India Equity Research
July 11, 2017
Quarterly Preview
Q1FY18 Results Preview
Emkay
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Refer to important disclosures at the end of this report
Resultsheadwinds
Preview
Renewed deceleration due to temporary
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Please click on sector to read:
Agrochemicals & Fertilizers
Consumer
Non-Banking Financial Services
Real Estate
Automobiles
Eng. & Capital Goods
Oil & Gas
Retail
Building Materials
IT Services
Pharmaceuticals
Specialty Chemicals
Cement
Media & Entertainment
Power
Telecommunications
Construction & Infrastructure
Metals & Mining
Ports
Others
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
Emkay Research is also available on www.emkayglobal.com, Bloomberg EMKAY<GO>, Reuters and DOWJONES.
ED: Hemant Maradia SA: D. SINHA
This report is solely produced by Emkay Global. The following person(s)
are responsible for the production of the recommendation:
Dhananjay Sinha
Head, Institutional Research,
Economist and Strategist
+91 22 6624 2435
[email protected]
| Emkay Strategy
| 11th July, 2017 | 1
Emkay Global Financial Services Ltd.
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Renewed deceleration due to temporary headwinds
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 Renewed decline in earnings performance of Indian companies in Q1FY18E is likely to break the positive trend observed over the past
few quarters. This outcome in expected against the backdrop of better global trade data, implying that domestic factors are responsible
for the expected deceleration in Q1FY18. Possible factors driving the deceleration are: a) appreciation of INR/USD, b) normalization of
demonetization impact, which earlier resulted in shift of demand towards organized sectors, c) decline in global commodity prices
translating into weaker sales growth for commodity-oriented sectors, and d) uncertainty about GST implementation.
 Going ahead, the outcome may improve on the back of continued global cyclical upturn and improved domestic demand conditions.
The combination of fiscal expansion, continued remonetisation and sustained global cyclical recovery will strengthen sales growth,
thereby also reviving credit growth further to ~10% from the current 6.7% level. Policy thrust through MNREGA spending, MSP hikes,
higher procurement, Housing for All and farm loan waivers is likely to provide significant fillip to rural and farm sectors. Uncertainty
around GST implementation is also likely to recede in a few quarters, thereby reversing the near-term pressure.
 Sales growth for Emkay Universe (ex - Financials and Oil & Gas) is expected to decelerate to 3.9% yoy in Q1FY18 from 9.6% yoy in
Q4FY17. EBITDA growth is expected lower at -1.1% yoy (vs 8.4% yoy in Q4FY17) while APAT is estimated to decline by 4.6% yoy (vs
6.1% yoy in Q4FY17). Sales growth in Q4FY17 will be led by sectors like Metals & Mining (18% yoy), Retail (18% yoy) and Cement
(11% yoy). While sectors such as Telecommunications (-12% yoy) and Engineering & Capital Goods (-4% yoy) are likely to be a drag.
 Q1FY18 is also expect to see decline in margins by ~100bps, reflecting weak pricing power. This decline is expected to be contributed
by sectors like Auto Ancilliaries (-340bps), Telecommunications (-350bps) and Pharmachuticles (-450bps). Better performance of
select secors like Engineering & Capital Goods (137bps) and Agri Inputs & Chemicals (128bps) are unlikely to compensate for the
overall decline in margins.
 Potential surprises: Positive – Sanghi Industries; Negative – Grasim, INOX, NIIT Tech, PVR and Tata Communication.
% YoY growth
Emkay Universe
Emkay Large-Cap
Emkay Mid-Cap
Emkay Small-Cap
Sales
Q4FY17
Q1FY18E
9.6%
3.9%
10.9%
3.8%
4.9%
3.9%
3.3%
5.3%
EBIDTA
Q4FY17
Q1FY18E
8.4%
-1.1%
9.1%
-1.4%
2.3%
-3.6%
9.7%
11.6%
APAT
Q4FY17
Q1FY18E
6.1%
-4.6%
5.1%
-5.6%
8.0%
-7.3%
23.4%
27.1%
Note: Emkay Universe (ex Banks & FS, FS - Others and Oil & Gas)
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
| Emkay Strategy | 11th July, 2017 | 2
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Sectoral expectations
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 Agri Inputs and Chemicals: We estimate domestic sales de-growth of ~2% for our under coverage agrochemical companies
owing to uncertainty arising due to GST. Based on our channel check, channel partners have been purchasing lower inventory in the
month of June 2017 as there was no clarity on tax rebate on existing inventory. However, as per fertilizer dispatch volume data,
Complex fertiliser volume growth has been in the range of 20-25% for the industry due to lower placement during Q4FY17 and
better expected demand. Hence, it indicates that there is no significant impact of GST on fertiliser offtake. However, Timely arrival
of the south west monsoon has perked up the farmer sentiments. Rainfall during the 1st Jun to 9th Jul 2017 stood 2% below the
long period average after begin higher by 5% till 5th of July’17. Distribution of rainfall has also been good with rainfall having covered
most part of the country. Hence, we expect the volume offtake to be better in Q2FY18 due to spill over of Q1FY18 inventory
placement. We continue to maintain our positive view on Chambal Fertilisers and Deepak Fertilisers in the Fertiliser segment. Within
the Agrochemicals space, we prefer PI Industries.
 Automobile: We expect EIM (+24% yoy), TVSL (+20% yoy), MSIL (+18% yoy) and HMCL (+8% yoy) to report the highest revenue
growth in our coverage universe. We expect the highest EBITDA growth for EIM (+28% yoy) and MSIL (+20% yoy), while AL (-44%
yoy) and Apollo (-39% yoy) are expected to report lower EBITDA. We expect EIM to report strong margins, led by operating
leverage benefit; M&M margins are likely to expand, driven by higher FES share. We believe that AL’s margin will decline due to
lower M&HCV sales.
 Building Materials: We expect companies in Building Materials industry to report subdued revenue growth across categories. Tiles
and Sanitaryware are expected to report volume growth in mid-single digits while Plywood is expected to report volume growth in
high single digits. Our channel checks suggest that growth was steady in April-May, but June was impacted due to destocking. GST
will be positive for the Building Materials industry, as it would accelerate the shift from Unorganised to Organised.
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
| Emkay Strategy | 11th July, 2017 | 3
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Sectoral expectations (contd)
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 Cement: We expect sales volume growth of 6.4% yoy for our coverage universe against industry growth of 1-2% yoy. Among the
large companies, Shree Cement and ACC are expected to report volume growth of 13% yoy and 10% yoy, respectively. Among the
mid-sized players, Orient/JK Lakshmi/JK Cement are expected to report volume growth of 12%/8%/8% yoy. As per our channel
checks, all India average cement price was up 3.9% yoy/7.4% qoq during Q1FY18. There was a steep improvement in cement
prices in Gujarat, which will help companies with a higher exposure to the West region (Sanghi Industries and Ambuja Cements) to
report better realizations. Average realization for our coverage universe is expected to improve 6.6% yoy/6.2% qoq. Average
operating cost for our coverage universe is expected to increase 9.2% yoy/3.9% qoq due to higher coal prices (Pet Coke and
Imported Coal) and freight cost (owing to higher diesel prices & railway freight and ban on overloading in North/Central regions).
Higher operating costs would lead to 238bps yoy contraction in average OPM for our coverage universe. Average EBIDTA/tonne for
our coverage universe is expected to decline by Rs76/tn yoy to Rs894/tn. We expect demand to improve in 2HFY18E, which along
with the slowing pace of capacity addition would result in better pricing power to cement manufacturers. Our top picks: Shree
Cement, JK Cement, OCL India, India Cements and Mangalam Cement.
 Construction & Infrastructure: Overall, we expect EPC revenue (ex-IRB) to see muted yoy growth of 2% for the quarter, with KNR
Constructions, Ashoka Buildcon and Sadbhav Engineering expected to clock double-digit revenue growth while PNC Infratech and
ITD Cementation are expected to see a drop in revenue. Our top picks in the sector are KNR Constructions, ITD Cementation, PNC
Infratech and Ashoka Buildcon on account of low leverage on their standalone balance sheets, a controlled working capital cycle
and comfortable order book position.
 Consumer: All consumer companies have witnessed de-stocking given the lack of clarity on GST among the channel partners.
Companies with a higher share of wholesale/CSD will be affected the most. All companies have compensated distributors for the
loss on account of transition towards GST. Paints companies have bucked the trend this quarter and we estimate a category volume
growth of ~8% yoy, led by strong growth in April. A&P spends are expected to be benign for most companies, as companies would
have tried to mitigate the impact of GST on margins amid muted revenue growth. In the Staples space, we believe HUL and GCPL
are likely to witness lower impact of de-stocking.
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
| Emkay Strategy | 11th July, 2017 | 4
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Sectoral expectations (contd)
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 Engineering & Capital Goods: We expect revenues to decline by 4% yoy across the Capital Goods universe, as deliveries have
been deferred to the latter part of June 2017. Excluding BHEL, order inflows are likely to remain flat. Including BHEL, order inflows
are likely to increase by 51% yoy to Rs269bn. Emkay expectation: (a) Revenue decline of 4% yoy to Rs194bn. Ex-BHEL, the
revenues are expected to decrease by 2% yoy to Rs144bn. (b) EBITDAM is expected to improve by 140bps yoy to 8.5% while
EBITDA is expected to grow by 14% yoy to Rs16bn; Ex-BHEL, the EBITDAM is expected to improve by 30bps yoy to 9.7% while
EBITDA is expected to grow by 2% yoy to Rs14bn and (c) Net profits are likely to increase by 11% yoy to ~Rs9.5bn; Ex-BHEL, net
profits are expected to increase by 4% yoy to Rs8.1bn. Our stock selection remains driven by visibility, cash flows and ROIC. Our
preferred picks are Techno Electric, KEC International, Voltas and Cummins.
 IT Services: Tier I IT should report a 1.5-2.5% qoq revenue growth in Jun’17 quarter in constant currency (CC) terms, with Wipro
being the only exception (1.5% qoq revenue decline). We expect ~50-80bps qoq benefit to reported US$ revenue growth for the Tier
I players, but on reported INR earnings, the net impact would be adverse by about 200-300bps given the sharp INR appreciation
against US$. Among the Tier II players, we expect CC terms growth of ~1-5% QoQ. EBITDA margins are expected to decline
sequentially for our Tier I coverage universe (except for Tech M) due to INR appreciation V/s US$, visa charges and wage hikes in
select cases. Indian IT Services players continue to face multiple headwinds in their businesses (budget moving to Digital, pricing
pressure in traditional offerings) and macros (strengthening INR V/s US$, slower decision making on IT spends, narrowed low-cost
moat of Indian vendors). To deal with this uncertainty, most IT services vendors have made a change in strategic refresh (7 new
CEOs have assumed the role in last 12 months among top 10 vendors). We believe that given the tectonic shift in the sector, stocks
with growth acceleration would attract significant premium over peers. We believe that Mindtree, Mphasis, LTI and Tech Mahindra
qualify on these parameters and are our preferred picks in the sector.
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
| Emkay Strategy | 11th July, 2017 | 5
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Sectoral expectations (contd)
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 Media & Entertainment: Spillover impact of demonetization in April and transitional impact on Ad Spends due to GST
implementation will restrict Advertising Revenue growth. Companies under our coverage would see divergent trends. In the case of
broadcasters, Zee is expected to register ~8% yoy growth in Entertainment business while recovery for SUN TV is still elusive,
Regional Print Media companies are expected to report single-digit growth while English segment for HT Media would continue to
see revenue decline. Strong box office collections by Baahubali-2 will aid growth and partially offset the base effect for the
multiplexes. Lackluster performance by most Bollywood movies and lesser number of regional hits will restrict footfalls. Ad Revenue
is expected to remain healthy at 18% yoy for PVR. Radio business would also be impacted due to sub-par Ad Spends while new
station launches would partially aid growth. ENIL could surprise negatively as it is aggressively focusing on yield strategy.
 Metals & Mining: Steel demand growth remains weak in India, while supply is strong. Fall in exports and implementation of GST
exacerbated the situation, leading to a fall in steel prices in April and May. Meanwhile, raw material pricesremained mostly stable
during the quarter. Impact of volatility towards end of Q4FY17, however, should be visible in this quarter. Coal India’s volume has
been lower than expectations, butNMDC and MOIL should see better volumes. Except for Aluminium, non-ferrous metal prices fell
during the quarter on qoq basis. Local premiums are also likely to be lower due to destocking. INR appreciation will also impact the
foreign subsidiaries’ performance. We continue our preference for Vedanta, Hindalco and MOIL.
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
| Emkay Strategy | 11th July, 2017 | 6
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Sectoral expectations (contd)
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 Non-Banking Financial Services: The first quarter of any fiscal is seasonally weak for asset financing NBFCs in general. However, for
Q1FY18, we are expecting mixed trends across NBFC-AFCs under our coverage universe, this also being the immediate quarter before the
GST rollout. Asset quality tends to be seasonally weak in first quarter and we could witness certain NBFCs migrating to 90-dpd NPL
recognition beginning Q1 itself. For asset financing NBFCs, we expect growth trends to be mixed, as the volumes in the M&HCV segment
were muted in Q1FY18 due to pre-buying in Q4FY17 and uncertainties related to GST. However, we expect growth to be: 1) strong for Bajaj
Finance, led by strong consumer demand (induced by pre-GST inventory clearances) and 2) healthy for Mahindra Finance owing to strong
tractor sales. Growth could be slower for Shriram Transport Finance and Magma Fincorp due to slower disbursements, as focus remains on
asset quality. Asset quality will be a key monitorable for players like Mahindra Finance and Magma Fincorp, who are more rural focused and
to see whether the impact of farm loan waivers is visible on collection efficiency or not. For Bajaj Finance, NPLs could inch up on regulatory
migration and for Cholamandalam Finance we expect asset quality to remain largely stable. For housing finance companies, we expect
growth to remain largely steady. Trend in new sanctions (in light of the new affordable housing initiatives) would be a key monitorable for
growth going forward. NIMs could improve on the back of falling cost of wholesale borrowings and re-pricing of bank borrowings. Asset
quality is likely to remain largely stable. For the Emkay NBFC coverage universe, we expect NII growth of 19.7% yoy, mainly led by a weak
topline growth for Magma Fincorp and Shriram Transport Finance. Meanwhile, we expect PAT to grow by paltry 2.8% yoy, mainly due to a
yoy drop in earnings for HDFC Ltd and expected loss for Mahindra Finance. Leaders: Bajaj Finance and Cholamandalam Finance;
Laggards: Mahindra Finance and Shriram Transport Finance.
 Oil & Gas: Brent crude oil price declined by 7.5% qoq to US$49.7/bbl. Kerosene consumption fell by 10% qoq, along with a decline in
kerosene prices, which led to a decline in subsidy by 27.9% qoq to Rs12.25bn. We have assumed NIL burden on OMCs and upstream
companies. Considering the volatility in crude during the quarter, we expect inventory loss of US$2-1.2/bbl for OMCs.We expect GRMs in
the range of ~US$4-5.2/bbl in Q1FY18. Taking into account the NIL burden on upstream companies, we expect ONGC and OIL's
realisations at US$49.7/bbl and US$49.2/bbl, respectively. For RIL, we expect a 2.3% decline in GRM to US$11.2/bbl (v/s US$11.5/bbl in
Q4FY17) due to a drop across products. Petchem margins for products across the segment remained stable, but INR appreciation might
hurt margins. Despite shutdown in Q1FY18, Petchem volumes will remain stable because of commissioning of PX plant. Thus, we expect
RIL’s Petchem EBIT to come in at Rs34.2bn against Rs34.5bn in Q4FY17. RIL’s net profit is estimated at Rs78.1bn. In the Natural Gas
universe, we expect GAIL’s transmission volume to remain flat qoq at 102mmscmd while GSPL’s transmission volume should increase from
23.5mmscmd to 26mmscmd. On the distribution/CGD front, we expect a 4% improvement qoq in sales volume of IGL to 4.77mmscmd while
Gujarat Gas’ sales volume should increase by 2% to 6.18mmscmd. PLNG is expected to witness a marginal decline in volume by 2% qoq to
187.1tbtu due to lower demand.
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
| Emkay Strategy | 11th July, 2017 | 7
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Sectoral expectations (contd)
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 Pharmaceuticals: Q1FY18 is likely to be a difficult period for Indian pharma companies given the impact of: 1) weak domestic sales
due to the destocking preceding GST 2) US revenues continuing to be tepid due to pricing pressure and 3) INR appreciation impacting
revenues from multiple geographies. On the business front, while most of short-term negatives for the sector on US generic pricing
pressure appear to be priced in, industry fundamentals continue to weaken structurally, with PBM consolidating further and enhanced
fragmentation of the generics industry. In the near term, higher R&D for building pipeline and technologies will squeeze margins, but
we believe Specialty and quality pipeline will be the key drivers for future revenue growth and EBITDA margin expansion. Within the
Specialty space, we see Cipla, Sun Pharma, Aurobindo and Dr Reddy's in the forefront.
 Power: Q1FY18 is likely to witness mixed results. While CESC, GIPCL, NHPC, NTPC and PowerGrid are likely to report moderate
growth, others like JSW Energy and Reliance Power are expected to deliver weak numbers on the back of subdued overall demand
and muted industrial activity. PLF during the quarter improved slightly on qoq basis, which was primarily driven by the onset of peak
summer. While the sector continues to face constraints in the form of poor demand recovery & low pricing, environment clearances
and Discoms’ financials, the recent initiatives taken by the government like UDAY, auctioning of coal & gas linkages and SHAKTI
policy etc may unblock the policy logjam. However, we expect UDAY to reap benefits only by FY19 end onwards. The investors’ focus
should be on earnings, valuations and risk profile.
 Ports: India’s West Coast container market volumes are expected to clock a growth of ~12.5% yoy in Q1FY18 wherein JNPT is
expected to grow ~7% yoy. Pipavav is expected to witness a decline in container volume of ~4% yoy. Meanwhile, Mundra and Hazira
continued to capture market share on the West Coast, growing ~20% yoy and ~25% yoy, respectively. Revenue for Adani Ports & SEZ
(ADSEZ) is expected to grow 36% yoy on account of growth in container volumes and realizations from Abbot Point Operations arm,
as the company continues to capture market share in the container segment. Gujarat Pipavav (GPPV) revenue is expected to decline
6% yoy on lower volumes. EBITDA margins for ADSEZ (60.3%, -615 bps yoy) are driven by muted port EBITDA margins as well as
higher topline contribution by low-margin businesses. EBIDTA margins for GPPV (61.2%, +131 bps yoy, -444 bps QoQ) reflect higher
share of liquid cargo in volume mix compared to Q1FY17. Reported profit is expected to fall for ADSEZ (-9% yoy) mainly due to muted
operational profitability, higher interest cost, and full corporate tax rate for Mundra, given the completion of tax holiday. ADSEZ PBT is
expected to grow 12.5% yoy. Reported profit for GPPV (-13% YoY) is expected to fall on lower volumes and higher tax outgo on a yoy
basis. We recommend ACCUMULATE ON Adani Ports & SEZ and HOLD ON Gujarat Pipavav Port.
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
| Emkay Strategy | 11th July, 2017 | 8
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Sectoral expectations (contd)
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 Real Estate: Pan-India residential volumes grew by 20-25% qoq in Q4FY17, as the market returned to normalcy post the demonetization
impact in Q3FY17. Our channel checks suggest that Q1FY18 sales have seen a further growth of 5-10% on a qoq basis across markets,
with preference for completed projects and mid-income/affordable housing segments garnering majority of sales. Launches remained
muted, as developers continue to focus on selling existing inventory and await introduction of the Real Estate Regulator (RERA). We
reiterate our preference for annuity-based plays, who derive majority of their EV from operational annuity/hotel assets. Our top picks are
Brigade Enterprises, Prestige Estates and The Phoenix Mills.
 Retail: Delayed declaration of GST rates for Textiles and Retail sectors, coupled with uncertainty surrounding the impact on older
inventory post 1st July resulted in de-stocking at the distributor/retailer level. Retailers advanced their End Of Season Sale (EOSS) by
almost a fortnight, resulting in a robust revenue growth during the quarter. We believe that branded players were partially impacted by
destocking during the early weeks of June, but recovered via advanced EOSS in EBOs. We expect the introduction of GST to accelerate
the shift from unorganised to organised retail. We continue to maintain our positive stance on the sector owing to the rising urban
consumption and improved spending on the back of the 7th Pay Commission recommendations. Our top picks are FLFL, ABFRL and
Arvind.
 Specialty Chemicals: In our Specialty Chemicals coverage universe, we expect the overall sector’s revenue growth of 23% yoy,
whereas EBITDA is likely to decline by 11% yoy on the back of contraction in EBITDA margins. As a result, the net profit is likely to
decline by 11% yoy. In our coverage universe, the overall fluorine chemistry based companies are likely to see recovery in revenue
growth but margins are likely to take some more time to recover due to lower revenue growth from Specialty Chemicals business.
Enzyme Chemistry universe will show muted revenue growth due to lower traction in top accounts, but will likely see some margin
recovery sequentially. Emersion Polymer chemistry based companies will show recovery on the margin front, along with revenue growth.
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
| Emkay Strategy | 11th July, 2017 | 9
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Sectoral expectations (contd)
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 Telecom: We expect the intensity of revenue decline in Bharti and Idea to moderate, as majority of downtrading happened in Q4FY17
and Jio has also started to partially charge consumers. Lower pace of deceleration in realization in both Voice and Data would check
decline in revenues. Incremental subscriber addition at lower ARPU and slower uptrend (Non-data to Data or lower ARPU to higher
ARPU) would continue to result in sequential (qoq) fall in revenue. However, volume growth in both Data and Voice would restrict the
decline. Unlimited voice offerings would continue to put pressure on voice realizations. Revenue decline would not be offset fully by cost
control, resulting in a sustained fall in EBITDA. Bharti Infratel would register healthy tenancy additions for third consecutive quarter, driven
by demand from Jio while exits from marginal operators would continue to affect its performance. For TCOM, performance would be
impacted by rupee appreciation, lower-than-expected reversal of one-off costs in Q4FY17 and investment in digital transformation.
Decline in revenues, accelerated network rollout, provision reversal in access charge (Bharti) and normalization of forex gain (Idea) will
dent operating performance. EBITDA margin is estimated at 31.6%, a decline of 176bps qoq. Decline in EBITDA, rise in depreciation and
interest cost will keep profitability under pressure.
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
| Emkay Strategy | 11th July, 2017 | 10
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Emkay
Q1FY18 Preview
Your success is our success
YoY
Net Sales Growth
EBITDA Growth
EBITDA Margin growth
Adjusted PAT Growth
Emkay Universe
3.9%
-1.1%
-101 bps
-4.6%
Emkay Large-Cap
3.8%
-1.4%
-108 bps
-5.6%
Emkay Mid-Cap
3.9%
-3.6%
-137 bps
-7.3%
Emkay Small-Cap
5.3%
11.6%
78 bps
27.1%
Emkay Universe ex Top 3 Cos
2.7%
-5.3%
-166 bps
-8.8%
Emkay Universe ex Top 5 Cos
2.2%
-6.0%
-171 bps
-10.1%
Emkay Universe ex Top 3 and Bottom 3 Cos
3.7%
-1.4%
-99 bps
-3.9%
Emkay Universe ex Top 5 and Bottom 5 Cos
2.9%
-0.3%
-60 bps
-2.2%
Top 5 companies based on Contribution to PAT Growth are Hindustan Zinc, Tata Steel, Vedanta, Maruti Suzuki & NHPC
Bottom 5 companies based on Contribution to PAT Growth are Bharti Airtel, Coal India Idea Cellular, Sun Pharma & JSW Steel
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
| Emkay Strategy | 11th July, 2017 | 11
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Emkay
Q1FY18 Strong Results
Your success is our success
Company Name
Sector
APAT (Rs mn)
APAT Gr
June-17E
June-16
(%)
1407
778
80.9
Large Caps
BHEL
Engineering & Capital Goods
Hindustan Zinc
Metals & Mining
19109
10369
84.3
Tata Steel
Metals & Mining
10511
3400
209.2
Vedanta
Metals & Mining
12424
6150
102.0
1141
75
1423.4
370
157
136.5
1650
202
717.2
Mid Caps
Coromandel International
Agri Input & Chemicals
Prism Cement
Cement
Mid Caps
Brigade Enterprises
Real Estate
Deepak Fertilisers
Agri Input & Chemicals
669
347
92.8
Future Lifestyle
Retail
129
35
265.0
GSFC
Agri Input & Chemicals
828
463
78.9
HT Media
Media & Entertainment
400
224
78.4
India Cements
Cement
706
440
60.5
ITD Cementation
Construction & Infrastructure
190
52
264.7
KEC International
Engineering & Capital Goods
485
309
56.8
MOIL
Metals & Mining
1186
565
109.9
Monte Carlo Fashions
Retail
36
20
74.8
NIIT
IT Services
227
74
206.8
NIIT Tech
IT Services
699
285
145.4
Prabhat Dairy
Others
53
34
55.8
Simplex Infrastructure
Construction & Infrastructure
295
172
71.5
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
| Emkay Strategy | 11th July, 2017 | 12
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Emkay
Q1FY18 Weak Results
Your success is our success
Company Name
Sector
APAT (Rs mn)
APAT Gr
June-17E
June-16
(%)
929
2411
-61.5
4303
14620
-70.6
Large Caps
Ashok Leyland
Automobiles
Bharti Airtel
Telecommunications
BPCL
Oil & Gas
10840
26205
-58.6
Coal India
Metals & Mining
21143
30652
-31.0
Hindalco
Metals & Mining
1852
2943
-37.1
HPCL
Oil & Gas
7012
20984
-66.6
Indian Oil
Oil & Gas
28260
82690
-65.8
JSW Steel
Metals & Mining
4778
11090
-56.9
Lupin
Pharmaceuticals
4577
9102
-49.7
Shree Cements
Cement
3511
5077
-30.8
Sun Pharma
Pharmaceuticals
11836
20337
-41.8
Tata Motors
Automobiles
11751
17513
-32.9
Torrent Pharma
Pharmaceuticals
1718
2920
-41.2
Amara Raja Batteries
Auto Ancillaries
1088
2670
-59.2
Apollo Tyres
Auto Ancillaries
1595
3147
-49.3
Dish TV
Media & Entertainment
89
409
-78.3
Tata Communications
Telecommunications
339
1341
-74.7
Mid Caps
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
| Emkay Strategy | 11th July, 2017 | 13
©
Emkay
Q1FY18 Weak Results
Your success is our success
Company Name
Sector
APAT (Rs mn)
APAT Gr
June-17E
June-16
(%)
Small Caps
Dynamatic Technologies
Engineering & Capital Goods
63
128
-50.9
Entertainment Network
Media & Entertainment
71
167
-57.6
HSIL
Building Materials
172
265
-34.9
Mangalam Cement
Cement
57
226
-74.6
PNC Infratech
Construction & Infrastructure
434
640
-32.2
Sanghi Industries
Cement
163
238
-31.4
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
| Emkay Strategy | 11th July, 2017 | 14
©
Emkay
Possible Surprises – Positives
Your success is our success
Company Name
Sanghi Industries
EPS
(Rs)
0.7
YoY growth
(%)
(3.4)
Reason
Volatility in cement prices in Gujarat can lead to better-than-expected performance
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
| Emkay Strategy | 11th July, 2017 | 15
©
Emkay
Possible Surprises – Negatives
Your success is our success
EPS
(Rs)
YoY growth
(%)
Grasim Industries
7.4
7
INOX Leisure
3.3
28.3
NIIT Tech
11.3
9
PVR
11.2
15.5
1.2
NA
Company Name
Tata Communication
Reason
Pressure on VSF prices in global markets may lead to lower profits of VSF segment
Lower than expected ad growth and risk to our footfall assumption due to lacklustre performance by most of the
Bollywood content could dent operating performance
Modest operational performance and absence of one-off may lead to negative surprise in the earnings
There could be risk to our footfall assumption due to lacklustre performance by most of the Bollywood content
INR appreciation and cost escalation could impact higher than our expectation
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
| Emkay Strategy | 11th July, 2017 | 16
©
Emkay
Emkay Universe Q1FY18 Result Preview
Your success is our success
Net Sales (Rs m n)
Grow th (%)
Ebitda (Rs m n)
Sector Nam e
Q1FY18 Q4FY17
Q1FY17
YoY
Agri Input & Chemicals
187055
189808
177286
6%
-1%
30279
Auto Ancillaries
184835
179296
184320
0%
3%
-2% -14%
Automobiles
1108195 1293220 1131841
APAT (Rs m n)
Q1FY17
YoY
28570
26437
15%
6%
17292
19980
16302
20704
22512 -28%
-21%
8330
153751
189762
157502
-2%
-19%
-2%
72201
78192
69006
5%
1% -20%
2777
3387
3022
Grow th (%)
QoQ Q1FY18 Q4FY17 Q1FY17
EPS (Rs)
Grow th (%)
YoY
QoQ Q1FY18 Q4FY17 Q1FY17
YoY
QoQ
14281
21%
-13%
6.7
7.7
5.5
21%
-13%
10782
10926
-24%
-23%
2.8
3.7
3.5
-19%
-23%
62750
94037
66683
-6%
-33%
7.7
11.5
8.2
-6%
-33%
-8%
36577
35238
35580
3%
4%
9.9
9.5
10.4
-5%
4%
-8%
-18%
1343
1864
1508
-11%
-28%
3.3
4.6
3.7
-11%
-28%
Banks & Financial Services
96021
97703
80191
Building Materials
18998
23632
18729
Cement
228579
223888
206414
11%
2%
41907
35432
42750
-2%
18%
22178
18453
23807
-7%
20%
5.9
4.9
6.3
-7%
20%
Construction & Infrastructure
100188
107007
98246
2%
-6%
17914
21685
17712
1%
-17%
7074
10182
6605
7%
-31%
3.1
4.5
2.9
7%
-31%
Consumers
286393
282616
278583
3%
1%
55063
55074
55077
0%
0%
37263
36854
37490
-1%
1%
4.2
4.2
4.3
-1%
1%
Engineering & Capital Goods
194268
274647
203317
16437
24503
14419
14%
-33%
9507
12824
8574
11%
-26%
1.9
2.6
1.7
11%
-26%
IT Services
880186
890121
862710
2%
-1%
193602
203000
195265
-1%
-5% 155596 164013
155526
0%
-5%
11.7
12.3
11.7
0%
-5%
61232
55710
60266
2%
10%
18443
15337
17951
3%
20%
6790
9397
4%
44%
2.9
2.0
2.8
4%
44%
Metals & Mining
1156346 1401056
978946
18% -17%
201646
272401
177399
14%
-26%
74242 120891
68819
8%
-39%
2.6
4.2
2.3
10%
-39%
Oil & Gas
2943436 3301864 2697887
9% -11%
323521
401925
442876 -27%
-20% 187177 287341
273210
-31%
-35%
6.8
10.5
9.9
-31%
-35%
82225 -17%
Media & Entertainment
20%
QoQ Q1FY18 Q4FY17
Grow th (%)
-4% -29%
Pharmaceuticals
313175
306788
313795
0%
2%
67898
66571
Pow er
362682
342136
347697
4%
6%
154988
130380
147259
55400
58888
47839
16%
-6%
17014
17194
Retail
120230
121570
102066
18%
-1%
11725
10216
Telecommunications
376685
379208
427270 -12%
-1%
116622
121772
Others
158121
185512
142434
11% -15%
24371
33069
Real Estate
9776
2%
40194
47523
54052
-26%
-15%
6.2
7.3
8.3
-26%
-15%
5%
19%
63114
46325
59550
6%
36%
2.2
1.6
2.0
6%
36%
15607
9%
-1%
5020
3709
2109
138%
35%
1.7
1.3
0.7
138%
35%
10261
14%
15%
5313
5228
4162
28%
2%
2.2
2.2
1.7
36%
2%
147153 -21%
-4%
5375
8204
25727
-79%
-34%
0.6
0.8
2.6
-79%
-34%
10002
24125
1%
-26%
19330
10210
-2%
-48%
1.3
2.5
1.4
-5%
-50%
Em kay
8832028 9714670 8359836
6%
-9% 1536462 1729174 1668558
-8%
-11% 758123 949569
868218
-13%
-20%
4.5
5.6
5.1
-12%
-20%
Em kay*
5818874 6339164 5601602
4%
-8% 1156618 1263539 1169755
-1%
-8% 542491 636224
568675
-5%
-15%
3.9
4.5
4.0
-4%
-15%
Large Cap*
4782664 5263588 4608773
-10% 468386 555763
4%
-9%
986667 1094572 1000499
-1%
496060
-6%
-16%
4.3
5.1
4.5
-6%
-16%
Mid Cap*
679378
689924
654116
4%
-2%
120325
119360
124806
-4%
1%
49046
53409
52897
-7%
-8%
2.2
2.4
2.3
-4%
-9%
Small Cap*
356833
385653
338713
5%
-7%
49626
49607
44450
12%
0%
25060
27052
19719
27%
-7%
2.8
3.0
2.2
27%
-8%
* Note: ex Banks & FS, FS - Others and Oil & Gas
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
| Emkay Strategy | 11th July, 2017 | 17
©
Emkay
Emkay Universe Q1FY18 Result Preview
Your success is our success
Net Sales (Rs m n)
Com pany Nam e
Q1FY18 Q4FY17
Grow th (%)
Q1FY17
YoY
Ebitda (Rs m n)
QoQ Q1FY18 Q4FY17
Grow th (%)
Q1FY17
YoY
APAT (Rs m n)
Grow th (%)
QoQ Q1FY18 Q4FY17 Q1FY17
YoY
EPS (Rs)
Grow th (%)
QoQ Q1FY18 Q4FY17 Q1FY17
YoY
QoQ
Agri Input & Chem icals
Bayer CropScience
8127
2380
Chambal Fertilisers
16964
10773
19083 -11%
Coromandel International
22979
22896
20595
DCM Shriram
16518
17090
15137
Deepak Fertilisers
13875
12154
Dhanuka Agritech
8555
-5% 241%
1679
-581
57%
1926
846
1883 -11%
1220
-361
1312
-7%
2440 -21% 128%
1033
587
1407
-27%
76%
12%
0%
2252
2724
9%
-3%
3495
2224
2385
47%
-17%
1141
1443
75 1423%
57%
2456
1578
1668
47%
10449
33%
14%
1533
1229
1071
43%
25%
669
519
347
-3%
21%
285
342
7% -28%
1386
1149
287
-1%
-17%
206
242
979
42%
21%
828
1870
886 154%
34.5
-10.2
37.1
-7%
2.5
1.4
3.4
-27%
76%
-21%
3.9
5.0
0.3 1424%
-21%
56%
15.0
9.7
10.2
47%
56%
93%
29%
7.6
5.9
3.9
93%
29%
193
6%
-15%
4.1
4.8
3.9
6%
-15%
463
79%
-56%
2.1
4.7
1.2
79%
-56%
251%
1924
1587
1988
11625
16067
10821
Insecticides India
3198
1760
3049
5%
82%
379
134
367
209
60
181
15%
251%
10.1
2.9
8.7
15%
PI Industries
6999
6273
6834
2%
12%
1606
1537
1656
-3%
5%
1267
1352
1269
0%
-6%
9.3
9.9
9.3
0%
-6%
Rallis India
4789
3667
4677
2%
31%
784
416
752
4%
88%
599
311
562
7%
92%
3.1
1.6
2.9
7%
92%
GSFC
Sharda Cropchem
12% -41%
3% 184%
3517
5949
3141
721
1626
659
9%
-56%
449
986
408
10%
-54%
5.0
11.0
4.5
10%
-54%
Tata Chemicals
37032
35304
36519
1%
5%
6332
5665
6086
4%
12%
2633
3106
2096
26%
-15%
10.3
12.2
8.2
26%
-15%
UPL
39506
53910
36440
8% -27%
7901
11261
6987
13%
-30%
4582
8287
4300
7%
-45%
10.4
18.7
9.7
7%
-45%
Ashok Leyland
38397
66179
42588 -10% -42%
4763 -44%
-63%
929
4801
2411
-61%
-81%
0.3
1.7
0.8
-61%
-81%
Bajaj Auto
55315
48973
57480
-4%
21%
9390
8018
9784
-4%
17%
32.5
27.7
33.8
-4%
17%
Eicher Motors
19430
18844
15575
25%
Hero Motocorp
80003
69152
73989
8%
Mahindra & Mahindra
111530
106121
105247
6%
Maruti Suzuki India
176182
183334
149204
18%
Tata Motors
592863
772172
658950 -10% -23%
TVS Motor
34476
28445
28809
20%
Amara Raja Batteries
14001
13445
Apollo Tyres
34823
Exide Industries
21124
Motherson Sumi
114887
Autom obiles
2688
7299
11008
9060
3%
6004
16%
12221
5%
-4%
13%
11763
-6%
5910
4789
25%
2%
4290
4116
3364
28%
4%
158.1
150.9
123.3
28%
5%
9576
12301
-1%
28%
8597
7178
8832
-3%
20%
43.0
35.9
44.2
-3%
20%
15614
12368
14885
5%
26%
8708
7800
8706
0%
12%
14.1
12.7
14.1
0%
12%
26604
25607
22157
20%
4%
17491
17090
14862
18%
2%
57.9
56.6
49.2
18%
2%
76993
118327
84841
-9%
-35%
11751
43767
17513
-33%
-73%
3.4
12.8
5.1
-33%
-73%
21%
2620
1615
2004
31%
62%
1595
1268
1213
32%
26%
3.4
2.7
2.6
32%
26%
26664 -47%
4%
1988
1844
4570 -56%
8%
1088
992
2670
-59%
10%
6.4
5.8
15.6
-59%
10%
33256
33041
5%
5%
3315
3699
5388 -38%
-30%
19757
20111
5%
7%
2957
2618
3150
112839
104504
10%
2%
8042
12543
Auto ancillaries
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
-10%
1595
2282
3147
-49%
-30%
3.1
4.5
6.2
-49%
-6%
13%
1919
1648
1961
-2%
16%
2.3
1.9
2.3
-2%
16%
9404 -14%
-36%
3728
5860
3149
18%
-36%
2.7
4.2
2.2
18%
-36%
| Emkay Strategy | 11th July, 2017 | 18
©
Emkay
Emkay Universe Q1FY18 Result Preview
Your success is our success
Net Sales (Rs m n)
Com pany Nam e
Q1FY18 Q4FY17
Grow th (%)
Ebitda (Rs m n)
Q1FY17
YoY
QoQ Q1FY18 Q4FY17
14031
41%
18%
Grow th (%)
APAT (Rs m n)
Grow th (%)
EPS (Rs)
Grow th (%)
Q1FY17
YoY
QoQ Q1FY18 Q4FY17 Q1FY17
YoY
QoQ Q1FY18 Q4FY17 Q1FY17
YoY
QoQ
8312
43%
21%
33%
26%
10.3
8.2
15.7
-35%
26%
3341
20%
2%
2012
2196
1657
21%
-8%
12.9
14.0
10.6
21%
-8%
30397 -19%
-20%
16607
20442
18707
-11%
-19%
10.5
12.9
11.8
-12%
-19%
4%
5830
5292
4078
43%
10%
11.5
10.5
8.1
43%
10%
-10%
-10%
Banks & Financial Services
Bajaj Finance
Cholamandalam Finance
19827
16813
11872
9794
6841
6594
5536
24%
4%
3996
3905
HDFC
25905
28524
22292
16%
-9%
24725
30862
LIC Housing Finance
10476
10396
8245
27%
1%
9351
8954
7399
0%
26%
5646
4492
4240
Magma Fincorp
3003
3038
2997
-1%
1593
1677
1531
4%
-5%
424
-1140
469
Mahindra Finance
7951
11117
6754
18% -28%
4221
7252
3587
18%
-42%
-181
2341
870
1.8
-4.8
2.0
-0.3
4.1
1.5
Shriram City Union Finance
7701
7134
6862
12%
8%
5006
4324
4139
21%
16%
2119
120
1818
17% 1662%
32.1
1.8
27.6
17% 1662%
Shriram Transport Finance
14318
14087
13474
6%
2%
11438
11424
10300
11%
0%
4120
1496
3741
10%
175%
18.2
6.6
16.5
10%
175%
Century Plyboards
4422
4885
4058
9%
-9%
738
838
683
8%
-12%
417
559
431
-3%
-25%
1.9
2.5
1.9
-3%
-25%
HSIL
4684
5944
4602
2% -21%
588
734
734 -20%
-20%
172
308
265
-35%
-44%
2.6
4.7
4.0
-35%
-44%
Kajaria Ceramics
6025
7207
5930
2% -16%
1115
1308
1271 -12%
-15%
585
707
634
-8%
-17%
7.4
8.9
8.0
-8%
-17%
Somany Ceramics
3868
5596
4139
-7% -31%
337
508
335
1%
-34%
170
291
179
-5%
-42%
4.4
7.5
4.6
-5%
-42%
ACC
33036
30997
28698
7%
4401
3418
4092
8%
29%
2680
2115
2378
13%
27%
14.3
11.3
12.7
13%
27%
Ambuja Cements
27531
25334
25412
8%
9%
5047
3651
5813 -13%
38%
3599
2465
3995
-10%
46%
2.4
1.6
2.6
-10%
46%
India Cements
14390
15226
12025
20%
-5%
2075
1900
2014
3%
9%
706
343
440
60%
106%
2.3
1.1
1.4
60%
106%
JK Cement
9672
10189
8867
9%
-5%
1730
1814
1657
4%
-5%
898
1003
720
25%
-10%
12.8
14.3
10.3
25%
-10%
Jk Lakshmi Cement
8584
8067
7772
10%
6%
1022
716
1175 -13%
43%
215
209
286
-25%
3%
1.8
1.8
2.4
-25%
3%
Mangalam Cement
2409
2543
2241
7%
-5%
295
248
471 -37%
19%
57
35
226
-75%
65%
2.2
1.3
8.5
-75%
65%
OCL India
8099
8719
7043
15%
-7%
1829
2007
4%
-9%
971
1122
1058
-8%
-13%
17.1
19.7
18.6
-8%
-13%
Orient Cement
5801
5967
4355
33%
-3%
899
755
388 132%
19%
191
165
-76
16%
0.9
0.8
-0.4
Prism Cement
14218
15443
14063
1%
-8%
1038
1163
952
9%
-11%
370
702
157
137%
-47%
0.7
1.4
0.3
137%
-47%
Ramco Cements
10084
10132
9429
7%
0%
2553
2396
2750
-7%
7%
1236
1345
1559
-21%
-8%
5.2
5.7
6.6
-21%
-8%
Sanghi Industries
2246
2467
2698 -17%
-9%
536
423
645 -17%
27%
163
263
238
-31%
-38%
0.7
1.2
1.1
-31%
-38%
Shree Cements
24970
23803
21987
14%
5%
6391
5112
7308 -13%
25%
3511
3045
5077
-31%
15%
100.8
87.4
145.7
-31%
15%
Ultratech Cement
67537
65003
61823
9%
4%
14091
11832
19%
7581
5643
7749
-2%
34%
27.6
20.6
28.2
-2%
34%
Building Materials
Cem ent
15%
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
1761
13723
3%
16%
| Emkay Strategy | 11th July, 2017 | 19
©
Emkay
Emkay Universe Q1FY18 Result Preview
Your success is our success
Net Sales (Rs m n)
Com pany Nam e
Q1FY18 Q4FY17
Grow th (%)
Q1FY17
YoY
Ebitda (Rs m n)
QoQ Q1FY18 Q4FY17
Grow th (%)
Q1FY17
YoY
APAT (Rs m n)
Grow th (%)
QoQ Q1FY18 Q4FY17 Q1FY17
YoY
EPS (Rs)
Grow th (%)
QoQ Q1FY18 Q4FY17 Q1FY17
YoY
QoQ
Construction & Infrastrucure
Ahluw alia Contracts
Ashoka Buildcon
3400
4718
3063
11% -28%
340
431
429 -21%
-21%
175
204
215
-19%
-14%
2.6
3.0
3.2
-19%
-14%
5500
6100
4683
17% -10%
638
636
596
7%
0%
350
654
308
14%
-46%
1.9
3.5
1.6
14%
-46%
Container Corporation
13785
15579
13392
3% -12%
2716
4950
2619
4%
-45%
1800
3357
1789
1%
-46%
7.4
13.8
7.3
1%
-46%
IRB Infrastructure
15325
16271
15173
1%
-6%
7356
8218
7740
-5%
-10%
2100
2062
1818
15%
2%
6.0
5.9
5.2
15%
2%
ITD Cementation
6500
5234
8614 -25%
24%
650
761
422
54%
-15%
190
320
52
265%
-41%
1.2
2.1
0.3
265%
-41%
J Kumar
3750
3555
4033
-7%
5%
638
601
680
-6%
6%
270
258
298
-9%
4%
3.6
3.4
3.9
-9%
4%
KNR Construction
4563
4821
3032
51%
-5%
639
722
437
46%
-12%
450
524
302
49%
-14%
3.2
3.7
2.1
49%
-14%
20152
21394
19011
6%
-6%
1733
1742
1657
5%
0%
550
1110
523
5%
-50%
1.0
2.0
0.9
5%
-50%
3611
3506
5150 -30%
3%
469
474
671 -30%
-1%
434
337
640
-32%
29%
1.7
1.3
2.5
-32%
29%
Sadbhav Engineering
8877
10329
8070
Simplex Infrastructure
14725
15501
14024
5%
Asian Paints
39787
39525
36374
Berger Paints
12222
11129
11182
Britannia Industries
21856
22444
NCC
PNC Infratech
10% -14%
968
1100
868
11%
-12%
460
686
487
-6%
-33%
2.7
4.0
2.8
-6%
-33%
-5%
1767
2051
1594
11%
-14%
295
668
172
72%
-56%
5.9
13.5
3.5
72%
-56%
9%
1%
8186
7119
8203
0%
15%
5502
4796
5526
0%
15%
5.6
4.9
5.7
-1%
15%
9%
10%
2025
1611
1951
4%
26%
1242
1055
1202
3%
18%
1.3
1.1
1.2
3%
18%
21408
2%
-3%
2995
3081
3162
-5%
-3%
2060
2109
2191
-6%
-2%
17.2
17.6
18.3
-6%
-2%
Consum ers
Colgate-Palmolive
9754
10326
10056
-3%
-6%
1946
2394
2037
-4%
-19%
1168
1426
1257
-7%
-18%
4.3
5.2
4.6
-7%
-18%
Dabur
18262
19147
19284
-5%
-5%
3200
4176
3488
-8%
-23%
2599
3331
2927
-11%
-22%
1.5
1.9
1.7
-11%
-22%
Emami
5902
5777
6444
-8%
2%
1293
1781
1473 -12%
-27%
434
833
567
-23%
-48%
1.9
3.7
2.5
-23%
-48%
Glaxosmithkline Consumer
9127
11019
9439
-3% -17%
1878
2171
2035
-8%
-13%
1514
1759
1606
-6%
-14%
36.0
41.8
38.2
-6%
-14%
Godrej Consumer Products
22766
23898
21228
7%
-5%
4093
5507
3800
8%
-26%
2775
3827
2538
9%
-27%
8.2
11.2
7.5
9%
-27%
Hindustan Unilever
83990
82130
81282
3%
2%
17337
16510
16359
6%
5%
12094
11180
11280
7%
8%
5.6
5.2
5.2
7%
8%
Jubilant FoodWorks
6546
6128
6089
8%
7%
686
605
577
19%
13%
230
189
190
21%
22%
3.5
2.9
2.9
21%
22%
Marico
17751
13222
17543
1%
34%
3682
2595
3740
-2%
42%
2562
1709
2679
-4%
50%
2.0
1.3
2.1
-4%
50%
Nestle
22386
24919
22561
-1% -10%
3845
4946
4309 -11%
-22%
2406
3068
2805
-14%
-22%
25.0
31.8
29.1
-14%
-22%
Pidilite Industries
16046
12954
15694
3898
2579
3943
51%
2678
1572
2722
-2%
70%
5.2
3.1
5.3
-2%
70%
2%
24%
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
-1%
| Emkay Strategy | 11th July, 2017 | 20
©
Emkay
Emkay Universe Q1FY18 Result Preview
Your success is our success
Net Sales (Rs m n)
Com pany Nam e
Q1FY18 Q4FY17
Grow th (%)
Ebitda (Rs m n)
Q1FY17
YoY
QoQ Q1FY18 Q4FY17
-2%
Grow th (%)
APAT (Rs m n)
Grow th (%)
EPS (Rs)
Grow th (%)
Q1FY17
YoY
QoQ Q1FY18 Q4FY17 Q1FY17
YoY
QoQ Q1FY18 Q4FY17 Q1FY17
YoY
QoQ
1701
-3%
-3%
723
882
774
-7%
-18%
3.4
4.2
3.7
-7%
-18%
710 252%
-35%
Engineering & Capital Goods
ABB
20697
21688
21015
-5%
1656
1714
BHEL
50040
96882
56225 -11% -48%
2502
6509
Blue Star
12822
13756
12091
6%
-7%
769
756
Cummins India
11349
11844
12590 -10%
-4%
1589
1700
1407
2156
778
81%
-35%
0.6
0.9
0.3
81%
2%
400
372
514
-22%
8%
4.2
3.9
5.4
-22%
8%
2063 -23%
-7%
1474
1585
1812
-19%
-7%
5.3
5.7
6.5
-19%
-7%
-51%
137%
9.9
4.2
20.2
-51%
137%
-41%
1.1
1.8
-1.9
Dynamatic Technologies
3730
3783
3946
-1%
405
388
GE T&D India
9043
11963
8559
6% -24%
814
1097
-299
Kalpataru Pow er
11145
14963
11537
-3% -26%
1170
1573
KEC International
17082
28492
17487
-2% -40%
1623
3012
Siemens
22779
29288
26204 -13% -22%
1918
2786
2561
3619
2709
-5% -29%
675
544
777
1286
814
-4% -40%
3
102
9773
14905
10021
-2% -34%
782
1732
Techno Electric
TD Pow er Systems
Thermax
Triveni Turbine
-5%
-62%
1%
765
479 -15%
4%
63
27
128
-26%
274
461
-474
1308 -11%
-26%
573
896
645
-11%
-36%
3.7
5.8
4.2
-11%
-36%
1496
8%
-46%
485
1456
309
57%
-67%
1.9
5.7
1.2
57%
-67%
2332 -18%
-31%
1234
1791
1300
-5%
-31%
3.5
5.0
3.7
-5%
-31%
-5%
24%
431
333
485
-11%
30%
-10%
31%
15 -78%
-97%
-32
80
-22
493
531
490
1%
-7%
712
804
-3%
-55%
-41%
3.8
2.9
4.2
-1.0
2.4
-0.7
-7%
4.1
4.5
4.1
1%
1810
1829
1617
12%
-1%
362
371
338
7%
-3%
280
266
268
4%
5%
0.8
0.8
0.8
4%
5%
20659
20351
18500
12%
2%
2169
2219
1995
9%
-2%
1702
1989
1567
9%
-14%
5.1
6.0
4.7
9%
-14%
eClerx Services
3371
3315
3403
-1%
2%
1173
1116
1260
-7%
5%
834
749
960
-13%
11%
20.8
18.7
23.2
-10%
11%
Firstsource Solutions
8873
8923
8935
-1%
-1%
933
990
1192 -22%
-6%
566
648
733
-23%
-13%
0.8
1.0
1.1
-23%
-13%
122020
120530
113360
8%
1%
26236
26490
25210
4%
-1%
21003
23280
20430
3%
-10%
14.8
16.5
14.5
3%
-10%
9563
9605
8689
10%
0%
1525
1623
1345
13%
-6%
1146
1139
991
16%
1%
3.9
3.8
3.3
18%
3%
169391
171200
167820
1%
-1%
44782
46580
44470
1%
-4%
34628
36030
34340
1%
-4%
15.1
15.8
15.0
1%
-4%
L&T Infotech
17145
17271
15889
8%
-1%
3501
3689
3382
4%
-5%
2517
2547
2358
7%
-1%
14.4
14.6
13.9
4%
-1%
Mindtree
13117
13181
13276
-1%
0%
1811
1869
1951
-7%
-3%
1018
972
1235
-18%
5%
6.1
5.8
7.3
-17%
5%
Mphasis
15039
15060
15167
-1%
0%
2410
2385
2445
-1%
1%
1852
1842
2043
-9%
1%
8.8
8.8
9.7
-9%
1%
14%
Voltas
IT Services
HCL Tech
Hexaw are Technologies
Infosys
MPS
703
716
619
-2%
231
229
210
10%
1%
164
200
168
-2%
-18%
8.8
10.7
9.0
-2%
-18%
NIIT
2699
3611
2603
4% -25%
247
172
222
11%
44%
227
303
74
207%
-25%
1.4
1.8
0.4
212%
-25%
NIIT Tech
7123
7447
6707
6%
-4%
1233
1524
1015
21%
-19%
699
1004
285
145%
-30%
11.5
16.4
4.7
145%
-30%
Persistent Systems
7404
7271
7018
6%
2%
1285
1188
1058
21%
8%
854
728
733
17%
17%
10.7
9.1
9.2
17%
17%
293845
296420
293039
0%
-1%
77901
81330
78369
-1%
-4%
63635
66080
63159
1%
-4%
32.3
33.5
32.1
1%
-4%
TCS
Tech Mahindra
Wipro
75354
74950
69209
9%
1%
9216
8987
134541
140620
136976
-2%
-4%
21117
24828
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
10290 -10%
22847
-8%
3%
6444
5880
7500
-14%
10%
7.2
6.6
8.4
-14%
10%
-15%
20007
22611
20518
-2%
-12%
4.1
4.7
4.2
-3%
-12%
| Emkay Strategy | 11th July, 2017 | 21
©
Emkay
Emkay Universe Q1FY18 Result Preview
Your success is our success
Net Sales (Rs m n)
Com pany Nam e
Q1FY18 Q4FY17
Grow th (%)
Q1FY17
YoY
Ebitda (Rs m n)
QoQ Q1FY18 Q4FY17
Grow th (%)
Q1FY17
YoY
1%
APAT (Rs m n)
Grow th (%)
QoQ Q1FY18 Q4FY17 Q1FY17
YoY
EPS (Rs)
Grow th (%)
QoQ Q1FY18 Q4FY17 Q1FY17
YoY
QoQ
68%
Media & Entertainm ent
DB Corp
5932
5171
5704
4%
15%
1822
1122
1812
62%
1079
642
1038
4%
Dish TV
7375
7086
7786
-5%
4%
2284
1906
Entertainment Netw ork
1170
1655
1108
6% -29%
202
352
HMVL
2538
2343
2392
6%
8%
595
573
569
HT Media
6023
5853
6147
-2%
3%
832
731
Inox Leisure
3829
2885
3370
14%
33%
772
251
Jagran Prakashan
4854
4671
4734
3%
4%
1352
1196
1304
PVR
6694
4942
5702
17%
35%
1368
583
1166
2646 -14%
20%
89
-283
409
-78%
294 -31%
-43%
71
138
167
-58%
-49%
5%
4%
529
464
487
9%
643
29%
14%
400
255
224
78%
622
24% 208%
322
16
251
13%
789
759
736
17% 135%
523
15
453
Sun TV Netw ork
7922
5825
7608
4%
36%
4279
3936
4364
-2%
9%
2490
2359
2331
7%
Zee Entertainment
14895
15280
15716
-5%
-3%
4935
4687
4532
9%
5%
3485
2425
3302
Coal India
206707
247802
184219
12% -17%
28416
33876
42548 -33%
-16%
21143
27179
Hindalco
95232
117471
81593
17% -19%
Hindustan Zinc
51241
67562
28041
83% -24%
8594
13472
11247 -24%
-36%
1852
25929
37480
11303 129%
-31%
19109
160772
179172
128858
25% -10%
3103
2527
1858
19720
25497
4%
5.9
3.5
5.7
4%
0.1
-0.3
0.4
-78%
1.5
2.9
3.5
-58%
-49%
14%
7.2
6.3
6.6
9%
14%
56%
1.7
1.1
1.0
78%
56%
28% 1886%
3.3
0.2
2.6
28% 1886%
4%
2.5
2.4
2.3
15% 3459%
11.2
0.3
9.7
6%
6.3
6.0
5.9
7%
6%
6%
44%
3.6
2.5
3.4
6%
44%
30652
-31%
-22%
3.4
4.4
4.9
-31%
-22%
5028
2943
-37%
-63%
1.0
2.6
1.5
-37%
-63%
30570
10369
84%
-37%
4.5
7.2
2.5
84%
-37%
-53%
7%
68%
7%
4%
15% 3459%
Metals & Mining
JSW Steel
MOIL
National Aluminium Co
NMDC
27151
31649
32694 -17%
-14%
4778
10086
11090
-57%
-53%
2.0
4.2
4.6
-57%
23%
1350
1218
342 295%
11%
1186
1158
565
110%
2%
8.9
8.7
3.4
165%
2%
16661
18% -23%
2150
4275
1946
10%
-50%
992
2714
1350
-27%
-63%
0.5
1.4
0.5
-2%
-63%
54%
48%
30%
34%
206%
34%
206%
67%
26518
28721
17207
-8%
12089
9322
8164
SAIL
122073
142342
103357
18% -14%
-1274
-2644
2338
Tata Steel
289524
353049
264061
10% -18%
40942
70252
32420
26%
Vedanta
181456
236914
153092
19% -23%
56301
73501
34396
64%
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
9515
3107
7113
-7268
-7717
-4813
-42%
10511
33518
3400
209%
-23%
12424
15249
6150
102%
2.4
0.8
1.8
-1.8
-1.9
-1.2
-69%
10.8
34.5
3.5
209%
-69%
-19%
4.2
5.1
2.1
102%
-19%
| Emkay Strategy | 11th July, 2017 | 22
©
Emkay
Emkay Universe Q1FY18 Result Preview
Your success is our success
Net Sales (Rs m n)
Com pany Nam e
Grow th (%)
YoY
Ebitda (Rs m n)
QoQ Q1FY18 Q4FY17
Grow th (%)
Q1FY18 Q4FY17
Q1FY17
Q1FY17
YoY
BPCL
494238
570365
469387
5% -13%
19574
22123
39192 -50%
GAIL
117629
134520
107067
10% -13%
18558
15553
15933
2683
2446
2581
4%
10%
2303
2013
2333
14440
14002
12248
18%
3%
2413
1462
2190
HPCL
494197
515247
448408
10%
-4%
15378
Indian Oil
904377 1003375
860807
5% -10%
59543
APAT (Rs m n)
Grow th (%)
QoQ Q1FY18 Q4FY17 Q1FY17
YoY
EPS (Rs)
Grow th (%)
QoQ Q1FY18 Q4FY17 Q1FY17
YoY
QoQ
Oil & Gas
Gujarat State Petronet
Gujarat Gas
-12%
10840
18417
26205
-59%
-41%
7.5
12.7
18.1
-59%
-41%
16%
19%
10507
10482
13352
-21%
0%
6.2
6.2
7.9
-21%
0%
-1%
14%
1288
1270
1213
6%
1%
2.3
2.3
2.2
6%
1%
10%
65%
905
330
759
19%
174%
6.6
2.4
5.5
19%
174%
33355
36268 -58%
-54%
7012
22682
20984
-67%
-69%
6.9
22.3
20.6
-67%
-69%
110317
136835 -56%
-46%
28260
68393
82690
-66%
-59%
5.8
14.1
17.0
-66%
-59%
Indraprastha Gas
10566
10019
8997
17%
5%
2707
2122
2596
4%
28%
1605
1341
1480
8%
20%
11.5
9.6
10.6
8%
20%
Oil India
24335
25119
22212
10%
-3%
8188
6712
8629
-5%
22%
5137
11710
4944
4%
-56%
6.4
14.6
6.2
4%
-56%
ONGC
185992
217140
177848
5% -14%
78230
89305
84304
-7%
-12%
39376
66498
42325
-7%
-41%
3.1
5.2
3.3
-7%
-41%
Petronet LNG
74823
63651
53373
620157
745980
534960
Aurobindo Pharma
40228
36416
37259
8%
Cadila Healthcare
25496
25249
23331
9%
Cipla
38264
35820
36500
Divi's Lab
10410
10667
Dr. Reddy's Lab
35341
35542
Glenmark Pharma
Reliance Industries
40%
18%
6689
6163
6425
4%
9%
4058
4708
3779
7%
-14%
5.4
6.3
5.0
7%
-14%
16% -17%
109939
112800
108170
2%
-3%
78190
81510
75480
4%
-4%
24.0
25.1
22.5
7%
-4%
10%
8485
7712
8890
-5%
10%
5719
5825
5779
-1%
-2%
9.8
10.0
9.9
-1%
-2%
1%
4952
4636
5239
-5%
7%
3413
3855
3564
-4%
-11%
3.3
3.8
3.5
-4%
-11%
5%
7%
6548
5062
6402
2%
29%
3218
2096
3680
-13%
54%
4.0
2.6
4.6
-13%
54%
10088
3%
-2%
3805
3910
4045
-6%
-3%
2844
2883
3018
-6%
-1%
10.7
10.9
11.4
-6%
-1%
32447
9%
-1%
6183
6219
4946
25%
-1%
3226
3510
2436
32%
-8%
19.5
21.2
14.7
32%
-8%
12% -10%
-35%
Pharm aceuticals
22069
24572
19694
4526
5088
3791
19%
-11%
2578
3947
2269
14%
-35%
9.1
14.0
8.0
14%
Granules India
3864
3622
3498
10%
7%
841
774
685
23%
9%
492
457
390
26%
8%
2.2
2.0
1.7
26%
8%
Ipca Lab
7439
6658
8422 -12%
12%
1186
677
1285
-8%
75%
574
444
557
3%
29%
4.5
3.5
4.4
3%
29%
Lupin
43637
42533
44677
-2%
3%
9512
11053
13363 -29%
-14%
4577
7025
9102
-50%
-35%
10.2
15.6
20.2
-50%
-35%
Sun Pharma
71998
71370
82430 -13%
1%
18777
18490
29210 -36%
2%
11836
15252
20337
-42%
-22%
4.9
6.3
8.5
-42%
-22%
Torrent pharma
14429
14340
15450
-7%
1%
3083
2950
4370 -29%
5%
1718
2230
2920
-41%
-23%
10.2
13.2
17.3
-41%
-23%
21956
15720
20120
9%
40%
5730
2040
5110
12% 181%
2799
-460
2360
19%
3565
3333
3525
1%
7%
1330
1257
1113
19%
6%
644
825
550
17%
JSW energy
22924
18621
24500
-6%
23%
9998
5869
11173 -11%
70%
2729
248
3665
NHPC
23127
13624
21816
6%
70%
14339
2231
13414
7% 543%
10289
1302
7847
31%
690%
NTPC
201467
199052
189750
6%
1%
55406
51743
50833
9%
7%
24761
22118
23705
4%
Pow er Grid Corporation
64979
67120
61199
6%
-3%
57743
56185
54196
7%
3%
19208
20133
18018
Reliance Pow er
24665
24665
26787
-8%
0%
10442
11056
11420
-9%
-6%
2683
2159
3405
Pow er
CESC
Gujarat Industries Pow er
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
16.1
22.1
13.1
24%
-27%
-22%
4.3
5.5
3.6
17%
-22%
-26% 1002%
1.7
0.2
2.2
0.9
0.1
0.7
31%
690%
12%
3.0
2.7
2.9
4%
12%
7%
-5%
3.7
3.8
3.4
7%
-5%
-21%
24%
1.0
0.8
1.2
-21%
24%
-26% 1002%
| Emkay Strategy | 11th July, 2017 | 23
©
Emkay
Emkay Universe Q1FY18 Result Preview
Your success is our success
Net Sales (Rs m n)
Com pany Nam e
Q1FY18 Q4FY17
Grow th (%)
Ebitda (Rs m n)
Q1FY17
YoY
QoQ Q1FY18 Q4FY17
36%
11%
14914
Grow th (%)
APAT (Rs m n)
Grow th (%)
YoY
EPS (Rs)
Q1FY17
YoY
QoQ Q1FY18 Q4FY17 Q1FY17
13335
12077
23%
12%
7602
8573
8651
-12%
-11%
3.7
4.1
964
1147
1002
-4%
-16%
521
662
598
-13%
-21%
1.1
40%
-17%
1650
743
202
717%
122%
Grow th (%)
QoQ Q1FY18 Q4FY17 Q1FY17
YoY
QoQ
4.2
-12%
-11%
1.4
1.2
-13%
-21%
14.6
6.6
1.8
717%
122%
44%
0.3
0.2
-0.4
-26%
2.9
3.9
2.5
15%
-26%
Port
Adani Ports
Gujarat Pipavav
24729
22315
18172
1574
1746
1672
-6% -10%
5500
5537
4592
20%
-1%
1650
1981
1175
18%
Real Estate
Brigade Enterprises
DLF
22000
22252
18675
-1%
7700
7102
7448
3%
8%
600
416
-678
Kolte-Patil Developers
2150
3334
1798
20% -36%
559
684
591
-5%
-18%
220
298
191
15%
Oberoi Realty
3050
2896
3200
-5%
5%
1647
1515
1666
-1%
9%
1050
1018
1088
-4%
3%
3.1
3.0
3.2
-4%
3%
Phoenix Mills
4500
4544
4424
2%
-1%
2000
1997
2023
-1%
0%
450
323
477
-6%
39%
2.9
2.1
3.1
-6%
39%
12500
14437
9449
32% -13%
2375
2714
1706
39%
-12%
600
442
470
28%
36%
1.6
1.2
1.3
28%
36%
5700
5888
5701
0%
-3%
1083
1202
997
9%
-10%
450
470
360
25%
-4%
4.6
4.8
3.7
25%
-4%
ABFRL
16358
16149
14151
16%
1%
810
1140
701
16%
-29%
-193
218
-208
-0.3
0.3
-0.2
Arvind
23747
24648
21041
13%
-4%
2627
2235
2380
10%
18%
959
974
699
37%
-1%
4.4
4.4
3.2
37%
-1%
9870
9874
8038
23%
0%
985
948
778
27%
4%
129
192
35
265%
-33%
0.7
1.0
0.2
265%
-33%
Prestige Estates
Sobha
44%
Retail
Future Lifestyle
Monte Carlo Fashions
Page Industries
PC Jew eller
822
956
756
98
-96
95
3%
36
-71
20
75%
1.6
-3.3
0.9
75%
6765
4989
5724
18%
9% -14%
36%
1311
974
1092
20%
35%
827
668
679
22%
24%
74.1
59.9
60.9
22%
24%
19875
21554
16645
19%
-8%
2128
1769
2057
3%
20%
1138
1101
1066
7%
3%
6.4
6.1
6.0
7%
3%
-0.8
1.4
-1.6
22%
2.8
2.3
2.3
24%
22%
Shoppers Stop
8494
9103
7722
10%
-7%
255
525
237
8%
-52%
-66
117
-136
Titan Company
34300
34297
27988
23%
0%
3512
2721
2922
20%
29%
2484
2029
2006
24%
255729 -15%
Telecom m unications
Bharti Airtel
218133
219806
-1%
75836
79060
95745 -21%
-4%
4303
4706
14620
-71%
-9%
1.1
1.2
3.7
-71%
-9%
Bharti Infratel
35642
35204
32106
11%
1%
15505
15723
13946
11%
-1%
7237
5966
7562
-4%
21%
3.8
3.2
4.0
-4%
21%
Idea Cellular
79098
81261
94866 -17%
-3%
19827
21965
30742 -36%
-10%
-6505
-3277
2204
-1.8
-0.9
0.6
Tata Communications
43811
42937
44569
2%
5454
5024
6720 -19%
9%
339
809
1341
1.2
2.8
4.7
-75%
-58%
-2%
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
-75%
-58%
| Emkay Strategy | 11th July, 2017 | 24
©
Emkay
Emkay Universe Q1FY18 Result Preview
Your success is our success
Net Sales (Rs m n)
Com pany Nam e
Q1FY18 Q4FY17
Grow th (%)
Q1FY17
YoY
Ebitda (Rs m n)
QoQ Q1FY18 Q4FY17
Grow th (%)
Q1FY17
YoY
APAT (Rs m n)
Grow th (%)
QoQ Q1FY18 Q4FY17 Q1FY17
YoY
EPS (Rs)
Grow th (%)
QoQ Q1FY18 Q4FY17 Q1FY17
YoY
QoQ
1%
43%
Others
Advanced Enzyme Tech
Apar Industries
990
860
945
5%
15%
452
327
509 -11%
38%
286
200
282
1%
43%
2.6
1.8
2.5
11854
13024
10819
10%
-9%
1276
1095
1102
16%
17%
675
478
456
48%
41%
17.5
12.4
11.9
48%
41%
Apcotex Industries
1160
867
1065
9%
34%
99
71
107
-7%
40%
56
35
69
-18%
59%
2.7
1.7
3.3
-18%
59%
Bajaj Electricals
9894
12639
9594
3% -22%
545
739
564
-3%
-26%
262
384
229
14%
-32%
2.6
3.8
2.3
14%
-32%
Delta Corp
1222
1081
1087
12%
13%
463
344
415
11%
35%
208
114
155
35%
83%
0.8
0.5
0.7
16%
58%
Essel Propack
6051
6126
5280
15%
-1%
1119
1199
976
15%
-7%
465
590
376
24%
-21%
3.0
3.8
2.4
24%
-21%
Grasim Industries
26218
28761
23959
9%
-9%
5177
5254
4975
4%
-1%
3372
3155
3209
5%
7%
36.8
33.8
34.4
7%
9%
Havells India
19921
17102
14668
36%
16%
2463
2296
2004
23%
7%
1642
1715
1456
13%
-4%
2.6
2.7
2.3
13%
-4%
Heritage Foods
5492
7003
6342 -13% -22%
392
339
355
10%
16%
188
147
165
14%
28%
8.1
6.3
7.1
14%
28%
Navin Fluorine
1800
2005
1640
10% -10%
350
391
393 -11%
-10%
226
294
286
-21%
-23%
23.1
30.0
29.3
-21%
-23%
Orient Refractories
1495
1278
1312
14%
17%
558
498
512
9%
12%
297
244
258
15%
22%
2.5
2.0
2.2
15%
22%
Parag Milk Foods
4141
4283
3835
8%
-3%
292
519
330 -11%
-44%
87
328
108
-19%
-73%
1.0
3.9
1.3
-19%
-73%
Prabhat Dairy
3459
3772
2931
18%
-8%
255
298
221
15%
-14%
53
-18
34
56%
Radico Khaitan
4003
3930
4304
-7%
2%
477
469
571 -16%
2%
178
166
220
-19%
SRF
0.5
-0.2
0.3
56%
7%
1.3
1.3
1.7
-19%
7%
16576
14164
12994
28%
17%
2498
2145
2813 -11%
16%
1420
1292
1592
-11%
10%
24.3
22.1
27.2
-11%
10%
Sterlite Tech
6758
7005
6034
12%
-4%
1352
1624
1142
18%
-17%
524
692
378
39%
-24%
1.3
1.7
1.0
37%
-25%
Sterling Tools
1090
985
943
16%
11%
195
153
186
5%
27%
100
76
94
7%
31%
2.8
2.1
2.7
4%
31%
21%
43%
-4%
43%
-4%
Symphony
1846
1841
1526
0%
471
495
390
21%
-5%
446
467
311
Suzlon Energy
17378
49993
16551
5% -65%
1911
13442
1713
12%
-86%
-2391
8903
-2115
Varun Beverages
16772
8792
16606
1%
4025
1372
4847 -17% 193%
1908
67
2647
91%
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
-28% 2756%
6.4
6.7
4.5
-0.5
1.8
-0.4
10.5
0.4
19.8
-47% 2756%
| Emkay Strategy | 11th July, 2017 | 25
©
Emkay
Top-10 Companies
Your success is our success
Ebitda Growth
Net Sales Growth
Hindustan Zinc
82.7%
MOIL
252.3%
Coromandel
International
54.1%
KNR Construction
294.5%
BHEL
67.0%
NMDC
MOIL
50.5%
154.1%
Orient Cement
131.5%
129.4%
Adani Ports
36.1%
Hindustan Zinc
Havells India
35.8%
Vedanta
63.7%
Orient Cement
33.2%
ITD Cementation
Deepak Fertilisers
32.8%
NMDC
48.1%
Prestige Estates
32.3%
DCM Shriram
46.5%
KNR Construction
46.3%
SRF
27.6%
54.2%
Ebitda Margin Growth
PAT Growth
Coromandel International
1423.4%
Brigade Enterprises
717.2%
MOIL
GE T&D India
Future Lifestyle
265.0%
Hindustan Zinc
ITD Cementation
264.7%
Vedanta
Tata Steel
NIIT
209.2%
206.8%
NIIT Tech
145.4%
Prism Cement
136.5%
MOIL
Vedanta
Orient Cement
Gujarat Industries
Power
Coromandel
International
DCM Shriram
109.9%
ITD Cementation
102.0%
Brigade
Enterprises
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
2,508 bps
1,250 bps
1,029 bps
856 bps
658 bps
573 bps
550 bps
540 bps
511 bps
442 bps
| Emkay Strategy | 11th July, 2017 | 26
©
Emkay
Bottom-10 Companies
Your success is our success
Net Sales Growth
Amara Raja Batteries
Ebitda Growth
TD Power Systems
-47.5%
PNC Infratech
Amara Raja Batteries
-29.9%
ITD Cementation
-78.3%
Ashok Leyland
-24.5%
Sanghi Industries
-16.7%
Apollo Tyres
Idea Cellular
-16.6%
Mangalam Cement
Bharti Airtel
-14.7%
-38.5%
-37.4%
-35.7%
-35.5%
-13.4%
Idea Cellular
Siemens
-13.1%
Coal India
Sun Pharma
-12.7%
Entertainment Network
-11.7%
-43.6%
Sun Pharma
Heritage Foods
Ipca Lab
-56.5%
-33.2%
-31.5%
PNC Infratech
-30.1%
Ebitda Margin Growth
PAT Growth
Dish TV
-78.3%
-74.7%
Sun Pharma -936 bps
Tata Communications
Mangalam Cement
Bharti Airtel
Ashok Leyland
Amara Raja Batteries
-74.6%
Coal India
-935 bps
Entertainment Network
-933 bps
Mangalam Cement -877 bps
-70.6%
JSW Steel
-61.5%
-59.2%
Advanced Enzyme Tech
-814 bps
-811 bps
Entertainment Network
-57.6%
Lupin
JSW Steel
-56.9%
Shree Cements
Dynamatic Technologies
Lupin
-50.9%
-49.7%
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
-848 bps
Idea Cellular
Torrent Pharma
-764 bps
-734 bps
-691 bps
| Emkay Strategy | 11th July, 2017 | 27
©
Emkay
Top-5 Sectors
Your success is our success
Ebitda Growth
Net Sales Growth
Metals & Mining
18.1%
Retail
17.8%
Real Estate
10.7%
Agri Input & Chemicals
14.5%
Retail
14.3%
Engineering & Capital
Goods
15.8%
Cement
Agri Input & Chemicals
14.0%
Metals & Mining
5.5%
13.7%
Real Estate
9.0%
PAT Growth
Ebitda Margin Growth
Engineering & Capital Goods
137 bps
Agri Input & Chemicals
Power
128 bps
38 bps
33 bps
Media & Entertainment
Real Estate
138.0%
Retail
27.7%
Agri Input & Chemicals
Engineering & Capital
Goods
21.1%
10.9%
-4 bps
Automobiles
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
Metals & Mining
7.9%
| Emkay Strategy | 11th July, 2017 | 28
©
Emkay
Bottom-5 Sectors
Your success is our success
Ebitda Growth
Net Sales Growth
Auto Ancillaries -27.6%
Telecommunications -11.8%
Engineering & Capital Goods
Telecommunications
-4.5%
Automobiles
Pharmaceuticals
-2.1%
Pharmaceuticals
-20.7%
Building Materials
-0.2%
Auto Ancillaries
-17.4%
0.3%
-8.1%
Automobiles
-2.4%
PAT Growth
Ebitda Margin Growth
Pharmaceuticals -452 bps
Telecommunications
Auto Ancillaries
Cement
Real Estate
Telecommunications
Pharmaceuticals
-348 bps
Auto Ancillaries
-339 bps
-238 bps
-191 bps
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
Building Materials
Cement
-79.1%
-25.6%
-23.8%
-10.9%
-6.8%
| Emkay Strategy | 11th July, 2017 | 29
©
Emkay
Frequency Distribution (No. of Companies)
Your success is our success
Net Sales Growth
80
140
120
119
PAT Growth
75
70
60
100
50
80
40
35
60
30
44
22
40
20
20
11
20
10
5
4
25%-50%
>50%
0
0
0%-10%
10%-25%
<0%
0%-15%
15%-30%
30%-50%
>50%
EBITDA Growth
90
80
77
70
56
60
50
40
30
22
20
10
8
7
30%-50%
>50%
0
<0%
0%-15%
15%-30%
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
| Emkay Strategy | 11th July, 2017 | 30
©
Emkay
Frequency Distribution (Percentage)
Your success is our success
Net Sales Growth
PAT Growth
3% 2%
12%
7%
26%
46%
14%
69%
21%
0%-10%
10%-25%
25%-50%
>50%
<0%
0%-15%
15%-30%
30%-50%
>50%
EBITDA Growth
5%
4%
13%
45%
33%
<0%
0%-15%
15%-30%
30%-50%
>50%
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
| Emkay Strategy | 11th July, 2017 | 31
©
Emkay
Your success is our success
Sectoral Analysis of Q1FY18 Results
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
| Emkay Strategy | 11th July, 2017 | 32
©
Agri Input - Agrochemicals
Emkay
Your success is our success

