Ambit Capital and / or its affiliates do and seek to do business including investment banking with companies covered in its research reports. As a result, investors should be aware that Ambit Capital may have a conflict of interest that could affect the objectivity of this report. Investors should not consider this report as the only factor in making their investment decision.
Please refer to the Disclaimers at the end of this Report.
AMBIT INSIGHTS 3 January 2017
DAILY
Thematic
Consumer
Surviving the ‘perfect storm’
(Click here for detailed note)
Updates
Coal India (BUY)
E-auction realisations recover to 3QFY16 levels
Derivatives
Alpha This Week
An alternative take on the markets
(Click here for detailed note)
Analyst Notes: Light Electricals: Finolex and Havells to report strong 3Q results Bhargav Buddhadev, +91 22 3043 3252
Finolex and Havells should report a strong 3QFY17 relative to their electricals peers led by the cables & wires business (84%/41 % of revenue for Finolex/Havells vs 31%/NIL/NIL for V-Guard/Crompton/Bajaj). Industry volumes for cables & wires have grown by 10-15% in 3QFY17 due to strong demand from the construction sector, especially real estate. Channel participants told us that developers have expedited execution of near-completion projects anticipating a decline in real estate prices (due to demonetisation disruption) and also to avoid any hassles caused by RERA (Real estate Regulation & Development Act) which may become effective in various states in FY18. Also, electricals players have announced ~10% hike in cables & wires prices due to a strong 16% increase in copper prices since 1 November (up 17% YoY in 3QFY17). Havells is our top pick as it would be a major beneficiary of the shift in market share from unorganised to organised (now accelerated by the demonetisation) given its strong relationships with the channel. Source: Ambit Capital research
Please refer to our website for complete coverage universe
http://research.ambitcapital.com
Ambit Capital and / or its affiliates do and seek to do business including investment banking with companies covered in its research reports. As a result, investors should be aware that Ambit Capital may have a conflict of interest that could affect the objectivity of this report. Investors should not consider this report as the only factor in making their investment decision.
Surviving the ‘perfect storm’
FMCG sector valuations haven’t priced in the demonetisation/GST disruption. Sales will be hit by: 1) near-term liquidity constraints, 2) stalling of wholesale channel due to cash crunch, 3) weakness in rural demand given job losses and farmer distress, 4) deferment of discretionary spend. Margins are at their peak and face risks from: 1) providing trade/vendors higher margins to offset cost of tax compliance; 2) cost of expanding direct reach; 3) unfavorable crude and INR trends; 4) limited pricing power due to weak demand. We expect earnings growth of 3%/16% vs consensus’ 7%/13% for FY17/18; past earnings multiple averages may be breached on the downside as earnings growth decelerates. HUL and ITC are our top BUYs, given: 1) deeper direct reach; 2) leading brand/product portfolios; 3) focus on staples that will help navigate demand slump, overcome wholesale disruption, and lower impact on margins. Top SELLs are GCPL and GSK.
Disruption in distribution channels to have a longer-term impact We expect near-term demand hit of 10-20% due to: 1) cash crunch and 2) stalling of channel below distributor level. However, recovery should begin by 1QFY18 but will be weak as: 1) impact on cash wealth will hurt discretionary spending (by 5-10%) and 2) job losses in the informal/construction sectors will negate Government stimulus and hurt rural demand (by 3-5%). Distribution will be disrupted until 2HFY18 due to: 1) delay in revival of wholesalers, 2) lower re-stocking by wholesalers due to capital constraints, 3) initial chaos during GST rollout. Demand creation will also be hit as companies postpone product launches and cut A&P spend. Multiple pressures on peak margins indicate sharp dip ahead Risks abound for sector margins, which spiked by 230bps in the past 5 years and are at peak levels: 1) 30-50bps hit from higher supply chain costs as companies compensate trade/vendors for higher tax compliance; 2) 10-80bps hit from rising crude and depreciating INR. Assuming the companies pass on costs to consumers is flawed in the weak demand scenario. Fall in prices of agri-commodities and cut in A&P spend are not sustainable margin drivers. Who are the winners? Just HUL and ITC for now Our framework to identify winners is: 1) deeper direct reach, 2) wide portfolio of market-leading brands, 3) sophisticated IT systems and processes, 4) skew towards staples and low ticket size. These will help companies navigate the demand slump by beating the wholesale disruption and enhancing consumer connect. Wider product portfolio and leading brands will help lower the hit to margins as also gain share as the wholesale channel favours such companies during capital constraints. HUL and ITC fit the bill; GCPL is the weakest. What will make us positive on the sector? Over the next 1-2 years, the perfect storm of weak demand, disrupted distribution, margin declines and peak valuations raise the risk of a material correction in price/valuations. The attributes of strong growth ramp, healthy financials and strong brands do remain intact for the sector. However, we would turn positive only when: 1) distribution revival and its impact are behind, 2) volume growth revives, 3) visibility on interplay of distress from job losses and support from Government stimulus improves, 4) margins stabilise at a lower level and/or 5) valuations shed their peak.
