DOMESTIC:

Glenmark Pharma gets USFDA nod for drug for patients on

dialysis

Aurobindo acquires Apotex's operations in 5 European countries

Vodafone Idea plans Rs20,000cr network investment over

next 15months

Larsen & Toubro's hydrocarbon arm gets order worth over

Rs7,000cr in Algeria

Dr Reddy's launches erectile dysfunction treatment drug in US

L&T Construction secured an order for construction of hospitals

from a private developer

Reliance Industries may sell Jio infra assets to reduce debt

JSW Steel set to acquire Bhushan Power Hero Motors to invest Rs2,000cr by 2020

Jet Airways defaults on aircraft lease payments to MC Aviation

RBI imposes Rs5cr penalty on four PSU banks

Sterlite Power bids for two battery energy storage projects in US

Honda Motor expects market share to improve post BS-VI

VA Tech Wabag receives order worth Rs520cr

Hindalco looks to buy equity stake in a copper mine abroad

Jet Airways likely to get Rs600cr emergency loan

L&T Infotech to acquire Germany's Nielsen +Partner

Honda to recall 437,000 vehicles for fuel-pump issue

Muthoot Finance to raise up to Rs750cr through bonds

Reliance Industries opens research centre for Jio in Estonia to

study digital society

Sun Pharma to face challenges for its specialty business in US

Britannia working on plans to invest in startups

Jet Airways board approves SBI debt resolution plan

PNB to e-auction 4,000 properties to recover loans

Minda Industries to merge Harita Seating Systems with itself

Glenmark to spin off innovation business into a new company in

the US

ECONOMY:

Retail inflation softens to 19month low of 2.05% in January

Industrial production grows at 2.4% in December on the back of

manufacturing uptick

India’s Jan WPI inflation eases to 10month low of 2.76%

INDUSTRY:

Cement firms roll back price hikes, give up their premium

valuations

Indian cotton fabric, yarn exports fall due to high duties: as per

studies

India could extend deadline on steel import rules for automakers:

as per sources

The week that went by: Following the Asian markets, the Indian bourses commenced its day on a weak note. On Day 2, the markets opened on a

negative note. In the midweek session, the markets opened on a higher note. Amidst the mixed trend observed in the markets, it

once again commenced its day on a lower note. The last trading day of the week was also in the negative following the other

Asian Peers. Overall the week was more tilted towards the negative in tandem to the jitters through the other Asian bourses.

Price Performance

Company 1M 3M 12M

Supreme Petrochem Ltd 9.6% 0.6% -41.0%

Shanthi Gears Ltd -10.2% -13.9% -21.7%

Hind Rectifiers Ltd -15.3% -11.7% -20.5%

KCP Ltd -12.5% -15.7% -39.4%

Hester Biosciences Ltd 22.9% 22.2% -15.7%

The Hi-Tech Gears Ltd -7.7% -20.2% -33.6%

Bharat Bijlee Ltd -15.9% -17.9% -32.4%

Triveni Turbines Ltd -8.6% -10.6% -13.4%

Siemens Ltd -9.6% 3.1% -23.6%

Aksh Optifibre Ltd -23.8% -31.0% -52.6%

GMM Pfaudler Ltd -8.2% 4.6% 48.6%

Alicon Castalloy Ltd -7.1% -14.0% -14.3%

Gufic Biosciences Ltd -26.3% -33.3% -44.9%

Excel Industries Ltd -27.8% -33.6% 18.6%

Vesuvius India Ltd -8.3% 5.6% -11.6%

Munjal Showa Ltd -12.7% -13.2% -31.1%

Bharat Rasayan Ltd -28.5% -40.5% -22.1%

Alkyl Amines Chemicals Ltd -6.4% -8.2% 16.9%

Grauer and Weil (India) Ltd -11.6% -16.0% -34.1%

Texmaco Rails & Engineering Ltd -8.6% -16.5% -42.7%

Nagarjuna Agrichem Ltd 2.9% 2.4% -37.1%

Simplex Infrastructures Ltd -23.8% -38.6% -74.7%

ITD Cementation India Ltd -11.7% -8.0% -44.2%

Westlife Development Ltd -11.0% 0.5% 5.4%

Federal Mogul Goetze (India) Ltd -8.9% 13.3% -5.4%

Dynamatic Technologies Ltd -11.3% -16.3% -21.9%

Hitech Corporation Ltd -42.7% -18.8% -43.5%

NRB Bearings Ltd -14.6% 0.7% 13.9%

Kokuyo Camlin Ltd -19.0% -16.2% -29.3%

Timken India Ltd -6.7% 2.8% -33.2%

Morganite Crucible (India) Ltd -8.8% -13.3% 37.1%

Vardhman Special Steels Ltd -10.9% -20.8% -41.8%

Zen Technologies Ltd -13.3% 9.7% -42.1%

KSB Ltd -10.8% -13.5% -17.1%

Thermax Ltd -12.3% -2.8% -14.3%

Transpek Industry Ltd 1.4% -1.3% 12.9%

BASF India Ltd -20.2% -22.2% -39.4%

Artson Engineering Ltd -31.7% -35.6% -61.8%

Remsons Industries Ltd -31.3% -31.7% -21.1%

Snowman Logistics Ltd -15.7% -20.6% -44.7%

Alembic Pharmaceuticals Ltd -9.2% -7.1% -5.3%

SKF India Ltd 1.1% 4.5% 4.9%

Indian Hume Pipe Co. Ltd -23.7% -3.0% 45.6%

Engineers India Ltd -14.1% -9.1% 26.4%

Gulshan Polyols Ltd -27.8% -18.4% -39.0%

Nesco Ltd -5.1% -6.9% -26.9%

Castrol India Ltd -12.1% -1.8% 51.0%

Hikal Ltd -8.9% -3.2% -3.6%

15 Feb 2019

Please Turn Over

Recommendations adjusted as per Corporate Actions

Company Reco Target Corp Action Adj Price Adj Tgt Price Appreciation

IHP Ltd 341 600 Bonus 1 : 1. 171 500 59%

Engineers India Ltd 211 200 Bonus 1 : 1. 105 250 3%

Gulshan Polyols Ltd 390 500 Stock Split from Rs.FV 5 to Rs.FV 1. 78 110 -36%

Nesco Ltd 2397 3200 Stock Split from Rs.FV 10 to Rs.FV 2. 479 640 -10%

Castrol India Ltd 447 550 Bonus 1 : 1 223 200 -34%

Hikal Ltd 143 325 Bonus 1 : 2 95 216 55%

Coverage Universe Valuations

Company Reco Adj Reco CMP Tgt price Upside Mcap EPS(x) PE(x) EV/EBITDA (x)

