Indian Markets-The Story of Chinese Bamboo - Oct13.pdf

India Strategy

Nikhil Vora / Nikhil Salvi

IDFC Securities Ltd

(Dir) +91-22-6622 2567 / 2566

(M) +91 –98211 32471

Email: [email protected] / [email protected]

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”

Indian markets

“The Story of

THE CHINESE BAMBOO…”

“Patience is bitter, but its fruit is sweet” - Jean-Jacques Rousseau, Philosopher & Writer

The Chinese bamboo tree tests our patience... If you plant the seed of a Chinese bamboo tree, you will have nothing to show for in the first four years – just a tiny sampling – in spite of your best efforts. Then, sometime in the fifth year, to everyone’s surprise, the tree sprouts and grows NINETY feet in SIX weeks! In the first four years, the tiny sampling was actually developing its root system underground to sustain its impending overground growth fifth year onwards. If you had uprooted the sampling to see why it was not growing, it would die. But if you were patient and had faith, you would witness the miraculous growth later on. Many a times, Investing in equities is a similar game of patience. But to get the plant, first you need to plant the seed.

“It is patently foolish to forget to plant in the spring, take off all summer and then cram in the fall to bring in the harvest” – Dr. Stephen Covey

The current flurry of announcements by the government reminds us of the farmer who is trying hard to reap in the harvest (last year of the term), when in fact he forgot to plant in the spring (policy inaction in 2nd and 3rd year of the term). The results are not surprising – not only is the economic slowdown reflecting in the lag indicators such as GDP growth, but they can worsen further, if the lead indicators are extrapolated. However, in spite of government and regulators making several policy announcements to calm the markets and soothe frayed nerves of investors, we feel the present crop has gone waste and the time has come to be ready for a new season. 1991....2013....same old same old The recent sharp depreciation of INR (worst level of Rs68.8/USD) and declining forex reserves ($276bn as of Sep 27th or 7 months import cover) have evoked faint memories of the Balance of Payment crisis of 1991. The factors leading upto the crisis are similar – high structural current deficit (then funded by government borrowing, now by FII flows), inelastic imports, steadily rising fiscal deficit (fiscal profligacy) and delay by government in acknowledging the crisis – evoke a sense of déjà vu. 1991 : The worst of times....and the best of times Although 1991 was a dark episode in India’s economic history (India forced to pledge gold to borrow), the crisis also forced India to embrace a new economic model. Reluctantly and haltingly, Indian economy opened to rest of the world, domestic business environment changed. In hindsight the turmoil of 1991 laid the foundation for the subsequent ‘India’ growth story.

Indian Markets: The Chinese Bamboo story

The old economy gave way to emergence of new sectors and new leaders emerged. Unpredictably, sectors like IT and Telecom rapidly emerged, driven by several hitherto undiscovered factors – a large, educated, English speaking workforce (IT sector) and the unmet potential demand for easy, instant and affordable communication (Telecom sector). 2013: The worst of (recent) times....can it also be the best? Notwithstanding the fact that current slowdown is partly the handiwork of government inaction, we believe that the reforms of 1991 have had their run and even without policy paralysis of past few years, it would have been difficult to wring incrementally more growth. It is time to introduce India to a new set of ground breaking reforms. The current slowdown has indicated how the government can be pressed into taking the same decisions quickly it would otherwise arrive at after prolonged discourse and delay. Key reforms already underway....expect benefits to materialise in the long term Just like 1991, many of current policy benefits will be visible only in the long run. The Direct Cash Transfer mechanism can potentially reduce wastage of subsidies and hence burden on fiscal budgets, better targeting of beneficiaries and lower leakages in PDS. FDI in multi-brand retail can attract much needed foreign capital in long term. Certain actions like the Food Security Bill are only enhanced versions of PDS already in place and may not impact fiscal deficit in as badly as expected. Potentially ground breaking regulations like the Direct Tax Code, which have been chronically delayed by political differences and centre-state disagreements, will also be accelerated in a crisis. We can expect to see the ‘harvest’ of these ‘seeds’ in due course in several forms such as controlled fiscal deficit, higher FDI flows, improved tax to GDP ratio, renewed investment cycle, eventually leading to valuation multiples for Indian markets closer to those for developed markets. Crisis or not....some of the seeds for new leaders of tomorrow already sown While not many could have predicted the emergence of new sectors like IT and Telecom in the 1990s, we hazard a guess that the new leaders of tomorrow will be in the consumption space. An increasingly younger demographic, growing up in an ‘indulgence’ era, will drive growth in sectors like QSR, Liquor and Internet based services. Although currently the opportunities to invest in these segments are limited, we recommend watching out for these sectors as their secular growth overcomes investor scepticism. Overall, while most investors would seek solace from near term certainty of events, the words of a one-time thought leader to the contrary do merit attention...


“We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten” – Bill Gates

In the interim, we recommend caution as macroeconomic indicators remain subdued, and non-recurring events like elections will limit room for incremental government action. Under the circumstances, we expect following companies to relatively outperform as their fundamentals help them tide over the near term uncertainties. Top buys Automobiles- Eicher Motors, TVS Motors Infrastructure- JPA, IRB, APSEZ Consumer goods- United Spirits, Jyothy Labs Financials- Axis Bank, HDFC Bank IT Services- Infosys, Tech Mahindra, Persistent Systems Metals- NMDC Oil & Gas- RIL Pharmaceuticals- Dr Reddy's, Cipla, Glenmark, IPCA, Sun Pharma Power Utilities- JPVL, PTC Telecom- Idea Cellular At the same time, we recommend staying away from the following stocks as they look weak structurally Top Sells Automobiles - Tata Motors Cement – Ambuja, Ultratech Financials – SBI Metals – Hindalco Oil & Gas - HPCL


The curious case of Chinese Bamboo

The Chinese bamboo tree

tests our patience

Year

You take a tiny seed, plant it and water it....you get a tiny

sampling...nothing more 1

You water it, fertilise it.....the sampling stays as it is......nothing

happens 2

You continue to water it, take care of it....still nothing happens 3

Against your better judgement, you need to continue to water it,

fertilise it.....and still nothing will happen 4

To everyone’s surprise, the tree sprouts and grows NINETY feet in

SIX weeks! 5

What was going on the first four years?

• The tiny sampling was actually developing its root system underground to sustain its impending overground growth fifth year onwards.

• If you had uprooted the sampling to see why it was not growing, it would die.

• But if you were patient and had faith, you would witness the miraculous growth later on

Investing - a similar game of Patience

How does the ‘India’ plant look like

right now?

For seeds of ‘INACTION’ sown for past few years…

....now reaping the ‘SLOWDOWN’

Seeds sown over

past two years

Harvesting the crop

Policy inaction

Fiscal profligacy

Near stagnation in

decision making

Structural problems unaddressed

Demand supply gap

High CAD

High private sector

leverage

Overambitious overseas

expansions

Low growth

High fiscal deficit

High CAD

Capex slowdown

High inflation

Declining forex

reserves

Excessive leverage crimping

equity value

Equity Index– even after 6 years – at same levels!

Sensex - gone nowhere in past 6 years!

0

5,000

10,000

15,000

20,000

25,000

11-Sep-07 11-Mar-08 11-Sep-08 11-Mar-09 11-Sep-09 11-Mar-10 11-Sep-10 11-Mar-11 11-Sep-11 11-Mar-12 11-Sep-12 11-Mar-13 11-Sep-13

“It is patently foolish to forget to plant in the spring, take off all summer…….. and then cram in the fall to bring in the harvest”

– Dr. Stephen Covey

Government machinery - now in Overdrive

Pace of government announcements inversely proportional to falling markets!!

Policy overdrive

Flurry of government announcements lately…

o Task force for currency swaps created

o Infra announcements

CCI clears 36 infrastructure projects worth Rs1.8trn

DMIC clears 6 project worth Rs1.1trn

Six airports to be privatised for Rs42.5bn

Gas price pooling mulled for starting stalled gas plants

Notification of investor friendly GAAR

…and some action too

Imported coal price issue resolved for power plants

SEB restructuring reforms being decisively pushed

Coal India directed to sign FSAs by Presidential Directive

Parliament functioning relatively better than last time

o Better floor management by the government

Key bills passed in monsoon session – Food Security Bill, Land Bill,

Pension bill

Regulators – Now showing their Mettle…

Concerted action by government and regulators – will it save the day for Indian markets?

o Curbs on import of gold – purchase on credit, sale of retail investment items like coins, 20%

export mandate

o Streamlining purchase of dollars by OMCs via single bank

o Easier rebooking of cancelled forex contracts for exporters/importers

o Allowing MNCs to use dividends from Indian subsidiary to up stake locally

o Opened FCNR-B mobilization window; Offered swaps to banks at low rates

o Relaxed trade credit norms for raising funds overseas for import of capital goods by all sectors

o To introduce inflation indexed retail bonds – can divert gold investment demand

o To issue new bank licenses by Q4FY14

o Digitization pushed through across Phase-1 and Phase-2 cities; complete digitization by

Dec2014.

o Recommended reduction in auction rates for 2G spectrum

o Increased limits for FII investments in Government and Corporate debt

o Caps on sub-categories of FII debt investments removed

RBI

TRAI

SEBI

But the ‘Harvest’ season is not yet over….

Worsening of macro to continue for some more time

PMI indices

portend further

slowdown in

economy

Possibility of

Sovereign ratings

downgrade not

ruled out entirely

Inflation to move

up led by food

and fuel price

increases

Election season

ahead – pause in

decision making

expected

Currency remains

weak

RBI has hiked

repo rate for first

time in 2 years,

signals higher

inflation

expectation

2013….deja vu of 1991?

