NiveshDaily

NiveshDaily
May 16, 2016

Daljeet S. Kohli

Head of Research From Research Desk

Tel: +91 22 66188826  Economy Updates
daljeet.kohli@indianivesh.in Trade Deficit declined to USD 4.8 bn (lowest in five years) in April 2016 on the back of
lower gold and crude oil imports
 Result Preview
Apcotex Industries Ltd. | Rating: BUY |Target: Rs.444

 Result Update

Glenmark Pharmaceutical

Cadila Healthcare (CDH)

Bank of Baroda
Lumax Auto Technologies Ltd.
Capital First Limited (CFL)

 First Cut Analysis
Allahabad Bank

 Result Today

 IndiaNivesh Universe ‐ Valuation Sheet

IndiaNivesh Securities Limited|Research Analyst SEBI Registration No. INH000000511
IndiaNivesh Research 601 & 602, Sukh Sagar, N. S. Patkar Marg, Girgaum Chowpatty, Mumbai 400 007. Tel: (022) 66188800
IndiaNivesh Research is also available on Bloomberg INNS, Thomson First Call, Reuters and Factiva INDNIV.

Daljeet S. Kohli Economy Updates
Head of Research

Tel: +91 22 66188826
daljeet.kohli@indianivesh.in Trade Deficit declined to USD 4.8 bn (lowest in five years) in April 2016 on
the back of lower gold and crude oil imports
Kaushal Patel
Research Associate
Tel: +91 22 66188834 Trade Balance:
kaushal.patel@indianivesh.in USD mn January February March April
Trade Balance
CY16 ‐7,872 ‐6,742 ‐11,396 ‐10,992
CY17 ‐7,639 ‐6,542 ‐5,071 ‐4,845
Source: Department of Commerce; IndiaNivesh Research

India's trade deficit was at USD 4.8 bn in April 2016 as against USD 11.0 bn in April 2015
(USD 5.1 bn in March 2016). The y‐o‐y decrease in trade deficit was mainly on account of
lower Gold (‐60% y‐o‐y) and crude oil (‐24% y‐o‐y) imports in April 2016 whereas the m‐o‐m
decrease in trade deficit was mainly on account of lower non‐oil and non‐gold (‐16% m‐o‐m)
imports in April 2016.

EXPORTS:
Exports continued to report negative growth rate for the seventeenth straight month as it
declined (‐)6.7% y‐o‐y (‐9.5% m‐o‐m) to USD 20.6 bn as compared to USD 22.1 bn in April
2015 (USD 22.7 bn in March 2016). The negative y‐o‐y growth in exports in April 2016 was
mainly due to decline in exports of Petroleum Products (‐28.2%) to USD 2.0 bn, Engineering
Goods (‐18.9%) to USD 4.8 bn and Ready‐Made Garments of all Textiles (‐8.1%) to USD 1.3
bn whereas the major item with y‐o‐y positive growth in exports were Gems & Jewellery
(+17.2%) to USD 3.5 bn, Organic & Inorganic Chemicals (+6.9%) to USD 1.0 bn and Drugs &
Pharmaceuticals (+1.5%) to USD 1.4 bn.
Non‐petroleum exports decreased (‐)3.7% y‐o‐y (‐9.9% m‐o‐m) to USD 18.6 bn as compared
to USD 19.3 bn in April 2015 (USD 20.6 bn in March 2016).

IMPORTS:
Imports also continued to report negative growth rate for the seventeenth straight month
as it declined (‐)23.1% y‐o‐y (‐8.6% m‐o‐m) to USD 25.4 bn as compared to USD 33.0 bn in
April 2015 (USD 27.8 bn in March 2016). The major items with y‐o‐y negative growth in
imports (excluding crude oil, gold and silver) in April 2016 were Transport equipment (‐
37.6%) to USD 0.9 bn, Iron & Steel (‐28.9%) to USD 0.9 bn, Coal, Coke & Briquettes, etc. (‐
25.9%) to USD 1.0 bn, Electronic goods (‐23.9%) to USD 2.5 bn, Artificial resins, plastic
materials, etc. (‐20.1%) to USD 0.9 bn, Machinery, electrical & non‐electrical (‐19.7%) to USD
1.9 bn and Organic & Inorganic Chemicals (‐14.6%) to USD 1.3 bn whereas the major item
with y‐o‐y positive growth in imports was Pearls, precious & Semi‐precious stones (+26.6%)
to USD 2.4 bn.

CRUDE OIL AND NON‐OIL IMPORTS:
Oil imports continue to report negative growth rate for the nineteenth consecutive month
as it declined (‐)24.0% y‐o‐y (+17.8% m‐o‐m) to USD 5.7 bn in April 2016. As a result, oil
imports consisted only 22% of total imports as against 17% in April 2015 and 41% in April
2014. However, the m‐o‐m increase in total share of oil imports was mainly due to sharp
decline in non‐oil and non‐gold imports.

Non‐Oil imports decreased (‐)22.8% y‐o‐y (‐14.1% m‐o‐m) to USD 19.8 bn during April 2016
from USD 25.6 bn in April 2015. Gold imports also decreased (‐)60.5% y‐o‐y (+27.2% m‐o‐m)
to USD 1.2 bn whereas silver imports decreased (‐)25.4% y‐o‐y (+65.8% m‐o‐m) to USD 350
mn in April 2016.

TRADE BALANCE:
The trade deficit for April 2016 was at USD 4.8 bn as compared to USD 11.0 bn in April 2015
and USD 5.1 bn in March 2016.

Our Take:
In tandem with other major world economies, Indian exports also continued to decline
albeit at a slower pace of 6.7% y‐o‐y also partially helped by a lower base of April 2015. It
was mainly driven by the sharp fall in shipments of engineering good (‐18.9% y‐o‐y) and
petroleum products (‐28.2% y‐o‐y) as global demand and commodity prices remained weak.
The fall in imports was across a number of sectors, including gold (‐60.5% y‐o‐y), petroleum
products (‐24.0% y‐o‐y), Transport Equipment (‐37.6% y‐o‐y) and Iron & Steel (‐28.9% y‐o‐y).
The sharp fall in gold demand was mainly due to a nationwide strike by jewellers protesting
against the proposed 1% excise duty. So, gold demand is likely to increase going forward.
The major concern was the fall in non‐oil and non‐gold imports (‐17.6% y‐o‐y and ‐15.9% m‐
o‐m) as it indicates sluggish demand and poor investor sentiment in the manufacturing
sector. So, it will be it would be a cause of concern if it continues.
Overall, we believe that considering subdued global economic growth and still‐depressed
commodity prices, exports will continue to face challenging times even in FY17. However,
we expect India’s trade deficit to remain under control (below 1.5% of GDP) mainly due to
weak crude oil prices.
USD mn January February March April
Exports
CY16 24,394 21,983 24,033 22,055
CY17 21,076 20,739 22,719 20,569
Growth (%) ‐13.6 ‐5.7 ‐5.5 ‐6.7
Imports
CY16 32,265 28,725 35,429 33,047
CY17 28,715 27,280 27,790 25,414
Growth (%) ‐11.0 ‐5.0 ‐21.6 ‐23.1
Trade Balance
CY16 ‐7,872 ‐6,742 ‐11,396 ‐10,992
CY17 ‐7,639 ‐6,542 ‐5,071 ‐4,845
Source: Department of Commerce; IndiaNivesh Research

India's Merchandise Trade (Rs mn) Trends in Export and Import Growth (y‐o‐y %)
50,000 0 30.00
45,000
40,000 ‐5,000 20.00
35,000
30,000 ‐10,000 10.00
25,000
20,000 ‐15,000 0.00
Feb‐14
Feb‐15
Feb‐16
Aug‐13
Oct‐13
Aug‐14
Oct‐14
Aug‐15
Oct‐15
15,000
Apr‐13
Jun‐13
Apr‐14
Jun‐14
Apr‐15
Jun‐15
Apr‐16
Dec‐13
Dec‐14
Dec‐15
10,000 ‐20,000 ‐10.00

5,000
0 ‐25,000 ‐20.00
Oct‐13
Oct‐14
Oct‐15
Jul‐13
Jul‐14
Jul‐15
Apr‐13
Apr‐14
Apr‐15
Apr‐16
Jan‐14
Jan‐15
Jan‐16
‐30.00
Exports Imports Trade Balance Exports Imports

Source: Department of Commerce; IndiaNivesh Research Source: Department of Commerce; IndiaNivesh Research

Trends in Oil Import Growth (y‐o‐y %) Trends in Petroleum Products Export Growth (y‐o‐y %)
18,000 30.00 3,500 0.00
16,000 20.00 3,000 ‐10.00
14,000 10.00
2,500 ‐20.00
12,000 0.00
2,000 ‐30.00
10,000 ‐10.00
8,000 ‐20.00 1,500 ‐40.00
6,000 ‐30.00 1,000 ‐50.00
4,000 ‐40.00 500 ‐60.00
2,000 ‐50.00
0 ‐70.00
0 ‐60.00
Nov‐15
Sep‐15
Feb‐16
Aug‐15
Oct‐15
Jun‐15
Jul‐15
Mar‐16
Apr‐16
Dec‐15
Jan‐16
Oct‐13
Oct‐14
Oct‐15
Apr‐13
Jul‐13
Apr‐14
Jul‐14
Apr‐15
Jul‐15
Apr‐16
Jan‐14
Jan‐15
Jan‐16
Petroleum Products Exports (US $ mn) % (y‐o‐y)
Oil Imports (US $ mn) % (y‐o‐y)

Source: Department of Commerce; IndiaNivesh Research Source: Department of Commerce; IndiaNivesh Research

Trends in Non‐Oil Imports and Exports Trends in Non‐Oil, Non‐Gold Imports and Exports
30,000 10.00 25,000 5.00
25,000 5.00 0.00

20,000
0.00
20,000 ‐5.00 ‐5.00
15,000
15,000 ‐10.00 ‐10.00
‐15.00 10,000
10,000 ‐15.00
‐20.00
5,000 5,000 ‐20.00
‐25.00
0 ‐30.00 0 ‐25.00
Sep‐15
Nov‐15
Feb‐16
Aug‐15
Oct‐15
Jun‐15
Jul‐15
Mar‐16
Apr‐16
Dec‐15
Jan‐16
Nov‐15
Sep‐15
Feb‐16
Aug‐15
Oct‐15
Jun‐15
Jul‐15
Apr‐16
Dec‐15
Mar‐16
Jan‐16
Non‐Oil Exports (US $ mn) Non‐Oil Imports (US $ mn) Non‐Oil, Non‐Gold Imports (US $ mn) Non‐Oil, Non‐ Gold Exports (US $ mn)
Non‐Oil Exports (% y‐o‐y) Non‐Oil Imports (% y‐o‐y) Non‐Oil, Non‐Gold Imports (% y‐o‐y) Non‐Oil, Non‐ Gold Exports (% y‐o‐y)
Source: Department of Commerce; IndiaNivesh Research Source: Company filings, IndiaNivesh Research

Trends in Gold & Silver Imports and Gems & Jewellery Exports USD / INR
02‐04‐2013
02‐06‐2013
02‐08‐2013
02‐10‐2013
02‐12‐2013
02‐02‐2014
02‐04‐2014
02‐06‐2014
02‐08‐2014
02‐10‐2014
02‐12‐2014
02‐02‐2015
02‐04‐2015
02‐06‐2015
02‐08‐2015
02‐10‐2015
02‐12‐2015
02‐02‐2016
02‐04‐2016
6,000
5,000
50.00
4,000
52.00
3,000 54.00
56.00
2,000 58.00
60.00
1,000 62.00
64.00
0 66.00
Sep‐15
Nov‐15
Feb‐16
Aug‐15
Oct‐15
Jun‐15
Jul‐15
Apr‐16
Dec‐15
Mar‐16
Jan‐16
68.00
70.00
USD/INR
Gold and Silver Imports (US $ mn) Gems & Jewellery Exports (US $ mn)

Source: Department of Commerce; IndiaNivesh Research Source: RBI; IndiaNivesh Research

Daljeet S. Kohli Result Preview
Head of Research

Tel: +91 22 66188826
daljeet.kohli@indianivesh.in Apcotex Industries Ltd. | Rating: BUY |Target: Rs.444

Amar Mourya (Rs Mn) Q4FY16 Q3FY16 Q4FY15 Q/Q % Y/Y %
Research Analyst Sales 668 652 767 2.5% ‐12.9%
Tel: +91 22 66188836 EBITDA 86 90 105 ‐3.9% ‐17.9%
amar.mourya@indianivesh.in
PAT 65 47 58 38.5% 11.9%
EPS 3.12 2.25 2.79 38.5% 11.9%
EBITDA % 12.9% 13.8% 13.7% ‐87 ‐79
PAT % 9.7% 7.2% 7.5% 252 215

 Despite consolidation of OMNOVA revenue (Rs.47 mn), the company’s Q4FY16 revenue
is likely to be declined by 12.9% Y/Y to Rs.668 mn. The key reason for revenue de‐
growth was y‐o‐y decline in crude prices.
 We expect 79 bps y/y decline in the EBITDA margin due to the consolidation of
OMNOVA which is the loss making business.
 Despite lower EBITDA base, net profit is likely to increase by 11.9% Y/Y to Rs. 65 mn on
back of expected tax benefit due to OMNOVA consolidation.

Valuations
At CMP of Rs.288, the stock is trading at P/E multiple of 26.2x FY16E and 18.9x FY17E
earnings estimate. We have a BUY with TP of Rs.444 on the stock.

Result Update
16 May 2016 Glenmark Pharmaceutical
Higher sales growth and lower other expenses drive earnings for the
quarter
Current Previous Glenmark

Pharmaceuticals (GNP IN) sales as well as adjusted PAT were above
estimates, led by strong sales growth as well as improved operating margin.
CMP : Rs 874
Reported PAT was lower at Rs1.7bn on account of translational losses and one‐time

Rating : HOLD Rating : BUY cost related to litigation. We trim our EPS estimate for FY17 by 7.8% to Rs43.9 to
Target : Rs 950 Target : Rs 995 factor
price erosion in base business in US market. We also introduce FY18E
(NR‐Not Rated) earnings and roll forward our valuation to 20x (unchanged) FY18E EPS of Rs47.5.
STOCK INFO Accordingly, we revise our price target to Rs950 (from Rs995 earlier). We remain

INDEX positive on GNP on the back of robust ANDA pipeline, sustained out‐performance in
BSE 532296 domestic formulation (DF) market, however, we downgrade to HOLD on limited
NSE GLENMARK
Bloomberg GNP IN
upside from current levels. At CMP of Rs874, GNP is trading at 19.6x FY17E EPS of
Reuters GLEN.NS Rs43.9 and 18.1x FY18E EPS of Rs47.5.

