stock recommendation for today: buy stock of pnb and neutral view on jindal steel & power

8/12/2019 Stock Recommendation for Today: Buy Stock of PNB and Neutral View on Jindal steel & Power

1/21

PNB : "BUY" 24th Mar 2014

We upgrade PNB from neutral to add rating on account of external factors like better than expected GDP growth and CAD numbers whic

showing some improvement along with softening inflation numbers. Recently market sentiments are also booted on account of opinion po

result which revealed that BJP led NDA would close to formation of Government in coming general election. We raised our price target t

Rs.700 from Rs.600 earlier. ............................................................. ( Page : 5- 7)

Jindal steel & Power : Challenging Fundamentals "NEUTRAL" 24th Mar 2014

The Company has embarked on expansion projects of US$9bn in steel and power, backed by resource availability and steady cash flows

Improving free-cash-flows and volumes would be visible from end-FY15. Profitability is geared to iron ore and coal, which, against the presen

backdrop of improving iron-ore prices and higher coal consumption, would drive a re-rating. The stock quotes at 1.1x FY14e P/B. We initiate ou

coverage on this stock with a target of Rs.285/share on the basis of improving steel business, and Recommend Neutra

.................................................................. ( Page : 2-4)

No doubt the stock's fundamentals are good and also available at a cheaper rate comparing to its early trade . In the previous one month th

stock performed well & recover 20-22% from its estimated low of CY2013. We didn't expected this rise to be so fast.The CMP was estimated fo

a medium term target price looking at its earnings and fundamentals . How ever the target price got achieved few days back. we believe th

stock's fundamental is still good and price too cheap also , but for the earning up gradation and revised target price we would like to see the 1s

quarter earnings, hence we recommend Book Profit on the stock at a price range between Rs.1253 to Rs.131

......................................................................... Pa e : 18- 20

IEA-Equity

Strate

24th Mar, 20

Edition : 230

ACC Limited :

KPIT Tech: "On billion dollar journey" "BUY" 19th Mar 2014

Impressive organic growth despite inorganic thrust (acquired 10 companies in the last 10 yrs), Potential option value from success of its hybr

engine venture Revolo (on trial). KPIT has targeted to reach $1bn sales by 2017. Its differentiated positioning and competitive edge in its focu

areas, imperatives to the success of smaller-sized IT vendors impress to investors. ........................................................................ ( Page : 1617

HDFC Bank : "HOLD" 20th Mar 2014

Profitability of bank is likely to report better in next few quarters on the back of mobilization of FCNR deposits which would reflect better N

growth for being a low cost carry, RBI allowed banks to use counter cycle buffer for making specific provisions against bad loans, declining shar

of priority sector lending but still met regulatory requirement and exempted foreign deposits with tenure more than 3 years from SLR, CRR an

PSL. Now the economy is witnessing some sign of revival and market sentiment boost up on account of exit poll result. We raised our price

target to Rs.760/share which is upper side of our valuation band. . ................... ( Page : 13-15)

Persistent System : "Persistently innovating.." 21th Mar 2014

We cover Persistent System as one of the few companies in the tier-II with potential to grow revenue at a range of 18-20%, specially focused o

emerging business and relationship building with marquee clients. Despite better predictability of growth and attractive visibility of its expansio

in new emerging verticals, we advice to book profit on the stock because of its premium valuation. ............................................................

Pa e : 8-9

"BOOK PROFIT"

TCS : " Strong Fundamentals" "BUY" 20th Mar 2014

On Mid Quarter Analyst Meet, TCS commented on weak revenue growth momentum for 4QFY14E due to weak seasonality. Growth in 4QFY14

would be lower than the preceding quarter and margin would decline 40-50 basis points on cross currency movement and higher investments

However, sigh of relief was seen on FY15E outlook and comments on overall demand environment. .................................................................

Page : 10-12 )

"BOOK PROFIT" 18th Mar 2014

Narnolia Securities Ltd,

India Equity Analytics aily Fundamental Report on Indian Equities


2/21

Jindal steel & Power

265

285

NA8%

NA

532286

24796

11158

6495

1M 1yr YTD

solute 6.9 -21.7 -27.9

l. to Nifty 0.5 -36.3 -37.6

3QFY14 2QFY14 1QFY13

omoters 59.7 59.1 59.1

21.9 21.3 20.8

4.7 6.2 6.7

hers 13.7 13.3 13.4

Financials : Q3FY14 Y-o-Y % Q-o-Q % Q3FY13 Q2FY1

Revenue 5377 12.0 7.9 4802 498EBIDTA 1701 -5.0 16.7 1790 145

Net Profit 562 -35.2 24.3 867 45

EBIDTA% 32 -15.1 8.2 37 2

NPM% 10 -42.1 15.2 18 (In Cr

tial Coverage Neutral

side

ange from Previous

MP

rget Price

evious Target Price

The consolidated turnover was up by 12% to Rs.5377 Cr against Rs. 4683 Cr in previou

year period. Net Profit is after tax for the quarter is Rs. 562Cr (Rs. 867 Cr in Q3FY13). Th

steel business in volume and value terms grew by 11% and 7% respectively compared t

the previous quarter.

JSPL achieved a spectacular growth in its export volumes which in volume and valu

terms grew by 32% and 104% for the same period last year. The Company has receive

Rail order from DFCC for the prestigious Delhi Kolkata corridor and export order fromFerrotech Alloys, UK.

JSPLsretail segment has been very successful and the sale during Q3 FY14. Jindal Powe

Ltd., a subsidiary of JSPL sales grew by 17.7% while PBT and PAT increased by 16.9% an

15.7% respectively in Q3 this year compared to Q3FY13.Net Sales of the company

expected to grow at a CAGR of 6% over 2012 to 2015E respectively.

erage Daily Volume (Nos.)

E Code

JINDALSTEL

fty

Balance sheet at inflection point:In the past three years, 3bn dollar has been spent o

expansion, and a further 6bn will be expended in the next three years. The expansion ha

been supported by the strong business cash flows. However, the net-debt-to-EBITD

level has hit 3.7x due to delayed cash flows, though the leverage ratio is likely to hav

peaked.

Steel segment improving : Steel sales volumes of Jindal Steel and Power are likely t

have improved in 3QFY14, to 0.75m tons. On the changing business and client mix, price

are likely to have been better. Export opportunities in the quarter due to favorabl

currency could have offset the impact of iron ore realizations and would have improve

EBITDA, aided by stable costs. The Shadeed Oman HBI business, iron ore and coking coamine are likely to have been stable.Management expects the companys total stee

capacity, both in India and overseas, to increase around 8 million ton as compared t

current 3 million ton by the end of the fiscal.

