Max-Kotak

8/10/2019 Max-Kotak

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For Private Circulation Only. FOR IMPORTANT INFORMATION ABOUT KOTAK SECURITIES’ RATING SYSTEM AND OTHER DISCLOSURES. REFER TO THE END OF THIS MATERIAL.

Contents

Special Reports

Initiating CoverageMax India: Diversified but best bet in life insurance space

Daily Alerts

Company alerts

Infosys: Solid progress on metrics important for turnaround

Axis Bank: A steady performer

INDIA DAILYDecember 5, 2014

India 4-Dec 1-day 1-mo 3-mo

Sensex 28,563 0.4 2.3 5.7

Nifty 8,564 0.3 2.7 5.9

Global/Regional indices

Dow Jones 17,900 (0.1) 2.4 4.5

Nasdaq Composite 4,769 (0.1) 3.2 4.1

FTSE 6,679 (0.6) 2.1 (2.6)

Nikkei 17,813 (0.4) 5.2 13.7

Hang Seng 23,833 1.7 0.6 (5.6)

KOSPI 1,984 (0.1) 2.7 (3.2)

Value traded India

Cash (NSE+BSE) 223 220 204

Derivatives (NSE) 1,382 1,334 1,645

Deri. open interest 2,034 1,892 1,805

Forex/money market

Change, basis points

4-Dec 1-day 1-mo 3-mo

Rs/US$ 61.7 4 25 143

10yr govt bond, % 8.1 2 (24) (63)

Net investment (US mn)

3-Dec MTD CYTD

FIIs 66 151 16,430

MFs 42 47 2,756

Top movers

Change, %

Best performers 4-Dec 1-day 1-mo 3-mo

AL IN Equity 54.4 (1.2) 16.4 41.3

LICHF IN Equity 430.9 (1.0) 15.3 34.8

Z IN Equity 374.7 (0.5) 5.6 33.3

KKC IN Equity 916.2 2.5 24.1 30.6

IIB IN Equity 784.5 1.1 8.6 27.9

Worst performers

JSP IN Equity 152.8 (0.6) (6.0) (34.8)

NMDC IN Equity 139.8 1.2 (12.3) (24.8)

GMRI IN Equity 19.3 1.6 (14.4) (21.6)

CAIR IN Equity 262.2 (0.5) (5.1) (21.0)

UT IN Equity 18.5 (1.1) (18.0) (20.0)

8/10/2019 Max-Kotak


For Private Circulation Only. FOR IMPORTANT INFORMATION ABOUT KOTAK SECURITIES’ RATING SYSTEM AND OTHER DISCLOSURES, REFER TO THE END OF THIS MATERIAL.

Valuation: insurance and healthcare to drive value

Max Life Insurance (74% of SOTP) and Max Healthcare (14% of SOTP) are the main value

drivers. Max Life will add ` 296 /share and ` 353 /share of Max India, based on the appraisal

value framework, in March 2015E and March 2016E respectively. We value the life insurance

business at 2X EV assuming NBAP margin of 11% and 23X NBM. We value Max Healthcare at

13X EV/EBITDA.

Max Life: well-placed even as industry limps to growth

We believe control over expense overruns and strong (80%+) persistency will drive RoEV of

16-18% for Max Life. Its strong distribution platform, due to an efficient agency force and large

banking partner (Axis Bank), drove 400 bps market share gain over FY2010-14. We hence find

limited downside to our moderate (12%) premium growth forecast. A mature traditional

business will drive stable earnings in the medium term. NBAP margins (13.4% reported in

FY2014) have limited downside, in our view; higher non-participating policies increase upside

risk.

Max Healthcare: focus on returns

Max India has been investing in new hospitals in Mohali, Bhatinda, Delhi and Dehradun.

However, with the investment phase now behind it, we expect 20% topline growth, driven by

640 bps expansion in EBITDA margins to 14.5% over FY2014-17E as the focus shifts from

investments towards efficiencies and returns. This will be driven by an increase in operational

beds and better utilization.

Risks: heavy dependence on bank partner, weakness in life insurance, investment in initiatives

(1) Heavy dependence on its banking partner (over 50% share in new business in FY2014) in

life insurance, (2) sustained weakness in the life insurance industry, leading to subdued APE

growth and expense overruns, (3) large investments in Max India’s new initiatives and (4) high

promoter pledges are areas of stock sensitivity, in our view.

Max India (MAX) Banks/Financial Institutions

Diversified but best bet in life insurance space. Max Life (74% of the value in MaxIndia) will drive superior returns on embedded value or RoEV (16-18%) due to a strong

agency force, banking partner, high persistency and mature traditional business. MaxHealthcare’s shifting focus to profitability from investment offers earnings visibility. Other businesses may stay in the investing phase in the near term and will be a drag on earnings

and profitability. We initiate coverage with an ADD rating and target price of ` 450.

DD

DECEMBER 05, 2014

INITIATING COVERAGE

Coverage view: Attractive

Price ( ` ): 400

Target price ( ` ): 450

BSE-30: 28,563

Max India

Stock data Forecasts/Valuations 2014 2015E 2016E

52-week range (Rs) (high,low) EPS (Rs) 5.2 7.8 10.5

Market Cap. (Rs bn) EPS growth (%) (82.3) 48.1 35.9

Shareholding pattern (%) P/E (X) 76.3 51.5 37.9

Promoters 40.5 Sales (Rs bn) 116.3 139.3 157.5

F IIs 27.4 Net profits (Rs bn) 1.4 2.1 2.8

MFs 11.2 EBITDA (Rs bn) 5.1 6.8 7.9

Price performance (%) 1M 3M 12M EV/EBITDA (X) 21.1 15.7 13.5

Absolute 9.6 18.2 90.1 ROE (%) 4.6 6.3 7.3

Rel. to BSE-30 6.9 12.1 37.8 Div. Yield (%) 0.9 1.3 1.8

Company data and v aluation summary

443-177

106.6

8/10/2019 Max-Kotak


Max India Banks/Financial Institutions

KOTAK INSTITUTIONAL EQUITIES RESEARCH 3

Exhibit 1: Insurance and healthcare to drive valueSOTP-based valuation of Max India, March fiscal year-ends, 2016-17E

.

Source: Kotak Institutional Equities estimates

Value for Max India

(Rs bn) Shareholding (Rs bn) Value per share (Rs)

2016E 2017E (%) 2016E 2017E 2016E 2017E Average Comments

Max Life 109 131 72 79 94 296 353 324 2X embedded valueMax Healthcare 35 46 46 16 21 60 79 69 13X EV/EBITDA

Max Bupa 10 10 74 7 7 27 27 27 Gross capital commitment

Max Speciality Films 4 5 100 4 5 17 18 17 8X EV/EBITDA

Antara 2 2 100 2 2 8 8 8 Book value

Total 108 129 407 485 446

Valuation

8/10/2019 Max-Kotak



Renew the core, innovate in new businesses—the overriding theme at Infosys’ analyst meet

Infosys provided further insights into the duality of business, i.e. renew the core and innovate in

new businesses. At the heart of this approach is to run with a dual mandate of client

requirement, i.e. efficiency and newer service delivery models for savings in traditional areas

that can be used to fund new initiatives for clients. We find Infosys’ approach credible as it

rightly places emphasis on digital/new technology initiatives without losing sight of traditional

services. Infosys emphasized that traditional services will be renewed using automation, AI and

design thinking. Infosys provided fascinating case studies using the new approach. Infosys

indicated that these are critical steps for a next-generation IT services company that can deliver

revenue growth of 15-18% and EBIT margin of 25-28%.

Infosys is making good progress on metrics we closely track to assess turnaround

Infosys has taken encouraging steps, in our oft-highlighted areas, important for a turnaround—

(1) investments in S&M and sales effectiveness measures, (2) reduction in attrition and

(3) growth in high-potential IMS and BPO. Successful implementation of the three factors will

partly translate into progression of clients across various size buckets, the fourth important

measure for a turnaround. Infosys has hired 207 people in sales and moved 150 people fromdelivery to account management roles. The company has spent aggressively in sales training,

used consultants for enhancing proposal quality and made several interventions to retain sales

talent, all of which are important to improve sales effectiveness. The company is now more

flexible in pricing and open to different deal structures in large deals, especially in IMS. Its

headcount in IMS has increased by about 30% in the past two quarters.

Financial implications of new strategy in April 2015; we believe it will not be disruptive

Management will communicate short-term financial targets resulting from the new strategy in

April 2015. We believe that Infosys has sufficient growth and cost-optimization levers to fund this

without being disruptive in margins. KIE economist has revised FY2015-17E Re/USD rate to 61-65

from 61-63 earlier. This results in 0.5-5.2% EPS upgrade for FY2015-17E. Roll over to September2016E earnings combined with EPS upgrade results in 11% revision in TP to ` 2,350. ADD.

Infosys (INFO) Technology

Solid progress on metrics important for turnaround. The encompassing theme atInfosys’ analyst meet was ‘renew the core (traditional services) and innovate in new

businesses’. Achieving the strategic roadmap will require investments, specifics of whichand associated impact on margins will be shared in April 2015. We picked upencouraging progress on key metrics important for growth acceleration. We incorporate

KIE economist’s revised Re/USD rate, resulting in 1-5% EPS increase for FY2015-17E.

TP increases to ` 2,350 due to rollover to September 2016 earnings and EPS upgrade.

DD

DECEMBER 05, 2014

UPDATE


Price ( ` ): 2,102

Target price ( ` ): 2,350

BSE-30: 28,563

Infosys


52-week range (Rs) (high,low ) EPS (Rs) 95.1 108.1 125.7

Market Cap. (Rs bn) EPS growth (%) 15.3 13.7 16.3


Promoters 15.9 Sales (Rs bn) 501.3 541.1 626.8

FIIs 42.7 Net profits (Rs bn) 108.7 123.5 143.6

MFs 4.8 EBITDA (Rs bn) 136.3 152.5 181.9

Price performance (%) 1M 3M 12M EV/EBITDA (X) 15.8 13.8 11.3

Absolute 2.9 13.3 24.9 ROE (%) 26.3 25.6 25.4

Rel. to BSE-30 0.4 7.5 (9.4) Div. Yield (%) 1.5 1.7 1.9


2,201-1,440

2,413.9

8/10/2019 Max-Kotak


Infosys Technology


Acquisitions will be an important element of Infosys’ strategy

Dr. Sikka indicated that Infosys will go for acquisitions that will help it acquire newer

skills/technologies. The company is interested in acquiring small innovative tech companies

in areas such as AI, automation, Internet of Things and design thinking. Infosys is averse to

acquiring any company with similar skill sets, just for scale. Infosys is not intending to

acquire any IT services company focused on legacy technologies. Besides newertechnologies, the company is open to acquisitions to gain entry in new markets or

strengthen its position in select markets.

3QFY15 could be weak

The management indicated that the growth in retail, telecom and manufacturing verticals

may be soft in 3Q due to seasonality and weak spending trends. BFSI was one of the few

segments in which the company is confident of a strong growth.

Strong progress on metrics for turnaround

UB Pravin Rao’s presentation gave us comfort on our oft-highlighted metrics to assess

turnaround of Infosys.

Significant steps taken to revitalize sales engine. Infosys has taken several measures

to strengthen its sales capabilities over past two quarters. The company has hired 207

sales people and moved 150 people from deliver into account management roles. S&M

headcount has effectively increased by ~20% in the past two quarters. This also shows in

spike in S&M spend in the past two quarters. It has simplified performance evaluation—

Infosys now evaluates performance of sales personnel based on 2-3 relevant and

objective metrics such as revenues, large deal wins and opportunities brought to table, as

against 8-10 metrics used earlier. Fixed compensation and average bonus payouts have

been increased. Over 200 sales employees have been promoted in 2HFY15. Lastly, it is

improved sales training to increase effectiveness of sales force. We believe these

measures will help revitalize the sales force and translate into acceleration of growth.

Several measures to improve employee morale and address attrition. Infosys has

reduced variable component and increased fixed component of employee compensation.

The company has also increased variable payouts (100% in 2QFY15). Besides this, it is

actively engaging with employees by conducting employee satisfaction survey and

responding to key issues of employees. These steps should help Infosys alleviate attrition

in the coming quarters. We expect Infosys’ attrition to trend down rapidly from 2QFY15,

quarterly annualized attrition of 24.8%.

Flexibility in pricing and willingness to enter into different deal structures. Infosys

has often let go of deals due to its overarching focus on profitability and unwillingness toenter into complex deal structures. This is more common in commodity service offering

such as IMS. The company indicated that it has reduced pricing and is open to different

deal structures to win large deals in IMS space. This move can improve the deal win ratio,

eventually driving higher growth. Headcount in infra management services has increased

30% in the past two quarters.

8/10/2019 Max-Kotak


Technology Infosys

6 KOTAK INSTITUTIONAL EQUITIES RESEARCH

Digital technologies – gaining scale

Infosys highlighted several successful case studies in new technology areas such as digital,

cloud services, analytics and platform & solutions. The company has 16,000+ employees

spanning 1,000+ engagements across 240+ clients. The management indicated that the size

of projects in these technologies is small but there is opportunity to scale up by executing

several small projects. Infosys’ digital practice has scaled up to US$20 -30 mn/year in some ofits client accounts. The pricing models in these areas are still evolving and vary based on the

nature of projects.

A successful case study of ‘renew the core’ in product engineering services

Infosys’ product engineering and design team has integrated software and hardware to

design oil drills having embedded sensors. These drills are linked to next-generation PLM. In

a digital oil field, these drills provide data with the help of embedded sensors. This data is

used for digital oilfield modeling and simulation for determination of the remaining useful

life of oilfield. This is just one of the several successful case studies Infosys management

shared. Besides this, the company has successfully used (1) predictive analytics to prevent

transaction failures in financial services space and (2) predictive maintenance of devices inmanufacturing and mining industries. Infosys also showcased several of its interesting

projects in SMAC technologies.

