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NiveshDaily
January 28, 2015
INDICES
Indices
Previous (day) Close
% chg
Sensex
Nifty
29,571.04
8,910.50
+1.00%
+0.85%
(As on 27th January, 2015)
FROM RESEARCH DESK
 Stock Updates
ICICI Bank | ICICI Bank achieves our Price Target of Rs 380/-; changed rating to ‘HOLD’ with
same price target of Rs 380/-
 News Updates
SBI to raise capital of Rs 150 bn… positive over long term, maintain buy with target price of
Rs 396
 Results Preview
AJANTPHARM, ALSTOMT&D, LUMAXTECH & TORNTPHARM
 Result Updates
Coromandel International | Q3FY15 Result/Concall Update | In-line performance; Maintain
HOLD with TP of Rs.353
Idea Cellular Ltd.| Q3FY15 Result Update | Mixed-set of performance: Maintain HOLD but
downward revision in TP of Rs.160
 Research Update included
Max India | Company Update | Max India to split 3 businesses and list them
separately..Sharp run up in stock price seems to have already priced in all positives,
downgrade to HOLD with revised target price of Rs 518.
Maruti Suzuki India Ltd. | Q3FY15 Result Update | In-line wih expectation numbers,
maintain SELL rating, with target price of Rs. 3,218 (based on 18x FY17e EPS)
 Global Markets - Outlook
 IndiaNivesh Universe | Valuation Table
 Result Today
Daljeet S. Kohli
Head of Research
Tel: +91 22 66188826
[email protected]
IndiaNivesh Research
IndiaNivesh Securities Private Limited
601 & 602, Sukh Sagar, N. S. Patkar Marg, Girgaum Chowpatty, Mumbai 400 007. Tel: (022) 66188800
IndiaNivesh Research is also available on Bloomberg INNS, Thomson First Call, Reuters and Factiva INDNIV.
Stock Updates
Daljeet S. Kohli
Head of Research
ICICI Bank:
Tel: +91 22 66188826
[email protected]
ICICI Bank achieves our Price Target of Rs 380/-; changed rating
to ‘HOLD’ with same price target of Rs 380/-
Kaushal Patel
Research Associate
In our stock update (dated December 17, 2014) report on ICICI Bank, we had changed
our rating to ‘BUY’ from ‘Hold’ with price target of Rs 380/- (using SOTP valuation
method). The stock has achieved our price target of Rs 380/- as on January 27,
2015 which has yielded an absolute return of 15% in just over one month’s time.
Tel: +91 22 66188834
[email protected]
Our recommendation was based on
(1)
We believe that ICICI Bank would be one of the best placed to ride the gradual
healing in economy and to benefit from reforms in infrastructure or insurance
sector along with pickup in the investment cycle,
(2)
We expect the bank to continue its growth story with Advances and Deposit
growing above industry average at CAGR of 17% and 16% respectively over
FY14-16E.
(3)
NIMs of bank have consistently expanded from 2.5% in FY10 to 3.3% in FY14.
We expect bank’s margins to improve further from current levels and to stay
at 3.4% by FY16E along with improved credit growth and strong retail liability
franchisee.
(4)
Asset quality to improve further from current level over FY14-16E (3.1% Gross
NPA and 1.1% Net NPA as of H1FY15).
(5)
Bank marching towards return path of 1.8% RoA and 15% RoE in FY16E (RoA
of 1.8% and RoE of 14.2% in H1FY15) and
(6)
Healthy performance to continue in its insurance subsidiaries
At CMP of Rs 384/-, the (standalone) stock is trading at P/ABV of 2.9x and 2.6x for
FY15E and FY16E, respectively. ICICI Bank has delivered strong core operating
performance in H1FY15 and we expect it to improve further over FY14-16E. ICICI
Bank is one of the top picks in our private sector banks coverage universe. We have
a long term positive view on ICICI Bank and we continue with our view.
However, ICICI Bank is likely to announce its Q3FY15 result on January 30, 2015. So,
we would like wait and revise our price target post Q3FY15 result announcement.
As a result, we have changed our rating to ‘Hold’ from ‘Buy’ with the same price
target of Rs 380/- using SOTP method, where the value of its standalone business
comes to Rs 324/- (P/ABV of 2.2x for FY16E) and the value of subsidiaries at Rs 56/(holding company discount: 20% to the fair value of subsidiaries at Rs 70/-).
* ICICI Bank’s closing price as on December 16, 2014 was Rs 331/-.
SOTP Valuation Summary
Particulars
ICICI Bank
Life Insurance
General Insurance
Others
Total Value of Subsidiaries
20% discount value
Total Value
Source: IndiaNIvesh Research
IndiaNivesh Research
NiveshDaily
Basis
ABV
EV + NBAP
PAT
Multiple
2.2
15
10
Year
FY16E
FY16E
FY16E
FY16E
Value/Share
324
26
12
32
70
14
380
January 28, 2015 | 2
News Updates
SBI to raise capital of Rs 150 bn… positive over long term,
maintain buy with target price of Rs 396...
Yogesh Hotwani
Research Analyst
Tel: +91 22 66188839
[email protected]
State Bank of India’s committee of directors has decided to take approval from
shareholders for raising capital of up to Rs 150 bn. This could be by way of follow on
public issue or right issue or Qualified Institutional Placement (QIP) or any other
mode. There is no fixed timeline for raising this capital, however it can be done
within one year after completing all the formalities.
Our Take and valuation
Current development of seeking approval from shareholders for raising capital will
be positive over long term as it will help bank in growing its business. Currently
SBI’s capital adequacy ratio is at 12.3% as per Basel III norms with Tier I capital of
9.6% which is higher the regulatory requirement of 11.5% which the banks have to
reach by FY19 as per Basel III norms. Post this capital, we are expecting capital
adequacy ratio for SBI to increase to 13.5% and tier I capital to 11% for FY16E
assuming it raise capital at current market price of Rs 330.
We have been highlighting SBI as top pick in public sector banking space apart from
Bank of Baroda. With macro improvement expected to kick in from H2FY15, SBI
remains the biggest beneficiary for the same. At CMP of Rs 330, SBI is trading at
standalone P/ABV of 2.6x and 2.3x for FY15E and FY16E respectively. We continue
to maintain buy with target price of Rs 396 based on SOTP valuation and maintain
20% discount for unlisted subsidiaries.
Sum of the parts valuation
SBI Standalone
SBBJ
SBH
SBM
SBP
SBT
SBI Life
SBI MF
SBI Capital markets
SBI DFHI
SBI Cards
Stake (%)
Methodology
Valuation (Rs mn) Value of SBI's Stake Value Per Share (Rs)
100
2.4x FY16E ABV
2618827
2618827
351
75
1x FY16E ABV
44771
33610
5
100
1x FY16E ABV
76681
76681
10
92
1x FY16E ABV
35936
33180
4
100
1x FY16E ABV
41321
41321
6
75
1x FY16E ABV
50603
37957
5
74
Appraisal Valuation
125665
92992
12
63
4% of AUM
31964
20138
3
100
12x FY16E Net Profit
41012
41012
5
72
12x FY16E Net Profit
14023
10035
1
60
1x FY16E ABV
16030
9618
1
20% holding discount to unlisted subsidiaries
31
396
Source: IndiaNivesh Research
IndiaNivesh Research
NiveshDaily
January 28, 2015 | 3
Results Preview
Rahul Koli
Research Associate
Tel: +91 22 66188833
[email protected]
Alstom T&D India Ltd. | Rating: HOLD | TP: Rs 444
Rs mn
Net Revenue
EBITDA
Net Profit
EPS (Rs)
EBITDA margin %
Net margin %
Q3FY15E
9,690
1,026
393
1.53
10.6%
4.0%
Q3FY14
Q2FY15
8,483
9,137
722
938
189
355
0.74
1.39
8.5%
10.3%
2.2%
3.9%
Y-o-Y
14.2%
42.1%
107.3%
107.3%
208
182
Q-o-Q
6.1%
9.4%
10.6%
10.6%
32
16
Standalone, Source: Company, IndiaNivesh Research
Updates:

With highest ever order book of Rs 79 bn in transmission products and
projects, we expect Alstom T&D to report top-line growth of 14.2% to Rs 9.7
bn in Q3FY15E

On account of better margin order book and pace of execution, We expect
company to maintain its double digit EBITDA margin in Q3FY15E also, at 10.6%

As Q3FY14 was a wash-out quarter due to abnormally low EBITDA margin of
8.5%, we expect EBITDA and net profit to show handsome jump of 42.1% and
107.3%, respectively.
Key things to watch out:

Key order wins and Order book at the end of Q3FY15

Margin of recent order wins
Valuation:
At CMP of Rs 527, Alstom T&D India is trading at FY15E and FY16E, PE multiple of
73.3x and 35.6x, respectively. Currently, we have HOLD rating on the stock with
target price of Rs. 444, which we'll revise post Q3FY15E results.
Tushar Manudhane
Research Analyst
Ajanta Pharma Ltd. | Reco: HOLD | TP: Rs.1,846
Tel: +91 22 66188835
[email protected]
Q3FY15E
Q3FY14
SALES
3,544
2,926
3,312
21.1
7.0
EBITDA
1,095
910
1,046
20.4
4.6
751
644
775
16.6
(3.0)
-
(20)
12
-
Reported Net profit
751
624
786
20.3
(4.5)
Adj. EPS (Rs)
21.2
18.2
21.9
16.6
(3.0)
bps
bps
EBITDA Margins (%)
30.9
31.1
31.6
(19)
(69)
Net Margins (%)
21.2
22.0
23.4
(82)
(219)
(Rs. In Mn.) SA
Adj Net Profit
Forex (loss) Gain
Q2FY15 Y-o-Y Ch. Q-o-Q Ch.
-
Source: Company Filings, IndiaNivesh Research
We expect Ajanta Pharma (AJP IN) to grow by 21% and 17% y-y in sales and adjusted
PAT, led by strong growth in domestic formulation segment. We expect branded
formulation sales to maintain steady rate in Africa and Asia led by new product
launches and increased market share in existing products. EBITDA margin is expected
to taper a bit partly on high base.
Key factors to watch: Update of number of ANDAs filed and status of execution of
new facility in Gujarat.
Valuation:
At CMP of Rs2,395, the stock trades at 29.4x FY15E EPS of Rs81.5 and 25.9x FY16E
EPS of Rs92.3. We have HOLD rating with price target of Rs1,846, based on 20x
FY16 earnings.
IndiaNivesh Research
NiveshDaily
January 28, 2015 | 4
Results Preview
Abhishek Jain
Research Analyst
Tel: +91 22 66188832
[email protected]
Lumax Auto Technologies | Rating: BUY | Target: Rs. 575
Quick Fundamentals (Rs. Mn)
Revenue
EBIDTA
PAT
EPS (RS.)
Margin %
EBITDA
PAT
Q3FY15e
2,045
179
85
6.3
Q2FY15
2,197
186
91
6.7
Q3FY14
1,929
144
64
4.7
8.8
4.2
8.4
4.2
7.4
3.3
QoQ % YoY %
(7)
6
(4)
25
(7)
33
(7)
33
Basis Points
31
131
(0)
85
Source: Capitaline; IndiaNivesh Research

Q3FY15 is expected to be a little subdued compared to the first two quarters
mainly because of the less number of working days as usually the company
undertakes annual maintenance shut-down in Dec.

