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Q3FY14 Results Review

Friday 7th February, 2014


TABLE OF CONTENTS

S. No. Nifty 50 / Coverage Companies’ Q3FY14 Performance Pg No.

I Summary 1

II Company Synopsis

1 IDFC – A slow but steady turnaround 4

2 PNB – Positive turnaround 8

3 Marico – Lower ASP spends boost bottom-line 16

4 GCPL – Decent Performance 21

5 Navneet Education – Long term drivers remain intact 31

6 Oriental Carbon – Lower tax rate drives bottom-line 36

7 Petronet LNG – Delay in Kochi-Mangalore pipeline hits the

bottom line 39

8 Grasim Industries – Margin of VSF business impacted 44

9 Divis Laboratories – Higher capacity utilization drives growth 51

10 Lupin – Key markets driving growth 55

11 Ranbaxy Laboratories – Disappointing Performance… 60

12 BHEL – Poor performance continues 66

13 ACC – Volume outlook remains blurred 71

14 Ambuja Cements – Outlook continues to remain challenging 75

III CNX 500 Quarterly Results at a Glance 79

Q3FY14 Performance Summary

- 1 of 84 - Friday 7th

February, 2014


Q3F

Y1

4 R

ES

UL

TS

RE

VIE

W

Nifty 6,063 Sensex 20,377

Corporate profitability continues to be stressed due to economic slowdown with defensives continue to outperform This week’s highlight was the exemplary performance of the Pharma companies, with Lupin, Ranbaxy and Divi’s Lab, all beating street estimates in terms of revenue as well as profitability. While Lupin surprised with a sharp jump in US generic volumes, low manufacturing and SG&A expenses, Ranbaxy was supported by a strong showing by Absorica. Our coverage stock, Divi’s Lab’s performance was fired by higher capacity utilization and strong volume growth. We recommend a HOLD on Lupin while we would be looking to re-rate Divi’s Lab. Ranbaxy with FDA import alerts on all manufacturing facilities is a clear avoid at this point in time.

IDFC reported a muted performance, given the poor loan growth and subdued capital market activity. While the asset quality has held up remarkably, the management has guided for a steady deterioration of the same. We are not optimistic of an economic revival in the immediate future and loan growth is expected to remain weak. We recommend a HOLD on the stock.

PSU Banking major PNB’s results beat street estimates on both asset quality and NIM front. While the valuations are mouth watering, the uncertainty of the economic scenario, poor asset quality and large size of its restructured book remains an overhang on the stock.

Amongst FMCG stocks Marico & GCPL declared results this week which were in line with street expectations. Marico’s reported marginal volume growth while GCPL was supported by the strong performance of overseas business amid the lukewarm domestic performance (slow down in soaps and household insecticides). We would look to buy both these stocks on declines given their current rich valuations.

Cement stocks’ Q4CY13 performance was a mixed bag with ACC performance largely in line with street expectation while Ambuja’s performance was a dampener. With volumes across the sector showing de-growth and a slew of capacities expected to come up in the next few quarters we would like to see concrete evidence of an economic recovery playing out before getting bullish on the sector. Stock prices are expected to remain under pressure in the foreseeable future.

Unlike the street, we were not surprised by BHEL’s poor showing. A poor order flow and slower execution at the major power producers led to a decline in the top-line and a greater than expected drop in PAT. Until such time as the dust does not settles over a stable power policy, we expect the interest in the India power sector to remain discouraging. This is expected to lead to a drop in order book and the slower addition this quarter is a clear indication of the same.

After showing encouraging signs of turnaround in Q2FY14, Grasim’s reported poor results owing to the dismal profits from its VSF (Viscose Staple Fibre) business. However, we remain positive on the stock given the commissioning of major projects by the company, which should contribute to volume growth.

- 2 of 84 - Friday 7th February, 2014


Petronet LNG reported disappointing numbers owing to the sharp fall in the utilization rate at its Dahej terminal and losses at Kochi terminal. We continue to maintain a HOLD on the stock with expectation of ramp up in its Kochi terminal.

Our coverage stock, Navneet Education Ltd reported a mixed performance with de-growth in publication business being offset by impressive performance of its stationery vertical. We continue to remain bullish on the company on the back of multiple growth drivers viz. proposed common curriculum, geographic expansion and improved visibility in the e-business and stationery (exports) segments.

- 3 of 84 - Friday 7th February, 2014


Company Synopsis

Quarterly Result Update

IDFC Ltd.

A slow but steady turnaround

- 4 of 84 - Friday, 7th February, 2014

In Q3FY14, IDFC’s results were in line with street estimates with NII and PAT at Rs 670 crore and

Rs 505 crore, respectively due to lower than expected provisioning. Its provisions came down

owing to a write-back of investment provisions worth ~Rs 12 crore. With a weak capex cycle, loan

growth remained subdued at 1% YoY. GNPA inched up to 0.6% of advances, +30 bps QoQ.

As per the management the credit growth outlook will be subdued, considering the weak capex cycle and lack of investments with the management focusing more on quality assets for lending than to chase growth. While disbursements stood at Rs 2000 crore, down 22% YoY, with outstanding disbursements down across all the segments, repayment rate came down to 6% as against 8% in Q2FY14. Non-interest income grew 9.4% YoY (down 6.5% QoQ) because of modest treasury income (24.3%

YoY;-41% QoQ). Asset-management fees were sturdy (16.1% YoY), with strong traction in

investment banking and institutional broking (138% YoY). Led by 50 bps increase in cost of funds,

margins dipped to 4% (-20 bps YoY).

Higher cost of funds is attributable to change in mix towards bank borrowings and higher interest

rates. Interest rates are expected to remain elevated in the near term. Given the macro backdrop,

IDFC has been diversifying its portfolio into telecom: 28% of approvals (21% as on Mar 2013) from

energy: 34% of approvals (40% as on Mar 2013). In-line with management guidance, GNPA did

increase. During the quarter, GNPA stands at 0.6% of loans +89% QoQ. With NNPA at 0.5% of

loans.

Currently, at the CMP of Rs 96, IDFC is valued at 2.4 Adj P/PB on a 1 year forward basis. We

recommend a HOLD on the stock. The Infrastructure sector continues to face significant regulatory

headwinds such as availability of raw materials (power), delays (roads) and policy uncertainty

(telecom). Additionally asset quality deterioration is difficult to measure as in this tough

environment IDFC has remarkably not reported any rise in Gross NPAs.

Recommendation (Rs)

CMP 96 Rating HOLD

Index Details

Sensex 20,377

Nifty 6,063

Industry Finance

Scrip Details

Mkt Cap (Rs Cr) 14,555

Eq Shares O/s (Cr) 151.6

Avg Vol (Lakhs) 7.5

52 Week H/L 165/76

Dividend Yield (%) 2.5

Face Value (Rs) 10.0

Latest shareholding pattern (%)

Promoters - Indian Institutions 31.0 FII’s 51.4 Public 17.6

Total 100.0

Stock performance (%)

1m 3m 6m

IDFC -7.4 -10.6 -9.8 Nifty -1.6 -2.0 9.9 BSE-Bank -6.9 -6.9 5.4



Description Q3FY14 Q3FY13 % Chg. Q3FY14 Q2FY14 % Chg. FY13 FY12 % Chg.

Net Sales 2119.4 2038.7 4.0 2119.4 2145.4 -1.2 8126.8 6330.4 28.4Other operational Income 1.2 3.0 -59.7 1.2 3.1 -61.3 11.8 11.7 0.6

Total Oper. Income(TOI) 2120.6 2041.7 3.9 2120.6 2148.5 -1.3 8138.6 6342.1 28.3

Raw Materials Cons.- - - - - - - - - -

% to TOI - - - - - - - - -

Stock adj. (-)Inc / (+)Dec- - - - - - - - - -

% to TOI - - - - - - - - -

Net Raw Mat adj. for stock 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

% to TOI 0.0 0.0 - 0.0 0.0 - 0.0 0.0 -

Other expenses 82.6 97.0 -14.8 82.6 101.9 -18.9 553.0 462.8 19.5

% to TOI 3.9 4.7 - 3.9 4.7 - 6.8 7.3 -

Contribution Net_Sales 2038.0 1944.7 4.8 2038.0 2046.6 -0.4 7585.6 5879.3 29.0

Personnel 77.5 79.6 -2.7 77.5 77.9 -0.5 291.6 304.9 -4.3

% to TOI 3.7 3.9 - 3.7 3.6 - 3.6 4.8 -

Total expenditure 160.1 176.5 -9.3 160.1 179.7 -10.9 844.6 767.7 10.0

Operating Profit 1960.6 1865.1 5.1 1960.6 1968.8 -0.4 7294.0 5574.4 30.8% to TOI 92.5 91.4 - 92.5 91.6 - 89.6 87.9 -

Non-Operating Income 2.2 5.9 -62.8 2.2 0.6 266.7 9.8 92.9 -89.4

Interest 1268.0 1211.1 4.7 1268.0 1260.4 0.6 4675.8 3456.2 35.3

Exceptional Items 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Gross Profit 694.7 660.0 5.3 694.7 708.9 -2.0 2628.0 2211.1 18.9

Depreciation 7.9 8.6 -8.2 7.9 7.8 1.3 34.4 38.4 -10.5

PBT before Extra-ord 686.8 651.4 5.4 686.8 701.1 -2.0 2593.6 2172.7 19.4

% to TOI 32.4 31.9 - 32.4 32.6 - 31.9 34.3 -

Extraordinary Items - - - - 0.0 0.0 0.0 0.0 0.0

PBT 686.8 651.4 5.4 686.8 701.1 -2.0 2593.6 2172.7 19.4

Tax Rate 26.4 30.2 -12.6 26.4 29.9 -11.7 29.0 28.6 1.2

Prov. for Tax 181.1 196.5 -7.8 181.1 209.9 -13.7 751.1 621.9 20.8

% to TOI 8.5 9.6 - 8.5 9.8 - 9.2 9.8 -

Profit after Tax 505.7 454.9 11.2 505.7 491.2 3.0 1842.4 1550.8 18.8% to TOI 23.8 22.3 - 23.8 22.9 - 22.6 24.5 -

Minority Interest -5.8 -0.4 1337.5 -5.8 -4.9 -18.4 -8.1 1.3 -

PAT (adj. For MI) 500.7 455.1 10.0 500.7 486.8 2.9 1836.2 1554.0 18.2

Face Value 10.0 10.0 - 10.0 10.0 - 10.0 10.0 -

Equity Share capital 1516.2 1514.4 - 1516.2 1516.1 - 1514.7 1512.4 -

EPS (Rs.) 3.3 3.0 11.0 3.3 3.2 3.1 12.2 10.3 18.6

CEPS (Rs.) 3.4 3.1 10.7 3.4 3.3 3.0 12.4 10.5 17.9



Loan Book Trend NII and Non interest Income & Cost/Income Ratio

0

10000

20000

30000

40000

50000

60000

70000

FY

10

FY

11

FY

12

FY

13

Q1F

Y14

Q2F

Y14

Q3F

Y14

Rs.Crore

Loan Book

0%

5%

10%

15%

20%

25%

30%

0

500

1000

1500

2000

2500

3000

FY

09

FY

10

FY

11

FY

12

FY

13

Q1F

Y14

Q2F

Y14

Q3F

Y14

Rs.Crore

NII Non-Interest Income Cost/Income (RHS)

Source: IDFC, Ventura Research Source: IDFC, Ventura Research

Product Wise Cum OS Approvals(Q3FY14) Product Wise Cum OS Disbursements(Q3FY14)

Project Loans49%Corporate

Loans41%

LAS2%

Equity/Pref5%

Non-Funded3%

Project Loans55%

Corporate Loans36%

LAS2%

Equity/Pref4%

Non-Funded3%




Assets Quality Maintained ROA & ROE Trend

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

0%

0%

0%

0%

0%

1%

1%

1%F

Y09

FY

10

FY

11

FY

12

FY

13

Q1F

Y14

Q2F

Y14

Q3F

Y14

NNPL (%) GNPL (%) Loan Loss Reserve (RHS)

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

10.0%

11.0%

12.0%

13.0%

14.0%

15.0%

16.0%

17.0%

FY

09

FY

10

FY

11

FY

12

FY

13

Q1F

Y14

Q2F

Y14

Q3F

Y14

ROE ROA (RHS)


1 Yr Forward P/E 1 Yr Forward P/BV

0

50

100

150

200

250

300

350

400

450

500

Aug-05 Aug-07 Aug-09 Aug-11 Aug-13

CMP 9X 13.64X 18.28X 22.92X 27.56X

0

50

100

150

200

250

300

350

400

450

500

Aug-05 Aug-07 Aug-09 Aug-11 Aug-13

CMP 1X 1.75X 2.5X 3.25X 4X



Punjab National Bank Ltd.

Positive turnaround


Punjab National Bank (PNB) improvement in asset quality, both with lower fresh NPL formations

and lower restructuring was a major positive for the 3rd quarter of FY14. During the quarter, bank’s

NII witnessed a growth of 13.1% YoY to Rs 4221.1 crore. The growth was primarily led by led by 10

bps QoQ improvement in NIMs at 3.6%.

Other income remained flat YoY at Rs 938 crore even as the fees grew 11% YoY and other

miscellaneous income grew by 44% YoY. With significantly higher provisioning at Rs 1600 crore,

net profit was significantly lower at Rs755 crore. PNB has to do full provisions on one Jewelry

sector account, which slipped in Q1FY14. Of the same it has done more than 75% by now. CASA

improved further to 40.4%.

Deposits at the end of quarter amounted to Rs.4,20,647 crore as compared to Rs.3,85,785 crore in

the same quarter of previous year, exhibiting a growth of 9% on YoY basis. Net Advances of the

Bank stood at Rs. 3,26,133 crore, grew by 9.7% YoY. Credit Deposit Ratio stood at 77.5% over the

same period.

The stressed asset addition for the quarter at 1.1% non-annualized was one of the lowest for the

bank since Q2FY12 and was in line with the guidance by the management of moderation in

slippages in H2. Gross NPA ratio reduced to 4.9% during the quarter whereas Net NPA ratio

reduced to 2.8%.

During the quarter, PNB has received bonds worth Rs 2100 crore (conversion from loans) from the

respective state governments under the financial restructuring plan (FRP) and hence the same

have been excluded from loan book. Apart from that, Rs 2800 crore of loans were taken out of

restructuring on basis of RBI guidelines where date of commencement for commercial operations

is extended beyond two years due to lack of clearances. This resulted in significant reduction in

the restructuring book from 11.1% in Q2FY14 to 9.6% in Q3FY14.

During the quarter, the bank has established overseas footprints via 5 Overseas Branches, 3

Subsidiaries, 1 Joint Venture and 5 Rep Offices. It future overseas forays include up gradation of

Recommendation (Rs)

CMP 555 Rating HOLD

Index Details

Sensex 20,377

Nifty 6,063

Industry Banks

Scrip Details

Mkt Cap (Rs cr) 19,646


Avg Vol (Lakhs) 2.2

52 Week H/L 890/402




Promoters 58.8 Indian Institutions 18.5 FII’s 17.5 Public 5.1

Total 100.0


1m 3m 6m

PNB -7.6 2.0 4.3 Nifty -1.6 -2.0 9.9



rep-office at Norway and Australia into branches, and exploring possibilities for presence in Brazil ,

South Africa, Sri Lanka, Canada and Mozambique.

Currently, at the CMP of Rs 555, PNB is valued at 0.53 Adj P/BV on 1 yr forward basis. We

recommend a HOLD on the bank.




Interest Earned 10983.9 10527.3 4.3 10983.9 10733.5 2.3 41893.3 36476.1 14.9Interest on Advances 8246.4 7885.0 4.6 8246.4 8022.8 2.8 31854.6 28435.4 12.0

% of Total Int. Earned 75.1 74.9 - 75.1 74.7 - 76.0 78.0 -

Interest on Balances with RBI 94.9 108.7 -12.7 94.9 100.9 -5.9 324.9 225.0 44.4


Income From Investments 2598.8 2506.6 3.7 2598.8 2568.3 1.2 9530.0 7739.2 23.1


Others 43.7 26.9 62.5 43.7 41.5 5.3 184.0 76.5 140.5


Other Income 938.4 972.0 -3.5 938.4 899.3 4.3 4215.9 4202.6 0.3

Total Income 11922.3 11499.3 3.7 11922.3 11632.8 2.5 46109.3 40678.7 13.3

Interest Expended 6762.8 6795.4 -0.5 6762.8 6718.0 0.7 27036.8 23061.7 17.2

Operating Expenses 2457.2 2021.9 21.5 2457.2 2380.0 3.2 8165.1 7002.8 16.6

Payment to provisions for Employee1758.0 1407.5 24.9 1758.0 1658.7 6.0 5674.7 4723.5 20.1

% of Opt. Expenses 71.5 69.6 - 71.5 69.7 - 69.5 67.5 -

Other Opt. Expenses 699.1 614.5 13.8 699.1 721.3 -3.1 2490.3 2279.3 9.3% of Opt. Expenses 28.5 30.4 - 28.5 30.3 - 30.5 32.5 -

Total Expenses 2457.2 2021.9 21.5 2457.2 2380.0 3.2 8165.1 7002.8 16.6

Operating Profit before prov. & cont.2702.4 2681.9 0.8 2702.4 2534.8 6.6 10907.4 10614.3 2.8


Provisions and Contigencies 1590.0 801.6 98.4 1590.0 1898.7 -16.3 4385.6 3577.3 22.6

PBT 1112.3 1880.3 -40.8 1112.3 636.1 74.9 6521.8 7037.0 -7.3


Tax 356.9 574.7 -37.9 356.9 130.6 173.3 1774.1 2152.8 -17.6

PAT 755.4 1305.6 -42.1 755.4 505.5 49.4 4747.7 4884.2 -2.8


Paid up equity share capital 362.1 339.2 6.7 362.1 353.5 2.4 353.5 339.2 4.2

EPS (Rs.) 20.9 38.5 -45.8 20.9 14.3 46.2 134.3 144.0 -6.7

Capital Adequacy Ratio 11.6 11.7 -4.0 11.6 12.3 -70.0 12.7 12.6 9.0

NII 4221.1 3731.8 13.1 4221.1 4015.5 5.1 14856.5 13414.4 10.8NIM 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Gross NPA 16595.8 13997.8 18.6 16595.8 16526.3 0.4 13465.8 8719.6 54.4