Exhibit 1: Key changes to estimates, March fiscal year-ends, 2015E-17E (Rs mn)

Source: Kotak Institutional Equities estimates

2015E 2016E 2017E 2015E 2016E 2017E 2015E 2016E 2017E

Revenues 541,062 626,840 730,905 537,846 610,081 689,480 0.6 2.7 6.0 EBITDA 152,494 181,878 213,049 151,682 177,010 197,772 0.5 2.7 7.7

Depreciation (11,900) (15,892) (18,620) (11,900) (15,891) (18,617) — 0.0 0.0

EBIT 140,594 165,986 194,429 139,782 161,119 179,155 0.6 3.0 8.5

Net Profit 123,505 143,632 169,027 122,928 140,036 160,708 0.5 2.6 5.2

EPS (Rs/ share) 108.1 125.7 147.9 107.6 122.5 140.6 0.5 2.6 5.2

Revenues (US$ mn) 8,858 9,950 11,245 8,880 10,001 11,303 (0.2) (0.5) (0.5)

Revenue growth (%) 7.4 12.3 13.0 7.6 12.6 13.0

Billing Rates (US$/ manmonth)Onsite 13,330 13,319 13,319 13,364 13,393 13,393 (0.3) (0.6) (0.6)

Offshore 4,490 4,456 4,456 4,502 4,481 4,481 (0.3) (0.6) (0.6)

Margins (%)

EBITDA 28.2 29.0 29.1 28.2 29.0 28.7

EBIT 26.0 26.5 26.6 26.0 26.4 26.0

Rs/ US$ rate 61.1 63.0 65.0 60.6 61.0 61.0 0.8 3.3 6.6

New Old Change (%)

8/10/2019 Max-Kotak


Infosys Technology


Exhibit 2: Infosys attrition likely to trend down in the coming quarters

Source: Company, Kotak Institutional Equities

Exhibit 3: S&M spending likely to increase further


Exhibit 4: Infosys: key client metrics


10

14

18

22

26

30

J u n - 0 8

S e p - 0 8

D e c - 0 8

M a r - 0 9

J u n - 0 9

S e p - 0 9

D e c - 0 9

M a r - 1 0

J u n - 1 0

S e p - 1 0

D e c - 1 0

M a r - 1 1

J u n - 1 1

S e p - 1 1

D e c - 1 1

M a r - 1 2

J u n - 1 2

S e p - 1 2

D e c - 1 2

M a r - 1 3

J u n - 1 3

S e p - 1 3

D e c - 1 3

M a r - 1 4

J u n - 1 4

S e p - 1 4

Quarterly annualized attrition (%)

3

4

5

6

7

M a r - 0 9

S e p - 0 9

M a r - 1 0

S e p - 1 0

M a r - 1 1

S e p - 1 1

M a r - 1 2

S e p - 1 2

M a r - 1 3

S e p - 1 3

M a r - 1 4

S e p - 1 4

S&M spending as % of revenues

Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14

Client metrics

Number of active clients 711 715 776 798 836 873 888 890 910 912

New clients added in the period 51 39 89 56 66 68 54 50 61 49

Repeat business % 99.1 98.2 97.5 96.5 99.0 98.3 97.3 96.3 99.0 98.1

Million $ clients 403 413 419 448 466 469 495 501 520 526

5 Million $ clients 199 205 209 213 215 221 226 232 235 237

25 Million $ clients 74 73 71 69 73 77 77 78 78 83

50 Million $ clients 41 40 40 40 41 40 41 42 43 43

75 Million $ clients 19 21 21 23 24 24 25 24 24 27

100 Million $ clients 12 11 12 12 15 15 15 13 12 13

8/10/2019 Max-Kotak


Technology Infosys


Exhibit 5: Infosys: key quarterly metrics


J un-12 Sep-12 Dec-12 Mar-13 J un-13 Sep-13 Dec-13 M ar-14 J un-14 Sep-14

Rev enues (US mn) 1,752 1,797 1,911 1,938 1,991 2,066 2,100 2,092 2,133 2,201

Revenues (Rs mn) 96,160 98,580 104,240 104,540 112,670 129,650 130,260 128,750 127,700 133,420

Exchange rate (Re/US$) 54.9 54.9 54.5 53.9 56.6 62.8 62.0 61.5 59.9 60.6

Revenue by v ert icals (%)

Insurance, Banking and F inancial serv ices 34.3 33.7 33.7 33.9 33.7 33.4 33.5 33.5 33.4 32.8

Manufacturing 22.0 22.1 21.7 22.2 22.5 23.2 22.8 23.0 23.2 23.3

Retail 16.9 17.0 16.0 15.4 15.8 15.7 16.0 15.5 15.8 15.3

Telecom 10.1 9.9 9.6 9.3 8.5 8.3 7.9 8.6 8.7 8.9

Energy and Utilities 4.6 5.3 5.4 5.2 4.9 5.1 5.2 5.3 5.1 5.5

Transportation & Logistics 1.4 1.7 1.8 1.8 1.8 1.8 1.6 1.7 1.5 1.5

Serv ices 5.1 5.3 6.3 6.7 7.1 6.7 7.0 6.6 6.5 6.6

Others 5.6 5.0 5.5 5.5 5.7 5.8 6.0 5.8 5.8 6.1

Revenue by serv ice offer ings (%)

ADM 38.0 38.4 35.8 35.4 35.0 35.1 35.1 34.9 34.5 35.0

- Application development 17.1 17.0 15.8 15.5 15.7 16.0 15.9 15.5 15.8 16.1

- Application maintenance 20.9 21.4 20.0 19.9 19.3 19.1 19.2 19.4 18.7 18.9

Business Process Management 6.2 6.0 6.5 6.5 6.3 6.3 6.4 6.7 6.5 6.3

Consult ing and Package Implementat ion 29.9 30.0 32.6 32.7 33.6 33.3 33.4 32.5 32.3 32.4

Infrastructure Management 6.6 6.8 6.9 7.2 7.0 7.2 6.9 7.2 7.9 7.9

Product Engineering Serv ices 3.5 3.4 3.2 3.2 3.2 3.3 3.2 3.4 3.4 3.4 Testing Serv ices 8.3 8.6 8.4 8.3 8.4 8.4 8.7 9.2 9.5 9.4

Others 3.0 3.0 2.7 2.7 2.8 2.7 2.5 2.6 2.7 2.7

Product revenues 4.5 3.8 3.9 4.0 3.7 3.7 3.8 3.5 3.2 2.9

Revenue by geography (%)

North America 64.1 63.9 61.0 60.2 61.4 61.5 60.0 59.8 60.8 60.8

Europe 21.4 21.9 24.0 25.0 23.6 24.0 24.9 25.2 24.5 24.7

India 2.0 1.6 2.2 2.4 2.6 2.4 2.6 2.6 2.4 2.2

ROW 12.5 12.6 12.8 12.4 12.4 12.1 12.5 12.4 12.3 12.3

Revenue by project ty pe (%)

F ixed price 39.9 42.5 43.4 42.5 42.1 42.1 42.9 43.5 42.2 43.2

Time and Material 60.1 57.5 56.6 57.5 57.9 57.9 57.1 56.5 57.8 56.8

Client metrics

Top client contribution to revenues (%) 4.1 4.0 3.6 3.6 3.9 3.9 3.7 3.6 3.4 3.4

Top 5 c lient contribut ion to revenues (%) 16.2 16.0 14.6 14.7 14.9 15.0 14.1 14.1 13.7 13.6

Top 10 client contribution to revenues (%) 25.3 25.4 23.9 24.0 24.0 24.5 23.5 23.4 22.9 22.9

Number of active clients 711 715 776 798 836 873 888 890 910 912 New clients added in the period 51 39 89 56 66 68 54 50 61 49

Repeat business % 99.1 98.2 97.5 96.5 99.0 98.3 97.3 96.3 99.0 98.1

Million $ clients 403 413 419 448 466 469 495 501 520 526

5 Million $ clients 199 205 209 213 215 221 226 232 235 237

25 Million $ clients 74 73 71 69 73 77 77 78 78 83

50 Million $ clients 41 40 40 40 41 40 41 42 43 43

75 Million $ clients 19 21 21 23 24 24 25 24 24 27

100 Million $ clients 12 11 12 12 15 15 15 13 12 13

Per-capita product iv i ty ( IT Serv ices and Consult ing) - Reported (US )

Onsite 149,250 149,800 155,326 152,478 151,674 153,818 157,210 157,551 157,436 161,529

Offshore 54,110 53,388 54,618 53,815 52,600 53,499 54,666 54,315 54,201 54,039

Blended 82,542 82,370 85,385 84,826 84,270 84,806 85,367 84,691 84,362 84,868

Currency-w ise rev enues (%)

USD 72.3 71.9 69.8 68.6 69.3 69.5 68.5 67.8 68.0 68.3

GBP 6.9 6.3 6.2 6.1 5.6 5.9 6.0 6.0 5.8 5.9

Euro 6.7 8.3 9.6 10.4 9.8 10.1 10.4 10.8 10.6 10.4

AUD 8.4 8.3 8.3 8.1 7.9 7.6 7.9 8.1 8.2 8.2

Util ization measures (IT Serv ices and Consulting)

Including trainees 64.7 67.5 67.1 68.5 70.7 73.1 72.5 72.9 74.8 75.2

Excluding trainees 69.5 71.6 70.6 71.4 74.3 77.5 76.9 76.7 80.1 82.3

Employee metrics

Total Employ ees (Consolidated) 151,151 153,761 155,629 156,688 157,263 160,227 158,404 160,405 161,284 165,411

S/W professionals (IT Services & Consulting) 121,245 123,076 123,796 123,666 122,687 125,019 123,657 125,344 125,182 128,374

Trainees 4,773 4,655 3,897 3,977 5,581 14,760 5,658 7,104 8,439 9,782

Infosys BPO 22,321 22,918 23,714 24,634 26,207 26,834 26,475 27,157 28,192 29,067

Gross additions 9,236 10,420 8,390 8,990 10,138 12,168 6,682 10,997 11,506 14,255

Net additions 1,157 2,610 1,868 1,059 575 2,964 (1,823) 2,001 879 4,127

Laterals hired 5,233 3,656 4,351 3,545 3,008 3,806 3,333 2,100 3,954 4,774

LT M A t t rit ion 14.9 15.0 15.1 16.3 16.9 17.3 18.1 18.7 19.5 20.1

A t t rit ion quart erly annualized 21.5 20.5 16.9 20.3 24.4 23.2 21.4 22.6 26.4 24.8

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8/10/2019 Max-Kotak



A sneak peek into Axis Securities: the engine of growth for Axis Bank

Our analysis of Axis Securities offers some pretty good insights into the bank’s retail operations.

This subsidiary originates retail loans, distributes third-party products and helps the bank in its

resource management. From a retail loan standpoint, this subsidiary is extremely critical as it

contributes ~60% of the overall disbursements in key retail products for the bank. This would

include conversions of leads coming from different channels as well as self-origination. We haveseen different models adopted but discussions with various banks highlight that productivity

and quality are better through internal sources.

We are not yet out of the woods: a bit of caution still warranted

We continue to exercise caution on the impairment ratios of the bank. We still factor credit

costs at 90-100 bps in the medium term. While activities by various agencies are showing signs

of improvement at the margin, we still think that positive surprise on credit costs is stil l a few

quarters away. With a steady increase in the portfolio of loans starting their repayment cycle

and the regulatory forbearance on restructuring removed from FY2016, we believe that high

credit costs would be needed.

Relatively well-placed among peers; maintain ADD

We maintain our positive view as we believe the shift to retail business now appears to be

complete and the loan portfolios of the frontline private banks are mostly similar. This should

significantly ease concern over the long term. On the other hand, the liability franchise is

impressive with CASA ratio at a healthy ~45% levels, which can support low-risk growth,

especially in retail without materially deteriorating NIM from current levels. Tier-1 ratio is

comfortable at 13%. The bank is well-positioned to capture growth across various segments.

Despite the recent outperformance, we find valuations comfortable and value the bank at 2.3X

book and 14X EPS (September 2016) for RoEs in the range of 17% and ~15% earnings growth.

We maintain ADD (TP changed at ` 525 from ` 430 earlier) factoring moderate earnings

changes, roll forward of our TP and changes to the long-term assumptions on earnings growth

for the bank. It still remains an interesting idea among frontline banks, in our view.

Axis Bank (AXSB) Banks/Financial Institutions

A steady performer. Our analysis of Axis Securities shows that a large share ofdisbursements in retail (~60%) is originated from this subsidiary. Growth should remain

buoyant in the retail portfolio in the medium term as the bank is building scale withdistribution of retail assets increasing across its branches. Despite the recentoutperformance, we continue to like the transformation that we are seeing in the bank,

which initially was reflected in liabilities and now moving towards loans. Maintain ADD

with TP increased to ` 525 (from ` 430 earlier).

DD

DECEMBER 05, 2014

UPDATE


Price ( ` ): 500

Target price ( ` ): 525

BSE-30: 28,563

QUICK NUMBERS

Axis Securities

contributes 60% ofdisbursements for

the bank

Axis Bank


52-week range (Rs) (high,low) EPS (Rs) 26.5 29.4 35.0

Market Cap. (Rs bn) EPS growth (%) 19.6 11.2 19.1


Promoters 28.9 NII (Rs bn) 119.5 139.5 161.4

FIIs 47.5 Net profits (Rs bn) 62.2 69.1 82.3

MFs 4.6 BVPS 159.9 183.0 210.6

Price performance (%) 1M 3M 12M P/B (X) 3.1 2.7 2.4

Absolute 12.3 20.1 109.9 ROE (%) 17.4 16.9 17.5

Rel. to BSE-30 9.5 13.9 52.2 Div. Yield (%) 0.8 1.0 1.2


503-217

1,180.8

8/10/2019 Max-Kotak


Axis Bank Banks/Financial Institutions


Axis Securities: the engine of growth

This is one of the subsidiaries of the bank that is primarily into providing resource

management, marketing of third-party financial products and retail broking (online and

offline). The exhibit below shows that the contribution of this subsidiary to the overall retail

business for the bank is very critical. As of FY2014, this subsidiary originated 60% of the

overall disbursements in the retail portfolio. It does appear based on historical trends thatthe bank has been able to scale up this business as growth in disbursements has exceeded

40% CAGR over the past three years. We are not able to give the financial implication of

this model as this segment (origination and resource management) has a very high cost

structure of ~90%. Also, it is a bit challenging to understand the trends as this business has

been housed in different companies in the past three years. Prior to FY2012, it was with Axis

Sales and Securities, which was subsequently transferred to Axis Capital and which has now

been transferred to Axis Securities. The shift in business across companies was mainly an

after-effect of the acquisition of Enam’s various companies.

Banks follow multiple models for originating retail loans, which could include the following:

(1) direct walk-in or website referrals, (2) branch/internal referrals that are converted by bank

employees, (3) direct sales team (DST) through a bank’s own subsidiary and/or (4) directsales agent (DSA). There would be an overlap where lead origination is at the branch but the

conversion is done by the DST, which is Axis Securities.