EBITDA margin is expected to go up by 131 bps YoY, benefited from higher
operating leverage and cost control measures.
Valuation
At CMP of Rs 365 the LATL trading at 6.3x of its FY17 expected EPS of Rs 57.5. With
comfortable D/E of 0.2x and robust ROCE of 17%+, we find current valuations
attractive, we maintain BUY LATL with target price of Rs. 575 (10x FY17e EPS).
Tushar Manudhane
Research Analyst
Tel: +91 22 66188835
[email protected]
Torrent Pharmaceuticals | Reco: HOLD | TP: Rs 1,010
TRP IN (Rs Mn)
Sales
EBITDA
Adj Net Profit
Forex (loss) gain
Q3FY15E
Q3FY14
Q2FY15
12,962
9,900
1,900
1,580
2,845
2,045
-
Y-o-Y Ch.
Q-o-Q Ch.
12,030
30.9
7.7
2,590
49.7
9.9
1,980
29.4
3.3
-
-
-
Rep Net profit
2,045
1,580
-
1,980
29.4
3.3
Adj EPS (Rs.)
10.31
8.74
7.45
17.9
38.5
bps
bps
EBITDA Margins (%)
22.0
19.2
21.5
276
42
Net Margins (%)
15.8
16.0
16.5
(18)
(68)
Source: Company Filings, IndiaNivesh Research
We expect Torrent Pharmaceuticals to deliver growth of 31% y-y and 29% y-y in
sales and adjusted PAT to Rs12.9bn and Rs2.0bn, respectively. This would be driven
by superior growth in US market, addition of acquired business of Elder and healthy
growth in its domestic formulation segment. We expect US sales to grow at robust
rate of 34% y-y to US$32mn for the quarter. However, we expect EBITDA margin
due to improve 276 bps y-y and 42 bps q-q to 22% in 3QFY15E due to new product
launches and increased traction in existing products.
Key factors to watch: Progress on ANDA filing in US market and status of synergy
post acquisition of Elder’s portfolio.
Valuation:
At CMP of Rs1,187, the stock trades at 22x FY15E EPS of Rs53.6 and 21x FY16E EPS
of Rs56. We have HOLD rating with price target of Rs1,010, based on 18x FY16
earnings.
IndiaNivesh Research
NiveshDaily
January 28, 2015 | 5
Global Markets - Outlook
Dharmesh Kant
VP Strategies & Fund Manager (PMS)
Mobile: +91 77383 93372
Tel: +91 22 66188890
[email protected]
Global Market Update

US Markets: U.S. stocks recorded their biggest decline in three weeks on
Tuesday, following a surprise drop in durable-goods orders and disappointing
earnings from Microsoft Corp. and Caterpillar Inc.
Orders for durable goods declined sharply in December, raising questions
about whether businesses are really ready to ramp up investment in 2015.
Durable-goods orders sank 3.4% last month, the Commerce Department said
Tuesday, while November’s reading was marked down to a 2.1% decline from
a drop of 0.9%. The data comes as Federal Reserve officials gather in
Washington to set monetary policy for the next six weeks. Economists expect
the Fed to say it remains “patient” about the first rate hike.
The surprising decline appeared to stem in part from how commercial-aircraft
orders are calculated. Nondefense aircraft orders fell 55.5% in December. But
there was weakness across the board. Orders excluding the volatile
transportation sector were still down 0.8%, the third straight decline. Orders
excluding defense were down 3.2%. And orders for core capital goods — a
stand-in for general business investment — declined 0.6% in December.
Shipments of core capital goods, a category used to calculate quarterly
economic growth, slipped 0.2% in December after a 0.6% drop in the prior
month.
Separately, U.S. house prices edged back by 0.2% in November, to lower the
year-over-year advance to 4.3%, according to the S&P/Case-Shiller 20-city
composite released Tuesday. On a seasonally adjusted basis, home prices
advanced 0.7%, the report said. The consumer confidence index jumped in
January to the best reading since August 2007. New-home sales rose 11.6%
in December.

Day’s Performance: The S&P 500 closed down 27.53 points, or 1.3%, at
2,029.56. The Dow Jones Industrial Average dropped as much as 380 points,
but closed down 291.49 points, or 1.7%, at 17,387.21. The Nasdaq Composite
ended the day with a loss of 90.27 points, or 1.9%, at 4,681.50.

Set ups on S&P 500, Dow Industrial Average and Nasdaq 100 are undergoing
a pull back while set ups still look weak where sell on pull backs is advocated.
We remain cautious on US markets, expecting a correction to 1900 levels on
S&P 500.

Emerging markets: Most of Asian stocks are trading with minor cuts this
morning on weak global cues.

Bullions & Commodities: Gold is trading at $1291 per troy ounce this morning
down (0.15%) from previous close. WTI Crude future is trading at 45.37 per
barrel while Brent Crude future is trading at $48.86 per barrel.

Currencies: The U.S. Dollar Index tracking the U.S. currency against a basket
of six others currencies trading at 94.35 this morning up 0.28% from previous
close. Long term set ups up on Dollar Index are looking strong. Our target of
89 has been achieved. The dollar and U.S. stocks often trade on opposite
paths, with a weak dollar seen as providing investors with cheap funding to
buy stocks. Plus the dollar’s drop generally helps U.S. companies’ overseas
sales.
Source: Bloomberg
IndiaNivesh Research
NiveshDaily
January 28, 2015 | 6
Result/Concall
Update
Coromandel International Ltd.
January 28, 2015
In-line performance; Maintain HOLD with TP of Rs.353
Current
Previous
Rs.mn
Revenue
CMP : Rs.290
Rating : HOLD
Rating : HOLD
Target : Rs.353
Target : Rs.353
STOCK INFO
BSE
NSE
Bloomberg
Reuters
Sector
Face Value (Rs)
Equity Capital (Rs Mn)
Mkt Cap (Rs Mn) - Full
52w H/L (Rs)
Avg Daily Vol (BSE+NSE)
%
(as on Dec. 2014)
Institutions
Others, Incl Public
Promoters
12.6
24.3
63.2
Source: BSE
STOCK PERFORMANCE (%) 1m
COIL
-2
SENSEX
5
3m
-8
9
29,749 34,800
27,688 -14.5%
7.4%
30,144
-1.3%
In-line
EBIDTA
2,380
3,606
2,318
-34%
3%
2,502
-4.9%
In-line
PAT
1,207
1,799
942
-33%
28%
1,236
-2.4%
In-line
Source: IndiaNivesh Research
506395
COROMINTEE
CRIN IN
CORF.BO
Fertilizer
1
283
83,406
340/196
159,306
SHAREHOLDING PATTERN
Q3FY15 Q2FY15 Q3FY14 Q‐o‐Q % Y‐o‐Y % INSPL Est. Variance(%) Comments
12m
21
37
Source: Capitaline, IndiaNivesh Research
COIL v/s SENSEX
Coromandel International Ltd (COIL) Q3FY15 performance was in-line with our
estimate on all fronts. Revenue went up 7.4% Y/Y to Rs.29.7 bn (v/s INSPL est.
Rs.30.1bn). EBITDA (including other income) went up 2.7% Y/Y to Rs 2,380 mn
(INSPL Est. Rs 2,502 mn) translating to margin contraction of 37 bps Y/Y (to 8.0%
v/s 8.4% in Q3FY14). Net profit went up 20.5% Y/Y to Rs 1,152 mn (v/s INSPL est. of
Rs. 1,236 mn) led by higher EBITDA base. The consolidated numbers include
Coromandel International, Sabero Organics, and Liberty Phosphate.
Segment Wise Revenue (Conso)
(Rs Mn)
Q3FY15
Q2FY15
Fertilizer
24,394
27,571
Sabero
2,100
2,707
Others
3,255
4,522
Total
29,749
34,800
Note: Best As Per Our Estimates
150 Q/Q %
-11.5%
-22.4%
-28.0%
‐14.5%
Y/Y %
4.4%
35.4%
17.6%
7.4%
Source: Company Filings; IndiaNivesh Research
During the quarter, interest/depreciation expenditure stood at Rs.446/Rs.256 mn
(v/s Rs.601/Rs.264 mn in Q3FY14). The company reported tax expenditure of Rs
486 mn leading to tax rate of 29.7% (v/s 34.4% in Q3FY14).
In FY15-16 management expect to reach 1,000 (v/s 820 in Q3FY15) retail outlets
and also looking to expand in Maharashtra and Tamil Nadu. In our view, the
performance of COIL’s fertilizer segment during the quarter was impacted on account
of delayed monsoon arrival primarily in the key regions of COIL. However, we
expect overall ‘Rabi Crop’ season to be better than the last year. We maintain
‘HOLD’ with target price to Rs.353 on COIL.
Quarterly Analysis (Conso)
(Rs Mn)
Total Income
160 Q3FY14
23,369
1,551
2,769
27,688
Q3FY15
29,749
Q2FY15
34,800
Q3FY14
27,688
Q/Q %
‐14.5
Y/Y %
7.4
26,221
3,497
724
3,921
27,369
2,380
8.0%
22,373
-3,823
694
4,305
31,194
3,606
10.4%
22,680
2,262
728
4,224
25,370
2,318
8.4%
17.2
-191.5
4.4
-8.9
-12.3
‐34.0
15.6
54.6
-0.5
-7.2
7.9
2.7
Exceptional Items
Interest
Depreciation
Profit Before Tax
Margin %
39
446
256
1,638
5.5%
601
264
2,741
7.9%
608
252
1,458
5.3%
NM
-25.8
-3.0
‐40.2
NM
-26.7
1.6
12.4
Daljeet S. Kohli
Head of Research
Total Tax
Tax Rate %
486
29.7%
911
33.2%
502
34.4%
‐46.6
‐3.2
Tel: +91 22 66188826
[email protected]
Net Profit
Margin %
1,152
3.9%
1,830
5.3%
956
3.5%
‐37.1
20.5
Amar Mourya
Research Analyst
Minority Interest (after tax)
Net Profit to Equity Shareholder
Margin %
-55
1,207
4.1%
31
1,799
5.2%
14
942
3.4%
-277.2
‐32.9
-505.1
28.1
4.2
284
6.4
283
3.3
283
-33.1
0.4
27.7
0.4
140 130 120 110 100 90 80 70 Sensex
Source: Capitaline, IndiaNivesh Research
Tel: +91 22 66188836
[email protected]
IndiaNivesh Research
22/Jan/15
08/Jan/15
25/Dec/14
11/Dec/14
30/Oct/14
27/Nov/14
16/Oct/14
13/Nov/14
02/Oct/14
18/Sep/14
04/Sep/14
24/Jul/14
Coromandel 21/Aug/14
10/Jul/14
07/Aug/14
26/Jun/14
12/Jun/14
29/May/14
17/Apr/14
15/May/14
03/Apr/14
01/May/14
20/Mar/14
06/Mar/14
23/Jan/14
20/Feb/14
06/Feb/14
60 Raw Materials
Less: Stock Adjustments
Employee Cost
Other Manufacturing Expenses
Total Operating Exp
EBITDA
Margin %
EPS
O/shares
Source: Company Filings; IndiaNivesh Research
IndiaNivesh Securities Private Limited
601 & 602, Sukh Sagar, N. S. Patkar Marg, Girgaum Chowpatty, Mumbai 400 007. Tel: (022) 66188800
IndiaNivesh Research is also available on Bloomberg INNS, Thomson First Call, Reuters and Factiva INDNIV.
Result Update (contd...)
Key Conference Call Take Away

COIL’s reported 6.6% y/y volume de-growth to 9,87,000 tonnes (v/s 10,56,907
tonnes in Q3FY14). The volume de-growth was led by SSP (-52.3% Y/Y) and
Urea (-28.7% Y/Y), partially offset by 317%/0.4% Y/Y increase in MOP/Complex
fertilizer. Despite this, the fertilizer revenue grew by 4.4% Y/Y to Rs.24.4 bn on
back of price hike in complex fertilizer. As a result, the revenue per tonnes of
fertilizer went-up to Rs.24,715 (v/s Rs.22,110 in Q3FY14.

