ValueGuide March2020-202003121521401591544 PDF

ValueGuide
March 2020
Contagion Crisis
Intelligent Investing Regular Features Products & Services Trader’s Edge
Stock Idea Report Card PMS Technical View

Stock Updates Earnings Guide MF Picks Currencies
Viewpoints Advisory F&O Insights
Sector Updates
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CONTENTS
From the Editor’s Desk ValueGuide

March 2020
EQUITY
Stock markets in India and FUNDAMENTALS
the world over are in a tizzy Contagion Crisis Stock Idea 07 REGULAR FEATURES
as the Coronavirus outbreak Stock Update 09 Report Card 04
tightens its grip day by day. Sector Update 36 Earnings Guide 51
Unfortunately, the outbreak
has come at a time when major
global economies have already Intelligent Investing Regular Features Products & Services Trader’s Edge TECHNICALS DERIVATIVES
Stock Idea Report Card PMS Technical View
Nifty 40 View 41
Stock Updates Earnings Guide MF Picks Currencies
Viewpoints Advisory F&O Insights
Sector Updates
been slowing down due to US-China trade tariff war and

other geopolitical issues hurting business sentiments.... For Private Circulation only www.sharekhan.com
06
ADVISORY DESK DERIVATIVES
MID Trades 46 Derivatives Ideas 46
PMS DESK
ProPrime - Prime Picks 44
ProPrime - Diversified Equity 45 CURRENCY
FUNDAMENTALS
USD-INR 42 GBP-INR 42
EUR-INR 42 JPY-INR 42
TECHNICALS
MUTUAL FUND DESK 47
USD-INR 43 GBP-INR 43
EUR-INR 43 JPY-INR 43
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June
March2017
2020 3 Sharekhan ValueGuide
REPORT CARD EQUITY FUNDAMENTALS
STOCK IDEAS STANDING (AS ON MARCH 04, 2020)

CURRENT PRICE AS ON PRICE 52 WEEK ABSOLUTE PERFORMANCE RELATIVE TO SENSEX
COMPANY
RECO 04-MAR-2020 TARGET HIGH LOW 1M 3M 6M 12M 1M 3M 6M 12M
Automobiles
Apollo Tyres Buy 140 200 236 125 -16.3 -20.5 -21.1 -35.8 -8.1 -14.6 -22.6 -38.1
Ashok Leyland Hold 72 90 98 57 -12.0 -6.9 11.4 -18.2 -3.4 0.1 9.4 -21.1
Bajaj Auto Buy 2712 3670 3315 2400 -9.3 -10.9 0.6 -0.3 -0.4 -4.2 -1.2 -3.8
Hero MotoCorp Hold 2046 2750 3023 1916 -13.1 -11.3 -21.2 -23.3 -4.5 -4.6 -22.6 -26.0
M&M Buy 475 665 704 441 -18.8 -7.7 -11.0 -27.5 -10.8 -0.7 -12.7 -30.1
Maruti Suzuki Hold 6384 7500 7759 5446 -8.2 -6.4 4.2 -7.4 0.8 0.6 2.3 -10.7
TVS Motor Hold 410 485 525 338 -12.2 -6.3 9.1 -15.0 -3.6 0.7 7.1 -18.0
BSE Auto Index 15644 20412 14662 -14.3 -10.5 -1.8 -18.5 -5.9 -3.7 -3.6 -21.4
Banks & Finance
Axis Bank Buy 682 882 828 615 -10.8 -8.4 -2.0 -8.6 -2.0 -1.5 -3.8 -11.9
Bajaj Finance Buy 4286 5000 4923 2745 -9.2 7.2 25.6 53.3 -0.3 15.2 23.3 47.8
Bajaj Finserv Buy 8800 11000 10297 6581 -10.5 -2.8 20.0 30.3 -1.7 4.5 17.8 25.6
Bank of Baroda Hold 73 105 144 69 -21.7 -26.1 -24.0 -36.0 -14.0 -20.5 -25.4 -38.3
Bank of India Hold 48 70 108 40 -30.0 -33.5 -28.6 -49.3 -23.1 -28.5 -29.9 -51.2
Federal Bank Buy 83 110 110 70 -13.5 -4.9 -3.7 -7.0 -5.0 2.3 -5.5 -10.3
HDFC Buy 2206 2800 2500 1884 -13.4 -6.9 3.3 12.9 -4.9 0.1 1.5 8.9
HDFC Bank Buy 1149 1510 1306 1059 -8.5 -8.9 1.1 8.8 0.5 -2.1 -0.8 4.9
ICICI Bank Buy 508 630 552 370 -10.2 -7.3 24.3 31.1 -1.4 -0.4 22.0 26.4
LIC Housing Finance Hold 321 460 587 282 -30.9 -29.1 -24.2 -37.3 -24.1 -23.7 -25.6 -39.6
Max Financial Buy 591 ** 612 370 8.4 0.7 28.3 27.6 19.0 8.3 26.0 23.0
Punjab National Bank Hold 44 65 100 39 -27.8 -29.7 -30.9 -48.6 -20.7 -24.4 -32.2 -50.5
SBI Buy 285 415 374 244 -16.0 -15.5 -1.3 -2.7 -7.7 -9.1 -3.0 -6.2
Union Bank of India Reduce 36 ** 100 34 -25.1 -33.2 -33.4 -53.7 -17.7 -28.2 -34.6 -55.4
BSE Bank Index 32939 37193 29858 -10.7 -10.5 4.4 3.6 -1.9 -3.8 2.5 -0.1
Consumer goods
Britannia Buy 3063 3670 3584 2300 -5.3 0.4 15.5 2.4 4.1 7.9 13.4 -1.3
Emami Hold 250 352 416 226 -20.7 -24.4 -17.9 -38.6 -12.9 -18.8 -19.4 -40.8
GSK Consumer Hold 9502 9950 9935 6856 3.4 8.7 21.3 36.5 13.5 16.8 19.1 31.6
Godrej Consumer Products Buy 632 865 772 556 -2.0 -3.6 7.2 -8.4 7.6 3.6 5.3 -11.7
Hindustan Unilever Buy 2176 2575 2308 1650 1.5 8.0 20.9 30.4 11.5 16.2 18.8 25.7
ITC Hold 188 242 310 175 -14.9 -25.3 -25.5 -35.2 -6.5 -19.7 -26.8 -37.5
Jyothy Laboratories Hold 123 175 200 119 -12.6 -23.5 -13.1 -32.6 -4.0 -17.8 -14.7 -35.0
Marico Buy 295 395 404 262 -7.6 -16.3 -24.8 -14.6 1.4 -10.0 -26.1 -17.7
Zydus Wellness Hold 1452 1575 1860 1212 -2.2 0.5 -14.3 14.3 7.4 8.1 -15.9 10.2
BSE FMCG Index 10920 12378 10388 -6.6 -6.5 -0.5 -4.9 2.5 0.5 -2.3 -8.3
IT / IT services
HCL Technologies# Buy 563 670 624 497 -5.6 1.4 3.4 9.5 3.7 9.0 1.6 5.6
Infosys Buy 759 820 847 615 -4.2 3.3 -11.0 3.6 5.2 11.1 -12.6 -0.2
Persistent Systems Buy 705 805 740 469 -1.0 2.5 24.2 6.2 8.7 10.2 21.9 2.4
Tata Consultancy Services Hold 2083 2300 2286 1887 -0.6 -0.1 -1.3 9.6 9.2 7.4 -3.1 5.7
Wipro Hold 229 285 302 213 -8.2 -6.9 -10.9 -19.1 0.8 0.1 -12.5 -22.0
BSE IT Index 15537 16587 14183 -3.8 1.6 -4.6 2.7 5.6 9.3 -6.3 -1.0
Capital goods / Power
CESC Buy 610 860 855 578 -15.5 -15.9 -22.3 -14.3 -7.2 -9.5 -23.7 -17.4
Finolex Cable Hold 324 410 508 300 -20.0 -10.6 -14.5 -25.6 -12.1 -3.9 -16.0 -28.3
Greaves Cotton Hold 130 155 157 112 -10.9 -3.6 -2.6 -4.3 -2.2 3.6 -4.4 -7.7
Kalpataru Power Transmission Buy 329 545 555 286 -27.1 -25.1 -26.7 -17.4 -20.0 -19.5 -28.0 -20.4
KEC International Buy 315 415 359 230 -6.0 20.3 33.3 18.8 3.2 29.4 30.9 14.5
Thermax Hold 900 1195 1181 833 -17.4 -11.5 -13.4 -11.9 -9.3 -4.9 -15.0 -15.1
March 2020 4 Sharekhan ValueGuide

EQUITY FUNDAMENTALS REPORT CARD
STOCK IDEAS STANDING (AS ON MARCH 04, 2020)
CURRENT PRICE AS ON PRICE 52 WEEK ABSOLUTE PERFORMANCE RELATIVE TO SENSEX
COMPANY
RECO 04-MAR-2020 TARGET HIGH LOW 1M 3M 6M 12M 1M 3M 6M 12M
Triveni Turbine Hold 94 112 123 81 -5.5 -6.3 -8.1 -19.9 3.8 0.7 -9.8 -22.8
V-Guard Industries Buy 203 270 260 192 -7.0 -11.9 -10.1 -8.5 2.1 -5.3 -11.7 -11.8
BSE Power Index 1768 2159 1618 -9.6 -7.3 -10.0 -7.2 -0.7 -0.3 -11.6 -10.6
BSE Capital Goods Index 15392 20387 14249 -11.8 -10.0 -10.3 -12.6 -3.1 -3.2 -11.9 -15.8
Infrastructure / Real estate
Larsen & Toubro Buy 1177 1614 1607 1068 -12.0 -10.2 -12.8 -10.9 -3.4 -3.5 -14.3 -14.1
Sadbhav Engineering Buy 65 120 274 52 -50.1 -51.7 -59.6 -74.4 -45.2 -48.1 -60.3 -75.3
CNX Infra Index 3025 3453 2755 -11.0 -8.8 -2.2 -0.3 -2.2 -1.9 -4.0 -3.9
BSE Real estate Index 2133 2565 1824 -17.5 -5.6 5.2 11.9 -9.3 1.5 3.3 7.8
Oil & gas
Oil India Ltd Buy 110 165 190 89 -19.1 -30.0 -28.1 -39.5 -11.1 -24.7 -29.4 -41.7
Petronet LNG Buy 245 345 296 215 -13.8 -12.3 -9.3 7.4 -5.3 -5.7 -10.9 3.6
Reliance Ind Buy 1340 1850 1618 1095 -12.8 -18.3 4.0 1.0 -4.3 -12.1 2.1 -2.6
BSE Oil and gas Index 12653 15930 11517 -14.4 -16.0 -7.9 -13.5 -6.0 -9.7 -9.6 -16.6
Pharmaceuticals
Aurobindo Pharma Hold 521 600 838 389 0.3 14.9 -17.1 -30.0 10.2 23.5 -18.6 -32.5
Cadila Healthcare Hold 256 300 353 206 -2.6 4.2 11.4 -18.2 7.0 12.1 9.4 -21.2
Cipla Buy 448 540 586 390 -1.2 -4.6 -8.5 -20.2 8.5 2.5 -10.2 -23.1
Divi's Labs Buy 2175 2430 2258 1466 11.6 26.5 37.8 33.7 22.5 36.0 35.3 28.9
IPCA Lab Buy 1429 1590 1541 844 16.9 32.9 55.0 66.6 28.3 42.8 52.2 60.6
Lupin Reduce 664 650 884 621 -8.1 -12.9 -14.2 -15.4 0.9 -6.4 -15.7 -18.4
Sun Pharmaceutical Industries Hold 405 470 484 345 -6.2 -5.8 -5.0 -11.7 3.0 1.3 -6.7 -14.9
Torrent Pharma Hold 2183 ** 2287 1452 9.7 18.6 26.3 22.3 20.5 27.5 24.0 17.9
BSE Health Care Index 14080 14664 11874 -0.4 4.9 8.2 -0.2 9.4 12.8 6.2 -3.8
Building materials
Grasim Hold 690 830 960 625 -17.0 -13.4 -5.5 -18.1 -8.8 -6.9 -7.2 -21.1
Shree Cement Buy 23256 26000 25313 17194 -7.2 14.3 29.9 33.1 1.9 22.9 27.6 28.3
The Ramco Cements Buy 750 875 884 684 -8.5 -7.1 3.2 0.9 0.5 -0.1 1.3 -2.7
UltraTech Cement Buy 4173 5200 4905 3791 -6.7 0.2 6.7 5.0 2.5 7.8 4.7 1.2
Discretionary consumption
Arvind* Buy 37 66 97 33 -14.2 -7.7 -30.2 -57.2 -5.8 -0.8 -31.5 -58.7
Century Plyboards (India) Hold 155 185 222 112 -10.2 -7.3 15.0 -17.1 -1.4 -0.3 12.9 -20.1
Info Edge (India) Hold 2654 2700 3130 1774 -13.7 8.5 29.2 53.3 -5.2 16.6 26.8 47.7
Inox Leisure Buy 381 575 512 249 -10.8 1.0 30.7 26.7 -2.0 8.6 28.3 22.2
Relaxo Footwear # Buy 692 845 830 367 -4.9 16.7 45.7 87.6 4.4 25.5 43.0 80.9
Titan Company Limited Buy 1251 1500 1390 998 -1.3 6.0 16.3 18.2 8.4 14.0 14.2 14.0
Wonderla Holidays Hold 202 270 323 195 -15.7 -16.6 -15.4 -26.7 -7.4 -10.3 -17.0 -29.3
Diversified / Miscellaneous
Bajaj Holdings Buy 3324 4654 3950 2850 -15.6 -6.4 -3.4 0.1 -7.3 0.7 -5.1 -3.5
Bharat Electronics Buy 75 130 122 68 -16.5 -29.2 -33.4 -18.5 -8.3 -23.9 -34.6 -21.4
Bharti Airtel Buy 517 610 569 283 -5.1 16.7 48.6 82.7 4.3 25.5 46.0 76.2
Gateway Distriparks Buy 125 150 154 81 -3.0 27.7 17.6 2.5 6.5 37.3 15.5 -1.2
PI Industries Buy 1576 1750 1629 982 2.0 5.6 30.7 63.9 12.1 13.5 28.3 58.0
Ratnamani Metals and Tubes Buy 1327 1450 1390 830 -0.4 29.0 41.4 47.1 9.4 38.7 38.9 41.8
Supreme Industries Limited Buy 1236 1500 1414 946 -9.0 11.1 13.4 15.3 -0.1 19.5 11.4 11.2
UPL Buy 512 647 709 491 -4.3 -8.6 -9.6 -11.5 5.1 -1.7 -11.2 -14.7
BSE500 Index 14676 16158 13502 -9.4 -6.2 1.9 -0.6 -0.5 0.8 0.1 -4.2
CNX500 Index 9258 10175 8521 -9.3 -6.1 2.0 -0.6 -0.4 1.0 0.1 -4.1
CNXMCAP Index 16746 18496 14976 -9.9 -1.7 5.5 -4.8 -1.0 5.7 3.6 -8.2
* Reco price adjusted for demerger ** Price under review # Reco price adjusted for bonus

From the Editor’s Desk
From the Editor’s Desk Contagion crisis
Stock markets in India and the world over are in a tizzy as the Coronavirus outbreak tightens its
grip day by day. Unfortunately, the outbreak has come at a time when major global economies
have already been slowing down due to US-China trade tariff war and other geopolitical issues
hurting business sentiments. To top it all, the friction between oil producing giants Saudi Arabia
and Russia threaten to bring in additional disruptions in the global economy.
After a seeming recovery seen post the Union Budget 2020, the benchmark indices had a
free-fall, with the Sensex alone losing nearly 1,500 points on the last day of February alone. The
selling pressure has spilled over to March as well.
Indian markets aren’t falling alone. The global environment has turned quite volatile given the
rising risk of a global economic slowdown. The cumulative impact of the Coronavirus and the
subsequent disruption has wiping off almost $8-10 trillion in investor wealth within a period of
few weeks.
In India, the situation is additionally worrisome. The contagion of financial duress threatens to
spread across the Indian financial system. Post the IL&FS meltdown and PMC Bank fiasco, the
banking regulator has stepped in to save one of the large private sector banks from going bust.
However, there is always an opportunity in adversity. In the past, it has been seen that such global
outbreaks have been controlled in a few months and the correction was a great opportunity to
invest.
Particularly in the case of Coronavirus, the general sense from experts is that the spread will
get controlled with the onset of summer as the virus is quite sensitive to heat (does not survive
beyond temperature of 26-28%). Moreover, the death rate is very low in case of Coronavirus at
0.4-0.5% for people below age of 60 years. This is marginally higher than deaths from common
flu in Europe every year.
From an economic perspective, the outbreak of Coronavirus has brought down crude oil prices
by 30% in the last couple of months, which is a huge positive for Indian economy in terms of
fiscal deficit and inflationary pressures. Moreover, central banks across the major regions have
cut interest rates and looking at infusing more cash to support their economy.
From an investor’s perspective, it is important to note that it is not practically possible to catch the
bottom or time the market. Past experience shows that buying after an over 12-15% correction
does give handsome returns over the next 6 to 12 months. Thus, the idea should be to focus on
quality stocks that have corrected by over 15% in a short timeframe and offer a good entry price
point to investors.

EQUITY FUNDAMENTALS STOCK IDEA
Recommendation Reco Price Price Target/ Upside (%)

Date Company Report Type
Latest Chg (Rs.) Latest Chg
Feb 06, 2020 Aditya Birla Fashion and Retail Limited New Idea POSITIVE - 254 22-25% -
Summary
• Aditya Birla Fashion and Retail Limited (ABFRL) is one of India’s largest fashion and retail companies with a footprint of 8.1 million
square feet.
• Change in positioning of Pantaloon as fast fashion brand helped company clock strong recovery in the performance, with
revenues growing by 14% over FY2016-19 and OPM improving to 7.2% in FY2019 from 4.8% in FY2016.
• Despite the ongoing slowdown in discretionary spends, ABFRL has posted consistent performance with revenues growing by
~12% and OPM improving by 65 bps in 9MFY2020.
• The stock is trading at a discounted valuation of ~42.8x, lower than its close peers. We re-initiate a viewpoint on the stock and
expect a 20-25% upside from current levels in the next 12 months.
Read report - https://www.sharekhan.com/MediaGalary/Equity/ABRL-Feb06_2020.pdf
Feb 14, 2020 Mayur Uniquoters New Idea POSITIVE - 227 28-30% -
Summary
• We initiate viewpoint coverage on Mayur Uniquoters Ltd (MUL) with a positive view and expect 28-30% upside from current
levels.
• India’s largest manufacturer of synthetic leather, Mayur Uniquoters Limited (MUL) is poised to enter into the high-growth
trajectory.
• Addition of new clients in auto segment and foray into PU (polyurethane) segment to be the key growth drivers. We expect a
robust 13% topline CAGR over FY2020-FY2022.
• MUL has strong return ratios (> 20%) with cash at 20% of marketcap. MUL would generate strong free cash flows of Rs 200 cr
over next three years and is available at attractive P/E of 11.4x FY2021 and 9.5x its FY2022 earnings.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Mayur_Uniquoters_NewIdea-Feb14_2020.pdf
Feb 18, 2020 Triveni Engineering Industries New Idea POSITIVE - 79 25-28% -
Summary
• The expected decline in domestic sugar production by ~20% in SY2019-SY2020 and lower production in key international
markets would keep domestic sugar prices in surge in FY2020-FY2021.
• Triveni Engineering Limited (TEL) is the largest integrated sugar manufacturing company in India. With a capacity of 61,000 TCD,
the company will be one of the key beneficiaries of lower sugar inventory and high sugar prices.
• Debt is expected to come down by Rs. 800 crore-850 crore over FY2019-FY2021 mainly on account of improving cash flows,
driven by lowering of sugar inventory and better profitability.
• We initiate viewpoint on TEL with a Positive view and potential upside of 25-28% from the current level.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Triveni_Engg_NewIdea-Feb19_2020.pdf
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Note: The arrow indicates change in call and price target, if any, vis-à-vis the previous report

STOCK IDEA EQUITY FUNDAMENTALS

Feb 20, 2020 Asian Oilfield Services Limited New Idea POSITIVE - 137 28-30% -
Summary
• We initiate viewpoint coverage on Asian Oilfield Services Limited (AOSL) with a Positive view and expect 28-30% upside
potential.
• AOSL’s strong order book of ~Rs. 997 crore (domestic seismic survey at Rs. 580 crore, O&M at Rs. 210 crore and overseas
oil and gas facilities order at Rs. 207 crore) provides strong earnings growth visibility (expect 33% PAT CAGR over FY2020E-
FY2022E).
• The change of management control to new promoter (Oilmax Energy) in FY2017 has transformed AOSL with net cash of Rs52
crore as on December 2019 vs. net debt of Rs46 crore as on March 2017 and increase in net worth to Rs. 163 crore as on
December 2019 vs. only Rs. 10 crore as on March 2016.
• Open acreage licensing policy provides seismic opportunities worth Rs. 1,500 crore from the oil and gas space. Moreover,
privatisation of the coal sector would bring new opportunities worth Rs. 1,500 crore for seismic surveys.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Asian_Oilfield_NewIdea-Feb20_2020.pdf
Sharekhan Limited, its analyst or dependant(s) of the analyst might be holding or having a position in the companies mentioned in the article.

EQUITY FUNDAMENTALS Stock Update
Feb 01, 2020 ITC Stock Update HOLD  219 242 
Summary
• Tax rate on cigarette increased by 6-12% depending on the size of the cigarettes; Weight average tax rate increase for ITC
stands at 9%.
• Cigarette sales volume growth continued to remain muted at 2% in Q3FY2020; price increase of ~10% would put further stress
on cigarettes sales volume in the near term.
• We have reduced our earnings estimates to factor in lower-than-earlier expected cigarette sales volume for FY2021 and
FY2022.
• We have downgraded our rating on the stock to Hold with a revised price target of Rs. 242.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/ITC-Feb01_2020.pdf
Feb 03, 2020 Relaxo Footwears Stock Update BUY  721 845 
Summary
• Revenue grew by ~9% y-o-y, led by premiumisation, a favourable product mix and good growth across the brand portfolio.
• Benign input costs and a better product mix drove up gross margins by 504 bps, while comparable OPM rose by ~180 bps to
15%, owing to operating efficiencies; effect of Ind AS 116 on PBT stood at Rs. 2.2 crore.
• Sustained volume growth, premiumisation, cost efficiencies and wider presence in untapped markets and a higher duty on
imported footwear will drive operating performance in the coming quarters.
• We broadly maintain our estimates for FY2020, FY2021 and FY2022 and maintain a Buy rating on the stock with a revised PT
of Rs. 845.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Relaxo-Feb03_2020.pdf
Feb 03, 2020 V-Guard Industries Stock Update BUY  218 270 
Summary
• We retain Buy on V-Guard Industries Limited (V-Guard) with a revised PT of Rs. 270 lowering our valuation multiple due to near
term headwinds and rolling forward it to FY22E earnings.
• V-Guard reported lower than estimated net profit at Rs. 42.9 crore (up 27% y-o-y) on account of muted topline growth (up 5.4%
y-o-y) and lower than expected OPM (due to lower absorption of fixed costs led by muted revenue growth).
• The focus areas of the company will be increasing its non-South presence, expansion into adjacencies and improving efficiencies
which should revive its revenue growth to double digit over the medium term.
• Uncertainties with respect to Coronavirus in Kerala and China (being key supplier for electrical components) can affect near
term earnings.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/V-Guard-Feb03_2020.pdf


Stock Update EQUITY FUNDAMENTALS

Feb 03, 2020 Triveni Turbine Stock Update HOLD  99 112 
Summary
• We retain our Hold rating on Triveni Turbine Limited (TTL) with a revised PT of Rs. 112 due to near-term uncertainties in terms of
execution, order inflow and rolling forward our valuation multiple to FY2022E earnings.
• In Q3FY2020, revenue was lower than estimates on sluggish performance in domestic markets, although the company reported
better performance in exports. Net earnings were boosted by better operational performance.
• We expect the company to report a revenue and earnings CAGR of 11% and 16%, during FY2019-FY2022E, respectively.
• Order booking grew by 11% y-o-y for Q3FY2020, although order backlog stands lower by ~8% y-o-y.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Tiveni_Turbine-Feb03_2020.pdf
Feb 03, 2020 HDFC Life Insurance Company Viewpoint POSITIVE  566 12-15% 
Summary
• HDFC Life is expected to only be impacted marginally by the new norms introduced in the Union Budget.
• The company has relatively lower dependence on investment linked products (~28% of APE), and hence we don’t expect it to
be impacted significantly.
• We have introduced FY22E EV estimates and have adjusted the valuation multiples for the stock under the changed scenario.
• We maintain our Positive view and expect a 12-15% upside from current levels.
Read report - https://www.sharekhan.com/MediaGalary/Equity/HDFC_Life-Feb03_2020.pdf
Feb 03, 2020 Power Grid Corporation of India Viewpoint POSITIVE  188 20-22% 
Summary
• We maintain our Positive view on Power Grid Corporation of India Ltd. and expect 20-22% upside as strong order pipeline
provides visibility for sustained earnings growth over the next couple of years. Valuation attractive at 1.3x its FY22E P/BV.
• Strong PAT growth of 15% y-o-y to Rs. 2,654 crore, slightly above our estimates. Asset capitalisation increased to Rs. 5,230 crore
versus Rs. 4,221 crore in Q2FY2020.
• Management reiterated asset capitalisation guidance of Rs. 20,000 crore – Rs. 25,000 crore for FY2020E and target for
FY2021E is at Rs. 15,000 crore. Capex guidance of Rs. 10,500 crore for FY2021E vs. Rs15,000 crore in FY2020E.
• Removal of DDT and decline in capex could result into higher dividend payout.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Power_Grid-Feb03_2020.pdf
Feb 03, 2020 ICICI Prudential Life Insurance Company Ltd Viewpoint POSITIVE  446 12-15% 
Summary
• ICICI Prudential Life (IPRU), which has ~70% exposure to investment-linked products such as ULIP, is expected to be impacted
by the new norms.
• IPRU is available at 2.4x its FY2022E EV, which we believe is reasonable given the quality of the franchise and business metrics.
• We believe while the structural story for the insurance sector is intact, near-term stock performance may remain volatile until
clarity emerges.
• We maintain our Positive view on the stock with a revised upside potential of 12-15%.
Read report - https://www.sharekhan.com/MediaGalary/Equity/ICICI_Prud_Life-Feb03_2020.pdf