Timely arrival of the Southwest monsoon has perked up the Farm sector sentiments. Rainfall during 1st June to 9th July
2017 stood 2% below the long period average after being higher by 5% till 5th July'17. Distribution of rainfall has also been
good with rainfall having covered most part of the country.

Kharif crops’ acreages rose 9% yoy to 40.4mn hectares as on 7th Jul'17. Cotton sowing increased by 6% yoy. Sowing of
Coarse Cereals rose by 15% yoy while Pulses surged ~23% yoy (except Tur whose acreage declined by 6% yoy) and
Sugarcane increased 6% yoy. Paddy acreage climbed by 6% yoy while that of Oilseeds increased by 4.5% yoy.

We believe that volume growth is likely to be flat to negative for the Pesticides industry owing to uncertainty over GST.
Based on our channel checks, channel partners purchased lower inventory in June, as there was no clarity on tax rebate
on existing inventory.

Q1FY18 results could be impacted by lower offtake during June'17. Also, major pesticide consumption takes place July
onwards. So, future placement of inventory was lower compared to previous year. On the exports side, we expect LatAm,
Europe and USA to aid volume growth.

Aggregate revenue of domestic companies could drop by 2% yoy. Overall revenue growth (including exports) is estimate
at 5% yoy, driven by 12% yoy growth in Sharda and 13% growth in UPL's export segment. Aggregate EBITDA and
aggregate PAT are expected to post a growth of 6% yoy and 4% yoy, respectively.

Valuations of all Agrochemical companies remain rich, as stocks have significantly run-up post the expectation of normal
monsoon. While a normal monsoon could boost Agrochemicals’ demand and drive up earnings growth, we await better
entry point for companies under our coverage. PI Industries is our top pick in this space due to its global presence and
resilient business model.
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
| Emkay Strategy | 11th July, 2017 | 33
©
Emkay
Agri Input - Agrochemicals
Your success is our success
Jun’17E
Mar’17
Jun’16
% Chg
YoY
Net Sales (Rs mn)
8,127
2,380
8,555
-5.0%
1,679
-581
1,883
-10.8%
20.7
-24.4
1,220
-361
1,312
-7.0%
34.5
-10.2
37.1
-7.0%
1,924
1,587
1,988
285
342
287
14.8
21.6
14.4
Name
% Chg
QoQ
Comments
Bayer CropScience
CMP(Rs)
4,629
Mkt Cap (Rs bn)
164
EBITDA (Rs mn)
Reco
Hold
EBITDA Margin (%)
Target Price (Rs)
4,625
PAT (Rs mn)
% Upside
0%
EPS (Rs)
CMP(Rs)
816
Net Sales (Rs mn)
Mkt Cap (Rs bn)
41
EBITDA (Rs mn)
22.0 -135 bps
241.5% We expect Bayer to report decline in revenues by 5% yoy on
the back of lower offtake due to GST. We model for marginal
n.a contraction of 135bps in EBIDTA margins to 20.7% while
EBIDTA is estimated to record 11% yoy fall. We estimate
- PAT de-growth of 7% yoy.
n.a
n.a
Dhanuka Agritech
Reco
Accumulate EBITDA Margin (%)
21.3% Dhanuka’s estimated 3% yoy drop in revenues as lack of
clarity arising due to GST could impact purchasing of
-0.8% -16.7% pesticides. However, EBITDA margins could improve by
40bps to 14.8% on the back of higher sales of specialty
40 bps -676 bps products. PAT growth could be in the range of 6% yoy.
-3.2%
Target Price (Rs)
900
PAT (Rs mn)
206
242
193
6.3%
-15.1%
% Upside
10%
EPS (Rs)
4.1
4.8
3.9
6.3%
-15.1%
CMP(Rs)
663
Net Sales (Rs mn)
3,198
1,760
3,049
4.9%
Mkt Cap (Rs bn)
14
EBITDA (Rs mn)
379
134
367
3.2%
Insecticides India
Reco
Buy
EBITDA Margin (%)
11.9
7.6
12.0
-10 bps
Target Price (Rs)
737
PAT (Rs mn)
209
60
181
15.5%
% Upside
11%
EPS (Rs)
10.1
2.9
8.7
15.5%
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
81.7% Revenue growth of 5% yoy will be primarily driven by strong
performance in the technical segment as we anticipate
183.6% higher production of byspyribac sodium. We build 20%
revenue growth in technical segment but expect formulation
426 bps revenue to remain flat. Margins may see marginally
contraction of 10bps to 12% resulting in 3% yoy growth in
250.9% EBITDA. PAT growth is estimates at 15% yoy due to lower
interest expense.
250.9%
| Emkay Strategy | 11th July, 2017 | 34
©
Emkay
Agri Input - Agrochemicals
Your success is our success
Name
Jun’17E
Mar’17
Jun’16
% Chg
YoY
% Chg
QoQ
Comments
PI Industries
CMP(Rs)
802
Net Sales (Rs mn)
6,999
6,273
6,834
2.4%
Mkt Cap (Rs bn)
110
EBITDA (Rs mn)
1,606
1,537
1,656
-3.0%
Reco
Buy
EBITDA Margin (%)
22.9
24.5
1,267
1,352
1,269
-0.1%
9.3
9.9
9.3
-0.1%
4,789
3,667
4,677
2.4%
24.2 -130 bps
Target Price (Rs)
1,076
PAT (Rs mn)
% Upside
34%
EPS (Rs)
CMP(Rs)
244
Net Sales (Rs mn)
Mkt Cap (Rs bn)
47
EBITDA (Rs mn)
784
416
752
4.4%
11.6% We estimate 5% yoy drop in domestic business mainly
driven destocking ahead of implementation of GST. CSM
4.5% business to register 10% yoy growth as marginal revival in
global demand environment. Net revenues are expected to
-155 bps remain muted at 2.5% yoy growth. Margins are likely to
contract by 130bps to 23%. APAT adjusted for forex impact
-6.2% should remain flat. Order book position is likely to remain at
similar level of US$1bn.
-5.8%
Rallis India
Reco
Hold
EBITDA Margin (%)
16.4
11.4
16.1
31 bps
Target Price (Rs)
246
PAT (Rs mn)
599
311
562
6.7%
% Upside
1%
EPS (Rs)
3.1
1.6
2.9
6.7%
CMP(Rs)
481
Net Sales (Rs mn)
3,517
5,949
3,141
Mkt Cap (Rs bn)
43
EBITDA (Rs mn)
721
1,626
659
30.6% Rallis is expected to report muted set of numbers despite
higher growth of 10% in Metahelix. In the domestic business
88.4% revenue growth will be lower by 5-8% due to GST while we
anticipate single digit growth in exports. Margins are likely to
503 bps improve marginally by 30bps resulting in 4% increase in
EBIDTA and 7% yoy increase in PAT. Metahelix revenues to
92.5% increase by 10% yoy to Rs 2,086mn while EBITDA margins
to hold up at 26%.
92.5%
Sharda Cropchem
Reco
Hold
EBITDA Margin (%)
20.5
27.3
21.0
Target Price (Rs)
533
PAT (Rs mn)
449
986
408
% Upside
11%
EPS (Rs)
5.0
11.0
4.5
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
-40.9% We estimate revenue growth of 12% yoy. Margins are likely
to remain under pressure as prices of chemicals has
9.4% -55.6% increased in China post shut down on many facilities. PAT
growth is estimated at 10% yoy. New registrations will be
-49 bps -682 bps key driver for revenue growth. Demand environment in
LatAm will key to watch out.
9.9% -54.5%
12.0%
9.9%
-54.5%
| Emkay Strategy | 11th July, 2017 | 35
©
Emkay
Agri Input - Agrochemicals
Your success is our success
Name
Jun’17E
Mar’17
Jun’16
% Chg
YoY
% Chg
QoQ
39,506
53,910
36,440
8.4%
7,901
11,261
6,987
13.1%
20.0
20.9
19.2
80 bps
4,582
8,287
4,300
6.5%
-44.7%
10.4
18.7
9.7
6.5%
-44.7%
Comments
UPL
CMP(Rs)
849
Net Sales (Rs mn)
Mkt Cap (Rs bn)
431
EBITDA (Rs mn)
Reco
Accumulate EBITDA Margin (%)
Target Price (Rs)
944
PAT (Rs mn)
% Upside
11%
EPS (Rs)
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
-26.7% UPL revenue growth in domestic segment could come under
pressure due to GST. However, other geographies are likely
-29.8% to post healthy volume growth. We estimate 8% revenue
growth primarily driven by increased volumes. We estimate
-89 bps 17% EBIDTA growth with 80 bps margin expansion to 20%.
| Emkay Strategy | 11th July, 2017 | 36
©
Agri Input – Fertiliser and Chemicals
Emkay
Your success is our success

Under the GST, Fertilisers will be taxed at 5% while most of RM such as Ammonia, Phosphoric Acid, Sulphur etc will be
taxed at 18%. Due to the inverted duty structure, the input credit will be large and delay in receiving refunds from the tax
department will lead to higher working capital requirement for fertiliser manufacturers. However, companies such as
Deepak Fertilisers and GSFC also manufacture other products such as TAN, Caprolactam etc, where input as well as
output is taxed at 18%. Therefore, the tax credit arising from Fertilisers business will be offset by tax liability arising from
Chemicals business. As a result, working capital requirement for these companies is not expected to increase unlike other
fertiliser players.

Global fertiliser prices continue to remain soft. Global urea prices fell 5% yoy during Q1FY18 to ~US$190/MT. DAP prices
remained sideways yoy as well as qoq at US$355/MT. MOP prices are down 18% yoy to US$214/MT due to sluggish
demand and excess production.

Due to lower placement during Q4FY17, channel inventory at the start of the season stood lower compared to last year.
This is likely to drive volume growth for the complex fertiliser companies and we expect 20-25% yoy volume growth during
Q1FY18.

We expect Coromandel International to report 23% yoy increase in complex volumes to 0.59mn MT while trading volumes
could remain muted at 5% yoy. GSFC will post 10%+ yoy fertiliser volume growth, led by 26% yoy growth in complexes
while urea volume is down 20% yoy. Deepak Fertilisers' dispatch volume growth of 400% yoy to 0.15mn MT will be driven
by increased manufacturing capacity. Chambal Fertilisers is expected to post 18% yoy drop in urea volumes due to annual
plant shutdown taken in April. DCM's fertiliser trading remains suspended while urea volume is expected to remain flat
yoy.

Despite volume growth in complex fertiliser, realisations are lower by 5-10% compared to last year. Aggregate revenue
growth of fertiliser companies is expected to increase 6% yoy while benefit of lower RM cost and higher operating
leverage will boost EBITDA margins. EBITDA growth is expected at 22% yoy with a higher growth in PAT at 45% yoy.