(Rs) (Rs) (Rs) (%) (Rs bn) FY18 FY19E FY18 FY19E FY18 FY19E

IHP Ltd 341 171 272 500 83.8 13.2 13.6 20.1 19.9 13.5 10.9 8.4

Engineers India Ltd 211 105 109 200 84.2 36.6 6.0 7.0 18.2 15.5 16.5 13.1

Gulshan Polyols Ltd 390 78 50 78 56.0 2.3 3.9 5.1 110.7 84.7 31.4 25.1

Nesco Ltd 2397 479 431 640 48.5 6.1 25.1 23.7 17.2 18.2 14.1 14.6

Castrol India Ltd 447 223 147 200 35.9 72.8 7.1 15.6 20.8 9.5 13.7 12.4

Hikal Ltd 143 95 148 216 46.4 12.1 9.4 10.1 15.7 14.7 9.8 8.8

Coverage Universe Valuations

Company Reco Reco at CMP Tgt price Upside Mcap EPS(x) PE(x) EV/EBITDA (x)

(Rs) (Rs) (Rs) (%) (Rs bn) FY18 FY19E FY18 FY19E FY18 FY19E

Supreme Petrochem Ltd BUY 77 204 275 35.1 19.6 6.6 6.4 30.8 31.8 9.4 11.5

Shanthi Gears Ltd BUY 107 114 200 76.2 9.3 3.5 3.9 32.4 29.1 25.2 21.3

Hind Rectifiers Ltd BUY 69 106 175 65.1 1.6 0.8 5.3 134.4 20.0 22.8 11.5

KCP Limited BUY 71 78 150 92.4 10.0 7.0 7.0 11.2 11.2 8.8 7.7

Hester Biosciences Ltd BUY 565 1376 1750 27.2 11.7 35.9 39.8 38.3 34.6 11.4 10.2

The Hitech Gears Ltd BUY 298 293 500 70.9 5.5 17.0 21.2 17.2 13.8 10.2 8.9

Bharat Bijlee Ltd BUY 787 965 2000 107.3 5.5 25.1 37.4 38.4 25.8 22.7 18.9

Triveni Turbines Ltd BUY 92 104 150 44.2 0.3 3.0 3.1 34.9 33.4 21.9 20.9

Siemens Ltd BUY 1128 961 1350 40.4 342.3 53.0 53.6 18.1 17.9 24.1 23.7

Aksh Optifibre Ltd BUY 15 18 30 62.6 3.0 1.4 2.7 12.9 6.8 7.2 4.5

GMM Pfaudler Ltd BUY 332 1085 1300 19.8 15.8 19.4 26.7 55.9 40.7 34.1 24.9

Alicon Castalloy Ltd BUY 288 533 850 59.5 6.6 29.0 46.6 18.4 11.4 8.7 6.4

Gufic Biosciences Ltd BUY 50 68 150 121.2 5.2 1.9 3.1 36.3 21.8 15.7 12.2

Excel Industries Ltd BUY 380 990 1800 81.8 12.8 58.1 112.2 17.0 8.8 10.1 5.4

Vesuvius India Ltd BUY 1165 1160 1500 29.3 23.2 52.3 56.3 22.2 20.6 11.2 10.8

Munjal Showa Ltd BUY 191 158 250 58.3 6.3 19.4 21.5 8.1 7.3 5.4 4.8

Bharat Rasayan Ltd BUY 2747 3600 9000 150.0 15.1 227.3 257.5 15.8 14.0 10.5 9.2

Alkyl Amines Chemicals Ltd BUY 391 723 850 17.6 14.7 31.5 38.9 22.9 18.6 14.0 10.6

Grauer and Weil (India) Ltd BUY 45 44 65 46.6 10.1 2.7 3.0 16.6 15.0 10.4 9.8

Texmaco Rails & Engineering Ltd BUY 91 54 150 178.8 20.2 0.5 1.8 117.4 29.7 53.8 15.8

Nagarjuna Agrichem Ltd BUY 29 28 45 59.0 4.4 0.7 0.8 41.3 35.8 13.4 12.7

Simplex Infrastructures Ltd BUY 540 147 540 268.6 20.2 30.5 31.8 4.8 4.6 6.2 5.8

ITD Cementation India Ltd BUY 158 103 180 74.7 16.0 8.3 9.8 12.4 10.5 6.9 6.1

Westlife Development Ltd BUY 266 346 425 22.7 53.9 0.8 1.6 417.4 218.2 71.8 50.4

Federal Mogul Goetze (India) Ltd BUY 540 481 750 56.0 26.7 14.9 18.0 32.2 26.6 14.3 13.1

Dynamatic Technologies Ltd BUY 2160 1330 2750 106.8 8.4 1.1 51.1 1171.4 26.0 11.0 8.4

Hitech Corporation Ltd BUY 175 90 180 100.0 1.5 4.5 6.4 19.9 14.1 8.2 6.2

NRB Bearings Ltd BUY 138 182 240 32.0 17.6 8.5 10.4 21.5 17.5 12.7 10.6

Kokuyo Camlin Ltd BUY 132 88 175 98.8 8.8 1.0 1.5 90.0 59.9 26.5 21.2

Timken India Ltd BUY 883 540 1000 85.3 36.7 13.5 19.0 39.9 28.4 22.4 14.3

Morganite Crucible (India) Ltd BUY 1047 1378 2300 66.9 3.9 49.6 63.9 27.8 21.6 2.7 2.4

