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April 6, 2016
Daljeet S. Kohli
Head of Research From Research Desk
Tel: +91 22 66188826 Economy Updates
daljeet.kohli@indianivesh.in Review of First Bi‐monthly Monetary Policy Statement of FY17
Company Updates
L&T Finance achieves target, downgrade to hold from buy with PT of 68…
Monthly Auto Numbers | March 2016
IndiaNivesh Universe ‐ Valuation Sheet
IndiaNivesh Securities Limited|Research Analyst SEBI Registration No. INH000000511
IndiaNivesh Research 601 & 602, Sukh Sagar, N. S. Patkar Marg, Girgaum Chowpatty, Mumbai 400 007. Tel: (022) 66188800
IndiaNivesh Research is also available on Bloomberg INNS, Thomson First Call, Reuters and Factiva INDNIV.
Daljeet S. Kohli Economy Update
Head of Research
Tel: +91 22 66188826
daljeet.kohli@indianivesh.in Review of First Bi‐monthly Monetary Policy Statement of FY17
Kaushal Patel In line with our expectations, the Reserve Bank of India (RBI) cut the repo rate by 25 bps to
Research Associate
6.50% from 6.75% in its first bi‐monthly monetary policy review of FY17. In addition, the
Tel: +91 22 66188834 RBI narrowed policy rate corridor from +/‐ 100 bps to +/‐ 50 bps. Consequently MSF rate
kaushal.patel@indianivesh.in reduced to 7.00% from 7.75% and reverse repo rate increased to 6.00% from 5.75%. RBI
also mentioned that it will continue to maintain its accommodative stance on monetary
policy subjective to future macroeconomic conditions. So, further repo rate cut decisions
will be driven by outcome of the monsoon, monetary policy transmission, trajectory of
core inflation and impact of implementation of the seventh pay commission. More
importantly, the central bank announced steps to boost liquidity in the system which
would help banks to pass on the benefits of lower rates to its borrowers.
Monetary and Liquidity Measures:
On the basis of an assessment of the current and evolving macroeconomic situation, the RBI
has decided to:
reduce the policy repo rate under the liquidity adjustment facility (LAF) by 25 bps from
6.75% to 6.50%;
reduce the minimum daily maintenance of the cash reserve ratio (CRR) from 95% of the
requirement to 90% with effect from the fortnight beginning April 16, 2016, while
keeping the CRR unchanged at 4.00% of net demand and time liabilities (NDTL);
continue to provide liquidity as required but progressively lower the average ex ante
liquidity deficit in the system from one per cent of NDTL to a position closer to
neutrality; and
narrow the policy rate corridor from +/‐100 bps to +/‐ 50 bps by reducing the MSF rate
by 75 bps and increasing the reverse repo rate by 25 bps, with a view to ensuring finer
alignment of the weighted average call rate (WACR) with the repo rate.
Consequently, the reverse repo rate under the LAF stands adjusted to 6.0%, and the
marginal standing facility (MSF) rate to 7.0%. The Bank Rate which is aligned to the MSF rate
also stands adjusted to 7.0%.
Policy Stance and Rationale:
Inflation: The RBI projected CPI inflation to decelerate modestly going forward and
remain around 5% during FY17 with small inter‐quarter variations. However, the RBI
also believed that there will be uncertainties surrounding mentioned inflation path due
to unseasonal rains, the likely spatial and temporal distribution of monsoon, low
reservoir levels and any upturn in commodity prices, especially oil. In addition,
persistently high inflation in certain services also warranted a close watch. Most
importantly, the RBI didn't factor any impact coming out of the implementation of the
seventh pay commission and mentioned that it may hurt RBI's projected inflation target
by 1.0‐1.5% over a two‐year period. Notably, the government has already made
provisions for the additional liabilities towards implementation of the Seventh Pay
Commission as well as One Rank One Pension scheme for Defense services. In such a
scenario, we believe that the RBI's current inflation projection will continue to face
upward pressures and the depth of further rate cut will be limited.
Growth: The RBI reiterated its FY17 growth guidance of 7.6% on back of assumptions of
normal monsoon and boost in consumption via the Seventh Pay Commission
implementation. However, the downside risks are also significant with fading impact of
lower input costs on value addition in manufacturing, continuing balance sheet stress
and weaker global growth and trade outlook.
