India Daily, March 14, 2016 - Kotak Securities · Pricing and marketing freedom for gas production from existing difficult ... 20% premium), Patanjali Ayurved has become a strong

For Private Circulation Only. FOR IMPORTANT INFORMATION ABOUT KOTAK SECURITIES’ RATING SYSTEM AND OTHER DISCLOSURES. REFER TO THE END OF THIS MATERIAL.

Contents

Daily Alerts

Change in Reco

Colgate-Palmolive (India): Patanjali worries provide a good entry point; upgrade to ADD

Patanjali impact - we cut EPS estimate by 3-4% as we factor in extra

conservatism

Valuations reasonable post sharp correction; upgrade to ADD with revised

TP of Rs910

Company alerts

Infosys: Set to lead

Poised to grow faster in FY2017 despite elevated industry challenges

Operational efficiency at the forefront in FY2017

Reiterate ADD; Infosys remains our top pick in the sector

Sector alerts

Energy: Positive in the long term; nothing for now

The government extends HELP, though only in the long term

Pricing and marketing freedom for gas production from existing difficult

fields

PSC extended for small and medium-sized fields; no clarity on PSC

extension for major fields

Remunerative policy desirable for existing production

Insurance: Strong month for most

Most reap a harvest

Volumes growth seems to be the key driver except for Max Life

LIC is back

MF inflows weak but remain steady

Economy alerts

Economy: Industrial production remains dismal

IIP continues to decline

Capital goods party to the sharp deceleration

INDIA DAILY March 14, 2016 India 11-Mar 1-day 1-mo 3-mo

Sensex 24,718 0.4 7.5 (1.7)

Nifty 7,510 0.3 7.6 (1.8)

Global/Regional indices

Dow Jones 17,213 1.3 7.8 (0.9)

Nasdaq Composite 4,748 1.9 9.5 (4.1)

FTSE 6,140 1.7 7.6 4.5

Nikkei 17,164 1.3 14.8 (9.1)

Hang Seng 20,200 1.1 10.3 (5.2)

KOSPI 1,976 0.2 7.7 2.5

Value traded – India

Cash (NSE+BSE) 178 201 162

Derivatives (NSE) 2,634 3,657 2,068

Deri. open interest 2,259 2,334 2,266

Forex/money market

Change, basis points

11-Mar 1-day 1-mo 3-mo

Rs/US$ 67.1 11 (108) (2)

10yr govt bond, % 8.1 - 8 5

Net investment (US$ mn)

10-Mar MTD CYTD

FIIs 176 1,414 (1,457)

MFs (71) (360) 1,638

Top movers

Change, %

Best performers 11-Mar 1-day 1-mo 3-mo

EIM IN Equity 20004.0 1.0 11.2 30.2

RELI IN Equity 504.6 (0.5) 25.2 20.2

TATA IN Equity 294.1 (0.9) 35.2 20.0

HZ IN Equity 169.2 (0.4) 7.1 19.8

CAIR IN Equity 147.0 4.5 23.5 17.6

Worst performers

BHEL IN Equity 103.7 (0.7) (0.7) (38.0)

RCOM IN Equity 52.9 (1.7) 4.2 (34.6)

PNB IN Equity 81.9 0.1 11.1 (34.4)

JSP IN Equity 62.8 (4.6) 13.3 (30.9)

JPA IN Equity 7.6 (1.9) 4.9 (28.4)

For Private Circulation Only. FOR IMPORTANT INFORMATION ABOUT KOTAK SECURITIES’ RATING SYSTEM AND OTHER DISCLOSURES, REFER TO THE END OF THIS MATERIAL.

Patanjali impact – we cut EPS estimate by 3-4% as we factor in extra conservatism

Backed by strong herbal/naturals appeal and discounted pricing (competing brands retail at 7-

20% premium), Patanjali Ayurved has become a strong force in the toothpaste category with its

Dant Kanti brand. We estimate Patanjali’s value market share for FY2016 at 2.5% (exit share

would be higher at ~3-3.5%), which is commendable given P&G at its peak was able to garner

just ~1.5% market share. We expect Patanjali to garner 500 bps cumulative incremental share

over FY2016-18E driven by distribution expansion and higher A&P spends; bulk of this share

gain is likely to come from CLGT and HUVR (we model 200 bps share loss for both), in our view

(refer to Exhibit 2 for details) due to lack of a strong relevant herbals/naturals portfolio.

We have cut our CLGT EPS estimates for FY2017-18E by 3-4%; we note we are now 4-7%

below consensus estimates. Key assumptions driving our FY2016-18E forecasts – (1) 11%

revenue CAGR (4-5% volume CAGR and 6-7% price/mix-led growth); we note that our

assumptions do not call for any meaningful acceleration in volumes from 2-3% volume growth

witnessed over past four quarters, (2) toothpaste industry to grow at 12-13% in value terms; at

similar levels to growth rates achieved over the past five years (refer to Exhibit 4) and (3)

absolute A&P spends to grow at 12% CAGR versus flattish spends over the past three years; a

tad higher versus revenue growth.

Valuations reasonable post sharp correction; upgrade to ADD with revised TP of `910

We see the recent sharp correction as a good opportunity to accumulate a strong franchise; we

highlight multiple reasons – (1) despite baking in Patanjali impact, we expect CLGT to deliver a

healthy ~12% EPS CAGR over FY2016-18E as excise impact gets in the base, (2) reasonable

valuations; CLGT is trading at ~8-10% discount (on 1-year forward P/E) to both consumer

sector (ex-ITC) and its 5-year historical average, and (3) CLGT’s past track record to battle

competition (Close-Up in 80s, Pepsodent in late 90s, local players like Balsara, Anchor etc. over

2002-05 and recently P&G); innovation, higher A&P spends, pricing realignment in select sub-

brands/SKUs and potential acquisition are likely tools to be used by CLGT to tackle Patanjali.

We upgrade the stock to ADD from REDUCE with a revised target price of `910/share (from

`900), as we roll forward to March 2018E EPS – based on 33X target multiple (at ~5% discount

to its 5-year historical average P/E).

Colgate-Palmolive (India) (CLGT) Consumer Products

Patanjali worries provide a good entry point; upgrade to ADD. Even as we

appreciate the concerns around Patanjali’s success in the oral care segment and bake in

additional conservatism in our forecasts for CLGT, we see the current levels (<30X

FY2018E PE; 15%+ discount to HUVR) as a fairly decent entry point into what we

continue to see as among the top consumer franchises in the market. Rollover to March

2018 drives modest increase in TP to `910 (from `900). Upgrade to ADD from REDUCE.

ADD

MARCH 14, 2016

CHANGE IN RECO.

Coverage view: Cautious

Price (`): 814

Target price (`): 910

BSE-30: 24,718

Colgate-Palmolive (India)

Stock data Forecasts/Valuations 2016 2017E 2018E

52-week range (Rs) (high,low) EPS (Rs) 21.9 24.3 27.6

Market Cap. (Rs bn) EPS growth (%) 6.6 10.8 13.7

Shareholding pattern (%) P/E (X) 37.1 33.5 29.5

Promoters 51.0 Sales (Rs bn) 41.2 45.5 50.9

FIIs 18.3 Net profits (Rs bn) 6.0 6.6 7.5

MFs 1.7 EBITDA (Rs bn) 9.5 10.6 12.1

Price performance (%) 1M 3M 12M EV/EBITDA (X) 22.9 20.3 17.8

Absolute (1.7) (16.6) (22.9) ROE (%) 69.6 63.3 59.6

Rel. to BSE-30 (8.7) (15.5) (10.6) Div. Yield (%) 1.6 1.7 2.0

Company data and valuation summary

1,099-790

221.3

Colgate-Palmolive (India) Consumer Products

KOTAK INSTITUTIONAL EQUITIES RESEARCH 3

Exhibit 1: We cut FY2017-18E EPS by 3-4% driven by revenue cuts; we are now 4-7% below consensus Key changes to estimates, Colgate, March fiscal year-ends, 2016-18E

Source: Company, Kotak Institutional Equities estimates

Exhibit 2: We bake in 200 bps market share loss for CLGT due to Patanjali’s rise Value market share of key players in toothpaste category (%)


Exhibit 3: Comparative brands/SKUs to Patanjali are retailing at 7-20% premium (ex-Vicco) Pricing comparison of Patanjali’s toothpaste versus key competitive brands for 200 gm SKU

Source: Kotak Institutional Equities

2016E 2017E 2018E 2016E 2017E 2018E 2016E 2017E 2018E

Net operating revenues (Rs mn) 41,237 45,487 50,851 41,237 46,512 53,255 - (2.2) (4.5)

EBITDA (Rs mn) 9,478 10,648 12,082 9,478 11,018 12,791 - (3.4) (5.5)

EBITDA margin (%) 23.2 23.6 23.9 23.2 23.9 24.2

Net income (Rs mn) 5,957 6,606 7,512 5,961 6,853 7,795 (0.1) (3.6) (3.6)

EPS (Rs/share) 21.9 24.3 27.6 21.9 25.2 28.7 (0.1) (3.6) (3.6)

Consensus EPS (Rs/share) 22.4 26.1 28.8 (2.4) (7.0) (4.1)

Revised Earlier Change (%)

2016E 2017E 2018E Share movement, bps (2016-18)

Colgate 56.5 55.5 54.5 (200)

Dabur 10.5 10.8 11.0 50

HUVR 20.0 19.0 18.0 (200)

GSK-CH 2.5 2.5 2.5 -

Patanjali 2.5 5.0 7.5 500

Others 8.0 7.3 6.5 (150)

Brand MRP (Rs) Price per Kg Premium to Patajnali (%)

Patanjali Dant Kanti 75 375

Colgate CDC 82 410 9

Colgate Active Salt 88 440 17

Colgate Herbal 89 445 19

Dabur Red 88 440 17

Dabur Meswak 90 450 20

Pepsodent Germicheck 82 410 9

Pepsodent Clove and Salt 88 440 17

Vicco Vajradanti 125 625 67

Himalaya Dental Cream 80 400 7

Consumer Products Colgate-Palmolive (India)

4 KOTAK INSTITUTIONAL EQUITIES RESEARCH

Exhibit 4: Toothpaste category has grown at 13% CAGR over 2010-15, as per Euromonitor Toothpaste category size and growth rate, December calendar year-ends, 2001-15

Source: Euromonitor, Kotak Institutional Equities

Exhibit 5: Post three years of flattish A&P spends, we model 12% CAGR over 2016-18 Colgate’s absolute A&P spends, March fiscal year-ends, 2010-18E (Rs bn)


20.4 22.1 23.9 25.7 27.5 30.1 33.5

38.3 40.9

44.8 51.0

58.1

66.9

75.0

83.0

-

2

4

6

8

10

12

14

16

0

10

20

30

40

50

60

70

80

90

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Size - LHS (Rs bn) Growth - RHS (yoy, %)

3.0 3.5

4.1

4.9

6.9 7.1 7.0

7.8

8.7

0

1

2

3

4

5

6

7

8

9

10

2010 2011 2012 2013 2014 2015 2016E 2017E 2018E

Colgate-Palmolive (India) Consumer Products


Exhibit 6: CLGT is trading at 32X 1-year forward P/E; at 8% discount to its 5-year historical average Colgate’s 1-year forward P/E chart based on consensus estimates (X)

Source: Bloomberg, Kotak Institutional Equities

Exhibit 7: CLGT is trading at 10% discount to sector (ex-ITC) Colgate’s 1-year forward P/E premium/discount versus KIE consumer sector average (ex-ITC)


Exhibit 8: CLGT is trading at 15+% discount to HUVR Colgate’s 1-year forward P/E premium/discount versus HUVR


0

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Absolute PE 5-Year average PE

-40

-30

-20

-10

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-50

-40

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-10

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Sep-1

5

Mar-

16

Consumer Products Colgate-Palmolive (India)


Exhibit 9: Colgate: Profit model, balance sheet, March fiscal year-ends, 2012-18E (Rs mn)


2012 2013 2014 2015 2016E 2017E 2018E

Profit model

Net sales 26,239 30,841 35,449 39,548 40,931 45,149 50,473

Other operating income 694 797 339 272 306 338 378

Net operating revenues 26,932 31,638 35,788 39,819 41,237 45,487 50,851

EBITDA 5,785 6,568 6,640 8,222 9,478 10,648 12,082

Other income 507 499 503 332 412 535 642

Interest (15) — — — — — —

Depreciation (393) (437) (508) (750) (1,126) (1,323) (1,512)

Pretax profits 5,884 6,630 6,636 7,804 8,765 9,860 11,211

Tax (1,419) (1,663) (1,730) (2,214) (2,805) (3,254) (3,700)

PAT 4,465 4,968 4,906 5,590 5,960 6,606 7,512

Extraordinary items — — 492 — (2) — —

Reported Net profit 4,465 4,968 5,399 5,590 5,957 6,606 7,512

Earnings per share (Rs) 16.4 18.3 18.0 20.6 21.9 24.3 27.6

Balance sheet

Total equity 4,354 4,896 5,999 7,703 9,418 11,454 13,744

Total borrow ings — — — — — — —

Deferred tax liabilities (net) (121) (224) (178) 26 26 26 26

Total liabilities and equity 4,233 4,671 5,821 7,729 9,443 11,480 13,770

Net fixed assets (Incl CWIP) 3,238 3,826 6,974 9,228 9,601 11,438 12,954

Investments 471 471 371 371 371 371 371

Cash 3,098 4,288 2,870 2,545 4,046 4,723 6,064

Net current assets (excl cash) (2,574) (3,914) (4,394) (4,414) (4,574) (5,052) (5,620)

Total assets 4,233 4,671 5,821 7,729 9,443 11,480 13,770

Free cash flow

Operating cash flow (excl working capital) 4,968 4,774 4,937 6,333 6,671 7,394 8,382

Working capital (940) 1,375 (363) 49 160 478 568

Capital expenditure (1,016) (1,521) (3,235) (2,994) (1,499) (3,160) (3,028)

Free cash flow 3,012 4,628 1,339 3,387 5,332 4,712 5,922

Key assumptions, growth (%)

Net operating revenue growth 17.8 17.5 13.1 11.3 3.6 10.3 11.8

EBITDA growth 12.4 13.5 1.1 23.8 15.3 12.3 13.5

EPS growth 10.9 11.3 (1.2) 13.9 6.6 10.8 13.7

EBITDA margin (%) 21.5 20.8 18.6 20.6 23.0 23.4 23.8

Gross margin (%) 61.0 60.5 60.8 63.1 64.3 64.8 64.9

A&SP (% of sales) 15.3 15.5 19.2 17.9 16.9 17.3 17.2

Tax rate (% of PBT) 24.1 25.1 26.1 28.4 32.0 33.0 33.0

Ratios (%)

ROE (%) 109.0 107.4 90.1 81.6 69.6 63.3 59.6

ROCE (%) 127.0 128.1 110.4 103.6 90.6 83.7 79.0


Poised to grow faster in FY2017 despite elevated industry challenges

We expect Infosys to deliver robust, industry leading growth in FY2017E even as Indian IT

industry braces for 1-2% moderation in growth. Healthy order book, robust deal pipeline and

improving deal win rates augur well for Infosys. Macro challenges faced by BFSI vertical clients

may result in some pushback of IT spend and longer decision cycles; though market share gains

will neutralize some of the challenges. Key changes, under the leadership of Dr. Sikka, to the

approach and response to RFPs, emphasis on innovation and scrutiny of the CEO and COO of

large deals have improved the success ratio in large deal wins and account mining. The benefits

of these changes will continue. We expect Infosys to guide 11-13% c/c revenue growth in

FY2017.

Operational efficiency at the forefront in FY2017

With sales processes largely in place and low hanging fruits captured, we expect Infosys to lay

higher emphasis on operational efficiency. It has set the ball rolling with a twofold approach—

(1) Automation—early days. Transition from people only to people + software model

wherever possible and renewal of delivery in each service line. Infosys reported saving close to

1,100 people’s efforts in 9MFY16; we expect much more of this in FY2017E. It sees ample

automation opportunities in testing, maintenance and support services, and (2) Traditional

lever—the more important driver in FY2017. Infosys has launched zero-bench initiative that

challenges the concept of the bench. Internal systems are in place to let project managers post

jobs and resources on the bench to accept them. It has led to utilization of people on the bench

for internal tasks/jobs and innovation so far. Infosys expects it to shrink the bench in the

medium term. Work is in progress to optimize the pyramid, offshore mix and subcontracting

costs. We expect Infosys to maintain margin in FY2017E notwithstanding the pricing pressure.

