ValueGuide Feb2018-201802082153474450280

ValueGuide
February 2018
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CONTENTS
From the Editor’s Desk EQUITY

Come February, the
FUNDAMENTALS
equity markets have Stock Idea 12 REGULAR FEATURES
turned volatile. Yes, Stock Update 14 Report Card 4
Sector Update 27 Earnings Guide 41
the levy of long-term
Sharekhan Special 29
capital gains tax (LTCG)
and rising inflationary TECHNICALS DERIVATIVES
expectations post the Nifty 30 View 31
Union Budget did dent sentiments....
06 ADVISORY DESK DERIVATIVES
MID Trades 38 Derivatives Ideas 38
RESEARCH-BASED EQUITY PRODUCTS
CURRENCY
Top Picks Basket 07
FUNDAMENTALS
USD-INR 32 GBP-INR 32
EUR-INR 32 JPY-INR 32
TECHNICALS
USD-INR 33 GBP-INR 33
PMS DESK EUR-INR 33 JPY-INR 33
WealthOptimizer PMS 34 MUTUAL FUND DESK
ProPrime - Diversified Equity 35
Top MF Picks (equity) 39
ProTech - Index Futures Fund 36
Top SIP Fund Picks 40
ProTech - Trailing Stops 37
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June 20172018
February 3 Sharekhan ValueGuide
REPORT CARD EQUITY FUNDAMENTALS
STOCK IDEAS STANDING (AS ON FEBRUARY 01, 2018)

CURRENT PRICE AS ON PRICE 52 WEEK ABSOLUTE PERFORMANCE RELATIVE TO SENSEX
COMPANY
RECO 01-FEB-18 TARGET HIGH LOW 1M 3M 6M 12M 1M 3M 6M 12M
Automobiles
Apollo Tyres Buy 262 292 289 172 -6.7 5.2 -10.2 36.9 -10.1 0.7 -17.1 8.8
Ashok Leyland Buy 123 157 134 81 -0.9 -1.8 11.8 30.9 -4.4 -6.1 3.3 4.0
Bajaj Auto Buy 3413 3625 3473 2695 -1.6 0.0 15.6 17.8 -5.2 -4.3 6.8 -6.4
Gabriel India Buy 172 222 223 109 -17.0 -16.7 -0.6 48.6 -20.0 -20.3 -8.2 18.1
Hero MotoCorp Buy 3733 4200 4200 3049 -3.2 -3.0 -4.7 15.0 -6.7 -7.2 -12.0 -8.6
M&M Buy 799 ** 803 607 2.3 15.4 8.9 22.9 -1.4 10.4 0.5 -2.3
Maruti Suzuki E Buy 9402 11085 10000 5800 -5.9 9.3 16.5 47.8 -9.3 4.6 7.5 17.4
Rico Auto Industries Buy 88 130 111 44 -20.8 -17.6 5.7 30.2 -23.6 -21.1 -2.4 3.4
TVS Motor Buy 671 825 795 388 -16.7 -8.7 9.6 66.6 -19.7 -12.6 1.2 32.4
BSE Auto Index 26120 27031 21221 -5.1 0.1 2.0 14.0 -8.5 -4.3 -5.8 -9.4
Banks & Finance
Axis Bank Buy 593 680 628 448 1.0 6.2 9.3 18.2 -2.7 1.6 0.9 -6.1
Bajaj Finance Buy 1729 1900 1989 1019 -5.6 -10.0 -4.6 54.9 -9.0 -13.9 -11.9 23.1
Bajaj Finserv Buy 5038 6050 5835 3400 -3.2 -0.9 -1.3 42.6 -6.7 -5.2 -8.9 13.3
Bank of Baroda Buy 152 220 207 134 -3.0 -9.6 -6.2 -13.1 -6.5 -13.5 -13.4 -31.0
Bank of India Hold 154 215 217 123 -11.8 -24.0 -8.7 17.8 -15.0 -27.3 -15.7 -6.4
Capital First Buy 726 930 902 627 -2.4 -7.8 -12.7 -1.2 -5.9 -11.8 -19.4 -21.5
Federal Bank Buy 98 135 128 80 -13.3 -21.0 -18.7 12.1 -16.4 -24.4 -25.0 -10.9
HDFC Buy 1968 2200 1986 1361 11.8 8.0 7.8 37.4 7.8 3.4 -0.5 9.2
HDFC Bank E Buy 1991 2300 2015 1293 4.0 6.9 8.7 51.0 0.3 2.3 0.4 20.0
ICICI Bank Buy 346 400 366 240 8.2 5.8 11.0 30.0 4.3 1.3 2.5 3.3
LIC Housing Finance Hold 532 620 794 505 -9.0 -15.5 -25.5 -7.7 -12.3 -19.1 -31.2 -26.7
Max Financial Buy 541 660 684 512 -6.8 -6.3 -10.7 -9.5 -10.2 -10.3 -17.6 -28.1
PTC India Financial Services Buy 35 45 51 33 -11.1 -21.5 -15.0 -18.5 -14.3 -24.9 -21.5 -35.2
Punjab National Bank Buy 168 240 232 128 -2.7 -18.0 1.8 13.5 -6.2 -21.6 -6.0 -9.8
SBI Buy 306 370 352 241 -1.9 -5.4 -3.4 9.8 -5.5 -9.5 -10.8 -12.8
Union Bank of India Hold 132 150 205 124 -10.2 -25.5 -15.0 -15.9 -13.4 -28.7 -21.6 -33.2
Yes Bank Buy 360 410 383 275 12.0 8.9 -4.6 26.9 8.0 4.2 -11.9 0.8
BSE Bank Index 30788 31376 22929 4.6 3.8 5.5 30.9 0.9 -0.6 -2.6 4.0
Consumer goods
Britannia Buy 4741 5500 4964 3045 1.5 1.5 22.3 47.1 -2.1 -2.9 12.9 16.9
Emami Buy 1142 1330 1428 990 -15.7 -12.0 0.0 -3.2 -18.7 -15.8 -7.7 -23.0
GSK Consumers Hold 6717 ** 6940 4851 2.2 22.7 21.5 30.8 -1.5 17.5 12.1 4.0
Godrej Consumer Products E Buy 1053 1250 1128 768 7.1 7.6 14.5 33.0 3.3 3.0 5.7 5.7
Hindustan Unilever Hold 1371 1440 1411 838 2.5 10.5 18.2 64.9 -1.2 5.8 9.1 31.0
ITC Hold 275 325 368 250 5.6 3.7 -3.5 1.9 1.8 -0.8 -10.9 -19.0
Jyothy Laboratories Buy 365 420 443 325 -3.8 -6.9 -2.6 6.7 -7.2 -10.9 -10.1 -15.2
Marico Buy 311 365 349 253 -6.5 -2.0 -6.1 20.9 -9.9 -6.2 -13.3 -3.9
Zydus Wellness Hold 1008 ** 1167 809 -2.9 6.7 11.1 15.7 -6.4 2.1 2.6 -8.0
BSE FMCG Index 10780 11047 8717 0.8 3.8 6.9 22.0 -2.9 -0.7 -1.4 -3.0
IT / IT services
Firstsource Solution Hold 41 45 49 30 -5.8 -9.0 7.7 -4.4 -9.2 -12.9 -0.6 -24.0
HCL Technologies Buy 985 1050 1042 796 11.2 15.7 13.1 21.4 7.2 10.7 4.4 -3.5
Infosys Hold 1145 1180 1221 860 11.0 23.9 16.7 25.8 7.0 18.5 7.8 -0.1
Persistent Systems Buy 784 900 821 558 11.6 20.9 22.4 33.1 7.6 15.7 13.0 5.8
Tata Consultancy Services Hold 3139 ** 3259 2191 20.1 20.4 28.1 45.6 15.8 15.2 18.3 15.7
Wipro Reduce 301 290 335 227 -5.4 2.8 2.7 32.4 -8.8 -1.6 -5.2 5.2
BSE IT Index 12546 13126 9565 11.8 20.4 21.7 32.5 7.7 15.3 12.4 5.3
Capital goods / Power
CESC Buy 1045 1165 1190 749 -4.9 -1.6 5.2 33.1 -8.3 -5.9 -2.9 5.8
CG Power & Ind. Solutions Hold 91 ** 99 64 -5.0 0.6 2.4 29.2 -8.4 -3.7 -5.5 2.7
Finolex Cable Hold 724 ** 750 418 1.9 12.0 46.8 58.5 -1.8 7.2 35.6 26.0
Greaves Cotton Hold 139 ** 179 112 -3.7 4.7 -16.3 0.5 -7.2 0.2 -22.7 -20.1
Kalpataru Power Transmission Hold 462 510 536 275 -8.8 11.5 23.2 53.3 -12.0 6.7 13.8 21.8
KEC International Buy 350 410 395 150 -10.8 11.1 14.0 124.9 -14.0 6.3 5.3 78.7
PTC India Hold 104 130 130 83 -18.5 -23.5 -16.2 16.4 -21.5 -26.8 -22.6 -7.5
Skipper Buy 237 275 293 140 -13.5 -6.4 2.1 46.3 -16.6 -10.5 -5.7 16.3
February 2018 4 Sharekhan ValueGuide

EQUITY FUNDAMENTALS REPORT CARD
STOCK IDEAS STANDING (AS ON FEBRUARY 01, 2018)
CURRENT PRICE AS ON PRICE 52 WEEK ABSOLUTE PERFORMANCE RELATIVE TO SENSEX
COMPANY
RECO 01-FEB-18 TARGET HIGH LOW 1M 3M 6M 12M 1M 3M 6M 12M
Thermax Hold 1284 ** 1375 803 0.9 25.0 39.2 51.3 -2.7 19.7 28.6 20.2
Triveni Turbine Hold 130 140 167 117 -2.3 -2.6 -9.6 7.2 -5.8 -6.8 -16.5 -14.8
V-Guard Industries Buy 229 265 251 146 -9.1 -4.4 18.5 45.3 -12.4 -8.5 9.4 15.5
Va Tech Wabag Buy 590 660 750 480 -9.4 -4.3 -8.0 18.1 -12.7 -8.5 -15.1 -6.2
BSE Power Index 2321 2450 2135 -7.4 -5.3 -3.1 4.1 -10.7 -9.4 -10.6 -17.3
BSE Capital Goods Index 20682 20883 14931 4.3 8.4 13.2 34.4 0.6 3.7 4.5 6.8
Infrastructure / Real estate
Gayatri Projects Buy 213 263 231 126 -5.8 11.5 25.9 56.5 -9.2 6.7 16.3 24.3
IRB Infra Buy 243 270 273 194 -2.1 -7.1 -0.8 -3.2 -5.7 -11.1 -8.4 -23.1
Jaiprakash Associates Hold 20 ** 30 9 -24.9 0.6 -30.8 39.7 -27.6 -3.8 -36.1 11.0
Larsen & Toubro Hold 1456 1520 1470 971 13.3 16.9 21.8 45.6 9.2 11.9 12.4 15.7
NBCC Buy 229 310 292 156 -10.1 -16.6 2.4 20.3 -13.3 -20.2 -5.5 -4.4
Sadbhav Engineering Buy 410 443 440 261 -8.5 25.8 34.6 37.8 -11.8 20.4 24.2 9.5
CNX Infra Index 3648 3749 2947 -2.5 -2.4 4.6 20.1 -6.0 -6.6 -3.4 -4.5
BSE Real estate Index 2586 2828 1416 -6.5 2.4 11.5 69.2 -9.9 -2.0 2.9 34.4
Oil & gas
Oil India Hold 358 390 389 257 -7.6 -4.1 24.4 6.0 -11.0 -8.2 14.8 -15.7
Petronet LNG NEW Buy 252 320 276 186 -3.7 -7.3 15.5 27.4 -7.2 -11.3 6.6 1.3
Reliance E Buy 944 1110 991 511 -0.7 -4.5 11.0 74.6 -4.3 -8.6 2.5 38.7
Selan Exploration Technology Hold 223 250 270 154 -7.6 -8.9 33.2 19.4 -11.0 -12.8 23.0 -5.1
BSE Oil and gas Index 16159 16727 12848 -2.7 -4.9 10.8 22.9 -6.2 -9.0 2.3 -2.4
Pharmaceuticals
Aurobindo Pharma Buy 611 905 809 503 -9.8 -23.1 -17.0 -11.9 -13.1 -26.4 -23.4 -29.9
Cadila Healthcare Hold 418 485 560 356 -4.1 -19.1 -24.0 13.3 -7.5 -22.6 -29.9 -10.0
Cipla Hold 587 685 663 479 -4.4 -8.6 2.2 -0.2 -7.8 -12.6 -5.6 -20.7
Divi's Labs Buy 1044 1275 1142 533 -4.9 -4.2 55.5 41.0 -8.3 -8.3 43.5 12.1
Glenmark Pharmaceuticals Hold 588 730 973 526 -0.5 -9.1 -15.9 -34.9 -4.1 -13.0 -22.4 -48.3
Lupin Reduce 860 ** 1574 806 -3.2 -20.2 -18.2 -42.5 -6.7 -23.6 -24.4 -54.3
Sun Pharmaceutical Industries Hold 554 600 729 433 -3.7 -2.2 6.0 -13.5 -7.1 -6.4 -2.1 -31.2
Torrent Pharma Hold 1355 1480 1575 1142 -2.6 2.5 6.6 6.7 -6.1 -1.9 -1.6 -15.2
BSE Health Care Index 14359 15612 12513 -4.3 -3.7 -0.4 -5.7 -7.8 -7.9 -8.0 -25.1
Building materials
Grasim Buy 1189 1380 1300 784 -0.9 -12.7 2.6 42.7 -4.5 -16.5 -5.3 13.4
Shree Cement Hold 17453 19600 20560 14915 -5.2 -11.0 -7.4 9.1 -8.7 -14.9 -14.5 -13.3
The Ramco Cements Hold 759 775 840 616 -5.0 2.6 5.3 5.2 -8.5 -1.8 -2.8 -16.4
UltraTech Cement Hold 4391 4750 4600 3634 -1.7 -5.0 2.3 12.6 -5.3 -9.1 -5.6 -10.5
Discretionary consumption
Arvind Buy 406 500 479 353 -13.7 -6.6 3.4 1.4 -16.8 -10.6 -4.5 -19.4
Century Plyboards (India) Hold 323 ** 363 206 -8.6 10.2 9.1 51.1 -11.9 5.5 0.7 20.1
Cox and Kings Buy 244 325 306 183 -15.0 -10.4 -15.1 22.4 -18.1 -14.3 -21.6 -2.7
Info Edge (India) Hold 1327 1425 1460 796 1.8 11.4 37.3 66.0 -1.9 6.6 26.8 31.9
Inox Leisure Buy 284 320 310 213 0.7 9.1 11.0 28.4 -2.9 4.4 2.4 2.1
KKCL Hold 1710 1950 2200 1575 -11.7 -13.2 -2.1 -5.5 -14.9 -16.9 -9.6 -24.9
Orbit Exports Hold 156 177 190 116 -1.2 3.5 6.3 3.6 -4.8 -0.9 -1.8 -17.7
Relaxo Footwear Buy 633 735 725 410 -8.9 4.6 31.9 39.2 -12.1 0.1 21.8 10.6
Thomas Cook India Buy 234 270 274 186 -10.7 -10.3 0.7 14.5 -13.9 -14.2 -7.1 -9.0
Wonderla Holidays Hold 382 385 425 330 3.7 1.1 5.8 1.8 0.0 -3.3 -2.3 -19.1
Zee Entertainment E Buy 595 680 619 458 1.4 10.7 8.5 16.1 -2.3 6.0 0.1 -7.7
Diversified / Miscellaneous
Bajaj Holdings Buy 2802 3595 3036 1750 -2.1 -5.7 15.3 37.2 -5.6 -9.8 6.4 9.1
Bharat Electronics E Buy 162 220 193 135 -16.4 -18.0 -7.7 9.3 -19.4 -21.6 -14.8 -13.1
Bharti Airtel E Buy 438 600 565 326 -17.7 -21.7 2.2 20.6 -20.7 -25.1 -5.6 -4.1
Gateway Distriparks Hold 227 250 292 211 -4.1 -16.7 -16.8 -8.5 -7.6 -20.3 -23.2 -27.3
PI Industries Hold 914 ** 1035 674 -5.9 8.4 17.7 -2.7 -9.3 3.7 8.6 -22.7
Ratnamani Metals and Tubes Buy 1021 1250 1217 655 -8.9 11.9 19.6 51.3 -12.2 7.1 10.4 20.2
Supreme Industries Buy 1363 1450 1490 946 0.6 12.9 18.2 37.9 -3.0 8.1 9.1 9.6
UPL E Buy 759 980 903 680 -5.2 -5.9 -17.5 -0.1 -8.6 -10.0 -23.9 -20.6
BSE500 Index 15330 15661 11885 0.0 1.9 7.5 26.4 -3.6 -2.5 -0.8 0.4
CNX500 INDEX 9687 9895 7520 -0.1 1.9 7.4 26.3 -3.6 -2.5 -0.8 0.3
CNXMCAP INDEX 20657 21841 15770 -5.7 0.3 7.2 26.4 -9.1 -4.0 -1.1 0.5
E In Top Picks basket ** Price target under review

From the Editor’s Desk
From the Editor’s Desk More global than local
Come February, the equity markets have turned volatile. Yes, the levy of long-term capital gains
tax (LTCG) and rising inflationary expectations post the Union Budget did dent sentiments. The
steep correction is, however, driven more by the global rout in equities rather than domestic
issues. And this is not surprising at all. After all, the rally in global equities was one of the key
pillars that drove up Indian equities to record highs in the past 15 months. Expectations of an
economic recovery and a strong revival in corporate earnings in the latter part of this fiscal were
other enablers.
Though corporate earnings for Q3 are showing healthy signs of a turnaround (with the benefit
of a low base effect), a sudden and sharp correction in equity markets globally has pulled down
Indian equity markets also. Interestingly, it is good economic news that is causing the turmoil.
Strong economic data points in the US (especially sudden surge in wages in January) led to
concerns related of aggressive interest rate hikes by the US Federal Reserve under its new
Chairman Jerome Powell and higher-than-expected inflation eating into profits of US corporates.
Moreover, a spike in bond yields and meltdown in cryptocurrencies played their role in driving
the change in investor sentiments globally.
Given the not so serious reasons for the global turmoil, the situation is likely to stabilise over a
period of time. The scenario in India is also supportive for equity markets both in terms of an
improvement in corporate earnings and the sustainable trend of financialisation of household
savings as real interest rates remain positive.
Having said this, the Sharekhan Fundamental Research team retains its view that 2018 would
be full of twists and turns rather than a one-way rally seen last year. Global tremors along with
important state elections in India in the latter half of the year would keep sentiments grounded.
It does not imply in any way that 2018 would not be profitable for investors. However, it would
require much more careful selection of stocks. Secondly, investors would have to take volatility
in their stride. After all, volatility is your friend. Market fluctuations and volatile phases throw
open opportunities for investors to enter at more reasonable price points and valuations.

EQUITY FUNDAMENTALS Sharekhan Top Picks
Sharekhan Top Picks

Year 2018 began on a high note but ended with increased International and Sundram Fasteners, added to the
volatility especially in the broader markets. This is clearly decline in Bharti Airtel, which is faced with another round
reflected in the gains of 4.6-5.4% in benchmark indices, of unexpected pricing aggression from Reliance Jio.
Nifty and Sensex, whereas the CNX Midcap 100 declined This month, we are replacing Sundram Fasteners and KEC
by 2.4% in the same period. International with Tech Mahindra and Godrej Consumer
The volatility also impacted returns from the Top Picks Products. Both the companies have announced healthy
basket and it ended with a marginal loss this month. Q3 results and are showing promising growth prospects.
Profit booking in some of the mid-size companies, KEC
Consistent outperformance (absolute returns; not annualised) (%)

(%) 1 month 3 months 6 months 1 year 3 years 5 years
Sharekhan Top Picks -1.0 4.9 7.8 44.3 81.3 282.8
Sensex 5.4 8.1 10.5 29.9 22.8 90.6
Nifty 4.6 6.6 9.6 29.0 25.5 94.0
CNX MIDCAP 100 -2.4 5.3 11.4 33.8 57.1 178.6
Absolute returns (Top Picks Vs Benchmark indices) (%) Constantly beating Nifty and Sensex (cumulative returns since April 2009)
Sharekhan Sensex Nifty CNX Mid-
1000
(Top Picks) cap 100 900
YTD CY2018 -1.0 5.4 4.6 -2.4 800
CY2017 58.0 28.0 29.0 47.3 700
600
CY2016 8.8 1.8 3.2 7.1
500
CY2015 13.9 -5.1 -4.1 6.5 400
CY2014 63.6 29.9 30.9 55.1 300
CY2013 12.4 8.5 6.4 -5.6 200
100
CY2012 35.1 26.2 29.0 36.0
Apr-09
Mar-10
Feb-11
May-12
Apr-13
Apr-14
Mar-15
Feb-16
May-17
Jul-09
Nov-09
Jul-10
Jun-11
Jan-12
Sep-12
Jan-13
Aug-13
Dec-13
Jul-14
Nov-14
Jul-15
Jun-16
Jan-17
Sep-17
Jan-18
Oct-10
Oct-11
Oct-15
Oct-16
CY2011 -20.5 -21.2 -21.7 -25.0
CY2010 16.8 11.5 12.9 11.5
Sharekhan Sensex Nifty
CY2009 116.1 76.1 72.0 114.0
Please note the returns are based on the assumption that at the beginning of each month an equal amount was invested in each stock of the Top Picks basket
PER (x) RoE (%) Price

CMP* Upside
Name FY17 FY18E FY19E FY17 FY18E FY19E target
(Rs) (%)
(Rs)#
Bharat Electronics 162 26.6 23.8 20.8 14.7 15.0 15.7 220 36
Bharti Airtel 438 35.3 125.2 46.1 6.8 2.4 5.5 600 37
Godrej Consumer 1,040 54.4 49.0 39.1 27.3 24.5 25.0 1,250 20
HDFC Bank 1,991 35.1 30.2 24.8 17.9 16.6 16.4 2,300 16
IndusInd Bank 1,797 37.3 29.1 22.7 16.2 16.5 18.2 1,950 9
Jubilant FoodWorks 2,055 178.7 73.4 61.2 9.2 19.8 19.8 2,407 17
Maruti Suzuki 9,403 38.7 34.8 26.8 21.0 19.7 21.0 11,085 18
ONGC 195 12.6 10.1 8.7 9.5 11.0 12.1 230 18
Reliance Industries 944 18.7 15.6 14.0 11.2 11.8 11.7 1,110 18
Tech Mahindra 611 18.6 15.3 14.8 18.3 20.1 18.5 700 15
UPL Limited 759 21.2 20.3 16.3 27.2 23.3 24.0 980 29
ZEE Entertainment 597 47.0 42.9 33.9 18.3 17.4 19.0 680 14
*CMP as on February 01, 2018 # Price target for next 12 months

Sharekhan Top Picks EQUITY FUNDAMENTALS
PER ROE (%) PRICE UPSIDE

Name CMP (Rs.)
FY17 FY18E FY19E FY17 FY18E FY19E TARGET (Rs.) (%)
Bharat Electronics 162 26.6 23.8 20.8 14.7 15.0 15.7 220 36
Remarks: Bharat Electronics Limited (BEL), a PSU that manufactures electronic, communication and defence equipment, stands to benefit from
enhanced budgetary outlay for strengthening and modernising India’s security.
The government’s ‘Make in India’ initiative and rising spends for modernising defence equipment will support earnings growth in the
coming years, as it is the only player with strong research and manufacturing capabilities in the country.
Current order book of the company at ~Rs. 41,746 crore provides revenue visibility over the next 3-4 years. We expect revenue to
report a CAGR of 16.5% over FY2017-FY2020E, led by strong order wins and an impressive execution rate.
BEL remains our preferred pick in the defence sector on account of its strong manufacturing and R&D base, good cost control,
growing indigenisation and strong balance sheet with improving return ratios.
Bharti Airtel 438 35.3 125.2 46.1 6.8 2.4 5.5 600 37
Remarks: Bharti Airtel (Airtel) is the largest mobile operator with over 280 million subscribers in India and over 80 million subscribers across
15 countries in Africa. In India, the company provides mobile services in 22 telecom circles along with fixed line, enterprise data and
DTH services.
Airtel owns 53.5% of Bharti Infratel (a towers company), which holds 42% of Indus Towers. Airtel has recently offloaded shares of
Bharti Infratel for Rs. 3,325 crore to reduce its debt profile.
To improve ARPU in the next 9-12 months, the company will focus on (a) upgradation of 2G customers to 4G in its own network; (b)
capture fair share of 4G feature phones; and (c) strive to get in the primary slot in 4G devices (40-50% market share of dual SIM).
Despite ARPU erosion owing to intense competition from RJio and reduction in IUC rates (down 57%), Airtel has maintained a
superior margin profile of 37% on consolidated basis (32.6% in Indian wireless business).
The company expects healthy performance to continue in its African operations, led by data, Airtel money penetration and a
strengthening distribution model.
With favourable earnings traction in the African market, more value-added services to higher ARPU customers and bottoming out
of sector headwinds in India, Airtel will emerge stronger with its balance sheet strength coupled with industry consolidation (three-
player market, with the exit of smaller players). This will help Airtel to maintain its leading position in revenue market share with
improving profitability.
Godrej Consumer 1,040 54.4 49.0 39.1 27.3 24.5 25.0 1,250 20
Remarks: Godrej Consumer Products (GCPL) is one of the leading FMCG companies with 3x3 approach of presence in emerging markets
such as Asia, Africa and Latin America across three categories (home care, personal care and hair care). The company is no.1 in the
household insecticide category in India and Indonesia, while it is no.1 in the hair colour space in India.
Unlike other FMCG companies, GCPL has de-risked its business model with 50% of revenue coming from India and 50% of revenue
coming from the international business, which mitigates the risk of slowdown in some of the geographies of presence.
Post GST implementation, the domestic business has seen strong recovery and posted 18% volume growth in Q3FY2018 on account
of strong growth in the soaps and hair colour categories. The low-cost inventory of raw material and better revenue mix aided
the business to post strong margin improvement in Q3FY2018. The domestic business is expected to maintain its strong growth
momentum, with expected recovery in rural demand and new product launches gaining good response in the near term.
Though the international business stood muted in 9MFY2018, the business is expected to post recovery in FY2019 with Indonesian
and African businesses expected to see strong recovery in the coming quarters. OPM of the international business is expected to
remain at 18-19% in the coming years.
We expect revenue and PAT of GCPL to report CAGRs of 13.4% and 18.6% over FY2017-FY2020, respectively, driven by sustained
strong growth in the domestic business and expected recovery in the international business. In view of its strong growth prospects,
GCPL remains one of our top picks in the FMCG space.