Other Developments
Liquidity: The RBI announced a number of steps to boost liquidity. The reduction in
minimum daily maintenance of CRR to 90% from 95% will free around Rs 200‐210 bn
banks' money. In addition, as a part of its new liquidity framework, the RBI separated
system liquidity into (1) short‐term and (2) ‘durable’ or long term liquidity. More
importantly, the RBI has stated that it would first smooth the supply of durable liquidity
over the year using asset purchases and sales. Later, it will fine tune its operations to
meet the short‐term liquidity through term repos/reverse repo. At present, the daily
average liquidity deficit in the system is around Rs 1.5 tn and bringing it to near zero will
free up that much of funds which will result into lower cost of funds.
Narrowing Policy Corridor: The policy rate corridor was reduced to 50 bps from 100 bps
with repo rate at 6.5%. As a result, the upper bound rate (MSF) is now 7.0%, 50 bps
higher than the repo rate and the lower bound rate (reverse repo rate) is at 6.0%, 50
bps lower than the repo rate. The lowering of the policy corridor is useful especially
when banks are borrowing in the market. By lowering the MSF rate, in effect the call
rates would tend to move down. It will be more positive for bulk borrowers amongst
private banks (Yes Bank) and NBFCs (especially HFCs).
The second bi‐monthly monetary policy statement for FY17 will be announced on June 07,
2016 (Tuesday).
Conclusion:
As expected, the RBI announced repo rate cut by 25 bps to 6.50% from 6.75% in its first bi‐
monthly monetary policy review of FY17 and also continued to maintain its accommodative
monetary policy stance while ensuring the disinflationary path is a clear priority. The
liquidity measures announced will help ease the liquidity conditions in the system.
Overall, we continue to expect the rate cuts to be limited to a total of 50 bps in CY16
considering the uncertainties surrounding the RBI’s inflation projection for FY17. So, we
believe that there is still space for one more 25 bps cut. However, we believe that RBI will
take a pause before the next rate cut and it will be more dependent on normal monsoon
and timing of implementation of the seventh the pay commission.
Repo & Reverse Repo Rates CRR (%)
10.00 10.00
9.00 9.00
8.00 8.00
7.00 7.00
6.00 6.00
5.00 5.00
4.00 4.00
3.00 3.00
2.00 2.00
1.00 1.00
0.00 0.00
01‐Jul‐08
01‐Jul‐09
01‐Jul‐10
01‐Jul‐11
01‐Jul‐12
01‐Jul‐13
01‐Jul‐14
01‐Jul‐15
01‐Apr‐08
01‐Apr‐09
01‐Apr‐10
01‐Apr‐11
01‐Apr‐12
01‐Apr‐13
01‐Apr‐14
01‐Apr‐15
01‐Apr‐16
01‐Jan‐08
01‐Jan‐09
01‐Jan‐10
01‐Jan‐11
01‐Jan‐12
01‐Jan‐13
01‐Jan‐14
01‐Jan‐15
01‐Jan‐16
01‐Oct‐08
01‐Oct‐09
01‐Oct‐10
01‐Oct‐11
01‐Oct‐12
01‐Oct‐13
01‐Oct‐14
01‐Oct‐15
01‐Apr‐08
01‐Jul‐08
01‐Apr‐09
01‐Jul‐09
01‐Apr‐10
01‐Jul‐10
01‐Apr‐11
01‐Jul‐11
01‐Apr‐12
01‐Jul‐12
01‐Apr‐13
01‐Jul‐13
01‐Apr‐14
01‐Jul‐14
01‐Apr‐15
01‐Jul‐15
01‐Apr‐16
01‐Jan‐08
01‐Jan‐09
01‐Jan‐10
01‐Jan‐11
01‐Jan‐12
01‐Jan‐13
01‐Jan‐14
01‐Jan‐15
01‐Jan‐16
01‐Oct‐08
01‐Oct‐09
01‐Oct‐10
01‐Oct‐11
01‐Oct‐12
01‐Oct‐13
01‐Oct‐14
01‐Oct‐15
Source: RBI, IndiaNivesh Research Source: RBI, IndiaNivesh Research
70.00
68.00
66.00
64.00
62.00
60.00
58.00
56.00
54.00
52.00
50.00
19.00
20.00
21.00
22.00
23.00
24.00
25.00
26.00
‐5.0
0.0
5.0
‐10.0
10.0
15.0
04‐02‐2013 01‐Jan‐08
SLR (%)
Jan‐12 01‐Apr‐08