THEMATIC January 03, 2017
ConsumerNEGATIVE
Key Recommendations HUL BUY
Target Price: 930 Upside 12%
Nestle SELL
Target Price: 5,800 Downside: 4%
GSK Consumer SELL
Target Price: 4,950 Downside: 1%
Colgate SELL
Target Price: 825 Downside: 9%
Godrej Consumer SELL
Target Price: 1,025 Downside: 32%
Dabur SELL
Target Price: 240 Downside: 14%
Marico SELL
Target Price: 240 Downside: 8%
Britannia SELL
Target Price: 2,600 Downside: 10%
ITC BUY
Target Price: 275 Upside: 14%
Asian Paints SELL
Target Price: 800 Downside: 10%
Berger Paints SELL
Target Price: 180 Downside: 15%
Coverage Map
Source: Ambit Capital Research, Note: Size of the bubble indicates sales (̀ bn) which highlights the difference in scale of HUL and ITC over others
HUL
Dabur
GCPL
Marico
Britannia
Nestle
GSK Cons
ColgateITC
Berger Paints
Asian Paints
2%
4%
6%
8%
10%
12%
14%
16%
18%
20 30 40 50
EPS
CAG
R (F
Y16-1
9E)
CMP FY18 P/E
Research Analysts
Anuj Bansal +91 22 3043 3122
Ritesh Vaidya, CFA +91 22 3043 3246
Dhiraj Mistry, CFA
+91 22 3043 3264
AMBIT INSIGHTS
Ambit Capital Pvt Ltd 3 January 2017
Coal India E-auction realisations recover to 3QFY16 levels Coal India reported production/offtake growth of 4%/7% after posting similar growth rates in Nov-16 and declining volumes in the three prior months (Aug-Oct). The November-December pick-up was driven by a sudden increase in power generation in the past two months. Further, CIL’s regular e-auction realisations significantly improved to 1,790/t in Oct-Nov from an average of Rs1,500/t in 2QFY17 and are now in line with 3QFY16 levels. In 3QFY17, offtake grew by 3.5% YoY vs a decline of 5% in 2QFY17; e-auction realisations are likely up ~15% QoQ. Whilst the pick-up in volumes and realisations has begun (the thesis behind our BUY stance), the key monitorable over the next 1-2 months is whether generation growth is structural or a just a bump caused by improved working capital of SEBs post the demonetisation. Valuations of 12.6x FY18E P/E (in line with historical average) seem inexpensive.
Production and offtake grew by 5-6% YoY in Dec-16
Coal India’s production/offtake grew by 4%/7% YoY in Dec 2016, maintaining the pick-up in Nov 2016 (after 3 months of decline seen in Aug-Oct16). Volume growth was driven by coal-based power generation growth of 8% in December (after 4 months of largely flat power generation trends over Jul-Oct 16). Our interaction with industry participants suggests that the sharp increase in power demand could be driven by improved working capital of SEBs as cash collections increased significantly after the demonetisation was announced on 8 Nov 2016.
Six of CIL’s seven key subsidiaries reported offtake growth; ECL, CCL and NCL reported the highest offtake growth among subsidiaries, at 20%, 14% and 13%, respectively. We highlight that offtake of 51.5mt was lower than production of 54mt, which is typical of 2H (offtake in 1H was higher than production by ~18mt).
