*
* Sectors in order of premium /
discount to historical averages
BEST PERFORMERS MoM (%)
WORST PERFORMERS MoM (%)
Highlights of Feb’20 edition
Nifty down for second consecutive
month - Biggest MoM correction in 17
months.
Real Estate, Autos, Metals, Capital
Goods and PSU Banks biggest losers.
FII inflows healthy; domestic flows
highest in 6 months.
Research & Quant Team (Deven@MotilalOswal.com); +91 22 6129 1575
March 2020
 Motilal Oswal Financial Services
Contents
Strategy:
Coronavirus takes toll on global equities; Nifty joins the bandwagon
Valuation deep-dive for the month:
Capital Goods
Indian equities:
Nifty, sector performance and key valuation metrics
Global equities:
Performance and valuation snapshot
Valuations:
Nifty/Mid-cap companies
Sector highlights:
Overview and sector valuations
NOTES:
Prices as on 28
th
Feb’20
BULL icon:
Sectors trading
at a premium to
historical averages
BEAR icon:
Sectors trading
at a discount to historical
averages
AUTO
BANKS / FINANCIALS
CAPITAL GOODS
CEMENT
CONSUMER
HEALTHCARE
INFRASTRUCTURE
MEDIA
METALS
OIL & GAS
RETAIL
TECHNOLOGY
TELECOM
UTILITIES
Valuations are on
12-month forward basis
unless otherwise
mentioned
Sector valuations are
based on MOSL coverage
companies
Global equities data
sourced from Bloomberg;
Nifty valuations based on
MOSL estimates
Investors are advised to refer to important disclosures made at the end of this report.
BULLS & BEARS | March 2020
2
 Motilal Oswal Financial Services
Strategy:
Coronavirus takes toll on global equities; Nifty joins the bandwagon
Nifty mirrors global pain; coronavirus takes toll:
The Nifty extended last month’s losses to close 6.4% MoM lower in Feb’20. After showing some resilience
at the beginning of the month, the benchmark mirrored the slide in the global markets on the back of reports of coronavirus spreading beyond China.
Dampening investor sentiment globally was reflected in more than 10% correction in the US market in just a week. Some comfort though comes from
institutional flows, with FIIs infusing USD0.4b and DII flows remaining positive for second straight month at USD2.4b – the highest in six months. Nifty
Midcap100 too shed 6.8%. Notably over the past 12 months, Nifty Mid-Cap 100 is flat, as against the Nifty’s rise of 3.8%. Nifty Mid-cap 100 P/E ratio of
20.5x is at a 22% premium to the Nifty.
Earnings season in-line; BFSI and Consumer lead:
The December-quarter corporate earnings season was in line with our modest expectations. Corporate
tax rate cuts continued supporting earnings growth. BFSI and Consumer drove earnings, while Metals dragged the aggregates. Commentary from
corporates was mixed, and at best indicated a gradual recovery ahead. We continue seeing downside risks to our earnings estimates for FY21. Nifty sales
declined 2% YoY (our estimate: -3%), while EBITDA/PBT/PAT were up 11%/4%/9% YoY (our estimate: 8%/3%/9%). Performance was driven by BFSI,
excluding which Nifty PBT was down 5% YoY and PAT was flat YoY (in-line). If BFSI drove the Nifty performance single handedly, global cyclicals like Metals
and Oil & Gas dragged it.
Macro remains weak; GDP growth weakens further:
Real GVA/GDP grew 4.5%/4.7% YoY in 3QFY20, higher than our estimate. While CSO revised
GDP/GVA growth to 5.6%/5.4% from 5.0%/4.9% for 1QFY20, the numbers for 2QFY20 were revised up to 5.1%/4.8% from 4.5%/4.3%. While weakness in
real GDP growth was entirely led by investments, that in GVA growth was led by a slump in industrial activity. Details suggest that fiscal spending has been
the major driver of growth all this while. However, we expect fiscal spending to taper off in 4QFY20, leading to even lower growth of ~4.5% in 4QFY20.
Broad-based correction Feb’20:
In Feb’20, all key global markets – Russia (-10%), the UK (-10%), Japan (-9%), Brazil (-8%), the US (-8%), Indonesia (-8%),
India-Nifty (-6%), Korea (-6%), MSCI EM (-5%), China (-3%) and Taiwan (-2%) – closed lower in local currency terms. Over the last 12 months, MSCI India
(+1%) outperformed MSCI EM (-4%). Notably, over the last 10 years, MSCI India has outperformed MSCI EM by 82%. MSCI India’s P/E is at a premium of
62% to MSCI EM’s P/E, above its historical average premium of 52%.
Sectoral trends for Feb’20 – Real Estate, Autos and Metals top laggards:
For Feb’20, Real Estate (-16%), Auto (-14%), Metals (-13%), Capital Goods (-12%)
and PSU Banks (-11%) were the biggest losers in the sectoral space. HUL (+7%), Titan (+6%), Bharti Airtel (+6%), Nestle (+3%) and Bajaj Finance (+2%) were
the top performers MoM. Tata Motors (-27%), M&M (-20%), Hero Moto (-18%), Eicher (-18%) and Hindalco (-17%) were the main laggards. In this edition,
we take a deep-dive into the valuation metrics of the capital goods sector.
Six sigma event hits markets; volatility to remain high:
While the six-sigma event – coronavirus outbreak – has both economic and political implications,
the exact nature and quantum of the same are difficult to forecast. Global growth and trade might deteriorate further if the current situation persists or
escalates further. Although India is predominantly a domestic consumption-driven economy, its trade inter-linkages with the world and integrated supply
chains in several sectors bring in an element of risk. In fact, this event has introduced additional downside risks to our earnings estimates for FY21 (Nifty
EPS forecast: INR679). Till we see a semblance of normalcy returning to the global economy and markets, the Indian markets are likely to track global
movements and stay narrow. Fluctuations in FII equity flows can also add to volatility. Meanwhile, select sectors with better earnings visibility will continue
enjoying valuation premium over broader markets.
Top Ideas:
Large-caps:
ICICI Bank, SBI, HUL, Bharti Airtel, Maruti, Infosys, HCL Tech, RIL, Ultratech and L&T.
Mid-caps:
Crompton Consumer, Ashok Leyland, Indian Hotels, Federal Bank, JK Cement, Tata Consumer, ABFRL, Alkem Labs.
BULLS & BEARS | March 2020
3
 Motilal Oswal Financial Services
Valuation deep-dive for the month: Capital Goods
Capital Goods: Trend in P/E (x) – one-year forward
Valuation multiples of capital goods companies have gyrated from the
lows of 8.4x in FY05 to the peak of 51x in FY16, whereas the average
Capital Goods P/E (x)
5 Yr Avg (x)
10 Yr Avg (x)
15 Yr Avg (x)
65.0
multiple for the sector stands at 19.2x. Such steep variance in the
valuation multiple over FY05-19 is an indicator of highly cyclical earnings
45.0
31.7
of the sector and its dependence on capital expenditure activity
28.0
25.0
prevailing in the economy.
26.0
19.2
The sector has witnessed multiple business cycles, and valuation
5.0
multiples have followed accordingly. Prior to FY05, the capital goods
sector traded at a discount to the Nifty (in terms of P/E), given weak
capex activity in India and poor earnings visibility of the companies.
Capital Goods: Trend in P/B – one-year forward
Over FY05-10, the sector saw massive re-rating and traded at a
15.0
Capital Goods P/B (x)
5 Yr Avg (x)
10 Yr Avg (x)
15 Yr Avg (x)
premium of 37% to the Nifty driven by infrastructure capex momentum
witnessed during the period, leading to strong earnings visibility for the
10.0
sector. From FY10-14, valuation premium came off for the sector
4.1
5.0
(traded at 30% premium to Nifty) due to policy paralysis prevailing in
2.4
3.3
3.2
the country. Post the FY14 general election, valuation premium has
0.0
expanded in anticipation of a capex cycle recovery.
Over
FY14-16,
valuation premium for the companies in the sector
increased significantly (111% premium to Nifty P/E compared to 30%
premium to Sensex P/E over FY11-14) in anticipation of a resurrection in
Capital Goods relative to Nifty P/E (%)
capex activity, which failed to materialize. Post FY16, average premium
Capital Goods Relative to Nifty PE (%)
15 Yr Avg (x)
180.0
to Nifty P/E has narrowed down to 49.4%, given lower-than-anticipated
120.0
pickup in capex activity momentum and fears of ordering activity further
slowing down given the 2019 general elections. As at Feb’20, the sector
49.4
60.0
premium relative to the Nifty has declined to a multi-year low of 13.8%.
13.8
Key events to be watched out in the sector are: (a) favorable policy
0.0
formation driving capex momentum, (b) pick-up in ordering activity
from the private sector and (c) improved liquidity situation in the
economy.
BULLS & BEARS | March 2020
4
 Motilal Oswal Financial Services
Key highlights
Indian equities:
Another month of consolidation — Nifty down 6.4%
The Nifty ended 6.4% MoM lower at 11,202 in Feb’20. This was the second consecutive month of a
downtrend and in fact the steepest MoM decline in 17 months.
Global and local market sentiment took a hit following reports of coronavirus spreading outside of China,
including South Korea, Italy and the Middle East.
Sector-wise, Real Estate (-16%), Auto (-14%), Metals (-13%), Capital Goods (-12%) and PSU Banks (-11%)
were the biggest losers.
FII inflows were healthy at USD0.4b. Notably, domestic flows were highest in six months (at USD2.4b).
