Strategy
India Strategy
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Result review 4QFY19; Financials drive performance;
Consumption
drags
Nifty EPS stable; Broader universe see more downgrades than upgrades
Refer our Mar-19
Quarter Preview
The 4QFY19 corporate earnings-report season was in line with our expectations for
both the Nifty and the MOFSL Universe. Domestic Cyclicals continued driving earnings
growth for the second consecutive quarter, led by Financials, which contributed
almost the entire earnings delta but still fell short of expectations.
Sales/EBITDA/profit growth for the Nifty came in at 10.2%/6.1%/15.8% v/s
expectations of 11.1%/3.4%/16.8%. For the MOFSL Universe, sales/EBITDA/profit
growth stood at 10.6%/7.3%/23.6% v/s expectations of 11.5%/5.1%/29.4%.
Sales growth for the MOFSL Universe was the slowest since Dec’16, dragged by
Commodities like Metals and O&G. EBITDA growth stood in-line at 7%. Notably, the
EBITDA margin for the MOFSL (ex-Financials & OMCs) Universe shrank by 100bp to
19.1%, dragged by Automobiles, Consumer, Metals, O&G and Telecom. On the other
hand, Cement and Utilities delivered YoY expansion in the operating margin.
Corporate Banks continued reporting an improvement in the slippage/asset quality
trends.
NBFC Universe delivered a better-than-expected performance in a very crucial quarter
for them. However, we note that the performance was divergent across companies.
Bajaj Finance was an outlier, showing no signs of liquidity problems, while most other
players continued facing liquidity stress and posted a moderation in disbursement
growth.
Telecom delivered its seventh consecutive quarter of loss, while profits for
Automobiles and Metals declined by 16% and 11% YoY, respectively, but came in
better than estimates. Pharma performance was weaker than expected with only 7%
profit growth.
Consumer, Cement and Capital Goods posted largely in-line 10%, 13% and 13% profit
growth, while our Mid-cap universe surprised with solid 45% profit growth.
Domestic Cyclicals drove the quarterly performance, led by Financials. Defensives’
growth was dragged by Telecom losses, while Global Cyclicals posted flattish growth
with Metals and Oil & Gas delivering better-than-expected numbers.
Nifty EPS estimates stable for FY20; broader universe continues witnessing more
downgrades than upgrades: Nifty EPS grew 7% to INR481 in FY19. Our Nifty FY20/21
EPS estimates remain unchanged at INR604/706, building in growth of 25.6%/16.9%.
However, the direction of earnings revision for the broader markets still remains
downward, with 55 companies in the MOFSL Universe witnessing an earnings cut of
5%+ and 28 companies witnessing upgrades of 5%+. For the MOFSL Universe, at the
sectoral level, PSU Banks and Capital Goods saw upward earnings revision of 19% and
3%, respectively, while Consumer, Pharma and Metals have seen cuts of 4%, 5% and
4%, respectively. Upwards revision in PSU banks is largely attributed to the shifting of
provision write-backs pertaining to NCLT cases from 4QFY19 to FY20.
Top upgrades (FY20E): UPL, SBI, Tata Motors and Tata Steel have seen EPS upgrades of
32.4%, 23.3%, 13.8% and 9.3%, respectively.
Top downgrades (FY20E): Asian Paints, Hindalco, Sun Pharma and Bharti Infratel have
seen EPS downgrades of 16.5%, 12.9%, 8.8% and 7.9%, respectively.
Macro stress evident but markets could climb the wall of worry: Post the election
verdict in which the BJP came back to power with a thumping majority, market
sentiment has improved even as underlying macros have weakened with GDP growth
coming in at a 20-quarter low. Deceleration in core sector growth, weakness in high-
Gautam Duggad – Research Analyst
(Gautam.Duggad@MotilalOswal.com); +91 22 6129 1522
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
June 2019
Investors are advised to refer through important disclosures made at the last page of the Research Report.
1

Strategy
frequency indicators (IIP, Auto Monthly numbers) and slowdown in consumption as
highlighted by consumer companies in their quarterly commentaries point toward
near-term earnings headwinds. Valuations for the Nifty, meanwhile, remain rich at
20x FY20E EPS. At the margin, crude oil prices have corrected ~USD10/barrel, even as
inflation remains under control, paving the way for another rate cut in the
forthcoming RBI monetary policy. 10-year G-Sec yield has corrected below 7%. We
expect the government to take measures in the next 100 days to bolster growth.
Valuations: Positive sentiment, expectations of reforms and a potential revival in
domestic flows could keep valuations rich, in our view. Mid-caps provide a good
opportunity given their underperformance v/s large-caps over the last 12/18 months.
At ~20x FY20 EPS, Nifty is trading at 15% premium to long period average. Optimism
on stable government and potential reforms, earnings recovery and FII flows has
driven Nifty to an all-time high. However, broader markets (Nifty mid-cap / smallcap
indices), despite their recent run; have underperformed the Nifty materially in the last
12/18 months. Nifty Mid-cap 100 has underperformed Nifty by 16%/26% in 12/18
months while Nifty smallcap 100 has underperformed Nifty by 27%/41%. We believe,
this divergence should get corrected as liquidity environment gets better, domestic
flows into equities pick up and earnings trend look up.
Top Ideas: Large-caps: SBI, ICICI Bank, Maruti, L&T, Infosys, Bharti Airtel, Coal India,
Titan, Ultratech, HDFC Life
Mid-caps: Federal Bank, Indian Hotels, Siemens, ABFRL, Crompton Consumer, Ashoka
Buildcon, JK Cement, Godrej Agrovet, Oberoi Realty
Exhibit 1: Preferred large-cap ideas
Mkt Cap CMP
Company
Infosys
State Bank
ICICI Bank
Larsen & Toubro
Maruti Suzuki
Coal India
Bharti Airtel
Ultratech Cement
Titan Company
HDFC Life Insur.
(USD b)
48.3
45.1
39.2
31.3
29.7
22.6
20.0
18.7
15.7
12.7
(INR)
737
353
423
1,558
6,864
253
349
4,758
1,234
441
FY19
37.5
2.6
5.2
61.4
247.7
28.3
-8.8
89.4
15.7
6.3
EPS
EPS
(INR)
CAGR (%)
FY20E FY21E FY19-21
38.5 44.2
8.5
33.5 37.3
280.7
21.2 28.5
133.7
76.9 96.1
25.1
277.3 334.4
16.2
29.2 31.2
4.8
-5.4
-2.2
Loss
113.0 153.6
31.0
20.3 26.2
29.3
7.1
8.8
17.8
PE
PB
RoE
(x)
(x)
(%)
FY19 FY20E FY21E FY19 FY20E FY21E FY19 FY20E FY21E
19.6 19.1 16.7
4.9
5.0
4.6
25.0 25.8 28.8
136.8 10.5
9.4
1.4
1.3
1.1
0.4
13.4 13.2
81.0 20.0 14.8
2.6
2.3
2.1
3.2
12.4 15.0
25.4 20.3 16.2
3.5
3.1
2.7
14.6 16.3 18.0
27.7 24.7 20.5
4.5
4.2
3.8
16.3 16.4 18.1
8.9
8.7
8.1
5.9
5.1
4.5
66.0 59.2 55.4
NA
NA
NA
2.0
1.9
1.9
-5.0
-3.4
-1.2
53.2 42.1 31.0
4.7
3.8
3.4
9.1
10.1 11.5
78.7 60.9 47.1 18.0 17.3 14.4 24.9 29.0 33.4
69.7 61.8 50.2
4.8
4.0
3.4
20.3 20.6 18.2
Source: Company, MOFSL
Exhibit 2: Preferred mid-cap ideas
Mkt Cap CMP
Company
(USD b) (INR)
Siemens
6.5
1,272
Federal Bank
3.1
107
Oberoi Realty
2.9
563
Indian Hotels
2.7
158
Aditya Birla Fashion
2.3
212
CG Consumer Elect.
2.1
237
Godrej Agrovet
1.4
509
J K Cements
1.2
1,040
Ashoka Buildcon
0.6
143
EPS
EPS
(INR)
CAGR (%)
FY19 FY20E FY21E FY19-21
25.1 32.5 34.0
16.4
6.3
8.0
10.0
26.0
22.5 33.5 35.0
24.7
2.4
3.2
4.4
36.0
1.6
3.7
5.4
81.9
6.0
7.6
9.0
22.9
12.5 15.6 19.1
23.4
34.1 41.9 52.7
24.3
11.9 13.0 15.4
14.0
PE
PB
RoE
(x)
(x)
(%)
FY19 FY20E FY21E FY19 FY20E FY21E FY19 FY20E FY21E
50.7 39.1 37.4
5.5
5.0
4.5
11.2 13.3 12.7
17.0 13.5 10.7
1.6
1.5
1.3
9.8
11.4 12.9
25.1 16.8 16.1
2.6
2.2
2.0
11.6 14.2 13.1
67.2 50.0 36.3
4.3
4.1
3.7
6.6
8.4
10.7
128.5 56.8 38.8 11.4
9.5
7.6
10.1 18.3 21.9
39.8 31.0 26.3 13.5 10.8
8.7
39.6 38.7 36.7
40.6 32.6 26.6
5.9
5.3
4.7
15.7 17.2 18.7
30.5 24.8 19.7
3.0
2.7
2.4
11.3 11.5 13.0
12.0 11.0
9.2
1.8
1.6
1.4
16.1 15.3 15.9
Source: Company, MOFSL
June 2019
2

Strategy
Exhibit 3: Profit growth led by Financials and IT, whereas Autos and Telecom dragged
Sector
Sales
EBITDA
(no of companies)
High growth sectors
Others (23)
Media (7)
Logistics (2)
Banks - Private (11)
NBFC (13)
Technology (14)
Med/Low growth sectors
Cement (10)
Capital Goods (13)
Retail (2)
Consumer (19)
Healthcare (20)
Oil & Gas (14)
Utilities (8)
PAT de-growth sectors
Life Insurance (2)
Metals (9)
Automobiles (16)
Infrastructure (4)
Banks - PSU (4)
Telecom (4)
MOFSL Universe (195)
MOFSL Univ Ex OMCs (192)
MOFSL Ex Corp Banks (189)
Sensex (30)
Nifty (50)
Nifty Ex Corp Banks (47)
Mar- 19
2,149
395
52
35
371
182
1,115
7,735
327
771
58
511
455
4,854
759
4,462
203
1,629
1,837
50
340
402
14,345
11,664
13,872
6,678
10,317
9,954
Chg. % Chg. %
QoQ YoY
2
4
-5
3
4
4
1
-3
12
26
-15
0
-1
-9
3
7
41
4
9
18
2
1
0.4
2.6
0.4
1.6
-0.2
-0.3
19
23
19
12
22
17
17
11
14
10
18
10
13
12
3
6
16
6
0
31
19
21
10.6
10.7
10.3
9.5
10.2
9.9
Var.
over
Exp. (%)
0
0
5
-4
1
6
-1
-2
3
-1
3
-2
-1
-4
8
1
2
3
-1
9
0
-1
-0.8
-1.2
-0.9
-2.1
-0.8
-0.9
Mar- Chg. % Chg. %
19
QoQ YoY
782
73
17
5
296
136
256
1,231
61
98
6
122
89
578
278
888
10
311
199
12
249
106
2,901
2,708
2,539
1,755
2,308
2,026
0
17
-14
10
-2
2
-2
17
26
46
-22
0
-8
26
9
11
83
0
17
9
22
9
10.0
3.5
9.6
4.2
10.0
9.3
15
35
18
16
9
24
14
8
20
7
6
7
15
7
6
0
49
-8
-14
23
29
0
7.3
7.5
5.9
4.9
6.1
6.4
Var.
over
Exp. (%)
-2
3
7
-2
-4
1
-3
4
1
-3
-13
-4
-6
8
8
3
31
6
-6
11
4
7
2.1
0.2
1.8
1.0
2.6
2.0
PAT
EBIDTA Margin
Var.
Mar- 19
over
(%)
Exp. (%)
-4
36.4
22
18.6
-8
31.9
15
14.1
-28
79.9
12
74.6
2
22.9
4
15.9
5
18.7
3
12.7
-9
10.4
2
23.8
-10
19.6
5
11.9
8
36.6
-32
19.9
-7
4.9
29
19.1
18
10.8
7
24.3
PL
73.3
15
26.3
-4.5
20.2
-8.8
23.2
4.5
18.3
-5.7
26.3
-0.8
22.4
3.4
20.4
Chg.
YoY bp
-114
168
-19
49
-989
377
-53
-44
99
-25
-117
-73
35
-56
115
-117
112
-295
-181
-153
609
-543
-61
-68
-76
-116
-86
-67
Mar- Chg. % Chg. %
19
QoQ YoY
436
-3
38
35
8
-29
4
34
95
-26
92
18
199
0
659
21
30
44
61
55
4
-16
87
3
49
-10
304
26
124
23
136
-22
6
15
124
5
99
55
4
4
-51
PL
-47
Loss
1,231 5.6
1,109 -3.7
1,257 15.9
749 -2.5
1,010 6.4
976 11.4
23
45
34
33
29
26
15
7
13
13
12
10
7
7
3
420
-9
-11
-16
-12
Loss
Loss
23.6
23.3
0.7
16.4
15.8
1.7
Exhibit 4: MOFSL Universe PAT boosted by a low base
94
67
34
4
-38
-4
-10
6
0
6
-5
-10
8 2 5
-7
15
2 7
15 1417 15
-6
-7
3 2
24
Exhibit 5: Nifty PAT posted in-line 16% YoY growth
.
.
Exhibit 6: MOFSL Universe (Ex Corp Banks) PAT chg. YoY (%)
MOFSL Univ. ex Corp Banks PAT change YOY (%)
15.9
10.1
2.8
4.4
5.9
10.1
6.8
12.3
14.8
Exhibit 7: Nifty (Ex-Corp Banks) PAT change YoY (%)
Nifty Ex Corp. Banks PAT change YOY (%)
15.2
9.3
3.4
1.4
FY14
FY15
FY16
FY17
FY18
FY19 FY20E FY21E
.
16.4
13.6
9.8
8.7
10.5
FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20E FY21E
FY13
June 2019
3

Strategy
Ten focus stocks from 4QFY19 earnings season
SBI:
Loan growth stood at 13% YoY/7% QoQ, driven by growth of 27.9% YoY in home
loans and 15% YoY in the corporate book. Further, it expects loan growth of 12%-
14% in FY20. Slippages moderated to INR79.6b, which, coupled with healthy
recoveries and higher write-offs, led to an asset quality improvement. Overall, the
bank expects recoveries of INR350b-380b in FY20. It expects the credit cost trend to
moderate significantly, going forward.
ICICI Bank:
Retail loan mix now stands at 60.2% (+120bp QoQ). Fresh slippages
stood at INR35.5b, but healthy recoveries/upgrades of INR15.2b and write-offs of
INR73.2b drove a 105bp/52bp QoQ decline in the GNPL/NNPL ratios to 6.7%/2.06%.
The quantum of BB and below assets declined to INR175.2b (-7% QoQ). ICICIBC
expects credit cost to normalize significantly from FY20. It maintained its
consolidated RoE target of 15% by June’20.
L&T:
Consol. revenue grew 10.5% YoY to INR449b on a strong base of last year,
taking full-year revenue growth to 18% (v/s guidance of 12-15%). EBITDA margin
shrank 80bp YoY on account of one-off provisions in the core E&C business. 4QFY19
did not witness any slowdown in execution/order inflow on account of scheduled
elections in April-May. LT remains our top pick in the capital goods sector.
Ultratech:
The company stabilized operations of Binani’s assets, which operated at
72% utilization in Mar’19. Overall volumes for UTCEM grew 15% YoY to 21.3mt. The
company successfully ramped up profitability of Binani’s assets, which achieved
EBITDA/t of INR830 (excluding one offs), an improvement of INR740/t. With various
cost-efficiency programs, cost/t for UTCEM declined 2% YoY. Thus, EBITDA/t
increased 13% YoY to INR1,039. Consequently, EBITDA increased 30% YoY to
INR22b, with the margin expanding 2.2pp YoY to 21.1%. Adj. PAT was up 42.5% YoY
at INR10.1b.
Maruti:
Maruti’s EBITDA remained under pressure due to factors such as inventory
de-stocking at the company (-50bp QoQ), Gujarat new line & engine plant fixed cost
(-70bp QoQ), Gujarat plant depreciation (-50bp), Fx (-60bp QoQ) and conversion
cost inflation (-50bp QoQ). We believe that MSIL will see the full impact of
headwinds on both volumes and margins over 1HFY20. We estimate FY20 volume
growth of 6%, which will be highly influenced by spread out of monsoon and new
product launch. Despite headwinds, EBITDA margin will likely expand by 30bp to
12.9% in FY20, as price increase and lower discounts will partially offset the impact
from operating deleverage.
Bharti Airtel:
India wireless business made a strong comeback with a beat on all
fronts – EBITDA grew 32% QoQ. Minimum recharge strategy drove ARPU by a steep
19% QoQ to INR123, while the subscriber base fell by a meager 1%. Recent rights
issue, impending Africa IPO/Bharti Infratel stake sale and the peak-out of capex
intensity should act as a key catalyst in alleviating concerns around burgeoning
leverage. Bharti is well poised to regain momentum. A turnaround in the India
wireless business, coupled with a steady uptick in the Africa business, should propel
overall growth.
June 2019
4

Strategy
Coal India:
Coal India's 4Q adj. EBITDA (ex-OBR) grew 4% YoY, driven by higher
realizations and volumes, partly offset by a higher wage bill. Excluding the wage bill,
cash cost was down ~4% YoY. We expect Coal India's cash costs per ton to decline as
it continues implementing productivity measures and shuts down old mines. This,
along with 5-6% growth in volumes, should drive ~8% earnings growth over the next
two years. The stock is attractive at current levels at ~4xEV/EBITDA (v/s historical
average of 7x) and P/E of 7-8x (v/s average of ~14x).
Indian Oil:
Led by its highest-ever marketing margins, IOCL’s EBITDA came in 45%
above our estimate. PAT exceeded our estimate by 63%, driven by higher other
income and a lower effective tax rate. No threat of spike in oil prices, combined with
continuity in reforms, is likely to result in stable marketing margins. The quality of
earnings is likely to improve with the commissioning of the PP plant at Paradip and
the ramp-up of the Ennore LNG terminal. It is trading at par with the FY15-18
deregulated period, while it should command a premium due to higher free cash
flow, in our view.
Federal Bank:
Fresh slippages moderated to INR2.6b (1.1% annualized), driven by a
32%/50% YoY/QoQ decline in SME slippages and NIL corporate slippage. The bank
expects the slippages trend to moderate, and thus, guided for 55-60bp of credit cost
for FY20, and continued RoA improvement over FY20/21. Also, the bank expects a
250bp improvement in the C/I ratio over the next two years.
Asian Paints:
Results were disappointing, with 12% sales growth and 2% EBITDA and
PAT decline (absolute EBITDA/PAT miss of 16%/ 17%). Ongoing top-line slowdown
particularly amid massive capacity expansion (50% capacity added in 6m ending
March 2019) and a deteriorating mix indicates a weak earnings outlook. Valuations
at 59.5x FY20E and 48.8x FY21E EPS are rich for a company with a weak earnings
growth outlook and RoCE likely below 20% for FY20 – as a result, we downgraded
our rating on the stock to Sell.
June 2019
5