Feb 03, 2020 Indian Hotels Company Viewpoint POSITIVE  141 22-25% 
Summary
• Consolidated revenue grew by 3.7% y-o-y to Rs. 1,372.7 crore, while standalone revenue rose by 6.5% (driven by 5.6% growth
in the RevPAR).
• Consolidated OPM on a comparable basis improved by 339 bps to 29.6%, led by better performance of the India business and
operating efficiencies.
• Domestic demand-supply gap widened, with room demand growing by 4.7%, while supply increased by just 2.7%; domestic
RevPAR improved to 5.5%.
• Management expects RevPAR to cross 7% in FY2021, which augurs well for hotel industry; we stay Positive on the stock and
expect a 22-25% upside from current levels.
Read report - https://www.sharekhan.com/MediaGalary/Equity/IHCL-Feb03_2020.pdf
Feb 03, 2020 Vinati Organics Ltd Viewpoint NEUTRAL  1,953 6-8% 
Summary
• We downgrade Vinati Organics (Vinati) to Neutral and revise the potential upside to 6-8% as demand environment looks
challenging for its key products ATBS and IBB in the near term.
• However, we like the company’s business model from a long-term perspective as it operates in niche segments and has an
exceptional product basket that have a significant market share globally.
• Owing to soft performance and weak demand environment, we cut our earnings estimates for FY2020E/FY2021E/FY2022E by
11%/14%/19%; hence expect revenue and earnings CAGRs of 12.2% and 15.4%, respectively, over FY2019-FY2022E.
• The company delivered soft performance during Q3FY2020 with Revenue, EBITDA and PAT registering a decline of 21%, 22%
and 6% respectively.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Vinati-Feb03_2020.pdf
Feb 04, 2020 Titan Company Stock Update BUY  1,276 1,500 
Summary
• Consolidated revenue grew by 11.2% y-o-y driven by a 10.6% growth in the standalone jewellery business and strong growth of
34% and 69% clocked by subsidiaries TEAL and Caratlane, respectively.
• Despite higher gold prices, the company maintained its margins of jewellery business at 13%; overall reported OPM improved
by 74 bps to 12% (comparable OPM stood flat 11.2%).
• The management has guided for an 11-13% growth in the jewellery business in Q4FY2020.
• We have fine-tuned our earnings estimates for FY2021 and FY2022 and maintain our Buy recommendation with a revised PT
of Rs. 1,500.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Titan-Feb04_2020.pdf


Feb 04, 2020 TVS Motor Stock Update HOLD  455 485 
Summary
• We upgrade our recommendation on TVS Motors Ltd (TVSM) to “Hold” from “Reduce” earlier. Our PT stands at Rs 485.
• Q3FY20 results were ahead of our as well as street expectations as the company managed to improve margins despite double
digit fall in topline.
• 2W industry is expected to recover from H2FY21; margin improvement is expected to sustain due to increased localization and
cost control measures.
• We expect TVSM earnings to grow in double digits from FY21 as against flattish earnings expected over FY2018-2020 period.
• We have broadly retained estimates for FY21 and introduced FY22 earnings. Stock currently trades at 20.7x FY22 earnings
which is close to its long term historical average.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/TVS_Motor-Feb04_2020.pdf
Feb 04, 2020 Century Plyboards (India) Stock Update HOLD  169 185 
Summary
• We downgrade Century Plyboards (Century) to Hold with a revised PT of Rs. 185, lowering the valuation multiple, led by a lower-
than-expected earnings growth trajectory in the next two years and rolling forward it to FY2022E earnings.
• In Q3FY2020, Century reported muted revenue growth while adjusted OPM surprised positively. Adjusting for a Rs. 45.6 crore
impairment loss, the net profit rose by 68.5% y-o-y.
• The management expects muted revenue growth of 5-6% for FY2020, while OPM are expected to tread higher. GST-related
benefits are expected to accrue at much slower pace.
• MDF/Particle board greenfield capacity expansion to be undertaken post lifting of stay by the UP state government on issued
licenses. The hearing of the case on 13th February, 2020.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/CenturyPly-Feb04_2020.pdf
Feb 04, 2020 Tata Global Beverages Viewpoint POSITIVE  380 22-24% 
Summary
• Tata Global Beverages (TGBL) registered mixed numbers in Q3FY2020. Revenues rose by ~3%, driven by a 7% growth in the
India business.
• Benign input prices (Tea and Coffee) led to an almost 200 bps improvement in operating margins to 12.2%.
• The company received NCLT approval for merger of Tata Chemicals’ consumer business with TGBL, which would result in
portfolio expansion and margin accretion over the next two years.
• We have broadly maintained our earnings estimates for FY2021 and FY2022; and retain our Positive view on the stock with a
22-24% upside.
Read report - https://www.sharekhan.com/MediaGalary/Equity/TGBL-Feb04_2020.pdf

Feb 04, 2020 SRF Limited Viewpoint POSITIVE  3,745 13-15% 
Summary
• We maintain our Positive stance of SRF with potential upside of 13-15%.
• Considering 9MFY2020 performance, we have fine tuned our numbers for FY2020E, FY2021E and FY2022E to factor in strong
growth momentum in the chemicals business, improved profitability in the packaging film business and weak performance in
the technical textiles business.
• Considering strong buoyancy in the chemical business, the company has further announced capex of Rs. 304 crore to produce
intermediates for agro chemcials and to debottleneck the HFC capacity.
• Strong Q3 performance led by the chemical segment, wherein revenue grew by 39% and EBIT margin improved by 455 BPS
y-o-y to 17.6%. Overall revenue grew by 2.3% y-o-y, EBITDA margin improved by 384 BPS y-o-y to 21.1%, while tax credit of Rs.
123 crore doubled RPAT to Rs. 343 crore.
Read report - https://www.sharekhan.com/MediaGalary/Equity/SRF-Feb04_2020.pdf
Feb 04, 2020 Affle India Limited Viewpoint POSITIVE  1,798 10-12% 
Summary
• We stay Positive on Affle India (Affle) and expect a 10-12% upside in the next 10-12 months.
• Revenue beat in a tough macro environment; margins contract due to higher inventory and data costs and employee expenses.
• Revenue growth momentum in Q4FY2020 on y-o-y basis is expected accelerate on the back of advertisers’ spending spill-over
and lower base effect.
• Management remains confident that the company would deliver at least 25% CAGR of revenue growth till 2025, led by its CPCU
model and expanding scope of products for both consumer and advertisers.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Affle-Feb04_2020.pdf
Feb 05, 2020 Bharti Airtel Stock Update BUY  534 610 
Summary
• We maintain our Buy rating on Bharti Airtel with a revised price target (PT) of Rs. 610.
• Steady EBITDA performance, scope for growth in 4G subscribers and improving free cash flows make us optimistic on the stock.
• Revenue beat estimates, led by tariff hikes in Q3; EBITDA margin remained in line with our estimates.
• Given higher consumption of data and recent developments in Indian wireless industry, we believe that the company would
hike tariffs again in 12-18 months.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Bharti_Airtel-Feb05_2020.pdf
Feb 05, 2020 Cipla Stock Update BUY  447 540 
Summary
• We maintain our Buy recommendation on the stock with an unchanged PT of Rs. 540.
• Cipla reported muted results for Q3FY2020. PAT missed estimates.
• India business is on strong footing with the management looking to merge all the three segments in the India business under
one, leading to generation of significant synergies.
• Strong new launch line up is expected to drive the US business.
• We expect Cipla’s topline and PAT to clock a CAGR of 13% and 23%, respectively, over the next two years.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Cipla-Feb05_2020.pdf


Feb 05, 2020 Cadila Healthcare Stock Update HOLD  272 300 
Summary
• We retain our Hold Recommendation on Cadila Healthcare Limited (Cadila) with a revised PT of Rs 300.
• Cadila reported weak results for Q3FY2020.
• We expect regulatory issues at the Moraiya plant to overweigh on the stock until completely resolved. The management has
stopped production at Moraiya Plant and is in midst of a site transfer to Liva.
• We expect the Sales and PAT to grow at a CAGR of 9.5% and 10% respectively over the next two years.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Cadila-Feb05_2020.pdf
Feb 05, 2020 Thermax Stock Update HOLD  1,074 1,195 
Summary
• We retain our Hold rating on Thermax with an unchanged PT of Rs. 1,195 on account of a cautious outlook in order tendering.
• In Q3FY20, Thermax achieved steady execution and operating margins improved. A lower effective tax rate pulls up net profit.
• Weak order inflow barring one large FGD order for Q3FY2020 and modest execution during the same period depleted the exit
order backlog to 0.8x TTM consolidated revenues.
• Management expects better ordering both in its energy and environment segments as the enquiries pipeline remains positive
in domestic as well as international markets.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Thermax-Feb05_2020.pdf
Feb 05, 2020 Apollo Tyres Stock Update BUY  168 200 
Summary
• We upgrade our recommendation on Apollo Tyres Ltd (ATL) to “Buy” from “Hold. Our PT stands at Rs 200.
• Domestic market is expected to recover from FY21 driven by improved economy and increased infrastructure investment by
Government.
• Margins are expected to improve driven by soft commodity prices and ramp up at Hungary plant.
• We expect ATL to report strong 28% earnings CAGR over the next two years as against earnings drop expected in FY20.
• We introduce FY22 estimates and rollover our target multiple of 12x on FY22 earnings.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Apollo_Tyres-Feb05_2020.pdf
Feb 05, 2020 Max Financial Services Stock Update BUY  484 590 
Summary
• Max Financial Services (MFS) posted modest numbers for Q3FY2020, with steady business growth but moderating margin. The
life insurance business, MLIC saw GWP increasing by 10.1% y-o-y.
• Valuation for MFS appears attractive and is at a significant discount compared to some of the listed bank-owned insurance
players.
• We find that there are significant long-term positives in the strong operational numbers for the company.
• We maintain our Buy rating with an unchanged PT of Rs. 590.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Max-Feb05_2020.pdf

Feb 05, 2020 Jyothy Laboratories Stock Update HOLD  145 175 
Summary
• Jyothy Laboratories (JLL) registered yet another quarter of subdued numbers in Q3FY2020 with revenues declining by ~6%
(while volumes fell by 5.6%) and OPM declining by 30 bps y-o-y.
• Revenues fell by around 4% mainly because of a one-off moderation in institutional sales.
• The management expects revenue growth to get back to 4-5% in Q4FY2020 with OPM remaining stable on y-o-y basis.
• We have reduced our earnings estimates for FY2020 and FY2021 to factor in lower than expected performance; we maintain
Hold with a revised PT of Rs. 175.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Jyothi_Lab-Feb05_2020.pdf
Feb 05, 2020 Zydus Wellness Stock Update HOLD  1,435 1,575 
Summary
• After consolidation of Heinz portfolio, revenue growth was muted at 4-5% on like-to-like basis, affected by sustained demand
slowdown and seasonality in the portfolio.
• Profitability was affected due to change in revenue mix (lesser contribution from high-margin products) and higher input prices
(including milk and palm oil prices).
• Sales and distribution integration with Heinz has been over and the benefits of integration will start flowing from FY2021.
• We have reduced our earnings estimates for FY2020 and FY2021 to factor in lower-than-earlier expected margins and maintain
our Hold rating with a revised PT of Rs. 1,575.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Zydus-Feb05_2020.pdf
Feb 05, 2020 Exide Industries Viewpoint POSITIVE  186 20-22% 
Summary
• Exide Industries Ltd (Exide) Q3 results were in line on the operating front. Higher other income led to Profit beat.
• We expect Exide to report healthy 7% topline growth over the next two years driven by recovery in Auto OEM and improved
traction in industrial segment.
• New focus areas such as e-rickshaws and solar power would aid in topline growth.
• We retain positive view and expect 20-22% upside. Valuations at 12.5x FY22 earnings are attractive and lower than long term
historical average of 17x.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Exide-Feb05_2020.pdf
Feb 05, 2020 Gujarat Gas Limited Viewpoint POSITIVE  296 13-15% 
Summary
• Q3FY20 operating profit/PAT at Rs. 371 crore/Rs197 crore, rose by 15%/31% y-o-y and were above our estimates due to a better-
than-expected EBITDA margin, higher other income and lower interest cost.
• Q3FY20 exit gas sales volume run-rate at 10 mmscmd; Management guided for 8% annual volume growth outlook for next
couple of years.
• Development of six new geographical areas and environmental push to curb pollution would lead to next leg of volume growth.
• We stay Positive on Gujarat Gas and expect a 13-15% upside given strong volume led earning growth visibility.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Gujarat_Gas-Feb05_2020.pdf


Feb 05, 2020 Mahindra Logistics Limited Viewpoint NEUTRAL  400 3-5% 
Summary
• We retain a Neutral view on Mahindra Logistics Limited (MLL) on account of a material cut in net earnings for FY2020-FY2021
and a challenging business outlook for the medium term.
• Q3 net earnings continued to be affected by a slowdown in the auto sector, dragging down revenue, while increased overheads
eroded adjusted OPM, dragging net profit by 19% y-o-y.
• MLL added 1.2msf of warehousing capacity during 9MFY2020 taking the total warehouse space to 16.5 msf.
• Focus areas to be higher non-auto revenue, speeding up freight forwarding business, enhancing value added services, being
asset-light, increasing leased warehousing space and investment in technology.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Mahindra_Logistic-Feb05_2020.pdf
Feb 06, 2020 Hero MotoCorp Stock Update HOLD  2,412 2,750 
Summary
• Q3FY2020 results were better than our as well as street estimates as operating margins surprised positively. Cost control
measures, soft commodity prices and better mix helpled in margin expansion.
• Hero expects industry demand to remain weak in the next 2-3 quarters due to steep cost increases (12-15%) on account of
transition to BS6 emission norms.
• Hero expects sustained recovery to take time and expects recovery from H2FY21 driven by improved economic growth and
higher rabi sowing.
• We retain Hold rating on the stock with a revised PT of Rs. 2,750. PE of 13.4x FY22 earnings is close to historical average of
15-16x.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/HeroMoto_Corp-Feb06_2020.pdf
Feb 06, 2020 Divi’s Laboratories Stock Update BUY  2,023 2,200 
Summary
• We maintain our Buy rating on Divis Laboratories (Divis) with a revised PT of Rs. 2,200.
• Divis Q3FY2020 numbers were soft, but management maintained revenue growth guidance of 10% for FY2020, pointing to a
sturdy topline growth in Q4FY2020.
• Long-term growth to remain healthy, led by backward integration, aggressive capacity expansion, outsourcing potentials and
opportunities in China.
• We expect the company to report a sales and profit CAGR of 20% and 22%, respectively in the next two years.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/DiviLab-Feb06_2020.pdf
Feb 06, 2020 Federal Bank Stock Update BUY  93 110 
Summary
• We maintain Buy rating on Federal Bank with a revised target price of Rs 110..
• The stock trades at inexpensive valuations and offers scope of re-rating as the earnings cycle recovers.
• The bank posted strong results for Q3 FY20 with a sharp decline in net stressed loans to ~2.3% of loans (down by 14 BPS q-o-q)
in Q3 FY20, helped by the resolution of a large restructured account in the airline sector.
• We believe incremental loans to better-rated borrowers, no addition to the stressed pool, and high provision coverage are
positives, but asset-quality performance and margins will continue to be key monitorables.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/FederalBank-Feb06_2020.pdf

Feb 06, 2020 Ratnamani Metals & Tubes Stock Update BUY  1,276 1,450 
Summary
• We maintain our Buy rating on Ratnamani Metals & Tubes Limited (RMTL) with a revised PT of Rs. 1,450.
• We remain Positive on RMTL due to its strong balance sheet and its ability to generate superior return ratios despite capacity
expansion programmes.
• The management provides an encouraging outlook which will help in healthy order intake in coming quarters. Margin guidance
to remain in the range of 16-17%.
• RMTL reported a mixed quarter with beat on revenue, while margin was below expectation owing to a higher share of low
margin line pipes.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Ratnamani-Feb06_2020.pdf
Feb 06, 2020 Greaves Cotton Stock Update HOLD  140 155 
Summary
• Greaves results were ahead of estimates as margins surprised positively. Margins improved on yoy basis despite fall in the
topline.
• Going ahead, we expect volume pressure to sustain as diesel 3W engines are expected to fall in FY21 due to steep cost
increases post BS6 emission norm.
• Drop in diesel 3W volumes would offset the strong growth in electric scooters and aftermarkets and we expect GCL volumes
to be flattish for FY2021.
• We retain Hold rating on the stock with revised PT of Rs 155 as we rollover to FY22 estimates. At CMP, stock is trading at P/E of
16.6x FY22 earnings which is close to long term historical average.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Greaves_Cotton-Feb06_2020.pdf
Feb 06, 2020 Hindustan Petroleum Corporation Limited Viewpoint POSITIVE  243 12-15% 
Summary
• Q3FY20 PAT, at Rs. 747 crore (up 2.4x y-o-y, down 28.8% q-o-q) lagged our estimates due to a miss in refining margins and
lower refining throughput. Core GRM was weak at $1.5/bbl (down 43% q-o-q).
• Recent decline in crude oil prices are expected to lower fuel under-recoveries and thus reduce working capital burden for
OMCs.
• HPCL’s FY21E EV/EBITDA of 6.1x is at a steep discount of 34% versus that of BPCL. Tactical opportunity arising out of the
government’s divestment plan could deliver healthy returns in the next 8-12 months given a potential re-rating.
• Hence, we maintain our Positive view on HPCL and expect a 12-15% upside from current levels.
Read report - https://www.sharekhan.com/MediaGalary/Equity/HPCL-Feb06_2020.pdf


Feb 06, 2020 Indraprastha Gas Limited Viewpoint POSITIVE  522 10-12% 
Summary
• We maintain our Positive view on Indraprastha Gas Limited (IGL) and expect 10-12% upside as lower domestic gas prices and
regulatory push are expected to drive margin expansion and volume growth.
• Q3FY2020 PAT at Rs. 284 crore (up 43.4% y-o-y) was ahead of our estimate due to beat in gas sales volume at 6.7 mmscmd (up
13.4% y-o-y), EBITDA margin at Rs. 6.4/scm (up 8.1% y-o-y) and higher-than-expected other income.
• CNG and PNG volume was up by 11.6% and 18.4% y-o-y respectively in Q3FY2020.
• IGL’s premium valuation of 26.8x its FY2022E EPS as compared to its peers to sustain supported by superior volume growth
visibility.
Read report - https://www.sharekhan.com/MediaGalary/Equity/IGL-Feb06_2020.pdf
Feb 06, 2020 PNC Infratech Limited Viewpoint POSITIVE  195 18-20% 
Summary
• We retain our Positive view on PNC Infratech (PNC) with 18-20% upside potential on account of strong net earnings growth
visibility of a 35% CAGR over FY2019-FY2021E, led by a 38% CAGR in execution.
• In Q3FY2020, PNC maintained strong execution with 67.5% y-o-y standalone net revenue growth, stable OPM and net earnings
growth of 63% y-o-y.
• PNC maintained 60% y-o-y revenue growth guidance for FY2020 and expects 18-20% revenue growth for FY2021. Order inflow
guidance stays at Rs. 6,000 crore-7,000 crore despite Rs. 1,000 crore plus order inflows for fiscal year till date.
• We expect PNC to be one of the beneficiaries from the government’s Rs. 103 lakh crore infrastructure investment planned till
2025.
Read report - https://www.sharekhan.com/MediaGalary/Equity/PNC_Infra-Feb06_2020.pdf
Feb 06, 2020 Sudarshan Chemicals Industries Viewpoint POSITIVE  480 10-12% 
Summary
• We reiterate our Positive view on Sudarshan Chemical Industries Limited (SCIL) with a potential upside of 12-15%.
• The company is likely to deliver healthy revenue and earnings CAGR of 14.1% and 28.8%, respectively, over FY2019-FY2022E.
• Growth momentum to continue as capex plans are on track and likely to contribute significantly in FY2021E.
• The company delivered healthy performance in Q3FY2020, ahead of expectation. Revenue/adjusted EBITDA and adjusted PAT
increased by 8%/67% and 86% y-o-y, respectively.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Sudarshan-Feb06_2020.pdf
Feb 07, 2020 UPL Stock Update BUY  543 647 
Summary
• We have upgraded our rating on UPL Limited (UPL) to BUY with a revised price target of Rs 647/share as the risk-reward matrix
turns favourable.
• We have fine tuned our numbers for FY2020E and FY2021E and introduced FY2022E estimates and believe that the company
will be able to deliver revenue and earnings CAGR of 10.0% and 29.5% over FY2020-22E.
• The management maintains its guidance of revenue growth of 8-10% & EBITDA growth of 16-20% for FY2020E and expects to
pare down debt by US$ 500 million by the end of Q4FY2020E.
• As the new season kicks off, the management expects the inventory levels to normalise by the end of Q4FY2020E resulting in
improved operating cash flow position leading to debt reduction.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/UPL-Feb07_2020.pdf

Feb 07, 2020 GlaxoSmithKline Consumer Healthcare Stock Update HOLD  9,238 9,950 
Summary
• Revenue grew by 4% y-o-y, driven by a 6% growth in the Health food drinks category; domestic sales volumes grew by 3%..
• Higher milk prices led to 126 bps decline in gross margins; lower employee cost and efficiencies drove up OPM by 212 bps.
• The Chandigarh Bench of the NCLT at its hearing held on February 03, 2020 has reserved its order on the scheme of GSK
Consumer’s merger with Hindustan Unilever (HUL) and the Company is now awaiting the formal order.
• We have broadly maintained earnings estimates for FY2020/21; retain Hold with a revised PT of Rs. 9,950.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/GSK_Consumer-Feb07_2020.pdf
Feb 07, 2020 Aurobindo Pharma Stock Update HOLD  547 600 
Summary
• We maintain our Hold recommendation on Aurobindo Pharma Limited (Aurobindo) with a revised PT of Rs. 600.
• Q3FY2020 results were broadly in line with estimates..
• Aurobindo is witnessing elevated scrutiny from the USFDA. More than half of the filling done are from impacted plants and
approvals are likely to be delayed. Regulatory hurdles would overweigh on the stock performance, until successfully resolved.
• We expect the company to report sales and profit CAGRs of 19% and 10%, respectively, in the next two years.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Aurobindo-Feb07_2020.pdf
Feb 07, 2020 Punjab National Bank Stock Update HOLD  59 65 
Summary
• Punjab National Bank (PNB) posted weak Q3FY2020 performance, with muted business growth and weak asset quality.
• PNB currently trades at <0.5x its FY2022E book value, which reflects concerns on its asset-quality outlook and sluggish loan
growth prospects.
• We have introduced FY2022E estimates in this report.
• We maintain our rating to Hold with a revised PT of Rs. 65.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/PNB-Feb07_2020.pdf
Feb 07, 2020 KEC International Stock Update BUY  347 415 
Summary
• We maintain a Buy rating on KEC International Limited (KEC) with a revised price target of Rs. 415 revising our valuation multiple
given a healthy order backlog along with order inflow visibility in international T&D non T&D business and KEC’s ability to ramp-
up execution.
• KEC clocked healthy revenue growth driven by strong execution in T&D (SAE) with stable OPM. Stable operational performance
along with lower tax outgo resulted in strong net earnings growth.
• The management reiterated its guidance for 15% revenue growth with stable OPM for FY20 as it is expected to deliver strong
growth on increased scalability in non-T&D business and stable execution in the T&D business.
• Order book remains healthy providing 1.8x TTM revenues and order inflows for FY20 expected to remain at similar levels as
of FY2019.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/KEC-Feb07_2020.pdf


Feb 07, 2020 PTC India Stock Update BOOK OUT - 56 - -
Summary
• We drop our coverage on PTC India and recommend Book out as the continued weak performance of financial services arm is
a cause of concern for stock and it also lack positive triggers in the near to medium term.
• Plans to divest stakes in non-core subsidiaries (PTC India Financial Services and PTC Energy) is progressing at slow place and
would take time to materialise given the stress in the NBFC sector (high NPAs and provisions).
• Q3FY20 operating profit (excluding surcharge income) declined 15.6% y-o-y to Rs48 crore due to 11% y-o-y decline in gross
margin (excluding surcharge income) at 3.7 paisa per unit; growth in power trading volume was weak at 1.8% y-o-y.
• Short-term contracted volume fell by 24% y-o-y to 5,228 million units while medium and long-term contracts were up by 31%
y-o-y to 7,924 million units (accounting for 60% of total volumes in Q3FY2020).
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/PTC_India-Feb07_2020.pdf
Feb 07, 2020 NTPC Limited Viewpoint POSITIVE  116 18-20% 
Summary
• We maintain our Positive view on NTPC and expect an 18-20% upside given strong earnings growth outlook, attractive valuation
of 0.9x FY21E P/BV and healthy dividend yield of 5-6%.
• The strong commercialization schedule (6GW in FY20E and 5.3GW in FY21E at group level) would drive growth in regulated
equity. This coupled with lower fixed cost under-recoveries to drive earnings 13% PAT CAGR over FY2019-FY2022E.
• NTPC’s Q3FY2020 PAT was by up 25.6% y-o-y (down 8.2% q-o-q) to Rs. 2995, crore, which was marginally ahead of our
estimates. The growth in PAT was driven by lower fixed cost under-recoveries.
• PAF for coal-based power plants improved to 88% in Q3FY2020 versus 85% in Q3FY2019 and 84% in Q2FY2020.
Read report - https://www.sharekhan.com/MediaGalary/Equity/NTPC-Feb07_2020.pdf
Feb 07, 2020 Bata India Viewpoint POSITIVE  1,833 18-20% 
Summary
• Bata India’s (Bata) Q3FY2020 revenue grew by 6.5% y-o-y, driven by 4.5% growth in the retail channel and over 20% growth in
the wholesale channel (SSSG stood at ~2%), driven by premiumisation and innovation.
• Operating performance was steady with GPM and comparable OPM expansion of 208 BPS and 30 BPS, respectively; one-time
deferred tax adjustment impacted profitability.
• Store additions, focus on women’s footwear segment and improving contribution from premium end-products will drive
operating performance in the near to medium.
• We have broadly maintained our estimates for FY2021 and FY2022; We retain our Positive view with 18-20% upside from
current levels.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Bata-Feb07_2020.pdf

