[Kotak] India Daily, September 22, 2014 Bank Banks/Financial Institutions KOTAK INSTITUTIONAL...

For Private Circulation Only. FOR IMPORTANT INFORMATION ABOUT KOTAK SECURITIES’ RATING SYSTEM AND OTHER DISCLOSURES. REFER TO THE END OF THIS MATERIAL.

Kotak Institutional Equities Research [email protected] . Mumbai: +91-22-4336-0000

Contents

Daily Alerts

Company alerts

DCB Bank: An exciting journey ahead

Sector alerts

Energy: Awaiting royal(ty) decisions

INDIA DAILY September 22, 2014 India 19-Sep 1-day 1-mo 3-mo

Sensex 27,090 (0.1) 2.5 7.9

Nifty 8,121 0.1 2.6 8.1

Global/Regional indices

Dow Jones 17,280 0.1 1.6 2.0

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Hang Seng 24,009 (1.2) (4.4) 3.5

KOSPI 2,040 (0.7) (0.8) 3.7

Value traded – India

Cash (NSE+BSE) 280 206 203

Derivatives (NSE) 2,678 2,171 2,842

Deri. open interest 2,176 2,090 2,052

Forex/money market

Change, basis points

19-Sep 1-day 1-mo 3-mo

Rs/US$ 60.8 (2) 14 74

10yr govt bond, % 8.7 - (10) (10)

Net investment (US$ mn)

18-Sep MTD CYTD

FIIs 25 1,239 14,149

MFs 75 126 929

Top movers

Change, %

Best performers 19-Sep 1-day 1-mo 3-mo

CIPLA IN Equity 628.1 1.3 25.8 47.6

BHFC IN Equity 850.9 (1.7) 9.6 46.7

LPC IN Equity 1400.9 1.7 12.0 40.2

DRRD IN Equity 3223.0 0.9 14.0 32.1

MSIL IN Equity 3082.4 1.3 11.9 30.3

Worst performers

JPA IN Equity 33.6 (4.8) (35.2) (52.8)

JSP IN Equity 210.6 (4.7) (28.5) (33.9)

RCOM IN Equity 104.5 (0.7) (14.7) (30.0)

GMRI IN Equity 23.0 0.2 (8.2) (29.2)

RPWR IN Equity 73.7 (1.2) (14.4) (28.3)

For Private Circulation Only. FOR IMPORTANT INFORMATION ABOUT KOTAK SECURITIES’ RATING SYSTEM AND OTHER DISCLOSURES, REFER TO THE END OF THIS MATERIAL.

Kotak Institutional Equities Research [email protected] Mumbai: +91-22-4336-0000

Performance on track and we should see RoEs moving to 15%

We like the progress we are seeing in the bank, especially under the current management, as it

is coming out of a fairly long period of weak operating performance. A conservative approach

on loan mix (40% in mortgage), steady growth (~25% CAGR since FY2010) and focus on costs

has already seen RoEs moving to 15% in FY2014 from -15% in FY2010. Gross NPLs have

declined to 1.8% in 1QFY15 from 9% in FY2010 with a comfortable coverage ratio of ~80%.

Despite being in the business for a few decades, it has a negligible share in the business and we

see this changing. We see DCB as a long-term earnings compounding story. In the medium

term RoEs could be at 14-15% as earnings adjust to a normalized tax rate, but growth is not a

constraint, especially as the bank has demonstrated its ability to tackle the crisis quite well and

raising fresh equity should be comfortable.

Maintain BUY as we see a long period of better-than-average growth

We maintain our BUY rating and value the stock at `100 (from `90). We expect the bank to

deliver RoEs in the range of 14-15% (pre-dilution) and earnings growth of 15% CAGR in the

short term factoring the change in the bank’s tax rate. At our target price, the bank would be

trading at 1.7X book and 12X FY2016E EPS. Post the strong outperformance and valuations

moving at the upper end, we believe that a large part of price appreciation from here would be

dependent on the long-term earnings growth as valuation expansion beyond current levels

looks a bit challenging. DCB remains our preferred small-cap idea.

Weakness on liability profile to persist; asset growth to lead liability profile improvement

The only issue we are less convinced of is improvement on the liability profile. In other words,

while the bank would continue to invest in building its liability profile through branch

expansion, newer products aimed at specific client segments or increasing sales force in this

segment, we are not too convinced that the bank would be able to maintain its CASA ratio at

current levels. In the short term, we believe that asset growth would lead liability profile

improvement. The brand needs to be more firmly established before we see this improvement.

DCB Bank (DCBB) Banks/Financial Institutions

An exciting journey ahead. We maintain our BUY rating on the stock despite the

recent outperformance as we are confident of the growth prospects for the bank. The

bank should be able to deliver RoEs in the range of 14-16% in the short term and

earnings growth of 15% CAGR for FY2014-16E. DCB is entering an exciting phase in its

journey as the baggage from the past has been addressed and growth is likely to take

precedence. We revise our TP to `100 (from `90).

BUY

SEPTEMBER 22, 2014

UPDATE

Coverage view: Attractive

Price (`): 90

Target price (`): 100

BSE-30: 27,090

M.B. Mahesh, CFA [email protected]

Mumbai: +91-22-4336-0886

Nischint Chawathe [email protected]

Mumbai: +91-22-4336-0887

Geetika Gupta [email protected]

Mumbai: +91-22-4336-0888

DCB Bank

Stock data Forecasts/Valuations 2014 2015E 2016E

52-week range (Rs) (high,low) EPS (Rs) 6.9 7.9 9.5

Market Cap. (Rs bn) EPS growth (%) 13.5 15.1 20.3

Shareholding pattern (%) P/E (X) 12.6 11.0 9.1

Promoters 18.5 NII (Rs bn) 3.7 4.9 5.5

FIIs 14.5 Net profits (Rs bn) 1.5 1.7 2.0

MFs 8.2 BVPS 48.0 55.3 64.0

Price performance (%) 1M 3M 12M P/B (X) 1.8 1.6 1.4

Absolute 2.7 16.4 85.7 ROE (%) 14.8 14.5 14.4

Rel. to BSE-30 0.0 8.2 41.4 Div. Yield (%) 0.0 0.0 0.0

Co mpan y d a ta an d va lua t io n s ummary

90-44

21.8

DCB Bank Banks/Financial Institutions

KOTAK INSTITUTIONAL EQUITIES RESEARCH 3

Retail and SME segments drive overall loan portfolio – trend likely to continue

DCB has been building a low-risk book under the current management as a conscious

strategy after two cycles of high NPLs. Exhibit 1 gives the broad loan portfolio, in which

retail comprises ~45%, corporate ~25% of loans and SME loans ~16% while agriculture

~15%. Over the past year, the bank has been cutting back its exposure in the SME portfolio

through a combination of lower disbursements as well as reducing the average ticket size,

primarily to reduce risks in this portfolio considering the stress in the system. There has been

significant investment in the agriculture segment considering the need to meet priority-

sector requirements.

We don’t see a material change in the loan portfolio over the medium term. The

management remains cautious of the large corporate and SME portfolio while focusing on

lending in the retail segment, primarily through the mortgage portfolio. We note that the

mortgage book is not pure housing loans but includes LAP (loans against property) as well.

As per our understanding, LAP contributes ~60% of the overall mortgage book and this acts

as a better substitute to lending in the SME portfolio where the strength of the underlying

collateral is a bit weaker (inventory, book debts, fixed assets, etc.). We do believe that the

management could refocus on lending in the SME portfolio sometime soon as the

confidence in the economy and cash flows for the borrower shows improvement. However,

we don’t see a major change in the large corporate portfolio. The balance sheet does not

have the strength at this time to absorb any large default, in our view.

Exhibit 1: Retail is the main focus area for the bank Break-up of loans, March fiscal year-ends, 2010-1QFY15 (%)

20 10 20 11 20 12 20 13 20 14 1Q FY15

Corporate banking 32.0 26.0 22.6 23.8 25.7 23.9

SME and MSME 17.0 24.0 27.2 22.6 16.6 16.2

Retail 26.0 30.0 35.1 42.0 43.5 45.5

Mortgage loans 12.0 25.0 29.4 36.4 38.4 40.0

Vehicle loans 8.0 2.0 2.1 1.7 2.1 2.3

Others 3.0 2.8 3.7 3.9 3.0 3.1

Agriculture 25.0 20.0 15.2 11.6 14.2 14.5

Source: Company, Kotak Institutional Equities

Cost-income ratio should show a steady improvement

We like the management’s focus on controlling costs, which has resulted in a steady decline

in the cost-income ratio or cost-average assets ratio. Overall costs clocked 12% CAGR since

FY2010 as compared to revenue growth of ~20% CAGR, the slowest we have seen across

banks without any large change on headcount. The cost-income ratio, which was ~80% in

FY2010, declined to 63% in FY2014 and we expect it to decline further to ~55% over the

next few years. With a comfortable view on the cost ratio improvement, the bank has

started to invest in branches to improve its liability profile and restart balance sheet growth.

Since FY2012, the bank has started to expand branch network and it is currently at 134

(1QFY15) as compared to ~80 branches in FY2010. We expect branch expansion to be at

15-20% CAGR depending on the revenue growth of the bank.

Banks/Financial Institutions DCB Bank

4 KOTAK INSTITUTIONAL EQUITIES RESEARCH

Exhibit 2: Cost-income ratio to decline to ~55% by FY2016E Cost-income and cost-assets, March fiscal year-ends, 2010-17E (%)

3.3 3.2 3.1 2.8 2.6 2.6 2.4 2.3

81

71 75

69 63

57 57 54

0.0

0.8

1.6

2.4

3.2

4.0

0

20

40

60

80

100

2010

2011

2012

2013

2014

2015E

2016E

2017E

Cost to assets (RHS) Cost-income (LHS)

Source: Company, Kotak Institutional Equities estimates

Exhibit 3: Operating expenses to post 12-14% CAGR Operating expenses and growth, March fiscal year-ends, 2010-17E

(30)

(20)

(10)

0

10

20

0

1,000

2,000

3,000

4,000

5,000

2010

2011

2012

2013

2014

2015E

2016E

2017E

Operating expenses (LHS)

Opex growth (RHS) (%)(Rs mn)


Exhibit 4: DCB’s cost-income ratio is high compared to its peers March fiscal year-ends, 2010-17E (%)

20 10 20 11 20 12 20 13 20 14 20 15 E 20 16 E 20 17E

City Union Bank 39.3 37.5 39.6 41.7 45.2 44.9 44.3 43.5

DCB 80.6 71.4 74.6 68.6 62.9 57.4 57.2 54.4

Federal Bank 34.9 36.9 39.4 44.9 49.3 47.9 46.0 45.4

IndusInd Bank 51.1 48.2 49.4 48.8 45.7 46.3 45.9 45.8

ING Vysya Bank 55.7 61.8 59.1 56.2 57.0 53.3 48.2 44.6

Karnataka Bank 59.7 60.7 52.7 51.2 56.0 55.5 53.7 53.3

Karur Vysya Bank 42.9 41.8 42.7 47.3 54.7 50.7 47.2 44.8

South Indian Bank 47.1 46.8 48.7 47.5 50.0 54.0 53.3 52.7

Yes Bank 36.7 36.3 37.7 38.4 39.4 41.2 41.7 42.2




Exhibit 5: Bank has started to expand branches after a pause Branches, March fiscal year-ends, 2010-17E (#)

83 83 84 94

130155

180205

0

50

100

150

200

250

2010

2011

2012

2013

2014

2015E

2016E

2017E


Exhibit 6: Opening of ATMs has been on the slower side ATM, March fiscal year-ends, 2010-17E (#)

110134

320272

238288

338388

0

80

160

240

320

400

2010

2011

2012

2013

2014

2015E

2016E

2017E


Improvement in liability profile to take time as the bank is still quite small and

asset growth is strong

We take a conservative outlook on the ability of the bank to build a liability profile. It is only

in the past couple of years that the current management has been in a position to expand its

branch network and build a brand. However, with the balance sheet gaining strong comfort

from a lower impairment ratio perspective, we think that the initial leg would not see a

great improvement in the liability profile. If anything, there is a reasonable chance of a

marginal deterioration in the short term as the focus would be primarily to grow balance

sheet at a lot faster pace. We note that the bank has been witnessing an improvement in

credit ratings, which implies that the bank could be a lot more inclined to fund medium-

term growth through wholesale borrowings.