% of Gross NPA 5.0 4.6 35.0 5.0 5.1 -10.0 4.3 2.9 134.0

Net NPA 9084.0 7586.2 19.7 9084.0 9609.0 -5.5 7236.5 4454.2 62.5

% of Net NPA 2.8 2.6 24.0 2.8 3.1 -30.0 2.4 1.5 83.0

ROA(%) 0.6 1.0 -45.0 0.6 0.4 20.0 1.0 1.2 -19.0



Balance Sheet Position as at Q3FY14

Balance Sheet (Rs.Cr) H1FY14 H1FY13

Capital & Liabilities

Capital 362.1 339.2

Employee Stock Options Outstaning 0.0 0.0

Reserves and Surplus 34971.7 31078.5

Deposits 420646.9 385785.1

Borrowings 49163.5 34881.2

Other Liabilities and Provision 16773.5 17928.3

Total 521917.5 470012.3

Assets

Cash and Balances 19771.2 20718.3

Balance With banks 18554.2 7843.3

Investment 143368.5 130487.2

Advances 326133.2 297313.0

Fixed Assets 3409.0 3235.4

Other Assets 10681.4 10415.2

Total 521917.5 470012.3

Source: PNB, Ventura Research

Source: IndusInd, Ventura Research



Moderate growth in deposits remain a concern Loan Portfolio

32

33

34

35

36

37

38

39

40

41

42

-

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

Q4 FY12

Q1 FY13

Q2 FY13

Q3 FY13

Q4 FY13

Q1 FY14

Q2 FY14

Q3 FY14

Rs.Crore

Advance Deposit CASA RHS(%)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Q4 FY12

Q1 FY13

Q2 FY13

Q3 FY13

Q4 FY13

Q1 FY14

Q2 FY14

Q3 FY14

Foreign Mid-Corporate/SME Agriculture Retail

Source: PNB, Ventura Research Source: PNB, Ventura Research

LDR at stable level Incremental LDR (%)

70%

71%

72%

73%

74%

75%

76%

77%

78%

79%

80%

Q4 FY12

Q1 FY13

Q2 FY13

Q3 FY13

Q4 FY13

Q1 FY14

Q2 FY14

Q3 FY14

(%)

LDR Ratio (%)

-100%

-50%

0%

50%

100%

150%

200%

250%

Q3 FY12

Q4 FY12

Q1 FY13

Q2 FY13

Q3 FY13

Q4 FY13

Q1 FY14

Q2 FY14

Q3 FY14

(%)

Incremental LDR Ratio (%)




Revenue Growth (%) Segment Revenue Division

-8.0%

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

Q4 FY12

Q1 FY13

Q2 FY13

Q3 FY13

Q4 FY13

Q1 FY14

Q2 FY14

Q3 FY14

Rs.Crore

NII QoQ Growth (%)

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

Q4 FY12

Q1 FY13

Q2 FY13

Q3 FY13

Q4 FY13

Q1 FY14

Q2 FY14

Q3 FY14

Rs.Crore

Corporate / Wholesale Banking Other Banking

Retail Banking Treasury


Fee income to Advances (%) Yield on Advance , NIM & Cost of Deposits

0.1%

0.2%

0.2%

0.3%

0.3%

0.4%

Q1 FY13 Q2 FY13 Q3 FY13 Q4 FY13 Q1 FY14 Q2 FY14 Q3 FY14

(%)

Fee Income as % of Advances

3.4%

3.5%

3.5%

3.6%

3.6%

3.7%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

Q4 FY12

Q1 FY13

Q2 FY13

Q3 FY13

Q4 FY13

Q1 FY14

Q2 FY14

Q3 FY14

(%)

Yield on Advance Cost of Deposits NIM (RHS)




Cost to Income Ratio raising ahead Asset Quality under pressure

38%

40%

42%

44%

46%

48%

50%

Q1 FY13 Q2 FY13 Q3 FY13 Q4 FY13 Q1 FY14 Q2 FY14 Q3 FY14

(%)

Cost to Income Ratio (%)

50

55

60

65

70

75

80

85

90

0

1

2

3

4

5

6

Q4 FY12

Q1 FY13

Q2 FY13

Q3 FY13

Q4 FY13

Q1 FY14

Q2 FY14

Q3 FY14

(%)

(%)

Gross NPA Net NPA PCR (RHS)


ROA vs ROE (%) Capital Adequacy Ratio (%)

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

5.0

7.0

9.0

11.0

13.0

15.0

17.0

19.0

21.0

23.0

Q4 FY12

Q1 FY13

Q2 FY13

Q3 FY13

Q4 FY13

Q1 FY14

Q2 FY14

Q3 FY14

(%)

ROE ROA (RHS)

11

11.2

11.4

11.6

11.8

12

12.2

12.4

12.6

12.8

0

2

4

6

8

10

12

14

Q4 FY12

Q1 FY13

Q2 FY13

Q3 FY13

Q4 FY13

Q1 FY14

Q2 FY14

Q3 FY14

Tier I Capital Tier II Capital CAR





0

200

400

600

800

1000

1200

1400

1600

Apr-02 Apr-04 Apr-06 Apr-08 Apr-10 Apr-12 Apr-14

CMP 2.8X 4.35X 5.9X 7.45X 9X

0

500

1000

1500

2000

2500

Apr-02 Apr-04 Apr-06 Apr-08 Apr-10 Apr-12 Apr-14

CMP 0.62X 0.95X 1.27X 1.6X 1.93X



Marico Ltd.

Lower ASP spends boost bottom-line


Owing to the lower than expected volume growth (3%) domestically, Marico Ltd.’s (Marico) revenues reported a marginal growth of 3% YoY to Rs 1,198 crore. Nevertheless its EBITDA jumped 22.2% to Rs 201 crore while the consolidated net profit surged 35.5% to Rs 141 crore. The key trigger driving this growth was lower marketing spends at 11.2% (by ~240 bps YoY) and lower operating expenditure (by ~210 bps YoY) at 14.7%. The Marico Group’s net operating margins improved to 16.8% and Marico International’s (IBG) EBITDA margin was 18.1% while Marico India’s (Domestic FMCG) EBITDA was 18.7%, before corporate allocations. Volumes witnessed marginal growth owing to the continued softer consumption trends. However, the company’s market shares have remained intact and in some cases improved, demonstrating strong brand equity. The three core categories of the company, comprising Parachute, Saffola and value-added hair oils, posted volume growth of 2%, 9%, and 8%, respectively. As per the management, growth in Parachute rigid packs were impacted due to the significant price fluctuations in the brand, considering the volatile copra prices. The company has taken almost three to four pricing actions in the brand in the past four months. Overall the price increase in Parachute has been 4-5% YoY, against a 13-14% increase QoQ. However, led by Marico’s strong brands and ability to expand its brand strength to higher growth categories (Saffola to oats, Parachute to higher value added hair oils), we expect a revival in the company’s growth, going ahead. Mass Skin Care grew faster than the category growth, with the market share of Parachute body lotion rising to 6.5%. Youth brands grew 13% YoY to Rs 48 crore, as the company maintained its leadership in Hair Gels (44%) and Post Wash Leave-on conditioner (81%). The Deo market continued to face hyper competition but the company maintained its market share at 5%. Marico expects a growth rate of 20-25%, led by marketing campaigns and new product launches. On the geographical front, the Bangladesh business’ top-line declined by 14% (in constant currency terms). Despite the sales decline, the profits grew by 22%, aided by lower advertisement and sales promotion (ASP) spends during the quarter. The company decided to hold its ASP spends in the light of the overall political environment. However, according to the management, Q4FY14 could see higher ASP levels. Vietnam posted a 25% increase in sales and South Africa grew 5%. MENA grew 10% led by a 22% growth in Egypt, while GCC sales continued to decline. Management commentary of 14% as base margins in IBD is positive for sustaining profitable growth in the coming years.

Recommendation (Rs)

CMP 215 Rating HOLD

Index Details

Sensex 20,377

Nifty 6,063

Industry FMCG

Scrip Details



Avg Vol (Lakhs) 0.31

52 Week H/L 248/188





Total 100.0


1m 3m 6m

Marico -2.9 4.1 -7.0 Nifty

-1.6

-2.0

9.9



During the quarter, the company has ventured into the hair colour category by extending its brand Livon. It has launched ‘Livon Conditioning Cream Colour’ in select cities. It is priced at Rs 39 and is available in three colours with two SKUs. With volume growth in the domestic and international business gaining traction, we expect this to propel growth in Q4FY14 also. However, we believe that the recently effected price increases could arrest the possible fall in its gross margins going forward. At the CMP of Rs. 215, Marico is trading at 29.0x and 25.2x its estimated earnings for FY14E and FY15E. We Recommend a Hold on the Stock.




Net Sales 149.2 123.5 20.8 149.2 150.5 -0.9 474.4 444.8 6.6Other operational Income 1.0 1.1 -6.5 1.0 1.1 -9.1 4.7 3.8 23.3


Raw Materials Cons.- 114.5 93.1 22.9 114.5 118.7 -3.5 367.1 338.7 8.4

% to TOI 76.2 74.8 - 76.2 78.3 - 76.6 75.5 -

Stock adj. (-)Inc / (+)Dec- 0.2 2.0 -88.7 0.2 -4.6 - -2.7 1.8 -

% to TOI 0.1 1.6 - 0.1 -3.0 - -0.6 0.4 -


% to TOI 76.4 76.3 - 76.4 75.3 - 76.1 75.9 -

Other expenses 6.6 5.3 23.9 6.6 8.0 -17.5 21.0 19.6 7.5

% to TOI 4.4 4.3 - 4.4 5.3 - 4.4 4.4 -

Contribution Net_Sales 28.9 24.2 19.4 28.9 29.5 -2.0 93.6 88.5 5.7

Personnel 7.1 5.8 22.1 7.1 6.8 4.4 22.1 19.2 15.4

% to TOI 4.7 4.6 - 4.7 4.5 - 4.6 4.3 -

Total expenditure 128.4 106.2 20.9 128.4 128.9 -0.4 407.5 379.2 7.5


Non-Operating Income 4.2 3.6 15.0 4.2 4.6 -8.7 15.3 12.2 25.2

Interest - 0.1 - - 0.0 0.0 0.2 0.1 87.5

Exceptional Items -1.2 0.0 0.0 -1.2 0.0 - 0.0 0.0 0.0

Gross Profit 27.1 21.9 23.9 27.1 27.3 -0.7 86.7 81.5 6.3

Depreciation 2.2 2.1 5.7 2.2 2.2 0.0 7.2 4.3 68.1

PBT before Extra-ord 22.6 19.8 14.2 22.6 25.0 -9.6 79.5 77.3 2.9

% to TOI 15.0 15.9 - 15.0 16.5 - 16.6 17.2 -

Extraordinary Items - - - - 0.0 - 0.0 0.0 0.0

PBT 22.6 19.8 14.2 22.6 25.0 -9.6 79.5 77.3 2.9

Tax Rate 31.1 30.4 2.3 31.1 31.4 -1.0 30.3 31.6 -4.2

Prov. for Tax 7.0 6.0 16.8 7.0 7.9 -11.4 24.1 24.5 -1.4

% to TOI 4.7 4.8 - 4.7 5.2 - 5.0 5.5 -

Profit after Tax 15.6 13.8 13.0 15.6 17.2 -9.3 55.4 52.8 4.9% to TOI 10.4 11.0 - 10.4 11.3 - 11.6 11.8 -

Face Value 10.0 10.0 - 10.0 10.0 - 10.0 10.0 -


EPS (Rs.) 12.5 11.1 13.0 12.5 13.8 -9.4 44.6 42.5 4.9

CEPS (Rs.) 14.3 12.8 12.0 14.3 15.6 -8.3 50.4 46.0 9.6



Segment Revenue Trend FMCG Business (International Mix)

0

200

400

600

800

1000

1200

Q4F

Y12

Q1F

Y13

Q2F

Y13

Q3F

Y13

Q4F

Y13

Q1F

Y14

Q2F

Y14

Q3F

Y14

Rs.Crore

Domestic International

Bangaldesh44%

MENA21%

SA10%

South East Asia23%

Others4%

Source: Marico, Ventura Research Source: Marico, Ventura Research

Cocchin Oil Price Trend Kardi Oil Price Trend

0

2000

4000

6000

8000

10000

12000

Ju

l-12

Au

g-1

2

Sep

-12

Oct-

12

No

v-1

2

Dec-1

2

Jan

-13

Feb

-13

Mar-

13

Ap

r-13

May-1

3

Ju

n-1

3

Ju

l-13

Au

g-1

3

Sep

-13

Oct-

13

No

v-1

3

Dec-1

3

Rs./kg

Cocchin Oil

es

0

200

400

600

800

1000

1200

1400

1600

1800

Ju

l-12

Au

g-1

2

Sep

-12

Oct-

12

No

v-1

2

Dec-1

2

Jan

-13

Feb

-13

Mar-

13

Ap

r-13

May-1

3

Ju

n-1

3

Ju

l-13

Au

g-1

3

Sep

-13

Oct-

13

No

v-1

3

Dec-1

3

Rs./kg

Kardi Oil

Source: Marico, Ventura Research Source: Marico, Ventura Research



1 Yr Forward PE 1 Yr Forward P/BV

0

200

400

600

800

1000

1200

Mar-02 Mar-04 Mar-06 Mar-08 Mar-10 Mar-12 Mar-14

CMP 6X 8.83X 11X 13.83X 16.66X

0

200

400

600

800

1000

1200


CMP 1.5X 2.125X 2.75X 3.375X 4X

Source: Swaraj Engines, Ventura Research Source: Swaraj Engines, Ventura Research

Source: GAIL, Ventura Research Source: GAIL, Ventura Research

1 Yr Forward EV/EBITDA

0

100

200

300

400

500

600

700

800

900

1000


EV 3X 4.56X 6.12X 7.68X 9.24X

Source: Swaraj Engines, Ventura Research


Godrej Consumer Products Ltd.

Decent Performance

- 21 of 84 - Friday, 7th

February, 2014

During Q3FY14, GCPL reported 16.8% YoY growth in revenues to Rs 1,978.9 crore (v/s Rs 1,693.8

crore). GCPL’s domestic business grew by 12.7% YoY growth (14% ex contract manufacturing)

with HI, Soaps and Hair Colors growing by 8%, 6% and 37% YoY respectively. GCPL’s EBITDA

declined by 110 bps YoY to 15.7% led by an 270 bps increase in raw material cost to 40.4%, due to

increase in palm oil prices and INR depreciation. Consolidated PAT grew by 13.7% YoY at Rs 216

crore as against Rs 190 crore.

Domestic business grew by 12.7% YoY on the back of 8%, 6% and 37% YoY growth in HI, Soaps

and Hair colors segments respectively. Domestic business margins inched up by 50 bps YoY to

18.2%.

- Household Insecticides segment grew by 8% YoY (lower due to high base & seasonal

dynamics) despite the category as a whole declining during the quarter. The category

growth rates were impacted due to poor monsoon in South and East India. According to

the management, the category would revive in Q4FY14 due to a rise in mosquito

infestation on a back of higher temperatures in South and East India. Moreover, during

the quarter, GCPL launched Good Knight Fast Card (paper-based mosquito repellent) at

Re 1 which is performing better than expectations, with demand exceeding supply.

- Hair colors maintained its strong performance with a growth of 37% (ahead of category

growth), led by Godrej Expert Rich Hair Crème and powders portfolio. In our opinion, the

category has significant headroom for growth, given the low penetration rate in the

category. Initiatives such as salon engagement programs and promotions have

continued to deliver healthy results for the company. Secondly, liquid detergents grew

by 36% YoY due to its new television campaign for Ezee.

- Soaps segment grew by 6% YoY during the quarter (volume growth of 6%). The category

witnessed pressure due to the slowdown in mass premium category. Moreover, the

company had to undertake price hikes of ~3-4% due to rising palm oil prices. According

to the management, growth in soap sales v/s de-growth in the category has been due to

Recommendation (Rs)

CMP 728 Rating HOLD

Index Details

Sensex 20,377

Nifty 6,063

Industry FMCG

Scrip Details



Avg Vol (Lakhs) 0.2

52 Week H/L 977/672


Face Value (Rs) 1.0



Total 100.0


1m 3m 6m

GCPL -1.2 -11.7 -14.3 Nifty -1.6 -2.0 9.9 BSE FMCG 0.0 -0.9 0.1



February, 2014

the combination of quality products and execution in terms of marketing distribution.

GCPL’s International business grew by 22% YoY (13% in constant currency terms) on account of

strong sales growth across key geographies, led by a 124%, 29%, 10% and 6% in Europe, Africa,

Latin America and Indonesia, respectively. Revenue from international business, adjusted for

Indonesia food distribution and Rs 8 crore tax reversal in Darling, grew 25%. EBITDA margins for

the region contracted by 250 bps to 12.4% due to divestment of foods business and margin decline

in Indonesia business.

- Indonesia (Megasari) business grew by 6% YoY (12% in constant currency terms) to Rs

343 crore. In Q3FY14, EBITDA margins for the region contracted by 260 bps to 16% due

to ~33% increase in fuel cost, ~60% increase in wage hikes, coupled with rupee

depreciation. The company has planned price hikes to offset the impact of rising cost.

We expect EBITDA margins to see some reprieve compared to Q3FY14 due to the effect

of price hikes. Over the couple of quarters, profitability could be under pressure due to

elections in Indonesia and rise in input costs.

- Africa business (~27.7% of international business revenues) grew by 29% YoY (21%

constant currency terms) to Rs 291 crore due to continuation of strong momentum in

Nigeria and Kenya. During the quarter, EBITDA margins for the region contracted by 280

bps to 18% on account of lower consumer confidence in South Africa. Consumer

spending in the region continued to be muted coupled with down-trading in hair

extensions, which led to an overall margin compression for the region. Depreciation in

ZAR also impacted margins.

- Revenues from LatAm business (~17.1% of international business revenues) grew by

10% YoY (15% in constant currency terms) to Rs 168 crore on the back of continued

marketing investments and new product launches during the quarter. EBITDA margins

for the region expanded 80 bps to 9%. The company launched its new salon range for

Argentina. Margins for the Latin American business have contracted over the last couple

of years due to competitive intensity by SC Johnson and L'Oreal, especially in the

household insecticides category. The management has guided for an improvement in

margins going forward due to marketing initiatives implemented in the market.



February, 2014

- The European business (~15.3% of international business revenues) continued with its

strong performance and grew by 124% (107% in constant currency terms) to Rs 111

crore during the quarter. The business delivered one of its strongest quarters in terms of

organic growth, led by acquisitions. EBITDA margins for the region expanded by 170 bps

to 6% during the quarter.

