Equity 99 Diwali Picsequity99.com/Equity-99-Diwali-Pics.pdf · · Established in 1986, IOL Chemicals & Pharmaceuticals (IOLCP) is India's one of the leading generic pharmaceutical

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CMP : 173 TP : 250 Buy

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BIRLA CABLE LTD.Equity99

Creating Wealth ThroughUnfolded Research

Sector: Commodity Chemicals

Market cap (in Cr) 520

52 week high/low: 180/50

NSE volume (No of shares): 3,04,743

BSE code: 500060

NSE code: BIRLACABLE

Promoter’s Share (%) 66.35

Particulars FY2017 FY2018

Net sales (Rs/cr) 211.21 328.69

PBIDTA margin (%) 7.91 11.02

Net profit (Rs/cr) 3.18 16.13

EPS (Rs.) 1.06 5.38

P/E 163 32

EV/EBITDA 8.99 6.12

RoCE (%) 2.94 11.49

RoE (%) 3.46 13.28

Valuation Summary:

· Birla Cable Limited (Formerly known as Birla Ericsson Optical Limited) is a premier company

in the field of Telecommunication Cables, which offers one of widest portfolio of Copper and

Fibre Optic cables under its umbrella.

· Company is having cable manufacturing facilities located in Rewa, Madhya Pradesh, India

· The demand for optical fibre in India has already touched in 2017 to the tune of more than 28

Million fibre Kms as per the latest CRU reports and is expected to grow in a very brisk pace,

riding on the wave of huge optical fibre network expansion projects by both Government

and private telecom operators.

· Company has posted robust numbers for FY18 and Q1FY19. For Q1FY19, it has reported PAT

of Rs.11.06 crore against loss of Rs.0.33 crore on 128 percent higher sales of Rs.117.48 crore.

· Key Risks: Technological changes and quality issue and competition are main risk factor for

this industry.

The Company has posted healthy growth in last four quarters and we are expecting robust

growth in next 2-3 years, we recommend a BUY the stock with TP of 250on

CMP : 153 TP : 250 Buy


IOL CHEMICALS &PHARMACEUTICALS LTD. Equity99


Valuation Summary:


Market cap (in Cr) 860

52 week high/low: 152.9/64

NSE volume (No of shares): 9,22,748

BSE code: 524164

NSE code: IOLCP

Promoter’s Share (%) 41.19

Particulars FY2017 FY2018

Net sales (Rs/cr) 773.19 1000.96

PBIDTA margin (%) 14.55 12.79

Net profit (Rs/cr) 4.67 27.70

EPS (Rs.) 0.83 4.93

P/E 184 31

EV/EBITDA 7.38 6.52

RoCE (%) 21 25

RoE (%) 2 13

· Established in 1986, IOL Chemicals & Pharmaceuticals (IOLCP) is India's one of the leading generic pharmaceutical

company, and a significant player in the organic chemicals space.

· The chemical segment manufactures Ethyl Acetate, Iso Butyl Benzene (IBB), Acetyl Chloride and Mono Chloro acetic

Acid (MCA).

· Under pharmaceutical segment, the company manufactures active pharmaceutical ingredient (APIs) i.e. ibuprofen.

Company sells branded formulation and ibuprofen in export markets like Europe, Latin America and Middle East. Apart

from Ibuprofen, it also manufactures Metformin Hydrochloride, Lamotrigine, Fenofibrate and Clopidogrel Bi sulphate.

· During Q1FY19, Revenues grew 68% YoY to Rs.362 crore mainly due to higher demand of its flagship product

Ibuprofen. EBITDA margin remains in double digit at 11.99%. EBITDA grew by 57% YoY to Rs.43.43 crore. Exports

increased by 88% to Rs.147 crore. Profit after tax (PAT) grew 383.55% to Rs.14.41 crore from Rs.2.98 crore

· Key Risks: Volatility in product pricing and Rupee volatility are major risk factor for Company.

Company has delivered robust numbers in last 10 quarters and we are expecting momentum to continue for next 2-3

years, we recommend a BUY the stock with TP of 250on

CMP : 1730 TP : 2500 Buy


L&T INFOTECHEquity99



Market cap (in Cr) 2950052 week high/low: 1990/802NSE volume (No of shares): 2,33,067BSE code: 540005NSE code: LTIPromoter’s Share (%) 75.00

Particulars FY2017 FY2018 FY2019E FY2020E

Net sales (Rs/cr) 6,462 7,306 9,176 10,632

EBIDTA margin (%) 19.0 16.9 18.5 19.0

Net profit (Rs/cr) 954 1,112 1,423 1,642

EPS (Rs.) 55.0 64.9 82.7 95.2

P/E 30.8 26.1 20.5 17.8

EV/EBITDA 9.2 14.3 15.5 16.4

P/BV 23.0 22.7 26.9 26.9

RoE (%) 41.9 31.8 33.3 32.0

Valuation Summary:· Incorporated in 1996, L&T Infotech (LTI) is India's sixth

largest IT services company. We see the USD 1bn threshold

as a possible inflection point for LTI, with growth from (1)

An increasing deal pipe, (2) Deeper penetration in large

accounts, (3) Headwinds receding in the energy vertical

and (4) Improving quality of business (digital and platform-

led growth). (5) Depreciating rupee

· Over shorter term too the outlook on company is very positive. The firm had posted better-than-expected

performance across all fronts during Q2FY2019. Revenue growth was driven by broad base which led to constant

currency revenue growth of 3.5 percent QoQ and 22.9 percent YoY. Company had registered double-digit sequential

growth in BFSI, DIGITAL SERVICES and High-Tech & Media space.

