BEARS... · January 2019 . Highlights of December edition . A lacklustre and a volatile year for the Indian markets after a bumper CY17 . Technology, Private Financials and Consumer

January 2019

Highlights of December edition A lacklustre and a volatile year for the

Indian markets after a bumper CY17 Technology, Private Financials and

Consumer only positive performers Mid-caps underperform large-caps

FII first outflow in seven years

DII flows highest since CY08

BEST PERFORMERS MoM (%) WORST PERFORMERS MoM (%)

* Sectors in order of premium / discount to historical averages

*

Research & Quant Team ([email protected]); +91 22 6129 1575

NOTES: Prices as on 31 Dec’18

BULL icon: Sectors trading at a premium to historical averages

BEAR icon: Sectors trading at a discount to historical averages

Valuations are on 12-month forward basis unless otherwise mentioned

Sector valuations are based on MOSL coverage companies

Global equities data sourced from Bloomberg; Sensex valuations based on MOSL estimates

2

Contents Strategy: Nifty clocks modest gains in a volatile year; action in last quarter pulls up relative returns

Valuation deep-dive for the month: Private Banks

Indian equities: Nifty, sector performance and key valuation metrics

Global equities: Performance and valuation snapshot

Valuations: Nifty/Mid-cap companies

Sector highlights: Overview and sector valuations

AUTO

BANKS / FINANCIALS

CAPITAL GOODS

CEMENT

CONSUMER

HEALTHCARE

INFRASTRUCTURE

MEDIA

METALS

OIL & GAS

RETAIL

TECHNOLOGY

TELECOM

UTILITIES

BULLS & BEARS | January 2019

Investors are advised to refer to important disclosures made at the end of this report.

3

Strategy: Nifty clocks modest gains in a volatile year; action in last quarter pulls up relative returns Nifty clocks modest gains in a volatile year: Just when the Indian benchmark indices appeared on pace for one of the worst performances in many years, the

November-December run brought things on course to produce a respectable scorecard (Nifty up 3% for the year) – especially when compared to the US market which had a terrible year (-6% for CY18 and -9% in Dec’18). DII inflow was the strongest in nearly 10 years at USD15.9b, while FIIs recorded the first outflow (USD 4.6b) in seven years (for Dec’18, the FII/DII inflow trend was muted at USD0.3b/USD0.05b). Preference for large-caps in a volatile environment was clearly evident from Nifty’s outperformance v/s Mid-cap index by 19% and Small-Cap index by 32% in CY18. Nevertheless, after taking big hits through the year, Mid-caps saw some buying action in Dec’18, helping the Nifty Midcap100 (+2%) to outperform the benchmark Nifty (flat). Consequently, valuation premium of mid-caps v/s large-caps went up from 13% to 17%.

India among the leaders in CY18: For CY18, Brazil (+15%), India-Sensex (+6%) and Russia (+2%) were the key global markets to close higher in local currency terms. On the other hand, China (-25%), Korea (-17%), MSCI EM (-17%), the UK (-12%), Japan (-12%), Taiwan (-9), the US (-6%) and Indonesia (-3%) ended lower. Over the last 12 months, MSCI India (flat) has outperformed MSCI EM (-17%). Notably, over the last five years, MSCI India has outperformed MSCI EM by 172%. MSCI India P/E is at a premium of 89% to MSCI EM P/E, above its historical average premium of 46%.

Sectoral trends for 2018: Technology (+25%), Private Banks (+18%), Consumer (+11%) and NBFC (+10%) were the only sectors to deliver positive returns. Telecom (-38%), Real Estate (-31%), Media (-28%), Autos (-22%), Metals (-21%), Cement (-17%), Utilities (-16%) and Oil (-16%) were the laggards. Among the Nifty components, Bajaj Finance (+50%), Tech Mahindra (+43%), TCS (+40%), HUL (+33%) and Infosys (+27%) were the top performers. Tata Motors (-60%), Yes Bank (-42%), Bharti Airtel (-41%), HPCL (-39%) and Vedanta (-39%) were the top laggards. In this edition of ‘Bulls & Bears,’ we take a deep-dive into the valuation metrics of the Banking sector.

Macro backdrop favorable but caution signs exist too: The market put up a respectable performance in Dec’18 amid caution from several important events – state elections results (where BJP lost 0-3), resignation of the RBI governor, RBI monetary policy, US Fed policy and OPEC meet. We attribute the market calm to India’s favorable macro backdrop, with a sharp fall in crude oil prices, a stable currency and easing of the 10-year government bond yields. However, given the busy political calendar of 2019 and penchant of governments for farm loan waivers, one needs to watch out for the fiscal deficit. US-China trade war, execution of Brexit and Fed tightening (amid concerns about slowing US economic growth) will be the other key monitorables.

Watch out for the emerging themes: After tepid four years, earnings appear set for a recovery, especially led by Banking (with credit growth pick-up, return of pricing power, moderation in fresh slippages and lower credit costs). This should drive profit and RoE recovery for Corporate Banks. We also see incipient signs of private capex recovery and expect the trend to emerge further post elections. Consumption remains a structural theme – in an election year, we expect political spending to act as a quasi-stimulus for consumption-oriented sectors. The correction in Autos does present an opportunity to increase exposure from a medium- to long-term perspective, even as the short-term prospects remain slightly uncertain. Overall, while our preference still remains with large-caps (due to the sharp moderation in valuation premiums of mid-caps over the past year), we believe that enough bottom-up opportunities across sectors in mid-caps have now opened up. We remain underweight in Metals, Cement, Telecom and deep cyclicals like Construction at this stage of the economic cycle and await more evidence of a pick-up in the investment cycle.

Top ideas: Large-cap bets: ICICI Bank, L&T, Titan, Maruti, HUL, Infosys, HDFC and SBI. Mid-cap bets: LIC Housing Finance, Federal Bank, Mindtree, Cummins, Indian Hotels, Endurance, Team Lease and Marico.


4

Valuation deep-dive for the month: Private Banks Trend in Pvt Banks P/B – one-year forward

Private Banks prem/disc relative to Sensex P/B

Trend in PSU Banks P/B – one-year forward

Private banks gaining market share at accelerated pace: Owing to the capitalization and asset quality challenges faced by several PSBs, private banks have been able to gain market share at an unprecedented pace over the past few years. Private banks’ combined loan market share stands at 31% (v/s 20% in FY08) and deposits market share at 26% (v/s 18% in FY08).

Sector valuations: Historically, private banks (10-year average P/B multiple of 2.3x) have always traded at a premium to PSU banks (0.9x) due to their superior earnings profile, return ratios and consistent market share gains. Also, private banks’ P/B multiple is at a premium of 0.9x to Sensex P/B, while PSU banks are trading slightly below the long-term average. P/B multiples of private banks (long-term avg. of 2.7x) and Sensex (long-term avg. of 2.7x) have moved in tandem over the last decade, except in FY10, when the gap had widened due to the retail NPL cycle. On the other hand, P/B multiple for PSU banks has been significantly lower (long-term avg. of 1x). We expect this valuation gap to sustain going further due to (a) private bank loan CAGR of ~21% v/s ~13% for PSBs over FY18-20 and a similar trajectory in the return ratios, (b) consistent market share gains by PSBs both in advances and deposits, and (c) stable asset quality due to de-risking of book.

Multiples at corporate banks (ICICIB, AXSB) have been quite divergent across asset cycles, reflecting the earnings sensitivity of corporate banks to NPLs and provisioning. P/B multiples at ICICIB and AXSB have been suppressed (long-term avg. of 2x for AXSB and 1.7x for ICICIB) since FY15 (post RBI’s AQR) due to accelerated recognition and provisioning, resulting in muted return ratios. We expect the valuation multiple at corporate banks to re-rate as credit cost tapers off and the earnings profile improves.

In contrast, retail banks (like HDFCB, Kotak, RBL) have always traded at higher multiples than corporate banks. They are likely to sustain the same (long-term avg. P/B for Kotak/HDFCB at 2.8/3.4x) due to (a) superior margin/return profiles, (b) lower NPLs on B/S, and thus, lower credit cost, (c) differentiated product offering, which is ROA-accretive.


About the product As the tagline suggests, BULLS & BEARS is a handbook on valuations in India. Every month, it will cover: Valuations of Indian

markets vis-à-vis global markets

Current valuation of companies in various sectors

Sectors that are currently valued at premium/discount to their historical long-period averages

5

Key highlights Indian equities: CY18 – the bulls could never bear volatility, a tiring finish with modest gains

The Nifty bids adieu to a volatile CY18 with muted 3% gains to close at 10,863. However, India has held on well in the context of global markets in CY18.

The last month of year, provided some respite, with the Nifty closing flat amid a series of events that could have had serious market implications – state election results, RBI governor resignation, OPEC meet, RBI policy, and US Fed meet where rates were hiked.

Sector-wise, Technology (+25%), Private Banks (+18%), Consumer (+11%) and NBFC (+10%) were the only positive performers for CY18.

Telecom (-38%), Real Estate (-31%), Media (-28%), Autos (-22%), Metals (-21%), Cement (-17%) Utilities (-16%) and Oil (-16%) were the laggards in CY18.

Stock performance: Breadth negative in CY18; 29 Nifty stocks close lower Bajaj Finance (+50%), Tech Mahindra (+43%), TCS (+40%), HUL (+33%) and Infosys (+27%) were the top

performers. Tata Motors (-60%), Yes Bank (-42%), Bharti Airtel (-41%), HPCL (-39%) and Vedanta (-39%) were the top laggards.

Global equities: India among the leaders in CY18 For CY18, Brazil (+15%), India-Sensex (+6%) and Russia (+2%) were the key global markets to close higher in local

currency terms. On the other hand, China (-25%), Korea (-17%), MSCI EM (-17%), the UK (-12%), Japan (-12%), Taiwan (-9), the US (-6%) and Indonesia (-3%) ended lower.

Over the last 12 months, MSCI India (flat) has outperformed MSCI EM (-17%). Notably, over the last five years, MSCI India has outperformed MSCI EM by 172%. MSCI India P/E is at a premium of 89% to MSCI EM P/E, above its historical average premium of 46%.

Sector valuations: Premium for growth keeps expanding in a volatile market Technology trades at a P/E of 17.8x, at an 11% premium to its historical average of 16.1x. Concerns around trade

war with China, Brexit and a possibly slower US economy in 2019 have weighed on the P/E multiples of IT stocks. We believe companies might continue exhibiting YoY CC revenue growth in their 3Q results on the back of gradually improving demand and large deal orders, even in Digital. While BFSI continues showing an improvement, some pressures could be visible, especially in Europe amid uncertainties posed by Brexit.

Oil & Gas trades in line with historical averages – P/B of 1.5x (v/s 10-year average of 1.5x P/B) and P/E of 9.7x (v/s 10-year average of 11.1x). Brent crude oil prices trended downward in December due to increased production from the US, despite OPEC+ cut and slowdown in global economic growth. Poor demand for refined products is also reflected in the benchmark refining margins – at USD2-3/bbl for most of the days in December.


6

Indian equities: Markets face a rough ride in CY18 The Nifty bids adieu to a volatile CY18 with

muted 3% gains to close at 10,863. What is even more disappointing is that this almost fades the enthusiasm of a bumper CY17 (up 29%).

The last month of year, nevertheless, provided some respite, with the Nifty closing flat amid a series of events that could have had serious market implications – state election results, RBI governor resignation, OPEC meet, RBI policy, and US Fed meet where rates were hiked.

DIIs were big buyers in CY18 – USD15.9b v/s USD14b in CY17.

FIIs turned net sellers (USD4.6b) after six years in CY18.

