Midcap Conference

Equirus Mid-cap Conference
Key takeaways
We hosted 30 companies for our annual mid-cap conference in Mumbai, held on 24 Sep’19. Participating firms were from industries such as building
materials, capital goods, infrastructure, retail, aquaculture, media, music distribution, film production & trading, metals & mining and pharmaceuticals.
• Infrastructure: New NHAI orders seem to be struggling with land acquisition issues. However, old projects like Bharatmala are going strong. Fund
issues for NHAI have not been resolved as yet.
• Print media: The future looks bleak for the industry as government spends have come down post elections. Moreover, given the current fiscal
situation (after corporate tax rate cut), a revival looks unlikely.
• Aquaculture: Shrimp demand in the US has started improving and export realizations are also higher by c10%. Seeding for the second crop has been
good (much better than last year) and farmgate prices are also stable currently.
• Building materials: We hosted Cera and Greenlam Industries. Demand remains muted in 1HFY20 though is expected to pick up in 2HFY20. Both
companies are unlikely to do any capex and should pass on benefits of tax cuts to end consumers. The recent govt. measure for funding stalled
projects (those not under NCLT and are 60% complete) is a good move. However, more measures are required for fast-tracking real estate projects
stuck due to funding unavailability to developers, particularly in metros and tier I cities.
• Textile sector: Players are happy with the much-needed incentives announced by the government. However, demand remains a challenge. Getting
new capex (due to tax rate reduction for new units) would be difficult as there is already some excess capacity in system (for instance, many
spinning factories are running at ~50% utilization levels), which would be utilized first. Migrating to the new tax regime would be done only after
exhaustion of MAT credit in books, which would take at least 1-2 years. Current calculations favour staying in the old regime only.
• Metals: Odisha iron ore lease expiry will pose a challenge for the user Industry. Even after auctions are completed, mine planning and approval
would take at least 6-8 months; this would pose a risk to RM security of the user Industry. While permitting SAIL to sell iron ore is welcome move,
using that iron ore will have multiple challenges (including issues on quality and transportation logistics). Iron ore prices would most likely shoot up
in the coming months.
• Capital goods: Companies were not that bullish on immediate start of the capex cycle, which they believe is still 1-1.5 years away.
25 September 2019 1
Table of Contents
Company Name Slide No Company Name Slide No
Building Materials Logistics
Cera Sanitaryware 4 Allcargo Logistics Ltd 27
Greenlam Industries 5
KEI Industries 6 Media
Polycab India 7 Music Broadcast Ltd 29
Time Technoplast Ltd. 8 PEN INDIA Limited 30
Saregama India Limited 31
Capital Goods
Carborundum Universal 10 Metals & Mining
Skipper Ltd 11 Godawari Power and Ispat 34
Ratnamani Metals & Tubes 35
Consumer Discretionary
Apex Frozen Foods 13 Real Estate
The Waterbase Limited 15 NESCO 37
Consumer Durables Textiles

Blue Star 18 SP Apparels Ltd. 39
TCNS Clothing Ltd. 40
Healthcare Welspun India Ltd. 41
Ajanta Pharma Ltd. 20
Infrastructure
Antony Waste Handling Cell Limited 22
Capacité Infraprojects 23
ITD Cementation 24
KNR Constructions 25
25 September 2019 2
Building Materials
25 September 2019 3
Cera Sanitaryware Absolute: ADD, Relative: Benchmark, Mcap: Rs 35.8bn, Dec’20 TP: 2616, CMP: 2750
Management Commentary
▪ With the launch of ‘Senator by Cera’ and ‘Jeet’ brands, Cera has completed its brand pyramid. It now has exposure across the pricing chain to serve all types
of customers. The company has 350/800 SKUs in sanitaryware/faucetware.
▪ Cera has ~2,841 distributors/dealers and 11,306+ retailers, 9 Cera Style Studios (7,000 sq.ft.), 136 Cera Style Galleries (1,000 sq.ft.) and 2,700 Cera Style
centres. It plans to add another 600 Cera style galleries in the next two years. It also has 250 aftersales service staff in Cera Care. It would keep adding 4-6%
of dealers every year organically and aims to mostly add ‘Class A’ dealers (>Rs 50mn yearly turnover).
▪ Cera is seeing strong growth in tier-III cities, mainly via the ‘Cera’ brand. In 1QFY20, tier I/II/III contributed 34%/13%/53% to the topline. Region-wise,
revenue contribution South/North/West/East stood at 44%/25%/22%/9%. Kerala is the biggest market for Cera.
▪ Cera targets to maintain an 80:20 split between sanitaryware+ faucetware: tiles as tiles has lower margins and higher receivable days. The company’s overall
receivable days are 55 (41 days ex of tiles).
▪ Faucetware will be the fastest-growing segment for Cera (followed by tiles and sanitaryware) as (a) there is significant scope for market share gains in the
Rs 80bn faucetware market and (b) the segment has the second-highest margins in the company’s product portfolio. Sanitaryware market continues to face
muted demand; therefore, growth would be restricted to mid-to-high single digits.
▪ Demand is expected to pickup slightly from 2HFY20; however, better growth is expected to come from FY21 as RERA/GST-led disruption slowly fades away
with stable EBITDAM. CRS would be doing capex of Rs 560mn in FY20.
Consolidated Financials
Rs. Mn YE Mar FY19A FY20E FY21E FY22E Rs Per Share FY19A FY20E FY21E FY22E
Sales 13,515 14,813 16,661 18,947 Earnings 88.5 92.7 109.7 129.5
EBITDA 1,983 2,159 2,516 2,918 Book Value 539 615 705 811
Dividends 13.0 13.9 16.5 19.4
Depreciation 280 353 364 382
FCFF 15.0 28.6 32.2 47.4
Interest Expense 85 99 97 94
P/E (x) 31.1 29.7 25.1 21.2
Other Income 186 141 146 149 P/B (x) 5.1 4.5 3.9 3.4
Reported PAT 1,151 1,207 1,427 1,684
EV/EBITDA (x) 15.7 14.4 12.3 10.5
Recurring PAT 1,151 1,207 1,427 1,684
ROE (%) 18% 16% 17% 17%
Total Equity 7,009 7,999 9,168 10,549 Core ROIC (%) 16% 15% 16% 17%
Gross Debt 842 844 774 694 EBITDA Margin (%) 14.7% 14.6% 15.1% 15.4%
Cash 1,681 1,698 1,723 1,827 Net Margin (%) 9% 8% 9% 9%
Source: Company, Equirus Securities
25 September 2019 Analyst: Pranav.mehta@Equirus.com (+91-7574885494,+91-7961909524) 4

Greenlam Industries Absolute: LONG, Relative: Benchmark, Mcap: Rs 20.6bn, Dec’20 TP: 941, CMP: 854
▪ India’s total laminates market stands at Rs 50bn (including Rs 15bn export market). Greenlam was the largest exporter of laminates (~30% of total laminate
exports) from India. Export and domestic markets contribute 50%:50% to the company’s volumes. Domestic industry is expected to grow at 4-5% while
Greenlam will grow better than that as it continues to benefit from the unorganized to organized shift.
▪ In laminates, 2/3rd of RM is paper (design and craft) while 1/3rd is chemicals. Prices of former are stable while those of latter have corrected vs. last year,
benefitting margins. Any sharp uptick in crude prices might lead to RM inflation, else margins would remain stable.
▪ Deco veneer market was ~Rs 20bn in FY19 with organized players accounting for a ~60% share. The veneer segment is largely driven by demand from the
residential, HNI and hospitality segments. Greenlam had around 11% market share in the segment.
▪ Market size for wooden doors in India stands at ~Rs 50bn. GRLM is working to promote value-add fire rated doors to gain more traction in the market. GRLM
is operating its door business only in select states: Delhi, Bangalore, Hyderabad, Chennai and Mumbai.
▪ Revenue generation in the door segment at optimum utilisation will be ~Rs 1bn, achievable in the next 4 years. Revenue generation in floors would be
~Rs 2bn, which can be achieved over the next 4-5 years.
▪ The company is targeting 10-12% revenue growth with 12.5-13% EBITDAM over next 2 years led by growth in laminates & deco veneer. Engineered floors and
doors segment will gain traction gradually since products are taking time to be accepted by the market.
▪ Greenlam would require to do a capex in laminates every 18-24 months. Any future capacity would mostly be Greenfield as all available space for brownfield
capacity has been used up.
Sales 12,807 13,946 15,501 17,309 Earnings 32 35 40 46
Dividends 3.0 3.5 4.5 5.5
FCFF 6.6 27.4 26.7 34.0
P/E (x) 26.7 24.1 21.2 18.4
Other Income 15 88 18 20 P/B (x) 4.8 4.1 3.5 3.0
Reported PAT 771 855 973 1,119
EV/EBITDA (x) 12.4 11.2 9.7 8.6
Recurring PAT 771 855 973 1,119
ROE (%) 20% 18% 18% 18%
Gross Debt 2,707 2,671 2,510 2,280 EBITDA Margin (%) 12% 12% 13% 13%
Cash 106 289 222 225 Net Margin (%) 6% 6% 6% 6%
25 September 2019 Analyst: Pranav.mehta@Equirus.com (+91-7574885494,+91-7961909524) 5

KEI Industries Absolute: LONG, Relative: Overweight, Mcap: Rs 41bn, Jun’20 TP: 594, CMP: 516
▪ KEII continues to target 16-17% topline growth for FY20E and over the next 3 years. Currently, for growth for KEII is largely driven by sectors like Oil & Gas, Power,
Infra and energy. KEII is targeting EBIDTAM of ~11% during FY20E.
▪ Currently KEII works on EBIDTAM of 9-9.5% for institutional business with WC days of ~90 days. KEII has total orders of Rs 43bn of which Rs 20bn is EPC order book and
remaining are wires and cables.
▪ In the retail business, KEII registered revenues of Rs 14bn during FY19 and expect to report ~Rs 18bn in sales during FY20E. KEII has currently 1500 dealers and are
adding at pace of 10-12% on yearly basis. Retail business commands ~11% EBIDTAM and works of negative WC with inventory days being 10 days.
▪ In the wires segment, KEII has a total market share of 6-7% in the Rs 180-Rs 200bn market. North contributes 35% with South and West contributing to 22-25% and 25-
28% of the total sales.
▪ Currently prices of KEII products are lower by 3-7% as compared to Havells, Finolex, while same as those of Polycab.
▪ In the EHV segment, the total requirement in Indian market is Rs 20bn of which Rs 10bn is met by KEII and Universal Cables while remaining Rs 10bn are imported.
Further, DDUGJY and IPDS has led to strong growth for Cables business as well as EPC business.
▪ KEII has planned its expansion plans and do not require any major capacity additions until FY21E. KEII plans to do capex of Rs 1bn during FY20E.
Consolidated financials
Sales 42,310 49,734 57,781 66,159 Earnings 22.9 30.9 38.6 46.1
Dividends 1.2 1.5 2.0 2.5
FCFF 63.1 11.8 31.0 47.2
Interest Expense 1,356 1,296 1,305 1,284
P/E (x) 22.5 16.7 13.4 11.2
Other Income 72 136 128 140 P/B (x) 5.2 4.0 3.2 2.5
Reported PAT 1,790 2,434 3,044 3,635
EV/EBITDA (x) 10.0 8.4 7.0 5.7
Recurring PAT 1,809 2,442 3,044 3,635
ROE (%) 26% 27% 26% 25%
Gross Debt 4,583 4,651 4,196 3,286 EBITDA Margin (%) 10.4% 10.5% 10.6% 10.6%
Cash 1,953 1,850 2,705 4,310 Net Margin (%) 4.3% 4.9% 5.3% 5.5%
25 September 2019 Analyst: Manoj.gori@Equirus.com (+91-7574885496,+91-7961909523) 6

