market snapshot todays top research idea retail: control...

24 April 2020

Investors are advised to refer through important disclosures made at the last page of the Research Report. Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.

Research Team ([email protected])

Equities - India Close Chg .% CYTD.%

Sensex 31,863 1.5 -22.8

Nifty-50 9,314 1.4 -23.5

Nifty-M 100 12,965 1.3 -24.2

Equities-Global Close Chg .% CYTD.%

S&P 500 2,798 -0.1 -13.4

Nasdaq 8,495 0.0 -5.3

FTSE 100 5,827 1.0 -22.7

DAX 10,514 0.9 -20.6

Hang Seng 9,704 0.3 -13.1

Nikkei 225 19,429 1.5 -17.9

Commodities Close Chg .% CYTD.%

Brent (US$/Bbl) 20 3.4 -69.8

Gold ($/OZ) 1,731 1.0 14.1

Cu (US$/MT) 5,136 0.5 -16.5

Almn (US$/MT) 1,476 -0.1 -17.2

Currency Close Chg .% CYTD.%

USD/INR 76.1 -0.8 6.6

USD/EUR 1.1 -0.4 -3.9

USD/JPY 107.6 -0.1 -0.9

YIELD (%) Close 1MChg CYTDchg

10 Yrs G-Sec 6.1 -0.17 -0.5

10 Yrs AAA Corp 7.4 -0.10 -0.2

Flows (USD b) 23-Apr MTD CYTD

FIIs -0.02 -0.14 -6.73

DIIs 0.04 -0.22 9.88

Volumes (INRb) 23-Apr MTD* CYTD*

Cash 514 522 453

F&O 21,079 11,212 14,634

Note: *Average

Today’s top research idea Market snapshot

Chart of the Day: Retail (Control the controllable, Survival of the fittest)

Retail: Control the controllable; Survival of the fittest Expect cost of retailing to fall 15–20pp, led by cost-cutting in

marketing/advertising activity, on account of variable rental costs and savings

from closed stores.

Even rental cost is expected to see some waiver given the negotiations

underway, as per our channel checks. Hence, the cost of retailing can be

further reduced by 5–7pp, in effect reducing cash burn to 10–15% of revenue

during lockdown.

Inventory could be a key pain point once normalcy has returned as inventory

typically comprises 30–45% of retailers’ balance sheets (FY19).

The extent of the impact on each company would depend on: a) the number

of private labels and brand ownerships, b) astute inventory management,

and c) the extent of inventory holding capacity.

However, it may be wise to bet on players with sound execution capabilities

and stable balance sheets, which could take advantage once the cycle

revives. We prefer TRENT, ABFRL, and VMART.

Cos/Sector Key Highlights

Retail Control the controllable, Survival of the fittest

India Strategy Insight into market-cap changes since Feb’20 peak

Technology Could global banks’ IT spends surprise positively?

Bharti Infratel EBITDA declines 12% QoQ to INR13b on LTL – Pre-Ind-AS 116 basis

Alembic Pharma Good show in key geographies (US/India) drives earnings

Mahindra CIE Operating performance in line; India beats estimates, EU disappoints

India Life Insurance

COVID-19 derails business growth – Private players’ Individual WRP declines ~40% YoY for Mar’20 (+5% for FY20)

EcoScope Long-dated securities get RBI support via fifth ‘Operation Twist’

Expert Speak

ECONOMY: Insights from interaction with Finance Minister of Kerala

FINANCIALS: Gradual recovery in past few weeks

AVIATION: Boarding (for aviation industry) to take time

Cost of retailing (as a % of sales, FY20E)

Source: MOFSL, Company

Research covered

24 April 2020 2

Govt decides to suspend up to 1 year IBC provisions that trigger fresh insolvency proceedings: Report In a major relief for corporate borrowers hit hard by the coronavirus pandemic, the government has decided to amend the insolvency law to suspend up to one year provisions that trigger…

PM Modi, Sitharaman to meet on Friday to finalise second stimulus package Prime Minister Narendra Modi and Finance Minister Nirmala Sitharaman will again meet on Friday to finalise a second stimulus package for industry, the poor and farmers. An announcement is expected within the next 24-48 hours. Friday's meeting follows a wide range of deliberations held within the government and with eminent experts. However, there may not be a ‘big-bang’ stimulus package and the government thinking is to go for smaller, targeted announcements.…

RBI's liquidity plan for non-bank lenders falters The Reserve Bank of India's attempt to improve funding for the non-banking finance companies through the banks' channel is faltering with a special liquidity window receiving bids for just half the amount that was on offer…

Sebi eases valuation norms for debt mutual funds The Securities and Exchange Board of India (sebi) on Thursday eased the valuation policies for debt mutual funds. Under the eased norms the valuation agencies can take a call of not terming a paper as default if the delay in payment of interest or extension in maturity is due to Covid-19 related lockdown…

Centre working on scheme to reimburse pending dues to MSMEs with interest: Gadkari The Centre is working on a scheme to reimburse pending payments with interest to micro, small and medium enterprises (MSMEs), Union Minister Nitin Gadkari said on Thursday…

India Inc leans less on foreign debt as weak rupee makes servicing costlier With the rupee having shed 10 per cent against the dollar since January this year, India Inc is staring at an extra repayment burden on its overseas loans. Fund raising from abroad fell to $5 billion in the first quarter of calendar 2020 from $8.8 billion raised by Indian companies…

Housing sales fall 26% in Jan-March, new supply dips 51%: Report Real estate developers sold 26 per cent apartments less in January-March in nine cities as the slowdown and coronavirus outbreak deflated demand, said News Corp-backed PropTiger on Thursday…

Kindly click on textbox for the detailed news link

In the news today

2

5

6 7

4

1

3

https://economictimes.indiatimes.com/news/economy/policy/govt-decides-to-suspend-up-to-1-year-ibc-provisions-that-trigger-fresh-insolvency-proceedings/articleshow/75323344.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

https://www.business-standard.com/article/economy-policy/pm-modi-sitharaman-to-meet-on-friday-to-finalise-second-stimulus-package-120042301516_1.html

https://economictimes.indiatimes.com/industry/banking/finance/banking/rbis-liquidity-plan-for-non-bank-lenders-falters/articleshow/75325284.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

https://www.livemint.com/market/stock-market-news/sebi-eases-valuation-norms-for-debt-mutual-funds-11587647072192.html

https://economictimes.indiatimes.com/news/politics-and-nation/centre-working-on-scheme-to-reimburse-pending-dues-to-msmes-with-interest-gadkari/articleshow/75328085.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

https://www.business-standard.com/article/economy-policy/india-inc-leans-less-on-foreign-debt-as-weak-rupee-makes-servicing-costlier-120041301118_1.html

https://www.business-standard.com/article/economy-policy/housing-sales-falls-26-in-jan-mar-new-supply-plunges-51-report-120042301006_1.html

24 April 2020 3

Control the controllable Survival of the fittest

With the Retail sector being at the forefront in the current COVID-19 crisis, we foresee an

impact on retailers not just during the lockdown but much after, given the prolonged

weakness in spending. In this report, we discuss the potential areas of impact on retailers,

likely mitigating factors, and how to think about stocks post a 50% correction from yearly

highs.

Cost of retailing to drop, but by how much?

Most apparel retailers generate gross margins of 30–50%, implying an average cost

of retailing at 30–40%. In an ideal scenario, when sales are at a standstill, the above-

mentioned cost of retailing should ideally flow to the bottom line. However, our

channel checks and management discussion indicate half this cost, 15–20pp, could

be saved by cutting marketing/advertising activity and from variable rental cost and

savings from closed stores. Furthermore, even rental cost is expected to see some

waiver given the negotiations underway, as per our channel checks. Hence, the cost

of retailing can be further reduced by 5–7pp, in effect reducing cash burn to 10–

15% of revenue during lockdown. Grocery retailers such as DMart incur barely 6–

7% cost of retailing (GM 15% and EBITDA 8%), given their ownership model, high

throughput, and limited marketing cost. This too should reduce by 50–60% on

account of stores being closed (50%) and SG&A savings.

Prolonged recovery to delay new store openings and create labor issues Even once the prevalent lockdown is lifted, the risks of COVID-19, coupled with

weakness in spending, should extend the impact on store footfall as consumers

would curb mall visits and indulgent spending. China saw 30% of normal sales in the

first few weeks. Grocery chains such as DMart could see a lower impact, as sales

from non-essential items (~30% of revenue) are impacted due to store closures.

New store additions would also be drastically reduced as retailers may curb

expansion to ease the strain on the balance sheet and demand slackness. Mall

owners are likely to stall new projects, and vacancies may rise even with delayed

openings. Furthermore, the impact of migrant workers and low employee turnout

may hit product availability and store operations. Subsequently, we believe there

could be a potential 20–25% revenue impact, which may intensify if issues last

beyond two to three months.

Inventory management – Discount or no discount?

This could turn out to be a key pain point once normalcy returns as inventory

typically comprises 30–45% of retailers’ balance sheets (FY19). The extent of the

impact on each company would depend on: a) the number of private labels and

brand ownerships, b) astute inventory management, and c) the extent of inventory

holding capacity. Weaker retailers may endeavor to shift the pain on vendors,

Cost of retailing to drop 5–7%; rental exemption during lockdown would

be a major relief.

Inventory could turn out to be a key pain point

once normalcy returns as inventory typically

comprises 30–45% of retailers’ balance sheets

(FY19).

Sector Update | 23 April 2020

Retail

http://ftp.motilaloswal.com/emailer/Research/RETAIL-20200423-MOSL-SU-PG042.pdf

24 April 2020 4

stretching his liquidity, and thus face supply and store freshness issues. We foresee

a 5–7% potential impact, due to either sharp discounting or inventory write-downs,

as players feel the pinch of a bloated inventory cycle. However, another school of

thought is that if inventory is sold quickly, inventory would be exhausted, and

manufacturers may commence fresh production after two to three months for the

festive season only after receiving firm orders. Players such as Trent could see a

higher impact given that private labels form over 90% of its revenue. However, its

astute inventory management should help mitigate some of the impact. ABFRL has

65% private labels in Pantaloons and the Lifestyle segment’s inventory, but a high

proportion of consignment sales. It runs on a 12-season cycle with quick turnaround,

thus reducing system-wide inventory bloating. Shoppers Stop is best placed as 75%+

of its inventory is on a consignment basis. V-Mart holds complete inventory risk,

with procurement on an outright basis. On the other hand, nearly 80% of Future

Lifestyle’s business is consignment-based (sales or return), but the remaining 20%

has a stretched working capital.

Balance sheet – A recipe for smooth sailing

At a time when retailers are witnessing a severe cash crunch and inventory risks, we

would prefer to bank on companies with low leverage and strong parentage. Trent is

best placed, with INR9b cash on the books post the recent preferential issue to TATA

Sons. ABFRL’s debt of INR15b is on the higher side and hence in a precarious

situation; however, its free cash flow on a stable-state basis despite the healthy

pace of store additions leaves it in a relatively better position. V-Mart and Shoppers

Stop are cash neutral and FCF positive. What gives us confidence is that V-Mart,

since its IPO in FY13, has fueled its expansion entirely through internal sources.

Future Retail and Future Lifestyle could witness issues due to their leveraged

balance sheets and high debt at the promoter level, which could accentuate

concerns at a time when banks turn extra cautious in doling out new loans.

Valuation view: Stay with the fittest

Although the Retail sector has commanded very high multiples in the recent past, it

is likely to witness a setback due to the current crisis. Even after the sharp earnings

revision, stocks are trading at ~20x FY22EV/EBDITA, with uncertain growth in the

near term; hence, the valuation is not particularly cheap even after the recent sharp

correction. Another way to look at the stocks is that even after the washout in FY21,

things may start to look better in FY22. Still, against 20% earnings revision for FY22,

stocks have corrected 40–50%, thus the multiple has been cut by 20-25%.

Nevertheless, recovery in stocks may depend on future growth performance; so,

even if stocks may not fall further, we may see time correction. However, it may be

wise to bet on players with sound execution capabilities and stable balance sheets,

who could take advantage once the cycle revives. We prefer, TRENT, ABFRL, and

VMART. ABFRL‘s high leverage is a dampener in the current weak market, but it has

a strong parentage and remains a dominant force in the apparel market with

consistently delivering strong growth at a healthy ROCE. TRENT has best in class

execution with healthy balance sheet – INR5.5b net cash and lean working capital.

VMART is a strong force in the regional market, with deep penetration, lowest cost

of retailing garners and healthy ROCE.

Companies with strong balance sheet and cash position (D-Mart/Trent)

would tide over the crisis

24 April 2020 5

India Strategy BSE Sensex: 31,863 Nifty-50: 9,314

Insight into market-cap changes since Feb’20 peak Consumer gains at the cost of Financials

Analyzing market-cap changes: Deep diving into sectoral variances The Nifty and the broader markets have corrected significantly over the last two

months (the Nifty is down ~25% from its peak of 12,201 in Feb), in tandem with

global equity markets, due to headwinds from the COVID-19 outbreak across

multiple countries.

India’s (BSE 500) market capitalization is down 23% from the peak of INR149.5t

in Feb’20. Over the same period, the Nifty-50’s market cap is down by 23% to

INR70.6t, Nifty Mid-Cap 100’s market-cap is down by 28% to INR12.4t, and Nifty

Small-Cap 100 by 34% to INR3.4t.

We also looked at market-cap changes in a sector v/s the peak market cap to

highlight the divergence in performances in various sectors. Based on this

metric, we noted NBFCs (-41%), Real Estate (-40%), Metals (-36%), Private Banks

(-36%), Media (-36%), PSU Banks (-34%), and Automobiles (-31%) were the

laggards.

Healthcare (+5%) was the only sector to escape the fall and remain positive.

Consumer (-4%) and Telecom (-10%) outperformed this metric with <=10%

correction from the peak market caps [Exhibit 2].

Key observations on BSE-500 market-cap trends (also sector-wise):

Among the BSE 500 constituents, of the total market-cap correction of INR34.7t

(to INR114.8t currently from INR149.5t in Feb’20), four sectors – Private Banks

(20%, lost INR6.9t), NBFCs (17%, INR6t), Technology (11%, INR3.7t), and

Automobiles (8%, INR2.8t) – contributed more than half to the absolute change

in the market-cap of BSE-500 companies.

In Private Banks, of the total market-cap erosion of INR6.9t, HDFC Bank

accounted for 25%, followed by ICICI Bank (20%), Kotak Mahindra Bank (16%),

and Axis Bank (13%).