Please refer to the Disclaimers at the end of this Report.

ock Performance-%

are Holding Pattern-%

yr Forward P/B

Source - Comapany/EastWind Research

arket Data

Challenging Fundamentals

E Symbol

wk Range H/L

kt Capital (Rs Crores)

362/181

The Company has embarked on expansion projects of US$9bn in steel and powe

backed by resource availability and steady cash flows. Improving free-cash-flows an

volumes would be visible from end-FY15. Profitability is geared to iron ore and coa

which, against the present backdrop of improving iron-ore prices and higher coaconsumption, would drive a re-rating. The stock quotes at 1.1x FY14e P/B. We initiat

our coverage on this stock with a target of Rs.285/share on the basis of improving ste

business, and Recommend Neutral.

"Neutral"24th March' 14



3/21

overage :

Products

Mining

ants Locations

indal Industrial Park (Chhattisgarh)

Raipur Division (Chhattisgarh)

Tamnar (Odisha)

Angul (Odisha) Zambia

Barbil (Odisha) Tanzania

Tensa - (Jharkhand)

Patratu (Jharkhand) Australia

3

Earning Ratios

Revenue & Growth

EBIDTA & Margin

Mozambique

South America

usiness Areas

Madagascar

ndal Steel and Power Limited started as a steel manufacturing company, enhanced the

mpany position as a major steel producer and diversified into various other sectors

ch as:

Petroleum

Cement and Infrastructure.Power Generation & Trading

Global Presence

Earning Ratios

Semi-Finished Products

Power

Ferro Chrome

Silico Manganese

Sponge Iron

abilizing Power segment:With a steady performance and power sales to Rs.1130 Cr

3QFY14 (Rs.1068Cr in 3QFY13), the PLF in 3QFY14 would have held at ~100%, helping

aintain realizations. Capped realizations and the power-surplus situation would have

sed downside risks to earnings.

ndal Steel and Power Limited (JSPL) is one of Indiasmajor steel producers with a

gnificant presence in sectors like Steel, Mining, Power Generation and Infrastructure.

ith an annual turnover of over US$ 3.6 billion, JSPL is a part of the over US$ 18 billion

versified O. P. Jindal Group. In the recent past, JSPL has expanded its steel, power and

ning businesses to various parts of the world particularly in Asia, Africa and Australia.

e company has committed investments exceeding US$ 30 billion in the future and has

veral business initiatives running simultaneously across continents. The company

oduces economical and efficient steel and power through backward and forward

tegration.

Rails

Parallel Flange Beams

Plates & Coils

Angels & Channels

TMT Re-bars

Wire Rods

Oman (Middle East)

EBIDTA & Margin

Debt Structure

indal steel & Power

Fabricated Sections



4/21

FY10 FY11 FY12 FY13

11092 13112 18209 19807

60 82 142 136

11152 13194 18351 19943

4197 5078 5311 6151273 415 591 641

774 1303 5513 7020

5244 6795 11415 13812

5848 6317 6793 5994

997 1151 1386 1539

358 260 360 758

4553 4988 5189 3833

919 1184 1186 922

3573 3754 3965 2910

34 27 22 14

6.3 4.6 2.8 1.5

FY10 FY11 FY12 FY13

93 93 93 93

10324 14017 18018 21159

10417 14110 18111 21252

5330 5549 11180 15402

3274 8428 4569 8247

17 25 34 33

2266 2573 1251 1398

2036 3081 4111 4884

25122 36091 45008 57073

14 20 31 20

9883 14824 16463 192557947 10041 92 19230

1090 1527 2181 2421

1431 2773 3580 4524

753 1154 1307 1954

113 480 149 200

3464 4852 6927 8079

25122 36091 45008 57073

FY10 FY11 FY12 FY13

6.3 4.6 2.8 1.5

32.0 28.5 21.6 14.6

52.4 47.9 37.0 30.117.8 12.8 11.2 6.1

4.2 1.9 2.3 3.2

#N/A #N/A #N/A #N/A

4

tal Income

her Expenses

penditure

ITDA

epriciation

indal steel & Power

L PERFORMANCE

ost Of Projects & Contractualmployee benefit Expence

et Revenue from Operation

her Income

BT

et tax expense / (benefit)

AT

eighted Average Cost of Debt %

ebt/Equity (debt/debt+networth or

ITDA %OCE%

ATIOS

PM %

pital work-in-progress

ng-term loans and advances

ventories

ade receivables

ort-term loans and advances

tal Assets

B

tal liabilities

sh and bank balances

tangibles

ngible assets

S PERFORMANCE

are capital

serve & Surplus

tal equity

ng-term borrowings

ort-term borrowings

ng-term provisions

ade payables

ort-term provisions

terest Cost

OE%

B



5/21

641

700

6009

17

1M 1yr YTD

bsolute 18.9 -19.7 -19.7

el.to Nifty 14.0 -30.2 -30.2

Current 4QFY13 3QFY1

omoters 58.9 57.9 57.9

I 17.5 17.9 18.0

I 18.5 18.4 19.1

hers 5.1 5.9 5.1

Financials Rs, Cr

2011 2012 2013 2014E 2015E

NII 11807 13414 14857 16536 17691

Total Income 15420 17617 19072 20775 21930

PPP 9056 10614 10907 11155 12500

Net Profit 4433 4884 4748 3408 5209

EPS 140.6 144.0 134.3 94.1 143.9

kt Capital (Rs Cr)


Creation of fresh slippage lower, impaired asset high but showi

improvement

hange from Previous

NB Vs Nifty

hare Holding Pattern-%

7.4 cr

fty 6495

(Source: Company/Eastwind)

wk Range H/L

During the last quarter PNB experienced improvement of asset quality especially

fresh slippage front. Fresh addition in GNPA was declined by 52% sequential to R

1142 cr as against average run rate in last ten quarter was Rs.2124cr. In percenta

to gross advances, slippage ratio came down to 1.4% versus 3% in 2Q and 4.7%

1Q. Cash recoveries were better which drag net NPA to 2.8% from 3.1% in previo

quarter. Further bank restructure Rs. 2115 cr in 3QFY14 mainly come from pow

sector which was offset by similar amount of bond received from SEBs. Ba

management has not indicated restructure pipeline in near term which means stab

to improving asset quality trend could be seen.

Margin expansion on the back of shifting concentration of portfolio mix and

CASA growth

During the last quarterbanksmargin expanded by 10 bps QoQ despite of modera

loan growth. Bank witnessed 9.7% YoY loan growth led by SME growth of 21.6

and retail segment growth of 17.5%. Retail and SME segment are high yield

nature. Furtherbankslow cost deposits CASA increased by 13% in absolute term

which saving account supported with 14% growth current account 7% YoY. B

overall deposits declined by 20% led by 33% declined of term deposits which inflat

CASA ratio to 38.3% from 27%. Sequentially cost of fund declined by 25 bps wh

yield on loan declined by 11 bps on account of creation of low deposits franchise a

shifting of portfolio.

Over the last one month, PNB has outperform Nifty by 14% and Bank Nifty b

5.7% largely on account of external factor like economy and fiscal defic

showing some positive trend, softening of inflation from its peak level. Mark

sentiment are also boosted by recent opinion poll result which revealed BJ

led NDA would come to power and economy would revived. Although we lik

Bank of Baroda over PNB but former is trading close to our target price. W

value PNB at Rs.600 to Rs.775 per share implying 0.6 to 0.75 times of one ye

forward book depending upon current economy scenario and banks ow

fundamental. Looking at current fundamental and market sentiments w

believe bank would trade in the range of Rs.600 to Rs.700.

