Page 1
Chitra Katha
A story told through charts...
India Chitra Katha
Market data
BSE Sensex 28,813
NSE Nifty 8,897
Date Feb 28, 2017
Performance (%)
1m 3m 12m
BSE200 3% 11% 31%
Sensex 3% 9% 24%
Find Spark Research on Bloomberg (SPAK <go>),
Thomson First Call, Reuters Knowledge and Factset
GAUTAM SINGH [email protected] +91 22 4228 8152
GAURAV NAGORI, CFA [email protected] +91 44 4344 0072
-15%
-5%
5%
15%
25%
35%
Feb-16 May-16 Aug-16 Nov-16 Feb-17
Sensex BSE 200
S
‘India Chitra Katha’ monitors key macro and market data on an ongoing basis. Importantly, look out for the
interesting charts, which highlights evolving trends, extracted and interpreted from the maze of thousands of
macro and market data points. Key highlights of this issue:-
India Macro Heat Map – what it says. In this month’s edition, we have introduced India Macro Heat Map based on ~40
high frequency macro indicators. Key takeaways: Positive: 1) India's domestic air passenger traffic grew 25.3% yoy to
9.5mn in Jan’17, indicating zero impact from Demonetization. 2) Road freight rates index has recovered to 102.3 in
Feb’17, after witnessing a sharp drop to 84.1 in Dec’16. 3) Nominal wage growth in rural India increased to a 29-month
high of 8.2% in Dec’16 4) Tractor sales grew 5.5% yoy in Jan’17, the second consecutive month of growth, after
contracting sharply by 13.1% in Nov’16. Negative: 1) Cement output contracted 8.7% yoy in Dec’16, the sharpest fall in
over a decade. 2) Diesel sales contracted 7.8% in Jan’17, the 2nd sharpest decline in over a decade. We, however, think
that de-stocking of the hoarded diesel was the main reason behind it as diesel sales had surged 10.5% yoy in Nov’16.
Process of remonetization picks up pace since Jan’17. Total currency in circulation has increased to Rs. 11.3tn as on
17-Feb’17, which is 63% of pre-demon level of Rs. 18tn and is sharply up from 50% as on 6-Jan’17. The money multiplier
has shot up to 8.3 in Jan’17, up 280bps from the Oct’16 level of 5.5 but this is due to a sharp fall in reserve money (M0),
which is down 24% yoy in Jan’17. It would fall sharply as M0 returns to normalcy. We, however, do expect ~50bps higher
money multiplier vs. Oct’16 level after all the re-adjustments, as ~Rs 1.5tn (10% of Rs. 15tn currency of Rs 500 & Rs.
1000) remains with the banks vs. it remaining in cash or gold.
Shift from physical to financial savings gains further momentum. Households are shifting from physical to financial
savings with a clear preference to equity: (1) The number of new demat accounts has increased by 2.4mn to 27.1mn
account in 2016, the highest since 2008. (2) The number of MF investor accounts has increased by 2.2mn to 52.8mn in
Dec’16, up 31% yoy. (3) The pace of average net equity inflows in MFs has doubled since Demon as it has increased to
Rs 80bn per month in last three months vs. an average equity inflow of Rs. 36bn per month during Jan-Oct’16 (4) MF
industry has added about 0.686 mn SIP accounts (Total SIP accounts 12.8mn as of Jan17) each month on an average
during FY17, with an average SIP size of about ₹3,200 per SIP account. Jan 2017 saw total SIP amount collection of Rs
41bn, leading to total AUM of mutual fund industry touching life time high of Rs 17.4tn. Indian capital markets
(Debt+Equity) saw FPI outflows of US$9.5 bn in Nov-Dec16 post demonetization announcement but massive mutual fund
inflows of US$5.3 and US$3.4 in debt and equity respectively in the same period, not only supported the markets amid FII
selling but fueled the rally taking headline indices near life time highs.
Mid and small caps indices outperform Sensex/Nifty post demonetization: Nifty gained 12% since the lows in Dec
16 post demonetization whereas BSE Mid and small cap index posted 18% return so far since Dec lows. BSE Metals,
Realty, Oil&Gas and Banks remained the best performing sectors. Post recent rally, Sensex and BSE midcap index trade
at forward PE(x) of 17x and 18x which is 13% and 35% premium to their respective last 10 years average multiple history.
Page 2
Chitra Katha Macro Indicators: Heatmap
Growth, %, yoy Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17Latest Month
direction
Credit Card Outstanding 24 24 24 31 30 29 29 27 28 29 23 26
Passenger car sales -1 -4 0 2 -1 -5 10 10 15 0 0 -8 11
Nominal rural wages 4 4 4 4 5 5 5 5 6 8 8 8
Tractor sales 0 9 14 14 15 15 8 16 49 44 -13 8 6
Naukri Job index 19 18 22 14 27 22 3 10 5 -8 14 -7 3
Govt. revenue exp (ex. interest) -14 8 14 0 5 62 -37 7 13 54 20 2
Petrol consumption 11 13 22 12 14 4 15 25 -3 14 14 8 -1
Consumer non-durables goods prod. -3 -5 -5 -11 -2 1 -2 -1 0 -3 3 -5
Two wheeler sales 3 13 11 21 10 12 14 26 22 9 -6 -22 -7
Consumer durables goods prod. 6 10 10 12 6 5 6 2 14 1 9 -10
Steel output -3 0 1 5 3 2 1 20 18 12 7 17
Aviation cargo 8 11 12 5 7 9 7 8 10 14 9 11
Electricity genration 6 9 11 15 5 8 2 0 2 3 10 6
Coal output 9 4 2 -1 5 12 5 -9 -6 -2 6 4
Goods exports -13 -5 -5 -6 -1 2 -7 0 5 8 2 6 4
Non oil non gold imports -7 3 -7 -18 -4 -1 -10 -2 -4 2 10 4 4
Manufacturing PMI -10 -3 0 1 -1 -2 1 0 0 6 3 -1 3
Railway freight container Service -4 -3 -2 4 6 -8 1 5 -4 -2 8 0
CV sales 18 20 22 17 17 6 0 2 -2 12 -12 -5 -1
MHCVs 34 34 29 22 21 2 -8 -11 -21 17 -13 -12 1
LCVs 7 10 17 14 14 8 6 11 16 9 -11 1 -2
Industrial output -2 2 0 -1 1 2 -3 -1 1 -2 6 0
Capital goods -22 -9 -15 -25 -12 -16 -29 -22 -22 -27 15 -3
Government capex 27 -7 20 30 67 8 17 35 28 10 -16 -4
Industrrial credit 6 5 3 0 1 1 1 0 1 -2 -3 -4
Diesel consumption 8 11 15 4 8 1 2 13 -11 5 11 1 -8
Cement output 9 14 12 4 2 10 1 3 6 6 1 -9
Life Insurance: First Year Premium 48 40 51 27 29 4 59 61 4 113 18 28
Air passenger traffic: Domestic 23 24 25 21 22 21 26 24 24 23 23 24 25
Foreign Tourist Arrivals 7 11 12 11 4 7 17 12 13 10 9 14 16
Personal Loans 18 19 19 20 19 18 19 18 20 17 15 14
Indirect tax collection 26 22 19 33 42 27 19 19 19 26 47 13
Deposits 10 10 8 9 9 9 8 9 13 9 16 16 13
Wireless subscribers 7 7 7 6 6 6 5 4 5 7 9 12
Direct tax collection 19 2 -3 80 -4 22 14 -14 0 29 80 2
Railway passenger traffic 3 4 -1 0 1 -1 1 2 0 -1 7 -2
Services exports -12 -13 -8 -1 13 4 -5 -1 3 -2 11 -2
Services PMI 4 -5 3 3 3 5 2 6 1 2 -7 -13 -10
Three wheeler sales 11 32 21 37 27 10 2 9 5 4 -26 -36 -28
Co
nsu
mp
tio
nIn
vestm
en
tS
erv
ices
Page 3
Chitra Katha
Segment-wise contribution to growth (ppt):
Consumption stable, investment is a drag
Source: CSO, Spark Capital Research
Investment contracts 4.6% while HH
consumption maintains upward trend
Source: CSO, Spark Capital Research
Supply side GDP growth witnesses
marginal improvement in Q2 led by...
Source: CSO, Spark Capital Research
... pick up in Agri GDP growth while
Industrial GDP growth decelerates
Source: CSO, Spark Capital Research
Construction activities picks up in Q2 FY17
while mining activities remain muted.
Source: CSO, Spark Capital Research
Gradual improvement in economic growth led by Govt capex and HH consumption; pvt capex still missing
Nominal GDP growth swings back into
double digits in Q2 on higher GDP deflator
Source: CSO, Spark Capital Research
7.6
7.1 7.36.4
10.4
12.1
4
6
8
10
12
14
16
Dec-1
3
Ma
r-1
4
Jun
-14
Sep
-14
Dec-1
4
Ma
r-1
5
Jun
-15
Sep
-15
Dec-1
5
Ma
r-1
6
Jun
-16
Sep
-16
(%, yoy)
Real GDP growth Nominal GDP growth
3.54.6 4.6
3.7 4.1
0.4
0.3 0.2 2.0 1.83.4
0.7
-0.9-1.7
-2.5-0.9 -0.5
-0.1
2.1 2.31.2
2.1 4.1
0.91.5
-3
-1
1
3
5
7
Sep-15 Dec-15 Mar-16 Jun-16 Sep-16
C G I (X-M) Discrepancies
6.36.7
7.6
9.6
-4.6
-6
-3
0
3
6
9
12
Dec-1
3
Mar-
14
Jun
-14
Sep
-14
Dec-1
4
Mar-
15
Jun
-15
Sep
-15
Dec-1
5
Mar-
16
Jun
-16
Sep
-16
(%, yoy)
HH consumption Investment (GCF)
2.0 1.83.3
6.3 6.05.2
9.0 9.68.9
-3
0
3
6
9
12
15
Dec-1
3
Ma
r-1
4
Jun
-14
Sep
-14
Dec-1
4
Ma
r-1
5
Jun
-15
Sep
-15
Dec-1
5
Ma
r-1
6
Jun
-16
Sep
-16
(%, yoy)
Agriculture Industry Services
7.3
7.37.1
3
4
5
6
7
8
9
Dec-1
3
Ma
r-1
4
Jun
-14
Sep
-14
Dec-1
4
Ma
r-1
5
Jun
-15
Sep
-15
Dec-1
5
Ma
r-1
6
Jun
-16
Sep
-16
Real GVA growth (%, yoy)
-1.5
3.5
-5
-2
1
4
7
10
13
16
Sep
-13
Dec-1
3
Ma
r-1
4
Jun
-14
Sep
-14
Dec-1
4
Ma
r-1
5
Jun
-15
Sep
-15
Dec-1
5
Ma
r-1
6
Jun
-16
Sep
-16
(%, yoy)
Mining Construction
Macro Indicators: Growth
Page 4
Chitra Katha
Electricity prod. growth decelerates to 6.3%
Source: CSO, Spark Capital Research
Industrial output contracts in Dec’17,
reflecting weak demand post Demon
Source: CSO, Spark Capital Research
The contraction in IIP was led by a 2% fall
in manufacturing output
Source: CSO, Spark Capital Research
PMI, however, indicates expansion in
Manu. activities after contracting in Dec’16
Source: CSO, Spark Capital Research
Mining production growth rebounds…
Source: CSO, Spark Capital Research
Segment-wise weight in IIP (%)
Source: CSO, Spark Capital Research
Industry-wise break-up of IIP: Industrial output contracts, reflecting weak demand post Demonetization
Macro Indicators: Growth
Mining 14.16
Manufacturing
75.53
Electricity 10.32
-0.9
5.7
-0.4
-4
-2
0
2
4
6
8
10
Dec-1
5
Jan
-16
Fe
b-1
6
Ma
r-1
6
Apr-
16
Ma
y-16
Jun
-16
Jul-1
6
Aug
-16
Sep
-16
Oct-
16
Nov-1
6
Dec-1
6
%, yoy
Industrial Production Index (IIP)
-1.9
-2.9
0.6
-1.0
-3.6
0.7 1.0
-3.5
-0.3
1.0
-2.4
5.5
-2.0
-8
-4
0
4
8
Dec-1
5
Jan
-16
Feb-1
6
Mar-
16
Ap
r-16
May-1
6
Jun
-16
Jul-
16
Aug
-16
Sep
-16
Oct-
16
No
v-1
6
Dec-1
6
%, y
oy
Manufacturing
2.8
1.5 5
.0
0.3 0.7
1.7
5.3
0.8
-5.9
-3.4
-0.7
3.7
5.2
-6
-4
-2
0
2
4
6
Dec-1
5
Jan
-16
Fe
b-1
6
Ma
r-1
6
Apr-
16
Ma
y-16
Jun
-16
Jul-1
6
Aug
-16
Sep
-16
Oct-
16
Nov-1
6
Dec-1
6
%, yoy
Mining
3.2
8.9
6.3
0
3
6
9
12
15
18D
ec-1
5
Jan
-16
Feb-1
6
Mar-
16
Ap
r-16
May-1
6
Jun
-16
Jul-
16
Aug
-16
Sep
-16
Oct-
16
No
v-1
6
Dec-1
6
%, y
oy
Electricity
49.1
54.4
49.6
50.4
47
50
53
56
Ap
r-1
3
Se
p-1
3
Fe
b-1
4
Jul-
14
De
c-1
4
May-1
5
Oct-
15
Mar-
16
Au
g-1
6
Jan
-17
India manufacturing PMI
Page 5
Chitra Katha
Consumer goods production plummets,
led by…
Source: CSO, Spark Capital Research
…fall in both durables and non-durables
goods output
Source: CSO, Spark Capital Research
Cap goods prod. slips back into the
