Spark Chitra Katha

Page 1

Spark Chitra Katha

A story told through charts...

Spark Chitra Katha

Market data

BSE Sensex 27,932

NSE Nifty 8,454

Date July 15, 2015

Performance (%)

1m 3m 12m

BSE200 6% -4% 17%

Sensex 6% -4% 12%

‘Spark Chitra Katha’ monitors key macro and market data on an ongoing basis. Importantly, look out for the

interesting charts, which highlights evolving trends, extracted and interpreted from the maze of thousands of

macro and market data points.

Households are shifting from physical to financial savings with a clear preference to equity

Though overall household savings declined to 18.2% of GDP in FY14 (20.2% in FY13), financial savings have inched

up to 11.3% of GDP (10.3% in FY13) while physical savings have declined sharply to 10.7% of GDP (12.9% in FY13).

The trend has further strengthened in FY15 as number of new demat accounts have doubled to 1.6m in FY15, from

0.8m new demat accounts opened in FY14. Interestingly, MFs have received Rs. 950bn or $15bn inflows in equity in

the last 12 months, which is equal to the cumulative MFs equity inflows of the previous 10 years (Sep’04-Jun’14). Also,

the domestic institutional investors (DIIs) invested $5bn in the Indian equity market in Jun’15 quarter, the highest in

recent years.

Industrial credit growth slows to a decadal low while services sector credit growth has improved in the last two

months

Industrial credit growth falls to over a decade low of 5.2% in May’15, much lower than the bottom of the previous down

cycle of 14.2% in Nov’09. Credit growth in commercial real estate has also slowed to near 3 year low of 7.5% in

May’15. Petroleum, mining, chemicals, textiles and cement are the major sectors, which have seen sharp fall in credit

growth in the last 12 months. On the other hand, services sector credit growth has inched up to 9.1% in May’15, after

hitting a low of 5.3% in Oct’14, mainly led by pick up in trade credit.

After a good spell in June, rainfall weakens in early July; water level in reservoirs remain above average

While overall rainfall in Jun’15 was16% above normal, it has weakened in the first half of July in all regions except the

north-west. As on 13 Jul’15, India has registered an overall deficit rainfall of 3%. June accounts for ~20% of the

monsoon rainfall while July, August and September account for 32%, 29% and 19% respectively. However, the water

storage position is better than the storage position of last year (up 31%) and the average of last ten years (up 19%).

Broader index trading around average but Healthcare and FMCG still at peak

Sensex PB at 2.7x is still hovering near average of 2.6x. Even current India’s market cap to GDP of 72% is lower than

average of approximately 80%. But on sector level valuations, FMCG and healthcare are trading at almost their peak

price to earnings ratio, so any negative surprises on quarterly earnings numbers may weigh down the performance.

Bottoming out of fundamentals

Indian corporates had the worst quarter in 4Q 15 with negative sales and PAT growth. Margins and asset turnover trend

have suppressed the ROE’s of corporate. With frontloading of government spending in FY16 and the resultant direct

and indirect impact of the same on economic activities, the earnings upgrade cycle is likely to kick in from 2H FY16.

Find Spark Research on Bloomberg (SPAK <go>),

Thomson First Call, Reuters Knowledge and Factset

GAUTAM SINGH [email protected] +91 22 4228 8152

GAURAV NAGORI, CFA [email protected] +91 44 4344 0072

0%

5%

10%

15%

20%

25%

Jul-14 Oct-14 Jan-15 Apr-15 Jul-15

Sensex BSE 200

Page 2

Spark Chitra Katha

Segment-wise contribution to growth, ppt

Source: CSO, Spark Capital Research

Pick up in consumption and investment


Govt. cuts spending to curb fiscal deficit


Imports outpace exports in contraction


ICOR hints at efficient capital utilization


GDP growth in Q4FY15 improves on higher private consumption

Growth

GDP growth picks up in Q4FY15...


-7.2

27.6

-7.9 -15

-10

-5

0

5

10

15

20

25

30

Jun

-12

Sep

-12

Dec-1

2

Mar-

13

Jun

-13

Sep

-13

Dec-1

3

Mar-

14

Jun

-14

Sep

-14

Dec-1

4

Mar-

15

Govt. consumption (%, yoy)

14.1

-0.3 -8.2 -7.0

2.8

-8.7 -15

-10

-5

0

5

10

15

20

25

Jun-1

2

Sep-1

2

Dec-1

2

Mar-

13

Jun-1

3

Sep-1

3

Dec-1

3

Mar-

14

Jun-1

4

Sep-1

4

Dec-1

4

Mar-

15

(%, yoy)

Exports of goods & services Imports of goods & services

4.9

4.8

4.3

3

4

5

6

7

8

Jun-1

2

Sep-1

2

Dec-1

2

Mar-

13

Jun-1

3

Sep-1

3

Dec-1

3

Mar-

14

Jun-1

4

Sep-1

4

Dec-1

4

Mar-

15

Incremental Capital-Output Ratio (ICOR)

6.7 6.6

7.5

3

4

5

6

7

8

9

Jun-1

2

Sep

-12

Dec-1

2

Mar-

13

Jun-1

3

Sep

-13

Dec-1

3

Mar-

14

Jun-1

4

Sep

-14

Dec-1

4

Mar-

15

Real GDP growth (%, yoy)

3.9 3.6 4.02.5

4.4

-0.8

0.2

1.2

2.4

-0.8

-2.0

3.01.4

1.0 1.9

5.2

3.1

-0.9 -0.8

0.2

0.4

-3.3

2.7

1.51.8

Mar-14 Jun-14 Sep-14 Dec-14 Mar-15

C G I (X-M) E&O

7.0

4.2

7.9

-5.2

2.9

5.7

-6

-3

0

3

6

9

12

Jun-1

2

Sep

-12

Dec-1

2

Mar-

13

Jun-1

3

Sep

-13

Dec-1

3

Mar-

14

Jun-1

4

Sep

-14

Dec-1

4

Mar-

15

(%, yoy)

HH consumption Investment (GCF)

Page 3

Spark Chitra Katha

...so is the case with electricity production


IIP growth decelerates in May’15 low...


...led by weaker manufacturing production


Manufacturing PMI hints at weak growth


Mining production growth inches up


Segment-wise weight in IIP (%)


Industrial production growth decelerates in May’15 led by manufacturing sector...

Growth

Mining 14.16

Manufacturing

75.53

Electricity 10.32

5.6

3.42.7

-6

-3

0

3

6

May-1

4

Jun-1

4

Jul-14

Aug

-14

Sep

-14

Oct-

14

No

v-1

4

Dec-1

4

Jan-1

5

Feb

-15

Mar-

15

Ap

r-15

May-1

5

%, yo

y

Industrial Production Index (IIP)

5.9

2.9

-0.3

-1.1

2.7

-5.6

4.7

4.1

3.4

5.1

2.8

4.2

2.2

-8

-4

0

4

8

May-1

4

Jun-1

4

Jul-14

Aug

-14

Sep

-14

Oct-

14

No

v-1

4

Dec-1

4

Jan-1

5

Feb

-15

Mar-

15

Ap

r-15

May-1

5

%, yo

y

Manufacturing

54.5

51.3

44

47

50

53

56

59

62

Mar-

07

Dec-0

7

Sep

-08

Jun-0

9

Mar-

10

Dec-1

0

Sep

-11

Jun-1

2

Mar-

13

Dec-1

3

Sep

-14

Jun-1

5

India manufacturing PMI

2.5

4.8

0.1

1.2 0

.1

4.5

4.0

-1.7

-1.8

1.6

1.1

0.2

2.8

-4

-2

0

2

4

6

May-1

4

Jun-1

4

Jul-14

Aug

-14

Sep

-14

Oct-

14

No

v-1

4

Dec-1

4

Jan-1

5

Feb

-15

Mar-

15

Ap

r-15

May-1

5

%, yo

y

Mining

6.7

-0.5

6.0

-3

0

3

6

9

12

15

18M

ay-1

4

Jun-1

4

Jul-14

Aug

-14

Sep

-14

Oct-

14

No

v-1

4

Dec-1

4

Jan-1

5

Feb

-15

Mar-

15

Ap

r-15

May-1

5

%, yo

y

Electricity

Page 4

Spark Chitra Katha

Cap goods production weakens


Consumer goods production falls led by...


...both durables and non-durables prod


Basic goods production growth


Intermediate goods production growth


Segment-wise weight in IIP (%)


…capital goods and consumer goods production drag the IIP growth

Growth

4.6

-8.8 -5

.9

-6.2 -4.0

-18.2

-1.6

0.6

-1.9

4.9

-0.4

3.0

-1.6

-20

-15

-10

-5

0

5

10

May-1

4

Jun-1

4

Jul-14

Aug

-14

Sep

-14

Oct-

14

No

v-1

4

Dec-1

4

Jan-1

5

Feb

-15

Mar-

15

Ap

r-15

May-1

5

%, yo

y

Consumer Goods

Capital Goods 8.8

Consumer Goods:

Durables 8.5

Consumer Goods:

Non Durables

21.3

Basic Goods 45.7

Intermediate Goods

15.7

4.2 2

3.3

-3.0

-10.0

12.3

-3.2

7.0 6.1

12.4

8.3

8.7 6.8

1.8

-20

-15

-10

-5

0

5

10

15

20

25

May-1

4

Jun-1

4

Jul-14

Aug

-14

Sep

-14

Oct-

14

No

v-1

4

Dec-1

4

Jan-1

5

Feb

-15

Mar-

15

Ap

r-15

May-1

5

%, yo

y

Capital Goods

3.6

1.3

-3.9

5.24.2

-0.1

-35

-30

-25

-20

-15

-10

-5

0

5

10

15

May-1

4

Jun-1

4

Jul-14

Aug

-14

Sep

-14

Oct-

14

No

v-1

4

Dec-1

4

Jan-1

5

Feb

-15

Mar-

15

Ap

r-15

May-1

5

%, yo

y

Durables Non Durables

7.5

2.6

6.4

0

2

4

6

8

10

12

May-1

4

Jun-1

4

Jul-14

Aug

-14

Sep

-14

Oct-

14

No

v-1

4

Dec-1

4

Jan-1

5

Feb

-15

Mar-

15

Ap

r-15

May-1

5

%, yo

y

Basic Goods

3.5

2.5

1.2

-4

-2

0

2

4

6M

ay-1

4

Jun-1

4

Jul-14

Aug

-14

Sep

-14

Oct-

14

No

v-1

4

Dec-1

4

Jan-1

5

Feb

-15

Mar-

15

Ap

r-15

May-1

5

%, yo

y

Intermediate Goods

Page 5

Spark Chitra Katha

Core sector production rebounds in May’15

Source: Ministry of Commerce and Industry

Electricity production growth


Production growth of Natural Gas & Crude


Fertilizer production growth


Steel and cement production growth


Coal and refinery production growth


Growth Seven of the eight core infra-related sectors slip into expansion zone in May’15 versus merely two in Apr’15