Vardhman Special Steels Ltd BUY 151 85 140 64.8 3.0 7.0 8.7 12.1 9.7 8.3 7.0

Zen Technologies Ltd BUY 115 69 170 145.0 5.4 -0.1 0.8 -1376.6 86.2 -283.7 51.5

KSB Ltd BUY 820 660 1100 66.7 23.0 18.8 21.2 37.0 32.8 15.5 13.8

Thermax Ltd BUY 1019 990 1230 24 118.0 22.1 26.8 44.8 37.0 31.8 27.2

Transpek Industry Ltd BUY 1547 1450 2000 37.9 8.1 47.3 76.0 30.7 19.1 18.8 14.1

BASF India Ltd BUY 1954 1209 2500 106.8 52.3 20.3 43.5 59.5 27.8 18.0 14.2

Artson Engineering Ltd BUY 64 34 95 182.7 1.2 0.4 2.3 89.7 14.6 55.2 16.9

Remsons Industries Ltd BUY 104 74 155 110.2 0.4 6.0 7.9 12.2 9.3 8.6 6.8

Snowman Logistics Ltd BUY 33 30 55 86.4 4.9 -0.2 0.1 -138.4 205.0 14.0 11.4

Alembic Pharmaceuticals Ltd BUY 605 541 751 38.8 102.0 22.3 26.7 24.2 20.2 16.8 14.3

SKF India Ltd BUY 1942 1951 2620 34.3 100.1 57.6 60.7 33.9 32.2 23.0 21.4

*Castrol, Vesuvius, ITD Cementation– Dec Ending | Siemens—Sept ending|

15 Feb 2019

Please Turn Over

Recommendations adjusted as per Corporate Actions

Company Reco Target Corp Action Adj Price Adj Tgt Price Appreciation

IHP Ltd 341 600 Bonus 1 : 1 171 500 59%

Engineers India Ltd 211 325 Bonus 1 : 1 105 250 3%

Gulshan Polyols Ltd 390 500 Stock Split from Rs.FV 5 to Rs.FV 1 78 110 -36%

Nesco Ltd 2397 3200 Stock Split from Rs.FV 10 to Rs.FV 2 479 640 -10%

Castrol India Ltd 447 550 Bonus 1 : 1 223 200 -34%

Hikal Ltd 143 325 Bonus 1 : 2 95 216 55%

Coverage Performance Sheet

Company Reco at CLS Target Price (Rs) Appreciation

(Rs) (Rs) Target 1 Target 2 Target 3 Target 4 Target 5 Target 6 Target 7 Target 8 (%)

Supreme Petrochem Ltd 77 204 120 150 200 275 350 500 275 - 164%

Shanthi Gears Ltd 107 114 150 200 - - - - - - 6%

Hind Rectifiers Ltd 69 106 110 140 175 - - - - - 54%

KCP Limited 71 78 105 150 200 150 - - - - 10%

Hester Biosciences Ltd 565 1376 750 875 1150 1500 2200 1750 - - 144%

The Hitech Gears Ltd 298 293 450 600 500 - - - - - -2%

Bharat Bijlee Ltd 787 965 1100 1500 2000 - - - - - 23%

Triveni Turbines Ltd 92 104 135 150 - - - - - - 13%

Siemens Ltd 1128 961 1350 - - - - - - - -15%

Aksh Optifibre Ltd 15 18 24 35 45 30 - - - - 23%

GMM Pfaudler Ltd 332 1085 500 700 800 1000 1300 - - - 227%

Alicon Castalloy Ltd 288 533 450 600 750 1000 850 - - - 85%

Gufic Biosciences Ltd 50 68 75 100 140 175 150 - - - 36%

Excel Industries Ltd 380 990 550 650 800 1100 1400 1800 2200 1800 161%

Vesuvius India Ltd 1165 1160 1500 - - - - - - - 0%

Munjal Showa Ltd 191 158 250 300 350 300 250 - - - -17%

Bharat Rasayan Ltd 2747 3600 3500 4250 5000 6500 9000 - - - 31%

Alkyl Amines Chemicals Ltd 391 723 550 700 850 - - - - - 85%

Grauer and Weil (India) Ltd 45 44 65 80 100 65 - - - - -1%

Texmaco Rails & Engineering Ltd 91 54 125 150 - - - - - - -41%

Nagarjuna Agrichem Ltd 29 28 45 60 75 60 45 - - - -2%

Simplex Infrastructures Ltd 540 147 700 540 - - - - - - -73%

ITD Cementation India Ltd 158 103 225 180 - - - - - - -35%

Westlife Development Ltd 266 346 350 425 - - - - - - 30%

Federal Mogul Goetze (India) Ltd 540 481 750 - - - - - - - -11%

Dynamatic Technologies Ltd 2160 1330 3000 2750 - - - - - - -38%

Hitech Corporation Ltd 175 90 230 180 - - - - - - -49%

NRB Bearings Ltd 138 182 200 240 - - - - - - 32%

Kokuyo Camlin Ltd 132 88 175 - - - - - - - -33%

Timken India Ltd 883 540 1200 1000 - - - - - - -39%

Morganite Crucible (India) Ltd 1047 1378 1500 1750 2300 - - - - - 32%

Vardhman Special Steels Ltd 151 85 225 140 - - - - - - -44%

Zen Technologies Ltd 115 69 170 - - - - - - - -40%

KSB Ltd 820 660 1100 - - - - - - - -20%

Thermax Ltd 1019 990 1230 - - - - - - - -3%

Transpek Industry Ltd 1547 1450 2000 - - - - - - - -6%

BASF India Ltd 1954 1209 2500 - - - - - - - -38.1%

Artson Engineering Ltd 64 34 95 - - - - - - - -48%

Remsons Industries Ltd 104 74 155 - - - - - - - -29%

Snowman Logistics Ltd 33 30 55 - - - - - - - -11%

Alembic Pharmaceuticals Ltd 605 541 751 - - - - - - - -11%

SKF India Ltd 1942 1951 2620 - - - - - - - 0.4%

*Castrol, Vesuvius, ITD Cementation– Dec Ending | Siemens—Sept ending|

15 Feb 2019

Coverage Performance Sheet

Company Reco at CLS Target Price (Rs) Appreciation

(Rs) (Rs) Target 1 Target 2 Target 3 Target 4 Target 5 Target 6 Target 7 (%) Target 8

