INDIA | Result Preview · 2018-04-11 · Better product mix and higher contribution from...

INSTITUTIONAL EQUITY RESEARCH

Page | 1 | PHILLIPCAPITAL INDIA RESEARCH

Q4FY18 Results Preview

Operating performance gaining traction

INDIA | Result Preview

9 April 2018

We expect momentum in revenue and earnings growth for Q4FY18 driven by automobiles, metals, speciality chemicals, and consumer sectors (FMCG and consumer-focused NBFCs). We forecast our coverage universe’s sales/EBIDTA/PAT to grow by 12%/5%/-3% yoy. EBITDA and earnings growth ex-PSB will be 12.4%/5.4% yoy, as PSBs are struggling with NPA issues and frauds. While earnings growth will be dented by higher taxation and lower other income in some cases, we find the core operating performance improving. Automobile sector will be led by a strong pickup in volume growth while for the consumer sector, it will be healthy growth trends and sequential improvement in demand. IT and pharmaceutical sectors will continue to see sluggish growth while some recovery is likely in IT. Telecom will report one of the worst quarters in recent history because of pricing challenges even as volume growth and subscriber additions for incumbents continue to remain robust.

Key factors driving growth for the quarter are:

Strong volume pickup in automobile sector, translating in revenue growth

Robust revenue growth for infrastructure companies driven by strong order book. Order book traction will continue for capital goods companies also.

Healthy order inflow for the capital goods sector will translate into reasonable operating growth while earnings will be muted because of high effective tax rate.

Domestic consumption has picked up in both staples and discretionary categories. Rural demand will outpace urban demand due to government focus on rural infrastructure and farmers’ income ahead of central elections next year.

Consumer-facing sectors barring telecom will see strong earnings growth trends: Automobiles, consumer (both staples and discretionary), NBFCs will see robust revenue and earnings growth. Volume growth in the automobiles has been strong translating strong revenue growth. FMCG sector ex-ITC will see robust volume growth; we estimate it to be around 8%. Margins will be stable sequentially. NBFCs helped by low base will report strong earnings growth. Telecom sector will continue to see significant pricing pressure as well as higher network costs translating into margin decline. This quarter is likely to be the bottom in terms of earnings as subscriber additions and data volume growth have been robust. Our key ideas from the consumption space are Jubilant Foodworks, Colgate, Escorts, R K Forgings, Apollo Tyres, and Mahindra & Mahindra Financial Services, and Cholamandalam Finance Core sectors seeing improved traction: System credit growth is seeing improvement even as PSU banks are likely to see sluggish growth. Capital goods sector is seeing strong traction of order inflows, but earnings growth will be muted because of higher taxation. Cement sector is seeing strong volume growth traction but pricing pressure will translate into a sequential decline in realisations. Our key ideas from the core sectors are: Cochin Shipyard, CG Power, KECI, Dalmia bharat, Indusind Bank, HDFC Bank, and Dewan Housing Pharmaceuticals will be under pressure but IT could see some recovery: While IT sector will report sluggish growth, all large IT companies will report positive organic constant currency revenue growth of 1-2% qoq. Pharmaceuticals sector will continue to see margin pressure even as domestic business will see improvement. Specialty chemicals and mid-caps will report good results: Specialty chemicals will report robust revenue and earnings growth. We estimate revenue/PAT growth 14%/30% yoy for the sector, led by steady volume and realisation growth. Consumer-facing mid-cap companies will see strong growth. Our key ideas from this space are: Aarti Industries, Meghmani Organics, SRF, and Bajaj Electricals.

PAT growth distribution: Q4FY18

Source: PhillipCapital India Research Estimates

Naveen Kulkarni, CFA, FRM (+ 9122 6246 4122) [email protected] Neeraj Chadawar (+91 22 6246 4116)

[email protected]

PhillipCapital India Research

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Telecom

Banks

Cement

Pharma

PC - Universe

Capital Goods

IT Services

Oil & Gas

Infrastructure

Automobiles

FMCG

Metals

Specailty Chemicals

Midcap

NBFC

PAT - YoY

mailto:[email protected]

mailto:[email protected]


Q4FY18 RESULTS PREVIEW

Earnings estimates

_____________ Revenue _____________ _____________ EBITDA ______________ _______________ PAT _______________

Sector (Rs bn) Mar-

18E

Dec-17 qoq (%) Mar-17

yoy (%) Mar-18E Dec-17 qoq (%) Mar-17

yoy (%) Mar-

18E

Dec-17 qoq (%) Mar-17

yoy (%)

Automobiles 1,565 1,346 16.3 1,350 16.0 215 172 25.3 177 21.5 105 71 48.7 93 13.9 Capital Goods 752 542 38.7 678 10.8 93 56 65.4 86 8.0 60 31 90.0 61 (1.5) Banks 664 635 4.4 641 3.6 553 488 13.4 584 (5.4) (14) 20 (168.4) 54 (125.7) NBFC 104 99 5.7 90 15.5 82 75 10.5 70 16.9 41 40 2.8 25 65.5 FMCG 454 423 7.3 410 10.6 108 103 4.4 94 14.5 73 72 2.3 64 14.2 Infrastructure 132 110 20.1 112 17.9 34 34 0.3 30 12.8 18 17 9.1 17 5.8 IT Services 919 901 1.9 869 5.7 193 184 4.6 182 5.9 164 161 2.2 161 2.0 Metals 1,149 1,098 4.7 1,046 9.8 248 227 9.4 228 8.7 104 90 16.6 89 16.9 Telecom 339 346 (2.1) 379 (10.6) 99 109 (8.9) 121 (17.6) (8) (5) 79.9 7 (222.4) Media 33 26 27.6 22 47.2 9 8 12.8 7 36.0 3 2 8.6 2 24.0 Pharma 313 311 0.6 298 5.0 67 68 (1.2) 65 2.4 42 37 13.8 45 (4.6) Cement 246 226 8.8 189 30.0 40 38 5.2 35 12.8 17 16 3.5 17 (5.1) Specialty Chem 43 40 6.2 38 13.8 8 7 12.1 6 30.0 4 3 21.6 3 29.1 Midcap 135 120 12.4 104 29.5 17 14 18.4 13 35.7 10 9 14.9 7 34.2 Oil & Gas 1,226 1,081 13.4 975 25.8 170 183 (7.0) 147 16.3 105 110 (4.8) 102 2.8

PC Universe 8,072 7,304 10.5 7,202 12.1 1,936 1,765 9.7 1,845 4.9 724 674 7.4 748 (3.1)

PC Uni. (ex PSB) 7,686 6,927 11.0 6,806 12.9 1,659 1,498 10.8 1,476 12.4 837 754 11.0 794 5.4

PC Uni (ex Fin &

O&G)

6,078 5,489 10.7 5,496 10.6 1,131 1,020 10.9 1,044 8.3 593 504 17.6 567 4.6

Sector-wise contribution: Revenue and PAT


19%

15%

14%

11%

9% 8%

6% 4%

4% 3% 2% 2% 1% 1%

100%

0%

20%

40%

60%

80%

100%

Q4FY18 Revenue contribution (%)

23%

15%

14%

14%

10% 8%

6% 6%

3% 2% 1% 1%

-1% -2% 100%

-10%

10%

30%

50%

70%

90%

110%

Q4FY18 PAT contribution (%)



Revenue, EBITDA, PAT growth (yoy)


PC universe: Sector-wise EPS (Rs)


(150)

(100)

(50)

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50

Revenue (Rs mn) EBITDA (Rs mn) PAT (Rs mn)

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Q4FY18E Q3FY18



Key sector highlights

Sector Key observations / outlook Earnings plays

Auto Strong volumes across OEMs drive revenue growth Escorts, RK Forgings, Ceat, Apollo Tyres

Strong demand, stable pricing in the tyres sector

Some margin pressure led by RM

Banking Weak credit growth to continue to keep pressure on NII growth,

especially for PSU banks

Banks: HDFC Bank, IndusInd Bank, Dewan Housing

Reduction in base rate and interest reversal to keep NIMs under

pressure

NBFCs: Cholamandalam Finance, Mahindra Finance

Asset quality to remain under pressure, as slippages from

restructured loans continue to flow

Cement Realisations likely to improve only for East India based players – for

all other regions it will remain weak

Dalmia Bharat

Volume trends will remain strong – barring UltraTech, JK Cement to

surprise most positively

Scale efficiencies will help partially offset cost escalations

FMCG Consumer sector should see sequential improvement in demand

and stable margins.

We expect a robust 8% yoy volume growth for the sector.

Rural demand should outpace urban demand but challenges with

CSD will continue.

ITC will continue to see pressure on cigarette volumes. We build for

a volume decline of 4%.

Our top result plays: Jubilant Foodworks, Colgate, Titan

Industries, GSK Consumer and Nestle

Capital Goods Expect order inflows to be flat due to delay in award of some large

orders.

Positive: Cochin Shipyard, CG Power, KECI

Revenue growth to be driven by robust execution after sedate after

9% yoy growth in 9MFY18.

Negative: Va Tech Wabag, Bharat Electronics, Engineers India

Higher raw material prices to offset any volume benefits resulting in

marginal decline in margins.

Higher effective tax rate would led to decline in earnings.

IT Services Moderate expectations - positive CC impact

Margins to expand marginally for most companies, driven by

operational efficiencies

Guidance by Infosys, HCLT, and Wipro will be keenly watched

Management commentary on CY18 client budgets will be of utmost

importance

Infrastructure Strong revenue growth for most EPC companies - driven by strong

orderbooks and pick-up in execution

Negative: ITD Cementation

Traffic growth for BOT companies to rebound from the GST impact Positive: NCC, KNR Construction, PNC Infratech

Margins to remain stable – yoy and qoq

High double-digit growth in earnings for most companies - excl

ADSEZ, impacted by higher tax rate

Pharmaceuticals We estimate 5% yoy growth for our coverage universe despite

continuing pricing pressure in US business. The growth is led by an

exclusivity launch in the US and low base of domestic sales in

Q4FY17 (impacted due to GST).

Positive ARBP IN: Strong US sales (+5% CC/INR growth)

supported by gRenvela sales will help overall earnings to grow

by 19%.

We estimate EBITDA margin to sustain at 21.3% for the PC pharma

universe. Resulting EBITDA to see 3% yoy growth.

Positive CDH IN: Strong growth in US business caused by gLialda

launch and incremental sales from Sentynl will led to 52%

growth in earnings.

Estimate flat earnings for Phillip Pharma Universe in Q4FY18. Positive IPCA IN: Recovery in overall business and reduction in

remediation expenses will led to strong growth in earnings.

Negative SUNP IN: Weak performance in Taro and high base will

led to 12% decline in earnings.

Negative LPC IN: Weak performance in the US will led to a 53%

decline in earnings.

Specialty Chem Phillip Capital Specialty chemicals universe to see 14% growth led by

steady volume and value growth.

Positive Aarti: Strong performance in specialty chemicals

segment led by rising contribution from value-added products

will help overall earnings to grow by 24%.

Better product mix and higher contribution from value-added

products will help EBITDA margin to expand 220bps yoy.

Positive CFIN: Incremental sales from new china plant and

recovery in operating performance will boost profitability

In line with strong sales and operating performance, we estimate

our universe to deliver PAT growth of 29% in Q4FY18.

Positive Meghmani: Led by overall strong performance across

all segment, earnings to see 89% growth



Positive Atul: Sustained performance both in life sciences and

chemicals will lead to 18% growth in earnings

Positive Aarti: Strong performance in specialty chemicals led by

rising contribution from value-added products will help overall

earnings to grow by 24%

Telecom Telecom will see continued ARPU dilution and also pressure on cost

structure on account of increase in network operating expenses

Negative: Bharti’s mobility business will report loss with

possibility of even the consolidated business reporting losses

Subscriber additions and data volume growth will be very strong. Negative: Idea Cellular will report sub Rs 10bn EBIDTA for the

quarter and significant losses.

Bharti’s Africa business should be stable

Source: PhillipCapital India Research



Automobiles

Earnings estimates

(Rs mn) Mar-18E Dec-17 qoq (%) Mar-17 yoy (%) Key expectations

Maruti Suzuki

Revenues 206959 192832 7.3% 183334 12.9% Revenue growth of 13% yoy led by 11% volume growth; EBITDA

margin largely flat qoq with higher RM cost being offset by operating

leverage

EBITDA 33059 30378 8.8% 25604 29.1%

EBITDA margin (%) 16.0% 15.8% 14.0%

PAT 20816 17990 15.7% 17087 21.8%

EPS (Rs) 69 60 15.7% 57 21.8%

JLR

Revenues 7669 6310 21.5% 7268 5.5% Revenue up 6% yoy, led by flattish volumes; EBITDA margin to

improve 220bps qoq, led by operating leverage EBITDA 1002 685 46.3% 1057 -5.2%

EBITDA margin (%) 13.1% 10.9% 14.5%

PAT 377 89 323.8% 541 -30.3%

EPS (Rs) 7669 6310 21.5% 7268 5.5%

Tata Motors

Revenues 196579 161016 22.1% 135867 44.7% 35% yoy standalone volume growth and realization improvement

leads to 45% yoy growth in revenues

Margins to improve sharply yoy led by robust volumes and cost

cutting

EBITDA 18962 15200 24.8% 5552 241.5%

EBITDA margin (%) 9.6% 9.4% 4.1%

PAT 5234 1793 191.8% -8300 -163.1%

EPS (Rs) 2 1 -3

Mahindra & Mahindra

Revenues 130350 114915 13.4% 106121 22.8% Total volume grew by 25% yoy equally led by tractors driving revenue

growth

Lower tractor volumes qoq and higher RM cost to impact sequential

margins by 45bps

EBITDA 18599 16926 9.9% 12368 50.4%

EBITDA margin (%) 14.3% 14.7% 11.7%

PAT 10876 13057 -16.7% 8737 24.5%

EPS (Rs) 18 20 -7.4% 14 28.2%

Ashok Leyland

Revenues 89603 71132 26.0% 66179 35.4% Revenue to increase 35% yoy led by 23% volume growth

Operating leverage will see OPM expand by 150bps qoq EBITDA 11301 7884 43.3% 7299 54.8%

EBITDA margin (%) 12.6% 11.1% 11.0%

PAT 6836 4499 51.9% 4762 43.6%

EPS (Rs) 2.4 1.6 51.9% 1.6 45.7%

Bajaj Auto

Revenues 62145 65664 -5.4% 50669 22.6% 33% yoy jump in volume helps revenue growth

Margins to decline 35bps qoq led by RM pressure and higher other

expenses partly offset by better mix

EBITDA 12147 12984 -6.4% 10439 16.4%

EBITDA margin (%) 19.5% 19.8% 20.6%

PAT 10323 11119 -7.2% 9246 11.6%

EPS (Rs) 36 38 -7.2% 32 11.6%

Hero MotoCorp

Revenues 85984 73055 17.7% 69152 24.3% Revenue growth led by 23% yoy volume growth

Operating leverage helps margins expand qoq partly offset by RM

cost pressures

EBITDA 14882 11580 28.5% 9576 55.4%

EBITDA margin (%) 17.3% 15.9% 13.8%

PAT 10356 8054 28.6% 7178 44.3%

EPS (Rs) 52 40 28.6% 36 44.3%

Apollo Tyres

Revenues 39234 40501 -3.1% 33256 18.0% Revenues expected to grow by 18% yoy led by strong domestic

business growth.

