(20.0)
Oil & Gas
Financials
(40.0)
January 2013
Earnings growth of IDFC universe ex Financials to decline 4.1% yoy

(Rs m)
Sector
Net Sales
EBITDA
Profit After Tax
Q3FY13E
Q3FY12
% chg yoy
Q3FY13E
Q3FY12
% chg yoy
Q3FY13E
Q3FY12
% chg yoy
Alcoholic Beverages
35,142
32,469
8.2
4,404
3,198
37.7
1,158
984
17.7
Automobiles
867,181
791,037
9.6
106,330
107,551
(1.1)
54,263
59,294
(8.5)
Cement
113,759
106,500
6.8
22,579
20,676
9.2
14,137
12,882
9.7
Construction
258,354
237,543
8.8
28,317
25,740
10.0
10,920
11,927
(8.4)
Consumer goods
215,966
187,562
15.1
51,646
44,558
15.9
38,119
32,988
15.6
Education
3,587
3,655
(1.9)
913
963
(5.2)
133
247
(46.1)
Engineering
74,457
71,475
4.2
8,140
5,585
45.7
6,493
4,723
37.5
Hospitals
23,160
13,194
75.5
3,103
2,119
46.4
959
940
2.0
Logistics
13,552
12,551
8.0
3,252
3,386
(4.0)
2,670
2,745
(2.7)
Infra Developers
158,118
135,261
16.9
36,574
30,304
20.7
4,655
11,065
(57.9)
IT services
513,606
441,578
16.3
127,805
112,581
13.5
96,831
83,064
16.6
Media
31,670
28,458
11.3
7,317
6,271
16.7
3,230
2,135
51.3
Metals
1,089,428
1,096,677
(0.7)
183,449
198,397
(7.5)
102,522
111,712
(8.2)
Oil & Gas
3,838,234
3,641,082
5.4
382,440
439,928
(13.1)
254,032
286,650
(11.4)
Others
42,098
39,226
7.3
7,381
6,979
5.8
2,487
1,824
36.3
Pharmaceuticals
179,837
169,849
5.9
42,075
43,641
(3.6)
24,113
20,282
18.9
Power Equipment
202,651
187,886
7.9
24,200
24,286
(0.4)
15,341
16,578
(7.5)
Power Utilities
387,098
297,512
30.1
77,299
57,114
35.3
28,909
27,634
4.6
Real Estate
39,750
38,186
4.1
15,270
15,242
0.2
6,031
8,005
(24.7)
Retail
69,485
60,784
14.3
5,822
5,088
14.4
2,124
1,868
13.7
Telecoms
313,931
287,314
9.3
97,225
89,563
8.6
14,086
14,552
(Rs m)
NII
Pre-provisioning profit
(3.2)
Profit After Tax
Commodities
5,041,421
4,844,259
4.1
588,468
659,002
(10.7)
370,691
411,243
(9.9)
Non-commodities Ex Financials
3,429,645
3,035,539
13.0
647,072
584,169
10.8
312,523
300,854
3.9
IDFC Securities Ex Financials
8,471,066
7,879,798
7.5
1,235,540
1,243,171
(0.6)
683,213
712,098
(4.1)
* - Financials estimates excluded, pending reinitiation coverage of the sector
January 2013
Sector Winners & Losers

Winners:
Winners:
ConsumerGoods:
Goods:Price
Priceincreases
increasesand
andimprovement
improvementiningross
grossmargins
marginswill
willdrive
drive
Consumer
16%EBITDA
EBITDAgrowth
growthfor
forConsumer
Consumergoods
goodsstocks
stocksininIDFC
IDFCuniverse
universe
aa16%
Pharmaceuticals: :Aided
Aidedby
bycontinued
continuedstrong
stronggrowth
growthininUS,
US,we
weexpect
expectsteady
steady
Pharmaceuticals
growthininrevenues
revenues(+17%
(+17%yoy)
yoy)for
forcoverage
coverageuniverse,;
universe,;Margins
Marginswill
willalso
alsostay
stay
growth
stronggiven
giventhe
thecontinued
continuedweakness
weaknessininthe
therupee
rupee
strong
Media:The
Thead
adenvironment
environmenthas
hasshown
shownimprovement
improvementininpockets,
pockets,while
whilethe
the
Media:
mandateon
ondigitization
digitizationhas
hasadded
addedstrong
strongmomentum
momentumtotothe
theTV
TVdistribution
distribution
mandate
segment
segment
Losers:
Losers:
Automobiles: :Despite
Despitepick-up
pick-upinindemand
demand(led
(ledby
byfestive
festiveseason)
season)and
andaanon-festive
non-festivebase
base
Automobiles
sixofofthe
theeight
eightcompanies
companiesininour
ourcoverage
coverageuniverse
universeare
areexpected
expectedtotopost
postearnings
earnings
six
decline,similar
similartoto2Q,
2Q,due
duetotovarious
variousissues
issuessuch
suchas
asbase
baseeffect
effectand
andstandalone
standaloneloss
loss
decline,
(TataMotors),
Motors),margin
margincontraction
contraction(Hero),
(Hero),higher
highertax
taxrate
rate(Bajaj)
(Bajaj)
(Tata
Metals: :Muted
Mutedend-use
end-usedemand
demand, ,seasonal
seasonalfactors
factorsand
andhigher
higherthreat
threatofofimports
importsimpacting
impacting
Metals
realisations
realisations
January 2013
Sensex earnings growth* expected at 8.6% yoy in FY13

(% yoy)
Sector
Net Sales
EBITDA
Profit After Tax
FY12
FY13E
FY14E
FY12
FY13E
FY14E
FY12
FY13E
FY14E
Automobiles
28.3
15.8
14.1
22.7
9.2
18.9
27.8
(7.4)
27.7
Construction
21.1
16.1
8.0
10.1
14.0
8.1
20.9
7.7
3.7
Consumer goods
15.3
17.4
16.7
20.4
20.6
19.6
23.3
21.6
18.5
Financial *
24.2
17.3
20.7
18.8
18.5
21.5
28.6
26.0
21.9
IT Services
24.3
19.5
7.1
20.6
14.9
6.5
19.7
16.3
9.5
Metals
16.2
(1.1)
5.0
(5.4)
0.9
15.9
(15.3)
1.6
8.3
Oil & Gas
28.7
(1.5)
1.7
7.6
1.6
2.9
5.5
1.9
1.5
Pharmaceuticals
25.2
19.9
9.5
46.5
24.5
7.5
34.5
21.1
8.0
Power Equipment
13.6
6.3
(7.1)
13.6
2.4
(13.3)
18.4
(2.5)
(14.0)
Power Utilities
23.4
14.2
22.0
4.5
17.7
23.4
(24.0)
3.3
(1.5)
Telecoms
20.0
12.3
11.5
16.2
6.6
17.6
(24.8)
(38.0)
72.6
Sensex Index
23.6
7.4
8.4
12.4
10.0
13.6
12.5
8.6
13.4
Our Sensex EPS stands at Rs1188 for FY13 and Rs1345 for FY14
January 2013
Sector-wise earnings preview (Q3FY13)
January 2013
10
Q3FY13 earnings preview