Feb 07, 2020 Varun Beverages Viewpoint POSITIVE  843 13-15% 
Summary
• Varun Beverages Limited (VBL) ended CY2019 on strong footing with revenues growing by 42%, while PAT rose by 61%; largely
driven by strong volume growth of 45% (organic volume growth of 13%).
• Despite integration of some of the acquired territories in south and west, the OPM improved by 30 bps to 20% in CY2019 and
expected to gradually improve in the coming years.
• We expect organic volume growth of 13-15% to sustain along with strong double-digit growth in the international business.
• We maintain our Positive view on the stock with 13-15% upside from current levels.
Read report - https://www.sharekhan.com/MediaGalary/Equity/VBL-Feb07_2020.pdf
Feb 07, 2020 Trent Limited Viewpoint POSITIVE  663 16-18% 
Summary
• Trent delivered strong performance in Q3FY2020 with revenue growth of ~33% driven by consistent SSSG of ~10%.
• Gross margins declined by 240 BPS due to higher discounts and change in revenue mix; reported OPM improved significantly
to 20% due to Ind AS 116.
• We expect the SSSG momentum to sustain in low double digits aided by improving store fundamentals, higher contribution
from private brands and higher investment on brands.
• We have increased our earnings estimates for FY2020, FY2021 and FY2022; we maintain our positive view on the stock with
16-18% upside from current levels.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Trent-Feb07_2020.pdf
Feb 10, 2020 Sun Pharmaceutical Industries Stock Update HOLD  420 470 
Summary
• We retain hold recommendation on Sun Pharmaceuticals limited (Sun Pharma) with a revised PT of Rs 470.
• Q3FY2020 results are in line with estimates operationally; however lower other Incomes, high depreciation & tax led to a PAT
miss.
• Going ahead lack of new product launches in the specialty segment, continued higher specialty promotional spends and price
erosion in US base business are likely to weigh on the performance.
• We expect headwinds and overhang to stay and hence despite reasonable valuations we don’t have a constructive view on
Sun Pharma.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Sun_Pharma-Feb10_2020.pdf
Feb 10, 2020 Britannia Industries Stock Update BUY  3,155 3,670 
Summary
• Britannia Industries’ (Britannia’s) net revenue grew by ~4% driven by a 2% volume growth and a 2% rise in realisations.
• Despite 3-4% inflation in raw material costs, the company saw gross margins dip by just 44 bps. OPM improved by 94 bps, led
by operating efficiencies and cost-saving initiatives.
• New products/ categories continue to perform well and contributed close to a 2% revenue growth.
• The stock is currently trading at 45.6x and 38.7x its FY2021E and FY2022E earnings; we maintain Buy with a revised PT of Rs.
3,670.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Britannia-Feb10_2020.pdf


Feb 10, 2020 Grasim Industries Stock Update HOLD  759 830 
Summary
• We retain Hold on Grasim Industries Limited (Grasim) with revised PT of Rs. 830 lowering our standalone estimates led by weak
outlook in its key verticals over near to medium term.
• In Q3FY2020, Grasim’s standalone adjusted net profit was affected by weak realizations in both its VSF and chemical divisions
affected by capacity overhang and muted demand environment.
• Grasim’s capacity expansion plan stay on track to benefit over a longer term as the demand environment revives in its standalone
businesses.
• The near-term outlook for viscose and chemical remains challenging due to capacity overhang, soft demand and continuing
U.S.-China trade war.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Grasim-Feb10_2020.pdf
Feb 10, 2020 Emami Stock Update HOLD  293 352 
Summary
• Consolidated revenue stood flat at Rs. 813 crore, winter products portfolio affected by delayed season; non-winter product
sales volumes grew by 10%.
• Gross margins improved by 124 bps due to benign raw material costs; OPM stood flat at 32.5% due to higher advertising spends.
• Promoter’s pledged share will reduce to 20% of promoter’s holding from current ~72% post the cement business sale.
• Normal summer to help growth recover in Q4; maintain Hold with unchanged PT of Rs. 352.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Emami-Feb10_2020.pdf
Feb 10, 2020 Union Bank of India Stock Update REDUCE  51 45 
Summary
• Q3FY20 numbers were modest as slippages remained elevated, proving to be a dampener on the asset quality side.
• NII grew by 25.7% y-o-y mainly as the bank was expected to emerge from low base last year.
• Despite the large capital infusion by the governmentlast quarter, we believe that the asset quality is still volatile and the
impending merger will be an additional overhang on the stock’s performance.
• We maintain our Reduce rating on the stock with a revised price target (PT) of Rs. 45.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/UBI-Feb10_2020.pdf
Feb 10, 2020 GAIL (India) Limited Viewpoint POSITIVE  122 25-27% 
Summary
• GAIL’s Q3FY2020 adjusted operating profit at Rs2,072 crore (down 22.5% y-o-y; up 18.5% q-o-q) was above our estimates due
to higher profitability in natural gas transmission and gas trading business; Adjusted PAT at Rs1,251 crore was marginally above
our estimates.
• Outlook for the core business has improved given expectation of pick-up in gas transmission and trading volume.
• GAIL is trading at trading at an attractive valuation of 4.9x FY2022E EV/EBITDA, which is near its trough valuation and 45%
discount to historical one-year forward EV/EBITDA of 9x).
• Hence, we maintain our Positive view on GAIL and expect 25-27% upside.
Read report - https://www.sharekhan.com/MediaGalary/Equity/GAIL-Feb10_2020.pdf


Feb 10, 2020 Mahanagar Gas Limited Viewpoint POSITIVE  1,196 15% 
Summary
• Q3FY20 Adjusted PAT at Rs. 187 crore was in line with our estimate as marginal beat in EBITDA margin was offset by higher
other income and a lower effective income tax rate.
• Margin outlook is robust as domestic gas prices are expected to further decline in H1FY2021E, after a sharp cut of 12.5% to
$3.23/mmBtu for H2FY2020.
• Gas sales volume grew by 3% y-o-y to 3.1 mmscmd; management reiterated its long-term volume growth guidance of 5-6%
annually.
• We maintain our Positive on MGL and expect a 15% upside, given attractive valuation of 13.8x its FY22E EPS (48% discount to
that of IGL FY22E PE) despite industry-leading margins of Rs. 9-10/scm and superior RoE of ~25-27%.
Read report - https://www.sharekhan.com/MediaGalary/Equity/MGL-Feb10_2020.pdf
Feb 10, 2020 Kajaria Ceramics Limited Viewpoint POSITIVE  545 10-12% 
Summary
• We stay Positive on Kajaria Ceramics and expect a 10-12% upside, factoring in a cut in earnings estimates for FY2020-FY2022;
we roll forward our valuation multiple to FY2022E.
• Kajaria continues to be affected by weak demand and muted volume offtake. Lower absorption of fixed costs owing to a decline
in revenues affects OPM. Net profit decline was restricted by a lower corporate tax rate.
• The management expects volume offtake to improve in FY2021 led by government’s efforts on completing stuck housing
projects, easing liquidity in banking sector and tightening GST compliances.
• Kajaria’s consolidated net surplus rises so does working capital days. The management withdrew a 5.6 MSM p.a. brownfield
capacity expansion plan of polished vitrified tiles at Rajasthan.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Kajaria-Feb10_2020.pdf
Feb 10, 2020 Insecticides (India) Limited Viewpoint POSITIVE  488 18-20% 
Summary
• We remain Positive on Insecticides (India) Limited (IIL) and expect an upside of 18-20%.
• We have fine-tuned our numbers for FY2020E and FY2021E and introduced FY2022E estimates and expect the company to
report revenue and earnings CAGRs of 10.0% and 14.5%, respectively, over FY2019-FY2022E.
• Management provides revenues and EBITDA growth guidance of 10% and 15% over the next few years, led improved pricing
environment in Q4FY2020 and further launch of innovative products in FY2021E.
• Delivers strong revenue growth of 22% in Q4FY2020, however inventory write-down impacts profitability (lower by 28% and
48% y-o-y at operating and PAT level respectively).
Read report - https://www.sharekhan.com/MediaGalary/Equity/Insecticides-Feb10_2020.pdf


Feb 10, 2020 Mastek Limited Viewpoint POSITIVE  417 23-25% 
Summary
• We maintain our Positive stance on Mastek Limited and expect a 23-25% upside from current levels.
• Mastek announced the acquisition of Evosys’ Middle East business for $65 million and the merger of Evosys India, US, UK and
RoW businesses for a consideration of 15% of Mastek shares to Evosys’ promoters.
• This deal would allow Mastek to access fast-growing segments, and verticals; also allow Mastek to cross-sale its services as
Evosys has strong 1000+ customers base (100+ customers with revenue of $1 billion+).
• Despite dilution of share, the deal is EPS accretive and will increase our EPS estimates by 14/17% for FY2021/FY2022E
respectively.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Mastek-Feb10_2020.pdf
Feb 11, 2020 Petronet LNG Stock Update BUY  264 345 
Summary
• Petronet LNG’s (PLNG’s) Q3FY2020 adjusted operating profit of Rs. 988 crore (up 16.4% y-o-y; down 5.6% q-o-q) was below our
estimate due to a miss in Dahej volume at 222 tBtu (up 12.7% y-o-y). Adjusted PAT at Rs. 730 crore (up 29.1% y-o-y; down 10.8%
q-o-q), exceeded our estimates of Rs. 649 crore.
• Work on the Kochi-Mangalore pipeline is on track and the pipeline is likely to get commissioned by March 2020. Ramp-up
of Kochi terminal’s utilisation rate and further capacity expansion at Dahej to 19.5 mmt would drive volume growth over next
couple of years.
• PLNG’s valuation of 11x FY2022E EPS seems attractive, given a strong volume-led earnings growth visibility (we expect an
EBITDA/PAT CAGR of 13%/8% over FY2020E-FY2022E) and robust RoE of 29-30%.
• We maintain a Buy rating on PLNG with unchanged price target of Rs. 345.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Petronet_LNG-Feb11_2020.pdf
Feb 11, 2020 Mahindra & Mahindra Stock Update BUY  524 665 
Summary
• In Q3FY2020, M&M’s margins improved y-o-y despite 6% fall in topline owing to cost-control initiatives, better mix and softening
commodity prices.
• New launches in the utility vehicle segment and conversion of the entire portfolio to petrol would drive auto volumes. Also,
tractor volumes would return to growth trajectory in FY21 due to higher rabi sowing and water reservoir.
• M&M’s volumes would improve substantially and we expect mid-single digit growth in the next two years as against a 9% drop
expected in FY2020.
• We retain our Buy rating on the stock with revised SOTP-based price target PT of Rs. 665 as we rollover to FY22 earnings. P/E
of ~10x FY22 earnings is attractive and below long term average of 15x.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/MnM-Feb11_2020.pdf

Feb 11, 2020 Oil India Stock Update BUY  134 165 
Summary
• We maintain our Buy rating on Oil India with a revised SoTP-based PT of Rs. 165 given an attractive valuation of 6.1x its FY22E
EPS (29% discount to historical average one-year forward PE multiple) and a high dividend yield of 7-8%.
• Q3FY20 adjusted PAT of Rs. 401 crore (down 67.5% y-o-y) was substantially below our estimates due to a sharp miss in oil & gas
sales volume, lower-than-expected other income and a higher-than-expected effective income tax rate.
• A sharp decline of 11% y-o-y in oil sales volume to 0.7 mmt and a fall of 7.4% y-o-y in gas sales volume to 0.6 bcm as production
was affected by protests in Assam; net oil realisation stood at $63/bbl (marginally ahead of our estimate).
• We have cut our FY2020-FY2021 earnings estimates by 13%-23% to factor lower oil & gas realisation and sales volume.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Oil_India-Feb11_2020.pdf
Feb 11, 2020 Kalpataru Power Transmission Stock Update BUY  417 545 
Summary
• We maintain our Buy rating on KPTL with a revised PT of Rs. 545 fine tuning the estimates for FY20-21 and have also rolled
forward our valuation multiple to FY2022E standalone earnings and revised valuation on JMC Projects.
• Healthy execution, stable operating margins and lower tax rate leads to adjusted net profit growth of 23% y-o-y.
• Management trimmed its revenue growth guidance to 18-20% for FY2020 versus earlier 20%+ y-o-y along with stable OPM of
10.5-11% for FY2020.
• Order book remains healthy providing 1.8x TTM revenues and order inflow expected to remain at the lower end of the guidance
of Rs 9000 crore for FY2020.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Kalpatru-Feb11_2020.pdf
Feb 11, 2020 Selan Exploration Technology Stock Update BOOK OUT - 141 - -
Summary
• We drop our coverage on Selan Exploration and recommend a Book Out as the extension of the PSC for Lohar and Bakrol
fields, entails an increase in government share of profit petroleum and higher royalty & cess, which would affect profitability.
• Poor track record of production ramp-up and the recent sharp correction to ~$54-55/bbl (from ~71/bbl in FY2019) is also a
concern with regards to earnings visibility..
• We expect Selan’s PAT to decline by 36% y-o-y in FY20E and by 8.1% y-o-y in FY21E due to lower crude oil price (assumption
of $62/bbl over FY2020E-2021E as compared to $71/bbl in FY2019) and a lower profitability for the Lohar and Bakrol fields.
• The company’s decision of not pursuing with the extension of the Indrora field (expiring on March 12, 2020) due to technological
and economical reasons would mean relinquishment of ~52 million barrels of discovered in-place reserves.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Selan-Feb11_2020.pdf


Feb 11, 2020 Ashoka Buildcon Limited Viewpoint POSITIVE  104 16-18% 
Summary
• We retain our Positive view on Ashoka Buildcon Limited (Ashoka) with 16-18% upside potential, factoring lower standalone
estimates for FY2020-FY2021 and rolling forward our EPC valuation multiple to FY2022E.
• In Q3FY2020, Ashoka’s consolidated net revenues declined led by lower execution on account of prolonged monsoons in key
projects. Higher OPM, lower interest expense and lower ETR led to healthy growth in net profit.
• Management trimmed standalone revenue growth guidance for FY2020 factoring weak Q2 and Q3. It will be eyeing Rs. 3000
crore to Rs. 4000 crore order inflows over the next couple of months.
• Management expects clarity emerging out of Macquarie’s exit from BOT/HAM assets by March 2020 which we believe should
remove a key hangover on the stock.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Ashoka_Buildcon-Feb11_2020.pdf
Feb 11, 2020 JMC Projects (India) Limited Viewpoint POSITIVE  89 12-15% 
Summary
• We stay Positive on JMC Projects and expect 12-15% upside, revising downwards our estimates for FY2020-FY2021 and rolling
forward our valuation multiple to FY2022E estimate.
• JMC Projects’ net earnings were affected by deliberate slowdown in execution to better manage cashflows along with higher
interest expense led by increasing leverage.
• Management has trimmed down FY2020 revenue growth guidance as priority in the near term remains on better cash flow
management than execution.
• Order inflows for Q3FY2020 were up 51% y-o-y with order backlog at the end of Q3FY2020 at Rs. 10,492 crore (2.8x its TTM
standalone revenue).
Read report - https://www.sharekhan.com/MediaGalary/Equity/JMC_Project-Feb11_2020.pdf
Feb 11, 2020 Parag Milk Foods Viewpoint BOOK OUT - 100 - -
Summary
• Shortage in milk supply and higher milk prices owing to a prolonged monsoon marred Parag Milk Foods’ (Parag’s) Q3FY2020
performance, dragging gross margins by over 700 bps and OPM by 104 bps.
• Performance over 9MFY2020 was also subdued, with both gross and operating margins declining substantially.
• Working capital cycle has deteriorated in H1FY2020 and the company is unable to deliver results even after the implementation
of a new sales model.
• We expect milk prices to remain high which will continue to affect Parag’s profitability; with no visibility of improvement in near-
term performance, we advise investors to exit the stock.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Parag_Milk-Feb11_2020.pdf

Feb 12, 2020 Info Edge (India) Stock Update HOLD  2,954 3,200 
Summary
• We retain our Hold rating on Info Edge (India) Limited (Info Edge) with a revised PT of Rs. 3,200.
• Revenue growth moderated to 14% y-o-y, in-line with the expected lines, owing to macro concerns; EBITDA margin improved by
170 BPS to 31% (on a comparable basis) owing to a decline in ad spends.
• Growth rate could moderate in the medium term, given slowdown in hiring and macro concerns in the real estate sector;
however, EBITDA margin is expected to improve going ahead.
• Post the acquisition of UberEats, Zomato has become India’s largest online food delivery player in terms of number of orders;
early signs show that the acquisition is spanning out well.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Info_Edge-Feb12_2020.pdf
Feb 12, 2020 Lupin Stock Update REDUCE  704 650 
Summary
• We maintain Reduce rating on Lupin with a revised PT of Rs 650.
• Lupin reported a disappointing performance for Q3FY2020 with results way below estimates.
• Lupin continues to grapple with regulatory headwinds as five of its facilities are under the USFDA scanner. This is likely to
impact new approvals as well as also slow down the growth momentum.
• Lack of clarity and uncertainty of timeline as well as the outcome of the USFDA regulatory issues would be an overhang on the
stock.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Lupin-Feb12_2020.pdf
Feb 12, 2020 Bank of India Stock Update HOLD  63 70 
Summary
• Bank of India (BOI) posted modest results for Q3FY2020 with mixed 0perating performance (PAT growth helped by other
income jump) but persisting concerns on asset quality..
• Elevated slippages pace continued (Q3FY2020 at Rs. 6,716 crore) and weak asset-quality outlook is a concern..
• We have fine-tuned our estimates for FY2020E/FY2021E and have introduced FY2022E estimates..
• We maintain Hold with a revised PT of Rs. 70.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/BOI-Feb12_2020.pdf
Feb 12, 2020 Coal India Ltd Viewpoint POSITIVE  180 20-22% 
Summary
• We maintain our Positive view on Coal India and expect 20-22% upside given attractive valuation of 5.8x FY22E EPS (56%
discount to historical average one-year forward PE of 13.1x) and high dividend yield of 9-10%.
• Likely higher volume offtake (led by better evacuation infrastructure) and improvement in realisations is expected to revive
earnings growth over FY2021E-FY2022E.
• Q3FY20 PAT at Rs. 3,924 crore (down 14.1% y-o-y; up 11.4% q-o-q), beats our estimate on account of better-than-expected FSA
realisation at Rs. 1411/tonne (up 5.7% y-o-y) and marginally lower-than-expected income tax rate.
• Sharp decline in coal production and offtake by 5.4% y-o-y and 8% y-o-y respectively was on expected lines.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Coal_India-Feb12_2020.pdf


Feb 12, 2020 Astral Poly Technik Limited Viewpoint POSITIVE  1,210 12-15% 
Summary
• We reiterate our Positive view on Astral Poly Technik (Astral) and expect an upside of 12-15%.
• We have fine-tuned our numbers for FY2020E, FY2021E and FY2022E and expect revenue and earnings CAGR of 19.2% and
34.8%, respectively, over FY2019-FY2022E.
• Management guides for a healthy performance in Q4FY2020 and maintains guidance of 10-15% volume growth for FY2021 in
plastic segment and expects EBITDA growth to be in excess of revenue growth at company level.
• Delivers healthy volume growth of 15% y-o-y in plastic segment while performance in adhesive segment not encouraging as
revenue growth remained muted along with margin contraction.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Astral_Poly-Feb12_2020.pdf
Feb 12, 2020 City Union Bank Viewpoint POSITIVE  228 10-12% 
Summary
• We maintain a positive view on City Union Bank and expect potential upsides of 10-12%.
• City Union Bank (CUBK) posted modest results for Q3FY20, where its operating performance was slower, and asset quality wise
the impact of slowdown was visible due to high slippages (but recoveries there as well).
• CUB has a quality franchise and a conservative lending approach, which differentiates it from several similar-sized peers.
• CUB’s diversified credit portfolio, backed by strong collaterals, provides comfort on book quality.
Read report - https://www.sharekhan.com/MediaGalary/Equity/City_Union-Feb12_2020.pdf
Feb 13, 2020 PI Industries Stock Update BUY  1,547 1,750 
Summary
• We upgrade our rating on PI Industries Limited to Buy with a revised PT of Rs. 1,750 per share owing to aggressive expansion
strategy to tap the robust and encouraging demand environment.
• We expect revenue and earnings CAGR of 27.6% and 29.8%, respectively, during FY2019-FY2022E (Isagro numbers factored
in from Q4FY2020).
• Management retains its FY2020E guidance of ~20% y-o-y improvement in performance, led by healthy order book,
commissioning of additional capacity and contribution from newly launched brands.
• The company delivered in-line results during Q3FY2020 with revenue up by 20% y-o-y to Rs. 850 crore; operating margin
improved by 94 BPS y-o-y to 21.9% and PAT increased by 13.0% y-o-y to Rs. 121 crore.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/PI_Industries-Feb13_2020.pdf
Feb 13, 2020 Ipca Laboratories Stock Update BUY  1,420 1,590 
Summary
• We maintain Buy recommendation on IPCA Labs with a revised PT of Rs 1590.
• Ipca reported impressive performance for Q3FY2020 with the results ahead of estimates.
• Strong growth outlook across both the API and formulations space would be the key growth driver. Resolution of the USFDA
hurdles would be a positive and will lead to earnings upgrades.
• We expect the company to report a Sales and PAT CAGR of 16% and 20% respectively between FY2020 to FY2022.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/IPCA-Feb13_2020.pdf

Feb 13, 2020 CESC Stock Update BUY  726 860 
Summary
• We maintain our Buy rating on CESC with a revised SoTP-based PT of Rs. 860. Potential turnaround of loss-making subsidiaries
and steady standalone earnings keeps us constructive on the stock. Valuation is attractive at 8.8x its FY22E EPS and 0.8x its
FY2022E P/BV.
• Consolidated Q3FY2020 PAT grew by 10% y-o-y to Rs. 263 crore aided by reduction in loss at Dhariwal Infrastructure and
higher profits at the Rajasthan distribution franchisee.
• Standalone performance lagged estimates with only 1.7% y-o-y rise in PAT to Rs. 176 crore and flat y-o-y power sales volume.
• Singing of long-term PPA for unit-1 of Dhariwal Infrastructure could act as key trigger for turnaround of the subsidiary.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/CESC-Feb13_2020.pdf
Feb 13, 2020 Kewal Kiran Clothing Stock Update BOOK OUT - 989 - -
Summary
• We recommend a Book Out on Kewal Kiran Clothing (KKCL), as earnings visibility remains bleak in the near term due to a
slowdown in the denim industry.
• Revenue and operating profit grew at a CAGR of just 3.2% and 2.6% over FY2016-19.
• Revenue growth stood at ~9% for 9MYF2020, OPM dropped by 471 bps and adjusted PAT declined by 5% y-o-y.
• The management has lowered its OPM guidance to ~18% from ~20% earlier due to higher discounts/trade margins.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/KKCL-Feb13_2020.pdf
Feb 13, 2020 Aarti Industries Viewpoint POSITIVE  972 16-18% 
Summary
• We reiterate our Positive stance on Aarti Industries Limited (Aarti) with a revised potential upside of 16-18%.
• The company remains among our top investment bets, as growth levers in respect of multi-year high margin contracts would
start to play out in 6-12 months.
• Management reiterates it PAT growth guidance of 10-15% and capex of Rs 1200 crores for FY2020E. We expect revenue and
earnings CAGR of 19.3% and 25.4% over FY2019-FY2022E, respectively.
• Delivers mixed results as beat on revenue, while margin disappoints. On comparable basis, revenue was lower by 1% and EBIT
margin improved by 28 bps to 20.5%.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Aarti_Industries-Feb13_2020.pdf
Feb 14, 2020 IRB Infrastructure Developers Stock Update BOOK OUT - 101 - -
Summary
• We Book Out IRB Infrastructure from our active coverage owing to its weak EPC order backlog, unresolved BOT toll issues and
increased leverage.
• During Q3, IRB’s consolidated net profit was affected by a decline in BOT revenue, contraction in OPM and increased interest
expense.
• Strong EPC execution during the quarter and removal of two projects leads to weak order backlog translating to 1.3x TTM EPC
revenues.
• IRB expects to win Mumbai Pune tolling rights with payout of Rs. 8262 crore in four installment in three years. GIC deal closure
expected in few days time.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/IRB-Feb14_2020.pdf


Feb 14, 2020 Orbit Exports Stock Update BOOK OUT - 81 - -
Summary
• We recommend Book Out on Orbit Exports Limited (Orbit), as earnings visibility remains bleak due to slowdown in the exports
market and revival is expected to take another few quarters.
• Revenue and earnings have been consistently falling since FY2015 and have declined at a CAGR of 3.3% and 3.4% over
FY2015-19, respectively.
• Performance was also subdued for 9MFY2020, with revenue growth moderating to 5.8% and adjusted PAT staying flat.
• Uncertainty in the export market is expected to sustain, thus impacting the performance of Orbit.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Orbit-Feb14_2020.pdf
Feb 14, 2020 Bharat Petroleum Corporation Viewpoint POSITIVE  476 18-20% 
Summary
• Q3FY2020 adjusted operating profit of Rs. 2,546 crore (up 3.5x y-o-y; up 13.9% q-o-q) lagged our estimates, due to a miss in
GRM at $3.2/bbl (up 16.2% y-o-y). This was, however, partially offset by higher refinery throughput of 8.4 mmt (up 12.3% y-o-y).
• Core GRM was weak at $2.2/bbl (up 15.4% y-o-y) but better-than-expected when compared to $1.5/bbl for HPCL and $2/bbl for
IOCL. Marketing sales volume grew by 7.7% y-o-y to 12.3 mmt.
• We believe the sale of government’s 53% stake in BPCL to private/foreign players could lead to re-rating of the stock. Thus, the
tactical opportunity arising out of the government’s divestment could deliver healthy returns in the next 8-12 months.
• Hence, we stay Positive on BPCL and expect 18-20% upside from current levels.
Read report - https://www.sharekhan.com/MediaGalary/Equity/BPCL-Feb14_2020.pdf
Feb 14, 2020 Future Lifestyle Fashions Viewpoint POSITIVE  386 18-20% 
Summary
• Q3FY2020 consolidated revenue grew by just ~3% y-o-y affected by brand rationalisation and reduction of inventory with trade
channels; revenue of Central grew by ~9.3%, whereas revenue of Brand Factory chain stood flat.
• Higher revenue share from the premium brand Central and operating efficiencies led gross margins and OPM to expand by 102
bps and 60 bps, respectively.
• Mid-to-high single-digit SSSG, incremental retail space and focus on emerging brands would aid double-digit revenue growth
in the near to medium term; we expect OPM at 17% for FY2020.
• We maintain our Positive view and expect a further upside of 18-20% from current levels.
Read report - https://www.sharekhan.com/MediaGalary/Equity/FLFL-Feb14_2020.pdf
Feb 14, 2020 KNR Constructions Limited Viewpoint POSITIVE  277 18-20% 
Summary
• We retain a Positive view on KNR Construction and expect 18-20% upside, considering its strong order backlog, healthy order
inflows and rolling forward our EPC valuation to FY2022E.
• KNR reported stellar Q3FY2020 standalone results, backed by higher execution and improvement in OPM.
• Management conservatively target Rs. 2,750 crore standalone revenue and Rs. 2,500 crore order inflows for FY2021.
• Divestment of Walayar project is likely to aid in paying off promoter loan and provide funding for working capital and investment
in HAM projects.
Read report - https://www.sharekhan.com/MediaGalary/Equity/KNR_Cons-Feb14_2020.pdf