Nifty YoY change (%) — CY18 returns weak after a bumper CY17


Institutional flows (INR b) — Domestic flows remain strong Nifty QoQ change (%)— loses strength toward year-end

-12.2

17.6

29.3

-0.5

24.5 20.0 16.2

3.3 2.9 7.7

-4.6

16.9

5.3

-4.7 5.9

-10.9 -13.0 -4.9

10.2 5.3

14.0 15.9

CY08 CY09 CY10 CY11 CY12 CY13 CY14 CY15 CY16 CY17 CY18

Net FII Flows (USD b) Net DII Flows (USD b)

69

36 37

13

-23

-1

20

-18

67

-15 -16

3

72

11

36 40 55

-52

76

18

-25

28

7

31

-4

3

29

3

CY91

CY92

CY93

CY94

CY95

CY96

CY97

CY98

CY99

CY00

CY01

CY02

CY03

CY04

CY05

CY06

CY07

CY08

CY09

CY10

CY11

CY12

CY13

CY14

CY15

CY16

CY17

CY18

4 years of negative return in 1990s cycle 2 year of negative return in 2000s cycle 2 year of negative return till now in 2011 cycle

10

6

14

5 4 3

-1

-5

0 -3

7

4

-5

12

4 3

8

-4

6

2

-1 De

c-13

Mar

-14

Jun-

14

Sep-

14

Dec-

14

Mar

-15

Jun-

15

Sep-

15

Dec-

15

Mar

-16

Jun-

16

Sep-

16

Dec-

16

Mar

-17

Jun-

17

Sep-

17

Dec-

17

Mar

-18

June

-18

Sep-

18

Dec-

18

QoQ Return (%)

7

Indian equities: Technology, Pvt Financials and Consumer only positive performers Technology (+25%), Private Banks (+18%), Consumer (+11%) and NBFCs (+10%) were the only positive performers for CY18. Private Banks and NBFCs gained in 7 out of the 12 months, while Technology and Consumer ended higher in 6 out of the 12 months. Midcaps underperformed the benchmark (Nifty) in CY18. Telecom (-38%), Real Estate (-31%), Media (-28%), Autos (-22%), Metals (-21%), Cement (-17%) Utilities (-16%) and Oil (-16%) were the top negative

performers in CY18 – these sectors exhibited downtrend in 7-8 out of the 12 months.

Sectoral performance – absolute and relative to Nifty (%): Technology, Private Financials and Consumer only positive performers in CY18


MoM Abs. Performance (%) CY18 MoM Relative Performance (%) CY18

Sector Jan-18

Feb-18

Mar-18

Apr-18

May-18

Jun-18

Jul-18

Aug-18

Sep-18

Oct-18

Nov-18 Dec-18 Chg (%) Jan-

18 Feb-18

Mar-18

Apr-18

May-18

Jun-18

Jul-18

Aug-18

Sep-18

Oct-18

Nov-18

Dec-18 Chg (%)

Technology 11 0 -3 12 -1 3 4 7 1 -7 -2 -1 25 7 4 0 6 -1 4 -2 4 7 -2 -6 -1 22

Banks-Pvt 9 -7 -3 5 8 -2 4 3 -6 -1 8 1 18 4 -2 0 -1 8 -2 -2 0 0 4 3 1 15

Consumer 0 -2 -2 10 0 -1 7 6 -10 -3 5 2 11 -5 3 2 4 0 0 1 3 -4 2 0 2 7

NBFC 7 -4 0 5 -5 1 6 -3 -11 4 9 3 10 3 0 4 -1 -5 1 0 -5 -5 8 4 3 7

Cap. Goods 6 -6 -3 6 -4 -7 5 4 -10 2 7 1 -2 2 -1 0 0 -4 -7 -1 1 -4 7 2 1 -5

Banks-PSU 0 -17 2 0 4 -6 15 4 -18 9 1 6 -6 -5 -12 5 -7 4 -6 9 1 -12 14 -3 7 -9

Healthcare -2 -3 -7 8 -8 8 1 12 -6 -2 -3 -3 -6 -6 2 -3 1 -8 8 -5 9 1 3 -7 -3 -9

Nifty Midcap -2 -5 -5 8 -7 -4 4 6 -14 0 2 2 -15 -6 -1 -1 2 -7 -4 -2 3 -7 5 -3 2 -19

Oil 1 -5 -6 -1 0 -5 10 0 -1 -11 0 4 -16 -4 0 -2 -7 0 -5 4 -2 5 -6 -5 4 -19

Utilities -3 -4 -4 5 -5 -9 1 8 -10 1 -2 5 -16 -7 1 -1 -1 -5 -8 -5 6 -3 6 -7 5 -19

Cement -1 -4 -7 5 -10 0 8 6 -8 -14 10 0 -17 -5 1 -4 -2 -10 0 2 3 -1 -9 5 0 -21

Metal 3 -2 -12 7 -5 -4 -3 9 -4 -6 -6 0 -21 -1 3 -9 1 -5 -4 -9 6 2 -1 -10 0 -24

Auto -3 -4 -3 7 -5 -3 3 1 -13 -7 5 0 -22 -8 1 0 1 -5 -2 -3 -2 -7 -2 0 0 -25

Media 2 -7 -2 3 -2 -8 -3 -3 -15 3 2 -1 -28 -3 -2 1 -4 -2 -8 -9 -6 -8 8 -3 0 -31

Real Estate 0 -5 -10 9 -8 -7 1 2 -20 -1 7 0 -31 -5 -1 -6 3 -8 -7 -5 -1 -14 4 2 0 -34

Telecom -17 -1 -8 0 -8 0 1 -2 -4 -11 4 1 -38 -21 4 -4 -6 -8 0 -5 -5 2 -6 -1 1 -41

Nifty-50 5 -5 -4 6 0 0 6 3 -6 -5 5 0 3

8

Indian equities: Breadth negative in CY18; 29 Nifty stocks close lower Nifty – best and worst performers in CY18: Bajaj Finance (+50%), Tech Mahindra (+43%), TCS (+40%), HUL (+33%) and Infosys (+27%) were the top

performers. Tata Motors (-60%), Yes Bank (-42%), Bharti Airtel (-41%), HPCL (-39%), and Vedanta (-39%) were the worst performers. Nifty – best and worst performers in December: Indiabulls Housing (+19%), BPCL (+12%), Power Grid (+10%), HPCL (+9%) and Bajaj Finserv (+8%) were

the top performers on MoM basis. Sun Pharma (-13%), HCL Tech (-5%), Grasim Inds (-4%), Reliance Industries (-4%) and TCS (-4%) were the top laggards. Best and worst Nifty performers (YoY) in CY18 (%) – 21 Nifty companies traded higher


Best and worst Nifty performers (MoM) in Dec’18 (%) – breadth healthy, 58% of Nifty stocks traded higher

50 43 40 33 27 24 24 22 19 15 15 14 14 13 10 9 8 8 7 7 5 3

-1 -1 -3 -3 -4 -4 -7 -8 -14 -16 -17 -18 -18 -18 -23 -23 -24 -25 -25 -29 -29 -29 -30 -31 -39 -39 -41 -42 -60

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19 12 10 9 8 7 7 6 6 5 4 4 4 3 3 2 2 2 2 2 2 1 1 1 0 0 0 0 0

0 0 0 -1 -1 -1 -1 -1 -1 -2 -2 -2 -3 -3 -3 -4 -4 -4 -4 -4 -5 -13

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9

Indian equities: Mid-caps underperform large-caps in CY18 In CY18, mid-caps corrected by 15%, as against the Nifty’s rise of 3%. However, over the last five years, mid-caps have outperformed by 49%. In December, Nifty Midcap100 was up 2%, as against the Nifty’s flat performance. Mid-caps still trade at a 17% premium to the Nifty in terms of P/E.

12-month forward P/E (x) Mid-caps trading at 17% premium to Nifty

Source: MOSL, Bloomberg for Midcap valuation.

Mid-caps underperformed large-caps in the last 12 months Mid-caps outperformed large-caps in last five years


172

221

50

110

170

230

290

Dec-

13

Apr-

14

Aug-

14

Dec-

14

Apr-

15

Aug-

15

Dec-

15

Apr-

16

Aug-

16

Dec-

16

Apr-

17

Aug-

17

Dec-

17

Apr-

18

Aug-

18

Dec-

18

Nifty Rebased Nifty Midcap 100 Rebased

5 Year CAGR | Nifty: 11.5% | Midcap: 17.2%

20.6

17.5

10

16

22

28

34

Dec-

13

Apr-

14

Aug-

14

Dec-

14

Apr-

15

Aug-

15

Dec-

15

Apr-

16

Aug-

16

Dec-

16

Apr-

17

Aug-

17

Dec-

17

Apr-

18

Aug-

18

Dec-

18Midcap PE (x) Nifty PE (x)

Nifty Avg: 19.5x Midcap Avg: 20.7x

17

-35

-5

25

55

85

Dec-

13

Apr-

14

Aug-

14

Dec-

14

Apr-

15

Aug-

15

Dec-

15

Apr-

16

Aug-

16

Dec-

16

Apr-

17

Aug-

17

Dec-

17

Apr-

18

Aug-

18

Dec-

18

Midcap Vs Nifty PE Prem/(Disc) (%)

Average: 6%

103

85

70

82

94

106

118

Dec-

17

Jan-

18

Feb-

18

Mar

-18

Apr-

18

May

-18

Jun-

18

Jul-1

8

Aug-

18

Sep-

18

Oct

-18

Nov

-18

Dec-

18

Nifty Rebased Nifty Midcap 100 Rebased

10

Indian equities: Valuations above long-period averages Valuations of Indian equities are above their long-period averages. The Sensex trades at a 12-month forward P/E of 18.3x, at a 3% premium to its

long-period average of 17.8x. Sensex P/B of 2.7x is near its historical average of 2.6x. At the current trailing P/E of 23.5x and forward P/E of 18.3x, we see limited triggers for further re-rating, unless accompanied by a material surprise

in earnings.

12-month forward Sensex P/E (x) 12-month forward Sensex P/B (x)

Trailing Sensex P/E (x) Trailing Sensex P/B (x)


10.7

23.2

18.3

9

13

17

21

25

Dec-

08

Dec-

09

Dec-

10

Dec-

11

Dec-

12

Dec-

13

Dec-

14

Dec-

15

Dec-

16

Dec-

17

Dec-

18

10 Year Avg: 17.8x

1.6

3.2

2.7

1.5

2.0

2.5

3.0

3.5

Dec-

08

Dec-

09

Dec-

10

Dec-

11

Dec-

12

Dec-

13

Dec-

14

Dec-

15

Dec-

16

Dec-

17

Dec-

18

10 Year Avg: 2.6x

10.8

23.5

10

15

20

25

30

Dec-

08

Dec-

09

Dec-

10

Dec-

11

Dec-

12

Dec-

13

Dec-

14

Dec-

15

Dec-

16

Dec-

17

Dec-

18

10 Year Avg: 19.2x

1.8

3.0

1.5

2.1

2.7

3.3

3.9

Dec-

08

Dec-

09

Dec-

10

Dec-

11

Dec-

12

Dec-

13

Dec-

14

Dec-

15

Dec-

16

Dec-

17

Dec-

18

10 Year Avg: 2.8x

11

Indian equities: Market-cap-to-GDP at its historical average

12-month forward Sensex RoE (%)

Trend in India’s market-cap-to-GDP (%) – at its long-period averages

Trend in Sensex RoE (%)

Sensex trades at a 12-month-forward RoE of 15.5%, above its long-term average.

Market-cap-to-GDP ratio is at 78% (FY19E GDP), at its long-term average.

21.7

18.5

15.3 16.9 16.5 16.0 15.4 14.9 14.3

13.2 12.2 12.8

FY08

FY09

FY10

FY11

FY12

FY13

FY14

FY15

FY16

FY17

FY18

FY19

E

Average of 16%

103

55

95 88

71 64 66

81

69

80 85

78

FY08

FY09

FY10

FY11

FY12

FY13

FY14

FY15

FY16

FY17

FY18

FY19

E

Average of 78% for the period


16.5

12.5

15.5

12.0

13.8

15.5

17.3

19.0

Dec-

08

Dec-

09

Dec-

10

Dec-

11

Dec-

12

Dec-

13

Dec-

14

Dec-

15

Dec-

16

Dec-

17

Dec-

18

10 Year Avg: 15.1%

CY18 Chg (%) PE (x) Prem / Disc to India PE (%) PB (x) RoE (%)

Index Value

Mkt Cap (USD T)

Local Currency In USD CY17 /

FY18 CY18 / FY19 CY17 /

FY18 CY18 / FY19 CY17 /

FY18 CY18 / FY19 CY17 /

FY18 CY18 / FY19

India 36,068 2.1 6 -3 26.2 22.7 3.2 2.9 12.2 12.9

Indonesia 6,194 0.5 -3 -9 21.8 16.5 -17 -27 2.4 2.4 11.6 17.1

US 2,507 26.9 -6 -6 20.4 15.4 -22 -32 3.1 2.9 13.7 19.0

Japan 20,015 5.4 -12 -10 14.7 14.5 -44 -36 1.6 1.5 11.2 10.4

Brazil 87,887 0.9 15 -2 22.6 13.3 -14 -42 2.0 1.8 8.9 15.1

Taiwan 9,727 1.1 -9 -11 13.8 12.7 -47 -44 1.6 1.6 11.4 13.9

UK 6,728 3.1 -12 -18 16.8 11.9 -36 -48 1.5 1.6 17.2 11.1

MSCI EM 966 12.4 -17 -17 12.7 11.3 -52 -50 1.4 1.5 11.8 12.7

China 2,494 5.4 -25 -29 12.3 10.3 -53 -55 1.3 1.1 10.8 12.2

Korea 2,041 1.4 -17 -21 10.6 8.7 -59 -62 0.9 0.9 9.7 9.8

Russia 4,187 0.5 2 -16 6.3 4.4 -76 -81 0.6 0.6 10.5 11.8

12

Global equities: India among positive-performing markets in CY18

India (Sensex) v/s other markets

For CY18, Brazil (+15%), India-Sensex (+6%) and Russia (+2%) were the key global markets to close higher in local currency terms. On the other hand, China (-25%), Korea (-17%), MSCI EM (-17%), the UK (-12%), Japan (-12%), Taiwan (-9), the US (-6%) and Indonesia (-3%) ended lower.