Agri-related
Jain Irrigation Systems (JISL)
9
Given the delay in subsidy disbursements by the government, JISL has taken a conscious decision to compromise growth in MIS by
asking for higher upfront capital commitments (almost 100% in some states) from farmers. On account of this, we expect JISLs MIS
business to be hit in Q3FY13 and garner a near 20% decline in revenues
Overall revenues are expected to register a 2% decline, with growth in the agro-processing segment partially offsetting the decline in
MIS
With the highest margin MIS business under severe stress, we expect EBITDA margins to contract by 300bp to 19.5% during the
quarter.
Given the high cost of debt, we expect interest costs to increase to Rs1bn for the quarter. However, given the change of business
model towards higher recovery from farmers for MIS, we do not expect any material increase in the WC cycle for JISL.
Stress in the MIS business and higher financing costs is expected to result in a 56% decline in PBT. Further, we expect JISL to incur
an MTM forex loss of ~Rs250m.
JISL has launched its NBFC, which would aid in addressing working capital issues over the longer term. However, in the near term
underlying business is expected to be under strain.
Reiterate Outperformer
United Phosphorus
9
Revenues expected to grow 15% yoy to Rs22.2bn aided by steady growth across markets and favorable currency
Expect EBITDA margins to at 17.6% for the quarter (EBITDA up 12% yoy)
PAT to grow 29% yoy to Rs1.6bn
January 2013
11

Agri-related
(Rs m)
Jain Irrigation
United Phosphorus
Net Sales
EBITDA
Profit After Tax
Q3FY13E
Q3FY12
% chg yoy
Q3FY13E
Q3FY12
% chg yoy
Q3FY13E
Q3FY12
% chg yoy
8,200
8,330
(1.6)
1,599
1,864
(14.2)
69
12
NM
22,181
19,288
15.0
3,904
3,484
12.1
1,623
1,261
28.7
*Includes MTM forex impact
January 2013
12

Alcoholic beverages
In the alcoholic beverages space, we expect the beer industry to see a recovery in volumes as taxation increases of FY12 start to get
absorbed in the key states. Further, a low base would result in better reported volume growth. With respect to liquor, the business
environment is showing signs of recovery.
United Spirits
9
We expect USL to garner a single digit volume growth during the quarter. Reported revenue expected to increase by 15%.
While molasses prices are down sequentially, they continue to be higher on a yoy basis. Thus, gross margins are expected to contract
by 200bp in Q3FY13
Expect interest costs to remain firm at ~Rs1.7bn, resulting in a 9% growth in PAT.
Change in operational performance post induction of Diageo remains to be the key monitorable.
Radico Khaitan
9
IMFL volume growth expected at ~7%, with Magic Moments registering a 15%+ growth and Morpheus Brandy a 25%+ growth.
EBITDA is expected to grow by 14%. However, higher interest costs (on account of re-financing of FCCB) and higher tax rate is
expected to result in a 1% decline in PAT.
United Breweries
9
United Breweries (UBL) is expected to witness a volume growth of 10-12% during the quarter. We expect UBL to see benefits of
packaging material costs on account of rollout of patented bottles and strong performance in states with improved profitability.
Reported EBITDA margins are expected to stand at 13.6% in Q3FY13. Strong volume growth coupled with improved state mix is
expected to underpin a strong 49% growth in PAT.
Maintain Outperformer on United Spirits & Radico Khaitan and Underperformer on UBL.
January 2013
13

Alcoholic beverages
(Rs m)
Net Sales
EBITDA
Profit After Tax
Q3FY13E
Q3FY12
% chg yoy
Q3FY13E
Q3FY12
% chg yoy
Q3FY13E
Q3FY12
% chg yoy
Radico Khaitan
3,408
3,185
7.0
510
449
13.5
234
237
(1.1)
United Breweries
9,034
9,611
(6.0)
1,231
746
65.0
413
276
49.3
22,700
19,673
15.4
2,663
2,003
32.9
511
471
8.6
United Spirits
January 2013
14

Automobiles
Despite pick-up in demand (led by festive season) and a non-festive base six of the eight companies in our coverage universe are
expected to post earnings decline, similar to 2Q.
Tata Motors
9
Record base at JLR (20% operating margins in 3QFY12 vs <15% in 2Q/4Q) coupled with loss at standalone entity should result in
24% drop in consolidated earnings. However, on a QoQ basis earnings are seen 30% higher led by an estimated 26% jump in JLR
wholesales. At JLR we expect a PAT of GBP375mn and while at standalone we estimates losses of Rs3.2bn.
M&M
9
Robust performance led by surging UV portfolio; to see healthy YoY/QoQ growth on all operational parameters. Operating margins to
see 30bps/110bps YoY/QoQ improvement to 12.5%. QoQ drop in PAT entirely due to lumpy subsidiary dividend of Rs1.8bn in 2Q.
Maruti Suzuki
9
Festive demand coupled with depressed base to help Maruti post growth in profits after five consecutive quarters of decline. Higher
sales of diesel cars (due to accumulated diesel engine inventory) and launch of new Alto to boost to neutralise discount pain.
Hero MotoCorp
9
Flattish volumes coupled with mix led margin contraction to result in 3% decline in PAT. QoQ surge helped by 18% volume jump.
Bajaj Auto
9
A 450bps jump in tax rate (lower income tax benefits at Pantnagar) to result in marginal decline in PAT despite 5% volume growth.
QoQ profits expected to see a 10% growth due to 7.5% higher volumes and better mix.
January 2013
15

Automobiles
Ashok Leyland
9
A 27% drop in volumes (thirteen quarter low excluding JV product Dost) coupled with 90% jump in interest expense to result its first
loss since Q1FY10, when it posted a loss of Rs427mn on a volume of 7,698 units.
TVS Motor
9
PAT decline of 6% led by 2% volume drop. However, QoQ PAT seen 17% higher on a 7% volume growth and mix improvement.
Eicher Motors
9
Despite 42% slump in VECV operating profits drop in consolidated operating profits arrested to 19% due to 185% growth in
standalone operating profits. Other income down 45% due to accelarated capex and increased working capital at VECV.
(Rs m)
Net Sales
EBITDA
Profit After Tax
Q3FY13E
Q3FY12
% chg yoy
Q3FY13E
Q3FY12
% chg yoy
Q3FY13E
Q3FY12
% chg yoy
Ashok Leyland
25,093
28,798
(12.9)
1,424
2,104
(32.3)
(378)
669
(156.5)
Bajaj Auto
54,303
50,632
7.3
10,501
10,614
(1.1)
8,281
8,346
(0.8)
Eicher Motors *
17,051
15,766
8.1
1,246
1,538
(19.0)
697
854
(18.5)
Hero MotoCorp
61,466
60,315
1.9
8,882
9,430
(5.8)
5,930
6,130
(3.3)
108,707
88,783
22.4
13,612
10,208
33.3
8,633
6,622
30.4
96,240
76,532
25.8
8,524
4,234
101.3
4,837
2,052
135.7
486,196
452,603
7.4
61,007
68,270
(10.6)
25,732
34,056
(24.4)
18,125
17,609
2.9
1,134
1,153
(1.7)
530
565
(6.2)
M&M
Maruti Suzuki
Tata Motors
TVS Motor
* December year end
January 2013
16

Cement
9
Cement companies to report 6-9% yoy growth in revenues mainly led by higher realizations
Average realizations to increase by 5-9% led by low base effect. However, on sequential basis, cement prices have fallen sharply
due to festive season and weak demand. Hence, we estimate a 3% decline on qoq basis in realisations.
Volumes to be weak (largely flattish) led by weak construction activity
EBITDA / tonne to expand by 6-7%% across companies led by higher realisations on yoy basis. However, on sequential basis to
decline led by lower realisations (expect some savings in power costs due to lower coal costs).
Accordingly, earnings to grow at muted pace in the quarter led by weaker realisations on qoq basis.
Grasims revenues likely to grow at a slower pace due to high base effect of realisations. On the other hand, higher costs to impact
margins and thereby earnings in the quarter.
(Rs m)
Net Sales
EBITDA
Profit After Tax
Q3FY13E
Q3FY12
% chg yoy
Q3FY13E
Q3FY12
% chg yoy
Q3FY13E
Q3FY12
% chg yoy
ACC*
25,751
25,027
2.9
4,048
3,893
4.0
2,287
2,425
(5.7)
Grasim
12,368
12,429
(0.5)
2,557
2,854
(10.4)
2,400
2,745
(12.6)
Gujarat Ambuja*
25,820
23,363
10.5
5,750
4,282
34.3
3,738
2,594
44.1
Ultratech Cement
49,820
45,681
9.1
10,223
9,646
6.0
5,712
5,118
11.6
* December year end
January 2013
17