USD/INR
14/05/2013
19/06/2013 01‐Jul‐08
Apr‐12 01‐Oct‐08
25/07/2013 01‐Jan‐09
CPI vs WPI (%)
Jul‐12 09‐03‐2013 01‐Apr‐09
10‐11‐2013 01‐Jul‐09
Oct‐12 01‐Oct‐09
21/11/2013
30/12/2013 01‐Jan‐10
Jan‐13 01‐Apr‐10
02‐05‐2014
Source: RBI, IndiaNivesh Research
Source: RBI, IndiaNivesh Research
Source: RBI, IndiaNivesh Research
01‐Jul‐10
Apr‐13 18/03/2014 01‐Oct‐10
05‐02‐2014 01‐Jan‐11
Jul‐13
06‐10‐2014 01‐Apr‐11
01‐Jul‐11
CPI (%)
Oct‐13 16/07/2014
01‐Oct‐11
26/08/2014
Jan‐14 01‐Jan‐12
10‐07‐2014 01‐Apr‐12
SLR (%)
USD/INR
Apr‐14 19/11/2014 01‐Jul‐12
26/12/2014 01‐Oct‐12
Jul‐14 02‐03‐2015 01‐Jan‐13
WPI (%)
16‐03‐2015 01‐Apr‐13
Oct‐14 01‐Jul‐13
27‐04‐2015 01‐Oct‐13
Jan‐15 04‐06‐2015 01‐Jan‐14
10‐07‐2015 01‐Apr‐14
Apr‐15 17‐08‐2015 01‐Jul‐14
24‐09‐2015 01‐Oct‐14
Jul‐15 01‐Jan‐15
04‐11‐2015 01‐Apr‐15
Oct‐15 15‐12‐2015 01‐Jul‐15
22‐01‐2016 01‐Oct‐15
Jan‐16 02‐03‐2016 01‐Jan‐16
01‐Apr‐16
0
5
10
15
20
25
30
35
‐10.0
‐5.0
0.0
5.0
10.0
15.0
0.00
‐30.00
‐20.00
‐10.00
10.00
20.00
30.00
Apr‐11 FY06
Apr‐13
Jul‐11
Jun‐13 FY07
Oct‐11
IIP Growth (%)
Aug‐13
Jan‐12
Oct‐13 FY08
Apr‐12
Jul‐12 Dec‐13
FY09
Source: RBI, IndiaNivesh Research
Oct‐12 Feb‐14
Jan‐13 Apr‐14
FY10
Apr‐13
Exports
Jun‐14
Aggregate Deposits (%)
Oct‐13 Oct‐14
IIP growth (%)
Jan‐14 FY12
Source: Department of Commerce, IndiaNivesh Research
Dec‐14
Apr‐14
Imports
Feb‐15
Jul‐14 FY13
Apr‐15
Oct‐14
Trends in Export and Import Growth (y‐o‐y %)
Source: RBI, IndiaNivesh Research; Outstanding as of March 18, 2016
Jan‐15 Jun‐15
FY14
Gross Bank Credit (%)
Apr‐15 Aug‐15
Jul‐15 Oct‐15 FY15
Oct‐15 Dec‐15
Jan‐16 Feb‐16 FY16*
Daljeet S. Kohli Company Updates
Head of Research
Tel: +91 22 66188826
daljeet.kohli@indianivesh.in L&T Finance achieves target, downgrade to hold from buy with PT of 68…
Yogesh Hotwani
Research Analyst We had recommended buy on L&T Finance holdings (LTFH) at Rs 58/‐ in our report dated
25th January 2016 for target price of Rs 68/‐. Yesterday the stock has reached our target
Tel: +91 22 66188839
price yielding returns of 17%.
yogesh.hotwani@indianivesh.in
L&TFH’s Q3FY16 results were lower than expectation on earnings mainly due to higher than
expected provisioning increase of 13% yoy. Net Interest income and operating profit was
inline with expectation with increase of 19% yoy each. Consolidated loan book grew by 23%
yoy led by higher growth in L&T Infra (up 29% yoy) and Housing Finance (up 104% yoy on
back of low base). Disbursement growth was higher at 40% yoy. Asset quality deteriorated
in Q3FY16 as Consolidated Gross / Net increased by 18% / 22% qoq (up 25 / 23 bps qoq in %
terms) to 3.3% / 2.2% respectively (based on 150 dpd). Incremental asset quality pain has
come from retail financing business while infra financing segment reported marginal
improvement in Gross / Net NPA.
While we like the company’s strategy of focusing on segments where the asset quality stress
is comparatively lesser (like vehicle financing, Housing, Micro Financing and rural products)
and operational projects (in L&T Infra), we continue to remain cautious on asset quality. At
CMP of Rs 69, LTFH is trading at consolidated P/ABV of 2x and 1.8x for FY16E and FY17E
respectively. Stock price has moved up by 23% in last 1 month leaving limited upside from
current price. Hence downgrade rating to hold from buy with target price of Rs 68.