Balance of Payment crisis

1991

Evoking comparisons…then and now

2013

???

0.0

1.5

3.0

4.5

6.0

1987-88 1988-89 1989-90 1990-91

0.0

3.5

7.0

10.5

14.0

Forex reserves ($bn - LHS)

No. of w eeks of import cover (RHS)

Fiscal deficit (%age to GDP)

5.9

6.4

5.7

6.36.6

7.8

8.8

9.5

8.68.2 8.1

8.7

5.0

6.3

7.5

8.8

10.0

FY80 FY82 FY84 FY86 FY88 FY90

Fiscal deficit (%age to GDP)

4.24.5

4.0

2.5

6

6.5

4.9

5.9

4.9

2.0

3.0

4.0

5.0

6.0

7.0

FY05 FY07 FY09 FY11 FY13

Then…………….Depletion of India’s forex reserves………Now

Then…………Fiscal Deficit increaseing due to fiscal profligacy……..Now

270

276

282

288

294

300

Jan-13 Mar-13 May-13 Jul-13

4.0

5.0

6.0

7.0

8.0

9.0

Total reserves ($ bn)

No. of months of import cover (x)

1991…the WORST of times…

Sharp decline in India’s forex reserves

Fiscally expansive government policies (social schemes), leading to bloated budgets

Inelastic imports and uncompetitive exports lead to high Current Account Deficit (CAD),

unable to be funded for long

Matters made worse by climb of Crude prices due to geopolitical tension

Continuously reducing forex reserves / import cover

Political leadership slow in accepting level of crisis

Only 3 weeks import cover at worst level of forex reserves

Fiscal deficit increasing due to fiscal profligacy

Forced to pledge physical gold to borrow

Forced to accept conditions from international finance bodies

but…… also the BEST of times!

What was ‘sowed’ in 1991 …reaped over next 2 decades

Several key reforms undertaken Government relaxed controls on industry

State monopolies broken Tariffs and duties progressively lowered

1991

2013

GDP growth (%) - two decades

since reforms

0

3

6

9

12

FY

92

FY

94

FY

96

FY

98

FY

00

FY

02

FY

04

FY

06

FY

08

FY

10

Per capita income ($)

0

1,000

2,000

3,000

4,000

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

-20

-10

0

10

20

30

40

50

FY

91-0

0

FY

01

FY

02

FY

03

FY

04

FY

05

FY

06

FY

07

FY

08

FY

09

FY

10

FY

11

FY

12

FY

13

FDI FII

Sensex - up 20x!

0

5,000

10,000

15,000

20,000

25,000

1-D

ec-9

0

1-D

ec-9

2

1-D

ec-9

4

1-D

ec-9

6

1-D

ec-9

8

1-D

ec-0

0

1-D

ec-0

2

1-D

ec-0

4

1-D

ec-0

6

1-D

ec-0

8

1-D

ec-1

0

1-D

ec-1

2

Private sector competition encouraged

Globalisation embraced gradually Indian markets progressively opened to foreign investors

GDP growth pushed to

higher levels

Economic growth =income

growth

Attracting large

foreign capital

Equity markets in a new

orbit!

Surprise winners of 1991 reforms…new sectors emerge

Who will emerge as the winners of current reforms?

1991

Reforms

IT

Drivers

• A large, educated, English speaking

workforce

• Cost competiveness

• Global Delivery model

Drivers

• Large scale infrastructure development needed debt

funding

• Overall capex cycle funded by incremental debt

• New Private sector banks set higher standards of retail

service levels, and expanded aggresively

Telecom

Drivers

• Untapped large demand for easy, instant and

affordable communication

• Competition lowered cost of communication

• Private sector brought aggression and scale to

industry

Banks

While the old economy sectors gave way……

Cement…. Capital Goods…..

Steel…. Textiles….

Cement Mcap as Share of Total Market Cap (%)

4.7

2.1

0.0

1.0

2.0

3.0

4.0

5.0

1991 2013

Steel Mcap as Share of Total Market Cap (%)

7.8

2.2

0.0

2.0

4.0

6.0

8.0

10.0

1991 2013

Capital Goods Mcap as Share of Total Market Cap (%)

4.84

2.51

0.0

1.0

2.0

3.0

4.0

5.0

1991 2013

Textiles Mcap as Share of Total Market Cap (%)

14.2

1.1

0.0

5.0

10.0

15.0

1991 2013

……Markets gave a thumbs up to ‘new’ India

Quantum change in overall market capitalization New winners - IT

New winners - Telecom New winners - Banks

IT - Softw are Mcap as Share of Total Market Cap (%)

0.3

11.6

0

3

6

9

12

1991 2013

Telecom Mcap as Share of Total Market Cap (%)

0.0

2.7

0.0

1.0

2.0

3.0

1991 2013

Banks Mcap as Share of Total Market Cap (%)

12.4

0.0

5.0

10.0

15.0

1991 2013

India Market Cap (Rs tn)

0

20

40

60

80

1991 1994 1997 2000 2003 2006 2009 2012

But have the reforms of 1991 now run their full course?

2013…Is this the WORST of (recent) times???

Worsening macros….no end in sight?

GDP – Decline not yet over…. IIP – In the twilight zone…no clear sense of direction in past 18 months

WPI Inflation – set to rise from hereon PMI Indices – indicate contraction in private sector

-10.0

-5.0

0.0

5.0

10.0

15.0

20.0

Jan-0

9

Mar-

09

May-0

9

Jul-09

Sep-0

9

Nov-0

9

Jan-1

0

Mar-

10

May-1

0

Jul-10

Sep-1

0

Nov-1

0

Jan-1

1

Mar-

11

May-1

1

Jul-11

Sep-1

1

Nov-1

1

Jan-1

2

Mar-

12

May-1

2

Jul-12

Sep-1

2

Nov-1

2

Jan-1

3

Mar-

13

May-1

3

Jul-13

GDP grow th (%) - visible rapid slow dow n in past tw o years

4.5

6.0

7.5

9.0

10.5

FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13

Wholesale Price Inflation

4.0

5.0

6.0

7.0

8.0

9.0

Aug-12 Oct-12 Dec-12 Feb-13 Apr-13 Jun-13 Aug-13

(% yoy)HSBC Markit PMI Indices - India

40

44

48

52

56

60

Sep-13Jun-13Mar-13Dec-12Sep-12

Manufacturing PMI Services PMI Contraction threshold

Both Manufacturing and

Services PMIs in contraction

mode (f irst time since Mar '09)

Investment climate has dampened….

“India has lost world’s confidence” – Ratan Tata

New project announcements – 48% yoy decline in H1FY14

‘Projects under implementation but stalled’ remain elevated (10%

of projects under implementation) Gross Fixed Capital Formation (GCFC) on a decline

Both Private and Government new projects on a decline

0

3

6

9

12

Q1FY10 Q3FY10 Q1FY11 Q3FY11 Q1FY12 Q3FY12 Q1FY13 Q3FY13 Q1FY14

-6.0

0.0

6.0

12.0

18.0

24.0

GDP Grow th (% yoy) -LHS GCFC- w ith one qtr lag (% yoy) - RHS

0

1,700

3,400

5,100

6,800

Sep-0

0

Sep-0

1

Sep-0

2

Sep-0

3

Sep-0

4

Sep-0

5

Sep-0

6

Sep-0

7

Sep-0

8

Sep-0

9

Sep-1

0

Sep-1

1

Sep-1

2

Sep-1

3

Private (Rs bn) Government (Rs bn)

Implementation - stalled (Rs bn)

0

2,250

4,500

6,750

9,000

Sep-99 Sep-01 Sep-03 Sep-05 Sep-07 Sep-09 Sep-11 Sep-13

New announcements (Rs bn)

0

2,200

4,400

6,600

8,800

Sep-0

0

Sep-0

1

Sep-0

2

Sep-0

3

Sep-0

4

Sep-0

5

Sep-0

6

Sep-0

7

Sep-0

8

Sep-0

9

Sep-1

0

Sep-1

1

Sep-1

2

Sep-1

3

But….are these also the BEST of times???

The full impact of these measures will be definitely seen …albeit with a lag

A more disciplined government – FM’s commitment “Fiscal red lines that will not

be crossed” proven in FY13

Fuel price hikes irreversible – Regular diesel price hikes by Rs0.45/lit

Direct Cash Transfer – potential to reduce future subsidies substantially

FDI in sectors like retail…..opposition to FDI slowly ceding ground….can potentially

attract large investments

Long term growth seeds being sown – Several structural improvements still below ‘radar of analysts’

GST and DTC…to come sooner than later…no going back

Recent fuel price hikes….small…..but irreversible

As consumers are unshielded from international price changes, fuel demand to moderate and hence fuel subsidies to reduce

Diesel price hikes now more regular …… ….leading to decline in Diesel demand

Cap on subsidized LPG cylinders reflected in LPG WPI Index LPG demand growth fallen post cap on subsidised cylinders

40

45

50

55

60

Jan-12 Jul-12 Jan-13 Jul-13

Diesel prices - Mumbai (Rs/lit) Diesel Consumption yoy

-8%

-4%

0%

4%

8%

12%

16%

20%

Jan-1

1

Mar-

11

May-1

1

Jul-11

Sep-1

1

Nov-1

1

Jan-1

2

Mar-

12

May-1

2

Jul-12

Sep-1

2

Nov-1

2

Jan-1

3

Mar-

13

May-1

3

Jul-13

LPG Grow th (% yoy)