6.7

-1.1

5.5

-2

0

2

4

6

8

10

12

14

16

May-1

4

Jun-1

4

Jul-14

Aug

-14

Sep

-14

Oct-

14

No

v-1

4

Dec-1

4

Jan-1

5

Feb

-15

Mar-

15

Ap

r-15

May-1

5

%, yo

y

Electricity

-0.3

-2.7

0.8

-2.2-3.5

-3.1

-10

-5

0

5

May-1

4

Jun-1

4

Jul-14

Aug

-14

Sep

-14

Oct-

14

No

v-1

4

Dec-1

4

Jan-1

5

Feb

-15

Mar-

15

Ap

r-15

May-1

5

%, yo

y

Crude Oil Natural Gas

3.3 2

.6

8.4

2.5

-5

0

5

10

15

20M

ay-1

4

Jun-1

4

Jul-14

Aug

-14

Sep

-14

Oct-

14

No

v-1

4

Dec-1

4

Jan-1

5

Feb

-15

Mar-

15

Ap

r-15

May-1

5

%, yo

y

Steel Cement

5.4 7

.9

7.8

-1.8 -2.9

7.8

-10

-5

0

5

10

15

20

May-1

4

Jun-1

4

Jul-14

Aug

-14

Sep

-14

Oct-

14

No

v-1

4

Dec-1

4

Jan-1

5

Feb

-15

Mar-

15

Ap

r-15

May-1

5

%, yo

y

Coal Ref inery Products

17.5

-1.1

-4.3 -4

.3

-11.6

-7.0

-2.8

-1.5

7.1

-0.4

5.2

-0.1

1.3

May-1

4

Jun-1

4

Jul-14

Aug

-14

Sep

-14

Oct-

14

No

v-1

4

Dec-1

4

Jan-1

5

Feb

-15

Mar-

15

Ap

r-15

May-1

5

%, yo

y

Fertilizers

5.6

1.4

-0.1

-0.4

4.4

-3

0

3

6

9

Ap

r-14

May-1

4

Jun-1

4

Jul-14

Aug

-14

Sep

-14

Oct-

14

No

v-1

4

Dec-1

4

Jan-1

5

Feb

-15

Mar-

15

Ap

r-15

May-1

5

%, yo

y

Eight core industries index

Page 6

Spark Chitra Katha

MHCV exports pick up sharply

Source: SIAM, Spark Capital Research

…LCV sales remain a major drag


-12.5

-10.5

20.7

-20

-10

0

10

20

30

40

50

60

Jun-1

4

Jul-14

Aug

-14

Sep

-14

Oct-

14

No

v-1

4

Dec-1

4

Jan-1

5

Feb

-15

Mar-

15

Ap

r-15

May-1

5

Jun-1

5

%, yo

y

LCV: Domestic sales MHCV: Domestic sales

6.5

13.6

47.2

-30-20-10

01020304050607080

Jun-1

4

Jul-14

Aug

-14

Sep

-14

Oct-

14

No

v-1

4

Dec-1

4

Jan-1

5

Feb

-15

Mar-

15

Ap

r-15

May-1

5

Jun-1

5

%, yo

y

LCV exports MHCV exports

CV sales start losing momentum…


Passenger vehicle exports take a hit


Two wheeler sales inch up


Three wheeler sales are down


Auto sales: Losing steam again

Growth

-9.1

0.7

21.025.2

-20

-10

0

10

20

30

40

Jun-1

4

Jul-14

Aug

-14

Sep

-14

Oct-

14

No

v-1

4

Dec-1

4

Jan-1

5

Feb

-15

Mar-

15

Ap

r-15

May-1

5

Jun-1

5

%, yo

y

CV: Domestic sales CV exports

11.2

-0.5

-21.7-30

-20

-10

0

10

20

30

40

Jun-1

4

Jul-14

Aug

-14

Sep

-14

Oct-

14

No

v-1

4

Dec-1

4

Jan-1

5

Feb

-15

Mar-

15

Ap

r-15

May-1

5

Jun-1

5

%, yo

y

PV: Domestic sales PV exports

3.5

26.8

-20

-10

0

10

20

30

40Jun-1

4

Jul-14

Aug

-14

Sep

-14

Oct-

14

No

v-1

4

Dec-1

4

Jan-1

5

Feb

-15

Mar-

15

Ap

r-15

May-1

5

Jun-1

5

%, yo

y

2-Wheeler sales: Domestic 2-Wheeler exports

-7.4

18.1

-40

-20

0

20

40

60

80

100

-20

-10

0

10

20

30

40

Jun-1

4

Jul-14

Aug

-14

Sep

-14

Oct-

14

No

v-1

4

Dec-1

4

Jan-1

5

Feb

-15

Mar-

15

Ap

r-15

May-1

5

Jun-1

5

%, yo

y

3-Wheeler sales: Domestic 3-Wheeler exports

Page 7

Spark Chitra Katha

Cargo traffic growth holds up

Source: CEIC, Spark Capital Research

Lead indicators hint at pick up in economic activities albeit at a gradual pace

RBI’s survey shows upbeat urban consumer confidence

Source: RBI, Spark Capital Research

Real rural wage growth turns positive after nine months

Source: RBI Spark Capital Research

Growth

Near double digit increase in foreign tourist arrivals May’15


0.4

9.2

-5

0

5

10

15

20

Feb

-10

May-1

0

Aug

-10

No

v-1

0

Feb

-11

May-1

1

Aug

-11

No

v-1

1

Feb

-12

May-1

2

Aug

-12

No

v-1

2

Feb

-13

May-1

3

Aug

-13

No

v-1

3

Feb

-14

May-1

4

Aug

-14

No

v-1

4

Feb

-15

May-1

5

Foreign Tourist Arrivals (yoy, %) 3-month moving average

4.5

-8

-6

-4

-2

0

2

4

6

8

10

Mar-

10

Jun-1

0

Sep

-10

Dec-1

0

Mar-

11

Jun-1

1

Sep

-11

Dec-1

1

Mar-

12

Jun-1

2

Sep

-12

Dec-1

2

Mar-

13

Jun-1

3

Sep

-13

Dec-1

3

Mar-

14

Jun-1

4

Sep

-14

Dec-1

4

Mar-

15

Jun-1

5

Cargo Traf f ic growth (ytd, %, yoy)

17.3

5.7

1.0

-5

0

5

10

15

20

25

Sep-0

5

Fe

b-0

6

Jul-06

Dec-0

6

May-0

7

Oct-

07

Mar-

08

Aug-0

8

Jan-0

9

Jun-0

9

Nov-0

9

Apr-

10

Sep-1

0

Fe

b-1

1

Jul-11

Dec-1

1

May-1

2

Oct-

12

Mar-

13

Aug-1

3

Jan-1

4

Jun-1

4

Nov-1

4

Apr-

15

Rural wage growth: Nominal ( % yoy) Rural wage growth:Real ( % yoy)

117

87

109

119

88

127

80

90

100

110

120

130

Dec-1

0

Fe

b-1

1

Apr-

11

Jun-1

1

Aug-1

1

Oct-

11

Dec-1

1

Fe

b-1

2

Apr-

12

Jun-1

2

Aug-1

2

Oct-

12

Dec-1

2

Fe

b-1

3

Apr-

13

Jun-1

3

Aug-1

3

Oct-

13

Dec-1

3

Fe

b-1

4

Apr-

14

Jun-1

4

Aug-1

4

Oct-

14

Dec-1

4

Fe

b-1

5

Consumer Confidence Survey: Current Situation Index

Consumer Confidence Survey: Future Expectations Index

Page 8

Spark Chitra Katha

Lowering differential between petrol and diesel prices leading to sales mix reversal favoring Petrol PV

Petrol and Diesel price differential in downtrend

Source: Bloomberg, Spark Capital Research

Diesel and Petrol PV vehicles sales mix

Source: Industry, Spark Capital Research

Structurally declining kerosene volume

Source: PPAC, Spark Capital Research

Petrol versus Diesel YoY volume growth

Source: PPAC, Spark Capital Research

-5

0

5

10

15

20

Jun

-12

Aug

-12

Oct-

12

Dec-1

2

Feb-1

3

Ap

r-13

Jun

-13

Aug

-13

Oct-

13

Dec-1

3

Feb-1

4

Ap

r-14

Jun

-14

Aug

-14

Oct-

14

Dec-1

4

Feb-1

5

Ap

r-15

Petrol (% YoY 3mma) Diesel (% YoY 3mma)

0

5

10

15

20

25

30

35

Jun

-11

Oct-

11

Feb-1

2

Jun

-12

Oct-

12

Feb-1

3

Jun

-13

Oct-

13

Feb-1

4

Jun

-14

Oct-

14

Feb-1

5

Jun

-15

Mumbai Petrol-Diesel differential (Rs/Ltr)

8478 75

6553

42 4755

1622 25

3547

58 5345

0

10

20

30

40

50

60

70

80

90

100

FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15

Diesel (%) Petrol (%)

-20

-15

-10

-5

0

5

10

15

Jun

-12

Aug

-12

Oct-

12

Dec-1

2

Feb-1

3

Ap

r-13

Jun

-13

Aug

-13

Oct-

13

Dec-1

3

Feb-1

4

Ap

r-14

Jun

-14

Aug

-14

Oct-

14

Dec-1

4

Feb-1

5

Ap

r-15

LPG (% YoY 3mma) Kerosene (% YoY 3mma)

Growth

Page 9

Spark Chitra Katha

Non-discretionary demand takes a hit while discretionary demand shows mixed signals

Cement Volume- No pick up in uptake since 1Q’15 growth trend

Source: Company sources

Consumer staples- Weak Volume growth since 1FY12


Consumer discretionary- Retail yet to see growth


India Pharma players- USA ANDA approvals pick up after Q315


-10%

-5%

0%

5%

10%

15%

20%

1Q

FY

12

2Q

FY

12

3Q

FY

12

4Q

FY

12

1Q

FY

13

2Q

FY

13

3Q

FY

13

4Q

FY

13

1Q

FY

14

2Q

FY

14

3Q

FY

14

4Q

FY

14

1Q

FY

15

2Q

FY

15

3Q

FY

15

4Q

FY

15

Top three players volume growth%

Regional players

0%

4%

8%

12%

16%

20%

1Q

FY

12

2Q

FY

12

3Q

FY

12

4Q

FY

12

1Q

FY

13

2Q

FY

13

3Q

FY

13

4Q

FY

13

1Q

FY

14

2Q

FY

14

3Q

FY

14

4Q

FY

14

1Q

FY

15

2Q

FY

15

3Q

FY

15

4Q

FY

15

Colgate Dabur Hindustan Unilever Marico

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

1Q

FY

12

2Q

FY

12

3Q

FY

12

4Q

FY

12

1Q

FY

13

2Q

FY

13

3Q

FY

13

4Q

FY

13

1Q

FY

14

2Q

FY

14

3Q

FY

14

4Q

FY

14

Titan-Watches Asian Paints- Decorative

Jubilant-SSSG Shoppers stop-SSSG

0

5

10

15

20

25

30

35

40

45

50

Q4F

Y12

Q1F

Y13

Q2F

Y13

Q3F

Y13

Q4F

Y13

Q1F

Y14

Q2F

Y14

Q3F

Y14

Q4F

Y14

Q1F

Y15

Q2F

Y15

Q3F

Y15

Q4F

Y15

Q1F

Y16

ANDA Approvals

Growth

Page 10

Spark Chitra Katha

Number of new demat accounts grew 100% in FY15 over FY14

Source: NSDL, Spark Capital Research

Growth

Household financial savings has turned around

Source: RBI

Last 12 months equity inflows of MFs at $15bn are equal to the

cumulative MFs equity inflows of the previous 10 years

Source: AMFI, Spark Capital Research

DIIs invested $5bn in equity in Jun’15 quarter, the highest in recent

years


Households are shifting from physical to financial savings with a clear preference to equity

10.6

10.3

11.3

15.1

12.9

10.7

8.0

9.0

10.0

11.0

12.0

13.0

14.0

15.0

16.0

FY12 FY13 FY14

(% of GDP)

HH Financial savings HH Physical savings

1.0 1.1

0.8

1.6

FY12 FY13 FY14 FY15

New demat accounts (mn)

-4.4

0.5

-3.4 -3.5

-6.3

-1.3 -0.6

-4.7

-2.4 -2.7

-0.4

0.3

-0.9

5.0

-8.0

-6.0

-4.0

-2.0

0.0

2.0

4.0

6.0

Mar/

12

Jun/1

2

Sep/1

2

Dec/1

2

Mar/

13

Jun/1

3

Sep/1

3

Dec/1

3

Mar/

14

Jun/1

4

Sep/1

4

Dec/1

4

Mar/

15

Jun/1

5

DII Investment in Equity ($bn)

-100

-50

0

50

100

150

Jun/0

4

Dec/0

4

Jun/0

5

Dec/0

5

Jun/0

6

Dec/0

6

Jun/0

7

Dec/0

7

Jun/0

8

Dec/0

8

Jun/0

9

Dec/0

9

Jun/1

0

Dec/1

0

Jun/1

1

Dec/1

1

Jun/1

2

Dec/1

2

Jun/1

3

Dec/1

3

Jun/1

4

Dec/1

4

Jun/1

5

Net equity flows in MFs (Rs. bn)

Cumulative MF inflows in equity during Sep'04-Jun'14 = Rs. 950bn

(the same amount MFs received in last 12 months)

Rs 950

bn

Page 11

Spark Chitra Katha

Rainfall in South Peninsula is below normal while NW is in surplus

Source: IMD

Monsoon

Rainfall loses strength in the first week of July…

Source: IMD

…cumulative rainfall slips 3% below the long period average

Source: IMD

…but 19% higher water storage is a saving grace

Source: CWC Note: Data is as on 9-July’15

After a good spell in June, rainfall weakens in early July; water level in reservoirs remain above average

60%

41% 40% 37% 34%

19% 19% 16% 13% 13%

-18% -24%

This year's water storage vs. last 10 years avg. %

-12%

-8% -7%

-3%

26%

South Peninsula Central India East & North East India

India (total) North West India

Subdivision-wise rainfall distribution (% of LPA)