Polycab India Absolute: LONG, Relative: Overweight, Mcap: Rs 101bn, Sep’20 TP: 750, CMP: 683
▪ For Polycab India (PIL), the product mix in the W&C is 55%/45% for Cables/Wires. Also, of the total W&C sales 80% of business is generated through dealer network
while 20% is institutional sales.
▪ PIL sees huge scale of opportunity in imported W&C cables which are relatively high-margin products. The size of these imported products is ~Rs 40bn and PIL is
evaluating options to enter into newer categories. Currently, the demand environment remains challenging for W&C space. Also, in the near-term
▪ With regards to WC capital, PIL offers credit period of 60-110 days for institutional business and roughly 60 days for retail cables & wires. On the FMEG side the credit
period offered is roughly 70 days. On the other hand, payable and inventory days go hand in hand.
▪ In the FMEG business segment, PIL continues to focus on innovative products. Also, the key RM are same as W&C and hence they are able to get better rates for RM.
Also, PIL continues to maintain its strategy of focusing on in-house manufacturing.
▪ In the FMEG business, fans contribute the most to total revenues (50%). Also, PIL does not target the economy segment and the product prices are relatively higher
vs. many players like CG, Bajaj, etc. while lower than Havells. Also, they are looking for options to enter into newer product categories where competition is
relatively lower.
▪ Relationships with dealers and distributors is extremely strong for PIL. That’s a key edge for PIL vs. competitors. The largest distributor does business of Rs 4bn with
PIL.
Sales 79,560 88,441 98,636 109,071 Earnings 33.7 37.2 42.0 47.8
Dividends 3.0 4.0 5.0 6.0
Depreciation 1,414 1,647 1,877 2,132
FCFF 63.7 7.7 31.2 31.9
Interest Expense 1,167 829 805 629
P/E (x) 20.3 18.3 16.3 14.3
Other Income 933 1,019 1,173 1,393 P/B (x) 3.4 2.7 2.4 2.1
Reported PAT 4,998 5,505 6,237 7,105
EV/EBITDA (x) 11.0 9.9 8.6 7.5
Recurring PAT 5,003 5,531 6,237 7,105
ROE (%) 19% 17% 16% 16%
Cash 3,176 6,149 9,361 11,617 Net Margin (%) 6.3% 6.3% 6.3% 6.5%

Time Technoplast Ltd. Absolute: Unrated, Relative: NIL, M-Cap: 14.5bn, CMP: Rs 64
▪ Composite cylinder, composite IBC and MOX films are expected to grow at >20% while others in the range of 10-12%.
▪ The government’s ‘Nal se Jal’ scheme will be a big boost to HDPE pipes as it would replace DI pipes. The cost of HDPE pipes is ~20% cheaper than DI pipes. The
replacement by HDPE pipes will be only till 600mn diameter; above this diameter, HDPE pipes would be costlier than DI pipes.
▪ FY19 capex at Rs 2.2bn was towards capacity expansion (Rs 1.7bn) and Rs 584mn towards value-added products. Capex for FY20 will be ~Rs 2bn, of which ~Rs 200-
250mn will be towards pipes business and ~Rs 800mn will be towards maintenance.
▪ Pipes revenues stood at Rs 3.5bn in FY19 and is expected to reach Rs 4.2bn in FY20.
▪ L&T is a major customer and contributes ~60% of the total pipe order book (Rs 3.5bn).
▪ In the composite LPG cylinder segment, the company has cylinders ranging from 2kgs to 22kgs. Installed capacity stands at 1.4mn units p.a. The company sold 8 lakh
cylinders with revenues of Rs 1.8bn and EBITDAM of 20% in FY19. Revenues can scale up to Rs 2.25bn-2.3bn in FY20.
▪ For the MOX segment, installed capacity is 12,000 tons, of which available capacity is 9,000 tons. FY19 revenues from this segment stood at Rs 1.1bn and target for
FY20 is ~Rs 1.5-1.6bn with EBITDA margins at 20-22%.
Rs. Mn YE Mar FY16A FY17A FY18A FY19A Rs Per Share FY16A FY17A FY18A FY19A
Sales 24,495 27,546 31,027 35,637 Earnings 6.6 6.5 8.0 9.0
EBITDA 3,746 4,042 4,731 5,235 Book Value 55.0 58.3 65.2 73.4
Dividends 0.6 0.7 0.8 0.9
Depreciation 988 1,155 1,372 1,461
FCFF 0.6 -4.0 -1.9 -3.3
P/E (x) 9.8 9.9 8.1 7.2
Other Income 21 22 22 32 P/B (x) 1.2 1.1 1.0 0.9
Reported PAT 1,381 1,471 1,806 2,028
EV/EBITDA (x) 4.5 8.5 9.1 5.9
Recurring PAT 1,381 1,471 1,806 2,028 ROE (%) 14.9% 14.8% 15.8% 16.0%
Total Equity 11,682 13,265 14,831 16,692 Core ROIC (%) 14.9% 14.8% 15.8% 16.0%
Cash 6,402 6,781 740 666 Net Margin (%) 5.6% 5.3% 5.8% 5.7%
25 September 2019 Analyst: Maulik@equirus.com (+91-8128694110/+91-7961909519) 8

Capital Goods
25 September 2019 9
Carborundum Universal Absolute: LONG, Relative: Overweight, M Cap: Rs 6bn, Sep’20 TP: Rs 433, CMP: Rs 320
▪ In abrasives, present revenue mix is ~60% bonded abrasives and ~40% coated abrasives. Apart from Wendt business, CUMI has started producing super abrasives in the
standalone entity since the last 1.5 years (CUMI branded CBN abrasives).
▪ New coated abrasives capacity (~13mn sq. mt) will come on board in 4QFY20. Capex for the same is ~Rs 700mn (brownfield capex). Revenue opportunity would be
~Rs 3,000mn at full capacity utilization. About 1/3rd of sales from this facility would be directed towards exports (Russia, USA).
▪ The company has been able to get 1.5-2% price hikes in coated abrasives this year; however, there have not been any price hikes in bonded abrasives.
▪ Revenue break-up of industrial ceramics: Wear ceramics ~35% and technical ceramics ~65% (~50% Metz Cylinders, ~50% engineered ceramics). About 70% of industrial
ceramics are exported; among ICs, wear resistant business is a slightly lower-margin business than engineered ceramics and Metz cylinders.
▪ CUMI manufactures refractories which can withstand temperatures of >1,000 degree Celsius. Most other refractory players are focused on the steel industry whereas
CUMI’s fired products (shaped refractories) go to industries like glass, fertilizer and carbon black .
▪ SiC business of Russia is highly competitive as power is cheaper there and it has also good availability of pet coke. Capacity of the Russian plant is ~80K (current
running flat out) and the company plans to increase it ~20% by 3QFY21 (to reach ~95-100K tones post that).
▪ Product mix has worsened in Russian SiC business. It mostly goes towards refractories and metallurgical industries as of now as demand from DPF has completely gone
out. Therefore, while CUMI has been able to maintain volumes, realizations have declined.
Sales 26,889 29,423 33,477 38,086 Earnings 13.1 13.8 16.9 20.2
Dividends 2.8 2.9 4.2 5.0
Depreciation 1,083 1,200 1,302 1,405
FCFF 6.7 10.2 12.0 13.9
P/E (x) 24.4 23.2 18.9 15.9
Other Income 273 293 301 333
P/B (x) 3.5 3.2 2.8 2.5
Reported PAT 2,477 2,607 3,205 3,815
EV/EBITDA (x) 13.7 12.6 10.2 8.5
Recurring PAT 2,477 2,607 3,205 3,815
ROE (%) 15% 14% 16% 17%
Cash 1,936 2,793 3,767 4,932 Net Margin (%) 9% 9% 10% 10%
25 September 2019 Analyst: Harshit.patel@equirus.com (+91-7490012935/+91-7961909522) 10

Skipper Ltd Absolute: NA, Relative: NA, M Cap: Rs 5.6bn, CMP: Rs 54
▪ After a poor FY19, operating margins of the engineering business (~87% of revenues) are back to the normal historical range of ~13%. Operating margin gains have
been driven by stable RM prices and steps taken to reduce overhead costs.
▪ With order inflows of ~Rs 2bn in 1QFY10, the engineering business order book stands at ~Rs 24bn (83% domestic, ~17% exports). Order book break-up: PGCIL ~40%,
SEB & others ~40%, exports ~20%.
▪ The company has started enhancing focus on exports markets as it sees an opportunity of ~Rs 25bn with better margins. Exports orders accounted for >50% of order
intake in 1QFY20.
▪ Management targets to grow exports to ~40% of revenues in next 2-3 years (vs ~15% today) backed by a strong bidding pipeline of ~Rs 25bn in exports markets vs ~Rs
13bn in domestic market. The company has received international certifications from Mexico, Canada & USA, Dubai, Saudi Arabia, Nigeria, Kenya, and Philippines.
▪ China has curtailed its transmission tower manufacturing capacity by almost half as the galvanizing process is not environment-friendly. Remaining capacities are tied
up for domestic usage; therefore, Chinese EPC players are now buying materials from companies like Skipper.
▪ Focus of the polymer products business is on expanding retail reach vs being wholesale-focused till now. Skipper has ~12,000 retailer reach points as of now across 40
cities and intends to increase to ~40,000 by FY20-end. About 80% revenues would come from plumbing as it is a more margin-accretive business.
Rs. Mn YE Mar FY16A FY17A FY18A FY19A Rs Per Share FY16A FY17A FY18A FY19A
Sales 15,062 16,646 20,737 18,709 Earnings 9.3 12.1 11.5 3.0