Reiterate ADD; Infosys remains our top pick in the sector

We are comfortable with industry leading revenue growth forecast for Infosys (KIE 13% c/c

growth in FY2017E). We also believe there are enough levers available to protect profitability.

We expect Street earnings estimates to be met or exceeded. We believe that 2020 targets are

aggressive, but it is interesting to note that part of Infosys CEOs variable payout is aligned with

the 2020 vision [Exhibit 1]. This highlights emphasis on profitability targets, besides well-known

revenue targets. ADD retained and so too the TP of `1,300 (18.5X Sep 2017 EPS).

Infosys (INFO) Technology

Set to lead. The start to CY2016 has been tough, led by delay in project starts in

financial services and macro-economic challenges. Despite these challenges, we expect

Infosys to have a robust FY2017, led by gains from the structural changes implemented

by Dr. Sikka in the past 18-months. Infosys, in our view, can guide for 11-13% growth

in c/c in FY2017. We maintain a positive view and ADD rating on the stock with

unchanged Sep 2017 target price of `1,300.

ADD

MARCH 14, 2016

UPDATE

Coverage view: Attractive

Price (`): 1,143

Target price (`): 1,300

BSE-30: 24,718

Infosys

Stock data Forecasts/Valuations 2016 2017E 2018E

52-week range (Rs) (high,low) EPS (Rs) 57.8 66.0 75.8

Market Cap. (Rs bn) EPS growth (%) 7.2 14.3 14.8

Shareholding pattern (%) P/E (X) 19.8 17.3 15.1

Promoters 13.1 Sales (Rs bn) 621.6 727.1 827.6

FIIs 56.3 Net profits (Rs bn) 132.1 151.0 173.3

MFs 6.8 EBITDA (Rs bn) 167.9 197.1 228.4

Price performance (%) 1M 3M 12M EV/EBITDA (X) 13.7 11.5 9.6

Absolute 6.0 8.6 4.8 ROE (%) 24.4 24.5 24.7

Rel. to BSE-30 (1.6) 10.0 21.5 Div. Yield (%) 2.0 2.4 2.6

Company data and valuation summary

1,220-933

2,634.0

Technology Infosys


How realistic are STRAP targets?

Newspaper reports indicate that Infosys aspires to grow by 16% in c/c at an EBIT margin of

27% for FY2017. These estimates, per newspaper reports, emanated from Infosys Strategy

and Action Planning (STRAP) meeting in Mysore. We believe these are stretch targets, which

every management lays out at the beginning of the year. We stick to our 13% c/c revenue

growth rate estimate for FY2017 at an EBIT margin of 24.9% with the possibility of modest

upsides.

Building blocks in place for sustainable industry leading growth

At the cost of repetition, we summarize several measures taken by Infosys over the past 20

months to revive its sales engine: (1) Sales force augmentation (about 20%+ increase in

S&M headcount), (2) Simplified and objective performance evaluation, (3) Raised

compensation and bonus payouts, (4) Training to increase effectiveness of sales force, (5)

Creation of a central team to vet RFPs and improve quality of proposals, (6) Top 100

consultants assigned two accounts—one from within the Top 100 relationships and another

from outside the top list that has the potential to scale up rapidly, (7) Top 3 accounts in the

big 5 verticals (15 in total) monitored and guided by the CEO’s office on proactive value-

proposition-based selling. These accounts will serve as templates while refining sales

processes.

Additionally, Infosys’ zero distance initiative focuses on innovation in every project. This

initiative, along with training in design thinking, seeds innovation at the grass-roots level. It

has opened new doors for Infosys in existing relationships.

The success of the above measures resulted in above-industry c/c growth in FY2016E and

industry leading growth in FY2017E. It is also visible in several metrics.

Large deals— Infosys has cranked up new deal wins of US$675 mn average in the past

three quarters as compared to US$500 mn in the prior period. This was achieved through

a mix of better proposal quality, productivity improvement and modeling and structuring

of deals. The company aspires to get the wins up to US$1-1.5 bn, which will help build

financial predictability, through relentless focus on execution and share gains in the

renewals market.

Growth of large accounts— Top 5 and top 10 accounts have grown at CQGR of 3.2%

and 2.3% over the past four quarters, higher than the company’s growth of 2.1%.

Attrition— Quarterly annualized attrition is down 830 bps to 18.1% over the past six

quarters. This is partly driven by soft measures taken and higher senior management

employee engagement. The progress on attrition is even more credible considering its

peers TCS and Cognizant have seen rise in attrition during the same period.

We believe Infosys is now well placed to compete and win in both traditional services and

new technology areas. Its position will strengthen further as investments in digital increase.

Margins—ample scope for operation efficiency using traditional levers and

automation

Infosys has multiple levers that can help defend margins in the 24-26% band in FY2017E.

There is significant scope for tightening operations with the help of traditional levers:

Better management of role ratios. This is not a surprise given that Infosys still has an

efficient pyramid with weak number of employees below three years of experience at

~33%. This will help restructure onsite wages in a more comfortable band.

Offshorization of effort. Infosys’ onsite effort is higher than that of the industry.

Possibility exists of further offshorization of efforts in select service lines. We note that

onsite effort of ~29% of Infosys is higher than that of the industry.

Infosys Technology


Subcontracting costs. This arises from imperatives of resourcing a project based on

customers’ demands and long lead times in procuring visas/ local recruitments. This gap is

bridged through sub-contractors. Improvement in supply chain can help manage

subcontracting costs.

Utilization. Infosys has already embarked on a zero bench initiative that challenges the

concept of the bench. Systems are in place to allow project managers to post jobs and

employees on bench to accept these jobs/tasks. This has so far helped in utilizing the

bandwidth of the bench for internal projects and innovation. Infosys expects this initiative

to help it shrink the bench in medium term.

While there is a significant scope of improvement in productivity in traditional areas,

augmentation of this with automation tools and AI platforms will help the company defend

margins.

Automation—making solid progress. Infosys has saved the work of 1,100 people

using automation so far. However, the nature of automation delivered is still at the lower

end and primarily in IMS and testing services. Infosys will increase the breadth of

automation going forward to more L3 services (e.g. source code analysis and understand

the implications of every change) from L1 (e.g. simple password reset, disk capacity

management). In terms of commercial roll out, the company is applying this to fixed price

projects. The company intends to roll this out to T&M projects as well. This, however,

requires restructuring of contracts to ensure that it retains part of the benefits of

automation. The other option is to roll out automation to T&M contracts in people +

software model where the client pays separately for the use of software.

Exhibit 1: Infosys CEO compensation plan as per the new employment contract for the period Apr-16 to Mar-21, March fiscal year-ends

(US$ mn)

Source: Company

FY2017E Comments

Fixed compensation

Cash component 1.0 Base salary of US$1 mn

Stock awards 2.0 US$2 mn in RSUs which vest over time (around 4 years) subject to continued serv ice

Variable compensation

Performance targets to be set by the Board annually to align with company's stated goals of revenues, margins and revenue per person for FY2021

Cash component 0 to 4.5 US$3 mn at target level; capped at 150% of target level compensation if targets are overachieved

Stock awards 0 to 7.5

US$5 mn in performance based equity and stock options at target level; capped at 150% of target level compensation if

targets are overachieved

Perquisites NA Employee benefit plans, paid vacation and reimbursements as applicable to whole-time directors

Total 3 to 15

Technology Infosys


Exhibit 2: Infosys: key client metrics

Source: Company, Kotak Institutional Equities

Exhibit 3: Top 10 accounts have grown faster over past few quarters Infosys: top clients’ growth


Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15

Client metrics

Number of active clients 873 888 890 910 912 932 950 987 1,011 1,045

New clients added in the period 68 54 50 61 49 59 52 79 82 75

Repeat business % 98.3 97.3 96.3 99.0 98.1 97.4 96.6 98.4 97.6 96.8

Million $ clients 469 495 501 520 526 532 529 535 542 555

5 Million $ clients 221 226 232 235 237 240 244 248 258 261

25 Million $ clients 77 77 78 78 83 83 83 83 85 89

50 Million $ clients 40 41 42 43 43 46 47 49 50 51

75 Million $ clients 24 25 24 24 27 29 29 28 31 28

100 Million $ clients 15 15 13 12 13 14 15 14 14 13

200 Million $ clients 3 4 3 3 3 4 4 6 6 6

300 Million $ clients — 1 1 1 — — — 1 1 1

4 qtr CQGR

Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 (%)

Revenue (US$ mn)

Top client 81 78 75 73 75 71 76 83 89 84 4.4

Top 5 clients 310 296 295 292 299 295 300 316 335 335 3.2

Top 10 clients 506 494 490 488 504 497 490 519 545 544 2.3

Ex- Top 10 clients 1,560 1,607 1,602 1,645 1,697 1,721 1,669 1,737 1,847 1,863 2.0

Total 2,066 2,100 2,092 2,133 2,201 2,218 2,159 2,256 2,392 2,407 2.1

Growth (qoq %)

Top client 3.8 (3.6) (3.1) (3.7) 3.2 (5.2) 6.5 10.5 6.0 (4.8)

Top 5 clients 4.5 (4.5) (0.4) (0.9) 2.4 (1.5) 1.7 5.2 6.0 (0.1)

Top 10 clients 5.9 (2.5) (0.8) (0.2) 3.2 (1.4) (1.4) 5.9 5.1 (0.3)

ex- Top 10 clients 3.1 3.0 (0.3) 2.6 3.2 1.4 (3.0) 4.1 6.3 0.9

Total 3.8 1.6 (0.4) 2.0 3.2 0.8 (2.7) 4.5 6.0 0.6

Infosys Technology


Exhibit 4: Infosys’ quarterly annualized attrition has eased


18.1

10

14

18

22

26

30

Jun-1

0

Sep-1

0

Dec

-10

Mar-

11

Jun-1

1

Sep-1

1

Dec

-11

Mar-

12

Jun-1

2

Sep-1

2

Dec

-12

Mar-

13

Jun-1

3

Sep-1

3

Dec

-13

Mar-

14

Jun-1

4

Sep-1

4

Dec

-14

Mar-

15

Jun-1

5

Sep-1

5

Dec

-15

Quarterly annualized attrition (%)

Technology Infosys


Exhibit 5: Infosys: quarterly operating metrics


Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15

Revenues (US$ mn) 1,991 2,066 2,100 2,092 2,133 2,201 2,218 2,159 2,256 2,392 2,407

Revenues (Rs mn) 112,670 129,650 130,260 128,750 127,700 133,420 137,960 134,110 143,540 156,350 159,020

Exchange rate (Re/US$) 56.6 62.8 62.0 61.5 59.9 60.6 62.2 62.1 63.6 65.4 66.1

Revenue by verticals (%)

Insurance, Banking and Financial services 33.7 33.4 33.5 33.5 33.4 32.8 33.1 33.6 33.1 32.8 33.5

Manufacturing 22.5 23.2 22.8 23.0 23.2 23.3 23.4 23.8 24.0 23.8 22.8

Retail 15.8 15.7 16.0 15.5 15.8 15.3 14.9 15.1 15.0 14.9 14.7

Telecom 8.5 8.3 7.9 8.6 8.7 8.9 8.7 8.3 8.4 7.9 8.0

Energy and Utilities 4.9 5.1 5.2 5.3 5.1 5.5 4.9 4.5 4.2 4.7 5.1

Transportation & Logistics 1.8 1.8 1.6 1.7 1.5 1.5 1.5 1.6 1.5 1.9 1.9

Life sciences and healthcare 7.1 6.7 7.0 6.6 6.5 6.6 7.1 6.8 7.6 7.8 7.7

Others 5.7 5.8 6.0 5.8 5.8 6.1 6.4 6.3 6.2 6.2 6.3

Revenue by service offerings (%)

ADM 35.0 35.1 35.1 34.9 34.5 35.0 34.4 34.0 33.9 33.6 33.2

- Application development 15.7 16.0 15.9 15.5 15.8 16.1 14.9 14.3 14.0 14.0 14.1

- Application maintenance 19.3 19.1 19.2 19.4 18.7 18.9 19.5 19.7 19.9 19.6 19.1

Business Process Management 6.3 6.3 6.4 6.7 6.5 6.3 6.5 6.3 6.0 5.9 5.8

Consulting and Package Implementation 33.6 33.3 33.4 32.5 32.3 32.4 32.6 32.7 32.8 32.8 33.8

Infrastructure Management 7.0 7.2 6.9 7.2 7.9 7.9 8.2 8.1 8.3 8.7 7.5

Product Engineering Services 3.2 3.3 3.2 3.4 3.4 3.4 3.4 3.5 3.5 3.3 3.4

Testing Services 8.4 8.4 8.7 9.2 9.5 9.4 9.1 8.9 8.9 9.0 9.2

Others 2.8 2.7 2.5 2.6 2.7 2.7 2.9 3.1 3.4 3.9 4.1

Product revenues 3.7 3.7 3.8 3.5 3.2 2.9 2.9 3.4 3.2 2.8 3.0

Revenue by geography (%)

North America 61.4 61.5 60.0 59.8 60.8 60.8 61.6 62.8 63.2 63.3 62.5

Europe 23.6 24.0 24.9 25.2 24.5 24.7 24.0 23.1 22.4 22.9 23.2

India 2.6 2.4 2.6 2.6 2.4 2.2 2.5 2.5 2.2 2.3 2.8

ROW 12.4 12.1 12.5 12.4 12.3 12.3 11.9 11.6 12.2 11.5 11.5

Revenue by project type (%)

Fixed price 42.1 42.1 42.9 43.5 42.2 43.2 42.9 43.8 44.1 45.5 45.7

Time and Material 57.9 57.9 57.1 56.5 57.8 56.8 57.1 56.2 55.9 54.5 54.3

Client metrics

Top client contribution to revenues (%) 3.9 3.9 3.7 3.6 3.4 3.4 3.2 3.5 3.7 3.7 3.5

Top 5 client contribution to revenues (%) 14.9 15.0 14.1 14.1 13.7 13.6 13.3 13.9 14.0 14.0 13.9

Top 10 client contribution to revenues (%) 24.0 24.5 23.5 23.4 22.9 22.9 22.4 22.7 23.0 22.8 22.6

Number of active clients 836 873 888 890 910 912 932 950 987 1,011 1,045

New clients added in the period 66 68 54 50 61 49 59 52 79 82 75

Repeat business % 99.0 98.3 97.3 96.3 99.0 98.1 97.4 96.6 98.4 97.6 96.8

Million $ clients 466 469 495 501 520 526 532 529 535 542 555

5 Million $ clients 215 221 226 232 235 237 240 244 248 258 261

25 Million $ clients 73 77 77 78 78 83 83 83 83 85 89

50 Million $ clients 41 40 41 42 43 43 46 47 49 50 51

75 Million $ clients 24 24 25 24 24 27 29 29 28 31 28

100 Million $ clients 15 15 15 13 12 13 14 15 14 14 13

Per-capita productivity (IT Services and Consulting) - Reported (US$)

Onsite 151,674 153,818 157,210 157,551 157,436 161,529 157,491 150,561 150,109 154,463 149,829

Offshore 52,600 53,499 54,666 54,315 54,201 54,039 51,823 49,698 48,605 49,771 48,378

Blended 84,270 84,806 85,367 84,691 84,362 84,868 81,983 78,868 78,315 80,352 78,343

Currency-wise revenues (%)

USD 69.3 69.5 68.5 67.8 68.0 68.3 68.9 70.4 70.5 70.4 69.7

GBP 5.6 5.9 6.0 6.0 5.8 5.9 5.8 5.9 6.3 6.6 6.7

Euro 9.8 10.1 10.4 10.8 10.6 10.4 10.3 9.4 8.9 9.5 9.4

AUD 7.9 7.6 7.9 8.1 8.2 8.2 7.4 6.6 7.3 6.8 6.6

Utilization measures (IT Services and Consulting)

