1. business and industrial

NiveshDaily
October 14, 2014
INDICES
Indices
Previous (day) Close
% chg
Sensex
Nifty
26,384.07
7,884.25
+0.33%
+0.31%
(As on 13th October, 2014)
FROM RESEARCH DESK
 Economy Update
Consumer Price Index (CPI) inflation declines to 6.5% in September 2014; lowest since
January 2012
 Results Preview
Bajaj Auto, Bajaj Finance & NIIT Tech (15-Oct-14)
 Result Updates
Reliance Industries Ltd. |Q2FY15 Result Update | PAT above expectation, maintain buy
with target price of Rs.1,274
Liberty Shoes Ltd.|Q2FY15 Result Update | Disappointing performance on bottomline;
downgrade to HOLD with revised target price of Rs 336
 Research Update included
Q2FY15E Results Preview | Pharma Sector | Aggregate y-y growth in earnings to slow
down a bit on high base of past year; however outlook remains promising
 IndiaNivesh Universe | Valuation Table
 Result Today
Daljeet S. Kohli
Head of Research
Mobile: +91 77383 93371, 99205 94087
Tel: +91 22 66188826
[email protected]
IndiaNivesh Research
IndiaNivesh Securities Private Limited
601 & 602, Sukh Sagar, N. S. Patkar Marg, Girgaum Chowpatty, Mumbai 400 007. Tel: (022) 66188800
IndiaNivesh Research is also available on Bloomberg INNS, Thomson First Call, Reuters and Factiva INDNIV.
Results Preview
Abhishek Jain
Research Analyst
Mobile: +91 77383 93433
Tel: +91 22 66188832
[email protected]
Bajaj Auto
Quick Fundamentals (Rs. Mn)
Volume(Unit)
Revenue
Average realization
EBIDTA
PAT
EPS (RS.)
EBITDA
PAT
Q2 FY15e Q1 FY15 Q2 FY14 QoQ % YoY %
1055582 988430 961330
7 10 55524
51334
50615
8 10 52600
51935
52651
1 ‐0 10684
9251
11320
15 ‐6 8252
7400
8372
12 ‐1 28.53
25.58
28.94
12 ‐1 Margin % Margin % Basis Points (BPS)
Margin %
19.2
18.0
22.4
122
(312)
14.9
14.4
16.5
45
(168)
Source: Capitaline; IndiaNivesh Research

The company witnessed 10% YoY and 7% QoQ growth in volume led by strong
performance in export market. Domestic sales decreased by 4% YoY which was offset
by 29% YoY growth in export sales. Two wheeler volume increased by 5.9% YoY and
three wheeler sales increased by 39.6% YoY.

Average realization expected to increase by 1% QoQ to Rs. 52600 due to higher 3W
and export sales.

EBITDA margin to expand 122 bps QoQ to 19.2% lead by favorable mix higher share
3W and export sales.
Key things to point out
(1) Strategy for revival in domestic motorcycle sales (2) outlook for export sales growth 3)
EBIDTA margin outlook.
Valuation: With its specialization strategy and focused approach, Bajaj auto aims to garner
a higher share of the global motorcycle market together with industry leading profitability.
Bajaj Auto would benefit on (a) upgrading in the domestic motorcycle market, driven by
economic recovery, and (b) revival in exports which could offset the negative of absence in
scooters. Further Bajaj Auto will have the first mover advantage in launch of quadricycle
(expected in October 2014) in India. At CMP of Rs 2,351 the stock is trading at PE multiple
of 16.5x FY16E EPS. We maintain BUY rating on the stock with target price of Rs. 2556 (18x
FY16E EPS).
Yogesh Hotwani
Research Analyst
Mobile: +91 77383 93373
Tel: +91 22 66188839
[email protected]
Bajaj Finance Limited
(Rs mn)
Q2FY15E Q1FY15A Q2FY14A
Net Interest Income
6,412
6,805
4,921
Pre Provisioning Profit
3,672
4,035
3,050
Net Profit
1,976
2,114
1,670
EPS (Rs)
39.4
42.2
33.6
% QoQ
(6)
(9)
(7)
(7)
% YoY
30
20
18
17
Source: Company Filings, IndiaNivesh Research; Standalone
We expect Asset Under Management (AUM) growth to remain strong at 36% yoy to Rs
269.8 bn largely led by strong growth in SME segment. Net interest income to grow by 30%
yoy to Rs 6.4 bn. Net Interest margins to decline on qoq basis by 120 bps mainly due to
lower disbursements in high yielding consumer segment due to seasonality.
Operating profit to grow by 20% yoy to Rs 3.7 bn and Net profit to grow by 18% yoy to Rs
1.97 bn. We expect asset quality to remain stable across its business segments.
Valuation: At CMP of Rs 2,687, Bajaj Finance is trading at P/ABV of 2.8x and 2.3x for FY15E
and FY16E respectively. We have a hold rating on stock with target price of Rs 2,299.
Key things to watch out for:
1)
2)
IndiaNivesh Research
Segmental break up of AUM and disbursement.
Update on plan of launching housing finance company.
NiveshDaily
October 14, 2014 | 2
Results Preview (contd...)
Amar Mourya
Research Analyst
NIIT Technologies (15-Oct-14)
Tel: +91 22 66188836
[email protected]
Rs in mn
Net Sales ($ Mn)
Net Sales
EBITDA
Net Profit
EPS (Rs.)
Q2FY15E
Q1FY15A
95
5,733
757
417
7.0
60
96
5,776
775
432
7.2
60
Q2FY14A Q-o-Q % Ch.
93
5,873
886
624
10.4
60
‐1.9%
‐0.7%
‐2.4%
‐3.5%
‐3.5%
Y-o-Y % Ch.
1.3%
‐2.4%
‐14.6%
‐33.1%
‐33.1%
bps
EBITDA Margin (%)
13.2%
PAT Margin (%)
7.3%
Note: Consolidated Financials
13.4%
7.5%
15.1%
10.6%
(22)
(21)
(189)
(335)
Source: Company Filings; IndiaNivesh Research
Updates

Sequentially, we expect $-revenue de-growth of 1.9% to Rs.95 mn, as descaling
of U.S client revenue is likely to continue during the quarter.

EBITDA margin is likely to contract by 22bps Q/Q, led by lower revenue base
and lesser utilization.

