Q3FY13 Results Preview

Q3FY13 Results Preview: Earnings to slump again as margins face renewed hurdles | Emkay Strategy | 8th January, 2013 | 1

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Dhananjay Sinha

Co – Head, Institutional Research Economist and Strategist

+91 22 6624 2435 [email protected]

Emkay Global Financial Services Ltd.

Q3FY13 Results Preview: Earnings to slump again as margins face renewed hurdles

8th January, 2013


Earnings to slump again as margins face renewed hurdles

n Q2FY13 marked first sign of earnings revival (Emkay universe APAT growth of 13%) as margins expansion counterbalanced the decelerating sales growth. However, hopes of earnings revival could possibly hit a road block as our Q3FY13 earnings estimate highlights renewed margin pressures even as sales growth continues to be in slow lane. Muted earnings performance will likely weigh on the strong market performance over the past two months

n Emkay Universe (ex financials & oil) is expected to deliver sales growth of 10.3%YoY in Q3FY13E vs 15.1%YoY in Q2FY13. Decline in margins is expected to dent APAT growth at 2.1%YoY vs 13.5%YoY in Q2FY13. Excluding Top 5 companies, sales growth in Q3FY13E is expected at 10.6% and APAT growth at -4.2%. Of the 135 companies in Emkay Universe (ex financials & oil) 53 (39% of total) are expected to show sales growth <10% while 22 (16% of total) are expected to grow over 25%

n Strong sales growth is expected from Pharma, Consumers, Real Estate, Power and Auto Ancillary. Stronger Auto Ancillary numbers are attributed to Exide (24%) and Motherson Sumi (67%, because of consol numbers not comparable on account of SMP consolidation). Sectors expected to see deceleration are IT (14.9%), Auto (10.9%), Cement (8.2%) and Metals (-1.4%)

n Emkay Universe (ex financials & oil) is expected to see EBIDTA margin declining to 18.9% vs 19.4% in Q2FY13 and 19.2% in Q3FY12. Hence our universe is likely to deliver EBIDTA growth of 8.7%YoY

n Outside of Financial and Oil sectors, robust PAT expansion is expected from Real Estate (122%YoY), Auto Ancillary (22%), Media & Entertainment (18.5%) and Consumers (18.1%). Stress is likely to be seen for Telecom (-24%), Construction (-20.2%YoY), Pharma (-17%), Autos (-5%), Metals & Mining (-3.3%) and Engineering & Capital goods (-2.4%)

Sales EBIDTA APAT %YoY growth

Q2FY13 Q3FY13E Q2FY13 Q3FY13E Q2FY13 Q3FY13E

Emkay Universe 15.1% 10.3% 16.0% 8.7% 13.5% 2.1%

Emkay Large Cap 15.2% 10.5% 17.1% 8.7% 16.0% 2.6%

Emkay Mid Cap 13.7% 8.8% 8.7% 7.2% -7.9% -5.5%

Emkay Small Cap 20.7% 10.9% 19.0% 20.6% 7.2% 24.6% Source: Company, Emkay Research


Key sectors-Expectations

n Consumer Goods: Expect healthy performance with revenue and APAT growth of 15%YoY 18%YoY respectively. The

lopsided revenue growth arising from price led boost in earlier quarters is likely to be balanced out with 8% volume and 7% price-led growth. Volume growth expectations- Asian Paints (+7%), Berger (+7%), HUL (+7%), Colgate (+9%), Nestle (+3%),

GSK Consumer (+4%), Marico (+9%) and Jubilant FoodWorks (SSG 20%). Titan is expected to report 5% growth in Jewellery against volume decline in previous quarters. EBIDTA margins are likely to be supported by decline in prices of select inputs

(Palm Oil, Brent Crude and Titanium Dioxide). Robust earnings expected for GSK Consumer (27%YoY), Godrej Consumer (28%YoY), Jubilant FoodWorks (32%YoY), Marico (37%YoY) and Page Industries (36%YoY). Hindustan Unilever & Nestle

expected to see restricted earnings growth at 12%YoY and 10%YoY respectively. Preferred- Berger, Colgate, GSK Consumer, Marico and Titan; Avoids- Asian Paints, Hindustan Unilever, GCPL, Jubilant FoodWorks and Page Industries

n IT Services: Expect 2.6-4.2%QoQ US$ revenue growth for Tier I companies with Wipro at lower end and Infosys at the upper end. Mid-tier companies expected to see 1-10%QoQ US$ revenue growth with TechM at the higher end. We expect margins

to decline sequentially. A reset in INR assumption to Rs 55/$ (vs Rs 53/$ earlier) will lead a reset in FY13 EPS outlook to ~Rs 159.5 vs ~Rs 160.5 earlier. Preferred- HCL Tech, MindTree, TechM/Mah Satyam

n Automobile: We expect the automobile OEM universe to report modest results in Q3 owing a late festive season even as overall volume growth trajectory remains lackluster. Adjusted EBIDTA margins are likely to decline 80bpsYoY but increase 30

bpsQoQ to 12.7%. Adjusted net profits are likely to decline 5%YoY but improve 12%QoQ to Rs 58 bn. Companies which we expect to report significantQoQ improvement in margins are MSIL (+170 bps), BJAUT (+100 bps) and HMCL (+60 bps). Poor

CV volumes are likely to lead to a significantQoQ margin drop for AL (-410 bps). We remain cautious on OEM (AL, EIM, MSIL). Maintain Buy on HMCL, EXID, AMRJ, MSS and Accumulate on MM, TTMT


… Key sectors-Expectations

n Cement: Subdued volumes growth (+2.1%YoY and 7.4%QoQ) for coverage companies and 3.6%QoQ decline in average

price are likely to result in decline in revenue growth at 8%YoY vs 20%YoY in Q2FY13. EBITDA/t at Rs814/t is expected to decline 1.9%YoY and 19.2%QoQ. Overall EBIDTA is expected to grow 1.2%YoY but decline 11%QoQ led by lower

realizations. We estimate APAT to grow by 4.1%YoY but decline 15%QoQ. Preferred- Shree Cements and Madras Cements (strong volume growth and improving cost structure led by better energy efficiencies)

n Engineering & Capital goods: Expect muted operational performance in Q3FY13, lower revenue growth (6.2%YoY), lower other income and higher interest costs. Expect 2% drop in net profits. Muted revenue growth on back of lower order backlogs

and muted demand. Notable exceptions are L&T (+13%), Elecon Engg (+12%) and Punj Lloyd (+12%). Expect stable EBITDA margins at 12.4% (-20 bpsYoY) with EBITDA growth at 4.9%YoY. High financial leverage to impact earnings performance.

Expect order inflows to decline 7%QoQ. Expect positive earnings surprise for Greaves Cotton and Blue Star. Preferred- L&T, Cummins India, Greaves Cotton and Blue Star.

n Agri Input and Chemicals: We expect our universe to report topline growth of 7%YoY on the back of 18%YoY for chemicals and flat growth for fertilizers. Aggregate APAT is expected to increase by 6%YoY. Fertiliser revenues to be impacted by 31%

decline in Complex fertiliser consumption during Oct/Nov’12. Aggregate fertiliser margins for our universe are expected to decline by 170bpsYoY to 8.7%. Aggregate chemicals EBIT margin is expected to decline by 130bpsYoY to 17.3%. Rabi

season has panned out well for agrochemicals consumption & we are likely to witness volume growth during this quarter. Preferred-Dhanuka Agritech, Coromandel Int’l and Tata Chemicals


… Key sectors-Expectations

n Banking: Expect modest NII growth for our banking universe at 8%YoY (10% in Q2FY13) due to sluggish 3.3%YoY growth in

NII for PSU banks. NII growth for private banks is expected to remain healthy at 22%YoY. Operating profit growth for our universe is expected to remain modest at 11%YoY / 5%QoQ. NPA pressure will persist with PSU space (18%YoY growth in

gross slippages to 2.5% of loans). We suspect PSU banks to resort to more of write-off/OTS towards problematic loans. We factor in 68bps of credit cost for our PSU universe and lower 58bp for our private sector universe. Overall, our universe is

expected to report 12%YoY growth in net profit- 6%YoY for PSU space and 23%YoY for private space. Preferred – HDFC Bank, ICICI Bank & United bank and Mahindra Finance and CRISIL in NBFC space

n Pharmaceuticals: Our Pharma universe expected to report 21%YoY (1%QoQ) revenue growth. OPM expected to increase by 181bps to 24.3%YoY. PAT of Pharma universe is likely to grow by 21%YoY (-4%QoQ). Growth in APAT on account of

Dr.Reddy (78%), Wockhardt (38%), Aurobindo (24%) and Lupin (32%). Preferred- Dr Reddy, Lupin, Wockhardt, Glenmark, Aurobindo.

n Key things to watch for: Management commentaries on (a) Demand growth & outlook (b) Implications of global slowdown (c) volatility in commodity prices and (e) Currency volatility. Recent policy measures and their implications on corporate

sentiment, future price actions and financial conditions can reflect on management guidance

n Potential result suprises:

¡ Positive - Allahabad Bank, Blue Star, Colgate, Dr. Reddy, Federal Bank, GIPCL, Glenmark, GPIL, Greaves Cotton, Hero Motocorp,

Lupin, Mahindra & Mahindra, Maruti Suzuki, MindTree, Nava Bharat Ventures, PGCIL & Titan Industries

¡ Negative - ACC, Ambuja Cement, Ashok Leyland, Bhushan Steel, Cadila, Eicher Motors, Godrej Consumer, HEG, Hindustan

Unilever, IPCA, JPVL, Jubilant FoodWorks, Lakshmi Machine Works, Tata Steel, Ultratech Cement & Union Bank

Note: ex Banks & FS, FS - Others and Oil & Gas # Nos in bracket are %YoY change in PAT


Q3FY13 Preview

Parameters ----> Net Sales

Growth Ebitda

Growth

EBITDA Margin growth

EBIT margin growth

Adjusted PBT

Growth

Adjusted PAT

Growth

Interest Cost

Growth Tax

Growth

Emkay Universe 10.3% 8.7% -28 bps -1 bps 8.3% 2.1% 16.6% 30.3%

Emkay Large Cap 10.5% 8.7% -32 bps 2 bps 9.5% 2.6% 11.9% 32.3%

Emkay Mid Cap 8.8% 7.2% -23 bps -42 bps -6.0% -5.5% 35.5% 6.7%

Emkay Small Cap 10.9% 20.6% 144 bps 148 bps 25.7% 24.6% 16.4% 36.4%

Emkay Universe ex Top 3 Cos 11.1% 7.5% -65 bps -29 bps 5.9% -1.8% 16.5% 34.7%

Emkay Universe ex Top 5 Cos 10.6% 5.0% -100 bps -64 bps 3.0% -4.2% 18.1% 31.9%

Emkay Universe ex Top 3 and Bottom 3 Cos 13.0% 12.1% -15 bps -26 bps 7.0% 6.2% 30.7% 14.3%

Emkay Universe ex Top 5 and Bottom 5 Cos 13.0% 12.1% -16 bps -33 bps 7.1% 7.3% 32.8% 15.5%

# Top 5 companies based on Contribution to PAT Growth are TCS, Sterlite Industires, Tata Steel, DLF and NTPC

Bottom 5 companies based on Contribution to PAT Growth are Ranbaxy, SAIL, Tata Motors, NMDC and Bharti Airtel


Q3FY13 Strong Results

APAT (Rs mn) APAT Gr Company Name Sector

Dec-12 Dec-11 (%)

Large Caps

DLF Real Estate 6694 2475 170.5

HCL Tech IT Services 8635 5529 56.2

JSW Energy Power 1989 274 626.2

Maruti Suzuki India Automobiles 5016 2056 143.9

Shree Cements Cement 1979 712 178.0

Sterlite Industries Metals & Mining 14328 9199 55.7

Tata Power Power 2261 1172 92.9

Union Bank of India Banks & Financial Services 6269 1969 218.4

Mid Caps

Ballarpur Inds Paper 394 136 190.0

CESC Power 1749 740 136.4

Gujarat Gas Oil & Gas 760 248 206.7

Nava Bharat Ventures Power 666 378 76.3

Prestige Estates Real Estate 1023 282 262.9

Sterlite Tech Others 237 95 149.8

United Phosphorus Agri Input & Chemicals 1744 1154 51.1

Small Caps

Dhanuka Agritech Agri Input & Chemicals 129 78 65.1

Dishman Pharma Pharmaceuticals 181 86 110.5

Godawari Power Metals & Mining 173 106 63.3

Gujarat Industries Power Power 506 168 201.5

Piramal Glass Others 331 188 76.0


Q3FY13 Weak Results

APAT (Rs mn) APAT Gr Company Name Sector

Dec-12 Dec-11 (%)

Large Caps

Allahabad Bank Banks & Financial Services 3021 5604 -46.1

Bharti Airtel Telecommunications 6923 10113 -31.5

Jaiprakash Associates Construction 1210 3097 -60.9

JSW Steel Metals & Mining 2643 4561 -42.1

Ranbaxy Labs Pharmaceuticals 2899 15146 -80.9

SAIL Metals & Mining 4218 10984 -61.6

Mid Caps

Hexaware Technologies IT Services 585 986 -40.7

India Cements Cement 149 563 -73.6

KSK Energy Power 502 755 -33.5

Madras Cements Cement 492 768 -36.0

Manappuram General Finance Banks & Financial Services 1123 1614 -30.4

Orient Paper Cement 135 478 -71.8

United Bank Of India Banks & Financial Services 1470 2260 -34.9

Voltas Engineering & Capital Goods 396 610 -35.1

Small Cap

HEG Metals & Mining 393 595 -33.9

JK Paper Paper 34 74 -54.1

Mcnally Bharat Engineering Engineering & Capital Goods 64 125 -48.6


Possible Surprises – Positives

Name of the company

EPS (Rs)

YoY gr (%)

Reason

Allahabad Bank 6 -48.7 Assumed tax rate of 30% in Q3FY13 vs 8% in Q3FY12. Management has guided at significant thrust on recoveries which may bring provision costs lower than we have expected

Blue Star 1.4 Loss to Profit

Expect positive earnings surprise… led by improvement in operational performance in EMP&PAC division. We have factored segment EBIT margins at 5.5% (vs 7% in Q2FY13)

Colgate 10.2 20 Continuation of strong volume and value growth

Dr. Reddy 27 89 Gain in the market share in key products in US can boost the revenue growth and margins

Federal Bank 12.7 7.6 Assumed Rs2.6bn of slippages vs Rs1.5bn in last quarter. If no large accounts turn NPAs, slippage number may come lower than we expected

GIPCL 3.3 201 Excellent PLF/PAF for Surat

Glenmark 5.3 23 India business and EBITDA margins can surprise positively

GPIL 5.5 63 Better than expected iron ore mining and higher sales of pellets due to lower utilizations of sponge iron might boost the operating performance of the company

Greaves Cotton 1.6 12.6 Expect positive earnings surprise led by pick-up in 3-W volume growth after 7-8 months of decline in volumes

Hero Motocorp 30.1 -2 Benefit of operating leverage (vols up 18% QoQ), price hikes and favorable JPY/INR to help margin expansion

Lupin 7 33 Tricor sales in US can surprise positively in the numbers

Mahindra & Mahindra 13.7 27 Better product mix with higher share of tractors (31% vs 27% in Q2) and operating leverage benefits (vols up 11% QoQ) can lead to margin surprise

Maruti Suzuki 17.4 144 Improved operating leverage (vols up 26%YoY/31% QoQ) and announcement on hedges taken for FY14 can lead to positive surprise

MindTree 22 45.3 We expect upside risks to Dec'12 qtr earnings driven by a possible margin surprise( Emkay es 20.4%, -170 bps QoQ, +310 bpsYoY)

Nava Bharat Ventures 7.5 76 Commissioning guidance for 150MW in 4Q13 to trigger upsides and stock likely to be re-rated

PGCIL 2.1 22 Expect positive surprise in 4Q13 and FY14 capitalization guidance

Titan Industries 2.2 21.9 Jewelery segment to rebound with volume growth


Possible Surprises – Negatives

Name of the company

EPS (Rs)

YoY gr (%)

Reason

ACC 11.8 -8.8 Cement volumes growth for the current quarter remains subdued leading to avg cement prices declining by 3.6% sequentially to Rs289/bag with sharp declines of ~4.5% witnessed in western, eastern and northern regions which accounts for ~60% of ACC's Dispatches. Consensus estimates for CY13 EPS at ~Rs90 appears optimistic creating room for disappointment even as stock valuation at PER of 15.5X CY13E remain rich

Ambuja Cement 2.03 15.1 Cement volumes growth for the current quarter remains subdued leading to avg cement prices declining by 3.6% sequentially to Rs289/bag with sharp declines of ~4.5% witnessed in western, eastern and northern regions which accounts for ~80-85% of Ambuja's Dispatches. Consensus estimates for CY13 EPS at ~Rs13 appears optimistic creating room for disappointment even as stock valuation at PER of 16.1X CY13E remain rich

Ashok Leyland -0.2 NA Poor volumes, low production from Pantnagar, higher discounts and working capital debt to impact earnings

Bhushan Steel 11.6 -11 The EBITDA/ tonne against our estimate fo Rs 14213 might come lower due to rise in input costs and problems of iron ore sourcing

Cadila 11 33 Margins can surprise negatively on back of dollor hedges @Rs.50

Eicher Motors 37.7 19 VECV to be impacted due to weak volumes and higher discounts

Godrej Consumer 6.3 21.2 Negative surprise in margins in international business

HEG 9.2 -34 Despite stable utilizations, we believe the input costs can be higher than expected thereby impacting the margins during this quarter

Hindustan Unilever 4 12.1 Expected rise in media intensity

IPCA 7 -14 Margins can surprise negatively due to high base last year and increase in R&D and SG&A spend

JPVL 0 NA Bina PLF/PAF was very low. FY13 EPS could be downgraded. But expect FY14 to remain intact

Jubilant FoodWorks 6.2 31.4 Earnings cut driven by high pre-operating expenses on Dunkin Donuts


…Possible Surprises – Negatives

Name of the company

EPS (Rs)

YoY gr (%)

Reason

Lakshmi Machine Works 24.9 -29.3 Order offtake and execution has been significantly lower than management’s earlier guidance of better H2FY13. Overall business environment continues to remain challenging. Power issues in Tamil Nadu continue to prevail, impacting the business environment. High fuel cost to dent EBITDA during Q3FY13E, leading to lower profitability.

Tata Steel -1.4 NA The company might show lower volume than our estimate for both domestic (1.85 mt) and European (3.3) markets. Also, EBITDA/ tonne in Europe can be lower than our estimate of -$5/ tonne

Ultratech Cement 19 1.4 Cement volumes growth for the current quarter remains subdued leading to avg cement prices declining by 3.6% sequentially to Rs289/bag with sharp declines of ~4.5% witnessed in western, eastern and northern regions which accounts for ~65% of Ultratech's Dispatches. Consensus estimates for FY14 EPS at ~Rs118 appears optimistic creating room for disappointment even as stock valuation at PER of 17.8X FY14E remain rich

Union Bank of India 9.5 205.8 Have assumed significantly higher recoveries/upgrades at Rs5.6bn and consequently lower provisions. Lower recoveries/upgrades could mean higher provisions and miss on estimates


Emkay Universe Q3FY13 Result Preview

Q3FY13 Q2FY13 Q3FY12 YoY QoQ Q3FY13 Q2FY13 Q3FY12 YoY QoQ Q3FY13 Q2FY13 Q3FY12 YoY QoQ Q3FY13 Q2FY13 Q3FY12 YoY QoQ

Agri Input & Chemicals 144290 148833 134649 7% -3% 19670 19307 19397 1% 2% 9896 9466 9376 6% 5% 4.3 4.1 4.1 6% 5%

Auto Ancillaries 123352 116592 90652 36% 6% 11978 11143 8910 34% 7% 5197 4392 4262 22% 18% 2.5 2.1 2.1 22% 18%

Automobiles 873507 781509 787654 11% 12% 110955 96696 105947 5% 15% 58067 51735 61041 -5% 12% 7.4 6.6 7.7 -5% 12%

Banks & Financial Services 421994 403727 389732 8% 5% 332393 307478 305832 9% 8% 174957 156480 155890 12% 12% 12.9 11.5 11.9 8% 12%

Cement 139716 133568 129089 8% 5% 26435 29609 26171 1% -11% 13247 15550 12748 4% -15% 4.8 5.6 4.6 4% -15%

Construction 80134 72005 71648 12% 11% 22634 22667 21101 7% 0% 6856 7256 8588 -20% -6% 1.4 1.5 1.7 -20% -6%

Consumers 204663 190998 178264 15% 7% 32222 29609 27460 17% 9% 22976 21272 19453 18% 8% 4.8 4.4 4.1 17% 8%

Engineering & Capital Goods 356120 325857 335386 6% 9% 44244 42230 42174 5% 5% 27167 25482 27839 -2% 7% 5.9 5.5 6.1 -2% 7%

Financial Services - Others 3539 3331 2718 30% 6% 1208 1140 941 28% 6% 846 755 674 25% 12% 10.6 9.4 8.2 29% 12%

IT Services 509351 495482 443348 15% 3% 121094 120637 111191 9% 0% 92094 94364 83904 10% -2% 12.0 12.2 10.9 10% -2%

Media & Entertainment 28003 26980 24914 12% 4% 6400 5940 6006 7% 8% 3080 3172 2599 19% -3% 1.1 1.2 0.9 19% -3%

Metals & Mining 799117 810961 810533 -1% -1% 124764 124572 130843 -5% 0% 62828 62411 64995 -3% 1% 3.1 3.1 3.3 -3% 1%

Oil & Gas 3129636 3500145 3498925 -11% -11% 91748 442745 424030 -78% -79% -37071 331540 244093 -1.8 16.1 11.8

Paper 20253 20521 18493 10% -1% 3795 3592 2799 36% 6% 681 608 34 1915% 12% 0.8 0.7 0.0 1915% 12%

Pharmaceuticals 234279 231307 213454 10% 1% 57705 59757 61251 -6% -3% 36843 38689 44255 -17% -5% 8.1 8.5 9.7 -17% -5%

Power 409351 396764 342138 20% 3% 119765 125020 87101 38% -4% 44763 43802 38818 15% 2% 1.2 1.0 1.0 22% 15%

Real Estate 59636 30199 27419 117% 97% 20450 11407 11181 83% 79% 9877 3711 4447 122% 166% 3.8 1.4 1.7 122% 166%

Telecommunications 256961 255970 235386 9% 0% 77108 77732 73030 6% -1% 9267 9612 12123 -24% -4% 1.3 1.4 1.7 -24% -4%

Others 56605 57543 50556 12% -2% 12915 12869 12476 4% 0% 5276 6346 5239 1% -17% 5.2 6.2 5.1 1% -17%

Emkay 7850506 8002290 7784959 1% -2% 1237483 1544150 1477841 -16% -20% 546847 886642 800378 -32% -38% 3.7 5.8 5.3 -31% -36%

Emkay* 4295337 4095087 3893584 10% 5% 812134 792788 747038 9% 2% 408115 397868 399721 2% 3% 3.6 3.3 3.4 4% 7%

Large Cap* 3700413 3503117 3347755 11% 6% 717242 697728 659714 9% 3% 373740 363408 364367 3% 3% 3.8 3.7 3.7 3% 3%

Mid Cap* 529394 525894 486740 9% 1% 83165 83983 77602 7% -1% 30380 30791 32148 -5% -1% 2.0 1.5 1.8 8% 30%

Small Cap* 65530 66076 59088 11% -1% 11727 11076 9722 21% 6% 3994 3669 3207 25% 9% 3.2 3.0 2.6 25% 9%

Growth (%)Net Sales (Rs mn) Growth (%) Growth (%) EPS (Rs)Ebitda (Rs mn) APAT (Rs mn) Growth (%)

* Note: ex Banks & FS, FS - Others and Oil & Gas



Company Name Q3FY13 Q2FY13 Q3FY12 YoY QoQ Q3FY13 Q2FY13 Q3FY12 YoY QoQ Q3FY13 Q2FY13 Q3FY12 YoY QoQ Q3FY13 Q2FY13 Q3FY12 YoY QoQ

Agri Input & Chemicals

Chambal Fertilisers 21266 23407 17966 18% -9% 2056 1951 2039 1% 5% 932 896 862 8% 4% 2.2 2.2 2.1 8% 4%

Coromandel International 20213 25678 25497 -21% -21% 1920 2374 2335 -18% -19% 1044 1532 1472 -29% -32% 3.7 5.5 5.2 -29% -32%

Deepak Fertilisers 6207 6934 6015 3% -10% 977 803 1149 -15% 22% 509 406 637 -20% 25% 5.8 4.6 7.2 -20% 25%

Dhanuka Agritech 1314 2063 1104 19% -36% 184 306 127 45% -40% 129 237 78 65% -45% 2.6 4.7 1.6 65% -45%

GNFC 10578 11658 10429 1% -9% 1457 1453 1573 -7% 0% 744 724 862 -14% 3% 4.8 4.7 5.5 -14% 3%

GSFC 14452 14160 13000 11% 2% 2022 2028 2580 -22% 0% 1471 1505 1724 -15% -2% 3.7 3.8 4.3 -15% -2%

Rallis India 3792 4855 3251 17% -22% 611 967 553 10% -37% 353 591 310 14% -40% 1.8 3.0 1.6 14% -40%

Tata Chemicals 45109 41518 38099 18% 9% 6704 6165 5558 21% 9% 2968 2327 2277 30% 28% 11.6 9.1 8.9 30% 28%

United Phosphorus 21361 18560 19288 11% 15% 3738 3261 3484 7% 15% 1744 1248 1154 51% 40% 3.8 2.7 2.5 51% 40%

Auto Ancillaries

Amara Raja Batteries 7358 7187 6131 20% 2% 1103 1180 1063 4% -7% 707 795 659 7% -11% 8.3 9.3 7.7 7% -11%

Apollo Tyres 34689 33748 32282 7% 3% 3981 3669 3243 23% 9% 1628 1533 1278 27% 6% 3.2 3.0 2.5 27% 6%

CEBBCO 1550 1538 1328 17% 1% 287 312 188 52% -8% 145 163 113 29% -11% 2.6 3.0 2.0 29% -11%

Exide Industries 15475 15214 12502 24% 2% 2130 1882 1762 21% 13% 1411 1202 1182 19% 17% 1.7 1.4 1.4 19% 17%

Motherson Sumi 64280 58905 38408 67% 9% 4477 4100 2654 69% 9% 1306 700 1030 27% 87% 2.2 1.2 1.8 25% 87%

Automobiles

Ashok Leyland 23337 32960 28798 -19% -29% 1400 3341 2104 -33% -58% -400 1426 669 -0.2 0.5 0.3

Bajaj Auto 54981 49724 49859 10% 11% 10674 9152 9841 8% 17% 8233 7407 8364 -2% 11% 28.5 25.6 28.9 -2% 11%

Eicher Motors 16042 14831 15766 2% 8% 1329 1114 1538 -14% 19% 1018 660 854 19% 54% 37.7 24.4 31.6 19% 54%

Hero Motocorp 61963 51875 60315 3% 19% 8985 7192 9430 -5% 25% 6007 4406 6130 -2% 36% 30.1 22.1 30.7 -2% 36%

Mah & Mah 114089 98130 83868 36% 16% 13070 11189 10208 28% 17% 8411 9018 6622 27% -7% 13.7 14.6 10.8 27% -7%

Maruti Suzuki India 108923 83054 78824 38% 31% 8492 5085 4172 104% 67% 5016 2274 2056 144% 121% 17.4 7.9 7.1 144% 121%

Tata Motors 475800 434029 452602 5% 10% 65793 58611 67431 -2% 12% 29180 26092 35780 -18% 12% 8.8 7.9 10.8 -18% 12%

TVS Motor 18372 16906 17622 4% 9% 1212 1012 1223 -1% 20% 603 452 565 7% 33% 1.3 1.0 1.2 7% 33%

Net Sales (Rs mn) Ebitda (Rs mn) Growth (%)Growth (%) EPS (Rs)APAT (Rs mn) Growth (%) Growth (%)




Banks & Financial Services

Allahabad Bank 13649 11743 13805 -1% 16% 9339 8023 10300 -9% 16% 3021 2342 5604 -46% 29% 6.0 4.7 11.8 -49% 29%

Andhra Bank 9365 8937 9839 -5% 5% 6911 6381 7676 -10% 8% 2843 3256 3032 -6% -13% 5.1 5.8 5.4 -6% -13%

Axis Bank 24456 23269 21403 14% 5% 23945 21783 20592 16% 10% 12726 11235 11023 15% 13% 30.7 27.1 26.7 15% 13%

Bank of Baroda 29217 28623 26555 10% 2% 23914 23826 26082 -8% 0% 12183 13108 12993 -6% -7% 29.5 31.8 33.1 -11% -7%

Bank of India 22079 21960 20674 7% 1% 17522 18541 17318 1% -5% 7223 3019 8194 -12% 139% 12.6 5.3 15.0 -16% 139%

Canara Bank 20363 19568 19186 6% 4% 15758 12821 15767 0% 23% 8105 6610 9976 -19% 23% 18.3 14.9 22.5 -19% 23%

Corporation Bank 8254 8032 8616 -4% 3% 6685 6858 8257 -19% -3% 3376 4057 4020 -16% -17% 22.8 27.4 27.1 -16% -17%

Dewan Housing 1574 1546 1237 27% 2% 1367 1331 1138 20% 3% 913 859 750 22% 6% 7.8 7.3 7.2 9% 6%

Federal Bank 5283 5059 5280 0% 4% 4567 3496 4187 9% 31% 2173 2151 2019 8% 1% 12.7 12.6 11.8 8% 1%

HDFC 13559 12941 11557 17% 5% 14549 14940 12603 15% -3% 10618 10811 9162 16% -2% 6.9 7.0 6.2 11% -2%

HDFC Bank 39048 37317 31160 25% 5% 30206 25713 23780 27% 17% 18683 15600 14297 31% 20% 7.9 6.6 6.1 30% 20%

ICICI Bank 34318 33712 27120 27% 2% 32798 31933 26870 22% 3% 21047 19561 17280 22% 8% 18.3 17.0 15.0 22% 8%

LIC Housing Finance 3755 3535 3258 15% 6% 3672 3394 3263 13% 8% 2681 2431 2463 9% 10% 0.0 4.8 5.2 -100% -100%