Feb 14, 2020 Polyplex Corporation Ltd Viewpoint POSITIVE  520 28-30% 
Summary
• We stay Positive on Polyplex Corp (PCL) and expect a 28-30% upside, as valuation of 4x FY2022E EPS seems attractive, given
earnings growth visibility and a robust balance sheet.
• Recent capacity expansion by 16% to 312,645 tonnes and margin improvement to drive a 9% CAGR in PAT over FY2019-
FY2022E.
• Q3FY2020 consolidated operating profit increased sharply by 19% y-o-y (up 7.8% q-o-q) to Rs. 213 crore led by a 9% y-o-y rise
in sales volume and 420bps y-o-y increase in operating profit margin to 19.5%.
• Withdrawal of anti-dumping duty on purified terephthalic acid (PTA) by the government could reduce raw material cost for
production of PET film.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Polyplex_Corp-Feb14_2020.pdf
Feb 17, 2020 Shree Cement Stock Update BUY  24,031 26,000 
Summary
• We retain our Buy rating on Shree Cement Limited (Shree Cement) with a revised PT of Rs. 26,000, rolling forward our valuation
multiple to FY2022E earnings.
• During Q3FY2020, Shree Cement’s adjusted standalone net profit grew by 10% y-o-y, led by healthy performance from the
cement division, while power reported operating loss due to weak realisation.
• Shree Cement’s capacity expansion plan to reach 60MTPA in four years from the current 46MTPA remains on track. The
company recently raised Rs. 2,400 crore through QIP to aid in future growth plans.
• Shree Cement’s continuous capacity expansion plan with nil rise in leverage is likely to aid in healthy net earnings growth over
the next two years.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Shree_Cement-Feb17_2020.pdf
Feb 17, 2020 Ashok Leyland Stock Update HOLD  82 90 
Summary
• Ashok Leyland Ltd (ALL) Q3FY20 results were lower than expectations due to steep fall in the MHCV demand and resultant
drop in margins.
• MHCV industry is expected to remain under pressure over next three to four quarters given the subdued economic growth and
steep cost increases due to BS6 emission norms.
• Sustained recovery would take time and management expects demand to revive from H2FY21.
• We rollover our multiple on FY22 earnings and arrive at PT of Rs 90. We retain Hold rating on the stock. Current EV/EBIDTA of
10.6x FY22 is close to historical average of 11-12x.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Ashok_Leyland-Feb17_2020.pdf


Feb 17, 2020 Finolex Cables Stock Update HOLD  372 410 
Summary
• We reiterate our Hold rating with a revised PT of Rs. 410, rolling forward our valuation multiple to FY2022E.
• Finolex posted lower-than-estimated financials, led by weak performance in electrical and communication, with a decline in
OPM. Net profit was higher due to lower ETR.
• We expect slowdown in construction and funding crunch in OFC to limit its revenue growth along with higher ad spends in
FMEG to weigh on overall OPM over FY2020-FY2022.
• The issue regarding re-appointment of key managerial personnel also remains unresolved, with the matter now sub-judice.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Finolex_Cables-Feb17_2020.pdf
Feb 17, 2020 Sadbhav Engineering Stock Update BUY  97 120 
Summary
• We maintain our Buy rating on Sadbhav Engineering Limited (SEL) with a revised PT of Rs. 120, factoring a steep cut in standalone
net earnings estimates and rolling forward our EPC valuation multiple to FY2022E.
• SEL reported dismal Q3 standalone earnings, affected by extended monsoons and inability to receive lenders’ funds in HAM
projects.
• Management has trimmed down its FY2020 and FY2021 revenue guidance on account of weak Q2 and Q3. However, advance
stages of HAM projects are likely to put execution on track from Q1FY2021.
• Sale of nine projects to IndInfravit is expected to reduce net debt to Rs. 400 crore from Rs. 2,372 crore.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Sadbhav_Engg-Feb17_2020.pdf
Feb 17, 2020 Oil and Natural Gas Corporation Viewpoint POSITIVE  100 28-30% 
Summary
• ONGC’s Q3FY2020 adjusted PAT lagged our estimates owing to miss in oil & gas sales volumes, lower oil realisation, lower
other income (given lower dividend income) and higher DD&A (due to sharp 44% y-o-y jump in depletion).
• Oil and gas sales volume declined by 3% y-o-y and 9.4% y-o-y to 5.2mmt and 4.8bcm respectively; Net oil realisation stood at
$59.7/bbl (down 10% y-o-y).
• Commencement of gas production from KG 98/2 field in February 2020 could reverse the declining gas production trend going
forward.
• Stock trades at a 44% discount to historical average one-year forward PE of 11.2x; offers high dividend yield of ~6-7%. Hence,
we maintain our Positive view on ONGC and expect a 28-30% upside.
Read report - https://www.sharekhan.com/MediaGalary/Equity/ONGC-Feb17_2020.pdf


Feb 17, 2020 Balkrishna Industries Viewpoint POSITIVE  1,277 12-15% 
Summary
• Balkrishna Industries Ltd (BKT) posted strong Q3 results with operating margins improving sharply 640 bps yoy; beating our as
well as consensus estimates.
• BKT volumes are expected to grow in double digits over the next two years driven by easing of USA-China trade tensions,
deeper penetration into key markets and re-stocking by dealers.
• Operating margins are expected to sustain at 31% levels due to favourable commodity prices, captive carbon sourcing and
operating leverage due to strong volume growth.
• We expect BKT to deliver strong 21% earnings CAGR over FY20-22 period. The stock is trading at 17.5x FY22 earnings but the
premium valuations are justified given the strong earnings growth and return ratios of 18-22%.
• To factor sustained margin improvement and sales of carbon black to outside parties, we have raised our estimates by ~20%.
We retain positive view on the stock and expect 12-15% upside from the current levels.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Balkrishna-Feb17_2020.pdf
Feb 20, 2020 Divis Laboratories Limited Stock Update BUY  2,169 2,430 
Summary
• We maintain Buy recommendation on Divis Laboratories (Divis) with a revised PT of Rs 2,430.
• Divis is well placed to capitalize on the opportunities in the API space. A strong run up in the API prices attributable to likely
supply disruption from China due to outbreak of the Corona Virus is would substantially benefit API focused companies like
Divis.
• Backward integration, aggressive capex plan incurred in the past and outsourcing opportunities would add to the topline and
PAT growth for Divis. Further The company does not have pending regulatory hurdles which is a key positive and offers visibility
for growth going ahead.
• We expect the sales and PAT to grow CAGR 20% and 24% respectively over FY2020 –FY2022.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Divis_Lab-Feb20_2020.pdf
Feb 24, 2020 Inox Leisure Stock Update BUY  495 575 
Summary
• We maintain our Buy rating on INOX Leisure Limited (ILL) with revised PT of Rs. 575 as we expects the company to post a
revenue and earnings CAGR of 18.5% and 16.5% over FY2019-2022E.
• We rework our estimates for FY2020E to factor in the expectation of soft Q4 performance coupled with adoption of lower tax
regime from Q4FY2020E; hence numbers for FY2021E and FY2022E are adjusted for taxation accordingly.
• Though seasonal factor is no more applicable, however Q4FY2020E performance is expected to remain muted owing to weak
content in most part of the quarter coupled with one-time non cash hit on the taxation front.
• Screen additions set to accelerate in 2021E (80 screens as compared to expectation of 70 screen addition during FY2020E).
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Inox-Feb24_2020.pdf


Feb 24, 2020 Nippon Life India Asset Management Viewpoint POSITIVE  426 10-12% 
Summary
• Nippon Life Asset Management (NAM) has witnessed re-rating as it sees the benefits of ownership change and strengthening
of its balance sheet.
• We believe that the stock has potential for further upsides, as the second leg of AUM growth and benefits from having a global
owner kicks in.
• The new ownership, due to its strong international presence can help the AMC to benefit from increased International funds
participation as well.
• We maintain our Positive view and expect potential upside of 10-12%.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Nippon_Life-Feb24_2020.pdf
Feb 25, 2020 Hindustan Unilever Stock Update BUY  2,232 2,575 
Summary
• Hindustan Unilever Limited (HUL) is planning to form a new subsidiary with an authorised share capital of Rs. 2,000 crore to set
up a manufacturing facility to avail the benefits of the new tax regime.
• The company is planning for initial investment of Rs. 600 crore-800 crore for setting up the new facility.
• HUL will continue to post 4-5% volume growth in the near term as recovery will take 2-3 quarters; margin expansion is expected
to sustain.
• We maintain our Buy recommendation on the stock with a revised price target of Rs. 2,575.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/HUL-Feb25_2020.pdf
Feb 27, 2020 Gujarat Gas Limited Viewpoint POSITIVE  287 17-19% 
Summary
• We maintain our Positive view on Gujarat Gas Limited (GGAS) and expect 17-19% upside, given strong earnings growth visibility
(expect 15% PAT CAGR over FY2020E-FY2022E) along with robust RoE of 28-32%.
• Better gas sourcing mix with likely increase in share of cheap spot LNG to ~63% in the coming quarters from 55% currently
would help expand EBITDA margin to Rs. 4.6-4.9/scm over FY2020E-FY2022E from Rs. 4.3/scm in FY2019.
• Expect volume CAGR of 9% over FY2020E-FY2022E, led by regulatory push to curb pollution and low LNG prices. Development
of six new geographical areas would lead to the next leg of volume for GGAS.
• Management hinted that network tariff for common carrier capacity would not make business lucrative for new entrants given
low margin of ~Rs. 3/scm for industrial PNG (76% of GGAS’s volumes) and, thus, do not expect risk to volumes.
Read report - https://www.sharekhan.com/MediaGalary/Equity/GujGas-Feb27_2020.pdf

Feb 28, 2020 Atul Limited Viewpoint POSITIVE  5,118 12-15% 
Summary
• We like Atul Limited’s (Atul) business model from a long-term perspective and consider it as an attractive play, hence we
upgrade our stance on Atul to a Positive View as risk-reward turns favourable with potential upside of 12-15%.
• The company has been delivering healthy performance on a sustainable basis and we believe the same to continue. We expect
revenue and earnings CAGR of 8.9% and 23.1%, respectively, over FY2019-FY2022E.
• Atul is adequately placed with raw materials till April 2020; hence we do not see any meaningful impact on Q4FY2020
performance owing to spread of Corona Virus beyond China, which is causing a concern for the global economic environment.
• Future growth is likely to be driven by improved utilisation of enhanced capacities as there seems to be limited scope for further
margin expansion (from margin of sub-16% in FY2018 expanded to 22.5%+ for 9MFY2020).
Read report - https://www.sharekhan.com/MediaGalary/Equity/Atul-Feb28_2020.pdf
Feb 28, 2020 Granules India Limited Viewpoint POSITIVE  157 20-22% 
Summary
• We maintain a Positive view on Granules and expect an upside of 20-22%.
• Traction in existing products, strong new product launch pipeline and plans to enter the EU would boost topline. Favorable
product mix coupled with operational efficiencies would lead to OPM expansion.
• The management expects the strong growth momentum to sustain. Sales and PAT are expected to grow by 19% and 21% CAGR
respectively over FY2020-FY2022.
• The outbreak of the Coronavirus, is unlikely to have any material impact for Granules, as the company has alternate sources
for raw material procurement in place.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Granules-Feb28_2020.pdf

SECTOR UPDATE EQUITY FUNDAMENTALS
Sector View
Date Sector Report Type
Latest Chg
Feb 03, 2020 Automobiles Sector Update NEUTRAL 
Summary
• Automotive sales continued to remain in the negative trajectory due to weak economic growth coupled with OEMs intensified
efforts to correct BS4 stocks to ensure smooth transition to BS6 norms.
• While sales dropped across segments, performance in January 2020 continues to improve compared to earlier months.
• 2W players volumes declined 10% yoy while PV players reported drop of 5% drop yoy. CV players reported a 16% yoy drop in
volumes due to inventory correction and impact of axle load norms.
• Transition to BS6 norms would impact the automotive volumes in the near term. We expect gradual recovery driven by improved
financing and rural demand. We retain Neutral view on the sector.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Auto_Monthly_Review-Feb03_2020.pdf
Feb 04, 2020 Cement Sector Update POSITIVE 
Summary
• We maintain our Positive view on the cement sector, believing it to be in multi-year upcycle, with sustained government’s focus
on infrastructure investment and affordable housing as highlighted in the Budget.
• Cement production, prices and movement of key costs hint towards marginal volume growth, healthy pricing discipline and
contained key opex costs for Q4FY2020TD.
• We expect kick start of government spending on infrastructure projects and impetus on the affordable housing segment to
improve upon profitability of the sector in the medium to long term.
• We have a Buy rating on UltraTech and Ramco Cements, while we remain Positive on JK Lakshmi Cement.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Cement-Feb04_2020.pdf
Feb 18, 2020 Q3FY2020 IT Results Review Sector Update NEUTRAL 
Summary
• Revenue growth of tier-I IT companies moderated y-o-y along expected lines; CC growth remained at 0.4-4.3% q-o-q.
• EBIT margin expanded by 20-100 BPS q-o-q for tier-1 companies (except Tech Mahindra), led by higher utilisation and currency
tailwind.
• We expect similar or slight moderation in revenue growth in FY2021E (versus FY2020E) despite headwinds in BFSI and retail;
pace of decline in EBIT margin to moderate in FY2021E.
• We stay Neutral on the sector; Preferred picks: Infosys, HCL Tech, Tech Mahindra, L&T Infotech and Tata Elxsi.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Q3FY2020_IT_Results_Review_18_Feb_2020.pdf


EQUITY FUNDAMENTALS SECTOR UPDATE
Sector View
Latest Chg
Feb 18, 2020 Q3FY2020 Consumer Discretionary Results Review Sector Update NEUTRAL 
Summary
• Overall revenue performance for Q3FY2020 was mixed with growth standing at 10.7%; most companies registered low double-
digit revenue growth barring companies such as Wonderla Holidays and Future Lifestyle Fashions that registered muted
revenue performance.
• Comparable OPM (excluding Trent) expanded by 82 bps in Q3FY2020 to 13.5% driven by a favourable revenue mix and
operating efficiencies for most companies; comparable operating profit (excluding Trent) and PAT grew by 17% and 19%,
respectively.
• We expect the same-store-sales growth (SSSG) to be better in Q4FY2020 on the back of the on-going wedding season and
end of season sale (EOSS). Soft input prices to drive margins of footwear companies while higher discounts to dent margins of
certain apparel companies.
• We remain selective and our preferred picks include Bata India, Relaxo Footwears, Aditya Birla Fashion and Retail (ABFRL) and
Trent.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Q3FY2020_ConsumerDiscretionary_Results_Review_18_Feb_2020.pdf
Feb 19, 2020 Q3FY2020 Oil & Gas Results Review Sector Update POSITIVE 
Summary
• During Q3FY2020, CGD companies showcased continued strong performance with double digit volume growth and resilient
margins resulting in robust earnings growth on a y-o-y basis.
• Upstream PSUs earnings were impacted by lower sales volumes and weak oil & gas realizations along with higher cost.
Earnings of OMCs recovered led by inventory gain but core GRM remained weak.
• We maintain our positive stance on gas companies and OMCs. Strong volume growth outlook for CGD and gas utilities led
robust gas demand; privatisation of BPCL could act as key re-rating trigger for OMCs.
• Preferred picks - Reliance Industries, Mahanagar Gas, Gujarat Gas, GAIL (India) and Petronet LNG.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Q3FY2020_OilnGas_Results_review-Feb19_2020.pdf
Feb 20, 2020 Q3FY2020 Automobiles Results Review Sector Update NEUTRAL 
Summary
• Q3FY2020 was a weak quarter for automobile companies with the universe’s (ex-TAMO) revenue and profit falling by 6% and
10% y-o-y, respectively.
• However the performance was much better as compared to Q2FY20 where the automotive universe had registered topline
and Net Profit fall of 15% and 17% respectively.
• BS 6 transition is expected to impact volumes over the next three to four quarters. We expect recovery from H2FY21 driven by
pick-up in economic growth and improved rural sentiments.
• We retain Neutral view on the sector. Preferred picks: M&M, Bajaj Auto, Balkrishna Industries, Exide Industries and Apollo Tyres.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Q3FY2020_Auto_Results_review-Feb20_2020.pdf

SECTOR UPDATE EQUITY FUNDAMENTALS
Sector View
Latest Chg
Feb 20, 2020 Q3FY2020 Capital Goods & Engineering Results Review Sector Update POSITIVE 
Summary
• Project-based companies reported weak execution during the quarter. Order inflow remained flat barring couple of companies.
• Selected consumer-facing companies posted strong net earnings growth despite weak macro environment and low consumer
sentiments.
• Government infra pipeline to improve upon execution run rate. Corona virus outbreak in China remains a concern for couple of
players in the consumer durable space.
• We stay Positive on the sector. Our preferred picks are L&T, KEC International, Kalpataru Power Transmission, KEI Industries
and Dixon Technologies.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Q3FY2020_CapitalGoods_Results_review-Feb20_2020.pdf
Feb 24, 2020 Q3FY2020 Banking and Financial Services Results Review Sector Update POSITIVE 
Summary
• In Q3FY20, better operating performance of corporate-focused banks, and healthy growth trends in insurance companies
were key positives.
• Most banks, notably corporate private banks’ earnings were aided by recoveries (from a few large NCLT accounts), while retail
banks reported stable profitability. Most PSU Banks (PSBs) & NBFCs saw muted credit growth.
• We continue to like Private banks, due to high earnings visibility, remain selective in the NBFC space and prefer strong
players therein. Strong insurance players, having healthy business metrics and backed by strong (and stable) bancassurance
partnerships, are also attractive.
• Preferred Picks - ICICI Bank, SBI, Axis Bank, HDFC Life, Spandana Sphoorty, Kotak Mahindra Bank, ICICI Lombard, ICICI
Prudential and Bajaj Finance.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Q3FY2020_BFSI_Results_review-Feb24_2020.pdf
Feb 24, 2020 Q3FY2020 Consumer Goods Results Review Sector Update NEUTRAL 
Summary
• Q3FY2020 too was modest for consumer goods companies as a demand slowdown continued to affect sales volume of most
companies under coverage; volume growth for companies under our coverage stood at 0-5%.
• Inventory of low price commodities and operating efficiencies through cost-saving measures helped most companies post a
higher OPM y-o-y; universe’s PAT grew by 24% was boosted by the corporate tax rate cut.
• We expect a recovery will take another 2-3 quarters as trade channels are yet to get back on track (especially in rural markets);
better rabi crop and government’s steps to revive rural economy provides hope of some recovery by H1FY2021.
• Preferred picks - Dabur India, Varun Beverages and Tata Global Beverages.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Q3FY2020_Consumer_Goods_Results_review-Feb24_2020.pdf

EQUITY FUNDAMENTALS SECTOR UPDATE
Sector View
Latest Chg
Feb 24, 2020 Q3FY2020 Infrastructure/Cement/Building material Results Review Sector Update POSITIVE 
Summary
• The cement sector continued to benefit from higher realisation and margin expansion, while demand remained weak. January-
February cement prices were up on a y-o-y basis.
• Infrastructure companies barring PNC Infratech were weak on execution & increased interest expense. Order inflows are to
gather pace from March 2020.
• Building materials companies face weak demand and are expected to see gradual recovery from stricter GST compliance and
improvement in demand from real estate.
• Preferred picks - UltraTech, Shree Cement, The Ramco Cements, JK Lakshmi Cement, KNR Construction, PNC Infratech,
Ashoke Buildcon, Supreme Industries.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Q3FY2020_Infra_Cement_Results_review-Feb24_2020.pdf
Feb 24, 2020 Q3FY2020 Pharmaceuticals Results Review Sector Update NEUTRAL 
Summary
• Q3FY2020 results of Pharma companies under Sharekhan’s coverage was a mixed bag. Topline grew 7% y-o-y, primarily driven
by strong growth in domestic operations, which supported growth during the quarter. Elevated cost pressures resulted in PAT
decline.
• Earnings performance of the Pharma companies is expected to remain volatile as US business of the companies is expected
to be stressed due to multiple headwinds, including regulatory hurdles from the US FDA. Moreover, the cropping up of Corona
Virus is expected to be an overhang as it could result in supply disruptions from China, if prolonged.
• Although valuations of Pharma companies seem reasonable, apparent growth challenges are likely to stay; We retain our
Neutral Stance on the sector.
• Preferred Picks - IPCA, Divis Laboratories, Granules, Biocon, Laurus Labs.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Q3FY2020_Pharmaceuticals_Results_review-Feb24_2020.pdf
Feb 26, 2020 Automobiles Sector Update NEUTRAL 
Summary
• We expect automotive sales volumes to be much better in February 2020, as the average decline is likely to be 8% as compared
to an 17% drop seen in YTDFY2020.
• Inventories across segments have come down to 3-4 weeks as compared to 6-7 weeks in past three months.
• PV sales are expected to drop marginally 3% while 2W segment is expected to drop 11% yoy in Feb. CV volumes are expected
to decline by 10% yoy.
• Transition to BS6 norms would impact the volumes in the near term. We expect sustained recovery from H2FY21.
• Preferred Picks - M&M and Bajaj Auto (among OEMs); Balkrishna Industries and Exide Industries(among ancillary companies).
Read report - https://www.sharekhan.com/MediaGalary/Equity/Auto_Monthly_Preview-Feb26_20.pdf

TREND & VIEW EQUITY TECHNICALS
Near vertical fall

Daily view
The Nifty had registered a new all-time high of 12430
in January
Over there, it had formed multiple bearish patterns and
had entered a short term correction phase
The index witnessed a near vertical fall from the second
half of February
On the way down, the Nifty achieved our initial short
term target of 11170 and even breached the support
zone of 11100-11000 where there were multiple supports
The daily momentum indicator is bearish
Crucial support will be at 9630, whereas crucial
resistance will be at 10100
Weekly view
Breach of the key psychological level of 11000 on
closing basis indicated that the medium-term trend is
bearish as well
In terms of the wave structure, the index has broken
down from a multi-month Ending Diagonal pattern
The bearish price breakout has been accompanied by
the bearish weekly momentum indicator
The weekly Bollinger Bands have started expanding
that suggests that that the fall can continue
Crucial support will be at 9400 whereas crucial
Monthly view
The Nifty had formed an Engulfing Bear candle on the
monthly chart for January
As a follow through of the bearish candle, the index
tumbled down in February
In terms of the wave structure, the index has completed
a wave 3 on the upside with an Ending Diagonal
formation & is forming a wave 4 down
For this, the Nifty can come down to the previous wave
IV low, which is near 10000
The monthly momentum indicator has triggered
bearish crossover
Crucial support will be at 9200 whereas crucial
Trend Target Support Resistance Trend reversal
Down 9200 9200 10752 10752

EQUITY DERIVATIVES MONTHLY VIEW
Shorts getting added in the index; It is Sell on rise

The February series was much of an volatile expiry and it Top five stock futures with the highest open interest in the current
was very much expected it to be volatile, as there were series are:
a lot of important events such as the Union Budget, the OPEN INTEREST
FUTURES
RBI Policy, etc, which were lined up in February. After the (Rs. Cr)
Union Budget, the market witnessed a sharp sell-off which HDFC 7,805.70
dragged the Nifty till 11600 and soon after that it witnessed ICICIBANK 5,140.63
sharp short covering and again tested 12200-12250 levels.
RELIANCE 4,822.33
However, after the panic of Coronavirus outbreak all over
SBIN 4,054.18
the world, the Nifty witnessed a sharp sell-off and breached
the budget low of 11600 and ended February with a loss of HDFCBANK 4,002.36
Source: Sharekhan
around 3.57%. This fall was backed by a significant amount
of addition in open interest, indicating that a lot of shorts
Top five stock options with the highest open interest in the current
got developed in this journey and with a high rollover of series are:
77% in the Nifty versus the three-month average of 72%. A
OPEN INTEREST
majority of the shorts have got carried forward to the March OPTIONS
(Rs. Cr)
series also.
SBIN 2,746.79
On the FII front, the data has been negative throughout RELIANCE 2,195.02
February. Currently, in Derivatives, they are net short in HDFCBANK 861.20
index futures with over 1,50,000 contracts and they have ICICIBANK 817.46
rolled over more shorts then longs in the next series. In
BAJFINANCE 817.35
the cash market too, they continued to be net sellers in
Source: Sharekhan
February and have so far being net sellers of Rs. 11,180
crore of equity on a net basis.
View for March series:
MARKET WIDE VS NIFTY ROLLOVER ACTIVITY:
On the options front, in the March monthly expiry, the
Nifty Market Wide
100.00% 10000 PE has the highest open interest of around 35.50

90.00%
80.00%
lakh shares, followed by the 11000 PE, which has 31.07 lakh
70.00%
shares. On the Call side, the 12000 CE has the highest in
60.00%
open interest with 27.05 lakh shares followed by 11000 CE

93.75%
92.74%
50.00%
91.24%
89.00%
88.67%
85.24%
84.09%
79.64%
77.65%
73.08%
40.00%
70.44%
which has 18.94 lakh shares in open interest.

