India Post Conference Notes Day 1 Feb 12 EDEL

7th & 8th February, 2012
The Trident, Bandra Kurla Complex, Mumbai
Post Conference Notes - Day 1
Preface
We present key takeaways from the day 1 of the Mumbai leg of Edelweiss India Conference 2012.
The event is aimed at bringing together over 70 corporates and facilitating over 2,000 one-on-one
meetings between investors and corporates.
The conference is being held in the backdrop of uncertain times, both in India as well as globally.
CY11 was one of the most challenging periods in recent times with the nascent global recovery
faltering on intensifying strains in the euro area and weakness elsewhere. Locally too, sentiments
took a beating as multiplicity of factors, ranging from government policy hurdles to the aggressive
monetary tightening, weighed down on macros. While sentiments have certainly improved since
the December lows, real economy indicators would need to be closely monitored to gauge the
extent of the recovery.
Overall, even as headwinds remain, investors are enthusiastic about India. The likely triggers in
the form of a possible reversal of the rate cycle, fiscal consolidation and traction in basic policy
decisions could provide big boost to investments in FY13. Our interactions with the companies
also point to a gradual recovery in demand. Within the consumer sector, our interactions
suggest that while the overall demand remains healthy, there is some pressure within the
discretionary space. With raw material prices beginning to soften, companies are confident of a
revival in margins. Further, rural markets are a key focus area and hence consumer companies
continue to invest in a robust rural distribution system. Meanwhile, real estate sector companies
are hopeful that as the interest cycle peaks out and policy reforms begin to kick in, risk perception
for the sector is likely to recede. While some concerns remain, a fall in interest rates is expected
to boost volume while recent initiatives to deleverage through asset sales may help spur cash
flows, leading to a reduction in debt levels, going forward. In metals, participants are hopeful of
an uptick in steel demand in FY13. While FY12 demand is expected at 4.5%-5.0%, (below the GDP
growth rate), FY13 could witness a higher demand growth in the range of 7%-8% (at least equal to
the GDP growth). Production cuts worldwide, especially in China (total of ~150mt annualized),
will support steel prices at current levels. Utility companies who attended the conference are
hopeful of speedy approvals from the government and are firmly on track in adding new capacities.
We hope this conference will provide investors with an ideal platform to interact with a crosssection of companies besides giving an insightful perspective on the likely trajectory of India's
growth and investment opportunities that come with it.
Team Edelweiss
Edelweiss
Securities Limited
Edelweiss Securities
Limited
Profile of Participating Companies
CONTENTS
Ajanta Pharma .............................................................................................................................................................................................. 4
Axis Bank ....................................................................................................................................................................................................... 6
Bajaj Electricals ............................................................................................................................................................................................ 8
Bhushan Steel ............................................................................................................................................................................................. 10
Cairn India ................................................................................................................................................................................................. 12
Cox & Kings ................................................................................................................................................................................................ 14
Dabur India ................................................................................................................................................................................................ 16
Deepak Fertilizers & Petrochemicals Corp ............................................................................................................................................. 18
Dish TV India .............................................................................................................................................................................................. 20
eClerx Services ........................................................................................................................................................................................... 22
Emami .......................................................................................................................................................................................................... 24
Gail .............................................................................................................................................................................................................. 26
Glenmark Pharmaceuticals ...................................................................................................................................................................... 28
Godrej Consumer Products ....................................................................................................................................................................... 30
Grasim Industries ...................................................................................................................................................................................... 32
Havells India .............................................................................................................................................................................................. 34
HDFC Bank .................................................................................................................................................................................................. 36
Hexaware Technologies ............................................................................................................................................................................ 38
Housing Development Finance Corp ........................................................................................................................................................ 40
ICICI Bank ................................................................................................................................................................................................... 42
IDBI Bank .................................................................................................................................................................................................... 44
Indoco Remedies ........................................................................................................................................................................................ 46
Info Edge India ........................................................................................................................................................................................... 48
Infrastructure Development Finance Co ................................................................................................................................................. 50
JSW Energy .................................................................................................................................................................................................. 52
JSW Steel ..................................................................................................................................................................................................... 54
Jyothy Laboratories ................................................................................................................................................................................... 56
Kajaria Ceramics ....................................................................................................................................................................................... 58
Edelweiss
Securities Limited
Limited
KEC International ....................................................................................................................................................................................... 60

Kotak Mahindra Bank ................................................................................................................................................................................ 62
Larsen & Toubro ......................................................................................................................................................................................... 64
Manappuram Finance ............................................................................................................................................................................... 66
Oil & Natural Gas Corp ............................................................................................................................................................................. 68
Pantaloon Retail ........................................................................................................................................................................................ 70
Persistent Systems ..................................................................................................................................................................................... 72
Phoenix Mills ............................................................................................................................................................................................. 74
Power Finance Corporation ..................................................................................................................................................................... 76
PI Industries ............................................................................................................................................................................................... 78
Reliance Infrastructure ............................................................................................................................................................................. 80
Reliance Power ........................................................................................................................................................................................... 82
Shoppers Stop ............................................................................................................................................................................................ 84
Sun Pharmaceutical Industries ................................................................................................................................................................ 86
Tata Consultancy Services ........................................................................................................................................................................ 88
Titan Industries .......................................................................................................................................................................................... 90
Torrent Pharmaceuticals .......................................................................................................................................................................... 92
Yes Bank ...................................................................................................................................................................................................... 94
Zodiac Clothing .......................................................................................................................................................................................... 96
Zuari Industries ......................................................................................................................................................................................... 98
Edelweiss
Securities Limited
Limited
Company Profile
AJANTA PHARMA
Exciting play on specialty branded generics
India Equity Research
February 7, 2012
Pharmaceuticals
Key takeaways
EDELWEISS RATINGS
Focus on differentiated products drives above industry level growth: Ajantas focus
on differentiated products, through R&D capability, has led to above industry
level growth in its focus therapies including Cardio, Opthal and Dermatology. Its
derma portfolio, growing at 32%, has improved its ranking by four levels to 14th
during Dec 2011. Its entry into new segments including Ortho, ENT and Gastro will
drive higher growth over the next year. These segments comprise ~7% of current
domestic sales with portfolio of 16 products. Management expects to maintain
current growth momentum (~20%) in domestic market.
US market to accelerate growth: The key trigger for growth in exports (60% of total
sales) will be US where it plans to launch Levetiracetam and Risperdone over the
next two months. The products will be supplied from Aurangabad FDA approved
facility. Overall, Ajanta has 5-8 filings under approval in US. More importantly, US
will be a strategic focus market for Ajanta and will drive higher incremental
investment in future. Management has planned INR3bn investment into dedicated
manufacturing facility for the US market.
Targeting 1,300 registrations in key export markets: Ajanta has developed a robust
pipeline of ~1,300 product registrations (over existing similar base) which will
drive future growth in key branded generics markets (Asia, Africa and LATAM). This
pipeline of products will double the existing base business from these markets
over next three to four years and largely comprise niche products or segments
with less than three or four competitors.
Funding under AMFM programme not a concern: Ajantas presence in Africa (40%
of total exports) largely comprises sales under AMFM programme (INR750mn).
Management has confirmed that Bill Gate foundation support of USD200mn will
assure continued supply under the programme until FY14.
Growth guidance: Management is confident of delivering 21% growth in FY12 and
aims to achieve long term target sales of INR 10 bn (from INR 5 bn).
Key risks
ROCE may dip due to upcoming investments. Increase in API costs could impact
margins in exports business.
Absolute Rating
NOT RATED
MARKET DATA (R : AJPH.BO, B: AJP IN)

CMP
: INR 391
Target Price
: NA
52-week range (INR)
: 421 / 175
Share in issue (mn)
: 11.7
M cap (INR bn/USD mn)
: 5 / 94
Avg. Daily Vol. BSE/NSE (000) : 85.4
Share Holding Pattern (%)

Promoters*
: 68.9
MFs, FIs & Banks
0.0
FIIs
0.0
Others
: 31.1
* Promoters pledged shares

(% of share in issue)
4.7
Relative Performance (%)

Sensex
Stock
Stock over
Sensex
1 month
11.7
32.2
20.5
3 months
0.8
14.6
13.9
12 months
(1.8)
99,7
101.5
Financials
Year to March
FY08
FY09
FY10
FY11
Revenues (INR mn)

Rev. growth (%)
EBITDA (INR mn)
Net profit (INR mn)
Share outstanding (mn)
EPS (INR)
EPS growth (%)
Diluted P/E (x)
EV/EBITDA (x)
ROE (%)
3,092
19.9
514
225
12
18.9
53.6
20.5
12.3
17.6
3,492
12.9
651
254
12
21.6
13.8
18.2
10.8
17.4
4,077
16.8
771
340
12
28.8
33.6
13.6
8.7
19.9
5,049
23.8
963
507
12
43.0
49.4
9.1
6.6
24.5
Edelweiss Research is also available on www.edelresearch.com,

Bloomberg EDEL <GO>, Thomson First Call, Reuters and Factset.
Manoj Garg
+91-22-6623 3302
manoj.garg@edelcap.com
Perin Ail
+91-22-6620 3032
perin.ali@edelcap.com
Edelweiss Securities Limited
Financial Statements
Balance sheet
Income statement
Year to March
(INR mn)
FY08
FY09
FY10
FY11
Income from operations

3,092
Direct costs
1,402
Employee costs
305
R&D
Other expenses
872
Total operating expenses
2,578
EBITDA
514
Depreciation and amortisation 7 9
EBIT
435
Interest expenses
161
Other income
15
Profit before tax
289
Provision for tax
69
Core profit
220
Extraordinary items
(6)
Profit after tax
226
Adjusted net profit
225
EPS (INR) basic
18.9
Diluted equity shares (mn)
12
Tax rate (%)
23.7
3,492
1,271
427
4,077
1,455
542
5,049
1,729
637
1,144
2,841
651
142
509
236
25
298
44
254
0
254
254
21.6
12
14.7
1,308
3,306
771
207
564
202
25
388
48
340
0
340
340
28.8
12
12.3
1,719
4,085
963
247
716
178
28
566
59
507
0
507
507
43.0
12
10.3
FY09
FY10
FY11
81.4
4.1
6.7
18.6
7.3
81.1
5.1
4.9
18.9
8.3
80.9
4.9
3.5
19.1
10.0
Common size metrics as % of net revenues

Year to March
FY08
Operating expenses
Depreciation and Amortization
Interest expenditure
EBITDA margins
Adj. Net profit margins
Growth metrics (%)

Year to March
Revenues
EBITDA
PBT
Net profit
EPS
Cash flow statement

Year to March
Net profit
Depreciation
Gross cash flow
Less:Changes in WC
Operating cash flow
Less: Capex
Free cash flow
83.4
2.5
5.2
16.6
7.3
FY08
FY09
FY10
FY11
19.9
29.4
49.0
53.6
53.6
12.9
26.7
3.2
13.1
13.8
16.8
18.6
30.0
33.6
33.6
23.8
24.9
46.0
49.4
49.4
FY08
FY09
FY10
(INR mn)
FY11
225
79
303
(113)
191
(237)
(46)
254
142
396
(50)
346
(509)
(163)
340
207
547
404
951
(501)
450
507
247
755
93
848
(405)
443
(INR mn)
As on 31st March
FY08
FY09
FY10
FY11
118
1,231
1,349
1,735
3
3,087
1,018
239
85
928
868
58
375
2,228
426
512
1,716
29
3,087
262
118
1,453
1,571
2,502
0
4,073
1,383
552
85
1,039
1,001
81
452
2,573
455
513
2,060
(6)
4,073
345
118
1,731
1,849
2,280
0
4,129
1,685
470
85
1,196
967
148
400
2,712
693
769
1,942
(53)
4,129
350
118
2,170
2,288
1,906
0
4,195
1,842
470
85
1,131
1,040
148
506
2,825
809
918
1,907
(109)
4,195
356
FY08
FY09
FY10
FY11
ROAE (%) (on adjusted profits) 17.6

ROACE (%)
16.5
Inventory days
213.0
Debtors days
91.7
Payable days
94.2
Cash conversion cycle
210.4
Current ratio
4.4
Debt/EBITDA
3.4
Debt/equity
1.3
17.4
14.5
282.5
97.7
126.5
253.6
5.0
3.8
1.6
19.9
14.2
280.3
88.1
144.0
224.4
3.5
3.0
1.2
24.5
17.8
245.7
72.6
158.6
159.6
3.1
2.0
0.8
FY08
FY09
FY10
FY11
19.0
53.6
25.3
20.5
1.5
2.0
12.3
21.5
13.1
33.6
18.2
1.1
2.0
10.8
28.8
33.6
46.4
13.6
1.1
1.7
8.7
43.0
49.4
64.0
9.1
1.1
1.3
6.6
Equity capital
Reserves & surplus
Shareholders funds
Borrowings
Minority Interest
Sources of funds
Net block
Capital Work in Progress
Investments and goodwill
Inventories
Sundry debtors
Cash and equivalents
Other current assets
Total current assets
Sundry creditors
Total CL & provisions
Net current assets
Net deferred tax
Uses of funds
Adjusted BV per share (INR)
Ratios
Year to March
Valuation parameters
Year to March
Diluted EPS (INR)
Y-o-Y growth (%)
CEPS
Diluted P/E (x)
Price/BV (x)
EV/Sales (x)
EV/EBITDA (X)
Edelweiss
Securities Limited
Limited
Company Profile
AXIS BANK
Buoyant growth
February 7, 2012
Banking and Financial Services
Key takeaways
EDELWEISS 4D RATINGS
Major discussion has been around its infra and non-fund based exposure.
Management indicated that government seems to be warming up to take some
affirmative action in power sector particularly on the SEB front and fuel linkage
issue. On non-fund based exposure it reiterated that as a lead syndicator it issues
bank guarantees/LCs on behalf of consortium banks with back-to-back
arrangements.
With respect to priority sector lending requirement, it highlighted that this time
agri loan proportion will be similar to FY11 (against its guidance of inching it up
by 25-30bps every year) and it will have to resort to RIDF investments.
Proposes to open 250 branches in the next 12 months (including RBIs requirement
for Tier 5 and 6 cities).
Absolute Rating
BUY
Rating Relative to Sector
Outperformer
Risk Rating Relative to Sector Medium

Sector Relative to Market
Equalweight
MARKET DATA (R : AXBK.BO, B: AXSB IN)

CMP
: INR 1,114
Target Price
: INR 1,372
52-week range (INR)
: 1,460 / 784
Share in issue (mn)
: 412.6
: 460 / 9,151
Avg. Daily Vol. BSE/NSE (000) : 2,171.0
Will gradually increase share of retail in the overall loan portfolio. Will further
build branch based origination capabilities for retail loans. In retail, secured
loans will continue to be a growth driver. On the corporate side, growth will be
primarily working capital related and draw-downs from past sanctions.
Expects credit cost to be around 80bps. No chunky or lumpy restructuring pipeline.
INR70mn of restructured has slipped into NPL in Q3FY12.
Margins are higher than the guided range and should normalize to 3.25-3.5%.

Promoters*
: 37.5
MFs, FIs & Banks
FIIs
: 31.4
Others
: 24.4

6.7
Nil
Investment conclusion
Led by a healthy NIM and fee income performance coupled with a benign asset
quality (against consensus expectation), we anticipate ~21% earnings CAGR over
FY12 14E. The banks strategy of moderating the pace of loan growth is already
reflecting in more formidable retail franchise and consistently higher RoA of 1.6%.
Key risks
Change in management may affect the pace of growth and profitability in the near
term. Deterioration of macro environment can result in higher slippages and slow
down business growth.
PRICE Performance (%)

Stock
Nifty
EW BFSI
Index
15.8
1 month
27.7
9.6
3 months
(4.5)
0.3
3.9
12 months
(16.5)
(7.1)
(6.2)
Financials
Year to March
Net revenues (INR mn)
Net rev growth (%)
Net profit (INR mn)
Shares outstanding (mn)
Diluted EPS (INR)
EPS growth (%)
Diluted P/E (x)
Price to adj. book (x)
ROAE (%)
FY10
FY11
FY12E
FY13E
89,509
36.0
25,143
405
62.1
23.1
17.9
2.9
19.1
111,951
25.1
33,880
411
82.5
33.0
13.5
2.4
19.3
136,267
21.7
41,874
411
102.0
23.6
10.9
2.1
20.2
163,502
20.0
49,564
411
120.7
18.4
9.2
1.8
20.3

Nilesh Parikh
+91-22- 4063 5470
nilesh.parikh@edelcap.com
Kunal Shah
+91-22- 4040 7579
kunal.shah@edelcap.com
Suruchi Chaudhary
+91-22-6623 3316
suruchi.chaudhary@edelcap.com
Balance sheet
Income statement
Year to March
(INR mn)
FY10
FY11
FY12E
FY13E
Interest income
116,380
Interest expenses
66,335
Net interest income
50,045
Non interest income
39,465
- Fee & forex income
30,333
- Misc. income
2,030
- Investment profits
7,102
Net revenues
89,509
Operating expense
37,097
- Employee exp
12,558
- Other opex
24,539
Preprovision profit
52,412
Provisions
13,916
- Loan loss provisions
13,570
- Investment depreciation
(222)
- Other provisions
568
PBT
38,496
Taxes
13,353
PAT
25,143
Diluted EPS
62.1
DPS
12.0
Payout ratio (%)
22.6
151,548
85,918
65,630
46,321
39,210
3,518
3,593
111,951
47,794
16,139
31,655
64,157
12,832
9,551
993
2,288
51,325
17,445
33,880
82.5
14.0
19.8
209,366
128,731
80,635
55,632
49,629
3,253
2,750
136,267
59,605
23,378
36,227
76,662
14,626
13,576
800
250
62,036
20,162
41,874
102.0
17.0
18.4
243,666
149,947
93,719
69,782
62,542
3,741
3,500
163,502
69,057
27,626
41,432
94,444
21,016
20,266
500
250
73,429
23,865
49,564
120.7
20.0
18.3
Growth metrics (%)

Year to March
FY10
FY11
FY12E
FY13E
NII growth
Fees growth
Opex growth
PPOP growth
PPP growth
Provisions growth
PAT growth
35.8
19.7
29.8
31.5
40.7
48.1
38.5
31.1
29.3
28.8
33.7
22.4
(29.6)
34.8
22.9
26.6
24.7
22.0
19.5
42.1
23.6
16.2
26.0
15.9
23.0
23.2
49.3
18.4
Operating ratios (%)

Year to March
FY10
FY11
FY12E
FY13E
8.6
6.7
7.3
3.1
4.4
0.0
5.9
2.9
41.4
34.7
8.4
6.5
7.4
3.2
4.4
4.5
6.4
2.9
42.7
34.0
9.5
6.8
8.0
3.07
5.2
5.1
6.8
2.8
43.7
32.5
9.1
6.6
7.6
2.94
5.0
4.9
6.5
2.7
42.2
32.5
Yield on advances
Yield on investments
Yield on assets
Net interest margins
Cost of funds
Cost of deposits
Cost of borrowings
Spread
Cost-income
Tax rate
(INR mn)
As on 31st March
FY10
Liabilities
Equity capital
Reserves
Net worth
Sub bonds/pref cap
Deposits
Borrowings
Other liabilities
Total
Assets
Loans
Investments
Gilts
Others
Cash & equi
Fixed assets
Other assets
Total
Balance sheet ratios (%)
Credit growth
Deposit growth
EA growth
SLR ratio
C-D ratio
Low-cost deposits
Gross NPA ratio
Net NPA ratio
Provision coverage
Incremental slippage
Net NPA / Equity
Capital adequacy
- Tier 1
Book value
FY11
FY12E
FY13E
4,052
4,106
4,106
4,106
156,393
185,883
220,065
260,581
160,444
189,988
224,171
264,686
71,558
69,932
71,932
73,932
1,413,002 1,892,378 2,287,450 2,696,121
100,137
192,746
297,053
421,212
61,335
82,089
84,013
94,259
1,806,477 2,427,134 2,964,619 3,550,211
1,043,431 1,424,078 1,708,894 2,050,673
341,959
441,979
599,605
692,048
217,789
277,937
345,041
428,920
152,064
214,087
243,375
302,469
12,224
22,732
22,019
20,996
39,009
46,321
45,686
55,105
1,806,477 2,427,134 2,964,619 3,550,211
ROA decomposition (%)

Year to March
Net interest income/Assets
Fees/Assets
Investment profits/Assets
Net revenues/Assets
Operating expense/Assets
Provisions/Assets
Taxes/Assets
Total costs/Assets
ROA
Equity/Assets
ROAE
Year to March
Diluted EPS (INR)
EPS growth (%)
Book value per share (INR)
Adj. book value/share (INR)
Diluted P/E (x)
Price/ BV (x)
Price/ ABV (x)
Dividend yield (%)
23.7
20.4
22.8
22.6
83.6
46.7
1.1
0.4
68.2
1.9
2.6
15.8
11.2
396.0
35.8
33.9
34.3
21.2
84.9
41.1
1.0
0.3
74.3
1.2
2.2
17.9
13.2
462.8
20.6
20.9
22.9
23.2
84.7
39.5
1.1
0.5
61.0
1.5
3.7
16.9
13.0
546.0
20.6
17.9
19.9
22.2
86.6
39.7
1.3
0.5
65.2
1.7
4.0
16.2
12.8
644.7
FY10
FY11
FY12E
FY13E
3.1
2.0
0.4
5.6
(2.3)
(0.9)
(0.8)
(4.0)
1.6
8.2
19.1
3.2
2.1
0.2
5.4
(2.3)
(0.6)
(0.8)
(3.8)
1.6
8.5
19.3
3.1
2.0
0.1
5.2
(2.3)
(0.6)
(0.8)
(3.6)
1.6
7.9
20.2
2.9
2.1
0.1
5.1
(2.2)
(0.7)
(0.7)
(3.6)
1.6
7.7
20.3
FY10
FY11
FY12E
FY13E
62.1
23.1
396.0
388.8
17.9
2.8
2.9
1.1
82.5
33.0
462.8
455.8
13.5
2.4
2.4
1.3
102.0
23.6
546.0
531.7
10.9
2.0
2.1
1.5
120.7
18.4
644.7
626.8
9.2
1.7
1.8
1.8
Edelweiss
Securities Limited
Limited
Company Profile
BAJAJ ELECTRICALS
Domestic consumer play
February 7, 2012
Engineering and Capital Goods
Key takeaways
Management reiterated its view on not splitting the consumer business and
engineering and projects business, given the synergies.
Absolute Rating
BUY
Outperformer
The company indicated that there is no slowdown in the consumer business and
estimates growth at 20-25%. Moderate growth in fans and luminaries at 10-15%.

Underweight
The company is not too worried of the competition as the market itself is expanding.
MARKET DATA (R : BJEL.BO, B: BJE IN)
After sales service is the key differentiator given Bajaj Electricals provides with
two years warranty.
CMP
: INR 170
Target Price
: INR 240
52-week range (INR)
: 296 / 132
Share in issue (mn)
: 99.6
: 17 / 336
With its consumer-facing business growing steadily, the company is now more
focused on its E&P division. By virtue of tie ups with global majors like Morphy
Richards (UK) and Nardi (Italy), the company competes with premium players like
Philips and Kenstar, and has been able to create a niche in the premium segment.
Its products like mixers, irons, OTG, water heaters and room coolers are leading
products in their respective product ranges. The companys distribution reach is
far wider than its competitors, and is efficiently managed in terms of logistics and
supply chain. BJE outsources most of its manufacturing. It has long-term relations
with its vendors, dating back several decades, and has exclusive arrangements
with 70% vendors. With such a set up in place, the company is able to focus on its
core competencies, i.e., marketing and distribution.

Promoters*
: 65.6
MFs, FIs & Banks
9.4
FIIs
6.9
Others
: 18.1

Nil
Key risks
Overdependence on vendors or vendor buy out.

Stock
Intense competition in the consumer durable segment can squeeze margins.

Increase in prices of key raw materials such as steel and zinc can hamper margins
of the E&P division.
Nifty
EW Capital
Goods Index
16.1
1 month
20.8
9.6
3 months
(15.1)
0.3
(7.1)
12 months
(24.4)
(7.1)
(25.5)
Financials
Year to March
Revenues (INR mn)
Rev. growth (%)
EBITDA (INR mn)
Net profit (INR mn)
EPS (INR)
EPS growth (%)
Diluted P/E (x)
EV/EBITDA (x)
ROE (%)
FY10
FY11
FY12E
FY13E
22,286
26.2
2,499
1,221
98
12.5
21.0
13.5
6.8
33.0
27,408
23.0
2,598
1,488
99
15.1
20.2
11.2
6.5
26.9
31,778
15.9
2,475
1,291
99
13.1
(13.2)
12.9
7.3
19.6
38,350
20.7
3,451
1,895
99
19.2
46.8
8.8
5.3
24.1

Rahul Gajare
+91-22- 4063 5561
rahul.gajare@edelcap.com
Amit Mahawar
+91-22- 4040 7451
amit.mahawar@edelcap.com
Swarnim Maheshwari
+91-22- 4040 7418
swarnim.maheshwari@edelcap.com
Balance sheet
Income statement
Year to March
(INR mn)
FY10
FY11
FY12E
FY13E

22,286
Direct costs
16,524
Employee costs
972
Other expenses
2,292
19,787
EBITDA
2,499
Depreciation & amortisation
157
EBIT
2,342
Interest expenses
314
Other income
29
Profit before tax
2,057
Provision for tax
835
Core profit
1,221
Extraordinary items
(50)
Profit after tax
1,171
PAT after minority interest
1,171
Adjusted net profit
1,171
EPS (INR) basic
12.5
98
Dividend payout (%)
22.4
Tax rate (%)
40.6
27,408
20,729
1,224
2,856
24,810
2,598
126
2,472
291
57
2,239
751
1,488
(50)
1,438
1,438
1,438
15.1
99
21.8
33.5
32,853
24,806
1,438
3,646
29,891
2,963
135
2,828
466
55
2,416
834
1,583
1,583
1,583
1,583
16.0
99
20.5
34.5
38,848
29,063
1,660
4,349
35,072
3,776
149
3,627
521
54
3,161
1,106
2,055
2,055
2,055
2,055
20.8
99
15.8
35.0
FY11
FY12E
FY13E
90.5
0.5
1.1
9.5
5.4
91.0
0.4
1.4
9.0
4.8
90.3
0.4
1.3
9.7
5.3

Year to March
FY10
Operating expenses
88.8
Depreciation and Amortization 0.7
1.4
EBITDA margins
11.2
Net profit margins
5.5
Growth metrics (%)

Year to March
Revenues
EBITDA
PBT
Net profit
EPS
Cash flow statement

Year to March
Net profit
Depreciation
Deferred tax
Others
Gross cash flow
Less:Changes in WC
Operating cash flow
Less: Capex
Free cash flow
FY10
FY11
FY12E
FY13E
26.2
36.1
46.8
36.6
21.0
23.0
3.9
8.9
21.8
20.2
19.9
14.1
7.9
6.4
6.4
18.2
27.4
30.8
29.8
29.8
FY10
FY11
FY12E
(INR mn)
FY13E
1,221
157
(5)
243
1,616
1,564
52
395
(343)
1,488
126
(20)
260
1,853
828
1,025
627
398
1,583
135
466
2,184
2,237
(53)
200
(253)
2,055
149
521
2,724
1,726
998
250
748
(INR mn)
As on 31st March
FY10
FY11
FY12E
FY13E
Equity capital
195
Reserves & surplus
4,749
Shareholders funds
4,944
Secured loans
684
Borrowings
1,518
Sources of funds
6,462
Gross block
1,700
Depreciation
683
Net block
1,016
Capital work in progress
1
Total fixed assets
1,017
Investments
366
Inventories
2,094
Sundry debtors
7,507
612
Loand & Advances
1,777
11,990
Sundry creditors and others 6,273
Provisions
643
6,916
Net current assets
5,074
Net deferred tax
5
Uses of funds
6,462
32
198
5,913
6,111
483
1,165
7,275
2,302
769
1,533
1,533
366
2,946
10,654
481
1,668
15,749
9,661
731
10,392
5,357
20
7,276
52
198
7,172
7,370
1,483
2,165
9,534
2,502
904
1,598
1,598
366
3,874
13,290
438
1,834
19,435
11,561
324
11,885
7,550
20
9,534
78
198
8,902
9,100
1,683
2,365
11,465
2,752
1,052
1,699
1,699
366
4,419
15,705
541
2,018
22,682
12,979
324
13,303
9,379
20
11,465
109
FY10
FY11
FY12E
FY13E
33.0
45.1
43
107
127
23
1.7
0.6
7.4
22.7
0.3
26.9
38.1
44
121
140
25
1.5
0.4
8.5
21.5
0.2
23.5
35.3
50
133
156
27
1.6
0.7
6.1
21.0
0.3
25.0
35.9
52
136
154
34
1.7
0.6
7.0
23.6
0.3
FY10
FY11
FY12E
FY13E
12.4
39.8
13.8
13.5
6.6
0.8
6.8
15.0
21.1
16.2
11.2
5.4
0.6
6.5
13.0
(13.2)
14.3
12.9
4.7
0.6
7.3
19.2
46.8
20.5
8.8
3.8
0.5
5.3
Ratios
Year to March
ROAE (%) (on adjusted profits)
ROACE (%)
Inventory days
Debtors days
Payable days
Current ratio
Debt/EBITDA
Interest coverage
Fixed assets t/o (x)
Debt/equity
Year to March
Diluted EPS (INR)
Y-o-Y growth (%)
CEPS
Diluted P/E (x)
Price/BV (x)
EV/Sales (x)
EV/EBITDA (X)
Edelweiss
Securities Limited
Limited
Company Profile
BHUSHAN STEEL
In expansion mode
February 7, 2012
Metals & Mining
Key takeaways
Phase III 2.9mtpa expansion on track for completion by October 2012
Absolute Rating
HOLD
Performer
Bhushan Steel reiterated completion of 2.9mtpa (crude steel) steel expansion by

October 2012. H2FY13E to post volumes of ~0.8mt from this expansion (our
assumption is nil). FY13 and FY14 HRC production guidance is 2.35mt and 3.7mt,
respectively
Targeting FY13 EBITDA of INR 40 bn, a ~33% YoY growth

Underweight
MARKET DATA (R : BSSL.BO, B: BHUS IN)
The company guided for FY13 EBITDA of INR40bn (against our INR28.5bn estimate)
led by volume growth from Phase III expansion. By FY15E, EBITDA expected to grow
further to INR60bn led by HRC volumes rising to 4mt.
Adding downstream capacity of ~2.6mtpa over next three years
CMP
: INR 358
Target Price
: INR 382
52-week range (INR)
: 530 / 296
Share in issue (mn)
: 212.4
: 76 / 1,514
Bhushan Steel has already completed 0.5mtpa ERW pipe plant at Khopoli. CR mill
of 0.35mtpa capacity is expected in Orissa in April 2013 while high-end CR mill of
1.8mtpa capacity is likely to be launched for completion in FY15.
Captive mine commencement ~2 years away
The company has been allotted iron ore and thermal coal mines with reserves of
70mt and 325mt, respectively, but with the slow approval process would take 1824 months to commence. For the thermal coal mine, land acquisition process has
commenced.
Promoters*
: 69.9
MFs, FIs & Banks
0.8
FIIs
1.8
Others
: 27.5

: 19.7
The expected ramp up of the 2.3mtpa steel capacity will drive volumes over the
next two years and enable BSL to further strengthen its position in the auto and
white goods sectors. The backward integration facility right up to the metallic
stage will give a fillip to EBITDA margin as dependence on external HR will be
eliminated. Moreover, the pure play exposure to the auto/ white goods industry
places BSL in a competitive position compared to peers.
1 month
3 months
Key risks
12 months
Delay in ramping up of capacities.
Stock
Nifty
EW Metals
and Mining
Index
10.9
9.6
17.3
7.4
0.3
3.1
(14.7)
(7.1)
(10.5)
Lack of captive raw material.
Financials
Year to March
Revenues (INR mn)
Rev. growth (%)
EBITDA (INR mn)
Net profit (INR mn)
EPS (INR)
EPS growth (%)
Diluted P/E (x)
EV/EBITDA (x)
ROE (%)
FY10
FY11
FY12E
FY13E
56,404
13.8
14,527
8,458
212
39.8
100.8
9.0
12.7
26.5
70,005
24.1
20,304
10,051
212
47.3
18.8
7.6
11.8
20.5
96,188
37.4
28,430
9,437
212
44.4
(6.1)
8.1
9.2
15.0
96,754
0.6
28,546
8,812
212
41.5
(6.6)
8.6
9.9
12.3

Prasad Baji
+91-22-4040 7415
prasad.baji@edelcap.com
Navin Sahadeo
+91-22-6623 3473
navin.sahadeo@edelcap.com
Balance sheet
Income statement
Year to March
(INR mn)
FY10
FY11
FY12E
FY13E
Net revenue
56,404
Accretion to stock
(2,955)
Raw material costs
38,576
Purchase of goods
64
Employee expenses
1,409
Power & fuel
2,150
SGA & other expenses
2,632
41,876
EBITDA
14,527
Depreciation & amortisation 2,091
EBIT
12,436
Interest expenses
2,100
Other income
1,178
Profit before tax
11,514
Provision for tax
3,056
Core profit
8,458
Profit after tax
8,458
Profit after minority interest 8,458
Basic shares outstanding (mn) 212.4
Basic EPS
39.8
Diluted shares (mn)
212.4
Diluted EPS
39.8
Dividend per share (INR)
0.5
Dividend payout (%)
1.3
Tax rate
26.5
70,005
(4,718)
42,769
2,221
5,220
4,208
49,701
20,304
2,778
17,525
4,464
695
13,756
3,706
10,051
10,051
10,051
212.4
47.3
212.4
47.3
0.5
1.1
26.9
86,166
40,236
2,244
6,235
11,637
60,351
25,815
6,202
19,612
9,294
650
10,968
2,961
8,007
8,007
8,007
212.4
37.7
212.4
37.7
0.7
1.9
27.0
90,133
42,631
2,266
6,583
12,213
63,693
26,440
6,437
20,003
10,290
715
10,428
2,816
7,613
7,613
7,613
212.4
35.8
212.4
35.8
0.7
2.0
27.0

Year to March
FY10
Operating expenses
Depreciation
EBITDA margins
Net profit margins
Growth metrics (%)

Year to March
Revenues
EBITDA.
PBT
Net profit
EPS
Cash flow statement

Year to March
Net profit
Add:Non cash charge
Others
Gross cash flow
Less: Changes in W. C.
Operating cash flow
Less: Capex
Free cash flow
FY11
FY12E
FY13E
74.2
3.7
3.7
25.8
15.0
71.0
4.0
6.4
29.0
14.4
70.0
7.2
10.8
30.0
9.3
70.7
7.1
11.4
29.3
8.4
FY10
FY11
FY12E
FY13E
13.8
41.1
105.3
100.8
100.8
24.1
39.8
19.5
18.8
18.8
23.1
27.1
(20.3)
(20.3)
(20.3)
4.6
2.4
(4.9)
(4.9)
(4.9)
FY10
FY11
FY12E
(INR mn)
FY13E
9,653
2,091
1,755
13,500
9,529
3,970
29,042
(25,072)
11,037
2,778
4,942
18,758
8,251
10,507
56,460
(45,953)
8,007
6,202
8,644
22,853
(10,504)
33,358
35,000
(1,642)
7,613
6,437
9,575
23,624
283
23,341
35,000
(11,659)
11
(INR mn)
As on 31st March
FY10
FY11
FY12E
FY13E
Equity capital- Voting shares

425
Preference share capital
367
Reserves & surplus
39,125
Shareholders funds
39,917
Secured loans
106,101
Unsecured loans
7,940
Borrowings
114,041
Deferred tax liability
3,295
Sources of funds
157,253
Gross block
36,859
Depreciation
16,066
Net block
20,793
CWIP
111,093
Total fixed assets
131,886
Investments
3,700
Loans and advances
9,534
Inventories
19,627
Sundry debtors
7,339
1,202
37,702
Provisions
365
16,036
Net current assets
21,666
Uses of funds
157,253
BV per share (INR)
188
425
687
57,853
58,964
150,659
15,267
165,926
6,983
231,874
144,244
18,581
125,663
73,932
199,595
2,777
13,307
31,684
4,835
351
50,177
20,192
484
20,676
29,501
231,874
278
425
687
65,684
66,796
183,859
4,275
188,134
6,983
261,913
144,244
24,784
119,460
108,932
228,393
3,610
13,307
22,047
4,721
11,264
51,339
20,945
484
21,429
29,910
261,913
315
425
687
73,121
74,233
203,359
4,275
207,634
6,983
288,850
155,137
31,220
123,917
133,039
256,956
3,610
13,307
23,360
4,939
9,355
50,960
22,192
484
22,676
28,284
288,850
350
FY10
FY11
FY12E
FY13E
26.5
9.6
163
44
150
57
7.9
2.4
2.9
2.9
20.5
9.2
304
25
172
85
8.2
2.4
2.8
2.8
12.9
8.0
200
20
187
25
7.3
2.4
2.8
2.8
10.9
7.4
200
20
185
25
7.9
2.2
2.8
2.8
Year to March
FY10
FY11
FY12E
FY13E
EPS (INR)
Y-o-Y growth (%)
CEPS (INR)
P/E (x)
Price/BV(x)
Market cap/Sales (x)
EV/Sales (x)
EV/EBITDA (x)
Dividend yield (%)
39.8
100.8
49.7
9.0
1.9
1.3
3.3
12.7
0.1
47.3
18.8
60.4
7.6
1.3
1.1
3.4
11.8
0.1
44.4
(6.1)
73.6
8.1
1.1
0.8
2.7
9.2
0.2
41.5
(6.6)
71.8
8.6
1.0
0.8
2.9
9.9
0.2
Ratios
Year to March
ROAE (%)
ROACE (%)
Inventory (days)
Debtors (days)
Payable (days)
Cash conversion cycle (days)
Debt/EBITDA
Current ratio
Debt/ Equity
Adjusted debt/Equity
Edelweiss
Securities Limited
Limited
Company Profile
CAIRN INDIA
CY13 exit production guidance at 210-240 kbpd
February 7, 2012
Oil, Gas and Services
Key takeaways
CY13 exit crude oil prodn. at 210-240kbpd; pipeline not a bottleneck
Absolute Rating
HOLD
Performer
Crude oil production is likely to increase to 210-240kbpd, (150+kbpd - Mangala,

40+kbpd Bhagyam, 20+kbpd Aishwarya) by CY13 end. Pipeline capacity is not
a bottleneck for increasing the production as the same can be managed by
increasing the number of pumping stations (required approvals), which require
less time and capex.

Overweight
MARKET DATA (R : CAIL.BO, B: CAIR IN)
Dividend seems near, but only after consolidation; better Q4 pricing

Cairn holds cash of USD1.4bn and will be generating ~USD1bn of FCF in FY13. It is
in final stages DGH approval for consolidation of its foreign subsidiaries. Only
after the same will it announce the dividend. Q4FY12 pricing will be better due to
better fuel oil cracks.
CMP
: INR 366
Target Price
: INR 342
52-week range (INR)
: 372 / 250
Share in issue (mn)
: 1,903.0
: 697 / 13,863
FY13E net capex at USD800mn; triggers exist

FY13 capex guidance of USD800mn (net), of which 70% for MBA development and
balance for Rajasthan exploration. Sri Lanka exploration capex at USD200mn
(USD150mn spent till date). Triggers to watch out areMangala approval for 150
kbpd, Aishwarya FDP approval, FDP submission and approval for Bhagyam and
Aishwarya fields.
We have a negative view on crude on the back of weakening demand and rising
supply from Libya and US and estimate FY13 Brent at USD95/bbl.
Key risks
Fall in crude prices or a higher discount to Brent. Delay in getting approvals to
ramp up Mangala. Utilization of excess cash.

Promoters*
: 59.0
MFs, FIs & Banks
8.2
FIIs
6.2
Others
: 26.5

Nil

Stock
Nifty
EW O &G
Index
1 month
8.9
9.6
8.0
3 months
18.5
0.3
(1.1)
12 months
5.0
(7.1)
(5.8)
Financials
Year to March
Net Revenues(INR Mn)
EBITDA (INR Mn)
Net profit (INR Mn)
EPS (INR)
P/E (x)
EV/EBITDA (x)
ROAE (%)
FY10
FY11
FY12E
FY13E
16,230
9,805
10,511
5.5
66.5
71.6
3.2
102,779
84,117
63,344
33.2
11.0
7.9
17.1
155,252
109,136
87,114
45.8
8.0
5.9
19.9
168,367
112,244
89,498
47.0
7.8
5.3
17.5

Niraj Mansingka, CFA

+91 22 6623 3315
niraj.mansingka@edelcap.com
Balance sheet
Income statement
Year to March
(INR mn)
FY10
FY11
FY12E
FY13E
Net revenues
16,230
Increase/decrease in stocks (366)
Statutory levies
1,466
Lifting costs
2,782
Production expenses
4,248
Employee expenses
1,441
Other expenses
1,102
Total expenses
6,791
EBITDAX
9,805
Recouped costs
3,570
EBIT
6,235
Financing costs
148
Other income
4,077
Profit before tax
10,163
Current tax
2,216
Deferred tax
(1,087)
Other taxes
(1,477)
Total tax
(348)
Core profit
10,511
Extraordi./ prior period items
0
Profit after tax
10,511
Profit after minority int.
10,511
Basic shares (mn)
1,897
EPS - basic (INR)
5.5
Diluted shares (mn)
1,911
EPS - diluted (INR)
5.5
CEPS
6.9
DPS
-
102,779
(264)
9,820
5,350
15,170
1,409
2,346
18,925
84,117
13,596
70,521
2,909
1,288
68,900
15,611
(11,214)
1,159
5,556
63,344
0
63,344
63,344
1,902
33.3
1,908
33.2
34.6
-
164,113
0
39,894
5,358
45,252
1,442
2,416
49,111
115,002
16,453
98,549
2,603
2,771
98,717
19,281
(12,371)
0
6,910
91,807
(9,600)
82,207
82,207
1,903
48.3
1,903
48.3
50.4
4.3
161,790
0
44,865
5,885
50,751
1,495
2,489
54,734
107,056
17,622
89,434
2,055
4,475
91,854
17,940
(11,511)
0
6,430
85,424
0
85,424
85,424
1,903
44.9
1,903
44.9
48.1
6.7
FY11
FY12E
FY13E
14.8
2.3
81.8
13.2
2.8
61.6
27.6
1.5
70.1
10.0
1.6
50.1
31.4
1.5
66.2
10.9
1.3
52.8

Year to March
FY10
Direct costs
Other expenses
EBITDA margins
Interest
Net profit margin
Growth metrics (%)

Year to March
26.2
6.8
60.4
22.0
0.9
64.8
FY10
FY11
FY12E
FY13E
Revenues
EBITDA
PBT
Net profit
EPS
13.3
7.8
2.9
30.8
31.0
533.3
757.9
577.9
502.6
503.8
59.7
36.7
43.3
44.9
45.3
(1.4)
(6.9)
(7.0)
(7.0)
(7.0)
Cash flow statement

Year to March
FY10
FY11
FY12E
(INR mn)
FY13E
Net profit
10,511
Add: Depreciation
3,570
Add: Deferred tax
(1,087)
Add: Others
(3,881)
Gross Cash flow
9,114
Less: Changes in wor. capital 8,357
Opertaing cash flow
757
Less: Capex
31,122
Free Cash flow
(30,365)
63,344
13,596
(11,214)
1,545
67,271
5,861
61,410
32,791
28,619
82,207
16,453
(12,371)
(2,225)
84,064
20,216
63,848
29,527
34,320
85,424
17,622
(11,511)
(5,450)
86,086
6,483
79,603
21,490
58,113
13
(INR mn)
As on 31st March
Total equity capital
Stock option outstanding
Reserves & surplus
Shareholder's equity (A)
Minority interest (B)
Secured loans
Unsecured loans
Total debt (C)
Deferred tax liability (D)
Sources of funds (A+B+C+D)
Gross fixed assets
Depreciation
Net fixed assets
Capital WIP
Total fixed assets (A)
Investments (B)
Inventories
Accounts receivable
Cash and cash equivalents
Loans and advances
Current assets (C)
Current liabilities
Provisions
Current lia. & provis. (D)
Net current assets (E)
Miscellaneous exp. (F)
Uses of funds (A+B+E+F)
Book value per share
FY10
FY11
FY12E
FY13E
18,970
464
319,250
338,683
19,019
555
383,358
402,932
19,027
0
458,490
477,516
19,027
0
531,100
550,127
34,007
0
34,007
4,453
377,144
261,791
2,335
259,457
91,635
351,092
17,124
2,909
3,067
9,294
8,318
145
23,734
9,869
4,937
14,806
8,928
0
377,144
169
13,282
13,500
26,782
5,612
435,326
346,398
13,120
333,278
39,819
373,097
10,944
3,277
14,829
44,847
16,269
386
79,608
12,638
16,628
29,266
50,343
943
435,326
202
10,000
1
10,001
(6,759)
480,759
370,812
28,073
342,739
44,933
387,671
12,000
4,103
22,976
55,376
32,823
821
116,098
13,129
21,881
35,010
81,087
0
480,759
241
5,000
1
5,001
(18,269)
536,858
387,182
44,196
342,986
50,053
393,039
12,000
4,045
22,651
99,625
40,448
809
167,577
12,943
22,815
35,758
131,819
0
536,858
279
FY10
FY11
FY12E
FY13E
1.7
3.2
2.8
1.6
65
222
(105)
0.1
3.5
0.1
18.0
17.1
15.6
2.7
12
45
(1)
0.1
0.3
0.1
22.1
20.9
20.0
3.3
9
29
22
0.0
0.1
0.0
18.0
16.6
16.8
4.7
9
29
31
0.0
0.0
0.0
FY10
FY11
FY12E
FY13E
5.5
31.0
6.9
66.5
2.2
43.3
71.6
0.0
33.2
503.8
34.6
11.0
1.8
6.5
7.9
0.0
45.8
37.9
47.8
8.0
1.5
4.1
5.9
1.1
47.0
2.7
50.3
7.8
1.3
3.5
5.3
1.9
Ratios
Year to March
ROACE
ROAE (%)
ROA
Current ratio
Inventory (days)
Payables (days)
Debt-equity (x)
Debt/EBITDA
Adjusted debt/equity
Year to March
Diluted EPS (INR)
Y-o-Y growth (%)
CEPS (INR)
Diluted P/E (x)
P/BV (x)
EV/Sales (x)
EV/EBITDA (x)
Dividend yield(%)
Edelweiss
Securities Limited
Limited
Company Profile
COX & KINGS

All eyes on HBR
February 7, 2012
Hotels
Key takeaways
EDELWEISS RATINGS
Cox and Kings (CNK) expects synergies in business as combined group buying
(~INR65bn) will improve overall margins going forward.
Absolute Rating
HOLD
Investment Characteristics
Growth
Holiday Breaks (HBR) is in talks with public schools to start providing educational
tours facility at subsidized rates in UK. Current facilities of government are facing
budget cuts. Currently, HBRs educational centers are running at just 30% capacity
utilization.
CNK has the option to purchase the balance 50% stake of Menninger at EUR4050mn. The final pricing will be dependent on a formula based on various factors
such as sales achieved, PAT etc. Purchase could be executed during FY13-14.
The company may look for equity dilution to reduce the leverage (~INR33bn post
acquisition) as one of the options.
From the short-term perspective the companys goal is proper integration. From
the medium-term perspective the aim is to drive synergies, margins and reduce
leverage. Its long-term aim is to introduce HBR educational products in India.
MARKET DATA (R : COKI.BO, B: COXK IN)

CMP
: INR 185
Target Price
: INR 248
52-week range (INR)
: 248 / 152
Share in issue (mn)
: 136.5
: 25 / 504

Promoters*
: 58.7
MFs, FIs & Banks
Post acquisition of HBR, we believe working capital will turn negative in FY13 as
operations in UK are mostly retail based. CNK is looking for synergies from HBR in
terms of better purchasing power capacity, wider geographical reach and more
product offerings. Consistent innovation and the companys inorganic growth
strategy have provided CNK with higher growth rate.
FIIs
: 21.3
Others
: 13.9

Key risks
CNKs inability to drive volumes could lower its bargaining power with business
partners, deployment of further working capital in subsidiaries and other group
companies, unforeseen events like war or disease.
BSE Midcap
Index
Stock
6.2
Nil
Stock over
Index
1 month
15.0
10.4
(4.6)
3 months
(4.0)
(20.4)
(16.4)
12 months
(10.2)
(14.7)
(4.5)
Financials
Year to March
FY10
FY11
FY12E
FY13E
Revenues (INR mn)

Growth (%)
EBIDTA (INR mn)
Net profit (INR mn)
EPS (INR)
EPS growth (%)
Diluted P/E (x)
ROAE (%)
3,992
39.1
1,864
1,064
126
8.4
26.8
22.1
20.7
4,967
24.4
2,301
1,175
137
8.5
1.4
21.8
11.7
17,145
245.1
1,122
(1,711)
137
(12.6)
(248.8)
NA
(15.4)
43,555
154.0
7,508
2,779
137
20.2
NA
9.2
24.2

Manish Sarawagi
+91 22 4040 7575
manish.sarawagi@edelcap.com
Manav Vijay
+91 22 4063 5413
manav.vijay@edelcap.com
Balance sheet
Income statement
(INR mn)
Year to March
FY10
FY11
FY12E
FY13E