IHP Ltd 341 272 500 600 500 - - - - 59% -

Engineers India Ltd 211 109 200 250 200 - - - - 3% -

Gulshan Polyols Ltd 390 50 110 78 - - - - - -36% -

Nesco Ltd 2397 431 640 - - - - - - -10%

Castrol India Ltd 223 147 275 250 200 - - - - -34% -

Hikal Ltd 143 148 200 250 325 216 - - - 55% -

Please Turn Over

TERM OF THE WEEK:

Justified P/E: It is a multiple based on fundamentals and unlike the regular P/E

ratio it is not based on observed price. Instead inputs for expected dividend, growth

rate, earnings and cost of equity are used to estimate P/E based on future cash flows.

COVERAGE NEWS:

Target Revision:

Engineers India Ltd: The target price is toned down to Rs200 from the earlier Rs250 keeping in mind the

slowdown in the performance of the company as well as the markets.

NACL Industries Ltd: The target price has been revised to Rs45 with a horizon of 12 months and this may

get upgraded if the operational and capabilities of the company improve going

forward.

ITD Cementation India Ltd: The target price has been revised to Rs180 from the earlier Rs225 over a 12month

horizon.

Vardhman Special Steels Ltd (VSSL): The target price has been toned down to Rs140 from the earlier Rs225 over a 12month

horizon.

Dynamatic Technologies Ltd: The target price has been reduced to Rs2750 from the earlier price of Rs3000 with a

horizon of 12 months.

Bharat Rasayan Ltd (BRL): The target price has been revised to Rs5000 (which was also our second revised target

post the initiation at Rs2747) with a horizon of 12 months.

Aksh Optifibre Ltd: The target price has been reduced to Rs30 from the earlier price of Rs45 with a

horizon of 12 months keeping in mind the current scenario of the industry and the

earnings of the company for Q3FY19.

Grauer & Weil (India) Ltd: Keeping in mind the Q3FY19 results, wherein the company experienced a hit on its

bottom line numbers and additionally considering the current focus of the company on

its exports, depreciation of rupee and its upcoming capex plan which would favour the

company; all of these factors lead us to reduce the target price to Rs65 (which was the

initial target post two upward revisions after the initiation at Rs45) with a horizon of

12 months. We will not hesitate to upgrade the target price once things fall in place

for GWIL.

Please Turn Over

15 Feb 2019

Weekly Sectoral Gainers & Losers in (%)

Target Revision: EIL

Target Revision: NACL

Target Revision: ITD

Target Revision: VSSL

Target Revision:

Dynamatic

Target Revision: Aksh

Target Revision: GWIL

Target Revision: BRL

COVERAGE NEWS:

Gufic Biosciences Ltd: The target price has been toned down to Rs150 from the earlier Rs175 over a 12month

horizon.

Gulshan Polyols Ltd: The target price has been toned from Rs110 to Rs78 (which was the original price of

initiation) with a horizon of 12 months.

Engineers India Ltd: Contract agreement update:

EIL and the government of Mongolia through Mongol Refinery State Owned LLC

signed a MOU for a project management consultancy services for construction of an oil

refinery plant in Mongolia by EIL. EIL has been pre-qualified and subsequently

shortlisted for the same.

NACL Industries Ltd: Equity issue update: NACL would raise Rs115cr via equity issue and warrants (exercisable within 12months)

to an incoming investor and the existing promoter. Krishi Rasayan Group, the incoming

investor, will hold around 16% of the equity of NACL upon completion of infusion of

funds. The promoters are also investing Rs15cr through equity warrants. Post the issue,

the promoters will continue to have controlling interest by holding around 63% of the

equity. There will be no change in the management of NACL.

Alembic Pharmaceuticals Ltd: Inspection update: Aleor Dermaceuticals Ltd., a 60:40 JV between Alembic Pharma and Orbicular

Pharmaceutical Technologies Pvt. Ltd. has completed USFDA inspection at its

formulation manufacturing facility located at Karakhadi, Gujarat, India; with two

observations. The inspection was carried out from 4th -8th February, 2019.

Alembic Pharmaceuticals Ltd: Approval update: The company's wholly owned step down subsidiary Orit Laboratories LLC has received

USFDA approval for Fenofibrate Tablets USP, 54 mg and 160 mg. Fenofibrate They

have an estimated market size of USD92mn as of December 2018 according to IQVIA.

Dynamatic Technologies Ltd: Boeing update: The company has handed over the 100th Shipset of Boeing P8 Power Cabinets. Dynamatic Technologies Limited is Boeing's sole global supplier of Power and Mission

Cabinets for the P8 Poseidon.

Siemens Ltd: Leasehold update: Siemens and LM Wind Power Blades (India) Private Limited (the "Proposed Assignee")

have executed a MoU for the transfer and assignment of the company's leasehold interest

in the property located at Halol Industrial Area (Phase Ill) of village Chandrapura,

Taluka: Halol, District: Panchmahal, Gujarat for a total consideration of

Rs193,50,00,000 in favour of the Proposed Assignee. The Proposed Assignment is

subject to receipt of all requisite statutory and regulatory approvals from the concerned

authorities and signing of firm agreements between the company and the proposed

assignee in this regard.

Harita Seating Systems Limited: Call Closed: We had initiated BUY on the stock at the price of Rs266 (coverage initiated on 26th

October 2015) for a target of Rs400. Post our recommendation, the stock was a con-

sistent performer. Due to better and improving operational benefits, we also saw the

stock hit an all time high of Rs1140 (on closing basis) which was very close to our fourth

revised target price of Rs1150 (on closing basis). We had even recommended to book

profits partially at target price of Rs900. With the recent corporate event (overnight) of

merger with Minda Industries Ltd; the development seems to be favouring Minda on a

grand scale. Minda has always been a value creator for its shareholders. Off course with

time, we will see value creation for Minda Industries via this acquisition, but not much

seems to be left for Harita shareholders, but for the share swap. Our assessment is of the

view that shareholders of Minda industries will be benefitted in the long run. Thus, we

close our call for Harita and recommend to book profits.