66.30%
30.00%
20.00%
10.00% The put-call Ratio (PCR) has started on the higher side at
0.00%
1.37, which is a negative sign for the market. The volatility
Oct
Dec
Nov
Jan
Feb
Mar
index due to panic of Coronavirus across the world has

Rollover highlights- been continuously inching higher currently at around 32
• Nifty Future began the MAR series with lifetime low levels. While the Nifty is also starting the new series with
open interest at 1.52 crore versus 1.08 crore shares in
high open interest of 1.52 crore shares versus 1.08 crore
open interest.
• The March series started with Rs.1,12,006 crore versus shares in the last series and simultaneously the FII data
Rs. 1,17,502 crore in stock futures, Rs.17,687 crore versus shows very negative outlook for the Indian market. Hence
Rs. 12,971 crore in Nifty futures and Rs. 114,291 crore keeping in mind the above data, we feel that the trend of
versus Rs. 99,729 crore in index options and Rs. 17,721 the market continues to remain negative and its sell on
crore versus Rs. 17,571 crore in stock options.
every rise with the target of 10000 for the March expiry.
• Nifty March month rollover was at 77.65% versus
66.30%.
• Market-wide rollover was at 85.67% versus 89.00%

MONTHLY VIEW CURRENCY FUNDAMENTALS
Indian Rupee slips on ongoing concern over corona virus

Key points
CURRENCY LEVELS IN FEBRUARY (IN RS.)
India consumer price index (CPI) data showed that inflation
accelerated by 7.59% in January 2020 as compared to 7.35% Currency High Low Close % Monthly Change
in December 2019 USDINR 72.27 71.08 72.18 1.15
India’s industrial production declined by 0.3% in December EURINR 79.79 77.15 79.49 0.95
2019 as compared to a 1.8% rise in November 2019
GBPINR 94.30 91.86 92.96 -0.66
Exports declined by 1.7% in January and trade deficit widened
to $15 billion JPYINR 67.12 63.85 66.75 1.37
India’s GDP data showed economy expanded by 4.7% in
Q3FY20 in line with expectations.
Spot INR Movement in February Spot INR Movement in February
USDINR JPYINR
67 EURINR GBPINR
72.2
66.5
72 79.5
93.4
66
93.2
71.8
65.5 79
93
71.6 65 78.5 92.8
71.4 64.5 92.6
78
71.2 64 92.4
77.5
71 63.5 92.2
03-Feb-20
05-Feb-20
07-Feb-20
09-Feb-20
11-Feb-20
13-Feb-20
15-Feb-20
17-Feb-20
19-Feb-20
21-Feb-20
23-Feb-20
25-Feb-20
27-Feb-20
77 92
03-Feb-20
05-Feb-20
07-Feb-20
09-Feb-20
11-Feb-20
13-Feb-20
15-Feb-20
17-Feb-20
19-Feb-20
21-Feb-20
23-Feb-20
25-Feb-20
27-Feb-20
USD-INR: CMP Rs. 73.28
The Indian Rupee depreciated by 1.15% in the previous month on a strong US Dollar and risk aversion in domestic markets. Market sentiments remained
weak amid the Coronavirus outbreak and disappointing macros. India CPI inflation jumped to a 5.5-year high and industrial production contracted.
Further, the RBI raised its inflation forecast for Q4FY20 to 6.5% from 4.7% and projection for H1FY21 to 5.0-5.4% from 3.8-4.0%.
Outlook: The Indian Rupee is expected to trade with negative bias on amid ongoing concern over the Coronavirus outbreak and fears over deteriorating
global economic growth. The global death toll from the corona virus outbreak increased more than 3200. In India number of Coronavirus cases
increased to 30. Additionally, continued FII outflows from local shares and disappointing macro economic data will hurt the Rupee. India’s GDP grew
by 4.7% in Q3 FY20 compared to 5.1% in Q2 FY20. Traders will remain cautious ahead of Inflation data. India CPI data has shown that inflation remained
above Reserve Bank of India comfort zone. Expected trading range in near term is 72.30-74.
EUR-INR: CMP Rs. 81.50

The Euro depreciated by 0.60% in the previous month amid strong Dollar and disappointing economic data from the Eurozone. GDP data from the
Eurozone showed that economy grew at slower pace. Further, Uncertainty about German Chancellor Angela Merkel’s succession plans also added to
the downside pressure.
Outlook: Euro currency expected to trade with positive bias amid weak Dollar. Furthermore, Euro as a funding currency because of their nation’s
low interest rates may gain strength as money flows back to where it was funded from during risk times. However, sharp gains may be capped as
traders may speculate rate cut from European Central Bank to cushion corona virus impact on economic growth. Expected trading range in near term
is 79.60– 82.90..
GBP-INR: CMP Rs. 94.20

The British Pound depreciated by 2.90% in the month of February as the US Dollar stayed strong and on worries over UK-EU trade relations in future.
The UK said it will start preparing for a no-deal scenario if talks with the EU fail to make any progress by June. Further, Pound slipped on concern over
the Coronavirus outbreak. Traders speculate rate cut from Bank of England to cushion the Coronavirus impact on economic growth.
Outlook: The Pound is expected to trade with negative bias on concern over UK future trade relationship with the EU. Furthermore, Investors fear that
outbreak of deadly Coronavirus may hurt global economic growth. Traders expect Bank of England to cut rates to cushion the impact of the epidemic
on economic growth. Traders will remain cautious ahead of monetary policy meeting. The Pound is expected to trade at 92.0-95.0 in the near term.
JPY-INR: CMP Rs. (68.18)

The Yen appreciated by 0.42% in the previous month as safe-haven demand increased on fear that outbreak of deadly virus in China may hurt global
economic growth. However, sharp gains were prevented by a strong US Dollar and as Japanese GDP data showed that the economy contracted by
1.6% in Q4CY19 compared to 0.4% expansion in Q3 CY19.
Outlook: The Japanese Yen is expected to trade with positive bias on concern over Corona virus outbreak in China. Number of cases and death toll
worldwide increased. Investors fear that the outbreak may hurt global economic growth. Further, demand for safe haven will increase on worries over
geopolitical tension in Middle East and concern over global economic slowdown. Traders will remain cautious ahead of OPEC meeting. However,
sharp gains may be prevented as the Bank of Japan pledged to take necessary actions if needed to cushion economic damage from the Coronavirus
outbreak. Traders will remain cautious ahead of Bank of Japan Monetary policy meeting. The Yen is expected to trade at 66.50-69 in the near term.
CMP as on March 05, 2019

CURRENCY TECHNICALS TREND & VIEW
USD-INR - Eyeing uncharted territory EUR-INR - Range breached

The USDINR was consolidating since September 2019 EURINR was trading in a broad range of 80.56-76.87 since
at 72.40-70.34. For February, the pair broke out of the August 2019. For February, the pair found support near the
consolidation on the upside and closed decisively above the weekly lower Bollinger band (77.60) and witnessed a sharp
range. rebound.
The pair has broken out of the consolidation and indicating
Bollinger bands are expanding and prices are trading along
resumption of uptrend. The pair is inching towards the
the upper band, indicating expansion of volatility after six previous swing high of 86.17.
months of sideways price action. The weekly and monthly momentum indicator have a
The weekly and monthly momentum indicators have a positive crossover which is a Buy signal. Thus both price and
positive crossover, which is a Buy signal. Thus both price and momentum indicators are pointing towards a further rise in
momentum indicators are pointing towards a rise in the pair. the pair.
We maintain a positive stance on the pair and expect it to The pair has potential to retest the high (92.00) it touched in
reach levels of 77.85 in March. August 2013.
15
10
10
5
5 0
-5
0
-10
USDINR - INDIAN RUPEE 79 EURINR

95
78
94
77 93
92
76
91
75 90
74 89
88
73 87
72 86
85
71 84
70 83
82
69
81
68 80
67 79
78
66 77
65 76
75
64
74
63 73
72
62
71
61 70
60 69
68
59
67
58 66
57 65
64
56
63
55 62
61
54
53 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
A S O N D 2015 A M J J A S O N D 2016 A M J J A S O N D 2017 A M J J A S O N D 2018 A M J J A S O N D 2019 A M J J A S O N D 2020 A M J J A S O N D 2021
JPY-INR - Wedge breakout

GBP-INR - Bullish Flag breakout JPYINR was in retracement mode since August 2019. It was
falling steadily from levels of 68.65. The fall was overlapping
The GBPINR consolidated on expected lines for February in nature indicating that it is a correction of the previous rise.
and closed in the red. For February, the pair closed in the red, however, and
During consolidation phase it formed a Bullish flag formed a long lower shadow indicating buying interest near
pattern. The pair has broken out of the pattern indicating a 20-month moving average of 64.25.
continuation of the uptrend. The pair has broken out of the wedge pattern with a gap and
Bollinger bands are now expanding on account of the sharp has been inching higher. Bollinger Bands are showing signs
of expansion on account of the sharp rise in the pair. weekly
breakout and prices are trading along the upper band,
and monthly momentum indicator have a positive crossover
indicating that the positive price action is likely to continue. which is a Buy signal.
We maintain positive stance on the pair and expect the pair We maintain a positive stance on the pair and expect the pair
to reach levels of 101.60 in March. to continue to rise till 75.00 during March.
5
4
3
2 5
1
0
-1
-2 0
-3
-4
GBPINR -5
102.0
101.5
101.0
100.5
JPYINR
100.0 75
99.5
74
99.0
73
98.5
98.0 72
97.5 71
97.0 70
96.5
69
96.0
95.5 68
95.0 67
94.5
66
94.0
93.5 65
93.0 64
92.5 63
92.0
62
91.5
91.0 61
90.5 60
90.0
89.5 59
89.0 58
88.5
57
88.0
87.5 56
87.0 55
86.5
86.0 54
85.5 53
85.0
52
84.5
84.0 51
83.5
50
83.0
82.5 49
29 5 19 26 10 17 31 14 21 5 12 19 26 9 16 23 6 20 27 4 18 25 1 15 22 6 13 27 3 17 31 7 21 28 13 20 3 17 24 8 15 48
April May June July Augus t Septem ber October Novem ber Decem ber 2020 February March April May A M J J A S O N D 2016 M A M J J A S O N D 2017 M A M J J A S O N D 2018 M A M J J A S O N D 2019 M A M J J A S O N D 2020 M A M
Currency View Reversal Supports Resistances Target

USD-INR UP 71.50 72.40 / 72.00 74.48 / 75.00 77.85
GBP-INR UP 92.00 93.00 / 94.50 98.52 / 100 101.60
EUR-INR UP 79.50 82.27 / 80.66 86.17 / 90.31 92.00
JYP-INR UP 66.40 68.65 / 67.11 72.22 / 74.00 75.00

PMS FUNDS PMS DESK
PRIME PICKS STRATEGY

OVERVIEW Prime Picks Portfolio Performance
Prime Picks is a multi-cap discretionary PMS scheme. (as of February 2020)
It aims to outperform the BSE 200 & CNX Mid Cap 100 indices across Duration Prime BSE 200 NIFTY
market cycles. picks*
Scheme comprises two folios, Quality and Alpha, with a distinct investing 1 Month -4.0% -6.4% -6.4%
style to offer.
3 Months -3.9% -6.5% -7.1%
Based on the client risk profile allocation between conservative /moderate
/ aggressive. 6 Months 2.2% 2.4% 1.6%
It’s a long only fund. 1 Year 3.7% 3.4% 3.8%
Since inception 3.9% 1.7% 4.1%
INVESTMENT STRATEGY (25 June,2018)
Right mix of two different strategies with a high standard of *Note : Net of Quarterly AMC Fees
*Note: Returns mentioned are system-generated
management and corporate governance through in-depth research
by experienced in-house fundamental research team. Disclaimer: Returns are based on a client’s returns since
inception and may be different from those depicted in the risk
Aims to leverage on investment opportunities in structural
disclosure document.
growth sectors through Quality folio whereas the allocation to more
aggressive Alpha folio would add to superior outperformance across Top 5 Stocks – Prime Picks QUALITY
market cycles.
1 BAJAJ FINANCE
Maintain judicious mix between Quality and Alpha through dynamic
investment strategy and providing flexibility to investors to make 2 HCL TECHNOLOGIES
changes to allocations between the two folios once every year. 3 HDFC BANK
4 LARSEN & TOUBRO
PRICING & PRODUCT FEATURES 5 RELIANCE INDUSTRIES
Minimum investment of Rs.50 lakh
Top 5 Stocks – Prime Picks ALPHA
Charges
1 DIVI'S LABORATORIES
¾¾ 2% per annum (plus taxes); AMC fee charged every quarter.
2 MAHANAGAR GAS
¾¾ 0.5% brokerage on every trade executed.
3 SPANDANA SPHOORTY
¾¾ 20% profit sharing after the 18% hurdle is crossed at the end of
4 SUDARSHAN CHEMICAL
every fiscal (with higher watermark basis).
5 TATA CONSUMER
3.9% 4.1%
3.7% 3.4% 3.8%
2.4% 1.7%
2.2%
1.6%
1 Month 3 Month 6 Months 1 Year Since Inception
-3.9%
-4.0%
-6.4% -6.4%
-6.5%
-7.1%
Prime Picks PMS BSE 200 Nifty

PMS DESK PMS FUNDS
DIVERSIFIED EQUITY STRATEGY

OVERVIEW Diversified Equity Portfolio Performance
(As of February 2020)
Diversified Equity is a large-cap oriented, multi-cap discretionary PMS
scheme. Duration Diversified Equity* BSE 500
The investment product aims to outperform the BSE 500 Index, with 1 Month -4.2% -6.5%
relatively lower volatility in the portfolio. 3 Months -5.1% -6.0%
The product is suitable for investors having a moderate risk profile and 6 Months 6.4% 2.8%
seek to generate superior risk-adjusted returns. 1 Year 6.4% 3.0%
It’s a long-only fund. 2 Years 2.2% -0.1%
3 Years 6.4% 6.3%
5 Years 7.2% 5.0%
INVESTMENT STRATEGY
*Note : Net of Quarterly AMC Fees
DE is a multi-cap strategy with endeavour to have two-thirds exposure Annualised returns of 2 years, 3 years & 5 years
to Top 100 companies at any given point of time. While the rest is either
Disclaimer: Returns are based on a client’s returns since
invested in good quality midcaps or partly in cash to take advantage of inception and may be different from those depicted in the risk
volatility in the markets. disclosure document.
The portfolio endeavors to deliver superior risk-adjusted returns
Top 10 Stocks – Diversified Equity
across market cycles through a well-defined stock selection process
and has a low churn. The composition of large-cap and mid-cap 1 BAJAJ FINSERV
companies is fine-tuned depending upon market conditions. 2 HDFC BANK
3 HINDUSTAN UNILEVER
PRICING & PRODUCT FEATURES 4 JUBILANT FOODWORKS
5 KOTAK BANK
Minimum investment of Rs.50 lakh
Charges 6 LARSEN & TOUBRO
¾¾ 2.5% per annum (plus taxes); AMC fee charged every quarter. 7 MAHANAGAR GAS
¾¾ 0.5% brokerage on every trade executed. 8 RELIANCE INDUSTRIES
¾¾ 20% profit sharing after the 15% hurdle is crossed at the end of 9 SUDARSHAN CHEMICALS
every fiscal (with higher watermark basis).
10 TITAN
7.2%
6.4% 6.4% 6.4% 6.3%
5.0%
2.8% 3.0%
2.2%
-0.1%
1 Month 3 Months 6 Months 1 Year 2 Years 3 Years 5 Years
-4.2%
-5.1%
-6.0%
-6.5%
Diversified Equity PMS BSE 500

MONTHLY PERFORMANCE ADVISORY DESK
Advisory Products and Services

The Advisory Desk is a central desk consisting of a Mumbai- Advisory Products & Services
Advisory Products & Services
based expert team that runs various sample model portfolios
for illustrative purposes only for clients of all profiles, be they
traders or investors.
These products are different from Sharekhan research-based T d
Trader
Investor
technical and fundamental offerings as these essentially
try to capture the trading opportunities in stocks where
momentum is expected before or after some event including Actionable Ideas
A i bl Id
MID Derivative Sharekhan Intraday Calls
the announcement of results or where some news/event is Pre Market Action (Cash)
probable. Derivative Calls Derivative Idea
(Opt) (Fut+Opt)
Advisory products are ideal for those who do not have time to
Stocks In
Stocks In Technical
Technical Derivative
Derivative
either monitor the market tick by tick or shift through pages of News view view
research for data or pour over complex charts to catch a trend.
However, all these products require perfect discipline and money management.
For Investor
ACTIONABLE IDEAS
These calls focus on generating absolute returns over a timeframe of 6-12 months and have a favourable risk-reward ratio.
Stocks are closely tracked based on regular interaction with companies’ management to stay abreast of the business
outlook. For details about the product, please write to us at advisory@sharekhan.com.
For traders
INTRADAY CALLS
These are technical analysis calls. Calls will be generated in the cash segment and closed before the end of the trading
day. These calls have pre-defined stop loss, targets. For details of the product, please write to us at advisory@sharekhan.
com.
DERIVATIVE CALLS
These calls are based on the analysis of open interest, implied volatility and put-call ratio in the derivatives market. It is
a leveraged product and ideal for aggressive traders. These calls have a pre-defined stop loss, target, timeframe and
quantity to be executed. For more details on this product, please write to us at derivative@sharekhan.com.
DERIVATIVE IDEA FUTURES
Calls are in (stocks & index) futures segment, based on an analysis of open interest, implied volatility and the put-call ratio
in the derivatives market. It is a leveraged product and ideal for aggressive traders. These calls have pre-defined stop
loss, targets, timeframe and quantity to be executed. For more details on this product, please write to us at derivative@
sharekhan.com.
SHAREKHAN PRE-MARKET ACTION
This report gives us stocks in news, with likely the price effect which is valid for a day. The report has different sections
- Stocks in News, Events, Technical View and Derivative View alongwith positive and negative bias stocks. The report is
valid for a day, for more details please write to us on advisory@sharekhan.com.
Report Card
Product Intraday Calls (Cash) Derivative Calls Derivative Idea Future and Strategy
Month Feb 20 CY 20 Feb 20 CY 20 Feb 20 CY 20
No. of calls 35 74 89 202 7 15
Profit booked 18 41 46 116 3 09
Stop loss hit 17 33 43 86 4 07
Strike rate (%) 51 55 52 57 43 60

MUTUAL FUNDS DESK MF PICKS
Sharekhan mutual fund Finder March 2020

Top Equity Fund Picks Data as on February 03, 2020
Absolute % Compounded Annualised %
(Point to Point) (Point to Point)
Scheme Name *Riskometer NAV (Rs.)
6 Months Since
1 yr 3 yrs 5 yrs Inception
Large Cap Funds
Axis Bluechip Fund - Growth Moderately High 32 11.6 18.7 17.4 10.0 12.3
Mirae Asset Large Cap Fund - Reg - Growth Moderately High 52 7.0 8.8 11.5 9.8 15.0
UTI Mastershare Unit Scheme - Growth Moderately High 127 9.3 9.6 9.9 6.3 15.3
Nippon India Large Cap Fund - Growth Moderately High 34 5.1 3.7 9.6 6.7 10.3
Kotak Bluechip Fund - Reg - Growth Moderately High 247 11.4 12.9 9.5 7.1 19.5
ICICI Prudential Bluechip Fund - Growth Moderately High 43 6.7 8.0 9.2 7.4 13.3
HDFC Top 100 Fund - Growth Moderately High 470 0.2 1.2 6.9 5.7 19.0
Large & Mid Cap Fund
Invesco India Growth Opportunities Fund - Growth Moderately High 36 12.3 12.3 12.7 9.2 10.9
Sundaram Large and Mid Cap Fund - Reg - Growth Moderately High 37 14.0 13.3 12.2 10.2 10.6
Kotak Equity Opportunities Fund - Reg - Growth Moderately High 131 15.6 17.3 10.6 9.4 18.2
SBI Large & Midcap Fund - Growth Moderately High 235 13.0 11.5 10.4 8.8 14.1
Principal Emerging Bluechip Fund - Growth Moderately High 111 17.0 13.8 9.6 10.4 23.9
DSP Equity Opportunities Fund - Reg - Growth Moderately High 236 13.9 15.0 8.8 10.0 17.4
IDFC Core Equity Fund - Reg - Growth Moderately High 46 10.4 7.6 7.5 7.7 11.1
ICICI Prudential Large & Mid Cap Fund - Growth Moderately High 326 7.4 7.2 5.1 5.7 17.5
Mid Cap Fund
Axis Midcap Fund - Growth Moderately High 41 18.4 20.0 16.3 10.2 17.1
Kotak Emerging Equity Fund - Reg - Growth Moderately High 43 19.5 18.9 9.3 10.8 11.9
Edelweiss Mid Cap Fund - Growth High 28 16.6 14.0 9.0 8.5 9.0
DSP Midcap Fund - Reg - Growth Moderately High 60 19.0 18.9 8.8 10.9 14.5
BNP Paribas Mid Cap Fund - Growth High 34 15.7 14.6 6.8 7.6 9.4
Franklin India Prima Fund - Growth Moderately High 980 10.3 7.4 6.6 8.2 19.1
ICICI Prudential MidCap Fund - Growth Moderately High 96 9.3 6.1 5.9 6.1 16.0
Small Cap Fund
Axis Small Cap Fund - Reg - Growth Moderately High 34 24.9 30.9 14.4 12.2 22.0
HDFC Small Cap Fund - Growth Moderately High 39 5.0 -5.6 8.0 8.8 12.3
Kotak Small Cap Fund - Reg - Growth Moderately High 79 23.7 18.2 6.8 9.0 14.8
ICICI Prudential Smallcap Fund - Ret - Growth Moderately High 27 15.5 20.1 5.8 5.6 8.4
L&T Emerging Businesses Fund - Reg - Growth High 23 8.3 -2.2 5.6 9.8 15.7
Franklin India Smaller Companies Fund - Growth Moderately High 51 7.9 -0.7 1.5 6.1 12.3
Focused Fund
Axis Focused 25 Fund - Growth Moderately High 31 14.3 21.9 16.3 11.8 16.1
SBI Focused Equity Fund - Growth Moderately High 157 14.3 22.5 15.5 11.0 19.6
Sundaram Select Focus - Reg - Growth Moderately High 190 8.0 13.1 13.0 7.5 18.3
Motilal Oswal Focused 25 Fund - Reg - Growth Moderately High 24 14.5 18.1 10.2 8.1 13.8
Aditya Birla Sun Life Focused Equity Fund - Growth Moderately High 62 9.2 12.2 8.3 7.0 13.6
Franklin India Focused Equity Fund - Growth Moderately High 41 6.5 8.9 7.1 6.7 12.0
Multi Cap Funds
Canara Robeco Equity Diversified Fund - Growth Moderately High 143 12.3 12.8 13.1 8.0 17.6
Kotak Standard Multicap Fund - Reg - Growth Moderately High 37 10.1 12.8 10.8 9.5 13.5
SBI Magnum Multi Cap Fund - Growth Moderately High 51 7.9 11.5 9.5 9.6 12.0
Nippon India Multi Cap Fund - Growth Moderately High 96 6.8 2.8 8.6 4.5 16.4
Principal Multi Cap Growth Fund - Growth Moderately High 142 8.1 4.8 8.2 7.7 14.8
Aditya Birla Sun Life Equity Fund - Growth Moderately High 763 12.5 11.3 8.2 9.2 22.4
ICICI Prudential Multicap Fund - Growth Moderately High 291 5.2 5.7 7.4 7.7 14.2
HDFC Equity Fund - Growth Moderately High 637 0.9 1.9 6.9 5.7 18.0

MF PICKS MUTUAL FUNDS DESK
Data as on February 03, 2020

Absolute % Compounded Annualised %
(Point to Point) (Point to Point)
Scheme Name *Riskometer NAV (Rs.)
6 Months Since
1 yr 3 yrs 5 yrs Inception
Value & Contra Funds
Kotak India EQ Contra Fund - Reg - Growth Moderately High 55 9.8 9.8 12.3 8.4 12.4
Invesco India Contra Fund - Growth Moderately High 49 10.8 9.3 11.3 9.4 13.2
Tata Equity P/E Fund - Reg - Growth Moderately High 134 6.2 6.0 6.8 8.2 18.1
HDFC Capital Builder Value Fund - Growth Moderately High 277 3.8 -0.7 6.4 6.2 13.6
IDFC Sterling Value Fund - Reg - Growth Moderately High 48 8.3 1.3 6.2 5.7 14.2
ELSS
Axis Long Term Equity Fund - Growth Moderately High 50 14.3 21.7 15.5 10.5 17.3
Mirae Asset Tax Saver Fund - Reg - Growth Moderately High 19 9.5 12.1 13.7 -- 16.3
Canara Robeco Equity Tax Saver Fund - Growth Moderately High 69 12.0 11.5 12.3 7.6 19.2
Invesco India Tax Plan - Growth Moderately High 54 12.1 11.0 11.4 8.9 13.7
BNP Paribas Long Term Equity Fund - Growth Moderately High 42 11.4 15.8 10.6 6.9 10.6
Aditya Birla Sun Life Tax Relief 96 - Growth Moderately High 32 12.1 6.2 10.5 8.4 10.3
Kotak Tax Saver Fund - Reg - Growth Moderately High 48 13.2 16.2 10.5 8.4 11.6
DSP Tax Saver Fund - Growth Moderately High 51 10.7 15.4 9.0 9.7 13.3
Thematic/Sector Funds
Aditya Birla Sun Life India GenNext Fund - Growth High 92 15.6 16.3 12.7 11.3 16.5
ICICI Prudential Banking and Financial Services Fund - Retail - Growth High 67 7.2 12.7 11.2 11.4 18.0
Aditya Birla Sun Life Banking and Financial Services Fund - Reg -
High 30 9.8 15.2 10.6 11.5 19.6
Growth
L&T Infrastructure Fund - Reg - Growth High 16 8.9 6.1 5.5 7.6 3.7
DSP Natural Resources & New Energy Fund - Reg - Gth High 29 2.4 -2.2 0.2 9.7 9.5
BNP Paribas Equity schemes

Absolute
Compounded Annualised %
Scheme % (Point to
(Point to Point)
Scheme name *Riskometer Category Point)
Since
6 Months 1 yr 3 yrs 5 yrs
Inception
BNP Paribas Large Cap Fund - Growth Moderately High Large Cap 9.3 15.7 11.4 7.2 15.9
BNP Paribas Long Term Equity Fund - Growth Moderately High ELSS 11.4 15.8 10.6 6.9 10.6
BNP Paribas Multi Cap Fund - Growth Moderately High Multi Cap 12.7 15.8 9.2 7.8 11.9
BNP Paribas Mid Cap Fund - Growth High Mid Cap 15.7 14.6 6.8 7.6 9.4
BNP Paribas Focused 25 Equity Fund - Reg - Growth Moderately High Focused 10.3 14.2 -- -- 0.9
BNP Paribas India Consumption Fund - Reg - Growth High Thematic 16.6 23.1 -- -- 21.6
Aggressive
BNP Paribas Substantial Equity Hybrid Fund - Reg - Growth Moderately High 11.7 17.3 -- -- 10.0
Hybrid
*The Riskometer will indicate five levels of risk – low (principal at low risk), moderately low (principal at moderately low risk), moderate (principal at moderate risk), moderately high (principal at moderately high risk) and high (principal at
high risk).
Every individual has a different investment requirement, which depends on his financial goals and risk-taking capacities. We at Sharekhan first understand the individual’s investment objectives and risk-
taking capacity, and then recommend a suitable portfolio. So, we suggest that you get in touch with our Mutual Fund Advisor before investing in the best funds.n
Sharekhan Limited, its analyst or dependant(s) of the analyst might be holding or having a postition in the mutual funds mentioned in the article.