COIL reported 37bps Y/Y contraction in EBITDA margin due to cyclone Hudhud
and muted margin at Sabero level. The management took the price hike of
~4% during the quarter in order to offset the rise in ammonia price. However,
the ammonia price started moderating from its peak level ($600/tons). In
our view, decline in raw material cost, higher utilization level, decline in
transportation cost, and stable rupee may positively impact the EBITDA margin
performance going-ahead. We estimate EBITDA margin of 8.0%/8.5%/9.0% in
FY15E/FY16E/FY17E, respectively.
Chart: EBITDA Margin Trend
Source: Company Filings; IndiaNivesh Research

According to the company's management complex fertiliser inventory
declined in the system from 7.3 mn tonnes in CY14 to 3.7 mn tonnes in CY15.
Meaning excess inventory position on c3.6 mn tonnes was liquidated from
the system. However, still c1.6 mn tonnes of excess inventory remain in the
system relative to the normal level. In our view, normal 'Rabi Crop' could
deplete the inventory in the system and boost overall sales volumes going
ahead. Additionally, the company's initiatives to improve working capital
cycle along with timely payment of government subsidy could lead to
expansion in return on capital employed (ROCE).
Sabero Organics Gujarat Ltd…amalgamation
On 31st Dec., 2014 the company’s management announced the amalgamation of
Sabero Organics Gujarat Ltd with Coromandel International Limited. Based on the
valuation, Coromandel management decided the exchange ratio of 5 shares for
every 8 shares of Sabero Organics Gujarat Ltd. This action should lead to increase
in number of outstanding shares to 304 mn from 283 mn shares for Coromandel.
In our view, the amalgamation is likely to remain EPS decretive for the existing
minority shareholders of COIL.
Valuations
At CMP of Rs.290, the stock is trading at EV/EBITDA multiple of 10.3x FY15E and
9.2x FY16E. We remain positive on Coromandel due to (1) expanded capacity and
distribution network after acquisition of Liberty Phosphate, (2) Sabero’s turnaround,
and (3) strong growth in non-subsidy business. Additionally, the strong revival in
traded fertilizers volume during the quarter looks encouraging. On account of
lower pick-up in volume despite significant depletion in channel inventory from
peak level remains the key concern. We maintain HOLD with previous target price
to Rs.353 (9.7x FY17E EV/EBITDA) on COIL.
IndiaNivesh Research
Coromandel International Ltd|Result Update
January 28, 2015 | 2
Result Update (contd...)
Financials
Income statement
Balance sheet
Y E March (Rs m)
Net sales
Growth %
FY13
FY14
FY15e
FY16e FY17e
91,038 1,01,140 1,23,558 1,38,874 1,41,154
‐8.8
11.1
22.2
12.4
1.6
COGS
SG&A
EBITDA
Growth %
EBITDA Margin %
73,166
9,492
8,380
‐26.0
9.2
92,480 1,04,036 1,16,237 1,17,441
0
9,638 10,832 11,010
8,660
9,885 11,804 12,704
3.3
14.1
19.4
7.6
8.6
8.0
8.5
9.0
1,389 1,412
10,416 11,292
7.5
8.0
Y E March (Rs m)
Share Capital
Reserves & Surplus
Net Worth
Minority
Long-term loans
Others
Total Liabilities
FY13
283
21,683
21,966
1063
29458
0
52,486
FY14
283
22,529
22,812
254
18790
473
42,329
FY15e
283
25,688
25,971
1169
18790
483
46,414
FY16e
284
29,734
30,018
1197
18790
493
50,498
FY17e
284
34,850
35,134
1233
17699
502
54,568
Gross Block
Less Depreciation
Net Block
Capital Work in Progress
Investments
Defered tax (net)
Other non-current assets
25,960
7,397
18,563
4201
1,597
-1877
527
26,442
8,358
18,085
0
4,193
189
-
31,692
9,593
22,098
0
1,641
189
-
34,241
10,982
23,259
0
1,674
189
-
34,249
12,394
21,855
2386
1,708
-1877
-
58,745
18,201
14775
5,346
20,423
53,771
14,835
17529
4,722
16,686
57,271
16,818
18902
1,988
19,563
64,367
18,902
21116
2,361
21,988
70,015
15,684
19103
7,782
27,447
27,462
1,808
29,475
52,486
27,081
6,826
19,863
42,329
33,921
865
22,486
46,414
37,891
1,100
25,376
50,498
38,250
1,269
30,496
54,568
FY13
15.3
17.8
5.9
77.7
14.6
19.7
5.0
9.2
4.7
11.4x
2.2x
9.8x
8.7x
3.4
38.8
0.5x
1.1x
2.9x
72
79
54
98
FY14
12.6
16.0
3.5
80.7
18.4
15.6
6.1
8.6
3.5
17.1x
2.7x
13.5x
8.7x
1.6
28.0
0.6x
0.6x
1.6x
53
83
70
66
FY15e
14.4
18.5
4.0
85.4
18.8
16.9
6.8
8.0
3.6
20.8x
3.5x
16.2x
10.9x
1.3
28.0
0.7x
0.6x
1.7x
49
67
70
46
FY16e
18.5
23.1
5.2
98.7
20.8
18.7
8.0
8.5
4.0
16.2x
3.0x
13.0x
9.1x
1.7
28.0
0.7x
0.5x
1.4x
49
67
70
46
FY17e
23.4
28.0
6.5
115.6
20.9
20.2
9.4
9.0
5.0
12.8x
2.6x
10.7x
8.4x
2.2
28.0
0.6x
0.3x
0.8x
40
60
70
30
Deprecaition
EBIT
EBIT Margin %
711
7,669
8.4
961
7,699
7.6
1,236
8,649
7.0
Interest
Other Income
PBT
Tax
Effective tax rate %
2102
5,567
1,231
22.1
2403
-126
5,171
1,521
29.4
2349
6,300
1,890
30.0
2349
8,067
2,420
30.0
1770
9,522
2,381
25.0
Adjusted PAT
Growth%
4,337
‐31.7
3,649
‐15.8
4,410
20.8
5,647
28.0
7,142
26.5
Current Assets
Sundry Debtors
Inventories
Cash & Bank Balance
Loans & advances
Minority Interest
Reported PAT
RPAT Margin %
Growth%
-17
4,320
4.7
‐31.5
-84
3,565
3.5
‐17.5
-22
4,388
3.6
23.1
-28
5,619
4.0
28.0
-36
7,106
5.0
26.5
Current Liabilities
Provisions
Net Current Assets
Total assets
Source:Company filings; IndiaNivesh Research
Source:Company filings; IndiaNivesh Research
Cash Flow
Y E March (Rs m)
PBT
Depreciation
Interest Exp
Changes in Working Capital
Cash Flow After Changes in WC
Tax
Others
Cash flow from operations
Capital expenditure (net)
Free Cash Flow
Other income
Investments
Cash flow from investments
Proceeds from Issue of shares (incl Share Pr)
Proceed from Borrowings
Interest Paid
Dividend paid (incl tax)
Others
Cash flow from Financing
Net change in cash
Cash at the beginning of the year
Cash at the end of the year
Source:Company filings; IndiaNivesh Research
IndiaNivesh Research
FY13
5,567
711
1,521
3,260
11,060
-1,207
0
9,853
-2,585
7,268
-1,517
-2,282
‐6,385
26
1457
-696
-1,674
-7082
‐7,969
‐4,501
9,847
5,346
FY14
5,087
961
2,403
11,042
19,492
-1,521
0
17,971
3,719
21,689
0
-2,595
1,123
0
-10668
-2,403
-998
-5650
‐19,719
‐624
5,346
4,722
FY15e
6,279
1,236
2,349
-5,368
4,495
-1,890
0
2,605
-5,249
‐2,645
0
2,552
‐2,698
0
0
-2,349
-1,229
937
‐2,640
‐2,733
4,722
1,988
FY16e FY17e
8,045 9,500
1,389 1,412
2,349 1,770
-2,537 2,342
9,245 15,023
-2,420 -2,381
0
0
6,825 12,642
-2,549 -2,394
4,276 10,248
0
0
-33
-34
‐2,582 ‐2,428
1
0
0 -1091
-2,349 -1,770
-1,573 -1,990
50
36
‐3,871 ‐4,815
372 5,400
1,988 2,361
2,361 7,782
Key Ratios
Y E March
EPS (Rs)
Cash EPS (Rs)
DPS (Rs)
BVPS
ROCE %
ROE %
ROIC %
EBITDA Margin %
Net Margin %
PER (x)
P/BV (x)
P/CEPS (x)
EV/EBITDA (x)
Dividend Yield %
Dividend Payout %
m cap/sales (x)
net debt/equity (x)
net debt/ebitda (x)
Debtors (Days)
Inventory (Days)
Creditors (Days)
Cash Conversion Cycle (Days)
Source:Company filings; IndiaNivesh Research
Coromandel International Ltd|Result Update
January 28, 2015 | 3
Result Update
January 28, 2015
Idea Cellular Ltd.
Previous
Mixed-set of performance: Maintain HOLD but downward
revision in TP of Rs.160
Rating : HOLD
Rating : HOLD
Key Result Highlights
Target : Rs.160
Target : Rs.167
Rs.mn Q3 FY15 Q2 FY15 Q3 FY14 Q‐o‐Q %
Revenue 80,175 75,699 66,130
5.9%
EBIDTA 27,527 24,907 20,557 10.5%
PAT
7,670 7,559 4,677
1.5%
EPS
2.2
2.1
1.4
1.5%
Current
CMP : Rs.170
STOCK INFO
BSE
NSE
Bloomberg
Reuters
Sector
Equity Capital (Rs mn)
Face Value (Rs)
Mkt Cap (Rs mn)
52w H/L (Rs)
Avg Daily Vol (BSE+NSE)
532822
IDEA
IDEA IN
IDEA.BO
Telecom - Services
33,100
10
612,832
177/125
7,149,744
SHAREHOLDING PATTERN
%
(as on Dec. 2014)
Institutions
Others, Incl Public
Promoters
28.2
29.1
42.7
Source: BSE
STOCK PERFORMANCE (%) 1m
IDEA
13
SENSEX
6
3m
9
12
12m
10
39
Y‐o‐Y % INSPL est Variance(%) Comments
21.2%
80,421
-0.3% In-line Est
33.9%
26,797
2.7% In-line Est
64.0%
8,236
-6.9% Below-Est
52.7%
2.3
-6.9%
Below-Est
Source: Company Filings; IndiaNivesh Research
Idea Cellular Ltd (Idea) Q3FY15 result was largely in-line with our expectations;
except net profit which was below our estimates. Top-line grew by 21.2% Y/Y (+5.9%
Q/Q) to Rs 80.2bn against INSPL est of Rs.80.4bn. The revenue growth was led by
18.1% Y/Y (+5.1% Q/Q) increase in total volume minutes and 16.8% Y/Y (+4.7%
Q/Q) increase in subscriber addition. During the quarter, minutes of usage per user
per month (MoU) increased 3.2% Y/Y (+1.0% Q/Q) to 388 mints (v/s 376 mints in
Q3FY14 and 384 mints in Q2FY15). Average revenue per user (APRU) also went-up
5.9% Y/Y (+1.7% Q/Q) to Rs.179 (v/s Rs.169 in Q3FY14 and Rs.176 in Q2FY15).
ARPM went-up to 46.3 paisa (v/s 44.9 paisa in Q3FY14 and 45.9 in Q2FY15). EBITDA
stood at Rs27.5bn (INSPL est: Rs26.7bn), Up 33.9% Y/Y (+10.5% Q/Q) on account of
higher revenue base. As a result, consolidated EBITDA margin expanded 325bps Y/Y
(down 143 bps Q/Q) to 34.3% (v/s 31.1% in Q3FY14). PAT for quarter stood at
Rs.7.7 bn (INSPL est. Rs.8.2 bn), up 64.0% Y/Y/1.5% Q/Q, owing to higher EBITDA
base, partially offset by rise in depreciation expenditure. During the quarter, the
company reported higher other income of Rs.1,321 mn (v/s Rs.1,139 mn in Q3FY14
and Rs. 1139 mn in Q2FY15). After adjusting other income, net profit stood at
Rs. 6.4 bn, Up 61.0% Y/Y (down 1.1% Q/Q) relative to Rs.3.9 bn in Q3FY14.
Source: Capitaline, IndiaNivesh Research
Key Results Takeaway
IDEA v/s SENSEX
Operating KPI’s Update…
150
140
130

Idea registered increase in subscriber base of 6.7 mn resulting in total
subscriber base of 150 mn (up 4.7% Y/Y). Voice volume grew by 18.1% Y/Y to
171 bn minutes (v/s 145 bn minutes in Q3FY14). On the sequential basis
voice volume increased 5.1% y/y due to seasonal uptick. MoU/sub increased
at 388 minutes relative to 376 minutes in Q3FY14 and 384 minutes in Q2FY15.
Blended churn rate reduced on y-o-y/q-o-q basis to 4.2% from 5.6%/5.0% in
Q3FY14/Q2FY15. During the quarter post-paid churn rate stood at 2.7% [v/s
3.0% in Q2FY15 and 2.7% in Q3FY14] and pre-paid churn rate was at 4.3%
[v/s 5.8% in Q2FY15 and 5.1% in Q3FY14]. ARPU increased to Rs.178 v/s
(Rs.171 in Q3FY14 and Rs.176 in Q2FY15). Average revenue per minutes
(ARPM) increased 3.1% Y/Y/0.9%Q/Q to 46.3 paisa due to increase in VAS
revenue. Idea remains the key gainer in MNP with net gain of 11.9 mn
subscribers. Idea’s VLR subscribers (active subscribers) remain highest in
the industry at 100.9% (to 149 mn subscribers) of total subscriber base.