Channel checks suggest industry was out of stock in TBR and TBB

segment

EBITDA margin to improve 50bps qoq

EBITDA 5002 4964 0.8% 3699 35.2%

EBITDA margin (%) 12.8% 12.3% 11.1%

PAT 2469 2453 0.7% 2281 8.2%

EPS (Rs) 5 4 14.2% 5 8.2%

Bharat Forge

Revenues 14545 13580 7.1% 11257 29.2% Revenue to rise 29% yoy (7% qoq) led by all segments

Margins to be flat qoq EBITDA 4112 3837 7.2% 3199 28.5%

EBITDA margin (%) 28.3% 28.3% 28.4%

PAT 2293 1956 17.3% 1800 27.4%

EPS (Rs) 10 8 17.3% 8 27.4%

Mahindra CIE

Revenues 16843 16184 4.1% 15212 10.7% Revenue of European business to grow 5% yoy, India business up 17%

European business margins to improve 180bps yoy EBITDA 2458 2419 1.6% 1946 26.3%

EBITDA margin (%) 14.6% 14.9% 12.8%




Ceat

Revenues 16801 15742 6.7% 14718 14.2% Revenue to rise 14% yoy, stock out in truck segment

PVs strong, 2W volumes weaker

EBITDA margins to improve by 50bps qoq as OHT plant ramps up

EBITDA 2091 1870 11.8% 1325 57.8%

EBITDA margin (%) 12.4% 11.9% 9.0%

PAT 972 831 17.0% 609 59.5%

EPS (Rs) 24 20 17.0% 15 59.5%

Escorts

Revenues 15087 12050 25.2% 10223 47.6% Strong revenue growth of 45% yoy led by 57% yoy jump in tractor

volumes

Margins expand qoq driven by higher volumes

EBITDA 1858 1450 28.1% 744 149.9%

EBITDA margin (%) 12.3% 12.0% 7.3%

PAT 1176 920 27.9% 591 98.9%

EPS (Rs) 10 8 28.0% 4 164.8%

RK Forgings

Revenues 4343 4001 8.6% 2887 50.5% Revenues to improve 9% qoq led by both domestic and exports

EBITDA margin to improve 70bps qoq EBITDA 867 771 12.4% 564 53.9%

EBITDA margin (%) 20.0% 19.3% 19.5%

PAT 344 277 24.2% 141 144.8%

EPS (Rs) 12 10 24.2% 5 144.8%

Source: Company, PhillipCapital India Research



Banking

Earnings estimates - Banks


Axis Bank

Net Interest income 49,274 47,315 4.1% 47,288 4.2% Loan growth to see improvement driven by retail loans

NIM to decline due to NPA recognition

Credit cost to remain elevated due to increase in NPAs from watch

list and below investment grade portfolio.

RBI's revised framework on resolution of stressed assets will result in

recognition of SDR and S4A accounts, leading to elevation in slippage

Pre-provision Profit 43,374 38,538 12.5% 43,749 -0.9%

PAT 3,762 7,264 -48.2% 12,253 -69.3%

NIM (%) 3.35 3.38 -0.03 3.83 -0.48

EPS (Rs) 1.5 2.8 -48.3% 5.1 -71.4%

GNPA% 6.4 5.3 1.2 5.0 1.4

NNPA% 3.4 2.6 0.9 2.1 1.3

Slippages 90000 44280 103.3% 48110 87.1%

Bank of Baroda

Net Interest income 46,206 43,940 5.2% 35,819 29.0% Stability in overseas loans book and growth in domestic loan book

will push overall loan book growth

Slippage to elevate due to revised framework on stressed loans by

the RBI

Absence of trading gains and high credit costs to keep earning under

pressure

Things to watch: Sale of NPA – for which the bank had sought

expression of interest

Pre-provision Profit 36,472 36,501 -0.1% 30,202 20.8%

PAT (9,470) 1,118 -947.2% 1,547 -712.0%

NIM (%) 2.75 2.72 0.03 2.19 0.56

EPS (Rs) (4.1) 0.5 -947.2% 0.7 -712.0%

GNPA% 11.7 11.3 0.4 10.5 1.2

NNPA% 5.4 5.0 0.4 4.7 0.6

Slippages 90,000 56,300 59.9% 40,770 120.8%

Bank of India

Net Interest income 27,749 25,012 10.9% 34,686 -20.0% Moderate NII growth due to weak credit expansion. After PCR, the

bank will focus on recalibration of the balance sheet

Low coverage to keep NPA provisions higher

Bank recovered a significant part of NPA loans given against SBLC

during Q4. The recovery will negate the impact of high slippage,

which may hit most banks due to change in RBI's framework for

stressed assets


PAT (3,121) (23,412) -86.7% (10,455) -70.1%

NIM (%) 2.00 1.88 0.12 2.39 -0.39

EPS (Rs) (1.8) (19.8) -90.9% (9.9) -81.9%

GNPA% 15.6 16.9 -1.4 13.2 2.3

NNPA% 8.9 10.3 -1.4 6.9 2.0

Slippages 70,000 183,290 -61.8% 69,150 1.2%

Canara Bank

Net Interest income 31,686 29,411 7.7% 27,082 17.0% Strong NII driven by improvement in credit growth and favourable

base

Low specific coverage will warrant high provision for NPAs, which

will continue to drag the bottom line

Absence of trading gains to keep earnings under pressure

Slippage to elevate due to revised framework on stressed loans by

the RBI


PAT (10,171) (6,122) 66.1% 2,142 -574.9%

NIM (%) 2.35 2.39 -0.04 2.23 0.12

EPS (Rs) (13.9) (10.3) 35.3% 3.6 -486.8%

GNPA% 11.1 10.4 0.7 9.6 1.5

NNPA% 7.5 6.8 0.8 6.3 1.2

Slippages 60,000 26,410 127.2% 31,000 93.5%

DCB Bank

Net Interest income 2,720 2,505 8.6% 2,203 23.5% Favourable base to aid credit growth. Stable NIM to provide strong

NII growth

Trading gain impacted due to hardening of yield

Operating leverage at play with expansion of balance sheet

Stability in asset quality to keep credit costs under check

Pre-provision Profit 1,360 1,225 11.0% 1,153 17.9%

PAT 624 570 9.5% 529 18.1%

NIM (%) 4.07 4.12 -0.05 4.04 0.03

EPS (Rs) 2.0 1.9 9.4% 1.9 9.4%

GNPA% 2.0 1.9 0.1 1.6 0.4

NNPA% 1.0 0.9 0.1 0.8 0.2

Slippages 1,000 1,038 -3.7% 746 34.0%

HDFC Bank

Net Interest income 112,283 103,143 8.9% 90,551 24.0% Credit growth to remain strong aided by retail unsecured loans and

commercial vehicles. Stable NIM to provide strong NII growth

Slippage to decline qoq as Q3 had some divergence-related slippages

Q4 is a seasonally strong quarter for fee income – which should

witness strong growth


PAT 49,448 46,426 6.5% 39,899 23.9%

NIM (%) 4.30 4.30 0 4.30 0.00

EPS (Rs) 19.2 17.9 7.2% 15.6 23.4%

GNPA% 1.3 1.3 0.0 1.1 0.2

NNPA% 0.4 0.4 0.0 0.3 0.1

Slippages 30,000 45,880 -34.6% 23,627 27.0%




ICICI Bank

Net Interest income 59,025 57,053 3.5% 59,622 -1.0% Yoy contraction in NIM to drag NII growth

Gain from stake sale in ICICI Securities amounting to ~Rs 35bn. This

will help create high provisions for stressed assets

High credit costs to keep bottom-line under pressure




PAT 11,324 16,502 -31.4% 20,246 -44.1%

NIM (%) 3.10 3.14 -0.04 3.57 -0.47

EPS (Rs) 1.8 2.6 -31.3% 3.5 -49.2%

GNPA% 8.7 7.8 0.9 7.9 0.8

NNPA% 4.5 4.2 0.3 4.9 -0.3

Slippages 120,000 43,800 174.0% 112,890 6.3%

Indian Bank

Net Interest income 17,450 16,227 7.5% 13,849 26.0% Credit growth gain momentum driven by RAM segment

Stability in NIM to result in strong growth in NII

Absence of trading gains to moderate earnings growth




PAT 2,100 3,031 -30.7% 3,197 -34.3%

NIM (%) 2.86 2.85 0.0 2.70 0.16

EPS (Rs) 4.4 6.3 -30.7% 6.7 -34.3%

GNPA% 7.2 6.3 0.9 7.5 -0.3

NNPA% 4.1 3.3 0.8 4.4 -0.2

Slippages 28,000 9,550 193.2% 9,600 191.7%

Indusind Bank

Net Interest income 20,843 18,948 10.0% 16,675 25.0% Loan growth to surpass industry growth by huge margin. Commercial

vehicle to witness strong traction

Declining cost of funds to provide stability in NIM

Collection efficiency across retail products satisfactory

Expect update on merger progress

Thing to watch: Outcome of the divergence report


PAT 9,462 9,363 1.1% 7,516 25.9%

NIM (%) 4.00 3.99 0.01 4.00 0.00

EPS (Rs) 15.8 15.6 1.2% 12.6 25.7%

GNPA% 1.2 1.16 0.1 0.93 0.31

NNPA% 0.4 0.46 0.0 0.39 0.05

Slippages 5,500 4,080 34.8% 6,340 -13.2%

OBC

Net Interest income 10,850 10,179 6.6% 13,073 -17.0% Moderate NII growth due to weak credit expansion. After PCR, the

bank will focus on recalibration of the balance sheet

Low coverage to keep NPA provision higher

Absence of trading gains to keep earning under pressure

Pre-provision Profit 6,263 7,428 -15.7% 10,171 -38.4%

PAT (17,464) (19,854) -12.0% (12,180) 43.4%

NIM (%) 2.00 1.95 0.05 2.54 -0.54

EPS (Rs) (27.6) (57.4) -51.9% (35.2) -21.6%

GNPA% 17.2 17.0 0.2 13.7 3.5

NNPA% 9.6 9.5 0.0 9.0 0.6

Slippages 45,000 33,045 36.2% 39,129 15.0%

Punjab National Bank

Net Interest income 39,414 39,887 -1.2% 36,835 7.0% Stable NIM and improvement in credit growth to aid NII growth



Credit costs to remain higher as the bank provisions for NPAs and

fraud-related issues


PAT (33,787) 2,301 -1568.3% 2,619 -1390.1%

NIM (%) 2.35 - 2.4 2.38 -0.03

EPS (Rs) (13.9) 0.9 -1568.3% 1.2 -1231.7%

GNPA% 15.1 12.1 3.0 12.5 2.6

NNPA% 9.7 7.6 2.2 7.8 1.9

Slippages 190,000 31,750 498.4% 75,000 153.3%

State Bank of India

Net Interest income 187,487 186,875 0.3% 210,660 -11.0% Low single digit growth in loan book along with decline in NIM to

contract NII

Slippage to remain elevated as the bank plans to dissolve the watch-

list after FY18, by recognising balance stress as NPA

High provision to overshadow profitability


PAT (28,763) (24,164) 19.0% (34,410) -16.4%

NIM (%) 2.45 2.45 0.0 2.74 -0.29

EPS (Rs) (3.3) (2.8) 19.0% (4.3) -22.8%

GNPA% 11.0 10.4 0.6 9.1 1.9

NNPA% 6.1 5.6 0.5 5.2 0.9

Slippages 35,000 26,780 30.7% -




Union Bank

Net Interest income 25,541 25,483 0.2% 23,870 7.0% Expect double digit credit growth driven by RAM

Low specific coverage will warrant high provision for NPA, which will

continue to drag bottom line


PAT (11,646) (12,499) -6.8% 1,082 -1176.0%

NIM (%) 2.20 2.23 -0.03 2.27 -0.07

EPS (Rs) (10.0) (14.6) -31.8% 1.6 -733.0%

GNPA% 13.6 12.4 1.2 11.2 2.4

NNPA% 7.4 6.7 0.7 6.6 0.8

Slippages 70,000 41,870 67.2% 29,510 137.2%

Earnings estimates – Housing Finance Companies


HDFC Limited

Net Interest income 32,976 29,302 12.5% 28,542 15.5% Loan growth driven by retail loans, corporate segment to be driven

by LRD

Spread to remain stable as decline in cost would be offset by decline

in yields

Asset quality to remain stable

Thing to watch: Management commentary on inorganic acquisition


PAT 23,699 19,949 18.8% 20,442 15.9%

NIM (%) 2.30 2.29 0.01 2.33 -0.03

EPS (Rs) 14.1 12.5 13.2% 12.9 9.9%

LIC Housing Finance

Net Interest income 9,943 8,976 10.8% 10,396 -4.4% Loan growth of 15% to be driven non-housing loans

Weak NII growth due to yoy compression in NIM

Asset quality likely to remain stable


PAT 5,323 4,911 8.4% 5,292 0.6%

NIM (%) 2.45 2.33 0.12 2.97 -0.52

EPS (Rs) 10.5 9.7 8.4% 10.5 0.6%

Repco Home Finance

Net Interest income 1,095.2 1,071.0 2.3% 1,028.4 6.5% Disbursement to improve yoy on a low base; loan growth to pick up

sequentially

NIM will remain stable as decline in yields will be offset by decline in

cost of funds

GNPAs to decline to ~3%

Pre-provision Profit 2,864.6 2,775.0 3.2% 2,735.3 4.7%

PAT 554.5 484.9 14.4% 505.9 9.6%

NIM (%) 4.6 4.6 0.02 4.7 -0.10

EPS (Rs) 8.9 7.7 14.4% 8.1 9.6%

Indiabulls Housing Fin

Net Interest income 13,952 13,960 -0.1% 11,923 17.0% Strong growth in loan book of 27% yoy to be driven by core home

loans

NIM to remain stable as decline in yields will be compensated by

decline in cost of funds


PAT 9,908 9,300 6.5% 8,405 17.9%

NIM (%) 5.73 6.00 -0.3 6.14 -0.41

EPS (Rs) 23.3 21.9 6.5% 19.8 17.9%

Dewan Housing Finance

Net Interest income 6,523 6,256 4.3% 5,356 21.8% Loan growth to be driven by non-housing loans, share of housing loans

may come down marginally

Stable NIM driven by decline in cost of funds and increasing share of

higher-yielding loans

Stable asset quality


PAT 3,209 3,060 4.9% 2,483 29.3%

NIM (%) 3.0 3.0 (0.0) 3.0 -0.04

EPS (Rs) 10.2 9.8 5.0% 7.9 29.3%

Source: Company, PhillipCapital India Research Estimates



Earnings estimates – NBFC


Bharat Financials

Net Interest income 3,103 3,190 -2.7% 1,960 58.3% As demonetisation related pain settles, disbursement is gaining

momentum

Stable margin to aid NII growth

Credit costs returning to normalised level

Pre-provision Profit 1,738 1,704 2.0% 995 74.7%

PAT 1,588 1,614 -1.6% (2,355) -167.4%

NIM (%) 9.43 10.49 -1.1 7.32 2.10

EPS (Rs) 11.4 11.6 -1.9% (17.1) -166.8%

Shriram Transport Fin

Net Interest income 18,063 17,094 5.7% 14,087 28.2% NII growth to remain healthy led by 25% growth in disbursement

Operating profit growth to trend in line with top line growth

Credit cost to rise as it shifts to 90dpd NPA recognition

NIMs to see marginal expansion over previous quarter


PAT 3,913 4,956 -21.1% 1,497 161.4%

NIM (%) 7.9 7.8 0.09 7.3 0.61

EPS (Rs) 17.2 21.8 -21.1% 6.6 161.4%

Cholamandalam Fin.