Note: Data is as on 13-July’15

Page 12

Spark Chitra Katha

CPI inflation inches up led by…


...rural inflation, at 6.1% in Jun’15…


…while urban inflation at 4.6%


Rural CPI inflation is marching ahead of urban

Food, Housing and Services have led the softening in inflation


Inflation

6.8

5.6

5.0 5.4

3

4

5

6

7

8

9

10

Jun-1

4

Jul-14

Aug

-14

Sep

-14

Oct-

14

No

v-1

4

Dec-1

4

Jan-1

5

Feb

-15

Mar-

15

Ap

r-15

May-1

5

Jun-1

5

%, yo

y

CPI inf lation

7.4

5.5

6.1

3

4

5

6

7

8

9

10Jun-1

4

Jul-14

Aug

-14

Sep

-14

Oct-

14

No

v-1

4

Dec-1

4

Jan-1

5

Feb

-15

Mar-

15

Ap

r-15

May-1

5

Jun-1

5

%, yo

y

CPI inf lation: Rural

6.1

4.4

4.6

3

4

5

6

7

8

9

Jun-1

4

Jul-14

Aug

-14

Sep

-14

Oct-

14

No

v-1

4

Dec-1

4

Jan-1

5

Feb

-15

Mar-

15

Ap

r-15

May-1

5

Jun-1

5

%, yo

y

CPI inf lation: Urban

CPI inflation break-up

Jun-15 May-15 Jun-14

CPI (wt:100) 5.4 5.0 6.8

Core CPI (wt:47.3) 5.0 4.7 6.7

Food (wt:45.9) 5.7 5.1 7.3

Fuel (wt:6.8) 5.9 6.0 4.5

Clothing (wt:6.5) 6.3 6.0 8.2

Housing (wt:10.1) 4.5 4.6 6.8

Services (wt:28.3) 4.2 3.8 6.1

1.1 1.2 1.2 1.1 0.9 0.7 0.8 0.9 1.0 0.9 0.8 0.9 1.0

2.4 2.8 2.7 2.0

1.4 0.7

1.5 2.1 2.1 2.1 1.9 1.8 1.9

0.3 0.3 0.3

0.2 0.2

0.2 0.2

0.3 0.4 0.4 0.4 0.4 0.4

0.6 0.6 0.6

0.5 0.5

0.4 0.4

0.5 0.5 0.5 0.4 0.4 0.4

0.7 0.7 0.7

0.6

0.5

0.4

0.5

0.6 0.6 0.5 0.5 0.5 0.5

1.7 1.8 1.6

1.2

1.1

0.8

0.9

0.9 0.9 0.9 0.9 1.1

1.2

6.8

5.4

0

1

2

3

4

5

6

7

8

9

Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15

Contribution to CPI inflation, ppt

MSP linked food (wt:16.9%) Non-MSP linked food (32:5%) Fuel & Light

Clothing & Footwear Housing Services

CPI

Page 13

Spark Chitra Katha

WPI inflation remains in negative zone…

Source: Office of the Economic Adviser

…led by lower oil prices


Manufactured index up 0.2% m/m


WPI Inflation: Sharp fall in fuel inflation and weak pricing power of corporates keep WPI inflation in –ve zone

Contribution to inflation: Fuel index pulls WPI inflation into –ve zone

Source: Office of the Economic Adviser, Spark Capital Research

Inflation

4.1

-0.9

5.7

-2.4-3

-2

-1

0

1

2

3

4

5

6

7

Jun-1

4

Jul-14

Aug

-14

Sep

-14

Oct-

14

No

v-1

4

Dec-1

4

Jan-1

5

Feb

-15

Mar-

15

Ap

r-15

May-1

5

Jun-1

5

%, yo

y

Core WPI WPI inf lation

3.8 2.9

-10.5

-10.0

-20

-15

-10

-5

0

5

10

15

Jun-1

4

Jul-14

Aug

-14

Sep

-14

Oct-

14

No

v-1

4

Dec-1

4

Jan-1

5

Feb

-15

Mar-

15

Ap

r-15

May-1

5

Jun-1

5

%, yo

y

Food inf lation Fuel inf lation

0.2

0.4

0.1

-0.1

-0.1

-0.4

-0.3

-0.1

-0.3

-0.1

0.0

0.1

0.1

Jun-1

4

Jul-14

Aug

-14

Sep

-14

Oct-

14

No

v-1

4

Dec-1

4

Jan-1

5

Feb

-15

Mar-

15

Ap

r-15

May-1

5

Jun-1

5

%, m

om

Manufactured products index (%, mom)

2.8 2.3

0.4

1.8 1.7

-1.9 -1.8

1.7 2.2

0.6

-0.4

-2.4 D

ec-1

3

Jan-1

4

Fe

b-1

4

Mar-

14

Apr-

14

May-1

4

Jun-1

4

Jul-14

Aug-1

4

Sep-1

4

Oct-

14

Nov-1

4

Dec-1

4

Jan-1

5

Fe

b-1

5

Mar-

15

Apr-

15

May-1

5

Jun-1

5

ppt

Primary Articles Fuel & Power Manufactured WPI

WPI Inflation slips into negative territory

(%, yoy) Weight Jun'14 May'15 Jun'15

WPI (A+B+C) 100.0 5.7 -2.4 -2.4

Primary (i+ii = A) 20.1 7.0 -0.8 -0.8

Food (i) 14.3 8.3 3.8 2.9

Non-food (ii) 5.8 3.9 -11.8 -9.8

Fuel (B) 14.9 9.0 -10.5 -10.0

Manufactured (iii + iv = C) 65.0 3.9 -0.6 -0.8

Food products (iii) 10.0 3.3 -0.6 -0.1

Core WPI (iv) 55.0 4.1 -0.6 -0.9

Page 14

Spark Chitra Katha

RBI cuts repo rate in Jun’15 (Total 75bps)


No change in SLR and CRR


Banks’ base rate down 25bps since Apr’15


Liquidity situation


10-year G-sec yields soften


Yield curve


RBI cuts repo rate by 25pbs in Jun’15; Transmission of monetary easing taking place but at a gradual pace

Interest Rates

7.25

6.25

8.25

6

7

8

9

10

11

Fe

b-1

3

Ap

r-1

3

Ju

n-1

3

Au

g-1

3

Oct-

13

De

c-1

3

Fe

b-1

4

Ap

r-1

4

Ju

n-1

4

Au

g-1

4

Oct-

14

De

c-1

4

Fe

b-1

5

Ap

r-1

5

Ju

n-1

5

%

Repo Reverse Repo MSF rate

4.0

4.0

23.0

21.5021.0

21.5

22.0

22.5

23.0

23.5

3.0

3.5

4.0

4.5

5.0

Fe

b-1

3

Ap

r-1

3

Ju

n-1

3

Au

g-1

3

Oct-

13

De

c-1

3

Fe

b-1

4

Ap

r-1

4

Ju

n-1

4

Au

g-1

4

Oct-

14

De

c-1

4

Fe

b-1

5

Ap

r-1

5

Ju

n-1

5

CRR (%) SLR (%) - RHS

9.98

10.13

9.88

9.8

9.9

10.0

10.1

10.2

Feb

-13

Ap

r-13

Jun-1

3

Aug

-13

Oct-

13

Dec-1

3

Feb

-14

Ap

r-14

Jun-1

4

Aug

-14

Oct-

14

Dec-1

4

Feb

-15

Ap

r-15

Jun-1

5

Base Rate: Five Major Banks (%)

14

-300-250-200-150-100-50

050

100150200250

Ap

r-14

Jun-1

4

Aug

-14

Oct-

14

Dec-1

4

Feb

-15

May-1

5

Jul-15

LAF + MSF (7D moving avg.) - Rs. bn

7.9

6.0

7.0

8.0

9.0

10.0

Jan/1

0

Jun/1

0

Nov/1

0

Apr/

11

Sep/1

1

Fe

b/1

2

Jul/12

Dec/1

2

May/1

3

Oct/

13

Mar/

14

Aug/1

4

Jan/1

5

Jun/1

5

India 10 year Gsec yield (%)

8

8

9

9

10

3M 6M 1Y 2Y 3Y 4Y 5Y 7Y 9Y 10Y 15Y

%

Current 1M back 6M back 1Y back

Page 15

Spark Chitra Katha

Deposit growth inches up


CD ratio marginally up at ~76


Investment deposit ration at a 2 year high


Forex reserves at a historic high


Import covers at ~11months


RBI continues to intervene in the forex mkt


Deposit growth is gradually improving while credit growth remains in single digit

Monetary Conditions

11.4

9.38

9

10

11

12

13

14

15

27-J

un-1

4

25-J

ul-14

22-A

ug

-14

19-S

ep

-14

17-O

ct-

14

14-N

ov-1

4

12-D

ec-1

4

9-J

an-1

5

6-F

eb

-15

6-M

ar-

15

3-A

pr-

15

1-M

ay-1

5

29-M

ay-1

5

26-J

un-1

5

%, yo

y

Deposit growth Credit growth

75.7

75

76

77

78

27-J

un-1

4

25-J

ul-14

22-A

ug

-14

19-S

ep

-14

17-O

ct-

14

14-N

ov-1

4

12-D

ec-1

4

9-J

an-1

5

6-F

eb

-15

6-M

ar-

15

3-A

pr-

15

1-M

ay-1

5

29-M

ay-1

5

26-J

un-1

5

Credit Deposit Ratio (%)

29.7

28

29

30

31

27-J

un-1

4

25-J

ul-14

22-A

ug

-14

19-S

ep

-14

17-O

ct-

14

14-N

ov-1

4

12-D

ec-1

4

9-J

an-1

5

6-F

eb

-15

6-M

ar-

15

3-A

pr-

15

1-M

ay-1

5

29-M

ay-1

5

26-J

un-1

5

Investment Deposit Ratio (%)

354.5

300

310

320

330

340

350

360

20-J

un-1

4

1-A

ug

-14

12-S

ep

-14

24-O

ct-

14

5-D

ec-1

4

16-J

an-1

5

27-F

eb

-15

10-A

pr-

15

22-M

ay-1

5

3-J

ul-15

US

$, b

n

Foreign Exchange Reserves ($, bn)

-0.5

7.8

5.9

1.8

2.6

5.5

-0.5

1.4

2.7 3.1

6.7

12.1

7.9

7.7

5.4

2.6

Feb

-14

Mar-

14

Ap

r-14

May-1

4

Jun-1

4

Jul-14

Aug

-14

Sep

-14

Oct-

14

No

v-1

4

Dec-1

4

Jan-1

5

Feb

-15

Mar-

15

Ap

r-15

May-1

5

US

$, b

n

RBI Intervention: Net US$ Purchase

8.2

8.0

8.5

7.2

8.0

7.4

9.1

10.2

9.6

10.7

10.8

10.9

Jun-1

4

Jul-14

Aug-1

4

Sep-1

4

Oct-

14

Nov-1

4

Dec-1

4

Jan-1

5

Fe

b-1

5

Mar-

15

Apr-

15

May-1

5

Jun-1

5

Import cover (no. of month)

Page 16

Spark Chitra Katha

Credit growth in commercial real estate has slowed to near 3 year

low of 7.5% in May’15

Source: MOSPI, Spark Capital Research

Monetary Conditions

Industrial credit growth falls to over a decade low in May’15, much lower

than the 14.2% growth in the previous down cycle

Source: Ministry of Statistics and Programme Implementation (MOSPI)

Sector-wise credit growth: Petroleum, mining, chemicals, textiles

and cement sectors have seen sharp fall in credit growth

Source: SEBI, Spark Capital Research

Services sector credit growth has inched up to 9.1% in May’15, after

hitting a low of 5.3% in Oct’15

Source: CGA, Spark Capital Research

Industrial credit growth slows to a decadal low, services sector credit growth has improved in the last two months

7.5

0

5

10

15

20

25

Sep

-11

Nov-1

1

Jan

-12

Mar-

12

May-1

2

Jul-12

Sep

-12

Nov-1

2

Jan

-13

Mar-

13

May-1

3

Jul-13

Sep

-13

Nov-1

3

Jan

-14

Mar-

14

May-1

4

Jul-14

Sep

-14

Nov-1

4

Jan

-15

Mar-

15

May-1

5

Credit growth in commercial real estate (%, yoy)

37.0

14.2

5.2 0

5

10

15

20

25

30

35

40

May-0

4

Nov-0

4

May-0

5

Nov-0

5

May-0

6

Nov-0

6

May-0

7

Nov-0

7

May-0

8

Nov-0

8

May-0

9

Nov-0

9

May-1

0

Nov-1

0

May-1

1

Nov-1

1

May-1

2

Nov-1

2

May-1

3

Nov-1

3

May-1

4

Nov-1

4

May-1

5

Industrial credit growth (%, yoy) (Share in total credit: 45%)

9.4

10.0

6.3

8.8

21.2

14.7

13.7

16.1

10.7

12.8

15.7

28.2

10.3

14.9

13.4

11.2

22.7

-10.2

-5.3

-0.3

0.9

1.4

1.9

2.9

3.3

3.8

4.3

5.4

5.7

6.5

7.0

8.3

8.6

11.1

Apr-14 May-15

5.3

9.1

0

5

10

15

20

25

Jul-12

Sep-1

2

Nov-1

2

Jan-1

3

Mar-

13

May-1

3

Jul-13

Sep-1

3

Nov-1

3

Jan-1

4

Mar-

14

May-1

4

Jul-14

Sep-1

4

Nov-1

4

Jan-1

5

Mar-

15

May-1

5

Services credit growth (%, yoy) (Share in total credit: 24%)

Page 17

Spark Chitra Katha

Bank credit: Industry loan growth slips to 5.2% while services loan growth hits a six month high in May…

Monetary Conditions

Share (%) (Rs. Bn)