-8%

-4%

0%

4%

8%

12%

16%

Jan-1

1

Mar-

11

May-1

1

Jul-11

Sep-1

1

Nov-1

1

Jan-1

2

Mar-

12

May-1

2

Jul-12

Sep-1

2

Nov-1

2

Jan-1

3

Mar-

13

May-1

3

Jul-13

LPG price Index

80

110

140

170

200

Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13

Direct Cash Transfer….inflationary….but necessary

With UID and bank account linked DCT, subsidies will be targeted to beneficiaries

Kerosene demand decline even before DCT in place

“Direct transfer of food and fertilizer subsidies in cash to targeted beneficiaries has the

potential to save almost Rs600bn, without any major adverse impact on the beneficiaries”

- Commission for Agricultural Costs and Prices

DCT – contours

Cash in lieu of benefits

Deposited directly to bank account

UID linkage to identify beneficiaries

Gradual scaleup of schemes and

geographies

Study by TERI and IISD

indicates saving of Rs41bn

or 17% of kerosene subsidy

every year

Potential impact

on subsidies

Kerosene Grow th

-20%

-15%

-10%

-5%

0%

5%

Jan-1

1

Mar-

11

May-1

1

Jul-11

Sep-1

1

Nov-1

1

Jan-1

2

Mar-

12

May-1

2

Jul-12

Sep-1

2

Nov-1

2

Jan-1

3

Mar-

13

May-1

3

Jul-13

DTC and GST….substantial ground gained

The impact of DTC and GST will materially plug taxation loopholes…

Direct Tax Code (DTC) Goods and Services Tax (GST)

Potential impact on

tax collections

• To widen tax collection base

• Tax/GDP ratio to increase substantially from

~11% currently

• GDP growth estimated to be up by 1% with the

implementation of a well-designed GST.

• 10%+ increase in exports estimated

Potential impact on

economy

• To overhaul the Income Tax Act

• Rationalisation of taxation

• Process of rolling out the DTC is already under way

• Draft prepared from extensive stakeholder consultations

currently being examined by various Ministries

• Both the Centre and the State to basically and fundamentally

change the overall structure of tax assignment

• Rs90bn set apart as the first instalment of the balance of

central sales tax (CST) compensation to states

• Cabinet to introduce the bill in Parliament

• A single or fewer rates for both goods and services to replace

the multiple taxes being levied

• Redistributing the burden of taxation equitably between

manufacturing and services

• Rationalisation of taxation

• Draft prepared from extensive stakeholder consultations

currently being examined by various Ministries

• Both the Centre and the State to basically and fundamentally

change the overall structure of tax assignment

Few more ‘seeds’….that will bear fruit in due course

These relatively smaller steps will contribute to increasing ‘the investibility’ of Indian markets

FDI in Aviation

• Tata group announced two JVs – one with Air Asia

and Singapore Airline

• Jet Etihad deal underway

Digitization

• Structural change in television sector Phase - 1

& 2 successfully completed

• Goldman invested $110m in DEN Networks

• More FDI to follow

Real Estate Bill

• Will bring one of India’s largest ‘grey’ industry

under regulation

Large scale Infra investments on cards

• CCI clears 36 infrastructure projects worth Rs1.8trn

• DMIC clears 6 project worth Rs1.1trn

• 6 airports to be bided out for Rs42.5bn

FDI in Multi-brand retail

• Gradual opening of sector can potentially bring

in large scale investments

New bank licenses

• To improve reach of banking sector in unbanked

areas – expanding financial inclusion net

FDI in retail - potentially one of largest FDI in India

FDI in

Retail

Size of Indian Retail to grow to $1.25tn by 2020

Size of Organised Retail – from 6% to 20% or $260bn, but will be still

far less than developed economies (80%+)…

India is the 5th most favorable destination for international retailers

India can attract upto $15bn in FDI in the next five years

The China Retail FDI Case

• China has attracted $30bn+ of FDI in retail even with gradual opening of sector

• China first permitted FDI in retail in 1992 with foreign ownership restricted to 49%

• Over 600 hypermarkets opened since

• Employment in the retail and wholesale sectors doubled to 54m in two decades since 1992

FDI in aviation…the next one to follow

FDI in

Aviation

Jet Etihad deal : $379m for 24%

stake

Tata Air Asia JV announced

Tata Singapore Airlines JV: To launch full service

carrier in India

SpiceJet in ‘advanced’ talks with Emirates / Tiger

Air for stake sale

The ‘seeds’ are being sown, but is the ‘ground’ fertile?

The ‘fertile’ ground - India is in an Indulgence Age

India to be USD1trillion consumption opportunity by 2015-16

I can “SPEND” – INCOME effect

There are MORE like me – BROADBASED growth

I am “WILLING TO SPEND MORE” – MINDSET

change

I know “WHERE TO SPEND” – AWARENESS

levels

I have “OPTIONS TO SPEND” – AVAILABILITY

I “WANT MORE THAN I NEED” – ASPIRATION

effect

In spite of slowdown, still one of

world’s top growing countries

Peer influence reflected in

consumption choices

35% of Indians born in post

liberalization

Increased media proliferation

Increased brand options in each of

the business segment

India moving up the value chain -

premiumization

Changing Consumer…

India, amongst the youngest

age profile

600m+ people below the age of 25 years

170m+ working women Women account for 1/4th of workforce in India

Increased consumer durable

ownership

Increased spends on consumer durables, home furniture,

etc

Savvy and informed kids -

influencer in decision making

361m of India in age group below 15 (6x USA)

“We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten”

– Bill Gates

Who will be the winners of next decade ?

QSR – The best play on food retail in India

The Indian food services Industry is now a US$12.5bn

Industry! Expected to grow to US$23bn by 2015!

The organised share, currently at 30%, is expected to

move to 45% by 2015!

This translates into a 40% CAGR over the next 3 years

for the organised sector!

An increasing youth demographic and expanding

urbanisation will drive growth for the organised sector

Indian Food Service Industry Size

0

200

400

600

800

2010 2011 2012 2013E 2014E 2015E

Unorganised Organised(Rs bn)

Quick Service Restaurants are the largest piece of

organized market; having 1/3rd share

Over the next 3 years, QSR industry is expected to

DOUBLE to over US$2.5bn

We believe businesses with strong brands, healthy

cash flows and scalable models like Jubilant

Foodworks and Westlife Development are likely to

provide disproportionate returns to investors in the

long term.

Format wise breakup

Source: Indian Restaurant Report, 2012

QSR

33%

Casual Dining

24%

Fine Dining

14%

Café and

Parlours

3%Pubs and Bars

4%

Bakery

9%

Food Courts

8%

Kiosks

4%Institutional

Catering

1%

Digitization…. will the disparity remain?

Indian TV distribution industry Comcast – largest cable company in US

C&S homes (m) EV (US$ bn)

140

12

24

160

Globally, three of the top 10 value creators in Media are standalone distribution companies!!!

India, world's 2nd largest C&S market (US at 140m homes)…

…valued at 1/12th a single player in US!

36

Liquor…equations to reverse?

Alcohol vs Tobacco MCap: India to revert to global norms

M-Cap of Tobacco vs Alcohol companies – Globally and in India

Worldwide - Alcohol companies have higher market

cap than tobacco companies However, in India Alcohol companies have had

significantly lower market cap so far Such mismatch to global norm is expected to

correct going forward

601

860

0

250

500

750

1,000

Global

Tobacco Brewers & Distellers (US$ bn)

42

9

0

10

20

30

40

50

India

Tobacco Brewers & Distellers (US$ bn)

Alcohol cos at 1/5th

Mcap of Tobacco cos

Global Brewers &

Distellers at 1.4x Mcap

of Tobacco cos

Need to relook the demographic in ‘digital’ terms

The wild card: India’s ‘digital’ demographic

India can potentially give rise to one of the world’s largest online digital markets

A predominantly young populace being introduced to digital devices at an increasingly early age)

India’s demographic so far only seen as ‘workforce’ and ‘consumers’

• Deep mobile penetration (66% of population)

• High mobile internet usage (25% of mobile users)

• Internet usage skewed towards mobile (at 143m, mobile internet users are 10x broadband internet users)

• The world’s 2nd largest populated country having only 16% internet penetration vs China’s 43% and 80% in US

What is India’s ‘digital’ generation consuming?

3/4th

of India’s online

users are below 35

years of age

1/4th

of time current

spent on networking

< 35 years 75% >35 years

25%

Social Networking

25%

Entertainment

10%

Portals

9%

Others

38%

Retail

2%

Business/Finance

3% Search/Navigation

3%

e-mail

8%

News/Information

2%

Source: comScore report June 2012

Source: comScore report June 2012

Online retailing: equal opportunity for Indian players

“An executive can’t compete with an entrepreneur” !!!

Amazon unable to replicate success of USA overseas

• China’s online market size

$110bn

• Amazon, even after 9 years

in China, is not among top 5

• Japan’s online market size

$128bn

• Top online retailer is local

company Rakuten with 26%

market share

• Brazil’s online market size

$17bn

• Amazon only recent entrant

and only in e-books

• India’s online market $12bn

• 4th

largest number of online shoppers in Asia

• Competition from ever increasing number of Indian online shopping sites!

Source: www.emarketer.com

Virtual explosion of online shopping sites in India

The list will only keep on increasing…….

….And so will the options available to investors

……expect many more names in the public markets in coming years

QSR

Jubilant

Foodworks

DIGITISATION DEN

LIQUOR United Spirits

INTERNET Just Dial

Westlife

(McDonalds)

Hathway

Radico Khaitan

What will India reap in future – the next decade!

What we are ‘sowing’ today…will be reaped in the future!