NBFCs’ market cap eroded by INR6t, led by Bajaj Finance (INR1.6t), HDFC

(INR1.3t), and Bajaj Finserv (INR0.8t).

~67% of the Technology market-cap erosion was led by three stocks: TCS (40%,

INR1.5t), Infosys (16%, INR0.6t), and HCL Tech (11%, INR0.4t).

Consumer pipped Private Banks for the leading position in market cap as it

restricted its fall to 4% or INR0.8t, against decline of 36% or INR6.9t witnessed in

Private Banks, which slipped to the fourth position.

Telecom was another sector to jump six positions, reaching the 10th position.

Metals, on another hand, slipped to the 17th position from 11th.

23 April 2020

Mkt-cap change since Feb-20 (%)

Delta market-cap (INRt) – Top four sectors contributes 56% to fall

-23 -23

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http://ftp.motilaloswal.com/emailer/Research/STRATEGY-20200423-MOSL-SU-PG012.pdf

24 April 2020 6

Key observations on Nifty: eight of Top 10 stocks are from Financials The bulk of the correction (i.e., ~58%) in the Nifty’s market capitalization to

INR70.6t, from INR91.6t since Feb’20, has been driven by HDFC Bank (8.4%),

Bajaj Finance (7.5%), TCS (7.2%), ICICI Bank (6.6%), HDFC (6.4%), SBI (5.6%),

Kotak Mahindra Bank (5.2%), Axis Bank (4.4%), Bajaj Finserv (3.8%) and Reliance

Industries (3.2%).

On the other hand, HUL, Sun Pharma, Dr Reddy’s, Nestle and Cipla were the only

stocks to escape the fall with increased market cap over the same period.

In terms of percentage decline in market cap, IndusInd Bank (-67%), Tata Motors

(-55%), Bajaj Finance (-55%), Bajaj Finserv (-51%), and Vedanta (-46%) were the

key laggards.

A rise in market cap was witnessed in Cipla (+31%), Dr Reddy’s (+27%), Sun

Pharma (+14%), Nestle (+8%), and HUL (+6%).

The top gainers in market-cap rankings were Cipla (moved up thirteen

positions), Sun Pharma (moved up nine positions), Dr Reddy’s (moved up seven

positions), Nestle (moved up six positions), Asian Paints (moved up five

positions), and Britannia (moved up five positions).

Top losers in market-cap rankings included IndusInd Bank (down thirteen

positions), Bajaj Finserv (down ten positions), Tata Motors (down nine

positions), Bajaj Finance (down five positions), and ONGC (down five positions).

Key observations for the last 25 years: Market cap increased ~30x India’s market cap has seen an increase of ~30x in the last 25 years; market cap

increase stood at ~38x before the recent decline.

Share of PSUs halved to 12%, v/s 24% in CY95.

There are now zero PSU companies in the Top 10, compared with five PSUs 25

years ago.

The Top 50 share, which has remained quite stable over the years, currently

contributes 62%.

10 stocks that have been a part of the Top 50 then and now are BPCL, HDFC,

HUL, IOCL, ITC, L&T, Nestle, ONGC, Reliance Industries, and SBI.

Mid-caps v/s large-caps: Presenting the divergence Market polarization is further demonstrated in the rising share of the market

cap of the Top 15 companies as a percentage of the market cap of the Top 100

companies. This ratio, at 52.8% in Apr’20, is substantially higher than its lowest

mark in the last 15 years (44.5% in Dec’17) and the same as Feb’20 levels.

At INR12.4t, the Midcap 100’s absolute market cap is down 43% from the peak

of INR21.9t in Jan’18 and the lowest in the last seven years. Nifty’s market cap

at INR70.6t is down 21% from the peak of INR90t in Dec’19. Overall, in terms of

market-cap accretion, the Midcap 100 has reported 25% decline, while the Nifty

has shown an increase of 27% since Dec’14.

Consequently, the trailing five-year CAGR returns of the Nifty 50 and Nifty

Midcap have changed course. In Mar’18, the trailing five-year CAGR returns for

Nifty Midcap were at 20% and for Nifty at 12% (i.e., returns over Mar’13–

Mar’18). This gap has now been reversed – now the trailing five year returns for

Nifty stands at 2.3% as against 0.3% for Nifty Midcap 100. [Exhibit 14].

Top 15’s contribution to Top 100’s market cap (%)

48.8

5

3.0

49

.9

47.4

50.7

48

.1 50

.6

47.8

46

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45

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44

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53.6

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Dec

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Dec

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Dec

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Dec

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Dec

-11

Dec

-12

Dec

-13

Dec

-14

Dec

-15

Dec

-16

Dec

-17

Dec

-18

Dec

-19

Jan

-20

Feb

-20

Mar

-20

Apr

-20

Delta market-cap (INRt) – Top 10 stocks contributes 58% to fall

Exhibit data is sourced from Bloomberg, Capitaline and MOFSL database. Prices as of 22nd

April 2020; Sector classification is of BSE-500. Small-caps represent Nifty Smallcap 100, and mid-caps represent Nifty Midcap 100.

-0.7 -0.8

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24 April 2020 7

Could global banks’ IT spends surprise positively? What does our reading of the AR19s of global banks suggest? More than ~25% of all new products are provided through digital channels;

~33% of sales and up to ~70% of all banking transactions now happen digitally.

Banks are making significant investments in areas such as User Interface (UI) and

Artificial Intelligence (AI), which allow them to offer great personalization. Data,

analytics and automation are other areas attracting investments.

Across banks, such as Deutsche Bank (DB), while G&A spends are under

constant pressure, IT spends are either resilient or showing a robust increase.

Companies are creating a new Chief Digital Office (e.g., U.S. Bancorp) for

overseeing digital transformation and enhancing digital capabilities.

Banking firms such as Citibank and BofA have been investing in digital initiatives

to unlock efficiency improvements. Resultant cost savings are, in turn, being

used to finance incremental investments and growth-driven expenses.

Enterprises such as JPMorgan are adopting more agile ways of working,

including product- and platform-based architectures.

How are global BFSI firms fighting the COVID-19 crisis? Annual reports for 2019 (AR19s) and 1QCY20 earnings call commentaries

suggest first-order business disruption due to COVID-19 is limited to a few

aspects, such as BPO capacities.

Up to ~90% of bank employees are currently working from home.

Most of the firms acknowledged the role of technology/infrastructure

investments in enabling remote work at such a large scale and short notice.

These firms hinted their early investments in digital capabilities were helping

customers to continue remotely banking with them, even in the peak of this

crisis, as social distancing became the new norm.

Can COVID-19 negatively impact global banks’ technology spends?

While the first-order impact due to COVID-19 may be limited, side-effects (such

as interest rate cuts globally, capital market volatility, and potential

bankruptcies in debt-heavy sectors) could translate into a second-order impact.

Hence, intuitively, it appears that IT spends by banks may be impacted in the

near term, dragged down by decline in discretionary spending. Pricing pressure

on run spends and extensions on payment terms are other key concerns.

However, AR19s and 1QCY20 earnings calls paint a different picture. It is

relevant to note these firms have released their annual reports very recently.

Accordingly, the COVID-19 situation would have more or less been factored in.

Three kinds of technology investments are likely to drive positive surprise on IT

spends by global banks: (1) accelerating the ‘digital’ edge, (2) cost-cutting

through efficiency improvements, and (3) capitalizing on incremental

opportunities presented by the COVID-19 crisis.

Earnings Summary – EPS (INR)

FY21E FY22E

Cyient 32.7 40.9

HCL Tech 40.2 46.9

Hexaware 20.4 25.8

Infosys 36.8 43.1

L&T Infotech 92.5 111.4

Mindtree 37.4 50.4

Mphasis 52.1 62.0

NIIT Tech 72.2 91.3

Persistent 36.1 47.9

TCS 82.3 97.8

Tech Mahindra 47.1 59.8

Wipro 15.4 17.6

Zensar 8.8 13.1


Technology

http://ftp.motilaloswal.com/emailer/Research/TECHNOLOGY-20200423-MOSL-SU-PG010.pdf

24 April 2020 8

(1) Accelerating the ‘digital’ edge: Case studies of JPMorgan & DB JPMorgan’s AR19 highlights despite the COVID-19 crisis, the firm is budgeting for

a 4% YoY increase (v/s 6% in CY19) in technology spend. The report further

states that 50% of the IT spends would be dedicated to ‘new’ capabilities.

Additionally, the annual report underscores that as the company modernizes its

infrastructure and scales up its digital capabilities, it would continue to make key

investments needed to “change the bank,” while deploying resources “to run

the bank” efficiently.

We view this as the case study of a company aggressively investing even in

downturn to strengthen its competitive advantage in the digital space.

This trend is likely to be supported by the fact that the liquidity positions of

most of the large banks in the US and EU are currently in a much better shape

than during the Global Financial Crisis (GFC) of 2008–09 (Refer Exhibit-21).

The converse of this case study is that of DB. The bank’s AR19 suggests troubles

and cost pressures translated into a drop in most of the G&A expenses.

However, technology spends remained stable in CY19.

The company continued investing in core banking platforms and digital/remote

advisory tools to create a robust technology platform for future growth.

This case study emphasizes that banks are not compromising on IT spends

despite cost pressures, given it is a means to build a competitive edge.

(2) Unlocking efficiency improvements: Case studies of BofA and Citigroup

The AR19s of Bank of America and Citigroup highlight their bet on tech/digital

initiatives as a means to unlock efficiency improvements.

For instance, digital capability enhancements, greater use of automation and

implementation of agile IT solutions could help in branch network optimization.

The resultant cost savings from these measures are anticipated to further

finance incremental investment initiatives and growth-driven expenses.

Revenue headwinds posed by COVID-19 should further drive the need for such

efficiency improvements and cost savings.

Besides, firms may also show an increasing propensity to offshore IT services

work to low cost locations like India in pursuit of cost rationalization.

(3) Incremental opportunities: Case studies of U.S. Bancorp & Wells Fargo

The COVID-19 crisis is presenting incremental opportunities for IT companies

owing to the rising digital adoption among customers and employees on

account of the lockdowns, social distancing protocols, and the need to enable

Work from Home (WFH) access worldwide.

Naturally, some areas such as Infrastructure As-A-Service (IaaS), collaborative

and digital access tools are witnessing a strong surge in demand.

U.S. Bancorp highlighted that it had leveraged on agile development to

introduce digital tools/processes that would allow customers quick access to

stimulus funds distributed by the US federal government.

Furthermore, its IT teams designed and deployed a new digital forbearance tool

that witnessed >50% customer adoption within a week of launch.

24 April 2020 9

Expect near-term uncertainty; prefer TCS, INFO, HCLT, and LTI While we expect supply-side uncertainties to ease out over 1QFY21, demand,

pricing, and receivable uncertainties should continue in the near-term, given the

constantly evolving nature of the COVID-19 crisis.

Negative news flow around the sector may likely continue given the seriousness

of the COVID-19 situation in geographies such as the US, UK, EU, and India.

Despite these uncertainties, we continue to prefer TCS, Infosys, and HCLT

among the large-caps and LTI among the Tier II. This is attributable to their

historical track record of adapting to multiple business challenges / technology

change cycles.

Moreover, recent results/commentaries of TCS, Infosys, and global banks offer

us some comfort on the new business wins, ramp-ups, supply-side aspects, cost

optimization, and margin management capabilities of these companies.

24 April 2020 10

BSE SENSEX S&P CNX CMP: INR166 TP: INR189 (+14%) Neutral 31,863 9,314

Conference Call Details Date: 24th April 2020

Time: 02:30pm IST

Dial-in details:

+91-22-4444-9999

Financials & Valuations (INR b)

INR Billion FY20 FY21E FY22E

Net Sales 143.5 145.5 151.8

EBITDA 57.5 52.3 56.1

Adj. PAT 31.4 23.7 26.5

EBITDA Margin (%) 40.1 35.9 37.0

Adj. EPS (INR) 17.0 12.8 14.3

EPS Gr. (%) 25.0 -24.8 12.2

BV/Sh. (INR) 78.1 73.5 70.4

Ratios

Net D:E -0.1 -0.1 -0.2

RoE (%) 21.7 16.9 19.9

RoCE (%) 18.1 13.8 15.9

Payout (%) 102.4 136.0 121.3

Valuations

EV/EBITDA (x) 7.6 8.4 7.8

P/E (x) 14.6 19.4 17.3

P/BV (x) 3.2 3.4 3.5

Div. Yield (%) 6.0 6.0 6.0

FCF Yield (%) 7.5 7.0 8.0

EBITDA declines 12% QoQ to INR13b (14% miss) on LTL – Pre-Ind-AS 116 basis

Proforma consol revenue at INR35.6b decreased 1.2% QoQ (in-line) due to

decline in Rental and Energy revenues; Rental revenue fell 1.1% QoQ (2.5%

below estimate) to INR21.9b, and Energy revenue 1.2% QoQ to INR13.7b

(in-line).

Net tenancy adds stood at 431 (v/s 744 in 3QFY20).

Proforma consol EBITDA plunged 12.1% QoQ to INR13b (14% miss), with

16.3% QoQ decline to INR12.2b (17.5% miss) posted in Rental EBITDA.

Energy EBITDA grew threefold to INR815m, against our estimate of

INR307m. The nosedive in EBITDA was attributed to a 2.5x increase in Other

Expenses.

The EBITDA margin shrank 450bp QoQ to 36.5% (510bp miss) on decline in

Rental EBITDA; the Rental EBITDA margin contracted 980bp to 55%, while

Energy EBITDA margin expanded 430bp to 5.9%.

PBT/PAT declined 21% QoQ to INR7.9b/INR5.9b (14% miss).

Capex for 4QFY20 stood at INR5.6b (INR3.9b in 3QFY20); moreover, the

company added 1,128 towers in 4QFY20, taking the total count to 95,372.

Key operating metrics

The company added 431 consolidated co-locations (578 estimated), v/s 744

adds in 3QFY20, taking the total count to 1,74,581. The average sharing

factor stood at 1.84 (v/s 1.85 in 3QFY20).

Gross co-location adds grew to 2,498 (v/s 1,893 in 3QFY20), with exits of

2,067 (v/s 1,149 in 3QFY20). Furthermore, 3,564 co-locations exits were

reported (v/s 2,798 QoQ), for which notices were received, but actual exits

are yet to happen.

Rentals per tenant (per month) declined 2% QoQ to INR42,267.