Stock performance:
Breadth negative; 44 Nifty stocks close lower
HUL (+7%), Titan (+6%), Bharti Airtel (+6%), Nestle (+3%) and Bajaj Finance (+2%) were the top performers
on an MoM basis. Tata Motors (-27%), M&M (-20%), Hero Moto (-18%), Eicher (-18%) and Hindalco (-17%)
were the main laggards.
Global equities:
All major economies end lower
In Feb’20, all key global markets – Russia (-10%), the UK (-10%), Japan (-9%), Brazil (-8%), the US (-8%),
Indonesia (-8%), India-Nifty (-6%), Korea (-6%), MSCI EM (-5%), China (-3%) and Taiwan (-2%) – closed lower
in local currency terms.
Over the last 12 months, MSCI India (+1%) outperformed MSCI EM (-4%). Notably, over the last 10 years,
MSCI India has outperformed MSCI EM by 82%. MSCI India’s P/E is at a premium of 62% to MSCI EM P/E,
above its historical average premium of 52%.
Sector valuations:
Cyclicals underperform, trades at discount
Oil & Gas trades at a P/B of 1.3x (near the historical average of 1.5x) and a P/E of 9.6x (at ~16% discount to
the long-term average of 11.4x). Brent prices for the month declined to an average of ~USD55/bbl (v/s
~USD64/bbl in Jan’19 and USD62/bbl in 3QFY20) owing to concerns about coronavirus.
Metals sector trades at a P/B of 0.8x, below the historical average of 1.2x. EV/EBITDA at 5.8x is at a 21%
discount to the historical average. Average domestic flat steel prices increased to ~INR39,060 in the month
from ~INR38,480 last month. Long steel prices were quite lower at an average of ~INR34,978.
Technology is trading at a P/E of 17.2x, at a 2% premium to its historical average of 16.9x. Growth
momentum was impacted by higher-than-usual seasonal weakness in 3QFY20. Exposure of tier I companies
to the COVID 19’s highly impacted geographies like China is limited.
About the product
As the tagline suggests,
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cover:
Valuations of Indian
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Current valuation of
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Sectors that are
currently valued at
premium/discount to
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BULLS & BEARS | March 2020
5
 Motilal Oswal Financial Services
Indian equities:
Another month of consolidation — Nifty down 6.4%
The Nifty ended 6.4% MoM lower at 11,202 in Feb’20. This
was the second consecutive month of a downtrend and in
fact the steepest MoM decline in 17 months.
Global and local market sentiment took a hit following
reports of coronavirus spreading outside of China, including
South Korea, Italy and the Middle East.
Sector-wise, Real Estate (-16%), Auto (-14%), Metals (-13%),
Capital Goods (-12%) and PSU Banks (-11%) were the biggest
losers.
FII inflows were healthy at USD0.4b. Notably, domestic flows
were highest in six months (at USD2.4b).
Nifty MoM change (%) — second consecutive month of correction
Nifty MoM Change (%)
5.8
5.6
4.7
3.0
6.2
6.0
2.9
0.10.30.4
5.0
6.4
4.7
1.5
1.1
1.1 0.9
5.7
7.7
4.1
3.5
1.5
0.9
1.7
6.4
4.6
3.73.3 3.4
1.4
1.0 1.6
1.3 1.1
3.6
4.9
0.0 0.2
Institutional flows (USD b) — sixth straight month of FII inflows,
DII flows positive for second consecutive month
FIIs (USDb)
DIIs (USDb)
Sectoral MoM change (%) — Real Estate, Autos, Metals and Capital
Goods top laggards
-3
-4
-6
-6
-6
-6
-7
-9
-9
-10
-11 -11 -12
-13
-14
-16
Jan
Feb Mar Apr May June July Aug Sep
2019
Oct Nov Dec
Jan
Feb
2020
BULLS & BEARS | March 2020
6
 Motilal Oswal Financial Services
Indian equities:
Breadth negative in Feb’20; 44 Nifty stocks close lower
Nifty – best and worst performers in Feb’20:
HUL (+7%), Titan (+6%), Bharti Airtel (+6%), Nestle (+3%) and Bajaj Finance (+2%) were the top
performers on an MoM basis. Tata Motors (-27%), M&M (-20%), Hero Moto (-18%), Eicher (-18%) and Hindalco (-17%) were the main laggards.
Nifty – best and worst performers in CY20YTD:
Bharti Airtel (+15%), HUL (+13%), Nestle (+7%), Titan (+6%) and Bajaj Finance (+5%) were the top
performers. Tata Motors (-30%), ONGC (-29%), Hindalco (-28%), IndusInd Bank (-27%) and Yes Bank (-26%) were the worst performers.
7 6 6
Best and worst Nifty performers (MoM) in Feb’20 (%) – breadth negative, 88% of Nifty stocks traded lower
3 2
0
-1 -3
-4 -4 -4 -4 -4 -4 -5 -6 -6 -6 -6 -6
-6
-6
-6 -7 -7 -7 -7 -7 -7 -9 -9 -10 -10
-10 -11 -12 -12 -12
-13 -13 -13 -14 -14
-16 -16 -17 -17 -18-18 -20
-27
Best and worst Nifty performers (YoY) in CY20YTD (%) – only eight companies in Nifty trading higher
15 13
7 6 5 4
2 1
0 -2 -2
-4 -4 -5 -6 -6
-7 -7 -8 -8 -8 -8 -9 -9 -9 -10 -10
-10 -11 -12
-13 -13 -14 -14 -14 -15 -15
-16 -16 -16 -17 -18
-19 -20
-25 -26 -26-27 -28 -29 -30
BULLS & BEARS | March 2020
7
 Motilal Oswal Financial Services
Indian equities:
Mid-caps trade at premium to large-caps
In Feb’20, the Nifty Midcap100 was down 6.8%, in line with the Nifty’s fall of 6.4%. Notably, over the past 12 months, mid-caps are flat as against the
Nifty’s rise of 3.8%.
Nifty Mid-cap-100 P/E ratio of 20.5x is at a 22% premium to large-caps.
Mid-caps performance v/s large-caps in last five years
Nifty Rebased
175
150
Nifty Midcap 100 Rebased
5 Year CAGR |
Nifty: 4.7% |
Midcap: 5.1%
Mid-caps underperformed large-caps in the last 12 months
116
109
102
95
88
Nifty Rebased
Nifty Midcap 100 Rebased
104
100
125
100
75
128
126
12-month forward P/E (x)
34
28
22
16
10
Midcap PE (x)
Nifty Avg: 20.3x
Midcap Avg: 20.8x
Nifty PE (x)
Mid-caps v/s large-cap P/E premium/discount (%)
Midcap Vs Nifty PE Prem/(Disc) (%)
45
25
22
20.5
16.8
5
-15
-35
Average: 2%
Source: MOFSL, Bloomberg for Midcap valuation.
BULLS & BEARS | March 2020
8
 Motilal Oswal Financial Services
Indian equities:
Valuations below long-period averages
Valuations of Indian equities are below their long-period averages. The Nifty trades at a 12-month forward P/E of 16.8x, at a 7% discount to its
long-period average of 18.1x. The Nifty’s P/B of 2.5x is also below its historical average of 2.6x.
At the current trailing P/E of 21.4x and forward P/E of 16.8x, we see limited triggers for further re-rating, unless accompanied by a material surprise
in earnings.
12-month forward Nifty P/E (x)
24
21
18
15
12
10 Year Avg: 18.1x
16.8
12-month forward Nifty P/B (x)
3.2
2.9
2.6
2.3
2.0
10 Year Avg: 2.6x
2.5
Trailing Nifty P/E (x)
25
22
19
16
13
10 Year Avg: 19.6x
21.4
Trailing Nifty P/B (x)
3.6
3.2
2.8
2.4
2.0
10 Year Avg: 2.8x
2.7
BULLS & BEARS | March 2020
9
 Motilal Oswal Financial Services
Indian equities:
Market cap-to-GDP below historical average, RoE to improve
The Nifty is trading at a 12-month forward RoE of 14.7%, marginally above its long-term average of 14.5%.
Market cap-to-GDP ratio is at 70% (FY20E GDP), below its long-term average of 76%.
Trend in Nifty RoE (%)
17.0
16.1
10 Year Avg: 14.5%
14.9
14.7
13.2
13.5
12.0
FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20E FY21E
12.7
16.3 16.2
15.4
14.9
Average of 14.8%
13.6
12.9
12.5
12-month forward Nifty RoE (%)
18.0
16.8
16.5
15.0
14.9
12.8
Trend in India’s market cap-to-GDP (%) – trading below its long-period averages
95
88
71
55
64
Average of 76% for the period
81
66
69
79
83
79
70
BULLS & BEARS | March 2020
10
 Motilal Oswal Financial Services
Global equities:
All major economies end lower in Feb’20
In Feb’20, all key global markets – Russia (-10%), the UK (-10%), Japan (-9%), Brazil (-8%), the US (-8%), Indonesia (-8%), India-Nifty (-6%), Korea
(-6%), MSCI EM (-5%), China (-3%) and Taiwan (-2%) – closed lower in local currency terms.
Indian equities are trading at 21.3x FY20E earnings. All key markets continue trading at a discount to India.