contraction zone
Source: CSO, Spark Capital Research
Basic goods output growth sustains
upward momentum
Source: CSO, Spark Capital Research
Intermediate goods production contracts in
Dec’17
Source: CSO, Spark Capital Research
Segment-wise weight in IIP (%)
Source: CSO, Spark Capital Research
Sector-wise break-up of IIP: Consumer goods output witnesses a sharp contraction in Dec’16
Macro Indicators: Growth
3.2
-0.1
0.6
0.6
-2.0
1.2
2.8
1.4
0.6
6.1
-1.4
5.2
-6.8
-8
-3
3
8
13
18
Dec-1
5
Jan
-16
Fe
b-1
6
Ma
r-1
6
Apr-
16
Ma
y-1
6
Jun
-16
Jul-1
6
Aug
-16
Sep
-16
Oct-
16
Nov-1
6
Dec-1
6
%, yoy
Consumer Goods
Capital Goods 8.8
Consumer Goods:
Durables 8.5
Consumer Goods:
Non Durables
21.3
Basic Goods 45.7
Intermediate Goods
15.7
-18.6
-21.6
-9.3
-15.3
-25.3
-12.5
-16.1
-29.4 -2
2.4
-21.6
-26.9
15.0
-3.0
-35-30-25-20-15-10
-505
10152025
Dec-1
5
Jan
-16
Fe
b-1
6
Ma
r-1
6
Apr-
16
Ma
y-16
Jun
-16
Jul-1
6
Aug
-16
Sep
-16
Oct-
16
Nov-1
6
Dec-1
6
%, yoy
Capital Goods
16.6
9.4
-10.3
-2.7 2.5-5.0
-11
-1
9
19
Dec-1
5
Jan
-16
Fe
b-1
6
Ma
r-1
6
Apr-
16
Ma
y-16
Jun
-16
Jul-1
6
Aug
-16
Sep
-16
Oct-
16
Nov-1
6
Dec-1
6
%,
yoy
Durables Non Durables
0.7
4.2
5.3
0
2
4
6
8
Dec-1
5
Jan
-16
Feb-1
6
Mar-
16
Ap
r-16
May-1
6
Jun
-16
Jul-
16
Aug
-16
Sep
-16
Oct-
16
No
v-1
6
Dec-1
6
%, y
oy
Basic Goods
1.5 2
.6
-1.2
-4
-2
0
2
4
6
8D
ec-1
5
Jan
-16
Feb-1
6
Mar-
16
Ap
r-16
May-1
6
Jun
-16
Jul-
16
Aug
-16
Sep
-16
Oct-
16
No
v-1
6
Dec-1
6
%, y
oy
Intermediate Goods
Page 6
Chitra Katha
Eight core industries grow by 5.6% in
Dec’16
Source: Ministry of Commerce and Industry
Cement output witnesses the sharpest fall
in over a decade
Source: Ministry of Commerce and Industry
Refinery production and coal output grow
in single digit
Source: Ministry of Commerce and Industry
Electricity output posts steep recovery
Source: Ministry of Commerce and Industry
Fertilizer prod. falls
Source: Ministry of Commerce and Industry
Prod. of natural gas remains weak
Source: Ministry of Commerce and Industry
Macro Indicators: Growth
-4.1
-5.3
-0.8
-6.1
-1.70.0
-16-14-12-10
-8-6-4-20246
%, yoy
Crude Oil Natural Gas
-3.1
14.9
4.1
-8.7
-10
-5
0
5
10
15
20
Dec-1
5
Jan
-16
Feb-1
6
Mar-
16
Ap
r-16
May-1
6
Jun
-16
Jul-
16
Aug
-16
Sep
-16
Oct-
16
No
v-1
6
Dec-1
6
%, yo
y
Steel Cement
5.3
4.4
2.1
6.4
-10
-5
0
5
10
15
20
Dec-1
5
Jan
-16
Fe
b-1
6
Ma
r-1
6
Apr-
16
Ma
y-1
6
Jun
-16
Jul-1
6
Aug
-16
Sep
-16
Oct-
16
Nov-1
6
Dec-1
6
%, yoy
Coal Refinery Products
13.5
6.2
16.3
22.9
7.9
14.8
9.8
-4.3
5.7
2.0
0.8
2.4
-4.8-5
-2
1
4
7
10
13
16
19
22D
ec-1
5
Jan
-16
Fe
b-1
6
Ma
r-1
6
Apr-
16
Ma
y-1
6
Jun
-16
Jul-1
6
Aug
-16
Sep
-16
Oct-
16
Nov-1
6
Dec-1
6
%, yoy
Fertilizers
0.5
5.0
6.6
4.9
5.6
-2
0
2
4
6
8
10
No
v-1
5
Dec-1
5
Jan
-16
Feb-1
6
Mar-
16
Ap
r-16
May-1
6
Jun
-16
Jul-
16
Aug
-16
Sep
-16
Oct-
16
No
v-1
6
Dec-1
6
%, y
oy
Eight core industries index
Eight core infra-related sectors: Cement output witnesses the sharpest fall in over a decade
0.7
1.1
8.9
0
3
6
9
12
15
18
No
v-1
5
De
c-1
5
Jan
-16
Fe
b-1
6
Mar-
16
Ap
r-1
6
May-1
6
Jun
-16
Jul-
16
Au
g-1
6
Se
p-1
6
Oct-
16
No
v-1
6
%,
yoy
Electricity
Page 7
Chitra Katha
…led by a mild recovery in MHCV sales
Source: SIAM, Spark Capital Research
6.51.2 -1.9
33.5
-12.4
0.6
-30
-10
10
30
50
70
Jan
-16
Fe
b-1
6
Ma
r-1
6
Apr-
16
Ma
y-16
Jun
-16
Jul-1
6
Aug
-16
Sep
-16
Oct-
16
Nov-1
6
Dec-1
6
Jan
-17
%, yoy
LCV: Domestic sales MHCV: Domestic sales
MHCV exports witnessed a steep fall in
Jan’17
Source: SIAM, Spark Capital Research
41.0
-39.0
18.6
37.5
-40-30-20-10
010203040506070
Jan
-16
Feb-1
6
Mar-
16
Ap
r-16
May-1
6
Jun
-16
Jul-
16
Aug
-16
Sep
-16
Oct-
16
No
v-1
6
Dec-1
6
Jan
-17
%, y
oy
LCV exports MHCV exports
CV sales returning to normalcy...
Source: SIAM, Spark Capital Research
Domestic PV sales recovers in Jan’17
Source: SIAM, Spark Capital Research
Two-wheeler sales see a sharp rebound
Source: SIAM, Spark Capital Research
Three-wheeler sales remain weak
Source: SIAM, Spark Capital Research
Auto sales: Domestic auto sales witness recovery in Jan’17 led by PVs and CVs sectors
Macro Indicators: Growth
17.5
-0.7
32.7
-13.5
-20
-10
0
10
20
30
40
Jan
-16
Fe
b-1
6
Ma
r-1
6
Apr-
16
Ma
y-16
Jun
-16
Jul-1
6
Aug
-16
Sep
-16
Oct-
16
Nov-1
6
Dec-1
6
Jan
-17
%, yoy
CV: Domestic sales CV exports
0.6
14.4
-6.7
15.5
-30
-20
-10
0
10
20
30
40
Jan
-16
Feb-1
6
Mar-
16
Ap
r-16
May-1
6
Jun
-16
Jul-
16
Aug
-16
Sep
-16
Oct-
16
No
v-1
6
Dec-1
6
Jan
-17
%, y
oy
PV: Domestic sales PV exports
-7.4
-10.0
-30
-20
-10
0
10
20
30Jan
-16
Feb-1
6
Mar-
16
Ap
r-16
May-1
6
Jun
-16
Jul-
16
Aug
-16
Sep
-16
Oct-
16
No
v-1
6
Dec-1
6
Jan
-17
%, y
oy
2-Wheeler sales: Domestic 2-Wheeler exports
11.5
-28.2
-20.1-24.8
-80
-60
-40
-20
0
20
-40
-30
-20
-10
0
10
20
30
40
Jan
-16
Feb-1
6
Mar-
16
Ap
r-16
May-1
6
Jun
-16
Jul-
16
Aug
-16
Sep
-16
Oct-
16
No
v-1
6
Dec-1
6
Jan
-17
%, y
oy
3-Wheeler sales: Domestic 3-W exports (RHS)
Page 8
Chitra Katha
Lead indicators hint at gradual recovery in economic activities ahead
Macro Indicators: Growth
Road freight rates go up in Feb’17
Source: SIAM, Spark Capital Research
Air passenger traffic up 25.3% in Jan’17
Source: SIAM, Spark Capital Research
Diesel consumption growth remains muted
Source: SIAM, Spark Capital Research
Weak Rail Freight Traffic in Dec’16
Source: SIAM, Spark Capital Research
Tractor sales growth inches up in Jan’17
Source: SIAM, Spark Capital Research
Hiring activities marginally up in Jan’17
Source: SIAM, Spark Capital Research
5.6
1.2
-4
-2
0
2
4
6
8
10
12
14
16
Oct-
12
Jan
-13
Apr-
13
Jul-1
3
Oct-
13
Jan
-14
Apr-
14
Jul-1
4
Oct-
14
Jan
-15
Apr-
15
Jul-1
5
Oct-
15
Jan
-16
Apr-
16
Jul-1
6
Oct-
16
Jan
-17
Diesel consumption (Volume, % yoy, 3MMA)
5.9
-3.8
-20
-10
0
10
20
30
Sep
-12
Dec-1
2
Ma
r-1
3
Jun
-13
Sep
-13
Dec-1
3
Ma
r-1
4
Jun
-14
Sep
-14
Dec-1
4
Ma
r-1
5
Jun
-15
Sep
-15
Dec-1
5
Ma
r-1
6
Jun
-16
Sep
-16
Dec-1
6
Rail Freight Traffic: Container Service (Volume, % yoy)
22.0
-7.0
3.0
-10
-5
0
5
10
15
20
25
30
Sep
-12
Jan
-13
Ma
y-13
Sep
-13
Jan
-14
Ma
y-14
Sep
-14
Jan
-15
Ma
y-15
Sep
-15
Jan
-16
Ma
y-16
Sep
-16
Jan
-17
Naukri Job index (yoy, %)
-15.6 -0
.2
23.5
25.3
-20
-10
0
10
20
30
40
Oct-
12
Jan
-13
Apr-
13
Jul-1
3
Oct-
13
Jan
-14
Apr-
14
Jul-1
4
Oct-
14
Jan
-15
Apr-
15
Jul-1
5
Oct-
15
Jan
-16
Apr-
16
Jul-1
6
Oct-
16
Jan
-17
Air Passenger Traffic: Domestic (%, yoy)
84.1
102.3
80
90
100
110
120
No
v-1
2
Fe
b-1
3
May-1
3
Au
g-1
3
No
v-1
3
Fe
b-1
4
May-1
4
Au
g-1
4
No
v-1
4
Fe
b-1
5
May-1
5
Au
g-1
5
No
v-1
5
Fe
b-1
6
May-1
6
Au
g-1
6
No
v-1
6
Fe
b-1
7
Road freight index (Base Jan'12=100)
49.4
-13.1
5.5
-40
-20
0
20
40
60
Oct-
12
Jan
-13
Ap
r-1
3
Jul-
13
Oct-
13
Jan
-14
Ap
r-1
4
Jul-
14
Oct-
14
Jan
-15
Ap
r-1
5
Jul-
15
Oct-
15
Jan
-16
Ap
r-1
6
Jul-
16
Oct-
16
Jan
-17
Tractor sales Volume
Page 9
Chitra Katha
Households are shifting from physical to financial savings with a clear preference to equity
Macro Indicators: Savings
The number of new demat accounts has increased by 2.4mn to
27.1mn account in 2016, the highest since 2008
Sharp rise in monthly MFs equity inflows
Source: AMFI, Spark Capital Research
The number of MF investor accounts has increased by 2.2mn to
52.8mn in Dec’16, up accounts 31% yoy
MFs AUM increased to Rs 17.4 tn in Jan’17 (12% of GDP)
Source: AMFI, Spark Capital Research
7.5 7.9 8.3 8.7 9.5 11.9
11.5 12 12.6 13.1 13.8
15.3 19 19.9 20.9 21.8
23.3
27.2
0
5
10
15
20
25
30
FY11 FY12 FY13 FY14 FY15 Dec-16
Total Demat Accounts (mn)
CDSL NSDL
47
39.5
52.8
35
37
39
41
43
45
47
49
51
53
55
Jun
-09
De
c-0
9
Jun
-10
De
c-1
0
Jun
-11
De
c-1
1
Jun
-12
De
c-1
2
Jun
-13
De
c-1
3
Jun
-14
De
c-1
4
Jun
-15
De
c-1
5
Jun
-16
De
c-1
6
MF Investor Accounts (mn)
-100
-50
0
50
100
150
Jul-
05
Jan
-06
Jul-
06
Jan
-07
Jul-
07
Jan
-08
Jul-
08
Jan
-09
Jul-
09
Jan
-10
Jul-
10
Jan
-11
Jul-
11
Jan
-12
Jul-
12
Jan
-13
Jul-
13
Jan
-14
Jul-
14
Jan
-15
Jul-
15
Jan
-16
Jul-
16
Jan
-17
Net equity flows in MFs (Rs. bn)
Cumulative MF inflows in equity during Sep'04-Mar14 = Rs. 862bn
(MFs inflows in last 34 months are 2.3x of what they got in a decade) Rs 2tn
4.1
8.3
17.4
2
4
6
8
10
12
14
16
18
20
Au
g-0
6
Jan
-07
Jun
-07
No
v-0
7
Ap
r-0
8
Se
p-0
8
Fe
b-0
9
Jul-
09
De
c-0
9
May-1
0
Oct-
10
Mar-
11
Au
g-1
1
Jan
-12
Jun
-12
No
v-1
2
Ap
r-1
3
Se
p-1
3
Fe
b-1
4
Jul-
14
De
c-1
4
May-1
5
Oct-
15
Mar-
16
Au
g-1
6
Jan
-17
Mutual Funds: Assets Under Management (Rs. tn)
Page 10
Chitra Katha
Budget allocation for MNREGA has been increased to Rs 480bn in
FY18, the highest ever
Source: GoI, Spark Capital Research
Rural continues to be the major focus area for Budget as the word
“rural” features 22 times in Budget speech
Source: GoI, Spark Capital Research
Foodgrains output is estimated to grow at 8.1% in FY17
Source: SIAM, Spark Capital Research
Rural wage growth surges to a 29-month high of 8.2% in Dec’16
Source: Labour Bureau,
Pick up in rural wage growth + higher farm output + higher MNREGA spend
Macro Indicators: Rural India
17.6
8.2
4.3
-5
0
5
10
15
20
25
Ap
r-0
6
De
c-0
6
Au
g-0
7
Ap
r-0
8
De
c-0
8
Au
g-0
9
Ap
r-1
0
De
c-1
0
Au
g-1
1
Ap
r-1
2
De
c-1
2
Au
g-1
3
Ap
r-1
4
De
c-1
4
Au
g-1
5
Ap
r-1
6
De
c-1
6
Nominal rural wage growth ( % yoy) Rural wage growth:Real ( % yoy)
198.4
208.6
217.3
230.8
234.5
218.1
244.5
259.3
257.1
265.0
252.0
251.6
272.0
-7.0
4.2
6.2
1.6
-7.0
12.1
6.1
-0.8
3.1
-4.9
-0.2
8.1
-10
-5
0
5
10
15
170
190
210
230
250
270
290
FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17
Foodgrains production (ton mn): (%, yoy)
113 120
300
391 401 400
330 334 325
373
475 480
-
50
100
150
200
250
300
350
400
450
500
FY
07
FY
08
FY
09
FY
10
FY
11
FY
12
FY
13
FY
14
FY
15
FY
16
FY
17
FY
18
BE
Central allocation for NREGA (Rs. bn)
34
26
22 20
17
22
17
20
11
5
11
23 22
0
5
10
15
20
25
30
35
40
FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18
Number of times the word "rural" featured in Budget Speech
Page 11
Chitra Katha
CPI inflation remains low while WPI inflation continues upward momentum
Macro Indicators: Inflation
CPI inflation eases down to 3.2% in Jan’17
Source: GoI
While food inflation drops to 1.3%...