Quarterly Performance

(INR m)

Y/E March FY19 FY20 FY19 FY20E 4Q

(Consolidated) 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4QE FY20E Var (%)

Revenue from operations 36,735 36,683 36,402 36,003 36,297 35,612 36,028 35,608 1,45,823 1,43,545 36,203 -1.6 YoY Change (%) 4.2 0.6 -0.4 -1.7 -1.2 -2.9 -1.0 -1.1 8.6 -1.6 0.6

Total Expenditure 21,539 21,819 21,361 21,092 21,298 20,817 21,264 22,628 85,811 86,032 21,143 7.0

EBITDA 15,196 14,864 15,041 14,911 14,999 14,795 14,764 12,980 60,012 57,513 15,059 -13.8 YoY Change (%) -3.5 -7.9 -5.9 -6.4 -1.3 -0.5 -1.8 -13.0 1.8 -4.2 1.0

Depreciation 5,389 5,625 5,727 5,498 5,390 5,284 4,908 5,581 22,239 21,163 6,005 -7.1 Interest -285 -442 -601 -243 -118 58 170 48 -1,571 159 170 -71.8 Other Income 609 557 460 408 651 349 336 576 2,034 1,912 332 73.6

PBT 10,701 9,881 10,375 10,064 10,378 9,802 10,022 7,927 41,021 38,103 9,217 -14.0 Tax 4,321 3,883 3,891 3,988 1,946 140 2,557 2,021 16,083 6,664 2,320 Rate (%) 40.4 39.3 37.5 39.6 18.8 1.4 25.5 25.5 39.2 17.5 25.2

Reported PAT 6,380 5,998 6,484 6,076 8,432 9,662 7,465 5,906 24,938 31,439 6,897 -14.4 Adj PAT 6,380 6,215 6,484 6,076 8,432 9,662 7,465 5,906 25,155 31,439 6,897 -14.4 YoY Change (%) -3.9 -2.7 10.8 -4.3 32.2 55.5 15.1 -2.8 -8.4 25.0 13.5

E: MOFSL Estimates

23 April 2020

Results Flash | Sector: Telecom

Bharti Infratel

RESULTS

FLASH

24 April 2020 11

Estimate change

TP change Rating change

Bloomberg ALPM IN

Equity Shares (m) 189

M.Cap.(INRb)/(USDb) 111.2 / 1.6

52-Week Range (INR) 613 / 435

1, 6, 12 Rel. Per (%) 10/2/-12

12M Avg Val (INR M) 45

Free float (%) 27.0


Y/E MARCH 2020 2021E 2022E

Sales 46.1 49.7 54.7

EBITDA 12.2 11.1 12.7

Adj. PAT 8.6 7.1 7.8

EBIT Margin (%) 23.1 18.2 18.9

Cons. Adj. EPS (INR) 45.9 37.9 41.4

EPS Gr. (%) 47.7 -17.4 9.2

BV/Sh. (INR) 170.8 196.7 226.0

Ratios

Net D:E 0.6 0.5 0.4

RoE (%) 30.1 21.4 20.3

RoCE (%) 19.7 13.8 14.7

Payout (%) 27.4 31.8 29.1

Valuations

P/E (x) 15.0 18.2 16.7

EV/EBITDA (x) 12.1 13.1 11.4

Div. Yield (%) 1.4 1.4 1.4

FCF Yield (%) -1.0 2.7 3.7

EV/Sales (x) 3.2 2.9 2.6

Shareholding pattern (%)

As On Mar-20 Dec-19 Mar-19

Promoter 73.0 73.0 73.0

DII 6.9 6.7 5.5

FII 8.3 9.2 9.5

Others 11.9 11.1 12.1

FII Includes depository receipts

CMP: INR699 TP: INR705 (+1%) Neutral

Good show in key geographies (US/India) drives earnings Minimal impact seen on business due to COVID-19 outbreak The domestic formulation (DF) segment of Alembic Pharma (ALPM) has

finally shown signs of revival after four quarters of muted growth. ALPM remains on track in terms of finishing its large capex project (~INR25b)

to enhance new dosage offerings and increase capacity requirements in the US Generics segment. We expect the benefit to be witnessed from FY22.

We have increased our EPS estimate by 11.4%/6.2% for FY21/22 to factor in the favorable outlook for its base portfolio and new launches in US Generics. Accordingly, we have revised our price target to INR705 (from INR642 earlier) on a 17x 12M forward earnings basis. Maintain Neutral stance on limited upside from current levels.

Formulations – Outperformer; API – Underperformer for quarter ALPM’s 4QFY20 revenues came in at INR12.1b, up 30% YoY, led by

International Formulations (+80% YoY), supported by growth in the US segment (48% of sales; +84% YoY to USD75m) and the Non-US segment (11% of sales; +63% YoY).

Growth in the DF business also picked up (13% YoY; 28% of sales), while that in the API business was dragged down to some extent (-33% YoY; 13% of sales).

The gross margin expanded 140bp YoY to 78% owing to a superior product mix. The EBITDA margin expanded 790bp YoY to 27.1% (our estimate: 25.3%), led by improved operating leverage (employee cost down -120bp YoY/other expenses down 520bp YoY as % of sales, offset by higher R&D expense of +240bp YoY). EBITDA grew 84% YoY to INR3.4b (our estimate: INR2.9b).

Consequently, Adj. PAT grew 88% YoY to INR2.3b (our estimate: INR1.8b). For FY20, revenue/EBITDA/Adj.PAT stood at INR46.1b/INR12b/INR8.3b,

largely led by strong traction in US generic. The DF business was subdued on full year basis.

Highlights from management commentary The US base business from already-approved products is likely to witness a

quarterly run rate of USD70m (v/s USD50m up to 3QFY20) going forward. ALPM is expected to launch azithromycin in the US shortly. Overall R&D expense would be in the range of ~INR7b in FY21. ALPM intends

to file 25–30 abbreviated new drug applications (ANDAs) annually for the next two to three years.

The course correction strategy would enable better growth in DF over the next two to three years.

ALPM depends on China for 15% of its overall input. Since Mar’20, normalcy has been observed in production from Chinese raw material suppliers.

Valuation and view Given the high base of the US business in FY20, we expect compounded

earnings to decline 5% over FY20–22. Moreover, we are yet to see consistency in the DF business’ performance following the implementation of this renewed strategy. Accordingly, we continue to value ALPM at 17x 12M forward earnings to arrive at a price target of INR705 (prior: INR642). Maintain Neutral on limited upside from current levels.

23 April 2020

4QFY20 Results Update | Sector: Healthcare

Alembic Pharma

http://ftp.motilaloswal.com/emailer/Research/ALPM-20200423-MOSL-RU-PG010.pdf

24 April 2020 12

Quarterly perf. (Consol.) (INR m)

Y/E March FY19 FY20 FY19 FY20 FY20E

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 4QE vs Est

Net Sales 8,625 11,271 10,182 9,270 9,489 12,409 12,091 12,068 39,357 46,060 11,510 4.9%

YoY Change (%) 33.1 42.8 21.2 8.6 10.0 10.1 18.8 30.2 25.7 17.0 24.2

Total Expenditure 7,115 8,247 7,759 7,489 7,240 8,954 8,841 8,793 30,611 33,827 8,590

EBITDA 1,510 3,023 2,422 1,780 2,249 3,455 3,251 3,275 8,746 12,233 2,920 12.2%

YoY Change (%) 48.8 68.8 29.2 2.8 49.0 14.3 34.2 84.0 36.0 39.9 64

Depreciation 276 286 291 300 354 360 418 441 1,152 1,573 442

EBIT 1,786 3,310 2,713 2,080 2,603 3,815 3,669 3,717 9,898 13,806 3,362

YoY Change (%) 26.4 11.6 10.0 -5.1 28.3 25.6 44.0 47.4 32.2 39.5 47

Interest 16 58 60 51 50 71 74 78 184 272 77

Other Income 1 24 35 34 33 4 4 9 94 49 9

PBT before EO expense 1,219 2,703 2,108 1,464 1,878 3,029 2,763 2,765 7,503 10,437 2,411 14.7%

Extra-Ord expense 0 0.0 0.0 0 328 0.0 0.0 109 0 436 0

PBT 1,219 2,703 2,108 1,464 1,550 3,029 2,763 2,657 7,503 10,001 2,411 10.2%

Tax 315 703 400 149 360 525 486 621 1,568 1,992 434

Rate (%) 25.9 26.0 19.0 10.2 23.2 17.3 17.6 23.4 20.9 19.9 18.0

MI & P/L of Asso. Cos. -1 -1 9 75 -47 41 -65 -214 82 -285 153

Reported PAT 905 2,001 1,698 1,240 1,237 2,463 2,342 2,249 5,854 8,294 1,825 23.3%

Adj PAT 905 2,001 1,698 1,240 1,504 2,463 2,342 2,332 5,854 8,643 1,825 27.8%

YoY Change (%) 35.7 64.6 30.0 32.2 66.2 23.1 37.9 88.1 41.8 47.7 47.2

Margins (%) 10.5 17.8 16.7 13.4 15.9 19.8 19.4 19.3 14.9 18.8 15.9

Key performance indicators (Consolidated)

Y/E March FY19 FY20 FY19 FY20 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q

India 3310 3850 3650 3020 3240 3910 3680 3420 13,830 14250

YoY Change (%) 40.3 0.0 4.6 (0.7) (2.1) 1.6 0.8 13.2 8.6 3.0

Exports 3,520 5,870 4,480 3,950 4,530 6,460 6,640 7,100 17,830 24,730

YoY Change (%) 24.8 124.0 44.1 12.2 28.7 10.1 48.2 79.7 47.8 38.7

APIs 1,800 1,550 2,050 2,300 1,720 2,040 1,770 1,550 7,700 7,080

YoY Change (%) 38.5 9.2 13.9 16.2 (4.4) 31.6 (13.7) (32.6) 18.3 (8.1)

Cost Break-up

RM Cost (% of Sales) 29.6 24.1 24.4 23.4 21.5 22.0 24.7 21.9 25.2 22.6 Staff Cost (% of Sales) 19.1 16.2 19.5 21.7 22.6 17.5 18.8 20.5 19.0 19.7

R&D Expenses (% of Sales) 14.1 12.9 11.0 12.9 14.8 14.0 12.1 15.3 12.7 14.0

Other Cost (% of Sales) 19.6 20.0 21.3 22.8 17.3 18.6 17.6 15.2 20.9 17.2

Gross Margins(%) 70.4 75.9 75.6 76.6 78.5 78.0 75.3 78.1 74.8 77.4

EBITDA Margins(%) 17.5 26.8 23.8 19.2 23.7 27.8 26.9 27.1 22.2 26.6

EBIT Margins(%) 20.7 29.4 26.6 22.4 27.4 30.7 30.3 30.8 25.2 30.0

24 April 2020 13

BSE SENSEX S&P CNX CMP: INR82 31,863 9,314

Conference Call Details Date: 24 April 2020

Time: 03:30 PM IST

Dial-in details:

+91 22 6280 1144 /

+91 22 7115 8045


INR b CY19 CY20E CY21E

Sales 79.1 71.8 79.4

EBITDA (%) 12.2 10.3 12.1

Adj. PAT 3.6 2.7 4.4

EPS (INR) 9.4 7.3 11.6

EPS Growth (%) -33.2 -22.9 59.3

BV/Share (INR) 123 130 141

Ratio

RoE (%) 8.0 5.8 8.5

RoCE (%) 6.5 4.8 7.0

Payout (%) 0.0 0.0 0.0

Valuations

P/E (x) 8.7 11.2 7.1

P/BV (x) 0.7 0.6 0.6

Div. Yield (%) 0.0 0.0 0.0

FCF Yield (%) -7.3 2.6 11.0

Operating performance in line; India beats estimates, EU disappoints 1QCY20 consol. revenues declined ~23.5% YoY to ~INR16.6b (v/s est.

~INR17b).

EBITDA declined 35.5% YoY to ~INR1.8b (in-line) due to negative operating

leverage.

Forex loss of ~INR454m (largely at Bill Forge’s Mexican operations) hurt PAT,

which declined ~86% YoY to ~INR208m (v/s est. ~INR650m).

India business performance was above est. with revenues declining just ~8%

YoY to ~INR7.8b (v/s est. ~INR7b). India PBIT margins stood at 6.8% (v/s est.

3.7%), a decline of 480bp YoY.

EU business performance was below est. with revenue declining ~34% YoY to

~INR8.8b (v/s est. ~INR10b). EU PBIT margins were 6% (v/s est. 8.2%), a

decline of ~330bp YoY.

Key highlights from the presentation:

Estimated impact of the shutdown in India since 23rd Mar’20 is ~10% of sales;

in EU, it is estimated at ~20% in Italy and 10% in Germany and Spain.

Expect Apr’20 sales to be close to zero in all regions while uncertainty should

remain for May-Jun’20. The company expects recovery potentially in 3QCY20,

though risk of recurrence of the virus exists.

It is focused on controlling capex (only urgent and important capex to be

approved), drawing down inventory, and reducing cost (incl. labor). It has

adequate liquidity and undrawn lines to sustain any further extension in the

lockdown.

Based on our current estimates, the stock trades at 11.2x/7.1x CY20E/21E

consol. EPS.

Quarterly performance (Consol.)

(INR Million) (INR m) CY19 CY20 CY19 CY20

Y/E December 1Q 2Q 3Q 4Q 1Q 1QE

Net Sales 21,744 21,420 18,685 17,229 16,627 79,078 16,983 YoY Change (%) 8.9 3.0 -5.7 -12.8 -23.5 -1.5 -21.9

EBITDA 2,825 2,616 2,092 2,143 1,822 8,319 1,813 Margins (%) 13.0 12.2 11.2 12.4 11.0 10.5 10.7

Depreciation 740 844 789 788 815 3,161 765 Interest 103 115 198 106 600 523 130 Other Income 148 78 42 63 49 331 30

PBT before EO expense 2,130 1,734 1,147 1,312 455 4,966 948 EO Exp/(Inc) 13 0 -51 84 0 46 0 PBT before EO exp 2,117 1,734 1,198 1,228 455 4,920 948

Tax Rate (%) 28.0 27.2 48.9 88.7 54.3 55.7 31.4 Adj. PAT 1,532 1,262 583 186 208 3,564 650 YoY Change (%) 16.2 -9.1 -56.1 -86.8 -86.4 -33.2 -57.5 Revenues

India 8,524 9,684 9,134 8,704 7,819 35,934 6,990

Growth (%) 3 11.5 4.9 6.0 -8 7.2 -18.0

EU 13,324 11,735 9,561 8,512 8,807 43,132 9,993

Growth (%) 13 -2.4 -17.7 -26.8 -34 -7.8 -25.0

PBIT Margins

India 11.6 8.2 7.4 6.7 6.8 8.5 3.7 EU 9.3 9.0 7.5 8.7 6.0 8.7 8.2

RESULTS

FLASH

23 April 2020 Results Flash | Sector: Automobiles

Mahindra CIE

24 April 2020 14

COVID-19 derails business growth – Private players’ Individual WRP declines ~40% YoY for Mar’20 (+5% for FY20) LIC reports 65% YoY decline in individual WRP (+8% for FY20)

Private players’ individual weighted received premium (WRP) witnessed 39.8% YoY

decline in Mar’20 (v/s +4.0% YoY in Feb’20) while industry posted a decline of 50.2%

YoY. This decline was primarily due to the outbreak of the COVID-19 pandemic, which

impacted business during the second fortnight of Mar’20 (typically the peak business

season).