Several key reforms undertaken Renewed focus on infrastructure

Direct Cash Transfer roll out

Fiscal deficit contained

GST roll out

FDI limits raised for several sectors DTC implementation

GDP growth pushed to

higher levels 7-9% once

more

FDI Inflows increase

to $70-80bn annually

Indian markets to trade at

higher PE multiples – near

developed markets

Fiscal deficit reduced to

2% of GDP!

Demand Supply structural

issues addressed – inflation

below 3%!

Internationalization

of INR

Tax to GDP ratio

increases

India Current

Account Surplus!

2023

2013

Till then……we recommend to tread cautiously

Sector Sensex

weight (%)

Mar-13 Sep-13

Top ideas

weight weight

Automobiles 10.1 8.5 9 Eicher Motors, TVS Motors

Construction/Infra/Power

Equipment 4.7 6 5 JPA, IRB, APSEZ

Consumer goods 15.3 15 15 United Spirits, Jyothy Labs

Financials 23 23 20 Axis Bank, HDFC Bank

IT Services 17.5 12 18 Infosys, Tech Mahindra, Persistent Systems

Metals 5.2 5 3 NMDC

Oil & Gas 13.3 13 11 RIL

Pharmaceuticals 6 9 10 Dr Reddy's, Cipla, Glenmark, IPCA, Sun Pharma

Power Utilities 2.6 3 3 JPVL, PTC

Telecom 2.3 1.5 3 Idea Cellular

Others 4 3 AIA Engineering, United Phosphorus

Total 100 100 100

Model Portfolio

Current macroeconomic environment discourages ‘riskier’ bets in the near term

Top Picks and Financials (based on FY15 Estimates)

Top buys – Large Cap

Large cap (Mcap>US$2bn)

Note: Financials based on FY15 Estimates; Price as on 7th

October 2013

Large cap (Mcap>US$2bn)

Companies

Price Mcap FY15 EPS Earnings

CAGR P/E EV/EBITDA P/BV RoE RoCE

(Rs) (Rs bn) (Rs/share) FY13-15E (x) (x) (x) (%) (%)

Adani Port & SEZ 145 290 11 20.0 12.7 9.5 2.7 23.3 13.4

Reliance Industries 844 2,760 80 11.7 10.6 7.2 1.3 12.5 10.3

Cipla 440 354 24 12.7 18.3 10.5 2.9 16.8 19.3

Dr Reddy's Lab 2,386 404 129 16.8 18.5 12.0 3.9 22.9 19.6

Glenmark Pharma 571 155 33 20.1 17.4 12.1 3.6 22.8 20.9

Idea Cellular 174 573 6 39.7 27.8 7.0 3.2 12.0 11.7

Infosys 3,022 1,726 208 12.2 14.5 9.0 3.1 23.2 26.6

NMDC 123 488 16 (1.0) 7.8 3.8 1.5 19.9 21.9

Sun Pharma 605 1,252 25 20.0 24.2 16.9 5.3 24.6 29.6

Tech Mahindra 1,443 178 140 23.9 10.3 5.3 2.5 26.9 28.0

United Spirits 2,461 310 40 73.6 62.1 26.3 4.3 7.1 9.6

RoA (%)

Axis Bank 1,072 440 156 15.1 6.9 1.2 1.1 17.8 1.7

HDFC Bank 634 1,475 46 26.9 13.8 3.0 2.9 23.1 2.0

Top buys – Mid and Small Cap

Mid cap (Mcap between US$2bn and US$500m)

Small cap (Mcap < US$500m)


October 2013

Mid cap (Mcap<US$2bn and >$0.5bn)

Companies




Eicher Motors 3,780 102 256 46.5 14.8 7.6 2.5 18.9 25.8

IPCA Laboratories 704 88 45 33.0 15.5 10.2 3.6 26.2 27.6

Jaiprakash Associates 38 80 7 79.2 5.6 6.2 0.4 8.0 10.2

Jaiprakash Power 16 42 3 58.1 5.4 6.0 0.6 11.5 10.2

Small cap (Mcap<$0.5bn)

Companies




AIAE 348 33 28 12.9 12.2 7.3 1.8 15.6 19.7

IRB Infra 78 26 14 (5.3) 5.5 6.7 0.7 12.5 10.1

Jyothy Laboratories 179 29 10 60.3 17.9 14.3 3.6 21.6 16.0

Persistent Systems 689 28 78 29.0 8.8 4.0 1.9 23.7 29.7

PTC 51 15 5 10.0 9.7 (1.8) 0.6 6.4 8.4

TVS Motor 45 21 8 33.8 5.6 3.5 1.3 24.9 23.4

Top sells


October 2013

Companies




Ambuja Cement 193 294 11 4.0 17.8 10.3 2.9 16.9 18.1

Hindalco Industries 122 233 14 (5.9) 8.7 7.1 0.6 6.7 7.3

HPCL 193 65 42 152.2 4.5 12.3 0.4 9.8 3.0

Tata Motors 348 1,109 36 5.0 9.6 4.5 1.9 21.7 19.8

UltraTech Cement 1,905 522 106 4.4 18.0 10.2 2.6 15.4 15.0

RoA (%)

State Bank of India 1,633 1,037 228 5.2 7.2 1.2 0.9 13.6 0.8

Alcoholic beverages

United Spirits: BUY

Diageo to transform United Spirits with operational control: With the acquisition of 25% stake in USL, Diageo now has

operational control of USL. Diageo’s acquisition of USL is poised to underpin a strong transition towards portfolio premiumization.

Pernod Ricard generates Rs5.9bn+ of PAT selling 24m cases in India, indicating the inherent profitability in the industry. With USL

drawing 70% of its volumes from mass segment brands, profitability in the business has remained subdued (EBITDA/case 1/4th that

of Pernod Ricard India). This is clearly up for a critical change as Diageo re-instates focus towards premiumization and value rather

than volume.

Indian liquor industry dynamics set to change: With Diageo and Pernod Ricard, the two largest global players, now controlling

60%+ of the Indian spirits market, we sense a potent change in the operating dynamics of the industry. With ‘profits’ and ‘best

practices’ being the key focus for Diageo and Pernod, we believe terms of the trade will improve significantly and bring to fore the

inherent profit generation capability of the industry.

USL set to become one of the top Indian Consumer Stocks: As Diageo focuses on premiumization, profitability in the business

is poised to see a significant increase. Even if Diageo were to contract USL’s volumes by ~30% (to 90m cases), the business would

still have a profit potential of over US$350m. Further, with balance sheet deleveraging (already underway – repaid Rs16bn of debt in

Q1FY14), USL’s profitability is expected to improve significantly. We expect USL to become one of the biggest names in the Indian

consumer space in the long run on the lines of an ITC or Hindustan Unilever (with potential inclusion in India’s benchmark index –

Nifty).

Companies Price MCap EPS Earnings

CAGR (%) P/E EV/EBITDA P/BV RoE RoCE Target Reco

(Rs) (Rs bn) (Rs/share) FY13-15E (x) (x) (x) (%) (%) Price (Rs)

United Spirits 2,461 310 39.6 73.6 62.1 26.3 4.3 7.1 9.6 3,000 OP

Top Buy/Sell


October 2013

Automobiles

Top Buy/Sell

Eicher Motors: BUY

Structural play on leisure biking (63% of EPS) and market share gain in MHCVs. Market share in MHCVs up 270bp in CY12 in a

weak market and sans a captive financing arm; increasing customer and financier acceptance

Offers superior growth visibility in a cyclical industry due to rising HCV market share (up in a weak market), resilient LMD and

exports/outsourcing. RE deserves to trade at 20x (PEG of 0.25x); at this target PEG it’s cheaper than the Indian 2W names even

with a superior business model.

Dealer checks suggest RE can achieve volumes of 175,000/250,000 in CY13/CY14 as capacity expands.

Trading at 14.8x CY14E EPS with a EPS CAGR of 46% . Structural pick with TP of Rs4,355

TVS Motor: BUY

5 launches to make it a full portfolio player. Aid market share and margin expansion. Deal with BMW to aid diversification and

boost premium segment presence.

31% reduction in Indonesia operating losses to Rs350m in FY13 despite a 19% volume decline a key positive

Deleveraging to boost non-operating growth as Interest-bearing debt of Rs4bn (25% of mkt cap) to be retired by end-FY14. Sold

windmill business to Green Infra. (TVS investment was at Rs767m with debt of Rs2.6bn)

Best risk-reward as stock trading at 5.6x FY15E, BUY with TP of Rs58

Automobiles

Top Buy/Sell

Tata Motors: SELL

JLR - competitive intensity on the rise against JLR’s two new models (upgrades apart) in four years; competition plans to

introduce 18 models. Risk to Street’s 15% volume growth assumption in FY15.

Evoque in its prime; growth onus on Jaguar: Base affect and competition (4 all-new launches, including Porsche Macan & BMW

X4) catching up with Evoque. Growth onus on Jaguar which will be margin dilutive.

JLR valuations unreasonable: Premium valuations for JLR (40% higher EV/sales than BMW) unjustified given, a) capex-led

uncertain free cash flows; b) rising dependence on Jaguar, and c) intense competition.

Structural weakness of standalone business cant be ignored (c.25% of SOTP target price of Rs261) Recommend selling on every

rally.