Exhibit 1: Subsidiary-wise production and offtake (mt)
Subsidiary Dec-16 Dec-15 YoY growth (%) 9MFY17 9MFY16 YoY growth (%)
Production
ECL 4.7 4.3 7.6% 28.6 26.1 9.5%
BCCL 3.3 3.1 6.9% 25.8 25.4 1.5%
CCL 6.7 5.9 13.9% 40.9 41.5 -1.4%
NCL 8.6 7.6 13.4% 59.2 56.5 4.9%
WCL 4.8 4.5 7.2% 26.8 30.3 -11.7%
SECL 13.7 12.9 6.7% 97.2 96.2 1.1%
MCL 12.4 13.9 -10.5% 98.9 97.4 1.5%
CIL total 54.2 52.1 4.1% 377.5 373.4 1.1%
Offtake
ECL 4.3 3.6 20.3% 31.7 27.0 17.5%
BCCL 3.3 3.0 9.9% 25.5 26.6 -4.2%
CCL 6.0 5.2 13.9% 42.1 44.3 -5.0%
NCL 8.2 7.3 12.8% 60.3 57.2 5.5%
WCL 4.0 3.9 4.1% 27.0 31.5 -14.2%
SECL 13.2 12.4 6.4% 98.9 100.9 -1.9%
MCL 12.4 12.8 -3.0% 105.4 101.6 3.8%
CIL total 51.5 48.2 6.9% 391.5 389.5 0.5%
Source: Company, Ambit Capital research
BUY
Quick Insight Analysis Meeting Note News Impact
Coal India BUY Bloomberg Code: COAL IN
CMP (Rs): 300
TP (Rs): 360
Mcap (` bn/US$ bn): 1,863/27.4
3M ADV (` mn/US$ mn): 1,075/16
Stock Performance (%)
1M 3M 12M YTD
Absolute (2) (7) (10) 0
Rel. to Sensex (3) (2) (12) 0
Source: Bloomberg, Ambit Capital research
Ambit Estimates (Rs mn)
FY16 FY17E FY18E
Revenue 780,101 786,764 884,004
EBITDA 181,972 158,170 196,495
EPS (Rs) 22.3 19.1 24.3
Source: Company, Ambit Capital research
Research Analyst
Parita Ashar, CFA [email protected] Tel: +91 22 3043 3223
AMBIT INSIGHTS
Ambit Capital Pvt Ltd 3 January 2017
Our analysis of CIL’s e-auction sales for Nov 2016 suggests the following:
Average realisation and premium of low-grade coal (G10 and weaker) improves: CIL offered low-grade coal of 5.4mt in Nov 2016, of which 43% was sold. Average e-auction realisation improved MoM to Rs1,278/t with the premium at 35% vs 31% in Oct-16 and 21-23% for the last 4 months.
Exhibit 2: Low-grade e-auction realisations and premium are improving
Source: Mjunction, Ambit Capital research
Average realisation and premium of high-grade coal (G9 and better) improve: CIL offered 1.9mt of high-grade coal in Nov 2016, of which 1mt was sold (51% of volumes offered were sold). High grade e-auction realisation improved to Rs2,996/t (31% premium to notified price vs 18% seen in Oct-16 and 11-14% seen in May-Aug16.
Exhibit 3: High-grade e-auction realisations improve MoM
Source: Mjunction, Ambit Capital research
Blended e-auction realisation remains flat MoM (higher premiums offset by weaker grade mmix): High-grade as well as low-grade realisations increased MoM, driving an increase in the average premium to notified prices to 33% from 17-24% over the last 5 months. However, this was offset by weaker grade mix (share of high grade coal was 30% vs 36% in Oct-16), resulting in average e-auction realisations remaining flat at Rs1,791/t.