Source: GoI
...core CPI inflation inches up to 5.1%
Source: GoI
3.23.4
2.9
2
3
4
5
6
7
Jan
-16
Fe
b-1
6
Ma
r-1
6
Apr-
16
Ma
y-16
Jun
-16
Jul-1
6
Aug
-16
Sep
-16
Oct-
16
Nov-1
6
Dec-1
6
Jan
-17
Infla
tion,
%, yoy
CPI Rural CPI Urban CPI
1.3
1.7
0.60
1
2
3
4
5
6
7
8
Jan
-16
Fe
b-1
6
Ma
r-1
6
Apr-
16
Ma
y-16
Jun
-16
Jul-1
6
Aug
-16
Sep
-16
Oct-
16
Nov-1
6
Dec-1
6
Jan
-17
Infla
tion,
%, yoy
Food CPI Rural food CPI Urban food CPI
5.1
5.6
4.6
3
4
5
6
Jan
-16
Feb-1
6
Mar-
16
Ap
r-16
May-1
6
Jun
-16
Jul-
16
Aug
-16
Sep
-16
Oct-
16
No
v-1
6
Dec-1
6
Jan
-17
Inflation, %
, yo
y
Core CPI Rural core CPI
WPI inflation rises to 5.2%...
Source: Office of the Economic Adviser
...led by high fuel inflation
Source: Office of the Economic Adviser
Manufactured index up (m/m)
Source: Office of the Economic Adviser
-2.0
2.7
-1.1
5.2
-5-4-3-2-10123456
Jan
-16
Feb-1
6
Mar-
16
Ap
r-16
May-1
6
Jun
-16
Jul-
16
Aug
-16
Sep
-16
Oct-
16
No
v-1
6
Dec-1
6
Jan
-17
%, yo
y
Core WPI WPI inflation
-0.6
18.1
-16
-11
-6
-1
4
9
14
19Jan
-16
Feb-1
6
Mar-
16
Ap
r-16
May-1
6
Jun
-16
Jul-
16
Aug
-16
Sep
-16
Oct-
16
No
v-1
6
Dec-1
6
Jan
-17
%, yo
y
Food inflation Fuel inflation
0.2
0.3
0.6
0.9
0.4
0.1
0.3
0.1
0.3
0.4
0.0
0.1
0.5
-0.6
-0.4
-0.2
0.0
0.2
0.4
0.6
0.8
1.0
Jan
-16
Feb-1
6
Mar-
16
Ap
r-16
May-1
6
Jun
-16
Jul-
16
Aug
-16
Sep
-16
Oct-
16
No
v-1
6
Dec-1
6
Jan
-17
%, m
om
Manufactured products index (%, mom)
Page 12
Chitra Katha
RBI keeps policy rate unchanged at 6.25%
Source: RBI, Spark Capital Research
No change in CRR and SLR
Source: RBI, Spark Capital Research
MCLR is down by 80bps since Nov’16
Source: CEIC, Spark Capital Research
Liquidity surplus surges to Rs4tn in Feb’17
Source: RBI, Spark Capital Research
10-year G-sec yields up 70bps since Nov’16
Source: CEIC, Spark Capital Research
Yield curve shifts upwards & steepens
Source: Bloomberg, Spark Capital Research
MCLR down by 80bps + 10 year G-sec yields up 70bps + Net surplus liquidity up to Rs 4tn
Macro Indicators: Interest Rates
6.25
5.75
6.75
5
6
7
8
9
10
Sep
-14
No
v-1
4
Jan
-15
Mar-
15
May-1
5
Jul-
15
Sep
-15
No
v-1
5
Jan
-16
Mar-
16
May-1
6
Jul-
16
Sep
-16
No
v-1
6
Jan
-17
%
Repo Reverse Repo MSF rate
4.0 4.0
22.00
20.50
20.0
20.5
21.0
21.5
22.0
22.5
23.0
23.5
3.0
3.5
4.0
4.5
5.0
Sep
-14
Nov-1
4
Jan
-15
Ma
r-1
5
Ma
y-1
5
Jul-1
5
Sep
-15
Nov-1
5
Jan
-16
Ma
r-1
6
Ma
y-1
6
Jul-1
6
Sep
-16
Nov-1
6
Jan
-17
CRR (%) SLR (%) - RHS
8.03
6.92
6.26 6.0
6.5
7.0
7.5
8.0
8.5
9.0
Se
p-1
4
De
c-1
4
Mar-
15
Jun
-15
Oct-
15
Jan
-16
Ap
r-1
6
Au
g-1
6
No
v-1
6
Fe
b-1
7
10-year Gsec yield (%)
8.37
6.0
6.5
7.0
7.5
8.0
8.5
3M 6M 1Y 2Y 3Y 4Y 5Y 7Y 9Y 10Y 15Y
%
Current 1M back
6M back 1Y back
-1985
2724
4201 7.3
6.7
5.9 5.65.86.06.26.46.66.87.07.27.47.6
-3000
-2000
-1000
0
1000
2000
3000
4000
5000
Ap
r 1
5
Jun
15
Au
g 1
5
Oct 1
5
De
c 1
5
Fe
b 1
6
Ap
r 1
6
Jun
16
Au
g 1
6
Oct 1
6
De
c 1
6
Fe
b 1
7
Net liquidity (Rs bn) Call money rate (%) - RHS
6.25
9.35
9.00
8.20
6.0
6.5
7.0
7.5
8.0
8.5
9.0
9.5
10.0
10.5
11.0
5
6
7
8
9
Sep
-10
Dec-1
0
Ma
r-1
1
Jun
-11
Sep
-11
Dec-1
1
Ma
r-1
2Jun
-12
Sep
-12
Dec-1
2
Ma
r-1
3
Jun
-13
Sep
-13
Dec-1
3
Ma
r-1
4
Jun
-14
Sep
-14
Dec-1
4
Ma
r-1
5
Jun
-15
Sep
-15
Dec-1
5
Ma
r-1
6Jun
-16
Sep
-16
Dec-1
6M
ar-
17
Jun
-17
Sep
-17
Dec-1
7
Repo rate Base Rate: Five Major Banks (%) MCLR (%)
MCLR has dropped 80bps in Jan'17
Page 13
Chitra Katha
Deposit growth remains significantly higher
than credit growth
Source: RBI, Spark Capital Research
Credit-deposit ratio inches up to 70.8%
Source: RBI, Spark Capital Research
Investment deposit ratio falls
Source: RBI, Spark Capital Research
Forex reserves up by $2.5bn from Dec’16
Source: RBI, Spark Capital Research
Import covers remain near 12-months mark
Source: RBI, Spark Capital Research
RBI’s intervention comes down in Dec’16
Source: RBI, Spark Capital Research
Deposit growth remains 8.5ppt higher than credit growth, CD ratio inches up
Macro Indicators: Monetary Conditions
13.5
5.0
4
6
8
10
12
14
16
5-F
eb-1
6
4-M
ar-
16
1-A
pr-
16
29-A
pr-
16
27-M
ay-1
6
24-J
un
-16
22-J
ul-
16
19-A
ug
-16
16-S
ep
-16
14-O
ct-
16
11-N
ov-1
6
9-D
ec-1
6
6-J
an
-17
3-F
eb-1
7
%, yo
y
Deposit growth Credit growth
74.2
70.8
68
70
72
74
76
78
5-F
eb
-16
4-M
ar-
16
1-A
pr-
16
29
-Ap
r-1
6
27
-Ma
y-1
6
24
-Jun
-16
22
-Jul-
16
19
-Au
g-1
6
16
-Se
p-1
6
14
-Oct-
16
11
-Nov-1
6
9-D
ec-1
6
6-J
an-1
7
3-F
eb
-17
Credit Deposit Ratio (%)
32.9
2526272829303132333435
5-F
eb-1
6
4-M
ar-
16
1-A
pr-
16
29-A
pr-
16
27-M
ay-1
6
24-J
un
-16
22-J
ul-
16
19-A
ug
-16
16-S
ep
-16
14-O
ct-
16
11-N
ov-1
6
9-D
ec-1
6
6-J
an
-17
3-F
eb-1
7
Investment Deposit Ratio (%)
362.8
345
355
365
375
29-J
an
-16
11-M
ar-
16
22-A
pr-
16
3-J
un
-16
15-J
ul-
16
26-A
ug
-16
7-O
ct-
16
18-N
ov-1
6
30-D
ec-1
6
10-F
eb-1
7
US
$, bn
Foreign Exchange Reserves ($, bn)
10.2
12.1 11.4
5
6
7
8
9
10
11
12
13
14
15
Jan
-15
Ma
r-1
5
Ma
y-15
Jul-1
5
Sep
-15
Nov-1
5
Jan
-16
Ma
r-1
6
Ma
y-16
Jul-1
6
Sep
-16
Nov-1
6
Jan
-17
Import cover (no. of month)
0.0
-3.3
4.7
1.3
0.6
1.9
1.4
0.9
4.6
-0.4
-2.7
0.5
-4
-3
-2
-1
0
1
2
3
4
5
6
Jan
-16
Fe
b-1
6
Mar-
16
Ap
r-1
6
May-1
6
Jun
-16
Jul-
16
Au
g-1
6
Se
p-1
6
Oct-
16
No
v-1
6
De
c-1
6
US
$,
bn
RBI Intervention: Net US$ Purchase
Page 14
Chitra Katha
Credit growth in Agri and Retail sector plummets
Source: MOSPI, Spark Capital Research
Industrial credit growth declines to historic low of -4.3 in Dec’16
Source: Ministry of Statistics and Programme Implementation (MOSPI)
Services sector credit growth inches up in Dec’16, from 7.1% in
Nov’16
Source: SEBI, Spark Capital Research
Credit card outstanding growth inches up in Dec’16, following a
temporary dip in Nov’16
Source: CGA, Spark Capital Research
Sectoral deployment of credit: Broad-based slowdown in credit offtake in Dec16…
Macro Indicators: Monetary Conditions
-4.3
-5
0
5
10
15
20
Sep
-12
Dec-1
2
Ma
r-1
3
Jun
-13
Sep
-13
Dec-1
3
Ma
r-1
4
Jun
-14
Sep
-14
Dec-1
4
Ma
r-1
5
Jun
-15
Sep
-15
Dec-1
5
Ma
r-1
6
Jun
-16
Sep
-16
Dec-1
6
Industrial credit
7.1
8.3
0
5
10
15
20
25
Dec-1
1
Mar-
12
Jun
-12
Sep
-12
Dec-1
2
Mar-
13
Jun
-13
Sep
-13
Dec-1
3
Mar-
14
Jun
-14
Sep
-14
Dec-1
4
Mar-
15
Jun
-15
Sep
-15
Dec-1
5
Mar-
16
Jun
-16
Sep
-16
Dec-1
6
Services credit
22.2
26.3
-5
0
5
10
15
20
25
30
35
Sep
-12
Dec-1
2
Mar-
13
Jun
-13
Sep
-13
Dec-1
3
Mar-
14
Jun
-14
Sep
-14
Dec-1
4
Mar-
15
Jun
-15
Sep
-15
Dec-1
5
Mar-
16
Jun
-16
Sep
-16
Dec-1
6
Credit Card Outstanding (%, yoy)
15.3
8.2
19.2
13.5
8
10
12
14
16
18
20
22
Sep
-12
Dec-1
2
Mar-
13
Jun
-13
Sep
-13
Dec-1
3
Mar-
14
Jun
-14
Sep
-14
Dec-1
4
Mar-
15
Jun
-15
Sep
-15
Dec-1
5
Mar-
16
Jun
-16
Sep
-16
Dec-1
6
Cre
dit g
row
th (%
)
Agri credit Personal Loans
Page 15
Chitra Katha
…led by contraction in industrial credit; Sharp decline in Agri and personal credit growth
Share (%) (Rs. Bn)
Dec-16 Dec-16 Dec-16 Nov-16 Oct-16 Sep-16 Aug-16 Jul-16 Dec-15
I Gross Bank Credit (II + III) 100.0 66,458 3.3 4.0 6.4 11.5 7.6 7.7 9.2
II Food Credit 1.0 669 -38.3 -40.9 -11.8 56.5 -26.5 -28.1 1.7
III Non-food Credit (1 to 4) 99.0 65,790 4.0 4.8 6.7 10.8 8.2 8.3 9.3
1 Agriculture & Allied Activities 13.7 9,113 8.2 10.3 13.0 15.9 13.6 13.4 12.7
2 Industry (Micro & Small, Medium and Large ) 38.8 25,791 -4.3 -3.4 -1.7 0.9 -0.2 0.6 4.9
3 Services 23.8 15,794 8.3 7.1 9.3 18.4 12.1 10.8 8.1
3.1 Transport Operators 1.5 1,021 6.1 5.6 6.0 9.2 11.1 12.8 6.6
3.2 Computer Software 0.3 180 -5.5 -9.1 -5.7 -7.3 -4.2 -5.5 6.7
3.3 Tourism, Hotels and Restaurants 0.6 375 -2.3 0.5 2.2 3.2 3.5 4.4 4.6
3.4 Shipping 0.2 107 3.1 1.9 1.8 -5.6 -2.4 -2.6 4.6
3.5 Professional Services 1.8 1,194 22.7 24.5 31.0 32.7 27.2 30.7 19.1
3.6 Trade 5.7 3,785 4.3 3.4 9.5 10.1 6.9 5.1 8.0
3.6.1 Wholesale Trade (other than food procurement) 2.6 1,708 4.1 2.5 7.3 2.8 0.4 -2.7 1.7
3.6.2 Retail Trade 3.1 2,077 4.5 4.2 11.2 16.7 13.0 12.4 13.9
3.7 Commercial Real Estate 2.7 1,778 3.2 3.2 4.6 9.8 9.8 8.8 5.9
3.8 Non-Banking Financial Companies (NBFCs) 4.8 3,221 2.3 1.3 5.1 25.0 15.2 15.5 5.5
3.9 Other Services 6.2 4,134 19.1 15.8 12.1 29.1 15.1 10.3 10.0
4 Personal Loans 22.7 15,092 13.5 15.2 17.0 19.7 18.1 18.8 18.5
4.1 Consumer Durables 0.3 194 16.3 18.2 20.3 21.5 19.2 18.4 13.4
4.2 Housing (Including Priority Sector Housing) 12.3 8,197 14.8 15.6 16.6 18.0 16.7 17.2 18.9