Automobiles




Top Buys

Eicher Motors 3,780 102 256.0 46.5 14.8 7.6 2.5 18.9 25.8 4,355 OP

TVS Motor 45 21 8.0 33.8 5.6 3.5 1.3 24.9 23.4 58 OP

Top Sells

Tata Motors 348 1,109 36.4 5.0 9.6 4.5 1.9 21.7 19.8 261 UP

Top Buy/Sell


October 2013

Cement

Ambuja Cement / Ultratech: SELL

Revival in cement demand to be muted - lack of large infrastructure projects and industrial activity driving weak demand

No improvement in utilisation levels as incremental supply exceeds incremental demand

Cost pressures sustain: weak rupee to offset benefits of lower international coal prices, higher freight costs (15% increase in rail

haulage from 1st Oct0

EBITDA/t to at best remain flat over FY13-15 led by muted volumes and lower realisations

Valuations extremely expensive at 10-11x EV/EBITDA and 17-18x FY15 PER leaving no room for earnings disappointment. Any

downside to earnings will de-rate stocks and drive significant underperformance

Top Buy/Sell




Top Sells

Ambuja Cement 193 294 10.8 4.0 17.8 10.3 2.9 16.9 18.1 165 UP

UltraTech Cement 1,905 522 105.6 4.4 18.0 10.2 2.6 15.4 15.0 1,650 UP


October 2013

Consumer Goods

Jyothy Lab: BUY

From a limited opportunity play: Limited opportunity play (USD500m)–in only 3 mass-end categories and one flagship brand -

Ujala and skin to GCPL in 2008 – GCPL in 2008 had limited product portfolio (low growth visibility); Promoter-driven business for

past 30 years, without professional management

To a whole new scale!!: Post the Henkel acquisition, market opportunity up 10x to US$5bn in India; Entry into ‘premium’

categories – Henkel infuses a premium brand- width into a hitherto mass market portfolio.

‘Management bandwidth scaled up.. Business integration complete: Spearheading the change in management is new CEO

Mr S Raghunandan, a turnaround veteran. The new team, brought in by new CEO, has 15-25 years of experience from across the

top consumer names like HUL, Marico, Colgate, Paras, Sara Lee etc. Re-organisation of management team as well as the re-

alignment and integration of the two businesses (Jyothy and Henkel) is complete with the first signs being visible in a

blockbuster Q1FY14 result

Poised to enter the big league: JYL can potentially be another Godrej Consumer Products, which has grown over the last 5

years through acquiring successfully and has increased market cap by10x in the process

Top Buy/Sell

Consumer Goods




Top Buys

Jyothy Laboratories 179 29 10.0 60.3 17.9 14.3 3.6 21.6 16.0 250 OP

Top Buy/Sell


October 2013

Engineering

AIA Engineering: BUY

Deeper penetration in international mining segment driving volume growth with 75% of revenues from replacement demand

Margins likely to bottom out in FY13 and improve in FY14 by 100bps led by 1) improved revenue mix towards liners within mining

segment b) price increases with mining customers and 3) lower forex losses in FY14

Plans to expand capacity by 100,000 tonnes over the next 2 years to tap growth in mining segment

Upside to earnings estimates

Trading at 12.2x FY15E earnings at the lower end of its historical trading band considering sustainable growth (13% CAGR in earnings

over FY13-15), superior return ratios (20% RoCE) and oligopolistic nature of industry.

Top Buy/Sell




Top Buys

AIAE 348 33 28.5 12.9 12.2 7.3 1.8 15.6 19.7 400 OP


October 2013

Financials

Axis Bank: BUY

Under valued deposit franchise – Axis has evolved into a strong retail deposit franchise and we believe it is undervalued. Market

cap to total deposits and market cap to CASA deposits – 45% lower than private banks average

Strong low cost deposit franchise – 42% CASA is a significant advantage in such tight liquidity environment. We expect Axis to

remain amongst the better CASA franchises medium term

Healthy net interest margins – Axis’s NIMs are over 350 bps, NIMs likely to remain strong led by high CASA ratio, increasing

exposure to retail segment.

Above industry loan growth – Axis should continue to grow its loan book at above industry levels – while loan growth in corporate

segment has moderated, ample room to drive growth in retail/SME segment

Stable credit costs - We believe credit costs are likely to remain stable between 90-100bps over the medium term. We do not expect

a sharp jump in credit costs near term.

Healthy return profile/high capital cushion – Axis has a healthy ROE of 17-18% over FY14-15E. Moreover, with recent capital

raising, Axis has reasonably high capital adequacy of 12.25%

Valuations well below historical means - Current valuations are attractive at 1.2 FY15E P/Adj. BV and 6.9x FY15E P/E. We believe

the stock will provide healthy returns over the medium term

Key risks – sharp deterioration in the SME asset quality and broader economic slowdown

Top Buy/Sell

Financials

HDFC Bank: BUY

A strong retail deposit franchise- HDFC Bank is the one of the best deposit franchises in the current environment with CASA

ratio of ~45%

Healthy net interest margins– HDFC Banks’ NIMs remain one of the highest in industry (over 400bps) and boasts of the lowest

cost of funds. Offers significant cushion in current tight liquidity environment

Steady , above –industry loan growth – HDFC Bank continues to growth ahead of industry with 20%+ loan growth. We believe

HDFC Bank will continue to grow at healthy levels led by retail segment .

Lowest credit costs, strong asset quality – HDFC Bank has the lowest credit costs in the sector (~80bps) and coverage levels

are well above 100%. With Gross NPAs at 1.1%, HDFC Bank has performed significantly well on the asset quality front. We rule

out any significant rise in credit costs for HDFC Bank.

Consistent, predictable earnings performance – HDFC Bank has demonstrated the most consistent earnings growth even in

difficult times. With return ratios of 21%+ for FY14E we believe the stock offers strong returns with reasonable safety

Will continue to trade a premium valuations – HDFC Bank has traded at a significant premium to its peers given its superior

asset quality, consistent performance and steady RoEs. We believe current correction in the stock (trading 3x FY15E P/Adj. BV

and 13.8x FY15E P/E) offers an attractive entry point .

Key risks – sharp deterioration in the retail asset quality and broader economic slowdown

Top Buy/Sell

Financials

State Bank of India: SELL

Asset quality under pressure - Asset quality has continued to weaken for SBI – it now has amongst the highest NPLs in the

sector (at 5.6%) and a long restructuring pipeline. We do not see signs of improvements near term, given continued stress in the

mid-corporate and SME segments – key areas of weakness for SBI

Credit costs likely to remain high – We believe SBI’s credit costs will remain high medium term as it needs to provide more to

shore up the low loan loss coverage on existing NPLs (50% coverage), slippages from restructured assets and further NPL

creation ahead.

Top management change ahead – SBI’s top management team is set to see a complete overhaul in the next 18 months as the

entire top management team achieves retirement age. We believe this can lead to a significant transition period for the bank.

Declining NIMs – SBI is witnessing a decline in NIMs over the past 5 quarters. Moreover, the bank has consciously decided to

focus on low yielding corporate/retail loans. We believe, SBI’s NIMs will remain stressed notwithstanding its strong deposit

franchise given declining loan yields and significant interest reversals.

Low capital cushion – SBI’s Tier-I capital adequacy ratio at 8.8% is relatively lower than most large private banks in the country.

Likely further dilution will continue to remain an overhang on the stock in near term.

Stress adjusted valuations not cheap – SBI is trading at 1.2x FY15E P/Adj BV and at a significant premium to other PSU banks

(in line with some large private banks). Given the higher asset quality pains – there is significant room for downsides.

Key positive – strong deposit franchise for the bank in an uncertain funding environment can lead to the bank garnering

significant market share

Top Buy/Sell

Financials


CAGR (%) P/E P/Adj. BV P/BV RoE RoA Target Reco


Top Buys

HDFC Bank 634 1,475 45.8 26.9 13.8 3.0 2.9 23.1 2.1 745 OP

Axis Bank 1,072 440 155.8 15.1 6.9 1.2 1.1 17.8 1.7 1,580 OP

Top Sells

State Bank of India 1,633 1,037 228.0 5.2 7.2 1.2 0.9 13.6 0.8 1,545 UP

Top Buy/Sell


October 2013

IT Services

Top Buy/Sell

INFOSYS: BUY

Return of NRN Murthy to catalyze the growth engine

Management is aggressively investing in business correcting under-investment of FY09-11

The focus has shifted to driving revenue growth instead of a myopic focus on margins

Improved large deal traction is expected to lead to convergence of revenue growth with peers

Enough headroom in margin levers

SG&A leverage, utilization, consulting mix and INR weakness to be key margin tailwinds.

Utilization at 71-72% for IT services vs. optimal band of 78-80% gives enough headroom

Indian IT services yet not ex-growth

Indian IT exports can still grow at 12-14% for few years beyond FY14

Draft US Immigration Bill could be a near-term drag on growth as players re-align their businesses

Valuation discount to narrow

Change in business prospects with a macro uptick to narrow valuation discount vis-à-vis TCS.