Net Interest income 8,285 7,930 4.5% 6,594 25.7% Higher AUM growth and improvement in NIMs to drive growth

Healthy balance sheet growth to drive 27% growth in operating

profit

Asset quality to remain stable

NIMs to see improvement led by lower cost of funds


PAT 2,618 2,492 5.1% 2,196 19.3%

NIM (%) 9.3 9.2 0.04 8.4 0.83

EPS (Rs) 16.7 15.9 5.1% 14.0 19.2%

Mah & Mah Finance

Net Interest income 13,560 10,711 26.6% 11,117 22.0% 20% growth in disbursements and improvement in NIMs to drive

growth in NII

With lower increase in opex , operating profit growth to be higher at

27%

Higher collection efficiency to drive improvement in asset quality

and credit cost

Lower interest reversal and cost of funds to drive NIMs higher


PAT 4,676 3,420 36.7% 2,341 99.8%

NIM (%) 10.2 8.4 1.77 9.6 0.58

EPS (Rs) 7.6 4.9 56.2% 4.1 83.7%

Shriram City Union Fin

Net Interest income 9,183 9,157 0.3% 7,134 28.7% Stable AUM growth, even as NIMs contract marginally

Operating profit growth to be in line with NII growth

Credit cost to rise as company shifts to 90dpd NPA recognition

NIMs may see a contraction of 55bps

Pre-provision Profit 5,416 5,449 -0.6% 4,324 25.3%

PAT 1,451 2,255 -35.6% 120 1106.5%

NIM (%) 13.8 14.4 -0.55 12.5 1.33

EPS (Rs) 22.0 34.2 -35.6% 1.8 1106.2%

Manappuram Finance

Net Interest income 6,338 6,153 3.0% 6,084 4.2% Lower NIMs to keep NII growth moderate

Higher fixed cost and security cost to keep opex higher

Higher gold prices to keep auction losses lower; provisioning in

microfinance to moderate

Rising share of lower-yielding products to drive margin contraction


PAT 1,994 1,733 15.0% 2,055 -3.0%

NIM (%) 16.7 16.8 -0.10 17.8 -1.12

EPS (Rs) 2.4 2.1 15.0% 2.4 -3.0%

Muthoot Finance

Net Interest income 10,474 10,538 -0.6% 11,501 -8.9% Despite higher gold prices, adverse base to impact NII growth

Operating profit to decline by 6% in line with NII fall

Earnings growth to be higher aided by lower credit cost

NIMs to see contraction as share of lower-yielding products rises


PAT 4,769 4,637 2.8% 3,218 48.2%

NIM (%) 14.5 15.1 -0.57 17.0 -2.44

EPS (Rs) 11.9 11.6 2.8% 8.1 48.0%

Magma Finance

Net Interest income 3,682 3,593 2.5% 3,038 21.2% NII growth to inch upwards as balance sheet starts growing again

Operating profit growth to be in line with NII growth

Credit cost to rise as company shifts to 90dpd NPA recognition

NIMs to remain broadly stable qoq


PAT 604 650 -7.2% -1,219 -149.5%

NIM (%) 9.3 9.4 -0.12 7.3 2.03

EPS (Rs) 2.6 2.8 -7.2% -5.2 -149.5%

Source: Company, PhillipCapital India Research Estimates



Capital Goods & Engineering

Capital Goods - 3QFY18 Result preview

(Rs mn) Mar-18E Dec-17 qoq (%) Mar-17 yoy (%) Key expectations / assumptions

Capital goods

Order inflows 9,46,184 7,65,770 23.6% 9,47,792 -0.2% Expect order inflows to be flat due to delay in award of some large orders.

Revenue growth to be driven by robust execution after sedate after 9% yoy

growth in 9MFY18.

Higher raw material prices to offset any volume benefits resulting in marginal

decline in margins.

Higher effective tax rate would led to decline in earnings.

Order book 52,03,188 49,82,095 4.4% 48,99,213 6.2%

Revenues 7,51,588 5,41,845 38.7% 6,78,410 10.8%

EBITDA 93,093 56,281 65.4% 86,165 8.0%

EBITDA Margin (%) 12.4% 10.4% 200bps 12.7% -31bps

PAT 59,857 31,499 90.0% 60,787 -1.5%

ABB India

Order inflows 25,762 29,111 -11.5% 23,420 10.0% Expect healthy yoy growth in order inflows.

Strong yoy growth in revenues led by all the segments.

Marginal improvement in EBITDA margins despite strong execution due to

contraction in gross margins.

Order book 1,13,649 1,15,340 -1.5% 1,20,230 -5.5%

Revenues 27,685 27,794 -0.4% 21,663 27.8%

EBITDA 2,141 2,937 -27.1% 1,609 33.1%

EBITDA Margin (%) 7.7% 10.6% -283bps 7.4% 31bps

PAT 1,243 1,715 -27.5% 900 38.1%

EPS (Rs) 5.9 8.1 -27.5% 4.2 38.1%

Bharat Electronics

Order inflows 35,284 11,460 207.9% 1,00,810 -65.0% Order inflows to be weak due to delay in large orders and high base yoy.

Revenues to decline yoy due to high base.

Expect a sharp contraction in margins due to negative operating leverage and

higher employees costs.

Consequently, BHE to report a decline in recurring PAT.

Order book 4,05,130 4,04,690 0.1% 4,02,420 0.7%

Revenues 35,493 25,128 41.2% 39,877 -11.0%

EBITDA 6,361 4,852 31.1% 11,166 -43.0%

EBITDA Margin (%) 17.9% 19.3% -139bps 28.0% -1008bps

PAT 4,375 3,308 32.2% 8,993 -51.4%

EPS (Rs) 1.8 1.3 32.2% 3.7 -51.4%

BHEL

Order inflows 2,26,425 1,20,760 87.5% 1,66,610 35.9% Strong order inflows driven by award of long pending L1 orders - Patratu

STPP-I (Rs 117bn), Panki STPP (Rs 44bn) and Bhusawal TPP(Rs 28bn).

Revenues growth to be driven by power segment on pick up in execution of

Telangana projects, while Industrial to remain weak.

EBITDA margins to contract 50bps yoy due to lower gross margins

PAT growth to be aided by lower interest costs and higher other income.

Order book 11,39,617 10,22,000 11.5% 10,52,000 8.3%

Revenues 1,08,808 66,264 64.2% 96,882 12.3%

EBITDA 14,331 2,954 385.1% 13,249 8.2%


PAT 9,207 2,108 336.8% 7,480 23.1%

EPS (Rs) 2.5 0.6 336.8% 2.0 23.1%

CG POWER

Order inflows (SA) 14,669 15,160 -3.2% 11,550 27.0% Expect strong growth in standalone order inflows led by domestic Industrial

systems. Consolidated orders will be aided by ~Rs 3.5bn power transformer

orders from Indonesia.

Revenues growth to be driven by industrial systems along with healthy

growth in power systems.

Margins to expand 350bps yoy led by higher gross margins.

Expect to report a strong growth in recurring PAT on a low base.

Order book (SA) 39,281 37,860 3.8% 33,980 15.6%

Revenues 17,943 15,161 18.3% 15,992 12.2%

EBITDA 1,953 1,271 53.7% 1,181 65.3%

EBITDA Margin (%) 10.9% 8.4% 250bps 7.4% 350bps

PAT 786 327 140.7% 376 109.2%

EPS (Rs) 1.3 0.5 140.7% 0.6 109.2%

Cochin Shipyard

Order inflows - - na - na Award of Rs 54bn ASW corvettes orders likely to slip to FY19.

Strong growth in revenues driven by both shipbuilding and ship repair (low

base) segments.

Expect strong expansion in EBITDA margins led by higher gross margins,

negating the impact of 7th PC wage hike.

Order book 93,141 99,570 -6.5% 1,11,830 -16.7%

Revenues 6,429 6,150 4.5% 5,221 23.1%

EBITDA 1,105 1,372 -19.5% 297 271.8%


PAT 868 1,138 -23.7% 418 107.6%

EPS (Rs) 6.4 8.4 -23.7% 3.7 73.0%

Cummins

Revenues 13,580 13,547 0.2% 11,844 14.7% Expect Industrial and Distribution segments to drive growth in the domestic

revenues.

Exports to register a strong yoy growth on a low base.

Margins expansion to be driven by improved gross margins on higher share

of export sales.

EBITDA 2,034 1,967 3.4% 1,700 19.6%


PAT 1,819 1,722 5.6% 1,585 14.8%

EPS (Rs) 6.6 6.2 5.6% 5.7 14.8%

Engineers India

Order inflows 2,500 1,140 119.3% 31,838 -92.1% Order inflows likely to be weak on lack of large orders.

Revenue growth to be driven by strong execution in Turnkey segments.

Margins to decline because of provisions for 7th pay commission and decline

in project completion related provisions write back.

Order book 80,420 83,010 -3.1% 77,619 3.6%

Revenues 5,090 4,034 26.2% 4,429 14.9%

EBITDA 1,109 698 58.9% 1,449 -23.5%




PAT 1,039 664 56.3% 1,249 -16.9%

EPS (Rs) 1.5 1.0 56.3% 1.9 -16.9%

GE T&D

Order inflows 11,709 7,832 49.5% 11,479 2.0% Order inflows growth likely to be muted.

Growth in revenues to be aided by execution of Champa‐Kurukshetra Phase 2

HVDC project.

EBITDA margins to improve on operating leverage benefits.

Order book 69,173 72,000 -3.9% 81,151 -14.8%

Revenues 14,535 14,386 1.0% 11,963 21.5%

EBITDA 1,462 728 100.8% 1,097 33.2%


PAT 970 589 64.8% 461 110.4%

EPS (Rs) 3.8 2.3 64.8% 1.8 110.4%

KEC

Order inflows 69,270 43,540 59.1% 51,830 33.6% Strong growth in orders (announced Rs 69bn of orders) driven by railways

and domestic power T&D.

Revenues to be driven by strong execution in railways and SAE execution

along with healthy growth in power T&D revenues.

EBITDA margins to shrink marginally due to lower gross margins negating the

impact of operating leverage benefits.

Order book 1,76,256 1,40,180 25.7% 1,26,310 39.5%

Revenues 33,194 24,049 38.0% 28,492 16.5%

EBITDA 3,440 2,441 40.9% 3,011 14.2%


PAT 1,656 1,118 48.2% 1,474 12.3%

EPS (Rs) 6.4 4.3 48.2% 5.7 12.3%

L&T

Order inflows 4,89,122 4,81,300 1.6% 4,72,890 3.4% Expect muted growth in order inflows - announced Rs 354bn of orders - T&D

(Rs 64bn), water/irrigation (Rs 61bn) and Saudi Aramco (Rs 60bn estimate).

Revenue to grow at 10% yoy with its core E&C segments reporting a robust

14% growth.

EBITDA margins to expand 50bps yoy mainly supported by financial services.

However, recurring PAT will marginally decline due to higher effective tax

rates and losses from associates (vs profit yoy).

Order book 27,83,929 27,07,270 2.8% 26,13,410 6.5%

Revenues 4,04,340 2,87,475 40.7% 3,66,187 10.4%

EBITDA 49,783 31,440 58.3% 43,351 14.8%


PAT 31,419 15,037 108.9% 32,100 -2.1%

EPS (Rs) 22.4 10.7 108.8% 22.9 -2.3%

Siemens

Order inflows 42,525 32,570 30.6% 47,250 -10.0% Order inflows to decline yoy due to high base (Rs 16.8bn UHVDC order).

Expect a 9% yoy growth in sales driven by energy management (on execution

of HVDC project) and digital factory segments.

EBITDA margins should improve 100bps yoy on higher margins across all

segments except power & gas and process industries.

Order book 1,41,423 1,30,905 8.0% 1,24,009 14.0%

Revenues 32,007 24,295 31.7% 29,288 9.3%

EBITDA 3,367 2,724 23.6% 2,786 20.9%


PAT 2,232 1,905 17.2% 1,791 24.6%

EPS (Rs) 6.3 5.3 17.2% 5.0 24.6%

Thermax

Order inflows 13,161 14,130 -6.9% 11,700 12.5% Expect a 14% yoy revenue growth on a low base driven by pick up in

execution of Dangote order.

Margins to be supported by the cost-control measures and operating

leverage benefits, negating the impact lower gross margins.

Order book 52,872 55,560 -4.8% 39,760 33.0%

Revenues 16,912 11,170 51.4% 14,905 13.5%

EBITDA 2,005 955 110.0% 1,732 15.7%


PAT 1,342 586 129.2% 1,176 14.2%

EPS (Rs) 11.9 5.2 129.2% 10.4 14.2%

VA Tech Wabag

Order inflows 3,500 3,187 9.8% 8,875 -60.6% Order inflows to be weak due to delay in award of large domestic orders;

consequently, it will miss its FY18 order inflows guidance.

Revenue growth to be muted on a high base yoy.

EBITDA margins to decline 85bps yoy due to higher other expenses.

Order book 57,300 65,210 -12.1% 73,284 -21.8%

Revenues 11,469 8,647 32.6% 11,317 1.3%

EBITDA 1,238 757 63.6% 1,317 -6.0%


PAT 671 288 133.3% 795 -15.6%

EPS (Rs) 12.3 5.3 133.3% 14.6 -15.6%

Voltas

MEP Order inflows 12,258 5,580 119.7% 9,540 28.5% Revenue growth to be driven growth across all segments on a low base. AC

(UCP) business to register 17% yoy growth in revenues.

Margins expansion to be supported by operating leverage benefits.

Segmentally, MEP and EPS segments to support margin improvement.