Dividends 1.4 1.6 1.7 0.3
FCFF 1.6 14.1 8.8 16.3
Interest Expense 648 671 784 1,016
P/E (x) 5.9 4.5 4.7 17.9
Other Income 52 32 22 14
P/B (x) 1.5 1.0 0.9 0.9
Reported PAT 951 1,242 1,178 312
EV/EBITDA (x) 4.4 3.7 3.5 6.0
Recurring PAT 951 1,242 1,178 312
ROE (%) 28% 27% 20% 5%
Cash 498 249 176 109 Net Margin (%) 6% 7% 6% 2%
25 September 2019 Analyst: Harshit.patel@equirus.com (+91-7490012935/+91-7961909522) 11

Consumer Discretionary
25 September 2019 12
Apex Frozen Foods Absolute: LONG, Relative: Overweight, Mcap: Rs 7,780mn, Sep’20 TP: Rs 480, CMP: Rs 249
▪ Shrimp demand in US has started improving and realizations are also higher by c10%.
▪ Apex reported EBITDA margin of 7.2% in 1QFY20 as it executed pending orders at lower prices. Margins would return to normalcy from 2Q.
▪ New processing plant of 20,000 MTPA capacity is ready and under trial production currently.
▪ APEX has applied for licenses for its new plant and expects to receive approvals by end of October. Focus will now be more towards high-margin VAP.
▪ Management is targeting 80% capacity utilization by FY22. Going forward, capex will be ~Rs100mn for new hatchery lines while it will take only Rs 50mn-60mn to double its
value-added processing capacity ( 5000TPA).
▪ Apex’s costs include (1) cost of procuring shrimp: Rs 350-400 per kg; (2) processing costs: Rs 100-140. Operating EBITDAM would be around 0-1% while the rest would come
from export benefits.
▪ MEIS schemes were non-WTO compliant schemes. Earlier, incentives were 5% of sales and were increased to 7% last year. Extra incentive of 2% was only for last year and it
would have ended in Jun’19; however, still clarity is needed on whether entire 7% MEIS will continue till Dec’19 or only 5%.
▪ From Jan’20, MEIS schemes would get replaced by RoDTEP, which would adequately compensate the processors.
▪ Variation in gross realizations ( pricing volatility + USDINR volatility+ Incentives volatility) is directly passed on to farmgate prices. So, APEX does not foresee any impact on
margins.
Sales 8,747 11,096 13,989 16,769 Earnings 19.5 22.5 34.2 43.2
EBITDA 896 1,060 1,576 1,939 Book Value 114 133 164 202
Dividends 2.1 2.3 3.5 4.4
FCFF -23.6 4.2 -0.6 31.7
P/E (x) 12.8 11.1 7.3 5.8
Other Income 215 129 113 154 P/B (x) 2.2 1.9 1.5 1.2
Reported PAT 608 702 1,069 1,352
EV/EBITDA (x) 9.8 8.2 5.6 4.2
Recurring PAT 608 702 1,069 1,352
ROE (%) 18% 18% 23% 24%
Cash 67 106 135 906 Net Margin (%) 7.0% 6.3% 7.6% 8.1%
25 September 2019 Analyst: Depesh Kashyap (+91-7228934327; Depesh.Kashyap@Equirus.com ) 13

Apex Frozen Foods Absolute: LONG, Relative: Overweight, Mcap: Rs 7,780mn, Sep’20 TP: Rs 480, CMP: Rs 249
▪ USA is a consumption market where 95% of shrimp imported are consumed. China imports for both consumption and re-processing.
▪ Indian exporters have increased focus on China where realizations are weaker but working capital cycle is very favorable. Many Chinese importers pay in
advance.
▪ Ecuador is a main exporter to China and India has to compete with it to gain market share.
▪ Ready to Eat products fetch 1-1.5 USD higher than Ready to Cook products
▪ Shrimp Farming business model:
o Andhra Pradesh farmland lease cost : Rs 90,000-100,000 per annum per acre
o Infrastructure cost Rs 300,000-400,000 per acre
o Capital requirement for seed : Rs 50,000 to 200,000
o Shrimp survival rate: 40-80% depending on the quality of seed
o Feed cost : Rs 60-70 per kg ( Rs 80 with credit) with FCR of 1-1.5
o Other expenses include medicines, wages and power
o Total cost of production : Rs 200-250 per kg
o Realization: Rs 350-400 per kg
o The farmer can harvest 1.5-2 Ton per acre

The Waterbase Limited(TWL) Absolute : Not rated Mcap:Rs 4,120mn CMP: Rs 124
Shrimp Feed Segment: Key Focus area
▪ Currently, 90-95% revenue of TWL revenues come from the shrimp feed business, with processing and farmcare products contributing the rest.
▪ About 40% feed sales of TWL happen to big corporate dealers and the rest 60% is to medium and small dealers.
▪ Few international players have entered India in the last one year but are not doing well. TWL is targeting to improve its market share from 5-6% currently.
▪ According to management, seeding for the second crop has been good ( much better than last year) and farmgate prices are also stable currently.
▪ It is to be noted that the second crop is generally lower than the first crop; therefore, overall industry volumes may be flattish (or decline slightly) in CY19.
▪ If international and farmgate prices were to hold up at current levels, first crop of CY20 would likely be very good.
▪ Since 1QFY20, sales have been under pressure as TWL is targeting to tighten its credit policy. Receivable days came down to 72 days recently from 95 days last year.
▪ TWL has a total shrimp feed capacity of 110,000 MT, of which operating capacity is around 85,000 MT. TWL is currently operating at a capacity of 55-60%.
▪ TWL expects EBTIDAM to be stable at 12-13% in the feed segment as RM prices have been steady and there is no change in feed prices.
Rs. Mn YE Mar FY17A FY18A FY19A Rs Per Share FY17A FY18A FY19A
Sales 3,219 3,427 4,570 Earnings 2.8 7.2 6.0
EBITDA 304 576 434 Book Value 32 36 42

Dividends 1 2 2
Depreciation 55 62 68
FCFF -3.2 10.1 11.6
Interest Expense 86 44 26
P/E (x) 44.4 17.2 20.7
Other Income 16 15 6 P/B (x) 3.8 3.4 2.9
Reported PAT 116 299 232
EV/EBITDA (x) 18.6 9.2 11.5
Recurring PAT 116 299 232
ROE (%) 10% 22% 15%
Total Equity 1,245 1,496 1,623 Core ROIC (%) 10% 18% 15%
Gross Debt 592 216 216 EBITDA Margin (%) 9% 17% 9%
Cash 113 72 396 Net Margin (%) 4% 9% 5%

The Waterbase Limited(TWL) Absolute : Not rated Mcap:Rs 4,120mn CMP: Rs 124
Farmcare: Small but high-margin segment

▪ Over the last two years, TWL has ventured into high-margin farm care business where it sells minerals and probiotics used in ponds.
▪ Total market size for the farmcare business is Rs 10bn. This segment currently contributes c2% of total revenues.
▪ In the farm care business, the company mainly imports raw materials and then processes and packs them. This business doesn’t require a lot of investment
for the company.
▪ The company currently has 12 SKUs and plans to add 4 more.
▪ Competitors: Avanti Feeds ( through a non listed promoter company); Sole medicine manufacturers in Aquaculture; CP India
Shrimp processing: Non-focus area
▪ The company has a 4,000MT capacity plant and it did Rs 160-170mn of exports in FY19. It has licenses from USFDA and EU and hasn’t faced any rejections.
▪ TWL is continuing with this business as it does not want to lose export licenses.
▪ This segment is a thin-margin business (6-7% with export benefits)
Hatchery: New segment to provide backward integration
▪ Industry size for this segment is Rs 30bn. The market size consists of 80bn seeds.
▪ TWL incurred a capex of Rs 160mn in phase I to set up a 250mn seeds capacity. Another Rs 90mn capex is planned for phase 2 to set up another 250mn seed
capacity by FY21.
▪ At full capacity, the 250mn seeds facility can generate revenues of Rs 100mn. Waterbase is able to sell seeds at a premium of Rs 0.40/seed vis-à-vis industry
average of Rs 0.35/seed.
▪ The margin for the business is 18%. Full sales to come in from FY21 would be from the 250mn facility.
▪ WC requirement is less (~ Rs 10mn) as it receives cash up front. Inventory requirement is also less (Artemia, Brute Stock).
▪ Largest players in the segment include Golden Marine (4bn seed capacity); CP (7bn seed capacity); BMR; Avanti.
According to management, every segment of the value chain i.e. Hatchery, feed and processing require different expertise due to which very few players are
fully integrated.

Consumer Durables
Blue Star Ltd. Absolute: ADD, Relative: Overweight, Mcap: Rs 74bn, Sep’20 TP: 764, CMP: 771
▪ Reduction in tax rates: BLSTR is evaluating options on account of some tax benefits and MAT credit that the company enjoys currently. Accordingly, BLSTR will take
a decision.
▪ On the EMP business, BLSTR will continue to maintain its cautious approach in execution given the focus on balance sheet and liquidity concerns. However, BLSTR
remains confident of 10-12% growth during FY20E despite muted growth in 1Q. BLSTR believes that the growth triggers are extremely strong from a mid-to-long term
point of view which is likely to be driven by government spending with regards to schools, hospitals, office spaces, metros, etc. Similarly growth catalyst exists from
the private sector as well.
▪ On the RAC business, BLSTR believes that industry is likely to deliver 10-15% growth during FY20E and the company continues to remain confident of delivering above
industry growth rates.
▪ Currently BLSTR has 5,000 retail touchpoints and is targeting to increase the same by 10-12% on annual basis.
▪ BLSTR has taken initiatives on increasing the in-house manufacturing capacities for IDUs. BLSTR is targeting to manufacture 20% of the total IDU requirements in
FY20E and aiming to scale this up to 60-80% over the next couple of years. This is likely to de-risk BLSTR on account of forex volatility and custom duty changes.
▪ BLSTR remains confident on scaling up business in the water purifiers category and believes that the company remains on track with its profitability targets.
▪ In the commercial refrigeration space, the target markets and segments have increased. Also, the recent initiatives of new model launches have been well accepted
Sales 52,348 57,885 65,027 72,981 Earnings 19.5 22.3 26.6 32.4
Depreciation 749 926 1,034 1,186 Dividends 10.0 10.0 10.0 10.0
FCFF 24.2 11.9 23.9 27.1
P/E (x) 39.6 34.5 29.0 23.8
Other Income 247 379 430 494 P/B (x) 8.5 7.6 6.7 5.7
Reported PAT 1,869 2,151 2,559 3,123
EV/EBITDA (x) 22.2 20.0 16.8 14.0
Recurring PAT 1,874 2,152 2,559 3,123 ROE (%) 22% 23% 25% 26%
Cash 1,009 171 1,130 1,994 Net Margin (%) 3.6% 3.7% 3.9% 4.3%

