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Absolute : LONG
Relative : Overweight
3QFY18 Result: Estimate (), TP (), Rating () Regular Coverage 20% ATR in 17 Months
Earnings to bottom out in FY18 - retain LONG on attractive valuations Building Material
© 2018 Equirus All rights reserved
Pokarna’s (POKR) 3QFY18 consolidated revenue/EBITDA declined 1%/8% yoy to Change in Estimates:
Rating Information Rs 879mn/Rs 299mn, coming in lower than EE due to a change in the quartz product
Rs. Mn FY18E Chg (%) FY19E Chg (%)
Price (Rs) 212 mix, higher input prices in quartz and INR appreciation vs. USD. Granite revenues
Target Price (Rs) 266 improved somewhat though margins came in lower yoy amid continued competitive Sales 3,404 -8% 3,732 -9%
Target Date 30th Jun'19 pressures. We expect (a) continued headwinds for the granite segment over the next
EBITDA 1,075 -5% 1,257 -7%
Target Set On 18th Feb'18 few quarters and (b) capacity constraints for the quartz division till the new facility
Implied yrs of growth (DCF) 15 comes on stream, likely by 1HY20E-end. We cut our FY18/FY19 consolidated sales PAT 500 -10% 583 -14%
February 18, 2018 Analyst: Pranav Mehta (+91-7574885494)/Dhaval Dama (+91-8128694102) Page 1 of 14
Before reading this report, you must refer to the disclaimer on the last page.
Pokarna Ltd Absolute –LONG Relative – Overweight 20% ATR in 17 Months
Company Snapshot Key Triggers: Pickup in the quartz business, revival in granite volumes and margin
expansion due to improved utilization in the quartz business and backward integration in
How we differ from Consensus the granite business.
- Equirus Consensus % Diff Comment
FY18E 16.1 - - There is not much active coverage on Sensitivity to Key Variables % Change % Impact on EPS
EPS the stock
FY19E 18.8 - - EBITDAM -1 % -5 %
FY18E 3,404 - - - - -
Sales
FY19E 3,732 - -
- - -
FY18E 500 - -
PAT
FY19E 583 - - DCF Valuations & Assumptions
Our Key Investment arguments: Rf Beta Ke Term. Growth Debt/IC in Term. Yr
6.8 % 1.0 12.8 % 2.5 % 66.1 %
Well-positioned to capture fast-growing quartz demand in the US but only post new
capacity commissioning by end of 1H20: We expect POKR to clock a 15% quartz revenue - FY18E FY19E FY20-22E FY23-27E FY28-32E
CAGR over FY17-FY21E led by (a) its status as an exclusive licensee of patented Breton Sales Growth -10 % 10 % 18 % 12 % 4%
Stone technology to manufacture high-grade export quality quartz, (b) distribution in NOPAT Margin 20 % 21 % 20 % 18 % 18 %
more than 20 countries, (c) increasing presence in higher-value quartz, and (d) higher IC Turnover 0.76 0.58 0.62 0.62 0.62
quartz sale under own brand, ‘Quantra’. RoIC 16.2 % 14.5 % 13.4 % 12.0 % 11.4 %
Tie-up with IKEA, incremental capex to boost quartz revenues from FY21E: We expect Years of strong growth 1 2 5 10 15
POKR to be a big beneficiary of IKEA’s entry into the Indian countertop market over the
Valuation as on date (Rs) 141 158 155 195 200
next 3-4 years. Capacity expansion by 130% in FY20E would remove capacity constraints
Valuation as of Jun'19 166 186 182 230 236
in the quartz division.
Based on DCF, assuming 15 years of 4% CAGR growth and 11% average ROIC, we derive
Valuations remain cheap at 7.9x FY20E EPS of Rs 27/share. our current fair value of Rs 200 and a Jun’19 fair value of Rs 236.