Construction
No material improvement in business environment.
9
Order inflows have been very weak across most players
Working capital cycles remain stretched due to delayed payments; marginal rise in debt levels
Execution remains constrained by elevated working capital levels
L&T
9
Order announcements at Rs112bn; expect flat to marginal decline in order booking for the quarter
Expect 14% revenue growth and 40bp yoy rise in margins on a lower base (10% for Q3)
PAT to grow 6.1%yoy to Rs10.5bn
JPA
9
Reported earnings would not be comparable with Q3FY12 numbers due to demerger of the west and south cement capacities
Cement realizations to drop marginally on qoq basis; expect construction margins to moderate
Expect EBIDTA to decline 22% yoy to Rs6.6bn and PAT to decline 69%yoy to Rs954m on the back of lower EBIDTA and higher yoy tax
rate
IVRCL, NCC, HCC, Simplex Infrastructures & Gammon India

9
Weak order flows and sharp yoy erosion in profits due to lower margins + higher interest costs
Marginal qoq rise in debt levels for most companies
January 2013
18

Construction
(Rs m)
Net Sales
EBITDA
Profit After Tax
Q3FY13E
Q3FY12
% chg yoy
Q3FY13E
Q3FY12
% chg yoy
Q3FY13E
Q3FY12
% chg yoy
11,074
11,844
(6.5)
770
950
(19.0)
(196)
80
NM
9,650
9,460
2.0
968
(559)
NM
(411)
(1,379)
NM
IVRCL Infrastructures
12,195
11,955
2.0
909
878
3.5
(209)
68
NM
Jaiprakash Associates
29,776
29,470
1.0
6,587
8,446
(22.0)
954
3,081
(69.1)
159,759
139,986
14.1
15,989
13,431
19.0
10,519
9,916
6.1
5,311
6,249
(15.0)
636
527
20.7
111
75
47.3
NCC
14,089
12,636
11.5
1,112
793
40.3
48
(94)
NM
Simplex Infrastructures
16,501
15,943
3.5
1,347
1,274
5.8
105
180
(41.7)
Gammon India
HCC
Larsen & Toubro

Madhucon Projects
January 2013
19

Education
Educomp Solutions (EDSL)
9
We expect EDSL to add 6,250 classrooms in the smart class segment, with yields expected to remain flat sequentially
Lower yields would lead to significant contraction in EBIT margins. We expect EBIT margins in the segment to reduce from 40% in
Q3FY12 to 25% in Q3FY13.
We expect EDSL to garner an overall revenue decline of 2% with EBITDA margins of 25%.
Higher interest cost is expected to result in a 46% decline in PAT (excluding MTM forex losses).
(Rs m)
Educomp Solution
Net Sales
EBITDA
Profit After Tax
Q3FY13E
Q3FY12
% chg yoy
Q3FY13E
Q3FY12
% chg yoy
Q3FY13E
Q3FY12
% chg yoy
3,587
3,655
(1.9)
913
963
(5.2)
133
247
(46.1)
*Includes MTM forex impact of Rs372m
January 2013
20

Engineering
9
Havells: Continued growth in domestic business segments, while savings in interest cost savings in Sylvania to drive
consolidated profits.
Thermax: We expect earnings to be impacted by lower order backlog and execution of low margin orders. Inflows to improve led
by some large order wins in the quarter. However, order backlog to remain weak in the quarter.
AIA Engg: Growth in volumes (mining segment) and realizations (rupee depreciation) to drive revenues. However, lower margins
due to forex losses and mining volumes to depress PAT.
CUMI: Sluggish demand in abrasives segment as also high base of electromineral prices to impact both revenues and margins.
Accordingly, earnings to fall steeply by 13% yoy in 3QFY13
EIL: Weak order backlog is likely to drive fall in revenues and margins, thereby impacting EBITDA growth. However, higher yields
on free cash to offset the weakness at operating level.
BEL: Pick up in execution vs 1HFY13 to drive a better operational performance for the quarter.
Voltas: We expect revenues to remain flattish due to lower order backlog in EMP segment. While earnings are likely to be
profitable on yoy basis (last year accounting of Sidra order), margins are likely to remain weak led by higher costs and execution
of low margin orders. Order inflows to remain weak due to no pick up in activity.
January 2013
21

Engineering
(Rs m)
Net Sales
EBITDA
Profit After Tax
Q3FY13E
Q3FY12
% chg yoy
Q3FY13E
Q3FY12
% chg yoy
Q3FY13E
Q3FY12
% chg yoy
4,350
3,470
25.4
674
701
(3.8)
408
494
(17.5)
15,461
14,316
8.0
1,237
1,132
9.3
1,743
1,746
(0.2)
Carborundum Universal *
5,347
4,936
8.3
829
811
2.2
396
457
(13.2)
Engineers India
7,221
7,925
(8.9)
1,589
1,822
(12.8)
1,467
1,511
(2.9)
Havells India *
18,064
16,596
8.8
1,852
1,755
5.5
1,064
886
20.1
Thermax India
12,059
12,693
(5.0)
1,266
1,364
(7.2)
892
955
(6.6)
Voltas *
11,954
11,539
3.6
693
(2,000)
NM
522
(1,326)
NM
AIAE *
Bharat Electronics
* Consolidated earnings
January 2013
22

Entertainment & Media
The performance of the Indian Entertainment & Media (IEM) sector is expected to see improvement from H1FY13. The ad environment
has shown improvement in pockets, while the mandate on digitization has added strong momentum to the TV distribution segment.
We expect the IEM sector to report a 11% revenue growth in Q3FY13.
Broadcasting:
9
9
Segment is witnessing marginal recovery in ad spends, with key sectors such as FMCG , Telecom and consumer durables increasing ad budgets
to some extent. Overall ad revenues for the broadcasting industry is expected to grow at high single digits in Q3FY13.
ZEEL expected to report a 16-17% growth in ad revenues (on a low base). We expect sports losses of ~Rs120m in Q3FY13 (flat yoy). Higher
investments towards content in core broadcasting business and new channels is expected to result in margin contraction of 350bp for ZEEL. We
expect ZEEL to report a 8% growth in PBT.
ZEEL has won the court case against BCCI and is due to receive Rs1.4bn for the same. This extraordinary gain is estimated to be reported either in
Q3FY13 or Q4FY13.
Distribution:
9
9
Dish TV is expected to add ~0.8m gross subs, with ARPUs flat to marginally down QoQ. We expect Dish TV to garner an EBITDA of Rs1.65bn and
net loss to Rs180m in Q3FY13 (excluding MTM forex impact).
With regards the cable operators, DEN and Hathway are expected to add 0.5m-0.6m digital subs each. This sharp acceleration has been on the
back of implementation of sunset on analog services in Phase-I (Mumbai + Delhi).
Print:
9
HT Media is expected to garner a ~4% growth in ad revenues as the Hindi segment is expected to report a strong 13-14% growth, while the
English segment continues to witness some pressure in the Delhi region. Marginal improvement in topline coupled with benign raw material prices
are expected to result in a 10% growth in EBITDA.
Jagran is expected to garner an ad growth of near 7% (albiet on a high base). While newsprint prices will offer relief, we expect other costs to
remain firm resulting in a 5% growth in EBITDA. Tax benefit on account of merger of NaiDunia would aid in 75% growth in reported PAT.
January 2013
23