Daljeet S. Kohli, Head of Research Monthly Auto Numbers | March 2016
Tel: +91 22 66188826
daljeet.kohli@indianivesh.in
Force Motors Ltd: Total sales increased 26% YoY, Maintain BUY with target
Abhishek Jain, Research Analyst price of Rs. 3780
Tel: +91 22 66188832
abhishek.jain@indianivesh.in Segment Mar‐16 Mar‐15 Change YoY Feb‐16 Change MoM YTD FY16 YTD FY15 Change YoY
SCV & LCV 2,782 1,921 45% 1,544 80% 46,483 38,175 22%
Aman Vij, Research Analyst SCV & LCV Domestic 2,541 1,907 33% 1,359 87% 44,128 36,471 21%
Tel: +91 22 66188818 SCV & LCV Export 241 14 >99% 185 30% 2,355 1,704 38%
aman.vij@indianivesh.in UV, SUV & Tractor 1,981 1,850 7% 1,217 63% 22,283 20,621 8%
UV, SUV & Tractor Domestic 1,968 1,822 8% 1,208 63% 22,107 20,344 9%
UV, SUV & Tractor Export 13 28 ‐54% 9 44% 176 277 ‐36%
Total 4,763 3,771 26% 2,761 73% 33,429 29,387 14%
Domestic 4,509 3,729 21% 2,567 76% 31,080 27,805 12%
Exports 254 42 >99% 194 31% 2,349 1,582 48%
Source: Company Filings; IndiaNivesh Research
Force Motors total sales increased 26% YoY to 4763 units.
LCV & SCV sales increased by 45% YoY to 2782 units. The company has been performing
exceedingly well in this segment due to strong demand for Traveller class of vehicles
from four segments namely Ambulances, Bus aggregators, School bus segment and
Diversified segment (Firefighting and Rescue vehicles, Defense vehicles).
UV, SUV & Tractor sales up 7% YoY to 1981 units. The demand in this segment seems to
be picking up since last few months after launch of Deluxe version of Trax Crusier and
Trax Toofan in October 2015.
Valuation
Considering the growth in Luxury car segment, we see strong revenue growth from Auto
component business that will help in overall margin expansion. Strong demand for Force
Traveller from multiple industries will ensure strong growth of The Automobile segment. The
company is net debt free company, sitting on cash and cash equivalents of around Rs. 4 bn
(Rs. 305/share) as on 31st September 2015. The company’s net sale is expected to grow at
CAGR 21% while the company’s profit is expected to grow at CAGR of 43% for FY15‐FY17E.
Due to the above reasons, we value the stock at 24X FY17E earnings.
At CMP of Rs. 3088, Force Motors is trading at 19.6x FY17e earnings; we recommend BUY
with target price of Rs. 3780 (based on 24x FY17e earnings)
IndiaNivesh Universe | Valuation Table (contd...) 6 April, 2016
IndiaNivesh Universe | Valuation Table (CMP as of previous day)
Rs. Rs. % Sales (Rs. Mn) EBITDA (Rs.Mn) PAT (Rs. Mn) EPS (Rs.) P/E (x)
Com pany Nam e CMP TP Reco (-) Dow n/(+) Up FY15 FY16E FY17E FY15 FY16E FY17E FY15 FY16E FY17E FY15 FY16E FY17E FY16E FY17E
Auto
Atul Auto 511 552 BUY 8 1,168 5,348 6,027 579 749 859 389 488 569 18.5 22.2 25.9 23.0 19.7
Bajaj Auto 2,395 2,820 BUY 17.8 211,062 233,897 263,651 41,388 47,818 53,315 30,256 36,950 40,804 104.6 128.0 141.0 18.7 17.0
Exide Industries 135 165 BUY 22.4 95,350 68,136 74,924 11,650 10,216 11,377 6,146 6,026 6,733 7.2 7.1 8.0 18.9 16.9