Key Estimates: Company Description: POKR, promoted by Mr. Gautam Chand Jain, is one of India’s
(Rs. Mn) FY17 FY18E FY19E FY20E leading granite exporters. It is the only granite company in India to be fully integrated
Granite Revenues 1,552 1,464 1,646 1,908 from quarries to marketing. It exports granite to over 49 countries around the world. The
Quartz Revenues 2,188 1,903 2,078 2,798
company, through its wholly-owned subsidiary M/s Pokarna Engineered Stone Ltd.,
manufactures ‘Natural Quartz Surfaces’ also known as ‘Engineered Stone’ or ‘Compound
Stone’. It is the only licensee of Breton Stone Technology in India for Quartz surfaces. It
Risk to Our View: Prolonged slowdown in the US housing market.
exports quartz surfaces to more than 20 countries across the globe.
February 18, 2018 Analyst: Pranav Mehta (+91-7574885494)/Dhaval Dama (+91-8128694102) Page 2 of 14
Pokarna Ltd Absolute –LONG Relative – Overweight 20% ATR in 17 Months
PAT before MI & Associates 145 149 130 187 -3% 11% -22%
Minority Interest 0 0 0 0
Profit from Assoc. 0 0 0 0
Recurring PAT 145 149 130 187 -3% 11% -22%
Extraordinaries 0 0 0 0
Reported PAT 145 149 130 187 -3% 11% -22%
EPS (Rs) 4.7 4.8 4.2 6.0 -3% 11% -22%
EBITDA Margin 34% 32% 32% 37% 243 bps 171 bps -247 bps
EBIT Margin 28% 26% 27% 32% 211 bps 173 bps -339 bps
PBT Margin 21% 20% 20% 26% 104 bps 134 bps -489 bps
PAT Margin 17% 16% 15% 21% 69 bps 119 bps -450 bps
Tax Rate 22% 21% 23% 19% 60 bps -74 bps 262 bps
February 18, 2018 Analyst: Pranav Mehta (+91-7574885494)/Dhaval Dama (+91-8128694102) Page 3 of 14
Pokarna Ltd Absolute –LONG Relative – Overweight 20% ATR in 17 Months
Earnings call takeaways POKR plans to switch its entire dollar-denominated loan and has already received
confirmations from two of its consortium banks, while the third one will sanction the
Segment performance overview new terms soon. Also, of the Rs 1.17bn loan, the company would be repaying
Consolidated (Rs mn) 9M18 9M17 %Growth Rs 350mn in the next 12 months.
Revenue 2,395 2,707 -12% Competition from Brazil in the granite space remains stiff but granite consumption
itself is seeing some revival. The US market is fairly good and construction activity is
EBITDA 736 1,015 -28%
buoyant; while the market has migrated to quartz, some customers continue to
PAT 330 574 -42% prefer granite.
Granite (Rs mn) In the US, the quartz market is seeing double-digit growth while other natural stone
Revenue 1,094 1,095 0% segments (marble, granite) are witnessing low, single-digit growth.
EBITDA 298 282 5% Chinese products generally compromise on quality, which helps them sell at lower
ASPs. POKR is making efforts to educate Indian consumers on the quality aspect,
Capital Employed 1,060 980 8%
thereby justifying its premium pricing.
Quartz (Rs mn)
POKR is maintaining an asset turnover ratio between 1x-1.25x. The quantum of
Revenue 1,313 1,636 -20% increment in this ratio cannot be ascertained at this juncture as it hinges on how the
EBITDA 479 753 -36% company brings in new products from the facility.
Capital Employed 2,310 2,220 4% POKR is looking for expansion into new geographies such as India, Europe, and
Australia, which would get equal focus along with the US.
The granite business delivered strong revenues yoy due to an improvement in It will take a couple of years for the entire Rs 2.5bn additional debt to come on the
efficiencies at quarries and overall traction in the US markets. Competitive intensity balance sheet.
continues and POKR expects the environment to improve gradually. The monitoring period in new capex debt would be 2+1 years, including construction,
Going forward, management intends to increase contribution from lower volume and once it is commenced.
higher value-added products which would lead to better realizations. The company Tie up with IKEA
has already launched newer product designs in the market and expects the
contribution from them to pick up from 4QFY18.
POKR has done a mock-up in Hyderabad for IKEA, as it wanted to display upcoming
shops.
The GST council has announced a tax rate cut on granite from 28% to 18%.
Volumes in the domestic market would be known only after IKEA gets launched.