4.3 Advances against Fixed Deposits 0.9 600 -5.5 -3.3 0.9 9.8 1.3 5.2 6.4
4.4 Advances to Individuals against share, bonds, etc. 0.1 47 -20.6 -20.5 -20.7 5.4 0.0 6.9 19.4
4.5 Credit Card Outstanding 0.7 471 26.3 23.1 28.7 28.0 26.8 29.4 23.3
4.6 Education 1.1 713 4.9 4.8 5.3 6.0 6.0 6.5 8.2
4.7 Vehicle Loans 2.5 1,674 18.9 21.4 23.5 22.8 21.0 20.7 17.8
4.8 Other Personal Loans 4.8 3,194 12.9 17.3 20.4 27.6 27.0 27.9 23.4
Growth (yoy, %)
Source: RBI, Spark Capital Research
Macro Indicators: Monetary Conditions
Page 16
Chitra Katha
Bank credit: Loan growth in food processing, telecom, power and electronics sectors has been impacted
Source: RBI, Spark Capital Research
Macro Indicators: Monetary Conditions
Share (%) (Rs. Bn)
Dec-16 Dec-16 Dec-16 Nov-16 Oct-16 Sep-16 Aug-16 Jul-16 Dec-15
2.1 Mining & Quarrying (incl. Coal) 1.3 342 -6.4 -3.0 -0.7 0.9 2.3 -1.4 -2.0
2.2 Food Processing 5.0 1,289 -13.4 -13.4 -9.4 -4.9 -9.2 -9.0 -2.2
2.2.1 Sugar 1.1 285 -18.5 -20.3 -18.5 -10.0 -3.8 -3.2 3.7
2.2.2 Edible Oils & Vanaspati 0.6 167 -13.6 -12.8 -9.8 -4.3 0.7 -1.5 -6.2
2.2.3 Tea 0.1 36 0.0 5.3 27.4 30.4 22.6 18.7 12.2
2.2.4 Others 3.1 801 -12.0 -11.6 -6.8 -4.3 -14.1 -13.5 -4.0
2.3 Beverage & Tobacco 0.7 171 -5.0 -8.5 -4.5 -2.7 -8.0 -3.0 -3.5
2.4 Textiles 7.2 1,866 -7.8 -5.4 -1.9 -0.4 -1.1 0.3 1.8
2.4.1 Cotton Textiles 3.5 897 -11.3 -8.2 -5.0 -2.7 -3.1 -1.1 3.1
2.4.2 Jute Textiles 0.1 20 -6.6 -4.6 -2.2 -0.3 -5.6 -7.9 -10.5
2.4.3 Man-Made Textiles 0.8 195 -6.6 -5.8 -4.3 -3.5 -6.4 -7.0 5.2
2.4.4 Other Textiles 2.9 753 -3.6 -1.7 2.6 3.3 3.0 4.3 -0.4
2.5 Leather & Leather Products 0.4 101 -2.0 -2.0 1.8 6.0 4.8 5.7 -1.1
2.6 Wood & Wood Products 0.4 99 -0.2 -0.2 3.6 2.8 2.3 5.7 2.8
2.7 Paper & Paper Products 1.3 339 -4.8 -3.4 -0.2 2.0 -1.4 0.2 4.9
2.8 Petroleum, Coal Products & Nuclear Fuels 1.9 490 2.8 10.5 7.2 20.0 11.4 18.9 -11.6
2.9 Chemicals & Chemical Products 5.6 1,444 -6.2 -2.1 -1.1 -0.6 -0.5 1.4 3.1
2.9.1 Fertiliser 0.9 242 9.0 12.2 18.5 15.6 0.4 6.6 -8.1
2.9.2 Drugs & Pharmaceuticals 1.8 471 -8.5 -8.2 -6.7 -3.5 -4.0 0.8 6.8
2.9.3 Petro Chemicals 1.3 324 -5.3 10.5 5.4 8.2 7.0 2.8 3.9
2.9.4 Others 1.6 407 -11.8 -11.9 -9.1 -7.8 -2.8 -1.7 4.6
2.10 Rubber, Plastic & their Products 1.4 363 -2.9 -1.9 2.7 1.8 0.4 0.7 -1.6
2.11 Glass & Glassware 0.3 80 -9.3 -6.7 -1.4 2.7 -0.7 0.5 -0.7
2.12 Cement & Cement Products 2.1 531 -3.0 -4.2 -2.3 -0.4 -4.3 -3.3 -1.3
2.13 Basic Metal & Metal Product 16.0 4,127 3.0 3.0 4.5 6.8 7.7 8.2 8.7
2.13.1 Iron & Steel 12.1 3,118 4.5 4.1 5.7 7.1 8.4 8.8 9.3
2.13.2 Other Metal & Metal Product 3.9 1,009 -1.4 -0.3 1.2 5.8 5.5 6.5 6.9
2.14 All Engineering 5.7 1,470 -5.9 -4.9 -2.6 -1.0 -1.5 0.8 5.4
2.14.1 Electronics 1.3 341 -10.7 -11.0 -10.7 -6.2 -5.2 -2.2 8.4
2.14.2 Others 4.4 1,129 -4.3 -2.9 0.2 0.8 -0.3 1.8 4.5
2.15 Vehicles, Vehicle Parts & Transport Equipment 2.8 715 6.9 4.0 6.2 6.7 2.7 3.2 -1.8
2.16 Gems & Jewellery 2.7 686 -2.9 -2.9 -3.0 0.6 -3.1 -1.4 0.1
2.17 Construction 3.1 791 6.6 3.9 4.9 7.8 4.1 4.0 0.5
2.18 Infrastructure 34.7 8,962 -7.7 -6.7 -6.6 -4.6 -4.2 -3.1 8.4
2.18.1 Power 20.5 5,278 -10.8 -10.4 -10.6 -8.7 -9.7 -8.7 10.1
2.18.2 Telecommunications 3.1 799 -12.9 -6.3 -9.3 -14.2 -4.3 -2.3 6.1
2.18.3 Roads 7.0 1,798 0.3 1.3 2.9 7.1 7.9 8.1 7.5
2.18.4 Other Infrastructure 4.2 1,087 0.6 -0.2 1.4 7.1 6.6 9.1 2.9
2.19 Other Industries 7.5 1,925 0.4 2.0 7.9 16.2 10.7 6.1 8.3
2 Total Industries 100.0 25,791 -4.3 -3.4 -1.7 0.9 -0.2 0.6 4.9
Growth (yoy, %)
Page 17
Chitra Katha
Currency in circulation increases to
Rs.11.3tn as on 17-Feb’17
Source: RBI, Spark Capital Research
Reserve money growth up in Jun’16
Source: RBI, Spark Capital Research
M1 money supply growth
Source: RBI, Spark Capital Research
M2 money supply growth
Source: RBI, Spark Capital Research
M3 Money supply growth
Source: RBI, Spark Capital Research
Money multiplier picks up post Demon
Source: RBI, Spark Capital Research
Process of remonetization picks up pace: Currency in circulation reaches 63% of pre-demon level
12.1
-29.6
-26.9
-30
-25
-20
-15
-10
-5
0
5
10
15
Jan
-16
Feb-1
6
Mar-
16
Ap
r-16
May-1
6
Jun
-16
Jul-
16
Aug
-16
Sep
-16
Oct-
16
No
v-1
6
Dec-1
6
Jan
-17
%, y
oy
Reserve Money (M0)
11.6
-18.6
-13.7
-19-15-11-7-3159
131721
Jan
-16
Feb-1
6
Mar-
16
Ap
r-16
May-1
6
Jun
-16
Jul-
16
Aug
-16
Sep
-16
Oct-
16
No
v-1
6
Dec-1
6
Jan
-17
%, yo
y
M1 Money Supply
10.9
6.66.4
6.0
7.0
8.0
9.0
10.0
11.0
12.0
13.0
14.0
15.0
Jan
-16
Feb-1
6
Mar-
16
Ap
r-16
May-1
6
Jun
-16
Jul-
16
Aug
-16
Sep
-16
Oct-
16
No
v-1
6
Dec-1
6
Jan
-17
%, yo
y
M3 Money Supply
5.69
8.48 8.29
3.03.54.04.55.05.56.06.57.07.58.08.5
Jan
-16
Feb-1
6
Mar-
16
Ap
r-16
May-1
6
Jun
-16
Jul-
16
Aug
-16
Sep
-16
Oct-
16
No
v-1
6
Dec-1
6
Jan
-17
Money Multiplier
11.9
-17.6
-12.9
-19
-14
-9
-4
1
6
11
16
21
Jan
-16
Feb-1
6
Mar-
16
Ap
r-16
May-1
6
Jun
-16
Jul-
16
Aug
-16
Sep
-16
Oct-
16
No
v-1
6
Dec-1
6
Jan
-17
%, y
oy
M2 Money Supply
Macro Indicators: Monetary Conditions
11.3
8.0
10.0
12.0
14.0
16.0
18.0
Oct-
15
Dec-1
5
Fe
b-1
6
Apr-1
6
Jun
-16
Aug
-1
6
Oct-
16
Dec-1
6
Fe
b-1
7
Page 18
Chitra Katha
Trend in Exports & imports
Source: Ministry of Commerce and Industry
Non-oil imports also falls
Source: Ministry of Commerce and Industry
Trade deficit narrows to $9.8bn in Jan’17
Source: Ministry of Commerce and Industry
Imports increase steeply Jan’17 while
exports show moderate growth
Source: Ministry of Commerce and Industry
Non-oil non-gold imports remain muted in
Jan’17
Source: Ministry of Commerce and Industry
Gold imports continue to remain at ~$2bn
per month mark after surging in Nov’16
Source: Ministry of Commerce and Industry
Imports growth surpasses exports growth in Jan’17, led by higher oil imports due to surge in oil prices
Macro Indicators: External Sector
21.2
20.8
22.9
20.9
22.4
22.8
21.7
21.6
22.9
23.2
20.0 23.9
22.1
28.9
27.4
27.3
25.8 2
8.4 3
1.1
29.5
29.2 31.2 3
3.6
33.0
34.3
32.0
Jan
-16
Feb-1
6
Mar-
16
Ap
r-16
May-1
6
Jun
-16
Jul-
16
Aug
-16
Sep
-16
Oct-
16
No
v-1
6
Dec-1
6
Jan
-17
$, b
n
Exports ($, bn) Imports ($, bn)
5.1
4.8
4.8 5.7
6.0 7.3
6.8
6.8
6.9
7.1
6.8 7.6 8.1
23.8
22.6
22.5
20.1 22.4
23.8
22.7
22.4 24.3 26.5
26.2
26.6
23.8
Jan
-16
Feb-1
6
Mar-
16
Ap
r-16
May-1
6
Jun
-16
Jul-
16
Aug
-16
Sep
-16
Oct-
16
No
v-1
6
Dec-1
6
Jan
-17
$, bn
Oil Imports ($, bn) Non Oil Imports ($, bn)
-7.7 -6
.6 -4.4
-4.9
-6.0
-8.3
-7.8
-7.6
-8.3
-10.4
-13.0 -1
0.4
-9.8
-18
-15
-12
-9
-6
-3
0
Jan
-16
Feb-1
6
Mar-
16
Ap
r-16
May-1
6
Jun
-16
Jul-
16
Aug
-16
Sep
-16
Oct-
16
No
v-1
6
Dec-1
6
Jan
-17
$, bn
Trade Balance ($, bn)
-13.2
4.3
-10.5
10.7
-35-30-25-20-15-10-505
1015
Jan
-16
Feb-1
6
Mar-
16
Ap
r-16
May-1
6
Jun
-16
Jul-
16
Aug
-16
Sep
-16
Oct-
16
No
v-1
6
Dec-1
6
Jan
-17
Exports (%, yoy) Imports (%, yoy)
60.6
2.0
0
1
2
3
4
5
6
7
8
-10
10
30
50
70
90
110
130
150
Jul-
14
Se
p-1
4
No
v-1
4
Jan
-15
Mar-
15
May-1
5
Jul-
15
Se
p-1
5
No
v-1
5
Jan
-16
Mar-
16
May-1
6
Jul-
16
Se
p-1
6
No
v-1
6
Jan
-17
Gold imports (volume, tonnes)
Gold imports (value, $bn)-RHS
-25
-15
-5
5
15
25
35
45
55
15
20
25
30
35
Jul-
13
Oct-
13
Jan
-14
Ap
r-1
4
Jul-
14
Oct-
14
Jan
-15
Ap
r-1
5
Jul-
15
Oct-
15
Jan
-16
Ap
r-1
6
Jul-
16
Oct-
16
Jan
-17
Non-oil non-gold imports ($, bn)(Growth, %) - RHS
Page 19
Chitra Katha
BoP: CAD widens to 0.6% of GDP but Capital a/c surplus also widens
...on account of higher FDI inflows during the quarter
Source: RBI, Spark Capital Research
Short term debt falls
Source: RBI, Spark Capital Research
($bn) Sep-15 Dec-15 Mar-16 Jun-16 Sep-16
CAD (I+II) = A -8.6 -7.1 -0.3 -0.3 -3.4
Merchandise balance (I) -37.2 -34.0 -24.8 -23.8 -25.6
Invisibles (i+ii+iii) = (II) 28.6 26.9 24.4 23.5 22.2
Software Exports (i) 18.1 18.6 17.3 17.6 17.7
Remittances (ii) 16.4 15.3 15.1 14.2 14.0
Others (iii) -5.9 -7.0 -8.1 -8.2 -9.6
Capital Account (a+b+c+d+e) = B 8.1 10.9 3.5 7.1 12.7
FDI inflows (a) 6.5 10.7 8.8 4.1 17.2
Portfolio flows (b) -3.4 0.6 -1.5 2.1 6.1
ECBs (c) -1.7 -0.9 -2.4 -2.1 -2.5
NRI Deposits (d) 4.2 1.6 4.4 1.4 2.1
Others (e) 2.5 -1.0 -5.8 1.6 -10.1
Errors and Omissions (C.) -0.4 0.3 0.2 0.2 -0.7
Overall BoP (A+B+C) -0.9 4.1 3.3 7.0 8.5
CAD (% of GDP) -1.7 -1.4 -0.1 -0.1 -0.6
BoP: CAD expands to 0.6% of GDP but Capital a/c surplus also expands sharply...
