modified india investment strategy - 19052014
TRANSCRIPT
-
8/12/2019 MODIfied India Investment Strategy - 19052014
1/17
For more Market Updates & Stock Research, visit www.karvyonline.com Page 1/17
Research Desk Stock Broking
MODIfiedIndia investment strategy 2014 May 19, 2014
MODI delivered the knockout punch
-
8/12/2019 MODIfied India Investment Strategy - 19052014
2/17
For more Market Updates & Stock Research, visit www.karvyonline.com Page 2/17
Research Desk Stock Broking
ndia Investment strategy post the election results 2014:
he Great Indian Election Mela 2014 has been concluded with the NDA winning 336 seats and getting a decisive mandat
overn the country for the period 2014-2019.The clear mandate of BJP alone winning 282 seats provides for stable govern
nd strong leadership. It is clear thatMr Narendra Modi would become the Prime Minister of the country. Mr. Modi has a pr
ack record of providing transparent governance, implementing pro-growth economic policies and empowering PSU.
Market participants are expecting industry friendly policies that will spur economic growth, employment, transparent govern
without policy logjam and corruption.A majority of the market participants are of the view that Modi would deliver economic gro
which was reflected in the pre-election rally after the opinion polls suggested the NDA could form the government. Nifty has r
harply from around 6000 levels during February 2014 to over 7100 levels a day before the election results announcement. On
lections results day, Nifty had scaled towards 7563.50 levelsas the election results indicated a clear majority for the governm
ut profit taking dragged the index to close at 7203 levels on May 16, 2014.
ndian equities are likely to outperform other asset classes as well as other emerging market equities based on expectations
trong recovery in the Indian economy and thus corporate earnings. This in turn would lead to an expansion in valuation multip
t this juncture, investment outlook is very clear and positive for long term investors and we expect the Nifty to scale tow
000 and higher in the next 12-18 months based on the projected EPS of Rs.560 and a conservative multiple of 16
Y15. For the domestic investors who under owned equities till now, this will provide an opportunity to increase the exposu
ood quality equities from a long term perspective.
Review of Returns in the last 5 years for various indices and asset classes:
ndian equit ies had outperfo rmed oth er asset classes, as shown in the graph; Nifty had generated a return of 20% in the
ne year, as against the 7.49% return generated by MCX-Gold. Nifty returns were higher than gold in the last one year as we
n the last five years. Globally, Equities had outperformed Gold in the last 5 years as well in the last one year. Indian equities
utperformed other emerging BRIC marketsconsistently in the last one year as well as in the last 5 years. This outperform
was mainly driven by heavy inflow of FII money to the tune of Rs.90,500 cr in the last one year and Rs 4,83,822 cr in the l
ears, even on the back of weak domestic macro factors which reflects FIIs confidence on the underlying fundamentals of In
conomy and corporate sector.
96.1889.42
38.81
19.0017.18
6.76
-7.15
7.30
-20.00
0.00
20.00
40.00
60.00
80.00
100.00
120.00
India Nifty Gold-MCX Gold-Global USD-INR
% return 5Y % return 1 Y
Indian Equities outperformance over other asset classes
-
8/12/2019 MODIfied India Investment Strategy - 19052014
3/17
For more Market Updates & Stock Research, visit www.karvyonline.com Page 3/17
Research Desk Stock Broking
Indian indices outperformed other BRIC markets by wide margin
Equity IndicesCMP on
May 16
% return
5Y
% return
1 Y
P/E
current
P/E
High
P/E
Low
P
A
BRIC Indices
India Nifty 7203.00 96.18 17.18 17.58 25 10
Russia Micex 1392.30 38.93 0.02 6.42 20 3
Brazil Bovespa 53975.76 10.14 -1.75 16.81 83 16 3
China Shanghai 2026.50 -23.39 -8.91 9.85 58 10 2
Other Global Indices
USNASDAQ 4069.29 140.90 17.43 34.19 53 13
US - S&P 500 1870.85 109.49 13.35 17.21 29 11
Germany-DAX 30 9644.59 103.78 15.37 18.03 63 9
USDow Jones 16446.81 97.41 7.97 15.40 25 11
Japan - Nikkei 225 14096.59 57.23 -6.67 18.37 49 24
UK - FTSE-100 6843.11 56.81 2.29 20.20 80 9
Singapore(STI) 3262.09 54.21 -5.55 13.79 22 6
S. Korea - Kospi 2013.44 45.57 0.69 24.08 38 7
France - CAC40 4438.52 40.83 11.71 25.36 37 9
Hong Kong - HangSeng 22718.07 37.42 -2.14 10.58 23 8
ndian economy is structurally better than Brazilian and Russian markets and better in terms of transparency when compar
Chinese markets. This has been amply reflected in terms of last 5 year Nifty returns even in the back drop of macro problem
policy logjam. In the next five years Nifty is expected to give returns which are superior to what has been achieved in the
years because of the expected improvement in macro parameters like fiscal deficit, inflation and gross capital formation
Modis leadership.
RxMODI for Macro problems: Indias GDP growth slowdown was not driven by global factors rather its duedomestic problems like policy paralysis and corruption. Markets are expecting Modi to implement aggressive growth
policies to achieve GDP growth levels of over 8% in the next 3-4 years.
-2.00
0.00
2.00
4.00
6.00
8.00
10.00
12.00
Mar-09
May-09
Jul-09
Sep-09
Nov-09
Jan-10
Mar-10
May-10
Jul-10
Sep-10
Nov-10
Jan-11
Mar-11
May-11
Jul-11
Sep-11
Nov-11
Jan-12
Mar-12
May-12
Jul-12
Sep-12
Nov-12
Jan-13
Mar-13
May-13
Jul-13
Sep-13
Nov-13
Jan-14
M
US EU Japan China India
GDP growth %
-
8/12/2019 MODIfied India Investment Strategy - 19052014
4/17
For more Market Updates & Stock Research, visit www.karvyonline.com Page 4/17
Research Desk Stock Broking
`
dia GDP growth has slowed down significantly in the last 3 years from the highs of 9% recorded during the quarter ended
010 to the low of 4.7% for the quarter ending Dec 2013. The growth rate in China also moderated towards 7.5% towards the
f 2013 from around 10% recorded during the quarter ended Jun 2010. Developed economies like the US, EU and Japan w
ad seen a decline in the GDP for a brief period were able to return to the growth path by the end of Mar 2014, with an exce
at the US had slowed down temporarily due to extreme weather conditions. However, India was not able to accelerate
conomic growth during the period; this on the back of very high consumer inflation levels and higher interest rates had taken
n domestic consumption & savings as well as corporate capex plans. Apart from this, policy logjam at the central government
etrospective regulation by various government agencies had led to slowdown in economic growth. Markets are expecting Modmplement aggressive growth policies and could return back to GDP growth levels of over 9% in the next 3-4 years.
nflation Trends: In f la t ion in Ind ia is higher than in m ajor economies and CPI not showing any signs of easing below
%. Modi could focu s on addressing the distr ibut ion bott lenecks and ho arders to br ing do wn the food inf lat ion.
nterest rates: RBI was under pressur e to maintain higher interest rates amid high CPI inflat ion, but i t cou ld cons ide
educing the interest rates on any f i rm signs of easing in inf la t ion.