Entertainment & Media
(Rs m)
Net Sales
EBITDA
Profit After Tax
Q3FY13E
Q3FY12
% chg yoy
Q3FY13E
Q3FY12
% chg yoy
Q3FY13E
Q3FY12
% chg yoy
DEN Network
2,274
2,782
(18.2)
475
269
76.9
164
35
368.7
Dish TV India
5,582
4,905
13.8
1,646
1,202
36.9
(179)
(429)
NM
875
768
13.9
293
312
(6.2)
177
184
(3.9)
Hathway Cables and

Datacom
2,993
2,560
16.9
569
460
23.6
HT Media
5,557
5,266
5.5
854
777
10.0
493
482
2.2
Jagran Prakashan
3,441
3,240
6.2
892
851
4.8
722
413
74.6
PVR
1,950
1,390
40.3
325
241
34.9
93
90
3.6
Zee Entertainment
8,998
7,548
19.2
2,264
2,160
4.8
1,760
1,360
29.5
Entertainment Network
January 2013
24

FMCG
9
Our FMCG universe is expected to post a 15% revenue growth which will be largely organic. A moderation in volume growth is
expected as compared to 1HFY13, more so in discretionary packaged food categories. Price increases and improvement in gross
margins will drive a 16% EBITDA growth for our universe.
HUL is expected to post a adjusted sales growth of 15% driven by 7% volume growth and 7-8% price increases. Overall revenue
growth will be lower at 12.5% due to the de-merger of exports division. Price increases and cost control will be offset by higher A&P
spends leading to a 20bp margin expansion at 15.3% with PAT growth expected at 16% for the quarter.
ITC is expected to report a 15% sales growth, led by 14% net sales growth in cigarettes and 24% growth in FMCG sales. The steep
price increases will keep volumes subdued and we expect a 1% volume growth for the quarter. Overall PAT growth is expected at
17%.
We expect Nestle to report 14% sales growth. Price increases and improved mix will drive a 40bp gross margin expansion with
EBITDA growth expected at 15%. PAT growth at 11% will be impacted by higher interest and depreciation costs.
Dabur is expected to report a 18% revenue growth driven by 9% volume growth. 160 bp improvement in gross margins will be
compensated by higher overheads (A&P and other expenditure). We expect PAT growth at 19%.
Marico is expected to report a 16% revenue growth driven largely by volumes and by the Paras personal care acquisition. Margin
expansion led by lower copra prices will drive a 19% PAT growth for the quarter.
GCPL is expected to record a 25% revenue growth led by acquisitions and a 18% domestic sales growth. PAT growth at 17% will be
impacted by lower margins in the international business and higher interest costs.
Colgate is expected to report a 17% revenue growth with volume growth at 10%. A 70bp contraction in margins due to higher A&P as
well as pressure on gross margins will keep PAT growth subdued at 13%.
Jyothy Laboratories is expected to report a 10% standalone revenue growth impacted by lower primary sales due to trade correction.
Though PAT will be higher by 10% sequentially, on a YoY basis it will decline by 42% due to higher interest costs and tax rates.
January 2013
25

FMCG
(Rs m)
Net Sales
EBITDA
Profit After Tax
Q3FY13E
Q3FY12
% chg yoy
Q3FY13E
Q3FY12
% chg yoy
Q3FY13E
Q3FY12
% chg yoy
7,834
6,696
17.0
1,471
1,291
13.9
1,313
1,156
13.6
Dabur India
17,264
14,631
18.0
2,849
2,319
22.9
2,054
1,728
18.9
Godrej Consumer
16,801
13,441
25.0
3,023
2,653
13.9
1,941
1,658
17.1
Hindustan Unilever
65,843
58,527
12.5
10,054
8,856
13.5
8,804
7,622
15.5
ITC
71,924
62,478
15.1
27,646
23,811
16.1
19,869
17,010
16.8
1,829
1,663
10.0
247
283
(12.7)
169
291
(41.8)
Marico Industries
12,271
10,579
16.0
1,601
1,218
31.4
1,001
842
18.9
Nestle India
22,200
19,547
13.6
4,755
4,127
15.2
2,968
2,681
10.7
Colgate-Palmolive
Jyothy Laboratories
* December year end
January 2013
26

Hospitals
Apollo Hospitals
9
Expect standalone revenues to grow by 15% yoy to Rs8.2bn for the quarter. EBITDA margins to stay flat yoy at ~18%
PAT expected to grow 33% yoy to Rs863m
Fortis Healthcare
9
Expect revenues to grow 148% yoy to Rs15bn aided by consolidation of international businesses
EBITDA margins expected at 11% for the quarter (down 230bps qoq)
Consolidated PAT expected at Rs96m vs. Rs302m in Q2FY13
(Rs m)
Net Sales
EBITDA
Profit After Tax
Q3FY13E
Q3FY12
% chg yoy
Q3FY13E
Q3FY12
% chg yoy
Q3FY13E
Q3FY12
% chg yoy
Apollo Hospitals
8,191
7,148
14.6
1,457
1,288
13.1
863
647
33.4
Fortis Healthcare
14,969
6,046
147.6
1,646
831
98.1
96
293
(67.2)
January 2013
27

Infrastructure Developers
Adani Port and SEZ
9
Expect 23%yoy growth in standalone cargo volumes to 20.5mt led by across the board growth in cargo
Expect 19%yoy growth in consolidated EBIDTA; PAT to be remain impacted (down 35%yoy) led by higher interest costs
GPPL
9
Partial recovery in container cargo volumes on qoq basis; expect 9%yoy drop in total cargo volumes
Interest cost savings due to repayment of Rs3.5bn debt; expect 24.6%yoy decline in PAT to Rs204m
GMR & GVK

9
Domestic pax growth to remain subdued in the airport businesses (8-10% decline)
Power businesses to remain impacted by further fall in gas availability; PLFs to drop to 25-35%
Expect 38%yoy EBIDTA growth for GMR led by DIAL tariff hike; Expect net loss of Rs590m (net loss of Rs1.5bn in Q3FY12)
Expect 17%yoy EBIDTA growth for GVK with net loss of Rs306m in Q3FY13 (net loss of Rs145m in Q3FY12)
IRB
9
Expect 13%yoy EBIDTA growth led by EPC business; PAT to decline 17%yoy led by higher interest and depreciation costs
Adani Enterprises
9
Higher fuel costs, lower PLFs & additional fixed costs from commissioning of Tiroda Unit 1 to impact power profits
Expect sharp 95%yoy drop in PAT to Rs397m
January 2013
28

Infrastructure Developers
(Rs m)
Net Sales
EBITDA
Profit After Tax
Q3FY13E
Q3FY12
% chg yoy
Q3FY13E
Q3FY12
% chg yoy
Q3FY13E
Q3FY12
% chg yoy
Adani Enterprises
109,751
90,147
21.7
15,384
13,744
11.9
397
7,424
(94.7)
Adani Port & SEZ
10,443
9,074
15.1
7,087
5,965
18.8
2,372
3,653
(35.1)
GMR Infrastructure
20,812
19,993
4.1
6,221
4,494
38.4
(590)
(1,451)
NM
Gujarat Pipavav Port *
1,078
1,159
(7.0)
436
590
(26.1)
204
270
(24.5)
GVK Power
7,065
7,446
(5.1)
2,468
2,108
17.1
(306)
(145)
NM
IRB Infra
8,970
7,442
20.5
3,842
3,404
12.9
1,094
1,314
(16.7)
* December year end
January 2013
29