15 Feb 2019

Please Turn Over

USFDA Approval

NACL’s Equity Issue

EIL’s Agreement

Completion Of Inspection

Boeing Of Dynamatic

Siemens’ Agreement

Target Revision: Gufic

Target Revision: Gulshan

Harita Call Closed

RESULT UPDATE:

SKF India Ltd: The total revenue for the quarter under review came in at Rs7,677mn as compared to

Rs7,005mn, growth of 9.6%. EBITDA margins dropped to 15.8% when compared to

17.6% in the same quarter last year. The net profit grew by 2.7% to Rs885mn from

Rs862mn. EPS for the quarter stood at Rs17.2.

Outlook and Recommendations: The company has reported flat results for the quarter under review. There has been a

drop in the margins seen mainly due to the slowdown in the automotive market and

slowing industrial output. Overall, we feel the company is very much on line with the

expected performance for the year. We continue to be positive on the working of the

company and maintain a Buy with the target price of Rs2620 over a 12 months horizon.

Transpek Industry Ltd: The net sales for the quarter under review came in at Rs1,673mn as compared to

Rs965mn, growth of 73.3%. EBITDA margins improved to 16.8% from 16.4% in the

same quarter last year. The net profit stood at Rs144mn in quarter ending December

2018 as compared to Rs63mn in the same quarter last year. EPS for the quarter stood at

Rs25.8.

Outlook and Recommendations: The company has reported good set of numbers for the quarter under review, this is

contributed basically due to immense growth in the turnover of the company. The

company is performing far better than our expectation; but one cannot clearly ignore the

China factor. Despite knowing the risks and odds we continue to remain bullish on

Transpek and maintain our target price of Rs2000 with a perspective of 12 months.

NACL Industries Ltd: The net sales for the quarter under review came in at Rs1,957mn as compared to

Rs1,846mn, growth of 6%. EBITDA margins came in at 4.9% as compared to 7.2% in

the same quarter last year. The net profit grew by 5.8% to Rs15mn in quarter ending

December 2018 as compared to Rs14mn in the same quarter last year. Profits are clearly

driven by Other Income which stood at Rs59mn in quarter ending December 2018 as

compared to Rs39mn in the same quarter last year. The board of Directors on its meeting

held on 8th February 2019 approved and recommended for shareholders approval for

issue of equity shares (10937500 of face value of Rs1) of and convertible warrants

(25000000 of face value of Rs1) not exceeding Rs1,150mn to investors and promoter.

Outlook and Recommendations: The company has reported yet another quarter of absolutely flat results. Even though the

turnover has been improving over the quarters, the company has not been able to convert

the same in to better bottom-line which are not driven by operational efficiencies. The

company in the past had breached 2 target prices since the initiation of Rs29; we had

recommended to book profits partially as well, however, considering the current market

conditions and the struggle to achieve better profits, we revise the target price to Rs45

with a horizon of 12 months, we will review the operations and the capability of the

company and may upgrade the target price if favoured.

Vardhman Special Steels Ltd: The net sales for the quarter clocked growth of 43.1% to Rs3125mn as compared to

Rs2184mn in the same quarter last year. The Ebitda margins stood at 7% for the quarter.

The net profit dropped by 34.9% to Rs62mn from Rs95mn in the comparative quarter.

The EPS stood at Rs1.7.

Outlook and Recommendations: There has been pressure seen at the operational levels majorly due to the increase in the

raw material costs. Margin impact was due to slowdown in the Auto space. Although the

company has indicated a short term bearable stress for the sector of its interest, we would

like to take the cautious approach and tone down our target to Rs140 from the earlier

Rs225 for a 12 month horizon keeping in mind the headwinds to be seen ahead at the

macro level.

15 Feb 2019

Please Turn Over

Hit On Margins

Immense Growth

Reported

More Or Less Flat

Impact On Operational

Efficiency

RESULT UPDATE:

Thermax Ltd: The net sales for the quarter under review came in at Rs14,366mn as compared to

Rs11,170mn, growth of 28.6%. This was mainly led by the strong order carry forward.

EBITDA margins declined to 7.5% from 8.5% in the same quarter last year. There is an

exceptional item of Rs875mn pertaining to the impairment of goodwill related to the

stepdown subsidiary, Thermax Denmark ApS and recognition of deferred tax assets of

Rs940mn relating to brought forward losses of its subsidiary, Thermax Babcock &

Wilcox Energy Solutions Private Limited (TBWES). The net profit grew by 28.1% to

Rs750mn in quarter ending December 2018 as compared to Rs586mn in the same quarter

last year. EPS for the quarter stood at Rs6.6. Subsequent to the acquisition of the

remaining shares in TBWES on July 19, 2018, the Board of Directors have approved the

transfer of Boiler & Heater (B&H) business of Thermax Limited to TBWES through

slump sale, subject to the approval of shareholders. Consequently, the results of B&H

business have been classified as discontinued operations in the standalone financial

statements. However, this will not impact the consolidated group accounts.

Outlook and Recommendations: The company has reported decent set of numbers on the consolidated front with a slight

dip in the margins. The order book stands healthy giving visibility for the coming

quarters. We maintain a positive outlook on the company and continue with our Buy

recommendation on the stock with a target price of Rs1230 over a 12 months

perspective.

Federal-Mogul Goetze (India) Ltd: The net sales for the quarter under review came in flat at Rs3164mn as compared to

Rs3133mn, growth of 1%. However, there was an improvement seen at the operational

front with EBITDA margins at 12.9% from 11.9% in the same quarter last year. The net

profit grew by 18.1% to Rs183mn in quarter ending December 2018 as compared to

Rs155mn in the same quarter last year. EPS for the quarter stood at Rs3.3.