Mah & Mah Financial Services 5602 5259 4228 33% 7% 3929 3626 2797 40% 8% 2080 1876 1547 34% 11% 20.2 18.3 15.1 34% 11%

Manappuram General Finance 3218 3206 4300 -25% 0% 1665 1597 2395 -30% 4% 1123 1077 1614 -30% 4% 1.3 1.3 1.9 -30% 4%

Punjab National Bank 38091 36501 35360 8% 4% 27592 25336 26756 3% 9% 10782 10663 11492 -6% 1% 31.8 31.4 36.3 -12% 1%

South Indian bank 3253 2977 2734 19% 9% 2037 1996 1790 14% 2% 1245 1189 1023 22% 5% 0.9 0.9 0.9 6% 5%

State Bank of India 115795 109738 114659 1% 6% 82980 73536 72600 14% 13% 42925 36581 32631 32% 17% 64.0 54.5 51.4 24% 17%

Union Bank of India 19007 18502 17809 7% 3% 12716 12727 12840 -1% 0% 6269 5546 1969 218% 13% 9.5 8.4 3.1 206% 13%

United Bank Of India 6317 6058 6676 -5% 4% 4787 4773 4833 -1% 0% 1470 1446 2260 -35% 2% 4.1 4.0 6.6 -38% 2%

Yes Bank 5789 5242 4276 35% 10% 5454 4847 3988 37% 13% 3472 3061 2541 37% 13% 9.8 8.6 7.2 35% 13%

Cement

ACC 26344 24445 25027 5% 8% 3859 4350 3893 -1% -11% 2212 2487 2425 -9% -11% 11.8 13.2 12.9 -9% -11%

Ambuja Cements 25122 21684 23291 8% 16% 5082 5650 4300 18% -10% 3089 3371 2683 15% -8% 2.0 2.2 1.8 15% -8%

India Cements 10102 11227 9415 7% -10% 1642 2051 1946 -16% -20% 149 391 563 -74% -62% 0.5 1.3 1.8 -74% -62%

Madras Cements 8536 9995 7410 15% -15% 1964 3139 2075 -5% -37% 492 1329 768 -36% -63% 2.1 5.6 3.2 -36% -63%

Orient Paper 5815 5984 5678 2% -3% 420 417 871 -52% 1% 135 192 478 -72% -30% 0.7 1.0 2.5 -72% -30%

Ultratech Cement 50136 46996 45681 10% 7% 9784 10073 9647 1% -3% 5191 5499 5118 1% -6% 19.0 20.1 18.7 1% -6%

Shree Cements 13662 13238 12586 9% 3% 3684 3930 3440 7% -6% 1979 2281 712 178% -13% 56.8 65.5 20.4 178% -13%





Construction

Adani Ports 7856 6976 6554 20% 13% 5415 4850 4462 21% 12% 3524 3717 3106 13% -5% 1.7 1.8 1.5 13% -5%

Ashoka Buildcon 4115 3099 3529 17% 33% 931 841 692 35% 11% 231 286 195 18% -19% 4.4 5.4 3.7 18% -19%

IL&FS Transportation 14461 13704 12684 14% 6% 4145 4527 3207 29% -8% 1002 1159 878 14% -14% 5.2 6.0 4.5 14% -14%

IRB Infrastructure 8278 8453 7455 11% -2% 3680 3807 3417 8% -3% 960 1210 1244 -23% -21% 2.9 3.6 3.7 -23% -21%

IVRCL 12310 9947 11955 3% 24% 980 699 878 12% 40% -71 -396 68 -0.3 -1.5 0.3

Jaiprakash Associates 33113 29825 29470 12% 11% 7483 7944 8446 -11% -6% 1210 1280 3097 -61% -5% 0.6 0.6 1.5 -61% -5%

Consumers

Asian Paints 29362 26364 25605 15% 11% 4697 3816 3974 18% 23% 3166 2391 2594 22% 32% 33.0 24.9 27.0 22% 32%

Berger Paints 8945 8111 7813 14% 10% 957 900 840 14% 6% 591 534 491 20% 11% 1.7 1.5 1.4 20% 11%

Colgate-Palmolive 7834 7738 6696 17% 1% 1650 1571 1353 22% 5% 1387 1451 1156 20% -4% 10.2 10.7 8.5 20% -4%

Glaxosmithkline Consumer 7195 8577 6248 15% -16% 1042 1706 844 23% -39% 749 1286 591 27% -42% 17.8 30.6 14.1 27% -42%

Godrej Consumer Products 17456 16003 13509 29% 9% 3272 2489 2721 20% 31% 2131 1593 1671 28% 34% 6.3 4.7 5.2 21% 34%

Hindustan Unilever 64916 63108 59376 9% 3% 10621 9767 9705 9% 9% 8589 8053 7662 12% 7% 4.0 3.7 3.5 12% 7%

Jubilant FoodWorks 3903 3421 2770 41% 14% 686 587 524 31% 17% 402 323 303 32% 24% 6.2 5.0 4.7 31% 24%

Marico 12684 11559 10578 20% 10% 1730 1477 1218 42% 17% 1151 859 841 37% 34% 1.8 1.3 1.4 30% 34%

Nestle 21502 21156 19547 10% 2% 4390 4360 3858 14% 1% 2545 2673 2308 10% -5% 26.4 27.7 23.9 10% -5%

Page Industries 2119 2201 1721 23% -4% 421 440 295 43% -4% 271 308 199 36% -12% 24.3 27.6 17.9 36% -12%

Titan Industries 28748 22760 24401 18% 26% 2756 2494 2129 29% 10% 1995 1801 1636 22% 11% 2.2 2.0 1.8 22% 11%

Eng. & Capital Goods

BHEL 107887 105616 106586 1% 2% 20239 18995 19960 1% 7% 13501 12744 13936 -3% 6% 5.5 5.2 5.7 -3% 6%

Blue Star 5996 5786 5840 3% 4% 309 202 -88 53% 124 73 -328 71% 1.4 0.8 -3.6 71%

Cummins India 9892 10869 9624 3% -9% 1739 1999 1612 8% -13% 1361 1609 1410 -3% -15% 4.9 5.8 5.1 -3% -15%

Elecon Engineering 3359 3297 3000 12% 2% 485 605 480 1% -20% 152 230 152 0% -34% 1.6 2.5 1.6 0% -34%

Greaves Cotton 5079 4501 4651 9% 13% 656 577 577 14% 14% 385 370 342 13% 4% 1.6 1.5 1.4 13% 4%

Lakshmi Machine Works 4381 4696 5383 -19% -7% 516 608 687 -25% -15% 280 306 397 -29% -9% 24.9 27.2 35.2 -29% -9%

Larsen & Toubro 157258 131952 139836 12% 19% 15306 14054 13641 12% 9% 10571 9146 10015 6% 16% 17.3 15.0 16.4 6% 16%

Mcnally Bharat Engineering 4927 5142 4904 0% -4% 336 390 318 6% -14% 64 85 125 -49% -25% 2.1 2.8 4.0 -49% -25%

Punj Lloyd 30289 27778 27012 12% 9% 2810 3139 2677 5% -10% -484 -179 233 -1.5 -0.5 0.7

Thermax 11775 11924 12693 -7% -1% 1166 1218 1354 -14% -4% 808 911 955 -15% -11% 6.8 7.6 8.0 -15% -11%

TRF 3107 2652 4276 -27% 17% 161 6 149 8% 2552% 8 -146 -8 0.7 -13.2 -0.8

Voltas 12170 11645 11580 5% 5% 522 440 807 -35% 19% 396 333 610 -35% 19% 1.2 1.0 1.8 -35% 19%





Financial Services - Others - Others

CRISIL 2863 2707 2176 32% 6% 1004 977 729 38% 3% 698 645 498 40% 8% 10.0 9.2 6.9 44% 8%

ICRA 676 624 542 25% 8% 204 162 211 -4% 25% 148 110 177 -16% 35% 14.8 11.0 17.7 -16% 35%

IT Services

eClerx Services 1693 1617 1320 28% 5% 655 601 598 10% 9% 464 252 500 -7% 85% 15.4 8.4 16.6 -7% 85%

HCL Tech 62345 60910 52454 19% 2% 12861 13287 9489 36% -3% 8635 8631 5529 56% 0% 12.5 12.5 8.0 56% 0%

Infinite Computer 3553 3479 2694 32% 2% 608 579 539 13% 5% 342 312 393 -13% 9% 7.9 7.3 8.9 -11% 9%

Hexaware Technologies 5115 5130 4381 17% 0% 829 1153 1056 -22% -28% 585 840 986 -41% -30% 1.9 2.8 3.4 -43% -30%

Infosys 102004 98580 92980 10% 3% 28787 28720 31330 -8% 0% 21466 23690 23720 -10% -9% 37.6 41.5 41.5 -10% -9%

Mahindra Satyam 19514 19384 17181 14% 1% 4055 4173 2781 46% -3% 3001 2779 3084 -3% 8% 2.6 2.4 2.6 -2% 9%

Mindtree 5899 5963 5197 14% -1% 1204 1319 897 34% -9% 883 722 606 46% 22% 21.5 17.6 15.0 44% 22%

Mphasis 13446 13062 13672 -2% 3% 2707 2700 2521 7% 0% 1924 2093 1847 4% -8% 10.0 9.9 8.8 15% 1%

NIIT Tech 5041 5001 4330 16% 1% 808 848 780 4% -5% 583 432 643 -9% 35% 10.0 7.5 10.8 -8% 33%

Persistent Systems 3312 3269 2677 24% 1% 877 890 696 26% -2% 560 446 406 38% 25% 14.0 11.2 10.2 38% 25%

TCS 160659 156207 132041 22% 3% 45430 44402 40922 11% 2% 34045 35097 28866 18% -3% 17.6 18.1 14.9 18% -3%

Tech Mahindra 17702 16314 14449 23% 9% 3412 3377 2343 46% 1% 3340 2963 2759 21% 13% 16.4 13.6 11.2 47% 21%

Wipro 109067 106566 99972 9% 2% 18863 18587 17239 9% 1% 16266 16106 14564 12% 1% 6.7 6.6 6.0 11% 1%

Print Media

DB Corp 4370 3784 3955 10% 15% 1099 861 1017 8% 28% 610 481 553 10% 27% 3.3 2.6 3.0 10% 27%

Dish TV 5562 5333 4905 13% 4% 1420 1557 1202 18% -9% -336 -213 -430 -0.3 -0.2 -0.4

HT Media 5647 5107 5266 7% 11% 831 565 777 7% 47% 529 333 482 10% 59% 2.3 1.4 2.1 10% 59%

Jagran Prakashan 3424 3221 3240 6% 6% 900 782 851 6% 15% 694 694 600 16% 0% 2.2 2.2 1.9 16% 0%

Zee Entertainment 9001 9535 7548 19% -6% 2150 2176 2160 0% -1% 1581 1877 1393 13% -16% 1.7 2.0 1.5 13% -16%




Pharmaceuticals

Aurobindo Pharma 16082 15004 12847 25% 7% 2761 2503 1913 44% 10% 1410 1294 1137 24% 9% 4.8 4.4 3.9 24% 9%

Cadila Healthcare 17053 15459 13832 23% 10% 3753 2930 2639 42% 28% 2297 1556 1773 30% 48% 11.5 8.7 8.7 33% 33%

Cipla 20498 21918 17580 17% -6% 5000 6770 3915 28% -26% 3546 3133 2654 34% 13% 4.4 3.9 3.3 34% 13%

Dishman Pharma 3075 2971 2655 16% 3% 678 660 608 11% 3% 181 141 86 110% 28% 2.2 1.7 1.1 110% 28%

Divi's Lab 5011 4737 4174 20% 6% 1975 1858 1511 31% 6% 1430 1339 1103 30% 7% 10.8 10.1 8.3 30% 7%

Dr. Reddy's Lab 30262 28809 27692 9% 5% 7342 6910 8690 -16% 6% 4539 4750 4880 -7% -4% 26.8 28.0 28.8 -7% -4%

Glaxosmithkline Pharma 6465 6760 5776 12% -4% 1949 2064 1822 7% -6% 1611 1634 1473 9% -1% 19.0 19.3 17.4 9% -1%

Glenmark Pharma 12353 12556 10313 20% -2% 2537 2714 1029 147% -6% 1419 1452 1153 23% -2% 5.2 5.4 4.3 23% -2%

Ipca Lab 7089 7713 6148 15% -8% 1466 1788 1513 -3% -18% 895 1162 1038 -14% -23% 7.2 9.3 8.3 -14% -23%

Jubilant Life Sciences 12522 12250 10885 15% 2% 2636 2603 2084 26% 1% 1125 1025 771 46% 10% 7.1 6.4 4.8 46% 10%

Lupin 24126 23007 18189 33% 5% 5392 5160 3736 44% 5% 3106 2906 2351 32% 7% 6.9 6.5 5.2 33% 7%

Pfizer 2762 2686 2706 2% 3% 623 616 519 20% 1% 550 546 487 13% 1% 18.4 18.3 16.3 13% 1%

Ranbaxy Labs 26170 26910 37923 -31% -3% 3400 4179 16293 -79% -19% 2899 3608 15146 -81% -20% 6.9 8.6 36.0 -81% -20%

Sun Pharma 25897 26639 21451 21% -3% 11130 11751 9638 15% -5% 7076 9032 6683 6% -22% 6.8 8.7 6.5 6% -22%

Torrent pharma 7860 7772 6966 13% 1% 1497 1554 1215 23% -4% 930 995 755 23% -7% 11.0 11.8 8.9 23% -7%

Unichem Labs 2711 2642 2226 22% 3% 545 529 368 48% 3% 361 365 245 47% -1% 4.0 4.0 2.7 47% -1%

Wockhardt 14342 13474 12090 19% 6% 5022 5170 3760 34% -3% 3468 3749 2520 38% -8% 31.7 34.3 23.0 38% -8%

Power

Adani Power 19775 14331 10594 87% 38% 4447 1494 3021 47% 198% -1863 -3730 -633 -0.9 -1.7 -0.3

CESC 13952 13440 9830 42% 4% 3620 3110 2130 70% 16% 1749 1360 740 136% 29% 14.0 10.9 5.9 136% 29%

Gujarat Industries Power 3509 3602 3877 -10% -3% 1275 1290 914 39% -1% 506 529 168 201% -4% 3.3 3.5 1.1 201% -4%

Indiabulls Power 0 0 0 0 -289 -66 0 -62 69 -100% 0.0 0.0 0.0 -100%

Jaiprakash Power Ventures 4312 9058 3967 9% -52% 3430 8116 3570 -4% -58% -90 3661 595 0.0 1.6 0.3

JSW Energy 22136 20765 17687 25% 7% 5914 5769 3496 69% 3% 1989 1819 274 626% 9% 1.2 1.1 0.2 626% 9%

KSK Energy 5989 5627 5707 5% 6% 2486 1966 2383 4% 26% 502 544 755 -34% -8% 1.3 1.5 2.0 -34% -8%

Lanco Infratech 37464 31850 30290 24% 18% 5242 5215 6028 -13% 1% -1942 -2720 777 -0.8 -1.1 0.3

Nava Bharat Ventures 2719 2896 2336 16% -6% 668 707 471 42% -6% 666 654 378 76% 2% 7.5 7.3 4.2 76% 2%

NHPC 10755 16217 8820 22% -34% 4627 10553 3788 22% -56% 2573 7430 2121 21% -65% 0.2 0.6 0.2 21% -65%

NTPC 164007 161196 153333 7% 2% 40037 42241 29050 38% -5% 26127 20513 22336 17% 27% 3.2 2.5 2.7 17% 27%

Power Grid Corporation 30867 30858 24666 25% 0% 26546 26692 21026 26% -1% 9817 10289 8027 22% -5% 2.1 2.2 1.7 22% -5%

Reliance Power 12637 10512 4573 176% 20% 3927 3650 1401 180% 8% 2467 2167 2039 21% 14% 1.5 1.3 1.2 21% 14%

Tata Power 81230 76411 66459 22% 6% 17547 14507 9889 77% 21% 2261 1348 1172 93% 68% 1.0 0.6 0.5 93% 68%




Metals & Mining

Bhushan Steel 28374 25543 24070 18% 11% 8694 7493 7240 20% 16% 2459 2015 2765 -11% 22% 11.6 9.5 13.0 -11% 22%

Godawari Power 6052 5972 4810 26% 1% 805 746 560 44% 8% 173 213 106 63% -19% 5.5 6.7 3.3 63% -19%

HEG 4561 4400 4180 9% 4% 809 681 851 -5% 19% 393 323 595 -34% 22% 9.2 8.1 14.0 -34% 14%

Hindalco 66242 61635 66470 0% 7% 5872 5153 7149 -18% 14% 4034 3589 4507 -10% 12% 2.1 1.9 2.4 -10% 12%

Hindustan Zinc 30568 28655 27868 10% 7% 16353 14431 14023 17% 13% 16333 15398 12800 28% 6% 3.9 3.6 3.0 28% 6%

JSW Steel 86117 95137 84241 2% -9% 14017 15313 13174 6% -8% 2643 2675 4561 -42% -1% 11.8 12.0 20.4 -42% -1%

NMDC 21989 26120 28220 -22% -16% 16128 19349 22607 -29% -17% 14360 16786 18588 -23% -14% 3.6 4.2 4.7 -23% -14%

SAIL 115854 108202 110437 5% 7% 11382 11093 15811 -28% 3% 4218 5013 10984 -62% -16% 1.0 1.2 2.7 -62% -16%

Sesa Goa 2198 2944 26171 -92% -25% -407 1943 9073 5275 5227 6915 -24% 1% 6.1 6.0 8.0 -24% 1%

Sterlite Industries 111228 111026 103037 8% 0% 25706 25270 23183 11% 2% 14328 15239 9199 56% -6% 4.3 4.5 2.7 56% -6%

Tata Steel 325933 341327 331031 -2% -5% 25405 23101 17173 48% 10% -1388 -4066 -6027 -1.4 -4.2 -6.3

Oil & Gas

BPCL 435856 568879 588245 -26% -23% -47187 53880 36874 -52987 50348 31422 -72.8 69.3 43.5

Cairn India 46064 44431 30968 49% 4% 36295 26395 23692 53% 38% 30900 23222 22619 37% 33% 16.2 12.2 11.9 36% 33%

GAIL 116813 113929 112942 3% 3% 18436 14120 17949 3% 31% 10822 9854 10914 -1% 10% 8.5 7.8 8.6 -1% 10%

Gujarat Gas 7880 8359 6499 21% -6% 1159 1368 290 299% -15% 760 993 248 207% -23% 5.9 7.7 1.9 207% -23%

Gujarat State Petronet 2592 2772 2755 -6% -6% 2367 2561 2535 -7% -8% 1182 1328 1262 -6% -11% 2.1 2.4 2.2 -6% -11%

HPCL 386398 491298 479174 -19% -21% -39129 29138 35725 -46129 23271 27252 -136.2 68.7 80.5

Indian Oil 948008 1060012 1152084 -18% -11% -71343 115616 107247 -99372 96114 24884 -40.9 39.6 10.2

Indraprastha Gas 8710 8552 6631 31% 2% 1933 2066 1504 28% -6% 881 992 691 27% -11% 6.3 7.1 4.9 27% -11%

Oil India 25502 25194 23738 7% 1% 11450 12649 13754 -17% -9% 9116 9546 10140 -10% -4% 15.2 15.9 16.9 -10% -4%

ONGC 186210 197882 181238 3% -6% 103729 102718 106576 -3% 1% 55245 58966 67306 -18% -6% 6.5 6.9 7.9 -18% -6%

Petronet LNG 78599 75486 63303 24% 4% 4923 5184 5032 -2% -5% 2902 3148 2954 -2% -8% 3.9 4.2 3.9 -2% -8%

Reliance Industries 887004 903350 851350 4% -2% 69116 77050 72850 -5% -10% 49609 53760 44400 12% -8% 15.3 16.6 13.6 13% -8%

Paper

Ballarpur Inds 12653 12298 12121 4% 3% 2367 2298 1904 24% 3% 394 348 136 190% 13% 0.7 0.6 0.3 151% 15%

JK Paper 3475 3578 3274 6% -3% 347 295 303 15% 18% 34 47 74 -54% -27% 0.2 0.3 0.5 -54% -27%

Tamilnadu Newsprint 4125 4646 3098 33% -11% 1080 999 592 82% 8% 252 213 -176 18% 3.6 3.1 -2.5 18%





Real Estate

DLF 46646 20395 20340 129% 129% 15546 7464 8224 89% 108% 6694 1180 2475 170% 467% 3.9 0.7 1.5 169% 467%

Oberoi Realty 2629 2577 1873 40% 2% 1538 1496 1134 36% 3% 1275 1244 1021 25% 3% 3.9 3.8 3.1 25% 3%

Phoenix Mills 675 665 505 34% 2% 452 438 373 21% 3% 337 329 269 25% 2% 2.3 2.3 1.9 25% 2%

Prestige Estates 4858 2414 1669 191% 101% 1535 725 502 206% 112% 1023 457 282 263% 124% 3.1 1.4 0.9 263% 124%

Sobha Developers 4828 4148 3032 59% 16% 1380 1285 948 46% 7% 548 501 401 37% 9% 5.6 5.1 4.1 37% 9%

Telecommunications

Bharti Airtel 202970 202830 185078 10% 0% 62618 63507 59584 5% -1% 6923 7211 10113 -32% -4% 1.8 1.9 2.7 -32% -4%

Idea Cellular 53991 53140 50308 7% 2% 14489 14225 13446 8% 2% 2344 2400 2010 17% -2% 0.7 0.7 0.6 17% -2%

Others

Aban Offshore 8594 9541 8659 -1% -10% 4960 5113 5007 -1% -3% 689 712 731 -6% -3% 15.8 16.4 16.8 -6% -3%

Arshiya International 3647 3726 2734 33% -2% 1029 1082 702 47% -5% 376 354 345 9% 6% 6.4 6.0 5.9 9% 6%

Essel Propack 4756 4766 4148 15% 0% 817 873 691 18% -6% 167 232 136 23% -28% 1.1 1.5 0.9 23% -28%

Grasim Industries 12986 13345 12429 4% -3% 2483 2898 2854 -13% -14% 2365 3827 2745 -14% -38% 25.8 41.7 29.9 -14% -38%

Havells India 10236 9642 8982 14% 6% 1304 1192 1279 2% 9% 818 870 789 4% -6% 6.6 7.0 6.3 4% -6%

Kajaria Ceramics 4209 3889 3507 20% 8% 648 599 561 16% 8% 294 265 211 39% 11% 4.0 3.6 2.9 39% 11%

Piramal Glass 4199 4214 3464 21% 0% 918 610 861 7% 50% 331 43 188 76% 668% 4.1 0.5 2.3 75% 668%

Sterlite Tech 7977 8421 6635 20% -5% 756 503 522 45% 50% 237 42 95 150% 462% 0.6 0.1 0.2 150% 462%



Top 10 Companies

Net Sales Growth

38.2%

40.4%

40.9%

41.9%

59.2%

67.4%

86.7%

129.3%

176.4%

191.1%

Maruti Suzuki India

Oberoi Realty

Jubilant FoodWorks

CESC

Sobha Developers

Motherson Sumi

Adani Power

DLF

Reliance Power

Prestige Estates

Ebitda Grow th

68.7%

69.2%

70.0%

77.4%

82.3%

89.0%

103.5%

146.7%

180.3%

205.9%

Motherson Sumi

JSW Energy

CESC

Tata Power

Tamilnadu Newsprint

DLF

Maruti Suzuki India

Glenmark Pharma

Reliance Power

Prestige Estates

PAT Growth

110.5%

136.4%

143.9%

149.8%

170.5%

178.0%

190.0%

201.5%

262.9%

626.2%

Dishman Pharma

CESC

Maruti Suzuki India

Sterlite Tech

DLF

Shree Cements

Ballarpur Inds

Gujarat Industries Power

Prestige Estates

JSW Energy

Ebitda Margin Growth

434 bps

441 bps

459 bps

547 bps

666 bps

672 bps

695 bps

706 bps

1,057 bps

1,276 bps

CEBBCO

Nava Bharat Ventures

Mahindra Satyam

NTPC

Blue Star

Tata Power

JSW Energy

Tamilnadu Newsprint

Glenmark Pharma



Bottom 10 Companies

Net Sales Growth

-1.6%

-7.2%

-9.5%

-18.6%

-19.0%

-20.7%

-22.1%

-27.3%

-31.0%

-91.6%

Mphasis

Thermax


Lakshmi Machine Works

Ashok Leyland

Coromandel International

NMDC

TRF

Ranbaxy Labs

Sesa Goa

Ebitda Growth

-17.9%

-21.5%

-21.6%

-25.0%

-28.0%

-28.7%

-33.4%

-35.3%

-51.7%

-79.1%

Hindalco

Hexaware Technologies

GSFC


SAIL

NMDC

Ashok Leyland

Voltas

Orient Paper

Ranbaxy Labs

PAT Growth

-36.0%

-40.7%

-42.1%

-48.6%

-54.1%

-60.9%

-61.6%

-71.8%

-73.6%

-80.9%

Madras Cements


JSW Steel

Mcnally Bharat Engineering

JK Paper

Jaiprakash Associates

SAIL

Orient Paper

India Cements

Ranbaxy Labs


-664 bps

-676 bps

-698 bps

-710 bps

-712 bps

-790 bps

-811 bps

-1,044 bps

-2,997 bps

-5,319 bps

eClerx Services

NMDC

Phoenix Mills

DLF

Dr. Reddy's Lab


Orient Paper

Jaiprakash Power Ventures

Ranbaxy Labs

Sesa Goa


Top 5 Sectors

Net Sales Grow th

14.8%

14.9%

19.6%

36.1%

117.5%

Consumers

IT Services

Power

Auto Ancillaries

Real Estate

Ebitda Growth

17.3%

34.4%

35.6%

37.5%

82.9%

Consumers

Auto Ancillaries

Paper

Power

Real Estate

PAT Growth

18.1%

18.5%

22.0%

122.1%

1915.3%

Consumers

Media &Entertainment

Auto Ancillaries

Real Estate

Paper


34 bps

360 bps

380 bps

-15 bps

-12 bps

Engineering &Capital Goods

Auto Ancillaries

Consumers

Paper

Power


Bottom 5 Sectors

Net Sales Growth

9.2%

8.2%

7.2%

6.2%

-1.4%

Telecommunications

Cement

Agri Input & Chemicals

Engineering & CapitalGoods

Metals & Mining

Ebitda Growth

4.7%

1.4%

1.0%

-4.6%

-5.8%

Automobiles

Agri Input &Chemicals

Cement

Metals & Mining

Pharmaceuticals

PAT Growth

-3.3%

-4.9%

-16.7%

-20.2%

-23.6%

Metals & Mining

Automobiles

Pharmaceuticals

Construction

Telecommunications


-125 bps

-131 bps

-135 bps

-406 bps

-649 bps

Media & Entertainment

IT Services

Cement

Pharmaceuticals

Real Estate


Frequency Distribution (No. of Companies)

Net Sales Grow th

53

60

16

6

0

10

20

30

40

50

60

70

0%-10% 10%-25% 25%-50% >50%

PAT Grow th

41

22

31

13

18

0

5

10

15

20

25

30

35

40

45

<0% 0%-15% 15%-30% 30%-50% >50%

EBITDA Grow th

31

39

2725

11

0

5

10

15

20

25

30

35

40

45

<0% 0%-15% 15%-30% 30%-50% >50%


Frequency Distribution (Percentage)

Net Sales Growth

39%

45%

12%4%

0%-10% 10%-25% 25%-50% >50%

PAT Growth

33%

18%25%

10%

14%

<0% 0%-15% 15%-30% 30%-50% >50%

EBITDA Growth

23%

30%20%

19%

8%

<0% 0%-15% 15%-30% 30%-50% >50%


Sectoral Analysis of Q3FY13 Results


Agri Input and Chemicals

n On an aggregate basis, we expect our universe to report topline growth of 7%YoY driven predominantly by increase

in chemicals revenues by 18%YoY. APAT is expected to increase by 6%YoY.

n Fertiliser revenues are expected to remain flat. Complex fertiliser consumption dropped by 31%YoY during

Oct/Nov’12 however Urea sales increased by 16%. Aggregate fertiliser margins for our universe are expected to decline by 170bpsYoY to 8.7%

n On the chemicals side, we expect chemicals revenues for our universe to increase by 18%YoY however EBIT is expected to increase only by 10%YoY due to pressure on margins. Aggregate chemicals EBIT margin is expected to

decline by 130bpsYoY to 17.3%. Deepak’s chemicals margins are likely to be impacted (down by 700bpsYoY to 17.0%) due to high ammonia & propylene costs. GSFC’s margins are expected to decline (860bpsYoY) due to decline in

caprolactam-benzene spreads. GNFC’s & Tata Chemicals chemicals margins are expected to improve 100bpsYoY.

n Agrochemicals consumption remained weak during H1FY13, however Q3FY13 has witnessed improved

agrochemicals usage across different crops. Rabi season has panned out well for agrochemicals consumption & we are likely to witness volume growth during this quarter.

n We remain optimistic on the outlook for agri-input companies. Dhanuka Agritech, Coromandel Int’l, Tata Chemicals remain our top picks. Dhanuka with strong revenue visibility & sustainable RoCE/RoE of 30%/ 26% is trading at 30%

discount to peers. Complex fertiliser consumption remains under pressure, however Coromandel is likely to witness strong earnings growth during FY14 driven by increase in capacity, leadership position, strong focus on non-subsidy

business, improvement in volumes.