In our opinion, GCPL’s strong growth trajectory could witness some short term hurdles. Its

domestic business is expected to slow down due to slowdown in soaps and household

insecticides. In soaps, the management expects single-digit growth on account of the unfavourable

environment and higher penetration levels. In household insecticides, due to higher competition in

the high-growth liquids segment, high base effect along with slowdown in consumption, we expect

growth rates to taper. On the international business, the company could continue to show healthy

growth rates on the back of a recovery in Indonesia, further consolidation of existing businesses in

Africa and growing LatAm market. At the CMP of Rs 728, GCPL is trading at a PE multiple of 30.3x

and 25.8x its estimated earnings for FY14E and FY15E. We believe that the current valuations are

rich and recommend investors to BUY ON DECLINES.



February, 2014


Net Sales 9310.1 8375.3 11.2 9310.1 9448.9 -1.5 31297.0 22450.7 39.4Other operational Income 72.0 47.5 51.7 72.0 44.6 61.4 170.5 245.2 -30.5



% to TOI 95.0 92.9 - 95.0 95.1 - 93.1 90.7 -

Stock adj. (-)Inc / (+)Dec- - - - - - - - - -

% to TOI - - - - - - - - -

Net Raw Mat adj. for stock 8917.1 7821.9 14.0 8917.1 9031.6 -1.3 29305.0 20586.7 42.3

% to TOI 95.0 92.9 - 95.0 95.1 - 93.1 90.7 -

Other expenses 104.5 64.4 62.3 104.5 90.0 16.1 281.9 212.2 32.9

% to TOI 1.1 0.8 - 1.1 0.9 - 0.9 1.1 -

Contribution Net_Sales 360.5 536.5 -32.8 360.5 371.9 -3.1 1880.6 1859.0 1.2

Personnel 10.6 7.6 38.8 10.6 8.0 32.5 37.0 29.8 24.4

% to TOI 0.1 0.1 - 0.1 0.1 - 0.1 0.1 -


Operating Profit 349.9 528.9 -33.8 349.9 363.9 -3.8 1843.6 1867.2 -1.3% to TOI 3.7 6.3 - 3.7 3.8 - 5.9 8.1 -

Non-Operating Income 21.6 14.9 44.9 21.6 16.1 34.2 181.7 84.9 114.1

Interest 78.3 29.1 168.7 78.3 38.6 102.8 118.4 177.4 -33.2

Exceptional Items 0.0 0.0 0.0 0.0 0.0 0.0 0.0 38.0 -100.0

Gross Profit 293.3 514.7 -43.0 293.3 341.4 -14.1 1906.9 1736.7 9.8

Depreciation 101.7 47.2 115.7 101.7 59.7 70.4 186.6 184.2 1.3

PBT before Extra-ord 191.6 467.5 -59.0 191.6 281.8 -32.0 1720.3 1552.5 10.8

% to TOI 2.0 5.6 - 2.0 3.0 - 5.5 6.8 -

Extraordinary Items - - - 0.0 0.0 - 0.0 0.0 0.0

PBT 191.6 467.5 -59.0 191.6 281.8 -32.0 1720.3 1552.5 10.8

Tax Rate 29.2 31.9 -8.3 29.2 35.5 -17.7 33.2 31.9 4.1

Prov. for Tax 56.0 149.0 -62.4 56.0 100.0 -44.0 571.0 495.0 15.4

% to TOI 0.6 1.8 - 0.6 1.1 - 1.8 2.2 -

Profit after Tax 135.6 318.5 -57.4 135.6 181.8 -25.4 1149.3 1057.5 8.7% to TOI 1.4 3.8 - 1.4 1.9 - 3.7 4.7 -

Face Value 10.0 10.0 - 10.0 10.0 - 10.0 10.0 -


EPS (Rs.) 1.8 4.2 -57.4 1.8 2.4 -25.0 15.3 14.1 8.7

CEPS (Rs.) 3.2 4.9 -35.1 3.2 3.2 0.0 17.8 16.6 7.6



February, 2014

Domestic business revenue (Quarterly) OPM and Margins (%)

0%

5%

10%

15%

20%

25%

30%

0

200

400

600

800

1000

1200

Q4F

Y12

Q1F

Y13

Q2F

Y13

Q3F

Y13

Q4F

Y13

Q1F

Y14

Q2F

Y14

Q3F

Y14

Rs.Crore

Domestic Sales yoy Growth (RHS)

e

0%

5%

10%

15%

20%

25%

0

50

100

150

200

250

Q4F

Y12

Q1F

Y13

Q2F

Y13

Q3F

Y13

Q4F

Y13

Q1F

Y14

Q2F

Y14

Q3F

Y14

Rs.Crore

EBITDA Margin (RHS)

Source: GCPL, Ventura Research Source: GCPL, Ventura Research

International business revenue (Quarterly) OPM and Margins (%)

0%

10%

20%

30%

40%

50%

60%

70%

80%

0

100

200

300

400

500

600

700

800

900

1000

Q4F

Y12

Q1F

Y13

Q2F

Y13

Q3F

Y13

Q4F

Y13

Q1F

Y14

Q2F

Y14

Q3F

Y14

Rs.Crore

International Sales yoy Growth (RHS)

e

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

0

20

40

60

80

100

120

140

Q4F

Y12

Q1F

Y13

Q2F

Y13

Q3F

Y13

Q4F

Y13

Q1F

Y14

Q2F

Y14

Q3F

Y14

Rs.Crore

EBITDA Margin (RHS)




February, 2014

Domestic business – Soaps volume growth Domestic business – Soaps value growth

0

5

10

15

20

25

30

Q4F

Y12

Q1F

Y13

Q2F

Y13

Q3F

Y13

Q4F

Y13

Q1F

Y14

Q2F

Y14

Q3F

Y14

(%)

Soaps Volume growth

e

0

5

10

15

20

25

30

35

40

45

Q4F

Y12

Q1F

Y13

Q2F

Y13

Q3F

Y13

Q4F

Y13

Q1F

Y14

Q2F

Y14

Q3F

Y14

(%)

Soaps Value growth


Domestic business – Hair Colors revenue growth Domestic business – HI revenue growth

e

0

5

10

15

20

25

30

35

Q4F

Y12

Q1F

Y13

Q2F

Y13

Q3F

Y13

Q4F

Y13

Q1F

Y14

Q2F

Y14

Q3F

Y14

(%)

Hair Colors Value growth

0

5

10

15

20

25

30

35

40

Q4F

Y12

Q1F

Y13

Q2F

Y13

Q3F

Y13

Q4F

Y13

Q1F

Y14

Q2F

Y14

Q3F

Y14

(%)

Household Insecticides Value growth




February, 2014

Africa business revenue Africa business profitability

0%

50%

100%

150%

200%

250%

0

50

100

150

200

250

300

350

Q4F

Y12

Q1F

Y13

Q2F

Y13

Q3F

Y13

Q4F

Y13

Q1F

Y14

Q2F

Y14

Q3F

Y14

Rs.Crore

Revenue yoy Growth (RHS)

e

0%

5%

10%

15%

20%

25%

0.0

10.0

20.0

30.0

40.0

50.0

60.0

Q4F

Y12

Q1F

Y13

Q2F

Y13

Q3F

Y13

Q4F

Y13

Q1F

Y14

Q2F

Y14

Q3F

Y14

Rs.Crore

EBITDA Margin (RHS)


Indonesia business revenue Indonesia business profitability

e

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

0

50

100

150

200

250

300

350

400

Q4F

Y12

Q1F

Y13

Q2F

Y13

Q3F

Y13

Q4F

Y13

Q1F

Y14

Q2F

Y14

Q3F

Y14

Rs.Crore


0%

5%

10%

15%

20%

25%

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

Q4F

Y12

Q1F

Y13

Q2F

Y13

Q3F

Y13

Q4F

Y13

Q1F

Y14

Q2F

Y14

Q3F

Y14

Rs.Crore

EBITDA Margin (RHS)




February, 2014

LatAm business revenue LatAm business profitability

e

0%

20%

40%

60%

80%

100%

120%

0

20

40

60

80

100

120

140

160

180

Q4F

Y12

Q1F

Y13

Q2F

Y13

Q3F

Y13

Q4F

Y13

Q1F

Y14

Q2F

Y14

Q3F

Y14

Rs.Crore


0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

Q4F

Y12

Q1F

Y13

Q2F

Y13

Q3F

Y13

Q4F

Y13

Q1F

Y14

Q2F

Y14

Q3F

Y14

Rs.Crore

EBITDA Margin (RHS)


UK business revenue UK business profitability

0%

20%

40%

60%

80%

100%

120%

140%

0

20

40

60

80

100

120

140

160

Q4F

Y12

Q1F

Y13

Q2F

Y13

Q3F

Y13

Q4F

Y13

Q1F

Y14

Q2F

Y14

Q3F

Y14

Rs.Crore


e

0%

2%

4%

6%

8%

10%

12%

14%

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

Q4F

Y12

Q1F

Y13

Q2F

Y13

Q3F

Y13

Q4F

Y13

Q1F

Y14

Q2F

Y14

Q3F

Y14

Rs.Crore

EBITDA Margin (RHS)




February, 2014


0

5000

10000

15000

20000

25000

30000

35000

40000

45000

Apr-06 Apr-08 Apr-10 Apr-12 Apr-14

EV 12X 15.5X 19X 22.5X 26X

Source: GCPL, Ventura Research


e

0

200

400

600

800

1000

1200

1400


CMP 16X 22X 28X 34X 40X

0

200

400

600

800

1000

1200

1400

1600


CMP 5X 6.5X 8X 9.5X 11X




February, 2014

Financials & Projections

Y/E March, Fig in Rs. Cr FY 2012 FY 2013 FY 2014e FY 2015e Y/E March, Fig in Rs. Cr FY 2012 FY 2013 FY 2014e FY 2015e

Profit & Loss Statement Per Share Data (Rs)

Net Sales 4866.2 6407.4 7604.9 9018.2 EPS 21.4 24.4 24.0 28.2

% Chg. 33.5 31.7 18.7 18.6 Cash EPS 23.2 26.6 26.5 31.1

Total Expenditure 4004.1 5392.3 6306.3 7454.4 DPS 4.5 5.0 5.0 5.0

% Chg. 33.4 34.7 17.0 18.2 Book Value 82.7 97.4 115.5 137.6

EBDITA 862.1 1015.2 1298.6 1563.8 Capital, Liquidity, Returns Ratio

EBDITA Margin % 17.7 15.8 17.1 17.3 Debt / Equity (x) 0.5 0.6 0.6 0.6

Other Income 52.0 67.8 76.0 90.2 Current Ratio (x) 1.4 1.3 1.4 1.4

PBDIT 914.1 1083.0 1374.6 1654.0 ROE (%) 25.8 25.0 20.7 20.5

Depreciation 64.4 77.0 87.4 99.2 ROCE (%) 20.6 19.8 20.9 21.0

Interest 72.6 77.5 152.0 215.3 Dividend Yield (%) 0.6 0.7 0.7 0.7

Exceptional items 200.2 128.9 0.0 0.0 Valuation Ratio (x)

PBT 977.2 1057.4 1135.3 1339.5 P/E 34.0 29.8 30.3 25.8

Tax Provisions 226.1 179.2 238.4 288.0 P/BV 8.8 7.5 6.3 5.3

Minority Interest 24.5 49.3 81.4 93.4 EV/Sales 5.3 4.0 3.4 2.9

Reported PAT 726.7 828.9 815.4 958.1 EV/EBIDTA 30.0 25.4 19.9 16.5

PAT Margin (%) 14.9 12.9 10.7 10.6 Efficiency Ratio (x)

Raw Materials / Sales (%) 52.0 48.5 46.0 47.0 Inventory (days) 58.8 59.6 60.0 60.0

Manpower cost / Sales (%) 8.1 9.2 7.0 7.0 Debtors (days) 35.4 41.5 42.0 42.0

Tax Rate (%) 23.1 17.5 21.0 21.5 Creditors (days) 112.8 121.8 122.0 122.0

Balance Sheet Cash Flow statement

Share Capital 34.0 34.0 34.0 34.0 Profit After Tax 751.2 845.5 896.9 1051.5

Reserves & Surplus 2781.2 3279.0 3895.8 4647.9 Depreciation 64.4 77.0 87.4 99.2

Minority Interest 88.2 209.5 290.9 384.4 Working Capital Changes 224.1 186.9 68.8 94.4

Total Loans 1535.3 1953.7 2357.9 2809.2 Others (177.3) (101.7) (86.4) (72.7)

Deferred Tax Liability 0.0 0.0 0.0 0.0 Operating Cash Flow 1088.5 1186.8 1205.0 1460.4

Total Liabilities 4438.6 5476.3 6578.6 7875.5 Capital Expenditure (156.5) (1,022.2) (310.4) (352.3)

Gross Block 4185.7 5207.9 6245.5 6961.4 Change in Investment -171.4 0.0 0.0 0.0

Less: Acc. Depreciation 494.0 571.0 658.4 757.6 Cash Flow from Investing -850.2 -1022.2 -310.4 -352.3

Net Block 3691.7 4636.9 5587.1 6203.8 Proceeds from equity issue 684.7 0.0 0.0 0.0

Capital Work in Progress 37.6 0.0 0.0 0.0 Increase/(Decrease) in Loans -139.3 418.5 404.1 451.3

Investments 260.5 0.0 0.0 0.0 Dividend and DDT -146.1 -170.1 -170.1 -170.1

Net Current Assets 448.4 825.4 1016.2 1770.6 Cash Flow from Financing -7.2 142.3 -546.5 -569.9

Deferred Tax Assets 0.5 14.0 14.0 14.0 Net Change in Cash 231.1 306.9 348.1 538.1

Misc Expenses 0.0 0.0 0.0 0.0 Opening Cash Balance 216.4 447.5 848.9 1197.0

Total Assets 4438.7 5476.3 6617.3 7988.4 Closing Cash Balance 447.5 848.9 1197.0 1735.1


Navneet Education Ltd.

Lack of government orders marred performance; long term drivers remain intact


Navneet Education Ltd (NEL) reported mixed performance. While the publications revenue de-grew (-4.5% YoY), performance of stationery segment was impressive with 31.8% YoY growth in its top-line. The total revenues grew by 6.4% YoY (Rs 133.1 crore from Rs 125 crore) while PAT grew by 10.1% YoY (Rs 12.4 crore from Rs 11.2 crore). The growth in NEL’s Q3FY14 revenues was primarily led by stationery segment (+31.8% YoY; Rs 52.5 crore v/s Rs 39.8 crore). The company’s EBITDA margins, at 19.6%, expanded by ~130 bps YoY primarily owing to improvement in gross margins (+220 bps YoY), partially offset by rise in employee expenses (+15.2% YoY). Revenues from NEL’s publication segment de-grew by 4.2% YoY (+5.4% in 9MFY14) to Rs 79.6 crore which was primarily due to delay in government orders to the tune of ~Rs 40 crore. In our opinion, the moderation in growth during 9MFY14 was owing to nil government orders for supplementary books (in FY13, it contributed ~Rs 27 crore). However, with visibility on syllabus change in FY15 in Gujarat (~45% of segment revenue) and FY16 in Maharashtra (~55% of segment revenue), we expect growth momentum to pick-up. Moreover, as NEL has completed the content creation for Standard I to VII CBSE textbooks, it plans to market them in states beyond Maharashtra and Gujarat with potential to make it a decent sized sub-segment. In our opinion, if this strategy augurs well for the company, this would lead to additional growth. NEL’s stationery segment grew by 31.8% YoY to Rs 43.9 crore, primarily led by its exports and rupee depreciation. The company’s domestic stationery business continues to face intense competition and is expected to post single digit growth going ahead. EBIT grew by 8x YoY during the quarter owing to part reversal of notional forex loss of ~Rs 3.3 crore on export receivables. We continue to remain bullish on the company on the back of multiple growth drivers viz. proposed common curriculum, geographic expansion and improved visibility in the e-business and stationery (exports) segments. Moreover, we have cautiously not factored ~Rs 750 crore digital learning order received by NPIL from the Directorate of Primary Education, Maharashtra, owing to the uncertainty in the timing of the order. At the CMP of Rs 54, NPIL is trading at 10.4x and 8.4x its estimated earnings for FY14 and FY15, respectively, and we recommend a BUY on the stock, with a target of Rs 77 over a period of 12 months.