-2.00
0.00
2.00
4.00
6.00
8.00
10.00
12.00
US EU Japan China IndiaWPI IndiaCPI
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
10.00
US Germany Japan China India
Inflation trend in the last 2 years
10 Year G-Sec Yields
-
8/12/2019 MODIfied India Investment Strategy - 19052014
5/17
For more Market Updates & Stock Research, visit www.karvyonline.com Page 5/17
Research Desk Stock Broking
MODIfiedIndia Investment Strategy:
erall, lower GDP growth and elevated CPI inflation for a prolonged period resulted in negative real growth for Aam Aadmi wh
n dumped the UPA and given a clear mandate for Modi, who has proven track record of maintaining growth rate in Gujarat
ove the national average. Majority of the market participants sensed a change in trend towards Modi which led to a strong
ction rally even though very few would have imagined a victory of this magnitude.
st the election results, even after a sharp pre-election rally Nifty is trading at a PE multiple of 17, which is near the midpoin
e PE band of 10-25 in which it was trading for the last 10 years. Given the underperformance of the China, Russia and Braziarkets in the last few years and with the uncertainty over Chinas sustained high economic growth, geo-political tension in
ssia-Ukraine and commodity dependent Brazilian economy, India is well positioned with a strong leadership which is commi
deliver economic growth. Global factors like sustained economic growth in the US, EU and Japan, expected recovery in
inese economy, stable energy prices could boost positive sentiments for the Indian equity markets. The favorable scenario co
sult in India commanding a higher PE multiple over other emerging markets, even though actual earnings growth could com
er 12-18 months.
e expect the Nifty to scale towards 9000 in the next 12-18 months based on the projected EPS of Rs.560 and give
nservative multiple of 16 for CY15. In a more optimistic scenario Nifty could even cross 10000 during the period.
ose investors who had very marginal exposure to equities, this could be the appropriate time to think towards invest
ore in equities. At this juncture one may feel that markets had run-up too fast and too sharp, but it is the price one
pay for certainty and quality. We suggest investing in good quality frontline stocks in a phased manner with a long t
rspective.
isk-on: Valuation Gap between Large Caps and Mid Caps to narrow
ose investors who had good exposure in equities, this could be the right time to think towards rebalancing th
ldings. We suggest to those who are willing to take more risk to consider investing in good quality mid-cap stocks
expect a risk-on trade to continue and valuation gap between the large-cap and mid-cap to narrow in the next
arters.
a bull market scenario the trailing twelve month PE multiple of mid cap companies were trading at an average discount of 1
en compared to the PE multiple of large cap companies giving a large valuation gap. Currently the valuation gap between la
p and mid cap companies is around 26% and we expect this to narrow down as the market starts factoring in new Governme
iatives for economic revival.
40%
30%
20%
10%
0%
10%
20%
30%
40%
50%
60%
r-
Jl-
-
r-
Jl-
-
r-
Jl-
-
r-
Jl-
-
r-
Jl-
-
r-
Jl-
-
r-
Jl-
-
r-
Jl-
-
r-
Jl-
-
-
Jl-
-
r-
Valuation Gap b/w Nifty & Nifty Midcap 50
-
8/12/2019 MODIfied India Investment Strategy - 19052014
6/17
For more Market Updates & Stock Research, visit www.karvyonline.com Page 6/17
Research Desk Stock Broking
e recommend investing in good quality mid-cap stocks from a 9-12 months perspective, as we expect mid-caps to outperfor
eir large-cap peers during the period. We advise to diversify the holdings with stocks from different sectors.
Mid-cap investment ideas:
NSE Symbol Sector FV(Rs)
CMP(Rs)
P/E(x)
P/B(x)
Mkt.Cap(Rs.Crs)
Target*(Rs)
Upside(%)
APOLLOTYRE Auto-Ancl 1 172.80 8.67 1.90 8710 216 25
BEL Defence 10 1415.90 12.44 1.75 11327 1875 32
EIDPARRY Agri 1 169.15 14.21 1.22 2973 230 36
GPPL Infra-Ports 10 114.60 28.87 3.95 5540 140 22
KAJARIACER Ceramics 2 519.25 31.07 7.41 3925 625 20
KRBL Agri 1 59.05 5.45 1.33 1390 78 32
SADBHAV Infra 1 160.50 34.40 2.00 2436 210 31
SUPREMEIND Plastics 2 454.50 19.90 6.57 5773 565 24
WABAG Infra-Water 2 920.25 27.00 3.41 2447 1125 22
YESBANK Banking 10 545.55 12.19 2.77 19680 683 25
Targets are for base case scenario and can be revised upwards by around 10-15% in case of any positive re-rating for the broader Indian markets
Key Growth Drivers and Concerns
Stock Key Growth Drivers Key Concerns
APOLLOTYRE Rise in demand from OEM and decline in rubber prices Volatility in rubber prices, Currency volatility
BEL Govts thrust on defence manufacturing in India Delay in order book execution
EIDPARRY Undervaluation of the stock price, uptrend in sugar cycle El-nino could affect the Fertilizer segment
GPPLRobust foreign trade, operational efficiency and strongbrand
Any slowdown in global economic recovery,competition from other regional ports
KAJARIACER Strong domestic consumption, market leadershipAny delay in domestic economic recovery,competition from unorganized players
KRBL Market leadership, strong brand recall El-nino, trade barriers, Currency volatility
SADBHAV Governments thrust on infrastructureStiff competition for projects, high interest ratefor a prolonged period
SUPREMEINDDomestic consumption, high margin product line-up, newcapacity coming on stream
Delay in domestic economic recovery, El-Nincould affect demand from agriculture
WABAGGovernments thrust on infrastructure, traction ininternational operations, specialist in water solutions
Delay in economic recovery
YESBANK Thrust on retail business, strong economic recoveryHigher interest rates for a prolonged period,ownership tussle
ata as on: May 16, 2014
ata source: Company, Karvy Research, Bloomberg
MID-CAP INVESTMENT IDEAS
-
8/12/2019 MODIfied India Investment Strategy - 19052014
7/17
For more Market Updates & Stock Research, visit www.karvyonline.com Page 7/17
Research Desk Stock Broking
Stock Snapshot
NSE symbol APOLLOTYRE
Current price (Rs) 172.80
52 week H/L (Rs) 184.85/54.60
Face value (Rs) 1.00
EPS (Rs) 19.94
P/E (x) 8.67
ndustry P/E (x) 9.00
P/BV (X) 1.90
Div yield (%) 0.29
Eq Shares (Cr) 50.41
Market Cap (Rs.Cr.) 8710
Price Relative to Nifty
Key Financials (Rs cr)
Cons. Annual 2012 2013 2014
Sales 12153.29 12794.63 13310.33
% Change 37.05 5.28 4.03
EBITDA 1176.85 1456.66 1875.51
nterest Expense 279.02 305.58 283.79
Net Profit 409.90 612.61 1005.06
% Change -6.88 49.45 64.06
Diluted EPS (Rs) 8.13 12.15 19.91
EBIDTA% 9.68 11.38 14.09
Total Assets 8390.88 8526.56 9045.58
Net Worth 2832.77 3400.86 4574.62
Net Debt 2811.23 2340.50 334.80
FCF per share (Rs.) -6.20 6.83 -
EV/EBITDA (X) 5.80 4.49 4.47
ROE% 15.63 19.65 25.20
ROC% 11.57 13.98 21.27
ROA% 5.22 7.24 11.44
LT Debt / Equity (%) 57.02 48.61 15.60
Dividend/Share(Rs) 0.50 0.50 0.50
0
100
200
300
Nifty APTY
Company Overview
Apollo Tyres manufactures automotive tyres for passenger vehic
commercial vehicles and also for off-highway vehicles. It sells
tyres under the brands Apollo, Vredestein, Kaizen, Maloya a
Regal. It has eight manufacturing plants spread across th
continents India, Africa and Europe, while the company exports
products to over 100 countries. The company offers its products
trucks & buses (contributes for 48% of revenue), passenger vehic
(contributes for 33% of revenue), light truck (contributes for 9%
revenue), off-highway (contributes for 9% of revenue), while fa
vehicles and bicycles contributes for 1% of revenue. The compa
caters to both the replacement market 76% and Original Equipm
Manufacturers (OEM) which contributes for 24% of total revenue
has grown organically as well as through acquisitions and h
transformed itself from a regional player when it was incorporated
the year 1972 to a global tyre manufacturer. The company genera
65% of its revenues from India, 23% from Europe and 12% frSouth Africa.