POKR has a positive view on the business and is optimistic about new brand visibility;
a widening presence would reflect in the company’s quartz performance over the POKR is the exclusive vendor for IKEA.
medium term. POKR is working on full capacity, and improving efficiency can give good returns.
February 18, 2018 Analyst: Pranav Mehta (+91-7574885494)/Dhaval Dama (+91-8128694102) Page 4 of 14
Pokarna Ltd Absolute –LONG Relative – Overweight 20% ATR in 17 Months
100 10%
Granite revenue (Rs mn) Granite EBITDAM (%)
600 35% 0 0%
3Q14
4Q14
1Q15
2Q15
3Q15
4Q15
1Q16
2Q16
3Q16
4Q16
1Q17
2Q17
3Q17
4Q17
1Q18
2Q18
3Q18
500 30%
0 0%
3Q14
4Q14
1Q15
2Q15
3Q15
4Q15
1Q16
2Q16
3Q16
4Q16
1Q17
2Q17
3Q17
4Q17
1Q18
2Q18
3Q18
February 18, 2018 Analyst: Pranav Mehta (+91-7574885494)/Dhaval Dama (+91-8128694102) Page 5 of 14
Pokarna Ltd Absolute –LONG Relative – Overweight 20% ATR in 17 Months
Industry update In the US, quartz imports overtook granite imports during 3QCY17, with quartz
surfaces imports reaching US$ 270.2mn and granite imports US$ 262mn.
Global demand for countertops is projected to rise 2.3% annually through 2021, to
nearly 500mn square meters, according to the study Global Countertops by Material, Quartz imports continue to grow at 30%+ yoy. Additionally, the import data does not
Market and Type, by The Freedonia Group. Strong advances in developing markets reflect quartz surfaces being produced in the US by Cambria, Caesarstone and LG
such as China, India, and Brazil will account for majority of the demand, primarily Hausys America (under the Viatera® brand).
driven by kitchen market demand. Solid surface continues to be a global favorite,
with engineered stone fast tracking upward due to its style and durability. For 1HCY17, in Worked Granite (cut, one side polished as determined by the USITC’s
2016 Harmonized Tariff Schedule), Brazil remains the market leader (both volume
Kitchens remain the largest market for countertops. A separate Freedonia study and value wise), while China and India were at second and third places respectively.
forecasts that U.S. countertop demand would reach US$ 29.3bn in 2019, with As can be observed from tables below, realizations continue to see a downtrend due
engineered stone and natural stone accounting for majority of sales. to excessive competition from Brazilian players who are dumping their products in
the US markets.
Quartz is the most popular kitchen countertop material and trending up, while
granite, the second most popular countertop material, is trending down. Caesarstone Ltd. highlighted the following in its 4QCY17 concall:
Kitchen remodeling is among the most popular renovation projects in the US. On (1) There is stiff competition at the lower end of the quartz market from Chinese
average, homeowners spent US$ 19,100 on their kitchen renovation, according to a manufacturers. Customers are expecting a quick response from manufacturers
2017 Houzz & Home survey. and are not willing to wait out for products as was the case earlier, due to
availability from a lot of players,
Exhibit 3:Kitchen remodeling costs (2) With low-cost competition, a completely new market is emerging, which did not
exist before. People at the lower end of the housing market, who could not
Faucets &
Plumbing, 4% afford quartz earlier, have now started consuming quartz,
Design Fees, 4% Others, 1%
(3) Bigger manufacturers in the US, who till now used to focus only on premium
Doors & Windows, class of customers, are also thinking of establishing a presence at middle and
4% Cabinetry & lower levels via outsourcing in order to get better volumes and newer
Hardware, 29%
Walls & Ceilings, customers.