Outlook and Recommendations: The company has reported flat numbers for the quarter under review. Encouraging was

the operational efficiency depicted by the company through the cost control measures

adopted. The company could be a flattish in performance for the year due to the indirect

impact of the slowdown in the Auto space (as the company is more into auto component

segment). This does develop a cautious outlook for the company in tandem to the

industry scenario as a whole. But keeping the conviction with the working of the

company we continue with our Buy recommendation on the stock with a target price of

Rs750 over a 12 months perspective.

Triveni Turbine Ltd: The net sales for the quarter under review came in at Rs2,052mn as compared to

Rs1,650mn, growth of 24.3%. EBITDA margins declined to 16.2% from 19.5% in the

same quarter last year.The net profit degrew by 9.7% to Rs190mn in quarter ending

December 2018 as compared to Rs210mn in the same quarter last year. EPS for the

quarter stood at Rs0.6.

Outlook and Recommendations: The company continues to maintain its market share of 60%. The company continues to

maintain its focus on biomass, paper, and sugar co-generation; apart from its newly

entered segments such as waste to energy, combined cycle, oil and gas segment etc. The

Management is confident of having a healthy order book in the aftermarket sales and

better margins in the international space and expects the domestic business should also

grow in the coming quarters. In accordance to the approval of the shareholders (by

means of special resolution), on February 01, 2019 the company has bought back

66,66,666 equity shares of face value of Rs1 each at a price of Rs150 per share. All these

factors mentioned above sum up to our conviction in the stock and we continue to

maintain our target price of Rs150 with a perspective of 12 months.

15 Feb 2019

Please Turn Over

Decent Quarter

More Or Less Flat

Focused Approach

RESULT UPDATE:

ITD Cementation Ltd: The total revenue for the quarter under review came in at Rs6,405mn as compared to

Rs5,749mn, growth of 11.4%. EBITDA margins dropped to 13.3% from 13.7% in the

same quarter last year. The net profit grew by 91.4% to Rs338mn in quarter ending

December 2018 as compared to Rs177mn in the same quarter last year. EPS for the

quarter stood at Rs2.

Outlook and Recommendations: The company has reported decent numbers for the quarter under review. Also, yearly

performance of the company has been good despite a slight dip on the margins.

However, with a cautious outlook towards the prevailing market conditions and overall

industry performance, we reduce our target price from the earlier Rs225 to Rs180 over a

12 month horizon.

Hind Rectifiers Ltd: The net sales for the quarter came in at Rs685mn as compared to Rs292mn in the same

quarter last year, indicating a 135.1% growth. Ebitda margins stood at 10.1% for the

quarter. The net profit came in at Rs32mn as compared to Rs7mn in the comparative

quarter. The exceptional items for the quarter include profit on sale of Unit II of

Dehradun plant of Rs99.25lacs and loss on insurance claim of Rs51.66lacs. EPS for the

quarter stood at Rs1.9.

Outlook and Recommendations: Yet another quarter for the company with strong operational performance reported in the

quarter under review. With the strong order backlog and the growth momentum

remaining intact; the company has been reporting good set of numbers. With further

demand to pick up from the Indian Railways, the company is well poised to reap the

benefits in times to come. We continue with our Buy recommendation on the stock with

a target price of Rs175 over a 12 months perspective.

Morganite Crucible India Ltd: The net sales for the quarter under review came in at Rs313mn as compared to Rs274mn,

growth of 14%. EBITDA margins for the quarter under review came in at 17.4% as

compared to 21.0% in the same quarter last year. This is on the lower side due to

increased cost of basic raw materials which was also witnessed in the previous quarter as

well. The net profit grew by 10% to Rs36mn in quarter ending December 2018 as

compared to Rs33mn in the same quarter last year. EPS for the quarter stood at Rs12.9.

Outlook and Recommendations: The company has performed well in line with our estimates. The company (margins) has

once again being hit by increased cost of basic raw material, which has depressed the

margins earned. We continue to be bullish on this counter and maintain our third revised

target of Rs2300.

Remsons Industries Ltd: The net sales for the quarter under review came in at Rs381mn as compared to Rs335mn,

growth of 13.8%. EBITDA margins for the quarter stood at 5.6%. The net profit grew by

10.8% to Rs8mn in quarter ending December 2018 as compared to Rs7mn in the same

quarter last year. EPS for the quarter stood at Rs1.3.

Outlook and Recommendations: The company has reported flattish numbers for the quarter with dip in margins. The drop

is majorly attributed to the slowdown observed in the Automobile space. Hence, the

company would have to face some sluggishness for the next 3-4 months until the auto

sales pick up and get back to normalcy. Maintaining the positive stance on the working

of the company we continue with a Buy recommendation on the stock for a target price

of Rs155over a 12 month horizon.

15 Feb 2019

Please Turn Over

Decent Quarter

Strong Reported

Quarter

On The Growth Track

Hit On Margins

RESULT UPDATE:

Dynamatic Technologies Ltd: The net sales for the quarter under review came in at Rs3,666mn as compared to

Rs3,303mn, growth of 11%. EBITDA margins improved to 11.97% from 10.33% in the

same quarter last year. The net profit (continued operations only) grew to Rs57mn in

quarter ending December 2018 as compared to Rs20mn in the same quarter last year.

EPS for the quarter stood at Rs8.99 (considering the continued business).

Outlook and Recommendations: The company continues on its gradual path to recovery in terms of PAT. The margins

earned by the company are more or less in the same range. Interest burden is something

what the company needs to tackle pro-actively. As mentioned by us in the earlier

quarterly notes as well, this stock is definitely not for short term traders or speculators.

We continue with long term vision, however, we reduce our price target to Rs2750

(with a horizon of 12 months.) which would be reviewed in near future as the company is

reporting improved performance.