In the subsequent section we will discuss two positive fronts that bank h

witnessed in last quarter result (a) asset quality improvement especially

fresh slippage side, (b) margin expansion. We will discuss the possibilvaluation contraction from current level.

MP

arget Price

evious Target Price

verage Daily Volume

19646

PNB

arket Data

pside

890/400

SE Code 532461

SE Symbol PNB

ompany update ADD

"ADD"24th March2014



6/21

urrent Valuation Range

PNB


anagement guided stable NIM, more focus on liability rather than asset yield

ccording to bank management, PNB is focusing more on liability side rather than yield.

ank has reduced high cost bulk deposits from Rs.880 bn in Sept.2012 to Rs.220 bn in

ec.2013 and certificate of deposits came down to Rs.110 bn from Rs.240 bn inQFY13. Share of low cost deposits improved to 40% which would help bank to maintain

M at 3.5% according to management.

aluation & View

e upgrade PNB from neutral to add rating on account of improving sign of economy led

y CAD number and softening of inflation. Recently market sentiments are also boosted

p due to exit poll result which revealed that BJP led NDA government would be close to

overnment formation in coming general election. In our valuation matrix, we value in the

nge of 0.6 times to 0.75 times of F14E book depending upon banksfundamental and

arket sentiment. Looking at current market sentiment and fundamental, we value bank

the range of Rs.600 to Rs.770 per share. We have added rating on the stock withrrent price target of Rs.700.



7/21

PNB

nancial & Assuption

Source : Eastwind/ Company



ncome Statement 2011 2012 2013 2014E 2015E

terest Income 26986 36476 41893 43513 49565

terest Expense 15179 23062 27037 26977 31875

II 11807 13414 14857 16536 17691

hange (%) 39.3 13.6 10.8 11.3 7.0

on Interest Income 3613 4203 4216 4240 4240

otal Income 15420 17617 19072 20775 21930

hange (%) 27.6 14.2 8.3 8.9 5.6

perating Expenses 6364 7003 8165 9621 9430

re Provision Profits 9056 10614 10907 11155 12500

hange (%) 23.6 17.2 2.8 2.3 12.1

rovisions 4622 3577 4386 6253 5059

BT 4433 7037 6522 4902 7442

AT 4433 4884 4748 3408 5209

hange (%) 13.5 10.2 -2.8 -28.2 52.8

alance Sheet

eposits( Rs Cr) 312899 379588 391560 450294 517838

hange (%) 25 21 3 15 15

f which CASA Dep 120325 134129 153344 139752 153766

hange (%) 18 11 14 -9 10

orrowings( Rs Cr) 31590 37264 39621 47857 44728

vestments( Rs Cr) 95162 122703 129896 143572 149094

oans( Rs Cr) 242107 293775 308725 339598 356578

hange (%) 30 21 5 10 5

atio

vg. Yield on loans 8.7 9.7 10.3 9.6 10.5

vg. Yield on Investments 6.0 6.4 7.4 7.2 7.8

vg. Cost of Deposit 4.4 5.6 6.5 6.4 6.6

vg. Cost of Borrowimgs 4.4 4.5 3.9 4.0 4.1

aluation

ook Value 682 820 924 1000 1107

MP 1220 926 759 543 543/BV 1.8 1.1 0.8 0.5 0.5


8/21

Persistent System.

Footing on Product Business, and working aggressively on new emerging services;

11%

Key facts from Management Interview to Media( on 20th

March,2014)

1M 1yr YTD

bsolute 1.1 76.8 85.7

l. to Nifty 3.4 75.8 82.3


omoters 38.96 38.96 38.96

18.26 15.28 14.84

I 18.78 21.23 19.31

hers 24 24.53 26.89

3QFY14 2QFY14 (QoQ)-% 3QFY13 (YoY)-%

432.75 432.37 0.1 332.98 30.0

104.3 100.8 3.5 82.4 26.6

64.2 60.8 5.6 49.5 29.7

24.1% 23.3% 80bps 24.7% (60bps

14.8% 14.1% 70bps 14.9% (10bps

year forward P/E-x

Rs, Cro

(Source: Company/Eastwi



4236

"Persistently innovating.."

MP 1059

rget Price 1070

On recent management Interview, Persistent System announced its new footing

dedicated product business unitAccelerite to align its business strategy combined w

Products and IP (Intellectual Property) based on SMAC (Social, Mobility, Analyti

Cloud) platform.

fty


6483

ock Performance

PERSISTENT

wk Range H/L 1220/477

erage Daily Volume 12139

arket Data

E Code 533179

SE Symbol

PAT

(1) Persistent System is setting up a unit related to product and Product services, named

Acceleriteto manage efficiently. They are taking some of its IP led products into t

Accelerite. We expect that company is able to compete as a product company, whi

Accelerite will in the market.(2) Management expects that the overall trends are looking good on Industry per se a

new emerging segment will play a major role for growth. Now, clients are moving into n

changes and focusing into new services and solution.

(3) For 4QFY14E, muted set of growth could be seen and expecting Intellectual Proper

(IP) growth this quarter.

(4) The business outlook though is very positive in the sense, and they are seeing go

opportunities, good pipeline growth and many good interesting deals being signed.

(5) Persistent system is expecting to see IP led growth at a range of 18-19% in FY14E a

20%+ in FY15E driven by HPCA without any addition of new IPs. At same point of tim

they are also looking to scale strong potential of rCloud after adding new capabilities.

EBITDA Margin

PAT Margin

ompany update Book Profit

Persistent management suggests that deal pipeline are looking strong and seeing go

activity and traction in the market across the board. Its focus on some of new

technologies like cloud, analytics and mobility, M2M, digital transformation are gaini

a lot of traction because of pickup in demand environment. Because of active

investment in these themes, management is very confident to see healthy growth.

View and Valuation: The companys focus is shifting greater proportion to IP led servic

and company has marquee clientele in cutting-edge technologies around cloud, mobili

digital and analytics; witnessing faster growth. Considering the companys premiu

valuation, we advice Book Profit on the stock. At a CMP of Rs 1059, stock trades

13.4x FY15E earnings. Our view could be change with management guidance, high

currency flactuations and post earnings of coming quarter.

