india equity analytics for today - buy stocks of reliance industries limited with target price rs...

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HINDALCO : "BUY" 24th Dec 2013

Hindalco has expanded its aluminium capacity recently, low aluminium prices, sticky costs, delay in commencement of mining from captive

blocks and higher interest and depreciation costs may hit its profitability. In the near-term, there is lack of clarity over production from the

Mahan coal block for its Mahan smelter. Without captive coal block, the Mahan smelter is expected to face cost pressures, resulting in lower

return ratios over FY2013-15.So Clearance of Mahan coal block will be most awaited trigger for Hindalco. Mean While on the Positive Side We

can expect 7% growth on the Stock with a Target Price of Rs.132.............. ( Page:13-15)

IEA-Equity

Strategy

30th Dec, 2013

Tech Mahindra : "On a stronger footing.." "BUY" 23rd Dec 2013

Post merger with Satyam, strong demand traction in Telecom (Non BT) has improved and company's attractive deal win ratios make us

optimistic view on the stock. At a CMP of Rs 1691, relatively the stock is trading at a fair valuation, 12.8x of FY14E earnings (at USD of

Rs60/59.5 for FY14E/FY15E). We maintain “BUY” on the stock with a price target of Rs 2330 (revised from Rs 1875)..................... ( Page : 18-19)

Persistent System : "Persistently innovating.." "REDUCED" 23rd Dec 2013

We had initiated this stock at a CMP of Rs 526(on 16th Feb 2013) and now, it achieved its target of Rs 960. Despite better predictability of

growth and attractive visibility of its expansion in new emerging verticals, we advice to book profit on the stock because of its premium

valuation. However, sentiment could take a knock in the short run, since investors may prefer paying a premium for stocks with better earnings

visibility. Our view could be change with management guidance and post earnings of coming quarter................................................... ( Page : 16-

17)

Infosys : Bala exit; a pros and cons? "BUY" 26th Dec , 2013

Last week, V Balakrishnan a former CFO and member of Board director resigned from the company to turn entrepreneur of Private Equity

space. Currently, he is the head of Infosys business process outsourcing unit, the company's core banking software Finacle, its India business

and chairman of Infosys Lodestone. This was now the 8th senior and top level departure after the taking charges by Company founder Narayana

Murthy. At a CMP of Rs 3486, it trades at 19.2x FY14E and 16.7x FY15E earnings. We retain our “BUY” view on the stock with a target price of

target price of Rs 3620............................... ( Page : 11-12)

DCB : "REDUCE" 27th Dec 2013

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 : 8-10)

J&K BANK : "HOLD" 30th Dec 2013

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 : 5-7)

RELIANCE : Good Growth Ahead "BUY" 30th Dec 2013

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 : 2-4)

India Equity Analytics

BUY

1M 1yr YTD

Absolute 4 6 11

Rel. to Nifty 0.5 -1 -7

Current 1QFY14 4QFY1

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)

2

Target Price 1040

Previous Target Price -

18%

RELIANCEGood Growth Ahead

Stock Performance-%

Share Holding Pattern-%

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.

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

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.

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.

1 Yr Price Movement Vs Nifty

(Source: Company/Eastwind)

283929

Average Daily Volume 52019

Nifty 6313

Company Update

CMP 878

Upside 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

Financials

Change from Previous -

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

"BUY" 30th

Dec' 13


3

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

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….


4


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

5

Mkt Capital (Rs Cr)



Stock Performance

52wk Range H/L

Change from Previous

J&k Bank Vs Nifty


21053

Nifty 6314

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.

Average Daily Volume

6841

Previous Target Price

Market Data

Upside

1695/1130

BSE Code 532209

NSE Symbol J&KBANK

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.

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


6

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

7

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

8

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

Average Daily Volume

1437


Market Data

Upside

"Book Profit"27th Dec,2013


9

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

10

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

Infosys

How do we see the impacts of this buzz?