There are various arguments for banks to use a multi-model approach towards retail

origination but based on our discussions with many retail banks, we note that most of them

follow a similar approach, though the scale of contribution could differ depending on the

comfort levels of each bank towards a specific model. However, our discussion with most

banks did highlight that banks give greater focus to their direct sales team as there is better

productivity and cost efficiencies as compared to other channels. We understand that DSA

models have undergone a huge change in recent years, especially after the retail slowdown

post FY2009. There are fewer but larger players today but it is expensive though it can help

build scale much faster. However, a big drawback is that these disbursements may not besticky as they work actively in refinancing their customers with a different bank if there is a

good value proposition for the customer.

Exhibit 1: Axis Securities originates ~60% of the retail loans for Axis BankDisbursements across loan products, March fiscal year-ends, 2013-14


Retail growth to remain strong; to lead overall growth in the medium term

We expect Axis Bank to grow its loan book by 17-18% CAGR for FY2014-16E primarily on

the back of strong growth in the retail portfolio. While we have seen a moderate recovery in

the corporate loan portfolio at 13% yoy, we believe that a large share of growth is more

driven by advantage that the bank has the appetite to pick up credit through refinancing as

the demand for fresh corporate loan is yet to show any strong signs of change. The bankhas broadly maintained its exposure in the infrastructure sector at similar levels in the past

three years – a trend that is not likely to change in the short term but could decline as the

bank is not actively focusing on this portfolio given the lack of fresh demand. As there are

lower concerns in the SME portfolio, we don’t see any sharp slowdown in this portfolio.

2012 2013 Growth

Contribution

to total

disbursements

Total

disbursement

s in FY2013 2014 Growth

Contribution to

total

disbursements

Total

disbursements

in FY2014

(Rs mn) (Rs mn) (%) (%) (Rs mn) (Rs mn) (%) (%) (Rs mn)

Home loans 53,840 77,340 43.6 54.0 143,222 88,720 14.7 55.0 161,309

LAP 6,440 13,750 113.5 57.0 24,123 21,360 55.3 58.0 36,828

Personal loans 10,320 18,600 80.2 62.0 30,000 26,440 42.2 69.0 38,319

Auto loans 23,820 93.0 25,613 26,380 10.7 93.0 28,366 Sche matic loan fo r SME 5,040 15,230 202.2 27,980 83.7

Credit cards (#) 160,000 302,660 89.2 449,148 48.4

Notes:

(a) The b usiness have been in multiple subsidiaries in the past. Axis Securities and Sales Ltd, Axis Capital Ltd and Axis Securities Ltd

8/10/2019 Max-Kotak


Banks/Financial Institutions Axis Bank


Exhibit 2: Share of lending to retail has been rising in recent years, which is likely to be NIM dilutiveBreak-up of loans, March fiscal year-ends, 2010-2QFY15 (%)

Notes:(a) There has been a change in the definition of retail and SME loans in FY2015. Exposure in agriculture hasbeen divided into SME and retail. Under retail, this has been included under others.


Exhibit 3: Axis Bank’s exposure to stressed sectors has been gradually decliningBreak-up of top exposure (funded), March fiscal year-ends, 2010-2QFY15 (%)


As highlighted in the previous section, we note that the bank has been able to build a

strong distribution platform for its retail assets. We note that the retail loans currently are in

a build-up stage and hence the bank is likely to see acceleration in loan growth. Over the

next year we should see the growth slowing down from current levels of 27% yoy. Also,

Axis Bank has access to one of the lowest costs of funds and this helps the bank as it would

remain extremely competitive from a pricing perspective.

The only risk is the ability of the bank to build scale efficiently. The origination costs in select

short-duration products can be fairly prohibitive to make the exposure profitable as

distribution and its associated costs of various retail asset products can be quite varied. For

example, unsecured loans would be primarily distributed for internal customers while the

bank may not take the same view while disbursing housing loans. There are different models

on originating housing loans, which could include a combination of DSA (refinance for

existing loans), direct sales teams that work independently or work closely with the builders

as the bank’s turnaround time is faster where loans are of pre-approved properties and

originate loans from internal customers. Auto loans, on the other hand, may require

origination teams working closely at dealer showrooms.

2 2 2 2 2 3 2 4 Q FY 5 2Q FY 5

Re tail lo an s 20 .0 19 .5 22.1 27.4 30 .7 39 .6 38 .9

H ous ing 14.1 13.3 16 .6 19 .7 22.1 24.1 23.8

Auto 2.6 2.1 2.9 3.8 3.7 4.0 3.5Personal 1.9 2.7 1.3 1.9 2.5 3.6 3.5

Oth ers 1.3 1.4 1.3 1.9 2.5 7.9 8.2

Non retail loans 80.0 80.5 77.9 72.6 69.3 60.4 61.1

SME 17.5 15.0 14.0 15.2 15.4 16.3 15.6

Corporate 50 .3 53.3 53.6 49.9 44.4 44.2 45.5

Agriculture 12.2 12.2 10.2 7.5 7.8 — —

20 10 20 11 20 12 20 13 20 14 1Q FY15 2Q FY15

Chemicals — 3.3 1.8 1.6 — — —

Financial companies 11.0 14.3 12.7 7.0 4.6 4.3 4.5

Real Estate 5.4 — 3.2 2.6 3.3 3.3 3.3

Retail trade 6.5 4.5 3.2 2.9 3.6 3.6 3.6

Food processing 6.4 4.4 4.1 4.1 3.6 3.7 3.5

Metals and metal products 6.0 7.4 4.3 4.2 4.6 4.6 5.2

Power generation and distribution 5.1 5.7 4.7 4.9 5.2 5.2 5.2

Infrastructure 8.2 8.2 6.8 7.6 7.4 7.6 7.8

Telecom — 5.0 — — 1.4 — —

Shipping and logistics — 2.9 2.5 2.3 2.3 2.3 2.1

Eng ineerin g an d electronics 2.9 3.7 3.4 3.5 3.3 3.3 3.3

Petrochemicals and petroleum products 2.7 — — — — 0.5 0.5

To ta l o f 10 to p s ecto r s 5 8 7 5 9 3 46 6 40 7 39 4 38 4 39 0

8/10/2019 Max-Kotak




Exhibit 4: Axis Bank is a formidable player in the mortgage segmentShare of Axis Bank in housing loans, March fiscal year-ends (%)

Source: Company, Kotak Institutional Equities estimates

The question of profitability is still unclear

The management in the previous call indicated that the yields in the retail loan portfolio are

currently at 11.3-11.4%, which is comparatively higher as compared to the corporate loan

portfolio, which is currently at 10.4%. Hence, the shift to retail should be margin accretive.

However, this would an incorrect way of analysis as we need to measure the impact on

yields in the corporate portfolio in two different segments between domestic and foreign

currency loans. We note that the foreign currency loans, ~15% of the loans or 30-35% of

the corporate loan portfolio, has an NIM of 1.7% of loans and this implies that the yield in

the domestic portfolio is probably higher than the yields in the retail portfolio. Hence, the

yields would be under pressure if the bank is shifting the mix of domestic corporate loan

portfolio with retail loans. However, we have not seen this change impacting NIM so far,making it a bit challenging to understand the impact on yields and NIMs.

On the funding costs side, the recent decline in interest rates is not likely to be a big positive

for Axis Bank. The bank has seen a fairly stable cost of funds in recent years, primarily as the

bank’s engine for originating retail deposits has done an admirable work and the bank has a

strong CASA ratio, which has kept funding costs at relatively low levels.

On the operating cost side, the initial costs are likely to be higher for Axis Bank as the

origination costs are to be charged at the time of disbursements though the bank would

benefit partially as collection costs would be low in the initial phase of loan growth.

However, a broad sense would be to keep operating costs higher in the initial leg of growth.

2 4 2 5 2 6 2 7 2 8 2 9 2 2 2 2 2 3 2 4 QF Y 5 2QF Y 5

Key public banks

BoB 2.1 1.8 1.8 1.9 2.0 2.1 2.4 2.3 2.2 2.1 2.2 2.2 2.2

Canara Bank 2.1 2.2 2.2 2.1 1.8 2.0 2.3 2.8 2.5 1.7 2.2 2.2 2.1PNB 2.3 2.1 2.8 3.1 2.1 2.2 2.4 2.2 2.0 1.9 1.9 1.9 1.9

SBI 12.2 13.0 12.6 12.2 12.5 13.9 16.4 16.7 16.2 15.9 16.0 15.7 15.6

Key private banks

Axis Bank 0.2 0.6 1.1 1.5 2.1 2.7 3.4 3.5 4.4 5.2 5.8 6.1 6.0

HDFC Bank — — — — — 1.3 2.0 2.1 2.2 2.2 2.2 2.1 2.1

ICICI Bank 11.9 14.8 18.0 20.5 18.5 14.8 10.9 10.1 7.7 7.7 8.1 8.1 8.3

Kotak Bank — — — 0.6 0.7 0.8 1.1 1.3 1.3 1.4 1.4 1.3 1.4

All the banks listed above 30.8 34.4 38.5 41.3 39.2 38.9 39.8 39.8 37.2 36.8 38.5 38.4 38.3

Other banks 33.3 35.2 34.8 32.6 31.7 32.7 29.4 27.0 26.2 24.0 23.1 23.0 22.7

Total banks (from RBI) 64.1 69.6 73.3 73.9 70.9 71.6 69.2 66.9 63.4 60.8 61.6 61.5 61.0

Key NBFCs

HDFC Ltd. (a) 20.0 18.7 17.8 18.1 20.2 14.1 14.1 13.7 14.0 14.8 15.2 15.1 15.3

LIC Housing Finance (a) 6.6 6.1 5.6 5.4 5.7 6.5 7.8 8.7 9.4 10.0 10.1 9.9 10.0

Dewan Housing Finance 0.8 0.8 0.9 1.0 1.1 1.5 2.0 2.6 4.0 4.5 4.6 4.7 4.7

Indiabulls (a) — — — — 2.0 1.6 1.8 2.6 3.1 3.3 3.3 3.3 3.4

REPCO — — — — — — 0.0 0.0 0.4 0.5 0.5 0.5 0.6

All NBFCs listed above 27.4 25.6 24.3 24.6 29.0 23.6 25.7 27.6 30.9 33.1 33.8 33.5 33.9

Other NBFCs 8.5 4.8 2.4 1.5 0.1 4.7 5.1 5.5 5.6 6.1 4.6 5.0 5.1

Total NBF Cs 35.9 30.4 26.7 26.1 29.1 28.4 30.8 33.1 36.6 39.2 38.4 38.5 39.0

Top 5 players 51.0 53.2 55.1 57.7 59.1 51.8 52.5 52.7 51.7 53.6 55.2 55.0 55.3

Notes:

(a) HDFC, LICHF - indiv idual loans only; Indiabulls - mortagage loans.

(b) F irst Blue Housing Finance merged w ith Dewan Housing in FY2013, F Y2012 numbers reinstated for the merger.

(c) Loans of other NBFCs assumed at 15% of loans of NBFCs listed above for 1Q-2QF Y15, in line with historical trends

8/10/2019 Max-Kotak




Expect greater productivity to drive retail fee income growth though overall fee

income likely to remain muted

We broadly build non-interest income to grow at 10% CAGR for FY2014-16E primarily as

we are not too convinced that the fee income would grow at a pace higher than loan

growth in the medium term. The contribution from treasury business should be stronger

considering that Axis Bank has a strong desk in this business. The demand from corporateloans remains muted though economic activity could result in higher share of transaction-

related fee business. It is important to note that the fee income business is steadily seeing

higher contribution from non-lending activities, especially as the fee income in the retail

business has picked up pace, especially as the contribution from distribution of third party

products, liability fee income as well as payments related business is witnessing faster

growth.

Exhibit 5: Contribution on retail banking to fee income increased in recent quartersBreak-up of fee income, March fiscal year-ends, 2010-2QFY15 (%)


Exhibit 6: Axis Bank’s share of fee income to assets has been declining in recent years

Fee income to assets, March fiscal year-ends, 2010-17E (%)


Still building conservative estimates on LLP as we are not yet out of the woods

We maintain our conservative outlook on credit costs at 90-100 bps over the next two years.

The management has not changed their estimates on fresh impairments for FY2015. We are

broadly building slippages and fresh restructuring at 1.7% of loans each in the medium term

and expect gross NPLs to increase ~40 bps to 1.7% of loans in this period.

The bank has a large exposure in the infrastructure vertical, especially in the power portfolio,

where the risk of impairment is still high. While we are seeing progress towards resolution of

various bottlenecks, we still would want to maintain a cautious outlook as there is still a long

period when the serviceability is fully addressed. Also, note that the restructuring window

closes from the next financial year, which would imply that the banks have to make higher

provisions when they slip into NPLs else risk a steep fall in provision coverage ratio. In the

power portfolio, ~50% of the loans have now started to service their loans as the assets

have achieved DCCO (Date of Commencement of Commercial Operations) with a larger

share expected to be operational in FY2015-16E.

20 10 20 11 20 12 20 13 20 14 1Q FY15 2Q FY15

Corporate banking/credit 28.0 31.8 33.7 30.7 26.8 25.0 28.8

Business Banking 12.0 9.4 8.5 7.7 7.3 10.0 8.0

Capital markets 1.6 1.7 1.1 1.0 — — —

Re ta il b an k in g 27 3 24 5 25 1 29 4 28 8 37 1 37 8

Agri & SME banking 7.3 5.9 5.8 6.1 6.4 3.6 6.0

Treas ury and deb t capita l mkts 17.5 18.6 19.1 20.2 20.0 24.0 19.0

Others 6.3 8.1 6.6 5.0 10.8 0.4 0.3

Total (Rs bn) 31 41 51 58 67 14 16

% of average assets 1.9 2.0 1.9 1.9 1.8 1.5 1.7

2010 2011 2012 2013 2014 2015E 2016E 2017E

A x is Bank 1 6 1 6 1 7 1 7 1 5 1 4 1 3 1 3

HDFC Bank 1.5 1.5 1.5 1.5 1.4 1.3 1.2 1.2

ICICI Bank 1.4 1.5 1.3 1.2 1.2 1.1 1.2 1.2

IndusInd Bank 0.7 0.7 1.4 1.5 1.5 1.4 1.4 1.4

Yes Bank 1.3 1.3 1.2 1.3 1.3 1.2 1.1 1.1

8/10/2019 Max-Kotak




Exhibit 7: We expect gross NPLs to rise in the medium termGross and net NPL ratios, March fiscal year-ends, 2010-17E (%)


Exhibit 8: Loan-loss provisions could ease by FY2017Slippages and LLP, March fiscal year-ends, 2010-17E (%)


Operating costs have scope for improvement

We broadly expect operating cost growth at <15% CAGR over the next few years. We think

the bank would shift focus from expansion to improving productivity as the bank is well

present across most regions. Our discussion with the bank does indicate that the changing

behavior patterns, especially on the way they interact with the bank through alternate

mediums, is forcing banks to take a serious relook at infrastructure expansion. However, at

this stage, the growth would be driven by the requirements of the local business areas.