Name Dec’12E Sep’12 Dec’11 % Chg YoY

% Chg QoQ Comments

Chambal Fertilisers

CMP(Rs) 70 Net Sales (Rs mn) 21,266 23,407 17,966 18.4% -9.1%

Mkt Cap (Rs bn) 29 EBITDA (Rs mn) 2,056 1,951 2,039 0.8% 5.4%

Reco Accumulate EBITDA Margin (%) 9.7 8.3 11.4 -168 bps 133 bps

Target Price (Rs) 98 PAT (Rs mn) 932 896 862 8.2% 4.0%

% Upside 40% EPS (Rs) 2.2 2.2 2.1 8.2% 4.0%

We expect revenues to increase by 18%YoY to Rs 21.2 bn. We expect manufactured fertilizer revenues to increase by 20%YoY to Rs 9.7bn while we expect trading revenues to increase by 25%YoY to Rs 9.9bn. We expect textiles segment to report revenue growth of 10%. We expect company to report EBITDA of Rs 2.1bn, flatYoY with margins of 9.7%. We expect APAT to increase by 8%YoY to Rs 932mn and expect company to report AEPS of Rs 2.2

Coromandel International

CMP(Rs) 261 Net Sales (Rs mn) 20,213 25,678 25,497 -20.7% -21.3%

Mkt Cap (Rs bn) 74 EBITDA (Rs mn) 1,920 2,374 2,335 -17.8% -19.1%

Reco Accumulate EBITDA Margin (%) 9.5 9.2 9.2 34 bps 26 bps

Target Price (Rs) 340 PAT (Rs mn) 1,044 1,532 1,472 -29.1% -31.9%

% Upside 30% EPS (Rs) 3.7 5.5 5.2 -29.1% -31.9%

We expect revenues to decline by 21%YoY to Rs 20.2bn. We expect total fertiliser volumes to decline by 38%YoY to 525,000 mt. Complex fertiliser volumes continue to remain under pressure due to high prices & higher level of inventory in the system. We expect company to report EBITDA of Rs. 1.9bn, -18%YoY with margins of 9.5%. We expect company to report PBT of Rs 1.5bn, -31%YoY. We expect company to report APAT of Rs 1.0bn, -30%YoY with AEPS of Rs 3.7

Deepak Fertilisers


Mkt Cap (Rs bn) 11 EBITDA (Rs mn) 977 803 1,149 -14.9% 21.7%

Reco Buy EBITDA Margin (%) 15.7 11.6 19.1 -335 bps 417 bps

Target Price (Rs) 172 PAT (Rs mn) 509 406 637 -20.0% 25.3%

% Upside 32% EPS (Rs) 5.8 4.6 7.2 -20.0% 25.3%

We expect net revenues to increase by 3%YoY to Rs 6.2bn. We expect chemicals revenues to increase by 20%YoY to Rs 4.1bn while we expect fertiliser revenues to decline by 17%YoY to Rs 2.3bn. Manufactured fertilizer revenues are expected to decline by 21%YoY to Rs 985mn while traded fertiliser revenues are expected to decline by 14%YoY to Rs 1.3bn. Company is likely to report EBITDA of Rs 977mn, -15%YoY with margins of 15.7%. We expect company to report APAT of Rs 509mn, -20%YoY with EPS of Rs 5.8




% Chg QoQ Comments

Dhanuka Agritech


Mkt Cap (Rs bn) 7 EBITDA (Rs mn) 184 306 127 45.4% -39.9%

Reco Buy EBITDA Margin (%) 14.0 14.8 11.5 255 bps -83 bps

Target Price (Rs) 150 PAT (Rs mn) 129 237 78 65.1% -45.4%

% Upside 15% EPS (Rs) 2.6 4.7 1.6 65.1% -45.4%

We expect revenues to increase by 18%YoY to Rs 1.3bn. Expect company to report EBITDA of Rs 184mn, 45%YoY. EBITDA margins are likely to improve by 250bpsYoY to 14.0%. We expect Dhanuka to report PBT of Rs 166mn, 70%YoY with PAT of Rs 129mn, 65%YoY. EPS for the quarter is likely to be around Rs 2.6

GNFC


Mkt Cap (Rs bn) 13 EBITDA (Rs mn) 1,457 1,453 1,573 -7.4% 0.3%



% Upside 27% EPS (Rs) 4.8 4.7 5.5 -13.6% 2.8%

We estimate net revenues to increase by 1.5%YoY to Rs 10.6 bn. We expect fertiliser revenues to decline by 10%YoY to Rs 5.8bn while we expect chemical segment revenues to increase by 18%YoY to Rs 4.6bn. We expect fertiliser segment to report EBIT of Rs 173 mn while chemical segment is expected to report EBIT of Rs 920mn. We expect company to report EBITDA of Rs 1.5bn, -7%YoY with margins of 13.8%. Company is likely to report PAT of Rs 744mn, -14%YoY with EPS of Rs 4.8

GSFC

CMP(Rs) 72 Net Sales (Rs mn) 14,452 14,160 13,000 11.2% 2.1%


Reco Hold EBITDA Margin (%) 14.0 14.3 19.8 -585 bps -33 bps


% Upside -3% EPS (Rs) 3.7 3.8 4.3 -14.6% -2.2%

We expect revenues to increase by 11%YoY to Rs 14.5 bn. We expect fertiliser revenues to increase by 14%YoY to Rs 10.2bn due to higher trading while we expect chemicals revenues to increase by 5%YoY to Rs 4.2bn. Caprolactam-benzene spreads declined further to $990/mt in Q3FY13 compared to $1130/mt in Q2FY13. We expect company to report EBITDA of Rs 2.0bn,-22%YoY with margins of 14.0%. Company is likely to report APAT of Rs 1.5bn, -14%YoY with margins of 10.2%. EPS for the quarter is likely to be around Rs 3.7




% Chg QoQ Comments

Rallis India



Reco Accumulate EBITDA Margin (%) 16.1 19.9 17.0 -90 bps -381 bps


% Upside 1% EPS (Rs) 1.8 3.0 1.6 14.0% -40.2%

We estimate consol revenue growth of 17%YoY to Rs 3.8 bn. We expect standalone revenues to increase by 16%YoY to Rs 3.6bn. We expect company to report standalone EBITDA of Rs 630mn, 11%YoY with margins of 17.5%. Company is likely to report consol EBITDA of Rs 611mn, 11%YoY with margins of 16.1%. We expect company to report consol APAT of Rs 353mn, 14%YoY with EPS of Rs 1.8

Tata Chemicals



Reco Buy EBITDA Margin (%) 14.9 14.8 14.6 27 bps 1 bps

Target Price (Rs) 400 PAT (Rs mn) 2,968 2,327 2,277 30.3% 27.6%

% Upside 8% EPS (Rs) 11.6 9.1 8.9 30.3% 27.6%

We expect standalone revenues to increase by 15%YoY to Rs 26.9 bn, and APAT of Rs 2.0 bn, 32%YoY. We expect increase in revenues for BMGL by 16%YoY to Rs 6.1 bn. IMACID is likely to report revenues of Rs 1.8bn, 2%YoY while we expect revenues for TCNA to increase by 20%YoY to Rs 6.7 bn. We estimate consolidated revenues to increase by 18%YoY to Rs 45.1 bn, Company is likely to report consol EBITDA of Rs 6.7bn, 20%YoY with margins of 14.9%. APAT is likely to be around Rs 3.0bn, 30%YoY with EPS of Rs 11.6

United Phosphorus





% Upside 24% EPS (Rs) 3.8 2.7 2.5 51.1% 39.7%

We expect consol revenue growth of 11%YoY to Rs 21.4 bn. Indian revenues are expected to increase by 8%YoY to Rs 4.1bn while North American revenues are expected to remain flat at Rs 3.6bn. Europe is likely to report revenue growth of 10%YoY while RoW revenues are expected to increase by 15%YoY. Company is likely to report EBITDA of Rs 3.7bn, 7%YoY with margins of 17.5%. We expect company to report APAT of Rs 1.7bn, 51%YoY with EPS of Rs 3.8


Automobiles

n We expect our OEM automobile universe to report a modest 11%YoY/ 12% QoQ growth in sales to Rs 873 bn owing a

late festive season even as overall volume growth trajectory remains lacklustre

n Adjusted EBITDA at Rs 110.9 bn is expected to grow just 5%YoY weighed down by relatively higher input costs.

Sequentially however, EBITDA is expected to increase 15% from the benefits of softer commodity prices and

operating leverage.

n Adjusted EBIDTA margins are likely to decline 80bpsYoY but increase 30 bps QoQ to 12.7%. Companies which we

expect to report significant QoQ improvement in margins are MSIL (+170 bps), BJAUT (+100 bps) and HMCL (+60

bps). Poor CV volumes are likely to lead to a significant QoQ margin drop for AL (-410 bps).

n Adjusted net profits are likely to decline 5%YoY but improve 12% QoQ to Rs 58 bn.

n To get a better sense of the domestic demand environment, if we consider only standalone business of TTMT in

calculation of aggregates, then overall auto universe net sales growth moderates to Rs 509 bn (9%YoY/8% QoQ). Adj.

EBITDA is expected to increase 13% QoQ (8%YoY) to Rs 51.2 bn. Adj. PAT is expected to increase 4%YoY (-21% QoQ)

to Rs 28.6 bn

n Key candidates for positive surprises in the results this quarter are MM & HMCL in our view, whereas CV plays AL,

EIM and TTMT (STDL) could surprise on the negative side

n We remain cautious on OEM demand recovery and believe macro-recovery plays (AL, EIM, MSIL) are already

discounting a strong recovery in FY14. We prefer bottom-up ideas and maintain Buy on HMCL, EXID, AMRJ, MSS and

Accumulate on MM, TTMT


Automobiles


% Chg QoQ Comments

Ashok Leyland




Target Price (Rs) 28 PAT (Rs mn) -400 1,426 669 n.a. n.a.

% Upside 5% EPS (Rs) -0.2 0.5 0.3 n.a. n.a.

AL performance to remain weak due to a steep decline of 29%YoY/ 31% QoQ in M&HCV volumes. EBITDA margins to decline 410 bps QoQ led by poor operating leverage and lower production from Pantnagar. Key things to watch out for (1) demand outlook for FY14 (2) working capital debt and (3) Pantnagar volumes

Bajaj Auto

CMP(Rs) 2,210 Net Sales (Rs mn) 54,981 49,724 49,859 10.3% 10.6%


Reco Reduce EBITDA Margin (%) 19.4 18.4 19.7 -32 bps 101 bps

Target Price (Rs) 2,100 PAT (Rs mn) 8,233 7,407 8,364 -1.6% 11.2%

% Upside -5% EPS (Rs) 28.5 25.6 28.9 -1.6% 11.2%

BJAUT to benefit from 5%YoY/7.5% QoQ growth in volumes and a better product mix. Margins to improve 100 bps QoQ due to higher share of 3W, pricing action and favorable currency. Key things to watch out for (1) exports/dom. demand outlook (2) new launch plan (3) currency hedges and (4) raw material contracts

Eicher Motors



Reco Reduce EBITDA Margin (%) 8.3 7.5 9.8 -147 bps 77 bps

Target Price (Rs) 2,400 PAT (Rs mn) 1,018 660 854 19.1% 54.2%

% Upside -16% EPS (Rs) 37.7 24.4 31.6 19.1% 54.2%

EIM to report modest growth driven by volume performance. EBIDTA margins to be lower 150 bpsYoY as pressure on CV sales continues – though we expect a slight improvement QoQ. Key things to watch out for (1) CV demand outlook (2) discounting levels in trucks


Automobiles


% Chg QoQ Comments

Hero MotoCorp




Target Price (Rs) 2,350 PAT (Rs mn) 6,007 4,406 6,130 -2.0% 36.3%

% Upside 23% EPS (Rs) 30.1 22.1 30.7 -2.0% 36.3%

Expect HMCL earnings to benefit from 18% QoQ (-1%YoY) growth in vols and favorable JPY/INR currency. Margins to expand 60 bps QoQ due to favorable forex and pricing action. Key things to watch out for (1) demand outlook (2) new launch plan and (3) export ramp up

M&M




Target Price (Rs) 1,100 PAT (Rs mn) 8,411 9,018 6,622 27.0% -6.7%

% Upside 15% EPS (Rs) 13.7 14.6 10.8 27.0% -6.7%

Expect strong results driven by 14%YoY/11% QoQ increase in volumes. Adjusted EBITDA margins to improve by 10 bps QoQ due to better product mix (higher share of tractors). Expect production at 100% subsidiary MVML at 50,000 units and EBITDA of Rs 1.8 bn. Results not comparableYoY due to impact of MADPL merger from Q4. Key things to watch out for (1) tractor demand outlook (2) new launch plan and (3) raw material contracts

Maruti Suzuki



Reco Hold EBITDA Margin (%) 7.8 6.1 5.3 250 bps 167 bps

Target Price (Rs) 1,700 PAT (Rs mn) 5,016 2,274 2,056 143.9% 120.5%

% Upside 7% EPS (Rs) 17.4 7.9 7.1 143.9% 120.5%

Post a period of production hit due to various issues, expect normalized earnings driven by volume growth of 26%YoY/31% QoQ (on a low base). Adj. EBITDA margins to expand 170 bps QoQ (250 bpsYoY) led by operating leverage and normalized mix. Key things to watch out for (1) Currency hedges (2) petrol demand outlook and (3) new launch plan


Automobiles


% Chg QoQ Comments

Tata Motors




Target Price (Rs) 350 PAT (Rs mn) 29,180 26,092 35,780 -18% 12%

% Upside 10% EPS (Rs) 8.8 7.9 10.8 -18% 12%

Standalone business performance to remain lackluster while JLR to support growth. Expect JLR EBITDA margins to improve 20 bps sequentially at 15% led by operating leverage benefits. Standalone business margins to decline sharply by 130 bpsYoY/100 bps QoQ due to poor volumes. Key things to watch for (1) JLR – RR ramp up and new launch pipeline (2) MHCV/LCV demand outlook/ discounts and (3) impact of currency swings

TVS Motor



Reco Hold EBITDA Margin (%) 6.6 6.0 6.9 -34 bps 61 bps


% Upside -6% EPS (Rs) 1.3 1.0 1.2 6.7% 33.4%

TVSL performance to recover led by vol. growth of 6.7% QoQ (-2%YoY) and better product mix. EBITDA margins to improve 60 bps QoQ to 6.6% due to higher share of 3-W and operating leverage benefits. Key things to watch out for (1) investment in subsidiaries (2) performance of Phoenix and (3) new launch plan


Auto Ancillaries


% Chg QoQ Comments

Amara Raja


Mkt Cap (Rs bn) 45 EBITDA (Rs mn) 1,103 1,180 1,063 3.7% -6.5%

Reco Buy EBITDA Margin (%) 15.0 16.4 17.3 -235 bps -143 bps


% Upside 23% EPS (Rs) 8.3 9.3 7.7 7.3% -11.0%

We expect AMRJ to continue with the healthy revenue growth momentum as in the previous quarters. However, margins are likely to decline 140 bps QoQ due to ~10%QoQ increase in global lead prices while pricing action came in only towards the end of the quarter. Key things to watch out for are OEM/replacement mix, capacity ramp-up plans and replacement demand outlook.

Apollo Tyres





% Upside 7% EPS (Rs) 3.2 3.0 2.5 27.4% 6.2%

While we expect tonnage growth in domestic business to remain subdued, however, profitability should benefit from moderation in rubber prices and winter tyre sale in Europe. Expect tonnage growth of 3%YoY (flat QoQ) in consolidated business and conso. margins to improve 60 bps QoQ to 11.5%. Key things to watch out for are tonnage growth, OEM/replacement mix, subsidiary performance and capacity/QIP plans

CEBBCO





% Upside 39% EPS (Rs) 2.6 3.0 2.0 28.9% -11.0%

Healthy earning momentum to continue driven by continued preference seen for FBVs from the OEMs. We expect EBITDA margins to decline 180 bps QoQ due to mix shifting in favour of OEMs as against replacement in the previous quarter. Key things to watch out for are replacement FBV demand outlook, railway tendering process and capacity expansion plans


Auto Ancillaries


% Chg QoQ Comments

Exide Industries





% Upside 30% EPS (Rs) 1.7 1.4 1.4 19.4% 17.3%

We expect EXID to continue its >20%YoY revenue growth driven by strong replacement demand and slight gain in market share. Margins to expand 140 bps QoQ driven by price hike of ~5% taken in Oct. and a better mix. Key things to watch out for OEM/replacement mix, market share in 2W/4W, demand outlook.

Motherson Sumi



Reco Buy EBITDA Margin (%) 7.0 7.0 6.9 10 bps -

Target Price (Rs) 215 PAT (Rs mn) 1,306 700 1,030 26.8% 86.5%

% Upside 8% EPS (Rs) 2.2 1.2 1.8 25.3% 86.5%

MSS performance to benefit from better PV sales QoQ for domestic business and higher utilization in SMP/SMR. Reported results to be impacted by forex translation losses due to adverse forex. We expect Adjusted EBITDA margins to remain flat QoQ. Expect SMP margins to remain at ~4%. Key things to look out for are revenue growth in the domestic market and margins for the subsidiaries.


Banking and Financial Services

n NII growth for our banking universe is expected to come in modest at 8%YoY (10%YoY in Q2FY13) primarily on back of

sluggish 3.3%YoY growth in NII for our PSU space. Margin pressures (on account of full impact of base rate reduction

implemented in Q2 and relatively higher share of bulk deposits), 161bpsYoY contraction in LDR and 13.5%YoY growth in

loan portfolio vs 16%YoY on a systemic level will weigh on NII performance for our the PSU space. NII growth for private

banks is expected to remain healthy at 22%YoY aided by 16bpsYoY improvement in NIM to 3.23%.

n Dismal show on fee income front (+4%YoY for our coverage universe) would be off-set by higher trading gains +33%YoY

(ex-SBI) thereby resulting in 13.5%YoY growth in non-int income. SBI had trading losses to the tune of Rs10.9bn in

Q3FY12. Also, with stable opex, operating profit growth is expected to remain modest at 11%YoY / 5% qoq.

n NPA pressure will persist with PSU space expected to report 18%YoY growth in gross slippages to 2.5% of loans. The

larger challenge however remains towards recovery / up-gradations from the same. We suspect PSU banks to resort to

more of write-off / OTS towards problematic loans. We are factoring 68bps of credit cost for our PSU universe. With well

controlled net slippages, we are factoring 58bps of credit cost for our private sector universe.

n Favorable yield movement (unlike Q3FY12 which saw huge MTM provisioning) will be off-set by increased levels of NPA /

standard asset provisioning due to a) migration of few lumpy accounts into lower buckets b) improving incremental PCR

and c) 75bps of additional provisioning on standard restructuring assets. Resultant, we expect our universe to report

12%YoY growth in net profit on back of 6%YoY growth in net profit for PSU space and 23%YoY growth in private space.

Key things to watch: Restructuring, net slippages and provisions there-off

n Our top picks for the quarterly results – HDFC Bank, ICICI Bank and United bank in banking space. Mahindra Finance and

CRISIL are our top picks in NBFC space




% Chg QoQ Comments

Allahabad Bank

CMP(Rs) 184 NII (Rs mn) 13,649 11,743 13,805 -1.1% 16.2%

Mkt Cap (Rs bn) 92 Op. Profit (Rs mn) 9,339 8,023 10,300 -9.3% 16.4%

Reco Hold NIM (%) 3.0 2.7 0.0 302 bps 34 bps

Target Price (Rs) 145 PAT (Rs mn) 3,021 2,342 5,604 -46.1% 29.0%

% Upside -21% EPS (Rs) 6.0 4.7 11.8 -48.7% 29.0%

NII growth is expected to decline by -1%YoY on back of 45bpsYoY contraction in NIMs and 14.8%YoY growth in loan portfolio. NIMs at 2.9% (adjusted for int. reversals of Rs1.7bn on loans in the previous quarter) are expected to remain flat qoq. Slippages are expected to remain higher at Rs10bn (equivalent to average for past 4-quarters) and with higher provisioning requirements and muted non-int income, net profit is expected to decline 46%YoY. Key things to watch out: Slippages, margin outlook and restructuring

Andhra Bank

CMP(Rs) 129 NII (Rs mn) 9,365 8,937 9,839 -4.8% 4.8%


Reco Hold NIM (%) 2.9 2.8 3.4 -56 bps 8 bps


% Upside -19% EPS (Rs) 5.1 5.8 5.4 -6.2% -12.7%

Andhra Bank to report -5% / -6%YoY decline in NII / net profit on back of 56bpsYoY contraction in NIM to 2.9%, 200bps+YoY decline in LDR to 78% and higher provisioning requirement (credit cost factored at 65bps vs 57bps in Q2). Adjusting for one-off item in Q2, Q3FY13 NIM’s at 2.9% would decline 10bps qoq. Slippages run-rate may ease to Rs5bn and would be off-set by recovery / up-gradation. Key things to watch –Share of bulk deposits, recoveries and restructured portfolio.

Axis Bank

CMP(Rs) 1,373 NII (Rs mn) 24,456 23,269 21,403 14.3% 5.1%

Mkt Cap (Rs bn) 586 Op. Profit (Rs mn) 23,945 21,783 20,592 16.3% 9.9%

Reco Reduce NIM (%) 3.2 3.1 3.3 -11 bps 4 bps


% Upside -24% EPS (Rs) 30.7 27.1 26.7 14.9% 13.3%

Expect 14%YoY growth in NII driven by 22%YoY growth in loan portfolio. On a qoq basis, NII growth at 5% will be driven by 100bps improvement in LDR and NIM at 3.2%. Trading gains at Rs2bn (on a favorable base) and 9% qoq growth in fee income will be used to off-set against provisioning on NPA + restructured portfolio, thereby resulting in net profit growth of 15%YoY / 13% qoq. Key things to watch: Trend in fee income and stressed asset addition.




% Chg QoQ Comments

Bank of Baroda

CMP(Rs) 878 NII (Rs mn) 29,217 28,623 26,555 10.0% 2.1%


Reco Hold NIM (%) 2.4 2.5 2.7 -25 bps -5 bps


% Upside -9% EPS (Rs) 29.5 31.8 33.1 -10.7% -7.1%

BOB to witness 10%YoY / 2% qoq growth in NII on back of 16%YoY growth in domestic loans. Overall margins at 2.4% are expected to decline 5bps qoq driven by domestic NIMs. Slippages run-rate at Rs12bn may ease vs Rs13.5bn (avg) for past 3-quarters. Higher trading / forex gains in Q3FY12 are unlikely to repeat in Q3FY13. The same however will be off-set by no investment depreciation in Q3FY13. Resultant, net profit at Rs12.2bn may decline by 5%YoY. Key things to watch out: Slippages and restructured portfolio.

Bank of India

CMP(Rs) 364 NII (Rs mn) 22,079 21,960 20,674 6.8% 0.5%

Mkt Cap (Rs bn) 209 Op. Profit (Rs mn) 17,522 18,541 17,318 1.2% -5.5%

Reco Reduce NIM (%) 2.2 2.2 2.3 -11 bps -1 bps


% Upside -34% EPS (Rs) 12.6 5.3 15.0 -16.0% 139.3%

Bank of India to report modest 6.8%YoY growth in NII on back of 14.3%YoY growth in loan portfolio and 160bpsYoY improvement in overall LDR to 77%. Margins at 2.2% will remain flat qoq. We are factoring in slippages of Rs13bn vs Rs13.5bn (avg) for past 4-quarters. Higher NPA + restructuring will be offset against possible investment gains. Net profit at Rs7.2bn would be flat you. Key things to watch – NIM, slippages and movement in restructured.

Canara Bank

CMP(Rs) 520 NII (Rs mn) 20,363 19,568 19,186 6.1% 4.1%




% Upside -27% EPS (Rs) 18.3 14.9 22.5 -18.8% 22.6%

Expect mere 6.1%YoY growth in NII led by flat margins at 2.1% and modest 2%YoY loan growth. Higher trading gains (Rs1.5bn from CARE Ratings offer for sale) will be used to off-set increased cost thereby resulting in flat operating profitYoY. Factoring in slippages at Rs12bn. Unlike previous period which had higher investment depreciation, Q3FY13 will see increased provisioning towards NPA + restructuring, Key things to watch: PCR, slippages and investment reversals.




% Chg QoQ Comments

Corporation Bank

CMP(Rs) 486 NII (Rs mn) 8,254 8,032 8,616 -4.2% 2.8%

Mkt Cap (Rs bn) 72 Op. Profit (Rs mn) 6,685 6,858 8,257 -19.0% -2.5%



% Upside -9% EPS (Rs) 22.8 27.4 27.1 -16.0% -16.8%

NII to decline by 4%YoY led by 37bpsYoY decline in NIM to 2.0% and muted 9.4%YoY growth in loans. Additionally with lower non-int income and stable costs, operating profit at Rs6.7bn would decline by 19%YoY. While the slippages run-rate may ease to Rs3bn, larger question remains on ability towards recovery. Net profit to decline 16%YoY / 17% qoq. Key things to watch: Share of bulk deposit, slippages and recovery / up-gradations

Federal Bank

CMP(Rs) 522 NII (Rs mn) 5,283 5,059 5,280 0.1% 4.4%




% Upside -4% EPS (Rs) 12.7 12.6 11.8 7.6% 1.0%

Expect NII to remain flatYoY at Rs5.3bn due to high base. However expect advance growth to pick up with NIM’s largely flat at 3.3%. Provision could be higher on account of NAFED exposure. However with higher other income (gains from CARE Ratings offer for sale) net profit to grow by 10%yoy to Rs2.2bn. Key thing to watch out will be 1) slippages in the large corporate book and recoveries

HDFC Bank Ltd.

CMP(Rs) 668 NII (Rs mn) 39,048 37,317 31,160 25.3% 4.6%

Mkt Cap (Rs bn) 1,582 Op. Profit (Rs mn) 30,206 25,713 23,780 27.0% 17.5%



% Upside -7% EPS (Rs) 7.9 6.6 6.1 29.5% 19.8%

HDFC bank to report 25.3%YoY / 4.6% qoq growth in NII driven by 22.8%YoY / 3% qoq growth in advances and flat NIMs qoq. Asset quality woes remain limited and adequately provided for with PCR at 80%+. Key things to watch: CASA movement and loan mix.




% Chg QoQ Comments

ICICI Bank Ltd.

CMP(Rs) 1,182 NII (Rs mn) 34,318 33,712 27,120 26.5% 1.8%


Reco Hold NIM (%) 2.7 2.8 2.4 30 bps -4 bps


% Upside -7% EPS (Rs) 18.3 17.0 15.0 21.7% 7.6%

ICICI Bank to witness 27%YoY growth in NII led by 17.0% growth in advances and flat NIMs qoq at 2.7%. Domestic loan growth is expected to remain higher at 21%. Muted growth in fee income (+4%) will be offset against, higher trading gains resulting in 22%YoY growth in operating profit. We after factoring slippages at Rs11bn for Q3FY13 vs Rs12.2bn in Q2FY13. Key things to watch out: RoE improvement and international loan portfolio.

Punjab National Bank

CMP(Rs) 903 NII (Rs mn) 38,091 36,501 35,360 7.7% 4.4%




% Upside -32% EPS (Rs) 31.8 31.4 36.3 -12.4% 1.1%

NII growth to witness modest at 8%YoY / 4% qoq on back of 17%YoY / 4% qoq growth in loan portfolio and flat NIM qoq at 3.2%. Full impact of base rate reduction (implemented in Q2) will be off-set by reduction in share of wholesale deposits). NPA pressure to persist with credit cost in excess of 110bps. With lower non-int income and higher provisioning requirement, net profit at Rs10.7bn will decline 6%YoY. Key thins to watch out – recovery and up gradation, bulk deposit and restructuring pipeline.

South Indian Bank

CMP(Rs) 30 NII (Rs mn) 3,253 2,977 2,734 19.0% 9.3%




% Upside -17% EPS (Rs) 0.9 0.9 0.9 5.6% 4.7%

Expect NII growth of 19%YoY driven by 19% loan growth and 10bps expansion in NIM’s to 2.9%. As provision continue to remain higher on account of further provisions for NAFED account, PAT to grow by 21.7% to Rs1.24bn Key thing to watch out 1) Growth in gold loan portfolio and outlook on the same 2) slippages




% Chg QoQ Comments

State Bank of India

CMP(Rs) 2,468 NII (Rs mn) 115,795 109,738 114,659 1.0% 5.5%




% Upside -29% EPS (Rs) 64.0 54.5 51.4 24.5% 17.3%

While SBI’s reported net profit is expected to grow by 31.5%YoY, adjusted for trading losses in Q3FY12, net profit is expected to decline 8%YoY. Core operating matrix remains weak and is reflected from 2%YoY decline in core operating profit. Additionally, investment gains for Q3FY12 are unlike to repeat in the current quarter. We have are factored 15%YoY growth in loan portfolio, NIM at 3.2%, slippages at Rs75bn and credit cost at 52bps. Key things to watch: Slippages, margin performance and recoveries.

Union Bank of India

CMP(Rs) 275 NII (Rs mn) 19,007 18,502 17,809 6.7% 2.7%

Mkt Cap (Rs bn) 151 Op. Profit (Rs mn) 12,716 12,727 12,840 -1.0% -0.1%



% Upside -31% EPS (Rs) 9.5 8.4 3.1 205.8% 13.0%

UNBK NII to grow by a modest 7%yoy on back of 14%YoY growth in loan portfolio and flat NIM at 2.8%. With muted non-interest income, primarily lower trading gains, operating profit is expected to decline 1%YoY. One-off provisioning as seen in Q3FY12 (Others (Rs3.8bn) and investment depreciation (Rs730mn)), are unlikely in Q3FY13, resulting in 2xYoY rise in net profit. Key thing to watch out: net slippages and restructuring

United Bank of India

CMP(Rs) 84 NII (Rs mn) 6,317 6,058 6,676 -5.4% 4.3%


Reco Buy NIM (%) 2.4 2.3 3.0 -59 bps 5 bps


% Upside -10% EPS (Rs) 4.1 4.0 6.6 -37.9% 1.7%

Expect 5%YoY decline in NII due to modest 8%YoY growth in loan portfolio and near 50bpsYoY compression in margins to 2.4%. Even after factoring for slippages at Rs3.5bn vs Rs4.5bn in Q2FY13, mgmt’s intension of providing 70%+ on incremental NPAs provide us comfort. With improved recovery / upgradations, net slippages are expected to come in at Rs2bn vs Rs3.7bn in Q2FY13 resulting in credit cost at 87bps (annualized) bps vs 152bps in Q2FY12. We expect profit to growth by 1.7% qoq.




% Chg QoQ Comments

YES Bank

CMP(Rs) 498 NII (Rs mn) 5,789 5,242 4,276 35.4% 10.4%




% Upside -12% EPS (Rs) 9.8 8.6 7.2 34.7% 13.4%

Expect 35%YoY / 10% qoq growth in NII driven by 23%YoY growth in loan portfolio and 16bpsYoY improvement in NIM to 2.7%. Recent reduction in corporate yields will ease borrowing cost and with improving retail liability franchise, margins should remain comfortable at current levels. Asset quality concerns remain minimal. Key things to watch out: Media account exposure, migration to retail + SME franchise and margin performance.