With more investments in infrastructure (physical and human), we should see this improving

at a very slow pace in the medium term

Exhibit 7: The share of CASA and retail deposits has fallen over the past year Break-up of retail deposits, March fiscal year-ends, 2009-14 (%)

20 10 20 11 20 12 20 13 20 14

Current 16.2 15.8 13.2 10.8 10.3

Savings 19.2 19.4 18.9 16.4 14.7

CASA 35 .4 35 .2 32.1 27.2 25 .0

Term deposits 64.6 64.8 67.9 72.8 75.0

NRI deposits 4.9 6.2 8.0

Retail deposits 81.5 81.2 84.4 77.4 77.0

Wholesale deposits 18.5 18.8 15.6 22.6 23.0




Asset quality shows limited concern as gross NPLs have declined in recent years

In an environment where the stress levels for the banking sector have increased, DCB has

been able to report a fairly consistent improvement in its impairment ratios. As of 1QFY15,

gross NPLs were at 1.8% of loans as compared to 9% in FY2010 while net NPLs are

currently at 1% as compared to 3% in FY2010. The bank is currently seeing a marginal

recovery from the NPLs that it reported a few years ago. A large part of the decline in the

ratios could be attributed to the shift in the loan mix strategy towards the mortgage

segment and hence, slippages have consistently been at 1.4-1.5% of the overall loan book.

On the other hand, the bank has been aggressively writing off loans resulting in headline

gross NPL ratios to decline.

The only segment that is probably under stress is the SME portfolio where the gross NPLs are

at ~7% of loans as the bank is cutting back exposure and actively reducing the fresh ticket

size for the borrower. With a steady improvement in the economy, one should expect

limited stress from this portfolio.

We note that the bank has been steadily reducing the size of the large 20 exposures as the

ability of the bank to withstand a large corporate default is still at its best. The bank does

not have the net worth to manage a big slowdown in the economy as default in any of

these customers could have a material impact on the balance sheet of DCB. The contribution

of the top 20 exposures has declined to 11% from 22% in FY2010. We are likely to see this

probably remaining at closer to current levels though we believe that the bank is a lot more

comfortable in growing the loan book in the retail and SME segment as compared to the

large corporate book.

Our broad view on impairment levels and its subsequent impact on credit costs remain

unchanged. We expect NPLs to show further improvement though not at the same levels

that we saw in FY2014. We believe that the negative surprise from the mortgage portfolio is

unlikely while the bank is focusing on improving its SME portfolio. We expect loan-loss

provisions to decline from current levels (no one-off in subsequent quarters).

Exhibit 8: NPLs have increased in SME loans in recent quarters Segment-wise NPLs, March fiscal year-ends, 2010-1QFY15 (%)

20 10 20 11 20 12 20 13 20 14 1Q FY15

Vehicle loans 24.1 2.4 2.6

Corporate loans 5.9 5.7 6.0 3.3 0.9 0.7

SME loans 2.2 1.3 1.0 3.8 6.2 6.7

Mortgage loans 1.3 0.6 0.9 0.8 0.9

Gross NPL 8.7 5.9 4.4 3.2 1.7 1.8

Net NPL 3.1 1.0 0.6 0.7 0.9 1.0

Provision coverage 64.2 83.5 87.0 76.6 46.1 45.5

Provision coverage (inc w/o) 91.2 85.7 80.5 79.1




Exhibit 9: Gross NPLs have been steadily declining since FY2010 Gross and net NPLs, March fiscal year-ends, 2010-17E (%)

8.7

5.9

4.4

3.2

1.7 1.6 1.5 1.5

3.1

1.0 0.6 0.7 0.9 1.1 1.0 1.0

0

2

4

6

8

10

2010

2011

2012

2013

2014

2015E

2016E

2017E

Gross NPL (LHS) Net NPL (LHS)


Exhibit 10: Slippages normalized to 1.4% over FY2011-14 Slippages and credit costs, March fiscal year-ends, 2010-17E (%)

5.6

1.4 1.5 1.4 1.4 1.4 1.3 1.2

3.4

1.3

0.6 0.3 0.5 0.7

0.4 0.4

0

1

2

4

5

6

2010

2011

2012

2013

2014

2015E

2016E

2017E

Slippages Credit costs


We expect RoE of ~14-15%; tax benefit to unwind from FY2015

We expect DCB to deliver RoE of ~14-15% (pre-dilution) and RoAs of 1.0-1.1% by FY2015.

We expect overall earnings CAGR of 15% and loan CAGR of 25% over FY2014-17. We

expect PBT growth of over 30% as we are building tax rate to normalize over the next two

years. We are not too concerned about the underlying slowdown impacting growth

assumptions given the small size of the balance sheet. A key determining factor for growth

will be (1) a sharp rise in stress levels of loans and (2) DCB’s inability to raise retail deposits,

including CASA – both are largely addressed, in our view.

From a cost perspective, we expect the overall cost-income ratio to decline to ~55% by

FY2015. We see credit costs at 40-60 bps of loans with any improvement in macro resulting

in further improvement in return ratios.

We are not considering a dilution in our estimates though we expect the bank to dilute

capital as the promoters are looking to reduce their stake to <15% (currently at 18%) to

meet the regulatory requirements. The timing of the dilution is unclear given that the bank is

well-capitalized from a tier-1 ratio perspective at 13%.



Exhibit 11: We expect RoE and RoA to improve to the industry

average RoE and RoA, March fiscal year-ends, 2009-16E (%)

3.9

8.0

11.6

14.8 14.5 14.4 15.0

0.3

0.7

1.0

1.3 1.2

1.1 1.1

-

0.3

0.6

0.9

1.2

1.5

-

4

7

11

14

18

2011

2012

2013

2014

2015E

2016E

2017E

RoE (LHS) RoA (RHS)


Exhibit 12: Loan growth will be above industry average Revenue and loan growth, March fiscal year-ends, 2009-16E (%)

21

10

21

26 29

15 19

23 24 25

24 24 25

23

10

14

18

22

26

30

-

6

12

18

24

30

2011

2012

2013

2014

2015E

2016E

2017E

Revenue growth (LHS) Loan growth (RHS)


Exhibit 13: DCB trades at 1.6X one-year forward book One-year forward PBR, September 2010- September 2014 (X)

0.0

0.5

1.0

1.5

2.0

2.5

Sep-1

0

Jan-1

1

May-

11

Sep-1

1

Jan-1

2

May-

12

Sep-1

2

Jan-1

3

May-

13

Sep-1

3

Jan-1

4

May-

14

Sep-1

4


Exhibit 14: Discount to peers has reduced in recent quarters DCB trading premium to private banks, 2010-14 (X)

0.0

0.2

0.4

0.6

0.8

1.0

Sep-1

0

Mar-

11

Sep-1

1

Mar-

12

Sep-1

2

Mar-

13

Sep-1

3

Mar-

14

Sep-1

4




Exhibit 15: DCB - change in estimates March fiscal year-ends, 2015-17E (` mn)

20 15 E 20 16 E 20 17E 20 15 E 20 16 E 20 17E 20 15 E 20 16 E 20 16 E

Net loan growth (%) 24.0 25.4 23.0 24.0 25.4 23.0

Loans (Rs bn) 101 127 156 101 127 156 — — —

Total income 6,518 7,469 8,895 6,518 7,469 8,895 — — —

Net interest income 4,861 5,451 6,408 4,861 5,451 6,408 — — —

NIM (%) 3.5 3.2 3.1 3.5 3.2 3.1

Other income 1,657 2,018 2,487 1,657 2,018 2,487 — — —

Fee income 1,162 1,372 1,646 1,162 1,372 1,646 — — —

Treasury income 300 390 520 300 390 520 — — —

Operating expenses 3,740 4,273 4,843 3,740 4,273 4,843 — — —

Employee expenses 1,868 2,131 2,423 1,868 2,131 2,423 — — —

Other cost 1,873 2,141 2,420 1,873 2,141 2,420 — — —

Loan loss provisions 593 398 565 593 398 565 — — —

PBT 2,095 2,708 3,398 2,095 2,708 3,398 — — —

Tax 377 731 1,019 377 731 1,019 — — —

N et pro f it 1,718 1,9 77 2,378 1,718 1,9 77 2,378 — — —

% growth yoy 13.5 15.1 20.3 13.5 15.1 20.3

PBT-treasury+provisions 2,478 2,807 3,533 2,478 2,807 3,533 — — —

% ch an g eO ld e s t ima te sN ew e s t ima te s




Exhibit 16: DCB: Key ratios and growth rates March fiscal year-ends, 2012-17E (%)

20 12 20 13 20 14 20 15 E 20 16 E 20 17E

Gro wth ra te s (%)

Net loan 23.7 24.6 23.6 24.0 25.4 23.0

Total Asset 17.5 30.0 14.6 23.0 20.9 19.3

Deposits 12.9 32.0 23.5 25.2 23.1 20.7

Current (5.3) 7.2 6.7 11.7 37.9 33.7

Savings 9.7 14.8 18.2 17.2 23.1 20.7

Net interest income 20.4 24.9 29.5 32.0 12.1 17.6

Loan loss provisions (45.0) (27.8) 78.9 67.4 (32.8) 41.8

Total other income (8.4) 13.9 18.5 19.5 21.8 23.2

Net fee income 19.1 13.5 13.2 15.0 18.0 20.0

Net capital gains (53.5) 18.2 61.5 33.4 30.0 33.4

Net exchange gains 21.0 21.0 21.0 35.0 35.0 30.0

Operating expenses 14.6 11.6 15.9 17.2 14.2 13.3

Employee expenses 17.1 10.7 13.9 18.9 14.1 13.7

Key ra t io s (%)