3,992
Employee cost
994
Advertisement expenditure
357
Other expenditure
776
2,127
EBITDA
1,864
Depreciation and amortisation 151
EBIT
1,714
Interest expenses
270
Other income
137
Profit before tax
1,581
Provision for tax
517
Core profit
1,064
Extraordinary items
284
Profit after tax
1,348
Less: Minority interests
(10)
1,338
EPS (INR) basic
8.4
126
Dividend payout (%)
5.5
Tax rate (%)
28
4,967
1,296
423
948
2,667
2,301
186
2,115
544
230
1,801
626
1,175
130
1,305
(15)
1,290
8
137
6.2
32
17,145
2,868
1,291
11,863
16,022
1,122
938
185
1,467
335
(948)
763
(1,711)
0
(1,711)
(15)
(1,726)
(13)
137
NA
33
43,555
6,414
3,106
26,527
36,047
7,508
1,532
5,976
2,615
395
3,755
976
2,779
0
2,779
(15)
2,764
20
137
5.7
26
FY11
FY12E
FY13E
53.7
3.7
11.0
46.3
23.7
93.5
5.5
8.6
6.5
(10.0)
82.8
3.5
6.0
17.2
6.4

Year to March
FY10
Operating expenses
EBITDA margins
Net profit margins
Growth metrics (%)

Year to March
Revenues
EBITDA
PBT
Net profit
EPS
Cash flow statement

Year to March
Net profit
Depreciation
Others
Gross cash flow
Less:Changes in WC
Operating cash flow
Less: Capex
Free cash flow
53.3
3.8
6.8
46.7
26.7
FY10
FY11
FY12E
FY13E
39.1
53.7
60.9
67.9
26.8
24.4
23.4
13.9
10.4
1.4
245.1
(51.2)
(152.6)
(245.6)
(248.8)
154.0
568.9
NA
NA
NA
FY10
FY11
FY12E
(INR mn)
FY13E
1,865
151
(87)
1,345
833
512
312
201
1,931
186
188
1,765
815
950
883
67
(948)
938
1,179
406
(9,145)
9,552
17,160
(7,608)
3,755
1,532
2,268
6,579
(1,984)
8,562
300
8,262
15
(INR mn)
As on 31st March
FY10
FY11
FY12E
FY13E
Equity capital
629
Reserves & surplus
7,472
Shareholders funds
8,101
Secured loans
2,946
Unsecured loans
2,097
Borrowings
5,043
Deferrex tax (net)
48
Sources of funds
13,192
Gross block
1,337
Depreciation
615
Net block
722
204
Investments
2,584
Inventories
83
Sundry debtors
3,021
3,747
2,715
9,565
Provisions
344
2,113
Net current assets
7,452
Net deferred tax
55
Uses of funds
13,192
64
683
11,396
12,079
5,443
3,000
8,443
91
20,613
1,841
819
1,021
641
2,112
86
4,142
9,613
3,826
17,667
2,681
350
3,031
14,636
28
20,613
88
683
9,522
10,204
31,693
3,000
34,693
91
44,989
19,001
1,757
17,243
641
3,112
282
5,167
852
4,826
11,127
14,047
350
14,397
(3,270)
28
44,989
75
683
12,137
12,819
27,693
3,000
30,693
91
43,604
19,301
3,289
16,011
641
4,112
716
5,966
1,687
6,326
14,696
18,764
350
19,114
(4,418)
28
43,604
94
FY10
FY11
FY12E
FY13E

ROACE (%)
21.4
Inventory days
5.4
Debtors days
244.3
Payable days
309.3
(59.6)
Current ratio
4.5
Debt/EBITDA
2.7
Interest coverage
6.4
5.5
Debt/equity
0.6
11.7
14.5
6.2
263.2
304.6
(35.2)
5.8
3.7
3.9
4.9
0.7
(15.4)
0.6
4
99
191
(87.5)
0.8
31
0.1
1.0
3.4
24.2
14.7
4
47
166
(115.3)
0.8
4
2.3
2.7
2.4
FY10
FY11
FY12E
FY13E
8.4
26.8
9.7
22.1
2.9
5.5
11.8
10.1
0.5
8.5
1.4
10.0
21.8
2.1
4.4
9.6
22.5
0.5
(12.6)
(248.8)
(5.7)
NA
2.5
3.3
49.9
3.4
1.1
20.2
NA
31.6
9.2
2.0
1.2
6.7
Ratios
Year to March
Year to March
Diluted EPS (INR)
Y-o-Y growth (%)
CEPS (INR)
Diluted P/E (x)
Price/BV(x)
EV/Sales (x)
EV/EBITDA (x)
EV/EBITDA (x)+1 yr forward
Dividend yield (%)
Edelweiss
Securities Limited
Limited
1.1
Company Profile
DABUR INDIA
The health and wellness expert
February 7, 2012
Consumer Goods
Key takeaways
Dabur India (Dabur) posted ~8% YoY volume growth in domestic business in Q3FY12.
Management expects volume growth to be sustained at high single digit in coming
quarters. The company believes that margins have bottomed out. It expects margins
to improve 100bps per quarter for the next 2 3 quarters despite maintaining ad
spends at ~13-14% of sales.
New launches: Almond Hair Oil is doing well and expected to be in full traction by
mid Feb 2012. Foods business (operational only in India and Nepal) reported
growth of 17.4% YoY during Q3FY12 and was impacted largely by base effect (grew
~44% YoY in Q3FY11). Management estimates growth moderation in the coming
quarters and expects growth to be in higher teens. Nepal had witnessed turmoil in
the past and is back on track now. The company plans to launch a few new products
in this category.
To increase the companys rural reach, Dabur has revamped its distribution strategy.
It will have ~2,000 people outsourced, who will be trained specially for rural
sales and marketing. Each person will be a specialist for a particular rural area.
This will help the company focus more intensely on rural areas. Currently, the
project is complete in UP and Maharashtra and Dabur aims to roll this out in
seven other states soon. This is likely to benefit the companys skin care portfolio.
Daburs broad product portfolio provides a good play on Indian FMCG spend by
virtue of its strong presence in less penetrated and high growth categories. Daburs
positioning on the health and wellness platform, backed by its ANH (ayurvedic/
natural/herbal) image is very progressive. This, combined with its demonstrated
ability to create new categories and sub-categories, makes it well-placed to capture
lifestyle changes-led growth in the FMCG space. Dabur has also demonstrated its
ability to make and integrate smart acquisitions (Balsara) that complement its
product portfolio and thereby drive inorganic growth.
Absolute Rating
BUY
Performer

Overweight
MARKET DATA (R : DABU.BO, B: DABUR IN)

CMP
: INR 100
Target Price
: INR 120
52-week range (INR)
: 122 / 89
Share in issue (mn)
: 1,742.1
: 173 / 3,450

Promoters*
: 68.7
MFs, FIs & Banks
FIIs
: 19.1
Others
6.5

Nil
5.7

Stock
Nifty EW Consumer
Goods Index
1 month
(8.4)
9.6
3 months
(3.2)
0.3
0.2
12 months
(2.3)
(7.1)
20.7
Key risks
A slowdown in rural demand could impact Daburs revenues significantly. Further
rise in competitive intensity. Growth in food business in India needs to be monitored.
Management bandwidth post acquisition in international geographies is a concern.
Financials
Year to March
Revenues (INR mn)
Rev. growth (%)
EBITDA (INR mn)
Net profit (INR mn)
Diluted EPS (INR)
EPS growth (%)
Diluted P/E (x)
EV/EBITDA (x)
ROAE (%)
FY10
FY11
FY12E
FY13E
34,143
20.9
6,470
5,032
1,734
2.9
16.9
34.5
26.7
57.6
41,045
20.2
7,625
5,686
1,740
3.3
12.7
30.6
23.7
51.2
51,414
25.3
8,729
6,244
1,741
3.6
9.8
27.9
20.3
42.3
59,961
16.6
10,449
7,594
1,741
4.4
21.6
22.9
16.6
40.3

Abneesh Roy
+91 22 6620 3141
abneesh.roy@edelcap.com
Harsh Mehta
+91 22 4063 5543
harsh.mehta@edelcap.com
(1.6)
Balance sheet
Income statement
Year to March
(INR mn)
FY10
FY11
FY12E
FY13E
Net revenue
33,905
Other operating Income
238
Total operating income
34,143
Cost of materials
15,507
Gross profit
18,636
Employee costs
2,847
Advertisement & sales costs 4,935
Others
4,383
EBITDA
6,470
Depreciation
503
EBIT
5,968
Other income
244
EBIT incl. other income
6,211
Net int. & Finance charges
202
PBT
6,009
Provision for taxation
985
Core PAT
5,024
Minority interest
8
Pro. af. tax after min. int.&Ass. 5,032
Eq. shares outstanding (mn) 1,734
EPS (INR) basic
2.9
Diluted shares (mn)
1,741
EPS (INR) fully diluted
2.9
CEPS (INR)
3.2
DPS
1.0
Dividend payout ratio (%)
34.5
40,774
271
41,045
19,053
21,992
3,222
5,346
5,799
7,625
624
7,001
381
7,382
303
7,079
1,390
5,689
(3)
5,686
1,740
3.3
1,750
3.3
3.6
1.2
35.2
50,196
311
50,508
25,131
25,377
4,016
5,773
6,526
9,063
864
8,199
490
8,689
578
8,111
1,622
6,489
(4)
6,485
1,741
3.7
1,741
3.7
4.2
1.3
35.2
58,535
358
58,893
29,042
29,851
4,741
6,878
7,610
10,623
928
9,694
534
10,228
501
9,728
1,946
7,782
(4)
7,778
1,741
4.5
1,741
4.5
5.0
1.6
35.2

Year to March
FY10
Cost of materials
Employee costs
Advertising & sales costs
Other general expenditure
Depreciation
Net interest expenditure
EBITDA margin
EBIT margin
Net profit margin
Growth metrics (%)
Year to March
FY11
FY12E
FY13E
45.4
8.3
14.5
12.8
1.5
0.6
19.0
17.5
14.7
46.4
7.9
13.0
14.1
1.5
0.7
18.6
17.1
13.9
49.8
8.0
11.4
12.9
1.7
1.1
17.9
16.2
12.8
49.3
8.1
11.7
12.9
1.6
0.8
18.0
16.5
13.2
FY10
FY11
FY12E
FY13E
Revenues
EBITDA
PBT
Net profit
EPS
20.9
33.5
35.1
28.6
16.9
20.2
17.9
17.8
13.2
12.7
23.1
18.9
14.6
14.1
14.7
16.6
17.2
19.9
19.9
19.9
Cash flow statement

Year to March
FY10
FY11
FY12E
(INR mn)
FY13E
5,032
697
503
194
5,729
(127)
5,857
1,865
3,991
5,686
931
624
307
6,616
2,708
3,908
9,480
(5,572)
6,485
1,445
864
582
7,931
(951)
8,881
1,470
7,411
7,778
1,433
928
505
9,211
389
8,822
1,450
7,372
Net profit
Add: Non cash charge
Depreciation
Others
Gross cash flow
Less:Changes in WC
Cash from operations
Less: Capex
Free cash flow
17
(INR mn)
As on 31st March
Share capital
Reserves
Shareholders' funds
Minority
Secured loans
Unsecured loans
Borrowings
Sources of funds
Gross block
Less depreciation
Net fixed assets
Investments
Current assets
Inventories
Sundry debtors
Cash and bank balance
Loans and advances
Current liabilities
Liabilities
Provisions
Working capital
Misc expenditure
Uses of funds
BV (INR)
Ratios
Year to March
ROAE (%)
ROACE (%)
Debtor days
Inventory days
Payable days
Current ratio
Debt/EBITDA
Debt/Equity
Interest coverage (x)
Year to March
Diluted EPS (INR)
Y-o-Y growth (%)
CEPS (INR)
Diluted P/E (x)
Price/BV (x)
EV/Sales (x)
EV/EBITDA (x)
Dividend yield (%)
FY10
FY11
FY12E
FY13E
869
8,485
9,354
38
702
1,091
1,793
107
11,291
9,857
3,391
6,466
301
2,641
11,058
4,262
1,198
1,923
3,674
9,202
4,669
4,533
1,855
27
11,291
5
1,741
12,170
13,911
41
703
9,807
10,510
189
24,651
19,338
4,351
14,987
430
4,274
18,525
7,085
3,555
2,724
5,161
14,576
7,141
7,435
3,950
1,010
24,651
8
1,741
16,001
17,741
44
4,505
5,506
10,010
189
27,985
20,838
5,214
15,623
400
4,274
21,447
6,971
2,912
6,403
5,161
14,769
7,334
7,435
6,677
1,010
27,985
10
1,741
20,594
22,335
49
4,280
5,231
9,510
189
32,083
22,338
6,143
16,195
350
4,274
26,244
8,113
3,380
9,590
5,161
15,990
8,555
7,435
10,254
1,010
32,083
13
FY10
FY11
FY12E
FY13E
57.6
75.6
16
43
61
(2)
1.2
0.3
0.2
0.2
29.5
51.2
48.2
21
51
64
8
1.3
1.4
0.8
0.8
23.1
43.8
37.2
21
51
65
7
1.5
1 .0
0.6
0.6
14.2
40.9
37.6
21
51
65
7
1.6
1 .0
0.4
0.4
19.4
FY10
FY11
FY12E
FY13E
2.9
16.9
3.2
34.5
18.5
5.1
26.7
1.0
3.3
12.7
3.6
30.6
12.4
4.4
23.7
1.2
3.6
9.8
4.1
27.9
9.8
3.4
20.3
1.3
4.3
21.6
4.9
22.9
7.8
2.9
16.6
1.5
Edelweiss
Securities Limited
Limited
Company Profile
DEEPAK FERTILISERS
Chemical and infrastructure play
February 7, 2012
Agriculture
Key takeaways
EDELWEISS RATINGS
While there were margin pressures in the chemicals segment (primarily on higher
ammonia prices) over the past two quarters, with raw material prices coming off
and rupee appreciating, Deepak Fertilisers (DFPCL) management guided for a
margin improvement going forward.
During 9mFY12, while lower coal mining activity resulted in flattish TAN volumes
in India, DFPCLs TAN sales rose 67% YoY owing to the commissioning of new
300,000 MT/yr plant and displacing the import volumes.
Management guides for 75% capacity utilization for the new TAN plant by FY13 end
and a total sales volume target of 0.3 mn MT in FY13.
DFPCL posted strong fertiliser performance during 9mFY12 owing to improved
capacity utilization of ANP plant coupled with significantly higher proportion of
the high margin traded specialty nutrients.
Management reiterates that the restructuring of Ishanya Mall in Pune is likely to be
finished over the next few quarters and would be eventually looking at hiving it off.
Absolute Rating
BUY
Growth
MARKET DATA (R : DPFE.BO, B: DFPC IN)

CMP
: INR 146
Target Price
: INR 220
52-week range (INR)
: 186 / 118
Share in issue (mn)
: 88.2
: 13 / 256

Promoters*
: 43.3
MFs, FIs & Banks
DFPCL is the leader in the Indian Technical Ammonium Nitrate (TAN) market, with
30% share. The company has increased its TAN capacity further by 300,000 MT
from 132,000 MT, at a capex of ~INR 6 bn. With increased capacity, DFPCLs market
share in TAN is estimated to rise to ~70% in FY12 by replacing the cheaper grade
TAN imports. With better gas availability, Ammonium Nitrophosphate (ANP)
fertiliser capacity utilisation is poised to increase from 25% in FY09 to ~70% in
FY12. Also, the capacity utilisation of Methanol is expected to increase from 12%
in FY09 to 80% in FY12. DFPCL is well connected to the National Gas Grid to receive
gas from multiple sources like Panna-Mukta-Tapti (PMT) gas field, KrishnaGodavari (KG) Basin and ONGC.
FIIs
: 12.9
Others
: 34.2

Key risks
9.6
Nil

BSE Midcap
Index
Stock
Stock over
Index
1 month
15.0
15.8
0.8
3 months
(4.0)
(11.4)
(7.4)
12 months
(10.2)
(7.5)
2.8
Delay in capacity scale up in new TAN plant. Poor monsoon could hit fertiliser
demand. Delay in payment of subsidies by GoI could strain the companys WC cycle.
Any issues on the supply side of raw materials may impact capacity utilizations.
INR volatility may impact the operating margin of the chemicals segment.
Financials
Year to March
Revenues (INR mn)
Rev. growth (%)
EBITDA (INR mn)
Net profit (INR mn)
EPS (INR)
EPS growth (%)
Diluted P/E (x)
EV/EBITDA (x)
ROE (%)
FY10
FY11
FY12E
FY13E
13,293
(10.3)
2,920
1,402
88
15.9
(0.1)
9.2
5.9
16.2
16,279
22.5
3,578
1,894
88
21.5
35.1
6.8
4.9
19.1
21,162
30.0
4,293
2,176
88
24.7
14.9
5.9
4.2
19.0
23,890
12.9
4,973
2,628
88
29.8
20.8
4.9
3.3
19.8

Manoj Bahety, CFA

+91-22-6623 3362
manoj.bahety@edelcap.com
Varun Guntupalli
+91-22-6623 3481
varun.guntupalli@edelcap.com
Balance sheet
Income statement
(INR mn)
Year to March
FY10
FY11
FY12E
FY13E

13,293
Direct costs
8,000
Employee costs
912
Other expenses
1,461
10,373
EBITDA
2,920
EBIT
2,207
Interest expenses
464
Other income
356
Profit before tax
2,099
Provision for tax
697
Core profit
1,402
Extraordinary items
250
Profit after tax
1,652
Adjusted net profit
1,402
EPS (INR) basic
15.9
88
Dividend payout (%)
28.3
Tax rate (%)
29.7
16,279
9,617
1,097
1,987
12,701
3,578
787
2,791
439
335
2,686
792
1,894
(19)
1,875
1,894
21.5
88
23.3
29.7
21,162
13,141
1,288
2,440
16,869
4,293
994
3,299
591
399
3,107
931
2,176
0
2,176
2,176
24.7
88
20.3
30.0
23,890
14,713
1,452
2,752
18,917
4,973
1,123
3,850
560
452
3,741
1,114
2,628
0
2,628
2,628
29.8
88
18.5
29.8

Year to March
FY10
Operating expenses
EBITDA margins
Net profit margins
Growth metrics (%)

Year to March
Revenues
EBITDA
PBT
Net profit
EPS
Cash flow statement

Year to March
Net profit
Depreciation
Others
Gross cash flow
Less:Changes in WC
Operating cash flow
Less: Capex
Free cash flow
FY11
FY12E
FY13E
17.9
5.4
3.5
22.0
10.5
18.9
4.8
2.7
22.0
11.6
17.6
4.7
2.8
20.3
10.3
17.6
4.7
2.3
20.8
11.0
FY10
FY11
FY12E
FY13E
(10.3)
0.1
0.1
(0.1)
(0.1)
22.5
22.5
28.0
35.1
35.1
30.0
20.0
15.7
14.9
14.9
12.9
15.8
20.4
20.8
20.8
FY10
FY11
FY12E
(INR mn)
FY13E
1,652
714
(56)
2,311
29
2,281
2,398
(117)
1,875
787
358
3,021
683
2,338
1,909
429
2,176
994
192
3,362
972
2,390
2,144
247
2,628
1,123
108
3,859
211
3,648
1,510
2,139
19
(INR mn)
As on 31st March
Equity capital
Reserves & surplus
Shareholders funds
Secured loans
Unsecured loans
Borrowings
Deferred tax liability (net)
Sources of funds
Gross block
Depreciation
Net block
Total fixed assets
Investments
Inventories
Sundry debtors
Sundry creditors and others
Provisions
Net current assets
Uses of funds
Ratios
Year to March
ROACE (%)
Inventory days
Debtors days
Payable days
Current ratio
Debt/EBITDA
Interest coverage
Debt/equity
Year to March
Diluted EPS (INR)
Y-o-Y growth (%)
CEPS
Diluted P/E (x)
Price/BV (x)
EV/Sales (x)
EV/EBITDA (X)
FY10
FY11
FY12E
FY13E
882
8,358
9,240
6,090
1,222
7,312
658
17,210
14,581
6,491
8,090
4,144
12,234
944
1,163
2,020
2,069
1,134
6,387
1,708
646
2,354
4,033
17,210
105
882
9,713
10,595
7,757
0
7,757
839
19,190
17,853
7,262
10,591
2,717
13,308
548
1,614
2,596
2,697
1,550
8,458
2,386
737
3,124
5,334
19,190
120
882
11,373
12,255
8,000
0
8,000
839
21,094
21,205
8,257
12,949
1,509
14,457
548
2,355
3,731
2,479
1,515
10,081
2,590
1,403
3,993
6,088
21,094
139
882
13,433
14,315
6,000
0
6,000
839
21,154
23,016
9,380
13,636
1,208
14,844
548
2,482
4,054
1,942
1,515
9,994
2,594
1,637
4,231
5,762
21,154
162
FY10
FY11
FY12E
FY13E
16.2
14.6
50.1
65.9
89.4
26.6
2.7
2.5
4.8
1.7
0.8
19.1
16.0
52.7
51.8
77.7
26.7
2.7
2.2
6.4
1.7
0.7
19.0
16.8
55.1
54.6
69.1
40.6
2.5
1.9
5.6
1.8
0.7
19.8
18.7
60.0
59.5
64.3
55.2
2.4
1.2
6.9
1.8
0.4
FY10
FY11
FY12E
FY13E
15.9
(0.1)
23.6
9.2
1.4
1.3
5.9
21.5
35.1
30.4
6.8
1.2
1.1
4.9
24.7
14.9
35.9
5.9
1.1
0.8
4.2
29.8
20.8
42.5
4.9
0.9
0.7
3.3
Edelweiss
Securities Limited
Limited
Company Profile
DISH TV INDIA
Beaming bright
February 7, 2012
Media
Key takeaways
Out of the total market of 6.8mn subscribers, Dish TV hopes to add 0.9-1.0mn
additional subscribers in Phase 1. Dish TV stands to benefit most from Phase 2.
Absolute Rating
BUY
Performer
Incremental market share for Dish TV, Airtel and Videocon d2h is ~25%.
Equalweight
Dish TV has 0.14mn HD subscribers. HD subscriber base will increase when major
broadcasters start offering HD technology.
Subscriber additions slowed in November and December 2011 primarily due to
hike in prices of set top boxes. The slowdown continues in January as well.
The impact of the INR10 price hike in the base pack in the third week of November
2011 was not felt in Q3FY12 due to lag effect. Going forward, the companys focus
remains on digitization and not ARPU.
The company believes that churn is high due to lower quality of subscriber addition
in earlier quarters because of low entry price of the set top box. Also, there were
no major sporting events during FY12 which resulted in higher churn.
Gross debt stands at INR12bn, of which ~INR7.5bn constitute foreign loans. The
debt figure is expected to remain stable in the next quarter as well.
Content cost is estimated to rise 15% YoY from Q1FY13 due to renegotiation of
deals with broadcaster for the next three years each.
Dish TVs first mover advantage and strong distribution network help boost
subscriber additions. The company has also managed to cut costs by shifting
from variable to fixed-cost content contracts with most broadcasters. It is also
expected to benefit from the digitization mandate which will speed up the
digitization process.
MARKET DATA (R : DSTV.BO, B: DITV IN)

CMP
: INR 63
Target Price
: INR 90
52-week range (INR)
: 94 / 54
Share in issue (mn)
: 1,064.4
: 67 / 1,334

Promoters*
: 64.8
MFs, FIs & Banks
FIIs
: 11.7
Others
: 17.8

: 15.7

Stock
Nifty
EW Media
Index
5.3
1 month
3 months
Key risks
5.7
1.8
9.6
(15.7)
0.3
5.9
1.1
(7.1)
(28.6)
12 months
Competition from other DTH service providers.

Competition from alternative technologies especially digital cable.
The DTH industry is subject to extensive regulations and hence it faces the risk of
an unfavorable regulatory environment.
Sustained economic slowdown.
Financials
Year to March
Revenues (INR mn)
Rev. growth (%)
EBITDA (INR mn)
Net profit (INR mn)
EPS (INR)
EPS growth (%)
EV/EBITDA (x)
FY10
FY11
FY12E
FY13E
10,850
47.0
1,117
(2,622)
1,063
(2.5)
75.6
60.0
14,367
32.4
2,380
(1,920)
1,063
(1.8)
26.8
30.3
19,353
34.7
4,732
(1,163)
1,063
(1.1)
39.4
15.5
24,006
24.0
6,688
18
1,063
0.0
101.6
10.6

Abneesh Roy
+91 22 6620 3141
Alankar Garude
+91 22 6623 3301
alankar.garude@edelcap.com
Balance sheet
Income statement
Year to March
Direct costs
Employee costs
Other expenses
EBITDA
Depre. and amortisation
EBIT
Interest expenses
Other income
Profit before tax
Provision for tax
Core profit
Profit after tax
Adjusted net profit
EPS (INR) basic
(INR mn)
FY10
FY11
FY12E
FY13E
10,850
6,926
514
2,294
9,733
1,117
3,227
(2,111)
971
453
(2,628)
(6)
(2,622)
(2,622)
(2,622)
(2,622)
(2.5)
1,063
14,367
7,861
761
3,364
11,986
2,380
3,996
(1,615)
1,534
1,226
(1,923)
(3)
(1,920)
(1,920)
(1,920)
(1,920)
(1.8)
1,063
19,353
10,142
774
3,704
14,621
4,732
4,916
(184)
1,560
581
(1,163)
(1,163)
(1,163)
(1,163)
(1,163)
(1.1)
1,063
24,006
11,805
960
4,553
17,318
6,688
5,895
793
1,495
720
18
18
18
18
18
0.0
1,063
FY11
FY12E
FY13E
83.4
27.8
10.7
16.6
(13.4)
75.5
25.4
8.1
24.5
(6.0)
72.1
24.6
6.2
27.9
0.1

Year to March
FY10
Operating expenses
89.7
8.9
EBITDA margins
10.3
Net profit margins
(24.2)
Growth metrics (%)

Year to March
Revenues
EBITDA
PBT
Net profit
EPS
Cash flow statement

Year to March
Net profit
Depreciation
Others
Gross cash flow
Less:Changes in WC
Operating cash flow
Less: Capex
Free cash flow
FY10
FY11
FY12E
FY13E
47.0
190.6
NA
NA
NA
32.4
113.2
NA
NA
NA
34.7
98.8
NA
NA
NA
24.0
41.3
NA
NA
NA
FY10
FY11
FY12E
(INR mn)
FY13E
(2,622)
3,227
601
1,206
(1,125)
2,331
3,940
(1,609)
(1,920)
3,996
271
2,346
(1,602)
3,948
7,826
(3,878)
(1,163)
4,916
979
4,732
(2,199)
6,931
7,020
(89)
18
5,895
775
6,688
(2,544)
9,233
6,050
3,183
21
(INR mn)
As on 31st March
Equity capital
Reserves & surplus
Shareholders funds
Secured loans
Deferred revenues
Borrowings
Sources of funds
Gross block
Depreciation
Net block
Total fixed assets
Investments
Inventories
Sundry debtors
Provisions
Net current assets
Uses of funds
Ratios
Year to March
ROACE (%)
Inventory days
Debtors days
Payable days
Current ratio
Debt/EBITDA
Interest coverage
Debt/equity
Year to March
Diluted EPS (INR)
Y-o-Y growth (%)
CEPS
EV/Sales (x)
EV/EBITDA (X)
FY10
FY11
FY12E
FY13E
1,062
2,706
3,768
9,143
179
9,322
13,090
18,344
7,298
11,046
3,541
14,587
3,561
28
359
5,550
4,966
10,903
14,243
1,718
15,960
(5,057)
13,090
4
1,063
(693)
370
10,763
10,763
11,133
25,131
10,694
14,437
4,580
19,017
2,000
44
227
3,385
2,558
6,214
13,077
3,021
16,098
(9,884)
11,133
0.3
1,063
(1,856)
(793)
12,000
12,000
11,207
32,131
15,610
16,521
4,600
21,121
2,000
46
394
3,554
3,445
7,439
16,332
3,021
19,354
(11,914)
11,207
(0.75)
1,063
(1,838)
(775)
11,500
11,500
10,725
38,531
21,505
17,026
4,250
21,276
1,500
53
489
5,962
4,274
10,778
19,808
3,021
22,829
(12,051)
10,725
(1)
FY10
FY11
FY12E
FY13E
(29.0)
15
2
1
2
(2.2)
323
0.7
8.3
2.5
(17.3)
7
2
1
29
(1.1)
233
0.4
4.5
29.1
(2.0)
6
2
1
(15)
(0.1)
217
0.4
2.5
(15.1)
8.6
7
2
1
(15)
0.5
213
0.5
1.7
(14.8)
FY10
FY11
FY12E
FY13E
(2.5)
75.6
0.6
6.2
60.0
(1.8)
26.8
2.0
5.0
30.3
(1.1)
39.4
3.5
3.8
15.5
0.0
101.6
5.6
3.0
10.6
Edelweiss
Securities Limited
Limited
Company Profile
ECLERX SERVICES
Going's good
February 7, 2012
IT
Key takeaways
eClerx Services (eClerx) stated that it continues to see traction in SMS segment and
the recent marquee client wins will help it post higher growth than Banking Capital
Market (BCM) segment.. Further, it has not witnessed any scale down in BCM
clients led by ongoing macro economic uncertainties. However, quarterly growth
trend could moderate due to uncertainty and delays at clients end.
It is focused on increasing contribution of clients beyond top 5 by dedicated sales
efforts and has seen increasing traction from them. However, in the near term Top
5 client contribution will continue to remain at current level as demand from them
also continues to be strong.
Over the past 18-20 months the company has scaled up its onsite business
development team from 23 to 41 and will continue to add further as it intends to
mine further its top clients.
Absolute Rating
BUY
Outperformer

Equalweight
MARKET DATA (R : ECLE.BO, B: ECLX IN)

CMP
: INR 729
Target Price
: INR 845
52-week range (INR)
: 874 / 580
Share in issue (mn)
: 29.0
: 21 / 421
Currently, it has 15 clients in BCM and ~35 in the SMS segment.

eClerx is a strongly differentiated play in Indias burgeoning KPO space and stands
out by virtue of its business model. The company has built a strong and relatively
uncontested position in specific high opportunity segments such as data analytics
& management and process improvement solutions thus positioning itself as an
established provider of specialised services. It inks multi-year annuity contracts
facilitated by ongoing engagements, which has helped the company forge a
predictable revenue stream leading to attractive profitability. Strong financial
track record marked by significant profitability and return ratios, strong execution
and management are eClerxs distinctive factors. We expect eClerxs earnings
growth at 26% CAGR over FY11-13E.
Promoters*
: 54.8
MFs, FIs & Banks
: 10.5
FIIs
: 23.5
Others
: 11.2

NIL

Stock
Nifty
EW IT
Index
(1.5)
Key risks
1 month
2.2
9.6
3 months
(3.0)
0.3
4.0
Supply side pressures could affect client servicing and margins.
12 months
3.8
(7.1)
(3.9)
Volatility in exchange rates could impact the companys financials meaningfully.

Process automation and adverse regulations could impact the existing business.
Financials
Year to March
FY10
FY11
FY12E
FY13E
Revenues (INR mn)

Growth (%)
EBITDA (INR mn)
Net profit (INR mn)
Diluted EPS (INR)
EPS growth (%)
Diluted P/E (x)
EV/EBITDA (x)
ROAE (%)
2,570
30.3
1,004
735
30
24.8
14.2
29.6
19.5
40.2
3,421
33.1
1,346
1,224
30
40.7
64.3
18.0
14.3
55.9
4,827
41.1
2,037
1,725
30
57.2
40.6
12.8
9.3
62.2
5,938
23.0
2,438
1,956
30
64.9
13.4
11.3
7.6
54.8

Kunal Sangoi
+91-22- 6623 3370
kunal.sangoi@edelcap.com
Sandip Agarwal
+91-22- 6623 3474
sandip.agarwal@edelcap.com
Omkar Hadkar
+91-22- 6620 3147
omkar.hadkar@edelcap.com
Balance sheet
Income statement
Year to March
(INR mn)
FY10
FY11
FY12E
FY13E
Revenues
2,570
Cost of revenues
1,078
Gross profit
1,492
Total SG&A expenses
489
EBITDA
1,004
Depreciation & amortization
70
EBIT
934
Other income
(106)
Exceptionals
0
Profit before tax
828
Tax
93
Core profit
735
Profit after tax
735
Net profit after minority interest735
28
EPS (INR) basic
25.8
Diluted shares (mn)
30
EPS (INR) diluted
24.8
CEPS (INR)
28.3
Dividend per share
11.7
Dividend pay out (%)
45.4
3,421
1,477
1,945
599
1,346
91
1,255
240
103
1,392
168
1,224
1,224
1,224
29
42.7
30
40.7
45.8
22.6
53.0
4,827
2,007
2,820
782
2,037
124
1,914
242
0
2,156
430
1,725
1,725
1,725
29
59.2
30
57.2
63.4
29.6
50.0
5,938
2,472
3,466
1,027
2,438
164
2,275
171
0
2,445
489
1,956
1,956
1,956
29
67.1
30
64.9
72.7
33.5
50.0

Year to March
FY10
FY11
FY12E
FY13E
Cost of revenues
Gross margin
SG&A expenses
EBITDA margin
EBIT margin
Net profit margins
41.9
58.1
19.0
39.0
36.3
28.6
43.2
56.8
17.5
39.3
36.7
35.8
41.6
58.4
16.2
42.2
39.7
35.7
41.6
58.4
17.3
41.1
38.3
32.9
Growth metrics (%)

Year to March
FY10
FY11
FY12E
FY13E
30.3
23.2
27.0
19.2
18.9
14.2
33.1
34.1
34.4
68.1
66.5
64.3
41.1
51.4
52.5
54.9
40.9
40.6
23.0
19.7
18.9
13.4
13.4
13.4
FY10
FY11
FY12E
(INR mn)
FY13E
735
1,224
1,725
1,956
70
(53)
753
147
606
84
522
91
(607)
709
(209)
918
237
681
124
(145)
1,704
139
1,566
235
1,331
164
(225)
1,895
187
1,708
290
1,418
Revenues
EBITDA
EBIT
PBT
Net profit
EPS
Cash flow statement

Year to March
Net profit
Add : Non cash charges
Depreciation
Others
Gross cash flow
Less:Changes in WC
Operating cash flow
Less: Capex
Free cash flow
23
(INR mn)
As on 31st March
Equity share capital
Share premium account
Reserves
Total shareholders funds
Sources of funds
Goodwill & other intan.asset
Gross fixed assets
Less: Accum. depreciation
Net fixed assets
Capital WIP
Investments
Deferred tax asset
Cash & bank balances
Debtors
Loans and advances
Sundry creditors
Provisions
Total current liabilities
Working capital
Application of funds
BV per share (INR)
Ratios
Year to March
ROAE (%)
ROACE (%)
Debtors (days)
Payable (days)
Current ratio
Fixed assets turnover (x)
Total asset turnover(x)
Equity turnover(x)
Year to March
Diluted EPS (INR)
Y-o-Y growth (%)
CEPS (INR)
Diluted P/E (x)
Price/BV(x)
EV/Revenues (x)
EV/EBITDA (x)
Dividend yield (%)
FY10
FY11
FY12E
FY13E
193
740
1,066
1,999
1,999
101
446
246
199
22
775
7
472
392
501
1,366
220
251
471
894
1,999
67
292
667
1,425
2,384
2,384
0
639
335
305
65
279
7
1,515
659
698
2,873
350
795
1,144
1,728
2,384
79
295
727
2,141
3,163
3,163
0
889
458
431
50
1,300
7
1,023
926
873
2,822
437
1,009
1,446
1,375
3,163
105
295
727
2,953
3,975
3,975
0
1,169
622
547
60
1,450
7
1,372
1,139
1,091
3,601
546
1,144
1,690
1,911
3,975
132
FY10
FY11
FY12E
FY13E
40.2
92.0
60
32
28
2.9
12.8
7.0
1.4
55.9
75.4
56
30
26
2.5
13.6
14.5
1.6
62.2
96.5
60
30
30
2.0
13.1
13.8
1.7
54.8
103.7
63
30
33
2.1
12.1
12.8
1.7
FY10
FY11
FY12E
FY13E
24.8
14.2
28.3
29.6
10.9
7.6
19.5
14.6
1.6
40.7
64.3
45.8
18.0
9.2
5.6
14.3
9.4
3.1
57.2
40.6
63.4
12.8
7.0
3.9
9.3
7.8
4.0
64.9
13.4
72.7
11.3
5.6
3.1
7.6
7.3
4.6
Edelweiss
Securities Limited
Limited
Company Profile
EMAMI
Blockbuster player
February 7, 2012
Consumer Goods
Key takeaways
Emami believes the current severe winter will not have a significant impact on
volume growth primarily on account of delayed winter. Volume growth to be little
less than 10% in Q3FY12. However, growth is likely to pick up in Q4FY12 (~1213%). Boroplus is expected to grow in single digits in Q3FY12.
Fair and Handsome has performed well to grow at 25% plus YoY, thereby gaining
market market share (after five quarters of market share loss).
Emami expects its organic annual growth to normalize at 18-19% for the next twothree years and PAT growth of ~20% YoY. The company launched Vasocare lip balm,
Vasocare body lotion and Boroplus face wash and also smaller size SKU in Zandu
balm (INR2) which the company expects to be the next growth drivers.
Absolute Rating
BUY
Outperformer
Risk Rating Relative to Sector High

Overweight
MARKET DATA (R : EMAM.BO, B: HMN IN)

CMP
: INR 365
Target Price
: INR 530
52-week range (INR)
: 545 / 320
Share in issue (mn)
: 151.3
: 55 / 1,100
Key raw material, menthol (18% of COGS), is facing severe inflation. It is currently
trading at INR1,700/kg from INR700/kg a year ago. Emami has booked menthol at
average price of ~INR1,600/kg in the current quarter. Emami has taken 6-7% price
hike in FY12 and it will not roll back price hikes once raw material pressure eases.
Promoters*
: 72.7
MFs, FIs & Banks
FIIs
: 15.8
Others
8.7

Nil
Emamis product portfolio provides a play on Indian FMCG spend by virtue of its
strong presence in less penetrated and high growth categories. More than 80% of
Emamis products have Ayurvedic base. The therapeutic usage gives customer
loyalty leading to high gross margins, high barriers to entry, strong brand equity,
mass acceptance and superior growth opportunities. Emami has a superior track
record of launching new brands (Fair & Handsome, first fairness cream for men in
India) and transforming them into blockbusters. Emami does not compete with
any large multinational or domestic player in its key segments. Introduction of
lower SKUs for Zandu balm and rejuvenating more than 200 of Zandus Ayurvedicbased prescription products will be another growth driver for Emami.
Key risks

2.8

Stock
Nifty EW Consumer
Goods Index
1 month
(0.6)
9.6
3 months
(14.5)
0.3
0.2
12 months
(15.2)
(7.1)
20.7
Seasonality risk is one of the biggest risks to Emami. Summer products (like talc)
and winter products (like Boroplus) sales depend upon weather conditions.
Fluctuation in crude-linked prices affect raw material cost for Emami (~50% raw
material is crude linked) leading to margin pressure.
Financials
Year to March
Revenues (INR mn)
Rev. growth (%)
EBITDA (INR mn)
Net profit (INR mn)
Diluted EPS (INR)
EPS growth (%)
Diluted P/E (x)
EV/EBITDA (x)
ROAE (%)
FY10
FY11
FY12E
FY13E
10,380
35.5
2,465
1,697
151
11.2
69.7
32.5
22.8
36.6
12,778
23.1
2,534
2,287
151
15.1
34.8
24.1
21.8
34.8
15,334
20.0
2,783
2,561
151
16.9
12.0
21.5
19.4
35.9
18,426
20.2
3,565
3,137
151
20.7
22.5
17.6
14.8
40.2

Abneesh Roy
+91 22 6620 3141
Harsh Mehta
+91 22 4063 5543
(1.6)
Balance sheet
Income statement
Year to March
(INR mn)
FY10
FY11
FY12E
FY13E
Net revenues
10,380
Cost of materials
3,805
Gross profit
6,575
Employee costs
579
Advert. & sales costs
1,944
Commission and Discount
116
Freight and forwarding
227
Others
1,244
EBITDA
2,465
Depreciation
154
EBIT
2,310
Other income
70
2,380
Net interest & Finance charges* 210
PBT
2,171
352
Extraordinary items (net of tax) 121
Core PAT
1,697
Pro. af. tax af. Min. Int. & Asso. 1,697
Equity shares outstanding (mn) 151
EPS (INR) basic
11.2
Diluted shares (mn)
151
11.2
CEPS (INR)
12.2
DPS
3
31.3
12,778
5,232
7,546
737
2,305
68
363
1,539
2,534
140
2,394
185
2,580
(112)
2,691
404
0
2,287
2,287
151
15.1
151
15.1
16.0
4
27.0
15,334
6,471
8,863
981
2,760
153
498
1,687
2,783
185
2,598
232
2,830
(115)
2,944
383
0
2,561
2,561
151
16.9
151
16.9
18.2
6
41.0
18,426
7,684
10,742
1,152
3,178
221
645
1,981
3,565
259
3,306
302
3,608
(126)
3,734
597
0
3,137
3,137
151
20.7
151
20.7
22.4
7
41.0

Year to March
FY10
Cost of materials
Employee costs
Depreciation
EBITDA margin
EBIT margin
Net profit margin
Growth metrics (%)
Year to March
Revenues
EBITDA
PBT
Net profit
EPS
Cash flow statement
Year to March
Net profit
Depreciation
Others
Gross cash flow
Less:Changes in WC
Less: Capex
Free cash flow
FY11
FY12E
FY13E
36.7
5.6
18.7
12.0
1.5
2.0
23.7
22.3
16.4
40.9
5.8
18.0
12.0
1.1
(0.9)
19.8
18.7
17.9
42.2
6.4
18.0
11.0
1.2
(0.7)
18.2
16.9
16.7
41.7
6.3
17.3
10.8
1.4
(0.7)
19.4
17.9
17.0
FY10
FY11
FY12E
FY13E
35.5
91.0
125.6
106.7
69.7
23.1
2.8
24.0
34.8
34.8
20.0
9.8
9.4
12.0
12.0
20.2
28.1
26.8
22.5
22.5
FY10
FY11
FY12E
(INR mn)
FY13E
1,697
485
154
331
2,183
475
1,707
571
1,137
2,287
28
140
(112)
2,315
751
1,564
355
1,209
2,561
70
185
(115)
2,632
(205)
2,837
650
2,187
3,137
133
259
(126)
3,270
248
3,022
375
2,647
25
(INR mn)
As on 31st March
Share capital
Reserves
Shareholders' funds
Secured loans
Unsecured loans
Borrowings
Sources of funds
Goodwill on consolidation
Gross block
Less depreciation
Net fixed assets
Investments
FX translation difference
Current assets
Inventories
Sundry debtors
Loans and advances
Current liabilities
Liabilities
Provisions
Net current assets
Misc expenditure
Uses of funds
BV (INR)
Ratios
Year to March
ROAE (%)
ROACE (%)
Debtor days
Inventory days
Payable days
Current ratio
Debt/EBITDA
Debt/Equity
Year to March
Diluted EPS (INR)
Y-o-Y growth (%)
CEPS (INR)
Diluted P/E (x)
Price/BV (x)
EV/Sales (x)
EV/EBITDA (x)
Dividend yield (%)
FY10
FY11
FY12E
FY13E
151
6,103
6,254
1,492
1,098
2,591
70
8,914
0
7,638
2,027
5,611
62
616
(14)
4,260
826
755
1,614
1,065
1,621
927
695
2,639
0.4
8,914
41
151
6,747
6,899
1,756
537
2,294
137
9,330
8
7,993
3,148
4,845
65
66
0
5,997
1,234
1,089
2,105
1,570
1,651
917
733
4,347
0.1
9,330
46
151
7,239
7,391
1,756
537
2,294
137
9,822
8
8,643
4,354
4,288
65
66
0
7,261
1,232
1,102
3,358
1,570
1,867
1,133
733
5,395
0.0
9,822
49
151
8,070
8,222
1,756
537
2,294
137
10,653
8
9,018
5,635
3,383
65
66
0
9,211
1,475
1,319
4,847
1,570
2,079
1,346
733
7,132
0.0
10,653
54
FY10
FY11
FY12E
FY13E
36.6
29.9
26
28
51
3
2.6
1.1
0.4
0.4
11.0
34.8
27.3
26
29
33
23
3.6
0.9
0.3
0.3
(21.4)
35.9
27.3
26
29
33
23
3.9
0.8
0.3
0.3
(22.7)
40.2
32.5
26
29
33
22
4.4
0.6
0.3
0.3
(26.2)
FY10
FY11
FY12E
FY13E
11.2
69.7
12.2
32.5
8.8
5.4
22.8
0.8
15.1
34.8
16.0
24.1
8.0
4.3
21.8
1.0
16.9
12.0
18.2
21.5
7.5
3.5
19.4
1.6
20.7
22.5
22.4
17.6
6.7
2.9
14.8
2.0
Edelweiss
Securities Limited
Limited
Company Profile
GAIL
Muted transmission volume growth
February 7, 2012
Key takeaways
Low risks of marketing margins; lower subsidy share in Q4
Absolute Rating
HOLD
Performer
Total LPG/kerosene under-recovery for 9mFY12 is ~INR400bn, of which GAIL shares

INR21.2bn. Upstream share in Q4 is expected at 37.91% (same as 9mFY12).
Risk Rating Relative to Sector Low

Risks of marketing margins being regulated looks low as marketing margins were
earlier decided by a cabinet committee (superior to PNGRB). PNGRBs role is to
typically regulate transmission charges and has no role in marketing margins.
High returns enjoyed by CGD companies so far were due to focus on CNG (ability to
pass on costs is higher) and availability of APM gas. With increased focus on
PNG, incremental marketing margins will be lower as PNG will be competing with
subsidized LPG.
Growth and expansion plans
Current transmission volume is ~118 mmscmd, of which KG-D6 volume is 24
mmscmd (earlier 30 mmscmd). This is expected to clock 123 mmscmd in FY13/
FY14. GAIL is currently importing ~16 spot cargos a year and plans to import 20 in
FY13/FY14, 40 in FY15 and 80 in FY16. The Marubeni contract will continue for ~2
more years can increase from current 1 cargo/qtr to 2 cargoes/qtr. GAIL has
reserved ~2.5 mtpa in the 5.0 mtpa PLNG Dahej expansion. PLNGs Kochi terminal
will be completed by Dec 2012 while GAILs Phase-I pipeline servicing the same
will be ready by Aug 2012. In Kochi, GAIL has tied up for 1.5 mmscmd gas. Petchem
expansion plan to double capacity to 900KT by Apr 2014. FY13E capex at INR85bn
(pipelines = INR35bn; petchem INR35bn).
We remain neutral on GAIL due to decline in Indian gas availability, probable
tariff cut, and lack of near-term earnings growth. GAILs quality of earnings remains
low as the share of gas trading income rises.
Key risks
Falling domestic gas production. Tariff reduction in existing pipelines by the
regulator. Rise in crude prices leading to higher subsidy sharing. Cap on marketing
margins on domestic gas by PNGRB.
Overweight
MARKET DATA (R : GAIL.BO, B: GAIL IN)

CMP
: INR 379
Target Price
: INR 412
52-week range (INR)
: 485 / 360
Share in issue (mn)
: 1,268.5
: 481 / 9.564

Promoters*
: 57.3
MFs, FIs & Banks
: 25.2
FIIs
: 13.5
Others
4.0

Nil

Stock
Nifty
EW O & G
Index
1 month
(5.0)
9.6
8.0
3 months
(12.3)
0.3
(1.1)
12 months
(18.8)
(7.1)
(5.8)
Financials
Year to March
Revenue growth (%)
EBITDA (INR mn)
Net profit (INR mn)
Diluted EPS (INR)
EPS growth (%)
Diluted P/E (x)
EV/EBITDA (x)
ROAE (%)
FY10
FY11
FY12E
FY13E
270,353
9.6
54,718
33,278
1,268
26.2
17.7
14.4
8.8
19.7
351,067
29.9
64,970
40,210
1,268
31.7
20.8
12.0
8.0
20.1
474,331
35.1
74,129
44,941
1,268
35.4
11.8
10.7
7.7
19.4
522,981
10.3
73,495
42,830
1,268
33.8
(4.7)
11.2
8.6
16.3