Strategy
Mar’19 results review: MOFSL Universe delivers in-line performance; PAT
growth highest since Jun’14
For the MOFSL Universe, aggregate sales grew 10.6% YoY (our estimate: 11.5%),
EBITDA increased 7.3% YoY (our estimate: 5.1%) and PAT was up 23.6% YoY (our
estimate: 29.4%). The performance was dragged disproportionately by PSU
Banks (loss of INR51b v/s estimate of a profit of INR49b). Low base of Mar’18
(profit decline of 7% in Mar’18) supported aggregate profit growth. On a two-
year CAGR basis, MOFSL Universe profits grew 7% over Mar’17- Mar’19.
Excluding Corporate Banks, MOFSL Universe sales, EBITDA and PAT were up
10.3%, 5.9% and 0.7% v/s our estimate of 11.3%, 4.0% and (3.7) %, respectively.
The aggregate performance was disproportionately and expectedly supported
by financials (contributed INR230b to PAT delta), which accounted for the entire
earnings growth. However, we highlight that both private and public banks
delivered lower-than-expected PAT, as banks chose to ramp-up provisions and
boost PCR.
Of the 19 sectors we track, 7/4/8 posted profits that were above/in-line/below
our estimates. Automobiles, Cement, Metals, Utilities and Mid-cap universe
profits exceeded our expectations, while Private Banks, PSU Banks, Healthcare,
Retail and Telecom missed our profit expectations.
EBITDA margin for the MOFSL Universe (Ex Financials and OMCs) shrank 100bp
YoY to 19.1% (our estimate: 20.1%), dragged by Automobiles, Consumer,
Metals, O&G and Telecom, while Cement and Utilities delivered YoY expansion
in the operating margin.
Of the 195 companies, 80 exceeded our expectations (75 in 3QFY19), 68
delivered a miss (77 in 3QFY19) and 47 were in line (41 in 3Q) on the PAT front.
Sales
EBITDA
Mar- Chg. % Chg. %
19
QoQ YoY
782
73
17
5
296
136
256
1,231
61
98
6
122
89
578
278
888
10
311
199
12
249
106
2,901
1,755
2,308
0
17
-14
10
-2
2
-2
17
26
46
-22
0
-8
26
9
11
83
0
17
9
22
9
10.0
4.2
10.0
15
35
18
16
9
24
14
8
20
7
6
7
15
7
6
0
49
-8
-14
23
29
0
7.3
4.9
6.1
PAT
EBIDTA Margin
Chg.
YoY bp
-114
168
-19
49
-989
377
-53
-44
99
-25
-117
-73
35
-56
115
-117
112
-295
-181
-153
609
-543
-61
-116
-86
Exhibit 8: Profit growth led by Financials and IT, while Autos and Telecom dragged
Sector
(no of companies)
High growth sectors
Others (23)
Media (7)
Logistics (2)
Banks - Private (11)
NBFC (13)
Technology (14)
Med/Low growth sectors
Cement (10)
Capital Goods (13)
Retail (2)
Consumer (19)
Healthcare (20)
Oil & Gas (14)
Utilities (8)
PAT de-growth sectors
Life Insurance (2)
Metals (9)
Automobiles (16)
Infrastructure (4)
Banks - PSU (4)
Telecom (4)
MOFSL Universe (195)
Sensex (30)
Nifty (50)
Chg. % Chg. %
Mar- 19
QoQ YoY
2,149
395
52
35
371
182
1,115
7,735
327
771
58
511
455
4,854
759
4,462
203
1,629
1,837
50
340
402
14,345
6,678
10,317
2
4
-5
3
4
4
1
-3
12
26
-15
0
-1
-9
3
7
41
4
9
18
2
1
0.4
1.6
-0.2
Var.
over
Exp. (%)
19
0
23
0
19
5
12
-4
22
1
17
6
17
-1
11
-2
14
3
10
-1
18
3
10
-2
13
-1
12
-4
3
8
6
1
16
2
6
3
0
-1
31
9
19
0
21
-1
10.6
-0.8
9.5
-2.1
10.2
-0.8
Var.
Var.
Mar- Chg. % Chg. %
Mar- 19
over
over
19
QoQ YoY
(%)
Exp. (%)
Exp. (%)
-2
436
-3
23
-4
36.4
3
38
35
45
22
18.6
7
8
-29
34
-8
31.9
-2
4
34
33
15
14.1
-4
95
-26
29
-28
79.9
1
92
18
26
12
74.6
-3
199
0
15
2
22.9
4
659
21
7
4
15.9
1
30
44
13
5
18.7
-3
61
55
13
3
12.7
-13
4
-16
12
-9
10.4
-4
87
3
10
2
23.8
-6
49
-10
7
-10
19.6
8
304
26
7
5
11.9
8
124
23
3
8
36.6
3
136
-22
420
-32
19.9
31
6
15
-9
-7
4.9
6
124
5
-11
29
19.1
-6
99
55
-16
18
10.8
11
4
4
-12
7
24.3
4
-51
PL
Loss
PL
73.3
7
-47
Loss
Loss
15
26.3
2.1
1,231 5.6 23.6
-4.5
20.2
1.0
749 -2.5 16.4
-5.7
26.3
2.6
1,010 6.4 15.8
-0.8
22.4
June 2019
6

Strategy
Sector performance: Financials drove earnings but fell short of estimates
Sales growth was led by Private Banks (22%), Telecom (21%), PSU Banks (19%),
NBFC (17%) and Technology (17%), partly offset by the muted performance of
Metals (6%) and Utilities (3%).
EBITDA growth was driven by PSU Banks (29%), NBFC (24%) Cement (20%) and
Technology (14%). However, Auto and Metals reported a decline of 14% and 8%,
respectively.
PAT growth was led by Private Banks (29%), NBFC (26%), Technology (15%),
Cement (13%) and Capital Goods (13%). However, Auto and Metals reported a
decline of 16% and 11% YoY, respectively.
MOFSL Universe surprise/miss ratio highest since 3QFY18
For the MOFSL Universe, aggregate sales grew 10.6% YoY (our estimate: 11.5%),
EBITDA increased 7.3% YoY (our estimate: 5.1%) and PAT was up 23.6% YoY (our
estimate: 29.4%).
The number of companies exceeding our estimates surpassed that of companies
delivering a miss. MOFSL Universe surprise/miss ratio of 1.2 was the highest
since 3QFY18 (0.9x in 3QFY19).
Of the 19 sectors we track, 7/4/8 posted profits that were above/in-line/below
our estimates.
Exhibit 10: MOFSL Universe PAT growth: Telecom, PSU
Banks and Automobiles drag profits
94
67
34
4
-4
-38
-10
6
0
6
-5
-10
8 2 5
-7
15
2 7
15
1417 15
-7
3 2
24
Exhibit 9: MOFSL Universe surprise/miss ratio stood at 1.2x
for 4QFY19
MOFSL Universe PAT (Surprise / Miss ratio)
1.3
1.2
1.1
1.2
1.1 1.1
1.00.9
1.0
0.9
0.90.9
0.9
0.9
0.8
0.8
0.8
0.7
0.7
0.6
0.6
-6
Top-line growth remains in double-digits but slowest since Mar’17
The key highlight of the 4QFY19 results season was that top-line growth
remained in double-digits but came in lowest in nine quarters. On the other
hand, profit growth was the highest since Jun’14, driven by a low base in
financials.
16/19 sectors reported EBITDA that was either in line or better than our
expectations. 11/19 sectors reported PAT that was either in line or better than
our expectations.
EBITDA margin for the MOFSL Universe (ex -Financials and OMCs) contracted by
100bp YoY to 19.1% (our estimate: 18.8%).
June 2019
7

Strategy
Exhibit 12: EBITDA margin (ex-Financials & OMCs)
contracted 100bp to 19.1%
MOFSL Universe EBITDA Margin
LPA: 19.4%
Exhibit 11: MOFSL Universe posted in-line EBIDTA growth at 7%
32
39
30
13
3
-5
17
7 5 7
4 6
-2
14
3
1918
13
9
1110
151214 13
4
7
-8
Exhibit 13: Key highlights: EBITDA and PAT margin contraction was broad-based (barring Cement, Utilities and Healthcare) in
4QFY19
Sector
Automobiles
Capital Goods
Cement
Consumer
Financials
Banks - Private
Banks - PSU
Life Insurance
NBFC
Healthcare
Infrastructure
Logistics
Media
Metals
Oil & Gas
Excl. OMCs
Retail
Technology
Telecom
Utilities
Others
MOFSL Universe
MOFSL Ex Financials & OMCs
MOFSL Ex Fin, Oil & Metals
Sensex Universe
Nifty Universe
Mar 18
12.6
12.9
17.7
24.6
63.2
89.8
67.2
3.8
70.8
19.2
25.8
13.6
32.1
22.1
12.5
18.8
11.5
23.5
31.8
35.4
16.9
20.8
20.1
20.1
27.4
23.2
EBDITA Margin
Mar 19
10.8
12.7
18.7
23.8
63.1
79.9
73.3
4.9
74.6
19.6
24.3
14.1
31.9
19.1
11.9
17.7
10.4
22.9
26.3
36.6
18.6
20.2
19.1
19.5
26.3
22.4
Chg
-1.8
-0.3
1.0
-0.7
-0.1
-9.9
6.1
1.1
3.8
0.3
-1.5
0.5
-0.2
-2.9
-0.6
-1.1
-1.2
-0.5
-5.4
1.1
1.7
-0.6
-1.0
-0.5
-1.2
-0.9
Mar 18
6.4
7.6
9.2
16.9
-9.5
24.3
-84.1
3.9
46.7
11.3
13.0
10.5
13.4
9.1
6.6
10.0
7.8
18.2
-0.6
16.5
8.1
7.7
10.3
10.6
10.5
9.3
PAT Margin
Mar 19
5.4
7.9
9.2
17.0
13.0
25.7
-15.0
3.1
50.3
10.7
8.7
12.4
15.2
7.6
6.3
8.4
7.4
17.9
-11.6
16.4
9.5
8.6
9.1
9.8
11.2
9.8
Chg
-1.0
0.3
0.0
0.1
22.5
1.4
69.1
-0.8
3.6
-0.6
-4.3
1.9
1.7
-1.5
-0.3
-1.7
-0.3
-0.4
-11.0
-0.1
1.5
0.9
-1.1
-0.9
0.7
0.5
:
June 2019
8

Strategy
Nifty: 4QFY19 performance highlights
Nifty sales/EBITDA/PAT grew 10.2%/6.1%/15.8% YoY, in line with our estimate
of 11.1%/3.4%/16.8% YoY.
Excluding OMCs, Nifty sales/EBITDA/PAT were up 10.3%/6.9%/15.7% YoY v/s
our estimate of 11.3%/5.7%/20.9% YoY.
Excluding Corporate Banks, Nifty PAT grew by 1.7% YoY v/s our estimate of 1.7%
decline.
Excluding both OMCs and Corporate Banks, Nifty profit growth was flattish – in
line with our expectations.
Nifty EBITDA margin (Ex-Financials, OMCs) contracted 100bp YoY to 20.2%.
68% of Nifty Universe posted in-line or higher-than-estimated PAT; 66% of Nifty
Universe posted in-line or higher-than-estimated EBITDA.
Earnings downgrades outweighed upgrades by a factor of around 1.7x. 12 out of
the 50 Nifty companies saw upgrades (>3%) in FY20 EPS, while 14 companies
saw EPS downgrades of >3%.
Exhibit 15: Nifty EBITDA growth in line at 6.1% YoY (v/s
estimate of 3.4%) – lowest in seven quarters
Exhibit 14: Nifty sales growth slowest since Dec-16
Exhibit 16: Nifty PAT growth at 15.8% YoY (in-line) – highest
since Jun-14
Exhibit 17: Nifty EBIDTA margin (ex-Financials and OMCs)
shrank by 100bp YoY (%)
June 2019
9

Strategy
Domestic Cyclicals drive earnings growth in 4QFY19
Domestic Cyclicals drove 4QFY19 earnings growth, with 3x YoY increase. Global
Cyclicals, on the other hand, posted a decline for the second consecutive
quarter. However, the decline was lower than our estimate, with both Metals
and Oil & Gas profit numbers coming in ahead of our estimates. Defensives
disappointed again, dragged by elevated losses in Telecom for the seventh
consecutive quarter. In this quarter, the share of Domestic Cyclicals, Global
Cyclicals and Defensives in the profit pool is roughly equal.
We expect Domestic Cyclicals to continue driving earnings growth led by
Financials, as Global Cyclicals will slow down further and Defensives’
performance will continue to be dragged by Telecom.
Exhibit 18: Domestic Cyclicals, Global Cyclicals and Defensives share in profit pool roughly equal
100%
75%
50%
25%
0%
Defensives
Global cyclicals
Domestic cyclicals
Defensives
include Consumer, Healthcare, Technology, Telecom and Utilities
Global Cyclicals
include Metals, Oil & Gas and JLR
Domestic Cyclicals
include Automobiles, Banks, Capital Goods, Cement, Media, NBFCs, Real Estate and Retail
One third of MOFSL Universe reports YoY profit decline
27% of the companies reported >30% PAT growth.
Overall, 62% of the Universe reported PAT growth, whereas 38% reported a PAT
decline.
>15-30%
>0-15%
6
9
31 38 39
0
-3
8
12
9
17
7
26 35
-7
-9
<0%
-4
-3
-11
-13
-4
1
Ex OMCs (%)
18
20
3
10
8
8
-21
6
12
23
38
Exhibit 19: Distribution of PAT growth
Earnings Growth
26
20
23 26
24 26
-8
-15
42 41
-15
32 35
23
42
-11
>30%
26
22
27
24
9
13
11
4
18
11
31 27 30
25 24 31 34
18
9
18 18
17 16 19 23
14 14 9 13 10 20
27
20 22
24 19 13 27 17 16
17 18 16
25
21
16
17 22 19 24 16 22 25 25 18 22
22 18 22 10 17 22 21 18 23
20 18 21 16 19
18 18
18
18 15
19 19 15
15
24 25 18 22 17 17 19 16 18 18 14 20 22 20 23 13 26 13 19
10 14
12 16
16
43 51 38 39 35
35 30 26 27 32 41
35 41 31 30 27
32
21 21 24 25 25 28 26 24 19 26 24 19 20 26 18 21 22 21 26 26 29 30 29 23 19 25 31
42 40
42 40 37 38 45 36
38 47 36 39 37 35 32 34 45 47 32 31 35
22 32 32
PAT Growth Ex OMCs (%)
June 2019
10

Strategy
Global Cyclicals’ growth muted but better than expectations
Profits of Global Cyclicals (the primary engine of earnings growth in 1HFY19),
which were expected to moderate further, came in decent in the quarter.
Metals posted a profit decline of 11.3% v/s our estimate of a decline of 31.2%
(profit growth for Metals was at 47% in 4QFY18), whereas Oil & Gas posted
profit growth of 6.6% v/s our estimate of 1.5%, led by OMCs.
Defensives’ profit growth remained muted dragged by Telecom.
Exhibit 21: Global Cyclicals’ profit declined 2% on a high
base
84
Exhibit 20: Defensives posted flattish profits on low base
23
17
10
7
12 14
13
7
0
-4
-2 -4
-13
-5
3
13
0
-7
-1
10
8
-11
16
-2 -3
20 26 21
40
51
27
47
20
-2
-24 -31
-24
-15
-14
Financials drove Domestic Cyclicals’ growth
Domestic Cyclicals’ profits grew 3x in 4QFY19 off a weak base (62% decline in
the Mar-18 quarter).
Private Banks posted 29% PAT growth in the quarter, benefiting from a weak
base (29% decline in the base quarter).
NBFC Universe’s performance remained robust, with 12
th
consecutive quarter of
double-digit growth at 26% on a high base (profits had grown 36% in 4QFY18).
Exhibit 23: Private Banks’ post 29% profit growth but missed
expectations
Exhibit 22: Domestic Cyclicals’ PAT triple on low base
202
18 19 19 17
12
16 14
23
5
-2
-15
8 4 7
3
22
29
10 14 13 3 9 15
-14-29
-3 -1
30 36 13 18
2
-62
-11 -9
35
-8
-29
-13
June 2019
11

Strategy
Exhibit 24: PSU Banks posted INR 51b loss v/s expectations
of INR49b profits
Exhibit 25: NBFCs posted strong performance led by Bajaj
Finance and HDFC
44
36
20
8
24
19
19
22
28
30
22
26
12
6
12 10
4
16 16
14
Exhibit 26: Sector estimates revision from preview
PAT (INR B) - PREVIEW PAT (INR B) - REVIEW
Sector
Automobiles
Capital Goods
Cement
Consumer
Financials
Banks - Private
Banks - PSU
Life Insurance
NBFC
Healthcare
Infrastructure
Logistics
Media
Metals
Oil & Gas
Excl. OMCs
Retail
Technology
Telecom
Utilities
Others
MOFSL Universe
MOFSL Univ Ex OMCs
NIFTY EPS (INR)
FY19E
295
164
113
331
816
481
41
25
295
209
17
14
39
452
1,174
893
18
768
-166
430
107
4,804
4,523
486
FY20E
404
191
145
386
1,405
743
315
29
346
262
16
17
46
422
1,300
955
22
820
-157
498
155
5,958
5,614
606
FY19
309
164
119
333
673
444
-69
24
299
202
16
15
38
482
1,224
899
17
767
-172
452
109
4,773
4,448
481
FY20E
402
196
147
369
1,435
720
374
26
341
248
15
16
44
407
1,302
959
22
815
-147
488
160
5,945
5,602
604
% Upgrade /
Downgrade
FY19
FY20E
5.0
-0.6
0.1
2.7
5.5
1.3
0.6
-4.4
-17.5
2.1
-7.8
-3.1
PL
18.5
-2.0
-8.8
1.4
-1.5
-3.5
-5.3
-2.9
-7.8
3.9
-1.3
-1.7
-3.0
6.8
-3.4
4.2
0.2
0.7
0.4
-2.9
-0.2
-0.1
-0.6
Loss
Loss
5.2
-2.0
1.9
3.1
-0.7
-0.2
-1.7
-0.2
-1.0
-0.4
Growth YoY (%)
FY18
15.8
13.4
0.7
10.7
-28.5
-1.2
PL
6.0
24.2
-20.3
25.9
28.1
-9.3
73.2
5.5
6.3
51.1
5.2
PL
8.5
23.6
2.7
2.6
6.7
FY19
-21.8
20.5
17.4
15.4
46.4
9.2
Loss
-11.4
28.0
12.3
4.2
17.6
23.4
24.1
6.0
18.5
29.7
13.5
Loss
27.2
-6.3
9.7
12.5
6.7
FY20E
29.9
19.6
23.9
10.7
113.1
62.2
LP
8.6
14.1
23.0
-9.5
12.5
17.0
-15.6
6.4
6.7
27.9
6.3
Loss
7.8
46.2
24.6
26.0
25.6
Nifty EPS estimate for FY20 remains unchanged
The index delivered EPS growth of 6.7% in FY19; identical to FY18
Nifty delivered EPS growth of 6.7% in FY19 (similar to FY18) to INR481. Our Nifty
FY20/21 EPS estimates remain unchanged at INR604/706, building in YoY
growth of 25.6%/16.9%.
69% of incremental earnings in FY20 for Nifty are expected to come from
Financials.
Top upgrades (FY20E): UPL, SBI, Tata Motors and Tata Steel have seen EPS
upgrades of 32.4%, 23.3%, 13.8% and 9.3%, respectively.
Top downgrades (FY20E): Yes Bank, Asian Paints, Hindalco, Sun Pharma and
Bharti Infratel have seen EPS downgrades of 43.1%, 16.5%, 12.9%, 8.8% and
7.9%, respectively.
12
June 2019