On account of lower EBITDA base, net profit is likely to de-grow 3.5% Q/Q to
Rs.417 mn.
Key things to watch out for: (1) fresh order intake, (2) revenue and margin outlook,
and (3) commentary on uptick in U.S account which was ramped-down in last quarter.
Valuation: At CMP of Rs. 401, the stock is trading at P/E multiple of 10.5x FY15E and
9.3x FY16 earnings estimate. We have HOLD rating with target price of Rs.414 on
NIIT Tech.
IndiaNivesh Research
NiveshDaily
October 14, 2014 | 3
Economy Update
Consumer Price Index (CPI) inflation declines to 6.5% in September
2014; lowest since January 2012
Daljeet S. Kohli
Head of Research
Mobile: +91 77383 93371, 99205 94087
Tel: +91 22 66188826
[email protected]
India’s CPI inflation rose 6.46% (combined) in September 2014 as compared to 7.80%
in August 2014. It was below the street expectations of 7.2%. The corresponding
inflation rates for rural and urban areas were 6.68% and 6.34%, respectively. The falling
food prices pulled down the September 2014 CPI as food index increased 7.56% in
September 2014 as compared to 9.22% in August 2014. Within the food inflation,
inflation in vegetables was at 8.6% as compared to 15.2% in August 2014. However,
fruits prices remain elevated as they increased 22.4% in September 2014 (24.3% in
August 2014). Among other food items, milk & milk products continue to increase in
double digits as it increased by 11.08% in September 2014. Encouragingly, core inflation,
or non-food and non-fuel price inflation, slowed to 5.9% from 6.9% in August 2014,
suggesting that demand-driven price pressures are weakening.
Kaushal Patel
Research Associate
Mobile: +91 77383 93414
Tel: +91 22 66188834
[email protected]
Our Take:
The September CPI data surprised positively as it was the lowest since the new series
of Consumer Price Index was released in January 2012 and below market expectations
of 7.2%. While these numbers are positive and encouraging, it is important to see
whether this trend continues. The drop in food inflation is largely because inflation of
vegetables was nearly halved from 15.2% in August 2014 to 8.6% in September 2014.
However, there are clearly seasonal factors which helped here as vegetable prices
spiked in July and August due to uneven monsoon. The June to October period always
sees fluctuations in prices of vegetable and fruits due to rain fall, and winter sees
prices remaining subdued.
Removing the supply side issues in agriculture and improving supply logistics will be
of utmost importance for moderating food price pressures on sustainable basis. The
working paper on food inflation by RBI also concludes that there is a need to raise
agricultural productivity through enhanced investments and improved technology.
However, if these issues are to be addressed by the government. Any agricultural sector
reform will take at least two-three years to yield results on the ground.
Overall, food Inflation uncertainty still exists in the economy. We expect the RBI’s
January 2015 target of restricting CPI inflation below 8% to be comfortably achieved.
However, we expect RBI to maintain status quo on rates in its next bi-monthly monetary
policy which is scheduled for December 02, 2014 given the RBI’s goal of bringing retail
inflation to 6.0% by January 2016.
12.00
Urban CPI
Combined CPI
Source: MOSPI, IndiaNivesh Research
Jul-14
Sep-14
May-14
Jan-14
Mar-14
Sep-13
Nov-13
Jul-13
May-13
Jan-13
Mar-13
Jan-12
Sep-14
Jul-14
May-14
Jan-14
Mar-14
Nov-13
Jul-13
Sep-13
Mar-13
May-13
Jan-13
Nov-12
Jul-12
Sep-12
May-12
Jan-12
Mar-12
0.00
Nov-12
2.00
Jul-12
4.00
Sep-12
6.00
May-12
8.00
Mar-12
14.00
12.00
10.00
8.00
6.00
4.00
2.00
0.00
10.00
Rural CPI
Source: MOSPI, IndiaNivesh Research
20.00
15.00
10.00
5.00
Food
Fuel
Housing
Clothing
Sep-14
Jul-14
May-14
Mar-14
Jan-14
Nov-13
Jul-13
Sep-13
Mar-13
May-13
Jan-13
Sep-12
Nov-12
Jul-12
May-12
Mar-12
Jan-12
0.00
Misc.
Source: MOSPI, IndiaNivesh Research
IndiaNivesh Research
NiveshDaily
October 14, 2014 | 4
Result Update
October 14, 2014
Reliance Industries Ltd. (RIL)
PAT above expectation, maintain buy with target price of Rs.1,274
Current
Previous
CMP : Rs.958
Rating : BUY
Rating : BUY
Target : Rs.1,274
Target : Rs.1,274
STOCK INFO
BSE
NSE
Bloomberg
Reuters
Sector
Face Value (Rs)
Equity Capital (Rs Mn)
Mkt Cap (Rs Mn)
52w H/L (Rs)
Avg Daily Vol (BSE+NSE)
500325
RELIANCE
RIL.IN
RELI.BO
Refineries
10
3234.2
3,095,490
1142/ 794
3,656,545
SHAREHOLDING PATTERN
%
(as on Sep. 2014)
Institutions
Others, Incl Public
Promoters
30.78
23.96
45.26

RIL reported Q2FY15 PAT (Standalone) above street expectation on the back
of higher than expected GRM and better petchem margin.

Revenue decreased by 7% y-o-y (flat QoQ) to Rs. 964.86 bn (below consensus
of Rs. 983 bn) due to lower refining and Oil & Gas revenue while Reported
PAT stood at Rs. 57.4 bn (above consensus of Rs 55.81 bn).

EBITDA margin above the consensus (stood at 8.5% vs. 8.1% of consensus)
on the back of higher than expected GRM and better petchem margin.

GRM for the quarter stood at $8.3/bbl vs. $8.7/bbl in Q1FY15 and $7.7/bbl in
Q2FY14. RIL’s premium over Singapore GRM remains higher to $3.5/bbl vs.
$2.5/bbl in Q2FY14 aided by wider crude differential and sourcing advantage.
Revenue
EBIDTA
PAT
Adjusted PAT
Source: Company Filings;
IndiaNivesh Research
3m
-4
4
12m
12
30
Source: Capitaline, IndiaNivesh Research
Q1 FY15 Q2 FY14 Q‐o‐Q %
964860
82350
57420
57420
963510 1037580
75300
78490
56490
54900
56490
54900
Y‐o‐Y %
0
0
-1
-3
-7
-7
-8
-11
consensus
Q2FY15e
983,570
79,412
55,810
55,810
Variance(%)
-1.9
3.7
2.9
2.9

Petchem EBIT margin stood at 9.64%, improved by 169 bps QoQ led by strong
rebound in polymer, Fiber intermediates and aromatics margin.

In E&P business, Average KG-D6 production stood at 12.5 MMSCMD of gas
and 0.5 mmbbl of oil.