Financials

Revenue

EBITDA

We cover Persistent System as one of the few companies in the tier-II with potential

grow revenue at a range of 18-20%, specially focused on emerging business a

relationship building with marquee clients. Despite better predictability of growth a

attractive visibility of its expansion in new emerging verticals, we advice to book pro

on the stock because of its premium valuation.

ange from Previous

evious Target Price 960

pside 1%

"Book Profit"21st Mar' 14



9/21

inancials


Persistent S stem.


perating Metrics


2QFY12 3QFY12 4QFY13 1QFY13 QFY13 3QFY13 4QFY13 1QFY14 2QFY14 3QFY14

op1 16.0% 15.9% 17.2% 17.8% 20.7% 21.1% 21.6% 21.2% 22.5% 19.8%

op 5 38.6% 37.0% 36.6% 33.5% 36.3% 37.3% 36.7% 34.7% 36.4% 36.9%

op 10 49.4% 48.3% 48.8% 45.3% 47.0% 49.4% 47.9% 46.0% 47.3% 46.9%

nsite - Linear 12665 12387 12603 12789 12863 12772 14014 14567 14283 14510

ffshore - Linear 3803 3778 3895 3898 3978 4032 4143 4111 4109 4179

eild per Employee(excld- Trainee) 3208 3247 3350 3345 3746 3817 3769 3602 3919 3934

otal Employee 6900 6706 6628 6536 6370 6719 6970 7144 7457 7602

ttrition 17.7% 17.4% 18.3% 18.9% 16.9% 16.0% 14.4% 14.2% 14.0% 13.2%

tilization rate %(xclude IP Led ) 73.8% 74.1% 71.7% 74.1% 75.2% 77.3% 72.5% 70.0% 71.7% 72.9%

lling Rate-USD/ppm

mployee Metrics

ient Concentration

s in Cr, FY10 FY11 FY12 FY13 FY14E FY15E

ales 601.16 775.84 1000.3 1294.5 1666.59 2061.7

mployee Cost 368.74 481.62 599.05 719 899.96 1123.6ost of technical professionals 0 30.67 41.68 54 91.66 113.39

ther expenses 86.05 105.24 135.2 218 291.65 366.99

otal expenses 454.79 617.53 775.93 990.78 1283.28 1604.0

BITDA 146.37 158.31 224.37 303.72 383.32 457.70

epreciation 33.52 42.39 61.1 78 100.55 93.54

ther Income 11.23 34.44 34.44 34.44 55.00 72.16

BIT 112.85 115.92 163.27 225.44 282.76 364.16

nterest Cost 0 0 0.00 0.03 0.05 0.05

rofit (+)/Loss (-) Before Taxes 124.08 150.36 197.71 259.851 337.71 436.28

rovision for Taxes 9.05 10.62 55.09 75.37 92.03 119.98

et Profit (+)/Loss (-) 115.03 139.74 142.62 184.481 245.69 316.30

rowth-% (YoY)

ales 1.2% 29.1% 28.9% 29.4% 28.7% 23.7%

BITDA 60.2% 8.2% 41.7% 35.4% 26.2% 19.4%

AT 74.1% 21.5% 2.1% 29.4% 33.2% 28.7%

xpenses on Sales-%

mployee Cost 61.3% 62.1% 59.9% 55.5% 54.0% 54.5%

ther expenses 14.3% 13.6% 13.5% 16.9% 17.5% 17.8%

ax rate 7.3% 7.1% 27.9% 29.0% 27.3% 27.5%

Margin-%

BITDA 24.3% 20.4% 22.4% 23.5% 23.0% 22.2%

BIT 18.8% 14.9% 16.3% 17.4% 17.0% 17.7%

AT 19.1% 18.0% 14.3% 14.3% 14.7% 15.3%

aluation:

MP 310 366.7 409.2 541 1059 1059

o of Share 4 4 4 4 4 4

W 639.0 747.1 840.5 1018.3 1212.5 1477.3

PS 28.8 34.9 35.7 46.1 61.4 79.1

VPS 159.7 186.8 210.1 254.6 303.1 369.3

oE-% 18.0% 18.7% 17.0% 18.1% 20.3% 21.4%

/BV 1.9 2.0 1.9 2.1 3.5 2.9

/E 10.8 10.5 11.5 11.7 17.2 13.4


10/21

TCS

Key facts from Management Commentary:

1M 1yr YTD

solute -5.9 29.9 67.2

l. to Nifty -13.3 18.8 57.1


omoters 73.9 73.96 73.96

16.33 16.09 15.67

5.26 5.58 5.90

hers 4.51 4.37 4.47


21294 20977.2 1.5 16069.93 32.5

6686.76 6633.0 0.8 4660.49 43.5

5333.43 4633.3 15.1 3549.61 50.3

31.4% 31.6% (20bps) 29.0% 240bp

25.0% 22.1% 290bps 22.1% 290bp


fty 6524

ock Performance

year forward P/E

Rs, Cro



(5) Currency will play a small role with marginal impact of cross currency movement a

average currency movement. There may be some accounting changes related

recognition of forex gains or losses, but it is not likely to be material.

View and Valuation:We continue to remain positive on its demand outlook and marg

profile, the management expects for robust deal pipeline going forward and also expec

to materialize its emerging space like Digital as well as Cloud, Mobility, Analytics and B

data. We expect, TCS will be star performer in growth sense than other peers. Hence, w

are maintaining 17% (revised from 18%) revenue growth in dollar term for FY1

because of improved demand environment, while NASSCOM expects 12-14% for t

Industry. At a price of Rs 2041, it is trading at 18x FY15E earnings, We maintain" BU

view on the stock with a target price of Rs 2510.

Financials

Revenue

EBITDA

EBITDA Margin

PAT Margin

PAT

Mid Quarter's Analyst Meet: Lower than expected growth for 4QFY14E, but still bett

outlook for FY15E than FY14E,

" Strong Fundamentals"

MP 2041

rget Price 2510

ompany update Buy

On Mid Quarter Analyst Meet, TCS also commented on weak revenue grow

momentum for 4QFY14E followed by Infosys due to weak seasonality. Growth4QFY14E would be lower than the preceding quarter and margin would decline 40-

basis points on cross currency movement and higher investments. However, sigh

relief was seen on FY15E outlook and comments on overall demand environment.

arket Data

E Code 532540

evious Target Price 2360side 23%

ange from Previous 6%

Now, revenue in 4QFY14E could be a bit lighter than what we had expected post 3QFY

earnings. We are not much surprise on comments on weak revenue as well as rampi

down on margin picture for current quarter. We believe that the 1QFY15E, the fi

seasonally strong quarter of the year, is the stern litmus test of TCSs confidence f

FY15E.

(1) For 4QFY14E, revenue would be lower than preceding quarter because of season

impacts, and domestic revenue may clock negative growth largely impacted by upcom

general election. However, no pressure would be seen on revenue for FY15E.

(2)Margin would decline by 40-50 basis points on cross currency movement and high

investments. However, company is expecting no hiccups on margin for long- te

prospect.

(3) The company is very optimistic on Europe, US and UK growth could be inline. Lat

America will see good growth. Europe will continue to do well, and the US and the UK w

be close to industry average. Middle East and APAC could be seen on flattish node.

(4) Across vertical, Media and Entertainment has reported better, Telecom rema

challenged. While, there could be some ray of growth because of higher penetration

Europe.