1M 1yr YTD

Absolute 4.1 52.1 27.2

Rel. to Nifty -0.3 44.9 23.3


Promoters 16.04 16.04 16.04

FII 40.52 40.55 39.42

DII 17.51 18.7 18.33

Others 25.93 24.71 26.21

Financials2QFY14 1QFY14 (QoQ)-% 2QFY13 (YoY)-%

Revenue 12965 11267 15.07 9858 31.5

EBITDA 2836.9 2664 6.49 2597 9.2

PAT 2406.9 2374 1.39 2369 1.6

EBITDA Margin 21.9% 23.6% (170bps) 26.3% (440bps)

PAT Margin 18.6% 21.1% (250bps) 24.0% (540bps)

11

NSE Symbol INFY

Change from Previous 7%

Behind the top-level departure, only one cause reflects on the picture that is the tussle

of CEO post. Current CEO Shibulal is going to complete its tenure by next years.

Among the front-runner of this post, Balakrishnan was strong contender for the post

of CEO race.

52wk Range H/L 3570/2190

Stock Performance

160944

(a) We think, there would not be any major impact on qualitative and quantitative sense

and company would not see any major gap between sales executives and clients. Yes,

the magnitude of the exits could create a leadership vacuum. However, very soon

company will try to turn into smoothie organization structure.

Previous Target Price 3390

Upside 4%

BSE Code 500209

Mkt Capital (Rs Crores)


Nifty 6268

Bala exit; a pros and cons?

CMP 3486

Target Price 3622

Company update BUY Does Balakrishnan departure from Infosys would affect the company’s bread and

butter?

Last week, V Balakrishnan a former CFO and member of Board director resigned from

the company to turn entrepreneur of Private Equity space. Currently, he is the head of

Infosys business process outsourcing unit, the company's core banking software

Finacle, its India business and chairman of Infosys Lodestone. This was now the 8th

senior and top level departure after the taking charges by Company founder Narayana

Murthy. Market Data

1 year forward P/E

Rs, Crore



(d) Post Narayana Murthy, company has committed for future transformational changes

and next generation growth plan. Recently, the company has undertaken a clear shift in

direction where it has been focusing on higher-margin businesses, a strategy that rival

TCS that has successfully implemented.

For near term, there could be some small sort of rally on the stock because of this knee

jerk and as the December quarter is generally expected to be a bit tepid for the

technology sector. Although, the street will forget all things after a good quarter

earnings or a strong commentary on the business outlook. For long term, we do not

see any major pressure because of co’s poster boy exit.

(b) V Balakrsihnan’s resignation is not one night decision and not an affect of internal

hiccups. Post declaration of his resignation V Balakrishnan stated to media “it was my

long term plan and we were waiting for SEBI approval for my new Private Equity firm”.

Even, he sold 1,00,000 shares in the company for Rs 33 crore in the open market on 9th

Nov 2013 (50,000 shares each held by his daughters), it indicates its earlier decision.

Therefore, we think Bala’s exit is a part of an ongoing strategy to reshuffle the top

management at Infosys.

(c) The top management conundrum has not been new to Infosys. Even, as Infosys’s

hyper-growth story played out over the course of three decades, powered by not just its

seven cofounders but also several talented employees that came on later on. Even, most

of company founders have churned out and company has been working for growth story

and committing for strategy 3.0.


"BUY"26th Dec' 13


12


Financials


Considering the revised guidance by management and its growth priority than margin

inching up strategy, we are positive on the stock. At a CMP of Rs 3486, it trades at 19.2x

FY14E and 16.7x FY15E earnings. We retain our “BUY” view on the stock with a target

price of target price of Rs 3622.

Infosys.

View and Valuation: Infosys seems to be on its way to rediscovering its past mojo with revenue momentum

kicking, its past strategy of under-promising and over delivering - remember present

guidance now factors flat gorwth in next 2 qtrs, and the NRN invisible hand in play.

Further announcement of strategic acquisitions, better utilization of cash balances, ramp-

up in sales investment ,better deal win, consistent client traction and revenue

momentum would help the company to bridge the gap with rivals such as TCS and HCL

Tech.