Yield on average earning assets 9.4 9.6 9.7 10.0 9.7 9.6

Yield on average loans 11.2 12.0 11.8 11.7 11.5 11.2

Yield on average investments 7.2 6.7 7.0 6.8 6.7 6.6

Average cost of funds 6.9 7.2 7.1 7.1 7.0 6.9

Interest on deposits 6.8 7.3 7.1 7.1 7.1 7.0

Spread 2.5 2.4 2.6 2.9 2.7 2.6

N e t in te re s t in co me /ea rn in g a s s e t s 3.0 3.0 3.2 3.5 3.2 3.1

Spreads on lending business 4.3 4.8 4.7 4.6 4.5 4.3

Spreads on lending business (incl. fees) 6.0 6.3 6.1 5.9 5.7 5.4

N ew pro vis io n s /a ve rag e n e t lo an s 0 .6 0 .3 0 .5 0 .7 0 .4 0 .4

Total provisions/gross loans 3.8 2.5 0.8 1.2 1.3 1.4

Interest income/total income 68.9 70.8 72.7 74.6 73.0 72.0

Other income / total income 31.1 29.2 27.3 25.4 27.0 28.0

Fee income to total income 23.8 22.3 19.9 17.8 18.4 18.5

Fee income to advances 1.6 1.5 1.4 1.3 1.2 1.2

Fees income to PBT 142.8 87.5 66.8 55.5 50.7 48.4

Net trading income to PBT 19.8 14.0 15.0 13.8 14.0 15.0

Exchange income to PBT 12.6 7.1 3.7 3.6 3.8 3.9

Operating expenses/total income 74.6 68.6 62.9 57.4 57.2 54.4

Operating expenses/assets 3.1 2.8 2.6 2.6 2.4 2.3

Operating profit /AWF 0.6 0.9 1.1 1.3 1.4 1.4

Tax rate 0.1 0.0 — 18.0 27.0 30.0

Dividend payout ratio — — — — — —

Share of deposits

Current 18.9 16.4 15.7 14.7 14.7 14.7

Fixed 67.9 72.8 75.0 77.0 76.0 75.0

Savings 18.9 16.4 15.7 14.7 14.7 14.7

Loans-to-deposit ratio 83.4 78.7 78.8 78.1 79.6 81.1

Equity/assets (EoY) 9.9 8.9 8.9 8.3 7.9 7.7

Lo an impa irmen t ra t io s (%)

Gross NPL 4.4 3.2 1.7 1.6 1.5 1.5

Net NPL 0.6 0.7 0.9 1.1 1.0 1.0

Slippages 1.5 1.4 1.4 1.4 1.3 1.2

Loan-loss provisions — 77.1 46.5 33.4 28.9 32.2

D upo n t an a lys is (%)

Net interest income 2.8 2.9 3.0 3.4 3.1 3.0

Loan loss provisions 0.3 0.2 0.3 0.4 0.2 0.3

Net other income 1.3 1.2 1.1 1.1 1.1 1.2

Operating expenses 3.1 2.8 2.6 2.7 2.5 2.3

(1- tax rate) 99.9 100.0 100.0 82.0 73.0 70.0

RO A 0 .7 1.0 1.3 1.2 1.1 1.1

Average assets/average equity 11.7 11.4 11.8 12.1 12.8 13.3

RO E 8 .0 11.6 14.8 14.5 14.4 15 .0




Exhibit 17: DCB: Key financial statements - P&L and balance sheet March fiscal year-ends, 2012-17E

20 12 20 13 20 14 20 15 E 20 16 E 20 17E

In co me s ta temen t

Total interest income 7,170 9,161 11,283 13,957 16,575 19,668

Loans 5,362 7,118 8,679 10,694 13,117 15,852

Investments 1,725 1,963 2,453 2,828 3,312 3,658

Cash and deposits 83 80 151 435 146 158

Total interest expense 4,893 6,317 7,599 9,096 11,124 13,260

Deposits from customers 4,081 5,346 6,649 8,253 10,196 12,269

N e t in te re s t in co me 2,277 2,8 44 3,6 8 4 4,8 6 1 5 ,45 1 6 ,40 8

Loan loss provisions 274 198 354 593 398 565

Net interest income (after prov.) 2,003 2,646 3,330 4,269 5,053 5,843

Other income 1,027 1,170 1,387 1,657 2,018 2,487

Net fee income 787 893 1,011 1,162 1,372 1,646

Net capital gains 118 139 225 300 390 520

Net exchange gains 69 72 57 76 103 134

Operating expenses 2,466 2,753 3,191 3,740 4,273 4,843

Employee expenses 1,246 1,379 1,571 1,868 2,131 2,423

Depreciation on investments 8 (4) (2) 10 10 10

Other provisions 5 46 14 80 80 80

Pretax income 551 1,021 1,514 2,095 2,708 3,398

Tax provisions 0 0 — 377 731 1,019

N e t pro f it 5 5 1 1,0 21 1,5 14 1,718 1,9 77 2,378

% growth 157 85 48 14 15 20

PBT - Treasury + Provisions 721 1,122 1,655 2,478 2,807 3,533

% growth 19 56 47 50 13 26

Ba lan ce s h ee t

Cash and bank balance 4,566 8,833 6,896 7,131 8,191 9,359

Cash 857 906 849 891 936 983

Balance with RBI 3,218 2,882 4,202 4,395 5,410 6,531

Net value of investments 25,178 33,587 36,342 46,582 52,281 58,076

Govt. and other securities 20,219 24,332 28,072 38,351 44,085 49,912

Shares — 2 — — — —

Debentures and bonds 30 30 391 352 317 285

Net loans and advances 52,844 65,861 81,402 100,938 126,596 155,713

Fixed assets 1,846 2,394 2,386 1,710 2,074 2,411

Net Owned assets 1,846 2,394 2,386 1,710 2,074 2,411

Other assets 2,335 2,114 2,205 2,646 3,175 3,810

To ta l a s s e t s 8 6 ,76 8 112,78 8 129 ,231 15 9 ,0 0 8 19 2,317 229 ,36 9

Deposits 63,356 83,638 103,252 129,263 159,119 192,092

Borrowings and bills payable 12,561 16,693 10,854 12,911 14,399 16,109

Other liabilities 2,238 2,426 3,587 3,587 3,587 3,587

To ta l liab ilit ie s 78 ,15 5 10 2,75 8 117,6 9 2 145 ,76 1 177,10 4 211,78 7

Paid-up capital 2,407 2,501 2,503 2,503 2,503 2,503

Reserves & surplus 6,207 7,529 9,036 10,744 12,710 15,078

To ta l s h a reh o ld e r s ' eq uit y 8 ,6 14 10 ,0 31 11,5 40 13,247 15 ,214 17,5 8 2


For Private Circulation Only. FOR IMPORTANT INFORMATION ABOUT KOTAK SECURITIES’ RATING SYSTEM AND OTHER DISCLOSURES, REFER TO THE END OF THIS MATERIAL.

Kotak Institutional Equities Research [email protected] Mumbai: +91-22-4336-0000

Government may resolve the issue of royalty calculation for onshore crude oil…

Media reports suggest the central government has directed the Ministry of Petroleum and

Natural Gas to resolve the issue between ONGC and the Gujarat government on royalty for

onshore crude oil production. We note that ONGC (and OIL) had started paying lower royalty

on onshore crude oil production based on actual realizations (post subsidy discount) to state

governments in April 2008, in line with an administrative order (May 23, 2008) issued by the

then Central Government. Previously the companies used to pay royalty based on the market-

driven well-head price of onshore crude production, as directed by a government resolution

(March 17, 2003) and subsequent notifications (December 16, 2004 and August 20, 2007).

…while it is being reviewed by the Supreme Court

The Gujarat High Court, in its order dated November 30, 2013, directed ONGC to pay royalty to

the Gujarat government for crude oil produced in the state on the basis of market price, instead

of actual realizations post subsidy discount, with retrospective effect from April 2008. However,

the Supreme Court granted an interim stay on the order, while directing ONGC to pay royalty

on marker-driven prices from February 2014. We note that ONGC has created a contingent

liability of `123 bn pertaining to the differential amount of royalty from April 2008 to June

2014, while creating a deposit of `8.6 bn for the amount from February 2014 onwards.

However, the company has not accounted any impact in its P&L statement.

An adverse decision on royalty will result in a one-off negative impact…

We see a potential negative impact on the profitability of ONGC and OIL from an adverse

decision on the royalty issue. If we assume that ONGC were to pay royalty on its onshore crude

oil on the basis of market prices, our FY2015E and FY2016E EPS will decline to `35 (-5%) and

`44 (-3%) respectively. For OIL, we see a more meaningful downside risk, as it produces oil

from onshore fields only; our FY2015 and FY2016 EPS estimates will decline to `45 (-23%) and

`62 (-15%). However, we would expect the central government to make suitable

compensation. It would be unfair for the companies to pay taxes (royalties) on higher

‘unrealized’ crude oil prices given large subsidy discounts (to the extent of 55-60% of the

market price for FY2014).

…but profitability will be determined by the final pricing policy for oil and gas

We are not too perturbed by downside risks from the royalty issue, as the profitability of these

companies will ultimately be determined by the final pricing policy for oil and gas. The

government is expected to take a decision on the gas pricing policy by September 30. Also, we

expect the government to formulate a transparent pricing policy for crude oil production from

the nominated fields of ONGC and OIL, taking into account declining subsidies on petroleum

fuels. Exhibits 1 and 2 show our FY2016 EPS estimates for ONGC and OIL at various levels of oil

and gas realizations; Exhibits 3 and 4 show similar sensitivity, while taking into account

potential higher royalty payout on onshore crude oil production.

Energy India

Awaiting royal(ty) decisions. We see a negative impact on the earnings of OIL and

ONGC in the unfair and unlikely event of royalty being computed on market prices of

onshore crude instead of actual realizations (post subsidy discount). However, the

recurring profitability of the companies will be determined by pricing policies for oil and

gas, adopted by the government, which we expect to be implemented in coming

months. In any case, the central government should bear the burden of higher royalties

(if any).

NEUTRAL

SEPTEMBER 22, 2014

UPDATE

BSE-30: 27,090

Tarun Lakhotia [email protected]

Mumbai: +91-22-4336-0875

Sanjeev Prasad [email protected]

Mumbai: +91-22-4336-0830

Kumar Gaurav [email protected]

Mumbai: +91-22-4336-0876

Energy India


Exhibit 1: ONGC's EPS assuming royalty on actual realizations ONGC's EPS at various levels of net oil and gas realizations, FY2016E (Rs)

FY20 16 E EPS fo r O N GC (Rs )

N e t g a s pr ice (U S$/mn BTU )

4.2 5 .0 6 .0 7.0 8 .0

5 0 34.3 36.6 39.6 42.5 45.5

5 5 37.2 39.6 42.5 45.5 48.4

6 0 40.1 42.5 45.4 48.4 51.3

6 5 43.1 45.5 48.4 51.4 54.3

70 46.0 48.4 51.3 54.3 57.2

Notes:

(a) Net realizations are before statutory levies.