+91 22 6623 3315
Balance sheet
Income statement
(INR bn)
Year to March
FY10
FY11
FY12E
FY13E
Net revenues
270,353
Raw material costs
179,474
Gross profit
90,880
Employee expenses
6,689
Other expenses
29,473
Operating expenses
36,162
Total expenditure
215,635
EBITDA
54,718
EBIT
46,483
Interest expense
3,853
Other income
5,797
Profit before tax
48,427
Current tax
14,586
Deferred tax
727
Total tax
15,313
Core profit
33,114
Extraord./ Prior period items (191)
Profit after tax
32,923
Share in profits of associates
355
Group profit
33,278
EPS (INR) basic
26.2
Diluted shares (mn)
1,268
26.2
CEPS
32.9
DPS
7.5
Dividend payout (%)
28.6
351,067
247,109
103,958
8,179
30,808
38,988
286,097
64,970
8,880
56,090
3,779
5,574
57,886
15,683
2,498
18,181
39,705
104
39,809
401
40,210
1,268
31.7
1,268
31.7
40.0
7.5
23.7
474,331
351,276
123,054
10,602
38,322
48,925
400,201
74,129
10,106
64,024
4,442
5,559
65,140
16,174
4,277
20,451
44,688
0
44,688
252
44,941
1,268
35.4
1,268
35.4
46.4
8.0
22.6
522,981
396,903
126,078
11,448
41,135
52,583
449,486
73,495
11,928
61,568
5,675
6,161
62,054
14,861
4,626
19,488
42,566
0
42,566
264
42,830
1,268
33.8
1,268
33.8
46.4
8.5
25.2

Year to March
FY10
Growth metrics (%)

Year to March
Revenues
EBITDA
PBT
Net profit
EPS
Cash flow statement

Year to March
Net profit
Add: Depreciation
Add: Deferred tax
Add: Others
Gross cash flow
Less:Changes in WC
Opertaing cash flow
Less: Capex
Free cash flow

Reserves & surplus
Secured loans
Unsecured loans
Total debt (C)
Sources of funds (A+B+C+D)
Investments (B)
Inventories
Accounts receivable
Loans and advances
Current assets (C)
Accounts payable
Other current liab. & prov.
Current liab. & prov. (D)
Miscellaneous expenditure
Uses of funds (A+B+E+F+G)
FY10
FY11
FY12E
FY13E
12,685
165,415
178,100
2,302
49,994
4,138
54,132
14,650
249,184
202,123
10,651
8,578
15,108
45,486
76,828
145
146,145
59,201
50,535
109,735
36,410
(G)
0
249,184
140
12,685
199,454
212,139
5,472
62,640
6,401
69,041
17,151
303,803
265,990
12,363
10,586
21,023
25,844
65,587
129
123,168
55,414
42,304
97,717
25,450
0
303,803
167
12,685
232,437
245,121
5,472
132,510
6,900
139,410
21,428
411,432
341,033
12,545
14,148
22,219
40,773
104,169
216
181,525
66,175
57,496
123,671
57,854
0
411,432
193
12,685
262,551
275,236
5,472
180,377
6,900
187,277
26,055
494,040
432,915
12,545
15,492
29,119
29,380
111,569
240
185,800
75,462
61,728
137,190
48,610
(30)
494,040
217
FY10
FY11
FY12E
FY13E
21.3
19.7
14.5
1.3
1.3
0.4
17.4
22.7
3.5
21
16
106
(68)
0.3
1.0
0.3
21.2
20.1
14.4
1.3
1.2
0.3
19.4
25.8
4.3
19
14
85
(52)
0.3
1.1
0.3
18.5
19.4
12.5
1.5
1.4
0.3
21.9
28.4
5.8
17
13
63
(34)
0.6
1.9
0.6
14.0
16.3
9.4
1.4
1.2
0.2
20.4
26.8
5.6
18
14
65
(34)
0.7
2.5
0.7
FY10
FY11
FY12E
FY13E
26.2
17.7
32.9
14.4
2.7
1.8
8.8
2.0
31.7
20.8
40.0
12.0
2.3
1.5
8.0
2.0
35.4
11.8
46.4
10.7
2.0
1.2
7.7
2.1
33.8
(4.7)
46.4
11.2
1.7
1.2
8.6
2.2
Ratios
Year to March
FY11
FY12E
FY13E
66.4
13.4
20.2
3.0
1.4
12.3
70.4
11.1
18.5
2.5
1.1
11.5
74.1
10.3
15.6
2.1
0.9
9.5
75.9
10.1
14.1
2.3
1.1
8.2
FY10
FY11
FY12E
FY13E
9.6
24.0
12.7
18.1
17.7
29.9
18.7
19.5
19.9
20.8
35.1
14.1
12.5
12.6
11.8
10.3
(0.9)
(4.7)
(4.8)
(4.7)
FY10
FY11
FY12E
(INR bn)
FY13E
33,278
8,462
727
(2,336)
40,132
(15,786)
55,918
57,519
(1,601)
40,210
8,093
2,498
(1,514)
49,287
8,683
40,604
71,961
(31,357)
44,941
10,106
4,277
(1,131)
58,192
17,474
40,718
85,149
(44,431)
42,830
11,928
4,626
(471)
58,913
2,149
56,764
103,810
(47,046)
Cost of goods sold

Operating expenses
EBITDA margins
Interest
Net profit margin
(INR bn)
As on 31st March
27
ROACE
ROAE
ROA
Current ratio
Quick ratio
Cash ratio
Receivable turnover (x)
Inventory turnover (x)
Payables turnover (x)
Receivables (days)
Inventory (days)
Payables (days)
Debt-equity (x)
Debt/EBITDA
Year to March
Diluted EPS (INR)
Y-o-Y growth (%)
CEPS (INR)
Diluted P/E (x)
P/BV (x)
EV/Sales (x)
EV/EBITDA (x)
Dividend yield (%)
Edelweiss
Securities Limited
Limited
Company Profile
GLENMARK PHARMACEUTICALS
On road to recovery
February 7, 2012
Pharmaceuticals
Key takeaways
Base business to grow over 20% during FY12-14E: Management is confident of

maintaining 20% plus revenue growth in key geographies such as US, India, SRM
and LatAm markets driven by new product launches and streamlining the focus in
key therapeutic segments such as Dermatology, Respiratory, Oncology and CVS.
Company highlighted that base business has now attained scale and size from
where it could be self sustainable.
Absolute Rating
BUY
Outperformer

Equalweight
R&D assets: Best among peers: Despite several setbacks, Glenmark continued to
invest in NCE/NBE research which demonstrates its conviction in the R&D
capabilities. Management has highlighted that there are 7-8 important data points
which have potential to generate incremental milestone income in FY13E if
successful.
MARKET DATA (R : GLEN.BO, B: GNP IN)
Margin to improve going forward: Management has indicated that margins have
bottomed out and expects them to head North going forward. Margin expansion
will be driven by improved traction in India, niche launches in US and lower R&D
cost as percentage of sales. We expect margin to improve 200bps over FY14E.
Improved focus on profitability a positive: Glenmarks focus on improving cash
conversion cycle should allay concerns on high receivables. Its overall debt and
working capital position have improved which has led to higher free cash flows
during 9mFY12. Management indicated positive cash flow of INR2.25bn which
highlights its focus on profitable growth.
Glenmark has made significant investments in base business over FY05-11, largely
utilising cash flow from domestic business and R&D income. However, base
business has now attained sizeable scale which is self sustainable. We expect
19% CAGR in core business over FY12-14E. Also, the companys focus on improving
cash cycle should allay concerns on high receivables. With strong earnings traction
(34% CAGR), better cash conversion cycle, gearing and return profile, Glenmark is
poised for re-rating.
CMP
: INR 295
Target Price
: INR 388
52-week range (INR)
: 351 / 241
Share in issue (mn)
: 270.4
: 80 / 1,590

Promoters*
: 48.3
MFs, FIs & Banks
FIIs
: 34.2
Others
: 12.4

5.1
Nil

Stock
Nifty
EW Pharma
Index
1 month
12.2
9.6
20.3
3 months
3.4
0.3
14.8
12 months
0.3
(7.1)
15.1
Key risks
Disappointments in NCE pipeline.
Regulatory risks in US market.
Financials
Year to March
Revenues (INR mn)
Rev growth (%)
Operating profit (INR mn)
Adj. PAT (INR mn)
Adj. EPS (INR)
Recurring EPS (INR)
EPS growth (%)
P/E (x)
EV/EBITDA (x)
Core ROE (%)
FY10
FY11
FY12E
FY13E
25,006
18.2
6,195
2,995
270
10.4
(7.9)
28.5
15.7
14.3
29,491
17.9
6,573
3,914
12
11.7
12.6
21.3
15.1
14.8
38,806
31.6
9,862
6,701
16
15.7
34.0
15.9
9.8
20.3
43,743
12.7
9,287
6,113
20
19.8
26.3
12.6
10.1
20.4

Manoj Garg
+91-22-6623 3302
Perin Ail
+91-22-6620 3032
Balance sheet
Income statement
Year to March
(INR mn)
FY10
FY11
FY12E
FY13E

29,491
Net revenues
28,599
Milestone income
892
22,918
Materials cost
9,918
Employee cost
5,103
R&D cost
1,380
Selling, admin and gen. exp. 5,592
Other expenses
925
EBITDA
6,573
947
EBIT
5,626
Interest expense/(income)
1,566
Other income
1,405
Profit before tax
5,466
Provision for tax
237
Core profit
5,228
Extraordinary items
(650)
Profit after tax
4,578
Minority interest & others
46
Rep. profit after mino. int.
4,532
Adj. PAT after minority int.
3,914
EPS (INR) adjusted
14.5
Diluted shares (mn)
270
Recurring EPS (INR) fully diluted 11.7
CEPS (INR)
22.7
0.5
Dividend payout (%)
3.2
37,818
35,178
2,640
27,615
11,609
5,804
2,111
6,156
1,935
10,203
1,003
9,200
1,386
158
7,972
1,116
6,856
0
6,856
69
6,788
6,788
25.1
270
15.7
28.8
0.6
2.3
42,774
42,774
0
33,214
14,073
7,002
2,524
7,310
2,306
9,560
1,214
8,346
1,132
176
7,390
1,109
6,282
0
6,282
63
6,219
6,219
23.0
270
20.1
27.5
0.6
2.5
49,433
49,433
0
37,668
15,769
8,058
2,867
8,404
2,571
11,765
1,316
10,449
933
237
9,753
1,951
7,802
0
7,802
78
7,724
7,724
28.6
270
25.9
33.5
1.2
4.1

Year to March
FY10
Cost of revenues
Selling, admin and gen. exp.
R & D cost
EBITDA margins
Net profit margins
Growth metrics (%)
Year to March
Revenues
EBITDA
Net profit
PBT
Adj. EPS
Recurring EPS
Cash flow statement
Year to March
Net profit
Depreciation
Others
Gross cash flow
Less:Changes in WC
Operating cash flow
Less: Capex
Free cash flow
FY11
FY12E
FY13E
34.7
19.6
4.8
80.1
3.3
19.9
11.3
33.0
17.5
6.0
78.5
2.9
21.5
13.7
32.9
17.1
5.9
77.7
2.8
22.4
14.5
31.9
17.0
5.8
76.2
2.7
23.8
15.6
FY10
FY11
FY12E
FY13E
17.9
6.1
58.0
42.4
30.5
12.6
28.2
55.2
31.1
45.9
73.4
34.2
13.1
(6.3)
(8.4)
(7.3)
(8.4)
28.3
15.6
23.1
24.2
32.0
24.2
29.0
FY10
FY11
FY12E
(INR mn)
FY13E
4,532
947
(1,496)
3,983
(3,528)
7,511
3,708
3,802
6,788
1,003
69
7,859
2,221
5,638
2,500
3,138
6,219
1,214
63
7,496
2,116
5,380
2,500
2,880
7,724
1,316
78
9,119
2,953
6,166
2,000
4,166
29
(INR mn)
As on 31st March
Equity capital
Reserves & surplus
Common shareholders eq.
Short term debt
Long term debt
Borrowings
Minority interest
Sources of funds
Gross block
Depreciation
Net block
Intangible assets & goodwill
Inventories
Sundry debtors
Cash and bank balances
Loans and advances
Current liabilities
Provisions
Total cur. lia. and provisions
Net current assets
Uses of funds
Book value per share ( INR)
Ratios
Year to March
Core ROAE (%)
Core ROACE (%)
Inventory days
Debtors days
Payable days
Cash conversion cycles
Current ratio
Debt/ EBITDA
Debt/equity
Year to March
Diluted EPS (INR)
Y-o-Y growth (%)
CEPS
Diluted P/E (x)
Price/BV (x)
EV/Sales (x)
EV/EBITDA (X)
FY10
FY11
FY12E
FY13E
270
20,102
20,372
14,802
6,314
21,116
(1,081)
267
40,675
12,489
2,152
10,337
1,781
10,005
8,070
11,308
1,986
4,932
26,297
6,574
1,172
7,746
18,551
40,675
75
270
26,800
27,070
13,802
3,314
17,116
(1,081)
267
43,373
17,020
3,155
13,865
9,755
9,539
13,236
966
4,916
28,658
7,393
1,513
8,906
19,753
43,373
100
270
32,924
33,194
12,802
1,314
14,116
(1,081)
267
46,496
19,770
4,369
15,401
9,505
11,189
14,971
688
5,347
32,195
8,894
1,711
10,605
21,590
46,496
123
270
40,410
40,680
11,302
314
11,616
(1,081)
267
51,482
22,020
5,685
16,335
9,255
12,670
17,302
2,037
5,932
37,941
10,071
1,977
12,048
25,893
51,482
151
FY10
FY11
FY12E
FY13E
14.8
11.8
160
141
122
179
3.4
3.2
1.0
20.3
16.2
150
127
119
158
3.2
1.7
0.6
20.6
18.9
146
120
115
152
3.0
1.5
0.4
20.9
21.9
149
119
118
150
3.1
1.0
0.3
FY10
FY11
FY12E
FY13E
10.4
(14.3)
16.5
28.5
3.4
3.9
15.7
11.7
12.6
22.7
25.3
3.9
3.4
15.1
15.7
34.0
28.5
18.9
3.0
2.5
9.8
19.8
26.3
27.1
14.9
2.4
2.2
10.1
Edelweiss
Securities Limited
Limited
Company Profile
GODREJ CONSUMER PRODUCTS

The right hue
February 7, 2012
Consumer Goods
Key takeaways
15-16% volume growth is sustainable in soaps. Margins in soaps declined YoY but
expect them to be better sequentially. Management has hinted at further price hikes.
Absolute Rating
BUY
Outperformer
HIT magic paper to be launched in H2FY13.
Despite growth trailing the hair colour category, management is confident of

improving it and plans to support the category with strong marketing initiatives.
It plans to launch new hair care products in H1FY13.
International sales grew 68% YoY backed by a strong growth of 35% YoY in Indonesia
and 251% YoY in Africa (primarily due to DGH merger). Revival was seen in LatAm
business.
GCPL will complete the second and third phases of DGH acquisition by September
2012 and September 2013, respectively. Post this, it will work towards acquiring
the balance 49% stake in DGH.
New packaging law, if implemented, will affect SKU sales in soaps and eliminate
the INR5 and INR10 price points. However, if the government agrees to industry
proposals to bar below 50g SKUs, GCPL will not be affected.
GCPL boasts of a patented technology for PHDs that has helped it drive usage of
hair colours at the lower end of the market. The company also provides highquality value-for-money soaps which helped it garner larger market share. GCPLs
aggressive stance to take its operations to the international platform has resulted
in several acquisitions in past three years. The company can be expected to benefit
from its new ventures, increasing consumer spending and inorganic growth going
forward.
Key risks
Integration of recent overseas acquisitions will test the execution capabilities of
GCPL management. Depreciating INR can yield to rise in cost of dollar denominated
debt. GCPLs ability to gain market share in its soap segment could be adversely
affected by the aggression of HUL, ITC, Wipro, etc. The entry of new players has put
pressure on GCPLs hair colour business because of which it has been losing
market share at the top end of the market.
Overweight
MARKET DATA (R : GOCP.BO, B: GCPL IN)

CMP
: INR 443
Target Price
: INR 520
52-week range (INR)
: 463 / 326
Share in issue (mn)
: 323.6
: 144 / 2,856

Promoters*
: 67.3
MFs, FIs & Banks
FIIs
: 19.9
Others
: 10.4

2.4
Nil

Stock
Nifty EW Consumer
Goods Index
1 month
11.1
9.6
3 months
2.1
0.3
0.2
12 months
12.5
(7.1)
20.7
Financials
Year to March
Revenues (INR mn)
Rev. growth (%)
EBITDA (INR mn)
Net profit (INR mn)
Diluted EPS (INR)
EPS growth (%)
Diluted P/E (x)
EV/EBITDA (x)
ROAE (%)
FY10
FY11
FY12E
FY13E
20,412
46.5
4,073
3,395
308
6.7
64.0
40.2
32.9
44.5
36,430
78.5
6,407
5,147
324
14.9
35.1
29.8
25.2
35.9
45,356
24.5
8,051
6,756
324
16.4
10.3
27.0
20.3
27.6
56,461
24.5
10,107
6,620
324
20.5
24.6
21.7
16.6
28.4

Abneesh Roy
+91 22 6620 3141
Harsh Mehta
+91 22 4063 5543
(1.6)
Balance sheet
Income statement
Year to March
(INR mn)
FY10
FY11
FY12E
FY13E
Net revenues
20,412
Cost of materials
9,463
Gross profit
10,949
Employee costs
1,518
Advt. & sales costs
2,015
Others
3,343
EBITDA
4,073
Depreciation
236
EBIT
3,837
Other income
473
4,310
111
PBT
4,199
803
Core PAT
3,395
Extraordinary items (net of tax)
0
Minority interest
0
Pro.af. tax af. min. int. & Asso. 3,395
EPS (INR) basic
11.0
Diluted shares (mn)
308
11.0
CEPS (INR)
11.7
DPS
4.0
37.0
36,430
17,488
18,942
2,845
4,099
5,590
6,407
499
5,908
729
6,637
519
6,118
1,302
4,816
331
0
5,147
324
14.9
324
14.9
16.4
5.0
31.7
45,356
21,544
23,812
3,515
5,171
7,076
8,051
671
7,379
907
8,287
1,023
7,264
1,671
5,593
1,443
(280)
6,756
324
16.4
324
16.4
19.4
6.9
33.0
56,461
26,678
29,783
4,348
6,437
8,893
10,107
892
9,215
960
10,175
1,125
9,050
2,081
6,968
0
(348)
6,620
324
20.5
324
20.5
24.3
6.8
33.0

Year to March
FY10
Cost of materials
Employee costs
Depreciation
EBITDA margin
EBIT margin
Net profit margin
Growth metrics (%)
Year to March
Revenues
EBITDA
PBT
Net profit
EPS
Cash flow statement

Year to March
Net profit
Depreciation
Others
Gross cash flow
Less:Changes in WC
Less: Capex
Free cash flow
FY11
FY12E
FY13E
46.4
7.4
9.9
16.4
1.2
0.5
20.0
18.8
16.6
48.0
7.8
11.3
15.3
1.4
1.4
17.6
16.2
13.2
47.5
7.8
11.4
15.6
1.5
2.3
17.8
16.3
11.7
47.3
7.7
11.4
15.8
1.6
2.0
17.9
16.3
11.7
FY10
FY11
FY12E
FY13E
46.5
96.6
100.7
96.7
64.0
78.5
57.3
45.7
41.8
35.1
24.5
25.6
18.7
10.3
10.3
24.5
25.5
24.6
24.6
24.6
FY10
FY11
FY12E
(INR mn)
FY13E
3,395
347
236
111
3,743
(887)
4,630
779
3,851
5,147
687
499
188
5,834
1,316
4,519
14,999
(10,480)
6,756
531
671
(141)
7,287
(890)
8,177
8,016
161
6,620
2,365
892
1,473
8,985
(294)
9,279
9,415
(136)
31
(INR mn)
As on 31st March
Share capital
Reserves
Shareholders' funds
Minority
Secured loans
Unsecured loans
Borrowings
Sources of funds
Gross block
Less depreciation
Net fixed assets
Goodwill
Investments
Current assets
Inventories
Sundry debtors
Other Current Asset
Loans and advances
Current liabilities
Liabilities
Provisions
Working capital
Uses of funds
BV (INR)
Ratios
Year to March
ROAE (%)
ROACE (%)
Debtor days
Inventory days
Payable days
Current ratio
Debt/EBITDA
Debt/Equity
Year to March
Diluted EPS (INR)
Y-o-Y growth (%)
CEPS (INR)
Diluted P/E (x)
Price/BV (x)
EV/Sales (x)
EV/EBITDA (x)
Dividend yield (%)
FY10
FY11
FY12E
FY13E
308
9,239
9,547
0
369
0
369
66
9,981
4,149
1,532
2,617
8
3,119
670
9,095
2,644
1,153
3,052
0
2,247
5,528
5,326
202
3,567
9,981
31
324
16,928
17,252
0
17,017
3,037
20,054
14
37,320
19,147
3,775
15,373
154
15,404
0
15,062
4,394
3,840
2,269
122
4,437
8,673
8,448
225
6,389
37,320
53
324
20,997
21,321
280
2,205
19,849
22,054
14
43,669
27,147
4,446
22,702
170
15,404
0
14,186
4,369
3,096
2,163
122
4,437
8,793
8,568
225
5,393
43,669
66
324
24,984
25,308
628
2,505
22,549
25,054
14
51,004
36,547
5,338
31,210
185
15,404
0
15,089
5,423
3,838
1,269
122
4,437
10,884
10,659
225
4,205
51,004
78
FY10
FY11
FY12E
FY13E
44.5
43.2
16
39
92
(38)
1.6
0.1
0.0
0.0
34.6
35.9
25.3
25
35
84
(23)
1.7
3.1
1.2
1.2
11.4
27.6
18.2
25
35
84
(24)
1.6
3
1.0
1.0
7.2
28.4
19.5
25
35
84
(24)
1.4
2
1.0
1.0
8.2
FY10
FY11
FY12E
FY13E
11.0
64.0
11.8
40.2
14.3
6.6
32.9
0.9
14.9
35.1
16.4
29.8
8.3
4.4
25.2
1.1
16.4
10.3
19.4
27.0
6.7
3.6
20.3
1.6
20.5
24.6
24.3
21.7
5.7
3.0
16.6
1.5
Edelweiss
Securities Limited
Limited
Company Profile
GRASIM INDUSTRIES
On terra firma
February 7, 2012
Cement
Key takeaways
Market leadership to be maintained in both Cement and VSF
Absolute Rating
BUY
Outperformer
With capacity expansion of 9.2mtpa (estimated commissioning in Q1FY14) in

cement and 156ktpa in VSF (estimated commissioning in Q4FY13) Grasim Industries
(Grasim) will maintain its market leadership in both these segments. Post
completion of the current expansion plan, the companys total cement capacity
will increase to 62mtpa (capex outlay INR56bn) and VSF capacity will increase to
490ktpa (capex outlay INR21bn). Total capex is ~INR144bn including the capex
mentioned above and other capex for power plants, logistic infrastructure and
modernisation and upgradation projects.
Sustainable growth for cement industry
Grasim expects cement demand in India to grow at over 8% (in line with GDP
growth) over the next few years and believes the current surplus scenario to subside
over two-three years, aiding gradual improvement in cement realisation.

Underweight
MARKET DATA (R : GRAS.BO, B: GRASIM IN)

CMP
: INR 2,485
Target Price
: INR 2,517
52-week range (INR)
: 2,625 / 1,981
Share in issue (mn)
: 91.7
: 231 / 4,605
Volumes of both VSF and cement are estimated to significantly outperform the
industry growth in FY14, post completion of the current capex plan. Over the long
term, Grasim intends to maintain its current market share of 18% and will hence
look at further expansions. In VSF, the company has recently formalised plans to
set up 180ktpa greenfield capacity in Turkey in joint venture with group companies.
The companys balance sheet continues to remain strong with D/E ratio of just
0.3x.
Key risks
Promoters*
: 25.5
MFs, FIs & Banks
: 18.0
FIIs
: 23.5
Others
: 33.0

Nil
Sharp decline in prices of cement and VSF will significantly impact earnings.
Spike in coal and diesel cost will impact margin.
Stock
Nifty
EW Cement
Index
1 month
4.2
9.6
2.4
3 months
3.5
0.3
5.5
12 months
9.3
(7.1)
19.7
Financials
Year to March
Revenues (INR mn)
Rev. growth (%)
EBITDA (INR mn)
Net profit (INR mn)
EPS (INR)
EPS growth (%)
Diluted P/E (x)
EV/EBITDA (x)
ROE (%)
FY10
FY11
FY12E
FY13E
199,334
212,690
6.70
46,832
22,790
91.7
248.5
(17.4)
10.0
5.5
21.4
233,360
9.72
53,856
25,647
91.7
279.6
12.5
8.9
5.1
21.7
259,471
11.19
54,588
24,082
91.7
262.6
(6.1)
9.5
5.5
17.8
57,867
27,595
91.7
301.0
8.3
4.4
28.5

Navin Sahadeo
+91-22-6623 3473
Prasad Baji
+91-22-4040 7415
Balance sheet
Income statement
(INR mn)
Year to March
FY10
FY11
FY12E
FY13E

199,334
141,467
EBITDA
57,867
EBIT
47,920
Interest
3,346
Total other income
5,356
Profit before tax
49,930
Provision for tax
15,705
Core profit
34,225
Profit after tax
37,586
Less: Minority interest
6,631
Core profit after min. int.
27,595
91.7
Core EPS af. min. int (INR) basic 301.0
Diluted shares (mn)
92
Core EPS after min. int (INR) dil.301.0
30
Dividend payout (%)
12.8
212,690
165,858
46,832
11,384
35,449
4,056
7,135
38,528
9,576
28,952
28,952
6,162
22,790
91.7
248.5
92
248.5
20
16.6
233,360
179,504
53,856
10,368
43,488
2,641
5,911
46,758
12,747
34,012
34,012
8,364
25,647
91.7
279.6
92
279.6
30
8.7
259,471
204,883
54,588
11,059
43,529
3,050
4,423
44,902
13,038
31,864
31,864
7,782
24,082
91.7
262.6
92
262.6
30
13.4
FY11
FY12E
FY13E
78.0
5.4
1.9
22.0
13.6
76.9
4.4
1.1
23.1
14.6
79.0
4.3
1.2
21.0
12.3

Year to March
FY10
Operating expenses
Depreciation and amortisation
EBITDA margins
Net profit margins
Growth metrics (%)

Year to March
Revenues
EBITDA
PBT
Core net profit
EPS
Cash flow statement

Year to March
Net profit
Depreciation
Deferred tax
Others
Gross cash flow
Less:Changes in WC
Operating cash flow
Less: Capex
Free cash flow
71.0
5.0
1.7
29.0
17.2
FY10
FY11
FY12E
FY13E
8.3
33.7
38.4
30.9
26.2
6.7
(19.1)
(22.8)
(15.4)
(17.4)
9.7
15.0
21.4
17.5
12.5
11.2
1.4
(4.0)
(6.3)
(6.1)
FY10
FY11
FY12E
(INR mn)
FY13E
27,595
9,947
(3569)
11,011
44,984
(3,271)
48,254
14,555
33,699
22,790
11,384
151
9,584
43,909
8,299
35,610
14,326
21,284
34,012
10,368
0
0
44,380
48
44,332
51,300
(6,968)
31,864
11,059
0
0
42,923
2,699
40,225
55,000
(14,775)
33
(INR mn)
As on 31st March
FY10
FY11
FY12E
FY13E
Equity capital
917
Other Share capital
363
Reserves & surplus
123,967
Shareholders funds
125,246
Minority interest
37,548
Secured loans
38,508
Unsecured loans
17,484
Borrowings
55,992
Deferred tax (Net)
20,057
Sources of funds
238,844
Gross block
209,439
Depreciation
71,646
Net block
137,793
7,734
Intangible assets
20,071
Investments
66,759
Inventories
21,835
Sundry debtors
8,803
2,370
Loans and advances
12,362
10
45,379
Provisions
8,522
Total current liab. & prov.
38,891
Net current assets
6,488
Uses of funds
238,844
Book value per share (BV)
1,366
917
377
144,439
145,734
43,514
38,346
29,481
67,827
19,616
276,691
228,066
83,749
144,316
13,578
24,203
79,333
27,216
14,346
2,844
14,378
0
58,784
35,753
7,771
43,524
15,261
276,691
1,589
917
377
167,849
169,144
52,223
38,346
29,481
67,827
19,616
308,809
254,566
94,118
160,448
38,378
24,203
67,333
28,531
15,472
5,982
14,378
0
64,363
38,145
7,771
45,916
18,448
308,809
1,844
917
377
188,712
190,006
60,696
38,346
29,481
67,827
19,616
338,145
274,566
105,177
169,389
73,378
24,203
54,333
32,012
16,241
1,678
14,378
0
64,310
39,697
7,771
47,467
16,842
338,145
2,072
FY10
FY11
FY12E
FY13E
28.5
28.0
16
1.2
1.0
14.3
1.5
0.9
1.7
0.4
0.4
21.4
19.2
20
1.4
1.4
8.7
1.5
0.8
1.6
0.5
0.5
21.7
19.8
25
1.4
1.3
16.5
1.3
0.8
1.5
0.4
0.4
17.8
16.6
20
1.4
1.2
14.3
1.5
0.8
1.4
0.4
0.4
FY10
FY11
FY12E
FY13E
301.0
26.2
442.8
8.3
1.8
1.3
4.4
1.2
248.5
(17.4)
441.4
10.0
1.6
1.2
5.5
0.8
279.6
12.5
483.9
8.9
1.3
1.2
5.1
1.2
262.6
(6.1)
468.0
9.5
1.2
1.2
5.5
1.2
Ratios
Year to March
ROAE (%)
ROACE (%)
Debtors (days)
Current ratio
Debt/EBITDA
Interest cover (x)
Total asset turnover (x)
Equity turnover(x)
Debt/Equity (x)
Year to March
Diluted EPS (INR)
Y-o-Y growth (%)
CEPS (INR)
Diluted P/E (x)
Price/BV(x)
EV/Sales (x)
EV/EBITDA (x)
Dividend yield (%)
Edelweiss
Securities Limited
Limited
Company Profile
HAVELLS INDIA
Electrifying growth
February 7, 2012
Key takeaways
Havells India (Havells) reiterated its strategy of being a multi-product company

with strong focus on brand strengthening.
Absolute Rating
BUY
Outperformer
Given that large part of capex is done over the past few years, incremental capex
is going to be lower during FY13.

Underweight
To focus on new products like appliances and switchgear exports.

The company will continue its focus on distributors and have about 5,000
distributors with about 100,000 touch points.
In Sylvania, profitability dropped due to performance of the European region and
this is where restructuring helped.
The company is looking at 10-15% growth in Latin America.
Havells is looking at consolidating its outsourcing from China (currently at 5560%) through its joint venture with a local partner. It is looking at changing the
product mix from lamps to fixtures which is expected to help improve margin.
MARKET DATA (R : HVEL.BO, B: HAVL IN)

CMP
: INR 485
Target Price
: INR 477
52-week range (INR)
: 506 / 290
Share in issue (mn)
: 124.8
: 61 / 1,204
We expect Havells to continue to grow its domestic business on the back of strong
product portfolio. HAVL is currently one of the fastest growing fans brands in the
Indian market with market share at ~14%. The company has launched innovative
products with its energy efficient fans (consuming only 50W) making it the largest
energy efficient fan in the country. In the switchgear market, HAVLS is the market leader
in the low voltage segment with ~ 28% share (market size INR 12 bn) with the largest
manufacturing facility (48 mn pieces per annum) in the country. It has the second
largest CFL manufacturing capacity in India at 50 mn annually. In India, the company
has a network of ~4,000 distributors spread across the four regions servicing ~100,000
retailers. In international business, we believe Sylvania is on track to turnaround
business and improve overall margin with growth primarily coming from emerging
markets like Latin America and Asia including new markets. Any meaningful growth in
the European region could provide significant operating leverage.
Promoters*
: 61.6
MFs, FIs & Banks
FIIs
: 19.1
Others
: 18.1

1.2
Nil

Stock
Nifty
EW Capital
Goods Index
1 month
9.2
9.6
16.1
3 months
18.5
0.3
(7.1)
12 months
21.5
(7.1)
(25.5)
Key risks
Slowdown in domestic business. Slowdown in the international business could
put pressure on margins.
Financials - Consolidated
Year to March
Revenues (INR mn)
Rev. growth (%)
EBITDA (INR mn)
Net profit (INR mn)
EPS (INR)
EPS growth (%)
Diluted P/E (x)
EV/EBITDA (x)
ROE (%)
FY10
FY11
FY12E
FY13E
54,315
(1.8)
3,222
696
125
5.6
74.4
86.8
21.6
13.7
56,126
3.8
5,571
3,099
125
24.6
341.3
19.7
12.5
58.3
65,455
10.8
6,976
3,988
125
32.0
29.9
15.1
10.0
48.2
73,346
11.8
8,101
4,763
125
38.2
19.4
12.7
8.4
39.2

Rahul Gajare
+91-22- 4063 5561
Amit Mahawar
+91-22- 4040 7451
Swarnim Maheshwari
+91-22- 4040 7418
Financial Statements - Consolidated
Balance sheet
Income statement
Year to March
(INR mn)
FY10
FY11
FY12E
FY13E

54,315
Direct costs
32,430
Employee costs
7,645
Other expenses
11,019
51,093
EBITDA
3,222
837
EBIT
2,385
Interest expenses
979
Other income
222
Profit before tax
1,628
Provision for tax
932
Core profit
696
Extraordinary items
Profit after tax
696
696
Adjusted net profit
696
EPS (INR) basic
5.6
125
Dividend payout (%)
38.9
Tax rate (%)
57.2
56,126
35,753
6,405
8,398
50,556
5,571
804
4,766
902
237
4,102
1,031
3,071
31
3,102
(4)
3,099
3,099
24.6
125
11.8
25.1
65,862
41,069
6,734
11,430
59,233
6,629
1,012
5,617
1,026
108
4,698
996
3,702
3,702
3,702
3,702
29.7
125
15.2
21.2
73,119
45,770
6,886
12,829
65,485
7,634
1,191
6,443
965
132
5,610
1,201
4,409
4,409
4,409
4,409
35.3
125
12.7
21.4
FY11
FY12E
FY13E
90.1
1.4
1.6
9.9
5.5
89.9
1.5
1.6
10.1
5.6
89.6
1.6
1.3
10.4
6.0
FY10
FY11
FY12E
FY13E
(0.8)
11.7
100.0
80.8
74.4
3.3
72.9
152.0
341.3
341.3
17.3
19.0
14.5
20.6
20.6
11.0
15.2
19.4
19.1
19.1
FY10
FY11
FY12E
(INR mn)
FY13E
696
837
331
(1,493)
371
(2,543)
2,914
1,077
1,837
3,102
804
99
584
4,589
2,013
2,576
1,647
929
3,702
1,012
1,243
5,957
2,459
3,498
1,500
1,998
4,409
1,191
958
6,558
3,619
2,938
600
2,338

Year to March
FY10
Operating expenses
94.1
1.8
EBITDA margins
5.9
Net profit margins
1.3
Growth metrics (%)

Year to March
Revenues
EBITDA
PBT
Net profit
EPS
Cash flow statement

Year to March
Net profit
Depreciation
Deferred tax
Others
Gross cash flow
Less:Changes in WC
Operating cash flow
Less: Capex
Free cash flow
35
(INR mn)
As on 31st March
Equity capital
Reserves & surplus
Shareholders funds
Secured loans
Borrowings
Minority Interest
Sources of funds
Gross block
Depreciation
Net block
Total fixed assets
Goodwill
Inventories
Sundry debtors
Loand & Advances
other current assets
Provisions
Net current assets
Net deferred tax
Uses of funds
Ratios
Year to March
ROACE (%)
Inventory days
Debtors days
Payable days
Current ratio
Debt/EBITDA
Interest coverage
Debt/equity
Year to March
Diluted EPS (INR)
Y-o-Y growth (%)
CEPS
Diluted P/E (x)
Price/BV (x)
EV/Sales (x)
EV/EBITDA (X)
FY10
FY11
FY12E
FY13E
312
3,690
4,002
9,963
10,664
2
14,668
26,963
18,089
8,874
336
9,210
3,212
8,250
6,982
1,481
1,574
102
18,389
15,555
321
15,876
2,513
(266)
14,668
32
624
5,914
6,537
10,473
11,173
6
17,717
28,454
18,499
9,955
249
10,204
3,354
10,860
7,724
1,779
1,615
100
22,077
16,722
639
17,361
4,717
(559)
17,717
52
624
9,117
9,741
10,323
11,023
6
20,770
29,729
19,511
10,219
249
10,468
3,354
12,798
10,105
2,109
1,776
110
26,899
18,893
499
19,392
7,507
(559)
20,770
78
624
13,027
13,651
10,173
10,873
6
24,530
30,329
20,701
9,628
249
9,877
3,354
14,396
13,021
2,841
2,132
121
32,510
20,154
499
20,653
11,857
(559)
24,530
109
FY10
FY11
FY12E
FY13E
13.7
14.3
91
49
166
(26)
1.2
3.3
2.4
6.2
2.7
58.3
28.7
98
48
165
(19)
1.3
2.0
5.3
6.0
1.7
45.5
28.4
105
49
158
(4)
1.4
1.7
5.5
6.5
1.1
37.7
27.8
108
58
156
10
1.6
1.4
6.7
7.4
0.8
FY10
FY11
FY12E
FY13E
5.6
74.4
14.9
86.8
15.1
1.3
21.6
24.6
341.3
31.9
19.7
9.2
1.2
12.5
32.0
29.9
39.8
15.1
6.0
1.1
10.0
38.2
19.4
47.5
12.7
4.2
0.9
8.4
Edelweiss
Securities Limited
Limited
Company Profile
HDFC BANK
Quality player
February 7, 2012
Key takeaways
Asset quality continues to be good as in terms of business practices, sourcing

from branches have gone up. Also, on CV, SME segment the bank is resorting to
relationship banking wherein cash flows indicate any upcoming stress in advance.
Proportion of sales from DSA is also trending down.
Moderation in corporate loan book is due to conscious stance to allow some
short-term loans to run-off and reduced marginal NIMs being generated on the
same.
Retail has seen strong growth due to increase in market share in some segments
and benefiting from network expansionCVs, credit cards and personal loans. CV
segment in value terms, MHCV will be higher; mix has definitely shifted more
towards LCV in the past few quarters as it qualifies for PSL as well. Unsecured
portion is now 19% of the portfolio and continues to do well.
Slippages continue to be fairly stable QoQ. Actual losses in retail segment are
lower than expectedretail charge-offs are offset by better recoveries as well as
normal write-offs.
Forex revenues normally grow at 15-20% on annual basis. Quarterly volatility is
likely.
NIMs to be maintained in the 3.9-4.3% range.
Absolute Rating
HOLD
Performer

Equalweight
MARKET DATA (R : HDBK.BO, B: HDFCB IN)

CMP
: INR 510
Target Price
: INR 504
52-week range (INR)
: 519 / 396
Share in issue (mn)
: 2,341.3
: 1,193 / 23,751

Promoters*
: 23.2
MFs, FIs & Banks
: 10.9
FIIs
: 29.7
Others
: 36.2

Nil
Gold loans now constitute 1% of the loan book and likely to touch 4-5% over the
next 3-4 years.
The bank is carefully watching impact of saving bank rate hikes by a few private
sector banks before making any changes on the same.
Quality of earnings continues to improve given stable NIMs, steady advance growth
and benign LLPs. With stressed assets (restructured + GNPA) at a mere 1.4%, it is
best placed to navigate through asset quality pressures.

Stock
Nifty
EW BFSI
Index
15.8
1 month
10.1
9.6
3 months
2.6
0.3
3.9
12 months
17.8
(7.1)
(6.2)
Key risks
Higher than expected decline in CASA ratio and change in macro environment may
impact cost of funds and consequently margins. Lowerthan-expected asset growth.
Financials
Year to March
Net rev. growth (%)
Net profit (INR mn)
Diluted EPS (INR)
EPS growth (%)
Diluted PE (x)
Price to book (x)
ROAE (%)
FY10
FY11
FY12E
FY13E
121,942
13.8
29,487
2,289
12.9
22.1
39.5
5.4
16.3
148,783
22.0
39,264
2,326
16.9
31.0
30.2
4.7
16.7
177,250
19.1
50,677
2,326
21.8
29.1
23.4
4.1
18.6
207,288
16.9
61,985
2,326
26.6
22.3
19.1
3.5
19.6

Nilesh Parikh
+91-22- 4063 5470
Kunal Shah
+91-22- 4040 7579
Suruchi Chaudhary
+91-22-6623 3316
Balance sheet
Income statement
Year to March
(INR mn)
FY10
FY11
FY12E
FY13E
161,729
77,863
83,866
38,076
34,408
177
3,491
121,942
57,645
22,892
34,753
64,297
21,406
19,389
2,017
42,891
13,404
29,487
29,487
12.9
2.4
21.7
199,282
93,851
105,431
43,352
45,176
(1,290)
(534)
148,783
71,529
28,360
43,169
77,254
19,067
14,330
4,737
58,187
18,923
39,264
39,264
16.9
3.0
22.7
252,164
128,420
123,744
53,506
51,952
755
800
177,250
84,159
33,081
51,079
93,091
18,566
16,566
2,000
74,525
23,848
50,677
50,677
21.8
4.0
24.2
293,618
148,743
144,874
62,414
60,158
755
1,500
207,288
94,251
36,084
58,167
113,037
21,882
19,882
2,000
91,154
29,169
61,985
61,985
26.6
4.8
24.3
Growth metrics (%)

Year to March
FY10
FY11
FY12E
FY13E
NII growth
Fees growth
Opex growth
PPOP growth
PPP growth
Provisions growth
PAT growth
13.0
12.6
4.2
26.9
24.2
13.9
31.3
25.7
31.3
24.1
27.9
20.2
(10.9)
33.2
17.4
15.0
17.7
18.6
20.5
(2.6)
29.1
17.1
15.8
12.0
20.9
21.4
17.9
22.3

Year to March
FY10
FY11
FY12E
FY13E
10.8
7.5
8.3
4.3
3.8
4.5
7.0
4.5
47.3
31.3
11.0
7.4
8.4
4.4
3.8
4.3
7.7
4.6
48.1
32.5
11.6
8.0
8.9
4.4
4.3
5.1
7.9
4.7
47.5
32.0
11.3
7.6
8.8
4.4
4.2
5.1
7.4
4.6
45.5
32.0
Interest income
Interest expenses
Net Interest income
Non interest income
- Misc. income
Net revenues
Operating expense
- Employee exp
- Other opex
Preprovision profit
Provisions
- Other provisions
PBT
Taxes
PAT
Reported PAT
EPS (INR)
DPS (INR)
Payout ratio (%)
Yield on advances
Yield on assets
Cost of funds
Cost of deposits
Cost of borrowings
Spread
Cost-income
Tax rate
37
(INR mn)
As on 31st March
FY10
Liabilities
Equity capital
Reserves
Net worth
Sub bonds/pref cap
Deposits
Borrowings
Other liabilities
Total
Assets
Loans
Investments
Gilts
Others
Cash & equi
Fixed assets
Other assets
Total
Credit growth
Deposit growth
EA growth
SLR ratio
C-D ratio
Low-cost deposits
Gross NPA ratio
Net NPA ratio
Provision coverage
Net NPA / Equity
Capital adequacy
- Tier 1
Book value (INR)
FY11
FY12E
FY13E
4,577
4,652
4,652
4,652
210,648
249,140
287,564
334,457
215,225
253,793
292,216
339,109
63,531
73,928
83,928
93,928
1,674,044 2,085,864 2,419,642 2,864,786
65,626
70,013
85,740
110,740
206,160
289,929
338,703
406,443
2,224,586 2,773,526 3,220,229 3,815,006
1,258,306 1,599,827 1,919,792 2,303,750
510,504
536,518
613,823
729,009
75,572
172,776
166,167
183,117
299,424
296,688
333,623
393,338
21,228
21,707
23,858
24,914
59,552
146,011
162,964
180,877
2,224,586 2,773,526 3,220,229 3,815,006

Year to March
Fees/Assets
Net revenues/Assets
Provisions/Assets
Taxes/Assets
Total costs/Assets
ROA
Equity/Assets
ROAE
Year to March
Diluted EPS
EPS growth (%)
Diluted P/E (x)
Price/ BV (x)
Price/ ABV (x)
Dividend yield (%)
25.9
17.2
28.7
29.3
75.9
52.0
1.4
0.3
78.4
2.6
1.8
16.5
12.5
94.0
26.4
24.6
21.9
24.9
77.3
52.7
1.1
0.2
82.5
1.1
1.2
14.0
10.5
109.1
20.0
16.0
18.7
24.5
79.9
50.5
1.0
0.2
77.1
1.3
1.5
13.0
9.5
125.6
20.0
18.4
17.8
24.5
81.0
49.5
1.2
0.3
72.2
1.5
2.2
13.0
9.5
145.8
FY10
FY11
FY12E
FY13E
4.3
1.8
0.2
6.3
(3.0)
(1.1)
(0.7)
(4.7)
1.5
9.3
16.3
4.4
1.8
(0.0)
6.3
(3.0)
(0.8)
(0.8)
(4.6)
1.7
9.9
16.7
4.4
1.9
0.0
6.3
(3.0)
(0.7)
(0.8)
(4.5)
1.8
9.7
18.6
4.4
1.8
0.0
6.2
(2.8)
(0.7)
(0.9)
(4.4)
1.9
9.5
19.6
FY10
FY11
FY12E
FY13E
12.9
22.1
94
93
39.5
5.4
5.5
0.5
16.9
31.0
109
108
30.2
4.7
4.7
0.6
21.8
29.1
126
124
23.4
4.1
4.1
0.8
26.6
22.3
146
144
19.1
3.5
3.5
0.9
Edelweiss
Securities Limited
Limited
Company Profile
HEXAWARE TECHNOLOGIES
Sailing on strong winds
February 7, 2012
IT
Key takeaways
Hexaware highlighted its growth confidence for CY12 is emanating from: (a)
incremental revenues from ramp up of large deals (USD250mn and USD177mn
deal); (b) visibility of higher than company growth from 8 of the top 10 clients; (c)
strong revenue exit rate posted in Q4CY11; and (d) pipeline of large deals that it is
chasing (while this is not factored in growth guidance).
The account management structure that has been in place for top 25 accounts so
far, is now to be extended for the next 10 accounts. Its revamped sales (focused on
strength areas) and account management structure have driven significant growth
from its top 10 clients and increased the wallet share.
Multiple margins levers remain. Despite EBITDA margin reaching 23% (20%
adjusted for currency benefit), Hexaware is likely to sustain or improve margins
hereon. Key margin levers include higher off shoring, broadening of employee
pyramid (40% fresher intake), utilization, bill rates and G&A leverage.
It is chasing five large deals (TCV > USD25mn) of which, it is in advanced stage of
negotiations in two. Interestingly, these are relatively new clients where the
competition has been higher.
Absolute Rating
BUY
Outperformer

Equalweight
MARKET DATA (R : HEXT.BO, B: HEXW IN)

CMP
: INR 101
Target Price
: INR 115
52-week range (INR)
: 103 / 45
Share in issue (mn)
: 293.4
: 30 / 592

Promoters*
: 28.2
Importantly, growth from existing large clients is helping it scale younger service
lines e.g., IMS that now has over 400 people.
MFs, FIs & Banks
FIIs
: 41.4
Others
: 21.0

Over the past one year Hexaware has focused on improving operational efficiencies
and re-aligned itself vertically from earlier horizontal sales-based approach.
Further, strengthening of the sales force with 16 new recruits and new deal wins
reported in the past six months are likely to result in improving revenue traction
going forward. In addition, high US and BFSI exposure should aid growth in an
improving macro environment. We see Hexaware fundamentally strengthened with
the recent initiatives and with a healthy cash position it is well poised to explore
inorganic growth opportunities as well.
9.4
Nil

Stock
Nifty
EW IT
Index
(1.5)
1 month
8.2
9.6
3 months
(6.5)
0.3
4.0
12 months
45.6
(7.1)
(3.9)
Key risks
Double dip recession in its major market US and prolonged slowdown in Europe.
Appreciation of INR against USD, EUR, and GBP. Inadequate availability of
manpower.
Financials
Year to December
Revenues (INR mn)
Rev. growth (%)
EBITDA (INR mn)
Net profit (INR mn)
Diluted EPS (INR)
EPS growth (%)
Diluted P/E (x)
EV/EBITDA (x)
ROAE (%)
CY09
CY10
CY11E
CY12E
10,386
(9.8)
2,023
1,343
298
4.5
95.8
22.4
12.3
17.8
10,545
1.5
938
1,077
297
3.6
(19.6)
27.8
26.3
9.4
14,505
37.6
2,646
2,668
299
8.9
145.7
11.3
9.4
26.2
18,860
30.0
3,876
3,125
299
10.5
17.1
9.7
6.0
26.9

Kunal Sangoi
+91-22- 6623 3370
Sandip Agarwal
+91-22- 6623 3474
Omkar Hadkar
+91-22- 6620 3147
Balance sheet
Income statement
Year to December
Revenues
Cost of revenues
Gross profit
Total SG&A expenses
EBITDA
Depreciation & Amortization
EBIT
Other income
Profit before tax
Tax
Core Profit
Extraordinary income/(loss)
Profit after tax
Net profit after min. interest
EPS (INR) basic
Diluted shares (mn)
EPS (INR) diluted
CEPS (INR)
Dividend per share
Dividend (%)
(INR mn)
CY09
CY10
CY11E
CY12E
10,386
5,643
4,743
2,720
2,023
270
1,753
(307)
1,446
103
1,343
1,343
1,343
286.9
4.7
297.5
4.5
5.6
0.7
70.1
15.0
10,545
6,915
3,630
2,692
938
242
696
249
945
92
853
224
1,077
1,077
290.1
3.7
296.6
3.6
3.8
2.0
200.4
54.0
14,505
8,939
5,566
2,920
2,646
248
2,398
677
3,075
407
2,668
2,668
2,668
292.3
9.1
299.1
8.9
10.0
4.0
199.9
43.8
18,860
11,728
7,133
3,257
3,876
272
3,604
297
3,901
776
3,125
3,125
3,125
292.3
10.7
299.1
10.5
11.6
4.5
225.0
42.1

Year to December
CY09
CY10
CY11E
CY12E
Cost of revenues
Gross margin
G&A expenses
SG&A expenses
EBITDA margin
EBIT margin
Net profit margins
54.3
45.7
26.2
26.2
19.5
16.9
12.9
65.6
34.4
25.5
25.5
8.9
6.6
8.1
61.6
38.4
20.1
20.1
18.2
16.5
18.4
62.2
37.8
17.3
17.3
20.6
19.1
16.6
Growth metrics (%)

Year to December
CY09
CY10
CY11E
CY12E
(9.8)
57.0
72.1
76.2
101.6
95.8
1.5
(53.6)
(60.3)
(34.6)
(36.5)
(19.6)
37.6
182.1
244.5
225.4
212.8
145.7
30.0
46.5
50.3
26.9
17.1
17.1
CY10
CY11E
(INR mn)
CY12E
1,077
242
(634)
685
563
122
(542)
665
2,668
248
(657)
2,259
947
1,312
665
647
3,125
272
(297)
3,100
(389)
3,489
528
2,961
Revenues
EBITDA
EBIT
PBT
Net profit
EPS
Cash flow statement

Year to December
CY09
Net profit
1,343
Depreciation
270
Others
(304)
Gross cash flow
1,309
Less:Changes in working capital (201)
Operating cash flow
1,511
Less: Capex
82
Free cash flow
1,429
39
(INR mn)
As on 31st December
CY09
CY10
CY11E
CY12E

Reserves
Borrowings
Sources of funds
Goodwill & other intan.asset
Gross fixed assets
Net fixed assets
Capital WIP
Investments
Deferred tax asset
Debtors
Loans and advances
Sundry creditors
Provisions
Working capital
BV per share (INR)
290
4,726
3,482
8,497
163
10
8,670
1,207
3,298
1,404
1,893
1,258
1,269
121
2,992
1,526
1,113
5,632
1,998
710
2,709
2,923
8,670
30
291
4,774
4,590
9,655
112
13
9,780
1,160
3,469
1,519
1,950
969
397
182
4,356
1,919
1,632
7,907
1,475
1,309
2,785
5,123
9,780
33
585
4,479
5,647
10,711
13
10,724
1,160
4,667
1,767
2,899
436
500
162
4,101
2,861
1,200
8,163
1,745
850
2,595
5,567
10,724
37
585
4,479
7,473
12,537
13
12,551
1,160
5,369
2,039
3,329
262
1,000
162
5,326
3,514
1,000
9,840
2,222
980
3,202
6,638
12,551
43
CY09
CY10
CY11E
CY12E
17.8
24.7
63
88
(25)
2.1
5.9
1.3
1.4
9.4
8.3
60
60
(0)
2.8
5.5
1.1
1.2
26.2
24.5
60
41
20
3.1
6.0
1.4
1.4
26.9
33.1
62
38
23
3.1
6.1
1.6
1.6
CY09
CY10
CY11E
CY12E
4.5
95.8
5.6
22.4
3.4
2.4
12.3
26.5
0.7
3.6
(19.6)
3.8
27.8
3.0
2.3
26.3
9.3
2.0
8.9
145.7
10.0
11.3
2.8
1.7
9.4
6.4
4.0
10.5
17.1
11.6
9.7
2.4
1.2
6.0
5.9
4.5
Ratios
Year to December
ROAE (%)
ROACE (%)
Debtors (days)
Payable (days)
Current ratio
Equity turnover(x)
Year to December
Diluted EPS (INR)
Y-o-Y growth (%)
CEPS (INR)
Diluted P/E (x)
Price/BV(x)
EV/Revenues (x)
EV/EBITDA (x)
Dividend yield (%)
Edelweiss
Securities Limited
Limited
Company Profile
HDFC
The big daddy
February 7, 2012
Key takeaways
HDFC maintains its guidance of 20% loan growth, 2.2% spreads and steady asset
quality. While Mumbai and Delhi are seeing some moderation in demand, it is
being offset by robust demand from other metros and Tier-1 cites.
HDFC has outstanding loans under Dual Rate Home Loan scheme of INR223bn and
this entire portfolio will be converted into floating rate loans on April 1, 2012.
Of the 36% lending exposure to the non individual segment, developer loans account
for 12% while lease rental discounting constitutes 13 14%.
HDFC had USD1.1bn of foreign currency denominated liabilities, which were
completely hedged as of FY11. It has entered into USD697mn cross currency swaps
and interest rate swap converting its fixed rate INR liability into floating rate
forex liability to trim the overall cost of borrowing. Besides using principal only
swaps, currency option, forward contracts and cross currency swaps for hedging,
it has build USD denominated assets of USD500 600mn to create a natural hedge
against currency movement risk.
HDFC has been carrying zero coupon bonds of ~INR73bn (equivalent to the value
of its investments in subsidiaries) and interest on ZCBs of ~INR7bn will be adjusted
against its net worth as per its accounting policy.
HDFCs performance in 9mFY12 reinforces our expectation of 20% loan growth,
stable margins (at 3.5%) and an insignificant stress on asset quality. We maintain
our estimate of 18% CAGR in PAT over FY11 13E; interest on zero coupon bonds and
standard asset provisioning will be adjusted against excess reserves/networth.
Absolute Rating
HOLD
Underperformer

Equalweight
MARKET DATA (R : HDFC.BO, B: HDFC IN)

CMP
: INR 686
Target Price
: INR 647
52-week range (INR)
: 736 / 582
Share in issue (mn)
: 1,474.2
: 1,011 /20,119

Promoters*
MFs, FIs & Banks
: 28.7
FIIs
: 59.0
Others
: 12.3

Nil

Stock
Nifty
EW BFSI
Index
15.8
Key risks
Increase in competition and sustained slack in the mortgage market can lead to
lower growth than our estimates. Higher than expected increase in funding cost
and inability to pass the cost to customers in the current tightening monetary
environment will adversely affect margins and profitability. Risk of fraud and NPA
accretion due to increase in interest rates and fall in property prices is inherent to
the mortgage business.
0.0
1 month
4.8
9.6
3 months
4.9
0.3
3.9
12 months
7.1
(7.1)
(6.2)
Financials
Year to March
Net Interest Income(INR mn)
Net profit (INR mn)
EPS (INR)
EPS growth (%)
PE (x)*
Price to book (x)*
ROE (%)
FY10
FY11
FY12E
FY13E
33,875
28,265
287.1
19.7
22.7
31.3
10.3
20.0
42,471
35,350
293.4
24.1
22.4
24.6
8.1
21.7
50,886
41,871
294.3
28.5
18.1
19.5
6.8
23.3
60,597
49,452
305.9
32.3
13.6
17.0
4.4
23.1
* Adj. for subs.