($bn) Sep-15 Dec-15 Mar-16 Jun-16 Sep-16
Assets (A) 529.5 532.8 550.1 552.3 564.8
Liabilities (i+ii+iii+iv) = B 886.6 894.4 911.2 905.1 932.4
Direct Investment (i) 271.3 282.6 293.9 294.1 311.7
Equity Securities (ii) 143.6 141.7 141.9 141.5 148.1
Debt Securities (iii) 81.8 83.6 82.9 79.0 84.0
Other Investment (iv) 389.8 386.6 392.6 390.5 388.6
Currency & Deposits 122.0 122.8 127.1 126.5 130.2
Loans 171.7 170.8 170.5 170.3 167.0
Trade Credits 81.3 79.6 82.3 82.1 81.9
Other Liabilities 14.7 13.4 12.7 11.6 9.5
IIP: Net (A-B) -357.0 -361.7 -361.2 -352.8 -367.6
Assets to Liability Ratio (%) 59.7 59.6 60.4 61.0 60.6
India's International Investment Position (IIP)
83.6
81.2
16.8
15
16
17
18
19
20
21
22
23
24
25
60
70
80
90
100
Jun
-13
Sep
-13
Dec-1
3
Mar-
14
Jun
-14
Sep
-14
Dec-1
4
Mar-
15
Jun
-15
Sep
-15
Dec-1
5
Mar-
16
Jun
-16
Sep
-16
Short-term debt ($bn) Short-term (% of external debt) - RHS
-10
-5
0
5
10
15
20
Jun
-13
Sep
-13
Dec-1
3
Ma
r-1
4
Jun
-14
Sep
-14
Dec-1
4
Ma
r-1
5
Jun
-15
Sep
-15
Dec-1
5
Ma
r-1
6
Jun
-16
Sep
-16
FDI inflows ($ bn) Portfolio flows ($ bn)
Macro Indicators: External Sector
Page 20
Chitra Katha
Exchange rate: Rupee remains largely stable against major currencies with an appreciating bias
Rupee vs. US dollar
Source: RBI, Spark Capital Research
Rupee vs. Euro
Source: RBI, Spark Capital Research
Rupee vs. Pound
Source: RBI, Spark Capital Research
Rupee vs. Yen
Source: RBI, Spark Capital Research
Rupee vs. Yuan
Source: RBI, Spark Capital Research
Real effective exchange rate
Source: RBI, Spark Capital Research
60.34
67.81
50
55
60
65
70
Ap
r-14
Jul-
14
Oct-
14
Jan
-15
Ap
r-15
Jul-
15
Oct-
15
Jan
-16
Ap
r-16
Jul-
16
Oct-
16
Jan
-17
INR/USD
101.45
84.85
70
75
80
85
90
95
100
105
Ap
r-14
Jul-
14
Oct-
14
Jan
-15
Ap
r-15
Jul-
15
Oct-
15
Jan
-16
Ap
r-16
Jul-
16
Oct-
16
Jan
-17
INR/GBP
83.31
72.55
60
65
70
75
80
85
Ap
r-14
Jul-
14
Oct-
14
Jan
-15
Ap
r-15
Jul-
15
Oct-
15
Jan
-16
Ap
r-16
Jul-
16
Oct-
16
Jan
-17
INR/Euro
58.93
59.77
45
50
55
60
65
70
Ap
r-14
Jul-
14
Oct-
14
Jan
-15
Ap
r-15
Jul-
15
Oct-
15
Jan
-16
Ap
r-16
Jul-
16
Oct-
16
Jan
-17
INR/100Yen
99.3
112.9
116.8
95
100
105
110
115
120
Jul-1
3
Oct-
13
Jan
-14
Apr-
14
Jul-1
4
Oct-
14
Jan
-15
Apr-
15
Jul-1
5
Oct-
15
Jan
-16
Apr-
16
Jul-1
6
Oct-
16
Jan
-17
REER: 36 Currencies
Macro Indicators: External Sector
9.70
9.88
9.0
9.5
10.0
10.5
11.0A
pr-
14
Jul-
14
Oct-
14
Jan
-15
Ap
r-1
5
Jul-
15
Oct-
15
Jan
-16
Ap
r-1
6
Jul-
16
Oct-
16
Jan
-17
INR/Yuan
Page 21
Chitra Katha
Fiscal deficit reaches 93.8% of the full year target in Apr-Dec FY17…
Macro Indicators: Fiscal situation
Govt expenditure in Apr-Dec FY17 increases 11.9% yoy, largely in
line with the budgeted growth for FY17
Direct tax collections growth 10.7% yoy in Apr-Dec FY17 lags budget
estimates, as corporate tax collections remain muted
Source: CGA, Spark Capital Research
Indirect tax collections increase 25% yoy in Apr-Dec’17, led by
higher excise and service tax collections…
Fiscal deficit reaches 93.8% of the full year target in Apr-Dec FY17,
while revenue deficit reaches 113.9% of FY17BE
Source: CGA, Spark Capital Research
65.9
72.3
73.4
91.6
94.0
69.1
54.5
73.0
93.8
113.9
0
20
40
60
80
100
120
Net tax revenue Non-taxrevenue
Expenditure Fiscal deficit Revenue deficit
(% o
f fu
ll ye
ar
targ
et)
Apr-Dec FY16 Apr-Dec FY17
15.4
33.2
12.5
9.2
15.3
20.9
0.5
11.9
9.5
18.6
0 5 10 15 20 25 30 35
Net tax revenue
Non-tax revenue
Expenditure
Non-plan exp
Plan exp
Growth, %, yoy
Apr-Dec FY17 FY17BE
22.8
9.0
14.3
20.5
4.8
10.7
0
4
8
12
16
20
24
Personal income tax Corporate tax Direct taxes
(Gro
wth
, %
, yo
y)
FY17BE Apr-Dec FY173.2
34.5
17.1
20.0
4.9
43.7
25.0
25.0
0
10
20
30
40
50
60
Custom duties Excise duties Service tax Indirect taxes
(Gro
wth
, %
, yo
y)
FY17BE Apr-Dec FY17
Page 22
Chitra Katha Macro Indicators: Fiscal situation
Plan expenditure on Road and Highways
Source: CGA, Spark Capital Research
Plan expenditure on Rural development
Source: CGA, Spark Capital Research
Plan expenditure on Railways
Source: CGA, Spark Capital Research
Govt spending thrust continues to be on Roads, Rural and Urban development
Government’s clear focus is to push capex
Absolute (Rs. tn) Growth (%, yoy)
(%, yoy) FY17BE Apr-Dec FY17 FY16RE FY17BE Apr-Dec
FY17
Total Expenditure 19.8 14.7 7.3 10.8 11.9
- Non-plan 14.3 10.6 8.9 9.2 9.5
-- Non-plan revenue 13.3 9.9 9.3 9.5 10.3
-- Non-plan capital 1.0 0.7 4.2 5.4 -1.2
- Plan 5.5 4.1 3.1 15.3 18.6
-- Plan revenue 4.0 3.0 -6.3 20.5 30.5
-- Plan capital 1.5 1.1 35.4 2.9 -5.4
Trend in Expenditure during Apr-Dec FY17 Trend in Revenue during Apr-Dec FY17
Absolute (Rs tn) Growth (%)
FY17BE Apr- Dec
FY17 FY17BE
Apr- Dec
FY17
Total tax revenue 10.5 7.5 11.2 20.9
Direct tax 8.4 5.4 12.8 10.7
- Personal income tax 3.5 2.2 18.6 20.5
- Corporate tax 4.9 3.2 9.0 4.8
Indirect tax 7.8 5.8 10.8 25.0
- Custom duties 2.3 1.7 9.8 4.9
- Excise duties 3.2 2.5 12.2 43.7
- Service tax 2.3 1.6 10.0 25.0
Non-tax revenue 3.2 1.8 24.9 0.5
775
625 605
510 492
554 561
488
377
FY17FY16FY15FY14FY13FY12FY11FY10FY09
Ministry of Rural Development (Apr-Dec, Rs bn)
24% 489
364
251 209 205 186
136 122 111
FY17FY16FY15FY14FY13FY12FY11FY10FY09
Ministry of Road Transport and Highways (Apr-Dec, Rs bn)
34%
199
273
207 195
167
117 119 110
53
FY17FY16FY15FY14FY13FY12FY11FY10FY09
Ministry of Railways (Apr-Dec, Rs bn)
Page 23
Chitra Katha
13
11
9 9 8
5
4 3
2 1 1 1
-7
5
1 2
5 5 3
2 0
1
-4
4
-2
-9 -10
-5
0
5
10
15
Turkey Brazil Hang Seng Nifty Sensex Taiwan Shangai Malaysia Indonesia South Africa Shenzen Thailand Russia
Change YTD % Change 1M %
…….Same is the case with most of the developed markets with US indices touching its life time highs
Source: Bloomberg, Spark Capital Research.
All Emerging markets (except Thailand and Russia) indices have seen rally since start of CY17…..
Source: Bloomberg, Spark Capital Research.
Indian market indices are up 5% in last 1 month
Macro Indicators: Market Performance
9
6 5
3 3
2 2 1
1
0 0
-3
3 3 4
0
0 0
1 0 0
-2
0
-3 -4
-2
0
2
4
6
8
10
NASDAQ S&P 500 Dow Jones US Korea Germany Canada UK Australia Euro Stoxx Japan France Spain
Change YTD % Change 1M %
Page 24
Chitra Katha
27 25
19
7 5 4
4 3 1
-1 -3 -3 -5
-15
-19
2 3 3 2 2
4
0
1 2 2
-1 0
0
-1
7
-30
-20
-10
0
10
20
30
Brazil Real Ruble S. Af Rand JPY AU $ Korean Won Indo Rup Thai Bhat Sing $ INR Euro MalayRinggit
Yuan GBP Turkish Lira
Change YTD % Change 1M %
INR has been fairly stable so far while other emerging markets currencies such as BRL, RUB gained in CY17
Source: Bloomberg, Spark Capital Research.
Silver gained 15% in CY17 so far…..
Source: Bloomberg, Spark Capital Research.
All base metals are up since start of this year ….
Source: Bloomberg, Spark Capital Research.
Precious and Base metals posted one of highest returns so far…..
Macro Indicators: Market Performance
15
14 14
10 9
7 7
4 4
7
5
3
0
2
4
6
8
10
12
14
16
18
Silver ($/OZ) Palladium($/Oz)
Platinum($/Oz)
Silver (INR/kg) Gold ($/OZ) Gold(INR/10g)
Change YTD % Change 1M %
15 13
11 10
7
1
-2 -2
-8
-18
8
-8
1 0
0
2 1
-1
-8 -3
-20
-15
-10
-5
0
5
10
15
20
Ch
ina I
ron
ore
Lea
d
Alu
min
ium
Zin
c
Co
pp
er
Bre
nt
WT
I
AU
Coa
l
S.A
f C
oal
Indo
Co
al
Change YTD % Change 1M %
Page 25
Chitra Katha
BSE mid and small cap indices gained 18% post falling to lows of Dec post demonetisation
Source: Bloomberg, Spark Capital Research.