Indian equities are trading at 22.7x FY19E earnings. All key markets continue trading at a discount to India. However, India’s RoE remains superior to most EMs, an important differentiator for valuation premium.

Source: Bloomberg/MOSL


15

6

2

-3

-6

-9

-12

-12

-17

-17

-25

Brazil

India

Russia

Indonesia

US

Taiwan

Japan

UK

MSCI EM

Korea

China

CY18 Chg (%)

13

Global equities: MSCI India outperforms MSCI EM over last 12 months Over the last 12 months, MSCI India (flat) has outperformed MSCI EM (-17%). Notably, over the last five years, MSCI India has outperformed MSCI

EM by 172%. MSCI India P/E is at a premium of 89% to MSCI EM P/E, above its historical average premium of 46%.

MSCI India outperformed MSCI EM by 172% over last five years MSCI EM v/s MSCI India performance over 12 months

Source: Bloomberg

MSCI India v/s MSCI EM trailing P/E (x) MSCI India v/s MSCI EM P/E premium (%)


100

83 80

89

98

107

116

Dec-

17

Jan-

18

Feb-

18

Mar

-18

Apr-

18

May

-18

Jun-

18

Jul-1

8

Aug-

18

Sep-

18

Oct

-18

Nov

-18

Dec-

18

MSCI India Rebased MSCI EM Rebased

342

170

30

120

210

300

390

Dec-

08Ju

n-09

Dec-

09Ju

n-10

Dec-

10Ju

n-11

Dec-

11Ju

n-12

Dec-

12Ju

n-13

Dec-

13Ju

n-14

Dec-

14Ju

n-15

Dec-

15Ju

n-16

Dec-

16Ju

n-17

Dec-

17Ju

n-18

Dec-

18

MSCI India Rebased MSCI EM Rebased

10 Year CAGR: MSCI India: 13.1% MSCI EM: 5.5%

5 Year CAGR: MSCI India: 9.1% MSCI EM: -0.7%

21.9

11.6

5.0

12.0

19.0

26.0

33.0

Dec-

08Ju

n-09

Dec-

09Ju

n-10

Dec-

10Ju

n-11

Dec-

11Ju

n-12

Dec-

12Ju

n-13

Dec-

13Ju

n-14

Dec-

14Ju

n-15

Dec-

15Ju

n-16

Dec-

16Ju

n-17

Dec-

17Ju

n-18

Dec-

18MSCI India PE (x) MSCI EM PE (x)

MSCI India Avg: 19.7x

MSCI EM Avg: 13.6x

89

0

25

50

75

100

Dec-

08Ju

n-09

Dec-

09Ju

n-10

Dec-

10Ju

n-11

Dec-

11Ju

n-12

Dec-

12Ju

n-13

Dec-

13Ju

n-14

Dec-

14Ju

n-15

Dec-

15Ju

n-16

Dec-

16Ju

n-17

Dec-

17Ju

n-18

Dec-

18

MSCI India Vs EM PE Premium (%)

Average of 46%

14

Global equities: India’s share in world market above historical average India’s share in world market cap is at 3%, above its historical average of 2.5%. Over the last 12 months, the world market cap has decreased by 14.3% (USD11.6t), while India’s market cap is down 13%.

Trend in India's contribution to world market cap (%)

Source: Bloomberg

Market cap change in last 12 months (%)

Global market-cap-to-GDP (%)


3.3

1.6

3.0

1.5

2.0

2.5

3.0

3.5

Dec-

08Ju

n-09

Nov

-09

Apr-

10Se

p-10

Mar

-11

Aug-

11Ja

n-12

Jun-

12N

ov-1

2Ap

r-13

Oct

-13

Mar

-14

Aug-

14Ja

n-15

Jun-

15De

c-15

May

-16

Oct

-16

Mar

-17

Aug-

17Ja

n-18

Jul-1

8De

c-18

India's Contribution to World Mcap (%)

Average of 2.5%

139 117 111

90 80

48 44 42 35

US

UK

Japa

n

Kore

a

Indi

a

Indo

nesia

Chin

a

Braz

il

Russ

iaCurrent mkt cap to GDP (%)

* Based on GDP for Dec 2017 -30

-20

-19

-15

-13

-12

-9

-7

-6

-4

5.4

1.4

3.1

5.4

2.1

1.1

26.9

0.5

0.5

0.9

China

Korea

UK

Japan

India

Taiwan

US

Russia

Indonesia

Brazil

Mkt cap chg 12M (%) Curr Mcap (USD Tr)

15

Nifty: Oil & Gas – Crude oil prices on downtrend Oil & Gas trades in line with historical averages – P/B of 1.5x (v/s 10-year average of 1.5x P/B) and P/E of 9.7x (v/s 10-year average of 11.1x). Brent crude oil prices trended downward in December due to increased production from the US, despite OPEC+ cut and slowdown in global economic growth. Poor demand of refined products is also reflected in benchmark refining margins – at USD2-3/bbl for most of the days in December.

Snapshot: Nifty companies’ valuations


PE (x) Relative to Sensex P/E (%) PB (x) Relative to Sensex P/B (%) Name Sector Current 10 Yr Avg Prem/Disc (%) Current 10 Yr Avg Current 10 Yr Avg Prem/Disc (%) Current 10 Yr Avg Bajaj Auto Auto 14.9 15.4 -4 -19 -13 3.4 5.2 -35 26 98 Eicher Motors Auto 21.6 21.8 -1 18 23 5.9 5.9 0 120 126 Hero MotoCorp Auto 15.9 17.1 -7 -13 -4 4.5 7.1 -36 69 172 Mahindra & Mahindra Auto 15.3 15.9 -4 -16 -11 2.6 3.0 -14 -4 14 Maruti Suzuki Auto 23.5 19.1 23 28 7 4.5 3.2 39 68 24 Tata Motors Auto 9.7 14.1 -32 -47 -21 0.6 1.9 -70 -79 -27 Axis Bank Banks - Private 18.8 29.0 -35 3 63 2.1 2.0 8 -20 -24 HDFC Bank Banks - Private 23.1 20.4 14 26 14 3.5 3.4 5 32 30 ICICI Bank Banks - Private 21.4 17.5 22 17 -2 2.0 1.7 19 -24 -34 IndusInd Bank Banks - Private 17.6 17.2 3 -4 -4 3.0 2.6 15 14 2 Kotak Mahindra Bank Banks - Private 28.7 22.2 30 57 24 3.7 2.8 33 40 8 Yes Bank Banks - Private 7.7 11.6 -33 -58 -35 1.3 2.1 -39 -53 -19 State Bank Banks - PSU 11.8 14.8 -20 -36 -17 1.1 1.2 -9 -58 -53 Bajaj Finance Banks - NBFC 34.2 15.4 121 87 -13 6.9 2.8 144 160 9 HDFC Banks - NBFC 40.8 28.6 42 123 61 4.4 4.5 -4 64 74 Indiabulls Housing Banks - NBFC 7.7 9.5 -19 -58 -47 2.0 2.3 -16 -27 -10 Larsen & Toubro Capital Goods 20.2 22.9 -12 10 28 2.7 3.0 -12 0 17 Grasim Inds Cement 9.9 10.3 -4 -46 -42 0.8 1.0 -17 -68 -61 Ultratech Cement Cement 39.3 27.1 45 115 52 3.4 3.0 10 26 17 Asian Paints Consumer 52.6 36.1 46 188 103 14.3 10.6 35 434 308 Hind. Unilever Consumer 54.6 36.0 52 198 102 53.2 30.3 75 1892 1067 ITC Consumer 26.1 26.1 0 43 46 6.5 7.2 -10 143 177

16

Nifty: Private Banks – Expect moderation in slippages and credit cost across banks Companies trading at a significant premium to their historical averages: HUL (+52%), Titan Inds (+47%), Asian Paints (+46%), Ultratech Cement

(+45%) and Maruti Suzuki (+23%). Companies trading at a significant discount to their historical averages: HPCL (-67%), ONGC (-55%), Tata Steel (-49%), Coal India (-43%) and Sun

Pharma (-37%).


PE (x) Relative to Sensex P/E (%) PB (x) Relative to Sensex P/B

(%)

Name Sector Current 10 Yr Avg Prem/ Disc (%) Current 10 Yr Avg Current 10 Yr Avg Prem/

Disc (%) Current 10 Yr Avg

Cipla Healthcare 21.1 27.4 -23 15 54 2.5 3.4 -27 -8 31 Dr Reddy’ s Labs Healthcare 21.9 26.0 -15 20 46 2.9 3.9 -26 7 49 Sun Pharma Healthcare 18.3 28.9 -37 0 62 2.4 4.7 -50 -12 82 Zee Ent. Media 25.2 26.1 -3 38 46 4.6 5.4 -15 73 109 Hindalco Metals 8.2 9.7 -15 -55 -46 1.1 1.3 -17 -60 -50 JSW Steel Metals 10.3 12.5 -18 -44 -30 2.0 1.3 50 -25 -49 Tata Steel Metals 7.2 14.2 -49 -61 -20 0.9 1.7 -49 -67 -35 Vedanta Metals 8.6 10.2 -16 -53 -43 8.6 5.2 65 220 99 BPCL Oil & Gas 8.9 10.0 -12 -52 -44 1.6 1.6 1 -39 -38 GAIL Oil & Gas 11.0 13.2 -17 -40 -26 1.7 1.7 -4 -38 -33 H P C L Oil & Gas 5.8 17.7 -67 -68 -1 1.2 1.2 1 -55 -54 IOCL Oil & Gas 8.3 8.6 -3 -55 -52 1.1 1.1 0 -60 -60 ONGC Oil & Gas 4.6 10.2 -55 -75 -43 0.8 1.5 -48 -71 -43 Reliance Inds. Oil & Gas 13.8 12.5 11 -25 -30 1.8 1.5 22 -31 -42 Titan Inds. Retail 49.8 33.9 47 172 90 14.6 9.4 55 446 263 HCL Technologies Technology 12.3 13.2 -7 -33 -26 2.7 3.1 -11 2 18 Infosys Technology 16.0 16.9 -6 -13 -5 4.2 4.0 6 59 54 TCS Technology 20.4 17.9 14 12 1 8.2 6.1 34 206 134 Tech Mahindra Technology 13.7 12.4 11 -25 -30 2.8 2.6 5 3 1 Wipro Technology 14.9 14.7 1 -19 -18 2.4 2.8 -14 -9 9 Bharti Airtel Telecom NA 33.7 - - 89 2.6 2.5 3 -2 -2 Bharti Infratel Telecom 23.3 25.5 -9 27 43 3.2 3.4 -8 18 31 Coal India Utilities 8.1 14.2 -43 -56 -20 6.5 6.5 1 144 148 NTPC Utilities 9.7 14.5 -33 -47 -18 1.1 1.6 -35 -60 -37 Power Grid Corp. Utilities 10.1 13.1 -23 -45 -26 1.5 1.9 -17 -42 -29 UPL Others 15.3 12.6 21 -16 -29 3.0 2.6 16 13 0 Sensex 18.3 17.8 3 2.7 2.6 3

PE (x) Relative to Sensex P/E (%) PB (x) Relative to

Sensex P/B (%) Price Chg (%)

Company Current 10 Yr Avg Prem/ Disc (%) Current 10 Yr Avg Current 10 Yr Avg Prem/