0.4
0.5
0.6
1.3
4.4
4.5
4.5
4.0
4.2
3.4
3.6
5.9
2.4
4.0
4.1
3.7
3.6
4.4
5.4
5.1
5.4
5.2
4.5
5.9
5.4
7.0
5.9
5.4
0.4
0.4
0.6
1.3
4.0
3.9
4.1
3.7
3.7
2.9
3.0
4.1
1.5
3.2
3.8
3.3
3.2
3.7
3.1
4.5
4.4
2.8
2.1
3.2
2.8
2.8
3.7
2.3
2,02
4 2,
210
2,53
5 2,
290
1,37
6 1,
524
1,61
5 1,
521
1,38
1 1,
442
1,43
1 1,
236
1,21
7 1,
467
1,45
6 1,
267
1,18
8 1,
190
1,22
0 1,
181
1,07
0 1,
105
1,16
8 1,
142
1,11
0 1,
105
1,20
8 1,
278
-
500
1,000
1,500
2,000
2,500
3,000
-
1
2 3
4 5
6
7 8
Aug
-14
Oct
-14
Dec
-14
Feb-
15
Apr
-15
Jun-
15
Aug
-15
Oct
-15
Dec
-15
Feb-
16
Apr
-16
Jun-
16
Aug
-16
Oct
-16
Volumes offered (mt) Volumes sold (mt) Average realisation - LHS
0.7
1.1
1.2
1.9
3.7
3.4
3.0
3.0
3.4
2.4
2.7
2.2
4.5
7.4
3.0
4.4
4.8
5.2
5.3
7.2
5.9
3.3
4.2
4.6
3.1
4.3
5.6
1.9
0.6
0.9
1.0
1.6
2.6
2.4
2.2
2.3
2.4
1.6
1.7
1.4
1.6
1.2
1.6
1.7
1.6
1.7
1.9
2.0
1.5
0.9
1.0
1.0
0.9
1.4
2.1
1.0
3,96
4 3,
831
4,18
5 3,
750
3,16
2 3,
320
3,60
3 3,
366
3,00
3 2,
671
2,66
5 2,
726
2,61
1 2,
690
2,86
2 2,
677
2,74
4 2,
861
2,67
2 2,
170
2,57
0 2,
502
2,55
5 2,
551
2,38
0 2,
598
2,82
2 2,
996
- 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500
-
1
2
3
4
5
6
7
8
Aug
-14
Sep-
14O
ct-1
4N
ov-1
4D
ec-1
4Ja
n-15
Feb-
15
Mar
-15
Apr
-15
May
-15
Jun-
15Ju
l-1
5A
ug-1
5Se
p-15
Oct
-15
Nov
-15
Dec
-15
Jan-
16Fe
b-1
6M
ar-1
6A
pr-1
6M
ay-1
6Ju
n-16
Jul-
16
Aug
-16
Sep-
16O
ct-1
6N
ov-1
6
Volumes offered (mt) Volumes sold (mt) Average realisation - LHS
AMBIT INSIGHTS
Ambit Capital Pvt Ltd 3 January 2017
Exhibit 4: Blended e-auction realisation has been stable MoM
Source: Mjunction, Ambit Capital research
Where do we go from here?
CIL’s stock price has underperformed the Sensex in the past year due to rising investor focus on near-term concerns like weak power demand growth and declining e-auction prices. In line with our expectations highlighted in our note dated Oct 20, CIL’s volumes as well as e-auction realisations have recovered from recent lows given: (a) power demand had been weak but has now recovered (down 1% YoY in 2QFY17 but up 6-9% in last two months); (b) coal stocks are at a 15-day low; and (c) e-auction realisations were closer to floor prices but have now recovered. Whilst the pick-up in volumes and realisations has begun (and is the thesis behind our BUY stance), the key thing to watch over the next 1-2 months is whether the pick-up in power generation is structural or just temporary due to improved working capital of SEBs post-demonetisation. Valuations at 12.6x FY18 P/E (in line with historical average) don’t appear expensive and, hence, we maintain our BUY stance. Key risks: Deteriorating grade mix (as seen in declining FSA realisations for the last three quarters) and weak power demand.