Recommendation (Rs)

CMP 54 Rating BUY

Index Details

Sensex 20,377

Nifty 6,063

Industry Education

Scrip Details




52 Week H/L 65/50


Face Value (Rs) 2.0



Total 100.0


1m 3m 6m

Navneet -6.1 2.1 3.7 Nifty -1.6 -2.0 9.9




Net Sales 132.6 124.4 6.6 132.6 143.8 -7.8 789.3 608.6 29.7Other operational Income 0.5 0.1 221.4 0.5 0.2 150.0 1.5 1.1 38.9


Raw Materials Cons.- 101.0 81.3 24.3 101.0 70.9 42.5 424.3 304.7 39.3

% to TOI 75.9 65.3 - 75.9 49.2 - 53.7 50.0 -

Stock adj. (-)Inc / (+)Dec- -43.3 -25.3 71.6 -43.3 -2.2 -1868.2 -42.5 -6.9 515.5

% to TOI -32.6 -20.3 - -32.6 -1.5 - -5.4 -1.1 -


% to TOI 43.4 45.0 - 43.4 47.7 - 48.3 48.8 -

Other expenses 31.9 30.5 4.5 31.9 32.7 -2.4 155.8 120.4 29.4

% to TOI 24.0 24.5 - 24.0 22.7 - 19.7 19.8 -

Contribution Net_Sales 43.5 37.9 14.6 43.5 42.5 2.4 253.2 191.4 32.3

Personnel 17.4 15.1 15.2 17.4 16.0 8.7 62.6 54.1 15.8

% to TOI 13.1 12.1 - 13.1 11.1 - 7.9 8.9 -




Interest 1.1 0.9 29.9 1.1 1.6 -31.3 7.9 5.3 47.2


Gross Profit 25.9 23.0 12.9 25.9 25.6 1.2 186.1 140.6 32.3

Depreciation 5.7 4.9 15.0 5.7 5.4 5.6 20.0 15.1 32.5

PBT before Extra-ord 20.3 18.0 12.4 20.3 20.2 0.5 166.1 125.5 32.3

% to TOI 15.2 14.5 - 15.2 14.0 - 21.0 20.6 -

Extraordinary Items 0.0 0.0 - 0.0 0.0 - 0.0 -3.3 0.0

PBT 20.3 18.0 12.4 20.3 20.2 0.5 166.1 122.3 35.8

Tax Rate 38.9 37.7 3.3 38.9 33.0 17.9 33.1 34.4 -3.6

Prov. for Tax 7.9 6.8 16.0 7.9 6.7 17.9 55.0 42.0 31.0

% to TOI 5.9 5.5 - 5.9 4.6 - 7.0 6.9 -

Profit after Tax 12.4 11.2 10.1 12.4 13.5 -8.1 111.1 80.3 38.4% to TOI 9.3 9.0 - 9.3 9.4 - 14.0 13.2 -

Face Value 2.0 2.0 - 2.0 2.0 - 2.0 2.0 -


EPS (Rs.) 0.5 0.5 10.1 0.5 0.6 -16.7 4.7 3.4 38.4

CEPS (Rs.) 0.8 0.7 11.6 0.8 0.8 0.0 5.5 4.0 37.4



Publication Revenue & Growth Trend Publication EBIT & Margin (%)

-10%

0%

10%

20%

30%

40%

50%

60%

70%

80%

0

50

100

150

200

250

300

Q4F

Y12

Q1F

Y13

Q2F

Y13

Q3F

Y13

Q4F

Y13

Q1F

Y14

Q2F

Y14

Q3F

Y14

Rs.Crore

Publication yoy Growth (RHS)

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

0

20

40

60

80

100

120

Q4F

Y12

Q1F

Y13

Q2F

Y13

Q3F

Y13

Q4F

Y13

Q1F

Y14

Q2F

Y14

Q3F

Y14

Rs.Crore

Publication EBIT EBIT Margin (RHS)

Source: Navneet Education, Ventura Research Source: Navneet Education, Ventura Research

Stationery Product Revenue & Growth Trend Stationery Product EBIT & Margin (%)

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

0

20

40

60

80

100

120

140

160

Q4F

Y12

Q1F

Y13

Q2F

Y13

Q3F

Y13

Q4F

Y13

Q1F

Y14

Q2F

Y14

Q3F

Y14

Rs.Crore

Stationery Products yoy Growth (RHS)

-5%

0%

5%

10%

15%

20%

-5

0

5

10

15

20

25

Q4F

Y12

Q1F

Y13

Q2F

Y13

Q3F

Y13

Q4F

Y13

Q1F

Y14

Q2F

Y14

Q3F

Y14

Rs.Crore

Stationery Products EBIT EBIT Margin (RHS)





0

20

40

60

80

100

120

140

160

Mar-03 Mar-05 Mar-07 Mar-09 Mar-11 Mar-13

CMP 7X 10.25X 13.5X 16.75X 20X

0

20

40

60

80

100

120


CMP 1.6X 2.2X 2.8X 3.4X 4X



0

500

1000

1500

2000

2500

3000

3500

4000


EV 5 6.1X 8X 9.9X 11.8X

Source: Navneet Education, Ventura Research



Financials & Projections

Y/E March, Fig in Rs. Cr FY 2012 FY 2013 FY 2014e FY 2015e Y/E March, Fig in Rs. Cr FY 2012 FY 2013 FY 2014e FY 2015e

Profit & Loss Statement Per Share Data (Rs)

Net Sales 630.0 805.7 937.8 1099.8 EPS 3.3 4.5 5.2 6.4

% Chg. 12.3 27.9 16.4 17.3 Cash EPS 4.0 5.5 6.3 7.6

Total Expenditure 498.7 614.4 718.5 835.4 DPS 1.4 1.8 1.8 1.8

% Chg. 12.2 23.2 16.9 16.3 Book Value 15.2 17.6 20.7 25.1

EBDITA 131.4 191.3 219.3 264.4 Capital, Liquidity, Returns Ratio

EBDITA Margin % 20.8 23.7 23.4 24.0 Debt / Equity (x) 0.4 0.4 0.4 0.3

Other Income 11.2 3.7 4.0 4.2 Current Ratio (x) 5.6 4.1 4.3 4.7

PBDIT 142.6 194.9 223.3 268.6 ROE (%) 21.6 25.8 25.1 25.5

Depreciation 17.1 23.5 25.8 28.4 ROCE (%) 25.1 29.4 29.3 30.6

Interest 5.8 7.9 8.6 8.0 Dividend Yield (%) 2.5 3.2 3.2 3.2

Exceptional items 0.0 0.0 0.0 0.0 Valuation Ratio (x)

PBT 119.7 163.6 188.9 232.2 P/E 17.4 12.6 10.9 8.9

Tax Provisions 42.0 55.0 64.2 78.9 P/BV 3.8 3.2 2.7 2.3

Minority Interest -0.3 0.6 0.6 0.6 EV/Sales 2.4 1.9 1.6 1.4

Reported PAT 78.0 107.9 124.1 152.6 EV/EBIDTA 11.4 7.8 6.8 5.6

PAT Margin (%) 12.4 13.4 13.2 13.9 Efficiency Ratio (x)

Material cost / Sales (%) 48.6 47.4 47.6 47.2 Inventory (days) 259.3 263.0 265.0 265.0

Manpower cost / Sales (%) 9.7 9.0 8.9 8.7 Debtors (days) 67.4 75.2 80.0 80.0

Creditors (days) 57.3 62.0 65.0 65.0

Balance Sheet Cash Flow statement

Share Capital 47.6 48.0 48.0 48.0 Profit After Tax 77.7 108.6 124.7 153.2

Reserves & Surplus 313.8 371.2 446.0 549.3 Depreciation 17.1 23.5 25.8 28.4

Minority Interest -0.6 0.1 0.7 1.3 Working Capital Changes (89.0) (94.5) (75.9) (77.0)

Total Loans 139.9 163.9 178.2 187.0 Others (39.0) (52.1) (60.7) (75.9)

Deferred Tax Liability 0.0 0.0 0.0 0.0 Operating Cash Flow 7.7 40.4 78.1 107.6

Total Liabilities 500.7 583.1 672.8 785.6 Capital Expenditure (49.9) (12.1) (34.0) (37.3)

Gross Block 297.5 339.5 373.5 410.8 Change in Investment -0.6 -9.0 0.0 0.0

Less: Acc. Depreciation 136.2 159.6 185.4 213.8 Cash Flow from Investing -46.4 -16.1 -29.0 -32.3

Net Block 161.3 176.5 188.0 197.0 Interest -5.8 -7.0 -7.0 -7.0

Capital Work in Progress 3.4 3.4 3.4 3.4 Increase/(Decrease) in Loans 76.9 24.0 14.3 8.8

Investments 0.6 31.0 31.0 31.0 Dividend and DDT -44.4 -49.9 -49.9 -49.9

Net Current Assets 340.1 377.1 455.2 559.0 Cash Flow from Financing 32.5 -25.9 -35.6 -41.1

Deferred Tax Assets (4.5) (4.8) (4.8) (4.8) Net Change in Cash -6.2 -1.6 13.6 34.2

Misc Expenses 0.0 0.0 0.0 0.0 Opening Cash Balance 11.3 5.1 3.5 17.0

Total Assets 500.7 583.1 672.8 785.5 Closing Cash Balance 5.1 3.5 17.0 51.2


Oriental Carbon & Chemicals Ltd.

Lower tax rate drives bottom-line


For the 3rd quarter of FY14, Oriental Carbon and Chemicals Ltd. (OCCL)’s reported robust

performance with its net profit growing by 199.2% YoY to Rs 13.5 crore. Bottom line growth was

primarily owing to gross margin expansion and lower tax rate Over the same period, its net sales

and EBITDA registered growth of 18% and 53% to Rs 63.7 crore and Rs 19.5 crore, respectively.

Tax provisioning was lower by 61.8% in Q3FY14 as company took the advantage of MAT Credit

entitlement. EBITDA margin improved by 700 bps for the current quarter stood at 30.6% as

compared to 23.6% posted in same period last year.

The company has suspended operations of its SEZ Unit located at Mundra recently and it plans to

approach the apex court shortly seeking necessary redressal. The company has taken this step

after the Gujarat High Court pronounced an order on Jan’14 in a PIL against Adani Ports and

Special Economic Zone (APSEZ), Mundra, Kutch district and all manufacturing units therein where

the company has its SEZ Unit to temporarily stop operations till the APSEZ receives environmental

clearance from the Ministry of Environment & Forest (MoEF).

At the CMP of Rs. 139, OCCL is trading at 3.4x and 3.2x its FY14E and FY15E consensus earnings,

respectively. Given the legal dispute volume growth could come under pressure. We recommend a

HOLD on the stock.

Recommendation (Rs)

CMP 139 Rating HOLD

Index Details

Sensex 20,377

Nifty 6,063

Industry Chemical

Scrip Details

Mkt Cap (Rs cr) 143


Avg Vol (Lakhs) 0.2

52 Week H/L 145/75





Total 100.0


1m 3m 6m

OCCL 9.8 11.6 62.3 Nifty -1.6 -2.0 9.9




Net Sales 63.7 53.9 18.2 63.7 65.3 -2.5 224.8 216.3 3.9Other operational Income 0.2 0.3 -44.6 0.2 0.0 - 0.6 1.5 -58.3


Raw Materials Cons.- 16.4 19.3 -15.0 16.4 14.9 10.1 74.3 72.9 2.0

% to TOI 25.6 35.5 - 25.6 22.9 - 33.0 33.5 -

Stock adj. (-)Inc / (+)Dec- -2.3 -2.3 -1.4 -2.3 1.2 - -7.5 -1.9 287.7

% to TOI -3.5 -4.2 - -3.5 1.8 - -3.3 -0.9 -

Net Raw Mat adj. for stock 14.1 17.0 -16.8 14.1 16.1 -12.4 66.8 70.9 -5.8

% to TOI 22.1 31.3 - 22.1 24.6 - 29.6 32.6 -

Other expenses 24.4 19.1 27.9 24.4 30.3 -19.5 80.3 73.1 9.8

% to TOI 38.2 35.2 - 38.2 46.3 - 35.6 33.6 -


Personnel 5.8 5.4 8.2 5.8 6.0 -3.3 20.8 18.0 15.4

% to TOI 9.1 10.0 - 9.1 9.2 - 9.2 8.3 -


Operating Profit 19.5 12.8 52.9 19.5 13.0 50.0 57.5 55.7 3.2% to TOI 30.6 23.6 - 30.6 19.8 - 25.5 25.6 -

Non-Operating Income 0.8 1.0 -24.4 0.8 1.3 -38.5 4.9 4.2 16.6

Interest 2.8 3.2 -12.7 2.8 2.8 0.0 12.8 8.3 53.7


Gross Profit 17.5 10.6 65.1 17.5 11.4 53.5 49.7 51.6 -3.8

Depreciation 2.7 2.5 4.4 2.7 2.7 0.0 9.6 7.1 35.0

PBT before Extra-ord 14.9 8.1 84.1 14.9 8.8 69.3 40.0 44.5 -10.0

% to TOI 23.3 14.9 - 23.3 13.4 - 17.8 20.4 -

Extraordinary Items 0.0 0.0 - 0.0 0.0 - 0.0 0.0 -

PBT 14.9 8.1 84.1 14.9 8.8 69.3 40.0 44.5 -10.0

Tax Rate 9.2 44.1 -79.2 9.2 10.9 -15.6 31.6 29.3 7.8

Prov. for Tax 1.4 3.6 -61.8 1.4 1.0 40.0 12.7 13.0 -3.0

% to TOI 2.1 6.6 - 2.1 1.5 - 5.6 6.0 -

Profit after Tax 13.5 4.5 199.2 13.5 7.8 73.1 27.4 31.5 -12.9% to TOI 21.2 8.3 - 21.2 12.0 - 12.1 14.4 -

Face Value 10.0 10.0 - 10.0 10.0 - 10.0 10.0 -


EPS (Rs.) 13.1 4.4 199.2 13.1 7.6 72.4 26.6 30.5 -12.9

CEPS (Rs.) 15.7 6.8 129.1 15.7 10.2 53.9 35.9 37.4 -4.1



Revenue & Profitability Yearly Trend Revenue & Profitability Quarterly Trend

0%

5%

10%

15%

20%

25%

30%

35%

0

50

100

150

200

250

FY

08

FY

09

FY

10

FY

11

FY

12

FY

13

Rs.Crore

Revenue EBITDA Margin (RHS) PAT Margin (RHS)

0%

5%

10%

15%

20%

25%

30%

35%

0

10

20

30

40

50

60

70

Q3F

Y12

Q4F

Y14

Q1F

Y13

Q2F

Y13

Q3F

Y13

Q4F

Y13

Q1F

Y14

Q2F

Y14

Q3F

Y14

Rs.Crore


Source: OCCL, Ventura Research Source: OCCL, Ventura Research

P/E band chart P/B band chart

0

50

100

150

200

250

300

350

400

450


CMP 2X 4X 6X 8X 10X

0

20

40

60

80

100

120

140

160

180

200


CMP 0.3X 0.43X 0.56X 0.69X 0.82X

Source: OCCL, Ventura Research Source: OCCL, Ventura Research


Petronet LNG Ltd

Delay in Kochi-Mangalore pipeline hits the bottom line


For the 3rd quarter of FY14, Petronet LNG Ltd. (PLNG) reported disappointing numbers owing to the

sharp fall in utilisation rate at Dahej terminal and losses at Kochi terminal (Rs 100 crore). The

company’s bottom line witnessed a sharp decline of 57% to Rs 135 crore due to the lower capacity

utilization along with high depreciation (+28% YOY) and interest charges (+22% YoY) on the new

Kochi terminal. Over the same period, its top-line reported a growth of 26% YoY, backed by the

rupee depreciation and an increase in LNG prices. The EBITDA declined 33.8% YoY to Rs 349

crore, led by lower volumes and higher expenses at Kochi.

Over the same period, volume (including Kochi) declined 12% YoY (0.5% QoQ) to 123.6 tbtu owing to the lower spot and long term volume. Further, calculated margin from spot/short term cargoes declined 43% YoY to Rs43/mmbtu in Q3FY14. Higher spot LNG prices (currently trading at ~US$18/mmbtu) led by severe cold weather in Western region are affecting PLNG's volume and margin. At Dahej, utilization level was just at 96% against FY13 average of 105% and Kochi’s utilization level stood at just 5%. Lower run rate for Kochi is majorly impacted by delay in Kochi-Mangalore pipeline, which is likely to take another year to complete.

The expansion on the Dahej is likely to be complete by Nov’16, increasing it from 10 mmt to 15 mmt and the company was recently awarded EPC contracts. Also, second Jetty is likely to commence operations from April 2014 which is likely to increase its capacity by 0.5-1 mmt. The company has signed use or pay contract with GAIL/IOC/GSPC/BPCL for 2.5/1.5/1.25/1.0 mmt for its Dahej expanded capacity and PLNG will receive Rs 200 crore for each 1 mmt contract. Additionally, the company is planning to a third terminal at Gangavaram in Andhra Pradesh by 2017.

Due to commencement of Kochi terminal in September 2013, the company's depreciation and interest cost increased significantly (up 116% and 169% YoY) to Rs 100 crore and Rs 78.3 crore, respectively. Total interest and depreciation from Kochi terminal stood at Rs 110 crore in Q3FY14.

Currently at the CMP of Rs 118, Petronet LNG is trading at 12.0x and 10.7x its estimated earnings

for FY14E and FY15E, respectively. We recommend a HOLD on the stock.

Recommendation (Rs)

CMP 118 Rating HOLD

Index Details

Sensex 20,377

Nifty 6,063

Industry Oil & Gas

Scrip Details



Avg Vol (Lakhs) 1.2

52 Week H/L 156/102





Total 100.0


1m 3m 6m

Petronet -2.7 -6.3 0.4 Nifty -1.6 -2.0 9.9 BSE-Oil

-0.9 -4.5 -0.4




Net Sales 9310.1 8375.3 11.2 9310.1 9448.9 -1.5 31297.0 22450.7 39.4Other operational Income 72.0 47.5 51.7 72.0 44.6 61.4 170.5 245.2 -30.5



% to TOI 95.0 92.9 - 95.0 95.1 - 93.1 90.7 -

Stock adj. (-)Inc / (+)Dec- - - - - - - - - -

% to TOI - - - - - - - - -


% to TOI 95.0 92.9 - 95.0 95.1 - 93.1 90.7 -

Other expenses 104.5 64.4 62.3 104.5 90.0 16.1 281.9 212.2 32.9

% to TOI 1.1 0.8 - 1.1 0.9 - 0.9 1.1 -


Personnel 10.6 7.6 38.8 10.6 8.0 32.5 37.0 29.8 24.4

% to TOI 0.1 0.1 - 0.1 0.1 - 0.1 0.1 -


Operating Profit 349.9 528.9 -33.8 349.9 363.9 -3.8 1843.6 1867.2 -1.3% to TOI 3.7 6.3 - 3.7 3.8 - 5.9 8.1 -


Interest 78.3 29.1 168.7 78.3 38.6 102.8 118.4 177.4 -33.2

Exceptional Items 0.0 0.0 0.0 0.0 0.0 0.0 0.0 38.0 -100.0

Gross Profit 293.3 514.7 -43.0 293.3 341.4 -14.1 1906.9 1736.7 9.8

Depreciation 101.7 47.2 115.7 101.7 59.7 70.4 186.6 184.2 1.3


% to TOI 2.0 5.6 - 2.0 3.0 - 5.5 6.8 -


PBT 191.6 467.5 -59.0 191.6 281.8 -32.0 1720.3 1552.5 10.8

Tax Rate 29.2 31.9 -8.3 29.2 35.5 -17.7 33.2 31.9 4.1

Prov. for Tax 56.0 149.0 -62.4 56.0 100.0 -44.0 571.0 495.0 15.4

% to TOI 0.6 1.8 - 0.6 1.1 - 1.8 2.2 -


Face Value 10.0 10.0 - 10.0 10.0 - 10.0 10.0 -


EPS (Rs.) 1.8 4.2 -57.4 1.8 2.4 -25.0 15.3 14.1 8.7

CEPS (Rs.) 3.2 4.9 -35.1 3.2 3.2 0.0 17.8 16.6 7.6



Revenue Profitability Yearly Trend Revenue Profitability Quarterly Trend

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

FY

10

FY

11

FY

12

FY

13

FY

14E

FY

15E

(%)

Rs.Crore


0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

Q4F

Y12

Q1F

Y13

Q2F

Y13

Q3F

Y13

Q4F

Y13

Q1F

Y14

Q2F

Y14

Q3F

Y14

(%)

Rs.Crore


Source: PNG, Ventura Research Source: PNG, Ventura Research

Gas regasification volume trend Net regasification margin trend

0

20

40

60

80

100

120

140

160

Q4F

Y12

Q1F

Y13

Q2F

Y13

Q3F

Y13

Q4F

Y13

Q1F

Y14

Q2F

Y14

Q3F

Y14

In tbtu

Sales Regasification Services

36.641.5 44.3 43 43

37.4 37.6 37.6

0

5

10

15

20

25

30

35

40

45

50

Q4F

Y12

Q1F

Y13

Q2F

Y13

Q3F

Y13

Q4F

Y13

Q1F

Y14

Q2F

Y14

Q3F

Y14

(mmbtu)

Regasification Margin





-50

0

50

100

150

200

250

300

350


CMP 7X 10X 13X 16X 19X

0

50

100

150

200

250

300

350

400


CMP 1.5X 2.3X 3.1X 3.9X 4.7X


Trading & Spot Volumes trend Marketing Margin Trend

0

5

10

15

20

25

30

35

110

115

120

125

130

135

140

145

Q4F

Y12

Q1F

Y13

Q2F

Y13

Q3F

Y13

Q4F

Y13

Q1F

Y14

Q2F

Y14

Q3F

Y14

tbtu

Total Volume in tbtu Spot Volumes in tbtu (RHS)

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

Q4F

Y12

Q1F

Y13

Q2F

Y13

Q3F

Y13

Q4F

Y13

Q1F

Y14

Q2F

Y14

Q3F

Y14

$/mmbtu

Marketing Margin Trend





0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000


EV 6X 8.5X 11X 13.5X 16X

Source: PNG, Ventura Research


Grasim Industries Ltd

Margin of VSF business impacted


After showing encouraging signs of turnaround in Q2FY14, Grasim Industries Ltd (GIL) results in

Q3FY14 were a mixed bag where revenue came in line with street expectation, while EBITDA and

PAT were below estimates. The company’s revenue reported a growth of 5% to Rs 7066 crore in

Q3FY14. EBITDA margin contracted 470 bps while PAT was down 40% YoY to Rs 468 crore owing

to the dismal profits from VSF (Viscose Staple Fibre) and wood pulp business despite higher

volume (4.3%). Impacted by the increase in imported pulp prices and rupee depreciation. Cement

business margin was also down to 11.4% in Q3FY14 compared to 16.4% in Q3FY13 due to lower

realisation and rising freight costs.