MUTUAL FUNDS DESK MF PICKS
Sharekhan mutual fund Finder March 2020

Top SIP Fund Picks
(*invested on 1st day of every month) Data as on February 03, 2020
SIP INVST (Monthly Rs. 1,000)* 1 year 3 years 5 Year
Total amount invested 12,000 36,000 60000
Present Compounded Present Compounded Present Compounded
Scheme Name *Riskometer NAV (Rs.) Value annualised value annualised value annualised
(Rs.) return (%) (Rs.) return (%) (Rs.) return (%)
Large Cap Fund
Axis Bluechip Fund - Growth Moderately High 32 12,885 16.3 43,979 14.1 84,050 13.8
Kotak Bluechip Fund - Reg - Growth Moderately High 247 12,560 10.2 40,024 7.4 74,075 8.6
Mirae Asset Large Cap Fund - Reg - Growth Moderately High 52 12,231 4.2 39,741 6.9 77,504 10.5
UTI Mastershare Unit Scheme - Growth Moderately High 127 12,474 8.6 39,682 6.8 73,507 8.3
ICICI Prudential Bluechip Fund - Growth Moderately High 43 12,186 3.4 38,789 5.2 73,672 8.4
Nippon India Large Cap Fund - Growth Moderately High 34 11,920 -1.4 38,014 3.8 72,399 7.7
HDFC Top 100 Fund - Growth Moderately High 470 11,553 -7.9 37,002 1.9 70,434 6.5
Large & Mid Cap Fund
Kotak Equity Opportunities Fund - Reg - Growth Moderately High 131 13,038 19.2 41,144 9.3 78,439 11.0
Mirae Asset Emerging Bluechip Fund - Growth Moderately High 57 12,714 13.1 41,110 9.3 83,580 13.6
Sundaram Large and Mid Cap Fund - Reg -
Moderately High 37 12,724 13.2 40,850 8.8 79,194 11.4
Growth
Invesco India Growth Opportunities Fund -
Moderately High 36 12,631 11.5 40,635 8.4 77,891 10.7
Growth
SBI Large & Midcap Fund - Growth Moderately High 235 12,824 15.1 40,229 7.7 75,575 9.4
DSP Equity Opportunities Fund - Reg - Growth Moderately High 236 12,768 14.1 39,764 6.9 76,485 9.9
Principal Emerging Bluechip Fund - Growth Moderately High 111 12,996 18.4 39,149 5.8 76,727 10.1
ICICI Prudential Large & Mid Cap Fund -
Moderately High 326 12,212 3.8 37,340 2.5 69,888 6.2
Growth
Mid Cap Fund
Axis Midcap Fund - Growth Moderately High 41 13,227 22.8 43,597 13.5 82,643 13.1
DSP Midcap Fund - Reg - Growth Moderately High 60 13,262 23.5 40,427 8.1 78,134 10.8
Kotak Emerging Equity Fund - Reg - Growth Moderately High 43 13,298 24.2 40,416 8.1 77,776 10.6
Edelweiss Mid Cap Fund - Growth High 28 12,970 17.9 38,577 4.8 72,987 8.0
BNP Paribas Mid Cap Fund - Growth High 34 13,106 20.5 38,431 4.5 70,987 6.9
Franklin India Prima Fund - Growth Moderately High 980 12,488 8.9 37,720 3.2 71,549 7.2
ICICI Prudential MidCap Fund - Growth Moderately High 96 12,373 6.8 36,656 1.2 69,028 5.7
Small Cap Fund
Axis Small Cap Fund - Reg - Growth Moderately High 34 13,900 35.9 44,913 15.7 85,320 14.5
SBI Small Cap Fund - Growth Moderately High 56 13,074 19.9 39,930 7.2 81,000 12.3
Kotak Small Cap Fund - Reg - Growth Moderately High 79 13,450 27.1 39,095 5.7 73,528 8.3
ICICI Prudential Smallcap Fund - Ret - Growth Moderately High 27 13,104 20.4 38,204 4.1 69,887 6.2
Nippon India Small Cap Fund - Growth Moderately High 40 12,622 11.4 36,486 0.9 73,064 8.0
HDFC Small Cap Fund - Growth Moderately High 39 11,716 -5.0 34,745 -2.4 69,585 6.0
L&T Emerging Businesses Fund - Reg - Growth High 23 11,978 -0.4 34,001 -3.9 69,561 6.0

MF PICKS MUTUAL FUNDS DESK
(*invested on 1st day of every month) Data as on February 03, 2020

SIP INVST (Monthly Rs. 1,000)* 1 year 3 years 5 Year
Total amount invested 12,000 36,000 60000
Present Compounded Present Compounded Present Compounded
Scheme Name *Riskometer NAV (Rs.) Value annualised value annualised value annualised
(Rs.) return (%) (Rs.) return (%) (Rs.) return (%)
Focused Fund
SBI Focused Equity Fund - Growth Moderately High 157 13,054 19.5 43,200 12.8 83,154 13.4
Axis Focused 25 Fund - Growth Moderately High 31 13,052 19.4 42,661 11.9 83,989 13.8
Sundaram Select Focus - Reg - Growth Moderately High 190 12,508 9.2 40,896 8.9 77,662 10.6
Motilal Oswal Focused 25 Fund - Reg - Growth Moderately High 24 12,873 16.0 40,691 8.5 76,270 9.8
Aditya Birla Sun Life Focused Equity Fund -
Moderately High 62 12,442 8.0 39,105 5.7 73,131 8.1
Growth
Franklin India Focused Equity Fund - Growth Moderately High 41 12,141 2.5 38,343 4.4 71,758 7.3
Multi Cap Funds
Canara Robeco Equity Diversified Fund -
Moderately High 143 12,737 13.5 41,425 9.8 78,215 10.9
Growth
Kotak Standard Multicap Fund - Reg - Growth Moderately High 37 12,520 9.5 40,254 7.8 77,848 10.7
SBI Magnum Multi Cap Fund - Growth Moderately High 51 12,394 7.1 39,291 6.1 75,110 9.2
Aditya Birla Sun Life Equity Fund - Growth Moderately High 763 12,659 12.0 39,201 5.9 75,610 9.5
ICICI Prudential Multicap Fund - Growth Moderately High 291 12,055 1.0 37,849 3.5 71,353 7.1
Nippon India Multi Cap Fund - Growth Moderately High 96 12,007 0.1 37,667 3.1 69,401 5.9
Principal Multi Cap Growth Fund - Growth Moderately High 142 12,259 4.7 37,131 2.1 72,243 7.6
HDFC Equity Fund - Growth Moderately High 637 11,632 -6.5 36,884 1.7 70,161 6.4
Value & Contra Funds
Kotak India EQ Contra Fund - Reg - Growth Moderately High 55 12,467 8.5 40,426 8.1 77,615 10.5
Invesco India Contra Fund - Growth Moderately High 49 12,479 8.7 39,416 6.3 76,808 10.1
Tata Equity P/E Fund - Reg - Growth Moderately High 134 12,073 1.3 36,500 0.9 71,937 7.4
HDFC Capital Builder Value Fund - Growth Moderately High 277 11,717 -5.0 35,560 -0.8 67,949 5.1
IDFC Sterling Value Fund - Reg - Growth Moderately High 48 12,088 1.6 34,631 -2.6 66,950 4.5
Tax-saving funds (ELSS)
Axis Long Term Equity Fund - Growth Moderately High 50 13,037 19.2 42,932 12.4 81,563 12.6
Canara Robeco Equity Tax Saver Fund -
Moderately High 69 12,681 12.5 41,290 9.6 77,376 10.4
Growth
Kotak Tax Saver Fund - Reg - Growth Moderately High 48 12,878 16.1 41,090 9.2 77,675 10.6
BNP Paribas Long Term Equity Fund - Growth Moderately High 42 12,815 15.0 40,399 8.0 73,977 8.6
Motilal Oswal Long Term Equity Fund - Reg -
Moderately High 19 13,106 20.5 40,258 7.8 80,023 11.8
Growth
Invesco India Tax Plan - Growth Moderately High 54 12,642 11.7 40,129 7.5 76,040 9.7
DSP Tax Saver Fund - Growth Moderately High 51 12,554 10.1 39,930 7.2 76,527 10.0
Aditya Birla Sun Life Tax Relief 96 - Growth Moderately High 32 12,463 8.4 38,514 4.7 73,582 8.3
*The Riskometer will indicate five levels of risk – low (principal at low risk), moderately low (principal at moderately low risk), moderate (principal at moderate risk), moderately high (principal at moderately high risk) and high (principal at
high risk).
Every individual has a different investment requirement, which depends on his financial goals and risk-taking capacities. We at Sharekhan first understand the individual’s investment objectives and risk-
taking capacity, and then recommend a suitable portfolio. So, we suggest that you get in touch with our Mutual Fund Advisor before investing in the best funds.n
Sharekhan Limited, its analyst or dependant(s) of the analyst might be holding or having a postition in the mutual funds mentioned in the article.

EQUITY FUNDAMENTALS EARNINGS GUIDE
Sharekhan Earnings Guide Prices as on March 04, 2020

CMP Sales Net profit EPS (%) EPS PE (x) RoCE (%) RoNW (%) DPS Div
Company
(Rs) FY19 FY20E FY21E FY19 FY20E FY21E FY19 FY20E FY21E growth FY19 FY20E FY21E FY20E FY21E FY20E FY21E Rs. Yld(%)
Automobiles
Apollo Tyres 140 17,548.8 16,981.2 17,776.6 879.7 585.9 821.0 15.4 10.2 14.4 -3% 9.1 13.7 9.7 5.4 6.8 5.6 7.5 3.3 2.3
Ashok Leyland 72 29,055.0 18,998.4 20,201.5 2,040.7 593.3 542.0 7.0 2.0 1.9 -48% 10.4 36.2 38.1 6.6 5.9 7.2 6.7 3.1 4.3
Bajaj Auto 2,712 30,250.0 30,929.3 34,291.7 4,333.2 5,058.0 5,389.1 149.8 174.9 186.3 12% 18.1 15.5 14.6 26.0 25.4 20.5 19.5 60.0 2.2
HERO MOTOCORP 2,046 33,650.5 31,294.2 33,031.4 3,384.9 3,460.8 3,340.6 169.5 173.3 167.3 -1% 12.1 11.8 12.2 29.8 28.1 27.7 21.9 87.0 4.3
M&M 475 52,848.2 48,767.8 50,622.2 5,423.9 4,245.5 3,942.2 43.6 34.1 31.7 -15% 10.9 13.9 15.0 14.4 12.4 11.2 9.8 8.5 1.8
Maruti Suzuki 6,384 86,020.3 79,800.9 81,232.0 7,500.6 6,196.9 7,320.2 248.3 205.1 242.3 -1% 25.7 31.1 26.3 14.7 15.7 12.2 13.0 80.0 1.3
TVS Motor 410 18,209.9 17,179.3 19,608.3 670.1 689.3 748.8 14.1 14.5 15.8 6% 29.1 28.3 25.9 18.9 19.6 18.2 17.5 2.5 0.6
Banks & Financials
Axis Bank 682 21,708.0 24,979.0 28,151.0 4,675.9 7,363.0 9,250.0 18.2 28.6 36.0 41% 37.5 23.9 19.0 - - 10.6 12.1 0.0 0.0
Bajaj Finance 4,286 11,762.0 12,852.0 14,764.0 3,995.0 5,367.9 6,107.0 68.9 89.2 101.5 21% 62.2 48.1 42.2 - - 22.4 23.7 4.0 0.1
Bajaj Finserv 8,800 - - - - - - - - - - - - - - - - - 1.8 0.0
Bank of Baroda 73 18,683.8 25,942.9 28,378.8 433.5 865.7 4,894.8 1.6 3.2 18.3 236% 45.1 22.9 4.0 - - 4.8 5.4 0.0 0.0
Bank of India 48 13,658.0 14,555.0 16,766.0 (5,546.9) 1,151.0 2,525.0 -16.2 3.4 7.4 - - 14.2 6.5 - - 4.5 7.6 0.0 0.0
Federal Bank 83 4,176.4 4,574.9 5,655.6 1,243.9 1,556.2 2,130.8 6.3 8.0 11.0 33% 13.3 10.4 7.6 - - 11.3 14.0 1.0 1.2
HDFC 2,206 11,403.0 12,689.0 14,452.0 9,632.5 12,394.0 12,794.0 55.9 71.7 74.1 15% 39.4 30.8 29.8 - - 12.0 13.0 20.0 0.9
HDFC Bank 1,149 48,243.0 57,079.0 69,780.0 21,069.5 26,123.6 32,767.1 38.7 47.7 59.9 24% 29.7 24.1 19.2 - - 16.5 18.2 13.0 1.1
ICICI Bank 508 27,014.8 30,824.7 36,795.3 2,970.8 9,563.2 16,798.4 4.6 14.9 26.1 138% 110.0 34.1 19.5 - - 8.7 13.9 1.5 0.3
LIC Housing Finance 321 4,349.9 5,334.5 6,580.5 2,431.0 2,675.8 3,325.2 48.1 53.0 65.8 17% 6.7 6.1 4.9 - - 16.2 18.3 6.8 2.1
Max Financial 591 14,575.0 16,476.0 21,470.0 - - - - - - - - - - - - - - 0.0 0.0
Punjab National Bank 44 17,156.0 16,270.0 18,124.0 (9,975.5) 1,214.0 1,891.0 -46.9 5.7 8.9 - - 7.8 5.0 - - 3.4 7.1 0.0 0.0
SBI 285 88,349.0 1,02,605.0 1,17,155.0 862.2 16,200.0 27,787.0 1.0 18.2 31.1 467% 295.3 15.7 9.2 - - 5.1 7.3 0.0 0.0
Union Bank of India 36 10,215.0 11,325.0 13,243.0 (2,887.3) (254.7) 1,190.4 -16.4 -0.7 3.5 - - - 10.4 - - - 3.0 0.0 0.0
Consumer Goods
Britannia 3,063 11,054.7 11,716.0 13,100.5 1,156.4 1,422.8 1,663.2 48.2 59.3 69.3 20% 63.5 51.7 44.2 38.3 37.9 30.4 29.4 15.0 0.5
Emami 250 2,692.9 2,846.3 3,321.1 513.3 598.8 719.4 11.3 13.2 15.9 18% 22.1 18.9 15.8 33.7 40.8 28.0 31.5 4.0 1.6
GSK Consumer 9,502 4,782.0 5,096.4 5,616.8 868.8 1,151.6 1,234.5 206.6 273.8 293.5 19% 46.0 34.7 32.4 33.3 32.8 26.2 24.5 105 1.1
Godrej Consumer Products 632 10,314.3 10,399.6 11,815.4 1,478.5 1,608.3 1,938.1 14.5 15.7 19.0 14% 43.6 40.2 33.3 17.9 20.2 21.2 23.2 3.0 0.5
Hindustan Unilever 2,176 38,224.0 40,651.2 45,561.1 6,199.4 7,431.0 8,732.7 28.7 34.4 40.4 19% 75.8 63.2 53.8 115.3 106.2 91.5 84.3 22.0 1.0
ITC 188 45,784.4 49,460.5 54,841.7 12,386.6 14,998.7 16,382.5 10.1 12.3 13.4 15% 18.6 15.3 14.0 27.5 27.7 24.7 24.5 5.8 3.1
Jyothy Laboratories 123 1,813.6 1,894.5 2,144.7 197.6 206.9 246.8 5.4 5.6 6.7 12% 22.8 21.8 18.3 13.8 14.7 14.9 16.1 3.0 2.4
Marico 295 7,333.8 7,434.1 8,039.5 938.8 1,056.4 1,185.1 7.3 8.2 9.2 12% 40.6 36.0 32.1 40.5 40.0 32.6 31.4 3.8 1.3
Zydus Wellness 1,452 842.8 1,765.4 2,039.1 171.2 125.5 181.7 29.7 21.8 31.5 3% 48.9 66.7 46.1 5.1 6.3 3.7 5.1 5.0 0.3
IT / IT services
HCL Technologies# 563 60,427.0 70,952.0 78,819.8 10,123.0 10,919.0 11,953.4 36.8 40.2 44.1 9% 15.3 14.0 12.8 27.2 27.2 24.8 24.1 8.0 1.4
Infosys 759 82,675.0 91,735.6 1,01,015.6 15,862.0 16,698.4 18,340.2 35.4 39.1 43.1 10% 21.4 19.4 17.6 34.5 38.1 25.9 28.4 21.5 2.8
Persistent Systems 705 3,365.9 3,583.4 3,950.2 351.7 352.8 402.8 44.0 46.0 52.7 9% 16.0 15.3 13.4 19.0 20.0 14.5 15.4 11.0 1.6
Tata Consultancy Services 2,083 1,46,463.0 1,57,647.3 1,73,375.7 31,472.0 32,697.3 35,653.9 83.1 87.1 95.0 7% 25.1 23.9 21.9 39.8 39.8 34.6 34.4 26.0 1.2
Wipro 229 58,906.0 61,053.2 65,795.3 8,984.5 9,815.3 10,399.2 14.9 16.8 18.3 11% 15.4 13.6 12.5 16.4 16.9 17.8 17.2 1.0 0.4
Cap goods / Power
CESC 610 7,754.0 8,015.4 8,790.8 937.0 854.0 1,067.1 70.3 64.1 80.1 7% 8.7 9.5 7.6 7.7 8.7 8.5 9.9 17.5 2.9
Finolex cable 324 3,077.8 3,064.4 3,253.9 344.1 380.1 397.3 22.5 24.9 26.0 7% 14.4 13.0 12.5 19.1 18.4 30.1 28.4 4.5 1.4

EARNINGS GUIDE EQUITY FUNDAMENTALS
CMP Sales Net profit EPS (%) EPS PE (x) RoCE (%) RoNW (%) DPS Div
Company
(Rs) FY19 FY20E FY21E FY19 FY20E FY21E FY19 FY20E FY21E growth FY19 FY20E FY21E FY20E FY21E FY20E FY21E Rs. Yld(%)
Greaves Cotton 130 2,015.3 2,075.8 2,387.1 180.5 163.1 179.0 7.5 7.2 7.7 1% 17.3 18.0 16.8 26.4 27.6 22.2 22.9 5.5 4.2
Kalpataru Power Transmission 329 7,115.1 8,452.9 9,733.9 401.3 510.4 603.4 26.2 34.8 39.3 23% 12.6 9.5 8.4 21.0 21.1 15.2 15.8 3.0 0.9
KEC International 315 11,000.5 12,655.5 14,632.6 486.4 614.7 723.1 18.9 23.9 28.1 22% 16.6 13.2 11.2 24.0 23.3 23.3 23.0 3.4 1.1
Thermax 900 5,973.2 6,110.1 6,747.0 325.4 288.8 388.9 28.9 25.6 34.5 9% 31.1 35.1 26.1 16.0 18.8 10.8 14.9 7.0 0.8
Triveni Turbine 94 840.0 916.9 1,027.2 100.2 119.6 136.7 3.1 3.7 4.2 17% 30.2 25.3 22.1 33.9 30.9 23.2 21.9 0.0 0.0
V-Guard Industries 203 2,566.4 2,761.9 3,129.2 165.5 223.4 264.1 3.9 5.2 6.2 26% 52.2 38.7 32.7 29.5 28.9 22.6 22.3 0.8 0.4
Infra / Real Estate
Larsen & Toubro 1,177 1,41,007.1 1,60,976.6 1,84,099.3 8,610.4 10,456.0 12,074.3 63.4 74.6 86.1 17% 18.6 15.8 13.7 8.6 9.6 15.8 16.6 18.0 1.5
Sadbhav Engineering 65 3,549.2 2,410.2 3,121.8 186.1 96.6 147.6 10.8 5.6 8.6 -11% 6.0 11.5 7.5 5.7 7.1 4.7 6.8 1.0 1.5
Oil & gas
Oil India Ltd 110 13,735.0 12,003.9 11,534.2 3,616.9 2,485.9 2,222.5 33.4 22.9 20.5 -22% 3.3 4.8 5.4 11.1 9.8 8.8 7.6 10.7 9.6
Petronet LNG 245 38,395.4 36,035.6 39,684.7 2,291.4 3,058.2 3,210.2 15.3 20.4 21.4 18% 16.1 12.0 11.5 29.7 32.7 29.7 29.6 10.0 4.1
Reliance Ind 1,340 5,67,135.0 5,89,272.9 6,33,650.7 39,837.0 46,540.5 53,995.1 67.3 78.6 91.2 16% 19.9 17.0 14.7 10.7 11.1 12.1 12.5 6.5 0.5
Pharmaceuticals
Aurobindo Pharma 521 19,563.6 23,731.7 27,471.1 2,513.3 2,762.0 3,309.7 42.9 47.1 56.5 15% 12.1 11.0 9.2 17.0 18.6 18.1 18.2 2.5 0.5
Cadila Healthcare 256 13,165.6 14,210.9 15,491.5 1,801.9 1,550.5 1,636.3 17.6 15.1 16.0 -5% 14.5 16.9 16.0 11.1 11.2 13.5 13.0 3.5 1.4
Cipla 448 16,362.4 17,732.8 19,864.0 1,492.4 1,747.0 2,161.5 18.7 21.7 26.8 20% 23.9 20.6 16.7 12.5 14.5 11.1 12.3 3.0 0.7
Divi's Labs 2,175 4,946.3 5,538.4 6,578.6 1,352.7 1,404.6 1,742.6 51.0 52.9 65.6 13% 42.7 41.1 33.2 22.7 23.6 17.6 18.6 16.0 0.7
IPCA Lab 1,429 3,773.2 4,600.3 5,307.3 442.2 658.2 799.9 35.1 52.2 63.4 34% 40.8 27.4 22.5 20.3 20.8 19.1 19.2 3.0 0.2
Lupin 664 16,718.2 16,321.4 17,078.9 946.5 858.6 1,182.4 20.9 19.0 26.1 12% 31.8 35.0 25.5 6.4 6.5 6.2 7.9 5.0 0.8
Sun Pharmaceutical Industries 405 29,065.9 32,638.5 35,853.4 3,879.8 4,352.4 5,148.9 16.2 18.1 21.5 15% 25.0 22.4 18.9 10.6 11.7 9.6 10.3 2.8 0.7
Torrent Pharma 2,183 7,462.0 8,144.5 8,987.6 793.0 1,022.5 1,308.3 46.6 60.1 77.0 28% 46.8 36.3 28.4 15.6 18.0 19.7 20.9 4.0 0.2
Building Materials
Grasim 690 20,550.4 19,149.5 20,846.3 2,883.3 1,327.9 1,603.0 43.8 20.2 24.4 -25% 15.7 34.2 28.3 2.7 3.2 3.1 3.6 7.0 1.0
Shree Cement 23,256 11,722.0 12,618.1 14,587.3 1,138.7 1,410.8 1,667.6 326.8 391.0 462.2 19% 71.2 59.5 50.3 11.5 12.2 12.4 13.1 60.0 0.3
The Ramco Cements 750 5,146.3 5,536.9 6,275.1 501.0 573.0 680.6 21.3 24.3 28.9 17% 35.3 30.8 26.0 8.3 8.5 12.2 13.0 3.0 0.4
UltraTech Cement 4,173 40,000.8 42,141.2 46,074.2 2,526.3 3,832.6 4,323.1 87.5 132.8 149.8 31% 47.7 31.4 27.9 10.0 10.2 12.9 12.9 11.5 0.3
Discretionary
Arvind* 37 7,142.2 7,694.6 8,350.4 264.8 207.2 254.5 10.3 8.0 9.8 -2% 3.6 4.6 3.7 6.6 7.2 7.3 8.5 2.0 5.5
Century Plyboards (India) 155 2,280.4 2,402.5 2,680.8 166.2 227.6 241.0 7.5 10.2 10.8 20% 20.8 15.2 14.3 17.4 16.8 21.2 18.8 1.0 0.6
Info Edge (India) 2,654 1,098.3 1,311.5 1,549.7 315.1 340.3 437.8 25.8 27.8 35.8 18% 102.7 95.5 74.1 18.6 20.2 13.4 15.0 6.0 0.2
Inox Leisure 381 1,692.0 2,030.0 2,391.0 139.0 135.0 181.0 14.1 13.6 18.4 14% 27.1 28.0 20.7 22.7 15.1 17.8 19.3 1.0 0.3
Relaxo Footwear # 692 2,292.1 2,612.0 3,065.2 175.4 239.4 298.9 7.1 9.7 12.1 30% 97.5 71.7 57.4 28.5 29.3 19.9 21.1 1.8 0.3
Titan Company Limited 1,251 19,778.5 21,793.1 25,456.7 1,519.0 1,626.6 1,976.5 17.1 18.3 22.3 14% 73.3 68.3 56.2 32.6 32.7 24.8 25.4 5.0 0.4
Wonderla Holidays 202 282.0 289.7 320.1 55.4 59.9 68.4 9.8 10.6 12.1 11% 20.6 19.1 16.7 8.9 9.9 7.2 7.9 1.8 0.9
Diversified / Miscellaneous
Bajaj Holdings 3,324 426.7 - - 3,048.8 - - 273.9 - - - 12.1 - - - - - - 32.5 1.0
Bharat Electronics 75 12,164.0 13,214.0 14,536.0 1,886.0 1,920.0 2,040.0 7.7 7.9 8.4 4% 9.7 9.5 8.9 19.5 18.9 19.8 19.1 3.4 4.5
Bharti Airtel 517 80,780.2 86,614.1 99,465.0 (3,977.8) (4,975.6) 1,712.0 -10.0 -9.5 3.3 - - - 154.9 4.2 7.5 - 3.7 2.5 0.5
Gateway Distriparks 125 430.6 1,267.7 1,416.2 84.6 50.3 60.5 7.8 4.6 5.6 -15% 16.1 27.0 22.5 7.1 8.7 3.8 4.6 7.0 5.6
PI Industries 1,576 2,841.0 3,528.0 4,844.0 410.0 529.0 737.0 29.8 38.5 53.6 34% 52.9 40.9 29.4 27.1 30.7 21.0 23.8 4.0 0.3
Ratnamani Metals and Tubes 1,327 2,755.0 2,679.0 3,108.0 253.0 304.0 327.0 54.1 65.0 70.1 14% 24.5 20.4 18.9 21.2 21.7 18.3 16.9 9.0 0.7
Supreme Industries limited 1,236 5,612.0 5,833.0 6,587.0 381.0 510.0 539.0 30.0 40.2 42.4 19% 41.1 30.7 29.1 22.5 22.2 20.5 19.0 13.0 1.1
UPL 512 21,837.0 34,120.0 37,959.0 1,898.0 2,390.0 3,297.0 24.8 31.2 43.1 32% 20.6 16.4 11.9 10.2 13.1 15.7 19.6 5.3 1.0
Note: Grasim- Changed reporting to standalone financial numbers HCL Technologies post 1:1 bonus

