Indian Equity Market Capitalization Today- Buy Stocks of Emami Ltd with Target Price Rs 635

With a cash-rich balance sheet and strong visibility over production growth of zinc, lead and silver over FY2013-15, we are positive on HZL.The

Rampura Agucha underground mine project is operational via ramps (tunnel driven downward from the surface) and commercial production will

ramp up in Q3 and Q4 of FY14. The Kayad mine project will also commence commercial production in the current fiscal year. A cash-rich balance

sheet, low cost of production and inexpensive valuations make HZL an attractive bet at the current price levels. But looking at the lower LME

prices for silver and lead we are neutral for this financial year.we Valuing the stock at this level, we recommend Neutral rating on HZL with a

target price of Rs.143 for FY14........................ ( Page : 9-11)

Year 2014 promises to be bigger and stronger than the last two years, which were marked by bloodbath in global markets due to Euro-zone

crisis and falling consumer confidence in the US. Demand is set to pick up in sectors like BFSI, healthcare, retail and transportation globally in the

year ahead. FY 15E is going to be better that FY14E, which was better than FY13. It will be good for us as well as the

industry............................................ ( Page : 7-8)

DCB : "REDUCE" 27th Dec 2013

"Neutral" Hindustan Zinc LTD :

"HOLD"

DCB is currently trading at 1.3 times of one year forward book which is almost upper side of valuation band. We value the bank at Rs.62/share

which is 1.4 times of one year forward book and 15 times of FY14E earnings. Valuation multiple is justified at present fundamental in our view

but has potential to expand the multiple once visibility of ROE improvement clearly come to on the floor after 1-2 quarters.

......................................................... ( Page : 18-20)

J&K Bank is one of our prefer bank in mid cap private sector banking space. Currently bank is trading at 1 times of one year forward book and 4.6

times of one forward earnings which we believe bank is still trading at attractive valuation post recent rally. We advice our investor to hold the

stock as bank is trading at lower valuation in comparison to private sector banks despite of having sound fundamental. We value bank at

Rs.1578/share which is 1.1 times of FY15’s book and 5.2 times of FY15’s earnings. ................................... ( Page : 15-17)

30th Dec 2013J&K BANK :

"BUY" RELIANCE : Good Growth Ahead

Reliance Industries Limited registered a turnover of Rs 197112 Cr for the half year ended 30th September 2013, up 4.7% YoY while it had made

turnover of Rs 188,193 Cr in 1HFY13. The exports were higher by 19.3% YoY to Rs 134455 Cr for 1HFY14……………….. ( Page : 12-14)

3rd Jan, 2014

Edition : 176

IEA-Equity

Strategy

31th Dec 2013

Emami Ltd : "The niche advantage" "BUY" 3rd Jan 2014

Considering Emami’s focus on increasing rural penetration, favorable monsoon, continuous strengthening of its brand equity and new product

funnel strongly in next 2- 3 years, we are positive on the stock. We recommend “Buy” on the stock with a target price of Rs 635. At a CMP of Rs

481 , the stock is trading at P/BV of 10.3x and 7.8x on FY14E and FY15E, respectively. .................... ( Page : 2-3)

ANDHRABANK: "REDUCE" 2nd Jan 2014

During quarter (3QFY14) Andhra Bank’s stock performance was ahead of fundamental in our view as there are multiple headwinds associated

with bank like earnings quality, impairment of asset, deposits cost etc. Asset quality of bank remained high at 5% and expected to remain at

elevated level along with higher restructure asset. According to bank’s management, restructure and non performing asset would consists 18%

of total asset in FY14 means 82% of assets has to service 100% of liability which itself challenging especially when bank with average earnings,

high cost of fund and downward trajectory of provision coverage ratio. ...................................... ( Page : 4-6)

IT Industry; from 2013 to 2014:"a year of innovation and transformation" 1st Jan 2014

Narnolia Securities Ltd,

India Equity Analytics

Emami Ltd

BUY

Key facts:

1M 1yr YTD

Absolute -3.3 20.3 50.6

Rel. to Nifty -4 15.8 33

Current 1QFY14 4QFY13

Promoters 72.74 72.74 72.74

FII 16.68 15.46 14.46

DII 2.18 3.27 3.45

Others 8.4 8.53 9.35

Financials Rs, Cr

2QFY14 1QFY14 (QoQ)-% 2QFY13 (YoY)-%

Revenue 406.7 383.7 6.0% 360.7 12.8%

EBITDA 87.4 59.2 47.6% 64.1 36.3%

PAT 80 60.7 31.8% 59.2 35.1%

EBITDA Margin 21.5% 15.4% 610bps 17.8% 370bps

PAT Margin 19.7% 15.8% 390bps 16.4% 330bps

2

1 yr Forward P/B

Share Holding Pattern-%

(Source: Company/Eastwind)

View and Valuation: Considering Emami’s focus on increasing rural penetration,

favorable monsoon, continuous strengthening of its brand equity and new product

funnel strongly in next 2- 3 years, we are positive on the stock. We recommend “Buy”

on the stock with a target price of Rs 635. At a CMP of Rs 481 , the stock is trading at

P/BV of 10.3x and 7.8x on FY14E and FY15E, respectively.

Strong distribution reach: Although rural continues to grow ahead of urban markets, the

growth for Emami has tapered off in both urban and rural areas. While urban markets

grew 8%, rural markets by 11% growth. Direct rural business was up by 17%. The

company's direct outlet reach is 6 lakh. The company has added 20000 outlets in Q2 and

expects to add 75000 – 100000 in FY14.

Product expansion: The company has launched Boroplus face-wash last month and

there will be new launches in Q4 also. The mgmt said that for next 2 – 3 years it has

strong pipeline of products to be launch.

Capex plan: For FY14 & FY15, they plan to spend INR700-750mn per year. It is setting up

a new factory in Guwahati at an investment of INR500-600mn.

Favorable rural discretionary demand: Recently, rural discretionary demand has

increased because of favorable monsoon and per capita rural growth. During the

2QFY14, its revenue from urban markets grew 8%, rural markets by 11%. Direct rural

business was up by 17%.Stock Performance

Stable Ad spend: The ad spends in Q2FY14 have declined by 125bps YoY to 16.6% as a

percentage of sales. The ad spends, as a percentage of sales, are expected to be in the

range of 16-17% in FY14 and FY15.

Please refer to the Disclaimers at the end of this Report.

Market DataBSE Code 531162

Average Daily Volume 37072

Nifty 6221

The Company’s major raw material Menthol Prices declined by 34% (YoY), as the

company has already forward contracted menthol for the year, menthol prices

continue to trend lower and price hikes for the year have been taken. Therefore,

margin expansion visibility remains high.