IT Services
Seasonal weakness to be more pronounced
9 Lower working days and Furloughs in Manufacturing vertical to impact volume growth
9 Weak macro environment to accentuate seasonal weakness; Do not expect usual budget flush from BFSI/ Retail
9 Top4 companies to report 2-4% qoq USD revenue growth
~4% qoq for TCS, ~3% qoq for HCL Tech and ~2% qoq for Wipro
~4% qoq for Infosys (~2% organic and ~2% driven by Lodestone acquisition)
9 Mid-tier firms to report lower revenue growth
0-2% growth for Mahindra Satyam, Mphasis, Hexaware, MindTree, KPIT Cummins, Persistent Systems
TechM : +7% qoq revenue growth all driven by Hutchison GS and Comviva integration; eClerx: ~5% qoq growth
Margins to remain in a narrow band with no major headwinds/ tailwinds

9 Large cap margin within +/- 50bp qoq
9 Hexaware margins to decline by ~500bp qoq (client ramp down); eClerx margin to improve by ~300bp (absence of -ve one-off from the
previous quarter); MindTree margins to decline by ~200bp (strong INR realization)
Expect Infosys to cut organic growth guidance by ~1% qoq
Recommend Outperformer on Infosys, TechM/ Satyam and Wipro in large cap, and KPIT Cummins and Persistent in small-mid cap
Recommend Underperformer on HCLT in large cap, and MindTree and eClerx in small-mid cap
January 2013
30

IT Services
(Rs m)
Net Sales
EBITDA
Profit After Tax
Q3FY13E
Q3FY12
% chg yoy
Q3FY13E
Q3FY12
% chg yoy
Q3FY13E
Q3FY12
% chg yoy
1,707
1,320
29.3
672
597
12.5
631
499
26.3
62,727
52,452
19.6
13,700
9,702
41.2
8,807
5,526
59.4
Hexaware Technologies
5,047
4,319
16.9
846
994
(14.9)
650
882
(26.3)
Infinite Computer
3,570
2,694
32.5
643
539
19.2
399
393
1.5
101,850
92,980
9.5
29,680
31,330
(5.3)
22,632
23,720
(4.6)
5,680
3,789
49.9
952
580
64.2
636
411
54.9
19,486
17,181
13.4
4,092
2,781
47.1
3,286
3,084
6.5
Mindtree
5,923
5,197
14.0
1,178
897
31.3
807
606
33.2
MphasiS
13,415
13,672
(1.9)
2,570
2,522
1.9
2,122
1,848
14.8
3,293
2,677
23.0
870
696
25.0
572
406
40.9
162,346
132,040
23.0
46,503
40,921
13.6
35,783
28,866
24.0
17,469
14,449
20.9
3,537
2,343
51.0
2,970
2,258
31.5
111,093
98,808
12.4
22,562
18,678
20.8
17,536
14,564
20.4
Eclerx Services
HCL Technologies
Infosys Technologies
KPIT Cummins Infosystems
Mahindra Satyam
Persistent Systems
Tata Consultancy
Tech Mahindra
Wipro
January 2013
31

Logistics
Concor
9
Revenues to grow by 7% led by higher realisations led by pass through of higher haulage costs
Volumes to remain muted led by weak international trade impacting exim volumes as also flat volumes at JNPT
OPM likely to fall by 250bps due to empty running as also part absorption of recent haulage rate hike
Lower tax and higher other income to partially offset weak operating performance
Gateway Distripark
9
GDL revenues to grow by 11% yoy led by higher rail revenues on account of pass through cost as also higher volumes
OPM to fall sharply led by lower CFS margins (lower ground rent) as also empty running in rail business
Higher depreciation and lower margins to restrict earnings growth for the quarter
(Rs m)
Container Corporation
Gateway Distripark *
Net Sales
EBITDA
Profit After Tax
Q3FY13E
Q3FY12
% chg yoy
Q3FY13E
Q3FY12
% chg yoy
Q3FY13E
Q3FY12
% chg yoy
11,235
10,462
7.4
2,696
2,774
(2.8)
2,397
2,414
(0.7)
2,317
2,088
10.9
556
612
(9.2)
273
331
(17.5)
January 2013
32

Metals
9
Muted end-use demand , seasonal factors and higher threat of imports have resulted in a sequential decline in domestic flat and long
product prices. We expect an overall sequential realization decline of Rs1,200-1,500/tonne for long products and Rs800-1,000/tonne
for flat products.
While steel volumes have been weaker in the first 2 months (Oct and Nov), attributable to muted end use demand and higher imports,
Dec have seen an uptick in demand.
We expect benefits of lower raw material prices (largely coking coal) to flow in from Q4FY13. The above coupled with higher
sequential realization (attributable to recent price hikes) to drive operating earnings across players.
A sequential rise in merchant tariffs (~Rs0.3/unit) to positively impact SEL and JSPL.
A sequential rise in LME metal prices coupled with volume growth to drive revenue growth for HNDL, while lower mining volumes to
negatively impact HZL. Higher purchase of imported concentrates and declining base metal premium to negatively impact operating
profits per tonne across metal companies.
Coal India to report a 9% yoy earnings decline, on the back of lower realization (attributable to declining e-auction and coking coal
prices) coupled with higher employee and diesel costs.
Iron ore: We expect NMDC to report a sequential earnings decline of 28%, on the back of (a) 25% yoy decline in sales volume (led by
lower e-auction sales) (b) a ~16% sequential drop in realization (attributable to higher sales of fines and price cuts in Oct and Nov).
We expect SESA to report a significant earnings decline on the back of continuing production and transportation ban in Goa.
January 2013
33

Metals
Company
Key monitorables
Coal India
E-auction volumes, FSA realization growth
Hindalco
Product mix and fuel cost in aluminum business, TC-RC margins in copper business, volume growth at Novelis
Hindustan Zinc
Base metal premium, silver sales volume and realization
Jindal Steel & Power (Consol)
Steel sales and PLF at CPP in standalone business, merchant tariff at JPL
JSW Steel (Consol.)
Utilization rates and product mix improvement in standalone business; volume growth and realization at ISPAT
Nalco
Surplus alumina sales, volume growth
NMDC
Sales mix and iron ore volumes
Sterlite Industries
Base metal premium for zinc and aluminum, TC-RC margins in copper business, spot power tariffs and fuel costs at
Balco CPP and SEL
Sesa Goa
Fixed costs and other income
Tata Steel
Realization in standalone and European operations, profitability at European operations
SAIL
Employee costs, impact of coking coal contracts; volume growth
January 2013
34