Force Motors 3,088 3,780 BUY 22.4 23,641 29,833 34,598 1,475 2,476 3,079 1,015 1,640 2,076 77.1 124.4 157.5 24.8 19.6
Lumax Auto 300 448 BUY 49.4 8,372 8,926 11,308 667 741 1,108 450 364 611 33.0 26.7 44.8 11.2 6.7
Hero MotoCorp 2,963 3,243 BUY 9.4 273,033 280,984 304,101 35,424 42,957 47,352 23,647 30,323 32,877 118.4 151.8 164.6 19.5 18.0
Mahindra & Mahindra 1,216 1,280 HOLD 5.3 638,626 775,541 880,592 88,932 93,472 115,859 31,375 36,824 47,372 50.7 62.0 79.4 19.6 15.3
Maruti Suzuki India 3,555 3,916 HOLD 10.2 499,706 570,333 643,956 67,130 86,457 90,531 37,112 44,817 48,885 122.9 148.4 161.9 24.0 22.0
Tata Motors Company 371 496 BUY 33.9 2,627,963 2,607,095 2,776,420 392,364 353,610 389,656 139,863 114,733 126,284 43.0 33.8 37.2 11.0 10.0
TVS Motor Company 314 235 SELL -25.2 103,117 118,531 136,698 6,030 8,475 10,547 3,283 4,822 6,199 6.9 10.2 13.0 30.8 24.2
SKF India
I di $$$ 1 289
1,289 1 063
1,063 HOLD -17.5
17 5 23 758
23,758 25 605
25,605 25 605
25,605 2 739
2,739 3 006
3,006 3 551
3,551 2 060
2,060 2 313
2,313 2 804
2,804 39 1
39.1 43 8
43.8 53 1
53.1 29 4
29.4 24 3
24.3
Sw araj Engines 871 946 HOLD 8.7 5,397 5,501 6,868 747 802 1,042 518 561 735 41.7 45.2 59.1 19.3 14.7
FMCG
Bajaj Corp 382 459 HOLD 20.2 8,256 10,132 11,936 2,392 2,691 3,173 1,727 2,009 2,703 11.7 14.0 18.7 27.3 20.4
Godrej Consumer Products** 1,352 UR NOT RATED NA 82,764 90,584 104,380 13,710 16,334 19,133 9,071 11,343 13,465 26.6 33.2 39.4 40.7 34.3
Marico** 245 215 HOLD -12.2 57,330 61,864 69,361 8,859 11,692 13,664 5,735 7,852 9,184 4.4 6.1 7.1 40.2 34.5
Dabur** 246 256 HOLD 4.1 78,065 84,620 95,591 13,343 15,140 17,406 10,658 12,485 14,450 6.0 7.1 8.2 34.6 29.9
Tata Global Beverages** 118 180 BUY 52.2 79,934 82,430 88,090 7,759 7,305 8,206 2,478 3,520 4,185 3.9 5.9 6.9 20.2 17.1
IndiaNivesh Universe | Valuation Table (contd...)
Rs. Rs. % Sales (Rs. Mn) EBITDA (Rs.Mn) PAT (Rs. Mn) EPS (Rs.) P/E (x)
Com pany Nam e CMP TP Reco (-) Dow n/(+) Up FY15 FY16E FY17E FY15 FY16E FY17E FY15 FY16E FY17E FY15 FY16E FY17E FY16E FY17E
Pharm a
Ajanta Pharma 1,414 1,317 HOLD -6.9 14,806 18,290 24,620 5,053 5,908 7,977 3,099 3,841 5,539 35.2 43.5 62.7 32.5 22.6
Aurobindo Pharma 751 880 BUY 17.2 121,205 154,014 177,085 26,058 32,634 40,133 15,758 22,794 28,511 27.0 39.2 49.0 19.2 15.3
Alembic Pharma 588 671 HOLD 14.1 20,561 34,415 38,699 3,976 9,807 8,147 2,829 6,581 6,542 15.0 34.9 34.7 16.8 16.9
Biocon 527 458 HOLD -13.1 30,898 35,830 41,490 7,158 7,499 9,479 4,974 4,303 4,951 24.9 21.8 25.0 24.2 21.1
Cadila 319 354 HOLD 11.1 84,971 105,636 122,320 17,737 23,972 27,102 11,506 16,764 20,950 11.2 15.5 17.7 20.6 18.0
Cipla 503 637 BUY 26.6 113,454 134,867 160,888 21,631 28,036 32,542 11,808 19,315 24,833 14.7 24.1 30.9 20.9 16.3
Divis Lab 1,013 1,276 BUY 25.9 31,149 38,011 43,107 11,658 16,400 16,641 8,515 11,962 12,639 32.1 40.0 48.2 25.3 21.0
Dr Reddy 3,000 2,978 HOLD -0.7 148,715 166,636 180,117 25,465 43,187 49,617 23,364 26,193 25,840 136.6 149.4 135.4 20.1 22.2