We expect better revenue growth in 2HFY14 as the weather related headwinds for

cooling oils is behind us and pricing on balms stabilize. Visibility of margin expansion

remains high because of benign cost of Menthol.52wk Range H/L 539/368

Mkt Capital (Rs Crores) 10912

NSE Symbol EMAMI

"The niche advantage."

Company updateCMP 481

Target Price 635

Usually, Emami reports good earnings growth for third quarter every year. For

3QFY14E, we expect 20-22% sales growth led by strong rural demand and 22-25% PAT

growth on YoY Basis. In addition, we expect to improve margin by 150-200bps (YoY) to

26% because of softening raw material prices.Previous Target Price 500

Upside 32%

Change from Previous 27%

"BUY"3rd Jan' 14


3

▪ The company has already taken price hikes and no further hikes are expected in FY14E.

Total annualized price hike for FY14 is 4% YoY.

Emami Ltd

Key facts from recent Conference Call

▪ The management has lowered its annual revenue growth guidance from 16% - 18% to

13% - 15% while PAT guidance continues to stand at 18% - 20% aided by strong gross

margin expansion on the back of lower Mentha Oil prices.

▪ Contribution from power brands is ~65%. The company plans to grow these brands by

15-16% in FY14.

▪ The mgmt has guided for a capex of Rs 70 – 75 crore each during FY14 and FY15. ASP for

FY14 will be 16% - 17%.

▪ Emami has a good cash balance of Rs3bn which it expects to utilize for acquisition.



Financials


Rs in Cr, FY10 FY11 FY12 FY13 FY14E FY15E

Sales 1037.98 1247.08 1453.51 1699.09 1936.23 2211.18

Raw Materials Cost 380.53 346.76 415.12 539.83 580.87 685.47

Purchases of stock-in-trade 0 204.9 189.13 182.14 203.30 221.12

WIP 0 -28.48 22.17 -6.52 -7.37 -8.42

Employee Cost 57.91 72.87 92.31 115.55 135.54 165.84

Advertisement and Publicity 194.42 219.41 228.99 279 319.48 353.79

Other expenses 158.66 178.17 209.02 241.82 281.65 321.64

Total expenses 791.52 993.63 1156.74 1351.82 1513.46 1739.44

EBITDA 246.46 253.45 296.77 347.27 422.76 471.74

Depreciation and Amortisation 117.52 116.09 120.89 124 131.63 150.32

Other Income 7 33.1 54.12 56 58.09 66.34

Exceptional Items 89.97 113.9 84.15 96 109.82 125.41

EBIT 128.94 137.36 175.88 223.2 291.14 321.42

Interest 20.98 15.23 15.21 6.6 6.86 5.14

PBT 204.93 269.13 298.94 368.69 452.18 508.03

Tax Exp 35.21 40.41 40.12 54 66.24 74.42

PAT 169.72 228.72 258.82 314.68 385.94 433.61

Growth-% (YoY)

Sales 35.5% 20.1% 16.6% 16.9% 14.0% 14.2%

EBITDA 91.0% 2.8% 17.1% 17.0% 21.7% 11.6%

PAT 85.0% 34.8% 13.2% 21.6% 22.6% 12.4%

Expenses on Sales-%

RM Cost 36.7% 27.8% 28.6% 31.8% 30.0% 31.0%

Ad Spend 18.7% 17.6% 15.8% 16.4% 16.5% 16.0%

Employee Cost 5.6% 5.8% 6.4% 6.8% 7.0% 7.5%

Other expenses 15.3% 14.3% 14.4% 14.2% 14.5% 14.5%

Margin-%

EBITDA 23.7% 20.3% 20.4% 20.4% 21.8% 21.3%

EBIT 12.4% 11.0% 12.1% 13.1% 15.0% 14.5%

PAT 16.4% 18.3% 17.8% 18.5% 19.9% 19.6%

Valuation:

CMP 197.7 249.4 260.8 397.4 481 481

No of Share 15.1 15.1 15.1 15.1 22.7 22.7

NW 625.4 689.9 706.6 777.5 1070.5 1397.9

EPS 11.2 15.1 17.1 20.8 17.0 19.1

BVPS 41.3 45.6 46.7 51.4 47.2 61.6

RoE-% 27.1% 33.2% 36.6% 40.5% 36.1% 31.0%

Dividend payout-% 23.4% 23.2% 23.8% 44.6% 24.1% 24.5%

P/BV 4.8 5.5 5.6 7.7 10.2 7.8

P/E 17.6 16.5 15.2 19.1 28.3 25.2

64

66

-

4

-

1M 1yr YTD

Absolute 0.5 -46.2 -46.2

Rel.to Nifty -1.4 -52.7 -52.7


3Promoters 58.0 58.0 58.0

FII 13.3 13.3 13.0

DII 12.4 14.6 15.2

Others 16.4 14.1 13.8

Financials Rs, Cr

2011 2012 2013 2014E 2015E

NII 2195 3759 3757 4143 4694

Total Income 3159 4619 4804 5529 6081

PPP 1810 2815 2767 2765 3344

Net Profit 1046 1345 1289 1131 1433

EPS 22.6 24.0 23.0 19.2 24.3

4

ANDHRABANK

High impairment asset with downward trajectory of PCR

We observed that bank’s deterioration in asset quality was much ahead of peers

group in term of fresh slippage and restructure assets. Bank’s GNPA and net NPA

during the last quarter was 5.3% and 3.5% much above of industry average of 3.5%

and 2.5% respectively. Asset quality trend is likely to remain at elevated level as per

management. Total restructure asset consist of 10.6% of total asset and another

Rs.3000 cr are in the pipeline means around 13% of total asset will go for restructure

and about 50% of fresh restructure slip into non performing asset. If the trend

continued then GNPA would be 5.5% which would itself alarming specially for the

bank because its provision coverage ratio without technical write off was low at 33%.

Bank has been continuous downward trajectory of PCR which implying very little

cushion for its future earnings.

Average quality of earnings asset and stress in other segment keep NIM at low

During 2QFY14, bank’s advance grew by 15% YoY and yield on advance declined to

11.4% as against average run rate of 12%. We model 15% of advance growth with

11% of loan yield for FY14E and FY15E largely due to challenging economic

environment and present running trend. Earnings asset especially with loan and

investment yield have nothing extraordinary as far as we observed and are likely to

remain at average quality. With average quality of earnings asset and stress in other

segment would keep NIM at low.

1473

Market Data

Upside

CMP

Target Price

During quarter (3QFY14) Andhra Bank’s performance was ahead of

fundamental in our view as there are multiple headwinds associated with bank

like earnings quality, impairment of asset, deposits cost etc. At the end of

2QFY14, bank’s restructure account consists of 10.6% of total asset which will

go up 13% of total asset in full year along with 5% of NPA according to the

management. This implies that 82% of total asset has to service 100% of

liability which would be real challenges for the bank as per our view. In the

regards, we analyze trend of impairment asset, earning quality and cost of

deposits and tweak our earnings estimate and value bank at 0.4 times of book.