% Chg QoQ Comments

Dewan Housing Finance

CMP(Rs) 221 NII (Rs mn) 1,574 1,546 1,237 27.3% 1.9%


Reco Accumulate NIM (%) 2.4 2.5 2.5 -17 bps -16 bps


% Upside 10% EPS (Rs) 7.8 7.3 7.2 8.9% 6.3%

Expect 27%YoY growth in NII led by 24% / 33% growth in disbursements / loan portfolio. Recent reduction in base rate, easing corporate yields and borrowings under ECB route will help ease borrowings costs. Asset quality pressures remain lower.

Key things to watch out: Securitization and margin performance

HDFC Ltd

CMP(Rs) 823 NII (Rs mn) 13,559 12,941 11,557 17.3% 4.8%

Mkt Cap (Rs bn) 1,269 Op. Profit (Rs mn) 14,549 14,940 12,603 15.4% -2.6%


Target Price (Rs) 700 PAT (Rs mn) 10,618 10,811 9,162 15.9% -1.8%

% Upside -15% EPS (Rs) 6.9 7.0 6.2 11.0% -1.8%

HDFC to witness 17%YoY growth in NII aided by 19.5%YoYgrowth in loan portfolio and 6qoq improvement in NIM to 3%. With lower non-int income, primarily being dividend income, net profit is expected to grow by mere 16%YoY. However, adjusted for the same, net profit would grow by 18%YoY. Key things to watch: Growth in developer portfolio and clarity over securitization agreement with HDFC Bank.

LIC Housing Finance

CMP(Rs) 292 NII (Rs mn) 3,755 3,535 3,258 15.3% 6.2%


Reco Accumulate NIM (%) 2.1 2.1 2.3 -15 bps 2 bps


% Upside -4% EPS (Rs) 0.0 4.8 5.2 -100.0% -100.0%

LICHF to witness 15%YoY growth in NII aided by 24% growth in loan portfolio and 10bps qoq improvement in spreads. Teaser loan re-pricing to the tune of Rs25-30bn in Q3. Recent easing in term loan rates / corporate yields should also aid margin improvement in Q4FY13 / H1FY14. While growth in operating profit will remain reasonable at 12.5%YoY, provisioning requirement will drag profit growth lower. Key things: developers’ loan portfolio and margin performance.




% Chg QoQ Comments

Mahindra Finance

CMP(Rs) 1,203 NII (Rs mn) 5,602 5,259 4,228 32.5% 6.5%


Reco Hold NIM (%) 9.0 9.2 9.1 -8 bps -22 bps


% Upside -22% EPS (Rs) 20.2 18.3 15.1 34.2% 10.9%

MMFSL likely to report 32% growth in NII led by 32.3% growth in AUM’s, while NIM to contract by 20bpsYoY to 9%%. Net profit to grow by 35%yoy to Rs2.1bn. Key things to watch – 1) Growth in CV and car loans 2) NIMs

Manappuram Finance

CMP(Rs) 44 NII (Rs mn) 3,218 3,206 4,300 -25.2% 0.4%


Reco Reduce NIM (%) 9.6 9.8 13.0 -338 bps -25 bps


% Upside -31% EPS (Rs) 1.3 1.3 1.9 -30.4% 4.3%

MAFGIL NII to remain flat qoq as NIM’s to contract further by 25bps even as AUM to grow by 7%qoq. As the company shift to lower interest rate products in line with lower LTV, margin will remain under pressure. However with lower opex net profit to grow by 4.3%qoq to Rs1.12bn. Key things to watch out. 1) proportion of the book at higher yields 2) impact on margins as the company shifts to lower interest rate pdts




% Chg QoQ Comments

CRISIL


Mkt Cap (Rs bn) 74 EBITDA (Rs mn) 1,004 977 729 37.7% 2.8%

Reco Accumulate EBITDA Margin (%) 35.1 36.1 33.5 155 bps -103 bps

Target Price (Rs) 1,050 PAT (Rs mn) 698 645 498 40.1% 8.2%

% Upside 0% EPS (Rs) 10.0 9.2 6.9 44.5% 8.2%

CRISIL’s operating revenues to grow by 31.6%YoY largely led by consolidation of Coalition (acquisition) numbers and moderate growth in rating business OPMs to expand by 155bpsYoY to 35.1%. Key things to look for commentary on bond issuances and traction in research business.

ICRA

CMP(Rs) 1,447 Net Sales (Rs mn) 676 624 542 24.7% 8.3%

Mkt Cap (Rs bn) 14 EBITDA (Rs mn) 204 162 211 -3.7% 25.4%


Target Price (Rs) 1,300 PAT (Rs mn) 148 110 177 -16.1% 35.3%

% Upside -10% EPS (Rs) 14.8 11.0 17.7 -16.4% 35.3%

We expect ICRA to report a 24.7% growth in operating revenues primarily driven by consolidation of BPA Tech even as rating revenue expected to grow at just 3%yoy. Operating margins to decline by 840bpsYoY to 30.1% led by high opex structure of BPA Tech. However net profit to decline by 16.4%yoy to Rs148mn due to unfavourable base. Key thing to watch out –Activity in bond market and BPA tech performance.


Cement

n Cement volumes growth for the current quarter remains subdued as reflected by 2.1%YoY growth (7.4% qoq) for

companies under our coverage. Cement price movement in 3Q13 was unusual with price declines witnessed in Nov

as well as December led by poor overall demand pick up and poor availability of construction materials (sand &

bricks) in Northern and central region impacting construction activities. This has lead to 3QFY13 avg cement prices

declining by 3.6% sequentially to Rs289/bag with sharp declines of ~4.5% witnessed in western and northern regions

n Companies under our coverage are expected to post realization growth of 5.8%YoY (-2.5% qoq to Rs4472/t) leading to

revenue growth of 8.1%YoY. Cost/t is expected to increase 2.3% qoq. Though the complete impact of 5-7% increase

in fuel costs and levy of service tax on rail freight is likely to be witnessed this quarter, we expect the same to be

partially get negated by 15%YoY decline in international coal prices

n EBITDA/t at Rs814/t is expected to decline 1.9%YoY and 19.2% qoq. Overall EBIDTA is expected to grow 1.2%YoY but

decline 11% qoq led by lower realizations Consequently, we estimate APAT (for cement cos under our coverage) to

grow by 4.1%YoY but decline 15% qoq

n Prefer ACC as current high valuations for companies in the sector have left little room for further outperformance for

stocks like UTCEM and Ambuja. Remain positive on Grasim (led by structural change in VSF business) amongst large

caps while in mid caps we prefer Shree Cements and Madras Cements (strong volume growth and improving cost

structure led by better energy efficiencies)


Cement


% Chg QoQ Comments

ACC




Target Price (Rs) 1,510 PAT (Rs mn) 2,212 2,487 2,425 -8.8% -11.1%

% Upside 7% EPS (Rs) 11.8 13.2 12.9 -8.8% -11.1%

Volume growth is expected to remain flattish at 0.5%YoY while a unusual cement price trend in Nov and Dec is expected to result in a 2.8% qoq dip in cement realisation. Overall we expect 5.3%YoY growth in revenues. Variable costs for ACC are expected to remain under control with no increase qoq. Resultant EBITDA/t at Rs645.

ACL



Reco Hold EBITDA Margin (%) 20.2 26.1 18.5 177 bps -583 bps


% Upside 3% EPS (Rs) 2.0 2.2 1.8 15.1% -8.4%

We expect volumes to grow at 0.6%YoY at 5.73mnt while realizations are also expected to decline by 3.2% qoq thereby resulting in revenue growth of 7.9%YoY for Q4CY12. On the cost front we expect the same trends in freight costs as ACC (due to full impact of diesel hike) and the fall in international coal prices resulting in lower P&F costs (-6.4% qoq) negating the impact. Resultant EBITDA/t at Rs887/t is expected to decline by 25% qoq.

India Cement




Target Price (Rs) 103 PAT (Rs mn) 149 391 563 -73.6% -61.9%

% Upside 14% EPS (Rs) 0.5 1.3 1.8 -73.6% -61.9%

Net revenues are expected to grow by 7.3%YoY to Rs10.1bn. Cement revenue at Rs9.9bn are expected to improve by 6.7%YoY but decline 9.6% qoq led by lower realizations (+1.6%YoY and -2.3% qoq). Volumes are expected to decline 7.5% qoq. On the cost front softening prices of international coal is expected to partially negate the impact of increase in freight expenses. Consequently EBITDA/t is expected to decline by 22%YoY and 18% qoq to Rs673/t.


Cement


% Chg QoQ Comments

Madras Cement




Target Price (Rs) 245 PAT (Rs mn) 492 1,329 768 -36.0% -63.0%

% Upside 2% EPS (Rs) 2.1 5.6 3.2 -36.0% -63.0%

MCL’s revenues are expected to grow by 15.2%YoY to Rs8.54bn with cement revenue growth of 15.3%YoY. Net realizations are expected to improve by just 8%YoY (Rs4523/t) but decline sequentially by 2.3% led by price volatility witnessed in the sate of Andhra Pradesh. EBITDA/t is expected to decline 13%yoy to Rs1009/t.

Orient Paper





% Upside 15% EPS (Rs) 0.7 1.0 2.5 -71.8% -29.6%

OPIL’s net revenues are estimated to grow 2.4%YoY to Rs6.03bn. Cement volumes are expected to decline by 2%YoY and 3.5% qoq while realizations are expected to decline 3.6%yoy and 5% qoq to Rs3423/t. Resultant revenues from cement are expected to decline 5.5%YoY. Revenues from paper segment are expected to grow 2% to Rs0.96bn while electrical segment is expected to register growth of 18% in revenues at Rs1.58bn.

Shree Cement




Target Price (Rs) 4,420 PAT (Rs mn) 1,979 2,281 712 178.0% -13.2%

% Upside -3% EPS (Rs) 56.8 65.5 20.4 178.0% -13.2%

Shree’s revenues are estimated to grow by 8.6%YoY to Rs13.6bn. Cement revenues at Rs11.4bn are expected to grow by 5%YoY led by subdued volume growth of 5%YoY and flatYoY growth in cement realizations (-2.7% qoq) Revenues from Power segment are expected to decline 25%yoy at Rs2.27bn. Cement EBITDA/t at Rs1049/t is expected to decline 9%YoY and 11% qoq .


Cement


% Chg QoQ Comments

Ultratech





% Upside -4% EPS (Rs) 19.0 20.1 18.7 1.4% -5.6%

Revenues are expected to grow 10%YoY to Rs50.13 bn led by subdued volume growth of 1%YoY and a sequential dip of 2.5% in blended realizations. Freight Costs are expected to increase by 5% qoq while P&F costs decline of 4.6% is expected to negate its impact. The increase in cost/t for Ultratech is expected to be lowest compared to ACC and Ambuja (-0.1% qoq). However led by lower realizations resultant EBITDA/t at Rs953/t is expected to decline 11.2% qoq (flatYoY).


Construction & Infrastructure

n Revenue for Construction & Infra companies within Emkay universe is expected to grow 12%YoY to Rs80 bn. Adani Ports (Standalone) & Ashoka Buildcon (ABL), are expected to deliver healthy growth 20% & 17%YoY respectively while IRB & IL&FS are expected to deliver 11% & 14% growth. Execution issues will continue to hamper IVRCL with its revenue growth pegged at 3%YoY.

n Aggregate EBITDA for coverage universe is expected to grow 7% at Rs 22.6bn with EBITDA margins expected to decline 120 bps to 28%. However Ex JPA the EBIDTA is expected to grow by a healthy 20%YoY. JPA EBIDTA is expected to decline 11% led by lower cement & construction profits. Adani port is expected to witness healthy expansion of 85 bps in margins owing to improved mix. IRB Infra is expected to see its margins dip by 138 bps to 44.45% on account of higher proportion of construction revenues, while Ashoka is expected to see its margins improve 304 bps to 20% on account of higher BoT revenues.

n Interest expense for the infrastructure universe is expected to increase 12%YoY, however we see interest pressure at low teens is the lowest in last 8 quarters. While JP Associate (standalone interest cost +4%YoY) & Adani ports (standalone interest cost +8%) are expected to see only single digit increase in interest cost, IVRCL & Ashoka are expected to see steep jump with their interest charge increasing by 56% & 43% respectively.

n With depreciation cost increasing by 20%YoY, aggregate APAT for coverage universe is expected to decline 20%YoY to Rs6.8 bn. However the dip in profitability is led by JPA (61%YoY) & IVRCL (Net loss of Rs71 mn as compared to profit of Rs68 mn). Excluding these two APAT for the quarter is expected to jump 3%YoY, with Ashoka (+18%YoY) and Adani ports (13%YoY) registering healthy growth in profits.




% Chg QoQ Comments

Adani Ports & SEZ



Reco Buy EBITDA Margin (%) 68.9 69.5 68.1 85.0 -59.2


% Upside 7% EPS (Rs) 1.75 1.8 1.5 13.4% -5.2%

Adani ports (ADSEZ) is expected to report revenues of Rs7.85bn registering a +20%YoY growth led by 26%YoYincrease in cargo volume and 5% correction in net average realization. Net profit at Rs3.5 bn is expected to witness a 13%YoY growth.

Ashoka Buildcon


Mkt Cap (Rs bn) 11 EBITDA (Rs mn) 931 841 692 34.7% 10.8%



% Upside 56% EPS (Rs) 4.4 5.4 3.7 18.1% -19.3%

Ashoka Buildcon (ABL) is expected to report revenues of Rs4.1bn registering a +17%YoY growth led by 18%YoYincrease in Construction rev. and 12%yoy growth in BOT revenues. In Q4FY12, ABL commenced toll collection for Durg & Jaora Nayegaon project & commenced toll collection at Dhankuni Kharagpur in Q1FY13, the initial collection is ahead of management estimates. We expect EBIDTA for the quarter at Rs0.93bn growing 35%yoy with EBITDA margins of 22.6%. Net profit at Rs0.23 bn for the quarter is expected to witness a 18% growth.

IL&FS Transportation




Target Price (Rs) 221 PAT (Rs mn) 1,002 1,159 878 14.2% -13.6%

% Upside 3% EPS (Rs) 5.2 6.0 4.5 14.2% -13.6%

IL&FS Transportation is expected to report revenues of Rs14.5bn registering a +14%YoY growth. Construction its revenues are likely to witness 11%YoY growth at Rs 10bn. Toll/Annuity income will witness ~45%YoY growth to Rs2.15bn. EBITDA expected at Rs3.96bn registering a 30%yoy growth. Margins are expected to expand 338 bps to 28.7%, driven by changing mix. Net profit for the quarter is expected at Rs 1 bn a growth of 14%YoY .




% Chg QoQ Comments

IRB Infrastructure




Target Price (Rs) 230 PAT (Rs mn) 960 1,210 1,244 -22.8% -20.7%

% Upside 72% EPS (Rs) 2.9 3.6 3.7 -22.8% -20.7%

IRB is expected to report revenues of Rs8.3bn (+11%YoY) led by 13%YoY growth in Construction rev & 10%YoY growth in BOT revenues led by 8.9% hike in Surat Dahisar from Sept -1. With larger share of high margin BOT segment expanding, EBIDTA for the quarter is expected at Rs3.7bn growing 7.7%yoy. Consolidated EBITDA margins of 44.5% registering an contraction of 138bpsYoY. Net profit at Rs0.96bn is expected to witness a 22.7%YoY decline, mainly led by 52% growth in depreciation & 10% increase in interest expense.

IVRCL




Target Price (Rs) 39 PAT (Rs mn) -71 -396 68 NA NA

% Upside -16% EPS (Rs) -0.3 -1.5 0.3 NA NA

IVRCL’s is expected to report revenues of Rs12.3bn registering a 3% growthYoY. EBITDA for the quarter at Rs 0.98bn is expected to register 11.6% growthYoY with EBITDA margins at 8%, +62 bpsYoY. Adj. Net profit for the quarter at -Rs 71 mn. Execution issues continue to persist, however positive developments like possible monetization of some BOT’s or Real estate will be the key triggers for the stock.

Jaiprakash Associates





% Upside -6% EPS (Rs) 0.6 0.6 1.5 -60.9% -5.5%

Jaiprakash Associates (JPA) is expected to report revenue of Rs33.1bn, +12.4%YoY and +11% qoq. Cement revenues are expected to grow 12.6%YoY (Volume + 6% & realization growth 6%), 18% growth in real estate revenue to Rs 3.6bn & 5%YoY growth in construction revenue at Rs 13.04bn. EBITDA to decline 11%yoy to Rs7.5bn with a 606bpsYoY decline in marginsYoY to 22.6%. Adjusted net profit to decline 60.9%YoYto Rs 1.21bn.


Consumers

n Our Consumers universe is expected to report healthy performance: revenue growth of 15%YoY to Rs 204 bn and

Apat growth of 18%YoY to Rs 21bn. Don’t expect improvement in growth momentum, especially after the moderation

reported in past quarters. We expect the price-led and volume-led growth to balance-out against lop-sided in past

quarters. The volume-led (8%) and price-led (7%) growth balances out.

n No change in construct of underlying volume growth. Don’t expect improvement in growth momentum, especially

after the moderation reported in past quarters (impacted by CSD Channel, Discretionary Spending). Emkay

expectation for volume growth - Asian Paints (+7%), Berger (+7%), HUL (+7%), Colgate (+9%), Nestle (+3%), GSK

Consumer (+4%), Marico (+9%) and Jubilant FoodWorks (SSG 20%). Whereas, Titan is expected to report +5% in

Jewellery against volume decline in previous quarters.

n Input costs have fallen on selective basis – (1) Palm Oil down 16% qoq and 9%YoY (2) Brent Crude down 6% qoq and

(3) Titanium Dioxide down 13% qoq and 8%YoY. However, Ebidta gains would not fructify for Asian Paints (offset by

higher A&P spends, owing to corporate branding) and GCPL (impacted by consolidation effect). Even, HUL has seen

significant reduction in input costs in S&D segment, supporting case for qoq expansion in Ebidta margins.

n Robust earnings performance expected for GSK Consumer (27%YoY), Godrej Consumer (28%YoY), Jubilant

FoodWorks (32%YoY), Marico (37%YoY) and Page Industries (36%YoY). Base effects to catch-up with Hindustan

Unilever restricting earnings growth to 12%YoY. Even, Nestle would report muted earnings growth at 10%YoY.

n Current valuations are at a significant premium to 10-yr avg and 5-yr avg valuation. We do not expect consumer

space to re-rate any further. Our preference for companies is clearly driven by earnings visibility, confidence on

earnings and reasonable valuations. Concurrently, preferred buys are Berger, Colgate, GSK Consumer, Marico and

Titan. Whereas, top avoids are Asian Paints, Hindustan Unilever, GCPL, Jubilant FoodWorks and Page Industries.


Consumers


% Chg QoQ Comments

Asian Paints



Reco Sell EBITDA Margin (%) 16.0 14.5 15.5 48 bps 152 bps


% Upside -24% EPS (Rs) 33.0 24.9 27.0 22.0% 32.4%

Volume growth expectations at 7%YoY and Price growth expectations at 8%YoY. Any gains on input costs would be used for spends on Corporate spending. We expect robust earnings performance in Q3FY13 (1) Revenue +14.7%YoY to Rs29.4 bn (2) Ebidta +18.2%YoY to Rs4.7 bn and (3) Apat +22.0%YoY to Rs3.2 bn. Ebidta margins expands 48 bps to 16.0%.

Berger Paints





% Upside -1% EPS (Rs) 1.7 1.5 1.4 20.4% 10.7%

Continue to gain from strong growth in Southern and Eastern region. Volume growth expectations at 7%YoY and Price growth expectations at 8%YoY. This translates into revenue growth of 14.5%YoY to Rs8.9 bn. Ebidta margins to maintain at 10.7%. Consequently, APAT to grow at 20.4%YoY to Rs591 mn.

Colgate-Palmolive





% Upside -9% EPS (Rs) 10.2 10.7 8.5 20.0% -4.4%

Expected to maintain its growth momentum. Colgate expected to report (1) revenue growth of 17.0%YoY to Rs7.8 bn (2) Ebidta growth at 21.9%YoY to Rs1.6 bn and (3) Apat growth at 20.0%YoY to Rs1.4 bn. The inherent volume growth assumption is 9.0%YoY. Even, price led growth continues to remain strong.


Consumers


% Chg QoQ Comments

Godrej Consumer Products



Reco Sell EBITDA Margin (%) 18.7 15.6 20.1 -139 bps 319 bps


% Upside -19% EPS (Rs) 6.3 4.7 5.2 21.2% 33.8%

Drivers to strong performance (1) consolidation of acquired business (2) strong growth in domestic business, post re-launch of Cinthol and (3) gain from fall in palm oil prices. International business gain from translation benefit. Expect (1) 29.2%YoY growth in revenue to Rs15.0 bn (2) Ebidta margin at 18.7% (3) ebidta growth of 20.1%YoY to Rs2.6 bn and (4) APAT growth of 27.5%YoY to Rs2.1 bn.

GSK Consumer

CMP(Rs) 3,844 Net Sales (Rs mn) 7,195 8,577 6,248 15.2% -16.1%

Mkt Cap (Rs bn) 162 EBITDA (Rs mn) 1,042 1,706 844 23.5% -38.9%


Target Price (Rs) 3,400 PAT (Rs mn) 749 1,286 591 26.7% -41.7%

% Upside -12% EPS (Rs) 17.8 30.6 14.1 26.7% -41.7%

Negative impact of CSD channel continues on brand Horlicks. Consequently, volume growth expectations are muted at 4.0%YoY. But, 5% price hike in Q3CY12 has resulted in 8-9% price led growth in the quarter. We have forecasted (1) Revenue growth of 15.2%YoY to Rs7.2 bn (2) EBIDTA growth 23.5%YoY to Rs1.0 bn and (3) APAT growth of 26.7%YoY to Rs749 mn.

HUL


Mkt Cap (Rs bn) 1,136 EBITDA (Rs mn) 10,621 9,767 9,705 9.4% 8.7%



% Upside -7% EPS (Rs) 4.0 3.7 3.5 12.1% 6.7%

Growth momentum decelerates further in Q3FY13 – led by (1) de-merger of export business (2) high base in S&D segment and (3) slower premiumization in PP segment. But, reduction in input costs triggers 88bps qoq expansions in ebidta margins. We have forecasted 12.1%YoY growth in APAT to Rs8.6 bn. We have assumed volume growth of 7%YoY, continuation of Q2FY13.


Consumers


% Chg QoQ Comments

Jubilant FoodWorks



Reco Sell EBITDA Margin (%) 17.6 17.2 18.9 -134 bps 42 bps


% Upside -24% EPS (Rs) 6.2 5.0 4.7 31.4% 24.1%

No improvement in SSG expected on qoq basis. We have forecasted SSG at 20% in Q3FY13, equivalent to Q2FY13. Our forecasts are (1) Revenue growth of 40.9%YoY to Rs3.9 bn, (2) EBIDTA growth of 30.9%YoY to Rs686 mn and (3) APAT growth of 32.3%YoY to Rs402 mn. SSG to remain under pressure. We expect EBITDA margin to contract by 134 bpsYoY.

Marico




Target Price (Rs) 208 PAT (Rs mn) 1,151 859 841 36.8% 34.0%

% Upside -9% EPS (Rs) 1.8 1.3 1.4 30.5% 34.0%

Growth momentum continues with each of its major categories registering robust growth. Also, Personal care brands acquired from Reckitt Benckiser will do revenue contribution of Rs 400mn, triggering revenue growth of 19.9%YoY. EBITDA margins to expand 213 bpsYoY to 13.6%. APAT growth at 36.8%YoY to Rs1.1 bn.

Nestle





% Upside 3% EPS (Rs) 26.4 27.7 23.9 10.2% -4.8%

Low growth continues – expecting 3%YoY volume growth and 10%YoY revenue growth. Challenges persist in Milk, Confectionary and Beverages portfolio. But, lower input costs triggers 68 bpsYoY expansion in EBIDTA margins to 20.4%. We forecast EBIDTA growth at 13.8%YoY to Rs4.4 bn and APAT growth of 10.2%YoY to Rs2.5 bn.


Consumers


% Chg QoQ Comments

Page Industries



Reco Sell EBITDA Margin (%) 19.9 20.0 17.2 272 bps -13 bps

Target Price (Rs) 2,849 PAT (Rs mn) 271 308 199 36.1% -11.9%

% Upside -17% EPS (Rs) 24.3 27.6 17.9 36.1% -11.9%

Sportswear and women’s wear would continue to drive revenues to Rs 2.1bn, growth of 23%YoY, while men’s segment may grow slower as compared to its other 2 segments. Expect EBIDTA to grow at 43%YoY led by benefit from lower raw material prices. EBIDTA margins to grow 270bps to 19.9% despite rise in advertising cost. Despite higher interest cost on account of debt for working capital, APAT to grow at 36%YoY at Rs 271mn.

Titan Industries





% Upside 1% EPS (Rs) 2.2 2.0 1.8 21.9% 10.7%

Improving volumes due to festive demand, growth from store expansion and SSG to drive 18%YoY revenue growth to Rs 23.5bn in jewellery segment, while watches segment to grow 10%YoY to Rs 4.2bn purely led by price increases. Subsequently, revenues to grow 18%YoY to Rs 28.7bn. Expect EBIDTA to grow at 29%YoY to Rs 2.8bn, while EBIDTA margins to expand 90bps to 9.6% on account of higher share of studded jewellery. APAT to grow 22%YoY to Rs 2.0 bn.


Engineering & Capital Goods (ECG)

Expect muted operational performance in Q3FY13E on back of lower revenue growth. Lower other income and higher

interest costs to result in 2% drop in net profits

n Muted revenue growth at 6.2%YoY to Rs356.1 bn – witnessed across companies on back of lower order backlogs and

muted demand. Notable exceptions are L&T (+13%), Elecon Engg (+12%) and Punj Lloyd (+12%)

n Expect stable EBITDA margins at 12.4% (-20 bpsYoY) with EBITDA growth at 4.9%YoY to Rs44.2 bn

n High financial leverage (driven by steady deterioration of working capital) to continue to negatively impact ECG

sector earnings performance. Expect net profit to decline by 2.4%YoY to Rs27.2 bn after factoring lower other income

(-13%YoY) and higher interest charges (+30%YoY). Outperformers include L&T (+5%YoY), Greaves Cotton (+13%) and

Blue Star (L/P). Voltas, Thermax, LMW and McNally Bharat to witness +15%YoY decline in net profit

n Expect order inflows to decline 7% qoq to Rs272 bnYoY to Rs302.9 bn (YTD 66% of FY13E target order inflows)

Key actionables for the quarter

n Greaves Cotton – Expect positive earnings surprise… led by pick-up in 3-W volume growth after 7-8 months of

decline in volumes

n Blue Star - Expect positive earnings surprise… led by improvement in operational performance in EMP&PAC division.

We have factored segment EBIT margins at 5.5% (Vs 7.0% in Q2FY13)

Emkay’s stock selection is purely driven by visibility, cash flows and ROIC of the business models. Our preferred BUYS

are L&T, Cummins India, Greaves Cotton and Blue Star. Though these companies appear to be richly valued (on relative

basis); they should be viewed in conjunction to strength of the business model




% Chg QoQ Comments

BHEL Standalone





% Upside -8% EPS (Rs) 5.5 5.2 5.7 -3.1% 5.9%

Expect decline in earnings to continue in Q3FY13E amidst a declining order backlog and paucity of incremental orders. (1) Muted revenue growth at 1%YoY led by Power (-1% to Rs86.7 bn). Industry growth at 6%YoY to Rs25.2 bn (2) Stable margins at 18% (3) APAT expected to decline by 3%YoY to Rs13.5 bn – led by lower other income. Implied earnings decline at 20%YoY in Q4FY13E – lends minimal downside risk. Key things to watch out will be outlook on order inflows and profitable execution of order backlog

Larsen & Toubro Standalone





% Upside 11% EPS (Rs) 17.3 15.0 16.4 5.8% 15.6%

Expect deceleration in earnings to continue – led by lower revenue growth and other income (1) Revenue growth at 12%YoY - led by 14% growth in E&C to Rs141.3 bn. Expect E&E to grow 3%YoY and M&IP to remain flat (2) Stable margins at 9.7% (3) Lower APAT growth at 6%YoY to Rs10.6 bn – due to decline in other income. Strong order inflows at Rs150 bn (factoring order cancellations of Rs28 bn. Management ability to retain guidance on order inflow, revenues and EBITDA margins will be critically evaluated.

Cummins India





% Upside -7% EPS (Rs) 4.9 5.8 5.1 -3.5% -15.5%

Expect Cummins to witness muted revenue growth at 3%YoY to Rs9.9 bn – led by decline in exports (-2%), industrial (-8%) and automotive (-40%) markets. Domestic power gensets expected to grow at 8%.. Expect EBITDA margsin to improve 80 bpsYoY to 17.6% (though down 80 bps qoq). Hence EBITDA growth at 8%YoY to Rs1.7 bn. But APAT expected to decline by 3%YoY to Rs1.4 bn – led by lower other income. Management comment on sustainable operating margins & demand outlook (export, domestic)) will be keenly awaited




% Chg QoQ Comments

Thermax Standalone





% Upside -20% EPS (Rs) 6.8 7.6 8.0 -15.3% -11.2%

Expect continued weak performance owing to muted order inflows in H2FY12 and low opening order book cover. 1%YoY decline in revenues – led by Energy (-11%YoY to Rs8.8 bn). Environment to grow by 8%YoY to Rs3.3 bn. Expect EBITDA margins to fall by 80 bpsYoY – due to negative impact of operating leverage and rising costs. Led by decline in revenues and EBITDA margins, APAT to fall by 15%YoY to Rs808 mn. Pick-up in order inflows remain crucial to retain earnings estimates.