Healthcare
Ajanta Pharma Ltd. Absolute: Long, Relative: Overweight, Mcap: 90bn , Sep’20 TP: 1,139, CMP: 1,030
▪ Branded biz momentum to continue: AJP stated multiple headwinds (decline in Melacare revenues) over last few years and recent surge in trade generics demand
has dented the growth in the domestic market. Nevertheless, company remains confident of surpassing market growth by 20-30% each year. While Asia and Africa
branded biz growth has been impacted owing to channel filling in the base year; however, company stated across all branded markets they are continuing to
outperform the market growth as per the secondary data. On a blended basis for branded generic market, they expect biz to grow at 10-11% each year.
▪ Africa institutional biz to remain soft: AJP stated it expects its institutional biz to decline by 10-15% to Rs. 1.75bn during the fiscal. Decline is mainly on the account
of higher decline in prices by 10-15% during the fiscal. It stated currently there is no visibility in revival in volumes as there are no sign of donor funding revival yet.
▪ US biz already breakeven; company level margin over next 2-3 years: AJP mentioned, it is already breakeven in the US even after factoring R&D expenditure and
it is targeting to achieve company level margin (+25%) over next 2-3 years. It will be mainly delivered by new launches in the US market. Based on its pipeline, AJP
remains confident of achieving 25% CAGR over next 3 years in the US market.
▪ 300bps Margin expansion by FY22E: Management remains confident of margin expansion and guided for 300bps increase taking it to more than 30% through FY22E.
margin expansion will be mainly led by increase in capacity utilization of recently commercialized facilities and margin accretion in US market with new launches.
▪ Nearing end of capex cycle: AJP invested Rs. 1.0bn in last 5 years on greenfield facilities viz. Dahej, Guwahati, Pithampur, of which Dahej and Guwahati’s phase-1
and 2 have been operationalized and remaining projects are expected to commercialized by 4QFY20E. AJP mentioned recent expansion will be sufficient to meet its
next 4-5 years growth expectations. From FY21E onwards, co. would be incurring only maintenance capex of Rs. 1.25bn-1.5bn.
Sales 20,554 23,197 25,879 29,214 Earnings 44.1 47.4 58.3 68.9
Dividends 9.0 9.5 11.7 13.8
Depreciation 721 912 1,092 1,227
FCFF 17.4 13.8 29.9 41.4
P/E (x) 23.3 21.7 17.7 15.0
Other Income 294 189 256 423 P/B (x) 4.0 3.5 3.1 2.6
Reported PAT 3,870 4,159 5,113 6,038
EV/EBITDA (x) 16.1 14.5 11.9 10.2
Recurring PAT 3,870 4,159 5,113 6,038
ROE (%) 18% 17% 19% 19%
Cash 1,653 1,865 3,284 5,491 Net Margin (%) 19% 18% 20% 21%
25 September 2019 Analyst: bharat.celly@equirus.com (+91-9998580991/+91-7961909524) 20

Infrastructure
Antony Waste Handling Cell Limited ( Not listed)
▪ AWHCL is one of the top-5 players in the municipal solid waste management industry.
▪ AWHCL has an established track record of 17 years in executing solid waste projects. The company primarily undertakes specialized MSW C&T projects, MSW processing
projects and mechanized sweeping projects for municipalities. It has undertaken more than 25 projects till date, of which 14 are ongoing. A strong track record has enabled
the company to bid and win large-scale projects.
▪ AWHCL was awarded the Kanjurmarg landfill project by MCGM in FY10, one of the largest single-location waste processing plants in Asia which the company is managing
successfully. It processes ~5000TPD ( 50% of Mumbai waste) at this facility through MRF/compost and BLF technologies.
▪ The company derives 55% revenue from Collection and Transport (C&T) while 45% of revenues from waste processing. About 55% of EBITDA is derived from processing while the
rest is from collection and transport.
▪ Per capita waste generation in India ranges from 200-600gms per day. Currently, around 80% of municipal solid waste generated in India is collected and transported whereas
only 25% gets processed.
▪ Traditionally in India, municipal waste management services have been controlled by relevant municipal corporations. The trend towards privatization has grown slowly since
2013; however, with the Central government’s push, more municipalities are expected to move toward privatization in the coming years. Overall, with increasing urbanization
and privatization, the MSWM market is expected to grow at a 16% CAGR over FY18-FY23.
Sales 2688 2714 2821 Earnings NA NA NA
EBITDA 573 646 732 Book Value NA NA NA
Dividends NA NA NA
FCFF NA NA NA
P/E (x) NA NA NA
Other Income 170 168 152
P/B (x) NA NA NA
EV/EBITDA (x) NA NA NA
Recurring PAT 283 304 274 ROE (%) 28.9% 24.1% 17.0%
Total Equity 1479 1856 2376 Core ROIC (%) 14.8% 13.5% 11.0%
Gross Debt 1814 1780 2053 EBITDA Margin (%) 21.3% 23.8% 26.0%
Cash 127 348 219 Net Margin (%) 10.5% 11.2% 9.7%

Capacité Infraprojects Absolute: LONG, Relative:Overweight, Mcap:Rs.14bn, Sep’20 TP:269, CMP:210
▪ CIDCO project: Capacité has won orders worth Rs 45bn for development of residential dwellings from CIDCO under PMAY scheme. The project will be
funded by the Central Govt., State Govt. and CIDCO. CIDCO already has funds worth Rs100bn in bank deposits set aside for the recently-awarded CIDCO
projects. First tranche of Rs 7bn-7.5bn from the Central Government has already come in. PMO is closely monitoring the PMAY project and hence the project
is most likely to be completed within timelines (42 months). Management does not foresee any funding issue on the project.
▪ As per management, it will get 10% interest free mobilization advances to be received in two tranches for the CIDCO project. Expected capex for the project
is Rs 1,200mn. As per the terms, 70% of funds would be released within 15 days of billing and hence, management does not expect any drastic changes in
the working capital cycle.
▪ OB is at ~Rs 70.2bn (4x TTM revenues), offering strong revenue visibility for the next 2.5-3 years. Given big-ticket sizes, CIDCO order management would be
very selective for new order inflows.
▪ On the MHADA BDD chawl project, work has started and should be completed in the next 8-9 years. The company expects substantial revenue booking from
the project in FY20-FY21.
Standalone Financials
Sales 17,876 21,174 26,680 33,672 Earnings 14.1 17.3 24.1 30.2
Dividends 1.0 1.4 1.7 0.0
Depreciation 890 1,072 1,184 1,487
FCFF -26.3 10.7 7.1 17.7
P/E (x) 15.5 12.6 9.1 7.2
Other Income 369 329 344 343
P/B (x) 1.8 1.6 1.3 1.1
Reported PAT 956 1,172 1,635 2,053
EV/EBITDA (x) 6.8 5.3 4.2 3.3
Recurring PAT 956 1,172 1,635 2,053
ROE (%) 12% 13% 16% 17%
Gross Debt 2,357 2,907 3,257 3,057 EBITDA Margin (%) 13.9% 15% 15% 15%
Cash 1,935 2,397 2,475 2,885 Net Margin (%) 5% 6% 6% 6%
25 September 2019 Analyst: Shreyans.mehta@Equirus.com (+91 9869135297,022 43320611) 23

ITD Cementation Absolute: LONG , Relative:Benchmark, Mcap:Rs.10bn, Sep’20 TP:122, CMP:56
▪ Kolkatta metro update: The incident occurred on 31 Aug’19 in the ongoing underground construction of East-West Metro Corridor of Kolkata Metro Rail
Corporation Limited (KMRCL) which is undertaken by ITD - ITD Cem Joint Venture (ITD JV). The TBM hit a pocket of a sand aquifer, resulting in ingress of
water mixed with soil mix; this mis entered the tunnel due to which TBM operation had to be stopped temporarily. Further incident resulted in development
of cracks in some buildings in this vicinity. About ~700 people have been affected. Kolkatta Metro project has no debt. Pending works are of ~ Rs 3bn. ITD
along with its JVs have furnished ~Rs 1.3bn of bank guarantees for this project. Management is currently reviewing the situation.
▪ Bangalore Metro Project: Execution is on track and the company is likely to book revenues of Rs 6bn-6.5bn in FY20 and the balance in FY21. The company
has repaid Rs100mn-150mn of loans for this project last month.
▪ Mumbai Metro work is progressing well and margins are likely to be in double digits.
▪ Management is targeting few marine/port projects and projects under sagarmala (Rs 4bn-6bn package sizes).
▪ ICRA has placed its current rating of ICRA A &/ ICRA A1 under ‘rating watch’ with developing implications mainly due to Kolkata Metro.
Sales 31,634 30,131 34,685 37,887 Earnings 3.9 5.6 7.5 8.4
EBITDA 3171 3093 3635 3996 Book Value 47.5 65.7 74.2 82.7
Dividends 0.3 0.4 0.4 0.4
FCFF -12.0 1.6 2.8 5.4
P/E (x) 18.8 12.6 9.5 8.4
Other Income 243 211 295 265
P/B (x) 1.5 1.1 1.0 0.9
Reported PAT 832 1163 1536 1555
EV/EBITDA (x) 6.1 6.6 5.8 5.3
Recurring PAT 832 1163 1,536 1,555
ROE (%) 8.1 10.8 12.8 11.5
Total Equity 10209 11289 12742 14214 Core ROIC (%) 15.9 15.2 16.2 16.0
Cash 1087 726 313 135 Net Margin (%) 2.6% 3.9% 4.4% 4.1%

KNR Constructions Absolute: LONG , Relative:Benchmark, Mcap:Rs.33bn, Sep’20 TP: 320, CMP:231
▪ NHAI awarding has come to a standstill because of land acquisition issues. However, the Bharatmala program is likely to be completed this term itself.
▪ The Kship project work is yet to start, with the expected AD likely to come in the next 3-4 months. Management is likely to take a chance and may go for
taking the AD even at 70% land acquisition status as it expects to get balance land as the project progresses.
▪ Irrigation projects: Navyuga project - It's in escrow mechanism and hence KNR has control over cashflows. Funding is yet to happen and LA challenges exist.
Megha Engg- Work is on and billing likely of Rs 1.5bn will be done next month.
▪ The company’s railways segment will target only Elevated Corridor projects and execute them through JVs.
▪ The company is likely to get favourable arbitration of Rs 0.5bn from its Odisha project whenever it is announced (bottomline addition: Rs 0.25bn- 0.3bn).
▪ The Walayar Project stake sale is at a very advance stage.
▪ Revenue guidance was at Rs 25bn (+/- 10%), capex guidance at Rs ~2bn and tax rate guidance at Rs ~15.5%.
▪ Tax rate is likely to be 18-20% in FY20 and 22-25% in FY 21. Actual cash outflow could be lower.
Standalone financials
Sales 21,373 25,015 31,101 39,487 Earnings 18.9 16.4 18.3 23.0
1,681 1,734 1,858 2,015 Dividends 0.4 0.8 0.9 1.1
Depreciation
291 415 438 483 FCFF -1.1 -1.5 2.4 8.7
Interest Expense
P/E (x) 12.3 14.2 12.7 10.1
Other Income 634 541 540 545
P/B (x) 2.3 2.0 1.7 1.5
Reported PAT 2,633 2,299 2,570 3,233
EV/EBITDA (x) 8.1 8.2 6.7 5.2
Recurring PAT 2,465 2,299 2,570 3,233
ROE (%) 21% 15% 15% 16%
Total Equity 14,143 16,304 18,719 21,757
Core ROIC (%) 24% 19% 19% 22%
Gross Debt 2,641 3,593 3,793 3,593
EBITDA Margin (%) 20% 17% 17% 17%
Cash 377 637 698 1,205 Net Margin (%) 12% 9% 8% 8%