Bank’s valuation may come down to 0.3 times (historical low) looking at

bank’s own stress and fundamental. We have reduced rating on the stock with

price target of Rs.66. 130/47.15

BSE Code 532418

NSE Symbol ANDHRABANK

Company UPDATE REDUCE

Previous Target Price

52wk Range H/L

Change from Previous

Andhra Bank Vs Nifty


1.09lac

Nifty 6304

Average Daily Volume

Mkt Capital (Rs Cr)



Stock Performance

"REDUCE"2nd Jan, 2014


5

CASA trend declined; high cost of deposits

Bank’s low cost of deposits (CASA) trend has been declining from 35% in FY07 to 24%

in 2QFY14. We observed that bank’s CASA ratio remained stick to 24% in last 7-8

quarters. In rising interest rate scenario, cost of deposits could not be sustained at 7.5 to

8% without adequate support of CASA. In term of deposits cost, Andhra bank’s cost of

deposits remain high at 7.7 %( 2QFY14) as compare to peers average of 7%. However

we model 7.5% of cost of deposits and 24% of CASA for FY14E and FY15E in line with

present trend.

View & Valuation

Andhra Bank’s stock performance during the quarter (3QFY14) was ahead of

fundamental in our view. There are multiple headwinds regarding the earnings and asset

quality which would erode the book value in FY14. At the end of 2QFY14, bank’s

restructure account consists of 10.6% of total asset which will go up 13% of total asset in

full year along with 5% of NPA according to the management. This implies that 82% of

total asset has to service 100% of liability which would be real challenges for the bank as

per our view. In the regards, we analyze trend of impairment asset, earning quality and

cost of deposits and tweak our earnings estimate and value bank at 0.4 times of book.

Bank’s valuation may come down to 0.3 times (historical low) looking at bank’s own

stress and fundamental. We have reduced rating on the stock with price target of Rs.66.

Valuation Band

ANDHRABANK

Source:Company/Eastwind



6

ANDHRABANK

Source: Eastwind/Company



Income Statement 2011 2012 2013 2014E 2015EInterest Income 6373 11339 12910 15555 17818

Interest Expense 4178 7579 9153 11412 13124

NII 2195 3759 3757 4143 4694

Change (%) 34.9 71.3 -0.1 10.3 13.3

Non Interest Income 965 860 1047 1387 1387

Total Income 3159 4619 4804 5529 6081

Change (%) 32.1 46.2 4.0 15.1 10.0

Operating Expenses 1350 1804 2037 2765 2736

Pre Provision Profits 1810 2815 2767 2765 3344

Change (%) 40.5 55.5 -1.7 -0.1 21.0

Provisions 374 991 996 1215 1382

PBT 1436 1824 1771 1549 1963

PAT 1046 1345 1289 1131 1433

Change (%) 60.2 28.6 -4.1 -12.3 26.7

Balance SheetDeposits( Rs Cr) 77688 105851 123796 142365 163720

Change (%) 31 36 17 15 15

of which CASA Dep 22864 27947 31759 34168 39293

Change (%) 23 22 14 8 15

Borrowings( Rs Cr) 5852 8241 11119 13225 15209

Investments( Rs Cr) 20881 29629 37632 43565 50100

Loans( Rs Cr) 56114 83223 98373 113129 130099

Change (%) 27 48 18 15 15

RatioAvg. Yield on loans 9.2 11.1 10.5 11.0 11.0

Avg. Yield on Investments 5.7 6.7 6.6 7.0 7.0

Avg. Cost of Deposit 4.9 6.6 6.9 7.51 7.51

Avg. Cost of Borrowimgs 6.4 7.7 5.4 5.5 5.5

Valuation

Book Value 91 134 151 166 190

CMP 108 119 95 63.6 63.6

P/BV 1.2 0.9 0.6 0.4 0.3

IT Industry; from 2013 to 2014

Favorable supply side scenario:

SMAC as new emerging opportunity:

7

INR/USD&CNX IT Performance(2013);

SMAC (social, mobile, analytics and cloud ) is throwing up huge opportunities as firms

want to optimise investments in current technology and drive growth by using digital

technologies and platforms. The digital forces of SMAC will reach mainstream status in

2014 and create requirements, drive new purchasing and establish new competitive

realities.



2013 has been a year of innovation and

transformation

The Indian IT governing body NASSCOM is expecting to clock 12-14% revenue growth in

USD term for FY14E, while Industry had reported 10-12% range of growth in FY13E.

Now, we expect higher growth with stable margin trajectory for FY 15E than previous

years led by healthy demand scenario and offering new delivery platform like analytics,

mobility, cloud, social media and emerging verticals such as healthcare and medical

devices.

NASSCOM on positive mood:

The Indian Rupee (INR) has depreciated against USD roughly by around 13-14% since Jan

1, 2013. The INR depreciation is favorable for all exporters and IT companies. As a

thumb rule, a 1% change in value of the rupee against the US dollar has an impact of 30-

40 bps on the operating margins of a company. During the 2QFY14, across the IT space,

companies reported healthy ramp up in operating margin.

With its top 4 bellwethers TCS, Infosys, Wipro and HCL- have been consolidated its

presence in software service sector. Now, new players with expertise in new emerging

services have entered into the marathon race and performing well in all aspects.

Indian IT Industry has been successful to maintain double-digit growth again in export

as well as in the domestic markets.

INR Depreciation: Factors behind the success story of IT Industry in 2013:

Euro zone was a pleasant surprise in 2013 with no bad news surfacing from that part of

the world. But that does not mean the sovereign debt problems have been solved

permanent. The attractiveness of Europe as a market is being reflected in the acquisition

activity within Tier-I IT (Valuesource, Equinox and C1 Group by Cognizant, Alti by TCS and

Infosys' acquisition of Lodestone).

Though attrition remained higher than last year, especially among the bellwethers,

campus hiring and fresh offers declined during the year. However, utilization rate

especially on onsite and offshore are on increasing mode, it indicates favorable supply

side scenario for the industry.Pleasant surprise from Euro zone:


Nifty and CNX IT Performance(2013); IT Industry with perception "I can do it better"

The year 2013 has proved a year of innovation and transformation for IT industry

across all verticals and geographies led by healthy demand environment and positive

factors for Industry, Indian IT Industry came to track with positive surprise and

opportunities. The resilient of $120bn plus IT Industry returned to higher growth

trajectory in 2013 and expecting to retain its momentum in the ensuring year for a

greater share of global multi-billion dollar IT Industry.