The share of VAS (non-voice) revenues went up to 23.1% (v/s 21.1% in Q2FY15
and 16.1% in Q3FY14) of total revenue. Total data subscribers increased
33.8%Y/Y to 34.1 mn [v/s 25.5 mn in Q3FY14]. Sequentially, data subscribers
increased 10.4% to 34.1 mn [v/s 30.9 mn in Q2FY15]. Average revenue per
megabytes (ARMB) stood at 26.9 paisa (v/s 26.5 paisa in Q2FY15 and 29.6
paisa in Q3FY14). The company reported data ARPU of Rs.126 (v/s Rs.119 in
Q2FY15 and Rs.91 in Q3FY14). Data contribution to the total services revenue
120
110
100
90
80
70
60
IDEA
22/Jan/15
08/Jan/15
25/Dec/14
11/Dec/14
30/Oct/14
27/Nov/14
16/Oct/14
13/Nov/14
02/Oct/14
18/Sep/14
04/Sep/14
24/Jul/14
21/Aug/14
10/Jul/14
07/Aug/14
26/Jun/14
12/Jun/14
29/May/14
17/Apr/14
15/May/14
03/Apr/14
01/May/14
20/Mar/14
06/Mar/14
23/Jan/14
20/Feb/14
06/Feb/14
50
Sensex
Source: Capitaline, IndiaNivesh Research
Daljeet S. Kohli
Head of Research
Tel: +91 22 66188826
[email protected]
Amar Mourya
Research Analyst
Tel: +91 22 66188836
[email protected]
IndiaNivesh Research
IndiaNivesh Securities Private Limited
601 & 602, Sukh Sagar, N. S. Patkar Marg, Girgaum Chowpatty, Mumbai 400 007. Tel: (022) 66188800
IndiaNivesh Research is also available on Bloomberg INNS, Thomson First Call, Reuters and Factiva INDNIV.
Result Update (contd...)
stood at 15.7% [v/s 14.0% in Q2FY15 and 9.5% in Q3FY14]. Non-data business
contribution to the total services revenue went-up to 7.4% (v/s 6.6% in Q3FY14 as %
of services rev]. The 3G Cell Sites (EOP) increased 39.4% Y/Y to 27,744 (v/s 19,904 in
Q3FY14).
Services business EBIDTA Margins update…
Idea revenues in established and new circles grew by 20.3% Y/Y and 38.5% Y/Y,
respectively. Additionally, EBIDTA from established circles (ESA) increased 35.6% Y/Y.
However, losses in new circles (NSA) expanded to Rs.1.9bn [v/s Rs1.6bn in Q3FY14
and Rs.1.8 bn in Q2FY15]. ESA EBITDA margin expanded 399bps Y/Y to 35.4% on back
of strong operational performance. On sequential basis, ESA EBITDA margin expanded
150bps Q/Q to 35.4% (v/s 33.9% in Q2FY15) due to seasonal uptick. The losses in
NSA attributable to expansion of 3G services in new circles (rolled out 2,580 v/s
1,873 3G cell sites in Q3FY14). We believe losses from the new circles could contract
going ahead, as data business starts generating higher volumes.

Implied Indus EBITDA margins expanded
In Q3FY15 revenues from Indus JV (16%) stood at Rs.6.09bn, up 8.0% Y/Y and 1.8%
Q/Q. Indus EBITDA for the quarter also went up 10.0% y/y/6.1% Q/Q at Rs.2,667 mn
on back of higher revenue base. As a result, Indus implied EBITDA margin stood at
43.7% (v/s 42.9% in Q3FY14 and 41.9% in Q2FY15). Indus EBITDA margin to total
revenue remain contracted to 3.3% (v/s 3.6% in Q3FY14). On the sequential basis
Indus EBITDA margin to total revenue remain muted to 3.3% (v/s 3.3% in Q2FY15).
During the quarter, the owned towers tenancy ratio stood at 1.59 (v/s 1.57 in Q3FY14
and 1.58 in Q2FY15). In Q3FY15, Idea rolled out ~2,326 2G cell sites (v/s ~5,630 in
Q3FY14), taking the total 2G cell site base to ~1,09,931. Idea owns 9,521 towers and
rest of the sites are rented (58,799 sites to Indus).

Capex Update
The Capex guidance for FY15 stands at Rs. 35 billion, excluding any spectrum related
payout. The company’s consolidated net debt stood at Rs.142 bn (v/s Rs.146 in Q2FY15)
with net debt to equity ratio of 0.64x (v/s 0.68x in Q2FY15). Net-debt to forward
EBIDTA is at 1.39x (Rs142/Rs97bn) for FY15E. During the quarter, the capex and net
debt amounts were higher by around Rs.814 million each due to forex loss on account
of currency fluctuation.

3G+Broadband update
Idea launched 4,906 (v/s 7,503 in Q3FY14) new sites (2G+3G) and expanded optical
fibre network to 90,200 km [v/s 71,600 km in Q3FY14] in order to strengthen network
capacities in NLD, ILD, ISP, Data Services and Devices. During the quarter, out of 144
mn subscriber, the number of customers adopting data services stood at 34.2 mn,
now contributing 23.1% to total service revenue. The Data volume grew by 121% Y/Y
to 46,077 mn MB in Q3FY15 [v/s 20,840 mn MB in Q3FY14]. The active 3G subscriber
base for the company now stands at 16.1 mn (v/s 8.7 mn in Q3FY14).