Name CMP (Rs.)
HDFC Bank 1,991 35.1 30.2 24.8 17.9 16.6 16.4 2,300 16
Remarks: HDFC Bank has a pre-eminent presence in the retail banking segment (~50% of loan book) and has been able to maintain strong
and consistent loan book growth, gradually gaining market share. Going forward, economic recovery and improved consumer
sentiments would be positive growth drivers for the bank’s loan growth, which will in turn drive profitability.
Backed by a current account and savings account (CASA) ratio of over 40% and a high proportion of retail deposits, the bank’s cost
of funds remains among the lowest in the system, helping it maintain higher net interest margin (NIM). In addition, the bank’s loan
book growth is driven by high-yielding retail products such as personal loans, vehicle loans, credit cards and mortgages, mostly to
its own customers (which is also positive for NIM).
HDFC Bank has been maintaining near impeccable asset quality, with its NPA ratios consistently being among the lowest versus
comparable peers. The bank has been able to maintain robust asset quality, owing to stringent credit appraisal procedures and
negligible exposure to troubled sectors.
Going ahead, HDFC Bank is well poised to tap the growth opportunities due to strong capital ratios, healthy asset quality and a
steady revival in consumer spending. As lending and transactions through formal routes increase, HDFC Bank would benefit since
it is a leading private sector bank and will likely gain market share in this segment. The bank is expected to maintain healthy return
ratios on a sustainable basis. Therefore, we expect it to maintain the valuation premium that it enjoys vis-à-vis other private banks.
IndusInd Bank 1,797 37.3 29.1 22.7 16.2 16.5 18.2 1,950 9
Remarks: IndusInd Bank is among the fastest-growing banks (25%+ CAGR over FY2012-FY2017), with a loan book of ~Rs. 1.28 lakh crore and
1,320 branches across the country. About 55% of the bank’s loan book comprises retail finance, which is a high-yielding category,
and is showing signs of growth.
Given the aggressive measures taken by the management, the deposit profile has improved considerably (CASA ratio of ~42%).
Going ahead, the bank would follow a differentiated branch expansion strategy (5% branch market share in identified centres) to help
ensure healthy growth in savings accounts and retail deposits.
IndusInd Bank has maintained its asset quality despite sluggish economic growth and higher proportion of retail finance in its loan
book. The bank’s asset quality is among the best in the industry, with total stressed loans (restructured loans + gross NPAs) forming
less than 1.50% of the loan book.
A likely revival in the Indian economy will further fuel growth in the bank’s consumer finance division, while strong capital ratios will
support future growth plans. Although demonetisation has raised questions regarding delinquencies in certain lending segments,
management expects asset quality to remain under control. The stock should continue to trade at a premium valuation, underpinned
by strong loan growth, quality management, high RoAs and healthy asset quality. We have a positive outlook on IndusInd Bank.
Jubilant FoodWorks 2,055 178.7 73.4 61.2 9.2 19.8 19.8 2,407 17
Remarks: Jubilant FoodWorks Limited (JFL), India’s largest food service company, shifted its focus to customer satisfaction from store additions
to improve its store fundamentals over the long run.
Post the induction of Mr. Pratik Pota as the CEO, the company refreshed its menu by launching new items and improving the quality of
its pizzas with better offerings. The company gained good traction and posted same-store-sales growth (SSSG) of 17.8% in Q3FY2018
(5.5% in Q2FY2018 and 6.5% in Q1FY2018), as against a decline in SSSG in earlier quarters.
Operating profit margin (OPM) improved by 749 BPS in Q3FY2018 to 17.2% (highest in the past 15 quarters). JFL is also focusing on
reducing losses of Dunkin Donuts by shutting non-profitable stores and introducing value product portfolio to improve store sales in
the coming quarters. We expect standalone OPM to improve to ~14% in FY2020 from 9.7% in FY2017.
With negative working capital, balance sheet of the company remained lean amid slowing SSSG and sustained store additions.
JFL would be one of the key beneficiaries of improvement in the discretionary environment in the domestic market. With a redefined
strategy, revenue and earnings of JFL are expected to report CAGRs of 13% and 53%, respectively, over FY2017-FY2020.

Sharekhan Top Picks EQUITY FUNDAMENTALS

Name CMP (Rs.)
Maruti Suzuki 9,403 38.7 34.8 26.8 21.0 19.7 21.0 11,085 18
Remarks: Maruti Suzuki India Limited (MSIL) is India’s largest passenger vehicle (PV) manufacturer with a strong 47% market share. Over the
past two years, the company has been able to gain market share due to new product launches, a vast distribution network (with
increased focus on rural markets) and a shift in consumer preference to petrol models from diesel models.
The recently launched premium hatchback, Baleno, Ignis and upgrade of Dzire have received strong response, which will help MSIL
to expand its market share in the segment. MSIL is likely to continue outpacing industry growth as four of its models (Baleno, Brezza,
Ignis and Dzire), which form 37% of its vehicle portfolio, command a waiting period of 2-5 months.
The parent company of MSIL, Suzuki Motor Corporation, commissioned its Greenfield plant in Gujarat in February 2017. Maruti Suzuki
India Limited (MSIL) is ramping capacity in Gujarat, with production expected to double to 20,000 units per month by Q4FY2018
as against the current rate of 10,000 units per month. With capacity for the first line expected to be reached by the end of FY2018,
MSIL has commenced work on operating the second line, which has installed capacity of 2.5 lakh units. MSIL expects to reach the
full capacity of 7.5 lakh units at Gujarat by 2020. Enhanced production in Gujarat will ease capacity constraints and help MSIL to
reduce waiting periods for its models. we expect MSIL to outpace the industry and expect volumes to post a 12% CAGR over FY2018-
FY2020 as against industry growth of about 10%.
Given the increased share of new products, discounting levels are likely to recede over the next two years. Moreover, the board
has approved a revision in the method of royalty calculation, which would result in lower royalty payment on new models beginning
with Ignis. Revised royalty would be implemented retrospectively after approval from the parent company. We have factored royalty
benefits of 50 BPS for FY2019 and 60 BPS for FY2020.
Led by the robust order book on recent launches and a strong new product pipeline, we expect MSIL to outpace industry growth
and report a 12% volume CAGR. MSIL is well poised to fortify its leadership position across passenger vehicle segments. We retain
our Buy recommendation on the stock.
ONGC 195 12.6 10.1 8.7 9.5 11.0 12.1 230 18
Remarks: ONGC has reversed the decline in its gas production (declined at 2.1% over FY2013-FY2017) with robust growth of 8.4% y-o-y in
H1FY2018 and 3.3% in FY2017. The company has guided its gas production to grow by 8.9%/16.5% to 25.34 bcm/29.53 bcm in
FY2018E/FY2019E. We have conservatively assumed oil/gas volume CAGR of 1%/7% over FY2017-FY2019E, which is much lower
than management’s guidance. This coupled with higher oil and gas realisation is expected to drive adjusted standalone earnings
growth at a 15% CAGR over FY2017-FY2019E.
With the acquisition of 26% stake in Vankorneft in FY2017, oil and gas production of ONGC Videsh Limited (OVL) is expected to
increase to 15.1 mtoe in FY2018 as compared to 8.9 mtoe in FY2016. This coupled with the recent surge in oil price would result in
turnaround at OVL. Thus, we expect OVL to contribute EPS of Rs. 2.7/Rs. 2.8 in FY2018E/FY2019E vs. Rs. 1.3 in FY2017.
Overall, we expect consolidated earnings of ONGC to report a CAGR of 20% over FY2017-FY2019E on account of the likely
improvement in earnings of the standalone business and higher profitability for OVL.
ONGC has agreed to acquire HPCL at a purchase consideration of Rs. 36,915 crore. We expect the acquisition to be EPS accretive
by ~5% for ONGC.
Reliance Industries 944 18.7 15.6 14.0 11.2 11.8 11.7 1,110 18
Remarks: We expect robust GRM for RIL at $11.8/$12.5/$12.5 per barrel in FY2018E/FY2019E/FY2020E, which is at $4.5-5.0/bbl premium to
our assumption for Singapore complex GRM, as we expect GRM of RIL to benefit from the commissioning of petcoke gasification
plant. Moreover, margin outlook for the petrochemical business remains robust, given the likely delay in the commissioning of U.S.
ethylene capacity expansion projects due to floods caused by Hurricane Harvey.
RIL has doubled its paraxylene (PX) capacity to 3.7 million metric tonne (mmt) from 1.9 mmt earlier and has recently commissioned its
ethane import project and Refinery Off Gas Cracker (ROGC) plant. The economics of petcoke gasification plant have improved with
the recent increase in oil prices.
Given lower freebies, we expect ARPU of RJio to increase in the coming quarters, thus model ARPU of Rs. 155/Rs. 165/Rs. 175 for
FY2018E/FY2019E/FY2020E. Moreover, we model subscriber base of 160 million for FY2018E, 185 million for FY2019E and 205
million for FY2020E. Strong subscriber addition and APRU accretion give us confidence on improving profitability of the telecom
business going forward.
We expect consolidated EBITDA/PAT CAGR of 21%/13% over FY2017-FY2020E, driven by the commissioning of core downstream
projects in FY2018 and improvement in the profitability of the telecom business. Any positive surprise in terms of better-than-
expected financials of the telecom business would be an important re-rating trigger for RIL going forward.


Name CMP (Rs.)
Tech Mahindra 611 18.6 15.3 14.8 18.3 20.1 18.5 700 15
Remarks: Tech Mahindra (TechM) is the fifth largest IT outsourcing company in India. The company derives the largest chunk (43%) of its
revenue from telecom OEMs and service providers by offering end-to-end solutions. Further, the company has strengthened its
service offerings through acquisitions of Comviva, the outsourcing business of Hutchison and LCC.
The acquisition of Satyam helped TechM to expand its business into the enterprise solutions space. Now, it has diversified its
exposure to other verticals, including manufacturing (19%), BFSI (13%), and retail and transport (7%).
TechM has delivered solid margin execution over the past three quarters with an improvement of 340 BPS in its EBIT margin over
Q1FY2018. Management believes there is further room for margin expansion in the coming quarters, led by improvement in the
profitability of portfolio companies (LCC and Comviva) coupled with operational efficiency.
The telecom vertical, which is languishing on account of headwinds in portfolio companies’ business, is expected to witness a revival
in FY2019E because of improving order book coupled with bottoming out of headwinds in LCC, rollout of 5G and higher spend in
IoT and software transformation.
On the enterprise side of the business, management expects the momentum to continue with an increasing number of deal wins.
Over the last few quarters, there has been stability in the earnings performance despite headwinds in the macro environment. . Tech
Mahindra is the cheapest amongst IT top tier stocks with better growth outlook.
UPL Limited 759 21.2 20.3 16.3 27.2 23.3 24.0 980 29
Remarks: United Phosphorous Limited (UPL) is a global generic crop protection chemicals and seeds company. UPL is the largest producer
of agrochemicals in India. The company is among the top five post-patent agrochemical manufacturers in the world. UPL has ~23
manufacturing sites, including nine in India, four in France and two in Spain. The company operates in every continent and has a
customer base in 123 countries with its own subsidiary offices.
Topline growth in two key geographies – India and LATAM – is expected to improve in Q4FY2018. India (on account of pickup in Rabi
crop sowing) and LATAM (due to the expected rise in pest infestation and delayed sowing leading to demand postponement) are
expected to report improved revenue growth. In addition, revival in rice acreages in North America and healthy growth in herbicides
portfolio would add to the topline. We expect topline to grow at a 12% CAGR over the next two years.
The global agrochemical industry is in a declining trend for the third consecutive year, impacted by higher channel inventories
and low commodity prices. However, the situation is expected to improve going ahead. Management expects 2018 to witness a
turnaround in the industry and UPL, being a major player in the space, is slated to benefit from the situation.
Given the expected cyclical recovery in CY2018, led by decreasing channel inventories in key regions and some uptick in agri
commodity prices, we expect acceleration in earnings trajectory over the next two years. With extensive product catalogues of UPL
coupled with a strong distribution network and backward-integrated systems, the company is better placed to benefit from the global
recovery in the agri commodity space over the next 2-3 years. We maintain our Buy rating on the stock.
ZEE Entertainment 597 47.0 42.9 33.9 18.3 17.4 19.0 680 14
Remarks: Zee Entertainment Enterprises Limited (ZEEL) continues to lead the broadcasting industry in terms of growth in advertising revenue.
ZEEL is one of the leading players in television broadcasting with a bouquet of 34+ TV channels across genres.
ZEEL expects domestic subscriptions to grow at a low-teen CAGR for the next 3-4 years. However, the ongoing litigation on TRAI’s
tariff order is causing a delay in contract renewal negotiations with distributors.
Management reiterated on strong pick-up in advertisement revenue, led by largest ad spender, FMCG, and rebound in rural spends.
Management remains confident on delivering ahead-of-industry growth in the coming years.
ZEEL will unveil its OTT 2.0 ZEE5 (replace its current advertising video-on-demand (AVOD)-based OZEE and subscription video-on-
demand (SVOD)-based Ditto TV) in February 2018. Management has not divulged in any material detail on the content strategy, but
has indicated at strong original programming with differentiated technological features.
Management expects margins to remain at around 30%+, even after increasing programming cost in digital content.
We continue to remain positive on ZEEL, as it is a structural India consumption theme. Moreover, the company continues to invest
across the media spectrum, including movies, music, events, digital and international markets, to maintain its high-growth trajectory.
We maintain our Buy rating on the stock.

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

Date Company Report Type
Latest Chg (Rs.) Latest Chg
Jan 24, 2018 Petronet LNG Stock Idea BUY New Initiation 246 320 -
Summary
• Initiating coverage on PLNG with a Buy rating and price target of Rs.320.
• Strong competitive position, long term contracted volume and capacity expansion to result into 13% volume and 19% earnings
CAGR over FY2017-FY2020E.
• Given our expectation of strong earnings growth and healthy return ratios (RoE of 23-24%), PLNG is trading at an attractive
valuation of 16.3x FY2019E EPS and 12.8x FY2020E EPS.
• Unexpected surge in LNG prices, delay in laying down of pipeline infrastructure and non-revision in annual re-gas tariffs are
key risks to our rating and price target.
Report link: http://old.sharekhan.com/Upload/NewsLetter/PetronetLNG-Jan24_18.pdf
Jan 02, 2018 Suprajit Engineering Ltd. Viewpoint POSITIVE New Initiation 325 18-20 -
Summary
• Suprajit Engineering Ltd. (SEL) is set to benefit from the upcoming combined brake system (CBS) regulation and recovery in
automotive demand.
• The company is looking to venture into new business verticals in the non-automotive segment, which would become the next
growth leg for the company.
• We expect SEL to report robust 22% topline and 28% earnings growth over FY2018-FY2020.
• We reinitiate our Positive view on SEL and expect 18-20% returns over six to eight months
Report link: http://old.sharekhan.com/Upload/NewsLetter/Suprajit-Jan02_18.pdf
Jan 10, 2018 Birla Corporation Viewpoint POSITIVE New Initiation 1,216 18-20 -
Summary
• The acquisition of Reliance Cement by Birla Corporation Limited (BCL) consolidated the presence of BCL in Central India along
with improving its EBITDA/tonne.
• BCL is set to expand its capacity by FY2020, which will expand its market share in the western region.
• The stock is attractively priced at 10.5x FY2020E EV/EBITDA.
• We have a Positive view on BCL and expect 18-20% upside potential from current levels.
Report link: http://old.sharekhan.com/Upload/NewsLetter/Birla_Corp_Jan10_18_Viewpoint.pdf
Jan 23, 2018 Escorts Ltd. Viewpoint POSITIVE New Initiation 809 18-20 -
Summary
• Escorts tractor volumes are expected to grow a healthy 9% CAGR over next two years led by positive rural sentiments and new
launches.
• Escorts will likely benefit from robust growth in construction equipment and railway space.
• Escorts is targeting to reduce its raw-material and employee costs, thus improving its margins and return ratios going ahead.
• The stock is trading at attractive. valuations currently. We initiate coverage with a Positive view, expecting 18-20% returns over
the next 6 months.
Report link: http://old.sharekhan.com/Upload/NewsLetter/Escorts-Jan23_18.pdf
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EQUITY FUNDAMENTALS STOCK IDEA

Jan 25, 2018 Quess Corp Limited Viewpoint POSITIVE New Initiation 1,113 18-20 -
Summary
• Quess Corp Limited (QCL) is a leading integrated business service provider with strong presence in People service management
and Global Technology Solutions in India.
• Continuing focus on inorganic initiatives to improve its growth prospects in medium to long run.
• Operating efficiencies and high-margin acquisitions would improve profitability going ahead.
• Asset-light model with lower leverage; return ratios continue to remain strong.
• We have a Positive view with an upside of 18-20% from current levels.
Report link: http://old.sharekhan.com/Upload/NewsLetter/QuessCorp-Jan25_18.pdf
Jan 29, 2018 Jamna Auto Industries Viewpoint POSITIVE New Initiation 77 15-18 -
Summary
• We re-initiate our viewpoint coverage on Jamna with a Positive view and expect 15-18% upside over the next six months.
• Jamna is expected to post revenue CAGR of 14% over FY2018-FY2020, above the industry’s growth of 8-10%.
• Organised players such as Jamna stand to gain substantially post the successful GST rollout.
• The margin trajectory is expected to improve substantially, driven by enhanced focus on the aftermarket segment and
introduction of new products.
• We expect Jamna to report 22% earnings growth over FY2018-FY2020.
Report link: http://old.sharekhan.com/Upload/NewsLetter/JamnaAuto-Jan29_18.pdf
Jan 30, 2018 JSW Steel Viewpoint POSITIVE New Initiation 290 15-18 -
Summary
• JSW Steel is the fastest growing and most efficient steel producer in India, both in terms of conversion cost per tonne as well
as capital cost per tonne. We expect 15/18% returns and initiate coverage on the stock with positive outlook.
• With stringent measures to curb import from China, domestic demand (projected to grow at 7.2% CAGR to 230mt by FY’31) to
turn in favour of Indian steel industry.
• As the least integrated player among large steel manufacturers, JSW Steel likely to be a beneficiary of an anticipated fall in
global iron ore and coking coal prices.
Report link: http://old.sharekhan.com/Upload/NewsLetter/JSWSteel-Jan30_18.pdf

Stock Update EQUITY FUNDAMENTALS

Jan 01, 2018 Sun Pharmaceutical Industries Stock Update HOLD 1 574 600 h
Summary
• USFDA acceptance of NDA marks an important developmental milestone for Sun Pharma’s dry eye candidate.
• We have increased our sales and earnings estimates for FY2019E and FY2020E.
• We maintain our Hold rating on the stock with a PT of Rs. 600.
Report link: http://old.sharekhan.com/Upload/NewsLetter/Sunpharma-Jan01_18.pdf
Jan 03, 2018 Ratnamani Metals & Tubes Stock Update BUY 1 1,096 1,250 h
Summary
• Revised estimates upward for FY19/20E, maintain BUY with an upward revised price target of Rs. 1,250.
• Strong management commentary on growth outlook for next two years, H2FY2018E to remain strong led by strong order
executions.
• Capex program on track, well poised to deliver strong earnings growth over 22% CAGR between FY17-20E.
Report link: http://old.sharekhan.com/Upload/NewsLetter/Ratnamani-Jan03_18.pdf
Jan 03, 2018 NMDC Viewpoint BOOK PROFIT i 149 149 -
Summary
• Price hike of iron ore prices to be beneficial for NDMC in 4QFY2018.
• We expect FY2018 revenue growth to be driven by pricing-led growth, while volumes may remain under pressure.
• We advise investors to book profit at the current juncture with 26% gain over a span of three months and wait for a better entry
point.
Report link: http://old.sharekhan.com/Upload/NewsLetter/NMDC-Jan03_18.pdf
Jan 04, 2018 ION Exchange (India) Ltd. Viewpoint BOOK PROFIT i 590 590 -
Summary
• The stock price of ION Exchange (India) Ltd. (ION) has run up steeply by ~40% in less than one month since our viewpoint
initiation (dated December 7, 2017).
• Risk of stretched working capital cycle can adversely impact performance in the short term.
• We recommend to book profit, as performance of the company may remain lacklustre considering GST-related issues as well
as stretched working capital in the short term.
Report link: http://old.sharekhan.com/Upload/NewsLetter/ION_Exchange-Jan04_18.pdf
Jan 04, 2018 Ashoka Buildcon Limited Viewpoint BOOK PROFIT i 248 248 -
Summary
• Ashoka Buildcon Limited (ABL) has gained close to 70% since our first viewpoint initiation dated May 23, 2014.
• Weak order inflow during 9MFY2018 and project-specific issues to result in lower execution for FY2018.
• We advise investors to book profit at the current juncture with ~70% absolute return and wait for a better entry point.
Report link: http://old.sharekhan.com/Upload/NewsLetter/AshokaBuildcon-Jan04_18.pdf
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EQUITY FUNDAMENTALS Stock Update
Jan 05, 2018 Arvind Limited Stock Update BUY 1 447 500 1
Summary
• Early end-of-season-sale (EOSS) and low base of Q3FY2017 to be the main drivers of good business performance in Q3FY2018.
• Demerger of the branded and retail business and engineering business to enhance shareholders’ value.
• Strong revenue growth and better margin expected going ahead, maintain Buy.
Report link: http://old.sharekhan.com/Upload/NewsLetter/Arvind-Jan05_18.pdf
Jan 11, 2018 Tata Consultancy Services Stock Update HOLD  2,788 2,950 
Summary
• We maintain our Hold rating on TCS with a revised price target of Rs.2,950.
• Revenues and margins broadly in-line with our Q3FY2018 estimates.
• Digital segment delivers robust performance, making a higher contribution of 22.1% to the revenue as compared to previous
quarters.
• Retail segment likely to drive growth in FY19, in the absence of any secular growth uptick in the BFSI segment.
Report link: http://old.sharekhan.com/Upload/NewsLetter/TCS-Jan11_18.pdf
Jan 11, 2018 IndusInd Bank Viewpoint POSITIVE  1,699 15-18 
Summary
• Indusind bank reported modest Q3 FY18 performance with NII growing by 20% YOY and PAT up by 24.7% y-o-y.
• Asset quality showed marginal blip during the quarter.
• We believe IIB would sustain and/or improve on its growth momentum, aided by better growth in the CV segment and improved
pick-up in corporate credit.
• We maintain our Positive stance and expect a potential 15-18% upside from current levels.
Report link: http://old.sharekhan.com/Upload/NewsLetter/IndusInd_Bank_Viewpoint_11Jan_18.pdf
Jan 12, 2018 Infosys Stock Update HOLD  1,078 1,180 
Summary
• Infosys has reported an in-line set of numbers for Q3FY2018, with constant currency (CC) revenue up 0.8% q-o-q and EBIT
margin at 24.3%.
• New CEO will lay out the strategic priorities in April, while President Rajesh Murthy, who manages operations of Europe (25%
of total revenue) quits.
• Management hopes for pick-up in spends by BFSI clients in CY2018, led by ramp-up deals in insurance and higher digital
adoption by clients.
• We maintain our Hold rating on Infosys with a revised price target of Rs. 1,180.
Report link: http://old.sharekhan.com/Upload/NewsLetter/Infosys-Jan12_18.pdf