MEP Order book 50,998 48,500 5.2% 43,210 18.0%

Revenues 24,102 13,747 75.3% 20,351 18.4%

EBITDA 2,766 1,186 133.2% 2,219 24.6%


PAT 2,230 995 124.1% 1,989 12.1%

EPS (Rs) 6.7 3.0 124.1% 6.0 12.1%

Source: PhillipCapital India Research



Cement

Earnings estimates


ACC

Revenues 34,271 34,171 0% 30,997 11% Volume growth expected at 7% yoy; 2% qoq

Realisations at 3% yoy; -2% qoq

EBITDA/tonne at Rs 461 (-11% yoy; -4% qoq)

EBITDA 3,256 3,317 -2% 3,424 -5%

EBITDA margin (%) 9.5% 9.7% 11.0%

PAT 1,656 1,715 -3% 2,111 -22%

EPS (Rs) 8.8 9.1 -3% 11.2 -22%

Ambuja Cements

Revenues 29,022 27,126 7% 25,334 15% Volume growth expected at 14% yoy; 15% qoq


EBITDA/tonne at Rs 824 (36% yoy; -11% qoq)

EBITDA 5,308 5,406 -2% 3,651 45%

EBITDA margin (%) 18.3 19.9 14.4

PAT 3,079 3,345 -8% 2,465 25%

EPS (Rs) 1.6 1.7 -8% 1.2 25%

UltraTech Cement

Revenues 86,683 80,192 8.1% 70,198 23.5% Volume growth expected at 22% yoy; 9% qoq


EBITDA/tonne at Rs 804 (-9% yoy; 1% qoq)

EBITDA 14,824 13,376 10.8% 13,361 11.0%

EBITDA margin (%) 17.1 16.7 19.0

PAT 5,598 4,563 22.7% 6,821 -17.9%

EPS (Rs) 20.4 16.6 22.7% 24.8 -17.7%

Shree Cement



EBITDA/tonne at Rs 916 (6% yoy; -8% qoq)

EBITDA 5,854 5,293 10.6% 5,112 14.5%

EBITDA margin (%) 21.5 23.1 21.5

PAT 3,094 2,930 5.6% 3,088 0.2%

EPS (Rs) 89 84 5.6% 89 0.2%

Dalmia Bharat


Realisations at 5% yoy; flat qoq

EBITDA/tonne at Rs 1,096 (-10% yoy; flat qoq)

EBITDA 5,587 5,517 1.3% 4,546 22.9%

EBITDA margin (%) 21.8 25.2 21.7

PAT 1,843 2,089 -11.8% 1,181 56.0%

EPS (Rs) 20.7 23.5 -11.8% 13.3 56.0%

JK Cements




EBITDA 1,663 1,702 -2.3% 1,814 -8.3%

EBITDA margin (%) 13.1 15.1 17.8

PAT 663 731 -9.3% 994 -33.3%

EPS (Rs) 9.5 10.4 -9.3% 14.2 -33.3%

JK Lakshmi



EBITDA/tonne at Rs 462 (48% yoy; 3% qoq)

EBITDA 1,069 943 13.3% 716 49.4%

EBITDA margin (%) 11.7 11.3 8.9

PAT 175 84 109.3% 197 -11.2%

EPS (Rs) 1.5 0.7 109.3% 1.7 -11.2%

India Cements

Revenues 13,388 12,131 10.4% 13,436 -0.4% Volume growth expected at 6% yoy; 13% qoq

Realisations at -6% yoy; -3% qoq


EBITDA 1,586 1,673 -5.2% 1,900 -16.5%

EBITDA margin (%) 11.8 13.8 14.1

PAT 65 152 -57.2% 343 -81.0%

EPS (Rs) 0.2 0.5 -57.2% 1.1 -81.0%

Heidelberg Cement

Revenues 4,786 4,839 -1.1% 4,538 5.5% Volume growth expected at 1% yoy; flat qoq



EBITDA 685 754 -9.2% 701 -2.4%

EBITDA margin (%) 14.3 15.6 15.5

PAT 297 329 -9.7% 195 52.3%

EPS (Rs) 1.3 1.5 -9.7% 0.9 52.3%



(Rs mn) Dec-17E Sep-17 qoq (%) Dec-16 yoy (%) Key expectations

Mangalam Cement



EBITDA/tonne at Rs 252 (-30% yoy; +132% qoq)

EBITDA 194 81 138.2% 248 -21.6%

EBITDA margin (%) 6.5 2.8 9.7

PAT 58 27 112.8% 27 114.0%

EPS (Rs) 2.2 1.0 112.8% 1.0 114.0%




Consumer

Earnings Estimates

(Rs mn) Mar-18E Dec-17 qoq (%) Mar-17 yoy (%) Comments

ITC

Volume growth (est.) (4.0) (7.0) 3.0 Cigarette segment to see volume decline of 4%. FMCG business to report

low-teen revenue growth

Gross margin to see modest growth on lower input cost

EBITDA to see growth on lower other expenses and slight recovery in

cigarettes volumes

Earnings growth to be in line with EBITDA growth

Revenues 117,483 96,726 21.5% 109,995 6.8%

Gross Profit 68,140 60,915 11.9% 63,167 7.9%

Gross margin (%) 58.0 63.0 57.4

EBITDA 42,881 39,045 9.8% 38,754 10.7%

EBITDA margin (%) 36.5 40.4 35.2

PAT 29,390 28,136 4.5% 26,695 10.1%

EPS (Rs) 2 2 4.5% 2 10.1%

Hindustan Unilever

Volume growth (est.) 8 11 4 Volume growth of 8% and price growth of 6%

Gross margins to expand on moderate-to-low inflation in input costs

EBITDA growth will be in line with gross profit growth

Reported PAT to see growth of 11%, in line with EBITDA growth

Revenues 87,377 83,230 5.0% 81,000 7.9%

Gross Profit 45,934.1 44,180.0 4.0% 40,780.0 0.1

Gross margin (%) 53 53 50

EBITDA 18,671.6 16,800.0 0.11 16,510.0 0.1

EBITDA margin (%) 21 20 20

PAT 13,117 11,980 9.5% 11,180 17.3%

EPS (Rs) 6 6 -1.1% 5 10.9%

Dabur India Ltd

Revenues 20,850 19,664 6.0% 19,147 8.9% Domestic and international business to report 11%/8% yoy growth

Gross margin to expand on low-cost inventory, despite some inflation in

input cost

EBITDA growth will be in line with GP growth


Gross Profit 10,425 10,141 2.8% 9,385 11.1%

Gross margin (%) 50.0 51.6 49.0

EBITDA 4,601 4,035 14.0% 4,176 10.2%

EBITDA margin (%) 22.1 20.5 21.8

PAT 3,711 3,329 11.5% 3,337 11.2%

EPS (Rs) 2 2 11.6% 2 11.5%

Godrej Cons. Products

Revenues 26,339 26,037 1.2% 23,805 10.6% Domestic and international business is expected to report 13%/3.5% yoy

growth. Soaps continues its strong momentum

Gross profit to expand on lower input cost

EBITDA to grow on higher gross profit and operating cost efficiency


Gross Profit 15,013 14,774 1.6% 13,468 11.5%

Gross margin (%) 57.0 56.7 56.6

EBITDA 6,364 5,987 6.3% 5,458 16.6%

EBITDA margin (%) 24.2 23.0 22.9

PAT 4,512 4,296 5.0% 3,876 16.4%

EPS (Rs) 7 6 5.0% 6 16.4%

Marico Industries

Volume growth (est.) 4.0 9.4 10.0 Domestic and international business to see 16%/5% revenue growth,

Parachute/Saffola/VAHO to see volume growth of 2%/0%/10% yoy

growth

Gross margin to remain under pressure spike in copra price (50% yoy)

EBITDA growth to remain flat yoy

Earnings growth to be higher than EBITDA growth on lower tax

Revenues 15,042 16,243 -7.4% 13,146 14.4%

Gross Profit 6,994 7,556 -7.4% 6,856 2.0%

Gross margin (%) 46.5 46.5 52.2

EBITDA 2,708 3,021 -10.4% 2,595 4.4%

EBITDA margin (%) 18.0 18.6 19.7

PAT 1,936 2,233 -13.3% 1,709 13.3%

EPS (Rs) 1.5 1.7 -13.3% 1.3 13.3%

Jubilant Foodworks

SSSG 20.0% 17.8% -7.5% We expect Jubilant to report strong SSG growth because of strong

traction from EDV offers

Gross profit to expand on higher revenue growth

Aggressive cost cutting will drive EBITDA growth

Revenues 7,635 7,952 -4.0% 6,128 24.6%

Gross Profit 5,705 5,926 -3.7% 4,710 21.1%

Gross margin (%) 74.7 74.5 76.9

EBITDA 1,250 1,369 -8.7% 605 106.5%

EBITDA margin (%) 16.4 17.2 9.9

PAT 555 660 -16.0% 189 193.7%

EPS (Rs) 8 10 -16.0% 3 193.7%




Colgate

Volume growth 13.0 12.0 (3.0) Volume growth to accelerate on account of a pick up in Colgate

Vedshakti and fading of competitive intensity

Gross margins to expand on lower input cost and strong topline growth

Strong EBITDA growth driven by GP expansion and cost cutting initiatives

Earnings growth will be in line with EBITDA growth

Revenues 11,792 10,270 14.8% 10,326 14.2%

Gross Profit 7,606 6,672 14.0% 6,449 17.9%

Gross margin (%) 64.5 65.0 62.5

EBITDA 3,087 2,824 9.3% 2,443 26.4%

EBITDA margin (%) 26.2 27.5 23.7

PAT 1,858 1,707 8.9% 1,426 30.3%

EPS (Rs) 7 6 8.9% 5 30.3%

Nestle

Revenues 28,778 25,896.4 11% 25,757 11.7% We expect revenue to pick up led by Maggi and new product launches

Gross profit to grow on low input costs and product mix

EBITDA margins to expand led by GP expansion and lower opex

Earnings growth to be slower than EBITDA growth due to higher tax rate

Gross Profit 16,979 15,204 11.7% 14,819 14.6%

Gross margin (%) 59.0 58.7 57.5

EBITDA 6,192.8 6,449.1 -4.0% 5,272.0 17.5%

EBITDA margin (%) 21.5 24.9 20.5

PAT 3,394.0 3,611.2 -6% 3,067.6 10.6%

EPS (Rs) 35 37 -6.0% 32 10.6%

Glaxo Smithkline Cons

Revenues 12,484 10,347 21% 11,019 13% We expect GSK to report volume growth of 10% led by consumer offtake

in sachets and improved trade sentiments across regions

Gross margins to expand on benign input cost

EBITDA margins to expand because of GP growth


Gross Profit 8,302 7,123 17% 7,254 14%

Gross margin (%) 66.5 68.8 65.8

EBITDA 2,595 2,040 27% 2,171 20%

EBITDA margin (%) 20.8 19.7 19.7

PAT 2,066 1,637 22% 1,759 14%

EPS (Rs) 49 39 22% 42 14%

Britannia

Volume growth (est.) 11.0 13.0 2.0 We expect low-teen volume growth on distribution expansion, launch of

LUP for creams portfolio

Gross margins to increase on lower input cost

EBITDA margins to expand on cost-cutting initiatives

Earnings growth in line with EBITDA growth

Revenues 25,278.9 25,583.0 -1% 22,300.4 13%

Gross Profit 9,832.8 9,838.2 0% 8,385.0 17%

Gross margin (%) 38.9 38.5 37.6

EBITDA 3,822.0 3,983.8 -4% 3,080.9 24%

EBITDA margin (%) 15.1 15.6 13.8

PAT 2,556.9 2,636.5 -3% 2,109.1 21%

EPS (Rs) 21.3 22.0 -3% 17.6 21%

Emami

Revenues 6,609 7,566 -13% 5,777 14% We expect Emami to report 10% volume growth led by Navratna

Gross margins remain under pressure on high mentha oil prices (+45%)

and other input cost

EBITDA margin to remain under pressure on higher ad-spends and input

cost pressure

Earnings growth will be lower than EBITDA growth on lower other

income

Gross Profit 4,032 5,233 -23% 3,594 12%

Gross margin (%) 61.0 69.2 62.2

EBITDA 1,944 2,647 -27% 1,781 9%

EBITDA margin (%) 29.4 35.0 30.8

PAT 1,367 1,956 -30% 1,332 3%

EPS (Rs) 6 9 -30% 6 3%

Asian Paints

Volume growth (est.) 6.0 6.0 0% 10.0 We expect mid-single-digit volume growth

Gross margin to remain under pressure on inflation in Tio2 and other

crude derivatives

EBITDA margins to expand on lower operating expenses (ad-spends and

other cost savings)

Earnings growth in line with EBITDA growth

Revenues 43,915 42,605 3% 39,084 12%

Gross Profit 18,444 17,995 2% 17,083 8%

Gross margin (%) 42.0 42.2 44

EBITDA 8,124 8,912 -9% 7,078 15%

EBITDA margin (%) 18.5 20.9 18.1

PAT 5,283 5,667 -7% 4,761 11%

EPS (Rs) 6 6 -7% 5 11%

Bajaj Corp

Revenues 2,149 1,973 8.9% 2,045 5.1% Revenue growth to be driven by LHO and Nomarks

Gross margins to see slight pressure on increase in LLP (up 9% yoy), but it

has covered LLP until the end of FY18

EBITDA growth will be in line with gross profit growth


Gross Profit 1,440 1,329 8.3% 1,376 4.7%

Gross margin (%) 67.0 67.4 67.3

EBITDA 692 678 2.0% 662 4.5%

EBITDA margin (%) 32.2 34.4 32.4

PAT 554 552 0.4% 527 5.1%

EPS (Rs) 4 4 0.4% 4 5.1%




Agro Tech Foods

Revenues 2,120 2,144 -1.1% 2,055 3.2% Revenue growth to be driven by higher discounts in foods, but Sundrop

continues to face competition

Gross margins to be under pressure on higher input cost and high

promotional expenses

EBITDA growth to be impacted on higher ad-spends in foods

Gross Profit 692 720 -3.9% 682 1.5%

Gross margin (%) 32.6 33.6 33.2

EBITDA 146 179 -18.5% 157 -7.3%


PAT 66 90 -26.4% 73 -8.9%

EPS (Rs) 3 4 -26.4% 3 -8.9%

Titan

Revenues 40,535 41,366 -2.0% 34,297 18.2% Jewellery business to get a boost: (1) due to increasing formalization and

the wedding segment, and (2) due to the exchange scheme

Watches and eyewear business volume to get a boost due to reduction

in GST rates.

EBITDA margins to expand due to benefits of operating leverage and

favourable base

Gross Profit 10,187 10,052 1.3% 8,596 18.5%

Gross margin (%) 25.1 24.3 25.1

EBITDA 3,912 4,447 -12.0% 2,721 43.8%


PAT 2,811 3,082 -8.8% 2,024 38.9%

EPS (Rs) 3 3 -8.8% 2 38.9%

Parag Milk Foods

Revenues 5,183 5,193 -0.2% 4,283 21.0% Revenue growth to be led by value-added products and expansion into

newer regions

Gross margins to remain under pressure due to price decline in SMP (c.