Chambal Fertilisers and Deepak Fertilisers are our key picks in this space. Chambal is well poised to benefit from (i)
divestment of non-core assets, which will propel return ratios to 15%+ and (ii) new capex in urea of 1.3mn MT and (iii)
improvement in agri input demand. Our positive bias on Deepak Fertilisers stems from (i) commissioning of new fertiliser
facility, which has doubled the capacity from 0.3mn MT to 0.6mn MT (it will further increase to 1.1mn MT); (ii) New capex in
Nitric Acid to cater to increased demand from end user industries and (iii) Restructuring of higher margin TAN and
fertiliser business into separate entity, which in our opinion might eventually get listed separately.
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
| Emkay Strategy | 11th July, 2017 | 37
©
Emkay
Agri Input – Fertiliser and Chemicals
Your success is our success
Name
% Chg
YoY
Jun’17E
Mar’17
Jun’16
16,964
10,773
19,083
-11.1%
1,926
846
11.4
7.9
1,033
587
2.5
1.4
3.4
-26.5%
22,979
22,896
20,595
11.6%
2,252
2,724
886
154.1%
9.8
11.9
4.3 550 bps
1,141
1,443
75 1423.4%
3.9
5.0
0.3 1423.9%
13,875
12,154
10,449
32.8%
1,533
1,229
1,071
43.2%
% Chg
QoQ
Comments
Chambal Fertilisers
CMP(Rs)
131
Net Sales (Rs mn)
Mkt Cap (Rs bn)
55
EBITDA (Rs mn)
Reco
Buy
EBITDA Margin (%)
Target Price (Rs)
139
PAT (Rs mn)
% Upside
6%
EPS (Rs)
57.5% Ex shipping revenues to decline by 6% due to annual plant
shut down undertaken during the month of April. As a result
2,440 -21.0% 127.6% urea production was lower by 15-20% yoy while dispatch
volumes dropped 18% yoy. However, we anticipate higher
12.8 -143 bps 350 bps trading in complexes. EBITDA expected to drop 22% yoy
while currency appreciation could aid the otherwise thin
1,407 -26.5%
75.9% margins in trading business.
75.9%
Coromandel International
CMP(Rs)
410
Net Sales (Rs mn)
Mkt Cap (Rs bn)
120
EBITDA (Rs mn)
Reco
Buy
EBITDA Margin (%)
Target Price (Rs)
418
PAT (Rs mn)
% Upside
2%
EPS (Rs)
CMP(Rs)
289
Net Sales (Rs mn)
Mkt Cap (Rs bn)
25
EBITDA (Rs mn)
0.4% Complex volumes are expected to increase 23% yoy to
0.59mn MT on the back of lower channel inventory coupled
-17.3% with better demand. While trading volume to increase 5%
yoy to 0.21mn MT. However, realizations have declined by
-210 bps 10% yoy. We expect 12% revenue growth. Non fertiliser
revenue to increase 15%. EBIDTA margins to improve by
-20.9% 550bps to 9.8% led by lower input prices. PAT is likely to
surge.
-20.9%
Deepak Fertilisers
Reco
Buy
EBITDA Margin (%)
11.0
10.1
10.2
80 bps
Target Price (Rs)
351
PAT (Rs mn)
669
519
347
92.8%
14.2% Own manufactured fertiliser volume to increase to 0.15mn
MT (+400% yoy) due to new capacity and lower cost of
24.8% imported gas. Fertiliser EBIT margins at 5%. Chemical
revenues growth expected at 11% while EBIT could drop by
94 bps 11% yoy.. Chemical margins to contract by 350bps yoy to
14%. We should closely watch the development on resuming
29.1% its gas supply under APM.
% Upside
22%
EPS (Rs)
7.6
5.9
3.9
92.8%
29.1%
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
| Emkay Strategy | 11th July, 2017 | 38
©
Emkay
Agri Input – Fertiliser and Chemicals
Your success is our success
Name
Jun’17E
Mar’17
Jun’16
% Chg
YoY
16,518
17,090
15,137
9.1%
3,495
2,224
2,385
46.5%
21.2
13.0
2,456
1,578
1,668
47.2%
15.0
9.7
10.2
47.2%
11,625
16,067
10,821
7.4%
1,386
1,149
979
41.5%
% Chg
QoQ
Comments
DCM Shriram
CMP(Rs)
361
Net Sales (Rs mn)
Mkt Cap (Rs bn)
59
EBITDA (Rs mn)
Reco
Accumulate EBITDA Margin (%)
Target Price (Rs)
406
PAT (Rs mn)
% Upside
12%
EPS (Rs)
CMP(Rs)
123
Net Sales (Rs mn)
Mkt Cap (Rs bn)
49
EBITDA (Rs mn)
15.8 540 bps
-3.3% We expect healthy growth coming from sugar and Chemical
business. We expect 22% yoy growth in sugar revenue and
57.1% 200% yoy increase in EBIT due to higher realizations.
Chemical revenues to increase 42% due to new capacity but
814 bps EBIT margins to remain muted due to increase in coal
prices. Agri business to witness tepid growth due to
55.7% destocking due to GST. Company’s EBIDTA is expected
increase 46% yoy on improvement in sugar and fertiliser
55.7%
business coupled with higher margins in bioseeds.
GSFC
Reco
Buy
EBITDA Margin (%)
11.9
7.2
9.0 287 bps
Target Price (Rs)
144
PAT (Rs mn)
828
1,870
463
78.9%
% Upside
17%
EPS (Rs)
2.1
4.7
1.2
78.9%
CMP(Rs)
649
Net Sales (Rs mn)
37,032
35,304
36,519
1.4%
Mkt Cap (Rs bn)
165
EBITDA (Rs mn)
6,332
5,665
6,086
4.1%
Reco
Hold
EBITDA Margin (%)
17.1
16.0
16.7
43 bps
Target Price (Rs)
636
PAT (Rs mn)
2,633
3,106
2,096
25.6%
% Upside
-2%
EPS (Rs)
10.3
12.2
8.2
25.6%
-27.6% Expect 10%+ yoy fertiliser volume growth led by 26% growth
in complexes while urea volume is down 20% yoy. Due to
20.6% lower realizations (-10% yoy) fertiliser revenues/EBIT to post
2%/5% yoy growth. Caprolactam – Benzene spread at
477 bps US$950/MT (+47% yoy) to drive chemical revenue and EBIT
growth. Chemical segment revenues to jump 16% yoy while
-55.7% margins expand 500bps to 12%. Consequently, we expect
EBITDA to increase 42% yoy.
-55.7%
Tata Chemicals
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
4.9% We expect higher volume growth in urea 38% yoy resulting
in 40% yoy growth in fertiliser revenues to Rs5100mn. Prices
11.8% of soda ash is expected to remain firm due to short supply
from China. Higher coal prices to impact margin in domestic
105 bps segment. US operations to remain muted while BMGL to
post improved performance. Demand in the domestic as well
-15.2% as international soda ash business is expected to remain
stable. Overall we estimate marginal 4% growth in EBITDA
-15.2%
while PAT to jump 26% yoy.
| Emkay Strategy | 11th July, 2017 | 39
©
Automobiles
Emkay
Your success is our success
 Q1FY18 Result Expectation: We expect EIM (+24% yoy), TVSL (+20% yoy), MSIL (+18% yoy) and HMCL (+8% yoy)
to report the highest revenue growth in our coverage universe. We expect highest EBITDA growth for EIM (+28%
yoy) and MSIL (+20% yoy), while we expect AL (-44% yoy) and Apollo (-39% yoy) to report a decline in EBITDA. We
expect EIM to report strong margins, led by operating leverage benefit. M&M margins are likely to expand due to
higher FES share. We believe AL’s margin will decline due to fall in M&HCV sales.
 Outlook: We are optimistic and expect positive sentiments starting from July. We expect industry to notch double-
digit growth during FY18 on the back of price reductions post GST. We continue to believe that FY18 would see
strong volume recovery in 2Ws on the back of low base effect aiding H2FY18 numbers and increased rural focus
of govt. CV’s however will remain weak in 2QFY18. We maintain HMCL, MSIL and Eicher as our top picks.
 We continue to believe that the stage is set for a revival in auto demand in FY18/FY19 mainly due to 1) increase in
government capital spending and focus on rural economy, 2) Normal monsoon and higher disposable income, 3)
Normalization of currency situation and 4) low base effect. Among our coverage universe, HMCL, MSIL and Eicher
are our top picks, as they continue to have strong brand equity, extensive distribution network and strong rural
franchise and would be major beneficiaries of demand revival in the next two years. We prefer EIM given the
increasing preference for premium, stylish and differentiated bikes for vast commuter segment in India.
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
| Emkay Strategy | 11th July, 2017 | 40
©
Emkay
Automobiles
Your success is our success
Name
Ashok Leyland
Jun’17E
Mar’17
Jun’16
38,397
66,179
42,588
2,688
7,299
4,763
% Chg
YoY
% Chg
QoQ
Comments
(Standalone)
-42.0% We expect Revenue to declined 10% YoY, as volumes
declined 9% YoY. QoQ we expect 400bps decline in
-43.6% -63.2% EBITDA margin mainly on account of negative operating
leverage.
-418 bps -403 bps
CMP(Rs)
104
Net Sales (Rs mn)
Mkt Cap (Rs bn)
304
EBITDA (Rs mn)
Reco
Hold
EBITDA Margin (%)
7.0
11.0
11.2
PAT (Rs mn)
929
4,801
2,411
-61.5%
-80.6%
EPS (Rs) *
0.3
1.7
0.8
-61.5%
-80.6%
Net Sales (Rs mn)
55,315
48,973
57,480
11,008
9,060
11,763
19.9
18.5
20.5
9,390
8,018
9,784
-4.0%
17.1%
32.5
27.7
33.8
-4.0%
17.1%
19,430
18,844
15,575
24.8%
3.1% RE volumes grew +24% YoY, +3% QoQ.
6,004
5,910
4,789
25.4%
1.6%
30.9
31.4
30.7
15 bps
-46 bps
PAT (Rs mn)
4,290
4,116
3,364
27.5%
4.2%
EPS (Rs)
158.1
150.9
123.3
27.5%
4.2%
Target Price (Rs)
% Upside
90
-13%
Bajaj Auto
CMP(Rs)
(Standalone)
2,708
Mkt Cap (Rs bn)
784
EBITDA (Rs mn)
Reco
Hold
EBITDA Margin (%)
Target Price (Rs)
2,900
PAT (Rs mn)
% Upside
7%
Eicher Motors
CMP(Rs)
Mkt Cap (Rs bn)
Reco
Target Price (Rs)
% Upside
-9.8%
EPS (Rs)
12.9% BAL volumes declined 11%/ YoY; Domestic volumes degrew 23% YoY while exports increased 11%. We expect
-6.4%
21.5% operating margins to decline ~60bps YoY on account of
weaker product mix.
-57 bps 140 bps
-3.8%
(Standalone)
27,852
758
Net Sales (Rs mn)
EBITDA (Rs mn)
Accumulate EBITDA Margin (%)
28,000
1%
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
Build in RE OPM at 30.9% (-50bps QoQ). We expect VECV
profit to be Rs 585mn for the quarter.
| Emkay Strategy | 11th July, 2017 | 41
©
Emkay
Automobiles
Your success is our success
Jun’17E
Mar’17
Jun’16
% Chg
YoY
Net Sales (Rs mn)
80,003
69,152
73,989
8.1%
12,221
9,576
12,301
-0.7%
15.3
13.8
8,597
7,178
8,832
-2.7%
19.8%
43.0
35.9
44.2
-2.7%
19.8%
1,11,530
1,06,121
1,05,247
15,614
12,368
14,885
14.0
11.7
14.1
8,708
7,800
8,706
0.0%
11.6%
14.1
12.7
14.1
0.0%
11.6%
1,76,182
1,83,334
1,49,204
26,604
25,607
22,157
15.1
14.0
14.9
17,491
17,090
14,862
17.7%
2.3%
57.9
56.6
49.2
17.7%
2.3%
Name
Hero MotoCorp
CMP(Rs)
3,682
735
EBITDA (Rs mn)
Reco
Buy
EBITDA Margin (%)
% Upside
3,700
0%
M&M + MVML
CMP(Rs)
Mkt Cap (Rs bn)
Reco
Target Price (Rs)
% Upside
PAT (Rs mn)
EPS (Rs)
1,376
855
Net Sales (Rs mn)
EBITDA (Rs mn)
Accumulate EBITDA Margin (%)
1,450
5%
PAT (Rs mn)
EPS (Rs)
7,433
Net Sales (Rs mn)
Mkt Cap (Rs bn)
2,245
EBITDA (Rs mn)
% Upside
16.6 -135 bps 143 bps
5.1% M&M volume improved 3% yoy. While tractor grew 13%
yoy, automotive segment degrew 4%. For M&M + MVML
4.9%
26.3% we expect EBITDA margin to improve 230 bps QoQ due to
higher sales from FES.
-14 bps 235 bps
6.0%
(Standalone)
CMP(Rs)
Target Price (Rs)
15.7% HMCL volumes increased 6% YoY and increased 14%
QoQ. We expect revenue to increase 8% YoY to Rs80 bn.
27.6%
(Standalone)
Maruti Suzuki
Reco
Comments
(Standalone)
Mkt Cap (Rs bn)
Target Price (Rs)
% Chg
QoQ
Buy
7,100
-4%
EBITDA Margin (%)
PAT (Rs mn)
EPS (Rs)
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
-3.9% We expect revenue to increase 18% YoY. This is mainly on
account of 13% YoY volume growth and 3% YoY realization
20.1%
3.9% growth. EBITDA margins to increase 20bps YoY mainly on
account of favorable product mix.
25 bps 113 bps
18.1%
| Emkay Strategy | 11th July, 2017 | 42
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Emkay
Automobiles
Your success is our success
Name
Tata Motors
CMP(Rs)
Mkt Cap (Rs bn)
Mar’17
Jun’16
% Chg
YoY
% Chg
QoQ
5,92,863
7,72,172
6,58,950
-10.0%
76,993
1,18,327
84,841
-9.3%
-23.2% Expect standalone biz to report OPM of +4%. We expect
Revenue/EBITDA/loss of Rs 97 bn/ Rs 3.9 bn/ Rs 8.6 bn.
-34.9% Expect JLR volumes (ex-China JV) to declined 1% YoY,
13.0
15.3
12.9
11,751
43,767
17,513
-32.9%
For JLR, we expect Revenue/EBITDA/PAT of £5,637 mn /
-73.2% £704 mn / £216 mn.
3.4
12.8
5.1
-32.9%
-73.2%
34,476
28,445
28,809
19.7%
2,620
1,615
2,004
30.8%
7.6
5.7
7.0
1,595
1,268
1,213
31.5%
25.8%
3.4
2.7
2.6
31.5%
25.8%
Comments
(Consolidated)
437
1,396
Net Sales (Rs mn)
EBITDA (Rs mn)
Reco
Buy
EBITDA Margin (%)
Target Price (Rs)
535
PAT (Rs mn)
% Upside
22%
EPS (Rs)
TVS Motor
11 bps -234 bps
25% QoQ. Expect EBITDA margin at 12.5% (-200 bps QoQ).
(Standalone)
CMP(Rs)
573
Net Sales (Rs mn)
Mkt Cap (Rs bn)
272
EBITDA (Rs mn)
Reco
Sell
EBITDA Margin (%)
Target Price (Rs)
370
PAT (Rs mn)
% Upside
Jun’17E
-35%
EPS (Rs)
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
21.2% TVSL volumes grew +12%/19% YoY/QoQ respectively,
Motorcycle and 3W volume declined 2% YoY.
62.2% We expect EBIDA margins to increase YoY to +60 bps on
64 bps 192 bps
account of favorable product mix
| Emkay Strategy | 11th July, 2017 | 43
©
Emkay
Auto Ancillaries
Your success is our success
Name
Apollo Tyres
259
Net Sales (Rs mn)
Mkt Cap (Rs bn)
132
EBITDA (Rs mn)
Reco
Hold
EBITDA Margin (%)
Target Price (Rs)
230
PAT (Rs mn)
-11%
Amara Raja
EPS (Rs)
Jun’16
% Chg
YoY
% Chg
QoQ
34,823
33,256
33,041
5.4%
3,315
3,699
5,388
-38.5%
9.5
11.1
1,595
2,282
3.1
4.5
6.2
-49.3%
14,001
13,445
26,664
-47.5%
1,988
1,844
4,570
-56.5%
14.2
13.7
1,088
992
2,670
-59.2%
9.7%
6.4
5.8
15.6
-59.2%
9.7%
21,124
19,757
20,111
5.0%
2,957
2,618
3,150
-6.1%
14.0
13.3
1,919
1,648
1,961
-2.1%
16.5%
2.3
1.9
2.3
-2.1%
16.5%
Comments
4.7% We expect 5%YoY growth whereas expect EBITDA margin
at 9.5%. For standalone we expect revenue growth of 7%
-10.4% YoY.
16.3 -679 bps -160 bps We expect 160bps QoQ decline in EBITDA margins mainly
on account of higher raw material prices.
3,147
-49.3% -30.1%
-30.1%
(Standalone)
CMP(Rs)
859
Net Sales (Rs mn)
Mkt Cap (Rs bn)
147
EBITDA (Rs mn)
Reco
Mar’17
(Consolidated)
CMP(Rs)
% Upside
Jun’17E
Accumulate EBITDA Margin (%)
Target Price (Rs)
900
PAT (Rs mn)
% Upside
5%
EPS (Rs)
Exide Industries
17.1 -294 bps
4.1% We expect revenue to increase 6% YoY. We expect flat
EBITDA margins QoQ as price increase is likely to offset
7.8% higher lead prices.
49 bps
(Standalone)
CMP(Rs)
230
Net Sales (Rs mn)
Mkt Cap (Rs bn)
195
EBITDA (Rs mn)
Reco
Buy
EBITDA Margin (%)
Target Price (Rs)
250
PAT (Rs mn)
% Upside
9%
EPS (Rs)
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
15.7 -166 bps
6.9% We expect revenue to increase 15% YoY. We expect
EBITDA margins to increase 172bps QoQ mainly on
13.0% account of operating leverage. 10-12% price hikes by the
company is likely to offset higher lead prices.
75 bps
| Emkay Strategy | 11th July, 2017 | 44
©
Emkay
Auto Ancillaries
Your success is our success
Name
Motherson Sumi
% Chg
YoY
Jun’17E
Mar’17
Jun’16
1,14,887
1,12,839
1,04,504
9.9%
8,042
12,543
7.0
11.1
3,728
5,860
2.7
4.2
2.2
18.4%
% Chg
QoQ
Comments
(Consolidated)
CMP(Rs)
311
Net Sales (Rs mn)
Mkt Cap (Rs bn)
655
EBITDA (Rs mn)
Reco
Buy
EBITDA Margin (%)
Target Price (Rs)
390
PAT (Rs mn)
% Upside
25%
EPS (Rs)
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
1.8% We expect Standalone revenue growth of 17% YoY on
market share gain in new models.
9,404
-14.5% -35.9%
For SMR, we expect Euro revenue growth at 15% YoY and
9.0 -200 bps -412 bps expect EBITDA margin at 12% (-90 bps QoQ).
For SMP, we expect a Euro revenue growth of 14% YoY
3,149
18.4% -36.4% and expect OPM at 6.8%ssss
-36.4%
| Emkay Strategy | 11th July, 2017 | 45
©
Building Materials
Emkay
Your success is our success

Demand impacted due to destocking: We expect companies in Building Materials sector to report subdued revenue
growth across categories. Tiles and Sanitaryware are expected to report volume growth in mid-single digit while Plywood
is expected to report volume growth in high single digits. Our channel checks suggest that growth was steady in April-May
but June was impacted due to destocking. GST will be a positive for the Building Material sector as it would accelerate the
shift from Unorganised to Organised.

Margins to drop duet o higher fuel costs : Fuel costs have seen a sharp increase during the quarter due to run-up in
crude oil prices. This will keep the margins of Tiles and Sanitaryware companies under pressure on a yoy basis. Margins
for Kajaria Ceramics are likely to decline 290bps mainly due to higher fuel costs and lower operating leverage. Margins for
HSIL are expected to decline by 340bps due to high fuel costs and increased share of low-margin Consumer Appliances
business. Century Plyboards is likely to improve margins by 30bps yoy, aided by healthy margin profile across
segments.Somany Ceramics’ margins will be healthy despite an increase in fuel cost, aided by better mix hange and costcontrol initiatives.

Revenue to remain subdued: We expect Kajaria Ceramics, Somany Ceramics, Century Plyboards and HSIL to report
revenue growth by 1.6%/-6.5%/9.0%/1.8% yoy, respectively.
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
| Emkay Strategy | 11th July, 2017 | 46
©
Emkay
Building Materials
Your success is our success
Name
Jun’17E
Mar’17
Jun’16
% Chg
YoY
4,422
4,885
4,058
9.0%
% Chg
QoQ
Comments
Century Plyboards
CMP(Rs)
289
Net Sales (Rs mn)
Mkt Cap (Rs bn)
64
EBITDA (Rs mn)
738
838
683
8.0%
Reco
Buy
EBITDA Margin (%)
16.7
17.1
16.8
-15 bps
Target Price (Rs)
300
PAT (Rs mn)
417
559
431
-3.2%
% Upside
4%
EPS (Rs)
1.9
2.5
1.9
-3.2%
CMP(Rs)
672
Net Sales (Rs mn)
6,025
7,207
5,930
1.6%
Mkt Cap (Rs bn)
107
EBITDA (Rs mn)
1,115
1,308
1,271
-12.3%
Reco
Hold
EBITDA Margin (%)
18.5
18.1
21.4 -293 bps
Target Price (Rs)
670
PAT (Rs mn)
585
707
634
-7.8%
% Upside
0%
EPS (Rs)
7.4
8.9
8.0
-7.8%
CMP(Rs)
771
Net Sales (Rs mn)
3,868
5,596
4,139
-6.5%
Mkt Cap (Rs bn)
33
EBITDA (Rs mn)
337
508
335
0.6%
Revenues of Century Plyboards are likely to grow by 9% yoy
aided by healthy growth in laminates. There also been some
-11.9% level of up-stocking in South and East due to lower tax rate
earlier (VAT-5%). Further, EBIT margins are expected to be
-46 bps healthy across categories, we expect overall EBITDA
margins of 16.7% resulting EBITDA growth of 8% yoy to Rs
-25.5% 738mn. APAT is expected to decline by 3.2% yoy to Rs
417mn due to higher depreciation.
-25.5%
-9.5%
Kajaria Ceramics
We expect 1.6% yoy revenue growth for Kajaria Ceramics
impacted due to destocking from second half of May and
-14.8% June. Further, due to lower utilization rates both at owned as
well as JV plant and increase in fuel cost, company’s
36 bps margins is likely to fall by 290 bps yoy. Decline in volumes
and margins is thus expected to result in fall in EBITDA by
-17.3% 12.3% yoy and APAT to decline by 7.8% yoy aided by lower
interest outgo.
-17.3%
-16.4%
Somany Ceramics
Reco
Buy
EBITDA Margin (%)
8.7
9.1
8.1
62 bps
Target Price (Rs)
858
PAT (Rs mn)
170
291
179
-5.1%
% Upside
11%
EPS (Rs)
4.4
7.5
4.6
-5.1%
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
-30.9% Somany Ceramics is likely to report revenue decline of 6.5%
yoy impacted by destocking due to GST and company has
-33.8% also implemented SAP during the quarter. Despite, lower
volumes and thus lower operating efficiency, company is
-38 bps likely to see margin expansion of 60 bps yoy mainly led by
favorable product mix. This is expected to result in EBITDA
-41.5% growth of 0.6% yoy to Rs 337mn and APAT of Rs 170mn
declined by 5.1% yoy.
-41.5%
| Emkay Strategy | 11th July, 2017 | 47
©
Emkay
Building Materials
Your success is our success
Name
Jun’17E
Mar’17
Jun’16
% Chg
YoY
% Chg
QoQ
4,684
5,944
4,602
1.8%
-21.2%
-19.8%
Comments
HSIL
CMP(Rs)
405
Net Sales (Rs mn)
Mkt Cap (Rs bn)
29
EBITDA (Rs mn)
588
734
734
Reco
Hold
EBITDA Margin (%)
12.6
12.3
15.9 -338 bps
Target Price (Rs)
326
PAT (Rs mn)
172
308
265
-34.9%
EPS (Rs)
2.6
4.7
4.0
-34.9%
% Upside
-20%
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
Building products to report marginal decline of 2.3%
impacted by destocking at dealers end in June however
-19.8% growth in consumer appliances segment will continue to be
healthy led by increase in distribution and reach. Glassware
21 bps segment should report muted numbers impacted by lower
end-user demand. We expect overall revenues to grow by
-44.0% 1.8% yoy to Rs 4.7bn, EBITDA to decline by 19.8% yoy to
Rs 588mn and APAT to decline by 34.9% yoy to Rs 172mn.
-44.0%
| Emkay Strategy | 11th July, 2017 | 48
©
Cement
Emkay
Your success is our success

We expect cement despatches growth of 1-2% yoy in Q1FY18 against 5.7% yoy growth in the same period last year. Our interaction
with industry players indicate weak demand in the South/Central regions whereas demand was strong in the East region. For our
coverage universe, we expect sales volume growth of 6.4% yoy. Among large companies, Shree Cement/ACC are expected to
report volume growth of 13%/10% yoy. Among the mid-sized players, Orient/JK Lakshmi/JK Cement are expected to report volume
growth of 12%/8%/8% yoy. Prism Cement and Sanghi Industries are the two companies under our coverage which are expected to
report volume decline of 15.3% and 12.7% yoy, respectively.

Cement prices remained strong in April/May’17, which will lead to better realizations for the industry. As per our channel checks, all
India average cement price was up 3.9% yoy/7.4% qoq during Q1FY18. Average cement price was up
7.8%/6.9%/6.3%/10.5%/6.1% qoq in the North/Central/East/West/South regions. There was a steep improvement in cement prices
in Gujarat, which will help companies with higher exposure in the West (Sanghi Industries, Ambuja Cements etc) to report better
realizations. Average realization for our coverage universe is expected to improve 6.6% yoy/6.2% qoq during the quarter. Among
our coverage companies, we expect 13% qoq realization growth for Sanghi Industries due to exposure to the West region and 8%
qoq realization growth for Orient Cement due to higher exposure to Andhra Pradesh and Telangana.

Average operating cost for our coverage universe is expected to increase 9.2% yoy/3.9% qoq due to higher coal prices (Pet Coke
and Imported Coal) and Freight Cost (due to higher diesel prices & railway freight and ban on overloading in the North/Central
regions). Higher operating costs would lead to 238bps yoy contraction in average operating margin for our coverage universe
despite strong prices. Average EBIDTA/tn for our coverage universe is expected to decline by Rs76/tn yoy to Rs894/tn during the
quarter. On a qoq basis, we expect average OPM to improve by 250bps and average EBITDA/tn to improve by Rs156/tn. We
expect EBITDA/tn growth of 106.7% yoy for Orient Cement and 27% yoy for Prism Cement.