Jan 12, 2018 Shree Cement Stock Update HOLD 1 18,857 19,600 1
Summary
• For Q3FY2018, Shree Cement reported adjusted net profit growth of 24.5% y-o-y due to lower interest and depreciation.
• The cement segment was affected by higher power and freight costs.
• The power segment reported improved y-o-y performance due to higher volumes and realisation.
• Increased power and freight costs and higher effective tax rate are likely to limit net earnings growth in the near term.
• We maintain Hold with unchanged PT of Rs. 19,600.
Report link: http://old.sharekhan.com/Upload/NewsLetter/Shreecement-Jan12_18.pdf
Jan 15, 2018 Federal Bank Stock Update BUY 1 113 135 $
Summary
• Federal Bank reported mixed bag results for Q3FY2018.
• The corporate book is shaping up well, and we believe possible value unlocking from its insurance joint venture can prove to
be an additional positive for the stock.
• However, performance in Asset quality will be key monitorable in the near term.
• We maintain our Buy rating on the stock with a revised price target of Rs. 135.
Report link: http://old.sharekhan.com/Upload/NewsLetter/FedBank-Jan15_18.pdf
Jan 16, 2018 Ashok Leyland Stock Update BUY 1 122 157 #
Summary
• Double digit growth in MHCV to continue; Ashok Leyland Limited (ALL) the key beneficiary as MHCV contributes 70% of
revenues.
• ALL is set to grow in the LCV business and plans to launch a new product every quarter.
• Earnings of ALL are expected to grow by robust 20% in FY2018-FY2020.
• We have raised our FY2018 and FY2019 earnings estimates and also introduced FY2020 earnings. We retain Buy
recommendation with a revised PT of Rs. 157.
Report link: http://old.sharekhan.com/Upload/NewsLetter/AshokLeyland-Jan16_18.pdf
Jan 17, 2018 Hindustan Unilever Stock Update HOLD 1 1,371 1,440 #
Summary
• In Q3FY2018, revenue and PAT of Hindustan Unilever Limited (HUL) grew by 17% and 30%, respectively, on like-to-like basis,
ahead of our as well as street expectation.
• Volume growth of the domestic business improved to 11% and is expected to sustain at 8-10% on account of normalisation in
the business environment and recovery in rural demand.
• Current valuations of 49x its FY2019E earnings do not provide much upside from the current level.
• Roll-over our price target to FY2020E earnings to Rs. 1,440.
Report link: http://old.sharekhan.com/Upload/NewsLetter/HUL-Jan17_18.pdf

Jan 17, 2018 Zee Entertainment Enterprises Stock Update BUY 1 593 680 #
Summary
• For Q3FY2018, overall revenue of ZEEL increased by 12.1% y-o-y, led by strong advertisement revenue.
• OPM, at 32.3%, was above expectations, despite increased programming hours and expenses related to brand refresh.
• ZEE5 is expected to be launched in February 2018.
• We remain positive on ZEEL, as it is a structural Indian consumption theme.
• We maintain Buy with a revised PT of Rs. 680.
Report link: http://old.sharekhan.com/Upload/NewsLetter/ZEEL-Jan17_18.pdf
Jan 17, 2018 Jyothy Laboratories Stock Update BUY # 363 420 1
Summary
• Strong operating performance displayed by Jyothy Laboratories Ltd (JLL) in Q3FY18 with revenue growth of 15.9% and the
operating profit growth by 36.2% (on comparable basis).
• Management is confident of achieving 14-15% revenue growth and volume growth of 8-10% owing to a better demand
environment and smoothly operating trade channels.
• The stock corrected by 6% since our last update and 12% in last one month.
• Upgrading to Buy with an unchanged price target of Rs. 420.
Report link: http://old.sharekhan.com/Upload/NewsLetter/JyothyLab-Jan17_18.pdf
Jan 17 2018 Veto Switchgear and Cables Ltd. Viewpoint BOOK PROFIT $ 245 245 -
Summary
• Veto Switchgears and Cables Ltd. (Veto) has given superlative returns in the past two years post our view point initiation on
October 14, 2015.
• The stock is currently trading at expensive valuations.
• Although the stock has robust growth opportunity in future, rising input cost and competition are posing near-term concerns.
• We advise investors to book profit and look for better price points to re-enter the stock.
Report link: http://old.sharekhan.com/Upload/NewsLetter/Veto-Jan17_18.pdf
Jan 18, 2018 Yes Bank Stock Update BUY # 340 410 #
Summary
• Yes Bank reported strong operating performance in Q3FY2018.
• Asset-quality performance of the bank has recovered well.
• The stock, trading at ~2.7x its FY2019E BV, is reasonably valued. Considering the strong overall performance and positive
outlook, we have upgraded our rating to Buy, with a revised price target of Rs. 410.
Report link: http://old.sharekhan.com/Upload/NewsLetter/YesBank-Jan18_18.pdf


Jan 18, 2018 UltraTech Cement Stock Update HOLD 1 4,409 4,750 #
Summary
• Higher fuel and raw material costs and a considerable rise in interest expenses offsets strong volume growth of 35% for Ultra
Tech Cement in Q3.
• Efficient asset utilisation and commissioning first phase of 4mtpa Bara plant in September 2018 should aid medium-term volume
growth.
• Despite near term concerns like sand mining and higher fuel costs, we maintain a HOLD rating on the stock given the uptick in
sales volume due to its recent acquisition, improving demand outlook and pricing discipline.
Report link: http://old.sharekhan.com/Upload/NewsLetter/Ultratech-Jan18_18.pdf
Jan 19, 2018 HDFC Bank Stock Update BUY 1 1,951 2,300 #
Summary
• We maintain our Buy rating on HDFC Bank with a revised price target of Rs. 2,300.
• HDFC Bank posted strong Q3FY18, with healthy growth in advances (up 27% YoY), Net Interest Incomes (up 24% YoY) and stable
net interest margins.
• Stable asset quality and comfortable overall capital adequacy ratio at 15.5% provide impetus for capital raising plans.
• Lender to retain premium valuation by virtue of its consistency, traction in loan book and strength in retail banking.
Report link: http://old.sharekhan.com/Upload/NewsLetter/HDFC_Bank-Jan19_18.pdf
Jan 19, 2018 Reliance Industries Stock Update BUY 1 929 1,110 #
Summary
• Better than expected petchem production and EBIT margin led to marginal beat in operating profit, PAT in-line with estimates.
• Reliance JIO surprised with strong 38.2% EBITDA margin and PAT of Rs. 504 crore.
• Strong show by telecom business warrants tweak in valuation, maintain Buy and revise PT to Rs. 1,110.
Report link: http://old.sharekhan.com/Upload/NewsLetter/RIL-Jan19_18.pdf
Jan 19, 2018 HCL Technologies Stock Update BUY 1 958 1,050 #
Summary
• Revenue growth surprises positively, led by strong growth in E&RD services, margin performance remains stable q-o-q.
• Management reiterated at achieving the lower end of the revenue guidance for FY2018E. Expect organic revenue growth to
rebound in FY2019E, led by strong order booking.
• Industry-leading revenue growth and stable margin execution provide comfort on valuations, among top tier IT companies.
• We maintain our Buy rating on the stock, with a revised PT of Rs. 1,050.
Report link: http://old.sharekhan.com/Upload/NewsLetter/HCL_Tech-Jan19_18.pdf

Jan 19, 2018 Bharti Airtel Stock Update BUY 1 498 600 1
Summary
• India business remained soft for the quarter owing to ongoing competitive intensity with RJio, though Africa business continued
to surprise positively.
• OPM improved for Q3FY2018 despite lower realisation, led by better OPM from Africa and India enterprise business.
• Competitive intensity expected to taper off gradually going forward with a three-player market. International IUC cut seems to
be the last leg of regulatory change to negatively impact ARPU.
• We see gradual bottoming out of sector headwinds in CY2019 and expect Africa business to provide strength to profitability.
• We maintain our Buy rating on the stock with an unchanged price target of Rs.600.
Report link: http://old.sharekhan.com/Upload/NewsLetter/Bharti_Airtel-Jan19_18.pdf
Jan 19, 2018 Kewal Kiran Clothing Stock Update HOLD 1 1,775 1,950 $
Summary
• We reduce our earnings estimates by 5-7% of FY2018/19 and maintain Hold with revised price target of Rs 1,950.
• Revenues of Kewal Kiran Clothing Ltd’s (KKCL) remains flat but margin expansion leads to double digit growth of 25% in PAT
in Q3FY2018.
• During 9MFY2018, revenue from its key brands (including Killer and Integriti) remain below our expectation.
• Intense competition from online players impacting sales realisation, company on a wait and watch mode.
Report link: http://old.sharekhan.com/Upload/NewsLetter/KKCL-Jan19_18.pdf
Jan 19, 2018 Biocon Viewpoint POSITIVE 1 570 10 #
Summary
• Biocon has entered a synergistic partnership with Sandoz to address biosimilar opportunities beyond near-term.
• We believe biosimilars will aid earnings significantly from FY2019 and expect sales to double by FY2021 from its FY2017 base.
• We expect 10% upside in the stock over and above the 38.3% returns delivered in less than two months since our last viewpoint.
Report link: http://old.sharekhan.com/Upload/NewsLetter/Biocon-Jan19_18.pdf
Jan 19, 2018 Jubilant FoodWorks Viewpoint POSITIVE 1 2,093 12-15 #
Summary
• The stock of Jubilant Foodworks delivers 30% returns since our initiation in October. We maintain our positive view as there is
further upside of 12-15% from the current levels.
• Product upgradation and increased focus on customer satisfaction results in strong revenue growth led by store sales growth
(SSSG) of 17.8% in Q3FY2018.
• Prudent store addition on one hand and uptick in online sales on the other would help JFL maintain strong SSSG levels in
forthcoming quarters.
Report link: http://old.sharekhan.com/Upload/NewsLetter/Jubilant_Food-Jan19_18.pdf


Jan 22, 2018 ITC Stock Update HOLD 1 273 325 1
Summary
• Cigarette sales volume declined by 5% due to double-digit price hike undertaken in the GST regime.
• Non-cigarette FMCG and hotel businesses delivered strong performance, with double-digit revenue growth and improved
profitability.
• Going ahead, we expect cigarette sales volume to remain under pressure. However, non-cigarette and PPP businesses are
expected to deliver strong performance.
• The stock might come in the favour of investors if the government shows some leniency towards the cigarette industry.
Currently, we maintain Hold with unchanged price target of Rs. 325.
Report link: http://old.sharekhan.com/Upload/NewsLetter/ITC-Jan22_18.pdf
Jan 22, 2018 Axis Bank Stock Update BUY # 611 680 #
Summary
• Axis Bank reported healthy performance during Q3FY2018 on account of improved traction in loan book and better asset-
quality performance.
• Strong growth in advances and corporate credit led to improved business during the quarter.
• Currently, the stock is reasonably valued at 2.2x FY2019E BV. We opine confluence of retail traction and improvement in
corporate book health may be positive cues for the stock going forward. Hence, we upgrade our rating to Buy, with a revised
price target (PT) of Rs. 680.
Report link: http://old.sharekhan.com/Upload/NewsLetter/AxisBank-Jan22_18.pdf
Jan 22, 2018 Wipro Stock Update REDUCE 1 321 290 1
Summary
• Wipro delivers lackluster earnings performance in Q3FY18, despite meeting our modest estimates.
• Long road ahead, before catching up to industry level growth Uninspiring revenue growth guidance for Q4FY18, given customer
specific issues and industry challenges.
• We maintain our Reduce rating on the stock with an unchanged target price of Rs. 290.
Report link: http://old.sharekhan.com/Upload/NewsLetter/Wipro-Jan22_18.pdf
Jan 22, 2018 Oil and Natural Gas Corporation Viewpoint POSITIVE 1 200 12-15 #
Summary
• ONGC has agreed to acquire government’s 51.11% stake in HPCL in an all-cash deal at purchase consideration of Rs. 36,915
crore.
• The premium to be paid by ONGC is much lower compared to what was stated in previous media reports and thus, removes a
key overhang of undue stress on the balance sheet of ONGC.
• Based on valuations and robust earnings outlook, we maintain our Positive view on ONGC and expect 12-15% upside from
current level.
Report link: http://old.sharekhan.com/Upload/NewsLetter/ONGC-Jan22_18.pdf

Jan 22, 2018 GNA Axles Limited Viewpoint POSITIVE 1 454 18-20 #
Summary
• Given the robust Q3 results, we retain positive view despite healthy gains of 25% since October 2017.
• Growth outlook remains robust in domestic as well exports business.
• Revenues and earnings are estimated to grow at a CAGR of 20% and 24% respectively over FY2018-FY2020. We see further
upside potential of 18-20% in the next six months.
Report link: http://old.sharekhan.com/Upload/NewsLetter/GNA_Axles-Jan22_18.pdf
Jan 23, 2018 V-Guard Industries Stock Update BUY 1 238 265 1
Summary
• Electrical and consumer division drive revenue growth in Q3FY18.
• Number of initiatives underway to accelerate revenue growth from non-south markets. Higher focus on above the line spending
will consolidate its position as a pan-India player.
• Cash rich balance sheet and robust return ratios justify premium valuation of V-Guard.
Report link: http://old.sharekhan.com/Upload/NewsLetter/V_Guard-Jan23_18.pdf
Jan 23, 2018 RBL Bank Viewpoint POSITIVE 1 536 16-18 #
Summary
• During Q3FY2018, RBL reported healthy performance on account of strong growth in loan book and expansion in NIM.
• RBL has posted good business momentum and is expected to carry on this traction for the next few years.
• RBL is trading at reasonable valuations of 3.1x its FY2019E book value. We maintain our Positive view with a 16-18% upside
potential.
Report link: http://old.sharekhan.com/Upload/NewsLetter/RBLBank-Jan23_18.pdf
Jan 23, 2018 Can Fin Homes Viewpoint POSITIVE 1 461 18-20 $
Summary
• Fresh loan sanctions up 14.5% y-o-y to Rs. 1,547 crore, disbursements up 9.5% y-o-y to Rs. 1,322 crore.
• Asset quality remains among the best in the system, even as GNPA has inched up slightly in Q3.
• Government’s push and better affordability will drive up credit growth in housing segment that bodes well for CFH.
• We remain positive on the stock and expect an 18-20% potential upside from current levels.
Report link: http://old.sharekhan.com/Upload/NewsLetter/CanFin-Jan23_18.pdf
Jan 24, 2018 PNB Housing Finance Viewpoint POSITIVE 1 1,332 18-20 $
Summary
• Strong Q3FY18 performance in AUM (up 52.8% YoY) and PAT (up 57.8% YoY).
• Superior asset quality continues (GNPA ratio at 0.42%).
• 18-20% upside expected in the stock of PNB Housing Finance (PNBHF).
Report link: http://old.sharekhan.com/Upload/NewsLetter/PNBHousing-Jan24_18.pdf


Crompton Greaves Consumer
Jan 24, 2018 Viewpoint POSITIVE 1 250 12-15 #
Electricals Ltd.
Summary
• We reiterate our positive outlook on the stock of Crompton Greaves Consumer Electricals Ltd (CGCEL) and expect 12-15%
returns from current levels.
• Strong focus on premiumisation of product portfolio and cost reduction leads to healthy performance in Q3FY18.
• Well prepared for aggressive growth for coolers business as well as regaining lost market share in geyser business.
• We estimate revenue to grow at a CAGR of 10% and PAT at 22% during FY17-20 based on strong capabilities to maintain growth
momentum.
Report link: http://old.sharekhan.com/Upload/NewsLetter/CromptonGreaves-Jan24_18.pdf
Jan 25, 2018 Maruti Suzuki Stock Update BUY 1 9,277 11,085 #
Summary
• Maruti Suzuki is among our top picks in the automotive space, we retain a BUY rating on the stock with a revised PT of
Rs. 11,085 to factor in benefit of lower royalty payout in new model launches.
• Q3 performance in line with estimates on the operational front, though PAT slows down on lower other income and higher tax
outgo.
• MSIL expected to continue to outpace industry growth and clock 12% volume CAGR over FY2018-2020 based on strong
product pipeline and robust order book.
Report link: http://old.sharekhan.com/Upload/NewsLetter/Maruti-Jan25_18.pdf
Jan 25, 2018 Capital First Stock Update BUY # 759 930 1
Summary
• Capital First (CAPF) reported strong growth in NII and net profit during Q3FY2018, above our estimates.
• CAPF witnessed increased pace of loan book and AUM growth. Asset-quality performance also improved during the quarter.
• We upgrade our rating to BUY with an unchanged price target of Rs. 930.
Report link: http://old.sharekhan.com/Upload/NewsLetter/CapitalFirst-Jan25_18.pdf
Jan 25, 2018 UPL Stock Update BUY 1 769 980 1
Summary
• Despite weak Q3FY2018 results, Management has retained its guidance of 8-10% growth in revenue and 50-75 BPS expansion
in EBITDA margin for FY2018.
• The global agrochemical industry is expected to improve going ahead given the expected cyclical recovery in CY2018, led by
decreasing channel inventories in key regions and some uptick in agri commodity prices. UPL is better placed to benefit from
this recovery over the next 2-3 years.
• Key geographies of LATAM, India and North America to report healthy growth in the near term.
• We maintain Buy recommendation with target price of Rs. 980.
Report link: http://old.sharekhan.com/Upload/NewsLetter/UPL-Jan25_18.pdf

Housing Development Finance
Jan 29, 2018 Stock Update BUY 1 1,953 2,200 #
Corporation
Summary
• We maintain our BUY rating on the HDFC stock with a revised PT of Rs2,200.
• Strong Q3FY18 results with robust operating performance and steady spreads and NIMs.
• Strong loan book growth of 19.3% y-o-y and 5.6% q-o-q growth.
• HDFC’s attractive bouquet of associates / subsidiaries provide further value.
Report link: http://old.sharekhan.com/Upload/NewsLetter/HDFC-Jan29_18.pdf
Jan 29, 2018 LIC Housing Finance Stock Update HOLD $ 549 620 $
Summary
• We downgrade our rating on the stock of LIC Housing Finance to HOLD with a revised price target of Rs. 620.
• Increased competition in housing finance space and hardening of Cost of Funds (CoF) impacts NIMs negatively in Q3FY18.
• Change in interest rate scenario likely to may remain as an overhang on stock performance in near term.
Report link: http://old.sharekhan.com/Upload/NewsLetter/LIC-Jan29_18.pdf
Jan 29, 2018 Persistent Systems Stock Update BUY # 792 900 #
Summary
• We upgrade our rating to Buy from Hold earlier, given the strong focus of Persistent Systems Limited (PSL) on enterprise digital
transformation and improving operating performance in the coming years.
• PSL reported better-than-expected earnings performance, led by higher operating performance and lower tax expenses.
• Management remains hopeful for revenue acceleration in FY2019, given the strong digital deal pipeline. Margins are likely to
improve through operational efficiencies and improving profitability in IBM IOT partnership and Accelerite business.
Report link: http://old.sharekhan.com/Upload/NewsLetter/Persistent_Sys-Jan29_18.pdf
Jan 29, 2018 Inox Leisure Stock Update BUY 1 275 320 1
Summary
• INOX Leisure Limited (ILL) delivered impressive earnings performance in Q3FY2018, which was also the third consecutive
quarter of strong ad revenue growth.
• Operating metrics gained strong momentum. The company delivered healthy growth in ad revenue and spends per head in
F&B in 9MFY2018.
• Expect earnings to report impressive 27% CAGR over FY2018-FY2020E. We maintain our Buy rating with an unchanged price
target of Rs. 320.
Report link: http://old.sharekhan.com/Upload/NewsLetter/Inox-Jan29_18.pdf


Jan 29, 2018 Tech Mahindra Viewpoint POSITIVE # 605 15.5 #
Summary
• Stability in return of earnings and earnings visibility over the next two years makes us change our stance on TechM to “Positive”
from Neutral earlier.
• The company delivered a solid all round quarterly performance with beat across the revenues/margins/net profit levels.
• The margins trajectory is shaping up well and there is further room for improvement which is likely to be the reason for the
stock re-rating hereon.
• We expect potential return of 15.5% from current level over next 6-8 months.
Report link: http://old.sharekhan.com/Upload/NewsLetter/TechMahindra-Jan29_18.pdf
Jan 29, 2018 L&T Finance Holdings Viewpoint POSITIVE 1 178 15-18 $
Summary
• L&T Finance Holding (LTFH) posts strong Q3FY2018, with robust NII (up 36% y-o-y) and fee income (93% y-o-y) growth.
• The company reported improved NIM (NIM; calculated, up 70 bps q-o-q to 6.7%).
• While long-term story of improving return ratios (ROA and ROE) holds, upward pressure on yields can be an overhang on the
stock’s performance.
• We maintain our Positive view on the stock and expect a 15-18% upside potential.
Report link: http://old.sharekhan.com/Upload/NewsLetter/LnTHF-Jan29_18.pdf
Jan 30, 2018 Godrej Consumer Products Stock Update BUY 1 1,058 1,250 #
Summary
• We maintain our Buy recommendation on Godrej Consumer Products Limited (GCPL) with a revised price target of Rs. 1,250 in
view of long term growth prospects.
• For Q3FY18, GCPL registered a strong bottom-line growth of 23.8% driven by 210 bps expansion in the OPM.
• The domestic business registered strong comparable revenue growth of 17% with the soap segment and hair colour segment
growing by 24% and 33% respectively (on comparable basis) during the quarter.
• Recovery in rural demand, addition to product portfolio will aid further revenue growth on the domestic front while improvement
in African and Indonesian businesses will spur international business ahead in the forthcoming quarters.
Report link: http://old.sharekhan.com/Upload/NewsLetter/GCPL-Jan30_18.pdf
Jan 30, 2018 Emami Stock Update BUY 1 1,143 1,330 $
Summary
• For Q3FY2018, performance of Emami was lower than our as well as street’s expectations, with comparable revenue growth of
10% and lower OPM at 35% (affected by higher media spends).
• Baring Kesh King and Zandu Pancharishtha, all other brands (including Boro Plus Antiseptic cream and Navratna range)
registered double-digit revenue growth during the quarter.
• Management is striving for double-digit growth through new launches and realigning its distribution strategy for Kesh King
brands (improving rural demand to support revenue growth).
• The stock corrected by 7%, limiting the downside risk. We maintain our Buy rating on the stock with a revised price target (PT)
of Rs. 1,330.
Report link: http://old.sharekhan.com/Upload/NewsLetter/Emami-Jan30_18.pdf

Jan 30, 2018 Supreme Industries Stock Update BUY 1 1,259 1,450 1
Summary
• Supreme Industries Limited (SIL) delivered strong results for the quarter, led by healthy volumes across segments and
improvement in profitability.
• We remain positive on SIL, as the company is a prime beneficiary of the unorganised to organised shift in the GST regime.
• Looking at the strong long-term triggers and earnings CAGR of 29% over FY2018-FY2020E, we maintain our Buy rating on the
stock with an unchanged PT of Rs. 1,450.
Report link: http://old.sharekhan.com/Upload/NewsLetter/SupremeInd-Jan30_18.pdf
Jan 30, 2018 TVS Motor Stock Update BUY 1 713 825 1
Summary
• We retain our BUY rating on the stock of TVS Motors, our preferred pick in the two wheeler segment with a TP of Rs. 825.
• Lower other income and higher tax outgo lowers PAT slightly in Q3FY18, however results remain in line operationally.
• TVSM to report 43% earnings CAGR over FY2018-2020 period compared to about 10-15% earnings growth for larger peers on
the back of better product mix and effective cost control measures.
Report link: http://old.sharekhan.com/Upload/NewsLetter/TVSMotor-Jan30_18.pdf
Jan 31, 2018 Larsen & Toubro Stock Update HOLD 1 1,417 1,520 #
Summary
• We reiterate our HOLD rating on the Larsen & Toubro (L&T) stock with a revised price target of Rs. 1,520, convinced by the
capability of the company to achieve long term profitable growth.
• In Q3FY18, L&T delivers margin expansion and strong bottom line growth due to cost curtailment and robust execution
capabilities.
• L&T is the best play on the domestic capex cycle recovery and will be able to enhance order book growth given its execution
efficiency.
Report link: http://old.sharekhan.com/Upload/NewsLetter/LnT-Jan31_18.pdf
Jan 31, 2018 ICICI Bank Stock Update BUY 1 353 400 #
Summary
• ICICI Bank has posted in-line operating performance for Q3FY2018.
• Retail traction seen in Overall loan growth.
• CASA ratio increase.
• Asset-quality performance was better than expectations.
• We maintain Buy rating with a revised price target (PT) of Rs. 400.
Report link: http://old.sharekhan.com/Upload/NewsLetter/ICICIBank-Jan31_18.pdf