Valuations
At CMP of Rs.170/share, the stock is trading at 7.4x FY15E, 6.5x FY16E, and 5.7x FY17E EV/
EBITDA estimates. The current quarter performance was well in-line with our estimate with
strong volume growth. Additionally, the consistent growth in 3G subscriber base, increasing
data as % of services revenue, and trajectory growth in total data volume (Mn MB) looks
positive. However, uncertainty over launch of Reliance-JIO in 4G (voice/data) and upcoming
spectrum auction remains the key hangover for the stock price. Our target price of Rs.167
is achieved, yielded 14% return since our recommendation. We maintain HOLD but reduce
our target price to Rs.160 (5.3x FY17 EV/EBITDA) on stock due to above mentioned overhang.
YE March
(Rs. Mn)
Net Sales
PBDIT
Adj PAT
EPS (Rs)
EBITDA
Margin (%)
ROE (%)
P/E (x)
EV/EBITDA
(x)
FY14A
FY15e
2,65,190
83,204
20,096
6.0
31.4
12.8
28.7x
7.8x
3,10,272
1,02,390
27,925
7.9
33.0
13.8
21.7x
7.4x
FY16e
3,50,608
1,15,701
33,308
9.4
33.0
13.4
18.2x
6.5x
FY17e
3,96,187
1,32,723
39,619
12.0
33.5
13.1
14.3x
5.7x
Source: Company Filings; IndiaNivesh Research
IndiaNivesh Research
Idea Cellular Ltd|Result Update
January 28, 2015 | 2
Result Update (contd...)
Quarterly Performance
Income Statement (Conso)
(Rs Mn)
Revenue
Gross Revenue - ESA
Gross Revenue - NSA
Revenue ‐ Standalone
Indus (@ 16%)
Spi ce (@41.09)
Eli mi nations
Revenue ‐ Consolidated
Q3 FY15
Q2 FY15
QoQ Ch %
Q1 FY15
Q4FY14
Q3 FY14
YoY Ch %
75,543
4,605
80,148
6,098
-6,071
80,175
71,437
4,236
75,673
5,990
-5,964
75,699
5.7
8.7
5.9
1.8
NM
1.8
5.9
71,547
4,015
75,562
5,854
-5,806
75,610
66,699
3,707
70,406
5,735
-5,703
70,438
62,779
3,326
66,105
5,645
-5,620
66,130
20.3
38.5
21.2
8.0
NM
8.0
21.2
48,802
6,486
55,288
3,431
-6,071
52648
47,245
6,034
53,279
3,477
-5,964
50792
3.3
7.5
3.8
NM
‐1.3
1.8
3.7
47,222
5,744
52,966
-1
3,412
-5,806
50571
45,144
5,381
50,525
-2,420
5,703
48105
43,063
4,907
47,970
-2,422
5,620
45548
13.3
32.2
15.3
NM
‐241.7
NM
15.6
26,741
-1,881
24,860
2,667
27527
0.033265
24,192
-1,798
22,394
2,513
24907
0.033197
10.5
4.6
11.0
NM
6.1
10.5
24,325
-1,729
22,596
2,442
25038
0.032297
21,555
-1,674
19,881
2,420
22301
0.034356
19,716
-1,581
18,135
2,422
20557
0.036625
35.6
19.0
37.1
NM
10.1
33.9
13,792
1,034
14826
18%
10,774
1,014
11788
16%
28.0
NM
2.0
25.8
10,586
959
11545
15%
10,402
977
11379
16%
10,671
995
11666
18%
29.2
NM
3.9
27.1
11,068
1,632
12700
11,621
1,498
13119
‐4.8
NM
8.9
‐3.2
12,010
1,483
13493
9,479
1,443
10922
7,465
1,426
8891
48.3
NM
14.4
42.8
2041
-1,321
720
263
983
2315
-1,139
1,176
269
1,445
‐11.8
16.0
NM
-38.8
NM
‐2.0
-31.9
2295
-290
2,005
270
2,275
2060
-425
19
1,654
312
1,966
1913
-733
34
1,214
362
1,576
6.7
80.2
NM
-40.7
NM
‐27.3
-37.6
Dividend from Indus
0
1026
‐100.0
3623
0
0
NM
Tax‐Break Up
Tax- Standal one
Tax -Spi ce (@41.09)
Tax - Indus (@16%)
Tax-Consoli dated
3,565
482
4047
3,676
439
4115
‐3.0
NM
9.8
‐1.7
3,511
426
3937
2,687
371
3058
2,270
368
2638
57.0
NM
31.0
53.4
PAT Break‐Up
PAT- Standal one
PAT- Spi ce (@41.09)
PAT- Indus (@16%)
Di vi dent El i mi nati ons
PAT‐ Consolidated
6,783
887
7670
7,795
790
7559
‐13.0
NM
12.3
NM
1.5
10,117
788
7282
5,138
760
5898
3,981
696
4677
70.4
NM
27.4
NM
64.0
EBITDA Margin %
Sta ndal one
Cons ol i dated
31.0%
34.3%
29.6%
32.9%
142
143
29.9%
33.1%
28.2%
31.7%
27.4%
31.1%
358
325
8.5%
9.6%
10.3%
10.0%
‐184
‐42
13.4%
9.6%
7.3%
8.4%
6.0%
7.1%
244
249
Q2 FY14
22
127
164
368
44.7
1.6
96
Q3FY14
22
129
169
376
44.9
2
96
Q4 FY14
22
136
173
397
43.6
2
96
Q1 FY15
22
139
181
401
45.1
2
96
Q2 FY15
22
143.6
176
384
45.9
2
96
Q3FY15
22
150
179
388
46.3
2
96
COGS - ESA
COGS - NSA
COGS ‐ Standalone
Spi ce (@41.09)
Indus (@ 16%)
Eli mi nations
COGS ‐ Consolidated
EBITDA
EBITDA- ESA
EBITDA- NSA
EBITDA ‐ Standalone
Spi ce (@41.09)
Indus (@ 16%)
EBITDA ‐ Consolidated
Dep & Amort. Break‐Up
Dep & Amort.- Standal one
Dep & Amort.- Spi ce (@41.09)
Dep & Amort.- Indus (@ 16%)
Dep & Amort ‐ Consolidated
EBIT
EBIT - Standal one
EBIT -Spi ce (@41.09)
EBIT - Indus (@ 16%)
EBIT - Cons ol i dated
Interest & Finance Cost Break‐Up
Int Cos t - Standal one
Int Income - Standal one
Forex Loss /(Gai n) - Standal one
Int & Fin Cost Standalone
Int & Fi n Cost - Spice (@41.09)
Int & Fi n Cost - Indus (@16%)
Int & Fin Cost‐ Consolidated
PAT Margin %
Sta ndal one
Cons ol i dated
Key Performance Indicators (KPIs)
Operating Service Area (EoP) - nos
Subscriber Base (EoP) - mn
Average Revenue Per Unit (ARPU)
Average Minutes of Use Per User (MOU)
Average Realisation per Minute (ARPM)
Tenancy Ratio - Owned Towers
Pre-Paid Subs (% of EoP Subscribers)
Source: Company Filings; IndiaNivesh Research
IndiaNivesh Research
Idea Cellular Ltd|Result Update
January 28, 2015 | 3
Result Today
ADANIPOWER
AJANTPHARM
ALSTOMT&D
LUMAXTECH
TORNTPHARM
IndiaNivesh Research
NiveshDaily
January 28, 2015 | 7
Company Update
January 27, 2015
Current
Previous
CMP : Rs.492
Rating : BUY
Rating : HOLD
Target : Rs.465
Achieved
Target : Rs.518
STOCK INFO
BSE
NSE
Bloomberg
Reuters
Sector
Face Value (Rs)
Equity Capital (Rs Mn)
Mkt Cap (Rs Mn)
52w H/L (Rs)
Avg Daily Vol (BSE+NSE)
500271
MAX
MAX IN
MAXI.BO
Diversified
2
533
131,185
506/178
546,777
SHAREHOLDING PATTERN
Max India Ltd.
Max India to split 3 businesses and list them separately….Sharp
run up in stock price seems to have already priced in all positives,
downgrade to HOLD with revised target price of Rs 518…
Max India’s board has approved corporate restructuring of the company by splitting
the company into 3 parts by demerging and later on listing them separately. Max
India will be renamed as Max Financial Services Ltd (MFS) which will be the life
insurance entity and will be the first life insurance company to get listed on stock
exchanges. Second company will be Max India which will have Max Healthcare,
Max Bupa Health insurance and Antara Senior living. Third part will be Max Ventures
which will look after investments in manufacturing arm, Max speciality films Ltd.
Management of all the individual companies will continue to remain same. Promoter
of Max India is to make voluntary open offer for buying upto additional 34.5% stake
in Max Ventures post demerger ie once it gets listed.
Max India
(Entity 1)
%
Max Financial
Services
(Entity 2)
Max Ventures
(Entity 3)
Max Life
Max Speciality
Films
(as on Dec. 2014)
Institutions
Others, Incl Public
Promoters
49.4
10.1
40.5
Source: BSE
STOCK PERFORMANCE (%) 1m
MAX
20
SENSEX
6
3m
40
9
12m
131
37
Max Healthcare
Antara Senior
Living
Max Bupa
Insurance
Source: Company Filings; IndiaNivesh Research
Source: BSE, IndiaNivesh Research
Further Max India will divest its entire stake in Max Neeman which is into clinical
research for consideration of USD 1.5 mn to Canadian Contract Research
Organisation (CRO), JSS Medical Research. This will be subject to successful
completion of due diligence and signing of agreement between the parties. In FY14,
Max Neeman has done total revenue of Rs 215 mn and Net loss of Rs 8 mn.
MAX v/s SENSEX
230
210
190
170
150
130
110
MAX
Sensex
Source: Capitaline, IndiaNivesh Research
Daljeet S. Kohli
Head of Research
22/01/2015
08/01/2015
25/12/2014
11/12/2014
27/11/2014
13/11/2014
30/10/2014
16/10/2014
02/10/2014
18/09/2014
04/09/2014
21/08/2014
07/08/2014
24/07/2014
10/07/2014
26/06/2014
12/06/2014
29/05/2014
15/05/2014
01/05/2014
17/04/2014
03/04/2014
20/03/2014
06/03/2014
20/02/2014
06/02/2014
23/01/2014
90
Post demerger and splitting of the businesses, Max India’s shareholders will continue
to have one equity share of 2 each in Max Financial services Ltd (which will hold
Max Life Insurance business) and will get additional one equity share of Rs 2 each
of Max India Ltd (which will hold Healthcare and Health Insurance business). Further
Max India’s shareholder will also get one equity share of face value Rs 10 of Max
Ventures and Industries Ltd for every 5 shares of Rs 2 each of Max India. Further
Max India at consolidated level has total cash of Rs 6.05 bn which will be splited in
3 entities of which Rs 1.5 bn will go to Max Financials services, Rs 100 mn will be
with Max Ventures and remaining will be in Max India.
Our Take and Valuation
Yogesh Hotwani
Research Analyst
This move of splitting the businesses and listing them separately was largely inline
with our view stated in our recent updates on Max India dated 14th January 2015
and 23rd January 2015. This will be beneficial to both investors and company.
Investors will have a focused investment with pure play on individual business and
Company will get benefited by way of value unlocking mainly because the holding
company discount will vanish. Key positive was the management control and
leadership which continues to remain same for all its businesses.
Tel: +91 22 66188839
[email protected]
Max Life Insurance business continues to do well and maintain its growth momentum
at mid teen growth rate with strong persistency rate. Max Health also continues to
Tel: +91 22 66188826
[email protected]
IndiaNivesh Research
IndiaNivesh Securities Private Limited
601 & 602, Sukh Sagar, N. S. Patkar Marg, Girgaum Chowpatty, Mumbai 400 007. Tel: (022) 66188800
IndiaNivesh Research is also available on Bloomberg INNS, Thomson First Call, Reuters and Factiva INDNIV.
Company Update (contd...)
show traction on operating front with improving occupancy rate and EBITDA margins.
At CMP of Rs 492, Consolidated Max India is trading at P/ABV of 3.8x and 2.8x for
FY16E and FY17E respectively. We revise the SOTP target price to Rs 518, valuing
Max Life based on past deals in insurance sector at ~3x embedded value for FY17E,