CY17 rally in all sectors negated the fall seen post demonetisation
Macro Indicators: Market Performance
Delivery volume increased to 44% in month of Feb 2017- Highest in last one year
Source: Bloomberg, Spark Capital Research
2.2 3.4 3.2 5.3 5.1 4.7 3.5 4.7 3.2 4.0 4.2 4.6 4.5
4.8
4.3 4.2 3.9 4.5 4.9 3.8 3.9 3.6 4.0 4.2 4.0 4.2 3.6 4.5 4.4 4.8 5.4 5.3 4.5 5.4 3.8 4.7 4.6
45% 44%
39% 42%
36%
38% 39%
42% 43% 44%
43%
41% 40%
46%
42% 45% 41%
43% 44%
38%
39% 36%
39% 38%
37%
42% 37%
39%
38% 37% 38%
40%
39%
41% 41% 41%
44%
30%
32%
34%
36%
38%
40%
42%
44%
46%
48%
2.0
2.5
3.0
3.5
4.0
4.5
5.0
5.5
6.0
Fe
b-1
4
Mar-
14
Ap
r-1
4
May-1
4
Jun
-14
Jul-
14
Au
g-1
4
Se
p-1
4
Oct-
14
No
v-1
4
De
c-1
4
Jan
-15
Fe
b-1
5
Mar-
15
Ap
r-1
5
May-1
5
Jun
-15
Jul-
15
Au
g-1
5
Se
p-1
5
Oct-
15
No
v-1
5
De
c-1
5
Jan
-16
Fe
b-1
6
Mar-
16
Ap
r-1
6
May-1
6
Jun
-16
Jul-
16
Au
g-1
6
Se
p-1
6
Oct-
16
No
v-1
6
De
c-1
6
Jan
-17
Fe
b-1
7
Cash market Turnover (Rs. tn) Delivered volume % (RHS)
-17% -12% -12% -11% -10% -10% -9% -8% -8% -7% -7% -7% -6%
-3% -2% -2% 0%
20%
10%
18% 18% 15%
17% 15% 14%
22%
12% 8%
14% 12%
14%
8%
17%
6%
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
Realty Auto BSESmallcap
BSEMidcap
FMCG Banks BSE 500 BSE 200 Metals Nifty H. care Cap gds Sensex Power BSE TMTOil & Gas Tech
Demonetisation (08/11) to Dec lows (26/12) Dec Lows (26/12) to Now
Page 26
Chitra Katha
MSCI Indices US$ performance – Brazil and China posted one of the best returns in US$ so far
Source: Bloomberg, Spark Capital Research
15
12 11 10 10
8
6 6
3 2
(4)
3
5
7
5 4 4 3 3 2
0
(6)
(10)
(5)
0
5
10
15
20
Brazil China India EM Asia APAC ex JP APAC US World Indonesia Europe Russia
Change YTD% Change 1M%
MSCI Indices: India’s Forward PB @ 2.6x
Source: Bloomberg, Spark Capital Research
MSCI Indices: India’s Forward PE @ 17.1x
Source: Bloomberg, Spark Capital Research
USA is the most expensive market followed by India in terms of PE and PB multiple
Macro Indicators: Market and Sector valuations
18.0 17.1 16.7
15.5 14.8
13.8 13.4 13.0 12.4 12.3
6.2
4
6
8
10
12
14
16
18
US
Ind
ia
Worl
d
Ind
on
esia
Euro
pe
AP
AC
AP
xJ
Bra
zil
EM
Asia
Ch
ina
Ru
ssia
2.8 2.6
2.5
2.2
1.7 1.6 1.5 1.5 1.5 1.4
0.7
0.0
0.5
1.0
1.5
2.0
2.5
3.0
US
Ind
ia
Ind
on
esia
Worl
d
Euro
pe
Bra
zil
AP
xJ
Ch
ina
EM
Asia
AP
AC
Ru
ssia
Page 27
Chitra Katha
Stocks near 52 week high (BSE 200 subset)
Source: Bloomberg, Spark Capital Research
Stock & Index 52 week H/L: Key trends
Stocks near 52 week low (BSE 200 subset)
Source: Bloomberg, Spark Capital Research
Nifty stocks performance snapshot
Source: Bloomberg, Spark Capital Research
Macro Indicators: Market Performance
0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0%
Vakrangee Soft.Jindal SteelJaiprakash
BioconRIL
Adani PowerPetronet
TVS MotorBajaj Finserv
Procter & GambleGAIL
L&T FinIB Hous. Fin
Tata SteelIGL
IndusIndHCL Tech
Supreme IndustriesYes
GMR InfraBharat Forge
Near 52 Week highs
0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0%
EmamiContainer Corp
CRISILDabur
Divi's LabsM&M
United Brew.Colgate
Torrent PjharmaLupin
InfosysGSKCH
HULAurobindo Ph.
SanofiAmara Raja
GSK PharmaDr. Reddy's
BhartiGillette
Near 52 Week lows
Name Sector Price Performance (%)
Current 52W high 52W low 1m 3M YTD
Idea Cellular Ltd Telecom 115 128 66 46.9 55.5 8.4
Reliance Industries Ltd Oil & Gas 1,239 1,257 926 20.9 24.7 30.4
Bharti Airtel Ltd Telecom 356 401 283 9.9 18.2 11.9
Bharat Heavy Electricals Ltd Cap gds 153 163 90 9.5 20.6 60.7
Grasim Industries Ltd Materials 1,018 1,077 651 9.4 23.7 54.3
HDFC Bank Ltd Banks 1,394 1,454 928 7.9 17.2 45.0
Axis Bank Ltd Banks 509 638 374 7.6 8.0 31.7
Infosys Ltd IT 1,012 1,279 900 7.5 3.6 (9.7)
Tech Mahindra Ltd IT 500 557 402 7.0 2.6 21.1
GAIL India Ltd Power 515 531 290 6.9 23.5 69.5
Tata Consultancy Services Ltd IT 2,490 2,745 2,052 5.6 8.2 12.6
Sun Pharmaceutical Industries Ltd Pharma 674 881 572 5.3 (5.6) (22.6)
IndusInd Bank Ltd Banks 1,319 1,366 802 5.3 22.9 61.6
Wipro Ltd IT 490 607 408 5.2 5.4 (7.7)
Coal India Ltd Energy 330 350 272 3.8 8.4 5.9
Eicher Motors Ltd Auto 24,337 26,641 17,895 3.6 20.3 28.9
Mahindra & Mahindra Ltd Auto 1,294 1,509 1,141 3.4 10.3 5.2
Asian Paints Ltd Materials 1,002 1,230 837 3.3 6.0 16.2
ITC Ltd FMCG 265 292 178 2.8 15.6 37.2
ICICI Bank Ltd Banks 279 298 182 2.5 7.2 50.9
Tata Steel Ltd Materials 481 496 245 2.4 17.6 93.4
Tata Power Co Ltd Power 83 86 56 2.1 18.1 43.7
Kotak Mahindra Bank Ltd Banks 801 836 586 2.0 6.4 30.0
Larsen & Toubro Ltd Cap gds 1,466 1,615 1,053 1.8 6.9 32.0
Yes Bank Ltd Banks 1,422 1,472 663 1.7 21.8 107.1
Zee Entertainment Enterprises Ltd Media 504 590 364 1.4 14.6 32.2
UltraTech Cement Ltd Materials 3,737 4,130 2,690 1.4 6.9 34.9
Hindustan Unilever Ltd FMCG 866 954 782 1.2 3.9 1.9
Cipla Ltd/India Pharma 585 622 457 0.9 3.6 11.7
State Bank of India Banks 268 289 153 0.7 2.8 72.1
Maruti Suzuki India Ltd Auto 5,952 6,234 3,193 0.6 22.1 74.6
Bharat Petroleum Corp Ltd Oil & Gas 708 735 370 0.4 10.7 85.1
Housing Development Finance Corp Financials 1,376 1,464 1,022 0.1 10.6 30.6
HCL Technologies Ltd IT 840 870 706 (0.5) 4.7 1.9
ACC Ltd Materials 1,418 1,738 1,173 (0.9) 8.3 19.0
Hero MotoCorp Ltd Auto 3,176 3,740 2,471 (1.2) 4.3 24.3
Ambuja Cements Ltd Materials 230 282 185 (1.2) 13.3 21.6
Lupin Ltd Pharma 1,464 1,875 1,280 (1.9) (3.0) (15.2)
Bank of Baroda Banks 164 192 127 (2.0) (2.1) 23.8
Bajaj Auto Ltd Auto 2,795 3,122 2,172 (2.1) 7.0 24.9
Adani Ports & Special Economic Zone Shipping 297 317 170 (2.4) 11.9 48.3
Bosch Ltd Auto 21,646 25,671 16,377 (3.6) 14.9 29.5
Dr Reddy's Laboratories Ltd Pharma 2,857 3,690 2,799 (4.6) (9.8) (4.6)
Oil & Natural Gas Corp Ltd Energy 195 212 126 (4.8) 5.3 35.2
Aurobindo Pharma Ltd Pharma 679 895 622 (4.8) (8.3) 10.3
Hindalco Industries Ltd Materials 181 200 67 (5.2) 0.1 160.3
Power Grid Corp of India Ltd Power 193 209 129 (5.8) 2.2 44.2
NTPC Ltd Power 165 178 118 (6.8) 2.4 36.1
Tata Motors Ltd Auto 458 599 290 (15.5) 1.2 51.7
Bharti Infratel Ltd Cap gds 288 414 283 (18.6) (19.0) (21.0)
Page 28
Chitra Katha
…..this is after US$3.8bn FII selling in Nov-Dec 16
Source: Bloomberg
Foreign investment in Equity Instruments (net) Foreign investment in Debt Instruments (net)
US $mn 1QCY 2QCY 3QCY 4QCY Total US $mn 1QCY 2QCY 3QCY 4QCY Total
2017 1,284 na na na 1,284 2017 581 na na na 581
2016 1,214 1,742 4,554 -4,607 2,903 2016 -739 -1,186 2,185 -6,720 -6,459
2015 6,000 184 (2,576) (334) 3,274 2015 6,903 (461) (110) 1,229 7,560
2014 4,086 5,832 3,896 2,348 16,162 2014 6,160 4,252 9,329 6,511 26,252
2013 10,151 2,959 61 6,584 19,754 2013 2,294 (4,017) (4,750) (2,016) (8,489)
2012 8,866 -350 7,617 8,414 24,548 2012 3,941 229 897 1,795 6,862
2011 -657 1,151 -644 -362 -512 2011 2,424 600 1,174 4,348 8,546
2010 4,369 2,331 12,554 10,067 29,321 2010 4,103 1,371 3,733 843 10,050
2009 -1,345 6,421 7,369 5,194 17,639 2009 (1,306) 145 928 1,393 1,160
2008 -3,551 -3,322 -2,710 -3,335 -12,918 2008 907 (655) 1,787 665 2,705
2007 1,534 4,207 7,462 5,315 18,518 2007 139 377 515 1,395 2,425
2006 3,930 -1,381 2,678 3,110 8,338 2006 (300) 296 360 526 883
2005 3,801 891 3,864 2,345 10,901 2005 113 (261) (186) (903) (1,236)
2004 3,198 305 1,471 3,653 8,627 2004 354 (409) (85) 831 692
2003 361 933 1,824 3,585 6,702 2003 168 677 68 96 1,008
2002 583 -91 181 65 738 2002 126 (113) (56) 54 10
Source: Bloomberg, Spark Capital Research
FII’s bought US$1.3 in Indian equities in CY17 so far….