The company plans to commission VSF capacity of 120 ktpa at Vilayat, Gujarat in a phased manner

where 50% would start in Q4FY14 and rest in Q1FY15. Also, the company is planning to add nearly

15mtpa of cement capacity by FY16 with an investment of Rs72 bn including grinding capacity at

Raipur (4.8mtpa), Malkhed (4.4mtpa) and Shambhupura (2.9mtpa) which would augment to its total

cement capacity to 70mtpa. The company expects VSF prices to remain under pressure due to

over-capacity in China.

With lower treasury gains (other income -48% YoY) on FMPs and significantly high tax rate, net

profit declined. Tax rate at 28% for the quarter jumped 2230 bps QoQ as delayed commissioning of

Vilayat Greenfield plant meant that the company’s expected benefits of Investment allowance

deduction (introduced in union budget 2014 and factored in to company’s earlier FY14 tax rate

guidance of <10%) has been deferred to FY15. Consequently Grasim had to provide for taxes even

for the earlier under provided H1FY14. Depreciation jumped 38% YoY led by commissioning of

Vilayat Chemical & Epoxy plant.

On the demand front, construction activities have failed to pick up during state elections and

chances of a demand revival before H2FY15 appear minimal. However, Q4FY14 could see some

improvement in demand on back of pre‐election spending, rush to complete existing construction

activity in a bid to bag new contracts next fiscal and rural demand picking up on back of good

winter harvest.

Recommendation (Rs)

CMP 2550 Rating BUY

Index Details

Sensex 20,377

Nifty 6,063

Industry Diversified

Scrip Details



Avg Vol (Lakhs) 0.2

52 Week H/L 3,159/2,121





Total 100.0


1m 3m 6m

Grasim -2.4 -5.0 6.2 Nifty -1.6 -2.0 9.9



As per the management, the performance of cement business should improve with the expected

recovery post general elections in India and of VSF business based on global rebalancing of

excess capacity. The commissioning of major projects by the company will help improve volume

and profitability. GIL could benefit out of volume growth over the next 2 years due to its VSF and

cement (UTCL) capacities going on stream. At the CMP of Rs 2550, Grasim is trading at 10.1x and

8.8x its estimated earnings for FY14E and FY15E and we recommend a BUY on the stock.




Net Sales 7066.6 6729.2 5.0 7066.6 6800.8 3.9 27639.7 24983.6 10.6Other operational Income 53.8 50.4 6.9 53.8 47.9 12.3 264.6 261.3 1.3

Total Oper. Income(TOI) 7120.5 6779.5 5.0 7120.5 6848.7 4.0 27904.3 25244.9 10.5


% to TOI 24.8 23.3 - 24.8 25.0 - 22.0 21.2 -

Stock adj. (-)Inc / (+)Dec- 5.1 -206.7 - 5.1 -32.7 - -196.3 -85.8 128.7

% to TOI 0.1 -3.0 - 0.1 -0.5 - -0.7 -0.3 -


% to TOI 24.9 20.2 - 24.9 24.6 - 21.3 20.9 -

Other expenses 3848.4 3654.0 5.3 3848.4 3629.4 6.0 14363.2 13014.2 10.4

% to TOI 54.0 53.9 - 54.0 53.0 - 51.5 51.6 -


Personnel 462.4 447.6 3.3 462.4 503.3 -8.1 1670.6 1377.8 21.3

% to TOI 6.5 6.6 - 6.5 7.3 - 6.0 5.5 -

Total expenditure 6083.0 5472.8 11.1 6083.0 5814.5 4.6 21980.7 19665.8 11.8

Operating Profit 1037.5 1306.7 -20.6 1037.5 1034.2 0.3 5923.6 5579.1 6.2% to TOI 14.6 19.3 - 14.6 15.1 - 21.2 22.1 -

Non-Operating Income 105.7 177.9 -40.6 105.7 109.2 -3.2 619.5 741.5 -16.5

Interest 124.9 82.3 51.8 124.9 119.3 4.7 324.1 314.0 3.2


Gross Profit 1018.3 1402.4 -27.4 1018.3 1024.1 -0.6 6014.6 6006.6 0.1

Depreciation 366.7 319.1 14.9 366.7 357.7 2.5 1252.1 1154.4 8.5


% to TOI 9.2 16.0 - 9.2 9.7 - 18.5 19.2 -


PBT 651.7 1083.3 -39.8 651.7 666.3 -2.2 5171.4 4852.2 6.6

Tax Rate 28.2 28.0 0.7 28.2 18.6 51.6 28.4 27.2 4.2

Prov. for Tax 183.6 303.0 -39.4 183.6 124.0 48.1 1467.2 1320.8 11.1

% to TOI 2.6 4.5 - 2.6 1.8 - 5.3 5.2 -


Minority Interest -160.9 -244.5 -34.2 -160.9 -114.5 -40.5 -1073.4 -947.1 13.3

PAT (adj. For MI) 331.9 549.2 -39.6 331.9 450.3 -26.3 2704.4 2647.5 2.2

Face Value 10.0 10.0 - 10.0 10.0 - 10.0 10.0 -


EPS (Rs.) 51.0 85.0 -40.1 51.0 59.1 -13.7 403.5 385.0 4.8

CEPS (Rs.) 90.9 119.8 -24.1 90.9 98.0 -7.2 539.9 510.9 5.7



Sales Volume & Realizations Cement Sales Volumes & Realization

114

116

118

120

122

124

126

128

130

0

20

40

60

80

100

120

Q4F

Y12

Q1F

Y13

Q2F

Y13

Q3F

Y13

Q4F

Y13

Q1F

Y14

Q2F

Y14

Q3F

Y14

Sales Volume (LHS) Realizations (RHS))

In KTA Rs per kg

0

1000

2000

3000

4000

5000

6000

0

2

4

6

8

10

12

14

Q4F

Y12

Q1F

Y13

Q2F

Y13

Q3F

Y13

Q4F

Y13

Q1F

Y14

Q2F

Y14

Q3F

Y14

Cement Sales Volumes (LHS) Realization (RHS)

In Mn tonnes Rs per MT

Source: Grasim, Ventura Research Source: Grasim, Ventura Research

Cement Segment Revenue Trend Cement EBIT & Margin Trend

-5%

0%

5%

10%

15%

20%

4,200

4,400

4,600

4,800

5,000

5,200

5,400

5,600

5,800

6,000

Q4F

Y12

Q1F

Y13

Q2F

Y13

Q3F

Y13

Q4F

Y13

Q1F

Y14

Q2F

Y14

Q3F

Y14

Rs.Crore

Cement yoy Growth (RHS)

0%

5%

10%

15%

20%

25%

0.00

200.00

400.00

600.00

800.00

1,000.00

1,200.00

Q4F

Y12

Q1F

Y13

Q2F

Y13

Q3F

Y13

Q4F

Y13

Q1F

Y14

Q2F

Y14

Q3F

Y14

Rs.Crore

Cement EBIT EBIT Margin (%)




Chemical Segment Revenue Trend Chemical EBIT & Margin Trend

-10%

0%

10%

20%

30%

40%

50%

60%

190

200

210

220

230

240

250

260

270

Q4F

Y12

Q1F

Y13

Q2F

Y13

Q3F

Y13

Q4F

Y13

Q1F

Y14

Q2F

Y14

Q3F

Y14

Rs.Crore

Chemical yoy Growth (RHS)

0%

5%

10%

15%

20%

25%

30%

0

10

20

30

40

50

60

70

Q4F

Y12

Q1F

Y13

Q2F

Y13

Q3F

Y13

Q4F

Y13

Q1F

Y14

Q2F

Y14

Q3F

Y14

Rs.Crore

Chemical EBIT EBIT Margin (%)


Fibre & Pulp Segment Revenue Trend Fibre & Pulp EBIT & Margin Trend

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

Q4F

Y12

Q1F

Y13

Q2F

Y13

Q3F

Y13

Q4F

Y13

Q1F

Y14

Q2F

Y14

Q3F

Y14

Rs.Crore

Fibre & Pulp yoy Growth (RHS)

0%

5%

10%

15%

20%

25%

0

50

100

150

200

250

Q4F

Y12

Q1F

Y13

Q2F

Y13

Q3F

Y13

Q4F

Y13

Q1F

Y14

Q2F

Y14

Q3F

Y14

Rs.Crore

Fibre & Pulp EBIT EBIT Margin (%)




Viscose Staple Fibre Sales Volume & Production Chemical Sales Volume & Production

0

20000

40000

60000

80000

100000

120000

Q4F

Y12

Q1F

Y13

Q2F

Y13

Q3F

Y13

Q4F

Y13

Q1F

Y14

Q2F

Y14

Q3F

Y14

MT

Production Sales Voulmes

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

Q4F

Y12

Q1F

Y13

Q2F

Y13

Q3F

Y13

Q4F

Y13

Q1F

Y14

Q2F

Y14

Q3F

Y14

MT

Production Sales Voulmes


PSF , VSF & Cotton Price Trend

0.0

20.0

40.0

60.0

80.0

100.0

120.0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

Jan

-12

Mar-

12

May-1

2

Ju

l-12

Sep

-12

No

v-1

2

Jan

-13

Mar-

13

May-1

3

Ju

l-13

Sep

-13

No

v-1

3

Jan

-14

US

/cen

t

US$Kg

PSF VSF Cotton (RHS)

Source: Grasim, Ventura Research




0

1000

2000

3000

4000

5000

6000


CMP 5X 6.75X 8.5X 10.25X 12X

0

1000

2000

3000

4000

5000

6000

7000

8000


CMP 1X 1.35X 1.7X 2.05X 2.4X



0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000


EV 2X 3.9X 5.8X 7.7X 9.6X

Source: Grasim, Ventura Research


Divi's Laboratories Ltd

Higher capacity utilization drives growth


In Q3FY14, Divi’s Laboratories Ltd (Divi’s) reported healthy numbers with its revenues witnessing a

growth of 29% YoY to Rs 687 crore driven by higher capacity utilisation at the DSN SEZ and strong

volume growth in APIs besides currency benefit. Operating margins has also improved to 41.7%

due to lower other expenses led by the tight control, lower freight and power cost. Net Profit

witnessed a growth of 52% to Rs 219 crore.

Current capacity utilisation at the DSN SEZ facility is 55-60%. The management expects USFDA

inspection of the remaining three units (out of five) either in Q4 or Q1FY15. By H2FY15, these units

are likely to see a considerable improvement in capacity utilisation on the back of US traction

(subject to USFDA approval). Currently, the company is shipping intermediates and other products

to emerging markets. Till date, the company has capitalised Rs 275 crore of capex with the

remaining ~Rs 75 crore likely to be capitalised in FY15.

With the commercialization of more units at DSN SEZ, management expects ramp-up in revenue. It

guided for revenue growth of 20-25%, with an EBIDTA margin of ~40% for FY15E. Management

expects new capacity to drive growth.

Sales from the Carotenoid business stood at Rs 30 crore, up 62% YoY aided by the incremental product launches. The management has guided at Carotenoid sales of Rs 130 crore in FY14 and Rs 150-200 crore in FY15. We expect the company to be the key beneficiary of enhanced outsourcing opportunities triggered

by its expertise in complex chemistry, cost-efficient processes and strong relationship with

innovators. Additionally regulatory approval for DNS Vizag’s 3 blocks remains the key trigger. At

the CMP of Rs. 1385 the stock is trading at 22.9x and 19.4x its estimated earnings for FY14E and

FY15E and we recommend a BUY on the stock.

Recommendation (Rs)

CMP 1385 Rating BUY

Index Details

Sensex 20,377

Nifty 6,063

Industry Pharma

Scrip Details



Avg Vol (Lakhs) 0.4

52 Week H/L 1,390/905


Face Value (Rs) 2.0



Total 100.0


1m 3m 6m

Divi’s 12.5 38.3 46.9 Nifty -1.6 -2.0 9.9 BSE Pharma 12.5 38.3 46.9




Net Sales 687.4 533.3 28.9 687.4 565.9 21.5 2124.0 1839.5 15.5Other operational Income 1.9 1.0 80.6 1.9 1.1 72.7 4.9 5.4 -9.2


Raw Materials Cons.- 244.7 260.8 -6.2 244.7 281.5 -13.1 897.9 771.8 16.3

% to TOI 35.5 48.8 - 35.5 49.6 - 42.2 41.8 -

Stock adj. (-)Inc / (+)Dec- 11.5 -39.7 - 11.5 -101.3 - -100.3 -10.7 841.2

% to TOI 1.7 -7.4 - 1.7 -17.9 - -4.7 -0.6 -


% to TOI 37.2 41.4 - 37.2 31.8 - 37.5 41.3 -

Other expenses 88.1 85.5 3.1 88.1 81.9 7.6 318.4 243.8 30.6

% to TOI 12.8 16.0 - 12.8 14.4 - 15.0 13.2 -


Personnel 57.1 45.5 25.4 57.1 56.2 1.6 191.2 145.2 31.7

% to TOI 8.3 8.5 - 8.3 9.9 - 9.0 7.9 -




Interest 0.4 0.4 -20.5 0.4 0.4 0.0 1.8 3.7 -52.4

Exceptional Items 5.3 0.0 0.0 5.3 0.0 - 0.0 0.0 0.0

Gross Profit 295.4 204.2 44.6 295.4 284.9 3.7 868.5 756.9 14.7

Depreciation 23.3 20.4 14.3 23.3 22.5 3.6 76.9 62.0 24.0


% to TOI 39.5 34.4 - 39.5 46.3 - 37.2 37.7 -

Extraordinary Items - - - 0.0 0.0 - 0.0 0.0 -

PBT 272.1 183.8 48.0 272.1 262.4 3.7 791.6 694.9 13.9

Tax Rate 19.5 21.5 -9.4 19.5 21.9 -11.0 22.8 21.4 6.2

Prov. for Tax 53.1 39.6 34.0 53.1 57.4 -7.5 180.2 148.9 21.0

% to TOI 7.7 7.4 - 7.7 10.1 - 8.5 8.1 --


Face Value 2.0 2.0 - 2.0 2.0 - 2.0 2.0 -


EPS (Rs.) 16.5 10.9 51.8 16.5 15.4 7.1 46.1 41.1 12.0

CEPS (Rs.) 18.3 12.4 47.2 18.3 17.1 7.0 51.9 45.8 13.2



Revenue Growth Trend EBITDA & Margin Trend (%)

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

0

100

200

300

400

500

600

700

800

Q4F

Y12

Q1F

Y13

Q2F

Y13

Q3F

Y13

Q4F

Y13

Q1F

Y14

Q2F

Y14

Q3F

Y14

Rs.Crore

Revenue yoy Growth (%)

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

0

50

100

150

200

250

300

350

Q4F

Y12

Q1F

Y13

Q2F

Y13

Q3F

Y13

Q4F

Y13

Q1F

Y14

Q2F

Y14

Q3F

Y14

Rs.Crore

EBITDA EBITDA Margin (%)

Source: Divi’s Lab, Ventura Research Source: Divi’s Lab, Ventura Research


0

200

400

600

800

1000

1200

1400

1600

1800

2000


CMP 14X 17.5X 21X 24.5X 28X

0

500

1000

1500

2000

2500

3000


CMP 4.5X 5.75X 7X 8.25X 9.5X

Source: Divi’s Lab, Ventura Research Source: Divi’s Lab, Ventura Research




0

5000

10000

15000

20000

25000


EV 11X 13X 15X 17X 19X

Source: Divi’s Lab, Ventura Research


Lupin Ltd.

Key markets driving growth


In Q3FY14, Lupin reported strong results with revenue and EBITDA beating street estimates. The

surprise came in mainly from jump in US generics, low manufacturing and SG&A expenses. Its

revenues grew 21% YoY to Rs 2,983 primarily driven by strong growth in US generics, the API

business and domestic formulations. EBITDA reported a growth of 27.8% YoY to Rs 773 crore, as a

result improving EBITDA margins by 140 bps YoY to 25.6%. Consequently, the net profit for the

quarter increased by 41% YoY to Rs 483 crore.

US generics business surprised positively with ~$45m jump QoQ. Recent launches of generic

Cymbalta, Trizivir and Trilipix helped to drive growth in US. The generic Cymbalta opportunity

turned out to be significantly bigger and more profitable than originally expected due to the entry

of fewer players in the market. Better performance of the base business, that includes old

antibiotic products and new limited-competition products such as generic Zymaxid, helped the

quarter as well.

The company’s domestic business is one of the steady and sustainable contributors to long-term

growth. However, the past 3-4 quarters have seen volatile performance due to trade channel

disruptions related to implementation of the new price control policy. During the quarter, it saw

stabilization in growth (13% YoY), returning to the high-teen levels. Management guided to no more

fluctuations.

In Japan, its subsidiary Kyowa has shown 10% YoY growth to Yen 4,530 mn compared to Yen

3,910mn in Q2FY13. Irom continues to witness negative growth in Q3FY14 due to continued

problems in its contract manufacturing business.