Performance highlights
Net profit has increased by 64% to Rs.1005.05 cr for FY14
compared to Rs.612.60 cr for FY13 on a consolidation basis.
Consolidated net sales had increased by 4% to Rs.13310
during FY14, from Rs. 12795 Cr for FY13.
EBITDA margin has increased by 270 basis points to 14.0
during FY14 from 11.38% for FY13.
The companysnet debt has declined substantially to Rs.335
as on Mar 31, 2014 from Rs.2340 cr as on Mar 31, 2013.
Outlook & Valuations
Apollo Tyres is likely to benefit from the surge in demand for ty
(OEM & Replacement) in India amid expectations of higher econo
growth during Modi Government. The company is expected to g
in the European markets as the Euro Zone has come out of
recession. Apollo Tyres is likely to benefit from the decline in nat
rubber prices in the global markets, as it constitutes for major port
of the cost of production, which was reflected in expansion
EBITDA margins. Apollo Tyres has called-off the acquisition
Cooper Tyre in the US, thus clearing the uncertainty over leverage issues and now focusing on organic growth. We expect
company to deliver a healthy growth driven by increased veh
demand both in India and abroad.
At CMP of Rs 172.80, the stock is trading at a valuation of 8.68x T
earnings per share. We recommend a BUY with a target price of
216, representing 9x FY15E earnings per share.
APOLLO TYRES Target Price : Rs.216
-
8/12/2019 MODIfied India Investment Strategy - 19052014
8/17
For more Market Updates & Stock Research, visit www.karvyonline.com Page 8/17
Research Desk Stock Broking
BHARAT ELECTRONICS LTD Target Price : Rs.1875
Stock Snapshot
NSE symbol BEL
Current price (Rs) 1415.90
52 week H/L (Rs) 1597.50/893.00
Face value (Rs) 10.00
EPS (Rs) 113.85
P/E (x) 12.44
Industry P/E (x) 13.00
P/BV (X) 1.75
Div yield (%) 1.57
Eq Shares (Cr) 8.00
Market Cap (Rs.Cr.) 11327
Price Relative to Nifty
Key Financials (Rs cr)
Cons. Annual 2011 2012 2013
Sales 5626.60 5792.04 6151.14
% Change 4.89 2.94 6.20
EBITDA 1013.72 635.68 658.40
Interest Expense 0.47 0.38 0.59
Net Profit 877.84 846.75 910.78
% Change 19.06 -3.54 7.56
Diluted EPS (Rs) 109.73 105.84 113.85
EBIDTA% 18.02 10.98 10.70
Total Assets 13328.54 15040.54 14850.96
Net Worth 5132.57 5785.50 6487.49
Net Debt -6535.53 -6818.82 -5329.42
FCF per share (Rs.) 391.02 64.46 -171.01EV/EBITDA (X) 6.84 8.47 5.95
ROE% 18.31 15.51 14.84
ROC% 18.31 15.52 14.85
ROA% 7.70 5.97 6.09
LT Debt / Equity (%) 0.01 0.01 0.00
Dividend/Share(Rs) 21.60 20.80 22.30
80
90
100
110
120
Nifty BEL
Company Overview
Bharat Electronics Ltd (BEL) is a Navaratna central public sec
enterprise engaged in the manufacturing of advanced electro
products for the Indian Armed Forces. It manufactures electrocommunication equipment, night vision equipment such as ima
converter tubes, night vision binoculars, periscopes, gunsights a
tank electronics. It also manufactures electronic voting machin
products for e-governance, homeland security, civilian rada
solar products, electronic components as well as telec
broadcast systems. BEL generates 33% of its revenue from Ra
& Fire control systems, 15% from Weapon Systems, 15% fr
Communication, 8% from Electronic warfare & Avionics and
from Electro Optics. BEL is also one among the 8 PSUs under
Ministry of Defence. BEL is the lead integrator of Akash,
Indian-made guided missile air defence weapon system. BEL h
a subsidiary BEL Optronic Devices Ltd (with 92.79% equity shaand has JVs with BEL Multitone Pvt Ltd (49% share) and GE
Pvt. Ltd (26% share).
Performance highlights
BELs revenue has increased by 6.20% to Rs.6151.14 CFY13 as against Rs.5792.04 Cr in FY12; PAT hincreased by 7.56% to Rs.911.19 Cr in FY13 from 846.75 Cr in FY12. EPS has increased to Rs.113.85FY13 from Rs.105.84 in FY12.
During 9M FY4, Revenue has declined by 6% to Rs.30and EBITDA has increased sharply by 185% to Rs.123
cr, while PAT was at Rs.268 cr which has decreased 9.67%, when compared with the corresponding periodFY13.
BEL is a debt free and has cash and equivalents of over 5300 cr as on March 31, 2013.