Strategy
Exhibit 27: Nifty stock revision since preview
Company
FY18
Current EPS (INR)
FY19
FY20E
EPS UPGRADE /
DOWNGRADE (%)
FY19
FY20E
EPS GROWTH (%)
FY18
FY19
FY20E
UPL
State Bank
Tata Motors
Tata Steel
GAIL
Ultratech Cement
Cipla
Larsen & Toubro
JSW Steel
Mahindra & Mahindra
ICICI Bank
Wipro
IOC
Dr Reddy’ s Labs
TCS
Hero MotoCorp
Bajaj Finance
Grasim Industries
Power Grid Corp.
Coal India
Reliance Inds.
Britannia
Adani Ports
Eicher Motors
BPCL
Axis Bank
Infosys
ONGC
Bajaj Finserv
Titan Company
Tech Mahindra
Maruti Suzuki
Zee Entertainment
IndusInd Bank
HDFC
ITC
Bajaj Auto
Kotak Mahindra Bank
Hind. Unilever
HCL Technologies
Vedanta
NTPC
Indiabulls Housing
Bharti Infratel
Sun Pharma
Hindalco
Asian Paints
Yes Bank
Bharti Airtel
Nifty (50)
43.8
-5.3
22.9
69.5
20.3
85.7
19.3
51.7
24.0
41.0
11.1
13.4
24.6
64.7
66.0
185.1
43.4
47.3
16.5
19.2
60.9
41.8
17.7
799.6
49.8
1.1
32.4
20.2
166.5
12.6
42.7
266.7
12.0
60.2
33.3
8.9
151.3
32.5
24.5
62.6
20.4
8.9
91.3
13.6
13.5
18.9
21.1
18.4
3.5
451
43.4
2.6
-4.4
88.6
28.1
89.4
18.7
61.4
31.8
42.5
5.2
14.8
18.8
105.2
83.5
169.5
69.5
71.3
19.2
28.3
67.2
48.1
19.3
813.9
43.4
18.2
37.5
27.1
202.3
15.7
48.2
247.7
16.4
54.9
43.1
10.2
165.4
37.7
28.9
73.6
18.1
12.3
95.9
13.6
15.1
24.7
23.1
7.5
-8.8
481
63.5
33.5
13.8
78.6
30.3
113.0
22.6
76.9
21.9
46.4
21.2
17.1
18.7
131.6
89.8
176.8
86.8
85.7
20.9
29.2
70.7
59.2
22.2
877.4
47.7
40.0
38.5
28.3
273.8
20.3
52.9
277.3
18.4
96.8
49.2
10.8
174.3
44.1
33.1
77.7
16.6
13.1
101.9
13.1
18.6
22.9
23.7
14.1
-5.4
604
-5.6
-62.1
Loss
-0.2
-4.8
13.8
6.5
-1.6
4.1
4.6
-26.3
0.1
21.7
-5.9
1.4
0.7
2.9
7.7
5.1
3.4
1.6
-0.5
3.4
0.0
10.2
-0.4
3.7
1.8
-5.9
-2.8
-1.8
2.5
0.9
2.1
0.6
2.2
2.5
-0.8
0.5
-0.2
37.6
11.2
-1.8
-3.8
-7.0
-4.0
-4.2
-59.1
Loss
-1.0
32.4
23.3
13.8
9.3
6.8
6.6
6.5
6.2
5.7
5.2
3.9
3.2
2.3
1.9
1.8
0.8
0.8
0.8
0.7
0.6
0.5
0.2
0.0
-0.1
-0.2
-0.3
-0.3
-0.5
-0.7
-1.1
-2.2
-2.5
-2.5
-2.6
-2.8
-3.0
-3.2
-3.2
-3.5
-4.2
-4.6
-4.9
-5.6
-7.9
-8.8
-12.9
-16.5
-43.1
Loss
-0.4
4.8
PL
15.7
83.3
19.7
-10.9
24.6
22.4
61.2
49.8
-34.3
7.7
11.0
-10.9
-1.0
9.5
35.9
-30.2
16.1
26.3
20.7
13.5
-6.1
27.0
3.0
-92.8
3.1
-9.9
17.2
39.9
33.6
7.3
-23.2
25.2
-16.4
5.5
7.3
21.3
24.7
4.5
34.6
-10.9
33.2
-8.1
-48.5
120.5
1.9
26.3
-68.6
6.7
-0.8
LP
PL
27.3
38.4
4.3
-3.1
18.7
32.4
3.7
-52.8
10.1
-23.7
62.6
26.4
-8.5
60.0
50.6
16.0
47.9
10.4
15.1
8.6
1.8
-12.9
1538.1
15.9
34.4
21.5
24.0
12.8
-7.1
36.4
-8.8
29.6
14.8
9.3
16.0
18.2
17.6
-11.0
38.7
5.0
-0.3
12.2
30.9
9.1
-59.6
PL
6.7
46.3
1199
LP
-11.2
7.9
26.4
20.9
25.3
-31.2
9.0
305.8
15.6
-0.8
25.1
7.6
4.3
25.0
20.2
9.2
3.1
5.2
23.1
15.4
7.8
9.9
119.9
2.7
4.2
35.4
29.4
9.8
12.0
12.0
76.3
14.2
6.6
5.4
16.8
14.3
5.7
-8.2
6.0
6.3
-3.4
23.3
-7.3
2.6
88.6
Loss
25.6
June 2019
13

Strategy
Exhibit 28: Nifty FY18-20 free float; PAT CAGR at 17%; sales CAGR at 17%
Sales (INR b)
Company
High PAT Growth (20%+)
State Bank
Axis Bank
Dr Reddy’ s Labs
ICICI Bank
Bajaj Finance
Grasim Industries
IndusInd Bank
Bajaj Finserv
Titan Company
Zee Entertainment
HDFC
Coal India
Larsen & Toubro
GAIL
HDFC Bank
NTPC
UPL
Medium PAT Growth
(10-20%)
Britannia
ONGC
Ultratech Cement
Sun Pharma
Kotak Mahindra Bank
Hind. Unilever
TCS
Power Grid Corp.
Adani Ports
ITC
Tech Mahindra
Hindalco
HCL Technologies
Asian Paints
Low PAT Growth (<10%)
Cipla
Reliance Inds.
Bajaj Auto
Wipro
Mahindra & Mahindra
Tata Steel
Indiabulls Housing
Eicher Motors
Maruti Suzuki
Infosys
Bharti Infratel
BPCL
Hero MotoCorp
JSW Steel
Vedanta
Yes Bank
IOC
Tata Motors
Bharti Airtel
Nifty (PAT free float)
FY18
6,078
749
186
142
230
78
158
75
92
161
67
96
859
1,197
537
401
878
174
FY19
7,218
883
217
152
270
114
206
88
122
198
79
115
995
1,410
751
482
915
218
FY20E
8,178
998
250
174
313
146
223
135
136
240
90
130
1,024
1,622
755
593
995
354
Sales
CAGR %
18-20
16
15
16
11
17
37
19
34
22
22
16
16
9
16
19
22
7
43
15
14
17
21
10
21
11
14
15
4
10
10
11
17
14
17
10
36
14
7
11
10
23
10
9
14
0
17
6
8
0
20
25
4
1
17
EBIDTA
Margin (%)
FY18 FY19 FY20
38
80
84
16
107
63
20
89
78
10
31
88
20
11
14
81
26
20
23
15
18
20
20
75
21
26
88
62
38
15
12
23
19
16
19
16
19
20
14
17
125
31
15
27
44
6
16
21
22
100
10
12
36
21
36
63
88
19
87
67
20
91
80
10
32
96
25
12
13
82
22
19
24
16
18
18
20
74
23
27
87
60
38
18
12
23
18
14
19
15
16
20
15
19
107
30
13
25
41
5
15
22
21
83
7
10
32
20
39
65
92
21
88
68
20
89
88
11
31
97
24
13
14
84
31
23
24
17
19
19
23
76
23
27
90
65
39
18
12
23
17
13
20
13
17
22
15
17
90
28
13
25
39
5
15
20
24
81
5
12
32
20
EBITDA
CAGR %
18-20
17
4
22
25
5
42
21
35
30
26
15
22
21
24
20
23
15
51
17
19
19
17
19
22
17
15
17
7
11
20
11
19
9
7
13
21
6
11
12
12
4
4
1
9
-5
3
0
6
5
8
-8
7
-6
13
PAT (INR b)
PAT YoY (%)
PAT
Contbn
to
CAGR %
Delta %
18-20
40
58
49
76
LP 1,199 LP
29
1,596 122 514
8
63
25
43
1
-50 306
42
6
60
25
41
2
51
20
35
2
-8
92
33
2
22
35
29
1
24
29
27
1
36
12
24
1
33
14
23
2
47
3
23
5
19
25
22
3
38
8
22
2
21
22
21
7
39
6
21
3
-1
46
20
1
21
15
34
4
12
16
18
23
16
9
15
13
31
15
9
-10
-3
10
9
7
4
27
5
2
-7
-3
0
-13
-8
32
-11
-59
-24
PL
PL
9
8
23
4
33
23
17
14
7
9
15
7
8
-7
4
3
8
21
5
5
6
9
-11
6
8
12
5
-3
10
5
-31
-8
97
-1
LP
Loss
26
14
19
18
18
18
17
16
14
13
12
11
11
10
10
6
-2
8
8
7
7
6
6
6
5
2
1
-2
-2
-2
-5
-10
-10
-13
-22
PL
17
28
0
9
1
1
2
2
7
2
1
2
1
1
1
0
-4
0
5
1
1
1
1
0
0
0
0
0
0
0
0
-1
-1
-5
-3
-3
100
FY18 FY19 FY20E FY18 FY19 FY20
755
-46
3
11
68
25
31
36
26
11
12
56
119
72
46
175
88
22
1,056 1,670
23
299
47
104
17
22
34
137
40
50
47
56
33
63
32
44
14
18
16
18
74
85
175 180
86
108
63
68
211 257
122 129
22
32
-5
PL
-93
-11
-31
36
-2
26
16
40
-23
-12
26
22
20
20
-11
6
1
8,900 10,644 11,728
99
3,622
294
261
95
345
1,231
299
113
406
308
1,152
506
168
21,228
152
3,917
252
545
921
1,322
48
89
798
705
145
2,358
322
701
919
77
4,215
2,916
826
36,206
111
4,535
357
288
113
382
1,465
385
109
450
347
1,305
604
193
25,619
164
5,671
302
586
1,029
1,577
58
97
869
827
146
2,982
337
848
920
98
5,281
3,019
808
43,481
129
4,948
428
316
140
429
1,612
396
123
492
372
1,428
696
219
29,285
184
7,292
327
623
1,138
1,592
72
108
945
909
145
3,207
360
818
910
111
6,577
3,127
839
49,192
1,118 1,358 1,461
10
12
14
14
259 348 363 -10
24
25
33
-11
32
36
45
-49
62
72
84
26
53
63
72
25
258 316 337
-2
87
100 110
16
37
40
46
-6
108 125 133
6
38
43
47
38
42
55
51
121
88
101 106
4
20
22
23
2
1,590 1,428 1,538 16
16
15
18
25
361 398 419
21
44
48
50
7
85
92
97
2
49
51
55
50
80
101
90
116
39
41
43
34
22
22
24
27
81
75
84
7
161 157 164
12
25
25
24
-8
98
85
94
3
37
34
35
9
58
76
53
62
76
67
62
35
42
17
34
27
226 173 171
11
78
-15
47
16
14
-35
-28
-69
1,776 1,934 2,435 7
June 2019
14

Strategy
Sector-wise: Highlights / Surprises / Guidance
AUTO: Weak quarter; expect demand recovery from 2QFY20, RM inflation to soften in 1HFY20
Demand weakness continues across segments, but expect recovery from 2QFY20:
In 4QFY19, auto demand
was impacted by (a) weak buying sentiment in rural areas, (b) liquidity crunch and (c) a high base. While most
OEMs have slashed their growth guidance for FY20, demand is likely to be driven by BS-VI-related pre-buy from
2QFY20. In FY20, the PV industry is expected to grow at 3-5%, 2W at mid-single-digit and the tractor industry at
5-8%.
RM cost inflation continues hurting margins:
RM cost increased by 220bp YoY (+60bp QoQ) to 71.4% for our
Auto Universe. However, most OEMs expect the positive impact of softening RM inflation to start reflecting in
1HFY20.
EBITDA margin (ex-JLR) shrinks for third straight quarter:
EBITDA margin shrank by 130bp YoY (-30bp QoQ) to
11.4% for our Auto Universe (ex JLR) in 4QFY19, impacted by RM inflation, operating deleverage and higher
other expense. All auto OEMs (ex TTMT S/A) witnessed margin contraction YoY, particularly EIM S/A (-4.5pp
YoY), BJAUT (-3.9pp YoY), MSIL (-3.7pp YoY), HMCL (-2.4pp YoY), AL (-1.7pp) and MM (-1.6pp). JLR’s margin
shrank by 3.8pp YoY (+2.4% QoQ).
Aggregate PAT (ex-JLR) declined first time in seven quarters:
Aggregate OEM (ex JLR) PAT declined by 16% YoY
(-6.1% QoQ), impacted by a significant YoY fall in TTMT S/A (-68.3%), HMCL (-24.5%), MSIL (-13%), EIM (-16%)
and AL (-11%).
Earnings change:
We have lowered our FY20/21 EPS estimate for MSIL (2.5%/4%), MSS (14%/6%), TVSL (8/9%),
BJAUT (3% each), but have upgraded MM’s consol. EPS estimate by 5%/3%.
Top picks:
We prefer PVs over CVs and 2Ws as it is likely to be the least impacted segment from BS-VI and a
stable competitive environment. Our top picks are MSIL and MSS among large caps, and ENDU and EXID among
midcaps.
Positive surprise:
MM, BHFC, ENDU, EXID, AMRJ and CEAT
Negative surprise:
MSIL, EIM, TTMT SA, MSS and BOS
Guidance highlights:
MSIL – FY20 is likely to be an unpredictable year due to the impact from several regulations. It expects to grow
faster than the SIAM’s outlook of 3-5% growth in FY20. It expects INR-based royalty for all models by 2022 (~40
currently).
M&M – domestic tractors/PV/CV industry is likely to grow at ~5%/3-5%/10-12% in FY20. FES inventory is
comfortable at 4-5 weeks (v/s industry inventory at 7-8 weeks).
TTMT – JLR: FY21 retail sales growth to be higher in the premium segment. For FY21, it has guided for an EBIT
margin of 3-4% (maintained) and negative FCF (earlier expected FY21 to be FCF positive).
BJAUT – domestic 2W industry growth now cautious v/s 8-10% growth expected earlier. It expects to surpass
FY19 domestic 3W volumes in FY20. The focus is to expand market share in the large passenger and diesel 3W
portfolio.
HMCL – FY20 industry volumes are expected to grow in mid-single-digit. HMCL expects to grow ahead of
industry.
TVSL – FY20 outlook of marginal industry growth based on good growth in 2HCY19. TVS to outperform industry.
EIM – production target of 950k for FY20. It targets to have ~1,000 dealers by end-FY20 (v/s ~915 in FY19).
AL – CV industry growth guided at 10-12% in FY20 due to BS-VI-related pre-buying from 2QFY20.
Escorts – domestic tractor industry to grow at 5-8% in FY20. CE/Railway business to grow at 10-12%/15-18%.
Motherson Sumi – Expect normalization in SMP margins in 2-3 quarters once new product launches come
through.
June 2019
15

Strategy
Exhibit 29: Key operating indicators
BJAUT
HMCL
TVS Motor
MSIL
MM
TTMT (S/A)
TTMT (JLR)
TTMT (Cons)
Ashok Leyland
Eicher (RE)
Eicher (VECV)
Eicher (consol.)
Agg. (ex JLR)
Volumes ('000 units)
4QFY19
YoY (%)
QoQ (%)
1,194
14.2
-5.3
1,781
-10.8
-1.1
907
2.0
-8.3
458
-0.7
7.0
236
-0.4
0.7
193
-5.6
12.4
162
-11.6
14.1
60
196
21
5,046
1.3
-13.6
-9.0
-1.9
36.0
0.9
24.1
-1.8
EBITDA margins (%)
4QFY19
YoY (bp)
QoQ (bp)
15.7
-390
10
13.6
-240
-50
7.0
-30
-100
10.5
-370
70
13.5
-160
30
7.3
340
-150
9.8
-380
240
9.3
-130
150
11.1
-170
90
27.8
-450
-170
8.5
-100
190
27.8
-450
-170
11.4
-130
-30
4QFY19
10,671
7,303
1,338
17,956
10,502
1,750
255
21,387
6,625
4,804
1,394
5,448
61,593
Adj PAT (INR M)
YoY (%)
QoQ (%)
-1.2
-3.2
-24.5
-5.0
-19.2
-25.0
-12.9
20.6
-6.4
-28.0
-68.3
-72.7
-25.6
-193.9
-31.6
-285
-11.2
71.8
15.9
-4.8
-21.8
83.3
-16.0
2.2
-16.1
-6.1
Source: MOFSL, Company
Exhibit 30: Aggregate EBITDA margin (excluding JLR) shrinks
YoY/QoQ…
Aggregate (excld JLR)
17
14
11
8
Aggregate (incl JLR)
Exhibit 31: …led by YoY contraction in margins across
segments
4QFY18
1QFY19
2QFY19
3QFY19
4QFY19
2W
Source: MOFSL, Company
Cars
CVs
Source: MOFSL, Company
Exhibit 32: Revised EPS estimates
Rev
174
177
18
277
46
14
7
877
33
22
578
73
58
43
11
6
FY20E
Old
180
175
20
284
44
12
7
878
36
24
614
83
60
43
11
7
Chg (%)
-3.1
0.8
-7.9
-2.5
5.1
13.4
-0.3
-0.1
-7.6
-7.2
-5.7
-11.4
-4.0
-0.4
2.2
-13.6
Rev
190
185
23
334
46
15
6
1,007
38
24
674
91
60
49
12
7
FY21E
Old
196
182
25
348
44
16
6
1,008
43
27
724
98
63
50
12
8
Chg (%)
-2.9
1.7
-9.4
-3.9
3.0
-3.4
4.8
-0.1
-11.7
-10.3
-7.0
-6.8
-4.7
-1.2
2.7
-6.0
Bajaj Auto
Hero MotoCorp
TVS Motor
Maruti
M&M
Tata Motors
Ashok Leyland
Eicher Motors
Amara Raja
Bharat Forge
BOSCH
Ceat
Escorts
Endurance Tech
Exide Industries
Motherson Sumi
Source: MOFSL, Company
June 2019
16

Strategy
CAPITAL GOODS: In-line performance at profitability level
Infrastructure: Performance beat supported by better-than-expected execution
Revenue growth for industry marginally below estimate:
Revenue growth stood at 9.5% YoY for the industry,
below our estimate of 11% YoY. Below-estimated revenue booking was on account of weak order availability for
execution in the T&D sector and execution delays witnessed in a few companies. Even the room AC segment for
companies like Voltas, Havells and Blue Star saw a tepid performance, given delayed summer and high inventory
position in the system. Large players like L&T, Siemens and ABB were able to smoothly execute and deliver
revenue in line with expectations.
Mixed performance on profitability front:
Operating profit growth for the quarter stood at 7% YoY, below our
estimate of 10% YoY, while net profit growth of 13% YoY was ahead of our estimate of 10% YoY. Performance
improvement during the quarter was restricted to a few companies like ABB, Bharat Electronics and BHEL.
Disappointment on the profitability front came from companies like L&T, EIL, GE TD and Havells. L&T’s
disappointment was on account of weaker-than-estimated margins in the infra segment, while Havells, EIL and
GE TD suffered on account of weak execution and operating deleverage.
Order inflow declines given weakness in domestic ordering:
Order inflows declined due to weakness in
domestic ordering in the run up to the general elections. Order inflow for L&T increased 14% YoY to INR565b
(supported by orders in the international market), but that for BHEL declined 73% YoY to INR68b as not many
BTG order saw finalization during the quarter. Management commentary suggests that small- and medium-sized
orders are flowing in, but large-ticket orders are on hold and should see pick up in 2HFY20.
Infrastructure:
Excluding Sadbhav, the performance of the sector at the operating level was ahead of our
expectation. Revenue growth of 30% YoY was above our estimate of 20% YoY. Execution of KNR and Ashoka was
way ahead of our estimate (36% beat to our estimate), supported by a pick-up in execution of orders in hand.
Sectoral operating profit was 11% ahead of our estimate (+23% YoY), supported by a better revenue mix and
operating leverage. PAT declined 12% YoY and was ahead of our estimate by 7%. PAT decline was mainly on
account of a higher tax rate from companies facing the end of 80IA benefits.
Post weak ordering in FY19, ordering and construction activity is likely to pick up in FY20 (with election
uncertainty behind) and the focus of the new government is likely to continue on road infrastructure
development. Even the prevailing issues of (a) difficulty in achieving financial closure and (b) non-availability of
land to execute the already awarded projects have been addressed to a large extent. This will not only improve
execution of the already awarded projects but also help in paving way for improving ordering activity.
Top picks:
We maintain our positive stance on
L&T in the capital goods sector,
given (a) an improvement in
domestic execution, (b) ordering from overseas geography showing signs of pick-up, (c) working capital cycle
improvement and (d) leaner balance sheet due to non-core asset divestment. In
infrastructure,
we like KNR and
Ashoka given its (a) ability to timely execute projects, (b) healthy balance sheet and (c) ability to grow without
diluting the quality of balance sheet.
Positive surprise:
ABB, Bharat Electronics, BHEL, Siemens, Blue Star, KNR and Ashoka
Negative surprise:
Voltas, Cummins and Sadbhav
Guidance highlights:
Cummins guided for domestic revenue growth of 10-15% in FY20 and export growth guidance of flat to negative.
Bharat Electronics: Revenue growth guidance of 13-15% and operating margins of 20-21%.
L&T: It guided for sales growth of +12-15% YoY, orders increase of 10-12% and EBITDA margin of 10.5% (ex-
services) in FY20.
June 2019
17