5%
Lighting, 5%
Installation, 17%
Flooring, 7%
Countertops, 10%
Appliances &
Ventilation, 14%
February 18, 2018 Analyst: Pranav Mehta (+91-7574885494)/Dhaval Dama (+91-8128694102) Page 6 of 14
Pokarna Ltd Absolute –LONG Relative – Overweight 20% ATR in 17 Months
Exhibit 4: Granite Import data for US market For 9MCY17, China exported 41.8mn sq.ft of quartz to USA, posting a 57% increase
yoy, while Spain exported 14.2mn sq.ft, an increase of 29% yoy. Value-wise, China
Volumes (MT) 9MCY16 % 9MCY17 % Oct’17 % Nov’17 % exported US$ 330mn worth of quartz (+71% yoy) in 9MCY17 while Spain US$ 140mn
Brazil 588,958 48% 526,748 46% 61,899 49% 48,927 42% (+42% yoy). India exported 3.5mn sq.ft of quartz surfaces, up 3% yoy, while value-
China 314,509 26% 293,402 25% 31,809 25% 33,017 28% wise quartz exports stood at US$ 28mn, up 10% yoy.
India 177,890 15% 188,239 16% 18,145 14% 20,285 17%
Spain 46,899 4% 58,382 5% 6,434 5% 4,999 4% Exhibit 5: Data for 9MFY17 quartz imports shows strong volume/realization growth
Italy 40,168 3% 26,015 2% 3,408 3% 4,307 4% for China and Spain
Canada 29,865 2% 37,585 3% 3,382 3% 4,958 4%
ROW 20,314 2% 22,635 2% 1,681 1% 1,061 1% Volumes
9MCY16 % 9MCY17 % Oct’17 % Nov’17 %
Total 1,218,602 100% 1,153,007 100% 126,758 100% 117,554 100% ('000 Sq. ft.)
China 26,624 43% 41,853 52% 6,337 60% 6,005 58%
Spain 10,956 18% 14,176 17% 1,734 16% 1,312 13%
Granite Imports (USD Mn) 1HCY16 % 1HCY17 % yoy growth (%)
Israel 6,582 11% 6,683 8% 594 6% 1,170 11%
Brazil 266 47% 238 46% -10% Vietnam 4,105 7% 4,230 5% - - - -
China 135 24% 123 24% -9% Canada 4,368 7% 4,681 6% 581 5% 542 5%
India 3,450 6% 3,544 4% 649 6% 602 6%
India 82 15% 85 16% 3%
Turkey 1,442 2% 1,485 2% - - 178 2%
Spain 16 3% 17 3% 9% ROW 3,989 6% 4,551 6% 731 7% 510 5%
Italy 47 8% 41 8% -15% Total 61,516 100% 81,203 100% 10,628 100% 10,320 100%
Canada 11 2% 11 2% 0%
Quartz Imports (USD Mn) 9MCY16 9MCY17 yoy growth (%)
ROW 8 1% 6 1% -21%
China 193 330 71%
Total 565 100% 521 100% -8%
Spain 99 140 42%
February 18, 2018 Analyst: Pranav Mehta (+91-7574885494)/Dhaval Dama (+91-8128694102) Page 7 of 14
Pokarna Ltd Absolute –LONG Relative – Overweight 20% ATR in 17 Months
China 7 8 9%
Spain 9 10 9%
Israel 11 11 -3%
Vietnam 11 12 9%
Canada 11 10 -14%
India 7 8 7%
Turkey 8 10 16%
ROW 14 11 -22%
February 18, 2018 Analyst: Pranav Mehta (+91-7574885494)/Dhaval Dama (+91-8128694102) Page 8 of 14
Pokarna Ltd Absolute –LONG Relative – Overweight 20% ATR in 17 Months
February 18, 2018 Analyst: Pranav Mehta (+91-7574885494)/Dhaval Dama (+91-8128694102) Page 9 of 14
Pokarna Ltd Absolute –LONG Relative – Overweight 20% ATR in 17 Months
Consolidated Financials
P&L (Rs Mn) FY17A FY18E FY19E FY20E Balance Sheet (Rs Mn) FY17A FY18E FY19E FY20E Cash Flow (Rs Mn) FY17A FY18E FY19E FY20E
Revenue 3,803 3,404 3,732 4,713 Equity Capital 62 62 62 62 PBT 890 640 768 1,094
Op. Expenditure 2,484 2,329 2,476 3,047 Reserve 1,580 1,894 2,253 2,864 Depreciation 202 204 221 271