Outlook & Valuations
BEL is likely to benefit from the Modi governments thrust
strengthening the armed forces and supporting the Indian defen
equipment manufacturers. The companys current order book
Rs. 24,502 Cr which is over 4x annual revenues gives grow
visibility while major orders are expected for Ship borne Electro
Warfare System, Hand held thermal imager, Weapon locatradar and Gun upgrade program. Further, BEL has received
Foreign Direct Investment (FDI) approval for forming a JV with M
Thales, France which could benefit the company in the long term
At CMP of Rs 1415.90, the stock is trading at a valuation of 12
TTM earnings per share. We recommend a BUY with a tar
price of Rs. 1875, representing 15x FY15E earnings per share.
-
8/12/2019 MODIfied India Investment Strategy - 19052014
9/17
For more Market Updates & Stock Research, visit www.karvyonline.com Page 9/17
Research Desk Stock Broking
EID PARRY Target Price : Rs.230
Stock Snapshot
NSE symbol EIDPARRY
Current price (Rs) 169.15
52 week H/L (Rs) 178.00/103.00
Face value (Rs) 1.00
EPS (Rs) 11.91
P/E (x) 14.21
Industry P/E (x) 12.00
P/BV (X) 1.22
Div yield (%) 3.55
Eq Shares (Cr) 17.58
Market Cap (Rs.Cr.) 2973
Price Relative to Nifty
Key Financials (Rs cr)
Cons. Annual 2011 2012 2013
Sales 9249.39 12491.69 11382.90
% Change 132.01 35.05 -8.88
EBITDA 1063.69 1358.34 1245.80
Interest Expense 183.27 230.09 306.82
Net Profit 312.28 312.70 206.94
% Change -20.72 0.13 -33.82
Diluted EPS (Rs) 17.96 18.00 11.91
EBIDTA% 11.50 10.87 10.94
Total Assets 8577.15 11103.25 12439.20
Net Worth 2241.54 2423.85 2432.82
Net Debt 2012.88 3563.21 4780.15
FCF per share (Rs.) -3.65 -15.60 1.75
EV/EBITDA (X) 6.06 5.73 6.69
ROE% 15.35 13.41 8.52
ROC% 11.66 9.72 7.01
ROA% 4.00 3.18 1.76
LT Debt / Equity (%) 30.24 41.66 59.94
Dividend/Share(Rs) 2.00 4.00 6.00
60
70
80
90
100
110
120
Nifty EID
Company Overview
EID Parry (India) Limited (EID) is the flagship company of t
Murugappa group. EID is a leading producer of sugar, ethanol, c
gen power and fertilizers (through its 62% subsidiary
Coromandel International). It also operates in bio-pesticides a
neutraceuticals segments. Its sugar division operates 9 sugar m
with a total capacity of 34750 TCD in three states (AP-5000TC
TN-19000TCD, KTK-10750TCD). Its co-gen power division has
capacity of 146 MW (AP-16MW, TN-84.5MW, KTK-45.5MW) a
its distillery division has a capacity of 230 KLPD (AP-45KLPD, T
135KLPD, KTK-50KLPD). EID also has a 2000 TPD sugar refine
in Kakinada. Its subsidiary Coromandel International is a leadi
player in the DAP & NPK complex fertilizer segment as well
agro-chemicals. EID is the preferred vendor for leading playe
across food, bakery, beverage and pharmaceuticals industrie
EID sells its sugar in the retail market under the brand Parry
EIDs standalone revenue contribution as follows - Sugar 72
Distillery 14%, Bio-products 10% and the rest from co-gen powe
Performance highlights
During FY14, consolidated revenue grew by 5.7% to R12031 cr, while Net profit has declined by 62% to Rs. 77.cr.
During FY14, standalone revenue declined by 11.30% to R1767.42 cr, while Net profit has declined by 92% to Rs. 26.cr.
During Q4FY14, revenue has decreased by 14.63% to R541.83 cr, while it has reported a net profit of Rs 85.39
indicating improvement in the standalone sugar busineduring the quarter.
Outlook & Valuations
EIDs Sugar segment is likely to perform well in FY15, if either
these factors materializes - A) Linking of sugarcane prices with t
prices of sugar and other bi-products. B) Better price discovery f
ethanol and increase in mandatory blending of ethanol in petrol
Recovery in the sugar prices in the international markets. While
distillery, co-gen power and bio products segments are expect
to do well. The sugar refinery at Kakinada is expected
commence production in the next few months and contribute EBIT profits. While, its major subsidiary Coromandel is expect
contribute for significant growth at a consolidated level in the lo
term.
At CMP of Rs 169.15, the stock is trading at a discount to
investment value per share of Rs.265, besides the standalo
business. We recommend a BUY with a target price of Rs. 230.
-
8/12/2019 MODIfied India Investment Strategy - 19052014
10/17
For more Market Updates & Stock Research, visit www.karvyonline.com Page 10/17
Research Desk Stock Broking
GUJARAT PIPAPAV PORT LTD Target Price : Rs.140
Stock Snapshot
NSE symbol GPPL
Current price (Rs) 114.60
52 week H/L (Rs) 120.90/42.05
Face value (Rs) 10.00
EPS (Rs) 3.97
P/E (x) 28.87
Industry P/E (x) 24.00
P/BV (X) 3.95
Div yield (%) 1.21
Eq Shares (Cr) 48.34
Market Cap (Rs.Cr.) 5540
Price Relative to Nifty
Key Financials (Rs cr)
Cons. Annual 2011 2012 2013
Sales 395.89 416.03 473.65
% Change 39.43 5.09 13.85
EBITDA 185.75 187.84 257.34
Interest Expense 83.61 67.31 36.96
Net Profit 57.10 73.96 191.77
% Change -204.35 29.53 159.28
Diluted EPS (Rs) 1.35 1.64 3.97
EBIDTA% 46.92 45.15 54.33
Total Assets 1584.22 1663.42 1866.63
Net Worth 792.97 1211.74 1403.51
Net Debt 606.31 269.95 101.57
FCF per share (Rs.) -1.75 0.64 3.50
EV/EBITDA (X) 15.44 14.19 12.27
ROE% 7.47 7.38 14.67
ROC% 9.37 9.41 14.12
ROA% 3.52 4.55 10.86
LT Debt / Equity (%) 84.59 25.08 20.09
Dividend/Share(Rs) 0.00 0.00 0.00
0
100
200
300
Nifty GPPL
Company Overview
Gujarat Pipapav Port Ltd (GPPL) is an all weather port manag
and operated by APM Terminals which is one of the largest po
and terminals operators in the world. APM Terminals is the lepromoter of the company with 43.01% of the equity holdi
GPPL is located in Gujarat and has a capacity to han
container cargo (0.85 mln TEU per annum), bulk (5 mln TPA) a
liquid cargo (2 mln TPA). It also has a berth for handling LP
The port has emerged as one of the principal gateways on t
West Coast of India which provides access to shipping lin
through international routes as well as for the cargo belt in No
and North-west region of India. GPPL holds 38.8% stake
Pipavav Railway Corporation that connects Pipavav to the IC
network. GPPL has the capacity to handle double stack h
cube container trains that reduce the transit time. GPPL has ov
1500 acres of land for development of port related infrastructur
Performance highlights
During FY13, consolidated revenue grew by 13.85% to 473.65 crore and EBITDA has increased by 37% Rs.257.34 cr, while Net profit has risen sharply by 159%Rs. 191.77 crore. EBITDA margin has increased to 54.3for FY13 from 45.15 during FY12.