May-15 May-15 May-15 Apr-15 Mar-15 Feb-15 Jan-15 Dec-14 May-14

I Gross Bank Credit (II + III) 100.0 61,516 8.5 8.7 8.6 9.3 9.6 9.6 12.7

II Food Credit 1.7 1,027 -11.9 -2.2 8.9 5.1 3.7 -0.5 0.7

III Non-food Credit (1 to 4) 98.3 60,489 9.0 8.9 8.6 9.4 9.7 9.8 13.0

1 Agriculture & Allied Activities 12.6 7,779 11.0 14.1 15.0 16.5 16.6 18.3 16.8

2 Industry (Micro & Small, Medium and Large ) 42.9 26,389 5.2 6.4 5.6 6.0 6.6 6.8 11.3

3 Services 23.4 14,372 9.1 7.5 5.7 7.0 7.5 6.9 13.1

3.1 Transport Operators 1.5 921 3.8 2.1 -0.8 -0.7 0.2 2.6 6.9

3.2 Computer Software 0.3 178 -0.5 4.1 -7.4 -7.1 -4.9 -3.4 -6.6

3.3 Tourism, Hotels and Restaurants 0.6 369 -7.0 -3.7 -7.1 -8.0 -8.7 -7.0 7.7

3.4 Shipping 0.2 105 6.2 5.8 -1.2 3.8 1.0 4.9 9.3

3.5 Professional Services 1.4 844 5.2 17.6 6.0 5.1 5.5 5.3 12.6

3.6 Trade 6.0 3,702 14.9 13.7 12.2 10.6 11.0 8.9 12.6

3.6.1 Wholesale Trade (other than food procurement) 2.9 1,806 11.3 6.5 7.5 7.0 7.0 4.6 8.3

3.6.2 Retail Trade 3.1 1,896 18.4 21.4 17.3 14.6 15.4 13.5 17.3

3.7 Commercial Real Estate 2.7 1,659 7.5 8.8 8.6 14.3 13.6 15.1 17.8

3.8 Non-Banking Financial Companies (NBFCs) 5.2 3,206 5.6 3.3 6.1 7.1 5.3 3.3 20.2

3.9 Other Services 5.5 3,389 12.8 5.4 1.5 5.2 8.5 8.5 9.0

4 Personal Loans 19.4 11,949 16.6 13.3 15.5 16.0 15.8 15.1 14.8

4.1 Consumer Durables 0.3 157 13.1 13.8 19.3 21.2 35.4 43.6 56.4

4.2 Housing (Including Priority Sector Housing) 10.5 6,484 17.1 17.4 16.7 17.4 16.7 16.0 17.0

4.3 Advances against Fixed Deposits 1.0 603 10.5 6.7 -1.7 7.0 7.8 2.4 -8.8

4.4 Advances to Individuals against share, bonds, etc. 0.1 51 59.2 58.6 42.2 26.5 26.7 23.0 8.2

4.5 Credit Card Outstanding 0.5 324 23.0 22.9 22.5 22.7 22.8 24.1 14.2

4.6 Education 1.0 635 5.7 6.2 5.5 5.5 6.1 6.3 8.7

4.7 Vehicle Loans 2.1 1,297 16.8 -5.3 17.2 16.1 16.4 15.5 21.8

4.8 Other Personal Loans 3.9 2,398 18.9 16.4 18.3 16.7 16.1 16.2 13.2

Growth (yoy, %)


Page 18

Spark Chitra Katha

Bank credit: Loan growth in energy, mining, chemical and textile sectors has taken the biggest hit…

Monetary Conditions


Share (%) (Rs. Bn)


2.1 Mining & Quarrying (incl. Coal) 1.4 357 -5.3 0.8 0.3 0.7 0.9 3.5 17.5

2.2 Food Processing 6.3 1,662 11.1 13.4 17.3 13.5 12.8 12.1 21.8

2.2.1 Sugar 1.5 407 11.3 16.8 20.2 11.6 11.1 13.1 6.5

2.2.2 Edible Oils & Vanaspati 0.8 204 -3.0 -3.8 -1.1 -5.5 -0.7 -6.7 17.5

2.2.3 Tea 0.1 32 8.4 7.3 -1.4 1.9 5.6 -1.0 12.0

2.2.4 Others 3.9 1,020 14.4 16.5 21.3 19.2 16.9 17.3 31.0

2.3 Beverage & Tobacco 0.7 184 2.9 5.5 2.0 9.5 13.7 14.4 18.1

2.4 Textiles 7.6 2,010 0.9 1.5 -0.1 0.6 1.5 3.1 8.6

2.4.1 Cotton Textiles 3.7 990 -0.2 0.1 -0.7 0.7 1.4 2.7 8.4

2.4.2 Jute Textiles 0.1 22 4.6 8.8 11.9 13.2 14.1 20.7 -9.3

2.4.3 Man-Made Textiles 0.8 211 3.6 -0.4 -5.6 -3.6 -4.5 -4.7 7.6

2.4.4 Other Textiles 3.0 787 1.5 3.7 1.7 1.5 3.1 5.3 9.7

2.5 Leather & Leather Products 0.4 103 5.4 3.6 0.4 1.3 4.4 4.8 10.3

2.6 Wood & Wood Products 0.4 98 3.3 7.8 4.3 4.8 3.9 6.3 18.6

2.7 Paper & Paper Products 1.3 340 4.3 4.2 3.8 5.2 6.2 8.6 11.0

2.8 Petroleum, Coal Products & Nuclear Fuels 2.0 523 -10.2 -4.4 -13.4 -6.6 -4.5 -7.4 9.0

2.9 Chemicals & Chemical Products 5.8 1,520 -0.3 -6.5 -7.1 -3.3 -1.0 -8.9 6.1

2.9.1 Fertiliser 0.9 235 -15.2 -15.9 -17.0 -8.8 -5.6 -11.7 0.8

2.9.2 Drugs & Pharmaceuticals 1.9 508 7.6 6.5 1.3 -1.0 -0.1 -4.9 -4.8

2.9.3 Petro Chemicals 1.2 327 -1.7 -25.3 -21.6 -3.9 0.3 -11.1 20.0

2.9.4 Others 1.7 450 1.5 3.8 4.1 -1.9 -0.3 -9.6 14.1

Growth (yoy, %)

Page 19

Spark Chitra Katha

…loan growth has also taken a hit in cement, engineering, metal and road sectors

Monetary Conditions


Share (%) (Rs. Bn)


2.10 Rubber, Plastic & their Products 1.4 365 1.9 3.9 1.9 1.7 2.1 5.7 12.8

2.11 Glass & Glassware 0.3 88 -0.5 -3.0 1.6 2.6 1.5 2.1 13.9

2.12 Cement & Cement Products 2.1 563 1.4 3.9 3.9 5.8 7.4 5.6 21.6

2.13 Basic Metal & Metal Product 14.5 3,836 8.3 7.8 6.8 6.8 7.1 7.3 11.9

2.13.1 Iron & Steel 10.8 2,840 7.4 7.6 6.0 5.1 5.0 5.7 10.1

2.13.2 Other Metal & Metal Product 3.8 996 11.0 8.6 9.2 11.8 13.1 12.1 17.4

2.14 All Engineering 5.8 1,524 3.8 7.6 5.2 7.2 5.7 6.5 11.0

2.14.1 Electronics 1.4 380 13.7 4.6 6.1 12.1 8.6 13.0 15.3

2.14.2 Others 4.3 1,144 0.9 8.6 5.0 5.6 4.8 4.4 9.8

2.15 Vehicles, Vehicle Parts & Transport Equipment 2.6 698 7.0 5.0 2.5 0.4 2.1 5.0 10.8

2.16 Gems & Jewellery 2.7 706 6.5 5.7 2.8 4.9 0.6 14.0 -0.4

2.17 Construction 2.8 734 5.7 10.8 18.7 21.4 19.7 24.1 22.9

2.18 Infrastructure 35.2 9,278 8.6 10.6 10.5 10.0 10.4 11.5 10.8

2.18.1 Power 21.5 5,674 13.6 15.4 14.5 13.9 14.7 14.9 13.5

2.18.2 Telecommunications 3.4 885 -2.5 8.7 4.2 -1.4 -1.2 1.8 -3.2

2.18.3 Roads 6.4 1,680 4.6 5.0 6.9 7.5 7.9 10.0 15.4

2.18.4 Other Infrastructure 3.9 1,038 0.8 -2.0 2.9 5.2 4.0 6.1 5.2

2.19 Other Industries 6.8 1,799 -3.2 0.2 -2.2 -3.6 0.5 -3.1 9.0

2 Total Industries 100.0 26,389 5.2 6.4 5.6 6.0 6.6 6.8 11.3

Growth (yoy, %)

Page 20

Spark Chitra Katha

Currency in circulation crosses Rs15tn


Reserve money growth moderates


M1 money supply growth at 9.5%


M2 money supply growth at 9.5%


M3 Money supply growth at 11%


Money multiplier


Currency in circulation crosses Rs.15tn mark; M3 money supply growth remains low at 11%

Monetary Conditions

13.814.2

15.0

9

10

11

12

13

14

15

16

Se

p-1

3

De

c-1

3

Ma

r-1

4

Ju

n-1

4

Se

p-1

4

De

c-1

4

Ma

r-1

5

Ju

n-1

5Currency in Circulation (Rs tn)

9.7

11.2

10.3

7

8

9

10

11

12

13

Ju

n-1

4

Ju

l-1

4

Au

g-1

4

Se

p-1

4

Oct-

14

No

v-1

4

De

c-1

4

Ja

n-1

5

Fe

b-1

5

Ma

r-1

5

Ap

r-1

5

Ma

y-1

5

Ju

n-1

5

%, yo

y

Reserve Money (M0)

8.9

10.0

9.5

7

9

11

13

Jun-1

4

Jul-14

Aug

-14

Sep

-14

Oct-

14

No

v-1

4

Dec-1

4

Jan-1

5

Feb

-15

Mar-

15

Ap

r-15

May-1

5

Jun-1

5

%, yo

y

M1 Money Supply

11.8

11.2

11.0

10

12

14Jun-1

4

Jul-14

Aug

-14

Sep

-14

Oct-

14

No

v-1

4

Dec-1

4

Jan-1

5

Feb

-15

Mar-

15

Ap

r-15

May-1

5

Jun-1

5

%, yo

y

M3 Money Supply

5.695.66

5.73

5.6

5.7

5.8

5.9

Jun-1

4

Jul-14

Aug

-14

Sep

-14

Oct-

14

No

v-1

4

Dec-1

4

Jan-1

5

Feb

-15

Mar-

15

Ap

r-15

May-1

5

Jun-1

5

Money Multiplier

9.1

10.0

9.5

8

9

10

11

12

13

Jun-1

4

Jul-14

Aug

-14

Sep

-14

Oct-

14

No

v-1

4

Dec-1

4

Jan-1

5

Feb

-15

Mar-

15

Ap

r-15

May-1

5

Jun-1

5

%, yo

y

M2 Money Supply

Page 21

Spark Chitra Katha

Exports fall to $22.3bn in May’15


Non oil imports also come down


Trade deficit narrows to a 3-month low


Sharp decline in both exports and Imports


Oil imports contract 41% yoy in May’15


Gold imports down to $2.4bn in May’15


Trade deficit narrows to a 3-month low of $10.4bn as oil imports remain low

External Sector

28

.0

25

.8

25

.8

26

.8 28

.7

26

.1

26

.5

26

.1

24

.4

21

.9

23

.9

22

.0

22

.3

39

.2

38

.3 40

.1

37

.5

43

.3

39

.5 42

.7

35

.3

32

.1

28

.3

35

.7

32

.9

32

.8

Ma

y-1

4

Ju

n-1

4

Ju

l-1

4

Au

g-1

4

Se

p-1

4

Oct-

14

No

v-1

4

De

c-1

4

Ja

n-1

5

Fe

b-1

5

Ma

r-1

5

Ap

r-1

5

Ma

y-1

5

$, b

n

Exports ($, bn) Imports ($, bn)

14

.5

13

.2

14

.6

12

.8 14

.6

12

.5

11

.7

10

.0

8.2

6.1 7.4

7.4 8.5

24

.8

25

.1

25

.5

24

.7 28

.8

27

.0

25

.3

23

.9

22

.2

28

.3

25

.5

24

.2

Ma

y-1

4

Ju

n-1

4

Ju

l-1

4

Au

g-1

4

Se

p-1

4

Oct-

14

No

v-1

4

De

c-1

4

Ja

n-1

5

Fe

b-1

5

Ma

r-1

5

Ap

r-1

5

Ma

y-1

5

$, b

n

Oil Imports ($, bn) Non Oil Imports ($, bn)

-11

.2

-12

.5

-14

.3

-10

.7

-14

.6

-13

.4

-16

.2

-9.1 -7

.7 -6.4

-11

.8

-11

.0

-10

.4

-18

-15

-12

-9

-6

-3

0

Ma

y-1

4

Ju

n-1

4

Ju

l-1

4

Au

g-1

4

Se

p-1

4

Oct-

14

No

v-1

4

De

c-1

4

Ja

n-1

5

Fe

b-1

5

Ma

r-1

5

Ap

r-1

5

Ma

y-1

5

$, b

n

Trade Balance ($, bn)

12

.3

-14

.8

-20

.2

-10.8-7.9

-16.5

-25-20-15-10-505

1015202530

Ma

y-1

4

Ju

n-1

4

Ju

l-1

4

Au

g-1

4

Se

p-1

4

Oct-

14

No

v-1

4

De

c-1

4

Ja

n-1

5

Fe

b-1

5

Ma

r-1

5

Ap

r-1

5

Ma

y-1

5

Exports (%, yoy) Imports (%, yoy)

2.5

-42.6-41.0

-17.1

11.8

-2.2

-60-50-40-30-20-10

01020304050

Ma

y-1

4

Ju

n-1

4

Ju

l-1

4

Au

g-1

4

Se

p-1

4

Oct-

14

No

v-1

4

De

c-1

4

Ja

n-1

5

Fe

b-1

5

Ma

r-1

5

Ap

r-1

5

Ma

y-1

5

Oil Imports (%, yoy) Non Oil Imports (%, yoy)