Kunal Shah
+91-22- 4040 7579
Nilesh Parikh
+91-22- 4063 5470
Suruchi Chaudhary
+91-22-6623 3316
Balance sheet
Income statement
Year to March
(INR mn)
FY10
FY11
FY12E
FY13E
Interest income
104,506
Interest expended
70,631
Net interest income
33,875
Non interest income
7,008
2,317
- Income from investments
1,898
- Misc. income
2,794
40,884
Net revenues
40,884
Operating expenses
3,237
- Employee exp
1,467
- Depreciation /amortisation 182
- Other opex
1,589
Preprovision profit
37,646
Profit on sale of investments 2,094
Provisions
580
PBT
39,160
Taxes
10,895
PAT
28,265
Reported PAT
28,265
Basic number of shares (mn) 1,436
Basic EPS (INR)
19.7
Dil. number of shares (mn)
1,436
Diluted EPS (INR)
19.7
DPS (INR)
7.2
42.6
118,070
75,599
42,471
7,113
2,204
2,175
2,734
49,584
49,584
3,811
1,755
192
1,864
45,773
3,597
700
48,670
13,320
35,350
35,350
1,467
24.1
1,467
24.1
9.0
43.4
141,705
90,819
50,886
8,250
2,644
2,502
3,104
59,136
59,136
4,206
1,931
202
2,073
54,931
3,500
750
57,681
15,809
41,871
41,871
1,471
28.5
1,471
28.5
10.5
43.1
166,186
105,589
60,597
9,560
3,173
2,877
3,510
70,157
70,157
4,665
2,163
213
2,290
65,492
3,500
900
68,092
18,640
49,452
49,452
1,530
32.3
1,530
32.3
11.6
42.0
Growth metrics (%)

Year to March
Net interest income
Net revenues growth
Opex growth
PPP growth
Provisions growth
PAT growth

Year to March
YYield on assets
Yield on advances
Cost of funds
Spread
Cost-income
Tax rate
Sanctions and disbursements

Year to March
(INR mn)
As on 31st March
FY10
Liabilities
Equity capital
Share premium
Reserves & surplus
Net worth
Total deposits
Secured Loans
Unsecured Loans
Total liabilities
Assets
Loans
Investments
Current assets
Current liabilities
Net current assets
Fixed assets (net block)
Other assets
Total assets
Loan growth
Deposit growth
EA growth
CAR
FY11
FY12E
FY13E
10.9
19.9
2.6
16.0
14.5
23.8
25.4
23.7
17.7
21.6
20.7
25.1
19.8
17.8
10.3
20.0
7.1
18.4
19.1
17.6
10.9
19.2
20.0
18.1
FY10
FY11
FY12E
FY13E
10.1
10.9
7.8
2.2
3.3
8.0
27.8
9.7
10.5
7.1
2.6
3.5
7.8
27.4
9.9
10.8
7.3
2.7
3.6
7.2
27.4
10.0
10.7
7.2
2.7
3.6
6.7
27.4
FY10
FY11
Sanctions (INR mn)

606,110
Disbursements (INR mn)
504,130
Disb. to sanction ratio (%)
83.2
Disbursements growth (%)
27.1
Sanctions growth (%)
23.3
751,850
603,140
80.2
19.6
24.0
FY12E
FY13E
902,220 1,082,664
723,768
868,522
80.2
80.2
20.0
20.0
20.0
20.0
41
FY12E
FY13E
2,871
2,934
2,943
3,059
57,796
62,189
57,567
84,917
91,309
108,043
126,209
154,129
151,977
173,165
186,719
242,105
230,811
246,251
288,114
339,974
636,057
816,415
959,925 1,116,449
98,785
91,439
101,018
111,375
1,117,630 1,327,270 1,535,776 1,809,904
979,670 1,171,266 1,378,148 1,646,629
107,275
118,324
122,393
126,944
74,392
98,610
98,640
100,270
48,785
67,751
70,915
72,364
25,607
30,859
27,725
27,906
2,221
2,340
2,237
2,125
2,857
4,481
5,273
6,300
1,117,630 1,327,270 1,535,776 1,809,904
15.0
19.1
15.2
14.6
19.6
6.7
18.7
14.0
17.7
17.0
15.7
9.6
19.5
18.0
17.9
11.3
FY10
FY11
FY12E
FY13E
3.3
0.7
0.2
4.1
0.3
0.1
1.0
1.4
2.7
13.6
20.0
3.5
0.6
0.3
4.4
0.3
0.1
1.1
1.5
2.9
13.4
21.7
3.6
0.6
0.2
4.4
0.3
0.1
1.1
1.5
2.9
12.6
23.3
3.6
0.6
0.2
4.4
0.3
0.1
1.1
1.5
3.0
12.9
23.1
FY10
FY11
FY12E
FY13E
Diluted EPS (INR)

19.7
EPS growth (%)
22.7
106
Adj. book value per share (INR)* 5 2
Diluted P/E (x)
34.8
Price/ BV (x)
6.5
Price/ Adj. Earnings (x)*
31.3
Price/ Adj. BV (x)*
10.3
Dividend yield (%)
1.1
24.1
22.4
118
64
28.4
5.8
24.6
8.1
1.3
28.5
18.1
127
72
24.1
5.4
19.5
6.8
1.5
32.3
13.6
158
104
21.2
4.3
17.0
4.4
1.7

Year to March
FY10
FY11
Net interest income/assets

Non interest income/assets
Investment gains/assets
Net revenues/Assets
Operating expense/assets
Provisions/assets
Taxes/assets
Total costs/assets
ROA
Equity/assets
ROAE
Year to March
* adjusted for value of investments in subsidiaries

Edelweiss
Securities Limited
Limited
Company Profile
ICICI BANK
On growth path
February 7, 2012
Key takeaways
Pending restructuring, which is undergoing CDR mechanism, is INR13bn. This

includes GTL where their exposure is INR6.5bn.GTL has not yet been restructured
and will be reported in Q4FY12. Gross restructuring was INR8.3bn in Q3FY12,
INR7.5bn in Q2FY12 and INR1.5bn in Q1FY12.
To grow loan book by 15% in FY13: driven by 20% growth in domestic business
(contributed by retail, working capital demand, drawdown from past corporate
sanctions and PSL loan build up) and flat growth in the international business.
Asset liability in international business is adequately matched asset flows of
USD3.2bn will be sufficient to meet liability payment of USD2.7bn.
Will try to sustain CASA at the current level- 40% on average basis. On a sustainable
long term basis, no impact of savings deposit deregulation as it will be passed on.
Absolute Rating
BUY
Outperformer

Equalweight
MARKET DATA (R : ICBK.BO, B: ICICIBC IN)

CMP
: INR 937
Target Price
: INR 1,100
52-week range (INR)
: 1,137 / 641
Share in issue (mn)
: 1,152.6
: 1,080 / 21,494
Margins to be maintained at 2.7% in FY12 with improvement of 10bps expected in

FY13 largely on back of improvement in domestic business.
Credit cost guidance for FY12 maintained at 70bps and 75bps for FY13, lower than
the initial guidance of 100bps.
Opex to increase in line with balance sheet growth and cost/income for FY12 will
be similar to run rate as of 9mFY12 level (43.5%) and will try to bring it down to
41% in FY13. It will target opex to assets at 1.7-1.8% in the medium term.

Promoters*
MFs, FIs & Banks
: 27.9
0.0
FIIs
: 34.7
Others
: 37.3

Nil
Structurally, ICICI Bank has successfully switched from consolidation to the growth
phase with a leaner and robust business model (40% CASA to stay). Management
outlook for FY13: Stable margins from hereon and credit cost at ~75 80bps. Led by
18% CAGR in earnings on back of 19% loan growth and 2.5 2.6% margins, we
expect core ROA to stabilise at 1.5% and core ROE to touch 15%.
Key risks

Stock
Nifty
EW BFSI
Index
15.8
1 month
22.3
9.6
3 months
1.9
0.3
3.9
(10.1)
(7.1)
(6.2)
12 months
Main risks for ICICI is NPA risk due to its low cumulative provisions and lumpy
corporate exposures. With ~40% of retail asset book, it is vulnerable to system
wide deterioration in the quality of retail assets. Deterioration in the international
liquidity scenario will lead to slowdown in growth rates of the international
business.
Financials
Year to March
Net profit (INR mn)
Diluted EPS (INR)
EPS growth (%)
Diluted P/E (x)
Price to book (x)
ROAE (%)
Nilesh Parikh
FY10
FY11
FY12E
FY13E
155,947
40,250
36.1
6.9
26.0
2.0
8.0
156,648
51,514
44.7
23.9
21.0
2.0
9.7
177,910
62,382
54.2
21.1
17.3
1.8
10.9
216,133
75,041
65.1
20.3
14.4
1.7
12.1

+91-22- 4063 5470

Kunal Shah
+91-22- 4040 7579
Suruchi Chaudhary
+91-22-6623 3316
Balance sheet
Income statement
Year to March
(INR mn)
FY10
FY11
FY12E
FY13E
Interest income
259,741
Interest expenses
169,572
Net interest income
90,169
Non interest income
66,479
64,315
- Misc. income
4,186
(2,022)
Net revenues
156,648
Operating expense
66,173
- Employee exp
28,169
- Other opex
38,003
Preprovision profit
90,475
Provisions
22,898
19,769
2,038
- Other provisions
1,091
PBT
67,577
Taxes
16,063
PAT
51,514
Reported PAT
51,514
Diluted EPS (INR)
44.7
DPS (INR)
13.0
Payout ratio (%)
35.2
330,953
227,066
103,888
74,023
69,460
6,662
(2,100)
177,910
77,505
33,398
44,107
100,406
16,671
16,671
0
0
83,735
21,352
62,382
62,382
54.2
14.0
30.1
379,744
250,740
129,005
87,128
77,796
7,332
2,000
216,133
88,561
39,977
48,584
127,572
26,846
26,846
0
0
100,726
25,685
75,041
75,041
65.1
15.0
26.8
434,489
285,173
149,316
97,201
87,131
8,070
2,000
246,517
101,446
47,852
53,594
145,071
28,710
28,710
0
0
116,361
29,672
86,689
86,689
75.3
16.0
24.8
Growth metrics (%)

Year to March
FY10
FY11
FY12E
FY13E
NII growth
Fees growth
Opex growth
PPOP growth
PPP growth
Provisions growth
PAT growth
11.1
8.3
12.9
4.3
(7.1)
(54.7)
28.0
15.2
8.0
17.1
10.8
11.0
(15.7)
21.1
24.2
12.0
14.3
22.5
27.1
61.0
20.3
15.7
12.0
14.6
13.9
13.7
6.9
15.5

Year to March
FY10
FY11
FY12E
FY13E
8.3
7.1
7.2
2.5
5.1
4.7
6.8
2.0
42.2
23.8
9.0
7.6
8.0
2.50
6.0
5.3
6.9
2.0
43.6
25.5
8.7
7.4
7.8
2.66
5.6
4.8
6.4
2.2
41.0
25.5
8.4
7.1
7.6
2.61
5.4
4.5
6.0
2.3
41.2
25.5
Yield on advances
Yield on assets
Cost of funds
Cost of deposits
Cost of borrowings
Spread
Cost-income
Tax rate
43
(INR mn)
As on 31st March
FY10
Liabilities
Equity capital
Reserves
Net worth
Sub bonds/pref cap
Deposits
Borrowings
Other liabilities
Total
Assets
Loans
Investments
Gilts
Others
Cash & equi
Fixed assets
Other assets
Total
Credit growth
Deposit growth
EA growth
SLR ratio
C-D ratio
Low-cost deposits
Gross NPA ratio
Net NPA ratio
Provision coverage
Net NPA / Equity
Capital adequacy
FY11
FY12E
FY13E
11,518
11,518
11,518
11,518
539,388
582,967
637,861
703,060
550,906
594,485
649,379
714,578
367,414
372,414
377,414
382,414
2,256,021 2,663,525 3,158,048 3,816,271
728,132
873,427 1,091,987 1,316,691
159,864
193,435
232,121
278,545
4,062,337 4,697,285 5,508,949 6,508,498
2,163,659 2,593,028 3,086,627 3,678,942
641,613
796,139
935,333 1,129,577
705,247
689,222
768,226
857,429
340,901
378,503
443,979
525,778
47,443
42,588
37,419
31,935
163,475
197,804
237,365
284,837
4,062,337 4,697,285 5,508,949 6,508,498

Year to March
Fees/Assets
Net revenues/Assets
Provisions/Assets
Taxes/Assets
Total costs/Assets
ROA
Equity/Assets
ROAE
Year to March
Diluted EPS (INR)
EPS growth (%)
Diluted P/E (x)
Price/ BV (x)
Price/ ABV (x)
Dividend yield (%)
25.8
11.7
13.0
21.5
108.9
45.1
4.2
1.1
76.0
1.5
4.4
16.6
18.1
18.1
15.7
22.5
108.2
43.1
3.9
1.0
75.6
1.3
4.3
15.7
18.5
18.6
17.4
22.0
107.5
43.1
3.6
0.9
77.0
1.3
4.1
14.8
18.7
20.8
18.3
22.0
105.1
43.1
3.2
0.7
79.3
1.2
3.5
14.0
FY10
FY11
FY12E
FY13E
2.5
1.9
(0.1)
4.3
(1.8)
(0.6)
(0.4)
(2.9)
1.42
14.7
9.7
2.5
1.8
(0.1)
4.3
(1.9)
(0.4)
(0.5)
(2.8)
1.50
13.8
10.9
2.7
1.8
0.0
4.5
(1.8)
(0.6)
(0.5)
(2.9)
1.55
12.8
12.1
2.6
1.7
0.0
4.3
(1.8)
(0.5)
(0.5)
(2.8)
1.52
11.9
12.7
FY10
FY11
FY12E
FY13E
44.7
23.9
478.3
418.1
21.0
2.0
2.2
1.4
54.2
21.1
516.1
455.1
17.3
1.8
2.1
1.5
65.1
20.3
563.8
502.2
14.4
1.7
1.9
1.6
75.3
15.5
620.4
559.8
12.5
1.5
1.7
1.7
Edelweiss
Securities Limited
Limited
Company Profile
IDBI BANK
Global aspirations
February 7, 2012
Key takeaways
EDELWEISS RATINGS
On asset quality, the bank is confident that slippages should stabilize going forward.
It highlighted that even for Q3FY12, slippages would have been lower than Q1 and
Q2 but for one off large accounts. In terms of guidance, GNPA is likely to touch
2.4% and NNPA to clock 1.2% by FY13E.
Absolute Rating
NOT RATED
Along with reduced slippages, the bank also expects recoveries to be good from
both GNPAs and from written off accounts as well.
MARKET DATA (R : IDBI.BO, B: IDBI IN)
Given the experience while the bank was a DFI, the bank has stayed away from SEB
lending and will continue to do so. Major constituents of the restructured pool in
the power segment are Dabhol Ratnagiri and Lancos Udupi .
Restructuring pipeline includes accounts of Air India and 3i Infotech likely to
come up in either Q4FY12 or Q1FY13.
The government of India has agreed to convert INR21.3bn of Tier 1 bonds into
equity. While this will not boost Tier 1 capital since bonds were already a part of
Tier 1 it will be beneficial in transition to Basel 3.
With the regulator tightening portfolio buyout guidelines from NBFCs, meeting the
priority sector lending norms can be a little difficult.
Advances are likely to grow slower than the industry while NIMs are likely to come
in flat. RoA likely to improve to 0.9% in FY13E.
CMP
: INR 106
Target Price
: NA
52-week range (INR)
: 153 / 77
Share in issue (mn)
: 984.6
: 104 /2,071

Promoters*
: 65.1
MFs, FIs & Banks
: 15.6
FIIs
Others
: 16.0

3.3
Nil
Key risks
Exposure to some of the stressed sector is on the higher side (~45-50% of loans to
infra SME/MSME sector) versus sector average of ~30-35%.

Sensex
Stock
Stock over
Sensex
1 month
11.7
23.3
11.6
3 months
0.8
(7.1)
(7.9)
12 months
(1.8)
(20.2)
(18.4)
Financials
Year to March
Revenues (INR mn)
Rev growth (%)
Net Interest Income (INR mn)
Net profit (INR mn)
EPS (INR)
EPS growth (%)
PE (x)
Price to book (x)
Price to PPOP (x)
ROE (%)
FY08
FY09
FY10
FY11
24,359
41.9
6,564
7,295
724.8
10.1
15.7
10.2
1.1
24.1
11.2
28,016
15.0
13,259
8,585
724.8
11.8
17.7
8.7
1.0
8.0
12.1
45,578
62.7
22,561
10,311
724.9
14.2
20.1
7.2
0.9
3.7
13.2
64,125
40.7
43,289
16,503
985.6
16.7
17.7
6.1
0.8
2.5
15.8

Nilesh Parikh
+91-22- 4063 5470
Kunal Shah
+91-22- 4040 7579
Suruchi Chaudhary
+91-22-6623 3316
Balance sheet
Income statement
Year to March
Interest income
Interest expenses
Net Interest income
Non interest income
- Misc. income
Net revenues
Operating expense
- Employee exp
- Other opex
Preprovision profit
Provisions
- Other provisions
PBT
Taxes
PAT
Reported PAT
EPS
DPS
Payout ratio (%)
(INR mn)
FY08
FY09
FY10
FY11
80,208
73,644
6,564
17,795
4,644
1,468
11,683
24,359
9,588
3,846
5,742
14,771
6,547
1,336
3,573
1,638
8,225
930
7,295
7,295
10.1
2.0
22.9
116,316
103,057
13,259
14,757
8,127
1,277
5,354
28,016
13,337
5,692
7,644
14,680
4,826
1,438
2,262
1,126
9,854
1,269
8,585
8,585
11.8
2.5
24.7
152,613
130,052
22,561
23,017
14,449
1,621
6,947
45,578
18,314
7,570
10,744
27,264
16,817
2,363
2,474
11,979
10,447
136
10,311
10,311
14.2
3.0
24.1
186,008
142,719
43,289
20,837
18,040
1,595
1,202
64,125
22,547
10,265
12,282
41,579
18,769
3,716
3,770
11,283
22,810
6,307
16,503
16,503
16.7
4.0
24.2
Growth metrics (%)

Year to March
FY08
FY09
FY10
FY11
NII growth
Fees growth
Opex growth
PPOP growth
PPP growth
Provisions growth
PAT growth
(0.2)
43.8
23.2
(27.4)
57.5
156.7
15.7
102.0
75.0
39.1
202.0
(0.6)
(26.3)
17.7
70.2
77.8
37.3
117.8
85.7
248.5
20.1
91.9
24.8
23.1
98.7
52.5
11.6
60.0

Year to March
FY08
FY09
FY10
FY11
9.0
5.4
7.3
0.6
6.8
6.5
7.8
0.6
39.4
11.3
10.0
5.5
8.1
0.9
7.2
7.1
8.4
0.8
47.6
12.9
8.9
7.3
7.8
1.2
6.7
6.6
8.4
1.1
40.2
1.3
9.3
7.2
7.9
1.8
6.2
5.7
8.4
1.7
35.2
27.6
Yield on advances
Yield on assets
Cost of funds
Cost of deposits
Cost of borrowings
Spread
Cost-income
Tax rate
45
(INR mn)
As on 31st March
FY08
Liabilities
Equity capital
Reserves
Net worth
Sub bonds/pref cap
Deposits
Borrowings
Other liabilities
Total
Assets
Loans
Investments
Gilts
Others
Cash & equi
Fixed Assets
Other Assets
Total
Credit growth
Deposit growth
EA growth
SLR ratio
C-D ratio
Low-cost deposits
Gross NPA ratio
Net NPA ratio
Provision coverage
Incremental Slippage
Net NPA / Equity
Capital Adequacy
- Tier 1
Book Value
FY09
FY10
FY11
7,248
7,248
7,249
9,856
60,734
67,178
75,007
116,863
67,982
74,426
82,255
126,708
52,104
49,229
0
0
729,980 1,124,010 1,676,687 1,804,858
386,126
394,941
477,095
515,697
52,263
61,621
82,278
69,908
1,288,454 1,704,228 2,318,315 2,517,180
822,127 1,034,283 1,382,019 1,570,981
233,140
407,245
608,139
540,200
94,889
93,231
125,315
142,492
87,588
112,193
145,828
207,661
7,439
8,446
10,592
11,416
43,271
48,830
46,421
44,432
1,288,454 1,704,228 2,318,315 2,517,180

Year to March
Net Interest Income/Assets
Fees/Assets
Net revenues/Assets
Operating Expense/Assets
Provisions/Assets
Taxes/Assets
Total Costs/Assets
ROA
Equity/Assets
ROAE
Year to March
EPS
EPS growth (%)
Adjusted Book Value/share
Price/Earnings
Price/ BV
Price/ ABV
Dividend yield (%)
29.0
68.4
30.2
20.9
116.8
16.6
1.9
1.3
30.8
1.5
15.9
12.0
7.4
94
24.6
54.0
33.1
26.8
94.5
14.8
1.4
0.9
33.9
0.8
12.8
11.2
6.6
103
32.1
49.2
37.3
28.2
84.1
14.6
1.5
1.0
34.0
1.4
17.1
10.8
6.0
113
13.6
7.6
8.8
23.3
88.6
20.9
1.8
1.1
39.7
0.0
13.2
12.2
7.1
129
FY08
FY09
FY10
FY11
0.6
0.6
1.1
2.2
(0.9)
(0.6)
(0.1)
(1.6)
0.7
6.0
11.2
0.9
0.7
0.4
1.9
(0.9)
(0.3)
(0.1)
(1.3)
0.6
4.9
12.1
1.2
0.8
0.4
2.3
(0.9)
(0.9)
(0.0)
(1.8)
0.5
4.0
13.2
1.8
0.8
0.1
2.7
(1.0)
(0.8)
(0.3)
(2.0)
0.7
4.4
15.8
FY08
FY09
FY10
FY11
10.1
15.7
93.8
83.3
10.2
1.1
1.2
1.9
11.8
17.7
102.7
93.5
8.7
1.0
1.1
2.4
14.2
20.1
113.5
99.9
7.2
0.9
1.0
2.9
16.7
17.7
128.6
116.6
6.1
0.8
0.9
3.9
Edelweiss
Securities Limited
Limited
Company Profile
INDOCO REMEDIES
Building blocks for future growth
February 7, 2012
Pharmaceuticals
Key takeaways
EDELWEISS RATINGS
Domestic formulation market: A key growth driver
Absolute Rating
NOT RATED
Domestic formulation business, which contributes 67% to total revenues, has

been a key growth driver for the company. Indoco has a fairly large presence in the
acute segment (antibiotic being the largest segment for the company) and it is
expanding presence in high growth chronic segment by venturing into high growth
segments of CVS, diabetics and pain management.
MARKET DATA (R : INRM.BO, B: INDR IN)
Betting on strategic alliance to tap global opportunities

To tap the rowing opportunity in sterile space, Indoco has entered into a strategic
alliance with Watson for US market and Aspen for emerging markets. Indoco has
identified around 10-12 products in opthal space (USD1bn opportunity) out of
which 5-6 ANDAs have already been filed (expect initial launches in FY14E).
Similarly, the tie up with Aspen is for 30 emerging markets and largely in sterile
segment.
CMP
: INR 418
Target Price
: NA
52-week range (INR)
: 485 / 360
Share in issue (mn)
: 12.3
: 5 / 102
Focus on ophthalmic segment

Indoco is focusing on the ophthalmic segment in regulated markets as well as
emerging markets. In addition to tie up with Watson and Aspen, the company has
also set up a JV with Amneal Pharmaceuticals. US ophthalmic market is estimated
to be around USD4bn and dominated by players like Alcon, Allegran, Santen and
Bausch & Lomb.
Key risks

Promoters*
: 61.1
MFs, FIs & Banks
: 14.1
FIIs
Others
: 22.0

2.8
Nil
Over dependency in acute segment in the domestic market.

Change in pricing policy could have negative impact.
Sensex
Stock
Stock over
Sensex
(6.5)
Regulatory risks in the US.

1 month
11.7
5.2
3 months
0.8
6.6
5.8
12 months
(1.8)
2.9
(1.1)
Financials
Year to March
FY08
FY09
FY10
FY11
Revenues (INR mn)

Rev. growth (%)
EBITDA (INR mn)
Net profit (INR mn)
EPS (INR)
EPS growth (%)
Diluted P/E (x)
EV/EBITDA (x)
ROE (%)
2,624
NM
409
317
12.3
25.8
NM
16.3
14.6
12.4
3,551
35.3
462
314
12.3
25.5
(0.8)
16.4
12.9
11.3
4,022
13.3
537
422
12.3
34.3
34.3
12.2
11.1
13.6
4,835
20.2
644
511
12.3
41.6
21.2
10.1
9.3
14.6

Manoj Garg
+91-22-6623 3302
Perin Ail
+91-22-6620 3032
Balance sheet
Income statement
(INR mn)
Year to March
FY08
FY09
FY10
FY11

2,624
Direct costs
1,124
Employee costs
325
Other expenses
765
2,215
EBITDA
409
78
EBIT
332
Interest expenses
36
Other income
25
Profit before tax
320
Provision for tax
20
Core profit
301
Extraordinary items
(16)
Profit after tax
317
317
Adjusted net profit
317
EPS (INR) basic
25.8
12
Dividend payout (%)
21.0
Tax rate (%)
6.1
3,551
1,540
452
1,097
3,089
462
112
350
59
39
331
17
314
0
314
314
314
25.5
12
21.0
5.1
4,022
1,772
533
1,181
3,485
537
121
416
29
45
431
10
421
(1)
422
422
422
34.3
12
21.0
2.4
4,835
2,182
636
1,373
4,190
644
135
510
24
80
566
55
511
0
511
511
511
41.6
12
20.0
9.7
FY09
FY10
FY11
87.0
3.1
1.6
13.0
8.8
86.7
3.0
0.7
13.3
10.5
86.7
2.8
0.5
13.3
10.6

Year to March
FY08
Operating expenses
EBITDA margins
Net profit margins
Growth metrics (%)

Year to March
Revenues
EBITDA
PBT
Net profit
EPS
Cash flow statement

Year to March
Net profit
Depreciation
Deferred tax
Gross cash flow
Less:Changes in WC
Operating cash flow
Less: Capex
Free cash flow
84.4
3.0
1.4
15.6
12.1
FY08
FY09
FY10
FY11
(19.0)
(28.0)
(31.0)
(26.0)
(26.0)
35.3
12.9
3.4
(0.8)
(0.8)
13.3
16.1
30.2
34.3
34.3
20.2
20.1
31.2
21.2
21.2
FY08
FY09
FY10
(INR mn)
FY11
317
78
12
407
(112)
295
(152)
143
314
112
11
436
(59)
377
(302)
76
422
121
13
555
(77)
478
(481)
(3)
511
135
15
660
(239)
421
(807)
(386)
47
(INR mn)
As on 31st March
Equity capital
Reserves & surplus
Shareholders funds
Secured loans
Borrowings
Sources of funds
Gross block
Depreciation
Net block
Total fixed assets
Inventories
Sundry debtors
Provisions
Net current assets
Net deferred tax
Uses of funds
Ratios
Year to March
ROACE (%)
Inventory days
Debtors days
Payable days
Current ratio
Debt/EBITDA
Interest coverage
Debt/equity
Year to March
Diluted EPS (INR)
Y-o-Y growth (%)
CEPS
Diluted P/E (x)
Price/BV (x)
EV/Sales (x)
EV/EBITDA (X)
FY08
FY09
FY10
FY11
123
2,421
2,543
221
121
2,886
2,190
474
1,716
18
1,735
443
1,078
161
309
1,991
517
104
621
1,371
(219)
2,886
235
123
2,662
2,785
399
158
3,343
2,343
584
1,759
163
1,922
525
1,003
290
415
2,233
521
63
583
1,650
(230)
3,343
272
123
2,983
3,106
570
91
3,766
2,676
702
1,974
305
2,279
691
907
376
537
2,511
636
146
782
1,729
(243)
3,766
306
123
3,380
3,503
920
80
4,502
2,959
833
2,126
822
2,948
804
918
271
691
2,684
709
164
873
1,811
(257)
4,502
366
FY08
FY09
FY10
FY11
11.0
12.2
62
150
72
140
3.2
0.8
0.1
1.5
0.1
9.4
11.5
54
103
54
104
3.8
1.2
0.1
2.0
0.2
11.2
12.3
63
82
58
87
3.2
1.2
0.1
2.0
0.2
11.4
12.1
61
69
54
77
3.1
1.6
0.0
2.3
0.3
FY08
FY09
FY10
FY11
25.8
NM
32.1
16.3
1.8
2.3
14.6
25.5
(0.8)
34.6
16.4
1.5
1.7
12.9
34.3
34.3
44.1
12.2
1.4
1.5
11.1
41.6
21.2
52.5
10.1
1.1
1.2
9.3
Edelweiss
Securities Limited
Limited
Company Profile
INFOEDGE INDIA
Growth to be impacted in near term
February 7, 2012
IT
Key takeaways
Info Edge (IEL) highlighted that growth in collections continues to remain weak
primarily due to slowdown in the domestic economy as high correlation exists
with the absolute GDP growth level and its delta.
IEL highlighted that to improve the realization in Naukri.com it has also started
capping the usage on a per licence basis and adding pay per use revenue model.
Earlier, licence pricing has time limitation that now has second usage filter.
Management continues to be optimistic on its online real estate business as it has
seen stronger adoption of the online medium by broker community. It highlighted
that the number of registered brokers has doubled over the past two years (healthy
sign). Magicbrick.com (Times Group) is also emerging as key competitor here.
It shared that it will continue to invest in marketing 99acres.com with budgeted
INR100mn-120mn and also add to its 250 people on ground sales team.
On the education segment, Shiksha.com is gaining increased student acceptance
with 500,000 visitors and revenue base of ~INR100mn, but IEL believes the scalable
revenue model is yet to be proven.
Absolute Rating
REDUCE
Underperformer

Equalweight
MARKET DATA (R : INED.BO, B: INFOE IN)

CMP
: INR 645
Target Price
: INR 600
52-week range (INR)
: 772 / 460
Share in issue (mn)
: 54.6
: 35 / 701

Promoters*
: 53.9
MFs, FIs & Banks
FIIs
: 26.1
IEL is a long term play on the internet space in India. With lead in the online
recruitment market (through Naukri.com) and presence in the online classified
space has the potential to establish a market leading position and grab large pie
of increasing online adoption. As various businesses come out of the recent
slowdown we see recruitment industry to grow significantly as it is highly correlated
to the economic health of the growth of domestic corporate sector. We expect IELs
earnings growth at 25% CAGR over FY11-13E.
Others
: 10.6

Key risks
1 month
Nil

Stock
3 months
Faster than anticipated scale up of non-recruitment segments.
9.4
Nifty
EW IT
Index
(1.5)
2.7
9.6
(13.7)
0.3
4.0
6.8
(7.1)
(3.9)
12 months
Strong profitability from investee companies.
Financials (Standalone)
Year to March
FY10
FY11
FY12E
FY13E
Revenues (INR mn)

Rev. growth (%)
EBITDA (INR mn)
Net profit (INR mn)
Diluted EPS (INR)
EPS growth (%)
Diluted PE (x)
EV/EBITDA (x)
ROAE (%)
2,322
(5.3)
666
598
58
10.3
(3.7)
62.8
50.4
18.1
2,936
26.4
977
840
55
15.4
49.8
41.9
31.2
19.5
3,684
25.5
1,362
1,121
54.7
20.5
33.2
31.5
21.6
22.8
4,400
19.4
1,681
1,314
54.8
24.0
17.0
26.9
16.7
21.5

Kunal Sangoi
+91-22- 6623 3370
Sandip Agarwal
+91-22- 6623 3474
Omkar Hadkar
+91-22- 6620 3147
Balance sheet (Consolidated)
Income statement (Standalone)

Year to March
(INR mn)
FY10
FY11
FY12E
FY13E
Revenues
2,322
Cost of revenues
960
Gross profit
1,362
S&M expenses
374
G&A expenses
322
Total SG&A expenses
696
EBITDA
666
61
EBIT
605
Interest expense
1
Other income
320
Profit before tax
925
Tax
317
Core profit
607
(38)
Profit after tax
569
Min. int. & others - paid/(recd.) (28)
Net profit after min. int.
598
58.2
EPS (INR) basic
10.3
Diluted shares (mn)
58.2
EPS (INR) diluted
10.3
CEPS (INR)
12.0
Dividend per share
0.4
Dividend (%)
3.5
3.4
2,936
1,233
1,704
380
347
727
977
71
906
1
283
1,188
400
788
52
840
840
54.6
15.4
54.6
15.4
15.7
0.8
7.5
4.9
3,684
1,437
2,247
517
368
885
1,362
77
1,285
334
1,619
498
1,121
1,121
1,121
54.7
20.5
54.7
20.5
21.9
1.0
10.0
4.9
4,400
1,707
2,693
572
440
1,012
1,681
130
1,551
410
1,961
647
1,314
1,314
1,314
54.8
24.0
54.8
24.0
26.4
1.0
10.0
4.2

Year to March
FY10
FY11
FY12E
FY13E
Cost of revenues
Gross margin
G&A expenses
S&M expenses
SG&A expenses
EBITDA margin
EBIT margin
Net profit margins
41.4
58.6
13.9
16.1
30.0
28.7
26.0
26.1
42.0
58.0
11.8
13.0
24.8
33.3
30.8
26.8
39.0
61.0
10.0
14.0
24.0
37.0
34.9
30.4
38.8
61.2
10.0
13.0
23.0
38.2
35.2
29.9
Growth metrics (%)

Year to March
FY10
FY11
FY12E
FY13E
(5.3)
2.1
4.1
6.6
2.1
(3.7)
26.4
46.7
49.7
28.5
40.5
49.8
25.5
39.5
41.9
36.3
33.5
33.2
19.4
23.4
20.7
21.1
17.2
17.0
Revenues
EBITDA
EBIT
PBT
Net profit
Diluted EPS
Cash flow statement
Year to March
Net profit
Depreciation
Others
Gross cash flow
Less:Changes in WC
Operating cash flow
Less: Capex
Free cash flow
FY10
FY11
FY12E
(INR mn)
FY13E
598
61
(304)
355
(22)
376
44
332
840
71
(413)
498
(540)
1,038
429
609
1,121
77
(334)
864
(224)
1,089
271
818
1,314
130
(410)
1,034
(188)
1,221
125
1,096
49
As on 31st March
(INR mn)
FY10
FY11
FY12E
FY13E

273
28
Reserves
3,445
3,746
Borrowings
6
Minority interest
Sources of funds
3,752
Goodwill & Other Intan. Asset
0
Gross fixed assets
581
287
Net fixed assets
294
Capital WIP
69
Investments
1,162
Deferred tax asset
34
2,791
Debtors
80
Loans and advances
219
3,090
Sundry creditors
812
Provisions
84
896
Working capital
2,194
3,752
Book value per share (BV) (INR)
64
546
31
3,774
4,351
7
16
4,374
29
890
332
557
154
2,641
59
2,076
149
200
2,426
1,358
135
1,493
933
4,374
80
547
31
4,880
5,458
16
5,474
29
1,140
423
716
175
3,214
59
2,649
61
250
2,959
1,562
117
1,678
1,281
5,474
100
548
31
6,192
6,771
16
6,787
29
1,240
554
686
200
4,014
59
3,355
72
290
3,717
1,796
122
1,918
1,799
6,787
124
FY10
FY11
FY12E
FY13E
18.1
21.4
9
119
(110)
3.4
7.8
0.7
0.7
19.5
41.9
14
135
(121)
1.6
6.9
0.7
0.7
22.8
64.4
10
145
(134)
1.8
5.8
0.7
0.8
21.5
61.6
6
139
(134)
1.9
6.3
0.7
0.7
FY10
FY11
FY12E
FY13E
10.3
(3.7)
12.0
62.8
10.0
14.5
16.2
50.4
34.4
0.1
15.4
49.8
15.7
41.9
8.1
10.4
12.0
31.2
22.4
0.1
20.5
33.2
21.9
31.5
6.5
8.0
9.6
21.6
17.5
0.2
24.0
17.0
26.4
26.9
5.2
6.4
8.0
16.7
13.3
0.2
Ratios
Year to March
ROAE (%)
ROACE (%)
Debtors (days)
Payable (days)
Current ratio
Equity turnover(x)
Year to March
Diluted EPS (INR)
Y-o-Y growth (%)
CEPS (INR)
Diluted P/E (x)
Price/BV(x)
EV/Revenues (x)
Mcap/Revenues (x)
EV/EBITDA (x)
Dividend yield (%)
Edelweiss
Securities Limited
Limited
Company Profile
INFRASTRUCTURE DEVELOPMENT FINANCE

Growth focus
February 7, 2012
Key takeaways
Loan book growth to be at 20% in FY12 and FY13 higher than the initial guidance
of 15%, largely supported by refinancing opportunities and traction in the telecom
sector.
Margins to be stable to improving as rates cycles reverses and management expects
to remain with long term averages.
Management does not expect GNPL to cross 1% in the worst case scenario over the
next 12-18 months.
Management expects to report INR800mn in Q3 from the stake sale in the AMC.
Factoring in higher principal investments we have revised up our FY12E earnings
5%. We further lower our loan growth assumption to ~18% CAGR from 21% earlier
due to slowdown in fresh sanctions coupled with issues in the power sector and
are building in lower fee-based income. Management indicated that it will focus
on multi-dimensional transactions (spreads+fees) and high yielding non-infra
deals which will provide some cushion to earnings. Despite this, RoE is likely to
remain subdued at ~12% due to front-ended capital raising. Our SOTP fair value
for the stock stands at INR153 per share. The stock is currently trading 1.4x FY13E
(net of subs value of INR19).
Key risks
There are risks of margin compression, as the infrastructure financing space is
keenly contested. Being an NBFC, IDFC is dependent on wholesale funding. Hence,
high interest rates will remain a risk. Large ticket lending makes IDFCs loan book
riskier than other banks. NPA occurrence due to large ticket size can dent its future
earnings. As it now generates more than 40% of non-interest income, revenue can
be lumpy in nature (especially in investment banking and principal investment
book).
Absolute Rating
HOLD
Performer

Equalweight
MARKET DATA (R : IDFC.BO, B: IDFC IN)

CMP
: INR 136
Target Price
: INR 153
52-week range (INR)
: 167 / 90
Share in issue (mn)
: 1,463.5
: 199 / 3,963

Promoters*
MFs, FIs & Banks
: 37.9
0.0
FIIs
: 45.8
Others
: 16.3

Nil

Stock
Nifty
EW BFSI
Index
15.8
1 month
35.7
9.6
3 months
2.7
0.3
3.9
(12.2)
(7.1)
(6.2)
12 months
Financials
Year to March
Revenues (INR mn)
Rev growth (%)
Net int. income (INR mn)
Net profit (INR mn)
Diluted EPS (INR)
EPS growth (%)
Diluted P/E (x)
Price to adj. book (x)
ROAE (%)
FY10
FY11
FY12E
FY13E
21,070
35.4
11,180
10,614
5,710
8.2
41.0
16.7
2.6
16.1
25,470
20.9
16,450
12,805
9,787
8.8
7.6
15.5
1.8
14.0
29,890
17.4
20,849
15,212
11,751
10.1
15.0
13.5
1.6
12.4
33,511
12.1
24,666
17,728
13,174
11.8
16.5
11.5
1.4
12.7

Kunal Shah
+91-22- 4040 7579
Nilesh Parikh
+91-22- 4063 5470
Suruchi Chaudhary
+91-22-6623 3316
Balance sheet
Income statement
Year to March
(INR mn)
FY10
FY11
FY12E
FY13E
Interest income
30,715
Interest expended
19,535
Net interest income
11,180
Non interest income
9,890
2,560
3,330
- Asset management fee
2,890
- Investment advisory fee
1,110
21,070
Net revenues
21,070
Operating expenses
5,481
- Employee exp
3,072
- Depreciation /amortisation 406
- Other opex
2,004
Preprovision profit
15,588
Provisions
1,298
PBT
14,291
Taxes
3,677
PAT
10,614
Share of asso./min. interest
1
PAT after minority interest 10,615
Reported PAT
10,615
Basic EPS (INR)
8.2
1,301
Diluted EPS (INR)
8.2
DPS (INR)
1.5
12.5
40,325
23,875
16,450
9,020
2,740
2,340
2,480
1,460
25,470
25,470
5,321
2,956
402
1,963
20,149
2,346
17,803
4,998
12,805
26
12,831
12,831
1,461
8.8
1,461
8.8
2.0
12.5
55,159
34,310
20,849
9,041
2,541
3,300
2,397
803
29,890
29,890
6,791
3,561
482
2,748
23,100
2,223
20,876
5,665
15,212
26
15,237
15,237
1,509
10.1
1,509
10.1
2.0
12.5
65,931
41,265
24,666
8,845
2,982
2,500
2,480
883
33,511
33,511
7,393
3,859
527
3,007
26,118
1,658
24,460
6,732
17,728
26
17,754
17,754
1,509
11.8
1,509
11.8
2.0
12.5
FY10
FY11
FY12E
FY13E
24.0
35.4
49.5
31.1
(15.3)
41.6
47.1
20.9
(2.9)
29.3
80.8
20.9
26.7
17.4
27.6
14.6
(5.2)
18.8
18.3
12.1
8.9
13.1
(25.4)
16.5
FY10
FY11
FY12E
FY13E
9.5
10.8
7.8
3.5
26.0
25.7
9.7
12.1
7.6
4.0
20.9
28.1
10.4
12.3
8.6
3.9
22.7
27.1
10.5
12.6
8.7
3.9
22.1
27.5
Growth metrics (%)

Year to March
Net interest income
Net revenues growth
Opex growth
PPP growth
Provisions growth
PAT growth