Disc (%) Current 10 Yr Avg MoM CY18

GE T&D India 28.3 64.0 -56 55 259 5.1 6.9 -26 91 164 27 -33 Jyothy Lab. 33.4 34.2 -2 82 92 6.1 4.3 42 127 64 15 11 PVR 34.8 39.1 -11 90 119 4.9 3.2 50 82 24 11 13 Kaveri Seed 15.2 13.8 10 -17 -23 3.2 3.2 -1 19 24 10 5 DCB Bank 14.9 16.1 -8 -19 -9 1.6 1.4 15 -39 -46 8 -14 Engineers India 16.7 18.8 -11 -9 6 3.1 3.9 -19 18 49 7 -37 Delta Corp 28.1 33.5 -16 53 88 3.5 2.4 44 31 -7 6 -18 CEAT 16.5 10.7 54 -10 -40 1.7 1.2 44 -35 -54 3 -33 Trident 7.4 9.0 -18 -60 -50 1.0 0.9 6 -63 -65 3 -26 India Cements 24.1 34.2 -30 32 92 0.6 0.7 -23 -79 -72 3 -47 Ajanta Pharma 21.3 14.8 43 16 -17 3.8 4.1 -6 44 58 2 -20 Ent.Network 34.6 38.4 -10 89 116 3.0 3.0 -2 11 16 2 -17 Sanghi Inds. 14.1 15.6 -10 -23 -12 0.9 0.9 1 -68 -67 1 -57 Sadbhav Engg. 13.3 24.4 -46 -27 37 1.6 2.6 -40 -41 1 1 -50 Team Lease Serv. 31.7 30.2 5 73 70 7.1 5.5 29 164 110 1 17 Shilpa Medicare 16.0 22.1 -28 -13 24 2.2 2.7 -19 -16 6 1 -38 Ipca Labs. 20.8 24.6 -15 14 38 3.1 3.1 0 15 18 1 34 Rain Industries 5.3 3.9 35 -71 -78 1.0 0.8 33 -63 -71 0 -64 MCX 27.9 36.1 -23 52 103 2.4 3.8 -36 -10 45 0 -19 Tata Elxsi 19.8 19.4 2 8 9 4.9 5.4 -9 84 109 0 5 Alembic Pharma 20.6 16.8 22 13 -5 3.8 4.4 -13 44 70 -3 13 Aegis Logistics 22.5 20.3 11 23 14 4.4 3.1 43 64 18 -3 -29 Birla Corpn. 12.9 15.9 -19 -30 -11 1.0 1.1 -12 -63 -57 -3 -48 Strides Pharma 23.6 60.1 -61 29 237 1.6 3.2 -52 -41 24 -5 -42 SRF 14.8 9.7 52 -19 -45 2.6 1.5 71 -4 -43 -8 1 Phoenix Mills 25.9 32.3 -20 42 81 2.4 2.1 12 -11 -18 -8 -9 Blue Star 27.2 28.1 -3 48 57 6.0 7.7 -23 123 197 -8 -24

Mid-caps outperform Nifty by 2% in December

17

Nifty Midcap100 was up by 2% in Dec’18, as against the Nifty’s flat performance. Best mid-cap performers in December: GE T&D (+27%), Jyothy Labs (+15%), PVR (+11%), Kaveri Seed (+10%) and DCB Bank (+8%).


18

Sector valuations: Premium for growth keeps expanding in a volatile market Technology trades at a P/E of 17.8x, at an 11% premium to its historical average of 16.1x. Concerns around trade war with China, Brexit and a

possibly slower US economy in 2019 have weighed on the P/E multiples of IT stocks. We believe companies might continue exhibiting YoY CC revenue growth in their 3Q results on the back of gradually improving demand and large deal orders, even in Digital. While BFSI continues showing an improvement, some pressures could be visible, especially in Europe amid uncertainties posed by Brexit.

Oil & Gas trades in line with historical averages – P/B of 1.5x (v/s 10-year average of 1.5x P/B) and P/E of 9.7x (v/s 10-year average of 11.1x). Brent crude oil prices trended downward in December due to increased production from the US, despite OPEC+ cut and slowdown in global economic growth. Poor demand for refined products is also reflected in the benchmark refining margins – at USD2-3/bbl for most of the days in December.

Consumer sector’s P/E of 40.9x (slightly down from 41.5x in Nov’18) is at a premium of 27% to its 10-year average P/E of 32.2x. Even on a P/B basis, the sector trades at 12.9x, at a premium of 29% to its 10-year average multiple of 10x. Consumer’s P/E relative to Sensex P/E has gone up to 124% in Dec’18 (from 121% in Nov’18).

Snapshot: Sector valuations


Sector PE (x) Relative to

Sensex P/E (%) PB (x) Relative to Sensex P/B (%)

Current 10 Yr Avg Prem/Disc (%) Current 10 Yr Avg Current 10 Yr Avg Prem/Disc (%) Current 10 Yr Avg Auto 18.0 15.9 13.2 -1 -13 2.7 3.1 -11.1 3 18 Banks - Private 20.1 17.6 14.5 10 -3 2.7 2.3 17.8 1 -12 Banks - PSU 11.6 31.0 -62.6 -37 44 0.8 0.9 -10.3 -69 -64 NBFC 22.4 18.5 21.4 23 3 3.3 2.9 12.6 23 12 Capital Goods 23.3 26.3 -11.4 27 45 2.8 3.4 -17.7 4 30 Cement 22.3 20.8 7.4 22 13 2.3 2.7 -14.2 -15 2 Consumer 40.9 32.2 26.9 124 81 12.9 10.0 28.6 382 289 Healthcare 20.9 23.7 -12.0 14 32 3.0 3.9 -22.9 13 51 Infrastructure 11.0 13.9 -20.9 -40 -23 1.3 1.8 -28.4 -51 -31 Media 19.7 22.6 -13.1 7 27 3.7 4.3 -14.8 38 66 Metals 9.1 11.9 -23.8 -50 -33 1.1 1.3 -15.3 -57 -48 Oil & Gas 9.7 11.1 -12.0 -47 -36 1.5 1.5 -4.9 -45 -41 Retail 50.9 39.7 28.2 178 118 14.5 10.4 40.0 444 299 Technology 17.8 16.1 10.8 -3 -9 4.8 4.2 16.6 81 60 Telecom Loss - - 1.9 2.3 -18.7 -30 -10 Utilities 9.6 14.0 -32.0 -48 -18 1.1 1.5 -28.4 -59 -41

-1.5-13.0

-50

-20

10

40

Dec-

08

Oct

-09

Aug-

10

Jun-

11

Apr-

12

Feb-

13

Dec-

13

Oct

-14

Aug-

15

Jun-

16

Apr-

17

Feb-

18

Dec-

18

Auto Relative to Sensex PE (%)

18.015.9

3

10

17

24

31

Dec-

08

Oct

-09

Aug-

10

Jun-

11

Apr-

12

Feb-

13

Dec-

13

Oct

-14

Aug-

15

Jun-

16

Apr-

17

Feb-

18

Dec-

18

Auto P/E (x) 10 Yr Avg (x)

2.73.1

1

2

3

4

5

Dec-

08

Oct

-09

Aug-

10

Jun-

11

Apr-

12

Feb-

13

Dec-

13

Oct

-14

Aug-

15

Jun-

16

Apr-

17

Feb-

18

Dec-

18

Auto P/B (x) 10 Yr Avg (x)

2.9

18.4

-20

10

40

70

Dec-

08

Oct

-09

Aug-

10

Jun-

11

Apr-

12

Feb-

13

Dec-

13

Oct

-14

Aug-

15

Jun-

16

Apr-

17

Feb-

18

Dec-

18

Auto Relative to Sensex PB (%)

19

Autos: Retail demand remains weak, inventory levels higher Auto sector is trading at a P/E of 18.0x, at a 13%

premium to its historical average of 15.9x. Retail demand for PVs has recovered partially in Dec-

18, led by a fall in fuel prices, attractive year-end discounts and new products. PV wholesales declined 1% for MSIL, but were flat for TTMT and MM.

In 2Ws, sentiment remains weak in both urban and rural markets, resulting in slower inventory correction.

Retail demand for CVs remains weak in Dec-18, led by deferral in purchase due to constraints in vehicle financing and an increase in axle load capacity. M&HCV wholesales declined 29%/18% for AL/TTMT.

Sector Performance MoM: 0%


PE (x) Relative to Sensex P/E (%) PB (x) Relative to Sensex P/B (%) Company Current 10 Yr Avg Prem/Disc (%) Current 10 Yr Avg Current 10 Yr Avg Prem/Disc (%) Current 10 Yr Avg Amara Raja Batt. 21.1 18.2 16 15 2 3.4 3.7 -8 27 42 Ashok Leyland 13.2 16.8 -22 -28 -6 3.3 2.8 15 22 9 Bajaj Auto 14.9 15.4 -4 -19 -13 3.4 5.2 -35 26 98 Bharat Forge 17.9 26.2 -32 -2 47 3.8 4.1 -7 42 58 Bosch 30.3 31.3 -3 66 75 5.0 5.2 -3 89 99 CEAT 16.5 10.7 54 -10 -40 1.7 1.2 44 -35 -54 Eicher Motors 21.6 21.8 -1 18 23 5.9 5.9 0 120 126 Escorts 12.5 9.9 26 -31 -44 2.2 1.1 100 -19 -59 Exide Inds. 23.8 21.2 12 30 19 3.5 3.2 9 30 23 Hero Motocorp 15.9 17.1 -7 -13 -4 4.5 7.1 -36 69 172 M & M 15.3 15.9 -4 -16 -11 2.6 3.0 -14 -4 14 Mahindra CIE 16.1 31.5 -49 -12 77 2.1 2.9 -29 -23 12 Maruti Suzuki 23.5 19.1 23 28 7 4.5 3.2 39 68 24 Motherson Sumi 21.0 23.7 -11 15 33 4.4 4.9 -11 64 89 Tata Motors 9.7 14.1 -32 -47 -21 0.6 1.9 -70 -79 -27 TVS Motor Co. 27.2 18.6 46 49 4 6.8 4.1 64 154 59

20.117.6

5

12

19

26

33

Dec-

08

Oct

-09

Aug-

10

Jun-

11

Apr-

12

Feb-

13

Dec-

13

Oct

-14

Aug-

15

Jun-

16

Apr-

17

Feb-

18

Dec-

18

Private Banks P/E (x) 10 Yr Avg (x)

9.9-3.0

-40

-20

0

20

40

Dec-

08

Oct

-09

Aug-

10

Jun-

11

Apr-

12

Feb-

13

Dec-

13

Oct

-14

Aug-

15

Jun-

16

Apr-

17

Feb-

18

Dec-

18

Private Banks Relative to Sensex PE (%)

2.7

2.3

1

2

3

4

Dec-

08

Oct

-09

Aug-

10

Jun-

11

Apr-

12

Feb-

13

Dec-

13

Oct

-14

Aug-

15

Jun-

16

Apr-

17

Feb-

18

Dec-

18

Private Banks P/B (x) 10 Yr Avg (x)

0.9 -12.4

-50

-30

-10

10

Dec-

08

Oct

-09

Aug-

10

Jun-

11

Apr-

12

Feb-

13

Dec-

13

Oct

-14

Aug-

15

Jun-

16

Apr-

17

Feb-

18

Dec-

18

Private Banks Relative to Sensex PB (%)

20

Private Banks: Expect moderation in slippages and credit cost across banks Private banks are trading at 2.7x, an 18% premium to its

historical P/B average of 2.3x. Systemic credit growth came in at 14.7% (as of 7 Dec’18), led

by healthy traction in retail loans across private banks. Deposit growth has picked up to 9% from a low of 6.2% in FY18. Although deposit growth has picked up in the last six quarters, it has been lagging loan growth, as the effect of demonetization has waned. System LD ratio stood at 77.4% (75% in FY18).