Logistics
Allcargo Logistics Ltd Absolute : Not rated Mcap: Rs 25,775mn CMP: Rs 105
▪ Allcargo is one of the largest global players in the LCL space. Allcargo along with Vanguard and Shipco command 40% of the global LCL market.
▪ While the industry grew at 3% for the last 5 years, Allcargo grew 3 times the industry.
▪ The company’s MTO business has a ROCE of ~30% while the CFS business derives 27-28% ROCE.
▪ The P&E business took a hit in the last 2 years on account of low capex by Indian companies and slowdown in renewable energy projects. However, the business has now
bounced back with 7% EBITM from negative due to diversification of projects business in Bangladesh and other neighboring countries.
▪ The company has a land bank of 250 acres, which it now plans to convert into logistics parks.
▪ Allcargo has plans for setting up 6mn sq ft grade A warehouse in 3 years of which, 4mn sq ft is already in construction and has already signed forward contracts with
companies like Flipkart and Decathlon. FY20 will see a small amount of revenue addition from these 4mn sq ft warehouse while FY21 will see full impact
▪ The company is expected to incur Rs 9-10bn capex for the construction of 6mn sq ft. The management is also open towards monetizing these assets by selling the assets to PE
players
▪ The management provided 6-7% growth guidance in its MTO business which is significantly higher than expected market growth of 1-2%. Whereas the CFS business is set to
grow at 10% in volume terms
▪ The management believes the DPD scheme would be difficult to sustain as it has led to inventory issues for consumers and has also resulted in operational issues at ports
Sales 11,736 11,963 15,078 Earnings 4.3 3.4 8.9
EBITDA 2,593 2,096 3,530 Book Value 55 54 55
Dividends 2.0 2.0 3.5
Depreciation 984 1,017 983
FCFF 7.3 6.4 5.8
P/E (x) 24.3 30.9 11.8
Other Income 264 511 1,592 P/B (x) 1.9 2.0 1.9
Reported PAT 1,063 289 1,908
EV/EBITDA (x) 11.2 13.4 8.5
Recurring PAT 1,063 834 2,193 ROE (%) 8% 6% 16%
Gross Debt 3,404 2,454 4,225 EBITDA Margin (%) 22% 18% 23%
Cash 144 144 88 Net Margin (%) 9% 7% 15%

Media
Music Broadcast Ltd Absolute: Reduce, Relative: Benchmark, Mcap: Rs 10,232mn, Sep’20 TP: Rs 50, CMP: Rs 37
▪ After 8% revenue decline in 1QFY20, MBL may be staring at another weak quarter as advertising spends remain muted.
▪ Though local spends are better, national advertisers are not spending much. Additionally, government ad spends have fallen considerably post elections.
▪ October will be an important year in terms of festive spends; if there is no pick-up, then FY20 will be a washout year for the industry.
▪ On RBNL acquisition: MBL had earlier announced acquisition of 40 stations (of 58) of RBNL. Currently, RBNL accounts are being audited and no money has been paid yet.
▪ Total spend will be Rs 10.5bn, of which Rs 2bn will be upfront payment ( from MBL’s cash reserves), Rs 5bn will be carried as debt on balance sheet of Big FM which it would
service and additional Rs 3.5bn would need to be paid to complete the acquisitions ( for which MBL may require funding, Jagran can help).
▪ The three-year lock-in period for certain stations will get over in Mar’20, post which MBL expects the deal to complete in 1QFY21.
▪ Tier-3 market stations run at an EBITDAM of 51% as these stations are run from mother hub with only a sales team and no offices. These stations also have low license fees.
▪ Management currently expects 50% of growth to come from yield increase and 50% from increase in volumes. As new stations mature, the management expects 66% of growth
to come in from yields and the rest from volumes.
▪ Music broadcast receives 40% of revenues from long-term advertisement contracts.
▪ MBL has various DTA’s on balance sheet; so it will continue at normal tax rates till these assets are utilized.
Sales 3,247 3,337 3,661 3,955 Earnings 2.2 2.4 3.0 3.5

Dividends - 0.8 1.1 1.2
FCFF 9.3 3.5 3.4 3.8
P/E (x) 16.6 15.6 12.3 10.5
Other Income 151 103 119 172 P/B (x) 1.7 1.6 1.5 1.3
Reported PAT 616 655 831 970
EV/EBITDA (x) 7.0 7.8 6.3 5.2
Recurring PAT 616 655 831 970
ROE (%) 10% 10% 12% 13%
Gross Debt 198 264 211 153 EBITDA Margin (%) 35% 36% 38% 38%
Cash 2,505 1,046 1,746 2,545 Net Margin (%) 19% 20% 23% 25%

PEN INDIA Limited( Not listed)
We hosted Mr. Jayantilal Gada ( Chairman & MD), Mr. Dhaval Gada (Non-Executive Director) and Mr. Akshay Gada ( Non-executive director) of PEN India Limited. Mr.
Jayantilal has over 30 years of experience in the entertainment industry. In the early 1990’s when the private television channels took off in India, he became
the leading distributor for all major networks including ZEE, Sony, Sahara and Star. From 2004-16, PEN India became the exclusive agency to ZEE for acquisition of
Hindi feature films for Zee cinema. Acquired Rs 30 bn worth of Hindi movies for ZEE. From 2017-19, they have formed one of the biggest movie distribution house called
“Pen marudhar” and released movies like “Zero”, “badla”, “Dream Girl” etc.
Key takeaways from various meetings were:
▪ Producers mainly make money by selling theatrical, Satellite and digital rights of the movie and some amount of money is made by overseas collection and sale of
music rights.
▪ Currently, 4 broadcasters i.e. Zee, Sony, Colors and Star and 2 OTT platforms i.e. Netflix and Amazon prime compete for various movie rights. Cost of movie
acquisition will keep on increasing as is visible in their increased inventory levels.
▪ Demand for good content and artist will keep on increasing and so will be the value. For e.g. Satellite rights for Salman khan starrer movie Judwa were sold for Rs 40
lakhs whereas recently satellite rights for Varun Dhawan starrer Judwaa 2 were sold for Rs 800mn.
▪ Reliance “First day First Show” concept does not look feasible because every star would want his movie to get released in theatres. Actor becomes a Hero when Box
office collections are good.
▪ Reliance may create their own movies and may release it on JIO only, but no big star may become part of that movie.
▪ Concept of Virtual Print Fee(VPF) will go away eventually. Already Hollywood studios do not pay any VPF fee and rates of Tamil movies are much lower than Hindi
movies.
▪ Also, Prime Focus has also come up with a technology where these VPF charges are much lower than current rates.

Saregama India Limited Absolute : Not rated Mcap:Rs 6,450mn CMP: Rs 370
▪ Revenue split: 90% music ( 60% Carvaan + 40% Licensing), 9% Film & TV and 1% from publication segment.
Carvaan:
▪ Saregama has sold 1.5mn units of Carvaan so far and plans to sell further 5mn units over the next 3 years.
▪ The company has launched a new variant in Carvaan which streams podcasts through WIFI. The company has also signed a contract with BBC for podcasts.
▪ Saregama is set to launch a product for Karaoke with a small embedded screen as it believes there is a big untapped market.
▪ Carvaan gross margins are about 25%. Post employee and marketing cost, margins are low-single digits. The company expects margins to remain in low single digits for the
next 2 years; after that, they would improve to higher single digits.
▪ The company has stepped up advertising spends for Carvaan this year, which led to losses in 1Q. Management is confident that sales would pick up in the festive season.
▪ The company is focusing on improving sales in tier-2/3 cities by increasing marketing activities and consumer awareness.
▪ For FY20, the company expects a 33% increase in volumes with a 6% decline in realization for Carvaan due to product mix changes.
Sales 2,185 3,566 5,447 Earnings 5.0 16.4 31.1
EBITDA 94 363 382 Book Value 195 219 246

Dividends 1.5 3.0 3.0
FCFF -1.1 -9.6 -21.8
P/E (x) 74.9 22.7 12.0
Other Income 133 102 564 P/B (x) 1.9 1.7 1.5
EV/EBITDA (x) 3.2 1.5 3.1
Recurring PAT 86 285 541
ROE (%) 3% 8% 13%
Gross Debt 30 159 638 EBITDA Margin (%) 4% 10% 7%
Cash 190 108 68 Net Margin (%) 4% 8% 10%

Saregama India Limited Absolute : Not rated Mcap:Rs 6,450mn CMP: Rs 370
Music Licensing:
▪ Saregama purchases music IP for perpetuity and global usage. 66% of the cost is charged to P&L in the 1st year and rest is amortized over next 3 years.
▪ This segment is set to grow as usage of OTT has been increasing. Saregama witnessed 90% growth in listenership a year for the last three years from OTT.
▪ Two societies (PPL and IPRS) issue licenses for public use of music and Saregama earns royalty from the use of music in public. Radio companies also pay
royalty to Saregama.
▪ Saregama and T-Series are the only players who receive minimum guarantees. Saregama gets minimum guarantee and also receives revenue (average of Rs
0.1 per song) as a function of the listenership count. Minimum guarantees are signed with OTTs on a two-year contract.
▪ In FY19, 50% of music licensing revenues came from OTT.
▪ Saregama spent Rs 320mn in FY19 on music content acquisition.
Films & TV Business:
▪ Saregama retains IP of all content it generates.
▪ Saregama will produce 8 movies in FY20. Its annual target is about 12 movies.
▪ USP of Saregama is cost control. It adopts a production line model where it handles design, planning and execution. Story and movie execution is left to
directors.
▪ Saregama invests in low-budget movies (Rs 30-40mn) with no branded stars but adopts known actors.
▪ Saregama follows a de-risked business model by focusing on output deals, while assuring revenue upfront and making 20-30% EBITDAM.
▪ Saregama has produced 17-18 movies in the last two years and would also do few web series.
Open publication:
▪ Saregama incurs losses of Rs 120mn a year and this is expected to continue at these levels.