Strategy
Exhibit 33: Book-to-bill ratio stands at 2.1x
Order book (INR b)
BTB (x)
CEMENT: Improvement in profitability led by better realizations
Profitability increase led by realization gains and healthy volumes:
Cement companies under our coverage
universe reported volume growth of 12% YoY in 4QFY19 (our estimate: 6%YoY). EBITDA/t improved 11% YoY to
INR891 (our estimate: INR877), led by a 2% YoY increase in realization and flat cost curve. As a result, EBITDA
improved 20% YoY to INR61b (our estimate: INR60b). PAT grew 14% YoY to INR30b (our estimate: INR29b).
Healthy volume growth:
Volume growth was healthy at 12% YoY. Industry grew by 10% YoY in 4QFY19, as all-
India utilization stood at 78%, highest in the last 28 quarters. Roads and low-cost housing projects like Pradhan
Mantri Awaas Yojana (PMAY) are driving growth. Prices increased by 4-5% QoQ in south and 2% QoQ in west.
Prices rose by a marginal 1% QoQ in central India but were flat in east and north. Overall industry pricing
improved 1-2% QoQ.
EBITDA/t up 11% YoY:
Cement companies reported aggregate sales of INR309b (+13% YoY, +15% QoQ), led by
higher volumes and a 2% YoY increase in realizations. Cost/t remained flat YoY and declined 4% QoQ due to
moderation in power & fuel and freight cost/t. Some companies also benefitted from higher operating leverage.
Hence, EBITDA/t stood at INR891/t (+11% YoY, +23%QoQ).
Top picks:
We prefer companies with higher exposure to north, as this region is poised to witness a maximum
improvement in capacity utilization over the next two years. Our top pick to play the north theme is
JK Cement.
We also like
ACC,
which is in capex growth mode and should witness an improvement in profitability.
Positive surprise:
Ultratech, Birla Corp, Orient Cement, Prism Cement, Sanghi Industries
Negative surprise:
ACC, Ambuja, India Cement
Guidance highlights:
Across India, cement players hiked prices by INR20/bag in Apr’19, followed by another hike of
INR10-30/bag in May’19, which was partly rolled back toward end-May. While there was a slowdown in construction
activities in the run up to the general elections, we still expect companies to report better margins in 1QFY20, led by
higher realizations.
Exhibit 34: Volume growth of 12% YoY for MOFSL Cement
Universe
Aggregate Vol (m ton)
12
-4 -1 -3
3
16
7 6
-6
5
0 3
8
2 4
8 8
Volume growth (%)
21
13
14 17 14
10 12
Exhibit 35: Profitability increased 11% YoY
Aggregate EBITDA (Rs/ton)
June 2019
18

Strategy
Exhibit 36: Trend in key operating parameters
Volume (m ton)
4QFY19
YoY (%) QoQ (%)
7.5
5.5
0.0
6.4
2.4
3.9
21.3
15.4
19.0
3.9
13.2
19.9
3.3
7.7
12.6
7.3
13.3
23.1
2.9
5.8
15.3
2.9
32.0
27.7
3.3
20.2
19.8
1.8
9.2
21.3
1.8
4.8
16.7
0.7
14.0
6.5
63
12
15
Realization (INR/ton)
EBITDA (INR/ton)
4QFY19 YoY (INR) QoQ (INR) 4QFY19 YoY (INR) QoQ (INR)
4701
70.1
-12.9
708
17.2
27.7
4596
-6.3
-75.1
727
-88.0
68.4
4930
53.0
6.4
1039
116.7
262.5
4625
58.3
72.1
804
44.9
158.7
4697
173.0
246.7
577
64.7
121.4
4225
67.8
-89.5
1103
146.7
35.3
5182
343.9
84.8
971
303.0
127.9
3983
-39.1
-73.3
446
-8.3
19.6
4640
68.4
247.8
987
-13.9
202.5
4101
405.0
318.8
835
390.8
584.4
4545
20.7
154.3
971
153.5
270.8
3903
-187.5
-103.5
651
-14.4
167.0
4,662
72
21
891
85
166
ACC
Ambuja Cement
UltraTech
Birla Corp
India Cement
Shree Cement
J K Cements
JK Lakshmi Cem.
Madras Cement
Orient Cement
Prism Cement
Sanghi Industries
Sector Agg.
CONSUMER: Weak quarter; expect demand recovery post 1QFY20
Sales/EBITDA/PAT largely in line for our coverage universe:
Consumer Universe revenue grew 9.8% YoY (our
estimate: +11.7%), EBITDA increased 6.5% YoY (our estimate: +11.3%) and adj. PAT grew 10.2% YoY (our
estimate: +7.8%). Volume growth across our coverage was slightly lower than our expectations. 9 of the 19
companies under our coverage reported EBITDA that was either in line or above our estimate. Coverage
companies’ aggregate EBITDA margin at 23.8% was below our estimate of 24.5%.
Slowdown in demand scenario:
Companies across the board called out a slowdown and also indicated that this
could persist in 1QFY20. Management is hopeful of a recovery post 1QFY20 as a result of benefits announced in
the budget reaching rural customers and anticipated normal monsoon. Commodity costs are largely benign –
while this is good for margins, it is affecting realization growth. If volume growth slowdown persists,
promotional intensity could increase, leading to weak sales growth.
We downgraded Asian Paints to Sell from Neutral
on account (a) the slowdown amid a higher fixed cost
environment, with APNT having just finished a massive round of capacity addition (>50% capacity added over
the last six months), (b) the weakening operating performance and (c) the deteriorating mix over the past few
quarters severely affecting the gross margin.
We also downgraded Pidilite to Neutral
on account of near-term headwinds.
Top picks: BRIT, HUL and MRCO due to their ability to outpace peers on earnings growth.
BRIT
is well poised given its sustained strong growth in volumes, strong pace of new launches and continued
cost efficiencies.
HUL:
It is a key beneficiary of the confluence of positive factors which are likely to drive rural volumes as
well as strong premiumization trend.
MRCO:
It is a high-quality franchise offering better earnings visibility relative to peers, led by the benign
input cost environment and increasing rural salience.
Positive surprise:
GSKC
Negative surprise:
APNT, DABUR, HMN, GCPL, JYL, PAG, PIDI, UBL
Guidance highlights:
HUVR:
Macroeconomic indicators are pointing toward some pressure on near-term market growth.
Nevertheless, HUVR appears confident of performing well even in a relatively difficult environment.
MRCO
is targeting 8-10% volume growth in India and double-digit CC growth in international business. Domestic
EBITDA margins are targeted to be over 20% and international margins over 18%.
APNT:
Near-term growth outlook remains uncertain.
BRIT:
Double-digit steady state volumes should be possible in the medium-to-longer term. Near-term
disruptions should be present. Management expects a modest increase in inflation from current levels and will
take price hikes in the future.
June 2019
19

Strategy
CLGT:
Management will prioritize growth even if it comes at the cost of near-term EBITDA margins.
EMAMI:
Focus will be on volume growth with price growth in the range of 2.5-3% in domestic business.
Management believes that current margins are sustainable.
PIDI:
Company expects slower near-term market growth and is cautiously optimistic of growth hereon. EBITDA
margin guided at 21-24%; expansion should be primarily led by gross margin.
DABUR
is targeting high-single-digit volume growth in India FMCG in FY20, with 2-3% realization growth.
GCPL:
Strong sales growth expected in FY20 due to innovation and a better go-to-market strategy.
UNSP:
Management reiterated its medium-term target of double-digit sales growth and mid-to-high-teen
operating margins over this period.
4Q17
10.0
2.0
(3.0)
2.4
(1.5)
5.0
(1.0)
4.0
0.0
10.0
15.0
10.0
6.0
7.0
1Q18
4.0
2.0
(5.0)
(4.4)
(18.0)
(9.0)
0.0
0.0
1.0
(9.0)
(9.0)
(8.0)
(9.0)
0.0
2Q18
9.0
5.0
(0.9)
7.2
10.0
15.0
2.5
4.0
(6.0)
8.0
12.0
3.0
12.0
15.0
3Q18
6.0
11.0
12.0
13.0
6.0
15.0
15.0
11.0
(3.0)
9.4
15.0
8.0
0.0
23.0
4Q18
10.0
11.0
4.0
7.7
8.0
15.0
8.0
11.0
(2.0)
1.0
(5.0)
11.0
(1.0)
13.0
1Q19
10.0
11.0
4.0
21.0
18.0
10.0
12.0
12.0
1.0
12.4
9.0
15.0
10.0
20.2
2Q19
11.0
11.0
7.0
8.1
(4.0)
10.0
10.0
10.0
6.0
6.0
8.0
5.0
5.0
11.0
3Q19
21.0
7.0
7.0
12.4
3.5
0.0
8.0
10.0
7.0
5.0
9.0
7.0
2.0
13.0
4Q19
10.0
7.0
5.0
4.3
0.0
NA
6.5
7.0
8.0
8.0
6.0
1.0
18.0
4.0
Exhibit 37: Quarterly volume growth
Quarterly volume growth (%)
Asian Paints (Domestic decorative)*
Britannia (Base business)
Colgate (Toothpaste)
Dabur (Domestic FMCG)
Emami (Domestic)
Godrej Consumer (Soaps)*
GSK Consumer (MFD)
Hindustan Unilever (Domestic)
ITC (cigarette)*
Marico
Domestic
Parachute
VAHO
Saffola
Pidilite (Consumer bazaar)
*Our estimate
Source: Company, MOFSL
Exhibit 38: Momentum in sales growth hurt by slowdown in demand
Consumer aggregate sales growth YoY (%)
12.4
9.9
7.4
7.7
1.7
6.9
1.4
7.2
7.6
13.6
11.2
9.8
Source: Company, MOFSL
Exhibit 39: Consumer aggregate EBITDA margin down 70bp YoY
Consumer aggregate EBITDA margins (%)
23.6
22.8
22.8
22.9
22.7
24.2
24.6
24.2
24.3
23.9
23.8
23.1
Source: Company, MOFSL
June 2019
20

Strategy
Exhibit 40: Aggregate adj. PAT growth lowest since 1QFY18
Consumer aggregate adj. PAT growth YoY (%)
16.4
11.4
0.9
0.0
10.4
17.3
19.6
14.9
12.7
10.2
13.1
12.6
Source: Company, MOFSL
FINANCIALS-BANKS: Coverage ratio improves; earnings outlook getting stronger
It was a mixed quarter for banks with private banks delivering a healthy operating performance, led by (a) a
revival of domestic credit growth, (b) margin improvement due to lower interest reversal and (c) fee income
boosted by retail fees, while credit cost remained elevated due to downgrade of ILFS exposure and a few other
names getting added to the stressed pool. However, most PSBs reported losses due to elevated credit cost as
banks made ageing-related provisions toward NCLT accounts (Essar Steel, Alok & Bhushan Power) and ILFS
downgrade. However, asset quality trends also improved, with most corporate banks (e.g., AXSB, ICICIBC, SBIN,
BOB) reporting benign slippages and higher recoveries and write-offs during the quarter.
Private Banks – strong operating performance, NPL formation has subsided:
Private banks demonstrated a
strong operating performance improvement, with a steep decline in net stressed loans (barring IIB and YES due
to IL&FS downgrade/new names added to the stressed pool). HDFC Bank maintained steady earnings growth,
ICICIBC and RBK reported margin expansion, while KMB and DCB delivered stable margins. A few private banks
like AXSB have increased focus on retail deposits to support loan growth momentum.
Public Sector Banks – Coverage ratio has improved significantly:
Most of the PSBs either reported losses or
subdued profits led by elevated credit cost due to ageing-related provisions toward NCLT accounts (Alok, Essar
and Bhushan) and select banks making provisions toward large potential stressed groups and IL&FS. The trend in
slippages has improved, though a few banks like PNB reported elevated slippages. However, healthy recoveries
and write-offs enabled a decline in GNPA/NNPA ratios. SBIN, BOB and PNB appear to be better placed to benefit
from resolution of bad loans.
Small Finance Banks – strong growth momentum:
AU Bank and Equitas reported strong loan growth, led by
healthy disbursements in vehicle finance/MSME loans. Equitas continues de-risking its balance sheet with a
focus on non-MFI. C/I ratio for AU Bank has improved, but slightly increased for Equitas.
Life Insurance – protection business mix improves further:
In FY19, the share of the protection business (total
APE basis) stood at 16.7% for HDFC Life, while it stood at 9.3% for IPRU Life. VNB margins and persistency
improved for both HDFC Life and IPRU.
Our view:
The outlook for corporate banks is improving, given the moderation in slippages, the reduction in total
stressed loans and the improving profitability. Revival in credit growth, along with improved pricing power, will help
drive faster NII growth. For corporate lenders, we expect earnings to accelerate significantly from FY20.
Top picks:
AXSB, ICICIBC and HDFCB among private banks, and SBIN among PSBs.
Positive/Negative surprises:
YES surprised negatively during the quarter, while RBL and DCB performed
marginally better than our expectations. IIB and INBK missed our estimates.
Rating change:
In 4QFY19, we have upgraded DCB Bank to Buy from Neutral.
June 2019
21

Strategy
Guidance highlights:
AXSB:
Yields are expected to improve led by an improving asset mix. However, margins are likely to remain flat
as funding cost stays elevated. Also, expect card business is likely to gain traction and expand market share.
ICICIBC:
Credit cost of 1.2%-1.3% in FY20 as PCR has already crossed targeted ~70%. Also, expect margins to
remain stable at 3.4% with a positive bias.
RBL:
The bank continues to maintain cautious stance on Agri book. It also aims to grow at 30%-35% CAGR with a
target mix of 50%.
KMB:
The bank retained its cautious stance on the SME/business banking segment and the NBFC/HFC sector.
The bank continues to focus on retail term deposits below INR10m. Also guided for stable/improving credit cost.
HDFCB:
It maintains cautious stance toward Agri book, while it expects wholesale growth to pick up. The bank
expects margins to remain within the long-term range of 4.0%-4.4%. Also, it further expects C/I ratio to improve
on the back of digitalization. The bank is fully prepared for either verdict on succession planning by the RBI.
SBIN:
The bank expects credit growth of 12%-14% in FY20. It expects recoveries of INR350b-INR380b in FY20
(recovery of INR160b on the three NCLT accounts – Essar Steel, Bhushan Power and Alok Industries).
Exhibit 41: Operating performance for private banks
remains strong
4QFY19 NII Growth (%) PPP Growth (%) PAT Growth (%)
QoQ
YoY
QoQ
YoY
QoQ
YoY
PSBs
SBIN
1
15
34
7
(79)
NM
PNB
(2)
37
(8)
NM
NM
NM
BOB
7
27
9
45
NM
NM
INBK
3
8
9
7
NM
NM
PBs
AXSB
2
21
(9)
37
(10)
NM
FB
2
17
7
28
14
163
HDFCB
4
23
1
23
5
23
ICICIBC
11
27
1
(17)
(40)
(5)
IIB
(2)
11
(2)
17
(63)
(62)
KMB
4
18
18
13
9
25
DCB
2
14
7
31
12
50
YES
(6)
16
(34)
(38)
NM
NM
RBL
13
48
12
46
10
39
Exhibit 42: Net stressed loans continue declining; margins
have bottomed out and showing recovery signs
Loan
Net Stress
4QFY19
NIM (%)
Growth (%)
Loans (%)*
4QFY19 3QFY19 QoQ
YoY 4QFY19 3QFY19
SBIN
2.8
2.8
6.7
13.0
3.4
4.8
PNB
2.5
2.6
5.5
5.7
7.1
8.8
BOB
2.9
2.7
4.5
9.7
3.3
4.3
INBK
3.0
2.9
5.9
15.8
5.2
5.4
AXSB
FB
HDFCB
ICICIBC
IIB
KMB
DCB
YES
RBL
3.4
3.2
4.4
3.7
3.6
4.0
3.8
3.1
4.2
3.5
3.2
4.3
3.4
3.8
4.0
3.8
3.3
4.1
4.1
4.4
4.9
4.0
7.6
4.7
3
-1.0
8.9
12.5
19.9
24.5
14.5
28.6
21.2
16
18.7
34.9
4.4
3.3
0.4
5.9
1.3
0.8
0.8
2.7
0.7
5.2
3.7
0.4
6.8
0.8
0.7
0.9
2.0
0.8
*Net Stress loans = NPA + watchlist/ vulnerable pool + Stressed
assets under various dispensations less overlap
Exhibit 43: PSBs’ domestic loan growth (YoY %) improves
slightly, though private banks continue gaining market share
Exhibit 44: Margins remain stable/slightly improving for
most banks
3QFY19
4QFY19
June 2019
22

Strategy
Exhibit 45: Net slippage ratio – All coverage PSU banks
reported a decline in GNPL portfolio
SBIN
PNB
CBK
BOB
BOI
UNBK
INBK
FY17
2.2
2.3
2.9
1.7
4.5
2.9
1.9
FY18
1.3
6.7
2.2
1.9
(0.6)
2.9
1.5
1QFY19 2QFY19 3QFY19 4QFY19
(0.1)
1.5
(0.0)
0.5
(1.1)
1.9
(0.4)
3.4
(0.0)
2.1
2.7
1.6
1.7
0.6
1.5
1.5
2.4
1.2
2.0
0.8
4.4
1.4
1.6
2.6
(0.5)
1.5
2.3
0.4
Source: MOFSL, Company
Exhibit 46: Net stressed loans have moderated for all PSBs
GNPA (%)
NNPA (%)
NSL (%)
% of loans 3QFY19 4QFY19 3QFY19 4QFY19 3QFY19 4QFY19
SBIN
8.7
7.5
4.0
3.0
4.8
3.4
PNB
16.3
15.5
8.2
6.6
8.8
7.1
CBK
10.3
8.8
6.4
5.4
7.3
7.1
BOB
11.0
9.6
4.3
3.3
4.3
3.3
BOI
16.3
15.8
5.9
5.6
8.5
8.0
UNBK
15.7
15.0
8.3
6.9
9.8
8.2
INBK
7.5
7.1
2.4
3.4
5.4
5.2
Source: MOFSL, Company
FINANCIALS – NBFCs: Divergent performance
4QFY19 was a key quarter for our coverage universe. Performance was divergent across sectors, and more so,
across companies within a sector. Bajaj Finance was an outlier, showing no signs of liquidity problems.
Liquidity management:
Liquidity remains a key challenge for most players. While the companies have managed
the liquidity situation, they have been curtailing disbursements. Like in 3Q, the share of CPs for most NBFCs
declined sequentially in 4Q too. There has been a shift toward bank borrowings from market borrowings.
HFCs report a modest quarter:
Growth remains sluggish, especially on the wholesale lending front. Retail
growth for HDFC, LICHF and PNBHF has been steady. IHFL’s disbursements bounced back from 3QFY19 lows, but
remain significantly below the run-rate. Interestingly, the quantum of sell-downs in the quarter also reduced
meaningfully from 3QFY19 highs. As a result, the upfront assignment income also declined QoQ. Margins remain
under pressure. There were no significant asset quality issues with any player. However, PNBHF disclosed a
watch-list of accounts that would be closely monitored.
Vehicle financiers embrace an auto slowdown:
Disbursement growth for vehicle financiers slowed due to two
factors — the OEM slowdown, and high base of 4QFY18. Yet, CIFC reported impressive disbursement growth of
11% YoY compared to our estimate of 1% YoY. SHTF witnessed a pick-up in disbursements but margins were
lower sequentially. All vehicle financiers have guided for a slowdown in growth in FY20 too.
Diversified/corporate financiers:
Bajaj Finance was an outlier delivering 40%+ AUM growth, notwithstanding
the tight liquidity environment. At the same time, margins were higher on a YoY basis. Other corporate
financiers were on a strong growth path, given the emerging opportunities in corporate lending due to asset
quality issues at corporate banks. However, PIEL witnessed some deterioration of asset quality and also put up a
watch-list of accounts that would be closely monitored.
Our view:
We remain cautious on housing finance companies but recommend investing in good parentage
names like HDFC and LICHF, as such players have the easiest access to debt capital at the best price. Vehicle
financiers are likely to face a tough FY20 – hence growth would be a key monitorable. In addition, credit costs
are likely to increase as asset quality stabilizes.
Positive surprise:
CIFC, BAF
Negative surprise:
Repco
Guidance highlights:
Among the HFCs, PNBHF continues to guide for 1.5-1.8x of industry growth, while Repco
has guided to 14-15% AUM growth with stable margins. With incremental thrust on mortgages, BAF targets 36-
38% share from mortgages in the medium term, compared to 30% currently. All vehicle financiers have indicated
a slowdown in growth for FY20 – CIFC has guided for 15% YoY AUM growth in FY20 v/s 20% earlier. MMFS has
guided for 500-600bp higher disbursement growth compared to the auto industry.
June 2019
23