Macro Indicators: Fund flows
1.9 1.1 0.9 0.1
2.3 (0.1) 2.9 1.4 1.7 1.2
(0.1)
(1.0)
0.9
(2.6) (0.9)
0.8 (1.1)
0.0
(1.7)
(1.2)
4.1
0.6
0.4 0.8 1.7 1.5 1.4 (0.7) (2.6) (1.2)
(0.0) 1.3
3.8 2.8 2.7
2.8
1.9
1.8
3.7
2.2 1.0 0.5
(1.3)
0.3 (0.1)
(0.1)
0.0 2.4
(0.6)
(0.6)
0.2
(1.2)
0.2
0.5
(0.8) (1.0)
1.0
(0.4)
1.6
(1.1)
(2.9) (2.8)
(0.4)
1.0
-8
-6
-4
-2
0
2
4
6
8
Jul-
14
Au
g-1
4
Se
p-1
4
Oct-
14
No
v-1
4
De
c-1
4
Jan
-15
Fe
b-1
5
Mar-
15
Ap
r-1
5
May-1
5
Jun
-15
Jul-
15
Au
g-1
5
Se
p-1
5
Oct-
15
No
v-1
5
De
c-1
5
Jan
-16
Fe
b-1
6
Mar-
16
Ap
r-1
6
May-1
6
Jun
-16
Jul-
16
Au
g-1
6
Se
p-1
6
Oct-
16
No
v-1
6
De
c-1
6
Jan
-17
Fe
b-1
7
FII Investments in Debt ($bn) FII Investments in Equity ($bn)
Page 29
Chitra Katha
DII bought US$5bn since demonetization and supported markets amid FII selling in Nov and Dec
Source: Bloomberg, Spark capital research
DII’s have invested US$7bn and US$40bn in Indian Equities and Debt respectively so far in CY17
Domestic mutual funds net debt investment (US$bn)
Source: Bloomberg, Spark Capital Research
Domestic mutual funds net equity investment -US$ 7bn on YTD basis
Source: Bloomberg, Spark Capital Research
Macro Indicators: Fund flows
-0.5
0.4
-0.2
0.7
-1.2
0.9
-1.3
0.4 0.0
1.8 1.3
1.9
0.1
2.5
1.6
-0.2
1.2
0.9 1.9 1.5
-2.4
-0.4
1.1
-0.3 -0.9
-0.7
0.3 1.2
2.7
1.3
0.7
0.1
-3
-2
-1
0
1
2
3
Jul-
14
Au
g-1
4
Se
p-1
4
Oct-
14
No
v-1
4
De
c-1
4
Jan
-15
Fe
b-1
5
Mar-
15
Ap
r-1
5
May-1
5
Jun
-15
Jul-
15
Au
g-1
5
Se
p-1
5
Oct-
15
No
v-1
5
De
c-1
5
Jan
-16
Fe
b-1
6
Mar-
16
Ap
r-1
6
May-1
6
Jun
-16
Jul-
16
Au
g-1
6
Se
p-1
6
Oct-
16
No
v-1
6
De
c-1
6
Jan
-17
Fe
b-1
7
DII Investment in Equity ($bn)
5 4 8 12
18 18
38
55
84 86 90
96
57
40
0
20
40
60
80
100
120
FY
04
FY
05
FY
06
FY
07
FY
08
FY
09
FY
10
FY
11
FY
12
FY
13
FY
14
FY
15
FY
16
YT
D
0 0
3
2
4
2
(2)
(4)
(0)
(4) (4)
7
10
7
-6
-4
-2
0
2
4
6
8
10
12
FY
04
FY
05
FY
06
FY
07
FY
08
FY
09
FY
10
FY
11
FY
12
FY
13
FY
14
FY
15
FY
16
YT
D
Page 30
STRATEGY Chitra Katha
India market cap to GDP is still hovering around 10 year avg whereas Midcaps valuations are approaching its peak
Sensex 12 month forward PE is trading at around 10Y average
Source: Bloomberg
Nifty 12 month forward PE is hovering around +1sd
Source: Bloomberg
India market cap to GDP below its average since 2006- 65% (Current)
Source: Bloomberg, Spark Capital Research
BSE Mid caps 12 month forward PE is trading above +1sd
Source: Bloomberg, Spark Capital Research
Macro Indicators: Market and Sector valuations
15.1
17.2
13.1
80
120
160
200
240
280
320
8
10
12
14
16
18
20
22
De
c-0
5
Jul-
06
Fe
b-0
7
Se
p-0
7
Ap
r-0
8
No
v-0
8
Jun
-09
Jan
-10
Au
g-1
0
Mar-
11
Oct-
11
May-1
2
De
c-1
2
Jul-
13
Fe
b-1
4
Se
p-1
4
Ap
r-1
5
No
v-1
5
Jun
-16
Jan
-17
Sensex PE Avg +1sd -1sd Price (Index)
14.7
16.6
12.8
80
120
160
200
240
280
320
8
10
12
14
16
18
20
22
De
c-0
5
Jul-
06
Fe
b-0
7
Se
p-0
7
Ap
r-0
8
No
v-0
8
Jun
-09
Jan
-10
Au
g-1
0
Mar-
11
Oct-
11
May-1
2
De
c-1
2
Jul-
13
Fe
b-1
4
Se
p-1
4
Ap
r-1
5
No
v-1
5
Jun
-16
Jan
-17
Nifty PE Avg +1sd -1sd Price (Index)
12.9
16.2
9.5
4
6
8
10
12
14
16
18
20
Dec-0
5
Jul-
06
Feb-0
7
Sep
-07
Ap
r-08
No
v-0
8
Jun
-09
Jan
-10
Aug
-10
Mar-
11
Oct-
11
May-1
2
Dec-1
2
Jul-
13
Feb-1
4
Sep
-14
Ap
r-15
No
v-1
5
Jun
-16
Jan
-17
BSE Midcaps PE Avg +1sd -1sd
88
147
49
98
59 49
81
64
70
40
60
80
100
120
140
160
Jan
-05
Jul-
05
Jan
-06
Jul-
06
Jan
-07
Jul-
07
Jan
-08
Jul-
08
Jan
-09
Jul-
09
Jan
-10
Jul-
10
Jan
-11
Jul-
11
Jan
-12
Jul-
12
Jan
-13
Jul-
13
Jan
-14
Jul-
14
Jan
-15
Jul-
15
Jan
-16
Jul-
16
Jan
-17
India Mkt cap to GDP Avg
Page 31
STRATEGY Chitra Katha
Nifty Expected average return chart based on 12 month forward PE
Source: Bloomberg, Spark Capital Research
15.9
9.1 7.1
1.7
(4.1)
33.5
21.0
7.7 5.7
(8.3)(15)
(10)
(5)
0
5
10
15
20
25
30
35
40
<13x 13x -14x 14x -15.5x 15.5x -16.5x >16.5x
6M forward return 12M forward return Hit rate
Sensex 12 month forward PB trades at last 10 years average of 2.6x
Source: Bloomberg
Nifty 12 month forward PB is trading around average levels
Source: Bloomberg
Nifty delivered 8% average annual return when trading in current range of valuations historically
Sensex 12 month forward implied ROE is below average levels
Source: Bloomberg, Spark Capital Research
Macro Indicators: Market and Sector valuations
2.6
3.1
2.1
1.5
2.0
2.5
3.0
3.5
4.0
4.5
Jan
-06
May-0
6S
ep
-06
Jan
-07
May-0
7S
ep
-07
Jan
-08
May-0
8S
ep
-08
Jan
-09
May-0
9S
ep
-09
Jan
-10
May-1
0S
ep
-10
Jan
-11
May-1
1S
ep
-11
Jan
-12
May-1
2S
ep
-12
Jan
-13
May-1
3S
ep
-13
Jan
-14
May-1
4S
ep
-14
Jan
-15
May-1
5S
ep
-15
Jan
-16
May-1
6S
ep
-16
Jan
-17
Sensex PB Avg +1sd -1sd
2.5
3.0
2.1
1.5
2.0
2.5
3.0
3.5
4.0
4.5
Jan
-05
May-0
5S
ep
-05
Jan
-06
May-0
6S
ep
-06
Jan
-07
May-0
7S
ep
-07
Jan
-08
May-0
8S
ep
-08
Jan
-09
May-0
9S
ep
-09
Jan
-10
May-1
0S
ep
-10
Jan
-11
May-1
1S
ep
-11
Jan
-12
May-1
2S
ep
-12
Jan
-13
May-1
3S
ep
-13
Jan
-14
May-1
4S
ep
-14
Jan
-15
May-1
5S
ep
-15
Jan
-16
May-1
6S
ep
-16
Jan
-17
Nifty PB Avg +1sd -1sd
17.2
19.0
15.3
14
15
16
17
18
19
20
21
22
Jan
-05
May-0
5S
ep
-05
Jan
-06
May-0
6S
ep
-06
Jan
-07
May-0
7S
ep
-07
Jan
-08
May-0
8S
ep
-08
Jan
-09
May-0
9S
ep
-09
Jan
-10
May-1
0S
ep
-10
Jan
-11
May-1
1S
ep
-11
Jan
-12
May-1
2S
ep
-12
Jan
-13
May-1
3S
ep
-13
Jan
-14
May-1
4S
ep
-14
Jan
-15
May-1
5S
ep
-15
Jan
-16
May-1
6S
ep
-16
Jan
-17
Sensex ROE Avg +1sd -1sd
Page 32
STRATEGY Chitra Katha
BSE Bankex index saw sharp rerating in last 3 months
BSE Auto- 12 month forward PE trend
Source: Bloomberg
BSE Bankex- 12 month forward PB trend
Source: Bloomberg
BSE Cap gds- 12 month forward PE trend
Source: Bloomberg
BSE Cons durable: 12 month forward PE
Source: Bloomberg
BSE FMCG- 12 month forward PE trend
Source: Bloomberg
BSE Healthcare-12 month forward PE trend
Source: Bloomberg
Macro Indicators: Market and Sector valuations
13.0
16.1
9.9
5
7
9
11
13
15
17
19
21
23
Dec-0
5
Jul-
06
Feb-0
7
Sep
-07
Ap
r-08
No
v-0
8
Jun
-09
Jan
-10
Aug
-10
Mar-
11
Oct-
11
May-1
2
Dec-1
2
Jul-
13
Feb-1
4
Sep
-14
Ap
r-15
No
v-1
5
Jun
-16
Jan
-17
Auto PE(x) Avg
+1sd -1sd
2.0
1.9
2.2
1.5
1.0
1.2
1.4
1.6
1.8
2.0
2.2
2.4
2.6
Dec-0
5
Jul-
06
Feb-0
7
Sep
-07
Ap
r-08
No
v-0
8
Jun
-09
Jan
-10
Aug
-10
Mar-
11
Oct-
11
May-1
2
Dec-1
2
Jul-
13
Feb-1
4
Sep
-14
Ap
r-15
No
v-1
5
Jun
-16
Jan
-17
Bankex PB Avg
+1sd -1sd
22.7 20.5
25.9
15.0
5
10
15
20
25
30
35
40
Dec-0
5
Jul-
06
Feb-0
7
Sep
-07
Ap
r-08
No
v-0
8
Jun
-09
Jan
-10
Aug
-10
Mar-
11
Oct-
11
May-1
2
Dec-1
2
Jul-
13
Feb-1
4
Sep
-14
Ap
r-15
No
v-1
5
Jun
-16
Jan
-17
Cap gds PE(x) Avg
+1sd -1sd
22.5
30.0
15.1
5
10
15
20
25
30
35
40
45
Dec-0
5
Jul-
06
Feb-0
7
Sep
-07
Ap
r-08
No
v-0
8
Jun
-09
Jan
-10
Aug
-10
Mar-
11
Oct-
11
May-1
2
Dec-1
2
Jul-
13
Feb-1
4
Sep
-14
Ap
r-15
No
v-1
5
Jun
-16
Jan
-17
Cons durables PE(x)Avg+1sd-1sd
24.9
29.0
20.8
15
17
19
21
23
25
27
29
31
33
35
Dec-0
5
Jul-
06
Feb-0
7
Sep
-07
Ap
r-08
No
v-0
8
Jun
-09
Jan
-10
Aug
-10
Mar-
11
Oct-
11
May-1
2
Dec-1
2
Jul-
13
Feb-1
4
Sep
-14
Ap
r-15
No
v-1
5
Jun
-16
Jan
-17
FMCG PE(x) Avg
+1sd -1sd
19.7
23.2
16.3
10
12
14
16
18
20
22
24
26
28
Dec-0
5
Jul-
06
Feb-0
7
Sep
-07
Ap
r-08
No
v-0
8
Jun
-09
Jan
-10
Aug
-10
Mar-
11
Oct-
11
May-1
2
Dec-1
2
Jul-
13
Feb-1
4
Sep
-14
Ap
r-15
No
v-1
5
Jun
-16
Jan
-17
Healthcare PE(x) Avg
+1sd -1sd
Page 33
STRATEGY Chitra Katha
BSE IT- 12 month forward PE trend
Source: Bloomberg
BSE IT trades at below its 10 year average due to muted US$ dollar revenue growth
BSE Oil & Gas- 12 month forward PE trend
Source: Bloomberg
BSE Power- 12 month forward PE trend
Source: Bloomberg
BSE Realty- 12 month forward PE trend
Source: Bloomberg
BSE PSU- 12 month forward PE trend
Source: Bloomberg
Macro Indicators: Market and Sector valuations
15.0
17.5
20.9
14.2
8
10
12
14
16
18
20
22
24
26
Dec
-05
Jul-
06
Feb
-07
Sep
-07
Ap
r-08
No
v-08
Jun
-09
Jan
-10
Aug
-10
Mar
-11
Oct
-11
May
-12
Dec
-12
Jul-
13
Feb
-14
Sep
-14
Ap
r-15
No
v-15
Jun
-16
Jan
-17
IT Avg +1sd -1sd
11.5
13.7
9.3
6
8
10
12
14
16
18
20
Dec
-05
Jul-0
6
Feb-
07
Sep-
07
Apr-
08
Nov
-08
Jun-
09
Jan-
10
Aug-
10
Mar
-11
Oct
-11
May
-12
Dec
-12
Jul-1
3
Feb-
14
Sep-
14
Apr-
15
Nov
-15
Jun-
16
Jan-
17
Oil & Gas PE(x) Avg
+1sd -1sd
14.3 15.5
20.2
10.8
10
12
14
16
18
20
22
24
26
28
30
Jan
-08
Jul-
08
Jan
-09
Jul-
09
Jan
-10
Jul-
10
Jan
-11
Jul-
11
Jan
-12
Jul-
12
Jan
-13
Jul-
13
Jan
-14
Jul-
14
Jan
-15
Jul-
15
Jan
-16
Jul-
16
Jan
-17
Power PE(x) Avg +1sd -1sd
18.3
13.1
17.4
8.8
4
6
8
10
12
14
16
18
20
22
24
26
Jan
-08
Jul-
08
Jan
-09
Jul-
09
Jan
-10
Jul-
10
Jan
-11
Jul-
11
Jan
-12
Jul-
12
Jan
-13
Jul-
13
Jan
-14
Jul-
14
Jan
-15
Jul-
15
Jan
-16
Jul-
16
Jan
-17
Realty PE(x) Avg +1sd -1sd
11.8
10.1
11.6
8.6
6
7
8
9
10
11
12
13
14
Jan
-10
May-1
0
Sep
-10
Jan
-11
May-1
1
Sep
-11
Jan
-12
May-1
2
Sep
-12
Jan
-13
May-1
3
Sep
-13
Jan
-14
May-1
4
Sep
-14
Jan
-15
May-1
5
Sep
-15
Jan
-16
May-1
6
Sep
-16
Jan
-17
PSU PE(x) Avg+1sd -1sd
Page 34
Chitra Katha
Name Sector 3QFY17 2QFY17 1QFY17 4QFY16 3QFY16 2QFY16 1QFY16 4QFY15
Beat % 28% 42% 40% 42% 30% 30% 34% 28%
Inline% 30% 24% 36% 28% 34% 38% 38% 30%
Miss% 42% 34% 24% 30% 36% 32% 28% 42%
Maruti Suzuki India Auto Inline Beat Beat Miss Miss Inline Inline Beat
Eicher Motors Auto Inline Miss Beat Inline Beat Beat Beat Beat
UltraTech Cement Cement Beat Beat Beat Beat Beat Miss Beat Inline
Ambuja Cements Cement Miss Beat Beat Beat Miss Miss Miss Inline
ACC Cement Miss Miss Inline Beat Miss Miss Miss Beat
HDFC Bank Financials Inline Inline Inline Inline Inline Inline Inline Inline
HDFC Financials Inline Inline Inline Beat Inline Inline Inline Inline
ICICI Bank Financials Beat Beat Miss Miss Inline Inline Inline Inline
Axis Bank Financials Miss Miss Miss Miss Inline Inline Inline Inline
IndusInd Bank Financials Inline Inline Inline Inline Inline Inline Inline Inline
Yes Bank Financials Beat Inline Inline Beat Beat Beat Inline Inline
Adani Ports & SEZ Infra Miss Beat Beat Beat Beat Inline Inline Beat
Tata Consultancy Services IT Inline Miss Inline Inline Inline Inline Inline Miss
Infosys IT Inline Inline Miss Inline Inline Inline Inline Beat
Wipro IT Miss Inline Miss Miss Inline Inline Inline Inline
HCL Technologies IT Beat Beat Beat Beat Beat Inline Inline Miss
Reliance Industries O&G Inline Beat Beat Inline Inline Beat Inline Beat
Bharti Airtel Telecom Miss Beat Beat Beat Miss Beat Beat Miss
Bharti Infratel Telecom Miss Beat Inline Beat Inline Inline Inline Inline
Idea Cellular Telecom Miss Miss Miss Beat Inline Inline Inline Beat
Bank Of Baroda Financials Miss Miss Miss Miss Miss Miss Beat Miss
Gail India O&G Inline Inline Beat Beat Beat Miss Miss Miss
Itc Consumption Beat Miss Inline Inline Miss Miss Miss Miss
Mahindra & Mahindra Auto Beat Beat Beat Miss Miss Inline Beat Beat
State Bank Of India Financials Beat Inline Inline Miss Miss Beat Beat Beat
Hindalco Industries Metals & Mining Miss Beat Beat Beat Beat Beat Miss Miss
Tata Steel Metals & Mining Beat Miss Beat Miss Miss Beat Beat Miss
Sun Pharmaceutical Pharma Miss Beat Beat Miss Beat Miss Miss Miss
Zee Media Miss Miss Beat Inline Miss Inline Beat Beat
BPCL O&G Inline Miss Beat Beat Beat Inline Beat Beat
Cipla Pharma Inline Miss Inline Miss Miss Miss Beat Miss
Asian Paints Consumption Inline Miss Beat Miss Inline Miss Beat Miss
Tata Power Co Power Miss Beat Miss Miss Miss Inline Beat Inline
ONGC O&G Miss Beat Beat Beat Miss Beat Miss Miss
Dr. Reddy'S Pharma Beat Miss Miss Miss Miss Beat Beat Miss