We expect uptick in cement demand post monsoon, led by improvement in demand from government infrastructure projects,
individual low-cost housing and government’s thrust on rural housing (Housing for All scheme). Additionally, in the southern region,
demand is expected to improve owing to development activities in Telangana and development of new capital city Amravati. Post
many quarters of earnings downgrades, we are confident of earnings delivery for most of the companies under our coverage
universe. With no major capacities in sight in the North and Central regions in the next few quarters, we expect pricing power to
gradually improve in these regions. Our preferred picks are Shree Cement JK Cement, OCL India, India Cements and Mangalam
Cement.
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
| Emkay Strategy | 11th July, 2017 | 49
©
Emkay
Cement
Your success is our success
Name
Jun’17E
Mar’17
Jun’16
% Chg
YoY
% Chg
QoQ
33,036
30,997
28,698
15.1%
4,401
3,418
4,092
7.6%
13.3
11.0
14.3
-93
2,680
2,115
2,378
12.7%
14.3
11.3
12.7
13.0%
6.6% We expect the cement volume to grow by 10% YoY to 6.7mt
and realization to increase by 5.6% YoY to Rs4,583/tn. Thus,
28.8% revenue is estimated to grow by 15.1% YoY. Higher
realisation will drive EBITDA to grow at 7.6% YoY. Led by
230 20% YoY increase in freight cost, EBITDA margin is
expected to decline by 93bps YoY to 13.3%. EBITDA/tn is
26.7% expected to be flat at Rs654 on the back of 6% YoY increase
in opex/tn thereby negating the impact of higher realisation.
27.0%
PAT is expected to grow by 12.7% YoY to Rs2,680mn.
27,531
25,334
25,412
8.3%
5,047
3,651
5,813
-13.2%
18.3
14.4
22.9
-454
3,599
2,465
3,995
-9.9%
8.7% We expect revenue to grow by 8.3% YoY considering a 6.0%
YoY volume growth to 6.2mt. Led by 20% rise in energy
38.2% costs, EBITDA is expected to decline by 13.2% YoY with a
subsequent decline in EBITDA margin to 18.3%. EBITDA/tn
392 is expected to be at Rs 874 showing a decline of 12% YoY
impacted by energy costs. Profit is expected to decline by
77.6% 9.9% YoY to Rs3,599mn.
2.4
1.6
2.6
-9.9%
77.6%
Comments
ACC
CMP(Rs)
1,609
Net Sales (Rs mn)
Mkt Cap (Rs bn)
302
EBITDA (Rs mn)
Reco
Hold
EBITDA Margin (%)
Target Price (Rs)
1,560
PAT (Rs mn)
% Upside
-3%
EPS (Rs)
CMP(Rs)
253
Net Sales (Rs mn)
Mkt Cap (Rs bn)
503
EBITDA (Rs mn)
Ambuja Cements
Reco
Target Price (Rs)
% Upside
Reduce
228
EBITDA Margin (%)
PAT (Rs mn)
-10%
EPS (Rs)
CMP(Rs)
4,097
Net Sales (Rs mn)
67,537
65,003
61,823
9.2%
Mkt Cap (Rs bn)
1,125
EBITDA (Rs mn)
14,091
11,832
13,723
2.7%
Reco
Hold
EBITDA Margin (%)
20.9
18.2
22.2
-133
Target Price (Rs)
3,640
PAT (Rs mn)
7,581
5,643
7,749
-2.2%
% Upside
-11%
EPS (Rs)
27.6
20.6
28.2
-2.2%
UltraTech Cement
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
3.9% Ultratech's revenue is expected to grow by 8% YoY to
Rs66.8bn mainly led by the expected volume growth of 5%
19.1% YoY to 13.57mt. However, EBITDA margin is expected to
decline to 133bps led by increase in raw material cost,
266 energy and freight expense. Hefty increase in cost/tn of 6.4%
YoY over marginal growth in realisation/tn will overweight
34.4% EBITDA/tn with a decline of 4.1% YoY to Rs1,019. PAT is
expected to decline by 2.2% YoY to Rs7,581mn.
34.4%
| Emkay Strategy | 11th July, 2017 | 50
©
Emkay
Cement
Your success is our success
Name
Jun’17E
Mar’17
Jun’16
% Chg
YoY
14,390
15,226
12,025
19.7%
2,075
1,900
2,014
3.0%
14.4
12.5
16.7
-233
% Chg
QoQ
Comments
India Cements
CMP(Rs)
204
Net Sales (Rs mn)
Mkt Cap (Rs bn)
63
EBITDA (Rs mn)
Reco
Accumulate EBITDA Margin (%)
Target Price (Rs)
222
PAT (Rs mn)
706
343
440
60.5%
% Upside
9%
EPS (Rs)
2.3
1.1
1.4
60.5%
CMP(Rs)
706
Net Sales (Rs mn)
10,084
10,132
9,429
6.9%
Mkt Cap (Rs bn)
168
EBITDA (Rs mn)
2,553
2,396
2,750
-7.2%
Reco
Hold
EBITDA Margin (%)
25.3
23.6
29.2
-385
Target Price (Rs)
670
PAT (Rs mn)
1,236
1,345
1,559
-20.8%
% Upside
-5%
EPS (Rs)
5.2
5.7
6.6
-20.8%
24,970
23,803
21,987
13.6%
6,391
5,112
7,308
-12.5%
25.6
21.5
33.2
-764
PAT (Rs mn)
3,511
3,045
5,077
-30.8%
EPS (Rs)
100.8
87.4
145.7
-30.8%
-5.5% We expect volume to increase 10.6% yoy to 2.6mt resulting
in strong revenue growth of 19.7% YoY. Growth in
9.2% realisation is expected to cushion the increase in opex/tn
leading to EBITDA growth of 3% YoY with EBITDA margin of
194 14.4%. EBITDA/tn is expected to grow by 5.8% YoY to
Rs910 on the back of increase in realisation and volume.
105.9% Profit is expected to increase 23% YoY to Rs542mn
cushioned by low interest cost.
105.9%
Ramco Cements
Shree Cement
CMP(Rs)
18,366
Net Sales (Rs mn)
Mkt Cap (Rs bn)
640
EBITDA (Rs mn)
Reco
Hold
EBITDA Margin (%)
Target Price (Rs)
% Upside
18,560
1%
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
-0.5% Ramco Cement is expected to report 6.9% YoY growth in the
revenue led by the marginal 3.8% YoY growth in volume to
6.6% 2.16mt; we expect 2.4% YoY increase in realisation to
Rs4,649/tn. Led by higher power cost and other expense, we
168 expect EBITDA to decline by 7.2% yoy with EBITDA margin
of 25.3%, 385bps decline. EBITDA/t is expected to stand at
-8.1% Rs1,161/tn, a fall of Rs164/tn on yoy basis. As a result,
company is expected to report a decline in profit by 20.8%
-8.1% YoY to Rs1,236mn.
We expect Shree cement to report revenue growth of 13.6%
4.9% yoy largely led by cement segment. We are factoring cement
volume growth of 13.2% YoY to 5.85mt and realisation
25.0% growth of 3.6% YoY to Rs3,995/tn. However, hefty rise of
62% YoY in energy cost/tn alongwith 16.6% YoY rise in
412 freight cost is expected to limit the operating performance.
EBITDA is expected to decline by 12.5% YoY with EBITDA
15.3% margin of 25.6% during the quarter. EBITDA/tn is expected
to be Rs1,047, decline of 17.0% on YoY basis. Led by
15.3% higher opex, profit is expected to decline by 30.8% YoY to
Rs3,511mn.
| Emkay Strategy | 11th July, 2017 | 51
©
Emkay
Cement
Your success is our success
Name
Jun’17E
Mar’17
Jun’16
% Chg
YoY
% Chg
QoQ
6.4% We expect net sales to increase by 10.4% YoY supported by
volume growth of 8% YoY to 2.28mt and marginal
42.8% improvement in realisation by 2.3% YoY to Rs3,762/tn (6.5%
QoQ). However, energy cost and freight cost are expected
303 to increase 31% YoY and 10.4% YoY respectively. Led by
higher opex, EBITDA/tn is estimated to decline by 19.5%
2.9% YoY to Rs448 against Rs556 in Q1FY17. Consequently,
PAT is expected to decline by 32.2% YoY to Rs194mn.
2.9%
Comments
JK Lakshmi Cement
CMP(Rs)
470
Net Sales (Rs mn)
8,584
8,067
7,772
10.4%
Mkt Cap (Rs bn)
55
EBITDA (Rs mn)
1,022
716
1,175
-13.1%
EBITDA Margin (%)
11.9
8.9
15.1
-322
Reco
Reduce
Target Price (Rs)
427
PAT (Rs mn)
215
209
286
-25.1%
% Upside
-9%
EPS (Rs)
1.8
1.8
2.4
-25.1%
CMP(Rs)
970
Net Sales (Rs mn)
9,672
10,189
8,867
9.1%
Mkt Cap (Rs bn)
68
EBITDA (Rs mn)
1,730
1,814
1,657
4.4%
17.9
17.8
18.7
-80 bps
JK Cement
Target Price (Rs)
1,185
PAT (Rs mn)
898
1,003
720
24.8%
-5.1% Revenue growth of 9.1% yoy is expected during the quarter
on the back of 8%/2.6% yoy growth in total volume/blended
-4.6% realization. EBITDA is expected to grow by 4.4% YoY with
EBITDA margin of 17.9%. EBITDA/tn is expected to be at
8 bps Rs915 against Rs940 in Q1FY17. Profit is expected to grow
by 24.8% YoY to Rs898mn supported by lower interest cost
-10.5% and higher other income.
% Upside
22%
EPS (Rs)
12.8
14.3
10.3
24.8%
-10.5%
CMP(Rs)
155
Net Sales (Rs mn)
5,801
5,967
4,355
33.2%
Mkt Cap (Rs bn)
32
EBITDA (Rs mn)
899
755
388
131.5%
Reco
Sell
EBITDA Margin (%)
15.5
12.7
8.9
658
Target Price (Rs)
125
PAT (Rs mn)
191
165
-76
n/m
EPS (Rs)
0.9
0.8
-0.4
n/m
Reco
Accumulate EBITDA Margin (%)
Orient Cement
% Upside
-19%
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
-2.8% We expect Orient’s net sales to post a strong growth of
33.2% yoy led by volume growth of 12% YoY at 1.56mt and
19.1% 19% YoY realization growth. Higher opex is cushioned by
19% YoY growth in realisation fructifying to a hefty growth in
284 EBITDA/tn of 106.7% YoY to a peak of Rs576 in past 8
quarters. EBITDA is expected to increase 131.5% YoY with
15.8% EBITDA margin of 15.5% on account of overall decline in
cost structure. Profit is expected to be at Rs191mn against
15.8%
loss of Rs76mn in Q1FY17.
| Emkay Strategy | 11th July, 2017 | 52
©
Emkay
Cement
Your success is our success
Jun’17E
Name
Mar’17
Jun’16
% Chg
YoY
% Chg
QoQ
Prism Cement
CMP(Rs)
123
Net Sales (Rs mn)
Mkt Cap (Rs bn)
62
EBITDA (Rs mn)
Reco
Sell
Target Price (Rs)
91
% Upside
-26%
14,218
15,443
14,063
1.1%
-7.9%
1,038
1,163
952
9.1%
-10.7%
EBITDA Margin (%)
7.3
7.5
6.8
53
-23
PAT (Rs mn)
370
702
157
136.5%
-47.2%
EPS (Rs)
0.7
1.4
0.3
136.5%
-47.2%
2,409
2,543
2,241
7.5%
Comments
Prism Cement is expected to report flat sales growth of 1.1%
YoY driven by decline of 15.3% YoY in cement volume. We
are estimating realisation of Rs4,708/tn (+14.5% yoy).
EBITDA for the cement segment is expected to be at
Rs908mn, down 4% YoY. EBITDA/tn is expected top be at
Rs770 against Rs615 in Q1FY17. EBITDA for the company
is expected to increase by 9.1% YoY to Rs1,038mn
impacted by TBK and RMC business. Profit for the quarter is
expected to increase by 136.5% to Rs370mn.
Mangalam Cement
CMP(Rs)
363
Net Sales (Rs mn)
Mkt Cap (Rs bn)
10
EBITDA (Rs mn)
295
248
471
-37.4%
12.2
9.7
21.0
-877
Reco
Hold
EBITDA Margin (%)
Target Price (Rs)
370
PAT (Rs mn)
57
35
226
-74.6%
% Upside
2%
EPS (Rs)
2.2
1.3
8.5
-74.6%
Net Sales (Rs mn)
8,099
8,719
7,043
15.0%
EBITDA (Rs mn)
1,829
2,007
1,761
3.8%
22.6
23.0
25.0
-243
PAT (Rs mn)
971
1,122
1,058
-8.2%
EPS (Rs)
17.1
19.7
18.6
-8.2%
-5.3% Net sales is expected to grow by 7.5% led by marginal
increase of 2.5% YoY in volume to 0.6mt. We expect
19.0% realisation to grow by 5% on both YoY and QoQ basis to
Rs3,853 on account of strong prices in North and Central
249 region. On account of higher raw material cost, energy cost
and other expense, EBITDA is expected to decline by 37.4%
65.1% YoY. EBITDA/tn is expected to be at Rs471, down 39%
YoY. As a result, profit is expected to decline 74.6% YoY to
65.1%
Rs57mn as against Rs226mn in Q1FY17.
OCL India
CMP(Rs)
Mkt Cap (Rs bn)
Reco
Target Price (Rs)
% Upside
1,211
69
Accumulate EBITDA Margin (%)
1,217
0%
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
We expect OCL to report 15% YoY growth in net sales led
by 3.3% YoY growth in sales volume. Realisation/tn is
-8.9% expected to grow by 14.4% YoY which will overweight
increase in opex/tn subsequently resulting in 7.2% YoY
-43 growth in EBITDA/tn. EBITDA margin is expected to decline
243bps YoY to 22.6% during the quarter. However, higher
-13.4% interest cost will lead to 8.2% YoY decline in profit to
Rs971mn.
-13.4%
-7.1%
| Emkay Strategy | 11th July, 2017 | 53
©
Emkay
Cement
Your success is our success
Name
Jun’17E
Mar’17
Jun’16
% Chg
YoY
% Chg
QoQ
2,246
2,467
2,698
-16.7%
-0.3% Sanghi Industries is expected to deliver a 16.7% YoY
decline in revenue to Rs2,246mn mainly driven by 12.7%
26.7% YoY decline in volumes. Realisation/tn is expected to decline
4.6% YoY to Rs3,560 against Rs3,731 in Q1FY17.
464 EBITDA/tn is expected to decline 4.7% YoY to Rs850 on the
back of lower realisation and decline in volumes.
-38.0% Consequently, profit is expected to decline 31.4% YoY to
Rs163mn against Rs238mn in Q1FY17.
-38.0%
Comments
Sanghi Industries
CMP(Rs)
96
Net Sales (Rs mn)
Mkt Cap (Rs bn)
21
EBITDA (Rs mn)
536
423
645
-16.9%
EBITDA Margin (%)
23.9
17.2
23.9
-3
PAT (Rs mn)
163
263
238
-31.4%
EPS (Rs)
0.7
1.2
1.1
-31.4%
Reco
Target Price (Rs)
% Upside
Buy
86
-11%
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
| Emkay Strategy | 11th July, 2017 | 54
©
Construction & Infrastructure
Emkay
Your success is our success
 In the Roads segment, among 43 the Hybrid Annuity (HAM) projects (which had been awarded by the NHAI in FY16-17), 22
projects have achieved financial closure with road developers having stronger balance sheets being able to achieve faster
financial closure.
 The NHAI and MoRTH on a combined basis had awarded 16,000kms in FY17 and constructed ~8,000kms (22kms/day),
However, Q1FY18 project awards have been minimal owing to stricter land acquisition and utility shifting norms for new
project awards. However, with most companies in our coverage universe having a comfortable order book backlog of 30-36
months, focus in FY18E remains on pick-up in execution across projects.
 At the same time, project awards in the Urban Infra space (especially in Metro projects) has picked up pace with multiple
packages of the Bengaluru, Pune and Nagpur Metro having been awarded in Q1FY18. Further, many large infrastructure
projects in the Mumbai Metropolitan Region (MMR) are also likely to be awarded in FY18, such as the Mumbai Trans-Harbor
Link (MTHL) and Metro Line 2 and Line 4.
 Overall, we expect EPC revenue (ex-IRB) to see muted 2% yoy growth for the quarter, with KNR Constructions, Ashoka
Buildcon and Sadbhav Engineering expected to clock double-digit revenue growth while PNC Infratech and ITD
Cementation are expected to see a revenue decline.
 Our top picks in the sector are KNR Constructions, ITD Cementation, PNC Infratech and Ashoka Buildcon on account of
low leverage on their standalone balance sheets, a controlled working capital cycle and comfortable order book position.
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
| Emkay Strategy | 11th July, 2017 | 55
©
Emkay
Construction & Infrastructure
Your success is our success
Name
Jun’17E
Mar’17
Jun’16
% Chg
YoY
3,400
4,718
3,063
11.0
% Chg
QoQ
Comments
Ahluwalia Contracts
Reco
Hold
EBITDA Margin (%)
10.0
9.1
14.0
(401)
(27.9) Management guides for margin weakness to persist in
Q1FY18 as well on account of labour shortage, post which
(21.1) margins should stabilize in the 12-13% range. We expect
order inflows to be weak as company remains selective on
87 taking on new orders
Target Price (Rs)
388
PAT (Rs mn)
175
204
215
(18.7)
(14.0)
% Upside
12%
EPS (Rs)
2.6
3.0
3.2
(18.7)
(14.0)
CMP(Rs)
190
Net Sales (Rs mn)
5,500
6,100
4,683
17.4
Mkt Cap (Rs bn)
36
EBITDA (Rs mn)
638
636
596
7.1
CMP(Rs)
348
Net Sales (Rs mn)
Mkt Cap (Rs bn)
23
EBITDA (Rs mn)
340
431
429
(20.8)
Ashoka Buildcon
drive
(9.8) Ramp in execution on projects won in FY16-17 will
YoY revenue growth. Also, recovery in toll revenue of BOT
0.3 projects will be a key monitorable
Reco
Buy
EBITDA Margin (%)
11.6
10.4
12.7
(112)
117
Target Price (Rs)
301
PAT (Rs mn)
350
654
308
13.6
(46.4)
% Upside
59%
EPS (Rs)
1.9
3.5
1.6
13.6
(46.4)
13,785
15,579
13,392
2.9
(11.5)
2,716
4,950
2,619
3.7
19.7
31.8
19.6
14
(1,207)
1,800
3,357
1,789
0.6
(46.4)
7.4
13.8
7.3
0.6
(46.4)
Container Corporation of India
CMP(Rs)
1,184
Net Sales (Rs mn)
Mkt Cap (Rs bn)
289
EBITDA (Rs mn)
Reco
Sell
EBITDA Margin (%)
Target Price (Rs)
1,069
PAT (Rs mn)
% Upside
-10%
EPS (Rs)
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
We expect EXIM volumes to remain weak while domestic
volumes are expected to show growth. We expect double
(45.1) stacking benefits to have peaked out
| Emkay Strategy | 11th July, 2017 | 56
©
Emkay
Construction & Infrastructure
Your success is our success
Name
Jun’17E
Mar’17
Jun’16
% Chg
YoY
% Chg
QoQ
15,325
16,271
15,173
1.0
7,356
8,218
7,740
(5.0)
48.0
50.5
51.0
(301)
2,100
2,062
1,818
15.5
1.8
6.0
5.9
5.2
15.5
1.8
6,500
5,234
8,614
(24.5)
Comments
IRB Infrastructure
CMP(Rs)
215
Net Sales (Rs mn)
Mkt Cap (Rs bn)
75
EBITDA (Rs mn)
Reco
Buy
EBITDA Margin (%)
Target Price (Rs)
283
PAT (Rs mn)
% Upside
32%
EPS (Rs)
CMP(Rs)
177
Net Sales (Rs mn)
Mkt Cap (Rs bn)
28
EBITDA (Rs mn)
650
761
422
54.2
(5.8) We expect an strong uptick in construction & toll revenues
as situation was back to normalcy post demonetisation.
(10.5) Sucessful placement of InviTs in Q1FY18 is the key
monitorable
(251)
ITD Cementation
24.2 We expect YoY revenue decline with EBITDA margins
expected to inprove by 511bps YoY. This will be second
(14.6) quarter under IND-AS reporting, hence any JV profits/lossed
from Mumbai Metro 3 project are not accounted for. Recent
(454) Bengaluru Metro project wins of Rs24bn in 4 packages
lends order book visibility
35.1
Reco
Buy
EBITDA Margin (%)
10.0
14.5
4.9
511
Target Price (Rs)
203
PAT (Rs mn)
190
141
52
264.7
% Upside
14%
EPS (Rs)
1.2
0.9
0.3
264.7
35.1
CMP(Rs)
302
Net Sales (Rs mn)
3,750
3,555
4,033
(7.0)
5.5
Mkt Cap (Rs bn)
23
EBITDA (Rs mn)
638
601
680
(6.3)
J Kumar
We expect a marginal QoQ uptick in revenue owing to
execution in the Mumbai Metro projects with majority of
6.1 revenue to flow in from H2FY18. Company's ability to handle
multiple projects and generate positive operating cash flow
10 will be key
Reco
Buy
EBITDA Margin (%)
17.0
16.9
16.9
13
Target Price (Rs)
410
PAT (Rs mn)
270
258
298
(9.4)
4.5
% Upside
36%
EPS (Rs)
3.6
3.4
3.9
(9.4)
4.5
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
| Emkay Strategy | 11th July, 2017 | 57
©
Emkay
Construction & Infrastructure
Your success is our success
Name
Jun’17E
Mar’17
Jun’16
% Chg
YoY
% Chg
QoQ
3,452
3,823
2,958
16.7%
8.7%
-9.7% We expect continued traction in the company's execution
and the company should exhibit decent YoY revenue
-15.0% growth.
Comments
KNR Constructions
CMP(Rs)
211
Net Sales (Rs mn)
Mkt Cap (Rs bn)
30
EBITDA (Rs mn)
491
577
451
Reco
Buy
EBITDA Margin (%)
14.2
15.1
15.3 -105 bps
-88 bps
Target Price (Rs)
240
PAT (Rs mn)
288
415
580
-50.4%
-30.8%
% Upside
14%
EPS (Rs)
2.0
3.0
4.1
-50.4%
-30.8%
20,152
21,394
19,011
6.0
1,733
1,742
1,657
4.6
NCC
CMP(Rs)
89
Net Sales (Rs mn)
Mkt Cap (Rs bn)
50
EBITDA (Rs mn)
(5.8) We expect modest YoY revenue uptick with EBITDA
margins to remain flattish YoY. Reduction in debt levels and
(0.5) quantum of order wins to ensure sustained revenue visibility
remain key
46
Reco
Buy
EBITDA Margin (%)
8.6
8.1
8.7
(12)
Target Price (Rs)
120
PAT (Rs mn)
550
1,110
523
5.1
(50.5)
% Upside
34%
EPS (Rs)
1.0
2.0
0.9
5.1
(50.5)
CMP(Rs)
148
Net Sales (Rs mn)
3,611
3,506
5,150
(29.9)
Mkt Cap (Rs bn)
38
EBITDA (Rs mn)
469
474
671
(30.0)
PNC Infratech
H1FY18 execution will remain weak. While PNCL's order
book remains comfortable, the key monitorable is pickup in
(1.0) execution of work on NHAI EPC projects won in Bihar and
Uttar Pradesh in H2FY18
(53)
3.0
Reco
Buy
EBITDA Margin (%)
13.0
13.5
13.0
(3)
Target Price (Rs)
165
PAT (Rs mn)
434
450
640
(32.2)
(3.6)
% Upside
11%
EPS (Rs)
1.7
1.8
2.5
(32.2)
(3.6)
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
| Emkay Strategy | 11th July, 2017 | 58
©
Emkay
Construction & Infrastructure
Your success is our success
Name
Jun’17E
Mar’17
Jun’16
% Chg
YoY
8,877
10,329
8,070
10.0
% Chg
QoQ
Comments
Sadbhav Engineering
CMP(Rs)
300
Net Sales (Rs mn)
Mkt Cap (Rs bn)
51
EBITDA (Rs mn)
968
1,100
868
11.4
(14.1) We expect double digit YoY revenue growth led by pickup in
execution of HAM projects. Continued recovery in toll
(12.0) revenue of company's BOT projects will remain key
Reco
Buy
EBITDA Margin (%)
10.9
10.6
10.8
14
25
Target Price (Rs)
330
PAT (Rs mn)
460
682
487
(5.5)
(32.6)
% Upside
10%
EPS (Rs)
2.7
4.0
2.8
(5.5)
(32.6)
CMP(Rs)
537
Net Sales (Rs mn)
14,725
15,501
14,024
5.0
Mkt Cap (Rs bn)
27
EBITDA (Rs mn)
1,767
2,051
1,594
10.9
Simplex Infrastructure
While Simplex's order book remains robust, execution still
continues to remain weak. The company's performance on
(13.8) this front will determine the growth trajectory. Also, operating
profitability in the wake of sluggish revenue growth will be a
(123) key monitorable
(5.0)
Reco
Hold
EBITDA Margin (%)
12.0
13.2
11.4
63
Target Price (Rs)
525
PAT (Rs mn)
295
668
172
71.2
(55.9)
% Upside
-2%
EPS (Rs)
6.0
13.5
3.5
71.2
(55.9)
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
| Emkay Strategy | 11th July, 2017 | 59
©
Consumers
Emkay
Your success is our success
All consumer companies witnessed de-stocking given the lack of clarity with respect to GST among the channel partners.
Companies with a higher share of wholesale/CSD will be impacted the most. All companies have compensated distributors for
the loss on account of transition towards GST. Paints companies bucked the trend and we estimate a category volume growth
of ~8% yoy led by strong growth in April. A&P spends are expected to be benign for most companies, as companies tried to
mitigate sharp decline in margins amid muted revenue growth. In Staples, we believe HUL and GCPL are likely to witness
lower impact of de-stocking.
 We believe that in this quarter, the impact of de-stocking will be witnessed across all categories in Consumer Staples while
the impact will be less in Paints. Our volume growth assumptions are: Asian paints (8% yoy), Berger Paints (8% yoy), HUL
(2% yoy), Jubilant Foodworks (SSG 2% yoy), Britannia (-2% yoy), Dabur (-5% yoy), GSK Consumer (-6% yoy), Colgate (-7%
yoy), and Emami (-10% yoy). We expect sector revenues to grow 2.8% yoy to Rs286.4bn.
 Inputs like TiO2 and few food commodities like Copra has seen a sharp uptick in the quarter while other commodities like
PFAD, Mentha, VAM and Wheat have seen some softening. Sugar and Tea prices remain high yoy. We expect companies to
reduce Ad Spends due to delay in the launch of new products and channel disruption to maintain OPM. For our Consumer
universe, we expect EBITDA to be flat yoy to Rs55.1bn and an EBITDA margin of 19.2% (-55bps yoy). We expect strong
EBITDA margin uptick for Jubilant Foodworks (100bps) and HUL (50bps).
 We expect our consumer universe to report earnings decline of 0.6% yoy to Rs37.3bn. Strong earnings are expected from
Jubilant Foodworks (20.8% yoy), GCPL (9.3% yoy) and HUL (7.2% yoy).
 We continue to prefer companies that are category leaders and have strong brand in the premium segment. We like HUL,
GCPL and Emami. We have positive bias towards Marico and Colgate.
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
| Emkay Strategy | 11th July, 2017 | 60
©
Emkay
Consumers
Your success is our success
Jun’17E
Name
Mar’17
Jun’16
% Chg
YoY
% Chg
QoQ
Asian Paints
CMP(Rs)
1,115
Net Sales (Rs mn)
Mkt Cap (Rs bn)
1,070
EBITDA (Rs mn)
Reco
Hold
EBITDA Margin (%)
Target Price (Rs)
1,162
PAT (Rs mn)
% Upside
4%
EPS (Rs)
39,787
39,525
36,374
9.4%
0.7%
8,186
7,119
8,203
-0.2%
15.0%
20.6
18.0
5,502
4,796
5,526
-0.4%
14.7%
5.6
4.9
5.7
-1.5%
14.7%
22.6 -198 bps 256 bps
Berger Paints
CMP(Rs)
245
Net Sales (Rs mn)
Mkt Cap (Rs bn)
238
EBITDA (Rs mn)
Reco
Hold
EBITDA Margin (%)
Target Price (Rs)
245
PAT (Rs mn)
% Upside
0%
EPS (Rs)
12,222
11,129
11,182
9.3%
9.8%
2,025
1,611
1,951
3.8%
25.7%
16.6
14.5
17.4
1,242
1,055
1,202
3.3%
17.7%
1.3
1.1
1.2
3.3%
17.7%
-88 bps 209 bps
Britannia Industries
CMP(Rs)
3,692
Net Sales (Rs mn)
Mkt Cap (Rs bn)
443
EBITDA (Rs mn)
Reco
Hold
EBITDA Margin (%)
Target Price (Rs)
3,300
PAT (Rs mn)
% Upside
-11%
EPS (Rs)
21,856
22,444
21,408
2.1%
-2.6%
2,995
3,081
3,162
-5.3%
-2.8%
13.7
13.7
14.8 -107 bps
-2 bps
2,060
2,109
2,191
-6.0%
-2.3%
17.2
17.6
18.3
-6.0%
-2.3%
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
Comments
We expect domestic decorative business to post 8% volume
growth led by healthy demand in April and May. June growth
was impacted due to destocking however company had
provided 2% additional cash incentive to compensate
dealers. We expect 11% revenue growth in domestic
business and 2% revenue growth in international operations.
Margin expected to decline by 230bps in domestic business
due to higher input cost and cash discounts. We expect (1)
Consolidated revenues to grow 9.4% yoy to Rs 39.7bn, (2)
Expect EBITDA to be flat yoy to Rs 8.2bn while EBITDA
margins at 20.6% (down 200bps yoy) and (3) APAT to
decline by 0.4% yoy to Rs 5.5bn.
Expect domestic volumes to grow at 8% led by advertised
products. International operation expected to be steady led
by traction seen in Nepal and Bolix S.A. We expect (1)
Consolidated revenues to grow 9.3% yoy to Rs 12.2bn (2)
EBIDTA at Rs 2bn, up 3.8% yoy, Gross margin to decline
180bps yoy to 42.6% impacted by increase in inputs cost
(TiO2 & monomers) however EBITDA margins decline to be
curtailed to 90bps yoy to 16.6% aided by lower advertising
spends (3) APAT to grow at 3.3% yoy to Rs 1.2bn.
We expect volume decline of 2% impacted by destocking
due to GST. Revenue growth to be 3% in domestic business
led by price increase taken by the company. EBIDTA
margins are expected to decline by 120bps due lower growth
and higher input cost. Subsidiaries growth is expected to be
muted yoy led by exports. Key highlights are: 1)
Consolidated revenues to grow 2.6% yoy to Rs 21.6bn, 2)
EBITDA margins at 13.7% (-110bps yoy) and EBITDA down
5.3% yoy to Rs 3bn and 3) APAT to decline by 6% yoy to Rs
2.0bn.
| Emkay Strategy | 11th July, 2017 | 61
©
Emkay
Consumers
Your success is our success
Jun’17E
Mar’17
Jun’16
% Chg
YoY
Net Sales (Rs mn)
9,754
10,326
10,056
-3.0%
EBITDA (Rs mn)
1,946
2,394
2,037
-4.5%
19.9
23.2
20.3
-31 bps
1,168
1,426
1,257
-7.1%
4.3
5.2
4.6
-7.1%
18,262
19,147
19,284
-5.3%
3,200
4,176
3,488
-8.3%
17.5
21.8
18.1
-57 bps
2,599
3,331
2,927
-11.2%
1.5
1.9
1.7
-11.2%
Name
% Chg
QoQ
Comments
Colgate-Palmolive
CMP(Rs)
Mkt Cap (Rs bn)
Reco
Target Price (Rs)
% Upside
1,089
296
Accumulate EBITDA Margin (%)
1,000
PAT (Rs mn)
-8%
EPS (Rs)
CMP(Rs)
302
Net Sales (Rs mn)
Mkt Cap (Rs bn)
532
EBITDA (Rs mn)
Reco
Hold
EBITDA Margin (%)
Target Price (Rs)
280
PAT (Rs mn)
% Upside
-7%
EPS (Rs)
-5.5% Expect volume growth to be -7% in Colgate impacted by
destocking due to GST implementation but price hike to
-18.7% arrest a sharp decline in revenue. Ad & promotional spends
is expected to be muted on account of challenging market
-323 bps environment. Key highlights: 1) Revenues expected to
decline by 3% yoy to Rs 9.7bn, 2) EBITDA to decline by
-18.1% 4.5% yoy to Rs 1.9bn while EBITDA margins to decline by
30bps yoy at 19.9% aided by prudent ad spends and 3)
-18.1% APAT to decline by 7% yoy to Rs 1.16bn.
Dabur India
-4.6% We expect 5% volume decline in domestic business impacted
by GST & demonetization, as normalcy is not attained post
-23.4% Demon in North regions where Dabur has high exposure. In
International business, we expect 5% revenue decline
-429 bps impacted by political uncertainty in MENA region, however
company’s Bangladesh and Hobi business is seeing traction.
-22.0% Ad & Promotional intensity is expected to be low due to
uncertainty in trade. Key highlights: 1) Consolidated revenues
-22.0% to decline 5% yoy to Rs 18.7bn, 2) EBITDA to decline at 8%
yoy to Rs 3.2bn, and EBITDA margin to be at 17.5% down
60bps yoy 3) APAT to decline 11% yoy to Rs 2.6bn.
Emami
CMP(Rs)
1,051
Net Sales (Rs mn)
5,902
5,777
6,444
-8.4%
2.2%
1,293
1,781
1,473
-12.2%
-27.4%
Mkt Cap (Rs bn)
239
EBITDA (Rs mn)
Reco
Buy
EBITDA Margin (%)
21.9
30.8
22.9
-95 bps -892 bps
Target Price (Rs)
1,200
PAT (Rs mn)
434
833
567
-23.3%
-47.9%
% Upside
14%
EPS (Rs)
1.9
3.7
2.5
-23.3%
-47.9%
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
With higher share of wholesale business demand will be
impacted further due to GST implementation for Emami.
Summers didn’t aid growth in Navratna portfolio and June
month has been subdued due to high level of destocking by
trade. We expect 10% volume decline for the company.
International business to decline by 25% impacted by MENA
region. Key highlights are: 1) Consolidated revenues to
decline 8.4% yoy to Rs 5.9bn, 2) EBITDA to decline by 12%
yoy to Rs 1.3bn and 3) APAT to decline 23% yoy to Rs
434mn.
| Emkay Strategy | 11th July, 2017 | 62
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Emkay
Consumers
Your success is our success
Jun’17E
Mar’17
Jun’16
% Chg
YoY
% Chg
QoQ
22,766
23,898
21,228
7.2%
-4.7%
4,093
5,507
3,800
7.7%
-25.7%
18.0
23.0
17.9
2,775
3,827
2,538
9.3%
-27.5%
8.2
11.2
7.5
9.3%
-27.5%
Net Sales (Rs mn)
9,127
11,019
9,439
-3.3%
EBITDA (Rs mn)
1,878
2,171
2,035
-7.7%
20.6
19.7
21.6
-99 bps
1,514
1,759
1,606
-5.7%
36.0
41.8
38.2
-5.7%
Name
Comments
Godrej Consumer
CMP(Rs)
971
Net Sales (Rs mn)
Mkt Cap (Rs bn)
661
EBITDA (Rs mn)
Reco
Hold
EBITDA Margin (%)
Target Price (Rs)
930
PAT (Rs mn)
% Upside
-4%
EPS (Rs)
8 bps -507 bps
We expect 7.8% growth in domestic business aided by
growth across segments. Soap growth driven by price hikes
and lower base to aid growth in HI. International operations
to report steady growth of 7% yoy led sustained growth in
Africa and LATAM geographies. Key matrix (1) Consolidated
revenues of Rs 22.8bn, up 7.2% yoy (2) EBITDA at Rs
4.3bn, up 7.7% yoy, EBITDA margins expected to be flat to
18.0% aided by prudent ad spends and (3) APAT at Rs
2.8bn, up 9.3% yoy.
GSK Consumer
CMP(Rs)
Mkt Cap (Rs bn)
Reco
Target Price (Rs)
% Upside
5,489
231
Accumulate EBITDA Margin (%)
5,550
1%
PAT (Rs mn)
EPS (Rs)
-17.2% We expect 6% volume decline due to inventory de-stocking.
Domestic revenue growth of 4%. Auxiliary income is
-13.5% expected to be steady at 7.5% yoy to Rs 610mn. Elevated
skimmed milk prices to impact gross margins down 120bps
87 bps yoy to 67.7%. Key highlights: 1) Revenues to decline 3.3%
yoy to Rs 9.1bn, 2) EBITDA to decline by 7.7% yoy to Rs
-13.9% 1.88bn and EBITDA margins to decline by 170bps to 14.9%
and 3) APAT to decline 5.7% yoy to Rs 1.5bn.
-13.9%
HUL
CMP(Rs)
1,098
Net Sales (Rs mn)
83,990
82,130
81,282
3.3%
Mkt Cap (Rs bn)
2,376
EBITDA (Rs mn)
17,337
16,510
16,359
6.0%
20.6
20.1
20.1
52 bps
12,094
11,180
11,280
7.2%
5.6
5.2
5.2
7.2%
Reco
Target Price (Rs)
% Upside
Accumulate EBITDA Margin (%)
1,100
0%
PAT (Rs mn)
EPS (Rs)
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
2.3% Despite muted rural demand and GST implementation, we
expect 2% volume growth aided by already lower inventory
5.0% in the trade and reorganization of wholesale channel.
Compensation provided to trade by the company will also
54 bps restrict a significant de-stocking. Revenue is expected to
grow by 3.7% yoy to Rs 84bn aided by price inflation. While
8.2% EBITDA margin expected to improve by 50bps yoy to 20.6%
and EBITDA to improve 6.0% yoy to Rs 17.4bn, while APAT
8.2% to grow by 7.2% yoy to Rs 12.1bn.
| Emkay Strategy | 11th July, 2017 | 63
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Emkay
Consumers
Your success is our success
Jun’17E
Name
Mar’17
Jun’16
% Chg
YoY
% Chg
QoQ
Jubilant FoodWorks
CMP(Rs)
Mkt Cap (Rs bn)
1,093
72
Net Sales (Rs mn)
6,546
6,128
6,089
7.5%
6.8%
EBITDA (Rs mn)
686
605
577
18.9%
13.4%
Reco
Hold
EBITDA Margin (%)
10.5
9.9
9.5 100 bps
61 bps
Target Price (Rs)
880
PAT (Rs mn)
230
189
190
20.8%
21.5%
EPS (Rs)
3.5
2.9
2.9
20.8%
21.5%
17,751
13,222
17,543
1.2%
3,682
2,595
3,740
-1.5%
20.7
19.6
21.3
-58 bps
2,562
1,709
2,679
-4.4%
2.0
1.3
2.1
-4.4%
22,386
24,919
22,561
-0.8%
3,845
4,946
4,309
-10.8%
17.2
19.8
2,406
3,068
2,805
-14.2%
25.0
31.8
29.1
-14.2%
% Upside
-20%
Comments
We expect SSG growth of 2% aided by favorable base
however consumer sentiments continue to remain benign.
Key highlights are (1) Assuming 2% SSG and store
expansion of 10 stores, we expect revenues to grow at 7.5%
yoy to Rs 6.5bn. (2) Prudent sourcing will ensure steady
gross margins at 76% (-80bps yoy). Prudent employee cost
& promotional expenses and focus on profitability to help
EBITDA margin; expect EBITDA margins at 10.5% (+100bps
yoy). EBITDA to grow 18.9% yoy to Rs 686mn and (3) APAT
to grow by 20.8% to Rs 230mn.
Marico
CMP(Rs)
320
Net Sales (Rs mn)
Mkt Cap (Rs bn)
413
EBITDA (Rs mn)
Reco
Hold
EBITDA Margin (%)
Target Price (Rs)
300
PAT (Rs mn)
% Upside
-6%
EPS (Rs)
34.3% We expect 3% volume decline impacted by destocking seen
in June month. Company has taken a price increase in
41.9% Parachute and Value added hair oil portfolio due to increase
in input cost. International operations is expected to decline
112 bps by 3% yoy impacted muted growth in MENA geography. (1)
Consolidated revenues at Rs 17.7bn, up 1.2% yoy, (2)
49.9% EBIDTA at Rs 3.7bn, down 1.5% yoy, with EBITDA margins
at 20.7%, down 60bps yoy (3) APAT to decline 4.4% yoy to
49.9% Rs 2.5bn.
Nestle
CMP(Rs)
6,870
Net Sales (Rs mn)
Mkt Cap (Rs bn)
662
EBITDA (Rs mn)
Reco
Hold
EBITDA Margin (%)
Target Price (Rs)
6,200
PAT (Rs mn)
% Upside
-10%
EPS (Rs)
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
19.1 -193 bps
-10.2% Revenue growth is expected to be steady led by favorable
base, series of new innovative products launched and Maggi
-22.3% noodles gradually gaining scale. We expect overall revenues
to decline of 1% yoy to Rs 22.3bn. We expect, EBITDA
-267 bps margins to decline 190bps yoy to 17.2% led by higher
employee cost, subsequently, EBITDA to decline by 11%
-21.6% yoy to Rs 3.8bn while higher tax rate to result in a 14%
decline in APAT to Rs 2.4bn.
-21.6%
| Emkay Strategy | 11th July, 2017 | 64
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Emkay
Consumers
Your success is our success
Name
Jun’17E
Mar’17
Jun’16
% Chg
YoY
% Chg
QoQ
16,046
12,954
15,694
3,898
2,579
3,943
24.3
19.9
25.1
2,678
1,572
2,722
23.9% We expect Standalone business to grow at 1.5% yoy
impacted by GST. International operations is expected to
-1.1%
51.2% grow by 7.5% led by healthy growth in South America and
South East Asia. Expect 1) Consolidated revenues to grow
-83 bps 439 bps by 2.2% yoy to Rs 16bn, 2) EBITDA to decline by 1.1% yoy
to Rs 3.9bn and EBITDA margins to decline 80bps yoy to
-1.6%
70.3% 24.3% 3) APAT at Rs 2.7bn, to decline by 1.6% yoy.
5.2
3.1
5.3
Comments
Pidilite Industries
CMP(Rs)
812
Net Sales (Rs mn)
Mkt Cap (Rs bn)
416
EBITDA (Rs mn)
Reco
Target Price (Rs)
% Upside
Reduce
690
-15%
EBITDA Margin (%)
PAT (Rs mn)
EPS (Rs)
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
2.2%
-1.6%
70.3%
| Emkay Strategy | 11th July, 2017 | 65
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Engineering & Capital Goods (ECG)
Emkay
Your success is our success
The ECG sector is expected to report 4% yoy decline in revenues to Rs194bn while PAT is expected to increase by 11% yoy to
Rs9.5bn. Order inflows are likely to increase by 51% yoy to Rs269bn.
 Revenues expected to decline by 4% yoy to Rs194bn - We expect revenue growth in Voltas (+12% yoy), Bluestar (+6% yoy),
Triveni Turbine (+12% yoy), GE T&D (+6% yoy). The remaining companies in our ECG universe are likely to report yoy decline in
revenues - BHEL (-11% yoy), Cummins (-10% yoy), Techno Electric (-5% yoy), Kalpataru Power (-3% yoy), KEC International (-2%
yoy), Dynamatic Technologies (-5% yoy), TD Power (-4% yoy), ABB (-2% yoy), Siemens (-13% yoy) and Thermax (-2.5% yoy).
 EBITDAM to increase by 140bps to 8.5% - led by BHEL (374bps), KECI (95bps) and TEEC (10bps). All other companies are
expected to report a decline in EBITDAM - TRIV (-93bps), BLSTR (-33bps), TMX (-2bps), ABB (-9bps), VOLT (-29bps), KKC (-239
bps), SIEM (-48 bps), DYTC (-129 bps), TDPS (-139 bps) and KPP (-84bps).
 Net profit expected to increase by 11% yoy to Rs9.5bn - PAT growth is expected in BHEL due to base effect) (81% yoy), KECI
(57% yoy), VOLT (9% yoy), TRIV (4% yoy) and TMX (1% yoy). Rest of the companies of the ECG universe are expected to report a
decline in profits - ABB (-7% yoy), DYTC (-51% yoy), SIEM (-5% yoy), KKC (-19% yoy), BLSTR (-22% yoy), KPP (-11% yoy) and
TEEC (-11% yoy) while GETD is likely to report profit of Rs274mn (loss of Rs474mn yoy).
 Aggregate inflows expected to increase by 51% yoy to ~Rs269bn - Order inflows are expected to increase for BHEL (Rs120bn,
+272% yoy), TMX (Rs12bn, +46% yoy), SIEM (Rs40bn, +24% yoy), TDPS (Rs1bn, +7% yoy), GETD (Rs9bn, 13% yoy), and KPP
(Rs20bn, +2% yoy). Order inflows are likely to decline for VOLT (Rs9bn, -5% yoy), TEEC (Rs3bn, -14% yoy), TRIV (Rs1.5bn, -2%
yoy), ABB (Rs20bn, -2% yoy), KECI (Rs25bn, -12% yoy) and BLSTR (Rs8bn, -42% yoy).
 Emkay's stock selection is purely driven by visibility, cash flows and ROIC of the business models. Our preferred picks are TEEC,
KECI, VOLT and KKC. Though some of these appear richly valued, they should be viewed in conjunction of strength of their
business models.
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
| Emkay Strategy | 11th July, 2017 | 66
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Emkay
Engineering & Capital Goods (ECG)
Your success is our success
Name
% Chg
YoY
% Chg
QoQ
Jun’17E
Mar’17
Jun’16
50,040
96,882
56,225
-11.0%
2,502
6,509
5.0
6.7
1,407
2,156
0.6
0.9
0.3
80.9%
11,349
11,844
12,590
-10%
1,589
1,700
2,063
-23%
14.0
14.4
1,474
1,585
1,812
-19%
-7%
5.3
5.7
6.5
-19%
-7%
9,773
14,905
10,021
Comments
BHEL
CMP(Rs)
135
Net Sales (Rs mn)
Mkt Cap (Rs bn)
330
EBITDA (Rs mn)
Reco
Sell
EBITDA Margin (%)
Target Price (Rs)
106
PAT (Rs mn)
% Upside
-21%
EPS (Rs)
-48.3% BHEL revenues is expected to decline by 11%YoY to
Rs50bn. Revenues in both the Power and Industrial
710 252.3% -61.6% segment are expected to decrease by 10% YoY. We
expect EBITM in power and industrial segments to be at 9%
1.3 374 bps -172 bps and 7.2% respectively. BHEL is expected to report PAT of
Rs1.4bn .Order inflows will be the key monitorable.
778
80.9% -34.7%
-34.7%
Cummins India
CMP(Rs)
909
Net Sales (Rs mn)
Mkt Cap (Rs bn)
252
EBITDA (Rs mn)
Reco
Accumulate EBITDA Margin (%)
16.4 -239 bps
-4% Cummins is expected to report 10% YoY decline in
revenues. EBITDAM are likely to decrease by 240bps YoY
-7% to 14%. APAT is likely to decline by 19% to Rs1.5bn.
-35 bps
Target Price (Rs)
1,011
PAT (Rs mn)
% Upside
11%
EPS (Rs)
CMP(Rs)
917
Net Sales (Rs mn)
Mkt Cap (Rs bn)
109
EBITDA (Rs mn)
782
1,732
804
Reco
Sell
EBITDA Margin (%)
8.0
11.6
8.0
Target Price (Rs)
795
PAT (Rs mn)
493
531
490
0.7%
-7.3%
EPS (Rs)
4.1
4.5
4.1
0.7%
-7.3%
Thermax
% Upside
-13%
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
-34.4% Thermax is expected to report revenues at Rs10bn.
Revenues in energy and environment segments each are
-2.8% -54.9% likely to decline YoY by 10%. EBITDAM is likely to remain
stable YoY at 8%. PAT is expected to be maintained at
-2 bps -362 bps Rs493mn. Order inflows will be key monitorable.
-2.5%
| Emkay Strategy | 11th July, 2017 | 67
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Emkay
Engineering & Capital Goods (ECG)
Your success is our success
Name
Jun’17E
Mar’17
Jun’16
% Chg
YoY
% Chg
QoQ
20,659
20,351
18,500
12%
2,169
2,219
1,995
9%
10.5
10.9
10.8
-29 bps
1,702
1,989
1,567
9%
-14%
5.1
6.0
4.7
9%
-14%
12,822
13,756
12,091
6%
Comments
Voltas
CMP(Rs)
467
Net Sales (Rs mn)
Mkt Cap (Rs bn)
154
EBITDA (Rs mn)
Reco
Accumulate EBITDA Margin (%)
Target Price (Rs)
534
PAT (Rs mn)
% Upside
14%
EPS (Rs)
CMP(Rs)
603
Net Sales (Rs mn)
Mkt Cap (Rs bn)
58
EBITDA (Rs mn)
769
756
765
1%
EBITDA Margin (%)
6.0
5.5
6.3
-33 bps
2% Voltas revenues are expected to increase by 12% YoY :
EMPS (-10%YoY), EPS (+5%YoY) and UCP (+20%YoY).
-2% EBITDAM is likely to decline by 30bps YoY to 10.5%. APAT
is likely to increase by 9% YoY to Rs1.7bn.
-40 bps
Blue Star
Reco
Reduce
-7% Blue Star revenues are expected to increase by 6%YoY at
Rs13bn. EMP&PAC segment is likely to decline by 10%
2% while the PEIS and UP segments are expected to grow by
15%YoY. EBITDAM is expected to decline by 30 pbs YoY to
50 bps 6%. APAT is likely to decline by 22%YoY.
Target Price (Rs)
561
PAT (Rs mn)
400
372
514
-22%
8%
% Upside
-7%
EPS (Rs)
4.2
3.9
5.4
-22%
8%
240
Net Sales (Rs mn)
777
1,286
814
-4%
3
102
TD Power Systems
Reco
Hold
EBITDA Margin (%)
0.4
7.9
-40% Lower deliveries are likely to impact TD Power revenues.
Manufacturing revenues and project revenues are expected
15
-78%
-97% to decline by 10% and 5% respectively. EBITDAM is
expected to decline by 140bps to 0.4% . Order inflows will
1.8 -139 bps -753 bps be the key monitorable.
Target Price (Rs)
228
PAT (Rs mn)
-32
80
-22
n.a
n.a
% Upside
-5%
EPS (Rs)
-1.0
2.4
-0.7
n.a
n.a
CMP(Rs)
Mkt Cap (Rs bn)
8
EBITDA (Rs mn)
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
| Emkay Strategy | 11th July, 2017 | 68
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Emkay
Engineering & Capital Goods (ECG)
Your success is our success
Name
Jun’17E
Mar’17
Jun’16
% Chg
YoY
1,810
1,829
1,617
12%
% Chg
QoQ
Comments
Triveni Turbine
CMP(Rs)
151
Net Sales (Rs mn)
Mkt Cap (Rs bn)
50
EBITDA (Rs mn)
362
371
338
7%
-1% Triveni Turbine is likely to report 12%YoY increase in
revenues at Rs1.8bn. EBIDTAM is expected to decrease by
-3% 90bps YoY to 20%. APAT is likely to increase marginally by
4% to Rs280mn. Order intake, especially from the overseas
-30 bps segment will be the key monitorable.
Reco
Hold
EBITDA Margin (%)
20.0
20.3
20.9
-93 bps
Target Price (Rs)
138
PAT (Rs mn)
280
266
268
4%
5%
% Upside
-9%
EPS (Rs)
0.8
0.8
0.8
4%
5%
20,697
21,688
21,015
-2%
1,656
1,714
1,701
-3%
ABB India
CMP(Rs)
1,458
Net Sales (Rs mn)
-5% ABB is expected to report marginal decline in revenue by
2% YoY. EBITDAM is also likely to decrease by 9bps YoY to
-3% 8%. PAT is expected to be lower by 7% YoY to Rs723mn.
Order inflows will be the key monitorable.
10 bps
Mkt Cap (Rs bn)
309
EBITDA (Rs mn)
Reco
Hold
EBITDA Margin (%)
8.0
7.9
8.1
-9 bps
Target Price (Rs)
1,533
PAT (Rs mn)
723
882
774
-7%
-18%
EPS (Rs)
3.4
4.2
3.7
-7%
-18%
22,779
29,288
26,204
1,918
2,786
2,332
8.4
9.5
8.9
1,234
1,791
1,300
-5%
-31%
3.5
5.0
3.7
-5%
-31%
% Upside
5%
Siemens
CMP(Rs)
1,351
Net Sales (Rs mn)
Mkt Cap (Rs bn)
481
EBITDA (Rs mn)
Reco
Hold
EBITDA Margin (%)
Target Price (Rs)
1,533
PAT (Rs mn)
% Upside
13%
EPS (Rs)
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
-22% Siemens India is expected to report a 13%YoY decline in
revenues. EBITDAM is expected to decrease by 48 bps YoY
-18%
-31% to 8.4%. APAT is likely to be lower by 5%YoY at Rs1.2bn.
Order inflows will be the key monitorable.
-48 bps -109 bps
-13%
| Emkay Strategy | 11th July, 2017 | 69
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Emkay
Engineering & Capital Goods (ECG)
Your success is our success
Name
Jun’17E
Mar’17
Jun’16
% Chg
YoY
9,043
11,963
8,559
6%
814
1,097
-299
n.a
9.0
9.2
-3.5 1,250 bps
% Chg
QoQ
Comments
GE T&D India
CMP(Rs)
334
Net Sales (Rs mn)
Mkt Cap (Rs bn)
85
EBITDA (Rs mn)
Reco
Accumulate EBITDA Margin (%)
-24% GE T&D revenues is expected to increase by 6%YoY to
Rs9bn. We expect EBIDTAM to be 9% against a YoY loss
-26% APAT is expected to increase to Rs 274mn. Order execution
pace would be the key monitorable.
-17 bps
Target Price (Rs)
372
PAT (Rs mn)
274
461
-474
n.a
-41%
% Upside
12%
EPS (Rs)
1.1
1.8
-1.9
n.a
-41%
3,730
3,783
3,946
-5%
EBITDA (Rs mn)
405
388
479
-15%
EBITDA Margin (%)
10.9
10.3
12.1 -129 bps
Dynamatic Technologies
CMP(Rs)
Mkt Cap (Rs bn)
Reco
2,431
15
Buy
Net Sales (Rs mn)
Target Price (Rs)
3,396
PAT (Rs mn)
63
27
128
-51%
% Upside
40%
EPS (Rs)