Sector Pharma
Face Value (Rs) 1
Equity Capital (Rs mn) 282
Rs.mn
Revenue
Q4FY16 Q4FY15 Q3FY16 Y‐o‐Y % Q‐o‐Q % INSL Est Variance(%)
22,813 17,758 17,245 28.5 32.3 20,112 13.4
Mkt Cap (Rs mn) 245,760 EBIDTA 4,516 2,814 3,379 60.5 33.7 3,653 23.6
52w H/L (Rs) 1,263 / 671
Adjusted PAT 3,203 1,977 1,700 62.0 88.4 2,149 49.0
Avg Daily Vol (BSE+NSE) 623,423 PAT 1,713 107 1,700 1,504.9 0.8 2,149 (20.3)

SHAREHOLDING PATTERN %
Adjusting for translational loss and one‐time expense, PAT grew by 62% y‐y for the
(as on Mar. 2016)
Promoters 46.5
quarter: Sales for the quarter at Rs22.8bn, grew at 28.5% y‐y for the quarter. The
FIIs 36.8 strong growth in sales for the quarter is driven by 24.4% y‐y growth in specialty
DIIs 5.1
business, 26.6% y‐y growth in generics business and higher out‐licensing income.
Public & Others 11.6 Gross margin (GM) reduced by 1,212bps y‐y to 66.1% for the quarter, partly due to

STOCK PERFORMANCE (%) 3m 6m 12m base of GM of past year and price erosion in base business in US market.
high
However, EBITDA margin improved 202bps y‐y due to lower other expense. Adjusted
GNP 25.9 (7.3) (2.0)
SENSEX 10.8 (0.6) (6.6)
PAT grew by 62% y‐y to Rs3.2bn for the quarter. Reported PAT was lower at Rs1.7bn
Source: Bloomberg, IndiaNivesh Research due to translational loss of Rs940mn and one‐time litigation expense related to

Sitagliptin in India and Azelaic acid in US of Rs650mn resulting in lower reported PAT
GNP v/s SENSEX for the quarter. R&D spent for the quarter was Rs2.5bn and formed 12% of net sales
150.0

for the quarter. GNP has guided for 25% y‐y growth in sales for FY17 including Zetia
100.0 sales. Management has guided for R&D spend to be 11% of sales and capex to be
50.0
US$100mn in FY17. GNP guided for effective tax rate of 22‐25% for FY17E. It has net
0.0 debt of Rs31bn at the end of FY17.
Aug‐15
Nov‐15
Jan‐16
Jun‐15
Jul‐15
Mar‐16
Oct‐15
Apr‐16
Sep‐15
Feb‐16
May‐15
May‐16
Dec‐15

Price erosion in base business impact growth in constant currency to some extent
GNP IN SENSEX
in US business: US sales grew by 21.6% y‐y to Rs6.5bn (US$97mn) for the quarter. US
sales grew at 13% y‐y on constant currency basis. Despite, having 24 ANDA approvals
Source: Bloomberg, IndiaNivesh Research

(including 5 tentative approvals) in FY16, the y‐y growth has been moderate on
Daljeet S. Kohli constant currency basis. This is partly due to pricing pressure in base business
Head of Research
portfolio and some delay in launching new products. At the end of Q4FY16, GNP has
Tel: +91 22 66188826 59 ANDAs pending for approval, of which 23 are Para IV filings. GNP has filed in six
daljeet.kohli@indianivesh.in

ANDA in 4QFY16, taking the cumulative filing in FY16 to 12.
Tushar Manudhane
Research Analyst
Financial Performance
Tel: 91 22 66188835
tushar.manudhane@indianivesh.in YE March EBITDA
Net Sales EBITDA Adj.PAT Adj.EPS (Rs) RoE(%) Adj.P/E(x) EV / EBITDA (x)

(Rs Mn)
FY14 60,069 13,313 7,828 28.9
Margin
22.2 27.2 29.7 19.3

FY15 66,448 12,741 7,120 25.3 19.2 23.8 34.0 21.4

FY16 76,496 15,677 8,369 29.7 20.5 27.6 28.9 17.0
FY17E 88,780 20,158 12,365 43.9 22.7 33.9 19.6 12.9
FY18E 98,055 21,824 13,389 47.5 22.3 27.4 18.1 11.6
Source: Company, IndiaNivesh Research
IndiaNivesh Securities Limited|Research Analyst SEBI Registration No:INH0000000511
IndiaNivesh Securities Ltd 601 & 602, Sukh Sagar, N. S. Patkar Marg, Girgaum Chowpatty, Mumbai 400 007. Tel: (022) 66188800

Higher sales growth and lower other expenses drive earnings for the quarter
Result Update | Glenmark Pharmaceutical
Improved traction in DF business for the quarter: DF sales grew at 22.5% y‐y to
Rs5.4bn for the quarter. The y‐y growth is driven by new product launches and
increased traction in existing products in cardiac, respiratory and anti‐diabetic
segment and derma segment. GNP has been able to achieve sales of Rs90mn in past
month from Tenaliglitpin, making it promising product in FY17E.

Brazil and Mexico business drive Latin America sales for the quarter: Latin America
sales improved by 33.5% y‐y to Rs2.4bn for the quarter. The strong sales growth for
the quarter is driven by 25% y‐y growth in constant currency in brazil and Mexico
business. GNP has stopped shipment to Venezuela since November 2015. Also, GNP
booked translational loss of Rs840mn for business from Venezuela market. GNP has
guided for cautious approach towards Venezuela market, given the political and
economic unrest in Venezuela.

Despite good number of launches, Europe sales growth was moderate at 11.2% for
the quarter: Europe sales grew at modest rate of 11.2% y‐y to Rs2.7bn for the
quarter. The growth was led by improved business in Germany and UK market. GNP
launched three products in European region taking the cumulative launches in
Europe to 24, including 16 in‐licensed products. During the quarter, GNP concluded
licensing deal with Celon for g‐Seretide Accuhaler in Europe. GNP has obtained semi‐
exclusive marketing and distribution rights for the product across 15 Europe
countries, including Great Britain and Germany upon commercialization.

Asia segment drive sales in ROW market: ROW sales increased by 35.6% y‐y to
Rs2.9bn for the quarter. The overall ROW sales growth was led by robust sales in
Russia, as well as Asia region. The Africa subsidiary showed relative moderate growth
in secondary sales of 11% for the quarter.

R&D update: GNP has submitted an IND for GRC 17536 for phase 2b dose range
finding study with USFDA. The agency has requested for additional information with
some changes to clinical protocol. GNP has successfully completed preclinical studies
and Phase I enabling toxicity studies for GRC27864. A relative bio‐availability study
with tablet formulation has also been completed. With respect to GBR 1302, GNP
has approval from Paul Ehrich Institute (PEI), Germany to conduct phase I clinical
trials and it expect to initiate dosing in Q1FY17. GNP has initiated IND‐enabling
studies for GBR 1342 and is committed to move it to clinical trials.

Valuation: We trim our EPS estimate for FY17 by 7.8% to Rs43.9 to factor price
erosion in base business in US market. We also introduce FY18E earnings and roll
forward our valuation to 20x (unchanged) FY18E EPS of Rs47.5. Accordingly, we
revise our price target to Rs950 (from Rs995 earlier). We remain positive on GNP on
the back of robust ANDA pipeline, sustained out‐performance in domestic
formulation (DF) market, however, we downgrade to HOLD on limited upside from
current levels. At CMP of Rs874, GNP is trading at 19.6x FY17E EPS of Rs43.9 and
18.1x FY18E EPS of Rs47.5.

IndiaNivesh Securities Ltd 16 May 2016 2 of 6

Key changes in estimates
FY17E FY17E Introducing
Rs mn
Old estimates New estimates Change (%) FY18E
Sales 91,297 88,780 (2.8) 98,055
EBITDA 20,754 20,158 (2.9) 21,824
PAT 13,418 12,365 (7.8) 13,389
EPS (Rs) 49.7 43.9 (7.8) 47.5
PT (Rs) 995 950

Quarterly results summary
Particulars (Rs Mn) Q4FY16 Q4FY15 Y‐o‐Y (%) Q3FY16 Q‐o‐Q FY16AE FY15 Y‐o‐Y
Revenue from operations 21,994 17,538 25.4 17,245 27.5 76,496 65,953 16.0
Net Sales 21,994 17,538 25.4 17,245 27.5 76,496 65,953 16.0
Other Operating Income 819 220 ‐ ‐ NA ‐ 495 ‐
Total Income 22,813 17,758 28.5 17,245 32.3 76,496 66,448 15.1
Consumption of raw material 7,454 3,818 95.3 5,068 47.1 23,614 19,344 22.1
Empoyee Cost 3,479 2,542 36.9 3,449 0.9 13,782 12,024 14.6
Other Expenditure 7,363 8,584 (14.2) 5,350 37.6 23,423 22,833 2.6
Total Expenditure 18,296 14,944 22.4 13,866 32.0 60,818 54,201 12.2
EBITDA 4,516 2,814 60.5 3,379 33.7 15,678 12,246 28.0
EBITDA adj for (outlicensing income & Forex los 3,698 2,594 42.5 3,379 9.4 15,678 11,751 33.4
Depreciation & Ammortization 628 645 (2.6) 559 12.4 2,691 2,599 3.6
EBIT 3,889 2,169 79.2 2,820 37.9 12,986 9,647 34.6
Other Income 117 3 3,496.9 340 (65.7) 200 69 190.7
Interest Expenses/ (income) 475 397 19.7 469 1.4 1,789 1,902 (5.9)
Pre‐tax Profit 3,530 1,776 98.8 2,692 31.1 11,397 7,814 45.9
Tax 327 (201) (263.1) 992 (67.0) 3,028 1,190 154.4
Net Profit before minority interst 3,203 1,977 62.0 1,700 88.4 8,369 6,624 26.3
Exceptional Items (1,490) (1,870) ‐ (0) NA (1,350) (1,869) ‐
Minority Interest NA NA NA
Net Profit (Reported) 1,713 107 1,504.9 1,700 0.8 7,019 4,755 47.6
Adj EPS (Rs per share) 8.5 7.0 20.6 6.0 40.3 26.8 22.4 19.4
Adj O/ Share (Mn) 282 282 ‐ 282 ‐ 282 282 ‐

Key ratios
Q4FY16 Q4FY15 Bps Q3FY16 Bps FY16AE FY15 Bps
Gross Margins 66.1 78.2 (1,212) 70.6 (451) 69.1 70.7 (154)
Adj EBITDA margin 16.8 14.8 202 19.6 (278) 20.5 17.8 268
Net Margin 10.8 11.3 (43) 9.9 98 9.9 9.6 28
Material cost/Net Sales 33.9 21.8 1,212 29.4 451 30.9 29.3 154
Employee Cost/ Net Sales 15.8 14.5 133 20.0 (418) 18.0 18.2 (21)
Other Expenditure/ Net Slaes 33.5 48.9 (1,547) 31.0 245 30.6 34.6 (400)
Tax Rate 9.3 (11.3) 2,058 36.9 (2,759) 26.6 15.2 1,134

Sales breakdown
Q4FY16 Q4FY15 Y‐o‐Y (%) Q3FY16 Q‐o‐Q (%) FY16AE FY15 Y‐o‐Y (%)
Specialty Business 13,500 10,847 24.4 10,244 31.8 44,791 39,698 12.8
India 5,398 4,406 22.5 4,880 10.6 21,093 17,490 20.6
ROW 2,980 2,198 35.6 2,363 26.1 9,032 8,123 11.2
Latin America 2,416 1,810 33.5 1,237 95.3 7,495 7,640 (1.9)
Europe 2,705 2,433 11.2 1,764 53.4 7,171 6,445 11.3
Generic Business 8,748 6,911 26.6 7,538 16.1 30,886 26,450 16.8
US 6,520 5,363 21.6 6,089 7.1 24,203 20,398 18.7
API 2,229 1,547 44.0 1,450 53.7 6,683 6,053 10.4
Total 22,248 17,758 25.3 17,783 25.1 75,677 66,149 14.4

Moderate y‐y growth due to lack of potential approvals Healthy y‐y growth in DF business for the quarter
US Revenue (USD Mn) y‐o‐y 7.0 Domestic Revenue(Rs Mn) Growth (Y‐o‐y) 30.0%
120 20.0% 27.3%
12.5%
14.8% 15.4%
6.0 25.0%
100 13.0% 15.0% 22.5%
20.9%
5.0 19.1%
80 10.0% 20.0%
5.8%
4.0 14.5% 13.6% 15.0%
60 2.6% 5.0% 12.7% 15.0%
3.0
40 ‐2.1% 0.0% 7.9% 10.0%
‐3.7% 2.0
20 ‐7.7% ‐5.0% 5.0%
1.0
81 78 84 82 86 90 94 94 97
0 ‐10.0% 3.8 4.0 4.8 4.3 4.4 4.7 6.1 4.9 5.4
‐ 0.0%
Q4FY14
Q1FY15
Q2FY15
Q3FY15
Q4FY15
Q1FY16
Q2FY16
Q3FY16
Q4FY16
Q4FY14
Q1FY15
Q2FY15
Q3FY15
Q4FY15
Q1FY16
Q2FY16
Q3FY16
Q4FY16

Source: Company filings, IndiaNivesh Research Source: Company filings, IndiaNivesh Research


Income Statement (Consolidated)

Y E March (Rs m) FY14 FY15 FY16 FY17E FY18E
Net sales 60,069 66,448 76,496 88,780 98,055
Growth (%) 20 11 15 16 10
Operating expenses (46,969) (54,201) (60,818) (68,622) (76,231)
Operating profit 13,101 12,246 15,677 20,158 21,824
Other operating income 213 495 0 0 0
EBITDA 13,313 12,741 15,677 20,158 21,824
Growth (%) 31.6 (4.3) 23.0 28.6 8.3
Depreciation (2,168) (2,599) (2,691) (2,895) (3,082)
Other income 115 69 200 150 195
EBIT 11,260 10,211 13,186 17,413 18,937
Finance cost (1,886) (1,902) (1,789) (1,761) (1,661)
Exceptional item 0 0 0 0 0
Profit before tax 9,374 8,309 11,397 15,652 17,276
Tax (current + deferred) (1,513) (1,190) (3,028) (3,287) (3,887)
Profit / (Loss) for the period 7,862 7,119 8,369 12,365 13,389
Associates, Min Int (33) 1 0 0 0
Reported net profit 7,828 7,120 8,369 12,365 13,389
Extraordinary item 0 0 0 0 0
Adjusted net profit 7,828 7,120 8,369 12,365 13,389
Growth (%) 27 (9) 18 48 8
Balance Sheet (Consolidated)
Y E March (Rs m ) FY14 FY15 FY16 FY17E FY18E
Share capital 271 271 282 282 282
Reserves & surplus 29,562 29,732 30,282 42,153 55,006
Net Worth 29,833 30,003 30,564 42,435 55,288
Minority Interest 133 (2) (3) (3) (3)
Total Liabilities 55,381 66,874 67,891 73,123 77,220
Non‐current liabilities 25,889 29,761 27,219 28,419 29,619
Long‐term borrowings 24,287 25,744 24,873 25,873 26,873
Deferred tax liabilities 1,081 2,798 1,577 1,577 1,577
Other Long term liabilities 521 1,219 769 969 1,169
Long term provisions 0 0 0 0 0
Current Liabilities 29,492 37,113 40,672 44,704 47,601
Short term borrowings 8,383 12,256 7,874 8,374 8,874
Trade payables 13,626 20,457 19,408 22,940 25,336
Other current Liabilities 3,914 2,888 11,370 11,370 11,370
Short term provisions 3,569 1,513 2,020 2,020 2,020
Total Liabilities and Equity 85,346 96,875 98,453 115,555 132,505

Non Current Assets 37,719 43,642 39,343 43,048 47,659
Net Block 30,357 32,704 30,592 34,297 38,902
Goodwill 602 580 575 575 575
Non‐current Investments 181 185 172 172 178
Long‐term loans and advances 3,772 4,593 6,174 6,174 6,174
Deferred tax Assets 2,601 5,137 1,831 1,831 1,831
Other non current Assets 207 442 0 0 0
Current Assets 47,627 53,233 59,110 72,506 84,845
Inventories 9,329 12,690 15,678 14,820 16,368
Sundry Debtors 21,563 25,118 24,924 31,419 34,702
Cash & Bank Balances 8,007 7,681 8,692 16,452 23,966
Other current Assets 106 108 1,145 1,145 1,145
Loans & Advances 8,622 7,636 8,670 8,670 8,664
Current Investments 0 0 0 0 0
Total (Assets) 85,347 96,875 98,453 115,555 132,504


Cash Flow Statement (Consolidated)

Depreciation 2,168 2,599 2,691 2,895 3,082
Change in working capital (4,050) (3,004) 1,495 (2,106) (2,428)
Total tax paid (3,796) (370) (5,114) (3,287) (3,887)
Others 4,203 (576) (6,345) 1,761 1,661
Cash flow from operations (a) 8,537 4,816 2,775 14,915 15,704
Capital expenditure (4,843) (4,947) (579) (6,600) (7,687)
Change in investments (181) (4) 13 0 (6)
Others 1,342 (450) 5,382 0 0
Cash flow from investing (b) (3,681) (5,400) 4,817 (6,600) (7,693)
Free cash flow (a+capex) 3,695 (131) 2,196 8,315 8,017
Equity raised/(repaid) 0 0 11 0 0
Debt raised/(repaid) 9,789 5,330 (5,252) 1,500 1,500
Dividend (incl. tax) (217) (190) (281) (495) (536)
Others (7,375) (5,579) (608) (1,761) (1,662)
Cash flow from financing (c) (2,900) 259 (6,580) (555) (498)
Net change in cash (a+b+c) 1,955 (326) 1,012 7,760 7,513
Reconciliation of Other balances 0 0 0 0 0
Cash as per Balance Sheet 8,007 7,681 8,692 16,452 23,966