On the product portfolio fronts, Lupin has received 5 ANDA approvals during the quarter. Company

has also launched 5 products in US market including Cymbalta, Trizivir, Aciphex and Zymaxid.

Currently, it has 62 products in the US market. Its generic business has increased by 55% during

Q3FY14 owing to lower than expected competition in Cymbalta. In dollar terms, company has

grown at 12% YoY in US during the quarter. The company has done particularly well in Cymbalta,

Recommendation (Rs)

CMP 920 Rating HOLD

Index Details

Sensex 20,377

Nifty 6,063

Industry Pharma

Scrip Details



Avg Vol (Lakhs) 1.0

52 Week H/L 569/951


Face Value (Rs) 2.0



Total 100.0


1m 3m 6m

Lupin -1.4 5.0 11.1 Nifty -1.6 -2.0 9.9 BSE Pharma 12.5 38.3 46.9



Zymaxid and Trizivir during the quarter. The base business is doing well with the anti-Infectives

season picking up and Simvastatin doing well.

At the CMP of Rs. 920, Lupin is trading at 23.6x and 19.8x its FY14E and FY15E consensus

earnings, respectively. We recommend a HOLD on the stock given the recovery in the performance

of domestic formulations with the rising contribution from the chronic segments, a strong US

pipeline with a large number of FTFs along with the increasing pace of oral contraceptive

approvals and improved margins.




Net Sales 2983.0 2465.9 21.0 2983.0 2631.5 13.4 9461.6 6959.7 35.9Other operational Income 39.0 35.2 10.9 39.0 36.4 7.1 179.7 123.2 45.8


Raw Materials Cons.- 609.3 618.5 -1.5 609.3 619.7 -1.7 2224.3 1813.9 22.6

% to TOI 20.2 24.7 - 20.2 23.2 - 23.1 25.6 -

Stock adj. (-)Inc / (+)Dec- 136.6 -51.9 - 136.6 -141.9 - -192.2 -316.9 -39.4

% to TOI 4.5 -2.1 - 4.5 -5.3 - -2.0 -4.5 -


% to TOI 24.7 22.7 - 24.7 17.9 - 21.1 21.1 -

Other expenses 1124.0 1009.7 11.3 1124.0 1162.2 -3.3 4090.5 3171.7 29.0

% to TOI 37.2 40.4 - 37.2 43.6 - 42.4 44.8 -


Personnel 378.7 319.8 18.4 378.7 368.2 2.9 1248.8 969.5 28.8

% to TOI 12.5 12.8 - 12.5 13.8 - 13.0 13.7 -



Non-Operating Income 32.4 26.5 22.3 32.4 81.4 -60.2 27.9 14.4 94.1

Interest 4.2 7.7 -45.6 4.2 4.9 -14.3 41.0 35.5 15.6


Gross Profit 801.6 623.8 28.5 801.6 736.1 8.9 2256.8 1423.6 58.5

Depreciation 63.7 68.8 -7.5 63.7 60.6 5.1 332.2 227.5 46.0


% to TOI 24.4 22.2 - 24.4 25.3 - 20.0 16.9 -

Extraordinary Items - - - 0.0 0.0 0.0 0.0 0.0 0.0

PBT 737.9 555.0 33.0 737.9 675.5 9.2 1924.6 1196.1 60.9

Tax Rate 34.4 38.1 -9.7 34.4 38.2 -9.9 30.4 25.8 17.7

Prov. for Tax 254.2 211.6 20.1 254.2 258.2 -1.5 584.2 308.6 89.3

% to TOI 8.4 8.5 - 8.4 9.7 - 6.1 4.4 -


Minority Interest -7.6 -8.2 -6.6 -7.6 -11.1 -31.5 -26.3 -19.9 32.3

PAT (adj. For MI) 476.1 335.2 42.0 476.1 406.2 17.2 1314.2 867.7 51.5

Face Value 2.0 2.0 - 2.0 2.0 - 2.0 2.0 -


EPS (Rs.) 10.8 7.7 40.6 10.8 9.3 16.1 30.0 19.9 50.7

CEPS (Rs.) 12.2 9.2 32.6 12.2 10.7 14.0 37.4 25.0 49.7



Revenue Mix- Geography wise Revenue & Profitability Trend

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Q2F

Y13

Q3F

Y13

Q4F

Y13

Q1F

Y14

Q2F

Y14

Q3F

Y14

India USEurope JapanSouth Arica Emerging Market

0

5

10

15

20

25

30

0

500

1,000

1,500

2,000

2,500

3,000

3,500

Q4F

Y12

Q1F

Y13

Q2F

Y13

Q3F

Y13

Q4F

Y13

Q1F

Y14

Q2F

Y14

Q3F

Y14

Rs.Crore


Source: Lupin, Ventura Research Source: Lupin, Ventura Research

Top 10 Brand Performance

Brand (Rs Cr) Therapies Dec'13 Dec'12 yoy Gr.

Gluconorm-G Anti-Diabetic 85.4 62.7 36.2%

Tonact CVS 74.3 68.6 8.3%

Budamate Respiratory 49.6 40.5 22.5%

Ramistar CVS 40.2 37.6 6.9%

R-Cinex Anti-Infective 34.8 32.8 6.1%

Rablet-D Gastro 34.3 26.4 29.9%

L-Cin Anti-Infective 32.5 31.5 3.2%

Rablet Gastro 32.1 30.3 5.9%

Gluconorm-PG Anti-Diabetic 32.6 28.1 16.0%

Merotrol Anti-Infective 32.6 29.1 12.0%

Total 448 388 15.5%

Source: Lupin, Ventura Research




0

200

400

600

800

1000

1200

1400

1600


CMP 10X 15X 20X 25X 30X

0

200

400

600

800

1000

1200

1400


CMP 3X 4X 5X 6X 7X

Source: Lupin, Ventura Research Source: Lupin, Ventura Research


0

10000

20000

30000

40000

50000

60000

70000


EV 7.5X 10X 12.5X 15X 17.5X

Source: Lupin, Ventura Research


Ranbaxy Laboratories Ltd

Disappointing Performance…


For the 4th quarter of CY13, Ranbaxy revenues were marginally above estimates at Rs 2860 crore

(up 7% YoY) driven by the US sales (+23.3% YoY and 15.6% QoQ at Rs 910 crore). This is

attributable to the reasonably strong showing by Absorica, which has retained market share at

~17%.

During the quarter, Ranbaxy’s Toansa facility received an import alert from the USFDA in Jan2014 prohibiting further imports from this plant. This effectively puts all its manufacturing facilities in India Dewas, Poanta Sahib, Mohali and Toansa under embargo. However, the management has indicated that they expect 10-12% of their US business to be impacted by this import alert.

Its operating margins improved, rising to 9.5% (v/s 7.2% in Q3CY14 and a dismal 2% in Q4CY13). The improvement was largely driven by a strong performance in the US business. There would be expansion in the margins but the improvement will happen gradually and it could be several years before it reaches a level comparable to peers. The remediation expenses might go up due to import alert at Toansa and might put margins under further pressure. The lack of any new ANDA approvals from facilities in India, and the slow rate of approvals from Ohm Labs (it received only one ANDA approval in 2013 (felodipine ER tablets 2.5/5/10mg)) indicates that the sales growth in the US will be slow going forward too, at least until it manages to receive approvals for important ANDAs, e.g. Diovan/ Valcyte/ Nexium.

The company had filed three ANDAs during Q4CY13, taking its total filings to ten for the year. Although the management indicated that it was confident of retaining exclusivity on all products where it had FTF, the delay in receiving fresh approvals remains a worry. During the quarter, it reported an MTM gain of Rs 100 crore on unexpired currency derivatives, however, it was offset by a Rs 260 crore charge on inventory write-offs at Toansa, resulting in a net exceptional charge of Rs 150 crore for the quarter. The ongoing costs for remediation, estimated at ~US$12-15mn per quarter, will depress operating margins for even longer than estimated earlier, given that the Toansa facility will also be subject to terms of the consent decree.

The management remains hopeful of monetising opportunities such as Diovan and Valcyte, which

Recommendation (Rs)

CMP 340 Rating HOLD

Index Details

Sensex 20,377

Nifty 6,063

Industry Pharma

Scrip Details




52 Week H/L 490/254


Face Value (Rs) 5.0



Total 100.0


1m 3m 6m

Ranbaxy -29.2 -15.8 20.8 Nifty -1.6 -2.0 9.9 BSE Pharma 12.5 38.3 46.9


- 61 of 84 - Friday, 7

th February, 2014

may garner growth in the upcoming quarters. However margins would be under pressure in the

near term and strong recovery would come, post-CY15. At the CMP of Rs 340, Ranbaxy is trading

at 13.1x and 14.5x its CY14E and CY15E consensus earnings, we recommend a HOLD for the stock.


- 62 of 84 - Friday, 7

th February, 2014

Description Q4CY13 Q4CY12 % Chg. Q4CY13 Q3CY13 % Chg. CY12 CY11 % Chg.

Net Sales 2859.0 2670.8 7.0 2859.0 2750.2 4.0 12252.9 9970.0 22.9Other operational Income 35.0 40.4 -13.3 35.0 51.5 -32.0 206.8 259.5 -20.3


Raw Materials Cons.- 585.9 551.9 6.1 585.9 592.1 -1.0 2060.9 2299.5 -10.4

% to TOI 20.2 20.4 - 20.2 21.1 - 16.5 22.5 -

Stock adj. (-)Inc / (+)Dec- -40.4 179.6 - -40.4 -43.2 -6.5 112.9 -287.9 -

% to TOI -1.4 6.6 - -1.4 -1.5 - 0.9 -2.8 -

Net Raw Mat adj. for stock 545.4 731.5 -25.4 545.4 549.0 -0.7 2173.8 2011.5 8.1

% to TOI 18.8 27.0 - 18.8 19.6 - 17.4 19.7 -

Other expenses 1539.0 1405.4 9.5 1539.0 1527.3 0.8 6419.6 4872.7 31.7

% to TOI 53.2 51.8 - 53.2 54.5 - 53.4 50.8 -


Personnel 549.3 493.3 11.4 549.3 531.6 3.3 1928.4 1645.1 17.2

% to TOI 19.0 18.2 - 19.0 19.0 - 15.5 16.1 -



Non-Operating Income 45.4 76.7 -40.8 45.4 31.5 44.1 273.2 144.4 89.2

Interest 120.6 135.7 -11.1 120.6 50.3 139.8 179.6 79.5 126.0

Exceptional Items -153.9 -337.7 -54.4 -153.9 -310.5 -50.4 12.0 -3411.4 -

Gross Profit 338.9 359.7 -5.8 338.9 485.5 -30.2 2019.5 5176.5 -61.0

Depreciation 91.5 80.5 13.7 91.5 133.4 -31.4 320.2 394.0 -18.7

PBT before Extra-ord -60.3 -452.5 -86.7 -60.3 -391.4 -84.6 1244.9 -2686.5 -

% to TOI -2.1 -16.7 - -2.1 -14.0 - 10.0 -26.3 -

Extraordinary Items - - - - - - 0.0 0.0 0.0

PBT -60.3 -452.5 -86.7 -60.3 -391.4 -84.6 1244.9 -2686.5 -

Tax Rate -162.6 -7.5 2061.7 -162.6 -14.6 -1013.7 23.6 -7.3 -

Prov. for Tax 98.1 34.0 188.3 98.1 57.0 72.1 293.9 196.9 49.2

% to TOI 3.4 1.3 - 3.4 2.0 - 2.4 1.9 -

Profit after Tax -158.5 -486.6 -67.4 -158.5 -448.3 -64.6 951.0 -2883.4 -% to TOI -5.5 -17.9 - -5.5 -16.0 - 7.6 -28.2 -

Minority Interest 3.3 -3.4 - 3.3 -1.6 - -9.6 -9.7 -0.8

PAT (adj. For MI) -158.9 -492.4 -67.7 -158.9 -454.2 -65.0 922.8 -2899.7 -

Face Value 5.0 5.0 - 5.0 5.0 - 5.0 5.0 -


EPS (Rs.) -3.7 -11.5 -67.4 -3.7 -10.6 -65.1 22.5 -68.3 -

CEPS (Rs.) -1.6 -9.6 -83.5 -1.6 -7.4 -78.4 30.1 -59.0 -


- 63 of 84 - Friday, 7

th February, 2014

Sales Performance Gross Debt , Cash & Net Debt

0%

20%

40%

60%

80%

100%

Q1C

Y12

Q2C

Y12

Q3C

Y12

Q4C

Y12

Q1C

Y13

Q2C

Y13

Q3C

Y13

Q4C

Y13

North America IndiaEast Europe West EuropeAsia Pacific & Latin America Africa & Middle EastAPI & other

-200

0

200

400

600

800

1000

1200

Q2C

Y12

Q3C

Y12

Q4C

Y12

Q1C

Y13

Q2C

Y13

Q3C

Y13

Q4C

Y13

$mn

Gross Debt Cash Net Debt

Source: Ranbaxy Lab, Ventura Research Source: Ranbaxy Lab, Ventura Research

DF Filings & DF Approvals Revenue & Profitability Trend

0

10

20

30

40

50

60

70

80

90

100

Q2C

Y12

Q3C

Y12

Q4C

Y12

Q1C

Y13

Q2C

Y13

Q3C

Y13

Q4C

Y13

DF Filings DF approvals

-30

-20

-10

0

10

20

30

40

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

Q1C

Y12

Q2C

Y12

Q3C

Y12

Q4C

Y12

Q1C

Y13

Q2C

Y13

Q3C

Y13

Q4C

Y13

Rs.Crore




- 64 of 84 - Friday, 7

th February, 2014


-1000

-500

0

500

1000

1500

Dec-01 Dec-03 Dec-05 Dec-07 Dec-09 Dec-11 Dec-13

CMP 10X 15X 20X 25X 30X

0

200

400

600

800

1000

1200

1400

1600


CMP 2.5X 4X 5.5X 7X 8.5X


Top 10 Brand Performance

Brand (Rs Cr) Terapies Dec'13 Dec'12 yoy Growth (%)

Revital Vitamins 240.8 172 40%

Volini Pain Mgmt 224.3 183.1 23%

Mox Anti-Infective 154.3 166 -7%

Storvas CVS 114.1 127.5 -11%

Sporidex Anti-Infective 107.1 107.1 0%

Cifran Anti-Infective 90.9 95.2 -5%

Rosuvas CVS 89.5 70.4 27%

Zanocin Anti-Infective 74.4 76 -2%

Moxclav Anti-Infective 70.2 77.4 -9%

Cepodem Anti-Infective 62 62.5 -1%

Total 1,228 1,137 8.0%

Source: Ranbaxy Lab, Ventura Research


- 65 of 84 - Friday, 7

th February, 2014


-30000

-20000

-10000

0

10000

20000

30000

40000

50000

60000


EV 6X 9X 12X 15X 18X

Source: Ranbaxy Lab, Ventura Research


Bharat Heavy Electricals Ltd.

Poor performance continues


In Q3FY14, BHEL’s results were below street estimates with its revenue reporting de-growth of 15% to Rs 8634 crore. Negative operating leverage in the form of higher employee costs and administrations costs continue to weigh on earnings as margins declined ~460 bps YoY to 11.4%. PAT also reported a decline of 41% to Rs 695 crore led by the execution miss and lower margins. As per the management, it is facing humongous challenges as 20% of the current order backlog of Rs 100600 crore is slow. Orders from Abhijeet group, Indiabulls Power and Visa Power remain non-moving while orders from Bajaj Hindustan, Monnet and Jaiprakash Power are moving very slowly, according to the management. The company bagged its first EPC order of the year from central utilities like NTPC and Neyveli Lignit, thereby witnessing order inflows of Rs 11,666 crore. This takes total tally of inflows to Rs 17,600 crore for 9MFY14. As per the management about 17 GW of projects are in various stages of tendering. The company is L1 in 3.2GW of these projects. Management expects these orders to come in Q4FY14. Also, the current backlog of Rs 1,00,600 crore comprises a few private sector orders that are facing execution challenges (20-24% of the backlog). L1 orders are - NTPC North Karanpura EPC (3X660MW), NTPC Darlipalli (2X800MW) SG package, EBOP package for DVC Raghunathpur (2X660MW) and lift irrigation project (6X196MW) in AP. Cash balance as of Q3FY14 stood at Rs 5,152 crore. Total receivables as of Q3FY14 stood at Rs 43,428 crore out of which retention money amounts to Rs 22,000 crore. Net working capital for Q1FY14 stood at Rs 26284 crore. We remain cautious given the intense competition, capacity under utilisation and rigid fixed costs. Order inflow revival is not yet on horizon. Currently, at the CMP of Rs 155, BHEL is trading at 7.9x and 8.8x its estimated earnings for FY14E and FY15E, respectively, and we recommend a HOLD on the stock.