We expect operating expenses to assets to decline 20 bps to 2.1-2.2% levels while staff

costs to assets to remain lower than most of the other banks. We note that the manpower

management is also done at the subsidiary level and hence the contribution of staff costs

could be relatively lower as compared to other banks.

Exhibit 9: Operating costs like to declineCost structure for Axis Bank, March fiscal year-ends, 2010-14 (%)


1.21.1 1.0

1.21.3

1.71.7 1.7

0.40.3 0.3

0.40.4 0.4 0.4 0.5

-

0.4

0.8

1.2

1.6

2.0

2 0 1 0

2 0 1 1

2 0 1 2

2 0 1 3

2 0 1 4

2 0 1 5 E

2 0 1 6 E

2 0 1 7 E

Gross NPL Net NPL

2.2

1.41.3

1.21.3

1.7 1.71.6

1.5

0.9

0.7

1.0 1.0 1.00.9

0.8

-

0.4

0.8

1.2

1.6

2.0

2.4

2 0 1 0

2 0 1 1

2 0 1 2

2 0 1 3

2 0 1 4

2 0 1 5 E

2 0 1 6 E

2 0 1 7 E

Sl ippages Loan loss provisions

Opex to total assets Employee costs to total assets

2011 2012 2013 2014 2015E 2016E 2017E 2011 2012 2013 2014 2015E 2016E 2017E

HDFC Bank 3.1 3.0 3.0 2.6 2.5 2.4 2.3 1.1 1.1 1.1 0.9 0.9 0.9 0.9

IndusInd Bank 2.5 2.6 2.7 2.7 2.8 2.8 2.8 0.9 0.9 1.0 1.0 1.0 1.0 1.0 ICICI Bank 1.7 1.8 1.8 1.8 1.8 1.8 1.8 0.7 0.8 0.8 0.7 0.8 0.8 0.8

Axis Bank 2.3 2.3 2.2 2.2 2.2 2.1 2.0 0.8 0.8 0.8 0.7 0.7 0.7 0.6

Yes Bank 1.5 1.4 1.5 1.7 1.8 1.8 1.8 0.8 0.7 0.8 0.8 0.8 0.8 0.8

8/10/2019 Max-Kotak




Exhibit 10: Cost-income ratio could decline as growth slowsCost-income ratio, March fiscal year-ends, 2011-17E (%)


Exhibit 11: Axis Bank: estimate changesMarch fiscal year-ends, 2015-17E ( ` mn)


2011 2012 2013 2014 2015E 2016E 2017E

HDFC Bank 48.1 49.7 49.6 45.6 44.1 42.4 41.3

IndusInd Bank 48.2 49.4 48.8 45.7 47.3 47.3 47.1

ICICI Bank 42.2 43.0 40.6 38.3 37.8 37.3 36.8

Axis Bank 42.7 44.7 42.6 40.8 41.7 40.9 40.8

Yes Bank 36.3 37.7 38.4 39.4 40.7 41.6 42.1

New estimates % change

2015E 2016E 2017E 2015E 2016E 2017E 2015E 2016E 2017E

Net interest income 139,507 161,370 178,935 137,903 159,529 176,644 1.2 1.2 1.3NIM (%) 3.5 3.4 3.3 3.4 3.4 3.2

Customer assets 2,954 3,437 3,968 2,954 3,437 3,968 — — —

Loan loss provisions 25,090 26,630 27,726 25,090 28,109 31,192 — (5.3) (11.1)

Other income 79,555 90,165 101,828 82,156 93,100 104,139 (3.2) (3.2) (2.2)

Fee income 54 ,477 61,014 68,336 54 ,477 61,014 68,336 — — —

Treasury income 9,000 11,000 13,000 9,000 11,000 12,000 — — 8.3

Operating expenses 91,440 102,845 114,509 91,440 104,338 117,892 — (1.4) (2.9)

Employee expenses 29,856 32,175 34,196 29,856 33,668 37,580 — (4.4) (9.0)

PBT 102,432 121,961 138,428 103,429 120,082 131,598 (1.0) 1.6 5.2

Tax 33,284 39,630 44,981 33,608 39,020 42,762 (1.0) 1.6 5.2

Net profit 69,147 82,331 93,447 69,820 81,063 88,837 (1.0) 1.6 5.2

Old estimates

8/10/2019 Max-Kotak




Exhibit 12: Axis Bank trading at 2.0X one-year forward bookOne-year forward trading PER and PBR, March fiscal year-ends, 2007-14 (X)

Source: Company, Bloomberg, Kotak Institutional Equities estimates

Exhibit 13: Axis Bank trading at premium to peersAxis Bank trading premium to peers, 2007-14 (X)


0

1

2

3

4

5

0

5

10

15

20

25

D e c - 0 6

D e c - 0 7

D e c - 0 8

D e c - 0 9

D e c - 1 0

D e c - 1 1

D e c - 1 2

D e c - 1 3

D e c - 1 4

Rolling PER (X) (LHS) Roll ing PBR (X) (RHS )

0.5

0.7

0.9

1.1

1.3

1.5

D e c - 0 6

D e c - 0 7

D e c - 0 8

D e c - 0 9

D e c - 1 0

D e c - 1 1

D e c - 1 2

D e c - 1 3

D e c - 1 4

8/10/2019 Max-Kotak




Exhibit 14: Axis Bank – key financial ratios and growth ratesMarch fiscal year-ends, 2012-17E (%)


2012 2013 2014 2015E 2016E 2017E

Growth rates (%)

Net loan 19.2 16.0 16.8 18.1 17.8 16.6 Total Asset 17.7 19.2 12.5 16.5 16.4 15.5

Deposits 16.3 14.8 11.2 17.0 16.7 15.5

Current 7.7 21.6 0.8 28.3 16.7 15.5

Savings 26.5 23.4 21.9 23.2 17.3 16.0

Fixed 15.4 9.2 9.9 10.3 16.3 15.2

Net interest income 22.2 20.6 23.6 16.7 15.7 10.9

Loan loss provisions (3.2) 66.8 19.1 14.8 6.1 4.1

Total other income 17.0 20.9 13.0 7.4 13.3 12.9

Net fee income 29.3 15.7 7.3 1.0 12.0 12.0

Net capital gains (80.1) 705.0 (44.1) 174.7 22.2 18.2

Net exchange gains 19.6 (1.5) 128.5 (5.0) 13.0 13.0

Operating expenses 25.7 15.1 14.3 15.7 12.5 11.3

Employee expenses 28.9 14.3 9.4 14.8 7.8 6.3

Key ratios (%)

Yield on average earning assets 8.6 9.0 8.7 8.7 8.4 8.1

Yield on average loans 9.9 10.5 10.3 10.1 9.8 9.5

Yield on average investments 7.8 7.5 7.4 7.5 7.2 6.9

Average cost of funds 5.9 6.3 5.9 5.8 5.5 5.4

Interest on deposits 6.0 6.4 5.8 5.6 5.4 5.3

Difference 2.7 2.7 2.8 2.9 2.9 2.7

Net interest income/earning assets 3.1 3.2 3.4 3.5 3.4 3.3

New provisions/average net loans 0.7 1.0 1.0 1.0 0.9 0.8

Interest income/total income 59.7 59.6 61.7 63.7 64.2 63.7

Fee income/total income 32.3 31.0 27.9 24.9 24.3 24.3

Operating expenses/total income 44.7 42.6 40.8 41.7 40.9 40.8

Tax rate 32.5 31.4 33.5 32.5 32.5 32.5

Dividend payout ratio 15.6 16.3 15.1 17.1 17.1 17.1

Share of deposits

Current 18.1 19.1 17.3 19.0 19.0 19.0

Fixed 58.5 55.6 55.0 51.8 51.7 51.5

Savings 23.5 25.2 27.7 29.2 29.3 29.5

Loans-to-deposit ratio 77.1 78.0 81.9 82.7 83.5 84.3

Equity/assets (EoY) 8.0 9.7 10.0 9.8 9.7 9.6

Dupont analysis (%)

Net interest income 3.0 3.1 3.3 3.4 3.3 3.2

Loan loss provisions 0.4 0.6 0.6 0.6 0.6 0.5

Net other income 2.1 2.1 2.0 1.9 1.9 1.8

Operating expenses 2.3 2.2 2.2 2.2 2.1 2.0

Invt. depreciation — (—) (—) — — —

(1- tax rate) 67.5 68.6 66.5 67.5 67.5 67.5

ROA 1.6 1.7 1.7 1.7 1.7 1.7

Average assets/average equity 12.6 11.2 10.1 10.1 10.3 10.4

RoE 20.3 18.5 17.4 16.9 17.5 17.3

8/10/2019 Max-Kotak




Exhibit 15: Axis Bank - income statement and balance sheetMarch fiscal year-ends, 2012-17E ( ` mn)


2012 2013 2014 2015E 2016E 2017E

Income statement (Rs mn)

Total interest income 219,946 271,826 306,412 349,128 393,661 441,401

Loans 153,794 191,662 219,504 254,063 289,824 327,940

Investments 63,943 77,470 83,431 90,964 99,747 109,131

Total interest expense 139,769 175,163 186,895 209,621 232,291 262,466

Deposits from customers 121,836 150,155 154,589 171,980 193,665 218,046

Net interest income 80,177 96,663 119,516 139,507 161,370 178,935

Loan loss provisions 10,996 18,340 21,850 25,090 26,630 27,726

Net interest income (after prov.) 69,182 78,323 97,666 114,417 134,740 151,209

Other income 54,202 65,511 74,052 79,555 90,165 101,828

Net fee income 43,417 50,251 53,938 54,477 61,014 68,336

Net capital gains 728 5,863 3,276 9,000 11,000 13,000

Net exchange gains 6,740 6,641 15,177 14,418 16,292 18,410

Operating expenses 60,071 69,142 79,008 91,440 102,845 114,509

Employee expenses 20,802 23,770 26,013 29,856 32,175 34,196

Depreciation on investments 581 (1,039) (1,003) — — —

Other provisions (150) 200 223 100 100 100

Pretax income 62,882 75,531 93,490 102,432 121,961 138,428

Tax provisions 20,460 23,736 31,314 33,284 39,630 44,981

Net Profit 42,422 51,794 62,177 69,147 82,331 93,447

% growth 25.2 22.1 20.0 11.2 19.1 13.5

PBT+provisions-treasury 73,580 87,168 111,285 118,622 137,690 153,254

% growth 30.3 12.1 29.5 3.6 18.8 13.0

Balance sheet (Rs mn)

Cash and bank balance 139,339 204,350 282,387 335,088 389,861 452,233

Cash 35,957 40,539 41,646 49,976 59,971 71,965

Balance with RBI 71,072 107,382 128,767 150,744 168,648 186,777

Balance with banks 3,516 3,354 2,218 2,662 3,194 3,833

Net value of investments 931,921 1,137,375 1,135,484 1,293,597 1,481,039 1,686,766

Govt. and other securities 584,162 722,499 690,967 851,306 1,037,786 1,242,311

Shares 7,400 7,549 6,118 6,118 6,118 6,118

Debentures and bonds 231,508 260,744 236,366 236,366 236,366 236,366

Net loans and advances 1,697,595 1,969,660 2,300,668 2,717,412 3,200,271 3,731,290

Fixed assets 22,593 23,556 24,102 26,617 28,412 30,263

Net owned assets 22,593 23,556 24,102 26,617 28,412 30,263

Other assets 64,829 70,666 89,808 93,545 97,437 101,492

Total assets 2,856,278 3,405,607 3,832,449 4,466,259 5,197,020 6,002,043

Deposits 2,201,043 2,526,136 2,809,446 3,286,747 3,834,255 4,428,296

Borrowings and bills payable 371,570 474,799 538,691 619,495 712,419 819,282

Other liabilities 55,580 73,593 102,107 122,528 147,034 176,441

Total liabilities 2,628,193 3,074,528 3,450,244 4,028,771 4,693,708 5,424,019

Paid-up capital 4,132 4,680 4,698 4,698 4,698 4,698

Reserves & surplus 223,953 326,399 377,506 432,790 498,614 573,325

Total shareholders' equity 228,085 331,079 382,205 437,489 503,312 578,024

8/10/2019 Max-Kotak


IndiaDailySummary-December

IndiaDailySummary-

December5,2014

Kotak Institutional Equities: Valuation summary of KIE Universe stocks

Target O/S

Price (Rs) price Upside Mkt cap. shares EPS (Rs) EPS growth (%) PER (X) EV/EBITDA (X) ADVT-3mo

Company Rating 4-Dec-14 (Rs) (%) (Rs mn) (US$ mn) (mn) 2015E 2016E 2017E 2015E 2016E 2017E 2015E 2016E 2017E 2015E 2016E 2017E 2015E 2016E 2017E 2015E 2016E 2017E 2015E 2016E 2017E (US$ mn)

utomo i l e s

Amara Raja Batteries SELL 743 550 (26.0) 126,931 2,050 171 24.4 29.9 35.4 13.6 22.5 18.4 30.4 24.8 21.0 18.4 15.3 13.2 7.5 6.1 5.0 0.7 0.8 1.0 27.4 27.2 26.3 4.0

Apollo Tyres BUY 237 250 5.3 120,842 1,952 509 22.1 23.6 24.8 4.2 6.4 5.4 10.7 10.1 9.6 6.0 6.1 5.9 2.1 1.8 1.5 0.4 0.4 0.4 22.0 19.3 17.1 21.8

Ashok Leyland SELL 54 40 (26.5) 154,816 2,501 2,848 0.4 1.9 2.7 121.2 401.7 42.0 143.1 28.5 20.1 21.0 13.4 10.9 2.9 2.8 2.6 — 1.6 2.2 2.2 10.0 13.5 14.6