Jan 31, 2018 Arvind Limited Stock Update BUY 1 413 500 1
Summary
• Arvind posted decent performance in Q3FY2018 with revenues and PAT growing by 16% and 8% respectively.
• Q3 was yet another quarter of strong performance by Branded & Retail business of Arvind with ~24% growth in revenues and
more than 300BPS improvement in the OPM.
• We have fine-tuned our earnings estimates and maintain our Buy recommendation on the stock with an unchanged price target
of Rs. 500.
• Demerger into separate entities will enhance shareholders value in near future.
Report link: http://old.sharekhan.com/Upload/NewsLetter/Arvind-Jan31_18.pdf
Jan 31, 2018 Dabur India Viewpoint POSITIVE 1 354 16-18 #
Summary
• Dabur India Ltd. (Dabur) registered double-digit revenue and PAT growth during Q3FY2018.
• During the quarter, revenue of the domestic business grew strongly, while that of the international business remained muted.
• We expect the domestic business to maintain its strong performance in the coming quarters with revival in rural demand.
• In view of decent earnings visibility and better valuations, we maintain our Positive view on the stock with 16-18% upside.
Report link: http://old.sharekhan.com/Upload/NewsLetter/Dabur-Jan31_18.pdf
Jan 31, 2018 Indian Oil Corporation Viewpoint POSITIVE 1 418 10-12 #
Summary
• Indian Oil Corporation Limited (IOCL) reported higher-than-expected operating profit in Q3FY2018, supported by refining
inventory gain, product inventory gain and forex gain.
• Domestic petroleum product sales volume increased, but IOCL continued to lose market share in diesel and petrol.
• We expect refining margin to remain firm over FY2019E-FY2020E, owing to strong global oil demand growth.
• We maintain our Positive view on IOCL.
Report link: http://old.sharekhan.com/Upload/NewsLetter/IOCL-Jan31_18.pdf
Jan 31, 2018 GIC Housing Finance Viewpoint BOOK OUT $ 422 422 -
Summary
• The risk reward ratio appears to be adversely placed for a smaller player like GIC Housing Finance (GICHF), and we opine it
prudent to book out from GICHF and instead opt for larger and faster growing HFCs.
• During Q3FY2018, GICHF witnessed deterioration in asset quality on sequential basis.
• Although performance on loan growth for GICHF was better compared to its own earlier quarters, considering the low base and
its loan book size, we believe it is a tad slower than comparable peers.
Report link: http://old.sharekhan.com/Upload/NewsLetter/GIC-Jan31_18.pdf

EQUITY FUNDAMENTALS SECTOR UPDATE
Sector View
Date Sector Report Type
Latest Chg
Jan 02, 2018 Automobiles Sector Update Positive 1
Summary
• Automobile sales for December 2017 grew in double digit across segments attributable to the low base effect in December
2016 on account of Demonetization.
• The PV sales (up 10%) and 2W sales (up 40%) grew on account of a low base coupled with discounts being offered by the OEM’s
to clear off the year end stocks.
• The CV segment sales surged 55% benefitting by a low base in December 2016 and a pre-buying ahead of the upcoming Air
conditioning effective January 2018.
• Our preferred pick: Maruti Suzuki, TVS Motors and M&M.
Report link: http://old.sharekhan.com/Upload/NewsLetter/Automobile-Jan02_18.pdf
Jan 05, 2018 Q3FY2018 IT results preview Sector Update Neutral 1
Summary
• Constant currency revenue growth is expected to remain modest owing to seasonally weak quarter and continued softness in
BFS in North America.
• Margins are expected to remain stable despite lower revenue, led by absence of wage hike and operational efficiencies.
• We expect FY2019 to witness some improvement, given the low base effect of FY2018 coupled with expectations of improvement
in the BFS vertical.
• We continue to maintain our Neutral stance on the sector, with selective Buy recommendations, given lack of visibility on
earnings performance
Report link: http://old.sharekhan.com/Upload/NewsLetter/Q3FY2018_IT_results_preview_050118.pdf
Jan 08, 2018 Q3FY2018 Pharma results preview Sector Update Cautious 1
Summary
• We anticipate weak performance for the pharma sector for Q3FY2018 due to continuing regulatory and pricing challenges in
the U.S.
• We expect the domestic business to bounce back.
• U.S. business is expected to remain under pressure.
• Biocon & Divis Laboratories are our preferred picks for the quarter.
Report link: http://old.sharekhan.com/Upload/NewsLetter/Q3FY2018_Pharma_results_preview_080118.pdf
Jan 08, 2018 Q3FY2018 Oil & Gas results preview Sector Update Positive 1
Summary
• Inventory gains to get partially offset by lower auto fuel marketing margins for oil marketing companies.
• Rise in crude oil prices to add to realisations of ONGC and Oil India. City gas distributors and mid-stream players to see a mixed
quarter.
• Preferred picks are Reliance Industries given strong EBITDA contribution from commissioning of downstream projects and
ONGC that stands to benefit from higher gas output and better realisation.
Report link: http://old.sharekhan.com/Upload/NewsLetter/Q3FY2018_OilGas_results_preview_080118.pdf

SECTOR UPDATE EQUITY FUNDAMENTALS
Sector View
Latest Chg
Jan 09, 2018 Q3FY2018 Automobiles results preview Sector Update Positive 1
Summary
• Auto sector expect to post robust revenue growth of 21%, registering double digit topline growth for the third consecutive
quarter.
• Declining margin trend to end in Q3FY18, strong double digit net profit growth of 17% expected after a three quarter gap.
• Double digit volume growth expected to continue unabated for auto sector after normalization under the new GST regime and
robust rural demand.
• Our preferred picks in the automotive sector are Maruti Suzuki, M&M and TVS Motors.
Report link: http://old.sharekhan.com/Upload/NewsLetter/Q3FY2018_Auto_preview_090118.pdf
Jan 09, 2018 Q3FY2018 Consumer goods and services results preview Sector Update Positive 1
Summary
• In Q3FY2018, revenue of consumer goods companies is likely to grow in high single digit to low double digit on account of
expected pick-up in rural demand.
• Except for copra, menthe oil and LLP, other key input prices have remained lower on a y-o-y basis, which will fuel margin
expansion of most companies under our coverage.
• Pick-up in rural demand and shift from non-branded to branded products under the GST regime will drive the performance of
FMCG companies in the near term.
• Preferred picks are Britannia Industries, Dabur India, Emami and Varun Beverages.
Report link: http://old.sharekhan.com/Upload/NewsLetter/Q3FY2018_ConsumerGoods_preview_090118.pdf
Jan 09, 2018 Q3FY2018 Capital Goods & Engineering results preview Sector Update Neutral 1
Summary
• We prefer L&T in the large-cap space and KPTL and KEC among others in CG&E space.
• Ramp up in execution pace, a rewarding festive season and a reduction in GST rates likely to result 12% YoY topline growth for
the CG universe.
• Margin to remain flat; PAT expected to grow by 7% YoY.
• Revival pending in the investment cycle; electrical consumer goods companies are in sweet spot.
Report link: http://old.sharekhan.com/Upload/NewsLetter/Q3FY2018_CapitalGoods_preview_090118.pdf
Jan 09, 2018 Q3FY2018 Cement results preview Sector Update Neutral 1
Summary
• Volume growth to lead to growth in Q3FY2018 revenue.
• However, OPM of our coverage universe likely to contract, thus resulting in lower net earnings.
• Going ahead, we believe recovery hinges on better pricing and/or lower fuel cost.
Report link: http://old.sharekhan.com/Upload/NewsLetter/Q3FY2018_Cement_preview_090118.pdf

EQUITY FUNDAMENTALS SECTOR UPDATE
Sector View
Latest Chg
Jan 10, 2018 Q3FY2018 Banking and NBFC results preview Sector Update Positive 1
Summary
• Q3FY2018 marks the onset of the busy season for the banking sector and will be key indicator of overall credit growth in
FY2018E and beyond.
• We expect PSBs and few private sector corporate lending banks to show improved core earnings for Q3FY2018 with improved
outlook.
• Retail/consumer-focused private banks will likely continue their growth trend.
• We expect well-run, retail-focused NBFCs to continue to perform and gain market share from banks.
Report link: http://old.sharekhan.com/Upload/NewsLetter/Q3FY2018_Banking_preview_100118.pdf
Jan 10, 2018 Q3FY2018 Consumer Discretionary results preview Sector Update Positive 1
Summary
• In Q3FY2018, revenue of branded apparel and retail companies is likely to grow by 11% on account of restocking post GST, early
EOSS and low base of demonetisation.
• OPM of export-driven businesses to be under pressure due to strong rupee, but domestic branded apparel and retail to see
increased profitability due to low base.
• We expect H2FY2018 to be better than H1FY2018 in terms of consumer spending because of the upcoming festive/wedding
season and gradual restocking in the supply chain.
• Preferred picks are Arvind, Relaxo, Bata and Jubilant FoodWorks.
Report link: http://old.sharekhan.com/Upload/NewsLetter/Q3FY2018_ConsumerDisc_preview_100118.pdf
Price Target/ Upside

Recommendation Reco Price
Date Company Report Type (%)
(Rs.)
Latest Chg Latest Chg
Jan 10, 2018 Q3FY2018 results preview Sharekhan Special - - - - -
Summary
• Aggregate earnings of Sensex companies are expected to grow at a healthy rate of 16.4% in Q3.
• Q3FY2018 will be a crucial quarter for the financial sector.
• We opine investors should be selective and focus on secular themes to capture growth.
Report link: http://old.sharekhan.com/Upload/NewsLetter/Q3FY18Resultspreview-10Jan_18.pdf
Jan 17 2018 Union Budget Preview (2018-19) Sharekhan Special - - - - -
Summary
• Government likely to maintain fiscal deficit target on buoyant indirect tax collections.
• Higher exemption (under Section 80C/80CC) expected, income/ corporate tax not to change much.
• Consumer-discretionary, sectors driven by rural demand to benefit the most, besides construction, retail and defence companies.
• Preferred pre-budget picks: Bharat Electronics, Ashok Leyland, Arvind, Sadhbhav Engineering, Birla Corp and Emami.
Report link: http://old.sharekhan.com/Upload/NewsLetter/UnionBudgetPreview-Jan17_18.pdf

TREND & VIEW EQUITY TECHNICALS
Corrective mode
Daily view on Nifty
The index has completed an impulse move from the low
of 10033 to the high of 11171 and has witnessed a sharp
correction.
The 78.6% retracement level of its previous rise will act as a
support in the near term, below which it is likely to drift lower
towards 10033.
Given that it has breached the 20DMA and 40DEMA and has
broken the higher top higher bottom formation, the short-
term trend has turned bearish.
In case of a bounce, rise towards 10586 – 10668 shall be
considered as a selling opportunity.
The momentum indicator on the daily chart is in a bearish
mode.
Crucial support for the index will be at 10276 and 10033,
while crucial resistance will be at 10586 and 10668.
Weekly view on Nifty

From the Elliot Wave perspective, the index has completed
Wave (III) and Wave (IV) is in progress.
Therefore, on the way down, Nifty is likely to drift lower
towards 10033 and subsequently towards 9800 i.e., Weekly
Lower Bollinger Band.
From the medium-term perspective, rise towards 10668 –
10723 shall be considered as selling opportunities as long
as it is trading below 20DMA, which is currently pegged at
10840.
The momentum indicator on the weekly chart has turned
bearish.
Crucial support will be at 10033 and 9800, whereas crucial
resistance will be at 10668 and 10840.
Monthly view on Nifty

On the monthly chart, the index is making higher top higher
bottom formation, indicating uptrend in the long term.
Currently, the index has touched the upper end of the rising
channel and has witnessed a correction.
From Elliot Wave perspective, the index is currently in Wave
(IV) of Wave (5 ) of larger degree Wave (3). The corrective
Wave (IV) can last for few weeks or few months.
However, the longer-term trend is bullish, as Wave (V) on
the way up is pending. Dip towards 9800 – 9700 shall be
considered as a buying opportunity.
The momentum indicator on the monthly chart is in a bullish
mode.
Crucial support will be at 9800 and 9700, whereas crucial
resistance will be at 10987 and 11171.
Trend Trend reversal Support Resistance Target

Down 10840 9800 10840 9800

EQUITY DERIVATIVES MONTHLY VIEW
Market quite heavy in terms of open interest
Nifty started January series on a positive note and Top five stock futures with the highest open interest in the current
series are:
moved one side in the northward direction and had been
STOCK FUTURES OPEN INTEREST
constantly making new lifetime highs in this series, ahead (SHAREKHAN SCRIP CODE) (Rs. Cr)
of the positive expectation of the Union Budget scheduled INFY 4,400.88
on February 1, 2018. On the open interest, Nifty is quite HDFCBANK 4,169.83
heavy in indicating its presence in the overbought zone. RELIANCE 3,963.59
HDFC 3,600.89
ICICIBANK 3,017.38
MARKET WIDE VS NIFTY ROLLOVER ACTIVITY:
Nifty Market Wide
100%
Top five stock options with the highest open interest in the current
90% series are:
80%
70%
STOCK OPTION OPEN INTEREST
60%
(SHAREKHAN SCRIP CODE) (Rs. Cr)
ICICIBANK 1,437.59
86.42%
85.68%
85.72%
50%
84.98%
83.94%
85%
72.69%
73.19%
69.87%
40%
63.28%
RELIANCE 1,416.86
66%
57.96%
30%
20% ITC 1,126.35
10%
0%
SBIN 1,072.21
Feb
Sep
Jan
Dec
Nov
Oct
MARUTI 971.70
Rollover highlights:-
View for February series:
• Nifty Future started February series with 2.52 crore vs. On the options front, Nifty 10500 PE has seen significant
2.28 crore shares in open interest. amount of addition in open interest in the past few trading
sessions and has now seeing unwinding after the sharp fall
• February series started with Rs. 130,439 crore vs.
seen in last few trading session. While, on the other hand,
Rs. 120,662 crore in stock futures, Rs. 28,681 crore vs.
interestingly deep out ofthe-money option i.e., 11500 CE is
Rs. 24,018 crore in Nifty futures, Rs. 135,917 crore vs.
the highest in open interest.
Rs. 128,552 crore in index option and Rs. 12,744 crore
vs. Rs. 11,344 crore in stock options. PCR has been trading above 1.50 throughout January
series and touched the high of 1.89. In February series also,
• Nifty February rollover was at 66.24% vs. 73.19%. it started on the higher side at 1.10, which indicates that the
market is in the overbought zone. While, on the other hand,
• Market-wide rollover was 85.15% vs. 85.72%.
volatility index has been continuously inching higher and is
now at 20.85 levels, this shows the amount of skepticism
amongst the market participants due to selling across the
globe. Seeing the above data and with high volatility and
above all the highest put base of 10500 PE have started
seeing unwinding, hence we feel Nifty could see more
downside in the first half of the February series. Thus we
recommend to stay light on your long position and Nifty in
the coming trading session can see 10000-10200 levels in
the coming trading session.

MONTHLY VIEW CURRENCY FUNDAMENTALS
Currencies: Pound and Euro gained strength on solid economic data

Key points
CURRENCY LEVELS IN JANUARY (IN RS.)
World Bank raised its global economic growth to 3.1% for 2018 up 0.2
percentage points from June estimate Currency High Low Close Monthly chg (%)
India Inflation rose 5.21% in December 2017 compared to 4.88% in USDINR 64.11 63.25 63.59 -0.45
November 2017
India Industrial Production increased by 8.4% in November 2017 in EURINR 79.33 75.86 79.19 3.47
contrast to 2.2% in October 2017
As per Economic Survey, India’s GDP growth for FY2018 is seen at GBPINR 90.96 85.67 89.92 4.22
6.75% and FY2019 at 7-7.5% JPYINR 58.68 55.88 58.46 2.98
As per Economic Survey, India’s current account deficit for FY2018
expected to average 1.5-2% of GDP
Spot INR Movement in January Spot INR Movement in January
USDINR JPYINR EURINR GBPINR
64.2 58.8
90.7
79.2
90.2
64 58.3
78.7
89.7
63.8 57.8 78.2 89.2
88.7
77.7
63.6 57.3 88.2
77.2 87.7
63.4 56.8
76.7 87.2
86.7
63.2 56.3 76.2
86.2
75.7 85.7
63 55.8
04-Jan-18
06-Jan-18
08-Jan-18
10-Jan-18
12-Jan-18
14-Jan-18
16-Jan-18
18-Jan-18
20-Jan-18
22-Jan-18
24-Jan-18
26-Jan-18
28-Jan-18
30-Jan-18
04-Jan-18
06-Jan-18
08-Jan-18
10-Jan-18
12-Jan-18
14-Jan-18
16-Jan-18
18-Jan-18
20-Jan-18
22-Jan-18
24-Jan-18
26-Jan-18
28-Jan-18
30-Jan-18
USD-INR: CMP Rs. (64.06)

Indian Rupee appreciated by 0.45% in the previous month on account of weakness in Dollar and optimistic domestic market sentiments. Market
sentiments improved after IMF forecasts India to grow 7.4% in FY2019 against 6.7% this year and 7.8% in FY2020 and Economic Survey projects India’s
GDP growth for FY2018 at 6.75% and FY2019 at 7-7.5%. Further, FII inflows into local shares and debt market supported Rupee. As per NSDL, $3,497.76
inflows from FIIs in local shares and debt market was seen in January 2018. However, further gains were prevented on disappointing inflation data
and rise in crude oil prices. Traders were worried that rise in inflation will prevent the Reserve Bank of India (RBI) from reducing interest rates in future.
Outlook: Indian Rupee is expected to trade with a negative bias on account of strong Dollar. Dollar will gain strength on upbeat economic data from
the US and as US Federal Reserve remained hawkish on the economy signaling a gradual rate hike in future. Further, disappointing economic data
from the country and rise in crude oil prices will weigh on the Rupee. Investors are worried that rise in crude oil prices will stoke inflation. Rise in
inflation may lower the possibility of rate cut by the RBI. Forex market sentiments may remain subdued as the government announced long-term
capital gains tax on equities and widened its fiscal deficit target. The Indian government in its Union Budget fixed fiscal deficit target for FY2019 at
3.3% and for FY2018 at 3.5%. As per REER, based on a basket of currencies of 36 trading partners, Rupee is overvalued. Traders will remain cautious
ahead of RBI’s monetary policy. The expected trading range in the near term is 63.50 – 65.0.
EUR-INR: CMP Rs. (80.01)
Euro appreciated by 3.41% in the previous month on account of weakness in dollar and solid economic data from Eurozone. Further, expectation of
winding up of QE sooner than expected and ease in political uncertainty in Germany supported Euro. European Central Bank (ECB) kept its monetary
policy unchanged. ECB President, Mario Draghi said economic data pointed to ‘solid and broad’ growth with inflation likely to rise in the medium term.
Outlook: Euro is expected to correct from its three-year high against Dollar in the early part of the month, as traders will remain cautious ahead of Mr.
Draghi’s speech and economic data from Eurozone. Demand for Dollar may go up on upbeat economic data from the US and as US Federal Reserve
remained hawkish on the economy signaling a gradual rate hike in future. Worries over political uncertainty in Spain and Italy will keep Euro under
pressure. Traders will remain alert ahead of Italian Parliamentary Elections. However, in the later trading part of the month, Euro may gain back its
strength again on solid economic data from Eurozone and expectation of winding up of QE sooner than expected. The expected trading range in the
near term is 78.0–81.00.
GBP-INR: CMP Rs. (91.10)
British pound appreciated by 5.02% in December 2017 on account of weakness in Dollar and solid economic data from the UK. Further, British
lawmakers voted in favour of the government’s Brexit bill. Moreover, investors bet on a softer-than-expected Brexit deal.
Outlook: Pound is expected to correct from its recent high against dollar as traders will remain cautious ahead of Bank of England’s (BOE) monetary
policy and economic data from the UK. BOE is expected to keep its monetary policy unchanged. More focus will be on statements from the central
bank to get fresh clues. Traders will also remain alert ahead of Brexit news and inflation report hearings where BOE Governor and several MPC
members testify on inflation and the economic outlook before Parliament’s Treasury Committee. If the central bank remains positive on inflation and
economic growth and signals monetary tightening sooner than expected, then we may see a sharp bounce back in Pound. The expected trading
range in the near term is 88.90 – 92.50.
JPY-INR: CMP Rs. (58.29)
The Yen appreciated by 3.11% in the previous month on account of weakness in Dollar and upbeat economic data from Japan. Further, Bank of Japan
kept its monetary policy untouched. The Central Bank now sees inflation expectations unchanged, whereas it previously saw them weakening.
Outlook: Yen is expected to trade with a negative bias in the early trading part of the month on account of divergence in monetary policy. Demand for
Dollar may go up on upbeat economic data from the US and as US Federal Reserve remained hawkish on the economy signaling a gradual rate hike
in future. However, sharp downside may be prevented on account of solid economic data from Japan and as demand for a safe haven may increase
on rising geopolitical tensions in Middle East and political uncertainty in Eurozone. The expected trading range in the near term is 57.40 – 59.50.
CMP as on February 03, 2018

CURRENCY TECHNICALS TREND & VIEW
USDINR: Downward trajectory EURINR: Bulls in control

l USDINR, in the month gone by, breached the crucial l EURINR formed multi-week consolidation and broke out
swing low of 63.56 as well as the 50% retracement on the upside in January 2018.
mark. l The weekly momentum indicator that had contracted
l This means that the multi-month fall is extending further significantly has started expansion.
on the downside. l Thus, the currency pair is witnessing a sharp move on
l The weekly and monthly momentum indicators are also the upside.
indicating further downside for the currency pair. l The weekly momentum indicator has started a new
l The larger picture shows that USDINR is tumbling down cycle on the upside from the equilibrium line.
towards the 61.8% retracement mark, which is near l Overall set up suggests that the rally is likely to continue
62.30. further.
MACD (-0.27453) 1.0 KST (2.76986)
10
0.5
5
0.0
0
-0.5
-5
USDINR - INDIAN RUPEE (63.6000, 64.0550, 63.4800, 63.9700, +0.39000) 70.5
68.80 70.0 EURINR (78.9860, 80.1160, 78.4170, 80.0140, +1.05400) 95
69.5 94
93
0.0% 69.0 100.0% 92
68.5 91
90
68.0
89
67.5
88
67.0 87
78.6%
66.5 86
23.6%
85
66.0
84
65.5 83
65.0 61.8% 82
38.2%
81
64.5
80
64.0
50.0% 79
50.0% 63.5 78
63.0 77
38.2% 76
62.5
61.8% 75
62.0
74
61.5 73
61.0 23.6% 72
60.5 71
70
60.0
69
59.5
68
59.0
67
58.5 66
100.0% 0.0%
58.0 65
57.5 64
2014 M A M J J A S O N D 2015 M A M J J A S O N D 2016 M A M J J A S O N D 2017 A M J J A S O N D 2018 A M J J A S O

2013 A M J J A S O N D 2014 A M J J A S O N D 2015 A M J J A S O N D 2016 A M J J A S O N D 2017 A M J J A S O N D 2018 A M J J A S O N
GBPINR: Swift move JPYINR: Bullish stance

l GBPINR is on an uptrend from the short-term as well l JPYINR was stuck in a narrow range for the past several
as medium-term perspective. The rise is unfolding in a months. 56.25-56 acted as a strong support zone for
channelised manner. the currency pair.
l During November-December 2017, the currency pair l The range-bound trading activity had formed a triangular
formed a base near the key weekly moving averages pattern and the pattern has recently broken out on the
and the lower channel line. upside.
l In January 2018, the currency pair started the next leg l Thus, the currency pair is expected to attempt deep
on the upside and has surpassed several crucial hurdles retracement of the previous multi-month decline.
on the way up. l Momentum indicators on various time frames are in line
l The upmove is being accompanied by momentum with the bullish price breakout.
indicators as well.
MACD (1.20586) KST (0.74520)
1
5
0
-1 0
-2
-5
-3
GBPINR (90.0210, 91.3300, 89.1240, 91.2470, +1.16700) 108
JPYINR (58.4874, 58.6908, 58.0577, 58.4628, -0.01230) 71.0
107 70.5
106 70.0
100.0% 69.5
105 69.0
104 68.5
0.0% 100.0% 68.0
103 67.5
67.0
102 66.5
101 66.0
65.5
100 65.0
99 64.5
23.6% 64.0
98 61.8% 63.5
97 63.0
62.5
96 50.0% 62.0
61.8% 38.2% 61.5
95
61.0
94 38.2% 60.5
93 60.0
50.0% 50.0% 59.5
92 59.0
23.6%
91 58.5
58.0
90 57.5
61.8%
38.2% 89 57.0
56.5
88 56.0
0.0%
87 55.5
55.0
86 54.5
78.6%
23.6% 85 54.0
53.5
84 53.0
83 52.5
52.0
82
51.5
81 51.0
100.0%
50.5
80
50.0
0.0% 79 49.5
49.0
78
48.5
77
M A M J J A S O N D 2016 M A M J J A S O N D 2017 M A M J J A S O N D 2018 M A M J
M J J A S O N D 2016 M A M J J A S O N D 2017 M A M J J A S O N D 2018 M A M J J A S
Currency View Reversal Supports Resistances Target

USD-INR Down 64.55 63.48/63.24 64.27/64.44 62.30
GBP-INR Up 88.45 90.08/89.12 92.20/92.80 95.30
EUR-INR Up 77.69 78.80/77.99 81/81.92 81.65-84
JYP-INR Up 57.40 58.05/57.88 59.45/60 60.49

WEALTHOPTIMIZER PMS DESK
WEALTHOPTIMIZER PMS
The Indian equity market presents an excellent opportunity for the long-term investors. Sharekhan offers you solutions to meet your financial
objectives. WealthOptimizer is a portfolio management product that involves enhancing wealth over the long term. The goal is to not only
outperform the market but also generate superior returns.
Strategy
• To invest in the most undervalued stocks of growing companies on the basis of reported financial performance
How the product works

• Fundamental analysis is performed on more than 5,000 companies
• Stocks with sound fundamentals are picked, subject to strategy conditions
• Top 10 stocks are selected each day based on the maximum scope to grow
• No particular sector forms more than 20% of the client’s portfolio
• Fundamentals of stocks held are reviewed every quarter based on quarterly results
• Automated decision making system for transparent and disciplined investing
Key product specifications

• Minimum investment amount: Rs25 lakh
• Recommended investment duration: Two years or more
Phone: 022-6750 2152 / 2261 / 2363 / 2104 • E-mail: pms@sharekhan.com
Disclaimer: Product is offered by Sharekhan Ltd (Registered Portfolio Manager with SEBI Regn. Nos. INP000000662 CIN No. U99999MH1995PLC087498) and having registered office at 10th Floor, Beta Building, Lodha
iThink Techno Campus, Off. JVLR, Opp. Kanjurmarg Railway Station, Kanjurmarg (East), Mumbai -400042, Maharashtra. Tel: 022-61150000. Email: igc@sharekhan.com, pms@sharekhan.com. This information does not
purport to be an invitation or an offer for services, client is required to take independent advise before opting for any service. Securities investments are subject to market and other risks and client should refer to the risk
disclosure document carefully. Past performance is no indication of future results. Future performance may vary. Detailed disclaimers and risk disclosure document is available on our website www.sharekhan.com, please
acquaint yourself with these before investing.