Retail and US Shale gas business continues to make remarkable progress and
registered 20% and 33.7% YoY growth in revenues, respectively.

Outstanding debt as on 30th September 2014 was Rs 1420.8 bn ($ 23 billion)
compared to Rs. 1387.61 (($ 22.6 billion) bn as on 31st March 2014. Cash and
cash equivalents stood at Rs. 834.56 bn ($ 13.5 billion).
Source: BSE
STOCK PERFORMANCE (%) 1m
RIL
-5
SENSEX
-3
Q2 FY15
Rs.mn
RIL v/s SENSEX
170.00
Segment wise performance
160.00
150.00
140.00
130.00
120.00
110.00
Q2 FY15
Q1 FY15
Q2 FY14
Q‐o‐Q %
Y‐o‐Y %
FY14
FY13
Y‐o‐Y %
249.3
917.8
13.8
2.2
237.2
910.0
15.6
1.9
5.1
0.2
0.9
-5.8
-11.4
-5.7
14.5
-33.0
964.7
3619.7
60.7
15.5
881.1
3337.7
82.8
9.5
1183.1
1164.6
248.9
974.6
14.6
3.3
1241.4
1.6
-4.7
4661
4311
9.5
8.4
-26.7
62.5
8.1
24.0
37.9
3.3
0.7
18.9
37.7
4.9
0.5
27.5
0.4
-4.0
19.3
73.3
127.9
28.9
2.6
65.9
62.0
232.6
Segmental Revenue(Rs. bn)
100.00
90.00
80.00
RIL
10/9/2014
9/25/2014
9/11/2014
8/28/2014
8/14/2014
7/3/2014
7/31/2014
7/17/2014
6/5/2014
6/19/2014
5/8/2014
5/22/2014
4/24/2014
4/10/2014
3/27/2014
3/13/2014
2/27/2014
2/13/2014
1/2/2014
1/30/2014
1/16/2014
12/5/2013
12/19/2013
11/7/2013
11/21/2013
10/24/2013
10/10/2013
70.00
Sensex
Source: Capitaline, IndiaNivesh Research
Daljeet S. Kohli
Head of Research
Mobile: +91 77383 93371, 99205 94087
Tel: +91 22 66188826
[email protected]
Petchem
Refining
Oil & Gas
Others
Total
Segmental EBIT(R. bn)
Petchem
Refining
Oil & Gas
Others
Total
25.0
31.7
3.6
0.4
60.8
Segmental EBIT Margin (%)
Abhishek Jain
Research Analyst
Petchem
Mobile: +91 77383 93433
Tel: +91 22 66188832
[email protected]
Oil & Gas
IndiaNivesh Research
Refining
Others
-31.8
-6.7
26.9
57.1
86.1
132.2
16.3
4.2
6.3
8.4
238.8
Change in bps
9.6
4.1
24.1
29.9
7.9
4.1
31.3
26.9
10.1
3.3
24.3
12.7
169.0
-42.1
-1.9
87.0
-722.0
-25.9
292.1
1,713.7
17.5
3.4
-43.7
64.3
2.7
BPS
8.9
3.7
26.8
27.0
8.3
3.8
34.9
26.8
61.1
-17.9
-807.1
29.2
Source: Company Filings; IndiaNivesh Research;
IndiaNivesh Securities Private Limited
601 & 602, Sukh Sagar, N. S. Patkar Marg, Girgaum Chowpatty, Mumbai 400 007. Tel: (022) 66188800
IndiaNivesh Research is also available on Bloomberg INNS, Thomson First Call, Reuters and Factiva INDNIV.
Result Update (contd...)
Refining GRM stood at USD 8.3/bbl in Q2FY15 vs. USD 7.7/bbl in Q2FY14

During Q2FY15, the refining division margin expand by 87 bps YoY on account
of favorable currency movement and better GRM. GRM for the quarter stood
at $8.3/bbl vs. $8.7/bbl in Q1FY15 and $7.7/bbl in Q2FY14. RIL’s premium over
Singapore GRM remains higher to $3.5/bbl vs. $2.5/bbl in Q2FY14 aided by
wider crude differential and sourcing advantage.

Singapore GRM declined 19% QoQ (declined 8.3% YoY) from USD5.8/bbl to
USD4.8/bbl, touching low of USD2.5/bbl in July-end, as auto-fuel cracks
declined.

Crude throughput stood at 17.3 MMT in Q2Y15, operating rate was at 112%.

The company’s US$4bn pet coke gasification project remains on schedule for
implementation by FY16 end.
Operating Metrics(Refining (USD/bbl)
RIL GRM
Singapore GRM
Premium
Refinery Thr' put (mmt)
Utilization (%)
Q2 FY15
Q1 FY15
Q2 FY14
8.3
4.8
3.50
17.3
112
8.7
5.8
2.90
16.7
108
7.7
5.2
2.50
17.7
114
Q‐o‐Q %
Y‐o‐Y %
-4.6
7.8
-17.2
-7.7
20.7
40.0
3.6
-2.3
3.7
-1.8
FY14
FY13
Y‐o‐Y %
8.1
5.9
2.20
68
110
9.2
7.7
1.40
68.5
110
-12.0
-23.4
57.1
-0.73
0.00
Source: Company Filings; IndiaNivesh Research;
Petrochemical segment: EBIT margin improved by 169 bps QoQ

Petchem EBIT margin stood at 9.64% (v/s 7.9% in Q1FY15 and 10.1% in
Q2FY14) improved by 169 bps QoQ led by strong rebound in polymer, Fiber
intermediates and aromatics margin.

Polyester production improved with the commissioning of the Silvassa plant

Total production increased by 5.6% QoQ (flat YoY) to 5.7 MMT.
Average natural gas production decreased to 12.5 MMSCMD in Q2 FY15

Average KG-D6 production stood at 12.5 MMSCMD of gas and 0.5 mmbbl of
oil.

RIL witnessed significant decline in gas production on yearly basis mainly
attributed to geological complexity, natural decline in the fields and higher
than envisaged water ingress.
E&P (Gross Oil Production mmbbl
PMT
KG-D6
Gross gas production(mmscmd
PMT
KG-D6
To t a l
Q2 FY15
Q1 FY15
Q2 FY14
Q‐o‐Q %
Y‐o‐Y %
FY14
FY13
Y‐o‐Y %
1.86
0.5
2.04
0.53
1.9
0.5
-8.8
-2.1
-5.7
0.0
7.4
2.03
8.2
2.91
-9.8
-30.2
6.3
12.5
18.8
7.1
13.0
20.1
7.4
13.9
21.3
-11.3
-14.6
-3.9
-6.5
-10.4
-11.8
7.1
13.7
20.9
9.0
26.4
36.9
-21
-48
-43
Shale gas business: revenue grew by 33.7% YoY
IndiaNivesh Research

Reliance’s shale business registered strong revenue growth of 33.7% Y-o-Y
led by record production achieved at Pioneer and Chevron JVs.