Including trainees 70.7 73.1 72.5 72.9 74.8 75.2 75.7 72.8 75.7 75.4 74.2

Excluding trainees 74.3 77.5 76.9 76.7 80.1 82.3 82.7 78.6 80.2 81.3 80.6

Employee metrics

Total Employees (Consolidated) 157,263 160,227 158,404 160,405 161,284 165,411 169,638 176,187 179,523 187,976 193,383

S/W professionals (IT Services & Consulting) 122,687 125,019 123,657 125,344 125,182 128,374 131,953 137,452 139,055 155,959 152,109

Trainees 5,581 14,760 5,658 7,104 8,439 9,782 6,967 5,674 4,359 8,683 9,561

Infosys BPO 26,207 26,834 26,475 27,157 28,192 29,067 29,522 30,313 31,280 32,017 31,786

Gross additions 10,138 12,168 6,682 10,997 11,506 14,255 13,154 14,471 11,889 17,595 14,027

Net additions 575 2,964 (1,823) 2,001 879 4,127 4,227 6,549 3,336 8,453 5,407

Laterals hired 3,008 3,806 3,333 2,100 3,954 4,774 6,094 8,334 5,886 7,452 6,115

LTM Attrition 16.9 17.3 18.1 18.7 19.5 20.1 20.4 18.9 14.2 14.1 13.4

Attrition quarterly annualized 24.4 23.2 21.4 22.6 26.4 24.8 21.3 18.3 19.2 19.9 18.1

Deal wins

TCVs (US$ mn) 600 450 500 700 700 600 213 414 688 983 360

Large deal wins 7 5 NA 4 5 7 3 5 6 5 4

Infosys Technology


Exhibit 6: Condensed consolidated financials for Infosys, March fiscal year-ends (Rs mn), 2013-2018E


2013 2014 2015 2016E 2017E 2018E

Profit model

Revenues 403,520 501,330 533,190 621,609 727,060 827,576

EBITDA 115,600 136,340 149,010 167,905 197,130 228,449

Depreciation (11,310) (13,740) (10,690) (14,125) (16,262) (19,220)

Other income 23,590 26,690 34,270 30,807 30,265 33,081

Pretax profits 127,881 149,291 172,591 184,588 211,133 242,311

Tax (33,670) (40,620) (49,290) (52,459) (60,173) (69,058)

Profit after tax 94,211 108,671 123,301 132,129 150,961 173,253

Diluted earnings per share (Rs) 41.2 46.6 53.9 57.8 66.0 75.8

Balance sheet

Total equity 379,940 445,300 507,360 577,777 654,683 745,654

Deferred taxation liability (4,690) (6,290) (5,360) (5,360) (5,360) (5,360)

Total borrow ings — — — — — —

Minority interest — — — — — —

Current liabilities 83,370 124,360 155,530 155,592 162,473 169,032

Total liabilities and equity 458,620 563,370 657,530 728,009 811,797 909,326

Cash 218,320 259,500 303,670 329,305 373,399 431,162

Other current assets 140,120 180,240 209,940 234,738 266,870 297,507

Goodwill — — — — — —

Tangible fixed assets 82,790 93,390 121,220 141,266 148,828 157,957

Investments 17,390 30,240 22,700 22,700 22,700 22,700

Total assets 458,620 563,370 657,530 728,009 811,797 909,326

Free cash flow

Operating cash flow, excl. working capital 81,390 93,920 91,610 115,286 136,957 159,391

Working capital changes (11,820) (2,810) (8,420) (24,736) (25,250) (24,079)

Capital expenditure (32,460) (27,450) (22,550) (34,011) (23,824) (28,348)

Acquistions — — (13,760) — — —

Other income 20,220 23,800 25,510 30,807 30,265 33,081

Free cash flow 57,330 87,460 72,390 87,346 118,148 140,044

Key ratios and assumptions

Revenue growth (US$ terms) (%) 5.8 11.5 5.6 9.2 13.3 12.9

Re/US$ rate 54.5 60.8 61.2 65.4 67.5 68.0

EBITDA margin (%) 28.6 27.2 27.9 27.0 27.1 27.6

EBIT margin (%) 25.8 24.5 25.9 24.7 24.9 25.3

Debt/equity — — — — — —

Net debt/equity (0.6) (0.7) (0.6) (0.6) (0.6) (0.6)

RoAE 27.2 26.3 25.9 24.4 24.5 24.7

RoIC 52.1 49.1 48.7 46.3 46.7 48.3


The government extends HELP, though only in the long term

The government has introduced a new exploration policy framework, Hydrocarbon Exploration

and Licensing Policy (HELP), which will address several fundamental issues that prevented

significant progress in upstream sector over the years. HELP includes the following features:

Uniform licensing system, which will cover exploration of all hydrocarbons such as crude

oil, natural gas, CBM, etc. under a single contract and policy framework.

Open acreage licensing policy, which will allow the contractors to bid for unexplored

acreages of their choice on a continuous basis.

Biddable revenue-sharing contract, wherein bidders will be required to quote revenue

sharing with the government, which will be a key parameter for the winning bid.

Concessional royalty regime, which will reduce royalty rate for shallow water blocks to

7.5%, deep water blocks to 5% and ultra-deep water to 2%; deep water and ultra-deep

water blocks, will be exempted from royalty in the first seven years.

Pricing and marketing freedom for natural gas produced from domestic fields and

contracted on arms-length basis.

Pricing and marketing freedom for gas production from existing difficult fields

The government’s decision to allow pricing and marketing freedom for difficult gas discoveries,

may aid production from GSPC’s Deen Dayal field and development of ONGC’s KG basin

discoveries and RIL’s KG basin satellite fields (subject to the withdrawal of ongoing litigations).

The government has included discoveries in deep water/ultra-deep water/high temperature/high

pressure areas, which had not commenced commercial production as on January 1, 2016 and

all future discoveries in such areas. The price of gas will be capped by a ceiling, which will be

the lowest of (1) landed price of imported fuel oil, (2) weighted average import-parity price of

substitute fuels (0.3Xcoal + 0.4Xfuel oil + 0.3Xnaphtha) and (3) landed price of imported LNG.

The ceiling price will be calculated on trailing four quarters with a lag of one quarter and will be

reviewed at six-month intervals.

PSC extended for small and medium-sized fields; no clarity on PSC extension for major fields

The government’s decision to approve extension of Production Sharing Contracts (PSC) for 28

small and medium-sized discovered fields is expected to increase domestic production only

modestly; the government’s share of profit in petroleum will increase by 10% for the extended

period. However, there is still no clarity on extension of PSCs for major fields, such as RJ-ON-

90/1 block of Cairn-ONGC, which contribute significantly to domestic crude oil production.

Remunerative policy desirable for existing production

In our view, a remunerative policy framework is highly desirable for existing oil and gas

production, and it is more important in the prevailing lower global pricing environment. Higher

duty structure (ad valorem cess + royalty) for crude oil and a frugal pricing formula for natural

gas, linked primarily to gas-deficit countries, have significantly impacted profitability of

upstream PSUs in the current environment.

Energy India

Positive in the long term; nothing for now. The government’s recent policy

initiatives, (1) a new, uniform hydrocarbon licensing policy and (2) marketing and

pricing freedom for gas production from difficult fields, may help boost domestic E&P

activity in the long run. However, the lack of a remunerative policy framework for

existing oil and gas production, even in a subdued global pricing environment,

continues to have a bearing on upstream PSUs’ profitability. Reiterate SELL on

OIL/ONGC, given inadequate policy support.

ATTRACTIVE

MARCH 14, 2016

UPDATE

BSE-30: 24,718

Energy India


Exhibit 1: India is still relatively unexplored Breakdown of area by level of exploration (mn sq. km.)

Source: DGH, Kotak Institutional Equities

Exhibit 2: Slow progress in exploration activity in NELP blocks Details of status of works on NELP blocks


Exhibit 3: Lack of progress in exploratory drilling activities Wells drilled in domestic E&P blocks, March fiscal year-ends, 2006-15


1996 1999 2003 2005 2006 2007 2008 2009 2010 2011 2012

Moderately/well explored 0.50 0.50 0.54 0.60 0.63 0.64 0.69 0.69 0.69 0.69 0.69

Poorly explored 0.53 0.53 0.59 0.69 0.66 0.66 0.63 0.64 0.70 0.70 0.70

Exploration initiated 0.56 0.84 1.00 1.16 1.38 1.38 1.37 1.41 1.38 1.38 1.38

Unexplored 1.57 1.28 1.02 0.70 0.47 0.47 0.45 0.40 0.37 0.37 0.37

Total 3.15 3.14 3.14 3.14 3.14 3.14 3.14 3.14 3.14 3.14 3.14

NELP I NELP II NELP III NELP IV NELP V NELP VI NELP VII NELP VIII NELP IX

1999 2000 2002 2003 2005 2006 2008 2009 2011 Total

Blocks offered 48 25 27 24 20 55 57 70 34 360

Blocks awarded 25 23 23 21 20 52 44 33 21 262

PSCs signed 24 23 23 20 20 52 41 32 19 254

Blocks relinquished 20 19 16 13 12 28 5 — 1 114

Blocks under operation 4 3 7 7 8 24 36 32 18 139

Discoveries 42 9 22 17 19 14 3 — — 126

Blocks under production 1 2 — — — — — — — 3

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Exploratory wells

Onland

ONGC 74 62 71 74 87 82 100 53 57 45

OIL 8 15 13 13 15 11 12 18 15 12

Pvt./JVs 59 36 54 74 51 29 39 46 53 70

Total 141 113 138 161 153 122 151 117 125 127

Offshore

ONGC 32 11 27 32 26 43 35 21 15 30

OIL — — — — — — — — — —

Pvt./JVs 25 39 34 14 24 25 26 22 32 20

Total 57 50 61 46 50 68 61 43 47 50

Total exploratory wells drilled 198 163 199 207 203 190 212 160 172 177

Development wells

Onland

ONGC 122 134 163 169 198 223 238 251 216 214

OIL 23 31 39 28 31 17 23 19 23 24

Pvt./JVs 12 18 13 18 71 129 76 28 157 130

Total 157 183 215 215 300 369 337 298 396 368

Offshore

ONGC 42 44 61 49 48 34 42 72 67 54

OIL — — — — — — — — — —

Pvt./JVs 21 25 37 18 12 9 10 11 17 8

Total 63 69 98 67 60 43 52 83 84 62

Total development wells drilled 220 252 313 282 360 412 389 381 480 430

India Energy


Exhibit 4: Domestic gas price to decline further in FY2017 Prices and volumes for key countries used in domestic gas pricing formula

Source: BP Statistical Review, Bloomberg, Kotak Institutional Equities estimates

Exhibit 5: Profitability of upstream companies remains quite low currently Profit per barrel calculations for upstream companies (US$/bbl)

Source: Kotak Institutional Equities estimates

Jul'13-Jun'14 CY2014 Jul'14-Jun'15 CY2015 Jul'15-Jun'16

Gas prices (US$/mn BTU)

Henry Hub (US) 4.3 4.4 3.3 2.6 2.2

Alberta Hub (Canada) 3.7 4.0 2.8 2.0 1.8

National Balancing Point (UK) 9.7 8.2 7.4 6.5 5.2

Domestic gas price in Russia 2.3 2.6 2.5 NA NA

Weighted change (US$/mn BTU)

Henry Hub (US) 0.1 (0.5) (0.3) (0.2)

Alberta Hub (Canada) 0.0 (0.1) (0.0) (0.0)

National Balancing Point (UK) (0.5) (0.3) (0.3) (0.4)

Domestic gas price in Russia 0.0 (0.0) NA NA

Expected revision on GCV basis (0.4) (0.8) (0.6) (0.6)

Expected revision on NCV basis (0.4) (0.9) (0.7) (0.6)

Nov'14-Mar'15 1HFY16 2HFY16 1HFY17 2HFY17

Domestic gas price (US$/mn BTU)

GCV basis 5.05 4.66 3.82 3.18 2.61

NCV basis 5.61 5.18 4.24 3.53 2.90

Crude (US$/bbl) Natural gas (US$/mn BTU)

Onshore Offshore 2HFY16 1HFY17 2HFY17

Realizations 40.0 40.0 4.2 3.5 2.9

Royalty 6.7 3.6 0.4 0.3 0.3

Cess 8.0 8.0 — — —

Operating cost and DD&A (a) (b) 15.5 18.8 3.1 3.1 3.1

Profit per barrel (before taxes) 9.8 9.6 0.8 0.1 (0.4)

Profit per barrel (after taxes) 6.5 6.3 0.5 0.1 (0.3)

Notes:

(a) We compute operating cost for onshore crude oil based on OIL's reported data; actual

cost of oil production will be higher than blended cost per boe.

(b) We compute operating cost for offshore crude oil based on ONGC's reported data; actual

cost of oil production will be higher than blended cost per boe. Also, cost of oil production

will likely be higher in offshore areas than onshore.


Most reap a harvest

Overall APE (individual and group business) was up 24% yoy in February 2016 and 11% YTD

(Exhibit 1). Individual business APE was up 16% for private players. LIC bounced back with 24%

yoy growth as compared to 13% in 3QFY16 and 17% in January 2016.

Volumes growth seems to be the key driver except for Max Life

Max Life has reported 33% yoy growth in individual APE (after 4% decline in 9MFY16 and

20% growth in January 2016). Most of this is on account of increase in ticket size in the

individual non-single segment (21% yoy and 10% mom) as volumes are up just 10%. The

company has tweaked its product mix in favor of UL and non-par policies.

HDFC Life individual APE was up 27% yoy. The company has reported 50% yoy and 14%

mom growth in volumes (# of policies in the individual non-single segment). Its average

ticket size declined 15% yoy (up 3% mom). Focus on online protection and cancer care

policies likely drove higher mom volumes.

ICICI Prudential Life reported moderate (12%) volume growth in the individual non-single

segment. However, sharp (16%) decline in average ticket size, on a high base, led to decline

in individual APE (down 6% yoy). Its average ticket size of `78,000 is still significantly higher

than `30,000-50,000 for peers.

Bajaj Life has reported 30% increase in average ticket size in individual non-single segment

but its volumes continue to decline (down 27% yoy); the company reported 8% decline in

individual APE.

LIC’s ticket size remains significantly lower than peers at `10,500 (up 6% yoy). Volumes are

up 13% yoy.

SBI and Kotak OM remain strong with 55% and 38% growth in individual APE respectively.

LIC is back

LIC has been steadily gaining traction. It reported 26% decline in individual APE in FY2015,

followed by 11% decline in 1HFY16; it turned in the positive in 3QFY16 with 13% growth and

has now accelerated to 23% growth in February. We await details on the product mix of LIC.

MF inflows weak but remain steady

Inflows to equity funds of mutual funds crashed to `25 bn (`25-36 bn for past three months),

down from run-rate of `63 bn in October and November 2015 (Exhibit 5). This should intuitively

imply that inflows to unit-linked policies may be stable mom but weaker than 1HFY16.

Insurance India

Strong month for most. Private players reported 16% growth in individual APE, lifted

by select players. Weak inflows to equity mutual funds implied that ULIP sentiment was

weak—a likely reason for yoy decline in ticket size for most players. As such, volumes

have driven the trend in APE: HDFC Life (APE up 27%, volumes up 50%) and ICICI Life

(APE down 6% yoy, volumes up 12%). Max Life was an exception (APE up 33%, ticket

size up 20%) likely for tweaking product mix.