During FY20, private players’ individual WRP grew 4.8% YoY while industry growth

came in slightly higher at 6.2% YoY. Amongst listed players, HDFC Life witnessed the

lowest decline of 28% YoY while Max Life logged a decline of 36% YoY. SBI Life/IPRU

Life saw a decline of 42% YoY/49% YoY.

Amongst other key players, Tata AIA, Birla Sun Life and Bajaj Allianz witnessed a YoY

decline of 36%, 38% YoY and 39%, respectively. LIC reported a decline of 64.5% YoY

(v/s decline of 7.3% YoY in Feb’20) in individual WRP. During FY20, LIC’s individual

WRP grew 8.3% YoY.

Private players’ individual WRP market share expands to ~70% for Mar’20

(57% as on FY20) Private players’ individual WRP market share expanded to ~70% in Mar’20. LIC

posted a decline of 64.5% YoY as against 50.2% YoY decline by the industry while

private players reported a lesser decline of 39.8% YoY. During FY20, SBI Life (13.3%)

remained the largest private insurer in terms of individual WRP, followed by IPRU

Life (9.0%) and HDFC Life (8.1%). On an un-weighted basis, HDFC Life was the largest

private insurer with market share of 6.7% followed by SBI Life with 6.4% share and

IPRU Life with 4.8% share.

Performance of key private players

The combined market share of listed players – SBI Life, ICICI Prudential Life, HDFC

Life and Max Life – on individual WRP basis stood at ~55.4% as on Mar’20 (62.9% in

FY20). Tata AIA, Bajaj Allianz and Birla Sun Life have further cemented their position

to rank amongst the 5-7th largest private insurers on individual WRP. Amongst key

listed players, based on individual WRP:

HDFC Life reported 28% YoY decline (+19% YoY in FY20); total un-weighted

premium declined ~19% YoY (+16.2% YoY in FY20).

SBI Life reported a decline of 42% YoY (+9% YoY in FY20); total un-weighted

premiums declined ~41.4% YoY (+20.3% YoY in FY20).

IPRU Life reported a decline of 49% YoY (-6% YoY in FY20); total un-weighted

premium declined 32.3% YoY (+20.4% YoY in FY20).

Max Life reported 36% YoY decline (+5% YoY in FY20); total un-weighted

premium declined 27.4% YoY (+8.2% YoY in FY20).


India Life Insurance

Individual WRP and YoY growth (%)

Individual WRP, INRm

Mar-20 YoY

growth

Grand Total 59,775 -50.2%

Total Public 17,909 -64.5%

Total Private 41,866 -39.8%

SBI Life 6,854 -42.1%

HDFC life 6,038 -27.8%

Max Life 5,510 -35.9%

ICICI Prudential 4,781 -49.0%

Tata AIA 3,298 -36.3%

Kotak Life 2,675 -38.5%

Bajaj Allianz 2,353 -39.1%

Birla Sun life 2,125 -38.3%

PNB Met Life 1,294 -51.1%

IndiaFirst Life 1,134 -7.2%

Source: Company, MOFSL

24 April 2020 15

Un-weighted new business premium and growth – sorted on FY20 basis

INR m Mar-20 YoY

growth FY20

YoY growth

FY19 YoY

growth

Grand Total 254,093 -32.2% 2,588,966 20.6% 2,147,436 10.8%

Total Public 170,666 -31.1% 1,779,771 25.2% 1,421,917 5.7%

Total Private 83,428 -34.2% 809,196 11.5% 725,520 22.3%

HDFC life 20,603 -19.3% 173,963 16.2% 149,715 32.0%

SBI Life 11,275 -41.4% 165,918 20.3% 137,920 25.9%

ICICI Prudential 9,834 -32.3% 123,482 20.4% 102,518 12.0%

Max Life 7,754 -27.4% 55,836 8.2% 51,595 18.7%

Bajaj Allianz 5,854 -50.5% 51,787 5.2% 49,229 14.7%

Kotak Life 7,447 -17.2% 51,058 28.4% 39,771 16.1%

Birla Sunlife 4,809 -33.6% 36,571 -6.6% 39,161 47.1%

Tata AIA 3,843 -35.6% 32,411 30.9% 24,759 66.3%

PNB Met Life 1,897 -48.1% 17,787 5.8% 16,818 17.9%


Individual WRP, growth and market share – sorted on FY20 basis

INR m Mar-20 YoY

growth Mkt

share FY20

YoY growth

Mkt Share

FY19 YoY

growth Mkt

share

Grand Total 59,775 -50.2% 100.0% 734,885 6.2% 100.0% 691,826 9.0% 100.0%

Total Private 41,866 -39.8% 70.0% 420,314 4.8% 57.2% 401,246 12.6% 58.0%

Total Public 17,909 -64.5% 30.0% 314,572 8.3% 42.8% 290,580 4.5% 42.0%

SBI Life 6,854 -42.1% 11.5% 97,711 9.1% 13.3% 89,547 15.0% 12.9%

ICICI Prudential 4,781 -49.0% 8.0% 66,427 -6.4% 9.0% 70,946 -4.9% 10.3%

HDFC life 6,038 -27.8% 10.1% 59,646 19.0% 8.1% 50,123 5.4% 7.2%

Max Life 5,510 -35.9% 9.2% 40,785 5.2% 5.5% 38,787 20.7% 5.6%

Tata AIA 3,298 -36.3% 5.5% 26,918 20.6% 3.7% 22,321 59.7% 3.2%

Bajaj Allianz 2,353 -39.1% 3.9% 19,268 10.6% 2.6% 17,421 24.7% 2.5%

Birla Sun life 2,125 -38.3% 3.6% 17,018 0.5% 2.3% 16,936 59.9% 2.4%

Kotak Life 2,675 -38.5% 4.5% 16,454 -1.3% 2.2% 16,678 5.9% 2.4%

PNB Met Life 1,294 -51.1% 2.2% 12,964 -5.5% 1.8% 13,715 12.3% 2.0%


Mkt share among private players on un-weighted and individual WRP — sorted on individual WRP FY20 basis

INR m Un weighted Premiums Individual WRP

(%) Mar-20 FY20 FY19 Mar-20 FY20 FY19

Grand Total 254,093 2,588,966 2,147,436 59,775 734,885 691,826

Total Private 83,428 809,196 725,520 41,866 420,314 401,246

SBI Life 13.5% 20.5% 19.0% 16.4% 23.2% 22.3%

ICICI Prudential 11.8% 15.3% 14.1% 11.4% 15.8% 17.7%

HDFC Standard 24.7% 21.5% 20.6% 14.4% 14.2% 12.5%

Max Life 9.3% 6.9% 7.1% 13.2% 9.7% 9.7%

Tata AIA 4.6% 4.0% 3.4% 7.9% 6.4% 5.6%

Bajaj Allianz 7.0% 6.4% 6.8% 5.6% 4.6% 4.3%

Birla Sun life 5.8% 4.5% 5.4% 5.1% 4.0% 4.2%

Kotak Life 8.9% 6.3% 5.5% 6.4% 3.9% 4.2%

PNB Met Life 2.3% 2.2% 2.3% 3.1% 3.1% 3.4%

Canara HSBC OBC 1.8% 1.9% 2.0% 2.3% 2.3% 2.3%


24 April 2020 16

23 April 2020

ECOSCOPE The Economy Observer

Long-dated securities get RBI support via fifth ‘Operation Twist’

RBI expected to announce more open market purchases

The Reserve Bank of India (RBI) has announced the simultaneous purchase and sale of different maturity bond papers

and sale of treasury/cash management bills respectively on 27th Apr'20. This is the fifth 'Operation Twist' announced by

the RBI and it has come after a gap of three 3 months. The previous four operations were held on 23rd Dec'19, 30th

Dec'19, 6th Jan'20 and 23rd Jan'20.

While the RBI would purchase INR100b worth of dated securities (ranging from 6-year to 10-year maturity) on 27th

Apr'20, it would sell treasury/cash management bills (with maturity of 77-days to 364-days) worth an equivalent

amount. However, the operations held in Dec'19 and Jan'20 did not involve equivalent amount of purchase buy and

sale of securities. On a net basis, the RBI actually purchased INR47b and INR60b worth of long-term securities in Dec'19

and Jan'20, respectively (Exhibit 1).

Although such operations don't inject liquidity on net basis into the system (which is probably not even required at this

stage), they would have the desired effect of flattening the yield curve, i.e. - reducing yields at the long-end with

pressure at the short-end of the yield curve. A.

Further, the government has also expanded its borrowings by INR2t in 1QFY21 via T-bills and the RBI has also increased

the Ways & Means Advances (WMA) from INR1.25t earlier to INR2t for 1HFY21. These steps effectively take care of the

higher financing requirement of the central government.

Finally, considering the surge in demand for treasury bills in the recent auctions, there is market speculation that the RBI

has already entered the secondary bond market. Sooner or later, it is believed that the RBI would start open market

purchases of government securities. Consequently, the benchmark bond yield has declined fallen during from ~6.5%

towards 6.05% during the past few trading sessions.

RBI has purchased net amount of IRN460b through OMOs in

CY20 so far

The 10-year benchmark bond yield has fallen back to ~6.1%

level in the past 10 days (%)

Source: RBI, MOFSL

500

250

47 60

400

-

120

240

360

480

600

Jun

-18

Sep

-18

Dec

-18

Mar

-19

Jun

-19

Sep

-19

Dec

-19

Mar

-20

Net purchases

(INR b) 6.78

6.51

6.61

6.42

6.04 6.09

6.50

6.06

5.8

6.1

6.4

6.7

7.0

04-D

ec

14-D

ec

24-D

ec

03-J

an

13-J

an

23-J

an

02-F

eb

12-F

eb

22-F

eb

03-M

ar

13-M

ar

23-M

ar

02-A

pr

12-A

pr

22-A

pr

10-year benchmark yield

24 April 2020 17

Insights from interaction with Finance Minister of Kerala To understand the fiscal position of Kerala in light of the COVID-19 outbreak, we interacted with

Honorable Dr. T.M. Thomas Isaac, Minister of Finance, Kerala Government. Key insights

highlighted below:

Kerala does not have any option but to borrow at high interest rate… The state governments cannot directly borrow from the RBI or from the market. Also,

currently Kerala does not have an expansionary tax collection scenario. The only solution

is for the central government to transfer additional resources to states. If that does not

happen, the states would have no other option but to borrow at high yields, even at

~12%.

…owing to expected huge gaps in receipts…

While the normal Apr’20 revenue collection estimate for Kerala was ~INR100b, the

expectation is now lower at ~INR20b (including transfer from center and own tax

collections). This means a huge gap of ~INR80b for just one month. Adding arrears of

Mar’20, the total revenue gap is likely to be ~INR100b for Apr’20 alone. While Kerala has

decided to defer salary payments, additional revenue shortages would mean curtailment

of development expenditure. This would only aggravate a situation which is already

recessionary. Therefore, the central government needs to identify additional funding

avenues for the state governments, even if it means direct monetizing of deficit by the

RBI.

…and lesser devolution of funds from the center The center has already budgeted ~INR700b lesser devolution to states in FY21 compared to what was recommended

by the Finance Commission. In light of the current scenario, there is a chance the center might end up reducing it

even more. The Kerala government had budgeted INR326.3b as transfer from the central government for FY21 (BE),

but this seems unlikely currently.

Kerala was swift in handling the Coronavirus outbreak in early stages The outbreak of ‘Nipah virus’ three years back gave the Kerala government some training in handling the current

pandemic. Therefore, the Kerala government was well prepared with all medical assistance in early-Jan’20 (the

government was aware of some students returning from Wuhan in the early week of Jan’20). Moreover, the fact

that Kerala has ‘one of the best public health systems in India’ also helped the state perform better than others in

fighting the Coronavirus. The present Kerala state government has invested ~INR40b in health infrastructure over

the last 4 years and has also created another fund of ~INR50b for health. Additionally, presence of strong

local/municipal bodies has kept matters at the ground level in check. All these positives put together made Kerala

react swiftly to the disease outbreak.

Other points of interaction Issuance of NRI bonds: There is a strict limit on the amount that states can borrow (3% of GSDP). Therefore, no

matter the name of the bond, states’ borrowings have to be within this limit.

Including tax on liquor and tobacco within the GST framework: Since these are the only revenue sources for

Kerala, the state is not in favor of these segments coming under GST.

Minimum revenue guarantee in GST: Due to various operational and non-operational issues in GST, the amount

of cess collected in the Compensation fund (from which the center had planned to compensate the states) has

fallen short. The center is yet to accept recommendations made by the states like one-time borrowing in order to

compensate the states.

23 April 2020 Economy

Expert Speak

Hon’ble Dr. T.M. Thomas

Isaac, Minister of Finance, Kerala

Government Dr. Thomas Isaac is a known politician and

renowned economist. He represents Alappuzha con

stituency in the Kerala State

Legislative Assembly. He has authored a number of

articles on economic planning and politics,

which have been published in leading

regional, national and international periodicals.

https://en.wikipedia.org/wiki/Alappuzha

https://en.wikipedia.org/wiki/Kerala

24 April 2020 18

Gradual recovery in past few weeks Rural India on better footing

To discuss the impact of Covid-19 on the payments bank business and emerging opportunities

in the digital payment landscape, we interacted with Fino Payments Bank’s (FINO) Managing

Director and CEO, Mr. Rishi Gupta.

About the company FINO deals in key financial services such as remittances, cash withdrawals, cash

management services (CMS), etc. The company boasts of 30% market share in CMS,

60% market share in micro-ATMs and 8-10% market share in IMPS transactions. It caters

largely to the low/mid-income customer segment, with 75%+ of its 0.4m touch-points in

rural areas. Its monthly transaction run-rate amounts to INR100b.