2.2

3.1

1.8 2.0

3.8 4

.2

5.6

1.3 1.6 2

.0

5.0

3.1

2.4

May-1

4

Jun-1

4

Jul-14

Aug

-14

Sep

-14

Oct-

14

No

v-1

4

Dec-1

4

Jan-1

5

Feb

-15

Mar-

15

Ap

r-15

May-1

5

$, b

n

Gold Imports ($, bn)

Page 22

Spark Chitra Katha

BoP: CAD under control, Short term debt declines and asset to liability ratio improves

Remittances and software exports remain stable


Short term debt declines


External Sector

($bn) Mar-14 Jun-14 Sep-14 Dec-14 Mar-15

CAD (I+II) = A -1.3 -7.9 -10.1 -8.4 -1.5

Merchandise balance (I) -30.7 -34.6 -38.6 -39.3 -31.7

Invisibles (i+ii+iii) = (II) 29.3 26.7 28.5 30.9 30.2

Software Exports (i) 17.7 17.0 16.9 17.8 18.6

Remittances (ii) 16.2 16.6 16.5 16.5 16.6

Others (iii) -4.6 -6.9 -5.0 -3.5 -5.0

Capital Account (a+b+c+d+e) = B 9.2 19.2 16.5 23.6 30.7

FDI inflows (a) 0.9 7.9 7.9 7.2 9.6

Portfolio flows (b) 9.3 12.4 9.8 6.3 12.5

ECBs (c) 5.1 1.3 -0.1 -0.2 1.8

NRI Deposits (d) 3.7 2.4 4.1 3.6 4.0

Others (e) -9.8 -4.9 -5.1 6.7 2.9

Errors and Omissions (C.) -0.7 -0.1 0.5 -1.9 1.0

Overall BoP (A+B+C) 7.1 11.2 6.9 13.2 30.1

CAD (% of GDP) -0.3 -1.6 -2.0 -1.6 -0.3

BoP: Sharp fall in merchandise trade deficit, CAD narrows to a multi-year low

($bn) Mar-14 Jun-14 Sep-14 Dec-14 Mar-15

Assets (A) 483.7 491.8 488.5 490.5 517.8

Liabilities (i+ii+iii+iv) = B 820.4 841.8 845.4 844.2 880.8

Direct Investment (i) 242.7 250.4 252.2 252.1 264.7

Equity Securities (ii) 139.7 147.1 144.8 141.2 148.4

Debt Securities (iii) 57.8 61.7 67.5 70.1 79.6

Other Investment (iv) 380.3 382.5 380.9 380.8 388.0

Currency & Deposits 104.0 106.4 108.9 110.2 115.3

Loans 179.3 178.5 176.8 176.6 178.4

Trade Credits 83.9 84.2 82.5 81.0 82.9

Other Liabilities 13.0 13.4 12.8 13.0 11.4

IIP: Net (A-B) -336.8 -349.9 -356.9 -353.7 -363.0

Assets to Liability Ratio (%) 59.0 58.4 57.8 58.1 58.8

India's International Investment Position (IIP)

92

.7

84

.7

17.8

15

16

17

18

19

20

21

22

23

24

25

60

70

80

90

100

De

c-1

1

Ma

r-1

2

Jun

-12

Se

p-1

2

De

c-1

2

Ma

r-1

3

Jun

-13

Se

p-1

3

De

c-1

3

Ma

r-1

4

Jun

-14

Se

p-1

4

De

c-1

4

Ma

r-1

5

Short-term debt ($bn) Short-term (% of external debt) - RHS

3.5

3.5

3.3

3.4

3.6

3.1 3.2 3.2

3.3

3.3

LQ LQ-1 LQ-2 LQ-3 LQ-4

% o

f G

DP

Software Exports Remittances

Page 23

Spark Chitra Katha

Exchange rate: Rupee largely stable despite Greece turmoil

External Sector

Rupee vs. US dollar


Rupee vs. Eurp


Rupee vs. Pound


Rupee vs. Yen


Rupee vs. Yuan


Real effective exchange rate


52.70

62.4863.75

50

52

54

56

58

60

62

64

66

68

Sep

-12

Dec-1

2

Mar-

13

Jun-1

3

Sep

-13

Dec-1

3

Mar-

14

Jun-1

4

Sep

-14

Dec-1

4

Mar-

15

Jun-1

5INR/USD

85.71

102.95 100.12

70

75

80

85

90

95

100

105

110

Sep

-12

Dec-1

2

Mar-

13

Jun-1

3

Sep

-13

Dec-1

3

Mar-

14

Jun-1

4

Sep

-14

Dec-1

4

Mar-

15

Jun-1

5

INR/GBP

68.15

84.60

71.20

60

65

70

75

80

85

90

Sep

-12

Dec-1

2

Mar-

13

Jun-1

3

Sep

-13

Dec-1

3

Mar-

14

Jun-1

4

Sep

-14

Dec-1

4

Mar-

15

Jun-1

5

INR/Euro

68.00

60.96

52.07

40

45

50

55

60

65

70

Se

p-1

2

De

c-1

2

Ma

r-1

3

Ju

n-1

3

Se

p-1

3

De

c-1

3

Ma

r-1

4

Ju

n-1

4

Se

p-1

4

De

c-1

4

Ma

r-1

5

Ju

n-1

5

INR/100Yen

8.65

10.26

10.29

7

8

9

10

11

Sep

-12

Dec-1

2

Mar-

13

Jun-1

3

Sep

-13

Dec-1

3

Mar-

14

Jun-1

4

Sep

-14

Dec-1

4

Mar-

15

Jun-1

5

INR/Yuan

105.6

102.7

110.0

90

95

100

105

110

115

Sep

-12

Dec-1

2

Mar-

13

Jun-1

3

Sep

-13

Dec-1

3

Mar-

14

Jun-1

4

Sep

-14

Dec-1

4

Mar-

15

Jun-1

5

REER: 36 Currencies

Page 24

Spark Chitra Katha

Indirect tax collections on the rise…


Fiscal deficit at 37.5% of BE in Apr-May’15 vs. 47% in Apr-May’14


Sharp uptick in indirect tax collections while direct tax collections are weak

Fiscal

Govt is frontloading expenditure…

Source: CGA

…focus is on plan spending


3.2

4.5

16.7

47.0

56.6

2.2

14.6

14.8

37.5

43.8

0

10

20

30

40

50

60

Net tax revenue Non-tax revenue Expenditure Fiscal deficit Revenue deficit

(% o

f fu

ll year

targ

et)

Apr-May FY15 Apr-May FY16

12.4

13.2

11.5 12.1

10.1

11.0

12.1 11.8

15.8

12.7 12.4

12.0 12.3 12.7

13.5 13.9

16.7

14.8

FY

98

FY

99

FY

00

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

FY

14

FY

15

FY

16

Total expenditure in Apr-May 15 (% of full fiscal)

Avg: 11.8%

In last 3 yrs while govt

started frontloading

spending, it had to cut it

sharply in the 2nd half,

which is unlikely in FY16

32.6

-7.8 -9.5 -18.2

14.0

-10.8

20.6

145.1

20.6

-20

0

20

40

60

80

100

120

140

160

Income tax Corporate tax Custom duties Excise duties Service tax

(Gro

wth

, %

, yoy)

Apr-May FY15 Apr-May FY16

17.3

28.3

43.2 38.3

47.0

32.9 37.6

6.9

95.2

FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16

Ministry of Road Transport and Highways (Rs. bn)

Plan expenditure on Road & Highways in Apr-May'15 is more than double the

average exp in first two months of the fiscal

Page 25

Spark Chitra Katha

European markets have performed well on YTD basis…

Source: Bloomberg, Spark Capital Research.

Muted YTD performance by India but rally in last 1 month….


China leads the pack even after more than 25%+ fall in last month, India showed muted performance

Market data

52

2117

6 66

2 2

-1-2 -2 -3 -6

-32-24

-1-8

1

0

6 6

-1

4

-1 -3 -1

-40

-30

-20

-10

0

10

20

30

40

50

60

Shenzen Shangai Russia Hang Seng South Africa Brazil Nifty Sensex Thailand Turkey Malaysia Taiwan Indonesia

Change YTD % Change 1M %

21

17 17 17

14

7 7

32 2

1

-1

02

0

2 20 0 1

-1

0 0

-1-5

0

5

10

15

20

25

Spain France Japan Germany Euro Stoxx Korea NASDAQ Australia UK S&P 500 Dow Jones US Canada


Page 26

Spark Chitra Katha

INR has been range bound in 1H15…..


Precious metals performance- Last 1 month and Year to date


-3 -4-4

-5

-15

-18

-3-2

-4 -4 -5

-10

-20

-18

-16

-14

-12

-10

-8

-6

-4

-2

0

Gold (INR/10g)

Gold ($/OZ) Silver (INR/kg) Silver ($/OZ) Platinum ($/Oz)

Palladium ($/Oz)


Base metals melted big time this year…..


10 10

3

0

0 0

-3-3 -3

-5-7

-7 -8

-11

-16

42

-3

0 01

-1

0

-1-2

00

-1

4

0

-20

-15

-10

-5

0

5

10

AU $ Euro Ruble Yuan GBP INR Sing $ JPY Thai Bhat Korean Won S. Af Rand Indo Rup Malay Ringgit

Turkish Lira Brazil Real


1

0-2

-6-8 -8 -8

-10-12

-22

-10

-1 -1-3

-8

-2-2

-15

-5

-17

-25

-20

-15

-10

-5

0

5

10

Bre

nt

Lead

AU

Co

al

Zin

c

S.A

f Co

al

Ind

o C

oal

Alu

min

ium

WT

I

Co

pper

Ch

ina Ir

on o

re


RBI’s currency management efforts has provided stability to INR…..

Market data

Page 27

Spark Chitra Katha

Cap goods and Healthcare leading the rally on YTD basis

Market data

Cap goods and Healthcare have outperformed the broader indices…


Metals and Reality current levels are close to lowest levels….

Note: 52 week low price is based as 100.Source: Bloomberg, Spark Capital Research.

19.3 18.6

3.5 3.42.1 1.6 1.5 1.4 0.7 0.4

-0.4 -0.6-1.8

-9.3

-16.5

11.012.6

6.3 6.5 5.9 5.7

0.6

6.6 6.17.3

4.4 4.7

-0.5

4.1

-2.3

-20

-15

-10

-5

0

5

10

15

20

Cap gds H. care BSE 200 BSE 500 Nifty Sensex BSE Tech FMCG Oil & Gas Banks Power Auto Tech Realty Metals

Change YTD% Change 1M%

155 153

145

136 135

130126 125 124 123 122 121

119115 114

100

110

120

130

140

150

160

Metals Realty Banks Cap gds Auto Oil & Gas BSE Tech BSE 200 BSE 500 Nifty Power Sensex H. care FMCG Tech

52W high Current price

Page 28

Spark Chitra Katha

Stocks near 52 week high (BSE 200 subset)


Stock & Index 52 week H/L: Key trends

Market data

Stocks near 52 week high (BSE 200 subset)


Nifty stocks performance snapshot


0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5%

Jubiliant FoodFederal Bk

Bharti AirtelIOCLBPCL

GlenmarkBajaj Fin

EmamiBajaj Finserv

Kotak HPCLEicher

BritanniaIB Hous. Fin

Coal IndiaMotherson Sumi

MarutiDabur

CumminsAB Nuvo

Aurobindo Ph.