"a year of innovation and transformation"


59.5%

6.8%

59.5%

13%

- Govt mulls fresh incentives for IT companies,

-Software exports to grow 12-14% to clock $84-87 billion in FY14E,

-Domestic market to also grow 14% to $185 billion in FY14E,

-N.R. Narayana Murthy returns to Infosys as chairman,

-8 top executives quit Infosys in 6 months,

-Wipro hives off non-IT business as separate enterprise,

-Industry diversifies into offering new services & products,

-Campus hiring and fresh offers dip despite higher attrition,

-Thrust on providing IP-led solutions on multiple platforms,

8

IT Industry; from 2013 to 2014


Year 2014 promises to be bigger and stronger than the last two years, which were marked

by bloodbath in global markets due to Euro-zone crisis and falling consumer confidence in

the US. Demand is set to pick up in sectors like BFSI, healthcare, retail and transportation

globally in the year ahead.

View and Valuation;

We have seen a significant increase in global technology spending this year, creating

opportunities for the Indian software services sector to post double digit growth again in

export as well as in the domestic markets.

FY 15E is going to be better that FY14E,

which was better than FY13. It will be

good for us as well as the industry


Highlights of 2013: Performance of Our IT Coverage

Concerns:

However, hardening of regulatory related to visa approval in USA, Canada and Australia

could spoil the party. Even, the approval of Immigration Bill attached with higher visa fee,

wage requirements and enhanced audit by US agencies could turn the growth story of

Indian IT players adversely. If passed in its current form, the Bill could hurt the margins

of the Indian IT export sector, which derives almost 55-60% of its revenues from USA.

2014 and IT Industry: Another year of flawless ride

Thanks to playing a pivotal role of technology across transforming delivery of diverse

services in the government and private sector, the domestic market is also maturing and

is one of the fastest in the developing countries.



CMP Upside

(31.12.13) % FY13 FY14E FY15E FY13 FY14E FY15E FY13 FY14E FY15E

TCS 2170.95 BUY 2369.1 9.1% 71.82 90.74 102.37 30.23 23.92 21.21 36.42% 36.22% 32.95%

INFOSYS 3485.5 BUY 3982.7 14.3% 164.2 181.1 208.2 21.23 19.25 16.74 24.8% 23.0% 22.2%

HCLTECH 1263.1 BUY 1415.5 12.1% 58.10 71.87 83.49 21.74 17.57 15.13 30.72% 29.10% 26.39%

WIPRO 559.05 NEUTRAL 469.97 25.0 25.15 27.4 22.32 22.23 20.40 21.7% 18.9% 17.8%

TECHM 1838.05 BUY 2329.5 26.7% 85.48 144.15 161.64 21.50 12.75 11.37 35.91% 38.31% 30.38%

CMC 1632 BUY 1692.5 3.7% 75.27 101.56 110.07 21.68 16.07 14.83 24.10% 25.81% 22.92%

NIITTECH 360.5 BUY 408.32 13.3% 36.28 44.03 53.38 9.94 8.19 6.75 20.0% 19.6% 19.3%

KPIT 171.55 BUY 177.33 3.4% 10.80 13.07 15.95 15.88 13.13 10.75 20.10% 19.80% 19.75%

HEXAWARE 131.75 BUY 140.59 6.7% 11.1 13.1 14.3 11.87 10.09 9.21 27.2% 27.0% 26%

PERSISTENT 980.05 REDUCE 960.51 46.12 63.40 76.92 21.25 15.46 12.74 18.1% 20.5% 20.4%

eCLERX 1068.5 BUY 1357.9 27.1% 64.25 71.61 83.65 16.63 14.92 12.77 43.8% 37.9% 34.4%

TATAELXSI 415.65 REDUCE 236.85 10.63 17.53 19.76 39.10 23.72 21.03 16.94% 23.55% 22.37%

ZENSARTECH 355.85 BUY 439.43 23.5% 40.03 57.16 74.62 8.89 6.23 4.77 23.22% 26.07% 26.34%

RoE-%Company View Target

EPS-Rs P/E-x

Hindustan Zinc LTD.

133

143

NA

8%

NA

500188 Revenue increased due to Depreciation in Rupee

56133

5613

6291

1M 1yr YTD

Absolute 4.3 -1.7 -3.4

Rel. to Nifty 0.0 9.2 11.3

2QFY14 1QFY14 4QFY13

Promoters 64.9 64.9 64.9

FII 1.8 1.5 1.5

DII 31.4 31.5 2.0

Others 1.8 2.1 31.6

Investment Concern

Financials : Q2FY14 Y-o-Y % Q-o-Q % Q2FY13 Q1FY14

Net Revenue 3826 13.0 6.2 3387 3604

EBITDA 1883 28.2 25.3 1469 1503

Depriciation 186 6.3 1.1 175 184

Tax 254 -6.3 -4.9 271 267

PAT 1640 6.5 -1.2 1540 1660(In Crs)

9

The cost of production benefited from higher production volume and operational

efficiencies, which were more than offset by rupee depreciation and over Rs 3000/MT

decline in by-product credits On YoY basis. The Net Realization per tonne of Silver

slumped by 24% on YoY basis. This fall in realization was due to fall in price of silver in

LME as company adopts the import parity price. The Company’s EBIDTA zoomed by 28%

YoY basis at Rs 1,883 Cr and 30% QoQ basis. Net profit was up 7% to Rs. 1,640 Cr in Q2

The positive impact of higher EBITDA was partly offset by lower other income due to

mark-to-market losses on investments during the quarter.

HZL’s revenues are directly linked with the global market for products essentially, Zinc

and Lead which are priced with reference to LME prices and Silver to LBMA (London

Bullion Metal Association) prices.

Disruptions in mining due to equipment failures, unexpected maintenance problems ,

non-availability of raw materials of appropriate price, quantity and quality for our energy

requirements, disruptions to or increased cost of transport services or strikes and

industrial actions or disputes.Lower than expected demand by galvanizing industries for

zinc and industrial batteries, car batteries industries for lead would affect the company

estimates.


Stock Performance-%


1 yr Forward P/B

Source - Comapany/EastWind Research

Nifty

Hind Zinc reported net sales of Rs3559 Cr up by 24% YoY and 19% QoQ. The growth was

mainly due to higher sales volume and improvement in realisation per tonne. The net

realsation per tonne of zinc increased by 15% on YoY basis and 9% QoQ at Rs.131794. The

net realization per tonne of Lead remained almost flat on YoY basis and increased by 5%

in QoQ basis. The increase in net realization per tone is due to depreciation in rupee.

Zinc’s cost of production before royalty during the quarter was Rs.50522 , 8% higher in

Rupee and 3% lower in USD terms on YoY basis.