Glenmark 789 995 BUY 26.1 66,298 82,766 105,941 11,939 14,931 20,754 4,753 11,527 15,692 17.5 42.7 58.2 18.5 13.6
Indoco 275 392 BUY 42.5 8,570 9,832 12,698 1,655 1,779 2,760 828 991 1,738 9.0 10.8 18.9 25.5 14.6
Jubilant Life Science 405 494 BUY 22.0 58,262 68,566 76,736 7,454 12,250 14,468 -578 4,567 6,142 -3.6 28.7 38.6 14.1 10.5
Lupin 1,464 1,926 HOLD 31.6 127,700 130,350 164,244 37,650 32,545 47,228 24,032 22,936 33,130 53.2 51.2 73.9 28.6 19.8
S Ph
Sun Pharma 801 880 HOLD 99
9.9 274 334
274,334 246 491
246,491 299 095
299,095 80 016
80,016 76 081
76,081 118 172
118,172 45 394
45,394 47 121
47,121 84 708
84,708 18 9
18.9 19 6
19.6 35 2
35.2 40 9
40.9 22 8
22.8
Ipca Lab 555 629 HOLD 13.3 31,418 31,960 42,486 5,339 4,635 8,269 2,542 2,729 5,293 20.2 13.1 30.1 42.2 18.5
Torrent Pharma 1,399 1,632 BUY 16.7 45,853 68,933 74,870 10,309 23,674 18,870 7,509 13,481 14,447 44.4 49.1 85.4 13.4 16.4
JB Chemical 246 341 BUY 38.7 11,442 12,828 14,957 2,938 2,154 2,741 1,004 1,675 1,927 11.8 19.8 22.8 12.4 10.8
Shilpa Medicare 431 517 HOLD 19.9 5,839 6,997 9,897 1,267 1,449 2,091 737 901 1,313 9.6 11.7 17.0 36.9 25.4
Others
BASF India Ltd.** && 834 NA HOLD NA 42,347 53,721 61,673 3,642 228 2,515 1,279 993 2,110 -15.5 22.9 48.7 36.4 17.1
UPL 459 480 HOLD 4.7 120,905 134,595 153,439 23,853 26,670 31,785 11,440 15,620 18,117 26.7 36.2 41.9 12.7 10.9
Coromandel International Ltd. 193 222 BUY 15.2 80,792 113,159 125,939 10,380 7,582 9,068 4,018 3,026 4,206 15.4 10.7 14.8 18.0 13.0
Meghmani Organics Ltd 24 34 BUY 39 6
39.6 12 942
12,942 14 126
14,126 15 403
15,403 1 922
1,922 2 800
2,800 2 879
2,879 439 777 831 16 4
16.4 17 5
17.5 17 7
17.7 14
1.4 14
1.4
Camlin Fine Science Ltd 90 177 BUY 96.9 5,583 5,047 6,914 882 929 1,404 550 399 758 16.4 4.2 7.9 21.4 11.4
Kajaria Ceramics 942 952 HOLD 1.0 21,869 24,997 30,257 3,555 4,543 5,615 1,756 2,385 3,025 22.7 30.0 38.1 31.4 24.7
Somany Ceramics 375 430 BUY 14.5 15,431 17,567 20,770 1,093 1,107 1,454 464 606 780 11.9 14.3 18.4 26.3 20.4
Aditya Birla Nuvo Ltd.** 814 1,257 BUY 54.4 265,160 278,836 317,596 54,043 62,700 73,904 14,155 15,776 18,246 108.6 127.7 151.9 6.4 5.4
Radico Khaitan Ltd.** 96 165 BUY 71.7 14,122 15,464 16,854 1,935 2,062 2,378 712 871 1,082 3.7 6.5 8.2 14.7 11.8
Kaveri Seed Ltd** 377 504 BUY 33.7 11,612 8,566 10,536 3,128 1,783 2,911 3,010 1,604 2,716 43.7 23.3 39.4 16.2 9.6
HSIL Ltd 300 329 BUY 9.6 19,806 21,497 23,642 3,300 3,037 3,448 854 965 1,120 12.9 13.3 15.5 22.6 19.4
Liberty Shoes Ltd 175 128 HOLD -27.0 5,257 4,951 5,575 394 431 496 132 191 250 7.9 70.0 86.0 2.5 2.0
Pennar Industries Ltd 48 87 BUY 82.4 12,634 15,480 19,376 1,178 1,461 1,839 359 599 839 2.0 5.0 7.0 9.6 6.8
KPR Mills Ltd 789 1,059 BUY 34.3 25,658 24,764 27,011 4,577 3,987 4,531 1,736 2,147 2,757 45.7 57.0 73.2 13.8 10.8
Nitin Sp
Spinners 58 112 BUY
U 93.4
93 6,165
6, 65 7,710
, 0 8,295
8, 95 1,004
,00 1,414
, 1,574
,5 410
0 474 496
96 8.9
8 9 10.3
03 10.8
08 5.6
5 6 5.4
5