MARCH 14, 2016

UPDATE

BSE-30: 24,718

QUICK NUMBERS

Max reported 33%

APE growth

50% yoy growth in

individual non-

single volumes for

HDFC Life

ICICI Prudential Life

reported 6%

decline in individual

APE

India Insurance


Exhibit 1: Adjusted life insurance premium up 14% for private players March fiscal year-end, 2016 (Rs mn)

Source: IRDA, Life council, Kotak Institutional Equities

Exhibit 2: Private sector volumes in individual business were up 16% in February 2016 Yoy growth in adjusted individual business premium, March fiscal year-ends, 2014-15, 2016YTD (%)


yoy

growth

(%) Group

yoy

growth

(%) Total

yoy

growth

(%) Individual

yoy

growth

(%) Group

yoy

growth

(%) Total

yoy

growth

(%)

Aegon Religare 121 (52) — 121 (52) 1,078 (30) — 1,078 (30)

Aviva 112 (56) 9 11 121 (54) 1,277 (43) 130 (35) 1,407 (42)

Bajaj Allianz 683 (8) 137 22 819 (4) 5,319 (15) 1,468 14 6,787 (10)

Bharti Axa 319 10 15 57 334 11 2,980 5 148 51 3,129 7

Birla Sunlife 628 7 47 30 675 8 5,182 (10) 966 15 6,147 (7)

Canara HSBC 546 75 125 1,745 671 110 3,481 25 330 309 3,811 33

DHFL Pramerica 97 (32) 53 22 150 (19) 1,323 10 471 24 1,794 13

Future Generali 139 (11) 3 203 142 (9) 949 (2) 91 67 1,040 2

HDFC Life 3,570 27 191 58 3,761 28 27,587 13 1,992 23 29,579 13

ICICI Prudential 4,773 (6) 70 99 4,843 (5) 43,491 9 1,311 166 44,802 11

IDBI Federal 321 41 5 10 326 40 2,701 29 70 (19) 2,771 27

India First 301 16 56 (64) 358 (15) 1,638 33 1,093 — 2,730 11

ING Vysya 476 19 2 (11) 478 18 4,024 11 69 741 4,092 12

Kotak OM 929 38 68 21 997 36 7,103 64 839 44 7,942 62

Max Life 2,279 33 25 31 2,304 33 16,466 4 228 27 16,694 4

MetLife 839 19 5 (50) 845 18 7,489 30 69 (28) 7,558 29

Reliance Life 769 (18) 23 (11) 792 (18) 7,419 (28) 611 (22) 8,030 (27)

Sahara 10 20 — 10 20 118 14 — 118 14

SBI Life 3,587 54 118 8 3,705 52 35,495 40 1,607 29 37,102 39

Shriram Life 315 31 28 63 342 33 2,983 46 238 80 3,222 48

Star Union Daichi 512 3 5 (23) 516 2 3,067 (2) 218 15 3,285 (1)

Tata AIA 727 157 4 18 732 155 4,339 165 113 85 4,452 162

Private players 22,052 17 989 26 23,041 17 185,511 14 12,062 25 197,573 14

LIC 20,648 23 4,516 86 25,163 31 172,504 1 48,654 40 221,158 8

Total Premium 42,700 20 5,505 71 48,204 24 358,015 7 60,716 37 418,731 11

Feb-16 FY16 YTD

Individual

2014 3QFY15 4QFY15 2015 1QFY16 2QFY16 Oct-15 Nov-15 Dec-15 3QFY16 Jan-16 Feb-16

Bajaj Allianz (18.5) (47.9) 5.2 (22.6) 18.9 (43.3) (3.7) 12.9 4.7 4.0 (16.9) (8.3)

Birla Sunlife (18.9) (18.4) (4.3) (11.8) (24.2) (22.1) (9.4) 6.9 13.9 4.9 8.8 7.0

HDFC Standard Life (24.2) 27.9 19.4 25.0 8.6 19.4 13.2 14.3 (9.7) 3.1 15.7 27.0

ICICI Prudential (1.7) 51.5 49.2 41.3 38.9 11.8 21.1 (19.9) (4.5) (2.9) 12.3 (5.9)

KMOM 1.2 29.6 56.6 32.8 108.0 75.6 73.2 41.1 60.2 57.7 38.6 37.8

Max Life 16.9 8.1 9.9 10.2 (10.9) 9.1 12.8 (8.4) (10.7) (5.2) 20.3 32.6

MetLife 2.8 37.0 47.9 23.4 33.7 51.1 15.2 9.2 40.2 24.6 3.8 19.0

Reliance Life 14.6 4.9 19.1 7.3 (33.8) (16.0) (15.4) (27.1) (37.6) (29.3) (47.4) (18.0)

SBI Life 17.7 9.4 32.8 11.0 28.7 58.4 58.2 44.3 27.6 37.9 19.4 54.3

Private sector (3.6) 13.9 25.6 15.8 14.8 15.7 22.2 4.8 7.1 10.6 10.8 16.0

LIC (3.4) (54.4) 3.5 (26.3) (11.9) (10.5) 63.2 (0.4) (1.1) 13.2 17.0 23.5

Total (3.4) (32.1) 13.8 (10.4) (1.3) 1.8 39.7 2.5 3.7 11.8 13.9 20.0

Insurance India


Exhibit 3: Ticket size down yoy for most players Average policy size in individual non-single segment (Rs)


Exhibit 4: Private players reported stable market share in individual business Trend in adjusted individual business market share, March fiscal year-ends, 2014-15, 2016YTD (%)


Feb-15 Jan-16 Feb-16

Aegon Religare 41,263 26,219 31,244 (24) 19

Aviva 43,421 46,252 41,044 (5) (11)

Bajaj Allianz 25,458 34,858 32,798 29 (6)

Bharti Axa 40,553 40,258 37,581 (7) (7)

Birla Sun Life 21,928 19,857 21,295 (3) 7

Canara HSBC Oriental 55,846 63,639 50,781 (9) (20)

DHFL Pramerica 30,659 31,332 21,148 (31) (33)

Future Generali 43,200 45,891 49,237 14 7

HDFC Life 47,903 39,612 40,824 (15) 3

ICICI Prudential 93,853 87,918 78,585 (16) (11)

IDBI Federal 28,738 33,779 31,926 11 (5)

IndiaFirst 20,636 27,115 27,082 31 (0)

Exide Life 26,193 27,380 26,952 3 (2)

KMOM 41,005 44,296 44,909 10 1

Edelweiss Tokio 34,316 37,439 42,564 24 14

Max Life 42,846 47,184 51,761 21 10

PNB Metlife 38,533 42,282 40,252 4 (5)

Reliance 26,524 23,479 24,369 (8) 4

Sahara India 7,045 10,406 9,405 34 (10)

SBI 28,424 39,242 36,987 30 (6)

Shriram 13,249 14,289 14,715 11 3

Star Union 41,978 43,022 45,247 8 5

Tata AIA 30,815 33,240 44,010 43 32

LIC 9,897 10,541 10,508 6 (0)

MoM (%)YoY (%)

2014 3QFY15 4QFY15 2015 1QFY16 2QFY16 Oct-15 Nov-15 Dec-15 3QFY16 Jan-16 Feb-16 YTD

YTD private

players

Bajaj Allianz 2.2 1.8 2.1 1.9 1.3 1.3 1.8 1.6 1.7 1.7 1.5 1.6 1.5 3

Birla Sunlife 1.8 1.5 1.8 1.8 1.5 1.5 1.3 1.5 1.5 1.5 1.2 1.5 1.4 3

HDFC Standard Life 5.2 8.1 7.6 7.3 6.8 8.1 7.2 8.1 7.1 7.4 8.4 8.3 7.7 15

ICICI Prudential 7.2 13.5 11.0 11.3 11.7 13.0 13.0 11.2 11.1 11.7 13.0 11.1 12.1 23

Max Life 3.9 5.2 4.6 4.8 4.4 4.9 4.0 4.0 5.0 4.4 4.0 5.3 4.6 9

Met Life 1.3 1.9 1.9 1.8 2.1 2.2 1.7 1.9 2.6 2.1 1.7 2.0 2.1 4

Reliance Life 2.5 3.1 2.7 3.0 2.3 2.4 2.0 1.9 2.0 2.0 1.4 1.8 2.1 4

SBI Life 6.2 10.5 8.6 7.7 5.9 9.3 10.5 11.0 15.9 12.9 12.3 8.4 9.9 19

Private sector 37.9 54.8 51.4 48.9 46.0 53.1 51.0 51.7 57.9 54.2 53.1 51.5 51.7 100

LIC 62.1 45.2 48.6 51.1 54.0 46.9 48.8 48.0 41.9 45.8 46.6 48.2 48.1

India Insurance


Exhibit 5: Net inflows in equity mutual funds are slowing down Movement of funds to equity schemes of mutual funds, March fiscal year-ends, 2013-16YTD (Rs bn)

Source: AMFI, Kotak Institutional Equities

Inflows

Total Redemptions AUMs

2013 7 400 407 537 (129) 1,498

2014 32 402 434 511 (76) 1,656

1QFY15 21 254 275 175 100 2,108

2QFY15 31 367 398 160 238 2,476

3QFY15 58 280 338 175 162 3,195

4QFY15 44 382 426 220 206 3,451

Apr-15 6 148 154 48 106 3,451

May-15 13 128 140 39 101 3,652

Jun-15 1 178 179 57 123 3,723

1QFY16 20 454 474 144 329 3,723

Jul-15 1 137 138 77 61 3,936

Aug-15 11 156 166 75 92 3,827

Sep-15 0 125 126 71 54 3,865

2QFY16 12 418 430 223 207 3,865

Oct-15 5 134 139 76 63 3,968

Nov-15 2 121 123 59 64 4,027

Dec-15 4 130 134 98 36 4,057

3QFY16 11 385 396 233 163 4,057

Jan-16 0 109 109 80 29 3,844

Feb-16 1 107 109 84 25 3,566

Net New schemes Existing schemes

Insurance India


Exhibit 6: ICICI Prudential Life and HDFC Life have a high share of unit-linked business Contribution of various products to new business premium, March fiscal year-ends, 2012-15, 9MFY16 (% of total)


2012 2013 2014 2015 1QFY16 2QFY16 3QFY16

Bajaj Life

Unit linked policies 12 12 10 24 20 19 29

Participating policies 60 49 51 21 17 22 19

Non participating policies 28 39 38 54 63 59 52

Birla SL


Participating policies — 4 31 42 51 51 47


ICICI Prudential Life




HDFC Life




Max Life




SBI Life




Notes:

(1) Data for Birla Sun Life Insurance pertains to 1HFY16 and 9MFY16 instead of 2QFY16 and 3QFY16 respectively.

India Insurance


Private sector group business declines; single business remains strong for LIC

LIC continues to have high share of single premium (72% share of total premium). Private

players have generally been selective in this segment; the share of single premium was 33%

(29% in January 2016) of premium of private players. Bajaj Life and SBI Life have a higher

share of single premium in their overall business.

In the group business, the share of private players declined to 18% from 23% in January

2016. Bajaj Allianz, Birla SL and SBI Life lost market share during the month.

Exhibit 7: Share of single premium in overall business increased for private players Share of single premium to total premium, March fiscal year-ends, 2014-15, 2016YTD (%)


Exhibit 8: Private players gained market share in group business Market share in group business, March fiscal year-ends, 2014-15, 2016YTD (%)


2014 2015 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16

Bajaj Allianz 38 44 77 64 55 42 37 39 37 27 38 24 79

Birla Sunlife 3 2 3 2 1 2 2 5 2 3 4 2 3

HDFC Life 42 47 68 59 46 44 50 51 47 38 33 38 39

ICICI Prudential 13 14 21 47 19 12 30 62 10 13 14 16 21

Max Life 21 25 32 36 28 28 29 25 31 33 30 29 26

Reliance Life 5 5 28 5 5 6 6 7 8 7 3 10 8

SBI Life 41 40 63 57 29 30 45 37 30 24 27 24 30

Private sector 30 31 46 43 29 30 34 41 33 26 25 29 33

LIC 65 71 74 80 74 84 70 73 77 67 72 71 72

Total 56 59 65 68 61 72 57 62 66 54 56 57 60

2014 2015 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16

Bajaj Allianz 2.4 2.8 6.0 4.1 2.3 1.3 1.8 1.0 1.7 3.1 2.0 3.9 2.5

Birla Sunlife 1.4 2.0 0.9 2.6 2.2 1.2 2.8 1.9 1.6 1.3 0.6 1.5 0.9

HDFC Standard Life 2.5 3.8 5.4 3.2 3.1 1.8 4.9 4.2 2.7 3.6 2.4 3.6 3.5

ICICI Prudential 0.6 0.9 1.1 4.3 1.3 0.4 3.3 9.9 0.1 0.6 0.6 0.9 1.3

Max Life 0.3 0.4 0.4 0.3 0.4 0.2 0.4 0.4 0.3 0.5 0.5 0.5 0.4

Reliance Life 1.3 1.5 0.7 1.2 0.9 0.5 5.3 0.8 0.1 0.4 1.1 0.4 0.4

SBI Life 3.1 3.1 3.5 3.0 4.3 1.5 4.1 2.5 1.6 1.8 3.3 2.5 2.2

Private sector 17 21 25 26 20 11 29 26 15 17 16 23 18

LIC 83 79 75 74 80 89 71 74 85 83 83 77 82

Insurance India


Exhibit 9: High investment variance boosted RoEV in FY2015 Movement of embedded value, March fiscal year-end, 2015 (Rs bn)


Exhibit 10: Our RoEV forecast for Max Life already assumes higher volume growth in 4QFY16; this may have some upside RoEV movement for Max Life, March fiscal year-ends, 2015-16E (Rs bn)


Opening EV 76.0 32.0 69.9 117.8 44.4

New business value 1.8 1.0 7.4 6.4 4.6

Unwinding 5.5 NA 6.1 11.7 4.0

Operating variance 1.0 NA (0.3) 2.1 1.2

Assumption change 0.7 NA NA 1.6 NA

Expense overrun (2.6) NA (1.5) (3.7) (0.4)

Investment variance 10.6 NA 4.6 15.1 2.5

Economic assumption change — NA 3.5 (4.2)

Capital infusion — — (1.7) (9.8) (4.0)

Closing EV 93.0 33.0 88.0 137.0 52.4

RoEV (%) 22 1 26 16 18

Operating RoEV (A-%) 8 22 15 21

Methodology followed MCEV TEV MCEV IEV MCEV

Notes:

(a) Excludes investment variance and capital infusion.

Bajaj Allianz Birla SL HDFC Life ICICI Prudential Life Max Life

2015 1HFY16 2HFY16E 2016E Comments

Opening Embedded value (EV) 44.4 52.3 53.8 52.3

Methodology changes

Assumption change 0.3 0.3

NBV (before over-run) 4.6 1.6 2.5 4.1 Higher volume in 2H will lead to higher NBV

Acquisition expense overrun 0.0 (0.3) (0.4) (0.6)

Expected return in force 4.0 2.5 2.7 5.2 Unwinding at 10% for FY2016E

Operating variance 1.2 (0.2) (0.2) (0.4)

Tax changes

Investment variance 2.5 (0.2) (0.2) (0.4)

Dividend payout (4.0) (2.0) (1.0) (3.0) We assume lower dividends in 2H

Closing EV 52.3 53.8 57.6 57.6

EVOP 9.8 3.7 4.9 8.7

RoEV (%) 17.8 5.7 14.0 10.1

Operating RoEV (%) 21.1 14.3 18.4 16.6

For Private Circulation Only.

IIP continues to decline

Industrial production continued in the contraction mode, printing (-)1.5% in January as against

(-)1.2% in December (Kotak: (-)1.5%, Consensus: -0.5%). The contraction was expected on the

back of weak exports and auto production data for the month in consideration. However, even

on a sequential basis, the momentum has worsened further into the negative territory. Sector-

wise, manufacturing contributed to the downtrend, contracting further by 2.8% after

contracting by 2.2% in December. Mining sector slowed down to 1.2%. Electricity, on the

other hand, picked up to 6.6% from 3.2% in December. IIP has averaged 2.8% in FY2016 so

far as against 2.7% for the same period last year, implying limited recovery in industrial growth

over the last year.

Capital goods party to the sharp deceleration

Capital goods contracted for the third consecutive month by 20.4% after ~19% contraction

reported in December. The sector is marred by extreme volatilities, with components such as

‘insulated cable, rubber’ (wt: 0.12%) contracting sharp 88% and contributing ~(-)3.2 ppt to IIP

growth in January. Ex-capital goods, IIP grew 1.2%, slowing from 1.5% in December. FYTD16,

capital goods sector growth has averaged 0.1% (6.2% FYTD15).