India (Nifty) v/s other markets
CY20 YTD Chg (%)
Index
Value
India
US
UK
Japan
Taiwan
Korea
Brazil
Indonesia
MSCI EM
China
Russia
11,202
2,954
6,581
21,143
11,292
1,987
104,172
5,453
1,006
2,880
4,801
Mkt Cap Local
In USD
(USD T) Currency
2.0
31.7
3.0
5.5
1.3
1.2
0.9
0.4
16.9
7.5
0.7
-8
-9
-13
-11
-6
-10
-10
-13
-10
-6
-10
-10
-9
-16
-10
-7
-13
-19
-16
-10
-6
-17
PE (x)
CY19 /
FY20
21.3
19.4
19.0
18.6
18.0
17.8
17.6
16.7
14.0
13.7
5.0
CY20 /
FY21
16.5
17.1
12.0
16.8
15.2
11.0
12.4
12.9
12.3
10.6
5.8
-9
-11
-12
-15
-16
-17
-21
-34
-35
-76
3
-27
2
-8
-33
-25
-22
-25
-36
-65
Prem / Disc to India
PE (%)
CY19 /
FY20
CY20 /
FY21
PB (x)
CY19 /
FY20
2.7
3.2
1.6
1.6
1.7
0.8
2.1
1.8
1.5
1.4
0.7
CY20 /
FY21
2.5
3.0
1.5
1.5
1.8
0.8
1.7
1.8
1.4
1.2
0.7
RoE (%)
CY19 /
FY20
12.8
15.7
9.3
8.7
9.4
4.3
12.3
10.7
11.2
10.3
14.1
CY20 /
FY21
14.9
19.6
9.3
9.2
13.5
6.3
15.2
16.8
11.8
11.1
11.6
Source: Bloomberg/MOFSL
MoM Chg (%)
Taiwan
China
MSCI EM
Korea
India
Indonesia
US
Brazil
Japan
UK
Russia
-8
-8
-8
-9
-10
-10
-5
-6
-3
-2
-6
BULLS & BEARS | March 2020
11
 Motilal Oswal Financial Services
Global equities:
MSCI India outperforms MSCI EM in last 12 months
Over the last 12 months, MSCI India (+1%) outperformed MSCI EM (-4%). Notably, over the last 10 years, MSCI India has outperformed MSCI EM by
82%.
MSCI India’s P/E is at a premium of 62% to MSCI EM’s P/E, above its historical average premium of 52%.
MSCI India outperformed MSCI EM by 82% over the last 10 years
250
MSCI India Rebased
5 Year CAGR:
MSCI India: 3.1%
MSCI EM: 0.3%
MSCI EM Rebased
10 Year CAGR:
MSCI India: 6.6%
200
MSCI EM: 0.7%
MSCI EM v/s MSCI India performance over 12 months
114
108
102
96
90
MSCI India Rebased
MSCI EM Rebased
189
107
101
96
150
100
50
MSCI India v/s MSCI EM trailing P/E (x)
33.0
26.0
MSCI India Avg: 20.3x
MSCI India v/s MSCI EM P/E premium (%)
MSCI EM PE (x)
140
MSCI India Vs EM PE Premium (%)
MSCI India PE (x)
22.8
14.1
MSCI EM Avg: 13.4x
105
70
35
0
Average of 52%
19.0
12.0
5.0
62
Source: Bloomberg
BULLS & BEARS | March 2020
12
 Motilal Oswal Financial Services
Global equities:
India’s share in world market cap at historical average
India’s share in world market cap is at 2.5% – at its historical average.
Over the last 12 months, the world’s market cap has increased 3.3% (USD2.5t), while India’s market cap is flat.
Market cap change in last 12 months (%)
Mkt cap chg 12M (%)
China
Average of 2.5%
Curr Mcap (USD Tr)
11
11
9
4
7.5
1.3
0.7
31.7
2.0
5.5
0.9
3.0
1.2
0.4
Trend in India's contribution to world market cap (%)
3.5
3.0
2.5
2.0
1.5
1.6
India's Contribution to World Mcap (%)
3.3
2.5
Taiwan
Russia
US
India
0
-4
-8
-10
-15
-15
Global market-cap-to-GDP (%)
155
111
106
77
70
48
55
42
40
Current mkt cap to GDP (%)
Japan
Brazil
UK
Korea
Indonesia
* Based on GDP for Dec 2018
Source: Bloomberg
BULLS & BEARS | March 2020
13
 Motilal Oswal Financial Services
Nifty:
60% companies trading at discount to historical averages
Companies trading at a significant premium to their historical averages:
Nestle (+47%), HUL (+45%), Titan (+44%), Asian Paints (+38%) and Britannia
(+34%).
Companies trading at a significant discount to their historical averages:
ONGC (-64%), Tata Steel (-58%), Zee (-53%), Coal (-50%), and NTPC (-46%).
Snapshot: Nifty companies’ valuations
PE (x)
Name
Bajaj Auto
Eicher Motors
Hero MotoCorp
Mahindra & Mahindra
Maruti Suzuki
Tata Motors
Axis Bank
HDFC Bank
ICICI Bank
IndusInd Bank
Kotak Mahindra Bank
State Bank
Bajaj Finance
HDFC
Larsen & Toubro
Grasim Inds
Ultratech Cement
Asian Paints
Britannia Inds.
Hind. Unilever
ITC
Nestle India
Sector
Auto
Auto
Auto
Auto
Auto
Auto
Banks - Private
Banks - Private
Banks - Private
Banks - Private
Banks - Private
Banks - PSU
Banks - NBFC
Banks - NBFC
Capital Goods
Cement
Cement
Consumer
Consumer
Consumer
Consumer
Consumer
Current
15.1
19.1
12.0
11.0
24.5
12.9
16.9
19.1
17.5
11.1
29.7
8.2
33.3
38.5
12.9
15.0
23.2
55.6
46.1
56.9
15.3
66.8
10 Yr Avg Prem/Disc (%)
16.4
24.7
17.6
17.2
21.8
12.9
31.6
19.9
19.3
18.8
23.8
14.3
17.3
34.0
22.4
12.6
27.7
40.2
34.3
39.2
26.1
45.4
-8
-23
-32
-36
12
0
-46
-4
-9
-41
25
-43
93
13
-42
20
-16
38
34
45
-41
47
Relative to Nifty P/E (%)
Current
-10
14
-29
-35
46
-23
0
13
4
-34
76
-51
98
129
-24
-11
38
230
174
238
-9
297
10 Yr Avg
-9
37
-3
-5
20
-29
74
10
7
4
32
-21
-4
88
24
-31
53
122
90
116
44
151
Current
3.1
3.7
2.8
1.4
3.6
0.7
2.0
3.3
2.5
1.8
4.1
1.0
6.7
4.0
2.1
1.0
2.8
14.6
15.3
59.1
3.6
70.3
PB (x)
10 Yr Avg Prem/Disc (%)
5.0
6.4
6.5
2.9
3.4
1.8
2.0
3.3
1.8
2.8
3.0
1.2
3.2
4.5
2.9
1.7
2.8
11.3
12.3
33.5
7.0
27.3
-38
-43
-58
-54
5
-63
0
-2
41
-36
35
-15
108
-10
-28
-39
0
29
24
76
-49
158
Relative to Nifty P/B (%)
Current
25
47
11
-45
44
-72
-18
32
1
-28
64
-59
169
61
-15
-58
13
490
517
2286
45
2738
10 Yr Avg
95
147
153
13
32
-28
-21
29
-31
9
17
-54
24
72
13
-34
8
338
378
1200
172
957
BULLS & BEARS | March 2020
14
 Motilal Oswal Financial Services
Nifty:
60% companies trading at discount to historical averages
PE (x)
Name
Cipla
Dr Reddy’ s Labs
Sun Pharma
Zee Ent.
Hindalco
JSW Steel
Tata Steel
Vedanta
BPCL
GAIL
IOCL
ONGC
Reliance Inds.
Titan Co
HCL Technologies
Infosys
TCS
Tech Mahindra
Wipro
Bharti Airtel
Bharti Infratel
Coal India
NTPC
Power Grid Corp.
UPL
Nifty
Sector
Healthcare
Healthcare
Healthcare
Media
Metals
Metals
Metals
Metals
Oil & Gas
Oil & Gas
Oil & Gas
Oil & Gas
Oil & Gas
Retail
Technology
Technology
Technology
Technology
Technology
Telecom
Telecom
Utilities
Utilities
Utilities
Others
Current
16.6
20.6
17.8
12.5
7.1
8.1
6.6
8.7
9.5
8.4
5.9
3.5
12.9
56.1
11.9
17.2
21.2
13.1
12.1
NA
12.5
6.7
7.3
8.1
12.5
16.8
10 Yr Avg
28.1
25.3
29.6
26.7
9.8
13.1
15.7
11.1
10.1
14.2
9.6
9.8
12.3
39.0
13.3
17.3
19.4
12.7
15.0
34.3
22.8
13.4
13.4
11.9
13.1
18.1
Prem/Disc (%)
-41
-19
-40
-53
-27
-38
-58
-22
-6
-41
-38
-64
5
44
-10
0
9
4
-19
-
-45
-50
-46
-32
-4
-7
Relative to Nifty P/E (%)
Current
-1
22
6
-26
-58
-52
-61
-49
-44
-50
-65
-79
-23
233
-29
2
26
-22
-28
-
-26
-60
-57
-52
-26
10 Yr Avg
55
40
64
47
-46
-28
-13
-39
-44
-22
-47
-46
-32
115
-27
-4
7
-30
-17
89
26
-26
-26
-34
-28
Current
1.8
2.8
1.9
2.0
0.8
1.3
0.6
0.6
1.8
1.0
0.8
0.5
1.6
15.6
2.6
5.1
8.2
2.8
2.2
3.2
2.7
2.9
0.8
1.3
2.2
2.5
PB (x)
10 Yr Avg Prem/Disc (%)
3.3
3.9
4.6
5.5
1.3
1.4
1.5
2.0
1.7
1.8
1.1
1.3
1.4
10.3
3.2
4.1
6.6
2.7
2.8
2.1
3.5
5.9
1.5
1.7
2.6
2.6
-47
-28
-59
-64
-41
-6
-59
-68
4
-45
-32
-66
17
51
-19
24
24
5
-22
49
-21
-50
-42
-23
-15
-4
Relative to Nifty P/B (%)
Current
-29
13
-25
-20
-69
-48
-75
-74
-29
-61
-69
-81
-34
531
4
107
229
13
-10
28
10
19
-66
-46
-12
10 Yr Avg
28
50
76
112
-50
-46
-42
-23
-34
-32
-56
-48
-45
300
23
60
154
3
10
-17
34
130
-44
-32
-1
BULLS & BEARS | March 2020
15
 Motilal Oswal Financial Services
Mid-caps perform in line with Nifty
The Nifty Mid-cap 100 was down 6.8% in Feb’20, as against the Nifty’s fall of 6.4%.