Volumes plunged sharply at the start of the lockdown, 65-70% recovery now When the lockdown hit, Fino’s key business of remittances (typically 40% of business

volume and 20% of revenue) declined to 10% of its average. However, with economic

activity picking up, volumes have improved to 35% of its average now. Likewise, in cash

withdrawals, transaction values have declined 30-40% from an average of INR3k while

IMPS transactions have declined to 10% of its average. Overall revenues have now

returned to 65-70% of pre-lockdown revenues. Mr. Gupta expects it to improve

further to 75-80% in 1-2 months and remain stable thereafter.

Rural India better placed; State-wise impact divergent Rural India is better placed compared to urban areas due to (a) higher dependence of

the population on agriculture and other essential services, and (b) government

stimulus being largely targeted at the rural population. On the other hand, urban cash

flows have been badly impacted. Interestingly, Mr. Gupta commented that post-COVID,

many migrants from urban areas are moving to rural areas and aspiring to become channel partners. Impact across

states has also been divergent with Maharashtra, Gujarat, MP and Telangana being the most impacted (business

at 30% of run-rate levels). On the other hand, Bihar, UP, Chhattisgarh, WB, Assam and Orissa are less impacted.

Witnessing partial pick-up in microfinance activities Post partial lifting of the lockdown on 20th Apr’20, MFI activities have picked up to ~5-10% of pre-COVID levels. A

further pick-up is expected post 3rd May’20. Note that MFIs use FINO’s digital platforms to take deposits, etc.

Renewed focus on digitization Post demonetization, changes implemented were largely on the payments front. However, in the current crisis,

increased digitization is happening internally (processes, means of customer interactions, etc.) Moreover,

digitization during demonetization was restricted to urban areas while in this case, it could be more rural. While the

likes of RuPay already exist in rural areas, Mr. Gupta expects deeper collaboration between banks and Fintechs.

Business Correspondent model – Variable cost model leads to quicker break-even Mr. Gupta believes that the government and the RBI have a favorable stance toward business correspondents (BC).

There are more than 800k BCs/merchant points across the country. Typically, a margin of 40-150bp is earned on a

transaction, of which 60-70% is paid to the merchant while the rest is retained by the company. Importantly, a key

mantra for success in this business, especially in rural areas, is running a variable-cost model. For example, FINO

pays INR25-30 per customer for referrals, which is much lower than the acquisition cost of banks. Hence, break-even

happens in 3-6 months on an average. In the recent past, banks have increased payouts to BCs.

23 April 2020 Financials

Expert Speak

Mr. Rishi Gupta,

Managing Director and CEO, Fino Payments Bank Ltd. Mr. Gupta is a founding

member of Fino Paytech Ltd. Prior to Fino Paytech, Mr.

Gupta worked with the International Finance

Corporation in New Delhi. He is also the founding member of the Business Correspondent Federation of India and has

served as the Chairman of its Economic Affairs Committee.

Mr. Gupta has over two decades of experience across

diverse verticals such as manufacturing, banking and international institutions. He began his career with Maruti

Udyog Ltd. and then moved to ICICI Bank before joining Fino.

24 April 2020 19

Boarding (for aviation industry) to take time Aviation industry is hit hard by global lockdowns and is struggling to keep its wings up. With

various countries now planning to come out of the lockdown, we interacted with Mr. Jitender

Bhargava, Superannuated as Executive Director of Air India, to understand the current

turbulences faced by aviation companies in light of the Coronavirus (COVID-19) pandemic. Key

highlights:

Global impact of COVID-19

Airlines have been impacted by various travel advisory bans issued globally due to the

spread of COVID-19. Due to this, world over >90% of the fleet is grounded. IATA

estimates global aviation revenue loss of ~USD315b, with ~25m likely job losses.

Globally, ~8 airline companies have declared cessation of operations (including Air

Deccan in India). The impact of COVID-19 is not comparable with SARS of 2003 (the

latter was limited only to APAC), and thus, it would be years before normalcy is

restored.

Also, work from home (WFM) and virtual connects have been a huge success currently,

minimizing the need for air travel. This would lead to a huge change in travelers’

psychology (as corporations would consider cutting air travel expenses). IATA

commissioned a survey, which suggests that ~40% travelers could delay travel by six

months, while ~69% travelers would delay flying until their personal financial situation

stabilizes. China, which resumed its services last month, saw a spurt in travelers initially

(primarily a demand from stranded migrant travelers), which later moderated.

Social distancing – key to operations resuming, but also a dampener

Aviation industry is expected to open up completely only after the virus is contained or

if there is optimism on the invention of a successful vaccine. Emirates has stated that it

is not looking to start flying before Jul’20 (an optimistic scenario). Even Australia – the least affected country by

COVID-19 – is flying at lower than 10% Passenger Load Factors (PLFs). Social gatherings would also be restricted in

terms of numbers, which is a weak sign for the sector (Tokyo Olympics has been postponed to 2021 and many

articles are suggesting that it may not be held even then).

Further, it has been proposed that the last three rows of an aircraft should be kept vacant for self-isolation while the

entire middle row should also be empty for social distancing. If such social distancing measures are implemented,

only 30-35% of an aircraft can be filled at max, which would demand even higher breakeven costs. Ryanair has

stated that it would not start flying if social distancing is implemented (with vacant middle seats). Airlines are likely

to provide masks and gloves (however, there is a huge supply constraint of the same) and sanitize planes each time

they takeoff, which would add to their operating costs. Higher breakeven would require hike in fares, thus limiting

air travel affordability. Nevertheless, screening for COVID-19 at airports would also slow air traffic further.

23 April 2020 Aviation

Expert Speak

Mr. Jitender Bhargava,

(Superannuated as Executive Director of Air India)

Mr. Jitender Bhargava, has

held various key positions

with Air India in his two-

decade long tenure, 13 years

of which were at the level of

Executive Director. Mr.

Bhargava has authored a

book, 'The Descent of Air

India', chronicling the

diminution of the national

carrier – from an iconic airline

to being virtually grounded

and needing periodic fund

infusion to remain

operational. He is also a

consultant on aviation

matters for an international

consultancy.

24 April 2020 20

India – Airlines need to be more disciplined now and must revisit their business model

Airlines in India have been adding fleet at a frantic pace to capture market share, thus, sacrificing their profitability.

India currently has a total of ~650 planes, of which ~50% are on lease. According to CAPA’s estimate, of the total

fleet, ~200 planes would be surplus capacity in the current situation. SpiceJet had utilization of >90% for the last four

years, but high capacity addition wiped off its cash reserves. Currently, barring INDIGO, no other Indian airline

carrier has enough cash reserves. Further, lease expenses are also killing the cash-strapped Indian airlines. Leasing

companies are under stress, since they have to pay their outstanding loans, thus renegotiations of lease rentals

could be tough. INDIGO and SpiceJet have placed huge orders for new aircraft, and if markets don’t revive, they

would not be able to sell seats, and the low-fare war would continue. Thus, the companies would have to revisit

their strategies now.

Indian airlines have been rushing to start their operations without any clear directive from the DGCA. International

operations are expected to be delayed by months; the resumption of even domestic operations would be quite

tough. For instance, the Mumbai – Delhi route, which has more than 100 daily flights, might not be initiated at first

as they are marked red zones, thus impacting flights on other routes as well. The Government of India (GoI) is

planning on providing possible aids (however, GoI has limited resources unlike the US) like extension of credit for

fuel expenses or airport charges, etc.

Air India Divestment likely to get postponed in the current environment

The GOI is expected to further roll forward the dates for ‘Expression of Interest’ in Air India in the current

environment. It is likely that airlines with deep pockets might participate in the bids, but with huge operational

constraints and their fleet grounded, it does not seem likely that they would be in a position to acquire Air India.

Logically, there could be two options to revive Air India – disinvestment or bringing in professional management and

thorough leadership – but, the government is only looking at disinvestment. Other airlines are adding fleet while Air

India (being cash-strapped) is seeing reduction in fleet, and thus, its market share is expected to continue sliding.

24 April 2020 21

\

SHRIRAM TRANSPORT FINANCE: PENT-UP DEMAND IN TRANSPORTATION TO START SHOWING FROM MID MAY; Umesh Revankar, MD As far as the collection is concerned, most of our branches are open now.

Company is operating as per the local government’s broad instructions. Many of

the branches are opening between 8-1pm; so collections are taking place.

As far as the new disbursement is concerned, RTOs are not open. What is most

important in business is RTOs have to be open. The transfer of ownership has to

happen, the endorsement or hypothecation has to be done on the RC book; only

then company can lend. So have a huge pipeline case pertaining to March. So

unless the RTO office starts operating and completes the transaction, will not be

able to lend. So the pipeline cases are huge and company is eagerly waiting for

RTO to start functioning.

Feel the business will resume in the fullest extent by mid May because all the

production lines, manufacturing, all of them have to restart their business and

nearly 40% of the manufacturing activity has started from 20 April. The only

thing for them is to get back the labour force and start the operation with

around 25% to 30% of the workforce minimum and that will take time.

Huge pent-up demand which will start showing from mid May and June should

be a normal month is what I feel.

In conversation

https://economictimes.indiatimes.com/markets/expert-view/pent-up-demand-in-transportation-to-start-showing-from-mid-may-umesh-revankar/articleshow/75318810.cms

24 April 2020 22

RECENT AMENDMENTS TO FDI POLICY – A BOON OR A BANE? Much has been reported about press note 3 of 2020 issued by the Department

for Promotion of Industry and Internal Trade on April 17, over the last couple of

days. Pursuant to the press note, an entity situated in a country which shares

land border with India, or where the beneficial owner of an investment into

India is situated in or is a citizen of any such country, is inter alia permitted to

invest in Indian entities only under the government approval route. Further, any

transfer of ownership of any existing or future foreign direct investment (FDI) in

an entity in India (indirectly or indirectly) resulting in the beneficial ownership

falling within the purview of the above restrictions, would require the

government’s approval. The above restrictions came into effect from April 22

(i.e. the date of notification of the amendments to the Foreign Exchange

Management (Non-debt Instruments) Rules, 2019 (“Rules")). The press note

appears to have been issued in the wake of the covid-19 pandemic and the

effect it has had on entities operating in various sectors, making them relatively

tempting targets for acquisition. The restrictions contemplated would cut across

all sectors and would be applicable to entities operating in sectors which are

otherwise permitted to receive FDI under the automatic route (such as

attractive sectors like e-commerce, services and logistics).

From the think tank

https://www.livemint.com/opinion/columns/opinion-recent-amendments-to-fdi-policy-a-boon-or-a-bane-11587629708642.html

24 April 2020 23

CMP TP % Upside EPS (INR) EPS Gr. YoY (%) P/E (x) P/B (x) ROE (%)

Company Reco (INR) (INR) Downside FY19 FY20E FY21E FY19 FY20E FY21E FY20E FY21E FY20E FY21E FY20E FY21E

Automobiles

Amara Raja Buy 559 630 13 28.3 37.7 34.6 2.6 33.3 -8.3 14.8 16.1 2.5 2.3 18.1 14.8

Ashok Ley. Buy 47 61 31 6.9 1.1 0.9 16.4 -84.2 -18.0 42.9 52.3 1.6 1.6 3.8 3.1

Bajaj Auto Neutral 2432 2382 -2 165.4 178.2 167.2 9.3 7.7 -6.2 13.6 14.5 3.1 2.9 23.3 20.6

Bharat Forge Buy 257 342 33 22.2 15.2 12.8 20.3 -31.6 -15.8 16.9 20.1 2.1 2.0 12.7 10.2

Bosch Neutral 10588 10607 0 542.4 403.1 350.6 15.5 -25.7 -13.0 26.3 30.2 4.1 3.8 14.3 13.0

CEAT Buy 808 903 12 66.9 47.6 51.9 4.6 -29.0 9.1 17.0 15.6 1.1 1.1 6.8 7.0

Eicher Mot. Buy 14065 17200 22 813.9 703 680 1.8 -13.6 -3.3 20.0 20.7 3.7 3.2 19.8 16.6

Endurance Tech. Buy 583 810 39 36.2 39.7 32.7 24.5 9.8 -17.8 14.7 17.9 2.8 2.5 20.3 14.7

Escorts Neutral 752 654 -13 53.2 53.5 50.1 34.7 0.4 -6.3 14.1 15.0 2.2 1.7 16.4 13.1

Exide Ind Buy 150 177 18 9.1 9.6 9.2 10.6 5.8 -3.9 15.6 16.2 2.0 1.8 12.6 11.3

Hero Moto Neutral 1864 2072 11 169.5 154.1 126.0 -8.5 -9.1 -18.2 12.1 14.8 2.7 2.7 23.2 18.2

M&M Buy 348 519 49 42.7 33.2 33.8 4.1 -22.3 1.9 10.5 10.3 1.1 1.1 10.1 8.0

Mahindra CIE Buy 82 -100 14.1 9.4 7.3 44.7 -33.2 -22.9 8.7 11.2 0.7 0.6 8.0 5.8

Maruti Suzuki Buy 5161 6280 22 247.7 191.8 166.9 -7.1 -22.6 -13.0 26.9 30.9 3.2 3.1 11.5 9.6

Motherson Sumi Buy 74 98 33 5.1 3.7 3.1 -5.2 -27.1 -17.2 19.8 23.9 1.9 1.8 10.1 7.8

Tata Motors Buy 76 90 19 -4.4 -14.9 -23.3 -119.0 Loss Loss NM NM 0.5 0.5 -9.0 -15.4

TVS Motor Neutral 299 297 -1 14.1 12.8 11.5 1.1 -9.2 -10.1 23.3 26.0 3.8 3.5 17.2 14.0

Aggregate -31.4 -25.2 109.4 31.6 15.1 2.0 1.8 6.3 12.2

Banks - Private

AU Small Finance Buy 506 800 58 13.2 24.7 26.6 28.9 87 7.8 20.5 19.0 3.5 2.9 19.4 16.7

Axis Bank Buy 430 600 40 18.2 16.4 27.8 1,538.1 -10 69.5 26.2 15.5 1.4 1.3 5.8 8.8

Bandhan Bank Buy 201 350 74 16.4 22.3 20.1 39.1 37 -10.0 9.0 10.0 2.1 1.8 23.2 19.1

DCB Bank Neutral 87 105 20 10.5 10.9 10.3 32.0 3.7 -5.1 8.0 8.4 0.8 0.7 11.1 9.6

Equitas Hold. Buy 56 85 52 5.2 8.0 8.6 1,186.6 54.6 7.7 7.0 6.5 0.7 0.6 10.6 10.4