Year to March
Yield on assets
Yield on advances
Cost of funds
Cost-income
Tax rate
(INR mn)
As on 31st March
Liabilities
Equity capital
Share premium
Reserves & surplus
Net worth
Preference capital
Subordinate debt
Secured loans
Unsecured loans
Total liabilities
ASSETS
Loans
Investments
Current assets
Current liabilities
Net current assets
Total assets
Loan growth
EA growth
Gross NPA ratio
Net NPA ratio
Provision coverage
CAR
FY10
FY11
FY12E
FY13E
13,006
22,040
35,057
70,103
14,609
47,004
50,871
112,484
15,085
54,928
62,585
132,599
15,085
54,928
76,816
146,830
6,500
6,500
6,500
6,500
258,939
335,542
356,540
475,525
424,903
564,002
512,948
666,277
250,311
46,417
35,262
12,557
22,704
16,109
335,542
376,523
69,611
30,926
17,644
13,282
16,108
475,525
438,150
81,238
44,905
16,502
28,403
16,210
564,002
534,144
89,740
45,533
19,224
26,309
16,084
666,277
22
13
0.4
0.2
46.7
21.2
50.4
42
0.3
0.2
44.2
23.8
16.4
18
0.3
0.2
47.3
23.1
21.9
18
0.4
0.1
76.4
13.2
FY10
FY11
FY12E
FY13E
3.5
2.0
1.0
6.5
1.7
0.4
1.1
3.2
3.3
20.4
16.1
4.0
1.6
0.6
6.1
1.3
0.6
1.2
3.0
3.1
21.9
14.0
3.9
1.1
0.6
5.6
1.3
0.4
1.1
2.8
2.9
23.0
12.4
3.9
1.0
0.4
5.3
1.2
0.3
1.1
2.5
2.8
22.2
12.7
FY10
FY11
FY12E
FY13E
8.2
41.0
53.9
53.6
16.7
2.5
2.6
1.1
8.8
7.6
77.0
76.7
15.5
1.8
1.8
1.5
10.1
15.0
87.9
87.5
13.5
1.5
1.6
1.5
11.8
16.5
97.3
97.1
11.5
1.4
1.4
1.5

Year to March
Investment gains/assets
Net revenues/assets
Provisions/Assets
Taxes/Assets
Total costs/Assets
ROA
Equity/Assets
ROAE
Year to March
Year to March
FY10
FY11
FY12E
FY13E
Sanctions (INR mn)

304,420
129,620
Disburs. to sanction ratio (%)
43
60
195
427,160
267,020
63
106
40
384,444
249,889
65
(6)
(10)
461,332
299,866
65
20
20
51
Diluted EPS (INR)

EPS growth (%)
Adj. book value per share (INR)
Diluted P/E (x)
Price/ BV (x)
Price/ Adj. BV (x)
Dividend yield (%)
Edelweiss
Securities Limited
Limited
Company Profile
JSW ENERGY
Power play
February 7, 2012
Power
Key takeaways
Management indicated that Q4FY12 earnings will be better due to capacity addition
in Barmer as well as favourable forex movement. Post the final tariff approval in
Barmer (Rajasthan) apart from 300 MW that is being sold at INR3.6 /kwh to
MSEDCL from the Ratnagiri plant the company is making profits in all its other
units. The ad-hoc Barmer tariff is ~INR3/kwh which should be ~ INR4/kwh to earn
regulated return.
The only capacity addition will be the 540 MW over the next 6 months, post which
there would be a lull for 3-4 years as the expansions at Chattisgarh, Bengal, Kuter,
HP and Barmer expansion are not expected before FY17/18.
In Vijaynagar the tariffs are likely to get revised to INR 5.3/kwh from the existing
INR4.35.0 /kwh in phases starting June 2012. Long term merchant prices are
expected to trade in the INR4.254.5 /kwh range.
The company has stopped supplying to TN and UP due to payment related issues.
It is not facing any payment issues from Karnataka (despite the state restricting
external power sales) and Maharashtra.
The JV with Toshiba (20% held by JSW Energy) is expected to start operations in
2013. Equipment for further expansions by JSW Energy will be sourced through
this JV.
We believe earnings are likely to improve going forward post the regulatory
approval, decline in INR/USD rates as well as higher blending of Indonesian coal
~70% compared to existing ~60%.
Absolute Rating
HOLD
Outperformer

Underweight
MARKET DATA (R : JSWE.BO, B: JSW IN)

CMP
: INR 53
Target Price
: INR 51
52-week range (INR)
: 87 / 35
Share in issue (mn)
: 1,640.1
: 88 / 1,745

Promoters*
: 76.7
MFs, FIs & Banks
5.7
FIIs
3.9
Others
: 13.7

: 21.8

Stock
Nifty
EW Metals
and Mining
Index
37.3
9.6
14.2
Key risks
Adverse regulatory ruling, sustained higher international coal prices, and sharp
fall in merchant prices.
1 month
3 months
12 months
5.1
0.3
(3.1)
(39.4)
(7.1)
(14.5)
Financials
Year to March
Revenue (INR mn)
Rev. growth (%)
EBITDA (INR mn)
Net profit (INR mn)
EPS (INR)
EPS growth (%)
P/E (x)
EV/EBITDA (x)
ROAE (%)
FY10
FY11
FY12E
FY13E
23,551
28.3
12,189
7,509
1,640
4.6
(9.6)
11.7
12.0
24.0
42,944
82.3
15,642
8,418
1,640
5.1
12.1
10.4
10.9
16.1
57,555
34.0
14,532
1,144
1,640
0.7
(86.4)
76.7
12.4
2.0
80,197
39.3
28,062
6,982
1,640
4.3
510.2
12.6
6.1
12.0

Shankar K
+91-22-4040 7412
shankar.k@edelcap.com
Santosh Hiredesai
+91-22-6620 3027
santosh.hiredesai@edelcap.com
Balance sheet
Income statement
(INR mn)
Year to March
Total revenues
Cost of Operations
Staff cost
Other operating expenses
Total expenditure
EBITDA
Depre. and Amortisation
EBIT
Interest
Other income
PBT
Provision for tax
Core profit
Profit before minority int.
Minority interest
Profit after minority interest
Shares outstanding ( mn )
EPS (INR) basic
Diluted shares (mn)
Dividend per share
Dividend payout (%)
FY10
FY11
FY12E
FY13E
23,551
10,030
311
1,020
11,362
12,189
1,361
10,828
2,837
742
8,733
1,224
7,509
7,509
0
7,509
1,640
5
1,640
4.6
1
16.4
42,944
24,813
486
2,003
27,302
15,642
2,668
12,974
4,325
1,332
9,980
1,563
8,418
8,418
(1)
8,418
1,640
5
1,640
5
1
19.5
57,555
36,669
953
5,401
43,023
14,532
5,717
8,815
7,981
763
1,597
452
1,144
1,144
0
1,144
1,640
1
1,640
1
1
143.3
80,197
44,121
1,202
6,812
52,135
28,062
8,233
19,829
12,046
915
8,698
1,716
6,982
6,982
0
6,982
1,640
4
1,640
4
1
23.5

Year to March
FY10
FY11
FY12E
FY13E
48.2
5.8
12.0
51.8
31.9
63.6
6.2
10.1
36.4
19.6
74.8
9.9
13.9
25.2
2.0
65.0
10.3
15.0
35.0
8.7
FY10
FY11
FY12E
FY13E
28.3
129.2
137.4
171.4
(9.6)
82.3
28.3
14.3
12.1
12.1
34.0
(7.1)
(84.0)
(86.4)
(86.4)
39.3
93.1
444.7
510.2
510.2
FY10
FY11
FY12E
(INR mn)
FY13E
7,509
1,361
6,302
15,173
6,703
8,470
31,985
(23,515)
8,418
2,668
2,274
13,360
4,468
8,892
28,368
(19,476)
1,144
5,717
7,218
14,080
(6,290)
20,370
21,105
(735)
6,982
8,233
11,131
26,346
(886)
27,232
6,541
20,691
Operating expenses
EBITDA margins
Net profit margins
Growth metrics (%)

Year to March
Revenues
EBITDA
PBT
Net profit
EPS
Cash flow statement

Year to March
Net profit
Depreciation
Others
Gross cash flow
Less:Changes in WC
Operating cash flow
Less: Capex
Free cash flow
53
(INR mn)
As on 31st March
FY10
FY11
FY12E
FY13E
16,401
31,401
47,802
77,696
1,006
78,701
127,817
36,668
6,714
29,954
86,026
115,980
14,344
3,714
2,714
6,048
3,852
16,499
17,524
1,482
19,006
(2,507)
0
127,817
29.1
16,401
40,364
56,765
88,128
8,248
96,376
155,427
73,982
9,767
64,214
77,080
141,295
4,842
5,348
7,637
9,779
6,977
29,741
18,665
1,957
20,622
9,120
171
155,427
34.6
16,401
39,602
56,003
101,527
6,958
108,485
166,774
164,459
15,485
148,974
7,708
156,682
4,842
8,037
9,461
12,028
6,977
36,503
29,468
1,957
31,425
5,079
171
166,774
34.1
16,401
44,679
61,079
96,836
6,072
102,907
166,272
174,976
23,717
151,259
3,731
154,990
4,842
9,670
13,183
14,105
6,977
43,936
35,709
1,957
37,666
6,270
171
166,272
37.2
FY10
FY11
FY12E
FY13E
ROAE (%)
24.0
ROACE (%)
11.6
Current ratio
1
Debtors (days)
32
Average fixed assets t/o (x)
1
Average working capital t/o (x) (2.1)
Average capital employed t/o (x) 0.2
Debt / Equity
2
Debt/EBITDA
6.5
Adjusted Debt/Equity
1.6
16.1
9.8
1
44
1
(9.3)
0.3
2
6.2
1.7
2.0
5.6
1
54
1
(15.1)
0.4
2
7.5
1.9
12.0
12.3
1
52
1
(10.8)
0.5
2
3.7
1.7
FY10
FY11
FY12E
FY13E
4.6
(9.6)
5.4
11.7
1.84
6.2
12.0
1.4
5.1
12.1
6.8
10.4
1.55
4.0
10.9
1.9
0.7
(86.4)
4.2
76.7
1.57
3.1
12.4
1.9
4.3
510.2
9.3
12.6
1.44
2.2
6.1
1.9
Equity capital
Reserves & surplus
Shareholders funds
Secured loans
Deferred revenues
Borrowings
Sources of funds
Gross block
Depreciation
Net block
Total fixed assets
Investments
Inventories
Sundry debtors
Sundry cred. and others
Provisions
Net current assets
Net deferred tax
Uses of funds
Adj. BV per share (INR)
Ratios
Year to March
Year to March
Diluted EPS (INR)
Y-o-Y growth (%)
CEPS (INR)
Diluted P/E (x)
Price/BV(x)
EV/Sales (x)
EV/EBITDA (x)
Dividend Yield (%)
Edelweiss
Securities Limited
Limited
Company Profile
JSW STEEL
Focused on growth
February 7, 2012
Metals & Mining
Key takeaways
Expects iron ore mining in Karnataka to restart
Absolute Rating
BUY
Outperformer
JSW Steel (JSW) believes the Supreme Court will allow the first category of mines
(no irregularities) to start first with 10-12mtpa iron ore production followed by
the second category (minor irregularities) with another 12-15mtpa iron ore
production.
West Bengal project to be launched only post raw material security

Underweight
MARKET DATA (R : JSTL.BO, B: JSTL IN)
The company plans to launch the West Bengal steel project (3mtpa in Phase I) only
post obtaining clearances for its coal mines in West Bengal project and secure
linkages for iron ore from Orissa. Estimated capex for 3mtpa capacity is USD3bn
over three years.
JSW Ispat EBITDA to improve going forward
CMP
: INR 743
Target Price
: INR 775
52-week range (INR)
: 1,015 / 464
Share in issue (mn)
: 223.1
: 166 / 3,298
In the coming two quarters, JSW Ispats EBITDA/t is expected to improve to INR4,000
led by sourcing lower cost power from JSW Energy, modest uptick of INR 8001,000/t in steel prices and lower coking coal costs. Over 18-24 months, post
implementation of the 1mtpa coke oven, 4mtpa pellet plant and 0.8mtpa CRM,
EBITDA/t is expected to rise to INR7,000-8000/t.
Indian steel demand growth to pick up in FY13
JSW expects Indian steel demand to grow ~5% in FY12E (below GDP growth rate).
FY13E to see pick up with steel demand growing 7% plus (atleast equal to GDP
growth).
Steel margins expected to expand in FY13E led by declining raw material. JSWs
volumes to increase >25% YoY in FY13E led by capacity expansion of 3.2 mtpa
completed in Q2FY12. Expect partial restart of iron ore mining in Karnataka.

Promoters*
: 37.7
MFs, FIs & Banks
FIIs
: 20.2
Others
: 36.8

: 18.0
1 month
Key risks
3 months
Unavailability of iron ore due to current mining ban in Karnataka.
5.2
12 months
Stock
Nifty
EW Metals
and Mining
Index
30.5
9.6
17.3
9.7
0.3
3.1
(30.5)
(7.1)
(10.5)
Weakness in global steel demand leading to lower international prices without

proportionate decline in input costs.
Financials
Year to March
Revenues (INR mn)
Rev. growth (%)
EBITDA (INR mn)
Adjusted net profit (INR mn)
Basic shares outstanding (mn)
Diluted EPS (INR)
EPS growth (%)
Diluted P/E (x)
EV/EBITDA (x)
ROAE (%)
FY10
FY11
FY12E
FY13E
189,572
19.0
40,707
15,201
187
81.3
681.5
9.1
7.3
19.4
239,002
26.1
46,627
16,751
223
75.1
(7.6)
9.9
6.1
13.9
285,454
19.4
51,238
7,759
223
34.8
(53.7)
21.4
6.1
4.9
345,311
21.0
67,953
20,233
223
90.7
160.8
8.2
4.7
12.1

Prasad Baji
+91-22-4040 7415
Navin Sahadeo
+91-22-6623 3473
Balance sheet
Income statement
Year to March
(INR mn)
FY10
FY11
FY12E
FY13E
Net revenue
189,572
Accretion to stock
(171)
Raw material costs
112,483
Employee expenses
4,795
Power and freight
10,475
SGA and other expenses
21,282
Total operating expenses 148,865
EBITDA
40,707
Depr. and amortisation
12,987
EBIT
27,720
Interest expenses
11,080
Other income
5,360
Profit before tax
22,000
Provision for tax
6,467
Core profit
15,533
Profit after tax
15,533
Minority interest
(332)
Share of profit of associates
111
Profit after minority int.
15,976
FCCB interest post-tax
774
Adjusted PAT
15,201
Basic sha.outstanding (mn)
187
Basic EPS
81
Diluted shares (mn)
187
Diluted EPS
81
10
Dividend payout (%)
15
Tax rate (%)
29.4
239,002
(6,978)
154,031
6,368
12,067
26,888
192,375
46,627
15,597
31,030
9,454
2,840
24,417
7,823
16,594
285,454
0
185,868
6,911
13,095
28,343
234,217
51,238
19,085
32,153
17,412
1,582
16,322
4,554
11,768
(6,617)
5,151
(197)
(3,979)
1,369
227
7,759
223
35
223
35
10
215
27.9
345,311
0
216,676
7,482
15,660
37,540
277,358
67,953
21,835
46,118
15,884
4,950
35,184
10,698
24,485
16,594
(239)
707
17,540
789
16,751
223
75
223
75
12
20
32.0

Year to March
FY10
Operating expenses
Depreciation
EBITDA margins
Net profit margins
Growth metrics (%)

Year to March
Revenues
EBITDA
PBT
Net profit
EPS
Cash flow statement

Year to March
Net profit
Depreciation
Others
Gross cash flow
Operating cash flow
Less: Capex
Free cash flow
24,485
(181)
(4,193)
20,473
241
20,233
223
91
223
91
10
14
30.4
FY11
FY12E
FY13E
78.5
6.9
5.8
21.5
8.2
80.5
6.5
4.0
19.5
6.9
82.1
6.7
6.1
17.9
4.1
80.3
6.3
4.6
19.7
7.1
FY10
FY11
FY12E
FY13E
19.0
86.1
597.7
539.9
681.5
26.1
14.5
11.0
6.8
(7.6)
19.4
9.9
(33.2)
(69.0)
(53.7)
21.0
32.6
115.6
375.3
160.8
FY10
FY11
FY12E
(INR mn)
FY13E
15,976
12,987
9,361
38,323
4,710
33,613
27,537
6,076
17,540
15,597
8,302
41,439
13,137
28,302
55,181
(26,879)
1,369
19,085
27,811
48,266
(9,749)
58,015
53,020
4,995
20,473
21,835
19,896
62,205
1,617
60,588
45,058
15,530
55
(INR mn)
As on 31st March
FY10
FY11
FY12E
FY13E
Equity capital- Voting shares 2,481

Reserves & surplus
87,300
Shareholders funds
92,571
Secured loans
134,541
Unsecured loans
27,190
Borrowings
161,730
Minority interest
2,187
19,650
Sources of funds
276,138
Gross block
267,921
Depreciation
53,393
Net block
214,528
CWIP
69,562
Total fixed assets
284,090
Investments
6,282
Deferred tax asset
2,802
Goodwill
8,992
Loans and advances
16,038
Inventories
28,667
Sundry debtors
6,964
3,030
54,700
Provisions
2,649
80,727
Net current assets
(26,027)
Uses of funds
276,138
480
2,842
159,662
165,293
121,728
43,016
164,744
2,358
23,256
355,652
326,839
68,732
258,107
65,077
323,183
29,138
2,762
10,932
21,568
44,097
9,333
20,480
95,649
102,019
3,995
106,014
(10,365)
355,652
728
2,841
158,094
163,726
137,958
45,645
183,604
2,162
23,256
372,747
416,839
87,817
329,022
28,097
357,118
18,542
2,762
10,932
21,568
64,557
11,731
23,986
121,842
132,147
6,303
138,450
(16,608)
372,747
721
2,841
175,631
181,263
139,958
45,111
185,070
1,981
23,256
391,570
426,839
109,652
317,187
63,155
380,341
14,349
2,762
10,932
21,568
67,559
12,299
22,161
123,587
135,804
4,599
140,403
(16,816)
391,570
800
FY10
FY11
FY12E
FY13E
19.4
10.5
94
11
260
(155)
4.0
0.7
1.7
1.7
13.9
10.4
90
12
224
(121)
3.5
0.9
1.0
1.0
4.9
9.4
107
13
230
(110)
3.6
0.9
1.1
1.1
12.1
12.6
111
13
226
(102)
2.7
0.9
1.0
1.0
Year to March
FY10
FY11
FY12E
FY13E
Diluted EPS (INR)

Y-o-Y growth (%)
CEPS (INR)
Diluted P/E (x)
Price/BV(x)
Market cap/Sales (x)
EV/Sales (x)
EV/EBITDA (x)
Dividend yield (%)
81.3
681.5
154.8
9.1
1.5
0.7
1.6
7.3
1.3
75.1
(7.6)
148.5
9.9
1.0
0.7
1.2
6.1
1.6
34.8
(53.7)
121.3
21.4
1.0
0.6
1.1
6.1
1.3
90.7
160.8
189.6
8.2
0.9
0.5
0.9
4.7
1.3
Ratios
Year to March
ROAE (%)
ROACE (%)
Inventory (days)
Debtors (days)
Payable (days)
Debt/EBITDA
Current ratio
Debt/ Equity
Edelweiss
Securities Limited
Limited
Company Profile
JYOTHY LABORATORIES
Pan-India player
February 7, 2012
Mescellaneous
Key takeaways
EDELWEISS RATINGS
In Ujala volume growth was up ~10% YoY and value growth of 4% YoY. Jyothy
Laboratories (Jyothy) does not anticipate any rural slowdown in Ujala and expects
to grow at ~7% in FY12E and FY13E.
Absolute Rating
NOT RATED
In Maxo, the company lost three percentage points in market share on trailing 12months period owing to aggressive competition at the trade level.
Exo grew 38% YoY contributing ~18% to topline. Jyothy has gained some market
share and has become leader in Kerala in this segment.
Due to strike at Karaikal plant from September 26 till December 26 the company
lost out 62 days of production, costing ~INR270mn on topline, affecting EBITDA of
~INR70mn. Normal production was restored post December 27, 2012.
MARKET DATA (R : JYOI.BO, B: JYL IN)

CMP
: INR 172
Target Price
: NA
52-week range (INR)
: 254 / 125
Share in issue (mn)
: 80.6
: 14 / 275
Entire product portfolio of 10 brands, three from Jyothy and seven from Henkel,
are likely to be realigned effective from April 1, with new campaign spending ~10%
on advertisement.
In Q3FY12, the company effected 7-8% average price hike across products (however,
the impact of price increase was only ~5%). Jyothy is contemplating ~15% price
hike across Henkel products as most of them are under-priced.
Change in distribution structure: The company has changed its distribution

structure from 3 tiered to 2 tiered since the beginning of the current financial year.
Commission savings of 5-7% would accrue due to change in distribution structure.
Also, sales for first half were tepid as super stockists who held 70-80 days inventory
liquidated the same.
Promoters*
: 65.1
MFs, FIs & Banks
: 14.4
FIIs
: 12.5
Others
8.0

Nil
Key risks
Sensex
Stock
Maxo performance at risk due to stiff competition from market leader.

Slowdown in rural demand due to lower government spending or a monsoon failure
could impact Jyothys revenues significantly.
Stock over
Sensex
1 month
11.7
6.3
5.5
3 months
0.8
13.0
12.2
12 months
(1.8)
(17.1)
(15.3)
Integration of Henkel takes longer than expected.

Jyothy being a price follower has risk to its margin.
Financials
Year to March
FY08
FY09*
FY10
FY11
Revenues (INR mn)

Rev. growth (%)
EBITDA (INR mn)
Net profit (INR mn)
EPS (INR)
EPS growth (%)
Diluted P/E (x)
EV/EBITDA (x)
ROAE (%)
3,976
(5.8)
588
449
15
30.9
(13.2)
5.5
2.5
4.0
3,851
(3.2)
506
384
73
5.3
(82.9)
32.4
22.7
2.9
6,398
66.1
721
744
73
10.2
93.9
16.7
16.0
5.1
6,674
4.3
779
688
78
8.9
(13.5)
19.3
15.6
3.4
* The figure of FY09 is for 9 months i.e. from July1,2008 to March31,2009 as the company is about to
change its accounting year
Abneesh Roy
+91 22 6620 3141
Harsh Mehta
+91 22 4063 5543
Balance sheet
Income statement
Year to March
(INR mn)
FY08
FY09
FY10
FY11

3,976
Direct costs
1,957
Employee costs
467
Other expenses
964
3,388
EBITDA
588
EBIT
508
Interest expenses
7
Other income
164
Profit before tax
666
Provision for tax
167
Core profit
499
Extraordinary items
(50)
Profit after tax
449
449
Adjusted net profit
449
EPS (INR) diluted
30.9
15
Dividend payout (%)
29.1
Tax rate (%)
25.0
3,851
2,073
442
830
3,345
506
75
431
7
58
482
108
374
374
(10)
384
384
5.3
73
37.8
22.4
6,398
3,530
710
1,437
5,677
721
124
597
17
376
956
215
741
(1)
741
(3)
744
744
10.3
73
39.1
22.5
6,674
3,310
774
1,811
5,895
779
130
648
22
185
812
154
657
657
(30)
688
688
8.9
78
58.6
19.0
FY09
FY10
FY11
86.9
1.9
0.2
13.1
9.7
88.7
1.9
0.3
11.3
11.6
88.3
2.0
0.3
11.7
9.9

Year to March
FY08
Operating expenses
85.2
0.2
EBITDA margins
14.8
Net profit margins
11.3
Growth metrics (%)

Year to March
Revenues
EBITDA
PBT
Net profit
EPS
Cash flow statement

Year to March
Net profit
Depreciation
Deferred tax
Others
Gross cash flow
Less:Changes in WC
Operating cash flow
Less: Capex
Free cash flow
FY08
FY09
FY10
FY11
(5.8)
45.4
13.2
(3.0)
(13.2)
(3.2)
(13.9)
(27.6)
(25.1)
(82.9)
66.1
42.4
98.3
98.2
93.9
4.3
8.1
(15.0)
(11.2)
(13.5)
FY08
FY09
FY10
(INR mn)
FY11
449
80
22
13
564
(2)
566
925
(359)
384
75
22
(11)
469
170
299
129
170
744
124
28
(83)
813
304
509
456
53
688
130
30
1,336
2,184
2,239
(55)
199
(255)
57
(INR mn)
As on 31st March
Equity capital
Reserves & surplus
Shareholders funds
Secured loans
Unsecured loans
Borrowings
Sources of funds
Gross block
Depreciation
Net block
Total fixed assets
Investments
Inventories
Sundry debtors
Provisions
Net current assets
Net deferred tax
Uses of funds
Adj. BV per share (INR)
Ratios
Year to March
ROACE (%)
Inventory days
Debtors days
Payable days
Current ratio
Debt/EBITDA
Interest coverage
Debt/equity
Year to March
Diluted EPS (INR)
Y-o-Y growth (%)
CEPS
Diluted P/E (x)
Price/BV (x)
EV/Sales (x)
EV/EBITDA (X)
FY08
FY09
FY10
FY11
73
3,182
3,255
5
5
3,260
2,350
358
1,950
94
2,043
5
479
254
960
191
1,884
368
222
590
1,294
(83)
3,260
224.3
73
3,396
3,469
5
5
3,476
2,476
429
2,004
110
2,114
2
470
429
1,019
221
2,140
422
253
676
1,464
(105)
3,476
47.8
73
3,805
3,878
129
2
131
4,013
2,930
547
2,336
41
2,377
0
730
707
1,227
351
3,016
786
462
1,248
1,768
(133)
4,013
53.4
81
6,230
6,311
689
2
691
7,059
3,114
709
2,405
202
2,607
607
694
1,053
2,809
548
5,104
538
559
1,097
4,007
(163)
7,059
81.3
FY08
FY09
FY10
FY11
4.0
16.4
41
30
70
1
3.2
0.0
74.7
2.6
0.0
2.9
12.8
45
32
70
8
3.2
0.0
60.7
1.9
0.0
5.1
15.9
34
32
62
4
3.2
0.2
35.1
2.9
0.0
3.4
12.4
39
48
73
14
2.4
0.9
30.2
2.8
0.1
FY08
FY09*
FY10
FY11
30.94
(13.2)
41.4
5.5
0.8
0.4
2.5
5.28
(82.9)
6.6
32.4
3.6
3.0
22.7
10.25
93.9
12.3
16.7
3.2
1.8
16.0
8.86
(13.5)
10.9
19.3
2.1
1.8
15.6
* The figure of FY09 is for 9 months i.e. from July1,2008 to March31,2009

as the company is about to change its accounting year
Edelweiss
Securities Limited
Limited
Company Profile
KAJARIA CERAMICS
Adding sheen
February 7, 2012
Mescellaneous
Key takeaways
EDELWEISS RATINGS
Management expects Kajaria Ceramics (Kajaria) to grow at 25% next year primarily
driven by 20% volume growth and better product mix. The company expects
standalone volume sales of 27mn sq ft on an installed capacity of 28.6mn sq ft.
Including outsourcing and imports the company expects total volume sales at
40mn sq ft in FY12E.
Replacement demand contributes around 20% to sales and balance 80% of sales
are to new demand. The company has in excess of 700 SKUs currently and sells its
products at 5-7% premium to competition, demonstrating strong pricing power.
Kajaria derives 70% of its revenue from retail sales and balance from institutional
sales.
The industry is growing at 16-18% primarily driven by 10-11% volume growth.
The company expects margin to improve by 25-50bps every year on account of
better product mix, increase of share of value-added products and reduction in
gas prices.
The company currently has 800 distributors including 100 exclusive kajaria
outlets. The company plans to increase distribution network by 150 outlets every
year, thereby driving growth. Kajaria expects to improve the ratio of large size
tiles / small sized tiles by 300bpls every year .The ratio currently stands at 50:50.
The company plans to spend INR500mn in FY12E on advertisement. It derives 18%
of sales from South, 55% from North, 13% from East and 14% from West.
Absolute Rating
NOT RATED
MARKET DATA (R : KAJR.BO, B: KJC IN)

CMP
: INR 139
Target Price
: NA
52-week range (INR)
: 138 / 60
Share in issue (mn)
: 73.6
: 20 / 203

Promoters*
: 53.5
MFs, FIs & Banks
8.6
FIIs
7.2
Others
: 30.7

Nil
Key risks
Growth in demand is linked to the health of the construction sector. Any slowdown
in real estate will directly impact sales volume.
The unorganized tile industry could affect price realizations and reduce market
share.
Sensex
Stock
Stock over
Sensex
1 month
11.7
39.8
28.0
3 months
0.8
20.8
20.0
12 months
(1.8)
102.5
104.3
To compete with low-cost Chinese imports, the company will have to reduce
margins, which will dent profitability.
Financials
Year to March
Revenues (INR mn)
Rev. growth (%)
EBITDA (INR mn)
Net profit (INR mn)
EPS (INR)
EPS growth (%)
Diluted P/E (x)
EV/EBITDA (x)
ROE (%)
FY08
FY09
FY10
FY11
5,027
21.5
819
150
74
2.0
95.7
68.1
16.5
10.1
6,649
32.3
949
89
74
1.2
-40.8
114.9
14.1
5.6
7,355
10.6
1,149
359
74
4.9
302.9
28.5
11.1
20.4
9,523
29.5
1,479
607
74
8.2
69.1
16.9
8.8
29.4

Niket Shah
+91-22-4063 5421
niket.shah@edelcap.com
Balance sheet
Income statement
Year to March
(INR mn)
FY08
FY09
FY10
FY11
Revenue
5,319
Materials
2,672
Power & fuel cost
786
Staff cost
404
Other manufacturing expenses 140
Selling & Admin. expenses
479
Miscellaneous expenses
18
Total expenditure
4,500
EBITDA
819
Depreciation
236
EBIT
583
Interest expense
419
Other income
36
Profit before tax
200
Tax
50
Core profit
150
(7)
Profit after tax
144
144
75
EPS (INR) basic
2.0
Diluted shares (mn)
75
EPS (INR) diluted
2.0
CEPS (INR)
5.2
6,539
3,535
917
492
134
533
(20)
5,590
949
249
700
582
10
128
39
89
2
91
91
75
1.2
75
1.2
4.5
7,361
3,603
1,061
599
168
705
77
6,212
1,149
267
882
425
57
514
156
359
5
363
363
76
4.7
76
4.7
8.2
9,486
5,360
940
728
202
754
27
8,011
1,475
295
1,180
331
43
892
285
607
11
618
618
77
7.9
77
7.9
11.8

Year to March
FY08
Materials
Power & fuel cost
Staff cost
Other manufacturing expenses
Selling & admin. expenses
Total expenditure
EBITDA margin
EBIT margin
Net profit margins
Growth metrics (%)

Year to March
Revenues
EBITDA
EBIT
PBT
Net profit
EPS
Cash flow statement

Year to March
Net profit
Depreciation
Others
Gross cash flow
Less:Changes in WC
Less: Capex
Free cash flow
FY09
FY10
FY11
50.2
14.8
7.6
2.6
9.0
84.6
15.4
11.0
2.8
54.1
14.0
7.5
2.0
8.2
85.5
14.5
10.7
1.4
48.9
14.4
8.1
2.3
9.6
84.4
15.6
12.0
4.9
56.5
9.9
7.7
2.1
8.0
84.5
15.5
12.4
6.4
FY08
FY09
FY10
FY11
NA
NA
NA
NA
NA
NA
23.0
15.9
20.1
(36.4)
(40.7)
(41.3)
12.6
21.1
26.0
303.5
302.8
299.2
28.9
28.3
33.7
73.4
69.2
68.2
FY08
FY09
FY10
(INR mn)
FY11
NA
NA
NA
NA
NA
NA
NA
NA
91.40
249.40
(85.90)
254.90
99.00
254.90
87.90
167
363.30
267.10
446.70
1,077.10
(499.40)
1,077.10
446.00
631
617.80
295.00
674.40
1,587.20
(804.70)
1,587.20
1,539.60
48
59
(INR mn)
As on 31st March
Reserves
Borrowings
Sources of funds
Gross fixed assets
Net fixed assets
Capital WIP
Investments
Deferred tax asset
Debtors
Inventories
Loans and advances
Sundry creditors
Provisions
Working capital
BV per share (INR)
Ratios
Year to March
FY08
FY09
FY10
FY11
147
1,402
1,549
3,373
4,922
4,901
1,519
3,382
26
34
(522)
83
713
1,539
460
2,795
748
46
793
2,001
4,922
21
147
1,474
1,621
3,252
4,872
5,015
1,738
3,277
0
34
(535)
79
678
1,385
827
2,968
830
42
872
2,096
4,872
21
147
1,746
1,893
2,628
4,522
5,436
1,988
3,448
25
34
(549)
45
773
1,403
756
2,977
1,198
216
1,414
1,563
4,522
25
147
2,079
2,226
2,797
5,023
7,000
2,210
4,790
1
90
(602)
30
909
1,515
808
3,263
2,130
389
2,519
743
5,023
29
FY08
FY09
FY10
FY11
5.6
14.4
39
44
(5)
3.4
2.0
1.3
4.1
20.4
18.9
36
50
(14)
2.1
2.2
1.6
4.2
29.5
25.0
32
64
(32)
1.3
2.3
2.0
4.6
FY08
FY09
FY10
FY11
2.0
95.7
5.6
68.1
6.6
2.7
16.5
1.2
-40.8
4.9
114.9
6.3
2.0
14.1
4.9
302.9
8.9
28.5
5.4
1.7
11.1
8.2
69.1
13.2
16.9
4.6
1.4
8.8
ROAE (%)
ROACE (%)
Debtors (days)
Payable (days)
Current ratio
Equity turnover(x)
Year to March
Diluted EPS (INR)
Y-o-Y growth (%)
CEPS
Diluted P/E (x)
Price/BV (x)
EV/Sales (x)
EV/EBITDA (X)
Edelweiss
Securities Limited
Limited
Company Profile
KEC INTERNATIONAL
Towering growth
February 7, 2012
Key takeaways
KEC International (KEC) expects sales growth improvement to continue on back of

strong order book. It will grow at a minimum industry growth rate of 10-15%. Key
international markets like MENA and US will help optimize overall growth rate.
Guidance for FY13 sales growth stands at 20%. It expects new business (water
segment) to start contributing from Q4FY12. It targets margins in the 8.5-9.0%
range. The company stated that 5 business and 5 geographies are helping sustained
order intake.
Absolute Rating
HOLD
Performer

Underweight
MARKET DATA (R : KECL.BO, B: KECI IN)
KEC expects cables margin to improve from 3% to 6% next year as it will shut down
its Thane plant and start a new cable plant at Vadodara.
CMP
: INR 63
Target Price
: INR 66
52-week range (INR)
: 95 / 31
Power system, which is currently 10% of sales, will rise once the large Kazakhstan
order starts executing from Q4FY12. It expects net debt to equity at 1.3x to be
largely maintained and working capital of 110 days to sustain.
Share in issue (mn)
: 257.1
: 16 / 324
SAE utilization has increased from 60% to 80% now. SAE sales currently at INR175mn
USD. It expects SAE margins to drop to 13% from 15% now.
Promoters*
: 42.0
MFs, FIs & Banks
: 39.6
FIIs
Others
: 16.0

We believe KEC has a robust order backlog and with higher order flows from
Power Grid Corporation (PGCIL) expected, it has balanced order mix between
international and domestic orders. We believe the company is likely to significantly
benefit from increased order flows from PGCIL. Further, KEC being present in over
20 countries in international geographies, is expected to keep international orders
flowing in. However, currently, margins are under attack due to increase in
competitive intensity and entry into new business vertical.
Nil
Key risks
Stock
Forex fluctuation could potentially impact margins for the company. Further the
PAT margins are sensitive to interest rates and any increase the same is likely to
negatively impact the company.
2.4
Nifty
EW Cpital
Goods Index
1 month
41.5
9.6
16.1
3 months
(5.1)
0.3
(7.1)
12 months
(36.1)
(7.1)
(25.5)
Year to March
Revenues (INR mn)
Rev. growth (%)
EBITDA (INR mn)
Net profit (INR mn)
EPS (INR)
EPS growth (%)
Diluted P/E (x)
EV/EBITDA (x)
ROE (%)
FY10
FY11
FY12E
FY13E
39,082
14.0
4,069
1,897
247
7.7
63.1
8.3
5.6
28.6
44,742
14.5
4,625
2,057
257
8.0
4.0
8.0
6.3
24.0
56,817
27.0
4,774
1,719
257
6.7
(16.4)
9.6
6.3
16.5
64,979
14.4
5,492
2,165
257
8.4
25.9
7.6
5.5
17.6

Amit Mahawar
+91-22- 4040 7451
Rahul Gajare
+91-22- 4063 5561
Swarnim Maheshwari
+91-22- 4040 7418
Balance sheet
Income statement
(INR mn)
Year to March
FY10
FY11
FY12E
FY13E

39,082
Direct costs
29,709
Employee costs
1,689
Other expenses
3,616
35,014
EBITDA
4,069
270
EBIT
3,798
Interest expenses
865
Other income
0
Profit before tax
2,934
Provision for tax
1,037
Core profit
1,897
Profit after tax
1,897
1,897
Adjusted net profit
1,897
EPS (INR) basic
7.7
247
Dividend payout (%)
19.0
Tax rate (%)
35.3
44,742
32,357
2,833
4,926
40,116
4,625
408
4,217
1,075
26
3,168
1,111
2,057
2,057
2,057
2,057
8.0
257
17.6
35.1
55,253
40,296
4,287
5,513
50,095
5,158
461
4,697
1,408
0
3,289
1,151
2,138
2,138
2,138
2,138
8.3
257
16.6
35.0
64,287
46,681
5,032
6,429
58,142
6,144
499
5,645
1,762
0
3,883
1,340
2,544
2,544
2,544
2,544
9.9
257
13.9
34.5
FY11
FY12E
FY13E
89.7
0.9
2.4
10.3
4.6
90.7
0.8
2.5
9.3
3.9
90.4
0.8
2.7
9.6
4.0

Year to March
FY10
Operating expenses
EBITDA margins
Net profit margins
Growth metrics (%)

Year to March
Revenues
EBITDA
PBT
Net profit
EPS
Cash flow statement

Year to March
Net profit
Depreciation
Deferred tax
Others
Gross cash flow
Less:Changes in WC
Operating cash flow
Less: Capex
Free cash flow
89.6
0.7
2.2
10.4
4.9
FY10
FY11
FY12E
FY13E
14.0
35.5
65.0
63.1
63.1
14.5
13.7
8.0
8.5
4.0
23.5
11.5
3.8
3.9
3.9
16.3
19.1
18.1
19.0
19.0
FY10
FY11
FY12E
(INR mn)
FY13E
2,155
270
0
440
2,866
2,519
347
588
(242)
2,489
408
166
929
3,992
2,297
1,694
780
914
2,138
461
0
0
2,599
1,245
1,354
1,750
(396)
2,544
499
0
0
3,043
2,498
545
1,000
(455)
61
(INR mn)
As on 31st March
Equity capital
Reserves & surplus
Shareholders funds
Secured loans
Borrowings
Sources of funds
Gross block
Depreciation
Net block
Total fixed assets
Goodwill
Investments
Inventories
Sundry debtors
Loand & Advances
Provisions
Net current assets
Net deferred tax
Uses of funds
Ratios
Year to March
ROACE (%)
Inventory days
Debtors days
Payable days
Current ratio
Debt/EBITDA
Interest coverage
Debt/equity
Year to March
Diluted EPS (INR)
Y-o-Y growth (%)
CEPS
Diluted P/E (x)
Price/BV (x)
EV/Sales (x)
EV/EBITDA (X)
FY10
FY11
FY12E
FY13E
514
7,162
7,676
7,755
7,867
15,543
8,291
1,541
6,750
383
7,133
0
19
2,498
19,450
678
3,973
26,598
17,190
556
17,746
8,852
(461)
15,543
31
514
8,952
9,466
14,322
14,322
23,788
10,382
2,366
8,016
392
8,408
2,813
0
3,359
26,177
1,614
4,724
35,873
22,248
561
22,809
13,063
(497)
23,788
37
514
10,735
11,249
14,822
14,822
26,071
12,132
2,827
9,305
392
9,697
2,813
0
3,701
28,913
1,362
4,724
38,699
24,288
355
24,643
14,057
(497)
26,071
44
514
12,924
13,438
15,322
15,322
28,760
13,132
3,326
9,806
392
10,198
2,813
0
4,232
34,089
1,052
4,724
44,096
27,497
355
27,852
16,245
(497)
28,760
52
FY10
FY11
FY12E
FY13E
28.6
27.1
29
177
219
(12)
1.5
1.9
4.4
6.6
1.0
24.0
20.9
33
186
222
(3)
1.6
3.1
3.9
6.1
1.5
20.6
18.5
32
182
211
3
1.6
2.9
3.3
6.4
1.3
20.6
20.2
31
179
202
7
1.6
2.5
3.2
6.7
1.1
FY10
FY11
FY12E
FY13E
7.7
63.1
8.8
8.3
2.1
0.6
5.6
8.0
4.0
10.2
8.0
2.7
0.7
6.3
6.7
(16.4)
8.5
9.6
1.4
0.5
6.3
8.4
25.9
10.4
7.6
1.2
0.5
5.5
Edelweiss
Securities Limited
Limited
Company Profile
KOTAK MAHINDRA BANK

Lying low
February 7, 2012
Key takeaways
Consolidated advances to grow at 25-30% in FY12. The structural shift in product

portfolio towards quality corporate loans and secured retail loans will continue.
Corporate banking loans to wind down in Q4FY12 (as witnessed historically).
Capital market related businesses are at lower end of the trough; will not see
significant slowdown from this level; it will either remain flat or will improve.
Will add 30 another branches in Q4FY12 (to 360 branches) and maintain guidance
of 500 branches by CY13.
Retail segment: behavior of consumer is much better than previous cycle (even
within secured segment itself); on commercial financing side it will be cautious
on construction equipment; on wholesale side big ticket loans in some sectors are
being closely monitored.
Added INR9bn to savings deposit base (to 11.5% of total deposits). Consequently,
CASA deposit inched up 200bps to 28% (excluding sweep deposits of 6.7%). The
management would continue to focus on low cost deposit base.
Has been resorting to forex borrowings where cost post currency hedging and
interest rate swap provides benefit of 2.5-3.0%. However, it has exhausted the
limit of 50% of networth on the same.
Insurance profitability primarily driven by surrender charges.
Financing business has been the key driver of earnings growth led by a robust
advance growth, consistently low credit costs and NIMs at 4.7%. Earnings of capital
market related businesses continue to reel under pressure. In banking business,
we expect the growth to moderate and NIMs to be under pressure due to the recent
savings bank deregulation and focus on quality corporate segment. The stock is
currently trading at 2.6x FY13E book and 20.5x earnings (excluding life insurance)
while our SOTP fair value for the stock stands at INR427 per share for FY13E.
Absolute Rating
REDUCE
Underperformer

Equalweight
MARKET DATA (R : KTKM .BO, B: KMB IN)

CMP
: INR 536
Target Price
: INR 427
52-week range (INR)
: 539 / 333
Share in issue (mn)
: 739.6
: 397 / 7,892

Promoters*
: 45.4
MFs, FIs & Banks
FIIs
: 27.0
Others
: 22.4

5.2
Nil

Stock
Nifty
EW BFSI
Index
15.8
1 month
8.9
9.6
3 months
(0.3)
0.3
3.9
12 months
26.1
(7.1)
(6.2)
Key risks
Growth momentum continues to be buoyant. Asset quality continues to be under
control and credit cost increase remains capped. Traction in auto financing
business continues.
Financials
Year to March
Net rev growth (%)
Net interest income(INR mn)
Net profit (INR mn)
EPS (INR)
EPS growth (%)
Diluted P/E (x)
Price to book (x)
ROAE (%)
FY10
FY11
FY12E
FY13E
44,848
34.8
25,484
12,327
348
17.7
88.9
30.2
4.7
17.0
50,112
11.7
30,136
14,951
368
20.3
14.6
26.4
3.6
16.2
53,873
7.5
35,069
16,031
368
21.8
7.2
24.6
3.2
14.2
63,257
17.4
41,687
19,209
368
26.1
19.8
20.5
2.8
14.8

Kunal Shah
+91-22- 4040 7579
Nilesh Parikh
+91-22- 4063 5470
Suruchi Chaudhary
+91-22-6623 3316
Balance sheet
Income statement
Year to March
Interest income
Interest expenses
Net interest income
Non interest income
- Misc. income
Net revenues
Operating expense
- Employee exp
- Other opex
Preprovision profit
Provisions
PBT
Taxes
PAT
Extraordinaries
Reported PAT
EPS (INR)
DPS (INR)
Payout ratio (%)
(INR mn)
FY10
FY11
FY12E
FY13E
45,450
19,966
25,484
19,364
14,285
4,989
90
44,848
21,037
8,976
12,061
23,811
5,643
18,168
5,807
12,362
(35)
12,327
17.7
1.4
4.7
58,640
28,504
30,136
19,976
15,060
4,836
80
50,112
26,200
11,108
15,093
23,912
1,603
22,309
7,128
15,181
(230)
14,951
20.3
2.0
4.8
81,650
46,582
35,069
18,804
12,926
5,798
80
53,873
27,781
11,691
16,090
26,091
1,555
24,537
8,156
16,381
(350)
16,031
21.8
2.5
5.8
100,239
58,552
41,687
21,570
15,890
5,580
100
63,257
31,746
13,882
17,864
31,512
2,302
29,209
9,650
19,559
(350)
19,209
26.1
2.9
5.6
(INR mn)
As on 31st March
Liabilities
Equity capital
Reserves
Net worth
Sub bonds/pref cap
Deposits
Borrowings
Other liabilities
Total
Assets
Loans
Investments
Others
Cash & equi
Fixed assets
Other assets
Total assets

Year to March
Growth metrics (%)

Year to March
FY10
FY11
FY12E
FY13E
NII growth
Fees growth
Opex growth
PPP growth
Provisions growth
PAT growth
26.0
28.4
0.0
94.4
161.0
90.3
18.3
5.4
24.5
0.4
(71.6)
21.3
16.4
(14.2)
6.0
9.1
(3.0)
7.2
18.9
22.9
14.3
20.8
48.1
19.8

Fees/Assets
Net revenues/Assets
Provisions/Assets
Taxes/Assets
Total costs/Assets
ROA
Equity/Assets
ROAE
Year to March
EPS (INR)
EPS growth (%)
Adjusted Book Value/share
Price/Earnings (x)
Price/ BV (x)
Price/ ABV
Dividend yield (%)
Price/Earnings (x)*
Price/ BV (x)*
63
FY10
FY11
FY12E
FY13E
3,481
75,241
78,722
3,684
104,470
108,155
3,684
119,566
123,250
3,684
137,701
141,385
169,328
135,559
81,464
465,074
207,524
162,671
118,368
596,718
274,139
178,938
152,813
729,140
345,415
196,832
185,931
869,563
281,136
125,542
396,893
138,096
514,015
151,906
640,141
167,097
25,501
4,865
28,029
465,074
27,058
4,933
29,738
596,718
27,736
5,000
30,483
729,140
27,098
5,446
29,782
869,563
FY10
FY11
FY12E
FY13E
6.0
4.6
10.6
5.0
1.3
1.4
7.7
2.9
17.2
17.0
5.7
3.8
9.5
5.0
0.3
1.4
6.6
2.9
17.8
16.2
5.3
2.8
8.2
4.2
0.2
1.2
5.7
2.5
17.6
14.2
5.2
2.7
8.0
4.0
0.3
1.2
5.5
2.5
16.7
14.8
FY10
FY11
FY12E
FY13E
17.7
88.9
113.1
109.4
30.2
4.7
4.9
0.3
28.3
4.4
20.3
14.6
146.8
144.9
26.4
3.6
3.7
0.4
24.7
3.4
21.8
26.1
7.2
19.8
167.3
191.9
165.7
190.1
24.6
20.5
3.2
2.8
3.2
2.8
0.5
0.5
23.0
19.1
3.0
2.6
* adj for insurance
Edelweiss
Securities Limited
Limited
Company Profile
LARSEN & TOUBRO

In a class of its own
February 7, 2012
Key takeaways
Recently, Larsen & Toubro (L&T) has lost orders such as NMDC coke oven battery
due to difficult technology, NTPC bulk tenders and USD2bn ONGC order which it
lost to NPCC Mc Dermott. Aggressive pricing in ONGC tenders in the past nine
months by smaller players like NPCC Mc Dermott and not by Samsung & Hyundai.
It expects no immediate relief in BTG ordering since coal problem will take more
than two years to be resolved. The Jaypee Group may move the Karchana plant
from Karchana to Bina. Currently, INR57bn Karchana order is non-moving order. It
also mentioned that the Hyderabad Metro is stuck in high court and the concession
period has not started as yet although L&T has started with the pre-construction
design. Godrej and NESCO are two infra projects worth INR10bn that are on hold
in the order book and L&T has advances from them.
The company maintains that it is not qualified for mega billion dollars where
margins would be low and focuses on sub billion USD project size where there is
a fabrication yard locally available and OPM is in a comfortable range. It
mentioned that Power T&D business is steady in Middle East. It targets 20-25% of
the order book from exports. The USD100bn Qatar FIFA ordering will start in next
year. L&T is currently evaluating the stake sale in IDPL, power development and
Larsen Realty. IDPL will be the first to hit the market for IPO. IT has invested
USD400mb in the shipyard which will be ready in next six months, but no major
order has been booked as yet. It can make vessels upto 200 mtr in length and has
tied up with MHI for high end vessels. It has formed a JV with NPCIL for forgings
where the company has invested USD400mn.
Absolute Rating
BUY
Outperformer

Underweight
MARKET DATA (R : LART.BO, B: LT IN)

CMP
: INR 1,354
Target Price
: INR 1,504
52-week range (INR)
: 1,932 / 971
Share in issue (mn)
: 611.8
: 828.4 / 16,489

Promoters*
MFs, FIs & Banks
: 37.8
0.0
FIIs
: 13.8
Others
: 48.3

Nil
Best equipped to ride infrastructure capex cycle: L&T is Indias largest infrastructure
and EPC company with presence across major verticals like process, hydrocarbons,
power, core infrastructure like roads, ports, bridges, industrial structures etc.
Diversified business dominance: L&T has a dominant position and market share in
most operating verticals. It has dedicated key business divisions with skilled
manpower.