During Q1FY14, consolidated revenue grew by 26.28%Rs. 473.65 crore and EBITDA has increased by 60%Rs.91.55 cr, while Net profit has risen sharply by 72% to R61.02 crore. EBITDA margin has increased to 63.54%
Outlook & Valuations
GPPL is likely to benefit from the potential growth in the tra
amid expectations that Modi government would fast track
economic growth. Container Trade is expected to grow by 4%-
in 2014 and 2015. GPPL is fully geared up for handling the larg
vessels and also the company is expanding the container ca
handling capacity to 1.35 Mln TEU from the current 0.85 mill
TEU with a cost of Rs.460 cr scheduled to be completed in t
next 2 years. GPPL has underlying strengths in the form of stro
brand APM Terminals, connectivity to cargo areas like
northern and north western India as well as shipping lin
connecting the Asia to Middle East and Europe. GPPoperational efficiency, its capability to handle the double sta
container trains would result in increased business volume
well as higher operating margins.
At CMP of Rs 114.60, the stock is trading at a valuation of 2
FY13 earnings per share. We recommend a BUY with a tar
price of Rs. 140, representing 28x FY14E earnings per share.
-
8/12/2019 MODIfied India Investment Strategy - 19052014
11/17
For more Market Updates & Stock Research, visit www.karvyonline.com Page 11/17
Research Desk Stock Broking
KAJARIA CERAMICS Target Price : Rs 625
Stock Snapshot
NSE symbol KAJARIACER
Current price (Rs) 519.25
52 week H/L (Rs) 521.00/199.00
Face value (Rs) 2.00
EPS (Rs) 16.71
P/E (x) 31.07
Industry P/E (x) 24.00
P/BV (X) 7.41
Div yield (%) 0.58
Eq Shares (Cr) 7.56
Market Cap (Rs.Cr.) 3925
Price Relative to Nifty
Key Financials (Rs cr)
Cons. Annual 2012 2013 2014
Sales 1313.03 1611.98 1838.75
% Change 37.74 22.77 14.07
EBITDA 208.10 246.67 280.71
Interest Expense 48.51 40.67 40.82
Net Profit 80.88 104.51 124.22
% Change 33.42 29.21 18.86
Diluted EPS (Rs) 10.99 14.20 16.68
EBIDTA% 15.85 15.30 15.27
Total Assets 890.95 1047.55 1175.61
Net Worth 282.07 360.88 529.52
Net Debt 271.98 316.61 187.70
FCF per share (Rs.) 2.21 -7.94 -
EV/EBITDA (X) 7.36 7.03 10.22
ROE% 32.06 32.51 27.90
ROC% 22.77 21.26 21.49
ROA% 9.51 10.78 11.18
LT Debt / Equity (%) 31.69 22.98 14.92
Dividend/Share(Rs) 2.50 3.00 -
100
150
200
250
300
Nifty KJC
Company Overview
Kajaria Ceramics is the largest manufacturer of ceramic/vitrif
tiles in India. It has an annual aggregate capacity of 46.60 mn.
meters, distributed across seven plants-Sikandrabad in UPradesh, Gailpur in Rajasthan, four plants in Morbi in Gujarat a
one at Vijayawada in Andhra Pradesh. The company is planning
increase the capacity to 64.6 mn. Sq. Meters by FY16. T
company is market leader among the organized players in the
industry; the market share of the company is at 21% followed
H&R Johnson (19%), Asian Granito (10%) and Somany Ceram
(9%). The unorganized players share in tiles industry has go
down considerably in the last few years; however, still 60% of
domestic production comes from unorganized players from Morb
Gujarat.
Performance highlights
Kajaria Ceramics has seen a CAGR (FY11-FY14) growth
25% in revenue to Rs. 1838.75 cr and 27% growth in
profits to Rs.124.22 cr. The company has seen doubling of
revenue in the last three years.
The company was able to maintain its EBITDA marg
steadily at over 15% with better mix of product and pricing.
The net debt of the company has reduced in the last th
year despite the capital expenditure.
Outlook & Valuations
Kajaria Ceramics is well positioned in the ceramic tile industry
benefit from the expected robust growth in the domestic market
the next few years. We expect the company is likely to see
volumes growth of 18-20% as against the industry grow
expectation pegged at 13-15% in the next couple of years. T
commencement of increased capacity in the next two years bo
well for the company. The company is also likely to benefit from t
lower production from unorganized players whose market share
expected to fall below 50%. The replacement demand in Teir-2 a
Teir-3 cities will fuel the growth of the company further. Being t
industry leader and with the strong earnings momentum, the sto
continues to get premium valuations.
At CMP of Rs 519, the stock is trading at a valuation of 31x T
earnings per share. We recommend a BUY with a target price
Rs. 625, representing 25x FY16E earnings per share.
-
8/12/2019 MODIfied India Investment Strategy - 19052014
12/17
For more Market Updates & Stock Research, visit www.karvyonline.com Page 12/17
Research Desk Stock Broking
KRBL Target Price : Rs.78
Stock Snapshot
NSE symbol KRBL
Current price (Rs) 59.05
52 week H/L (Rs) 67.80/19.30/
Face value (Rs) 1.00
EPS (Rs) 10.84
P/E (x) 5.45
Industry P/E (x) 8.00
P/BV (X) 1.33
Div yield (%) 1.35
Eq Shares (Cr) 23.58
Market Cap (Rs.Cr.) 1390
Price Relative to Nifty
Key Financials (Rs cr)
Cons. Annual 2012 2013 2014
Sales 1631.00 2080.39 2910.46
% Change 5.59 27.55 39.90
EBITDA 230.31 296.01 440.55
Interest Expense 70.50 75.38 76.02
Net Profit 73.03 129.86 255.11
% Change -39.31 77.81 96.45
Diluted EPS (Rs) 3.00 5.37 10.84
EBIDTA% 14.12 14.23 15.14
Total Assets 2008.56 2010.02 2714.72
Net Worth 717.16 829.47 1043.98
Net Debt 914.97 851.18 1243.06
FCF per share (Rs.) 0.35 1.62 -
EV/EBITDA (X) 5.81 4.66 5.49
ROE% 10.71 16.79 27.23
ROC% 8.09 10.90 15.49
ROA% 3.76 6.46 10.80
LT Debt / Equity (%) 14.82 9.33 19.56
Dividend/Share(Rs) 0.30 0.80 -
70.00
140.00
210.00
280.00
Nifty KRBL
Company Overview
KRBL Ltd, (KRBL), a leading player in production and expo
Basmati Rice with global delivery footprints. KRBL is a
integrated company involved in seed development multiplication, contact farming, procurement & storage of pa
production & marketing of basmati rice. The company o
basmati rice brands like India Gate, Doon, NurJahan, Indian Fa
Bemisal, Aarati, Tajmahal Tilla and Blue Bird which are well kn
both in Indian and Global rice markets. KRBL has a strong foot
in domestic market with 30% market share and enjoys 25% sh
in branded basmati exports from India. The Company has v
distribution network with presence at 6,40,000 retail outlets spr
across India. It has collaborations with global retail chains
distribution of its products and with Buhler AG for techno
support and processing machinery.