Rs in Cr, FY10 FY11 FY12 FY13 FY14E FY15E

Sales, INR 22742 27501 33734 40352 48659.6 55939.5

Employee Cost 12085 14856 18340 22565 27736.0 32165.2

Other expenses 2792 3677 4671 6254 7785.5 9230.0

Total Expenses 14877 18533 23011 28819 35521.5 41395.2

EBITDA 7865 8968 10723 11533 13138.1 14544.3

Depreciation 905 854 928 1099 1325.3 1523.5

Other Income 982 1211 1904 2365 2433.0 3356.4

EBIT 7942 9325 11699 12799 14245.8 16377.1

Interest Cost 0 0 0 0 0.0 0.0

PBT 7942 9325 11699 12799 14245.8 16377.1

Tax 1681 2490 3367 3370 3846.4 4421.8

PAT 6261 6835 8332 9429 10399.4 11955.3

Growth-%

Sales 4.8% 20.9% 22.7% 19.6% 20.6% 15.0%

EBITDA 9.3% 14.0% 19.6% 7.6% 13.9% 10.7%

PAT 4.6% 9.2% 21.9% 13.2% 10.3% 15.0%

Margin -%

EBITDA 34.6% 32.6% 31.8% 28.6% 27.0% 26.0%

EBIT 34.9% 33.9% 34.7% 31.7% 29.3% 29.3%

PAT 27.5% 24.9% 24.7% 23.4% 21.4% 21.4%

Expenses on Sales-%

Employee Cost 53.1% 54.0% 54.4% 55.9% 57.0% 57.5%

Other expenses 12.3% 13.4% 13.8% 15.5% 16.0% 16.5%

Tax rate 21.2% 26.7% 28.8% 26.3% 27.0% 27.0%

Valuation

CMP 2615.1 2765.1 2865.0 2400.0 3486 3486

No of Share 57.4 57.4 57.4 57.4 57.4 57.4

NW 23049.0 25976.0 31332.0 37994.0 45236.1 53832.6

EPS 109.1 119.0 145.1 164.2 181.1 208.2

BVPS 401.7 452.4 545.6 661.7 787.8 937.5

RoE-% 27.2% 26.3% 26.6% 24.8% 23.0% 22.2%

Dividen Payout ratio 25.1% 45.9% 24.0% 45.1% 23.8% 20.7%

P/BV 6.5 6.1 5.3 3.6 4.4 3.7

P/E 24.0 23.2 19.7 14.6 19.2 16.7

Hindalco Industries Ltd.

124

132

NA

7%

NA

500440

25497

17848

6284

1M 1yr YTD

Absolute -1.3 11.3 8.7

Rel. to Nifty -2.7 0.5 0.0

2QFY14 1QFY14 4QFY13

Promoters 37.0 37.0 32.1

FII 24.9 24.8 24.5

DII 14.4 14.3 15.5

Others 23.7 23.9 28.0

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

Net Revenue 6585 4.6 5.1 6296 6266

EBITDA 540 4.8 12.8 515 478

Depriciation 196 13.7 7.3 173 183

Tax 83 -5.9 -17.4 88 101

PAT 357 -0.5 -24.7 359 474(In Crs)

13

Average Daily Volume (Nos.)

The PM's Project Monitoring Group has sorted out issues with regards to Hindalco's 7000

Cr rupees Utkal Alumina refinery among others. On a medium-term view we would still

be positive on Hindalco Industries. As the improvement happens across economies

whether it is US, Europe, to an extent in China also we think Hindalco is very well

positioned.

Market DataBSE Code

HINDALCONSE Symbol

52wk Range H/L


137/83

Upside


Company UpdateCMP

Target Price


Novelis, leader in aluminum rolling and recycling completed $400 millionexpansion

program in South Korea. The expansion of its Yeongju and Ulsan plants increases the

company's production capacity in the region by more than 50 percent to approximately

one million metric tons of aluminum sheet per year.Hindalco has expanded its smelting

capacity by 359kt via Mahan greenfield project.Aruna Sundarajan is back and set to

take charge as Industries new additional chief secretary and looks forward

optimistically for a better industrial climate focusing on young entrepreneurship.