Key Ratios (Consolidated )
Y E March FY14 FY15 FY16 FY17E FY18E
Adjusted EPS (Rs) 28.9 25.3 29.7 43.9 47.5
Growth 27.3 (12.5) 17.5 47.8 8.3
Dividend/share (Rs) 0.8 0.7 1.0 1.8 1.9
Dividend payout ratio 2.8 2.7 3.4 4.0 4.0
EBITDA margin 22.2 19.2 20.5 22.7 22.3
EBIT margin 18.7 15.4 17.2 19.6 19.3
Net Margin 13.0 10.7 10.9 13.9 13.7
Tax rate (%) 16.1 14.3 26.6 21.0 22.5
Debt/Equity(x) 1.1 1.3 1.1 0.8 0.6
Inventory Days 57 70 75 61 61
Sundry Debtor Days 131 138 119 129 129
Trade Payable Days 83 112 93 94 94
Du Pont Analysis ‐ ROE
Net margin 13.0 10.7 10.9 13.9 13.7
Asset turnover (x) 0.8 0.7 0.8 0.8 0.8
Leverage factor (x) 2.7 3.0 3.2 2.9 2.5
ROE(%) 27.2 23.8 27.6 33.9 27.4
RoCE (%) 15.4 12.8 14.1 19.0 17.0
Valuation (x)
PER 29.7 34.0 28.9 19.6 18.1
PCE 23.3 24.9 21.9 15.9 14.7
Price/Book 7.8 8.1 7.9 5.7 4.4
EV/EBITDA 19.3 21.4 17.0 12.9 11.6


Result Update
16 May 2016 Cadila Healthcare (CDH)
Work in progress with respect to regulatory compliance at Moraiya

Current Previous Cadila
Healthcare (CDH) financial performance was marginally lower‐than‐
estimates, due to moderate y‐y growth in domestic formulation (DF) and y‐y decline
CMP : Rs327
in US sales. Though the ANDA pipeline remains robust with 166 ANDAs pending for

Rating : HOLD Rating : HOLD approval (86 ANDAs excluding ANDAs from Moraiya facility), the approval pace
Target : Rs 369 Target : Rs354 remains
lackluster. Also, there has been increased competition in key products in
(NR‐Not Rated) US and price erosion in base business. Accordingly, we have reduced EPS of FY17E
STOCK INFO by 9.8% to Rs15.9. We also introduce FY18E earnings and roll forward our valuation

INDEX to 20x FY18E EPS of Rs18.4 to arrive at revised price target of Rs369 (from Rs354
BSE 532321 earlier). At CMP of Rs327, the stock is trading at 20.5x FY17E EPS of Rs15.9 and
NSE CADILAHC
Bloomberg CDH IN
17.7x FY18E EPS of Rs18.4. We maintain HOLD rating based on valuation.
Reuters CADI.NS
Sector Pharma Rs.mn 4QFY16 4QFY15 3QFY16 Y‐o‐Y (%) Q‐o‐Q (%) INSL Est. Variance (%)
Face Value (Rs) 1 Revenue 24,491 22,882 24,284 7.0 0.9 26,456 (7.4)
Equity Capital (Rs mn) 1,024
EBIDTA 5,814 5,317 5,787 9.4 0.5 6,219 (6.5)
Adjusted PAT 3,879 3,868 3,903 0.3 (0.6) 4,209 (7.8)
Mkt Cap (Rs mn) 334,303 PAT 3,887 3,504 3,896 10.9 (0.2) 4,209 (7.7)

52w H/L(Rs) 454 / 295
Avg Daily Vol (BSE+NSE) 1,050,391
Y‐y sales at lowest level in past 14 quarters: CDH sales came in at Rs24.4bn, up 7% y‐

y, for the quarter. The overall sales growth has been lowest in past 14 quarters. The
(as on Mar. 2016) muted sales growth has been due to y‐y decline in US and EU sales, and moderate
Promoters 74.8
sales growth in DF. The y‐y growth in emerging market and JV business aided y‐y
FIIs 6.7 growth to some extent for the quarter. Gross margin at 66.4% was marginally up by
DIIs 7.1
63bps y‐y. Also, EBITDA margin remained stable at 23.7%. Despite increased
Public & Others 11.4
competition in HCQ (one of the key product in US market), CDH has been able to
STOCK PERFORMANCE (%) 3m 6m 12m
maintain EBITDA margin for the quarter. Adjusted PAT remained flat at Rs3.9bn for
Cadila Healthcare 6.6 (20.8) 0.8 the quarter. R&D spent for the quarter was Rs1.8bn and formed 8% of net sales for
SENSEX 10.9 (0.5) (6.5)
the quarter. CDH guided for similar rate of R&D spent as % of sales for FY17E. CDH
had capex of Rs9.5bn for FY16.

Cadila Healthcare v/s SENSEX
Higher competition and price erosion in base business impacted y‐y US sales
160.0
140.0

growth for the quarter: US sales declined by 1.8% y‐y to Rs9.6bn for the quarter.
120.0
100.0
CDH has shown y‐y decline in US sales for first time in past 14 quarters. It declined by
80.0
60.0
40.0
y‐y to US$144mn for the quarter. The reduction is primarily due to increased
7.8%
20.0
0.0 competition in HCQ and price erosion in base business. CDH has received only 10

ANDA approvals in FY16. CDH has robust ANDA pipeline of 166 ANDAs pending for
approval. Out of 166, about 80 ANDAs pending for approval are stuck due to warning

letter at its Moraiya facility. Remaining ANDAs are from facilities which have received
CDH IN SENSEX
EIR from USFDA. However, approval for ANDAs has not yet kicked in. With strong

product pipeline having mix of oral solids, injectable, nasals and transdermal
patches, we expect CDH to deliver good growth once approval starts.
Daljeet S. Kohli

Head of Research
Tel: +91 22 66188826

Tushar Manudhane
Financial Performance
Research Analyst
YE March EBITDA
Tel: 91 22 66188835 Net Sales EBITDA Adj.PAT Adj.EPS (Rs) RoE(%) Adj.P/E(x) EV / EBITDA (x)
tushar.manudhane@indianivesh.in
(Rs Mn)
FY14 70,601 12,002 8,208 8.0
Margin
17.0 25.3 40.7 29.2

FY15 84,971 17,557 11,589 11.3 20.7 30.1 28.8 19.9

FY16 94,694 23,829 15,251 14.9 25.2 31.8 21.9 14.5
FY17E 108,682 24,591 16,320 15.9 22.6 27.4 20.5 13.8
FY18E 124,362 28,070 18,879 18.4 22.6 26.0 17.7 11.7


Q4FY16 Result Update| Cadila Healthcare Work in progress with respect to regulatory compliance at Moraiya
DF sales growth remains on uptrend: DF sales came in at Rs7.7bn, up 12.9% y‐y, for
the quarter. Though the sales growth has been moderate for the quarter, it has been
improving four quarters now. This is due to smoothening of high base and new
product launches. The y‐y growth has been adversely impacted to some extent by
reduction in prices of some products by Indian regulatory authority. CDH has
launched 40 new products including 10 line extensions in FY16. CDH has been able to
have good traction in g‐Sovaldi over past six months. CDH has field strength of 5000
and intend to increase by 150 on annual basis to support future growth.

Currency devaluation impacts growth in Latin America sales: Brazil business
remained flat at553mn. The growth has been adversely impacted due to currency
devaluation. At constant currency basis, the sales have grown at 24% on y‐y basis.
This is on the back of new product launches and increased traction in existing
products.

Regulatory Update: CDH continues to implement remediation measures at Moraiya
facility. Management indicated that remediation related work would be complete by
end of May 2016. Though CDH has sent response to USFDA, they are yet to get
feedback from them on completed work. In FY16, CDH has received EIR for four
facilities – Oral solids in SEZ, Onco‐injectable facility, Transdermal in SEZ and baddi
facility. CDH also received WHO‐GMP certificate for newly commissioned biologics
facility at Ahmedabad.

Valuation: We have reduced EPS of FY17E by 9.8% to Rs15.9 to factor delay in
approval and price erosion in base business from US market. We also introduce
FY18E earnings and roll forward our valuation to 20x FY18E EPS of Rs18.4 to arrive at
revised price target of Rs369 (from Rs354 earlier). At CMP of Rs327, the stock is
trading at 20.5x FY17E EPS of Rs15.9 and 17.7x FY18E EPS of Rs18.4. We maintain
HOLD rating based on valuation.

Key changes in estimates and introducing FY18E estimates:
FY17E Introducing
Rs mn
Old estimates New estimates Change (%) FY18E
Sales 116,847 108,682 (7.0) 124,362
EBITDA 27,102 24,591 (9.3) 28,070
PAT 18,097 16,320 (9.8) 18,879
EPS (Rs) 17.7 15.9 (9.9) 18
PT (Rs) 354 369


Quarterly Financial Summary
Particulars (Rs mn) 4QFY16 4QFY15 Y‐o‐Y (%) 3QFY16 Q‐o‐Q (%) FY16AE FY15 Y‐o‐Y (%)
Net Sales 23,755 22,471 5.7 23,418 1.4 94,694 84,971 11.4
Other Operating Income 736 411 79.0 866 (15.0) 3,682 1,542 138.7
Total Income 24,491 22,882 7.0 24,284 0.9 98,376 86,513 13.7
Consumption of raw material 8,228 7,831 5.1 7,996 2.9 32,770 31,967 2.5
Empoyee Cost 3,572 3,141 13.7 3,175 12.5 13,317 12,085 10.2
Other Expenditure 6,877 6,594 4.3 7,326 (6.1) 28,460 24,905 14.3
Total Expenditure 18,677 17,566 6.3 18,497 1.0 74,547 68,956 8.1
EBITDA 5,814 5,317 9.4 5,787 0.5 23,829 17,557 35.7
Forex gain (loss) above EBITDA ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐
EBITDA 5,814 5,317 9.4 5,787 0.5 23,829 17,557 35.7
Depreciation & Ammortization 783 755 3.7 770 1.7 3,022 2,873 5.2
EBIT 5,031 4,561 10.3 5,017 0.3 20,807 14,685 41.7
Other Income 241 203 18.5 255 (5.5) 941 554 69.9
Interest 100 121 (17.2) 126 (20.6) 486 679 (28.4)
Pre‐tax Profit 5,172 4,644 11.4 5,146 0.5 21,262 14,560 46.0
Tax 1,259 708 78.0 1,149 9.6 5,711 2,594 120.1
Net Profit 3,913 3,936 (0.6) 3,997 (2.1) 15,551 11,966 30.0
Minority Interest (34) (68) (50.2) (92) (63.0) (300) (377) (20.3)
Adj Net Profit after minority interst 3,879 3,868 0.3 3,905 (0.7) 15,251 11,589 31.6
EOI 8 (364) NM (9) NM (25) (83) NM
Net Profit (reported) 3,887 3,504 10.9 3,896 (0.2) 15,226 11,506 32.3
adj EPS (Rs) 3.8 3.8 0.3 3.8 (0.7) 14.9 11.3 31.7
O/ Share (Mn) 1,024 1,024 ‐ 1,024 ‐ 1,024 1,025 (0.1)

Key ratios
(%) 4QFY16 4QFY15 Bps 3QFY16 Bps FY16AE FY15 Y‐o‐Y (%)
Gross Margins 66.4 65.8 63 67.1 ‐67 66.7 63.1 364
EBITDA margin 23.7 23.2 50 23.8 ‐9 24.2 20.3 393
Net Margin 15.8 16.9 (107) 16.1 (24) 15.5 13.4 211
Material cost/Net Sales 33.6 34.2 (63) 32.9 67 33.3 36.9 (364)
Employee Cost/ Net Sales 14.6 13.7 86 13.1 151 13.5 14.0 (43)
Other Expenditure/ Net Slaes 28.1 28.8 (74) 30.2 (209) 28.9 28.8 14
Tax Rate 24.3 16.5 777 22.4 194 26.9 17.9 897

Revenue mix
(Rs Mn) 4QFY16 4QFY15 Y‐o‐Y (%) 3QFY16 Q‐o‐Q (%) FY16AE FY15 Y‐o‐Y (%)
Domestic 9,662 8,716 10.8 9,150 5.6 9,567 9,150 4.6
Formulations 7,674 6,797 12.9 7,130 7.6 6,797 26,772 (74.6)
APIs 148 123 20.0 254 (41.9) 123 809 (84.8)
Consumer & Others 1,840 1,796 2.4 1,765 4.2 1,796 7,054 (74.5)
Consumer Products 1,169 1,114 4.9 1,178 (0.8) 1,114 4,430 (74.9)
Animal Health & Others 671 682 (1.6) 587 14.2 682 2,624 (74.0)
Exports 14,618 14,250 2.6 14,769 (1.0) 14,250 51,942 (72.6)
Formulations 13,844 13,503 2.5 14,186 (2.4) 13,503 49,028 (72.5)
North America (US) 9,610 9,789 (1.8) 10,717 (10.3) 9,789 33,932 (71.2)
Europe 706 740 (4.6) 762 (7.3) 740 3,376 (78.1)
Latin America 553 547 1.1 544 1.7 547 2,348 (76.7)
Emerging Markets 1,343 1,117 20.2 963 39.5 1,117 4,075 (72.6)
Animal Health & Others 173 141 22.7 198 (12.4) 141 593 (76.2)
APIs 774 747 3.7 584 32.7 747 2,914 (74.4)
JVs 1,459 1,169 24.8 1,002 45.6 1,169 4,704 (75.1)
Total 24,280 22,966 5.7 23,919 1.5 22,966 86,577 (73.5)



Y‐y sales growth in US market on downtrend ANDAs pipeline pending for approval remains robust
US generics (Rs bn) Y‐y growth (%) ‐ RHS Cumulative ANDAs filed Cumulative ANDAs approved (RHS)
11.9 85.0 90.0 350 300
74.7 80.0
10.9 69.6
70.0 300
9.9 250
290
60.0
8.9 250 266 270 269
44.3 255 260
41.8 50.0 249 250 200
7.9 37.5
40.0 227
200
6.9 25.2 30.0 150
19.6
5.9 150
20.0
99 101 102 102 103
4.9 91 91 96 96
10.0 100
‐1.8 100
3.9 0.0
6.8 7.2 8.0 9.0 9.8 9.9 10.0 10.7 9.6
2.9 ‐10.0 50 50
Q4FY14
Q1FY15
2QFY15
3QFY15
4QFY15
1QFY16
2QFY16
3QFY16
4QFY16
Q4FY14
Q1FY15
2QFY15
3QFY15
4QFY15
1QFY16
2QFY16
3QFY16
4QFY16

DF sales growth on improving trend Gross margin and EBITDA margin stable sequentially
Domestic formulation (Rs bn) Y‐y growth (%) ‐ RHS Gross margin (GM, %) EBITDA margin (%)
68.0 67.2 67.1 30.0
8.0 12.9 14.0
66.4
65.8
7.5 11.1 12.0 66.0 65.3 65.2 25.0
10.4 25.3
9.9
7.0 9.4 23.2 23.8 23.7
9.1 8.8 10.0 64.0 20.0
8.7 22.0
6.5 7.9 20.0 20.4
8.0 18.2 18.3
62.0 61.0 15.0
6.0
60.5 60.3
6.0
5.5 60.0 10.0
4.0
5.0
58.0 5.0
4.5 2.0
6.2 6.7 6.8 6.4 6.8 7.4 7.5 7.1 7.7
4.0 0.0 56.0 0.0
Q4FY14
Q1FY15
2QFY15
3QFY15
4QFY15
1QFY16
2QFY16
3QFY16
4QFY16
Q4FY14
Q1FY15
2QFY15
3QFY15
4QFY15
1QFY16
2QFY16
3QFY16
4QFY16





Net sales 70,601 84,971 94,694 108,682 124,362
Growth (%) 15 20 11 15 14
Operating profit 10,362 16,015 20,147 22,204 25,372
Other operating income 1,640 1,542 3,682 2,387 2,698
EBITDA 12,002 17,557 23,829 24,591 28,070
Growth (%) 6.6 46.3 35.7 3.2 14.1
Depreciation (2,012) (2,873) (3,022) (3,539) (3,841)
Other income 507 554 941 565 638
EBIT 10,496 15,238 21,748 21,617 24,867
Finance cost (902) (679) (486) (522) (468)
Tax (current + deferred) (1,060) (2,594) (5,711) (4,430) (5,124)
Profit / (Loss) for the period 8,534 11,966 15,551 16,665 19,276
Associates, Min Int (326) (377) (300) (345) (397)
Reported net profit 8,208 11,589 15,251 16,320 18,879
Adjusted net profit 8,208 11,589 15,251 16,320 18,879
Growth (%) 25 41 32 7 16
Share capital 1,024 1,024 1,024 1,024 1,024
Net Worth 34,390 42,515 53,519 65,816 79,658
Minority Interest 1,443 1,689 1,354 1,699 2,096
Non‐current liabilities 15,892 13,618 11,219 7,219 3,219
Long‐term borrowings 13,622 11,504 8,964 4,964 964
Deferred tax liabilities 961 586 611 611 611
Other Long term liabilities 548 421 396 396 396
Long term provisions 761 1,106 1,248 1,248 1,248
Short term borrowings 9,024 11,836 12,109 12,109 12,109
Trade payables 9,108 10,909 13,449 11,230 12,850
Other current Liabilities 7,081 6,282 7,615 9,015 10,315
Short term provisions 2,927 3,623 898 7,513 8,691