PMS DESK PMS FUNDS
Portfolio Management Service

We are pleased to introduce you to Sharekhan Portfolio We have the following strategies on offer:
Management Service (PMS) in which we completely manage
your investment portfolio so that you stop worrying about ProPrime (based on fundamental research)
the market volatility and focus your energy on things that Diversified Equity
you like to do!
ProTech (based on technical analysis)
We have a wide range of strategies that you can choose
Index Futures Fund Trailing Stops
from. Our strategies are based on fundamental research
and technical analysis.
PROPRIME - DIVERSIFIED EQUITY

Product performance
OVERVIEW as on January 31, 2018
The investment product aims to outperform the benchmark indices with relatively DE Nifty
(In %) Sensex Nifty
lower volatility in the portfolio. Strategy 500
1 Month 0.5 5.6 4.7 2.2
3 Month 1.9 8.3 6.7 5.9

INVESTMENT STRATEGY
6 Month 7.1 10.6 9.4 10.3
Disciplined investment decisions are taken in specific stocks based on thorough
fundamental research. 1 Year 27.1 30.0 28.8 31.4
2 Year 53.4 44.6 45.8 53.0

The product seeks to achieve the outperformance through superior selection of
well researched, quality companies to build a well balanced, diversified portfolio. 3 Year 38.9 23.2 25.2 35.3
It is a low-risk, low-chum portfolio with bulk of investment (range of 65-75%) in Top *Note : Net of Quarterly AMC Fees
100 large-cap companies and the rest invested in well researched, quality mid-cap
companies. Disclaimer: Returns are based on a client’s
returns since inception and may be different
from those depicted in the risk disclosure
document.
PRICING
Top 10 stocks
Minimum investment of Rs. 25 lakh
Bajaj Finserv
Charges
Bharti Airtel
¾¾ 2.5% per annum; AMC fee charged every quarter
Britannia Industries
¾¾ 0.5% brokerage
HDFC Bank
¾¾ 20% profit sharing after the 15% hurdle is crossed at the end of every fiscal
Indusind Bank
Larsen & Toubro
Maruti Suzuki India
Reliance Industries
TVS Motors
Zee Entertainment Enterprises
FUND OBJECTIVE
A good return on money through long-term investing in quality companies

PMS FUNDS PMS DESK
PROTECH - INDEX FUTURES FUND
OVERVIEW
The ProTech–Index Futures Fund PMS strategy is suitable for long-term investors Product performance
who desire to profit from both bullish and bearish market conditions. The strategy as on January 31, 2018
involves going long (buying) or going short (selling without holding) on Nifty futures by NT
(In %) Sensex Nifty
predicting the market direction based on a back-tested automated model. Strategy
1 Month 4.70 5.60 4.72
3 Months 2.63 8.29 6.70

INVESTMENT STRATEGY
Fy 16-17 -14.88 16.88 18.55
The strategy has the potential to generate profits irrespective of the market
direction by going long or short on Nifty futures. Fy 15-16 11.28 -9.36 -8.86
An automated basic back-testing model is used to predict the market direction for Fy 14-15 -3.41 24.89 26.65
the Nifty which then decides the strategy to be deployed in terms of going long
or short. Fy 13-14 8.79 18.85 17.98
The portfolio is not leveraged, ie its exposure never exceeds its value. Fy 12-13 3.65 8.23 7.31
Fy 11-12 13.10 -10.50 -9.20

PRICING Fy 10-11 9.20 10.90 11.10
Minimum investment of Rs. 25 lakh Fy 09-10 14.70 80.50 73.80
Charges Since Inception* 168.95 255.23 264.96
¾¾ AMC fees: 0% Best Month 28.90 28.26 28.07
¾¾ Brokerage: 0.05% Worst Month -17.10 -23.89 -26.41
Best Quarter 33.30 49.29 42.04

¾¾ Profit sharing: Flat 20% charged on a quarterly basis
Worst Quarter -17.73 -24.98 -24.53
*01-Feb-2006
Disclaimer: Returns are based on a client’s

FUND MANAGER’S VIEW returns since inception and may be different
document.
A very good month that closed out with a 4.7% gain. It was mostly riding the up move in Nifty as
we were long for the entire month. The market is trending nicely and that has had a favourable Investments in
impact on the performance. Markets have been on a wild ride up and volatility is going to go up Nifty Index
in the coming year and we are happy about that. Larger moves are good for our long short fund
strategy as they result in fewer drawdowns and bigger returns. We look forward to this change
sooner than later.
Fund Manager: Rohit Srivastava
FUND OBJECTIVE
Absolute returns irrespective of market conditions.

PMS DESK PMS FUNDS
PROTECH - TRAILING STOPS
OVERVIEW
Our ProTech–Trailing Stops PMS strategy is ideal for Traders and Investors looking Product performance
for Regular Income from trading and desire to make profits in both bullish and bearish
as on January 31, 2018
market conditions. It is designed to payout book profits on monthly basis.*
TS
It is also for those investors who are looking for better income than Fixed Income or (In %) Sensex Nifty
Strategy
Deposits. This strategy involves going Long (buying) or Short (selling without holding)
on stock futures. 1 Month 0.53 5.60 4.72
* Terms and conditions apply 3 Months 8.96 8.29 6.70
Fy 16-17 3.79 16.88 18.55

INVESTMENT STRATEGY Fy 15-16 -0.56 -9.36 -8.86
This strategy spots the winning trades based on technical analysis vs time frame- Fy 14-15 -3.69 24.89 26.65
based portfolios, basically the momentum calls.
Fy 13-14 -1.06 18.85 17.98
A risk model has been developed for stock portfolio allocation that reduces the risk
and portfolio volatility through staggered building of positions. Fy 12-13 14.89 8.23 7.31
It is non-leveraged—the exposure will never exceed the value of the portfolio. Fy 11-12 29.00 -6.10 -4.60
Fy 10-11
PRICING Fy 09-10
Minimum investment of Rs. 25 lakh Since Inception* 45.23 94.10 98.66
Charges Best Month 9.96 11.25 12.43
¾¾ AMC fees: 0% Worst Month -6.49 -8.93 -9.28
Best Quarter 10.18 13.52 13.53

¾¾ Brokerage: 0.05%
Worst Quarter -8.20 -12.69 -12.47
¾¾ Profit sharing: Flat 20% charged on a quarterly basis
*09th May 2011
Disclaimer: Returns are based on a client’s

FUND MANAGER’S VIEW returns since inception and may be different
document.
At 0.5%, the returns are small for this month but there was a big deviation in the market. The Nifty
and Midcap indices parted ways after the January 18. They moved in opposite directions. We took
a stance to stick with the short side on weaker stocks that helped us make up for the confusion.
The coming months should be better as the market ends its distribution phase. Markets have been Investments in
on a wild ride up and volatility is going to go up in the coming year and we are happy about that. Nifty Index
Larger moves are good for our long short fund strategy as they result in fewer drawdowns and Stock futures
bigger returns. We look forward to this change sooner than later.
Fund Manager: Rohit Srivastava
FUND OBJECTIVE
Absolute returns irrespective of market conditions.

MONTHLY PERFORMANCE ADVISORY DESK
Advisory Products and Services

The Advisory Desk is a central desk consisting of a Mumbai-based expert
team that runs various sample model portfolios (for illustrative purposes
only) for clients of all profiles, be they traders or investors.
These products are different from Sharekhan research-based technical
and fundamental offerings as these essentially try to capture the trading
opportunities in stocks where momentum is expected before or after
some event including the announcement of results or where some news/
event is probable.
Advisory products are ideal for those who do not have time to either
monitor the market tick by tick or shift through pages of research for data
or pour over complex charts to catch a trend. However, all these products
require perfect discipline and money management.
For investors
PORTFOLIO DOCTOR
It is a service under which the Portfolio Doctor reviews an existing portfolio based on various parameters and suggests changes to
improve its performance. To avail of this service please write to the Portfolio Doctor at portfoliodoctor@sharekhan.com.
NEW ALPHA DELIVERY PICKS

This is a long only, cash market delivery product where stock ideas will
New Alpha Delivery Picks Rules
be rolled out based on short-term triggers with proper fundamental
rationale. Recently we revised certain features of Alpha Delivery Picks Ideas Ideas based on Stock Ideas,
to incorporate ideas from both the Fundamental research desk and Viewpoints, Stock Updates,
the Market analysis team. The time frame of the stock ideas in New Market analysis
Alpha Delivery Picks will be a maximum of two months. Stop loss will be
Weightage (%) 7
5-10% and profit potential will be 10-20%. We will report the old series’
performance data separately. For more details please write to us at
alphapicks@sharekhan.com Stop Loss (%) Maximum 10, minimum 5
For traders Profit Potential (%) Maximum 20, minimum 10
SHAREKHAN PRE-MARKET ACTION Time Frame Maximum 2 months
These ideas are put out in Sharekhan Pre-market Action report along 5% trailing Stop loss on 5% rise
Trail Stop loss
with stop loss and targets valid for a day. There is a market watch list in stock price
of stocks with positive and negative bias for intra-day traders. For more A) Pre defined / Trail stop loss
Exit Rules
details please write to us at premarket@sharekhan.com. is hit
B) Unexpected event/news/
MID DERIVATIVE CALLS outcome
These calls are based on the analysis of open interest, implied volatility
C) Time frame
and put-call ratio in the derivative market. It is a leveraged product and
ideal for aggressive traders. These calls have pre-defined stop loss, Performance
Daily
targets, time frame and quantity to execute. For details of the product Reporting
please write to us at derivative@sharekhan.com.
Report Card
MID performance* Derivative Calls
Product Alpha Delivery Series II * Ticket size (Rs) 100,000
Month January 2018 CY2018 Apr-Dec 2017
Month Jan 2018 CY2018 Apr-Dec 2017
No. of calls 2 2 81*
No. of calls 96 96 499
Open 2 2 6
Profit booked 54 54 273
Profit booked 4 4 39
Stop loss hit 2 2 36 Stop loss hit 42 42 226
Strike rate (%) 67 67 52 Strike rate (%) 56 56 55
* we had 8 open calls in April (not considered)

MUTUAL FUNDS DESK MF PICKS
Sharekhan top mutual fund picks (equity) January 11, 2018

Data as on January 01, 2018
Scheme name NAV (Rs) Returns (%)
Absolute 6 Compound annualised
months 1 yr 3 yrs 5 yrs Since inception
Large Cap Funds
IDFC Classic Equity Fund - Reg - Growth 46 12.4 36.5 15.7 15.2 13.2
ICICI Prudential Focused Bluechip Equity Fund - Growth 41 13.6 31.8 12.3 17.0 15.7
Aditya Birla Sun Life Top 100 Fund - Growth 59 10.4 29.9 11.4 17.4 15.6
Franklin India Bluechip - Growth 461 9.5 25.4 10.8 14.1 21.6
BNP Paribas Equity Fund - Growth 86 8.2 36.0 10.4 16.7 17.6
Indices
S&P BSE Sensex 33813 9.3 26.84 7.11 11.54 16.04
Mid & Small Cap Funds
Reliance Small Cap Fund - Growth 48 28.8 62.7 25.2 34.1 23.9
Kotak Emerging Equity Scheme - Reg - Growth 42 15.7 42.3 19.4 24.7 14.3
BNP Paribas Mid Cap Fund - Growth 38 17.7 48.4 18.8 25.0 12.1
Aditya Birla Sun Life Mid Cap Fund - Growth 339 16.8 44.1 18.8 23.1 26.0
HDFC Mid-Cap Opportunities Fund - Growth 60 16.3 41.4 18.4 26.2 18.6
Indices
BSE MID CAP 17,836 22 48 20 20 22
Multi Cap Funds
DSP BlackRock Opportunities Fund - Reg - Growth 230 17.2 39.0 17.8 20.2 19.5
SBI Magnum Multi Cap Fund - Growth 49 14.9 36.3 16.4 20.9 13.8
Aditya Birla Sun Life Equity Fund - Growth 728 11.1 32.4 16.2 21.2 24.8
BNP Paribas Dividend Yield Fund - Growth 50 15.7 41.9 15.4 19.4 14.0
Kotak Select Focus Fund - Reg - Growth 33 10.4 33.4 14.6 20.1 15.6
Indices
BSE 500 14,936 13 35 12 14 15
ELSS
IDFC Tax Advantage (ELSS) Fund - Reg - Growth 59 19.4 52.7 18.0 21.6 21.8
Aditya Birla Sun Life Tax Relief 96 - Growth 32 17.8 42.2 17.2 21.9 12.6
DSP BlackRock Tax Saver Fund - Growth 48 15.1 35.4 16.2 20.4 15.5
Reliance Tax Saver (ELSS) Fund - Growth 69 18.9 45.2 13.6 22.6 17.0
Franklin India Taxshield - Growth 562 10.4 28.2 11.7 18.3 24.0
Indices
Nifty 500 9434.5 13.2 34.9 11.6 14.5 10.1
Thematic Funds
DSP BlackRock Natural Resources & New Energy Fund - Reg - Gth 37 23.9 43.4 26.3 22.8 14.5
L&T Infrastructure Fund - Reg - Growth 19 24.8 60.4 22.8 23.2 6.4
ICICI Prudential Banking and Financial Services Fund - Retail - Growth 61 7.4 43.9 17.2 21.3 21.2
Aditya Birla Sun Life Special Situations Fund - Growth 26 16.1 36.4 16.3 20.9 10.2
Franklin Build India Fund - Growth 44 17.6 42.2 16.2 26.4 19.4
Indices
Nifty 50 10,436 9.6 27.3 8.0 11.9 14.1
Balanced Funds
Reliance RSF - Balanced - Growth 55 9.7 28.7 13.3 16.5 14.6
ICICI Prudential Balanced - Growth 130 10.4 24.3 12.9 18.3 15.2
HDFC Balanced Fund - Growth 151 9.5 26.9 12.8 18.6 17.0
Aditya Birla Sun Life Balanced 95 - Growth 770 9.3 25.3 12.0 17.1 20.9
SBI Magnum Balanced Fund - Growth 128 12.4 27.0 12.0 17.7 16.4
Indices
Crisil Balanced Fund Index -- 6.6 19.1 8.5 11.0 12.6
BNP Paribas Mutual Fund Equity schemes
Scheme name NAV (Rs) Returns (%)
Absolute 6 Compound annualised
months 1 yr 3 yrs 5 yrs Since inception
BNP Paribas Mid Cap Fund - Growth 38 17.7 48.4 18.8 25.0 12.1
BNP Paribas Dividend Yield Fund - Growth 50 15.7 41.9 15.4 19.4 14.0
BNP Paribas Long Term Equity Fund - Growth 40 13.4 41.9 12.3 18.6 12.2
BNP Paribas Equity Fund - Growth 86 8.2 36.0 10.4 16.7 17.6
Every individual has a different investment requirement, which depends on his financial goals and risk-taking capacities. We at Sharekhan first understand the
individual’s investment objectives and risk-taking capacity, and then recommend a suitable portfolio. So, we suggest that you get in touch with our Mutual Fund
Advisor before investing in the best funds.n
Sharekhan Limited, its analyst or dependant(s) of the analyst might be holding or having a postition in the mutual funds mentioned in the article.

MF PICKS MUTUAL FUNDS DESK
Sharekhan top sip fund picks January 11, 2018

Data as on January 01, 2018
Investment period 1 year 3 years 5 years
Total amount invested (Rs) 12,000 36,000 60,000
Present Avg annual Present Avg annual Present Avg annual
Funds would have grown to (Rs) NAV value (Rs) return (%) value (Rs) return (%) value (Rs) return (%)
Large-Cap Funds
IDFC Classic Equity Fund - Reg - Growth 46 13,339 12.3 48,094 10.4 94,735 9.7
ICICI Prudential Focused Bluechip Equity Fund - Growth 41 13,317 12.1 46,387 9.1 92,575 9.2
Aditya Birla Sun Life Top 100 Fund - Growth 59 13,018 9.3 45,288 8.2 92,857 9.3
BNP Paribas Equity Fund - Growth 86 13,092 10.0 43,836 7.0 89,290 8.4
Franklin India Bluechip - Growth 461 12,906 8.3 43,741 6.9 86,726 7.8
BSE Sensex 33813 13,004 9.2 43,138 6.4 80,163 6.1
Mid & Small Cap Funds
Reliance Small Cap Fund - Growth 48 15,007 27.7 58,639 18.2 1,50,817 20.6
HDFC Mid-Cap Opportunities Fund - Growth 60 13,745 16.0 50,897 12.6 1,18,047 14.8
Kotak Emerging Equity Scheme - Reg - Growth 42 13,702 15.6 50,776 12.5 1,22,081 15.5
Aditya Birla Sun Life Mid Cap Fund - Growth 339 13,731 15.9 50,213 12.1 1,14,512 14.0
BNP Paribas Mid Cap Fund - Growth 38 13,932 17.7 49,909 11.9 1,14,330 14.0
BSE Midcap 17836 14,126 19.5 51,986 13.4 1,12,287 13.6
Multi-Cap Funds
DSP BlackRock Opportunities Fund - Reg - Growth 230 13,572 14.4 49,671 11.7 1,04,558 12.0
Aditya Birla Sun Life Advantage Fund - Growth 448 13,397 12.8 48,781 11.0 1,08,231 12.7
SBI Magnum Multi Cap Fund - Growth 49 13,477 13.5 47,984 10.4 1,04,177 11.9
Franklin India High Growth Companies Fund - Growth 41 13,550 14.2 47,301 9.8 1,05,917 12.3
Kotak Select Focus Fund - Reg - Growth 33 13,056 9.7 47,019 9.6 1,00,967 11.2
BSE 500 14936 13,354 12.4 46,236 9.0 90,008 8.6
Tax-saving funds (ELSS)
IDFC Tax Advantage (ELSS) Fund - Reg - Growth 59 14,115 19.4 50,589 12.4 1,06,685 12.4
Reliance Tax Saver (ELSS) Fund - Growth 69 13,982 18.2 49,806 11.8 1,10,700 13.3
Aditya Birla Sun Life Tax Relief 96 - Growth 32 13,979 18.2 49,171 11.3 1,07,264 12.5
DSP BlackRock Tax Saver Fund - Growth 48 13,367 12.5 48,325 10.6 1,02,936 11.6
Franklin India Taxshield - Growth 562 13,095 10.0 44,447 7.5 94,139 9.6
Nifty 50 10436 12,953 8.7 43,435 6.7 81,621 6.5
BNP Paribas Mutual Fund Equity schemes

Compounded Compounded Compounded
Present value Present value Present value
Funds would have grown to (Rs) Category annualised annualised annualised
(Rs) (Rs) (Rs)
return (%) return (%) return (%)
BNP Paribas Mid Cap Fund - Growth Mid Cap 13,932 17.7 49,909 11.9 1,14,330 14.0
BNP Paribas Dividend Yield Fund - Growth Multi Cap 13,583 14.5 48,003 10.4 1,00,525 11.1
BNP Paribas Long Term Equity Fund - Growth ELSS 13,553 14.2 45,634 8.5 95,364 9.9
BNP Paribas Equity Fund - Growth Large Cap 13,092 10.0 43,836 7.0 89,290 8.4
Every individual has a different investment requirement, which depends on his financial goals and risk-taking capacities. We at
Sharekhan first understand the individual’s investment objectives and risk-taking capacity, and then recommend a suitable portfolio.
So, we suggest that you get in touch with our Mutual Fund Advisor before investing in the best funds.n
Sharekhan Limited, its analyst or dependant(s) of the analyst might be holding or having a postition in the mutual funds mentioned in the article.