However, softening of benchmark gas prices impacted realization during the
quarter.
Reliance Industries Ltd|Result Update
October 14, 2014 | 2
Result Update (contd...)
Retail business on growth path
The retail business performed well despite challenging macroeconomic
environment. Total turnover increased by 20% YoY to Rs. 41.67 bn in 21FY15. EBIDTA
contribution was Rs. 1.86 bn.
Valuation
We believe the company would be beneficiary of hike in natural gas price. RIL’s new
refining/ petchem projects likely to add to earnings from end-FY16/FY17,Further,
Shale Gas and Retail business are also showing remarkable growth and likely to be
a key revenue and profitability drivers going ahead. At CMP Rs. 958 stock is trading
at 10.5x FY16E EPS which is lower than its mean of 15x. We maintain buy rating on
the stock with target price of Rs. 1,274.
Quick Fundamentals (Rs. Mn)
Reliance
Net sales Income from operat
Total Revenue
Cost of Revenues
Cost of materials consume
Purchase of stock in trade
change in inventory
Staff cost
other expenses
EBIDTA
Depreciation
EBIT
Interest Expense
Other income
Exceptioanl item
PBT
Provision for taxation
PAT
EPS (RS.)
EBITDA %
EBIT %
PBT %
PAT %
Q2 FY15
964,860
964,860
882,510
788,510
Q1 FY15
Q2 FY14
963,510 1,037,580
963,510 1,037,580
888,210
959,090
809,660
883,650
17,360
-5,760
9,320
73,080
82,350
22,270
60,080
7,580
21,400
17,160
-21,200
9,290
73,300
75,300
20,240
55,060
3,240
20,460
1,160
-1,850
8,080
68,050
78,490
22,330
56,160
8,050
20,600
73,900
16,480
57,420
17.8
Margin %
8.5
6.2
7.7
6.0
72,280
15,790
56,490
17.5
Margin %
7.8
5.7
7.5
5.9
68,710
13,810
54,900
17.0
Margin %
7.6
5.4
6.6
5.3
Q‐o‐Q %
0.1
0.1
‐0.6
‐2.6
Y‐o‐Y %
‐7.0
‐7.0
‐8.0
‐10.8
FY14
3,901,170
3,901,170
3,592,400
3,293,130
FY13
3,602,970
3,602,970
3,295,100
3,061,270
Y‐o‐Y %
-7.6
-7.6
-8.3
-7
1.2
NA
0.3
‐0.3
9.4
10.0
9.1
134.0
4.6
1,396.6
NA
15.3
7.4
4.9
‐0.3
7.0
‐5.8
3.9
5,240
4,120
33,700
256,210
308,770
87,890
220,880
32,060
89,360
5,020
-33,170
33,540
228,440
307,870
94,650
213,220
30,360
79,980
-4
-905
0
-11
0
8
-3
-5
-10
2.2
7.6
4.4
19.3
1.6
4.6
1.6
4.4
Basis Points (BPS)
-72
25
-51
30
-16
88
-9
57
278,180
58,340
219,840
68.1
Margin %
7.9
5.7
7.1
5.6
262,840
52,810
210,030
64.2
Margin %
8.5
5.9
7.3
5.8
-6
-9
-4
-6
BPS
63
26
16
19
Source: Company Filings; IndiaNivesh Research;
IndiaNivesh Research
Reliance Industries Ltd|Result Update
October 14, 2014 | 3
Result Update
October 14, 2014
Liberty Shoes Ltd.
Previous
Disappointing performance on bottomline; downgrade to HOLD
with revised target price of Rs 336
Rating : HOLD
Rating : BUY
Rs Mn
Target : Rs.336
Target : Rs.400
Current
CMP : Rs.315
STOCK INFO
BSE
526596
NSE
LIBERTSHOE
Bloomberg
LBS IN
Reuters
LIBS.BO
Sector
Footwear
Face Value (Rs)
10
Equity Capital (Rs mn)
170
Mkt Cap (Rs mn)
5,368
52w H/L (Rs) (Adj.)
351/82
3m Avg Daily Volume (BSE + NSE)
418981
SHAREHOLDING PATTERN
Net Sales
EBIDTA
Adj. PAT
Adj. EPS
Margin
EBITDA (%)
Adj. PAT (%)
Source: BSE
STOCK PERFORMANCE (%) 1m
LIBERTY SHOES
-2
SENSEX
-3
3m
14
5
6.0
1.9
9.1
3.3
1,090
82
20
1.2
41.5
31.9
-6.9
5.1
-19.5
34.7
-19.5
34.7
QoQ (bps) YoY (bps)
7.5
-312
-153
1.8
-140
4
Liberty Shoes Ltd reported disappointing Q2FY15E results. The company has
restated previous year figures to include Liberty Retail Revolutions Ltd, the
recently merged retail subsidiary. Net sales were lower by 2.8% at Rs 1438
mn against our expectation of Rs 1479 mn. Domestic sales grew 35.3% yoy to
reach Rs 1343 mn in Q2FY15 and exports grew 14.7% yoy to reach Rs 157.4
mn. The company has mentioned that it has completed major portion of the
institutional order of Rs 480 mn which was missed last quarter. The balance
order would be completed in Q3FY15E.

During the quarter, the company added 16 new exclusive stores in Company
Owned & Company Operated (COCO) & franchise format. Sales in own stores
grew by ~20% yoy to reach Rs 200 mn in Q2FY15 against Rs 173 mn in Q2FY14.
The company plans to add 80-100 more exclusive stores in franchise and COCO
format in FY15E.

As expected, higher proportion of low margin institutional orders have led to
pressure on operating margins. EBITDA margin stood at 6% in Q2FY15 against
7.5% in Q2FY14, contraction of 153 bps (INSPL expectation: 7.5%). EBITDA of
the company grew by 5.1% yoy to reach Rs 86 mn in Q2FY15 from Rs 82 mn in
Q2FY14 (INSPL exp: Rs 111 mn, missed by 22.3%). Adj. PAT (adjusted for minor
exceptional items) stood at Rs 27 mn in Q2FY15 against Rs 20 mn in Q2FY14,
an increase of 34.7% yoy. However, this is far below our expectation of Rs 40
mn, disappointing by 33.2%.