E Symbol TCS


kt Capital (Rs Crores) 433985

"BUY"20th Mar' 14



11/21

TCS.

there any setback?


o sign of any ramp down: Management suggests that Continental Europe will likely

ow ahead of overall company growth in FY15E. On vertical front, smaller verticals such

Energy & Utilities, Transportation and Life sciences & Healthcare might grow ahead of

erall company average. While, its mature verticals like BFSI and Retails could grow

ttish, Telecom continues to face structural issue. Contracts wins from continental

rope could change the shape of verticals. Still, we are not seeing any project ramp

wn.

ew emerging business on demand: A part of legacy business, the emerging

pportunities in helping large corporations tap areas such as social media and data

alytics are seen as increasingly contributing to the IT sector's next phase of growth. TCS

d its Indian competitors are winning a significant share of several 2nd and 3rd

neration renewal contracts as western companies look to both cut costs and moderniseeir IT infrastructure.

ales (USD) and Sales growth-%

onsidering above growth factors, we are not expecting any major concern with

mpany's growth. The company is also focussed to drive operational improvements in

e business and aims to expand reach in non-traditional markets and servicelines.


We expect 1% (QoQ) revenue growth

USD term for 4QFY14E,

nlike Infosys, TCS comments are based on potential impact from seasonally lower

mand in its biggest market (US and Europe) and weak domestic demand environment.

n previous comments, management had already quoted regarding demand volatility atme because of upcoming poll.

omparing with its nearest rival Infosys, TCS is not facing largely with any specific issue.

espite a weak commentary on 4QFY14E, management is aggressively confident to report

tter numbers in FY15E with healthy demand outlook. We are considering following

ctors for its growth story in FY15E.

ealthy Demand Environment:TCS is much confident on healthy demand outlook and

pects that FY15E could be better year than FY14E propelled by better discretionary

ending in the US. Management suggests that except India, other emerging markets

ontributes 18-19% of revenue) continue to see healthy demand. Also, in its FY15

venue growth models, India (contributes 7% of sales) is the only market which TCS

pects to be weak.



12/21

TCS.


nancials



s, Cr FY10 FY11 FY12 FY13 FY14E FY15

et Sales-USD 6339.0 8187.0 10171.0 11569.0 13531.7 16012

et Sales 30029.0 37325.1 48894.3 62989.5 81731.2 96073

mployee Cost 10879.6 13850.5 18571.9 24040.0 30060.7 35547verseas business expenses 4570.1 5497.7 6800.5 8701.9 11565.0 13930

ervices rendered by business associates and others 1262.0 1743.7 2391.3 3763.7 4952.9 5764.

peration and other expenses 4622.8 5054.3 6694.8 8443.9 10044.8 12009

otal Expenses 21334.4 26146.2 34458.5 44949.6 56623.4 67251

BITDA 8694.6 11178.9 14435.8 18040.0 25107.8 28822

epreciation 601.8 686.2 860.9 1016.3 1279.2 1503.

mortisation 59.1 49.1 57.1 63.7 57.5 76.7

ther Income 272.0 604.0 428.2 1178.2 1348.6 1921.

xtra Ordinery Items 0.0 0.0 0.0 0.0 0.0 0.0

BIT 8033.7 10443.6 13517.9 16960.1 23828.6 27318

terest Cost 16.1 26.5 22.2 48.5 35.9 33.8

BT 8289.6 11021.2 13923.8 18089.8 25141.3 29206

ax 1197.0 1830.8 3399.9 4014.0 5933.3 7009.

AT 7092.7 9190.3 10524.0 14075.7 19208.0 22196

AT (Reported PAT) 7000.6 9068.6 10414.0 13917.4 19208.0 22196

ales-USD 29.2% 24.2% 13.7% 17.0% 18.3%

ales 8.0% 24.3% 31.0% 28.8% 29.8% 17.5%

BITDA 21.3% 28.6% 29.1% 25.0% 39.2% 14.8%

AT 31.8% 29.6% 14.5% 33.7% 36.5% 15.6%

BITDA 29.0% 30.0% 29.5% 28.6% 30.7% 30.0%

BIT 26.8% 28.0% 27.6% 26.9% 29.2% 28.4%AT 23.6% 24.6% 21.5% 22.3% 23.5% 23.1%

mployee Cost 36.2% 37.1% 38.0% 38.2% 36.8% 37.0%

verseas business expenses 15.2% 14.7% 13.9% 13.8% 14.2% 14.5%

ervices rendered by business associates and others 4.2% 4.7% 4.9% 6.0% 6.1% 6.0%

peration and other expenses 15.4% 13.5% 13.7% 13.4% 12.3% 12.5%

ax rate 14.4% 16.6% 24.4% 22.2% 23.6% 24.0%

MP 780.8 1182.5 1322.0 1563.0 2041.0 2041.

o of Share 195.7 195.7 195.7 196.0 196.0 196.0

W 18466.7 24504.8 29579.2 38645.7 49940.0 62991

PS 36.2 47.0 53.8 71.8 98.0 113.2

VPS 94.4 125.2 151.1 197.2 254.8 321.4

oE-% 38.4% 37.5% 35.6% 36.4% 38.5% 35.2%

viden Payout ratio 28.1% 50.8% 37.5% 41.2% 41.2% 41.2%

/BV 8.3 9.4 8.7 7.9 8.0 6.4

/E 21.5 25.2 24.6 21.8 20.8 18.0

Margin -%

xpenses on Sales-%

aluation

rowth-%


13/21

HDFC Bank

741

760

720

36

1M 1yr YTD

bsolute 11.8 15.1 15.1

el.to Nifty 4.7 4.8 4.8


omoters 22.7 22.7 22.7

I 34.9 33.6 34.9

I 9.3 9.8 6.6

hers 33.1 33.8 34.2

Financials Rs, Cr

2011 2012 2013 2014E 2015E

NII 10543 12885 15811 18713 22944

Total Income 14878 18668 22664 26604 30835

PPP 7725 9391 11428 14516 15572

Net Profit 3926 5167 6726 8453 9119

EPS 84.4 22.0 28.7 36.0 38.9

MP

arget Price

We have raised our price target to Rs.760/share on account ofbankslikely

get benefit from FCNR deposits mobilization that it had recently raised. W

value bank in the range of Rs.660 to Rs.760 per share on the back of curren

fundamental and prevailing economic scenario. Now the economy

witnessing some sign of revival and market sentiment boost up on account

exit poll result. HDFC bank is likely to see earnings boost-up in near term o

account of mobilization of FCNR deposits which would reflect better NII fo

being a low cost carrying in nature, recently RBI allow banks to use 33%

buffer/floating provisions for bad loan and declining of low yielding PSL sha

in overall lending.

evious Target Price

arket Data

pside

SE Code 500180

Mounting bad loans have major cause of worry; RBI allowed banks to use 33%

of counter cycle, floating provisions for specific provisions

Recently RBI allows banks to use 33% of counter cycle provisioning buffer, floati

provisions for making specific provisions against impaired accounts which would he

bank to make lower provisions and hence boost up earnings. HDFC bank reportvery strong asset quality with GNPA and net NPA stood at 1% and 0.3% at the e

of December quarter. Bank would use counter cycle buffer, floating provisions fspecific provisions and make lower fresh provisions. This would be the result boosting up profitability.