EQUITY FUNDAMENTALS EARNINGS GUIDE
Sharekhan Earnings Guide Prices as on February 01, 2018

Sales Net profit EPS (%) EPS PE (x) RoCE (%) RoNW (%)
CMP DPS Div
Company growth
(Rs) FY17 FY18E FY19E FY17 FY18E FY19E FY17 FY18E FY19E FY19/FY17 FY17 FY18E FY19E FY18E FY19E FY18E FY19E Rs. Yld(%)
Automobiles
Apollo Tyres 262 13,180.0 14,662.4 16,804.5 1,099.3 917.7 1,046.5 21.6 16.0 18.3 -8% 12.1 16.4 14.3 9.4 10.0 9.6 10.0 3.0 1.1
Ashok Leyland 123 20,015.4 25,779.5 29,200.8 1,558.5 1,511.9 1,972.1 5.3 5.2 6.8 13% 23.3 23.7 18.1 21.6 24.8 21.2 23.3 1.6 1.3
Bajaj Auto 3,413 21,766.7 25,268.4 29,218.0 3,827.6 4,061.2 4,710.2 132.3 140.4 162.9 11% 25.8 24.3 21.0 29.0 30.6 21.4 22.2 55.0 1.6
Gabriel India 172 1,529.1 1,820.2 2,089.9 83.2 98.1 120.8 5.8 6.8 8.4 20% 29.7 25.3 20.5 25.9 27.4 18.9 20.0 1.3 0.8
Hero Motocorp 3,733 28,475.0 31,669.0 36,167.2 3,377.1 3,630.5 4,025.2 169.1 181.8 201.6 9% 22.1 20.5 18.5 43.7 42.2 31.2 30.3 85.0 2.3
M&M 799 41,895.4 46,243.8 50,496.8 3,580.7 4,021.2 4,493.2 28.8 32.3 36.1 12% 27.7 24.7 22.1 17.4 18.4 13.8 14.5 13.0 1.6
Maruti Suzuki 9,402 68,035.0 79,484.0 91,858.0 7,338.0 8,163.0 10,597.0 242.9 270.2 350.8 20% 38.7 34.8 26.8 26.4 28.5 19.7 21.0 75.0 0.8
Rico Auto Industries 88 1,079.2 1,191.9 1,407.9 49.5 60.9 85.5 3.7 4.5 6.3 31% 24.0 19.5 14.0 12.3 15.1 10.8 13.5 0.8 0.9
TVS Motor 671 12,135.3 14,611.1 17,471.3 615.1 683.5 1,054.7 12.9 14.4 22.2 31% 51.8 46.6 30.2 25.2 34.4 24.3 30.1 2.5 0.4
Banks & Financials
Axis Bank 593 29,784.4 29,971.3 34,224.2 3,679.3 3,430.2 5,192.9 15.4 13.4 20.3 15% 38.6 44.3 29.3 - - 5.6 7.5 5.0 0.8
Bajaj Finance 1,729 5,468.6 7,429.2 10,241.6 1,836.4 2,571.8 3,569.5 33.6 44.6 61.9 36% 51.5 38.8 27.9 - - 23.5 25.7 3.6 0.2
Bajaj Finserv 5,038 - - - - - - - - - - - - - - - 0.0 0.0 1.8 0.0
Bank of Baroda 152 20,271.5 19,929.3 23,692.8 1,383.1 1,479.0 3,354.1 6.0 6.4 14.5 56% 25.4 23.8 10.5 - - 3.6 7.8 1.2 0.8
Bank of India 154 18,598.4 18,012.2 19,337.1 (1,558.3) 621.6 1,616.0 -14.8 5.8 15.1 - - 26.5 10.2 - - 1.9 4.8 0.0 0.0
Capital First 726 1,228.2 1,807.4 2,582.9 239.0 338.0 481.2 24.5 34.7 49.4 42% 29.6 20.9 14.7 - - 13.8 17.1 2.6 0.4
Federal Bank 98 4,134.4 4,774.9 5,633.0 830.8 965.5 1,340.7 4.3 5.0 6.9 27% 22.7 19.5 14.1 - - 8.2 10.5 0.8 0.8
HDFC 1,968 9,509.6 10,935.6 12,807.1 7,442.6 10,874.4 9,854.1 46.8 65.1 59.0 12% 42.0 30.2 33.3 - - 18.1 14.8 15.0 0.8
HDFC Bank 1,991 45,435.7 54,144.5 65,445.4 14,549.6 17,676.4 21,533.4 56.8 65.8 80.2 19% 35.1 30.3 24.8 - - 16.6 16.4 11.0 0.6
ICICI Bank 346 41,241.8 39,442.8 46,318.0 9,801.1 7,242.1 11,537.1 16.8 11.3 19.8 8% 20.6 30.7 17.5 - - 7.2 11.0 0.0 0.0
LIC Hsg. Fin. 532 3,694.0 3,648.2 4,202.0 1,931.1 1,922.2 2,278.8 38.2 38.1 45.1 9% 13.9 14.0 11.8 - - 16.2 16.8 6.2 1.2
Max Financial 541 - - - - - - - - - - - - - - - - - - 0.0
PTC India Fin. Ser. 35 483.4 540.0 661.1 345.3 354.3 444.8 5.4 5.5 6.9 13% 6.5 6.3 5.0 - - 14.0 15.8 1.5 4.3
PNB 168 23,944.5 25,477.7 28,989.8 1,324.8 1,714.5 3,248.5 6.2 8.1 15.3 57% 26.9 20.8 11.0 - - 3.8 6.9 1.0 0.6
SBI 306 97,320.7 1,08,920.7 1,24,937.1 10,484.1 14,102.8 17,871.7 13.1 17.7 22.4 31% 23.3 17.3 13.7 - - 7.3 8.7 2.6 0.9
Union Bank of India 132 13,868.0 14,044.3 16,244.4 555.2 (3,039.3) 838.3 8.1 -35.5 9.8 10% 16.4 - 13.5 - - - 3.5 0.0 0.0
Yes Bank 360 9,954.1 12,824.1 16,815.8 3,330.1 4,103.8 5,571.2 78.9 18.0 24.4 -44% 4.6 20.0 14.7 - - 17.4 20.4 2.0 0.6
Consumer Goods
Britannia 4,741 9,324.1 10,212.9 11,659.2 884.5 1,009.4 1,243.3 73.7 84.1 103.6 19% 64.3 56.4 45.8 52.0 47.1 33.8 33.7 22.0 0.5
Emami 1,142 2,532.6 2,678.3 3,213.0 549.8 601.9 770.8 24.2 26.5 34.0 19% 47.2 43.1 33.6 34.4 43.2 32.5 36.4 7.0 0.6
GSK Consumer 6,717 4,421.1 4,497.1 5,166.9 656.7 697.5 798.5 156.1 165.8 189.9 10% 43.0 40.5 35.4 32.0 32.7 21.1 21.6 70.0 1.0
GCPL 1,053 9,608.8 10,231.3 12,092.3 1,307.1 1,444.1 1,815.8 19.1 21.2 26.6 18% 55.1 49.7 39.6 17.5 21.3 24.5 25.0 15.0 1.4
Hindustan Unilever 1,371 34,487.0 36,938.1 41,967.8 4,249.0 5,044.8 6,111.8 19.7 23.3 28.2 20% 69.6 58.9 48.6 100.7 102.7 73.5 75.1 17.0 1.2
ITC 275 55,448.5 64,192.8 73,684.1 10,200.9 11,512.1 13,586.4 8.4 9.5 11.2 15% 32.8 29.0 24.6 32.5 35.5 24.8 27.5 4.8 1.7
Jyothy Laboratories 365 1,749.1 1,865.4 2,206.9 204.1 240.6 244.5 11.3 13.2 13.5 9% 32.3 27.7 27.0 17.3 22.1 20.5 18.2 6.0 1.6
Marico 311 5,935.9 6,449.9 7,515.6 811.0 868.3 1,091.0 6.3 6.7 8.5 16% 49.3 46.4 36.6 44.7 49.7 35.1 37.8 3.5 1.1
Zydus Wellness 1,008 462.6 493.2 577.0 111.3 118.6 144.0 28.5 30.4 36.8 14% 35.4 33.1 27.4 20.8 22.0 19.2 19.8 6.5 0.6
IT / IT services
FSL 41 3,555.6 3,528.3 3,800.2 280.0 294.7 347.9 4.2 4.4 5.2 11% 9.8 9.4 7.9 11.8 12.9 13.3 13.7 0.0 0.0
HCL Technologies 985 46,722.0 50,316.1 54,789.9 8,456.0 8,669.6 9,193.0 60.7 62.3 66.0 4% 16.2 15.8 14.9 29.1 27.4 24.6 23.1 24.0 2.4
Infosys 1,145 68,484.0 70,203.4 75,554.7 14,357.0 15,905.5 15,349.3 62.8 64.2 70.7 6% 18.2 17.8 16.2 30.7 32.7 24.2 23.9 25.8 2.2
Persistent Systems 784 2,878.4 3,084.4 3,450.9 312.9 341.3 373.0 39.1 42.7 46.6 9% 20.1 18.4 16.8 22.1 21.6 16.9 16.4 9.0 1.1
TCS 3,139 1,17,966.0 1,22,218.9 1,33,257.1 26,289.0 25,622.9 28,365.1 137.3 133.9 148.2 4% 22.9 23.4 21.2 35.5 36.2 27.7 28.2 47.0 1.5
Wipro 301 55,040.2 54,764.5 58,574.1 8,489.5 8,463.2 9,135.5 17.5 18.1 20.2 7% 17.2 16.6 14.9 11.5 11.3 14.2 13.5 3.0 1.0
Cap goods / Power
CESC 1,045 7,410.0 8,211.0 8,799.0 862.0 935.0 1,018.0 64.7 70.2 76.4 9% 16.2 14.9 13.7 5.6 5.8 6.9 7.3 10.0 1.0
CG Power & Ind. Solutions 91 6,119.8 6,073.7 6,890.9 182.7 173.1 266.3 2.9 2.8 4.2 21% 31.4 33.1 21.5 8.0 9.8 4.1 6.0 0.0 0.0
Finolex Cables 724 2,444.9 2,919.7 3,129.2 316.0 353.6 378.8 20.7 23.1 24.8 9% 35.0 31.3 29.2 23.8 22.2 29.5 27.9 3.0 0.4
Greaves Cotton 139 1,634.3 1,726.4 1,815.3 174.7 167.2 175.6 7.2 6.8 7.2 0% 19.3 20.4 19.3 25.1 25.5 17.4 17.7 5.5 4.0
Kalpataru Power 462 4,894.1 5,647.0 6,862.0 269.1 332.0 409.0 17.5 21.6 26.7 24% 26.4 21.4 17.3 18.5 20.2 12.7 14.0 2.0 0.4
KEC International 350 8,584.4 9,662.3 10,980.4 305.0 459.1 574.7 11.9 17.9 22.4 37% 29.4 19.6 15.7 22.4 24.3 25.3 25.3 1.6 0.5
PTC India 104 14,074.8 17,401.3 20,948.9 286.1 333.0 380.9 9.7 11.2 12.9 15% 10.7 9.2 8.1 16.3 17.3 10.1 10.7 3.0 2.9

EARNINGS GUIDE EQUITY FUNDAMENTALS
Sales Net profit EPS (%) EPS PE (x) RoCE (%) RoNW (%)
CMP DPS Div
Company growth
(Rs) FY17 FY18E FY19E FY17 FY18E FY19E FY17 FY18E FY19E FY19/FY17 FY17 FY18E FY19E FY18E FY19E FY18E FY19E Rs. Yld(%)
Skipper 237 1,703.0 2,100.8 2,498.7 98.0 115.3 148.0 9.6 11.3 14.5 23% 24.7 21.0 16.4 22.9 24.2 21.3 22.9 1.6 0.7
Thermax 1,284 3,763.7 3,931.8 4,448.5 278.0 293.6 332.1 23.3 24.6 27.9 9% 55.1 52.1 46.1 17.0 18.1 11.7 12.2 6.0 0.5
Triveni Turbine 130 745.0 778.7 893.2 124.0 118.0 139.1 3.8 3.6 4.2 5% 34.1 36.2 30.7 38.8 40.6 27.3 28.5 1.2 0.9
V-Guard Industries 229 2,150.6 2,414.7 2,908.0 151.8 182.0 238.0 3.6 4.3 5.6 25% 64.1 53.3 41.0 34.7 37.0 25.8 27.4 0.7 0.3
Va Tech Wabag 590 3,207.9 3,702.0 4,164.5 102.4 162.5 189.4 18.8 29.8 34.7 36% 31.4 19.8 17.0 23.6 23.3 14.9 15.0 4.0 0.7
Infra / Real Estate
Gayatri Projects 213 2,115.4 2,720.7 3,305.6 89.8 99.0 154.3 5.1 5.6 8.7 31% 42.1 38.2 24.5 12.8 14.4 10.4 14.5 0.5 0.2
IRB Infra 243 5,845.9 5,667.8 6,112.3 715.5 1,123.1 1,212.5 20.4 32.0 34.5 30% 11.9 7.6 7.0 15.4 16.6 19.5 18.0 5.0 2.1
Jaiprakash Asso 20 6,219.3 - - (4,841.9) - - -19.9 - - - - - - - - - - 0.0 0.0
Larsen & Toubro 1,456 1,10,011.0 1,24,457.2 1,39,423.0 5,920.0 7,138.8 9,049.2 42.3 51.0 64.7 24% 34.4 28.5 22.5 11.6 12.9 13.7 15.8 14.0 1.0
NBCC 229 6,279.0 8,510.0 16,243.0 351.1 445.5 837.1 3.9 4.9 9.3 54% 58.7 46.2 24.6 40.2 62.8 25.4 40.0 1.1 0.5
Sadbhav Eng. 410 3,320.3 3,805.8 4,261.7 187.8 233.9 241.2 10.9 13.6 14.1 13% 37.4 30.1 29.1 12.0 10.8 13.2 12.1 0.7 0.2
Oil & gas
Oil India 358 9,510.0 11,006.0 11,692.0 2,210.0 2,643.0 2,678.0 29.2 34.9 35.4 10% 12.3 10.3 10.1 10.7 10.6 8.9 8.7 16.4 4.6
Petronet LNG 252 24,616.0 29,771.0 33,636.0 1,706.0 2,118.0 2,259.0 11.4 14.1 15.1 15% 22.1 17.9 16.7 26.9 26.0 24.1 22.1 2.5 1.0
Reliance 944 3,05,382.0 3,52,338.0 3,84,401.0 29,833.0 35,920.0 39,878.0 50.4 60.7 67.4 16% 18.7 15.5 14.0 10.2 10.7 11.8 11.7 5.5 0.6
Selan Exp 223 55.8 65.3 73.2 8.7 17.0 19.8 5.3 10.3 12.1 51% 42.3 21.7 18.4 7.4 8.3 6.0 6.8 5.0 2.2
Pharmaceuticals
Aurobindo Pharma 611 15,089.9 18,030.2 21,516.5 2,289.6 2,718.2 3,533.4 39.1 46.4 60.3 24% 15.6 13.2 10.1 28.7 31.2 25.5 25.8 2.5 0.4
Cadila Healthcare 418 9,429.2 11,332.1 13,518.6 1,487.3 1,517.8 2,111.1 14.5 14.8 20.6 19% 28.8 28.2 20.3 14.8 20.6 18.8 21.8 3.2 0.8
Cipla 587 14,630.2 16,727.6 19,451.7 1,006.4 1,849.9 2,579.2 16.3 23.0 32.1 40% 36.0 25.5 18.3 13.2 16.5 13.5 16.1 2.0 0.3
Divi's Labs 1,044 4,106.3 3,853.2 4,515.9 1,060.4 900.2 1,192.9 39.9 33.9 44.9 6% 26.1 30.8 23.2 23.7 26.0 18.1 20.9 10.0 1.0
Glenmark Pharma 588 9,185.7 9,501.5 10,607.7 1,274.7 1,104.1 1,371.0 45.2 39.1 48.6 4% 13.0 15.0 12.1 17.7 19.2 20.0 20.1 2.0 0.3
Lupin 860 17,494.3 16,060.8 16,945.9 2,713.4 1,508.0 1,623.4 60.1 33.4 35.9 -23% 14.3 25.8 23.9 9.7 9.8 9.7 9.5 7.5 0.9
Sun Pharma 554 31,578.4 28,350.8 31,092.0 6,964.4 3,517.0 4,888.7 29.0 14.7 20.4 -16% 19.1 37.8 27.2 10.5 13.0 8.9 11.3 3.5 0.6
Torrent Pharma 1,355 5,713.0 6,265.9 8,460.0 934.0 908.5 1,097.5 55.2 53.7 64.8 8% 24.6 25.2 20.9 17.8 17.9 17.6 16.9 14.0 1.0
Building Materials
Grasim 1,189 10,345.7 16,098.2 18,731.7 1,560.0 1,992.4 2,297.3 23.7 30.3 35.0 21% 50.1 39.2 34.0 2.8 2.2 6.0 4.6 22.5 1.9
Shree Cement 17,453 8,429.2 9,839.8 11,909.3 1,339.7 1,316.8 1,674.8 384.5 378.0 480.7 12% 45.4 46.2 36.3 14.7 16.2 15.9 17.4 116.0 0.7
The Ramco Cements 759 3,949.5 4,297.6 4,782.0 649.3 568.2 677.8 27.3 24.1 28.8 3% 27.8 31.5 26.4 10.5 11.7 14.6 15.6 3.0 0.4
UltraTech Cement 4,391 23,891.0 29,498.0 35,643.6 2,641.0 2,299.8 2,977.0 96.4 83.9 108.7 6% 45.6 52.3 40.4 8.3 8.6 9.2 10.9 9.5 0.2
Discretionary
Arvind 406 9,235.5 10,603.1 12,419.9 332.7 317.1 617.9 12.9 12.3 23.9 36% 31.5 33.0 17.0 6.8 10.7 8.6 15.1 2.4 0.6
Century Ply (I) 323 1,818.7 2,068.9 2,509.2 178.4 170.0 254.7 8.0 7.6 11.4 20% 40.3 42.3 28.2 15.0 18.5 22.0 26.5 1.0 0.3
Cox and Kings 244 2,179.4 2,385.6 2,863.0 327.8 437.7 524.8 19.4 25.8 31.0 26% 12.6 9.4 7.9 13.9 16.7 19.9 21.7 1.0 0.4
Info Edge (India) 1,327 802.1 910.9 1,084.9 208.4 280.5 329.5 17.2 23.2 27.3 26% 77.1 57.2 48.6 17.3 18.3 12.6 13.2 4.5 0.3
Inox Leisure 284 1,220.7 1,385.7 1,614.7 30.6 77.2 100.9 3.3 8.4 11.0 83% 85.9 33.8 25.8 14.4 16.2 12.3 13.8 0.0 0.0
KKCL 1,710 492.4 472.9 531.9 85.3 80.9 93.6 69.2 65.6 76.0 5% 24.7 26.1 22.5 19.8 20.7 21.5 22.5 19.0 1.1
Orbit Exports 156 130.5 146.2 175.4 20.1 22.7 29.6 7.1 8.1 10.6 22% 22.0 19.3 14.7 22.6 25.3 16.5 18.7 2.6 1.7
Relaxo Footwears 633 1,739.8 2,022.1 2,364.9 123.0 153.8 191.5 10.2 12.8 16.0 25% 62.0 49.4 39.6 26.0 23.4 17.2 14.7 1.0 0.2
Thomas Cook India 234 8,588.0 10,876.9 13,384.3 77.5 163.5 267.3 2.1 4.5 7.3 86% 111.6 52.1 32.1 15.3 24.9 10.2 14.9 0.4 0.2
Wonderla Holidays 382 270.4 305.2 375.3 33.7 46.7 62.5 6.0 8.3 11.1 36% 63.7 46.1 34.4 15.8 18.3 10.7 13.6 1.0 0.3
ZEEL 595 6,434.2 6,778.7 7,973.0 1,218.7 1,332.3 1,693.5 12.7 13.9 17.6 18% 46.8 42.8 33.8 22.5 25.2 17.4 19.0 2.5 0.4
Diversified / Miscellaneous
Bajaj Holdings 2,802 842.0 - - 2,473.2 - - 222.2 - - - 12.6 - - - - - - 32.5 1.2
Bharat Electronics 162 8,654.0 10,954.9 12,586.3 1,497.0 1,669.1 1,908.5 6.1 6.8 7.8 13% 26.5 23.8 20.7 20.6 21.5 15.0 15.7 2.3 1.4
Bharti Airtel 438 95,468.3 84,938.3 96,112.6 4,969.5 1,385.5 3,814.7 12.4 3.5 9.5 -12% 35.4 125.3 46.1 7.4 9.6 2.4 5.5 1.4 0.3
Gateway Distriparks 227 393.4 422.0 471.9 74.1 84.7 99.4 6.8 7.8 9.1 16% 33.3 29.2 24.8 8.3 9.8 8.4 10.2 7.0 3.1
PI Industries 914 2,276.8 2,351.3 2,695.4 459.4 376.0 476.7 33.4 27.3 34.6 2% 27.4 33.5 26.4 20.1 21.6 21.2 22.5 4.0 0.4
Ratnamani Metals 1,021 1,476.2 1,737.3 2,173.0 144.5 178.4 227.3 31.1 38.4 49.0 25% 32.8 26.6 20.8 19.7 22.1 14.5 16.3 5.5 0.5
Supreme Industries 1,363 4,462.3 4,983.8 5,747.9 376.7 367.7 466.0 29.7 29.0 36.7 11% 45.9 47.0 37.1 23.2 27.5 19.0 20.8 15.0 1.1
UPL 759 16,312.0 17,701.8 19,820.9 1,806.1 1,890.8 2,346.5 35.8 37.4 46.5 14% 21.2 20.3 16.3 16.6 17.7 23.3 24.0 7.0 0.9
Note:
Crompton Greaves is in the process of selling its overseas power system business by Q4FY2016. Hence, we have not estimated the FY2017 numbers
Aurobindo Pharma post 1:1 bonus Divis Labs post 1:1 bonus
Cadila Healthcare post stock split from Rs 5 to Rs 1 Godrej Consumer Products post 1:1 bonus
M&M post 1:1 bonus Grasim- Changed reporting to standalone financial numbers

Remarks
Automobiles
Apollo Tyres  Apollo Tyres Limited (ATL) is the market leader in the truck and bus tyre segments with a 28% market share in India.
Domestic operations of the company contribute about 65% to the topline and are poised to grow in double digits, led by
strong demand in the commercial vehicle (CV) segment. The MHCV segment, forming about 65% of domestic demand,
has seen strong growth led by pickup in the OEM and aftermarket space. Better economic growth translating into
increased freight demand coupled with higher demand from the infrastructure segment is driving strong double-digit
volume growth for the MHCV industry. Further, with imposition of anti-dumping duty on Chinese radial truck tyre imports
and increased customs duty on radial tyre imports from 10% to 15%, domestic tyre players such as ATL have benefited.
We expect ATL to deliver a robust 19% PAT CAGR over the next two years. Further, the recent correction in stock prices
gives a better price point to enter the stock. We upgrade our recommendation on the stock from Hold to Buy, with an
unchanged PT of Rs. 292.
Ashok Leyland  Ashok Leyland Limited (ALL), the second largest CV manufacturer in India, is a pure play on CV. The CV industry is poised
for healthy growth in FY2018. The MHCV industry bounced back sharply, reporting growth of 20% and 42% in Q2FY2018
and Q3FY2018, respectively. Improved economic growth, higher government spending on road construction, increased
mining activities and higher run-time of trucks post introduction of the unified GST regime have led to robust demand for
the MHCV industry. With a favourable macroeconomic environment and robust economic growth, we expect the MHCV
industry to maintain double-digit growth in FY2019. ALL has put significant efforts towards building the LCV portfolio
post the exit of MNC partner. ALL has introduced Mitr in LCV in the six-tonne segment and is targeting to capture new
export markets to tap the growth opportunity. Higher proportion of the relatively stable defence and LCV business will
reduce the dependence of ALL on the highly cyclical MHCV business. We maintain our Buy rating on the stock with an
unchanged price target of Rs. 157.
Bajaj Auto  Bajaj Auto Limited (BAL) is a leading motorcycle and three-wheeler (3W) manufacturer with a significant presence in
export markets. In the domestic market, it is a leader in the premium motorcycle segment. After two consecutive years of
volume decline, Bajaj Auto has recently seen recovery in export volumes.. With the recent surge in crude prices (crude
prices have surged 50% in the past seven months), demand in key markets, including Africa is gaining traction. Nigeria,
which is one of the significant markets for BAL, has staged a marked revival. Moreover, other Asian countries such as
Philippines and ASEAN markets are gaining traction. Export volumes are expected to grow by 13% in FY2019. We expect
BAL to report 12% volume growth for FY2019. We have maintained our earnings estimates for FY2019. We retain our Buy
rating on the stock, with an unchanged PT of Rs. 3,625.
Gabriel India  Gabriel India Limited (GIL) is one of India’s leading manufacturers of shock absorbers and front forks with a diversified
customer base. Overall demand situation for the passenger segment (2W and passenger cars) has improved significantly,
as key concerns around GST rollout have been addressed. The transitory impact of new emission norms (for 2W) has
also been put behind. OEM is the key segment for GIL, forming about 85% of overall revenue. The company has
secured increased share of business with its clients in the 2W OEM segment. Given the strong outlook for automotive
OEM production and success of GIL in enhancing share of business with OEM, we expect topline growth to continue
with a 17% topline CAGR in the next two years. A robust topline growth of GIL is likely to provide benefits of operating
leverage, resulting in margin improvement. Moreover, focus on cost-control initiatives and productivity improvement will
further aid margin expansion. We have factored margin expansion of 30 bps and 40 bps, respectively, for FY2018E and
FY2019E. We upgrade our recommendation on the stock from Hold to Buy with a PT of Rs. 222.
Hero MotoCorp  Hero MotoCorp Limited (HMCL) is the largest 2W manufacturer in the world. The company reported sales of over 6.6
million vehicles in FY2017 and a domestic market share of 39%. Driven by positive rural sentiments on account of Good
progressing Rabi season and higher MSPs would augment farm incomes, leading to sustained higher demand. Further,
increased sops in the recent Union Budget for the rural segment would maintain the positive demand momentum for the
industry. Management expects the 2W industry to grow in double digits for FY2019. Hero is expected to grow broadly
inline with the industry. Further, OPM is expected to sustain at current levels of 15-16%. We maintain our Buy rating on
the stock with an unchanged PT of Rs. 4,200.
M&M  M&M is a leading manufacturer of tractors and utility vehicles (UV) in India. Tractor volumes of the company grew
impressively by 23% for FY2017. Farm incomes have also improved, given the second consecutive year of normal rainfall
and higher crop MSP. M&M has raised the volume forecast for the tractor industry from 10-12% to 12-14% for FY2018.
We expect tractor volume for FY2018 to grow by 15%. In addition, the auto segment’s volumes are expected to grow in
double digits over the next two years on account of three new launches. New launches and refreshes will enable the
company to regain market share in the UV space. Further, with GST rollout, the hub-and-spoke model will gain traction,
leading to strong demand for the LCV segment. We retain our Buy rating on the stock with a revised sum-of-the-parts
(SOTP) based PT of Rs. 788.
Maruti Suzuki  Maruti Suzuki India Limited (MSIL) is India’s largest passenger vehicle (PV) manufacturer. The company reported a strong
47% market share as of FY2017. The company has been able to gain market share over the past two years on account

of a diverse product portfolio, a large distribution network with increased focus on rural markets and a shift in consumer
preference to petrol models from diesel. On account of the strong successes of recent launches, MSIL has gained a
leadership position across the passenger vehicle segment, viz cars, utility vehicles and vans. Further, the company has
plans to reintroduce Swift in February 2018 on a new platform and has planned several refreshes across the product
range. MSIL is ramping its Gujarat capacity to meet the growing demand (production has doubled to about 20,000 per
month) and the company is planning to open the second line with capacity of 250,000/annum by Q3FY2019. MSIL is
ramping its Gujarat capacity to meet the growing demand (production has doubled to about 20,000 per month) and
the company is planning to open the second line with capacity of 250,000/annum by Q3FY2019. We expect MSIL
to continue outpacing industry growth and report a 12% volume CAGR over FY2018-FY2020. Further, the board of
MSIL has approved a revision in the method of royalty calculation, which would result in lower royalty on new models
beginning Ignis. MSIL is well poised to fortify its leadership position across the passenger vehicle segment. Maruti
Suzuki is amongst our top picks in the automotive space. We maintain Buy with a revised PT of Rs. 11,085.
Rico Auto  Rico Auto (Rico) is one of the largest producers of high-pressure non-ferrous die castings for the auto sector. The
company has secured project orders worth Rs. 1,900 crore. These orders are executable over a project life of about
5-6 years. The order book implies execution of orders worth Rs. 350 crore on an annual basis, thus strongly improving
topline visibility. Further, management is witnessing strong traction in the defence and aftermarket space. Given the
robust order book and new growth avenues, management expects topline to report over a 20% CAGR during FY2018-
FY2020. Rico would soon be introducing new products, which are part of the recent order wins. As per management,
the new products command better margins (in excess of 15%). Further, increased contribution from the high-margin
defence and aftermarket segments would aid in margin expansion. Management is aiming at 100-150 bps annual margin
expansion and aims to reach 15% margin level in the next 3-4 years as against 10.7% margin in FY2017. Further, given
the margin improvement on account of a better product mix, we expect Rico to report robust 39% earnings growth over
FY2018-FY2020. We maintain our Buy rating on the stock with a revised PT of Rs. 130.
TVS Motor  TVS Motor (TVSM) is the fourth largest 2W manufacturer in the country with a strong presence in the scooter segment.
Over the past couple of years, the scooter segment’s growth has surpassed that of the motorcycle segment’s. With
sustained demand for recent launches and planned new launches (it plans to launch a new motorcycle and scooter in
Q4FY2018), we expect TVSM to continue outpacing the industry’s growth. Apart from the domestic market, the recent
surge in crude prices (prices have increased by 50% in the past seven months) has improved the export outlook for the
company and it expects strong double-digit volume growth in the medium term. Secondly, cost-control initiatives in the
form of better vendor negotiation in the wake of strong volume growth and better pricing power owing to strong brands
would also help margin improvement. Further, the TVSM product mix is expected to improve, given increased share of
the high-margin, non-moped segment. TVSM would lead the earnings growth pack for the 2W industry, given market
share gains and scope for margin improvement. We expect TVSM to report a 43% earnings CAGR over FY2018-FY2020.
TVSM is our preferred pick in the 2W segment. We maintain Buy on the stock with a PT of Rs. 825.
Banks & Finance