Upside


CMP

Target Price


Mined metal production in Q2FY14 was 221k tonnes against 190k tonnes YoY basis a

growth of 8.5% and 238k tonnes in Q1 FY14. The increase is due to higher production at

Rampura Agucha and restarting of Zawar mines. Integrated Refined Zinc production was

at 195k tonnes in Q2FY14 against 153k tonnes in Q2FY13 increase of 28%. Integrated

Lead Production was at 29k tonnes against 22k tonnes growth of 31% YoY basis. Silver

production was at 83 tonnes in Q2FY14 against 77 tonnes YoY basis. The increase in

Production of Zinc and lead was on account of improved utilization of smelter capacity.

Company Update Neutral

Market Data

Average Daily Volume (Nos.)

BSE Code

HINDZINCNSE Symbol

52wk Range H/L

Mkt Capital (Rs Crores)

143/94

"Neutral"31st Dec' 13


0

50

100

150

200

250

300

350

400

450

Jan-

07

Jul-0

7

Jan-

08

Jul-0

8

Jan-

09

Jul-0

9

Jan-

10

Jul-1

0

Jan-

11

Jul-1

1

Jan-

12

Jul-1

2

Jan-

13

Jul-1

3

Jan-

14

Lower other income mutes PAT growth: LME Price/Ton

From the Management Corner :

Outlook and valuation: LME Price/Ton

LME Price/Ton

FY11 FY12 FY13 FY14E

9912 11405 12700 13577

979 1543 2032 1787

10891 12948 14732 15364

1023 1228 1070 1291

492 568 696 707

4417 5336 6218 6484

5496 6069 6482 7093

475 611 647 718

19 14 29 37

1059 1419 921 1097

4900 5526 6899 6967

21.8 20.7 21.4 18.5

10



Power, fuel & water

Repairs

Expenditure

EBITDA


Hindustan Zinc LTD.

P/L PERFORMANCE

Net Revenue from Operation

Other Income

Total Income

The other income declined by 48.7% yoy to 267cr due to mark to market losses booked

by the company during the quarter while depreciation expenses also increased by 6.8%

yoy to 186cr. Consequently the adjusted net profit growth was muted at 10.5% yoy to

1,701cr (in-line with our estimate of 1,722cr).

With a cash-rich balance sheet and strong visibility over production growth of zinc, lead

and silver over FY2013-15, we are positive on HZL.The Rampura Agucha underground

mine project is operational via ramps (tunnel driven downward from the surface) and

commercial production will ramp up in Q3 and Q4 of FY14. The Kayad mine project will

also commence commercial production in the current fiscal year. A cash-rich balance

sheet, low cost of production and inexpensive valuations make HZL an attractive bet at

the current price levels. But looking at the lower LME prices for silver and lead we are

neutral for this financial year.we Valuing the stock at this level, we recommend Neutral

rating on HZL with a target price of Rs.143 for FY14.

Volatile Desel Price and high Sulphuric acid price affecting the company,s PAT

adversly.Company is tracking on 95% capacity utilization.Captive plants enjoy the lower

Tax rate and company enjoys zero tax from tax free geographycal areas. Smelting Plants

are improvised and management is confident that the smelting plants will maintain

their stance for the coming quarters also.

Interest Cost

Net tax expense / (benefit)

PAT

ROE%

Depriciation


0200400600800

10001200140016001800

Jan

-13

Fe

b-1

3

Ma

r-1

3

Ap

r-1

3

Ma

y-1

3

Jun

-13

Jul-

13

Au

g-1

3

Se

p-1

3

Oct

-13

No

v-1

3

De

c-1

3

Silver(rs/ounce)

020000400006000080000

100000120000140000160000

Jan

-13

Fe

b-1

3

Ma

r-1

3

Ap

r-1

3

Ma

y-1

3

Jun

-13

Jul-

13

Au

g-1

3

Se

p-1

3

Oct

-13

No

v-1

3

De

c-1

3

Lead

90000

95000

100000

105000

110000

115000

120000

125000

Jan

-13

Fe

b-1

3

Ma

r-1

3

Ap

r-1

3

Ma

y-1

3

Jun

-13

Jul-

13

Au

g-1

3

Se

p-1

3

Oct

-13

No

v-1

3

De

c-1

3

Zinc

FY10 FY11 FY12 FY13

Share 423 845 845 845

Reserve & 17701 21688 26036 31431

Total equity 18124 22533 26881 32276

Long-term 0 0 0 0

Short-term 60 0 0 0

Long-term 0 0 0 0

Trade 478 475 410 484

Short-term 340 567 504 825

Total 20238 25053 29485 35465

Intangibles 109 109 47 10

Tangible 6071 7145 8466 8474

Capital 1113 875 445 1082

Long-term 361 594 876 1898

Inventories 452 762 798 1111

Trade 152 209 332 403

Cash and 928 5633 5255 6942

Short-term 96 158 233 373

Total 20238 25053 29485 35465

FY10 FY11 FY12 FY13

P/B 3.2 2.2 2.1 1.7

EPS 95.6 11.6 13.1 16.3

Debtor to 1.9 2.1 2.9 3.2

Creditors to 6.0 4.8 3.6 3.8

Inventories 0.6 0.8 0.7 0.9

FY10 FY11 FY12 FY13

Cash from 4001 4483 4553 4935

Changes In 77 -212 -61 -183

Net Cash 4077 4272 4492 4752

Cash From -3881 -3658 -3499 -3234

Cash from -187 -363 -1242 -1257

Net Cash 8 250 -248 262

11



EBIDTA & Margin :


B/S PERFORMANCE

Trading At :

RATIOS

CASH FLOWS

Hindustan Zinc LTD.

ZinC Productions:


0

20

40

60

80

100

120

140

160

0

1000

2000

3000

4000

5000

6000

7000 NIFTY HINDZINC

BUY

1M 1yr YTD

Absolute 4 6 11

Rel. to Nifty 0.5 -1 -7


3Promoters 45.3 45.3 45.3

FII 17.7 17.4 17.8

DII 11.8 11.6 11.0

Others 25.2 25.7 25.9

Rs, Crore

2QFY14 1QFY14 (QoQ)-% 2QFY13 (YoY)-%

Revenue 103758 90336 14.9 87645 18.4

EBITDA 9909 9610 3.1 9818 0.9

PAT 5490 5352 2.6 5409 1.5

EBITDA Margin 9.6% 10.6% (110bps) 11.2% (170bps)

PAT Margin 5.3% 5.9% (60bps) 6.2% (90bps)

12

CMP 878

Target Price 1040

Previous Target Price -

The profit after tax was higher by 9.4% at Rs 10,842 Cr as against Rs 9,912 Cr in the

corresponding period of the previous year. The other income for 1HFY14 stands Rs 4595 Cr

up 14 % YoY mainly due to higher investment income.