Near 52 Week highs

0% 2% 4% 6% 8% 10% 12% 14%

TitanPower Grid

ACCGrasim

GAILNTPC

Tata PowerBank of Baroda

PNBCairnWipro

ITCJSW

Tata SteelONGC

Tata MotorsNMDC

VedantaTech M

HindalcoNear 52 Week lows

Price Performance (%)

Name Sector Current 52W high 52W low 1m 3M YTD

Asian Paints Materials 823 923 566 16.6 (4.6) 9.4

Bosch Auto 23,544 27,990 12,610 16.1 (11.0) 21.0

Ambuja Cements Materials 252 287 202 15.5 (2.0) 10.3

Cipla/India Pharma 666 753 428 14.5 (6.5) 6.3

Ultratech Cement Materials 3,138 3,399 2,297 14.2 4.5 17.3

IndusInd Bank Banks 924 967 527 14.0 (2.7) 15.2

Hindustan Unilever FMCG 927 981 616 13.8 (2.3) 22.0

Dr Reddy's Labs Pharma 3,773 3,828 2,606 13.7 (0.6) 16.2

Sun Pharma Pharma 919 1,201 724 13.0 (20.1) 11.2

Zee Entertainment Media 375 402 265 12.2 8.0 (1.6)

Reliance Industries Oil & Gas 998 1,050 796 12.1 8.2 12.0

L&T Cap gds 1,858 1,894 1,400 12.1 3.0 24.3

Lupin Pharma 1,916 2,115 1,040 11.3 (3.3) 34.2

HDFC Banks 1,318 1,402 946 10.8 1.0 16.1

BPCL Oil & Gas 927 953 561 10.7 13.3 43.5

BHEL Cap gds 273 300 194 10.0 12.6 3.0

PNB Banks 145 232 130 9.7 (12.6) (34.0)

Coal India Energy 434 435 331 9.6 10.7 13.1

Bajaj Auto Auto 2,499 2,695 1,913 9.3 19.3 2.7

Kotak Mahindra Bank Banks 711 738 426 8.4 (1.7) 12.5

Maruti Suzuki Auto 4,051 4,090 2,479 8.4 10.5 21.6

HDFC Bank Banks 1,092 1,109 791 8.2 5.1 14.7

Grasim Industries Materials 3,625 4,025 3,173 8.0 (4.1) 7.1

HCL Tech IT 955 1,058 708 6.5 (2.2) 19.6

M&M Auto 1,270 1,434 1,102 6.5 1.8 2.9

Bank of Baroda Banks 156 229 137 6.0 (11.3) (28.1)

ICICI Bank Banks 313 393 267 5.9 (1.1) (11.2)

Axis Bank Banks 584 655 361 5.9 3.2 16.2

SBI Banks 268 336 235 5.6 (6.3) (14.0)

ACC Materials 1,478 1,775 1,336 5.4 (7.4) 5.6

Hero MotoCorp Auto 2,639 3,272 2,251 5.4 2.2 (15.1)

Wipro IT 565 678 513 5.2 (9.4) 1.8

ITC FMCG 312 410 294 5.0 (11.2) (15.3)

Idea Cellular Telecom 176 204 133 3.1 (13.1) 14.2

Bharti Airtel Telecom 422 443 327 1.8 (0.8) 19.7

Yes Bank Banks 812 910 502 0.8 (3.5) 5.2

Tata Power Power 73 110 68 0.4 (9.0) (11.2)

NMDC Materials 115 188 112 (0.2) (14.9) (20.8)

TCS IT 2,500 2,840 2,339 (0.3) (5.9) (2.3)

Infosys IT 971 1,168 796 (1.6) (13.2) (1.5)

NTPC Power 133 165 127 (2.5) (15.4) (7.6)

ONGC Energy 290 459 288 (3.6) (7.1) (15.1)

Power Grid Power 140 159 127 (3.6) (9.2) 1.6

Tata Steel Materials 281 574 279 (5.5) (18.6) (29.6)

Cairn India Energy 170 350 164 (5.8) (25.2) (29.2)

GAIL India Power 373 552 353 (5.8) (5.6) (16.1)

Tata Motors Auto 386 606 381 (8.5) (30.6) (21.3)

Hindalco Industries Materials 105 199 99 (10.4) (23.1) (33.6)

Tech Mahindra IT 477 750 459 (13.5) (28.2) (26.4)

Vedanta Materials 145 306 138 (21.0) (27.6) (32.3)

Page 29

Spark Chitra Katha Market data

FII’s and DII’s equity flow has been very strong this year….


Cash market turnover and Delivery volumes


FII’s and DII’s have pumped US$6bn and US$4bn respectively on YTD basis

4 4

2

1

4

(2)

(1)(1)

2

3

1

3

(0)

0

4

1

3

2 2

1 1

0

2

(0)

3

1 2 1

(0)

(1)

1

(3)

(2) (1)

(1)

(2)

1

(0)

1

(1)(2)

(1) (1)

(0)

0

(2)

(1)(1) (1) (1)

0

(0)

1

(1)

1

(1)

0 0

2 1

2

(0)

-4

-3

-2

-1

0

1

2

3

4

5

Jan

-13

Feb

-13

Mar-

13

Ap

r-13

May-1

3

Jun

-13

Jul-

13

Aug

-13

Sep

-13

Oct-

13

No

v-1

3

Dec-1

3

Jan

-14

Feb

-14

Mar-

14

Ap

r-14

May-1

4

Jun

-14

Jul-

14

Aug

-14

Sep

-14

Oct-

14

No

v-1

4

Dec-1

4

Jan

-15

Feb

-15

Mar-

15

Ap

r-15

May-1

5

Jun

-15

Jul-

15

FII (US$ bn) DII (US$bBn)

3.5 2.7 2.5 2.5 2.9 2.4 2.8 2.9 2.7 2.8 2.6 2.7 3.1 2.2

3.4 3.2 5.3 5.1 4.7 3.5 4.7 3.2 4.0 4.2 4.6 4.5 4.8 4.3 4.2 3.9

40%

42%

43%

38%

41% 41%

37%

41%

45%

41%

37%

43%44%

45%44%

39%

42%

36%

38%39%

42%

43%44%

43%

41%40%

46%

42%

45%

41%

30%

32%

34%

36%

38%

40%

42%

44%

46%

48%

2.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

Jan

-13

Feb-1

3

Mar-

13

Ap

r-13

May-1

3

Jun

-13

Jul-

13

Aug

-13

Sep

-13

Oct-

13

No

v-1

3

Dec-1

3

Jan

-14

Feb-1

4

Mar-

14

Ap

r-14

May-1

4

Jun

-14

Jul-

14

Aug

-14

Sep

-14

Oct-

14

No

v-1

4

Dec-1

4

Jan

-15

Feb-1

5

Mar-

15

Ap

r-15

May-1

5

Jun

-15

Cash market Turnover (Rs. tn) Delivered volume % (RHS)

Page 30

Spark Chitra Katha

FII’s pumped in almost equally in Debt and Equity this year

Source: Bloomberg

Market data

Foreign investment in Equity Instruments (net) Foreign investment in Debt Instruments (net)

US $mn 1QCY 2QCY 3QCY 4QCY Total US $mn 1QCY 2QCY 3QCY 4QCY Total

2015 6,000 184 610 na 6794 2015 6,903 -461 99 na 6541

2014 4,086 5,832 3,896 2,348 16,162 2014 6,160 4,252 9,329 6,511 26,252

2013 10,151 2,959 61 6,584 19,754 2013 2,294 -4,017 -4,750 -2,016 -8,489

2012 8,866 -350 7,617 8,414 24,548 2012 3,941 229 897 1,795 6,862

2011 -657 1,151 -644 -362 -512 2011 2,424 600 1,174 4,348 8,546

2010 4,369 2,331 12,554 10,067 29,321 2010 4,103 1,371 3,733 843 10,050

2009 -1,345 6,421 7,369 5,194 17,639 2009 -1,306 145 928 1,393 1,160

2008 -3,551 -3,322 -2,710 -3,335 -12,918 2008 907 -655 1,787 665 2,705

2007 1,534 4,207 7,462 5,315 18,518 2007 139 377 515 1,395 2,425

2006 3,930 -1,381 2,678 3,110 8,338 2006 -300 296 360 526 883

2005 3,801 891 3,864 2,345 10,901 2005 113 -261 -186 -903 -1,236

2004 3,198 305 1,471 3,653 8,627 2004 354 -409 -85 831 692

2003 361 933 1,824 3,585 6,702 2003 168 677 68 96 1,008

2002 583 -91 181 65 738 2002 126 -113 -56 54 10


FIIs have pumped in YTD $12bn equally between Debt & Equity, with some selling in Debt in last quarter

4.1 4.1 1.9

1.0

3.8

(1.8) (1.0) (0.9) 2.0 2.9 1.1

2.5 (0.0) 0.4

3.7 1.2 2.8 1.8 1.9

1.1 0.9 0.1

2.3

(0.1)

2.9 1.4 1.7 1.2 (0.1)

(1.0)

0.5

0.6 0.8

0.9 0.8

0.5

(5.4)

(2.1) (1.4) (1.3)(2.1)

(0.8)

0.9

2.0

2.6

1.6

(1.8)

3.4

2.7 3.8

2.8 2.7 2.8

1.9

1.8

3.7

2.2 1.0

0.5

(1.3)

0.3 0.1

-8

-6

-4

-2

0

2

4

6

8

Jan

-13

Feb-1

3

Mar-

13

Ap

r-13

May-1

3

Jun

-13

Jul-

13

Aug

-13

Sep

-13

Oct-

13

No

v-1

3

Dec-1

3

Jan

-14

Feb-1

4

Mar-

14

Ap

r-14

May-1

4

Jun

-14

Jul-

14

Aug

-14

Sep

-14

Oct-

14

No

v-1

4

Dec-1

4

Jan

-15

Feb-1

5

Mar-

15

Ap

r-15

May-1

5

Jun

-15

Jul-

15

FII Investments in Debt ($bn) FII Investments in Equity ($bn)

Page 31

Spark Chitra Katha

DII Investments in Equity – Consistently net buyers in last 3 months

Source: Bloomberg

Market data

DII’s have pumped US$ 5bn in last 3 months-First time in in last 3 years

(1.3)

(2.4)

(0.7)

0.1 0.1 0.2

(1.0)(0.8)

(1.7)

(0.9)(1.0)

(1.6)

(3.2)

(1.6)(1.4)

(0.5)

(2.2)

1.4

(0.3)

1.1

(1.5)

(2.0)

(1.5) (1.2)

(0.2)

0.0

(2.2)

(1.1)(0.8)(0.8)(0.5)

0.4

(0.2)

0.7

(1.2)

0.9

(1.3)

0.4 0

1.8 1.3

1.9

(0.1)

-4

-3

-2

-1

0

1

2

3

Jan

-12

Feb-1

2

Mar-

12

Ap

r-12

May-1

2

Jun

-12

Jul-

12

Aug

-12

Sep

-12

Oct-

12

No

v-1

2

Dec-1

2

Jan

-13

Feb-1

3

Mar-

13

Ap

r-13

May-1

3

Jun

-13

Jul-

13

Aug

-13

Sep

-13

Oct-

13

No

v-1

3

Dec-1

3

Jan

-14

Feb-1

4

Mar-

14

Ap

r-14

May-1

4

Jun

-14

Jul-

14

Aug

-14

Sep

-14

Oct-

14

No

v-1

4

Dec-1

4

Jan

-15

Feb-1

5

Mar-

15

Ap

r-15

May-1

5

Jun

-15

Jul-

15

DII Investment in Equity ($bn)

Domestics mutual funds net debt investment (US$bn)


Domestics mutual funds net equity investment (US$bn)


0 0

3

2

4

2

(2)

(4)

(0)

(4) (4)

7

2

-6

-4

-2

0

2

4

6

8

FY

04

FY

05

FY

06

FY

07

FY

08

FY

09

FY

10

FY

11

FY

12

FY

13

FY

14

FY

15

YT

D

5 4 8 12

18 18

38

55

84 86 90

96

6

0

20

40

60

80

100

120

FY

04

FY

05

FY

06

FY

07

FY

08

FY

09

FY

10

FY

11

FY

12

FY

13

FY

14

FY

15

YT

D

Page 32

Spark Chitra Katha

MSCI Indices: India’s Forward PB @ 2.8x


MSCI Indices: India’s Forward PE @ 16.1x


MSCI Indices US$ performance – Most of the markets delivered negative performance in last 1 month except India


MSCI Indices: Emerging markets outperforms developed markets on YTD basis

Market data

22

5 5 3 2 2 2

0

(1)

(12) (13)

(4)

(12)

(1)

(4)

(1)

0

7

(5) (5)

(2)(1)

(20)

(15)

(10)

(5)

0

5

10

15

20

25

Russia China Europe APAC World US India EM Asia APAC ex JP Brazil Indonesia

Change YTD% Change 1M%

17.1 16.3 16.1 15.6

13.9 13.4

12.7 12.4 11.3

10.0

5.7

4

6

8

10

12

14

16

18

US

Wo

rld

Ind

ia

Euro

pe

Ind

on

esi

a

AP

AC

Bra

zil

AP

xJ

EM

Asia

Ch

ina

Russia

2.8 2.7 2.6

2.1

1.8

1.4 1.4 1.4 1.3 1.3

0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

Ind

ia

US

Ind

on

esi

a

Wo

rld

Euro

pe

AP

xJ

AP

AC

EM

Asia

Bra

zil

Ch

ina

Russia

Page 33

Spark Chitra Katha India market cap to GDP is still hovering around average whereas Midcaps valuations at its peak

Macro Indicators: Market data

Sensex 12 month forward PE is around average…

Source: Bloomberg

Nifty 12 month forward PE is retraced to Avg after kissing +1sd YTD

Source: Bloomberg

India market cap to GDP below its average since 2006


BSE Mid caps 12 month forward PE is almost at its peak


15.0

17.2

12.8

80

120

160

200

240

280

320

8

10

12

14

16

18

20

22

Dec-0

5

Jun

-06

Dec-0

6

Jun

-07

Dec-0

7

Jun

-08

Dec-0

8

Jun

-09

Dec-0

9

Jun

-10

Dec-1

0

Jun

-11

Dec-1

1

Jun

-12

Dec-1

2

Jun

-13

Dec-1

3

Jun

-14

Dec-1

4

Jun

-15

Sensex PE Avg +1sd -1sd Price (Index)