14% of sales) prices

EBITDA margins to decline on lower gross margins

Earnings growth to remain flat

Gross Profit 1,605 1,596 0.6% 1,390 15.5%

Gross margin (%) 31.0 30.7 32.4

EBITDA 587 588 -0.2% 519 13.1%

EBITDA margin (%) 11.3 11.3 12.1

PAT 304 255 19.4% 300 1.6%




IT Services

Earnings estimates – Large-cap companies


Tata Consultancy

US$ Revenues ($mn) 4,905 4,787 2.5% 4,452 10.2% We expect CC revenue growth of 1.5% and positive cross currency

impact of 100bps

Margins are expected to improve 40bps qoq due to operational

efficiencies and INR depreciation

Commentary on client budgets, Diligenta, impact of US tax code and

outlook of BFSI and retail will be the key to watch out for

Revenues 315,366 309,040 2.0% 296,420 6.4%

EBIT 80,759 77,810 3.8% 76,270 5.9%

EBIT margin (%) 25.6 25.2 40bps 25.7 -10bps

PAT 68,296 65,310 4.6% 66,080 3.4%

EPS (Rs) 35.8 34.2 4.6% 33.5 6.6%

Infosys

US$ Revenues ($mn) 2,806 2,755 1.8% 2,569 9.2% We expect CC revenue growth of 0.9% and positive cross currency

impact of 90bps

Margins are expected to remain flat qoq

We expect moderate revenue growth guidance for FY19, with a

brighter outlook for dealflow

Commentary after the appointment of new CEO will be the key thing to

watch out for

Revenues 180,420 177,940 1.4% 171,200 5.4%

EBIT 43,874 43,190 1.6% 42,120 4.2%


PAT 36,777 36,970 -0.5% 36,030 2.1%

EPS (Rs) 16.9 17.0 -0.5% 15.8 7.3%

Wipro

$ Revenue – IT ($mn) 2,063 2,013 2.5% 1,955 5.5% We expect IT services CC revenue growth 1.5% (near mid-point of

guidance of 0-2%) and positive cross currency impact of 100bps

Margins are expected to expand 270bps qoq due to absence of one-off

client insolvency issue in the last quarter (-240bps impact in Q3)

We expect 1QFY19 guidance to be moderate

Commentary on BFSI, Healthcare and Retail to watch out for

Revenues 137,935 136,690 0.9% 139,875 -1.4%

EBIT 23,642 19,775 19.6% 24,828 -4.8%


PAT 21,187 19,361 9.4% 22,611 -6.3%

EPS (Rs) 4.7 4.3 9.3% 4.7 0.5%

HCL Technologies

US$ Revenues ($mn) 2,046 1,988 2.9% 1,817 12.6% We expect organic CC growth of 2% and positive cross currency impact

of 100bps.

We expect margin to remain stable despite INR depreciation

Outlook, esp on IMS and ERD businesses, to be keenly watched – also

any details on IBM deals

Revenues 131,529 128,080 2.7% 120,530 9.1%

EBIT 25,915 25,090 3.3% 24,160 7.3%


PAT 21,655 21,940 -1.3% 23,280 -7.0%

EPS (Rs) 15.6 15.7 -1.2% 16.5 -5.5%

Tech Mahindra

US$ Revenues ($mn) 1,236 1,209 2.2% 1,131 9.3% We expect CC revenue growth of 1% and positive cross currency

impact of 120bps

We expect Enterprise segment to report 1.5% revenue growth while

Telecom to report marginal growth

Margins are expected to expand 50bps qoq mainly driven by

operational efficiencies

Commentary on LCC and communication business to be watched

Revenues 79,465 77,760 2.2% 74,950 6.0%

EBIT 10,523 9,904 6.2% 6,152 71.1%

EBIT margin (%) 13.2 12.7 50bps 8.2 500bps

PAT 8,968 9,244 -3.0% 5,897 52.1%

EPS (Rs) 10.3 10.7 -4.4% 6.7 53.1%




Earnings estimates – Mid-cap companies


L&T Infotech

US$ Revenues ($mn) 304 294 3.5% 254 19.6% We expect organic CC revenue growth of 1.2% and positive cross

currency impact of 70bps

Syncordis full quarter consolidation will provide incremental $5mn

revenue (+1.6%)

Margins are expected to contract 320bps due US$ 10mn settlement

with one of its clients

Adjusted margins to remain flat qoq

Revenues 19,535 18,838 3.7% 16,772 16.5%

EBIT 2,289 2,813 -18.6% 2,773 -17.5%

EBIT margin (%) 11.7 14.9 -320bps 16.5 -480bps

PAT 2,384 2,828 -15.7% 2,545 -6.3%

EPS (Rs) 14.0 16.5 -15.2% 14.9 -6.3%

L&T Tech

US$ Revenues ($mn) 156 151 3.0% 121 28.5% We expect USD revenue growth of 3%

Margins are expected to expand 90bps due to lower sub-

contracting cost and INR depreciation

Outlook for the Transport and Industrial vertical to be keenly sought

– along with the deal pipeline

Management commentary on the future margin trajectory and

monetization of IP platforms will be important

Revenues 10,001 9,691 3.2% 8,123 23.1%

EBIT 1,477 1,340 10.2% 1,191 24.0%


PAT 1,293 1,263 2.4% 960 34.7%

EPS (Rs) 12.7 12.4 2.3% 9.5 34.0%

MindTree

US$ Revenues ($mn) 223 214 4.0% 196 13.9% We expect CC revenue growth of 3.2%, driven by ramp-up from deal

pipeline, and positive cross currency impact of 80bps

Margins to expand 20bps qoq , due to INR depreciation

Commentary on digital growth and TCV to be keenly watched.

Revenues 14,326 13,777 4.0% 13,181 8.7%

EBIT 1,747 1,655 5.6% 1,173 48.9%


PAT 1,383 1,415 -2.2% 972 42.3%

EPS (Rs) 8.4 8.6 -2.2% 5.8 45.9%

Cyient

US$ Revenues ($mn) 164 152 7.6% 141 16.0% We expect strong CC revenue growth of 6.9 and positive cross currency

impact of 70bps

Growth to be driven by DLM, which witnessed a deal push out from Q3

to Q4

Margins are expected to decline 60bps due to increase in share of

lower margin DLM business

Guidance for FY19, outlook on DLM and new deal wins to look out for

Revenues 10,516 9,834 6.9% 9,410 11.8%

EBIT 1,179 1,157 1.9% 994 18.6%

EBIT margin (%) 11.2 11.8 -60bps 10.6 60bps

PAT 1,044 876 19.1% 786 32.7%

EPS (Rs) 9.3 7.8 19.1% 7.0 32.7%

Persistent Systems

US$ Revenues ($mn) 117 123 -4.7% 109 7.1% We expect USD revenue decline of -4.7%

The decline is largely from the IP segment where it expects a qoq

decline of US$ 8mn due to seasonality

Margins are expected to decline 420bps due to decline in higher

margin IP revenues

Revenue growth outlook from IBM-Watson deal to watch-out for

Revenues 7,508 7,919 -5.2% 7,271 3.3%

EBIT 618 983 -37.1% 908 -32.0%

EBIT margin (%) 8.2 12.4 -420bps 12.5 -430bps

PAT 611 917 -33.4% 728 -16.2%

EPS (Rs) 7.6 11.5 -33.4% 9.1 -16.2%

NIIT Tech

US$ Revenues ($mn) 119 117 2.4% 111 8.1% We expect USD revenue growth of 2.4%, despite revenue loss of US$

1.5mn from Morris deal

Margins to expand 70bps due to operational efficiencies

Commentary on new order intake and strategy after new CEO to be

keenly watched.

Revenues 7,679 7,565 1.5% 7,447 3.1%

EBIT 1,057 985 7.3% 1,212 -12.8%


PAT 833 757 10.1% 1,003 -16.9%

EPS (Rs) 13.6 12.4 10.1% 16.4 -16.9%

Intellect Design

US$ Revenues ($mn) 43 42 2.0% 37 14.1% We expect USD revenue growth of 2%, driven by higher license sale

Margins are expected to expand 40bps due to better revenue

performance

Outlook on new deal wins and DSO improvement to look out for

Revenues 2,743 2,707 1.3% 2,504 9.6%

EBIT 174 161 8.4% 156 11.5%


PAT 124 122 2.3% 145 -13.9%

EPS (Rs) 1.0 1.0 2.3% 1.4 -30.6%

Majesco

US$ Revenues ($mn) 33 32 3.3% 28 16.4% We expect USD revenue growth of 5.5%, driven by organic growth and

IBM IP deal

Margins are expected to contract 130bps qoq

Outlook on cloud segment traction to look out for

Management commentary on IBM IP deal and new deal wins to look

out for

Revenues 2,111 2,073 1.8% 1,909 10.6%

EBIT 24 51 -52.5% 6 307.2%

EBIT margin (%) 1.2 2.5 -130bps 0.3 80bps

PAT 37 -90 NA -6 NA

EPS (Rs) 1.3 -3.8 NA -0.3 NA




Infrastructure

Earnings estimates


NCC

Revenues 30,309 21,394 41.7% 18,507 63.8% We expect strong growth in topline, with execution ramp-up in shorter

duration projects; FY19 revenue growth guidance - expected at around

30% - will be keenly watched; Margins to remain stable; Strong yoy

earnings growth, due to topline growth and reduction in debt and

interest expense

We expect strong growth in topline, with execution ramp-up in shorter

duration projects

FY19 revenue growth guidance - expected at around 30% - will be keenly watched

Margins to remain stable

Strong yoy earnings growth, due to topline growth and reduction in debt

and interest expense

EBITDA 2,693 1,742 54.6% 2,551 5.6%

EBITDA margin (%) 8.9% 8.1% 74 13.8% -490

PAT 1,171 637 83.8% 1,004 16.7%

EPS (Rs) 2.11 1.15 83.8% 1.81 16.7%

KNR Construction

Revenues 5,420 4,821 12.4% 4,332 25.1% Weak orderbook, at the beginning of the quarter, will lead to muted yoy

growth in topline; Margins to remain stable in 13-15% range - Q3FY18

margins were exceptionally high, due to closure of few projects; Yoy

decline in earnings due to negative tax rate in Q4FY17;

Weak orderbook, at the beginning of the quarter, will lead to muted yoy

growth in topline

Margins to remain stable in 13-15% range - Q3FY18 margins were

exceptionally high, due to closure of few projects

Yoy decline in earnings due to negative tax rate in Q4FY17

EBITDA 860 722 19.0% 984 -12.6%

EBITDA margin (%) 15.9% 15.0% 88 22.7% -685

PAT 459 524 -12.5% 657 -30.2%

EPS (Rs) 3.26 3.73 -12.5% 4.67 -30.2%

PNC Infratech

Revenues 7,603 3,506 116.9% 4,725 60.9% Strong topline growth, with commencement of execution of 7 of the

new/stuck projects; Margins to remain stable.; Earnings to report qoq

decline, due to negative tax (MAT credit) in last quarter;

Strong topline growth, with commencement of execution of 7 of the

new/stuck projects

Margins to remain stable.

Earnings to report qoq decline, due to negative tax (MAT credit) in last quarter

EBITDA 1,022 474 115.5% 663 54.2%

EBITDA margin (%) 13.4% 13.5% -9 14.0% -58

PAT 661 337 95.9% 931 -29.0%

EPS (Rs) 2.58 1.32 95.9% 3.63 -29.0%

ITD Cementation

Revenues 5,409 5,234 3.3% 5,749 -5.9% We expect muted results, yet again (after a six consecutive quarters of

disappointment); Margins expected to stabilize now, with the impact of

legacy low-margin orders moving out of the orderbook complete; Strong

earnings growth due to decent topline growth and JVs turning

profitable;

We expect muted results, yet again (after a six consecutive quarters of

disappointment)

Margins expected to stabilize now, with the impact of legacy low-margin

orders moving out of the orderbook complete

Strong earnings growth due to decent topline growth and JVs turning

profitable

EBITDA 654 761 -14.0% 786 -16.7%

EBITDA margin (%) 12.1% 14.5% -244 13.7% -157

PAT 262 153 71.8% 177 48.5%

EPS (Rs) 1.69 0.98 71.8% 1.14 48.5%

J Kumar Infra

Revenues 5,478 3,555 54.1% 4,572 19.8% Strong topline growth, after a string of disappointing quarters; Margins to

remain stable; Strong earnings growth, driven by strong topline growth;

Strong topline growth, after a string of disappointing quarters


Strong earnings growth, driven by strong topline growth

EBITDA 917 602 52.3% 776 18.1%

EBITDA margin (%) 16.7% 16.9% -20 17.0% -25

PAT 399 263 51.9% 329 21.2%

EPS (Rs) 5.28 3.47 51.9% 4.35 21.2%

Ahluwalia Contracts

Revenues 4,407 4,718 -6.6% 3,611 22.1% Muted topline - due to weak orderbook at the beginning of the quarter,

and impact of GST; Margins to continue expanding from 4QFY17 levels -

to settle in the range of 13-14%; Strong earnings yoy (and qoq) earnings

growth - as Q4FY17 earnings were impacted by low margins;

Muted topline - due to weak orderbook at the beginning of the quarter,

and impact of GST

Margins to continue expanding from 4QFY17 levels - to settle in the

range of 13-14%

Strong earnings yoy (and qoq) earnings growth - as Q4FY17 earnings

were impacted by low margins

EBITDA 605 431 40.5% 625 -3.1%

EBITDA margin (%) 13.7% 9.1% 460 17.3% -357

PAT 384 204 88.2% 292 31.6%

EPS (Rs) 5.73 3.04 88.2% 4.35 31.6%




HCC

Revenues 13,993 13,583 3.0% 12,309 13.7% Reported topline to remain flat, assuming ~Rs2bn of claims received in

the quarter; Core business to report muted topline growth, due to

execution challenges; Core margins to remain stable, reported margins

to decline due to lower amount of claims booked; Interest expense to

fall sharply yoy, on conversion of debt into equity, and lower 'notional'

interest on OCDs

Reported topline to remain flat, assuming ~Rs2bn of claims received in

the quarter

Core business to report muted topline growth, due to execution

challenges

Core margins to remain stable, reported margins to decline due to lower

amount of claims booked

Interest expense to fall sharply yoy, on conversion of debt into equity,

and lower 'notional' interest on OCDs

EBITDA 1,968 2,241 -12.2% 1,640 20.0%

EBITDA margin (%) 14.1% 16.5% -244 13.3% 74

PAT 578 209 176.6% 313 84.7%

EPS (Rs) 0.57 0.21 175.3% 0.31 84.7%

Adani Ports & SEZ

Revenues 26,929 22,315 20.7% 26,889 0.2% Strong 18% yoy growth in cargo volumes, driven by growth in container

and ramp-up at Dhamra and Katupalli; Decent topline yoy growth -

driven by growth in logistics business and SEZ income; Port margins are

expected to remain stable - reported margins to decline slightly qoq;