Performance highlights
The company recorded highest ever Top-line of
2910.46 Crs in FY 14 as against Rs.2080.39 Crs in FY
up by 39.90% (y-o-y).
EBIDTA is up by 47% to Rs.460 crs in FY 14 as aga
Rs. 312 crs in FY13. EBIDTA margin is at 15.8% up by
bps on y-o-y basis.
The net profit increased by 96.45% (y-o-y) to 255.11 c
FY 14 as against Rs.129.86 crs in FY 13 and EPS in
14 has gone up by 101.86% to Rs.10.84 as aga
Rs.5.37 per share in FY 13.
Outlook & Valuations
Demand of Basmati Rice in India has grown up significantly on
back of change in income levels and consumer choices.
companys differentiated pricing strategy of targeting custom
across segments with products at varying price points from R
per kg to Rs.150 per kg will enable the company to win hig
market share. The company has also forayed into power busin
with total 61.85 MW power capacities. (Biomass -15.8 MW, S
2.5 MW and Wind 43.55 MW). It also generates value-added
products like bran oil, de-oiled cakes and uses rice huskscaptive power plant.
At CMP of Rs 59.05, the stock is trading at a valuation of 5.5x T
earnings per share. We recommend a BUY with a target pric
Rs. 78, representing 5x FY15E earnings per share.
-
8/12/2019 MODIfied India Investment Strategy - 19052014
13/17
For more Market Updates & Stock Research, visit www.karvyonline.com Page 13/17
Research Desk Stock Broking
SADHBHAV ENGINEERING Target Price : Rs. 210
Stock Snapshot
NSE symbol SADHBHAV
Current price (Rs) 160.50
52 week H/L (Rs) 170.50/51.25
Face value (Rs) 1.00
EPS (Rs) 5.40
P/E (x) 29.77
Industry P/E (x) 34.40
P/BV (X) 2.00
Div yield (%) 0.37
Eq Shares (Cr) 15.09
Market Cap (Rs.Cr.) 2436
Price Relative to Nifty
Key Financials (Rs cr)
Cons. Annual 2011 2012 2013
Sales 2329.65 2866.33 2158.27
% Change 74.59 23.04 -24.70
EBITDA 338.59 416.48 396.31
Interest Expense 128.92 140.53 284.62
Net Profit 92.78 122.29 7.48
% Change 155.76 31.80 -93.88
Diluted EPS (Rs) 6.53 8.08 0.49
EBIDTA% 14.53 14.53 18.36
Total Assets 3695.43 5573.08 6646.13
Net Worth 872.24 1173.29 1210.19
Net Debt 1864.83 3292.07 4482.59
FCF per share (Rs.) -58.14 -111.62 -76.32
EV/EBITDA (X) 11.58 13.93 16.26
ROE% 15.13 11.96 0.63
ROC% 5.96 5.05 -12.22
ROA% 3.07 2.64 0.12
LT Debt / Equity (%) 160.42 230.90 296.82
Dividend/Share(Rs) 0.60 0.60 0.60
0
100
200
Nifty SADBHAV
Company Overview
Sadbhav Engineering Limited is engaged in infrastructure busin
like construction of roads, irrigation and mining. The core busin
activities of the company includes strengthening, widenrehabilitating and upgrading of roads and highways, constructing
modelling and improvement of canals, constructing syphon
earthen dams and excavating and mining minerals. Most of the r
projects done by the company are on build operate transfer (B
basis. The road projects include improvement and winding to
lane of two lane Sardar Patel Ring Road around Ahmedabad city
Build, operate and transfer (BOT) basic. Its irrigation project inclu
Majalgaon Right Canal, improvement of Shedhi Branch Canal
construction of Narmada main Canal. Its mining project inclu
Rock Excavation at Hindustan Copper Ltd, Malajkhand Project.
Performance highlights
Top line increased by 41% to Rs.1,559 cr during Apr13-Dec
Revenues from the construction segment increased by 33%
Rs.1,555 cr and revenue from power segment declined by 1
to Rs.4.51 cr for the same period.
EBITDA margin (excluding extra-ordinary items) expanded
150 bps to 11.5%. While interest expenses increased by 3
to Rs.76.6 cr and depreciation cost increased by 42% to R
cr during Apr13-Dec13.
Net profit (excluding extra-ordinary items) increased to
50.28 cr from Rs.1.6 cr and ended the Apr13-Dec13 pe
with an EPS of Rs.3.3.
Outlook & Valuations
Sadbhav currently has nine BOT projects in its portfolio out of w
three are operational and six are under construction. The comp
has completed the financial closure for all its projects in its portfo
The financial closure of its projects allows the company to s
execution as well as facilitates the company to bid for fur
projects. The Debt-to-Equity ratio is expected to improve furthe
the company has taken up a mix of activity in rebalancing of bala
sheet items. The pickup in economic activity and infrastruc
projects awards shall bode well for the leading infrastrucdeveloper. Sadbhav has a robust order book of 7800 cr wit
visibility of next 3 years. There is a visible pick-up in execution in
road projects.
At CMP of Rs 160.50, the stock is trading at a valuation of 29
TTM earnings per share. We recommend a BUY with a target p
of Rs. 210, representing 28x FY15E earnings per share.