Axis Bank  Axis Bank is the third-largest private sector bank, which continues to grow faster than the industry and has diversified
its book in favour of the retail segment (~40% of loans in the retail segment). The bank’s liability profile has improved
significantly, which would help sustain margins at healthy levels. We expect earnings growth to remain reasonably
strong, driven by healthy operating performance. Though asset quality pressures have emerged as pain points due to
exposure in the infrastructure and steel sectors, we expect the stress to persist in the near term.
Bajaj Finance  Bajaj Finance, owned by Bajaj Finserv, is a fast-growing, well-diversified leading NBFC in the country. The company has
assets spread across products, viz loans for consumer durables, 2Ws and 3Ws, loans to small and medium enterprises
(SME), mortgage loans and commercial loans. Apart from its strong loan growth, the asset quality and provisioning for
Bajaj Finance remain among the best in the system. Given the strong growth rate, high margins and return ratios, its
premium valuations within the NBFC space are justified.
Bajaj Finserv  Bajaj Finserv is a financial conglomerate present in the financing business (vehicle finance, consumer finance and
distribution) and is among the top players in the life insurance and general insurance segments. Consumer finance
(Bajaj Finance) and general insurance businesses of the company continue to report a robust performance, while the
life insurance business is showing signs of an uptick, after being affected by a change in regulations.
Bank of Baroda  Bank of Baroda is among the top public sector banks (PSBs) having a sizeable overseas presence (over 100 offices in 24
countries) and a strong network of over 5,000 branches across the country. The company has a stronghold in western
and eastern India. Performance metrics of the company remain better than that of other PSBs and asset quality has
deteriorated in-line with RBI’s directive to clean the balance sheet.
Bank of India  Bank of India has a network of over 4,800 branches, spread across the country and abroad, along with a diversified
product and services portfolio, and steadily growing assets. Operating performance and earnings have eroded
significantly due to margin deterioration and a sharp rise in NPAs. Given the rise in the number of incremental stressed
loans and weaker capital position, valuations of the company may remain subdued.

Capital First  Capital First (erstwhile Future Capital Holdings) had been acquired by global private equity firm, Warburg Pincus (with a
36% stake). The present management has taken several initiatives to tap the high-growth retail product segments, such
as gold loans, loan against property and loan against shares. The company has a strong capital adequacy ratio (CAR)
and sound asset quality. Loan book of the company is expected to sustain 25-30% growth over the next three years.
As a result of several initiatives taken in the recent past, the operating leverage will play out and may lead to significant
pick-up in profitability over the medium term.
Federal Bank  Federal Bank is among the better-performing old private sector banks in India with a strong presence in south India,
especially Kerala. Under the new management, the bank has taken several initiatives that will improve the quality of its
earnings and asset book. The asset quality has shown stress in the past few quarters. We, however, expect a gradual
improvement in NPAs and operating performance. Valuations seem attractive over the medium to long term.
HDFC  HDFC is among the top mortgage lenders in the country providing housing loans to individuals, corporates and
developers. The company has interests in banking, asset management and insurance through its key subsidiaries. As
these subsidiaries are growing faster than HDFC, the value contributed by them would be significantly higher going
forward. Due to a dominant market share and consistent return ratios, the company should continue to command a
premium over other NBFCs. Any unlocking of value from its insurance business will be positive for the stock.
HDFC Bank  HDFC Bank is among the top performing banks in the country having deep roots in the retail segments. Despite the
general slowdown in credit growth, the bank continues to report strong growth in advances from retail products.
Relatively high margins (compared with its peers), strong branch network and better asset quality make HDFC Bank a
safe bet with a scope for expansion in its valuations.
ICICI Bank  ICICI Bank is India’s largest private sector bank with a network of over 4,850 branches. The bank has made inroads
in to retail loans (~45% of the book) and has significantly improved its liability franchisee. Operating profit improved
significantly, though its exposure to some troubled sectors (such as infrastructure and steel) led to increased pressure
on asset quality. However, healthy growth in operating income and proceeds from monetisation of its stake in various
subsidiaries will help the bank to deal with its NPA challenges.
LIC Housing  LIC Housing Finance is one of the largest mortgage financiers in India with a market share of 11% and loan book of
over Rs. 1,00,000 crore. The company is promoted by Life Insurance Corporation of India, which is among the most
trusted brands in the country. With over 200 branches, 1,241 direct sales agents, 6,535 home loan agents and 782
customer relationship associates, the company has one of the strongest distribution structures in India to support
business expansion. Going ahead, a revival in the economy and moderation in borrowing rates could be key triggers for
the stock. Therefore, considering stable RoE of ~20%, sound asset quality and healthy growth outlook, the company’s
fundamentals are strong.
Max India  Max India has demerged into three different entities, of which Max Financial Services will hold Max Life Insurance (new
Max IndiWa will hold Max Healthcare, Max Bupa Health Insurance and Antara businesses). Max Life Insurance (held by
Max Financial Services) is among the leading private sector insurers and has gained critical mass and enjoys the best
operating parameters in the industry. As the insurance sector is showing signs of stabilisation, the company’s favourable
product mix and a strong distribution channel will result in healthy growth in premiums and profits.
PNB  Punjab National Bank (PNB) has strong liability mixes in the banking space, with low-cost deposits constituting over
44% of its total deposits. This helps the bank maintain one of the highest margins among PSBs. However, in view of the
weakness in the economy and higher exposure to troubled sectors, asset quality stress has increased and NPA issues
are likely to persist over the next few quarters.
PFS  PTC India Financial Services, owned by PTC India, is focused on providing financial solutions to projects in the energy
value chain. Given the robust lending opportunities in the renewable energy segment and the likely reforms in the
thermal power segment, loan growth is expected to remain strong over the next 2-3 years. The proceeds from exits in
investments would add to profitability. Asset quality, despite some deterioration, is manageable.
SBI  State Bank of India (SBI) is the largest bank of India with loan assets worth over Rs. 14 lakh crore. The successful merger
of the associate banks and value unlocking from the insurance business could provide further upside for the bank. While
the bank is favourably placed in terms of liability base and the operating profit is better than peers, asset quality has
emerged as a key pain point, which will affect earnings growth. PSU bank recapitalisation plan by the government could
benefit the bank to make up for capital requirements to promote growth.
Union Bank of India  Union Bank of India has a strong branch network and an all-India presence. The bank aspires to become the largest
retail and MSME bank. Hence, it has ramped up its manpower and infrastructure to ramp up retail and SME lending. The
bank’s asset quality challenges have come to the fore (mainly from the corporate portfolio), whereas low tier-1 CAR also
remains an area of concern.
Yes Bank  Yes Bank, a new generation private bank, started its operations in November 2004 and has emerged as one of the top
performing banks. The bank follows a unique business model based on knowledge banking, which offers product depth
and a sustainable competitive edge over established banking players. The bank is suitably poised to ride the recovery in
the economy and the retail deposit franchise is showing a sharp improvement, which will support margins in the medium
to long term.

Consumer goods
Britannia  Britannia is the second largest player in the Indian biscuit market with ~30% market share. Under a new leadership,
Britannia has been able to leverage and monetise its strong brand and premium positioning in the biscuits and snacks
segments. The company is well placed to sustain its higher-than-industry growth rate with an improving distribution
reach, deep penetration in rural India, enhanced international business, entry into newer categories and focus on cost
efficiency. Management is confident of regaining double-digit growth at standalone level in the coming quarters.
Emami  Emami is one of the largest players in the domestic FMCG market with a strong presence in underpenetrated categories
such as cooling oil, antiseptic cream, balm and men’s fairness cream. With a revamped distribution strategy, management
expects Kesh King brand to post recovery in sales in the coming quarters. Management is confident of achieving
double-digit revenue growth in FY2019 on account of the expected improvement in rural demand and a stable demand
environment in urban India. The company has maintained its thrust in new product launches and enhancing its direct
distribution reach.
GSK Consumer  GSK Consumer Healthcare is a leading player in the malted food drinks (MFD) segment with ~70% share in the domestic
market. GSK Consumer posted decent performance in Q2FY2018 with improved volume growth and margins. We expect
increasing penetration of low-cost packs of Horlicks-based brand in rural markets/small towns; catering to premium and
super premium health food drink (HFD) category through relevant launches and sustained investment behind brands;
and improving penetration in northern and western parts of India to drive long-term growth for the company. We maintain
our Hold recommendation on the stock and will keenly monitor the performance in the coming quarters.
GCPL  Godrej Consumer Products Limited (GCPL) is a major player in personal wash, hair colour and household insecticide
market segments in India. The recent acquisitions, i.e. Strength of Nature, Darling Group, Tura, Megasari and Latin
American companies, have helped the company expand its geographic footprint and improve growth prospects. The
strategy of sustained new product additions and enhanced distribution reach in the domestic market bode well for
the company to achieve double-digit revenue growth and stable OPM. On the international front, revenue growth is
expected to improve, with Africa and Indonesia business expected to see recovery in their performance . Hence, we
recommend a Buy rating on the stock with a PT of Rs. 1,250.
HUL  Hindustan Unilever is India’s largest FMCG company. In Q3FY2018, domestic business volume growth of HUL stood at
11%, driven by normalisation in trade channels and pick-up in demand in both rural and urban markets. The company
has passed on the benefits of reduction in GST rates of essential items by offering price discounts/grammage increase
in about 800 SKUs of key products. This should further help in reporting good volume growth in an environment of
improving demand (especially in rural markets). However, more clarity will emerge in the next one to two quarters,
when base effect fades off. Though raw-material prices are increasing, margin expansion would sustain and we expect
margins to remain at 18-19% in the coming quarters. The current valuation does not provide much upside. Hence, we
maintain our Hold recommendation on the stock with a revised price target of Rs. 1,440.
ITC  ITC has a strategy of effectively utilising the excess cash generated from its cash cow, the cigarette business, to
strengthen and enhance its other non-cigarette businesses. The recent cess hike on cigarettes will keep cigarette sales
volume under pressure in the near term. The non-cigarette FMCG business would see better growth in the coming
years, with an expected pick-up in rural demand. This, however, will not add substantially to the company’s profitability.
Hence, in view of the near term concerns on the cigarette business, we have a Hold recommendation on the stock.
Jyothy Labs  Jyothy Laboratories Limited (JLL) is the market leader in the fabric whitener segment in India. Venturing into new
categories based on the ayurvedic platform and improvement in the reach of the existing product portfolio will help
JLL achieve double-digit earnings growth in the near to medium term. The stock has corrected by 12% in the past one
month. Thus, in view of the recent correction and better growth prospects, we upgrade our rating on the stock from Hold
to Buy, with an unchanged price target of Rs. 420.
Marico  Marico is among India’s leading FMCG companies. Core brands, Parachute and Saffola, have a strong footing in the
market. The company follows a three-pronged strategy, which hinges on expansion of its existing brands, launch of
new product categories (especially in the beauty and wellness space) and growth through acquisitions. Marico is one
of the strongest players in the domestic branded hair oil and edible oil markets, with a leadership position in both the
categories. We believe Marico would maintain strong growth momentum post normalisation in the domestic market.
Sustained new product launches and increased distribution reach would improve growth prospects in the long run.
Zydus Wellness  Zydus Wellness has a small product portfolio, consisting of just three brands (Nutralite, Sugar Free and Everyuth) that
cater to a niche category. Zydus Wellness has a strong portfolio of leading brands under its portfolio, which are largely
placed in low penetrated categories. Hence, most brands are likely to report double-digit revenue growth in a stable
market environment. The sustenance of double-digit revenue and margin expansion will be key re-rating trigger for the
stock. We will keenly monitor the performance in the coming quarters. We maintain our Hold recommendation on the
stock.

IT/IT services
Firstsource  Firstsource Solutions Limited (FSL) is a specialised BPO service provider. Management remained cautious on the
demand trajectory for FY2018 due to a sharp deterioration in its mortgage business and softness in the collection
business. Overall, FSL foresees industry-level growth of 6-8% in constant currency (CC) terms in FY2018 and its OPM
improving by 50-60 bps on CC basis for FY2018. Health of its balance sheet is improving gradually, as the company is
reducing its debt burden consistently through internal accruals. We expect the ongoing macro overhang to restrict the
stock’s outperformance in the near to medium term.
HCL Tech  HCL Technologies has a leadership position in the engineering and research and development (ERD) and infrastructure
management services (IMS) space, which together account for ~58% of the company’s total revenue. Management
expects higher acceleration of revenue due to a healthy order book and strong pipeline in the Mode 2 (Digital, Next
Gen and Cloud) and Mode 3 services (Product and Platform). However, the company foresees a slowdown in IMS
services (38.6% of total revenue) to continue for the near term owing to ongoing delays in the decision-making process
for technological spending by clients. The company has not shied away from taking the inorganic route to strengthen
its offerings. Additionally, management has made investments in digital technologies (DRYiCE), which will catapult the
company to the next level of growth during the ongoing digital transition. We remain positive on the company in view
of its large order wins, aggressive bets in ERD space, accelerated pace of investments in the products segment and
superior earnings visibility.
Infosys  Infosys is India’s premier IT and ITeS company that provides business consulting, technology, engineering and
outsourcing services. After the appointment of Mr. Nandan Nilekani as the non-executive chairman of the board, we
see some respite in the ongoing tussle between the founder and board. Infosys has anounced the appointment of
Salil Parekh as CEO and MD of the company for five years, effective January 2, 2018. He has rich experience in the
consulting/IT outsourcing business and has managed similar assignments in the past. The newly appointed CEO will
review the refreshing strategy and lay out the priorities of the strategic roadmap for Infosys in the investor meet in April
2018. However, we are concerned about steady execution under the new management and the digital transformations
strategy. Thus, we maintain our Hold rating on the stock.
Persistent  Persistent Systems has proven expertise, strong presence in newer technologies, strength to improve its IP base and
a decent margin profile, all of which sets it apart from other mid-cap IT companies. PSL is focusing on the development
of Internet of Things (IoT) products and platforms, as it sees significant traction from industrial machinery, SmartCity,
healthcare and smart agriculture verticals. Further, led by the alliance with IBM to build IoT solutions for IBM’s Watson
platform and re-sell agreement with IBM, we expect revenue momentum to accelerate in FY2019 and margin
improvement in the coming quarters due to the initiatives taken by the company.
TCS  Tata Consultancy Services is among the pioneers of the IT services outsourcing business in India and is the largest IT
services firm in the country. Digital revenue grew by 29% y-o-y to $3 billion in FY2017. Given the positive commentary on
the retail vertical and continued growth momentum in the digital vertical, we expect earnings to report a CAGR of 8.5%
over FY2017-FY2020. However, given the regulatory overhang (US tax reforms impact) and sluggish pick-up in spend in
the BFSI segment (32% of total revenue), we maintain our Hold rating on the stock.
Wipro  Wipro is among the top five IT companies in India. However, in the last few years, it has been lagging industry growth.
We believe owing to weakness in verticals such as healthcare and telecom, it is unlikely to show material improvement
in FY2018 earnings. Further, management has given an ambitious target of $15 billion revenue and 23% margin by 2020.
We see new CEO Abid Ali Neemuchwala’s target as an uphill task, looking at the current growth trajectory. We remain
skeptical, as anecdotal evidence on Wipro over the past 2-3 years does not inspire confidence.
Capital goods/Power
CESC  CESC is the power distributor in Kolkata and Howrah (backed by 1,225MW of power generation capacity) which is a
strong cash generating business. Further, 600MW of regulated generation capacity (to serve Kolkata distribution) has
come on stream recently in Haldia. Also its 600MW thermal power project at Chandrapur has signed PPA and started
operating. The losses in the retail business are coming down gradually over the past and it is expected to break-even
soon. The BPO subsidiary, Firstsource, is performing well in-line with expectations. However, the recent diversification
into unrelated businesses like IPL franchisee would hurt its valuations. CESC has announced the demerger of the
business into four verticals namely Power Distribution, Power Generation, Retail and IT Outsourcing. The restructuring
looks beneficial for minority shareholders optically. However, we await clarity on the financials of the demerged
companies
CG Power & Ind. Solutions  Key businesses of CG Power and Industrial Solutions - industrial and power systems - are going through a rough patch
and are potential beneficiaries of the upcoming investment cycle revival. Moreover, the company is looking to unlock
value by selling its international subsidiaries.

Finolex Cables  Finolex Cables, a leading manufacturer of power and communications cables, is set to benefit from an improving
demand environment in its core business of cables. The company is leveraging its brand strength to build a high-margin
consumer product business. The company has recently launched fans and switch gears. The company is planning to
launch water heaters soon. The addition of new products in its product portfolio could prove to be the next growth
driver. We anticipate healthy earnings growth, return ratios in high teens and superior cash flows, which bode well for
the stock. Therefore, we remain positive on the stock.
Greaves Cotton  Greaves Cotton Limited (GCL) is a mid-sized and well-diversified engineering company. Core competencies of the
company are in diesel/petrol engines, power gensets, agro engines and pump sets (engine segment). GCL is aiming
to strengthen its presence in the aftermarket segment by introducing new products and ramping up its multi-brand
aftermarket division. However, the 3W engine business (contributing about 40% to GCL topline) is expected to remain
muted in the medium term. Structural shift from the 3W segment in favour of LCV will lead to flat to low single-digit
growth for the 3W industry in the medium term. In addition, adoption of electric 3W led by government policy support
will also impact GCL prospects as the company has not tied up with any OEM so far and electric vehicles are not its
core competence. We expect the 3W business to continue to be a drag and expect a modest 5% overall topline CAGR
over the next two years. The 3W business is likely to largely offset growth in the aftermarket and agri segments. We
downgrade our recommendation on the stock from Buy to Hold, with a revised PT of Rs. 137.
Kalpataru  Kalpataru Power Transmission is a leading EPC player in the power transmission and distribution space in India.
Opportunities in this space are likely to grow significantly, thereby providing healthy growth visibility. OPM of the
standalone business is likely to remain around 10%, while OPM of JMC Projects (a subsidiary) is showing signs of
improvement. We see some value-unlocking potential from the sale of assets or listing of new business in future. We
remain positive on the stock.
KEC  KEC International is a Global Power Transmission Infrastructure EPC major. It has presence in the verticals of Power
T&D, Cables, Railways, Water, Renewable (Solar Energy) and Civil. Globally, the company has powered infrastructure
development in more than 61 countries. KEC is a leader in Power Transmission EPC projects and has more than seven
decades of experience. Over the years, it has grown through the organic as well as inorganic route. We estimate the
company’s OPM to improve to ~ 10% and D-E ratio to improve to 0.4:1 by the end of FY2020E; we retain our Positive
outlook on the stock.
PTC India  PTC India is a leading power trading company in India with a market share of 35-40% in the short-term trading market.
Over the past few years, the company has made substantial investments in areas such as power generation projects
and power project financing, which will start contributing to its earnings. We retain our positive stance on expected
healthy volume uptick, with an increasing share of long-term contract business.
Skipper  Skipper is uniquely placed to exploit the growing opportunities in two lucrative segments: power (transmission tower
manufacturing and EPC projects) and water (PVC pipes). The company had a comfortable order book of Rs. 2,640 crore
at the end of Q1FY2018 in the transmission business, which looks promising given the huge investments proposal by the
government in the power T&D segment over the next five years. The company has expanded the PVC capacity manifold
(4x) and aspires to turn into a national player from a regional player.
Thermax  The energy and environment businesses of Thermax are direct beneficiaries of the continuous rise in India Inc’s capex.
Thermax Group’s order book stands around its consolidated revenue. However, the company has shown an ability to
maintain double-digit margins in a tough macroeconomic environment. We retain our Hold rating on the stock due to its
rich valuation.
Triveni Turbines  Triveni Turbines (TTL) is a market leader in 0-30MW steam turbine segment. TTL is at an inflexion point with a strong
ramp-up in the after-market segment and overseas business while the domestic market is showing distinct signs of a
pick-up. The company has also formed a JV with GE for steam turbines of 30-100MW range which is likely to grow multi-
fold in the next 4-5 years. TTL is virtually a debt-free company with a limited capex requirement and an efficient working
capital cycle, reflected in very healthy return ratios. Further, boosted by the expected uptick in the domestic capex cycle,
the company’s earnings are likely to grow by 6% per CAGR from FY2017-FY2019E.
V-Guard  V-Guard Industries is an established brand in the electrical and household goods space, particularly in south India. Over
the years, it has successfully ramped up its operations and network to become a multi-product company. The company
has a strong presence in the southern region. It is also aggressively expanding in non-south markets and is particularly
focusing on tier-II and III cities where there is lot of pent-up demand for its products. We remain Positive on the stock.
Va Tech Wabag  VA Tech Wabag (VTW) is one of the world’s leading companies in the water treatment field with eight decades of plant-
building experience. Given the rising scarcity of fresh water, we expect flow of huge investments in the water segment,
both globally and domestically. With rising urbanisation and industrialisation in India, we expect substantial investments
in this space. Given the large opportunity ahead and inherent strengths of VTW, such as professional management,
niche technical expertise and global presence, we remain positive on the stock.