EBITDA 1,319 1,075 1,257 1,666 Networth 1,642 1,956 2,315 2,926 Others 317 0 0 0
Depreciation 202 204 221 271 Long Term Debt 2,350 2,766 4,470 5,040 Taxes Paid 238 140 185 259
EBIT 1,117 871 1,036 1,395 Def Tax Liability 124 167 123 193 Change in WC -61 -39 -77 -249
Interest Expense 329 280 301 337 Minority Interest 0 0 0 0 Operating C/F 1,110 665 727 858
Other Income 102 50 34 36 Account Payables 279 256 274 335 Capex -311 -697 -2,080 -1,220
PBT 890 640 768 1,094 Other Curr Liabi 751 681 746 943 Change in Invest 0 0 0 0
Tax 192 140 185 259 Total Liabilities & Equity 5,146 5,825 7,928 9,437 Others 9 0 0 0
PAT bef. MI & Assoc. 697 500 583 835 Net Fixed Assets 2,670 2,610 2,469 5,921 Investing C/F -302 -697 -2,080 -1,220
Minority Interest 0 0 0 0 Capital WIP 28 503 2,000 0 Change in Debt -262 416 1,703 570
Profit from Assoc. 0 0 0 0 Others 439 517 1,020 517 Change in Equity 0 0 0 0
Recurring PAT 697 500 583 835 Inventory 976 877 951 1,201 Others -404 -143 -267 -154
Extraordinaires 0 0 0 0 Account Receivables 665 606 665 839 Financing C/F -666 273 1,436 416
Reported PAT 697 500 583 835 Other Current Assets 93 197 224 306 Net change in cash 142 241 83 54
FDEPS (Rs) 22.5 16.1 18.8 26.9 Cash 275 516 599 653 RoE (%) 53 % 28 % 27 % 32 %
DPS (Rs) 3.0 5.0 6.0 6.0 Total Assets 5,146 5,825 7,928 9,437 RoIC (%) 25 % 16 % 14 % 14 %
CEPS (Rs) 29.0 22.7 25.9 35.7 Non-cash Working Capital 704 743 820 1,068 Core RoIC (%) 23 % 16 % 14 % 15 %
FCFPS (Rs) 34.4 6.0 -36.3 -3.4 Cash Conv Cycle 67.6 79.7 80.2 82.7 Div Payout (%) 2% 37 % 38 % 27 %
BVPS (Rs) 53.0 63.1 74.7 94.4 WC Turnover 5.4 4.6 4.6 4.4 P/E 9.4 13.1 11.3 7.9
EBITDAM (%) 35 % 32 % 34 % 35 % FA Turnover 1.4 1.3 1.5 0.8 P/B 4.0 3.4 2.8 2.2
PATM (%) 18 % 15 % 16 % 18 % Net D/E 1.3 1.2 1.7 1.5 P/FCFF 6.2 35.1 -5.8 -62.5
Tax Rate (%) 22 % 22 % 24 % 24 % Revenue/Capital Employed 1.0 0.8 0.6 0.6 EV/EBITDA 6.7 8.4 8.4 6.7
Sales Growth (%) -5 % -10 % 10 % 26 % Capital Employed/Equity 3.0 2.5 2.8 2.9 EV/Sales 2.3 2.6 2.8 2.4
FDEPS Growth (%) 1% -28 % 16 % 43 % Dividend Yield (%) 1.4 % 2.4 % 2.8 % 2.8 %
TTM P/E vs. 2 yr forward EPS growth TTM EV/EBITDA vs. 2 yr forward EBITDA growth TTM P/B vs. 2 yr forward RoE
600 100%
500
16x
15000 80% 8x 550 90%
450 EPS Growth 320% EBITDA Growth 7x
500 RoE 80%
400 280% 14x 12000 60% 7x 450
350 240% 400 70% 6x
9000 40% 6x
300 10x 350 60%
200% 5x
250 5x 300 50%
160% 6000 20% 250
200 8x 40% 4x
120% 3x 200 30%
150 3000 0% 150
80% 2x
100 6x 100 20%
50 40% 0 -20% 50 10%
- 0%
Mar/16
Jun/14
Mar/15
Jun/15
Jun/16
Mar/17
Jun/17
Mar/18
Jun/18
Mar/19
Jun/19
Sep/14
Sep/15
Sep/16
Sep/17
Sep/18
Dec/14
Dec/15
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Dec/17
Dec/18
- 0%
Sep/14
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Sep/16
Mar/18
Sep/18
Jun/14
Mar/15
Jun/15
Mar/16
Jun/16
Mar/17
Jun/17
Sep/17
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Dec/14
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Sep/14
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Dec/18