Net Block 40,153 41,954 47,897 49,969 52,168
Goodwill 0 0 0 0 0
Long‐term loans and advances 0 0 0 0 0
Deferred tax Assets 0 0 0 0 0
Other non current Assets 4,953 6,371 7,559 7,559 7,559
Current Assets 34,536 41,815 44,376 56,742 68,879
Inventories 13,675 15,357 14,512 21,427 24,519
Sundry Debtors 11,337 15,884 16,804 16,864 19,297
Other current Assets 686 707 1,335 1,335 1,335
Loans & Advances 2,707 2,408 2,441 4,931 5,642
Current Investments 644 1,212 2,331 2,331 2,331
Total (Assets) 79,863 90,472 100,163 114,601 128,938


Depreciation 2,012 2,873 3,022 3,539 3,841
Change in working capital 1,714 (3,908) 554 (3,670) (2,138)
Total tax paid (1,016) (2,219) (5,736) (4,430) (5,124)
Others (2,748) (987) 487 522 468
Cash flow from operations (a) 9,160 10,318 20,438 17,056 21,447
Capital expenditure (3,595) (4,674) (8,965) (5,611) (6,040)
Change in investments 279 (678) (1,119) 0 0
Others (906) 2,954 (1,188) 0 0
Cash flow from investing (b) (4,222) (2,398) (11,271) (5,611) (6,040)
Free cash flow (a+capex) 5,565 5,645 11,474 11,445 15,407
Debt raised/(repaid) (4,168) 694 (2,267) (4,000) (4,000)
Dividend (incl. tax) (2,113) (2,983) (3,926) (4,201) (4,859)
Others 931 (4,746) (2,243) (344) (646)
Cash flow from financing (c) (5,271) (7,162) (8,461) (8,545) (9,505)
Net change in cash (a+b+c) (333) 758 707 2,901 5,901
Reconciliation of Other balances 0 0 0 0 0
Cash as per Balance Sheet 5,488 6,246 6,953 9,854 15,755

Adjusted EPS (Rs) 8.0 11.3 14.9 15.9 18.4
Growth 25.2 41.2 31.6 7.0 15.7
EBITDA margin 17.0 20.7 25.2 22.6 22.6
EBIT margin 14.9 17.9 23.0 19.9 20.0
Net Margin 11.6 13.6 16.1 15.0 15.2
Tax rate (%) 11.0 17.8 26.9 21.0 21.0
Debt/Equity(x) 0.6 0.5 0.4 0.3 0.2
Net margin 11.6 13.6 16.1 15.0 15.2
Asset turnover (x) 0.9 1.0 1.0 1.0 1.0
ROE(%) 25.3 30.1 31.8 27.4 26.0
RoCE (%) 15.4 19.2 21.5 20.7 21.4
Valuation (x)
PER 40.7 28.8 21.9 20.5 17.7
PCE 32.7 23.1 18.3 16.8 14.7
Price/Book 9.7 7.9 6.2 5.1 4.2
EV/EBITDA 29.2 19.9 14.5 13.8 11.7


Bank of Baroda
NPA pain continues… maintain hold with target

price of Rs 135…
Q4FY16 Result Updates May 16, 2016

Current Previous Bank of Baroda (BOB) reported yet another quarter of disappointment as

CMP : Rs.155 significant increase in provisioning led to second consecutive quarter of Net Loss.
Rating : HOLD Rating : HOLD
BOB’s Net Interest Income at Rs 33.3 bn was ahead of expectation while loan
Target : Rs.135 Target : Rs.130
book continues to shrink as it declined by 10% yoy. Higher non interest income of
STOCK INFO
Rs 17.8 bn led to higher Operating profit of Rs 25.7 bn (vs exp of Rs 21 bn).
Bse 532134
Nse BANKBARODA Further management has done excess NPA provisioning of Rs 29 bn (over and
Bloomberg BOB IN
above RBI requirement) and one time pension related provisioning of Rs.15.6 bn
Reuters BOB.BO
Sector Banking‐Public which led to PBT loss of Rs 42.8 bn. Tax write back of Rs 10.6 bn helped lowering
Face Value (Rs) 2
Equity Capital (Rs Mn) 4621 Net Loss at Rs 32.3 bn as against our expectation of Net Loss of Rs 4 bn and street
Mkt Cap (Rs Mn) 358,120 expectation of Net Profit of Rs 2.5 bn. Gross NPAs remains high at 10%, up 31 bps
52w H/L (Rs) 216/109
Avg Daily Vol (Bse+Nse) 8,985,889 qoq while Net NPAs were down 61 bps qoq to 5.1% due to additional

SHAREHOLDING PATTERN % provisioning. Further BOB has also come up with watch‐list of accounts which are
(as on March 2016) stressed to the extent of ~Rs 270 bn of which ~Rs 150 bn could turn NPA in FY17

Others, Incl Public 32.5 (as per management comments). While management was confident to improve
Promoters 59.2 performance, we believe BOB’s performance is likely to remain muted atleast in
Source: BSE

FY17E and improve in FY18E. However valuation at 1.1x for FY18E ABV leaves no
STOCK PER. (%) 1m 3m 12m
upside mainly due to lower ROEs of 8% / ROA of 0.4%. Hence we continue to
BOB 6% 38% 0%
Sensex 3% 12% ‐4%
maintain hold with target price of Rs 135, valuing it at 1x FY18E ABV.
Source: Capitaline, IndiaNivesh Research

BOB v/s SENSEX
160 Rs.mn Q4FY16 Q3FY16 Q4FY15 Q‐o‐Q % Y‐o‐Y % INSL Q4FY16E Variance(%
140
120
Net Interest Income 33304 27053 31717 23.1 5.0 28970 15

100
80
Pre Provision Profit 25725 17041 26935 51.0 ‐4.5 21035 22
60
Net Profit ‐32301 ‐33420 5984 ‐3.3 ‐639.8 ‐4080 691
40
12/05/2015
26/05/2015
09/06/2015
23/06/2015
07/07/2015
21/07/2015
04/08/2015
18/08/2015
01/09/2015
15/09/2015
29/09/2015
13/10/2015
27/10/2015
10/11/2015
24/11/2015
08/12/2015
22/12/2015
05/01/2016
19/01/2016
02/02/2016
16/02/2016
01/03/2016
15/03/2016
29/03/2016
12/04/2016
26/04/2016
10/05/2016
Source: IndiaNivesh Research

BOB Sensex

Result update

Loan book continues to decline:
Loan book of BOB declined 10% yoy to Rs 4281 bn led by decline in international
loan book by 12% yoy and domestic loan book was down 10% yoy. Management
specified that year end demand which usually led to higher loan book growth at
end of financial year (ie at end of March) was not there in FY17.

Break up of Loan book (Rs bn): % of total Q4FY16 Q4FY15 % YoY Q3FY16 % QoQ
Overseas 31.4 1205 1362 ‐11.5 1251 ‐3.7

Domestic 68.6 2633 2919 ‐9.8 2592 1.6

Total 100.0 3838 4281 ‐10.3 3843 ‐0.1

NIMs improved on qoq:
Daljeet S. Kohli
Head of Research Net Interest margins (Rep) of BOB improved by 43 bps qoq to 2.2%. Domestic NIMs

improved by 59 bps qoq. Net Interest Income at Rs 33.3 bn was ahead of
Tel: +91 22 66188826
expectation. Management specified that they choose to remain away from high
cost deposits and cut ~Rs 270 bn of high cost deposits in FY16 which is likely to help

Yogesh Hotwani in improving margins in FY17. Management has guided for domestic NIMs of 3% for

Research Analyst FY17.

Tel: +91 22 66188839
yogesh.hotwani@indianivesh.in

Q4FY16 Result Update (contd...)

Yields/Costs/Margins (%) Q4FY16 Q4FY15 YoY bps Q3FY16 QoQ bps
NIM 2.2 2.2 ‐2 1.7 43
Domestic NIMs 2.7 2.8 ‐6 2.1 59
International NIMs 0.9 1.0 ‐4 0.9 6
Cost of Deposits 5.0 5.2 ‐18 5.0 ‐2
Cost of Funds* 5.0 4.9 14 5.0 2
Yield on Advances 6.9 7.7 ‐78 7.0 ‐14
Yield on Funds* 8.5 8.0 51 7.8 67
Source: reported numbers, *calculated

Deposits mix (Rs bn): Q4FY16 Q4FY15 % YoY Q3FY16 % QoQ
Domestic CASA (%) 33.6 33.0 56bps 30.0 360bps
Domestic CASA 1325 1368 ‐3.1 1238 7.1
Domestic Current Deposits 193 300 ‐35.7 173 11.6
Domestic Savings Deposits 1133 1067 6.1 1065 6.3
Domestic Term Deposits 2623 2775 ‐5.5 2893 ‐9.3
Domestic Deposits 3948 4143 ‐4.7 4131 ‐4.4
CASA (%) 26.4 26.4 ‐3bps 24.0 236bps
CASA 1513 1630 ‐7.1 1415 6.9
Current Deposits 346 528 ‐34.4 315 10.1
Saving Deposits 1167 1102 5.9 1101 6.0
Term Deposits 4262 4580 ‐7.0 4517 ‐5.7
Total Deposits 5740 6176 ‐7.0 5897 ‐2.7

Non interest income was higher:
BOB’s non interest income was higher than expectation at Rs 17.7 bn led by higher treasury
gains of Rs 9.9 bn and recovery in written off accounts of Rs 1 bn. However fee income
continues to remain lower at 8% yoy.
Breakup of Other income Q4FY16 Q4FY15 % YoY Q3FY16 % QoQ
Comm, Exch & Brok 4540 4288 5.9 3390 33.9
Other Charges 1160 998 16.2 910 27.5
Misc Income 1100 1014 8.5 1280 ‐14.1
Fee Income 6800 6300 7.9 5580 21.9
Trading income 5090 3603 41.3 2890 76.1
Forex income 4810 2444 96.8 2410 99.6
Tresury Income 9900 6048 63.7 5300 86.8
Recovery 1040 606 71.6 240 333.3
Total Other income 17740 12954 36.9 11120 59.5
Asset quality remains under pressure:
Asset quality of BOB remains under pressure as Gross NPAs were higher at 10% (up 31 bps
qoq) while Net NPAs were down 61 bps qoq to 5.1%. Fresh slippage came in at Rs 50 bn
which includes Rs 10 bn of AQR slippages and Rs 20 bn slippages from restructured book.
Total provisioning of Rs 68.6 bn includes 1) Rs 29 bn of additional provisioning over and
above the RBI’s regulatory requirement and 2) Rs 15.6 bn provisioning on account of change
in pension liability valuation. Further key take away from management commentary is that
BOB has created watch list of ~Rs 270 bn which includes ~Rs 137 bn of restructured book and
~Rs 133bn which is currently in SMA 2 category. While management was not sure about the
timing of slippages, quantum of slippages could be to the extent of Rs ~150 bn for FY17E.
However management specified and was confident of higher recoveries and upgradations
which will contain Gross NPAs at current level in absolute terms. Hence we continue to
remain cautious on asset quality of BOB and factor in slippages of Rs 194 bn for FY17E.

(contd...) May 16, 2016 | 2


Provisions (Rs mn) Q4FY16 Q4FY15 % YoY Q3FY16 % QoQ
Provision for NPAs 48800 14914 227.2 64740 ‐24.6
% credit cost/Loan loss prov. 5.1 1.4 369bps 6.7 165bps
Provision for Investment depr. 1800 379 374.9 300 500.0
Provision for Standard assets 1830 3145 ‐41.8 ‐3730 ‐149.1
Other provisions 16147 ‐264 ‐6209.2 336 4712.7
Total Provisions 68577 18174 277.3 61646 11.2

Gross/Net NPA (Rs mn) Q4FY16 Q4FY15 % YoY Q3FY16 % QoQ
Gross NPA 405210 162615 149.2 389341 4.1
Net NPA 194065 80695 140.5 218062 ‐11.0
Fresh Slippages 50300 13590 270.1 156030 ‐67.8
Gross NPA (%) 9.99 3.72 627bps 9.68 31bps
Net NPA (%) 5.06 1.89 317bps 5.67 ‐61bps
Fresh Slippages (%) ‐ ann 5.24 1.38 385bps 15.04 ‐981bps
PCR (%) 60.09 64.99 ‐490bps 52.70 739bps
Valuation:
BOB’s performance continues to remain under pressure due to asset quality problem leading
to second consecutive quarter of Net Loss. Provisioning expense came in as negative surprise
which has helped improving provision coverage significantly (probably amongst best PCR in
PSB space). While fresh slippages for Q4FY16 were lower compared to preceding quarters,
watch‐list accounts which is 7% of loan book continues to remain hangover. We have built in
slippages of Rs 194 bn for FY17E and higher recoveries and upgradations which could help
asset quality number to look stable atleast in FY17E. However current valuations at 1.1x
FY18E ABV leave no upside from current levels due to lower ROEs of 8% / ROA of 0.4%.
Hence we continue to maintain hold with target price of Rs 135, valuing it at 1.1x FY18E ABV.

(contd...) May 16, 2016 | 3


Rs mn Q4FY16 Q4FY15 % YoY Q3FY16 % QoQ FY16 FY15 % YoY
Interest Income 110144 107619 2.3 106140 3.8 440613 429636 2.6
Interest Expense 76840 75903 1.2 79087 ‐2.8 313214 297763 5.2
Net Interest Income 33304 31717 5.0 27053 23.1 127398 131872 ‐3.4
Non Interest Income 17747 12955 37.0 11129 59.5 49989 44020 13.6
Net Income 51051 44671 14.3 38183 33.7 177387 175892 0.8
Total Income 127891 120574 6.1 117270 9.1 490601 473656 3.6
Total Expenses 25326 17736 42.8 21141 19.8 89231 76741 16.3
Pre Provisioning Profit 25725 26935 ‐4.5 17041 51.0 88156 99151 ‐11.1
Provisions 68577 18175 277.3 61646 11.2 155137 44945 245.2
Profit Before Tax ‐42852 8760 ‐589.2 ‐44604 ‐3.9 ‐66981 54206 ‐223.6
Tax ‐10551 2777 ‐480.0 ‐11184 ‐5.7 ‐13025 20222 ‐164.4
Net Profit ‐32301 5984 ‐639.8 ‐33420 ‐3.3 ‐53956 33984 ‐258.8
EPS (Rs) ‐14.0 2.7 ‐618.2 ‐14.5 ‐3.3 ‐23.2 15.7 ‐247.5
Advances 3837702 4280651 ‐10.3 3842721 ‐0.1
Deposits 5740379 6175595 ‐7.0 5896872 ‐2.7
Total Business 9578081 10456247 ‐8.4 9739593 ‐1.7
Investments 1204505 1223197 ‐1.5 1466017 ‐17.8
Gross NPA 405210 162615 149.2 389341 4.1
Net NPA 194065 80695 140.5 218062 ‐11.0
Fresh Slippages 50300 13590 270.1 156030 ‐67.8
Key Ratios (%) bps bps

NIM 2.2 2.2 ‐2 1.7 43
Domestic NIMs 2.7 2.8 ‐6 2.1 59
International NIMs 0.9 1.0 ‐4 0.9 6
Cost of Deposits 5.0 5.2 ‐18 5.0 ‐2
Cost of Funds* 5.0 4.9 14 5.0 2
Yield on Investments 0.0 7.9 ‐789 7.3 ‐730
Yield on Funds* 8.5 8.0 51 7.8 67
Cost to Income Ratio 49.6 39.7 991 55.4 ‐576
CASA 33.6 33.0 56 30.0 360
CAR 13.2 12.6 57 12.2 99
Tier I Capital 10.8 9.9 92 9.6 122
Credit to Deposit 66.9 69.3 ‐246 65.2 169
Slippages 5.2 1.4 385 15.0 ‐981
GNPA 10.0 3.7 627 9.7 31
NNPA 5.1 1.9 317 5.7 ‐61
Provision Coverage Ratio 60.1 65.0 ‐490 52.7 739

(contd...) May 16, 2016 | 4


Financial Statements:
Income Statement (Rs Mn) FY15 FY16E FY17E FY18E
Interest Earned 429636 440613 443554 486659
Interest Expended 297763 313214 313110 333363
Net Interest Income 131872 127398 130444 153296
Other Income 44015 49989 52489 58647
Net Income 175887 177387 182933 211943
Total Income 473650 490601 496043 545306
Total Expenses 76741 89231 93163 101446
Pre Provision Profit 99146 88156 89770 110497
Provisions 44945 155137 63691 62306
Profit before tax 54201 ‐66981 26079 48191
Tax 20222 ‐13025 8606 15903
Net Profit 33979 ‐53956 17473 32288
Source:IndiaNivesh Research
Balance Sheet (Rs Mn) FY15 FY16E FY17E FY18E