Ne

t cru

de

rea

liza

tio

n

(US

$/b

bl)

Source: Kotak Institutional Equities estimates

Exhibit 2: OIL's EPS assuming royalty on actual realizations OIL's EPS at various levels of net oil and gas realizations, FY2016E (Rs)

FY20 16 E EPS fo r O IL (Rs )


4.2 5 .0 6 .0 7.0 8 .0

5 5 50.9 54.7 59.4 64.1 68.8

6 0 57.9 61.6 66.3 71.0 75.7

6 5 64.8 68.5 73.2 77.9 82.6

70 71.7 75.5 80.2 84.8 89.5

75 78.7 82.4 87.1 91.8 96.5

Notes:


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(US

$/b

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Exhibit 3: ONGC's EPS assuming royalty on market-driven prices for onshore crude oil ONGC's EPS at various levels of net oil and gas realizations, FY2016E (Rs)

FY20 16 E EPS fo r O N GC (Rs )


4.2 5 .0 6 .0 7.0 8 .0

5 0 32.4 34.8 37.7 40.7 43.6

5 5 35.5 37.9 40.9 43.8 46.8

6 0 38.6 41.0 43.9 46.9 49.8

6 5 41.8 44.1 47.1 50.0 53.0

70 44.9 47.2 50.2 53.1 56.1

Notes:


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(US

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India Energy


Exhibit 4: OIL's EPS assuming royalty on market-driven prices for onshore crude oil OIL's EPS at various levels of net oil and gas realizations, FY2016E (Rs)

FY20 16 E EPS fo r O IL (Rs )


4.2 5 .0 6 .0 7.0 8 .0

5 5 37.6 41.3 46.0 50.7 55.4

6 0 45.9 49.6 54.3 59.0 63.7

6 5 54.2 57.9 62.6 67.3 72.0

70 62.5 66.2 70.9 75.6 80.3

75 70.8 74.5 79.2 83.9 88.6

Notes:


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Kotak Institutional Equities: Valuation summary of KIE Universe stocks

P r ice (Rs )

Ta rg e t

pr ice U ps id e Mkt cap.

O /S

s h a re s EPS (Rs ) EPS g ro wth (%) PER (X ) EV/EBITD A (X ) Ro E (%)

AD VT -

3mo

Co mpan y Ra t in g 19 -Sep-14 (Rs ) (%) (Rs mn ) (U S$ mn ) (mn ) 20 14 20 15 E 20 16 E 20 14 20 15 E 20 16 E 20 14 20 15 E 20 16 E 20 14 20 15 E 20 16 E 20 14 20 15 E 20 16 E 20 14 20 15 E 20 16 E 20 14 20 15 E 20 16 E (U S$ mn )

Auto mo b ile s

Amara Raja Batteries ADD 639 550 (13.9) 109,106 1,794 171 21.5 24.4 29.9 28.2 13.6 22.5 29.7 26.1 21.3 19.1 15.8 13.1 8.0 6.5 5.3 0.5 0.8 0.9 30.3 27.4 27.2 2.9

Apollo Tyres BUY 206 200 (3.0) 103,969 1,709 504 19.9 21.2 22.0 63.7 6.8 3.7 10.4 9.7 9.4 6.0 5.7 5.8 2.0 1.7 1.4 0.4 0.4 0.4 26.4 21.1 18.1 18.1

Ashok Leyland SELL 40 34 (14.2) 112,918 1,856 2,848 (1.8) (0.5) 1.2 (430.4) 72.8 350.2 (22.2) (81.4) 32.5 94.4 23.5 12.6 2.3 2.1 2.0 — — 1.4 0.8 (3.7) 8.5 12.5

Bajaj Auto ADD 2,412 2,550 5.7 698,134 11,477 289 112.1 120.8 139.9 6.6 7.8 15.8 21.5 20.0 17.2 15.5 15.5 13.5 7.2 6.0 5.1 2.1 2.0 2.3 36.5 32.7 31.9 14.1

Bharat Forge SELL 851 620 (27.1) 201,907 3,319 237 22.0 27.7 34.8 110.7 26.1 25.6 38.7 30.7 24.4 21.6 15.6 13.0 7.5 6.3 5.2 0.4 0.6 0.8 21.0 22.4 23.4 12.9

Eicher Motors SELL 11,635 8,300 (28.7) 314,605 5,172 27 145.7 265.7 396.7 21.3 82.4 49.3 79.9 43.8 29.3 42.1 24.5 16.3 15.3 11.7 8.6 0.3 0.2 0.3 19.2 28.1 31.9 7.7

Exide Industries REDUCE 172 160 (7.1) 146,328 2,406 850 5.7 7.2 8.7 (6.8) 25.3 21.6 30.0 24.0 19.7 17.8 14.9 12.5 3.9 3.6 3.2 1.4 1.5 1.5 13.6 15.6 17.1 9.2

Hero Motocorp ADD 2,951 3,200 8.4 589,395 9,690 200 105.6 134.8 189.5 (0.4) 27.7 40.5 27.9 21.9 15.6 20.2 15.4 10.6 10.7 8.9 7.3 2.2 2.3 3.2 39.7 44.6 51.6 18.8

Mahindra & Mahindra REDUCE 1,374 1,310 (4.6) 772,072 12,693 562 68.5 58.9 65.6 8.7 (14.1) 11.4 20.0 23.3 21.0 15.0 15.5 14.0 4.4 4.1 3.8 1.4 0.6 0.9 23.2 9.4 12.6 27.6

Maruti Suzuki BUY 3,082 3,400 10.3 931,132 15,308 302 92.8 114.4 183.2 17.1 23.4 60.1 33.2 26.9 16.8 20.1 16.4 10.2 4.3 3.8 3.2 0.4 0.4 0.7 13.8 15.0 20.5 16.8

Motherson Sumi Systems ADD 415 375 (9.6) 365,765 6,013 882 8.7 11.2 18.0 72.1 29.6 60.5 47.8 36.9 23.0 15.0 12.3 7.8 12.4 9.0 6.1 0.6 0.8 1.3 34.2 27.0 30.3 12.8

Tata Motors BUY 519 590 13.7 1,669,741 27,450 3,218 46.5 48.1 62.0 51.4 3.4 28.8 11.1 10.8 8.4 5.7 5.0 4.3 2.5 2.0 1.6 0.4 — — 28.7 21.1 21.9 50.0

WABCO India ADD 3,742 4,000 6.9 70,980 1,167 19 61.9 77.7 133.0 (10.2) 25.4 71.2 60.4 48.2 28.1 41.8 30.3 18.0 9.4 8.1 6.7 0.1 0.3 0.9 16.7 18.1 26.1 0.6

Auto mo b ile s At t ra ct ive 6 ,0 8 6 ,0 5 1 10 0 ,0 5 4 24.4 9 .0 32.0 20 .1 18 .5 14.0 10 .7 9 .3 7.4 4.2 3.6 2.9 0 .9 0 .7 1.0 21.0 19 .2 21.0 20 3.4

Ban k s /F in an cia l In s t itut io n s

Axis Bank ADD 408 430 5.5 957,661 15,744 2,349 26.5 29.7 34.5 19.6 12.3 16.1 15.4 13.7 11.8 — — — 2.5 2.2 1.9 1.0 1.2 1.5 17.4 17.0 17.2 29.6

Bajaj Finserv BUY 1,086 1,175 8.2 172,749 2,840 159 96.4 102.3 111.1 (6.6) 6.1 8.6 11.3 10.6 9.8 — — — 1.9 1.7 1.5 1.3 1.3 1.3 17.9 17.0 16.3 1.5

Bank of Baroda ADD 949 1,050 10.6 408,906 6,722 431 105.4 118.2 138.3 (0.6) 12.1 17.0 9.0 8.0 6.9 — — — 1.3 1.2 1.1 2.3 2.5 3.0 13.8 13.8 14.5 20.8

Bank of India ADD 290 320 10.4 186,406 3,065 643 42.4 61.9 66.7 (7.9) 45.7 7.8 6.8 4.7 4.3 — — — 0.9 0.8 0.7 1.7 2.5 2.7 11.2 14.3 13.6 18.7

Cholamandalam ADD 505 420 (16.8) 72,266 1,188 143 25.6 29.8 36.5 19.7 16.2 22.8 19.7 17.0 13.8 — — — 3.4 2.9 2.2 0.8 0.9 1.2 17.3 17.5 18.3 0.3

City Union Bank ADD 85 90 5.8 50,123 824 589 6.4 7.0 8.1 (5.8) 9.2 16.4 13.3 12.2 10.5 — — — 2.6 1.9 1.7 1.1 1.3 1.5 18.9 17.4 16.5 1.0

DCB Bank BUY 90 100 11.0 22,542 371 250 6.0 6.9 7.9 48.2 13.5 15.1 14.9 13.1 11.4 — — — 2.1 1.9 1.6 — — — 14.8 14.5 14.4 1.9

Federal Bank BUY 126 145 14.8 108,026 1,776 855 9.8 12.2 14.7 0.1 24.6 19.9 12.9 10.3 8.6 — — — 1.6 1.4 1.3 1.6 2.0 2.4 12.6 14.2 15.2 10.4

HDFC ADD 1,066 1,060 (0.6) 1,663,883 27,354 1,561 34.9 40.8 47.4 11.3 16.8 16.3 30.5 26.1 22.5 — — — 6.0 5.3 4.7 1.3 1.6 1.8 20.6 21.0 22.8 50.7

HDFC Bank REDUCE 860 800 (7.0) 2,063,783 33,928 2,399 35.3 42.9 51.1 25.0 21.5 18.9 24.3 20.0 16.8 — — — 4.8 4.1 3.5 0.8 1.0 1.2 21.3 21.7 21.8 26.7

ICICI Bank BUY 1,572 1,660 5.6 1,815,961 29,854 1,155 84.9 92.5 107.0 17.7 8.9 15.7 18.5 17.0 14.7 — — — 2.6 2.3 2.1 1.5 1.8 2.0 14.0 13.9 14.7 64.1

IIFL Holdings BUY 156 175 12.2 46,192 759 296 9.4 13.0 16.1 1.6 38.4 24.2 16.6 12.0 9.7 — — — 2.1 1.9 1.7 2.0 2.1 2.7 14.0 17.2 18.8 0.6

IndusInd Bank ADD 630 650 3.2 331,206 5,445 526 26.8 32.2 38.7 32.0 20.1 20.3 23.5 19.6 16.3 — — — 3.9 3.3 2.9 0.6 0.7 0.8 18.0 18.3 18.6 8.7