-
8/12/2019 MODIfied India Investment Strategy - 19052014
14/17
For more Market Updates & Stock Research, visit www.karvyonline.com Page 14/17
Research Desk Stock Broking
SUPREME INDUSTRIES Target Price : Rs.565
Stock Snapshot
NSE symbol SUPREMEIND
Current price (Rs) 454.50
52 week H/L (Rs) 509.00/290.20
Face value (Rs) 2.00
EPS (Rs) 22.84
P/E (x) 19.90
Industry P/E (x) 20.00
P/BV (X) 6.57
Div yield (%) 1.65
Eq Shares (Cr) 12.70
Market Cap (Rs.Cr.) 5773
Price Relative to Nifty
Key Financials (Rs cr)
Cons. Annual 2011 2012 2013
Sales 2469.46 2927.90 3403.99
% Change 23.04 18.56 16.26
EBITDA 358.77 473.32 537.00
Interest Expense 40.33 55.18 52.45
Net Profit 195.84 241.68 290.10
% Change 25.55 23.41 20.03
Diluted EPS (Rs) 15.42 19.03 22.84
EBIDTA% 14.53 16.17 15.78
Total Assets 1525.46 1532.08 2032.36
Net Worth 547.71 696.73 878.98
Net Debt 502.24 338.98 448.68
FCF per share (Rs.) -6.46 17.65 -1.42
EV/EBITDA (X) 7.81 6.70 8.81
ROE% 40.72 38.84 36.82
ROC% 24.00 26.43 27.19
ROA% 14.44 15.81 16.28
LT Debt / Equity (%) 37.95 15.05 26.37
Dividend/Share(Rs) 4.30 6.00 7.50
0
100
200
Nifty SI
Company Overview
Supreme Industries Ltd. is a plastic products manufactur
company with annual polymer handling capacity of close to 3 la
tonnes. The July12-June13 revenue composition is largely frplastic piping systems(51%), packaging products(21%), indust
products(19%) and consumer products (9%) with technology
up and some exclusive production-cum-marketing rights fr
Rasmussen Polymer Development-Switzerland for Cro
laminated films, Sapac Packaging Solution-Belgium for Inst
packaging solution, Foam Partner-Switzerland for Reticulated
foam, Sanwa Kako-Japan for 2 stage foam, PE Tech-Korea
Cross linked foam, Wavin Overseas-Holland for Plastic pip
system, Industrie Polieco MPB SRL-Italy for Sewerage syste
Kumi Kasai Co. Ltd-Japan for Automotive components and N
Corporation-Japan for Composite pipes. The company has
distribution network (over 20,000 retailers) and is exploring Retailing options.
Performance highlights
During Jul13-Mar14 sales has grown by 14% to Rs.2,685
Revenues growth of 12.6% was achieved by plast
business and construction revenue of Rs.38.5 cr by way
sale of commercial space in Supreme Chambers dur
quarter ending Dec13 was recorded.
Operating expenses has increased to 21% to Rs.2,514
mainly on account of raw material expenses and limit
EBIDTA grown to 10% at Rs.376 cr during Jul13-Mar14. During Jul13-Mar14 PAT stood at Rs.164 cr and EPS
Rs.12.94.
Outlook & Valuations
Malanpur capacity for plastic piping products, Hosur capacity
packaging products and Halol capacity for composite produ
coming into production with expected near-normal rainfall
boost demand for piping products, improved supply ch
predictability in packaging products and visibility in indust
products demand from auto makers has improved. New h
margin and niche markets are to open up as product line-up l
composite LPG cylinders, pipes and pallets are definite altern
for traditional products. Commercial space sale will pick up
coming years as the real estate market is expected to revive.
At CMP of Rs 454.50, the stock is trading at a valuation of 19.9
TTM earnings per share. We recommend a BUY with a targ
price of Rs. 565, representing 21x FY15E earnings per share.
-
8/12/2019 MODIfied India Investment Strategy - 19052014
15/17
For more Market Updates & Stock Research, visit www.karvyonline.com Page 15/17
Research Desk Stock Broking
VA TECH WABAG LTD Target Price : Rs.1125
Stock Snapshot
NSE symbol WABAG
Current price (Rs) 920.25
52 week H/L (Rs) 930.00/374Face value (Rs) 2.00
EPS (Rs) 34.08
P/E (x) 27.00
Industry P/E (x) 27.00
P/BV (X) 3.41
Div yield (%) 0.76
Eq Shares (Cr) 2.65
Market Cap (Rs.Cr.) 2447
Price Relative to Nifty
Key Financials (Rs cr)
Cons. Annual 2011 2012 2013
Sales 1241.82 1443.52 1618.85
% Change 1.48 16.24 12.15
EBITDA 121.03 132.08 154.86
Interest Expense 4.16 11.13 7.26
Net Profit 52.57 73.75 90.34
% Change 17.46 40.29 22.49
Diluted EPS (Rs) 8.47 27.85 33.71
EBIDTA% 9.75 9.15 9.57
Total Assets 1403.01 1774.04 1890.60
Net Worth 570.96 642.02 715.39
Net Debt -284.82 -213.34 -204.44
FCF per share (Rs.) 1.61 -42.26 14.72
EV/EBITDA (X) 8.64 7.00 7.26
ROE% 10.81 12.16 13.31
ROC% 10.46 11.79 12.15
ROA% 4.21 4.64 4.93
LT Debt / Equity (%) 0.05 0.06 0.36
Dividend/Share(Rs) 4.00 6.00 7.00
0
100
200
Nifty Wabag
Company Overview
VA Tech Wabag offers water treatment solutions. It is involved
conceptualizing, designing, engineering, procurement, supp
construction and erection of water, wastewater treatment planand their operation & maintenance (O&M). It offers engineerin
procurement & construction (EPC) and O&M solutions for sewa
treatment, processed & drinking water treatment, efflue
treatment, sludge treatment, desalination and reuse for institution
clients like municipal corporations, power, steel and oil & g
companies. VA Tech Wabag subsidiaries operate in south Ea
Asian, Middle East and African countries.
Performance highlights
During Apr13-Dec13 consolidated Net sales has grown
44% to Rs.1,341 cr. The companys international operatio
have gained traction contributing to 65% of revenues and 23
of profit on consolidated basis for the same perio
Traditionally, 40% of the revenues are booked during the Ja
Mar quarter.
Operating expenses has moved up by 39% and leav
EBIDTA at Rs.86 cr which is higher by 32% during Apr1
Dec13 period. EBDITA margin slipped by 60 bps to 6.4%
same period.
Net profit and EPS has grown by 40% to Rs.42.2 cr a
Rs.15.7 per share respectively. While net profit mar
remained almost constant at 3.1% for Apr13-Dec13.
Current order intake of Rs.3,000 cr is above the ini
guidance of Rs.2,600-2,700 cr for FY13 total order back
stands at Rs.6,000 cr.
Outlook & Valuations
India significantly lacks water and waste water infrastructure a
we expect public spending, given the mandate, on EPC and O&
to be significantly higher in coming years. Financial and Technic
collaborations between Sovereign, multilateral and bilate
agencies will be strengthened in achieving Millenniu
Development Goals. VA Tech Wabag being specialist wa
Solution Company is well positioned to capitalise this opportunWe expect the geographical spread and momentum both in ter
of revenue and profits to grow as margins from internation
operations are to improve.
At CMP of Rs 920.25, the stock is trading at a valuation of 2
TTM earnings per share. We recommend a BUY with a target pri
of Rs. 1125, representing 26x FY15E earnings per share.