Metals & Mining
Godawari Power and Ispat Mcap: 5,435mn, CMP:154
▪ Volumes: Volumes to remain flat to trend upwards as pellet plant is running at c.90-95% utilization. Export markets have been supportive during domestic slowdown.
▪ Realisations: Realisations are expected to be in the range of Rs5,800-Rs6,000/t in 2QFY20 as pellet prices have corrected from peak of 1QFY20 on the back of fall in
iron ore prices. Pellet prices in domestic markets have corrected by Rs1,500-2,000/t yoy.
▪ Tax cuts: Tax rate for FY19 stood at 37%, while post the new announcement on tax cuts the companies effective tax rate will drop to 25.17%. The additional savings
will be used to reduce debt.
▪ Iron ore mines: Currently the company has captive iron ore mines and the lease is valid upto 2060. However, in Mar-2020 Odisha merchant mines lease will expire
and as per the management, currently there is no updates on the procedure of the auctions. The company also expects some delays in merchant mine auctions and
industry sources are expecting c.40-50mt shortage of iron ore due to this disruption. Management also highlighted the premiums in the new auctions could be as high
as 100-300% of the royalty.
▪ Outlook: Any disruption in domestic iron ore supply could lead to a surge in iron ore prices which in turn would result in higher pellet prices. Pellet prices could
increase by c.Rs1,000-1,500/t in domestic markets due to this shortage which will have a positive impact on the companies EBITDA post Mar-2020.
Rs. Mn YE Mar FY16A FY17A FY18E FY19E Rs Per Share -26.6 -21.9 72.1 76.8
Sales 19,797 18,044 25,274 31,592 Earnings 251 204 283 360
Book Value - - 0.0 0.0
EBITDA 2,086 2,889 6,160 7,837
Dividends 170.6 85.0 131.1 152.1
Depreciation 1,265 1,201 1,318 1,354
FCFF -5.8 -7.0 2.1 2.0
P/E (x) 0.6 0.8 0.54 0.43
Other Income 274 171 225 50 P/B (x) 10.3 9.2 4.0 2.7
Reported PAT -842 -748 2,459 2,619 EV/EBITDA (x) -10% -10% 30% 24%
Recurring PAT -842 -748 2,459 2,619 ROE (%) 2% 6% 17% 15%
Gross Debt 17,091 21,772 20,074 16,431 EBITDA Margin (%) -4% -4% 10% 8%
Cash 981 511 685 685 Net Margin (%) -26.6 -21.9 72.1 76.8
25 September 2019 Analyst: Siddharth.gadekar@equirus.com (+91-9820171070/+91-2243320601) 34

Ratnamani Metals & Tubes Absolute: LONG, Relative: OW, Mcap: Rs 45.6bn, Sep’20 TP: Rs 1,231, CMP: Rs 975
FY21 to see volume ramp up driven by new capacities
▪ Current order book is of Rs 20.2bn, of which Rs 5bn is from SS (Stainless Steel pipes) segment and rest from CS (carbon steel pipes)
▪ Upcoming O&G order opportunities: 1) HRRL (HPCL Rajasthan Refinery Ltd): 9mn ton capacity refinery project in Barmer. Tenders for ~80k tons water
pipes are out; refinery will also generate O&G pipeline orders of ~150k tons. Total pipeline (CS & SS) opportunity of Rs 25bn is expected from this. (2) GAIL
Angul-Srikakulam tender is out; pipeline opportunity is of 35-40k tons. (3) Kandla Gorakhpur: 2100km – opportunity of 150k tons; tender expected in 2-3
months (mainly ERW and HSAW pipes)
▪ Marathwada Water grid Project: Projects worth Rs 220-250bn will come in Marathwada through the HAM route. It is likely to generate water pipe
opportunity of 1.5mn tons over 5-6 years
▪ SS seamless expansion: New capacity of 20k tons will come by Dec’19-Jan’20, taking the total capacity to 28k. Management expects utilization of new
capacity to be around 20-30% in FY21 as it will take some time to get it approved by customers. Initially, more volumes will come from distributors, which
would entail lower margins than current margins in SS seamless.
▪ LSAW capacity expansion: Current capacity of 40k will be phased out once the new plant (of 120k tons) ramps up over the coming years. Management
expects incremental volumes of 30-40k tons from the new plant in FY21 as approval for this plant should come in six months from customers.
▪ FY20 is expected to see marginal sales growth, which will also be more back ended as it faced RM supply issues from one CS pipe suppliers.
▪ In 280k tons CS pipe volumes in FY19, there were more water orders which were high in volume but low in value. In FY20, there would be O&G orders where
tonnage would be lower, but value would be better.
▪ Titanium tubes volumes are expected to grow well in the current year due to orders from nuclear power and sea-side power projects.
Rs. Mn YE Mar FY19A FY20E FY21E FY22E Rs. Mn YE Mar FY19A FY20E FY21E FY22E
Sales 27,549 29,566 33,870 39,203 Earnings 54.1 57.8 64.0 77.4
Book Value 326 373 426 492
EBITDA 4,065 4,659 5,423 6,277
Dividends 4.5 9.0 9.0 9.0
Depreciation 624 720 1,016 1,080
Interest Expense 148 116 102 102 FCFF 43.6 -55.9 52.8 54.4
Other Income 412 246 95 228 P/E (x) 18.0 16.9 15.2 12.6
Reported PAT 2,701 2,702 2,992 3,619 P/B (x) 3.0 2.6 2.3 2.0
EV/EBITDA (x) 10.6 10.0 8.2 6.8
Recurring PAT 2,529 2,702 2,992 3,619
ROE (%) 18% 17% 16% 17%
Total Equity 15,219 17,414 19,900 23,013
Core ROIC (%) 17% 16% 16% 19%
Gross Debt 654 654 654 654
EBITDA Margin (%) 14.8% 15.8% 16.0% 16.0%
Cash 3,448 252 2,143 4,109 Net Margin (%) 9% 9% 9% 9%
25 September 2019 Analyst: Ashutosh@equirus.com (+91-8128694112/+91-7961909517) 35

Real Estate
NESCO Ltd. Absolute: LONG, Relative: Overweight, Mcap: Rs 40bn, Mar’20 TP: 583, CMP: 562
▪ NESCO will replace the IT Park 2 with Tower 2 – total built up space 2.4mn sq. ft. (2mn sq. ft. office space, 0.3mn sq. ft. hotel and 0.1mn sq. ft. for fbb and retail).
IT Park 2 would be evacuated in Dec’19 and the current clients are Intelnet and KPMG.
▪ Construction for Tower 2 is expected to start from Dec’20 and appointed international architect (ADAS) NESCO will invest ~Rs 15bn and the project is expected to be
completed by 2023-2024.
▪ IT Park 4: NESCO has signed for 52% of the total 39 units. NESCO has signed with WeWork (8 units), KPMG (7units) Here Solution (4 units) and IndiaFirst (2 units).
Under the current agreement NESCO will provide 2 months rental free with 3-year lock-in period and 15% escalation after 3 years.
▪ JLL is doing marketing for IT Park 4. Other expenses will be higher during FY20 and FY21 on account of commission to be paid to JLL for finding clients.
▪ Competition: Nirlon - has some space availability and good large customers like Deutsche, Morgan and Citi. Nirlon is building 1.2mn sq. ft. area and is nearing
completion Oberoi is setting up commerce 3 tower with 2mn sq. ft. which will be completed over next 3 years. Also, Sunteck is building large commercial in
Goregaon west. Reliance has 270,000 sq. ft. vs 600,000 for NESCO. They have not declared the prices for the same and can cater to ~20-25% of NESCO’s clients.
▪ Exhibition Business – Likely to be Rs 1.5-1.6bn of revenues in FY20E from Rs 1.4bn in FY19. No tariff would be hiked during FY20E / FY21E due to strategic reason.
▪ Food business is likely to achieve 10-15% growth in FY20E mainly from exhibitions held at NESCO. Cloud kitchen hasn’t been started. Steady EBIT margin is likely to be
in the range of 24-25%. Indabrator division is likely to deliver ~15% growth and could achieve breakeven.
Sales 3,596 4,420 6,450 7,567 Earnings 25.6 28.2 43.1 49.5
Depreciation 119 201 253 272 Dividends 2.5 4.5 5.5 6.5
FCFF 2.8 35.4 53.5 54.3
P/E (x) 21.9 19.9 13.0 11.4
Other Income 331 261 230 94 P/B (x) 3.4 3.0 2.5 2.1
Reported PAT 1,805 1,989 3,036 3,487
EV/EBITDA (x) 17.3 12.7 7.4 5.7
Recurring PAT 1,804 1,989 3,036 3,487 ROE (%) 17% 16% 21% 20%
Cash 326 4,315 7,577 10,810 Net Margin (%) 50.2% 45.0% 47.1% 46.1%

Textiles
SP Apparels Ltd. Absolute: LONG, Relative: Overweight, M-Cap: 5bn, Sep’20 TP: Rs 364, CMP: Rs 190
▪ 1QFY20 margins declined 260bps yoy to 13% owing to (1) low-margin orders execution to kick-start production in expanded factories, 2) one-off air freight costs of Rs
36mn to make up for production inefficiencies, 3) training and pre-operative costs from new factories and operators, & 4) maintenance and CSR costs of ~Rs 30mn.
▪ Two new factories at Annur and Patlur with ~700 machines capacity will commence operations by end of 2QFY20. Along with this, capacity addition at existing
factories will take the total sewing machines capacity to ~6000 machines by Mar’20. The two new factories will primarily serve Carter & H&M.
▪ Current revenue mix from clients is Primark 30%, ASDA 25%, TESCO 25% and Garron (US): 20%. The share of fashion: basics is 55:45 with realizations at ~Rs 100/piece.
▪ Company will not add any spinning capacity for next 3 years as current spinning capacity of 10 tons/day can be scaled up to 13 tons/day with minimum capex for
bottlenecking activities. ~70-80% of yarn comes from its own machines and rest is outsourced due to specialized requirements.
▪ Currently open hedges are close to 90% of the order book of Rs 2.58bn with hedge rate of 90-90.5 for pound, 80.1 for Euro and 69.8-69.9 for USD.
▪ Despite, weak margins in 1Q20, SPAL will meet its 18-20% margin guidance as there are many tailwinds for margins in the form of (a) favourable currency (b)
commissioning of new factories (c) lower cotton prices.
▪ SPAL is evaluating options for hiving off the retail business with an objective that both businesses realize their true potential and can scale up separately. If better
terms are offered, it is also open to sell of the retail business completely.
Sales 8,264 9,171 10,379 11,750 Earnings 28.6 24.5 28.4 34.3
Dividends 0.5 0.5 1.0 1.0
FCFF -1.9 8.2 19.8 18.2
P/E (x) 6.7 7.8 6.7 5.5
Other Income 34 81 0 0 P/B (x) 1.0 0.9 0.8 0.7
Reported PAT 734 629 729 882
EV/EBITDA (x) 5.2 5.4 4.3 3.5
Recurring PAT 734 629 729 882
ROE (%) 17% 12% 13% 14%
Cash 582 645 975 1,265 Net Margin (%) 8.9% 6.9% 7.0% 7.5%
25 September 2019 Analyst: Vikas.jain@equirus.com (+91-7574885492/+91-7961909531) 39