Liabilities
Equity 4436 4621 4621 4621
Reserves and Surplus 393918 397369 412069 440475
Net Worth 398354 401990 416690 445096
Deposits 6175595 5740379 6250640 6941551
Borrowings 352643 334717 348202 393311
Other Liabilities & Provisions 223294 236679 380415 431561
Total Liabilities 7149886 6713765 7395947 8211520
Assets
Cash and Bank Balance 1483532 1339004 1517408 1646956
Investments 1223197 1204505 1311574 1456548
Advances 4280651 3837702 4235097 4783755
Other assets 162505 332554 331868 324262
Total Assets 7149886 6713765 7395947 8211520

Valuation Ratios FY15 FY16E FY17E FY18E
Earning Per Share (Rs) 15.3 ‐23.4 7.6 14.0
Book Value Per Share (Rs) 179.6 174.0 180.4 192.6
Adj Book Value Per Share (Rs) 143.2 90.0 96.1 135.5
Dividend Per Share (Rs) 3.2 2.0 1.0 1.4
P/E (x) 10.1 ‐6.6 20.5 11.1
P/BV (x) 0.9 0.9 0.9 0.8
P/ABV (x) 1.1 1.7 1.6 1.1
Balance Sheet Ratios (%)
CAR 12.6 13.5 12.6 12.0
Tier I 9.9 10.4 9.8 9.4
Credit/Deposit 69.3 66.9 67.8 68.9
Domestic CASA 33.0 33.6 33.3 33.3
Growth Y‐o‐Y (%)
Advances 7.8 ‐10.3 10.4 13.0
Deposits 8.6 ‐7.0 8.9 11.1
Total Business 8.3 ‐8.4 9.5 11.8
Net Interest Income 10.2 ‐3.4 2.4 17.5
Other Income ‐1.4 13.6 5.0 11.7
Net Profit ‐25.2 ‐258.8 ‐132.4 84.8
Return Ratios (%)
ROA 0.5 ‐0.8 0.2 0.4
ROE 9.0 ‐13.5 4.3 7.5
Yield / Margin (%)
Yield on Funds 8.1 8.4 8.4 8.3
Cost of Funds 4.7 5.0 4.9 4.8
Interest Spread 3.3 3.4 3.4 3.5
Net Interest Margin 2.5 2.4 2.5 2.6
Net Profit Margin 7.2 ‐11.0 3.5 5.9
Dividend Yield 2.1 1.3 0.6 0.9
Other Ratios (%)
Cost / Income 43.6 50.3 50.9 47.9
Interest Exp. / Interest Inc. 69.3 71.1 70.6 68.5
Gross NPA 3.7 10.0 9.4 7.6
Net NPA 1.9 5.1 4.6 2.8

(contd...) May 16, 2016 | 5

Result Update Lumax Auto Technologies
16 May 2016
Ltd.
Continuing on growth path, maintain BUY with TP of Rs. 448
Lumax Auto technology (LATL) reported strong revenue growth in Q4FY16;
Current Previous however EBITDA margin was below our expectation due to higher product
CMP : Rs.335 development expenses. The company witnessed strong growth (up 15% YoY
Rating : BUY Rating : BUY and 8% QoQ) in revenue to Rs 2.35 bn (vs our expectation of Rs 2.26 bn) on
Target : 448 Target : 448 account of strong growth in value added products like plastic moulded parts,
(NR‐Not Rated) gear shifter and air intake system. However EBITDA margin contracted by 93
STOCK INFO bps to 6.1% vs our expectation of 8% due to higher other expenses. Other
INDEX expenses increased due to new product development expenses for new
BSE 532796 launches of OEM’s like Bajaj v and Toyota innova‐ crysta etc. Management
NSE LUMAXTECH
Bloomberg LMAX IN expects, other expenses will normalize in coming quarters as sales of these
Reuters LUAT.NS products picks up. PAT stood at Rs. 61 mn, lower than our expectation of Rs.
Sector Auto
89 mn due to lower EBITDA.
Face Value (Rs) 10
Equity Capital (Rs mn) 136
Mkt Cap (Rs mn) 4,574 Going ahead, we expect revenue to grow at a CAGR of 17.2% from FY16 ‐
52w H/L (Rs) 424 / 218
FY18E on the back of growth in value added products like LED lighting;
Avg Daily Vol (BSE+NSE) 20,312
Automatic gears shifter and Air intake systems. EBITDA margin is expected to
SHAREHOLDING PATTERN % improve on the back of higher operating leverage. We project the EBITDA
(as on Mar. 2016) margins at 8.4%/9% in FY17E/18E. EPS is expected to grow at a CAGR of
Promoters 55.7
38.5% from FY16 ‐ FY18E. At CMP of Rs 335, LATL is trading at 9.7x FY17e and
FIIs 13.9
DIIs 4.0 7.5x FY18 EPS. We maintain BUY rating on LATL with target price of Rs. 448
Public & Others 26.5 (10x FY18E EPS)

STOCK PERFORMANCE (%) 3m 6m 12m Rs.mn Q4FY16 Q3FY16 Q4FY15 Q‐o‐Q % Y‐o‐Y % INSPL Q4FY16e Variance(%)
Revenue 2358 2188 2051 8 15 2,264 4.17
Lumax Autotech 12.2 9.0 16.5 EBIDTA 145 153 145 ‐5 0 182 ‐20.25
SENSEX 10.8 (0.6) (6.6) PAT 61 71 52 ‐14 16 89 ‐32.12
Adjusted PAT 61 71 52 ‐14 17 89 ‐32.12
Source: Bloomberg, IndiaNivesh Research Source: Company Filings; IndiaNivesh Research

Lumax Autotech v/s SENSEX Change in our estimates for FY17e and introduce FY18E numbers
Due to slowdown in company’s lighting and sheet metal business, we cut revenue of
FY17e by 6%. We also revise margin estimates for FY17E to 8.5% vs 9.8% earlier due
to increase in other expenses and employee costs. We revise our FY17E EPS
estimates downward by 24% to Rs 34.1 vs Rs. 44.8 earlier. We also roll out FY18e
numbers and maintain buy rating on the stock with target price of Rs. 448(10xFY18e
EPS)

Q u ick F u n d am e n tals ( R s . m n ) F Y 17E F Y 18E
New O ld ch an g e ( % ) New
Re ve nue 10,575 1 1 ,3 0 7 -6 12,428

EB ITD A 899 1 ,1 0 8 -1 9 1,119
Daljeet S. Kohli
EB ITD A M ar g in (% ) 8.5 9.8 (1 3 0 ) b p s 9
Head of Research
PAT 464 611 -2 4 642
Tel: +91 22 66188826
EP S (R s) 34.1 44.8 -2 4 44.7
S o u r c e:C o m p a n y fi l i n g s; In d i a N i v esh R e se a r c h
Abhishek Jain
Research Analyst
Tel: +91 22 66188832 Financial Performance
abhishek.jain@indianivesh.in YE March (Rs Mn) Net Sales EBITDA Adj.PAT
Adj.EPS EBITDA
RoE(%) Adj.P/E(x) EV / EBITDA (x)
(Rs)) Margin
FY14 7,628 605 302 22.2 7.9 13.8 15.1 8.2
FY15 8,372 668 450 33.0 8.0 18.5 10.2 7.0
FY16 9,051 683 318 23.3 7.5 11.7 14.4 6.9
34.1 8.5 15.3 5.0
FY17E 10,575 899 464 9.8
FY18E 12,428 1,119 610 44.7 9.0 17.5 7.5 3.8

Result Update | Lumax Auto Technologies Ltd.
Chapter Title
Quick Fundamentals (Rs. Mn) Q4FY16 Q3FY16 Q4FY15 QoQ % YoY % FY16 FY15 YoY%

Revenue 2,345 2,179 2,010 8 17 9,007 8,268 9
Other Operating Income 14 9 42 56 ‐67 45 104 ‐57
Total Income 2,358 2,188 2,051 8 15 9,051 8,372 8
Cost of Revenues 2,213 2,035 1,906 9 16 8368 7,704 9
Raw Materials 1,735 1,585 1,540 9 13 6,583 6,196 6
Other Expenditure 280 250 197 12 42 1,003 832 21
Employee Expenses 198 200 169 ‐1 17 782 676 16
EBIDTA 145 153 145 ‐5 0 684 668 2
Depreciation 57 52 39 10 46 209 194 8
EBIT 88 101 107 ‐13 ‐17 475 474 0
Interest Expense 12 13 13 ‐7 ‐11 47 52 ‐8
Other income 17 21 7 ‐22 132 69 42 65
Exceptional item ‐ ‐ 214 NA
PBT 93 110 101 ‐15 ‐7 496 678 ‐27
Provision for taxation 28 34 45 ‐17 ‐37 155 209 ‐26
PAT before MI 65 76 56 ‐14 16 342 469 ‐27
Minority Interest 4 5 4 24 19
PAT after MI 61 71 52 ‐14 17 318 450 ‐29
EPS (RS.) 4.8 5.6 4.1 10.3 34.4 ‐70
Margin % Basis Points (BPS) BPS
EBITDA 6.2 7.0 7.1 ‐83 ‐93 7.6 8.0 ‐42
EBIT 3.8 4.6 5.2 ‐88 ‐145 5.2 5.7 ‐42
PBT 4.0 5.0 4.9 ‐106 ‐95 5.5 8.1 ‐261
PAT 2.8 3.5 2.7 ‐70 2 3.8 5.6 ‐182
Source: Company Filings; IndiaNivesh Research
EBITDA margin contracted by 93 bps YoY due to product development expenses
EBITDA margin contracted by 93 bps to 6.1% vs our expectation of 8% due to higher
other expenses. Raw material expenses (as a percentage of sales) was down by 264
bps YoY to 74% while other expense increased by 214 bps YoY to 11.9% in Q4FY16.
Other expenses increased due to new product development expenses for new
launches of OEM’s like Bajaj v and Toyota innova‐ crysta etc. Staff cost remain flat
YoY to 8.4% (as a percentage of revenue).
Cost Analysis (% of Revenue) Q4FY16 Q3FY16 Q4FY15 bps QoQ bps YoY FY16 FY15 Change in bps
Raw Materials (Adj.) 74.0% 72.7% 76.6% 127 ‐264 73.1% 74.9% ‐185
Employee Expenses 8.4% 9.2% 8.4% ‐73 5 8.7% 8.2% 50
Other Expenses 11.9% 11.5% 9.8% 48 214 11.1% 10.1% 107
Total Revenue is expected to grow by 17.2% CAGR from FY16‐ FY18e
We expect strong revival of the automotive industry on the back of 1) overall
macroeconomic recovery, 2) cut in fuel prices and 3) peeking out of interest rates.
We are of the opinion that LATL is well poised to take the advantage of positive
macro‐ economic parameter & growth in automotive industry. Further we believe
strong growth in value added products like plastic moulded part, gear shifter and air
intake system. We believe revenue of the company to grow at a CAGR of 17.2% from
FY16 to FY18E.

Revenue and Revenue growth
14,000 20.0
17.5
16.8 18.0
12,000
16.0
10,000 14.0
Growth in percentage
Revenue( Rs. mn)
9.8 12.0
8,000 10.0
8.1
6,000 8.0
6.0
4,000 4.0
2.0
2,000 ‐0.5
0.0
0 ‐2.0
FY14 FY15 FY16 FY17e FY18e

Source: Company filings; IndiaNivesh Research


Margin to expand to 9% by FY18e on the back of high operating leverage and value
added products
With strong volume growth expectations in automotive industry the next couple of
years, we expect strong margin expansion. We expect LATL margins to gradually
improve in coming quarters led by high operating leverage and value added
products. The company's manufacturing facility is presently operating in two shifts
and capacity utilization stand at 70 percent. From here on we expect capacity
utilization to increase to 80‐ 85 percent by FY18E. Thus higher operating leverage
would help in expansion of margin. We expect margins to gradually improve to 8.5%
by FY17E and 9% in FY18.

EBITDA and EBITDA margin
1,200 12.0
1,000 11.0
10.0
EBITDA( Rs. mn)
800
Growth in percentage
9.0
8.5 9.0
600 7.9 8.0
7.5 8.0
400
7.0
200 6.0
0 5.0
FY14 FY15 FY16 FY17e FY18e
EBITDA EBITDA Margin %

Source: Company filings; IndiaNivesh Research

Valuation
We expect company to witness strong volume growth coupled with margin
expansion in the next couple of years on the back of revival in automotive demand
and addition of value added products in its product portfolio. At CMP of Rs 335,
LATL is trading at 9.7x FY17e and 7.5x FY18 EPS. We maintain BUY rating on LATL
with target price of Rs. 448 (10x FY18E EPS)




Net sales 7,628 8,372 9,051 10,575 12,428
Growth (%) 0 10 8 17 18
Operating profit 605 668 683 899 1,119
Other operating income 0 0 0 0 0
EBITDA 605 668 683 899 1,119
Growth (%) (9.9) 10.3 2.4 31.5 24.4
Depreciation (176) (194) (209) (214) (228)
Other income 38 42 69 75 79
EBIT 467 515 543 760 970
Finance cost (38) (52) (47) (43) (39)
Profit before tax 429 678 496 716 930
Tax (current + deferred) (127) (209) (155) (222) (289)
Profit / (Loss) for the period 302 469 342 494 642
Associates, Min Int 0 (19) (24) (30) (32)
Reported net profit 302 450 318 464 610
Adjusted net profit 302 450 318 464 610
Growth (%) (26) 49 (29) 46 31
Y E March (Rs m ) FY14 FY15 FY16 FY17E FY18E
Share capital 136 136 136 136 136
Net Worth 2,260 2,591 2,825 3,245 3,738
Minority Interest 0 0 66 78 85
Non‐current liabilities 721 587 417 367 317
Long‐term borrowings 524 277 244 194 144
Deferred tax liabilities 144 310 172 172 172
Other Long term liabilities 54 0 0 0 0
Long term provisions 0 0 0 0 0
Short term borrowings 0 0 0 0 0
Trade payables 1,514 1,296 1,647 1,796 2,111
Other current Liabilities 239 262 388 172 172
Short term provisions 0 0 0 0 0

Net Block 2,592 2,381 2,421 2,507 2,679
Goodwill 0 0 0 0 0
Long‐term loans and advances 0 0 0 0 0
Deferred tax Assets 0 0 0 0 0
Other non current Assets 0 0 0 0 0
Current Assets 1,949 2,161 2,699 2,927 3,520
Inventories 346 469 579 587 592
Sundry Debtors 1,321 1,324 1,699 1,883 2,213
Cash & Bank Balances 139 195 126 245 467
Other current Assets 0 0 0 0 0
Loans & Advances 143 173 296 211 249
Current Investments 0 0 0 0 0
Total (Assets) 4,734 4,736 5,344 5,658 6,423


Profit before tax 429 678 496 716 930
Depreciation 176 194 209 214 228
Change in working capital (164) (351) (131) (175) (57)
Total tax paid (84) (43) (292) (222) (289)
Others 38 52 47 43 39
Cash flow from operations (a) 357 488 260 502 773
Capital expenditure (414) 17 (249) (300) (400)
Change in investments 0 0 (30) 0 0
Others 38 42 71 73 79
Cash flow from investing (b) (376) 58 (208) (227) (321)
Free cash flow (a+capex) (57) 505 11 202 373
Debt raised/(repaid) 249 (247) (32) (50) (50)
Dividend (incl. tax) 82 95 61 105 181
Others (422) (616) (384) (630) (855)
Cash flow from financing (c) 61 (490) (121) (156) (230)
Net change in cash (a+b+c) 41 57 (70) 119 222
Reconciliation of Other balances 0 (1) (1) 0 0
Cash as per Balance Sheet 139 195 126 245 467

Adjusted EPS (Rs) 22.2 33.0 23.3 34.1 44.7
Growth (26.4) 48.8 (29.3) 46.1 31.3
EBITDA margin 7.9 8.0 7.5 8.5 9.0
EBIT margin 6.1 6.2 6.0 7.2 7.8
Net Margin 4.0 5.4 3.5 4.4 4.9
Tax rate (%) 29.6 30.8 31.1 31.0 31.0
Debt/Equity(x) 0.2 0.1 0.1 0.1 0.0
Net margin 4.0 5.4 3.5 4.4 4.9
Asset turnover (x) 1.7 1.8 1.8 1.9 2.1
ROE(%) 13.8 18.5 11.7 15.3 17.5
RoCE (%) 16.9 16.7 16.8 21.7 24.8
Valuation (x)
PER 15.1 10.2 14.4 9.8 7.5
PCE 9.6 7.1 8.7 6.7 5.5
Price/Book 2.0 1.8 1.6 1.4 1.2
EV/EBITDA 8.2 7.0 6.9 5.0 3.8