Best mid-cap performers in Feb’20: Ajanta Pharma (+25%), India Cements (+17%), IPCA Labs (+9%), Aegis Logistics (+9%) and MCX (+3%).
Company
Ajanta Pharma
India Cements
Ipca Labs.
Aegis Logistics
MCX
Strides Pharma
Alembic Pharma
Persistent Sys
Phoenix Mills
Brigade Enterpr.
Blue Star
Indian Hotels
Federal Bank
M & M Financial
CESC
DCB Bank
Team Lease Serv.
Trident
Sun TV Network
Emami
Birla Corpn.
Jyothy Lab.
Engineers India
Mahindra CIE
Delta Corp
LIC Housing Fin.
Sadbhav Engg.
PE (x)
Current 10 Yr Avg Prem/Disc (%)
23.1
16.9
36
20.2
25.7
-21
21.9
25.4
-14
20.3
23.9
-15
31.4
32.4
-3
12.6
61.4
-79
18.1
17.1
6
14.6
13.8
5
33.8
31.3
8
26.2
15.3
71
24.9
30.3
-18
31.3
51.3
-39
8.0
12.2
-34
11.9
17.6
-33
6.6
10.8
-38
10.0
15.7
-36
34.1
37.3
-8
5.7
8.2
-31
10.4
19.7
-47
18.3
31.5
-42
9.7
15.6
-38
22.5
37.0
-39
8.5
19.4
-56
10.2
29.3
-65
14.5
34.0
-57
5.5
11.3
-51
6.3
25.5
-75
Relative to Nifty P/E (%)
Current
10 Yr Avg
37
-6
20
42
30
40
20
32
87
79
-25
239
8
-6
-13
-24
101
73
56
-15
48
67
86
183
-53
-33
-29
-3
-61
-41
-40
-13
103
106
-66
-55
-38
9
9
74
-42
-14
33
104
-50
7
-40
62
-14
88
-67
-38
-63
41
PB (x)
Current 10 Yr Avg Prem/Disc (%)
4.1
4.5
-9
0.5
0.7
-20
4.0
3.2
24
4.3
3.4
25
4.5
3.7
20
1.3
3.2
-58
3.1
4.2
-27
2.1
2.3
-8
3.2
2.3
41
1.9
1.2
62
6.1
7.4
-18
3.2
3.5
-9
1.1
1.2
-14
1.7
2.3
-28
0.8
0.8
0
1.3
1.5
-11
5.4
6.1
-12
0.8
0.9
-12
2.3
4.8
-53
4.9
10.3
-52
1.0
1.1
-9
3.3
4.5
-27
1.9
3.8
-49
1.0
2.7
-63
1.6
2.4
-37
0.8
1.9
-58
0.4
2.5
-86
Relative to Nifty P/B (%)
Current
10 Yr Avg
64
73
-78
-73
61
25
74
33
81
45
-46
25
24
62
-15
-12
30
-11
-23
-54
147
188
28
35
-57
-52
-33
-11
-68
-69
-47
-43
117
137
-68
-65
-9
87
99
300
-60
-57
34
76
-23
45
-60
4
-37
-5
-68
-28
-86
-3
Price Chg (%)
MoM
CY20YTD
25
42
17
35
9
20
9
15
3
10
1
30
0
10
-1
4
-2
3
-4
6
-4
-5
-5
-7
-6
-2
-6
7
-9
-12
-10
-6
-10
-6
-11
-18
-12
-6
-13
-17
-13
13
-21
-16
-23
-29
-24
-19
-25
-32
-27
-26
-46
-35
BULLS & BEARS | March 2020
16
 Motilal Oswal Financial Services
Sector valuations:
Cyclicals underperform, trade at discount
Oil & Gas sector trades at a P/B of 1.3x (near the historical average of 1.5x) and a P/E of 9.6x (at ~16% discount to the long-term average of 11.4x).
Brent prices for the month declined to an average of ~USD55/bbl (v/s ~USD64/bbl in Jan’20 and USD62/bbl in 3QFY20) owing to concerns about the
outbreak of coronavirus. Refining margin improved to an average of USD3.2/bbl (v/s USD0.4/bbl in Jan’20 and USD1.6/bbl in 3QFY20), primarily due
to a sharp decline in the refinery run rates.
Metals trades at a P/B of 0.8x, below its historical average of 1.2x. EV/EBITDA at 5.8x is at a 21% discount to its historical average. Average domestic
flat steel prices increased to ~INR39,060 in the month from ~INR38,480 last month. Long steel prices were quite lower at an average of ~INR34,978.
Technology sector is trading at a P/E of 17.2x, at a 2% premium to its historical average of 16.9x. Growth momentum was impacted by higher-than-
usual seasonal weakness in 3QFY20.Exposure of Tier I companies to the COVID 19’s highly impacted geographies like China is limited. Also, their
exposure to verticals like Travel, Transportation and Hospitality within APAC is limited. Overall for tier 1, we expect 1% EPS impact over 1HCY20.
Snapshot: Sector valuations
Sector
Auto
Banks - Private
Banks - PSU
NBFC
Capital Goods
Cement
Consumer
Healthcare
Infrastructure
Media
Metals
Oil & Gas
Retail
Technology
Telecom
Utilities
Current
17.3
18.6
8.3
21.9
19.2
23.3
37.2
18.6
9.1
12.5
8.4
9.6
60.6
17.2
Loss
7.5
Relative to
Nifty P/E (%)
10 Yr Avg Prem/Disc (%) Current 10 Yr Avg
18.3
-5.5
3
-2
19.2
-3.6
10
5
9.8
-15.0
-51
-47
19.1
14.7
30
6
28.0
-31.6
14
52
22.9
1.9
39
24
34.1
9.1
121
89
24.4
-23.5
11
34
12.2
-25.2
-46
-32
22.5
-44.6
-26
25
12.1
-31.1
-50
-33
11.4
-16.0
-43
-35
47.1
28.7
260
165
16.9
1.8
2
-5
-
-
12.7
-41.2
-56
-27
PE (x)
Current
2.3
2.8
0.7
3.3
2.4
2.2
10.6
2.6
0.7
2.1
0.8
1.3
10.7
4.7
3.3
1.2
Relative to
Nifty P/B (%)
10 Yr Avg Prem/Disc (%) Current 10 Yr Avg
3.2
-28.9
-9
23
2.5
15.6
14
-5
0.9
-16.6
-70
-65
3.0
10.2
34
17
3.3
-25.2
-1
26
2.6
-13.7
-10
1
9.8
8.3
328
282
4.0
-35.8
5
57
1.6
-59.7
-73
-37
4.2
-49.0
-14
64
1.2
-36.7
-69
-53
1.5
-13.7
-48
-42
6.3
71.6
333
142
4.4
8.8
92
69
2.2
49.8
33
-14
2.0
-40.5
-53
-23
PB (x)
BULLS & BEARS | March 2020
17
 Motilal Oswal Financial Services
Autos:
Wholesales weak ahead of BS6 transition; coronavirus – a new roadblock
Auto sector is trading at a P/E of 17.3x,
below
its
historical average of 18.3x.
In Feb’20, volumes of 2Ws/PV/CVs declined
~14%/13%/35% YoY and ~1%/11%/17% MoM.
Ongoing weakness in demand and inventory
calibration in the run up to BS6 transition have
slowed down production ramp-up.
Coronavirus outbreak in China resulted in
component supply disruptions, leading to lower
wholesales for some OEMs in Feb’20.
Volumes/operating performance are likely to remain
volatile due to BS6 transition and the outbreak of
coronavirus.
38
31
24
17
10
3
18.3
17.3
Auto P/E (x)
10 Yr Avg (x)
70
40
10
-20
-50
-1.6
3.0
Auto Relative to Nifty PE (%)
5
4
3
2
1
Auto P/B (x)
10 Yr Avg (x)
70
40
2.3
Auto Relative to Nifty PB (%)
3.2
22.8
10
-20
-8.8
Sector Performance
MoM: -14%
Company
Amara Raja Batt.
Ashok Leyland
Bajaj Auto
Bharat Forge
Bosch
CEAT
Eicher Motors
Escorts
Exide Inds.
Hero Motocorp
M&M
Mahindra CIE
Maruti Suzuki
Motherson Sumi
Tata Motors
TVS Motor Co.