Consumer durables also moderated to 5.8% from 16.4% in December and 23.6% in 3QFY16.

More ominously, the underlying momentum has also slowed substantially. Similarly, the non-

durables sector declined further by 3.1% after contracting 3.0% in December. Overall,

consumer goods sector was flat on a year-on-year basis and has averaged 3.8% in FY2016 so

far as against (-)4.6% for the same period last year.

Economy IIP

Industrial production remains dismal. IIP contracted for the third consecutive month

in January, despite likely industrial restructuring in southern India post floods. Within IIP

subcomponents, manufacturing continues to drag while mining activity moderated and

electricity showed some recovery. IIP growth has averaged 2.8% in FY2016 so far and is

likely to remain sluggish for the next few months. This further lends credence to our

view that growth slack and fiscal consolidation by the government will lead to RBI being

further accommodative. We expect 50 bps cut in CY2016.

INDIA

MARCH 14, 2016

UPDATE

BSE-30: 24,718

QUICK NUMBERS

January IIP at

(-)1.5%;

manufacturing at

(-)2.8%

Capital goods

contracts by 20.4%

Economy India

KOTAK ECONOMIC RESEARCH 25

Exhibit 1: IIP shows signs of traction Trend growth in headline IIP and IIP ex-capital goods (%3M/3M, SAAR)

Source: CEIC, Kotak Economic Research

(15)

(10)

(5)

0

5

10

15

20

Jan-1

2

Apr-

12

Jul-12

Oct

-12

Jan-1

3

Apr-

13

Jul-13

Oct

-13

Jan-1

4

Apr-

14

Jul-14

Oct

-14

Jan-1

5

Apr-

15

Jul-15

Oct

-15

Jan-1

6

IIP (% 3m/3m,saar) IIP ex capital goods (% 3m/3m,saar)

KO

TA

K IN

STIT

UTIO

NA

L EQ

UIT

IES R

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RC

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Da

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016

Kotak Institutional Equities: Valuation summary of KIE Universe stocks

Source: Company, Bloomberg, Kotak Institutional Equities estimates

Target O/S

Price (Rs) price Upside Mkt cap. shares EPS (Rs) EPS growth (%) PER (X) EV/EBITDA (X) ADVT-3mo

Company Rating 11-Mar-16 (Rs) (%) (Rs mn) (US$ mn) (mn) 2016E 2017E 2018E 2016E 2017E 2018E 2016E 2017E 2018E 2016E 2017E 2018E 2016E 2017E 2018E 2016E 2017E 2018E 2016E 2017E 2018E (US$ mn)

Automobiles

Amara Raja Batteries SELL 894 735 (17.8) 152,732 2,274 171 30.4 34.3 39.0 26.1 12.9 13.5 29.4 26.0 22.9 17.6 15.2 13.4 7.3 6.0 5.0 0.7 0.8 0.9 27.4 25.3 23.8 4.0

Apollo Tyres BUY 168 225 34.3 85,262 1,269 509 21.4 22.6 23.8 (1.1) 5.9 5.1 7.8 7.4 7.0 4.2 4.5 4.5 1.4 1.2 1.0 1.3 1.3 1.3 19.6 17.5 15.9 6.7

Ashok Leyland ADD 97 95 (2.2) 276,335 4,114 2,846 3.4 4.9 6.3 277.9 41.9 28.8 28.3 19.9 15.5 14.8 11.7 9.5 4.8 4.2 3.6 1.1 1.5 1.9 18.0 22.4 24.8 14.4

Bajaj Auto ADD 2,326 2,600 11.8 673,039 10,019 289 128.2 141.8 159.9 17.6 10.6 12.7 18.1 16.4 14.5 13.8 13.0 11.7 5.3 4.5 3.9 2.2 2.4 2.7 31.8 29.8 28.8 10.2

Balkrishna Industries BUY 600 725 20.8 57,995 863 97 55.7 53.7 65.8 14.0 (3.6) 22.5 10.8 11.2 9.1 6.6 6.3 4.8 2.1 1.8 1.5 0.4 0.5 0.5 21.3 17.1 17.8 0.3

Bharat Forge BUY 816 955 17.0 190,065 2,829 237 29.3 36.3 47.5 (8.9) 24.0 30.8 27.9 22.5 17.2 14.8 12.4 9.6 4.9 4.2 3.5 0.7 0.9 1.1 18.7 20.0 22.2 9.6

Eicher Motors SELL 20,004 12,000 (40.0) 543,332 8,088 27 470.6 587.6 677.4 107.3 24.9 15.3 42.5 34.0 29.5 22.8 20.0 17.3 14.7 10.4 7.8 0.1 0.1 0.1 41.1 35.9 30.3 16.1

Exide Industries REDUCE 132 120 (9.0) 112,073 1,668 850 7.1 7.3 7.8 10.3 2.8 7.4 18.6 18.1 16.9 10.8 10.8 9.9 2.5 2.4 2.2 1.9 1.9 1.9 14.2 13.5 13.4 3.0

Hero Motocorp ADD 2,813 3,050 8.4 561,791 8,363 200 155.8 176.9 196.5 22.5 13.5 11.1 18.1 15.9 14.3 12.6 11.5 10.4 7.2 6.1 5.2 2.8 3.1 3.5 43.2 41.5 39.2 14.5

Mahindra CIE Automotive BUY 180 215 19.6 58,120 865 323 4.4 8.5 10.8 (41.1) 94.8 25.9 41.0 21.0 16.7 18.0 10.3 8.5 2.9 2.5 2.2 — — — 7.3 12.8 14.1 0.6

Mahindra & Mahindra ADD 1,221 1,325 8.6 758,043 11,284 569 58.2 69.9 77.9 7.3 20.0 11.5 21.0 17.5 15.7 15.0 12.8 11.3 3.1 2.8 2.5 1.2 1.4 1.6 15.7 16.9 16.7 17.7

Maruti Suzuki BUY 3,641 4,000 9.9 1,099,934 16,374 302 151.3 199.8 232.2 23.2 32.0 16.2 24.1 18.2 15.7 12.7 11.1 9.7 4.0 3.5 3.0 0.8 1.1 1.3 18.0 20.5 20.4 50.8

Minda Corp. BUY 97 110 13.9 20,220 301 209 4.7 6.2 8.0 13.1 31.4 28.6 20.4 15.5 12.1 10.3 7.9 6.4 3.6 3.0 2.5 0.6 0.6 0.7 19.3 21.1 22.3 0.2

Motherson Sumi Systems SELL 245 220 (10.3) 324,398 4,829 1,323 9.3 11.5 14.0 27.4 23.4 21.6 26.3 21.3 17.5 9.9 7.7 6.2 7.8 6.3 5.1 1.2 1.4 1.7 33.1 32.9 32.4 11.6

Suprajit Engineering BUY 132 175 32.8 17,310 258 120 6.3 7.9 9.3 49.9 25.0 18.4 21.0 16.8 14.2 14.0 10.1 8.8 5.3 4.2 3.5 0.8 1.2 1.4 27.9 28.0 26.9 0.1

Tata Motors BUY 354 450 27.0 1,152,377 17,155 3,395 34.1 38.8 54.0 (18.2) 13.6 39.1 10.4 9.1 6.6 4.6 4.0 3.4 1.7 1.4 1.2 — — — 18.0 16.6 19.3 52.6

TVS Motor SELL 288 230 (20.1) 136,801 2,036 475 8.1 13.6 15.8 34.5 67.4 16.8 35.5 21.2 18.2 18.7 13.2 11.4 8.5 6.6 5.2 0.7 1.0 1.1 26.3 35.0 31.9 6.5

WABCO India BUY 5,433 7,000 28.8 103,057 1,534 19 110.3 163.7 186.3 73.4 48.3 13.8 49.2 33.2 29.2 32.4 21.2 18.2 9.8 7.8 6.3 0.2 0.3 0.3 21.9 26.2 23.9 0.6

Automobiles Attractive 6,322,883 94,124 4.8 18.7 23.0 18.5 15.6 12.7 9.3 8.0 6.9 3.5 3.0 2.5 1.0 1.2 1.3 18.9 19.0 19.7 219.6

Banks/Financial Institutions

Axis Bank BUY 413 540 30.8 982,981 14,633 2,371 33.6 36.3 40.9 8.2 7.9 12.8 12.3 11.4 10.1 — — — 1.9 1.7 1.5 1.2 1.3 1.5 16.6 15.7 15.6 79.7

Bajaj Finserv ADD 1,646 1,965 19.4 261,930 3,899 159 111.1 140.6 161.0 4.5 26.6 14.5 14.8 11.7 10.2 — — — 1.9 1.7 1.7 0.8 0.8 0.8 14.5 15.3 16.4 1.4

Bank of Baroda ADD 141 120 (14.7) 324,195 4,826 2,449 (14.6) 4.5 10.2 (195.5) 130.7 128.4 (9.6) 31.4 13.7 — — — 0.9 0.9 0.8 (2.1) 0.7 1.5 (9.3) 2.9 6.3 23.1

Bank of India ADD 93 110 17.9 75,752 1,128 813 (40.0) 15.6 33.0 (255.9) 138.9 111.8 (2.3) 6.0 2.8 — — — 0.2 0.2 0.2 (8.4) 3.3 6.9 (11.6) 4.4 8.9 5.9

Canara Bank REDUCE 182 190 4.3 98,960 1,473 515 20.7 43.8 60.0 (63.6) 111.7 37.0 8.8 4.2 3.0 — — — 0.3 0.3 0.2 2.1 4.4 6.1 3.2 6.5 8.4 9.6

Cholamandalam ADD 670 730 9.0 104,599 1,557 155 34.5 42.0 51.3 14.5 21.6 22.2 19.4 16.0 13.1 — — — 2.9 2.5 2.2 0.8 1.0 1.2 17.1 16.8 17.9 0.7

City Union Bank BUY 85 110 28.8 51,086 760 597 7.8 8.0 9.2 18.5 2.3 14.4 10.9 10.6 9.3 — — — 1.7 1.5 1.3 1.5 1.6 1.8 16.2 14.7 14.9 0.6

DCB Bank SELL 76 100 31.8 21,574 321 282 5.3 3.6 6.6 (25.8) (32.0) 83.3 14.3 21.1 11.5 — — — 1.2 1.2 1.1 — — — 9.3 5.8 9.9 1.3

Dewan Housing Finance BUY 184 230 25.3 53,574 798 291 27.9 32.8 40.1 (41.4) 17.5 22.4 6.6 5.6 4.6 — — — 1.0 0.9 0.8 1.6 1.9 2.4 16.1 16.5 17.4 3.6

Federal Bank BUY 49 75 54.6 83,316 1,240 1,713 3.8 5.7 7.0 (34.5) 48.4 22.4 12.6 8.5 6.9 — — — 1.0 0.9 0.8 1.6 2.4 2.9 8.2 11.3 12.7 3.3

HDFC ADD 1,161 1,325 14.2 1,832,812 27,284 1,575 43.9 66.2 59.7 8.6 50.9 (9.8) 26.5 17.5 19.4 — — — 5.4 4.8 4.3 1.6 2.4 2.1 20.5 27.0 21.3 48.6

HDFC Bank ADD 1,029 1,150 11.8 2,598,592 38,683 2,507 49.1 59.1 71.8 20.4 20.4 21.6 21.0 17.4 14.3 — — — 3.6 3.1 2.7 0.9 1.1 1.4 18.4 19.2 20.0 23.0

ICICI Bank BUY 214 340 59.0 1,243,128 18,506 5,798 18.7 20.8 25.0 (2.9) 11.4 20.1 11.4 10.3 8.5 — — — 1.4 1.3 1.2 2.6 2.9 3.5 12.9 13.2 14.5 68.0

IDFC BUY 39 70 80.6 61,768 919 1,593 (4.1) 5.1 6.7 (138.0) 224.2 32.9 (9.5) 7.7 5.8 — — — 0.6 0.5 0.5 (5.3) 1.4 1.6 (4.5) 11.2 14.2 3.0

IDFC Bank BUY 48 70 47.2 161,319 2,401 3,389 1.5 2.7 4.0 - 85.4 47.7 32.5 17.5 11.9 — — — 1.1 1.1 1.0 0.6 1.1 1.7 6.7 6.6 9.2 -

IIFL Holdings BUY 186 240 29.0 58,680 874 310 16.6 19.5 20.2 14.8 17.4 3.9 11.2 9.6 9.2 — — — 1.7 1.5 1.2 0.0 0.0 0.0 18.9 18.1 16.8 0.3

IndusInd Bank ADD 927 1,040 12.2 551,341 8,207 589 37.4 46.9 56.9 10.4 25.4 21.2 24.8 19.8 16.3 — — — 3.1 2.7 2.4 0.5 0.6 0.7 16.3 15.0 15.9 20.8

J&K Bank BUY 62 100 60.8 30,153 449 485 9.7 14.2 15.5 (7.3) 46.1 8.8 6.4 4.4 4.0 — — — 0.5 0.4 0.4 3.1 4.6 5.0 7.5 10.2 10.3 0.7

Karur Vysya Bank BUY 410 580 41.3 49,608 738 122 53.5 61.9 72.0 42.9 15.6 16.3 7.7 6.6 5.7 — — — 1.1 1.0 0.9 3.3 3.8 4.4 14.5 15.1 15.8 0.9

L&T Finance Holdings ADD 55 72 31.9 95,736 1,425 1,750 5.0 5.3 6.6 0.4 6.4 24.6 11.0 10.3 8.3 — — — 1.3 1.1 1.0 2.2 1.1 1.6 12.7 12.1 13.2 1.5

LIC Housing Finance ADD 462 515 11.4 233,255 3,472 505 36.8 39.9 46.0 22.5 8.4 15.4 12.6 11.6 10.0 — — — 2.6 2.2 1.9 1.4 1.5 1.7 19.9 18.5 20.3 14.9

Magma Fincorp ADD 83 90 8.5 19,645 292 236 8.1 9.7 12.1 (7.7) 19.3 25.4 10.2 8.6 6.8 — — — 0.8 0.8 0.7 1.0 1.7 2.2 9.6 9.7 10.8 0.1

Mahindra & Mahindra Financial BUY 229 265 15.8 130,190 1,938 564 10.8 15.2 20.9 (27.1) 41.3 37.3 21.3 15.1 11.0 — — — 2.1 1.9 1.7 1.2 1.7 2.4 10.3 13.4 16.6 3.5

Max Financial Services ADD 334 340 1.7 89,239 1,328 266 7.7 4.5 3.0 - (42.0) (33.3) 43.4 74.9 112.3 — — — 5.3 5.2 5.1 1.7 1.0 0.7 - 7.0 4.6 4.5

Muthoot Finance BUY 176 225 27.6 70,215 1,045 397 18.5 22.0 27.2 9.8 18.9 23.4 9.5 8.0 6.5 — — — 1.3 1.1 1.0 3.2 3.7 4.6 13.8 15.0 16.7 0.5

Oriental Bank of Commerce ADD 87 120 37.5 26,177 390 300 8.0 20.4 29.5 (51.6) 153.7 45.0 10.9 4.3 3.0 — — — 0.2 0.2 0.2 1.8 4.6 6.7 1.7 4.3 6.0 5.2

PFC REDUCE 167 180 7.8 220,513 3,283 1,319 48.2 40.8 41.7 6.6 (15.4) 2.4 3.5 4.1 4.0 — — — 0.6 0.5 0.5 5.8 4.9 5.0 18.3 13.7 12.7 7.5

Punjab National Bank REDUCE 82 100 22.2 160,720 2,393 1,855 6.5 18.4 22.3 (60.8) 183.7 21.5 12.6 4.5 3.7 — — — 0.4 0.4 0.3 1.6 4.5 5.5 3.1 8.5 9.6 13.3

Rural Electrification Corp. REDUCE 166 185 11.2 164,264 2,445 987 59.7 45.5 35.9 12.1 (23.8) (21.1) 2.8 3.7 4.6 — — — 0.6 0.5 0.5 7.7 5.9 4.6 21.7 14.4 10.4 7.9