Voltas Consolidated





% Upside 15% EPS (Rs) 1.2 1.0 1.8 -35.1% 19.1%

After a dismal Q2FY13, expect sequential improvement in Q3FY13E performance, though net profit to decline by 35% onYoY basis. Expect revenues to increase by 5%YoY & 5% qoq – EMP up 2%YoY, EPS up 8%YoY and UCP up 17%YoY. Expect EBITDA margins at 4.3% (-270 bpsYoY, +50 bps qoq) –low EBITDA margins due to execution of low margin Sidra medical project. Consequently, expect APAT to fall by 35%YoY, though up 19% qoq. Sidra project status update, outlook for order inflows, performance of Rohini Electricals will be key monitorables

Blue Star


Mkt Cap (Rs bn) 16 EBITDA (Rs mn) 309 202 -88 53.2%

Reco Buy EBITDA Margin (%) 5.1 3.5 -1.5 666 bps 167 bps

Target Price (Rs) 215 PAT (Rs mn) 124 73 -328 n.a. 70.6%

% Upside 22% EPS (Rs) 1.4 0.8 -3.6 n.a. 70.6%

Expect improved performance during Q3FY13E led by EBITDA margin improvement (1) Revenue growth at 3%YoY – EMP&PAC (+5% to Rs3.8 bn –on declining order backlog), Cooling products (-1% to Rs1.6 bn – weak industry demand), PEIS (0% to Rs0.5 bn) (2) EBITDA margins at 5.1% - benefits of operating leverage and change in revenue mix (3) APAT at Rs124 mn. Traction in order book and BLSR’s ability to sustain EBITDA margins, reduce debt and improve profitability will be monitored




% Chg QoQ Comments


CMP(Rs) 2,260 Net Sales (Rs mn) 4,381 4,696 5,383 -18.6% -6.7%

Mkt Cap (Rs bn) 25 EBITDA (Rs mn) 516 608 687 -25.0% -15.2%


Target Price (Rs) 1,923 PAT (Rs mn) 280 306 397 -29.3% -8.5%

% Upside -15% EPS (Rs) 24.9 27.2 35.2 -29.3% -8.5%

Tough macro economic conditions have led to lower order execution. LMW is expected to witness revenue decline during Q3FY13. We expect revenue decline of 19% yoy to Rs4.4bn. EBITDA margin for LMW is expected to decline 100bps on yoy basis. Operational performance would be marred by revenue decline and high fuel cost. PAT is expected to decline by 29% yoy to Rs280mn. Order book at the end of Q2FY13 stood at Rs 37bn. On the backdrop of slow economic growth, we expect order inflows during Q3FY13E would remain subdued.

Punj Lloyd Consolidated




Target Price (Rs) 74 PAT (Rs mn) -484 -179 233 n.a. n.a.

% Upside 19% EPS (Rs) -1.5 -0.5 0.7 n.a. n.a.

Expect continued improvement in operational performance but negated by high interest costs (1) Revenue growth at 12%YoYto Rs30.3 bn – led by strong order book (2) EBITDA margins at 9.3% (-60 bpsYoY) – believe to have moved up in the +9% band (3) But low other income (-99%YoY) and high interest charges (+52%YoY) offset operational performance. Consequently expect net loss at Rs484 mn. Sustained momentum in orders, management’s ability to rein in debt key to earnings and rating upgrades.

Greaves Cotton





% Upside 10% EPS (Rs) 1.6 1.5 1.4 12.6% 4.0%

After declining for 4 quarters, expect fall in net profits to halt on favourable base and improved operational performance (1) 9%YoY growth in revenues – driven by pick-up in 3-W auto sales volumes. Infrastructure expected to grow at 11% on low base to Rs0.4 bn (2) 50 bpsYoY improvement in EBTDA margins ( (Infra div. EBIT loss at Rs30 mn) (3) APAT growth at 13%YoY to Rs385 mn. We await outlook for Infrastructure division, ramp-up with Tatas & M&M and sustainable EBITDA margins.




% Chg QoQ Comments

McNally Bharat Engineering Standalone





% Upside 10% EPS (Rs) 2.1 2.8 4.0 -48.6% -24.8%

Expect performance to be impacted by muted revenue growth, low other income and high interest expense. (1) Flat revenue growth at 1%YoY to Rs4.9 bn – on high base in Q3FY12 (2) EBITDA margins to improve 30 bpsYoY to 6.8% - probability for upsides exist considering +7% margins in past 3 quarters. (3) EBITDA growth at 5%YoY to Rs336 mn. (4) Led by decline in other income and high interest expenses, expect APAT to fall sharply by 49%YoY to Rs64 mn. Outlook on order inflows, EBITDA Margins & FY13E to be tracked.

Elecon Engineering





% Upside 15% EPS (Rs) 1.6 2.5 1.6 0.1% -33.7%

Expect decline in EBITDA margins to offset 12%YoY revenue growth (1) 12%YoY growth in revenues – led by MHE division (+18%YoY to Rs1.9 bn). TE division to witness healthy growth at 3%YoY to Rs1.5 bn. (2) 160 bpsYoY drop in EBITDA margins to 14.4% (3) EBITDA growth muted at 1%YoY to Rs3.4 bn (4) led by drop in EBITDA margins, expect flat APAT at Rs152 mn. Management view on (1) Fresh order inflows (2) outlook for Benzler Radicon business.

TRF Consolidated

CMP(Rs) 241 Net Sales (Rs mn) 3,107 2,652 4,276 -27.3% 17.2%



Target Price (Rs) 180 PAT (Rs mn) 8 -146 -8

% Upside -25% EPS (Rs) 0.7 -13.2 -0.8

TRF (standalone) revenues to decline by 39%YoY to Rs1.7 bn on declining order backlog and high base. EBITDA margins at 4.9% (-30 bpsYoY). 38%YoY rise in interest cost to Rs92 mn. Hence net loss at Rs18 mn Vs profit of Rs48 mn in Q3FY12 and loss of Rs209 mn in Q2FY13. Auto business performance impacted by slow down in demand in domestic trailer market (1) 4%YoY decline in revenue to Rs1.4 bn (1) EBITDA margin at 5.6% (3) APAT at Rs25 mn (Vs Rs64 mn in Q2FY13). Outlook for order inflows, demand and margins keenly awaited.


IT Services

n We expect a 2.6-4.2% QoQ US$ rev growth for our Tier I coverage universe (including ~30-40 bps benefit from cross currency

movements) with Wipro at the lower end (however within it's guided range of 1.2-3.2% QoQ growth) and Infosys at the upper

end ( however note that it's helped by incorporation of Lodestone acquisition for 2 months, we build in ~2% QoQ growth on an

organic basis).TCS is expected to lead the Tier I peers both on sequential andYoY revenue growth trajectory with HCL Tech

coming in close aided by ramp ups on recently concluded large deals. Amongst mid tier companies, we build in a 1-10% QoQ

US$ revenue growth with TechM at the higher end (however helped completely by full quarter impact of the HGS acquisition

and partial benefit from Comviva consolidation).

n We expect margins to decline sequentially for almost all the companies in our coverage universe except for eClerx (where we

expect ~150 bps improvement in EBITDA margins on a QoQ basis) impacted adversely by December seasonality, promotion or

partial wage hike impact for certain players. For Hexaware, margins will decline sharply by ~700 bps to 14.8% impacted

adversely by loss of business at one of the key clients (as indicated by the company in early Dec'12).

n We continue to expect a scale down in Infosys's organic rev growth guidance and expect Infosys's revised US$ revenue

guidance at ~5%YoY US$ revenue growth (including Lodestone for 5 months in FY13, thereby meaning a 3.5-3.6%YoY US$

revenue growth on an organic basis for FY13). A reset in INR assumption to Rs 55/$ (V/s Rs 53/$ earlier) will lead a reset in

FY13 EPS outlook to ~Rs 159.5 V/s ~Rs 160.5 earlier. Investors should focus on (1) commentary for demand from fin services

(CTSH and TCS have talked about a better CY13/FY14 recently) and trends in decision making and (2) pricing and vol growth

outlook ahead. Wipro's March'13 quarter rev guidance would be under intense focus and we expect a 1.5-3.5% QoQ US$ rev

growth from Wipro being sentimentally positive for the sector as a whole.

n Remain selectively positive with HCL Tech (ACCUMULATE, TP Rs 650) the preferred pick in the Tier I space as we continue to

back upside risks to earnings est for HCL Tech. Amongst Tier II names, we prefer (1) MindTree ( BUY, TP Rs 750) as we

continue to back modest earnings upgrades led by operational levers (though sector wide weakness continues to increase

challenges on the front) and (2) TechM/Mah Satyam (ACCUMULATE, TP Rs 1050/125)


IT Services


% Chg QoQ Comments

Infosys Ltd


Mkt Cap (Rs bn) 1,364 EBITDA (Rs mn) 28,787 28,720 31,330 -8.1% 0.2%



% Upside 8% EPS (Rs) 37.6 41.5 41.5 -9.5% -9.4%

We expect Infosys to report a 4.2%% QoQ US$ rev growth (~2% organic revenue growth) aided by 2 months consolidation impact of Lodestone acquisition. Margins are expected to decline by ~90 bps sequentially to 28.2% impacted adversely by wage hikes , Lodestone acquisition and elongated shutdowns at certain clients. Profits est at Rs 21.5 bn (-9.4% QoQ) on a/c of forex losses (we est Rs 720 mn losses V/s gains of ~Rs 1570 mn in Sep’12 qtr). Key things to watch out for (1)outlook on client budgets and pickup in discretionary spending, (2) volume growth given instances of aggressive pricing from Infosys recently

TCS





% Upside -7% EPS (Rs) 17.6 18.1 14.9 18.0% -3.0%

We estimate TCS to report a 3.3% US$ QoQ revenue growth to US$ 2,948mn. Margins estimated to be nearly flat QoQ at 28.3%. Profits estimated at Rs 34bn(-3% QoQ, note that we build in forex losses of ~Rs 300 mn V/s gains of ~Rs 920 mn in Sep’12 qtr). Key things to watch out for (1) outlook on client spending and project ramp ups in top clients, and (2) comments on demand and pricing trends in financial services vertical and(3) margins trajectory

Wipro



Reco Reduce EBITDA Margin (%) 17.3 17.4 17.2 5 bps -15 bps


% Upside -11% EPS (Rs) 6.7 6.6 6.0 11.4% 1.2%

Wipro estimated to report a 2.6% QoQ revenue growth, to US$ 1,581 mn within guided range of US$1,560-1,590 mn. IT Svcs EBIT margins expected to decline by ~20 bps QoQ to 20.5%. Profits estimated at Rs 16.3 bn (+1% QoQ). Key things to watch out for (1) guidance for Mar’13 qtr( we est a 1.5-3.5% QoQ growth outlook), (2) outlook on demand from key verticals and top clients


IT Services


% Chg QoQ Comments

HCL Tech





% Upside 4% EPS (Rs) 12.5 12.5 8.0 56.2% -0.1%

HCL Tech expected to report a 2.8% QoQ growth in revenues to US$ 1,144 mn with margins declining by ~120 bps QoQ on account of partial impact from wage hikes and higher S&M expenses in the current qtr. Profits est at Rs 8.6 bn (flat QoQ) on account of lower margins. Key things to watch out for (1) ramp ups on recently won deals, (2) outlook on revenues/margins

Tech Mahindra





% Upside 13% EPS (Rs) 16.4 13.6 11.2 46.6% 21.1%

Tech M expected to report a 10% QoQ growth in US$ revenues to US$ 329 mn aided by full quarter impact of HGS acquisition and partial benefit of Comviva acquisition. Margins expected to decline by ~140 bps QoQ to 19.3% impacted by lower margin profile of HGS acquisition. Key things to watch out for(1) outlook for business within top clients BT and AT&T, (2) spending outlook in the telecom vertical and (3) margin trajectory ahead

eClerx Services



Reco Hold EBITDA Margin (%) 38.6 37.2 45.3 (664)bps 146 bps


% Upside 3% EPS (Rs) 15.4 8.4 16.6 -6.7% 84.5%

eClerx expected to report a 4% QoQ US$ revenue growth to US$ 31.3 mn. Margins expected to improve by ~140 bps QoQ to 38.6% aided by growth leverage and absence of one off costs unlike Sep’12 qtr. Profits expected at Rs 464 mn(+84% QoQ) helped by lower forex losses. Key things to watch out for (1) outlook on demand from top 5 clients as well as pickup in volumes in the core business, (2) Agilyst’s performance and (3) pricing outlook


IT Services


% Chg QoQ Comments



Mkt Cap (Rs bn) 27 EBITDA (Rs mn) 829 1,153 1,056 -21.5% -28.1%



% Upside 11% EPS (Rs) 1.9 2.8 3.4 -42.7% -30.4%

Hexaware is estimated to report revenues at US$ 92.2 mn (-0.6% QoQ) with margins est. at 14.8%, down by ~690 bps on a/c of loss of business at a top 5 client. Profits est at Rs 585 mn (-30% QoQ) impacted adversely by decline in op profits(-33% QoQ). Key things to watch out for (1) new deal wins, (2) update on scope change of a large project at a top 5 client and (3) dividend payout

Persistent Systems





% Upside -20% EPS (Rs) 14.0 11.2 10.2 37.8% 25.5%

Persistent expected to report a 1.2% QoQ US$ revenue growth to US$ 60.8 mn with margins expected to decline by ~70 bps QoQ to 26.5% . Profits est at Rs 560 mn(+25% QoQ) helped by forex gains ( V/s losses in Sep’12 qtr). Key things to watch out for (1) revenue/margin outlook, and (2) progress on IP based deals that company has been negotiating

Mahindra Satyam





% Upside 18% EPS (Rs) 2.6 2.4 2.6 -1.6% 8.8%

We expect Mah Satyam to report a 1.1% QoQ growth in US$ revenues at US$ 358 mn. EBITDA margins expected to decline by 70 bps QoQ to 20.8%. Profits ( ex exceptional items) estimated at Rs 3 bn (+8% QoQ).Key things to watch out for (1) revenue growth, (2) outlook on margin trajectory ahead and (3) hiring trends


IT Services


% Chg QoQ Comments

MindTree





% Upside 8% EPS (Rs) 21.5 17.6 15.0 43.8% 22.3%

We expect a 2.2% QoQ US$ revenue growth led largely by IT Services segment while PES segment rexpected to report a decline on a/c of December seasonality. Margins are expected to decline ~170 bps QoQ at 20.4% on a/c of higher US$/INR realised rate. Profits est at Rs883 mn(+22% QoQ) helped by forex gains ( V/s losses in Sep’12 qtr) . Key things to watch out for (1) outlook on business within IT Services and PES segment, (2) revenue growth and margin outlook and (3) hiring trends

NIIT Tech





% Upside 27% EPS (Rs) 10.0 7.5 10.8 -7.8% 32.9%

We expect NIIT Tech to report a 4.1% QoQ US$ growth with INR revenues estimated at Rs 5.1 bn (+0.8% QoQ). Margins expected to decline by ~100 bps QoQ to 16% on a/c of higher onsite work and higher Hardware revenues Profits est at Rs 583 mn (+35% QoQ) helped by translation gains(V/s losses in Sep’12 qtr). Key things to watch out for (1) comments on demand from top clients , (2) offshore shift from Morrison deal and (3) order wins during the current qtr

Mphasis Ltd*

CMP(Rs) 390 Net Sales (Rs mn) 13,446 13,062 13,672 -1.6% 2.9%




% Upside -4% EPS (Rs) 10.0 9.9 8.8 14.6% 1.1%

We expect a 2.9% QoQ INR revenue growth with margins expected to decline by ~60 bps QoQ to 20.1% on a/c of shutdowns at HP in the current qtr. Profits est at Rs 1.9 bn(-8% QoQ) on a/c of lower other income as EBITDA remains flat QoQ.Key things to watch out for (1) outlook on business from HP and direct business, (2) ramp up on business in HP ( Non ES) segment

* For Mphasis, Dec’12 refers to Jan’13 qtr end and so forth


Media and Entertainment

n Festive season during Q3FY13 is expected to provide some cheers to ad growth. Ad revenue growth of 7.1%YoY for print media companies would be primarily volume led as pricing continues to remain muted. Ad growth for broadcasters would be backed by low base of last year and increased ad spends by FMCG companies.

n Print media companies under coverage are expected to report ad revenue growth of 7.1%YoY and 16% qoq to Rs9.8bn. Regional ad growth is expected at 9.1%YoY and 12.0% qoq to Rs6.7bn, while English ad revenue (HT Media) to remain weak at 3%YoY growth. In the broadcasting space, Zee is expected to register ad growth 18%, driven by low base of last year (-10%YoY growth in Q3FY12).

n Subscription revenue is expected to grow by 10%YoY to Rs1.9bn for print media companies, led by higher circulation and cover price increase in preceding quarters. Subscription revenue for Zee is expected to grow 22%YoY, driven by strong growth in domestic subscription (both DTH and analogue), while international subscription would remain stable on constant currency basis.

n Improvement in subscriber addition led by festive season and digitization to drive 3.5% qoq growth in subscription revenue for Dish TV.

n EBITDA for print universe is expected to grow 7.0%YoY with stable margins at 21.1% v/s 21.3% in Q3FY12. Raw material has started to stabilize on the back of 1) stable newsprint prices, 2) cost rationalizing by reduction in pagination and wastages and 3) circulation expansion has happened in the last 3-4 quarters for the print media companies. EBITDA for Zee is expected to be flatYoY, due to 24%YoY increase in programming cost. Zee has increased investment in content and recently launched couple of new channels. EBITDA for Dish TV is expected to decline 8.8% qoq as content cost increase would be on the back of Media-Pro deal.

n Consolidated APAT for print universe is expected to grow 12.2%YoY to Rs1.8bn, driven by revenue growth coupled with stable operational performance and higher other income. Zee’s PAT is expected to grow 13%, due to lower tax rate of 32% as compared to 38% in Q3FY12.

n Recommend BUY on Zee Entertainment, ACCUMULATE on Dish TV and HOLD on Jagran, DB Corp and HT Media.




% Chg QoQ Comments

DB Corp.


Mkt Cap (Rs bn) 42 EBITDA (Rs mn) 1,099 861 1,017 8.0% 27.7%



% Upside -5% EPS (Rs) 3.3 2.6 3.0 10.3% 27.0%

DB Corp is expected to report 10.5% revenue growth onYoY basis. Print ad revenue growth is expected at 10% driven on the back of festive season. Circulation revenue would grow by 11%YoY. EBITDA margin is expected at 25.2%, due to 11.3%YoY increase in operating costs. Cost rationalization and strong revenue growth to drive EBITDA growth of 8%YoY. PAT is expected to improve by 10.3%YoY, strong operational performance and higher other income.

HT Media





% Upside 3% EPS (Rs) 2.3 1.4 2.1 9.9% 58.9%

HT Media is worst affected due to slowdown in macro economy. HT Media’s English segment is expected to report ad revenue growth of 3%YoY, after 3 consecutive quarters of decline. Hindi ad revenue is expected to register growth of 11%YoY. We estimate 5%YoY growth in print ad revenues. EBITDA is expected to rise by 7%YoY. EBITDA margin is expected at 14.7%, flatYoY. PAT is estimated at Rs529mn a growth of 10%YoY, led by stable operational performance and high other income.

Jagran Prakashan





% Upside -6% EPS (Rs) 2.2 2.2 1.9 15.7% 0.0%

We estimate standalone ad revenue growth of 7%YoY to Rs 2.4bn. Ad growth for Jagran would be lower than other regional players due to high base during same period last year. Circulation revenue is expected at Rs 667mn, growth of 7%YoY. Stable EBITDA during the quarter would be driven by cost rationalization measures. We estimate EBITDA margin of 26.3%, flatYoY. PAT is expected at Rs694mn, growth of 16%YoY.




% Chg QoQ Comments

Dish TV




Target Price (Rs) 79 PAT (Rs mn) -336 -213 -430

% Upside 1% EPS (Rs) -0.3 -0.2 -0.4

We expect revenue growth of 13.4%YoY, driven on the back of 15%YoY growth in subscription revenue. We expect gross adds of 0.8mn v/s 0.5mn addition in the last quarter. Seasonally strong quarter and digitization of phase I would lead to strong subscriber addition. ARPU is expected to remain flat qoq at Rs159.2. Churn is expected to remain stable at 1% monthly. EBITDA margin is expected at 25.5% with EBITDA decline of 8.8% qoq due to signing of content deal with Media Pro. We expect adjusted net loss of Rs335mn v/s 213mn in Q2FY13.

Zee Entertainment





% Upside 23% EPS (Rs) 1.7 2.0 1.5 13.5% -15.8%

We expect revenue growth of 19%YoY, driven on the back of 18%YoY growth in ad revenue and 22%YoY growth in subscription revenue. Low base last fiscal to drive ad growth in Q3FY13. Domestic subscription revenue would continue to remain robust with 28%YoY growth. EBITDA margin at 23.9% is expected to decline 472bpsYoY but improve 107bps qoq. Increased investment in content to weigh on EBITDA. Ex-Sports EBITDA margin is expected at 24.7%. PAT at Rs1.6bn is expected to improve 13%, due to lower tax rate.


Metals and Mining

n We expect Q3FY13 operating performances of the metals and mining companies to be stable. Ferrous metals continue to be under pressure due to lower demand and issues with raw material sourcing leading to inventory build up. Non-ferrous metals saw some improvement on account of LME recovery during the quarter. Regulatory scenario continued to be strict with the Supreme Court banning mining in Goa and also restrictions put by the Orissa government on mining activities.

n Revenue for our Metals and Mining universe is expected to remain flat onYoY as well as QoQ. The major revenue decline is expected due to ban of mining operations in Goa drastically impacting Sesa Goa’s performance. In ferrous space, we expect the revenues to remain muted due to fall in realizations by Rs 1000-1500 per tonne during the quarter. Non-ferrous space performance is expected to remain stable due to LME price gains.

n EBITDA for the universe is likely to remain flat QoQ and decline 5%YoY. LME prices recovered marginally during the quarter, resulting in an expected better performance of Hindustan Zinc and Sterlite Industries. In ferrous space, barring JSW and NMDC, improvement in sales volumes on a QoQ basis should help EBITDA to show positive growth.

n The overall APAT of our coverage universe on QoQ is likely to gain 1% due to better EBITDA performance. On a QoQ basis, Bhushan (22%), HEG (22%) and Hindalco (12%) are expected to perform better while ferrous players are likely to be laggards. On aYoY basis, non-ferrous companies (except Hindalco) are expected to witness positive bottomline growth led by Sterlite (56%) and HZL (28%).

n With mining ban imposed in Goa and stiff restrictions in Orissa, regulatory issues during the quarter continued to weigh heavy on ferrous metal players. Non-ferrous space on the other hand recovered modestly during the quarter. We continue to remain concerned on the steel companies due to weak domestic demand and higher inventory while prefer pure mining companies viz NMDC and Hindustan Zinc.


Metals and Mining


% Chg QoQ Comments

Tata Steel

CMP(Rs) 441 Net Sales (Rs mn) 325,933 341,327 331,031 -2% -5%

Mkt Cap (Rs bn) 428 EBITDA (Rs mn) 25,405 23,101 17,173 48% 10%

Reco Reduce EBITDA Margin (%) 7.8 6.8 5.2 +261 bps +103 bps

Target Price (Rs) 349 PAT (Rs mn) -1,388 -4,066 -6,027 n.a n.a

% Upside -21% EPS (Rs) -1.4 -4.2 -6.3 n.a n.a

We expect Tata Steel’s domestic sales volume to be 1.85 mt for Q3FY13. The EBITDA/tonne for the standalone business is likely to remain flat at US$263/ tonne, as lower coking coal costs would be offset by lower realizations. We expect the standalone PAT to be at Rs 13 bn. Seasonality should restrict any improvement in the European operations. We expect a volume of 3.3 mt for Tata Steel Europe during the quarter and an EBITDA/tonne of -US$5. Ramp up progress of 2.9 mtpa expanded capacity at Jamshedpur and developments in European operations would be important things to watch out for

JSW Steel

CMP(Rs) 855 Net Sales (Rs mn) 86,117 95,137 84,241 2% -9%

Mkt Cap (Rs bn) 191 EBITDA (Rs mn) 14,017 15,313 13,174 6% -8%

Reco Accumulate EBITDA Margin (%) 16.3 16.1 15.6 +64 bps +18 bps

Target Price (Rs) 743 PAT (Rs mn) 2,643 2,675 4,561 -42% -1%

% Upside -13% EPS (Rs) 11.8 12.0 20.4 -42% -1%

We expect a sales volume of 2 mt for Q3FY13, down ~8% on QoQ due to lower production on the back of shutdown in one of the blast furnaces. The company has been operating at ~75% utilization levels recently, as problems related to sourcing of iron ore continue in Karnataka. The EBITDA/ tonne for the quarter is expected to be flat at US$130 for the standalone business. We would like to have further update on iron ore sourcing by the company, JSW Ispat’s performance, US coking coal mines, plate and pipe mill and also the merger progress with JSW Ispat

SAIL

CMP(Rs) 100 Net Sales (Rs mn) 115,854 108,202 110,437 5% 7%

Mkt Cap (Rs bn) 411 EBITDA (Rs mn) 11,382 11,093 15,811 -28% 3%



% Upside -18% EPS (Rs) 1.0 1.2 2.7 -62% -16%

During the quarter, while the realizations are expected to drop by ~4%, we expect sales volumes to remain higher at 2.85 mt. Due to fall in realizations and overall rise in other input costs, the positive impact of lower coking coal prices is likely to be offset. We expect the EBITDA/ tonne for Q3FY13 to be US$74. The company currently is carrying an inventory of 1.3 mt and the focus remains to liquidate the same. The key thing to watch out for would be update on its expansion projects


Metals and Mining


% Chg QoQ Comments

NMDC


Mkt Cap (Rs bn) 648 EBITDA (Rs mn) 16,128 19,349 22,607 -29% -17%



% Upside 20% EPS (Rs) 3.6 4.2 4.7 -23% -14%

The company has reported a sales volume of 5.3 mt for Q3FY13, which was lower than the estimates. Due to price cuts taken during October and November months, we expect the average blended realizations to drop on QoQ basis to US$77/ tonne. We continue to keep close watch on the developments regarding expansion projects in Bailadila and Kumaraswamy. Any update on these projects and on future pricing policy of iron ore in the domestic market would be interesting to look at

Sesa Goa


Mkt Cap (Rs bn) 176 EBITDA (Rs mn) -407 1,943 9,073 n.a n.a

Reco Hold EBITDA Margin (%) -18.5 66.0 34.7 -5319 bps -8451 bps


% Upside -25% EPS (Rs) 6.1 6.0 8.0 -24% 1%

Due to ban of mining in Goa and Karnataka with no iron ore transportation of ore allowed in Goa we don’t expect any iron ore sales volume in Q3FY13. The revenue is likely to be driven by only pig iron and met coke. This would result into a loss at the EBITDA level. Dividend and attributable profit from Cairn India is likely to drive the consolidated PAT. We keep close watch on the developments regarding Karnataka and Goa mining. In 2nd week of January the Supreme Court hearing on Goa mining is due and it can provide some clarity on restarting of mining in Goa. Update on Liberia would also be important

Sterlite Industries



Reco Hold EBITDA Margin (%) 23.1 22.8 22.5 +61 bps +35 bps

Target Price (Rs) 92 PAT (Rs mn) 14,328 15,239 9,199 56% -6%

% Upside -23% EPS (Rs) 4.3 4.5 2.7 56% -6%

In Q3FY13, the average LME prices for all the base metals gained on a QoQ basis by ~3-4%.. Copper, aluminium, Zinc and lead prices gained 3%, 4%, 3% and 11% over last quarter to average at US$7909/tonne, US$1997/tonne, US$1947/tonne and US$2199/tonne respectively. While INR continued to be weak during the quarter, the Impact of same was not significant. Overall we expect satisfactory performance by Sterlite Industry. Update on VAL’s alumina refinery and merger process with Sesa Goa would be interesting to watch out for


Metals and Mining


% Chg QoQ Comments

Hindustan Zinc



Reco Buy EBITDA Margin (%) 53.5 50.4 50.3 +318 bps +313 bps

Target Price (Rs) 146 PAT (Rs mn) 16,333 15,398 12,800 28% 6%

% Upside 3% EPS (Rs) 3.9 3.6 3.0 28% 6%

We expect the ongoing mine development projects to start contributing to the overall performance. On the realizations front, while lead LME average remained very strong (up 11%) during the quarter at US$2199/tonne, LME zinc for the quarter too gained 3% QoQ to US$1947/tonne. Silver prices also gained 8% during the quarter to ~US$33/ oz. We expect better margins for the current quarter. Update on the projects and guidance on the CoP would be important to look at

Hindalco (Standalone)


Mkt Cap (Rs bn) 257 EBITDA (Rs mn) 5,872 5,153 7,149 -18% 14%

Reco Buy EBITDA Margin (%) 8.9 8.4 10.8 -189 bps +50 bps


% Upside 0% EPS (Rs) 2.1 1.9 2.4 -10% 12%

During the quarter, we expect primary aluminium volumes to remain flat as compared to Q2FY13 while, copper volume likely to improve slightly. LME aluminium and copper gained 4% and 3% on QoQ basis to US$1997/ tonne and US$7909/ tonne respectively. Weak INR also would be helpful for the company. Update on Hirakud power plant and upcoming Greenfield projects would helpful

GPIL


Mkt Cap (Rs bn) 4 EBITDA (Rs mn) 805 746 560 44% 8%

Reco Buy EBITDA Margin (%) 13.3 12.5 11.6 +166 bps +81 bps

Target Price (Rs) 151 PAT (Rs mn) 173 213 106 63% -19%

% Upside 26% EPS (Rs) 5.5 6.7 3.3 63% -19%

We believe the capacity utilization of sponge iron would remain higher at ~65% during the quarter. While pellet production is likely to be 1.57 lakh tonnes, the realizations are expected to drop on a QoQ basis. Iron ore mining is likely to be at 1.65 lakh tonnes. Key things to watch out for would be mining output and contribution from pellet business.


Metals and Mining


% Chg QoQ Comments

Bhushan Steel



Reco Reduce EBITDA Margin (%) 30.6 29.3 30.1 +56 bps +130 bps


% Upside -17% EPS (Rs) 11.6 9.5 13.0 -11% 22%

We expect Bhushan Steel to report better steel volumes but with lower realizations in Q3FY13. The sales volume is expected to grow 17%YoY to 6.1 lakh tonnes on account of capacity additions. The EBITDA/ tonne is expected to grow on QoQ basis to Rs 14213/ tonne for the quarter, primarily due to better capacity utilization. Key things to watch out for will be the progress in Orissa phase III expansion and any guidance on iron ore availability in Orissa

HEG


Mkt Cap (Rs bn) 9 EBITDA (Rs mn) 809 681 851 -5% 19%

Reco Hold EBITDA Margin (%) 17.7 15.5 20.4 -262 bps +226 bps

Target Price (Rs) 235 PAT (Rs mn) 393 323 595 -34% 22%

% Upside 0% EPS (Rs) 9.2 8.1 14.0 -34% 14%

We expect capacity utilization for Q3FY13 to be 82%. Realizations are likely to remain stable. We expect the EBITDA margin to drop 262 bps onYoY basis, as the company continued to use high-cost needle coke at new contract price. Guidance on utilization of the expanded capacity and realization trend going forward would be important things to watch out for.