Federal Bank Buy 45 75 67 6.3 8.2 7.1 32.2 31.0 -13.7 5.5 6.3 0.6 0.6 11.8 9.4

HDFC Bank Buy 955 1200 26 39.6 48.0 55.2 16.9 21.2 14.9 19.9 17.3 3.1 2.7 16.4 16.5

ICICI Bank Buy 353 540 53 5.2 14.6 20.7 -52.8 178.6 41.9 24.2 17.1 2.0 1.9 8.7 11.5

IndusInd Buy 410 700 71 54.9 65.0 64.7 -8.8 18.4 -0.4 6.3 6.3 0.8 0.7 13.8 12.1

Kotak Mah. Bk Neutral 1250 1450 16 37.7 45.4 50.5 16.0 20.4 11.2 27.5 24.8 3.6 3.1 13.7 13.2

RBL Bank Buy 106 180 69 20.3 8.3 11.9 34.3 -59.1 43.6 12.8 8.9 0.5 0.5 4.6 5.5

Aggregate 33.3 21.6 26.0 16.0 12.7 2.1 1.8 12.8 14.3

Banks - PSU

BOB Buy 48 70 44 1.6 -3.3 6.6 -116.7 PL LP NM 7.3 0.3 0.3 -2.0 4.4

PNB Neutral 31 35 12 -27.1 -5.8 3.4 -46.1 Loss LP NM 9.0 0.4 0.4 -6.4 4.0

SBI Buy 187 300 61 2.6 18.7 22.2 -148.2 627 18.3 10.0 8.4 0.7 0.7 7.4 8.1

Aggregate LP 105 46 8 5.7 0.6 0.5 6.6 8.9

NBFCs

Aditya Birla Cap Buy 50 125 150 4.0 4.3 5.1 25.7 8.3 20.2 11.7 9.7 1.1 1.0 10.2 10.8

Bajaj Fin. Neutral 2175 2625 21 69.3 94.1 79.2 59.6 35.8 -15.8 23.1 27.5 3.9 3.5 21.3 13.5

Cholaman.Inv.&Fn

Buy 152 225 48 15.2 16.8 15.6 29.1 10.8 -7.1 9.0 9.7 1.5 1.3 18.9 14.1

HDFC Buy 1663 2050 23 44.4 50.4 52.5 28.7 13.6 4.2 33.0 31.7 3.3 3.1 14.2 13.1

HDFC Life Insur. Neutral 488 525 8 6.3 6.5 7.5 14.6 2.7 15.2 75.0 65.1 4.5 3.8 20.1 17.2

ICICI Pru Life Buy 361 472 31 8.0 8.0 9.0 -29.5 1.2 11.6 44.9 40.2 2.1 1.8 16.1 15.9

IIFL Wealth Mgt Buy 947 1525 61 44.2 32.2 42.8 -4.1 -27.3 33.0 29.4 22.1 2.6 2.6 9.3 11.9

L&T Fin Holdings Buy 62 75 21 11.2 11.4 10.3 74.3 2.1 -9.2 5.4 6.0 0.8 0.7 16.1 13.1

LIC Hsg Fin Buy 287 350 22 48.1 49.7 45.6 21.4 3.2 -8.3 5.8 6.3 0.8 0.7 14.6 12.0

MAS Financial Buy 630 690 10 27.8 29.9 30.8 47.1 7.6 2.8 21.0 20.4 3.5 3.1 18.1 16.2

M&M Fin. Buy 156 200 28 25.3 17.1 10.3 53.9 -32.3 -40.1 9.1 15.2 0.9 0.8 9.7 5.5

Muthoot Fin Neutral 816 765 -6 49.2 75.0 80.0 10.8 52.3 6.7 10.9 10.2 2.9 2.4 29.3 25.8

PNB Housing Neutral 215 190 -12 71.1 67.5 50.9 40.9 -5.1 -24.6 3.2 4.2 0.4 0.4 14.1 9.6

Repco Home Buy 116 150 30 37.5 48.9 44.8 16.7 30.5 -8.5 2.4 2.6 0.4 0.3 18.3 14.4

Shriram City Union

Buy 728 950 30 149.8 168.6 134.0 48.7 12.5 -20.5 4.3 5.4 0.7 0.6 16.1 11.4

Valuation snapshot

Click excel icon for detailed

valuation guide

http://institution.motilaloswal.com/emailer/Research/MOST VALUATION GUIDE_New.zip

24 April 2020 24



Shriram Trans. Buy 641 975 52 113.0 128.9 75.0 4.2 14.1 -41.8 5.0 8.5 0.8 0.7 17.3 9.0

Aggregate 14.5 -5.6 23.0 17.3 14.1 2.1 1.9 12.0 13.3

Capital Goods

ABB Buy 902 1255 39 12.0 16.6 15.7 12.7 38.1 -5.4 54.5 57.5 5.4 5.1 10.0 8.8

Bharat Elec. Buy 76 86 13 7.9 6.5 7.2 37.7 -17.9 10.3 11.7 10.6 1.9 1.7 15.9 16.1

BHEL Neutral 21 22 3 3.5 1.9 1.9 58.9 -44.4 -1.1 11.0 11.1 0.2 0.2 2.1 2.1

Blue Star Neutral 556 515 -7 19.5 20.2 15.2 34.7 3.7 -24.4 27.6 36.5 5.7 5.3 20.5 14.6

CG Cons. Elec. Buy 228 270 19 6.0 7.5 7.7 15.5 24.9 3.6 30.6 29.5 10.0 8.4 32.8 28.3

Cummins Neutral 418 360 -14 26.1 22.9 17.3 10.8 -12.0 -24.4 18.2 24.1 2.7 2.5 14.5 10.5

Engineers India Buy 69 100 45 5.9 6.7 7.6 -8.4 14.5 12.7 10.3 9.1 2.0 1.9 17.9 19.3

Havells Neutral 530 590 11 12.7 12.3 11.0 12.9 -3.0 -10.6 43.2 48.3 7.0 6.4 16.2 13.3

K E C Intl Buy 185 255 38 18.9 23.1 24.0 6.1 22.3 3.6 8.0 7.7 1.6 1.4 20.2 17.7

L&T Buy 841 1200 43 63.5 70.4 61.6 22.8 11.0 -12.6 11.9 13.7 1.7 1.6 13.9 11.0

Siemens Neutral 1168 1450 24 25.1 30.5 29.4 27.1 21.6 -3.6 38.3 39.7 4.6 4.2 12.0 10.7

Thermax Neutral 705 865 23 27.2 24.9 29.1 32.4 -8.4 17.0 28.3 24.2 2.5 2.3 8.8 9.6

Voltas Buy 508 620 22 15.7 15.4 14.8 -9.1 -1.8 -3.7 32.9 34.2 3.8 3.5 11.5 10.3

Aggregate 4.1 -7.9 31.8 19.6 14.8 1.9 1.8 9.8 11.8

Cement

Ambuja Cem. Neutral 171 186 8 6.1 7.6 5.3 -3.2 24.1 -29.3 22.7 32.1 1.5 1.5 6.9 4.7

ACC Buy 1189 1370 15 53.5 72.3 40.6 9.9 35.1 -43.8 16.4 29.3 1.9 1.9 12.3 6.5

Birla Corp. Buy 424 770 82 33.2 61.8 51.0 53.6 86.2 -17.5 6.9 8.3 0.7 0.6 10.2 7.8

Dalmia Bhar. Buy 532 710 33 15.8 11.4 -5.5 4.3 -27.5 PL 46.5 NM 1.0 1.0 2.1 -1.0

Grasim Inds. Neutral 501 575 15 66.1 35.8 46.6 39.7 -45.8 30.0 14.0 10.7 0.8 0.8 3.2 1.4

India Cem Neutral 103 97 -6 2.3 3.6 2.1 -31.0 61.1 -41.9 28.4 48.8 0.6 0.6 2.1 1.2

J K Cements Buy 1148 1355 18 34.1 59.0 48.1 -19.8 72.8 -18.4 19.5 23.9 2.9 2.7 15.9 11.7

JK Lakshmi Ce Buy 204 305 49 6.8 22.1 12.7 -8.7 227.6 -42.4 9.2 16.0 1.4 1.3 16.0 8.3

Ramco Cem Neutral 567 570 0 21.9 23.8 17.3 -8.7 8.7 -27.4 23.9 32.9 2.7 2.5 11.9 8.0

Shree Cem Neutral 18710 19300 3 324.1 407.7 317.5 -18.2 25.8 -22.1 45.9 58.9 5.1 4.8 12.9 8.4

Ultratech Buy 3446 4160 21 90.3 132.6 117.3 1.0 46.8 -11.5 26.0 29.4 2.6 2.4 10.8 8.8

Aggregate 8.0 -15.1 51.8 27.1 17.8 1.8 1.7 6.5 9.3

Consumer

Asian Paints Sell 1820 1380 -24 23.1 29.7 27.3 9.1 29.0 -8.2 61.2 66.7 16.4 15.3 28.3 23.8

Britannia Neutral 2948 3010 2 48.1 57.4 58.0 15.1 19.3 1.0 51.3 50.8 15.5 15.2 31.3 30.2

Colgate Buy 1480 1620 9 27.4 29.1 30.7 8.8 6.3 5.3 50.8 48.3 29.1 31.3 55.9 62.4

Dabur Neutral 499 450 -10 8.5 9.0 9.5 9.5 5.6 6.2 55.6 52.3 13.8 12.8 26.4 25.4

Emami Buy 206 270 31 12.2 12.5 12.4 0.2 3.1 -0.7 16.4 16.6 4.0 4.1 25.9 24.5

Godrej Cons. Neutral 541 622 15 15.1 14.3 14.8 7.2 -5.5 3.9 38.0 36.6 7.4 7.4 19.7 20.2

GSK Cons. Neutral 10754 10874 1 216.1 277.0 290.9 29.8 28.2 5.0 38.8 37.0 9.7 8.7 26.6 24.7

HUL Buy 2316 2645 14 28.9 32.5 35.9 18.2 12.2 10.5 71.4 64.6 64.3 69.1 90.9 103.1

ITC Neutral 181 192 6 10.2 12.8 12.8 14.8 25.5 0.6 14.2 14.1 3.6 3.4 26.1 24.7

Jyothy Lab Neutral 120 122 2 5.4 4.7 4.8 10.5 -12.9 3.2 25.6 24.8 3.3 3.3 12.9 13.2

Marico Buy 302 346 15 7.2 8.0 8.0 14.3 10.4 0.5 37.9 37.7 10.5 9.3 30.7 26.1

Nestle Neutral 17412 15115 -13 178.6 206.8 226.9 27.5 15.8 9.7 84.2 76.7 86.9 81.2 71.2 109.4

Page Inds Neutral 17659 17565 -1 353.2 334.5 326.8 13.5 -5.3 -2.3 52.8 54.0 22.7 20.9 42.9 38.7

Pidilite Ind. Neutral 1540 1365 -11 18.6 25.3 23.1 -2.0 36.2 -8.5 60.9 66.6 15.4 13.5 27.8 21.6

P&G Hygiene Neutral 10782 9808 -9 129.6 132.6 141.7 12.5 2.3 6.8 81.3 76.1 33.6 29.5 44.2 41.3

Tata Consumer Buy 330 417 26 7.0 8.0 9.1 -14.6 14.2 14.1 41.3 36.2 2.7 2.2 6.8 7.9

United Brew Neutral 920 1003 9 21.3 16.3 17.4 42.8 -23.4 6.8 56.4 52.8 6.8 6.2 12.8 12.3

United Spirits Buy 529 663 25 9.3 11.4 12.0 38.1 22.9 4.5 46.2 44.3 10.1 8.2 21.9 18.6

Aggregate 17.5 3.5 13.4 40.5 35.7 11.0 10.4 27.3 29.2

Healthcare

Alembic Phar Neutral 699 705 1 31.1 45.9 37.9 42.0 47.6 -17.4 15.0 18.2 4.0 3.5 30.1 21.4

Alkem Lab Buy 2520 3135 24 63.8 92.3 109.9 8.4 44.6 19.1 27.3 22.9 4.8 4.1 18.8 19.3

Ajanta Pharma Buy 1328 1635 23 44.4 50.6 60.6 -16.1 13.9 19.7 26.2 21.9 4.5 3.9 18.4 18.9

Aurobindo Buy 629 745 18 43.2 46.3 51.0 1.1 7.3 10.0 13.6 12.3 2.2 1.9 17.9 16.7

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Biocon Neutral 348 320 -8 6.2 7.2 9.9 99.6 16.9 36.2 48.0 35.3 6.2 5.5 13.5 16.5

Cadila Buy 332 410 24 18.3 14.6 17.6 4.3 -20.2 20.3 22.7 18.9 3.0 2.7 11.4 15.1

Cipla Neutral 587 550 -6 18.7 20.7 26.0 -3.1 10.6 25.7 28.3 22.5 2.8 2.5 9.9 11.2

Divis Lab Neutral 2422 2215 -9 50.0 51.3 65.7 55.0 2.5 28.1 47.2 36.9 8.0 6.8 18.2 20.0

Dr Reddy’s Neutral 4027 3490 -13 105.2 123.6 150.7 62.6 17.5 21.9 32.6 26.7 4.3 3.8 13.9 15.1

Glenmark Neutral 340 295 -13 25.9 23.6 26.4 -9.0 -9.0 12.2 14.4 12.9 1.5 1.4 11.3 11.4

GSK Pharma Neutral 1447 1320 -9 24.6 27.0 33.7 25.2 9.6 24.9 53.7 43.0 13.5 12.3 25.2 28.7

IPCA Labs Buy 1533 1855 21 36.3 54.5 70.7 91.3 50.2 29.6 28.1 21.7 5.2 4.3 20.1 21.8

Jubilant Life Buy 386 415 7 56.9 58.0 57.4 26.7 1.9 -1.1 6.7 6.7 1.1 0.9 17.4 14.9

Laurus Labs Buy 469 520 11 10.4 19.6 26.0 -34.5 88.5 33.1 24.0 18.0 2.8 2.5 12.5 14.7

Lupin Buy 822 940 14 23.3 23.0 34.5 -27.1 -1.5 50.3 35.8 23.8 3.6 3.3 8.6 14.4

Strides Pharma Buy 348 405 16 6.9 26.0 37.3 -39.2 279.4 43.4 13.4 9.3 1.2 1.1 8.7 12.2

Sun Pharma Buy 477 535 12 15.1 17.6 21.2 12.2 16.6 20.4 27.1 22.5 2.5 2.3 9.8 10.8