verage Daily Volume

Counter cycle provisions and floating provisions are represented as capital reserv

that bank need to build up in good times and can only use for contingencies und

extra circumstance. This is the first time when central bank allows to use since th

reserve were created starting 2010. At the end of quarter all banks reported Rs.1.

trillion of GNPA, the rise of 39.4% YoY. In a very rough estimate, banking syste

has nearly about Rs. 2 trillion in bad loans and another Rs.4 trillion loans are beirestructured pipeline out of total Rs.82 trillion.

ompany update HOLD

176874

Raised foreign deposits higher amount in comparison to peers; likely to repo

better NII for being low cost in nature

750/528

SE Symbol HDFCBANK

wk Range H/L

hange from Previous

DFC Bank Vs Nifty

hare Holding Pattern-%

4.17 lakhs

fty 6524

kt Capital (Rs Cr)



ock Performance

In last quarter, HDFC bank has raised FCNR deposits to the tune of $3.4 bn nea

about Rs.21000 cr through RBI special window which carry interest rate of 3.5

while normal deposits rate are in the range of 6.5% to 7%. HDFC Bank raised larg

chunk of monies in compare to other banks like SBI and ICICI bank. SBI and ICI

bank raised monies through FCRN deposits to the tune of $2bn each. Furth

incremental foreign deposits with tenure are more than 3 years are exempted fro

SLR, CRR and PSL lending. This would help bank to lower cost of fund by 75 bps

100 bps and hence margin expansion. Bank management guided margin would be

the range of 4.1% to 4.5% going forward.

"HOLD"20th March.,2014



14/21

Source:Eastwind/Company

HDFC BANK


hare of PSL down sharply; release fund would be deployed in high yield sector

ecently share of PSL in HDFC bank came sharply but bank already met PSL target of

0% which means addition fund would be deployed in high yield segment which would

flect in NII growth. According to RBI, banks need to spend 40% in net advance in

ority sector lending and HDFC bank are among those which have highest share in PSL

private bank category. Additionally fund raised fund through FCNR deposits with

nure more than 3 years are exempted from SLR, CRR and PSL means bank would

ave higher fund for deploying in sector those are high yield in nature.

aluation & View

DFC bank is expected to report better earnings on the back of (a) likely to get benefit

om FCRN deposits mobilization, (b) recent RBI allow bank to use 33% of counter cycle

ffer provisions for specific provisions, this would help bank to make lower provisions

d hence profitability and (c) share of additional PSL lending would be deployed in high

elding sector. We have raised our price target to Rs.760/share which is upper side ofr valuation band.

aluation Band



15/21

HDFC BANK

nancials

Source: Eastwind/ Company



L 2011 2012 2013 2014E 2015E

erest/discount on advances / bills 15085 21124 26822 32002 40213

come on investments 4675 6505 7820 9311 10952

erest on balances with Reserve Bank of India 148 137 282 373 373

hers 20 108 141 65 65

tal Interest Income 19928 27874 35065 41751 51603

hers Income 4335 5784 6853 7891 7891

tal Income 24263 33658 41917 49642 59494

erest on deposits 8028 12690 16321 20281 24337

erest on RBI/Inter bank borrowings 1336 2253 2889 4571 4278

hers 20 47 44 44 44

erest Expended 9385 14990 19254 23038 28659

10543 12885 15811 18713 22944

Growth(%) 25.7 22.2 22.7 18.4 22.6

her Income 4335 5784 6853 7891 7891

tal Income 14878 18668 22664 26604 30835

tal Income Growth(%) 20.3 25.5 21.4 17.4 15.9

mployee 2836 3400 3965 4231 5342

her Expenses 4317 5878 7271 7857 9921

erating Expenses 7153 9278 11236 12087 15263

P( Rs Cr) 7725 9391 11428 14516 15572

ovisions( Incl tax provision) 3799 4224 4701 1751 6453

t Profit 3926 5167 6726 8453 9119

t Profit Growth(%) 33.2 31.6 30.2 25.7 7.9

ey Balance Sheet Data

posits 208586 246706 296247 355496 426596

posits Growth(%) 24.6 18.3 20.1 20 20

rrowings 14394 23847 33007 50785 47529

rrowings Growth(%) 11.4 65.7 38.4 54 -6

an 159983 195420 239721 299651 365574

an Growth(%) 27.1 22.2 22.7 25 22

vestment 70929 97483 111614 114580 156461

vestment Growth(%) 21.0 37.4 14.5 3 37

stwind Calculation

eld on Advances 9.4 10.8 11.2 10.7 11.0

eld on Investments 6.6 6.7 7.0 8.1 7.0

eld on Funds 7.7 8.9 9.3 10.1 9.9

st of deposits 4.3 5.6 6.0 6.5 6.2

st of Borrowings 9.4 9.6 8.9 9.0 9.0

st of fund 4.2 5.5 5.8 5.7 6.0

aluation

ok Value 545.5 127.5 154.3 189.4 222.3

BV 4.3 4.1 4.1 3.5 3.0

E 27.8 23.6 21.8 18.7 17.3


16/21

KPIT Tech.

Key Facts from recent Management Interview to media (on 12t

March, 2014)

1M 1yr YTD

solute -4.7 52.9 -

l. to Nifty -12 41.9 -


omoters 22.53 22.87 24.25

41.96 36.42 32.79

6.99 11.12 10.93

hers 28.52 29.59 32.03


677.93 702.76 (3.5) 567.02 19.6

103.5 108.1 (4.3) 94.1 10.0

66.7 66.7 0.0 48 39.0

15.3% 15.4% (10bps) 16.6% (130bp

9.8% 9.5% 30bps 8.5% 130bp

Expectation of margin improvement:The decline in SAP revenue has impacted the over

margins, and margin was seen almost flat at 15.4% in 2QFY14 and 3QFY14. We expect th

profitability from SAP business would support to shape up its margin in next couple

quarters. Even, Utilization rate in SAP has declined to below 90% at onsite and below 70

mark at offshore. This is expected to improve in FY15E. Management expects to see P

margin at double digit by next couple of quarters.

Auto Engineering Services; a growth driver: The global Automotive Industry h

witnessed a strong revival. US industry sales in 2013 finished at 15.6 million vehicles,

7.6% from 2012, and China became the first country in which more than 20-milli

vehicles were sold in any given year. Considering healthy demand outlook in Au

Industry, KPIT is seeing exports growth above the industry rates, driven by demand f

services around safety systems, intelligent driving, hybrid electric cars, fuel efficiency etc

Management expects revenues from Auto Engineering to exceed 30% of thecompan

revenues, in the next 3 years, as KPIT expected to achieve the mark of USD1b

revenues.