ING Vysya Bank BUY 617 720 16.7 116,593 1,917 189 34.8 42.3 51.6 (12.0) 21.4 22.1 17.7 14.6 12.0 — — — 1.7 1.6 1.5 1.0 1.2 1.4 11.4 11.0 12.2 1.7

J&K Bank REDUCE 144 140 (3.0) 69,974 1,150 485 24.4 21.0 21.7 12.1 (13.7) 3.3 5.9 6.9 6.6 — — — 1.2 1.2 1.0 3.5 3.0 3.1 22.3 16.7 15.3 3.0

Karur Vysya Bank BUY 547 580 6.0 66,012 1,085 121 40.1 54.0 66.7 (21.9) 34.8 23.5 13.7 10.1 8.2 — — — 2.0 1.6 1.4 2.1 2.5 3.0 13.4 16.8 17.1 1.5

LIC Housing Finance BUY 319 375 17.4 161,281 2,651 505 26.1 30.5 35.2 28.8 16.7 15.7 12.2 10.5 9.1 — — — 2.2 1.9 1.6 1.4 1.6 1.9 18.8 18.9 18.8 16.6

L&T Finance Holdings SELL 69 60 (12.6) 117,972 1,939 1,718 3.5 5.8 5.4 (18.5) 68.9 (8.3) 19.8 11.7 12.8 — — — 2.0 2.1 1.8 1.1 2.3 1.3 10.5 18.3 15.2 5.7

Magma Fincorp BUY 130 125 (3.5) 24,605 405 190 7.2 9.4 10.9 15.6 30.9 16.6 18.1 13.8 11.9 — — — 1.6 1.5 1.4 0.9 1.1 1.3 9.7 11.1 12.2 0.7

Mahindra & Mahindra Financial SELL 283 240 (15.3) 159,703 2,626 564 15.7 16.9 20.7 0.4 7.3 22.7 18.0 16.8 13.7 — — — 3.3 2.9 2.5 1.4 1.4 1.7 18.6 17.5 18.8 7.4

Muthoot Finance BUY 203 250 22.9 80,743 1,327 397 21.0 20.3 23.7 (22.3) (3.1) 16.4 9.7 10.0 8.6 — — — 1.9 1.6 1.4 2.8 3.0 3.5 19.0 17.1 17.1 1.4

Oriental Bank of Commerce ADD 287 330 15.1 85,982 1,414 300 38.0 48.9 56.4 (16.5) 28.7 15.3 7.5 5.9 5.1 — — — 0.8 0.8 0.7 2.7 3.4 3.9 8.7 10.5 11.2 8.7

PFC ADD 246 330 33.9 325,149 5,345 1,319 41.1 43.7 43.5 22.6 6.4 (0.4) 6.0 5.6 5.7 — — — 1.2 1.3 1.1 3.7 3.9 3.9 21.1 19.5 17.0 21.1

Punjab National Bank REDUCE 978 960 (1.9) 354,195 5,823 362 92.3 145.5 166.1 (31.3) 57.6 14.1 10.6 6.7 5.9 — — — 1.3 1.2 1.0 1.0 1.6 1.8 10.2 14.3 14.4 16.1

Rural Electrification Corp. ADD 270 365 35.1 266,743 4,385 987 47.4 50.5 50.9 22.7 6.4 0.8 5.7 5.4 5.3 — — — 1.3 1.2 1.1 3.5 3.7 4.0 24.6 21.9 18.8 13.8

Shriram City Union Finance REDUCE 1,623 1,550 (4.5) 106,666 1,754 66 86.2 91.4 115.8 6.2 6.1 26.7 18.8 17.7 14.0 — — — 3.7 2.5 2.2 0.5 0.6 0.8 19.8 16.9 16.8 0.6

Shriram Transport REDUCE 966 840 (13.0) 215,531 3,543 223 56.7 69.2 85.8 (7.1) 22.1 24.1 17.0 14.0 11.3 — — — 2.7 2.3 2.0 0.7 1.0 1.2 16.3 17.3 18.5 9.4

SKS Microfinance ADD 320 305 (4.7) 40,308 663 126 6.5 13.0 19.8 123.6 101.5 52.1 49.5 24.6 16.1 — — — 6.4 4.0 3.2 — — — 16.5 22.2 21.8 8.7

State Bank of India ADD 2,568 2,800 9.0 1,917,192 31,519 747 145.9 195.0 227.4 (29.3) 33.7 16.6 17.6 13.2 11.3 — — — 2.1 1.9 1.7 1.1 1.2 1.3 10.0 11.7 12.4 81.5

Union Bank ADD 216 220 1.8 136,241 2,240 630 26.7 40.5 46.1 (25.7) 51.6 13.6 8.1 5.3 4.7 — — — 1.0 0.9 0.8 1.9 2.8 3.2 10.3 14.1 14.2 17.7

Yes Bank ADD 582 575 (1.3) 241,187 3,965 414 44.9 42.2 45.5 23.7 (5.9) 7.9 13.0 13.8 12.8 — — — 3.4 2.1 1.9 1.2 1.3 1.4 25.0 18.8 15.4 33.6

Ban k s /F in an cia l In s t itut io n sAt t ra ct ive 12,79 1,8 9 7 210 ,29 8 2.1 19 .4 14.5 15 .3 12.8 11.2 — — — 2.3 2.1 1.8 1.4 1.6 1.8 15 .3 16 .4 16 .5 5 32.1

P r ice /BV (X ) D iv id en d y ie ld (%)

Source: Company, Bloomberg, Kotak Institutional Equities estimates

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s h a re s EPS (Rs ) EPS g ro wth (%) PER (X ) EV/EBITD A (X ) P r ice /BV (X ) Ro E (%)

AD VT -

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Cemen t

ACC SELL 1,505 1,250 (16.9) 282,769 4,649 188 46.0 48.7 64.7 (37.6) 5.8 33.0 32.7 30.9 23.2 18.8 17.0 12.3 3.4 3.2 3.0 2.3 1.6 1.6 11.6 11.3 13.8 8.0

Ambuja Cements SELL 215 195 (9.3) 327,387 5,382 1,522 6.8 9.7 11.2 (34.6) 44.0 15.6 31.8 22.1 19.1 18.2 12.9 10.9 3.3 3.0 2.9 1.3 1.4 1.6 10.5 14.2 15.2 8.0

Grasim Industries ADD 3,686 3,500 (5.1) 338,541 5,566 92 214.4 209.2 244.3 (21.3) (2.4) 16.8 17.2 17.6 15.1 9.3 8.9 6.9 1.6 1.5 1.4 0.9 0.9 0.9 9.6 8.7 9.4 5.2

India Cements REDUCE 127 100 (21.2) 38,996 641 307 (2.3) 3.7 7.0 (133.4) 265.4 86.1 (56.2) 34.0 18.3 10.9 8.0 6.7 0.9 0.9 0.9 2.1 2.1 2.1 (1.8) 3.0 5.5 4.5

Shree Cement SELL 8,588 5,800 (32.5) 299,218 4,919 35 235.9 324.9 393.1 (18.2) 37.7 21.0 36.4 26.4 21.8 21.3 16.3 12.8 6.8 5.5 4.4 0.2 0.2 0.2 20.1 23.0 22.5 2.3

UltraTech Cement SELL 2,642 2,000 (24.3) 724,709 11,914 274 74.8 78.4 98.9 (26.2) 4.8 26.2 35.3 33.7 26.7 19.9 17.9 13.1 3.7 3.3 3.0 0.4 0.4 0.4 12.7 11.9 13.4 13.0

Cemen t Caut io us 2,0 11,6 20 33,0 71 (29 .5 ) 15 .7 22.7 30 .2 26 .1 21.2 15 .6 13.4 10 .4 3.0 2.7 2.5 0 .9 0 .8 0 .9 9 .9 10 .4 11.7 41.2

Co n s umer pro d uct s

Asian Paints SELL 670 575 (14.1) 642,184 10,557 959 12.8 15.3 17.7 10.3 19.7 15.2 52.3 43.7 37.9 31.5 26.6 23.0 15.0 12.8 10.9 0.8 1.0 1.2 33.1 33.5 33.0 10.0

Bajaj Corp. ADD 284 300 5.7 41,875 688 148 12.0 13.9 15.9 6.8 15.1 14.5 23.6 20.5 17.9 21.9 18.8 15.8 8.1 6.8 5.8 2.3 2.3 2.6 33.2 31.4 30.8 0.5

Britannia Industries BUY 1,375 1,460 6.2 164,955 2,712 120 33.0 40.2 49.9 51.8 21.9 24.2 41.7 34.2 27.6 26.1 21.0 17.0 20.6 13.9 10.9 0.9 1.1 1.4 58.3 48.6 44.4 3.1

Colgate-Palmolive (India) ADD 1,627 1,730 6.3 221,288 3,638 136 36.1 40.9 48.0 (1.2) 13.5 17.3 45.1 39.7 33.9 32.9 26.4 21.9 38.0 35.9 33.6 1.7 2.0 2.3 90.1 90.2 99.7 4.5

Dabur India ADD 223 245 9.7 389,565 6,404 1,744 5.2 6.2 7.3 19.0 17.8 18.6 42.6 36.1 30.5 34.8 29.4 24.5 14.7 11.8 9.7 0.8 1.1 1.3 38.5 36.1 34.9 6.9

GlaxoSmithKline Consumer REDUCE 5,018 5,300 5.6 211,045 3,470 42 160.4 140.3 163.4 54.5 (12.6) 16.5 31.3 35.8 30.7 28.0 33.1 27.2 12.3 10.2 8.6 0.9 1.0 1.2 42.5 29.8 29.3 0.9

Godrej Consumer Products REDUCE 1,025 880 (14.1) 348,859 5,735 340 22.1 25.6 31.0 9.3 15.5 21.2 46.3 40.1 33.1 32.3 27.6 22.8 8.7 7.4 6.4 0.5 0.6 0.8 21.3 21.3 22.2 2.2

Hindustan Unilever REDUCE 737 715 (3.0) 1,594,451 26,213 2,163 16.4 18.8 21.0 8.4 14.1 12.1 44.8 39.3 35.1 35.1 29.7 25.7 51.2 45.0 38.0 1.8 1.9 2.0 119.5 116.3 112.9 12.9

ITC ADD 359 390 8.5 2,909,652 47,834 8,096 10.8 12.0 13.9 15.7 11.2 15.6 33.3 29.9 25.9 24.1 20.9 17.6 10.6 9.6 8.6 1.6 2.1 2.3 35.6 35.1 36.9 38.9

Jubilant Foodworks SELL 1,247 1,080 (13.4) 82,686 1,359 66 18.0 21.8 30.6 (9.9) 21.2 40.4 69.4 57.2 40.8 33.0 28.0 20.2 15.0 11.9 9.4 — — 0.2 24.1 23.2 26.0 5.5

Jyothy Laboratories REDUCE 250 220 (12.0) 45,238 744 181 4.7 10.5 11.7 21.4 123.4 10.8 53.0 23.7 21.4 32.8 23.6 18.3 6.1 5.2 4.5 1.2 1.2 1.4 12.4 23.9 22.7 1.3