Shriram City Union Finance ADD 1,500 1,625 8.3 98,891 1,472 66 99.1 118.2 140.1 17.0 19.2 18.5 15.1 12.7 10.7 — — — 2.1 1.8 1.6 0.7 0.9 1.0 14.6 15.3 15.8 0.4

Shriram Transport BUY 927 1,050 13.3 210,241 3,130 223 62.7 72.4 88.2 13.1 15.4 21.8 14.8 12.8 10.5 — — — 2.1 1.8 1.6 0.9 1.1 1.3 14.5 15.1 16.1 7.1

SKS Microfinance ADD 527 560 6.3 67,070 998 126 24.2 31.7 40.7 62.3 30.8 28.3 21.7 16.6 13.0 — — — 4.9 3.8 2.9 — — — 25.5 25.7 25.5 14.9

State Bank of India BUY 180 220 22.2 1,398,076 20,812 7,566 14.5 18.6 25.0 (17.5) 28.5 34.2 12.4 9.7 7.2 — — — 1.0 0.9 0.8 2.1 2.2 2.3 8.2 9.8 12.0 68.8

Union Bank ADD 124 140 12.9 85,208 1,268 687 19.9 29.3 42.4 (29.0) 46.9 44.8 6.2 4.2 2.9 — — — 0.4 0.4 0.3 3.0 4.3 6.3 7.0 9.4 12.4 9.4

YES Bank ADD 801 860 7.4 336,526 5,010 418 59.6 66.6 74.4 24.2 11.6 11.8 13.4 12.0 10.8 — — — 2.5 2.1 1.8 1.4 1.6 1.7 19.7 18.9 18.3 44.6

Banks/Financial Institutions Attractive 12,051,335 179,399 (15.7) 36.6 19.4 15.8 11.6 9.7 1.5 1.4 1.3 1.4 1.9 2.1 9.7 12.1 13.1 498.6

Price/BV (X) Dividend yield (%) RoE (%)

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Cement

ACC SELL 1,228 1,280 4.2 230,542 3,432 188 39.6 55.5 79.4 (13.3) 40.1 43.0 31.0 22.1 15.5 18.6 11.7 8.1 2.7 2.6 2.3 1.6 1.9 1.9 8.9 11.9 15.6 3.6

Ambuja Cements SELL 201 190 (5.3) 311,466 4,637 1,550 5.6 8.3 10.4 (34.6) 49.2 25.4 36.0 24.2 19.3 18.1 12.2 9.4 2.9 2.7 2.5 2.1 2.1 2.6 8.0 11.6 13.7 5.9

Dalmia Bharat BUY 723 850 17.6 58,767 875 81 16.1 68.7 96.8 1,322.1 327.6 41.0 45.0 10.5 7.5 9.0 5.9 4.5 1.8 1.6 1.3 0.2 0.3 0.3 4.2 16.1 19.1 0.3

Grasim Industries ADD 3,581 4,200 17.3 334,272 4,976 93 242.1 314.2 406.5 26.9 29.7 29.4 14.8 11.4 8.8 7.4 5.3 3.8 1.3 1.2 1.0 0.5 0.5 0.5 9.2 10.7 12.4 3.2

India Cements REDUCE 75 80 6.8 23,008 342 307 4.6 7.6 11.0 4,391.4 63.4 45.2 NM 9.9 6.8 7.0 5.9 4.9 0.6 0.6 0.6 2.8 2.8 2.8 4.0 6.2 8.5 4.9

J K Cement BUY 584 640 9.6 40,810 608 70 4.7 34.6 64.6 (74.1) 638.5 86.7 124.6 16.9 9.0 13.5 8.3 6.1 2.5 2.3 1.8 0.9 0.9 0.9 2.0 14.2 22.4 0.2

JK Lakshmi Cement BUY 295 325 10.1 34,742 517 118 (2.3) 15.5 28.0 (115.6) 769.7 81.4 (127.9) 19.1 10.5 20.3 10.1 6.5 2.7 2.4 2.0 0.7 0.7 0.7 (2.1) 13.5 20.9 0.3

Orient Cement BUY 139 160 15.0 28,497 424 205 2.7 8.4 16.5 (71.5) 211.0 96.3 51.4 16.5 8.4 22.8 9.2 6.0 2.9 2.6 2.0 1.4 1.4 1.4 5.7 16.5 27.1 0.2

Shree Cement SELL 11,259 9,125 (19.0) 392,227 5,839 35 175.3 315.3 434.8 32.3 79.8 37.9 64.2 35.7 25.9 21.6 14.2 10.5 6.8 5.8 4.8 0.2 0.2 0.2 11.0 17.5 20.2 1.8

UltraTech Cement SELL 2,994 2,450 (18.2) 821,746 12,233 274 69.4 105.9 150.6 (5.5) 52.5 42.3 43.1 28.3 19.9 20.7 14.9 11.1 3.9 3.5 3.0 0.3 0.3 0.3 9.5 13.0 16.1 12.9

Cement Cautious 2,276,077 33,882 (2.8) 58.6 38.9 33.9 21.4 15.4 14.3 9.9 7.4 2.7 2.5 2.2 0.8 0.8 0.8 8.1 11.6 14.2 33.4

Consumer products

Asian Paints REDUCE 898 800 (10.9) 861,695 12,827 959 19.0 22.4 26.5 28.0 17.8 18.5 47.3 40.2 33.9 30.1 25.2 21.2 15.4 13.0 11.0 0.9 1.1 1.3 35.3 35.2 35.2 14.8

Bajaj Corp. BUY 398 495 24.4 58,676 873 148 17.1 19.4 21.8 15.0 13.5 12.2 23.2 20.5 18.2 19.6 16.3 13.8 12.0 10.9 9.9 2.9 3.1 3.8 51.6 55.8 56.9 0.4

Britannia Industries BUY 2,816 3,300 17.2 337,864 5,030 120 71.4 87.5 109.1 57.9 22.6 24.6 39.4 32.2 25.8 26.0 21.2 17.0 19.5 14.8 11.5 0.9 1.2 1.6 57.5 52.3 50.1 8.8

Coffee Day Enterprises BUY 225 270 19.8 46,412 691 206 (0.9) 3.4 6.9 81.4 458.2 103.3 (237.5) 66.3 32.6 14.3 12.5 10.8 2.1 2.1 1.9 - - - (1.4) 3.2 6.1 1.1

Colgate-Palmolive (India) ADD 814 910 11.9 221,260 3,294 272 21.9 24.3 27.6 6.6 10.8 13.7 37.1 33.5 29.5 22.9 20.3 17.8 23.5 19.3 16.1 1.6 1.7 2.0 69.6 63.3 59.6 5.1

Dabur India ADD 250 280 12.1 439,521 6,543 1,759 7.1 8.0 9.2 19.0 12.9 14.3 35.1 31.1 27.2 29.0 25.3 21.7 10.8 9.1 7.7 1.0 1.2 1.5 33.7 31.7 30.6 4.9

GlaxoSmithKline Consumer ADD 5,675 6,500 14.5 238,659 3,553 42 169.3 192.4 218.9 22.0 13.6 13.7 33.5 29.5 25.9 22.9 19.7 16.9 9.4 8.1 7.0 1.1 1.3 1.6 30.6 29.4 28.8 1.8

Godrej Consumer Products ADD 1,300 1,285 (1.2) 442,830 6,592 340 33.4 39.3 46.4 26.9 17.7 18.1 39.0 33.1 28.0 27.6 23.5 19.6 8.7 7.3 6.2 0.5 0.7 0.8 24.2 24.0 24.0 4.7

Hindustan Unilever REDUCE 852 825 (3.1) 1,842,752 27,432 2,164 18.7 21.5 24.2 7.3 14.9 12.8 45.6 39.7 35.2 31.6 27.4 24.1 46.2 43.7 42.0 1.8 2.0 2.3 104.7 113.2 121.8 16.9

ITC BUY 321 370 15.2 2,582,692 38,447 8,052 12.2 13.8 15.7 2.4 12.8 14.0 26.3 23.3 20.5 17.2 15.1 13.1 7.6 7.0 6.4 2.2 2.5 3.0 27.8 28.7 31.5 38.2

Jubilant Foodworks REDUCE 1,128 1,000 (11.4) 74,188 1,104 66 15.8 24.1 33.6 (6.1) 51.8 39.6 71.2 46.9 33.6 26.2 19.1 14.5 10.3 8.8 7.4 0.3 0.4 0.6 15.3 20.4 24.1 7.1

Jyothy Laboratories NR 287 — — 52,025 774 181 8.2 10.0 11.3 42.7 21.6 12.9 35.0 28.8 25.5 22.6 19.4 16.1 6.0 6.2 5.5 1.4 1.4 1.7 23.5 26.3 22.9 0.5

Manpasand Beverages ADD 436 525 20.4 21,824 325 50 11.2 17.6 22.9 40.6 57.2 29.7 38.9 24.7 19.1 18.0 13.2 10.2 3.6 3.2 2.8 0.3 0.6 0.9 14.0 13.6 15.6 0.2

Marico REDUCE 246 220 (10.6) 317,447 4,726 1,290 5.6 6.9 7.9 25.7 22.7 14.5 43.9 35.8 31.3 29.6 24.0 20.9 14.2 11.4 9.4 0.8 0.9 1.1 35.6 35.4 33.1 9.0

Nestle India REDUCE 5,163 4,800 (7.0) 497,809 7,411 96 94.4 119.9 143.2 (22.7) 26.9 19.5 54.7 43.1 36.1 30.3 23.9 20.5 17.7 15.5 13.8 0.9 1.3 1.6 32.2 38.3 40.4 3.5

Page Industries SELL 11,367 10,000 (12.0) 126,786 1,887 11 214.2 269.3 325.5 21.9 25.7 20.9 53.1 42.2 34.9 33.0 26.8 22.1 24.6 18.3 13.8 0.7 0.8 0.9 53.0 49.7 45.0 2.3

PC Jeweller NR 358 — (100.0) 64,091 954 179 25.2 30.6 36.8 19.1 21.7 20.2 14.2 11.7 9.7 8.1 6.2 5.1 2.7 2.3 1.9 1.0 1.3 1.7 20.6 21.1 21.3 2.0

Pidilite Industries REDUCE 604 570 (5.7) 309,835 4,612 513 14.3 17.0 19.6 41.8 18.5 15.5 42.2 35.6 30.8 26.3 22.5 19.2 11.2 9.3 7.8 0.7 0.8 1.0 29.1 28.5 27.5 4.7

Speciality Restaurants REDUCE 82 105 28.4 3,841 57 47 1.2 2.3 3.5 (39.0) 83.8 55.3 66.6 36.2 23.3 11.7 8.3 6.2 1.2 1.2 1.1 1.2 1.2 1.2 1.9 3.3 5.0 0.1

Tata Global Beverages BUY 116 135 16.5 73,116 1,088 631 4.7 5.8 6.8 (13.8) 24.0 16.4 24.7 19.9 17.1 11.6 10.0 8.7 1.3 1.3 1.2 1.9 1.9 2.2 5.3 6.4 7.2 2.9

Titan Company REDUCE 346 320 (7.5) 307,174 4,573 888 8.7 10.8 12.2 (6.5) 24.1 13.6 39.8 32.1 28.3 27.8 22.6 19.2 8.6 7.3 6.3 0.8 0.9 1.1 23.2 24.7 24.0 7.6

United Breweries SELL 798 750 (6.1) 211,101 3,143 264 12.0 15.0 19.0 22.3 25.0 26.4 66.4 53.1 42.0 28.0 23.7 19.9 10.0 8.7 7.4 0.2 0.3 0.4 16.1 17.5 19.0 2.5

United Spirits ADD 2,385 2,900 21.6 346,607 5,160 145 22.8 36.7 56.2 304.5 60.9 53.4 NM 65.1 42.4 36.4 29.3 22.3 20.1 12.4 9.2 0.2 0.4 0.4 27.8 23.5 24.9 11.4

Consumer products Cautious 9,478,206 141,095 11.5 17.3 16.3 37.0 31.6 27.1 23.8 20.3 17.3 10.9 9.6 8.5 1.4 1.6 1.9 29.6 30.4 31.2 150.6

Energy

Aban Offshore RS 188 — — 10,979 163 58 28.4 23.8 35.5 (68.3) (16.0) 48.9 6.6 7.9 5.3 7.5 7.3 6.7 0.2 0.2 0.2 3.1 3.2 3.2 3.0 2.6 3.9 4.6

BPCL BUY 804 960 19.5 581,107 8,651 723 91.1 92.9 97.1 29.6 2.0 4.5 8.8 8.6 8.3 5.8 5.3 4.4 2.1 1.8 1.6 2.7 2.8 2.9 26.6 22.8 20.4 18.4

Cairn India RS 147 — — 275,511 4,101 1,875 7.7 5.9 8.9 (78.0) (22.5) 50.0 19.2 24.8 16.5 6.8 6.5 5.0 0.5 0.5 0.5 1.7 1.7 3.1 2.4 1.9 2.8 7.1

Castrol India SELL 375 385 2.6 185,609 2,763 495 12.0 13.1 14.0 25.5 8.7 6.8 31.2 28.7 26.9 20.0 18.9 17.7 32.2 29.5 27.8 2.4 2.7 2.9 111.0 107.4 106.6 1.7

GAIL (India) ADD 339 400 17.8 430,585 6,410 1,268 15.8 24.1 32.4 (39.6) 52.7 34.5 21.5 14.1 10.5 12.8 9.2 7.3 1.4 1.3 1.2 1.5 1.8 2.7 6.7 9.7 12.1 8.7

GSPL ADD 127 145 13.8 71,798 1,069 563 8.0 10.2 11.0 23.8 27.0 7.9 15.9 12.5 11.6 8.1 6.3 5.9 1.8 1.7 1.6 1.6 2.4 4.3 11.9 13.9 13.9 1.2

HPCL BUY 729 870 19.4 246,707 3,673 339 102.0 106.8 105.4 26.5 4.7 (1.3) 7.1 6.8 6.9 5.8 5.2 5.0 1.4 1.2 1.1 4.3 4.5 4.4 20.2 18.7 16.5 15.2

Indraprastha Gas ADD 529 585 10.6 74,074 1,103 140 33.6 36.8 40.1 7.5 9.5 9.1 15.7 14.4 13.2 9.1 8.1 7.2 3.1 2.7 2.4 1.2 1.4 1.8 20.9 20.0 19.3 8.9

IOCL BUY 386 480 24.4 936,947 13,948 2,428 52.9 56.3 58.2 207.6 6.3 3.3 7.3 6.9 6.6 5.1 4.0 3.8 1.2 1.1 1.0 4.6 4.7 4.6 17.7 16.8 15.6 8.5

ONGC SELL 205 175 (14.7) 1,754,731 26,121 8,556 18.9 14.5 20.2 (14.4) (23.5) 39.4 10.8 14.1 10.1 4.5 5.0 4.2 0.9 0.9 0.9 2.9 2.9 3.7 8.8 6.5 8.7 17.1

Oil India SELL 311 300 (3.5) 186,893 2,782 601 35.5 29.0 33.1 (15.1) (18.3) 14.4 8.8 10.7 9.4 4.8 6.0 5.3 0.8 0.8 0.8 4.5 3.9 4.2 9.7 7.6 8.3 3.4

Petronet LNG ADD 251 275 9.6 188,100 2,800 750 11.6 15.5 23.1 17.6 34.2 48.9 21.7 16.1 10.8 13.7 10.6 7.2 2.9 2.6 2.2 1.0 1.4 2.4 15.6 17.1 22.1 7.0

Reliance Industries ADD 1,015 1,130 11.4 2,984,996 44,435 3,239 84.7 89.0 100.2 20.7 5.0 12.7 12.0 11.4 10.1 9.9 8.4 6.6 1.4 1.2 1.1 1.0 1.2 1.3 12.0 11.4 11.7 73.7

Energy Attractive 7,928,035 118,019 8.8 (0.7) 16.0 10.6 10.7 9.2 6.8 6.3 5.2 1.2 1.1 1.0 2.3 2.4 2.8 11.0 10.1 10.9 175.5