Remarks
Automobiles
Apollo Tyres (ATL)  Q3FY2020 operating results were in line with estimates. ATL expects domestic demand (65% of
revenue) to recover in FY2021 due to a pick-up in economic growth and huge infrastructure investments
by the government. Original equipment manufacturer (OEM) sales are also expected to recover
after transition to BS-VI norms and the receding impact of axle load norms. Margins are expected to
improve, driven by soft commodity prices and ramp-up at the Hungary plant (management is targeting
breakeven by FY2022). We upgrade our recommendation to Buy as we rollover our multiple on
FY2022E earnings.
Ashok Leyland  Ashok Leyland Limited (ALL), the second-largest CV manufacturer in India, is a pure play on commercial
vehicles. MHCV industry is expected to be in declining trend over next 3-4 quarters given weak
economic growth and cost increases due to the shift to BS-VI norms. Post transition to BS-VI norms
(in April 2020) and with the industry absorbing excess capacity created due to axle load norms, the
medium & heavy commercial vehicle (MHCV) segment is expected to revive from H2FY2021. Moreover,
with the government announcing various measures to boost the economy (including corporate tax
cut and sector-specific measures), economic growth is expected to gain momentum in the next 3-4
quarters, in turn propelling MHCV demand. We retain Hold rating on the stock.
Bajaj Auto  Bajaj Auto Limited’s (BAL) Q3FY2020 results are ahead of ours as well as the street’s estimates as
the company posted the highest margins in the past seven quarters. BAL is expected to continue
outpacing the industry and plans to launch new products with enhanced features in the domestic
market. BAL has launched the electronic injection system in its entry motorcycles to meet BS-VI
emission norms as against fuel injection launched by competition. As per management, electronic
injection system costs slightly lower than fuel injection and the company can utilise the differential
to provide additional features, leading to market share gains. Moreover, export outlook continues to
remain robust with the company expecting double-digit growth to continue for the next two to three
quarters. We retain our Buy recommendation on the stock.
Hero MotoCorp  Hero MotoCorp Limited’s (Hero) Q3YF2020 results were better than our as well as street estimates
as operating margins surprised positively. The two-wheeler industry’s demand pressures are likely to
sustain in the near term due to steep cost increases on account of transition to BS-VI emission norms
(the industry is likely to see cost increases of 12-15%). Hero expects demand to remain weak in the
next 2-3 quarters and expects sustained recovery to take time. Hero expects the industry to recover
from H2FY2021, driven by improved economic growth and better rabi sowing. We retain our Hold
recommendation on the stock.
M&M  M&M’s Q3FY2020 operating results were in line with estimates. Margins improved on yoy basis
despite a 6% fall in the topline due to cost-control initiatives, a better mix and softening commodity
prices. M&M’s volume trajectory is expected to significantly improve in FY2021. New launches in
the utility vehicle segment and conversion of the entire portfolio to petrol (industry expected to shift
towards petrol post the implementation of BS-VI emission norms) would shore up volumes. Moreover,
with higher rabi sowing, M&M tractor segment is expected to grow by 5% in FY2021. M&M’s volumes
would improve substantially and we expect mid-single digit growth in the next two years as against a
9% drop expected in FY2020. We retain Buy rating on the stock.
Maruti Suzuki  Maruti Suzuki India Limited (MSIL) is India’s largest passenger vehicle (PV) manufacturer. The company
held a strong 51% market share as of FY2019. Q3FY2020 results were lower than ours as well as
consensus estimates. We expect MSIL’s volumes to remain muted for 2-3 quarters, as the company

transitions from BS-IV to BS-VI emission norms. Moreover, the company’s exit from the diesel segment
with the introduction of BS-VI norms would keep volumes subdued. We expect sustained recovery
only from H2FY2021 post transition to BS-VI norms and gradual improvement in the economy and
financing situation. Hence, we retain our Hold rating on the stock.
TVS Motor  TVS Motor (TVSM) is India’s fourth largest two-wheeler manufacturer present in the scooter segment.
The company manufactures mopeds and motorcycles as well. TVSM expects the two-wheeler industry
to recover from H2FY2021, driven by robust rural sentiments due to higher rabi sowing, improving
economic growth and liquidity situation. Moreover, margin improvement is expected to sustain given
the company’s focus to improve localisation further and control costs. We expect margin improvement
to sustain and expect TVSM earnings to grow in double digits from FY2021 as against a flat profit
expected in FY2018-FY2020. We rollover our price target on FY2022 earnings and upgrade our
recommendation to Hold from Reduce earlier.
Banks & Financials
Axis Bank  Axis Bank is the third-largest private sector bank, which is growing faster than the industry and
has a well- diversified loan book with strengths in both retail and corporate segments. The bank’s
liability profile has improved significantly, which would help sustain margins at healthy levels. Of late,
asset quality is improving, which we believe is positive for its profitability and growth, going forward.
Business restructuring along with drivers such as normalisation of corporate fee income and growth
from retail and midmarket groups are steps in the right direction, which will augment sustainability
and profitability. The bank may explore opportunities in the insurance business, as the new leadership
settles down. The bank has a strong market position across most digital payment products.
Bajaj Finance  Bajaj Finance, owned by Bajaj Finserv, is a fast-growing, well-diversified leading NBFC. The company
has its assets spread across products, viz. loans for consumer durables, two-wheelers and three-
wheelers, loans to small and medium enterprises (SME), mortgage loans and commercial loans. The
company’s strong loan growth, asset quality and provisioning, sets Bajaj Finance’s performance
among the best in the system. Given the strong growth rate, high margins and attractive return ratios,
its premium valuations within the NBFC space are expected to be maintained.
Bajaj Finserv  Bajaj Finserv is a financial conglomerate with subsidiaries in the financing business, life insurance and
general insurance segments. We expect its subsidiary, BFL, to maintain its loan book trajectory as well
as profitability and margins, which will be the key support for present valuations of Bajaj Finserv. Bajaj
Allianz General Insurance Company (BAGIC) is expected to continue its healthy operating metrics
and profitability going ahead. BALIC is focusing well on strengthening its distribution channel and
protection business, but profitability will depend on the pace and segment of new business growth.
Bank of Baroda  Bank of Baroda has over 9,400 branches across India and abroad, along with a diversified products
and services portfolio and strong client relationships. Business growth as well as profitability and
asset-quality improvement is gradual but in the desired direction. Two other PSU banks have been
merged with Bank of Baroda. Notwithstanding the synergies that will accrue over the long run, we
believe near-term challenges in terms of asset quality and integration issues of the merged entity may
mute medium-term performance.
Bank of India  Bank of India (BOI), established in 1906, is one of the largest PSU banks in the country. The bank,
headquartered in Mumbai, has a strong presence in Western and Eastern regions of India. The bank
has over 5,100 branches and 5,800 ATMs across India. The government holds a stake of ~89% in the
bank. Operating performance and earnings have been affected by a sharp rise in NPAs. However,
going forward, credit traction is expected to start gradually as the bank has exited the prompt corrective

action (PCA) framework. As several segments are undergoing stress and weak credit demand, we
expect credit growth and margins for BOI are likely to be muted for the medium term.
Federal Bank  Federal Bank is among the better-performing old private-sector banks in India with a strong presence
in South India, especially Kerala. We believe the bank’s growth is in the desirable direction and the
accompanying vectors indicate sustainability and quality of the bank. We believe incremental loans
to better-rated borrowers, lesser addition to the stressed asset pool, and high provision coverage are
positives, but asset-quality performance will continue to be a key monitorable for the medium term.
HDFC  HDFC Limited is among the top-performing housing finance companies in the country having deep
roots in the retail segment. Despite the general slowdown in credit growth, HDFC continues to report
strong growth in advances with stable margins. Aided by a strong business franchise, best-in-class
credit ratings and impeccable asset quality, HDFC is a safe bet with a scope for steady business
growth-led value creation.
HDFC Bank  HDFC Bank is among the top performing banks with deep roots in the retail segment. Despite the
general slowdown in credit growth, the bank continues to report strong growth in advances from retail
products. Relatively high margins (as compared to peers), a strong branch network and better asset
quality make HDFC Bank a safe bet with a scope for expansion in its valuations.
ICICI Bank  ICICI Bank is India’s largest private sector bank with over 5,200 branches. The bank has made inroads
in to retail loans and has significantly improved its liability franchise. We believe that its NPA cycle is
peaking and uncertainty regarding top leadership behind, along with strong capital adequacy and a
wide branch network and business will gather pace in the long run. The bank has shown improvement
in key operating parameters and has a better asset-quality outlook. The bank appears to be well-
positioned to benefit from a reduction in competitive intensity from NBFCs, and political stability is
expected to gather pace in reforms such as IBC, which will be positive for recoveries/resolutions and
credit demand revival.
LIC Housing  LIC Housing Finance is one of the largest mortgage financiers in India and is promoted by Life
Insurance Corporation of India. With over 282 marketing offices, the company has one of the
strongest distribution networks to support business expansion. Though factors such as rising interest
rates and a strong parent bode well for the NBFC, we believe increasing competitive pressures may
keep NIM range-bound in the near to medium term. A soft scenario in the builder loan segment and
deterioration in the asset quality warrants caution. Recoveries in retail and developer book and loan
growth momentum in the next few quarters would be key monitorables.
Max Financial Services  Max Life Insurance is owned by Max Financial Services (MFS) and is among the leading private sector
insurers that has gained critical mass and enjoys the best operating parameters in the industry. MFS
is effectively building an attractive insurance franchise characterised by a multi-channel distribution
network built upon a conservatively underwritten insurance business. Management has reiterated
its strategic guidance of more than a 25% growth in VNB, ~25% VNB margin and ~25% ROEVs by
FY2022. The strategy to achieve a balanced product mix and focus on non-par savings with the
protection segment will be margin-accretive.
PNB  Punjab National Bank (PNB) has strong liability mixes in the banking space, with low-cost deposits
constituting over 40% of its total deposits. PNB has done a significant amount of business and process
enhancement/upgradation to mitigate operational and credit risks after the fraud, yet asset-quality
performance has been subdued. Further development in resolution/recovery of NCLT exposures as
well stress in the SME segment warrant a cautious approach. Risks of chunky slippages/haircuts are
present in the near term.

SBI  State Bank of India (SBI) is India’s largest bank. The successful merger of associate banks and value
unlocking from the insurance business could provide further upside for the bank. While the bank is
favourably placed in terms of liability base and the operating profit is better than peers, asset quality
is also improving aided by strong resolution/recoveries. SBI is well capitalised (Tier-1 at 11.6% and
CET-1 at 10.18%) and, coupled with an enviable reach and business strength, we believe SBI is a strong
business franchise, which is well placed to gain market share as well as quality clients in the medium
to long term. SBI’s status as the market maker in terms of domestic interest rates places it at an
advantage to other PSU bank peers, providing a cushion to margins.
Union Bank of India  Union Bank of India has a strong branch network and an all-India presence. The bank’s asset-quality
challenges have come to the fore (mainly from the corporate portfolio), whereas weak capital position
remains an area of concern. An increase in credit cost guidance indicates a wobbly asset-quality
outlook for Union Bank of India largely as stressed exposures of the bank continue to be a dampener.
Other concerns pertaining to growth, provisions, impact of taxation going ahead, etc. also add up to
dim the overall outlook.
Yes Bank  Yes Bank started its operations in November 2004. In the backdrop of rating downgrades as well as
concerns on book quality, we believe raising equity capital for the bank becomes difficult once again.
We believe operating performance has deteriorated and there is a risk of further negative surprises
in asset quality. While the capital raise may be perceived as a succor, we believe that a large stressed
pool, threshold capital position etc. continue to pose risk. Moreover, the pricing and the resultant
dilution are not clear. Upward revision in stressed exposure and credit costs raises concerns.
Consumer Goods
Britannia  Britannia is one of the largest domestic biscuit and snacking companies (it gained top position
in domestic biscuit market, beating Parle) with a turnover of over Rs. 10,000 crore. Under a new
leadership, the company has been able to leverage and monetise its strong brand and premium
positioning in the biscuits and snacks segments (achieved volume growth of 2% in Q3FY2020). A
recovery in the volume growth to 5-7% is expected in H1FY2021 on the back of overall improvement in
rural demand, which is expected to recover on account of a better rabi season. Sustained innovation
in the product portfolio, expanding distribution reach, entry into newer categories and focus on cost
efficiency will help the company maintain steady earnings growth in the medium term.
Emami  Emami is one of the largest players in the domestic FMCG market with a strong presence in
underpenetrated categories such as cooling oil, antiseptic creams, balm and men’s fairness creams.
The initiatives behind key brands (such as Kesh King and Boroplus) have started giving positive results
for the company with brands such as Kesh King hair oil, Navratna and 7-oils-in-1 delivering double-
digit revenue growth in Q3FY2020. The management expects volume growth to recover to 8-10%
if the summers begin on time. Most brands from the power portfolio (including Kesh King hair oil &
Zandu Pancharishta) have started showing recovery in performance post the succession of strategic
initiatives undertaken in the past. We should expect the business to normalise by Q1FY2021. Further,
benign input prices would help maintain operating margins at about 28%. We expect a revival to take
some time and maintain our Hold recommendation on the stock.
GSK Consumer  GSK Consumer Healthcare is a leading player in the malted food drinks (MFD) segment with a ~70%
share in the domestic market. We expect volume growth to sustain at 3-5% in the coming quarters
as allied products and new launches are gaining good traction in the domestic market. In December,
2018, GSK Plc exited the Indian nutrition business and sold 100% stake in GSK Consumer to HUL in an
all-equity deal valued at Rs. 31,700 crore (share exchange ratio is 4.39 shares of HUL for every share
of GSK Consumer). Approval has been received from both the Mumbai and the Chandigarh bench of
the National Company Law Tribunal (NCLT) and the integration will be completed by end of FY2020.

The company’s business fundamentals have improved, which will result in better performance in the
coming quarters. We maintain our Hold recommendation on the stock.
GCPL  Godrej Consumer Products Limited (GCPL) is a major player in the personal wash, hair colour and
household insecticide market segments in India. GCPL registered soft operating performance in
Q3FY2020 affected by price-offs in the domestic market and volatile currency in the international
markets. Volume growth was sustained at 7% whereas the household insecticides (HI) segment posted
recovery in performance with mid-single-digit volume growth. The company continues to witness
market share in the domestic soap and HI categories due to relevant price and consumer offers. On
the international front, Indonesia continued to perform well. However, volatile currency will continue
to affect margins. The receding of concerns hovering around domestic HI business (receding threat
of illegal incense sticks) and international geographies performing well gives us improved earnings
visibility in the near term. Hence, we maintain our Buy rating on the stock.
HUL  Hindustan Unilever Limited (HUL) is India’s largest fast-moving consumer goods (FMCG) company.
HUL reported decent operating performance with 5% volume growth in Q3FY2020 in the backdrop
of tough demand. Rural demand remains sluggish and we expect volume growth to be at 5-6% in the
near term and expect it to improve gradually with better demand. This would result in decent revenue
growth in the coming quarters. With input prices (including that of palm oil) going up, operating profit
margin (OPM) expansion would be limited and will largely be driven by efficiencies. However, volatility
in crude oil prices will play a key role in determining profitability in the coming quarters. Further,
the recent acquisition of GSK Consumers’ domestic health food business will scale up HUL’s food
business and will help it grow in double digits in the near to medium term. HUL remains one of our top
picks in the FMCG space
ITC  Sales volume growth for the cigarette business stood at just 2% in Q3FY2020. The government has
increased tax rate of cigarettes in the Union Budget which will put stress on cigarette sales and
volumes in the near term. Revenue of the non-cigarette FMCG business is expected to grow in high-
single digits to low double digits in the near term as the slowdown in demand is likely to persist in
the near term. However, a higher scale will support the business’ overall margins in the medium term.
We expect the company’s hotels business to also deliver strong performance FY2020, with demand
for rooms likely to exceed room supply supported by reduction in GST rate on hotels. The paper,
paperboard and packaging (PPP) business will continue to post higher profitability on account of a
better revenue mix and benign input cost. However, the stress on the core cigarette business would
result in moderate earnings growth in the near to medium term. Thus, in view of near-term headwinds,
we have downgraded our rating on the stock to Hold.
Jyothy Labs  Jyothy Laboratories Limited (JLL) is the market leader in the fabric whitener segment in India. With a
strong brand portfolio in the fabric care and dishwashing space, JLL is well poised to achieve revenue
growth in mid-teens in the near to medium term. The key highlight of the Q3FY2020 was that the
household insecticide (HI) segment recovered by registering a 5% volume growth. If the HI segment
maintains the positive growth momentum, the management is confident of achieving 4-5% revenue
growth in Q4FY2020. The company expects OPM to sustain at 16% in FY2020. We have a Hold
Marico  Marico is among India’s leading FMCG companies. Core brands such as Parachute and Saffola have
a strong foothold in the market. The company’s Q3FY2020 performance was affected by a sustained
slowdown in domestic demand. This was because of a sharp fall in sales of categories such as
value-added hair oils (VAHO) as consumers shifted to lower-end of the product portfolio, while some
consumers shifted to unbranded products. The company is going to invest in low-cost products in the
value-added hair oil (VAHO) segment to drive growth going ahead. The management expects volume

growth to recover in another 2-3 quarters. Copra prices (35-40% of Marico’s raw-material cost) are
down and the softening price trend would aid margins to remain high on a y-o-y basis in the near to
medium term. We maintain our Buy recommendation on the stock.
Zydus Wellness  Zydus Wellness now has a product portfolio of brands such as EverYuth, Nutralite and Sugar Free
along with Glucon D and Complan post the acquisition of Heinz India. Zydus Wellness has a strong
portfolio of leading brands, which are largely placed in low-penetrated categories. The company
posted subdued performance in Q3FY2020; however, it maintained its leadership positions in most
key categories. The company is working on cost synergies through the merger and expects a saving
of Rs. 40 crore in 2-3 years. However, due to lack of clarity on the seasonality of the Heinz portfolio
over the next two quarters, we would not like to change our stance on the stock. We have a Hold
rating on the stock.
IT/IT services
HCL Tech  HCL Technologies has a leadership position in infrastructure management services (IMS) and
engineering and research & development (ERD) space. Management has tightened its revenue growth
guidance to 16.5-17% for FY2020E, implying 0.3-2% revenue growth in Q4FY2020. The company
has increased EBIT margin guidance for FY2020E to 19-19.5% from 18.5-19.5% earlier. Qualified deal
pipeline is at an all-time high for HCL Tech, which provides hope of higher conversion into deals in
Q4FY2020. Strong performance during the first nine months of FY2020 along with large addressable
opportunity in information management systems (IMS) provides visibility of industry-leading organic
revenue among large peers in FY2020E.
Infosys  Infosys is India’s premier IT and ITeS company that provides business consulting, technology,
engineering and outsourcing services. The company expects its Pentagon agile digital service
architecture to help to address the client’s digital requirements. The management has raised revenue
growth guidance to 10-10.5% in CC from 9-10% earlier, implies flat revenues to 1.5% growth for Q4FY20.
With robust TCV signings, a healthy deal pipeline and integrated offerings, we believe Infosys would
comfortably achieve its revenue growth guidance. Infosys has retained EBIT margin guidance band to
21-23% for FY2020E. The clean chit to both CEO and CFO in whistleblower issue allays the concerns
and removes overhang on the stock.
Persistent  Persistent Systems has proven expertise and a strong presence in newer technologies, strength to
improve its IP base and a decent margin profile, all of which set it apart from other mid-cap IT companies.
PSL is focusing on the development of Internet of Things (IoT) products and platforms, as it sees a
significant traction from industrial machinery, SmartCity, healthcare and smart agriculture verticals.
With the strong growth in the BFSI vertical (6.2% CQGR in the last four quarters), we expect that the
revenue growth would accelerate in FY2021E on the back of higher deal wins with increasing TCVs,
healthy deal pipelines, top accounts mining, new service offerings across the verticals and addition of
new logos. Reasonable valuation and high cash & cash equivalents (25% of market capitalisation) offer
us comfort on the stock.
TCS  Tata Consultancy Services (TCS) is among the pioneers in the IT services outsourcing businesses
in India and is the largest IT services firm in the country. TCS has managed the cost structure well
during Q3FY2020, resulting in 100 bps q-o-q increase in EBIT margins. The management hopes EBIT
margins would improve gradually/ remain in a narrow band with an upward bias in the coming quarters
on account of pyramid rationalisation (adjusting variable pay), improving utilisation and control on
subcontracting expenses. With integrated offering, leadership across markets, digital competencies
and new market expansion opportunities, TCS is expected to continue to gain market share.

Wipro  Wipro is among the top five IT companies in India. The management has guided revenue growth
guidance of 0%- 2% for Q4FY2020E, in line with our expectation. We expect revenue growth in
FY2020E could be lower than underlying revenue growth of FY2019 owing to its high exposure to the
impacted segments of financial services, viz. capital markets and European banks. With inconsistent
execution along with macro uncertainties, underperformance on revenue growth among large peers
will likely continue.
Capital Goods/Power
CESC  CESC, an RP-Sanjiv Goenka Group company, is a fully integrated power utility company. The company
has stable earnings contribution from standalone operations with regulated power generation and
distribution businesses getting assured RoE of 15.5% on generation assets and 16.5% for distribution
assets. Reducing loss at Dhariwal Infrastructure and Rajasthan distribution franchisee makes CESC an
attractive investment proposition.
Finolex Cables  Finolex Cables, a leading manufacturer of power and communications cables, is set to benefit from
improving demand for cables, its core business. The company is leveraging its brand strength to build
a high-margin consumer product business, although scaling up the business would be gradual. The
company faces near-term headwinds due to slowdown in construction activity affecting its electrical
division, while funding crunch in the telecom industry is expected to affect optical fibre cable revenue,
affecting its communication cable segment. Further, increased advertising spends in consumer
durables are expected to limit its profitability in the FMEG space. We have a Hold rating on the stock
due to near-term challenges in its key business verticals.
Greaves Cotton  Greaves Cotton Limited (GCL) is a mid-size and well-diversified engineering company. Core
competencies of the company are in diesel/petrol engines, power gensets, agro engines and pump
sets (engine segment). GCL’s Q3FY2020 results were better than estimates as operating margins
surprised positively. Going ahead, we expect volume pressure to sustain as diesel three-wheelers
engines are expected to fall in FY21 due to steep cost increases (about 40-45% cost increase expected)
on account of implementation of BS-VI emission norms. We expect share of diesel three-wheelers to
fall further in post BS-VI era. Drop in diesel three-wheelers volumes would offset a strong growth in
electric scooters and in the aftermarket segment. We expect overall volumes to be flattish in FY21. We
retain our Hold rating on the stock.
Kalpataru Power  Kalpataru Power Transmission (KPTL) is a leading EPC player in the power transmission and distribution
space in India. Opportunities in this space are likely to grow significantly, thereby providing healthy
growth visibility. Management trimmed its revenue growth guidance to 18-20% for FY2020 versus a
guidance of more than 20% y-o-y earlier along with stable OPM of 10.5-11% for FY2020. We maintain
our Buy rating on KPTL fine tuning the estimates for FY20-21 and have also rolled forward our valuation
multiple to FY2022E standalone earnings and revised valuation on JMC Projects.
KEC  KEC International is a Global Power Transmission Infrastructure EPC major. The company is present
in the T&D, cables, railways, water, renewable (solar energy) and civil works verticals. Globally, the
company has powered infrastructure development in more than 61 countries. KEC is a leader in power
transmission EPC projects and has more than seven decades of experience. Over the years, it has
grown through the organic as well as inorganic route. Order book remains strong, providing two-year
revenue visibility; and order inflow visibility remains healthy in international T&D and railways. We
retain our Positive outlook on the stock.