Stock Performance-%


1 yr Forward P/B

Source - Comapany/EastWind Research

Hindalco Industries, the world's largest Aluminium rolling company, disappointed with

the second quarter net profit declining marginally to Rs 357Cr from Rs 358.9Cr y-o-y,

dented by higher finance cost. Bottom line was largely supported by other income;

otherwise profit would have much lower than currently reported. Other income, which

included Rs61 Cr non-recurring income and dividend of Rs 100 Cr from subsidiaries, more

than doubled to Rs 280Cr in three-month period ended September 2013 from Rs 132.4Cr

in a year ago period. Net sales increased over 2 percent year-on-year to Rs 6245Cr during

September quarter. EBITDA climbed 3 percent Y-o-Y to Rs 481Cr while operating profit

margin improved marginally to 7.7 percent from 7.63 percent during the same period on

higher inventory. Finance cost surged 6.5 times on a yearly basis to Rs 183Cr in the

quarter gone by, given higher average borrowing. Revenue from Aluminium business

grew 11 percent y-o-y to Rs 2,342.6Cr, driven by higher volumes, but EBIT margin of the

same business declined to 7.1 percent during 2QFY14

During the same period, total metal production increased to 1,32,000 ton (excluding

Mahan production) from 1,28,000 ton while alumina production (excluding Utkal alumina

production) rose to 3,34,000 ton from 3,28,000 ton y-o-y, but sequentially it was down

from 3,48,000 ton due to a planned ramp down at one of refineries. In case of copper

business, revenue slipped 2.2 percent Y-o-Y to Rs 3,974Cr in the quarter gone by, but its

EBIT margin expanded to 6 percent. Cathode production declined to 77,000 ton from

78,000 ton y-o-y.

Nifty

"Buy"24 Dec' 13


0.0

0.5

1.0

1.5

2.0

2.5

3.0

0

100

200

300

400

500

600

700

800

Mar

-06

Sep

-06

Mar

-07

Sep

-07

Mar

-08

Sep

-08

Mar

-09

Sep

-09

Mar

-10

Sep

-10

Mar

-11

Sep

-11

Mar

-12

Sep

-12

Mar

-13

Sep

-13

PRICE BV 1x 2x

3x 4x P/BV

LME Price/Ton

LME Price/Ton

FY10 FY11 FY12 FY13

6761 7965 9041 8779

11752 15902 17575 17305

1963 2004 1822 930

599 602 802 768

138254 74799 178990 225246

FY11 FY12 FY13 FY14E

72078 80821 80193 86000

431 783 1012 1360

72509 81604 81205 87360

64102 72856 72395 78572

7976 7965 7798 7428

2725 2645 2822 2700

1839 1758 2079 2500

964 786 886 825

366 211 -20 0

57 -50 16 0

2456 3397 3027 2763

8.5 10.6 8.6 7.3

14




OPERATING MATRIX

Aluminium Revenue

P/L PERFORMANCE

Aluminium Results

Copper Results

Capital Employed

Out Look : Although Hindalco has expanded its aluminium capacity recently, low

aluminium prices, sticky costs, delay in commencement of mining from captive blocks

and higher interest and depreciation costs may hit its profitability. In the near-term,

there is lack of clarity over production from the Mahan coal block for its Mahan smelter.

Without captive coal block, the Mahan smelter is expected to face cost pressures,

resulting in lower return ratios over FY2013-15.So Clearance of Mahan coal block will be

most awaited trigger for Hindalco. Mean While on the Positive Side We can expect 7%

growth on the Stock with a Target Price of Rs.132.