Capital First Limited (CFL)

Q4FY16 Result Updates May 16, 2016

Current Previous Stellar performance continued as reported numbers beat our

CMP : Rs.497
estimates driven by strong show in retail loan portfolio coupled
Target : Rs.550 Target : Rs.468 with operating efficiency

STOCK INFO Reported
Bse 532938
Rs mn Q4FY16 Q3FY16 Q4FY15 Q‐o‐Q % Y‐o‐Y %
ISPL Variance
Nse CAPF
Q4FY16E (%)
Bloomberg CAFL IN
NII 2,991 2,567 1,816 17 65 2,618 14
Reuters CAPF.NS
Sector NBFC PPP 1,425 1,257 769 13 85 1,282 11
Face Value (Rs) 10 Net Profit 443 419 356 6 24 450 ‐2
Equity Capital (Rs Mn) 912
Mkt Cap (Rs Mn) 45,336 EPS (Rs) 4.6 4.4 4.1 6 14 4.7 ‐1
52w H/L (Rs) 527 / 321 Source: Company, IndiaNivesh Research; Standalone
Avg Daily Vol (Bse+Nse) 153,867

(as on March 2016)
CFL continued to deliver strong set of numbers in Q4FY16. Net Interest Income
Promoter 65.2
FII 7.3
(NII) of CFL increased at a robust pace of 65% y‐o‐y (+17% q‐o‐q) to Rs 3.0 bn led by

DII 9.9 healthy retail credit assets growth of 36% y‐o‐y and 27 bps sequential increase in
Others 17.6
NIMs (calc) to 7.5% in Q4FY16. However, the reported net profit of CFL increased
Source: BSE

STOCK PER. (%) 1m 3m 12m 24% y‐o‐y (+6% q‐o‐q) to Rs 443 mn. The lower y‐o‐y growth in net profit was
mainly due to lower tax rate (21.6%) in Q4FY15 as against the company’s average
Capital First 11% 31% 24%
Sensex ‐1% 11% ‐6% tax rate of 33.8%. The company continues to maintain one of the best asset
Source: Capitaline, IndiaNivesh Research qualities (Gross NPA of 1.1% and Net NPA of 0.6%) in the class. The gradual shift to

Capital First v/s SENSEX retail lending from wholesale lending over the last six years has de‐risked the
140
120
100 company’s loan portfolio and also accelerated business growth with improved
80
60
margins and stable asset quality. Going forward, diversified retail loan mix,
40
20
0
improving margins, declining costs and enhanced asset quality should translate into
13/05/2015
03/06/2015
24/06/2015
15/07/2015
05/08/2015
26/08/2015
16/09/2015
07/10/2015
28/10/2015
18/11/2015
09/12/2015
30/12/2015
20/01/2016
10/02/2016
02/03/2016
23/03/2016
13/04/2016
04/05/2016
superior earnings profile for CFL. It continues to remain one of the top picks among
Capital First Sensex
our NBFCs coverage universe. However, due to limited upside (+11%) from current
market price, we maintain our ‘HOLD’ rating on CFL with upward revised price
target of Rs 550/‐ (2.5x P/ABV for FY18E).

Healthy AUM growth led by retail credit assets:

The Asset under Management (AUM) of the company increased at a strong pace of
34% y‐o‐y (+7% q‐o‐q) to Rs 160 bn mainly led by strong growth of 36% y‐o‐y in

Retail credit assets. The company continued to focus on retail segment (which
includes Consumer Durable Loans, Two wheeler Loans, Loan against Property,

Mortgage and Small Business Loans). As a result, AUM of CFL has gradually moved
towards retail from 10% in FY10 to 86% as of FY16. We expect AUM to grow at a
Daljeet S. Kohli
CAGR of 25% over FY16‐18E mainly led by growth (29% y‐o‐y) in retail credit assets.
Head of Research
Tel: +91 22 66188826
daljeet.kohli@indianivesh.in AUM
Rs mn % of total Q4FY16 Q3FY16 Q4FY15 % QoQ % YoY
Wholesale Credit Assets 14 22,850 22,085 18,621 3 23
Kaushal Patel
Retail Credit Assets 86 1,37,558 1,27,645 1,01,129 8 36
Research Associate
Total 100 1,60,408 1,49,730 1,19,750 7 34
Tel: +91 22 66188834 Source: Company, IndiaNivesh Research; Standalone
kaushal.patel@indianivesh.in


Breakup of Retail Loan Assets:
100% 0
0 9 10
3 3 6
80% 1 3 5 8 12
60%
93 88
40% 83 81 82 75
20%
0%
FY11 FY12 FY13 FY14 FY15 FY16
MSME Loans Consumer Durable Loans Two‐Wheeler Loans

Gold Loans Others
Source: Company, IndiaNivesh research

The consumer asset financing (consumer durable / two‐wheeler) continued to increase its
contribution as it grew at a robust pace of 84% y‐o‐y to Rs 30 bn. As a result, the proportion
of consumer asset financing to retail credit has increased to 22% in FY16 from 17% as of
FY15. We believe that such a high growth momentum in consumer asset financing to
continue over FY16‐18E considering the growing market for white goods & Televisions. In
addition, any pick‐up in rural demand on the back of normal monsoon can be a big driver for
the MSME and two‐wheeler segments.

NIM (calc) continued to increase sequentially:
Net interest margin (calc) increased 27 bps q‐o‐q and 135 bps y‐o‐y to 7.5% in Q4FY16. It was
supported by company’s tactical shift to the higher yielding fixed rate retail mix (consumer
durables and two‐wheeler loans). We expect that the company will be able to maintain
margins (calc) at ~6.5% over FY16‐18E.

Key Ratios (%) Q4FY16 Q3FY16 Q4FY15 Q‐o‐Q Y‐o‐Y
NIMs* 7.5 7.2 6.1 27 135
Yield on Funds* 14.1 13.6 12.8 47 129
Cost of Funds* 8.6 8.8 9.2 ‐15 ‐55
Source: Company, IndiaNivesh Research; Standalone

Coupled with reducing interest rate, the company’s decision to shuffle its borrowing profile
also helped it to reduce cost of funds (calc) by 55 bps y‐o‐y (‐15 bps q‐o‐q) in Q4FY16.

Borrowing Mix Borrowing Mix
FY16 FY15
Commercial Equity
Paper 12%
1%
Sub‐Debt & Sub‐Debt & Equity
Perpetual Debt Perpetual Debt 16%
7% 6%
NCDs Bank NCDs Bank
14% Borrowing 6% Borrowing
66% 72%
Source: Company, IndiaNivesh research Source: Company, IndiaNivesh research

(contd...) May 16, 2016 | 2


Well maintained Asset Quality:
CFL has maintained its risk return profile efficiently even in current high growth momentum.
The gross NPA and net NPA ratio increased 18 bps and 9 bps sequentially and stood at 1.1%
and 0.6% as of Q4FY16 based on 150 dpd NPA recognition norm. However, it is still one of
the best asset qualities in the class. While the company recognizes assets on 150 dpd basis,
the provisions stand as per 90 dpd norm. As a result, we may see slight higher Gross NPA
numbers due to the migration of company’s NPA reporting from 150 dpd to 90 dpd.
However, it will not increase any further pressure on the company’s credit cost. We don’t
foresee any significant deterioration in the company’s asset quality considering the
company’s strong underwriting processes and procedures backed up with adequate
collateral while expanding retail franchise.

Gross NPA 1.1 0.9 0.7 18 38
Net NPA 0.6 0.5 0.2 9 38

Asset Quality Trend
4.0 3.7
3.5
3.0
2.5
2.0 1.63
1.5 1.1
0.8 0.9 0.9
1.0 0.7 0.6
0.5 0.5 0.5 0.5
0.5 0.3 0.10.0 0.10.0 0.2
0.1 0.1
0.0
FY10 FY11 FY12 FY13 FY14 FY15 Q1FY16 Q2FY16 Q3FY16 Q4FY16
GNPA (%) NNPA (%)

Source: Company filings, IndiaNivesh Research

Operating Performance Summary:
Net Interest Income (NII) of CFL increased at a robust pace of 65% y‐o‐y (+12% q‐o‐q) to Rs
3.0 bn (our estimate: Rs 2.6 bn) in Q4FY16. Interest income grew 44% y‐o‐y (+12% q‐o‐q) to
Rs 5.5 bn whereas interest expense increased at a much slower pace of 25% y‐o‐y (+7%
q‐o‐q) to Rs 2.5 bn.
Operating expenses increased at 50% y‐o‐y to Rs 1.6 bn led by 44% y‐o‐y increase in
employee benefits expenses to Rs 441 mn as the company’s headcount increased by 342
employees from 1,070 as of FY15 to 1,412 as of Q4FY16. Cost to Income ratio decreased 529
bps y‐o‐y (121 bps q‐o‐q) to 52.3%. As a result, re Provisioning Profit (PPP) increased 85%
y‐o‐y (+13% q‐o‐q) to Rs 1.4 bn (our estimate: Rs 1.3 bn) helped by the company’s improved
operating efficiency.
Provisions increased at a much faster pace of 140% y‐o‐y (+23% q‐o‐q) to Rs 757 mn.
Notably, it included additional provisioning of Rs 37 mn due to change in the provisioning
policy for Mortgage Loans. (As a part of prudent practices, the Company has made a more
stringent provisioning policy from FY16 and hence 100% provisioning is provided at 360 DPD
(days past due) as compared to 720 DPD earlier for all mortgage loans.)
The reported net profit of CFL increased 24% y‐o‐y (+6% q‐o‐q) to Rs 443 mn (our estimate:
Rs 450 mn). The lower y‐o‐y growth in net profit was mainly due to lower tax rate (21.6%) in
Q4FY15 as against the company’s average tax rate of 33.8%. So, if we adjust it with normalize
tax rate then the net profit growth would have been at 47% y‐o‐y in Q4FY16.

(contd...) May 16, 2016 | 3


Rs mn Q4FY16 Q3FY16 Q4FY15 % QoQ % YoY FY16 FY15 % YoY
Interest Income 5,458 4,862 3,792 12 44 18,472 14,235 30
Interest Expense 2,467 2,295 1,977 7 25 8,759 7,830 12
Net Interest Income 2,991 2,567 1,816 17 65 9,713 6,405 52
Other Income 0 6 0 na na 6 24 ‐74
Total Net Income 2,991 2,573 1,816 16 65 9,719 6,430 51
Operating Expenses 1,566 1,316 1,047 19 50 4,986 3,773 32
Employee Benefits 479 466 332 3 44 1,755 1,345 31
Depriciation and Amortizat 27 26 27 3 ‐2 100 100 0
Amortised Loan Origination 410 338 227 21 80 1,224 667 83
Legal and Professional Cha 128 122 167 5 ‐23 411 621 ‐34
Other 522 363 293 44 79 1,496 1,041 44
Total Income 5,458 4,868 3,792 12 44 18,478 14,259 30
Total Expenses 4,033 3,611 3,023 12 33 13,745 11,602 18
Pre Provisioning Profit 1,425 1,257 769 13 85 4,733 2,657 78
Provisions 757 617 315 23 140 2,347 1,044 125
PBT and Exceptional Items 669 640 455 5 47 2,386 1,613 48
Exceptional Items 0 0 0 na na 0 0 na
Profit Before Tax (PBT) 669 640 455 5 47 2,386 1,613 48
Tax 226 222 98 2 130 817 493 66
Net Profit 443 419 356 6 24 1,569 1,120 40
EPS‐ Diluted (Rs) 4.6 4.4 4.1 6 14 16.4 12.9 27
Capital First Home Finance Private Limited (CFHFPL)
CFHFPL is a wholly owned Housing Finance Company (HFC) subsidiary of Capital First Limited.
It received a license from the National Housing Bank (NHB) for commencement of Housing
Finance Business during FY14. The Loan Book of CFHFPL grew to Rs 4.0 bn as of Q4FY16.

Consolidated Financials:
The consolidated profit of CFL increased 30% y‐o‐y (+7% q‐o‐q) to Rs 475 mn as compared to
Rs 365 mn in Q4FY15.

Consolidated
Rs mn Q4FY16 Q3FY16 Q4FY15 Q‐o‐Q % Y‐o‐Y % FY16 FY15 % YoY
NII 3,060 2,617 1,842 17 66 9,908 6,517 52
PPP 1,480 1,297 786 14 88 4,886 2,718 80
Net Profit 475 445 365 7 30 1,662 1,143 45
Source: Company, IndiaNivesh Research; Consolidated
Outlook and Valuation:
CFL has beaten our Q4FY16 estimates with strong performance across all segments. The
management continued to deliver robust result quarter over quarter. It was not only limited
to Q4FY16 but the company has shown overall stellar performance on most parameters
during FY16 also. The robust profit growth of 40% y‐o‐y in FY16 was the result of (1) 36%
y‐o‐y growth in retail credit assets, (2) Improvement in NIM to 6.9% from 5.8% in FY15 and
(3) Declining trend in cost to income ratio to 51% in FY16 from 59% in FY15 and 78% in FY13.
CFL has invested appropriately in technology and other related resources to ensure faster
and effective resolution of lending proposals which gives the company an edge over
competitors. As a result, loan growth in two wheeler and consumer durable business
continues to remain strong. We believe that the current growth momentum in CFL to
continue over near to medium term. Going forward, diversified retail loan mix, improving
margins, declining costs and enhanced asset quality should translate into superior earnings
profile for CFL. RoE / RoA (calc) are likely to improve to 15% / 1.5% by FY18E from 8% / 1.1%

(contd...) May 16, 2016 | 4


in FY15. We believe that premium valuations on the stock are therefore likely to be sustained
or even improve further.
It continues to remain one of the top picks among our NBFCs coverage universe. However,
due to limited upside (+11%) from current market price, we maintain our ‘HOLD’ rating on
CFL with upward revised price target of Rs 550/‐ (2.5x P/ABV for FY18E). We believe that any
correction in the stock price should be utilized as an entry point on the stock by the
investors. We rollover our numbers from FY17E to FY18E and assign higher P/ABV multiple of
2.5x v/s 2.3x earlier.