Updates on the FY19 cargo and revenue guidance, will be keenly sought

Strong 18% yoy growth in cargo volumes, driven by growth in container

and ramp-up at Dhamra and Katupalli

Decent topline yoy growth - driven by growth in logistics business and

SEZ income

Port margins are expected to remain stable - reported margins to

decline slightly qoq

Updates on the FY19 cargo and revenue guidance, will be keenly sought

EBITDA 17,355 13,335 30.1% 17,842 -2.7%

EBITDA margin (%) 64.4% 59.8% 469 66.4% -191

PAT 11,098 11,641 -4.7% 9,941 11.6%

EPS (Rs) 5.36 5.62 -4.7% 4.80 11.6%

IRB Infrastructure

Revenues 13,424 16,561 -18.9% 13,417 0.1% Toll collection is expected to report a yoy decline, due to 6 projects

being transferred to InvIT; EPC revenues also to report yoy decline - due

to weak orderbook; Margins to fall yoy and qoq, due to lower share of

BOT revenues; Muted earnings growth driven by reduction in interest

and depreciation - due to transfer of projects to InvIT

Toll collection is expected to report a yoy decline, due to 6 projects

being transferred to InvIT

EPC revenues also to report yoy decline - due to weak orderbook

Margins to fall yoy and qoq, due to lower share of BOT revenues

Muted earnings growth driven by reduction in interest and depreciation

- due to transfer of projects to InvIT

EBITDA 5,926 8,227 -28.0% 6,303 -6.0%

EBITDA margin (%) 44.1% 49.7% -553 47.0% -283

PAT 2,052 2,071 -0.9% 2,073 -1.0%

EPS (Rs) 5.84 5.89 -0.9% 5.90 -1.0%

Ashoka Buildcon

Revenues 7,691 6,048 27.2% 6,589 16.7% Strong topline growth - with execution picking up post GST; Margins to

remain stable; Reported earnings to decline yoy, due to exceptional

other income in 4QFY17;

Strong topline growth - with execution picking up post GST


Reported earnings to decline yoy, due to exceptional other income in

4QFY17

EBITDA 885 636 39.2% 796 11.3%

EBITDA margin (%) 11.5% 10.5% 99 12.1% -56

PAT 583 654 -10.9% 520 12.1%

EPS (Rs) 3.11 3.49 -10.9% 2.78 12.1%

Sadbhav Engineering

Revenues 11,463 10,329 11.0% 9,351 22.6% Decent topline growth driven by execution on new HAM projects;

Margins to remain stable; Earnings growth lower than topline/EBITDA

due to higher interest and depreciation;

Decent topline growth driven by execution on new HAM projects


Earnings growth lower than topline/EBITDA due to higher interest and

depreciation

EBITDA 1,254 1,096 14.4% 1,056 18.7%

EBITDA margin (%) 10.9% 10.6% 33 11.3% -36

PAT 735 682 7.8% 618 18.9%

EPS (Rs) 4.29 3.98 7.8% 3.60 18.9%




Media

Earnings estimates


Zee Entertainment

Revenues 16,677 18,381 -9.3% 15,280 9.1% We expect domestic LTL ad growth of 25% yoy due to a favourable base,

improvement in viewership ratings, and FMCG companies reinvesting

their GST savings

Expect mid-teen LTL subscription growth as contracts with DPOs are

finalised in this quarter

Ebitda margin to decline more than 400bps yoy due to higher

investment in digital platform (Zee 5), renewals of movie rights. and

higher programming hours in the regional genre

EBITDA 4,419 5,944 -25.7% 4,687 -5.7%

EBITDA margin (%) 26.5 32.3 30.7

PAT 2,887 2,804 3.0% 2,451 17.8%

EPS (Rs) 3.0 2.9 3.0% 2.6 17.8%

Dish TV

Revenues 16,240 7,408 119.2% 7,086 129.2% YoY/qoq nos are not comparable due to the merger of Dish TV +

Videocon

Qoq margins to improve on subscriber addition, ARPU improvement,

and GST-related savings

EBITDA 4,547 2,005 126.8% 1,905 138.6%

EBITDA margin (%) 28.0 27.1 26.9

PAT (200) (329) NA (284) -29.5%

EPS (Rs) NA NA NA NA




Metals

Earnings estimates


JSW Steel – Consolidated

Revenues 194,984 176,690 10.4% 162,873 19.7% Higher realisations to drive revenues

EBIDTA mainly driven by higher realisations partly offset by

higher costs

Expect OP/tonne of Rs 10,472, up 16% qoq

EBITDA 46,671 38,510 21.2% 31,649 47.5%

EBITDA margin (%) 23.9 21.8 19.4

PAT 19,695 17,740 11.0% 10,086 95.3%

EPS (Rs) 8.1 7 11.0% 4 95.3%

Tata Steel – Consolidated

Revenues 332,377 331,000 0.4% 334,241 -0.6% Lower Indian volumes offset by higher realisations leads to flat

revenues

India OP/tonne estimated at Rs 15,088, up 8% qoq driven by

higher realisations

Europe OP/tonne at US$ 85 are up 111% qoq driven by

improving spreads and maintenance shutdown impact in Q3

EBITDA 61,012 56,969 7.1% 70,252 -13.2%

EBITDA margin (%) 18.4 17.2 21.0

PAT 25,146 24,100 4.3% 33,434 -24.8%

EPS (Rs) 26 25 4.2% 34 -24.8%

SAIL

Revenues 167,780 153,237 9.5% 126,905 32.2% Higher volumes and realisations will drive revenue growth

Expect OP/tonne of Rs 4,396, up 15% qoq

Rs 5bn one-off gratuity cost will impact OP. Excluding this,

OP/tonne stands at Rs 5726

EBITDA 16,522 14,402 14.7% (2,644) NA

EBITDA margin (%) 9.8 9.4 (2.1)

PAT 2,175 432 403.9% (7,713) NA

EPS (Rs) 1 0 403.9% (2) NA

Hindalco Inds

Revenues 117,446 110,228 6.5% 110,261 6.5% Higher LME to drive revenues both qoq as well as yoy

Higher cost, majorly alumina, will impact standalone

profitability. However, this will benefit Utkal Alumina.

Utkal Alumina OP to jump 91% qoq to Rs 4.7bn driven by higher

alumina prices

EBITDA 12,276 13,117 -6.4% 13,472 -8.9%

EBITDA margin (%) 10.5 11.9 12.2

PAT 4,397 3,755 17.1% 5,028 -12.6%

EPS (Rs) 2 2 -10.4% 2 -12.6%

NALCO

Revenues 28,013 23,888 17.3% 24,233 15.6% Higher volumes and LME to drive revenues

Profitability improves largely driven by higher realisations.

Realisation jump offsets major raw material and power cost

headwinds

EBITDA 5,931 3,437 72.6% 4,275 38.8%

EBITDA margin (%) 21.2 14.4 17.6

PAT 3,752 (797) -570.9% 2,714 38.2%

EPS (Rs) 2 (0) -570.9% 1 38.2%

Hindustan Zinc

Revenues 60,230 59,220 1.7% 62,602 -3.8% Lower priced hedges leads to flat revenues

Lower pricing benefit due to hedges leads to yoy decline in

profits

EBITDA 34,461 32,440 6.2% 37,480 -8.1%

EBITDA margin (%) 57.2 54.8 59.9

PAT 24,597 22,300 10.3% 30,570 -19.5%

EPS (Rs) 6 5 10.3% 7 -19.5%

Vedanta

Revenues 248,152 243,610 1.9% 225,113 10.2% Revenues higher largely driven by oil and aluminium segments

Flat profitability from zinc leads to subdued OP growth EBITDA 70,995 67,630 5.0% 73,501 -3.4%

EBITDA margin (%) 28.6 27.8 32.7

PAT 24,730 22,110 11.8% 15,249 62.2%

EPS (Rs) 8 7 20.5% 5 75.3%




Midcaps

Earnings estimates


Concor

Revenues 15,000 14,302 4.9% 13,304 12.7% Expect volume growth of 13% yoy; exim growth of 14%

Yoy recovery in margin with cost reduction

Assumed effective tax rate at 27% in 4QFY18

EBITDA 3,190 2,821 13.1% 2,612 22.1%

EBITDA margin (%) 21.3 19.7 19.6

PAT 2,242 2,229 0.6% 1,861 20.5%

EPS (Rs) 9.2 9.1 0.6% 9.5 -3.6%

Praj Inds.

Revenues 2,200 2,079 5.8% 2,201 0.0% Orderbook of Rs 7.5bn, lower execution

EBITDA 155 67 130.3% 170 -8.8%


PAT 80 17 373.4% 106 -24.4%

EPS (Rs) 0.4 0.1 373.4% 0.6 -24.4%

Pennar Inds.

Revenues 4,581 4,149 10.4% 4,649 -1.5% Growth in railways, tubes

Margins impact due to PEBS, raw material inflation

Assumed tax provision of 30%

EBITDA 477 435 9.5% 494 -3.5%

EBITDA margin (%) 10.4 10.5 10.6

PAT 138 133 4.2% 180 -23.4%

EPS (Rs) 1.2 1.1 4.2% 1.5 -23.4%

Allcargo

Revenues 15,190 15,472 -1.8% 14,114 7.6% Recovery in container trade and CFS, weakness P&E

Impact of DPD on CFS and decline in P&E profitability on yoy

EBITDA 1,040 1,047 -0.7% 1,040 0.0%


PAT 582 638 -8.7% 492 18.4%

EPS (Rs) 2.4 2.6 -8.7% 2.0 21.5%

Sintex Plastic

Revenues 15,000 14,329 4.7% Due to demerger, 4QFY17 numbers are not available.

EBITDA 2,480 1,928 28.7%

EBITDA margin (%) 16.5 13.5

PAT 861 710 21.4%

EPS (Rs) 1.4 1.2 16.3%

KDDL

Revenues 1,320 1,007 31.0% 1,262 4.6% Qoq decline in retail post increase in custom duty

Operating leverage and improvement in mgf EBITDA 101 70 43.7% 96 5.0%


PAT 31 15 106.0% 26 18.5%

EPS (Rs) 2.8 1.4 106.0% 2.4 18.5%

Gateway Distriparks

Revenues 860 802 7.2% 831 3.4% Marginal recovery container volume, capacity addition at

Krishnapattnam

DPD, pressure on CFS profitability

EBITDA 183 156 17.2% 193 -5.3%

EBITDA margin (%) 21.3 19.5 23.2

PAT 99 77 29.2% 164 -39.3%

EPS (Rs) 0.9 0.7 29.2% 1.5 -39.3%

Navkar

Revenues 1,152 1,078 6.9% 916 25.8% Recovery in Vapi volume + recovery in JNPT

Operating impact due Vapi volumes EBITDA 459 404 13.6% 355 29.2%

EBITDA margin (%) 39.9 37.5 38.8

PAT 296 248 19.3% 220 34.6%

EPS (Rs) 2.1 1.7 19.3% 1.5 34.6%

Indo Count Industries

Revenues 4,843 4,928 -1.7% 5,029 -3.7% Value up 15% yoy to 15mn mtr

Yoy impact of lower export incentive and pressure on realization EBITDA 728 711 2.4% 1,020 -28.6%

EBITDA margin (%) 15.0 14.4 20.3

PAT 376 359 4.8% 562 -33.1%

EPS (Rs) 1.9 1.8 4.8% 2.8 -33.1%




Havells

Revenues 23,153 19,658 17.8% 17,102 35.4% Major growth to come from consumer appliances, Lloyd (strong season),

and Lighting

Lower margin of Lloyd and higher copper prices resulted in margin

decline

EBITDA 3,010 2,622 14.8% 2,296 31.1%

EBITDA margin (%) 13.0 13.3 13.4

PAT 2,002 1,734 15.5% 1,715 16.8%

EPS (Rs) 3.2 2.8 15.5% 2.7 16.8%

Finolex Cables

Revenues 7,726 6,568 17.6% 7,153 8.0% Price hike in copper cables and strong volume growth in communication

cable.

Pass through of copper prices and margin improvement in

communication cables resulted in strong operating margin

EBITDA 1,180 981 20.3% 1,011 16.7%

EBITDA margin (%) 15.3 14.9 14.1

PAT 875 749 16.9% 755 15.9%

EPS (Rs) 5.7 4.9 16.9% 4.9 15.9%

Bajaj Electricals

Revenues 15,191 11,451 32.7% 12,639 20.2% Expect strong recovery from consumer business as full implementation

of RREP (total touch points of 160k). We expect ~20% growth for both

the business

Complete implementation of RREP and improving execution will result

in margin improvement

Lower debt resulted in lower interest outgo and improved profitability

EBITDA 1,077 703 53.3% 739 45.8%


PAT 621 368 68.6% 384 61.6%

EPS (Rs) 6 4 68.6% 4 61.6%

V-Guard

Revenues 7,123 5,235 36.1% 6,233 14.3% Strong growth from products such as fans, stabilizer (festive), pumps

and appliances.

Strong growth from non-south market

Higher marketing and brand building (launch of V-guard brand pan

India) impacted margins

EBITDA 638 494 29.2% 594 7.6%


PAT 457 358 27.8% 419 9.2%

EPS (Rs) 2 1 27.8% 1 9.2%

KEI

Revenues 8,737 8,887 -1.7% 7,398 18.1% Higher rev. from EHV, EPC, and B2C, with higher copper prices led to

growth

Pass through of higher copper prices and tight control on other over

heads

Lower interest cost resulted in improvement in profitability

EBITDA 841 842 -0.1% 736 14.3%


PAT 372 390 -4.6% 316 17.6%

EPS (Rs) 5 5 -4.6% 4 17.6%

VRL Logistics

Revenues 4,858 4,893 -0.7% 4,429 9.7% Goods transport and bus segment to report a growth of 10% yoy and of

5%

Increasing biodiesel contribution and tight control on other cost result in

150bps improvement in margins

Lower interest outgo to result in profitability growth

EBITDA 534 618 -13.6% 418 28.0%

EBITDA margin (%) 11.0 12.6 9.4

PAT 199 252 -21.0% 84 137.6%

EPS (Rs) 2.2 2.8 -21.0% 0.9 137.6%

Orient paper &

Industries - Paper

Revenues 1,886 1,687 11.8% 1,451 30.0% Strong volume growth in tissue paper and improved realisation in

writing printing paper

Product mix will result in margin improvement

EBITDA 355 288 23.3% 319 11.3%

EBIT margin (%) 18.8 17.0 22.0

PAT 164 105 56.5% N.A. N.A.

Orient Electric

(Electrical Business)

Revenues 6,044 3,463 74.5% 5,408 11.7% Strong growth in fans, consumer durables, and lighting will result in

growth

Improvement in product mix, but higher advertisement cost will restrict

margin improvement to 138bps yoy

EBITDA 679 281 141.5% 533 27.4%

EBIT margin (%) 11.2 8.1 9.9

PAT 376 122 208.7% N.A. N.A.