Expenditure

EBITDA

Depriciation

Copper Revenue

Net Revenue from Operation

Other Income

Total Income


Minority Interest

Share in Profit/(Loss) of Associates

PAT

ROE%

Tax

Interest Cost


90000

95000

100000

105000

110000

115000

120000

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

Primary Aluminium

340000

360000

380000

400000

420000

440000

460000

480000

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

Copper

FY10 FY11 FY12 FY13

191 191 191 191

21346 28824 31179 34597

21545 29023 31911 35330

10763 13736 37127 49857

13236 13956 3731 6442

3901 4138 5289 5691

9742 12980 11052 9613

1016 1077 1377 1610

69235 84376 101402 120590

7876 12272 15429 16435

21124 20133 19871 21490

5801 13131 22798 33831

1983 2035 3774 3170

11275 14096 13246 14332

6544 8000 8017 8952

2195 2556 3296 3770

1134 1164 2159 3257

69235 84376 101402 120590

FY10 FY11 FY12 FY13

1.6 1.4 0.8 0.5

20.5 12.8 17.7 15.8

10.8 11.1 9.9 11.2

16.0 18.0 13.7 12.0

1.9 2.0 1.6 1.8

FY10 FY11 FY12 FY13

5542 6929 8534 6852

-598 -703 -932 -3874

4944 6226 7602 2978

-5448 -6710 -13220 -13765

428 825 6237 10278

-76 341 619 -510

15



Trade payables

Short-term provisions

Total liabilities

Intangibles

Cash and bank balances

Tangible assets

Capital work-in-progress

Long-term loans and advances

Inventories

Trade receivables


B/S PERFORMANCE

Share capital

Reserve & Surplus

Total equity

Long-term borrowings

Short-term borrowings

Long-term provisions

Cash from Operation

Short-term loans and advances

Total Assets

RATIOS

P/B

EPS

Debtor to Turnover%

Creditors to Turnover%

Inventories to Turnover%


CASH FLOWS

Trading At :

Changes In Working Capital

Net Cash From Operation

Cash From Investment

Cash from Finance

Net Cash Flow during year


0

20

40

60

80

100

120

140

160

0

1000

2000

3000

4000

5000

6000

7000

NIFTY HINDALCO

Persistent System.

-

1M 1yr YTD

Absolute 24.1 105.2 91.2

Rel. to Nifty 23 99.4 84.6


Promoters 38.96 38.96 38.96

FII 15.28 14.84 12.39

DII 21.23 19.31 21.59

Others 24.53 26.89 27.06

Financials


Revenue 432.37 357.29 21.0 326.86 32.3

EBITDA 100.8 76.8 31.3 89.06 13.2

PAT 60.8 57.1 6.5 44.71 36.0

EBITDA Margin 23.3% 21.5% 180bps 27.2% (390bps)

PAT Margin 14.1% 16.0% (190bps) 13.7% 40bps

16

Persistent Sytem’s management remains confident of FY14 with deal pipeline being

strong and remains focused on increasing the share of IP-led revenues in its portfolio.

They expect to see more than 15% USD revenue growth for FY14E.

1 year forward P/E-x

Rs, Crore


View and Valuation: The company’s focus is shifting greater proportion to IP led services

and company has marquee clientele in cutting-edge technologies around cloud,

mobility, collaboration and analytics; witnessing faster growth. Considering the

company’s premium valuation, we advice “Book Profit” on the stock. At a CMP of Rs

1007, stock trades at 15.9x FY14E earnings. Our view could be change with

management guidance and post earnings of coming quarter.

Persistent's management suggests that deal pipeline are looking strong and seeing

good activity and traction in the market across the board. Its focus on some of newer

technologies like cloud, analytics and mobility are gaining a lot of traction because of

pickup in demand environment. The emerging themes, (CAMB) Cloud, Analytics,

Mobility, and Big data could also see strong demand traction ahead. Because of

actively investment in these themes, management is very confident to see healthy

growth and also they expressed their confidence to beat the NASSCOM guidance (12-

14% revenue growth for FY14E).

52wk Range H/L 1023/477


Clients Metrics: During the quarter, company added 2 clients at 32 under medium

category( >$1mn to $3mn) and 1 client at 16 from large ( > $ 3Mn) . Revenue from top-1

client was improved from 21.2% (1QFY14) to 22.5% . DSO at 62days, almost 12

quarters low.