KEC International 123 188 BUY 52.5 84,678 85,034 88,900 5,118 6,463 6,934 910 1,767 2,224 6.3 6.9 8.7 17.9 14.2
Rs. Rs. % Sales (Rs. Mn) EBITDA (Rs.Mn) PAT (Rs. Mn) EPS (Rs.) EV/EBITDA (x)
Com pany Nam e CMP TP Reco (-) Dow n/(+) Up FY15 FY16E FY17E FY15 FY16E FY17E FY15 FY16E FY17E FY15 FY16E FY17E FY16E FY17E
Telecom
Bharti Airtel 331 287 SELL -13.2 920,394 965,471 1,049,837 312,210 336,459 366,244 51,835 53,810 59,840 13.0 11.7 15.1 5.7 5.2
Idea Cellular 109 127 SELL 16.1 315,269 361,487 408,480 107,668 130,135 138,883 31,929 33,257 25,734 9.0 9.1 7.0 6.1 5.5
Real Estate
Oberoi Realty 235 342 BUY 45.4 9,227 14,979 24,465 4,205 7,696 12,649 3,171 3,966 4,787 9.7 12.1 14.6 10.5 6.4
Nesco 1,493 1,896 BUY 27.0 1,413 2,253 2,742 1,039 1,914 1,975 816 1,221 1,511 58.0 86.6 107.3 8.9 8.1
Ashiana Housing Ltd 135 220 BUY 62.8 1,413 3,549 5,517 1,039 996 1,794 816 796 1,175 58.0 6.2 11.4 11.9 6.6
IndiaNivesh Universe | Valuation Table (contd...)
Rs. Rs. % Sales (Rs. Mn) EBITDA (Rs.Mn) PAT (Rs. Mn) EPS (Rs.) P/BV (x)
Com pany Nam e CMP TP Reco (-) Dow n/(+) Up FY15 FY16E FY17E FY15 FY16E FY17E FY15 FY16E FY17E FY15 FY16E FY17E FY16E FY17E
Pow er
Coal India 275 467 BUY 69.7
69 7 741 201
741,201 800 644
800,644 899 775
899,775 173 354
173,354 189 493
189,493 217,302
217 302 137,267
137 267 171,842
171 842 194,343
194 343 21.73
21 73 27 20
27.20 31 00
31.00 42
4.2 3.9
3 9
NTPC 127 162 BUY 27.7 806,220 831,301 853,268 175,120 191,199 196,252 99,863 87,957 84,153 12.11 10.70 10.20 1.2 1.1
Pow er Grid Corporation 139 187 BUY 34.5 178,396 210,265 248,068 152,433 180,051 213,323 54,965 66,617 84,098 10.51 12.73 16.08 1.7 1.5
Reliance Pow er 49 60 BUY 23.1 68,527 93,281 96,064 25,866 39,857 42,900 10,283 13,728 14,000 3.68 4.76 5.00 0.6 0.6
Tata Pow er Company 67 104 BUY 55.2 343,669 358,331 375,457 69,502 78,450 82,034 1,678 10,614 13,624 0.17 4.08 5.12 1.2 1.1
Rs. Rs. % Net Interest Incom e (Rs. Mn) Pre-Tax Pre-Prov. Profit (Rs.Mn) PAT (Rs. Mn) EPS (Rs.) P/ABV (x)
Com pany Nam e CMP TP Reco (-) Dow n/(+) Up FY15 FY16E FY17E FY15 FY16E FY17E FY15 FY16E FY17E FY15 FY16E FY17E FY16E FY17E
Banking & Financial Services
Allahabad Bank 55 52 HOLD -4.6 61,779 60,669 65,624 44,597 42,493 46,191 6,209 -5,130 4,541 11.4 -9.4 8.3 0.6 0.5
Bank of Baroda 144 130 HOLD -9 9
-9.9 131,872
131 872 123,065
123 065 138 532
138,532 99 146
99,146 83,457
83 457 95 489
95,489 33 979
33,979 -25,743
-25 743 20,491
20 491 15.3
15 3 -11.1
-11 1 89
8.9 23
2.3 1.6
1 6
Canara Bank 186 156 HOLD -16.3 96,637 96,867 102,187 69,504 70,781 74,395 27,026 12,031 17,258 56.9 22.2 31.8 0.8 0.7
Corporation Bank 39 NA NOT RATED NA 40,552 44,403 48,886 30,123 34,235 38,132 5,691 -3,095 4,146 6.8 -3.1 4.2 1.2 0.9
Punjab National Bank 83 61 HOLD -26.3 165,556 166,429 188,167 119,548 122,385 139,910 30,616 7,808 34,524 17.0 4.0 18.0 1.3 0.8
State Bank of India 184 225 BUY 22.1 550,153 556,926 614,137 390,061 397,534 448,287 131,016 102,681 142,028 18.0 13.0 18.0 1.5 1.4