Oil & Gas

Earnings estimates

(Rs mn) Mar-18E Dec-17 qoq (%) Mar-17 yoy (%)

Indraprastha Gas

Revenues 11619 11839 -1.9% 10019 16.0%

EBITDA 2755 2631 4.7% 2296 20.0%

EBITDA margin (%) 23.7 22.2 148.9 22.9 79.5

PAT 1736 1659 4.6% 1341 29.5%

EPS (Rs) 2.5 2.4 4.6% 1.9 29.5%

Gujarat Gas

Revenues 16464 15713 4.8% 14002 17.6%

EBITDA 2619 1999 31.0% 1463 79.0%

EBITDA margin (%) 15.9 12.7 318.1 10.4 545.5

PAT 1023 600 70.5% 331 208.7%

EPS (Rs) 7.4 4.4 70.5% 2.4 208.7%

Gujarat State Petronet

Revenues 3370 3502 -3.8% 2446 37.8%

EBITDA 2920 3184 -8.3% 2013 45.1%

EBITDA margin (%) 86.6 90.9 -426.5 82.3 435.3

PAT 1727 1816 -4.9% 1270 36.0%

EPS (Rs) 3.1 3.2 -4.7% 2.3 34.6%

Petronet LNG

Revenues 86118 77571 11.0% 63651 35.3%

EBITDA 9042 8474 6.7% 6163 46.7%

EBITDA margin (%) 10.5 10.9 -42.5 9.7 81.6

PAT 5661 5288 7.0% 4708 20.2%

EPS (Rs) 3.8 3.5 7.0% 3.1 20.2%

Reliance Industries

Revenues 859411 732560 17.3% 671460 28.0%

EBITDA 133421 137440 -2.9% 112800 18.3%

EBITDA margin (%) 15.5 18.8 -323.7 16.8 -127.5

PAT 84183 84540 -0.4% 81510 3.3%

EPS (Rs) 13.3 13.3 -0.4% 12.9 3.3%

Castrol India

Revenues 10406 9703 7.2% 8822 18.0%

EBITDA 2931 3066 -4.4% 2633 11.3%


PAT 1948 1967 -1.0% 1790 8.8%

EPS (Rs) 3.9 4.0 -1.0% 3.6 8.8%

Gulf Oil Lubricants

Revenues 3666 3559 3.0% 2989 22.6%

EBITDA 721 619 16.4% 458 57.2%

EBITDA margin (%) 19.7 17.4 226.6 15.3 432.3

PAT 469 404 16.0% 321 46.1%

EPS (Rs) 9.4 8.1 16.0% 6.5 46.1%

Manglore Refinery & Petrochemicals

Revenues 139575 141010 -1.0% 133349 4.7%

EBITDA 9784 17485 -44.0% 15540 -37.0%

EBITDA margin (%) 7.0 12.4 -539.0 11.7 -464.4

PAT 4509 9699 -53.5% 8722 -48.3%

EPS (Rs) 2.6 5.5 -53.5% 5.0 -48.3%

Chennai Petroleum

Revenues 95861 85872 11.6% 68279 40.4%

EBITDA 6252 8336 -25.0% 3166 97.5%

EBITDA margin (%) 6.5 9.7 -318.6 4.6 188.5

PAT 3285 3862 -14.9% 1708 92.3%

EPS (Rs) 22.0 25.9 -15.0% 11.5 92.2%




Pharmaceuticals

Company earnings estimates

(Rs mn) Mar-18E Dec-17 qoq (%) Mar-17 yoy (%) Result update highlights

Aurobindo Pharma

Revenues 42,635 43,361 -1.7% 36,416 17.1% US sales at US$ 270mn (+7% yoy) led by gRenvela and gViread launch.

Estimate overall sales growth of 17% yoy in Q4.

Margins to expand by 130bps yoy on strong US performance and improved

profitability in the EU business.

In line with the strong operating performance.

EBITDA 9,635 10,256 -6.0% 7,762 24.1%

EBITDA margin (%) 22.6% 23.7% 21.3%

PAT 6,112 6,566 -6.9% 5,156 18.5%

EPS (Rs) 10.5 11.3 -6.9% 8.8 18.5%

Biocon Ltd

Revenues 10,720 10,579 1.3% 9,250 15.9% Growth led by a ramp-up in biologic sales. Branded business and research

business to see strong growth.

Margins to remain stable.

PAT to fall due to higher depreciation cost (related to Malaysia plant).

EBITDA 2,305 2,217 4.0% 1,984 16.2%

EBITDA margin (%) 21.5% 21.0% 21.4%

PAT 1,010 849 19.0% 1,413 -28.5%

EPS (Rs) 1.7 1.4 19.0% 2.4 -28.5%

Cadila Healthcare

Revenues 32,824 32,682 0.4% 25,249 30.0% Sales largely driven by strong growth in the US business caused by gLialda

launch and incremental sales from Sentynl.

EBITDA margin to expand led by exclusive opportunity of gLialda.

In line with strong sales and operating performance.

EBITDA 8,140 8,731 -6.8% 4,900 66.1%

EBITDA margin (%) 24.8% 26.7% 19.4%

PAT 4,999 5,465 -8.5% 3,284 52.2%

EPS (Rs) 4.9 5.3 -8.5% 3.2 52.2%

Cipla Ltd

Revenues 38,058 39,138 -2.8% 35,820 6.2% Led by strong US performance on new limited competition launches.

Domestic business to see stable growth.

Margins to see huge expansion due to weak Q4FY17 operating

performance (impacted by higher R&D and adverse product mix).

Adjusted PAT to see strong growth on a low base.

EBITDA 7,155 8,187 -12.6% 5,062 41.3%

EBITDA margin (%) 18.8% 20.9% 14.1%

PAT 3,489 4,694 -25.7% 1,946 79.3%

EPS (Rs) 4.3 5.8 -25.7% 2.4 79.3%

Divis Labs

Revenues 12,362 10,379 19.1% 10,667 15.9% Sales led by recovery in overall business after clearance of Vizag Unit 2.

Margins to see 250bps qoq improvement at 35.6% led by the lower

remediation cost.

EBITDA 4,401 3,421 28.6% 3,910 12.5%

EBITDA margin (%) 35.6% 33.0% 36.7%

PAT 3,128 2,364 32.3% 2,909 7.5%

EPS (Rs) 11.8 8.9 32.3% 11.0 7.5%

Dr Reddy’s Lab

Revenues 36,793 38,060 -3.3% 35,542 3.5% Flat yoy sales due to continued challenges in the US business. Domestic

business to see growth at par with IPM.

US sales at US$ 235mn caused by pricing pressure primarily due to the

incremental sales from gVytorin/gDoxi/gRenvela launch in the US market.

Margin improvement – US launches and better performance in domestic

market.

EBITDA 7,091 7,980 -11.1% 6,339 11.9%

EBITDA margin (%) 19.3% 21.0% 17.8%

PAT 3,541 3,310 7.0% 3,125 13.3%

EPS (Rs) 21.9 20.5 7.0% 19.4 13.3%

Glenmark Pharma

Revenues 23,995 22,037 8.9% 24,572 -2.4% Decline in sales due to 38% fall in US sales against high base of gZetia

sales.

Decline of 200bps due to high base (US).

EBITDA 4,559 3,707 23.0% 5,179 -12.0%

EBITDA margin (%) 19.0% 16.8% 21.1%

PAT 2,431 1,675 45.2% 4,199 -42.1%

EPS (Rs) 8.6 5.9 45.2% 14.9 -42.1%

IPCA Labs

Revenues 7,631 8,592 -11.2% 6,658 14.6% Sales led by better performance in domestic formulations and recovery in

exports.

Margins to improve qoq to 17% as remediation cost falls.

In line with sales and operating performance.

EBITDA 1,297 1,612 -19.5% 461 181.7%

EBITDA margin (%) 17.0% 18.8% 6.9%

PAT 747 956 -21.8% 228 227.8%

EPS (Rs) 5.9 7.6 -21.8% 1.8 227.8%

Lupin Ltd

Revenues 40,022 39,756 0.7% 42,533 -5.9% 6% yoy decline in sales due to competition in its exclusive products

(gGlumetza and gFortamet) sales.

Domestic sales to see 15% growth.

Margin to fall by 700bps to 18.8% on high base of gGlumetza, resulting in

decline in EBITDA.

EBITDA 7,524 6,883 9.3% 11,053 -31.9%

EBITDA margin (%) 18.8% 17.3% 26.0%

PAT 3,433 2,693 27.5% 7,041 -51.2%

EPS (Rs) 7.6 6.0 27.5% 15.6 -51.2%




Sun Pharma Ltd

Revenues 67,938 66,532 2.1% 71,370 -4.8% Fall in sales due to the high base of gGleevec exclusivity and weak

performance from Taro Pharma. Domestic formulation likely to see 10%

yoy growth.

Sharp correction in margins to 21.5% (from 25.9%) due to high base of

gGleevec and weak operating performance from Taro.

EBITDA 14,607 14,534 0.5% 18,490 -21.0%

EBITDA margin (%) 21.5% 21.8% 25.9%

PAT 13,604 8,784 54.9% 15,252 -10.8%

EPS (Rs) 5.7 3.7 54.9% 6.4 -10.8%




Specialty Chemicals

Earnings estimates


Aarti Industries

Revenues 10,186 9,801 3.9% 8,344 22.1% Strong performance in specialty chemicals led by rising contribution from

value-added products and incremental sales from toluene will lead to

22% yoy growth in overall sales. Pharma with ~15% yoy growth to

complement overall growth.

Margins are estimated to sustain at 17.9% due to better product mix

despite adverse RM cost movement, resulting in 19% growth in EBITDA

during the quarter.

In line with strong sales and operating performance, the core PAT to see

24% yoy growth

EBITDA 1,823 1,677 8.7% 1,526 19.5%

EBITDA margin (%) 17.9% 17.1% 18.3%

PAT 923 801 15.4% 743 24.2%

EPS (Rs) 11.4 9.8 15.4% 9.1 24.2%

Atul

Revenues 8,365 8,037 4.1% 7,586 10.3% Sustained performance both in life sciences and chemicals business will

lead to 10% growth in sales

Margin to improve by 300bps yoy at 16.2% on recovery in overall

performance, resulting in strong 34% yoy growth in EBITDA

In line with sales and operating performance, we estimate the core PAT

to see 19% yoy growth

EBITDA 1,355 1,261 7.5% 1,014 33.7%

EBITDA margin (%) 16.2% 15.7% 13.4%

PAT 758 660 14.8% 639 18.6%

EPS (Rs) 25.5 22.2 14.8% 21.5 18.6%

Camlin Life Sciences

Revenues 2,154 2,067 4.2% 1,494 44.2% We estimate robust 44% yoy growth in sales led by improvement in

US/Brazil blend operations, strong show in performance chemicals and

incremental sales from China Vanillin plant

Estimate margin to see smart recovery at 8.9%. However, the unabsorbed

expenses at US/Brazil subsidiary and China plant will keep margin under

pressure

We estimate the Adj. PAT at Rs 8mn, representing continued recovery

from losses over last four quarters.

EBITDA 192 98 95.0% 15 1210.6%

EBITDA margin (%) 8.9% 4.8% 1.0%

PAT 8 (51) L/P (58) L/P

EPS (Rs) 0.1 (0.4) L/P (0.5) L/P

Meghmani Organics

Revenues 4,719 4,504 4.8% 3,870 22.0% Estimate 22% sales growth primarily led by the basic chemicals (+38%)

and agrochemicals (+30%) segment. Pigment segment likely to see 10%

yoy growth

We estimates margin to expand by 630bps to 25.4%, resulting in 63% yoy

growth in EBITDA

We estimate the Adj. PAT to see growth of 89% yoy led by overall strong

performance across all segment

EBITDA 1,199 1,172 2.3% 738 62.5%

EBITDA margin (%) 25.4% 26.0% 19.1%

PAT 448 435 3.1% 237 89.0%

EPS (Rs) 1.8 1.7 3.1% 0.9 89.0%

SRF

Revenues 15,278 13,971 9.4% 14,164 7.9% We estimate 8% yoy growth in sales led by incremental sales from its

BOPET facility for the Packaging business (+18% yoy). Chemicals and TTB

segment to remain muted in Q4

Margins to improve by ~250bps at 17.8% led by the better product mix

and recovery in specialty chemical business

In line with operational performance, the Adj. PAT to see 30% yoy growth

EBITDA 2,720 2,316 17.4% 2,157 26.1%

EBITDA margin (%) 17.8% 16.6% 15.2%

PAT 1,443 1,101 31.0% 1,107 30.3%

EPS (Rs) 25.1 19.2 31.0% 19.3 30.3%

Vinati Organics

Revenues 2,018 1,856 8.7% 2,076 -2.8% Estimate sales decline (-3% yoy) as high base in Q4FY17 led by the heavy

supply of customised products

Expect the margins to remain strong at 28.9%, resulting in flat yoy EBITDA

Due to high base PAT to remain muted

EBITDA 583 498 17.0% 605 -3.7%

EBITDA margin (%) 28.9% 26.8% 29.2%

PAT 387 317 22.0% 406 -4.6%

EPS (Rs) 7.5 6.1 22.0% 7.9 -4.6%




Telecom

Earnings estimates


Bharti Airtel

Revenues 200,071 203,186 -1.5% 219,346 -8.8% Bharti will report muted numbers with possibility of loss for the quarter

ARPU dilution will continue because of downtrading, lower international

roaming revenues

Network opex will increase; bad debts on account of Aircel bankruptcy

EBIDTA margins for mobility business will trend down

Earnings will be marginal or the company could even report loss

EBITDA 69,532 74,688 -6.9% 78,600 -11.5%

EBITDA margin (%) 34.8 36.8 35.8

PAT 756 2,163 -65.0% 3,734 -79.8%

EPS (Rs) 0.2 0.5 -65.0% 0.9 -79.8%

Idea Cellular

Revenues 61,841 65,096 -5.0% 81,261 -23.9% Idea will also see impact of ARPU dilution and significant revenue

decline

ARPU decline because of down trading will see revenue decline by 5%

EBIDTA will see sharp decline on negative impact of operating leverage

Margins will decline sharply on revenue decline

Loss for the quarter will increase

EBITDA 9,404 12,234 -23.1% 21,199 -55.6%

EBITDA margin (%) 15.2 18.8 26.1

PAT (14,711) (12,845) 14.5% (3,277) 348.9%

EPS (Rs) (3.4) (2.9) 14.5% (0.8) 348.9%

Bharti Infratel

Revenues 36,068 36,553 -1.3% 35,204 2.5% Bharti Infratel will see tenancy loss on account of exit of telcos

Rental revenues will decline but energy reimbursements will be higher

on increase in diesel prices

EBIDTA will decline sequentially on lower rental revenues

Margins will also correspondingly decline

Earnings will be lower in line with EBIDTA

EBITDA 15,064 16,131 -6.6% 15,846 -4.9%

EBITDA margin (%) 41.8 44.1 45.0

PAT 5,763 5,854 -1.5% 5,966 -3.4%

EPS (Rs) 3.0 3.1 -1.5% 3.1 -3.4%

Tata Communications

Revenues 40,735 41,146 -1.0% 42,937 -5.1% TCOM will report sluggish revenues

Revenues will be marginally lower sequentially on lower voice revenues

EBIDTA margins will be better yoy on rising contribution of high-margin

business

EBIDTA margins will improve

Lower earnings on higher tax rate

EBITDA 5,489 6,128 -10.4% 5,024 9.3%

EBITDA margin (%) 13.5 14.9 11.7

PAT (144) 194 -174.1% 387 -137.1%

EPS (Rs) (0.5) 0.7 -174.1% 1.4 -137.1%




Rating Methodology We rate stock on absolute return basis. Our target price for the stocks has an investment horizon of one year.

Rating Criteria Definition

BUY >= +15% Target price is equal to or more than 15% of current market price

NEUTRAL -15% > to < +15% Target price is less than +15% but more than -15%

SELL <= -15% Target price is less than or equal to -15%.