Recommendation (Rs)

CMP 155 Rating HOLD

Index Details

Sensex 20,377

Nifty 6,063

Industry CG

Scrip Details



Avg Vol (Lakhs) 5.3

52 Week H/L 213/100


Face Value (Rs) 2.0



Total 100.0


1m 3m 6m

BHEL -5.9 15.7 34.2 Nifty -1.6 2.0 9.9




Net Sales 8462.4 10041.7 -15.7 8462.4 8819.0 -4.0 47617.7 47227.9 0.8Other operational Income 172.5 178.1 -3.1 172.5 165.4 4.3 807.0 751.0 7.4

Total Oper. Income(TOI) 8634.9 10219.7 -15.5 8634.9 8984.4 -3.9 48424.7 47978.9 0.9

Raw Materials Cons.- 4939.6 5587.8 -11.6 4939.6 5559.1 -11.1 27239.6 28239.9 -3.5

% to TOI 57.2 54.7 - 57.2 61.9 - 56.3 58.9 -

Stock adj. (-)Inc / (+)Dec- -59.5 148.6 - -59.5 -227.3 -73.8 116.2 -823.2 -

% to TOI -0.7 1.5 - -0.7 -2.5 - 0.2 -1.7 -

Net Raw Mat adj. for stock 4880.1 5736.4 -14.9 4880.1 5331.9 -8.5 27355.8 27416.7 -0.2

% to TOI 56.5 56.1 - 56.5 59.3 - 56.5 57.1 -

Other expenses 1243.2 1411.9 -11.9 1243.2 1627.7 -23.6 5926.7 5208.8 13.8

% to TOI 14.4 13.8 - 14.4 18.1 - 12.2 10.9 -

Contribution Net_Sales 2511.5 3071.4 -18.2 2511.5 2024.8 24.0 15142.2 15353.4 -1.4

Personnel 1525.6 1437.3 6.1 1525.6 1612.9 -5.4 5752.8 5465.4 5.3

% to TOI 17.7 14.1 - 17.7 18.0 - 11.9 11.4 -

Total expenditure 7648.9 8585.7 -10.9 7648.9 8572.4 -10.8 39035.3 38090.9 2.5

Operating Profit 985.9 1634.1 -39.7 985.9 411.9 139.4 9389.4 9888.0 -5.0% to TOI 11.4 16.0 - 11.4 4.6 - 19.4 20.6 -


Interest 32.3 50.9 -36.6 32.3 24.7 30.8 125.3 51.3 144.3


Gross Profit 1244.4 1915.5 -35.0 1244.4 885.2 40.6 10385.8 11102.3 -6.5

Depreciation 241.6 219.8 9.9 241.6 238.7 1.2 953.4 800.0 19.2

PBT before Extra-ord 1002.8 1695.7 -40.9 1002.8 646.5 55.1 9432.4 10302.3 -8.4

% to TOI 11.6 16.6 - 11.6 7.2 - 19.5 21.5 -

Extraordinary Items - - - 0.0 0.0 - 0.0 0.0 -

PBT 1002.8 1695.7 -40.9 1002.8 646.5 55.1 9432.4 10302.3 -8.4

Tax Rate 30.7 30.3 1.4 30.7 29.5 4.1 29.9 31.7 -5.7

Prov. for Tax 308.0 513.9 -40.1 308.0 190.5 61.7 2817.7 3262.3 -13.6

% to TOI 3.6 5.0 - 3.6 2.1 - 5.8 6.8 -

Profit after Tax 694.8 1181.9 -41.2 694.8 456.0 52.4 6614.7 7040.0 -6.0% to TOI 8.0 11.6 - 8.0 5.1 - 13.7 14.7 -

Face Value 2.0 2.0 - 2.0 2.0 - 2.0 2.0 -


EPS (Rs.) 2.8 4.8 -41.2 2.8 1.9 47.4 27.0 28.8 -6.0

CEPS (Rs.) 3.8 5.7 -33.2 3.8 2.8 35.7 30.9 32.0 -3.5



Industry Revenue & Growth (%) Industry EBIT & Margin (%)

es

-40%

-30%

-20%

-10%

0%

10%

20%

30%

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

Q4 F

Y12

Q1 F

Y13

Q2 F

Y13

Q3 F

Y13

Q4 F

Y13

Q1 F

Y14

Q2 F

Y14

Q3 F

Y14

Rs.Crore

Industry yoy Growth (%)

-5%

0%

5%

10%

15%

20%

25%

30%

35%

-200.00

0.00

200.00

400.00

600.00

800.00

1,000.00

1,200.00

1,400.00

1,600.00

Q4 F

Y12

Q1 F

Y13

Q2 F

Y13

Q3 F

Y13

Q4 F

Y13

Q1 F

Y14

Q2 F

Y14

Q3 F

Y14

Rs.Crore

Industry EBIT EBIT Margin (RHS)

Source: BHEL, Ventura Research Source: BHEL, Ventura Research

Order Backlog Trend Order Inflow Trend

0

20000

40000

60000

80000

100000

120000

140000

160000

Q4 FY12

Q1 FY13

Q2 FY13

Q3 FY13

Q4 FY13

Q1 FY14

Q2 FY14

Q3 FY14

Rs.Crore

Order Backlog

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

Q4 FY12

Q1 FY13

Q2 FY13

Q3 FY13

Q4 FY13

Q1 FY14

Q2 FY14

Q3 FY14

Rs.Crore

Order Inflow




Power Revenue & Growth (%) Power EBIT & Margin (%)

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

Q4 F

Y12

Q1 F

Y13

Q2 F

Y13

Q3 F

Y13

Q4 F

Y13

Q1 F

Y14

Q2 F

Y14

Q3 F

Y14

Rs.Crore

Power yoy Growth (%)

0%

5%

10%

15%

20%

25%

30%

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

Q4 F

Y12

Q1 F

Y13

Q2 F

Y13

Q3 F

Y13

Q4 F

Y13

Q1 F

Y14

Q2 F

Y14

Q3 F

Y14

Rs.Crore

Power EBIT EBIT Margin (RHS)



0

100

200

300

400

500

600

700


CMP 9X 12.75X 16.5X 20.25X 24X

0

200

400

600

800

1000

1200


CMP 2X 3.1X 4.2X 5.3X 6.4X





0

20000

40000

60000

80000

100000

120000

140000

160000


EV 5.5X 7.35X 9.2X 11.05X 12.9X

Source: BHEL, Ventura Research


ACC Ltd

Volume outlook remains blurred


Primarily driven by improved realisations of 1.6% YoY to Rs 4,604/ton, ACC LTD (ACC) revenue

reported a growth of 7.4% QoQ (0.1% YoY) in Q4CY13. However, as cement demand remained low

the company’s volume reported a decline of 1.5% YoY. PAT reported a growth of 10% to Rs 280

crore over the same period. However, it includes one-time tax reversal of Rs 80 crore, adjusted for

which recurring PAT came in at Rs 200 crore, down 21% YoY.

On the operating profit front, the company posted a disappointing numbers on a yearly basis (-8%),

while sequentially it improved by 26% given the lower cost inflation (0.8% QoQ) on account of

employee expenses (down 15% QoQ) and P&F cost (down 1% QoQ). Its blended EBITDA/ton came

in at Rs 449 crore.

The implementation of its 5mn ton expansion in Jamul, Chhattisgarh (at a capex of Rs 3500 crore)

is on schedule. It is expected to be commissioned during H2CY15. Also the grinding unit in Sindri,

Jharkhand is expected to get operational by end-CY15. With cash balance of over Rs 2540 crore, it

would complete the expansions entirely through internal accruals. The company saw price rise in

the month of October and mid-November mainly in Western region, but sharp price fall in

December.

We remain cautious on the sector due to the limited visibility of a sharp pickup in demand and continuous capacity additions. At the CMP of Rs 1046, ACC is currently quoting at an EV / EBITDA of 9.0x and 7.7x its estimates for CY2013E and CY2014E, respectively. We recommend a HOLD the stock.

Recommendation (Rs)

CMP 1,046 Rating HOLD

Index Details

Sensex 20,377

Nifty 6,063

Industry Cement

Scrip Details



Avg Vol (Lakhs) 0.4

52 Week H/L 1,334/912





Total 100.0


1m 3m 6m

ACC -3.5 -6.3 -9.9 Nifty -1.6 2.0 9.9




Net Sales 2693.4 2691.5 0.1 2693.4 2508.7 7.4 10908.4 11130.6 -2.0Other operational Income 99.1 76.6 29.4 99.1 61.1 62.2 261.0 227.6 14.7

Total Oper. Income(TOI) 2792.5 2768.1 0.9 2792.5 2569.8 8.7 11169.4 11358.2 -1.7


% to TOI 14.7 14.0 - 14.7 15.0 - 14.5 13.7 -

Stock adj. (-)Inc / (+)Dec- -2.1 100.3 - -2.1 50.9 - 6.5 20.1 -67.5

% to TOI -0.1 3.6 - -0.1 2.0 - 0.1 0.2 -

Net Raw Mat adj. for stock 407.1 487.1 -16.4 407.1 437.1 -6.9 1628.0 1571.5 3.6

% to TOI 14.6 17.6 - 14.6 17.0 - 14.6 13.8 -

Other expenses 1867.7 1705.4 9.5 1867.7 1673.5 11.6 7248.5 6972.2 4.0

% to TOI 66.9 61.6 - 66.9 65.1 - 64.9 61.4 -


Personnel 156.0 183.0 -14.8 156.0 172.7 -9.7 663.0 617.9 7.3

% to TOI 5.6 6.6 - 5.6 6.7 - 5.9 5.4 -




Interest 12.0 27.2 -55.9 12.0 11.0 9.1 51.7 114.7 -54.9

Exceptional Items 0.0 0.0 0.0 0.0 0.0 0.0 0.0 -335.4 100.0

Gross Profit 392.3 431.5 -9.1 392.3 314.8 24.6 1797.4 2680.7 -32.9

Depreciation 155.0 143.3 8.2 155.0 147.0 5.4 583.8 568.9 2.6


% to TOI 8.5 10.4 - 8.5 6.5 - 10.9 12.7 -

Extraordinary Items - - - 0.0 0.0 0.0 0.0 0.0 0.0

PBT 237.2 288.2 -17.7 237.2 167.8 41.4 1213.6 1441.0 -15.8

Tax Rate -15.1 13.9 - -15.1 30.5 - 10.9 27.1 -59.9

Prov. for Tax -35.9 40.1 - -35.9 51.2 - 131.9 391.1 -66.3

% to TOI -1.3 1.4 - -1.3 2.0 - 1.2 3.4 -


Minority Interest 0.0 0.0 0.0 0.0 0.0 0.0 -0.2 -0.1 50.0

PAT (adj. For MI) 275.7 251.2 9.7 275.7 118.9 131.9 1094.7 1059.3 3.3

Face Value 10.0 10.0 - 10.0 10.0 - 10.0 10.0 -


EPS (Rs.) 14.5 13.2 10.1 14.5 6.2 133.9 57.6 55.9 3.0

CEPS (Rs.) 22.8 20.8 9.4 22.8 14.0 62.9 88.6 86.1 2.9



Total Cement Sales & Capacity Utilization (%) Net Realization & EBITDA Per tonne

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0

1

2

3

4

5

6

7

8

Q1C

Y12

Q2C

Y12

Q3C

Y12

Q4C

Y12

Q1C

Y13

Q2C

Y13

Q3C

Y13

Q4C

Y13

Cement Capacity Total Cement Sales

Capacity Utilization (%) (RHS)

In MMTPA In %

0

200

400

600

800

1000

1200

4350

4400

4450

4500

4550

4600

4650

Q4C

Y11

Q1C

Y12

Q2C

Y12

Q3C

Y12

Q4C

Y12

Q1C

Y13

Q2C

Y13

Q3C

Y13

Q4C

Y13

per tonne

Net Realizations per tonne EBITDA per tonne (RHS)

Source: ACC, Ventura Research Source: ACC, Ventura Research

Revenue Profitability trend (Yearly) Revenue Profitability trend (Quarterly)

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

0

4,000

8,000

12,000

16,000

CY10 CY11 CY12 CY13 CY14E CY15E

Rs.Crore


0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

2,200

2,300

2,400

2,500

2,600

2,700

2,800

2,900

3,000

3,100

Q1C

Y12

Q2C

Y12

Q3C

Y12

Q4C

Y12

Q1C

Y13

Q2C

Y13

Q3C

Y13

Q4C

Y13

Rs.Crore






0

200

400

600

800

1,000

1,200

1,400

1,600

1,800


CMP 7.5X 10.3X 13.1X 15.9X 18.7X

0

200

400

600

800

1000

1200

1400

1600

1800

2000


CMP 2X 2.43X 2.86X 3.29X 3.72X



0

5000

10000

15000

20000

25000

30000


EV 5.2X 6.4X 7.6X 8.8X 10X

Source: ACC, Ventura Research


Ambuja Cements Ltd

Outlook continues to remain challenging


For Q4CY13, Ambuja Cements Ltd (Ambuja) reported disappointing numbers with EBITDA

declining -32% YoY to Rs 307 crore primarily led by lower realisation. Net realisation was down

7.7% YoY at Rs 3,963 (lowest in the past two years). However, sales volume gave a positive

surprise, up 13.1% QoQ at 5.53 mt. Over the same period, net sales stood at Rs 2191 crore,

registering marginal de-growth of 5.3%. Backed by the tax write-back of Rs 100 crore, net profit

stood at Rs 316.8 crore (+49.3% YoY).

EBITDA/tonne for Q4CY13 was at Rs 546 compared to Rs 522 in the previous quarter and Rs 794

last year. As a result, EBITDA margin declined 540 bps to 13.2%. On per ton basis, total operating

costs declined 1.6% at Rs3,440/tn (against an increase reported by most cement manufacturers),

on the back of positive operating leverage on higher sales volume, and lower power and fuel costs

following the fall in imported coal prices and decline in employee benefits.

As per the management, the outlook continuous to remain challenging due to difficult macro-

economic condition and resultant subdued cement demand. However, it has been able to keep its

production cost flat YoY and would continue to work on improving operational efficiencies, cost

optimisation and continued focus on customer and commercial excellence.

We recommend a HOLD on the stock. At the CMP of Rs 163, Ambuja is currently valued at an EV/EBITDA of 10.3x and 7.9x its estimates for CY2013E and CY2014E, respectively.

Recommendation (Rs)

CMP 163 Rating HOLD

Index Details

Sensex 20,377

Nifty 6,063

Industry Cement

Scrip Details



Avg Vol (Lakhs) 1.3

52 Week H/L 212/148


Face Value (Rs) 2.0



Total 100.0


1m 3m 6m

Ambuja -7.1 - 9.7 -8.2 Nifty -1.6 -2.0 9.9




Net Sales 2191.3 2313.3 -5.3 2191.3 2004.9 9.3 9160.4 9674.9 -5.3Other operational Income 18.0 21.9 -17.5 18.0 12.5 44.0 0.0 55.4 -100.0

Total Oper. Income(TOI) 2209.4 2335.2 -5.4 2209.4 2017.5 9.5 9160.4 9730.3 -5.9

Raw Materials Cons.- 160.9 162.5 -1.0 160.9 143.4 12.2 0.0 671.8 -

% to TOI 7.3 7.0 - 7.3 7.1 - 0.0 6.9 -

Stock adj. (-)Inc / (+)Dec- 53.3 -19.3 - 53.3 59.6 -10.6 0.0 -200.8 -

% to TOI 2.4 -0.8 - 2.4 3.0 - 0.0 -2.1 -

Net Raw Mat adj. for stock 214.2 143.3 49.5 214.2 203.0 5.5 0.0 470.9 -100.0

% to TOI 9.7 6.1 - 9.7 10.1 - 0.0 4.8 -

Other expenses 1568.5 1605.2 -2.3 1568.5 1416.6 10.7 7999.6 6307.9 26.8

% to TOI 71.0 68.7 - 71.0 70.2 - 87.3 64.8 -


Personnel 119.7 136.7 -12.4 119.7 130.0 -7.9 - 478.5 0.0

% to TOI 5.4 5.9 - 5.4 6.4 - - 4.9 -




Interest 16.9 24.3 -30.2 16.9 17.8 -5.1 65.1 75.7 -14.0

Exceptional Items 0.0 0.0 0.0 0.0 24.8 -100.0 0.0 -279.1 100.0

Gross Profit 378.3 513.9 -26.4 378.3 306.7 23.3 1489.3 3025.3 -50.8

Depreciation 122.8 185.5 -33.8 122.8 124.6 -1.4 0.0 565.2 0.0


% to TOI 11.6 14.1 - 11.6 11.5 - 16.5 19.5 -

Extraordinary Items 0.0 0.0 - 0.0 0.0 - 0.0 0.0 -

PBT 255.6 328.4 -22.2 255.6 231.8 10.3 1514.1 1901.8 -20.4

Tax Rate -23.9 35.5 - -23.9 28.4 - 14.5 31.8 -54.4

Prov. for Tax -61.0 116.4 - -61.0 65.8 - 219.6 604.8 -63.7

% to TOI -2.8 5.0 - -2.8 3.3 - 2.4 6.2 -

Profit after Tax 316.5 212.0 49.3 316.5 166.0 90.7 1294.6 1297.1 -0.2% to TOI 14.3 9.1 - 14.3 8.2 - 14.1 13.3 -

Face Value 2.0 2.0 - 2.0 2.0 - 2.0 2.0 -


EPS (Rs.) 2.0 1.4 49.0 2.0 1.1 81.8 8.4 8.4 -0.4

CEPS (Rs.) 2.8 2.6 10.2 2.8 1.9 47.4 8.4 12.1 -30.6



Total Cement Sales & Capacity Utilization (%) Net Realization & EBITDA Per tonne

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0

1

2

3

4

5

6

7

Q1C

Y12

Q2C

Y12

Q3C

Y12

Q4C

Y12

Q1C

Y13

Q2C

Y13

Q3C

Y13

Q4C

Y13

Cement Capacity Total Cement Sales Capacity Utilization (%) (RHS)

In MMTPA In %

0

200

400

600

800

1000

1200

1400

3600

3700

3800

3900

4000

4100

4200

4300

4400

4500

4600

4700

Q1C

Y12

Q2C

Y12

Q3C

Y12

Q4C

Y12

Q1C

Y13

Q2C

Y13

Q3C

Y13

Q4C

Y13

Per tonne

Net Realizations per tonne EBITDA per tonne

Source: Ambuja, Ventura Research Source: Ambuja, Ventura Research

Revenue Profitability trend (Yearly) Revenue Profitability trend (Quarterly)

0%

5%

10%

15%

20%

25%

30%

0

4,000

8,000

12,000

16,000

CY11 CY12 CY13 CY14E CY15E

Rs.Crore


0%

5%

10%

15%

20%

25%

30%

35%

0

500

1,000

1,500

2,000

2,500

3,000

Q3C

Y11

Q4C

Y11

Q1C

Y12

Q2C

Y12

Q3C

Y12

Q4C

Y12

Q1C

Y13

Q2C

Y13

Q3C

Y13

Q4C

Y13

Rs.Crore






0

50

100

150

200

250

Jun-02 Jun-04 Jun-06 Jun-08 Jun-10 Jun-12 Jun-14

CMP 7X 9.25X 11.5X 13.75X 16X

0

50

100

150

200

250


CMP 2X 2.3X 2.6X 2.9X 3.2X



0

5000

10000

15000

20000

25000

30000

35000

40000


EV 4.5X 5.95X 7.4X 8.85X 10.3X

Source: Ambuja, Ventura Research

CNX500 Quarterly Results at a Glance


Q3FY14 Q3FY13 Q2FY14 % YoY % QoQ Q3FY14 Q3FY13 Q2FY14 % YoY % QoQ Q3FY14 Q3FY13 Q2FY14 % YoY % QoQ

Agriculture

Kaveri Seed Company 497 3424 132.6 94.1 103.2 40.8% 28.4% 38.2 12.7 12.6 202.1% 203.5% 36.6 10.7 9.1 242.8% 303.5%

Auto Ancillary

Gabriel India 21 298 336.6 294.2 314.5 14.4% 7.0% 23.0 17.6 20.0 30.6% 14.8% 14.1 8.0 11.5 76.4% 22.3%

Tube Investments Of India 171 3202 2114.0 1779.2 2105.7 18.8% 0.4% 255.2 223.4 261.9 14.3% -2.5% 127.4 109.8 136.3 16.0% -6.6%