Stock
Nifty
EW Capital
Goods Index
30.5
1 month
34.3
9.6
3 months
2.3
0.3
0.2
(15.9)
(7.1)
(16.8)
12 months
Key risks
Economy slowdown. Raw material cost and execution risk.
Year to March
Revenues (INR mn)
Rev. growth (%)
EBITDA (INR mn)
Net profit (INR mn)
EPS (INR)
EPS growth (%)
Diluted P/E (x)
EV/EBITDA (x)
ROE (%)
FY10
FY11
FY12E
FY13E
439,698
8.5
64,398
34,968
613
57.1
15.9
23.7
14.6
20.0
520,891
18.5
76,910
43,918
615
71.4
25.2
19.0
13.4
19.1
622,142
19.4
86,742
48,142
617
78.0
9.3
17.4
12.0
17.8
723,299
16.3
98,528
54,596
617
88.5
13.4
15.3
10.6
17.5

Amit Mahawar
+91-22- 4040 7451
Rahul Gajare
+91-22- 4063 5561
Swarnim Maheshwari
+91-22- 4040 7418
Balance sheet
Income statement
(INR mn)
Year to March
FY10
FY11
FY12E
FY13E

439,698
Direct costs
323,400
Employee costs
30,654
Other expenses
21,246
375,300
EBITDA
64,398
EBIT
54,605
Interest expenses
6,919
Other income
7,585
Profit before tax
55,271
Provision for tax
20,388
Core profit
34,884
Extraordinary items
19,540
Profit after tax
54,423
975
Add: Share in profits of asso. 1,060
54,508
Adjusted net profit
34,968
EPS (INR) basic
58.1
613
Dividend payout (%)
21.2
Tax rate (%)
36.9
520,891
375,409
38,020
30,553
443,982
76,910
12,443
64,467
8,309
11,153
67,312
23,479
43,833
719
44,552
786
871
44,637
43,918
72.1
615
19.9
34.9
622,142
459,270
43,503
32,627
535,400
86,742
15,642
71,100
9,220
9,743
71,623
23,779
47,844
47,844
861
1,158
48,142
48,142
79.1
617
18.4
33.2
723,299
538,033
50,621
36,117
624,771
98,528
17,242
81,286
10,270
10,227
81,243
26,973
54,270
54,270
977
1,303
54,596
54,596
89.7
617
17.1
33.2

Year to March
FY10
FY11
FY12E
FY13E
85.4
2.2
1.6
14.6
7.9
85.2
2.4
1.6
14.8
8.4
86.1
2.5
1.5
13.9
7.7
86.4
2.4
1.4
13.6
7.5
FY10
FY11
FY12E
FY13E
8.5
28.8
26.8
15.9
15.9
18.5
19.4
21.8
25.6
25.2
19.4
12.8
6.4
9.6
9.3
16.3
13.6
13.4
13.4
13.4
FY10
FY11
FY12E
(INR mn)
FY13E
54,508
9,793
(1,530)
(32,582)
30,188
28,318
21,513
44,800
(23,287)
44,637
12,443
(3,109)
(64,837)
(7,757)
8,110
(15,867)
68,942
(84,809)
48,142
15,642
10,081
73,865
48,477
25,388
16,000
9,388
54,596
17,242
11,247
83,085
42,324
40,761
17,000
23,761
Operating expenses
EBITDA margins
Net profit margins
Growth metrics (%)

Year to March
Revenues
EBITDA
PBT
Net profit
EPS
Cash flow statement

Year to March
Net profit
Depreciation
Deferred tax
Others
Gross cash flow
Less:Changes in WC
Operating cash flow
Less: Capex
Free cash flow
65
(INR mn)
As on 31st March
Equity capital
Reserves & surplus
Shareholders funds
Secured loans
Deferred paymet liability
Borrowings
Minority Interest
Sources of funds
Gross block
Depreciation
Net block
Total fixed assets
Investments
Inventories
Sundry debtors
Loand & Advances
Sundry creditors & others
Provisions
Net current assets
Net deferred tax
Uses of funds
FY10
FY11
FY12E
FY13E
1,204
208,708
209,913
141,859
246,073
10,873
466,858
161,081
(37,476)
123,605
66,184
189,789
99,279
23,782
125,280
33,216
160,299
74,433
417,009
212,946
24,743
237,689
179,320
(1,530)
466,858
348
1,218
249,288
250,506
234,490
45,117
328,285
10,260
634,167
205,216
(48,975)
156,242
125,396
281,637
92,158
30,403
144,802
36,454
235,366
121,099
568,124
280,517
24,126
304,642
263,482
(3,109)
634,167
411
1,218
288,439
289,656
236,490
45,117
330,285
11,121
676,179
208,300
(52,701)
155,600
126,396
281,995
93,658
41,523
221,347
28,131
247,134
129,576
667,712
355,086
8,991
364,077
303,635
(3,109)
676,179
476
1,218
333,594
334,812
238,490
45,117
332,285
12,098
724,312
224,300
(69,942)
154,358
127,396
281,754
96,658
48,644
261,527
31,181
277,318
142,534
761,205
402,755
9,440
412,195
349,009
(3,109)
724,312
550
FY10
FY11
FY12E
FY13E
20.0
16.7
28
100
117
11
1.8
3.8
7.9
4.0
1.2
19.1
14.2
26
95
137
(16)
1.9
4.3
7.8
3.7
1.3
17.8
12.6
29
107
146
(10)
1.8
3.8
7.7
4.0
1.1
17.5
13.4
31
122
148
4
1.8
3.4
7.9
4.7
1.0
FY10
FY11
FY12E
FY13E
57.1
15.9
74.3
23.7
3.9
2.1
14.6
71.4
25.2
92.6
19.0
3.3
2.0
13.4
78.0
9.3
104.8
17.4
2.8
1.7
12.0
88.5
13.4
118.0
15.3
2.5
1.4
10.6
Ratios
Year to March
ROACE (%)
Inventory days
Debtors days
Payable days
Current ratio
Debt/EBITDA
Interest coverage
Debt/equity
Year to March
Diluted EPS (INR)
Y-o-Y growth (%)
CEPS
Diluted P/E (x)
Price/BV (x)
EV/Sales (x)
EV/EBITDA (X)
Edelweiss
Securities Limited
Limited
Company Profile
MANAPPURAM FINANCE
Golden opportunity
February 7, 2012
Key takeaways
With respect to deposit issue raised by RBI, management clarified that after being
classified as a non-deposit taking NBFC in 2011, Manappuram F inance
(Manappuram) has not been issuing any public deposit and pending public
deposits of INR12.5mn was lying in escrow with PNB. RBI has raised an issue with
respect to INR3mn issued by Manappuram Agro Foods and it will issue clarification
in this respect.
The company will be more focused on RoA profile. It will pass on operating leverage
and funding cost benefit to customers in terms of lower yields to be equally
competitive.
Management is maintaining its guidance of INR135bn-140bn AUM by FY12 driven
by improved productivity of branches added in the past one year and
disbursements per branch can be ramped up to INR50mn as branches mature.
It terms of customer profile, ~30% of gold loans used for agri, 14% as bridge loans
for housing, 10% to education and marriage each and 15% to working capital
needs.
Average LTV is 71%; minimum is 50% and maximum is 85%. If there is a decline in
gold prices, customers may probably shift to higher LTV products thereby protecting
yields to some extent.
Absolute Rating
HOLD
Performer

MARKET DATA (R : MNFL.BO, B: MGFL IN)

CMP
: INR 46
Target Price
: INR 67
52-week range (INR)
: 71 / 41
Share in issue (mn)
: 841.1
: 38 / 762

Promoters*
: 36.3
MFs, FIs & Banks
FIIs
: 33.0
Others
: 29.4

While we remain positive on its niche business model of collateralised lending,

generating RoEs of 4% plus, we believe RoEs will be vulnerable to increased
competition, margin pressure, volatility in gold prices and most importantly,
regulatory risk.
Key risks
1 month
3 months
12 months
(13.1)
Competition intensity in gold loan financing is bound to rise . Demand and asset
quality of gold loans is susceptible to price fluctuations of underlying collateral
(gold).
Equalweight
Stock
1.3
0.7
Nifty
EW BFSI
Index
14.1
9.6
15.8
(15.5)
0.3
3.9
(7.1)
(6.2)
Financials
Year to March
FY10
FY11
FY12E
FY13E

Net rev growth (%)
Net interest income(INR mn)
Net profit (INR mn)
Diluted EPS (INR)
EPS growth (%)
Diluted P/E (x)
Price to book (x)
ROAE (%)
3,413
96.8
3,306
1,197
170
2.0
306.1
22.2
5.0
27.8
8,496
148.9
8,314
2,827
417
3.4
66.8
13.3
2.0
22.3
16,498
94.2
16,162
5,726
417
6.9
102.6
6.6
1.6
26.5
22,304
35.2
21,855
7,173
417
8.6
25.3
5.2
1.3
26.7

Kunal Shah
+91-22- 4040 7579
Nilesh Parikh
+91-22- 4063 5470
Suruchi Chaudhary
+91-22-6623 3316
Balance sheet
Income statement
Year to March
Interest income
Interest charges
Net interest income
Fee & other income
Net revenues
Operating expense
- Employee exp
- Depreciation /amortisation
- Other opex
Preprovision profit
Provisions
PBT
Taxes
PAT
Reported PAT
Basic number of shares (mn)
Basic EPS (INR)
Diluted EPS (INR)
DPS (INR)
Payout ratio (%)
Growth metrics (%)

Year to March
Operating income growth
Net revenues growth
Opex growth
PPP growth
Provisions growth
PAT growth
(INR mn)
FY10
FY11
FY12E
FY13E
4,675
1,369
3,306
107
3,413
1,453
536
57
859
1,960
142
1,818
621
1,197
1,197
585.3
2.0
589.0
2.0
0.5
16.1
11,634
3,320
8,314
181
8,496
4,032
1,605
213
2,214
4,463
224
4,239
1,412
2,827
2,827
833.8
3.4
833.8
3.4
0.5
20.6
22,418
8,605
13,813
317
14,130
6,250
2,819
224
3,207
7,880
826
7,054
2,328
4,726
4,726
833.8
5.7
833.8
5.7
0.9
15.0
31,848
13,947
17,901
425
18,327
8,116
3,620
282
4,214
10,210
1,508
8,702
2,872
5,830
5,830
833.8
7.0
833.8
7.0
1.0
15.0
FY10
FY11
FY12E
FY13E
100.3
96.8
76.1
115.6
(21.4)
150.5
151.5
148.9
177.6
127.7
57.9
136.1
66.1
66.3
55.0
76.6
268.4
67.2
29.6
29.7
29.9
29.6
82.5
23.4
FY10
FY11
FY12E
FY13E
340
5,765
6,106
0
1,165
16,501
691
(33)
7,077
31,506
834
18,406
19,240
0
2,779
43,723
10,038
(87)
11,183
86,876
834
22,279
23,113
0
3,279
95,635
32
(176)
12,094
133,977
834
27,062
27,895
0
3,279
143,405
34
(285)
17,680
192,008
18,694
1,407
4,774
1,015
3,759
569
7,077
31,506
63,671
403
12,082
1,911
10,171
1,448
11,183
86,876
108,848
404
14,666
4,104
10,563
2,069
12,094
133,977
159,120
404
17,886
5,431
12,455
2,349
17,680
192,008
107.3
249.5
98.6
0.4
0.1
70.0
190.5
212.7
176.1
0.5
0.1
70.0
61.6
77.9
54.4
0.7
0.2
70.0
46.2
49.9
43.8
0.9
0.2
75.0
FY10
FY11
FY12E
FY13E
14.2
0.5
14.7
(6.2)
(0.6)
(2.7)
(9.5)
5.1
18.5
27.8
14.3
0.3
14.6
(6.9)
(0.4)
(2.4)
(9.7)
4.9
21.8
22.3
12.7
0.3
13.0
(5.8)
(0.8)
(2.1)
(8.7)
4.3
19.5
22.3
11.1
0.3
11.4
(5.0)
(0.9)
(1.8)
(7.8)
3.6
15.9
22.9
FY10
FY11
FY12E
FY13E
Diluted EPS (INR)

2.0
EPS growth (%)
306.1
9.0
Adj. book value per share (INR) 8.9
Diluted P/E (x)
22.2
Price/ BV (x)
5.0
Price/ Adj. BV (x)
5.0
Dividend yield (%)
1.1
3.4
66.8
23.1
23.0
13.3
2.0
2.0
1.0
6.9
102.6
28.7
28.5
6.6
1.6
1.6
2.3
8.6
25.3
35.8
35.5
5.2
1.3
1.3
2.9
Liabilities
Equity capital
Reserves
Net worth
Preference capital
Subordinate debt
Secured loans
Unsecured loans
Assignments
Total liabilities
Assets
Loans
Investments
Current assets
Current liabilities
Net current assets
Assignments
Total assets
Loan growth
Deposit growth
EA growth
Gross NPA ratio
Net NPA ratio
Provision coverage

Year to March
Non-interest income/Assets
Net revenues/Assets
Provisions/Assets
Taxes/Assets
Total costs/Assets
ROA
Equity/Assets
ROAE
Year to March
Year to March
Yield on advances
Cost of funds
Spread
Cost-income
Tax rate
FY10
FY11
FY12E
FY13E
24.5
7.1
17.4
14.2
42.6
34.2
23.1
7.1
16.0
14.3
47.5
33.3
22.9
9.6
13.3
12.7
44.2
33.0
21.4
10.1
11.3
11.1
44.3
33.0
67
(INR mn)
As on 31st March
Edelweiss
Securities Limited
Limited
Company Profile
ONGC
Lower provisional subsidies in FY12
February 7, 2012
Key takeaways
Subsidy to remain at 37.91% for upstream for Q4FY12 (provisional estimates)
Absolute Rating
BUY
Outperformer
The government has indicated, in a recent communication, that the FY12 upstream
provisional subsidy is likely to be pegged at 37.91% (same as 9mFY12 average),
which will result in net realization at over USD56/bbl. We believe the same is
positive as the consensus has pegged the upstream sharing at ~45%.
Oil production to get a boost in FY14; Daman gas to start from FY17

Overweight
MARKET DATA (R : ONGC.BO, B: ONGC IN)
Management guided for FY13/14 crude oil production (including JV) at 28.75/
32.10 mmt. Incremental FY14 production of 3.35 mmt to come from B-22, B-4, B193, Heera and South Heera redevelopment, MHS- redevelopment and MHN
redevelopment fields. Gas production guidance for FY13/14 stands at 27.0/27.5
bcm. Peak gas production from Daman offshore fields is likely to start in FY17
with 7 mmscmd and finally scale up to ~15 mmscmd.
CMP
: INR 287
Target Price
: INR 379
52-week range (INR)
: 325 / 226
Share in issue (mn)
: 8,555.5
: 2,452 / 48,814
Capex plans of INR1,450 bn for next 5 years, 100 tcf of shale gas reserves
In its recent five year plan, ONGC has planned a capex of INR1,450bn till FY17.
FY13 planned capex is INR331bn. ONGC awaits DGHs commerciality approval for
3 large discoveries Mahanadi basin, KG-98/2 northern area, and KG-98/2 southern
area.
Lower subsidy burden and increase in crude production implies better times ahead
for ONGC. We expect the stock to perform well in the near term as we expect lower
sharing of subsidies against Street estimates.

Promoters*
: 74.1
MFs, FIs & Banks
6.8
FIIs
5.3
Others
: 13.7

Nil
Key risks
Higher subsidies may limit crude net realizations. Higher-than-expected decline
rates in its existing matured assets could impact production, going forward.
ONGCs assets in countries like Sudan/Syria face geo-political risks.
Stock
Nifty
EW O & G
Index
1 month
8.6
9.6
8.0
3 months
3.1
0.3
(1.1)
12 months
3.1
(7.1)
(5.8)
Financials
Year to March
Revenues (INR mn)
EBITDA (INR mn)
Net profit (INR mn)
EPS (INR)
Diluted P/E (x)
EV/EBITDA (x)
ROE (%)
FY10
FY11
FY12E
FY13E
1,018
443
194
22.6
12.6
5.1
20.2
1,176
485
225
26.3
10.9
4.6
20.9
1,288
523
263
29.6
9.7
4.4
20.6
1,374
609
296
34.6
8.3
3.8
21.1


+91 22 6623 3315
Balance sheet
Income statement
Year to March
(INR bn)
FY10
FY11
FY12E
FY13E
Net revenues
1,018
Statutory levies
170
Other expenditure
398
Provisions & Write-offs
6
Total expenditure
574
EBITDA
443
Recouped cost
187
EBIT
256
Financing expense
5
Other income
53
Profit before tax
304
Current tax
96
Other taxes
(0)
Deferred tax
12
Total tax
107
Core profit
197
Extraordinary/Prior period items 0
Profit after tax
197
Add: Profit/Loss from asso.
0
Less: Profit/Loss from min. int.
3
Group Profit after tax
194
Eq. shares outstanding (bn)
9
EPS (INR) basic
22.6
Diluted shares (bn)
9
EPS - Diluted (INR)
22.6
CEPS
35.4
DPS
8.2
Dividend payout (%)
36.5
1,176
197
479
16
692
485
206
278
4
69
343
114
(8)
9
115
228
(0)
228
0
4
225
9
26.3
9
26.3
41.6
8.7
33.3
1,288
201
553
12
765
523
215
308
6
86
387
126
(5)
11
132
256
10
266
0
2
263
9
29.6
9
29.6
46.0
9.6
32.5
1,374
209
544
12
765
609
232
377
9
78
446
139
(5)
12
147
299
299
0
3
296
9
34.6
9
34.6
52.9
11.7
33.8

Year to March
FY10
FY11
FY12E
FY13E
39.1
39.1
43.6
18.4
0.5
19.3
40.7
40.7
41.2
17.5
0.4
19.4
42.9
42.9
40.6
16.7
0.5
19.9
39.6
39.6
44.3
16.9
0.6
21.8
FY10
FY11
FY12E
FY13E
(2.7)
6.4
(2.2)
(2.0)
(1.8)
15.6
9.3
12.9
16.0
16.0
9.5
7.9
12.9
12.0
12.8
6.6
16.5
15.1
17.0
17.0
FY10
FY11
FY12E
(INR bn)
FY13E
Net profit
194
Add: Depreciation
123
Add: Deferred tax
12
Add: Others
(60)
Gross cash flow
269
Less:Changes in working capital (19)
Opertaing cash flow
288
Less: Capex
213
Free cash flow
75
225
157
9
(41)
349
(69)
418
356
62
263
91
11
(71)
294
54
239
315
(76)
296
104
12
(71)
342
(1)
343
320
23
Cost of goods sold

Operating expenses
EBITDA margins
Interest
Net profit margin
Growth metrics (%)

Year to March
Revenues
EBITDA
PBT
Net profit
EPS
Cash flow statement

Year to March
69
(INR bn)
As on 31st March
FY10
FY11
FY12E
FY13E

21
Reserves & surplus
993
1,014
16
Secured loans
7
Unsecured loans
56
Total debt (C)
63
103
Lia. for abondonment cost (E)
175
Sources of funds (A+B+C+D+E) 1,371
Gross fixed & prod. proper.
2,044
Accumulated DD&A
1,193
Net fixed assets
851
Cap.WIP & Exp. wells in progr.
256
1,107
Investments (B)
52
Inventories
82
Accounts receivable
71
224
Loans and advances
121
7
Current assets (C)
506
Current liabilities
227
Provisions
75
Current lia. & provisions (D)
302
204
Miscellaneous expenditure (F)
8
Uses of funds (A+B+E+F)
1,371
118.5
43
1,110
1,153
20
7
56
63
112
199
1,546
2,280
1,350
930
376
1,307
34
86
98
287
110
9
589
340
51
391
198
8
1,546
134.8
43
1,281
1,324
21
7
113
120
122
205
1,793
2,524
1,440
1,083
448
1,531
33
94
112
254
128
8
596
318
58
377
220
9
1,793
154.7
43
1,465
1,507
22
7
125
132
135
201
1,997
3,004
1,544
1,460
287
1,747
23
97
109
253
141
6
606
326
63
389
217
9
1,997
176.2
FY10
FY11
FY12E
FY13E
20.1
20.2
14.9
1.7
0.7
26
30
81
(26)
0.1
0.1
0.1
19.7
20.9
15.7
1.5
0.7
26
27
106
(53)
0.1
0.1
0.1
18.8
20.6
15.3
1.6
0.7
30
27
90
(34)
0.1
0.2
0.1
20.2
21.1
15.8
1.6
0.6
29
26
87
(32)
0.1
0.2
0.1
FY10
FY11
FY12E
FY13E
22.6
(1.8)
35.4
12.6
2.4
2.2
5.1
2.9
26.3
16.0
41.6
10.9
2.1
1.9
4.6
3.1
29.6
12.8
46.0
9.7
1.8
1.8
4.4
3.4
34.6
17.0
52.9
8.3
1.6
1.7
3.8
4.1
Ratios
Year to March
ROACE
ROAE (%)
ROA
Current ratio
Cash ratio
Receivables (days)
Inventory (days)
Payables (days)
Debt-equity (x)
Debt/EBITDA
Year to March
EPS - Diluted (INR) - Cons.
Y-o-Y growth (%)
CEPS (INR)
Diluted P/E (x) - Cons.
P/BV (x)
EV/Sales (x)
EV/EBITDAX (x)
Dividend yield( %)
Edelweiss
Securities Limited
Limited
Company Profile
PANTALOON RETAIL
Growth engine
February 7, 2012
Retail
Key takeaways
Pantaloon Retail (PRIL) is looking to divest equity stake and raise ~INR10-12bn,
which the company will use to pay back some debt.
Absolute Rating
BUY
Performer
The company is committed to calibrated growth by increasing selling space by

2mn sq feet per year in FY12 and FY13.
FDI in multi-brand retail is likely to benefit the company, but currently it is in the
cold storage. B but traction could take place post elections and budget; could take
another 2-3 months.
The JV with a Japanese company is likely to take place by end of FY12 which would
be in the foods category.
Divestment of Future Capital and Future Insurance stake is in progress and the
discussions have reached an advanced stage.
Raw material prices, specially cotton, is seeing a correction from peak prices. The
company might decrease prices only if volumes are being impacted by the earlier
price hikes. PRIL is confident of improving inventory days from 120 to 85-90 days
by the next 3-5 years. PRIL shut down 11 E-Zone stores. The company is also
witnessing severe slowdown in Hometown.
The Indian retail landscape is evolving with interplay of several demographic and
economic factors. Despite the slowdown expected in real GDP growth in the near
term, the long term prospects backed by changing consumer behaviour in favour
of larger discretionary spend, has set the stage for a healthy growth in the retail
space over the next five years. The big opportunity lies in the growing share of
organised retail with the growing trend among consumers to allocate a larger
share of income to consumption and gradual improvement in lifestyle. We continue
to remain optimistic about PRILs strong presence across multiple consumption
categories and its size. However, burgeoning debt and higher inventory days remain
key concerns and continues to deteriorate.

Overweight
MARKET DATA (R : PART.BO, B: PF IN)

CMP
: INR 193
Target Price
: INR 290
52-week range (INR)
: 364 / 125
Share in issue (mn)
: 207.5
: 40 / 796

Promoters*
: 44.7
MFs, FIs & Banks
: 17.3
FIIs
: 23.4
Others
: 14.6

Nil

Stock
Nifty
EW Retail
Index
1 month
25.6
9.6
10.6
3 months
(6.4)
0.3
(4.2)
12 months
(44.5)
(7.1)
(11.1)
Key risks
Rising share of debt. Pressure on margins due to competition. Macro slowdown.
Financials
Year to March
Revenues (INR mn)
Rev. growth (%)
EBITDA (INR mn)
Net profit (INR mn)
Diluted EPS (INR)
EPS growth (%)
Diluted P/E (x)
EV/EBITDA (x)
ROAE (%)
FY10
FY11
FY12E
FY13E
89,261
40.8
8,191
2,302
206
11.8
59.7
16.4
9.8
9.0
110,123
23.4
9,600
1,897
217
8.7
(25.9)
22.1
12.0
6.3
129,946
18.0
11,175
1,934
217
8.9
2.0
21.7
11.0
6.0
160,054
23.2
13,845
2,482
217
11.4
28.3
16.9
9.5
7.3

Abneesh Roy
+91 22 6620 3141
Harsh Mehta
+91 22 4063 5543
Balance sheet
Income statement
Year to March
(INR mn)
FY10
FY11
FY12E
FY13E
Net revenues
89,261
Cost of materials
63,549
Gross profit
25,712
Employee costs
3,940
Electricity expenses
1,308
Rent and lease expenses
6,315
Others
3,833
EBITDA
8,191
Depreciation
2,123
EBIT
6,068
Other income
857
6,925
3,913
PBT
3,013
582
Core PAT
2,431
Extraordi. items (net of tax)
(129)
PAT after min. int. & asso.
2,302
Eq. shares outstanding (mn)
206
EPS (INR) basic
11.8
Diluted shares (mn)
206.2
11.8
CEPS (INR)
22.1
DPS
1.3
11.0
110,123
79,010
31,113
4,883
2,485
1,831
7,474
4,840
9,600
2,675
6,925
208
7,133
4,288
2,845
948
1,897
0
1,897
217
8.7
217.1
8.7
21.1
0.9
10.7
129,946
92,262
37,684
5,848
2,664
2,209
10,266
5,523
11,175
3,395
7,781
324
8,104
5,218
2,887
953
1,934
0
1,934
217
8.9
217.1
8.9
24.5
1.0
11.0
160,054
113,238
46,816
7,202
3,361
2,721
12,644
7,042
13,845
4,182
9,663
301
9,964
6,260
3,704
1,222
2,482
0
2,482
217
11.4
217.1
11.4
30.7
1.3
11.0

Year to March
FY10
Cost of materials
Employee costs
Depreciation
EBITDA margin
EBIT margin
Net profit margin
Growth metrics (%)
Year to March
Revenues
EBITDA
PBT
Net profit
EPS
Cash flow statement
Year to March
Net profit
Depreciation
Others
Gross cash flow
Less: Changes in WC
Less: Capex
Free cash flow
FY11
FY12E
FY13E
71.2
4.4
2.4
1.5
7.1
4.3
2.4
4.4
9.2
6.8
2.7
71.7
4.4
2.3
1.7
6.8
4.4
2.4
3.9
8.7
6.3
1.7
71.0
4.5
2.1
1.7
7.9
4.3
2.6
4.0
8.6
6.0
1.5
70.8
4.5
2.1
1.7
7.9
4.4
2.6
3.9
8.6
6.0
1.6
FY10
FY11
FY12E
FY13E
40.8
22.6
39.4
73.0
59.7
23.4
17.2
(5.6)
(22.0)
(25.9)
18.0
16.4
1.5
2.0
2.0
23.2
23.9
28.3
28.3
28.3
FY10
FY11
FY12E
(INR mn)
FY13E
2,302
7,328
2,123
5,205
9,630
(2,339)
11,969
4,923
7,046
1,897
6,964
2,675
4,288
8,860
6,248
2,612
9,392
(6,780)
1,934
8,612
3,395
5,218
10,546
3,162
7,385
9,555
(2,170)
2,482
10,442
4,182
6,260
12,923
4,183
8,740
10,750
(2,010)
71
(INR mn)
As on 31st March
Share capital
Reserves
Shareholders' funds
Minority
Secured loans
Unsecured loans
Borrowings
Sources of funds
Gross block
Less depreciation
Net fixed assets
Investments
Current assets
Inventories
Sundry debtors
Other current asset
Loans and advances
Current liabilities
Liabilities
Provisions
Working capital
Uses of funds
BV (INR)
Ratios
Year to March
ROAE (%)
ROACE (%)
Debtor days
Inventory days
Payable days
Current ratio
Debt/EBITDA
Debt/Equity
Year to March
Diluted EPS (INR)
Y-o-Y growth (%)
CEPS (INR)
Diluted P/E (x)
Price/BV (x)
EV/Sales (x)
EV/EBITDA (x)
Dividend yield (%)
FY10
FY11
FY12E
FY13E
1,108
27,656
28,764
3,183
32,571
10,949
43,520
1,102
76,569
30,868
4,400
26,468
3,044
9,098
58,467
24,912
3,914
2,865
157
26,620
20,508
19,706
802
37,959
76,569
140
1,818
29,602
31,420
3,313
55,397
23,065
78,461
1,555
114,749
40,260
6,787
33,473
3,446
12,967
93,287
36,791
5,298
5,520
402
45,275
28,424
26,721
1,702
64,863
114,749
145
1,818
31,287
33,105
3,313
37,558
45,904
83,461
1,555
121,434
50,260
10,182
40,079
3,000
12,967
93,122
39,162
5,400
2,884
402
45,275
27,734
26,032
1,702
65,388
121,434
152
1,818
33,450
35,267
3,313
41,608
50,854
92,461
1,555
132,596
61,260
14,364
46,897
2,750
12,967
103,771
48,191
6,607
3,295
402
45,275
33,788
32,086
1,702
69,983
132,596
162
FY10
FY11
FY12E
FY13E
9.0
9.6
14
96
75
35
2.9
5.3
1.5
1.5
1.6
6.3
8.2
15
102
84
33
3.3
8.2
2.5
2.5
1.6
6.0
7.4
15
110
80
45
3.4
7
2.5
2.5
1.5
7.3
8.5
15
110
80
45
3.1
7
2.6
2.6
1.5
FY10
FY11
FY12E
FY13E
11.8
59.7
22.1
16.4
1.4
0.9
9.8
0.6
8.7
(25.9)
21.1
22.1
1.3
1.0
12.0
0.5
8.9
2.0
24.5
21.7
1.3
0.9
11.0
0.5
11.4
28.3
30.7
16.9
1.2
0.8
9.5
0.7
Edelweiss
Securities Limited
Limited
Company Profile
PERSISTENT SYSTEMS
Navigating turbulent times
February 7, 2012
IT
Key takeaways
EDELWEISS RATINGS
The company reiterated that the macro environment continues to remain uncertain
and deal cycles taking longer to close. However, it is seeing traction in smaller
sized deals due to healthy start up activity.
It stated that it will continue to invest in S&M going ahead to scale up its USD1mn
plus accounts and maintained that its margin can sustain at ~ 18% PBT level on
constant currency basis. Further, it believes higher proportion of IP-led revenues
and benefits of sell-with strategy will aid margin performance. It expects tax
rate to dip gradually to 26%.
Q4FY12 is likely to witness a volume growth unlike Q3FY12 which saw a volume
decline.
Significant emphasis remains on continuing with its sell with strategy and expects
it to be key growth driver inFY13.
The company has formed strategic partnerships in its key focus areas viz., Cloud
Computing, Mobility, Analytics and Collaboration which will drive growth in FY13.
It currently has hedge book of USD102mn at an average price of INR49.59 /USD.
Key risks
Given the high proportion of offshore revenues, significant appreciation of INR
against USD will impact its financials materially
Since Persistent derives more than 80% of its revenue from US, unsustainable
recovery in the geography could hamper the companys performance
Absolute Rating
NOT RATED
MARKET DATA (R : PERS.BO, B: PSYS IN)

CMP
: INR 323
Target Price
: NA
52-week range (INR)
: 429 / 280
Share in issue (mn)
: 40.0
: 13 / 257

Promoters*
: 38.9
MFs, FIs & Banks
: 27.0
FIIs
Others
: 28.2

5.8
Nil

Sensex
Stock
Stock over
Sensex
(8.8)
1 month
11.7
2.9
3 months
0.8
2.7
1.9
12 months
(1.8)
(17.7)
(15.9)
Financials
Year to March
FY08
FY09
FY10
FY11
Kunal Sangoi
Revenues (INR mn)

Rev. growth (%)
EBITDA (INR mn)
Net profit (INR mn)
Diluted EPS (INR)
EPS growth (%)
Diluted P/E (x)
EV/EBITDA (x)
4,249
34.6
900
832
34
25.2
73.9
12.8
8.9
5,938
39.8
1787.51
661
35
19.3
(23.5)
16.8
5.1
6,012
1.2
1464
1,150
36
32.1
66.4
10.1
4.8
7,758
29.1
1583
1,398
40
34.9
8.8
9.3
5.5
+91-22- 6623 3370


Sandip Agarwal
+91-22- 6623 3474
Omkar Hadkar
+91-22- 6620 3147
Balance sheet
Income statement
Year to March
(INR mn)
FY08
FY09
FY10
FY11
Revenues
4,249
Personnel expenses
2,711
Gross profit
1,537
SG&A expenses
637
EBITDA
900
280
EBIT
620
Other income
48
Forex gain/(loss)
222
Profit before tax
889
Tax
22
Core profit
867
(35)
Profit after tax
832
27
EPS (INR) basic
31.6
Diluted shares (mn)
34.4
EPS (INR) diluted
25.2
CEPS (INR)
41.8
Dividend per share
1.6
6.1
5,938
3,036
2,902
1,115
1,788
297
1,491
69
(874)
685
9
676
(15)
661
31
21.6
35.1
19.3
31.1
1.1
6.3
6,012
3,372
2,639
1,176
1,464
335
1,128
81
32
1,241
91
1,150
0
1,150
32
35.7
35.9
32.1
46.2
3.0
10.0
7,758
4,723
3,036
1,453
1,583
423
1,160
171
173
1,504
106
1,398
0
1,398
38
37.0
40.1
34.9
48.3
5.8
18.3
FY09
FY10
FY11

Year to March
FY08
Cost of revenues
Gross margin
SG&A expenses
EBITDA margin
EBIT margin
Net profit margins
63.8
36.2
15.0
21.2
14.6
20.4
51.1
48.9
18.8
30.1
25.1
11.4
56.1
43.9
19.6
24.3
18.8
19.1
60.9
39.1
18.7
20.4
14.9
18.0
Growth metrics (%)

Year to March
FY08
FY09
FY10
FY11
34.6
11.7
15.8
60.1
61.4
73.9
39.8
98.7
140.5
(22.9)
(22.0)
(23.5)
1.2
(18.1)
(24.3)
81.0
70.2
66.4
29.1
8.2
2.8
21.2
21.5
8.8
Revenues
EBITDA
EBIT
PBT
Net profit
EPS
Cash flow statement

Year to March
FY08
FY09
FY10
(INR mn)
FY11
Net profit
832
Depreciation
280
Others
(12)
Gross cash flow
1,099
Less:Changes in working capital 9 7
Operating cash flow
1,002
Less: Capex
485
Free cash flow
517
661
297
(65)
893
195
698
474
224
1,150
335
51
1,536
(74)
1,611
475
1,135
1,398
423
199
2,020
445
1,575
970
605
73
(INR mn)
As on 31st March
Reserves
Minority interest
Sources of funds
Gross fixed assets
Net fixed assets
Capital WIP
Investments
Deferred tax asset
Debtors
Loans and advances
Sundry Creditors
Provisions
Other liabilities
Working capital
BV per share (INR)
Ratios
Year to March
ROAE (%)
ROACE (%)
Debtors (days)
Payable (days)
Current ratio
Equity turnover(x)
Year to March
Diluted EPS (INR)
Y-o-Y growth (%)
CEPS (INR)
Diluted P/E (x)
Price/BV(x)
EV/Revenues (x)
EV/EBITDA (x)
Dividend yield (%)
FY08
FY09
FY10
FY11
359
2,927
3,286
0
3,286
2,928
1,286
1,643
331
692
(3)
113
745
403
89
1,351
244
165
318
727
623
3,286
95
359
3,589
3,948
0
3,948
3,372
1,573
1,800
377
880
20
165
1,034
454
130
1,784
71
170
673
914
870
3,948
113
400
5,990
6,390
45
6,435
3,715
1,881
1,834
485
1,562
7
1,918
1,363
638
340
4,258
313
317
1,080
1,710
2,548
6,435
178
400
7,071
7,471
30
7,501
4,543
2,281
2,261
605
2,500
60
1,000
1,582
869
226
3,677
465
396
741
1,602
2,075
7,501
186
FY08
FY09
FY10
FY11
29.9
25.5
54
19
35
1.9
2.6
1.5
1.5
18.7
52.7
55
10
45
2.0
3.5
1.6
1.6
22.3
28.4
73
12
61
2.5
3.3
1.2
1.2
20.2
23.5
69
18
51
2.3
3.8
1.1
1.1
FY08
FY09
FY10
FY11
25.2
73.9
41.8
12.8
3.4
1.9
8.9
4.5
0.5
19.3
(23.5)
31.1
16.8
2.9
1.5
5.1
6.2
0.4
32.1
66.4
46.2
10.1
1.8
1.2
4.8
4.4
0.9
34.9
8.8
48.3
9.3
1.7
1.1
5.5
3.9
1.8
Edelweiss
Securities Limited
Limited
Company Profile
PHOENIX MILLS
Real estate play on Indian consumption theme
February 7, 2012
Real Estate
Key takeaways
HSP anchor rental renegotiations complete, further renegotiations in FY14-15
Absolute Rating
BUY
Outperformer
Rental renegotiations for 0.15 msf of HSP anchor space (total HSP area at 0.9msf)
has been completed at a weighted average rent of INR110/sf/month vs. INR64/sf/
month earlier. Further, ~0.50 msf of space is up for rental renegotiations over
FY13-15E (0.27msf in FY14E and 0.17 msf in FY15E). Management also highlighted
that development plans for Phase IV of HSP (0.25 msf) would be firmed up over the
next 6-8 months post which Phoenix Mills (PML) may look at a formal project
launch in CY13.
Shangri-La Hotel to open in June 2012; final approvals awaited

Underweight
MARKET DATA (R : PHOE.BO, B: PHNX IN)

CMP
: INR 188
Target Price
: INR 246
52-week range (INR)
: 229 / 149
The Shangri-La Hotel, which has faced delays, is slated to now open by June 2012
(Edelweiss est. October 2012) as PML awaits final approvals before handing over
the hotel to the Shangri-La operations team in Q4FY12. Further, the hotel which
earlier had an estimated project cost of INR8.35bn may see cost overruns of
~INR0.7bn, taking project costs to ~INR9bn, largely due to additional interest on
construction on account of delayed approvals.
Share in issue (mn)
: 144.8
: 27 / 542
Phase II Market City projects to be launched in FY13; to aid cut debt in SPVs
Promoters*
: 65.9
MFs, FIs & Banks
FIIs
: 21.6
Others
6.1

Nil
With Phase I of Market City projects drawing to a close in CY12, PML is embarking
on a strategy of reducing SPV level debt for Market Cities through phased launch of
residential/commercial sale projects in FY13. These include ~0.6 msf f residential
space at Bengaluru (W), 0.3 msf residential space at Pune and ~0.7 msf of commercial
space at Kurla, Mumbai (PML has acquired 0.2 msf of the total 0.9msf commercial
space in Phase II) while the Chennai residential launch in FY12 of 0.25 msf has been
70% pre-sold for ~INR1.1bn at an average realization of INR6,600/sf.

Stock
Factoring in the recent Phoenix Hospitality Company (PHCPL) acquisition and
rolling our NAV to FY13E basis, we have a NAV of INR246/share. Near term triggers
are the Shangri La Hotel becoming operational in H2FY13 and the commencement
of Chennai Market City mall. We reiterate BUY/SO with a target price of INR246/
share at par with FY13E NAV.
6.4
Nifty
EW Real
Estate Index
1 month
6.8
9.6
14.2
3 months
(8.8)
0.3
(4.8)
12 months
(14.2)
(7.1)
(16.9)
Key risks
Slower-than-expected offtake in retail leasing. Cap rate expansion.
Year to March
Revenues (INR mn)
Rev. growth (%)
EBITDA (INR mn)
Net profit (INR mn)
EPS (INR)
EPS growth (%)
Diluted P/E (x)
EV/EBITDA (x)
ROE (%)
FY10
FY11
FY12E
FY13E
1,230
23.5
776
620
145
4.3
(20.9)
44.1
38.5
4.0
2,102
70.8
1,406
842
145
5.8
35.7
32.5
23.6
5.1
3,818
81.7
2,534
1,412
145
9.7
67.7
19.4
14.6
8.2
4,819
26.2
2,909
1,293
145
8.9
(8.4)
21.1
12.6
7.1

Aashiesh Agarwaal, CFA

+91-22-4063 5491
aashiesh.agarwaal@edelcap.com
Adhidev Chattopadhyay
+91-22-6623 3358
adhidev.chattopadhyay@edelcap.com
Balance sheet
Income statement
Year to March
(INR mn)
FY10
FY11
FY12E
FY13E

1,230
Direct costs
12
Employee costs
66
Other expenses
377
455
EBITDA
776
172
EBIT
603
Interest expenses
86
Other income
243
Profit before tax
760
Provision for tax
147
Core profit
613
Extraordinary items
0
Profit after tax
613
(1)
Add: Share in profits of asso.
6
620
Adjusted net profit
620
EPS (INR) basic
4.3
145
Dividend payout (%)
28.0
2,102
51
141
505
696
1,406
314
1,091
228
287
1,151
321
830
0
830
(29)
(17)
842
842
5.8
145
31.0
3,818
16
153
1,115
1,284
2,534
569
1,965
398
180
1,747
545
1,202
0
1,202
60
270
1,412
1,412
9.7
145
25.0
4,819
17
145
1,748
1,910
2,909
741
2,168
539
175
1,804
686
1,118
0
1,118
244
419
1,293
1,293
8.9
145
20.0

Year to March
FY10
Operating expenses
EBITDA margins
Net profit margins
Growth metrics (%)

Year to March
Revenues
EBITDA
PBT
Net profit
EPS
Cash flow statement

Year to March
Net profit
Depreciation
Deferred tax
Others
Gross cash flow
Less:Changes in WC
Operating cash flow
Less: Capex
Free cash flow
FY11
FY12E
FY13E
37.0
14.0
7.0
63.0
49.8
33.1
14.9
10.8
66.9
39.5
33.6
14.9
10.4
66.4
31.5
39.6
15.4
11.2
60.4
23.2
FY10
FY11
FY12E
FY13E
23.5
28.9
(20.5)
(20.1)
(20.9)
70.8
81.2
51.4
35.4
35.7
81.7
80.3
51.8
44.8
67.7
26.2
14.8
3.2
(7.0)
(8.4)
FY10
FY11
FY12E
(INR mn)
FY13E
613
172
0
(150)
635
(544)
1,179
2,694
(1,515)
830
314
0
118
1,262
325
937
2,907
(1,970)
1,202
569
0
488
2,259
2,718
(460)
2,758
(3,217)
1,118
741
0
784
2,642
1,239
1,403
250
1,153
75
(INR mn)
As on 31st March
FY10
FY11
FY12E
FY13E
290
15,759
16,048
6,398
210
6,608
2,190
24,847
7,955
633
7,321
9,137
16,458
5,601
3
431
671
3,628
4,732
1,724
244
1,969
2,764
24
24,847
111
290
16,410
16,700
9,103
523
9,626
1,965
28,291
8,880
948
7,932
11,245
19,178
4,787
1,182
961
1,021
4,238
7,402
2,725
359
3,084
4,318
9
28,291
115
290
17,412
17,702
14,353
523
14,876
2,025
34,603
22,883
1,516
21,367
0
21,367
4,887
1,063
1,211
2,432
6,938
11,645
2,838
467
3,305
8,341
9
34,603
122
290
18,405
18,695
13,353
523
13,876
2,269
34,839
23,133
2,257
20,876
0
20,876
5,187
1,531
1,261
1,511
7,188
11,491
2,366
357
2,723
8,768
9
34,839
129
FY10
FY11
FY12E
FY13E

4.0
ROACE (%)
3.2
Inventory days
100
Debtors days
116
Payable days
1,236
NM
Current ratio
2.4
Debt/EBITDA
8.5
0.2
Debt/equity
0.4
5.1
5.1
4,267
121
1,166
NM
2.4
6.8
0.3
0.6
8.2
7.4
NM
104
791
NM
3.5
5.9
0.3
0.8
7.1
7.3
NM
94
497
NM
4.2
4.8
0.2
0.7
FY10
FY11
FY12E
FY13E
4.3
(20.9)
13.6
44.1
1.7
24.3
38.5
5.8
35.7
20.2
32.5
1.6
15.8
23.6
9.7
67.7
29.5
19.4
1.5
9.7
14.6
8.9
(8.4)
27.9
21.1
1.5
7.6
12.6
Equity capital
Reserves & surplus
Shareholders funds
Secured loans
Unsecured loans
Borrowings
Minority interest
Sources of funds
Gross block
Depreciation
Net block
Total fixed assets
Investments
Inventories
Sundry debtors
Loans and advances
Provisions
Net current assets
Net deferred tax
Uses of funds
Ratios
Year to March
Year to March
Diluted EPS (INR)
Y-o-Y growth (%)
CEPS
Diluted P/E (x)
Price/BV (x)
EV/Sales (x)
EV/EBITDA (X)
Edelweiss
Securities Limited
Limited
Company Profile
POWER FINANCE CORPORATION

Firming up
February 7, 2012
Key takeaways
Exposure of INR3.95bn to Konaseema considered as NPL INR370mn of

provisioning and INR190mn of income reversal. Critical will be the hearing on
February 13 related to financing arrangement and sharing of project risk.
Management expects recoveries of INR150mn-200mn from Om Shakti (classified
as NPL) and R S India (restructured Satara based wind project). Even with respect
to Maheswar project, it indicated that government is keenly looking for
participation from some government agency.
Provided short-term loans (for 3 months with condition to recover the loan atleast
in 4 months) to Rajasthan, Haryana, Punjab discoms on 4-5 conditionalities.
Current outstanding short-term loans stand at INR30bn. Exposure breakup:
Maharashtra INR156bn, Rajasthan INR118bn, Haryana INR96bn, UP INR86bn,
WB INR84bn, MP INR92bn, TN INR55bn.
It has provided INR175bn to project developers at 9.73% which is earning thin
spread; it is yet to disburse further INR73bn to these developers. However, reversal
in the interest rate cycle will provide some kicker to margins.
Absolute Rating
BUY
Outperformer

Equalweight
MARKET DATA (R : PWFC.BO, B: POWF IN)

CMP
: INR 190
Target Price
: INR 220
52-week range (INR)
: 281 / 130
Share in issue (mn)
: 1,319.9
: 250 / 4,980

Promoters*
: 53.1
MFs, FIs & Banks
FIIs
: 19.6
Others
: 20.9

PFC has underperformed the Bankex by 24% in the past one year due to structural
issues in the power sector. However, some positive developments have taken place
for SEBs recently (tariff hikes, government support etc). Building in a loan growth
of 18%, NIMs of 3.9% and credit cost of 20bps for FY12-14E, we expect it to generate
RoEs in excess of 17%.
Management has been confident of achieving disbursement target of INR450bn

and loan growth of 25%.
Key risks
Presence in the power sector exposes PFC to project-specific and general structural
risks in power sector. PFCs gross NPA is at low levels. Any major slippage or
ineffective recoveries can raise its NPAs significantly, adversely affecting its
profitability and future growth.
6.4
Nil
Stock
Nifty
EW BFSI
Index
1 month
23.2
9.6
15.8
3 months
13.9
0.3
3.9
12 months
(36.8)
(7.1)
(6.2)
Financials
Year to March
Revenues (INR mn)
Rev growth (%)
Net profit (INR mn)
EPS (INR)
EPS growth (%)
PE (x)
Price to book (x)
ROE (%)
FY10
FY11
FY12E
FY13E
30,229
27.2
21,320
1,148
18.6
32.7
115.5
10.2
1.6
17.2
35,797
18.4
25,275
1,148
22.0
18.6
134.3
8.6
1.4
17.6
45,188
26.2
31,449
1,320
23.8
8.2
152.5
7.9
1.2
17.7
55,433
22.7
38,255
1,320
29.0
21.6
174.1
6.5
1.1
17.8

Kunal Shah
+91-22- 4040 7579
Nilesh Parikh
+91-22- 4063 5470
Suruchi Chaudhary
+91-22-6623 3316
Balance sheet
Income statement
Year to March
(INR mn)
FY10
FY11
FY12E
FY13E
Interest income
78,954
Interest expended
49,876
Net interest income
29,079
Non interest income
521
29,600
Other income
629
Net revenues
30,229
Operating expenses
1,069
- Employee exp
985
- Depreciation /amortisation
44
- Other opex
40
Preprovision profit
29,160
Provisions
17
(0)
17
PBT
29,143
Taxes
7,823
PAT
21,320
Extraordinaries
2,238
Reported PAT
23,557
Basic EPS (INR)
18.6
1,148
Diluted EPS (INR)
18.6
DPS (INR)
4.5
28.3
98,845
63,776
35,069
467
35,536
261
35,797
1,614
1,121
48
445
34,183
64
59
5
34,119
8,843
25,275
910
26,185
1,148
22.0
1,148
22.0
5.0
26.5
125,448
82,128
43,320
1,677
44,998
190
45,188
1,213
1,120
48
45
43,975
1,187
1,182
5
42,788
11,339
31,449
(1,397)
30,053
1,320
23.8
1,320
23.8
6.0
29.4
150,081
96,650
53,431
1,802
55,233
201
55,433
1,314
1,221
49
45
54,119
2,071
2,066
5
52,048
13,793
38,255
(1,103)
37,153
1,320
29.0
1,320
29.0
6.8
27.2
FY10
FY11
FY12E
FY13E
29.1
27.2
(22.6)
30.3
32.7
20.6
18.4
51.0
17.2
18.6
23.5
26.2
(24.9)
28.6
24.4
23.3
22.7
8.4
23.1
21.6
Growth metrics (%)

Year to March
Net interest income
Net revenues growth
Opex growth
PPP growth
PAT growth

Year to March
FY10
FY11
FY12E
FY13E
Sanctions (INR mn)

654,660
258,080
Disburs. to sanction ratio (%) 39.4
22.6
14.8
818,325
322,550
39.4
25.0
25.0
613,744
367,791
59.9
14.0
(25.0)
705,805
427,779
60.6
16.3
15.0
(INR mn)
As on 31st March
FY10
Yield on assets
Cost of funds
Spread
Cost-income
Tax rate
FY10
FY11
FY12E
FY13E
10.8
8.3
2.6
4.0
3.5
26.8
10.8
8.3
2.5
3.8
4.5
25.9
11.1
8.6
2.5
3.8
2.7
26.5
11.0
8.4
2.5
3.9
2.4
26.5
77
FY12E
Liabilities
Equity capital
11,478
11,478
13,199
Reserves & surplus
112,694
132,982
182,831
Net worth
124,171
144,460
196,031
Reserve for doubtful debts
8,421
9,658
11,220
Unsecured loans
671,080
855,985 1,035,814
485
829
485
Int. subsidy fund from govern. 6,640
4,518
4,018
Total liabilities
810,798 1,015,450 1,247,567
Assets
Loans
798,560
995,707 1,225,050
Investments
310
538
566
Current assets
48,720
71,144
77,173
Current liabilities
37,536
52,706
61,969
Net current assets
11,184
18,438
15,204
743
767
747
For. currency transaltion diff.
0
0
6,000
Total assets
810,798 1,015,450 1,247,567
Loan growth
23.9
24.7
23.0
Borrowings growth
28.7
27.6
21.0
EA growth
25.5
25.3
22.9
Gross NPA ratio
0.0
0.1
0.7
Net NPA ratio
0.0
0.0
0.6
Provision coverage
50.0
50.0
10.0

Year to March
Net revenues/Assets
Provisions/Assets
Taxes/Assets
Total costs/Assets
ROA
Equity/Assets
ROAE
Year to March
Year to March
FY11
Diluted EPS (INR)

EPS growth (%)
Adj. BV per share (INR)*
Diluted P/E (x)
Price/ BV (x)
Price/ Adj. Earnings (x)
Price/ Adj. BV (x)
Dividend yield (%)
FY13E
13,477
207,726
221,202
13,089
1,249,433
485
3,018
1,487,227
1,469,072
605
88,534
76,232
12,302
749
4,500
1,487,227
19.9
20.6
19.2
0.9
0.7
17.5
FY10
FY11
FY12E
FY13E
4.0
0.2
4.2
0.1
0.0
1.1
1.2
2.9
17.0
17.2
3.8
0.1
3.9
0.2
0.0
1.0
1.2
2.8
15.7
17.6
3.8
0.2
4.0
0.1
0.1
1.0
1.2
2.8
15.7
17.7
3.9
0.1
4.1
0.1
0.2
1.0
1.3
2.8
15.8
17.8
FY10
FY11
FY12E
FY13E
18.6
32.7
115.5
115.5
10.2
1.6
1.6
1.6
2.4
22.0
18.6
134.3
134.1
8.6
1.4
1.4
1.4
2.6
23.8
8.2
152.5
148.4
7.9
1.2
1.3
1.3
3.2
29.0
21.6
174.1
168.3
6.5
1.1
1.1
1.1
3.6
Edelweiss
Securities Limited
Limited
Company Profile
PI INDUSTRIES
Growth, custom made
February 7, 2012
Agriculture
Key takeaways
EDELWEISS RATINGS
Strong visibility in custom synthesis with order book at USD325mn. Management

guided for 40-45% revenue growth in this segment over the next 2-3 years.
Absolute Rating
BUY
Growth
While the agri-input division had short-term headwinds due to adverse weather
conditions causing sub-optimal product mix during FY12, the long-term outlook is
strong. PI has a robust pipeline of 8-9 products in in-licensed space to be launched
over the next 3-4 years and also guided for 25-30% growth in this segment over
this period.
Contribution of in-licensed products in the agri-input business is currently about
45% (which was ~10% three years ago) and management guided for this to increase
to 70-80% over the next 3-4 years.
Capex plan of INR1.5bn-1.8bn during FY12 and FY13.
MARKET DATA (R : PIIL.BO, B: PI IN)

CMP
: INR 500
Target Price
: INR 670
52-week range (INR)
: 630 / 250
Share in issue (mn)
: 25.0
: 13 / 249
PI is expected to deliver strong profit CAGR of 47% and robust ROEs of more than
30% over FY11-13. It is a preferred partner for global MNCs for custom synthesis
on account of its competencies in process research and manufacturing, coupled
with its non-compete and IP driven business model. The company has built a
strong order book of ~USD300mn to be executed within the next 3-4 years and by
incurring capex of INR2bn over FY11-13. EBITDA margin likely to expand owing to
improving product mix, higher operating leverage and sale of the low-margin
polymer business.
Key risks
Execution delay in setting up new capacities to impact the custom synthesis
business. Poor monsoon could hit agro chemical demand. USD/INR volatility may
impact export revenues as well as margins.