Key factors to watch out for in the current quarter: (a) treasury gains due to moderation in bond yields, (b) any moratorium given by RBI for classification of IL&FS as an NPA account would be a huge relief , (c) impact of recently announced farm loan waivers and transient impact of the same, (d) impact on margins from a rise in cost of funds; banks with higher CASA ratio should benefit, ( e) banks with a higher exposure to NBFCs, real estate and LAP will be under pressure due to concerns around valuation of the collateral and the NBFCs’ situation. Sector Performance

MoM: 1%


PE (x) Relative to Sensex P/E (%) PB (x) Relative to Sensex P/B (%) Company Current 10 Yr Avg Prem/Disc (%) Current 10 Yr Avg Current 10 Yr Avg Prem/Disc (%) Current 10 Yr Avg Axis Bank 18.8 29.0 -35 3 63 2.1 2.0 8 -20 -24 DCB Bank 14.9 16.1 -8 -19 -9 1.6 1.4 15 -39 -46 Federal Bank 11.8 12.0 -2 -36 -33 1.3 1.2 9 -52 -55 HDFC Bank 23.1 20.4 14 26 14 3.5 3.4 5 32 30 ICICI Bank 21.4 17.5 22 17 -2 2.0 1.7 19 -24 -34 IndusInd Bank 17.6 17.2 3 -4 -4 3.0 2.6 15 14 2 Kotak Mah. Bank 28.7 22.2 30 57 24 3.7 2.8 33 40 8 South Ind.Bank 6.3 8.1 -22 -65 -55 0.5 0.9 -40 -81 -67 Yes Bank 7.7 11.6 -33 -58 -35 1.3 2.1 -39 -53 -19

0.8

0.9

0

1

1

2

Dec-

08

Oct

-09

Aug-

10

Jun-

11

Apr-

12

Feb-

13

Dec-

13

Oct

-14

Aug-

15

Jun-

16

Apr-

17

Feb-

18

Dec-

18

PSU Banks P/B (x) 10 Yr Avg (x)

-68.7-64.2

-80

-70

-60

-50

-40

Dec-

08

Oct

-09

Aug-

10

Jun-

11

Apr-

12

Feb-

13

Dec-

13

Oct

-14

Aug-

15

Jun-

16

Apr-

17

Feb-

18

Dec-

18

PSU Banks Relative to Sensex PB (%)

21

PSU Banks: Operating performance getting better; will be further supported by treasury gains PSU Banks now trade at a P/B of 0.8x, at a 10% discount to

its historical average of 0.9x. Incremental NPL formation has moderated and credit

costs have declined significantly. We expect slippages/credit costs to moderate over 2HFY19, also partially aided by recoveries from NCLT-related accounts. Further, the impact of the recently announced farm loan waiver and the transient impact of the same would be a key monitorable.

We expect loan growth to accelerate at a few PSU banks due to portfolio buyouts from NBFCs. Capital infusion in some PSU banks under our coverage will be a positive. Any development on the merger of BoB, Dena and Vijaya will be a key monitorable.

Resolution of stressed power assets remain an overhang after the SC passed a stay order asking banks not to initiate insolvency proceedings. We expect the provisioning pressure to moderate in the coming quarters as most PSU banks are well provided on the IBC assets.



PE (x) Relative to Sensex P/E (%) PB (x) Relative to Sensex P/B (%)

Company Current 10 Yr Avg Prem/Disc (%) Current 10 Yr Avg Current 10 Yr Avg Prem/Disc (%) Current 10 Yr Avg

Bank of Baroda 8.3 8.9 -6 -55 -50 0.7 1.0 -33 -75 -61

Bank of India NA 7.9 - -56 0.5 0.8 -33 -80 -69

Canara Bank 7.2 6.5 11 -60 -63 0.6 0.7 -22 -78 -72

Indian Bank 7.0 7.1 -1 -62 -60 0.6 0.7 -14 -77 -72

Punjab Natl.Bank NA 7.4 - -59 0.6 1.0 -36 -76 -62

St Bk of India 11.8 14.8 -20 -36 -17 1.1 1.2 -9 -58 -53

Union Bank (I) NA 7.7 - -57 0.4 0.8 -52 -86 -70

22.418.5

5

11

17

23

29

Dec-

08

Oct

-09

Aug-

10

Jun-

11

Apr-

12

Feb-

13

Dec-

13

Oct

-14

Aug-

15

Jun-

16

Apr-

17

Feb-

18

Dec-

18

NBFC P/E (x) 10 Yr Avg (x)

22.6

2.7

-40

-20

0

20

40

Dec-

08

Oct

-09

Aug-

10

Jun-

11

Apr-

12

Feb-

13

Dec-

13

Oct

-14

Aug-

15

Jun-

16

Apr-

17

Feb-

18

Dec-

18

NBFC Relative to Sensex PE (%)

3.3

2.9

1

2

3

4

Dec-

08

Oct

-09

Aug-

10

Jun-

11

Apr-

12

Feb-

13

Dec-

13

Oct

-14

Aug-

15

Jun-

16

Apr-

17

Feb-

18

Dec-

18

NBFC P/B (x) 10 Yr Avg (x)

23.112.3

-15

0

15

30

45

Dec-

08

Oct

-09

Aug-

10

Jun-

11

Apr-

12

Feb-

13

Dec-

13

Oct

-14

Aug-

15

Jun-

16

Apr-

17

Feb-

18

Dec-

18

NBFC Relative to Sensex PB (%)

22

NBFCs: CP market volumes robust, NCD market still picking up NBFCs trade at a P/B of 3.3x, above the historical average

(13% premium). Over the past three months, CP market volumes have

revived. Almost all players are getting money from CPs at reasonable rates. For top-quality players, CP rates have declined ~100bp over the past 1-2 months and are now below pre-crisis levels.

However, the NCD market has not fully opened up to all players. Only the large players with good parentage have been able to access this market. For example, around two-thirds of total NCDs raised by HFCs in the past three months was by HDFC alone. Smaller players are finding it difficult to raise adequate money from the NCD market.

We expect the recent decline in G-Sec yields to be a positive for NBFCs, especially the HFC sector. For large HFCs, NCDs contribute 40-70% of total borrowings. Generally, NCD rates move in line with G-Sec yields.



PE (x) Relative to Sensex P/E (%) PB (x) Relative to Sensex P/B (%) Company Current 10 Yr Avg Prem/Disc (%) Current 10 Yr Avg Current 10 Yr Avg Prem/Disc (%) Current 10 Yr Avg Bajaj Finance 34.2 15.4 121 87 -13 6.9 2.8 144 160 9 Capital First 11.1 21.2 -47 -39 19 1.7 1.7 2 -35 -34 Chola. Invst. & Fin. 14.8 14.2 4 -19 -21 2.8 2.0 37 4 -22 Dewan Housing 4.1 7.4 -45 -78 -58 0.7 1.1 -37 -73 -57 GRUH Finance 47.6 26.1 82 160 47 11.9 7.3 63 346 180 H D F C 40.8 28.6 42 123 61 4.4 4.5 -4 64 74 Indiabulls Housing 7.7 9.5 -19 -58 -47 2.0 2.3 -16 -27 -10 L&T Fin.Holdings 11.8 15.9 -26 -35 -11 2.0 1.9 5 -24 -26 LIC Housing Fin. 9.3 11.3 -18 -49 -36 1.4 1.9 -27 -49 -28 M & M Financial 18.6 16.6 12 1 -7 2.5 2.2 15 -5 -15 Muthoot Finance 9.4 8.0 17 -49 -55 2.0 1.6 28 -25 -40 PNB Housing 12.5 21.2 -41 -32 19 1.9 2.9 -34 -28 13 Shri.City Union. 10.4 13.9 -25 -43 -22 1.5 2.0 -25 -43 -21 Shriram Trans. 10.1 12.9 -22 -45 -27 1.6 2.0 -20 -40 -23

23.3

26.3

7

27

47

67

Dec-

08

Oct

-09

Aug-

10

Jun-

11

Apr-

12

Feb-

13

Dec-

13

Oct

-14

Aug-

15

Jun-

16

Apr-

17

Feb-

18

Dec-

18

Capital Goods P/E (x) 10 Yr Avg (x)

27.344.6

-10

40

90

140

190

Dec-

08

Oct

-09

Aug-

10

Jun-

11

Apr-

12

Feb-

13

Dec-

13

Oct

-14

Aug-

15

Jun-

16

Apr-

17

Feb-

18

Dec-

18

Capital Goods Relative to Sensex PE (%)

2.8

3.4

1

4

6

9

Dec-

08

Oct

-09

Aug-

10

Jun-

11

Apr-

12

Feb-

13

Dec-

13

Oct

-14

Aug-

15

Jun-

16

Apr-

17

Feb-

18

Dec-

18

Capital Goods P/B (x) 10 Yr Avg (x)

4.529.8

-50

15

80

145

210

Dec-

08

Oct

-09

Aug-

10

Jun-

11

Apr-

12

Feb-

13

Dec-

13

Oct

-14

Aug-

15

Jun-

16

Apr-

17

Feb-

18

Dec-

18

Capital Goods Relative to Sensex PB (%)

23

Capital Goods: Private sector capex showing early signs of green shoots Capital Goods sector trades at a one-year forward P/E

multiple of 23.3x, at a discount of 11% to its 10-year average P/E of 26.3x.

Even on a P/B basis, the sector trades at a discount of 18% to its 10-year average multiple of 3.4x.

Valuation premium relative to the Sensex on a P/B basis has declined to 4% v/s 10-year average of 30%. On a P/E multiple basis, the premium has narrowed to 27% from the 10-year average of 45%.

Recent results from the sector show strong pick-up in domestic execution. Valuation multiples have remained below the long-term average for some time, given the absence of a broad-based recovery in the capex cycle. Government capex is expected to remain muted in 2HFY19 given impending general elections in CY19. Certain pockets in the private sector have started to show early signs of green shoots. Sectors like cement , steel and oil & Gas sector have started to see capex announcement from corporates. Sector Performance

MoM: 1%


PE (x) Relative to Sensex P/E (%) PB (x) Relative to Sensex P/B (%) Company Current 10 Yr Avg Prem/Disc (%) Current 10 Yr Avg Current 10 Yr Avg Prem/Disc (%) Current 10 Yr Avg A B B 43.2 64.5 -33 136 262 6.4 6.7 -4 141 159 B H E L 19.3 24.5 -21 6 37 0.8 2.4 -67 -70 -7 Blue Star 27.2 28.1 -3 48 57 6.0 7.7 -23 123 197 Cummins India 27.0 24.9 8 47 40 5.1 5.6 -9 92 117 Engineers India 16.7 18.8 -11 -9 6 3.1 3.9 -19 18 49 GE T&D India 28.3 64.0 -56 55 259 5.1 6.9 -26 91 164 Havells India 44.9 24.6 83 146 38 9.3 5.7 62 248 121 K E C Intl. 12.5 15.1 -17 -32 -15 2.7 2.1 27 2 -18 Larsen & Toubro 20.2 22.9 -12 10 28 2.7 3.0 -12 0 17 Siemens 37.4 48.1 -22 104 170 4.2 6.0 -30 58 133 Solar Inds. 31.7 21.4 48 73 20 6.6 4.3 53 148 67 Thermax 31.2 29.4 6 71 65 3.9 4.1 -5 47 58 Voltas 29.1 21.3 37 59 20 3.9 3.2 23 46 23

22.320.8

3

13

23

33

43

Dec-

08

Oct

-09

Aug-

10

Jun-

11

Apr-

12

Feb-

13

Dec-

13

Oct

-14

Aug-

15

Jun-

16

Apr-

17

Feb-

18

Dec-

18

Cement P/E (x) 10 Yr Avg (x)

21.913.4

-75

-30

15

60

105

150

Dec-

08

Oct

-09

Aug-

10

Jun-

11

Apr-

12

Feb-

13

Dec-

13

Oct

-14

Aug-

15

Jun-

16

Apr-

17

Feb-

18

Dec-

18

Cement Relative to Sensex PE (%)

2.32.7

1

1

2

3

4

5

Dec-

08

Oct

-09

Aug-

10

Jun-

11

Apr-

12

Feb-

13

Dec-

13

Oct

-14

Aug-

15

Jun-

16

Apr-

17

Feb-

18

Dec-

18

Cement P/B (x) 10 Yr Avg (x)

-14.62.5

-50

-30

-10

10

30

Dec-

08

Oct

-09

Aug-

10

Jun-

11

Apr-

12

Feb-

13

Dec-

13

Oct

-14

Aug-

15

Jun-

16

Apr-

17

Feb-

18

Dec-

18

Cement Relative to Sensex PB (%)

8.4

9.3

2

6

10

14

18

Dec-

08

Oct

-09

Aug-

10

Jun-

11

Apr-

12

Feb-

13

Dec-

13

Oct

-14

Aug-

15

Jun-

16

Apr-

17

Feb-

18

Dec-

18

Cement EV/EBDITA (x) 10 Yr Avg (x)

24

Cement: Prices continue declining, costs moderate Cement trades at EV/EBITDA of 8.4x, at a 10% discount to

its historical average. All-India cement prices continued to decline in December.