1HFY14 revenue from the Petrochemicals segment increased by 6.7% YoY to Rs 46,842

Cr. Higher prices accounted for 7.4% growth in revenue. EBIT margin improved to 9.4% in

1H FY14 as compared to 8.0% a year ago. The production during 1HFY14 was 11 Mn

Tones verses 11.1 Mn Tonnes in 1HFY13.

RELIANCEGood Growth Ahead

Stock Performance-%


Mkt Capital (Rs, Cr)

Market Data

BSE Code 500325

About the Company

Reliance Industries Limited (RIL) is a conglomerate with business in the energy and

materials value chain. The Company operates in three segments: petrochemicals, refining

and oil & gas.

Company Update

1 Yr Price Movement Vs Nifty


283929

Average Daily Volume 52019

Nifty 6313

Financials

Reliance Industries Limited registered a turnover of Rs 197112 Cr for the half year ended

30th September 2013, up 4.7% YoY while it had made turnover of Rs 188,193 Cr in

1HFY13.The exports were higher by 19.3% YoY to Rs 134455 Cr for 1HFY14.

Revenue from Refining and Marketing segment during 1HFY14 increased by 5.7% YoY to

Rs 178,914 Cr, while EBIT was up 8.3% YoY at Rs 6,125 Cr. GRMs averaged $ 8.0/bbl

during 1H FY14 and the refineries achieved an average utilization rate of 112%. 1H FY14

export of refined products was at 22.1 MMT as compared to 19.2 MMT in 1H FY13.

PETROCHEMICALS BUSINESS


Half Yearly Financial Performance

The operating EBITDA during 1HFY14 was Rs 14924 Cr up 2.3 % YoY on the back of

higher margins in refining and petrochemicals business. The cost RM increased by 3 % to

Rs 162,094 from Rs 156,975 Cr due to higher crude prices. The employee cost for 1HFY14

was Rs 1707 Cr largely flat on yearly basis. The other expenditure increased by 13.6% YoY

to Rs 13,101 Cr primarily due to higher expenses on account of power & fuel consumption

and higher selling expenses on account of higher exports.

Half Yearly Business Performance

52wk Range H/L 954/765

NSE Symbol RELIANCE

OIL AND GAS (EXPLORATION & PRODUCTION) BUSINESS:

Company for half year ended earned Rs 2918 Cr from this business segment down by

38.7% YoY mainly due to Fall in production from KG-D6 owing to geological complexity

and natural decline in the fields.The EBIT margin for the segment in 1HFY14 was 24.3% .

REFINING & MARKETING BUSINESS

Change from Previous -

18%Upside

"BUY" 30th

Dec' 13


13

The management of the company on their half yearly performance said that diversified and

integrated petrochemicals business captured margins across segments and delivered near-

record profit levels even as the domestic economy slowed. The management further said

that optimal utilization of best-in-class refinery assets and inherent flexibility in sourcing,

product delivery contributed to healthy operating profits from our refining business.



RELIANCEContinued….

View and Valuation

The stock is trading at Rs 878 and in light of half yearly performance, business outlook and

management commentary we recommend BUY for the stock with Target Price Rs

1040.

2QFY14 SEGMENTAL REVENUE BREAK UP

Graphical Depiction

The net addition to fixed assets for the half year ended 30th September 2013 was Rs

20,154 Cr including exchange rate difference capitalization. Capital expenditure was

principally on account of ongoing expansions projects in the petrochemicals and refining

business at Jamnagar, Dahej, Silvassa and Hazira.

The Outstanding debt as on 30th September 2013 was Rs 83,982 Cr compared to Rs

72,427 Cr as on 31st March 2013. The company had cash and cash equivalents of Rs

90,540 Cr. These were in bank deposits, mutual funds, CDs and Government securities /

bonds. RIL is debt free on a net basis as at 30th September 2013.

Management Commentary


14


RELIANCE

Sales Trend (Rs/Bn)

A better realisation with a weaker rupee and

improved volume were the key drivers of the

sales growth of both petchem and refinery

businesses.

EBITDA & OPM %


PAT & NPM %



The improved margin and higher volume of

the petrochemical (petchem) business were

the major drivers of the profit in Q2FY2014.

Despite a healthy revenue growth, OPM

remain flat due to a lower margin in the

refining and exploration segments


J&K BANK

1411

1578

1420

12

11

1M 1yr YTD

Absolute 3.6 7.8 7.8

Rel.to Nifty -12.9 -0.8 -0.8


3Promoters 53.2 53.2 53.2

FII 24.8 24.5 24.3

DII 5.0 4.9 4.9

Others 17.1 17.4 17.7

Financials Rs, Cr

2011 2012 2013 2014E 2015E

NII 1544 1838 2316 2595 3091

Total Income 1908 2172 2800 2979 3817

PPP 1149 1370 1811 1906 2443

Net Profit 615 803 1055 1128 1478

EPS 126.9 165.7 217.6 232.6 304.9

15

Mkt Capital (Rs Cr)



Stock Performance

At the end of 2QFY14, bank reported GNPA of 1.7% and in absolute basis, GNPA

grew by mere 4% QoQ despite of current phase of economy cycle. Restructure loans

declined by 70 bps to 3.6% of loans whereas fresh restructure was low at 70 bps of

loan. Provision coverage ratio declined by 250 bps QoQ to 89% (without technical

write-off) made net NPA to 0.2% from 0.1% in 1QFY14.

52wk Range H/L


J&k Bank Vs Nifty


21053

Nifty 6314


6841

1695/1130

NSE Symbol J&KBANK

Company Update HOLD

CMP

Target Price

Jammu and Kashmir Bank (J&K Bank) is one of our prefer bank in mid cap

private sector banking space. Currently bank is trading at 1times of one year

forward book and 4.6 times of one forward earnings which we believe bank is

still trading at attractive valuation despite of recent rally. We advice our

investor to hold the stock as bank is trading at lower valuation premium in

comparison to peers despite of having sound fundamental. We value bank at

Rs.1578/share which is 1.1 times of FY15’s book and 5.2 times of FY15’s

earnings. Looking at bank’s metrics like Tier1 capital of 13.2%, GNPA of 1.7%,

PCR at 92% make it strong for trading at premium valuation as compare to

peers group.


Market Data

Upside

BSE Code 532209

Strong balance sheet growth continued with margin expansion

J&K bank aggressively expanding its loan growth outside of the state and witnessed

20.3% growth whereas within state loan grew by 26.4% in 2QFY14. Management

guided loan growth of 20-25% in FY14 premium of industry average of 15%.