Oil & Gas

n For Q3FY13, under-recoveries on sale of HSD, SKO and LPG are expected to remain flat QoQ at Rs. 390bn. As

refineries resumed production post maintenance at the global level, refining margins were weak. We expect OMC’s GRM to be in the range of $2- 4/bbl. We have assumed ~38% sharing by upstream companies for the quarter and

factor no government support to the OMC’s.

n We expect ONGC and OIL net realization at $47.3/bbl ($46.8/bbl QoQ) and $55.1/bbl ($52.5/bbl QoQ) respectively.

n For RIL, an appreciating rupee on QoQ basis would have marginal negative impact on overall profitability for the quarter. We factor in lower GRMs on QoQ at US$9/bbl (US$9.5/bbl QoQ). The decline in RIL’s GRMs on a QoQ basis is

expected to be slower than that witnessed in the benchmark Singapore refining margins which averaged US$7/bbl as against US$9.3/bbl QoQ. This is on account of sharp decline in fuel oil spreads to US$(18)/bbl (US$12/bbl QoQ) which

forms higher proportion of Singapore GRM product slate and better LPG/Naphtha spreads which form higher proportion of RIL’s product slate. Also increase in spread between light-heavy crude oil by US$1.5/bbl to US$4/bbl

has helped RIL GRMs for the quarter. Sequentially petchem margins have declined marginally during the quarter. We factor in lower gas production from KG basin at 24mmscmd in Q3FY13 from 28.5mmscmd in Q2FY13. Our net profit

estimate for Q3FY13 stands at Rs49.6bn a decline of 7.7%QoQ and growth of 11.7%YoY.

n Natural Gas universe likely to report revenue and profit growth of 2.6% and 1.4% QoQ, respectively, primarily driven

by higher realization across all the segments. We expect transmission and distribution volume to be lower on sequential basis on the back of further decline in domestic gas production.


Oil & Gas


% Chg QoQ Comments

Reliance Industries


Mkt Cap (Rs bn) 2,805 EBITDA (Rs mn) 69,116 77,050 72,850 -5.1% -10.3%



% Upside -3% EPS (Rs) 15.3 16.6 13.6 13.0% -7.7%

We expect RIL’s revenue at Rs 887bn, growth of 4.2%YoY. EBIDTA at Rs 69.1bn, decline of 5.1%YoY and PAT at Rs 49.6bn, growth of 11.7%YoY. We expect EBIDTA margin at 7.8%, down 74bps on QoQ. We expect Gross Refining Margin (GRM) at $9per bbl for Q3FY13 We have factored in gas production of 24mmscmd as against 28.5mmscmd in Q2FY13.

IOCL

CMP(Rs) 281 Net Sales (Rs mn) 948,008 1,060,012 1,152,084 -17.7% -10.6%

Mkt Cap (Rs bn) 683 EBITDA (Rs mn) -71,343 115,616 107,247

Reco Accumulate EBITDA Margin (%) -7.5 10.9 9.3 -1,683 bps

-1,843 bps

Target Price (Rs) 320 PAT (Rs mn) -99,372 96,114 24,884 n.a. n.a.


We expect IOC’s revenue at Rs 948bn, EBIDTA loss of Rs.71.3bn and net loss of Rs.99.3bn. The total under recovery for Q3 FY13 is expected at Rs390bn. We expect no government support for OMCs and the same has been considered in our estimates. We also consider upstream support of 38%. We expect Gross Refining Margin (GRM) at $3.2 per bbl for Q3FY13.

BPCL



Reco Accumulate EBITDA Margin (%) -10.8 9.5 6.3 -1,709 bps

-2,030 bps

Target Price (Rs) 397 PAT (Rs mn) -52,987 50,348 31,422 n.a. n.a.


We expect BPCL’s revenue at Rs435.8bn, EBIDTA loss of Rs.47.1bn and net loss of Rs.52.9bn. The total under recovery for Q3 FY13 is expected at Rs390bn. We expect no government support for OMCs and the same has been considered in our estimates. We also consider upstream support of 38%. We expect Gross Refining Margin (GRM) at $4 per bbl for Q3FY13.


Oil & Gas


% Chg QoQ Comments

HPCL



Reco Buy EBITDA Margin (%) -10.1 5.9 7.5 -1,758 bps

-1,606 bps

Target Price (Rs) 360 PAT (Rs mn) -46,129 23,271 27,252

% Upside 9% EPS (Rs) -136.2 68.7 80.5

We expect HPCL’s revenue at Rs386.3bn, EBIDTA loss of Rs.39.1bn and net loss of Rs.46.1bn. The total under recovery for Q3 FY13 is expected at Rs390bn. We expect no government support for OMCs and the same has been considered in our estimates. We also consider upstream support of 38%. We expect Gross Refining Margin (GRM) at $2 per bbl for Q3FY13.

GAIL





% Upside 11% EPS (Rs) 8.5 7.8 8.6 -0.8% 9.8%

We expect transmission and trading volume at 105.5mmscmd and 81mmscmd for the current quarter. Subsidy burden is the key concern for GAIL’s profitability. Based on the expected under recovery for Q3FY13, we expect subsidy burden for GAIL is at ~Rs.7bn. We expect GAIL’s revenue at Rs.116.8bn, growth of 3.4%YoY. EBIDTA at Rs.18.4bn, growth of 2.7%YoY and PAT at Rs.10.8bn, flatYoY.

Gujarat State Petronet





% Upside 8% EPS (Rs) 2.1 2.4 2.2 -6.3% -11.0%

We expect GSPL’s revenue at Rs.2.6bn, decline of 5.9%YoY. EBIDTA at Rs.2.3bn, decline of 6.6%YoY and PAT at Rs.1.2bn, decline of 6.3%YoY. Lower profitability sequentially is expected mainly on account of lower transmission tariff assumption i.e. Rs.0.97/scm. We expect transmission volume at 27.5mmscmd for Q3 FY13.


Oil & Gas


% Chg QoQ Comments

Indraprastha Gas



Reco Ur EBITDA Margin (%) 22.2 24.2 22.7 -50 bps -197 bps


% Upside -100% EPS (Rs) 6.3 7.1 4.9 27.5% -11.2%

We expect IGL’s revenue at Rs.8.7bn, growth of 31.4%YoY. EBIDTA at Rs.1.9bn, growth of 28.5%YoY and PAT at Rs.0.8bn, growth of 27.5%YoY, Growth onYoY basis is mainly driven by higher volumes and realization. We expect distribution volume at 3.68mmscmd and EBIDTA/scm at Rs.5.7/scm v/s Rs.6.1/4.8scm in QoQ/YoY.

Gujarat Gas



Reco Hold EBITDA Margin (%) 14.7 16.4 4.5 1,024 bps -165 bps


% Upside -4% EPS (Rs) 5.9 7.7 1.9 206.7% -23.5%

We expect GGCL’s revenue at Rs.7.8bn, decline of 5.7% QoQ. EBIDTA at Rs.1.1bn, decline of 15.2% QoQ and PAT at Rs.0.76bn, decline of 23.5% QoQ. Due to increase in LNG prices and no price hike during the quarter, we would see margin decline on sequential basis. We expect distribution volume at 3mmscmd and EBIDTA/scm at Rs.4.2/scm v/s Rs.4.6/09/scm in QoQ/YoY.

Petronet LNG





% Upside 17% EPS (Rs) 3.9 4.2 3.9 -1.7% -7.8%

We expect Petronet LNG’s revenue at Rs.78.6bn, growth of 24.2%YoY. EBIDTA at Rs.4.9bn, decline of 2.2%YoY and PAT at Rs.2.9bn, marginal decline of 1.7%YoY. We expect total volume offtake at 135.9tbtu and Marketing margin at Rs.41/mmbtu for the current quarter.


Oil & Gas


% Chg QoQ Comments

ONGC


Mkt Cap (Rs bn) 2,464 EBITDA (Rs mn) 103,729 102,718 106,576 -2.7% 1.0%



% Upside 9% EPS (Rs) 6.5 6.9 7.9 -17.9% -6.3%

Net sales are expected to increase by 2.7% onYoY basis to Rs186.2bn. EBIDTA is expected to decline by 2.7% onYoY basis and remain flat on QoQ at Rs103.7bn. PAT is expected to decline by 17.9%YoY and 6.3% QoQ to Rs55.2.bn QoQ.Net realization on sale of crude oil after sharing subsidy burden is expected at US$47.3/bbl compared to US$44.7/bbl in Q3FY12 and US$46.8/bbl in 2QFY13. For the quarter, we expect the company to share Rs121.1bn as subsidy.

OIL



Reco Accumulate EBITDA Margin (%) 44.9 50.2 57.9 -1,304 bps -531 bps


% Upside 18% EPS (Rs) 15.2 15.9 16.9 -10.1% -4.5%

OIL India is expected to suffer on account of lowerYoY realizations on sale of crude oil. We expect net realizations at US$55.1/bbl.Revenues for the quarter are expected to increase by 7.4%YoY to Rs 25.5bn. EBIDTA for the quarter is expected to decline by 16.8%YoY to Rs11.4bn.PAT is expected to decline by 10.1%YoY to Rs 9.1 bn. For the quarter, we expect the company to share Rs. 20.2bn as subsidy.

Cairn India



Reco Buy EBITDA Margin (%) 78.8 59.4 76.5 229 bps 1,939 bps


% Upside 12% EPS (Rs) 16.2 12.2 11.9 36.2% 33.1%

The company will benefit from higher production of crude oil from MBA field onYoY basis and weaker rupee. We model an average of 175,000bpd of production during the quarter as against 171,000bpd in 2QFY13. We expect sales of Rs46bn, up 48.7%YoY, EBIDTA at Rs36.2bn up 53.2%YoY and PAT at Rs30.9bn up 36.6%YoY.


Paper

n On an aggregate basis, we expect our paper universe to report revenues growth of 10%YoY. However, EBITDA is

likely to increase by 36%YoY due to improvement in margins.

n EBITDA margin is expected to improve by 360bpsYoY to 18.7% with EBITDA/mt likely to increase by 27%yoy to Rs

10200/mt. Improvement in bottomline is driven primarily by TNPL which is expected to report profits of Rs 252mn

compared to losses of Rs 176mn last year. BILT’s margins are also expected to improve by 300bpsYoY

n Rayon Grade Pulp (RGP) realizations are expected to decline by 9%YoY to Rs 51,000/mt. We expect pulp margins to

decline by 700bpsYoY to 16.0%.

n We maintain Buy on TNPL & Accumulate on BILT. TNPL is gradually gaining mkt share through increased sales

volumes. Inventories are likely to drop in subsequent quarters & margins would improve driven by higher pricing

power

n Post the expansion of both the pulp lines, BILT will become fully integrated in pulp. We expect margins to improve

gradually with increased availability of in-house pulp.

n JK Paper has been facing severe cost pressure on account of sharp increase in coal cost followed by recent increase

in wood cost. Further, commissioning of new plant is likely to put pressure on profitability during stabilization phase

and benefit may come only in FY15. We maintain Sell with target of Rs 30


Paper


% Chg QoQ Comments

BILT (Conso)





% Upside 16% EPS (Rs) 0.6 0.6 0.3 151.2% 15.3%

We expect consol net sales to increase by 4%YoY to Rs 12.7bn. We expect paper segment revenues to increase by 6%YoY to Rs 9.9bn. We have modeled for paper volumes of 215,000mt, 3%YoY. RGP realizations are expected to decline by 9%YoY to Rs 51,000/mt. We expect consol EBITDA to increase by 24%YoY to Rs 2.4bn and APAT is likely to increase by 190%YoY to Rs 394mn. EPS for the quarter is likely to be around Rs 0.6

JK Paper





% Upside -25% EPS (Rs) 0.2 0.3 0.5 -54.1% -26.9%

We estimate net sales to increase by 6%YoY to Rs 3.5bn. We expect sales volumes to increase by 2%YoY to 70,500mt. We expect company to report EBITDA of Rs 347mn, 15%YoY with EBITDA margins of 10.0%. Company is likely to report PBT of Rs 45mn, -17%YoY and APAT of Rs 34mn, -54%YoY. EPS for the quarter is likely to be around Rs 0.2

TNPL


Mkt Cap (Rs bn) 8 EBITDA (Rs mn) 1,080 999 592 82.3% 8.1%


Target Price (Rs) 148 PAT (Rs mn) 252 213 -176 n.a. 18.4%

% Upside 32% EPS (Rs) 3.6 3.1 -2.5 n.a. 18.4%

We expect net sales to increase by 33%YoY to Rs 4.1bn. We expect paper sales volumes to increase by 23%YoY to 85,000mt while paper realizations are expected to increase by 4%YoY. We expect company to report EBITDA of Rs 1.1bn, 82%YoY with margins of 26.2%. Company is likely to report PAT of Rs 252mn with EPS of Rs 3.6


Pharmaceutical

n Pharma universe is expected to report a core revenue growth of 21%YoY (1% QoQ)

n Dr. Reddys (+33%), Sun Pharma (+21%), Lupin (+33%), Aurobindo (+25%), Cadila (+23%), Glenmark (+23%) and Wockhardt (+19%) will be the out-performers

n One-off such as Actos will contribute USD38mn this quarter for Ranbaxy

n OPM for the Emkay Pharma Universe (excluding one-off Actos) is expected to expand by 181bpsYoY & contract 134bps QoQ to 24.3% in Q3FY13 compared to 22.5% in Q3FY12 and 25.6% in Q2FY13.

n For the companies – EBITDA margins expansion will be happen for Wockhardt (+392bpsYoY & -335bps QoQ), Dr. Reddys (+346bpsYoY & 28bps QoQ), Lupin (+181bpsYoY & -8bps QoQ), Cadila (+293bpsYoY & 306bps QoQ) and Aurobindo (+227bpsYoY & +49bps QoQ)

n PAT of Pharma universe, is expected to grow by 21%YoY (-4% QoQ)

n Growth in APAT will be on account of 78% growth in Dr. Reddy (strong contribution from Tacrolimus, Aorva and Fonda), 38% growth in Wockhardt (18% gr. In US led by ramp-up in niche launches), 24% growth in Aurobindo (35% growth in US led by 3 Injectable launches from Moraiya facility) & 32% growth in Lupin (15% gr. In India & 34% $gr. In US)

n Our Preferred Bet – Large Caps: Dr. Reddy, Lupin and Wockhardt

Mid Caps: Glenmark Pharma & Aurobindo

n Positive surprises in results: Lupin, Dr. Reddy and Glenmark

n Negative surprises in results: Ranbaxy, Cadila and IPCA


Pharmaceutical


% Chg QoQ Comments

Aurobindo





% Upside 14% EPS (Rs) 4.8 4.4 3.9 24.0% 8.9%

Performance will be led by 28% $ growth in US business to $84mn, on back of launch of 5 products Modafiniland Escitalopram, Finasteride, Pramipexole dihydrochloride, Minocycline hydrochloride & ramp-up in Singular(11%) , Plavix ( 6%) and Zyprexa (5%)

EBITDA margins expansion by 227 bpsYoY will be led by strong US business which in turn will improve gross margins

Cadila





% Upside 11% EPS (Rs) 11.3 8.7 8.7 33.2% 29.5%

Revenues will be driven by 26% growth in India and 35% growth in US. In US the growth will be led by launch of 1 injectable and 3 oral solid in Q3’13 and ramp up of 3 injectables launched last quarter. Gross margins will remain stable at 65.6% and EBITDA margins would improve by 300bps on back of operating leverage

Company has only USD 19 million @~Rs.50 of hedges remained, which will expire this quarter. Last quarter there was a loss of Rs. 76 crores on hedges.

Cipla





% Upside -18% EPS (Rs) 4.4 3.9 3.3 33.6% 13.2%

17% growth in revenue will be on back of 12% growth in domestic and 22% growth in Export formulations, led by Dymesta launch. However Lexapro prices have gone down in this quarter as exclusivity finishes off last quarter.

Gross margins are assumed at 60% compared to 63% last quarter and 58% last year same quarter.


Pharmaceutical


% Chg QoQ Comments

Dishman

CMP(Rs) 120 Net Sales (Rs mn) 3075 2971 2655 15.8% 3.5%


Reco Accumulate EBITDA Margin (%) 22.0 22.2 22.9 -86 -19

Target Price (Rs) 107 PAT (Rs mn) 181 141 86 110.5% 28%

% Upside -11% EPS (Rs) 2.2 1.7 1.1 110.5% 28%

Revenue growth will be led by 27% growth in MM business and 9% growth in CRAMs business. In MM business growth will be primarily from Vitamin D business.

Operating margins will be stableYoY and QoQ.

Divi’s





% Upside 14% EPS (Rs) 10.8 10.1 8.3 29.6% 6.9%

Revenue growth will be led by ramp up in new capacity at Vizag and favorable currency

Gross margins are estimated at 66% and EBITDA margins at 39%. Earnings will grow by 30%

Going forward, Q4 will remain flatYoY. We expect consensus earning estimates to come down by 5-10% for FY13 & FY14.

Dr. Reddy





% Upside -8% EPS (Rs) 26.8 28.0 28.8 -7.0% -4.5%

Base business (w/o Zyprexa last year ) will grow by 31% on back of US business which will clock $202 million in revenue led by Tecrolimmus, Toprol, Singular, Lanso and Fonda

Gross margins will be at 56.7% and EBITDA margins at 24%.

Adjusted for one offs, PAT will grow by 89% to Rs. 4.5 bn


Pharmaceutical


% Chg QoQ Comments

Glenmark Pharma



Reco Buy EBITDA Margin (%) 20.5 21.6 10.0 1,057 bps -107 bps


% Upside -4% EPS (Rs) 5.3 5.4 4.3 23.0% -2.3%

Revenues growth will be led by 29% growth in India & 19% $ growth in US business to USD75mn on back of launch of Singulair & ramp-up in OC portfolio. Company has lost the exclusivity on Cutivate and one more company has launched Melorene.

Gross margins are assumed at 65% flat QoQ and 1.5% higherYoY.

GlaxoSmithkline



Reco Reduce EBITDA Margin (%) 30.1 30.5 31.5 -140 bps -39 bps


% Upside -10% EPS (Rs) 19.0 19.3 17.4 9.4% -1.4%

Revenue growth will be driven by growth in Vaccines and derma segment. Top 10 brands which contribute 42% will drive the growth and profitability

Gross margins will contract by 140bpsYoY to 57.4% on back of cost pressures & INR depreciation

Govt.’s price control policy will have a negative impact on GSK as most of the brands are in premium category. Future growth depends on new vaccine launches

IPCA


Mkt Cap (Rs bn) 64 EBITDA (Rs mn) 1,386 1,788 1,513 -8% -22%


Target Price (Rs) 525 PAT (Rs mn) 895 1,162 1,038 -14% -23%

% Upside 3% EPS (Rs) 7.2 9.3 8.3 -14% -23%

Revenue growth will be led by 15% growth in India & 14% growth in Exports, which in turn will be led by 46% in Institutional business (Rs.13.5bn).

Gross margins assumed at 59% QoQ const. and 2% declineYoY. EBITDA margins will decline by 3% to 20%


Pharmaceutical


% Chg QoQ Comments

Jubilant Life




Target Price (Rs) 340 PAT (Rs mn) 1,125 1,025 771 45.9% 9.7%

% Upside 46% EPS (Rs) 7.1 6.4 4.8 45.9% 9.7%

Revenue growth will be led by Pharmaceuticals business which will grow by 16% and Ingredients which will grew by 14%.

EBITDA margins are assumed at21% constant QoQ

Lupin





% Upside 5% EPS (Rs) 6.9 6.5 5.2 33.3% 6.9%

Revenue growth will be led by 34% $ growth in US business on back of 35% market share in Geodone, 22% MS in Combivir and launch of Tricor, Seasonale and two more products.

Gross margins are assumed at 63% and EBITDA margins are assumed at 22%

Ranbaxy



Reco Buy EBITDA Margin (%) 13.0 15.5 43.0 -2,997 bps -254 bps


% Upside 15% EPS (Rs) 6.9 8.6 36.0 -80.9% -19.6%

Base revenue will grow by 10% to USD 475 million excluding Lipitor effect last year and Actos this year. Base US revenue assumed USD 114 million and Actos – USD 38 million

Gross margins assumed 60% and EBITDA margins assumed at 13%, whereas base EBITDA margins at 8%

Assumed Rs. 1.44bn PAT from Actos and rest Rs. 1.4 bn from base business


Pharmaceutical


% Chg QoQ Comments

Sun Pharma





% Upside 8% EPS (Rs) 6.8 8.7 6.5 5.9% -21.7%

Revenue growth will be led by 18% growth in US, 16% growth in domestic and 31% growth in ROW. Taro revenue assumed at USD 155mn and a growth 5%.

Gross margins assumed at 82% flat QoQ and EBITDA margins at 43% down 1% QoQ

Torrent





% Upside 8% EPS (Rs) 11.0 11.8 8.9 23.2% -6.5%

Revenues will be driven by 15% growth in India,14% growth in Brazil and 48% growth in US led by launch of Olanzapine, Quetiapine and Clopidogrel earlier in the year

Gross margins are assumed at 71% and EBITDA margins at19% flat QoQ

Unichem





% Upside 0% EPS (Rs) 4.0 4.0 2.7 47.4% -1.3%

Revenue growth will be led by 21% growth in domestic market and same growth in Exports market.

Gross margins assumed at 63% and EBITDA margins assumed at 20% flat QoQ


Pharmaceutical


% Chg QoQ Comments

Pfizer





% Upside -4% EPS (Rs) 18.4 18.3 16.3 13.1% 0.8%

Revenue growth flat on back of subdued growth in company’s top brands – Corex, Becosules, Gelusil & Dolonex

EBITDA margins assumed at 22.6% on back of hive off of low margins Animal Nutrition business

Wockhardt





% Upside 29% EPS (Rs) 31.7 34.3 23.0 37.6% -7.5%

Revenue growth will be led by 18% growth in US in dollor terms to USD 121 mn. India is expected to grow by 7%.

Gross margins are assumed at 68% and EBITDA margins at 35%


Power

n Quarterly Picks – (1) GIPCL (Buy; expect 15-20% earnings upgrade in consensus FY13/14E earnings post 3Q13, Expect 20-

25% upside in built up to and post results), (2) PGCIL (Accumulate, 3Q13 slightly weak numbers already in price. Expect

strong guidance for 4Q13 in the analyst meet and expect the stock to bounce back to Rs120+ levels), (3) Nava Bharat

Ventures (Hold, likely to upgrade. PAT at Rs670mn to give confidence on sustainability of this run rate. Further, commissioning

of 64MW and 150MW in 4Q13 to drive earnings growth (30%+) in FY14E, expect the stock to give 20% returns in next 3-4

months) and (4) NTPC – (Stock has corrected significantly but results to be good with 17% APAT growth driven by

commissioning. We expect Rs10/sh bounce back in the stock post OFS)

n Strong results but no upside - We also see strong results for (1) CESC (Buy, results to be good, PAT growth 28% qoq,

given 1% tariff hike recognition in 3Q13 even for 1H13. But it is a known factor and there is unlikely to be any upgrades in

earnings. However, we continue to like the stock from longer term perspective), (2) JSWE (Sell, results to be good given

merchant tariffs remaining high. But valuations do not warrant upside) and (3) NHPC – Interest on water cess (~Rs1.3bn)

might be recognized this qtr which will lead to better numbers. But stock has already run-up big time and do not expect much

upside unless clarity on Subansiri lower and Parbati II execution.

n Weak results – (1) JPVL (Bina’s low PLF/PAF and lower generation in hydro plants to impact numbers. To report net loss of

Rs90mn, likely earnings downgrade for FY13. However, FY14 earnings may remain unchanged, Stock to remain under

pressure on fund raising overhang), (2) Adani Power (losses to continue but will be lower QoQ. However, 7th Jan SLC meet

decision on permanent linkage to Tiroda and CERC decision on Mundra UMPP tariff increase to drive near term stock price. In

longer term, we remain negative on the stock) and (3) Lanco (losses to continue but will be lower QoQ. Stock performance to

be driven by near term cash flow management).


Power

n Other Events Based Picks – Indiabulls Power (Buy, largest beneficiary of coal price pooling and commissioning lined up in

4Q13) and KSKE (Buy, coal price pooling, 7th Jan SLC meet decision on permanent linkage to Tiroda to set precedent for

Mahanadi, Gare Pelma Stage II forest clearance and commissioning in 1Q14)

n Merchant tariff Trends - Merchant prices on IEX continues to be in the range of Rs3-3.5/unit in rest of the country except

southern region. Southern region prices continue to be at Rs5.5/unit + levels.

n Overall view on the sector – focus to shift to earnings - We believe the major reforms (Coal FSA and SEB restructuring)

are behind us and going forward there will be case specific resolutions (Competitive bidding guidelines, tariff escalation, coal

price pooling, case specific clearances, SLC meet on 7th Jan for permanent linkage to Tiroda etc). We believe now the focus

will shift to case specific earnings, valuations and risk profile. Overall, we reiterate our view that select private utilities will be

multibaggers (KSKE, CESC, Indiabulls Power and Reliance Power) and will outperform regulated utilities (Rs10-15/sh upside

in NTPC/PGCIL) by a big margin.


Power


% Chg QoQ Comments

Adani Power



Reco Sell EBITDA Margin (%) 22.5 10.4 28.5 -603 bps 1,206 bps

Target Price (Rs) 30 PAT (Rs mn) -1,863 -3,730 -633 n.a. n.a.

% Upside -53% EPS (Rs) -0.9 -1.7 -0.3 n.a. n.a.

PLFs improved in 3Q13 (62% vs. 54% in 2Q), more so in Mundra I&II (87%-93%). Tiroda unit 1 is shutdown since 9th Nov due to some technical problems. We have assumed Bunyu coal at 1mn MT (0.80mn MT in 2Q13) and CIL at 0.40mn MT (0.10mn MT in 2Q13). Expect Net loss at Rs1.9bn (not building in any deferred tax). Difficult to estimate earnings in Adani until clarity on Bunyu and CIL coal supplies. However, @ 63, stock is overvalued and likely to maintain Sell. Key things to watch- (1) coal supply from Bunyu, (2) linkage coal supply for Mundra-IV/Tiroda, (3) permanent linkage for Tiroda II (7th Jan meeting) and 4) result of CERC Mundra UMPP petition.

JSW Energy



Reco Sell EBITDA Margin (%) 26.7 27.8 19.8 695 bps -107 bps


% Upside -34% EPS (Rs) 1.2 1.1 0.2 626.2% 9.3%

JSWE will continue to report good numbers with merchant tariffs in southern region remaining at high levels. Net generation to decline by 3% qoq to 5.14BU primarily due to better PLFs at Barmer. Expect PAT of Rs2.0b, higher than 2Q13 mainly due to no under-recovery at Barmer. Key things to watch - (1) Buyers’ credit outstanding and (2) clearance for expansion of lignite mines and 3) final tariff order. We currently have a Sell rating on the stock and are likely to maintain Sell.

Lanco Infra




Target Price (Rs) 14 PAT (Rs mn) -1,942 -2,720 777 n.a. n.a.

% Upside -4% EPS (Rs) -0.8 -1.1 0.3 n.a. n.a.

Gross generation to grow by 29% qoq largely due to higher generation in Udupi and Anpara. Net sales expected to grow by 18% qoq driven by higher revenues in Udupi/Anpara and higher execution in Construction/EPC segment. Expect net loss at Rs1.9b, better qoq mainly due to Udupi performance and lower losses at Anpara. To watch – (i) Realizations at Griffin, (2) gas supply, (3) progress on Udupi/Amarkantak tariff issues, 4) equity dilution at SPV/Holdco. We have Hold Rating.


Power


% Chg QoQ Comments

Reliance Power





% Upside 45% EPS (Rs) 1.5 1.3 1.2 21.0% 13.9%

Rosa’s PLF has been very good at 90% and we have assumed PAF of 93%. However, Butibori is not yet declared commissioned and therefore no profit/loss from Butibori. We have assumed Reliance infra supplies similar to last qtr. Expect PAT of Rs2.47b, up 14% qoq mainly driven by better PLF and PAF. To watch (1) Fuel supply at Rosa & clarity on fuel supply at Butibori, (2) mining cost at Sasan, (3) Update on Tilaiya mine land acquisition and 4) Sasan COD. We have Buy rating on the stock.

Jaiprakash Power



Reco Hold EBITDA Margin (%) 79.6 89.6 90.0 -1,044 bps

-1,004 bps

Target Price (Rs) 45 PAT (Rs mn) -90 3,661 595 n.a. n.a.

% Upside 16% EPS (Rs) 0.0 1.6 0.3 n.a. n.a.

JPVL to report net loss (Rs90mn) mainly driven by lower PLF and availability at Bina (PLF stood at 30%, assumed PAF at 50%). However, PLF has improved to 85%+ towards end of December, so 4Q13 unlikely to have losses from Bina unless 2nd unit after COD runs at low PAF. Further, Hydro plants generation was down 28%YoY (also due to restrictions imposed). Karcham/VishnuPrayag generation was zero on 25th Dec – the last reported date. Overall, there is a risk to FY13 numbers (current FY13E EPS Rs2.7/sh - without any equity dilution and H1FY13 Rs2.4/sh). To watch (1) Merchant realizations at Karcham, (2) funding arrangement to redeem bonds due in 4Q13 and (3) status of coal supply for Bina. Likely to retain Hold on the stock.

KSK Energy





% Upside 22% EPS (Rs) 1.3 1.5 2.0 -33.5% -7.7%

Expect numbers to improve QoQ mainly driven by better PLF at VS lignite (80% vs. 52%) and Wardha (72% vs. 67%). We have assumed fuel cost of Rs2.65/unit at Wardha, any number higher than this will lead to negative surprise. Expect PAT of Rs502mn Key things to watch - (1) coal supply and landed cost at Wardha, (2) coal and gas supply for smaller plants and (3) status on Gare Pelma III and Mahanadi plant. We have a buy rating on the stock.