Current
16.1
24.7
15.1
21.8
26.0
14.6
19.1
12.2
15.9
12.0
11.0
10.2
24.5
17.5
12.9
25.5
PE (x)
10 Yr Avg
19.6
23.7
16.4
25.0
34.1
12.5
24.7
9.6
22.4
17.6
17.2
29.3
21.8
26.5
12.9
22.8
Prem/Disc (%)
-18
4
-8
-13
-24
17
-23
27
-29
-32
-36
-65
12
-34
0
12
Relative to Nifty P/E (%)
Current
10 Yr Avg
-4
8
47
31
-10
-9
29
38
54
89
-13
-31
14
37
-27
-47
-5
24
-29
-3
-35
-5
-40
62
46
20
4
46
-23
-29
51
26
Current
2.6
2.6
3.1
3.2
4.2
1.3
3.7
1.9
2.0
2.8
1.4
1.0
3.6
2.5
0.7
4.8
PB (x)
10 Yr Avg
3.9
2.9
5.0
4.3
5.7
1.3
6.4
1.1
3.2
6.5
2.9
2.7
3.4
4.9
1.8
4.7
Prem/Disc (%)
-34
-11
-38
-24
-26
2
-43
67
-37
-58
-54
-63
5
-50
-63
2
Relative to Nifty P/B (%)
Current
10 Yr Avg
3
50
5
13
25
95
30
65
69
120
-47
-50
47
147
-23
-56
-20
23
11
153
-45
13
-60
4
44
32
-1
92
-72
-28
93
82
BULLS & BEARS | March 2020
18
 Motilal Oswal Financial Services
Private Banks:
Loan growth moderates; operating performance strong
Private Banks trade at a P/B of 2.8x, above the historical
average of 2.5x.
System loan growth moderated to ~7.1% for the fortnight
ended 31
th
Jan’20 (v/s 14.2% in Apr’19). Private banks
were facing pressure from weak corporate growth and
moderation in CV/auto loans. However, growth in the
unsecured segments remains buoyant.
Although the lending environment remains weak, private
banks reported stable/improving margins due to the
increased proportion of high-yielding assets. CASA growth
remains challenging; banks are focusing more on
garnering retail term deposits.
All banks reflected an increase in the slippage trends, led
by both corporate/retail. We expect stressed asset pool to
increase further led by the telecom sector. Retail slippages
were led by the CV/CE segment. Also, a few banks
reflected caution in the unsecured portfolio.
In the Union Budget, government has increased insurance
coverage on deposits to INR0.5m v/s INR0.1m. This will
increase cost of insurance and slightly drag RoA of banks.
33
26
19
12
5
19.2
18.6
Private Banks P/E (x)
10 Yr Avg (x)
40
20
0
-20
-40
Private Banks Relative to Nifty PE (%)
10.3
4.7
Private Banks P/B (x)
4
3
2
1
2.5
10 Yr Avg (x)
30
10
Private Banks Relative to Nifty PB (%)
-5.2
14.5
2.8
-10
-30
-50
Sector Performance
MoM: -4%
Company
Axis Bank
DCB Bank
Federal Bank
HDFC Bank
ICICI Bank
IndusInd Bank
Kotak Mah. Bank
South Ind.Bank
Current
16.9
10.0
8.0
19.1
17.5
11.1
29.7
3.7
PE (x)
10 Yr Avg
31.6
15.7
12.2
19.9
19.3
18.8
23.8
8.5
Prem/Disc (%)
-46
-36
-34
-4
-9
-41
25
-56
Relative to Nifty P/E (%)
Current
10 Yr Avg
0
74
-40
-13
-53
-33
13
10
4
7
-34
4
76
32
-78
-53
Current
2.0
1.3
1.1
3.3
2.5
1.8
4.1
0.3
PB (x)
10 Yr Avg
2.0
1.5
1.2
3.3
1.8
2.8
3.0
0.8
Prem/Disc (%)
0
-11
-14
-2
41
-36
35
-64
Relative to Nifty P/B (%)
Current
10 Yr Avg
-18
-21
-47
-43
-57
-52
32
29
1
-31
-28
9
64
17
-88
-68
BULLS & BEARS | March 2020
19
 Motilal Oswal Financial Services
PSU Banks:
Business growth tepid; higher NCLT recoveries to aid earnings
PSU banks trade at a P/B of 0.7x, closer to the historical
average of 0.9x.
We see the consolidation of PSBs as a positive move from a
longer-term perspective, which will improve their
competitiveness. However, this will come with its own set
of challenges in the near term related to credit growth,
higher credit cost, integration issues, etc. Overall, the
operating performance remains sluggish led by higher
interest reversal and weak credit growth (barring SBIN).
On the asset quality front, slippages remain elevated in the
current challenging environment. However, recoveries in
NCLT cases are keeping asset quality ratios broadly stable.
Stress in telecom exposure will put further pressure on
banks’ asset quality.
PSBs capture higher market share in system deposits (69%),
and thus the impact of an increase in insurance coverage on
deposits will be relatively high (v/s private banks).
We do not consider PSBs to be value calls, apart from SBI
and BOB, which have relatively strong balance sheets and
are devoid of merger overhangs.
Company
Bank of Baroda
Bank of India
Canara Bank
Indian Bank
Punjab Natl.Bank
St Bk of India
Union Bank (I)
Current
6.1
NA
5.4
2.4
NA
8.2
NA
PE (x)
10 Yr Avg
7.8
7.8
10.6
9.6
7.6
14.3
8.2
Prem/Disc (%)
-22
-
-50
-75
-
-43
-
Relative to Nifty P/E (%)
Current
10 Yr Avg
-64
-57
-57
-68
-41
-86
-47
-58
-51
-21
-55
Current
0.5
0.3
0.4
0.2
0.5
1.0
0.3
PB (x)
10 Yr Avg
1.0
0.7
0.7
0.7
1.0
1.2
0.8
Prem/Disc (%)
-50
-54
-51
-69
-48
-15
-55
Relative to Nifty P/B (%)
Current
10 Yr Avg
-80
-62
-86
-71
-86
-72
-91
-73
-80
-62
-59
-54
-86
-71
2
1
1
0
PSU Banks P/B (x)
10 Yr Avg (x)
-40
-50
PSU Banks Relative to Nifty PB (%)
0.9
-60
0.7
-70
-65.3
-80
-69.8
Sector Performance
MoM: -11%
BULLS & BEARS | March 2020
20
 Motilal Oswal Financial Services
NBFCs:
Margin improvement across the board
NBFCs trade at a P/B of 3.3x, above the historical average
of 3.0x (10% premium).
Margins have improved across the board for NBFCs in
3Q, driven by stable-to-declining cost of funds.
In the M&HCV segment, some players believe the pain in
the segment likely to continue for 2-3 more quarters.
Price hikes of ~10% expected post BSVI implementation,
Recent SEBI guideline on advisory and distribution
business model demarcation is a step in the right
direction to increase transparency for the client.
In HFCs, HDFC and LICHF continue to witness healthy
retail loan growth (corporate growth remains muted).
The recent one-year extension for asset classification of
real estate projects should provide temporary relief.
The ground level situation for MFIs in north eastern
regions is stabilizing. Asset quality – a key monitorable.
In this environment, our top pick remains HDFC.
NBFC P/E (x)
29
23
17
11
5
19.1
21.9
10 Yr Avg (x)
40
20
0
-20
-40
NBFC Relative to Nifty PE (%)
30.4
5.7
5
4
3
2
NBFC P/B (x)
10 Yr Avg (x)
45
3.3
NBFC Relative to Nifty PB (%)
34.5
17.3
30
15
0
-15
3.0
Sector Performance
MoM: -9%
Company
Bajaj Finance
Chola. Invst. & Fin.
HDFC
IndoStar Capital
L&T Fin.Holdings
LIC Housing Fin.
M & M Financial
Muthoot Finance
PNB Housing
Shri.City Union.
Shriram Trans.
Current
33.3
14.5
38.5
11.4
7.3
5.5
11.9
11.0
4.9
7.8
8.5
PE (x)
10 Yr Avg
17.3
14.3
34.0
17.4
15.2
11.3
17.6
8.0
16.2
13.7
12.4
Prem/Disc (%)
93
1
13
-34
-52
-51
-33
37
-70
-43
-31
Relative to Nifty P/E (%)
Current
10 Yr Avg
98
-4
-14
-21
129
88
-32
-4
-57
-16
-67
-38
-29
-3
-35
-56
-71
-10
-54
-24
-49
-32
Current
6.7
2.6
4.0
0.8
1.2
0.8
1.7
2.6
0.6
1.1
1.3
PB (x)
10 Yr Avg
3.2
2.3
4.5
1.0
1.9
1.9
2.3
1.6
2.3
2.0
2.0
Prem/Disc (%)
108
12
-10
-24
-38
-58
-28
61
-72
-43
-34
Relative to Nifty P/B (%)
Current
10 Yr Avg
169
24
3
-12
61
72
-69
-62
-53
-28
-68
-28
-33
-11
7
-36
-74
-10
-55
-23
-48
-24
BULLS & BEARS | March 2020
21
 Motilal Oswal Financial Services
Capital Goods:
Expect execution to pick up in 4QFY20
Capital Goods sector trades at a one-year forward P/E
multiple of 19.2x, at a 32% discount to the 10-year average
of 28x.
Even on a P/B basis, the sector trades at a 25% discount to
the 10-year average multiple of 3.3x.
Valuation premium relative to the Nifty on a P/B basis has
narrowed – it now trades at a 1% discount v/s the 10-year
average premium of 26%. On a P/E multiple basis, the
premium has narrowed to 14% from the 10-year average
premium of 52%.
Valuations for companies have been impacted by (a) overall
slowdown in business activity and (b) pressure on the
operational performance due to the prevailing competitive
intensity and cost headwinds (rise in input cost).