Deposits growth would be 17-18% in FY14 according to management. Bank’s CASA

ratio at the end of 2Q stood at 39% which keep cost of deposits at 6% of level, one

of the lowest in industry. Low cost and high yield asset helped bank to maintain NIM

at 4.33%. Bank’s management guided NIM 4%+ level in FY14.

Sustainable high return ratio makes a strong case to trade at premium

valuation

J&K bank has sustainable high return ratio like ROE of 23%+ and ROA of 1.5%+

which help bank to maintain high valuation premium. Operating leverage (operating

cost to total asset) of the bank remains at 1.4 to 1.6 times in last few quarters which

restrict cost income escalate beyond 36%. Capital adequacy ratio of 13.2%

according to basel-II helps bank to maintain high growth trajectory with raising capital

in next few years.

Stable asset quality with lowest restructure asset comparison to peers

"HOLD"30th Dec, 2013


16

J&K BANK

Source: Eastwind/Company



Quaterly Result (Rs. Cr) 2QFY14 1QFY14 2QFY13 % YoY Gr % QoQ Gr

Interest/discount on advances / bills 1244 1184 1061 17.3 5.0

Income on investments 396 423 417 -5.0 -6.3

Interest on balances with Reserve Bank of India 10 17 23 -57.4 -42.8

Others 0 0 0

Total Interest Income 1650 1624 1501 9.9 1.6

Others Income 99 92 91 9.4 7.9

Total Income 1749 1716 1592 9.9 1.9

Interest Expended 968 969 948 2.1 -0.1

NII 682 655 553 23.4 4.1

Other Income 99 92 91 9.4 7.9

Total Income 781 747 644 21.4 4.6

Employee 177 176 143 23.6 0.6

Other Expenses 108 90 78 38.7 19.4

Operating Expenses 285 266 221 28.9 7.0

PPP( Rs Cr) 496 481 423 17.5 3.2

Provisions 56 36 33 69.7 53.7

PBT 441 445 390 13.1 -0.9

Tax 138 137 120 14.8 1.0

Net Profit 303 308 270 12.3 -1.7

Balance Sheet Data ( Rs Cr)

Net Worth 5475 5173 4609 18.8 5.9

Deposits 61171 58601 54927 11.4 4.4

Borrowings 1346 758 922 45.9 77.7

Advances 41121 39282 34272 20.0 4.7

Investment 22316 21734 22521 -0.9 2.7

Asset Qaulity ( Rs Cr)

GNPA 709 665 709 0.0 6.5

NNPA 78 56 78 0.0 38.2

GNPA(%) 1.7 1.7 2.1

NNPA(%) 0.2 0.1 0.2

PCR(%) 89 92 89

17

J&K BANK

Source: eastwind/Company



P/L 2010 2011 2012 2013 2014E 2015EInterest/discount on advances / bills 2342 2630 3394 4318 4959 5703

Income on investments 705 1066 1403 1723 1892 2085

Interest on balances with Reserve Bank of India 11 17 39 97 53 53

Others 0 0 0 0 0 0

Total Interest Income 3057 3713 4836 6137 6904 7841

Others Income 416 365 334 484 383 727

Total Income 3473 4078 5170 6621 7287 8568

Interest on deposits 1841 2069 2902 3741 4217 4639

Interest on RBI/Inter bank borrowings 83 46 41 26 91 111

Others 14 54 54 54 0 0

Interest Expended 1938 2169 2997 3821 4308 4750

NII 1119 1544 1838 2316 2595 3091

NII Growth(%) 37.9 19.1 26.0 12.1 19.1

Other Income 416 365 334 484 383 727

Total Income 1536 1908 2172 2800 2979 3817

Employee 366 524 521 652 633 811

Other Expenses 211 235 281 337 440 563

Operating Expenses 577 759 802 989 1072 1374

PPP( Rs Cr) 958 1149 1370 1811 1906 2443

Provisions 446 534 567 756 779 965

Net Profit 512 615 803 1055 1128 1478

Net Profit Grwoth(%) 20.1 30.6 31.4 6.9 31.1

Key Balance sheet dataDeposits 37237 44676 53347 64221 70643 77707

Deposits Growth(%) 20.0 19.4 20.4 10.0 10.0

Borrowings 1100 1105 1241 1075 1230 1500

Borrowings Growth(%) 0.4 12.3 -13.4 14.4 22.0

Loan 23057 26194 33077 39200 45080 51843

Loan Growth(%) 13.6 26.3 18.5 15.0 15.0

Investments 13956 19696 21624 25741 20124 22178

Investments Growth(%) 41.1 9.8 19.0 -21.8 10.2

Eastwind CalculationYield on Advances 10.2 10.0 10.3 11.0 11.0 11.0

Yield on Investments 5.0 5.4 6.5 9.4 9.4 9.4

Yield on Funds 7.7 7.5 8.3 8.9 10.6 10.6

Cost of deposits 4.9 4.6 5.4 5.8 6.0 6.0

Cost of Borrowings 8.8 9.1 7.7 7.4 7.4 7.4

Cost of fund 5.1 4.7 5.5 5.9 6.0 6.0

ValuationBook Value 621 718 844 1003 1186 1441

P/BV 1.1 1.2 1.1 1.3 1.2 1.0

P/E 6.4 6.9 5.5 5.9 6.1 4.6

57.25

62

62

8

-

1M 1yr YTD

Absolute 19.2 20.4 20.4

Rel.to Nifty 15.6 13.1 13.1


3Promoters 18.5 18.5 18.5

FII 11.4 11.4 11.1

DII 14.1 12.5 13.0

Others 56.1 57.7 57.5

Financials Rs, Cr

2011 2012 2013 2014E 2015E

NII 189 228 284 127 190

Total Income 301 328 401 272 334

PPP 86 84 126 95 127

Net Profit 21 55 102 95 127

EPS 1.1 2.3 4.1 3.8 5.1

18

BSE Code 532772

NSE Symbol DCB

52wk Range H/L

Company Update Book Profit

CMP

Target Price

Well capitalized and stable asset quality

Bank is well capitalized with tier 1 ratio of 13% means no need to raise money in

short term. Bank’s management guided loan and deposits growth of 25-27% and 30-

32% in FY14 which seen possible looking at present scenario. Management is also

very focus on low ticket size loan (prefer less than 30 mn) on account of avoiding

large slippage. At the 2QFY14, bank reported slippage of Rs.21 cr which was 1.3%

in annualized basis. Fresh slippage ratio remains in the range of 1.1-1.5 times in last

few quarters, so we believe bank would maintain similar trend in term of fresh

slippage which restrict GNPA out of control. Provision coverage ratio at the end of

2QFY14 stood at 84% (without technical write off) and management reiterate PCR to

maintain above of 80%.