6517



fty

wk Range H/L 189/92

"On billion dollar journey"

MP 160

rget Price 185 SAP business back to growth trajectory: KPITsrevenue has been facing growth relat

issues on account of deficit in SAP business (contributes 24% of sales). Profitability on Sbusiness was also a challenge for the company. On 3QFY14 revenues from SAP was do

by 10% (QoQ). However, on the back of deal signings and visible deal pipeline, SAP shou

return into growth path in 4QFY14E and FY15E. Considering healthy demand environme

in FY15E, We expect that USD revenue growth in SAP could be in double digits.

evious Target Price -

ompany update Buy

16%

ange from Previous -

arket Data

SAP revival and Auto Engineering Services shape; a growth driver in near term,

side

E Code 532400

ice Performance

Rs, Cro


Incremental revenue by REVOLO and Systime: As per the management comment,

dream project REVOLO Technology REVOLO would play a key role to report

incremental growth in FY15E. KPITs acquisition Systime from Integrated Enterpr

Services (IES) segment would report healthy growth prospects at least over the ne

couple of years.

View and Valuation: Impressive organic growth despite inorganic thrust (acquired

companies in the last 10 yrs), Potential option value from success of its hybrid engi

venture Revolo (on trial). KPIT has targeted to reach $1bn sales by 2017. Its differentiat

positioning and competitive edge in its focus areas, imperatives to the success of smalle

sized IT vendors impress to investors.

E Symbol KPIT

ock Performance

3103


EBITDA Margin

PAT Margin

We expect that the company would report better earnings with margin ramp up a

signing of larger deals in next couple of quarters. Now, we upgrade our view on t

stock from Neutral to Buy with a price target of Rs 185. At a CMP of Rs 160, sto

trades at 9.5x FY15E EPS.

Financials

Revenue

EBITDA

PAT

"BUY"19th Mar' 14



17/21


nancials


KPIT Tech

perating Metrics


4QFY12 1QFY13 2QFY13 3QFY13 4QFY13 1QFY14 2QFY14 3QFY1

o. of Customers Added 4 3 4 2 5 6 3 3

o. of Active Customers 169 172 176 178 183 189 192 195

ustomers with run rate of >$1Mn 59 65 69 72 78 78 78 78

op Client Cummins 19.5% 20.6% 19.7% 19.1% 16.6% 16.8% 16.5% 17.9%

op 5 Clients 33.0% 36.3% 35.2% 36.8% 35.2% 38.6% 38.0% 38.2%

op 10 Clients 42.2% 44.0% 43.7% 45.2% 44.0% 47.3% 46.3% 47.6%

SO 90 75 75 70 75 77 75 76

otal Employee 7719 7873 8111 8286 8321 8456 8816 9136

nsite Utilization 94.5% 94.7% 94.5% 92.8% 94.3% 94.2% 92.4% 88.1%

ffshore Utilization 74.3% 74.1% 74.7% 72.9% 74.1% 73.4% 72.9% 71.3%

ient Metrics

ient Concentration

mployee Metrics

s, Cr FY10 FY11 FY12 FY13 FY14E FY15E

et Sales-USD 153.76 224.07 306.71 410.46 445.78 535.96

et Sales 731.64 987.05 1500.00 2238.63 2692.54 3215.75

mployee Cost 265.92 529.95 771.78 1140.79 1378.58 1640.03ther expenses 304.70 308.82 511.97 762.32 902.00 1061.20

otal Expenses 570.62 838.77 1283.75 1903.11 2280.58 2701.23

BITDA 161.02 148.28 216.25 335.52 411.96 514.52

epreciation 30.80 41.12 44.49 47.16 54.42 67.93

ther Income 1.20 6.74 13.82 11.74 12.12 24.12

xtra Ordinery Items -26.45 0.00 10.05 -1.30 -21.05 16.08

BIT 130.22 107.16 171.76 288.36 357.54 446.59

nterest Cost 2.74 3.78 7.32 13.99 24.31 24.56

BT 128.68 110.12 178.26 286.11 345.35 446.15

ax 16.91 15.49 43.67 76.55 96.70 122.69

AT 111.77 94.63 134.59 209.56 248.65 323.46

ales-USD -11.7% 45.7% 36.9% 33.8% 8.6% 20.2%ales-INR -7.8% 34.9% 52.0% 49.2% 20.3% 19.4%

BITDA -12.2% -7.9% 45.8% 55.2% 22.8% 24.9%

AT 169.6% -15.3% 42.2% 55.7% 18.7% 30.1%

BITDA 22.0% 15.0% 14.4% 15.0% 15.3% 16.0%

BIT 17.8% 10.9% 11.5% 12.9% 13.3% 13.9%

AT 15.3% 9.6% 9.0% 9.4% 9.2% 10.1%

mployee Cost 36.3% 53.7% 51.5% 51.0% 51.2% 51.0%

ther Exp 41.6% 31.3% 34.1% 34.1% 33.5% 33.0%

ax rate 13.1% 14.1% 24.5% 26.8% 28.0% 27.5%

MP 115.00 168.05 122.90 99.0 160.0 160.0o of Share 7.90 8.70 17.80 19.28 19.28 19.28

W 387.11 603.19 712.55 1036.23 1269.09 1570.00

PS 14.15 10.88 7.56 10.87 12.90 16.78

VPS 49.00 69.33 40.03 53.75 65.82 81.43

oE-% 28.9% 15.7% 18.9% 20.2% 19.6% 20.6%

ividen Payout ratio 6.4% 6.8% 4.9% 7.9% 6.3% 7.0%

/BV 2.35 2.42 3.07 1.84 2.43 1.96

/E 8.13 15.45 16.25 9.11 12.41 9.54

aluation

xpenses on Sales-%

Margin -%

rowth-%


18/21

ACC Ltd.

1253

1257

12570%

0%

500410

19634

9817

6063

Holcim eyeing Jaypee Group's cement grinding plant in Panipat

1M 1yr YTD

solute -3.5 -22.3 -21.0

l. to Nifty -1.9 -24.4 -22.8

Cureent 3QCY13 2QCY13

omoters 50.3 50.3 50.3 JP Associates looks to exit JV with SAIL

20.0 20.9 19.5

12.9 11.9 11.7

hers 16.8 16.9 18.6

Management Quotes :

Financials : Q4CY13 Y-o-Y % Q-o-Q % Q4CY12 Q3CY1

Net Revenue 2792 -12.2 8.6 3180 257

EBITDA 361 -9.3 26.2 398 28Depriciation 153 -3.2 6.3 158 14

Interest Cost 12 -55.6 9.1 27 1

Tax -36 -190.0 -170.6 40 5

PAT 278 16.3 129.8 239 12(In Cr

1

arket Data

E Code

ACC


According to Management the economic environment in the country was sluggish, thu

impacting the demand for cement and concrete. As a result, the company's cemen

volumes remained almost flat. The company appears not enthusiastic for demand growt

going forward. Based on current demand indications, we do not foresee any significan

improvement in the cement.


erage Daily Volume (Nos.)