4029


Margin ramp up: During the quarter, Its EBITDA margin improved by 180bps to 23.3%,

positively impacted by currency gain(270bps), while during the quarter company wage

hike to its off shore employee at a range of 8-9% was impacted margin by 310 bps

adversely. However, management expects to maintain margin at a range of 24-25% for

FY14E.

"Persistently innovating.."

CMP 1007

Target Price 960

Company update Book Profit We had initiated this stock at a CMP of Rs 526(on 16th

Feb 2013) and now, it achieved

its target of Rs 960. Despite better predictability of growth and attractive visibility of

its expansion in new emerging verticals, we advice to book profit on the stock because

of its premium valuation. However, sentiment could take a knock in the short run,

since investors may prefer paying a premium for stocks with better earnings visibility.Change from Previous

Recently , Persistent System reported superlative set of numbers during the 2QFY14

with 21%(QoQ) sales growth in INR term and 8.6%(QoQ) growth in USD term led by

38%(QOQ) growth on the intellectual property (IP) revenues. PAT growth was at 6.5%

(QoQ).

With the potential revenue growth, strong deal pipeline and multi-year relationships

with marquee clientele in the Infrastructure vertical, we expect for better earning

visibility across niche IT players.

Nifty


6274

Stock Performance

NSE Symbol PERSISTENT


BSE Code 533179

Market Data

Previous Target Price 890

Upside -

"Book Profit"23rd Dec' 13


17


Persistent System.


Financials


Rating and Price Target Chart Updation Detail


Rs, in Cr. FY10 FY11 FY12 FY13 FY14E FY15E

Sales 601.16 775.84 1000.3 1294.5 1657.54 2053.93

Employee Cost 368.74 481.62 599.05 719 895.07 1119.39

Cost of technical professionals 0 30.67 41.68 54 82.88 102.70

Other expenses 86.05 105.24 135.2 218 290.07 379.98

Total expenses 454.79 617.53 775.93 990.78 1268.02 1602.06

EBITDA 146.37 158.31 224.37 303.72 389.52 451.86

Depreciation 33.52 42.39 61.1 78 93.54 84.18

Other Income 11.23 34.44 34.44 34.44 66.30 71.89

EBIT 112.85 115.92 163.27 225.44 295.98 367.68

Interest Cost 0 0 0.00 0.03 0.00 0.00

Profit (+)/Loss (-) Before Taxes 124.08 150.36 197.71 259.851 362.29 439.57

Provision for Taxes 9.05 10.62 55.09 75.37 108.69 131.87

Net Profit (+)/Loss (-) 115.03 139.74 142.62 184.481 253.60 307.70

Growth-% (YoY)

Sales 1.2% 29.1% 28.9% 29.4% 28.0% 23.9%

EBITDA 60.2% 8.2% 41.7% 35.4% 28.3% 16.0%

PAT 74.1% 21.5% 2.1% 29.4% 37.5% 21.3%

Expenses on Sales-%

Employee Cost 61.3% 62.1% 59.9% 55.5% 54.0% 54.5%

Other expenses 14.3% 13.6% 13.5% 16.9% 17.5% 18.5%

Tax rate 7.3% 7.1% 27.9% 29.0% 30.0% 30.0%

Margin-%

EBITDA 24.3% 20.4% 22.4% 23.5% 23.5% 22.0%

EBIT 18.8% 14.9% 16.3% 17.4% 17.9% 17.9%

PAT 19.1% 18.0% 14.3% 14.3% 15.3% 15.0%

Valuation:

CMP 310 366.7 409.2 541 1007 1007

No of Share 4 4 4 4 4.00 4.00

NW 639.0 747.1 840.5 1018.3 1234.4 1504.7

EPS 28.8 34.9 35.7 46.1 63.4 76.9

BVPS 159.7 186.8 210.1 254.6 308.6 376.2

RoE-% 18.0% 18.7% 17.0% 18.1% 20.5% 20.4%

P/BV 1.9 2.0 1.9 2.1 3.3 2.7

P/E 10.8 10.5 11.5 11.7 15.9 13.1

Date Update Detail CMP View Target Price

16-Feb-13 Initiation 526 BUY 580

25-Jun-13 Company Update 499 BUY 580

7-May-13 Result Update 514 BUY 580

31-Jul-13 Result Update 522 BUY 580

18-Sep-13 Company Update 573 BUY 642

26-Sep-13 Company Update 623 BUY 834

9-Oct-13 Company Update 682 BUY 834

22-Oct-13 Result Update 739 BUY 890

13-Dec-13 Company Update 876 BUY 960

23-Dec-13 Company Update 1007 Book Profit

Tech Mahindra

BUY

24%

1M 1yr YTD

Absolute 9.3 99 39.2

Rel. to Nifty 6.8 93 32.7


Promoters 36.46 47.17 47.41

FII 32.59 26.79 27.34

DII 15.13 15.83 16

Others 15.82 10.21 9.25

Financials


Revenue 4771.5 4103.2 16.3 3523.7 35.4

EBITDA 1110.85 864.5 28.5 756.9 46.8

PAT 718.2 686.3 4.6 455.9 57.5

EBITDA Margin 23.3% 21.1% 220bps 21.5% 150bps

PAT Margin 15.1% 16.7% (160bps) 12.9% 220bps

18

Win- Win on all geographies: During the 2QFY14, winning trio was seen across

geographies. US (contributes 33% on sales) grew by 8%, RoW (23% on sales) by 9.4%

(QoQ). While Europe (contributes 44% on sales) was marginally up by 2.4%(QoQ) in USD

term. Post earning management quoted for better outlook in Europe with greater

traction in Australia and Africa in near term.

All-rounder across all verticals: During the quarter, company reported 2.5% growth in

Telecom, 4.7% growth in manufacturing, media including entertainment, BFSI and

others each in USD term. While Retail, Transport and Logistic snapped a larger growth

figure of 22% sequentially. The company is focusing on BFSI, manufacturing and

telecom.

BT on Slide: The management said revenues from British Telecom (BT) continued to

slide. Those were 12% of consolidated revenues in the June quarter. It believes revenues

from BT will be under pressure.

1 year forward P/E-x

Rs, Crore



Post merger with Satyam, strong demand traction in Telecom (Non BT) has improved

and company's attractive deal win ratios make us optimistic view on the stock. At a

CMP of Rs 1691, relatively the stock is trading at a fair valuation, 12.8x of FY14E

earnings (at USD of Rs60/59.5 for FY14E/FY15E). We maintain “BUY” on the stock with

a price target of Rs 2330 (revised from Rs 1875).


Stock Performance

View and Valuation: Recently, company’s management explained its 6-pillar strategy

i.e., selling 6 service lines of IT, infr- management, network management, security

services, value added services and services such as analytics to telcos. Currently, non-IT

services contribute 33% of telecom revenues for the company. Further, it is focusing on

segments that are growing faster such as platforms, enterprise, mobility and NMACS

(networks, mobility, analytics, cloud and security).

Market Data

6274

Mkt Capital (Rs Crores) 42991

"On a stronger footing.."

Company update

CMP 1844

Target Price 2330

Broad-based performance with positive outlook, positive view retained;

The company remains confident on demand and expects client budgets to remain at

the same levels in FY15E. It announced 2 large deals in the enterprise solutions

(previously Mahindra Satyam) and has a healthy deal pipeline.Previous Target Price 1875

Green flag on Margin front: EBITDA margin expanded 222 basis points sequentially to

23.3% aided by a weaker rupee. Despite sweet flavor on margin front, management is

still cautious for coming quarter due to Furloughs .

Recently, following the footsteps of other larger giants such as TCS and Infy, Tech

Mahindra revealed its earning story better than street expectations for 2QFY14. Sales

grew by 16.3% (QoQ) in INR term led by healthy growth across all segments, verticals

and geographies. In USD term, sales grew 4.7% (QoQ) better than all nearest peers

barring TCS. PAT was up by 4.7% (QoQ) adversely impacted by lower other income and

forex loss of Rs 26 Cr during the quarter. The company had forex gains of Rs 134 Cr in

the June quarter.