9.9
4.2
20.2
-51%
11,145
14,963
11,537
-3%
1,170
1,573
1,308
-11%
-1% Dynamatic Technology revenues is expected to decline by
5% YoY. While the Hydraulics and automotive revenues are
4% likely to decline by 10% YoY, the Aerospace revenues are
expected to increase by 8% YoY. EBITDAM is expected to
60 bps decline by 130bps YoY at 10.9%. While the EBITM in
hydraulics /aerospace segments is expected to be at 10%
137% /21% respectively, the automotive segment is likely to report
loss at EBIT level.
137%
Kalpataru Power Transmission
CMP(Rs)
338
Net Sales (Rs mn)
Mkt Cap (Rs bn)
52
EBITDA (Rs mn)
-26% Kalpataru is expected to report 3% YoY decline in revenues.
EBITDAM is likely to decrease by 84bps YoY to Rs10.5%.
-26% APAT is expected to decline by 11% YoY at Rs573mn.
Reco
Buy
EBITDA Margin (%)
10.5
10.5
11.3
-84 bps
-1 bps
Target Price (Rs)
426
PAT (Rs mn)
573
896
645
-11%
-36%
% Upside
26%
EPS (Rs)
3.7
5.8
4.2
-11%
-36%
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
| Emkay Strategy | 11th July, 2017 | 70
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Emkay
Engineering & Capital Goods (ECG)
Your success is our success
Name
Jun’17E
Mar’17
Jun’16
% Chg
YoY
17,082
28,492
17,487
-2%
1,623
3,012
1,496
8%
% Chg
QoQ
Comments
KEC International
CMP(Rs)
267
Net Sales (Rs mn)
Mkt Cap (Rs bn)
69
EBITDA (Rs mn)
-40% KEC revenues are expected to decrease by 2% YoY to
Rs17bn. EBITDAM is likely to increase by 95bps to 9.5%.
-46% APAT is expected to increase by 57% YoY.
Reco
Buy
EBITDA Margin (%)
9.5
10.6
8.6
95 bps -107 bps
Target Price (Rs)
300
PAT (Rs mn)
485
1,456
309
57%
-67%
% Upside
12%
EPS (Rs)
1.9
5.7
1.2
57%
-67%
2,561
3,619
2,709
-5%
-5%
-29% Techno Electric is expected to report a 5% YoY decline in
revenues at Rs2.6bn. EBITDAM is likely to increase by 10
24% bps to 26.4% YoY. APAT is expected to decrease by
10%YoY to Rs431mn.
Techno Electric Engineering
CMP(Rs)
384
Net Sales (Rs mn)
Mkt Cap (Rs bn)
44
EBITDA (Rs mn)
675
544
712
Reco
Buy
EBITDA Margin (%)
26.4
15.0
26.3
Target Price (Rs)
444
PAT (Rs mn)
431
333
485
-11%
30%
% Upside
16%
EPS (Rs)
3.8
2.9
4.2
-10%
31%
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
10 bps 1,133 bps
| Emkay Strategy | 11th July, 2017 | 71
©
IT Services
Emkay
Your success is our success
 Tier I IT should report a 1.5-2.5% qoq revenue growth in Jun'17 quarter in CC terms, with Wipro being the only exception
(1.5% qoq revenue decline). We expect ~50-80bps sequential benefit to reported US$ revenue growth for the Tier I
players, but on reported INR earnings the net impact would be adverse by about 200-300bps given the sharp INR
appreciation over US$. Among the Tier II players, we expect CC growth of about 1-5% qoq.
 EBITDA margins are expected to decline sequentially for all Tier I companies in our coverage universe (except Tech M)
due to INR appreciation V/s US$, visa charges and wage hikes in select cases during the quarter. Recent sharp INR
strength could pose severe near term concerns, as INR depreciation V/s US$ has been a significant source of business
investments and support to profitability despite pricing pressures in past.
 Growth in Digital Services and improved revenue contribution from the high-growth service lines would be the key data
to watch out for. Commentary on pricing pressure and possible traction on IT spends in BFSI in H2CY17 would be crucial
given the fact that consensus estimate is building growth acceleration in FY19 over FY18 across vendors.
 Indian IT Services players continue to face multiple headwinds in terms of Business (budget moving to Digital, pricing
pressure in traditional offerings) as well as Macros (strengthening INR V/s US$, slower decision making on IT spends,
narrowed low-cost moat of Indian vendors). To deal with this uncertainty, most IT services vendors have made a change
in strategic refresh (7 new CEOs have assumed the role in last 12 months among top 10 vendors). We believe that given
the tectonic shift in the sector, stocks with growth acceleration would attract significant premium over peers. We believe
Mindtree, Mphasis, LTI and Tech Mahindra qualify on these parameters and are our preferred picks .
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
| Emkay Strategy | 11th July, 2017 | 72
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Emkay
IT Services
Your success is our success
Jun’17E
Name
Mar’17
Jun’16
% Chg
YoY
% Chg
QoQ
Infosys
CMP(Rs)
Mkt Cap (Rs bn)
Reco
Target Price (Rs)
% Upside
935
2,149
Net Sales (Rs mn)
EBITDA (Rs mn)
Accumulate EBITDA Margin (%)
1,000
7%
PAT (Rs mn)
EPS (Rs)
169,391
171,200
167,820
0.9%
-1.1%
44,782
46,580
44,470
0.7%
-3.9%
26.4
27.2
26.5
-6 bps
-77 bps
34,628
36,030
34,340
0.8%
-3.9%
15.1
15.8
15.0
0.8%
-3.9%
TCS
CMP(Rs)
2,332
Net Sales (Rs mn)
Mkt Cap (Rs bn)
4,595
EBITDA (Rs mn)
Reco
Hold
EBITDA Margin (%)
Target Price (Rs)
2,370
PAT (Rs mn)
% Upside
2%
EPS (Rs)
293,845
296,420
293,039
0.3%
-0.9%
77,901
81,330
78,369
-0.6%
-4.2%
26.5
27.4
26.7
-23 bps
-93 bps
63,635
66,080
63,159
0.8%
-3.7%
32.3
33.5
32.1
0.7%
-3.7%
Wipro**
CMP(Rs)
Mkt Cap (Rs bn)
Reco
258
1,254
Reduce
Net Sales (Rs mn)
EBITDA (Rs mn)
EBITDA Margin (%)
Target Price (Rs)
240
PAT (Rs mn)
% Upside
-7%
EPS (Rs)
1,34,541
1,40,620
1,36,976
-1.8%
-4.3%
21,117
24,828
22,847
-7.6%
-14.9%
15.7
17.7
16.7
20,007
22,611
20,518
-2.5%
-11.5%
4.1
4.7
4.2
-2.6%
-11.5%
-98 bps -196 bps
Comments
Constant currency growth of 1.7% qoq (with ~50bps cross
currency tailwinds) as business momentum improves on
strong deal addition and robust growth in focused initiative
portfolio of about 20%. Expecting OPM decline of about
77bps QoQ as largely on unfavorable Fx movement (wage
hikes deferred to 2Q). We expect net profits to decline by 4%
QoQ on account of adverse Fx and weak operating
performance. Expect Investors to focus on (1) productivity
gains, given sustained pressure in the traditional business
lines. In FY17 revenue growth was impacted by 250bps due
to pricing pressure despite gains on non-linear and
automation front (2) Sustenance of guidance in CC terms
We build in a 1.8% QoQ constant currency revenue growth
with ~50 bps QoQ cross currency tailwinds (2% qoq volume
growth). Reported growth to get affected by INR appreciation
of about 3.5%. OPM to get impacted by 93bps QoQ on
adverse Fx, visa (flat yoy basis) and wage hike (2-5% onsite
and 5-8% offshore). Reported Profits expected to decline by
3.7% QoQ to Rs 63.6 bn. Key things to watch out for (1)
Growth recovery in BFSI vertical and sustained improvement
witnessed in Hitech and Communication verticals (2) OPM
sustenance in narrow band despite declining growth, cost
pressures and adverse Fx.
We expect degrowth of 1.5% in IT services in CC terms (along with
~70 bps QoQ cross currency tailwinds) as challenges in mining the
large accounts persists (within its -2 to 0% growth guidance range
for the quarter). OPM to get affected by wage hike impact for a
month (effective in June), adverse exchange movement and
absence of acquisition related one time gains in the last quarter.
Profits expected to be down 11% QOQ on normalization of onetime gains it had on eco-energy sale in Q4FY17. Key things to
watch out for (1) Uptick if any in the guidance growth rates for 2Q
and demand in general on organic basis (2) Execution of various
new initiatives by new CEO (3) outlook on spending at key clients
and geographies.
**For Wipro, EBITDA number for Wipro corresponds to EBIT
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
| Emkay Strategy | 11th July, 2017 | 73
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Emkay
IT Services
Your success is our success
Name
Jun’17E
Mar’17
Jun’16
% Chg
YoY
122,020
120,530
113,360
7.6%
26,236
26,490
25,210
4.1%
21.5
22.0
22.2
-74 bps
21,003
23,280
20,430
2.8%
14.8
16.5
14.5
2.6%
HCL Tech
CMP(Rs)
Mkt Cap (Rs bn)
Reco
832
1,187
Net Sales (Rs mn)
EBITDA (Rs mn)
Accumulate EBITDA Margin (%)
Target Price (Rs)
920
PAT (Rs mn)
% Upside
11%
EPS (Rs)
% Chg
QoQ
Expect volume growth of 3.3% qoq (full quarter inorganic
1.2% consolidations of about 20mn$+). US$ revenue growth
would also get a cross currency boost of 90bps. OPM would
-1.0% be impacted by about 50bps qoq on adverse Fx and
inorganic led profitability dilution. Profits expected to decline
-48 bps sequentially by ~10% at Rs 21 bn. Things to watch out for:
Performance of Mode2 (Digital 18.5% of revenues in FY17)
-9.8% /Mode3 (Platform including IPR with IBM) services as it
expect incremental traction to be driven by these segments.
-9.8%
Tech Mahindra
CMP(Rs)
380
Net Sales (Rs mn)
Mkt Cap (Rs bn)
371
EBITDA (Rs mn)
Reco
Accumulate EBITDA Margin (%)
75,354
74,950
69,209
8.9%
0.5%
9,216
8,987
10,290
-10.4%
2.6%
12.2
12.0
14.9 -264 bps
24 bps
6,444
5,880
7,500
-14.1%
9.6%
7.2
6.6
8.4
-14.2%
9.6%
Target Price (Rs)
470
PAT (Rs mn)
% Upside
24%
EPS (Rs)
1,299
Net Sales (Rs mn)
3,371
3,315
3,403
-1.0%
EBITDA (Rs mn)
1,173
1,116
1,260
-6.8%
Comments
We build in 1.6% QoQ US$ organic revenue growth with
~80bps cross currency tailwinds. Reported revenue to be
aided by consolidation of HCI Group. We expect EBITDA
margins to be largely flat on sequential basis (up 20bps
QoQ) as headwinds from visa expenses, weak seasonality
of Comviva business and impact INR appreciation V/s US$
largely neutralizes benefits from benefit from absence of one
off charge and productivity improvement initiatives. Key
things to watch out for (1) outlook on growth in the
Communications vertical and Enterprise business, (2)
Margin outlook
eClerx Services
CMP(Rs)
Mkt Cap (Rs bn)
52
Reco
Hold
EBITDA Margin (%)
34.8
33.7
37.0 -220 bps
Target Price (Rs)
1,260
PAT (Rs mn)
834
749
960
-13.1%
EPS (Rs)
20.8
18.7
23.2
-10.2%
% Upside
-3%
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
We build in a 9% QoQ US$ revenue growth bolstered by
1.7% forex gains (we estimate ~US$3.3mn forex gains for Jun'17
quarter implying ~700bps QoQ tailwind). Excluding forex
5.1% gains, we build in ~2% QoQ US$ revenue growth for Jun'17
quarter. Despite headwinds from wage revision and INR
115 bps appreciation, we expect EBIT operating margins to improve
by ~120bps QoQ on back of favourable hedges. Please note
11.4% that we are not building in translational forex gain or losses
in other income for Jun'17 quarter (V/s reported losses of
Rs134mn in Mar'17 quarter). Key things to watch out for (1)
11.4%
commentary for FY18E growth outlook, (2) growth in both
top 10 and emerging clients, (3) margin outlook.
| Emkay Strategy | 11th July, 2017 | 74
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Emkay
IT Services
Your success is our success
Jun’17E
Name
Mar’17
Jun’16
% Chg
YoY
% Chg
QoQ
Hexaware Technologies
CMP(Rs)
238
Net Sales (Rs mn)
9,563
9,605
8,689
10.1%
-0.4%
Mkt Cap (Rs bn)
72
EBITDA (Rs mn)
1,525
1,623
1,345
13.3%
-6.1%
15.9
16.9
15.5
46 bps
-96 bps
1,146
1,139
991
15.6%
0.6%
3.9
3.8
3.3
18.5%
2.5%
Reco
Accumulate EBITDA Margin (%)
Target Price (Rs)
240
PAT (Rs mn)
% Upside
1%
EPS (Rs)
Persistent Systems
CMP(Rs)
668
Net Sales (Rs mn)
7,404
7,271
7,018
5.5%
1.8%
Mkt Cap (Rs bn)
53
EBITDA (Rs mn)
1,285
1,188
1,058
21.5%
8.2%
Reco
Hold
EBITDA Margin (%)
17.3
16.3
15.1 228 bps 102 bps
Target Price (Rs)
620
PAT (Rs mn)
854
728
733
16.5%
17.3%
% Upside
-7%
EPS (Rs)
10.7
9.1
9.2
16.5%
17.3%
NIIT Tech
CMP(Rs)
557
Net Sales (Rs mn)
7,123
7,447
6,707
6.2%
-0.7%
Mkt Cap (Rs bn)
34
EBITDA (Rs mn)
1,233
1,524
1,015
21.4%
-2.2%
EBITDA Margin (%)
17.3
20.5
Reco
Reduce
15.1 217 bps -320 bps
Target Price (Rs)
540
PAT (Rs mn)
698
1,003
285
145.0%
-30.4%
% Upside
-3%
EPS (Rs)
11.4
16.4
4.7
144.7%
-30.1%
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
Comments
We expect US$ revenue growth of 2.5% with 40bps QoQ
cross currency tailwinds. We estimate EBITDA margins to
decline by ~100 bps QoQ on account of INR appreciation
and impact of visa expenses. We expect net profits to largely
remain flat on sequential basis despite 6% decline in
operating profits aided by higher forex gains. Things to
watch out for 1) outlook on achieving CY17 revenue
guidance of 10-12% YoY c.c revenue growth, (2) margin
outlook given recent INR appreciation, (3) revenue
performance within top clients especially around company's
top client given the recent news flow around loss of some
business here.
We estimate US$ revenue growth of 5.3% QoQ on back of
continued traction in company's Enterprise and IP business.
Besides we expect rebound in IBM alliance revenues after
weak seasonality of Mar'17 quarter. Despite INR
appreciation V/s US$ (~3% QoQ) and visa expenses we
estimate EBITDA margins to improve by 100bps QoQ aided
by growth leverage, absence of provisioning costs (in Mar'17
quarter, litigation settlement fees impacted margins by
~160bps) and cost realignment in IoT business. We expect
Things to watch out for: 1) Performance in the Services
business, (2) Outlook on margins, (3) Revenue growth
outlook.
We expect like-for-like growth of 1.5% but degrowth of about
4.5% in revenues after adjusting of one-time revenues in
previous quarter. It would also see one-month revenue
integration of RuleTek that may account for about US$
0.6mn in the current quarter. OPM is expected to decline by
150bps on wage hikes (320bps qoq overall decline after
accounting for one-time items). PAT to decline by 30% qoq
at Rs690mn (decline of 5% on adjusted basis). Key things to
watch out for (1) Order book addition in focus areas
US/IMS/TTL/BFSI (2) New Deal traction should exceeding
$120mn+ would be seen as positive.
| Emkay Strategy | 11th July, 2017 | 75
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Emkay
IT Services
Your success is our success
Jun’17E
Name
Mar’17
Jun’16
% Chg
YoY
% Chg
QoQ
Mindtree
CMP(Rs)
539
Net Sales (Rs mn)
Mkt Cap (Rs bn)
91
EBITDA (Rs mn)
Reco
Hold
EBITDA Margin (%)
Target Price (Rs)
555
PAT (Rs mn)
% Upside
3%
EPS (Rs)
13,117
13,181
13,276
-1.2%
-0.5%
1,811
1,869
1,951
-7.2%
-3.1%
13.8
14.2
14.7
-89 bps
-37 bps
1,018
972
1,235
-17.6%
4.7%
6.1
5.8
7.3
-17.1%
4.7%
L&T Infotech
CMP(Rs)
796
Net Sales (Rs mn)
Mkt Cap (Rs bn)
136
EBITDA (Rs mn)
Reco
Accumulate EBITDA Margin (%)
Target Price (Rs)
850
PAT (Rs mn)
% Upside
7%
EPS (Rs)
17,145
17,271
15,889
7.9%
3,501
3,689
3,382
3.5%
20.4
21.4
21.3
-86 bps
2,517
2,547
2,358
6.7%
14.4
14.6
13.9
4.2%
35
Net Sales (Rs mn)
Mkt Cap (Rs bn)
24
EBITDA (Rs mn)
Reco
-1.2%
Target Price (Rs)
% Upside
8,873
8,923
8,935
-0.7%
-0.6%
933
990
1,192
-21.7%
-5.7%
10.5
11.1
13.3 -282 bps
-57 bps
PAT (Rs mn)
566
648
733
-22.8%
-12.7%
EPS (Rs)
0.8
1.0
1.1
-23.1%
-12.7%
Accumulate EBITDA Margin (%)
48
37%
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
Revenue growth of 2.7% qoq on CC basis driven by deal
ramp up (H2FY17 deals were up 30% over H1) and
sustained growth in Digital business (accounts 39% of
revenues with growth of about 18% in FY17). OPM to
decline by 40bps qoq as gains in profitability in troubled
acquired businesses would be negated by adverse Fx
movement. PAT to grow by 5% qoq on favorable translation
gains in the quarter. Key things to watch out for (1) growth
outlook within key verticals like BFSI, Retail/CPG and top
clients (2) growth in the offshore business that is sluggish for
over six quarters.
We build in 1.8% QoQ cc revenue growth with 40bps cross
currency tailwinds. We estimate EBITDA margins to decline
-0.7% by 90 bps QoQ on account of INR appreciation and impact
of visa expenses. We expect net profits to decline by ~1%
-5.1% QoQ due to sequential decline in operating profits. Things to
watch out for 1) outlook on revenue growth, (2) margin
-94 bps outlook given recent INR appreciation, (3) revenue
performance within top clients.
-1.2%
Firstsource Solutions
CMP(Rs)
Comments
Despite weak seasonality of Collection business and
continued challenges at ISGN, we build in ~2% QoQ
constant currency revenue growth aided by SKY deal (2
month incremental revenues). We are building in ~120bps
cross currency tailwinds due to 3.4% appreciation of GBP Vs
US$. We expect INR revenues to decline by 0.6% QoQ
impacted by ~3% appreciation of INR V/s US$. We expect
operating margins to decline by 60bps QoQ impacted by
cross currency headwinds, soft performance of ISGN due to
increasing interest rates in USA and wage revision for
associate level staff. Key things to look out for 1)
Commentary on ISGN business and its performance (2)
Revenue growth & operating margin outlook, (3) Revenues
from top clients.
| Emkay Strategy | 11th July, 2017 | 76
©
Emkay
IT Services
Your success is our success
Jun’17E
Name
Mar’17
Jun’16
% Chg
YoY
% Chg
QoQ
NIIT Ltd
CMP(Rs)
89
Net Sales (Rs mn)
2,687
3,611
2,603
3.2%
-25.6%
Mkt Cap (Rs bn)
15
EBITDA (Rs mn)
222
172
222
0%
29%
Reco
Buy
EBITDA Margin (%)
8.3
4.8
8.5
-30 bps
350 bps
Target Price (Rs)
110
PAT (Rs mn)
220
303
74
196%
-27%
% Upside
23%
EPS (Rs)
1.3
1.8
0.4
196%
-27%
MPS
CMP(Rs)
598
Net Sales (Rs mn)
703
716
619
13.5%
-1.9%
Mkt Cap (Rs bn)
11
EBITDA (Rs mn)
231
229
210
10.4%
1.1%
32.9
32.0
33.9
-93 bps
96 bps
Reco
Accumulate EBITDA Margin (%)
Target Price (Rs)
740
PAT (Rs mn)
164
200
168
-2.0%
-17.8%
% Upside
24%
EPS (Rs)
8.8
10.7
9.0
-2.0%
-17.8%
Mphasis
CMP(Rs)
597
Net Sales (Rs mn)
Mkt Cap (Rs bn)
126
EBITDA (Rs mn)
Reco
Hold
EBITDA Margin (%)
Target Price (Rs)
605
PAT (Rs mn)
% Upside
1%
EPS (Rs)
15,039
15,060
15,167
-0.8%
-0.1%
2,410
2,385
2,445
-1.4%
1.0%
16.0
15.8
16.1
-10 bps
19 bps
1,852
1,842
2,043
-9.3%
0.6%
8.8
8.8
9.7
-9.2%
0.8%
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
Comments
We expect revenues to grow by 3.2% YoY aided by 6% YoY
growth in Skills and Career Group and ~2.3% YoY growth in
Corporate learning Solutions. We highlight that management has
indicated that changes in accounting policy will lead to changes in
revenue reporting for Corporate learning solutions business. We
expect operating margins to decline by 30 bps YoY as we expect
investments for ramp up of new contracts in CLS segment and
courses portfolio refresh in Skills and Career business. We build
in EBITDA margins of 2% for Skills and Career segment V/s
EBITDA margins of 3.5% in Jun'16 quarter. We expect Net core
profit of Rs19mn for Jun'17 quarter V/s Rs3mn in Jun'16 quarter.
We build in ~18.3% YoY US$ revenue growth with ~70bps
cross currency sequential tailwinds. We expect EBITDA
margins of 32.9%, down ~90 bps YoY, led by INR
appreciation V/s US$ and lower profitability of recently
acquired Magplus. We expect Net profit of RS 164mn, down
2% YoY despite ~10% YoY growth in EBITDA as we build in
higher taxes and depreciation (on consolidation of MagPlus).
Our net profit estimate of 164mn does not factor in any forex
gains/losses V/s forex gain of Rs9mn in Jun'16 quarter. Key
things to watch out for 1) Revenue performance of top
clients 2) Operating margin outlook given ongoing
restructuring initiatives, (3) inorganic growth strategy.
Revenue growth of 0.6% on CC terms driven by expected
traction in the Direct international channel. OPM likely to be
in the same range QoQ as efficiency gains would get
negated by adverse Fx movement in the quarter. PAT is
expected to grow by 1% QoQ. Things to watch out for: (1)
New deal addition in direct channel segment (2) Expected
business pick up in HP segment given its recent
collaboration with DXC Technology and (3) Update on
opportunities in Blackstone portfolio companies.
| Emkay Strategy | 11th July, 2017 | 77
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Media and Entertainment
Emkay
Your success is our success
 Spillover impact of demonetization in April and transitional impact on spends due to GST implementation will restrict Ad
Revenue growth. Companies under coverage would see divergent trends. In case of broadcasters, Zee is expected to
register ~8% yoy growth in Entertainment business while recovery for SUN TV is still elusive. Regional Print Media
companies are expected to report single-digit growth while English segment for HT Media would continue to see lower
revenues. Strong box office collections by Baahubali-2 will aid growth and partially offset the base effect for the
multiplexes. Lackluster performance by most Bollywood movies and lesser number of regional hits will restrict footfalls.
Ad Revenue is expected to remain healthy at 18% yoy for PVR. Radio business would also be impacted due to sub-par Ad
Spends while new station launches would partially aid growth. ENIL could surprise negatively as it is aggressively
focusing on yield strategy.
 Broadcasters: Recovery for SUN TV is still awaited while Zee is expected to register ~8% yoy ad growth in Entertainment business. After
rebound in April-May, June was impacted by lower ad spends due to transition to GST. Zee’s reported revenue will have 2 adjustments: 1)
sale of sports business and 2) continued impact of ongoing issue in Bangladesh owing to ban on advertising on international channels. Zee’s
underlying Domestic/International subscription revenues are expected to grow by 10% yoy/2% yoy. Sun TV’s domestic revenue is expected to
grow by 9% yoy with Cable TV subscription growing at 1% yoy, impacted by high base. Underlying content costs for both Zee and Sun TV are
expected to rise with new launches. However, it would be higher for Sun TV, as its focus is on commissioned model in non-Tamil channels
and aggressive focus on the revival of Kannada market share.
 TV Distribution: Net Subscriber Additions are likely to improve post severe impact of demonetization in Q4FY17. Subscription revenue is
expected to grow 10.4% qoq, driven by 9% qoq rise in ARPU and net adds of 0.23mn (0.16mn in Q4FY17). Cricket heavy calendar in
Q1FY18 and fading impact of demonetization are likely to revive ARPU. Rebound in subscription revenue is likely to aid 20% qoq increase in
EBITDA.
 Print Media: Spillover impact of demonetization and transitional impact of GST (although lower than TV) are likely to restrict Ad Revenue
growth to low single-digit for vernacular print companies. Ad revenue growth for coverage universe is estimated to be flat yoy at Rs11.9bn.
Vernacular Ad Growth (+4.3% yoy) would be better off compared to English Print (-12%yoy). Operating performance is expected to grow 14%
yoy, primarily driven by HT Media. Stable newsprint prices, rupee appreciation and cost rationalization would be the key factors for stable
EBITDA. HT Media would see impact of accelerated focus on cost rationalization, which would result in EBITDA growth in spite of decline in
Ad Revenue.
 Multiplexes: PVR would deliver higher growth than Inox on account of DT Cinema consolidation. Ticket revenue is expected to grow 24%
yoy/15% yoy for PVR/Inox. High base could dent footfalls for comparable properties. Ad Revenue growth for PVR is expected to remain
healthy at 18% yoy while we estimate some revival for Inox with 10% yoy growth.
 We have BUY on Sun TV & HMVL; ACCUMULATE on Zee Ent., ENIL and Jagran; HOLD on Dish TV, PVR, Inox Leisure, DB
Corp and HT Media.
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
| Emkay Strategy | 11th July, 2017 | 78
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Emkay
Media and Entertainment
Your success is our success
Jun’17E
Name
Mar’17
Jun’16
% Chg
YoY
% Chg
QoQ
Zee Entertainment
CMP(Rs)
507
Net Sales (Rs mn)
Mkt Cap (Rs bn)
487
EBITDA (Rs mn)
Reco
Accumulate EBITDA Margin (%)
Target Price (Rs)
580
PAT (Rs mn)
% Upside
14%
EPS (Rs)
Sun TV Network
14,895
15,280
15,716
-5.2%
-2.5%
4,935
4,687
4,532
8.9%
5.3%
33.1
30.7
28.8 430 bps
246 bps
3,485
2,425
3,302
5.5%
43.7%
3.6
2.5
3.4
5.5%
43.7%
(Standalone)
CMP(Rs)
828
Net Sales (Rs mn)
7,922
5,825
7,608
4.1%
36.0%
Mkt Cap (Rs bn)
326
EBITDA (Rs mn)
4,279
3,936
4,364
-1.9%
8.7%
Reco
Buy
EBITDA Margin (%)
54.0
67.6
2,490
2,359
2,331
6.8%
5.5%
6.3
6.0
5.9
6.8%
5.5%
Target Price (Rs)
1,051
PAT (Rs mn)
% Upside
27%
EPS (Rs)
57.4 -334 bps -1,356 bps
Dish TV
CMP(Rs)
79
Net Sales (Rs mn)
7,375
7,086
7,786
-5.3%
4.1%
Mkt Cap (Rs bn)
84
EBITDA (Rs mn)
2,284
1,906
2,646
-13.7%
19.9%
31.0
26.9
34.0 -301 bps
408 bps
PAT (Rs mn)
89
-283
409
-78.3%
n.a
EPS (Rs)
0.1
-0.3
0.4
-78.3%
n.a
Reco
Target Price (Rs)
% Upside
Hold
90
14%
EBITDA Margin (%)
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
Comments
YoY financials are not comparable due to Sports sales. Ad
revenue is expected to grow 3% yoy, slower growth in
domestic business and decline in international operations.
Underlying domestic subscription revenues is expected to
increase 10% yoy. Other operating income is estimated at
Rs900mn vs Rs1315mn in Q1FY17. Programing cost is
expected to decline 10.3% yoy on reported basis, while on
like-to-like basis, it will increase due to launch of new shows
and live events. Higher number of movie telecast including
couple of big ticket movies will aid margins.
Ad revenue is expected to grow by 3% yoy to Rs3.6bn,
impacted by GST-led deceleration and partial loss of
business in April with HUL. Subscription revenue to grow by
9% yoy. Analog + Digital TV subscription revenue is
expected to remain flat yoy while DTH subscription revenue
is expected to grow by 11.6% yoy. Programming cost and
promotional expenses will be higher on account of renewed
content strategy. Programming cost is expected to grow by
24% yoy to Rs616mn. Lower amortization charge to aid
profitability
Revenue is expected to grow by 4.1% qoq. Subscription
revenue is expected to grow by 10% qoq on the back of 9%
qoq growth in ARPU to Rs146, driven by waning
demonetization impact and India Cricket. Subscriber base
is expected to grow by 1.5% qoq to 15.7mn. Net adds to
improve to 0.23mn vs 0.16mn in Q4FY17. EBITDA to
register a healthy growth of 20% qoq with margin
expansion of 408bps to 31.0%. PAT to be aided by healthy
operating profit and higher other income but will be
impacted by higher tax outgo. Reported financial could be
different from estimates due to adoption of IND-AS.
| Emkay Strategy | 11th July, 2017 | 79
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Emkay
Media and Entertainment
Your success is our success
Jun’17E
Name
Mar’17
Jun’16
% Chg
YoY
% Chg
QoQ
PVR
CMP(Rs)
Mkt Cap (Rs bn)
1,419
66
Net Sales (Rs mn)
6,694
4,942
5,702
17.4%
35.5%
EBITDA (Rs mn)
1,368
583
1,166
17.4%
134.6%
Reco
Hold
EBITDA Margin (%)
20.4
11.8
20.4
0 bps 864 bps
Target Price (Rs)
1,598
PAT (Rs mn)
523
15
453
15.5%
NA
% Upside
13%
EPS (Rs)
11.2
0.3
9.7
15.5%
NA
Inox Leisure
CMP(Rs)
276
Net Sales (Rs mn)
3,829
2,885
3,370
13.6%
32.7%
Mkt Cap (Rs bn)
27
EBITDA (Rs mn)
772
251
622
24.2%
207.9%
1,147
bps
Reco
Hold
EBITDA Margin (%)
20.2
8.7
18.5 171 bps
Target Price (Rs)
326
PAT (Rs mn)
322
16
251
28.3% 1885.5%
% Upside
18%
EPS (Rs)
3.3
0.2
2.6
28.3% 1885.5%
DB Corp
CMP(Rs)
383
Net Sales (Rs mn)
5,932
5,171
5,704
4.0%
14.7%
Mkt Cap (Rs bn)
70
EBITDA (Rs mn)
1,822
1,122
1,812
0.6%
62.4%
30.7
21.7
1,079
642
1,038
4.0%
68.2%
5.9
3.5
5.7
4.0%
68.2%
Reco
Hold
EBITDA Margin (%)
Target Price (Rs)
403
PAT (Rs mn)
% Upside
5%
EPS (Rs)
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
31.8 -104 bps 901 bps
Comments
Revenue growth would be aided by consolidation of DT
Cinema, growth in ATP and continued increase in ad
revenues. Ticket revenue is expected to grow 24% yoy to
Rs3.8bn, driven by ATP growth of 10% yoy to Rs215 and
11% rise in footfalls. However, high base of Q1FY17 could
pose risk to our footfall estimates. Ad revenue growth is
estimated at 18% yoy. F&B revenue is expected to grow by
25% yoy to Rs1.8bn. Expect SPH to grow by 11% yoy to
Rs86. F&B margin is estimated at 74.5% vs 75.4% in
Q1FY17. PAT to be aided by healthy operating revenue but
will be impacted by lower other income, higher depreciation
and tax outgo.
Ticket revenue is expected to grow by 13% yoy to Rs2.5bn.
ATP is expected to grow by 5% yoy to Rs183. However, high
base of Q1FY17 could pose risk to our footfall estimates.
F&B revenue is expected to grow by 19% yoy to Rs964mn.
We expect SPH to grow by 8% yoy to Rs66. F&B margin is
expected at 76.0% vs 77.2% in Q1FY17. Ad revenue is
expected to grow by 10% yoy. EBITDA to be aided by
healthy topline increase. PAT to be supported by healthy
operating revenue but will be impacted by lower other
income, higher depreciation, interest and tax outgo.
Ad revenue growth to be muted due to spillover impact of
demonetization, marginal GST-led deceleration in June’17
and high base. Print ad revenue is expected to grow 4%
yoy to Rs3.9bn. Digital ad revenue/Radio revenue is
expected to grow by 26%/10% yoy to Rs155mn/Rs310mn.
Circulation revenue is expected to grow 6% yoy. Raw
material cost to increase by 1.5% yoy to Rs1.6bn, restricted
by INR appreciation and cost optimization. Increase in other
cost would also be restricted due to cost control measures.
PAT to be aided by higher other income, lower interest and
ETR.
| Emkay Strategy | 11th July, 2017 | 80
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Emkay
Media and Entertainment
Your success is our success
Jun’17E
Name
Mar’17
Jun’16
% Chg
YoY
% Chg
QoQ
Jagran Prakashan
CMP(Rs)
179
Net Sales (Rs mn)
4,854
4,671
4,734
2.5%
3.9%
Mkt Cap (Rs bn)
58
EBITDA (Rs mn)
1,352
1,196
1,304
3.7%
13.1%
27.9
25.6
27.5
Reco
Accumulate EBITDA Margin (%)
32 bps 226 bps
Target Price (Rs)
200
PAT (Rs mn)
789
759
736
7.2%
4.0%
% Upside
12%
EPS (Rs)
2.5
2.4
2.3
7.2%
4.0%
HT Media
CMP(Rs)
82
Net Sales (Rs mn)
Mkt Cap (Rs bn)
19
Reco
Target Price (Rs)
% Upside
Hold
90
10%
6,023
5,853
6,147
-2.0%
2.9%
EBITDA (Rs mn)
832
731
643
29.4%
13.8%
EBITDA Margin (%)
13.8
12.5
10.5 335 bps 132 bps
PAT (Rs mn)
400
255
224
78.4%
56.5%
EPS (Rs)
1.7
1.1
1.0
78.4%
56.5%
HMVL
CMP(Rs)
276
Net Sales (Rs mn)
2,538
2,343
2,392
6.1%
8.3%
Mkt Cap (Rs bn)
20
EBITDA (Rs mn)
595
573
569
4.5%
3.8%
Reco
Buy
EBITDA Margin (%)
23.4
24.4
23.8
Target Price (Rs)
355
PAT (Rs mn)
529
464
487
8.6%
13.9%
% Upside
29%
EPS (Rs)
7.2
6.3
6.6
8.6%
13.9%
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
-36 bps -102 bps
Comments
Spillover impact of demonetization and marginal GST-led
deceleration in June to restrict print ad growth. Standalone
print ad revenue is expected to grow by 3% yoy to Rs3.4bn.
Standalone circulation revenue is expected at Rs1039mn,
up 4% yoy. We expect 10% yoy growth in radio, driven by
launch of new stations. Raw material cost is expected to fall
3.3% yoy on account of stable newsprint prices and rupee
appreciation. Employee expense to increase by 9% yoy to
Rs716mn. PAT growth would be aided by higher other
income, lower interest expense but will be impacted by
higher depreciation and tax.
Print ad revenue is expected to decline 5% yoy, impacted
by by decline English ad and slower growth in Hindi
revenue. Hindi advt. revenue is expected to grow by 7% to
Rs1.9bn while English advt. is expected to decline 12% yoy
to Rs2.4bn on the back of continued weakness.
Digital/radio revenue is expected to grow by 10%/15% yoy.
Circulation revenue is estimated to decline 2% yoy to
Rs753mn. Raw material cost to decline 13.1% yoy to
Rs1570mn, led by cost rationalization in English segment.
The company would see benefits of cost optimization efforts
with shut down of few English editions and other factors.
Print advt. revenue to grow by 7% yoy to Rs1.9bn.
Circulation revenue is expected to grow by 2.5% yoy to
Rs577mn, driven by volume. Raw material cost is expected
to rise 2.5% yoy and 18% qoq to Rs960mn. Employee
expense is expected to decline 18% yoy while marketing
expense to increase by 26% yoy, due to change in
accounting of digital business. Total expense to increase
6.6% yoy. PAT growth to be aided by higher other income
and lower interest expense but will be impacted by higher
depreciation and tax outgo.
| Emkay Strategy | 11th July, 2017 | 81
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Emkay
Media and Entertainment
Your success is our success
Jun’17E
Mar’17
Jun’16
% Chg
YoY
1,170
1,655
1,108
5.6%
202
352
294
-31.5%
17.2
21.3
26.6 -933 bps
PAT (Rs mn)
71
138
167
-57.6%
EPS (Rs)
1.5
2.9
3.5
-57.6%
Name
Entertainment Network
CMP(Rs)
958
Net Sales (Rs mn)
Mkt Cap (Rs bn)
46
EBITDA (Rs mn)
Reco
Target Price (Rs)
% Upside
Accumulate EBITDA Margin (%)
860
-10%
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
% Chg
QoQ
Comments
We expect total revenue to grow by 6% yoy to Rs1.2bn.
-29.3% Utilization for legacy stations is expected to be lower at 90%
vs 100% in Q1FY17, as focus is on yield improvement.
-42.7% Slower growth and continued increase in costs due to
investment in new stations would dent operating
-401 bps performance for another quarter. Admin/marketing
expenses will increase by 76%/15% yoy. EBITDA is
-48.8% expected to decline 32% yoy to Rs202mn with EBITDA
-48.8% margin of 17.2% vs 26.6% in Q1FY17. PAT is expected to
decline 58% yoy, impacted by muted operating revenue,
higher depreciation but aided by lower tax rate.
| Emkay Strategy | 11th July, 2017 | 82
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Metals and Mining
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Your success is our success
 Operating performance of the Metals & Mining companies is likely to remain weak sequentially, due to decline in volume
and realizations. In Ferrous space, volume offtake remained seasonally weak and is likely to fall by 10% to 14% whereas
blended realizations are also likely to be weaker by 8% to 10% (c. Rs1500-2000/tn decline). Volatile RM prices should
continue to impact margins. Weak power demand continued to weigh on Coal India's offtake. In the Non Ferrous space too,
prices of Zinc, Lead and Copper fell by 6%/5%/3% qoq, respectively whereas aluminium price remained stable at
US$1910/tn (+3% qoq). Iron Ore prices also remained subdued due to oversupply. Manganese Ore prices have stabilized.
 Revenue for our Metals & Mining universe (including Coal India) is expected to improve by 18% yoy but decline by 17%
qoq.
 EBITDA is likely to increase by 14% yoy while fall by 26% qoq. Vedanta, Tata Steel and Hindustan Zinc would be the major
contributors to the sequential decline in EBITDA. EBITDA margin is likely to decline by 68bps yoy and 200bps qoq.
 The GST rollout has led to destocking, which in turn has put downward pressure on prices (discounts to offload more
stocks). We are not expecting any significant improvement in steel consumption unless private capex witnesses
meaningful revival. Coking Coal prices have subsided of late with stabilization of mining activities post cyclone in
Australia. This should augur well for steel companies in coming quarters. Non Ferrous metal prices are likely to be stable.
We expect more clarity on prices in H2FY18. We expect earnings of non-ferrous companies to remain less volatile.
However, strength in INR/ USD can be marginally negative for the non-ferrous metals going forward. We continue to prefer
Hindalco, Vedanta and MOIL.
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
| Emkay Strategy | 11th July, 2017 | 83
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Emkay
Metals and Mining
Your success is our success
Name
Jun’17E
Mar’17
Jun’16
% Chg
YoY
% Chg
QoQ
206,707
247,802
184,219
12.2%
28,416
33,876
42,548
-33.2%
13.7
13.7
23.1
-935 bps
-16.6% Due to weak power demand, FSA volume grew by only 3%
YoY to 137 mt. We are modelling 5% QoQ and 2% QoQ
-16.1% decline in realization for both FSA and E-Auction
respectively. Therefore, we are estimating steep decline in
+8 bps PAT.
21,143
27,179
30,652
-31.0%
-22.2%
3.4
4.4
4.9
-31.0%
-22.2%
289,524
353,049
264,061
9.6%
40,942
70,252
32,420
26.3%
14.1
19.9
10,511
-11,680
-31,831
n.a
10.8
34.5
3.5
209.2%
160,772
179,172
128,858
24.8%
27,151
31,649
32,694
-17.0%
16.9
17.7
25.4
-848 bps
4,778
10,086
11,090
-56.9%
-52.6%
2.0
4.2
4.6
-56.9%
-52.6%
Comments
Coal India
CMP(Rs)
251
Net Sales (Rs mn)
Mkt Cap (Rs bn)
1,559
EBITDA (Rs mn)
Reco
Hold
EBITDA Margin (%)
Target Price (Rs)
279
APAT (Rs mn)
% Upside
11%
EPS (Rs)
CMP(Rs)
553
Net Sales (Rs mn)
Mkt Cap (Rs bn)
537
EBITDA (Rs mn)
Reco
Hold
EBITDA Margin (%)
Target Price (Rs)
453
APAT (Rs mn)
Tata Steel
% Upside
-18%
EPS (Rs)
12.3 +186 bps
-18.0% Tata Steel’s domestic sales volume rose by 29% YoY to
2.75 mt (-14% QoQ). EBITDA/tn is expected to decline by c.
-41.7% Rs 2500/tn QoQ to Rs 11,126/tn due to weaker realization
and higher coking coal cost. In Europe EBITDA/tn expected
-576 bps to decline to US$55/tn (vs US$103/tn in Q4FY17 as higher
cost coking coal inventory will likely be reflected in this
n.a quarter numbers. South East Asia business EBITDA/tn is
expected to be around US$30/tn (-55/-9% YoY/QoQ).
-68.6%
JSW Steel
CMP(Rs)
216
Net Sales (Rs mn)
Mkt Cap (Rs bn)
522
EBITDA (Rs mn)
Reco
Hold
EBITDA Margin (%)
Target Price (Rs)
218
APAT (Rs mn)
% Upside
1%
EPS (Rs)
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
-10.3% Steel sales volume rose 12% YoY to 3.72mt (-6% QoQ).
Realizations are expected to decline by 4.5% QoQ to Rs
-14.2% 40,900/tn due to lower export price and decline in domestic
flat product price. Lower realization and higher coking coal
-78 bps cost is likely to reduce EBITDA/tn by 5% QoQ to Rs 7586/tn.
| Emkay Strategy | 11th July, 2017 | 84
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Emkay
Metals and Mining
Your success is our success
Name
Jun’17E
Mar’17
Jun’16
% Chg
YoY
% Chg
QoQ
122,073
142,342
103,357
18.1%
-1,274
-2,644
2,338
n.a
-1.0
-1.9
2.3
-331 bps
-7,268
-7,713
-5,355
n.a
n.a
-1.8
-1.9
-1.2
n.a
n.a
Comments
SAIL
CMP(Rs)
62
Net Sales (Rs mn)
Mkt Cap (Rs bn)
255
EBITDA (Rs mn)
Reco
Sell
EBITDA Margin (%)
Target Price (Rs)
49
PAT (Rs mn)
% Upside
-21%
EPS (Rs)
-14.2% EBITDA/tn losses expected to come down from Rs -767/tn in
Q4FY17 to Rs -417/tn in Q1FY18 lead by decline in raw
n.a material costs. Saleable steel volume is likely decline 11%
QoQ to 3.05 mt (+10% YoY) whereas realizations are also
+81 bps expected to decline by 3% QoQ to Rs 39970/tn (+8% YoY).
NMDC
-7.7% We expect iron ore sales volume to be 9.4mt for Q1FY18
(+21%/-4% YoY/QoQ). Realization are expected to remain
48.1%
29.7% subdued at Rs2800/tn (vs Rs 2895/tn in Q4FY17). NMDC
has taken c. Rs200/tn price cut during the quarter due to
-186 bps +1313 bps oversupply of the ore. EBITDA/tn likely to increase by 22%
YoY and 35% QoQ to Rs 1286/tn as Q4FY17 included one33.8%
85.8% off charges of Rs 5bn.
CMP(Rs)
116
Net Sales (Rs mn)
26,518
28,721
17,207
Mkt Cap (Rs bn)
367
EBITDA (Rs mn)
12,089
9,322
8,164
Reco
Sell
EBITDA Margin (%)
45.6
32.5
47.4
Target Price (Rs)
102
PAT (Rs mn)
9,515
5,120
7,113
2.4
0.8
1.8
33.8%
% Upside
-12%
EPS (Rs)
54.1%
206.3%
MOIL
22.8% We expect realization to decline by 10% sequentially due to
price cut taken by the company in last few months. However,
10.9% higher volume at 2.9 lakh tonnes (+14%+34% YoY/QoQ) will
help achieve better performance. EBITDA/tn is likely to be
-469 bps around Rs4655/tn .
CMP(Rs)
321
Net Sales (Rs mn)
3,103
2,527
1,858
67.0%
Mkt Cap (Rs bn)
43
EBITDA (Rs mn)
1,350
1,218
342
294.5%
43.5
48.2
1,186
1,158
471
151.6%
2.4%
8.9
8.7
3.4
164.7%
2.4%
Reco
Buy
EBITDA Margin (%)
Target Price (Rs)
425
PAT (Rs mn)
% Upside
33%
EPS (Rs)
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
18.4 +2508 bps
| Emkay Strategy | 11th July, 2017 | 85
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Emkay
Metals and Mining
Your success is our success
Jun’17E
Mar’17
Jun’16
% Chg
YoY
Net Sales (Rs mn)
51,241
67,562
28,041
82.7%
25,929
37,480
11,303
129.4%
50.6
55.5
19,109
30,570
10,369
84.3%
-37.5%
4.5
7.2
2.5
84.3%
-37.5%
181,456
236,914
153,092
18.5%
56,301
73,501
34,396
63.7%
31.0
31.0
-23.4% Better zinc and aluminium prices are the major drivers.
However, pot outages at Jharsuguda-I and fire at Talwandi
-23.4% Sabo power plant are expected to impact earnings
adversely. On volume front, Zinc India and Balco are
+0 bps expected to be the main growth drivers
12,424
14,105
6,150
102.0%
-11.9%
4.2
5.1
2.1
102.0%
-18.5%
Name
% Chg
QoQ
Comments
Hindustan Zinc
CMP(Rs)
267
Mkt Cap (Rs bn)
1,129
EBITDA (Rs mn)
Reco
Hold
EBITDA Margin (%)
Target Price (Rs)
293
PAT (Rs mn)
% Upside
10%
EPS (Rs)
CMP(Rs)
257
Net Sales (Rs mn)
Mkt Cap (Rs bn)
956
EBITDA (Rs mn)
Reco
Buy
EBITDA Margin (%)
Target Price (Rs)
294
PAT (Rs mn)
% Upside
14%
EPS (Rs)
CMP(Rs)
195
Net Sales (Rs mn)
98,810
117,471
81,593
21.1%
Mkt Cap (Rs bn)
437
EBITDA (Rs mn)
11,671
13,472
11,247
3.8%
Reco
Buy
EBITDA Margin (%)
11.8
11.5
13.8
-197 bps
Target Price (Rs)
240
PAT (Rs mn)
4,373
5,025
2,941
48.7%
% Upside
23%
EPS (Rs)
2.3
2.6
1.5
48.6%
40.3 +1029 bps
Sales volume are expected to be steady in FY18 compared
to FY17. However, due to seasonality QoQ volumes likely to
-30.8% be subdued. Zinc and Lead LME improved YoY by 36% and
26% while declined QoQ by 6% and 5%. Per tonne cost of
-487 bps production likely to be higher QoQ due to lower volume.
-24.2%
Vedanta
22.5 +856 bps
Hindalco
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
-15.9% We expect aluminium deliveries of 316 kt (+32%/-22%
YoY/QoQ). Higher LME will be partly offset by higher input
-13.4% cost in case of aluminium whereas in case of copper lower
volumes and softening of TC/RC margins will hold back
+34 bps operating performance sequentially. Aluminium and Copper
LME stood at USD1910 (+22%/+8% YoY/QoQ) and
-13.0% US$5662 (+25%/+10% YoY/QoQ). In case of Novelis
EBITDA/tn is likely to improve 4% YoY to US$350/tn.
-13.0%
| Emkay Strategy | 11th July, 2017 | 86
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Emkay
Metals and Mining
Your success is our success
Jun’17E
Mar’17
Jun’16
% Chg
YoY
19,720
25,497
16,661
18.4%
2,150
4,275
1,946
10.4%
EBITDA Margin (%)
10.9
16.8
11.7
-78 bps
PAT (Rs mn)
992
2,684
1,350
-26.5%
EPS (Rs)
0.51
1.40
0.52
-2.0%
Name
% Chg
QoQ
Comments
NALCO
CMP(Rs)
68
Net Sales (Rs mn)
Mkt Cap (Rs bn)
131
EBITDA (Rs mn)
Reco
Target Price (Rs)
% Upside
Reduce
60
-11%
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
-22.7% Alumina shipment is expected to be at 328 kt (+13%/-18%
YoY/QoQ) while aluminium at 103 kt (+25%/-2% YoY/QoQ).
-49.7% Realization in alumina is expected to fall by 17% QoQ to Rs
18781/tn (+8% YoY) aluminium is expected to remain
-587 bps relatively stable. This along with rising cost pressure of
caustic soda and other inputs likely keep EBTIDA/tn
-63.0% subdued. EBITDA/tn expected to fall by 4% YoY and 41%
QoQ.
-63.4%
| Emkay Strategy | 11th July, 2017 | 87
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Non-Banking Financial Services
Emkay
Your success is our success