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Target O/S



Industrials

ABB SELL 1,143 800 (30.0) 242,307 3,607 212 14.2 21.2 28.4 31.2 49.8 34.1 80.8 53.9 40.2 34.0 27.5 22.5 8.1 7.3 6.4 0.3 0.4 0.6 10.3 14.2 17.0 1.8

BHEL SELL 104 100 (3.6) 253,816 3,778 2,448 (2.8) 5.0 10.3 (148.0) 280.5 105.2 (37.2) 20.6 10.0 (10.7) 4.7 0.5 0.8 0.7 0.7 (0.6) 1.0 2.1 (2.0) 3.6 7.1 12.2

Carborundum Universal ADD 181 185 2.2 34,094 508 188 6.9 10.2 12.7 33.3 47.2 25.1 26.2 17.8 14.3 10.9 8.6 7.2 2.8 2.5 2.2 0.7 1.0 1.2 11.3 14.9 16.5 0.1

Crompton Greaves NR 146 - (100.0) 91,756 1,366 627 (3.2) (0.4) 3.1 (208.6) 87.3 854.1 (45.9) (360.0) 47.7 30.3 25.4 25.8 2.4 2.0 1.9 0.9 0.2 0.3 (5.2) (0.6) 4.0 15.4

Cummins India REDUCE 847 875 3.3 234,899 3,497 277 28.1 30.9 36.1 3.8 9.8 17.0 30.1 27.5 23.5 28.3 25.1 21.2 7.3 6.6 5.9 1.7 1.8 2.1 25.5 25.2 26.5 2.7

Havells India REDUCE 291 285 (2.0) 181,630 2,704 624 7.7 9.2 10.7 3.1 20.3 16.0 37.9 31.5 27.2 22.6 19.3 17.0 6.9 6.2 5.5 1.1 1.3 1.5 19.1 20.7 21.5 8.8

Kalpataru Power Transmission BUY 196 250 27.8 30,025 447 153 9.3 13.3 17.8 18.5 43.3 33.6 21.1 14.7 11.0 7.7 6.7 6.0 1.3 1.2 1.1 0.8 0.8 0.8 6.3 8.4 10.4 0.4

KEC International ADD 118 140 19.1 30,208 450 257 7.9 11.5 14.9 26.2 45.3 29.4 14.9 10.2 7.9 7.5 6.1 5.3 2.0 1.7 1.5 1.0 1.4 1.8 14.3 18.2 20.0 1.2

L&T ADD 1,186 1,300 9.6 1,104,408 16,441 930 41.5 53.6 66.0 18.4 29.0 23.2 28.5 22.1 18.0 18.2 15.4 13.1 2.9 2.6 2.4 1.2 1.2 1.2 10.4 12.5 14.0 47.2

Siemens SELL 1,033 750 (27.4) 367,854 5,476 356 18.3 23.3 29.7 62.4 27.4 27.4 56.5 44.4 34.8 32.4 26.2 20.7 6.6 6.0 5.4 0.5 0.7 0.9 12.2 14.2 16.4 5.0

Thermax REDUCE 755 850 12.6 89,969 1,339 119 26.2 24.0 31.0 20.5 (8.5) 29.3 28.8 31.5 24.4 17.9 19.5 14.9 3.8 3.5 3.2 0.9 0.8 0.9 13.8 11.6 13.7 0.7

Voltas ADD 247 270 9.2 81,811 1,218 331 9.3 11.3 13.7 (9.1) 21.7 20.8 26.6 21.9 18.1 21.8 17.9 14.0 3.5 3.2 2.9 0.9 1.4 1.7 13.9 15.3 16.7 6.4

Industrials Cautious 2,742,777 40,830 (18.2) 63.1 35.6 43.6 26.8 19.7 21.6 15.6 12.4 2.7 2.6 2.3 0.9 1.0 1.3 6.3 9.5 11.9 101.8

Infrastructure

Adani Port and SEZ BUY 231 260 12.5 478,804 7,128 2,084 12.5 15.8 13.6 12.4 26.4 (13.9) 18.5 14.7 17.0 14.3 11.9 10.8 3.7 3.0 2.7 0.6 0.7 1.0 21.9 22.7 16.6 13.3

Ashoka Buildcon BUY 186 230 23.6 34,828 518 188 5.4 7.0 6.2 5.8 29.7 (11.8) 34.3 26.4 30.0 10.2 9.5 8.6 1.8 1.7 1.7 0.8 1.0 1.2 6.2 6.7 5.7 0.4

Container Corporation ADD 1,148 1,400 22.0 223,743 3,331 195 44.2 50.2 58.9 (17.7) 13.5 17.3 26.0 22.9 19.5 17.1 14.6 12.1 2.7 2.5 2.3 1.0 1.1 1.3 10.9 11.4 12.3 4.4

Gujarat Pipavav Port ADD 159 185 16.6 76,722 1,142 483 3.9 5.5 7.3 (56.6) 42.2 32.1 40.9 28.8 21.8 19.2 15.5 11.9 3.7 3.3 2.9 — — 1.0 9.7 12.1 14.1 1.3

IRB Infrastructure BUY 232 295 27.0 81,624 1,215 351 17.6 16.9 14.9 14.2 (4.0) (12.0) 13.2 13.7 15.6 8.2 7.4 7.5 1.5 1.3 1.1 1.6 1.6 1.6 12.8 10.1 7.7 6.4

Sadbhav Engineering ADD 246 330 34.0 42,257 629 172 7.8 11.2 15.7 10.3 43.7 39.5 31.5 21.9 15.7 15.5 12.6 9.8 2.9 2.6 2.3 — — — 9.5 12.4 15.3 0.5

Infrastructure Attractive 937,979 13,963 (0.5) 21.0 (3.9) 20.8 17.2 17.9 12.9 10.9 9.9 2.9 2.5 2.3 0.7 0.8 1.1 14.1 14.6 12.6 26.3

Internet

Info Edge BUY 774 955 23.3 93,631 1,394 121 11.6 16.7 23.0 (28.3) 44.8 37.2 67.0 46.2 33.7 58.3 34.5 23.8 5.4 5.0 4.6 0.5 0.8 1.0 8.2 11.2 14.2 1.5

Just Dial REDUCE 674 710 5.4 46,815 697 69 19.0 15.3 27.2 (3.7) (19.6) 78.2 35.5 44.2 24.8 24.7 30.6 15.5 7.5 6.5 5.3 0.3 0.2 0.4 20.3 15.8 23.6 29.4

Internet Attractive 140,447 2,091 (18.5) 13.6 51.3 51.8 45.6 30.1 40.6 33.2 20.4 5.9 5.4 4.8 0.4 0.6 0.8 11.4 11.9 16.0 30.9

Media

DB Corp. ADD 318 330 3.8 58,429 870 184 17.5 21.5 25.8 1.6 22.7 20.0 18.1 14.8 12.3 9.8 8.1 6.8 4.2 3.8 3.5 3.1 4.0 5.0 23.9 27.0 29.7 0.1

DishTV BUY 80 115 44.0 85,106 1,267 1,066 2.7 3.6 4.5 9,116.5 33.9 25.0 NM 22.0 17.6 8.4 7.1 5.8 5.1 5.1 5.1 — — — 17.4 23.3 29.1 7.3

Jagran Prakashan ADD 152 180 18.5 49,642 739 327 10.0 12.0 14.0 24.8 20.3 16.5 15.2 12.6 10.9 8.6 7.0 5.9 3.6 3.3 2.9 3.3 4.0 4.6 26.1 27.1 28.3 0.2

PVR BUY 735 900 22.5 34,270 510 47 20.7 24.0 33.3 703.7 15.7 38.9 35.4 30.6 22.1 13.3 10.4 8.7 4.0 3.6 3.2 0.3 0.3 0.5 15.4 12.5 15.3 1.4

Sun TV Network ADD 344 390 13.4 135,565 2,018 394 23.1 26.1 29.7 16.2 13.2 13.8 14.9 13.2 11.6 9.3 8.0 6.9 3.7 3.4 3.1 3.9 4.4 5.0 26.0 27.0 28.1 5.4

Zee Entertainment Enterprises BUY 399 465 16.7 382,835 5,699 961 9.5 12.8 16.2 9.5 34.9 26.9 42.0 31.2 24.6 25.1 19.5 15.2 6.3 5.6 4.9 1.1 1.4 1.8 15.6 18.9 21.2 12.4

Media Neutral 745,847 11,103 29.8 24.2 21.3 26.1 21.0 17.3 13.6 11.2 9.2 5.0 4.5 4.1 1.6 1.9 2.3 19.0 21.5 23.5 26.8

Metals & Mining

Coal India ADD 319 360 12.9 2,014,289 29,985 6,316 24.2 26.1 30.9 11.5 7.8 18.0 13.2 12.2 10.3 7.2 7.2 6.0 4.2 3.8 3.4 4.6 4.9 5.8 33.7 32.8 34.9 19.8

Hindalco Industries REDUCE 84 70 (16.2) 172,426 2,567 2,065 0.5 2.9 7.5 (94.6) 443.4 154.7 154.8 28.5 11.2 9.7 7.7 6.5 0.5 0.4 0.4 1.2 1.2 1.2 0.3 1.6 3.9 12.2

Hindustan Zinc BUY 169 175 3.5 714,713 10,639 4,225 18.0 16.9 18.0 (7.1) (5.9) 6.6 9.4 10.0 9.4 5.7 5.0 4.2 1.5 1.4 1.2 3.7 2.6 2.6 16.7 14.3 13.8 2.9

Jindal Steel and Power RS 63 — — 57,456 855 915 (17.3) (16.9) (0.7) (350.1) 2.3 96.1 (3.6) (3.7) (94.8) 15.5 10.6 7.8 0.3 0.3 0.3 — — — (7.9) (8.4) (0.3) 12.3

JSW Steel REDUCE 1,184 1,030 (13.0) 286,090 4,259 242 (18.6) 115.9 160.0 (124.6) 723.9 38.0 (63.7) 10.2 7.4 11.9 6.0 5.3 1.3 1.2 1.0 1.0 1.0 1.0 (2.0) 12.2 14.9 17.1

National Aluminium Co. SELL 39 31 (19.6) 99,353 1,479 2,577 2.5 1.9 2.5 (46.6) (25.7) 30.8 15.2 20.5 15.7 4.8 6.4 4.4 0.8 0.8 0.7 4.5 2.6 2.6 5.1 3.7 4.8 0.6

NMDC SELL 93 75 (19.4) 368,917 5,492 3,965 8.2 7.2 7.3 (50.4) (12.1) 1.9 11.4 13.0 12.7 6.8 8.2 7.7 1.2 1.2 1.2 10.2 7.5 7.5 10.2 9.2 9.6 3.7

Tata Steel REDUCE 294 220 (25.2) 285,586 4,251 971 (29.7) 14.3 24.5 (91,652.8) 148.1 71.7 (9.9) 21 12.0 16.4 7.2 5.9 1.0 0.9 0.9 2.7 0.7 0.7 (9.5) 4.6 7.5 33.9

Vedanta BUY 87 100 14.5 258,966 3,855 3,717 7.1 8.7 15.5 (58.6) 22.3 78.9 12.3 10.1 5.6 6.9 5.9 4.9 0.5 0.5 0.5 3.7 3.7 3.7 4.6 5.2 8.9 24.5

Metals & Mining Cautious 4,257,795 63,383 (37.3) 35.8 31.9 17.3 12.7 9.6 8.9 6.9 5.8 1.4 1.3 1.2 4.3 3.9 4.3 8.0 10.4 12.8 127.0


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Pharmaceutical

Biocon SELL 485 390 (19.6) 97,060 1,445 200 21.6 25.2 30.6 10.2 16.9 21.2 22.5 19.2 15.9 13.8 10.6 8.2 2.2 2.0 1.8 1.6 1.8 2.2 10.9 10.7 11.9 5.3

Cipla BUY 535 700 30.9 429,484 6,393 805 22.2 26.9 37.6 51.4 21.3 39.8 24.1 19.9 14.2 16.2 13.0 9.4 3.5 3.1 2.6 0.8 1.0 1.5 15.3 16.4 19.9 13.9

Dr Lal Pathlabs ADD 863 860 (0.3) 71,298 1,061 68 17.6 17.3 19.8 (13.1) (2.0) 14.9 49.0 50.0 43.5 34.6 29.9 25.7 13.3 10.5 8.5 0.3 0.3 0.3 30.8 28.4 26.1 -

Lupin REDUCE 1,856 1,700 (8.4) 836,304 12,449 450 48.5 67.2 84.5 (9.1) 38.5 25.7 38.2 27.6 22.0 24.9 15.9 13.9 7.8 6.3 5.0 0.4 0.5 0.7 22.2 25.1 25.5 31.5

Sun Pharmaceuticals SELL 868 760 (12.5) 2,089,470 31,104 2,406 22.1 31.7 35.1 11.1 43.4 10.7 39.3 27.4 24.7 23.0 17.8 14.3 6.6 5.5 4.6 0.6 0.9 1.0 18.4 21.9 20.1 39.4

Torrent Pharmaceuticals REDUCE 1,289 1,320 2.4 218,067 3,246 169 109.3 61.1 69.9 146.2 (44.1) 14.4 11.8 21.1 18.4 8.2 13.1 11.6 5.0 4.1 3.3 - - - 54.1 21.3 19.8 4.1

Pharmaceuticals Cautious 4,289,246 63,851 18.2 18.3 18.2 30.4 25.7 21.7 18.8 15.8 12.8 5.6 4.7 4.0 0.6 0.8 0.9 18.3 18.2 18.2 116.6

Real Estate

DLF BUY 106 180 69.1 189,825 2,826 1,799 8.3 3.3 3.6 175.1 (59.9) 9.2 12.8 32.0 29.3 15.4 12.3 11.1 0.6 0.6 0.6 1.9 1.9 1.9 5.0 2.0 2.1 20.3

Godrej Properties REDUCE 276 280 1.4 55,116 820 199 13.6 15.7 17.3 42.0 15.7 9.8 20.3 17.6 16.0 15.7 12.0 10.9 2.7 2.4 2.1 0.9 0.9 0.9 13.9 14.4 14.0 1.1

Oberoi Realty BUY 246 345 40.1 83,554 1,244 339 13.3 18.0 43.5 51.0 35.0 141.5 18.5 13.7 5.7 11.6 7.8 2.8 1.6 1.4 1.2 0.8 0.8 0.8 9.1 10.9 22.5 0.6

Prestige Estates Projects BUY 146 250 71.8 54,563 812 375 11.2 14.1 15.8 26.0 26.6 12.0 13.0 10.3 9.2 7.9 5.9 5.6 1.3 1.2 1.1 1.0 1.0 1.0 10.5 12.0 12.1 0.6

Sobha BUY 249 480 92.8 24,413 363 98 16.1 22.6 24.1 (33.8) 40.5 6.9 15.5 11.0 10.3 10.2 8.7 7.5 1.0 0.9 0.9 2.8 2.8 2.8 6.4 8.6 8.7 0.3

Sunteck Realty BUY 230 360 56.7 14,463 215 60 25.6 82.9 53.3 124.9 224.1 (35.6) 9.0 2.8 4.3 8.1 2.1 0.0 0.9 0.7 0.6 0.9 0.9 0.9 10.0 26.8 14.2 0.2

Real Estate Attractive 421,933 6,281 77.8 (5.9) 30.7 14.3 15.2 11.6 12.7 9.1 7.3 0.9 0.9 0.8 1.4 1.4 1.4 6.4 5.8 7.1 23.0

Technology

HCL Technologies REDUCE 823 850 3.3 1,160,533 17,276 1,413 54.3 59.6 64.1 5.8 9.7 7.7 15.2 13.8 12.8 10.9 9.3 8.1 3.8 3.2 2.7 1.9 2.2 2.2 27.9 25.0 22.7 18.5

Hexaware Technologies BUY 255 260 1.8 77,021 1,147 304 12.9 15.5 17.8 19.4 19.7 15.0 19.7 16.5 14.3 13.5 11.4 9.6 5.4 4.9 4.3 3.4 3.4 3.4 28.9 31.2 31.9 3.9