12.1

15.0

9.2

5

7

9

11

13

15

17

19

Dec-0

5

Jun

-06

Dec-0

6

Jun

-07

Dec-0

7

Jun

-08

Dec-0

8

Jun

-09

Dec-0

9

Jun

-10

Dec-1

0

Jun

-11

Dec-1

1

Jun

-12

Dec-1

2

Jun

-13

Dec-1

3

Jun

-14

Dec-1

4

Jun

-15

BSE Midcaps PE Avg +1sd -1sd

88

147

49

98

59 49

81

72

40

60

80

100

120

140

160

Dec-0

5

Jun

-06

Dec-0

6

Jun

-07

Dec-0

7

Jun

-08

Dec-0

8

Jun

-09

Dec-0

9

Jun

-10

Dec-1

0

Jun

-11

Dec-1

1

Jun

-12

Dec-1

2

Jun

-13

Dec-1

3

Jun

-14

Dec-1

4

Jun

-15

India Mkt cap to GDP Avg

14.5

16.4

12.5

80

120

160

200

240

280

320

8

10

12

14

16

18

20

22

Dec-0

5

Jun

-06

Dec-0

6

Jun

-07

Dec-0

7

Jun

-08

Dec-0

8

Jun

-09

Dec-0

9

Jun

-10

Dec-1

0

Jun

-11

Dec-1

1

Jun

-12

Dec-1

2

Jun

-13

Dec-1

3

Jun

-14

Dec-1

4

Jun

-15

Nifty PE Avg +1sd -1sd Price (Index)

Page 34

Spark Chitra Katha

Sensex 12 month forward PB still around average

Source: Bloomberg

Nifty 12 month forward PB trading around average levels

Source: Bloomberg

Nifty Expected average return chart based on 12 month forward PE


Nifty delivered 7% average annual return when trading in current range of valuations in past

Sensex 12 month forward ROE



2.6

3.2

2.1

1.5

2.0

2.5

3.0

3.5

4.0

4.5

Dec-0

5

Jun

-06

Dec-0

6

Jun

-07

Dec-0

7

Jun

-08

Dec-0

8

Jun

-09

Dec-0

9

Jun

-10

Dec-1

0

Jun

-11

Dec-1

1

Jun

-12

Dec-1

2

Jun

-13

Dec-1

3

Jun

-14

Dec-1

4

Jun

-15

Sensex PB Avg +1sd -1sd

2.5

3.1

2.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

Dec-0

5

Jun

-06

Dec-0

6

Jun

-07

Dec-0

7

Jun

-08

Dec-0

8

Jun

-09

Dec-0

9

Jun

-10

Dec-1

0

Jun

-11

Dec-1

1

Jun

-12

Dec-1

2

Jun

-13

Dec-1

3

Jun

-14

Dec-1

4

Jun

-15

Nifty PB Avg +1sd -1sd

17.5

19.3

15.7

14

15

16

17

18

19

20

21

22

Dec-0

5

Jun

-06

Dec-0

6

Jun

-07

Dec-0

7

Jun

-08

Dec-0

8

Jun

-09

Dec-0

9

Jun

-10

Dec-1

0

Jun

-11

Dec-1

1

Jun

-12

Dec-1

2

Jun

-13

Dec-1

3

Jun

-14

Dec-1

4

Jun

-15

Sensex ROE Avg +1sd -1sd

15.9

9.1 7.4

3.0

(3.5)

33.5

21.0

8.8 6.8

(8.3)(15)

(10)

(5)

0

5

10

15

20

25

30

35

40

<13x 13x -14x 14x -15.5x 15.5x -16.5x >16.5x

6M forward return 12M forward return Hit rate

Page 35

Spark Chitra Katha

FMCG and Healthcare trading at their peak valuations

BSE Auto- 12 month forward PE trend

Source: Bloomberg


Bankex- 12 month forward PB trend

Source: Bloomberg

BSE Cap gds- 12 month forward PE trend

Source: Bloomberg

BSE Cons durable: 12 month forward PE

Source: Bloomberg

BSE FMCG- 12 month forward PE trend

Source: Bloomberg

BSE Healthcare-12 month forward PE trend

Source: Bloomberg

12.6

15.8

9.4

5

7

9

11

13

15

17

19

21

23

Dec-0

5

Aug

-06

Ap

r-07

Dec-0

7

Aug

-08

Ap

r-09

Dec-0

9

Aug

-10

Ap

r-11

Dec-1

1

Aug

-12

Ap

r-13

Dec-1

3

Aug

-14

Ap

r-15

Auto PE(x) Avg

+1sd -1sd

1.8

2.2

1.4

1.0

1.2

1.4

1.6

1.8

2.0

2.2

2.4

2.6

2.8

3.0

Dec-0

5

Aug

-06

Ap

r-07

Dec-0

7

Aug

-08

Ap

r-09

Dec-0

9

Aug

-10

Ap

r-11

Dec-1

1

Aug

-12

Ap

r-13

Dec-1

3

Aug

-14

Ap

r-15

Bankex PB Avg

+1sd -1sd

19.9

25.6

14.2

5

10

15

20

25

30

35

40

Dec-0

5

Aug

-06

Ap

r-07

Dec-0

7

Aug

-08

Ap

r-09

Dec-0

9

Aug

-10

Ap

r-11

Dec-1

1

Aug

-12

Ap

r-13

Dec-1

3

Aug

-14

Ap

r-15

Cap gds PE(x) Avg

+1sd -1sd

22.3

30.3

14.4

5

10

15

20

25

30

35

40

45

Dec-0

5

Aug

-06

Ap

r-07

Dec-0

7

Aug

-08

Ap

r-09

Dec-0

9

Aug

-10

Ap

r-11

Dec-1

1

Aug

-12

Ap

r-13

Dec-1

3

Aug

-14

Ap

r-15

Cons durables PE(x)Avg+1sd-1sd

24.3

28.5

20.2

15

17

19

21

23

25

27

29

31

33

35

Dec-0

5

Aug

-06

Ap

r-07

Dec-0

7

Aug

-08

Ap

r-09

Dec-0

9

Aug

-10

Ap

r-11

Dec-1

1

Aug

-12

Ap

r-13

Dec-1

3

Aug

-14

Ap

r-15

FMCG PE(x) Avg

+1sd -1sd

19.2

22.5

15.9

10

12

14

16

18

20

22

24

26

28

Dec-0

5

Aug

-06

Ap

r-07

Dec-0

7

Aug

-08

Ap

r-09

Dec-0

9

Aug

-10

Ap

r-11

Dec-1

1

Aug

-12

Ap

r-13

Dec-1

3

Aug

-14

Ap

r-15

Healthcare PE(x) Avg

+1sd -1sd

Page 36

Spark Chitra Katha

BSE IT- 12 month forward PE trend

Source: Bloomberg

Metals and PSU indices are in free fall mode


BSE Metal- 12 month forward PE trend

Source: Bloomberg

BSE Oil & Gas- 12 month forward PE trend

Source: Bloomberg

BSE Power- 12 month forward PE trend

Source: Bloomberg

BSE Realty- 12 month forward PE trend

Source: Bloomberg

BSE PSU- 12 month forward PE trend

Source: Bloomberg

17.8

21.3

14.3

8

10

12

14

16

18

20

22

24

26

Dec-0

5

Aug

-06

Ap

r-07

Dec-0

7

Aug

-08

Ap

r-09

Dec-0

9

Aug

-10

Ap

r-11

Dec-1

1

Aug

-12

Ap

r-13

Dec-1

3

Aug

-14

Ap

r-15

IT Avg +1sd -1sd

9.1

11.5

6.8

4

6

8

10

12

14

16

18

Dec-0

5

Aug

-06

Ap

r-07

Dec-0

7

Aug

-08

Ap

r-09

Dec-0

9

Aug

-10

Ap

r-11

Dec-1

1

Aug

-12

Ap

r-13

Dec-1

3

Aug

-14

Ap

r-15

Metal PE(x) Avg

+1sd -1sd

11.7

14.0

9.4

6

8

10

12

14

16

18

20

Dec-0

5

Aug

-06

Ap

r-07

Dec-0

7

Aug

-08

Ap

r-09

Dec-0

9

Aug

-10

Ap

r-11

Dec-1

1

Aug

-12

Ap

r-13

Dec-1

3

Aug

-14

Ap

r-15

Oil & Gas PE(x) Avg

+1sd -1sd

15.9

20.9

11.0

10

12

14

16

18

20

22

24

26

28

30

Dec-0

7

Aug

-08

Ap

r-09

Dec-0

9

Aug

-10

Ap

r-11

Dec-1

1

Aug

-12

Ap

r-13

Dec-1

3

Aug

-14

Ap

r-15

Power PE(x) Avg+1sd -1sd

13.2

17.7

8.6

4

6

8

10

12

14

16

18

20

22

24

26

Dec-0

7

Aug

-08

Ap

r-09

Dec-0

9

Aug

-10

Ap

r-11

Dec-1

1

Aug

-12

Ap

r-13

Dec-1

3

Aug

-14

Ap

r-15

Realty PE(x) Avg+1sd -1sd

10.1

11.7

8.6

6

7

8

9

10

11

12

13

14

Dec-0

9

Ap

r-10

Aug

-10

Dec-1

0

Ap

r-11

Aug

-11

Dec-1

1

Ap

r-12

Aug

-12

Dec-1

2

Ap

r-13

Aug

-13

Dec-1

3

Ap

r-14

Aug

-14

Dec-1

4

Ap

r-15

PSU PE(x) Avg+1sd -1sd

Page 37

Spark Chitra Katha

Sensex EPS trend (Index to 100)

Source: Bloomberg

Nifty EPS trend (Index to 100)

Source: Bloomberg

3

7

Sensex and Nifty EPS are downgraded on YTD basis after continuous upgrades last year


90

92

94

96

98

100

102

104

106

Ap

r-13

Jun

-13

Aug

-13

Oct-

13

Dec-1

3

Feb-1

4

Ap

r-14

Jun

-14

Aug

-14

Oct-

14

Dec-1

4

Feb-1

5

Ap

r-15

Jun

-15

FY15 FY16 FY17

90

92

94

96

98

100

102

104

106

Ap

r-13

Jun

-13

Aug

-13

Oct-

13

Dec-1

3

Feb-1

4

Ap

r-14

Jun

-14

Aug

-14

Oct-

14

Dec-1

4

Feb-1

5

Ap

r-15

Jun

-15

FY15 FY16 FY17

Nifty stocks EPS (FY1 & FY2) revision

Source: Bloomberg

C o mpany name Secto r M cap (R s mn) 1M 3 M 6M

BPCL Oil & Gas 6,55,331 3.4 18.0 12.6

L&T Cap gds 16,89,423 1.6 0.9 -1.4

Kotak M ahindra Bank Banks 13,09,198 1.2 13.6 7.0

Infosys IT 22,77,306 0.5 -4.5 -3.6

TCS IT 50,82,703 0.5 -1.2 -5.0

Reliance Industries Oil & Gas 32,69,612 0.4 0.6 -4.6

Yes Bank Banks 3,63,336 0.2 0.4 0.4

Wipro IT 13,60,567 0.1 -2.0 -1.8

GAIL India Power 4,92,106 0.1 -14.5 -9.6

Idea Cellular Telecom 6,55,797 0.1 -2.8 -0.6

BHEL Cap gds 6,40,292 0.1 -2.9 -2.2

Axis Bank Banks 13,89,208 0.1 0.6 0.3

Power Grid Power 7,42,624 0.1 0.5 0.2

Hero M otoCorp Auto 5,11,200 0.0 -8.4 -26.9

NTPC Power 11,46,944 0.0 -2.0 -0.8

HDFC Banks 20,68,138 0.0 -1.5 -1.2

Tata Power Power 2,02,036 0.0 -6.2 -1.1

Zee Entertainment M edia 3,54,310 0.0 -5.5 -1.0

Bajaj Auto Auto 7,47,941 0.0 -4.7 -15.1

Bharti A irtel Telecom 17,40,668 0.0 -4.1 -2.5

Asian Paints M aterials 7,43,378 0.0 -7.4 -1.0

ICICI Bank Banks 18,17,237 -0 .1 -2.2 -0.9

HDFC Bank Banks 26,82,740 -0 .1 -1.4 -1.8

Hindustan Unilever FM CG 20,10,074 -0 .1 -1.1 0.2

Bank of Baroda Banks 3,32,056 -0 .1 -13.9 -7.4

Coal India Energy 26,53,505 -0 .1 -2.6 -1.5

Cairn India Energy 3,44,317 -0 .1 -10.4 -14.0

HCL Tech IT 13,52,551 -0 .1 -3.0 -0.1

SBI Banks 20,35,310 -0 .1 -6.1 -2.2

Ambuja Cements M aterials 3,74,938 -0 .1 -4.6 0.1

ITC FM CG 25,24,087 -0 .1 -4.5 -1.7

Sun Pharma Pharma 21,14,351 -0 .2 -12.6 -4.4

ONGC Energy 26,51,774 -0 .2 -4.3 -7.1

Lupin Pharma 8,56,986 -0 .2 -5.6 -0.5

IndusInd Bank Banks 4,63,706 -0 .2 -0.8 -0.3

Cipla/India Pharma 5,09,320 -0 .2 -6.3 -2.4

Vedanta M aterials 5,09,038 -0 .3 -6.8 -6.7

Dr Reddy's Labs Pharma 6,13,647 -0 .4 -1.5 -5.9

NM DC M aterials 4,67,242 -0 .4 -17.1 -4.9

PNB Banks 2,61,956 -0 .5 -18.9 -10.0

Bosch Auto 7,26,687 -1.2 na na

Tata Steel M aterials 2,93,647 -1.3 -24.7 -22.5

Hindalco Industries M aterials 2,28,181 -1.4 -18.4 -4.2

Tata M otors Auto 13,80,700 -1.4 -11.6 -9.4

Ultratech Cement M aterials 8,43,362 -1.7 -9.5 -16.9

Tech M ahindra IT 4,54,521 -1.8 -14.7 -8.4

Grasim Industries M aterials 3,22,862 -1.9 -4.7 -37.1

ACC M aterials 2,77,863 -3 .3 -6.4 -8.9

M &M Auto 8,18,848 -3 .6 -4.6 -11.2

M aruti Suzuki Auto 12,07,021 -10.0 -1.3 -9.0

A verage EP S revisio n (F Y1, F Y2) %

Page 38

Spark Chitra Katha

Q4 15 witnessed the worst quarter with negative Sales and PAT growth

Fundamentals Data

Nifty constituents - Quarterly sales growth versus EBIT margin-First negative sales growth of -8%..