Metals
(Rs m)
Net Sales
EBITDA
Profit After Tax
Q3FY13E
Q3FY12
% chg yoy
Q3FY13E
Q3FY12
% chg yoy
Q3FY13E
Q3FY12
% chg yoy
Coal India
165,879
153,493
8.1
38,396
45,430
(15.5)
36,556
40,378
(9.5)
Hindalco Industries
186,556
191,613
(2.6)
16,935
17,976
(5.8)
6,310
8,167
(22.7)
Hindalco - S/A
66,779
66,470
0.5
6,885
7,149
(3.7)
4,979
4,507
10.5
Hindustan Zinc
29,494
27,868
5.8
14,192
14,023
1.2
14,789
12,800
15.5
Jindal Steel & Power
51,235
43,577
17.6
18,721
17,421
7.5
9,802
9,707
1.0
Jindal Steel & Power - S/A
36,891
32,983
11.8
12,413
9,955
24.7
5,787
4,611
25.5
JSW Steel
85,060
84,954
0.1
13,059
14,496
(9.9)
1,190
(250)
NM
JSW Steel - S/A
76,558
78,765
(2.8)
13,029
12,526
4.0
3,214
6,681
(51.9)
NMDC
17,355
28,220
(38.5)
12,167
22,607
(46.2)
12,116
18,588
(34.8)
124,389
107,288
15.9
17,047
15,811
7.8
8,857
9,264
(4.4)
2,450
26,171
(90.6)
(495)
10,852
(104.6)
(970)
5,696
(117.0)
Sterlite Industries
106,107
102,462
3.6
24,195
22,608
7.0
12,486
13,389
(6.7)
Tata Steel
320,903
331,031
(3.1)
29,232
17,173
70.2
1,386
(6,027)
NM
Tata Steel - S/A
102,442
83,819
22.2
28,409
26,306
8.0
14,756
14,212
3.8
SAIL
Sesa Goa
* Includes standalone nos + Novelis
January 2013
35

Oil & Gas
9
Strong quarter for the sector expected; OMCs report profits of Rs98bn (Q3FY12 loss of Rs141bn) led by payout assumed of ~99% of
subsidy burden for the Quarter by upstream/GOI. Resultant, total profits of Rs254bn 6x higher yoy, even as qoq the earnings decline
by 24% led by 43% qoq decline in OMCs
Gross subsidy assumed at Rs415bn, with upstream meeting ~39.5% (in line with Q2FY13) and Government contributing ~60% of this
loss, enabling healthy earnings for the OMCs.
ONGC/OIL have a muted quarter due to high subsidy contribution; ONGC subsidy burden rises 10% qoq and 9% yoy delivering
earnings of Rs51bn (+7% yoy, -14% qoq). Oil India sees flat subsidy for the quarter, PAT at Rs9.7bn (-4% yoy, +2% qoq)
RIL expected to report a 12% earnings growth yoy to Rs50bn on the back of healthy GRMs even as qoq earnings decline by 7%.
consistently declining E&P volumes and soft Petchem demand offset a ~17% yoy improvement in refining margins. While E&P
remains a risk, we believe valuations have bottomed out at current levels and steady petchem and refining margins, coupled with
better news flow from E&P should help the stock from here
Cairn India to report earnings of Rs29bn, with steady production, weak rupee and low base delivering a 29% yoy growth.
Flat trading EBIT, higher subsidy share and low petchem EBIT drive GAILs earnings lower at Rs9.5bn (-13% yoy, -4% qoq). GGCL to
show strong yoy growth as Q4CY11 saw spreads slump to Rs2.5/scm due a sudden rise in gas costs (current quarter spreads
assumed at Rs5.5/scm); while GSPL to report a 6% yoy decline driven by lower volumes and tariffs
PLNG to have a muted quarter with just 4% earnings growth due to flat regas volumes and tariffs. We remain positive about its
prospects, with growing capacity (10m tpa addition to capacity over FY13-15E) and steady margins expected to drive growth for the
company.
January 2013
36

Oil & Gas
(Rs m)
Net Sales
EBITDA
Profit After Tax
Q3FY13E
Q3FY12
% chg yoy
Q3FY13E
Q3FY12
% chg yoy
Q3FY13E
Q3FY12
% chg yoy
598,622
588,468
1.7
35,214
37,097
(5.1)
29,714
31,397
(5.4)
44,706
30,968
44.4
34,434
23,692
45.3
29,151
22,619
28.9
Essar Oil
231,555
129,930
78.2
11,733
4,820
143.4
1,583
290
445.8
GAIL (India)
116,386
112,944
3.0
14,455
17,951
(19.5)
9,449
10,916
(13.4)
8,187
6,771
20.9
1,044
1,040
0.3
751
696
7.9
BPCL
Cairn India
Gujarat Gas Company

Gujarat State Petronet
2,568
2,755
(6.8)
2,348
2,535
(7.4)
1,183
1,261
(6.2)
506,747
480,475
5.5
13,737
37,026
(62.9)
7,037
27,252
(74.2)
8,458
6,631
27.5
1,936
1,505
28.7
926
692
33.8
1,104,387
1,156,419
(4.5)
82,532
111,583
(26.0)
60,765
86,566
(29.8)
Oil India
25,701
25,898
(0.8)
13,171
14,282
(7.8)
9,698
10,140
(4.4)
ONGC
187,413
185,171
1.2
93,688
110,515
(15.2)
50,752
47,468
6.9
76,194
63,303
20.4
5,065
5,032
0.6
3,022
2,954
2.3
927,310
851,350
8.9
73,082
72,850
0.3
50,001
44,400
12.6
HPCL
Indraprastha Gas
IOC
Petronet LNG
Reliance Industries
January 2013
37

Others
Sintex Industries
9
A slowdown in monolithic business on the back of delayed payments and stagnant order book, to more than offset a strong growth in
pre-fab business.
While overseas custom molding business (NIEF and Wausaukee) to face macroeconomic headwinds, performance at domestic
custom molding (BRIGHT) to remain stable.
(Rs m)
Sintex
January 2013
Net Sales
EBITDA
Profit After Tax
Q3FY13E
Q3FY12
% chg yoy
Q3FY13E
Q3FY12
% chg yoy
Q3FY13E
Q3FY12
% chg yoy
11,717
11,608
0.9
1,878
1,631
15.1
795
551
44.3
38

Pharmaceuticals
Aided by continued strong growth in US, we expect steady growth in revenues (+17% yoy) for coverage universe (ex-Ranbaxy).
Margins will also stay strong given the continued weakness in the rupee
9
Cipla Expect another strong quarter with 16% growth in revenues aided by strong growth across businesses. Expect EBITDA
margins to improve to 22% for the quarter (+180bps yoy). PAT expected to grow by 22% yoy.
Ranbaxy Expect revenues to decline 34% yoy owing to higher Lipitor FTF in Q4CY11. Base business EBITDA margins to decline to
~7% (8.3% in Q3CY12) due to lower Lipitor sales. MTM losses of >Rs4bn to result in net loss of Rs2.4bn.
Dr Reddys Expect revenues to remain flat yoy (+2%) due to higher Zyprexa sales in Q3FY12. Recurring EBITDA to grow 30% yoy
to R6.2bn with margins expected at 21.9% (+130bps yoy); Reported PAT to decline 22% yoy to Rs4bn
Lupin Expect revenues to grow 44% yoy aided by Tricor and Yasmin launches in the US (+$35m); India business expected to grow
by 17% yoy; Recurring EBITDA margins expected at 18.7% for the quarter. Reported PAT to grow by 15% yoy
Sun Pharma Expect Sun to report 24% yoy revenue growth led by strong export formulations (+27% yoy; including Taro) and
steady domestic business growth (+18%). Expect 38% ex-taro EBITDA margins (48% taro margins). PAT to grow by 43% yoy
Glenmark Expect revenues to grow by 26% yoy, led by strong growth in US formulations (+34%) and steady growth in India
business (+15% yoy); expect EBITDA margins (ex-licensing) at 20.6% for the quarter (+260bps yoy)
Ipca Expect revenues to grow 15% yoy led by steady growth across markets. Domestic formulations growth to remain strong at
17% for the quarter. PAT to be impacted by Rs174m of forex losses on translation
January 2013
39