Promoters*
: 63.7
MFs, FIs & Banks
1.6
FIIs
7.7
Others
: 27.1

Nil

BSE Midcap
Index
Stock
Stock over
Index
1 month
15.0
(6.0)
(21.0)
3 months
(4.0)
(20.0)
(16.0)
12 months
(10.2)
72.0
82.3
Financials
Year to March
FY10
FY11
FY12E
FY13E
Revenues (INR mn)

Rev. growth (%)
EBITDA (INR mn)
Net profit (INR mn)
EPS (INR)
EPS growth (%)
Diluted P/E (x)
EV/EBITDA (x)
ROE (%)
5,425
17.2
871
419
25
16.6
45.6
30.2
13.7
33.8
7,202
32.8
1,241
651
25
25.8
55.4
19.4
10.6
35.3
9,389
30.4
1,787
982
25
38.9
50.9
12.9
8.0
34.4
12,157
29.5
2,394
1,411
25
55.9
43.7
9.0
5.8
33.2

Manoj Bahety, CFA

+91-22-6623 3362
Varun Guntupalli
+91-22-6623 3481
Balance sheet
Income statement
Year to March
(INR mn)
FY10
FY11
FY12E
FY13E

5,425
Direct costs
3,183
Employee costs
445
Other expenses
926
4,554
EBITDA
871
EBIT
743
Interest expenses
183
Other income
11
Profit before tax
572
Provision for tax
153
Core profit
419
Extraordinary items
0
Profit after tax
419
Adjusted net profit
419
EPS (INR) basic
19.7
25
Dividend payout (%)
3.6
Tax rate (%)
26.7
7,202
4,204
566
1,191
5,961
1,241
153
1,088
181
7
914
263
651
0
651
651
29.1
25
7.7
28.8
9,389
5,446
765
1,391
7,602
1,787
186
1,601
216
0
1,385
403
982
237
1,219
982
38.9
25
6.4
29.1
12,157
6,970
986
1,807
9,762
2,394
244
2,151
162
0
1,989
578
1,411
0
1,411
1,411
55.9
25
4.5
29.1

Year to March
FY10
Operating expenses
EBITDA margins
Net profit margins
Growth metrics (%)

Year to March
Revenues
EBITDA
PBT
Net profit
EPS
Cash flow statement

Year to March
Net profit
Depreciation
Others
Gross cash flow
Less:Changes in WC
Operating cash flow
Less: Capex
Free cash flow
FY11
FY12E
FY13E
25.3
2.4
3.4
16.1
7.7
24.4
2.1
2.5
17.2
9.0
23.0
2.0
2.3
19.0
10.5
23.0
2.0
1.3
19.7
11.6
FY10
FY11
FY12E
FY13E
17.2
35.1
79.5
72.9
45.6
32.8
42.4
59.8
55.4
55.4
30.4
44.0
51.6
50.9
50.9
29.5
34.0
43.6
43.7
43.7
FY10
FY11
FY12E
(INR mn)
FY13E
419
129
199
747
(131)
877
363
514
651
153
262
1,067
843
224
947
(723)
1,219
186
(21)
1,384
435
949
845
104
1,411
244
162
1,816
349
1,468
750
718
79
(INR mn)
As on 31st March
Equity capital
Preference capital
Reserves & surplus
Shareholders funds
Secured loans
Unsecured loans
Borrowings
Sources of funds
Gross block
Depreciation
Net block
Total fixed assets
Investments
Inventories
Sundry debtors
Provisions
Net current assets
Uses of funds
Ratios
Year to March
ROACE (%)
Inventory days
Debtors days
Payable days
Current ratio
Debt/EBITDA
Interest coverage
Debt/equity
Year to March
Diluted EPS (INR)
Y-o-Y growth (%)
CEPS
Diluted P/E (x)
Price/BV (x)
EV/Sales (x)
EV/EBITDA (X)
FY10
FY11
FY12E
FY13E
71
206
1,269
1,546
1,053
444
1,498
270
3,313
2,924
923
2,001
86
2,087
5
1,028
1,034
54
347
2,463
1,189
53
1,243
1,221
3,313
73
112
81
1,944
2,137
1,560
918
2,478
326
4,941
3,617
1,076
2,540
335
2,875
5
1,410
1,766
84
503
3,763
1,568
134
1,702
2,061
4,941
96
126
0
3,450
3,576
1,700
144
1,844
326
5,746
4,317
1,263
3,054
80
3,134
5
1,641
2,057
195
503
4,396
1,716
74
1,790
2,607
5,746
142
126
0
4,787
4,913
1,250
144
1,394
326
6,633
5,067
1,506
3,560
80
3,640
5
2,100
2,331
227
503
5,162
2,100
74
2,174
2,987
6,633
195
FY10
FY11
FY12E
FY13E
33.8
22.8
119
66
123
62
2.0
1.7
4.1
2.9
1.0
35.3
26.4
106
71
120
57
2.2
2.0
6.0
3.2
1.2
34.4
30.0
102
74
110
67
2.5
1.0
7.4
3.4
0.5
33.2
34.8
98
66
100
64
2.4
0.6
13.3
3.7
0.3
FY10
FY11
FY12E
FY13E
16.6
45.6
26.7
30.2
6.9
2.2
13.7
25.8
55.4
38.4
19.4
5.2
1.8
10.6
38.9
50.9
46.2
12.9
3.5
1.5
8.0
55.9
43.7
65.5
9.0
2.6
1.1
5.8
Edelweiss
Securities Limited
Limited
Company Profile
RELIANCE INFRASTRUCTURE
Power packed
February 7, 2012
Power
Key takeaways
The regulatory overhang in Delhi has been cleared with IDBI approving INR50bn
financial package (80:20 debt:equity) funded. The company has contributed its share
of the INR5.2bn equity infusion into discoms. This has been post Delhi governments
commitment of routine tariff increases and regulatory asset creation. With this, the
regulatory overhang on power businesses (including Mumbai) is eliminated.
Management indicated that over the next 12 months 10 out of 11 road projects
and the Mumbai Metro I will be operational.
The tariff gap in Mumbai has reduced post customer migration to Tata Power as
power purchases have reduced to ~950 MW from 1.3 GW.
In Delhi Metro management is targeting daily pax to increase from 18,000 currently
to 30,000 in FY13. The average fare collected is INR75/pax. Within the two metro
stations (New Delhi railway station and Shivaji Stadium) out of 130,000 sf of
retail space management has leased out 30% area @ INR525-550/sf /month.
Management indicated that the price is justified if the same is adjusted for builtup area (as their rates are on carpet), 24 hours operational and security
arrangement provided by the company.
EPC order book is at INR243bn and the execution has picked up starting FY12 and
expected to sustain due to the large execution pipeline from captive road and
Reliance Power projects. EBIT margin guidance of 8-10%.
Absolute Rating
BUY
Outperformer

Underweight
MARKET DATA (R : RLIN.BO, B: RELI IN)

CMP
: INR 552
Target Price
: INR 1,252
52-week range (INR)
: 710 / 328
Share in issue (mn)
: 263.1
: 145 / 2,889

Promoters*
: 48.5
MFs, FIs & Banks
: 21.0
FIIs
: 14.5
Others
: 16.0

Nil
We expect the execution pick up to regain investor confidence which accompanied
by resolution to some of the group related issues should augur well for the stock.

Stock
Nifty
EW Power
Index
1 month
43.4
9.6
14.2
3 months
25.0
0.3
(3.1)
12 months
(25.2)
(7.1)
(14.5)
Key risks
The scale and timing of projects could expose the company to execution risks. The
road traffic growth has been dented due to the depressed industrial growth and
weak macro environment. This, in addition to any delay in execution of
infrastructure projects, could impact valuations. The company has parked a
sizeable part of its investments in group entities and yield bearing instruments.
Since other income contributes significantly to the total earnings of the company,
any diminution in the value of the same could impact valuations.
Financials
Year to March
Revenue (INR mn)
Rev. growth (%)
EBITDA (INR mn)
Net profit (INR mn)
EPS (INR)
EPS growth (%)
P/E (x)
P/B(x)
ROAE (%)
FY10
FY11
FY12E
FY13E
98,897
2.0
8,906
11,517
245
47.0
(14.3)
11.7
0.9
8.5
94,148
-4.8
8,393
10,809
267
40.4
(14.1)
13.7
0.8
6.6
126,888
34.8
16,403
12,369
248
49.9
23.5
11.1
0.8
7.0
134,126
5.7
18,040
12,910
248
52.1
4.4
10.6
0.7
7.1

Shankar K
+91-22-4040 7412
Parvez Akhtar Qazi

+91-22-4063 5405
parvez.qazi@edelcap.com
Balance sheet
Income statement
Year to March
(INR mn)
FY10
FY11
FY12E
FY13E
94,148
73,655
5,808
6,293
85,755
8,393
3,134
5,258
2,425
8,517
11,351
541
10,809
445
11,254
11,254
267
40.4
267
40.4
7.2
17.7
126,888
99,265
6,979
4,240
110,485
16,403
3,225
13,179
2,760
3,934
14,353
1,984
12,369
0
12,369
12,369
248
49.9
248
49.9
8.0
16.0
134,126
104,109
7,377
4,599
116,086
18,040
4,011
14,030
2,753
4,277
15,554
2,644
12,910
0
12,910
12,910
248
52.1
248
52.1
8.3
16.0
FY11
FY12E
FY13E
91.1
3.3
2.6
8.9
11.5
87.1
2.5
2.2
12.9
9.7
86.5
3.0
2.1
13.5
9.6
FY10
FY11
FY12E
FY13E
2.0
75.8
(7.2)
(14.3)
(14.3)
(4.8)
(5.8)
(12.5)
(6.1)
(14.1)
34.8
95.4
26.5
14.4
23.5
5.7
10.0
8.4
4.4
4.4
FY10
FY11
FY12E
(INR mn)
FY13E
13,455
3,198
(362)
8,926
25,217
15,313
9,904
4,960
4,943
11,254
3,134
(587)
(732)
13,069
(34,928)
47,996
31,798
16,198
12,369
3,225
0
0
15,593
22,305
(6,712)
10,000
(16,712)
12,910
4,011
0
0
16,920
342
16,578
0
16,578

98,897
Direct costs
79,584
Employee costs
4,649
Other expenses
5,758
89,991
EBITDA
8,906
Depreciation and amortisation 3,198
EBIT
5,708
Interest expenses
2,922
Other income
10,184
Profit before tax
12,969
Provision for tax
1,453
Core Profit
11,517
Extraordinary items
1,938
Profit before min. interest
13,455
Profit after min. interest
13,455
Shares outstanding
245
EPS (INR) basic
47.0
Diluted shares (mn)
245
47.0
Dividend per share
7.1
Dividend payout (%)
15.1

Year to March
FY10
Operating expenses
91.0
Depreciation and amortization 3.2
3.0
EBITDA margins
9.0
Net profit margins
11.6
Growth metrics (%)

Year to March
Revenues
EBITDA
PBT
Net profit
EPS
Cash flow statement

Year to March
Net profit
Depreciation
Deferred tax
Others
Gross cash flow
Operating cash flow
Less: Capex
Free cash flow
81
(INR mn)
As on 31st March
FY10
FY11
FY12E
FY13E
Equity capital
2,449
Reserves & surplus
149,073
Shareholders funds
151,522
Secured loans
14,750
Unsecured loans
26,399
Borrowings
41,149
Others
1,577
Sources of funds
194,248
Gross block
74,283
Depreciation
39,511
Net block
34,771
5,549
Total fixed assets
40,320
Investments
100,196
Inventories
2,692
Sundry debtors
33,457
3,018
Loans and advances
80,853
120,019
Provisions
9,820
66,287
Net current assets
53,732
Uses of funds
194,248
619
2,675
174,001
176,675
15,839
23,854
39,693
990
217,358
105,137
43,078
62,060
6,493
68,552
125,841
2,903
48,579
3,711
105,748
160,940
125,114
12,861
137,975
22,965
217,358
661
2,479
174,586
177,065
17,850
21,399
39,249
990
217,304
105,137
46,302
58,835
16,493
75,328
98,232
2,101
65,472
2,185
105,748
175,505
118,900
12,861
131,761
43,744
217,304
714
2,479
185,431
187,909
17,850
21,399
39,249
990
228,148
105,137
50,313
54,825
16,493
71,317
98,232
2,295
69,207
16,698
105,748
193,947
122,487
12,861
135,348
58,599
228,148
758
FY10
FY11
FY12E
FY13E
8.5
6.8
1.8
90
2.9
2.3
0.5
0.3
4.6
0.3
6.6
5.7
1.2
159
1.9
2.5
0.5
0.2
4.7
0.2
7.0
12.5
1.3
164
2.1
3.8
0.6
0.2
2.4
0.2
7.1
11.3
1.4
183
2.4
2.6
0.6
0.2
2.2
0.2
FY10
FY11
FY12E
FY13E
47.0
(14.3)
58.6
11.7
0.9
0.7
8.2
40.4
(14.1)
49.9
13.7
0.8
0.6
6.9
49.9
23.5
62.9
11.1
0.8
0.6
4.6
52.1
4.4
68.3
10.6
0.7
0.5
3.4
Ratios
Year to March
ROAE (%)
ROACE (%)
Current ratio
Debtors (days)
Av. working capital t/o (x)
Av. capital employed t/o (x)
Debt / Equity
Debt/EBITDA
Year to March
Diluted EPS (INR)
Y-o-Y growth (%)
CEPS (INR)
Diluted P/E (x)
Price/BV(x)
EV/Sales (x)
EV/EBITDA (x)
Edelweiss
Securities Limited
Limited
Company Profile
RELIANCE POWER
Powering ahead
February 7, 2012
Power
Key takeaways
EDELWEISS RATINGS
In the operational Rosa project (3x300 MW) the company is earning 25-30% RoEs
including efficiency gains from O&M, station heat rate and working capital
savings. Management expects the same to be in the 20-25% range going forward
with increase in domestic coal supplies.
Absolute Rating
NOT RATED
The company expects power generation capacity to be ~5 GW by FY13 end from the
existing ~1 GW comprising:
MARKET DATA (R : RPOL.BO, B: RPWR IN)
Sasan UMPP first unit of 660 MW to be commissioned by December 2012.

The combined cycle 2250 MW at Samalkot by FY13 end as all the 6 gas turbines
would be operationalised in the short term. The company expects some gas
allocation to be approved when EGoM meets to decide on diverting gas from
non-core to power sector (to release 18 mmscmd).
CMP
: INR 99
Target Price
: NA
52-week range (INR)
: 137 / 68
Share in issue (mn)
: 2,805.1
: 277 / 5,505
Rosa phase II unit II of 300 MW would be commissioned by April 2012.

Butibori 1x 300 MW to be operationalised in March 2012 and the second unit
by Q2FY13.
Out of the INR230bn of capex done so far, ~INR110-120bn has been equity and the
balance is debt. Hence, all the incremental capex requirement will be debt funded
due to low draw down so far.
MFs, FIs & Banks
1.7
FIIs
4.6
Others
: 13.2

Coal production from the Sasan coal mines is expected to commence from Q2FY13
leading to ~ 5 mt of output in the first year. Management expects the government to
approve sale of coal to power plants at CIL equivalent prices atleast in the interim
which will also help addressing Indias coal problem partially.
Promoters*
: 80.4

Sensex
Key risks
Key approvals / policies in the form of utilization of surplus coal (from Sasans
mines as well as setting up Chitrangi) and the imported coal based projects are
critical, failing which not only earnings are at risk but even capacity addition
would be impacted.
Nil
Stock
Stock over
Sensex
1 month
11.7
36.2
24.5
3 months
0.8
(2.4)
(3.2)
12 months
(1.8)
(19.3)
(17.5)
Financials
Year to March
Revenue (INR mn)
Rev. growth (%)
EBITDA (INR mn)
Net profit (INR mn)
EPS (INR)
EPS growth (%)
P/E (x)
EV/EBITDA (x)
ROAE (%)
FY08
FY09
FY10
FY11
NA
(350)
854
2,260
0.4
NA
261.1
(262.8)
1.2
NA
(1,014)
2,445
2,397
1.0
170.0
96.7
(144.4)
1.8
207
NA
(1,057)
6,839
2,397
2.9
179.7
34.6
(168.8)
4.8
10,548
4,990.5
2,290
7,604
2,805
2.7
(5.0)
36.4
119.7
4.9

Shankar K
+91-22-4040 7412
Parvez Akhtar Qazi

+91-22-4063 5405
parvez.qazi@edelcap.com
Balance sheet
Income statement
(INR mn)
Year to March
FY08
FY09
FY10
FY11
Total revenues
Cost of Operations
0
Staff cost
30
Other operating expenses
320
Total expenditure
350
EBITDA
(350)
Depreciation & Amortisation
EBIT
(350)
Interest
58
Other income
1,329
PBT
922
Provision for tax
68
Core profit
854
Profit before minority interest 854
Profit after minority interest
854
Shares outstanding ( mn )
2,260
EPS (INR) basic
0.4
Diluted shares (mn)
2,260.0
0.4
4
239
772
1,014
(1,014)
2
(1,016)
18
3,604
2,570
125
2,445
2,445
2,445
2,397
1.0
2,396.8
1.0
207
244
433
587
1,264
(1,057)
57
(1,114)
87
8,227
7,026
187
6,839
6,839
6,839
2,397
2.9
2,396.8
2.9
10,548
6,090
769
1,398
8,257
2,290
1,009
1,282
2,195
8,633
7,719
115
7,604
7,604
7,604
2,805
2.7
2,805.1
2.7
FY09
FY10
FY11
609.9
27.6
42.0
(509.9)
3,300.7
78.3
9.6
20.8
21.7
72.1

Year to March
FY08
Operating expenses
EBITDA margins
Net profit margins
Growth metrics (%)

Year to March
Revenues
EBITDA
PBT
Net profit
EPS
Cash flow statement

Year to March
Net profit
Depreciation
Deferred tax
Others
Gross cash flow
Operating cash flow
Less: Capex
Free cash flow
FY08
FY09
FY10
FY11
(100.0)
(2,672.1)
16,964.8
53,262.5
4,623.4
#DIV/0!
189.8
178.9
186.4
170.0
#DIV/0!
4.2
173.4
179.7
179.7
4,990.5
(316.8)
9.9
11.2
(5.0)
FY08
FY09
FY10
(INR mn)
FY11
854
6
(8,085)
(7,225)
(6,654)
(572)
8,726
(9,298)
2,445
2
0
(1,522)
925
2,750
(1,825)
39,405
(41,231)
6,839
57
0
(11,234)
(4,338)
(2,228)
(2,111)
41,869
(43,979)
7,604
1,009
0
(16,013)
(7,400)
(7,068)
(332)
73,281
(73,612)
83
As on 31st March
(INR mn)
FY08
FY09
FY10
FY11
Share capital
22,600
Reserves & surplus
112,735
Shareholders funds
135,334
Secured loans
4,483
Unsecured loans
0
Borrowings
4,483
Sources of funds
139,817
Gross block
2,148
Less : Depreciation
17
Net block
2,131
8,178
Total fixed assets
10,310
Investments
131,234
Inventories
Sundry debtors
4,270
Loans and advances
681
4,951
Provisions
79
6,677
Net current assets
(1,727)
Uses of funds
139,817
Adj. BV per share (BV)(INR)
60
23,968
113,824
137,792
13,325
0
13,325
151,116
2,952
73
2,879
46,780
49,659
103,172
216
1,996
2,212
3,672
255
3,927
(1,715)
151,116
57
23,968
120,663
144,631
22,156
250
22,406
167,037
23,572
164
23,408
68,029
91,436
79,152
487
288
1,338
1,264
3,377
6,501
428
6,929
(3,552)
167,037
60
28,051
140,283
168,334
56,564
16,785
73,348
241,683
38,654
2,286
36,369
126,227
162,595
56,790
537
3,471
19,161
16,359
39,528
16,418
813
17,231
22,298
241,683
60
FY08
FY09
FY10
FY11
ROAE (%)
1.2
ROACE (%)
(6.9)
Current ratio
0.7
Debtors (days)
Average working capital t/o (x)
Average capital employed t/o (x)
Debt / Equity
0.0
Debt/EBITDA
(12.8)
Adjusted Debt/Equity
0.1
1.8
(3.6)
0.6
0.1
(13.1)
0.1
4.8
(1.6)
0.5
254
0.0
(0.1)
0.0
0.2
(21.2)
0.2
4.9
0.9
2.3
65
0.4
(12.0)
0.1
0.4
32.0
0.6
FY08
FY09
FY10
FY11
0.4
4,623.4
0.4
261
1.65
1.0
170.0
1.0
96.7
1.72
(262.8)
(144.4)
2.9
179.7
2.9
34.6
1.63
860.8
(168.8)
2.7
(5.0)
3.1
36.4
1.64
26.0
119.7
Ratios
Year to March
Year to March
Diluted EPS (INR)
Y-o-Y growth (%)
CEPS (INR)
Diluted P/E (x)
Price/BV(x)
EV/Sales (x)
EV/EBITDA (x)
Edelweiss
Securities Limited
Limited
Company Profile
SHOPPERS STOP
Luxe growth
February 7, 2012
Retail
Key takeaways
Shoppers Stop (SSL) witnessed a slowdown in the departmental format as LTL

volumes were down led by slowdown in apparels. The company indicated that
Q1FY13 is likely to see price cuts in apparel (5-10%) across brands. Pick up in
apparel volumes is likely to commence from H2FY13.
Sales growth revived in January due to end of season sales (10 days of extra sales
to counter slowndown: 18-20% discount). Also, SSL is planning price cuts as COGS
pressure has eased significantly which can further boost demand.
Margin pressure primarily on back of aggressive roll out of new stores which
experienced delayed cash generation owing to slowdown in consumer offtake.
The HyperCity business is expected to turn around at the PAT level in FY14 and at
EBITDA level in FY13. This format posted a strong Diwali season, soft month of
November followed by pick up in December and January.
Absolute Rating
BUY
Performer

Overweight
MARKET DATA (R : SHOP.BO, B: SHOP IN)

CMP
: INR 347
Target Price
: INR 425
52-week range (INR)
: 504 / 251
Share in issue (mn)
: 82.5
: 29 / 570
The Indian retail landscape is evolving with interplay of several demographic and
economic factors. The big opportunity lies in the growing share of organised retail
with the growing trend among consumers to allocate a larger share of income to
consumption and gradual improvement in lifestyle. The improving liquidity is
also positive as it means better delivery of retail space for expansion. SSL is a
niche play with strong brand position in the lifestyle space. It has assiduously
positioned itself as a retailer since 1991 of superior quality products and services,
offering an international shopping experience. This strong positioning and brand
recall gives the company a strategic advantage in the light of increasing
competition. With its steadfast focus on systems and processes and its ability to
attract global brands as venture partners, it is well placed to emerge as a leading
departmental store player in the long run.
Key risks
Pressure on margins due to cost escalation and competition.
Promoters*
: 67.9
MFs, FIs & Banks
FIIs
: 11.7
Others
: 13.0

7.4
Nil

Stock
Nifty
EW Retail
Index
1 month
(13.0)
9.6
10.6
3 months
(40.7)
0.3
(4.2)
12 months
(68.0)
(7.1)
(11.1)
Escalation in lease rentals and administration expenses can impact margins.

Macro concerns could hamper domestic consumption trends and result in lower
footfalls.
Financials
Year to March
Revenues (INR mn)
Rev. growth (%)
EBITDA (INR mn)
Net profit (INR mn)
Diluted EPS (INR)
EPS growth (%)
Diluted P/E (x)
EV/EBITDA (x)
ROAE (%)
FY10
FY11
FY12E
FY13E
23,619
53.0
1,284
432
79
5.4
(17.0)
64.0
23.2
11.0
28,809
22.0
1,061
323
79
4.0
(25.2)
85.6
28.5
6.3
34,440
19.5
1,784
650
79
8.1
101.4
42.5
17.0
11.6
41,092
19.3
2,496
1,079
79
13.5
66.1
25.6
12.0
16.7

Abneesh Roy
+91 22 6620 3141
Harsh Mehta
+91 22 4063 5543
Balance sheet
Income statement
Year to March
(INR mn)
FY10
FY11
FY12E
FY13E
Net revenues
15,433
Cost of materials
9,965
Gross profit
5,468
Employee costs
920
Advertisement & sales costs
347
349
1,377
Others
1,412
EBITDA
1,062
Depreciation
381
EBIT
681
Other income
95
776
Net interest & Finance charges 254
PBT
522
164
Core PAT
358
Minority interest
1
Pr. af. tax af. Min. Int. & Asso.
359
Equity shares outstanding (mn) 7 6
EPS (INR) basic
4.7
Diluted shares (mn)
77.6
4.6
CEPS (INR)
9.8
DPS
0.7
14.6
23,619
16,064
7,555
1,399
504
477
1,856
2,034
1,284
469
815
51
866
295
571
389
182
250
432
79
5.5
79.8
5.4
8.2
0.8
14.3
28,589
19,547
9,042
1,687
572
543
2,144
2,573
1,523
547
976
24
1,000
395
605
121
484
245
729
79
9.2
79.8
9.1
13.1
-
33,469
22,598
10,871
1,975
669
636
2,510
3,012
2,069
587
1,482
51
1,533
440
1,093
219
875
196
1,071
79
13.6
79.8
13.4
18.5
-
FY11
FY12E
FY13E
64.6
6.0
2.3
2.3
8.9
9.1
2.5
1.6
6.9
4.4
2.3
68.0
5.9
2.1
2.0
7.9
8.6
2.0
1.3
5.4
3.5
1.8
68.4
5.9
2.0
1.9
7.5
9.0
1.9
1.4
5.3
3.4
2.6
67.5
5.9
2.0
1.9
7.5
9.0
1.8
1.3
6.2
4.4
3.2
FY10
FY11
FY12E
FY13E
12.3
513.5
(163.5)
(126.0)
(123.4)
53.0
20.9
(9.5)
(20.4)
(17.1)
21.0
18.6
6.0
68.8
68.8
17.1
35.9
80.7
46.9
46.9
FY10
FY11
FY12E
(INR mn)
FY13E
359
634
381
254
993
(277)
1,270
428
842
432
514
469
45
946
(20)
966
2,456
(1,490)
729
696
547
150
1,425
(245)
1,671
1,377
293
1,071
831
587
244
1,901
(213)
2,114
1,553
561

Year to March
FY10
Cost of materials
Employee costs
Electricity
Rent and lease
Depreciation
EBITDA margin
EBIT margin
Net profit margin
Growth metrics (%)
Year to March
Revenues
EBITDA
PBT
Net profit
EPS
Cash flow statement
Year to March
Net profit
Depreciation
Others
Gross cash flow
Less:Changes in WC
Less: Capex
Free cash flow
85
(INR mn)
As on 31st March
Share capital
Reserves
Shareholders' funds
Minority
Secured loans
Unsecured loans
Borrowings
Sources of funds
Gross block
Less depreciation
Net fixed assets
Goodwill
Investments
Current assets
Inventories
Sundry debtors
Loans and advances
Current liabilities
Liabilities
Provisions
Working capital
Uses of funds
BV (INR)
Ratios
Year to March
ROAE (%)
ROACE (%)
Debtor days
Inventory days
Payable days
Current ratio
Debt/EBITDA
Debt/Equity
Year to March
Diluted EPS (INR)
Y-o-Y growth (%)
CEPS (INR)
Diluted P/E (x)
Price/BV (x)
EV/Sales (x)
EV/EBITDA (x)
Dividend yield (%)
FY10
FY11
FY12E
FY13E
349
2,463
2,812
(217)
2,071
221
2,292
(46)
4,841
5,018
2,115
2,903
278
109
399
4,017
1,591
122
92
2,212
2,865
2,784
80
1,152
4,841
37
411
4,598
5,009
22
2,168
462
2,630
(19)
7,642
7,474
2,600
4,874
570
991
0
5,126
2,505
214
182
2,224
3,920
3,811
108
1,206
7,642
63
369
5,327
5,696
(223)
1,319
1,612
2,930
(19)
8,384
8,971
3,146
5,825
450
991
0
5,230
2,471
196
339
2,224
4,112
4,004
108
1,117
8,384
72
369
6,398
6,766
(419)
1,454
1,777
3,230
(19)
9,559
10,599
3,734
6,866
375
991
0
6,088
2,884
220
761
2,224
4,762
4,653
108
1,326
9,559
86
FY10
FY11
FY12E
FY13E
13.6
15.1
3
38
68
(27)
1.4
2.2
0.8
0.8
2.7
11.0
13.5
3
32
54
(20)
1.3
2.0
0.5
0.5
2.8
13.6
12.2
2
32
54
(20)
1.3
2.0
0.5
0.5
2.5
17.2
16.5
2
31
54
(20)
1.3
2.0
0.5
0.5
3.4
FY10
FY11
FY12E
FY13E
5.4
17.0
8.2
64.0
5.5
1.3
23.2
0.2
4.0
(25.2)
8.2
85.6
5.2
1.0
28.5
-
8.1
101.4
15.1
42.5
4.6
0.9
17.0
-
13.5
66.1
23.4
25.6
3.9
0.7
12.0
-
Edelweiss
Securities Limited
Limited
Company Profile
SUN PHARMACEUTICALS
In fine fettle
February 7, 2012
Pharmaceuticals
Key takeaways
Emerging markets focus to drive growth beyond FY13: Sun Pharma (SUNP) has
cited a three pronged plan to address growth post patent cliff opportunities in
2012-13. Overall, management expects global generics market to grow robustly;
however, growth within each market could be different. The first priority is to
penetrate higher into emerging markets either organically or through acquisitions.
Second, will be to expand into European markets where markets have evolved in
terms of pricing cycles and lastly to target higher growth markets such as Japan.
Focus on complex products in US: US is likely to remain a key growth driver. However,
incrementally management focus will be to develop pipeline of more complex
molecules or where company would have advantage in terms of pricing (back
ended API). Some of these molecules include Stalevo, Comptan, among others.
Management also highlighted that it expects to launch generic Clopidagril post
Teva exclusivity (May-Oct 2012).
Domestic growth to sustain over next two to three years: Domestic (40% of total
business) will sustain higher growth. Management expects to maintain market
share in key chronic segments and improve market share in underpenetrated
segments by addressing product and field force gap. Incrementally, management
focus will be to target niche products with in the acute segment.
Higher competitive intensity may impact realizations: Management has highlighted
that higher competitive intensity in the domestic market as well as limited growth
opportunities in the US can impact realization going forward.
Absolute Rating
BUY
Outperformer

Equalweight
MARKET DATA (R : SUN.BO, B: SUNP IN)

CMP
: INR 544
Target Price
: INR 570
52-week range (INR)
: 565 / 392
Share in issue (mn)
: 1,035.6
: 564 / 11,223

Promoters*
: 63.7
MFs, FIs & Banks
FIIs
: 19.3
Others
: 10.7

6.3
Nil
SUNPs core earnings from base business are expected to post CAGR of 27% over
FY11-13E led by strength in domestic business, export formulations, new products
in US generics space and full year impact of Taro acquisition. While we do not
build in early resumption in Caraco manufacturing sites, a favorable outcome
will be potentially accretive by ~USD50-60 to sales for FY12-13E.
Key risks

Stock
Nifty
EW Pharma
Index
1 month
5.9
9.6
20.3
3 months
5.0
0.3
14.8
12 months
14.8
(7.1)
15.1
Reducing patent cliff opportunities beyond FY13 could slowdown growth

momentum. Pricing increases and supply issues in US had disproportionate impact
on FY12 profits which is unsustainable.
Financials
Year to March
Revenues (INR mn)
Rev. growth (%)
EBITDA (INR mn)
Net profit (INR mn)
EPS (INR)
EPS growth (%)
Diluted P/E (x)
EV/EBITDA (x)
ROE (%)
FY10
FY11
FY12E
FY13E
40,075
(4.2)
13,633
13,194
1,036
12.7
(27.4)
42.7
38.9
17.7
57,215
42.8
19,700
17,800
1,036
17.2
34.9
31.7
27.0
20.5
75,584
32.1
26,786
23,188
1,036
22.4
30.3
24.3
19.7
22.5
90,923
20.3
33,011
28,572
1,036
27.6
23.2
19.7
15.5
23.4

Manoj Garg
+91-22-6623 3302
Perin Ail
+91-22-6620 3032
Balance sheet
Income statement
(INR mn)
Year to March
FY10
FY11
FY12E
FY13E

40,075
Net revenues
38,086
Other operating income
1,988
26,441
Materials cost
10,977
Employee cost
4,008
R&D cost
2,083
Selling, admin & general exp. 6,143
Other expenses
3,230
EBITDA
13,633
EBIT
12,100
Interest expense/(income) (1,138)
Other income
576
Profit before tax
13,815
Provision for tax
679
Core profit
13,136
Extraordinary items
334
Profit after tax
13,470
Minority interest & others
(41)
Profit after minority interest 13,511
Adj. PAT after min. int.
13,194
EPS (INR) adjusted
12.7
Diluted shares (mn)
1,036
Recurring EPS (INR) fully dil.
8.8
CEPS (INR)
14.2
3.2
Dividend payout (%)
25.2
57,215
57,215
0
37,515
14,607
6,729
2,860
9,698
3,621
19,700
2,041
17,660
(1,341)
982
19,982
1,284
18,698
376
19,074
913
18,161
17,800
1,036
17.2
1,036
13.7
19.1
4.1
23.7
75,584
75,584
0
48,798
21,761
8,075
4,157
8,924
5,881
26,786
2,693
24,093
(2,841)
552
27,486
2,281
25,205
0
25,205
2,016
23,188
23,188
1,036
22.4
1,036
20.4
25.0
4.3
19.1
90,923
90,923
0
57,912
26,095
9,286
5,455
10,374
6,702
33,011
2,939
30,072
(3,110)
576
33,758
2,701
31,057
0
31,057
2,485
28,572
28,572
1,036
27.6
1,036
25.3
30.4
5.3
19.1

Year to March
FY10
FY11
FY12E
FY13E
27.4
15.3
5.2
8.1
66.0
3.8
(2.8)
34.0
34.5
25.5
17.0
5.0
6.3
65.6
3.6
(2.3)
34.4
32.7
28.8
11.8
5.5
7.8
64.6
3.6
(3.8)
35.4
33.3
28.7
11.4
6.0
7.4
63.7
3.2
(3.4)
36.3
34.2
FY10
FY11
FY12E
FY13E
(4.2)
(26.9)
(30.1)
(29.1)
(31.9)
42.8
44.5
42.3
44.6
55.8
32.1
36.0
34.8
37.6
49.5
20.3
23.2
23.2
22.8
23.8
FY10
FY11
FY12E
(INR mn)
FY13E
13,511
1,533
(469)
14,575
4,675
9,901
2,920
6,981
18,161
2,041
1,346
21,548
533
21,015
16,864
4,151
23,188
2,693
2,016
27,898
9,911
17,987
3,850
14,137
28,572
2,939
2,485
33,996
5,994
28,003
4,080
23,923
Cost of revenues
Selling, admin & general exp.
R & D cost
Other expenses
EBITDA margins
Net profit margins
Growth metrics (%)
Year to March
Revenues
EBITDA
Net profit
PBT
EPS
Cash flow statement
Year to March
Net profit
Depreciation
Others
Gross cash flow
Less:Changes in WC
Operating cash flow
Less: Capex
Free cash flow
87
(INR mn)
As on 31st March
Equity capital
Reserves & surplus
Common shareholders eq.
Secured loans
Unsecured loans
Borrowings
Minority interest
Sources of funds
Gross block
Depreciation
Net block
Intangible assets & goodwill
Investments
Inventories
Sundry debtors
Loans and advances
Current liabilities
Provisions
Net current assets
Uses of funds
Ratios
Year to March
ROAE (%)
ROACE (%)
Inventory days
Debtors days
Payable days
Current ratio
Debt/ EBITDA
Net Debt/equity
Year to March
Diluted EPS (INR)
Y-o-Y growth (%)
CEPS
Diluted P/E (x)
Price/BV (x)
EV/Sales (x)
EV/EBITDA (X)
FY10
FY11
FY12E
FY13E
1,036
77,254
78,289
78,289
479
1,233
1,712
(890)
1,932
81,042
23,340
8,013
15,328
1,448
4,060
30,664
10,739
11,748
6,073
8,562
37,121
2,693
4,886
7,579
29,542
81,042
76
1,036
93,798
94,833
94,833
3,523
733
4,256
(3,652)
8,472
103,908
45,520
20,286
25,234
2,706
7,720
22,310
14,794
11,716
21,937
11,726
60,172
4,090
10,144
14,234
45,939
103,908
92
1,036
110,029
111,064
111,064
3,523
733
4,256
(3,652)
10,488
122,155
41,543
12,946
28,597
500
7,720
22,310
18,140
15,873
29,116
13,643
76,772
5,875
7,867
13,743
63,029
122,155
107
1,036
132,110
133,146
133,146
3,523
733
4,256
(3,652)
12,972
146,721
45,543
15,806
29,738
500
7,720
22,310
21,003
19,094
46,547
16,412
103,056
7,046
9,556
16,602
86,454
146,721
129
FY10
FY11
FY12E
FY13E
17.7
29.3
341
94
89
346
4.9
0.1
(0.1)
20.5
34.0
319
75
85
309
4.2
0.2
(0.2)
22.5
37.0
276
67
84
259
5.6
0.2
(0.2)
23.4
40.5
274
70
90
254
6.2
0.1
(0.3)
FY10
FY11
FY12E
FY13E
12.7
(27.4)
14.2
42.7
7.2
13.2
38.9
17.2
34.9
19.1
31.7
5.9
9.3
27.0
22.4
30.3
25.0
24.3
5.1
7.0
19.7
27.6
23.2
30.4
19.7
4.2
5.6
15.5
Edelweiss
Securities Limited
Limited
Company Profile
TATA CONSULTANCY SERVICES

Re-iterates its positive stance
February 7, 2012
IT
Key takeaways
Management reiterated its long-term revenue growth target of 20% (CAGR) with
27% sustainable EBIT margin. The company also reiterated the fact that the cost
cutting pressures have led to increase in outsourcing in Europe which is expected
to grow at a faster pace.
Company also expects more clarity on budgets by May /June for FY13 and currently
the pipeline remains strong with deal wins in all verticals and across geographies.
It also foresees the telecom vertical to post a better YoY growth in FY13.
On the operational front TCS expects to end FY12 with gross hire of 65,000 and
also maintained its campus offers for FY13 at 43,600.
TCS expects a capital expenditure of ~INR25bn for FY13 and a tax rate of 25%,
which is expected to dip gradually.
The company has been adding capacity in tier II cities to increase its retention
ratio of employees and will be adding sizable capacity in Bhubaneshwar , Indore
, and Gandhinagar (Ahmedabad).
Absolute Rating
BUY
Outperformer

Equalweight
MARKET DATA (R : TCS.BO, B: TCS IN)

CMP
: INR 1,199
Target Price
: INR 1,185
52-week range (INR)
: 1,247 / 902
Share in issue (mn)
: 1,957.2
: 2,348 / 46,728

Promoters*
: 74.1
MFs, FIs & Banks
As Indias largest and most-experienced IT services firm, TCS is well-positioned to

benefit from the growing demand for offshore IT services. It is a serious contender
for winning large deals, as it has more experience than peers in implementing
large, complex, and mission-critical projects. TCS has multiple margin levers at
its disposal, which we believe, will sustain its margins, shielding it from continued
pressures on account of wage increases across the industry. End-to-end full
services offerings, traction in emerging markets, ability to roll up large
acquisitions, improving sales and marketing prowess and willingness to take
multiple big bets (different go-to-market models) are among the key rationales for
TCS to sustain its long term hi-growth trajectory.
FIIs
: 13.4
Others
4.8

Nil
Key risks
7.7

Stock
Nifty
EW IT
Index
(1.5)
1 month
(5.7)
9.6
3 months
1.5
0.3
4.0
12 months
(6.4)
(7.1)
(3.9)
Key risks to our investment theme include (1) double dip recession in major
market US and prolonged slowdown in Europe (2) sharp cross currency movements
and appreciation of rupee against USD, Euro and GBP (3) pricing pressure and (4)
reduction in margins.
Financials
Year to March
Revenues (INR mn)
Rev. growth (%)
EBITDA (INR mn)
Net profit (INR mn)
Diluted EPS (INR)
EPS growth (%)
Diluted P/E (x)
EV/EBITDA (x)
ROAE (%)
FY10
FY11
FY12E
FY13E
300,289
8.0
86,800
68,738
1,957
35.1
32.9
33.9
26.5
37.6
373,245
24.3
111,984
87,164
1,957
44.5
26.8
26.8
20.4
37.6
495,590
32.8
149,615
107,753
1,957
55.1
23.6
21.7
15.0
36.9
582,482
17.5
171,988
128,998
1,957
65.9
19.7
18.1
12.7
34.3

Sandip Agarwal
+91-22- 6623 3474
Kunal Sangoi
+91-22- 6623 3370
Omkar Hadkar
+91-22- 6620 3147
Balance sheet
Income statement
Year to March
(INR mn)
FY10
FY11
FY12E
FY13E
Revenues
300,289
Cost of revenues
157,244
Gross profit
143,045
Total SG&A expenses
56,246
EBITDA
86,800
Dep. & Amortization
7,208
EBIT
79,592
Other income
2,256
Profit before tax
81,847
Tax
12,089
Core profit
69,759
Profit after tax
69,759
Min, int. & others - paid/(recd.) 1,021
68,738
1,957
EPS (INR) basic
35.1
Diluted shares (mn)
1,957
EPS (INR) diluted
35.1
CEPS (INR)
38.8
Dividend per share
20.0
Dividend (%)
2,000.0
56.9
373,245
199,373
173,872
61,888
111,984
7,214
104,770
5,324
110,094
21,739
88,355
88,355
1,191
87,164
1,957
44.5
1,957
44.5
48.2
14.0
1,400.0
31.4
495,590
260,222
235,368
85,753
149,615
9,299
140,316
1,843
142,159
33,299
108,859
108,859
1,106
107,753
1,957
55.1
1,957
55.1
59.8
13.8
1,375.0
25.0
582,482
306,201
276,281
104,293
171,988
11,298
160,690
10,591
171,281
41,107
130,174
130,174
1,176
128,998
1,957
65.9
1,957
65.9
71.7
16.0
1,600.0
24.3

Year to March
FY10
FY11
FY12E
FY13E
Cost of revenues
Gross margin
SG&A expenses
EBITDA margin
EBIT margin
Net profit margins
52.4
47.6
18.7
28.9
26.5
23.2
53.4
46.6
16.6
30.0
28.1
23.7
52.5
47.5
17.3
30.2
28.3
22.0
52.6
47.4
17.9
29.5
27.6
22.3
Growth metrics (%)

Year to March
FY10
FY11
FY12E
FY13E
8.0
20.9
20.6
33.4
33.3
32.9
24.3
29.0
31.6
34.5
26.7
26.8
32.8
33.6
33.9
29.1
23.2
23.6
17.5
15.0
14.5
20.5
19.6
19.7
Revenues
EBITDA
EBIT
PBT
Net profit
EPS
Cash flow statement

Year to March
Net profit
Depreciation
Others
Gross cash flow
Less:Changes in WC
Operating cash flow
Less: Capex
Free cash flow
FY10
FY11
FY12E
(INR mn)
FY13E
68,738
7,208
(5,498)
70,447
(4,431)
74,878
10,225
64,653
87,164
7,214
(4,899)
89,480
20,331
69,148
16,834
52,314
107,753
9,299
(5,198)
111,855
23,084
88,770
23,000
65,770
128,998
11,298
(15,002)
125,294
13,204
112,089
18,000
94,089
89
(INR mn)
As on 31st March
Reserves
Borrowings
Minority interest
Sources of funds
Goodwill & ot. intan. asset
Net fixed assets
Investments
Other assets
Cash & Bank balances
Debtors
Unbilled revenue
Prepaid & other cur. assets
Sundry creditors
Provisions
Other liabilities
Working capital
BV per share (INR)
Ratios
Year to March
ROAE (%)
ROACE (%)
Debtors (days)
Payable (days)
Current ratio
Equity turnover(x)
Year to March
Diluted EPS (INR)
Y-o-Y growth (%)
CEPS (INR)
Diluted PE (x)
Price/BV(x)
EV/Revenues (x)
EV/EBITDA (x)
Dividend yield (%)
FY10
FY11
FY12E
FY13E
1,957
23,401
184,026
209,384
10,110
4,056
223,549
32,415
41,706
37,816
22,488
10,249
58,098
12,011
59,762
140,120
43,651
7,311
34
50,996
89,124
223,549
107.0
1,957
19,192
232,895
254,044
12,029
3,147
269,220
33,791
51,996
47,405
25,745
15,539
82,016
13,489
15,042
168,945
29,819
7,363
21,481
58,663
110,282
269,220
129.8
1,957
19,192
308,907
330,056
13,232
4,253
347,541
33,791
65,697
61,627
31,409
37,709
108,623
15,512
16,197
220,899
35,783
8,100
22,000
65,882
155,017
347,541
168.6
1,957
19,192
401,508
422,657
14,555
5,429
442,641
33,791
72,398
80,115
38,319
88,076
124,476
18,925
18,102
292,437
42,940
8,910
22,571
74,420
218,017
442,641
215.9
FY10
FY11
FY12E
FY13E
37.6
46.8
73
54
19
2.7
7.6
1.5
1.6
37.6
51.4
69
36
33
2.9
8.0
1.5
1.6
36.9
55.3
70
24
46
3.4
8.4
1.6
1.7
34.3
49.6
73
25
48
3.9
8.4
1.5
1.5
FY10
FY11
FY12E
FY13E
35.1
32.9
38.8
33.9
11.1
7.7
26.5
20.5
1.7
44.5
26.8
48.2
26.8
9.2
6.1
20.4
15.3
1.2
55.1
23.6
59.8
21.7
7.1
4.5
15.0
13.1
1.2
65.9
19.7
71.7
18.1
5.5
3.8
12.7
11.1
1.3
Edelweiss
Securities Limited
Limited
Company Profile
TITAN INDUSTRIES
Scaling new heights
February 7, 2012
Retail
Key takeaways
Volume growth in jewellery was primarily impacted by volatility in gold prices

and weakening consumer sentiment. Volume growth will continue to be a challenge
in coming quarters (though January has seen better sales compared to Q3FY12) as
well since volatility in gold prices continues and chances of rise in impulse
purchases remain dim. Management is targeting 35% YoY topline growth for FY12.
The recent hike in import duty on gold will not significantly impact Titans jewellery
segments volumes.
Titans watches segments EBIT margin faced severe strain due to material cost
pressure. Most parts of watches are imported by Titan and the INR depreciation
thus hit the watches divisions margin. However, Q4FY12 will witness full impact
of price hike taken by the company in watch category. But the recent rupee
appreciation will benefit margins to a limited extent as the company has hedged
the rupee at 50+ levels. Sustained rupee appreciation will aid margins in the
longer term. Eye wear facing severe competition. Breakeven delayed by a year.
Titan expects it to break even by FY13 end. Titan is planning capital expenditure of
~INR2bn per annum for next two years primarily directed towards aggressive
retail expansion. At least one large format (company owned) store in Tanishq in
every metro.
Titan has assiduously positioned itself in the premium watch and designer
jewellery space. With constant product innovation it has become the largest
organised player in both these segments. Given its well established brand and
sound management we expect Titan to replicate this success in its new eyewear
venture as well. We believe Titan has the ability to create significant value with its
large distribution presence, strong brand, designing skills and proven execution
track record.
Key risks
Absolute Rating
BUY
Outperformer

Overweight
MARKET DATA (R : TITN.BO, B: TTAN IN)

CMP
: INR 200
Target Price
: INR 230
52-week range (INR)
: 238 / 147
Share in issue (mn)
: 887.8
: 177 / 3,528

Promoters*
: 53.5
MFs, FIs & Banks
FIIs
: 13.1
Others
: 27.5

5.9
Nil

Stock
Nifty
EW Retail
Index
1 month
18.1
9.6
10.6
3 months
(4.9)
0.3
(4.2)
12 months
15.8
(7.1)
(11.1)
Deterioration of macro conditions.