67
47
27
7
28.0
19.2
Capital Goods P/E (x)
10 Yr Avg (x)
190
140
90
40
-10
13.8
52.4
Capital Goods Relative to Nifty PE (%)
7
5
3
1
Capital Goods P/B (x)
10 Yr Avg (x)
170
115
60
Capital Goods Relative to Nifty PB (%)
3.3
2.4
25.8
-1.3
5
-50
Sector Performance
Company
ABB
BHEL
Blue Star
Cummins India
Engineers India
Havells India
K E C Intl.
Larsen & Toubro
Siemens
Thermax
Voltas
Current
50.6
11.3
24.9
19.3
8.5
41.1
10.9
12.9
34.5
25.2
28.2
MoM: -12%
PE (x)
10 Yr Avg
72.2
24.5
30.3
27.0
19.4
29.3
15.4
22.4
49.8
32.0
24.1
Prem/Disc (%)
-30
-54
-18
-28
-56
40
-29
-42
-31
-21
17
Relative to Nifty P/E (%)
Current
10 Yr Avg
201
299
-33
35
48
67
15
49
-50
7
144
62
-35
-15
-24
24
105
175
50
77
68
33
Current
6.5
0.3
6.1
3.0
1.9
7.2
2.2
2.1
4.6
2.9
4.5
PB (x)
10 Yr Avg
6.4
1.8
7.4
5.7
3.8
6.4
2.1
2.9
6.1
4.0
3.4
Prem/Disc (%)
2
-82
-18
-47
-49
13
4
-28
-24
-27
33
Relative to Nifty P/B (%)
Current
10 Yr Avg
161
147
-87
-29
147
188
23
122
-23
45
191
147
-10
-17
-15
13
87
135
19
57
81
31
BULLS & BEARS | March 2020
22
 Motilal Oswal Financial Services
Cement:
Price hikes now in south
Cement sector trades at an EV/EBITDA of 13.4x, in line
with the historical average.
Prices have continued to rise in CY20, led by hikes in
south in Feb’20. All-India cement prices are up ~4%
QoQ (and 6% YoY) so far this quarter.
Regionally, on a QoQ basis, prices are up ~6% in east,
5% in north, 4% in central, 3% in west and 1% in south
(led by sharp hikes in Andhra Pradesh and Telangana).
Moreover, after falling in 3QFY20, costs should decline
further in 4QFY20 led by lower energy costs and
operating leverage benefits from seasonally higher
volumes, which should support a further improvement
in margins.
While petcoke price has increased by ~5% MoM in
Feb’20, it should not be inflationary in the near term.
Sector Performance
PE (x)
Company
10 Yr
Current
Avg
Prem/
Disc (%)
43
33
23
13
3
Cement P/E (x)
10 Yr Avg (x)
145
Cement Relative to Nifty PE (%)
23.3
22.9
90
35
-20
-75
24.3
38.6
4
3
2
1
Cement P/B (x)
10 Yr Avg (x)
30
10
Cement Relative to Nifty PB (%)
2.6
2.2
-10
-30
-50
0.6
-10.2
MoM: -6%
Relative to
Nifty P/E (%)
10 Yr
Current
Avg
PB (x)
10 Yr
Current
Avg
Prem/
Disc (%)
Relative to
Nifty P/B (%)
10 Yr
Current
Avg
EV/EBIDTA (x)
Current
10 Yr
Avg
Prem/
Disc (%)
Cement EV/EBDITA (x)
22
17
12
7
2
10 Yr Avg (x)
14.6
ACC
Ambuja
Cem.
Birla Corpn.
Grasim Inds
India Cem.
Shree Cem.
UltraTech
17.5
29.2
9.7
15.0
20.2
39.1
23.2
26.2
29.8
15.6
12.6
25.7
31.3
27.7
-33
-2
-38
20
-21
25
-16
4
74
-42
-11
20
132
38
45
65
-14
-31
42
73
53
2.0
1.8
1.0
1.0
0.5
5.5
2.8
2.9
2.6
1.1
1.7
0.7
4.5
2.8
-32
-33
-9
-39
-20
22
0
-21
-29
-60
-58
-78
120
13
12
1
-57
-34
-73
74
8
7.6
16.7
5.7
22.4
8.1
17.8
11.9
12.4
16.2
7.7
22.9
8.1
15.9
13.8
-39
3
-26
-2
-1
12
-14
13.4
BULLS & BEARS | March 2020
23
 Motilal Oswal Financial Services
Consumer:
Valuations off highs but still superior to long-term average
Consumer sector P/E of 37.2x in Feb’20 (38x in Jan’20) is at a
premium of 9% to its 10-year average of 34.1x. On a P/B
basis, the sector trades at 10.6x, a premium of 8% to its 10-
year average multiple of 9.8x.
From a demand standpoint, 3QFY20 was a soft quarter as the
impact of floods persisted in the early part of 3Q with
liquidity concerns and weak rural demand. Also, intense
competition in the form of promotions and price-offs meant
that benefits of low RM costs were not as high.
We are hopeful that a good Rabi crop (due to higher
reservoir levels following good monsoon) and govt. measures
to boost consumer sentiment would lead to growth from
2QFY21.
We expect volume growth to pick up off a low base led by a
potential improvement in demand post normal monsoon,
government efforts, and a good Rabi crop. Pace of recovery,
however, is likely to pick up only gradually.
55
45
35
25
15
37.2
34.1
Consumer P/E (x)
10 Yr Avg (x)
150
110
70
30
-10
Consumer Relative to Nifty PE (%)
121.1
89.3
15
13
10
8
5
Consumer P/B (x)
10 Yr Avg (x)
480
380
280
180
80
Consumer Relative to Nifty PB (%)
10.6
9.8
282.5
328.1
Sector Performance
Company
Asian Paints
Britannia Inds.
Colgate-Palm.
Dabur India
Emami
GlaxoSmith C H L
Godrej Consumer
Hind. Unilever
ITC
Jyothy Lab.
Marico
Nestle India
P & G Hygiene
Page Industries
Pidilite Inds.
United Breweries
United Spirits
Current
55.6
46.1
39.3
48.5
18.3
30.4
33.4
56.9
15.3
22.5
36.3
66.8
62.6
53.2
55.0
49.4
44.9
MoM: -6%
PE (x)
10 Yr Avg
40.2
34.3
36.9
34.3
31.5
29.8
35.7
39.2
26.1
37.0
35.1
45.4
48.7
44.8
34.4
71.3
94.8
Prem/Disc (%)
38
34
7
41
-42
2
-6
45
-41
-39
3
47
29
19
60
-31
-53
Relative to Nifty P/E (%)
Current
10 Yr Avg
230
122
174
90
133
104
188
90
9
74
81
65
99
97
238
116
-9
44
33
104
116
94
297
151
272
169
216
148
227
90
193
294
167
424
Current
14.6
15.3
27.1
12.7
4.9
7.6
7.4
59.1
3.6
3.3
9.2
70.3
29.5
25.7
12.9
8.0
10.3
PB (x)
10 Yr Avg
11.3
12.3
24.9
10.3
10.3
7.9
7.6
33.5
7.0
4.5
10.6
27.3
19.4
20.7
8.6
9.4
12.1
Prem/Disc (%)
29
24
9
24
-52
-4
-2
76
-49
-27
-13
158
52
24
50
-15
-15
Relative to Nifty P/B (%)
Current
10 Yr Avg
490
338
517
378
995
865
413
299
99
300
207
206
199
193
2286
1200
45
172
34
76
270
309
2738
957
1092
652
939
703
422
235
221
263
315
369
BULLS & BEARS | March 2020
24
 Motilal Oswal Financial Services
Healthcare:
Regulatory headwinds/disruption from China weigh on P/E multiple
After three months of gradual reduction, Healthcare P/E
discount to 10-year/3-year average has increased to 23%.
There has been sharp deceleration in the healthcare index
over recent past, negating the YTD returns .
Near-term events like RM supply disruption from China on
account of coronavirus, adverse regulatory headwinds
(particularly in case of Cipla/Aurobindo) and subdued 3Q
performance in US segment took a toll on healthcare index.
Domestic formulation segment continued to provide respite
with better return ratios and free cash flow visibility.
Accordingly, companies like Ajanta and Torrent are trading at
a premium to their 10-year average P/E.
Differentiated business model (Divis/BIOS) also led to
premium to their 10-year average.
We expect superior execution in domestic formulation,
robust ANDA pipeline with consistency in compliance, and
resolution of supply side issues from China to be key for an
improvement in healthcare P/E.
36
30
24
18
12
24.4
18.6
Healthcare P/E (x)
10 Yr Avg (x)
90
60
30
0
-30
Healthcare Relative to Nifty PE (%)
34.3
10.7
Healthcare P/B (x)
7
5
4
2
4.0
10 Yr Avg (x)
140
100
60
20
2.6
Healthcare Relative to Nifty PB (%)
57.5
4.6
-20
Sector Performance
Company
Aurobindo Pharma
Ajanta Pharma
Biocon
Cadila Health.
Cipla
Divi's Lab.
Dr Reddy's Labs
Glaxosmit Pharma
Glenmark Pharma.
Granules India
Ipca Labs.
Jubilant Life
Laurus Labs
Lupin
Sun Pharma.Inds.
Strides Shasun
Torrent Pharma.