Marico ADD 289 295 2.3 186,054 3,059 645 8.1 9.2 10.5 43.3 13.6 14.3 35.8 31.5 27.6 25.6 21.3 18.3 13.3 10.3 8.3 1.4 0.9 1.1 38.2 33.6 31.0 2.0

Nestle India SELL 6,053 5,300 (12.4) 583,587 9,594 96 114.4 122.4 146.2 3.3 7.0 19.4 52.9 49.4 41.4 29.4 27.5 23.5 22.6 18.1 14.9 0.8 0.8 1.0 56.4 46.5 44.2 2.5

Page Industries SELL 7,780 6,600 (15.2) 86,774 1,427 11 137.3 180.6 223.2 36.1 31.5 23.6 56.7 43.1 34.9 35.1 27.1 22.0 29.1 21.6 16.1 0.8 1.0 1.1 61.2 59.2 54.0 1.0

Speciality Restaurants BUY 144 160 11.3 6,751 111 47 4.0 3.2 5.3 (19.3) (19.3) 63.1 35.7 44.3 27.2 19.5 20.2 12.6 2.3 2.2 2.0 0.7 0.9 1.0 6.4 4.9 7.5 0.1

Tata Global Beverages REDUCE 169 155 (8.1) 106,408 1,749 631 6.0 6.5 7.5 (1.0) 8.0 15.9 28.1 26.0 22.4 15.1 13.9 12.1 1.6 1.5 1.4 1.3 1.3 1.5 7.0 6.9 7.6 9.5

Titan Company REDUCE 389 340 (12.5) 344,949 5,671 888 8.4 9.7 10.7 3.1 15.4 9.7 46.1 40.0 36.4 32.9 27.0 23.4 13.7 11.1 9.5 0.5 0.7 1.0 33.3 30.7 28.1 6.9

United Breweries SELL 726 650 (10.5) 192,064 3,158 264 8.5 9.5 12.8 31.3 11.1 34.9 85.0 76.5 56.7 34.5 30.7 25.6 11.2 10.4 9.1 0.1 0.2 0.3 13.8 13.8 16.7 2.1

United Spirits BUY 2,354 3,000 27.5 342,029 5,623 145 (8.0) 42.0 71.1 (188.7) 621.6 69.4 (292.6) 56.1 33.1 43.1 26.1 19.7 12.8 12.6 9.4 (0.7) 0.1 0.3 (3.1) 22.7 32.6 33.1

Co n s umer pro d uct s N eut ra l 8 ,5 0 0 ,414 139 ,746 13.3 17.0 17.8 42.0 35 .9 30 .5 28 .8 24.5 20 .7 13.1 11.6 10 .1 1.2 1.5 1.7 31.2 32.2 33.0 143.9

En e rg y

Aban Offshore RS 704 — — 39,638 652 56 83.9 91.2 98.3 117.2 8.7 7.8 8.4 7.7 7.2 8.3 7.1 6.8 0.9 0.7 0.7 0.5 0.7 0.8 10.0 10.0 9.4 22.1

Bharat Petroleum ADD 657 770 17.2 475,244 7,813 723 56.2 50.7 52.3 53.7 (9.8) 3.2 11.7 13.0 12.6 7.8 8.6 7.6 2.3 2.1 1.9 2.6 2.3 2.4 19.9 15.9 14.8 19.1

Cairn india REDUCE 325 340 4.8 608,178 9,998 1,874 65.2 56.4 52.0 4.4 (13.4) (7.8) 5.0 5.7 6.2 3.8 4.3 4.4 1.0 1.0 0.9 3.9 3.8 3.7 23.4 14.7 14.6 13.1

Castrol India SELL 440 260 (40.9) 217,433 3,575 495 10.0 9.6 10.2 10.3 (3.9) 6.7 44.1 45.9 43.0 30.8 30.5 28.5 31.1 45.8 43.4 1.6 1.7 1.8 76.9 80.8 103.7 3.1

GAIL (India) BUY 449 520 15.7 569,928 9,370 1,268 32.6 34.7 41.3 (9.4) 6.2 19.2 13.8 13.0 10.9 9.1 8.6 6.7 1.9 1.7 1.6 2.3 2.3 3.0 13.9 13.3 14.2 10.9

GSPL ADD 97 95 (1.6) 54,332 893 563 7.4 7.5 8.5 (22.1) 1.0 13.6 13.0 12.8 11.3 6.7 6.6 6.0 1.5 1.3 1.2 1.0 1.6 2.7 11.9 10.8 11.2 3.0

Hindustan Petroleum REDUCE 477 500 4.7 161,860 2,661 339 51.1 44.5 51.7 106.4 (13.0) 16.3 9.3 10.7 9.2 8.5 7.2 5.8 0.9 0.8 0.8 3.2 2.8 3.3 9.1 7.2 7.9 15.7

Indian Oil Corporation ADD 371 430 15.9 901,012 14,813 2,428 23.2 33.4 37.6 38.1 43.8 12.6 16.0 11.1 9.9 10.0 7.1 5.2 1.3 1.2 1.1 2.3 3.1 3.4 8.1 10.8 11.1 6.8

Oil India BUY 610 720 18.0 366,906 6,032 601 49.6 58.4 73.1 (16.9) 17.8 25.1 12.3 10.4 8.3 5.8 4.3 3.3 1.7 1.5 1.4 3.5 4.3 5.4 12.5 13.5 15.5 5.0

Oil & Natural Gas Corporation ADD 404 465 15.1 3,456,430 56,823 8,556 31.2 37.1 45.6 6.2 18.9 23.2 13.0 10.9 8.9 5.9 4.5 3.7 1.6 1.5 1.3 2.4 3.1 4.0 12.7 13.4 14.9 44.1

Petronet LNG REDUCE 198 180 (9.0) 148,350 2,439 750 9.5 8.8 11.1 (38.1) (7.1) 25.7 20.8 22.4 17.8 11.4 11.9 10.2 2.7 2.4 2.2 1.0 1.1 1.6 13.2 10.8 12.1 5.9

Reliance Industries ADD 995 1,130 13.5 2,923,637 48,064 2,937 68.0 74.9 79.7 4.6 10.1 6.5 14.6 13.3 12.5 10.9 10.1 8.9 1.4 1.3 1.2 1.0 1.1 1.1 11.0 11.0 10.7 55.7

En e rg y At t ra ct ive 9 ,9 22,9 49 16 3,133 7.4 9 .9 12.8 12.2 11.1 9 .8 7.7 6 .5 5 .4 1.5 1.4 1.3 2.1 2.4 2.9 12.6 12.6 12.9 20 4.4

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ABB SELL 1,227 750 (38.9) 259,991 4,274 212 8.3 15.6 25.1 25.5 86.6 61.1 147.0 78.8 48.9 69.3 46.4 32.0 9.7 8.9 7.7 0.2 0.3 0.3 6.7 11.8 16.9 2.0

Bharat Heavy Electricals SELL 227 160 (29.4) 554,381 9,114 2,448 14.1 11.6 13.7 (47.7) (18.2) 18.7 16.0 19.6 16.5 12.1 13.0 9.8 1.7 1.6 1.5 1.3 1.1 1.3 10.9 8.3 9.2 24.0

Crompton Greaves BUY 212 220 3.9 132,746 2,182 627 4.1 6.1 10.9 215.8 46.7 80.4 51.3 35.0 19.4 21.0 15.7 10.8 3.6 3.4 3.0 0.6 0.7 1.0 7.2 10.0 16.3 18.6

Cummins India REDUCE 685 615 (10.3) 189,979 3,123 277 21.3 27.0 30.5 (23.6) 26.6 13.1 32.2 25.4 22.4 30.1 24.4 18.7 7.4 6.6 5.8 1.5 1.8 2.0 24.2 26.7 26.7 3.1

Kalpataru Power Transmission ADD 167 200 20.1 25,549 420 153 8.1 10.9 11.0 (7.9) 34.8 1.3 20.6 15.3 15.1 8.8 7.4 6.2 1.2 1.1 1.1 0.9 0.9 0.9 6.0 6.8 6.8 0.7

KEC International ADD 110 125 13.3 28,365 466 257 3.3 6.7 10.4 30.4 102.5 54.9 33.4 16.5 10.6 9.8 7.8 6.3 2.3 1.9 1.6 0.5 1.4 2.2 6.9 12.4 16.4 1.0

Larsen & Toubro ADD 1,532 1,675 9.3 1,420,428 23,352 927 49.2 47.7 71.2 (6.1) (3.1) 49.2 31.1 32.1 21.5 20.3 18.3 14.2 3.7 3.4 3.0 0.9 0.9 1.2 12.6 11.0 14.7 52.6

Siemens SELL 889 550 (38.1) 316,448 5,202 356 8.7 19.9 24.8 91.7 128.7 24.5 102.2 44.7 35.9 48.0 25.4 20.9 6.8 6.5 5.8 0.9 0.6 0.7 7.2 14.9 17.1 5.6

Thermax REDUCE 900 800 (11.1) 107,271 1,764 119 20.6 22.2 34.0 (23.2) 7.6 53.0 43.6 40.5 26.5 28.2 29.6 18.5 5.3 4.9 4.4 0.7 0.9 1.2 12.6 12.5 17.4 1.2

Voltas REDUCE 239 220 (7.8) 78,922 1,297 331 6.8 9.2 11.6 15.0 35.6 25.7 35.2 25.9 20.6 29.0 18.8 14.2 4.3 3.9 3.5 0.9 1.2 1.5 12.9 15.7 17.7 13.1

In d us t r ia ls N eut ra l 3,114,0 8 0 5 1,19 5 (24.7) 2.4 36 .9 31.1 30 .3 22.2 20 .5 18 .3 14.1 3.4 3.1 2.8 0 .9 0 .9 1.1 10 .9 10 .3 12.7 122.1

In f ra s t ructure

Adani Port and SEZ ADD 285 280 (1.7) 593,864 9,763 2,084 8.3 11.1 15.1 3.7 32.5 36.4 34.1 25.8 18.9 23.0 15.6 12.1 6.7 5.0 4.1 0.6 0.6 0.7 22.5 22.1 23.7 24.4

Container Corporation ADD 1,330 1,325 (0.4) 259,369 4,264 195 49.5 58.7 70.5 2.6 18.7 20.1 26.9 22.7 18.9 21.2 17.4 14.0 3.7 3.3 2.9 0.9 1.0 1.2 14.5 15.5 16.5 2.3

Gujarat Pipavav Port REDUCE 174 140 (19.7) 84,239 1,385 483 3.6 6.5 8.8 137.1 80.1 34.0 48.0 26.7 19.9 31.1 20.3 15.8 6.0 4.8 3.8 — — — 18.1 23.3 25.6 3.1