Mkt Capital (Rs Cr)



Potential to expand valuation multiple, need to watch growth trajectory 1-2

quarters more

On valuation front, DCB valuation could be expanded if visibility of ROE

improvement is clearly seen. ROE improvement could be possible in two front- first

reducing cost income ratio which will boost the profit and second loan growth

specially in high yield segment like SME and MSME. We observed that bank’s Cost-

Income ratio was higher at 66.2% at the end of 2QFY14. Cost income ratio would

reduce to less than 65% in FY14 and would further reduce to 60% in FY15 according

to management. To reduce the cost, bank initiated to invest high yield segment,

planning to maintain CASA at 30% in long run while in short term does not expect

below of 27% and escalating branch network. In FY13 bank opened 10 branches but

in 1HFY14, DCB opened 9 branches and will go upto 120-125 branches in FY14.

54.85/38

Stock Performance

DCB


DCB Vs Nifty


2158026

Nifty 6279

Development Credit Bank (DCB) currently trading at 1.3 times of one year

forward book which is now almost of higher side of our valuation range. We

value the bank at Rs.62/share at the higher side which is 1.4 times of one year

forward book and 15 times of FY14E’s earnings. Present valuation multiple

justified on account of DCB’s consistent improvement in its return ratio and

management guided similar trend of growth in FY14,however bank cited

margin could be compressed by 25-30 bps. We can’t rule out the valuation

multiple expansions but there is need to watch 1-2 quarters more as per our

view


1437


Market Data

Upside

"Book Profit"27th Dec,2013


19

DCB

Source: Company/Eastwind



Quarterly Result( Rs Cr) 2QFY14 1QFY14 2QFY13 % YoY % QoQ

Interest/discount on advances / bills 205.2 201.5 170.9 20.1 1.8

Income on investments 57.9 56.7 47.6 21.8 2.1

Interest on balances with Reserve Bank of India 5.5 2.3 1.1 378.2 142.4

Others 0.2 0.2 0.4 -45.6 -9.7

Total Interest Income 268.8 260.7 219.9 22.2 3.1

Others Income 27.3 45.1 27.5 -0.9 -39.5

Total Income 296.1 305.8 247.5 19.6 -3.2

Interest Expended 177.6 177.6 153.0 16.1 0.0

NII 91.3 83.1 67.0 36.3 9.8

Other Income 27.3 45.1 27.5 -0.9 -39.5

Total Income 118.5 128.2 94.5 25.5 -7.6

Employee 38.8 37.7 34.1 13.9 2.9

Other Expenses 39.6 39.2 33.9 16.8 1.1

Operating Expenses 78.4 76.9 68.0 15.4 2.0

PPP( Rs Cr) 40.1 51.3 26.5 51.4 -21.8

Provisions 7.0 8.5 4.4 60.8 -17.4

PBT 33.1 42.8 22.1 49.5 -22.7

Tax 0.0 0.0 0.0

Net Profit 33.1 42.8 22.1 49.5 -22.7

Balance Sheet (Rs Cr)

Net Worth 1079 1046 902 19.6 3.2

Deposits 8788 8320 7137 23.1 5.6

Loan 6677 6472 5671 17.7 3.2

Asset quality (Rs Cr)

GNPA 235 226 226 4.0 4.0

NPA 57 54 38 50.0 5.6

% GNPA 3.5 3.5 4

% NPA 0.9 0.8 0.7

20

DCB

Source: Eastwind/ Company



Income Statement 2010 2011 2012 2013 2014E 2015EInterest Income 459 536 717 916 1090 1279

Interest Expense 317 347 489 632 963 1089

NII 142 189 228 284 127 190

Change (%) -28.2 33.6 20.4 24.9 -55.3 49.1

Non Interest Income 107 112 100 117 145 145

Total Income 249 301 328 401 272 334

Change (%) -21.6 21.2 8.9 22.4 -32.3 23.0

Operating Expenses 201 215 244 275 177 207

Pre Provision Profits 48 86 84 126 95 127

Change (%) -36.5 79.9 -2.6 50.5 -24.5 33.5

Provisions 121 57 29 24 0 0

PBT -73 29 55 102 95 127

PAT -79 21 55 102 95 127

Change (%) -10.1 -127.2 157.1 85.3 -6.7 33.5

Balance SheetDeposits( Rs Cr) 4787 5610 6336 8364 9618 11061

Change (%) 3 17 13 32 15 15

of which CASA Dep 1693 1975 2035 2272 2597 1825

Change (%) 17 17 3 12 14 -30

Borrowings( Rs Cr) 504 861 1123 1526 1697 1952

Investments( Rs Cr) 2018 2295 2518 3359 2886 3318

Loans( Rs Cr) 3460 4271 5284 6586 7903 9484

Change (%) 6 23 24 25 20 20

RatioAvg. Yield on loans 10.4 9.4 10.1 10.8 9.7 9.7

Avg. Yield on Investments 4.7 5.8 6.9 5.8 6.8 6.8

Avg. Cost of Deposit 5.9 5.2 6.4 6.4 5.9 5.9

Avg. Cost of Borrowimgs 6.8 6.4 7.2 6.4 6.0 6.0

Valuation

Book Value 30 31 36 40 44 49

CMP 32.2 45.9 45 45 57.3 57.3

P/BV 1.1 1.5 1.3 1.1 1.3 1.2

Narnolia Securities Ltd402, 4th floor 7/ 1, Lords Sinha Road Kolkata 700071, Ph

033-32011233 Toll Free no : 1-800-345-4000

email: [email protected],

website : www.narnolia.com

Risk Disclosure & Disclaimer: This report/message is for the personal information of

the authorized recipient and does not construe to be any investment, legal or taxation

advice to you. Narnolia Securities Ltd. (Hereinafter referred as NSL) is not soliciting any

action based upon it. This report/message is not for public distribution and has been

furnished to you solely for your information and should not be reproduced or

redistributed to any other person in any from. The report/message is based upon publicly

available information, findings of our research wing “East wind” & information that we

consider reliable, but we do not represent that it is accurate or complete and we do not

provide any express or implied warranty of any kind, and also these are subject to change

without notice. The recipients of this report should rely on their own investigations,

should use their own judgment for taking any investment decisions keeping in mind that

past performance is not necessarily a guide to future performance & that the the value of

any investment or income are subject to market and other risks. Further it will be safe to

assume that NSL and /or its Group or associate Companies, their Directors, affiliates

and/or employees may have interests/ positions, financial or otherwise, individually or

otherwise in the recommended/mentioned securities/mutual funds/ model funds and

other investment products which may be added or disposed including & other mentioned

in this report/message.

Economy & Finance

Indian Equity Market Capitalization Today- Buy Stocks of Emami Ltd with Target Price Rs 635