Torrent Pharma Neutral 2421 2215 -9 42.7 57.9 76.8 -7.1 35.6 32.7 41.8 31.5 7.6 6.6 19.4 22.5

Aggregate 12.2 20.7 14.3 22.9 20.0 3.2 2.8 13.9 14.1

Infrastructure

Ashoka Buildcon Buy 64 92 44 11.5 10.8 6.0 35.8 -5.7 -44.2 5.9 10.6 0.7 0.7 12.9 6.6

IRB Infra Neutral 77 80 5 24.2 19.7 7.1 1.2 -18.5 -63.9 3.9 10.8 0.4 0.4 10.5 3.6

KNR Constructions

Buy 210 270 29 17.7 15.3 15.9 -8.2 -13.7 3.6 13.7 13.2 1.8 1.6 14.1 12.8

Aggregate 11.6 9.4 0.6 0.6 5.6 6.5

Media

PVR Buy 974 1605 65 37.9 21.9 10.2 41.9 -42.2 -53.5 44.5 95.7 3.0 2.9 7.6 3.1

Sun TV Buy 373 436 17 35.4 36.6 34.9 27.6 3.5 -4.6 10.2 10.7 2.3 2.1 24.6 20.5

Zee Ent. Neutral 158 165 5 16.4 16.9 19.4 12.7 2.9 14.7 9.3 8.1 1.5 1.3 18.1 17.0

Aggregate 4.0 0.2 18.4 10.3 8.7 1.7 1.5 16.1 16.6

Metals

Hindalco Buy 111 218 96 24.7 19.2 9.8 30.9 -22.2 -49.1 5.8 11.4 0.6 0.6 10.6 5.4

Hind. Zinc Neutral 172 190 11 18.8 16.4 13.6 -10.8 -12.7 -17.2 10.4 12.6 1.8 1.8 18.7 14.4

JSPL Buy 86 188 118 3.3 -6.5 14.3 -138.7 PL LP NM 6.1 0.3 0.3 -2.0 4.4

JSW Steel Buy 160 213 33 31.8 15.7 2.7 32.4 -50.8 -83.1 10.2 60.2 1.0 1.0 10.3 1.7

Nalco Buy 34 41 22 9.2 0.3 0.3 79.9 -96.8 -9.9 114.0 126.4 0.7 0.7 0.6 0.5

NMDC Buy 77 140 82 15.6 15.6 14.2 19.2 -0.3 -8.4 4.9 5.4 0.8 0.8 17.5 14.6

SAIL Neutral 27 29 9 6.3 -0.7 -4.4 2,344.1 PL Loss NM NM 0.3 0.3 -0.7 -4.8

Vedanta Neutral 78 85 10 18.1 13.1 4.7 -11.0 -27.7 -64.2 5.9 16.5 0.5 0.5 7.7 3.0

Tata Steel Neutral 270 322 19 88.6 33.6 -16.6 27.3 -62.0 PL 8.0 NM 0.5 0.5 6.0 -3.0

Aggregate -41.9 -54.9 181.4 19.4 6.9 0.7 0.6 3.4 9.3

Oil & Gas

Aegis Logistics Buy 166 237 43 6.6 4.2 10.5 11.9 -36.6 149.6 39.4 15.8 3.8 3.2 10.0 22.1

BPCL Neutral 355 494 39 43.4 17.8 35.1 -12.9 -58.8 96.7 19.9 10.1 1.7 1.5 8.8 16.0

Castrol India Buy 125 200 60 7.2 8.4 9.6 2.4 16.8 14.6 14.9 13.0 9.0 8.1 65.3 65.7

GAIL Buy 83 140 68 14.0 10.4 9.8 38.4 -25.6 -6.3 8.0 8.5 0.8 0.8 10.6 9.5

Gujarat Gas Buy 262 340 30 6.2 17.1 12.3 46.9 173.4 -28.2 15.4 21.4 5.8 4.8 44.2 24.5

Gujarat St. Pet. Buy 193 290 50 14.1 19.6 17.1 18.9 39.3 -13.0 9.9 11.3 1.6 1.4 17.7 13.5

HPCL Buy 209 330 58 43.9 17.4 37.5 -7.3 -60.3 115.1 12.0 5.6 1.0 0.9 8.5 17.1

IOC Buy 83 169 103 18.8 3.6 13.2 -23.7 -81.0 267.3 23.2 6.3 0.7 0.6 2.9 10.3

IGL Neutral 450 515 15 11.2 17.2 16.4 19.1 53.3 -4.7 26.1 27.4 6.2 5.3 26.2 20.7

Mahanagar Gas Neutral 912 1115 22 55.3 82.4 64.3 14.3 49.0 -22.0 11.1 14.2 3.2 2.8 31.0 20.9

MRPL Neutral 32 49 53 1.9 -13.3 5.5 -84.8 PL LP NM 5.9 0.7 0.6 -24.4 10.9

Oil India Buy 86 127 48 32.0 17.5 10.4 35.6 -45.3 -40.6 4.9 8.3 0.3 0.3 7.0 4.0

ONGC Buy 67 105 56 27.1 17.1 11.3 34.4 -37.0 -33.9 3.9 6.0 0.4 0.4 9.8 6.2

PLNG Buy 223 333 49 14.4 21.0 19.1 3.7 45.8 -8.9 10.7 11.7 3.0 2.8 29.9 25.1

Reliance Ind. Buy 1372 1589 16 67.2 76.8 71.2 10.4 14.2 -7.2 17.9 19.3 1.9 1.7 11.2 9.5

Aggregate -27.4 6.7 49.0 13.6 9.1 1.3 1.1 9.2 12.5

Retail

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Avenue Supermarts

Sell 2296 1750 -24 14.5 22.1 25.2 11.9 52.6 14.1 104.0 91.2 20.6 16.8 21.9 20.3

Aditya Birla Fashion

Buy 124 240 94 1.6 2.0 1.2 156.7 20.1 -38.7 62.7 102.3 6.6 6.2 10.6 6.3

Future Lifestyle Under Review

149 - 8.6 5.5 -1.5 30.1 -35.6 PL 26.8 NM 1.3 1.3 5.2 -1.3

Future Retail Under Review

98 - 14.6 10.7 3.7 19.1 -27.0 -65.2 9.2 26.6 0.8 0.8 10.4 2.9

Jubilant Food. Buy 1496 1715 15 24.1 24.8 24.2 62.0 2.9 -2.2 60.3 61.7 13.7 12.4 22.7 20.1

Shoppers Stop Neutral 194 240 24 7.8 -1.8 0.6 -36.3 PL LP NM 318.3 1.8 1.8 -1.7 0.6

Titan Company Neutral 912 1085 19 15.7 16.8 17.0 24.0 7.4 1.1 54.2 53.6 13.4 11.8 24.7 23.4

Trent Buy 498 575 16 2.9 2.6 2.4 11.6 -10.1 -6.7 189.5 203.2 6.1 6.0 4.3 3.2

V-Mart Retail Buy 1720 2060 20 39.5 44.0 33.5 -8.0 11.4 -23.8 39.1 51.3 6.4 5.7 17.7 11.7

Aggregate 7.2 -8.2 57.7 74.8 47.4 9.0 7.9 12.1 16.6

Technology

Cyient Neutral 215 327 52 43.4 35.8 32.7 13.4 -17.4 -8.8 6.0 6.6 0.9 0.8 14.3 12.2

HCL Tech. Buy 479 590 23 36.8 40.0 40.2 17.6 8.6 0.7 12.0 11.9 2.6 2.3 23.3 20.5

Hexaware Neutral 269 309 15 19.3 21.2 20.4 16.5 9.8 -4.0 12.7 13.2 2.9 2.6 24.8 21.0

Infosys Buy 678 775 14 37.1 39.0 36.8 3.9 5.3 -5.7 17.4 18.4 4.7 4.0 25.3 21.8

L & T Infotech Buy 1458 1783 22 86.6 84.2 92.4 30.6 -2.8 9.7 17.3 15.8 4.3 3.6 27.2 24.9

Mindtree Buy 765 827 8 44.7 37.4 37.4 55.5 -16.3 -0.2 20.4 20.5 4.0 3.8 20.2 18.9

Mphasis Neutral 694 682 -2 56.1 58.5 52.2 27.4 4.2 -10.8 11.9 13.3 2.5 2.3 21.7 18.9

NIIT Tech Neutral 1179 1095 -7 66.2 75.0 72.3 45.3 13.2 -3.5 15.7 16.3 3.2 2.8 21.3 18.3

Persistent Sys Buy 481 594 23 44.0 42.8 36.1 8.9 -2.8 -15.5 11.2 13.3 1.6 1.5 14.1 11.6

TCS Neutral 1877 1900 1 83.1 86.2 82.3 23.3 3.7 -4.5 21.8 22.8 8.2 7.0 36.4 33.1

Tech Mah Buy 523 718 37 48.2 46.3 47.1 12.8 -3.9 1.7 11.3 11.1 2.2 2.1 20.0 19.4

Wipro Neutral 181 188 4 15.3 16.6 15.4 21.6 8.5 -7.3 10.9 11.7 1.8 1.7 17.5 15.0

Zensar Tech Neutral 92 99 7 14.4 11.5 8.8 40.4 -19.7 -23.6 8.0 10.5 1.0 0.9 12.7 8.9

Aggregate 2.8 -4.4 18.3 17.3 14.6 3.9 3.4 22.3 23.3

Telecom

Bharti Airtel Buy 496 620 25 -8.7 -7.3 3.7 -350.3 Loss LP NM 132.5 3.2 3.2 -5.1 2.4

Bharti Infratel Neutral 166 189 14 13.6 17.0 12.8 -0.3 25.0 -24.7 9.8 13.0 2.1 2.1 21.7 16.9

Vodafone Idea 4 -18.5 -7.2 -5.2 93.3 Loss Loss NM NM 0.7 4.2 -53.4 -143.0

Tata Comm Neutral 372 375 1 -2.2 11.9 25.5 -288.6 LP 114.8 31.3 14.6 71.9 12.1 -1,974 142.3

Aggregate Loss Loss Loss -36 -45.2 3.2 3.5 -8.7 -7.7

Utiltites

Coal India Buy 141 202 43 28.3 23.2 18.0 47.9 -18.1 -22.6 6.1 7.8 2.7 2.4 44.5 30.3

CESC Buy 613 761 24 88.9 94.2 84.5 43.1 6.0 -10.3 6.5 7.3 0.8 0.8 13.3 10.9

JSW Energy Buy 40 65 64 4.2 4.1 3.6 40.2 -2.9 -11.7 9.6 10.9 0.5 0.5 5.6 4.8

NHPC Neutral 21 23 11 2.6 3.0 2.9 5.9 17.0 -3.9 6.9 7.2 0.6 0.6 9.6 8.8

NTPC Buy 95 148 55 11.6 13.2 14.5 30.3 13.7 10.3 7.2 6.6 0.8 0.7 11.4 11.8

Power Grid Buy 158 225 42 19.2 20.4 22.1 16.0 6.5 7.9 7.7 7.2 1.3 1.2 17.3 17.0

Torrent Power Buy 304 342 13 18.7 23.8 25.8 -4.6 27.0 8.5 12.8 11.8 1.5 1.4 12.1 12.0

Tata Power Neutral 33 58 77 2.1 3.8 4.1 -60.5 77.8 9.1 8.7 8.0 0.5 0.5 6.0 6.4

Aggregate -1.0 -3.2 25.4 7.3 5.8 1.0 1.0 14.3 16.5

Others

Brigade Enterpr. Buy 125 231 85 11.7 8.1 6.0 63.2 -31.2 -25.9 15.5 20.9 1.1 1.1 7.4 5.2

BSE Buy 370 647 75 38.1 24.9 30.4 -12.4 -34.7 22.5 14.9 12.1 0.8 0.8 5.4 6.8

Concor Buy 368 518 41 19.9 16.4 14.4 14.9 -17.7 -12.5 22.4 25.6 2.1 2.0 9.6 8.1

Coromandel Intl Buy 558 719 29 25.4 34.9 38.3 7.6 37.0 9.8 16.0 14.6 4.0 3.3 27.2 24.5

Essel Propack Buy 177 210 18 6.0 7.2 9.0 7.3 20.6 23.9 24.5 19.8 3.6 3.2 15.6 17.1

Indian Hotels Buy 79 106 35 2.4 2.6 -3.3 257.4 10.7 PL 30.2 NM 2.0 2.3 7.0 -9.1

Interglobe Neutral 932 1300 39 4.1 -5.2 -75.1 -93.0 PL Loss NM NM 5.3 7.8 -2.9 -50.7

Info Edge Neutral 2460 2400 -2 23.0 20.3 25.9 54.2 -11.5 27.5 121.2 95.0 12.0 11.2 13.9 12.3

Godrej Agrovet Buy 387 423 9 12.5 11.4 10.5 10.9 -8.7 -7.8 33.8 36.7 4.2 4.0 12.9 11.2

Kaveri Seed Buy 387 427 10 34.4 38.4 34.0 7.7 11.5 -11.4 10.1 11.4 2.6 2.5 24.3 22.5

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Lemon Tree Hotel Buy 18 23 27 0.7 0.0 -2.0 271.9 -98.8 PL 2,205.7 NM 1.1 1.2 0.1 -12.8

MCX Buy 1060 1400 32 28.7 46.7 44.0 35.2 63.0 -5.7 22.7 24.1 3.9 3.6 18.2 15.7

Oberoi Realty Buy 354 535 51 22.5 16.0 16.2 78.1 -29.0 1.3 22.2 21.9 1.5 1.4 7.0 6.7

Phoenix Mills Buy 527 808 53 25.0 22.6 17.1 57.8 -9.3 -24.3 23.3 30.8 2.1 2.0 9.6 6.8

Quess Corp Neutral 210 410 95 17.5 17.8 21.0 -19.8 1.5 17.9 11.8 10.0 0.8 0.7 9.1 9.8

PI Inds. Buy 1513 1680 11 29.7 35.7 48.0 11.6 19.9 34.5 42.4 31.5 7.8 6.5 19.9 22.5

SRF Buy 3642 4236 16 113.7 158.0 158.7 60.0 38.9 0.4 23.0 22.9 4.3 3.7 20.4 17.3

S H Kelkar Buy 73 119 64 6.1 5.2 7.4 -13.4 -14.3 41.3 13.8 9.8 1.2 1.1 8.8 12.2

Tata Chemicals Buy 263 296 12 42.9 32.4 35.1 -10.8 -24.6 8.3 8.1 7.5 0.5 0.5 8.5 9.0