Strategy
Exhibit 47: IHFL AUM growth drop sharply (%)
60.0
50.0
40.0
30.0
20.0
10.0
0.0
-10.0
Q4 2018
Q1 2019
Q2 2019
Q3 2019
Q4 2019
Source: MOFSL, Company
HDFC
LICHF
PNBHF
IHFL
Exhibit 48: CIFC maintains healthy AUM growth (%)
35.0
30.0
25.0
20.0
15.0
10.0
5.0
Q4 2018
Q1 2019
Q2 2019
Q3 2019
Q4 2019
Source: MOFSL, Company
CIFC
SHTF
MMFS
Exhibit 49: PAT growth of NBFC universe has declined in the past few quarters
44
36
20
8
24
28
19
14
19
22
30
22
26
16
16
Source: MOFSL, Company; Note: FY18 and FY19 numbers are as per Ind-AS, others as per IGAAP
HEALTHCARE: Niche launches in US offset to some extent by DF weakness
Aggregate revenue trend for companies under our coverage took a breather with 13.2% YoY (our estimate: 14%)
growth for the quarter. YoY growth in EBITDA and PAT was at 16% and 7% YoY, as against our estimate of 23%
and 19%, respectively. This was largely led by weaker-than-expected performance by SUNP and CDH.
The aggregate performance has been affected largely by a significant reduction in DF sales by SUNP on account
of a change in distribution mechanism. Excluding SUNP’s financials, aggregate revenue/EBITDA/PAT were up by
15%/27%/11% for 4QFY19.
DF sales declined 15% YoY, affecting the overall performance of pharma companies. The decline was led by a
considerably reduced business by SUNP and a gradual slowdown in revenue of other companies.
Difficulty in pushing inventory to trade channels led to a softer 4Q for most of the companies, barring pharma
MNCs like Abbott/Sanofi India.
Further, the impact of Jan Aushadhi initiative by the government and trade generics took a toll on overall DF
growth.
Interestingly, US sales continued the uptrend for the fifth consecutive quarter, with 16% CC YoY growth in
4QFY19. Favorable INR further supported this growth.
Growth in US sales was led by new business opportunity for SUNP, superior execution/acquisition for ARBP, at-
risk launch for Cipla and exclusive launch for LPC.
The base business in the US generics segment continued to suffer from price erosion, albeit at lower intensity.
The ANDA pipeline has been strong with 807 ANDAs pending for approvals on an aggregate basis. LPC had
maximum ANDAs pending for approval as at end-4QFY19.
Lower share of higher-margin DF business, product recalls and continued price erosion in key molecules led to a
50bp YoY contraction in the gross margin. However, operational cost rationalization and the focus on
productivity drove a 50bp YoY improvement in the EBITDA margin on an aggregate basis for the quarter.
24
June 2019

Strategy
YoY growth in PAT was less than EBITDA growth, led by increased depreciation and a higher tax rate for ARBP,
higher interest cost for CDH and lower other income/higher tax rate for Cipla.
We expect better prospects in the coming quarter on the back inventory rationalization largely being done in DF
segment, healthy momentum in approvals for the US generics segment and a favorable scenario for the API
business. Regulatory headwinds remain the key risk in the developed market.
Top picks:
Ipca Lab, Alkem Lab and Aurobindo Pharma.
Positive surprise:
CIPLA’s earnings were better than estimates led by increased traction from at-risk launch.
LPC
was operationally better than estimates on the back of exclusive product launch, but earnings were below
estimates due to higher tax outgo. Even
ARBP
was operationally better than estimates led by superior execution
in the US, while earnings trailed estimates due to increased depreciation and tax outgo.
Negative surprise: DRRD’s
earnings were lower-than-estimates. Competition in key products, increased
manufacturing overheads, adverse impact of inventory management and unfavorable currency impacted
performance of the quarter.
Guidance highlights:
SUNP
guided for single-digit to low mid-teen YoY growth in FY20 over reported FY19 revenues.
Despite high base of FY19 witnessed in US sales,
CDH
guided to maintain business to remain at similar levels
(USD900m) in FY20.
LPC
guided for 20+ launches in US market, despite ongoing regulatory issues at its Goa site. Particularly, LPC
guided for g-Proair launch in 2HFY20. LPC also plans to launch biosimilar Etanercept in Japan and EU in 2HFY20.
DRRD
indicated that launch of g-Copaxone is unlikely in FY20. There are no pending queries related to g-
Nuvaring.
IPCA
guided for overall sales growth to be 12-14% in FY20 on YoY basis. Remediation cost to come down to
INR80-100m in FY20 from INR490m in FY19.
TRP
has guided to launch at least 10 products in the US market over next one year.
In Biologics,
BIOS
guided for revenue momentum and core EBITDA margin(Ex-R&D) to sustain in FY20 as well; (2)
Branded Formulation sales growth would remain moderate due to revised downward pricing in the UAE market
With favorable API prices,
ALKEM
guided for gross margin to improve over the medium term.
ALKEM
also
guided for EBITDA margin to expand by 100-150bp YoY annually over the next 2-3 years.
ALPM
intends to launch 15-20 products in the US next year.
AJP
guided for 9-11% growth in branded generics segment and 25% YoY (constant currency) in US market in
FY20.
DIVI
guided for 12-15% YoY growth in revenue and EBITDA margin to be in range of 35-37% for FY20. With
completion of capex by FY20, the YoY growth in revenue would further pick-up in FY21.
GNP
guided for revenue to grow by 10-15% YoY in FY20. US business is likely to grow at mid-single-digits.
STR
guided for US sales growth to be 20% over exit run-rate of USD200m (annualized).
Jubilant Life Science
has guided for stable performance in FY20. Will continue to strengthen balance sheet and
reduce debt thereby improving financial ratios.
GRAN
guided for CAGR of 20% in sales and 25% in PAT over next three years
June 2019
25

Strategy
Exhibit 50: DF sales YoY growth on declining trend
Agg DF sales (INRb)
10.6
10.9
20.3
27.7
0.1
8.5
(14.8)
(14)
1.6
(16)
1.6
(12)
(12)
Growth (%)
Exhibit 51: US sales growth strengthens further
US sales (USDm)
2
(0)
YoY growth (%)
1.0
6.2
16.0
(4.3) (9.7)
83.0
86.8 115.7 107.6 99.9 110.9 115.8 116.8 99.5
1.6
1.6
1.6
1.5
1.6
1.7
1.9
Source: MOFSL, Company
Source: MOFSL, Company
Exhibit 52: Though GM is down 50bp YoY…
Agg. Gross margin (%)
64.4
64.2
63.5
63.0
63.0
63.7
Exhibit 53: …EBITDA margin is up 50bp YoY
Agg. EBITDA margin (%)
21.7
19.3
17.4
21.2
19.1
19.6
20.7
21.2
19.6
64.1
63.4
63.9
Source: MOFSL, Company
Source: MOFSL, Company
MEDIA: TRAI’s new tariff order hurts performance
Revenue for our media universe grew at a healthy 19% YoY
(our est.: +13%). However, ex-PVR (due to SPI
consolidation), revenue growth was lower at 15% YoY. Despite subdued ad/subscription revenue growth
(impacted by the TRAI’s new tariff order), broadcasters – ZEE/SUNTV – reported strong top-line growth,
primarily on the back of stellar growth in other biz (movie revenue). Uptick in government category ad spends in
the run up to the general elections provided an impetus to growth for the print/radio pack.
Despite healthy revenue growth, overall margins contracted by 30bp YoY.
This was primarily due to a steep
contraction in broadcasters margins (ZEE: -120bp YoY / SUNTV: -440bp YoY) due to higher investments in
content – traditional as well as digital. Contrary to broadcasters, the print pack reported 20-130bp margin
expansion on the back of moderation in newsprint cost, while the radio pack margins expanded 220-300bp YoY
led by inherent operating leverage. Aggregate PAT for the media universe grew 14% YoY, but ex- PVR, it grew
11% YoY.
Increased focus on digital:
Broadcasters have stepped up investments in digital content.
EPS upgrade for PVR; downgrade for RADIOCIT:
We upgrade our FY20 earnings estimate for PVR by 13%, mainly
due to its better-than-expected performance. However, we downgraded our FY20 earnings estimate for
JAGP/RADIOCIT by ~10%/6% factoring in higher SGA and finance cost.
Top picks:
We prefer SUNTV and PVR
Positive surprise:
ZEE and PVR
Negative surprise:
SUNTV
Guidance highlights:
ZEE:
(a) To deliver better-than-industry TV ad revenue growth and low-teens subscription revenue growth in
FY20 and (b) FY20 margins at 30%+, despite heightened investments.
June 2019
26

Strategy
SUNTV:
(a) 14-15% subscription revenue growth in FY20 and (b) currently, ~38% homes in Tamil Nadu are still on
analog signals. Expect additional 6-9 months for Tamil Nadu to get fully digitized.
DBCL:
Full benefit of the drop in newsprint prices to reflect from 2Q/3Q.
JAGP:
(a) 8% print ad growth and 10% radio growth in FY20. (b) 10-15% savings in RM cost in FY20.
PVR:
(a) Addition of 80-100 new screens in FY20. (b) Double-digit ad growth in FY20. (c) FY20 SPH should see
growth similar to that in FY19 (+2% YoY).
Exhibit 54: MOFSL media universe revenue growth and
EBITDA margin trend (%)
Revenue growth YoY (LHS, %)
30.0
20.0
10.0
0.0
-10.0
-20.0
EBITDA margin (RHS, %)
38.0
36.0
34.0
32.0
30.0
28.0
7.0 6.3 7.3 6.3 7.1 7.3 7.6 6.9 7.6 7.9 8.6 6.9 9.9 8.8 11.4 7.8
36
21
0
Exhibit 55: MOFSL media universe PAT growth trend (%)
Aggregate PAT (INR b)
46
1
17
3
9
7
7 13 0
YoY growth (%)
31
33
12
13
METALS: Steel spreads compress as lower prices seep in
Metals pack exhibited a muted performance, with overall sales/EBITDA increasing 4%/0% QoQ. This was driven
by compression of product spreads on the back of lower realizations, offset by higher volumes. Adj. PAT (+5%
QoQ), however, was 29% ahead of our estimate, led by a better-than-expected performance for Hindalco and
Vedanta.
Overall sales/EBITDA/PAT for the metals pack increased 15%/19%/24% YoY in FY19, led by higher metal prices.
Steel volumes recover:
Steel companies’ volumes increased strongly QoQ on a low base. 3Q had witnessed
significant deferral in purchases amid volatility in steel prices. Volumes for Tata Steel S/A increased (+21% QoQ)
on higher offtake from (1) industrial products & projects and (2) branded products and retail segments. JSW
Steel’s volumes rose 17% QoQ on the back of higher exports. SAIL (+31% QoQ) and JSPL (+24% QoQ) also
witnessed strong volumes. Steel production was steady for Tata Steel S/A (+3% QoQ) and JSW Steel (-1% QoQ),
while SAIL’s production improved (+9% QoQ). Accordingly, inventory levels for most companies decreased
sequentially.
Steel margins come off:
Despite higher sales volumes, EBITDA for JSW Steel (-2% QoQ), JSPL S/A (-3% QoQ) and
SAIL (-14% QoQ) declined on a QoQ basis on the back of lower steel prices. Avg. flat steel product prices were
down ~9% QoQ to ~INR41,633/t, while avg. long steel product prices were relatively stable. EBITDA for Tata
Steel S/A, though, was 9% higher on account of volume-led benefit and lower conversion charges. Spreads are
likely to be low in 1Q; pricing/demand has remained subdued amid general elections. SAIL highlighted that
realizations have been on a downtrend, with avg. NSR for April and May at INR40,500/t and INR39,600/t,
respectively (v/s ~INR40,311 in 4Q).
Aluminum NSRs lower:
NSRs for aluminum companies (Nalco, Hindalco, and Vedanta) declined in line with
lower LME prices. Volumes for Nalco rose ~13% QoQ, while those for Vedanta declined ~6% QoQ. Volumes for
Hindalco (+1% QoQ) were steady. Aluminum production for Hindalco (-1% QoQ) and Vedanta (-4% QoQ)
declined, while Nalco’s production increased (+4% QoQ). Cost of production for Vedanta and Nalco decreased
QoQ. NSRs for aluminum companies are expected to decline in 1QFY20 given further lowering in LME prices.
Hindalco expects aluminum prices to show an upward trend from 2HCY19.
June 2019
27

Strategy
Zinc prices steady:
HZL’s zinc revenue was stable at INR54.9b (-1% QoQ). HZL’s EBITDA stood at INR27.9b (-1%
QoQ). Zinc International (subsidiary of Vedanta) reported strong numbers with a 90% QoQ increase in EBITDA on
higher volumes (+42% QoQ).
Top Pick
JSPL:
Ramp-up of JSPL’s new blast furnace at Angul is expected to drive robust growth in steel production over
FY18-20. Despite near-term pressure in steel prices, JSPL is likely to generate significant free cash flow, even
after assuming 20-25% compression in EBITDA/t.
Hindalco:
At current LME, more than 20% of global aluminum smelters would be in losses. We believe this is
unsustainable and expect it to recover. Hindalco given its low-cost integrated production is well placed to
benefit as LME recovers. Novelis will drive growth through investment in high-margin auto-rolled products.
Surprise:
Positive: Tata Steel
reported 12% QoQ EBITDA growth driven by heavy destocking across the group and
higher margins in Europe, partially offset by margins compression in India.
Negative: JSPL’s
consol. EBITDA declined 11% QoQ and was 12% lower than our estimate due to (1) higher
coal costs for Jindal Power, (2) low margins at Oman Steel and (3) shutdown at Wongawalli mine.
Guidance highlights:
JSW Steel
expects 1.5% YoY growth in its sales volume to 16mt in FY20.
Tata Steel
expects realizations in 1QFY20 to increase ~INR1,500/t, driven by lower export mix, renewal of
auto contracts and a recovery in steel prices since February.
Hindalco
expects its cost of production to decrease led by decreasing caustic soda, CPC and furnace oil
prices. The company expects a 3% QoQ decline in CoP for 1QFY20.
JSP
expects cost savings of INR 1,500-2,000/t led by ramp-up at Angul and other operational initiatives.
Estimates change:
We reduce our consol.FY20/21 EBITDA estimate for Hindalco by 8%/12% to account for LME,
marginally higher cost in aluminum India, and realigning currency estimates.
Exhibit 56: Steel EBITDA (INR/ton) declined
20,000
15,000
10,000
5,000
0
-5,000
Average
Tata Steel - India
SAIL
JSW Steel
JSP
Source: MOFSL, Company
Exhibit 57: Steel sales rose 22% QoQ on a low base
Tata Steel
10.8
9.1
SAIL
JSW Steel
JSP
11.1
12.0 12.2 11.3 11.9
13.6
Exhibit 58: Steel realizations decreased
Average
55
45
35
25
JSW Steel
Tata Steel
JSP
SAIL
10.9 10.8 11.5 10.1 11.4
4.3
4.0
3.9 4.0 4.2 3.8 4.0 3.7
3.8 3.6
3.3
3.5
3.3
4.2
3.8
3.6 3.3 3.4 3.0 3.5 3.8 3.7 3.3 3.5 3.2
2.8
2.7 2.2 2.6 3.0 3.2 2.8 3.1 3.3 3.0 3.0 3.2 3.0 3.6
Source: Company, MOFSL
Source: Company, MOFSL
June 2019
28

Strategy
Exhibit 59: Aluminum sales (kt) were up 4% QoQ/3% YoY
kt
1,000
800
600
400
200
0
VEDL
Balco
Hindalco
Nalco
Exhibit 60: Copper sales (kt) – continued to be impacted by
shutdowns
kt
250
200
150
100
50
0
VEDL
Hindalco
Source: MOFSL, Company
Source: MOFSL, Company
Oil and Gas: Highest-ever marketing margins for OMCs; excellent volume growth for CGDs
Aggregates:
Sales for oil & gas sector marginally missed our estimate by 4% (+12.5% YoY). Reported EBITDA
(+7.4% YoY) was 8.3% higher than our estimate, primarily due to the marketing segment of the OMCs and
better-than-estimated petrochemical performance of RIL. Excluding OMCs, PAT was 15.8% below our estimate,
primarily due to the much higher write-off that ONGC had taken in this quarter. Including OMCs, PAT beat our
estimate by 5% (+6.6% YoY).
All-time high marketing margins:
The OMCs reported best-ever marketing margins, supported by stable oil
prices and INR appreciation. As a result, we saw implied marketing margins including inventory gain of
INR6.7/6.5/5.9/lit for IOC/BPCL/HPCL in the quarter. However, the management guided that these are not
sustainable and should revert to normalized ~INR3/lit in the longer run.
Refining margins disappoint:
Led by poor global demand, Singapore GRM slipped from USD4.3/bbl in 3QFY19 to
USD3.2/bbl in 4QFY19. Further, narrowing of light-heavy differential resulted in GRM of USD8.2/bbl for RIL v/s
USD11.0/bbl in 4QFY18. Even the OMCs reported core GRMs of USD1.4-2.6/bbl in the quarter. 2019 is expected
to witness the highest-ever expansion in refining capacity. This, combined with the lack of global economic
recovery and decreasing supply of heavier crude, is likely to have a bearing on the refining margin in 2019 and
2020.
CGDs report good volume growth:
IGL reported 17% YoY volume growth in the quarter, 16% in CNG and 20% in
PNG. MAHGL reported 7% YoY volume growth. However, due to weakness in real estate impacting demand of
ceramic, GUJGA reported a decline of 7% YoY in PNG-industrial/commercial segment, while CNG witnessed 8%
YoY growth in the quarter.
Ratings and earnings change:
We have reiterated all our recommendations except for GUJS where we witnessed
the startup of RIL’s coke gasifiers having an adverse impact on sales volume. We also cut the P/E multiple for
Castrol from 30x to 25x, and thus, reduced its target price from INR221 to INR190 (estimates and Buy rating
maintained).
Top picks:
IOCL and Petronet are our top picks in the sector. Oil prices are unlikely to rise sharply and post
general elections, we see a stronger reforms era in the petroleum sector which would benefit OMCs in
maintaining stable marketing margins. IOCL remains our top pick due to FCFF generation of ~5% of current
market cap annually for next 2-3 years. Petronet offers a structural story amid huge potential demand of gas in
India, lack of domestic availability of gas, increasing pipeline infrastructure and increasing emphasis on usage of
cleaner fuel by industries.
Positive surprise:
OMCs, RIL
Negative surprise:
ONGC, MAHGL, GUJS, PLNG
June 2019
29