Bajaj Auto ADD 2,625 2,800 6.7 7 59,617 12,270 289 108.2 134.2 154.0 (3.4) 24.0 14.8 24.3 19.6 17.0 17.5 15.4 13.7 6.7 5.7 4.8 1.6 2.0 2.3 30.0 31.6 30.7 12.3

Bharat Forge SELL 991 630 (36.4) 230,746 3,727 237 29.5 35.9 42.2 40.5 21.7 17.3 33.6 27.6 23.5 17.4 14.9 13.0 7.3 6.0 5.0 0.6 0.7 0.8 23.7 23.9 23.4 17.0

Eicher Motors SELL 15,432 9,0 00 (41.7) 4 18,281 6,757 27 238.0 3 80 .8 4 83. 2 63.3 60.0 26.9 64.8 40.5 31.9 36.4 23.6 18.8 15.9 11.8 8.8 0.2 0.2 0.2 27.5 33.4 31.4 13.6

Exide Industries REDUCE 171 160 (6.6) 145,648 2,353 850 7.1 8.9 10.3 24.2 24.9 15.9 24.1 19.3 16.6 15.0 12.4 10.9 3.6 3.2 2.8 1.5 1.5 1.5 15.5 17.4 17.9 7.8

Hero Motocorp BUY 3,218 3,350 4.1 6 42,594 10,380 200 148.4 19 5 .7 2 30 .8 40.6 31.9 17.9 21.7 16.4 13.9 16.8 12.8 11.2 9.4 7.7 6.3 2.3 3.0 3.6 47.7 51.5 49.6 34.0

Mahindra & Mahindra REDUCE 1,265 1,275 0.8 7 85,744 12,692 562 58.7 63.4 88.2 (14.3) 7.9 39.3 21.5 20.0 14.3 17.0 16.0 13.1 4.0 3.7 3.4 0.5 0.7 1.4 18.9 19.3 24.7 22.6

Maruti Suzuki BUY 3,407 3,700 8.6 1,029,141 16,624 302 115.7 172.4 232.6 25.6 49.0 35.0 29.4 19.8 14.6 17.0 12.3 9.4 4.4 3.8 3.2 0.8 1.3 1.7 15.7 20.6 23.7 16.7

Motherson Sumi Systems REDUCE 426 375 (12.0) 375,566 6,067 882 9.7 15.5 22.6 (4.2) 59.2 45.7 43.8 27.5 18.9 14.2 10.4 7.6 10.0 7.4 5.3 0.6 1.1 1.6 25.6 30.9 32.6 20.4

Tata Motors BUY 528 680 28.8 1,589,665 25,678 3,218 51.9 69.1 77.8 11.6 33.1 12.5 10.2 7.6 6.8 4.9 4.0 3.5 2.1 1.6 1.3 — — — 22.6 23.8 21.4 46.9

WABCO India ADD 4,535 4,900 8.0 86,021 1,390 19 72.7 130.4 159.9 25.3 79.5 22.6 62.4 34.8 28.4 38.1 22.1 18.0 9.9 8.2 6.8 0.2 0.7 0.9 17.0 25.9 26.3 0.7

Automobiles Attractive 6,465,612 104,440 12.8 32.5 19.6 18.9 14.3 11.9 10.0 8.1 7.0 3.8 3.2 2.6 0.7 1.0 1.3 20.2 22.1 21.8 232.4

Banks/Financial Institutions

Axis Bank ADD 500 525 5.0 1,180,769 19,073 2,349 29.4 35.0 39.8 11.2 19.1 13.5 17.0 14.3 12.6 — — —

2.7 2.3 2.0 1.0 1.2 1.4 16.9 17.5 17.3 28.1 Bajaj Finserv BUY 1,261 1,260 (0.1) 200,665 3,241 159 102.2 112.6 127.8 6.1 10.2 13.4 12.3 11.2 9.9 — — — 2.0 1.7 1.5 1.1 1.1 1.1 16.9 16.5 16.1 1.6

Bank of Baroda ADD 1,085 1,050 (3.2) 466,001 7,527 431 111.0 133.9 167.4 5.3 20.7 25.0 9.8 8.1 6.5 — — — 1.2 1.1 0.9 2.1 2.5 3.1 13.0 14.1 15.8 19.0

Bank of India ADD 298 305 2.4 1 91,266 3,090 643 58.6 65.7 89.9 38.0 12.1 36.8 5.1 4.5 3.3 — — — 0.6 0.5 0.5 2.3 2.6 3.5 13.5 13.5 16.2 16.5

Cholamandalam ADD 467 500 7.1 6 7,038 1,083 143 27.3 36.2 44.0 6.6 32.6 21.6 17.1 12.9 10.6 — — — 2.1 1.9 1.6 0.9 1.2 1.5 15.8 16.8 17.8 0.3

City Union Bank ADD 93 105 13.1 55,167 891 543 7.1 7.9 9.0 10.7 11.9 13.4 13.1 11.7 10.3 — — — 1.9 1.6 1.4 1.2 1.3 1.5 17.6 16.1 16.0 1.2

DCB Bank BUY 107 105 (2.1) 30,200 488 250 6.3 7.3 8.7 4.9 15.5 18.8 16.9 14.6 12.3 — — — 1.7 1.5 1.3 — — — 13.6 12.6 13.2 1.8

Federal Bank BUY 147 145 (1.6) 1 26,008 2,035 855 12.0 14.0 15.9 22.5 16.5 13.7 12.3 10.5 9.3 — — — 1.6 1.5 1.3 1.7 1.9 2.2 14.0 14.6 14.8 10.3

HDFC ADD 1,113 1,210 8.7 1,749,116 28,254 1,561 41.3 48.1 56.9 18.4 16.4 18.4 26.9 23.1 19.5 — — — 6.1 5.4 4.8 1.5 1.8 2.1 21.8 22.6 23.7 41.8

HDFC Bank ADD 941 1,000 6.2 2,274,570 36,741 2,399 43.1 51.7 60.4 22.0 19.8 16.9 21.8 18.2 15.6 — — — 4.4 3.7 3.1 0.9 1.1 1.2 21.8 22.0 21.7 30.6

ICICI Bank BUY 362 360 (0.6) 2,097,021 33,873 5,775 18.9 21.7 25.1 11.2 15.0 15.5 19.2 16.7 14.4 — — — 2.6 2.4 2.1 1.6 1.8 2.1 14.2 14.9 15.5 64.6

IDFC BUY 161 200 24.0 256,561 4,144 1,512 10.1 9.1 11.9 (16.0) (10.3) 31.8 16.0 17.8 13.5 — — — 1.4 1.3 1.2 1.2 0.5 0.6 10.0 8.1 9.8 17.4

IIFL Holdings BUY 182 175 (3.8) 55,584 898 296 14.0 16.5 19.2 49.3 17.5 16.7 13.0 11.1 9.5 — — — 2.2 1.9 1.7 2.0 2.3 2.7 18.5 19.1 19.6 0.7

IndusInd Bank ADD 784 800 2.0 414,474 6,695 526 33.7 39.4 46.2 25.9 16.9 17.1 23.3 19.9 17.0 — — — 3.9 3.4 2.9 0.6 0.7 0.8 19.1 18.8 18.8 10.8

J&K Bank REDUCE 141 135 (4.2) 6 8,305 1,103 485 17.9 20.6 22.1 (26.7) 15.2 7.5 7.9 6.8 6.4 — — — 1.1 1.0 0.9 2.6 3.0 3.2 14.3 14.8 14.2 2.3

Karur Vysya Bank BUY 562 620 10.3 67,955 1,098 107 48.0 65.0 77.1 19.8 35.4 18.6 11.7 8.6 7.3 — — — 1.4 1.2 1.1 2.1 2.9 3.4 15.1 16.9 17.7 1.5

L&T Finance Holdings SELL 72 60 (17.1) 124,403 2,009 1,718 4.9 5.4 5.9 42.8 8.4 10.8 14.6 13.5 12.2 — — — 2.0 1.8 1.6 2.2 1.2 1.2 14.0 14.1 14.1 5.6

LIC Housing Finance ADD 431 450 4.4 217,459 3,513 505 30.8 36.3 43.1 17.9 17.9 18.9 14.0 11.9 10.0 — — — 2.7 2.3 2.0 1.2 1.5 1.7 19.1 19.3 19.6 17.5

Magma Fincorp ADD 107 135 25.7 20,447 330 190 9.5 12.0 13.5 32.3 26.5 13.0 11.3 9.0 7.9 — — — 1.2 1.1 1.0 1.4 1.7 2.0 11.2 13.3 13.8 0.3

Mahindra & Mahindra Financial SELL 328 260 (20.8) 186,697 3,016 564 17.2 20.0 25.2 9.2 16.6 25.6 19.1 16.4 13.0 — — — 3.2 2.8 2.4 1.2 1.4 1.8 17.8 18.2 19.9 7.0

Max India ADD 400 450 12.5 1 06,570 1,721 266 7.8 10.5 13.9 48.1 35.9 31.9 51.5 37.9 28.7 — — — 3.0 2.6 2.2 1.3 1.8 2.4 6.3 7.3 8.2 2.2

Muthoot Finance BUY 195 235 20.4 77,487 1,252 372 18.3 22.5 27.7 (12.9) 23.1 23.2 10.7 8.7 7.0 — — — 1.4 1.3 1.1 2.8 3.5 4.3 15.4 16.4 18.1 0.8

Oriental Bank of Commerce ADD 317 300 (5.4) 9 5,082 1,536 300 42.5 51.4 61.5 11.8 20.9 19.8 7.5 6.2 5.2 — — — 0.7 0.6 0.6 2.7 3.2 3.9 9.2 10.3 11.4 9.8

PFC ADD 306 330 7.9 403,668 6,521 1,319 45.2 43.4 45.4 10.2 (4.1) 4.6 6.8 7.0 6.7 — — — 1.3 1.1 1.0 3.3 3.1 3.3 20.2 16.9 15.6 14.4

Punjab National Bank REDUCE 1,095 900 (17.8) 396,629 6,407 362 125.5 14 8. 0 1 74 .0 36.0 17.9 17.5 8.7 7.4 6.3 — — — 1.0 0.9 0.8 1.2 1.5 1.7 12.4 13.1 13.7 18.4

Rural Electrification Corp. ADD 338 350 3.7 333,267 5,383 987 55.1 54.0 55.4 16.1 (2.0) 2.6 6.1 6.3 6.1 — — — 1.3 1.1 1.0 3.2 3.4 3.5 23.7 19.6 17.5 14.1

Sh riram City Un io n Fin an ce REDUCE 1,6 97 1,550 (8.7) 111,841 1,807 59 89.7 113.9 131.8 4.1 26.9 15.8 18.9 14.9 12.9 — — — 2.4 2.1 1.8 0.6 0.7 0.9 16.6 16.5 16.6 0.7

Shriram Transport ADD 1,204 1,000 (16.9) 273,178 4,413 223 69.2 85.8 101.4 22.1 24.1 18.2 17.4 14.0 11.9 — — — 2.8 2.4 2.1 0.8 1.0 1.2 17.3 18.5 18.7 13.2

SKS Microfinance ADD 369 330 (10.6) 46,515 751 108 16.4 20.2 27.4 154.2 23.0 35.3 22.4 18.2 13.5 — — — 3.8 3.0 2.4 — — — 27.2 21.4 23.1 11.9

State Bank of India ADD 320 330 3.0 2 ,391,274 38,627 7,466 18.8 21.6 26.9 28.8 15.2 24.1 17.0 14.8 11.9 — — —

1.8 1.7 1.5 1.0 1.0 1.1 11.3 11.9 13.3 93.0

Union Bank ADD 226 220 (2.8) 143,909 2,325 630 40.5 46.1 52.8 51.6 13.6 14.7 5.6 4.9 4.3 — — — 0.7 0.6 0.6 2.7 3.0 3.5 14.1 14.2 14.5 16.8

YES Bank ADD 760 680 (10.5) 316,814 5,118 361 44.4 47.6 56.3 (1.1) 7.3 18.3 17.1 16.0 13.5 — — — 2.4 2.1 1.8 1.0 1.1 1.3 19.7 16.0 16.6 27.1

Banks/Financial Institutions Attractive 14,633,652 236,379 18.2 14.2 18.0 14.9 13.0 11.1 2.1 1.9 1.7 1.4 1.5 1.8 14.2 14.5 15.2 513.9

Dividend yield (%) RoE (%)Price/BV (X)


8/10/2019 Max-Kotak


IndiaDailySummary-December5,2014


Target O/S



m nt

ACC SELL 1,476 1,280 (13.3) 277,159 4,477 188 50.4 68.8 90.5 7.6 36.6 31.5 29.3 21.5 16.3 16.6 11.5 8.5 3.3 3.0 2.6 1.6 1.6 1.6 11.6 14.6 17.1 7.7

Ambuja Cements SELL 230 205 (10.9) 356,348 5,756 1,522 9.1 11.5 14.3 35.2 26.3 23.5 25.2 19.9 16.1 15.9 12.6 9.8 3.2 3.0 2.6 1.3 1.5 1.7 13.3 15.7 17.4 6.7

Grasim Industries ADD 3,474 3,590 3.3 319,069 5,154 92 203.9 260.2 355.0 (4.0) 27.6 36.4 17.0 13.3 9.8 5.9 4.2 2.7 1.4 1.3 1.1 1.1 1.1 1.1 8.4 9.9 12.2 4.5

India Cements REDUCE 93 100 7.3 28,629 462 307 2.8 6.2 12.8 224.0 126.9 104.4 33.9 14.9 7.3 8.1 6.7 5.4 0.7 0.7 0.7 2.9 2.9 2.9 2.2 5.0 9.8 5.4

Shree Cement SELL 9,032 6,400 (29.1) 314,648 5,083 35 255.1 374.3 480.5 8.1 46.7 28.4 35.4 24.1 18.8 17.7 13.3 10.7 5.9 4.9 3.9 0.2 0.2 0.2 18.0 22.1 23.1 2.3

UltraTech Cement SELL 2,465 2,000 (18.9) 6 76,303 10,924 274 81.6 103.4 141.7 9.2 26.7 37.1 30.2 23.8 17.4 16.3 12.0 9.1 3.5 3.1 2.7 0.4 0.4 0.4 12.4 14.0 16.6 10.1