Prices have remained stable in north and central after the price hike in November. However, prices have declined by INR5-10/bag in west, south and east. ACC and Ambuja are refraining from increasing prices as it is their book closing quarter.

Cost pressure subsided in the month, as RIL reduced petcoke prices by INR800/t to INR8,550/t on in Dec’18 . Prices of imported coal (in INR) too reduced by 2% MoM. Diesel prices reduced by 9%MoM. We expect the recent correction in diesel prices to bode well in terms of freight cost for companies. However, power & fuel cost is likely to improve only in 4QFY19 due to high-cost fuel inventories.




Sensex P/B (%) EV/EBIDTA (x)

Company Current 10 Yr Avg Prem/ Disc (%) Current 10 Yr Avg Current 10 Yr Avg Prem/

Disc (%) Current 10 Yr Avg Current 10 Yr Avg Prem/ Disc (%)

ACC 19.9 25.5 -22 9 43 2.7 2.9 -8 -1 11 9.1 13.2 -31 Ambuja Cem. 30.4 27.7 10 66 56 2.1 2.6 -19 -21 1 17.2 14.9 15 Birla Corpn. 12.9 15.9 -19 -30 -11 1.0 1.1 -12 -63 -57 7.8 7.5 4 Grasim Inds 9.9 10.3 -4 -46 -42 0.8 1.0 -17 -68 -61 1.7 4.0 -57 India Cements 24.1 34.2 -30 32 92 0.6 0.7 -23 -79 -72 9.0 8.2 10 Sanghi Inds. 14.1 15.6 -10 -23 -12 0.9 0.9 1 -68 -67 10.9 8.9 22 Shree Cement 38.0 26.4 44 108 48 5.6 4.2 34 110 61 15.8 12.4 28 UltraTech Cem. 39.3 27.1 45 115 52 3.4 3.0 10 26 17 16.0 13.0 23

40.9

32.2

15

25

35

45

55

Dec-

08

Oct

-09

Aug-

10

Jun-

11

Apr-

12

Feb-

13

Dec-

13

Oct

-14

Aug-

15

Jun-

16

Apr-

17

Feb-

18

Dec-

18

Consumer P/E (x) 10 Yr Avg (x)

123.7

81.0

-10

30

70

110

150

Dec-

08

Oct

-09

Aug-

10

Jun-

11

Apr-

12

Feb-

13

Dec-

13

Oct

-14

Aug-

15

Jun-

16

Apr-

17

Feb-

18

Dec-

18

Consumer Relative to Sensex PE (%)

12.9

10.0

5

8

10

13

15

Dec-

08

Oct

-09

Aug-

10

Jun-

11

Apr-

12

Feb-

13

Dec-

13

Oct

-14

Aug-

15

Jun-

16

Apr-

17

Feb-

18

Dec-

18

Consumer P/B (x) 10 Yr Avg (x)

382.1

288.6

80

180

280

380

480

Dec-

08

Oct

-09

Aug-

10

Jun-

11

Apr-

12

Feb-

13

Dec-

13

Oct

-14

Aug-

15

Jun-

16

Apr-

17

Feb-

18

Dec-

18

Consumer Relative to Sensex PB (%)

25

Consumer: Valuations not relenting Consumer sector P/E of 40.9x (slightly down from 41.5x in

Nov’18) is at a premium of 27% to its 10-year average of 32.2x. Even on a P/B basis, the sector trades at 12.9x, a premium of 29% to its 10-year average multiple of 10x.

Consumer P/E relative to Sensex P/E has gone up to 124% in Dec’18 (from 121% in Nov’18).

In 2QFY19, most of our coverage companies called out that (a) rural growth outpaced urban growth for the fifth consecutive quarter, (b) trade channels have completely normalized in 2QFY19 and are back on track and (c) launch pipeline remains strong compared to the preceding two years.

Demand revival also means higher ability to pass ongoing material cost increases. Thus, while ad spends may rise on new launches, high margins can be sustained due to operating leverage.



PE (x) Relative to Sensex P/E (%) PB (x) Relative to Sensex P/B (%) Company Current 10 Yr Avg Prem/Disc (%) Current 10 Yr Avg Current 10 Yr Avg Prem/Disc (%) Current 10 Yr Avg Asian Paints 52.6 36.1 46 188 103 14.3 10.6 35 434 308 Britannia Inds. 53.3 31.7 68 192 78 18.5 12.2 52 593 368 Colgate-Palm. 45.2 34.2 32 147 92 22.7 24.1 -6 750 828 Dabur India 47.0 31.6 49 157 77 10.8 9.5 14 303 265 Emami 28.3 29.6 -5 55 66 8.3 10.0 -17 211 284 GlaxoSmith C H L 34.2 28.8 19 87 62 8.2 7.7 6 206 198 Godrej Consumer 46.8 32.9 42 156 85 11.2 7.4 52 320 184 Hind. Unilever 54.6 36.0 52 198 102 53.2 30.3 75 1892 1067 ITC 26.1 26.1 0 43 46 6.5 7.2 -10 143 177 Jyothy Lab. 33.4 34.2 -2 82 92 6.1 4.3 42 127 64 Marico 44.3 32.0 38 142 80 15.6 10.0 55 483 287 Nestle India 56.2 41.6 35 207 133 27.8 23.0 21 943 784 P & G Hygiene 54.1 40.9 32 196 129 26.5 15.0 76 893 478 Page Industries 56.2 38.1 48 207 114 25.3 17.3 46 847 566 Pidilite Inds. 51.8 30.3 71 183 70 13.2 7.7 70 394 198 United Breweries 55.0 66.6 -17 201 274 10.0 8.6 16 274 231 United Spirits 45.2 92.6 -51 147 420 12.1 11.2 8 353 331

20.923.7

12

18

24

30

36

Dec-

08

Oct

-09

Aug-

10

Jun-

11

Apr-

12

Feb-

13

Dec-

13

Oct

-14

Aug-

15

Jun-

16

Apr-

17

Feb-

18

Dec-

18

Healthcare P/E (x) 10 Yr Avg (x)

14.232.3

-30

0

30

60

90

Dec-

08

Oct

-09

Aug-

10

Jun-

11

Apr-

12

Feb-

13

Dec-

13

Oct

-14

Aug-

15

Jun-

16

Apr-

17

Feb-

18

Dec-

18

Healthcare Relative to Sensex PE (%)

3.0

3.9

2

4

5

7

Dec-

08

Oct

-09

Aug-

10

Jun-

11

Apr-

12

Feb-

13

Dec-

13

Oct

-14

Aug-

15

Jun-

16

Apr-

17

Feb-

18

Dec-

18

Healthcare P/B (x) 10 Yr Avg (x)

12.7

50.8

-20

20

60

100

140

Dec-

08

Oct

-09

Aug-

10

Jun-

11

Apr-

12

Feb-

13

Dec-

13

Oct

-14

Aug-

15

Jun-

16

Apr-

17

Feb-

18

Dec-

18

Healthcare Relative to Sensex PB (%)

26

Healthcare: P/E now below 10-year average The downtrend in the healthcare index since Sep-Oct 2018

continued into December as well, albeit at a lower rate than the previous months. The index has depreciated by ~3% over the past month.

In terms of valuation, it now trades at a discount to its 10-year average.

Although the pace of approvals has been healthy for companies focusing on US generics, increased competition and consolidated buyers have kept prices under check, providing limited business opportunity. Confidence is yet to build on the regulatory front.

Overall growth in domestic formulation has been decent on a low base of past year and price hikes. Volume growth has been on a downtrend, impacting overall growth.

Although the INR depreciated v/s USD on a YoY basis, it remained flat MoM in December, giving up gains since Sep’18.

A recovery in US generics business, lower regulatory risk and pick-up in volume growth could drive a turnaround in P/E.

Sector Performance MoM: -3%


PE (x) Relative to Sensex P/E (%) PB (x) Relative to Sensex P/B (%) Company Current 10 Yr Avg Prem/Disc (%) Current 10 Yr Avg Current 10 Yr Avg Prem/Disc (%) Current 10 Yr Avg Aurobindo Pharma 13.2 13.3 -1 -28 -25 2.6 2.8 -6 -3 7 Ajanta Pharma 21.3 14.8 43 16 -17 3.8 4.1 -6 44 58 Biocon 34.4 24.7 39 88 39 5.9 3.0 95 120 16 Cadila Health. 19.2 21.2 -10 5 19 3.2 4.9 -35 21 89 Cipla 21.1 27.4 -23 15 54 2.5 3.4 -27 -8 31 Divi's Lab. 26.6 21.2 25 45 19 5.0 4.7 7 88 81 Dr Reddy's Labs 21.9 26.0 -15 20 46 2.9 3.9 -26 7 49 Fortis Health. 35.7 43.7 -18 95 145 1.5 1.6 -5 -43 -39 Glaxosmit Pharma 51.5 47.1 9 181 164 11.2 10.2 10 320 294 Glenmark Pharma. 20.0 23.1 -14 9 30 2.8 4.1 -30 6 56 Granules India 10.0 10.9 -8 -45 -39 1.5 1.6 -9 -44 -37 Ipca Labs. 20.8 24.6 -15 14 38 3.1 3.1 0 15 18 Jubilant Life 10.6 12.9 -18 -42 -27 1.9 1.6 22 -27 -38 Lupin 21.0 23.9 -12 15 34 2.5 4.5 -45 -7 74 Sanofi India 33.6 28.2 19 84 58 6.0 4.5 32 125 75 Sun Pharma.Inds. 18.3 28.9 -37 0 62 2.4 4.7 -50 -12 82 Strides Shasun 23.6 60.1 -61 29 237 1.6 3.2 -52 -41 24 Shilpa Medicare 16.0 22.1 -28 -13 24 2.2 2.7 -19 -16 6 Torrent Pharma. 29.2 18.0 62 59 1 5.0 4.2 20 88 61

11.0

13.9

0

8

16

24

32

Dec-

08

Oct

-09

Aug-

10

Jun-

11

Apr-

12

Feb-

13

Dec-

13

Oct

-14

Aug-

15

Jun-

16

Apr-

17

Feb-

18

Dec-

18

Infrastructure P/E (x) 10 Yr Avg (x)

-39.8

-23.1

-100

-60

-20

20

60

Dec-

08

Oct

-09

Aug-

10

Jun-

11

Apr-

12

Feb-

13

Dec-

13

Oct

-14

Aug-

15

Jun-

16

Apr-

17

Feb-

18

Dec-

18

Infrastructure Relative to Sensex PE (%)

1.31.8

0

1

2

4

Dec-

08

Oct

-09

Aug-

10

Jun-

11

Apr-

12

Feb-

13

Dec-

13

Oct

-14

Aug-

15

Jun-

16

Apr-

17

Feb-

18

Dec-

18

Infrastructure P/B (x) 10 Yr Avg (x)

-51.4

-31.1

-100

-75

-50

-25

0

Dec-

08

Oct

-09

Aug-

10

Jun-

11

Apr-

12

Feb-

13

Dec-

13

Oct

-14

Aug-

15

Jun-

16

Apr-

17

Feb-

18

Dec-

18

Infrastructure Relative to Sensex PB (%)

27

Infrastructure: Financial closure concerns receding, focus shifts to execution Infrastructure sector trades at a P/B of 1.3x, at a 28%

discount to the historical average. Multiple discount v/s historical average, despite peak

ordering in FY18, indicates concerns about timely completion of the projects awarded.

Financial closure for newly awarded HAM projects has seen delays, given liquidity constraints and aversion of banks to lend to infrastructure projects. However, majority of the HAM projects have now seen financial sanction from the banks, and thus, the focus now shifts toward procuring the appointed date from the NHAI.

NHAI’s awarding stands muted in YTDFY19; the expectation is that 4QFY19 should see awarding activity picking up as was the case last year.

IRB Infra and Sadbhav trade at a discount to historical P/B, while Ashoka and KNR trade at a premium.