NIMs* 7.5 7.2 6.1 27 135
Yield on Funds* 14.1 13.6 12.8 47 129
Cost of Funds* 8.6 8.8 9.2 ‐15 ‐55
Cost to Income* 52.3 51.1 57.6 121 ‐529
CAR 19.8 20.0 23.5 ‐20 ‐369
Gross NPA 1.1 0.9 0.7 18 38
Net NPA 0.6 0.5 0.2 9 38
RoAUM (Ann.)* 1.1 1.2 1.0 ‐3 11

Consolidated Financials:
Rs mn Q4FY16 Q3FY16 Q4FY15 % QoQ % YoY FY16 FY15 % YoY
Interest Income 5,583 4,963 3,850 12 45 18,881 14,395 31
Income from Operations 5,582 4,956 3,841 13 45 18,822 14,244 32
Other Operating Income 1 8 9 ‐83 ‐85 58 150 ‐61
Interest Expense 2,524 2,346 2,008 8 26 8,972 7,878 14
Net Interest Income 3,060 2,617 1,842 17 66 9,908 6,517 52
Other Income 0 6 1 ‐100 ‐98 10 71 ‐86
Total Net Income 3,060 2,623 1,843 17 66 9,918 6,588 51
Operating Expenses 1,579 1,327 1,057 19 49 5,032 3,870 30
Employee Benefits 483 470 336 3 43 1,768 1,358 30
Depriciation and Amortization 27 26 27 3 ‐2 100 100 0
Amortised Loan Origination Cost 413 340 229 21 81 1,232 670 84
Legal and Professional Charges 133 125 169 6 ‐21 422 626 ‐33
Other 524 366 295 43 77 1,510 1,116 35
Total Income 5,583 4,970 3,851 12 45 18,891 14,466 31
Total Expenses 4,103 3,673 3,065 12 34 14,005 11,748 19
Pre Provisioning Profit 1,480 1,297 786 14 88 4,886 2,718 80
Provisions 766 619 318 24 141 2,365 1,055 124
PBT and Exceptional Items 715 678 468 5 53 2,521 1,663 52
Exceptional Items 0 0 0 na na 0 0 na
Profit Before Tax 715 678 468 5 53 2,521 1,663 52
Tax 239 232 103 3 132 860 520 65
Net Profit 475 445 365 7 30 1,662 1,143 45
EPS‐ Diluted (Rs) 5.0 4.6 4.2 7 19 17.3 13.1 32
Source: Company, IndiaNivesh Research; Consolidated

(contd...) May 16, 2016 | 5


Financial Statement:
Income Statement (Rs mn) FY14 FY15 FY16 FY17E FY18E
Interest Income 10,536 14,106 18,451 24,483 31,719
Interest Expense 6,498 7,830 8,759 11,374 15,204
Net Interest Income 4,038 6,277 9,692 13,109 16,515
Non Interest Income 260 153 27 41 59
Net Income 4,298 6,430 9,719 13,150 16,574
Operating Expenses 3,019 3,773 4,986 6,187 7,708
Total Income 10,796 14,259 18,478 24,524 31,778
Total Expenditure 9,518 11,602 13,745 17,561 22,912
Pre Provisioning Profit 1,278 2,657 4,733 6,963 8,867
Provisions 525 1,044 2,347 3,619 4,322
Profit Before Tax 409 1,613 2,386 3,344 4,545
Tax 39 493 817 1,145 1,511
Net Profit 370 1,120 1,569 2,199 3,034

Balance Sheet (Rs mn) FY14 FY15 FY16 FY17E FY18E
Liabilities
Capital 820 910 912 912 912
Reserves and Surplus 10,537 14,483 15,685 17,563 20,224
Borrowings 70,357 59,102 86,467 119,953 164,847
Provisions 1,330 1,839 2,168 3,100 4,369
Other Liabilities 17,031 27,122 35,094 40,953 46,263
Assets
Fixed Assets 276 191 292 322 354
Investments 4,267 1,095 2,542 2,771 3,170
Advances 71,510 87,238 121,767 155,773 198,611
Other Assets 4,125 4,737 5,377 8,038 14,619
Total Assets 100,074 103,456 140,325 182,481 236,615

(contd...) May 16, 2016 | 6


Ratios
Per share data (Rs) FY14 FY15 FY16 FY17E FY18E
EPS 4.5 12.3 17.2 24.1 33.3
DPS 2.0 2.2 2.4 3.0 3.5
BV 138.5 169.2 181.9 202.5 231.7
ABV 137.5 166.9 172.2 187.6 217.1
Valuation (%)
P/E 34.1 40.4 28.9 20.6 14.9
P/BV 1.1 2.9 2.7 2.5 2.1
P/ABV 1.1 3.0 2.9 2.6 2.3
Div Yield 1.3 0.4 0.5 0.6 0.7
Spreads (%)
Yield on Funds 12.3 13.0 13.2 13.3 13.4
Cost of Funds 8.8 9.4 9.5 9.4 9.3
NIM 4.7 5.8 6.9 6.3 6.2
Capital (%)
CAR 22.2 23.5 19.8 15.1 13.3
Tier I 16.3 18.8 15.1 11.5 10.1
Tier II 5.9 4.7 4.7 3.6 3.2
Asset (%)
GNPA 0.5 0.7 1.1 1.2 1.3
NNPA 0.1 0.2 0.6 0.7 0.5
Management (%)
Cost / Income 70.3 58.7 51.3 47.0 46.5
Earnings (%)
RoE 3.6 8.4 9.8 12.6 15.4
RoA 0.4 1.1 1.3 1.4 1.5
RoAUM 0.4 1.0 1.1 1.2 1.3
Growth Ratios (%)
AUM 28.9 23.7 34.0 30.0 27.5
Borrowing 26.9 ‐16.0 46.3 38.7 37.4
Balance Sheet 32.6 3.4 35.6 30.0 29.7
NII 30.9 55.4 54.4 35.3 26.0
PPP 91.5 107.9 78.1 47.1 27.3
Net Profit ‐47.0 202.9 40.1 40.1 38.0

(contd...) May 16, 2016 | 7

Allahabad Bank
Disappointment continues…

Q4FY16 First Cut Analysis May 16, 2016

Current Previous Allahabad Bank (ALBK) reported poor performance for Q4FY16 led by significant

CMP : Rs.53 deterioration in asset quality. Net Interest Income was lower than expectation at
Rs 12.7 bn led by both muted loan growth (up 2% yoy) and higher slippages
Target : Rs.52 Target : Rs.52
leading to income reversals. NIMs (Calc) was down 31 bps qoq to 2.5%. Operating
STOCK INFO
profit was down 13% yoy to Rs 8.7 bn (vs exp of Rs 9.9 bn) led by both lower NII
Bse 532480
Nse ALBK and Non interest income (down 2% yoy). ALBK reported PBT loss of Rs 16.1 bn
Bloomberg ALBK IN
mainly as provisioning expense was up 294% yoy to Rs 24.9 bn. However tax
Reuters ALBK.BO
Sector Banking‐Public write back of Rs 10.3 bn helped in lowering Net Loss at Rs 5.8 bn. Asset quality
Face Value (Rs) 10
Equity Capital (Rs Mn) 6006 deteriorated as both Gross and Net NPAs increased by 57% and 63% qoq to Rs
Mkt Cap (Rs Mn) 31,830 154 bn and Rs 103 bn (up 336 and 253 bps qoq to 9.8% and 6.8%) respectively. We
52w H/L (Rs) 110/40
Avg Daily Vol (Bse+Nse) 2,617,679 will come up with further updates after conference call with management.

(as on March 2016)

Rs.mn Q4FY16 Q3FY16 4QFY15 Q‐o‐Q % Y‐o‐Y % INSL Q3FY16E Variance(%)
Others, Incl Public 38.6 Net Interest Income 12737 14162 14569 ‐10.1 ‐12.6 14406 ‐11.6
Promoters 61.4 Pre Provisioning Profit 8733 8604 10088 1.5 ‐13.4 9872 ‐11.5
Source: BSE Net Profit ‐5811 ‐4861 2026 19.5 ‐386.8 ‐2245 158.9

STOCK PER. (%) 1m 3m 12m

ALBK ‐1% 1% ‐46%
Sensex 5% 6% ‐4%

Results highlights
ALBK v/s SENSEX ALBK’s loan growth was lower at 2% yoy while deposits grew 4% yoy. Net Interest
160
140
120
100
income was down 13% yoy to Rs 12.7 bn (vs exp of Rs 14.4 bn). This was mainly due
80
60
40
to significant deterioration in asset quality which could have led to lower interest
12/05/2015
26/05/2015
09/06/2015
23/06/2015
07/07/2015
21/07/2015
04/08/2015
18/08/2015
01/09/2015
15/09/2015
29/09/2015
13/10/2015
27/10/2015
10/11/2015
24/11/2015
08/12/2015
22/12/2015
05/01/2016
19/01/2016
02/02/2016
16/02/2016
01/03/2016
15/03/2016
29/03/2016
12/04/2016
26/04/2016
10/05/2016
income growth. As a result, NIMs (Calc) was down by 31 bps qoq to 2.5%.
ALBK Sensex

Source: Capitaline, IndiaNivesh Research Non Interest income was muted at Rs 5.5 bn, down 2% yoy. Operating expense was
lower by 6% yoy and Operating profit was down 13% yoy to Rs 8.7 bn (vs exp of Rs
8.7 bn). Further provisioning expense spiked by 194% yoy to Rs 24.9 bn which is 2x
of Net Interest income earned by ALBK. As a result, ALBK reported PBT loss of Rs
16.1 bn. Further tax write back of Rs 10.3 bn lowered the net loss to Rs 5.8 bn (vs
our exp of Net Loss of Rs 4 bn).

Asset quality deteriorated with significant increase in Gross / Net NPA by 57% /

63% qoq to Rs 154 / Rs 103 bn respectively. In % terms, Gross / Net NPAs increased
by 336 / 253 bps qoq to 9.8% / 6.8% respectively. Fresh slippages were Rs 7.4 bn vs
Rs 5.5 bn in Q3FY16. We will come up with further details on asset quality post

conference call with management.

Daljeet S. Kohli Valuation
Head of Research At CMP of Rs 53, ALBK is trading at P/ABV of 0.5x for FY17E. We have a hold
Tel: +91 22 66188826
rating on ALBK with target price of Rs 52. We will come up with further
daljeet.kohli@indianivesh.in details post conference call scheduled for 16th May 2016.

Yogesh Hotwani
Research Analyst
Tel: +91 22 66188839
yogesh.hotwani@indianivesh.in

Q4FY16 First Cut Analysis (contd...)

Rs mn Q4FY16 4QFY15 % YoY Q3FY16 % QoQ FY16 FY15 % YoY
Interest Income 44967 48249 ‐6.8 46185 ‐2.6 188849 197161 ‐4.2
Interest Expense 32230 33680 ‐4.3 32023 0.6 129865 135382 ‐4.1
Net Interest Income 12737 14569 ‐12.6 14162 ‐10.1 58985 61779 ‐4.5
Non Interest Income 5547 5659 ‐2.0 4117 34.8 19101 19960 ‐4.3
Net Income 18284 20227 ‐9.6 18279 0.0 78086 81739 ‐4.5
Total Income 50514 53907 ‐6.3 50302 0.4 207951 217121 ‐4.2
Total Expenses 9552 10139 ‐5.8 9675 ‐1.3 36747 37142 ‐1.1
Pre Provisioning Profit 8733 10088 ‐13.4 8604 1.5 41339 44597 ‐7.3
Provisions 24872 6311 294.1 12082 105.9 52532 28567 83.9
Profit Before Tax ‐16139 3777 ‐527.3 ‐3478 364.1 ‐11193 16031 ‐169.8
Tax ‐10328 1751 ‐690.0 1384 ‐846.4 ‐3760 9822 ‐138.3
Net Profit ‐5811 2026 ‐386.8 ‐4861 19.5 ‐7433 6209 ‐219.7
EPS (Rs) ‐10.7 3.7 ‐386.8 ‐8.9 19.5 ‐13.6 11.4 ‐219.7
Advances 1523721 1498769 1.7 1531810 ‐0.5
Deposits 2006444 1934241 3.7 1915280 4.8
Total Business 3530165 3433010 2.8 3447090 2.4
Gross NPA 153846 83580 84.1 98021 57.0
Net NPA 102925 59789 72.1 63075 63.2
Key Ratios (%) bps bps

NIM 2.21 2.85 ‐64 2.55 ‐34
Cost of Deposits 6.3 6.9 ‐65 6.6 ‐27
Cost of Funds 6.1 6.7 ‐61 6.3 ‐21
Cost of Borrowing 4.1 4.1 ‐3 3.8 31
Yield on Investments 7.4 7.4 2 7.4 0
Yield on Funds 8.6 9.4 ‐82 9.1 ‐47
Cost to Income Ratio 52.2 50.1 211 52.9 ‐69
CASA 36.4 33.6 288 35.4 105
CAR 11.0 10.5 57 10.4 64
Tier I Capital 0.0 7.7 ‐772 7.4 ‐740
Credit to Deposit 75.9 77.5 ‐154 80.0 ‐404
Slippages 8.2 3.8 442 8.2 0
GNPA 9.8 5.5 430 6.4 336
NNPA 6.8 4.0 277 4.2 253
Provision Coverage Ratio 48.2 51.0 ‐278 55.4 ‐718

(contd...) May 16, 2016 | 2

Result Today

 Apcotex Industries Ltd.
 Pennar Engineered Building Systems Ltd

IndiaNivesh Universe | Valuation Table (contd...) 16 May, 2016
IndiaNivesh Universe | Valuation Table (CMP as on 13th May, 2016)
Rs. Rs. % Sales (Rs. Mn) EBITDA (Rs.Mn) PAT (Rs. Mn) EPS (Rs.) P/E (x)
Com pany Nam e
CMP TP Reco (-) Dow n/(+) Up FY15 FY16E FY17E FY15 FY16E FY17E FY15 FY16E FY17E FY15 FY16E FY17E FY16E FY17E
Auto
A t
Atul Auto 470 UR UR NA 1,168 5,348 6,027 579 749 859 389 488 569 18.5 22.2 25.9 21.2 18.1
Bajaj Auto 2,518 2,820 BUY 12.0 211,062 233,897 263,651 41,388 47,818 53,315 30,256 36,950 40,804 104.6 128.0 141.0 19.7 17.9
Exide Industries 147 165 BUY 12.5 94,794 74,594 83,355 11,043 11,276 12,668 7,137 6,787 7,612 8.4 7.9 9.0 18.5 16.4
Force Motors 3,317 4,294 BUY 29.5 30,336 42,903 42,903 2,744 3,861 3,861 1,796 2,572 2,572 136.3 195.2 195.2 17.0 17.0
Lumax Auto 335 448 BUY 33.7 8,372 11,308 NA 667 1,108 NA 450 611 NA 33.0 44.8 NA 7.5 NA
Hero MotoCorp 2,913 3,243 BUY 11.3 273,033 318,872 358,883 35,424 47,921 54,998 23,647 33,447 38,190 118.4 167.5 191.2 17.4 15.2
Mahindra & Mahindra 1,313 1,388 HOLD 5.7 638,626 766,238 861,300 88,932 90,999 110,922 31,375 34,780 43,665 50.7 57.7 72.4 22.8 18.1
Maruti Suzuki India 3,846 4,344 HOLD 12.9 499,706 570,333 643,956 67,130 86,457 90,531 37,112 44,817 48,885 122.9 148.4 161.9 25.9 23.8
Tata Motors Company 390 496 BUY 27.2 2,627,963 2,607,095 2,776,420 392,364 353,610 389,656 139,863 114,733 126,284 43.0 33.8 37.2 11.5 10.5
TVS Motor Company 296 235 SELL -20.6
20 6 103 117
103,117 136 698
136,698 NA 6 030
6,030 10 547
10,547 NA 3 283
3,283 6 199
6,199 NA 69
6.9 13 0
13.0 NA 22 8
22.8 NA
SKF India $$$ 1,218 1,164 HOLD -4.5 23,758 25,605 25,605 2,739 3,006 3,551 2,060 2,313 2,804 39.1 43.8 53.1 27.8 22.9
Sw araj Engines 1,100 1,108 HOLD 0.7 5,397 6,868 8,036 747 1,042 1,228 518 735 860 41.7 59.1 69.3 18.6 15.9
Inform ation Technology

Infosys 1,207 1,412 BUY 17.0 533,190 831,561 831,561 151,620 228,679 228,679 123,290 170,050 170,050 53.9 74.3 74.3 16.2 16.2
Tata Consultancy Services 2,523 2,731 HOLD 8.2 946,484 1,360,147 1,360,015 239,920 380,650 380,740 198,522 295,858 295,925 101.4 150.3 150.4 16.8 16.8
Wipro 540 729 BUY 35.1 469,545 625,031 625,031 104,609 161,185 161,185 86,528 109,131 109,131 35.1 44.3 44.3 12.2 12.2
HCL Technologies### 723 977 HOLD 35.1 367,012 468,010 520,463 84,736 99,895 111,315 73,171 80,389 90,025 51.8 56.7 63.4 12.8 11.4
Tech Mahindra 480 595 BUY 24.0 226,213 263,563 293,510 42,082 48,959 56,985 26,277 28,055 34,383 26.7 28.5 35.0 16.8 13.7
NIIT Technologies 474 597 BUY 26.0 23,725 30,579 35,166 3,428 5,382 6,365 1,141 3,199 3,792 18.6 53.3 62.2 8.9 7.6
KPIT Cummins 165 166 HOLD 0.9 29,899 39,369 39,369 3,254 5,177 5,177 2,370 3,451 3,451 11.9 18.4 18.4 8.9 8.9
Mastek 145 154 EXIT 6.1 9,096 6,226 NA 726 518 NA 518 450 NA 23.0 12.3 NA 11.8 NA
Majesco Ltd 589 899 BUY 52.6 4,993 7,484 10,456 -102 22 385 -250 -100 127 -11.1 -4.4 5.6 NM 105.2
SQS India BFSI 1,160 1,068 HOLD -8.0 2,142 6,184 6,184 416 576 576 216 902 902 20.6 85.4 85.4 13.6 13.6
Onmobile Global 119 148 BUY 24.9 8,471 9,555 10,893 1,344 1,784 576 -323 -128 1,144 -2.9 -1.2 11.0 (98.8) 10.8
Oil & Gas