Team Lease Serv. Buy 1651 2300 39 57.3 50.8 47.1 33.4 -11.4 -7.4 32.5 35.1 4.5 4.0 14.9 12.1

Trident Buy 5 6 8 0.9 0.8 0.7 87.3 -11.1 -16.7 6.5 7.8 0.8 0.8 12.7 10.0

UPL Neutral 349 366 5 31.6 39.3 39.3 9.2 24.2 -0.1 8.9 8.9 1.7 1.5 19.6 17.5

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Index 1 Day (%) 1M (%) 12M (%) Index 1 Day (%) 1M (%) 12M (%)

Sensex 1.5 22.6 -17.4 Nifty 500 1.2 22.1 -20.5

Nifty-50 1.4 22.4 -19.5 Nifty Midcap 100 1.3 18.0 -27.1

Nifty Next 50 0.3 26.2 -16.2 Nifty Smallcap 100 1.7 19.7 -38.1

Nifty 100 1.2 22.9 -19.1 Nifty Midcap 150 1.1 18.7 -22.3

Nifty 200 1.2 22.4 -20.0 Nifty Smallcap 250 1.3 19.2 -33.4 Company 1 Day (%) 1M (%) 12M (%) Company 1 Day (%) 1M (%) 12M (%)

Automobiles 0.7 18.1 -37.1 Capital Goods -0.5 16.3 -36.0

Amara Raja Batt. 0.2 43.6 -17.4 ABB -0.4 3.7 -32.7

Ashok Leyland 3.9 29.7 -49.0 Bharat Elec. -0.7 28.4 -14.0

Bajaj Auto 2.1 25.5 -19.9 BHEL 0.2 5.9 -70.9

Bharat Forge -0.1 4.4 -47.3 Blue Star -1.0 9.3 -15.4

Bosch 2.0 25.4 -41.0 CG Cons. Elec. 4.1 19.8 -3.9 CEAT -1.5 27.0 -26.1 Cummins 1.7 6.5 -43.2

Eicher Motors 2.7 1.9 -30.9 Engineers India 4.0 34.1 -40.4

Endurance Tech. 2.8 -10.2 -50.1 Havells 2.5 6.3 -30.4

Escorts 0.3 36.4 0.8 K E C Intl 1.3 1.3 -36.5

Exide Inds. 1.6 12.8 -31.7 L&T -1.4 16.2 -37.6

Hero Motocorp -1.3 15.3 -29.3 Siemens 3.2 18.6 0.1

M & M 2.1 18.3 -47.7 Thermax 0.3 3.8 -28.1 Mahindra CIE 0.9 19.4 -63.7 Voltas 0.8 3.7 -18.3

Maruti Suzuki -0.4 22.5 -26.7 Cement 0.3 19.9 -28.4

Motherson Sumi 0.6 37.8 -51.0 Ambuja Cem. -3.0 17.8 -24.4

Tata Motors -0.3 8.5 -67.3 ACC -3.4 19.0 -28.3

TVS Motor Co. -1.2 -9.6 -41.8 Birla Corp. -0.2 3.0 -17.1

Banks-Private 3.2 21.6 -34.9 Dalmia Bhar. 1.1 30.2 -50.5

AU Small Fin. Bank -4.5 -13.5 -17.0 Grasim Inds. -1.8 15.5 -42.4 Axis Bank -0.3 39.4 -42.9 India Cem -0.1 16.6 1.4

Bandhan Bank 1.1 14.8 -65.1 J K Cements 0.2 25.7 33.1

DCB Bank -1.0 -3.0 -57.9 JK Lakshmi Ce 0.6 -0.1 -43.2

Equitas Holdings 19.0 46.0 -56.6 Ramco Cem 1.3 15.5 -25.3

Federal Bank 1.9 12.0 -52.8 Shree Cem -3.0 10.1 -3.3

HDFC Bank 2.8 23.9 -15.0 Ultratech 0.2 12.7 -18.0

ICICI Bank 5.0 24.3 -11.0 Consumer -1.4 24.2 -5.6 IndusInd Bank -1.3 21.9 -75.2 Asian Paints 0.4 21.5 27.2

Kotak Mah. Bank 8.6 13.6 -8.0 Britannia -0.1 38.2 -1.6

RBL Bank 1.2 -24.6 -84.2 Colgate -1.7 35.1 22.4

Banks-PSU -0.4 2.6 -58.0 Dabur -0.7 25.8 23.7

BOB 0.3 -10.2 -60.6 Emami 1.1 25.6 -47.4

PNB 0.0 -12.1 -64.3 Godrej Cons. 1.8 25.1 -19.5

SBI -1.0 2.9 -38.9 GSK Cons. 0.0 31.2 49.0 NBFCs 2.5 18.2 -20.2 HUL -3.0 23.7 33.0

Aditya Birla Cap 1.2 20.8 -49.2 ITC -0.9 17.1 -40.4

Bajaj Fin. 1.3 -3.9 -28.3 Jyothy Lab 2.6 35.0 -33.6

Cholaman.Inv.&Fn 0.8 11.3 -46.5 Marico -2.2 25.2 -16.9

HDFC 0.0 8.8 -14.1 Nestle -1.3 34.6 59.4

HDFC Life Insur. -3.1 42.5 22.6 Page Inds 1.1 5.6 -23.0

L&T Fin.Holdings 4.5 27.6 -55.5 Pidilite Ind. 0.2 20.6 27.3 LIC Hsg Fin 9.0 49.7 -42.6 P&G Hygiene 0.4 20.0 2.3

M&M Fin. 3.3 4.1 -63.3 Tata Consumer -0.1 45.6 57.4

Muthoot Fin 7.5 60.8 38.9 United Brew -0.5 14.7 -35.1

MAS Financial Serv. -2.7 19.4 5.1 United Spirits -2.2 18.0 -4.3

ICICI Pru Life -2.4 50.1 -2.0 Healthcare 0.1 46.0 0.0

IIFL Wealth Mgt 7.9 20.8 Alembic Phar 9.6 55.6 28.4

PNB Housing 3.5 24.3 -72.7 Alkem Lab -0.8 11.3 45.6 Company 1 Day (%) 1M (%) 12M (%) Ajanta Pharma 2.8 28.0 29.6

Repco Home 0.7 -15.3 -72.8 Aurobindo -2.2 113.7 -19.3

Shriram City Union -0.7 -21.4 -57.9 Biocon -3.6 36.2 13.2

Shriram Trans. 5.7 41.9 -45.0 Cadila 0.1 18.4 0.9

Note: Sectoral performance are of NSE/BSE Indices

Index and MOFSL Universe stock performance

24 April 2020 29

Company 1 Day (%) 1M (%) 12M (%) Company 1 Day (%) 1M (%) 12M (%)

Cipla -0.1 55.4 4.4 HCL Tech. 3.4 14.5 -13.2

Divis Lab 1.6 30.8 43.3 Hexaware 2.1 29.7 -21.9

Dr Reddy’s -0.7 45.6 43.0 Infosys 5.7 28.8 -6.8

Glenmark 6.9 80.9 -46.0 L&T Infotech 2.9 12.8 -13.4

GSK Pharma 0.7 29.2 12.1 Mindtree 4.6 4.4 -21.6 IPCA Labs -1.7 11.8 57.6 Mphasis 3.3 8.4 -27.9

Jubilant Life 5.0 53.0 -43.7 NIIT Tech 8.7 36.7 -9.5

Laurus Labs 0.0 46.1 20.3 Persistent Sys -0.9 2.1 -24.1

Lupin 1.9 39.0 -4.9 TCS 6.0 12.9 -13.0

Strides Pharma 4.1 26.8 -26.8 Tech Mah 0.9 6.7 -34.9

Sun Pharma 0.6 47.3 1.9 Wipro 1.4 6.3 -37.8

Torrent Pharma -1.0 34.8 33.8 Zensar Tech 2.5 31.2 -60.2 Infrastructure -0.3 24.2 -16.7 Telecom -0.7 22.3 8.2

Ashoka Buildcon 0.0 39.5 -49.8 Bharti Airtel -1.1 22.1 56.8

IRB Infra.Devl. -0.4 51.6 -41.8 Bharti Infra. -0.8 16.2 -43.6

KNR Construct. 0.6 7.5 -14.7 Idea Cellular 9.3 37.5 -74.6

Media 1.1 14.6 -50.7 Tata Comm -1.5 61.1 5.7

PVR -1.9 -19.3 -41.7 Utiltites -1.2 13.8 -26.8

Sun TV -0.6 31.4 -35.9 Coal India 0.0 10.3 -44.9 Zee Ent. 4.1 28.2 -61.5 CESC 1.4 48.5 -11.1

Metals 1.3 13.3 -44.3 JSW Energy -1.1 -8.3 -44.8

Hindalco 2.7 26.4 -44.6 NHPC Ltd -1.7 14.6 -10.5

Hind. Zinc 2.9 36.9 -37.6 NTPC -2.4 25.0 -28.8

JSPL 1.6 -2.5 -50.5 Power Grid -2.6 3.4 -18.0

JSW Steel -0.7 10.8 -44.5 Tata Power 0.6 -0.8 -52.1

Nalco 0.0 20.0 -36.7 Torrent Power 2.3 21.5 17.8 NMDC 3.2 21.9 -25.1 Others

SAIL 1.3 16.1 -51.2 Brigade Enterpr. 0.9 -0.2 -22.0

Vedanta 1.9 23.7 -55.6 BSE 1.2 30.5 -40.1

Tata Steel 0.7 -0.3 -48.4 Coromandel Intl 3.2 11.8 31.0

Oil & Gas 0.5 25.2 -23.5 Concor 0.2 23.0 -27.1

Aegis Logistics 0.2 30.6 -12.3 Essel Propack 2.5 24.7 32.8

BPCL -0.4 31.9 5.6 Godrej Agrovet 2.1 32.4 -25.9 Castrol India 6.4 33.3 -20.8 Indian Hotels 1.2 5.4 -48.2

GAIL -1.1 6.7 -50.9 Interglobe -2.9 9.7 -36.5

Gujarat Gas -2.2 28.1 65.9 Info Edge -1.4 46.3 27.9

Gujarat St. Pet. 1.9 17.5 2.3 Kaveri Seed 3.9 31.5 -14.8

HPCL -1.6 14.0 -17.5 Lemon Tree Hotel 4.0 -30.8 -75.7

IOC 0.1 2.8 -44.4 MCX 7.1 21.8 37.4

IGL 0.7 47.5 43.5 Oberoi Realty 0.3 -12.9 -32.9 Mahanagar Gas -2.0 30.4 -7.6 Phoenix Mills -3.1 -8.6 -12.2

MRPL 0.6 40.8 -54.4 PI Inds. 2.7 43.7 50.0

Oil India -0.1 17.1 -51.7 Quess Corp 1.3 -6.2 -69.2

ONGC 3.0 11.3 -59.0 SRF 5.7 35.5 48.0

PLNG 0.5 17.7 -5.0 S H Kelkar -4.4 3.1 -51.6

Reliance Ind. 0.6 55.2 0.6 Tata Chemicals 5.4 30.7 2.4

Aditya Bir. Fas. 1.6 -23.0 -41.9 Team Lease Serv. 2.1 2.3 -43.8 Retail Trident 2.6 53.5 -23.5

Avenue Super. 0.2 25.7 78.1 UPL -1.4 36.0 -44.6

Future Lifestyle 5.0 -11.7 -69.1

Future Retail 5.0 -8.0 -76.8

Jubilant Food -1.0 16.1 13.5

Shoppers St. 1.5 -2.1 -57.1

Titan Co. -4.2 14.3 -19.1 Trent 5.2 23.1 40.3

V-Mart Retail 2.7 25.6 -36.3

Technology 4.4 17.4 -18.8

Cyient 0.0 -6.8 -63.3

Index and MOFSL Universe stock performance

24 April 2020 30

Explanation of Investment Rating

Investment Rating Expected return (over 12-month)

BUY >=15%

SELL < - 10%

NEUTRAL > - 10 % to 15%

UNDER REVIEW Rating may undergo a change

NOT RATED We have forward looking estimates for the stock but we refrain from assigning recommendation

*In case the recommendation given by the Research Analyst is inconsistent with the investment rating legend for a continuous period of 30 days, the Research Analyst shall within following 30 days take appropriate measures to make the recommendation consistent with the investment rating legend.

Disclosures: The following Disclosures are being made in compliance with the SEBI Research Analyst Regulations 2014 (herein after referred to as the Regulations). Motilal Oswal Financial Services Ltd. (MOFSL) is a SEBI Registered Research Analyst having registration no. INH000000412. MOFSL, the Research Entity (RE) as defined in the Regulations, is engaged in the business of providing Stock broking services, Investment Advisory Services, Depository participant services & distribution of various financial products. MOFSL is a subsidiary company of Passionate Investment Management Pvt. Ltd.. (PIMPL). MOFSL is a listed public company, the details in respect of

which are available on www.motilaloswal.com. MOFSL (erstwhile Motilal Oswal Securities Limited - MOFSL) is registered with the Securities & Exchange Board of India (SEBI) and is a registered Trading Member with National Stock Exchange of India Ltd. (NSE) and Bombay Stock Exchange Limited (BSE), Multi Commodity Exchange of India Limited (MCX) and National Commodity & Derivatives Exchange Limited (NCDEX) for its stock broking activities & is Depository participant with Central Depository Services Limited (CDSL) National Securities Depository Limited (NSDL),NERL, COMRIS and CCRL and is member of Association of Mutual Funds of India (AMFI) for distribution of financial products and Insurance Regulatory & Development Authority of India (IRDA) as

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CIN No.: L67190MH2005PLC153397.Correspondence Office Address: Palm Spring Centre, 2nd Floor, Palm Court Complex, New Link Road, Malad(West), Mumbai- 400 064. Tel No: 022 7188 1000.Registration Nos.: Motilal Oswal Financial Services Limited (MOFSL)*: INZ000158836(BSE/NSE/MCX/NCDEX); CDSL and NSDL: IN-DP-16-2015; Research Analyst: INH000000412. AMFI: ARN - 146822; Investment Adviser: INA000007100; Insurance Corporate Agent: CA0579 ;PMS:INP000006712. Motilal Oswal Asset Management Company Ltd. (MOAMC): PMS (Registration No.: INP000000670); PMS and Mutual Funds are offered through MOAMC which is group company of MOFSL. Motilal Oswal Wealth Management Ltd. (MOWML): PMS (Registration No.: INP000004409)

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July 30, 2018 issued by Hon'ble National Company Law Tribunal, Mumbai Ben

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