Key risks: a) continued sluggishness in global IT spend environment; b) pricing pressure in plain vanilla IT services

IT Services

Tech Mahindra: BUY

Healthy execution/ merger to drive steady growth

Growth to be led by a) non-BT telecom business, b) non-Telecom verticals, c) acquisitions

Merged entity (stronger balance sheet and scale of business) well placed to compete for large deal wins

Margins to remain in a narrow band

Low hanging margin levers have been utilized

INR weakness and Employee pyramid (~30% in 0-3yrs experience vs. ~50% for larger peers) would be key drivers

Visibility on BT business remains bleak but, relatively less important post merger

Few large BT contracts due for renewal in FY14/15; Post merger, BT share at ~12%

Non-BT Telecom and Non-Telecom piece showing healthy traction – 10+ deals with 3 large deals in Q1

Gradual re-rating to continue on improved prospects and better growth visibility

TechM currently trades at ~10x FY15E EPS (vs. 14-20x for larger peers)

Key risks: a) Weakness in global macro environment; b) pricing pressure in plain vanilla IT services; c) risk of aggressive

acquisitions

Top Buy/Sell

IT Services

Persistent Systems: BUY

Bets on right technologies

Persistent was ahead of peers to invest into right technologies – Cloud, Mobility, Analytics and Social/ Collaboration

‘SMAC’ has been a major area of investment across industry verticals and a driver of discretionary spend

Focus on IP revenues to drive growth, margins

IP revenues are growing faster than company on the back of organic and inorganic efforts

With gross margin of 50%+ in IP revenues, we see margins sustaining at high levels for the Company

Valuation not inexpensive; We expect further re-rating as IP mix increases

PSYS trades at ~8.8x FY15E EPS in-line with peer avg. and estimated EPS CAGR of 29% over FY13-15E

With IP share sustaining above 20% of revenues, we see PSYS commanding premium over other small mid cap peers

Key risks: a) Slowdown in capex cycle of global technology companies; b) aggressive acquisition in IP space

Top Buy/Sell




Top Buys

Infosys Technologies 3,022 1,726 207.7 12.2 14.5 9.0 3.1 23.2 26.6 3,500 OP

Persistent Systems 689 28 78.0 29.0 8.8 4.0 1.9 23.7 29.7 850 OP

Tech Mahindra 1,443 178 139.9 23.9 10.3 5.3 2.5 26.9 28.0 1,750 OP


October 2013

Infrastructure

Jaiprakash Associates: BUY

Ramp up in cement volumes and cash flows.

Expect demand recovery in H2 led by good monsoons and pre-election demand surge

EBIDTA to improve to Rs900/ton led by better pricing and volumes; to improve cash flows substantially

Debt refinancing complete in JIL

Repayment period extended upto 18 years

Positive for the real estate business and for the stock

Expect improved cash flows from commissioning of key assets

Bina power plant commissioned; Nigrie nearing completion

Coal production commenced in Amelia North

Deferred development of Rs200bn Lower Siang hydro project postpones equity dilution beyond FY15

Divestment of Gujarat cement plant complete

To reduce Rs38bn in consolidated debt

Further divestments on the cards in the infra and power businesses

Focus on third party E&C business (hydro power) to cushion EPC profits

Valuations attractive at PE of 5.5x FY15E. SOTP based price target of Rs89/share.

Top Buy/Sell

Infrastructure

IRB Infrastructure: BUY

Balanced mix of operating and under construction assets

Cash generation gives ability to fund equity in new project

Execution of EPC orders gives growth in earnings

Assets part of trunk national highways and offer strong growth potential

Moderate leverage, superior returns and strong cash flows key differentiators vis-à-vis peers

D/E of 2.2x as against 3-5x for most peers

Debt/EBIDTA of 4.1x vis-à-vis 5-19x for peers

Rs14bn cash flow over 2 years (post debt-repayment)

Backward integration, own equipment and control over raw materials drive higher EPC margins

Valuations attractive at 2.9x FY14 cash earnings and 6.7x EV/EBIDTA on FY15 basis

Factor concerns on low IRRs on its recent projects

Adequate margin of safety

Key risk – unfavorable outcome of ongoing investigation by the CBI on promoters/company officials

Top Buy/Sell

Infrastructure

Adani Port & SEZ : BUY

Strong visibility on cargo

Long term contracts for coal and crude cargo at Mundra; rising market share in container cargo

Incremental cargo from commissioning of Hazira and Dahej Ports to add to volumes

Strong earnings profile

Expect 21% CAGR in earnings over FY13-15; Driver will be strong growth in cargo at various assets

Initial losses from newer assets to peak in FY14

Return profile to improve – expect 450bp improvement in RoCE

Leverage ratios to peak at current levels

Capex intensity across assets to come down

Improved free cash generation to reduce leverage to 0.6x by FY15E from 1.7x in FY13

Valuations attractive

12.7x consolidated FY15 earnings and 9.5x EV/EBIDTA

Earnings don’t fully reflect Strategic value of SEZ land bank

High entry barriers in the business protect medium-long term returns in the business

DCF based fair value of Rs185 provides strong upside potential

Top Buy/Sell

Infrastructure




Top Buys

Adani Port & SEZ 145 290 11.4 20.0 12.7 9.5 2.7 23.3 13.4 185 OP

IRB Infra 78 26 14.1 (5.3) 5.5 6.7 0.7 12.5 10.1 147 OP

Jaiprakash Associates 38 80 6.8 79.2 5.6 6.2 0.4 8.0 10.2 89 OP

Top Buy/Sell

Note: Financials based on FY15 Estimates; Price as on 7th October 2013

Metals

NMDC: BUY

Volume growth on track

• Opening of new deposits (Deposit 11-B) and ramp-up of existing operations (Kumaraswamy) to aid volume growth story.

We expect sales volume to grow at a 9% CAGR over FY13-15E.

• Any positive development on rebuilding of slurry pipeline of Essar will aid to volume growth

Pricing power to improve over the medium term

• While near term realization has been under pressure on declining international prices and lower demand from domestic

sponge iron players, we expect a prices (especially for fines) to increase over medium term

• Given that NMDC is the only large player outside Orrisa, any supply constraint on adverse regulatory news flow will improve

overall pricing power

Higher dividend payout; Strong balance sheet health

• NMDC has a net cash of Rs53/share (~46% of current market cap), which is expected to increase to Rs62/share by FY15

(53.3% of current market cap).

• Higher dividend payout of Rs7/share in FY13, makes NMDC a ~6% dividend yield stock (at CMP). We expect higher

payout to continue, as company is expected to generate positive FCF, despite a capex of Rs3bn p.a in steel plant.

Key risks: a) lower international iron ore prices b) delays in ramp-up of Deposit 11-B and Kumaraswamy

Top Buy/Sell

Metals

Hindalco: SELL

Domestic aluminum - volume growth on track but margins a concern

We expect a base case RoCE of 5% for Mahan project, given (a) delays at Utkal refinery (b) lack of captive coal till FY16 (c)

cost escalations at Mahan smelter and Utkal refinery

Declining linkage availably and lower LME Aluminum prices to result in declining EBIT margins for existing operations ( as

evident from a 956bps yoy decline in FY13 EBIT margins which came at 10.6%)

Benefits of volume growth at Novelis – some time away

Novelis recently guided for a flat to lower yoy EBITDA in FY14, despite 5-10% volume growth

Narrowing LME-Scrap spread, as evident from recent contracts in North America which were signed at lower conversion

premiums

Rising leverage – our biggest concern

Rising capex intensity and lower operating cash flows (both at standalone aluminum operations and Novelis) has resulted

in a Rs130bn rise in net debt to Rs457bn (Mar-13).

We expect net debt to further rise to Rs503bn by FY14 (Adj. net gearing of 2x).

Key risks: a) higher LME prices b) improving recycling spreads resulting in margin expansion at Novelis c) a faster than expected

ramp-up of Mahan coal block

Top Buy/Sell

Metals




Top Buys

NMDC 123 488 15.7 (1.0) 7.8 3.8 1.5 19.9 21.9 140 OP

Top Sell

Hindalco Industries 122 233 14.0 (5.9) 8.7 7.1 0.6 6.7 7.3 85 UP

Top Buy/Sell


October 2013

Oil & Gas

RIL: BUY

Material downstream expansion to add US$130bn to consolidated EBITDA by FY16E, growth of ~45% over FY13 levels

Upstream segment a relatively minor portion of value; further negative news flow or surprises/delays in gas price hike unlikely to affect

value by more than Rs40-50/sh (<5% of our TP)

We believe that refining margins unlikely to moderate too much from here, pace of capacity additions is faltering which should help

keep complex margins elevated

Current valuations factor in pessimism on upstream without looking at long term benefits from US$12bn downstream expansion,

which should drive a 11% CAGR in earnings over FY14-16E and reverse slide in return ratios

HPCL: SELL

Heavily dependant on subsidies to report profits; even a 15-20% yoy reduction in gross subsidies over FY14E -does not change this

dependence

Operationally the worst among the three OMCs, with GRMs of US$2.58/bbl in the quarter, more than 35% lower than BPCL

No other segment to hedge against subsidy burden unlike BPCL (upstream) and IOCL (petchem)

EV/E based TP of Rs186/sh, implying EV/E of 9.8x FY14E

Top Buy/Sell

Oil & Gas

Top Buy/Sell




Top Buys

Reliance Industries 844 2,760 79.7 11.7 10.6 7.2 1.3 12.5 10.3 1,013 OP

Top Sell

HPCL 193 65 42.5 152.2 4.5 12.3 0.4 9.8 3.0 186 UP


October 2013

Pharmaceuticals

Dr. Reddy’s Labs : BUY

DRL is one of the most competent players in the US generics market with a proven track record of commercializing complex generics

like Isotretenoin, Fondaparinux, Tacrolimus, Metoprolol Succinate, Lansoprazole, Omeprazole OTC etc over the last three years and a

strong pipeline.

• A slew of recent launches (e.g. Zenatane, gDacogen, gAzacitidine, gReclast and gZometa (potential sales of US$150m in

FY14) has allayed concerns over FY14 growth.

• Likely deferral of niche launches to FY14 should improve FY14 US business growth contrary to earlier expectations.

• 31 products in DRL’s portfolio are ranked among the top 3 in terms of market share (IMS Aug-12).

• DRL filed two ANDAs in Q1FY14. Sixty-four ANDAs are awaiting USFDA approval, of which 38 are Para IVs and eight have FTF

status.