On half yearly basis, the net sales grew by 10.7% yoy to reach Rs 2454 mn in
H1FY15 from Rs 2216 mn in H1FY14. Domestic sales grew 9.6% yoy to reach
Rs 2291 mn in H1FY15 from Rs 2091 mn in H1FY14. Exports stood at Rs 272
mn in H1FY15 against Rs 207 mn in H1FY14, implying growth of 31.7% yoy.
EBITDA of the company grew by a meagre 1.7% yoy to reach Rs 179 mn in
H1FY15 from Rs 176 mn in H1FY14. EBITDA margin contracted 65 bps to reach
7.3% in H1FY15 from 7.9% in H1FY14. Adj. PAT stood at Rs 60 mn in H1FY15
against Rs 53 mn in H1FY14, growth of 13.6%. PAT growth was higher than
EBITDA growth due to higher other income and decline in interest cost.
12m
279
29
Source: Capitaline, IndiaNivesh Research
1,016
93
33
1.9

%
64.9
0.0
0.0
35.1
1,438
86
27
1.6
INSPL Variance
Estimate
(%)
1479
-2.8
111
-22.3
40
-33.2
2.3
-33.2
Var (bps)
7.5
-151
2.7
-85
Source: Company, IndiaNivesh Research
(as on 30th Jun. 2014)
Promoters
FIIs
DIIs
Public & Others
Q2 FY15 Q1 FY15 Q2FY14 QoQ (%) YoY (%)
LIBERTY SHOES v/s SENSEX
470
420
370
320
270
220
170
120
70
Oct/2014
Sep/2014
Jul/2014
Aug/2014
Jun/2014
Apr/2014
Liberty Shoes
May/2014
Mar/2014
Jan/2014
Feb/2014
Dec/2013
Oct/2013
Nov/2013
20
Sensex
Source: Capitaline, IndiaNivesh Research
Daljeet S. Kohli
Head of Research
Mobile: +91 77383 93371, 99205 94087
Tel: +91 22 66188826
[email protected]
Prerna Jhunjhunwala
Research Analyst
Mobile: +91 77388 92065
Tel: +91 22 66188848
[email protected]
IndiaNivesh Research
Estimates Revision
Taking into consideration the H1FY15 performance, we are revising our estimates
downward. Though topline disappointment has been lower, profitability has been
grossly below our expectation. We have revised sales estimate downward by 6%/
7% for FY15/FY16E. We do not expect the company to outperform FY14 EBITDA
margin of 8.2% in FY15E. Hence we have revised our EBITDA margin expectations
IndiaNivesh Securities Private Limited
601 & 602, Sukh Sagar, N. S. Patkar Marg, Girgaum Chowpatty, Mumbai 400 007. Tel: (022) 66188800
IndiaNivesh Research is also available on Bloomberg INNS, Thomson First Call, Reuters and Factiva INDNIV.
Result Update (contd...)
to 8.2% in FY15E. However, we expect the benefit of synergies of merger with retail
subsidiary to kick in FY16E resulting in higher EBITDA margin of 8.8%, though lower
than our earlier expectation of 9.1%. We have revised our EPS downward by 27% /
16% for FY15E / FY16E to stand at Rs 9.9 / 16.8 respectively.
Particulars
Rs Mn
Net Sales
EBIDTA
Adj. PAT
Adj. EPS
Margin
EBITDA (%)
Adj. PAT (%)
Now
5,808
473
168.1
9.9
FY15E
Earlier
6,189
554
230
13.5
8.2
2.9
8.9
3.7
FY16E
Now
Earlier
7,410.3
8,009.0
653.6
730.4
286.1
340.2
16.8
20.0
QoQ (bps) YoY (bps)
-80
8.8
9.1
-83
3.9
4.2
Var (%)
-6
-15
-27
-27
Var (%)
-7
-11
-16
-16
-30
-39
Source: IndiaNivesh Research
Valuation and Outlook
At CMP of Rs 315, the stock trades at PE of 31.9x and 18.8x its FY15E and FY16E
earnings of Rs 9.9 and Rs 16.8 per share respectively. The company plans to expand
its reach aggressively by increasing its store count to from 537 currently to 800 over
the next three years. The synergy arising from merger of retail subsidiary are yet to
show results. Also, the company is yet to come out with concrete plan on corporate
restructuring. Both the events are key catalyst for the stock to perform. We retain
our target multiple of 20x on the stock to arrive at target price of Rs 336 (earlier
target price – Rs 400). We revise our rating to HOLD from BUY earlier.
Financial Performance
Rs in mn
Q2 FY15
Q1 FY15
H1FY15
H1FY14
Net sales
1,438
1,016
1,090
41.5
31.9
2,454
2,216
10.7
Raw Materials
Staff cost
Other expenditure
Operating Expenses
826
162
364
1,352
455
147
322
924
555
145
308
1,008
81.8
9.9
12.9
46.3
48.8
11.4
18.2
34.1
1,281
309
686
2,276
1,140
291
610
2,041
12.4
6.1
12.5
11.5
EBITDA
EBITDA Margin (%)
86
6.0%
93
9.1%
82
7.5%
‐6.9
5.1
179
7.3%
176
7.9%
1.7
Other Operating Income
Other Income
Depreciation
Profit bef. Int. & Tax
7
1
28
66
3
1
27
70
4
(0)
27
59
100.6
22.2
6.2
‐6.2
63.0
‐357.3
5.7
11.4
10
2
55
136
8
0
53
131
36.7
628.0
4.8
3.7
Interest & finance ch.
Profit before tax
40
26
37
34
40
19
10.0
‐23.9
‐0.1
36.2
77
59
79
52
‐2.7
13.5
Total tax expenses
Adj. Net profit
(1)
27
1
33
(1)
20
‐286.9
‐19.5
5.4
34.7
(0)
60
(0)
53
24.7
13.6
Exceptional Items
Reported PAT
(1)
25
0
33
0
20
‐24.0
25.0
(1)
59
1
53
10.2
‐4.0%
1.9%
1.6%
3.3%
‐5.2%
1.8%
‐0.8%
2.4%
‐0.7%
2.4%
1.6
1.9
1.2
3.5
3.1
Effective tax rate
PAT Margins (%)
Adj. EPS
Q2FY14 QoQ (%)
‐19.5
YoY (%)
34.7
YoY(%)
13.6
Source: Company, IndiaNivesh Research
IndiaNivesh Research
Liberty Shoes Ltd.|Result Update
October 14, 2014 | 2
Result Update (contd...)
Financial Statements
Balance sheet
Income statement