Cement Cautious 1,972,156 31,856 11.4 31.7 33.9 26.6 20.2 15.1 12.6 9.3 7.0 2.8 2.5 2.2 0.9 0.9 0.9 10.5 12.5 14.6 36.7

Consumer products

Asian Paints SELL 792 605 (23.6) 7 59,397 12,267 959 16.0 18.7 21.7 25.3 16.4 16.3 49.3 42.4 36.5 31.2 26.5 22.7 15.7 13.3 11.2 0.8 1.0 1.2 34.7 34.0 33.4 17.6

Bajaj Corp. BUY 344 340 (1.3) 50,792 820 148 14.3 16.8 19.0 19.2 17.3 12.9 24.0 20.5 18.1 21.3 17.3 14.5 10.5 9.4 8.3 3.3 2.5 3.2 42.1 48.4 48.6 2.0

Britannia Industries BUY 1,834 1,875 2.2 219,992 3,554 120 47.7 57.2 67.8 44.5 20.0 18.6 38.5 32.1 27.0 24.7 20.4 17.1 17.2 13.0 10.1 0.8 1.0 1.3 55.0 46.2 42.1 3.7

Colgate-Palmolive (India) ADD 1,918 1,800 (6.1) 2 60,766 4,212 136 41.3 48.3 57.4 14.4 17.1 18.8 46.5 39.7 33.4 31.7 26.4 21.6 40.8 38.1 35.3 1.7 2.0 2.3 90.6 99.3 109.8 5.5

Dabur India ADD 245 245 0.0 430,221 6,949 1,744 6.1 7.3 8.4 17.2 20.0 15.4 40.2 33.5 29.0 31.7 26.5 22.5 13.0 10.7 8.9 1.0 1.1 1.3 35.7 35.0 33.4 6.2

Glaxo Smith Klin e Co nsumer REDUCE 5 ,8 80 5,300 (9.9) 247,293 3,995 42 138.1 156.2 180.9 (14.0) 13.2 15.8 42.6 37.6 32.5 31.5 27.0 22.5 11.5 9.9 8.6 0.9 1.0 1.3 29.3 28.3 28.2 1.2

Godrej Consumer Products REDUCE 962 880 (8.5) 327,337 5,288 340 25.3 30.2 35.2 13.3 19.3 16.7 38.0 31.8 27.3 25.5 21.2 17.8 7.4 6.5 5.6 0.7 0.8 1.0 21.1 21.7 22.0 2.6

Hindustan Unilever REDUCE 825 730 (11.5) 1,783,883 28,815 2,163 19.0 21.4 24.2 15.6 12.8 13.0 43.4 38.5 34.0 32.4 27.4 23.8 45.2 38.0 32.3 1.7 1.8 2.1 113.8 107.4 102.6 11.5 ITC ADD 383 395 3.1 3,060,133 49,431 8,016 12.2 14.1 16.3 14.1 15.6 15.3 31.4 27.2 23.6 20.7 17.5 14.8 10.5 9.3 8.3 1.9 2.2 2.5 31.8 33.0 36.3 37.9

Jubilant Foodworks SELL 1,390 1,050 (24.5) 9 1,123 1,472 66 18.0 25.8 36.2 17.4 43.2 40.3 77.2 53.9 38.4 35.2 25.2 18.2 13.7 10.9 8.6 — — 0.1 19.5 22.6 25.2 5.9

Jyothy Laboratories REDUCE 250 220 (12.1) 45,328 732 181 9.5 11.2 14.5 102.4 18.1 29.1 26.3 22.3 17.3 24.7 18.2 15.6 5.8 5.1 5.0 1.2 1.4 1.6 22.7 24.4 29.2 1.6

Marico BUY 329 350 6.4 212,173 3,427 645 9.2 11.5 13.3 16.2 25.7 15.7 35.9 28.5 24.7 23.8 18.8 16.0 12.0 9.4 7.6 0.8 1.0 1.2 37.8 37.0 34.0 3.5

Nestle India SELL 6,343 5,300 (16.4) 6 11,555 9,879 96 122.4 145.2 177.0 6.9 18.7 21.9 51.8 43.7 35.8 29.1 25.0 21.5 20.4 16.5 13.5 0.8 1.0 1.2 46.2 43.7 43.1 2.4

Page Industries SELL 10,138 7,500 (26.0) 1 13,083 1,827 11 1 8 0. 6 2 23 .2 273.6 31.0 23.6 22.6 56.1 45.4 37.0 35.2 28.6 23.3 28.8 21.3 15.6 0.7 0.8 0.8 59.2 54.0 48.6 1.7

Pidilite Industries BUY 479 455 (5.0) 245,437 3,965 513 11.1 13.7 16.7 24.5 24.0 21.3 43.2 34.8 28.7 29.2 23.0 18.6 10.7 9.1 7.7 0.7 1.0 1.3 26.7 28.2 29.0 2.6

Speciality Restaurants SELL 193 175 (9.1) 9,042 146 47 2.6 4.0 6.3 (34.8) 53.6 55.8 73.4 47.8 30.7 25.1 17.1 11.8 2.9 2.7 2.5 0.5 0.5 0.6 4.0 5.8 8.4 0.3

Tata Global Beverages REDUCE 163 155 (5.1) 101,046 1,632 618 6.4 7.5 8.7 16.2 18.2 14.8 25.6 21.7 18.9 13.1 11.5 10.0 1.7 1.6 1.5 1.4 1.5 1.8 6.7 7.6 8.4 8.4

Titan Company SELL 386 340 (11.8) 342,330 5,530 888 9.8 11.1 13.0 15.8 13.2 17.2 39.5 34.8 29.7 26.9 22.3 19.0 11.0 9.3 8.0 0.7 1.0 1.3 30.8 29.0 28.9 7.8

United Breweries SELL 834 650 (22.0) 2 20,395 3,560 264 10.1 13.6 17.4 18.1 34.0 28.7 82.4 61.5 47.8 33.8 28.2 23.5 11.9 10.3 8.7 0.2 0.2 0.3 15.0 17.9 19.7 2.7

United Spirits BUY 2,869 3,200 11.5 416,967 6,735 145 24.7 67.3 83.6 375.8 172.3 24.3 116.1 42.7 34.3 40.5 24.0 20.5 13.3 10.5 8.3 0.1 0.2 0.3 11.7 27.5 26.9 15.2

Consumer products Neutral 9,548,293 154,235 18.3 19.4 17.0 39.5 33.1 28.3 26.2 21.7 18.4 13.0 11.2 9.7 1.3 1.5 1.8 32.8 33.9 34.3 140.3

Energy

Aban Offshore RS 550 — — 31,279 505 57 99.6 1 0 6. 8 11 0. 5 18.8 7.2 3.5 5.5 5.2 5.0 6.8 6.3 6.0 0.6 0.5 0.5 1.3 1.1 1.1 12.3 11.4 10.7 14.9

Bharat Petroleum ADD 727 840 15.6 5 25,357 8,486 723 51.0 56.4 56.7 (9.1) 10.5 0.5 14.2 12.9 12.8 7.6 6.6 6.6 2.4 2.2 1.9 2.1 2.3 2.4 17.9 17.6 15.9 19.6

Cairn India REDUCE 262 275 4.9 491,487 7,939 1,875 47.9 38.5 31.3 (26.4) (19.8) (18.6) 5.5 6.8 8.4 4.0 4.5 4.2 0.8 0.8 0.7 4.7 4.6 4.6 15.2 11.4 8.8 12.0

Castrol India SELL 531 300 (43.5) 262,637 4,242 495 10.0 11.4 12.6 (0.2) 14.3 10.5 53.3 46.6 42.2 35.5 30.9 27.9 48.9 46.4 44.1 1.5 1.7 1.9 76.5 102.1 107.3 3.6

GAIL (India) ADD 471 560 19.0 597,136 9,646 1,268 33.7 39.1 44.2 3.3 15.9 13.1 14.0 12.1 10.7 9.9 8.0 6.8 2.0 1.8 1.7 2.2 2.9 3.3 15.1 16.0 16.5 12.1

GSPL ADD 109 105 (4.1) 61,601 995 563 7.5 8.7 10.0 0.9 15.5 15.3 14.6 12.6 10.9 6.8 6.0 5.2 1.7 1.5 1.4 1.4 2.4 3.7 12.1 12.7 13.6 2.5

Hindustan Petroleum REDUCE 583 540 (7.4) 197,403 3,189 339 49.6 57.5 58.6 (2.9) 15.8 2.0 11.7 10.1 9.9 10.1 7.9 6.8 1.2 1.1 1.1 2.6 3.0 3.0 10.8 11.7 11.1 19.8

Indian Oil Corporation ADD 347 400 15.3 842,500 13,609 2,428 25.2 34.4 37.8 4.3 36.3 10.0 13.8 10.1 9.2 9.0 6.2 5.0 1.2 1.1 1.0 2.6 3.4 3.7 9.0 11.3 11.5 9.3

Oil & Natural Gas Corporation ADD 371 420 13.3 3 ,172,376 51,244 8,556 32.8 41.0 45.4 5.8 24.9 10.7 11.3 9.0 8.2 5.0 4.0 3.5 1.7 1.5 1.4 3.1 4.0 4.4 15.5 17.6 17.7 32.5

Oil India BUY 586 700 19.4 352,476 5,694 601 55.5 70.0 74.9 12.0 26.0 7.0 10.6 8.4 7.8 6.9 5.2 4.9 1.6 1.4 1.3 3.8 4.8 5.1 15.5 17.9 17.4 4.4

Petronet LNG REDUCE 204 190 (7.0) 153,263 2,476 750 10.9 12.5 15.4 14.8 14.9 23.0 18.8 16.3 13.3 10.2 9.5 7.9 2.7 2.5 2.2 1.1 1.6 2.2 15.4 15.9 17.4 7.0

Reliance Industries ADD 959 1,100 14.8 2,815,981 45,487 3,232 72.0 76.1 90.9 5.9 5.7 19.4 13.3 12.6 10.5 10.2 9.5 6.4 1.4 1.3 1.2 1.0 1.0 1.3 11.3 10.8 11.8 53.5

Energy Cautious 9,503,494 153,511 0.0 13.8 10.1 11.6 10.2 9.3 7.2 6.0 5.0 1.5 1.4 1.2 2.3 2.9 3.2 12.7 13.2 13.3 191.2



8/10/2019 Max-Kotak


IndiaDailySummary-December

IndiaDailySummary-

December5,2014


Target O/S



Industrials

ABB SELL 1,317 700 (46.8) 279,073 4,508 331 11.8 24.1 32.2 41.9 103.5 33.6 111.2 54.6 40.9 60.8 34.6 27.3 15.3 13.3 11.3 0.3 0.3 0.3 9.1 16.7 19.1 2.0

Bharat Heavy Electricals SELL 274 200 (27.0) 670,398 10,829 2,448 11.6 13.7 15.9 (18.1) 18.0 16.6 23.7 20.0 17.2 15.5 11.9 8.9 1.9 1.8 1.7 0.9 1.1 1.2 8.3 9.2 10.0 23.0

Crompton Greaves BUY 192 210 9.2 120,523 1,947 627 5.5 10.6 15.4 41.9 91.6 45.7 34.8 18.1 12.5 16.6 11.2 8.8 3.1 2.7 2.3 0.8 1.0 1.2 9.2 16.0 20.2 22.2

Cummins India REDUCE 916 720 (21.4) 2 53,957 4,102 277 26.7 32.6 43.7 25.3 21.9 34.2 34.3 28.1 21.0 31.2 22.4 16.3 8.5 7.3 6.2 1.2 1.4 1.9 26.7 28.1 32.0 2.9

Kalpataru Power Transmission ADD 181 200 10.7 27,715 448 153 9.9 8.7 11.6 24.3 (12.4) 33.3 18.2 20.8 15.6 7.9 6.7 5.9 1.2 1.2 1.1 0.8 0.8 0.8 7.0 5.8 7.4 0.8

KEC International ADD 105 115 10.0 2 6,866 434 257 4.5 8.5 12.1 36.5 89.1 41.8 23.2 12.2 8.6 8.5 6.6 5.3 1.9 1.7 1.5 1.0 1.9 2.7 8.8 14.5 18.2 0.7

Larsen & Toubro ADD 1,629 1,725 5.9 1,513,374 24,446 927 40.8 58.6 78.8 (16.2) 43.7 34.4 39.9 27.8 20.7 20.7 15.9 13.6 3.9 3.6 3.2 - 1— - 1— - 1— 10.4 13.5 16.2 42.7

Siemens SELL 976 600 (38.5) 347,573 5,614 356 17.8 24.3 29.9 104.7 36.2 23.1 54.8 40.2 32.6 31.1 23.8 19.2 7.7 6.8 6.0 0.5 0.7 0.9 14.3 18.0 19.6 4.8

Thermax REDUCE 1,064 850 (20.1) 126,753 2,047 119 22.7 33.5 45.9 10.1 47.5 36.8 46.8 31.7 23.2 32.6 21.0 14.9 5.8 5.2 4.5 0.8 1.0 1.3 12.8 17.2 20.8 1.0

Voltas REDUCE 281 260 (7.6) 93,111 1,504 331 8.7 12.0 14.2 16.9 38.4 18.6 32.4 23.4 19.8 26.7 17.5 14.4 4.6 4.1 3.6 0.8 1.3 1.5 14.9 18.5 19.4 12.8

Industrials Cautious 3,459,342 55,879 (5.8) 36.7 29.3 36.7 26.9 20.8 21.1 15.9 13.2 3.6 3.3 3.0 0.1 0.1 0.1 9.8 12.3 14.2 112.8

Infrastructure

Adani Port and SEZ REDUCE 286 300 4.8 592,449 9,570 2,084 12.2 16.5 21.2 45.6 35.7 28.7 23.5 17.3 13.5 15.2 11.6 9.3 5.0 4.1 3.2 0.7 0.8 1.0 24.5 25.9 26.7 13.4

Container Corporation REDUCE 1,355 1,330 (1.8) 264,151 4,267 195 48.9 55.4 70.4 (3.1) 13.2 27.0 27.7 24.5 19.2 18.9 15.9 12.2 3.4 3.1 2.8 0.8 0.9 1.2 13.0 13.4 15.3 2.8

Gujarat Pipavav Port REDUCE 177 160 (9.3) 85,327 1,378 483 6.9 9.4 12.2 90.9 35.9 29.2 25.5 18.8 14.5 20.8 15.8 12.1 4.9 3.8 3.0 — — — 21.2 22.9 23.2 3.0