• DRL has built up an enviable DMF filing portfolio over the past 3-4 years… indicative of future portfolio.

DRL’s focus on stepping up R&D and filing high-value and complex products like gCapoxone is positive

DRL is the only pharma player which has not reflected weaker currency gains in FY13 earnings due to aggressive hedging; If INR

stays at current levels, DRL could realize at least Rs57-58/$ in FY14. This can substantially prop up earnings over the next few

quarters.

While Q1 disappointed, we see recovery in PSAI and scale-up of recent niche US launches.

At CMP, the stock trades at ~18x FY15E, a sharp discount to most large peers. Also, given the return ratios of >20% and a net-cash

balance sheet, valuations remain attractive

DRL remains our top pick in the Indian pharma space.

Top Buy/Sell

Pharmaceuticals

Cipla : BUY

FY13 is an inflection point in Cipla’s growth trajectory with a change of guard at the top management (Dr Hamied stepping down from

MD role and new CEO taking executive control) after a series of senior-level hirings over the last couple of years

While the management has not been vocal about the contours of these changes, Cipla’s focus on revitalizing business and

enhancing profitability has begun delivering returns. The ~$512m proposed acquisition of Cipla Medpro underlines this new

aggressive growth mindset.

With ~16% CAGR over CY11-16E (IMS), EMs will be the primary driver of global generics. Cipla’s focus/ presence in EMs (~80% of

FY15E sales; including India) and management efforts to enhance control over the distributor-driven EM business model, we believe

Cipla is the best placed Indian company to play the EM opportunity.

Further rationalization of low-margin business, increased focus on profitability, stress on balance sheet improvement, willingness to

look at front-ends, and emphasis on lateral hiring stands out among the company’s growth strategies.

Cipla reported strong Q1FY14 revenue growth given new pricing policy and strike in Maharashtra and Q1FY13 had exclusivity profits,

we remain positive on the potential of Cipla’s evolving business model.

While a strong EM footprint should provide a growth anchor, Cipla’s relatively smaller US / EU businesses can deliver material upside

as R&D capabilities get leveraged in niche spaces.

Expect healthy double-digit revenue growth in FY14 on an organic basis, driven by multiple factors like scale-up in the EU front-end

business, approvals of a couple of niche opportunities in the US etc.

Building in CMP consolidation, a weak rupee and the new pricing policy, we expect 12% CAGR (19% CAGR over FY12-15) in Cipla’s

earnings over FY13-15E.

At ~18x FY15E earnings, valuations appear attractive. Maintain Outperformer with a price target of Rs480 (20x FY15E EPS)

Top Buy/Sell

Pharmaceuticals

Glenmark Pharma : BUY

After effectively addressing investor concerns on balance sheet issues, Glenmark’s strong FY13 operating performance (36% yoy

EBITDA growth) and guidance of 20% yoy growth in FY14 is reflective of the potential of its generics business model

We expect profitability to steadily improve hereon as investments in growth begin to pay off across geographies led by the US and

India

• In the US, we expect the niche pipeline to drive steady growth (11 OCs, 19 dermatology products already approved, another

7-8 awaiting approval); FTFs will continue to provide further upside

• In India, Glenmark remains among the fastest growing top-20 players and will continue to post double-digit growth

• In the RoW markets, Glenmark is leveraging niche therapies in dermatology, respiratory and oncology to drive growth (37%

growth in FY13); Latam is also set for a turnaround

Expected scale-up of ROCE to 19-20% (despite Rs1.7bn-1.8bn of NCE R&D spend) over FY13-15E (from 11-12% over FY09-11)

builds a strong case for re-rating of the generic business

Further, significantly value-accretive newsflow on the NCE pipeline possible over next 12-18 months

Adjusted for NCE R&D spend, Glenmark’s generics business trades at effective valuations of ~17x FY15E with >20% return ratios

for FY15E; the stock is trading at a discount to peers.

Top Buy/Sell

Pharmaceuticals

Ipca Labs : BUY

A competitive mid-cap business with superior API capabilities and a scalable, diversified global formulations business. The company

has grown 17%/ 34% CAGR in terms of revenue/ PAT over FY09-13.

With Indore SEZ getting USFDA approval and strong ANDA pipeline and sustainable UK business recovery, Ipca is set to embark on

the next phase of growth. Ipca has filed 35 ANDAs, and has received 15 approvals and commercialized eight products.

The company seeks to deploy a higher proportion of cashflows into R&D (spend almost doubled in FY13; e.g. initiation of a 505(b)(2)

project in FY13); so the quality of growth should improve further.

Domestic business grew ~12% in Q1FY14 despite implementation of new pricing policy; we expect 16% growth in FY14 as

restructuring initiatives have stabilized and productivity starts to improve. Ipca has gained market share in key therapies like pain

management and cardiology.

Given Ipca’s significant net foreign exposure, currency tailwinds would accelerate earnings momentum; it has hedged ~26% of its

net foreign exchange earnings (NFE) for FY14 at an exchange rate of Rs58/$. FY15 NFE could be ~$300m – If INR stays ~60/share;

gains could be meaningful.

Limited competition, low-cost inventory and likely approval of new products will help expand the company’s institutional malaria

business. Revenue potential of Rs7-8bn over the next five years.

At ~15x FY15E PE, Ipca is our top mid-cap pick in the space.

Top Buy/Sell

Pharmaceuticals

Sun Pharma: BUY

Sun has established a strong medium-term growth platform for all its three core generic business segments. It is now working

to evolve into a global specialty pharma company

• Sun’s move to acquire DUSA, a niche dermatology business, marks its foray into the high-potential branded drugs space in

the US

Sun remains one of the most competent players in the domestic business; slowly creating a solid business in RoW by replicating

the India template

• Taro: Taro had had a dream run before 4QFY13 with several quarters of price-led growth, but the management has been

sounding a note of caution. We estimate Taro’s revenues and profits to decline over FY14-15.

US business: Sun (including Taro) has filed 453 ANDAs (adjusting for dropped filings), received 320 approvals and is awaiting

approvals for 133 products (including niche products like Astelin nasal spray). Likely one of the largest Para IV portfolios

The company sees limited impact of the new pricing policy in the domestic segment; the worst-case impact is Rs400m-500m

While near-term upsides could be limited given the recent upmove, we recommend buying into weakness. Reiterate

Outperformer.

Key risk to our call: Sharp deterioration in profitability contribution from Lipidox and Doxycycline.

Top Buy/Sell

Pharmaceuticals




Top Buys

Cipla 440 354 24.0 12.7 18.3 10.5 2.9 16.8 19.3 480 OP

Dr Reddy's Lab 2,386 404 129.0 16.8 18.5 12.0 3.9 22.9 19.6 2,451 OP

Glenmark Pharma 571 155 32.7 20.1 17.4 12.1 3.6 22.8 20.9 605 OP

IPCA Laboratories 704 88 45.4 33.0 15.5 10.2 3.6 26.2 27.6 772 OP

Sun Pharma 605 1,252 25.0 20.0 24.2 16.9 5.3 24.6 29.6 580 OP

Top Buy/Sell


October 2013

Power Utilities

Jaiprakash Power Ventures: BUY

High Fuel Security

• Operational hydropower capacity of 1,700MW; Vishnuprayag affected by floods - earning risk in near term limited by insurance

and PPA provisions

• Coal linkage for 500MW of Bina Thermal Power Station and 1980MW of Bara Thermal Power Station

• Coal blocks linked to upcoming Nigrie Thermal Power Station have received all the clearances; Amelia (North) to start

production in September 2013 and Dongri Tal – II in 4QFY14.

Fund raising eases funding concerns

• Immediate funding concerns obviated with

• Raising of Rs9.5bn from QIP in February 2013

• Rs10bn as a corporate loan - sufficient to meet immediate debt and equity commitments

• Further, we expect additional funds to be raised through securitization of operating power plants to meet debt and equity

commitments

Earnings to grow at 30%CAGR over FY13-FY15E

Commissioning of 500MW at Bina Thermal Power Station

Commissioning of 1.3GW at Nigrie Thermal Power Station in FY14

Valuations attractive at PE of ~5x FY15E and P/BV of 0.6xFY15E

SOTP based price target of Rs41/share

Top Buy/Sell

Power Utilities

PTC: BUY

Trading volumes should remain strong

• 26% CAGR growth in trading volume over FY13-FY15E

• Long term capacity of ~ 1.4GW and ~6.6GW expected to commence operation in FY14 and FY15 respectively

• Resolution of dispute with Karcham to aid ~2.5BU

• L1 bidder in UP, Rajasthan and Tamil Nadu bids

No tolling price risk

• Renegotiation of tolling arrangement into trading arrangement ( a part of upside from better tariff will be captured)

• High cost of supply from these power plants @Rs4.90/unit

• No fuel price risk and foreign exchange risk on PTC India

Receivables from UP and TN are reducing

• UP DISCOM financial restructuring to help in payment

• TN dues have reduced to Rs2.8bn – expect to be paid entirely by December

• Hence , yield on cash and working capital should improve; thereby boosting earnings

Standalone Earnings to grow at 10%CAGR over FY13-FY15E

• Aided by availability of power from long term PPA’s

• Tolling arrangement was attractive in near term

Valuations at PE of 9.7x FY15E and P/BV of 0.6xFY15E

SOTP based price target of Rs58share

Top Buy/Sell

Power Utilities




Top Buys

Jaiprakash Power 16 42 3.0 58.1 5.4 6.0 0.6 11.5 10.2 41 OP

PTC 51 15 5.2 10.0 9.7 (1.8) 0.6 6.4 8.4 58 OP

Top Buy/Sell


October 2013

Telecom

Idea Cellular: BUY

Prospects for Indian wireless sector set to improve

Competition has been rational - focus on profitable growth, partial/ full exit of fringe players and prudent participation in

spectrum auctions

Regulatory environment is improving at the margin with authorities focused on catalyzing industry growth

Idea Cellular is a pure play on India wireless

Idea derives 90%+ revenues/ Enterprise value from the India wireless business

~2% uptick in realization potentially drives ~5% increase in EPS (2-3% in case of Bharti Airtel)

Most attractive asset in India wireless

Pan India footprint with top3 presence in 50% of the service areas

Fastest growing player with meaningful revenue market share of 16%+ and strong brand positioning

Relative valuation premium to sustain

Market share gains and improving profitability to drive healthy EPS growth (39% CAGR FY13-15E)

Strong execution and market share gains to support premium valuation and drive stock performance

Key risks: a) renewed competitive vigor post Reliance JIO entry, b) cancellation of 3G roaming pacts

Top Buy/Sell




Idea Cellular 174 573 6.2 39.7 27.8 7.0 3.2 12.0 11.7 200 OP


October 2013

Disclaimer

This document has been prepared by IDFC Securities Ltd (IDFC SEC). IDFC SEC and its subsidiaries and associated companies are a full-service, integrated investment banking, investment management and brokerage group. Our research analysts

and sales persons provide important input into our investment banking activities.