Y E March (Rs m)
Net sales
Growth %
Expenditure
Raw Material
Advertisement and selling expenses
Employee
Others
EBITDA
Growth %
EBITDA Margin %
Other Income
Depreciation and amortisation
EBIT
EBIT Margin %
Interest
Exceptional/Extraordinary item
PBT
PBT Margin %
Tax
Effective tax rate %
PAT Before Minority Interest
Minority Interest
PAT After Minority Interest
Adj. PAT
Growth%
FY 12
3564
15.0
3266
1716
443
437
670
298
29.4
8.4
13
97
214
6.0
138
-38
38
1.1
-4
‐10
42
-2
44
82
‐28.0
FY 13
3629
1.8
3345
1717
481
460
687
284
‐4.9
7.8
20
104
199
5.5
143
-4
53
1.5
-1
‐2
54
0
54
58
22.9
2.3
1.6
Y E March (Rs m)
Net Profit Before Interest, Tax and
Extraordinary Items
Adjustment for:
Depreciation
Others
Changes in working capital
Tax expenses
Cash flow from operations
Capital expenditure
Free Cash Flow
Others
Cash flow from investments
Interest
Loans availed or (repaid)
FY 12
FY 13
165
179
302
370
543
97
-4
-28
-20
210
-98
111
3
‐95
-127
-13
104
-18
45
-12
299
-95
205
-87
‐182
-133
35
111
-12
-276
-11
114
-87
27
2
‐84
-160
25
122
-10
76
-36
522
-177
345
2
‐175
-170
136
131
-11
-568
-61
34
-185
‐151
2
‐183
-203
314
Refund of Share Application Money
Dividend paid (incl tax)
Cash flow from Financing
Net change in cash
Cash at the beginning of the year
Cash at the end of the year
Other Bank Balances
Cash as per Balance Sheet
-55
0
‐195
-80
179
99
1
101
0
0
‐98
19
101
120
4
124
0
0
‐134
-105
124
19
4
23
0
-30
‐64
283
23
306
4
310
0
-30
81
-68
310
243
4
247
Adj. PAT Margin %
FY 14 FY 15E FY 16E
4835 5808 7410
33.2
20.1
27.6
4440 5334 6757
2534 3066 3890
643
772
986
591
697
874
672
799 1006
394
473
654
39.0
20.0
38.1
8.2
8.2
8.8
18
19
21
111
122
131
302
370
543
6.2
6.4
7.3
160
170
203
-2
0
0
140
200
341
2.9
3.4
4.6
8
32
55
6
16
16
132
168
286
0
0
0
132
168
286
134
168
286
145.2
27.3
70.2
2.8
2.9
Y E March (Rs m)
Share Capital
Reserves & Surplus
Net Worth
Total debt
Net defered tax liability
Total Liabilities
Gross Fixed Assets
Less Depreciation
Capital Work in Progress
Net Fixed Assets
Goodwill on Consolidation
Investments
Current Assets
Inventories
Sundry Debtors
Cash & Bank Balance
Loans & advances
Other Current assets
Current Liabilities & provisions
Net Current Assets
Mis Exp not written off
Total assets
FY 12 FY 13
170
170
1147 1197
1318 1367
1047 1146
51
51
2416 2564
1767 1850
740
838
1
2
1028 1014
0
92
0
0
2293 2409
1028 1112
716
792
101
124
427
358
22
23
905
951
1388 1458
0
0
2416 2564
FY 14
170
1207
1378
1171
48
2597
1937
949
3
991
0
0
2696
1126
1175
23
333
40
1090
1606
0
2597
FY 15E
170
1345
1516
1307
44
2867
2114
1071
3
1046
0
0
3233
1278
1220
310
377
48
1411
1821
0
2867
FY 16E
170
1601
1772
1621
38
3430
2299
1202
3
1100
0
0
3935
1482
1704
247
445
57
1604
2331
0
3430
FY 12 FY 13
4.8
3.4
8.3
9.3
77.3 80.2
FY 14
7.9
14.3
80.9
FY 15E
9.9
17.0
89.0
FY 16E
16.8
24.5
104.0
3.9
Cash Flow
Key ratios
FY 14 FY 15E FY 16E
Y E March
Adj. EPS (Rs)
Cash EPS (Rs)
BVPS
DPS (Rs)
Adj. P/E (x)
P/CEPS (x)
P/BV (x)
EV/EBITDA(x)
M cap/sales (x)
ROCE
ROE
Inventory (days)
Debtors (days)
Trade Payables (days)
0.0
0.0
1.5
1.5
1.5
65.4
38.2
4.1
18.9
1.3
92.7
34.0
3.9
20.1
1.3
40.1
22.1
3.9
14.8
1.0
31.9
18.5
3.5
12.0
0.8
18.8
12.9
3.0
9.3
0.6
9.0
3.3
8.2
4.0
11.9
9.6
13.8
11.6
17.5
17.4
104.5 107.6
68.4 75.8
69.1 69.4
84.5
74.2
54.5
75.5
75.2
56.1
68.0
72.0
55.9
Total Asset Turnover (x)
Fixed Asset Turnover (x)
1.1
3.5
1.1
3.6
1.4
4.9
1.5
5.6
1.6
6.7
Debt/Equity (x)
Debt/Ebitda (x)
Interest Coverage (x)
Dividend Yield %
0.8
3.5
1.6
0.0
0.8
4.0
1.4
0.0
0.8
3.0
1.9
0.5
0.9
2.8
2.2
0.5
0.9
2.5
2.7
0.5
Source: Company, IndiaNivesh Research
IndiaNivesh Research
Liberty Shoes Ltd.|Result Update
October 14, 2014 | 3
Pharma Sector
October 13, 2014
Q2FY15E Results Preview
Aggregate y-y growth in earnings to slow down a bit on high
base of past year; however outlook remains promising
Target Price Reco
(Rs)
Ajanta Pharma
1,569 HOLD
Alembic Pharma
412 HOLD
Aurobindo Pharma
1,154 BUY
Biocon
479 HOLD
Cadila
1,553 BUY
Cipla
632 HOLD
Divis Lab
1,802 HOLD
Dr Reddy
3,453 BUY
Glenmark
775 HOLD
Ipca Lab
868 BUY
JB Chemicals
295 BUY
Jubilant LifeSciences 154 HOLD
Lupin
1,545 BUY
Sharon Bio‐medicine 140 BUY
Shilpa Medicare
542 HOLD
Sun Pharma
754 HOLD
Torrent
964 HOLD
Company
We expect 17 companies under INSPL pharma universe to deliver 20% y-y and 15%
y-y growth in sales and adjusted PAT respectively for 2Q FY15. The major companies
in the pack – Sun Pharma (SUNP IN) and Dr. Reddy’s Lab (DRRD IN), which contributes
32% and 12% to the aggregate adjusted PAT, are expected to show muted growth of
13% y-y and (11% y-y) for the quarter. This is due to lesser number of limited
competition products and few launches in US market for SUNP as well as DRRD.