Strategy
Guidance highlights:
RIL
highlighted that refining margins could be under stress for some more time due to global capacity addition.
We build in USD10.3-10.5/bbl of GRM for RIL, as against USD11.3/bbl in FY19. Petrochemical segment is also
likely to witness pressure with the start of large crackers in the US, China and the Middle East.
OMCs
guided that marketing margins may not sustain at these levels. Marketing EBITDA for IOCL almost doubled
YoY in FY19. However, considering that general elections are over and oil prices are unlikely to rise sharply,
marketing margins on auto fuels are likely to sustain at ~INR3/lit.
GAIL
cited that it has placed its entire US LNG contract for 2019 and all except nine cargoes for 2020. It further
guided that with start of four fertilizer plants by 2021, it would be able to sell all its US LNG contracts.
Gujarat Gas
guided that sales volume at Morbi has doubled since 4QFY19 due to the NGT order banning all coal
gasifiers. As a result, we increase our sales volume forecast from 6.4mmscmd in 4QFY19 to 8.8mmscmd in FY20 and
9.7mmscmd in FY21. However, we cut our EBITDA/scm forecast due to increase in low-margin industrial volumes.
Exhibit 61: Highest ever implied marketing margins for the OMCs
IOCL
5.14.6
BPCL
HPCL
5.7
6.76.5
4.9
3.9 3.5
2.93.3
5.9
4.5
4.14.33.8 4.03.8
3.13.2
3.1
4.4
5.24.94.6
Exhibit 62: Core refining margins take a knock
IOCL Core GRM
BPCL Core GRM
HPCL Core GRM
RIL
SGRM
5.0
5.1
6.7
8.3
6.4
6.4
7.3
7.0
6.0
6.1
4.3
3.2
Exhibit 63: Volume growth continues for CGDs
Gujarat Gas
6.1
4.9
2.6
5.75.2
2.7
6.3
5.3
2.7
6.8
5.4
2.8
IGL
6.4
5.5
2.9
MGL
6.7
5.9
3.0
6.6
5.9
3.0
6.46.3
3.0
June 2019
30

Strategy
RETAIL: Increasing competition mounts pressure on GM
Revenue for our retail universe grew 20% YoY
on the back of strong growth in DMART (+32% YoY), TRENT (+27%
YoY), FLF (+29% YoY) and FRL (+18% YoY). A notable feature of 4QFY19 was that the retailers had stepped up
their pace of store additions. This, coupled with modest SSSG, drove overall growth.
Gross margins for overall portfolio contracted 80bp YoY.
Except ABFRL, SHOP and SPENCERS, all retail
companies reported contraction in gross margins. DMART/VMART reported 50bp/100bp YoY contraction on
account of price competitiveness, while TRENT/FLFL reported 290bp/60bp YoY contraction, impacted by higher
share of value fashion format.
Despite a drop in GM, EBITDA margins for our retail universe stood flat YoY
as the drop in GM was offset by
operating leverage benefits. Overall EBITDA grew 21% YoY, mainly led by 28%/44%/36% EBITDA growth in
DMART/FRL/TRENT; ABFRL/VMART, however, reported 23-24% EBITDA de-growth impacted by higher opex.
On
a low base, aggregate PAT grew 44% YoY.
Earnings change:
We have downgraded FY20/21 earnings est. for ABFRL (by 5-7%) owing to higher investments
across segments, FRL (8-14%) on higher depreciation and finance cost, and VMART (4-5%).
TTAN:
The company is among the biggest beneficiaries of growth offered by the shift toward the organized
jewelry market in India with leadership in the branded jewellery space, national presence, strong franchise and
quality management.
JUBI:
We maintain our Neutral rating as earnings growth might come under pressure from (a) the extremely high
base of 25.9% and 20.5% SSSG for the next two quarters, (b) the resumption of store expansion (bringing in fixed
costs absorption challenges) and (c) the absence of material incremental benefits from the Dunkin loss
reduction, unlike the preceding two years.
Top picks:
We prefer ABFRL and TRENT
Positive surprise:
TRENT, FRL
Negative surprise:
ABFRL, VMART
Guidance highlights:
ABFRL:
(1) In Lifestyle, the company expects the 400 gross EBO adds and the renewed focus on marketing spends
in FY20 to drive growth. (2) In Innerwear, the launch of the women’s category and the expansion to 20-25k
outlets (from 12k now) should keep losses at FY19 level; aims for a breakeven in FY21.(3) In Pantaloons, the
company targets to open 60-70 new stores.
SHOP:
For FY20, expect (1) mid- to high-single-digit LTL growth, (2) low-double-digit revenue growth and (3) 40-
50bp/80-100bp gross/EBITDA margin expansion.
VMART:
(1) Targets to increase store count by 25% and achieve 9-9.5% EBITDA margin, assuming SSSG of 7-8%.
(2) Many national players are opening stores in smaller towns, and VMART, too, plans to be aggressive here to
confront competition.
Titan:
Maintained 20% overall sales growth guidance for FY20.
JUBI:
There is some inflation on material costs but the company does not expect any material impact on the
gross margin due to cost savings and other factors. It intends to use the price increase lever sometime in FY20
after over two years of no increase.
June 2019
31

Strategy
Exhibit 64: Momentum in revenue growth slowing down
Aggregate revenue (INR b)
25.9
16.0
9.4
YoY growth (%)
23.2 22.2
13.4 13.5
19.9
30.3 30.1
29.4
Exhibit 65: Pressure on gross margins is …
Aggregate Gross Profit (INR b)
Aggregate gross margin (%)
29.8
29.1 29.2
29.4 29.3 29.4
28.5 28.4 28.5
Source: Company, MOFSL
Source: Company, MOFSL
Exhibit 66: …mounting pressure on EBITDA margins as well
Aggregate EBITDA (INR b)
6.5
5.7
5.6 6.0
Aggregate EBITDA margin (%)
7.7
7.1 6.6 7.6
6.7
6.4
6.3
6.3
Exhibit 67: MOFSL retail universe PAT growth trend
Aggregate PAT (INR b)
YoY growth (%)
91.5
87.2
66.5
44.1
32.6 39.9
20.6
19.3
5.7 6.9 8.0 6.8 8.1 8.3 11.0 8.5 10.4 10.2 13.2 10.3
Source: Company, MOFSL
Source: Company, MOFSL
TELECOM: India wireless biz stages a comeback
A stellar jump in APRU helped clear the major hurdle of a continued downtrend in revenue for the incumbents;
revenue (incl. Bharti India wireless and Idea) grew 2% QoQ. RJio continued to report healthy growth, though
momentum slowed down.
4Q was characterized by turnaround in ARPU.
Minimum ARPU plans by incumbents seemed to have started
reaping benefits – ARPU up 18-20% QoQ (for incumbents), though at the cost of subscriber churn. RJio, on the
contrary, reported a marginal 3% QoQ drop.
Burgeoning debt remained a concern for telcos, with each player having net debt of INR1tr+. Yet, incumbents’
management showcased optimism on the back of rights issue, while RJio seemed to be bullish given the Invit
restructuring.
Top picks:
Bharti Airtel.
Positive surprise:
Bharti Airtel
Guidance highlights:
Idea:
(1) IDEA guided for capex of INR168b for FY20. (2) Subscriber churn due to minimum recharge plans is still
not over. (3) Network integration across circles will complete by Jun’20.
Bharti Infratel:
(1) Merger of BHIN-Indus is on track. Expect completion over the next few months, (2) Most exits
from VIL have come in; adopting a wait-and-watch approach in case there are more.
Tata Comm:
(1) Traditional services’ FY20 EBITDA margin should be in the range of 29-30%, while that of Growth
Services should reach 5-7%. (2) Innovation Services portfolio’s EBITDA losses should remain at current level in
FY20 and turn EBITDA profitable in FY22.
June 2019
32

Strategy
Exhibit 68: Operator-wise active subscriber market share (%)
RJio
Vodafone-Idea
45.0%
35.0%
25.0%
15.0%
5.0%
Bharti
Other players
160
140
120
100
80
FY18
FY19
*Vodafone Idea merged co performance
Exhibit 69: Operator-wise ARPU (INR)
Bharti (India)
Idea
RJio
TECHNOLOGY: Growth healthy, acceleration pauses; watch out for cost pressures
Aggregate performance:
Aggregate sales stood at INR1,115b for 4QFY19, implying YoY growth of 17.1% – largely
in line with a marginal variance of 0.5%. EBITDA increased 14.4% YoY to INR255.7b, below our estimate by 3.1%.
PAT grew 14.7% YoY to INR199b (+1.9% v/s estimates).
Acceleration through FY19, growth rates settled in 4Q:
CC organic revenue growth inched up 200bp in FY19 to
8.4% across tier-1 (including cognizant), led by a revival in the demand environment with digital acting as a
catalyst. The upgrade trajectory halted to 9.2% YoY CC (v/s 9.1% in 3QFY19) across the top-6 companies. Barring
exceptions, growth was largely in line/marginally below expectations. Aggregate CC organic revenue for Tier-I
companies grew 9.2% YoY v/s 6.2% in 4QFY18.
A year of strong headcount addition:
With slowed hiring in FY18 amid the weak demand environment,
companies more than compensated for it in FY19 with total headcount addition of 90,964 by tier 1 companies
v/s 9,200 in FY18. That said, hiring was relatively effected in 4Q despite an increase in attrition across the board,
indicating some pressures going ahead.
Acceleration from US:
Revenue from the US increased 10.5% YoY in 4QFY19 v/s 8.9% in the previous quarter.
Europe was a mixed bag with growth strong in TCS and HCL but muted in Infosys and Wipro. Strong deals should
keep this momentum intact for the US, at least for a couple of quarters.
High attrition and unfavorable H1B norms hurting margins:
Low unemployment levels in the US, high attrition
and a tightening visa regime have been the main factors behind the contraction in the gross margins. For
4QFY19, aggregate gross margins for tier 1 stood at 37.1% (-60bp QoQ). Almost all companies hinted at rising
onsite cost and increasing subcontractors to fulfill demand. Margins have been the key issue at INFO; the trend
has been slightly weak at TCS too, where it was largely expected to get back into its aspired margin band of 26-
28% with currency at ~INR70/USD. In Tier 2, barring LTI and CYL, margins either shrank or remained flat.
Aggregate Tier 1 EBIT margin contracted 80bp during the quarter.
Bridging revenue growth gap between Tier 1 and Tier 2:
With shorter deal sizes and traction developed in
digital projects, Tier 2 growth has inched up. 1QFY19 saw highest growth gap between Tier 1 and Tier 2 at 8.9pp,
but from there, the gap has been reduced quite significantly. 4QFY19 saw the growth gap reduced to 3.6pp
despite less than satisfactory performance of Tier 1 – this is led by account-specific issues in some of the Tier II
companies.
Midcaps – a mixed bag:
Revenue growth YoY for Tier 2 companies remained higher than Tier 1, but was seen
coming off the highs in some instances such as CYL and PSYS. Some companies cited macro/client specific
situations that may have an effect on growth going forward (LTI, LTTS, MTCL, HEXW). We remain positive on
ZENT, CYL and PSYS in the midcap space.
Positive/Negative Surprises:
HCL (+), INFO (-), TECHM (-), CYL (+), TELX (-),
Guidance:
INFO guided for 7.5-9.5% YoY CC growth in FY20 and reduced its margin band by 100bp to 21-23%.
TCS retained its EBIT margin guidance band of 26-28% despite falling short in FY19. WPRO’s also guided for a soft
start, with growth between -1% and +1%. HCL guided for 7-9% YoY CC revenue growth.
June 2019
33

Strategy
Exhibit 70: 4QFY19 performance snapshot
USD revenue – m
Act.
Est.
% beat
5,397
5,393
(0.1)
3,060
3,065
(0.2)
2,076
2,090
(0.7)
2,278
2,273
0.2
1,268
1,288
(1.6)
Act.
25.1
21.4
19.0
19.0
15.4
EBIT margin (%)
Est.
bp beat
25.8
(76)
22.4
(100)
19.1
1
19.5
(50)
15.9
(56)
Act.
81.3
40.8
24.9
25.7
11.3
PAT - INR b
Est.
78.4
40.1
24.7
25.9
12.1
% beat
3.6
1.6
0.8
(1.0)
(6.3)
TCS
Infosys
Wipro
HCL Tech
TECHM
Exhibit 71: Acceleration in growth ex-acquisitions paused
(CC revenue gr. YoY, %)
Aggregate CC organic revenue growth (YoY, %)
Exhibit 72: YoY revenue growth de-accelerated across most
tier-II players
4QFY18
25%
20%
15%
10%
5%
0%
-5%
18%
12%
6%
1QFY19
17%
13%
9%
2QFY19
3QFY19
4QFY19
17% 16%
-1%
UTILITIES: Power demand subdued; coal stocks at power plants improve
Electricity generation increased just 1.5% YoY in 4QFY19. Conventional generation (excluding RE) growth was flat on
a YoY basis. Hydro generation increased ~20% YoY, while coal-based generation declined ~1% YoY. Volumes in the
day-ahead market declined 11% YoY on the back of muted demand. IEX prices were ~32% QoQ lower at
INR3.2/kWh. The tepid generation (demand) was partly on account of an extended winter in certain regions of the
country. Lower demand along higher coal offtake though has improved the coal supply situation at power plants.
Coal stocks at power plants improved to 18 days in Mar’19 v/s just six days in Oct’18.
Major highlights
NTPC:
PAT was boosted by a shift to accrual-based accounting of late payment surcharge income (INR10.8b). If
excluded, the PAT run-rate for 4Q was lower than earlier quarters, despite a positive swing of ~INR6b on account
of FC u/r. However, on an annual basis for FY19, the core generation RoE (after adding back fixed charge under-
recoveries) was broadly steady at ~19-20%.
Power Grid:
Reported PAT grew by 52% YoY to INR32.5b, boosted by prior-period sales and other likely one-offs
on annual tariff adjustments.
NHPC:
Higher-than-expected costs, lower DSM incentives and no benefit of regulatory revenue on the Subansiri
project resulted in a muted performance.
Coal India:
Higher realization (led by better grade management) and lower cash cost led to a robust
performance. For FY19, adj. EBITDA (ex-OBR) grew 48% YoY to INR300.5b and adj. PAT was up 47% YoY to
INR174.6.
JSW Energy:
EBITDA increased 13% YoY to INR4.7b on higher merchant prices.
Tata Power:
Consol. operational performance (EBITDA and PAT of JVs) increased 11% YoY, driven by renewables
(RE) and solar manufacturing.
June 2019
34

Strategy
Torrent Power:
The numbers are not comparable to the previous year, as the company used to follow cash-
accounting for its regulated distribution business until FY18. Assuming similar accounting even in the previous
year, EBITDA would have increased by ~10% and PBT by ~29%.
Guidance highlights:
Power Grid expects capitalization of ~INR200-250b for FY20. NTPC expects capitalization of
~5GW in FY20.
Top Picks
NTPC:
Operations are turning around as availability of coal improves and FC u/r decline. Under-recoveries on
GCV and O&M are well addressed in the tariff regulations 2020-24, which will also support earnings. We expect
capitalization to pick up pace, driving regulated equity CAGR of 14% over FY19-21. Capitalization will outpace
capex, boosting RoE and driving re-rating of the stock. Buy with a DCF-based TP of INR158/sh.
Coal India:
Coal India has managed to keep its cost under control on the back of productivity measures and
shutting down of old mines. We expect this trend to continue, which along with growth in volumes, should aid
~5% earnings growth over the next two years. We find the stock attractive at current levels at ~4xEV/EBITDA (vs.
historical average of 7x) and P/E of 8-9x (vs. average of ~14x).
CESC:
CESC is among the very few opportunities that offer a play on both power distribution and generation. It is
also amongst the few with a strong balance sheet and healthy FCF generation. The existing distribution business
has high RoE and delivers steady growth. Generation assets produce healthy FCF, while untied generation
capacity and scale-up of DFs have the potential to boost earnings. The stock trades attractive at ~8.9x FY20E P/E.
We value the stock at INR841/sh.
June 2019
35

Strategy
Annexure: 4QFY19 performance of companies that have announced results
INR Million
Sales
QoQ
YoY
EBITDA
QoQ
PAT
YoY
Var Vs
Exp
(%)
18.1
-4.4
-0.2
6.9
11.8
-6.4
26.7
0.4
22.8
-6.2
13.8
3.3
39.9
11.4
-10.0
76.7
1.3
2.6
44.4
40.2
17.7
71.1
-1.5
-15.5
-22.7
-60.8
-27.1
-1.7
15.9
27.0
-21.1
5.1
-32.5
25.1
21.6
-17.8
-27.9
2.8
2.8
560.6
-9.6
41.3
2.3
-16.5
-1.5
-1.6
7.4
-2.8
Loss
-0.6
12.3
0.8
Var Vs
Var Vs
QoQ
YoY
Exp
Exp
Mar 19 Chg (%) Chg (%)
(%)
Mar 19 Chg (%) Chg (%)
(%)
1,837,446
8.9
-0.1
-0.9 198,966 16.9
-14.4
-5.9
15,667
-7.5
-0.9
-7.5
2,421
-4.2
14.9
-0.5
88,459
39.9
0.7
-0.8
9,854
51.7
-12.5
-0.1
73,952
-0.2
8.9
3.5
11,623
0.5
-12.6
2.0
16,686
-1.4
13.8
-3.7
4,849
-0.4
21.9
-1.1
27,492
-11.2
-12.9
-9.7
5,165
22.2
-25.3
-14.4
17,605
1.8
4.4
2.4
1,623
13.9
-17.8
10.5
25,001
6.8
-1.1
1.6
6,847
0.8
-14.1
-3.7
19,004
4.8
9.5
-0.2
3,246
28.3
26.1
18.5
16,317
-1.4
13.6
-2.5
1,898
-5.3
9.2
-3.7
25,987
4.1
5.7
-3.3
3,733
19.4
10.4
6.7
78,850
0.3
-7.9
1.0
10,693
-3.2
-22.0
0.9
138,079
7.1
4.7
5.3
18,678
9.7
-6.4
24.1
214,594
9.1
1.4
3.4
22,634
17.2
-24.9
-9.5
171,695
4.2
11.4
2.6
12,428 -10.8
-17.2
-21.0
864,220
12.4
-3.9
-3.8
80,193
34.6
-16.0
-11.5
43,840
-6.0
9.4
3.9
3,081
-18.0
4.4
-0.5
770,550
25.6
9.5
-1.4
97,525
45.9
7.4
-2.7
18,503
-5.9
18.1
7.4
1,455
-32.5
62.6
38.4
38,846
43.0
7.7
-0.1
9,290
21.0
16.7
22.5
102,972
40.4
1.5
-6.8
13,952 537.9
13.3
38.4
15,958
45.2
18.5
5.0
1,094
158.5
81.3
30.5
12,069
17.1
7.2
-2.0
1,685
33.7
2.5
-5.6
13,404
-10.9
8.7
2.1
1,718
-24.2
-0.7
-8.1
6,126
6.2
20.2
-14.0
933
-1.6
11.8
-13.1
8,953
-23.3
10.0
-16.8
770
-31.6
330.4
-25.3
27,519
9.3
8.6
-8.1
3,229
9.6
-9.7
-21.1
449,340
25.8
10.5
-0.7
55,990
40.1
3.9
-11.2
35,496
26.5
8.1
-1.5
4,257
16.3
31.9
13.1
20,737
44.3
43.7
30.1
1,708
59.1
23.6
14.1
20,628
38.3
0.7
-6.8
1,443
24.8
-43.0
-42.1
327,181
11.8
13.7
2.5
61,032
26.0
20.0
1.5
39,191
0.6
8.1
-3.2
5,309
4.1
8.1
-16.8
29,276
2.2
2.3
-5.8
4,633
14.7
-8.6
-12.0
18,728
20.3
13.4
7.3
3,095
49.4
19.9
15.4
53,523
1.1
16.2
0.0
8,986
-14.6
6.4
-16.0
15,640
18.8
11.9
4.1
1,922
42.5
21.2
-9.9
14,919
17.2
13.4
1.2
2,795
32.7
53.9
-2.0
15,293
26.7
22.2
10.0
3,220
52.6
19.6
4.0
2,760
3.7
8.8
-1.3
460
43.2
11.6
20.8
32,849
18.1
16.9
-0.9
8,478
22.9
34.7
-1.7
105,003
19.1
16.6
8.3
22,133
59.2
30.0
22.8
510,658
0.1
9.8
-1.7 121,720
0.0
6.5
-4.3
50,182
-5.2
11.9
-4.1
8,230
-21.1
-2.0
-16.2
27,990
-1.5
10.3
1.8
4,366
-3.4
9.9
-1.5
11,538
4.9
5.7
-2.8
3,104
-1.3
0.9
-7.5
21,282
-3.2
4.7
-4.1
4,572
2.7
-5.8
-8.7
6,396
-21.1
3.7
-1.3
1,547
-42.0
-10.7
-9.9
10,374
4.6
27.9
2.0
287
5.9
73.7
-0.4
24,526
-9.9
-3.1
-7.1
5,796
-6.0
-4.2
-5.5
12,861
15.2
9.0
-1.6
3,185
33.5
27.4
12.6
99,450
4.0
9.3
-0.2
23,210
13.4
13.3
-0.9
Company
Automobiles
Amara Raja Batt.
Ashok Leyland
Bajaj Auto
Bharat Forge
Bosch
CEAT
Eicher Motors
Endurance Tech.
Escorts
Exide Inds.
Hero Motocorp
Mahindra & Mahindra
Maruti Suzuki
Motherson Sumi
Tata Motors
TVS Motor
Capital Goods
ABB
Bharat Electronics
BHEL
Blue Star
CG Consumer Elect.
Cummins India
Engineers India
GE T&D India
Havells India
Larsen & Toubro
Siemens
Thermax
Voltas
Cement
ACC
Ambuja Cements
Birla Corporation
Grasim Industries
India Cements
J K Cements
Ramco Cements
Sanghi Inds.
Shree Cement
Ultratech Cement
Consumer
Asian Paints
Britannia
Colgate
Dabur
Emami
Future Consumer
Godrej Consumer
GSK Consumer
Hind. Unilever
Mar 19 Chg (%) Chg (%)
99,111
55.4
-15.7
1,193
-8.8
8.7
6,625
71.8
-11.2
10,671
-3.2
-1.2
2,995
-3.3
63.1
4,117
22.8
-17.4
669
26.7
-28.1
5,448
2.2
-16.0
1,486
34.1
27.7
1,214
-8.6
7.8
2,107
35.9
11.1
7,303
-5.0
-24.5
10,502 -28.0
-6.4
17,956
20.6
-12.9
4,100
5.4
-23.1
21,387
LP
-31.6
1,338
-25.0
-19.2
60,829
54.9
13.3
890
-30.8
95.2
6,686
31.7
19.7
6,827
255.7
49.3
824
1,223.4 212.1
1,132
42.1
9.7
1,409
-24.7
-12.6
950
4.7
0.1
261
-50.8
-14.6
2,068
5.7
-11.9
34,182
67.4
7.9
2,960
2.9
34.7
1,243
90.7
64.2
1,396
50.6
-28.1
30,055
44.3
13.4
2,389
-5.5
-2.5
3,754
27.1
38.1
1,282
368.5
-2.2
5,360
-11.9
-9.4
439
1,301.0 24.3
1,500
146.2
42.5
1,684
66.6
22.5
264
513.0
42.1
3,210
14.1
-19.6
10,175 126.6
42.5
86,577
2.5
10.2
4,875
-24.7
-1.7
2,946
-2.0
11.7
2,000
4.1
1.7
4,307
17.7
8.7
1,225
-41.3
1.3
-103
Loss
Loss
3,960
-5.2
-6.5
2,572
23.3
21.4
15,900
13.5
12.8
June 2019
36