KCP Ltd: The net sales for the quarter under review came in at Rs2,730mn as compared to

Rs2,629mn, growth of 3.8%. EBITDA margins declined to 4% from 13.2% in the same

quarter last year. The margins were impacted mainly due to an increase in the raw

material costs. The company reported a net loss of Rs38mn in quarter ending December

2018 as compared to a profit of Rs144mn in the same quarter last year. On the segmental

front, Cement segment reported a growth of 4.6% whereas the Power, Engineering and

Hotel segments declined by 12.1%, 3.3% and 2.6% respectively. EPS for the quarter

stood at Rs(0.3).

Outlook and Recommendations: The company has reported subdued results for the quarter under review. The company

experienced a hit on its operational efficiency which thereby led to an impact on its

bottom line numbers. We however feel that the cement segment should report better

numbers in the quarters to follow. We continue with our Buy recommendation on the

stock with a target price of Rs150 over a 12 months perspective.

Aksh Optifibre Ltd: Management has indicated that due to postponement of deliveries of few orders by some

customers and temporary slowdown in the industry, there has been a small decline in the

turnover for the quarter under review. The net sales for the quarter under review dropped

by 10.5%; at Rs1,377mn as compared to Rs1,538mn in Q3FY18. EBITDA margins

improved to 17.7% from 11.8% in the same quarter last year. The net profit grew by

33.8% to Rs88mn in quarter ending December 2018 as compared to Rs65mn in the same

quarter last year. EPS for the quarter stood at Rs0.5. Management anticipates the project

of Dubai Optical Fibre plant which is currently drawing 4mn FKM capacity to be

commissioned by Q1FY20. Post this expansion the total optical drawing capacity of the

company will be 7mn FKM. This expansion is envisaged to enhance company’s

backward integration capabilities and its operational efficiencies.

Outlook and Recommendations: The business in which the company is involved (related to fibre optics and technology)

has immense potential in the country itself. The need for fibre optics will continue to

grow with the upcoming or the advent of 5-G in next 2-3 years. This should clearly

provide a vision and potential for the need of upcoming demand; provided, the resources

available are channelized in the proper direction. This clearly indicates the urge for

improving and increasing operations which will positively impact the top line as well as

the bottom line of the company. The company has an opportunity to reach new highs,

provided the Management becomes a little bit more aggressive and ambitious to achieve

the same. Considering the current scenario and the earnings of the company, we are

reducing the target price to Rs30 from the earlier Rs45 with a horizon of 12 months.

15 Feb 2019

Please Turn Over

On Recovery Track

Subdued Results

Future Potential Ahead

RESULT UPDATE:

Grauer & Weil (India) Ltd: The net sales for the quarter under review came in at Rs1,543mn as compared to

Rs1,266mn, growth of 21.9%. Margins have taken an absolute hit due to increased cost

of raw materials which are revolving around commodity chemicals. EBITDA margins

for the quarter ending December 2018 came in at 13.3% as compared to 24% in the same

quarter last year. The net profit for the quarter under review nose-dived to Rs136mn as

compared to Rs201mn in the same quarter last year. EPS for the quarter stood at Rs0.60.

Outlook and Recommendations: The company has taken an absolute hit on the bottom line due to increased cost of

commodity chemicals which are the raw materials. The china factor has come in play

and is affecting the company negatively. The segment of shoppertainment has been a

saviour to the company. Not to forget, the company has planned a capex to the tune of

Rs1200mn for FY19 whereas the capex for the next 2-4 years is around Rs4000mn. As

mentioned in the earlier notes as well, threat factors such as volatility in crude oil prices

and foreign exchange have surfaced thus affecting the margins of the company. On 1st

January, 2019, the company had informed about an explosion and outbreak of fire

accident at the plant in Vapi, due to which the production of this site was stopped then.

One must not forget the current focus of the company on exports, depreciation of rupee

and the upcoming capex can favour the company at the same time. Considering all these

factors, we reduce our target price to Rs65 (which was the initial target post two upward

revisions after the initiation at Rs45) with a horizon of 12 months. We will not hesitate to

upgrade the target price once things fall in place for GWIL.

Bharat Rasayan Ltd: For an off-season period, the net sales for the quarter under review came in at

Rs1,896mn as compared to Rs1,887mn, growth of merely 0.5%. EBITDA margins for

the quarter under review dropped to 20.80% from 23.79% in the same quarter last year.

Unlike any other agrochem company, BRL too was hit by increased cost of raw

materials. The net profit for the quarter came in at Rs214mn as compared to Rs231mn in

the same quarter last year. EPS for the quarter stood at Rs50.3.

Outlook and Recommendations: The performance of the company is dependent on monsoon and other climatic

conditions. Seasonal nature of the products and the outcome of the same was already

anticipated in our earlier notes propelled by cyclical nature of the business. The cost of

interest has increased due to the recent purchase of commercial papers which is to the

tune of approximately Rs600mn. Had this not been there, the company could have

reported more or less flat results at par with the previous year same quarter. However, if

one compares 9MFY19 to 9MFY18, the company has performed extremely well. With

the upcoming backward integration in sight of the management, one can be pleasantly

surprise with improved operational efficiencies in the next 6-8 quarters or so. The current

period appears to be that of consolidation, however with a cautiously bullish view, we

revise the target price to Rs5000 (which was also our second revised target post the

initiation at Rs2747) with a horizon of 12 months.

15 Feb 2019

Please Turn Over

Well Placed For Growth

Focused Approach

RESULT UPDATE:

Gufic Biosciences Ltd: The net sales for the quarter came in at Rs877mn as compared to Rs896mn, drop of

2.2%.The EBITDA margins stood at 13.6% marginally lower than 13.9% in Dec 2017.

The net profit dropped by 6.6% to Rs59mn as against Rs63mn in the same quarter last

year. The EPS for the quarter is Rs0.8.

Outlook and Recommendations: The company has reported flat results for the quarter. The net sales drop is attributed to

the undefined reconciliation done on the GST front as well as certain related party

transactions. Barring these, the performance has been in line with our expectation and on

track for FY19 projections. However, with a cautious outlook in terms of the markets

and the laggard of the current quarter, we tone down our target from the earlier Rs175 to

Rs150 over a 12 months horizon.