IRB Infrastructure REDUCE 243 210 (13.7) 80,831 1,329 332 13.8 14.3 17.1 (17.4) 3.2 20.2 17.6 17.0 14.2 9.6 8.5 7.2 2.2 1.8 1.6 1.6 1.6 1.6 13.1 11.6 12.0 29.0

In f ra s t ructure At t ra ct ive 1,0 5 4,30 8 17,333 6 .7 25 .7 29 .8 30 .2 24.0 18 .5 19 .1 14.2 11.3 4.8 3.9 3.3 0 .7 0 .7 0 .9 15 .9 16 .2 17.9 6 0 .0

Med ia

DB Corp ADD 363 350 (3.6) 66,587 1,095 183 16.7 18.6 23.0 40.5 11.0 23.7 21.7 19.6 15.8 13.2 11.2 9.2 5.8 5.1 4.5 1.9 2.5 3.0 28.2 27.9 30.3 0.7

DishTV ADD 58 60 3.4 61,823 1,016 1,065 (0.4) 0.0 1.5 68.2 105.0 7,286.5 (147.4) 2,940.6 39.8 11.3 10.3 8.3 (19.8) (19.9) (40) — — — 17.9 (0.7) (67) 6.7

Jagran Prakashan ADD 122 135 10.8 37,912 623 311 7.6 7.7 9.7 50.2 1.5 26.1 16.0 15.8 12.5 10.2 8.3 6.8 3.9 3.6 3.2 2.5 3.3 4.1 25.0 23.8 27.1 0.7

Sun TV Network ADD 344 455 32.4 135,406 2,226 394 19.0 21.0 24.0 5.4 10.9 13.9 18.1 16.3 14.3 11.3 10.0 8.8 4.2 3.9 4 2.9 3.8 4.7 25.2 25.6 27 6.2

Zee Entertainment Enterprises ADD 313 315 0.5 301,006 4,949 960 9.2 9.7 11.9 21.7 5.3 23.6 34.1 32.4 26.2 24.5 21.6 18.5 6.3 5.6 5.0 1.0 1.3 1.6 20.6 21.3 22.7 11.9

Med ia N eut ra l 6 0 2,735 9 ,9 0 9 27.8 16 .0 25 .4 28 .2 24.3 19 .4 15 .6 13.7 11.6 6 .2 5 .5 4.9 1.5 2.0 2.4 21.8 22.8 25 .4 26 .2

Me ta ls & Min in g

Coal India ADD 346 392 13.4 2,184,199 35,908 6,316 23.9 26.3 31.6 (12.9) 9.8 20.5 14.5 13.2 10.9 9.2 7.5 6.4 4.9 4.3 3.7 8.4 3.9 4.7 31.6 34.5 36.0 23.0

Hindalco Industries REDUCE 164 180 9.6 339,214 5,577 2,065 12.5 18.8 18.7 (15.1) 51.3 (0.6) 13.2 8.7 8.8 10.7 7.7 6.5 0.8 0.8 0.7 0.9 0.9 0.9 6.8 9.2 8.4 30.9

Hindustan Zinc ADD 167 190 13.7 705,786 11,603 4,225 16.5 16.9 18.3 0.7 2.5 8.1 10.1 9.9 9.1 6.5 5.9 4.6 1.9 1.6 1.4 2.1 2.1 2.1 20.1 17.8 16.9 4.2

Jindal Steel and Power REDUCE 211 280 33.0 192,678 3,168 915 20.9 22.4 25.8 (32.9) 7.4 14.8 10.1 9.4 8.2 9.6 7.4 6.4 0.9 0.8 0.7 0.8 0.9 0.9 8.9 8.9 9.4 18.7

JSW Steel BUY 1,281 1,450 13.2 309,547 5,089 242 66.2 102.1 137.4 22.0 54.3 34.6 19.4 12.5 9.3 7.1 6.6 5.7 1.4 1.3 1.1 0.9 0.9 0.9 8.1 10.7 13.0 13.0

National Aluminium Co. SELL 68 45 (34.0) 175,639 2,887 2,577 2.7 3.9 3.7 16.7 44.2 (3.9) 25.4 17.6 18.3 13.1 8.6 8.8 1.4 1.4 1.3 2.2 2.2 2.2 5.8 8.0 7.4 4.1

NMDC ADD 174 185 6.1 691,444 11,367 3,965 16.1 18.5 18.4 (1.8) 14.8 (0.6) 10.8 9.4 9.5 6.5 5.5 5.7 2.3 2.1 1.9 4.9 4.9 4.9 22.3 23.1 20.8 7.1

Sesa Sterlite REDUCE 285 290 1.8 844,433 13,882 2,965 16.9 28.2 24.6 (32.2) 66.5 (12.9) 16.8 10.1 11.6 5.8 5.3 4.9 1.2 1.1 1.0 1.1 1.1 1.1 7.1 9.6 8.9 30.4

Tata Steel REDUCE 511 525 2.7 496,391 8,161 971 37.1 46.2 47.6 986.0 24.3 3.0 13.8 11.1 10.7 7.6 6.8 6.6 1.2 1.1 1.0 2.0 1.6 1.6 9.7 10.5 9.9 48.8

Me ta ls & Min in g Caut io us 5 ,9 39 ,330 9 7,6 42 (6 .3) 21.6 7.7 13.5 11.1 10 .3 7.6 6 .5 5 .9 1.8 1.7 1.5 4.4 2.7 3.0 13.6 15 .0 14.6 18 0 .1

Ph a rmaceut ica l

Biocon SELL 508 360 (29.1) 101,732 1,672 200 20.9 20.7 23.5 34.8 (1.3) 13.9 24.3 24.6 21.6 14.5 14.4 12.1 3.4 3.2 2.9 1.0 1.2 1.4 14.5 13.2 14.2 10.6

Cipla BUY 628 610 (2.9) 504,315 8,291 803 16.0 19.0 25.1 (17.4) 18.6 32.2 39.2 33.1 25.0 28.7 22.3 16.1 5.0 4.5 3.9 0.4 0.7 0.9 13.4 14.3 16.7 16.1

Dr Reddy's Laboratories ADD 3,223 2,930 (9.1) 546,664 8,987 170 126.8 131.7 147.8 23.2 3.8 12.2 25.4 24.5 21.8 21.4 19.4 16.6 6.0 5.0 4.2 0.5 0.6 0.7 23.7 20.3 19.1 15.6

Lupin BUY 1,401 1,370 (2.2) 630,383 10,363 450 40.8 46.4 56.2 39.0 13.7 21.1 34.3 30.2 24.9 21.2 18.7 15.2 9.0 7.2 5.8 0.4 0.4 0.5 28.1 30.0 28.0 11.1

Sun Pharmaceuticals SELL 807 720 (10.8) 1,672,415 27,494 2,072 27.6 31.3 34.6 56.8 13.3 10.7 29.2 25.8 23.3 22.1 16.8 14.5 9.0 6.8 5.4 0.4 0.9 1.1 34.1 30.1 25.9 28.6

Ph a rmaceut ica ls N eut ra l 3,45 5 ,5 0 8 5 6 ,8 0 8 33.1 11.7 15 .3 30 .3 27.1 23.5 22.3 18 .1 15 .1 7.2 5 .9 4.8 0 .4 0 .7 0 .9 23.9 21.7 20 .6 114.4

Rea l E s ta te

DLF ADD 172 210 22.1 306,327 5,036 1,781 5.6 4.0 5.7 24.8 (27.8) 41.4 30.7 42.5 30.1 20.3 18.9 16.0 1.0 1.0 1.0 1.2 1.2 1.2 3.5 2.5 3.4 32.9

Godrej Properties REDUCE 240 225 (6.4) 47,658 784 198 8.0 10.2 12.4 (8.8) 27.0 20.9 29.9 23.5 19.5 22.9 16.3 11.6 2.7 2.4 2.2 0.8 0.8 1.0 9.9 10.8 12.0 1.0

Oberoi Realty BUY 248 325 30.8 81,533 1,340 328 9.5 16.7 26.0 (38.4) 76.0 56.1 26.2 14.9 9.5 17.8 11.8 6.5 1.9 1.7 1.4 0.8 0.8 0.8 7.3 11.8 16.3 1.2

Prestige Estates Projects REDUCE 237 240 1.4 82,810 1,361 350 9.0 12.2 17.5 9.9 35.9 43.4 26.3 19.4 13.5 15.3 12.5 9.6 2.8 2.5 2.1 0.6 0.5 0.5 11.0 13.5 16.8 1.9

Sobha Developers ADD 432 520 20.4 42,359 696 98 24.0 26.7 41.1 8.2 11.4 53.7 18.0 16.2 10.5 9.2 8.4 6.5 1.8 1.7 1.5 1.6 1.6 1.6 10.6 11.0 15.3 1.6

Sunteck Realty ADD 328 410 25.2 19,642 323 60 25.2 10.7 81.2 3,653.8 (57.4) 656.9 13.0 30.5 4.0 9.1 26.7 3.3 3.1 2.9 1.7 0.6 0.6 0.6 26.8 9.7 52.7 0.4

Rea l E s ta te At t ra ct ive 5 8 0 ,329 9 ,5 41 14.9 1.5 6 4.1 26 .4 26 .0 15 .8 17.4 15 .6 10 .9 1.4 1.4 1.3 1.0 1.0 1.0 5 .3 5 .2 8 .0 39 .0



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Tech n o lo g y

HCL Technologies REDUCE 1,674 1,600 (4.4) 1,184,873 19,479 708 89.8 102.3 110.0 57.8 13.9 7.6 18.6 16.4 15.2 12.6 11.3 10.0 5.8 4.6 3.7 1.3 1.3 1.3 36.0 31.5 27.2 24.7

Hexaware Technologies SELL 196 145 (25.9) 59,023 970 302 12.6 10.6 12.3 14.5 (16.4) 16.5 15.5 18.5 15.9 10.3 12.4 10.7 4.9 5.9 5.1 5.6 3.8 3.1 31.6 29.0 34.4 5.0

Infosys ADD 3,702 4,100 10.7 2,115,351 34,776 571 186.3 211.4 242.2 13.0 13.5 14.5 19.9 17.5 15.3 13.6 12.1 10.0 4.8 4.1 3.5 1.7 2.0 2.2 26.3 25.1 24.7 55.4

Mindtree ADD 1,218 1,180 (3.1) 102,261 1,681 84 53.7 63.3 73.8 31.4 18.0 16.5 22.7 19.2 16.5 16.6 13.9 11.6 6.2 5.1 4.2 1.0 1.3 1.5 30.5 29.1 27.7 3.6

Mphasis SELL 445 400 (10.1) 93,431 1,536 210 14.7 35.0 36.8 (58.4) 138.0 5.2 30.2 12.7 12.1 21.4 9.0 8.4 1.8 1.7 1.6 1.6 3.9 4.1 6.1 13.9 13.8 1.5

TCS ADD 2,714 2,800 3.2 5,316,304 87,400 1,959 97.6 113.0 129.9 37.4 15.7 15.0 27.8 24.0 20.9 20.4 17.9 15.2 9.6 8.5 7.0 1.2 2.3 1.9 39.7 37.4 36.6 39.3