Ashoka Buildcon NA 19.2 - - 8 7.3 4.7 56 175 81

IRB Infra.Devl. 7.7 11.6 -34 -58 -35 0.8 1.8 -55 -70 -32

KNR Construct. 13.2 8.0 65 -28 -55 2.0 1.3 47 -26 -48

Sadbhav Engg. 13.3 24.4 -46 -27 37 1.6 2.6 -40 -41 1

19.7

22.6

7

19

31

43

Dec-

08

Oct

-09

Aug-

10

Jun-

11

Apr-

12

Feb-

13

Dec-

13

Oct

-14

Aug-

15

Jun-

16

Apr-

17

Feb-

18

Dec-

18

Media P/E (x) 10 Yr Avg (x)

7.5

26.6

-50

0

50

100

Dec-

08

Oct

-09

Aug-

10

Jun-

11

Apr-

12

Feb-

13

Dec-

13

Oct

-14

Aug-

15

Jun-

16

Apr-

17

Feb-

18

Dec-

18

Media Relative to Sensex PE (%)

3.74.3

1

2

4

5

6

Dec-

08

Oct

-09

Aug-

10

Jun-

11

Apr-

12

Feb-

13

Dec-

13

Oct

-14

Aug-

15

Jun-

16

Apr-

17

Feb-

18

Dec-

18

Media P/B (x) 10 Yr Avg (x)

37.8

66.2

-30

10

50

90

130

Dec-

08

Oct

-09

Aug-

10

Jun-

11

Apr-

12

Feb-

13

Dec-

13

Oct

-14

Aug-

15

Jun-

16

Apr-

17

Feb-

18

Dec-

18

Media Relative to Sensex PB (%)

28

Media: No respite to valuations Media sector P/E of 19.7x continues to trade at a

discount of ~13.0% to its 10-year historical average of 22.6x.

Both ZEE and SUN TV’s valuations remained under check due to concerns that the implementation of TRAI’s tariff order (from Dec 29th 2018) could cause temporary disruption in broadcasters’ viewership share.

Increase in newsprint prices appeared to be

subsiding. Despite this, valuations for print companies remained depressed, as margins are yet to recover.





Ent.Network 34.6 38.4 -10 89 116 3.0 3.0 -2 11 16

H T Media 4.4 13.2 -67 -76 -26 0.3 1.4 -77 -88 -46

Jagran Prakashan 9.2 15.0 -38 -49 -16 1.6 3.3 -52 -40 27

PVR 34.8 39.1 -11 90 119 4.9 3.2 50 82 24

Sun TV Network 15.1 19.8 -24 -17 11 4.4 5.1 -13 65 96

Zee Entertainmen 25.2 26.1 -3 38 46 4.6 5.4 -15 73 109

9.1

11.9

5

10

15

20

25

Dec-

08

Oct

-09

Aug-

10

Jun-

11

Apr-

12

Feb-

13

Dec-

13

Oct

-14

Aug-

15

Jun-

16

Apr-

17

Feb-

18

Dec-

18

Metals P/E (x) 10 Yr Avg (x)

-50.5

-33.1

-65

-45

-25

-5

15

Dec-

08

Oct

-09

Aug-

10

Jun-

11

Apr-

12

Feb-

13

Dec-

13

Oct

-14

Aug-

15

Jun-

16

Apr-

17

Feb-

18

Dec-

18

Metals Relative to Sensex PE (%)

1.1

1.3

0

1

2

3

4

Dec-

08

Oct

-09

Aug-

10

Jun-

11

Apr-

12

Feb-

13

Dec-

13

Oct

-14

Aug-

15

Jun-

16

Apr-

17

Feb-

18

Dec-

18

Metals P/B (x) 10 Yr Avg (x)

-57.2

-48.4

-80

-55

-30

-5

20

Dec-

08

Oct

-09

Aug-

10

Jun-

11

Apr-

12

Feb-

13

Dec-

13

Oct

-14

Aug-

15

Jun-

16

Apr-

17

Feb-

18

Dec-

18

Metals Relative to Sensex PB (%)

5.9

7.0

3

5

8

10

Dec-

08

Oct

-09

Aug-

10

Jun-

11

Apr-

12

Feb-

13

Dec-

13

Oct

-14

Aug-

15

Jun-

16

Apr-

17

Feb-

18

Dec-

18

Metals EV/EBDITA (x) 10 Yr Avg (x)

29

Metals: Global steel prices stable Metals trade at 1.1x, near its historical average P/B

of 1.3x. EV/EBITDA is at 5.9x, a 16% discount to historical average.

Global steel prices were stable after correction in November, with Chinese winter cuts reducing supply. Domestic steel prices remain weak amid weaker exports and rising imports.

Base metals were steady. Aluminum was marginally weak due to relief to Rusal by the US.

We remain positive on JSW Steel, as it benefits from higher steel spreads. Hindalco is well placed to benefit from higher aluminum prices and low-cost captive raw material.




Sensex P/B (%) EV/EBIDTA (x)

Company Current 10 Yr Avg

Prem/ Disc (%) Current 10 Yr

Avg Current 10 Yr Avg

Prem/ Disc (%) Current 10 Yr Avg Current 10 Yr Avg Prem/

Disc (%) Hind.Zinc 10.9 9.3 18 -40 -48 10.9 4.9 124 308 87 6.5 5.4 20

Hindalco Inds. 8.2 9.7 -15 -55 -46 1.1 1.3 -17 -60 -50 4.6 5.5 -17

Jindal Steel NA 15.9 -11 0.5 1.6 -68 -81 -37 6.4 10.6 -40

JSW Steel 10.3 12.5 -18 -44 -30 2.0 1.3 50 -25 -49 7.3 7.5 -4

Nalco 8.1 15.9 -49 -56 -11 1.1 1.3 -10 -57 -51 3.6 8.0 -55

NMDC 9.1 12.9 -29 -50 -27 1.2 3.0 -61 -57 14 5.0 8.3 -40

Rain Inds. 5.3 3.9 35 -71 -78 1.0 0.8 33 -63 -71 2.0 1.4 41

S A I L NA 14.6 -18 0.6 1.0 -44 -79 -61 8.8 13.9 -37

Tata Steel 7.2 14.2 -49 -61 -20 0.9 1.7 -49 -67 -35 6.2 7.6 -18

Vedanta 8.6 10.2 -16 -53 -43 8.6 5.2 65 220 99 4.8 4.2 15

9.711.1

6

9

12

15

18

Dec-

08

Oct

-09

Aug-

10

Jun-

11

Apr-

12

Feb-

13

Dec-

13

Oct

-14

Aug-

15

Jun-

16

Apr-

17

Feb-

18

Dec-

18

Oil & Gas P/E (x) 10 Yr Avg (x)

-46.8-36.2

-72

-57

-42

-27

-12

Dec-

08

Oct

-09

Aug-

10

Jun-

11

Apr-

12

Feb-

13

Dec-

13

Oct

-14

Aug-

15

Jun-

16

Apr-

17

Feb-

18

Dec-

18

Oil & Gas Relative to Sensex PE (%)

1.5

1.5

1

1

2

2

3

Dec-

08

Oct

-09

Aug-

10

Jun-

11

Apr-

12

Feb-

13

Dec-

13

Oct

-14

Aug-

15

Jun-

16

Apr-

17

Feb-

18

Dec-

18

Oil & Gas P/B (x) 10 Yr Avg (x)

-45.3-40.6

-75

-50

-25

0

Dec-

08

Oct

-09

Aug-

10

Jun-

11

Apr-

12

Feb-

13

Dec-

13

Oct

-14

Aug-

15

Jun-

16

Apr-

17

Feb-

18

Dec-

18

Oil & Gas Relative to Sensex PB (%)

30

Oil & Gas: Crude oil prices on a downtrend Oil & Gas trades in line with historical averages – P/B of 1.5x

(v/s 10-year average of 1.5x P/B) and P/E of 9.7x (v/s 10-year average of 11.1x).

Brent crude oil prices have been trending downward in December due to increased production from the US, despite OPEC+ cut and slowdown in global economic growth.

Poor demand for refined products is also reflected in benchmark refining margins – at USD2-3/bbl for most of the days in December.

Despite a decline in oil prices and expansion in marketing margins, OMCs have not shined due to concerns about oil prices, increased inventory losses and regulatory response in a period of elections.

Despite muted oil prices, ONGC has not been doing good due to concerns about its oil production.

Due to a sharp decline in oil prices and non-commensurate fall in LNG prices, we expect pressure on GAIL’s petrochemical profitability. Sector Performance

MoM: 4%


PE (x) Relative to Sensex P/E (%) PB (x) Relative to Sensex P/B (%) Company Current 10 Yr Avg Prem/Disc (%) Current 10 Yr Avg Current 10 Yr Avg Prem/Disc (%) Current 10 Yr Avg Aegis Logistics 22.5 20.3 11 23 14 4.4 3.1 43 64 18 B P C L 8.9 10.0 -12 -52 -44 1.6 1.6 1 -39 -38 GAIL (India) 11.0 13.2 -17 -40 -26 1.7 1.7 -4 -38 -33 Guj.St.Petronet 11.4 11.2 2 -38 -37 1.5 1.8 -12 -43 -33 H P C L 5.8 17.7 -67 -68 -1 1.2 1.2 1 -55 -54 I O C L 8.3 8.6 -3 -55 -52 1.1 1.1 0 -60 -60 Indraprastha Gas 21.5 13.1 64 18 -27 4.1 2.7 53 52 2 M R P L 6.1 10.7 -43 -67 -40 1.0 1.6 -38 -62 -38 O N G C 4.6 10.2 -55 -75 -43 0.8 1.5 -48 -71 -43 Petronet LNG 12.6 11.4 11 -31 -36 2.9 2.3 27 9 -12 Reliance Inds. 13.8 12.5 11 -25 -30 1.8 1.5 22 -31 -42

50.939.7

3

21

39

57

75

Dec-

08

Oct

-09

Aug-

10

Jun-

11

Apr-

12

Feb-

13

Dec-

13

Oct

-14

Aug-

15

Jun-

16

Apr-

17

Feb-

18

Dec-

18

Retail P/E (x) 10 Yr Avg (x)

178.0

118.3

-50

30

110

190

270

Dec-

08

Oct

-09

Aug-

10

Jun-

11

Apr-

12

Feb-

13

Dec-

13

Oct

-14

Aug-

15

Jun-

16

Apr-

17

Feb-

18

Dec-

18

Retail Relative to Sensex PE (%)

14.5

10.43

7

11

15

19

Dec-

08

Oct

-09

Aug-

10

Jun-

11

Apr-

12

Feb-

13

Dec-

13

Oct

-14

Aug-

15

Jun-

16

Apr-

17

Feb-

18

Dec-

18

Retail P/B (x) 10 Yr Avg (x)

443.6

298.7

40

190

340

490

640

Dec-

08

Oct

-09

Aug-

10

Jun-

11

Apr-

12

Feb-

13

Dec-

13

Oct

-14

Aug-

15

Jun-

16

Apr-

17

Feb-

18

Dec-

18

Retail Relative to Sensex PB (%)

31

Retail: Rich valuations of 51x do not factor in downside risk Retail sector trades at a P/E of 50.9x, at a 28% premium to

historical average of 40x.

Even on a P/B basis, the sector trades at 14.5x, a premium of 40% to its 10-year average multiple of 10.4x.

Valuation premium relative to the Sensex on a P/E basis has gone up to 178% (from 175% in Nov’ 18).

The two stocks in our retail coverage have been reporting strong revenue growth in the recent past. In the latest reported quarter, operating margins were mixed, with JUBI reporting 270bp improvement and Titan reporting a contraction of 150bp.




Jubilant Food 47.4 64.4 -26 159 261 12.1 12.3 -2 354 374

Titan Inds. 49.8 33.9 47 172 90 14.6 9.4 55 446 263

17.816.1

7

11

15

19

23

Dec-

08

Oct

-09

Aug-

10

Jun-

11

Apr-

12

Feb-

13

Dec-

13

Oct

-14

Aug-

15

Jun-

16

Apr-

17

Feb-

18

Dec-

18

Technology P/E (x) 10 Yr Avg (x)

-2.6

-9.0

-40

-20

0

20

40

Dec-

08

Oct

-09

Aug-

10

Jun-

11

Apr-

12

Feb-

13

Dec-

13

Oct

-14

Aug-

15

Jun-

16

Apr-

17

Feb-

18

Dec-

18

Technology Relative to Sensex PE (%)

4.8

4.2

2

3

4

5

6

Dec-

08

Oct

-09

Aug-

10

Jun-

11

Apr-

12

Feb-

13

Dec-

13

Oct

-14

Aug-

15

Jun-

16

Apr-

17

Feb-

18

Dec-

18

Technology P/B (x) 10 Yr Avg (x)

81.4

59.7

0

30

60

90

120

Dec-

08

Oct

-09

Aug-

10

Jun-

11

Apr-

12

Feb-

13

Dec-

13

Oct

-14

Aug-

15

Jun-

16

Apr-

17

Feb-

18

Dec-

18

Technology Relative to Sensex PB (%)

32

Technology: Seasonal weakness to cloud over sound demand Technology sector trades at a P/E of 17.8x, at an 11%

premium to its historical average of 16.1x. Concerns around trade war with China, Brexit and a possibly

slower US economy in 2019 have weighed on the P/E multiples of IT stocks.