Infosys ADD 1,143 1,300 13.7 2,633,980 39,210 2,286 57.8 66.0 75.8 7.2 14.3 14.8 19.8 17.3 15.1 13.7 11.5 9.6 4.5 4.0 3.5 2.0 2.4 2.6 24.4 24.5 24.7 56.4

Mindtree REDUCE 663 713 7.5 111,267 1,656 168 36.0 41.4 49.0 12.9 14.9 18.5 18.4 16.0 13.5 12.9 10.4 8.7 4.4 3.7 3.2 1.4 1.7 2.0 26.8 25.3 25.3 6.2

Mphasis REDUCE 448 415 (7.4) 94,193 1,402 210 33.8 36.8 38.7 4.7 8.8 5.3 13.3 12.2 11.6 8.0 7.0 6.4 1.6 1.5 1.5 3.8 4.1 4.3 12.6 13.0 13.0 1.4

TCS ADD 2,365 2,525 6.8 4,660,555 69,378 1,970 121.7 136.0 152.8 21.3 11.8 12.4 19.4 17.4 15.5 14.2 12.1 10.5 6.7 5.6 4.7 2.1 2.3 2.6 37.6 34.8 32.8 36.2

Tech Mahindra BUY 458 600 31.0 443,114 6,596 865 34.4 39.9 47.7 14.6 16.0 19.4 13.3 11.5 9.6 9.4 7.5 6.0 2.7 2.3 1.9 1.3 1.3 1.3 22.2 21.6 21.5 13.5

Wipro REDUCE 539 550 2.0 1,331,652 19,823 2,467 36.8 40.1 44.5 5.1 8.7 11.2 14.6 13.5 12.1 9.8 8.6 7.3 2.9 2.6 2.3 2.6 3.0 3.0 20.9 20.1 19.9 10.4

Technology Attractive 10,512,317 156,489 12.7 11.9 12.5 17.9 16.0 14.2 12.6 10.7 9.2 4.6 3.9 3.4 2.1 2.4 2.6 25.6 24.6 23.9 146.4

Telecom

Bharti Airtel BUY 337 385 14.2 1,348,123 20,069 3,997 10.7 13.2 17.7 (29.0) 23.1 34.3 31.4 25.5 19.0 6.6 6.1 5.2 2.1 2.0 1.9 0.8 1.0 1.6 6.8 8.2 10.5 18.2

Bharti Infratel ADD 378 390 3.1 717,225 10,677 1,903 12.1 15.2 17.0 15.1 25.4 11.6 31.2 24.9 22.3 13.0 11.5 10.4 4.2 4.0 3.9 2.4 2.9 3.2 13.4 16.5 18.0 10.7

IDEA BUY 102 175 71.2 367,967 5,478 3,598 7.9 3.0 5.3 (10.3) (61.8) 74.5 12.9 33.9 19.4 6.3 5.9 5.0 1.4 1.4 1.4 1.0 1.5 2.0 11.7 4.2 7.2 8.1

Reliance Communications SELL 53 60 13.4 131,667 1,960 2,488 2.3 2.6 4.1 (20.1) 14.4 57.4 23.1 20.2 12.8 7.7 7.4 6.8 0.4 0.4 0.4 — — — 1.7 1.9 3.0 16.6

Tata Communications BUY 359 415 15.6 102,358 1,524 285 (0.5) 4.9 13.7 (112.2) 1,185.2 177.4 (787.8) 72.6 26.2 7.0 6.1 5.3 32.4 22.4 12.0 1.5 1.8 1.8 (4.0) 36.5 59.8 2.9

Telecom Cautious 2,667,340 39,707 (16.9) 0.7 35.7 26.7 26.5 19.5 7.2 6.7 5.8 1.9 1.9 1.8 1.2 1.5 2.0 7.2 7.0 9.1 56.5

Utilities

Adani Power SELL 30 23 (22.9) 99,518 1,481 3,122 (2.6) 0.8 1.4 42.8 130.5 85.4 (11.7) 38.4 20.7 8.2 7.9 7.6 1.7 1.6 1.5 — — — (14.0) 4.2 7.4 3.5

CESC BUY 461 575 24.6 61,155 910 133 27.0 58.8 76.7 81.3 117.6 30.5 17.1 7.8 6.0 7.5 6.2 5.8 0.7 0.7 0.6 1.8 1.9 2.0 4.3 8.9 10.8 4.0

JSW Energy ADD 69 80 15.8 113,328 1,687 1,640 8.1 7.6 9.5 (3.9) (6.1) 24.4 8.5 9.1 7.3 6.5 5.4 4.7 1.3 1.1 1.0 — — — 16.1 13.0 14.1 2.7

NHPC REDUCE 21 20 (4.8) 232,484 3,461 11,071 2.6 2.5 3.4 15.8 (4.3) 35.7 8.0 8.4 6.2 6.2 6.1 5.0 0.7 0.7 0.6 3.4 3.3 4.5 9.2 8.3 10.5 1.6

NTPC BUY 126 160 26.6 1,042,227 15,515 8,245 11.0 12.4 14.8 (6.6) 12.0 19.9 11.5 10.2 8.5 11.3 9.0 7.3 1.2 1.1 1.0 2.8 2.9 3.5 10.7 11.1 12.4 10.4

Power Grid BUY 138 175 26.6 723,006 10,763 5,232 11.7 14.2 15.7 22.3 20.9 10.6 11.8 9.7 8.8 9.4 8.1 6.7 1.7 1.5 1.3 1.7 2.1 2.3 15.2 16.3 15.9 11.0

Reliance Power SELL 46 40 (13.9) 130,298 1,940 2,805 5.0 5.7 7.2 35.2 15.4 26.1 9.4 8.1 6.4 10.2 8.0 6.7 0.6 0.6 0.5 — — — 6.5 7.0 8.2 6.9

Tata Power ADD 59 70 18.6 159,573 2,375 2,800 4.6 5.2 5.7 800.0 11.4 11.1 12.7 11.4 10.3 7.4 6.3 5.9 1.1 1.1 1.0 2.0 2.0 2.0 9.0 9.5 9.9 3.4

Utilities Attractive 2,561,589 38,132 15.9 18.4 20.0 11.8 10.0 8.3 9.1 7.8 6.6 1.1 1.1 1.0 2.1 2.2 2.7 9.7 10.6 11.6 43.6

Others

Astral Poly Technik REDUCE 399 400 0.2 47,804 712 120 7.9 11.8 16.2 23.9 48.8 37.3 50.3 33.8 24.6 23.6 17.8 13.4 6.7 5.6 4.7 0.1 0.1 0.3 14.3 18.2 20.8 0.2

Dhanuka Agritech BUY 555 640 15.3 27,761 413 50 20.8 26.9 33.3 (2.1) 29.4 23.8 26.7 20.6 16.7 18.9 14.5 11.6 5.7 4.7 3.9 0.8 1.0 1.3 23.0 24.9 25.5 0.1

Godrej Industries ADD 331 415 25.3 111,313 1,657 336 17.7 17.9 25.8 47.8 0.9 44.2 18.7 18.5 12.9 16.8 13.2 9.3 3.0 2.6 2.2 0.5 0.5 0.5 17.0 14.9 18.5 1.6

InterGlobe Aviation BUY 821 1,065 29.8 295,691 4,402 351 54.4 71.7 85.7 44.2 31.9 19.5 15.1 11.4 9.6 9.8 7.1 5.8 10.9 7.3 5.3 3.3 4.4 5.2 125.0 78.9 65.8 34.2

Kaveri Seed BUY 394 520 32.1 27,180 405 69 30.8 49.1 62.1 (29.7) 59.6 26.4 12.8 8.0 6.3 10.2 6.0 4.3 3.0 2.4 1.9 2.0 3.7 4.7 25.6 33.5 34.0 8.4

PI Industries ADD 572 670 17.0 78,498 1,169 136 20.7 25.8 32.5 14.7 24.5 26.0 27.7 22.2 17.6 18.3 14.8 11.9 6.8 5.4 4.3 0.5 0.6 0.8 27.7 27.3 27.3 4.0

Rallis India ADD 157 180 14.8 30,502 454 194 6.5 8.7 11.0 (19.9) 34.2 26.5 24.2 18.0 14.3 13.4 10.4 8.2 3.5 3.2 2.8 1.9 2.0 2.2 14.9 18.4 20.7 0.7

Tata Chemicals ADD 345 410 18.9 87,865 1,308 255 27.9 38.2 43.0 (3.5) 37.1 12.5 12.4 9.0 8.0 7.2 6.0 5.3 1.5 1.4 1.2 3.6 3.6 3.6 12.4 15.8 16.1 3.5

UPL ADD 439 510 16.3 187,943 2,798 510 23.1 31.3 37.4 2.1 35.6 19.7 19.0 14.0 11.7 8.8 7.1 6.1 3.3 2.4 2.0 1.0 1.0 1.2 18.7 19.7 18.3 7.1

Whirlpool ADD 621 740 19.2 78,781 1,173 127 19.3 22.7 26.7 16.0 18.0 17.5 32.3 27.3 23.3 18.9 16.2 13.8 6.8 5.7 4.8 - 0.7 0.9 23.5 22.7 22.4 0.6

Others 973,339 14,489 16.4 31.6 21.8 17.9 13.6 11.1 10.8 8.4 7.0 4.0 3.2 2.6 1.8 2.3 2.6 22.5 23.6 23.8 60.5

KIE universe 68,307,144 1,016,839 (2.1) 19.4 19.9 18.5 15.5 12.9 10.7 9.2 7.7 2.3 2.1 1.9 1.7 1.9 2.1 12.2 13.3 14.4

KIE universe (ex-energy) 60,379,109 898,820 (4.5) 24.6 20.7 20.5 16.5 13.7 12.0 10.0 8.4 2.6 2.3 2.1 1.6 1.8 2.1 12.6 14.2 15.4

Notes:

(a) We have used adjusted book values for banking companies.

(b) 2016 means calendar year 2015, similarly for 2017 and 2018 for these particular companies.

(c) Exchange rate (Rs/US$)= 67.18

Price/BV (X) RoE (%)Dividend yield (%)

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Ratings and other definitions/identifiers

Definitions of ratings

BUY. We expect this stock to deliver more than 15% returns over the next 12 months.

ADD. We expect this stock to deliver 5-15% returns over the next 12 months.

REDUCE. We expect this stock to deliver -5-+5% returns over the next 12 months.

SELL. We expect this stock to deliver <-5% returns over the next 12 months.

Our target prices are also on a 12-month horizon basis.

Other definitions

Coverage view. The coverage view represents each analyst’s overall fundamental outlook on the Sector. The coverage view will consist of one of the following

designations: Attractive, Neutral, Cautious.

Other ratings/identifiers

NR = Not Rated. The investment rating and target price, if any, have been suspended temporarily. Such suspension is in compliance with applicable regulation(s)

and/or Kotak Securities policies in circumstances when Kotak Securities or its affiliates is acting in an advisory capacity in a merger or strategic transaction

involving this company and in certain other circumstances.

CS = Coverage Suspended. Kotak Securities has suspended coverage of this company.

NC = Not Covered. Kotak Securities does not cover this company.

RS = Rating Suspended. Kotak Securities Research has suspended the investment rating and price target, if any, for this stock, because there is not a sufficient

fundamental basis for determining an investment rating or target. The previous investment rating and price target, if any, are no longer in effect for this stock

and should not be relied upon.

NA = Not Available or Not Applicable. The information is not available for display or is not applicable.

NM = Not Meaningful. The information is not meaningful and is therefore excluded.

Kotak Institutional Equities Research coverage universeDistribution of ratings/investment banking relationships

Source: Kotak Institutional Equities As of December 31, 2015

Percentage of companies covered by Kotak Institutional

Equities, within the specified category.

* The above categories are defined as follows: Buy = We

expect this stock to deliver more than 15% returns over the

next 12 months; Add = We expect this stock to deliver 5-15%

returns over the next 12 months; Reduce = We expect this stock

to deliver -5-+5% returns over the next 12 months; Sell = We

expect this stock to deliver less than -5% returns over the next

12 months. Our target prices are also on a 12-month horizon

basis. These ratings are used illustratively to comply with

applicable regulations. As of 31/12/2015 Kotak Institutional

Equities Investment Research had investment ratings on 173

equity securities.

Percentage of companies within each category for which Kotak

Institutional Equities and or its affiliates has provided

investment banking services within the previous 12 months.

32.9% 34.1%

17.9%15.0%

6.4%

2.3% 1.7%0.0%

0%

10%

20%

30%

40%

50%

60%

70%

BUY ADD REDUCE SELL

Corporate Office Overseas Affiliates

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Kotak Securities Limited is a corporate trading and clearing member of BSE Limited (BSE), National Stock Exchange of India Limited (NSE), MSEI and United Stock Exchange of India Limited (USEIL). Our businesses include stock broking, services rendered in connection with distribution of primary market issues and financial products like mutual funds and fixed deposits, depository services and Portfolio Management.

Kotak Securities Limited is also a depository participant with National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL). Kotak Securities Limited is also registered with Insurance Regulatory and Development Authority as Corporate Agent for Kotak Mahindra Old Mutual Life Insurance Limited and is also a Mutual Fund Advisor registered with Association of Mutual Funds in India (AMFI). Kotak Securities Limited is registered as a Research Analyst under SEBI (Research Analyst) Regulations, 2014.

We hereby declare that our activities were neither suspended nor we have defaulted with any stock exchange authority with whom we are registered in last five years. However SEBI, Exchanges and Depositories have conducted the routine inspection and based on their observations have issued advise letters or levied minor penalty on KSL for certain operational deviations. 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.

We offer our research services to primarily institutional investors and their employees, directors, fund managers, advisors who are registered with us

Details of Associates are available on our website i.e. www.kotak.com

Research Analyst has not served as an officer, director or employee of Subject Company. We or our associates have received compensation from the subject company in the past 12 months. We or our associates have managed or co-managed public offering of securities for the subject company in the past 12 months. We or our associates have received compensation for investment banking or merchant banking or brokerage services from the subject company in the past 12 months. We or our associates have received any compensation for products or services other than investment banking or merchant banking or brokerage services from the subject company in the past 12 months. We or our associates have received any compensation or other benefits from the subject company or third party in connection with the research report.

Research Analyst or his/her relative’s may have financial interest in the subject company. Kotak Securities Limited or its associates have financial interest in the subject company. Research Analyst or his/her relatives does not have actual/beneficial ownership of 1% or more securities of the subject company at the end of the month immediately preceding the date of publication of Research Report: Kotak Securities Limited does not have actual/beneficial ownership of 1% or more securities of the subject company at the end of the month immediately preceding the date of publication of Research Report. Associates of Kotak Securities Limited may have actual/beneficial ownership of 1% or more securities of the subject company at the end of the month immediately preceding the date of publication of Research Report. Subject Company has been client during twelve months preceding the date of distribution of the research report.

A graph of daily closing prices of securities is available at www.nseindia.com and http://economictimes.indiatimes.com/markets/stocks/stock-quotes. (Choose a company from the list on the browser and select the “three years” icon in the price chart).

Kotak Securities Limited. Registered Office: 27 BKC, C 27, G Block, Bandra Kurla Complex, Bandra (E), Mumbai 400051. CIN: U99999MH1994PLC134051, Telephone No.: +22 43360000, Fax No.: +22 67132430. Website: www.kotak.com. SEBI Registration No: NSE INB/INF/INE 230808130, BSE INB 010808153/INF 011133230, MSEI INE 260808130/INB 260808135/INF 260808135, Research Analyst INH000000586, AMFI ARN 0164 and PMS INP000000258. NSDL: IN-DP-NSDL-23-97. CDSL: IN-DP-CDSL-158-2001. Compliance Officer Details: Mr. Manoj Agarwal. Call: 022-4285 6825 or Email: [email protected]

Documents

India Daily, March 14, 2016 - Kotak Securities · Pricing and marketing freedom for gas production from existing difficult ... 20% premium), Patanjali Ayurved has become a strong