-
8/12/2019 MODIfied India Investment Strategy - 19052014
16/17
For more Market Updates & Stock Research, visit www.karvyonline.com Page 16/17
Research Desk Stock Broking
YES BANK Target Price : Rs. 683
Stock Snapshot
NSE symbol YESBANK
Current price (Rs) 545.55
52 week H/L (Rs) 599.00/216.10
Face value (Rs) 10.00
EPS (Rs) 44.74
P/E (x) 12.19
Industry P/E (x) 16.50
P/BV (X) 2.77
Div yield (%) 1.47
Eq Shares (Cr) 36.06
Market Cap (Rs.Cr.) 19680
Price Relative to Nifty
Key Financials (Rs cr)
Std. Annual 2012 2013 2014
Net Interest Income 1615.64 2218.79 2716.26
% Growth 29.57 37.33 22.42
Net Revenue 2474.19 3476.73 4437.93
Net Profit 977.00 1300.68 1617.78
Diluted EPS 27.13 35.55 44.35
Net Loans 37900.52 46937.86 55467.28
Total Assets 73625.68 99104.13 109015.79
Saving Deposits 2503.78 6022.65 9327.52
Total Deposits 45258.25 62618.50 67627.97
Networth 4676.64 5807.67 7121.74
NPAs 83.86 94.32 174.93
Prov.for Doubt Debts 40.70 76.64 263.71
Res for Loan Loss /
NPA (%) 79.18 92.59 85.10
Tier 1 capital % 9.90 9.50 9.80
ROE 23.07 24.81 25.02
ROA 1.47 1.51 1.55
Dividend Per Share 4.00 6.00 8.00
Net Interest Margin 2.68 2.81 2.88
NPA/Total Asset (%) 0.11 0.10 0.16
0
100
200
Nifty YESBANK
Company Overview
Yes Bank Ltd is among the top five private sector banks
operates as a full service commercial bank engaging in corpor
and institutional banking, financial markets, investment banki
corporate finance, branch banking, business and transact
banking, and wealth management operations. It has a network
560 branches across 200 cities, with over 1139 ATMs and
national operating centers in Mumbai and Gurgaon. The bank a
focuses on development banking in the areas of food
agribusiness, Infrastructure and microfinance. The banks advan
portfolio as on March 31, 2014 comprised of corporate
institutional banking (large corporate) 63.3%, commercial bank
(mid-sized corporate) 15.5% & retail banking (including MSM
21.2%. The retail banking has been major growth driver which
increased to 21% from 14.9% from a year ago and as per
management it will surge to 30-35% of total advances in
coming two years time.
Performance highlights
Net interest income has increased by 22.4% Y/Y to Rs2716in FY14 from Rs2219 cr in FY13 on account of growthcustomer assets and relatively steady net interest margThe net interest margin (NIM) expanded to 3% during period.
As on March 31, 2014, total deposits grew by 10.8% (Y/YRs 74192 cr and advances have increased by 18.4% to 55,633cr.
Its gross NPAs stood at 0.31% (Rs.174.9 Cr.) of gr
advances and net NPAs at 0.05% (Rs.26.1 cr.) of advances as at March 31, 2014. It has capital adequacy rof 14.4% and Tier I ratio of 9.80%, as on March 31, 2014.
Outlook & Valuations
Yes bank, has seen compounded growth of 25% in advances in
last 5 years while, Net profit has seen a CAGR of 28% from Rs.4
cr. in FY10 to Rs.1617 cr. FY14. The bank was able to maint
over 23% return on equity and 1.5% return on assets in the
three years. The bank is expected to see 18-20% growth
advances for FY14-FY16 and the net interest margin could impro
marginally from the current 3% mainly due improving CASA ra
which is expected to grow to 27% from the current levels of 22
The net profit is expected grow over 20% from FY14-FY16. W
improving economic scenario the expected stress on the corpor
advances likely to come down. Also, the retail segment would b
major driver of loan growth as well as fee income.
We recommend a BUY for a target Rs.683 valuing at 2.7x FY1
book value per share.
-
8/12/2019 MODIfied India Investment Strategy - 19052014
17/17
For more Market Updates & Stock Research, visit www.karvyonline.com Page 17/17
Research Desk Stock Broking
KARVY STOCK BROKING - RESEARCH DESK
Name Role Phone Number E-mail Id
JK Jain Head of Research 040 - 4467 7482 [email protected]
Rajendra Prasad Research Analyst 040 - 4467 7491 [email protected]
Joyjit Sinha Research Analyst 040 - 4467 7494 [email protected]
Arul Kaarthick Research Analyst 040 - 4467 7491 [email protected]
Kaushal Jaitliya Research Analyst 040 - 4467 7494 [email protected]
Prashant Kanuru Research Analyst 040 - 4467 7491 [email protected]
Connect & discuss more @
Bloomberg KRVY
Facebook facebook.com/karvyonline
Twitter twitter.com/KarvyOnline
Google Plus plus.google.com/+KarvyOnline/posts
LiveChat live.karvyonline.com
Queries & Feedback
Toll - Free : 1800 425 8283 E-mail Id : [email protected]
Disclosures Appendix
nalyst certification
he following analyst(s), who is (are) primarily responsible for this report, certify (ies) that the views expressed herein accurately reflect his (their) personal vbout the subject security (ies) and issuer(s) and that no part of his (their) compensation was, is or will be directly or indirectly related to the specommendation(s) or views contained in this research report.
isclaimer
he information and views presented in this report are prepared by Karvy Stock Broking Limited. The information contained herein is based on our analys
pon sources that we consider reliable. We, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information a
re not responsible for any loss incurred based upon it. The investments discussed or recommended in this report may not be suitable for all investors. Inv
ust make their own investment decisions based on their specific investment objectives and financial position and using such independent advice, as they b
ecessary. While acting upon any information or analysis mentioned in this report, investors may please note that neither Karvy nor Karvy Stock Broking no
erson connected with any associate companies of Karvy accepts any liability arising from the use of this i nformation and views mentioned in this document.
The author, directors and other employees of Karvy and its affiliates may hold long or short positions in the above mentioned companies from time to time.
mployee of Karvy and its associate companies are required to disclose their individual stock holdings and details of trades, if any, that they undertake. The
endering corporate analysis and investment recommendations are restricted in purchasing/selling of shares or other securities till such a time this recommenas either been displayed or has been forwarded to clients of Karvy. All employees are further restricted to place orders only through Karvy Stock Broking Lt
eport is intended for a restricted audience and we are not soliciting any action based on it. Neither the information nor any opinion expressed herein constitu
ffer or an invitation to make an offer, to buy or sell any securities, or any options, futures nor other derivatives related to such securities.
Karvy Stock Broking LimitedKarvy Centre, Avenue-4, 2nd Floor, Road No: 10, Banjara Hills, Hyderabad500 034. India.
Tel: 91-40-23312454; Fax: 91-40-23311968
mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]://www.facebook.com/karvyonlinehttps://www.facebook.com/karvyonlinehttps://twitter.com/KarvyOnlinehttps://twitter.com/KarvyOnlinehttps://plus.google.com/+KarvyOnline/postshttps://plus.google.com/+KarvyOnline/postshttp://live.karvyonline.com/http://live.karvyonline.com/http://live.karvyonline.com/https://plus.google.com/+KarvyOnline/postshttps://twitter.com/KarvyOnlinehttps://www.facebook.com/karvyonlinemailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]