This document does not constitute an offer or solicitation for the purchase or sale of any financial instrument or as an official confirmation of any transaction.

The information contained herein is from publicly available data or other sources believed to be reliable. While we would endeavor to update the information herein on reasonable basis, the opinions and information in this report are subject to change

without notice and IDFC SEC, its subsidiaries and associated companies, their directors and employees (“IDFC SEC and affiliates”) are under no obligation to update or keep the information current. Also, there may be regulatory, compliance, or

other reasons that may prevent IDFC SEC and affiliates from doing so. Thus, the opinions expressed herein should be considered those of IDFC SEC as of the date on this document only. We do not make any representation either express or

implied that information contained herein is accurate or complete and it should not be relied upon as such.

The information contained in this document has no regard to the specific investment objectives, financial situation or particular needs of any specific recipient. This document is prepared for assistance only and is not intended to be and must not

alone be taken as the basis for an investment decision. The investment discussed or views expressed in the document may not be suitable for all investors. Investors should make their own investigations as they deem necessary to arrive at an

independent evaluation of an investment in the securities of companies referred to in this document (including the merits and risks involved) and investment decisions based upon their own financial objectives and financial resources. Investors

assume the entire risk of any use made of the information contained in the document. Investments in general involve some degree of risk, including the risk of capital loss. Past performance is not necessarily a guide to future performance and an

investor may not get back the amount originally invested.

Foreign currency-denominated securities are subject to fluctuations in exchange rates that could have an adverse effect on the value or the price of, or income derived from, the investment. In addition, investors in securities, the values of which are

influenced by foreign currencies, effectively assume currency risk.

Affiliates of IDFC SEC may have issued other reports that are inconsistent with and reach different conclusions from, the information presented in this report.

This report is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be

contrary to law, regulation or which would subject IDFC SEC and affiliates to any registration or licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in all jurisdictions or to a certain

category of investors. Persons in whose possession this document may come are required to inform themselves of, and to observe, such applicable restrictions.

Reports based on technical analysis centers on studying charts of a stock's price movement and trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's fundamentals.

IDFC SEC and affiliates, their directors, officers, and employees may from time to time have positions in, purchase or sell, or be materially interested in any of the securities mentioned or related securities. IDFC SEC and affiliates may from time to

time solicit from, or perform investment banking, or other services for, any company mentioned herein. Without limiting any of the foregoing, in no event shall IDFC SEC, any of its affiliates or any third party involved in, or related to, computing or

compiling the information have any liability for any damages of any kind including but not limited to any direct or consequential loss or damage, however arising, from the use of this document. Any comments or statements made herein are those of

the analyst and do not necessarily reflect those of IDFC SEC and affiliates.

This document is subject to changes without prior notice and is intended only for the person or entity to which it is addressed and may contain confidential and/or privileged material and is not for any type of circulation. Any review, retransmission, or

any other use is prohibited.

Though disseminated to all the customers simultaneously, not all customers may receive this report at the same time. IDFC SEC will not treat recipients as customers by virtue of their receiving this report.

IDFC Capital (USA) Inc. has reviewed the report and, to the extent that it includes present or past information, it is believed to be reliable, although its correctness cannot be assured.

The analyst certifies that all of the views expressed in this research report accurately reflect his/her personal views about any and all of the subject issuer(s) or securities. The analyst certifies that no part of her compensation was, is, or will be directly

or indirectly related to the specific recommendation(s) and/or views expressed in this report.

Additional Disclosures of interest:

1. IDFC SEC and its affiliates (i) may have received compensation from the company covered herein in the past twelve months for investment banking services; or (ii) may expect to receive or intends to seek compensation for investment-banking

services from the subject company in the next three months from publication of the research report.

2. Affiliates of IDFC SEC may have managed or co-managed in the previous twelve months a private or public offering of securities for the subject company.

3. IDFC SEC and affiliates collectively do not hold more than 1% of the equity of the company that is the subject of the report as of the end of the month preceding the distribution of the research report.

4. IDFC SEC and affiliates are not acting as a market maker in the securities of the subject company.

Explanation of Ratings:

1. Outperformer : More than 5% to Index

2. Neutral : Within 0-5% (upside or downside) to Index

3. Underperformer : Less than 5% to Index

Copyright in this document vests exclusively with IDFC Securities Ltd.

Analyst Sector/Industry/Coverage E-mail Tel.+91 22 6622 2600

Shirish Rane Co-Head of Research; Construction, Power [email protected] 91-22-662 22575

Nikhil Vora Co-Head of Research; Strategy, FMCG, Media, Retail, Education, Mid-caps [email protected] 91-22-662 22567

Prakash Joshi Oil & Gas, Metals, Mining [email protected] 91-22-662 22564

Nitin Agarwal Pharmaceuticals, Real Estate, Agri-inputs [email protected] 91-22-662 22568

Hitesh Shah, CFA IT Services & Telecom [email protected] 91-22-662 22565

Manish Chowdhary Financials [email protected] 91-22-662 22563

Bhoomika Nair Engineering, Cement, Power Equipment, Logistics [email protected] 91-22-662 22561

Pramod Kumar Automobiles, Auto ancillaries [email protected] 91-22-662 22562

Ashish Shah Construction, Power [email protected] 91-22-662 22560

Abhishek Gupta Telecom, IT services [email protected] 91-22-662 22661

Mohit Kumar, CFA Construction, Power [email protected] 91-22-662 22573

Param Desai Pharmaceuticals, Real Estate, Agri-inputs [email protected] 91-22-662 22579

Probal Sen Oil & Gas [email protected] 91-22-662 22569

Swati Nangalia Media, Alcoholic beverages, Education, Exchanges, Mid-caps [email protected] 91-22-662 22576

Saumil Mehta Metals, Mining [email protected] 91-22-662 22578

Harit Kapoor FMCG, Retail, Paints, Mid-caps [email protected] 91-22-662 22649

Sameer Bhise Financials [email protected] 91-22-662 22635

Nikhil Salvi Strategy, Mid-caps [email protected] 91-22-662 22566

Jay Kale, CFA Automobiles, Auto ancillaries [email protected] 91-22-662 22529

Dharmendra Sahu Database Analyst [email protected] 91-22-662 22580

Equity Sales/Dealing Designation E-mail Tel.+91 22 6622 2500

Tapasije Mishra Group CEO [email protected] 91-22-6622 2601

Anish Damania Head – Institutional Equities [email protected] 91-22-6622 2522

Vishal Purohit Head of Sales [email protected] 91-22-6622 2533

Ashish Kalra Managing Director, Sales [email protected] 91-22-6622 2525

Rajesh Makharia Director, Sales [email protected] 91-22-6622 2528

Kalpesh Parekh Director, Sales [email protected] 91-22-6622 2696

Varun Saboo VP, Sales [email protected] 91-22-6622 2558

Tanvi Dixit AVP, Sales [email protected] 91-22-6622 2595

Chandan Asrani Manager, Sales [email protected] 91-22-6622 2540

Samir Gilani Head of Trading [email protected] 91-22-6622 2535

Mukesh Chaturvedi Director, Sales trading [email protected] 91-22-6622 2512

Viren Sompura SVP, Sales trading [email protected] 91-22-6622 2527

Rajashekhar Hiremath SVP, Sales trading [email protected] 91-22-6622 2516

IDFC Securities US Designation E-mail Telephone

Ravilochan Pola CEO [email protected] 001 646 756 5865

Sanjay Panicker Director [email protected] 001 212 829 4353

84

84 November 2012

www.idfc.com

IDFC Securities

Naman Chambers, C-32, 7th

floor,

G- Block, Bandra-Kurla Complex, Bandra (East),

Mumbai 400 051

INDIA

Tel: +91 22 6622 2600

Fax: +91 22 6622 2501

Our research is also available on Bloomberg and Thomson Reuters

For any assistance in access, please contact [email protected]

IDFC Capital (USA) Inc,

350 5th Avenue,

Suite 4711,

New York

NY 10118

Tel: +1 646 756 5864

Date post:	21-Jan-2016
Category:	Documents
Upload:	1991anurag
View:	95 times
Download:	2 times

Indian Markets-The Story of Chinese Bamboo - Oct13.pdf

Documents