TCNS Clothing Ltd. Absolute: ADD, Relative: Overweight, M-Cap: 46bn, Sep’20 TP: Rs 807, CMP: Rs 745
▪ Green shoots visible in demand as some demand pickup visible around festivals. For instance, strong demand growth was seen across Durga Puja in South region. Eid
and Rakshabandhan festivals also resulted in some demand spike in West. While this has given a lot of positivity to retailers, consumer sentiments remained subdued.
▪ TCNS continues to follow its strategy of incubating one brand while scaling up another brand. It is currently scaling up its Aurelia brand (through high marketing
expenses & TVCs) while gradually building up its Wishful consumer-base.
▪ In next 5-7 years, TCNS will add a couple of brands to its portfolio along with categories extension to the existing brands. With the current cash balance of ~Rs 1.6bn
on books, it is actively looking to acquire a brand in womenswear or children-wear segment.
▪ TCNS differentiates itself from other retailers on three basis (a) differentiated products (b) 4 channels of sales – EBO, LFS, MBO, Others (c) brand scale up
capabilities. Of the total revenues, EBOs contribute ~40%, LFS ~40%, MBOs: 12-13% and Other (incl. e-commerce): ~7-8%.
▪ Working capital for TCNS is higher due to two reasons (a) higher inventory days at ~120 days as it as raw materials transferred to third party job workers for
processing & garmenting lies in its books and (b) prepayment of creditors from cash available in books resulting in lower creditor days.
▪ The recently completed Omni capabilities in COCO stores will enable a seamless integration of stores and warehouses while reducing the inventory pileup and
increasing the full price sales. It provides flexibility to buy, pay and pick garment online and offline simultaneously.
Sales 11,480 12,909 15,675 18,427 Earnings 20.3 17.3 23.9 30.1
Dividends 0.0 0.0 0.5 0.8
Depreciation 222 974 1,118 1,229
FCFF 11.7 5.3 14.7 19.6
P/E (x) 36.6 43.0 31.1 24.8
Other Income 75 113 141 166 P/B (x) 7.4 6.6 5.5 4.5
Reported PAT 1,314 1,118 1,546 1,942
EV/EBITDA (x) 25.0 15.1 11.1 9.2
Recurring PAT 1,314 1,118 1,546 1,942
ROE (%) 25% 17% 19% 20%
Cash 1,608 1,802 2,508 3,506 Net Margin (%) 11.4% 8.7% 9.9% 10.5%

Welspun India Ltd. Absolute: LONG, Relative: Overweight, M-Cap: 58bn, Sep’20 TP: Rs 73, CMP: Rs 53
▪ Flooring Business:
o The upcoming flooring plant in Telangana will manufacture 27mn sq. mtrs of hard & soft flooring products. Currently, soft & hard flooring is imported in India
and does not have any import duty. On the exports front, US flooring market is ~90% imports of which China has ~80% share. These Chinese imports will be
impacted by 25% duty imposition and thus companies like Welspun will benefit from the new export opportunities.
o The domestic market will be served by flooring products under Welspun brand with a price range of Rs 175-200/sq. mtr while for the US market, it will be sold
through private labels. Welspun expects to do revenues of ~Rs 1.5bn in FY20 which in a period of ~3.5 yrs i.e. by Mar’23 will be scaled up to Rs 15bn.
▪ The emerging business will continue to provide delta to grow above market rates as new channels (hospitality, hospitals) and new markets (India and UK) are growing
at a very good rate. Emerging business grew >30% yoy in 1QFY20. The company targets revenues of ~Rs 35bn from emerging business by Mar’23.
▪ Post completion of the flooring plant, capex cycle will end, and no major capex will be required. With the cashflow generated from business, WLSI plans to prepay a
significant amount of debt by Mar’20.
▪ Under the new tax regime, WLSI will benefit to the extent of ~4-10% depending upon MAT credit available in the books. It plans to move to the new tax system in
next year post exhausting its MAT credit.
Sales 65,266 73,098 83,332 95,832 Earnings 4.7 4.8 6.2 8.6

Dividends 0.3 0.5 0.8 1.0
Depreciation 4,358 4,735 5,257 5,257
FCFF 3.4 5.3 7.0 9.0
P/E (x) 11.2 11.0 8.6 6.2
Other Income 818 843 868 894
P/B (x) 1.9 1.7 1.5 1.2
Reported PAT 2,098 4,824 6,193 8,636
EV/EBITDA (x) 8.3 6.8 5.4 4.0
Recurring PAT 4,745 4,824 6,193 8,636
ROE (%) 17.6% 16.3% 18.2% 21.4%
Total Equity 27,793 31,303 36,589 44,016 Core ROIC (%) 8.9% 8.5% 10.3% 13.8%
Cash 2,728 2,071 2,226 4,090 Net Margin (%) 7.3% 6.6% 7.4% 9.0%