Strategy
Annexure: 4QFY19 performance of companies that have announced results
INR Million
Sales
Var Vs
Exp
Chg (%) Chg (%)
(%)
6.8
13.3
-0.3
16.1
6.3
-0.5
-13.5
8.7
-3.0
3.6
8.9
-5.3
-14.5
22.9
7.4
-17.7
-0.1
-13.6
11.9
29.8
11.9
-11.3
10.3
-6.9
12.3
10.7
-1.1
-9.9
3.5
-0.3
3.1
19.7
1.4
4.0
22.0
0.5
11.2
34.9
2.1
1.8
20.6
1.6
2.5
14.1
-3.8
4.0
34.0
-3.6
1.8
17.5
-2.8
4.1
22.8
-1.2
10.8
26.5
11.4
-2.4
11.2
-7.1
3.7
18.1
-2.5
12.8
47.6
5.8
-6.0
16.3
-9.3
1.6
18.5
-0.1
6.8
26.6
3.2
2.7
7.7
0.7
-2.1
37.1
-5.2
1.2
14.9
0.1
41.2
15.7
1.9
48.6
15.1
7.4
34.4
16.2
-3.2
4.3
17.4
6.3
6.2
50.2
3.8
2.7
20.9
-0.4
-1.0
17.8
10.5
10.7
-9.4
23.7
-1.7
15.2
-1.5
15.2
21.4
11.2
8.3
28.7
4.8
-3.8
20.0
-2.1
11.6
3.4
10.3
31.5
16.8
27.1
-3.9
1.2
-6.4
0.7
8.1
2.3
-4.9
14.0
-5.2
-0.9
13.3
-0.6
6.2
-2.9
0.6
-9.0
8.6
-1.9
-3.7
24.3
-7.0
0.4
30.7
8.0
-0.8
30.7
-4.8
4.3
14.8
7.0
QoQ
YoY
EBITDA
QoQ
YoY
PAT
Var Vs
Exp
(%)
9.0
10.9
-5.2
3.9
-2.9
-27.2
55.4
6.2
-39.5
-11.1
-48.4
-28.0
12.0
-0.9
3.8
-2.5
8.2
1.4
-55.2
-31.6
1.4
3.0
PL
PL
PL
PL
PL
-77.0
-7.2
-10.0
-2.9
12.0
10.7
-4.9
20.5
-6.8
-7.0
3.2
61.1
-3.8
1.8
36.6
-10.0
18.4
19.0
-10.5
10.3
35.7
-33.2
3.8
10.9
21.1
Var Vs
QoQ
YoY
Exp
Chg (%) Chg (%)
(%)
Mar 19 Chg (%) Chg (%)
5.7
10.3
-2.5
34,819
8.5
18.7
15.1
-6.0
-9.4
670
38.5
11.1
-18.9
12.2
-5.4
2,130
-13.9
18.0
22.1
5.3
1.4
4,750
17.3
8.2
-24.9
-1.9
0.2
901
-27.4
8.3
-27.6
-18.5
-22.1
750
-26.4
-20.4
-5.3
6.1
-4.6
425
38.4
62.7
-17.2
1.8
-9.4
2,464
13.0
-0.1
-30.9
-17.8
-30.7
679
-37.8
-25.3
-20.8
2.9
-1.2
1,308
-38.5
-29.3
6.5
18.4
-0.1 135,911 -46.7
LP
-1.9
8.5
-4.2
95,324 -26.4
29.0
20.7
39.6
9.2
1,182
24.0
42.4
-9.2
36.6
9.7
15,051 -10.5
LP
6.6
30.9
0.1
963
11.9
50.0
3.1
87.3
-12.1
687
10.1
97.3
6.6
28.2
1.2
3,815
14.4
163.1
0.6
22.7
-1.8
58,851
5.4
22.6
1.4
-17.0
0.0
9,691
-39.6
-5.0
-2.3
16.9
-8.4
3,601
-63.4
-62.2
17.7
13.1
-7.9
14,078
9.1
25.2
12.3
46.2
4.9
2,472
9.8
38.8
-33.5
-38.0
-47.1
-15,067
PL
PL
22.0
29.3
4.3
-50,924
PL
Loss
9.1
44.8
7.9
-9,914
PL
Loss
8.6
7.0
-0.6
-1,898
PL
PL
-7.7
LP
-17.6
-47,496
PL
Loss
34.1
6.6
8.7
8,384
-78.8
LP
83.2
49.4
30.8
6,254
15.3
-9.0
168.7
50.1
1.1
3,640
48.2
5.0
25.0
48.4
130.0
2,614
-11.9
-23.3
1.9
23.7
1.2
91,510
18.5
26.5
6.5
61.9
4.4
11,761
11.0
57.3
-7.6
20.5
-9.8
2,919
-4.1
2.3
5.2
28.8
15.6
28,616
36.6
38.2
2.9
17.1
-0.5
10,062
2.1
-7.0
-13.6
15.6
-27.9
5,521
-5.0
104.5
10.0
23.7
3.2
6,936
16.3
16.7
4.8
28.4
-2.3
5,880
84.5
87.0
-3.0
21.1
1.4
416
-9.8
27.7
3.9
-7.3
5.1
5,115
5.4
0.6
8.5
20.1
15.5
3,798
25.3
51.0
-5.2
-3.4
-6.3
515
-7.4
58.1
4.8
8.3
5.8
2,513
-2.9
1041.1
-6.7
14.5
-4.8
7,460
17.4
-27.0
-8.3
15.3
-6.4
48,676 -10.3
6.9
10.2
-8.9
4.8
889
22.4
-5.9
-26.5
2.8
-4.3
1,240
-27.0
32.2
-23.9
80.7
-30.4
1,696
-16.3
77.9
4.0
40.6
10.9
6,636
-4.2
22.6
0.2
76.0
-4.3
2,197
-6.6
92.5
-1.1
-4.6
15.0
4,834
-5.3
-20.3
Company
ITC
Jyothy Labs
Marico
Nestle
P&G Hygiene
Page Industries
Parag Milk Foods
Pidilite Inds.
United Breweries
United Spirits
Financials
Banks - Private
AU Small Finance
Axis Bank
DCB Bank
Equitas Holdings
Federal Bank
HDFC Bank
ICICI Bank
IndusInd Bank
Kotak Mahindra Bank
RBL Bank
Yes Bank
Banks - PSU
Bank of Baroda
Indian Bank
Punjab National Bank
State Bank
Life Insurance
HDFC Life Insur.
ICICI Pru Life
NBFC
Bajaj Finance
Chola. Inv & Fin.
HDFC
Indiabulls Housing
L&T Fin.Holdings
LIC Housing Fin
M & M Financial
MAS Financial
Muthoot Finance
PNB Housing
Repco Home Fin
Shriram City Union
Shriram Transport Fin.
Healthcare
Ajanta Pharma
Alembic Pharma
Alkem Lab
Aurobindo Pharma
Biocon
Cadila Health
Mar 19
119,921
5,043
16,090
30,030
6,993
6,079
6,722
16,389
16,294
22,500
892,244
370,574
3,869
57,056
3,009
3,331
10,965
130,895
76,201
22,324
30,479
7,387
25,059
339,845
50,670
17,635
42,003
229,538
203,038
102,475
100,563
181,825
33,945
8,987
32,052
19,690
14,717
12,005
13,109
1,020
12,208
4,654
1,090
9,035
19,313
455,203
5,152
9,270
18,542
52,923
15,288
37,328
Mar 19
45,717
826
2,830
7,495
1,437
1,197
587
2,788
1,712
2,836
680,704
296,067
2,157
50,144
1,853
1,263
7,548
108,436
62,334
20,677
22,823
5,600
13,234
249,005
38,608
12,454
28,612
169,331
10,023
5,956
4,067
135,632
22,209
5,169
29,991
14,275
9,009
10,915
7,803
813
8,147
5,552
890
5,740
15,120
89,114
1,271
1,780
2,373
11,304
4,100
8,304
June 2019
37

Strategy
Annexure: 4QFY19 performance of companies that have announced results
INR Million
Sales
Var Vs
Exp
Chg (%) Chg (%)
(%)
9.9
19.1
7.2
-6.4
15.5
-3.8
-0.3
8.5
-1.6
0.6
12.4
-1.3
-2.9
21.7
-5.9
-9.0
0.3
-5.1
-12.0
6.5
-9.3
0.4
5.9
0.5
2.6
9.2
-0.6
-1.3
16.1
5.3
15.0
-14.9
6.4
6.6
25.3
-10.5
-8.0
5.0
-4.6
-6.6
7.8
-12.4
18.1
30.9
9.2
22.7
86.2
36.1
8.9
41.0
7.4
59.4
14.6
35.7
10.4
-7.5
-19.7
3.0
12.3
-4.2
-4.2
12.4
-8.2
11.3
12.3
0.0
-5.3
18.6
4.9
-10.8
5.0
0.1
-12.7
10.1
-6.1
-3.4
8.2
1.2
-5.9
7.8
-5.4
-0.6
43.2
9.7
-1.7
24.0
8.8
-6.8
17.0
5.6
4.3
6.1
2.6
1.3
11.0
4.4
-0.9
-12.5
9.7
6.2
18.1
3.9
10.1
9.4
5.4
1.7
-3.4
4.9
-0.2
-6.2
8.7
16.9
8.6
-4.4
2.9
17.4
-2.1
-0.8
-15.1
9.7
-8.9
12.5
-4.0
-10.0
15.5
-9.2
40.3
48.0
42.2
-6.5
13.4
0.9
-5.2
21.6
4.6
-9.9
10.0
-3.2
-4.4
23.8
-5.1
-5.8
11.7
3.6
2.3
25.1
2.6
-9.8
7.5
-1.0
-4.0
23.1
-3.9
-15.2
1.1
-8.6
QoQ
YoY
EBITDA
QoQ
YoY
PAT
Var Vs
Exp
(%)
52.0
-23.2
-26.7
-28.2
8.2
23.1
14.6
-15.7
-27.7
12.2
-39.9
-43.2
-30.2
-39.0
6.6
28.4
-5.9
197.0
-61.4
15.5
58.5
8.8
-7.5
-2.5
-2.9
-11.4
-6.7
58.2
-22.7
4.8
28.9
25.5
6.0
LP
21.7
48.6
10.3
-13.5
-0.5
239.1
5.0
-15.8
-12.4
40.4
-18.8
26.5
-34.2
114.7
2.7
63.3
-14.8
17.2
Var Vs
QoQ
YoY
Exp
Chg (%) Chg (%)
(%)
Mar 19 Chg (%) Chg (%)
35.8
72.6
32.8
5,120
54.1
53.5
-22.3
13.5
-15.1
3,087
-24.7
25.3
-21.6
16.1
-17.0
3,008
-38.0
-0.5
-9.7
19.2
-13.8
1,659
-22.7
9.4
-6.8
142.0
-5.9
622
3.1
204.3
19.2
5.7
13.5
1,183
24.7
12.1
-16.9
49.0
9.4
1,001
-27.8
70.8
-6.5
0.7
-8.1
2,218
-15.9
-0.1
34.4
31.3
18.4
3,225
22.5
-13.9
12.0
14.4
12.9
929
17.2
12.6
43.0
-21.2
-14.7
235
27.5
-22.6
24.9
72.1
6.3
361
51.2
244.2
-46.4
-33.0
-43.5
6,879
-27.0
-25.2
-10.1
14.3
-17.1
1,656
-23.1
12.5
9.2
23.2
11.2
4,341
4.1
-12.3
22.0
124.7
53.9
1,027
14.7
-2.5
0.0
15.4
3.9
2,080
-5.0
-13.2
59.9
19.4
42.4
947
81.8
18.8
14.4
2.2
-9.2
286
-49.1
-59.0
9.7
16.3
-2.0
4,317
33.9
32.8
-5.0
43.6
10.7
793
66.5
328.5
14.7
10.5
-5.0
3,523
28.3
14.9
-14.1
17.9
6.6
7,857
-28.7
33.7
-25.5
6.4
5.3
545
-28.0
-4.6
8.4
23.6
-4.3
198
24.0
69.2
4.1
14.6
1.8
665
-0.1
12.7
11.8
16.8
4.4
184
12.0
12.9
-2.1
70.4
14.5
467
-9.8
78.6
-8.8
16.5
3.3
2,831
-19.4
-2.3
-24.7
12.3
10.8
2,968
-43.4
132.2
0.2
-8.1
6.0
124,148
5.3
-11.3
-4.4
3.6
3.0
15,909
-4.9
38.4
-1.7
-23.0
10.1
20,120
-9.0
-21.3
-11.2
-13.7
-12.3
746
LP
-42.4
-1.4
-9.8
10.1
15,230
-6.2
-30.7
-10.2
-17.8
40.6
3,168
-7.4
-14.0
-12.2
-3.9
5.5
13,587
-9.8
-1.3
-14.1
-14.8
-12.0
5,043
-20.1
-25.1
11.7
15.6
10.3
24,194
7.4
-25.9
8.7
-21.7
10.6
26,150
66.1
14.9
26.3
7.4
8.3
303,784 26.5
6.6
-12.0
8.9
-2.2 181,843 -19.4
-3.5
11.4
47.6
-7.3
617
4.3
27.9
5,682.9 23.4
23.2
31,249 531.1
16.9
-37.0
-0.7
-39.8 14,425 -12.6
43.4
-20.9
14.1
2.7
1,165
-22.6
76.7
-6.8
13.9
-22.8
1,533
-11.7
-2.6
1,173.9 55.0
74.8
29,699 1,099.7 69.9
4.2
20.3
-2.3
2,255
13.9
37.2
557.8
-14.2
32.0
60,993 750.9
16.9
-10.5
21.5
-14.5
1,335
-10.0
27.4
LP
-40.8
22.1
3,212
LP
-40.7
Company
Cipla
Divis Labs
Dr Reddy’ s Labs
Glenmark Pharma
Granules India
GSK Pharma
IPCA Labs.
Jubilant Life
Lupin
Sanofi India
Shilpa Medicare
Strides Pharma
Sun Pharma
Torrent Pharma
Infrastructure
Ashoka Buildcon
IRB Infra
KNR Constructions
Sadbhav Engineering
Logistics
Allcargo Logistics
Concor
Media
D B Corp
Ent.Network
Jagran Prakashan
Music Broadcast
PVR
Sun TV
Zee Entertainment
Metals
Hindalco
Hindustan Zinc
JSPL
JSW Steel
Nalco
NMDC
SAIL
Tata Steel
Vedanta
Oil & Gas
Oil & Gas Excl. OMCs
Aegis Logistics
BPCL
GAIL
Gujarat Gas
Gujarat State Petronet
HPCL
Indraprastha Gas
IOC
Mahanagar Gas
MRPL
Mar 19
44,040
12,564
38,366
25,261
6,133
7,512
8,338
23,856
44,063
7,173
1,995
8,397
70,443
18,560
49,931
13,074
19,483
7,157
10,217
34,772
17,273
17,499
51,844
5,885
1,755
5,928
819
8,376
8,889
20,193
1,629,245
340,989
54,910
101,590
223,680
27,662
36,433
185,063
424,239
234,680
4,854,058
2,172,632
18,526
739,904
187,639
19,076
4,339
679,381
15,426
1,262,141
7,225
151,525
Mar 19
9,611
4,385
6,398
3,517
1,056
1,636
1,747
4,610
9,303
1,538
374
1,587
9,491
4,730
12,125
1,815
7,601
1,441
1,268
4,900
1,072
3,829
16,554
1,042
437
1,380
320
1,608
6,084
5,683
311,491
36,936
27,890
18,447
44,400
5,176
20,015
22,145
75,133
61,350
577,601
385,309
1,031
45,291
16,841
2,541
3,293
46,615
3,312
100,386
2,140
7,056
June 2019
38