IRB Infrastructure REDUCE 261 210 (19.5) 86,664 1,400 332 13.8 14.8 20.5 (0.1) 7.6 37.8 18.9 17.6 12.7 8.9 7.9 7.8 2.2 2.1 1.8 1.5 1.5 1.5 12.4 12.2 15.2 15.1 Infrastructure Attractive 1,074,555 17,357 27.1 27.6 29.1 24.4 19.2 14.8 14.5 11.5 9.6 4.1 3.5 2.9 0.7 0.8 1.0 16.8 18.2 19.7 35.5

Infrastructure

Info Edge ADD 947 1,070 13.0 113,875 1,839 109 9.9 15.4 25.3 20.8 54.8 64.6 95.5 61.7 37.5 87.0 48.4 26.5 6.9 6.5 6.0 0.4 0.6 0.9 10.9 11.9 18.3 2.9

Just Dial ADD 1,543 1,700 10.2 108,589 1,754 70 20.7 32.6 51.8 20.3 57.6 59.0 74.6 47.3 29.8 58.4 34.4 19.5 17.4 14.3 11.2 0.5 0.7 1.2 25.1 33.3 42.2 7.8

Internet Attractive 222,464 3,593 25.6 56.3 61.5 84.2 53.9 33.4 69.9 40.2 22.5 10.5 9.5 8.2 0.4 0.6 1.0 12.4 17.7 24.7 10.7

Media

DB Corp. ADD 384 375 (2.3) 70,509 1,139 183 18.7 23.3 27.1 12.1 24.5 16.1 20.5 16.5 14.2 11.8 9.5 8.1 5.4 4.7 4.2 2.3 2.9 3.6 28.1 30.7 31.2 0.3

DishTV ADD 69 70 2.2 72,949 1,178 1,065 (0.1) 1.4 3.2 93.5 1,516.7 135.4 (717.0) 50.6 21.5 11.4 9.2 7.1 4.4 4.4 4.4 — — — (0.6) 8.7 20.4 3.9

Jagran Prakashan ADD 133 135 1.5 43,463 702 311 7.7 9.7 11.5 2.6 26.1 18.5 17.3 13.7 11.5 9.5 7.9 6.7 3.9 3.5 3.1 3.0 3.8 4.5 23.8 27.1 28.7 0.6

Sun TV Network ADD 375 385 2.7 147,723 2,386 394 20.2 22.7 26.5 6.2 12.7 16.6 18.6 16.5 14.2 11.8 10.2 8.6 4.3 3.9 3.6 2.7 3.3 3.8 24.4 25.0 26.4 5.2

Zee Entertainment Enterprises ADD 375 325 (13.3) 359,832 5,812 960 8.6 10.2 12.5 (6.8) 19.2 22.1 43.8 36.7 30.1 25.7 22.0 18.4 6.9 6.3 5.6 1.2 1.5 1.7 16.5 17.9 19.7 20.6

Media Neutral 694,477 11,218 8.8 25.6 24.9 31.7 25.3 20.2 15.9 13.4 11.1 5.5 5.0 4.6 1.4 1.8 2.1 17.3 19.9 22.6 30.7

Metals & Mining

Coal India ADD 356 360 1.1 2,248,310 36,317 6,316 22.5 28.1 23.7 (5.9) 24.7 (15.5) 15.8 12.7 15.0 9.4 8.1 8.9 4.5 3.9 3.5 3.2 4.0 3.4 29.8 32.8 24.6 19.2

Hindalco Industries REDUCE 166 165 (0.5) 342,570 5,534 2,065 16.3 16.6 20.4 31.0 1.9 22.5 10.2 10.0 8.1 8.1 6.6 5.7 0.8 0.7 0.7 0.8 0.8 0.8 8.0 7.6 8.7 26.3

Hindustan Zinc ADD 171 190 11.3 721,051 11,647 4,225 16.9 18.3 19.3 2.7 8.1 5.8 10.1 9.3 8.8 6.1 4.8 3.8 1.7 1.5 1.3 2.1 2.1 2.1 17.8 16.8 15.7 3.4

Jindal Steel and Power REDUCE 153 160 4.7 139,752 2,257 915 15.9 21.6 25.6 (23.8) 35.9 18.6 9.6 7.1 6.0 8.1 6.1 5.6 0.7 0.6 0.6 1.2 1.2 1.2 6.6 8.9 9.7 21.8

JSW Steel BUY 1,169 1,490 27.5 2 82,488 4,563 242 111.0 140.2 160.0 67.8 26.3 14.1 10.5 8.3 7.3 6.0 5.3 4.7 1.2 1.0 0.9 1.0 1.0 1.0 11.6 13.1 13.3 11.7

National Aluminium Co. SELL 58 56 (3.1) 148,964 2,406 2,577 5.0 5.1 5.4 88.9 2.4 6.7 11.6 11.4 10.6 5.3 5.0 4.4 1.2 1.1 1.0 2.6 2.6 1.7 10.2 9.8 9.7 2.3

NMDC ADD 140 185 32.3 554,267 8,953 3,965 18.4 18.5 17.5 15.3 0.5 (5.6) 7.6 7.6 8.0 4.1 4.2 4.2 1.7 1.5 1.4 6.1 6.1 6.1 23.1 21.0 18.2 8.4

Sesa Sterlite REDUCE 237 275 16.0 703,073 11,357 2,965 23.2 20.8 21.9 37.1 (10.6) 5.6 10.2 11.4 10.8 5.5 4.8 4.2 0.9 0.9 0.8 1.4 1.4 1.4 9.2 7.7 7.7 22.5

Tata Steel REDUCE 462 495 7.2 448,556 7,246 971 38.9 45.6 56.2 4.4 17.0 23.4 11.9 10.1 8.2 6.7 6.4 5.7 1.0 0.9 0.9 1.7 1.7 1.7 8.9 9.7 11.0 41.0

Metals & Mining Cautious 5,589,030 90,280 9.8 11.2 0.7 11.6 10.5 10.4 6.7 5.9 5.4 1.6 1.5 1.3 2.7 3.0 2.7 13.8 13.9 12.8 156.8

Pharmaceutical

Biocon SELL 471 360 (23.5) 94,120 1,520 200 21.3 23.1 24.0 3.0 8.6 3.8 22.1 20.4 19.6 13.8 12.4 11.5 3.0 2.7 2.5 1.6 1.7 1.8 13.6 13.9 13.2 8.4

Cipla BUY 659 680 3.1 5 29,326 8,550 803 17.7 24.5 32.0 2.1 38.9 30.5 37.3 26.9 20.6 21.9 16.9 12.8 4.7 4.2 3.6 0.5 0.8 1.0 13.3 16.4 18.7 23.6

Dr Reddy's Laboratories ADD 3,476 3,130 (9.9) 5 91,864 9,560 170 132.5 147.2 163.2 5.3 11.1 10.9 26.2 23.6 21.3 17.2 14.9 13.0 5.4 4.5 3.8 0.6 0.6 0.7 22.4 20.7 19.4 17.2

Lupin BUY 1,482 1,600 8.0 6 65,533 10,750 450 53.8 60.2 71.3 31.7 12.0 18.4 27.6 24.6 20.8 16.8 14.6 11.9 7.4 5.9 4.7 0.5 0.6 0.7 30.1 26.6 25.2 13.2

Sun Pharmaceuticals SELL 839 790 (5.9) 1,738,485 28,082 2,072 30.4 33.6 37.7 10.1 10.5 12.3 27.6 25.0 22.2 18.4 15.4 13.5 7.1 5.7 4.7 0.8 1.0 1.1 29.4 25.3 23.0 38.4

Pharmaceuticals Neutral 3,619,328 58,463 11.5 14.0 15.4 28.3 24.8 21.5 18.2 15.2 12.9 6.2 5.1 4.2 0.7 0.9 1.0 21.8 20.5 19.7 100.7



8/10/2019 Max-Kotak


IndiaDailySummary-December5,2014


Target O/S



Real Estate

DLF BUY 154 210 36.1 275,040 4,443 1,781 2.9 4.1 6.0 (21.0) 42.0 48.5 53.8 37.9 25.5 16.3 14.1 10.0 0.9 0.9 0.9 1.9 1.3 1.3 1.8 2.5 3.6 36.7

Godrej Properties REDUCE 270 225 (16.8) 53,884 870 198 9.7 11.5 15.5 20.5 19.1 34.6 27.9 23.4 17.4 21.7 13.7 9.8 2.8 2.5 2.3 0.7 0.9 0.9 10.3 11.3 13.8 1.2

Oberoi Realty BUY 274 325 18.6 89,969 1,453 328 16.7 25.9 42.3 76.0 55.4 63.3 16.4 10.6 6.5 8.3 4.3 3.3 1.8 1.6 1.3 0.7 0.7 0.7 11.8 16.2 22.1 1.4

Prestige Estates Projects REDUCE 254 240 (5.5) 95,231 1,538 350 11.2 15.8 14.8 8.5 40.3 (6.1) 22.6 16.1 17.2 13.1 10.1 9.5 2.2 2.0 1.8 0.5 0.5 0.5 12.1 14.0 11.7 1.4

Sobha Developers ADD 523 540 3.3 51,258 828 98 23.6 38.7 65.7 (1.7) 64.1 69.9 22.2 13.5 8.0 10.6 7.8 5.3 2.1 1.9 1.6 1.3 1.3 1.3 9.8 14.6 21.3 1.8

Sunteck Realty ADD 291 410 40.9 18,323 296 60 10.7 81.2 88.8 (57.4) 656.7 9.3 27.1 3.6 3.3 25.5 3.0 1.7 2.5 1.5 1.0 3.8 3.8 — 9.7 52.7 37.5 0.3

Real Estate Attractive 583,706 9,429 5.5 66.2 38.2 29.7 17.9 12.9 14.1 9.6 7.4 1.4 1.3 1.2 1.1 1.1 1.0 4.6 7.2 9.1 43.0

Technology

HCL Technologies REDUCE 1,624 1,475 (9.2) 1,139,604 18,408 706 101.6 1 0 5. 8 1 13 .5 12.6 4.1 7.3 16.0 15.4 14.3 11.3 10.3 9.1 4.5 3.7 3.2 1.5 1.7 1.8 31.2 26.6 24.0 26.5

Hexaware Technologies SELL 228 175 (23.3) 6 8,671 1,109 302 11.0 13.1 14.5 (12.8) 18.8 10.9 20.7 17.4 15.7 13.9 11.9 10.7 7.2 6.4 5.8 3.9 3.4 3.8 30.9 39.0 38.8 10.3

Infosys ADD 2,102 2,350 11.8 2,413,859 38,991 1,143 108.1 125.7 147.9 13.7 16.3 17.7 19.4 16.7 14.2 13.8 11.3 9.3 4.6 3.9 3.3 1.7 1.9 2.2 25.6 25.4 25.5 84.9

Mindtree ADD 1,239 1,150 (7.1) 103,648 1,674 84 63.7 71.6 80.2 18.8 12.4 12.0 19.4 17.3 15.4 13.5 11.5 9.6 5.1 4.3 3.6 1.3 1.4 1.6 29.3 26.9 25.1 4.2

Mphasis SELL 405 370 (8.7) 8 5,160 1,376 210 32.7 33.9 34.9 122.3 3.5 2.9 12.4 12.0 11.6 6.9 6.4 6.0 1.6 1.5 1.4 4.0 4.2 4.3 13.1 12.8 12.5 0.8

TCS ADD 2,638 2,700 2.4 5,167,026 83,464 1,959 10 9.9 126 .5 143.9 12.6 15.1 13.8 24.0 20.9 18.3 17.9 15.1 12.9 8.2 6.8 5.7 2.3 1.9 2.2 36.5 35.8 34.0 49.4

Tech Mahindra ADD 2,679 2,900 8.2 631,219 10,196 209 137.5 165.3 190.0 7.4 20.2 15.0 19.5 16.2 14.1 13.5 11.2 9.5 4.9 3.9 3.1 1.0 1.1 0.8 28.5 27.5 25.4 26.2

Wipro ADD 593 630 6.3 1,463,117 23,634 2,463 34.9 39.0 45.0 10.2 11.6 15.4 17.0 15.2 13.2 11.4 9.7 8.1 3.6 3.1 2.6 1.5 1.7 1.7 23.0 21.8 21.4 19.5 Technology Attractive 11,072,304 178,852 12.9 13.5 14.1 20.4 18.0 15.8 14.6 12.4 10.5 5.5 4.6 3.9 1.9 1.8 2.0 27.0 25.8 24.9 221.9

Telecom

Bharti Airtel ADD 370 430 16.2 1,478,638 23,885 3,997 15.5 17.1 21.1 85.8 10.2 24.0 23.9 21.7 17.5 7.0 6.2 5.4 2.3 2.1 2.0 0.6 0.9 1.4 9.9 10.1 11.7 30.1

Bharti Infratel REDUCE 296 270 (8.7) 5 58,839 9,027 1,889 11.2 13.0 15.7 38.9 16.3 20.7 26.5 22.8 18.9 11.0 9.6 8.4 3.2 3.1 3.1 3.8 3.3 4.0 11.8 13.8 16.3 6.5

IDEA BUY 159 192 20.8 571,587 9,233 3,320 8.4 9.5 9.4 41.3 13.5 (0.7) 19.0 16.7 16.8 8.6 7.1 6.2 2.3 2.0 1.8 0.4 0.5 0.6 15.2 13.9 12.3 18.7

Reliance Communications SELL 101 90 (11.2) 243,354 3,931 2,467 3.5 5.3 8.8 8.8 50.0 66.8 28.7 19.1 11.5 7.1 6.7 5.7 0.7 0.7 0.7 — — — 2.8 3.8 6.0 11.9

Tata Communications ADD 456 435 (4.6) 129,903 2,098 285 3.4 7.5 12.6 171.9 122.3 69.3 135.7 61.1 36.1 7.7 6.9 6.2 8.7 7.5 6.1 1.0 1.2 1.4 8.3 13.2 18.8 4.7

Telecom Attractive 2,982,321 48,174 63.4 15.8 22.1 24.3 21.0 17.2 7.7 6.8 5.9 2.1 2.0 1.8 1.1 1.2 1.6 8.7 9.4 10.7 71.9

Utilities

Adani Power SELL 45 36 (19.4) 128,231 2,071 2,872 (6.9) (4.2) (4.3) (577.9) 38.3 (0.6) (6.5) (10.6) (10.5) 10.6 9.3 9.7 2.8 3.8 6.0 — — — (35.4) (30.6) (44.5) 3.8