The first quarter of any fiscal is seasonally weak for asset financing NBFCs in general. However, for Q1FY18 we are
expecting mixed trends among NBFC-AFCs under our coverage universe - a quarter which is the immediate one before the
GST rollout. Asset quality tends to be seasonally weak in first quarter and we could witness certain NBFCs migrating to
90-dpd NPL recognition beginning Q1 itself.

For asset financing NBFCs, we expect growth trends to be mixed, as volumes in the M&HCV segment were muted in
Q1FY18 due to pre-buying in Q4FY17 and uncertainties related to GST. However, we expect growth to be: 1) strong for
Bajaj Finance owing to strong consumer demand induced by pre-GST inventory clearances and 2) healthy for Mahindra
Finance owing to strong tractor sales. Growth could be slower for Shriram Transport Finance and Magma Fincorp due to
slower disbursements as focus remains on asset quality. Asset quality will be a key monitorable for players like Mahindra
Finance and Magma Fincorp who are more rural focused and to see whether the impact of farm loan waivers is visible on
collection efficiency or not. For Bajaj Finance, NPLs could inch up on regulatory migration and for Cholamandalam
Finance we expect asset quality to remain largely stable.

For housing finance companies, we expect growth to remain largely steady. Trend in new sanctions (in light of the new
affordable housing initiatives) would be a key monitorable for growth going forward. NIMs could improve on the back of
falling cost of wholesale borrowings and re-pricing of bank borrowings. Asset quality is likely to remain largely stable.

For the Emkay NBFC coverage universe, we expect NII growth of 19.7% yoy, mainly led by weak topline growth for Magma
Fincorp and Shriram Transport Finance. Meanwhile, we expect PAT to grow by paltry 2.8% yoy, mainly led by a yoy drop in
earnings for HDFC Ltd and expected loss for Mahindra Finance.