BSE Code 532755

NSE Symbol TECHM

52wk Range H/L 1872/895

Nifty


Upside 26%


"BUY"23rd Dec' 13


19

Financials


Tech Mahindra.


Operating Metrics


Client contribution to revenue-% 1QFY13 2QFY13 3QFY13 4QFY13 1QFY14 2QFY14

Customer Active 484.00 475.00 475.00 516.00 567.00 576.00

Top 10 clients 50.0% 51.0% 50.0% 50.0% 49.0% 48.0%

Top 5 clients 40.0% 41.0% 39.0% 37.0% 37.0% 36.0%

Top client 17.0% 14.0% 15.0% 13.0% 12.0% 12.0%

Revenue mix - onsite/offshore (%)

Onsite 48.0% 48.0% 48.0% 48.0% 51.0% 51.0%

Offshore 52.0% 52.0% 52.0% 52.0% 49.0% 49.0%

Employee Metrics

Utilisation % 75.0% 74.0% 76.0% 77.0% 76.0% 75.0%

Attrition % 17.0% 16.0% 16.0% 16.0% 15.0% 16.0%

Rs, Cr FY12 FY13 FY14E FY15E FY16E

Net Sales(mn)-USD 1157 2633 3124.01 3592.61 4023.73

Net Sales 11702.4 14332.0 18744.06 21376.04 24343.54

Employee Cost 6591.9 8099.5 10309.24 11756.82 13388.95

Operation and other expenses 2210.1 2287.3 3373.93 3847.69 4381.84

Subcontracting Cost 948.6 882.0 1405.80 1603.20 1947.48

Total Expenses 9750.6 11268.8 13683.17 15604.51 17770.79

EBITDA 1951.8 3063.2 5060.90 5771.53 6572.76

Depreciation 319.0 389.6 509.54 581.08 661.75

Other Income 501.3 212.2 281.16 213.76 243.44

Extra Ordinery Items 36.9 -160.1 -209.39 -238.79 -121.72

EBIT 1632.80 2673.60 4551.36 5190.45 5911.00

Interest Cost 107.3 92.1 98.04 91.37 86.93

PBT 2063.7 2633.6 4525.09 5074.05 5945.79

Tax 228.9 647.9 1176.5 1319.3 1545.9

PAT 1834.8 1985.7 3348.6 3754.8 4399.9

Growth-%

Sales-USD 2.7% 127.6% 18.6% 15.0% 12.0%

Sales 13.8% 22.5% 30.8% 14.0% 13.9%

EBITDA 11.9% 56.9% 65.2% 14.0% 13.9%

PAT 11.9% 8.2% 68.6% 12.1% 17.2%

Margin -%

EBITDA 16.7% 21.4% 27.0% 27.0% 27.0%

EBIT 14.0% 18.7% 24.3% 24.3% 24.3%

PAT 15.7% 13.9% 17.9% 17.6% 18.1%

Expenses on Sales-%

Employee Cost 56.3% 56.5% 55.0% 55.0% 55.0%

Subcontracting Cost 8.1% 6.2% 7.5% 7.5% 8.0%

Operation and other expenses 18.9% 16.0% 18.0% 18.0% 18.0%

Tax rate 11.1% 24.6% 26.0% 26.0% 26.0%

Valuation

CMP 652.5 1081.7 1844 1844 1844

No of Share 23.2 23.2 23.2 23.2 23.2

NW 4815.8 5529.1 8741.77 12360.68 16624.68

EPS 79.0 85.5 144.1 161.6 189.4

BVPS 207.3 238.0 376.31 532.10 715.66

RoE-% 38.1% 35.9% 38.3% 30.4% 26.5%

Dividen Payout-% 3.2% 3.0% 4.1% 3.6% 3.1%

P/BV 3.1 4.5 4.9 3.5 2.6

P/E 8.3 12.7 12.79 11.41 9.74

20

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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

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india equity analytics for today - buy stocks of reliance industries limited with target price rs...

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