MP

side

ange from Previous

esult Update Book Profit Nearly we saw a upward rally in stocks due to the forecasting of a stable governmen

after election by the market players. The sentimental effect on market is on positive sid

,hence the low valued stock like ACC took very less time like one month to come to it

near fare value, which we had estimated for a medium term target.

No doubt the stock's fundamentals are good and also available at a cheaper rat

comparing to its early trade . In the previous one month the stock performed well &

recover 20-22% from its estimated low of CY2013. We didn't expected this rise to be s

fast.The CMP was estimated for a medium term target price looking at its earnings an

fundamentals . How ever the target price got achieved few days back. we believe th

stock's fundamental is still good and price too cheap also , but for the earnin

upgradation and revised target price we would like to see the 1st quarter earnings, henc

we recommend Book Profit on the stock at a price range between Rs.1253 to Rs.1310.

E Symbol

rget Price

evious Target Price

fty


ock Performance-%


yr Forward P/B

Holcim Cements has expressed interest in the grinding unit which has an annual capacit

of 1.5 million tonnes per annum and the talks are at a preliminary stage. Holcim wants t

expand its presence in North India through this strategic asset and will take a call if thi

potential deal can be routed through ACC cements.ACC Cements has a cement plan

nearby in Himachal Pradesh and if JP's grinding unit is absorbed, it would be beneficia

logistically and even in terms of costs.

JP Associates,looking to sell its entire stake in its cement joint ventures with SAIL to cu

down its debt.The company is likely to part with its 74% stake in Bhilai and Bokar

cement plants that together have an installed capacity of 4.3 mtpa. As per the story , th

company is eying around Rs. 2900 crore from the deal with cement major ACC.The deawith ACC if it happens would imply enterprise value of USD 147 per MT as against US

127 per MT it got for Gujarat plant sale.

"Book

Profit"18th March' 14



19/21

utlook

luation And Recommendation

ompany Description :

Margin Gap

Margin Gap

CY11 CY12 CY13 CY14E

10237 11358 11169 13027

191 263 219 219

10428 11621 11389 19723

2199 2384 2384 0

1940 2219 2299 0

8316 9162 9540 10942

1921 2197 1848 2084

510 569 584 639

97 115 52 50215 391 132 323

1276 1050 1094 1292

17.7 18.8 13.8 15.3

19


x

AT

OE%

wer and fuel

eight and forwarding

penditure

ITDA

ACC Ltd.

L PERFORMANCE

et Revenue from Operation

her Income

Cement Sales Volume

Cement Realization

Cement Realization

Cement Realization

Per Ton Analysis

Per Ton Analysis

Cement Realization

CC Limited (ACC) is engaged in manufacture of cement & ready mixed concrete. The

ompany has grinding plants in Karnataka and clinkering line in Maharashtra. The

ompanyssubsidiaries include ACC Mineral Resources Limited, Lucky Minmat Limited,

lk Cement Corporation (India) Limited, National Limestone Company Private Limited

d Encore Cement and Additives Private Limited. The Company is subsidiary of Ambujament India Private Limited.

ment prices witnessed an increase during Oct-Nov,13 but also witnessed a sharp fall

ring Dec,13 which has contributed towards lower average realizations for the year for

e company.Further,with a strong balance sheet with zero debt and better dividend

eld of 3%,we continue to remain positive despite near term challenges.We revise our

timates downwards to factor in lower demand growth scenario. At current price of Rs

53, stock is trading at 2.8x P/B and 2.8x P/B on CY14 estimates.Valuation looks good

r this company,but we would like to see the 1st quarter for earning upgrading hence

e recommend Book Profit on the stock at a price range between 1253 to 1310.

ompany has made several capacity expansion plans in the region. ACC is replacing the

isting facilities at Jamul, Chhattisgarh with a clinker plant with an annual production

pacity of 2.8 MT and local grinding capacity of 1.1 MT of cement, while a new plant

th annual capacity of 2.7 MT is scheduled to be built in Kharagpur. The capacitypansion plant will increase the company's total cement production capacity to 35 MT

om the existing 30 MT.On a QoQ basis, the EBITDA/tonne improved 10.4% due to an

provement in realisations & comparatively lower increase in total expenditure/tonne,

shows a positive view for the further quarters.onsidering the expansion plans we

pect 4% growth in sales volume and 10% growth in realization for CY14.

terest Cost

tal Income

epriciation



20/21

CY10 CY11 CY12 CY13

6281 6979 7372 7813

510 506 85 0

14 0 0 0

188 126 157 891581 816 661 642

1466 1051 1227 1081

11041 11921 11928 12101

77 48 39 40

5230 6359 5893 6040

1564 370 314 322

283 461 566 880

926 1113 1134 1122

249 266 303 397

1086 1660 681 506

162 279 325 340

11041 11921 11928 12101

CY10 CY11 CY12 CY13

3.2 3.1 3.6 2.7

57.4 68.7 73.8 57.6

3.0 2.6 2.7 3.6

19.1 8.0 5.8 5.7

19632 20180 26240 20296

18.7 16.5 19.4 19.2

12.7 10.5 11.9 12.5

2.8 2.5 2.1 2.7

14.6 15.2 16.3 12.3

0.1 0.1 0.0 0.01.0 1.3 1.4 1.4

ading At :

20

rrent Ratio

vidend Yield%

OCE%

ventories

ng-term loans and advances

pital work-in-progress

ade payables

V

editors to Turnover%

E

V/EBIDTA

B

S

ebtor to Turnover%

tangibles

ngible assets

ebt/Equity

ng-term provisions

sh and bank balances

ACC Ltd.

tal equity

ng-term borrowings

ort-term borrowings

S PERFORMANCE

ade receivables

ort-term loans and advances

ATIOS

tal Assets

ort-term provisions

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Narnolia Securities Ltd

402, 4th floor 7/ 1, Lord s Sinha Road Kolkata 700071, Ph

033-32011233 Toll Free no : 1-800-345-4000

email: [email protected],website : www.narnolia.com

Risk Disclosure & Disclaimer: This report/message is for the personal information of

the authorized recipient and does not construe to be any investment, legal or taxation

advice to you. Narnolia Securities Ltd. (Hereinafter referred as NSL) is not soliciting any

action based upon it. This report/message is not for public distribution and has been

furnished to you solely for your information and should not be reproduced or

redistributed to any other person in any from. The report/message is based upon publicly

available information, findings of our research wing East wind& information that we

consider reliable, but we do not represent that it is accurate or complete and we do not

provide any express or implied warranty of any kind, and also these are subject to changewithout notice. The recipients of this report should rely on their own investigations,

should use their own judgment for taking any investment decisions keeping in mind that

past performance is not necessarily a guide to future performance & that the the value of

any investment or income are subject to market and other risks. Further it will be safe to

assume that NSL and /or its Group or associate Companies, their Directors, affiliates

and/or employees may have interests/ positions, financial or otherwise, individually or

otherwise in the recommended/mentioned securities/mutual funds/ model funds and

other investment products which may be added or disposed including & other mentioned

in this report/message.

stock recommendation for today: buy stock of pnb and neutral view on jindal steel & power

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