Leaders: Bajaj Finance and Cholamandalam Finance; Laggards: Mahindra Finance and Shriram Transport Finance.
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
| Emkay Strategy | 11th July, 2017 | 88
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Emkay
Non-Banking Financial Services
Your success is our success
Jun’17E
Mar’17
Jun’16
% Chg
YoY
NII (Rs mn)
19,827
16,813
14,031
Op. Profit (Rs mn)
11,872
9,794
8,312
12.4
11.4
12.0
17.9% We expect Bajaj Finance’s AUM growth to be very strong on
the back of robust pre-GST demand in the consumer
42.8%
21.2% segment. Net interest margins expected to expand qoq due
to seasonal factors. Asset quality likely to worsen marginally
47 bps 101 bps due to 90-dpd NPL migration.
5,646
4,492
4,240
33.2%
25.7%
10.3
8.2
15.7
-34.8%
25.7%
NII (Rs mn)
6,841
6,594
5,536
23.6%
Op. Profit (Rs mn)
3,996
3,905
3,341
19.6%
7.9
7.9
7.3
57 bps
2,012
2,196
1,657
21.4%
3.7% We expect disbursements growth in the LAP business to
pick up, while that in the vehicle finance business is likely to
2.3% remain healthy. NIMs should remain stable / improve on the
back of falling cost of wholesale borrowings. While asset
0 bps quality in the vehicle finance segment could remain stable,
asset quality trends in the LAP portfolio will have to be
-8.4% monitored closely.
12.9
14.0
10.6
21.3%
-8.4%
Name
% Chg
QoQ
Comments
Bajaj Finance
CMP(Rs)
Mkt Cap (Rs bn)
Reco
Target Price (Rs)
% Upside
1,392
765
Accumulate NIM (%)
1,450
4%
PAT (Rs mn)
EPS (Rs)
41.3%
Cholamandalam Finance
CMP(Rs)
Mkt Cap (Rs bn)
Reco
1,139
178
Accumulate NIM (%)
Target Price (Rs)
1,350
PAT (Rs mn)
% Upside
19%
EPS (Rs)
CMP(Rs)
1,629
NII (Rs mn)
25,905
28,524
22,292
16.2%
Mkt Cap (Rs bn)
2,595
Op. Profit (Rs mn)
24,725
30,862
30,397
-18.7%
Reco
Hold
NIM (%)
3.5
4.0
3.2
26 bps
Target Price (Rs)
1,528
PAT (Rs mn)
16,607
20,442
18,707
-11.2%
-9.2% We expect HDFC’s loan growth to remain largely stable.
NIMs to improve yoy on the back of improving growth in high
-19.9% yielding corporate loans and falling cost of funds. Asset
quality likely to remain stable. Trend in new sanctions will be
-48 bps a key monitorable to gauge the demand by government’s
initiatives towards affordable housing segment.
-18.8%
10.5
12.9
11.8
-11.6%
-18.8%
HDFC Ltd
% Upside
-6%
EPS (Rs)
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
| Emkay Strategy | 11th July, 2017 | 89
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Emkay
Non-Banking Financial Services
Your success is our success
Name
Jun’17E
Mar’17
Jun’16
% Chg
YoY
% Chg
QoQ
10,476
10,396
8,245
27.1%
9,351
8,954
7,399
26.4%
2.9
3.0
2.6
26 bps
5,830
5,292
4,078
42.9%
0.8% LICHF’s growth momentum in the individual loan segment
will remain a key monitorable, while growth in the
4.4% nonindividual segment is likely to moderate compared to
recent trends. Asset quality is expected to remain stable.
-10 bps Credit costs are likely to drop substantially yoy due to one off
provisions taken by the company in Q1FY17.
10.2%
11.5
10.5
8.1
42.9%
Comments
LIC Housing Finance
CMP(Rs)
741
NII (Rs mn)
Mkt Cap (Rs bn)
374
Op. Profit (Rs mn)
Reco
Hold
NIM (%)
Target Price (Rs)
730
PAT (Rs mn)
% Upside
-2%
EPS (Rs)
CMP(Rs)
166
NII (Rs mn)
3,003
3,038
2,997
0.2%
Mkt Cap (Rs bn)
39
Op. Profit (Rs mn)
1,593
1,677
1,531
4.0%
10.2%
Magma Fincorp
-1.2% Growth is expected to remain subdued and the AUMs are
likely to contract both on a yoy as well as qoq basis. Asset
-5.0% quality will be a key monitorable as the management focus is
completely on stabilizing asset quality.
31 bps
Reco
Buy
NIM (%)
7.6
7.3
6.7
91 bps
Target Price (Rs)
150
PAT (Rs mn)
424
-1,140
469
-9.5%
n.a
EPS (Rs)
1.8
-4.8
2.0
-9.6%
n.a
% Upside
-10%
Mahindra Finance
CMP(Rs)
361
NII (Rs mn)
7,951
11,117
6,754
Mkt Cap (Rs bn)
205
Op. Profit (Rs mn)
4,221
7,252
3,587
Reco
Sell
NIM (%)
6.7
9.6
6.5
Target Price (Rs)
290
PAT (Rs mn)
-181
2,341
870
EPS (Rs)
-0.3
4.1
1.5
% Upside
-20%
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
-28.5% Q1FY18 is expected to be a seasonally weak quarter for
MMFS. We expect Mahindra Finance’s asset quality to
17.7% -41.8% remain under pressure (seasonally) and credit costs could
remain elevated on the back of reversal of provisioning
19 bps -288 bps benefits availed during Q1FY17. Growth should be healthy
on the back of healthy tractor volumes.
n.a
n.a
17.7%
n.a
n.a
| Emkay Strategy | 11th July, 2017 | 90
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Emkay
Non-Banking Financial Services
Your success is our success
Jun’17E
Mar’17
Jun’16
% Chg
YoY
% Chg
QoQ
NII (Rs mn)
7,701
7,134
6,862
12.2%
5,006
4,324
4,139
20.9%
13.0
12.5
13.7
-72 bps
7.9% AUM growth likely to remain healthy on the back of steady
demand in the 2-wheelers and SME segments. Gold
15.8% disbursements likely to remain under pressure. Asset quality
movement will be a key monitorable.
50 bps
2,119
120
1,818
16.6% 1661.7%
32.1
1.8
27.6
16.6% 1661.7%
NII (Rs mn)
14,318
14,087
13,474
6.3%
Op. Profit (Rs mn)
11,438
11,424
10,300
11.1%
7.2
7.3
7.3
-14 bps
4,120
1,496
3,741
10.1%
175.3%
18.2
6.6
16.5
10.1%
175.3%
Name
Comments
Shriram City Union Finance
CMP(Rs)
2,492
Mkt Cap (Rs bn)
164
Op. Profit (Rs mn)
Reco
Hold
NIM (%)
Target Price (Rs)
2,100
PAT (Rs mn)
% Upside
-16%
EPS (Rs)
Shriram Transport Finance
CMP(Rs)
Mkt Cap (Rs bn)
Reco
Target Price (Rs)
% Upside
1,090
247
Reduce
850
-22%
NIM (%)
PAT (Rs mn)
EPS (Rs)
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
1.6% Growth likely to be slower post demonetization and NPLs
and credit costs are expected to remain elevated. Asset
0.1% quality movement under the stricter NPL recognition norms
will be a key monitorable.
-10 bps
| Emkay Strategy | 11th July, 2017 | 91
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Oil & Gas
Emkay
Your success is our success
 Brent crude oil price declined by 7.5% qoq to US$49.7/bbl. Kerosene consumption fell by 10% qoq, coupled with a
decline in kerosene prices, which led to a drop in subsidy by 27.9% qoq to Rs12.25bn. We have assumed NIL
burden on OMCs and Upstream companies. Considering the volatility in crude oil during the quarter, we expect
inventory loss of US$2-1.2/bbl for OMCs. Hence, we expect GRMs to be in the range of ~US$4-5.2/bbl in Q1FY18.
Singapore GRM declined marginally by 1% qoq from US$6.42/bbl to US$6.36/bbl in Q4FY17. Taking into account
the NIL burden on Upstream Companies, we expect ONGC and OIL's realisations at US$49.7/bbl and US$49.2/bbl,
respectively.
 For RIL, we expect 2.3% decline in GRM to US$11.2/bbl (v/s US$11.5/bbl in Q4FY17) due to a drop across the
product slate. Petchem Margins for products across the segment remained stable, but INR appreciation might hurt
the margins. Despite shutdown in Q1FY18, Petchem volume is expected to remain stable because of
commissioning of PX plant. Thus, we expect Petchem EBIT to come at Rs34.2bn against Rs34.5bn in Q4FY17. Gas
production from the KG basin should remain flat qoq to 7.4mmscmd. Our net profit estimate for Q1FY18 stands at
Rs78.1bn.
 In the Natural Gas universe, we expect GAIL’s transmission volume to remain flat qoq at 102mmscmd while
GSPL’s transmission volume should increase from 23.5mmscmd to 26mmscmd. On the distribution/CGD front, we
expect a 4% qoq improvement in sales volume of IGL to 4.77mmscmd while Gujarat Gas’ sales volume should
increase by 2% qoq to 6.18mmscmd. PLNG is expected to witness a marginal decline in volume by 2% qoq to
187.1tbtu due to lower demand.
 The key stock for the results season that can surprise positively is IGL.
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
| Emkay Strategy | 11th July, 2017 | 92
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Emkay
Oil & Gas
Your success is our success
Name
Jun’17E
Mar’17
Jun’16
% Chg
YoY
Reliance Industries
CMP(Rs)
1,491
Net Sales (Rs mn)
620,157
745,980
534,960
15.9%
Mkt Cap (Rs bn)
4,849
EBITDA (Rs mn)
109,939
112,800
108,170
1.6%
17.7
15.1
78,190
81,510
75,480
3.6%
24.0
25.1
22.5
6.7%
904,377 1,003,375
860,807
5.1%
136,835
-56.5%
Reco
Target Price (Rs)
% Upside
Buy
1,517
EBITDA Margin (%)
PAT (Rs mn)
2%
EPS (Rs)
382
Net Sales (Rs mn)
20.2 -249 bps
% Chg
QoQ
Comments
For RIL, we expect 2.3% decline in GRM to $11.2/bbl (v/s
-16.9% $11.5/bbl in Q4FY17) due to decline in across product slate.
Petchem margins for products across the segment remains
-2.5% stable however, rupee depreciation might hurt the margins.
Despite shutdown in Q1, petchem volume to remain stable
261 bps because of commissioning of PX plant. Thus, we expect
petchem EBIT to come at Rs34.2bn. against Rs34.5bn in
-4.1% Q4FY17. Gas production from the KG basin should remain
flattish qoq to 7.4mmscmd. Our net profit estimate for
-4.1% Q1FY18 stands at Rs78.1bn.
Indian Oil
CMP(Rs)
Mkt Cap (Rs bn)
1,856
EBITDA (Rs mn)
Reco
Buy
EBITDA Margin (%)
Target Price (Rs)
496
PAT (Rs mn)
% Upside
30%
EPS (Rs)
CMP(Rs)
664
Net Sales (Rs mn)
Mkt Cap (Rs bn)
960
EBITDA (Rs mn)
59,543
110,317
6.6
11.0
28,260
68,393
82,690
-65.8%
5.8
14.1
17.0
-65.8%
494,238
570,365
469,387
5.3%
19,574
22,123
39,192
-50.1%
4.0
3.9
10,840
18,417
26,205
-58.6%
7.5
12.7
18.1
-58.6%
15.9 -931 bps
-9.9% We expect IOCL’s net profit at Rs28.3bn. We have assumed
that govt. will compensate for entire kerosene U/R of
-46.0% Rs8.2bn. IOCL’s GRM should worsen sequentially because
of inventory losses of $2/bbl on sharp crude correction.
-441 bps Thus, we expect GRM at $4.1/bbl. We estimate IOCL’s
market sales to improve 3.3% qoq to 21mnt qoq and
-58.7% marketing margin to improve qoq from Rs3,825/mt to
Rs3958/mt in Q1FY18.
-58.7%
BPCL
Reco
Accumulate EBITDA Margin (%)
Target Price (Rs)
772
PAT (Rs mn)
% Upside
16%
EPS (Rs)
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
8.3 -439 bps
-13.3% We expect BPCL’s net profit at Rs10.8bn. We have
assumed that govt. will compensate for entire kerosene U/R
-11.5% of Rs2.1bn. BPCL’s GRM should worsen sequentially
because of inventory losses of $1.6/bbl on sharp crude
8 bps correction. Thus, we expect GRM at $5.2/bbl. We estimate
BPCL’s market sales to improve 4% qoq to 10.5mnt qoq and
-41.1% marketing margin to improve qoq from Rs4192/mt to
Rs4,330/mt in Q1FY18.
-41.1%
| Emkay Strategy | 11th July, 2017 | 93
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Emkay
Oil & Gas
Your success is our success
Name
% Chg
YoY
Jun’17E
Mar’17
Jun’16
494,197
515,247
448,408
10.2%
15,378
33,355
3.1
6.5
7,012
22,682
6.9
22.3
20.6
-66.6%
117,629
134,520
107,067
9.9%
18,558
15,553
15,933
16.5%
15.8
11.6
14.9
90 bps
10,507
10,482
13,352
-21.3%
6.2
6.2
7.9
-21.3%
2,581
3.9%
% Chg
QoQ
Comments
HPCL
-4.1% We expect HPCL’s net profit at Rs7bn. We have assumed that
govt. will compensate for entire kerosene U/R of Rs2.1bn.
36,268 -57.6% -53.9% HPCL’s GRM should worsen sequentially because of inventory
losses of $1.2/bbl on sharp crude correction. Thus, we expect
8.1 -498 bps -336 bps GRM at $4.4/bbl. We estimate HPCL’s market sales to
improve 4% qoq to 9.21mnt qoq and marketing margin to
20,984 -66.6% -69.1% improve qoq from Rs4168/mt to Rs4,310/mt in Q1FY18.
CMP(Rs)
501
Net Sales (Rs mn)
Mkt Cap (Rs bn)
509
EBITDA (Rs mn)
Reco
Buy
EBITDA Margin (%)
Target Price (Rs)
629
PAT (Rs mn)
% Upside
25%
EPS (Rs)
CMP(Rs)
359
Net Sales (Rs mn)
Mkt Cap (Rs bn)
607
EBITDA (Rs mn)
Reco
Buy
EBITDA Margin (%)
Target Price (Rs)
458
PAT (Rs mn)
% Upside
28%
EPS (Rs)
CMP(Rs)
172
Net Sales (Rs mn)
2,683
2,446
Mkt Cap (Rs bn)
97
EBITDA (Rs mn)
2,303
2,013
85.8
82.3
1,288
1,270
1,213
6.2%
1.4%
2.3
2.3
2.2
6.2%
1.4%
-69.1%
GAIL
-12.6% We expect transmission/trading volumes to remain flat qoq
to 102/83mmscmd. Moreover, we expect a trading margin of
19.3% 4.3% in Q1FY18. We have assumed transmission tariff at
Rs1.18/scm and expect an increase in petchem EBITDA to
421 bps come down on lower production to Rs1.75bn on plant
shutdown. We have assumed LPG realisations at
0.2% $407/tonne in Q1FY18. Thus, PAT should remain flat qoq to
to Rs.10.5bn.
0.2%
Gujarat State Petronet
Reco
Buy
EBITDA Margin (%)
Target Price (Rs)
193
PAT (Rs mn)
% Upside
12%
EPS (Rs)
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
9.7% GSPL’s volume is expected to increase qoq to 26.5mmscmd
from 23.5mmscmd in Q4FY17, while tariff should remain flat
2,333
-1.3%
14.4% qoq at Rs1.11/scm. As a result, PAT should increase by
1.4% qoq to Rs1.28bn.
90.4 -454 bps 355 bps
| Emkay Strategy | 11th July, 2017 | 94
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Emkay
Oil & Gas
Your success is our success
Name
Jun’17E
Mar’17
Jun’16
% Chg
YoY
% Chg
QoQ
10,566
10,019
8,997
17.4%
2,707
2,122
2,596
4.3%
5.5% IGL’s volume should increase by 4% qoq to 4.77mmscmd.
Also, EBIDTA/SCM is expected at Rs6.2/scm in Q1FY18.
27.6% Thus, PAT is expected to increase by 3.3% qoq to Rs1.6bn.
25.6
21.2
1,605
1,341
1,480
8.5%
19.7%
11.5
9.6
10.6
8.5%
19.7%
14,440
14,002
12,248
17.9%
2,413
1,462
16.7
10.4
Comments
Indraprastha Gas
CMP(Rs)
1,072
Net Sales (Rs mn)
Mkt Cap (Rs bn)
150
EBITDA (Rs mn)
Reco
Buy
EBITDA Margin (%)
Target Price (Rs)
% Upside
1,027
PAT (Rs mn)
-4%
EPS (Rs)
CMP(Rs)
756
Net Sales (Rs mn)
Mkt Cap (Rs bn)
104
EBITDA (Rs mn)
28.9 -324 bps 444 bps
Gujarat Gas
Reco
Accumulate EBITDA Margin (%)
3.1% We expect an increase in GGCL’s volume qoq by 2% to
6.18mmcmsd. EBITDA/SCM is estimated at Rs4.3/scm qoq.
2,190
10.2%
65.1% Hence, we project PAT to expand significantly from Rs0.3bn
to Rs0.9bn as full benefit of price hike coupled with currency
17.9 -116 bps 627 bps appreciation should support higher profitability for the
quarter.
759
19.2% 174.5%
Target Price (Rs)
845
PAT (Rs mn)
905
330
% Upside
12%
EPS (Rs)
6.6
2.4
5.5
19.2%
174.5%
CMP(Rs)
218
Net Sales (Rs mn)
74,823
63,651
53,373
40.2%
Mkt Cap (Rs bn)
326
EBITDA (Rs mn)
6,689
6,163
6,425
4.1%
Reco
Buy
EBITDA Margin (%)
8.9
9.7
Target Price (Rs)
258
PAT (Rs mn)
4,058
4,708
3,779
7.4%
17.6% Based on imported LNG volumes during the quarter, we
expect Petronet LNG’s volumes to decline marginally by 2%
8.5% qoq to 187.1tbtu. We have assumed a marketing margin of
Rs5/mmbtu on spot volumes. Also assumed regasification
-74 bps charges or Dahej and Kochi terminals at Rs44.7/mmbtu and
Rs75.4/mmbtu respectively. As a result, we expect PAT to
-13.8% remain largly flat qoq to Rs4.1bn.
% Upside
20%
EPS (Rs)
5.4
6.3
5.0
7.4%
-13.8%
Petronet LNG
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
12.0 -310 bps
| Emkay Strategy | 11th July, 2017 | 95
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Emkay
Oil & Gas
Your success is our success
Name
Jun’17E
Mar’17
Jun’16
% Chg
YoY
% Chg
QoQ
185,992
217,140
177,848
4.6%
78,230
89,305
84,304
-7.2%
42.1
41.1
39,376
66,498
42,325
-7.0%
-14.3% We do not expect any subsidy burden for the company in the
quarter gone by. We estimate ONGC’s net realization at
-12.4% $49.7/bbl in line with Brent crude oil prices. Crude oil
production from its own fields is expected to increase by
93 bps 5.8% qoq to 6.4mnt. Gas production should remain flat qoq
to ~66.14mmscmd.
-40.8%
3.1
5.2
3.3
-7.0%
-40.8%
24,335
25,119
22,212
9.6%
8,188
6,712
33.6
26.7
-3.1% We do not expect any subsidy burden for Oil India in
Q1FY18. Oil India’s net realization is estimated at $49.2/bbl.
8,629
-5.1%
22.0% We expect crude oil production at 0.85mnt while gas
production should remain flat qoq at ~8mmscmd.
38.8 -520 bps 693 bps
5,137
193
4,944
3.9%
-95.8%
6.4
0.24
6.2
3.9%
-95.8%
Comments
ONGC
CMP(Rs)
Mkt Cap (Rs bn)
160
2,048
Net Sales (Rs mn)
EBITDA (Rs mn)
Reco
Buy
EBITDA Margin (%)
Target Price (Rs)
220
PAT (Rs mn)
% Upside
38%
EPS (Rs)
CMP(Rs)
264
Net Sales (Rs mn)
Mkt Cap (Rs bn)
199
EBITDA (Rs mn)
Reco
Buy
EBITDA Margin (%)
Target Price (Rs)
348
PAT (Rs mn)
% Upside
31%
EPS (Rs)
47.4 -534 bps
Oil India
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
| Emkay Strategy | 11th July, 2017 | 96
©
Emkay
Pharmaceuticals
Your success is our success
 Q1 expected to be an unexciting quarter for Indian generic companies. There will be uncertainty over revenues for both India and
US formulation businesses. In addition, headwinds from the strengthening INR will drag down revenues of various companies.
Structurally, apart from deteriorating industry fundamentals (due to PBM consolidating further and generic industry fragmenting),
the rising INR would materially affect overall numbers for the industry.
 Quality approvals key for future growth: Most of the companies in Pharma space continue to witness dearth of quality
approvals. In the near term, higher R&D for building pipeline and technologies will squeeze margins, but we believe Specialty and
quality pipeline will be key for future revenue growth and EBITDA margin expansion. Within the Specialty space, we see Cipla,
Sun Pharma, Aurobindo and Dr Reddy's being in the forefront.
 Domestic growth to: IPM growth moderated to 7% and 6% in May 2017 and April 2017, respectively, as the key reason for poor
sector growth has been the declining price growth and soften volume growth. Overall, long-term growth rate for IPM market is
unlikely to be higher than 10-11%. We see Lupin and Glenmark Pharma to lead the space.
 Top picks: Our preferred sector pick is Aurobindo in the Large Cap space and Granules India in the Mid Cap space.
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
| Emkay Strategy | 11th July, 2017 | 97
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Emkay
Pharmaceuticals
Your success is our success
Jun’17E
Name
Mar’17
Jun’16
% Chg
YoY
% Chg
QoQ
Aurobindo Pharma
CMP(Rs)
697
Net Sales (Rs mn)
Mkt Cap (Rs bn)
408
EBITDA (Rs mn)
Reco
Buy
EBITDA Margin (%)
Target Price (Rs)
700
PAT (Rs mn)
% Upside
0%
EPS (Rs)
CMP(Rs)
515
Net Sales (Rs mn)
Mkt Cap (Rs bn)
527
EBITDA (Rs mn)
Reco
Hold
EBITDA Margin (%)
Target Price (Rs)
353
PAT (Rs mn)
40,228
36,416
37,259
8.0%
10.5%
8,485
7,712
8,890
-4.6%
10.0%
21.1
21.2
23.9
-277 bps
-9 bps
5,719
5,825
5,779
-1.0%
-1.8%
9.8
10.0
9.9
-1.0%
-1.8%
25,496
25,249
23,331
9.3%
4,952
4,636
5,239
-5.5%
19.4
18.4
22.5
-303 bps
3,413
3,855
3,564
-4.2%
3.3
3.8
3.5
-4.2%
38,264
35,820
36,500
4.8%
6.8%
6,548
5,062
6,402
2.3%
29.3%
17.1
14.1
17.5
-43 bps
298 bps
3,218
2,096
3,680
-12.6%
53.5%
4.0
2.6
4.6
-12.6%
53.5%
Comments
We are expecting revenues to grow by 8% YoY and ~11%
QoQ on the back of new launches like gEpzicom,
integration of acquired Generis Farmaceutica SA and
strong growth of 11% from combined Europe and RoW
region. Sequentially, we are expecting EBITDA to grow by
10% QoQ basis whereas on YoY basis, it will be decline by
~5% because of gradual increase in R&D expenditure. PAT
numbers will be muted due to lower other income. Key
things to look for are pricing pressure and injectable
business performance in the US market as well as impact
of INR strengthening across various geographies.
Cadila Healthcare
% Upside
-32%
EPS (Rs)
1.0% Expecting revenues to grow by 9% YoY and 1% QoQ on
the back of new launches like gLialda whereas domestic
6.8% business is expected to de-grow by ~5-6% due to
destocking by distributors. Strengthening of INR against
106 bps
other currencies will impact non-domestic revenue. PAT to
-11.5% decline on QoQ and YoY as the tax rate was lower in
previous quarters.
-11.5%
Cipla
CMP(Rs)
547
Net Sales (Rs mn)
Mkt Cap (Rs bn)
440
EBITDA (Rs mn)
Reco
Accumulate EBITDA Margin (%)
Target Price (Rs)
525
PAT (Rs mn)
% Upside
-4%
EPS (Rs)
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
We are expecting steady growth of ~5% YoY and ~7%
QoQ in revenues numbers on the back of robust growth in
South Africa and RoW geographies by 18% and 20%
respectively, US business growth will be flattish whereas
domestic business will be de-grow by ~5%. Key points to
note would be mgmt. guidance post Q1 results on certain
niche US launches which have been delayed now for
several quarters.
| Emkay Strategy | 11th July, 2017 | 98
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Emkay
Pharmaceuticals
Your success is our success
Name
Jun’17E
Mar’17
Jun’16
% Chg
YoY
% Chg
QoQ
10,410
10,667
10,088
3.2%
3,805
3,910
4,045
-5.9%
36.5
36.7
40.1
-355 bps
2,844
2,883
3,018
-5.8%
10.7
10.9
11.4
-5.8%
35,341
35,542
32,447
8.9%
6,183
6,219
4,946
25.0%
17.5
17.5
15.2
225 bps
3,226
3,510
2,436
32.4%
19.5
21.2
14.7
32.4%
22,069
24,572
19,694
12.1%
4,526
5,088
3,791
19.4%
20.5
20.7
19.2
126 bps
2,578
3,947
2,269
13.6%
-10.2% Expecting revenue decline in this quarter mainly due to
erosion in the value of gZetia and US base business with
-11.0% even domestic business to decline sequentially. EBITDA is
expected to de-grow by 11% QoQ basis. Key thing to look
-20 bps
for is US business performance and commentary on the
-34.7% new launches.
9.1
14.0
8.0
13.6%
-34.7%
Comments
Divi’s Lab
CMP(Rs)
680
Net Sales (Rs mn)
Mkt Cap (Rs bn)
181
EBITDA (Rs mn)
Reco
Hold
EBITDA Margin (%)
Target Price (Rs)
630
PAT (Rs mn)
% Upside
-7%
EPS (Rs)
-2.4% Q1FY18 will be the first full quarter post the import alert
imposed on the company. Given the large number of
-2.7%
products exempted, the revenue impact will take time to
-11 bps play out. In addition there could high remediation costs
which could also weigh on the overall quarterly earnings.
-1.4%
-1.4%
Dr Reddy’s Lab
CMP(Rs)
2,705
Net Sales (Rs mn)
Mkt Cap (Rs bn)
448
EBITDA (Rs mn)
Reco
Hold
EBITDA Margin (%)
Target Price (Rs)
2,650
PAT (Rs mn)
% Upside
-2%
EPS (Rs)
CMP(Rs)
665
Net Sales (Rs mn)
Mkt Cap (Rs bn)
188
EBITDA (Rs mn)
-0.6% Expecting muted growth in US generic business
sequentially mainly due to increasing pricing pressure in the
-0.6% US market while slowdown in domestic market will drag
down the revenue numbers on QoQ basis. We are
0 bps
expecting EBITDA margins to be flattish in this quarter.
-8.1% EPS may de-grow by 8% QoQ basis. Key things to look for
are impact of INR strengthening across various
-8.1%
geographies.
Glenmark Pharma
Reco
Reduce
EBITDA Margin (%)
Target Price (Rs)
680
PAT (Rs mn)
% Upside
2%
EPS (Rs)
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
| Emkay Strategy | 11th July, 2017 | 99
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Emkay
Pharmaceuticals
Your success is our success
Name
Jun’17E
Mar’17
Jun’16
% Chg
YoY
% Chg
QoQ
3,864
3,622
3,498
10.5%
6.7% We are expecting growth of ~7% QoQ and ~11% YoY
because of increase in the Ibuprofen and Metformin
8.7% numbers. EBITBA margins are expected to expand further
whereas EPS may grow by ~8% QoQ basis. Key things to
40 bps look for is commentary on the expansion plans.
Comments
Granules India
CMP(Rs)
141
Net Sales (Rs mn)
Mkt Cap (Rs bn)
32
EBITDA (Rs mn)
841
774
685
22.7%
Reco
Buy
EBITDA Margin (%)
21.8
21.4
19.6
217 bps
Target Price (Rs)
152
PAT (Rs mn)
492
457
390
26.4%
7.8%
% Upside
8%
EPS (Rs)
2.2
2.0
1.7
26.4%
7.8%
CMP(Rs)
468
Net Sales (Rs mn)
7,439
6,658
8,422
-11.7%
Mkt Cap (Rs bn)
59
EBITDA (Rs mn)
1,186
677
1,285
-7.7%
IPCA Lab
11.7% We are expecting domestic business to be under pressure
due to destocking by distributors offset by growth in export
75.3% formulation lead by geographies like Europe and
Australian. Key things to look for in post results concall is
579 bps the commentary on expected resumption of supplies to
WHO and other agencies which could be a significant
29.2% sentiment booster going ahead.
Reco
Hold
EBITDA Margin (%)
15.9
10.2
15.3
69 bps
Target Price (Rs)
480
PAT (Rs mn)
574
444
557
3.0%
% Upside
3%
EPS (Rs)
4.5
3.5
4.4
3.0%
43,637
42,533
44,677
-2.3%
9,512
11,053
13,363
-28.8%
21.8
26.0
29.9
-811 bps
4,577
7,025
9,102
-49.7%
-34.8%
10.2
15.6
20.2
-49.7%
-34.8%
29.2%
Lupin
CMP(Rs)
1,117
Net Sales (Rs mn)
Mkt Cap (Rs bn)
505
EBITDA (Rs mn)
Reco
Hold
EBITDA Margin (%)
Target Price (Rs)
1,292
PAT (Rs mn)
% Upside
16%
EPS (Rs)
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
Expecting revenues to remain flattish in this quarter as
2.6% domestic market will get impacted by destocking. EBITDA
margins may decline as gradual increase in R&D
-13.9%
expenditure. Key things to look for are US and domestic
-419 bps business performance.
| Emkay Strategy | 11th July, 2017 | 100
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Emkay
Pharmaceuticals
Your success is our success
Jun’17E
Mar’17
Jun’16
% Chg
YoY
% Chg
QoQ
Net Sales (Rs mn)
71,998
71,370
82,430
-12.7%
EBITDA (Rs mn)
18,777
18,490
29,210
-35.7%
26.1
25.9
35.4
-936 bps
11,836
15,252
20,337
-41.8%
0.9% Expecting revenues to remain under pressure with decline
in domestic business and lack of new launches in the US
1.6% market. Slight increase in the EBITDA margins whereas
decline in PAT numbers mainly due to few one-off’s in last
17 bps quarter which boosted the bottom-line. Key things to look
for are US business performance and commentary on the
-22.4% specialty portfolio.
4.9
6.3
8.5
-41.8%
-22.4%
14,429
14,340
15,450
-6.6%
3,083
2,950
4,370
-29.4%
21.4
20.6
28.3
-691 bps
1,718
2,230
2,920
-41.2%
0.6% We are expecting de-growth of ~7% YoY and growth of 1%
QoQ basis on the back of muted growth in domestic
4.5% business and decline in US business. Increase in the
pricing pressure will erode the base US business and will
80 bps impact the topline whereas destocking by distributor will
lead to muted growth in domestic business.
-23.0%
10.2
13.2
17.3
-41.2%
-23.0%
Name
Comments
Sun Pharma
CMP(Rs)
Mkt Cap (Rs bn)
Reco
549
1,317
Reduce
EBITDA Margin (%)
Target Price (Rs)
500
PAT (Rs mn)
% Upside
-9%
EPS (Rs)
Torrent Pharma
CMP(Rs)
1,298
Net Sales (Rs mn)
Mkt Cap (Rs bn)
220
EBITDA (Rs mn)
Reco
Sell
EBITDA Margin (%)
Target Price (Rs)
1,000
PAT (Rs mn)
% Upside
-23%
EPS (Rs)
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
| Emkay Strategy | 11th July, 2017 | 101
©
Power
Emkay
Your success is our success
 Generation during Q1FY18 increased 3.7% yoy to 241bn units. The moderate rise in demand was primarily driven by the
onset of peak summer season during the quarter. Coal supply position deteriorated with an average of 7 plants facing
subcritical level of inventory vs. NIL yoy. Peak deficit declined to 0.7% vs 1.6% yoy while base deficit declined to 0.6% vs
0.8% yoy. Spot rate on the exchange improved marginally to Rs2.8/unit during Q1FY18 (vs Rs2.5/unit in Q1FY17). Dispatch
of coal to power sector improved by 3.9% yoy to an average of 37.4 mn tonne in Q1FY18, primarily due to moderate
demand from State Discoms and surplus inventory with Coal India. Net capacity addition during April-May’17 totaled
10,654 MW against the target of 1,198 MW only. The overall installed capacity currently stands at 330.3 GW.
 Strong results: CESC, GIPCL and NHPC are likely to report strong Q1FY18 results. Growth across CESC will be driven by higher
purchases of electricity from its efficient Haldia unit to meet the license area demand and low PLF across its old plants. Commissioning of
Wind projects is expected to drive the numbers of GIPCL. Furthermore, higher generation and low yoy base effect would drive earning
growth across NHPC
 Weak results: (1) JSW Energy – expect PAT to decline by 25.5% yoy to Rs2.7bn due to a steep 8.2% yoy decline in generation. The fall in
earnings and generation is primarily due to poor power offtake across its Barmer & Ratnagiri plants and unviable low merchant rates. (2)
Reliance Power – PAT is expected to decline 21.2% yoy due to lower PLF across its Sasan UMPP and Butitori plants.
 Overall view on the sector: Q1FY18 is likely to be mixed. While CESC, GIPCL, NHPC, NTPC and PowerGrid are likely to report moderate
growth, others like JSW Energy and Reliance Power are expected to deliver weak numbers on the back of subdued overall demand and
muted industrial activity. PLF improved slightly on a qoq basis, which was primarily driven by the onset of peak summer. While the sector
continues to face constraints in the form of 1) poor demand recovery & low pricing, 2) environment clearances and 3) Discoms’ financials,
the recent initiatives taken by the government like UDAY, auctioning of coal & gas linkages and SHAKTI policy etc may unblock the policy
logjam. However, we expect UDAY to reap benefits only by FY19 end onwards. The investor focus should be on earnings, valuations and
risk profile.
 Our top picks: PowerGrid (Buy, TP Rs242, CMP Rs210; 1.7x FY19E book and 9.7x FY19E EPS; strong capex and capitalization growth for
next five years, regulatory business model with assured fixed RoE and no fuel risk and Reliance Power (Buy, TP Rs59, CMP Rs42; low
fuel risk, assured PPA, compelling valuations at 0.4x FY19E book and 6.4xFY19E EPS).
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
| Emkay Strategy | 11th July, 2017 | 102
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Emkay
Power
Your success is our success
Jun’17E
Name
Mar’17
Jun’16
% Chg
YoY
% Chg
QoQ
CESC
CMP(Rs)
872
Net Sales (Rs mn)
Mkt Cap (Rs bn)
116
EBITDA (Rs mn)
Reco
Accumulate EBITDA Margin (%)
Target Price (Rs)
894
PAT (Rs mn)
% Upside
3%
EPS (Rs)
21,956
15,720
20,120
9.1%
39.7%
5,730
2,040
5,110
12.1%
180.9%
26.1
13.0
25.4
70 bps
1,312
bps
2,149
2950
1740
23.5%
-27.2%
16.1
22.1
13.1
23.5%
-27.2%
Comments
Standalone generation likely to decline 10.3% YoY to 1.7 bn
unit, primarily due to increase import from Haldia Project to
meet the license area demand. PAT is likely to increase
23.5% YoY to Rs2.1bn (implying a core quarterly ROE of
5.2% vs 4.4% YoY). Chandrapur Project has signed PPA for
50% of its capacity and is currently supplying 300 MW of its
untied capacity to MSEDCL on short term basis. Its proposal
to sign PPA for 200 MW capacity with Noida is pending with
UPERC. The key trigger would be the signing of PPA for the
untied 300 MW Chandrapur project. Also, the demerger plan
is likely to unlock values for its distinct businesses verticals.
Gujarat Industries Power
CMP(Rs)
129
Net Sales (Rs mn)
3,565
3,333
3,525
1.1%
Mkt Cap (Rs bn)
20
EBITDA (Rs mn)
1,330
1,257
1,113
19.5%
Reco
Buy
EBITDA Margin (%)
37.3
37.7
31.6 573 bps
Target Price (Rs)
132
PAT (Rs mn)
644
825
550
17.2%
% Upside
2%
EPS (Rs)
4.3
5.5
3.6
17.2%
Generation during the quarter is likely to decline 12% YoY to
6.9% 1017 mn units due to complete shutdown of its Vadodara II
plant. Furthermore, generation also declined across Surat I
5.8%
& II plant. Consequently, PLF also declined across Surat
plants. Revenue is likely to increase marginally by 1.1% YoY
-41 bps
whereas net profit is expected to rise 17.2% YoY to
-21.9% Rs644mn in Q1FY18 driven by commissioning of wind
project. Key factor to watch would be the status on PPA of
-21.9% Vadodara II unit.
JSW Energy
CMP(Rs)
64
Net Sales (Rs mn)
Mkt Cap (Rs bn)
105
EBITDA (Rs mn)
Reco
Hold
EBITDA Margin (%)
Target Price (Rs)
64
PAT (Rs mn)
% Upside
0%
EPS (Rs)
22,924
18,621
24,500
-6.4%
23.1%
9,998
5,869
11,173
-10.5%
70.4%
43.6
31.5
45.6 -199 bps
1,210
bps
2,729
248
3,665
-25.5% 1002.3%
1.7
0.2
2.2
-25.5% 1002.3%
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
Overall generation is likely to decline 8.2% YoY due to steep
decline in generation across its Rajwest Barmer (-17.5%
YoY) and Ratnagiri (-21.8% YoY) plant due to poor demand
and unviable merchant rates in the market. However,
generation across its Hydro plants is likely to witness 12.6%
YoY growth. Consequently revenue is likely to decline 6.4%
YoY while EBITDA is expected to decline by 10.5% YoY.
PAT is expected to decline further by 25.5% YoY as low PLF
across merchant capacity would lead to under recovery of
fixed charges.
| Emkay Strategy | 11th July, 2017 | 103
©
Emkay
Power
Your success is our success
Name
Jun’17E
Mar’17
Jun’16
% Chg
YoY
% Chg
QoQ
92.6% Estimate revenue of Rs23.1bn (up 6.2% yoy) primarily due
to 4.1% YoY rise in generation to 7.75 bn units. Realization
6.9% 629.4% is expected to remain flat 0.6% YoY to Rs 4.6/unit. PAT,
however is expected to increase 53.3% YoY due to low base
52 bps 4,563bps effect on YoY basis. Key things to watch- (1) PAF for the
quarter and (2) status of under construction plants mainly
53.3% 690.1% Subansiri and Kishanganga
Comments
NHPC
CMP(Rs)
32
Net Sales (Rs mn)
23,127
13,624
21,816
Mkt Cap (Rs bn)
352
EBITDA (Rs mn)
14,339
2,231
13,414
Reco
Hold
EBITDA Margin (%)
62.0
16.4
61.5
10,289
1,684
6,712
0.9
0.1
0.6
2,01,467
1,99,052
1,89,750
55,406
51,743
50,833
27.5
26.0
26.8
24,761
22,118
23,705
3.0
2.7
2.9
Net Sales (Rs mn)
64,979
67,120
61,199
EBITDA (Rs mn)
57,743
56,185
54,196
88.9
83.7
88.6
19,208
20,133
18,018
3.7
3.8
3.4
Target Price (Rs)
30
% Upside
PAT (Rs mn)
-4%
EPS (Rs)
159
Net Sales (Rs mn)
6.2%
53.3%
690.1%
NTPC
CMP(Rs)
Mkt Cap (Rs bn)
1,311
EBITDA (Rs mn)
Reco
Buy
EBITDA Margin (%)
Target Price (Rs)
179
PAT (Rs mn)
% Upside
13%
EPS (Rs)
1.2% Generation likely to remain flat at -0.3% YoY to 64.4 bn
units. Fuel cost likely to increase 4.4% YoY to Rs2.0/unit.
9.0%
7.1% Tariff rate likely to increase by 6.5% YoY to Rs 3.3/unit. PAT
is likely to increased 4.5% YoY to Rs24.8bn, implying an
71 bps 151 bps effective ROE of 5.1% during the quarter. To watch - (1) coal
supply, (2) adj. - previous year sales and other extra
4.5%
11.9% ordinaries not pass through.
6.2%
4.5%
11.9%
Power Grid Corporation
CMP(Rs)
Mkt Cap (Rs bn)
209
1,096
Reco
Buy
EBITDA Margin (%)
Target Price (Rs)
242
PAT (Rs mn)
% Upside
16%
EPS (Rs)
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
-3.2% PGCIL is expected to report a capitalization of Rs40.2bn and
PAT of Rs19.2bn (+6.6% YoY). Capitalization for Q4FY17 is
6.5%
2.8% expected to witness significant YoY rise of 65% YoY primarily
due to commissioning of 765 KV Darlipalli TPS - Jharsuguda
31 bps 516 bps line, 400 KV Gadarwara-Jabalpur line and 400 KV LucknowKanpur line. For entire FY18E we expect capitalization of
6.6%
-4.6% Rs325bn.
6.2%
6.6%
-4.6%
| Emkay Strategy | 11th July, 2017 | 104
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Emkay
Power
Your success is our success
Name
Jun’17E
Mar’17
Jun’16
% Chg
YoY
% Chg
QoQ
Comments
Reliance power
CMP(Rs)
43
Net Sales (Rs mn)
24,665
24,665
26,787
-7.9%
Mkt Cap (Rs bn)
120
EBITDA (Rs mn)
10,442
11,056
11,420
-8.6%
Reco
Buy
EBITDA Margin (%)
42.3
44.8
42.6
-30 bps
2,683
2,159
3,405
-21.2%
1.0
0.8
1.2
-21.2%
Target Price (Rs)
% Upside
59
38%
PAT (Rs mn)
EPS (Rs)
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
0.0% Reliance power is expected to report 21.2% YoY decline in
PAT to Rs1.0bn. Numbers will be impacted due to fall in PLF
-5.5% across its Butibori Unit and Sasan unit. PLF for Rosa is likely
to improve to 84.8% in Q1FY18 vs 78.2% YoY. PLF for
-249 bps Sasan is expected to decline to 86.3% vs 91.5% YoY, while
PLF for Butibori is expected to decline to 64.4% vs 84.2%
24.3% YoY. To watch (1) Fuel supply at Rosa & (2) Status of
Bangladesh project. We have Buy rating on the stock.
24.3%
| Emkay Strategy | 11th July, 2017 | 105
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Emkay
Ports
Your success is our success
 India’s West Coast container market volumes are expected to clock a growth of ~12.5% yoy in Q1FY18E wherein JNPT is
expected to grow ~7% yoy. Pipavav is expected to exhibit a decline in container volume growth of ~4% yoy. Meanwhile,
Mundra and Hazira continue to capture market share on the West Coast, growing by ~20% yoy and ~25% yoy,
respectively.
 Revenue for Adani Ports & SEZ (ADSEZ) is expected to grow 36% yoy on account of growth in container volumes and
realizations from Abbot Point Operations arm, as the company continues to capture market share in the container
segment. Gujarat Pipavav’s (GPPV) revenue is expected to decline 6% yoy on lower volumes.
 EBITDA margins for ADSEZ (60.3%, -615 bps YoY) are driven by muted port EBITDA margins as well as higher topline
contribution by low-margin businesses. While EBIDTA margins for GPPV (61.2%, +131bps yoy, -444bps qoq) reflect
higher share of liquid cargo in volume mix over Q1FY17.
 Reported profit is expected to fall for ADSEZ (-9% yoy) mainly due to muted operational profitability, higher interest cost,
and full corporate tax rate for Mundra, given completion of tax holiday. ADSEZ’s PBT is expected to grow 12.5% yoy.
While reported profit for GPPV (-13% yoy) is expected to fall on lower volumes and higher tax outgo on a yoy basis. We
recommend ACCUMULATE for Adani Ports & SEZ and HOLD for Gujarat Pipavav Port.
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
| Emkay Strategy | 11th July, 2017 | 106
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Emkay
Ports
Your success is our success
Name
Jun’17E
Mar’17
Jun’16
% Chg
YoY
% Chg
QoQ
10.8% Adani Ports & SEZ is expected to report revenues of
Rs24.7bn registering a growth of 36% YoY. Port income to
11.8% grow 41% YoY led by volume growth of 6.5% on higher
container traffic and revenues from Abbot Point Operations
55 bps arm. EBITDA to come in at Rs14.9bn +23.5% YoY as
EBITDA margin is expected to be at 60.3% -615 bps YoY.
-11.3% Net profit at Rs7.6bn expected to decrease by 12% YoY
mainly due to muted operational profitability, higher interest
-11.3% cost, and full corporate tax rate for Mundra, given completion
of tax holiday.
Comments
Adani Ports & SEZ
CMP(Rs)
372
Net Sales (Rs mn)
24,729
22,315
18,172
36.1%
Mkt Cap (Rs bn)
770
EBITDA (Rs mn)
14,914
13,335
12,077
23.5%
60.3
59.8
7,602
8,573
8,651
-12.1%
3.7
4.1
4.2
-12.1%
1,574
1,746
1,672
-5.9%
1.2
-12.8%
Reco
Accumulate EBITDA Margin (%)
Target Price (Rs)
355
PAT (Rs mn)
% Upside
-4%
EPS (Rs)
CMP(Rs)
151
Net Sales (Rs mn)
Mkt Cap (Rs bn)
73
EBITDA (Rs mn)
964
1,147
66.5 -615 bps
Gujarat Pipavav
Reco
Hold
EBITDA Margin (%)
61.2
65.7
Target Price (Rs)
150
PAT (Rs mn)
521
662
% Upside
-1%
EPS (Rs)
1.1
1.4
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
-9.8% Gujarat Pipavav is expected to report revenues of Rs1.57bn,
-6% YoY (ex-other operating income to decline 6.3% due to
1,002
-3.8% -15.9% 2.3% volume decline and 3.7% decrease in net average
realization). EBITDA expected at Rs964mn, -4% YoY and
59.9 131 bps -444 bps EBITDA margin of 61.2%. Adj PAT expected at Rs521mn 13% YoY, on lower volumes and higher tax outgo on YoY
598 -12.8% -21.3% basis.
-21.3%
| Emkay Strategy | 11th July, 2017 | 107
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Emkay
Real Estate
Your success is our success
 Pan-India residential volumes were up 20-25% qoq in Q4FY17, as the market returned to normalcy post the
demonetization impact in Q3FY17. Our channel checks suggest that Q1FY18 sales have seen a further growth of 5-10%
on a qoq basis across markets, with preference for completed projects (mid-income/affordable housing segments
garnering the majority of sales). Launches continued to be muted, as developers continued to focus on selling existing
inventory and awaited the introduction of the Real Estate Regulator (RERA).
 At the same time, the Indian office leasing market continued to be stable with MNC IT/ITeS companies (including Global
In-House Captives) continuing to look for additional space. Operational office/retail/hotel assets continued to attract
interest from large global institutional investors and pension funds.
 We expect residential sales volumes of companies across our coverage universe to grow between 5-10% on a qoq basis,
as developers continued to push completed inventory.
 Strong execution and cushion of rental income, especially in the case of companies such as Oberoi Realty, Prestige
Estates and Brigade Enterprises, will help to keep debt levels under control. For companies such as Sobha, which are
dependent on residential sales bookings for cash flows, keeping debt levels under control will be key.
 While overall scenario for the next 3 months remains weak for residential volumes overall, the recent fall in home loan
interest rates and RERA may lead to improved volumes from H2FY18 onwrds.
 We reiterate our preference for annuity based plays who derive majority of their EV from operational annuity/hotel assets.
Our top picks are Brigade Enterprises, Prestige Estates and The Phoenix Mills on these parameters.
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
| Emkay Strategy | 11th July, 2017 | 108
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Emkay
Real Estate
Your success is our success
Name
Jun’17E
Mar’17
Jun’16
% Chg
YoY
22,000
22,252
18,675
17.8
7,700
7,102
7,448
3.4
% Chg
QoQ
Comments
DLF
(1.1) Overall, devco sales numbers are expected to remain weak
although completed projects could clock better sales.
8.4 Announcement on completion of DCCDL promoter stake
sale remains key
308
CMP(Rs)
202
Net Sales (Rs mn)
Mkt Cap (Rs bn)
361
EBITDA (Rs mn)
Reco
Hold
EBITDA Margin (%)
35.0
31.9
39.9
(489)
Target Price (Rs)
187
PAT (Rs mn)
600
416
(678)
(188.4)
44.4
% Upside
-8%
EPS (Rs)
0.3
0.2
(0.4)
(188.4)
44.4
CMP(Rs)
382
Net Sales (Rs mn)
3,050
2,896
3,200
(4.7)
Mkt Cap (Rs bn)
130
EBITDA (Rs mn)
1,647
1,515
1,666
(1.1)
Reco
Hold
EBITDA Margin (%)
54.0
52.3
52.1
195
Target Price (Rs)
400
PAT (Rs mn)
1,050
1,018
1,088
(3.5)
3.1
% Upside
5%
EPS (Rs)
3.1
3.0
3.2
(3.5)
3.1
CMP(Rs)
282
Net Sales (Rs mn)
12,500
14,437
9,449
32.3
Mkt Cap (Rs bn)
106
EBITDA (Rs mn)
2,375
2,714
1,706
39.2
Reco
Buy
EBITDA Margin (%)
19.0
18.8
18.1
95
Target Price (Rs)
280
PAT (Rs mn)
600
442
470
27.8
35.8
% Upside
-1%
EPS (Rs)
1.6
1.2
1.3
27.8
35.8
Oberoi Realty
5.3 Sales bookings in ongoing projects are likely to remain
muted. Key monitorable will be fresh sales bookings in Worli
8.7 super luxury project and incremental leasing in Commerz II
property
169
Prestige Estates
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
(13.4) On QoQ basis, we expect a marginal uptick in sales of
completed inventory while we expect rental income to
(12.5) provide adequate cushion to cash flows. Progress on
restructuring of rental portfolio and impending stake sale is
20 the key monitorable
| Emkay Strategy | 11th July, 2017 | 109
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Emkay
Real Estate
Your success is our success
Name
Jun’17E
Mar’17
Jun’16
% Chg
YoY
% Chg
QoQ
Comments
Phoenix Mills
CMP(Rs)
466
Net Sales (Rs mn)
4,500
4,544
4,424
1.7
Mkt Cap (Rs bn)
71
EBITDA (Rs mn)
2,000
1,997
2,023
(1.2)
(1.0) We expect a stable set of numbers as the company largely
derives revenue from rental model. Recent announcement of
0.2 Island Star (Bengaluru East) Mall deal with Canadian
Pension Board will lead to expansion of existing mall
50 portfolio
Reco
Buy
EBITDA Margin (%)
44.4
43.9
45.7
(129)
Target Price (Rs)
483
PAT (Rs mn)
450
512
477
(5.7)
(12.2)
% Upside
4%
EPS (Rs)
2.9
3.3
3.1
(5.7)
(12.2)
CMP(Rs)
261
Net Sales (Rs mn)
5,500
5,537
4,592
19.8
Mkt Cap (Rs bn)
35
EBITDA (Rs mn)
1,650
1,981
1,175
40.4
Brigade Enterprises
Reco
Buy
EBITDA Margin (%)
30.0
35.8
25.6
442
(0.7) On QoQ basis, we expect a marginal uptick in residential
volumes and expect rental income to provide adequate
(16.7) cushion to cash flows. Timeline for commencement of
operation of upcoming hotels and rental properties will be
(578) key
Target Price (Rs)
301
PAT (Rs mn)
360
743
202
78.3
(51.5)
% Upside
15%
EPS (Rs)
2.7
6.5
1.8
49.4
(59.4)
CMP(Rs)
397
Net Sales (Rs mn)
5,700
5,888
5,701
(0.0)
Mkt Cap (Rs bn)
38
EBITDA (Rs mn)
1,083
1,202
997
8.6
Sobha
Reco
Hold
EBITDA Margin (%)
19.0
20.4
17.5
151
(3.2) Company's sales bookings have increased 13% QoQ in
volume terms and 12% in value terms led by interim revival in
(9.9) the NCR market. Sustainability of the same and company’s
launch plans for H2FY18 will be key monitorables
(141)
Target Price (Rs)
401
PAT (Rs mn)
450
470
360
25.0
(4.3)
% Upside
1%
EPS (Rs)
4.7
4.9
3.7
25.0
(4.3)
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
| Emkay Strategy | 11th July, 2017 | 110
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Emkay
Real Estate
Your success is our success
% Chg
YoY
Name
% Chg
QoQ
Comments
Kolte-Patil Developers
CMP(Rs)
174
Net Sales (Rs mn)
2,150
3,334
1,798
19.6
Mkt Cap (Rs bn)
13
EBITDA (Rs mn)
559
684
591
(5.5)
(35.5) We expect flattish QoQ volumes of 0.55msf in line with predemonetization levels. Launch plans for FY18 in light of
(18.2) RERA implementation in Maharashtra and volume guidance
on the same remain key monitorables
550
Reco
Buy
EBITDA Margin (%)
26.0
20.5
32.9
(689)
Target Price (Rs)
219
PAT (Rs mn)
220
298
191
15.5
(26.2)
% Upside
26%
EPS (Rs)
2.9
3.9
2.5
15.5
(26.2)
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
| Emkay Strategy | 11th July, 2017 | 111
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Retail
Emkay
Your success is our success
 Uncertainty surrounding GST results in de-stocking and early EOSS – Delayed declaration of GST rates for Textiles and
Retail sectors, coupled with uncertainty surrounding the impact on older inventory post 1st July resulted in de-stocking at the
distributor/retailer level. Retailers advanced their EOSS by almost a fortnight, resulting in a robust revenue growth. We believe
that branded players were partially impacted by destocking during the early weeks of June but recovered via advanced EOSS in
EBOs. We expect yoy growth in: i) ABFRL’s revenue of 16%, ii) Arvind’s revenue of 13%, iii) FLFL’s revenue of 23%, iv) Monte
Carlo’s revenue of 9%, v) Page’s revenue of 18%, and vi) Shoppers Stop’s revenue of 10%. Jewellery Retail was aided by a
favourable base and minimal impact from GST rates. We expect PC Jeweller’s revenue to grow by 19% yoy, while Titan’s revenue
is expected to grow by 23% yoy, boosted by new launches, exchange programme and store expansion.
 Margin impacted by early onset of EOSS – Decline in gross margins (due to higher discounted sales) is likely to be partially
offset by operating leverage. For fashion retailers, we expect yoy EBITDA margin decline of 20bps for Arvind, 60bps for Monte
Carlo, and 10bps for Shoppers Stop. ABFRL EBITDA margins are expected to be flat yoy. FLFL and Page are likely to witness
EBITDA margin improvement of 30bps each. PC Jeweller and Titan EBITDA margins are expected to decline by 170bps and
20bps, respectively impacted by weaker mix.
 Key triggers - For Fashion Retail i) In ABFRL, we expect Madura to grow by 12% yoy and Pantaloons by 23% yoy, ii) Arvind's
brand business is expected to grow by 25% yoy, iii) We expect double digit SSG for FLFL, iv) Monte Carlo’s cotton segment is
expected to grow 6% yoy, v) We expect Page’s sports wear to grow by 22% yoy, and vi) We expect Shoppers Stop SSG at 10%
yoy. For Jewellery Retail i) Store expansion will drive 26% yoy growth in domestic sales for PC Jeweller while ii) Titan’s jewellery
sales are expected to grow by 28% yoy.
 We remain overweight on the sector - We expect the introduction of GST to accelerate the shift from unorganised to organised
retail. We continue to maintain our positive stance on the sector led by the rising urban consumption and improved spending on
back of 7th Pay Commission recommendations. We maintain our BUY rating on FLFL (TP 331), Monte Carlo (TP 550), and PC
Jeweller (TP 260); ACCUMULATE rating on ABFRL (TP 190) and Arvind (TP 425); HOLD on Page (TP 16,502), Shoppers Stop
(TP 360) and Titan (TP 488).
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
| Emkay Strategy | 11th July, 2017 | 112
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Emkay
Retail
Your success is our success
Name
ABFRL
Mar’17
Jun’16
% Chg
YoY
16,358
16,149
14,151
15.6%
810
1,140
701
5.0
7.1
5.0
176
Net Sales (Rs mn)
Mkt Cap (Rs bn)
136
EBITDA (Rs mn)
Comments
Accumulate EBITDA Margin (%)
1.3% Expect overall revenues to grow by 16% yoy on the back of
23% growth in Pantaloons and 12% growth in Madura’s
15.6% -28.9% business. We expect overall EBITDA margins to remain flat
with operating leverage offsetting any decline due to
0 bps -211 bps increased discounting. EBITDA is expected to grow by 16%
to Rs 810mn. Company expected to report loss of Rs
193mn, despite 89% yoy increase in other income.
Target Price (Rs)
190
PAT (Rs mn)
-193
218
-208
% Upside
8%
EPS (Rs)
-0.3
0.3
-0.2
23,747
24,648
21,041
12.9%
2,627
2,235
2,380
10.4%
11.1
9.1
11.3
-25 bps
Arvind
Consolidated
CMP(Rs)
370
Net Sales (Rs mn)
Mkt Cap (Rs bn)
96
EBITDA (Rs mn)
Reco
% Chg
QoQ
Standalone
CMP(Rs)
Reco
Jun’17E
Accumulate EBITDA Margin (%)
Target Price (Rs)
425
PAT (Rs mn)
959
974
699
37.3%
% Upside
15%
EPS (Rs)
4.4
4.4
3.2
37.3%
9,870
9,874
8,038
22.8%
Future Lifestyle
-3.7% Expect consolidated revenues to grow by 13% yoy on the
back of 24% growth in Brands and Retail. We expect textiles
17.5% segment revenues to grow at 6% yoy led by 20% growth in
garments. We expect consolidated EBITDA margins to
199 bps decline by 20bps yoy to 11.1% impacted by high input costs,
weaker mix and investments in brands. EBITDA expected to
-1.5% grow by 10% to Rs 2.6bn. Lower interest cost is expected to
boost profitability resulting in 31% APAT growth to Rs
-1.5% 960mn.
Standalone
CMP(Rs)
303
Net Sales (Rs mn)
Mkt Cap (Rs bn)
58
EBITDA (Rs mn)
985
948
778
26.6%
Reco
Buy
EBITDA Margin (%)
10.0
9.6
9.7
30 bps
Target Price (Rs)
331
PAT (Rs mn)
129
192
35
265.0%
% Upside
9%
EPS (Rs)
0.7
1.0
0.2
265.0%
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
0.0% We expect FLFL to report a double digit SSG resulting in a
23% yoy revenue growth to Rs 9.9bn. We expect licensed
4.0% and third party brands to outpace the owned brands growing
at 24% yoy each. Operating leverage is expected to offset
38 bps the impact of an early EOSS on the margins. EBITDA
margins expected to improve by 30bps to 10%. We expect
-32.9% EBITDA to grow by 27% yoy to Rs 986mn. Higher other
income and lower interest burden is expected to drive APAT
-32.9% by 3.6x to Rs 129mn.
| Emkay Strategy | 11th July, 2017 | 113
©
Emkay
Retail
Your success is our success
Name
Monte Carlo
Jun’17E
Mar’17
Jun’16
% Chg
YoY
822
956
756
8.6%
98
-96
95
3.4%
11.9
-10.0
12.5
-60 bps
547
Net Sales (Rs mn)
Mkt Cap (Rs bn)
12
EBITDA (Rs mn)
Reco
Buy
EBITDA Margin (%)
Target Price (Rs)
550
PAT (Rs mn)
36
-71
20
74.8%
% Upside
1%
EPS (Rs)
1.6
-3.3
0.9
74.8%
Net Sales (Rs mn)
6,765
4,989
5,724
18.2%
1,311
974
1,092
20.0%
Page Industries
16,892
188
EBITDA (Rs mn)
Reco
Hold
EBITDA Margin (%)
19.4
19.5
19.1
30 bps
PAT (Rs mn)
827
668
679
21.6%
EPS (Rs)
74.1
59.9
60.9
21.6%
19,875
21,554
16,645
19.4%
2,128
1,769
2,057
3.5%
10.7
8.2
1,138
1,101
1,066
6.7%
6.4
6.1
6.0
6.7%
% Upside
-14.0% While Monte Carlo has cleared older inventory from the
system, we expect only a 9% growth for the seasonally weak
quarter to Rs 822mn. We expect the cotton segment to grow
by 6% yoy to Rs 586mn. Expect EBITDA margins to decline
2,193
bps by 60bps to 11.9% on account of weaker mix and inventory
de-stocking at distributor level. EBITDA to grow at 3% to Rs
98mn. We expect APAT growth of 75% yoy to Rs 36mn on
the back of higher other income.
Standalone
Mkt Cap (Rs bn)
Target Price (Rs)
Comments
Standalone
CMP(Rs)
CMP(Rs)
% Chg
QoQ
16,502
-2%
PC Jeweller
35.6% Expect menswear/sportswear to sustain revenue growth
momentum at 18%/22% yoy respectively. Expect
34.6% womenswear segment to report a healthy 13% growth led by
9% volume growth. Expect standalone revenue to grow 18%
-14 bps yoy to Rs 6.7bn and overall volumes by 12%. Operating
leverage and full effect of price increase are expected to
23.8% drive EBITDA margins by 30bps to 19.4%. EBITDA expected
to grow 20% to Rs 1.3bn. Estimate APAT at Rs 827mn,
23.8%
growth of 22% yoy.
Standalone
CMP(Rs)
250
Net Sales (Rs mn)
Mkt Cap (Rs bn)
89
EBITDA (Rs mn)
Reco
Buy
EBITDA Margin (%)
Target Price (Rs)
260
PAT (Rs mn)
% Upside
4%
EPS (Rs)
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
12.4 -165 bps
-7.8% We expect domestic revenues to grow by 19% led by store
expansion (+3 stores), and a favourable base. Expect export
20.3% segment growth to taper to 8% yoy led by import duties levied
by UAE and increased tensions in the Middle East. We expect
250 bps overall revenues at Rs 19.9bn, up 19% yoy. Weaker mix
(strong studded growth in the base quarter) and store opening
3.4% costs is likely to impact margins. EBITDA margins to decline
by 170bps yoy to 10.7%. Expect EBITDA at Rs 2.1bn, growth
3.4% of 3% and APAT to grow by 7% to Rs 1.1bn.
| Emkay Strategy | 11th July, 2017 | 114
©
Emkay
Retail
Your success is our success
Name
Shoppers Stop
Jun’17E
Mar’17
Jun’16
% Chg
YoY
8,494
9,103
7,722
10.0%
% Chg
QoQ
Comments
Standalone
CMP(Rs)
348
Net Sales (Rs mn)
Mkt Cap (Rs bn)
29
EBITDA (Rs mn)
255
525
237
-6.7% We expect SSG at 10%, primarily led by an advancement in
EOSS by the retailer. We expect revenues at Rs 8.5bn, up
7.6% -51.5% 10% yoy. Higher percentage of discounted sales is expected
to impact EBITDA margins declining by 10bps to 3.1%.
-7 bps -277 bps Subsequently, we expect EBITDA to report a growth of 7.6%
yoy at Rs 255mn. Higher other income is likely to result in a
loss of Rs 66mn. We expect Hypercity to report a positive
EBITDA during the quarter.
Reco
Hold
EBITDA Margin (%)
3.0
5.8
3.1
Target Price (Rs)
360
PAT (Rs mn)
-66
117
-136
% Upside
3%
EPS (Rs)
-0.8
1.4
-1.6
34,300
34,297
27,988
22.6%
3,512
2,721
2,922
20.2%
10.2
7.9
10.4
-20 bps
2,484
2,029
2,006
23.8%
2.8
2.3
2.3
23.8%
Titan
Standalone
CMP(Rs)
533
Net Sales (Rs mn)
Mkt Cap (Rs bn)
473
EBITDA (Rs mn)
Reco
Hold
EBITDA Margin (%)
Target Price (Rs)
488
PAT (Rs mn)
% Upside
-8%
EPS (Rs)
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
0.0% Healthy Akshaya Tritiya, new launches, gold exchange
scheme and a favourable base to boost the overall jewellery
29.1% growth. Estimate a 28% revenue growth in Jewellery with
Watches revenues flat yoy. Overall revenue growth of 23%
231 bps at Rs 34.3bn. Weak sales in Watches, coupled with greater
focus on wedding jewellery to adversely impact margins.
22.4% Expect EBITDA margins of 10.2% down 20bps yoy; EBITDA
at Rs 3.5bn, up 20% yoy. Higher other income and lower
22.4% interest outgo to result in APAT growth of 24% at Rs 2.5bn.
| Emkay Strategy | 11th July, 2017 | 115
©
Specialty & Commodity Chemicals
Emkay
Your success is our success
In our Specialty Chemicals coverage universe, we expect overall sector revenue growth of 23% yoy, whereas EBITDA is likely
to decline by 11% yoy on the back of contraction in EBITDA margins. As a result, the net profit is likely to decline by 11% yoy.
 Fluorine chemistry