16x EV/EBITDA Max Healthcare business for FY17E and 1x invested capital for Max
bupa for FY17E. We continue to like the company and individual businesses, however
due to limited upside we downgrade rating to HOLD from buy.
SOTP
Methodology
Max Life insurance
Max Healthcare
Max Bupa
Max speciality films
3x FY17E Embedded Value
16x FY17E EV/EBITDA
1x Capital Invested
12x FY17E earning
Value (Rs mn) Max India's Holdings (%)
155376
41396
9720
1319
71.1
46.0
74.0
99.0
Max India's Holding Value
Value per share (Rs) % contribution
(Rs mn)
110395
415
80.0
19042
72
13.8
7193
27
5.2
1306
5
0.9
518
100.0
Source: IndiaNivesh Research
IndiaNivesh Research
Max India Ltd.|Company Update
January 27, 2015 | 2
Result Update
January 27, 2015
Maruti Suzuki India Ltd.
In-line wih expectation numbers, maintain SELL rating, with target price of Rs. 3,218 (based on 18x FY17e EPS)
Current
Previous
CMP : Rs.3,685
Rating : SELL
Rating : SELL
Target : Rs.3,218
Target : Rs.2,844
STOCK INFO
BSE
NSE
Bloomberg
Reuters
Sector
Face Value (Rs)
Equity Capital (Rs Mn)
Mkt Cap (Rs Mn)
52w H/L (Rs)
Avg Daily Vol (BSE+NSE)
532500
MARUTI
MSIL:IN
MRTI.BO
Automobiles
5
1510
1,113,165
3,704/1,541
673,908
SHAREHOLDING PATTERN
%
(as on Dec. 2014)
Institutions
Others, Incl Public
Promoters
36.86
6.93
56.21
Source: BSE
STOCK PERFORMANCE (%) 1m
MARUTI
6
SENSEX
6
3m
14
9
12m
101
37
Source: Capitaline, IndiaNivesh Research
MARUTI v/s SENSEX
225.00
200.00
175.00
150.00
125.00
100.00
Maruti
Sensex
Source: Capitaline, IndiaNivesh Research
Daljeet S. Kohli
Head of Research
Tel: +91 22 66188826
[email protected]
Abhishek Jain
Research Analyst
Tel: +91 22 66188832
[email protected]
IndiaNivesh Research
1/8/2015
1/22/2015
12/25/2014
12/11/2014
11/27/2014
11/13/2014
10/30/2014
10/16/2014
9/4/2014
10/2/2014
9/18/2014
8/7/2014
8/21/2014
7/24/2014
7/10/2014
6/26/2014
6/12/2014
5/1/2014
5/29/2014
5/15/2014
4/3/2014
4/17/2014
3/6/2014
3/20/2014
2/6/2014
2/20/2014
1/23/2014
75.00
Maruti Suzuki adjusted Q3FY15 PAT number was above our expectation. Net revenue
increased by 20% YoY and 2% QoQ to Rs. 122.63 bn (slightly above our estimate of
Rs. 121.14 bn) due to volume growth (up 12% YoY) and 2% QoQ/YoY increase in
realization. Average realization increased by 2% QoQ /YoY to Rs. 3, 78,596 due to better
product mix (higher sales of compact car and export sales). Domestic volume increased
by 10% YoY while export volume jumped by 43% YoY. However on sequential basis volume
increased marginally by 3% and export volume plunged 16%. Though total sales jumped
significantly (14% YoY) in 9MFY15, management is cautious for sustainability of the
growth in coming months due to roll back of excise duty benefit. Diesel vehicle demand
is collapsing due to narrowing down of gap between diesel and petrol prices. Diesel
volumes fell by 5% YoY for Maruti in Q3FY14 while petrol variant increased by 20% YoY.
Pricing has also weakened, resulting in an increase in average discounts (Rs. 21000 per
vehicle) for the company. Newly launched Ciaz in luxury segment has received good
response. The company is targeting sales of ~4000 units per month. Automatic
transmission cars are catching the imagination of masses. Maruti auto gear shift variants
Celerio and Alto K10 are getting good response. We introduce FY17 estimates and value
Maruti Suzuki at 18x FY17E EPS of Rs 179 to arrive at price target of Rs 3218 (from
Rs 2840). We expect volume to grow at a CAGR of 13% from FY14-FY17e. At CMP Rs 3685
the stock is trading at PE multiple of 20.6x FY17E EPS. We maintain our SELL rating with
target price of Rs. 3218.
Rs.mn
Q3FY15e
Revenue
122631
EBIDTA
15926
PAT
8022
Adjusted PAT
8722
Source: IndiaNivesh Research
Q2FY15
119963
15208
8625
8625
Q3FY14
102118
13214
6702
6702
Q‐o‐Q %
2
5
-7
-7
Y‐o‐Y % INSPL Q3FY15e
20
121142
21
15642
20
8364
20
8364
Variance(%)
1.23
1.81
-4.09
4.28
EBITDA margin expanded by 30 bps QoQ to 12.7%, below our expectation of 12.9% due
to higher other expenses. Benefit of favorable currency movement (the yen has
depreciated by 13% YoY and 7% QoQ vs INR) was partially offset by negative inventory
impact and higher discounts. RM cost (as % of sales) was down 117 bps QoQ (up 84 bps
YoY) due to lower finished good purchase cost while other expenses increased by 88
bps YoY to 14.5% due to higher advertisement expenses and one off of Rs. 700 mn
towards excise duty. Net profit increased by 20% YoY (down 7% QoQ) to Rs. 8.02 bn.
However the company made a provision of Rs. 700 mn for Excise duty demand on sales
tax subsidy. Adjusted PAT (excluding this exceptional item) comes at Rs. 8.7 bn, above
our estimates of Rs. 8.3 bn).
Quick Fundamentals (Rs. Mn)
Q3FY15e
Volume
323,911
Revenue
122,631
Average Realization (Rs)
378,596
Other Operating Income
3,126
Total Income
125,758
Cost of Revenues
109,832
Raw Materials
88,261
Other Expenditure
17,821
Employee Expenses
3,750
EBIDTA
15,926
Depreciation
6,278
EBIT
9,648
Interest Expense
300
Other income
1,290
PBT
10,637
Provision for taxation
2,615
PAT
8,022
EPS (RS.)
26.56
Margin
12.7
EBITDA %
EBIT %
7.7
PBT %
8.5
PAT %
6.4
Source: Company Filings; IndiaNivesh Research
Q2FY15
321,898
119,963
372,675
3,075
123,038
107,829
87,749
16,383
3,698
15,208
5,989
9,220
348
1,933
10,805
2,179
8,625
28.56
Q3FY14
288,151
102,118
370,550
2,562
104,681
91,466
72,644
15,099
3,723
13,214
4,992
8,223
434
1,010
8,799
2,097
6,702
22.19
12.4
7.5
8.8
7.0
12.6
7.9
8.4
6.4
QoQ %
1
2
2
2
2
2
1
9
1
5
5
5
-14
-33
-2
20
‐7
YoY %
12
20
2
22.0
20
20
21
18
1
21
26
17
-31
28
21
25
20
Basis Points (bps)
30
4
18
-18
-32
5
-63
-2
IndiaNivesh Securities Private Limited
601 & 602, Sukh Sagar, N. S. Patkar Marg, Girgaum Chowpatty, Mumbai 400 007. Tel: (022) 66188800
IndiaNivesh Research is also available on Bloomberg INNS, Thomson First Call, Reuters and Factiva INDNIV.
Result Update (contd...)
Net revenue increased by 20% YoY, Compact car segment up by 13%
YoY
Net revenue increased by 20% YoY and 2% QoQ to Rs. 122.63 bn (slightly above our
estimate of Rs. 121.14 bn) due to volume growth (up 12% YoY) and 2% QoQ/YoY
increase in realization Domestic volume increased by 10% YoY while export volume
jumped by 43% YoY, driven by the strong demand in compact car segment. Compact
car segment jumped by 13% YoY led by higher sales of Celerio, Dzire and Swift.
Vans sales jumped 28% YoY.
EBITDA margin expanded by 30 bps QoQ to 12.7%
EBITDA margin expanded by 30 bps QoQ to 12.7%, below our expectation of 12.9%
due to higher other expenses. Benefit of favorable currency movement (the yen
has depreciated by 13% YoY and 7% QoQ vs INR) was partially offset by negative
inventory impact and higher discounts. RM cost (as % of sales) was down 117 bps
QoQ (up 84 bps YoY) due to lower finished goods purchase cost while other expenses
increased by 88 bps YoY to 14.5% due to higher advertisement expenses and one
off of Rs. 700 mn towards excise duty.
Cost Analysis (% of Revenue)
Q3FY15e
Raw Materials Expenses
72.0%
Employee Expenses
3.1%
Other Expenses
14.5%
Source: Company Filings; IndiaNivesh Research
Q2FY15
73.1%
3.1%
13.7%
Q3FY14
71.1%
3.6%
14.8%
bps QoQ
-117
-2
88
bps YoY
84
-59
-25
Other income increased by 28% YoY (down 33% QoQ) to Rs 1.29 bn. Effective tax
rate increased to 24.5% vs 23.8% in Q3FY14. Net profit increased by 20% YoY (down
7% QoQ) to Rs. 8.02 bn. However the company made a provision of Rs. 700 mn for
Excise duty demand on sales tax subsidy. Adjusted PAT (excluding this exceptional
item) comes at Rs. 8.7 bn, above our estimates of Rs. 8.3 bn).
Revised Estimates (FY15 downwards, introduce FY17 numbers)
Taking into consideration the 9mFY15 performance, we are revising our estimates
downward. Since topline growth is in line our expectation, we have not revised our
sales estimates. However, we have revised our profitability expectations downwards
as EBITDA margin has been below our expectation. We have revised our EBITDA
margin expectations to 12.24% in FY15E and 13.2% in FY16E.
Quick Fundamentals(Rs. mn)
FY15E
FY16E
New
old
change(%)
New
old
change(%)
Revenue
503228
503228
0.0
584318
584318
0.0
INR/YEN
54
54
54
54
61605
65454
77319
80945
12.24
13.01
13.23
13.85
35015
39404
46274
47749
116
130
1300988
1300988
EBITDA
EBITDA Margin
PAT
EPS (Rs)
Volume(no.)
-5.9
(76) bps
-11.1
-11.1
0.0
153
158
1467078
1467078
-4.5
(62) bps
-3.1
-3.1
0.0
Source: Company Filings; IndiaNivesh Research
We introduce FY17 estimates and value Maruti Suzuki at 18x FY17E EPS of Rs 179 to
arrive at price target of Rs 3218 (from Rs 2840). We expect volume to grow at a
CAGR of 13% from FY14-FY17e.
FINANCIAL OVERVIEW (Stand alone)
Y E March (Rs mn)
Volume (Units)
FY 13
FY 15E
FY 16E
FY 17E
1,155,041
1,300,988
1,467,078
1,658,920
Revenue
435,879
446,109
503,228
584,318
690,407
EBITDA
42,296
52,661
61,605
77,319
91,368
EBITDA Margin %
9.7%
11.8%
12.2%
13.2%
13.2%
EPS (Rs)
79.2
94.2
115.9
153.2
178.8
BVPS (Rs)
615
695
797
932
1087
PER (x)
16.29
39.12
31.78
24.05
20.61
ROE(%)
12.9%
13.6%
14.5%
16.4%
16.4%
Source: Company Filings; IndiaNivesh Research
IndiaNivesh Research
FY 14
1,171,434
Maruti Suzuki India Ltd|Result Update
CMP as on 27th Jan 2015
January 27, 2015| 2
Result Update (contd...)
Valuation
We remain impressed with company's business, given their key strengths such as
proven product portfolio, strong network and rural presence. We believe strong
volume growth in short to medium term led by new launches, higher AMT capacity,
rising preference for petrol segment and lower diesel penetration (versus industry).