February 18, 2018 Analyst: Pranav Mehta (+91-7574885494)/Dhaval Dama (+91-8128694102) Page 10 of 14
Pokarna Ltd Absolute –LONG Relative – Overweight 20% ATR in 17 Months
February 18, 2018 Analyst: Pranav Mehta (+91-7574885494)/Dhaval Dama (+91-8128694102) Page 11 of 14
Pokarna Ltd Absolute –LONG Relative – Overweight 20% ATR in 17 Months
Equirus Securities
Research Analysts Sector/Industry Email Equity Sales E-mail
Abhishek Shindadkar IT Services abhishek.shindadkar@equirus.com 91-22-43320643 Vishad Turakhia vishad.turakhia@equirus.com 91-22-43320633
Ashutosh Tiwari Auto, Metals & Mining ashutosh@equirus.com 91-79-61909517 Subham Sinha subham.sinha@equirus.com 91-22-43320631
Depesh Kashyap Mid-Caps depesh.kashyap@equirus.com 91-79-61909528 Sweta Sheth sweta.sheth@equirus.com 91-22-43320634
Devam Modi Power & Infrastructure devam@equirus.com 91-79-61909516 Viral Desai viral.desai@equirus.com 91-22-43320635
Dhaval Dama FMCG, Mid-Caps dhaval.dama@equirus.com 91-79-61909518 Rushabh Shah rushabh.shah@equirus.com 91-22-43320632
Manoj Gori Consumer Durables manoj.gori@equirus.com 91-79-61909523 Dealing Room E-mail
Maulik Patel Oil and Gas maulik@equirus.com 91-79-61909519 Ashish Shah ashishshah@equirus.com 91-22-43320662
Praful Bohra Pharmaceuticals praful.bohra@equirus.com 91-79-61909532 Ilesh Savla ilesh.savla@equirus.com 91-22-43320666
Rohan Mandora Banking & Financial Services rohan.mandora@equirus.com 91-79-61909529 Manoj Kejriwal manoj.kejriwal@equirus.com 91-22-43320663
Associates E-mail Dharmesh Mehta dharmesh.mehta@equirus.com 91-22-43320661
Ankit Choudhary ankit.choudhary@equirus.com 91-79-61909533 Sandip Amrutiya sandipamrutiya@equirus.com 91-22-43320660
Bharat Celly bharat.celly@equirus.com 91-79-61909524 Compliance Officer E-mail
Harshit Patel harshit.patel@equirus.com 91-79-61909522 Jay Soni jay.soni@equirus.com 91-79-61909561
Meet Chande meet.chande@equirus.com 91-79-61909513 Corporate Communications E-mail
Nishant Bagrecha nishant.bagrecha@equirus.com 91-79-61909526 Mahdokht Bharda mahdokht.bharda@equirus.com 91-22-43320647
Parva Soni parva.soni@equirus.com 91-79-61909521
Pranav Mehta pranav.mehta@equirus.com 91-79-61909514
Ronak Soni Ronak.soni@equirus.com 91-79-61909525
Samkit Shah samkit.shah@equirus.com 91-79-61909520
Shreepal Doshi shreepal.doshi@equirus.com 91-79-61909541
Varun Baxi varun.baxi@equirus.com 91-79-61909527
Vikas Jain vikas.jain@equirus.com 91-79-61909531
Rating & Coverage Definitions: Registered Office:
Absolute Rating
• LONG : Over the investment horizon, ATR >= Ke for companies with Free Float market cap > Rs 5 billion and ATR >= Equirus Securities Private Limited
20% for rest of the companies Unit No. 1201, 12th Floor, C Wing, Marathon Futurex,
• ADD: ATR >= 5% but less than Ke over investment horizon
• REDUCE: ATR >= negative 10% but <5% over investment horizon N M Joshi Marg, Lower Parel,
• SHORT: ATR < negative 10% over investment horizon Mumbai-400013.