Current
8.2
23.1
29.5
15.1
16.6
32.6
20.6
38.7
9.9
9.8
21.9
7.7
16.1
18.5
17.8
12.6
29.7
MoM: -3%
PE (x)
10 Yr Avg
14.1
16.9
26.9
22.0
28.1
22.6
25.3
50.4
23.6
10.8
25.4
13.1
29.4
27.0
29.6
61.4
21.2
Prem/Disc (%)
-42
36
10
-31
-41
44
-19
-23
-58
-10
-14
-41
-45
-31
-40
-79
40
Relative to Nifty P/E (%)
Current
10 Yr Avg
-51
-22
37
-6
75
49
-10
22
-1
55
94
25
22
40
130
179
-41
30
-42
-40
30
40
-54
-28
-4
63
10
49
6
64
-25
239
76
17
Current
1.5
4.1
4.6
2.1
1.8
6.0
2.8
11.0
1.1
2.0
4.0
1.2
2.2
2.6
1.9
1.3
6.0
PB (x)
10 Yr Avg
2.9
4.5
3.3
4.8
3.3
4.8
3.9
11.0
4.0
1.7
3.2
1.6
2.9
4.6
4.6
3.2
4.6
Prem/Disc (%)
-47
-9
40
-55
-47
25
-28
0
-72
14
24
-25
-26
-44
-59
-58
28
Relative to Nifty P/B (%)
Current
10 Yr Avg
-39
11
64
73
85
27
-13
87
-29
28
142
86
13
50
345
328
-54
56
-21
-34
61
25
-51
-37
-13
13
4
78
-25
76
-46
25
141
80
BULLS & BEARS | March 2020
25
 Motilal Oswal Financial Services
Infrastructure:
NHAI ordering key monitorable in 4QFY20
Infrastructure sector trades at a P/B of 0.7x, at a 60%
discount to the historical average.
Post weak ordering activity in FY19 (-67% YoY), business
momentum is now likely to pick up given the re-election
of a stable government at the center. The government
has drawn out massive infrastructure development
plans with expected investment of INR100t by 2024.
Pipeline of projects in the road infrastructure segment
remains strong and players expect momentum to pick
up from 4QFY20.
If plans get implemented in a timely manner, we expect
strong business opportunity for all players in the sector.
This in turn should lead to an improvement in the
operational performance, and thus, re-rating of the
sector.
IRB Infra, Ashoka and Sadbhav trade at a discount to
their historical P/B, while KNR trades at a premium.
32
24
16
8
0
Infrastructure P/E (x)
10 Yr Avg (x)
60
20
-20
9.1
-60
-100
-32.3
-45.8
Infrastructure Relative to Nifty PE (%)
12.2
Infrastructure P/B (x)
4
2
1
0
1.6
10 Yr Avg (x)
0
-25
-50
Infrastructure Relative to Nifty PB (%)
-37.2
-73.4
0.7
-75
-100
Company
Ashoka Buildcon
IRB Infra.Devl.
KNR Construct.
Sadbhav Engg.
Current
7.3
10.3
13.4
6.3
PE (x)
10 Yr Avg
13.3
10.7
8.8
25.5
Prem/Disc (%)
-
-4
53
-75
Relative to Nifty P/E (%)
Current
10 Yr Avg
-
-26
-39
-41
-21
-52
-63
41
Current
0.9
0.4
2.0
0.4
PB (x)
10 Yr Avg
1.6
1.5
1.5
2.5
Prem/Disc (%)
-43
-73
33
-86
Relative to Nifty P/B (%)
Current
10 Yr Avg
-63
-38
-83
-41
-21
-43
-86
-3
BULLS & BEARS | March 2020
26
 Motilal Oswal Financial Services
Media:
Lack of clarity over TRAI’s new order
Media sector P/E of 12.5x is at ~45% discount to the 10-
year historical average of 22.5x.
TRAI in Jan’20 has modified norms over pricing for
bouquet offerings and channels forming part of the
bouquet. As a result, broadcasters are yet to modify their
offerings.
Broadcasters have revolted against the new regulations
and there is uncertainty over the final outcome.
Print companies have seen stabilization in circulation
revenue but continued downtrend in ad revenue due to
lower ad spends.
Media P/E (x)
43
31
19
7
12.5
22.5
10 Yr Avg (x)
100
50
0
-50
Media Relative to Nifty PE (%)
25.0
-26.0
Media P/B (x)
6
5
4
2
1
4.2
10 Yr Avg (x)
130
90
50
Media Relative to Nifty PB (%)
63.6
2.1
10
-30
-13.6
Company
Ent.Network
Jagran Prakashan
PVR
Sun TV Network
Zee Entertainmen
Current
8.3
5.3
30.0
10.4
12.5
PE (x)
10 Yr Avg
38.8
14.6
36.4
19.7
26.7
Prem/Disc (%)
-79
-63
-17
-47
-53
Relative to Nifty P/E (%)
Current
10 Yr Avg
-50
115
-68
-20
78
101
-38
9
-26
47
Current
0.8
0.8
4.7
2.3
2.0
PB (x)
10 Yr Avg
3.0
3.0
3.7
4.8
5.5
Prem/Disc (%)
-71
-73
28
-53
-64
Relative to Nifty P/B (%)
Current
10 Yr Avg
-66
15
-68
15
89
42
-9
87
-20
112
BULLS & BEARS | March 2020
27
 Motilal Oswal Financial Services
Metals:
LME Aluminum prices decrease
Metals sector trades at a P/B of 0.8x, below its historical
average of 1.2x. EV/EBITDA at 5.8x is at a 21% discount
to its historical average.
Average domestic flat steel prices rose to ~INR39,060 in
the month from ~INR38,480 last month. Long steel prices
were quite lower at an average of ~INR34,978.
Average LME aluminum prices have gone down
significantly during the month. Average zinc prices have
been slightly lower than last month.
We remain positive on JSW Steel given its strong growth
outlook. Hindalco is well placed to benefit from low-cost
captive raw materials.
25
20
15
10
5
12.1
8.4
Metals P/E (x)
10 Yr Avg (x)
15
-5
-25
-45
-65
Metals Relative to Nifty PE (%)
-32.7
-50.3
3
2
1
0
Metals P/B (x)
10 Yr Avg (x)
20
-5
Metals Relative to Nifty PB (%)
1.2
0.8
-30
-55
-80
-52.6
-68.5
Sector Performance
MoM: -13%
PE (x)
Company
Current
10 Yr
Avg
Prem/
Disc (%)
Relative to
Nifty P/E (%)
10 Yr
Current
Avg
PB (x)
Current
10 Yr
Avg
Prem/
Disc (%)
Relative to
Nifty P/B (%)
10 Yr
Current
Avg
EV/EBIDTA (x)
Current
10 Yr
Avg
Prem/
Disc (%)
Metals EV/EBDITA (x)
10
8
5
3
7.3
10 Yr Avg (x)
Hind.Zinc
Hindalco
Inds.
Jindal Steel
JSW Steel
Nalco
NMDC
SAIL
Tata Steel
Vedanta
10.3
7.1
NA
8.1
13.4
5.3
NA
6.6
8.7
10.4
9.8
16.5
13.1
16.2
10.2
15.7
15.7
11.1
-1
-27
-38
-17
-48
-58
-22
-39
-58
-52
-20
-68
-61
-49
-43
-46
-9
-28
-11
-44
-13
-13
-39
1.8
0.8
0.5
1.3
0.6
0.9
0.4
0.6
0.6
2.3
1.3
1.3
1.4
1.2
2.2
0.9
1.5
2.0
-22
-41
-65
-6
-48
-59
-58
-59
-68
-29
-69
-82
-48
-76
-64
-85
-75
-74
-13
-50
-49
-46
-55
-15
-67
-42
-23
5.0
5.3
5.3
6.7
3.9
3.2
9.8
6.0
5
6.2
7.3
10.4
7.8
7.9
6.6
14.4
7.6
5
-20
-28
-49
-13
-51
-51
-32
-21
2
5.8
BULLS & BEARS | March 2020
28
 Motilal Oswal Financial Services
Oil & Gas:
Diesel cracks revival owing to IMO implementation fails
Oil & Gas sector trades at a P/B of 1.3x (near the
historical average of 1.5x) and a P/E of 9.6x (at ~16%
discount to the long-term average of 11.4x).
Brent prices for the month declined to an average of
~USD55/bbl (v/s ~USD64/bbl in Jan’20 and USD62/bbl in
3QFY20) owing to concerns about coronavirus outbreak.
Refining margins improved to an average of USD3.2/bbl
(v/s USD0.4/bbl in Jan’20 and USD1.6/bbl in 3QFY20),
primarily due to a sharp decline in refinery run-rates.
Improvement was largely due to better fuel oil cracks,
with a marginal improvement in gasoline and naphtha
cracks, while gasoil still hovers at ~USD10/bbl.
Indian refiners with lower FO yield are likely to see lower
benefit from SGRM improvement. However, marketing
margins were healthy.
Petchem margins improved ~30-40% QoQ, led by reduced
production in China owing to the outbreak of virus.
The recent directive from NGT to curb air pollution can
lead to huge replacement demand for gas.
18
15
12
9
6
11.4
9.6
Oil & Gas P/E (x)
10 Yr Avg (x)
-8
-23
-38
-53
-68
-35.5
-43.2
Oil & Gas Relative to Nifty PE (%)
3
2
2
1
1
Oil & Gas P/B (x)
10 Yr Avg (x)
0
-25
1.3
Oil & Gas Relative to Nifty PB (%)
1.5
-42.2
-48.1
-50
-75
Sector Performance
Company
Aegis Logistics
BPCL
GAIL (India)
Guj.St.Petronet
HPCL
IOCL
Indraprastha Gas
MRPL
ONGC
Petronet LNG
Reliance Inds.