Management Vineet Bhatnagar (Managing Director) (91 22) 2483 1919

Kinshuk Bharti Tiwari (Head – Institutional Equity) (91 22) 6246 4101

Jignesh Shah (Head – Equity Derivatives) (91 22) 6667 9735

Research

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Vipul Agrawal (9122) 6246 4127

Sr. Manager – Equities Support

Economics

Mid-Caps

Rosie Ferns (9122) 6667 9971

Anjali Verma (9122) 6246 4115

Deepak Agarwal (9122) 6246 4112

Sales & Distribution

Corporate Communications

Ashvin Patil (9122) 6246 4105

Asia Sales

Zarine Damania (9122) 6667 9976

Kishor Binwal (9122) 6246 4106

Dhawal Shah 8522 277 6747

Bhavin Shah (9122) 6246 4102

Sales Trader

Ashka Mehta Gulati (9122) 6246 4108

Dilesh Doshi (9122) 6667 9747

Execution

Archan Vyas (9122) 6246 4107

Suniil Pandit (9122) 6667 9745

Mayur Shah (9122) 6667 9945

Contact Information (Regional Member Companies)

SINGAPORE: Phillip Securities Pte Ltd

250 North Bridge Road, #06-00 RafflesCityTower,

Singapore 179101

Tel : (65) 6533 6001 Fax: (65) 6535 3834

www.phillip.com.sg

MALAYSIA: Phillip Capital Management Sdn Bhd

B-3-6 Block B Level 3, Megan Avenue II,

No. 12, Jalan Yap Kwan Seng, 50450 Kuala Lumpur

Tel (60) 3 2162 8841 Fax (60) 3 2166 5099

www.poems.com.my

HONG KONG: Phillip Securities (HK) Ltd

11/F United Centre 95 Queensway Hong Kong

Tel (852) 2277 6600 Fax: (852) 2868 5307

www.phillip.com.hk

JAPAN: Phillip Securities Japan, Ltd

4-2 Nihonbashi Kabutocho, Chuo-ku

Tokyo 103-0026

Tel: (81) 3 3666 2101 Fax: (81) 3 3664 0141

www.phillip.co.jp

INDONESIA: PT Phillip Securities Indonesia

ANZTower Level 23B, Jl Jend Sudirman Kav 33A,

Jakarta 10220, Indonesia

Tel (62) 21 5790 0800 Fax: (62) 21 5790 0809

www.phillip.co.id

CHINA: Phillip Financial Advisory (Shanghai) Co. Ltd.

No 550 Yan An East Road, OceanTower Unit 2318

Shanghai 200 001

Tel (86) 21 5169 9200 Fax: (86) 21 6351 2940

www.phillip.com.cn

THAILAND: Phillip Securities (Thailand) Public Co. Ltd.

15th Floor, VorawatBuilding, 849 Silom Road,

Silom, Bangrak, Bangkok 10500 Thailand

Tel (66) 2 2268 0999 Fax: (66) 2 2268 0921

www.phillip.co.th

FRANCE: King & Shaxson Capital Ltd.

3rd Floor, 35 Rue de la Bienfaisance

75008 Paris France

Tel (33) 1 4563 3100 Fax : (33) 1 4563 6017

www.kingandshaxson.com

UNITED KINGDOM: King & Shaxson Ltd.

6th Floor, Candlewick House, 120 Cannon Street

London, EC4N 6AS

Tel (44) 20 7929 5300 Fax: (44) 20 7283 6835

www.kingandshaxson.com

UNITED STATES: Phillip Futures Inc.

141 W Jackson Blvd Ste 3050

The Chicago Board of TradeBuilding

Chicago, IL 60604 USA

Tel (1) 312 356 9000 Fax: (1) 312 356 9005

AUSTRALIA: PhillipCapital Australia

Level 10, 330 Collins Street

Melbourne, VIC 3000, Australia

Tel: (61) 3 8633 9800 Fax: (61) 3 8633 9899

www.phillipcapital.com.au

SRI LANKA: Asha Phillip Securities Limited

Level 4, Millennium House, 46/58 Navam Mawatha,

Colombo 2, Sri Lanka

Tel: (94) 11 2429 100 Fax: (94) 11 2429 199

www.ashaphillip.net/home.htm

INDIA

PhillipCapital (India) Private Limited

No. 1, 18th Floor, Urmi Estate, 95 Ganpatrao Kadam Marg, Lower Parel West, Mumbai 400013 Tel: (9122) 2483 1919 Fax: (9122) 6667 9955 www.phillipcapital.in

http://www.phillip.com.sg/

http://www.poems.com.my/

http://www.phillip.com.hk/

http://www.phillip.co.jp/

http://www.phillip.co.id/

http://www.phillip.com.cn/

http://www.phillip.co.th/

http://www.kingandshaxson.com/

http://www.kingandshaxson.com/

http://www.phillipcapital.com.au/

http://www.ashaphillip.net/home.htm

http://www.phillipcapital.in/



Disclosures and Disclaimers PhillipCapital (India) Pvt. Ltd. has three independent equity research groups: Institutional Equities, Institutional Equity Derivatives, and Private Client Group. This report has been prepared by Institutional Equities Group. The views and opinions expressed in this document may, may not match, or may be contrary at times with the views, estimates, rating, and target price of the other equity research groups of PhillipCapital (India) Pvt. Ltd.

This report is issued by PhillipCapital (India) Pvt. Ltd., which is regulated by the SEBI. PhillipCapital (India) Pvt. Ltd. is a subsidiary of Phillip (Mauritius) Pvt. Ltd. References to "PCIPL" in this report shall mean PhillipCapital (India) Pvt. Ltd unless otherwise stated. This report is prepared and distributed by PCIPL for information purposes only, and neither the information contained herein, nor any opinion expressed should be construed or deemed to be construed as solicitation or as offering advice for the purposes of the purchase or sale of any security, investment, or derivatives. The information and opinions contained in the report were considered by PCIPL to be valid when published. The report also contains information provided to PCIPL by third parties. The source of such information will usually be disclosed in the report. Whilst PCIPL has taken all reasonable steps to ensure that this information is correct, PCIPL does not offer any warranty as to the accuracy or completeness of such information. Any person placing reliance on the report to undertake trading does so entirely at his or her own risk and PCIPL does not accept any liability as a result. Securities and Derivatives markets may be subject to rapid and unexpected price movements and past performance is not necessarily an indication of future performance.

This report does not regard the specific investment objectives, financial situation, and the particular needs of any specific person who may receive this report. Investors must undertake independent analysis with their own legal, tax, and financial advisors and reach their own conclusions regarding the appropriateness of investing in any securities or investment strategies discussed or recommended in this report and should understand that statements regarding future prospects may not be realised. Under no circumstances can it be used or considered as an offer to sell or as a solicitation of any offer to buy or sell the securities mentioned within it. The information contained in the research reports may have been taken from trade and statistical services and other sources, which PCIL believe is reliable. PhillipCapital (India) Pvt. Ltd. or any of its group/associate/affiliate companies do not guarantee that such information is accurate or complete and it should not be relied upon as such. Any opinions expressed reflect judgments at this date and are subject to change without notice.

Important: These disclosures and disclaimers must be read in conjunction with the research report of which it forms part. Receipt and use of the research report is subject to all aspects of these disclosures and disclaimers. Additional information about the issuers and securities discussed in this research report is available on request.

Certifications: The research analyst(s) who prepared this research report hereby certifies that the views expressed in this research report accurately reflect the research analyst’s personal views about all of the subject issuers and/or securities, that the analyst(s) have no known conflict of interest and no part of the research analyst’s compensation was, is, or will be, directly or indirectly, related to the specific views or recommendations contained in this research report.

Additional Disclosures of Interest: Unless specifically mentioned in Point No. 9 below: 1. The Research Analyst(s), PCIL, or its associates or relatives of the Research Analyst does not have any financial interest in the company(ies) covered in

this report. 2. The Research Analyst, PCIL or its associates or relatives of the Research Analyst affiliates collectively do not hold more than 1% of the securities of the

company (ies)covered in this report as of the end of the month immediately preceding the distribution of the research report. 3. The Research Analyst, his/her associate, his/her relative, and PCIL, do not have any other material conflict of interest at the time of publication of this

research report. 4. The Research Analyst, PCIL, and its associates have not received compensation for investment banking or merchant banking or brokerage services or for

any other products or services from the company(ies) covered in this report, in the past twelve months. 5. The Research Analyst, PCIL or its associates have not managed or co-managed in the previous twelve months, a private or public offering of securities for

the company (ies) covered in this report. 6. PCIL or its associates have not received compensation or other benefits from the company(ies) covered in this report or from any third party, in

connection with the research report. 7. The Research Analyst has not served as an Officer, Director, or employee of the company (ies) covered in the Research report. 8. The Research Analyst and PCIL has not been engaged in market making activity for the company(ies) covered in the Research report. 9. Details of PCIL, Research Analyst and its associates pertaining to the companies covered in the Research report:

Sr. no. Particulars Yes/No

1 Whether compensation has been received from the company(ies) covered in the Research report in the past 12 months for investment banking transaction by PCIL

No

2 Whether Research Analyst, PCIL or its associates or relatives of the Research Analyst affiliates collectively hold more than 1% of the company(ies) covered in the Research report

No

3 Whether compensation has been received by PCIL or its associates from the company(ies) covered in the Research report No

4 PCIL or its affiliates have managed or co-managed in the previous twelve months a private or public offering of securities for the company(ies) covered in the Research report

No

5 Research Analyst, his associate, PCIL or its associates have received compensation for investment banking or merchant banking or brokerage services or for any other products or services from the company(ies) covered in the Research report, in the last twelve months

No

Independence: PhillipCapital (India) Pvt. Ltd. has not had an investment banking relationship with, and has not received any compensation for investment banking services from, the subject issuers in the past twelve (12) months, and PhillipCapital (India) Pvt. Ltd does not anticipate receiving or intend to seek compensation for investment banking services from the subject issuers in the next three (3) months. PhillipCapital (India) Pvt. Ltd is not a market maker in the securities mentioned in this research report, although it, or its affiliates/employees, may have positions in, purchase or sell, or be materially interested in any of the securities covered in the report.

Suitability and Risks: This research report is for informational purposes only and is not tailored to the specific investment objectives, financial situation or particular requirements of any individual recipient hereof. Certain securities may give rise to substantial risks and may not be suitable for certain investors. Each investor must make its own determination as to the appropriateness of any securities referred to in this research report based upon the legal, tax and accounting considerations applicable to such investor and its own investment objectives or strategy, its financial situation and its investing experience. The value of any security may be positively or adversely affected by changes in foreign exchange or interest rates, as well as by other financial, economic, or political factors. Past performance is not necessarily indicative of future performance or results.



Sources, Completeness and Accuracy: The material herein is based upon information obtained from sources that PCIPL and the research analyst believe to be reliable, but neither PCIPL nor the research analyst represents or guarantees that the information contained herein is accurate or complete and it should not be relied upon as such. Opinions expressed herein are current opinions as of the date appearing on this material, and are subject to change without notice. Furthermore, PCIPL is under no obligation to update or keep the information current. Without limiting any of the foregoing, in no event shall PCIL, any of its affiliates/employees or any third party involved in, or related to computing or compiling the information have any liability for any damages of any kind including but not limited to any direct or consequential loss or damage, however arising, from the use of this document.

Copyright: The copyright in this research report belongs exclusively to PCIPL. All rights are reserved. Any unauthorised use or disclosure is prohibited. No reprinting or reproduction, in whole or in part, is permitted without the PCIPL’s prior consent, except that a recipient may reprint it for internal circulation only and only if it is reprinted in its entirety.

Caution: Risk of loss in trading/investment can be substantial and even more than the amount / margin given by you. Investment in securities market are subject to market risks, you are requested to read all the related documents carefully before investing. You should carefully consider whether trading/investment is appropriate for you in light of your experience, objectives, financial resources and other relevant circumstances. PhillipCapital and any of its employees, directors, associates, group entities, or affiliates shall not be liable for losses, if any, incurred by you. You are further cautioned that trading/investments in financial markets are subject to market risks and are advised to seek independent third party trading/investment advice outside PhillipCapital/group/associates/affiliates/directors/employees before and during your trading/investment. There is no guarantee/assurance as to returns or profits or capital protection or appreciation. PhillipCapital and any of its employees, directors, associates, and/or employees, directors, associates of PhillipCapital’s group entities or affiliates is not inducing you for trading/investing in the financial market(s). Trading/Investment decision is your sole responsibility. You must also read the Risk Disclosure Document and Do’s and Don’ts before investing.

Kindly note that past performance is not necessarily a guide to future performance.

For Detailed Disclaimer: Please visit our website www.phillipcapital.in

For U.S. persons only: This research report is a product of PhillipCapital (India) Pvt Ltd., which is the employer of the research analyst(s) who has prepared the research report. The research analyst(s) preparing the research report is/are resident outside the United States (U.S.) and are not associated persons of any U.S.-regulated broker-dealer and therefore the analyst(s) is/are not subject to supervision by a U.S. broker-dealer, and is/are not required to satisfy the regulatory licensing requirements of FINRA or required to otherwise comply with U.S. rules or regulations regarding, among other things, communications with a subject company, public appearances, and trading securities held by a research analyst account.

This report is intended for distribution by PhillipCapital (India) Pvt Ltd. only to "Major Institutional Investors" as defined by Rule 15a-6(b)(4) of the U.S. Securities and Exchange Act, 1934 (the Exchange Act) and interpretations thereof by the U.S. Securities and Exchange Commission (SEC) in reliance on Rule 15a 6(a)(2). If the recipient of this report is not a Major Institutional Investor as specified above, then it should not act upon this report and return the same to the sender. Further, this report may not be copied, duplicated, and/or transmitted onward to any U.S. person, which is not a Major Institutional Investor. In reliance on the exemption from registration provided by Rule 15a-6 of the Exchange Act and interpretations thereof by the SEC in order to conduct certain

business with Major Institutional Investors, PhillipCapital (India) Pvt Ltd. has entered into an agreement with a U.S. registered broker-dealer, Decker & Co, LLC. Transactions in securities discussed in this research report should be effected through Decker & Co, LLC or another U.S. registered broker dealer.

If Distribution is to Australian Investors This report is produced by PhillipCapital (India) Pvt Ltd and is being distributed in Australia by Phillip Capital Limited (Australian Financial Services Licence No. 246827).

This report contains general securities advice and does not take into account your personal objectives, situation and needs. Please read the Disclosures and Disclaimers set out above. By receiving or reading this report, you agree to be bound by the terms and limitations set out above. Any failure to comply with

these terms and limitations may constitute a violation of law. This report has been provided to you for personal use only and shall not be reproduced, distributed or published by you in whole or in part, for any purpose. If you have received this report by mistake, please delete or destroy it, and notify the sender immediately.

PhillipCapital (India) Pvt. Ltd. Registered office: No. 1, 18th Floor, Urmi Estate, 95 Ganpatrao Kadam Marg, Lower Parel West, Mumbai 400013

http://www.phillipcapital.in/

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