Gail India 380 449 BUY 18.3 567,420 531,691 591,974 46,962 41,829 61,050 29,763 22,716 36,703 24.0 17.9 28.9 21.2 13.1
Oil India 329 460 BUY 40.0 97,482 95,375 103,000 35,304 34,963 42,000 25,102 23,789 29,000 41.8 39.6 48.2 8.3 6.8
Oil & Natural Gas Corporation 204 254 BUY 24.7 823,428 821,011 867,384 326,499 300,190 345,002 177,330 163,088 195,823 20.7 19.1 22.9 10.7 8.9
Reliance Industries 978 1,365 BUY 39.5 3,754,350 2,589,142 2,848,314 373,640 437,727 553,418 209,531 245,848 305,687 64.9 76.1 94.7 12.9 10.3
FMCG
Bajaj Corp 405 459 HOLD 13.4 8,256 11,936 NA 2,392 2,780 3,169 1,727 2,000 2,640 11.7 13.6 18.0 29.8 22.5
Godrej Consumer Products** 1,392 UR NOT RATED NA 82,764 104,792 119,829 13,710 19,301 22,093 9,071 13,559 15,889 26.6 39.9 46.4 34.9 30.0
Marico** 254 NA HOLD NA 57,330 NA NA 8,859 NA NA 5,735 NA NA 4.4 NA NA NA NA
Dabur** 290 NA HOLD NA 78,065 95,144 107,775 13,343 17,348 19,794 10,658 14,349 16,496 6.0 8.2 9.4 35.4 30.8
Tata Global Beverages** 120 180 BUY 50.6 79,934 82,294 88,027 7,759 7,285 8,188 2,478 3,492 4,174 3.9 5.8 6.9 20.7 17.4
IndiaNivesh Universe | Valuation Table (contd...)
Rs. Rs. % Sales (Rs. Mn) EBITDA (Rs.Mn) PAT (Rs. Mn) EPS (Rs.) P/E (x)
Com pany Nam e
Pharm a
Ajanta Pharma 1,536 1,399 HOLD -8.9 14,806 21,639 25,296 5,053 6,989 8,297 3,099 4,863 5,886 35.2 55.0 66.6 27.9 23.1
Aurobindo Pharma 784 880 BUY 12.2 121,205 154,014 177,085 26,058 32,634 40,133 15,758 20,917 25,622 27.0 35.9 44.0 21.8 17.8
Alembic Pharma 582 723 BUY 24.2 20,561 38,233 38,233 3,976 8,942 8,942 2,829 6,296 6,296 15.0 33.4 33.4 17.4 17.4
Biocon 629 491 HOLD -21.9 30,898 45,638 45,638 7,158 10,412 10,412 4,974 5,304 5,304 24.9 26.8 26.8 23.5 23.5
Cadila 327 354 HOLD 8.4 84,971 122,320 NA 17,737 27,102 NA 11,506 18,097 NA 11.2 17.7 NA 18.4 NA
Cipla 532 637 BUY 19.8 113,454 134,867 160,888 21,631 28,036 32,542 11,808 17,127 20,446 14.7 21.3 25.5 25.0 20.9
Divis Lab 1,079 1,276 BUY 18.3 31,149 38,011 43,041 11,658 16,400 16,621 8,515 11,962 12,630 32.1 40.0 48.2 27.0 22.4
Dr Reddy 2,917 3,320 HOLD 13.8 148,715 180,117 NA 25,465 49,617 NA 23,364 23,057 NA 136.6 135.4 NA 21.5 NA
Glenmark 869 995 BUY 14.5 66,298 105,941 NA 11,939 20,754 NA 4,753 13,418 NA 17.5 49.7 NA 17.5 NA
Indoco 261 377 BUY 44.6 8,570 9,832 12,698 1,655 1,779 2,760 828 991 1,738 9.0 10.8 18.9 24.1 13.8
Jubilant Life Science 391 494 BUY 26.2 58,262 68,566 76,736 7,454 12,250 14,468 -578 4,935 6,875 -3.6 31.0 43.2 12.6 9.1
Lupin 1,589 1,904 HOLD 19.8 127,700 130,350 164,244 37,650 32,545 47,228 24,032 24,756 34,158 53.2 55.2 76.2 28.8 20.8
Sun Pharma 795 880 HOLD 10.7 274,334 246,491 299,095 80,016 76,081 118,172 45,394 47,121 84,708 18.9 19.6 35.2 40.6 22.6
Ipca Lab 468 482 HOLD 3.0 31,418 31,960 42,486 5,339 4,635 8,269 2,542 2,298 4,176 20.2 11.6 27.5 40.3 17.0
Torrent Pharma 1,392 1,632 BUY 17.3 45,853 68,933 74,870 10,309 23,674 18,870 7,509 17,086 13,156 44.4 49.1 77.7 13.0 17.9
JB Chemical 258 341 BUY 32.4 11,442 12,828 14,957 2,938 2,154 2,741 1,004 1,675 1,927 11.8 19.8 22.8 13.0 11.3
Shilpa Medicare 481 514 BUY 7.0 5,839 6,994 9,894 1,267 1,449 2,091 737 900 1,313 9.6 11.7 17.0 41.1 28.3
Others
BASF India Ltd.** && 998 1,189 HOLD 19.1 42,347 52,919 53,595 3,642 2,515 3,521 1,279 512 1,126 1.0 11.8 26.0 84.6 38.4
UPL 584 557 HOLD -4.6 120,905 167,046 167,046 23,853 34,677 34,677 11,440 18,797 18,797 26.7 18.4 18.4 31.7 31.7
Coromandel International Ltd. 225 222 BUY -1.3 80,792 134,163 134,163 10,380 10,455 10,455 4,018 4,958 4,958 15.4 17.0 17.0 13.2 13.2
Meghmani Organics Ltd 38 34 BUY -11.2 12,942 14,126 15,403 1,922 2,792 3,102 439 766 890 16.4 3.1 3.6 12.2 10.7
Camlin Fine Science Ltd 99 177 BUY 79.2 5,583 5,047 6,914 882 929 1,404 550 399 758 16.4 4.2 7.9 23.5 12.5
Kajaria Ceramics 1,075 NA HOLD NA 21,869 NA NA 3,555 NA NA 1,756 NA NA 22.7 NA NA NA NA
Somany Ceramics 424 NA BUY NA 15,431 NA NA 1,093 NA NA 464 NA NA 11.9 NA NA NA NA
Aditya Birla Nuvo Ltd.** 961 1,257 BUY 30.8 265,160 255,683 292,927 54,043 62,366 73,492 14,155 15,687 17,878 108.6 123.8 143.2 7.8 6.7
Radico Khaitan Ltd.** 88 165 BUY 86.5 14,122 16,794 18,683 1,935 2,333 2,664 712 1,058 1,320 3.7 8.0 9.8 11.1 9.1
Kaveri Seed Ltd** 408 UR UR NA 8,928 10,031 10,722 1,886 2,563 2,635 1,727 2,407 2,554 25.0 34.9 37.1 11.7 11.0
HSIL Ltd 309 NA BUY NA 19 806
19,806 NA NA 3 300
3,300 NA NA 854 NA NA 12 9
12.9 NA NA NA NA
Liberty Shoes Ltd 183 NA HOLD NA 5,257 NA NA 394 NA NA 132 NA NA 7.9 NA NA NA NA
Pennar Industries Ltd 47 87 BUY 86.9 12,634 15,480 19,376 1,178 1,461 1,839 359 599 839 2.0 5.0 7.0 9.3 6.7
KPR Mills Ltd 907 NA BUY NA 25,004 NA NA 4,696 NA NA 2,101 NA NA 55.8 NA NA NA NA
Nitin Spinners 63 NA BUY NA 7,669 NA NA NA NA NA 442 NA NA 9.6 NA NA NA NA
KEC International 131 188 BUY 43.8 84,678 88,820 97,702 5,118 7,283 8,207 910 2,463 3,000 6.3 9.6 11.7 13.6 11.2
Rs. Rs. % Sales (Rs. Mn) EBITDA (Rs.Mn) PAT (Rs. Mn) EPS (Rs.) EV/EBITDA (x)
Com pany Nam e
Telecom
Bharti Airtel 355 287 SELL -19.1
-19 1 920 394
920,394 1,049,866
1 049 866 1,140,571
1 140 571 312 210
312,210 371 048
371,048 408,045
408 045 51 835
51,835 70 400
70,400 70 748
70,748 13.0
13 0 17.7
17 7 17.7
17 7 54
5.4 49
4.9
Idea Cellular 114 127 SELL 11.8 315,269 447,243 447,243 107,668 138,883 NA 31,929 23,257 23,257 9.0 6.4 6.4 5.3 4.8
Real Estate
Oberoi Realty 275 342 BUY 24.2 9,227 24,465 NA 4,205 12,649 NA 3,171 3,966 4,787 9.7 12.1 14.6 7.5 NA
Nesco 1,503 1,896 BUY 26.1 1,413 2,253 2,742 1,039 1,918 1,975 816 1,221 1,511 58.0 86.6 107.3 8.9 8.1
Ashiana Housing Ltd 150 220 BUY 46.7 1,413 3,549 5,517 1,039 996 1,794 816 796 1,175 58.0 6.2 11.4 13.5 7.5
IndiaNivesh Universe | Valuation Table (contd...)
Rs. Rs. % Sales (Rs. Mn) EBITDA (Rs.Mn) PAT (Rs. Mn) EPS (Rs.) P/BV (x)
Com pany Nam e
Pow er
P
Coal India 281 408 BUY 45.0 741,201 800,644 899,775 173,354 189,493 217,302 137,267 171,842 194,343 21.73 27.20 31.00 4.4 4.2
NTPC 141 162 BUY 14.9 806,220 831,301 853,268 175,120 191,199 196,252 99,863 87,957 84,153 12.11 10.70 10.20 1.3 1.3
Pow er Grid Corporation 145 187 BUY 29.2 178,396 210,265 248,068 152,433 180,051 213,323 54,965 66,617 84,098 10.51 12.73 16.08 1.8 1.5
Reliance Pow er 49 60 BUY 21.8 68,527 93,281 96,064 25,866 39,857 42,900 10,283 13,728 14,000 3.68 4.76 5.00 0.6 0.6
Tata Pow er Company 70 104 BUY 47.8 343,669 359,786 375,125 69,502 85,906 89,671 1,678 9,949 12,959 0.17 3.92 4.93 1.3 1.2
Rs. Rs. % Net Interest Incom e (Rs. Mn) Pre-Tax Pre-Prov. Profit (Rs.Mn) PAT (Rs. Mn) EPS (Rs.) P/ABV (x)
Com pany Nam e
Banking & Financial Services
Allahabad Bank 53 52 HOLD -1.0 61,779 60,669 65,624 44,597 42,493 46,191 6,209 -5,130 4,541 11.4 -9.4 8.3 0.5 0.5
Bank of Baroda 155 130 HOLD -16.2 131,872 123,065 138,532 99,146 83,457 95,489 33,979 -25,743 20,491 15.3 -11.1 8.9 2.5 1.7
Canara Bank 186 156 SELL -16.3 96,637 96,867 102,187 69,504 70,781 74,395 27,026 12,031 17,258 56.9 22.2 31.8 0.8 0.7
Corporation Bank 38 NA NOT RATED NA 40,552 44,403 48,886 30,123 34,235 38,132 5,691 -3,095 4,146 6.8 -3.1 4.2 1.2 0.8
Punjab National Bank 78 61 SELL -21.4 165,556 166,429 188,167 119,548 122,385 139,910 30,616 7,808 34,524 17.0 4.0 18.0 1.2 0.7
State Bank of India 185 225 BUY 21.7 550,153 556,926 614,137 390,061 397,534 448,287 131,016 102,681 142,028 18.0 13.0 18.0 1.5 1.4
Axis Bank 491 480 HOLD -2.2 142,241 165,932 189,459 133,854 158,319 183,507 73,578 82,908 93,834 31.0 35.0 39.0 2.4 2.1
DCB Bank 94 100 HOLD 5.9 5,082 6,195 7,284 2,774 3,382 3,576 1,912 1,696 1,720 6.8 6.0 6.1 1.7 1.5
Federal Bank 50 46 HOLD -7.9 23,804 25,042 27,679 16,278 14,238 16,347 10,058 4,757 6,467 5.9 2.8 3.8 1.2 1.2
HDFC Bank 1,141 1,315 BUY 15.3 223,957 275,915 327,675 174,045 213,636 249,158 102,159 122,962 144,333 40.8 48.6 57.1 4.0 3.5
ICICI Bank 227 272 HOLD 20.1 190,396 214,547 237,005 197,199 242,845 240,688 111,753 127,070 125,595 19.0 22.0 22.0 1.7 1.6
Karur Vysya Bank 469 494 HOLD 5.3 15,337 17,296 18,991 10,197 12,653 14,231 5,321 5,520 6,445 43.7 45.4 53.0 1.3 1.2
Lakshmi Vilas Bank 80 113 BUY 42.1 5,267 6,515 7,689 3,764 4,505 5,466 1,323 1,715 2,146 7.4 9.6 12.0 1.2 1.0
City Union Bank 97 105 BUY 8.5 8,074 9,601 10,919 7,035 8,092 9,035 3,950 4,380 5,026 6.6 7.3 8.4 2.1 1.8
Bajaj Finance 7,626 7,200 BUY -5.6 28,717 40,714 52,462 17,415 25,125 32,129 8,979 12,932 16,599 180.0 241.0 304.0 5.7 4.6
CARE+++ 997 1,650 BUY 65.5 2,572 2,710 3,037 1,621 1,758 1,931 1,416 1,200 1,311 48.4 41.4 45.2 7.4 6.8
CFL 497 468 HOLD -5.8 6,277 9,348 11,786 2,657 4,597 6,134 1,120 1,605 2,238 12.3 17.6 24.5 2.8 2.5
GIC Housing Finance 262 265 HOLD 1.2 2,220 2,675 3,067 1,660 2,015 2,283 1,537 1,820 2,067 19.1 22.4 25.7 3.8 3.5
Dew an Housing 204 260 BUY 27.5 13,798 16,763 19,492 10,480 12,575 14,404 6,213 7,334 8,463 42.6 24.7 28.6 2.4 2.2
L&T Finance Holding 73 85 HOLD 16.9 26,284 31,507 37,007 16,926 20,173 24,032 7,068 8,205 10,295 4.9 4.7 5.7 2.1 1.9
LIC Housing Finance 459 575 BUY 25.4 22,364 29,441 34,115 21,092 27,100 31,269 13,862 16,608 19,157 27.5 32..9 37.9 2.6 2.2
Note: ** Bloomberg Est; +++ Manufacturing Format; $$$ Calendar Year; ### Y/E June, && EBIT
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recommendations or views expressed in this report: Daljeet S Kohli, Amar Maurya, Abhishek Jain, Yogesh Hotwani, Kaushal Patel, Tushar Manudhane, Kamal Sahoo & Harshraj Aggarwal.
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One year Price history of the daily closing price of the securities covered in this note is available at www.nseindia.com and www.economictimes.indiatimes.com/markets/stocks/stock‐quotes. (Choose
name of company in the list browse companies and select 1 year in icon YTD in the price chart)

IndiaNivesh Securities Limited
Research Analyst SEBI Registration No. INH000000511
601 & 602, Sukh Sagar, N. S. Patkar Marg, Girgaum Chowpatty, Mumbai 400 007.
Tel: (022) 66188800 / Fax: (022) 66188899
e‐mail: research@indianivesh.in | Website: www.indianivesh.in

NiveshDaily - 16 May 2016

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10,000 ‐20,000 ‐10.00

25,000 5.00 0.00

Non‐Oil Exports (% y‐o‐y) Non‐Oil Imports (% y‐o‐y) Non‐Oil, Non‐Gold Imports (% y‐o‐y) Non‐Oil, Non‐ Gold Exports (% y‐o‐y)

Current Previous Glenmark

IndiaNivesh Securities Ltd 16 May 2016 2 of 6

IndiaNivesh Securities Ltd 16 May 2016 3 of 6

IndiaNivesh Securities Ltd 16 May 2016 4 of 6

IndiaNivesh Securities Ltd 16 May 2016 6 of 6

IndiaNivesh Securities Ltd 16 May 2016 2 of 6

IndiaNivesh Securities Ltd 16 May 2016 3 of 6

IndiaNivesh Securities Ltd 16 May 2016 4 of 6

IndiaNivesh Securities Ltd 16 May 2016 5 of 6

IndiaNivesh Securities Ltd 16 May 2016 6 of 6

Key Ratios (%) bps bps

Balance Sheet (Rs Mn) FY15 FY16E FY17E FY18E

Quick Fundamentals (Rs. Mn) Q4FY16 Q3FY16 Q4FY15 QoQ % YoY % FY16 FY15 YoY%

IndiaNivesh Securities Ltd 16 May 2016 2 of 5

IndiaNivesh Securities Ltd 16 May 2016 3 of 5

IndiaNivesh Securities Ltd 16 May 2016 4 of 5

IndiaNivesh Securities Ltd 16 May 2016 5 of 5

MSME Loans Consumer Durable Loans Two‐Wheeler Loans

STOCK PER. (%) 1m 3m 12m

Key Ratios (%) bps bps

Inform ation Technology

Oil & Gas

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