Pharmaceuticals
9
Torrent - Expect revenues to grow by 13% yoy led by strong formulation sales in US, Europe and RoW markets. Expect lower EBITDA
margins at 21.9% (-90 bps yoy) due to higher employee expense. Lower tax in Q3FY12 to result in ~6% PAT growth
Strides Arcolabs Expect revenues at Rs6.1bn with strong growth in Specialties business (+133% yoy). Licensing income expected
at Rs880m for the quarter. Ex-licensing margins expected at 17.6% for the quarter
GSK Pharma Expect revenues to grow by 15% yoy and EBITDA by 13% yoy; margins expected at 29.5% for the quarter
Aventis Pharma Expect revenues to grow by 15% yoy with EBITDA growth at 25% yoy. Expect margins at 18.3% for the quarter
(+150bps yoy)
Biocon Expect revenues to grow by 17% yoy led by strong growth across businesses and despite lower licensing income. EBITDA
margins to come at 22.4% (down 230bps yoy) for the quarter
Dishman Expect revenue to grow by 20% yoy with EBITDA margins improving to 21% for the quarter (+90bps yoy); Expect PAT at
Rs223m (+94% yoy)
January 2013
40

Pharmaceuticals
(Rs m)
Net Sales
EBITDA
Profit After Tax
Q3FY13E
Q3FY12
% chg yoy
Q3FY13E
Q3FY12
% chg yoy
Q3FY13E
Q3FY12
% chg yoy
Sanofi India *
4,113
3,586
14.7
753
602
25.1
410
361
13.6
Biocon
6,032
5,172
16.6
1,350
1,274
6.0
876
849
3.2
19,846
17,115
16.0
4,366
3,450
26.6
3,285
2,699
21.7
3,200
2,662
20.2
672
534
25.8
223
115
93.9
28,233
27,692
2.0
6,178
8,690
(28.9)
4,023
5,132
(21.6)
6,531
5,660
15.4
1,924
1,706
12.8
1,598
1,474
8.4
Glenmark Pharma
12,951
10,311
25.6
2,904
1,026
183.0
1,832
459
299.1
IPCA Laboratories
7,100
6,148
15.5
1,546
1,513
2.2
875
639
36.9
Lupin
25,728
17,922
43.6
5,765
3,469
66.2
3,719
2,257
64.8
Ranbaxy Lab *
25,174
37,923
(33.6)
2,370
8,601
(72.4)
(2,402)
(2,561)
NM
6,118
6,981
(12.4)
1,512
1,489
1.5
830
1,083
(23.4)
26,658
21,451
24.3
10,946
9,637
13.6
7,691
6,683
15.1
8,153
7,226
12.8
1,789
1,650
8.4
1,153
1,092
5.6
Cipla
Dishman Pharma
Dr Reddys Lab
Glaxosmithkline Pharma *
Strides Arcolab *
SUN Pharma
Torrent Pharma
* December year end
January 2013
41

Power Equipment
BHEL
9
Expect sluggish order intake due to delay in clearances and muted ordering by utilities
Expect 110bp yoy drop in EBIDTA margins; PAT to decline 6.3%yoy driven by lower margins and higher depreciation
ABB
9
Expect order intake to remain weak
EBIDTA margins to expand 140bp on a lower base; PAT to grow 9% yoy
Crompton
9
Slower revenue growth in international markets to impact revenues in the quarter. Domestic to continue seeing momentum in
revenues across segments (+12% yoy)
Expect consolidated margins to fall by 200bps to 4% largely led by the ongoing restructuring impact at Belgium and scale up of
Hungary operations. Further, execution of low margin standalone orders likely to further impact margins.
We expect the losses in the international business to peak in the quarter due to the restructuring at Rs955mn.
Underperformer on BHEL and ABB

(Rs m)
Net Sales
EBITDA
Profit After Tax
Q3FY13E
Q3FY12
% chg yoy
Q3FY13E
Q3FY12
% chg yoy
Q3FY13E
Q3FY12
% chg yoy
ABB*
25,439
21,696
17.2
1,273
778
63.7
535
491
8.9
BHEL
111,324
105,480
5.5
18,665
18,853
(1.0)
13,429
14,326
(6.3)
31,192
30,280
3.0
1,248
1,826
(31.7)
321
771
(58.4)
1,793
1,949
(8.0)
208
165
25.8
12
14
(16.9)
Crompton Greaves^
EMCO
* Q4CY12 earnings; ^ Consolidated earnings
January 2013
42

Power Transmission
9
Revenues are likely to see continued growth led by pick up in order execution the quarter
Operating margins likely to fall across companies led by execution of low margin orders won in previous year
Earnings growth to reflect EBTIDA growth due to lack of forex losses and higher interest costs
Overall, we expect power transmission companies to show continued order inflows from both domestic and
international markets
(Rs m)
Net Sales
EBITDA
Profit After Tax
Q3FY13E
Q3FY12
% chg yoy
Q3FY13E
Q3FY12
% chg yoy
Q3FY13E
Q3FY12
% chg yoy
Jyoti Structures
6,460
5,871
10.0
627
595
5.3
139
138
0.3
Kalpataru Power
9,365
8,014
16.9
899
936
(3.9)
416
403
3.2
17,078
14,596
17.0
1,281
1,133
13.1
491
434
13.1
KEC International*
January 2013
43

Power Utilities
NTPC
9
Improvement in plant availability year on year basis on base effect (October 2011 was affected by various one offs)
In addition, higher commercialization in this year will drive earning growth of 26.3% to Rs24.9bn
Tata Power
9
Growth in capacity additions YoY will lead to 60%yoy growth in EBIDTA
PAT at Rs1.93bn vs Rs72m in Q3FY12
Reliance Infrastructure
9
Expect 29%yoy drop in EBIDTA and 24%yoy drop in PAT with decline in order execution
Adani Power
9
Standalone: Expect 116%yoy drop in EBIDTA due to generation growth of 105%; net loss at Rs1.2bn on account of cap in tariff
Consolidated: Consolidated net loss will increase to Rs1.9bn on supply of power from Tiroda Unit 1 to MSEDCL
Lanco Infratech
9
Strong 34%yoy EBIDTA growth led by higher generation from new plants; Net loss at Rs1.7bn due to higher interest costs
JPVL
9
Seasonally weak quarter and teething problems at Bina to lead to a loss of Rs907m
KSK
9
Higher generation and lower coal cost to drive earnings growth, Expect net profit of Rs566m vis--vis net loss of Rs594m in Q2FY12
NBVL
9
Earnings to grow by 63.5% on better merchant rate realization in Andhra Pradesh
January 2013
44

Power Utilities
(Rs m)
Net Sales
EBITDA
Profit After Tax
Q3FY13E
Q3FY12
% chg yoy
Q3FY13E
Q3FY12
% chg yoy
Q3FY13E
Q3FY12
% chg yoy
Adani Power
18,757
10,595
77.0
4,208
2,120
98.5
(1,577)
(1,535)
NM
CESC
12,198
10,190
19.7
2,867
2,000
43.4
1,413
740
90.9
Jaiprakash Power
3,325
3,967
(16.2)
2,621
3,571
(26.6)
(819)
595
NM
KSK Energy
6,476
5,696
13.7
2,354
2,373
(0.8)
566
755
(25.1)
48,463
30,172
60.6
7,333
5,909
24.1
(1,694)
868
NM
2,848
2,332
22.1
766
468
63.9
651
398
63.5
165,338
154,888
6.7
36,435
30,118
21.0
24,894
19,715
26.3
PTC
17,758
13,300
33.5
480
210
128.8
370
95
289.0
Reliance Infrastructure
33,382
44,761
(25.4)
4,496
6,501
(30.8)
3,169
4,158
(23.8)
Tata Power
78,553
21,611
263.5
15,739
3,843
309.5
1,936
1,844
5.0
Lanco Infratech
Nava Bharat Ventures
NTPC
January 2013