Equirus Securities
Satish Kumar Head of Equities satish.kumar@equirus.com 91-22-43320616
Research Analysts Sector/Industry Email Equity Sales E-mail
Abhishek Shindadkar IT Services abhishek.shindadkar@equirus.com 91-22-43320643 Girish Solanki girish.solanki@equirus.com 91-22-43320634
Ashutosh Tiwari Auto ashutosh@equirus.com 91-79-61909517 Ruchi Bhadra ruchi.bhadra@equirus.com 91-22-43320601
Bharat Celly Healthcare bharat.celly@equirus.com 91-79-61909524 Subham Sinha subham.sinha@equirus.com 91-22-43320631
Depesh Kashyap Mid-Caps depesh.kashyap@equirus.com 91-22-43320671 Viral Desai viral.desai@equirus.com 91-22-43320635
Dhaval Dama FMCG, Mid-Caps dhaval.dama@equirus.com 91-79-61909518 Vishad Turakhia vishad.turakhia@equirus.com 91-22-43320633
Harshit Patel Capital Goods harshit.patel@equirus.com 91-79-61909522 Cash Dealing Room E-mail
Manoj Gori Consumer Durables manoj.gori@equirus.com 91-79-61909523 Dharmesh Mehta dharmesh.mehta@equirus.com 91-22-43320661
Maulik Patel Oil and Gas maulik@equirus.com 91-79-61909519 Gaurav Mehta gaurav.mehta@equirus.com 91-22-43320680
Pranav Mehta Building Materials, pranav.mehta@equirus.com 91-79-61909514 Manoj Kejriwal manoj.kejriwal@equirus.com 91-22-43320663
Rohan Mandora Banking & Financial Services rohan.mandora@equirus.com 91-79-61909529 Sarit Sanyal sarit.sanyal@equirus.com 91-22-43320666
Shreyans Mehta Infrastructure shreyans.mehta@equirus.com 91-22-43320611 Shrikant Pandya shrikant.pandya@equirus.com 91-22-43320660
Siddharth Gadekar Metals, Chemicals siddharth.gadekar@equirus.com 91-22-43320670 Vikram Patil vikram.patil@equirus.com 91-22-43320677
Associates E-mail Compliance Officer E-mail
Akshay Falgunia akshay.falgunia@equirus.com 91-79-61909516 Jay Soni jay.soni@equirus.com 91-79-61909561
Dhairya Dhruv dhairya.dhruv@equirus.com 91-79-61909528 Corporate Communications E-mail
Lalit Deo lalit.deo@equirus.com 91-79-61909533 Mahdokht Bharda mahdokht.bharda@equirus.com 91-22-43320647
Narendra Mhalsekar narendra.mhalsekar@equirus.com 91-79-61909513 Quant Analyst E-mail
Nishant Bagrecha nishant.bagrecha@equirus.com 91-79-61909526 Kruti Shah kruti.shah@equirus.com 91-22-43320632
Prateeksha Malpani prateeksha.malpani@equirus.com 91-79-61909532 F&O Dealing Room E-mail
Ronak Soni Ronak.soni@equirus.com 91-79-61909525 Bhavik Shah bhavik.shah@equirus.com 91-22-43320669
Rushabh Shah rushabh.shah@equirus.com 91-79-61909520 Dhananjay Tiwari dhananjay.tiwari@equirus.com 91-22-43320668
Shreepal Doshi shreepal.doshi@equirus.com 91-79-61909541 Kunal Dand kunal.dand@equirus.com 91-22-43320678
Varun Baxi varun.baxi@equirus.com 91-79-61909527 Mukesh Jain Mukesh.jain@equirus.com 91-22-43320667
Vikas Jain vikas.jain@equirus.com 91-79-61909531
Rating & Coverage Definitions: Registered Office:
Absolute Rating
• LONG : Over the investment horizon, ATR >= Ke for companies with Free Float market cap > Rs 5 billion and Equirus Securities Private Limited
ATR >= 20% for rest of the companies Unit No. 1201, 12th Floor, C Wing, Marathon Futurex,
• ADD: ATR >= 5% but less than Ke over investment horizon
• REDUCE: ATR >= negative 10% but <5% over investment horizon N M Joshi Marg, Lower Parel,
• SHORT: ATR < negative 10% over investment horizon Mumbai-400013.
Relative Rating
• OVERWEIGHT: Likely to outperform the benchmark by at least 5% over investment horizon Tel. No: +91 – (0)22 – 4332 0600
• BENCHMARK: likely to perform in line with the benchmark Fax No: +91- (0)22 – 4332 0601
• UNDERWEIGHT: likely to under-perform the benchmark by at least 5% over investment horizon
Investment Horizon
Investment Horizon is set at a minimum 3 months to maximum 18 months with target date falling on last day of a Corporate Office:
calendar quarter. 3rd floor, House No. 9,
Lite vs. Regular Coverage vs. Spot Coverage
We aim to keep our rating and estimates updated at least once a quarter for Regular Coverage stocks. Generally, Magnet Corporate Park, Near Zydus Hospital, B/H Intas Sola Bridge,
we would have access to the company and we would maintain detailed financial model for Regular coverage S.G. Highway Ahmedabad-380054
companies. We intend to publish updates on Lite coverage stocks only an opportunistic basis and subject to our
ability to contact the management. Our rating and estimates for Lite coverage stocks may not be current. Spot Gujarat
coverage is meant for one-off coverage of a specific company and in such cases, earnings forecast and target Tel. No: +91 (0)79 - 6190 9550
price are optional. Spot coverage is meant to stimulate discussion rather than provide a research opinion.
Fax No: +91 (0)79 – 6190 9560
© 2019 Equirus Securities Private Limited. All rights reserved. For Private Circulation only. This report or any portion hereof may not be reprinted, sold or
redistributed without the written consent of Equirus Securities Private Limited
Analyst Certification
I, Satish Kumar, author to this report, hereby certify that all of the views expressed in this report accurately reflect my personal views about the subject company or companies and its or their securities. I also certify that no part
of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.
Disclosures
Equirus Securities Private Limited (ESPL) having Corporate Identification Number U65993MH2007PTC176044 is registered in India with Securities and Exchange Board of India (SEBI) as a trading member on the Capital Market (Reg.
No. INB231301731), Futures & Options Segment (Reg. No.INF231301731) of the National Stock Exchange of India Ltd. (NSE) and on Cash Segment (Reg. No.INB011301737) of Bombay Stock Exchange Limited (BSE).ESPL is also
registered with SEBI as Research Analyst under SEBI (Research Analyst) Regulations, 2014 (Reg. No. INH000001154), as a Portfolio Manager under SEBI (Portfolio Managers Regulations, 1993 (Reg. No.INP000005216) and as a
Depository Participant of the Central Depository Services (India) Limited (Reg. No.IN-DP-324-2017). There are no disciplinary actions taken by any regulatory authority against ESPL. ESPL is a subsidiary of Equirus Capital Pvt. Ltd.
(ECPL) which is registered with SEBI as Category I Merchant Banker and provides investment banking services including but not limited to merchant banking services, private equity, mergers & acquisitions and structured finance.
As ESPL and its associates are engaged in various financial services business, it might have: - (a) received compensation (except in connection with the preparation of this report) from the subject company for investment banking
or merchant banking or brokerage services in the past twelve months;(b) managed or co-managed public offering of securities for the subject company in the past twelve months; or (c) have received a mandate from the subject
company; or (d) might have other financial, business or other interests in entities including the subject company (ies) mentioned in this Report. ESPL & its associates, their directors and employees may from time to time have
positions or options in the company and buy or sell the securities of the company (ies) mentioned herein. ESPL and its associates collectively do not own (in their proprietary position) 1% or more of the equity securities of the
subject company mentioned in the report as the last day of the month preceding the publication of the research report. ESPL or its Analyst or Associates did not receive any compensation or other benefits from the companies
mentioned in the report or third party in connection with preparation of the research report. Accordingly, neither ESPL nor Research Analysts have any material conflict of interest at the time of publication of this report.
Compensation of our Research Analysts is not based on any specific merchant banking, investment banking or brokerage service transactions. ESPL has not been engaged in market making activity for the subject company.
The Research Analyst engaged in preparation of this Report:-
(a) has not received any compensation from the subject company in the past twelve months; (b) has not managed or co-managed public offering of securities for the subject company in the past twelve months; (c) has not
received any compensation for investment banking or merchant banking or brokerage services from the subject company in the past twelve months; (d) has not received any compensation for products or services other than
investment banking or merchant banking or brokerage services from the subject company in the past twelve months; (e) has not received any compensation or other benefits from the subject company or third party in connection
with the research report; (f) might have served as an officer, director or employee of the subject company; (g) is not engaged in market making activity for the subject company.
This document is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication,
availability or use would be contrary to law, regulation or which would subject ESPL and affiliates to any registration or licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for
sale in all jurisdictions or to a certain category of investors. Persons in whose possession of this document are required to inform themselves of, and to observe, such applicable restrictions. Please delete this document if you are
not authorized to view the same. By reading this document you represent and warrant that you have full authority and all rights necessary to view and read this document without subjecting ESPL and affiliates to any registration
or licensing requirement within such jurisdiction.
This document has been prepared solely for information purpose and does not constitute a solicitation to any person to buy, sell or subscribe any security. ESPL or its affiliates are not soliciting any action based on this report. The
information and opinions contained herein is from publicly available data or based on information obtained in good faith from sources believed to be reliable but ESPL provides no guarantee as to its accuracy or completeness. The
information contained herein is as on date of this report, and is subject to change or modification and any such changes could impact our interpretation of relevant information contained herein. While we would endeavour to
update the information herein on reasonable basis, ESPL and its affiliates, their directors and employees are under no obligation to update or keep the information current. Also there may be regulatory, compliance, or other
reasons that may prevent ESPL and its group companies from doing so. This document is prepared for assistance only and is not intended to be and must not alone be taken as the basis for an investment decision. Each recipient of
this document should make such investigations as it deems necessary to arrive at an independent evaluation of an investment in the securities of companies referred to in this document including the merits and risks involved. This
document is intended for general circulation and does not take into account the specific investment objectives, financial situation or particular needs of any particular person. ESPL and its group companies, employees, directors
and agents accept no liability, and disclaim all responsibility, for the consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.
ESPL/its affiliates do and seek to do business with companies covered in its research report. Thus, investors should be aware that the firm may have conflict of interest.
A graph of daily closing prices of securities is available at http://www.nseindia.com/ChartApp/install/charts/mainpage.jsp and www.bseindia.com (Choose a company from the list on the browser and select the “three years”
period in the price chart).
Disclosure of Interest statement for the subject Company Yes/No If Yes, nature of such interest
Research Analyst’ or Relatives’ financial interest No
Research Analyst’ or Relatives’ actual/beneficial ownership of 1% or more No
Research Analyst’ or Relatives’ material conflict of interest No
Disclaimer for U.S. Persons
Equirus Securities Private Limited (ESPL) is not a registered broker - dealer under the U.S. Securities Exchange Act of 1934, as amended (the"1934 act") and under applicable state laws in the United States. In addition ESPL is not a
registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the "Advisers Act" and together with the 1934 Act, the "Acts), and under applicable state laws in the United States. Accordingly, in the
absence of specific exemption under the Acts, any brokerage and investment services provided by ESPL, including the products and services described herein are not available to or intended for U.S. persons. This report is
intended for distribution only to "Major Institutional Investors" as defined by Rule 15a-6(b)(4) of the Exchange Act and interpretations thereof by SEC (henceforth referred to as "major institutional investors"). This document must
not be acted on or relied on by persons who are not major institutional investors. Any investment or investment activity to which this document relates is only available to major institutional investors and will be engaged in only
with major institutional investors. In reliance on the exemption from registration provided by Rule 15a-6 of the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act") and interpretations thereof by the U.S.
Securities and Exchange Commission ("SEC") in order to conduct business with Institutional Investors based in the U.S., ESPL has entered into a chaperoning agreement with a U.S. registered broker-dealer name called Xtellus
Capital Partners, Inc, (''XTELLUS'). Any business interaction pursuant to this report will have to be executed within the provisions of this chaperoning agreement.
"U.S. Persons" are generally defined as a natural person, residing in the United States or any entity organized or incorporated under the laws of the United States. US Citizens living abroad may also be deemed "US Persons" under
certain rules.
The Research Analysts contributing to the report may not be registered /qualified as research analyst with FINRA. Such research analyst may not be associated persons of the U.S. registered broker-dealer, XTELLUS, and therefore,
may not be subject to NASD rule 2711 and NYSE Rule 472 restrictions on communication with a subject company, public appearances and trading securities held by a research analyst account.

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Consumer Durables Textiles

25 September 2019 Analyst: Pranav.mehta@Equirus.com (+91-7574885494,+91-7961909524) 4

25 September 2019 Analyst: Pranav.mehta@Equirus.com (+91-7574885494,+91-7961909524) 5

25 September 2019 Analyst: Manoj.gori@Equirus.com (+91-7574885496,+91-7961909523) 6

25 September 2019 Analyst: Manoj.gori@Equirus.com (+91-7574885496,+91-7961909523) 7

25 September 2019 Analyst: Maulik@equirus.com (+91-8128694110/+91-7961909519) 8

25 September 2019 Analyst: Harshit.patel@equirus.com (+91-7490012935/+91-7961909522) 10

EBITDA 2,271 2,722 3,025 1,811 Book Value 37 52 62 63

25 September 2019 Analyst: Harshit.patel@equirus.com (+91-7490012935/+91-7961909522) 11

25 September 2019 Analyst: Depesh Kashyap (+91-7228934327; Depesh.Kashyap@Equirus.com ) 13

25 September 2019 Analyst: Depesh Kashyap (+91-7228934327; Depesh.Kashyap@Equirus.com ) 14

Shrimp Feed Segment: Key Focus area

EBITDA 304 576 434 Book Value 32 36 42

25 September 2019 Analyst: Depesh Kashyap (+91-7228934327; Depesh.Kashyap@Equirus.com ) 15

Farmcare: Small but high-margin segment

25 September 2019 Analyst: Depesh Kashyap (+91-7228934327; Depesh.Kashyap@Equirus.com ) 16

25 September 2019 Analyst: Manoj.gori@Equirus.com (+91-7574885496,+91-7961909523) 18

25 September 2019 Analyst: bharat.celly@equirus.com (+91-9998580991/+91-7961909524) 20

25 September 2019 Analyst: Depesh Kashyap (+91-7228934327; Depesh.Kashyap@Equirus.com ) 22

25 September 2019 Analyst: Shreyans.mehta@Equirus.com (+91 9869135297,022 43320611) 23

25 September 2019 Analyst: Shreyans.mehta@Equirus.com (+91 9869135297,022 43320611) 24

25 September 2019 Analyst: Shreyans.mehta@Equirus.com (+91 9869135297,022 43320611) 25

25 September 2019 Analyst: Depesh Kashyap (+91-7228934327; Depesh.Kashyap@Equirus.com ) 27

▪ Music broadcast receives 40% of revenues from long-term advertisement contracts.

EBITDA 1,132 1,209 1,378 1,513 Book Value 22 23 25 28

25 September 2019 Analyst: Depesh Kashyap (+91-7228934327; Depesh.Kashyap@Equirus.com ) 29

25 September 2019 Analyst: Depesh Kashyap (+91-7228934327; Depesh.Kashyap@Equirus.com ) 30

EBITDA 94 363 382 Book Value 195 219 246

25 September 2019 Analyst: Depesh Kashyap (+91-7228934327; Depesh.Kashyap@Equirus.com ) 31

25 September 2019 Analyst: Depesh Kashyap (+91-7228934327; Depesh.Kashyap@Equirus.com ) 32

25 September 2019 Analyst: Siddharth.gadekar@equirus.com (+91-9820171070/+91-2243320601) 34

FY21 to see volume ramp up driven by new capacities

25 September 2019 Analyst: Ashutosh@equirus.com (+91-8128694112/+91-7961909517) 35

25 September 2019 Analyst: Manoj.gori@Equirus.com (+91-7574885496,+91-7961909523) 37

25 September 2019 Analyst: Vikas.jain@equirus.com (+91-7574885492/+91-7961909531) 39

25 September 2019 Analyst: Vikas.jain@equirus.com (+91-7574885492/+91-7961909531) 40

EBITDA 10,649 12,532 14,786 18,251 Book Value 28 31 36 44

25 September 2019 Analyst: Vikas.jain@equirus.com (+91-7574885492/+91-7961909531) 41

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