· This quarter also the industry experts suggest that maximum projects were awarded in BFSI space and we expect L&T

infotech to benefit from this trend and continue its growth momentum. The results are also expected to be boosted

on account of weakened rupee. Also the firm's diversified approach is expected to pay off and the digital mix strategy

is expected to work in this Quarter too. We expect the revenues to grow at 25% CAGR.

· Key Risks: Overdependence on Top 10 clients, Appreciation of rupee, demand in BFSI and manufacturing segments

We believe that L&T's strategy of well diversified clients and geography will help it grow faster than its peers. We give a

BUY rating on it with a TP of 2500

CMP : 1074 TP : 1300 Buy


RELIANCE INDUSTRIESEquity99



Market cap (in Cr) 68110052 week high/low: 1329/862NSE volume (No of shares): 1,05,73,730BSE code: 500325NSE code: RELIANCEPromoter’s Share (%) 47.35


Net sales (Rs/cr) 3,01,133 3,91,677 5,64,920 6,21,647

EBIDTA margin (%) 0.16 0.17 0.16 0.17

Net profit (Rs/cr) 29,230 35,314 59,831 71,052

EPS (Rs.) 47.66 59.63 70.49 85.28

P/E 14.29 19 14.95 12.36

EV/EBITDA 10.17 10.90 11.20 11.50

P/BV 4.44 4.72 5.55 6.38

RoE (%) 11.22 12.95 13.26 14.27

Valuation Summary:· Reliance Industries, India's largest company in all aspects is set to

grow at a tremendous pace from this point. The country's largest

company is growing at a double digit growth rate consistently for

the past 3 quarters

· With the current state of the economy and its growth, we believe

that Reliance is set to benefit the most out of the India growth story

· Reliance posted a double digit growth rate for the third

consecutive quarter. In Q2FY19, there has been a rise in exports (by 45.5%) due to higher petrochemical product volume and

prices. Also, the digital services revenue has crossed a mark of Rs.100000 mn. Apart from that the retail business is growing at a

rapid pace (115%+ Y-o-Y)

· We believe that reliance's petrochemicals business will continue to grow owing to the current levels of rupee and price of crude

oil, also owing to the festive season ahead we expect reliance retail to continue its growth momentum while the third revenue

driver digital services business will also keep on expanding as the Value added service will be charged going ahead

· Key Risks: Crude Oil price, USD-INR exchange rate, Indian Macroeconomic condition, General election and Retail and Jio

performance

Owing to these factors we believe that Reliance industries will continue to grow at a double digit rate even in the coming quarter

and is a value buy at current price levels (especially Post the recent correction from price levels of 1325) as it still trades at a deep

conglomerate discount of Rs.1174 and PE levels of 18.2. Basis this we recommend a BUY on the stock with TP of 1300

CMP : 15 TP : 25 Buy


SOUTH INDIAN BANKEquity99



Market cap (in Cr) 270752 week high/low: 34.75/12.45NSE volume (No of shares): 1,45,23,136BSE code: 532218NSE code: SOUTHBANKPromoter’s Share (%) NIL


Net sales (Rs/cr) 2,418 2,832 2,941 3,432

EBIDTA margin (%) 421 335 318 552

Net profit (Rs/cr) 0.17 0.12 0.11 0.16

EPS (Rs.) 2.61 1.85 1.69 2.87

P/E 10.50 12.50 8.25 4.86

EV/EBITDA 11.78 12.42 12.89 12.41

P/BV 0.63 0.43 0.37 0.53

RoE (%) 10.31 6.64 5.93 9.44

Valuation Summary:· Founded in 1929, South Indian Bank is one of the oldest

banks based out of Kerala.

· With most of the provisioning of the stressed assets behind

them and their focus on aggressively growing its retail book,

we expect the growth story to start unfolding. The bank is

actively working towards its target of opening 150 new

branches. As a result, we expect the loan book to grow at a

16% CAGR to Rs. 72,810 crore by FY20, driven by a 21% CAGR in the retail book. Further we expect NPAs to normalize to

historical levels and, as a result, revenues are expected to grow at 14% CAGR .

· The Q2FY19 results reflected the same, NPA addition stood at Rs2.13bn compared with a past 10-quarter average of

Rs4.96bn, with management guiding for ~Rs2.5bn slippage per quarter over rest of FY19. Loan book is retailising in a

meaningful way with core retail book growing 31% YoY.

Key Risks: Increased Slippages in the existing corporate loan book, Growth of gold loan book, growth in retail book in south ex-KeralaCurrently the bank trades at a very attractive P/E valuation of 7.9, post the recent steep correction and due to its strong focus and fundamental positioning we provide a BUY rating on the stock with a TP of 25


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Equity 99 Diwali Picsequity99.com/Equity-99-Diwali-Pics.pdf · · Established in 1986, IOL Chemicals & Pharmaceuticals (IOLCP) is India's one of the leading generic pharmaceutical