1.1
1.7
1.8
3.2
8.1
7.9
7.5
7.0
7.6
5.8
6.2
8.1
6.9
11.4
7.1
8.1
8.3
9.6
10.7
12.3
11.3
8.4
8.7
10.5
8.5
11.3
11.5
7.3
1.0
1.4
1.6
2.9
6.6
6.3
6.3
6.0
6.1
4.5
4.7
5.5
3.2
4.4
5.4
5.0
4.8
5.4
5.0
6.5
5.9
3.8
3.1
4.2
3.8
4.2
5.9
3.3
3,26
7 3,
330
3,54
9 3,
090
2,07
5 2,
216
2,30
5 2,
220
2,01
1 1,
879
1,87
9 1,
605
1,93
5 1,
803
1,88
2 1,
743
1,71
1 1,
723
1,77
3 1,
479
1,44
2 1,
447
1,61
1 1,
485
1,42
8 1,
611
1,79
2 1,
791
- 500
1,000 1,500
2,000 2,500 3,000
3,500 4,000
0
2
4
6
8
10
12
14
Aug
-14
Sep-
14O
ct-1
4N
ov-1
4D
ec-1
4Ja
n-15
Feb-
15
Mar
-15
Apr
-15
May
-15
Jun-
15Ju
l-1
5A
ug-1
5Se
p-15
Oct
-15
Nov
-15
Dec
-15
Jan-
16Fe
b-1
6M
ar-1
6A
pr-1
6M
ay-1
6Ju
n-16
Jul-
16
Aug
-16
Sep-
16O
ct-1
6N
ov-1
6
Volumes offered (mt) Volumes sold (mt) Average realisation - LHS
AMBIT INSIGHTS
Ambit Capital Pvt Ltd 3 January 2017
Balance sheet (consolidated) Year to March (Rs mn) FY15 FY16 FY17E FY18E
Net worth 403,531 338,976 380,487 478,078
Total debt 4,019 11,920 11,068 11,068
Total liabilities & provisions 415,639 446,053 462,886 484,103
Total liabilities 823,189 796,949 854,442 973,249
Total fixed assets 212,744 242,549 277,145 312,755
Investments 28,134 29,019 29,019 29,019
Net current assets (excl. cash) 5,377 17,275 -847 -9,773
Cash & bank balances 530,925 383,128 422,743 514,868
Total assets 823,189 796,949 854,442 973,249
Source: Company, Ambit Capital research
Income statement (consolidated)
Year to March (Rs mn) FY15 FY16 FY17E FY18E
Sales 741,201 780,101 786,764 884,004
EBITDA 173,354 181,972 158,170 196,495
Total D&A 23,198 25,468 28,404 30,540
EBIT 150,156 156,504 129,766 165,954
Other income 65,706 57,062 54,338 58,067
PBT 215,789 212,512 182,245 222,162
Taxes 78,573 72,084 63,656 71,092
PAT 137,266 141,069 118,589 151,070
Source: Company, Ambit Capital research Cash flow statement (consolidated)
Year to March (Rs mn) FY15 FY16 FY17E FY18E
PBT 215,789 212,512 182,245 222,162
D&A 23,198 25,468 28,404 30,540
Others (26,987) (28,699) (35,646) (34,991)
CFO per WC changes 212,000 209,281 175,003 217,711
Changes in WC (1,166) (87,123) 18,121 8,926
Taxes paid (78,573) (72,084) (63,656) (71,092)
Net CFO 132,261 50,075 129,469 155,546
Capex (44,940) (55,274) (63,000) (66,150)
Interest and others 75,321 56,177 54,338 58,067
CFI 30,381 904 (8,662) (8,083)
Dividends (154,283) (204,221) (41,980) (53,479)
CFF (155,612) (198,777) (81,192) (55,338)
Net change in C&CE 7,030 (147,798) 39,615 92,125
Source: Company, Ambit Capital research Ratio analysis / Valuation parameters (consolidated)
Year to March FY15 FY16 FY17E FY18E
EBITDA margin (post OBR & provisions) % 23.4% 23.3% 20.1% 21.6%
Net profit margin (%) 18.5% 18.1% 15.1% 16.6%
RoE (%) 33.2% 38.0% 33.0% 35.2%
P/E (x) 14.1 13.7 16.0 12.6
P/B (x) 4.8 5.7 5.0 4.0
Dividend yield 6.8% 9.0% 1.9% 2.4%
EV/ EBITDA (x) 8.1 8.5 9.7 7.8
Source: Company, Ambit Capital research
Ambit Capital and / or its affiliates do and seek to do business including investment banking with companies covered in its research reports. As a result, investors should be aware that Ambit Capital may have a conflict of interest that could affect the objectivity of this report. Investors should not consider this report as the only factor in making their investment decision.