We believe companies might continue exhibiting YoY CC revenue growth in their 3Q results on the back of gradually improving demand and large deal orders, even in Digital.

While improvement continues in BFSI, some pressures could be visible, especially in European region amid uncertainties posed by Brexit .

Although supply issues will keep putting pressure on cost (especially in the US), this effect will be more aggressive for mid tier companies’ balance sheets.

We remain positive on INFO and TECHM in tier-I. In mid-caps, we remain positive on ZENT, KPIT, MTCL, HEXW and PSYS.

Sector Performance MoM: -1%


PE (x) Relative to Sensex P/E (%) PB (x) Relative to Sensex P/B (%) Company Current 10 Yr Avg Prem/Disc (%) Current 10 Yr Avg Current 10 Yr Avg Prem/Disc (%) Current 10 Yr Avg Cyient 13.3 11.7 13 -27 -34 2.5 2.0 23 -8 -23 HCL Technologies 12.3 13.2 -7 -33 -26 2.7 3.1 -11 2 18 Hexaware Tech. 15.0 12.8 17 -18 -28 3.8 3.1 24 42 18 Infosys 16.0 16.9 -6 -13 -5 4.2 4.0 6 59 54 KPIT Tech. 11.8 10.2 15 -36 -43 1.8 1.8 -4 -34 -29 MphasiS 16.5 12.2 36 -10 -32 4.0 2.3 77 52 -12 NIIT Tech. 14.7 9.4 57 -20 -47 3.2 1.6 99 21 -38 TCS 20.4 17.9 14 12 1 8.2 6.1 34 206 134 Tech Mahindra 13.7 12.4 11 -25 -30 2.8 2.6 5 3 1 Wipro 14.9 14.7 1 -19 -18 2.4 2.8 -14 -9 9 Zensar Tech. 14.3 9.0 58 -22 -49 2.5 1.8 37 -8 -31

1.9

2.3

2

2

3

3

4

Dec-

08

Oct

-09

Aug-

10

Jun-

11

Apr-

12

Feb-

13

Dec-

13

Oct

-14

Aug-

15

Jun-

16

Apr-

17

Feb-

18

Dec-

18

Telecom P/B (x) 10 Yr Avg (x)

-29.8

-9.8

-55

-20

15

50

85

Dec-

08

Oct

-09

Aug-

10

Jun-

11

Apr-

12

Feb-

13

Dec-

13

Oct

-14

Aug-

15

Jun-

16

Apr-

17

Feb-

18

Dec-

18

Telecom Relative to Sensex PB (%)

10.58.4

5

8

10

13

15

Dec-

08

Oct

-09

Aug-

10

Jun-

11

Apr-

12

Feb-

13

Dec-

13

Oct

-14

Aug-

15

Jun-

16

Apr-

17

Feb-

18

Dec-

18

Telecom EV/EBDITA (x) 10 Yr Avg (x)

33

Telecom: Favourable TDSAT ruling supports valuation Telecom sector is trading at an EV/EBITDA of 10.5x,

~25% premium to its 10-year historical average. Bharti Airtel and Vodafone Idea witnessed some

respite on the valuation front in Dec’18, as TDSAT ruling on TRAI’s predatory pricing came in favor of incumbents. Also, Bharti Airtel transferred 32% of its stake in Bharti Infratel to its wholly owned subsidiary, which further provided support to Bharti’s valuation.

We believe that the implementation of the minimum APRU plans by incumbents will result in net revenue gains, though at the cost of subscriber churn. Further, fund raising plans by both Vodafone/Idea and Bharti remain a big positive, as it will address concerns about bloated debt and help meet capex requirements in the near term.





Bharti Airtel NA 33.7 NA NA 89 2.6 2.5 3 -2 -2

Idea Cellular NA 27.1 - - 52 0.8 1.9 -59 -70 -26

Tata Comm 46.7 141.7 -67 156 695 17.0 12.7 33 535 389

9.6

14.0

8

12

16

20

24

Dec-

08

Oct

-09

Aug-

10

Jun-

11

Apr-

12

Feb-

13

Dec-

13

Oct

-14

Aug-

15

Jun-

16

Apr-

17

Feb-

18

Dec-

18

Utilities P/E (x) 10 Yr Avg (x)

-47.8-18.4

-65

-40

-15

10

35

Dec-

08

Oct

-09

Aug-

10

Jun-

11

Apr-

12

Feb-

13

Dec-

13

Oct

-14

Aug-

15

Jun-

16

Apr-

17

Feb-

18

Dec-

18

Utilities Relative to Sensex PE (%)

1.1

1.5

1

1

2

2

3

Dec-

08

Oct

-09

Aug-

10

Jun-

11

Apr-

12

Feb-

13

Dec-

13

Oct

-14

Aug-

15

Jun-

16

Apr-

17

Feb-

18

Dec-

18

Utilities P/B (x) 10 Yr Avg (x)

-59.1

-40.6

-65

-40

-15

10

35

Dec-

08

Oct

-09

Aug-

10

Jun-

11

Apr-

12

Feb-

13

Dec-

13

Oct

-14

Aug-

15

Jun-

16

Apr-

17

Feb-

18

Dec-

18

Utilities Relative to Sensex PB (%)

34

Utilities: Electricity generation growth moderates in November Utilities trade at a P/B of 1.1x, at a 28% discount to

historical average. Coal India trades at a premium to historical average

P/B, while CESC, NTPC, NHPC, Power Grid, Tata Power and JSW Energy trade at a discount to historical average P/B.

Short-term power prices were down~8% MoM to INR3.3/kWh in December.

Conventional electricity generation grew ~5% YoY in November 2018.





CESC 8.6 15.6 -45 -53 -12 0.9 1.0 -9 -66 -61

Coal India 8.1 14.2 -43 -56 -20 6.5 6.5 1 144 148

JSW Energy 17.0 17.2 -1 -7 -4 1.0 1.6 -37 -63 -39

NHPC 10.1 11.7 -14 -45 -34 0.9 0.9 -9 -68 -64

NTPC 9.7 14.5 -33 -47 -18 1.1 1.6 -35 -60 -37

Power Grid Corpn 10.1 13.1 -23 -45 -26 1.5 1.9 -17 -42 -29

Tata Power 12.1 22.8 -47 -34 28 1.1 1.9 -42 -58 -25

N O T E S

Motilal Oswal Securities Limited M E M B E R O F B S E A N D N S E

Motilal Oswal Tower, Sayani Road, Prabhadevi, Mumbai 400 025, INDIA BOARD: +91 22 3982 5500 | WEBSITE: www.motilaloswal.com

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For Singapore In Singapore, this report is being distributed by Motilal Oswal Capital Markets Singapore Pte Ltd (“MOCMSPL”) (Co.Reg. NO. 201129401Z) which is a holder of a capital markets services license and an exempt financial adviser in Singapore, as per the approved agreement under Paragraph 9 of Third Schedule of Securities and Futures Act (CAP 289) and Paragraph 11 of First Schedule of Financial Advisors Act (CAP 110) provided to MOCMSPL by Monetary Authority of Singapore. Persons in Singapore should contact MOCMSPL in respect of any matter arising from, or in connection with this report/publication/communication. This report is distributed solely to persons who qualify as “Institutional Investors”, of which some of whom may consist of "accredited" institutional investors as defined in section 4A(1) of the Securities and Futures Act, Chapter 289 of Singapore (“the SFA”). Accordingly, if a Singapore person is not or ceases to be such an institutional investor, such Singapore Person must immediately discontinue any use of this Report and inform MOCMSPL. Disclaimer: The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent. This report and information herein is solely for informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments. Nothing in this report constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to your specific circumstances. The securities discussed and opinions expressed in this report may not be suitable for all investors, who must make their own investment decisions, based on their own investment objectives, financial positions and needs of specific recipient. This may not be taken in substitution for the exercise of independent judgment by any recipient. 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. The investment discussed or views expressed may not be suitable for all investors. Certain transactions -including those involving futures, options, another derivative products as well as non-investment grade securities - involve substantial risk and are not suitable for all investors. No representation or warranty, express or implied, is made as to the accuracy, completeness or fairness of the information and opinions contained in this document. The Disclosures of Interest Statement incorporated in this document is provided solely to enhance the transparency and should not be treated as endorsement of the views expressed in the report. This information is subject to change without any prior notice. The Company reserves the right to make modifications and alternations to this statement as may be required from time to time without any prior approval. MOSL, its associates, their directors and the employees 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. Each of these entities functions as a separate, distinct and independent of each other. The recipient should take this into account before interpreting the document. This report has been prepared on the basis of information that is already available in publicly accessible media or developed through analysis of MOSL. The views expressed are those of the analyst, and the Company may or may not subscribe to all the views expressed therein. 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 MOSL 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 certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction. Neither the Firm, not its directors, employees, agents or representatives shall be liable for any damages whether direct or indirect, incidental, special or consequential including lost revenue or lost profits that may arise from or in connection with the use of the information. The person accessing this information specifically agrees to exempt MOSL or any of its affiliates or employees from, any and all responsibility/liability arising from such misuse and agrees not to hold MOSL or any of its affiliates or employees responsible for any such misuse and further agrees to hold MOSL or any of its affiliates or employees free and harmless from all losses, costs, damages, expenses that may be suffered by the person accessing this information due to any errors and delays.

Registered Office Address: Motilal Oswal Tower, Rahimtullah Sayani Road, Opposite Parel ST Depot, Prabhadevi, Mumbai-400025; Tel No.: 022-3980 4263; www.motilaloswal.com. Correspondence Address: Palm Spring Centre, 2nd Floor, Palm Court Complex, New Link Road, Malad (West), Mumbai- 400 064. Tel No: 022 3080 1000. Compliance Officer: Neeraj Agarwal, Email Id: [email protected], Contact No.:022-30801085. Registration details of group entities: MOSL: SEBI Registration: INZ000158836 (BSE/NSE/MCX/NCDEX); CDSL: IN-DP-16-2015; NSDL: IN-DP-NSDL-152-2000; Research Analyst: INH000000412. AMFI: ARN 17397. Investment Adviser: INA000007100. Motilal Oswal Asset Management Company Ltd. (MOAMC): PMS (Registration No.: INP000000670) offers PMS and Mutual Funds products. Motilal Oswal Wealth Management Ltd. (MOWML): PMS (Registration No.: INP000004409) offers wealth management solutions. *Motilal Oswal Securities Ltd. is a distributor of Mutual Funds, PMS, Fixed Deposit, Bond, NCDs, Insurance and IPO products. * Motilal Oswal Commodities Broker Pvt. Ltd. offers Commodities Products. * Motilal Oswal Real Estate Investment Advisors II Pvt. Ltd. offers Real Estate products. * Motilal Oswal Private Equity Investment Advisors Pvt. Ltd. offers Private Equity products

*MOSL has been amalgamated with Motilal Oswal Financial Services Limited (MOFSL) w.e.f August 21, 2018 pursuant to order dated July 30, 2018 issued by Hon'ble National Company Law Tribunal, Mumbai Bench. The existing registration no(s) of MOSL would be used until receipt of new MOFSL registration numbers.

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http://ftp.motilaloswal.com/emailer/Research/STRATEGY-20171212-MOSL-SU-PG12.pdf

http://institution.motilaloswal.com/emailer/Research/STRATEGY-20180613-MOSL-SU-PG008.pdf

http://institution.motilaloswal.com/emailer/Research/STRATEGY-20180820-MOSL-SU-PG010.pdf

http://ftp.motilaloswal.com/emailer/Research/INDIA%20STRATEGY-2QFY19-20181009-MOSL-RP-PG320.pdf

http://institution.motilaloswal.com/emailer/Research/STRATEGY-VOICES-20181122-MOSL-VO-PG134.pdf

http://ftp.motilaloswal.com/emailer/Research/BULLS%20%20BEARS%20-%20India%20Valuations%20Handbook%20-%2020181204-MOSL.pdf

http://ftp.motilaloswal.com/emailer/Research/FUND%20FOLIO%20-%20Indian%20Mutual%20Fund%20Tracker%20-%20December%202018.pdf

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