Banking & Financial Services

City Union Bank 49 2640 646.1 555.6 640.4 16.3% 0.9% 69.9 65.4 79.0 6.8% -11.6% 89.1 85.2 84.4 4.5% 5.6%

ING Vysya Bank 540 10164 1273.3 1238.9 1317.3 2.8% -3.3% 59.7 76.7 91.7 -22.2% -34.9% 167.3 162.3 176.3 3.1% -5.1%

Andhra Bank 55 3234 3597.6 3229.4 3591.9 11.4% 0.2% 218.7 473.9 417.2 -53.9% -47.6% 45.6 257.1 70.7 -82.3% -35.5%

Bank Of Baroda 558 23940 9690.7 8844.9 9473.5 9.6% 2.3% 1265.4 1415.4 1150.7 -10.6% 10.0% 1047.8 1011.6 1168.1 3.6% -10.3%

Central Bank Of India 47 6354 6353.9 5462.0 5858.9 16.3% 8.4% 514.4 422.0 163.8 21.9% 214.1% 61.5 179.9 -1508.7 -65.8% LP

Corporation Bank 251 4200 4608.8 3870.9 4434.0 19.1% 3.9% 405.0 372.0 324.6 8.9% 24.7% 126.7 303.2 15.5 -58.2% 718.9%

IDBI Bank 55 8774 6617.8 6200.4 6535.7 6.7% 1.3% 707.4 682.6 696.1 3.6% 1.6% 104.0 416.8 192.3 -75.1% -45.9%

State Bank Of Bikaner and Jaipur302 2113 2120.0 1915.1 1969.1 10.7% 7.7% 242.0 270.6 197.2 -10.6% 22.7% 152.0 215.1 154.6 -29.4% -1.7%

Vijaya Bank 36 1991 2745.2 2232.8 2690.6 23.0% 2.0% 38.3 136.6 149.8 -71.9% -74.4% 11.4 126.7 136.2 -91.0% -91.6%

Can Fin Homes 175 358 151.7 102.8 137.9 47.5% 10.0% 140.8 91.9 125.9 53.1% 11.8% 20.3 12.6 18.7 60.9% 8.6%

Capital First 132 938 276.3 205.5 260.7 34.5% 6.0% 185.2 132.8 171.3 39.5% 8.1% 10.1 10.8 7.2 -6.1% 41.2%

Tata Investment Corporation 388 2135 43.9 42.5 107.5 3.4% -59.1% 40.9 39.3 103.1 4.0% -60.3% 32.9 32.3 92.9 2.0% -64.5%

Reliance Capital 322 7898 1855.0 1698.0 1836.0 9.2% 1.0% 848.0 747.0 791.0 13.5% 7.2% 182.0 101.0 135.0 80.2% 34.8%

SREI Infrastructure Finance 23 1145 794.3 760.6 798.5 4.4% -0.5% 675.9 631.9 678.3 7.0% -0.3% 47.2 46.5 39.7 1.5% 18.8%

Castings/Forgings

Bharat Forge 341 7945 808.6 660.5 821.4 22.4% -1.6% 214.5 142.4 222.8 50.6% -3.7% 94.0 47.5 96.4 97.7% -2.5%

Electrosteel Castings 14 468 490.9 472.7 544.5 3.9% -9.8% 94.5 46.8 72.3 102.0% 30.7% 33.7 33.1 19.5 2.0% 73.1%

PAT (Rs crore)Company Name

CMP

(Rs)

M.Cap

(Rs crore)

Sales (Rs crore) EBITDA (Rs crore)




Cement & Construction Materials

JK Lakshmi Cement 66 776 502.6 493.7 448.9 1.8% 12.0% 63.4 98.2 56.3 -35.4% 12.7% 14.1 41.2 10.3 -65.8% 36.8%

Ultratech Cement 1728 47400 4786.4 4857.4 4502.1 -1.5% 6.3% 795.6 1048.9 679.5 -24.1% 17.1% 369.8 600.8 264.1 -38.5% 40.0%

Chemicals

Aarti Industries 92 814 639.7 450.0 637.7 42.2% 0.3% 107.6 67.2 106.0 60.3% 1.5% 37.0 21.8 42.4 69.4% -12.7%

Godrej Industries 280 9389 1960.2 1680.6 2008.4 16.6% -2.4% 123.7 92.1 146.5 34.4% -15.5% 45.7 158.9 92.5 -71.3% -50.6%

Cigarettes/Tobacco

Godfrey Phillips India 3099 3222 623.4 531.3 590.6 17.3% 5.6% 133.0 87.2 86.7 52.6% 53.4% 70.7 49.2 38.3 43.8% 84.9%

Compressors / Pumps

Elgi Equipments 88 1394 324.8 286.9 318.1 13.2% 2.1% 23.5 22.2 22.5 5.8% 4.5% 11.5 12.1 7.9 -4.8% 45.6%

Consumer Durables

Whirlpool Of India 190 2410 647.2 598.3 586.5 8.2% 10.3% 37.1 23.4 31.6 58.1% 17.2% 21.3 10.1 16.5 111.0% 28.5%

Consumer Food

Glaxosmithkline Consumer Healthcare 4383 18434 839.1 709.1 971.9 18.3% -13.7% 88.4 76.4 192.0 15.7% -54.0% 79.8 69.7 146.9 14.5% -45.7%

Jubilant FoodWorks 1057 6918 456.5 385.1 436.6 18.5% 4.6% 67.4 67.2 65.3 0.3% 3.2% 33.6 37.7 33.2 -10.9% 1.1%

Zydus Wellness 493 1925 97.2 95.8 97.1 1.4% 0.0% 26.8 26.5 25.5 1.1% 5.0% 27.3 23.1 25.7 18.5% 6.5%

Courier Services

Blue Dart Express 3346 7940 505.4 458.4 471.0 10.3% 7.3% 33.4 63.7 41.8 -47.6% -20.1% 23.0 45.0 30.1 -48.8% -23.4%

Diamond & Jewellery

Tribhovandas Bhimji Zaveri 128 856 517.0 574.8 322.6 -10.1% 60.3% 43.6 43.6 16.6 0.1% 162.1% 19.1 24.7 3.5 -22.9% 442.8%

Diesel Engines

Cummins India 446 12349 1000.6 1071.3 913.8 -6.6% 9.5% 197.6 208.6 152.6 -5.3% 29.4% 147.2 234.1 144.8 -37.1% 1.7%

Greaves Cotton 61 1491 422.7 514.4 445.3 -17.8% -5.1% 47.4 71.7 50.4 -34.0% -6.1% 37.8 34.4 -8.0 9.9% LP

Company NameCMP

(Rs)

M.Cap

(Rs crore)

Sales (Rs crore) EBITDA (Rs crore) PAT (Rs crore)




Diversified

Balmer Lawrie & Company 305 870 630.0 642.6 642.7 -2.0% -2.0% 28.8 43.4 35.1 -33.7% -17.9% 21.9 32.4 29.2 -32.6% -25.1%

DCM Shriram Consolidated 58 956 1449.2 1337.1 1684.2 8.4% -14.0% 99.4 128.8 67.2 -22.8% 48.0% 44.3 60.8 1.4 -27.0% 3044.0%

Delta Corp 97 2204 90.5 103.4 139.1 -12.5% -35.0% 28.7 21.2 31.1 35.8% -7.5% 15.2 14.9 10.1 1.7% 50.7%

Educational Institutions

Tree House Education & Accessories 225 836 39.7 29.1 41.3 36.7% -3.8% 24.5 16.3 22.9 50.4% 7.0% 12.1 8.1 11.5 50.3% 5.5%

Electrodes & Welding Equipment

Graphite India 79 1537 430.3 419.2 430.7 2.6% -0.1% 68.5 66.7 81.8 2.7% -16.3% 42.2 34.5 44.5 22.2% -5.3%

HEG 212 846 423.7 350.1 301.6 21.0% 40.5% 85.0 53.5 45.7 59.1% 85.9% 44.3 11.5 5.1 284.6% 775.7%

Electronics

Honeywell Automation India 2556 2260 451.8 453.4 435.9 -0.4% 3.6% 42.5 52.3 13.8 -18.8% 208.7% 28.9 35.7 14.0 -19.2% 106.5%

Engineering

Lanco Infratech 7 1673 2384.3 3469.4 2451.9 -31.3% -2.8% 379.2 524.0 398.1 -27.6% -4.7% -551.8 -455.4 -617.3 21.1% -10.6%

BEML 195 813 772.2 670.4 743.2 15.2% 3.9% 39.6 -26.9 -0.1 LP LP 5.5 -63.3 -38.9 LP LP

Praj Industries 45 802 269.1 233.9 194.2 15.0% 38.5% 32.8 25.8 8.9 27.0% 269.5% 24.9 25.6 6.3 -2.5% 298.1%

Fertilizers

Chambal Fertilisers & Chemicals 38 1569 2359.3 2088.6 2488.8 13.0% -5.2% 233.2 210.4 194.6 10.8% 19.9% 90.3 96.1 94.2 -6.0% -4.1%

Tata Chemicals 267 6811 4551.1 4138.6 4281.9 10.0% 6.3% 504.2 536.2 574.3 -6.0% -12.2% 39.4 272.2 211.5 -85.5% -81.4%

Finance Term Lending

Power Finance Corporation 145 19154 5539.1 4464.9 5321.3 24.1% 4.1% 5500.3 4428.1 5261.4 24.2% 4.5% 1534.3 1117.1 1273.8 37.3% 20.5%

Gas Transmission/Marketing

Gujarat State Petronet 57 3216 243.9 260.6 277.0 -6.4% -11.9% 206.9 239.4 251.3 -13.6% -17.7% 87.3 119.0 114.1 -26.6% -23.4%

Company NameCMP

(Rs)

M.Cap

(Rs crore)





Household & Personal Products

Gillette India 1988 6479 426.6 351.9 387.2 21.2% 10.2% 14.7 27.1 18.8 -45.6% -21.6% 11.0 18.7 15.1 -41.0% -27.1%

Procter & Gamble Hygiene & Health Care 3200 10387 570.6 470.6 492.8 21.3% 15.8% 95.5 65.8 73.5 45.1% 29.9% 76.6 54.0 54.8 41.8% 39.8%

Industrial Gases & Fuels

Linde India 283 2411 436.3 326.0 320.8 33.8% 36.0% 76.6 44.5 64.2 72.2% 19.3% 55.5 45.4 10.0 22.4% 456.0%

IT

Redington (India) 67 2680 7126.8 6125.5 6672.6 16.3% 6.8% 171.6 166.5 156.8 3.1% 9.5% 97.2 90.7 79.7 7.2% 21.8%

Geometric 92 582 275.3 250.8 286.5 9.7% -3.9% 20.4 41.3 42.1 -50.5% -51.4% 12.8 24.3 21.1 -47.1% -39.1%

Hexaware Technologies 140 4198 620.0 502.3 621.1 23.4% -0.2% 128.6 79.3 129.0 62.3% -0.3% 103.2 66.2 98.7 56.0% 4.6%

Tata Consultancy Services 2143 419824 21294.0 16069.9 20977.2 32.5% 1.5% 6686.8 4587.1 6255.6 45.8% 6.9% 5377.3 3590.6 4672.1 49.8% 15.1%

Tech Mahindra 1821 42483 4898.6 1791.1 4771.5 173.5% 2.7% 994.9 374.0 1084.4 166.0% -8.3% 1020.9 248.8 718.8 310.4% 42.0%

Logistics

GATI 67 582 367.5 326.9 360.2 12.4% 2.0% 30.2 26.4 25.1 14.3% 20.4% 8.7 7.8 5.8 12.2% 51.7%

Metals & Mining

Indian Metals & Ferro Alloys 192 499 341.4 296.7 302.9 15.1% 12.7% 82.3 58.3 72.2 41.2% 14.0% 11.0 15.1 14.1 -27.1% -22.2%

Oil Exploration

Aban Offshore 519 2259 994.4 909.0 1001.6 9.4% -0.7% 559.6 487.7 531.8 14.8% 5.2% 78.7 29.1 79.4 170.9% -0.8%

Paints

Berger Paints India 210 7262 1024.8 917.1 961.8 11.7% 6.6% 131.5 116.7 104.2 12.7% 26.3% 82.3 76.8 62.7 7.1% 31.3%

Pharmaceuticals & Drugs

Cadila Healthcare 903 18492 1838.0 1561.0 1698.3 17.7% 8.2% 295.3 251.3 260.5 17.5% 13.3% 195.2 111.1 191.6 75.8% 1.9%

Jubilant Life Sciences 139 2206 1427.7 1295.2 1424.3 10.2% 0.2% 229.4 249.0 254.8 -7.9% -10.0% 156.0 39.5 -79.5 294.9% LP

Merck 547 907 194.2 161.2 201.8 20.5% -3.8% 15.2 25.3 21.8 -39.9% -30.1% 9.4 20.1 15.8 -52.9% -40.1%

Shasun Pharmaceuticals 79 445 309.4 257.1 285.0 20.3% 8.6% 38.2 19.9 32.3 92.0% 18.2% 13.0 8.2 13.3 58.8% -2.2%

Strides Arcolab 369 2200 240.2 597.3 199.2 -59.8% 20.6% 27.7 127.9 35.2 -78.4% -21.4% 3525.2 62.2 2.2 5564.0% 159053.1%

Company NameCMP

(Rs)

M.Cap

(Rs crore)





Plastic Products

Jain Irrigation Systems 64 2766 1352.4 1064.9 1201.4 27.0% 12.6% 171.0 140.3 151.6 21.9% 12.8% 26.0 -47.0 -80.1 LP LP

Power Generation/Distribution

CESC 448 5592 1186.0 1022.0 1611.0 16.0% -26.4% 293.0 266.0 376.0 10.2% -22.1% 107.0 101.0 171.0 5.9% -37.4%

Gujarat Industries Power Company 56 853 348.0 369.2 323.7 -5.7% 7.5% 115.3 139.4 96.3 -17.3% 19.6% 42.6 69.9 31.3 -39.1% 36.2%

GVK Power & Infrastructure 9 1442 735.1 648.7 691.9 13.3% 6.2% 256.3 235.9 260.7 8.7% -1.7% -52.2 -40.2 -59.5 29.9% -12.3%

Jaiprakash Power Ventures 14 4066 492.4 399.2 968.5 23.4% -49.2% 276.4 267.9 761.0 3.2% -63.7% -153.1 -97.6 251.9 56.8% LP

Power Grid Corporation Of India 97 50982 3683.3 3361.7 3981.6 9.6% -7.5% 3105.4 2930.3 3388.7 6.0% -8.4% 1042.0 1129.1 1239.2 -7.7% -15.9%

Reliance Infrastructure 369 9707 3815.4 5276.9 4927.0 -27.7% -22.6% 669.1 775.2 763.7 -13.7% -12.4% 359.7 646.3 338.6 -44.3% 6.2%

Reliance Power 63 17714 1372.6 1463.8 1320.6 -6.2% 3.9% 500.2 492.6 431.2 1.5% 16.0% 267.2 265.7 250.5 0.6% 6.7%

The Tata Power Company 75 17798 8656.1 8991.7 8717.1 -3.7% -0.7% 1626.8 1770.2 1676.2 -8.1% -2.9% -13.7 -291.8 120.4 -95.3% LP

Real Estate

Jaypee Infratech 19 2646 987.8 933.1 796.6 5.9% 24.0% 357.1 422.4 354.1 -15.5% 0.8% 101.2 155.1 103.8 -34.7% -2.5%

Oberoi Realty 184 6054 169.0 284.8 185.5 -40.7% -8.9% 89.8 170.7 86.1 -47.4% 4.3% 68.1 134.5 64.1 -49.4% 6.1%

Omaxe 123 2252 337.8 561.7 360.7 -39.9% -6.4% 51.2 74.6 48.4 -31.3% 5.9% 16.3 28.7 18.2 -43.3% -10.6%

Prestige Estate Projects 138 4828 429.5 487.7 472.3 -11.9% -9.0% 131.9 142.4 118.7 -7.4% 11.1% 80.6 92.1 77.6 -12.5% 3.8%

Puravankara Projects 66 1566 264.4 302.3 295.6 -12.5% -10.5% 86.1 157.7 120.8 -45.4% -28.7% 19.4 61.8 46.0 -68.6% -57.8%

Sobha Developers 275 2692 542.9 428.8 540.0 26.6% 0.5% 149.0 137.4 143.3 8.4% 4.0% 58.3 52.6 56.6 10.8% 3.0%

Refineries

Chennai Petroleum Corporation 63 937 11355.9 11593.0 13098.7 -2.0% -13.3% 24.6 -246.0 383.2 LP -93.6% -96.8 -464.8 120.3 -79.2% LP

Shipping

The Great Eastern Shipping Company 289 4360 752.6 751.8 770.4 0.1% -2.3% 319.9 319.0 391.6 0.3% -18.3% 101.5 191.8 160.6 -47.1% -36.8%

Sugar

Balrampur Chini Mills 40 988 690.7 949.9 568.3 -27.3% 21.5% -8.1 118.4 -63.1 LP -87.2% -50.8 60.2 -122.1 LP -58.4%

Company NameCMP

(Rs)

M.Cap

(Rs crore)





Telecommunication

Reliance Communications 125 25862 5057.0 4797.0 5266.0 5.4% -4.0% 1599.0 1488.0 1854.0 7.5% -13.8% 145.0 114.0 714.0 27.2% -79.7%

Textile

Himatsingka Seide 54 527 499.2 433.2 539.4 15.2% -7.5% 52.0 43.5 54.8 19.5% -5.1% 15.9 11.4 16.8 39.4% -5.3%

Mandhana Industries 232 769 383.6 310.1 402.1 23.7% -4.6% 53.3 55.1 54.0 -3.3% -1.3% 7.0 20.6 16.9 -66.0% -58.6%

Vardhman Textiles 356 2264 1416.0 1083.2 1279.5 30.7% 10.7% 345.9 225.8 345.6 53.2% 0.1% 175.2 83.6 177.8 109.6% -1.4%

TV Broadcasting & Software Production

Sun TV Network 363 14288 508.3 485.9 466.4 4.6% 9.0% 372.0 376.3 337.7 -1.1% 10.2% 185.8 189.9 169.2 -2.2% 9.8%

Tyres & Allied

MRF 18798 7973 3197.1 3023.5 3145.7 5.7% 1.6% 418.9 403.1 435.7 3.9% -3.9% 179.9 180.2 184.1 -0.2% -2.3%

Company NameCMP

(Rs)

M.Cap

(Rs crore)


Ventura Securities Limited Corporate Office: C-112/116, Bldg No. 1, Kailash Industrial Complex, Park Site, Vikhroli (W), Mumbai – 400079

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