Hero Motocorp Auto Beat Beat Inline Inline Inline Beat Beat Miss
Hindustan Unilever Consumption Miss Inline Miss Beat Miss Miss Miss Beat
Lupin Pharma Inline Miss Inline Beat Inline Miss Miss Miss
Kotak Mahindra Bank Financials Beat Beat Inline Inline Inline Inline Miss Beat
Larsen & Toubro Cap goods Miss Beat Miss Beat Miss Beat Miss Inline
Ntpc Power Inline Beat Inline Beat Beat Beat Inline Beat
Bharat Heavy Electricals Cap goods Beat Beat Beat Inline Miss Miss Miss Inline
Power Grid Corp Of India Power Inline Inline Beat Miss Beat Inline Inline Inline
Coal India Metals & Mining Miss Miss Miss Miss Beat Miss Miss Miss
Tata Motors Auto Miss Miss Miss Beat Beat Miss Miss Miss
Tech Mahindra IT Beat Miss Inline Beat Inline Beat Beat Miss
Bajaj Auto Auto Beat Beat Inline Inline Beat Beat Beat Miss
Aurobindo Pharma Pharma Miss Inline Inline Inline Inline Miss Inline Miss
Grasim Industries Cement Miss Inline Beat Beat Beat Beat Inline Miss
Bosch Auto Miss Beat Inline Inline Miss Miss Beat Inline
Historic Beat Misses of NIFTY
Page 35
Chitra Katha
Quarterly Sales growth
Source: Bloomberg consensus estimates, Spark Capital Research
Quarterly EBITDA margins
Source: Bloomberg consensus estimates, Spark Capital Research
Quarterly PAT growth
Source: Bloomberg consensus estimates, Spark Capital Research
Growth for Nifty constituents
Source: Bloomberg consensus estimates, Spark Capital Research
10%
1%
-30%
-20%
-10%
0%
10%
20%
30%
40%
Nifty PAT growth % Nifty ex Financial ex O&G PAT growth %
20.5%
20.3%
21.0%
20.7%
20.8%
20.4% 20.0%
19.1%
21.4%
19.5%
19.9%
21.8%
22.2%
20.7%
17.5%
18.0%
18.5%
19.0%
19.5%
20.0%
20.5%
21.0%
21.5%
22.0%
22.5%
Nifty ex Financial ex O&G EBITDA margins %
6%
13%
17%
13%
16%
9%
6%
1% 0%
4% 3%
8% 7%
4%
2%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
Nifty ex Financial ex O&G sales growth %
8%
10%
15%
3%
6% 6%
19% 18%
0%
5%
10%
15%
20%
25%
FY12 FY13 FY14 FY15 FY16 FY17E FY18E FY19E
Nifty earnings growth %
Nifty Index FY18E-19E PAT CAGR stands at 18% as per consensus
NIFTY50 Growth Ahead
Page 36
Chitra Katha Fundamentals Data
BSE 200- Employee cost in upward trend since FY12
Note: Universe excluding financials and O&G. Source: Bloomberg
BSE 200 - EBIT interest cover at its trough levels
Note: Universe excluding financials and O&G. Source: Bloomberg
BSE 200 - Inventory and Receivables as % of sales
Note: Universe excluding financials and O&G. Source: Bloomberg
BSE 200 - Capex to sales have been flat due to muted private capex cycle
Note: Universe excluding financials and O&G. Source: Bloomberg
EBIT interest cover at its lowest due to increased capital cost and muted earnings
9.0
10.4 10.3
11.1 11.0
11.7 12.0
11.8 11.6 11.5
12.2
13.0 13.3
12.9
7.0
8.0
9.0
10.0
11.0
12.0
13.0
14.0
FY
03
FY
04
FY
05
FY
06
FY
07
FY
08
FY
09
FY
10
FY
11
FY
12
FY
13
FY
14
FY
15
FY
16
3.8
5.2
8.4
9.8
8.6
6.3
5.3 5.5
6.5
5.5
4.4 4.0 3.8
3.4
2
3
4
5
6
7
8
9
10
FY
03
FY
04
FY
05
FY
06
FY
07
FY
08
FY
09
FY
10
FY
11
FY
12
FY
13
FY
14
FY
15
FY
16
13.4
13.0 12.0
13.0
14.0
15.0
16.0
17.0
18.0
FY
03
FY
04
FY
05
FY
06
FY
07
FY
08
FY
09
FY
10
FY
11
FY
12
FY
13
FY
14
FY
15
FY
16
Receivables as % of sales Inventory as % of sales
8.1 8.4 9.4 10.5
14.5
16.5
14.5 13.7
15.1
13.3 12.4
11.0
8.7 8.7
6
8
10
12
14
16
18
FY
03
FY
04
FY
05
FY
06
FY
07
FY
08
FY
09
FY
10
FY
11
FY
12
FY
13
FY
14
FY
15
FY
16
Page 37
Chitra Katha
Spark Disclaimer
Spark Capital Advisors (India) Private Limited (Spark Capital) and its affiliates are engaged in investment banking, investment advisory and institutional equities and
infrastructure advisory services. Spark Capital is registered with SEBI as a Stock Broker and Category 1 Merchant Banker.
We hereby declare that our activities were neither suspended nor we have defaulted with any stock exchange authority with whom we are registered in the last five years. We
have not been debarred from doing business by any Stock Exchange/SEBI or any other authorities, nor has our certificate of registration been cancelled by SEBI at any point of
time.
Spark Capital has a subsidiary Spark Investment Advisors (India) Private Limited which is engaged in the services of providing investment advisory services and is registered
with SEBI as Investment Advisor. Spark Capital has also an associate company Spark Infra Advisors (India) Private Limited which is engaged in providing infrastructure
advisory services.
This document does not constitute or form part of any offer or solicitation for the purchase or sale of any financial instrument or as an official confirmation of any transaction.
This document is provided for assistance only and is not intended to be and must not alone be taken as the basis for an investment decision. Nothing in this document should
be construed as investment or financial advice, and nothing in this document should be construed as an advice to buy or sell or solicitation to buy or sell the securities of
companies referred to in this document.
Each recipient of this document should make such investigations as it deems necessary to arrive at an independent evaluation of an investment in the securities of companies
referred to in this document (including the merits and risks involved), and should consult its own advisors to determine the merits and risks of such an investment. This
document is being supplied to you solely for your information and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or published,
copied, in whole or in part, for any purpose. This report is not directed or intended for distribution to or use by any person or entity who is a citizen or resident of or located in
any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which would subject Spark Capital
and/or its affiliates to any registration or licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in all jurisdictions or to
a certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such applicable restrictions. This
material should not be construed as an offer to sell or the solicitation of an offer to buy any security in any jurisdiction where such an offer or solicitation would be illegal.
Spark Capital makes no representation or warranty, express or implied, as to the accuracy, completeness or fairness of the information and opinions contained in this
document. Spark Capital , its affiliates, and the employees of Spark Capital and its affiliates may, from time to time, effect or have effected an own account transaction in, or
deal as principal or agent in or for the securities mentioned in this document. They may perform or seek to perform investment banking or other services for, or solicit
investment banking or other business from, any company referred to in this report.
This report has been prepared on the basis of information, which is already available in publicly accessible media or developed through an independent analysis by Spark
Capital. While we would endeavour to update the information herein on a reasonable basis, Spark Capital and its affiliates are under no obligation to update the information.
Also, there may be regulatory, compliance or other reasons that prevent Spark Capital and its affiliates from doing so. Neither Spark Capital nor its affiliates or their respective
directors, employees, agents or representatives shall be responsible or liable in any manner, directly or indirectly, for views or opinions expressed in this report or the contents
or any errors or discrepancies herein or for any decisions or actions taken in reliance on the report or the inability to use or access our service in this report or for any loss or
damages whether direct or indirect, incidental, special or consequential including without limitation loss of revenue or profits that may arise from or in connection with the use of
or reliance on this report.
Absolute
Rating
Interpretation
BUY Stock expected to provide positive returns of >15% over a 1-year horizon REDUCE Stock expected to provide returns of <5% – -10% over a 1-year
horizon
ADD Stock expected to provide positive returns of >5% – <15% over a 1-year
horizon SELL Stock expected to fall >10% over a 1-year horizon
Disclaimer
(1/2)
Page 38
Chitra Katha
Spark Capital and/or its affiliates and/or employees may have interests/positions, financial or otherwise in the securities mentioned in this report. To enhance transparency,
Spark Capital has incorporated a disclosure of interest statement in this document. This should however not be treated as endorsement of views expressed in this report:
Analyst Certification of Independence
The views expressed in this research report accurately reflect the analyst’s personal views about any and all of the subject securities or issuers; and no part of the research
analyst’s compensations was, is or will be, directly or indirectly, related to the specific recommendation or views expressed in the report.
Additional Disclaimer for US Institutional Investors
This research report prepared by Spark Capital Advisors (India) Private Limited is distributed in the United States to US Institutional Investors (as defined in Rule 15a-6 under
the Securities Exchange Act of 1934, as amended) only by Auerbach Grayson, LLC, a broker-dealer registered in the US (registered under Section 15 of Securities Exchange
Act of 1934, as amended). Auerbach Grayson accepts responsibility on the research reports and US Institutional Investors wishing to effect transaction in the securities
discussed in the research material may do so through Auerbach Grayson. All responsibility for the distribution of this report by Auerbach Grayson, LLC in the US shall be borne
by Auerbach Grayson, LLC. All resulting transactions by a US person or entity should be effected through a registered broker-dealer in the US. This report is not directed at you
if Spark Capital Advisors (India) Private Limited or Auerbach Grayson, LLC is prohibited or restricted by any legislation or regulation in any jurisdiction from making it available
to you. You should satisfy yourself before reading it that Auerbach Grayson, LLC and Spark Capital Advisors (India) Private Limited are permitted to provide research material
concerning investment to you under relevant legislation and regulations;
Disclosure of interest statement Yes/No
Analyst financial interest in the company No
Group/directors ownership of the subject company covered No
Investment banking relationship with the company covered No
Spark Capital’s ownership/any other financial interest in the company covered No
Associates of Spark Capital’s ownership more than 1% in the company covered No
Any other material conflict of interest at the time of publishing the research report No
Receipt of compensation by Spark Capital or its Associate Companies from the subject company covered for in the last twelve months:
Managing/co-managing public offering of securities
Investment banking/merchant banking/brokerage services
products or services other than those above
in connection with research report
No
Whether Research Analyst has served as an officer, director or employee of the subject company covered No
Whether the Research Analyst or Research Entity has been engaged in market making activity of the Subject Company; No
Disclaimer
(2/2)
Top Related