However, At CMP Rs 3,685 the stock is trading at PE multiple of 20.6x FY17E EPS.
We maintain our SELL rating with target price of Rs. 3,218
Financial Statements
Income Statement
Y E March (Rs mn)
Balance Sheet
FY 13
FY 14
FY 15E
FY 16E
FY 17E
Revenue
435879
446109
503228
584318
690407
Growth %
22%
2%
13%
16%
18%
393583
393448
441623
506999
599039
42296
52661
61605
77319
91368
68%
25%
17%
26%
18%
Expenditure
EBITDA
Growth %
EBITDA Margin %
Y E March (Rs mn)
FY 13
FY 14
FY 15E
FY 16E
1510
1510
1510
1510
1510
184279
208270
239188
280049
327875
Net Worth
185789
209780
240698
281559
329385
Total debt
13892
21217
19217
17217
15217
Total Liabilities
199681
230997
259916
298776
344602
Gross Block
190071
220071
255071
295071
345071
92079
112167
135123
158729
186335
97992
107904
119948
136342
158736
Share Capital
Reserves & Surplus
FY 17E
9.7%
11.8%
12.2%
13.2%
13.2%
Depreciation
18612
22007
22956
23606
27606
EBIT
23684
30654
38649
53714
63762
Net Block
Other Income
8124
8936
9383
9852
10345
Capital Work in Progress
19422
26214
24214
22214
20214
Interest
1898
1665
1345
1033
913
Investments
70783
101179
101179
101179
101179
PBT
29910
37925
46687
62533
73194
Current Assets
78683
70060
94144
116767
155569
Tax
5989
9481
11672
16259
19030
Inventories
18407
17059
24199
27781
32824
Sundry Debtors
Effective tax rate %
Less Depreciation
20%
25%
25%
26%
26%
23921
28444
35015
46274
54163
Growth%
46%
19%
23%
32%
17%
PAT margin %
5.5%
6.4%
7.0%
7.9%
7.8%
Current Liabilities
EPS (Rs)
79.21
94.19
115.94
153.23
178.76
Net current assets
PAT
14237
14137
16544
19210
22698
Cash & Bank Balance
7750
6297
8472
26168
48521
Loans and Advances
23940
28895
32595
29216
34520
Other current assets
14349
3672
12334
14392
17005
63112
68494
75483
73640
87010
15571
1566
18661
43127
68558
Net deferred tax liability
Total Assets
-4087
-5866
-4087
-4087
-4086
199681
230997
259916
298775
344602
FY 13
FY 14E
FY 15E
FY 16E
FY 17E
79
94
116
153
179
141
167
192
231
270
17.88
Key Ratios
Cash Flow
Y E March (Rs mn)
FY 13
FY 14
FY 15E
FY 16E
FY 17E
Y E March
PBT
29910
37925
46687
62533
73194
EPS (Rs)
Depreciation
18612
22007
22956
23606
27606
Cash EPS (Rs)
Interest
1898
1665
1345
1033
913
Other Income
-8124
-8936
-9383
-9852
-10345
Changes in working capital
-2279
1875
-16699
-6770
-3081
DPS (Rs)
8.00
9.42
11.59
15.32
Dividend Yield (x)
1.87
1.13
0.95
1.26
1.47
BVPS (Rs)
615
695
797
932
1087
Tax
-5989
-9481
-11672
-16259
-19030
ROE(%)
12.9%
13.6%
14.5%
16.4%
16.4%
Cash flow from operations
38189
49217
33234
54291
69258
PER (x)
16.29
39.12
31.78
24.05
20.61
Capital expenditure
-51997
-37389
-33000
-38000
-48000
P/BV (x)
2.10
5.30
4.62
3.95
3.39
EV/EBITDA
9.36
21.42
18.24
14.28
11.82
8124
8936
9383
9852
10345
Debt/Equity Ratio
0.07
0.10
0.08
0.06
0.05
‐53182
‐53003
‐23617
‐28148
‐37655
Dividend pay out(%)
10
10
10
10
10
Loans availed or (repaid)
3108
7325
-2000
-2000
-2000
Debtors days
12
12
12
12
12
Dividend paid (incl tax)
-2828
-3328
-4097
-5414
-6337
Inventory days
21
19
20
20
20
Interest
-1898
-1665
-1345
-1033
-913
Crediors days
42
46
46
46
46
Cash flow from Financing
‐1618
2332
‐7442
‐8447
‐9250
Cash conversion cycle(Days)
-10
-15
-14
-14
-14
Net change in cash
-16611
-1454
2176
17696
22352
Cash at the beginning of the year
24361
7750
6297
8472
26168
7750
6297
8472
26168
48521
Pur/ Sale of Investment
Other Income
Cash flow from investments
Cash at the end of the year
Source: Company Filings; IndiaNivesh Research
IndiaNivesh Research
Maruti Suzuki India Ltd|Result Update
January 27, 2015| 3
January 28, 2015
IndiaNivesh Universe | Valuation Table
Rs. Mn
Mcap
Rs.
CMP
Rs.
TP
Reco
%
(-) Dow n/(+) Up
YES
YES
YES
YES
NO
YES
YES
YES
YES
YES
NO
NO
188,112
700,225
436,096
168,938
4,946
570,657
822,606
1,114,041
1,812,090
146,517
73,976
11,920
66
2,420
16,089
199
363
2,858
1,324
3,688
605
308
1,403
960
NA
2,840
NA
242
575
3,157
1,212
3,218
NA
158
1,074
1,184
NEUTRAL
BUY
NOT RATED
BUY
BUY
HOLD
HOLD
SELL
NOT RATED
SELL
HOLD
BUY
NA
17.4
NA
21.8
58.5
10.5
-8.5
-12.7
NA
-48.8
-23.4
23.4
Information Technology
Infosys
Tata Consultancy Services
Wipro
HCL Technologies###
Tech Mahindra
NIIT Technologies
KPIT Cummins
Mastek
NIIT Ltd
SQS India BFSI (Thinksoft Global)
Onmobile Global
YES
YES
YES
YES
YES
NO
NO
NO
NO
NO
NO
2,453,711
4,900,835
1,477,695
1,135,356
675,981
21,873
40,902
9,137
7,441
6,101
8,004
2,137
2,502
599
1,616
2,817
359
209
407
45
587
74
2,377
2,666
611
1,697
2,629
326
178
554
37
665
87
HOLD
HOLD
HOLD
HOLD
HOLD
SELL
HOLD
BUY
SELL
HOLD
BUY
11.3
6.6
2.1
5.0
-6.7
-9.1
-14.7
36.0
-17.9
13.3
17.9
Oil & Gas
Cairn India
Gail India
Oil India
Oil & Natural Gas Corporation
Reliance Industries**
YES
YES
YES
YES
YES
448,273
531,682
326,808
2,996,560
2,876,397
239
419
544
350
889
317
509
605
411
1,111
BUY
BUY
BUY
BUY
BUY
32.6
21.4
11.3
17.3
25.0
NO
NO
NO
NO
134,808
11,456
36,662
75,339
527
159
239
224
444
172
332
280
HOLD
HOLD
BUY
BUY
-15.7
8.3
39.0
25.2
35,638
33,008
35,638
18,465
37,291
38,246
46,452
17,343
YES
NO
NO
856,537
50,965
8,654
3,121
101
324
3,029
103
426
HOLD
BUY
BUY
-3.0
1.7
31.4
214,437
49,932
6,973
254,048
56,274
11,015
Company Name
Auto
Ashok Leyland**
Bajaj Auto
Eicher Motors** $$$
Exide Industries
Lumax Auto
Hero MotoCorp
Mahindra & Mahindra**
Maruti Suzuki India
Tata Motors Company**
TVS Motor Company
SKF India $$$
Sw araj Engines
Capital Goods and Engineering
Alstom T&D
BGR Energy Systems
Kalpataru Pow er
Engineers India
Cement
Ultratech Cement
Prism Cement
Mangalam Cement
BSE200
Index
(CMP as of previous day)
Sales (Rs. Mn)
FY14
FY15E
FY16E
114,867 122,670 155,859
197,263 215,132 250,948
68,098
30,248
44,796
59,727
70,123
84,989
7,628
8,732
10,285
251,249 296,380 337,307
669,310 774,082 903,723
444,506 446,109 487,937
2,306,771 2,638,897 3,055,585
83,790 102,253 123,334
22,464
24,579
28,871
6,083
6,144
7,668
EBITDA (Rs.Mn)
FY14
FY15E
FY16E
PAT (Rs. Mn)
FY14
FY15E
FY16E
FY14
EPS (Rs.)
FY15E
FY16E
P/E (x)
FY15E FY16E
4,239
41,650
7,178
8,253
608
35,649
101,641
54,649
348,332
4,895
2,699
906
8,769
39,946
7,505
10,178
760
42,997
93,055
52,661
435,460
6,375
3,221
921
14,961
48,063
12,222
13,213
1,028
54,803
111,187
53,414
498,641
8,608
3,888
1,226
-1,641
33,803
3,939
4,872
302
21,027
46,669
28,529
139,910
1,863
1,667
670
1,174
35,353
5,265
6,346
393
28,560
44,723
28,444
187,410
3,442
2,203
702
6,482
41,098
8,313
8,362
568
36,624
56,765
30,374
221,051
4,979
2,702
915
-0.6
116.8
145.0
5.7
22.2
105.3
75.8
94.4
43.5
3.9
31.6
54.0
0.4
122.0
170.3
7.5
29.0
135.3
72.2
94.2
58.2
7.2
40.9
56.5
2.3
142.0
279.6
9.8
42.0
175.4
91.6
100.6
69.1
10.5
50.6
73.7
NA
19.8
94.5
26.5
12.5
21.1
18.3
39.1
10.4
42.8
34.3
17.0
29.0
17.0
57.6
20.3
8.6
16.3
14.5
36.7
8.8
29.4
27.7
13.0
540,520 599,728
964,354 1,139,105
475,570 535,297
369,777 422,853
222,017 272,458
23,732
26,239
30,347
34,331
10,335
12,846
10,023
12,105
2,123
3,238
8,687
9,555
134,270
251,528
95,078
80,822
42,076
3,631
4,204
726
598
399
1,337
154,815
281,405
108,010
93,823
46,135
3,377
4,051
552
546
422
924
178,187
334,035
121,980
106,711
58,519
3,936
4,778
819
847
576
576
106,480
191,639
77,967
65,095
30,288
2,305
2,490
518
178
300
-1,320
127,515
216,382
86,072
70,711
31,499
1,827
2,549
293
387
235
104
138,293
253,790
92,831
80,555
38,366
2,181
2,896
538
554
406
1,057
93.2
97.7
31.7
91.9
126.8
37.8
13.0
23.0
1.1
28.7
-11.6
111.5
110.6
34.9
100.9
148.8
30.4
12.8
13.1
1.4
22.3
22.3
121.7
125.9
37.7
115.0
181.3
36.3
14.5
24.0
3.4
36.3
36.3
19.2
22.6
17.2
16.0
18.9
11.8
16.3
31.2
32.2
26.3
3.3
17.6
19.9
15.9
14.1
15.5
9.9
14.4
17.0
13.3
16.2
2.0
187,612 133,861 152,009
616,435 541,034 576,297
97,157 127,422 126,116
1,744,771 1,817,085 1,867,170
4,344,600 3,932,422 3,656,077
137,504
80,111
37,028
491,947
357,610
79,605
73,712
50,087
630,041
386,983
86,794
67,379
61,580
694,451
442,172
124,318
47,862
29,420
265,065
224,930
61,916
42,733
33,987
286,487
234,417
68,876
46,119
41,635
326,388
239,941
65.0
37.7
48.9
31.0
76.6
32.4
33.7
56.5
33.5
74.9
36.1
36.4
69.3
38.2
81.3
7.4
12.4
9.6
10.5
11.9
6.6
11.5
7.8
9.2
10.9
42,616
39,968
49,088
20,097
3,380
3,992
3,380
3,889
3,882
4,520
4,614
2,238
4,834
4,650
5,041
3,973
1,170
932
1,170
4,827
1,315
1,607
2,127
3,591
2,453
1,654
2,531
4,835
3.5
12.9
3.5
14.3
5.1
13.5
5.1
10.7
9.6
15.2
9.6
14.4
103.2
11.8
46.8
20.9
54.8
10.5
24.9
15.5
302,349
65,646
13,112
45,785
2,056
558
48,744
3,800
1,305
65,336
5,510
2,229
22,060
-862
296
26,399
537
463
36,184
1,429
1,152
80.4
-1.8
11.1
94.5
1.1
17.3
129.5
2.8
43.2
33.0
94.9
18.7
24.1
35.7
7.5
501,330
818,094
434,269
321,437
188,314
23,050
26,940
9,096
9,510
1,944
8,653
IndiaNivesh Universe | Valuation Table (contd...)
BSE200
Index
Sales (Rs. Mn)
FY14
FY15E
EBITDA (Rs.Mn)
FY14
FY15E
FY16E
PAT (Rs. Mn)
FY14
FY15E
FY16E
FY14
EPS (Rs.)
FY15E
FY16E
2,233
13,547
8,714
13,517
8,068
2,704
16,183
10,504
16,210
9,146
1,489
7,597
4,854
9,139
4,805
1,754
9,057
5,723
10,663
4,422
2,211
11,055
6,982
12,842
5,131
10.1
22.3
7.5
5.2
7.8
11.9
26.6
8.9
6.1
7.0
15.0
32.6
10.8
7.4
8.3
35.1
40.6
39.8
40.8
22.8
27.8
33.1
32.7
33.8
19.3
3,690
21,396
3,615
7,249
12,207
21,572
10,152
25,465
11,004
1,209
11,165
30,859
71,969
8,141
10,545
1,546
1,222
1,574
4,306
28,358
4,614
6,567
16,905
24,392
13,570
33,898
14,876
1,758
5,885
36,182
85,130
6,574
12,338
1,817
1,255
1,629
5,138
33,377
5,593
7,512
20,862
33,176
16,400
37,794
17,166
2,313
9,634
44,642
89,080
7,813
13,622
2,113
1,652
2,001
2,339
11,729
2,355
4,138
8,036
13,884
7,733
21,515
5,423
580
1,090
18,364
31,415
4,785
6,639
615
757
703
2,880
17,462
3,124
4,001
10,887
14,240
10,001
22,035
8,965
1,072
188
22,881
69,703
4,106
9,078
1,559
809
745
3,462
20,903
3,834
4,488
13,958