Tech Mahindra ADD 2,478 2,650 6.9 590,988 9,716 238 128.0 142.1 166.9 25.6 11.0 17.4 19.4 17.4 14.9 13.3 12.3 10.3 6.4 5.1 4.1 0.9 1.1 0.7 33.5 29.3 27.5 22.3

Wipro ADD 588 650 10.5 1,449,229 23,825 2,463 31.7 35.8 40.8 27.1 13.1 13.9 18.6 16.4 14.4 13.0 10.8 9.1 4.2 3.5 3.0 1.4 1.5 1.7 24.9 23.5 22.5 16.4

T e ch n o lo g y Caut io us 10 ,9 11,46 1 179 ,38 4 29 .6 14.5 13.9 22.8 19 .9 17.5 16 .1 14.1 12.0 6 .3 5 .4 4.5 1.3 2.0 1.8 27.9 27.3 26 .0 16 8 .3

Te le co m

Bharti Airtel ADD 415 415 0.0 1,658,721 27,269 3,997 8.3 14.1 16.7 39.0 69.8 18.0 49.8 29.3 24.9 8.5 7.6 6.5 2.8 2.5 2.4 0.4 0.5 0.8 6.0 9.1 9.9 28.6

Bharti Infratel REDUCE 313 250 (20.0) 590,633 9,710 1,889 8.0 10.7 11.8 51.4 33.1 10.4 38.9 29.2 26.5 13.1 12.0 10.9 3.3 3.3 3.2 1.4 3.1 2.7 8.6 11.2 12.3 —

IDEA BUY 173 185 6.8 622,895 10,240 3,595 5.9 7.8 8.9 94.4 30.9 14.3 29.2 22.3 19.5 10.1 8.8 7.4 3.8 2.7 2.4 0.2 0.4 0.5 12.8 14.2 13.2 25.4

Reliance Communications SELL 105 95 (9.1) 257,797 4,238 2,467 3.2 3.4 5.3 (0.4) 5.7 53.6 32.2 30.5 19.8 9.0 7.0 6.6 1.0 0.8 0.7 — — — 2.4 2.8 3.7 17.3

Tata Communications ADD 371 390 5.2 105,650 1,737 285 1.2 3.0 5.7 104.2 140.8 93.1 300.1 124.6 64.5 7.0 7.1 6.5 13.1 11.7 9.7 — — — 3.1 9.9 16.5 4.7

T e le co m N eut ra l 3,235 ,6 9 5 5 3,19 5 10 7.4 5 1.7 18 .9 43.1 28 .4 23.9 9 .2 8 .1 7.0 2.6 2.3 2.2 0 .5 0 .9 1.0 6 .1 8 .1 9 .0 76 .0

U t ilit ie s

Adani Power SELL 51 40 (22.0) 147,330 2,422 2,872 (1.0) (3.8) (2.1) 88.8 (279.5) 45.5 (50.7) (13.4) (24.5) 12.4 9.8 9.4 2.3 2.7 3.0 — — — (5.4) (18.4) (11.7) 7.3

CESC ADD 783 695 (11.2) 97,794 1,608 125 39.3 56.2 69.9 14.9 42.8 24.4 19.9 13.9 11.2 14.0 9.5 7.5 1.3 1.2 1.1 0.9 1.0 1.0 6.8 8.8 10.1 7.3

JSW Energy SELL 76 62 (18.6) 124,968 2,054 1,640 6.9 8.6 7.6 2.9 24.0 (11.7) 11.0 8.9 10.1 6.8 5.9 5.7 1.9 1.6 1.4 — — — 17.7 19.3 14.4 3.5

NHPC REDUCE 21 24 15.1 230,823 3,795 ##### 1.7 1.9 2.4 (12.6) 12.3 24.9 12.3 11.0 8.8 11.0 9.4 8.3 0.8 0.8 0.8 2.0 2.4 3.1 6.5 7.5 8.9 3.4

NTPC REDUCE 138 135 (2.4) 1,139,935 18,740 8,245 13.3 11.2 12.4 6.8 (15.5) 10.0 10.4 12.3 11.2 9.3 9.9 8.5 1.3 1.2 1.2 4.2 2.4 2.7 13.2 10.4 10.7 16.3

Power Grid BUY 137 145 6.0 715,944 11,770 5,232 8.6 9.5 13.0 (5.0) 9.8 37.5 15.8 14.4 10.5 11.9 9.7 7.8 2.1 1.9 1.7 1.9 2.1 2.8 14.9 13.8 17.1 13.9

Reliance Power SELL 74 62 (16) 206,738 3,399 2,805 3.7 4.0 4.1 1.5 9.4 2.3 20.1 18.4 18.0 24.7 24.3 12.1 1.1 1.0 1.0 — — — 5.4 5.6 5.4 11.6

Tata Power ADD 88 102 16.0 246,251 4,048 2,800 2.1 3.1 6.4 (46.6) 43.2 109.5 41.0 28.6 13.7 8.0 7.8 6.4 1.9 1.6 1.5 1.2 1.4 1.4 4.1 6.2 11.3 9.0

U t ilit ie s Caut io us 3,0 8 0 ,0 16 5 0 ,6 35 10 .2 (4.6 ) 24.6 13.9 14.6 11.7 10 .7 9 .9 8 .2 1.3 1.3 1.2 2.3 1.8 2.1 9 .7 8 .6 10 .0 72.4

O th e r s

Carborundum Universal BUY 208 200 (3.6) 38,969 641 188 4.9 8.2 12.4 1.7 69.0 50.3 42.6 25.2 16.8 17.0 12.1 9.3 3.2 2.9 2.6 0.6 1.0 1.6 7.2 12.9 17.5 0.7

Coromandel International SELL 318 210 (33.9) 89,967 1,479 283 12.6 18.1 20.2 (17.5) 43.4 11.8 25.2 17.6 15.7 13.0 10.3 9.3 3.9 3.4 2.9 1.4 1.4 1.4 15.0 19.8 19.0 1.3

Godrej Industries REDUCE 333 330 (0.9) 111,571 1,834 335 7.7 11.9 15.3 13.8 55.5 28.3 43.4 27.9 21.8 32.3 19.5 14.0 4.1 3.5 3.0 0.5 0.5 0.5 8.8 13.6 15.0 2.9

Havells India ADD 270 280 3.6 168,726 2,774 624 8.0 9.5 11.4 19.9 18.3 21.0 33.8 28.6 23.6 21.0 17.6 14.8 9.9 8.4 7.1 1.1 1.3 1.6 31.2 31.7 32.5 7.6

Info Edge BUY 886 750 (15.4) 96,768 1,591 109 8.4 11.7 17.0 (20.1) 39.4 45.7 105.6 75.7 52.0 91.4 73.7 43.9 11.9 11.1 10.0 0.3 0.5 0.7 12.8 15.2 20.2 2.6

Jaiprakash Associates REDUCE 34 54 61.0 81,597 1,341 2,432 (5.4) 3.8 5.3 (373.8) 170.7 40.2 (6.3) 8.8 6.3 10.3 7.6 6.4 0.7 0.6 0.6 0.0 0.0 0.0 (9.9) 7.3 9.1 41.8

Just Dial ADD 1,728 1,650 (4.5) 120,971 1,989 70 17.1 20.6 32.6 69.2 20.4 57.8 100.8 83.7 53.1 80.4 65.5 38.6 22.6 19.5 16.0 0.3 0.4 0.7 25.0 25.0 33.1 9.5

Rallis India BUY 237 230 (3.1) 46,148 759 194 7.8 10.5 12.6 27.6 34.4 20.4 30.4 22.6 18.8 17.8 13.4 10.9 6.4 5.3 4.4 1.0 1.1 1.1 22.1 25.4 25.2 2.0

Tata Chemicals BUY 397 450 13.5 101,074 1,662 255 (40.5) 30.3 38.5 (357.7) 174.9 27.0 (9.8) 13.1 10.3 9.0 6.6 5.5 1.6 1.4 1.2 2.5 2.5 2.5 (15.9) 11.3 12.7 5.6

UPL ADD 353 370 4.8 151,297 2,487 429 21.8 27.7 31.8 27.3 27.0 14.8 16.2 12.7 11.1 8.3 7.2 6.3 2.9 2.4 2.1 1.1 1.3 1.4 19.8 21.3 20.7 11.7

Others 1,007,088 16,556 (87.8) 1,239.7 26.9 261.0 19.5 15.3 13.2 10.1 8.5 2.9 2.5 2.2 1.0 1.1 1.2 1.1 12.9 14.5 85.9

K IE un ive r s e 6 8 ,8 0 8 ,19 6 1,131,20 2 6 .4 15 .8 16 .7 19 .0 16 .4 14.1 11.5 9 .9 8 .4 2.7 2.5 2.2 1.6 1.7 1.9 14.4 15 .0 15 .6

K IE un ive r s e e x-en e rg y 5 8 ,8 8 5 ,247 9 6 8 ,0 6 9 6 .1 17.5 17.8 21.0 17.9 15 .2 12.9 11.2 9 .4 3.2 2.8 2.5 1.5 1.6 1.7 15 .0 15 .8 16 .5

K IE un ive r s e e x-en e rg y & e x-co mmo d it ie s 5 0 ,9 34,29 7 8 37,35 6 10 .5 16 .7 19 .6 22.2 19 .0 15 .9 14.4 12.6 10 .5 3.4 3.1 2.7 1.2 1.4 1.6 15 .6 16 .2 17.0

Notes:

(a) We have used adjusted book values for banking companies.

(b) 2014 means calendar year 2013, similarly for 2015 and 2016 for these particular companies.

(c) EV/EBITDA excludes banking Sector.

(d) Exchange rate (Rs/US$)= 60.83



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Economy India

"Each of the analysts named below hereby certifies that, with respect to each subject company and its securities for which the analyst is responsible in this report, (1) all of the views expressed in this report accurately reflect his or her personal views about the subject companies and securities, and (2) no part of his or her compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this report: M.B. Mahesh, Tarun Lakhotia."

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ADD. We expect this stock to deliver 5-15% returns over the next 12 months.

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SELL. We expect this stock to deliver <-5% returns over the next 12 months.

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Kotak Institutional Equities Research coverage universe

Distribution of ratings/investment banking relationships

Source: Kotak Institutional Equit ies As of June 30, 2014

Percentage of companies covered by Kotak Institutional

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Percentage of companies within each category for which

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* The above categories are defined as follows: Buy = We

expect this stock to deliver more than 15% returns over the

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5-15% returns over the next 12 months; Reduce = We

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30/06/2014 Kotak Institutional Equit ies Investment Research

had investment ratings on 149 equity securit ies.

15.4%

23.5%

35.6%

25.5%

2.0% 0.7% 2.0% 0.7%

0%

10%

20%

30%

40%

50%

60%

70%

BUY ADD REDUCE SELL

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