Infrastructure/Real estate
Gayatri Proj  Gayatri Projects is a Hyderabad-based infrastructure company with a strong presence in irrigation, road and industrial
construction businesses. Order book of the company stands at Rs. 11,933 crore, which is 5.6x its FY2017 revenue.
Further, the company expects to sustain 30%+ topline growth over the next 3-4 years with OPM around 15%. The
company has completed its power and road BOT portfolio and plans to unlock value by offloading stake to private
equity. The company has the potential to transform itself into a bigger entity.
IRB Infra  IRB Infrastructure Developers is the largest toll road BOT player in India and the second largest BOT operator in
the country with all its projects being toll based. The company has an integrated business model with an in-house
construction arm, which provides a competitive advantage in bidding for larger projects and captures the entire value
from BOT assets. Further, the company has a profitable portfolio as majority of its operational projects have become
debt-free and are present in high-growth corridors, providing it a healthy cash flow. Thus, the company is well poised
to benefit from the huge opportunity in road development projects on account of its proven execution capabilities and
scale of operations.
Jaiprakash Asso  Jaiprakash Associates has been facing earnings pressure across business verticals. The company has just concluded
its cement asset sale worth Rs. 16,000 crore and transferred 1,000 acres worth Rs. 13,000 crore to an SPV, which will
reduce its debt burden. Going ahead, the company will be focusing primarily on EPC business and balance portfolio of
business verticals and aim to reduce its debt further. The current business restructuring has led to a cautious view on
the stock.
L&T  Larsen & Toubro (L&T), being the largest engineering and construction company in India, is a direct beneficiary of the
domestic infrastructure capex cycle. The company is expected to perform well, backed by its sound execution track
record and healthy order book. Monetisation of the non-core businesses will continue for some time, leaving scope for
further value unlocking. Measures planned by the company to improve its return ratios augur well. Hence, we remain
positive on the stock.
NBCC  NBCC (India), a Navratna public sector enterprise is notified as a Public Works Organisation (PWO), which gives it a
unique eligibility to bag orders on a nominated basis from government departments and PSUs. NBCC has already
amassed a huge order book, which gives it a strong revenue visibility for the next five years. Moreover, future prospects
look much brighter, given the opportunities from multiple areas such as redevelopment of old government colonies in
Delhi, Rajasthan and Odisha, development of government lands, Smart Cities, ‘Housing for All 2022’ and ‘Amrut’. We
remain positive on the stock considering the huge competitive advantage, a unique business model, high return ratios
and healthy cash flows.
Sadbhav Eng  SEL is engaged in 1) EPC business for transport, mining and irrigation sectors and 2) development of roads and highways
on BOT basis through SIPL. SEL has a healthy order book of Rs. 7,715 crore (2.8x its FY2017 revenue, with presence in 11
states). The company has robust in-house integrated execution capabilities with qualified human resource and owned
equipment. We expect SEL to benefit from improved order execution, enhanced order inflows (particularly from the
transport segment) and resolution of working capital issues, resulting in a sturdier balance sheet. Further, improving
outlook for the Indian road sector and limited competitive intensity augur well for SEL since it is present in both, asset
creation and EPC verticals.
Oil & Gas

Oil India  Oil India has several hydrocarbon discoveries across reserves in Rajasthan and the north-eastern region of India. The
company holds 2P (proved and probable) reserves of 79 mmt for oil and 124 mmtoe for gas. Reserve-replacement ratio
of the company is also healthy. The recent increase in oil price and gradual revival in production has improved the
earnings outlook. Operational performance of the company is healthy and the stock offers high dividend yield.
Petronet LNG  Petronet LNG is the largest LNG re-gasifier in India with 15 mmt LNG terminal at Dahej and 5 mmt LNG terminal at
Kochi. The company enjoys a competitive edge compared to other LNG import terminals given its low tariff and long-
term contracted volume with use or pay clause. We expect Dahej terminal to operate above 100% utilisation, given its
competitive edge and resolution of pipeline connectivity issues in southern India are expected to improve utilisation for
Kochi terminal. Petronet LNG would be the key beneficiary of rising share of LNG in India’s overall gas consumption.
Reliance Industries  Reliance Industries has one of the largest and complex refining businesses in India and enjoys a substantially higher
refining margin over the benchmark GRM. We expect GRM to remain healthy and the petrochem margin to be maintained
in the medium term on an uptick in domestic demand. Capex in the downstream business (incremental capacity in the
petchem business and petcoke gasification in refining) would be the key earnings driver in the coming years. Large
investment in Reliance Jio could add value in the long term.
Selan Exploration  Selan Exploration Technology is an oil E&P company with five oil fields in the oil-rich Cambay basin of Gujarat. Initiatives
to monetise oil reserves in its Bakrol and Lohar oil fields will improve production. However, challenges related to
monetisation of its large hydrocarbon reserve base and near-term production ramp-up issues are likely to be an
overhang on the stock in the near to medium term.

Pharmaceuticals
Aurobindo Pharma  Aurobindo Pharma is set to post healthy growth on account of ramp-up in the U.S. and European markets, thanks to a
strong product pipeline built over a period and focus on niche segments such as injectibles, hormones, penems and
sterile products. The expected increase in the export-led business and a favourable tilt in revenue mix are likely to
boost margins, resulting in faster earnings growth as compared to revenue. Pricing pressure, USFDA inspections and
an appreciating rupee warrant a caution in the near term. Management has guided for the launch of over 25 products
(more approvals of complex products) in the coming years, which will help Aurobindo Pharma to achieve higher growth
and mitigate the increasing pricing pressure in the U.S. market.
Cadila  The USFDA inspected Cadila Healthcare’s Moraiya facility and gave a clearance without any Form 483 observations.
This cleared the big overhang on the growth prospects of its U.S. business (which was affected due to delayed product
approvals by the USFDA), as the pace of approval will improve going ahead. We feel several high-value products such
as generic Toprol XL, Lialda, transdermal and respiratory products would receive approval in the near to medium term.
This would be a key catalyst for growth and margin expansion over FY2018-FY2019. However, an appreciating rupee
coupled with double-digit pricing pressure in the U.S. business (10-12% for FY2018 and 8-10% in FY2019) warrant caution
for the near term. In addition, increased tax rate guidance from earlier 12-15% to 22-25% for FY2018 and 22% for FY2019-
FY2020 is expected to significantly affect profitability.
Cipla  Cipla has brought about a paradigm shift in its business strategy. Management sounded confident of ramping up its U.S.
and EU businesses with new product launches, and expects benefits from cost-control initiatives to drive earnings from
FY2018. Management maintains guidance of double-digit growth in the U.S. and India businesses despite a challenging
environment on account of new product launches planned for FY2018 and FY2019 (one niche product every quarter).
Cipla has an exhaustive pipeline of inhalers and complex generics, which has a huge market size. These opportunities
will escalate revenue growth and will boost the topline in the long run. The company has recently received establishment
inspection reports (EIRs) for Indore, Goa and InvaGen plants.
Divis Labs  Successful resolution of an import alert and warning letter in a short span is a big positive for Divis. Hence, we expect the
business to improve from H2FY2018 and resume normalcy from FY2019 as business from non-exempted products will
resume, two blocks at Unit-1 will be commercialised and a new plant at Vizag would to be completed in FY2019. Hence,
we have upgraded our recommendation to Buy with a revised PT of Rs. 1,275, as successful resolution of import alert
and warning letter in a short span of time restore confidence in the company and its management.
Glenmark Pharma  The finished dosage facility of Glenmark Pharmaceuticals Limited (Glenmark) at Baddi underwent USFDA audit from
November 6-11, 2017, and received Form 483 with seven observations. Development is sentimentally negative at the
moment, as we feel there is no data integrity-related observation or a repeat one. Hence, there are lower chances of
escalation of Form 483 to a Warning Letter/Import Alert. The company is in the process of providing a comprehensive
response to observations and would be replying to the FDA shortly (outcome of which shall be closely monitored).
However, we remain cautioned as pricing pressure in the U.S. base business, limited visibility of margin expansion,
increasing capex and R&D cost and lower-than-expected debt reduction remain key overhangs on the stock in the near
term. Timely monetisation of key products and a big licensing deal in the R&D business (GBR-830 reported positive data
in phase 2a) will be key positive triggers to watch out for.
Lupin  The USFDA has issued a combined warning letter (on November 6, 2017) to Lupin’s two formulation manufacturing
facilities at Goa and Indore (Pithampur unit -2). The development is a setback to Lupin as its key plants have been issued
a warning letter together. While there will not be any disruption of existing product supplies from both locations, there
will be a delay in new product approvals from the mentioned sites, which shall significantly pressurise the existing base
business in the U.S. (owing to increased completion in existing products and increased pricing pressure due to channel
consolidation). Both sites put together would account for over 50% sales from the U.S. We maintain our Hold rating on
the stock, yet we advise investors to avoid bottom fishing and await more clarity on the development. We are putting
the PT under review till further clarity emerges.
Sun Pharma  Sun Pharma recently announced that the USFDA has accepted its New Drug Application (NDA) for OTX-101 (cyclosporine
A, Ophthalmic solution), marking an important developmental milestone for its dry eye candidate. The acceptance of
NDA is positive from the company’s efforts to build its speciality pipeline in the U.S. Moreover, it follows the company’s
decision to withdraw 15 pending ANDAs and 1 NDA in the U.S., which was seen as a precursor to resolution of regulatory
issues at Halol. Taking this development into consideration, we also anticipate that the company could be looking at
re-inspection at its Halol plant in the near future. Sun Pharma has already completed remediation steps a quarter back.
Currently, we have not factored in any upside from the closure of warning letter of Halol in our FY2018 estimates. We
maintain our Hold rating with a PT of Rs. 600.
Torrent Pharma  Torrent Pharma announced its acquisition of Unichem Laboratories’ domestic branded business (Rs. 841.5 crore sales
in FY2017) along with a manufacturing facility in Sikkim and ~3,000 employees for a consideration of Rs. 3,600 crore
(4.3x sales). Management expects the deal to be cash accretive for the first year and EPS accretive from the third year
of operations, which will depend on the company’s ability to ramp up the acquired business. Hence, we feel that though
the deal is a strategic fit, it will weaken core earnings for the short term and result in debt hangover (~75% funding will
be via debt i.e. ~Rs. 2,800 crore increase in debt). We have upgraded our rating to Hold, with a revised PT of Rs. 1,480,
as we feel the acquisition may prove to be a prudent step as it helps to reduce dependence on the U.S. market.

Building materials
Grasim  Grasim is better placed compared to other large players in the cement space owing to its strong balance sheet,
comfortable debt/equity ratio, attractive valuation and diversified business. The full ramp-up of the Vilayat plant
(increasing capacity to 804,000 tonne) is likely to aid VSF volumes going ahead, though prices may soften in the near
term. Further, the merger of Aditya Birla Chemicals India Ltd. (ABCIL) and expansion in the caustic soda division are likely
to maintain strong performance in the chemical division. On the cement front, the company expects demand to pick up
in the near term, while slow execution of government projects and surplus inventory remain areas of concern.
The Ramco Cements  The Ramco Cements, one of the most cost-efficient cement producers in India, will benefit from capacity addition carried
out ahead of its peers in the southern region. The company is mulling over the expansion of its satellite grinding
capacity from 4 mtpa to 7.1 mtpa at a cost of Rs. 1,095 crore. The expansion aims to strengthen reach in Andhra Pradesh,
West Bengal and North Eastern states. The company has reaped the benefits through cost-saving measures, besides
constantly reducing debt, which has led to improved profitability. In a nutshell, better volumes, cost efficiencies and
reducing leverage have yielded benefits.
Shree Cement  The expansion plan of Shree Cement to reach 40 mtpa by FY2019 (currently 29.3 mtpa) and increasing geographical
footprint in the eastern and southern regions is likely to aid better volume growth going ahead. Pricing discipline in the
cement business should help improve realisations over FY2018 to FY2020. However, increased cost structure (power
and freight cost) affecting operating margins and higher effective tax rate are likely to limit net earnings growth in the
near term.
UltraTech Cement  UltraTech Cement is India’s largest cement company. The capacity is expected to reach 95.4 mtpa by the end of FY2019.
We expect UltraTech to report industry-leading volume growth on account of timely capacity expansion (acquisition of
Jaypee Group’s cement assets) and likely revival in demand (with the start of affordable housing projects and enhanced
spending on infrastructure development). However, rise in the cost of petcoke and diesel along with integration of
Jaypee Group’s cement asset integration pose a near term risk to operating margin.
Discretionary consumption
Arvind  Arvind is one of India’s leading vertically integrated textile companies with an experience of more than eight decades in
the industry. The company has switched itself into the branded retail space by enhancing its branded portfolio. Arvind
is a licensee for marketing various marquee global brands in India such as Arrow, US Polo, Tommy Hilfiger, and Calvin
Klein. The company also operates specialty retail stores under licensee brands such as GAP, The Children’s Place,
Aeropostale and Sephora. The company is also present in the retail space through Unlimited and The Arvind stores.
Management proposes to demerge its branded, retail and engineering businesses as both these have matured enough
to enhance their growth prospects in the coming years. Moreover, listing these businesses as separate entities will
help create value for the businesses, as separate leadership and development of best strategies for the business will
enhance focus.
Century Plyboards  Century Plyboards is a leading player in the organised plywood industry with a market share of 25%. Strong growth in
the sector, Century’s premium positioning and brand equity strength and the successful rollout of GST would enable it
to report revenue CAGR of 17.7% over FY2017-FY2019E. Earnings are likely to report a 19.6% CAGR over FY2017-2019E
on account of revenue growth and better absorption of fixed costs. We believe structural growth triggers for Century
Plyboards are becoming visible due to: 1) GST implementation (expected to result in a shift of market share to organised
players from unorganised players, as they lose cost advantage); 2) the government’s relentless focus on affordable
housing; and 3) MDF unit getting operational in tandem with GST implementation.
Cox & Kings  Cox & Kings is an integrated player in the tourism and travel industry, with a strong presence in the global leisure travel
segment and the education tourism segment in Europe. The company has a 30% market share in the global outbound
tourism market. Domestic leisure travel and Meininger Hotels have maintained strong revenue growth momentum,
while the international leisure travel business is in the recovery mode. Operating performance of the education travel
business is expected to revive in the coming quarters. Reduction in debt continues to reduce stress on the balance
sheet and makes it a better play in the travel and tourism space. Hence, we maintain our Buy recommendation on the
stock with unchanged price target of Rs. 325.
Info Edge (India)  Info Edge is India’s premier online classified company in the recruitment, matrimony, real estate, education and related
service sectors. Naukri.com is a quality play and is directly related to GDP growth and internet/mobile penetration.
Management believes the impact of RERA has bottomed-out and the revival can be expected in major cities such as
Mumbai and Pune. Thus, the company has started discussions with potential developers and spending more on marketing
(Q3FY2018 vs. earlier) in anticipation that the registered brokers/developers in major cities will start spending more to
meet the pent-up demand. The ramp-up in promotional expenses will weigh on 99acres’ profitability performance. We
continue to derive comfort on Info Edge’s business strength, with leading market share in key businesses. We expect its
earnings trajectory to catch up, as macro headwinds subside.

INOX Leisure  INOX Leisure Limited (ILL), India’s second largest multiplex operator with 122 properties and 488 screens across 60
cities (accounting for about 20% of the multiplex screens in India), is scripting a blockbustre growth story through a mix
of inorganic and organic expansion plans. The ILL mega show is supported by an improving content quality in the Indian
mainstream and regional cinema with its movies regularly hitting the Rs. 100 crore or Rs. 200 crore box-office collection
mark. FY2017 was a difficult year for Inox and management expects FY2018 to be a better year, underpinned by a strong
content pipeline and improvement in other operating metrics. We continue to remain positive on ILL from a long-term
perspective, given its pan-India growth plans, healthy balance sheet (lower financial leverage) and potential benefits
from GST rollout.
KKCL  Kewal Kiran Clothing Limited (KKCL) is a branded apparel play with four brands in its kitty. Killer, its flagship denim brand,
has created a niche in the minds of consumers. The performance of Q3FY2018 was subdued mainly due to a lower
pricing environment. To increase sales, the company had revised its strategy in the last quarter, which we believe will
put some pressure on the working capital in the near term and would result in increased short-term debt. Thus, citing the
near-term headwinds in terms of lower bargaining power, we maintain our Hold recommendation with a revised price
target of Rs. 1,950.
Orbit Exports  Orbit Exports (Orbit) is a leading manufacturer and exporter of novelty fabrics, exporting its products to over 32 countries.
The company is a recognised star export house and operates in the niche area of high-end fancy fabrics, which are
mainly used by designers in women’s fashion apparels. Management indicated that the Latin American business has
started recovering and good performance can be expected in the coming quarters. The Middle East business is,
however, expected to remain under pressure. The high-margin Ribbons & Made-ups business is expected to grow in
strong double digits. Overall, management is confident of growing in mid-to-high teens in the short to medium term.
Further, Orbit has one of the better balance sheets in the textiles industry. We expect it to improve further in the coming
years. However, in view of near-term concerns in export markets, we maintain our Hold rating on the stock.
Relaxo Footwear  Relaxo Footwear is present in the fast-growing footwear category, where it caters to customers with its four top-of-
the- mind recall brands, such as Hawaii, Sparx, Flite and Schoolmate. The company has emerged as an attractive
investment opportunity owing to its growing scale, strong brand positioning and healthy financial performance. Relaxo
has a superior portfolio of footwear brands and its relentless focus on driving sales through the expansion of distribution
and improving the brand presence augur well for the company to achieve good growth in the backdrop of better
demand environment. Moreover, GST implementation will be a key growth lever for Relaxo, as a large part of the Indian
footwear market is unorganised (~60%).
Thomas Cook (I)  Thomas Cook India Limited (TCIL), owned by value investor Prem Watsa, is an integrated leisure travel and human
service management company in India. FY2017 was a year of integration for the travel and HR businesses of TCIL. With
recent acquisitions in the domestic and international markets, the travel and related business and HR business would
remain key growth drivers in the near term. The foreign exchange business will continue to complement the travel and
travel-related services businesses in the long run. We maintain our Hold recommendation on the stock.
Wonderla Holidays  Wonderla Holidays Limited (WHL) is the largest amusement park company in India with over a decade of successful and
profitable operations. The company owns and operates two amusement parks under the brand name Wonderla in Kochi
and Bengaluru and came up with a third park in Hyderabad in Q1FY2017. The setting up of a new park in Chennai will
make WHL one of the strongest players in South India. We expect footfalls at Bangalore and Kochi parks to remain under
pressure in the coming quarters, as price hikes will take some time to get absorbed in the market. Recently the GST
council has reduced GST rate on services by way of admission to theme parks, water parks, joy rides, merry-go-rounds,
go-carting and ballet, from 28% to 18%, which will be beneficial for the company going ahead.
Zee Entertainment  Zee Entertainment Enterprises Limited (ZEEL), part of the Essel Group, is one of India’s leading television media and
entertainment companies. The company has a bouquet of more than 40 channels across Hindi, regional, sports and
lifestyle genres. ZEEL continues to outperform the broadcasting advertising market and expects to continue the
momentum with an improvement in macro economy. As demonitisation and GST are behind now, management expects
ad revenue growth will remain at around mid-teens in FY2018. Domestic subscription revenue growth is expected
to be in a low-teen CAGR for the next 3-4 years. Management is confident to maintain margins at 30%+ level despite
investments in digital offerings. Without investments, margins can go to 34%+ level. ZEEL consistently focuses on its five
key pillars to drive its growth. We believe successful execution of this strategy will have a material impact on sustainable
growth going forward. We continue to see ZEEL as the prime beneficiary of macro revival and digitisation.
Diversified/Miscellaneous
Bajaj Holdings  Bajaj Holdings and Investment Limited (BHIL, erstwhile Bajaj Auto) was demerged in December 2007, whereby its
manufacturing business was transferred to the new Bajaj Auto Limited (BAL) and its strategic business consisting of
the wind farm and financial services businesses was vested with Bajaj FinServ (BFS). All the businesses and properties,
assets, investments and liabilities of erstwhile Bajaj Auto, other than the manufacturing and strategic ones, now remain
with BHIL. BHIL is a primary investment company focusing on new business opportunities. Given the strategic nature
of its investments (namely BAL and BFL), we have given a holding company discount of 50% to its equity investments.

Liquid investments and investments in other group companies have been valued at cost. Further, the PT for BFS has
been revised upwards to Rs.6,050, while that for BAL has been revised upwards to Rs. 3,625 as the business has
exhibited traction and is likely to improve further. Consequently, we have maintained our Buy recommendation on BHIL
with a revised PT of Rs. 3,595.
BEL  Bharat Electronics Limited, a PSU manufacturing electronic, communication and defence equipment, stands to benefit
from the enhanced budgetary outlay for strengthening and modernising the country’s security equipment. The ‘Make
in India’ initiative of the government will support earnings growth in the coming years, as it is the only player with
strong research and manufacturing units across the country. The current order book of around Rs. 41,746 crore provides
revenue visibility for the next 3-4 years.
Bharti Airtel  Bharti Airtel is the leader in the Indian mobile telephony space. Management continues to focus sharply on increasing
retail ARPU, enhancing African operations, non-mobile services (enterprise services) and value-added services (Airtel
TV and music) to boost revenue and reduce churn rate. Industry consolidation (three-player market, with the exit of
smaller players) will help Airtel to maintain its leading position in revenue market share with improving profitability. Going
forward, from a long-term perspective, explosive growth in the data segment, strong network, acquisitions (Tata Tele and
Telenor) and reach will help Bharti emerge stronger. We have a Buy rating on the stock.
GDL  With its dominant presence in the container freight station (CFS), rail freight and cold chain businesses, Gateway
Distriparks has evolved as an integrated logistics player. The CFS business is a cash cow, while its investments in the
rail freight and cold storage businesses have started bearing fruits. The company is one of the largest players in the
CFS business and has evolved as the largest player in the rail freight business as well as the cold storage business. The
proposed capex for all the three segments will strengthen its presence in each of the segments and increase its pan-
India presence going forward.
PI Industries  PI Industries (PI), a leading agro chemical company, has a differentiated business model focusing on the fast-growing
custom synthesis and manufacturing (CSM) business, which contributes 60% to its revenue. PI is gradually ramping up
production at Jambusar facility. The company has introduced three new products (one maize herbicide and two rice
fungicides) during 1HFY2018 and has lined up two new product launches during 2HFY2018. Further, utilisation of
the new plant at Jambusar (phase 3) is likely to ramp up over the next 2-3 quarters.). Management has highlighted
some green shoots in the global agrichem market, with reduction in inventory levels and expect the global market to
revive in H2FY2019. Further, with healthy order book of little over $1 billion, management expects improvement in order
execution in FY2019. In the domestic agri business, the company will be launching two new products in Q4FY2018 and
three new products in FY2019 (one wheat herbicides under 9(3) registration and two insecticides products under 9(4)
in the rice and vegetables category). Further, owing to supply-side constraints from China, the company is planning
backward integration in FY2019 for one of its key raw materials imported from China. Further, continuous delay in order
execution in the CSM business will be taking a toll on earnings performance. We continue to maintain our Hold rating on
the stock with a revised PT of Rs. 880.
Ratnamani Metals  Ratnamani Metals and Tubes Limited (RMTL) is the largest stainless steel tube and pipe manufacturer in India. Despite
a challenging business environment due to increasing competition, we remain positive on RMTL on account of its
strong balance sheet, ability to generate superior return ratios in the coming years and expansion of Seamless SS tube
capacity in the next few years. Further, management has maintained a strong outlook on the potential opportunities in
the oil and gas sector, city gas distribution projects, cross-country pipelines and inter-linking of rivers across India.
Supreme Industries  Supreme Industries is a leading manufacturer of plastic products with a significant presence across the piping,
packaging, industrial and consumer segments. We remain positive on its new launches of value-added products and
capacity expansion plans, which are largely funded by its robust internal accruals. The company enjoys superior return
ratios with low gearing levels. With diversified products, an extensive distribution network, improved capital structure
and government thrust on better infrastructure, Supreme Industries has emerged as one of the best proxy plays on the
increasing use of plastic consumption in India. Hence, we remain positive on the stock.
UPL  UPL is a leading global producer of crop protection products, intermediates, specialty chemicals and other industrial
chemicals. The company is present across agricultural inputs segment, ranging from seeds to crop protection products
and post-harvest activities. The company has also started to focus on premium products in agro-chemicals. UPL has
outpaced the global agrochemical industry, growing at ~17% for FY2017 as against a decline of ~2.5% for the industry.
Consequently, the company has gained ~1% market share. Moreover, agro-commodity prices are likely to remain lower
going ahead, which in turn will boost demand for generic products, in which UPL is a major player. A positive outlook
for geographies such as India, Europe and Latin America would also drive revenue growth going ahead. Further, given
the expected cyclical recovery in CY2018, led by decreasing channel inventories in key regions and some uptick in
agri commodity prices, we expect acceleration in earnings trajectory over the next two years (21% earnings CAGR over
FY2018- FY2020E). With its extensive product catalogues coupled with a strong distribution network and backward-
integrated systems, UPL is better placed to benefit from the global recovery in the agri commodity space over the next
2-3 years. We maintain Buy with a PT of Rs. 980.

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Sharekhan Top Picks

Consistent outperformance (absolute returns; not annualised) (%)

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PER ROE (%) PRICE UPSIDE

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PER ROE (%) PRICE UPSIDE

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PER ROE (%) PRICE UPSIDE

ONGC 195 12.6 10.1 8.7 9.5 11.0 12.1 230 18

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