Alpha This Week
03 January, 2017
Derivatives
Securities featured in this note
Company Near Term
Medium term
Nifty <-> ()
ACC () ()
ITC () ()
() denotes positive view, () denotes negative view, <-> denotes no major view/ consolidation. Research Analyst
Prashant Mittal, CFA +91 22 3043 3218 [email protected]
An alternative take on the markets 17th Sept 2013 After a brief scare of breaking the support levels near 7927 early last week, the Nifty has bounced back sharply. Going forward, the index is likely to find resistance both from the intermediate highs made since Nov’16 and the trendline that has stalled the up moves of the index since Sep’16 (near levels of 8300). Further, as we’ve been highlighting, a trend reversal will only be confirmed once the momentum indicators move from a bearish to bullish pattern (see chart). Notably, a decisive break below 7927 (Jun’16 lows) is likely to take the index lower towards levels near 7400. On stocks, we continue with our longs on ITC and ACC.
Index: After a brief scare of breaking the support levels near 7927 early last week, the Nifty has bounced back sharply. Going forward, the index is likely to find resistance both from the intermediate highs made since Nov’16 and the trendline that has stalled the up move of the index since Sep’16 (near levels of 8300). Further, as we’ve been highlighting, a trend reversal will only be confirmed once the momentum indicators move from a bearish to bullish pattern (see chart). Notably, a decisive break below 7927 (Jun’16 lows) is likely to take index lower towards levels near 7400.
Stocks: We continue with our longs on ITC and ACC.
Nifty – Risks remain on the downside
Source: Metastock
Bank Nifty: The Bank Nifty has been trending downwards in a channel pattern since Sep’16. While intermittent pullbacks in the index are not ruled out given the channel support, the overall downward trend of the channel combined with bearish pattern on the RSI Index suggest the index is likely to remain weak going forward.
USD/INR: Rupee as recovered since the recent scare of breaching previous (intraday) highs near 68.9/$. However, going forward, with the dollar recovering, pressure on rupee cannot be ruled out. With the dollar index likely to touch levels close to 108, rupee is likely to re-test the highs of 68.9/$.
Institutional flows: FIIs were SELLers of Indian equities last week and sold equities worth Rs36bn. After staying buyers from March 2016 to September 2016 and buying Indian equities worth Rs522bn, FIIs have turned SELLers since October 2016 and have sold equities worth Rs371bn – with Nov’16 accounting for highest outflows since Jan’08. DIIs on the other hand have bought equities worth Rs353bn since October 2016. Overall, DIIs as a class are currently buyers of Indian equities worth Rs961bn since the General Elections in May 2014.
AMBIT INSIGHTS
Ambit Capital Pvt Ltd 3 January 2017
Institutional Equities Team Saurabh Mukherjea, CFA CEO, Institutional Equities (022) 30433174 [email protected] Pramod Gubbi, CFA Head of Equities (022) 30433124 [email protected]
Research Analysts
Name Industry Sectors Desk-Phone E-mail