Current
20.3
9.5
8.4
12.1
4.6
5.9
25.2
8.2
3.5
11.7
12.9
MoM: -9%
PE (x)
10 Yr Avg
23.9
10.1
14.2
11.6
17.6
9.6
16.0
12.8
9.8
12.6
12.3
Prem/Disc (%)
-15
-6
-41
4
-74
-38
57
-36
-64
-7
5
Relative to Nifty P/E (%)
Current
10 Yr Avg
20
32
-44
-44
-50
-22
-28
-36
-73
-3
-65
-47
50
-12
-51
-29
-79
-46
-30
-30
-23
-32
Current
4.3
1.8
1.0
1.7
0.8
0.8
5.3
0.7
0.5
3.1
1.6
PB (x)
10 Yr Avg
3.4
1.7
1.8
1.7
1.2
1.1
3.4
1.5
1.3
2.7
1.4
Prem/Disc (%)
25
4
-45
-2
-31
-32
56
-58
-66
17
17
Relative to Nifty P/B (%)
Current
10 Yr Avg
74
33
-29
-34
-61
-32
-33
-34
-66
-53
-69
-56
112
31
-74
-40
-81
-48
26
4
-45
-34
BULLS & BEARS | March 2020
29
 Motilal Oswal Financial Services
Retail:
EOSS could provide some relief
Retail sector trades at a P/E of 60.6x, at ~29% premium
to the 10-year historical average.
As the EOSS is over, we expect to see some impact on
sales. However, margins should improve given the
higher prices.
We expect SSSG to remain either flat or low single digit
amidst ongoing consumer slowdown.
Valuations, however, remain rich given the sector’s long-
term growth potential.
14
10
6
2
92
70
48
26
4
47.1
Retail P/E (x)
10 Yr Avg (x)
60.6
590
430
270
110
-50
164.8
Retail Relative to Nifty PE (%)
259.8
Retail P/B (x)
10 Yr Avg (x)
10.7
6.3
450
300
150
0
Retail Relative to Nifty PB (%)
333.3
141.9
Company
Aditya Birla Fashion
Avenue Supermarts
Future Lifestyle
Future Retail
Jubilant
Shoppers Stop
Titan
Trent
V-Mart Retail
Current
59.5
81.9
41.9
18.7
50.9
45.2
56.1
96.8
36.4
PE (x)
10 Yr Avg
129.9
75.1
48.1
29.2
62.1
51.7
39.0
87.0
29.0
Prem/Disc (%)
-54
9
-13
-36
-18
-13
44
11
25
Relative to Nifty P/E (%)
Current
10 Yr Avg
253
618
387
315
149
166
11
62
203
243
169
186
233
115
475
380
116
60
Current
10.7
16.8
2.8
2.1
13.3
3.2
15.6
8.1
6.7
PB (x)
10 Yr Avg
10.2
13.6
2.4
4.6
12.2
5.2
10.3
3.9
5.0
Prem/Disc (%)
5
24
17
-55
9
-38
51
110
32
Relative to Nifty P/B (%)
Current
10 Yr Avg
330
294
578
426
14
-7
-17
77
437
372
30
103
531
300
227
50
169
96
BULLS & BEARS | March 2020
30
 Motilal Oswal Financial Services
Technology:
First order impact of COVID 19 to be limited to a few Tier II companies
Technology sector is trading at a P/E of 17.2x, at a 2%
premium to its historical average of 16.9x.
Growth momentum was impacted by higher-than-usual
seasonal weakness in 3QFY20, with Tier 1 ( ex. TechM)
reporting 6.8% YoY organic growth v/s 9.9% last year.
Polarised performance was seen in mid-cap companies: LTI
and PSYS reported strong growth, while ZENT and CYL saw a
revenue decline.
Exposure of Tier I companies to the COVID 19’s highly
impacted geographies like China is limited. Also, their
exposure to verticals like Travel, Transportation and
Hospitality within APAC is limited. Overall for Tier 1, we
expect 1% EPS impact over 1HCY20.
Exposure of some Tier II companies (e.g. Mindtree,
Hexaware and NIIT Technologies) to Travel, Transportation
and Hospitality verticals is meaningful and we estimate
worst-case earnings impact of up to ~5% for these
companies.
We remain positive on INFO and HCLT in Tier 1. In mid-caps,
we remain positive on LTI, MTCL and HEXW.
23
19
15
11
7
Technology P/E (x)
10 Yr Avg (x)
16.9
17.2
40
20
0
-20
-40
Technology Relative to Nifty PE (%)
-5.4
2.3
6
5
4
3
2
Technology P/B (x)
4.4
10 Yr Avg (x)
150
4.7
Technology Relative to Nifty PB (%)
100
50
0
69.4
91.6
Sector Performance
Company
Cyient
HCL Technologies
Hexaware Tech.
Infosys
MphasiS
NIIT Tech.
TCS
Tech Mahindra
Wipro
Zensar Tech.
Current
10.5
11.9
14.9
17.2
13.7
19.4
21.2
13.1
12.1
13.7
MoM: -6%
PE (x)
10 Yr Avg
12.5
13.3
13.8
17.3
12.9
11.1
19.4
12.7
15.0
11.3
Prem/Disc (%)
-16
-10
8
0
6
75
9
4
-19
21
Relative to Nifty P/E (%)
Current
10 Yr Avg
-37
-31
-29
-27
-12
-24
2
-4
-18
-29
15
-39
26
7
-22
-30
-28
-17
-18
-37
Current
1.6
2.6
3.4
5.1
2.7
4.0
8.2
2.8
2.2
1.3
PB (x)
10 Yr Avg
2.1
3.2
3.4
4.1
2.3
1.9
6.6
2.7
2.8
1.9
Prem/Disc (%)
-25
-19
1
24
20
108
24
5
-22
-30
Relative to Nifty P/B (%)
Current
10 Yr Avg
-37
-19
4
23
38
31
107
60
11
-11
61
-26
229
154
13
3
-10
10
-46
-25
BULLS & BEARS | March 2020
31
 Motilal Oswal Financial Services
Telecom:
AGR dues payment an overhang
Telecom sector is trading at an EV/EBITDA of 8.5x, at ~4%
premium to its 10-year historical average.
The SC in Feb’20 rejected the telcos’ modification plea
over the AGR case and compelled DoT to raise demand
notice with immediate deadline. Subsequently,
Bharti/VIL paid INR100b/INR35b of their AGR dues.
RJio launched new plans with revision in tariff prices for
low-ARPU customers, leading to a price hike of ~31%.
Other telcos might take a price hike too, which will need
to be monitored, and will be a key positive for the
industry.
15
13
10
8
5
8.2
8.5
Telecom EV/EBDITA (x)
10 Yr Avg (x)
4
3
2
1
Telecom P/B (x)
10 Yr Avg (x)
3.3
2.2
Telecom Relative to Nifty PB (%)
70
35
0
-35
-70
-14.0
32.7
PE (x)
Company
Bharti Airtel
Idea Cellular
Tata Comm
Current
NA
NA
14.8
10 Yr Avg
34.3
16.8
18.9
Prem/Disc (%)
NA
-
-22
Relative to Nifty P/E (%)
Current
NA
-
-12
10 Yr Avg
89
-7
4
Current
3.2
4.0
12.6
PB (x)
10 Yr Avg
2.1
1.3
11.3
Prem/Disc (%)
49
202
11
Relative to Nifty P/B (%)
Current
28
59
408
10 Yr Avg
-17
-49
339
BULLS & BEARS | March 2020
32
 Motilal Oswal Financial Services
Utilities:
Conventional electricity generation up 2% YoY in Jan’20
Utilities trade at a P/B of 1.2x, at a 40.5% discount to its
historical average.
Barring CESC, all stocks under our coverage are trading at
a discount to their historical average P/B.
Short-term power prices were 2% lower MoM at
INR2.86/kWh in Jan’20.
Conventional electricity generation increased 2% YoY in
Jan’20.
19
16
13
10
7
12.7
7.5
Utilities P/E (x)
10 Yr Avg (x)
10
-15
-40
-65
-27.5
-55.6
Utilities Relative to Nifty PE (%)
3
2
2
1
1
Utilities P/B (x)
10 Yr Avg (x)
35
10
-15
1.2
Utilities Relative to Nifty PB (%)
2.0
-40
-65
-23.1
-52.9
Sector Performance
MoM: -10%
Company
CESC
Coal India
JSW Energy
NHPC
NTPC
Power Grid Corpn
Torrent Power
Tata Power
Current
6.6
6.7
9.6
7.1
7.3
8.1
10.8
10.0
PE (x)
10 Yr Avg
10.8
13.4
16.0
10.6
13.4
11.9
16.1
24.6
Prem/Disc (%)
-38
-50
-40
-33
-46
-32
-33
-59
Relative to Nifty P/E (%)
Current
10 Yr Avg
-61
-41
-60
-26
-43
-12
-58
-41
-57
-26
-52
-34
-36
-11
-40
36
Current
0.8
2.9
0.7
0.6
0.8
1.3
1.3
0.7
PB (x)
10 Yr Avg
0.8
5.9
1.5
0.9
1.5
1.7
1.4
1.8
Prem/Disc (%)
0
-50
-51
-30
-42
-23
-6
-61
Relative to Nifty P/B (%)
Current
10 Yr Avg
-68
-69
19
130
-71
-43
-75
-66
-66
-44
-46
-32
-46
-45
-72
-31
BULLS & BEARS | March 2020
33
 Motilal Oswal Financial Services
NOTES
 Motilal Oswal Financial Services
Motilal Oswal Securities Limited
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BUY
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Rating may undergo a change
We have forward looking estimates for the stock but we refrain from assigning recommendation
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