However, the other major companies – Lupin and Aurobindo Pharma, which
contributes 11% and 8% to the aggregate adjusted PAT are expected to show superior
growth in earnings due to strong execution in US market. Lupin is expected to show
robust growth in domestic formulation market as well. EBITDA margin is expected
to remain stable at 25.9% for the quarter. The rupee has appreciated by ~3% y-y
and remained at similar rate sequentially. This would have adverse impact on
earnings compared to previous quarters, when companies had benefit of rupee
depreciation.
US generics is expected to grow by 27% y-y for the quarter: US generics remains
the interesting opportunity for most of the Indian pharma players. In addition to
plain vanilla generics and para IV filings, pharma companies have already started
investing heavily in limited competition complex molecules. These opportunities
have higher as well as sustained profitability unlike limited period profitability seen
in FTF exclusivities. Though the opportunity remains promising, there could be
quarterly volatility depending on product approvals from USFDA. As a result, we
may see relatively lower y-y growth during the quarter.
Source: IndiaNivesh Research
High base of past year may result in downtrend in y-y
growth in US generic segment
Torrent Pharma is expected to show superior growth
compared to peers
100,000
90,000
80,000
70,000
60,000
50,000
40,000
30,000
20,000
10,000
‐
70.0%
63.3%
56.7%
200.0
48.1%
50.0%
42.6%
40.0%
31.6%
27.0%
150.0
100.0
30.0%
20.0%
10.0%
58.6 Sep‐13
Dec‐13
Mar‐14
Revenue (in Rs Mn)
Source: Company; IndiaNivesh Research
Jun‐14
2Q FY15E
43.7 50.0
39.1 27.9 10.8 ‐
0.0%
Jun‐13
178.8 60.0%
(50.0)
Torrent
Cadila Aurobindo
Pharma Healthcare Pharma
y‐o‐y
Lupin
(3.2)
Dr Reddy's
Sun
Glenmark
Lab
Pharma
Growth (y‐y, %)
Note: Revenue growth in Rupee terms
Source: Company; IndiaNivesh Research
Daljeet S. Kohli
Head of Research
Mobile: +91 77383 93371, 99205 94087
Tel: +91 22 66188826
[email protected]
Tushar Manudhane
Research Analyst
Aggregate domestic formulation is expected to grow by 17% y-y: After four quarters
of slow growth till 4Q FY14, due to pricing cuts, domestic formulation segment is
expected to show better performance in 2Q FY15. Domestic formulation segment
has already showed improvement in 1Q FY15 and we expect this recovery to
continue. Apart from new product launches and volume growth, pricing growth
would also support the overall growth in domestic formulation going forward. The
companies like Glenmark, Cipla and Sun Pharma would show superior growth
compared to peers due to higher exposure to chronic portfolio.
Mobile: +91 75066 45373
Tel: +91 22 66188835
[email protected]
IndiaNivesh Research
IndiaNivesh Securities Private Limited
601 & 602, Sukh Sagar, N. S. Patkar Marg, Girgaum Chowpatty, Mumbai 400 007. Tel: (022) 66188800
IndiaNivesh Research is also available on Bloomberg INNS, Thomson First Call, Reuters and Factiva INDNIV.
Q2FY15E Results Preview (contd...)
Domestic formulation growth on revival path for INSPL
pharma universe
70,000
16.0%
60,000
50,000
40,000
11.0%
11.9%
16.9%
18.0%
12.7%
9.3%
30.0
14.0%
25.0
12.0%
20.0
10.0%
15.0
6.0%
20,000
4.0%
10,000
35.0
16.0%
8.0%
30,000
Addition of Elder products may result in abnormal y-y
growth for Torrent Pharma
2.0%
31.8
18.8
18.0
18.0
18.0
15.0
15.0
14.0
12.0
11.5
10.0
5.0
0.0
0.0%
Jun-13
Sep-13
Dec-13
Mar-14
Revenue (in Rs Mn)
Jun-14
2Q FY15E
y-o-y
Growth (y-y, %)
Source: Company; IndiaNivesh Research
Source: Company; IndiaNivesh Research
Though this quarter could be an aberration in terms of growth in earnings, we remain bullish on the sector as there are ample
opportunities yet to be tapped by Indian pharma companies. The Indian pharma companies are building the foundation in terms of
R&D and marketing to take the advantage of the opportunities in regulated as well as emerging markets. Our top picks are Aurobindo
Pharma, Lupin, Cadila Healthcare, JB Chemicals, Sharon Bio-medicine and have BUY rating on the stocks. We continue to like Ajanta
Pharma, Alembic Pharma, Divis Lab, Shilpa Medicare and Torrent Pharma. However, we have HOLD rating based on valuation.
Valuations & Recommendation:
Company
Ajanta Pharma
Alembic Pharma
Aurobindo Pharma
Biocon
Cadila
Cipla
Divis Lab
Dr Reddy
Glenmark
Ipca Lab
JB Chemicals
Jubilant LifeSciences
Lupin
Sharon Bio-medicine
Shilpa Medicare
Sun Pharma
Torrent
Sales (Rs mn)
EBITDA Margin(%)
FY15E
FY16E
FY15E
FY16E
13,935
16,466
30.2
30.3
22,694
26,585
20.3
21.0
121,260
137,339
21.4
22.2
33,263
38,801
23.5
23.1
84,145
99,115
19.2
19.2
112,980
136,037
21.6
24.0
31,786
38,011
42.7
43.1
150,023
169,881
22.6
22.2
69,747
80,060
21.3
21.4
35,985
40,434
23.8
25.2
11,282
12,734
16.1