Real Estate
Backed by new launches, encouraging take-off in the festive season and increasing focus on execution, we expect revenues of
coverage companies to grow ~13% yoy (Ex-JIL); Also margins are expected to improve yoy (37%; +170bps yoy) led by revenue
recognition from newer higher margin projects.
9
DLF: Revenues to remain flay yoy led by lack of new projects entering recognition; EBITDA margins also to remain flat at 41% for the
quarter. PAT to decline 2% yoy despite higher other income from NTC land sale (~Rs1bn)
Jaypee Infratech: Revenues to decline 24% yoy due to higher base in Q3FY12 (recognition from plot sales); EBITDA margins
expected at 45%, PAT to decline 65% yoy with depreciation and interest cost entering P&L
Godrej Properties: Revenues to grow 55% yoy led by lower base and faster execution across projects; EBITDA margins to improve
by ~800bps to 25% for the quarter; PAT expected to grow by 16% yoy to Rs330m
Oberoi Realty: Steady sales across existing projects and no new launches to result in a flat qoq quarter; Expect revenues to grow
31% yoy to Rs30.6% with EBITDA margins at 58%; PAT to grow 14% yoy to Rs1.2bn
Sobha Developers: Another strong operational quarter, we expect revenues to grow 34% yoy led by higher recognition from real
estate; EBITDA margins estimated at 31% for the quarter; PAT to grow 30% yoy to Rs520m
Sunteck Realty (SRL): Good quarter for SRL with steady sales in BKC (Pearl, Isles) and Goregaon projects; no revenue recognition
till end-FY13 when first project gets delivered (Signature Island)
Ansal Properties and Infrastructure (APIL): Expect revenues to grow 28% yoy led by higher FSI sales in the quarter; EBITDA
margins expected at ~13%; PAT expected at Rs102m for the quarter
January 2013
46

Real Estate
(Rs m)
Net Sales
EBITDA
Profit After Tax
Q3FY13E
Q3FY12
% chg yoy
Q3FY13E
Q3FY12
% chg yoy
Q3FY13E
Q3FY12
% chg yoy
2,905
2,262
28.4
373
(97)
NM
102
(210)
NM
20,954
20,344
3.0
8,491
8,227
3.2
2,539
2,587
(1.9)
Godrej Properties
2,327
1,497
55.4
593
267
122.1
330
284
16.2
Jaypee Infratech
6,860
9,027
(24.0)
3,073
4,953
(38.0)
1,370
3,921
(65.1)
Oberoi Realty
2,447
1,873
30.6
1,421
1,134
25.3
1,168
1,021
14.4
SOBHA Developers
4,208
3,137
34.1
1,308
753
73.7
520
401
29.7
49
46
6.5
11
120.0
187.5
Ansal Properties & Infra.

DLF
Sunteck Realty
January 2013
47

Retail
9
Strong festive season sales, a low base and an improving demand environment has led to a pick up in like to like growth to 9-10%
across retail formats. December too has witnessed continued uptick in demand. The key monitorable will be demand post the sale
season in January.
Pantaloon Retail is likely to post a 10% sales growth as same store sales growth is likely to increase to high single digits. Net space
addition is expected to be muted as the company continues its store rationalization strategy. Though margins will be stable, higher
interest costs will result in a 5% PAT decline. However, this is expected to be the best of the last four quarters in terms of revenue
growth and profits.
Titan is expected to report a 18% sales growth with watches growing at 16% and jewelry division growing at 18%. Jewelry sales
growth will be a mix of high single digit volume growth (positive for the first time in 4 quarters) and higher realizations. EBITDA margins
are expected to improve 20bp with PAT growth expected at 19% for the quarter.
Shoppers Stop is expected to report a consolidated sales growth of 15%, with same store sales growth expected in high single digits
and the remainder being store expansion driven growth. Though margins in the standalone business will improve sequentially, YoY
margins are expected to decline by 150bp. PAT is expected to decline by 50% to Rs47m impacted by contraction in margins and
higher deprecation and interest costs in new store expansions.
(Rs m)
Net Sales
EBITDA
Profit After Tax
Q3FY13E
Q3FY12
% chg yoy
Q3FY13E
Q3FY12
% chg yoy
Q3FY13E
Q3FY12
% chg yoy
Pantaloon Retail
31,827
28,933
10.0
2,896
2,612
10.9
128
135
(5.1)
Shoppers' Stop
8,862
7,447
19.0
363
344
5.5
47
94
(50.0)
Titan Industries
28,796
24,404
18.0
2,563
2,132
20.2
1,949
1,639
18.9
January 2013
48

Telecom
Wireless business Seasonal tailwind and withdrawal of freebies to boost revenues
9
Domestic traffic expected to increase by 2-4% qoq for Bharti/Idea/RCOM led by festive demand
Withdrawal of freebies in select markets and higher mix of data revenue to drive ~1% improvement in average realizations
Domestic wireless business margins expected to increase by 50-100bp
Key tailwinds: better capacity utilization; uptick in realization; lower subscriber acquisition cost; Key headwind: marginal increase in ad
spends
Bharti Africa to report 3.5% qoq USD revenue growth with ~50bp margin improvement
VAS: weakness in domestic business to persist

9
OnMobile India revenue expected to decline ~4% qoq on the back of contract renewals and macro weakness; International revenue mix
estimated to inch up to ~61% of total with ~5% qoq revenue growth
Management commentary on domestic contracts and international taxation policy would be key monitorables
Consolidated earnings to see sequential uptick

9
Adjusted for derivatives/forex losses, earnings for telcos to see a sharp increase driven by strong EBITDA growth
Translation losses on foreign currency loans to be passed through balance sheet
Reiterate our positive stance on the sector - waning competitive intensity, better pricing power and improving regulatory environment
at the margin.
Recommend Outperformer on Bharti Airtel, Idea Cellular and Reliance Communications
January 2013
49

Telecom
(Rs m)
Bharti Airtel
IDEA Cellular
OnMobile Global
Reliance Communication
January 2013
Net Sales
EBITDA
Profit After Tax
Q3FY13E
Q3FY12
% chg yoy
Q3FY13E
Q3FY12
% chg yoy
Q3FY13E
Q3FY12
% chg yoy
202,833
184,767
9.8
64,131
59,585
7.6
8,535
10,192
(16.3)
55,863
50,308
11.0
15,542
13,446
15.6
3,103
2,320
33.8
1,819
1,688
7.8
405
391
3.6
141
178
(20.8)
53,416
50,551
5.7
17,147
16,141
6.2
2,307
1,862
23.9
50
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Q3FY13 Earnings Preview - Jan13

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Q3FY13 Earnings Preview - Jan13

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Earnings Preview

(Oct - Dec 2012)

IDFC Securities Research

For Private Circulation only. Important

Q3FY13E earnings highlights

Sensex earnings (ex-Financials) est to be up by 5.3%yoy

Profit After Tax

Oil & Gas

Profit After Tax

Slower topline growth trend continues

Net sales grow th (%)

Sensex earnings growth ex-Financials at 5.3% yoy

PAT (Rs bn)

Sensex qoq profit grow th (RHS)

Financials* and Oil & Gas to drive Sensex earnings

Oil & Gas

Earnings growth of IDFC universe ex Financials to decline 4.1% yoy

Profit After Tax

Oil & Gas

Profit After Tax

IDFC Securities Ex Financials

* - Financials estimates excluded, pending reinitiation coverage of the sector

Sector Winners & Losers

Sensex earnings growth* expected at 8.6% yoy in FY13

Profit After Tax

Oil & Gas

Sector-wise earnings preview (Q3FY13)

PAT to grow 29% yoy to Rs1.6bn