Nitin Bhasin - Head of Research E&C / Infra / Cement / Industrials (022) 30433241 [email protected] Aadesh Mehta, CFA Banking / Financial Services (022) 30433239 [email protected] Abhishek Ranganathan, CFA Retail (022) 30433085 [email protected] Anuj Bansal Mid-caps (022) 30433122 [email protected] Aditi Singh Economy / Strategy (022) 30433284 [email protected] Ashvin Shetty, CFA Automobile (022) 30433285 [email protected] Bhargav Buddhadev Power Utilities / Capital Goods (022) 30433252 [email protected] Deepesh Agarwal, CFA Power Utilities / Capital Goods (022) 30433275 [email protected] Dhiraj Mistry, CFA Consumer (022) 30433264 [email protected] Gaurav Khandelwal, CFA Automobile (022) 30433132 [email protected] Girisha Saraf Mid-caps / Small-caps (022) 30433211 [email protected] Karan Khanna, CFA Strategy (022) 30433251 [email protected] Mayank Porwal Retail (022) 30433214 [email protected] Pankaj Agarwal, CFA Banking / Financial Services (022) 30433206 [email protected] Paresh Dave, CFA Healthcare (022) 30433212 [email protected] Parita Ashar, CFA Metals & Mining / Aviation (022) 30433223 [email protected] Prashant Mittal, CFA Strategy / Derivatives (022) 30433218 [email protected] Rahil Shah Banking / Financial Services (022) 30433217 [email protected] Ravi Singh Banking / Financial Services (022) 30433181 [email protected] Ritesh Gupta, CFA Oil & Gas / Chemicals / Agri Inputs (022) 30433242 [email protected] Ritesh Vaidya, CFA Consumer (022) 30433246 [email protected] Ritika Mankar Mukherjee, CFA Economy / Strategy (022) 30433175 [email protected] Ritu Modi Automobile (022) 30433292 [email protected] Sagar Rastogi Technology (022) 30433291 [email protected] Sudheer Guntupalli Technology (022) 30433203 [email protected] Sumit Shekhar Economy / Strategy (022) 30433229 [email protected] Utsav Mehta, CFA E&C / Industrials (022) 30433209 [email protected] Vivekanand Subbaraman, CFA Media (022) 30433261 [email protected]
Sales
Name Regions Desk-Phone E-mail
Sarojini Ramachandran - Head of Sales UK +44 (0) 20 7886 2740 [email protected] Dharmen Shah India / Asia (022) 30433289 [email protected] Dipti Mehta India (022) 30433053 [email protected] Krishnan V India / Asia (022) 30433295 [email protected] Nityam Shah, CFA Europe (022) 30433259 [email protected] Punitraj Mehra, CFA India / Asia (022) 30433198 [email protected] Shaleen Silori India (022) 30433256 [email protected]
Singapore
Praveena Pattabiraman Singapore +65 6536 0481 [email protected] Shashank Abhisheik Singapore +65 6536 1935 [email protected]
USA / Canada
Ravilochan Pola – CEO Americas +1(646) 793 6001 [email protected] Hitakshi Mehra Americas +1(646) 793 6002 [email protected] Achint Bhagat, CFA Americas +1(646) 793 6752 [email protected]
Production
Sajid Merchant Production (022) 30433247 [email protected] Sharoz G Hussain Production (022) 30433183 [email protected] Jestin George Editor (022) 30433272 [email protected] Richard Mugutmal Editor (022) 30433273 [email protected] Nikhil Pillai Database (022) 30433265 [email protected]
AMBIT INSIGHTS
Ambit Capital Pvt Ltd 3 January 2017
Hindustan Unilever Ltd (HUVR IN, BUY)
Source: Bloomberg, Ambit Capital research
Asian Paints Ltd (APNT IN, SELL)
Source: Bloomberg, Ambit Capital research
Nestle India Ltd (NEST IN, SELL)
Source: Bloomberg, Ambit Capital research
Dabur India Ltd (DABUR IN, SELL)
Source: Bloomberg, Ambit Capital research
Godrej Consumer Products Ltd (GCPL IN, SELL)
Source: Bloomberg, Ambit Capital research
Colgate Palmolive (India) (CLGT IN, SELL)
Source: Bloomberg, Ambit Capital research
0
200
400
600
800
1,000
1,200
Dec
-13
Mar
-14
Jun-
14
Sep-
14
Dec
-14
Mar
-15
Jun-
15
Sep-
15
Dec
-15
Mar
-16
Jun-
16
Sep-
16
Hindustan Unilever Ltd
0200400600800
1,0001,2001,400
Dec
-13
Mar
-14
Jun-
14
Sep-
14
Dec
-14
Mar