Thermax  The energy and environment businesses of Thermax are direct beneficiaries of the continuous rise
in India Inc’s capex. The company’s declining order book remains a concern, which is currently at
Rs. 5,439 crore order backlog (0.8x TTM revenue; down 17% y-o-y). Weak international order inflows
and limited visibility for big ticket- size domestic orders led to management’s reiteration for similar
order inflows in FY2020 as seen in FY2019. Lower carry-forward order book along with lower
capacity utilisation in most core user industries is likely to impact order inflows at least for FY2020.
Management expects better ordering both in its energy and environment segments as the enquiries
pipeline remains positive in domestic as well as international markets in FY2021. We maintain our Hold
rating on the stock.
Triveni Turbines  Triveni Turbines Limited (TTL) is a market leader in 0-30 MW steam turbine segment. TTL order
book came lower at Rs. 694 crore amounting to ~0.8x of its TTM consolidated revenue. Although
management is confident of better performance ahead and stable margins, we have conservatively
built these in our estimates. Exports order booking declined in 9MFY2020; although domestically,
the company was able to book higher orders. Enquiry pipeline remained healthy, although fructifying
of the same remains to be seen in a weak macro environment. Conversion of exports opportunity
remains a key monitorable going ahead. Factoring near-term uncertainties in terms of execution and
order inflow we have lowered our valuation multiple and have rolled forward it to FY2022E earnings.
We maintain our Hold rating on the stock.
V-Guard  V-Guard Industries is an established brand in the electrical and household goods space, particularly
in South India. Over the years, the company has successfully ramped up its operations and network
to become a multi- product company. The company is currently facing near term headwinds like
weak demand, increased competitive intensity and possible scarcity of key components from China.
However, the increasing contribution from non-South region, launch of new products and increasing
penetration in tier II & III cities is expected to revive the company’s double digit revenue growth
trajectory in the medium term. A strong cash position may lead to inorganic expansion at favourable
valuations, considering weak environment. We have fine tuned our estimates for FY2020-FY2021
and have introduced FY2022E estimate. Factoring in near-term weak demand, we have lowered our
valuation multiple and have also rolled forward it to FY2022E earnings. We continue to maintain Buy
as we expect strong net earnings growth driven by OPM expansion owing to muted demand in the
near term.
Infrastructure/Real Estate
L&T  Larsen & Toubro (L&T), being the largest engineering and construction company in India, is a direct
beneficiary of the domestic infrastructure capex cycle. The government’s thrust on infrastructure
investment to remain and expect revival in project tendering. The company is expected to perform
well, backed by its sound execution track record and healthy order book. Measures planned by the
company to improve its return ratios augur well. Hence, we remain Positive on the stock.
Sadbhav Engineering (SEL)  SEL is engaged in 1) EPC business for transport, mining and irrigation sectors and 2) development
of roads and highways on BOT basis through SIPL. SEL has a healthy order book of Rs. 8,726 crore
(3x its TTM standalone revenue). The company has robust in-house integrated execution capabilities
with qualified human resource and owned equipment. We expect SEL to benefit from better order
execution, enhanced order inflows (particularly from the transport segment) and resolution of working
capital issues, resulting in a sturdier balance sheet. Further, the improving outlook for the Indian road
sector and limited competitive intensity augur well for SEL since it is present in both the asset creation
and EPC verticals.

Oil & Gas
Oil India  Oil India has several hydrocarbon discoveries across reserves in Rajasthan and the northeastern
regions of India. The company holds domestic 2P (proved and probable) reserves of 76 mmt for oil
and 130 bcm for gas. Reserve- replacement ratio of the company is also healthy. The stock offers a
high dividend yield.
Petronet LNG  Petronet LNG is the largest LNG re-gasifier in India with 17.5 mmt LNG terminal at Dahej and 5 mmt LNG
terminal at Kochi. The company’s Dahej terminal enjoys a competitive edge compared to other LNG
import terminals given its low tariff and long-term contracted volume with use or pay clause. We expect
the Dahej terminal to operate at 100% utilisation, given its competitive edge, while Kochi terminal
utilisation is expected to improve with resolution of pipeline connectivity issues in southern India.
Petronet LNG would be the key beneficiary of rising share of LNG in India’s overall gas consumption.
Reliance Industries  Reliance Industries has one of the largest and complex refining businesses in India and enjoys a
substantially higher refining margin over the benchmark Singapore Complex gross refining margins
(GRM). We expect GRM to recover with ramp-up of petcoke gasification project and implementation
of revised IMO regulations. Large investment in Reliance Jio could add value in the long term.
Deleveraging of consolidated balance sheet and likely value unlocking from retail and digital platform
businesses are key triggers in the near to medium term.
Pharmaceuticals
Aurobindo Pharma  Aurobindo’s Q3FY2020 results were in line with our estimates. Aurobindo is witnessing higher USFDA
scrutiny over the past six to nine months, pointing at elevated regulatory risks. More than 50% of the
company’s fillings are from impacted plants; hence, resolution of USFDA issues is a key parameter to
watch for, as revenue from the US hold a 50% share in the total pie. The management is confident of
submitting the responses in a timely manner and re-inspection of the plants is likely to happen in the
near term. We believe the uncertainty related to regulatory hurdles at various units will weigh on the
stock performance (until they are resolved successfully). We maintain our Hold rating on the stock.
Cadila  Cadila’s Q3FY2020 results were weak. Cadila’s India and US businesses are well placed to capitalise
on growth opportunities. Management has guided for healthy growth in the both the Indian as well as
US business. Further, following a warning letter to Moraiya plant, the company has stopped production
and has initiated a site transfer, which is expected to be completed by FY2020. We expect the
regulatory issues at Moraiya plant to overweigh on the stock until completely resolved. We retain our
Hold recommendation on the stock.
Cipla  Cipla reported a muted results for Q3FY2020. Cipla’s domestic business is on a strong footing and
is a key growth driver. The management’s effort to merge the three businesses (prescription, trade
generics and consumer health) is expected to yield synergies, which augur well for the company. New
launches lined up by the company in the US in the near to medium term would boost revenues. Also,
the management is working closely with the USFDA to resolve issues at its Goa plant (OAI indicated
by the US FDA) and seems confident of a resolution. We retain our Buy recommendation on the stock.
Divis Labs  Q3FY2020 was a soft quarter for Divis Laboratories. The management has maintained its revenue
growth guidance of 10% for FY2020, despite a slow topline growth in the previous two quarters. This
points at a likely sturdy revenue growth for Q4FY2020. Further, the recent outbreak of Corona virus
in China has resulted in a hunt for an alternative sourcing base and global players are looking at India
for the same. This augurs well for API focused companies like Divis. With partial commencement of
the backward integration project, gross margins have improved sequentially and are expected to rise

further. We believe Divis could benefit from its focus on completing backward integration and a large
capex project, as well as from a supply disruption in China. We retain our Buy recommendation on the
stock.
IPCA Lab  IPCA reported impressive results for Q3FY2020. Numbers were ahead of estimates, aided by strong
double- digit growth across the formulations and API businesses. Traction across the formulation and
API business, improved product mix and a substantial drop in the remedial cost are expected to be the
key earnings drivers. We expect IPCA’s sales and profit to report CAGR of 16% and 20%, respectively,
over FY2020-FY2022. Further, a successful inspection outcome from the USFDA would be a key
trigger for earnings upgrades. We retain our Buy recommendation on the stock.
Lupin  Lupin’s Q3FY2020 results were weak and missed estimates. Going ahead, regulatory hurdles –
observations, Warning letters, OAI status are likely to be the key dampeners. This would lead to delay
in new approvals and further intensify pressure on the US business, which is already facing tough
competition in Metformin and base business. Lack of significant launches would further elevate issues.
Owing to lack of clarity and uncertainty of timeline as well as the outcome of the USFDA regulatory
issues, we maintain our Reduce rating on the stock.
Sun Pharma  Sun Pharma’s Q3FY2020 results were in line with expectations. Sun Pharma is confronting issues
in the US pertaining to price erosion. This coupled with higher specialty promotional spends and
increased R&D spends, are likely to moderate the earnings growth and we expect FY2020 to reflect
full impact of increased costs (on account of specialty pipeline build-up). Further the US business is
languishing due to the lack of new product launches. Going ahead we expect the headwinds and
overhang to stay and hence despite reasonable valuations we don’t have a constructive view on Sun
Pharma. We maintain our Hold recommendation on the stock.
Torrent Pharma  Torrent Pharma reported muted results for Q3FY2020. Torrent’s three plants – Indrad, Dahej and US
(Levittown - Pennsylvania) have been under USFDA regulatory issues with a warning letter issued
to all the three plants. As a result of this, new product approvals from all the three plants have been
withheld. Off the three plants, the Dahej plant is a critical one for Torrent as it has several new product
fillings coming from this unit. The management expects the re-inspection at Dahej plant to happen
in mid of CY2020, while the other two plants would have a re-inspection by end of CY2020. We feel
this event is likely to remain as an overhang until successfully closed/resolved. We maintain our Hold
Building Materials
Grasim  Grasim has been underperforming due to its exposure in Vodafone Idea with 11.55% stake. Vodafone
Idea’s highly leveraged balance sheet, weak telecom outlook and delay in monetisation of assets may
lead to further capital infusion by FY2021 from its stakeholders, including Grasim, to retain its stake.
This is expected to lead to erosion in liquid investments or higher leverage at Grasim standalone.
Further, weak macro environment is expected to lead to underperformance of ABCL (56% Grasim
stake) in the near term. Hence, UltraTech remains a safe bet, which comprises major value of Grasim’s
sum-of-the-parts (SOTP) valuation. We believe investors can directly have exposure in UltraTech, which
has no overhangs and a better earnings growth outlook over the next two years. Hence, we have a
Hold rating on Grasim.
Shree Cement  The expansion plan of Shree Cement to reach 60 mtpa over four years (currently 40 mtpa) and
increasing geographical footprint in the eastern and southern regions are likely to aid better volume
growth going ahead. The company’s focus to increase share of trade sales should help improve
realisation. Shree Cement is expected to benefit from favourable demand and pricing outlook,

especially in its North Indian operations. Further, the company’s continuous capacity expansion plans
and muted opex would bring incremental volume growth with better profitability going ahead.
The Ramco Cements  The Ramco Cements, one of the most cost-efficient cement producers in India, will benefit from capacity
addition carried out ahead of its peers in the southern region. Ramco Cements has embarked upon
capital expenditure plan of Rs. 3,430 crore to reach cement capacity of 20 million tonnes per annum
(MTPA) by 2020 end. The expansion aims to strengthen reach in Andhra Pradesh, West Bengal and
North Eastern states. The company has reaped the benefits through cost-saving measures, besides
constantly reducing debt, which has led to improved profitability. In a nutshell, better volumes, cost
efficiencies and reducing leverage have yielded benefits.
UltraTech Cement  UltraTech Cement is India’s largest cement company. We expect UltraTech to report industry-leading
volume growth on account of timely capacity expansion (acquisition of Jaypee Group’s cement assets,
Century’s assets and Binani Cement’s assets) and likely revival in demand (with the start of affordable
housing projects and enhanced spending on infrastructure development).
Discretionary Consumption
Arvind  Arvind demerged into three separate entities of Arvind (textile business), Arvind Fashion (branded
and retail business) and Anup Engineering (engineering business) with an aim to unlock value for
shareholders. Post the demerger, Arvind becomes a textile hub present in segments such as denim,
fabric, garments and advanced material (AMD). Arvind posted good operating performance in
Q3FY2020 clocking a healthy growth in the textiles and advanced materials business (AMD) and
strong growth of 40% in garment volumes. Though gross margin was significantly down, operating
efficiencies led to OPM expansion. The scaling-up of garmenting operations through excessive
capacity and reduction in cotton prices would help textiles business margins improve in the coming
quarters. AMD would maintain its strong double-digit growth trajectory due to better demand. The
management has guided for 8-9% revenue growth in FY2020 and OPM to sustain at 10% (in line with
last fiscal). We maintain our Buy rating on the stock.
Century Plyboards  Century Plyboards is a leading player in the organised plywood industry with a market share of 25%.
The company also has laminate, particle board and medium-density fibreboard (MDF) division having
a capacity of 600 cubic metres per day. As MDF and particle-board segments are running at optimum
capacities, the management is de-bottlenecking the units for growth. The benefits of GST are expected
to accrue at a slower pace as unorganised sector continues to benefit from loopholes leading to a
price differential of 35% that is still existent. We believe that the slow pace of plywood growth, capacity
limitation in MDF and particle-board and industry oversupply in laminates is expected to slow down
the pace of revenue growth for the company over the next two years. Hence, we have a Hold rating
on the stock due to lack of near-term triggers and fair valuation.
Info Edge (India)  Info Edge is India’s premier online classified company in the recruitment, matrimony, real estate,
education and related service sectors. Naukri.com is a quality play and is directly related to GDP
growth and internet/mobile penetration. Management highlighted that accelerated investments in its
core businesses will continue to gain market share along with acquiring more customers. Further,
its investee companies, particularly Zomato and PolicyBazaar, have been progressing well in their
respective businesses. We continue to derive comfort on Info Edge’s business strength, with leading
market share in key businesses.
Inox Leisure  Inox Leisure Limited (ILL), incorporated in 1999, is one of the largest multiplex operators in India. ILL
currently operates 146 properties (614 screens and over 1.42 lakh seats) located in 68 cities across the
country. ILL is the only multiplex operator having such a diverse presence across India. The company

accounts for 20% share of multiplex screens in India and ~11% share of domestic box office collections.
The ILL mega show is supported by improving content quality in the Indian mainstream and regional
cinema, with its movies regularly hitting the Rs. 100 crore or Rs. 200 crore box-office collection mark.
Though the seasonal factor is no more applicable, however Q4FY2020E performance is expected to
remain muted owing to weak content in most part of the quarter coupled with one-time non cash hit
on the taxation front. We have reworked our estimates for FY2020E to factor in the expectation of
soft Q4 performance coupled with adoption of lower tax regime from Q4FY2020E; hence numbers
for FY2021E and FY2022E are adjusted for taxation accordingly. Screen additions set to accelerate in
2021E (80 screens as compared to expectation of 70 screen addition during FY2020E). We maintain
our Buy rating on INOX Leisure Limited (ILL) as we expect the company to post a revenue and earnings
CAGR of 18.5% and 16.5% over FY2019-2022E.
Relaxo Footwear  Relaxo Footwear (Relaxo) is present in the fast-growing footwear category, where it caters to customers
with its four top-of-the-mind recall brands, such as Hawaii, Sparx, Flite and Schoolmate. Relaxo’s focus
is on driving sales through distribution expansion (COCO and franchisee stores) and improving the
brand presence. GST implementation has been a silver lining for the company, as it is witnessing a
gradual shift of demand from the unorganised to organised market. The company is expected to
enhance its current capacity, which will add to revenue growth. Input cost pressure is likely to soften
going ahead, with OPM expected to sustain at 16.5% in FY2020. Recent hike in customs duty on
footwear in the Union Budget FY2020 will augur well for Relaxo in near to medium term. Further, focus
on strong distribution enhancement (especially in South India) and expected high growth in premium
categories (due to reduction in GST rate) make Relaxo one of our preferred picks in the discretionary
consumption space.
Titan Company  Titan is India’s largest specialty retail player, operating more than 1,600 stores spread across over 2
million sq. ft. in 279 towns having businesses in jewellery, watches and eyewear. Revenue of Titan’s
jewellery business reported a CAGR of 23% over FY2016-FY2019. Sustained launch of new collection,
expansion in domestic footprint, shift of consumers to trusted brands and strong growth in diamond
jewellery remain the key pillars of growth. The target is to achieve 2.5x sales and grab market share
of 10% by FY2023. In the eyewear business, Titan’s focus is to build a strong customer base through a
calibrated expansion plan and offer products at affordable prices. An increase in scale of the watches
and eyewear businesses along with expansion into tier II and tier III markets and continuous shift
from non-branded to branded jewellery players is expected to drive up margin going ahead. With
a lean balance sheet and strong financial background, Titan is one of the best retail plays amongst
peers. Titan is well placed to achieve double-digit revenue and earnings CAGR of 15.6% and 17.2%,
respectively, during FY2019-FY2022.
Wonderla Holidays  Wonderla Holidays Limited (WHL) is the largest amusement park company in India with over a decade
of successful and profitable operations. Q3FY2020 performance was affected by a slowdown in the
discretionary environment, which dragged down footfalls by ~5%.WHL added two new rides each in the
Kochi and Hyderabad parks and one at its Bengaluru park, which will help boost footfalls in Q1FY2021.
Improvement in footfalls and higher ticketing revenue would result in better profitability; and OPM is
expected to improve in the coming years. The management is confident of achieving higher footfalls
in a stable economic environment (expects Bengaluru park footfalls to reach 1.25 million p.a. in the
next 2-3 years). The company has acquired 61.87 acres of land for the new amusement park project in
Kelambakkam in Chennai. The project will commence soon. The company has approved the proposal
of the Odisha government to set up a park. The sustenance of growth in footfalls has to be keenly
monitored in the coming quarters. Hence, we maintain our Hold recommendation on the stock.

Diversified/Miscellaneous
Bajaj Holdings  Bajaj Holdings & Investment Limited (BHIL, erstwhile Bajaj Auto) was demerged in December 2007,
whereby its manufacturing business was transferred to the new Bajaj Auto Limited (BAL) and its strategic
business consisting of the wind farm and financial services businesses was vested with Bajaj FinServ
(BFS). All the businesses and properties, assets, investments and liabilities of erstwhile Bajaj Auto,
other than the manufacturing and strategic ones, now remain with BHIL. BHIL is a primary investment
company focusing on new business opportunities. Given the strategic nature of its investments
[namely BAL (Bajaj Auto Limited) and BFL (Bajaj Finserv Limited)], we have given a holding company
discount to its equity investments. Liquid investments have been valued at cost. Associate company
Bajaj Finserv PT has been revised upwards due to healthy results. We retain our Buy recommendation
on BHIL.
Bharat Electronics  Bharat Electronics Limited (BEL), a defence PSU, remains our preferred pick in the domestic defence
sector on account of its strong manufacturing and R&D capabilities, good cost-control measures,
growing indigenisation and a strong balance sheet with improving return ratios. Further, the company
is well positioned to capture incremental spends by the government on defence through the Make-
in-India initiative. Management provides revenue guidance of 10-12% for FY2020E and expects to
bag Coastal Surveillance Systems order during the remains part of FY2020.We expect revenue and
earnings to clock CAGR of 10.4% and 6.5% during FY2019-2022E as we fine tune our numbers for
FY2020E and FY2021E and introduce FY2022E numbers. Though order intake remained low during
Q3FY2020, order book remains healthy at Rs 54,959 crores (4.5x FY19 revenues) which provides
revenue visibility; hence reiterate our Buy rating on Bharat Electronics Limited (BEL).
Bharti Airtel  Bharti Airtel (Bharti) is one of the leaders in the Indian mobile telephony space. The management
continues to focus sharply on increasing retail ARPUs, non-mobile services (enterprise services) and
value-added services (Airtel TV and music) to boost revenue and reduce the churn rate. ARPU in
Q4FY2020E would be better compared to Q3FY2020 as the exit ARPU was at Rs. 140. The recent
fund-raising of $3 billion has alleviated the concerns over viability at certain extent as the company is
now better positioned to pay AGR dues. From a long-term perspective, explosive growth in the data
segment, rapid network expansion and reach will help Bharti emerge stronger. We have a Buy rating
on the stock
GDL  With its dominant presence in container freight station (CFS) and rail freight businesses, Gateway
Distriparks Limited (GDL) has evolved as an integrated logistics player. The company’s CFS and
rail verticals are facing a tough business environment owing to intensive competition. However, the
rail division has started showing resilience with improvement in volume and profitability. Capacity
expansion in rail will prove to be beneficial for the company as the trade environment revives. Further,
key positive triggers such as the dedicated freight corridor (DFC) remains intact. Due to comfort on
valuation, we have a Buy rating on the stock.
PI Industries  Incorporated in 1947, PI Industries focuses on developing complex chemistry solutions in the agri-
science space. The company delivered in-line results during Q3FY2020 with revenue up by 20%
y-o-y to Rs. 850 crore; operating margin improved by 94 BPS y-o-y to 21.9% and PAT increased by
13.0% y-o-y to Rs. 121 crore. Management retains its FY2020E guidance of ~20% y-o-y improvement in
performance, led by healthy order book, commissioning of additional capacity and contribution from
newly launched brands. We expect revenue and earnings CAGR of 27.6% and 29.8%, respectively,
during FY2019-FY2022E (Isagro numbers factored in from Q4FY2020). We upgrade our rating on PI
Industries Limited to Buy owing to aggressive expansion strategy to tap the robust and encouraging
demand environment.

Ratnamani Metals  Ratnamani Metals and Tubes Limited (RMTL) is the largest stainless steel tube and pipe manufacturer in
India. We remain positive on RMTL, led by its strong balance sheet, ability to generate superior return
ratios and capacity expansion programmes. Further, overall capex revival in its key industries such as
oil and gas coupled with improving orders from international markets will keep order momentum strong
over the next 3-4 years. The company order book as on Feb 1st stood at Rs 1,569 crores (up by 18.7%
y-o-y, however was lower by 18.5% q-o-q) which provides healthy revenue visibility. The management
provides for encouraging outlook which will help in healthy order intake in coming quarters and
guided for margins to remain in the range of 16-17% for FY2021E. Further, RMTL is adding capacities
in both the CS and SS divisions which are expected to be commissioned in coming quarters and aid
in grabbing significant opportunities which will come under way in FY2021E.We remain Positive on
RMTL due to its strong balance sheet and its ability to generate superior return ratios despite capacity
expansion programmes. We maintain our Buy rating on Ratnamani Metals & Tubes Limited (RMTL).
Supreme Industries  Supreme Industries Limited (SIL) is a leading manufacturer of plastic products with a significant
presence across the piping, packaging, industrial and consumer segments. Management maintained
FY2020E volume growth guidance at 10-12%, translates 13.8% to 20.7% y-o-y growth in Q4FY2020E;
this seems challenging considering 9MFY2020 volume growth. However raised margin guidance to
14.0-14.5% for FY2020E from 13-14% earlier driven by better product mix and increased pricing power
in CPVC. Demand outlooks looks promising in plastic piping system; enhanced capex commitment to
Rs. 500 crore to capture the upcoming opportunities especially in plastic piping segment. We remain
Positive on SIL for the long term, given recovery in the rural economy, affordable housing sector and
the new scheme for piped water connection – ‘Nal se Jal’. Given positive demand outlook coupled
with healthy cashflow generation and a strong balance sheet, we retain our Buy rating on the stock.
UPL  UPL Limited (UPL) reported revenue and EBITDA growth of 7% y-o-y and 22% y-o-y respectively on
a like-to-like basis (i.e. including Arysta numbers in the base quarter) during Q3FY2020. Operating
margin improved by 280 bps y-o-y to 23.3% despite gross margin being similar at 42% owing to
revenue and cost synergy at play. Revenue was backed by overall volume growth of 10% y-o-y on
a comparable basis partly offset by softness in realisation (lower by 1% y-o-y) and adverse currency
impact of 2%. As the new season kicks off, the management expects the inventory levels to normalise
by the end of Q4FY2020E resulting in improved operating cash flow position leading to debt
reduction. The management maintains its guidance of revenue growth of 8-10% & EBITDA growth of
16-20% for FY2020E and expects to pare down debt by US$ 500 million by the end of Q4FY2020E.
We have fine tuned our numbers for FY2020E and FY2021E and introduced FY2022E estimates and
believe that the company will be able to deliver revenue and earnings CAGR of 10.0% and 29.5% over
FY2020-22E. We have upgraded our rating on UPL Limited (UPL) to BUY as the risk-reward matrix
turns favourable.

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March 2020 7 Sharekhan ValueGuide

Recommendation Reco Price Price Target/ Upside (%)

Read report - https://www.sharekhan.com/MediaGalary/Equity/Asian_Oilfield_NewIdea-Feb20_2020.pdf

March 2020 8 Sharekhan ValueGuide

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/ITC-Feb01_2020.pdf

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Relaxo-Feb03_2020.pdf

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/V-Guard-Feb03_2020.pdf

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March 2020 9 Sharekhan ValueGuide

Recommendation Reco Price Price Target/ Upside (%)

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Tiveni_Turbine-Feb03_2020.pdf

Read report - https://www.sharekhan.com/MediaGalary/Equity/HDFC_Life-Feb03_2020.pdf

Read report - https://www.sharekhan.com/MediaGalary/Equity/Power_Grid-Feb03_2020.pdf

Read report - https://www.sharekhan.com/MediaGalary/Equity/ICICI_Prud_Life-Feb03_2020.pdf

March 2020 10 Sharekhan ValueGuide

Read report - https://www.sharekhan.com/MediaGalary/Equity/IHCL-Feb03_2020.pdf

Read report - https://www.sharekhan.com/MediaGalary/Equity/Vinati-Feb03_2020.pdf

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Titan-Feb04_2020.pdf

March 2020 11 Sharekhan ValueGuide

Recommendation Reco Price Price Target/ Upside (%)

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/TVS_Motor-Feb04_2020.pdf

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/CenturyPly-Feb04_2020.pdf

Read report - https://www.sharekhan.com/MediaGalary/Equity/TGBL-Feb04_2020.pdf

March 2020 12 Sharekhan ValueGuide

Read report - https://www.sharekhan.com/MediaGalary/Equity/SRF-Feb04_2020.pdf

Read report - https://www.sharekhan.com/MediaGalary/Equity/Affle-Feb04_2020.pdf

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Bharti_Airtel-Feb05_2020.pdf

Feb 05, 2020 Cipla Stock Update BUY  447 540 

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Cipla-Feb05_2020.pdf

March 2020 13 Sharekhan ValueGuide

Recommendation Reco Price Price Target/ Upside (%)

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Cadila-Feb05_2020.pdf

Feb 05, 2020 Thermax Stock Update HOLD  1,074 1,195 

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Thermax-Feb05_2020.pdf

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Apollo_Tyres-Feb05_2020.pdf

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Max-Feb05_2020.pdf

March 2020 14 Sharekhan ValueGuide

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Jyothi_Lab-Feb05_2020.pdf

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Zydus-Feb05_2020.pdf

Feb 05, 2020 Exide Industries Viewpoint POSITIVE  186 20-22% 

Read report - https://www.sharekhan.com/MediaGalary/Equity/Exide-Feb05_2020.pdf

Read report - https://www.sharekhan.com/MediaGalary/Equity/Gujarat_Gas-Feb05_2020.pdf

March 2020 15 Sharekhan ValueGuide

Recommendation Reco Price Price Target/ Upside (%)

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