JSW Energy SELL 93 73 (21.7) 152,935 2,470 1,640 9.5 9.2 8.0 37.8 (3.8) (12.4) 9.8 10.2 11.6 6.2 5.6 5.7 1.9 1.6 1.4 — — — 21.2 16.9 12.8 3.9

NHPC REDUCE 20 22 9.2 223,074 3,603 11,071 1.6 1.9 2.0 (1.1) 21.4 2.2 12.8 10.5 10.3 9.0 7.7 7.8 0.8 0.7 0.7 2.0 2.4 2.5 6.0 7.0 6.8 2.2

NTPC REDUCE 142 140 (1.4) 1,171,268 18,920 8,245 10.7 13.1 14.8 (16.7) 22.5 13.6 13.3 10.9 9.6 11.3 8.7 7.1 1.3 1.2 1.1 2.3 2.8 3.1 9.9 11.3 11.9 13.6

Power Grid BUY 137 160 17.2 7 14,112 11,535 5,232 9.8 12.4 15.6 14.0 26.4 25.8 13.9 11.0 8.7 10.2 9.1 7.8 1.9 1.7 1.5 2.2 2.8 3.5 14.3 16.3 18.4 12.0

Reliance Power SELL 66 62 (5.9) 184,858 2,986 2,805 3.7 4.1 6.2 (11.9) 11.5 50.5 17.8 16.0 10.6 21.7 11.1 8.3 0.9 0.9 0.8 — — — 5.2 5.5 7.7 8.7

Tata Power ADD 89 96 7.7 241,117 3,895 2,468 1.5 4.4 5.6 (28.3) 187.7 27.7 58.0 20.2 15.8 8.5 6.9 6.3 1.6 1.5 1.4 1.3 1.3 1.3 3.2 8.5 10.1 6.6

Utilities Cautious 2,909,068 46,991 (12.2) 31.6 17.1 16.7 12.7 10.8 10.4 8.5 7.5 1.4 1.3 1.2 1.8 2.1 2.5 8.1 10.0 10.8 57.1

Others

Carborundum Universal ADD 175 200 14.6 32,807 530 187 5.9 11.3 14.4 20.6 92.6 27.4 29.7 15.4 12.1 12.9 8.6 6.9 2.8 2.4 2.1 0.9 1.3 1.7 9.6 16.8 18.7 0.7

Coromandel International SELL 323 210 (35.0) 9 2,396 1,492 283 16.5 18.6 21.6 36.7 13.1 16.0 19.6 17.4 15.0 11.0 10.0 8.8 3.5 3.1 2.6 1.4 1.4 1.4 19.1 18.8 18.9 1.6

Godrej Industries ADD 300 345 15.2 100,486 1,623 331 14.6 18.0 20.2 48.6 22.7 12.2 20.5 16.7 14.9 17.9 12.8 9.0 3.1 2.7 2.3 0.6 0.6 0.6 16.5 17.4 16.8 2.9

Havells India ADD 327 290 (11.3) 204,114 3,297 624 9.2 11.6 13.3 15.7 25.1 14.6 35.3 28.2 24.6 21.7 17.4 15.1 10.4 8.7 7.4 1.1 1.4 1.6 31.8 33.6 32.5 7.7

Jaiprakash Associates RS 29 — — 70,541 1,139 2,219 1.1 4.5 4.5 120.0 306.6 (0.1) 26.0 6.4 6.4 12.3 9.4 9.1 0.5 0.5 0.5 0.0 0.0 0.0 2.5 9.0 8.5 28.8

Rallis India BUY 216 230 6.6 41,947 678 194 9.1 11.5 14.5 16.7 26.1 25.8 23.7 18.8 14.9 13.9 10.8 8.5 5.0 4.2 3.4 1.2 1.2 1.3 22.8 24.3 25.3 1.4

Tata Chemicals BUY 455 520 14.3 1 15,850 1,871 255 32.0 41.0 46.7 110.1 28.0 13.9 14.2 11.1 9.7 7.5 6.3 5.4 1.9 1.7 1.5 2.2 2.2 2.2 14.1 16.3 16.5 4.9

UPL ADD 340 370 8.9 145,597 2,352 429 27.7 32.9 37.5 13.7 19.1 13.7 12.3 10.3 9.1 7.3 6.4 5.5 2.3 2.0 1.7 1.3 1.5 1.6 20.7 20.9 20.2 9.7

Others 910,308 14,704 146.1 42.5 13.1 21.2 14.9 13.1 11.1 8.9 7.9 2.4 2.2 1.9 1.2 1.3 1.5 11.5 14.5 14.5 59.9

KIE universe 75,240,109 1,215,363 11.0 17.9 15.1 18.2 15.5 13.4 10.9 9.1 7.8 2.7 2.4 2.1 1.5 1.7 1.9 14.6 15.4 15.8

KIE universe (ex-energy) 65,736,615 1,061,852 14.1 18.9 16.3 19.8 16.7 14.4 12.0 10.0 8.7 3.0 2.7 2.4 1.4 1.5 1.7 15.2 16.0 16.5

Notes:

(a) We have used adjusted book values for banking companies.

(b) 2015 means calendar year 2014, similarly for 2016 and 2017 for these particular companies.

( c) E xchange ra te (Rs /US$)= 61.91

Dividend yield (%)Price/BV (X) RoE (%)


8/10/2019 Max-Kotak


Disclosures


Ratings and other definitions/identifiers

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SELL. We expect this stock to deliver <-5% returns over the next 12 months.

Our target prices are also on a 12-month horizon basis.

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and/or Kotak Securities policies in circumstances when Kotak Securities or its affiliates is acting in an advisory capacity in a merger or strategic transaction

involving this company and in certain other circumstances.

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Kotak Inst i tut ional Equ i t ies Rese arch coverage un iverse

Distribution of ratings/investment banking relationships

Source: Kotak Institutional Equities As of September 30, 2014

Percentage of companies covered by Kotak Institutional

Equities, within the specified category.

Percentage of companies within each category for which

Kotak Institut ional Equities and or its affiliates has provided

investment banking services within the previous 12 months.

* The above categories are defined as follows: Buy = We

expect this stock to deliver more than 15% returns over the

next 12 months; Add = We expect this stock to deliver 5-

15% returns over the next 12 months; Reduce = We expect

this stock to deliver -5-+5% returns over the next 12 months;

Sell = We expect this stock to deliver less than -5% returns

over the next 12 months. Our target prices are also on a 12-

month horizon basis. These ratings are used illustratively to

comply w ith applicable regulations. As of 30/09/2014 Kotak

Institutional Equities Investment Research had investment

ratings on 154 equity securities.

22.1

36.4

22.1

19.5

4.5 4.5

1.9

0.6

0%

10%

20%

30%

40%

50%

60%

70%

BUY ADD REDUCE SELL

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Corporate Office Overseas Offices

Kotak Securities Ltd.

27 BKC, Plot No. C-27, “G Block”

Bandra Kurla Complex, Bandra (E)

Mumbai 400 051, IndiaTel: +91-22-43360000

Kotak Mahindra (UK) Ltd

8th Floor, Portsoken House

155-157 Minories

London EC3N 1LSTel: +44-20-7977-6900

Kotak Mahindra Inc

50 Main Street, Ste. 890

Westchester Financial Centre

White Plains, New York 10606Tel:+1-914-997-6120

Copyright 2014 Kotak Institutional Equities (Kotak Securities Limited). All rights reserved.

1.

Note that the research analysts contributing to this report may not be registered/qualified as research analysts with FINRA; and

2. Such research analysts may not be associated persons of Kotak Mahindra Inc and therefore, may not be subject to NASD Rule 2711 restrictions

on communications with a subject company, public appearances and trading securities held by a research analyst account.

3. Any U.S. recipients of the research who wish to effect transactions in any security covered by the report should do so with or through Kotak

Mahindra Inc and (ii) any transactions in the securities covered by the research by U.S. recipients must be effected only through Kotak Mahindra

Inc at [email protected].

Kotak Securities Limited and its affiliates are a full-service, integrated investment banking, investment management, brokerage and financing group.

We along with our affiliates are leading underwriter of securities and participants in virtually all securities trading markets in India. We and our affiliates

have investment banking and other business relationships with a significant percentage of the companies covered by our Investment Research

Department. Our research professionals provide important input into our investment banking and other business selection processes. Investors should

assume that Kotak Securities Limited and/or its affiliates are seeking or will seek investment banking or other business from the company or companies

that are the subject of this material and that the research professionals who were involved in preparing this material may participate in the solicitation

of such business. Our research professionals are paid in part based on the profitability of Kotak Securities Limited, which include earnings from

investment banking and other business. Kotak Securities Limited generally prohibits its analysts, persons reporting to analysts, and members of their

households from maintaining a financial interest in the securities or derivatives of any companies that the analysts cover. Additionally, Kotak Securities

Limited generally prohibits its analysts and persons reporting to analysts from serving as an officer, director, or advisory board member of any

companies that the analysts cover. Our salespeople, traders, and other professionals may provide oral or written market commentary or trading

strategies to our clients that reflect opinions that are contrary to the opinions expressed herein, and our proprietary trading and investing businesses

may make investment decisions that are inconsistent with the recommendations expressed herein. In reviewing these materials, you should be aware

that any or all of the foregoing, among other things, may give rise to real or potential conflicts of interest. Additionally, other important information

regarding our relationships with the company or companies that are the subject of this material is provided herein.

This material should not be construed as an offer to sell or the solicitation of an offer to buy any security in any jurisdiction where such an offer or

solicitation would be illegal. We are not soliciting any action based on this material. It is for the general information of clients of Kotak Securities

Limited. It does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs ofindividual clients. Before acting on any advice or recommendation in this material, clients should consider whether it is suitable for their particular

circumstances and, if necessary, seek professional advice. The price and value of the investments referred to in this material and the income from them

may go down as well as up, and investors may realize losses on any investments. Past performance is not a guide for future performance, future

returns are not guaranteed and a loss of original capital may occur. Kotak Securities Limited does not provide tax advise to its clients, and all investors

are strongly advised to consult with their tax advisers regarding any potential investment.

Certain transactions -including those involving futures, options, and other derivatives as well as non-investment-grade securities - give rise to

substantial risk and are not suitable for all investors. The material is based on information that we consider reliable, but we do not represent that it is

accurate or complete, and it should not be relied on as such. Opinions expressed are our current opinions as of the date appearing on this material

only. We endeavor to update on a reasonable basis the information discussed in this material, but regulatory, compliance, or other reasons may

prevent us from doing so. We and our affiliates, officers, directors, and employees, including persons involved in the preparation or issuance of this

material, may from time to time have “long” or “short” positions in, act as principal in, and buy or sell the securities or d erivatives thereof of

companies mentioned herein. For the purpose of calculating whether Kotak Securities Limited and its affiliates holds beneficially owns or controls,

including the right to vote for directors, 1% of more of the equity shares of the subject issuer of a research report, the holdings does not include

accounts managed by Kotak Mahindra Mutual Fund. Kotak Securities Limited and its non US affiliates may, to the extent permissible under applicable

laws, have acted on or used this research to the extent that it relates to non US issuers, prior to or immediately following its publication. Foreign

currency denominated securities are subject to fluctuations in exchange rates that could have an adverse effect on the value or price of or income

derived from the investment. In addition, investors in securities such as ADRs, the value of which are influenced by foreign currencies affectively

assume currency risk. In addition options involve risks and are not suitable for all investors. Please ensure that you have read and understood the

current derivatives risk disclosure document before entering into any derivative transactions.

Kotak Securities Limited established in 1994, is a subsidiary of Kotak Mahindra Bank Limited. Kotak Securities is one of Indi a’s largest brokerage and

distribution house.

Kotak Securities Limited is a corporate trading and clearing member of Bombay Stock Exchange Limited (BSE), National Stock Exchange of India Limited

(NSE), MCX Stock Exchange Limited (MCX-SX), United Stock Exchange of India Limited (USEIL) and a dealer of the OTC Exchange of India (OTCEI). Our

businesses include stock broking, services rendered in connection with distribution of primary market issues and financial products like mutual funds

and fixed deposits, depository services and Portfolio Management.

Kotak Securities Limited is also a depository participant with National Securities Depository Limited (NSDL) and Central Depository Services (India)

Limited (CDSL).Kotak Securities Limited is also registered with Insurance Regulatory and Development Authority as Corporate Agent for Kotak

Mahindra Old Mutual Life Insurance Limited and is also a Mutual Fund Advisor registered with Association of Mutual Funds in India (AMFI)

We hereby declare that our activities were neither suspended nor we have defaulted with any stock exchange authority with whom we are registered

in last five years. However SEBI, Exchanges and Depositories have conducted the routine inspection and based on their observations have issued advise

8/10/2019 Max-Kotak


letters or levied minor penalty on KSL for certain operational deviations. We have not been debarred from doing business by any Stock Exchange / SEBI

or any other authorities; nor has our certificate of registration been cancelled by SEBI at any point of time.

We offer our research services to primarily institutional investors and their employees, directors, fund managers, advisors who are registered with us

Details of Associates are available on our website ie www.kotak.com

Research Analyst has not served as an officer, director or employee of Subject Company

We or our associates may have received compensation from the subject company in the past 12 months. We or our associates may have managed or

co-managed public offering of securities for the subject company in the past 12 months. We or our associates may have received compensation for

investment banking or merchant banking or brokerage services from the subject company in the past 12 months. We or our associates may have

received any compensation for products or services other than investment banking or merchant banking or brokerage services from the subject

company in the past 12 months. We or our associates may have received any compensation or other benefits from the subject company or third party

in connection with the research report.

Research Analyst or his/her relative’s may have financial interest in the subject company. Kotak Securities Limited or its as sociates may have financial

interest in the subject company. Research Analyst or his/her relatives does not have actual/beneficial ownership of 1% or more securities of the subject

company at the end of the month immediately preceding the date of publication of Research Report: Kotak Securities Limited or its associates may

have actual/beneficial ownership of 1% or more securities of the subject company at the end of the month immediately preceding the date of

publication of Research Report. Subject Company may have been client during twelve months preceding the date of distribution of the research report.

Three year Price history of the daily closing price of the securities covered in this note is available at nseindia.com and

economictimes.indiatimes.com/markets/stocks/stock-quotes. (Choose name of company in the list browse companies and select 3 years in icon YTD in

the price chart)

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