Source: Bloomberg

Quarterly PAT growth is well below average..

Source: Bloomberg

Lowest PAT as % of GDP in FY15..

Source: Bloomberg

37

32

2219

27 2623

28

18 1815

86

4

1517

1315

4

-1

-8 9

10

11

12

13

14

15

16

17

18

-10

-5

0

5

10

15

20

25

30

35

40

Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15

Sales ex fin ex RM Margin ex fin ex RM (RHS)

39

45

23

29 24

1

16 14

(5)

25

4 1

22

9

19 14

22

10

2

(14)-20

-10

0

10

20

30

40

50

Q1'1

1

Q2'1

1

Q3'1

1

Q4'1

1

Q1'1

2

Q2'1

2

Q3'1

2

Q4'1

2

Q1'1

3

Q2'1

3

Q3'1

3

Q4'1

3

Q1'1

4

Q2'1

4

Q3'1

4

Q4'1

4

Q1'1

5

Q2'1

5

Q3'1

5

Q4'1

5

3.2

3.9 4.0

4.8

5.5

4.3

4.9 4.9

4.4

4.03.8

3.4

2.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

6.0

FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15

BSE 500 PAT as % GDP Average

Last 5 year average : 15% Average since 2004 : 4.3

Page 39

Spark Chitra Katha Fundamentals Data

BSE 200- Employee cost in upward trend since FY12

Source: Bloomberg

BSE 200 ex financials- EBIT interest cover at its trough levels

Source: Bloomberg

BSE 200 ex financials- Inventory and Receivables as % of sales

Source: Bloomberg

BSE 200 ex financials- Capex to sales picking after bottom in FY14

Source: Bloomberg

7.4

7.8 7.9

8.3 8.2

8.8 8.9

8.7 8.8

8.2 8.4

8.9

9.1

7.0

7.5

8.0

8.5

9.0

9.5

FY

03

FY

04

FY

05

FY

06

FY

07

FY

08

FY

09

FY

10

FY

11

FY

12

FY

13

FY

14

FY

15E

10.8

9.5 9.6 9.79.4

11.3

9.910.3

9.9 10.19.8 9.6

10.2

12.8

12.0 12.2

13.8

14.1

16.2 13.7

15.1

14.2

13.4 12.7

12.3 12.2

8.0

9.0

10.0

11.0

12.0

13.0

14.0

15.0

16.0

17.0

FY

03

FY

04

FY

05

FY

06

FY

07

FY

08

FY

09

FY

10

FY

11

FY

12

FY

13

FY

14

FY

15E

Receivables as % of sales Inventory as % of sales

3.8

5.2

8.4

9.99.1

6.8

5.6 5.5

6.7

5.6

4.44.1

3.7

2

3

4

5

6

7

8

9

10

FY

03

FY

04

FY

05

FY

06

FY

07

FY

08

FY

09

FY

10

FY

11

FY

12

FY

13

FY

14

FY

15E

6.57.2

9.19.7

13.7

14.9

12.812.1

13.2

10.39.8 9.7

11.1

6

7

8

9

10

11

12

13

14

15

16

FY

03

FY

04

FY

05

FY

06

FY

07

FY

08

FY

09

FY

10

FY

11

FY

12

FY

13

FY

14

FY

15E

Capex set to pick up with increase in Infra spending by government….

Page 40

Spark Chitra Katha

Gearing is continuously on rise while ROE’s bottoming out

Fundamentals Data

Indian banking sector- NPA and restructured trend

Source: Bloomberg

Gearing at its highest levels since FY06…

Note: Ex-financials universe. Source: Bloomberg

BSE 200 ex financials- Dissecting return on equity into key drivers


32 33 31 33 34 32 31 31 32 33

20 2334

3827 32 39

44 45 42

0

10

20

30

40

50

60

70

80

90

FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15Est

Net debt to Equity Cash to Equity Total debt to Equity

10.4%

8.8%

7.2%

4.9%

3.3%

2.5% 2.3% 2.3% 2.4% 2.2% 2.8%3.2%

4.1%

4.8%2.5%

3.9%3.2%

4.2%

5.2%

5.9%

6.2%

0%

2%

4%

6%

8%

10%

12%

FY

02

FY

03

FY

04

FY

05

FY

06

FY

07

FY

08

FY

09

FY

10

FY

11

FY

12

FY

13

FY

14

FY

15P

NPA (%) Restructured Assets (%)

26.9 26.2

18.0 18.2 17.8 16.1

15.1 14.9

12.9

15.1 14.7

10.7 12.1 11.5

9.7 9.0 8.9 8.3

2.1 2.2 2.3

2.2 2.2 2.3 2.3 2.4 2.4

0.83 0.82

0.740.66

0.700.72 0.71

0.710.64

0.60

0.65

0.70

0.75

0.80

0.85

0.90

0.95

1.00

1.05

1.10

0

5

10

15

20

25

30

FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15Est

ROE PAT margin Leverage Asset turnover (RHS)

Indian corporate return on equity at its trough levels on the back of falling

margins and declining asset turnover…

Page 41

Spark Chitra Katha

July and August 2015

Macro Release Calendar


Date Time Event For the period of Survey Actual Prior Revised

Ma

cro

Eve

nts

So

Fa

r

10-Jun-2015 17:30 BoP Current Account Balance 1Q $1.80B -$1.30B -$8.20B -$8.26B

12-Jun-2015 17:30 Industrial Production YoY Apr 1.50% 4.10% 2.10% 2.50%

12-Jun-2015 17:30 CPI YoY May 5.00% 5.01% 4.87% --

15-Jun-2015 12:00 Wholesale Prices YoY May -2.50% -2.36% -2.65% --

16-Jun-2015 10:29 Exports YoY May -- -20.20% -14.00% --

16-Jun-2015 10:29 Imports YoY May -- -16.50% -7.50% --

16-Jun-2015 10:29 Trade Balance May -$11000.0M -$10406.2M -$10992.3M --

30-Jun-2015 17:04 Eight Infrastructure Industries May -- 4.40% -0.40% --

10-Jul-2015 17:30 Industrial Production YoY May 4.00% -- 4.10% --

10-Jul-2015 07:15 Exports YoY Jun -- -- -20.20% --

10-Jul-2015 07:15 Imports YoY Jun -- -- -16.50% --

10-Jul-2015 07:15 Trade Balance Jun -$10500.0M -- -$10406.2M --

Up

co

min

g M

ac

ro E

ve

nts

13-Jul-2015 17:30 CPI YoY Jun 5.10% -- 5.01% --

14-Jul-2015 12:00 Wholesale Prices YoY Jun -2.30% -- -2.36% --

24-Jul-2015 07:31 Eight Infrastructure Industries Jun -- -- 4.40% --

04-Aug-2015 11:00 RBI Repurchase Rate Aug-04 -- -- 7.25% --

10-Aug-2015 08:17 Exports YoY Jul -- -- -- --

10-Aug-2015 08:17 Imports YoY Jul -- -- -- --

10-Aug-2015 08:15 Trade Balance Jul -- -- -- --

12-Aug-2015 17:30 Industrial Production YoY Jun -- -- -- --

12-Aug-2015 17:30 CPI YoY Jul -- -- -- --

14-Aug-2015 12:00 Wholesale Prices YoY Jul -- -- -- --

Page 42

Spark Chitra Katha

Spark Disclaimer

Spark Capital Advisors (India) Private Limited (Spark Capital) and its affiliates are engaged in investment banking, investment advisory and institutional equities and

infrastructure advisory services. Spark Capital is registered with SEBI as a Stock Broker and Category 1 Merchant Banker.

We hereby declare that our activities were neither suspended nor we have defaulted with any stock exchange authority with whom we are registered in the last five years. We

have not been debarred from doing business by any Stock Exchange/SEBI or any other authorities, nor has our certificate of registration been cancelled by SEBI at any point of

time.

Spark Capital has a subsidiary Spark Investment Advisors (India) Private Limited which is engaged in the services of providing investment advisory services and is registered

with SEBI as Investment Advisor. Spark Capital has also an associate company Spark Infra Advisors (India) Private Limited which is engaged in providing infrastructure

advisory services.

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

This document is provided for assistance only and is not intended to be and must not alone be taken as the basis for an investment decision. Nothing in this document should

be construed as investment or financial advice, and nothing in this document should be construed as an advice to buy or sell or solicitation to buy or sell the securities of

companies referred to in this document.

Each recipient of this document should make such investigations as it deems 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 should consult its own advisors to determine the merits and risks of such an investment. This

document is being supplied to you solely for your information and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or published,

copied, in whole or in part, for any purpose. 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 Spark Capital

and/or its 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. This

material should not be construed as an offer to sell or the solicitation of an offer to buy any security in any jurisdiction where such an offer or solicitation would be illegal.

Spark Capital makes no representation or warranty, express or implied, as to the accuracy, completeness or fairness of the information and opinions contained in this

document. Spark Capital , its affiliates, and the employees of Spark Capital and its affiliates may, from time to time, effect or have effected an own account transaction in, or

deal as principal or agent in or for the securities mentioned in this document. They may perform or seek to perform investment banking or other services for, or solicit

investment banking or other business from, any company referred to in this report.

This report has been prepared on the basis of information, which is already available in publicly accessible media or developed through an independent analysis by Spark

Capital. While we would endeavour to update the information herein on a reasonable basis, Spark Capital and its affiliates are under no obligation to update the information.

Also, there may be regulatory, compliance or other reasons that prevent Spark Capital and its affiliates from doing so. Neither Spark Capital nor its affiliates or their respective

directors, employees, agents or representatives shall be responsible or liable in any manner, directly or indirectly, for views or opinions expressed in this report or the contents

or any errors or discrepancies herein or for any decisions or actions taken in reliance on the report or the inability to use or access our service in this report or for any loss or

damages whether direct or indirect, incidental, special or consequential including without limitation loss of revenue or profits that may arise from or in connection with the use of

or reliance on this report.

Absolute

Rating

Interpretation

BUY Stock expected to provide positive returns of >15% over a 1-year horizon REDUCE Stock expected to provide returns of <5% – -10% over a 1-year

horizon

ADD Stock expected to provide positive returns of >5% – <15% over a 1-year

horizon SELL Stock expected to fall >10% over a 1-year horizon

Disclaimer

(1/2)

Page 43

Spark Chitra Katha

Spark Capital and/or its affiliates and/or employees may have interests/positions, financial or otherwise in the securities mentioned in this report. To enhance transparency,

Spark Capital has incorporated a disclosure of interest statement in this document. This should however not be treated as endorsement of views expressed in this report:

Analyst Certification of Independence

The views expressed in this research report accurately reflect the analyst’s personal views about any and all of the subject securities or issuers; and no part of the research

analyst’s compensations was, is or will be, directly or indirectly, related to the specific recommendation or views expressed in the report.

Additional Disclaimer for US Institutional Investors

This research report prepared by Spark Capital Advisors (India) Private Limited is distributed in the United States to US Institutional Investors (as defined in Rule 15a-6 under

the Securities Exchange Act of 1934, as amended) only by Auerbach Grayson, LLC, a broker-dealer registered in the US (registered under Section 15 of Securities Exchange

Act of 1934, as amended). Auerbach Grayson accepts responsibility on the research reports and US Institutional Investors wishing to effect transaction in the securities

discussed in the research material may do so through Auerbach Grayson. All responsibility for the distribution of this report by Auerbach Grayson, LLC in the US shall be borne

by Auerbach Grayson, LLC. All resulting transactions by a US person or entity should be effected through a registered broker-dealer in the US. This report is not directed at you

if Spark Capital Advisors (India) Private Limited or Auerbach Grayson, LLC is prohibited or restricted by any legislation or regulation in any jurisdiction from making it available

to you. You should satisfy yourself before reading it that Auerbach Grayson, LLC and Spark Capital Advisors (India) Private Limited are permitted to provide research material

concerning investment to you under relevant legislation and regulations;

Disclosure of interest statement Yes/No

Analyst financial interest in the company No

Group/directors ownership of the subject company covered No

Investment banking relationship with the company covered No

Spark Capital’s ownership/any other financial interest in the company covered No

Associates of Spark Capital’s ownership more than 1% in the company covered No

Any other material conflict of interest at the time of publishing the research report No

Receipt of compensation by Spark Capital or its Associate Companies from the subject company covered for in the last twelve months:

Managing/co-managing public offering of securities

Investment banking/merchant banking/brokerage services

products or services other than those above

in connection with research report

No

Whether Research Analyst has served as an officer, director or employee of the subject company covered No

Whether the Research Analyst or Research Entity has been engaged in market making activity of the Subject Company; No

Disclaimer

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