20,671
11,962
24,401
10,460
1,519
2,332
28,342
72,607
5,163
9,498
1,784
1,118
1,009
66.4
40.2
12.5
20.8
39.3
17.3
58.3
126.0
20.0
6.3
6.9
40.8
15.2
37.9
39.2
7.3
19.6
3.7
81.5
60.0
16.6
20.2
53.2
17.7
75.3
130.0
33.2
11.6
1.2
55.1
33.7
33.9
49.1
18.4
21.0
4.7
98.0
71.8
20.3
22.7
68.2
25.7
90.1
143.9
38.8
16.5
14.6
68.4
35.1
41.6
56.1
21.1
29.0
7.2
29.4
19.6
29.0
20.3
31.0
39.9
22.4
24.7
22.1
27.4
141.9
27.7
27.1
18.8
26.0
10.5
43.3
5.7
24.4
16.4
23.7
18.0
24.2
27.5
18.7
22.3
18.9
19.3
11.7
22.3
26.0
15.3
21.1
9.1
31.3
3.7
3,642
20,484
9,982
1,684
203,918
2,818
868
46,232
1,935
2,213
2,651
55,287
2,119
394
406
898
4,495
2,254
22,009
9,675
2,309
257,568
3,399
841
56,789
2,127
3,042
3,093
70,629
2,854
450
1,074
1,358
4,142
3,777
26,543
10,879
2,667
278,936
4,536
1,029
64,543
2,357
3,678
3,979
79,307
3,152
654
1,748
1,811
5,020
1,279
9,498
3,565
228
62,985
1,242
289
11,429
712
2,090
340
19,104
578
132
71
260
1,417
118
12,335
4,328
612
63,938
1,696
421
14,201
752
3,008
941
14,515
907
151
563
528
1,735
1,337
16,338
5,070
803
76,875
2,400
581
17,646
879
3,667
1,340
18,932
1,146
286
1,019
816
2,414
23.6
21.6
15.4
16.4
21.5
16.7
8.3
91.1
3.7
30.3
5.1
20.5
17.7
7.9
14.3
2.0
37.3
9.1
28.7
15.3
2.4
21.6
21.3
10.8
108.9
6.0
43.9
14.2
18.2
27.7
8.8
75.4
4.0
46.1
27.8
37.9
17.9
3.1
25.5
30.2
15.0
134.9
6.9
53.8
22.5
20.8
35.0
16.9
136.5
6.2
64.1
136.6
12.2
19.0
9.8
9.6
33.3
31.5
16.8
14.7
16.9
28.4
8.8
4.3
31.6
8.8
15.4
8.6
44.5
9.3
16.2
7.6
8.1
23.5
22.8
13.6
12.7
13.8
17.9
7.7
3.4
16.5
4.9
9.9
6.2
Rs. Mn
Mcap
Rs.
CMP
Rs.
TP
Reco
%
(-) Dow n/(+) Up
NO
YES
YES
YES
YES
61,530
367,100
228,001
436,932
98,573
417
1,078
354
249
159
427
UR
UR
204
180
HOLD
HOLD
UR
HOLD
BUY
2.4
NA
NA
-18.0
12.9
6,707
76,024
46,865
70,734
77,376
8,600
84,907
57,721
80,560
82,027
10,132
98,225
66,235
92,917
88,156
1,860
11,784
7,591
11,690
7,521
Pharma
Ajanta Pharma
Aurobindo Pharma
Alembic Pharma
Biocon
Cadila
Cipla
Divis Lab
Dr Reddy
Glenmark
Indoco
Jubilant Life Science
Lupin
Sun Pharma
Ipca Lab
Torrent Pharma
JB Chemical
Shilpa Medicare
Sharon Bio-Medicine
NO
YES
NO
YES
YES
YES
YES
YES
YES
NO
NO
YES
YES
YES
YES
NO
NO
NO
84,211
343,633
90,752
81,900
338,122
567,706
224,122
547,096
199,367
29,327
27,118
684,894
1,892,989
80,295
200,003
16,368
35,025
2,824
2,394
1,178
481
410
1,651
707
1,689
3,212
735
318
170
1,524
914
636
1,182
193
909
27
1,846
1,293
412
463
1,636
644
1,802
3,581
775
392
131
1,710
831
573
1,010
295
473
66
HOLD
BUY
HOLD
HOLD
BUY
HOLD
HOLD
BUY
HOLD
BUY
SELL
BUY
HOLD
HOLD
HOLD
BUY
HOLD
HOLD
-22.9
9.8
-14.4
13.1
-0.9
-8.9
6.7
11.5
5.5
23.2
-23.1
12.2
-9.1
-10.0
-14.5
52.8
-47.9
146.7
12,083
80,366
18,632
28,773
70,600
101,004
25,253
132,170
60,052
7,223
58,034
112,866
160,804
32,288
40,363
10,006
5,482
13,248
13,935
125,460
22,694
31,231
84,145
112,980
31,786
150,023
69,747
8,793
60,354
136,395
189,598
33,109
49,334
11,282
6,114
13,910
16,466
142,379
26,585
36,207
99,115
112,980
38,011
169,881
80,060
11,126
68,332
162,445
205,834
39,437
57,643
12,734
7,642
15,997
Others
BASF India Ltd.** &&
UPL
Coromandel International Ltd.
Meghmani Organics Ltd
Sesa Sterlite **
Kajaria Ceramics
Somany Ceramics
Aditya Birla Nuvo Ltd.**
Radico Khaitan Ltd.**
Kaveri Seed Ltd**
HSIL Ltd
Jindal steel and Pow er**
Godaw ari pow er and Ispat ltd
Liberty Shoes Ltd
HIL Ltd
Pennar Industries Ltd
KPR Mills Ltd
NO
YES
YES
NO
YES
NO
NO
YES
NO
NO
NO
YES
NO
NO
NO
NO
NO
53,505
150,290
82,906
6,027
614,580
56,363
13,273
238,699
11,668
51,021
26,620
145,470
3,896
4,743
4,944
7,408
15,007
1,236
351
290
24
207
709
342
1,834
88
741
403
159
119
278
662
62
398
NA
480
353
34
378
755
344
2,729
165
795
485
200
198
338
898
81
570
UR
BUY
HOLD
BUY
BUY
BUY
HOLD
BUY
BUY
HOLD
BUY
HOLD
BUY
BUY
BUY
BUY
BUY
NA
36.9
21.7
43.5
82.3
6.5
0.7
48.8
88.1
7.4
20.3
25.8
66.5
21.4
35.6
31.6
43.1
42,347
107,709
71,269
11,783
661,524
18,387
12,629
258,934
14,122
10,111
18,582
200,040
15,409
4,835
8,657
11,133
23,710
48,945
121,670
111,207
14,020
774,281
22,000
15,011
276,485
15,704
12,306
21,320
249,822
17,103
5,808
10,984
13,580
26,255
54,832
138,703
125,040
15,441
863,169
28,847
18,380
310,268
17,392
14,715
25,935
310,182
18,976
7,410
13,840
17,247
31,061
Company Name
FMCG
Bajaj Corp
Godrej Consumer Products**
Marico**
Dabur**
Tata Global Beverages**
FY16E
P/E (x)
FY15E FY16E
IndiaNivesh Universe | Valuation Table (contd...)
Company Name
Telecom
Bharti Airtel
Idea Cellular
Company Name
Pow er
Adani Pow er**
CESC Ltd
Coal India
JSW Energy**
NHPC
NTPC
Pow er Grid Corporation
Reliance Pow er
Torrent Pow er**
Tata Pow er Company**
Company Name
Banking & Financial Services
State Bank of India
Punjab National Bank
Allahabad Bank
Bank of Baroda
Corporation Bank
Federal Bank
Canara Bank
ICICI Bank
HDFC Bank
Axis Bank
DCB Bank
Karur Vysya Bank
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
NO
YES
YES
YES
YES
YES
NO
NO
Rs. Mn
Rs.
Rs.
Mcap
CMP
TP
Reco
(-) Dow n/(+) Up
1,575,775
612,652
394
170
399
167
HOLD
HOLD
1.2
-1.9
Rs. Mn
Mcap
Rs.
CMP
Rs.
TP
Reco
%
(-) Dow n/(+) Up
143,596
94,009
2,416,957
188,524
217,539
1,180,338
784,477
179,809
82,891
240,712
50
709
383
115
20
143
150
64
175
89
50
NR
467
NA
NA
190
164
110
NA
104
HOLD
NOT RATED
BUY
NOT RATED
NOT RATED
BUY
BUY
BUY
NOT RATED
BUY
0.0
NA
22.0
NA
NA
32.7
9.4
71.6
NA
16.9
Rs. Mn
Mcap
Rs.
CMP
Rs.
TP
Reco
%
(-) Dow n/(+) Up
2,464,065
370,488
68,866
478,690
59,310
124,246
216,584
2,221,296
2,596,417
1,399,669
34,799
72,209
330
205
126
223
71
145
470
384
1,074
592
124
597
396
165
87
258
NA
175
383
380
910
600
120
633
BUY
SELL
SELL
BUY
NOT RATED
BUY
HOLD
BUY
HOLD
BUY
HOLD
BUY
20.0
-19.4
-31.2
15.7
NA
20.5
-18.4
-0.9
-15.3
1.3
-2.9
6.0
492,822
161,460
53,113
119,654
37,837
22,286
89,444
164,756
184,826
119,516
3,684
12,837
546,365
175,889
61,130
137,988
43,107
23,847
105,853
190,483
224,084
144,645
5,070
14,233
617,781
200,450
68,248
159,326
50,840
27,336
124,746
214,583
264,608
170,657
6,134
16,891
321,092
113,845
40,204
93,532
30,394
14,804
67,962
165,946
143,601
114,561
1,880
8,378
364,321
119,335
45,837
100,153
34,848
15,708
76,783
195,052
166,885
130,925
2,826
8,831
419,173
138,295
52,399
118,831
43,195
18,089
89,666
225,477
202,896
153,908
3,517
11,096
108,912
33,426
11,720
45,411
5,617
8,389
24,382
98,105
84,784
62,177
1,514
4,296
BUY
HOLD
BUY
HOLD
HOLD
HOLD
10.9
-18.0
19.9
5.2
-5.0
-1.8
18,989
22,153
19,821
116,830
2,295
4,038
21,996
28,836
25,089
143,065
2,658
5,630
26,293
36,950
28,813
165,722
3,190
7,762
18,470
13,490
13,929
5,060
1,466
1,278
20,951
17,315
16,913
6,634
1,723
2,360
24,988
21,948
19,507
7,685
2,110
3,580
13,172
7,190
5,948
1,395
1,287
370
LIC Housing Finance
YES
250,818
497
551
Bajaj Finance
NO
209,092
4,170
3,418
L&T Finance Holding
NO
120,448
70
84
Max India+++
NO
131,181
492
518
CARE+++
NO
47,325
1,632
1,551
CFL
NO
33,885
407
400
Note: ** Bloomberg Est; +++ Manufacturing Format; $$$ Calendar Year; ### Y/E June, && EBIT
Source: Company Filings; IndiaNivesh Research
%
Sales (Rs. Mn)
FY14
FY15E
857,461
264,320
960,690 1,047,152
302,317 341,618
Sales (Rs. Mn)
FY14
FY15E
157,541
101,109
688,100
87,054
74,159
789,217
156,754
51,748
86,811
356,487
FY16E
185,411
60,457
881,801
93,977
78,875
800,873
178,396
63,220
105,810
363,968
FY16E
204,442
63,917
881,949
98,832
81,985
881,482
210,265
89,011
122,462
383,396
Net Interest Income (Rs. Mn)
FY14
FY15E
FY16E
EBITDA (Rs.Mn)
FY14
FY15E
277,778
81,430
317,690
96,741
EBITDA (Rs.Mn)
FY14
FY15E
49,899
17,375
178,713
NA
44,460
198,795
133,129
19,167
13,046
77,118
58,073
15,710
257,930
34,118
51,142
228,669
152,433
21,394
15,721
74,448
FY16E
355,628
111,026
FY16E
70,419
16,455
276,097
36,334
52,729
207,664
180,051
39,784
16,731
80,475
Pre-Tax Pre-Prov. Profit (Rs.Mn)
FY14
FY15E
FY16E
PAT (Rs. Mn)
FY14
FY15E
27,727
19,678
FY16E
FY14
EPS (Rs.)
FY15E
FY16E
36,650
32,454
7.0
5.9
8.7
7.7
10.7
9.2
FY16E
FY14
EPS (Rs.)
FY15E
FY16E
528
7,436
167,730
12,831
24,445
102,281
66,617
19,735
-1,919
16,809
-1.04
39.35
23.92
4.60
1.02
13.83
9.47
3.66
2.23
-1.61
-3.74
37.86
24.90
7.78
2.05
11.44
10.51
3.60
5.07
3.91
0.70
63.10
26.50
7.87
2.19
12.37
12.73
7.00
2.63
5.97
FY16E
FY14
EPS (Rs.)
FY15E
FY16E
137,694
37,160
6,270
49,851
2,729
9,950
26,866
117,280
98,188
69,631
1,624
4,329
159,329
41,692
6,934
60,130
7,322
11,392
32,063
135,188
119,809
81,741
1,779
5,840
15.0
92.0
21.5
105.4
33.5
9.8
52.9
85.0
35.3
26.4
6.0
40.1
18.0
103.0
11.5
115.7
16.3
11.6
58.2
102.0
40.8
30.0
5.8
35.9
21.0
115.0
12.7
139.6
43.7
13.3
69.5
117.0
49.8
35.0
6.3
48.4
2.6
0.3
1.1
0.3
0.2
1.7
0.9
0.6
5.2
3.3
2.3
1.9
2.3
0.2
1.1
0.3
0.2
1.5
0.9
0.5
4.3
2.8
2.1
1.7
13,785
9,062
6,693
1,942
1,482
897
16,052
11,366
8,344
2,249
1,791
1,506
26.1
143.0
3.5
5.2
44.4
4.5
27.3
181.0
3.9
7.3
51.1
10.9
31.8
227.0
4.9
8.4
61.8
16.4
3.0
4.4
1.7
4.1
14.5
2.8
2.6
3.6
1.6
3.8
11.7
2.4
29,683
27,208
PAT (Rs. Mn)
FY14
FY15E
-2,906
4,916
151,117
7,547
12,188
114,036
45,476
10,267
1,053
-2,600
-12,959
6,958
157,319
12,675
22,909
94,631
54,965
7,723
1,007
10,772
PAT (Rs. Mn)
FY14
FY15E
EV/EBITDA (x)
FY15E FY16E
7.0
7.1
6.2
6.1
P/BV (x)
FY15E FY16E
2.6
1.5
5.1
2.5
0.7
1.3
2.0
0.9
1.4
1.7
2.7
1.4
4.6
2.3
0.7
1.2
1.8
0.8
1.5
1.6
P/ABV (x)
FY15E FY16E
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Definitions of ratings
BUY. We expect this stock to deliver more than 15% returns over the next 12 months.
HOLD. We expect this stock to deliver -15% to +15% returns over the next 12 months.
SELL. We expect this stock to deliver <-15% returns over the next 12 months.
Our target prices are on a 12-month horizon basis.
Other definitions
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