Gulshan Polyols Ltd: The net sales for the quarter under review came in at Rs1,725mn as compared to

Rs1,581mn, growth of 9%. The Company has reported growth of 40% in Starch

production and 2% in Sorbitol production during current quarter under review. EBITDA

margins marginally improved to 10.9% from 10.5% in the same quarter last year. The net

profit de-grew by 9% to Rs37mn from Rs41mn. EPS for the quarter stood at Rs0.8.

Outlook and Recommendations: Company has reported decent growth in top line as well on the margins front, the same

seems to be protected in the range of 10.4 to 10.9. The company took a hit on its

quarterly profitability mainly due to increase in raw material price i.e. corn. One should

also be aware of the fact that the promoters of the company are nibbling shares from the

open market which adds to our confidence level. The young Management has realised,

the need to be known to the customers and have started participating in exhibitions in

India and neighbouring countries, where they have exposure. However, looking at the

current market scenario and the upcoming impact of volatile nature of cost of corn, we

tone down the target price from Rs110 to Rs78 (which was the original price of

initiation) with a horizon of 12 months.

Nesco Ltd: The net sales for the quarter under review came in at Rs885mn as compared to Rs806mn

for the same quarter last year, recording a growth of 10%. The EBITDA margins came in

at 57% as compared to 72.6% in the same quarter last year. This is majorly attributed to

the higher raw material cost coupled with the moderate increase across the other

expenses as well. The net profit for the quarter ending Dec 2018 came in at Rs420mn as

compared to Rs438mn in the same quarter last year. The EPS for the quarter is at Rs6.

On the segmental front, the Nesco IT park revenues were lower than 1% compared to the

same quarter last year. BEC segment degrew by 7% while the Indabrator segment grew

by 78%. The Nesco foods segment has no comparative for the previous year.

Outlook and Recommendations: The company has reported tepid results for the quarter mainly led by the slowdown in

revenues from the Nesco IT park, uncertainties across the BEC revenue flow and overall

impact on the operating margins. The long term plans of the company are intact and we

maintain our positive stance with target price of Rs640 over a 12 months horizon.

Engineers India Ltd: The net sales for the quarter under review came in at Rs5,770mn as compared to

Rs4,734mn, growth of 21.9%. EBITDA margins dropped to 16.4% from 28.5% in the

same quarter last year mainly on account of increase in sub-contract and construction

material expenses. The net profit de-grew by 16.3% to Rs908mn in quarter ending

December 2018 as compared to Rs1,084mn in the same quarter last year. On the

segmental front, Consultancy and Engineering Projects degrew by 10.9% whereas

Turnkey Projects depicted a growth of 163.8%. The board has declared an interim

dividend of Rs3.25 per share (face value of Rs5 per share) for FY18-19. EPS for the

quarter stood at Rs1.4.

Outlook and Recommendations: The company has reported tepid results for the quarter under review. Decline on the

operational efficiency front for the company led to a drop in its PAT margins. We would

like to tone down our target to Rs200 from the earlier Rs250 keeping in mind the

slowdown in performance of the company as well as the markets.

15 Feb 2019

Please Turn Over

More Or Less Flat

Decent Quarter

Soft Quarter Reported

Tepid Results

ECONOMY:

Industrial production grows at 2.4% in December on the back of

manufacturing uptick India’s industrial production grew by 2.4% in December, a month after recording a 17

month low growth on account of poor performance from the manufacturing sector. As

per the data released by the Central Statistics Office depicted that mining and electricity

output reduced to 1% and 4.4% respectively in December and the manufacturing sector

expanded by 2.7% during the month. On the other hand, in November, 2018,

manufacturing which contributes 77.63% of IIP, dropped to 0.4% v/s 10.4% growth a

year ago.

Our comments: The lead indicators of IIP remain sluggish and yet maintain a favourable base and a

seasonally strong month has contributed to the uptick.

INDUSTRY:

Cement firms roll back price hikes, give up their premium valuations Backed by an ease in the cost pressures and an uptick in the demand for cement, a

revival in prices would benefit the cement stocks. Considering the situation to pass on

elevated operating costs, cement companies had recently raised the prices in north and

central India; but unfortunately the price hike couldn’t be sustained and were rolled back.

This means the outlook on realizations is not likely to improve anytime soon, thereby

making valuations unattractive, despite the correction from the highs in the previous

year.

Our comments: The demand for cement stocks is expected to improve post the general election.

Additionally, after the recent initiatives announced in the Union budget pertaining to the

real estate sector would aid the demand growth.

COMPANY:

Reliance Industries may sell Jio infra assets to reduce debt Brookfield Asset Management, the world’s top infrastructure and private equity

investor, intends to buy controlling shares in Reliance Jio telecom towers and fibre

assets valued over USD15bn (Rs1.07lakh-cr). The company is of the opinion that,

Brookfield would be in a position to carry huge debt when it’s backed by long-term

operating agreements. Jio, had recently announced of spinning off its tower and fibre

assets into two separate entities as a part of its deleveraging activity. Reliance Industries

Ltd is keen on retiring and refinancing a chunk of its Rs3lakh-cr debt mostly soaked up

to finance Jio’s disruptive roll out.

Our comments: If the aforesaid deal gets completed, it would be considered as the largest private equity

action, besides being one of the largest M&As in India.

Minda Industries to merge Harita Seating Systems with itself Minda Industries Ltd will merge automobile seating manufacturer Harita Seating Systems Ltd with itself. According to the exchange filing, shareholders of Harita Seating

will have two options:

Opting for shares of Minda Industries through a share swap. (152 shares of

Minda Industries for every 100 shares held of Harita Seatings)

Seeking allotment of non-convertible preference shares. (4 non-convertible

redeemable preference shares of Rs121.25 each)

The companies didn't indicate a timeline for merger completion in their filings.

Our comments: This acquisition is a huge positive for Minda Industries as the synergy would lead to

product diversification, collaboration on expertise and new industry segment addition.

15 Feb 2019

Growth In IIP

Prices Rolled Over

Plans To Reduce Debt

Harita To Merge With

Minda

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