The overall fluorine chemistry based companies are likely to see recovery in revenue growth but margins are likely to take some
more time to recover due to lower revenue growth from Specialty Chemicals business.
 Enzymes

Enzyme Chemistry universe will show muted revenue growth due to lower traction in top accounts but will likely see some margin
recovery sequentially. Emersion Polymer chemistry based companies will show recovery on the margin front, along with revenue
growth.
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
| Emkay Strategy | 11th July, 2017 | 116
©
Emkay
Specialty & Commodity Chemicals
Your success is our success
Name
Jun’17E
Mar’17
Jun’16
% Chg
YoY
% Chg
QoQ
Comments
Advanced Enzymes
CMP(Rs)
351
Net Sales (Rs mn)
990
860
945
4.8%
Mkt Cap (Rs bn)
39
EBITDA (Rs mn)
452
327
509
-11.1%
Reco
Buy
EBITDA Margin (%)
45.7
38.0
53.8 -814 bps
Target Price (Rs)
421
PAT (Rs mn)
286
200
282
1.5%
% Upside
20%
EPS (Rs)
2.6
1.8
2.5
1.5%
432
Net Sales (Rs mn)
1,279
867
1,065
20.1%
EBITDA (Rs mn)
111
71
107
3.5%
10.1 -139 bps
15.1% We expect revenues to increase by 4.8% yoy due to slower
demand off-take from top client, which accounts for ~25% of
38.4% the total revenues. This will be partially offset by decent
growth in the non-top accounts. EBITDA Margin is expected
769 bps to decline by 814bps yoy owing to a decline in high-margin
Pharmaceuticals segment. As a result, EBITDA is expected
43.3% to decline by 11.1% yoy. Despite this, PAT is likely to grow
by 43.3% yoy in Q1FY18 on the back of lower tax rate.
43.3%
Apcotex Industries
CMP(Rs)
Mkt Cap (Rs bn)
9
Reco
Buy
EBITDA Margin (%)
8.7
8.2
Target Price (Rs)
547
PAT (Rs mn)
64
35
69
-6.1%
% Upside
27%
EPS (Rs)
3.1
1.7
3.3
-6.1%
3,028
Net Sales (Rs mn)
1,800
2,005
1,640
9.7%
350
391
393
-10.9%
19.5
19.5
24.0 -451 bps
PAT (Rs mn)
226
294
286
-20.9%
EPS (Rs)
23.1
30.0
29.3
-21.1%
We expect revenues to increase by 20.1% yoy due to strong
47.5% growth in Latex and Nitrile Rubber businesses. EBITDA
Margin is expected to decline by 139bps yoy due to
56.0%
consolidation of low-margin OMNOVA business. Despite
this, EBITDA is expected to grow by 3.5% yoy. PAT is likely
48 bps
to de-grow by 6.1% yoy in Q1FY18 on the back of higher tax
83.1% rate. However, on a sequential basis, the overall
performance will look better.
83.1%
Navin Fluorine
CMP(Rs)
Mkt Cap (Rs bn)
Reco
Target Price (Rs)
% Upside
30
EBITDA (Rs mn)
Accumulate EBITDA Margin (%)
3,240
7%
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
-10.2% Revenues for Navin Fluorine is expected to increase by 9.7%
yoy, led by a better performance of CRAMs and Inorganic
-10.2% Fluoride division. On the other hand, revenues of Refrigerant
and Specialty Chemicals are expected to post muted
0 bps performance on the back of slowdown in Agro-chemical
business. EBITDA margin is expected to decline by 451bps
-23.0% yoy with absolute EBITDA de-growth of 10.2% yoy. PAT is
expected to de-grow by 23% yoy due to lower EBITDA base.
-23.0%
| Emkay Strategy | 11th July, 2017 | 117
©
Emkay
Specialty & Commodity Chemicals
Name
Your success is our success
Jun’17E
Mar’17
Jun’16
% Chg
YoY
% Chg
QoQ
16,576
14,164
12,994
27.6%
2,498
2,145
2,813
-11.2%
15.1
15.1
1,420
1,292
1,592
-10.8%
24.3
22.1
27.2
-10.8%
17.0% Revenues for SRF are likely to increase by 27.6% yoy on the
back of growth in Technical Textile, Packaging Films and
16.4% Chemicals. Revenues from Technical Textiles are expected
to increase by 34% yoy due to recovery in the key
-8 bps dependent industries. Owing to some weakness in operating
efficiency in Chemicals business, overall margins are
9.9% expected to contract by 658bps yoy. Net profit could decline
9.9% yoy due to lower EBITDA base.
9.9%
Comments
SRF
CMP(Rs)
Mkt Cap (Rs bn)
Reco
Target Price (Rs)
% Upside
1,534
88
Net Sales (Rs mn)
EBITDA (Rs mn)
Accumulate EBITDA Margin (%)
1,665
9%
PAT (Rs mn)
EPS (Rs)
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
21.6 -658 bps
| Emkay Strategy | 11th July, 2017 | 118
©
Telecom
Emkay
Your success is our success
 We expect intensity of revenue decline in Bharti and Idea to moderate, as majority of downtrading happened in Q4FY17
and Jio has also started to partially charge consumers. Lower pace of deceleration in realization in both Voice and Data
would check decline in revenues. Incremental subscriber addition at lower ARPU and slower uptrend (Non-data to Data or
lower ARPU to higher ARPU) would continue to result in sequential (qoq) fall in revenue. However, volume growth in both
Data and Voice would restrict the decline. Unlimited voice offerings would continue to put pressure on voice realizations.
Revenue decline would not be offset fully by cost control, resulting in a sustained fall in EBITDA. Bharti Infratel would
register healthy tenancy additions for third consecutive quarter, driven by demand from Jio while exits from marginal
operators would continue to affect its performance. For TCOM, performance would be impacted by INR appreciation, lowerthan-expected reversal of one-off costs in Q4FY17 and investment in digital transformation.
 Domestic wireless revenue is expected to decline by 2% and 3% for Bharti and Idea, respectively. ARPU for both, Bharti and Idea
is expected to decline by 5% each. Bharti and Idea would register healthy Voice traffic growth of 10% and 6%, respectively due to
unlimited voice offerings. We estimate VRPM to decline by 8% for Idea and 11% for Bharti.
 Data volume growth is likely to decelerate qoq after rebounding in Q4FY17. Data revenue is expected to decline by 2% qoq for
Bharti and 5% qoq for Idea. Bharti and Idea are expected to add 6.5mn and 3.4mn subscribers, respectively during the quarter.
 Decline in revenues, accelerated network rollout, provision reversal in access charge (Bharti) and normalization of forex
gain (Idea) are expected to dent operating performance. EBITDA margins are estimated at 31.6%, a decline of 176bps qoq.
Decline in EBITDA, rise in depreciation and interest cost will keep profitability under pressure.
 Bharti Infratel: We estimate consolidated tower additions of 402 and tenancy additions of 5.2k (vs 5.6k in Q4FY17),
resulting in a tenancy ratio of 2.37x compared to 2.33x in Q4FY17. Continued tenancies from Jio would aid healthy net
additions. Fall in energy margins to 4.7% vs 10.2% in Q4FY17.
 Tata Communications: TCOM’s Q1FY18 results would be purely for continued operations after the sale of Data Centre and
Neotel businesses. INR appreciation will impact reported financials while underlying voice business would continue to see
deterioration. GDS revenue is expected to remain flat qoq while cost escalations will restrict increase in EBITDA.
 Maintain cautious view on the sector, with REDUCE rating on Bharti while Idea remains under review. We have HOLD
rating on Bharti Infratel and Tata Communication.
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
| Emkay Strategy | 11th July, 2017 | 119
©
Emkay
Telecom
Your success is our success
Jun’17E
Name
Mar’17
Jun’16
% Chg
YoY
% Chg
QoQ
Bharti Airtel
CMP(Rs)
Mkt Cap (Rs bn)
Reco
Target Price (Rs)
% Upside
386
1,543
Reduce
306
-21%
Net Sales (Rs mn)
EBITDA (Rs mn)
EBITDA Margin (%)
PAT (Rs mn)
EPS (Rs)
2,18,133
2,19,806
2,55,729
-14.7%
-0.8%
75,836
79,060
95,745
-20.8%
-4.1%
34.8
36.0
4,303
4,706
14,620
-70.6%
-8.6%
1.1
1.2
3.7
-70.6%
-8.6%
37.4 -267 bps -120 bps
Bharti Infratel
CMP(Rs)
404
Net Sales (Rs mn)
35,642
35,204
32,106
11.0%
1.2%
Mkt Cap (Rs bn)
748
EBITDA (Rs mn)
15,505
15,723
13,946
11.2%
-1.4%
Reco
Hold
EBITDA Margin (%)
43.5
44.7
43.4
Target Price (Rs)
348
PAT (Rs mn)
7,237
5,966
7,562
-4.3%
21.3%
3.8
3.2
4.0
-4.3%
21.3%
% Upside
-14%
EPS (Rs)
7 bps -116 bps
Idea Cellular
CMP(Rs)
83
Net Sales (Rs mn)
79,098
81,261
94,866
-16.6%
-2.7%
Mkt Cap (Rs bn)
301
EBITDA (Rs mn)
19,827
21,965
30,742
-35.5%
-9.7%
25.1
27.0
-6,505
-3,277
2,204
n.a
n.a
-1.8
-0.9
0.6
n.a
n.a
Reco
Target Price (Rs)
% Upside
Reduce
70
-16%
EBITDA Margin (%)
PAT (Rs mn)
EPS (Rs)
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
32.4 -734 bps -196 bps
Comments
India mobile revenue decline to decelerate to 3.3% qoq to
Rs125bn, as major impact of downtrading was seen in
Q4FY17. India wireless ARPU to remain under pressure at
Rs149 (-6% qoq), as Bharti is aggressively adding low ARPU
subscribers. Voice revenue is expected to decline 2% qoq,
impacted by fall in VRPM (-10.6% qoq). MOU to register
growth of 7% qoq, driven by unlimited voice offerings. Data
revenue is expected to decline 2.1% qoq to Rs26.9bn, affected
by continued pressure on realisations. Data realisation to
decline 18% qoq while volume is expected to grow 19% qoq.
Africa reported financials will be hurt by rupee depreciation.
Revenue is expected to decline 5% qoq to Rs47.8bn with
EBITDA of Rs11.4bn (-12.9% qoq) and EBITDA margin of
23.8% vs 25.9% in Q4FY17.
Rental revenue/ energy reimbursement is expected to grow
9.2%/14.3% yoy to Rs22.4bn/13.2bn. Consolidated tower
additions will be 402 and tenancy additions 5.2k on qoq basis,
resulting in a tenancy ratio of 2.37x vs 2.32x in Q4FY17. Net
tenancy addition to be driven by tenancies from Jio.
Rental/tower is expected to remain flat qoq. We expect energy
margin of 4.7% vs 3.4% in Q1FY17 and 10.2% in Q4FY17. On
standalone basis for Indus, we expect 150/600 tower addition,
2.2/7.1K tenancy addition qoq and tenancy ratio of
2.34x/2.41x.
Wireless revenue decline to decelerate to 3.1% qoq to
Rs77.1bn, as major downtrading happened in Q4FY17.
Blended ARPU to decline 5.3% qoq to Rs135 due to higher
proportion of rural subscribers while Idea is relatively less
aggressive in incremental net adds. Voice revenue is
expected to decline 2.7% qoq to Rs58.3bn, impacted by
weakness in VRPM (-7.8% qoq). MOU is expected to grow
5.6% qoq, driven by unlimited free offerings. Data revenue is
expected to decline 4.8% qoq to Rs13.9bn, impacted by
decline in realisation (-15% qoq). Data volume is expected to
grow 12.0% qoq.
| Emkay Strategy | 11th July, 2017 | 120
©
Emkay
Telecom
Your success is our success
Name
Jun’17E
Mar’17
Jun’16
% Chg
YoY
43,811
42,937
44,569
-1.7%
5,454
5,024
6,720
-18.8%
% Chg
QoQ
Comments
Tata Communication
CMP(Rs)
669
Net Sales (Rs mn)
Mkt Cap (Rs bn)
191
EBITDA (Rs mn)
Reco
Hold
EBITDA Margin (%)
12.5
11.7
Target Price (Rs)
705
PAT (Rs mn)
339
809
1,341
-74.7%
% Upside
5%
EPS (Rs)
1.2
2.8
4.7
-74.7%
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
15.1 -263 bps
We expect data segment to register growth of 2% yoy and
2.0% 3.5% qoq. Rupee appreciation to impact reported financials
while underlying voice business would continue to see
8.6%
deterioration. GVS revenue is expected to decline 18% yoy
75 bps to Rs14.7bn while GVS EBITDA is estimated at Rs809mn (31% yoy) with margin of 5.5% (-103bps qoq). GDS revenue
-58.1% is expected to decline 2% yoy to Rs28.9bn while GDS
EBITDA is estimated at Rs4.7bn (-31% yoy) with margin of
-58.1% 16% (-751bps qoq). Wage increments, lower-than-expected
rebound in one-off costs in Q4FY17 and internal digital
transformation.
| Emkay Strategy | 11th July, 2017 | 121
©
Emkay
Others
Your success is our success
Jun’17E
Mar’17
Jun’16
% Chg
YoY
% Chg
QoQ
11,854
13,024
10,819
9.6%
-9.0%
1,276
1,095
1,102
15.8%
16.6%
EBITDA Margin (%)
10.8
8.4
10.2
58 bps
236 bps
Name
Comments
Apar Industries
CMP(Rs)
801
Net Sales (Rs mn)
Mkt Cap (Rs bn)
31
EBITDA (Rs mn)
Reco
Buy
Target Price (Rs)
1,077
PAT (Rs mn)
675
478
456
48.0%
41.3%
% Upside
35%
EPS (Rs)
17.5
12.4
11.9
48.0%
41.3%
CMP(Rs)
329
Net Sales (Rs mn)
9,894
12,639
9,594
3.1%
Mkt Cap (Rs bn)
33
EBITDA (Rs mn)
545
739
564
-3.4%
We expect overall revenue to increase 9.6% YoY to
Rs11.9bn (on high YoY base) driven by strong sales across
the Cable and Specialty Oil segment. Sales across the
Conductor segment is likely to remain flat during the quarter.
Expect EBITDA margins to improve marginally by 58 bps
YoY to 10.8% and EBITDA to increase by 15.8% YoY to Rs
1.3bn. Reported PAT however is likely to increase 48.0%
YoY to Rs675mn driven by higher share of value added
products like HEC and Elastomeric cables.
Bajaj Electricals
We expect BJE's revenue to increase 3% YoY due to order
execution in project business. EBITDA margin will decline by
-26.3% 40bps to 5.5% YoY. However, net profit should increase
14% YoY due to lower interest cost.
-34 bps
-21.7%
Reco
Buy
EBITDA Margin (%)
5.5
5.8
5.9
-37 bps
Target Price (Rs)
402
PAT (Rs mn)
262
384
229
14.4%
-31.9%
% Upside
22%
EPS (Rs)
2.6
3.8
2.3
14.0%
-31.9%
CMP(Rs)
168
Net Sales (Rs mn)
1,222
1,081
1,087
12.5%
Mkt Cap (Rs bn)
45
EBITDA (Rs mn)
463
344
415
11.5%
Delta Corp
13.0% DELTA's 1Q revenue should rise 12.5% YoY backed by
better footfalls at Goa casinos and commencement of Sikkim
34.5% Casino. The EBITDA margins will remian stable. The net
profit will increase by 35% YoY due to revenue growth.
606 bps
Reco
Buy
EBITDA Margin (%)
37.9
31.8
38.2
-34 bps
Target Price (Rs)
192
PAT (Rs mn)
208
114
155
34.5%
82.7%
% Upside
14%
EPS (Rs)
0.8
0.5
0.7
16.2%
58.5%
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
| Emkay Strategy | 11th July, 2017 | 122
©
Emkay
Others
Your success is our success
Jun’17E
Name
Mar’17
Jun’16
% Chg
YoY
% Chg
QoQ
Essel Propack
CMP(Rs)
241
Net Sales (Rs mn)
6,051
6,126
5,280
14.6%
-1.2%
Mkt Cap (Rs bn)
38
EBITDA (Rs mn)
1,119
1,199
976
14.6%
-6.7%
Reco
Hold
EBITDA Margin (%)
18.5
19.6
18.5
0 bps
-108 bps
Target Price (Rs)
254
PAT (Rs mn)
465
590
376
23.6%
-21.2%
% Upside
5%
EPS (Rs)
3.0
3.8
2.4
23.6%
-21.2%
Grasim Industries
CMP(Rs)
1,251
Net Sales (Rs mn)
Mkt Cap (Rs bn)
584
EBITDA (Rs mn)
Reco
Hold
EBITDA Margin (%)
Target Price (Rs)
1,084
PAT (Rs mn)
% Upside
-13%
EPS (Rs)
469
Net Sales (Rs mn)
Mkt Cap (Rs bn)
293
EBITDA (Rs mn)
Reco
Hold
EBITDA Margin (%)
Target Price (Rs)
440
PAT (Rs mn)
% Upside
-6%
EPS (Rs)
26,218
28,761
23,959
9.4%
5,177
5,254
4,975
4.1%
19.7
18.3
20.8
-102
3,372
3,155
3,209
5.1%
6.9%
36.8
33.8
34.4
7.0%
8.9%
19,921
17,102
14,668
35.8%
16.5%
2,463
2,296
2,004
22.9%
7.3%
12.4
13.4
13.7
-130 bps
-106 bps
1,642
1,715
1,456
12.8%
-4.3%
2.6
2.7
2.3
12.8%
-4.3%
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
We expect 14.6% revenue growth aided by healthy growth in
Europe due to consolidation of Germany JV. AMESA region
growth will be muted due to GST implementation in India as
we have seen some destocking across dealers. Rising nonoral care share and new customer addition is expected to
drive growth in EAP. America is expected to grow at a
steady rate of 9% yoy aided by Mexico geography. We
expect EBITDA to grow 14.6% yoy to Rs 1.1bn and margins
to be flat at 18.5%. Subsequently, we expect APAT to grow
at 23.6% yoy to Rs 465mn.
We expect VSF sales to grow by 8.7% YoY for the quarter
on account of 4.5%/4.4% YoY growth in realisation/volume.
EBITDA margin of VSF segment is expected to decline by
-8.8% 220bps yoy to 19%. VSF EBIDTA/kg is expected to remain
flat YoY at Rs27.0/kg for the quarter. Net sales of the
-1.5% chemical segment is expected to grow by 9.6% YoY while
EBITDA of the segment is expected to decline by 10% YoY
148
with EBITDA margin of 21.0%.
Havells India
CMP(Rs)
Comments
We expect 35.8% revenue growth aided by addition of Lloyd
consumer business and value growth in cables and wires
due to price inflation. Switchgear growth expected to be
steady due to favorable base and some pick up seen in real
estate activities. Some destocking was seen in second half
of May and June. Margins of erstwhile Havells business are
expected to be healthy as there was no discounting seen for
dealers and input cost has been stable. We expect EBITDA
margins to decline 130bps yoy to 12.4% mainly due to
merger of low margin Lloyd consumer business. EBITDA to
grow 35.8% yoy to Rs 2.0bn. APAT to grow by 12.8% yoy to
Rs 1.6bn impacted by higher depreciation.
| Emkay Strategy | 11th July, 2017 | 123
©
Emkay
Others
Your success is our success
Jun’17E
Mar’17
Jun’16
% Chg
YoY
5,492
7,003
6,342
-13.4%
392
339
355
10.4%
7.1
4.8
5.6 154 bps
PAT (Rs mn)
188
147
165
13.6%
8%
EPS (Rs)
8.1
6.3
7.1
13.6%
CMP(Rs)
150
Net Sales (Rs mn)
1,495
1,278
1,312
13.9%
Mkt Cap (Rs bn)
18
EBITDA (Rs mn)
270
263
2.8%
Name
% Chg
QoQ
Comments
Heritage Foods
CMP(Rs)
Mkt Cap (Rs bn)
Reco
Target Price (Rs)
% Upside
1,075
25
Net Sales (Rs mn)
EBITDA (Rs mn)
Accumulate EBITDA Margin (%)
1,160
-21.6% Expect revenue growth of 13% in dairy segment, while
overall revenue will decline by 13.4% due to hiving off of
15.7% retail and other businesses. Gross margins to improve by
20bps yoy aided by mix and EBITDA margins to be
230 bps improved by 150bps yoy. Key highlights i) We expect
revenue to decline by 13.4% at Rs 5.5bn aided by healthy
27.7% growth in value added segment ii) EBITDA to grow by 10.4%
yoy to Rs 392mn while EBITDA margins at 7.1% (+155 bps
yoy) iii) APAT to grow by 13.6% yoy to Rs 188mn.
27.7%
Orient Refractories
Reco
Buy
EBITDA Margin (%)
18.1
20.6
Target Price (Rs)
183
PAT (Rs mn)
179
177
16.9% Revenues for ORL are likely to increase by 13.9% yoy on
back of robust growth in export market and increased
262
3%
2.7% volume in domestic steel market. However, higher raw
material prices are likely to dent the overall EBITDA margin
20.0 -180 bps -160 bps by 180bps. Domestic steel production has grew by 11% yoy
during the quarter. Net profit is expected to grow by 3% yoy
174
3.1%
1.3% due to lower operational profit.
% Upside
22%
EPS (Rs)
1.49
1.47
1.45
1.4%
Parag Milk Foods
CMP(Rs)
233
Net Sales (Rs mn)
4,141
4,283
3,835
8.0%
-3.3%
Mkt Cap (Rs bn)
20
EBITDA (Rs mn)
292
519
330
-11.4%
-43.6%
Reco
Hold
EBITDA Margin (%)
7.1
12.1
8.6 -154 bps -505 bps
Target Price (Rs)
222
PAT (Rs mn)
87
328
108
-19.2%
-73.4%
% Upside
-5%
EPS (Rs)
1.0
3.9
1.3
-19.2%
-73.4%
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
Expect revenue growth of 8%, aided by healthy skimmed
milk powder. However, we expect value added portfolio
growth to be muted impacted by higher competitive intensity
and destocking due to GST. Gross margins to decline by
250bps yoy impacted by mix and increase in procurement
cost while EBITDA margins decline to be curtail to 150 bps
aided by controlled other expenditure. Key highlights i) We
expect revenue to grow by 8% at Rs 4.1bn while EBITDA to
decline by 11.4% yoy to Rs 292mn impacted by lower gross
margins, EBITDA margins expected to be at 7.1% (-150bps
yoy) ii) APAT to decline by 19.2% yoy to Rs 87mn impacted
by higher tax outgo.
| Emkay Strategy | 11th July, 2017 | 124
©
Emkay
Others
Your success is our success
Name
Jun’17E
Mar’17
Jun’16
% Chg
YoY
% Chg
QoQ
3,459
3,772
2,931
18.0%
-8.3% Expect revenue growth of 18% aided by healthy traction
seen in ghee, cheese and specialty skimmed milk powder
-14.4% segment. Growth will also be aided by tax benefit of ~Rs
35mn during the quarter. Gross margins to decline by 10bps
-53 bps yoy impacted by increase in milk procurement cost and
EBITDA margins to decline by 20bps yoy to 7.4%. Key
n.a
highlights i) We expect revenue to grow by 18% at Rs 3.5bn
aided by mix change ii) EBITDA to grow by 15.4% yoy to Rs
n.a 255mn, iii) APAT to grow 55.8% yoy to Rs 53mn aided by
higher other income and lower interest outgo.
Comments
Prabhat Dairy
CMP(Rs)
133
Net Sales (Rs mn)
Mkt Cap (Rs bn)
13
EBITDA (Rs mn)
255
298
221
15.4%
Reco
Buy
EBITDA Margin (%)
7.4
7.9
7.5
-16 bps
Target Price (Rs)
145
PAT (Rs mn)
53
-18
34
55.8%
% Upside
9%
EPS (Rs)
0.5
-0.2
0.3
55.8%
CMP(Rs)
135
Net Sales (Rs mn)
4,003
3,930
4,304
-7.0%
Mkt Cap (Rs bn)
18
EBITDA (Rs mn)
477
469
571
-16.4%
Radico Khaitan
Reco
Buy
EBITDA Margin (%)
11.9
11.9
13.3 -134 bps
1.8% We expect RDCK's 4Q revenue to decline 7% YoY due to
highway ban. The EBITDA margins will decline 134bps to
1.8% 11.9% YoY. The net profit will decline 19% YoY to Rs178m.
We expect recovery 2QFY18 onwards.
0 bps
Target Price (Rs)
202
PAT (Rs mn)
178
166
220
-19.0%
7.2%
% Upside
49%
EPS (Rs)
1.3
1.3
1.7
-19.0%
7.2%
261
Net Sales (Rs mn)
1,090
985
943
15.5%
EBITDA (Rs mn)
195
153
186
4.9%
19.7 -182 bps
Sterling Tools
CMP(Rs)
Mkt Cap (Rs bn)
9
Reco
Hold
EBITDA Margin (%)
17.9
15.5
Target Price (Rs)
238
PAT (Rs mn)
100
76
94
7.0%
% Upside
-9%
EPS (Rs)
2.79
2.17
2.66
5%
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
10.6% We expect revenues to increase by 15.5% yoy led by growth
in overall automobile sector. We expect CV sales (due to
27.1% lower base), Tractor and PV sales to lead the growth.
EBITDA Margins are expected to decline by 182 bps yoy led
232 bps by increase in raw material prices. However, EBITDA is
expected to improve by 5% yoy led by higher revenue.
31.1% Lower interest cost and higher other income is likely to result
in PAT growth of 7% yoy.
29%
| Emkay Strategy | 11th July, 2017 | 125
©
Emkay
Others
Your success is our success
Name
Jun’17E
Mar’17
Jun’16
% Chg
YoY
% Chg
QoQ
Comments
Sterlite Technologies
CMP(Rs)
159
Net Sales (Rs mn)
6,758
7,005
6,034
12.0%
Mkt Cap (Rs bn)
64
EBITDA (Rs mn)
1,352
1,624
1,142
18.3%
-3.5% SOTL revenue should increase 12% YoY backed by higher
OF production and pick-up in NFS order book execution.
-16.8% EBITDA margin would also improve to 20% from 18.9% YoY
due to operational efficiency. Net profit growth will be 39%
-319 bps YoY.
Reco
Buy
EBITDA Margin (%)
20.0
23.2
18.9
107 bps
Target Price (Rs)
214
PAT (Rs mn)
524
692
378
38.7%
-24.3%
% Upside
35%
EPS (Rs)
1.3
1.7
1.0
36.8%
-24.6%
17,378
49,993
16,551
1,912
13,442
1,713
11.0
26.9
10.3
-2,391
8,903
-2,115
-0.5
1.8
-0.4
9.3%
-126.0%
1,846
1,841
1,526
21%
0% Symphony is expected to report 21% YoY growth in
revenues at Rs1.8bn. EBIDTAM is likely to decline by 6bps
-5% to 25.5%. APAT is expected to increase by 43% YoY to
Rs446mn.
-141 bps
Suzlon Energy
CMP(Rs)
19
Net Sales (Rs mn)
Mkt Cap (Rs bn)
96
EBITDA (Rs mn)
Reco
Target Price (Rs)
% Upside
Buy
26
EBITDA Margin (%)
PAT (Rs mn)
40%
EPS (Rs)
1,342
Net Sales (Rs mn)
-65.2% We expect SUELs' revenue to rise 5% YoY backed by
increase in sales volume. The company has large order
11.6%
-85.8% book for which the execution is on track. The EBITDA
margins will improve 65bps to 11% YoY. The company is
65 bps -1,589 bps expected to report loss of Rs2.4bn due to seasonality and
high fixed costs (1QFY17 loss was Rs2.1bn).
13.1% -126.9%
5.0%
Symphony
CMP(Rs)
Mkt Cap (Rs bn)
94
EBITDA (Rs mn)
471
495
390
21%
Reco
Sell
EBITDA Margin (%)
25.5
26.9
25.6
-6 bps
Target Price (Rs)
1,074
PAT (Rs mn)
446
467
311
43%
-4%
% Upside
-20%
EPS (Rs)
6.4
6.7
4.5
43%
-4%
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
| Emkay Strategy | 11th July, 2017 | 126
©
Emkay
Others
Your success is our success
Name
Jun’17E
Mar’17
Jun’16
% Chg
YoY
% Chg
QoQ
16,772
8,792
16,606
1.0%
4,025
1,372
4,847
-17.0%
24.0
15.6
29.2
-519 bps
1,908
67
2,647
-27.9% 2756.4%
10.5
0.4
19.8
-47.2% 2756.4%
Comments
Varun Beverages
CMP(Rs)
532
Net Sales (Rs mn)
Mkt Cap (Rs bn)
97
EBITDA (Rs mn)
Reco
Buy
EBITDA Margin (%)
Target Price (Rs)
674
PAT (Rs mn)
% Upside
27%
EPS (Rs)
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
90.8% We expect VBL's revenue to be flat due to unseasonal rains
in June. The 2QCY16 numbers are not available (listing in
193.3% 2HCY16). We expect company to report 90% of our full-year
forecast in 2Q.
839 bps
| Emkay Strategy | 11th July, 2017 | 127
©
Emkay
Valuations
Your success is our success
(Rs)
(Rs bn)
Reco
Target
Price
(Rs)
Price Mkt Cap
Com pany Nam e
Sales (Rs m n)
EBITDA (Rs m n)
PAT (Rs m n)
EV (Rs m n)
FY18e
FY19e
FY18e
FY19e
FY18e
FY19e
FY18e
EPS (Rs)
PE (x)
PB (x)
ROCE (%)
ROE (%)
FY19e FY18e FY19e FY18e FY19e FY18e FY19e FY18e FY19e FY18e FY19e
Agri Input & Chem icals
Bayer CropScience
4,629
164
Hold
4,625
36,855
44,226
5,842
7,594
4,249
5,450
152,479
150,183
120.2
154.2
38.5
30.0
7.0
5.9
29.8
32.7
19.4
21.4
Chambal Fertilisers
131
55
Buy
139
79,551
83,184
8,329
8,950
4,765
5,271
134,062
149,207
11.4
12.7
11.4
10.3
1.9
1.6
10.1
8.2
17.5
16.8
Coromandel International
410
120
Buy
418
110,308
119,805
10,753
12,212
5,697
6,770
136,413
134,456
19.6
23.2
21.0
17.6
3.8
3.4
19.6
22.0
18.9
20.3
DCM Shriram
361
59 Accumulate
406
66,826
69,566
9,072
9,284
5,738
5,972
68,484
63,571
35.2
36.6
10.3
9.9
2.0
1.7
21.7
20.4
20.9
18.8
Deepak Fertilisers
289
25
351
51,686
55,936
5,929
6,644
2,507
2,815
41,372
41,207
28.4
31.9
10.2
9.0
1.3
1.2
13.6
13.8
13.8
14.0
Dhanuka Agritech
816
41 Accumulate
900
10,369
12,187
2,018
2,498
1,458
1,775
39,243
38,632
29.7
36.2
27.5
22.6
6.1
5.2
32.1
33.2
24.9
25.0
GSFC
123
49
Buy
144
64,694
67,832
6,792
7,480
4,644
5,082
47,198
45,383
11.7
12.8
10.6
9.7
0.7
0.7
8.7
9.1
6.9
7.1
Insecticides India
663
14
Buy
737
12,732
14,804
1,413
1,748
723
952
15,042
14,989
35.0
46.0
18.9
14.4
2.6
2.3
16.2
18.8
14.6
16.9
PI Industries
802
110
Buy
1,076
25,497
29,225
6,147
7,204
4,839
5,484
109,736
108,835
35.2
39.9
22.8
20.1
5.5
4.5
30.9
29.8
26.8
24.8
Rallis India
244
47
Hold
246
20,623
23,497
3,288
3,717
2,123
2,392
45,306
44,893
10.9
12.3
22.3
19.8
3.7
3.3
23.0
23.3
17.9
17.6
Sharda Cropchem
481
43
Hold
533
16,285
18,668
3,583
4,200
2,261
2,672
41,965
42,128
25.1
29.6
19.2
16.2
3.8
3.2
28.7
29.1
21.6
21.6
Tata Chemicals
649
165
Hold
636
150,681
160,465
25,378
27,735
10,106
11,573
188,421
172,669
39.7
45.4
16.4
14.3
1.9
1.8
11.3
12.9
12.3
12.9
UPL
849
431 Accumulate
944
190,079
215,372
38,396
45,228
21,899
26,583
483,820
453,093
43.2
52.4
19.7
16.2
4.6
3.7
23.2
24.8
26.3
25.5
104
304
Hold
90
231,171
268,342
25,307
28,869
14,533
17,067
292,456
283,189
5.1
6.0
20.3
17.3
5.1
4.2
20.0
21.1
22.6
23.0
2,708
784
Hold
2,900
257,223
298,591
50,517
58,978
42,952
49,897
637,042
616,794
148.4
172.4
18.2
15.7
5.0
4.3
28.7
29.2
29.0
29.5
28,000
189,464
224,706
36,815
44,520
22,369
26,797
712,430
693,523
820.2
982.5
34.0
28.3
12.3
9.5
40.9
37.4
41.4
37.8
3,700
321,906
362,617
50,242
52,677
37,337
39,705
656,338
642,440
187.0
198.8
19.7
18.5
6.3
5.4
34.3
31.5
34.2
31.5
1,450
493,339
556,672
56,241
64,574
35,699
39,928
816,128
809,956
58.0
64.8
23.7
21.2
3.2
2.9
9.7
10.0
14.0
14.2
Buy
Autom obiles
Ashok Leyland
Bajaj Auto
Eicher Motors
27,852
758 Accumulate
Hero Motocorp
3,682
735
Mahindra & Mahindra
1,376
855 Accumulate
Maruti Suzuki India
7,433
2,245
Buy
7,100
797,291
937,895
118,427
142,791
80,493
97,404
1,952,068
1,875,436
266.5
322.4
27.9
23.1
5.8
4.9
23.0
22.3
23.0
22.2
Tata Motors
437
1,396
Buy
535
2,985,487
3,424,214
463,108
535,030
155,442
190,511
2,056,392
1,974,199
45.4
55.6
9.6
7.9
2.0
1.6
12.1
13.2
23.7
23.0
TVS Motor
573
272
Sell
370
141,229
164,747
12,410
16,465
7,329
10,230
274,515
273,186
15.4
21.5
37.2
26.6
9.6
7.7
23.9
28.7
28.3
32.0
Amara Raja Batteries
859
147 Accumulate
900
61,280
69,164
10,063
11,654
5,939
7,014
145,498
146,919
34.8
41.1
24.7
20.9
5.0
4.2
21.5
21.5
22.0
22.0
Apollo Tyres
259
132
Hold
230
153,150
169,759
20,682
23,890
10,608
11,828
164,528
163,354
20.8
23.2
12.4
11.1
1.6
1.5
9.8
10.2
14.0
13.9
Exide Industries
230
195
Buy
250
89,492
102,225
13,534
15,511
8,147
9,236
186,730
185,155
9.6
10.9
24.0
21.2
5.4
4.6
16.0
16.3
15.9
16.3
Motherson Sumi
311
655
Buy
390
589,220
677,600
60,753
75,175
21,325
27,132
497,751
496,006
15.2
19.3
20.5
16.1
5.3
3.8
22.7
24.3
34.8
35.7
Buy
Auto Ancillaries
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
| Emkay Strategy | 11th July, 2017 | 128
©
Emkay
Valuations
Your success is our success
(Rs)
(Rs bn)
Reco
Target
Price
(Rs)
289
405
672
771
64
29
107
33
Buy
Hold
Hold
Buy
Price Mkt Cap
Com pany Nam e
Building Materials
Century Plyboards
HSIL
Kajaria Ceramics
Somany Ceramics
Sales (Rs m n)
EBITDA (Rs m n)
PAT (Rs m n)
EV (Rs m n)
EPS (Rs)
PE (x)
PB (x)
ROCE (%)
ROE (%)
FY18e
FY19e
FY18e
FY19e
FY18e
FY19e
FY18e
FY19e FY18e FY19e FY18e FY19e FY18e FY19e FY18e FY19e FY18e FY19e
300
326
670
858
24,087
25,569
28,405
19,607
28,602
29,631
32,666
23,139
4,175
3,714
5,355
2,206
5,335
4,583
6,357
2,715
2,346
1,479
2,849
1,108
3,025
2,033
3,502
1,439
70,881
35,409
106,978
31,614
68,721
34,436
106,070
30,933
10.6
20.5
17.9
26.1
13.6
28.1
22.0
34.0
27.3
19.8
37.5
29.5
21.2
14.4
30.5
22.7
7.7
2.4
8.0
5.4
6.0
2.1
6.9
4.5
25.6
11.8
28.6
22.6
28.3
14.8
31.2
25.7
30.5
12.5
22.8
19.6
31.7
15.4
24.4
21.5
1,560
120,180
135,138
13,826
18,746
8,167
11,702
279,586
275,849
43.4
62.2
37.0
25.9
3.3
3.1
12.0
16.4
9.2
12.5
228
218,853
245,729
30,650
38,874
14,763
18,828
446,451
402,460
7.4
9.5
34.1
26.7
2.5
2.4
10.6
13.1
7.4
9.0
Cem ent
ACC
1,609
302
Hold
Ambuja Cements
253
503
Reduce
India Cements
204
63 Accumulate
222
60,024
66,180
9,538
11,416
2,875
4,432
88,270
84,253
9.3
14.4
21.8
14.1
1.7
1.5
10.7
13.5
8.0
11.4
JK Cement
970
68 Accumulate
1,185
45,896
54,870
8,013
10,865
3,061
5,028
90,336
85,361
43.8
71.9
22.2
13.5
3.4
2.8
13.8
19.2
16.0
22.6
Jk Lakshmi Cement
470
55
Reduce
427
35,587
39,812
4,929
6,490
1,642
3,060
70,336
67,026
14.0
26.0
33.7
18.1
3.6
3.1
11.4
15.9
11.2
18.3
Mangalam Cement
363
10
Hold
370
10,255
12,806
1,575
2,066
768
1,221
12,327
11,155
28.8
45.7
12.6
7.9
1.6
1.3
14.7
20.0
13.6
18.4
1,217
31,401
33,610
6,522
7,081
4,246
5,074
58,988
53,680
74.6
89.1
16.2
13.6
3.2
2.7
23.2
23.1
21.9
21.5
OCL India
1,211
69 Accumulate
Orient Cement
155
32
Sell
125
22,589
25,612
3,851
5,097
951
1,816
43,702
41,826
4.6
8.9
33.4
17.5
3.0
2.6
11.4
16.5
9.4
16.0
Prism Cement
123
62
Sell
91
58,407
63,951
3,783
4,897
685
1,614
77,565
75,820
1.4
3.2
90.4
38.3
5.8
5.0
11.8
16.1
6.6
14.0
Ramco Cements
706
168
Hold
670
42,908
47,796
11,846
13,275
7,137
8,415
177,586
172,889
30.0
35.3
23.5
20.0
3.9
3.4
17.4
19.2
18.0
18.2
Sanghi Industries
96
21
Buy
86
10,553
12,443
2,287
2,925
684
1,152
25,897
25,691
3.1
5.3
30.7
18.2
2.0
1.8
10.3
13.5
6.8
10.5
18,366
640
Hold
18,560
98,784
121,560
28,087
35,933
16,230
18,854
610,094
596,858
465.9
541.2
39.4
33.9
7.0
5.9
23.4
22.9
19.3
18.8
4,097
1,125
Hold
3,640
289,688
359,319
57,024
76,628
24,381
32,687
1,253,768
1,218,444
88.8
119.1
46.1
34.4
4.4
4.0
12.2
13.7
10.0
12.2
Ahluw alia Contracts
348
23
Hold
388
15,963
17,783
1,995
2,312
1,120
1,425
22,387
21,426
16.7
21.3
20.8
16.4
3.8
3.1
30.0
30.8
19.9
20.6
Ashoka Buildcon
190
36
Buy
301
33,627
38,001
10,805
12,086
443
627
77,974
78,635
2.4
3.3
80.3
56.7
2.0
2.0
13.7
15.2
2.5
3.6
1,184
289
Sell
1,069
59,435
67,715
14,398
16,892
9,872
11,439
265,361
264,446
40.5
46.9
29.2
25.2
3.1
2.8
14.5
15.7
10.8
11.7
IRB Infrastructure
215
75
Buy
283
56,607
62,227
26,444
31,129
8,694
9,907
205,122
215,133
24.7
28.2
8.7
7.6
1.2
1.1
11.6
12.6
14.5
14.8
ITD Cementation
177
28
Buy
203
33,133
37,371
2,949
3,507
1,132
1,620
29,174
29,275
7.3
10.4
24.3
17.0
4.2
3.4
27.0
29.1
18.7
22.0
J Kumar
302
23
Buy
410
18,687
23,359
3,321
4,077
1,330
1,724
26,227
26,766
17.6
22.8
17.2
13.3
1.5
1.4
13.9
15.9
9.3
11.0
KNR Construction
211
30
Buy
240
16,691
18,429
2,440
2,720
1,731
1,773
29,417
28,684
12.3
12.6
17.1
16.7
2.8
2.4
19.2
18.7
17.7
15.4
89
50
Buy
120
79,951
81,481
6,998
7,169
2,119
2,348
60,965
59,365
3.8
4.2
23.4
21.1
1.3
1.2
12.8
12.3
5.7
6.0
PNC Infratech
148
38
Buy
165
21,114
27,448
2,745
3,568
1,634
1,964
41,379
42,573
6.4
7.7
23.3
19.4
2.4
2.2
12.0
13.9
10.5
11.7
Sadbhav Engineering
300
51
Buy
330
30,133
37,920
3,384
4,258
1,421
1,977
59,871
60,747
8.3
11.5
36.2
26.0
3.0
2.7
8.6
11.4
8.4
10.8
Simplex Infrastructure
537
27
Hold
525
63,028
68,430
7,374
8,075
1,312
1,663
58,438
58,024
26.4
33.5
20.3
16.0
1.5
1.4
12.0
12.5
7.7
9.0
Shree Cements
Ultratech Cement
Construction & Infrastructure
Container Corporation
NCC
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
| Emkay Strategy | 11th July, 2017 | 129
©
Emkay
Valuations
Your success is our success
(Rs)
(Rs bn)
Reco
Target
Price
(Rs)
1,115
1,070
Hold
245
238
Hold
Britannia Industries
3,692
443
Hold
Colgate-Palmolive
1,089
296 Accumulate
Price Mkt Cap
Com pany Nam e
Sales (Rs m n)
EBITDA (Rs m n)
PAT (Rs m n)
EV (Rs m n)
EPS (Rs)
PE (x)
PB (x)
ROCE (%)
ROE (%)
FY18e
FY19e
FY18e
FY19e
FY18e
FY19e
FY18e
FY19e FY18e FY19e FY18e FY19e FY18e FY19e FY18e FY19e FY18e FY19e
1,162
186,084
219,364
36,976
44,071
23,296
27,448
1,046,829
1,049,258
24.3
28.6
45.9
39.0
12.1
11.0
38.1
40.5
28.5
29.6
245
55,781
67,175
8,936
10,954
5,516
6,802
233,815
234,415
5.7
7.0
43.2
35.0
10.5
10.2
32.6
37.1
26.5
29.6
3,300
101,555
116,824
14,453
17,523
9,943
11,995
425,652
420,228
82.9
100.0
44.6
36.9
13.1
10.6
46.5
45.4
32.7
31.8
1,000
44,651
50,237
10,664
12,897
6,462
7,817
288,436
285,108
23.8
28.7
45.8
37.9
18.9
15.4
66.2
65.3
45.5
44.8
Consum ers
Asian Paints
Berger Paints
Dabur
302
532
Hold
280
82,916
93,797
16,204
18,738
13,449
15,782
520,186
517,247
7.6
9.0
39.5
33.7
9.2
8.8
27.4
29.7
25.4
26.8
Emami
1,051
239
Buy
1,200
29,059
33,950
8,647
10,203
6,945
8,299
232,979
226,807
30.6
36.6
34.4
28.7
10.6
8.3
36.3
36.6
34.6
32.4
Glaxosmithkline Consumer
5,489
231 Accumulate
5,550
41,735
46,506
9,336
10,535
7,378
8,325
197,417
193,745
175.4
198.0
31.3
27.7
6.6
5.9
36.7
36.7
22.3
22.5
930
104,929
119,887
22,184
25,742
15,597
18,615
682,417
659,352
22.9
27.3
42.4
35.5
10.6
7.3
23.8
23.6
27.5
24.3
1,100
349,414
394,899
71,365
84,631
50,615
60,192
2,305,187
2,295,730
23.4
27.9
46.8
39.4
35.7
34.8
114.1
132.3
77.1
89.4
Godrej Consumer Products
971
661
Hold
Hindustan Unilever
1,098
Jubilant FoodWorks
1,093
72
Hold
880
27,902
31,444
3,279
4,283
1,304
1,937
71,034
69,533
19.8
29.4
55.3
37.2
7.6
6.5
18.6
24.4
14.4
18.8
Marico
320
413
Hold
300
68,883
77,429
13,031
15,068
9,805
11,560
410,041
407,828
7.6
9.0
42.1
35.7
15.9
13.9
49.0
52.0
39.9
41.4
Nestle
6,870
662
Hold
6,200
103,855
117,487
20,455
23,175
13,079
15,386
632,294
622,235
135.6
159.6
50.6
43.1
19.7
17.6
58.1
61.8
41.0
43.2
812
416
Reduce
690
64,177
74,258
14,231
16,619
9,602
11,111
414,820
409,608
18.7
21.7
43.4
37.5
10.2
8.7
34.3
34.3
25.4
25.1
18.1
Pidilite Industries
2,376 Accumulate
Engineering & Capital Goods
ABB
1,458
309
Hold
1,533
106,831
124,150
10,492
12,975
5,599
7,212
302,840
300,723
26.4
34.0
55.2
42.8
8.3
7.3
23.4
26.3
16.0
BHEL
135
330
Sell
106
332,630
331,615
28,391
30,941
18,920
21,383
232,268
223,892
7.7
8.7
17.5
15.5
1.0
0.9
9.7
10.5
5.7
6.2
Blue Star
603
58
Reduce
561
53,042
64,269
3,203
4,566
1,577
2,456
59,315
59,115
16.5
25.7
36.5
23.5
7.0
5.9
27.7
37.5
19.9
27.2
1,011
54,476
62,352
8,039
9,000
6,892
7,587
246,106
247,637
24.9
27.4
36.6
33.2
7.2
7.0
23.6
25.1
20.1
21.3
3,396
16,285
18,451
1,802
2,277
410
739
20,197
19,597
64.6
116.6
37.6
20.8
5.5
4.4
13.6
17.6
15.7
23.3
Cummins India
Dynamatic Technologies
909
2,431
252 Accumulate
15
Buy
GE T&D India
334
85 Accumulate
372
45,226
52,917
3,426
4,798
1,633
2,690
87,750
87,322
6.4
10.5
52.3
31.8
7.5
6.3
22.6
31.5
15.0
21.6
Kalpataru Pow er
338
52
Buy
426
58,710
65,836
6,396
7,245
3,150
3,669
55,581
54,785
20.5
23.9
16.5
14.1
1.9
1.7
18.6
19.8
12.1
12.6
KEC International
267
69
Buy
300
98,505
115,481
9,520
11,318
3,469
4,804
87,594
87,553
13.5
18.7
19.8
14.3
3.6
3.0
21.0
23.3
20.0
22.9
1,351
481
Hold
1,533
127,450
160,724
12,554
18,106
7,928
11,398
445,739
444,946
22.3
32.0
60.7
42.2
6.9
6.4
19.0
25.4
11.7
15.7
TD Pow er Systems
240
8
Hold
228
4,747
6,000
443
745
184
379
6,612
6,392
5.5
11.4
43.3
21.0
1.7
1.6
6.4
12.0
3.9
7.9
Techno Electric
384
44
Buy
444
15,664
19,173
3,155
3,754
2,175
2,754
42,890
40,659
19.3
24.4
19.9
15.7
3.5
3.0
20.5
23.3
18.7
20.5
Thermax
917
109
Sell
795
48,639
54,410
5,097
5,910
2,989
3,579
84,241
81,946
26.5
31.8
34.6
28.9
3.8
3.4
17.5
18.5
11.3
12.4
Triveni Turbine
151
50
Hold
138
8,562
9,595
2,003
2,173
1,378
1,492
48,099
47,444
4.2
4.5
36.2
33.4
10.3
8.8
44.3
40.5
31.1
28.5
Voltas
467
534
68,580
80,824
7,448
9,264
5,607
7,056
147,905
144,048
17.0
21.3
27.5
21.9
4.2
3.7
22.8
25.3
16.0
17.9
Siemens
154 Accumulate
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
| Emkay Strategy | 11th July, 2017 | 130
©
Emkay
Valuations
Your success is our success
(Rs)
(Rs bn)
Reco
Target
Price
(Rs)
1,299
52
Hold
Price Mkt Cap
Com pany Nam e
Sales (Rs m n)
EBITDA (Rs m n)
PAT (Rs m n)
EV (Rs m n)
EPS (Rs)
PE (x)
PB (x)
ROCE (%)
ROE (%)
FY18e
FY19e
FY18e
FY19e
FY18e
FY19e
FY18e
FY19e FY18e FY19e FY18e FY19e FY18e FY19e FY18e FY19e FY18e FY19e
IT Services
eClerx Services
1,260
13,703
15,245
4,864
5,311
3,457
3,759
44,986
44,167
86.3
93.8
15.1
13.8
4.7
4.1
44.3
42.3
33.4
31.9
35
24 Accumulate
48
38,172
42,141
4,845
5,476
3,123
3,731
26,293
23,605
4.6
5.5
7.7
6.4
1.0
0.9
13.2
14.7
14.3
14.8
HCL Tech
832
1,187 Accumulate
920
525,135
580,374
113,535
127,203
88,074
100,430
1,027,899
987,729
62.3
71.0
13.4
11.7
3.1
2.7
30.6
30.9
24.6
24.7
Hexaw are Technologies
238
72 Accumulate
240
39,686
44,761
6,424
7,686
4,632
5,565
62,372
59,405
15.6
18.8
15.2
12.7
3.6
3.0
34.8
34.8
25.6
25.6
Infosys
935
2,149 Accumulate
1,000
736,089
812,524
196,706
215,807
147,530
162,178
1,735,119
1,735,721
64.6
70.9
14.5
13.2
3.0
3.0
30.0
32.4
21.1
22.9
L&T Infotech
796
136 Accumulate
850
73,570
81,828
14,766
16,706
10,525
11,918
127,063
121,440
60.3
68.3
13.2
11.6
4.3
3.5
43.4
40.7
35.7
33.1
Mindtree
539
91
Hold
555
57,720
66,232
8,586
10,601
5,261
6,965
77,610
70,625
31.2
41.3
17.3
13.0
2.9
2.3
24.2
25.9
18.3
19.6
Mphasis
597
126
Hold
605
64,499
70,710
10,498
11,516
7,880
8,741
88,932
87,686
40.8
45.2
14.6
13.2
1.8
1.7
17.7
18.6
12.6
13.2
MPS
598
11 Accumulate
740
3,198
3,646
1,132
1,352
796
976
8,059
7,111
42.7
52.4
14.0
11.4
2.6
2.1
30.3
30.3
20.6
20.5
NIIT
87
15
Buy
110
11,674
13,066
1,097
1,318
1,050
1,275
14,405
14,116
6.4
7.7
13.7
11.3
1.5
1.4
6.0
7.1
11.7
12.9
NIIT Tech
557
34
Reduce
540
30,081
33,453
5,101
5,620
2,952
3,333
27,149
24,772
47.8
53.9
11.7
10.3
1.8
1.7
23.3
23.2
16.6
16.9
Persistent Systems
668
53
Hold
620
32,341
36,931
5,314
6,255
3,351
3,844
42,294
40,223
42.1
48.2
15.9
13.8
2.5
2.3
21.3
23.5
15.1
17.2
2,332
4,595
Hold
2,370
1,269,032
1,416,571
350,686
383,177
271,700
291,805
4,040,135
3,956,517
137.8
148.0
16.9
15.8
4.5
3.9
38.4
35.7
28.5
26.5
470
323,205
354,402
45,501
53,624
30,669
35,462
287,031
267,529
34.5
39.9
11.0
9.5
1.8
1.6
20.3
21.0
17.5
17.9
Reduce
240
569,320
603,527
93,739
104,010
85,939
93,440
994,821
938,437
17.7
19.3
14.5
13.4
2.2
2.0
16.3
16.6
15.8
15.6
Firstsource Solutions
TCS
Tech Mahindra
380
371 Accumulate
Wipro
258
1,254
DB Corp
383
70
Hold
403
24,524
26,804
7,289
8,023
4,291
4,806
65,784
64,471
23.4
26.2
16.4
14.6
3.9
3.6
34.5
35.6
25.1
25.6
Dish TV
79
84
Hold
90
31,165
34,342
9,916
11,390
864
2,041
94,667
90,288
0.8
1.9
97.4
41.2
14.6
10.8
30.4
47.7
16.2
30.1
Media & Entertainm ent
Entertainment Netw ork
958
46 Accumulate
860
6,485
7,866
1,577
2,245
746
1,363
44,408
42,503
15.7
28.6
61.2
33.5
5.1
4.5
11.3
18.5
8.7
14.3
HMVL
276
20
Buy
355
10,400
11,514
2,495
2,828
2,199
2,570
21,376
20,829
30.0
35.0
9.2
7.9
1.6
1.3
23.9
23.8
18.5
18.1
82
19
Hold
90
26,399
28,805
3,714
4,233
1,782
2,214
24,298
23,496
7.7
9.5
10.6
8.6
0.8
0.7
11.5
13.1
7.8
8.9
276
27
Hold
326
14,317
16,070
1,996
2,899
475
1,132
29,319
28,977
4.9
11.8
55.7
23.4
3.8
3.3
10.8
17.6
7.0
14.9
179
58 Accumulate
HT Media
Inox Leisure
Jagran Prakashan
200
24,968
27,202
7,012
7,671
3,931
4,347
57,676
54,839
12.0
13.3
14.9
13.4
2.9
2.6
26.7
28.3
20.3
20.4
1,419
66
Hold
1,598
25,593
28,437
4,410
5,709
1,491
2,284
72,393
71,201
31.9
48.9
44.4
29.0
6.0
5.1
16.6
21.6
14.5
19.0
Sun TV Netw ork
828
326
Buy
1,051
31,195
35,107
20,337
23,696
11,060
13,051
310,151
306,084
28.1
33.1
29.5
25.0
7.6
7.0
39.1
42.7
26.8
29.2
Zee Entertainment
507
487 Accumulate
580
66,031
75,143
22,469
26,653
14,335
17,683
457,637
445,237
14.9
18.4
34.0
27.6
6.2
5.2
26.8
29.1
19.8
20.6
PVR
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
| Emkay Strategy | 11th July, 2017 | 131
©
Emkay
Valuations
Your success is our success
(Rs)
(Rs bn)
Reco
Target
Price
(Rs)
Coal India
251
1,559
Hold
279
Hindalco
195
437
Buy
240
Hindustan Zinc
267
1,129
Hold
293
JSW Steel
216
522
Hold
MOIL
321
43
68
Price Mkt Cap
Com pany Nam e
Sales (Rs m n)
FY18e
EBITDA (Rs m n)
PAT (Rs m n)
EV (Rs m n)
EPS (Rs)
PE (x)
PB (x)
ROCE (%)
ROE (%)
FY19e
FY18e
FY19e
FY18e
FY19e
FY18e
848,440
923,748
135,275
161,563
98,451
111,181
1,276,960
1,357,510
15.9
17.9
15.8
14.0
6.2
7.3
62.2
82.0
36.6
47.8
1,099,475
1,138,064
136,165
145,381
45,297
45,366
846,071
940,328
21.9
22.0
8.9
8.9
1.0
0.9
10.1
10.6
10.3
10.3
237,351
254,610
122,780
131,545
106,811
112,768
965,567
890,597
25.3
26.7
10.6
10.0
3.0
2.5
33.3
29.8
30.8
27.0
218
684,615
727,644
133,495
157,552
35,957
46,813
945,222
938,578
15.0
19.5
14.4
11.1
1.8
1.6
13.1
14.3
13.4
15.3
Buy
425
13,069
14,714
5,118
6,034
4,556
5,133
18,464
15,843
34.2
38.5
9.4
8.3
1.4
1.3
23.6
23.8
15.9
16.0
131
Reduce
60
84,400
88,133
11,264
12,512
9,290
10,325
93,867
93,356
4.8
5.3
14.1
12.6
1.2
1.2
10.9
11.8
8.7
9.3
116
367
Sell
102
96,991
102,191
45,509
48,423
36,003
37,970
327,954
326,895
11.4
12.0
10.2
9.7
1.1
1.1
15.9
15.9
11.3
11.2
FY19e FY18e FY19e FY18e FY19e FY18e FY19e FY18e FY19e FY18e FY19e
Metals & Mining
National Aluminium Co
NMDC
SAIL
62
255
Sell
49
620,902
669,925
51,524
76,761
4,768
24,769
611,790
606,819
1.2
6.0
53.4
10.3
0.7
0.7
4.4
7.4
1.3
6.6
Tata Steel
553
537
Hold
453
1,257,381
1,317,684
175,361
195,125
35,653
53,354
1,368,922
1,367,892
36.7
54.9
15.1
10.1
1.4
1.3
8.2
9.2
9.6
13.2
Vedanta
257
956
Buy
294
912,704
1,003,750
270,876
300,752
97,141
111,381
1,489,231
1,423,197
32.8
37.6
7.8
6.8
1.4
1.2
16.0
15.9
19.4
19.4
BPCL
664
960 Accumulate
772
1,577,974
1,609,533
144,608
154,661
78,955
85,938
1,043,777
1,040,582
54.6
59.4
12.2
11.2
3.0
2.7
25.2
25.2
25.3
25.2
GAIL
359
607
458
688,631
749,230
84,467
98,523
47,895
54,992
574,963
591,402
28.3
32.5
12.7
11.0
1.6
1.4
17.3
18.6
13.2
13.7
Gujarat Gas
756
104 Accumulate
845
57,517
65,750
10,655
12,552
4,236
5,404
120,810
119,425
30.8
39.2
24.6
19.3
3.9
3.4
16.6
18.7
17.0
18.8
Gujarat State Petronet
172
97
Buy
193
12,715
14,269
11,194
12,638
6,296
7,410
82,641
76,605
11.2
13.2
15.4
13.1
2.0
1.7
17.9
19.3
13.4
14.0
HPCL
501
509
Buy
629
1,630,412
2,173,883
114,656
114,281
57,476
55,837
581,817
550,507
56.5
54.9
8.9
9.1
2.4
2.2
21.3
19.2
28.1
25.3
Indian Oil
382
1,856
Buy
496
3,886,724
5,879,740
399,184
415,942
209,910
217,154
1,969,185
1,877,291
43.2
44.7
8.8
8.5
1.8
1.5
21.9
20.5
21.6
19.0
1,072
150
Buy
1,027
44,080
48,237
10,608
11,530
6,411
7,203
136,236
130,530
45.8
51.5
23.4
20.8
4.8
4.1
31.3
30.2
22.1
21.2
Petronet LNG
218
326
Buy
517
344,447
411,491
32,705
36,736
19,922
22,799
140,838
119,922
26.6
30.4
8.2
7.2
1.7
1.4
28.0
27.5
23.4
21.9
Oil India
264
199
Buy
304
108,843
110,471
40,266
38,684
25,543
24,294
127,758
142,605
31.9
30.3
8.3
8.7
0.9
0.9
12.4
11.6
11.0
10.2
ONGC
160
2,048
Buy
220
831,546
853,621
373,107
384,894
216,302
222,129
1,700,911
1,731,222
16.9
17.3
9.5
9.2
1.2
1.1
17.4
16.9
12.8
12.3
1,491
4,849
Buy
1,517
3,789,825
4,103,912
523,462
606,254
333,656
393,234
4,029,328
3,677,170
103.0
121.4
14.5
12.3
1.6
1.5
12.6
13.5
11.8
12.5
Oil & Gas
Indraprastha Gas
Reliance Industries
Buy
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
| Emkay Strategy | 11th July, 2017 | 132
©
Emkay
Valuations
Your success is our success
Price Mkt Cap
Com pany Nam e
Target
Price
(Rs)
Sales (Rs m n)
EBITDA (Rs m n)
PAT (Rs m n)
EV (Rs m n)
EPS (Rs)
PE (x)
PB (x)
ROCE (%)
ROE (%)
FY18e
FY19e
FY18e
FY19e
FY18e
FY19e
FY18e
700
174,141
184,948
38,765
41,875
25,240
27,303
428,967
413,467
43.1
46.7
16.2
14.9
3.6
2.9
26.7
25.5
24.6
21.5
353
117,256
135,772
26,791
31,940
16,569
20,078
560,972
558,831
16.2
19.6
31.8
26.3
7.0
5.9
20.0
20.9
23.9
24.3
440 Accumulate
525
162,414
183,833
29,232
37,388
16,223
23,369
475,013
445,221
20.2
29.1
27.1
18.8
3.2
2.8
11.5
15.0
12.2
15.7
680
181
Hold
630
42,726
47,015
12,998
13,498
9,559
9,772
170,832
170,437
36.0
36.8
18.9
18.5
3.2
2.9
22.5
20.7
18.1
16.6
2,705
448
Hold
2,650
157,316
180,555
34,235
41,037
18,120
21,995
470,854
462,208
109.3
132.7
24.8
20.4
3.3
3.0
14.0
16.5
14.0
15.4
Glenmark Pharma
665
188
Reduce
680
96,074
106,089
19,755
20,286
10,637
10,661
212,518
211,997
37.7
37.8
17.6
17.6
2.9
2.6
16.3
14.9
18.1
15.5
Granules India
141
32
Buy
152
18,418
22,334
3,891
4,946
2,027
2,666
38,599
37,071
8.9
11.7
15.9
12.1
3.0
2.6
18.0
20.3
20.3
23.0
Ipca Lab
468
59
Hold
480
34,491
38,923
5,274
6,561
2,532
3,352
62,614
62,315
20.1
26.6
23.3
17.6
2.2
2.0
11.0
13.1
9.9
11.9
1,117
505
Hold
1,292
187,837
216,460
44,997
54,028
26,915
32,348
568,041
546,654
59.7
71.8
18.7
15.6
3.2
2.7
16.5
17.3
18.4
18.7
549
1,317
500
297,295
315,615
72,753
79,467
50,928
54,430
1,179,121
1,130,209
21.2
22.6
25.9
24.3
3.1
2.8
12.0
11.9
12.8
12.2
1,298
220
1,000
65,515
72,446
12,561
15,887
7,053
9,781
218,562
219,673
41.7
57.8
31.2
22.5
4.6
4.0
15.3
17.8
15.6
19.2
355
97,029
108,234
63,995
72,144
34,865
39,504
977,993
967,053
16.8
19.1
22.1
19.5
3.8
3.2
15.3
15.6
18.3
17.8
150
7,674
8,725
4,731
5,507
2,581
3,104
69,519
68,422
5.3
6.4
28.4
23.6
3.9
3.8
18.3
21.7
13.7
16.1
(Rs)
(Rs bn)
Aurobindo Pharma
697
408
Buy
Cadila Healthcare
515
527
Hold
Cipla
547
Divi's Lab
Reco
FY19e FY18e FY19e FY18e FY19e FY18e FY19e FY18e FY19e FY18e FY19e
Pharm aceuticals
Dr. Reddy's Lab
Lupin
Sun Pharma
Torrent Pharma
Reduce
Sell
Ports
Adani Ports
372
Gujarat Pipavav
151
770 Accumulate
73
Hold
Pow er
CESC
872
894
83,110
87,180
19,988
20,454
10,610
10,763
141,241
131,408
79.6
80.8
10.9
10.8
1.2
1.1
8.3
8.1
11.8
11.0
Gujarat Industries Pow er
129
20
Buy
132
14,260
16,639
5,679
7,801
3,438
4,040
26,252
22,014
22.7
26.7
5.7
4.8
0.8
0.7
15.7
16.7
14.4
14.9
JSW Energy
64
105
Hold
64
91,226
96,088
35,680
37,182
8,449
8,863
247,937
230,802
5.2
5.4
12.5
11.9
1.1
1.0
10.8
11.2
8.8
8.5
NHPC
32
352
Hold
30
84,849
99,700
49,197
57,718
29,954
29,846
493,647
506,085
2.9
2.9
10.9
10.9
1.3
1.2
9.1
8.9
12.2
11.4
NTPC
159
1,311
Buy
179
826,014
910,759
241,770
282,743
115,870
134,426
2,161,243
2,240,076
14.1
16.3
11.3
9.8
1.3
1.2
9.1
9.6
11.7
12.4
Pow er Grid Corporation
209
1,096
Buy
242
288,797
322,014
257,045
286,705
95,902
110,378
2,271,436
2,354,769
18.3
21.1
11.4
9.9
1.9
1.7
10.3
10.6
17.8
18.2
7
20
Buy
15
63,152
63,246
30,927
30,006
9,897
10,297
126,480
107,497
3.4
3.5
2.0
2.0
0.3
0.3
12.6
12.2
18.0
15.8
Reliance Pow er
43
120
Buy
59
140,001
153,658
67,905
66,949
16,255
18,429
498,767
455,813
5.8
6.6
7.4
6.5
0.5
0.4
7.0
7.1
6.6
7.0
SJVN
32
133
Buy
29
25,804
26,005
21,492
21,660
14,480
14,942
117,599
116,186
3.5
3.6
9.2
8.9
1.0
1.0
11.9
11.4
11.7
11.2
Tata Pow er
82
221
Hold
81
454,503
477,429
86,275
88,577
27,875
30,081
605,458
583,162
10.3
11.1
7.9
7.3
1.3
1.2
12.4
12.7
17.3
17.1
RattanIndia Pow er
116 Accumulate
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
| Emkay Strategy | 11th July, 2017 | 133
©
Emkay
Valuations
Your success is our success
(Rs)
(Rs bn)
Reco
Target
Price
(Rs)
261
202
174
382
466
282
397
35
361
13
130
71
106
38
Buy
Hold
Buy
Hold
Buy
Buy
Hold
Price Mkt Cap
Com pany Nam e
Real Estate
Brigade Enterprises
DLF
Kolte-Patil Developers
Oberoi Realty
Phoenix Mills
Prestige Estates
Sobha
Sales (Rs m n)
EBITDA (Rs m n)
PAT (Rs m n)
EV (Rs m n)
EPS (Rs)
PE (x)
FY18e
FY19e
FY18e
FY19e
FY18e
FY19e
FY18e
301
187
219
400
483
280
401
20,815
94,096
8,386
26,233
22,231
46,202
27,378
22,405
75,914
10,870
30,699
23,536
46,643
29,061
6,331
41,074
2,270
14,535
10,760
9,675
5,699
6,325
39,169
3,012
13,635
11,502
10,313
6,763
1,710
7,214
756
12,330
2,256
3,638
1,884
1,741
7,523
1,155
14,173
2,752
3,537
2,522
51,995
650,796
17,438
130,491
105,054
160,550
62,318
52,875
659,030
16,780
128,017
104,309
162,165
60,727
12.6
4.1
10.0
36.3
14.7
9.7
19.6
12.9
4.2
15.2
41.8
18.0
9.4
26.2
PB (x)
ROCE (%)
ROE (%)
FY19e FY18e FY19e FY18e FY19e FY18e FY19e FY18e FY19e FY18e FY19e
20.7
49.9
17.4
10.5
31.6
29.1
20.3
20.3
47.8
11.4
9.2
25.9
29.9
15.2
1.6
1.2
1.3
1.9
3.2
2.3
1.4
1.5
1.2
1.2
1.6
2.8
2.3
1.3
12.8
7.2
12.5
20.6
13.8
7.7
9.4
11.1
6.8
16.4
16.6
14.6
7.4
11.0
8.9
2.4
7.7
19.8
10.5
8.2
6.9
7.6
2.5
10.9
19.1
11.5
7.8
8.7
Retail
Arvind
370
96 Accumulate
425
101,513
117,186
10,560
13,478
4,099
6,236
124,898
124,794
15.9
24.1
23.3
15.3
2.6
2.3
12.8
16.3
11.8
16.0
ABFRL
176
136 Accumulate
190
76,998
90,192
5,559
7,365
1,228
2,822
154,511
152,055
1.6
3.7
110.2
48.0
12.5
9.9
10.2
14.6
12.0
23.1
Future Lifestyle
303
58
Buy
331
45,407
53,536
4,637
5,717
1,051
1,755
63,182
61,657
5.5
9.2
54.9
32.9
2.9
2.6
10.0
13.1
5.3
8.4
Monte Carlo Fashions
547
12
Buy
550
6,724
7,576
1,094
1,349
621
797
11,280
10,892
28.6
36.7
19.1
14.9
2.2
2.0
18.9
22.2
12.2
14.3
Page Industries
16,892
188
Hold
16,502
25,214
30,588
5,208
6,397
3,269
4,009
188,181
187,705
293.1
359.4
57.6
47.0
22.5
18.0
59.3
58.8
43.5
42.6
PC Jew eller
250
89
Buy
260
95,942
113,183
9,603
11,391
5,621
6,979
93,972
94,443
14.3
17.7
17.5
14.1
2.4
2.1
23.2
24.1
15.2
16.2
Shoppers Stop
348
29
Hold
360
38,684
43,290
2,203
2,691
421
735
34,785
32,668
5.0
8.8
69.1
39.6
3.7
3.4
9.3
12.7
5.4
8.9
Titan Company
533
473
Hold
488
147,674
171,274
14,730
17,923
10,096
12,399
468,142
464,298
11.4
14.0
46.8
38.1
9.6
8.3
31.6
33.4
22.0
23.4
Bharti Airtel
386
1,543
Reduce
306
968,507
1,037,085
346,473
366,228
29,810
36,365
2,629,748
2,557,246
7.5
9.1
51.7
42.4
1.9
1.8
6.8
7.3
3.7
4.3
Bharti Infratel
404
748
Hold
348
144,038
152,820
62,797
67,036
29,131
31,728
737,237
724,715
15.4
16.8
26.2
24.1
5.3
5.2
28.0
30.2
20.2
21.9
83
301
Reduce
70
337,349
365,065
85,173
93,137
-31,626
-38,999
793,089
788,426
-8.8
-10.8
-9.5
-7.7
1.4
1.6
-0.3
-0.2
-13.3
-19.3
669
191
Hold
705
194,158
210,027
30,912
35,327
4,082
5,450
277,260
264,230
14.3
19.1
46.7
35.0
-17.6
-27.6
11.9
16.2
-33.8
-61.6
Telecom m unications
Idea Cellular
Tata Communications
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
| Emkay Strategy | 11th July, 2017 | 134
©
Emkay
Valuations
Your success is our success
Price Mkt Cap
Com pany Nam e
Target
Price
(Rs)
Sales (Rs m n)
PAT (Rs m n)
EV (Rs m n)
EPS (Rs)
PE (x)
PB (x)
ROCE (%)
ROE (%)
FY19e
FY18e
FY19e
FY18e
FY19e
FY18e
FY19e FY18e FY19e FY18e FY19e FY18e FY19e FY18e FY19e FY18e FY19e
4,076
5,095
1,914
2,470
1,239
1,604
39,257
38,279
11.1
14.4
31.6
24.5
7.1
5.7
30.5
32.9
24.6
25.8
52,747
60,088
4,407
5,096
1,912
2,425
29,785
29,837
50.0
63.4
16.0
12.6
2.6
2.2
32.1
32.8
17.1
18.8
5,111
6,388
533
871
342
566
9,142
8,793
16.5
27.4
26.1
15.8
3.9
3.3
19.7
27.7
15.7
22.5
402
44,995
50,716
2,765
3,463
1,405
1,898
39,731
39,081
13.9
18.7
23.7
17.5
3.5
3.0
17.0
20.1
15.4
18.3
Buy
192
6,301
7,419
2,235
2,804
1,342
1,752
41,207
41,558
5.0
6.6
33.4
25.6
2.8
2.5
15.2
15.2
10.7
10.4
38
Hold
254
26,898
30,683
5,156
6,070
2,408
3,046
43,544
41,824
15.3
19.4
15.7
12.4
3.1
2.7
21.9
24.5
21.4
23.1
240
24
Buy
380
29,224
31,124
8,044
8,566
3,878
4,354
33,311
31,842
38.8
43.5
6.2
5.5
1.5
1.2
25.5
25.1
27.0
24.5
1,251
584
Hold
1,084
432,475
516,155
83,438
107,467
29,750
38,250
748,979
744,150
63.7
81.9
19.6
15.3
1.9
1.7
11.5
13.0
9.9
11.6
469
293
Hold
440
89,228
105,771
10,898
13,191
7,322
9,105
283,600
276,575
11.7
14.6
40.0
32.1
7.9
6.9
26.7
29.1
21.0
22.9
(Rs)
(Rs bn)
Reco
Advanced Enzyme Tech
351
39
Buy
421
Apar Industries
801
31
Buy
1,077
Apcotex Industries
432
9
Buy
547
Bajaj Electricals
329
33
Buy
Delta Corp
168
45
Essel Propack
241
GHCL
FY18e
EBITDA (Rs m n)
Others
Grasim Industries
Havells India
Heritage Foods
1,075
25 Accumulate
1,160
22,251
25,224
1,834
2,251
932
1,214
22,983
22,472
40.2
52.3
26.8
20.5
3.7
3.2
23.7
22.1
18.9
16.5
Navin Fluorine
3,028
30 Accumulate
3,240
9,047
10,494
1,910
2,268
1,311
1,564
29,420
28,399
133.9
159.8
22.6
18.9
3.4
3.0
20.4
21.6
16.1
16.9
Orient Refractories
150
18
Buy
183
5,973
7,400
1,147
1,466
785
941
16,779
16,575
6.5
7.8
23.0
19.2
5.5
4.5
39.4
39.5
26.1
26.0
Parag Milk Foods
233
20
Hold
222
19,728
22,705
1,690
2,166
714
1,029
20,595
20,216
8.5
12.2
27.4
19.0
2.7
2.4
13.9
17.3
10.3
13.2
Prabhat Dairy
133
13
Buy
145
16,678
20,312
1,656
2,113
619
944
14,444
14,216
6.3
9.7
20.9
13.7
1.8
1.6
11.6
15.3
8.8
12.0
Radico Khaitan
135
18
Buy
202
19,220
20,313
2,282
2,514
931
1,140
25,071
24,127
7.0
8.6
19.3
15.8
1.6
1.5
10.9
12.0
8.7
9.8
Sterling Tools
261
9
Hold
238
4,263
5,030
714
843
364
441
9,733
9,682
10.1
12.2
26.0
21.5
5.2
4.4
28.4
30.0
21.3
22.1
159
64
Buy
28.7
Sterlite Tech
SRF
Suzlon Energy
Symphony
Varun Beverages
1,534
214
31,037
37,452
6,862
8,327
2,623
3,407
74,502
75,526
6.6
8.6
24.1
18.6
5.9
4.8
24.1
25.9
27.0
1,665
56,203
63,397
10,777
12,537
4,938
6,047
111,188
110,858
84.5
103.5
18.2
14.8
2.5
2.2
13.6
14.3
14.5
15.6
Buy
26
168,148
178,420
24,617
25,869
7,225
9,798
210,271
203,588
1.2
1.6
15.4
11.3
-2.4
-3.0
38.8
37.2
-12.6
-23.6
88 Accumulate
19
96
1,342
94
Sell
1,074
9,087
10,758
2,401
2,856
1,796
2,143
91,212
90,454
25.7
30.6
52.3
43.8
18.0
15.4
48.3
50.2
36.7
37.9
532
97
Buy
674
43,068
48,742
8,483
9,353
2,093
2,743
116,308
113,092
11.5
15.0
46.4
35.4
4.6
4.1
10.7
12.8
10.5
12.2
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
| Emkay Strategy | 11th July, 2017 | 135
©
Emkay
Valuations
©
Your success is our success
Target
Price
(Rs)
Net Interest
Incom e (Rs m n)
Pre Provision
Profit (Rs m n)
PAT (Rs m n)
Net NPA (%)
FY18e
FY19e
FY18e
FY19e
FY18e
FY19e
FY18e
1,450
70,753
90,479
47,227
61,056
24,020
30,959
0.7
0.6
43.7
56.3
31.9
24.7
6.8
5.5
3.4
3.4
22.4
23.6
1,350
28,209
33,960
16,962
20,918
8,998
11,327
2.7
2.4
57.6
72.5
19.8
15.7
4.1
3.4
2.6
2.7
19.3
20.5
Hold
1,528
109,947
130,266
123,147
142,126
84,197
97,040
0.5
0.5
53.0
61.1
30.7
26.7
6.0
5.4
2.4
2.3
20.8
21.3
374
Hold
730
41,568
47,231
37,099
41,972
23,218
26,587
0.1
0.2
46.0
52.7
16.1
14.1
3.0
2.6
1.4
1.4
19.9
19.4
166
39
Buy
150
12,107
13,735
6,331
7,165
2,137
2,651
6.8
5.3
9.0
11.2
18.4
14.8
2.3
2.0
1.5
1.6
9.5
10.8
361
205
Sell
290
35,604
43,598
22,897
28,716
7,504
11,017
3.5
2.5
13.3
19.5
27.2
18.5
3.7
3.1
1.5
1.9
11.4
15.3
Shriram City Union Finance
2,492
164
Hold
2,100
33,624
40,248
20,462
24,635
6,643
8,782
3.2
3.0
100.7
133.2
24.7
18.7
3.4
3.0
2.5
2.7
12.8
15.1
Shriram Transport Finance
1,090
247
Reduce
850
60,657
66,664
47,979
51,729
14,634
17,474
2.9
2.7
64.5
77.0
16.9
14.2
2.3
2.1
1.9
1.9
12.5
13.5
Com pany Nam e
Price Mkt Cap
(Rs) (Rs bn)
Bajaj Finance
1,392
765 Accumulate
Cholamandalam Finance
1,139
178 Accumulate
HDFC
1,629
2,595
LIC Housing Finance
741
Magma Fincorp
Mahindra Finance
Reco
Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
EPS (Rs)
PE (x)
PB (x)
ROA (%)
ROE (%)
FY19e FY18e FY19e FY18e FY19e FY18e FY19e FY18e FY19e FY18e FY19e
| Emkay Strategy | 11th July, 2017 | 136
Emkay
Your success is our success
Emkay Global Financial Services Ltd.
CIN - L67120MH1995PLC084899
7th Floor, The Ruby, Senapati Bapat Marg, Dadar - West, Mumbai - 400028. India
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Q1FY18 Results Preview: Renewed deceleration due to temporary headwinds
| Emkay Strategy | 11th July, 2017 | 137
©