Power


% Chg QoQ Comments

Nava Bharat





% Upside 12% EPS (Rs) 7.5 7.3 4.2 76.3% 1.9%

Revenue expected at Rs2.72bn, up by ~16%YoY. Ferro alloys business to register stable profits on the back of Tata Steel agreement. Expect similar profits even in power business as tariffs and volumes are similar to 2Q13. Net profit expected at Rs0.67bn. Key things to watch – (1) merchant realizations, (2) status of its Orissa 64MW and AP 150MW power plant, (3) volumes under TISCO contract. We are likely to upgrade the stock on the back of 150MW commissioning. Currently have a hold rating on the stock.

NTPC


Mkt Cap (Rs bn) 1,299 EBITDA (Rs mn) 40,037 42,241 29,050 37.8% -5.2%



% Upside 0% EPS (Rs) 3.2 2.5 2.7 17.0% 27.4%

Est. PAT of Rs26.1b, growth of 17%YoY, is driven by 1) regulated equity increase of 13%YoY and no deferred tax assumed in 3Q13 vs. Rs1b in 3Q12. Generation to increase by 6%YoY to ~59.8BU mainly driven by capacity addition of 2.8GW post 3Q12. Assumed grossing up of RoE at regular tax rate. To watch - (1) coal supply and PAF of its plants, (2) adj. - previous yr sales and other extra ordinaries not pass through, (3) UI income and 4) coal mine allocations through auction and 5) any other trigger created before OFS. We currently have reduce rating on the stock but likely to upgrade to hold post 3Q13 as stock has corrected.

GIPCL



Reco Buy EBITDA Margin (%) 36.3 35.8 23.6 1,276 bps 54 bps


% Upside 15% EPS (Rs) 3.3 3.5 1.1 201.5% -4.3%

GIPCL is one of our top picks for 3Q13 results. PLF for Surat 500MW has been excellent at 90% in 3Q13. Expect Net profit of Rs506mn in 3Q13 – will be 3rd straight qtr of this run rate. Post 3Q13, expect 15-20% upgrades in FY13/14 consensus EPS (Rs10.2 and Rs11.8 for FY13 & FY14E). Our earnings stand at Rs12.6 for FY13 and Rs13.4 for FY14. Based on FY14 numbers, stock has 5.8% dividend yield. We believe stock will run-up by 20-25% in built-up to and post 3Q13 results. To watch – PAF and core ROE. Current Reco - Buy.


Power


% Chg QoQ Comments

CESC



Reco Ur EBITDA Margin (%) 25.9 23.1 21.7 428 bps 281 bps


% Upside -100% EPS (Rs) 14.0 10.9 5.9 136.4% 28.6%

Nos to be good on the back of 1% tariff hike recently. CESC to recognize past two qtrs proportionate tariff impact in this qtr resulting in an increase of Rs360mn in PAT. Expect full year standalone EPS of Rs46.9 (likely to be cut by 2% as tariff hike was slightly lower). We had put CESC on review post last qtr with a positive view and are likely to upgrade to BUY post 3Q13. Do not see much action based on Qtrly results unless there is any significant change in Spencer’s numbers. Key things to watch- (1) Execution status of under-construction plants and (2) profitability in Spencer’s.

PGCIL





% Upside 6% EPS (Rs) 2.1 2.2 1.7 22.3% -4.6%

3Q13 PAT Rs9.8b, gr. of 22%YoY but decline of 5% qoq. QoQ decline is attributed to 1) lower other income and lower short term open access income. We have built a capitalization of Rs30bn in 3Q13, implying a capitalization of Rs85bn in 4Q13, which has downside of Rs10-15bn. However, considering PGCIL will still deliver 16% EPS growth in FY13 and gr. in FY14 to be even stronger, expect the stock to bounce back to Rs120 levels post 3Q13 results. Key things to watch 1) incr. in 12th plan capex and any change in mgmt outlook on equity dilution and 2) capitalization in 4Q13 and FY14.

NHPC





% Upside 4% EPS (Rs) 0.2 0.6 0.2 9.7% -68.7%

Nos could be significantly better if interest on water cess (~Rs1.3b) is recognized in 3Q13 (regulations were notified on 31st Dec but we have not included this in our nos.). PAT of Rs2.3bn, up 10%YoY, despite Chutak exp recognized but not revenues, is driven by Chamera Commissioning. Have built Chutak expenses of Rs250mn but no revenues. Driven by poor river flow and reservoir levels, despite COD of 231MW Chamera-III, gross generation to decline by ~12%YoY to 2.54BU in 3Q13. Key things to watch- (1) RoE grossing up (2) status of dispute with J&K Govt. and (3) status of under construction plants mainly Subansiri and Parbati II. DO not expect further upside in the stock and likely to downgrade the stock from Buy to hold post 3Q13 results.


Power


% Chg QoQ Comments

Tata Power





% Upside -12% EPS (Rs) 1.0 0.6 0.5 92.9% 67.8%

Net sales to grow by 22%YoY and 6% qoq to Rs81bn led by higher generation at Mundra and Maithon. Assumed Rs2009mn of dividend to be received from subsidiary during the quarter at standalone level. Standalone net profit expected at Rs3.4bn. Consolidated net profit on adjusted basis expected to grow by 93%YoY driven by better standalone profits and Key things to watch- (1) Production and realization Bumi, (2) Coal blending at Mundra UMPP and (3) decision on Mundra UMPP tariff petition before CERC. We have a hold rating on the stock.

Indiabulls Power

CMP(Rs) 15 Net Sales (Rs mn) n.a n.a n.a n.a n.a

Mkt Cap (Rs bn) 41 EBITDA (Rs mn) n.a n.a n.a n.a n.a

Reco Buy EBITDA Margin (%) n.a n.a n.a n.a n.a

Target Price (Rs) 21 PAT (Rs mn) n.a n.a n.a n.a n.a

% Upside 37% EPS (Rs) n.a n.a n.a n.a n.a

Boiler light up test conducted for first unit of Amravati Phase-I and first unit expected to be commissioned by Feb’12. Nashik first unit commissioning expected in March12. Recently MERC has given its approval to Nashik PPA. Key trigger for the stock in near term is coal price pooling as Indiabulls is the largest beneficiary. We expect coal price pooling decision in Jan itself. Thereafter, commissioning will be the trigger. Indiabulls Power remains our top pick.


Real Estate

n The Real Estate Q3FY13 results (Emkay Universe) are expected to be a mix bag. DLF’s results would be boosted by booking of NTC Mill land sale although ex-deal, cashflows would not have any significant change QoQ. Oberoi Realty (OBRE) results will be flat QoQ with flat sale bookings nos. expected. Phoenix Mills (PML) financials too are expected to be flat QoQ. Prestige Estates (PEPL) & Sobha Developers’ (SDL) financials to improve QoQ (ex. land monetisation) with couple of projects crossing construction threshold, but surplus cash from the qtr would remain subdued leading to no meaningful change in debt

n Sales bookings across the companies are expected to be subdued. DLF’s sales booking will be boosted by its only launch in the quarter of DLF Sky Court in Gurgaon. PEPL soft launched 3 projects with 3.3msf of SBA in Bangalore which will help it maintain strong sales trajectory. PML had a large residential launch in Bangalore with sales booking of 0.7msf. SDL sold 0.9msf in the quarter for Rs 5.3bn, nearing its target of Rs 20bn sales booking in FY13. OBRE had no launches in Q3FY13 and would maintain sales booking QoQ

Sales Booking (msf) Q3FY13E Q2FY13 Q3FY12

DLF 1.4 1.6 3.3

Oberoi Realty 0.13 0.13 0.13

Prestige Estates 1.7 1.6 1.0

Sobha Developers 0.94 0.95 0.82

n We don’t see any significant change in the o/s debt of the companies except DLF which will report lower debt owning to cash from land sale. SDL and PEPL to have similar debt o/s QoQ while PML consolidated debt would increase due to higher drawing for Shangri La project.

n We expect to increase TP across the companies on lower discount rate due to expected 100 bps cut expected in FY14


Real Estate


% Chg QoQ Comments

DLF

CMP(Rs) 235 Net Sales (Rs mn) 46,646 20,395 20,340 129.3 128.7

Mkt Cap (Rs bn) 399 EBITDA (Rs mn) 15,546 7,464 8,224 156.7 140.5

Reco Accumulate EBITDA Margin (%) 33.3 36.6 40.4 -710bps -327bps

Target Price (Rs) 250 PAT (Rs mn) 6,694 1,385 2,583 159.1 383.3


DLF’s Q3FY13 results will have accounting of NTC Mill land sale for Rs 27.3bn. Company has launched 1 project in the qtr which may result into subdued sales booking of 1.4msf valued at Rs 8bn. Net debt QoQ would be down by ~Rs 15bn as stated on Q2FY13 presentation. New launch status and cashflows timeline of Aman Resorts sale would be the key things to be watched on the Q3FY13 results presentation.

Phoenix Mills (Standalone)

CMP(Rs) 258 Net Sales (Rs mn) 675 665 505 33.6 1.5

Mkt Cap (Rs bn) 37 EBITDA (Rs mn) 452 438 373 21.0 3.2

Reco Accumulate EBITDA Margin (%) 66.9 65.8 73.9 -698bps 109bps

Target Price (Rs) 221 PAT (Rs mn) 336 329 268 25.2 2.1

% Upside -14% EPS (Rs) 2.3 2.3 1.9 n.a. n.a.

Phoenix Mills to continue with steady numbers on the standalone basis. On consolidated basis, the operations will improve on back of strong reported housing sales in Bangalore (W) and soft launch of Shangri La hotel in Q3FY13. We would be upgrading our target price on back of higher than expected residential sales and realisations in the Bangalore (W) project.

Oberoi Realty

CMP 298 Net Sales (Rs mn) 2,629 2,577 1,873 40.4 2.0

Mkt Cap (Rs bn) 98 EBITDA (Rs mn) 1,538 1,496 1,134 33.6 3.2

Reco Buy EBITDA Margin (%) 58.5 58.1 60.5 -205bps 43bps

Target Price (Rs) 315 PAT (Rs mn) 1,275 1,244 1,021 24.9 2.5


Oberoi Realty is expected to report subdued results for Q3FY13. With no new launches, we expect the sales booking to be similar to Q2FY12 at 0.13msf.Profitabiity margins are also expected to be similar QoQ considering the similar mix of revenue contribution across the offerings. As usual, clarity on land purchase, Mulund (W) project’s environmental clearance and Worli project launch is expected in the results coinf. call. We may marginally increase our TP on FY14 rollover.


Real Estate


% Chg QoQ Comments

Sobha Developers


Mkt Cap (Rs bn) 38 EBITDA (Rs mn) 1,380 1,285 948 45.5 7.4

Reco Hold EBITDA Margin (%) 28.6 31.0 31.3 -269bps -241bps



Sobha Developers is expected to report strong nos.YoY and QoQ as we expect a large project to cross construction threshold level during the quarter. Margins are going to dip as there is no revenue from high margin land monetisation is expected in the quarter. SDL sold 0.9msf for Rs 5.3bn maintain its traction and nearing its target sales booking of Rs 20bn in FY13. With most of the sales booking coming from old projects, as no new launches in Q3FY13, the cash inflows from sales would be higher.

Prestige Estates


Mkt Cap (Rs bn) 59 EBITDA (Rs mn) 1,535 725 493 205.9 111.8

Reco Accumulate EBITDA Margin (%) 31.6 30.0 38.5 153bps 157bps

Target Price (Rs) 165 PAT (Rs mn) 1,023 457 263 262.9 124.0


PEPL to report strong financials amid 4 large projects reaching threshold level of completion fully or partially. Sales booking is expected to be subdued at ~ 1.5msf / Rs 7.4bn with 3 soft launches in the qtr. EBITDA margins would improve marginally due to revenue booking from high margin projects like Kingfisher towers. Gross consolidated debt should remain at similar levels QoQ


Telecom

n Despite seasonally strong quarter, companies are expected to report muted volume (1%) and ARPM growth (0.5-1%). Traffic growth for the sector to be muted led by continuous decline in subscribers (DoT has implemented stricter KYC norms and operators are also removing inactive subscribers) and operators have been reducing discounting minutes.

n Domestic wireless revenue is expected to grow 2.3% sequentially for our coverage universe. Bharti and Idea is expected to report growth of 2.6% and 2% qoq, respectively. ARPM growth of 1% for the Bharti and Idea to be backed by data revenue growth as voice ARPM would remain flat qoq.

n Traffic growth for Bharti and Idea is expected to be muted at 1% qoq, due to reduction in discounted minutes in the system and decline in subscriber base. We estimate traffic growth of 1% qoq for Bharti and 0.5% for Idea.

n Net subscriber addition during Q3FY13E is expected to further decline due to 1) implementation of stricter KYC norms implemented by DoT and 2) removal of inactive subscribers from the system.

n Consolidated EBITDA of coverage universe is estimated to grow 2.5% qoq with EBITDA margin at 30%, flat qoq. Lower subscriber acquisition cost to get offset by higher marketing spends during the quarter. APAT is expected to grow 42% qoq for Bharti but decline 2.4% for Idea.

n Regulatory overhang has reduced to some extent with the failure of recently conducted 2G auction but many other issues like spectrum re-farming and abolishment of roaming are yet to be finalized by the regulator. We believe stock prices would remain volatile with the news flow on pending legal issues.

n We maintain our cautious view on the sector with HOLD rating on Bharti and REDUCE on Idea.


Telecom


% Chg QoQ Comments

Bharti Airtel*




Target Price (Rs) 280 PAT (Rs mn) 6,923 4,825 10,113 46% 43.5%

% Upside -14% EPS (Rs) 1.8 1.3 2.7 46% 43.5%

Bharti is expected to report 3% qoq revenue growth. Indian mobile revenue is expected to report 2.6% qoq decline. ARPU is expected at Rs184. We estimate consolidated Adj. EBITDA to grow 2.6% qoq with EBITDA margins of 30.8%. We expect Africa revenue at Rs61.1bn (+1% qoq) and EBITDA margin of 27.1%. In USD terms, revenue is expected to grow 3% QoQ. The watch out factor for Bharti would be overall guidance for African operations, 3G off take and prevailing pricing trend in the domestic market.

Idea Cellular



Reco Reduce EBITDA Margin (%) 26.8 26.8 26.7 11 bps 7 bps


% Upside -21% EPS (Rs) 0.7 0.7 0.6 16.6% -2.4%

Idea Cellular is expected to register revenue growth of 1.6% QoQ. ARPU and MoU is expected to be at Rs 155 and 366, respectively. Voice ARPM continues to remain flat qoq as discounted minutes have been reduced in last couple of months. However, data revenue to support overall ARPM. EBITDA margin at 26.8% is expected to remain stable sequentially. Higher marketing spend would offset impact lower subscriber acquisition cost. PAT is expected at Rs2.3bn as compared to Rs2.4bn in the last quarter.

*Bharti’s numbers for Q2FY13 are adjusted for one-offs pertaining to favorable interconnect judgment


Others


% Chg QoQ Comments

Aban Offshore





% Upside 26% EPS (Rs) 15.8 16.4 16.8 -5.7% -3.2%

We expect Aban Offshore’s Q3FY13 consolidated revenue to decline 0.7%YoY to Rs8.6bn. EBIDTA for the quarter at Rs4.96 bn, is expected to decline 0.9%. However EBITDA margins are expected to remain flattishYoY at 57.7%. Net profit at Rs0.7 bn for the quarter is expected to register decline 5.7%YoY.

Arshiya International

CMP(Rs) 125 Net Sales (Rs mn) 3647 3726 2734 33.4 -2.1

Mkt Cap (Rs bn) 8 EBITDA (Rs mn) 1029 1082 702 46.7 -4.9

Reco Buy EBITDA Margin (%) 28.2 29.0 25.7 255bps -82bps



Arshiya Intl. is expected to report good quarterYoY owning to revenue contribution from Khurja FTWZ which was absent in Q3FY12. On QoQ the financials would be subdued with marginal improvement in profitability due to higher Other Income. Rail business would get marginally affected due to increase in haulage charges in Dec’12. Delay in Khurja DP and rail siding is the major disappointment for the quarter which needs to be checked.

Essel Propack





% Upside 48% EPS (Rs) 1.1 1.5 0.9 23.1% -27.8%

Higher volumes in AMESA (12%YoY) and Europe (2%YoY) coupled with rising share of non-oral care in revenues to drive growth. Expect EAP region to continue growing at a slow pace owing to lower volume off-take. We expect EPL to post revenue growth of 14.7%YoY to Rs 4.8bn. Better product mix on account of non-oral care and reduce loses in Poland would drive margin expansion of 50bpsYoY to 17.2%. Subsequently, expect APAT to grow at 23%YoY to Rs 167mn.


Others


% Chg QoQ Comments

Grasim



Reco Buy EBITDA Margin (%) 19.1 21.7 23.0 -380 -260


% Upside 26% EPS (Rs) 25.8 41.7 29.9 -13.9% -38.2%

Grasim’s standalone net revenue for the quarter is expected to grow by 4.5%yoy to Rs12.98bn with VSF segment reporting growth of 1.6%YoY at Rs11bn whereas the chemical business segment revenues growing 13.2%YoY. VSF realizations are expected to decline by 3% qoq led by price cuts. Overall EBIDTA at Rs2.48bn is expected to decline 13%yoy. Consequently, pre-exceptional net profit at Rs2.36bn is expected to decline 13.9%YoY.

Havells India

CMP 646 Net Sales (Rs mn) 10,295 9,581 8,962 14.9% 7.4%

Mkt Cap (Rs bn) 81 EBITDA (Rs mn) 1,304 1,192 1279.2 1.9% 9.4%

Reco Buy EBITDA Margin (%) 12.7 12.4 14.2 -150 40

Target Price (Rs) 740 PAT (Rs mn) 818 869.7 788.8 3.6% -6.0%

% Upside 15% EPS (Rs) 6.6 7.0 6.3 3.6% -6.0%

New products in ECD & switchgear and added capacities in lighting & luminaries along with festive season would drive 15% revenue growth to Rs 10.3bn. Expect EBIDTA to grow at 2%YoY to Rs 1.3bn, while EBIDTA margins would fall by 150bpsYoY to 12.7% owing to high base effect of corresponding last quarter. We expect APAT to grow at 4%YoYto Rs 818mn. In Sylvania, Europe operations would stagnate, while LATAM may grow 8-10% led by price increase and cross selling new products. Guided 6% EBIDTA margins may be difficult to sustain.

Kajaria Ceramics





% Upside 12% EPS (Rs) 4.0 3.6 2.9 39.4% 10.6%

We estimate revenues to increase by 20%YoY to Rs 4.2bn. Company is likely to report EBITDA of Rs 648mn, 16%YoYwith EBITDA margins of 15.4%. We expect company to report PBT of Rs 425mn, 40%YoY. We expect company to report PAT of Rs 294mn, 39%YoY with margins of 7.0%. EPS is likely to be around Rs 4.0


Others


% Chg QoQ Comments

Piramal Glass





% Upside 65% EPS (Rs) 4.1 0.5 2.3 74.9% 667.6%

Continued growth in premium C&P segment along with improving stabilization in new facility to drive 21%YoY revenue growth to Rs 4.2bn. However, higher fixed cost and sub-optimal product mix of new facility would impact EBIDTA margins. Expect EBIDTA to grow 7%YoY to Rs 918mn. We expect EBIDTA margins to decline 300bpsYoY to 21.9%. However, higher other income would result in APAT growth of 76%YoY to Rs 331mn.

Sterlite Tech


Mkt Cap (Rs bn) 14 EBITDA (Rs mn) 690.2 503.0 522.3 32.1% 37.2%


Target Price (Rs) 34 PAT (Rs mn) 188.5 42.0 94.7 99.0% 347.7%

% Upside -7% EPS (Rs) 0.5 0.1 0.2 99.0% 347.7%

Revenue is expected to grow 14.5% yoy, led by 18% yoy revenue growth in power. Muted revenue growth is expected in telecom segment due to lower dispatches during the quarter. Fibre optic volumes are expected at 2.9mn fkm, down 1.4% yoy. EBITDA margin at 9.1% is expected to improve by 121bps yoy, led by 214bps margin expansion in Telecom segment. Power segment margins are unlikely to show major improvement in current quarter. PAT is expected to improve by 100% yoy due low base last year. Update on UMTP projects, consolidated debt and outlook on EBITDA/Tone for power segment would be key things to out for.


Price Mkt CapCompany Name (Rs) (Rs bn) FY13e FY14e FY13e FY14e FY13e FY14e FY13e FY14e FY13e FY14e FY13e FY14e FY13e FY14e FY13e FY14eAgri Input & Chemicals 351 519,154 550,680 76,611 88,450 38,861 46,548 16.9 20.2 9.0 7.5 1.4 1.2 14.9 16.5 16.1 17.0Chambal Fertilisers 70 29 Accumulate 98 57,390 59,659 7,379 8,025 3,724 4,189 8.9 10.1 7.8 7.0 1.4 1.2 11.1 12.3 19.4 18.9Coromandel International 261 74 Accumulate 340 93,792 102,422 9,145 12,050 5,803 7,961 20.7 28.4 12.6 9.2 2.7 2.3 18.1 23.6 22.8 27.1Deepak Fertilisers 130 11 Buy 172 25,334 23,254 4,002 4,598 2,016 2,533 22.9 28.7 5.7 4.5 0.8 0.7 16.5 18.8 15.6 17.4Dhanuka Agritech 131 7 Buy 150 5,936 6,867 870 1,058 623 754 12.4 15.1 10.5 8.7 2.5 2.0 28.7 29.9 26.1 25.9GNFC 83 13 Buy 105 37,928 41,105 5,739 8,568 2,643 3,771 17.0 24.3 4.9 3.4 0.5 0.4 10.5 14.6 10.1 13.2GSFC 72 29 Hold 70 54,432 55,326 7,883 8,934 5,460 5,879 13.7 14.8 5.3 4.9 0.7 0.6 17.3 16.8 14.5 13.8Rallis India 151 29 Accumulate 153 14,660 16,279 2,486 2,800 1,428 1,632 7.3 8.4 20.5 18.0 4.7 4.1 28.9 29.8 24.2 24.3Tata Chemicals 371 95 Buy 400 148,026 156,795 24,284 25,527 9,746 10,809 38.2 42.4 9.7 8.8 1.3 1.2 13.9 14.2 14.4 14.4United Phosphorus 139 64 Accumulate 172 81,657 88,973 14,823 16,889 7,418 9,022 16.1 19.5 8.7 7.1 1.4 1.2 15.6 17.2 16.6 17.6

Automobiles 3,165 3,403,228 4,010,103 429,221 526,209 225,946 278,949 28.7 35.4 14.0 11.3 3.3 2.7 26.0 28.2 26.8 26.8Ashok Leyland 27 71 Hold 28 128,045 147,750 11,550 13,260 3,993 5,268 1.5 2.0 17.8 13.5 2.4 2.3 12.8 13.5 13.6 17.4Bajaj Auto 2,210 639 Reduce 2,100 202,333 237,703 37,368 48,728 30,377 37,710 105.0 130.3 21.1 17.0 8.5 6.6 61.6 61.5 44.7 43.8Eicher Motors 2,841 77 Reduce 2,400 63,213 78,033 5,647 7,932 3,544 4,474 131.2 165.7 21.6 17.1 4.3 3.5 25.1 26.5 21.5 22.4Hero Motocorp 1,907 381 Buy 2,350 228,923 255,469 33,278 37,070 21,880 22,952 109.6 114.9 17.4 16.6 7.2 6.0 47.3 49.9 45.5 39.3Mah & Mah 953 585 Accumulate 1,100 396,471 461,367 46,381 54,007 32,186 37,943 52.3 61.6 18.2 15.5 4.1 3.4 26.2 27.0 24.3 24.1Maruti Suzuki India 1,588 459 Hold 1,700 431,959 521,319 32,191 49,431 18,261 29,589 63.2 102.4 25.1 15.5 2.7 2.4 14.4 20.9 11.4 16.4Tata Motors 317 931 Accumulate 350 1,881,917 2,229,967 258,580 310,893 113,721 138,548 34.2 41.7 9.3 7.6 2.4 1.9 25.2 26.6 30.1 28.1TVS Motor 47 22 Hold 44 70,367 78,495 4,227 4,888 1,985 2,465 4.2 5.2 11.2 9.1 1.7 1.5 15.6 17.7 16.1 17.9

Auto Ancillaries 336 496,448 572,128 49,604 61,192 23,319 30,152 10.8 13.9 14.4 11.2 3.2 2.6 22.2 25.2 23.9 25.5Amara Raja Batteries 261 45 Buy 320 29,449 35,287 4,701 5,650 2,998 3,667 17.6 21.5 14.9 12.2 4.2 3.2 41.9 40.6 31.6 30.0Apollo Tyres 89 45 Hold 95 141,444 157,466 16,398 18,078 6,974 8,108 13.8 16.1 6.4 5.5 1.3 1.1 20.7 20.5 22.1 21.0CEBBCO 93 5 Buy 130 7,475 9,287 1,349 1,575 748 897 13.6 16.3 6.9 5.7 1.6 1.3 29.8 30.0 26.1 25.6Exide Industries 146 124 Buy 190 63,536 76,064 9,218 12,143 6,194 8,476 7.3 10.0 20.1 14.7 3.5 3.0 26.1 29.9 18.8 22.0Motherson Sumi 200 117 Buy 215 254,543 294,023 17,937 23,746 6,405 9,004 10.9 15.3 18.3 13.0 5.2 4.2 18.2 24.0 31.0 35.4

Cement 1,401 598,250 684,323 138,776 159,741 75,830 86,245 27.3 31.0 18.5 16.2 3.2 2.8 20.9 21.4 18.8 18.6ACC 1,424 267 Accumulate 1,510 109,306 126,293 22,096 27,087 13,638 17,125 72.6 91.1 19.6 15.6 3.4 3.0 24.0 27.4 18.1 20.4Ambuja Cements 205 316 Hold 210 100,526 115,002 26,240 30,313 16,791 19,375 10.9 12.6 18.8 16.3 3.5 3.1 27.2 28.3 19.7 20.4India Cements 91 28 Hold 103 46,365 50,852 9,179 10,272 2,377 3,059 7.7 10.0 11.8 9.2 0.7 0.7 9.4 10.3 6.5 7.9Madras Cements 242 58 Accumulate 245 39,134 44,359 10,830 11,904 3,992 4,615 16.8 19.4 14.4 12.5 2.4 2.1 14.7 15.7 18.0 18.0Orient Paper 82 17 Accumulate 92 28,157 32,180 3,932 4,415 2,109 2,374 10.3 11.6 8.0 7.1 1.3 1.1 19.0 18.6 17.5 16.9Shree Cements 4,606 160 Accumulate 4,420 58,981 66,438 16,790 18,430 8,185 8,195 235.0 235.2 19.6 19.6 4.6 3.8 25.3 21.4 26.4 21.3Ultratech Cement 2,023 555 Hold 1,950 215,782 249,199 49,709 57,322 28,737 31,503 104.9 114.9 19.3 17.6 3.6 3.1 21.4 21.0 20.3 18.8

ROE (%)Reco

Target Price (Rs)

Sales (Rs mn) ROCE (%)PE (x) PB (x)EBITDA (Rs mn) PAT (Rs mn) EPS (Rs)

Valuations


Price Mkt CapCompany Name (Rs) (Rs bn) FY13e FY14e FY13e FY14e FY13e FY14e FY13e FY14e FY13e FY14e FY13e FY14e FY13e FY14e FY13e FY14eConstruction 688 447,345 547,197 134,742 176,651 25,540 34,067 2.9 3.8 26.9 20.2 2.0 1.8 7.3 8.3 7.1 9.1Adani Ports 139 278 Buy 150 40,268 52,313 27,205 34,781 9,151 14,136 4.5 7.0 30.6 19.8 5.1 4.2 7.9 9.2 17.7 23.2Ashoka Buildcon 216 11 Buy 340 19,033 23,076 4,168 4,693 1,168 1,316 22.2 25.0 9.8 8.7 1.0 0.9 3.7 3.0 10.7 10.8GMR Infrastructure 20 79 Hold 21 90,936 146,288 26,948 51,871 -2,180 375 -0.6 0.1 -36.2 210.6 0.8 0.9 3.8 6.5 -2.3 0.4IL&FS Transportation 219 43 Accumulate 221 70,093 69,324 18,754 21,647 4,903 4,471 25.2 23.0 8.7 9.5 1.4 1.2 12.4 11.9 17.0 13.7IRB Infrastructure 133 44 Buy 230 36,603 44,150 15,935 18,520 4,556 4,462 13.7 13.4 9.7 9.9 1.4 1.2 11.6 10.3 15.0 13.1IVRCL 47 14 Hold 39 52,385 59,352 4,342 5,216 70 487 0.2 1.6 204.3 29.5 0.6 0.6 9.0 9.1 0.3 2.1Jaiprakash Associates 102 219 Hold 93 138,027 152,695 37,389 39,922 7,872 8,821 3.7 4.1 27.4 24.5 1.9 1.7 8.8 9.6 6.6 7.3

Consumers 3,234 784,563 916,856 123,057 146,650 87,985 103,214 18.2 21.4 36.8 31.3 15.4 12.5 55.1 54.2 47.8 44.1Asian Paints 4,395 422 Sell 3,340 113,837 130,574 18,152 21,066 11,990 13,753 125.0 143.4 35.2 30.7 11.8 9.3 47.4 43.4 37.9 33.8Berger Paints 157 54 Accumulate 152 33,914 38,361 3,480 4,040 2,087 2,409 6.0 7.0 26.0 22.5 5.8 4.9 26.6 26.9 24.2 23.6Colgate-Palmolive 1,541 210 Buy 1,400 30,947 35,841 6,413 7,589 5,486 6,400 40.3 47.1 38.2 32.7 37.6 29.9 151.3 140.5 110.5 101.8Glaxosmithkline Consumer 3,845 162 Accumulate 3,400 30,588 34,930 5,993 6,882 4,420 5,078 105.1 120.7 36.6 31.8 11.7 9.7 53.9 51.1 35.0 33.3Godrej Consumer Products 721 245 Sell 580 65,034 78,292 11,102 13,687 7,195 9,140 21.1 26.9 34.1 26.8 7.2 6.1 22.4 25.2 23.2 24.6Hindustan Unilever 529 1,145 Hold 490 255,546 289,108 39,482 46,462 32,258 36,104 14.9 16.7 35.5 31.7 22.8 18.4 105.5 90.8 75.6 64.2Jubilant FoodWorks 1,327 86 Sell 1,000 14,457 20,223 2,594 3,646 1,494 2,101 23.0 32.3 57.8 41.1 20.0 14.4 59.7 60.1 40.9 40.7Marico 228 147 Accumulate 208 47,965 55,888 6,560 7,666 4,228 5,087 6.6 7.9 34.7 28.9 7.3 6.1 27.2 26.0 26.9 23.0Nestle 4,900 472 Accumulate 5,000 82,998 100,072 17,564 21,250 10,435 12,694 108.2 131.7 45.3 37.2 29.4 27.4 63.1 79.6 72.5 76.2Page Industries 3,400 38 Sell 2,849 8,481 10,638 1,700 2,130 1,144 1,418 102.6 127.1 33.2 26.8 18.3 14.7 64.7 60.9 61.4 61.0Titan Industries 286 254 Buy 285 100,796 122,930 10,018 12,232 7,250 9,032 8.2 10.2 35.0 28.1 13.2 10.1 62.3 58.9 43.1 40.8