-15
Jun-
15
Sep-
15
Dec
-15
Mar
-16
Jun-
16
Sep-
16
Asian Paints Ltd
01,0002,0003,0004,0005,0006,0007,0008,000
Dec
-13
Mar
-14
Jun-
14
Sep-
14
Dec
-14
Mar
-15
Jun-
15
Sep-
15
Dec
-15
Mar
-16
Jun-
16
Sep-
16
Nestle India Ltd
050
100150200250300350
Dec
-13
Mar
-14
Jun-
14
Sep-
14
Dec
-14
Mar
-15
Jun-
15
Sep-
15
Dec
-15
Mar
-16
Jun-
16
Sep-
16
Dabur India Ltd
0200400600800
1,0001,2001,4001,6001,800
Dec
-13
Mar
-14
Jun-
14
Sep-
14
Dec
-14
Mar
-15
Jun-
15
Sep-
15
Dec
-15
Mar
-16
Jun-
16
Sep-
16
Godrej Consumer Products Ltd
0
200
400
600
800
1,000
1,200
Dec
-13
Mar
-14
Jun-
14
Sep-
14
Dec
-14
Mar
-15
Jun-
15
Sep-
15
Dec
-15
Mar
-16
Jun-
16
Sep-
16
Colgate-Palmolive India Ltd
AMBIT INSIGHTS
Ambit Capital Pvt Ltd 3 January 2017
Glaxosmithkline Consumer (SKB IN, SELL)
Source: Bloomberg, Ambit Capital research
Berger Paints India Ltd (BRGR IN, SELL)
Source: Bloomberg, Ambit Capital research
Marico Ltd (MRCO IN, SELL)
Source: Bloomberg, Ambit Capital research
Britannia Industries Ltd (BRIT IN, SELL)
Source: Bloomberg, Ambit Capital research
ITC Ltd (ITC IN, BUY)
Source: Bloomberg, Ambit Capital research
Coal India Ltd (COAL IN, BUY)
Source: Bloomberg, Ambit Capital research
01,0002,0003,0004,0005,0006,0007,0008,000
Dec
-13
Mar
-14
Jun-
14
Sep-
14
Dec
-14
Mar
-15
Jun-
15
Sep-
15
Dec
-15
Mar
-16
Jun-
16
Sep-
16
GlaxoSmithKline Consumer Healthcare Ltd
0
50
100
150
200
250
300
Dec
-13
Mar
-14
Jun-
14
Sep-
14
Dec
-14
Mar
-15
Jun-
15
Sep-
15
Dec
-15
Mar
-16
Jun-
16
Sep-
16
Berger Paints India Ltd
050
100150200250300350
Dec
-13
Mar
-14
Jun-
14
Sep-
14
Dec
-14
Mar
-15
Jun-
15
Sep-
15
Dec
-15
Mar
-16
Jun-
16
Sep-
16
Marico Ltd
0500
1,0001,5002,0002,5003,0003,5004,000
Dec
-13
Mar
-14
Jun-
14
Sep-
14
Dec
-14
Mar
-15
Jun-
15
Sep-
15
Dec
-15
Mar
-16
Jun-
16
Sep-
16
Britannia Industries Ltd
140160180200220240260280
Dec
-13
Mar
-14
Jun-
14
Sep-
14
Dec
-14
Mar
-15
Jun-
15
Sep-
15
Dec
-15
Mar
-16
Jun-
16
Sep-
16
ITC Ltd
0
100
200
300
400
500
Dec
-13
Mar
-14
Jun-
14
Sep-
14
Dec
-14
Mar
-15
Jun-
15
Sep-
15
Dec
-15
Mar
-16
Jun-
16
Sep-
16
Coal India Ltd
AMBIT INSIGHTS
Ambit Capital Pvt Ltd 3 January 2017
Explanation of Investment Rating
Investment Rating Expected return (over 12-month)
BUY >10%
SELL <10%
NO STANCE We have forward looking estimates for the stock but we refrain from assigning valuation and recommendation
UNDER REVIEW We will revisit our recommendation, valuation and estimates on the stock following recent events
NOT RATED We do not have any forward looking estimates, valuation or recommendation for the stock POSITIVE We have a positive view on the sector and most of stocks under our coverage in the sector are BUYs
NEGATIVE We have a negative view on the sector and most of stocks under our coverage in the sector are SELLs
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Additional information on recommended securities is available on request.
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AMBIT INSIGHTS
Ambit Capital Pvt Ltd 3 January 2017
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Disclosures 29. The analyst (s) has/have not served as an officer, director or employee of the subject company. 30. There is no material disciplinary action that has been taken by any regulatory authority impacting equity research analysis activities. 31. All market data included in this report are dated as at the previous stock market closing day from the date of this report..
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