Relative Rating
• OVERWEIGHT: Likely to outperform the benchmark by at least 5% over investment horizon Tel. No: +91 – (0)22 – 4332 0600
• BENCHMARK: likely to perform in line with the benchmark Fax No: +91- (0)22 – 4332 0601
• UNDERWEIGHT: likely to under-perform the benchmark by at least 5% over investment horizon
Investment Horizon
Investment Horizon is set at a minimum 3 months to maximum 18 months with target date falling on last day of a Corporate Office:
calendar quarter.
Lite vs. Regular Coverage vs. Spot Coverage 3rd floor, House No. 9,
We aim to keep our rating and estimates updated at least once a quarter for Regular Coverage stocks. Generally, we Magnet Corporate Park, Near Zydus Hospital, B/H Intas Sola Bridge,
would have access to the company and we would maintain detailed financial model for Regular coverage companies.
We intend to publish updates on Lite coverage stocks only an opportunistic basis and subject to our ability to contact S.G. Highway Ahmedabad-380054
the management. Our rating and estimates for Lite coverage stocks may not be current. Spot coverage is meant for Gujarat
one-off coverage of a specific company and in such cases, earnings forecast and target price are optional. Spot
coverage is meant to stimulate discussion rather than provide a research opinion. Tel. No: +91 (0)79 - 6190 9550
Fax No: +91 (0)79 – 6190 9560
February 18, 2018 Analyst: Pranav Mehta (+91-7574885494)/Dhaval Dama (+91-8128694102) Page 12 of 14
Pokarna Ltd Absolute –LONG Relative – Overweight 20% ATR in 17 Months
© 2018 Equirus Securities Private Limited. All rights reserved. For Private Circulation only. This report or any portion hereof may not
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Analyst Certification
I, Pranav Mehta, author to this report, hereby certify that all of the views expressed in this report accurately reflect my personal views about the subject company or companies and its or their securities. I also
certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.
Disclosures
Equirus Securities Private Limited (ESPL) having Corporate Identification Number U65993MH2007PTC176044 is registered in India with Securities and Exchange Board of India (SEBI) as a trading member on the
Capital Market (Reg. No. INB231301731), Futures & Options Segment (Reg. No.INF231301731) of the National Stock Exchange of India Ltd. (NSE) and on Cash Segment (Reg. No.INB011301737) of Bombay Stock
Exchange Limited (BSE).ESPL is also registered with SEBI as Research Analyst under SEBI (Research Analyst) Regulations, 2014 (Reg. No. INH000001154) and as Portfolio Manager under SEBI (Portfolio Managers
Regulations, 1993 (Reg. No. INP000005216). There are no disciplinary actions taken by any regulatory authority against ESPL. ESPL is a subsidiary of Equirus Capital Pvt. Ltd. (ECPL) which is registered with SEBI as
Category I Merchant Banker and provides investment banking services including but not limited to merchant banking services, private equity, mergers &acquisitionsandstructuredfinance.
As ESPL and its associates are engaged in various financial services business, it might have: - (a) received compensation (except in connection with the preparation of this report) from the subject company for
investment banking or merchant banking or brokerage services in the past twelve months;(b) managed or co-managed public offering of securities for the subject company in the past twelve months; or (c) have
received a mandate from the subject company; or (d) might have other financial, business or other interests in entities including the subject company (ies) mentioned in this Report. ESPL & its associates, their
directors and employees may from time to time have positions or options in the company and buy or sell the securities of the company (ies) mentioned herein. ESPL and its associates collectively do not own (in
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February 18, 2018 Analyst: Pranav Mehta (+91-7574885494)/Dhaval Dama (+91-8128694102) Page 13 of 14
Pokarna Ltd Absolute –LONG Relative – Overweight 20% ATR in 17 Months
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“three years” period in the price chart).
Disclosure of Interest statement for the subject Company Yes/No If Yes, nature of such interest
Research Analyst’ or Relatives’ financial interest No
Research Analyst’ or Relatives’ actual/beneficial ownership of 1% or more No
Research Analyst’ or Relatives’ material conflict of interest No
February 18, 2018 Analyst: Pranav Mehta (+91-7574885494)/Dhaval Dama (+91-8128694102) Page 14 of 14