Eng. & Capital Goods 1,937 1,595,232 1,681,047 222,255 222,181 131,628 126,701 28.6 27.5 14.7 15.3 2.6 2.3 16.5 14.4 18.7 15.8BHEL 243 595 Hold 220 466,404 410,811 90,698 69,942 62,211 47,388 25.4 19.4 9.6 12.5 2.0 1.8 32.2 20.7 22.5 14.9Blue Star 180 16 Buy 215 27,933 31,252 1,668 2,505 964 1,431 10.7 15.9 16.8 11.3 3.0 2.6 17.8 28.1 19.0 24.7Cummins India 534 148 Accumulate 500 43,307 50,764 8,021 9,436 6,261 7,370 22.6 26.6 23.6 20.1 6.9 6.4 41.6 44.7 29.8 33.0Elecon Engineering 49 5 Hold 56 12,982 14,174 1,906 2,077 612 695 6.6 7.5 7.4 6.5 0.9 0.8 15.2 15.4 13.1 13.6Greaves Cotton 81 20 Buy 90 19,124 21,489 2,468 2,861 1,462 1,709 6.0 7.0 13.5 11.6 2.8 2.4 28.9 29.9 21.8 22.3Larsen & Toubro 1,615 993 Accumulate 1,759 728,008 828,921 92,644 106,503 52,349 57,972 85.5 94.7 18.9 17.1 2.9 2.6 11.1 11.1 16.7 16.1Lakshmi Machine Works 2,270 26 Hold 1,923 22,855 25,836 2,871 3,395 1,542 1,869 136.9 165.9 16.6 13.7 2.6 2.2 23.4 25.4 16.4 17.4Mcnally Bharat Engineering 100 3 Hold 110 27,632 30,748 2,015 2,258 552 591 17.8 19.0 5.6 5.3 0.8 0.7 15.7 15.4 14.2 13.4Punj Lloyd 62 21 Accumulate 74 121,247 129,710 11,494 12,318 129 562 0.4 1.7 159.0 36.5 0.7 0.7 9.7 9.8 0.4 1.9Thermax 623 74 Hold 505 56,455 60,618 4,890 5,493 3,282 3,770 27.5 31.6 22.6 19.7 4.0 3.5 23.6 23.9 18.8 18.9TRF 243 3 Sell 180 12,441 14,266 599 892 -26 204 -2.4 18.5 -102.0 13.1 1.7 1.6 7.6 11.0 -1.7 12.6Voltas 107 35 Accumulate 121 56,843 62,458 2,979 4,499 2,290 3,140 6.9 9.5 15.4 11.2 2.1 1.9 20.3 24.8 14.7 17.7

ROE (%)Reco

Target Price (Rs)


Valuations


Price Mkt CapCompany Name (Rs) (Rs bn) FY13e FY14e FY13e FY14e FY13e FY14e FY13e FY14e FY13e FY14e FY13e FY14e FY13e FY14e FY13e FY14eFin. Services - Others 88 12,685 16,000 3,994 5,077 2,858 3,472 35.7 43.4 30.7 25.2 11.5 9.2 59.8 59.5 41.2 40.4CRISIL 1,044 73 Accumulate 1,050 10,072 12,901 3,247 4,168 2,252 2,788 32.1 39.8 32.5 26.2 16.1 12.0 85.5 78.1 57.4 52.4ICRA 1,430 14 Hold 1,300 2,613 3,099 748 909 606 684 60.6 68.4 23.6 20.9 4.6 4.2 27.8 30.5 20.1 20.9

IT Services 5,778 2,017,296 2,173,787 488,592 516,763 376,096 399,936 48.7 51.8 15.4 14.4 4.0 3.4 35.3 32.3 28.4 25.8eClerx Services 702 21 Hold 720 6,656 7,537 2,562 2,803 1,683 2,086 56.0 69.4 12.5 10.1 4.9 3.9 55.1 54.7 43.4 42.7HCL Tech 636 441 Accumulate 650 248,649 271,179 50,071 51,543 33,232 34,410 47.3 49.0 13.4 13.0 3.4 2.9 31.5 27.9 27.9 24.1Hexaware Technologies 89 26 Hold 100 21,301 23,724 4,188 4,755 3,196 3,686 10.6 12.3 8.4 7.3 2.0 1.7 32.0 32.7 24.9 25.5Infinite Computer 131 6 Buy 140 13,924 15,181 2,370 2,600 1,376 1,555 32.0 36.1 4.1 3.6 0.9 0.8 29.4 28.7 24.7 23.6Infosys 2,350 1,349 Accumulate 2,575 404,442 433,841 118,765 127,836 92,176 99,367 161.3 173.9 14.6 13.5 3.7 3.1 37.4 35.3 26.5 25.2Mahindra Satyam 108 127 Accumulate 125 77,563 83,630 16,495 16,253 12,450 12,955 10.6 11.0 10.2 9.8 2.2 1.8 27.0 23.1 23.9 20.0Mindtree 694 29 Buy 750 23,447 25,363 4,794 4,555 3,214 3,239 78.4 79.0 8.8 8.8 2.3 1.9 36.5 30.3 29.3 23.5Mphasis 393 83 Reduce 375 53,575 59,761 10,511 11,454 7,922 8,038 37.6 38.1 10.4 10.3 1.9 1.7 23.7 22.2 19.1 17.5NIIT Tech 257 15 Accumulate 325 19,800 21,839 3,320 3,794 2,176 2,382 36.3 39.7 7.1 6.5 1.4 1.2 29.8 27.8 22.0 20.6Persistent Systems 535 21 Hold 425 12,856 13,800 3,377 3,185 1,921 1,868 48.0 46.7 11.1 11.5 2.1 1.8 31.9 24.3 23.4 17.2TCS 1,295 2,535 Hold 1,200 630,443 679,113 181,321 193,987 136,481 146,698 69.7 75.0 18.6 17.3 6.4 5.4 51.3 45.8 38.2 33.9Tech Mahindra 941 120 Accumulate 1,050 68,638 76,455 14,081 14,346 14,548 14,557 111.1 111.1 8.5 8.5 2.3 1.8 20.4 17.7 31.0 24.2Wipro 408 1,004 Reduce 360 436,002 462,364 76,736 79,652 65,721 69,095 26.8 28.2 15.2 14.5 3.0 2.7 24.1 22.3 21.4 19.7

Media & Entertainment 405 110,389 124,845 24,729 30,756 11,261 16,100 4.1 5.9 36.0 25.2 5.7 4.9 0.4 0.5 0.4 0.5DB Corp 237 43 Hold 219 15,915 17,476 3,639 4,327 2,081 2,602 11.4 14.2 20.9 16.7 4.4 3.9 26.7 30.4 21.9 24.8Dish TV 79 84 Accumulate 79 22,286 25,932 6,210 7,874 -831 491 -0.8 0.5 -101.0 171.0 -84.2 -165.7 4.5 15.2 86.2 -65.3HT Media 103 24 Hold 107 20,689 22,349 2,929 3,235 1,731 2,089 7.4 8.9 13.9 11.6 1.5 1.3 14.0 14.9 11.3 12.2Jagran Prakashan 111 35 Hold 108 15,499 17,437 3,182 3,842 1,672 2,261 5.3 7.1 21.0 15.5 4.1 3.6 18.9 24.5 20.7 24.6Zee Entertainment 228 219 Buy 275 36,000 41,651 8,770 11,477 6,608 8,658 6.9 9.1 32.9 25.1 5.7 5.0 26.6 30.3 18.3 21.2

ROE (%)Reco

Target Price (Rs)


Valuations


Price Mkt CapCompany Name (Rs) (Rs bn) FY13e FY14e FY13e FY14e FY13e FY14e FY13e FY14e FY13e FY14e FY13e FY14e FY13e FY14e FY13e FY14eMetals & Mining 3,197 3,875,164 4,304,645 633,794 766,414 325,273 386,546 16.3 19.3 9.8 8.3 1.1 1.0 11.9 12.7 12.2 13.1Bhushan Steel 478 102 Reduce 408 113,178 143,217 34,918 42,229 10,021 13,228 44.2 58.4 10.8 8.2 1.3 1.1 8.9 9.8 12.7 14.6Godawari Power 119 4 Buy 151 24,450 25,032 3,833 4,375 1,324 1,475 41.7 46.4 2.8 2.6 0.5 0.4 14.4 12.9 17.6 16.5HEG 236 9 Hold 235 17,587 20,069 3,362 4,030 1,861 2,082 46.6 52.1 5.1 4.5 1.0 0.9 12.7 13.9 21.0 20.8Hindalco 133 255 Buy 134 816,925 904,832 76,847 92,769 27,230 34,316 14.2 17.9 9.4 7.4 0.7 0.7 6.7 7.4 8.2 9.6Hindustan Zinc 141 597 Buy 146 116,162 130,923 61,691 71,148 62,017 67,461 14.7 16.0 9.6 8.9 1.9 1.6 24.1 23.0 21.2 19.7JSW Steel 827 185 Accumulate 743 393,935 413,433 67,599 74,347 18,294 20,871 82.0 93.5 10.1 8.8 1.0 0.9 11.7 11.6 10.6 11.1NMDC 165 652 Hold 196 114,095 126,872 86,168 95,641 72,373 78,244 18.3 19.7 9.0 8.3 2.2 1.9 39.9 36.5 27.0 24.7SAIL 96 396 Hold 82 468,666 560,145 62,803 78,385 32,606 37,233 7.9 9.0 12.1 10.6 0.9 0.9 8.5 8.9 8.0 8.6Sesa Goa 201 175 Hold 153 25,381 75,856 7,734 28,583 24,258 34,197 27.9 39.3 7.2 5.1 1.0 0.9 3.5 12.1 15.2 18.7Sterlite Industries 120 402 Hold 92 431,600 466,473 98,279 114,093 55,887 57,823 16.5 17.1 7.2 7.0 0.8 0.7 14.2 14.0 11.5 10.8Tata Steel 433 421 Reduce 349 1,353,184 1,437,795 130,560 160,814 19,401 39,617 20.0 40.8 21.7 10.6 0.9 0.9 8.3 9.8 4.2 8.4

Oil & Gas 8,031 13,954,508 13,378,576 1,450,393 1,501,824 786,880 791,145 38.1 38.3 10.2 10.2 1.6 1.4 16.0 15.3 16.5 14.9BPCL 383 277 Accumulate 397 2,237,311 2,103,540 50,879 56,974 16,952 21,291 23.4 29.4 16.3 13.0 1.6 1.4 9.2 10.0 9.9 11.5Cairn India 343 655 Buy 385 169,231 149,272 130,250 104,310 109,674 89,191 57.5 46.8 6.0 7.3 1.2 1.1 23.2 16.4 21.7 15.3GAIL 370 469 Buy 406 451,957 489,736 60,447 68,074 37,076 41,710 29.2 32.9 12.6 11.2 1.9 1.8 18.1 18.5 16.0 16.4Gujarat Gas 306 39 Hold 292 35,030 37,046 4,656 4,847 3,009 3,129 23.5 24.4 13.0 12.5 3.1 2.6 30.3 26.9 26.1 22.4Gujarat State Petronet 81 46 Accumulate 86 11,150 11,236 10,147 10,191 4,911 4,848 8.7 8.6 9.3 9.4 1.6 1.4 19.2 17.5 18.4 15.7HPCL 323 109 Buy 360 1,860,707 1,775,542 48,538 51,171 14,146 15,075 41.7 44.5 7.7 7.3 0.8 0.7 7.3 7.5 10.3 10.2Indian Oil 286 694 Accumulate 320 3,950,373 3,764,673 208,498 207,749 82,048 82,350 33.8 33.9 8.5 8.4 1.1 1.0 8.7 8.4 13.6 12.5Indraprastha Gas 258 36 Ur 32,180 36,379 7,334 8,246 3,350 3,648 23.9 26.1 10.8 9.9 2.5 2.1 31.2 27.8 25.3 23.4Petronet LNG 167 125 Buy 194 299,614 364,355 19,643 22,226 10,743 10,644 14.3 14.2 11.6 11.7 2.8 2.4 22.5 20.3 27.1 22.1Oil India 484 291 Accumulate 573 113,976 116,264 43,220 43,053 37,247 37,572 62.0 62.5 7.8 7.7 1.4 1.3 27.5 25.0 19.7 17.7ONGC 287 2,455 Accumulate 313 1,566,499 1,603,119 557,111 594,157 262,829 268,854 30.7 31.4 9.3 9.1 1.6 1.5 23.4 22.9 18.2 16.8Reliance Industries 866 2,836 Hold 827 3,226,480 2,927,416 309,671 330,827 204,894 212,832 63.2 65.0 13.7 13.3 1.9 1.7 12.5 12.0 14.8 13.7

Paper 29 82,067 85,977 16,931 19,571 3,031 3,896 3.5 4.5 9.4 7.3 0.6 0.6 7.0 7.9 6.4 7.8Ballarpur Inds 23 15 Accumulate 27 50,896 50,720 11,143 12,130 1,738 2,630 2.7 4.0 8.8 5.8 0.5 0.5 7.2 8.1 6.0 8.6JK Paper 41 6 Sell 30 13,844 18,157 1,471 2,509 342 -15 2.5 -0.1 16.3 -358.7 0.6 0.7 3.5 4.6 4.0 -0.2Tamilnadu Newsprint 111 8 Buy 148 17,327 17,100 4,316 4,931 951 1,282 13.7 18.5 8.1 6.0 0.7 0.7 9.2 10.5 9.5 12.0

ROE (%)Reco

Target Price (Rs)


Valuations


Price Mkt CapCompany Name (Rs) (Rs bn) FY13e FY14e FY13e FY14e FY13e FY14e FY13e FY14e FY13e FY14e FY13e FY14e FY13e FY14e FY13e FY14ePharmaceuticals 3,049 935,929 1,056,074 239,794 258,511 158,496 171,920 34.9 37.9 19.2 17.7 4.7 3.8 26.3 24.8 27.1 23.6Aurobindo Pharma 202 59 Buy 230 54,745 63,102 9,359 10,759 4,582 5,508 15.7 18.9 12.8 10.7 2.1 1.8 14.5 17.3 17.8 18.1Cadila Healthcare 902 185 Buy 1,000 62,569 72,426 13,384 16,099 8,294 10,142 40.5 49.5 22.3 18.2 5.9 4.6 22.8 24.6 29.0 28.4Cipla 419 337 Hold 350 78,791 91,787 19,422 22,464 12,288 14,104 15.3 17.6 27.4 23.9 3.9 3.4 19.6 19.7 14.6 14.8Dishman Pharma 118 10 Accumulate 107 12,501 13,818 2,875 3,184 904 1,082 11.2 13.4 10.6 8.8 0.9 0.9 10.8 11.6 10.1 10.3Divi's Lab 1,105 147 Buy 1,250 21,566 27,016 8,356 10,468 6,135 7,555 46.2 56.9 23.9 19.4 5.5 4.4 32.3 32.2 25.6 25.3Dr. Reddy's Lab 1,901 323 Hold 1,730 121,255 143,501 28,170 32,591 17,567 20,533 103.6 121.1 18.4 15.7 5.0 3.9 27.3 27.9 30.7 28.0Glaxosmithkline Pharma 2,164 183 Reduce 1,963 27,088 30,878 9,309 10,726 7,050 8,068 83.2 95.3 26.0 22.7 8.3 7.1 52.6 52.5 33.8 33.8Glenmark Pharma 529 143 Buy 500 47,458 54,957 9,302 10,991 5,445 6,749 20.1 24.9 26.3 21.2 4.9 4.0 18.0 19.4 20.3 20.7Ipca Lab 510 64 Buy 525 27,794 31,943 6,117 7,029 4,071 4,672 32.7 37.5 15.6 13.6 3.9 3.1 26.9 26.3 28.4 25.6Jubilant Life Sciences 234 37 Buy 340 49,703 57,676 10,134 11,968 4,189 5,350 26.3 33.6 8.9 7.0 1.4 1.2 11.9 13.9 17.5 18.8Lupin 605 271 Buy 630 87,617 100,998 19,028 21,982 11,588 14,056 26.0 31.5 23.3 19.2 5.4 4.3 29.7 29.6 25.9 25.1Pfizer 1,170 35 Hold 1,116 10,528 12,045 2,014 2,334 1,953 2,220 65.5 74.4 17.9 15.7 2.4 2.2 22.4 22.7 14.4 14.6Ranbaxy Labs 516 218 Buy 590 131,344 126,480 34,926 22,388 25,742 15,210 61.1 36.1 8.4 14.3 4.1 3.2 39.4 20.2 64.0 24.9Sun Pharma 743 769 Buy 800 104,083 116,169 42,725 46,802 32,559 37,612 31.4 36.3 23.6 20.5 5.2 4.2 30.3 27.5 24.6 22.9Torrent Pharma 733 62 Buy 785 32,013 36,100 6,230 7,055 3,826 4,496 45.2 52.5 16.2 14.0 4.5 4.2 30.3 30.7 33.2 31.2Unichem Labs 192 23 Hold 192 10,618 12,189 1,758 2,164 1,141 1,435 12.6 15.9 15.2 12.1 2.3 2.0 18.4 20.1 16.2 17.9Wockhardt 1,684 184 Buy 2,160 56,256 64,989 16,685 19,506 11,161 13,127 102.0 120.0 16.5 14.0 7.1 4.7 32.5 34.8 52.7 40.4

Power 3,214 1,566,397 2,004,109 494,040 681,400 194,227 255,555 4.6 6.0 16.5 12.6 1.5 1.4 7.8 9.2 9.5 11.6Adani Power 65 154 Sell 30 73,727 150,991 14,512 55,852 -10,064 8,225 -4.2 3.4 -15.3 18.8 2.8 2.4 1.3 6.4 -16.5 13.7CESC 316 40 Ur 50,492 53,510 12,484 13,231 5,889 5,784 46.9 46.0 6.7 6.9 0.7 0.7 9.3 8.7 11.5 10.3Gujarat Industries Power 73 11 Buy 87 14,679 15,143 4,995 4,984 1,904 2,024 12.6 13.4 5.8 5.4 0.7 0.7 14.0 14.1 12.7 12.4Indiabulls Power 16 41 Buy 21 5,518 51,204 2,442 26,348 359 8,385 0.2 3.8 97.5 4.2 0.8 0.7 1.3 11.3 0.8 17.2Jaiprakash Power Ventures 39 101 Hold 45 25,535 41,939 21,716 31,437 6,066 8,549 2.4 3.0 16.1 12.8 1.8 1.4 7.3 8.4 13.0 13.0JSW Energy 69 113 Sell 45 90,064 100,879 24,909 30,129 7,738 10,349 4.7 6.3 14.6 10.9 1.7 1.5 10.3 12.2 12.7 14.8KSK Energy 61 23 Buy 76 23,134 39,255 9,318 16,908 1,796 2,136 4.8 5.5 12.7 11.0 0.6 0.5 4.5 6.8 4.9 5.3Lanco Infratech 15 35 Hold 14 134,926 200,448 30,007 58,664 -3,932 3,330 -1.6 1.4 -8.9 10.5 0.6 0.6 4.9 9.0 -7.1 6.0Nava Bharat Ventures 180 16 Hold 204 13,396 16,169 3,266 4,074 2,710 3,009 30.3 33.7 5.9 5.4 0.6 0.6 10.2 9.2 11.1 11.0NHPC 25 309 Buy 26 54,788 64,909 35,128 43,614 23,001 25,952 1.9 2.1 13.4 11.9 1.0 1.0 5.7 6.1 7.9 9.0NTPC 159 1,309 Reduce 158 606,251 702,000 149,290 166,375 97,546 106,901 11.8 12.7 13.5 12.5 1.6 1.5 8.9 8.8 12.6 12.8Power Grid Corporation 114 529 Accumulate 121 128,298 156,849 106,650 127,450 41,003 49,900 8.9 10.8 12.9 10.6 1.9 1.7 9.2 9.8 15.1 16.6Reliance Power 97 271 Buy 140 50,464 65,138 20,714 29,613 10,173 10,759 3.6 3.8 26.7 25.2 1.5 1.4 4.8 4.6 5.6 5.6Tata Power 110 261 Hold 95 295,126 345,674 58,607 72,723 10,038 10,254 4.2 4.3 26.0 25.4 2.1 2.0 9.1 10.3 8.2 7.9

ROE (%)Reco

Target Price (Rs)


Valuations


Price Mkt CapCompany Name (Rs) (Rs bn) FY13e FY14e FY13e FY14e FY13e FY14e FY13e FY14e FY13e FY14e FY13e FY14e FY13e FY14e FY13e FY14eReal Estate 637 170,558 171,446 73,702 77,388 28,977 34,710 11.2 13.4 22.0 18.4 1.7 1.5 10.0 10.5 8.0 8.8DLF 236 401 Accumulate 250 110,781 94,579 50,075 43,955 15,048 15,919 8.9 9.4 26.7 25.2 1.5 1.4 8.6 7.7 5.8 5.7Oberoi Realty 304 100 Buy 315 14,433 18,777 8,488 13,716 7,051 10,350 21.5 31.5 14.1 9.6 2.3 1.8 22.9 30.0 17.3 21.1Phoenix Mills 257 37 Accumulate 221 7,387 9,370 3,868 5,557 1,907 1,888 13.2 13.0 19.5 19.7 2.0 1.8 8.6 11.2 10.7 9.7Prestige Estates 185 61 Accumulate 165 18,574 25,313 5,315 7,339 2,407 3,537 7.3 10.8 25.2 17.2 2.6 2.3 10.9 13.8 10.7 14.2Sobha Developers 391 38 Hold 380 19,383 23,408 5,956 6,820 2,564 3,016 26.2 30.8 15.0 12.7 1.7 1.6 15.8 16.5 12.2 13.0

Telecommunications 1,791 1,267,986 1,357,788 380,231 418,288 50,868 73,953 5.5 7.9 35.2 24.2 1.6 1.5 7.0 8.0 4.7 6.5Bharti Airtel 330 1,252 Hold 280 805,418 863,839 248,352 275,201 32,151 47,945 8.5 12.6 38.9 26.1 2.2 2.0 8.2 9.5 5.8 8.1Idea Cellular 110 364 Reduce 87 217,456 238,002 58,319 66,755 9,796 15,065 3.0 4.6 37.1 24.1 2.6 2.3 9.4 11.8 7.2 10.2Reliance Communications 82 170 Reduce 49 215,449 222,859 65,998 67,731 6,987 8,752 3.4 4.2 24.3 19.4 0.5 0.4 4.0 4.1 1.9 2.3Tulip Telecom 35 5 Reduce 92 29,662 33,088 7,563 8,601 1,934 2,191 13.3 15.1 2.6 2.3 0.3 0.3 11.6 11.9 12.1 12.1

Others 443 477,988 546,116 105,163 122,003 39,630 47,043 38.6 45.4 11.2 9.4 1.6 1.4 14.8 15.5 15.3 15.8Aban Offshore 406 18 Accumulate 500 36,316 37,553 20,681 21,622 2,910 4,985 66.9 114.5 6.1 3.5 0.6 0.5 9.4 10.0 10.8 16.3Arshiya International 125 8 Buy 172 14,910 18,966 4,326 6,157 1,470 1,855 23.8 25.6 5.3 4.9 0.7 0.7 10.7 13.0 15.1 15.1Essel Propack 42 7 Buy 62 18,558 20,732 3,195 3,604 680 906 4.3 5.8 9.7 7.3 0.7 0.7 12.4 13.9 7.5 9.3Grasim Industries 3,179 292 Buy 4,000 268,269 311,919 61,247 71,553 27,835 30,274 303.5 330.1 10.5 9.6 1.5 1.3 16.9 16.9 15.2 14.5Havells India 652 81 Buy 740 73,461 81,794 6,928 7,954 3,890 4,677 31.2 37.5 20.9 17.4 6.5 5.0 31.2 32.3 35.2 32.7Kajaria Ceramics 236 17 Buy 260 15,437 17,401 2,432 2,798 1,095 1,373 14.9 18.7 15.9 12.7 4.7 3.6 30.6 33.3 33.7 32.4Piramal Glass 88 7 Buy 145 17,270 19,793 3,520 4,215 987 1,489 12.2 18.4 7.2 4.8 1.7 1.3 16.2 19.5 26.1 31.0Sterlite Tech 34 13 Hold 34 33,766 37,958 2,833 4,099 763 1,484 1.9 3.8 17.3 8.9 1.1 1.0 10.3 13.2 6.5 11.7

ROE (%)Reco

Target Price (Rs)


Valuations


Price Mkt Cap

Company Name (Rs) (Rs bn) FY13e FY14e FY13e FY14e FY13e FY14e FY13e FY14e FY13e FY14e FY13e FY14e FY13e FY14e FY13e FY14e

Banks & Fin. Services 8,679 1,680,005 2,007,134 1,331,078 1,612,956 670,495 844,069 49.7 61.9 12.9 10.3 1.9 1.7 1.7 1.8 16.3 17.8

Allahabad Bank 186 93 Hold 145 52,847 63,206 36,883 43,807 15,640 21,926 31.3 43.8 6.0 4.2 1.1 0.9 0.8 1.0 14.1 17.4

Andhra Bank 128 72 Hold 105 37,848 48,366 27,579 35,494 13,268 15,752 23.7 28.1 5.4 4.6 1.0 0.9 1.0 1.0 16.5 16.9

Axis Bank 1,384 591 Reduce 1,050 96,477 117,711 90,476 111,380 49,007 61,261 114.3 141.7 12.1 9.8 2.2 1.9 1.5 1.6 19.2 19.9

Bank of Baroda 888 348 Hold 800 118,889 145,211 97,456 120,882 54,277 67,439 131.6 163.5 6.7 5.4 1.2 1.1 1.1 1.2 18.3 19.4

Bank of India 369 212 Reduce 240 93,083 112,210 74,838 91,848 26,788 34,224 46.6 59.6 7.9 6.2 1.3 1.1 0.6 0.7 12.2 14.2

Canara Bank 529 234 Reduce 380 79,581 90,941 56,193 65,636 27,268 29,864 61.6 67.4 8.6 7.9 1.3 1.2 0.7 0.7 11.5 11.5

Corporation Bank 490 73 Hold 440 33,558 38,052 27,770 31,706 14,175 15,039 95.7 101.5 5.1 4.8 0.9 0.8 0.8 0.8 16.1 15.3

Dewan Housing 222 26 Accumulate 243 6,321 7,892 4,729 5,821 3,391 4,224 29.0 36.1 7.7 6.1 1.4 1.1 1.4 1.4 15.6 17.0

Federal Bank 532 91 Hold 500 21,408 25,980 16,288 20,223 8,830 10,724 51.6 62.7 10.3 8.5 1.6 1.3 1.4 1.4 14.6 15.9

HDFC 830 1,280 Reduce 700 58,068 67,859 63,999 74,838 47,558 55,380 30.9 36.0 26.9 23.1 4.5 4.4 2.6 2.6 20.1 19.1

HDFC Bank 675 1,598 Hold 620 149,017 184,114 111,488 143,645 67,372 88,235 28.5 37.1 23.7 18.2 4.6 3.8 1.8 2.0 20.5 22.4

ICICI Bank 1,181 1,358 Hold 1,100 135,719 159,466 129,321 152,816 79,820 95,504 69.2 82.8 17.1 14.3 2.1 1.9 1.6 1.7 12.6 13.8

LIC Housing Finance 297 150 Accumulate 280 15,042 20,830 14,758 20,351 10,438 15,826 20.7 31.3 14.4 9.5 2.4 2.0 1.4 1.8 17.2 22.5

Mah & Mah Fin. Services 1,204 137 Hold 935 22,470 28,815 15,510 19,573 8,842 10,425 78.5 92.5 15.3 13.0 3.1 2.6 4.0 3.6 23.6 21.0

Manappuram Finance 43 36 Reduce 30 14,117 14,117 7,516 7,237 4,880 4,477 5.8 5.3 7.5 8.1 1.3 1.2 3.7 2.8 18.9 15.0

Punjab National Bank 911 309 Reduce 610 150,524 176,001 113,854 136,640 49,782 61,580 146.8 181.6 6.2 5.0 1.4 1.2 1.0 1.1 16.7 17.9

South Indian Bank 29 39 Hold 25 12,831 15,950 8,255 10,496 4,794 6,328 3.6 4.7 8.2 6.2 1.4 1.2 1.1 1.1 18.6 19.5

State Bank of India 2,492 1,672 Reduce 1,750 453,310 534,228 334,893 395,344 140,321 186,824 209.1 278.4 11.9 9.0 2.2 1.8 1.0 1.1 15.6 17.9

Union Bank of India 280 154 Reduce 190 77,459 91,934 55,674 68,928 22,375 29,879 40.6 54.3 6.9 5.2 1.4 1.1 0.8 0.9 14.4 17.0

United Bank Of India 85 31 Buy 75 30,160 34,867 23,230 27,449 8,847 10,841 23.1 25.4 3.7 3.3 0.8 0.7 0.8 0.9 17.1 17.7

Yes Bank 493 176 Hold 440 21,276 29,383 20,369 28,839 12,821 18,317 35.7 42.3 13.8 11.7 3.1 2.2 1.6 1.8 24.5 23.7

Net Interest Income Pre Provision Profit

EPS (Rs) PE (x) PB (x) ROA (%)Target

Price (Rs)Reco

(Rs mn) (Rs mn) PAT (Rs mn) ROE (%)

Valuations


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Q3FY13 Results Preview

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