Strategy
Annexure: 4QFY19 performance of companies that have announced results
INR Million
Sales
Var Vs
Exp
Mar 19 Chg (%) Chg (%)
(%)
30,869
-12.2
2.9
6.6
267,585
-3.4
11.6
7.3
83,832
-17.0
-2.9
-15.8
1,386,590 -11.3
18.6
-13.9
57,540
-15.4
17.7
2.7
8,652
-6.9
10.9
0.5
48,888
-16.7
19.0
3.1
1,114,814
1.0
17.1
-0.5
11,629
-2.1
9.5
-3.0
159,900
1.9
21.3
-0.2
12,640
0.9
20.5
-0.7
215,390
0.6
19.1
-0.3
24,860
0.5
24.2
-0.7
18,394
2.9
25.6
0.2
20,250
2.7
16.1
-1.2
9,722
0.1
23.3
-1.3
8,318
-3.8
10.5
0.5
4,051
-0.5
7.9
-5.2
380,100
1.8
18.5
0.5
88,923
-0.6
10.4
-2.1
150,063
-0.4
9.0
-2.2
10,574
2.1
29.8
0.7
402,210
0.8
21.0
-0.9
206,022
1.8
6.2
-1.0
36,003
-1.1
-1.7
-3.8
42,435
-0.6
5.0
-1.0
117,750
0.1
91.9
0.3
759,398
2.9
3.0
7.8
16,620
-2.6
-7.7
-12.6
285,463
14.0
6.1
0.7
19,246
-20.5
8.4
-8.0
14,617
-7.0
28.6
4.6
224,616
-5.7
-4.0
27.7
97,287
17.0
22.1
31.2
72,302
-6.2
-8.4
-15.4
29,248
-10.1
4.1
-6.5
394,806
3.6
22.6
0.2
50,334
-7.7
32.1
-0.6
7,600
10.5
75.3
13.0
1,126
10.8
-18.8
7.1
9,762
-5.5
5.3
-0.7
QoQ
YoY
26,383
2,043
13,439
12,443
2,927
78,833
447
791
2,455
5,735
8,048
-13.5
-0.4
-7.6
-6.0
4.1
-0.4
-33.4
2.9
35.2
8.5
13.8
9.4
19.1
12.5
8.8
21.6
35.9
7.5
12.1
15.5
66.2
28.7
-11.0
4.2
0.9
-0.6
-0.2
1.0
6.1
2.2
6.6
6.8
7.9
EBITDA
QoQ
YoY
PAT
Var Vs
Exp
(%)
-17.0
-45.9
-21.1
6.9
-8.6
0.2
-10.4
1.9
37.5
-1.0
-3.9
1.6
3.7
3.9
7.0
4.4
28.5
7.3
3.6
-6.3
0.8
-3.6
Loss
Loss
-14.0
PL
Loss
8.0
6.3
10.5
LP
-96.0
11.7
9.0
-20.9
-86.8
21.6
-9.0
94.1
23.6
-10.3
30.6
9.9
-7.5
-8.4
-13.5
34.2
Loss
74.6
-20.4
6.5
0.1
Var Vs
QoQ
YoY
Exp
Chg (%) Chg (%)
(%)
Mar 19 Chg (%) Chg (%)
-29.1
34.8
6.3
8,183
-33.7
-5.6
-25.3
8.7
-8.9
40,446 -51.0
-31.6
-26.0
-23.7
-26.7
4,402
-22.1
-15.8
-2.3
12.8
8.6
104,270
0.5
10.2
-21.7
5.8
-13.1
4,274
-15.8
12.5
-13.5
15.5
-0.3
792
-18.0
16.3
-24.1
3.0
-16.6
3,482
-15.3
11.6
-2.4
14.4
-3.1 199,187
0.5
14.7
0.2
17.4
-4.3
1,770
92.2
49.9
-1.4
18.5
-2.3
25,680
-1.6
15.2
-1.4
16.1
-1.5
1,385
12.2
3.1
-4.8
4.4
-3.4
40,780
2.2
10.5
-6.4
34.7
0.3
3,787
0.9
12.0
-1.1
19.0
0.0
1,984
15.2
17.0
3.0
10.0
1.6
2,662
-4.2
6.2
-2.3
24.3
-1.6
1,143
14.1
32.8
-15.0
30.3
11.2
933
1.7
26.5
-4.7
3.5
-9.6
713
8.0
1.4
-0.1
16.4
-2.2
81,260
0.1
17.7
-4.9
16.1
-5.6
11,325
-5.9
-7.3
-5.7
16.7
-7.1
24,937
-2.0
24.2
17.5
32.2
5.2
829
49.9
14.2
9.2
0.4
6.7
-46,729 Loss
Loss
6.7
-4.3
5.4
-11,965
Loss
PL
-0.9
-6.4
-3.7
6,076
-6.3
-4.3
-18.7
16.7
0.8
-271
PL
PL
57.0
23.4
26.9
-40,569
Loss
Loss
8.9
6.4
7.7
124,467 23.2
2.5
-25.4
-28.2
-70.1
3,090
79.7
9.2
30.8
3.5
32.3
60,268
32.0
-2.3
-35.5
13.1
7.4
39
-97.4
LP
-17.0
38.3
-1.0
36
-98.0
-98.1
-6.2
-5.3
-17.1 31,735
24.3
13.3
12.1
24.3
13.5
26,717
13.3
17.5
-15.8
-9.3
4.6
2,342
LP
-13.7
-3.6
2.8
-10.2
240
-89.9
-89.0
16.6
34.8
3.4
37,702
34.6
45.3
-16.9
27.9
-8.6
2,029
-21.1
21.4
22.4
59.8
30.7
597
22.1
138.8
Loss
PL
PL
440
15.1
-22.5
-10.8
3.2
-7.6
1,850
-12.7
1.8
-14.8
2.8
-25.9
-15.3
9.6
28.9
PL
20.2
79.8
11.5
15.7
40.0
30.3
1.0
16.2
53.8
83.1
Loss
4.5
18.3
14.4
27.6
31.0
12.2
-11.9
-0.5
-6.0
3.1
Loss
4.6
-5.8
-6.8
1.1
1,129
544
254
1,002
838
5,896
-114
607
147
1,558
1,244
-27.0
6.4
-38.0
-17.0
12.6
209.0
PL
45.4
95.1
12.9
15.9
26.0
18.8
1.4
11.4
48.0
401.2
Loss
78.9
-2.8
9.0
18.0
Company
Oil India
ONGC
Petronet LNG
Reliance Inds.
Retail
Jubilant Foodworks
Titan Company
Technology
Cyient
HCL Technologies
Hexaware Tech.
Infosys
L&T Infotech
Mindtree
MphasiS
NIIT Tech.
Persistent Systems
Tata Elxsi
TCS
Tech Mahindra
Wipro
Zensar Tech
Telecom
Bharti Airtel
Bharti Infratel
Tata Comm
Vodafone Idea
Utilities
CESC
Coal India
JSW Energy
NHPC
NTPC
Power Grid Corp.
Tata Power
Torrent Power
Others
Avenue Supermarts
Brigade Enterpr.
BSE
Castrol India
Coromandel
International
Delta Corp
Godrej Agrovet
Indian Hotels
Info Edge
Interglobe Aviation
Kaveri Seed
MCX
Navneet Education
Oberoi Realty
P I Industries
June 2019
Mar 19
10,793
123,710
6,272
208,320
5,961
1,476
4,485
255,757
1,752
35,970
1,887
51,490
4,765
2,803
3,404
1,763
1,448
985
100,730
16,387
31,053
1,321
105,933
66,316
14,911
6,853
17,853
277,873
1,500
104,199
4,768
4,945
58,836
83,041
13,487
7,098
73,244
3,765
2,154
-6
2,830
2,590
879
749
2,843
913
20,563
-59
252
282
2,097
1,719
39

Strategy
Annexure: 4QFY19 performance of companies that have announced results
INR Million
Sales
QoQ
YoY
EBITDA
QoQ
PAT
Var Vs
Exp
Mar 19 Chg (%) Chg (%)
(%)
1,879
165.4
103.0
186.9
755
16.2
-0.3
3.9
196
-8.6
-15.2
-17.4
1,918
23.4
63.3
23.3
3,108
25.8
0.4
19.6
260
1.9
20.8
-5.4
895
-5.3
64.3
2.6
10,670
68.3
39.5
34.0
Source: Company, MOFSL
YoY
Var Vs
Var Vs
QoQ
YoY
Exp
Exp
Company
Mar 19 Chg (%) Chg (%)
(%)
Mar 19 Chg (%) Chg (%)
(%)
7,232
64.2
65.6
49.5
3,771
69.5
74.5
55.9
Phoenix Mills
22,948
5.6
21.4
-1.2
1,318
11.4
20.5
2.3
Quess Corp
2,697
5.2
-5.4
-9.1
249
-37.7
-7.9
-46.5
S H Kelkar
20,720
5.5
28.5
3.1
3,889
17.5
42.6
9.3
SRF
27,594
-2.6
8.0
-3.8
5,309
12.7
3.6
-0.8
Tata Chemicals
11,634
-0.8
19.0
-4.2
257
4.9
13.1
-1.4
Team Lease Serv.
14,054
8.8
18.5
5.1
2,541
4.7
17.2
5.3
Trident
65,560
33.2
15.2
-0.1
14,340
41.1
17.7
-0.8
UPL
Note: Actual Vs Expectation is taken In Line for +/- 5% Variance. PL: Profit to Loss; LP: Loss to Profit
June 2019
40

Strategy
THEMATIC/STRATEGY RESEARCH GALLERY
June 2019
41

Explanation of Investment Rating
Investment Rating
BUY
SELL
NEUTRAL
UNDER REVIEW
NOT RATED
Expected return (over 12-month)
>=15%
< - 10%
> - 10 % to 15%
Rating may undergo a change
We have forward looking estimates for the stock but we refrain from assigning recommendation
Strategy
*In
case the recommendation given by the Research Analyst is inconsistent with the investment rating legend for a continuous period of 30 days, the Research Analyst shall within following 30 days take appropriate measures to make the recommendation consistent with the
investment rating legend.
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Limited (BSE), Multi Commodity Exchange of India Limited (MCX) and National Commodity & Derivatives Exchange Limited (NCDEX) for its stock broking activities & is Depository participant with Central Depository Services Limited (CDSL) National Securities Depository
Limited (NSDL),NERL, COMRIS and CCRL and is member of Association of Mutual Funds of India (AMFI) for distribution of financial products and Insurance Regulatory & Development Authority of India (IRDA) as Corporate Agent for insurance products. Details of associate
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In the past 12 months , MOFSL or any of its associates may have:
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d)
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MOFSL and it’s associates have not received any compensation or other benefits from the subject company or third party in connection with the research report. To enhance transparency, MOFSL has incorporated a Disclosure of Interest Statement in this document. This
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aware that MOFSL may have a potential conflict of interest that may affect the objectivity of this report. Compensation of Research Analysts is not based on any specific merchant banking, investment banking or brokerage service transactions. Above disclosures include
beneficial holdings lying in demat account of MOFSL which are opened for proprietary investments only. While calculating beneficial holdings, It does not consider demat accounts which are opened in name of MOFSL for other purposes (i.e holding client securities,
collaterals, error trades etc.). MOFSL also earns DP income from clients which are not considered in above disclosures. Above disclosures include beneficial holdings lying in demat account of MOFSL which are opened for proprietary investments only. While calculating
beneficial holdings, It does not consider demat accounts which are opened in name of MOFSL for other purposes (i.e holding client securities, collaterals, error trades etc.). MOFSL also earns DP income from clients which are not considered in above disclosures.
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This report has been prepared by MOFSL and is meant for sole use by the recipient and not for circulation. The report and information contained herein is strictly confidential and may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any
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information is obtained from publicly available media or other sources believed to be reliable. Such information has not been independently verified and no guaranty, representation of warranty, express or implied, is made as to its accuracy, completeness or correctness. All
such information and opinions are subject to change without notice. The report is prepared solely for informational purpose and does not constitute an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments for the clients.
Though disseminated to all the customers simultaneously, not all customers may receive this report at the same time. MOFSL will not treat recipients as customers by virtue of their receiving this report.
Analyst Certification
The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the research analyst(s) was, is, or will be directly or indirectly related to the specific recommendations
and views expressed by research analyst(s) in this report.
Disclosures:
Disclosure of Interest Statement
Analyst ownership of the stock
Companies where there is interest
No
A graph of daily closing prices of securities is available at
www.nseindia.com, www.bseindia.com.
Research Analyst views on Subject Company may vary based on Fundamental research and Technical Research. Proprietary trading desk of MOFSL or its associates
maintains arm’s length distance with Research Team as all the activities are segregated from MOFSL research activity and therefore it can have an independent view with regards to subject company for which Research Team have expressed their views.
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companies to registration or licensing requirements within such jurisdictions.
For Hong Kong:
This report is distributed in Hong Kong by Motilal Oswal capital Markets (Hong Kong) Private Limited, a licensed corporation (CE AYY-301) licensed and regulated by the Hong Kong Securities and Futures Commission (SFC) pursuant to the Securities and Futures Ordinance
(Chapter 571 of the Laws of Hong Kong) “SFO”. As per SEBI (Research Analyst Regulations) 2014 Motilal Oswal Financial Services Limited(SEBI Reg No. INH000000412) has an agreement with Motilal Oswal capital Markets (Hong Kong) Private Limited for distribution of
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only with professional investors.” Nothing here is an offer or solicitation of these securities, products and services in any jurisdiction where their offer or sale is not qualified or exempt from registration. The Indian Analyst(s) who compile this report is/are not located in Hong
Kong & are not conducting Research Analysis in Hong Kong.
For U.S:
Motilal Oswal Financial Services Limited (MOFSL) is not a registered broker - dealer under the U.S. Securities Exchange Act of 1934, as amended (the"1934 act") and under applicable state laws in the United States. In addition MOFSL is not a registered investment adviser
under the U.S. Investment Advisers Act of 1940, as amended (the "Advisers Act" and together with the 1934 Act, the "Acts), and under applicable state laws in the United States. Accordingly, in the absence of specific exemption under the Acts, any brokerage and investment
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interpretations thereof by SEC (henceforth referred to as "major institutional investors"). This document must not be acted on or relied on by persons who are not major institutional investors. Any investment or investment activity to which this document relates is only
available to major institutional investors and will be engaged in only with major institutional investors. In reliance on the exemption from registration provided by Rule 15a-6 of the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act") and interpretations
thereof by the U.S. Securities and Exchange Commission ("SEC") in order to conduct business with Institutional Investors based in the U.S., MOFSL has entered into a chaperoning agreement with a U.S. registered broker-dealer, Motilal Oswal Securities International
Private Limited. ("MOSIPL"). Any business interaction pursuant to this report will have to be executed within the provisions of this chaperoning agreement.
The Research Analysts contributing to the report may not be registered /qualified as research analyst with FINRA. Such research analyst may not be associated persons of the U.S. registered broker-dealer, MOSIPL, and therefore, may not be subject to NASD rule 2711 and
NYSE Rule 472 restrictions on communication with a subject company, public appearances and trading securities held by a research analyst account.
For Singapore:
In Singapore, this report is being distributed by Motilal Oswal Capital Markets Singapore Pte Ltd (“MOCMSPL”) (Co.Reg. NO. 201129401Z) which is a holder of a capital markets services license and an exempt financial adviser in Singapore,
as per the approved agreement under Paragraph 9 of Third Schedule of Securities and Futures Act (CAP 289) and Paragraph 11 of First Schedule of Financial Advisors Act (CAP 110) provided to MOCMSPL by Monetary Authority of Singapore. Persons in Singapore should
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as defined in section 4A(1) of the Securities and Futures Act, Chapter 289 of Singapore (“the SFA”). Accordingly, if a Singapore person is not or ceases to be such an institutional investor, such Singapore Person must immediately discontinue any use of this Report and
inform MOCMSPL.
Disclaimer:
The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any
form, without prior written consent. This report and information herein is solely for informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments. Nothing in this
report constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to your specific circumstances. The securities discussed and opinions expressed in this report may not be suitable for all investors,
who must make their own investment decisions, based on their own investment objectives, financial positions and needs of specific recipient. This may not be taken in substitution for the exercise of independent judgment by any recipient. Each recipient of this document
should make such investigations as it deems necessary to arrive at an independent evaluation of an investment in the securities of companies referred to in this document (including the merits and risks involved), and should consult its own advisors to determine the merits
and risks of such an investment. The investment discussed or views expressed may not be suitable for all investors. Certain transactions -including those involving futures, options, another derivative products as well as non-investment grade securities - involve substantial
risk and are not suitable for all investors. No representation or warranty, express or implied, is made as to the accuracy, completeness or fairness of the information and opinions contained in this document. The Disclosures of Interest Statement incorporated in this document
is provided solely to enhance the transparency and should not be treated as endorsement of the views expressed in the report. This information is subject to change without any prior notice. The Company reserves the right to make modifications and alternations to this
statement as may be required from time to time without any prior approval. MOFSL, its associates, their directors and the employees may from time to time, effect or have effected an own account transaction in, or deal as principal or agent in or for the securities mentioned
in this document. They may perform or seek to perform investment banking or other services for, or solicit investment banking or other business from, any company referred to in this report. Each of these entities functions as a separate, distinct and independent of each
other. The recipient should take this into account before interpreting the document. This report has been prepared on the basis of information that is already available in publicly accessible media or developed through analysis of MOFSL. The views expressed are those of
the analyst, and the Company may or may not subscribe to all the views expressed therein. This document is being supplied to you solely for your information and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or published,
copied, in whole or in part, for any purpose. This report is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or
use would be contrary to law, regulation or which would subject MOFSL to any registration or licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in all jurisdictions or to certain category of investors. Persons in
whose possession this document may come are required to inform themselves of and to observe such restriction. Neither the Firm, not its directors, employees, agents or representatives shall be liable for any damages whether direct or indirect, incidental, special or
consequential including lost revenue or lost profits that may arise from or in connection with the use of the information.
The person accessing this information specifically agrees to exempt MOFSL or any of its affiliates or employees from, any and all responsibility/liability
arising from such misuse and agrees not to hold MOFSL or any of its affiliates or employees responsible for any such misuse and further agrees to hold MOFSL or any of its affiliates or employees free and harmless from all losses, costs, damages, expenses that may be
suffered by the person accessing this information due to any errors and delays.
Registered Office Address: Motilal Oswal Tower, Rahimtullah Sayani Road, Opposite Parel ST Depot, Prabhadevi, Mumbai-400025; Tel No.: 022 71934200/ 022-71934263; Website
www.motilaloswal.com.
CIN No.: L67190MH2005PLC153397.Correspondence Office Address: Palm Spring Centre, 2nd Floor, Palm Court Complex, New Link Road, Malad(West), Mumbai- 400 064. Tel No: 022 7188 1000.
Registration Nos.: Motilal Oswal Financial Services Limited (MOFSL)*: INZ000158836(BSE/NSE/MCX/NCDEX); CDSL and NSDL: IN-DP-16-2015; Research Analyst: INH000000412. AMFI: ARN - 146822; Investment Adviser: INA000007100; Insurance Corporate Agent:
CA0579 ;PMS:INP000006712. Motilal Oswal Asset Management Company Ltd. (MOAMC): PMS (Registration No.: INP000000670); PMS and Mutual Funds are offered through MOAMC which is group company of MOFSL. Motilal Oswal Wealth Management Ltd. (MOWML):
PMS (Registration No.: INP000004409) is offered through MOWML, which is a group company of MOFSL. Motilal Oswal Financial Services Limited is a distributor of Mutual Funds, PMS, Fixed Deposit, Bond, NCDs,Insurance Products and IPOs.Real Estate is offered
through Motilal Oswal Real Estate Investment Advisors II Pvt. Ltd. which is a group company of MOFSL. Private Equity is offered through Motilal Oswal Private Equity Investment Advisors Pvt. Ltd which is a group company of MOFSL. Research & Advisory services is
backed by proper research. Please read the Risk Disclosure Document prescribed by the Stock Exchanges carefully before investing. There is no assurance or guarantee of the returns. Investment in securities market is subject to market risk, read all the related documents
carefully before investing. Details of Compliance Officer: Name: Neeraj Agarwal, Email ID: na@motilaloswal.com, Contact No.:022-71881085.
* MOSL has been amalgamated with Motilal Oswal Financial Services Limited (MOFSL) w.e.f August 21, 2018 pursuant to order dated July 30, 2018 issued by Hon'ble National Company Law Tribunal, Mumbai Bench.
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