Axis Bank 433 466 BUY 7.7 142,241 165,932 189,459 133,854 158,319 183,507 73,578 82,908 93,834 31.0 35.0 39.0 2.1 1.8
DCB Bank 81 85 HOLD 4.8 5,082 6,195 7,284 2,774 3,382 3,576 1,912 1,696 1,720 6.8 6.0 6.1 1.4 1.3
Federal Bank 44 46 BUY 5.4 23,804 24,591 27,401 16,278 13,914 15,648 10,058 6,590 7,905 5.9 3.8 4.6 1.0 0.9
HDFC Bank 1,057 1,264 BUY 19.5 223,957 275,323 333,307 174,045 212,775 258,132 102,159 122,030 149,503 40.8 48.3 59.2 3.8 3.2
ICICI Bank 226 280 BUY 24.1 190,396 214,547 237,005 197,199 242,845 240,688 111,753 127,070 125,595 19.0 22.0 22.0 1.7 1.6
Karur Vysya Bank 473 494 HOLD 4.6 15,337 17,296 18,991 10,197 12,653 14,231 5,321 5,520 6,445 43.7 45.4 53.0 1.4 1.2
Lakshmi Vilas Bank 83 113 BUY 35.9 5,267
, 6,515
, 7,689
, 3,764
, 4,505
, 5,466
, 1,323
, 1,715
, 2,146
, 7.4 9.6 12.0 1.0 0.9
Bajaj Finance 6,824 7,200 BUY 5.5 28,717 40,714 52,462 17,415 25,125 32,129 8,979 12,932 16,599 180.0 241.0 304.0 5.1 4.1
CARE+++ 1,013 1,650 BUY 62.9 2,572 2,710 3,037 1,621 1,758 1,931 1,416 1,200 1,311 48.4 41.4 45.2 7.5 6.9
CFL 426 468 BUY 9.9 6,277 9,348 11,786 2,657 4,597 6,134 1,120 1,605 2,238 12.3 17.6 24.5 2.4 2.2
Dew an Housing 190 285 BUY 49.9 13,798 16,763 19,492 10,480 12,575 14,404 6,213 7,334 8,463 42.6 24.7 28.6 2.5 2.3
L&T Finance Holding 69 68 BUY -2.1 26,284 31,507 37,007 16,926 20,173 24,032 7,068 8,205 10,295 4.9 4.7 5.7 2.0 1.8
LIC Housing Finance 468 555 BUY 18.7 22,364 29,000 32,907 21,092 26,635 30,338 13,862 16,378 18,672 27.5 32.4 37.0 2.7 2.3
Note: ** Bloomberg Est; +++ Manufacturing Format; $$$ Calendar Year; ### Y/E June, && EBIT
Source: Company Filings; IndiaNivesh Research
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recommendations or views expressed in this report: Daljeet S Kohli, Amar Maurya, Abhishek Jain, Yogesh Hotwani, Kaushal Patel, Tushar Manudhane, Aman Vij, Harshraj Aggarwal & Dharmesh Kant.
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Definitions of ratings
BUY. We expect this stock to deliver more than 15% returns over the next 12 months.
HOLD. We expect this stock to deliver ‐15% to +15% returns over the next 12 months.
SELL. We expect this stock to deliver <‐15% returns over the next 12 months.
Our target prices are on a 12‐month horizon basis.
Other definitions
NR = Not Rated. The investment rating and target price, if any, have been arrived at due to certain circumstances not in control of INSL
CS = Coverage Suspended. INSL has suspended coverage of this company.
UR=Under Review. Such e invest review happens when any developments have already occurred or likely to occur in target company & INSL analyst is waiting for some more information to draw
conclusion on rating/target.
NA = Not Available or Not Applicable. The information is not available for display or is not applicable.
NM = Not Meaningful. The information is not meaningful and is therefore excluded.
Research Analyst has not served as an officer, director or employee of Subject Company
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