Volatility in gold prices.
Business seasonal, restricted to marriage season and festivals.
Financials
Year to March
Revenues (INR mn)
Rev. growth (%)
EBITDA (INR mn)
Net profit (INR mn)
Diluted EPS (INR)
EPS growth (%)
Diluted P/E (x)
EV/EBITDA (x)
ROAE (%)
FY10
FY11
FY12E
FY13E
46,786
22.0
3,974
2,513
888
2.8
53.3
70.9
44.5
39.0
65,342
39.7
5,907
4,331
888
4.9
72.4
41.1
28.4
49.0
87,272
33.6
7,418
5,554
888
6.3
28.2
32.1
22.0
45.1
102,955
18.0
9,060
6,758
888
7.6
21.7
26.4
17.6
40.5

Abneesh Roy
+91 22 6620 3141
Harsh Mehta
+91 22 4063 5543
Balance sheet
Income statement
Year to March
(INR mn)
FY10
FY11
FY12E
FY13E
Net revenues
46,786
Cost of materials
34,429
Gross profit
12,356
Employee costs
2,779
Others
3,492
EBITDA
3,974
Depreciation
607
EBIT
3,367
Other income
113
3,480
Net interest & Finance charges 254
PBT
3,226
713
Core PAT
2,513
Associate
0
Pr. af. tax after Min. Int. & Asso.2,513
EPS (INR) basic
2.8
Diluted shares (mn)
888
2.8
CEPS (INR)
3.5
DPS
0.8
26.5
65,342
48,037
17,305
3,974
3,033
4,391
5,907
351
5,556
559
6,114
82
6,032
1,701
4,331
(0)
4,331
888
4.9
888
4.9
5.3
1.3
25.6
87,272
64,625
22,647
5,149
4,145
5,716
7,636
378
7,258
667
7,924
136
7,788
2,181
5,608
0
5,608
888
6.3
888
6.3
6.7
1.6
25.0
106,329
78,258
28,071
6,273
5,210
7,018
9,570
408
9,162
911
10,073
86
9,987
2,796
7,191
0
7,191
888
8.1
888
8.1
8.6
2.0
25.0

Year to March
FY10
Cost of materials
Employee costs
Depreciation
EBITDA margin
EBIT margin
Net profit margin
Growth metrics (%)

Year to March
Revenues
EBITDA
PBT
Net profit
EPS
Cash flow statement

Year to March
Net profit
Depreciation
Others
Gross cash flow
Less:Changes in WC
Less: Capex
Free cash flow
FY11
FY12E
FY13E
73.6
5.9
4.5
7.5
1.3
0.5
8.5
7.2
5.4
73.5
6.1
4.6
6.7
0.5
0.1
9.0
8.5
6.6
74.1
5.9
4.8
6.6
0.4
0.2
8.7
8.3
6.4
73.6
5.9
4.9
6.6
0.4
0.1
9.0
8.6
6.8
FY10
FY11
FY12E
FY13E
22.0
30.2
35.5
53.3
53.3
39.7
48.6
87.0
72.4
72.4
33.6
29.3
29.1
29.5
29.5
21.8
25.3
28.2
28.2
28.2
FY10
FY11
FY12E
(INR mn)
FY13E
2,513
861
607
254
3,374
(133)
3,507
316
3,192
4,331
434
351
82
4,765
(5,586)
10,351
481
9,870
5,608
515
378
136
6,122
(502)
6,624
531
6,093
7,191
494
408
86
7,685
(332)
8,017
525
7,492
91
(INR mn)
As on 31st March
Share capital
Reserves
Shareholders' funds
Secured loans
Unsecured loans
Borrowings
Sources of funds
Gross block
Less depreciation
Net fixed assets
Investments
Current assets
Inventories
Sundry debtors
Loans and advances
Current liabilities
Liabilities
Provisions
Working capital
Uses of funds
BV (INR)
Ratios
Year to March
ROAE (%)
ROACE (%)
Debtor days
Inventory days
Payable days
Current ratio
Debt/EBITDA
Debt/Equity
Year to March
Diluted EPS (INR)
Y-o-Y growth (%)
CEPS (INR)
Diluted P/E (x)
Price/BV (x)
EV/Sales (x)
EV/EBITDA (x)
Dividend yield (%)
FY10
FY11
FY12E
FY13E
444
6,875
7,319
730
0
730
54
8,104
6,374
3,696
2,678
123
16
18,235
13,454
947
1,973
1,860
12,949
11,591
1,358
5,285
8,103
8
444
9,912
10,356
680
0
680
21
11,057
6,855
3,971
2,884
194
26
34,465
19,981
1,176
11,083
2,225
26,512
24,298
2,214
7,953
11,057
12
444
13,894
14,338
194
237
430
21
14,789
7,405
4,349
3,056
175
26
41,019
22,309
1,395
15,163
2,152
29,487
27,272
2,214
11,532
14,789
16
444
18,999
19,443
194
237
430
21
19,894
7,955
4,757
3,198
150
26
51,898
27,151
1,670
20,484
2,593
35,378
33,163
2,214
16,520
19,894
22
FY10
FY11
FY12E
FY13E
39.0
43.4
12
100
90
22
1.4
0.2
0.1
0.1
13.3
49.0
58.1
11
93
110
(5)
1.3
0.1
0.1
0.1
67.5
45.4
56.3
9
93
125
(23)
1.4
0.1
0.0
0.0
53.3
42.6
52.9
9
93
125
(23)
1.5
0.1
0.0
0.0
106.5
FY10
FY11
FY12E
FY13E
2.8
53.3
3.5
70.9
24.3
3.8
44.5
0.4
4.9
72.4
5.3
41.1
17.2
2.6
28.4
0.6
6.3
28.2
6.7
32.1
12.5
1.9
22.0
0.8
7.6
21.7
8.2
26.4
9.3
1.6
17.6
0.9
Edelweiss
Securities Limited
Limited
Company Profile
TORRENT PHARMACEUTICALS
Domestic revival awaited
February 7, 2012
Pharmaceuticals
Key takeaways
Domestic growth to return to industry level FY13 onwards: Management has

highlighted that though FY12 will be a low growth year in the domestic market, it
expects to grow in line with the covered market growth (15-16%) starting FY13
onwards. Domestic business was largely affected by muted growth in anti-infective
and gastro (45% of India sales) while chronic is growing in line with the historical
trend (15% YoY). The company has already taken the corrective action and confident
to grow the business going forward
Absolute Rating
BUY
Performer

Equalweight
MARKET DATA (R : TORP.BO, B: TRP IN)
Brazil to sustain growth momentum: Brazil, which has been a jewel for Torrent,
has been showing strong traction and grew over 20% in constant currency over
9mFY12. Management is confident of maintaining growth trajectory driven by new
launches (pipeline of 35 products) as well as gaining market shares in the existing
portfolio (marketing 29 products).
CMP
: INR 566
Target Price
: INR 760
US business to turn profitable driven by niche launches: The company is confident

of maintaining the growth momentum in US (over 50% growth in CER) over the next
two years driven by a couple of niche launches such as Quitapine, Duloxitine, etc.
Moreover, management has highlighted that US business has already broken even
in Q3FY12 and is confident that it will become profitable FY13 onwards.
Promoters*
: 71.5
Margins to improve from current level: Torrent expects operating margin to improve
going forward driven by: (a) improved traction from India; (b) US turning profitable;
(c) new launches in Brazil; and (d) capacity ramp-up in Sikkim.
MFs, FIs & Banks
: 11.8
FIIs
Others
: 11.3

Despite a strong performance on the international front, domestic business
continues to pull down the operating performance of the company. We expect the
domestic business to improve from Q1FY13 as base effect of acute will be behind.
In our view the investment cycle in India as well as the global business has peaked
and Torrent will reap benefits over FY13, which limits downside risk. However,
recovery in domestic growth is a key trigger for valuation re-rating.
Key risks
52-week range (INR)
: 686 / 499
Share in issue (mn)
: 84.6
: 48 / 953
5.3
Nil

Stock
Nifty
EW Pharma
Index
1 month
5.7
9.6
20.3
3 months
(5.2)
0.3
14.8
12 months
(6.7)
(7.1)
15.1
Recovery in domestic growth will be lower than anticipated.

Regulatory risk.
Financials
Year to March
Revenues (INR mn)
Rev. growth (%)
EBITDA (INR mn)
Net profit (INR mn)
EPS (INR)
EPS growth (%)
Diluted P/E (x)
EV/EBITDA (x)
ROE (%)
FY10
FY11
FY12E
FY13E
19,040
16.8
4,087
2,277
85
26.9
5.7
21.0
11.7
30.7
22,329
17.3
4,156
2,794
85
33.0
22.7
17.1
11.4
30.1
26,815
20.1
5,174
3,536
85
41.8
26.5
13.5
9.1
30.5
32,075
19.6
6,314
4,374
85
51.7
23.7
11.0
7.3
29.8

Manoj Garg
+91-22-6623 3302
Perin Ail
+91-22-6620 3032
Balance sheet
Income statement
(INR mn)
Year to March
FY10
FY11
FY12E
FY13E

19,040
Net revenues
18,329
Other operating income
710
14,953
Materials cost
5,725
Employee cost
3,162
R&D cost
1,202
Selling, admin & general exp. 4,864
EBITDA
4,087
481
EBIT
3,606
Net Interest expense/(income) 165
Other income
211
Pr. before tax (excl extraord.) 3,652
Provision for tax
1,160
Core profit
2,277
Extraordinary items
(180)
Re. profit after min. int.
2,312
Adj. PAT after min. interest
2,277
EPS (INR) basic
26.9
Diluted shares (mn)
84.6
EPS (INR) adjusted
26.9
CEPS (INR)
32.6
6.0
Dividend payout (%)
22.3
22,329
21,500
830
18,173
6,984
3,895
1,388
5,905
4,156
626
3,531
29
205
3,707
739
2,794
(280)
2,702
2,794
85
33.0
84.6
33.0
40.4
8.0
24.2
26,815
25,870
945
21,641
8,393
4,479
1,636
7,132
5,174
826
4,348
127
(87)
4,135
744
3,536
0
3,391
3,536
85
41.8
84.6
41.8
51.5
6.8
16.4
32,075
31,431
645
25,761
10,008
5,196
1,957
8,601
6,314
995
5,319
75
90
5,334
960
4,374
0
4,374
4,374
85
51.7
84.6
51.7
63.4
8.8
17.1

Year to March
FY10
FY11
FY12E
FY13E
30.1
16.6
25.5
6.3
78.5
2.5
0.9
21.5
12.4
31.3
17.4
26.4
6.2
81.4
2.8
0.1
18.6
13.0
31.3
16.7
26.6
6.1
80.7
3.1
0.5
19.3
13.7
31.2
16.2
26.8
6.1
80.3
3.1
0.2
19.7
13.9
FY10
FY11
FY12E
FY13E
16.8
36.3
5.7
81.7
5.7
17.3
1.7
22.7
1.5
22.7
20.1
24.5
26.5
11.6
26.5
19.6
22.0
23.7
29.0
23.7
FY10
FY11
FY12E
(INR mn)
FY13E
2,312
481
(74)
2,720
(349)
3,069
1,108
1,961
2,702
626
(29)
3,298
(577)
3,875
2,641
1,234
3,391
826
4,217
1,454
2,763
2,000
763
4,374
995
0
5,369
737
4,631
2,500
2,131
Cost of revenues
Employee cost
Selling, admin & general exp.
R & D cost
EBITDA margins
Net profit margins
Growth metrics (%)
Year to March
Revenues
EBITDA
Net profit
PBT
Adj. EPS
Cash flow statement
Year to March
Net profit
Depreciation
Others
Gross cash flow
Less: Changes in WC
Operating cash flow
Less: Capex
Free cash flow
93
(INR mn)
As on 31st March
Equity capital
Reserves & surplus
Borrowings
Sources of funds
Gross block
Depreciation
Net block
Investments
Inventories
Sundry debtors
Loans and advances
Sundry creditors
Other current liabilities
Provisions
Net current assets
Uses of funds
Ratios
Year to March
ROAE (%)
ROACE (%)
Inventory days
Debtors days
Payable days
Current ratio
Debt/ EBITDA
Debt/equity
Year to March
Diluted EPS (INR)
Y-o-Y growth (%)
CEPS
Diluted P/E (x)
Price/BV (x)
EV/Sales (x)
EV/EBITDA (X)
FY10
FY11
FY12E
FY13E
423
7,887
8,310
5,224
499
14,033
9,228
2,718
6,510
1,412
3,236
2,982
3,883
1,138
368
11,607
3,782
434
1,280
5,496
6,111
14,033
98
423
9,801
10,224
5,721
480
16,440
11,828
3,287
8,541
1,460
5,048
3,404
4,788
1,428
678
15,346
6,994
485
1,427
8,907
6,439
16,440
121
423
12,513
12,937
5,621
480
19,053
13,828
4,114
9,715
1,460
4,713
3,703
4,772
1,428
678
15,293
5,454
534
1,427
7,415
7,878
19,053
153
423
16,012
16,435
5,121
480
22,052
16,328
5,109
11,220
1,460
5,808
4,437
5,529
1,428
678
17,880
6,493
587
1,427
8,508
9,372
22,052
194
FY10
FY11
FY12E
FY13E
30.7
42.5
56
54
95
16
2.1
1.3
0.6
0.6
30.1
37.3
68
52
132
(12)
1.7
1.4
0.6
0.6
30.5
37.8
70
55
100
25
2.1
1.1
0.4
0.4
29.8
38.2
72
55
100
27
2.1
0.8
0.3
0.3
FY10
FY11
FY12E
FY13E
26.9
5.7
32.6
21.0
5.8
2.5
11.7
33.0
22.7
40.4
17.1
4.7
2.1
11.4
41.8
26.5
51.5
13.5
3.7
1.8
9.1
51.7
23.7
63.4
11.0
2.9
1.4
7.3
Edelweiss
Securities Limited
Limited
Company Profile
YES BANK
Maintaining momentum
February 7, 2012
Key takeaways
Savings rate deregulation significant accretion to savings deposits continues.

Traction in savings account (in terms of enquiries, account opening etc.,) has gone
up 3-5x. It is getting empanelment every day from large/mid corporate etc. Also,
the bank indicated that even an absolute 1% release of CASA by top three banks
implies INR350bn opportunity. Pursuing to complete retail product suite on both
the asset as well as liability side.
The bank has launched some basic retail lending product namely auto loans; has
tied up with Dewan Housing for home loans (will be helpful in building PSL book);
has also started providing dealer financing. Even on liability side, will be
introducing new retail offerings like gold/silver coins, reimbursement cards.
Cost-to-income increased slightly in Q3 due to higher headcount and branch
expansion. Management indicated that despite branch expansion C/I ratio will
not go beyond 40%. Forecasts SME/retail to grow to 30% by FY15 (from 15% at
present). Asset quality will behave cyclically if there is sharp downturn can see
some asset quality pressures. Restructuring is likely to go up but not beyond
manageable levels.
Financial advisory stream will be sustainable going forward particularly on debt
syndication front as there is lot of demand for refinancing in some sectors like
infra, cement etc. However, it believes non-interest income will be cyclical as it is
more transaction oriented.
The bank can manage without capital raising in the near term. For FY12, it is likely
to close with 9.2- 9.3% Tier 1. Also, it believes that approximately 50bps can be
released by more corporate getting rerated.
We expect Yes Bank to grow well above the system even if at a slower pace with a
well entrenched fee income platform and lower credit costs, delivering superior
earnings (~24% CAGR over FY12 14E) and attractive RoA/RoE of 1.4%/22% by FY13E.
Absolute Rating
BUY
Outperformer

Equalweight
MARKET DATA (R : YESB.BO, B: YES IN)

CMP
: INR 337
Target Price
: INR 335
52-week range (INR)
: 354 / 230
Share in issue (mn)
: 351.9
: 119 / 2,364

Promoters*
: 26.2
MFs, FIs & Banks
: 15.4
FIIs
: 44.5
Others
: 13.9

Nil

Stock
Nifty
EW BFSI
Index
15.8
1 month
29.9
9.6
3 months
5.6
0.3
3.9
12 months
22.7
(7.1)
(6.2)
Key risks
Lower CASA can be a negative for the bank at this point of time when most banks
arebanking on their franchise network. In event of demand for credit dying lack of
pricing power can impact its margin adversely.
Financials
Year to March
Net rev growth (%)
Net profit (INR mn)
EPS (INR)
EPS growth (%)
PE (x)
Price to book (x)
ROE (%)
FY10
FY11
FY12E
FY13E
13,691
41.4
4,776
340
14.1
37.5
24.0
3.7
20.3
18,706
36.6
7,275
347
21.0
49.0
16.1
3.1
21.1
24,513
31.0
9,593
347
27.6
31.9
12.2
2.5
22.7
30,082
22.7
11,408
347
32.9
18.9
10.3
2.1
22.1

Nilesh Parikh
+91-22- 4063 5470
Kunal Shah
+91-22- 4040 7579
Suruchi Chaudhary
+91-22-6623 3316
Balance sheet
Income statement
Year to March
(INR mn)
FY10
FY11
FY12E
FY13E
23,697
15,818
7,880
5,812
4,232
593
986
13,691
5,007
2,569
2,439
8,684
1,419
1,265
154
0
7,265
2,489
4,776
4,776
14.1
1.5
12.5
40,418
27,948
12,469
6,237
6,555
145
(464)
18,706
6,798
3,623
3,175
11,908
982
914
(72)
140
10,926
3,651
7,275
7,275
21.0
2.5
13.8
57,482
41,094
16,388
8,125
7,949
176
0
24,513
9,053
4,792
4,261
15,461
1,248
1,248
0
0
14,212
4,619
9,593
9,593
27.6
2.5
10.4
72,272
52,710
19,562
10,520
9,998
222
300
30,082
10,883
5,768
5,114
19,199
2,299
2,299
0
0
16,900
5,493
11,408
11,408
32.9
2.5
8.8
Growth metrics (%)

Year to March
FY10
FY11
FY12E
FY13E
NII growth
Fees growth
Opex growth
PPOP growth
PPP growth
Provisions growth
PAT growth
54.1
54.5
19.6
92.0
58.0
51.3
57.2
58.2
54.9
35.8
60.7
37.1
(27.8)
52.3
31.4
21.3
33.2
25.0
29.8
36.7
31.9
19.4
25.8
20.2
22.2
24.2
84.1
18.9

Year to March
FY10
FY11
FY12E
FY13E
10.2
6.8
8.4
2.8
5.8
5.8
7.8
2.6
36.6
34.3
10.6
7.1
8.8
2.7
6.3
6.3
8.1
2.5
36.3
33.4
10.7
7.4
8.9
2.5
6.6
6.4
8.4
2.3
36.9
32.5
10.6
7.5
8.8
2.4
6.7
6.2
7.9
2.1
36.2
32.5
Interest income
Interest expenses
Net interest income
Non interest income
- Misc. income
Net revenues
Operating expense
- Employee exp
- Other opex
Preprovision profit
Provisions
- Other provisions
PBT
Taxes
PAT
Reported PAT
EPS
DPS
Payout ratio (%)
Yield on advances
Yield on assets
Cost of funds
Cost of deposits
Cost of borrowings
Spread
Cost-income
Tax rate
95
(INR mn)
As on 31st March
Liabilities
Equity capital
Reserves
Net worth
Sub bonds/pref cap
Deposits
Borrowings
Other liabilities
Total
Assets
Loans
Investments
Gilts
Others
Cash & equi
Fixed assets
Other assets
Total
Credit growth
Deposit growth
EA growth
SLR ratio
C-D ratio
Low-cost deposits
Gross NPA ratio
Net NPA ratio
Provision coverage
Net NPA / Equity
Capital adequacy
- Tier 1
Book value (INR)

Year to March
Fees/Assets
Net revenues/Assets
Provisions/Assets
Taxes/Assets
Total costs/Assets
ROA
Equity/Assets
ROAE
Year to March
Diluted EPS (INR)
EPS growth (%)
Diluted P/E (x)
Price/ BV (x)
Price/ ABV (x)
Dividend yield (%)
FY10
FY11
FY12E
FY13E
3,397
27,499
30,896
17,235
267,986
30,256
17,453
363,825
3,472
34,469
37,941
33,579
459,389
33,330
25,831
590,070
3,472
43,061
46,532
58,579
532,042
78,267
25,220
740,640
3,472
53,466
56,938
78,579
652,730
116,267
28,804
933,317
221,931
343,636
395,182
493,977
67,865
34,235
26,733
1,155
11,907
363,825
107,473
80,816
34,960
1,324
21,861
590,070
146,474
141,326
40,294
1,479
15,885
740,640
184,559
183,684
49,536
1,545
20,015
933,317
71.9
65.7
63.6
22.8
86.1
10.5
0.3
0.1
78.4
0.9
0.4
20.6
12.9
91.0
66.3
71.4
61.6
25.0
83.6
10.3
0.2
0.0
88.6
0.2
0.2
16.8
11.0
109.3
21.3
15.8
27.6
24.0
87.5
12.8
0.5
0.1
81.0
0.8
0.8
16.5
10.8
134.0
25.8
22.7
26.1
24.0
89.7
15.3
0.7
0.1
81.7
1.0
1.1
16.2
10.6
164.0
FY10
FY11
FY12E
FY13E
2.8
1.7
0.3
4.8
(1.8)
(0.5)
(0.9)
(3.2)
1.7
8.3
20.3
2.7
1.5
(0.1)
4.1
(1.5)
(0.2)
(0.8)
(2.5)
1.6
7.5
21.1
2.5
1.3
0.0
3.8
(1.4)
(0.2)
(0.7)
(2.3)
1.5
6.5
22.7
2.4
1.3
0.0
3.7
(1.3)
(0.3)
(0.7)
(2.3)
1.4
6.3
22.1
FY10
FY11
FY12E
FY13E
14.1
37.5
91.0
90.7
24.0
3.7
3.7
0.4
21.0
49.0
109.3
109.1
16.1
3.1
3.1
0.7
27.6
31.9
134.0
133.3
12.2
2.5
2.5
0.7
32.9
18.9
164.0
162.8
10.3
2.1
2.1
0.7
Edelweiss
Securities Limited
Limited
Company Profile
ZODIAC CLOTHING
The right cut
February 7, 2012
Mescellaneous
Key takeaways
EDELWEISS RATINGS
Zodiac Clothing Company (Zodiac) saw severe slowdown in demand in Q3FY11.

However, January has been particularly good due to end of season discount sales.
Absolute Rating
It expects future growth to come from: (a) store expansion; ( b) accessories; (c) bespoke luxury tailor range Regale; (d) suits range; (e) shift from unbranded
international range to branded clothing; (f) focused approach on retailing; and (g)
other brands like Zod and Z3. The company believes point of inflection is yet to
come.
The company does not plan to take price cuts despite decline in key raw material
(cotton) prices.
~85% of Zodiacs production is pre-sold; the company insures export receivables.
NOT RATED
MARKET DATA (R : ZCCL.BO, B: ADC IN)

CMP
: INR 209
Target Price
: NA
52-week range (INR)
: 276 / 180
Share in issue (mn)
: 19.2
: 4 / 80
Best-in-class debt/equity ratio of 0.2x. In addition to India, the company has

manufacturing locations in Dubai to facilitate imports in Europe.
Zodiac is not keen on revenue sharing model with mall developers. It invests ~912% of domestic branded sales into advertising.
Key risks
MFs, FIs & Banks
Excise duty increase will force the company to effect price increases, which can
impact volumes.
FIIs
: 18.1
Others
: 19.8

: 11.2
Pressure on margins due to competition.
Promoters*
: 59.8
2.3
Macro slowdown.
Slow revenue growth due to rollout delays and poor same store growth.
Sensex
Currency exchange risk is another monitorable.
Stock
Stock over
Sensex
(9.4)
1 month
11.7
2.3
3 months
0.8
3.7
2.9
12 months
(1.8)
(9.6)
(7.8)
Financials
Year to March
FY08
FY09
FY10
FY11
Revenues (INR mn)

Rev. growth (%)
EBITDA (INR mn)
Net profit (INR mn)
EPS (INR)
EPS growth (%)
Diluted P/E (x)
EV/EBITDA (x)
ROAE (%)
2,835
9.4
325
321
8
37.5
36.9
5.6
4.6
24.9
3,211
13.2
233
249
8
28.6
(23.7)
7.3
7.8
16.4
3,140
(2.2)
281
262
8
30.0
4.8
7.0
6.1
15.1
3,475
10.7
229
332
13
26.2
(12.8)
8.0
11.2
16.7

Abneesh Roy
+91 22 6620 3141
Harsh Mehta
+91 22 4063 5543
Balance sheet
Income statement
Year to March
(INR mn)
FY08
FY09
FY10
FY11

2,835
Direct costs
1,053
Employee costs
470
Other expenses
987
2,510
EBITDA
325
EBIT
275
Interest expenses
28
Other income
194
Profit before tax
441
Provision for tax
116
Core profit
324
Extraordinary items
3
Profit after tax
321
321
Adjusted net profit
321
EPS (INR) diluted
37.5
8.4
Dividend payout (%)
16.8
Tax rate (%)
26.4
3,211
1,148
547
1,282
2,978
233
58
175
28
198
345
95
250
0
249
249
249
28.6
8.4
21.8
27.6
3,140
1,112
559
1,188
2,859
281
63
218
28
198
388
126
262
262
262
262
30.0
8.4
22.5
32.6
3,475
1,387
610
1,249
3,245
229
72
158
25
285
418
86
332
332
332
332
26.2
12.8
19
20.7
FY09
FY10
FY11
92.8
1.8
0.9
7.2
7.8
91.0
2.0
0.9
9.0
8.3
93.4
2.1
0.7
6.6
9.5

Year to March
FY08
Operating expenses
EBITDA margins
Net profit margins
Growth metrics (%)

Year to March
Revenues
EBITDA
PBT
Net profit
EPS
Cash flow statement

Year to March
Net profit
Depreciation
Deferred tax
Others
Gross cash flow
Less:Changes in WC
Operating cash flow
Less: Capex
Free cash flow
88.5
1.8
1.0
11.5
11.3
FY08
FY09
FY10
FY11
9.4
9.8
28.3
37.1
36.9
13.2
(28.5)
(21.7)
(23.0)
(23.7)
(2.2)
20.9
12.6
4.9
4.8
10.7
(18.5)
7.7
26.7
(12.8)
FY08
FY09
FY10
(INR mn)
FY11
321
50
(8)
(165)
198
11
187
66
121
249
58
1
167
475
117
358
289
69
262
63
1
50
376
226
150
63
87
332
72
13
(259)
157
3
155
247
(93)
97
(INR mn)
As on 31st March
FY08
FY09
FY10
FY11
Equity capital
Reserves & surplus
Shareholders funds
Secured loans
Unsecured loans
Borrowings
Sources of funds
Gross block
Depreciation
Net block
Total fixed assets
Investments
Inventories
Sundry debtors
Loans and Advances
Provisions
Net current assets
Net deferred tax
Uses of funds
84
1,338
1,422
248
248
1,670
970
289
681
41
722
228
510
312
103
356
1,281
463
82
545
737
(17)
1,670
169
84
1,531
1,615
268
1
269
1,884
1,286
374
912
34
946
102
533
343
271
341
1,488
540
95
635
854
(18)
1,884
192
84
1,764
1,848
321
1
322
2,170
1,329
418
911
95
1,007
102
555
329
292
421
1,598
422
96
518
1,080
(19)
2,170
220
128
2,002
2,131
328
115
443
2,573
1,566
479
1,087
172
1,259
263
733
349
147
427
1,657
473
101
575
1,082
(31)
2,573
166
FY08
FY09
FY10
FY11
24.9
19.5
58
40
149
(51)
2.3
0.8
9.7
4.2
0.2
16.4
10.8
59
37
159
(63)
2.4
1.2
6.3
4.0
0.2
15.1
11.3
63
39
158
(56)
2.3
1.1
7.8
3.4
0.2
16.7
7.2
68
36
118
(15)
3.1
1.9
6.4
3.5
0.2
Ratios
Year to March
ROACE (%)
Inventory days
Debtors days
Payable days
Current ratio
Debt/EBITDA
Interest coverage
Debt/equity
Year to March
Diluted EPS (INR)
Y-o-Y growth (%)
CEPS
Diluted P/E (x)
Price/BV (x)
EV/Sales (x)
EV/EBITDA (X)
FY08
FY09
FY10
FY11
37.53
36.9
43.6
5.6
1.2
0.5
4.6
28.64
(23.7)
36.8
7.3
1.1
0.6
7.8
30.02
4.8
38.9
7.0
0.9
0.5
6.1
26.18
(12.8)
32.4
8.0
1.3
0.7
11.2
Edelweiss
Securities Limited
Limited
Company Profile
ZUARI INDUSTRIES
Deep value urea and complex fertiliser play
February 7, 2012
Agriculture
Key takeaways
Zuari is planning to invest ~USD700mn for an integrated facility comprising a

phosphoric acid facility and 1 mn MT complex fertiliser granulation facility. They
indicated a timeline of 2-3 years for completion of the project. Zuari has announced
raw material linkages during Q3FY12, by acquiring a stake in a Peru mine.
Absolute Rating
BUY
Value
NPK capacity expansion from 0.7 mn MT to 1 mn MT is likely by FY13 end.

Demerger of fertiliser entities likely over the next few months, considering that
approval from High Court is the only pending issue.
With regard to urea feedstock conversion from naphtha to natural gas, management
guided that it is likely to get gas during H2FY13, which will result in working
capital efficiency as well as better capacity utilisation for the urea plant.
Zuaris performance during FY12 was impacted by a fire accident. Currently, both
urea and NPK plants are operating normally. Management pegs EBITDA loss on
account of lost volumes during the peak demand season at about INR330mn.
Management guided for strong performance from Paradeep phosphates for FY12.
On account of lowering of raw material prices, government is likely to lower
subsidy under NBS. While the inventory level for Zuari is high at 0.5mn MT NPK
fertilisers at Q3FY12 end, it guided for most of this to be liquidated in Q4FY12.
With a capex outlay of ~INR800mn, Zuari is likely to expand its complex fertiliser
capacity by ~300,000 MT by FY13 end. It targets to increase the 2 mn MT fertiliser
sales in FY11 to over 3.5 mn MT over the next three years. Zuari is also expected to
benefit from its holding in PPL, that manufactures ~1.2 mn MT NPK per annum and
manufactures ~50% of its phosphoric acid requirement. With implementation of
NBS, the companys complex fertiliser segment is expected to benefit due to margin
expansion and lower subsidy receivables.
MARKET DATA (R : ZURI.BO, B: ZUAR IN)

CMP
: INR 453
Target Price
: INR 907
52-week range (INR)
: 730 / 436
Share in issue (mn)
: 29.4
: 13 / 265

Promoters*
: 34.4
MFs, FIs & Banks
: 20.5
FIIs
Others
: 36.8

: 11.2
8.3

BSE Midcap
Index
Stock
Stock over
Index
1 month
15.0
(1.0)
(15.9)
3 months
(4.0)
(24.2)
(20.2)
12 months
(10.2)
(27.4)
(17.2)
Key risks
Any execution delay in the change of urea feedstock from naphtha to natural gas.
Possible misallocation of capital resulting in sub-optimal value realization.
Possible delay in payment of fertiliser subsidies by government.
Financials
Year to March
Revenues (INR mn)
Rev. growth (%)
EBITDA (INR mn)
Net profit (INR mn)
EPS (INR)
EPS growth (%)
Diluted P/E (x)
EV/EBITDA (x)
ROE (%)
FY10
FY11
FY12E
FY13E
61,684
(30.7)
2,645
2,536
29
85.9
(15.9)
5.2
4.3
20.4
75,988
23.2
3,745
2,556
29
86.9
1.2
5.2
4.1
17.3
85,762
12.9
4,189
2,614
29
88.8
2.1
5.1
3.7
15.2
94,732
10.5
4,875
3,195
29
108.5
22.2
4.1
2.3
16.1

Manoj Bahety, CFA

+91-22-6623 3362
Varun Guntupalli
+91-22-6623 3481
Balance sheet
Income statement
(INR mn)
Year to March
Direct costs
Employee costs
Other expenses
EBITDA
Dep. & amortisation
EBIT
Interest expenses
Other income
Profit before tax
Provision for tax
Core profit
Extraordinary items
Profit after tax
Add: Share in profits of asso.
Adjusted net profit
EPS (INR) basic
Dividend payout (%)
Tax rate (%)
FY10
FY11
FY12E
FY13E
61,684
47,459
1,306
10,274
59,039
2,645
404
2,240
565
1,936
3,612
931
2,681
0
2,681
152
7
2,536
2,536
85.9
29
5.2
25.8
75,988
59,904
1,477
10,862
72,243
3,745
394
3,351
922
1,492
3,921
1,188
2,733
(81)
2,652
173
(4)
2,475
2,556
86.9
29
5.2
30.9
85,762
69,108
1,525
10,940
81,573
4,189
473
3,716
863
1,194
4,047
1,214
2,833
0
2,833
218
0
2,614
2,614
88.8
29
5.1
30.0
94,732
74,906
1,726
13,225
89,857
4,875
510
4,365
570
1,134
4,929
1,479
3,451
0
3,451
256
0
3,195
3,195
108.5
29
4.1
30.0
FY11
FY12E
FY13E
18.8
0.7
0.9
4.3
4.3
16.2
0.5
1.2
4.9
3.6
14.5
0.6
1.0
4.9
3.3
15.8
0.5
0.6
5.1
3.6

Year to March
FY10
Operating expenses
EBITDA margins
Net profit margins
Growth metrics (%)

Year to March
Revenues
EBITDA
PBT
Net profit
EPS
Cash flow statement

Year to March
Net profit
Depreciation
Others
Gross cash flow
Less:Changes in WC
Operating cash flow
Less: Capex
Free cash flow
FY10
FY11
FY12E
FY13E
(30.7)
4.4
(21.2)
(24.0)
(15.9)
23.2
41.6
8.6
1.9
1.2
12.9
11.9
3.2
3.6
2.1
10.5
16.4
21.8
21.8
22.2
FY10
FY11
FY12E
(INR mn)
FY13E
2,536
404
(461)
2,479
11,000
(8,521)
622
(9,143)
2,475
394
201
3,070
1,299
1,771
1,605
166
2,614
473
(112)
2,975
(996)
3,971
383
3,588
3,195
510
(308)
3,396
(1,339)
4,735
753
3,982
99
(INR mn)
As on 31st March
FY10
FY11
FY12E
FY13E
294
13,302
13,596
11,585
5,305
16,890
(135)
744
31,096
8,877
5,634
3,243
531
3,774
8,651
6,560
10,213
2,498
9,440
28,711
11,167
836
12,003
16,708
1,963
31,096
462
294
15,622
15,916
11,819
4,189
16,008
(23)
841
32,743
9,327
5,980
3,347
1,685
5,032
3,809
10,758
10,727
6,775
5,103
33,362
10,076
1,378
11,454
21,909
1,993
32,743
541
294
18,081
18,376
8,000
4,000
12,000
174
1,059
31,609
10,196
6,454
3,742
1,200
4,942
3,809
12,560
13,945
6,727
886
34,118
11,627
1,626
13,253
20,865
1,993
31,609
624
294
21,121
21,415
7,000
2,000
9,000
174
1,315
31,904
11,249
6,963
4,286
900
5,186
3,809
11,714
14,422
8,118
886
35,140
12,440
1,783
14,223
20,917
1,993
31,904
727
FY10
FY11
FY12E
FY13E

ROACE (%)
12.8
Inventory days
59.7
Debtors days
75.4
Payable days
165.4
(30.3)
Current ratio
2.4
Debt/EBITDA
6.4
Interest coverage
4.0
19.1
Debt/equity
1.2
17.3
13.0
52.8
50.3
64.7
38.3
2.9
4.3
3.6
23.1
1.0
15.2
13.1
61.6
52.5
57.3
56.8
2.6
2.9
4.3
24.2
0.7
16.1
15.6
59.1
54.6
58.6
55.2
2.5
1.8
7.7
23.6
0.4
FY10
FY11
FY12E
FY13E
85.9
(15.9)
87.8
5.2
1.0
0.2
4.3
86.9
1.2
104.1
5.2
0.8
0.2
4.1
88.8
2.1
111.6
5.1
0.7
0.2
3.7
108.5
22.2
125.8
4.1
0.6
0.1
2.3
Equity capital
Reserves & surplus
Shareholders funds
Secured loans
Unsecured loans
Borrowings
Minority interest
Sources of funds
Gross block
Depreciation
Net block
Total fixed assets
Investments
Inventories
Sundry debtors
Provisions
Net current assets
Good will
Uses of funds
Ratios
Year to March
Year to March
Diluted EPS (INR)
Y-o-Y growth (%)
CEPS
Diluted P/E (x)
Price/BV (x)
EV/Sales (x)
EV/EBITDA (X)
Edelweiss
Securities Limited
Limited

NOTES
100
Edelweiss
Securities Limited
Limited
RATING & INTERPRETATION
ABSOLUTE RATING
Ratings
Expected absolute returns over 12 months
Buy
More than 15%
Hold
Between 15% and - 5%
Reduce
Less than -5%
RELATIVE RETURNS RATING

Ratings
Criteria
Sector Outperformer (SO)
Stock return > 1.25 x Sector return
Sector Performer (SP)
Stock return > 0.75 x Sector return

Stock return < 1.25 x Sector return
Sector Underperformer (SU)
Stock return < 0.75 x Sector return
Sector return is market cap weighted average return for the coverage universe within the sector
RELATIVE RISK RATING

Ratings
Criteria
Low (L)
Bottom 1/3rd percentile in the sector
Medium (M)
Middle 1/3rd percentile in the sector
High (H)
Top 1/3rd percentile in the sector
Risk ratings are based on Edelweiss risk model
SECTOR RATING
Ratings
Criteria
Overweight (OW)
Sector return > 1.25 x Nifty return
Equalweight (EW)
Sector return > 0.75 x Nifty return

Sector return < 1.25 x Nifty return
Underweight (UW)
Sector return < 0.75 x Nifty return
101
Limited
Edelweiss
Securities Limited

Edelweiss Securities Limited, Edelweiss House, off C.S.T. Road, Kalina,
Mumbai 400 098, Board: (91-22) 4009 4400.
Email: research@edelcap.com
Vikas Khemani
Head Institutional Equities
vikas.khemani@edelcap.com
+91 22 2286 4206
Nischal Maheshwari
Co-Head Institutional Equities & Head Research
nischal.maheshwari@edelcap.com
+91 22 6623 3411
Distribution of Ratings / Market Cap

Edelweiss Research Coverage Universe
Rating Distribution*
Buy
Hold
Reduce
Total
119
47
15
184
* 3 stocks under review
Market Cap (INR)
> 50bn
Between 10bn and 50 bn
< 10bn
111
57
16
Access the entire repository of Edelweiss Research on www.edelresearch.com

This document has been prepared by Edelweiss Securities Limited (Edelweiss). Edelweiss, its holding company and associate companies are a full service, integrated investment banking, portfolio management and
brokerage group. Our research analysts and sales persons provide important input into our investment banking activities. This document does not constitute an offer or solicitation for the purchase or sale of any
financial instrument or as an official confirmation of any transaction. The information contained herein is from publicly available data or other sources believed to be reliable, but we do not represent that it is accurate
or complete and it should not be relied on as such. Edelweiss or any of its affiliates/ group companies shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent
error in the information contained in this report. This document is provided for assistance only and is not intended to be and must not alone be taken as the basis for an investment decision. The user assumes the
entire risk of any use made of this information. Each recipient of this document should make such investigation as it deems necessary to arrive at an independent evaluation of an investment in the securities of companies
referred to in this document (including the merits and risks involved), and should consult his own advisors to determine the merits and risks of such investment. The investment discussed or views expressed may not
be suitable for all investors. We and our affiliates, group companies, officers, directors, and employees may: (a) from time to time, have long or short positions in, and buy or sell the securities thereof, of company
(ies) mentioned herein or (b) be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as advisor or lender/borrower to such company (ies) or have other potential
conflict of interest with respect to any recommendation and related information and opinions. This information is strictly confidential and is being furnished to you solely for your information. This information should
not be reproduced or redistributed or passed on directly or indirectly in any form to any other person or published, copied, in whole or in part, for any purpose. This report is not directed or intended for distribution
to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation
or which would subject Edelweiss and affiliates/ group companies to any registration or licensing requirements within such jurisdiction. The distribution of this document in certain jurisdictions may be restricted by
law, and persons in whose possession this document comes, should inform themselves about and observe, any such restrictions. The information given in this document is as of the date of this report and there can
be no assurance that future results or events will be consistent with this information. This information is subject to change without any prior notice. Edelweiss reserves the right to make modifications and alterations
to this statement as may be required from time to time. However, Edelweiss is under no obligation to update or keep the information current. Nevertheless, Edelweiss is committed to providing independent and
transparent recommendation to its client and would be happy to provide any information in response to specific client queries. Neither Edelweiss nor any of its affiliates, group companies, directors, employees, agents
or representatives shall be liable for any damages whether direct, indirect, special or consequential including lost revenue or lost profits that may arise from or in connection with the use of the information. Past
performance is not necessarily a guide to future performance. The disclosures of interest statements incorporated in this document are provided solely to enhance the transparency and should not be treated as
endorsement of the views expressed in the report. Edelweiss Securities Limited generally prohibits its analysts, persons reporting to analysts and their family members from maintaining a financial interest in the
securities or derivatives of any companies that the analysts cover. The analyst for this report certifies that all of the views expressed in this report accurately reflect his or her personal views about the subject company
or companies and its or their securities, and no part of his or her compensation was, is or will be, directly or indirectly related to specific recommendations or views expressed in this report. Analyst holding in the
stock: no.
For recipients in the United States: This report was prepared by Edelweiss Securities, which is not a FINRA member nor a broker-dealer registered with the SEC. US persons receiving this research and wishing to
effect any transactions in any security discussed in the report should contact an SEC-registered broker-dealer. In order to conduct business with Institutional Investors based in the U.S., Edelweiss Securities has entered
into a chaperoning agreement with a U.S. registered broker-dealer, Marco Polo Securities Inc. ("Marco Polo").
Copyright 2009 Edelweiss Research (Edelweiss Securities Ltd). All rights reserved
102
Edelweiss
Securities Limited
Limited

India Post Conference Notes Day 1 Feb 12 EDEL

Enviado por

Dados do documento

Descrição original:

Direitos autorais

Formatos disponíveis

Compartilhar este documento

Compartilhar ou incorporar documento

Opções de compartilhamento

Você considera este documento útil?

Este conteúdo é inapropriado?

Direitos autorais:

Formatos disponíveis

India Post Conference Notes Day 1 Feb 12 EDEL

Enviado por

Direitos autorais:

Formatos disponíveis

7th & 8th February, 2012

The Trident, Bandra Kurla Complex, Mumbai

Post Conference Notes - Day 1

Profile of Participating Companies

Profile of Participating Companies

KEC International ....................................................................................................................................................................................... 60

MARKET DATA (R : AJPH.BO, B: AJP IN)

52-week range (INR)

Share in issue (mn)

M cap (INR bn/USD mn)

Avg. Daily Vol. BSE/NSE (000) : 85.4

Share Holding Pattern (%)

MFs, FIs & Banks

* Promoters pledged shares

Relative Performance (%)

Revenues (INR mn)

Edelweiss Research is also available on www.edelresearch.com,

Edelweiss Securities Limited

Post Conference Notes - Day 1

Income from operations

Common size metrics as % of net revenues

Growth metrics (%)

Cash flow statement

ROAE (%) (on adjusted profits) 17.6

Banking and Financial Services

Rating Relative to Sector

Risk Rating Relative to Sector Medium

MARKET DATA (R : AXBK.BO, B: AXSB IN)

52-week range (INR)

Share in issue (mn)

M cap (INR bn/USD mn)

Avg. Daily Vol. BSE/NSE (000) : 2,171.0

Share Holding Pattern (%)

MFs, FIs & Banks

* Promoters pledged shares

PRICE Performance (%)

Edelweiss Research is also available on www.edelresearch.com,

Edelweiss Securities Limited

Post Conference Notes - Day 1

Growth metrics (%)

Operating ratios (%)

ROA decomposition (%)

Engineering and Capital Goods

Rating Relative to Sector

Risk Rating Relative to Sector Medium

52-week range (INR)

Share in issue (mn)

M cap (INR bn/USD mn)

Avg. Daily Vol. BSE/NSE (000) : 133.5

Share Holding Pattern (%)

MFs, FIs & Banks

* Promoters pledged shares

PRICE Performance (%)

Intense competition in the consumer durable segment can squeeze margins.

Edelweiss Research is also available on www.edelresearch.com,

Edelweiss Securities Limited

Post Conference Notes - Day 1

Income from operations

Common size metrics as % of net revenues

Growth metrics (%)

Cash flow statement

Metals & Mining

Phase III 2.9mtpa expansion on track for completion by October 2012