16.6
62,022
70,639
11.2
15.3
135,950
158,435
26.3
26.6
1,590
1,908
13.2
15.2
7,441
9,421
20.7
21.0
186,025
202,012
43.2
41.7
48,834
48,834
25.3
25.3
Adj. PAT (Rs mn)
FY15E
FY16E
2,772
3,262
3,124
3,834
15,470
18,650
4,608
5,320
10,287
10,287
14,240
20,305
9,951
11,962
22,035
24,401
8,965
10,460
5,501
6,847
1,559
1,784
1,127
2,638
24,357
28,859
113
173
994
1,306
62,357
65,078
7,826
7,826
EPS (Rs)
FY15E
FY16E
78.4
92.3
16.6
20.3
53.2
64.1
23.0
26.6
50.2
64.7
17.7
25.3
75.0
90.1
129.4
143.3
33.2
38.8
43.6
54.3
18.4
21.1
7.1
16.6
54.3
64.4
8.0
14.0
25.8
33.9
30.1
31.4
46.2
46.2
ROE (%)
FY15E
FY16E
32.9
28.9
28.7
25.1
30.5
28.0
13.8
14.3
24.5
25.6
16.9
21.0
28.7
27.2
21.0
20.2
26.7
25.0
32.4
32.1
18.6
20.8
4.7
13.9
27.1
25.2
5.4
7.6
20.2
21.2
44.3
43.2
31.1
31.1
P/E (x)
Target Price
Reco
FY15E
FY16E
(Rs)
21.7
18.4
1,569 HOLD
23.4
19.0
412 HOLD
17.6
14.6
1,154 BUY
20.9
18.1
479 HOLD
26.3
20.4
1,553 BUY
33.4
23.4
632 HOLD
23.5
19.6
1,802 HOLD
23.2
20.9
3,453 BUY
21.4
18.3
775 HOLD
17.1
13.7
868 BUY
12.4
10.9
295 BUY
20.6
8.8
154 HOLD
24.4
20.6
1,545 BUY
8.9
5.1
140 BUY
21.0
15.9
542 HOLD
27.2
26.1
754 HOLD
18.3
18.3
964 HOLD
Source: IndiaNivesh Research
Ajanta Pharma Ltd: CMP= Rs 1700 Reco= HOLD, TP= Rs 1569
(Rs. In Mn.) SA
Q2FY15E
Q2FY14A
Q1FY15A
SALES
EBITDA
Adj Net Profit
Forex (loss) Gain
Reported Net profit
Adj. EPS (Rs)
3,474
1,059
758
758
21.4
2,708
751
554
5
558
15.6
2,808
830
586
1
588
16.6
EBITDA Margins
Net Margins
30.5
21.8
27.7
20.4
29.6
20.9
Y-o-Y Ch. Q-o-Q Ch.
(%)
(%)
28.3
23.7
41.1
27.6
36.9
29.2
35.8
29.0
36.9
29.2
bps
bps
277
93
137
93
Source: Company; IndiaNivesh Research
IndiaNivesh Research
Pharma Sector
October 13, 2014 | 2
Q2FY15E Results Preview (contd...)
We expect Ajanta Pharma (AJP IN) to sustain the growth momentum with 28%y-y
and 37% y-y growth in sales and adjusted PAT, respectively. Domestic formulation,
Asia and Africa would drive growth in revenue as well as profitability for the quarter.
EBITDA margin is expected to improve by 277bps on the back of improved operating
leverage.
Key factors to watch: Update of number of ANDAs filed and status of execution of
new facility in Gujarat.
Alembic Pharmaceuticals Ltd: CMP = Rs 387, Reco= HOLD, TP =
Rs 412
Rs Mn
Q2FY15E Q2FY14A Q1FY15A Y-o-Y Ch. (%) Q-o-Q Ch. (%)
Sales
5,651
4,859
4,937
16.3
14.5
EBITDA
1,140
973
967
17.2
17.9
760
662
647
14.9
17.6
-
-
-
-
-
Reported Net Profit
760
662
647
14.9
17.6
Adj EPS (Rs.)
4.03
3.51
3.43
14.9
17.6
bps
Adj Net Profit
Forex (loss) Gain
EBITDA margins
20.2
20.0
19.6
15
bps
59
PAT Margins
13.5
13.6
13.1
(17)
36
Source: Company; IndiaNivesh Research
Alembic Pharmaceuticals (ALPM IN) is expected to show sales of Rs5.6bn with 16.3%
y-y growth for the quarter. The y-y growth would be mainly driven by higher exports,
backed by new product approvals (Telmisartan) during the quarter. US sales are
expected to grow at a strong rate of 42% y-y to US$26mn for the quarter. This
would help ALPM to enhance EBITDA margin marginally to 20.2% and enable
adjusted PAT to grow by 15% y-y to Rs760mn.
Key factors to watch: Progress of execution of generic business. Pricing and volume
growth in domestic formulation would also be the key factor to watch out.
Aurobindo Pharma: CMP= Rs 938, Reco=BUY, TP= 1154
(Rs Mn)
Sales
Q2FY15E Q2FY14A Q1FY15A Y-o-Y Ch.(%) Q-o-Q Ch. (%)
28,980
18,975
28,946
52.7
0.1
6,582
4,129
42.4
(5.1)
34.3
(1.7)
EBITDA
6,243
4,384
Net Profit
4,057
3,022
Forex (loss) Gain/other
-
(672)
26
(100.0)
(100.0)
4,057
2,350
4,154
72.7
(2.3)
13.94
10.38
14.19
34.3
(1.7)
bps
bps
EBITDA Margins (%)
21.5
23.1
22.7
(156)
(120)
Net Margins (%)
14.0
15.9
14.3
(193)
(26)
Net Profit Reported
Adj EPS (Rs.)
Source: Company; IndiaNivesh Research
We expect Aurobindo Pharma (ARBP IN) to deliver robust performance during the
quarter led by strong execution in US generics segment. We expect US generics
sales to maintain strong momentum and grow by 48% y-y to US$175mn due to new
product launches and increased market share in existing products. Overall sales are
expected to grow by 53% y-y to Rs29bn and PAT to grow by 34% y-y to Rs4bn.
However, the q-q EBITDA margin is expected to slip 120bps due to higher exclusivity
related sales during 1Q FY15.
Key factors to watch: progress on turnaround of acquired Actavis operations and
performance in US market.
IndiaNivesh Research
Pharma Sector
October 13, 2014 | 3
Q2FY15E Results Preview (contd...)
Biocon Ltd: CMP = Rs 482 , Reco= HOLD, TP = Rs 479
BIOS IN (in Rs Mn)
Out-licensing income
Q2FY15E
Q2FY14A
Q1FY15A Y-o-Y Ch. (%) Q-o-Q Ch. (%)
34
190
7,304
6,996
Core sales
40
8,099
10.9
15.8
NET SALES
8,139
7,338
7,186
10.9
13.3
EBITDA
1,823
1,688
1,673
8.0
9.0
Adj Net Profit
1,175
1,022
1,030
14.9
14.0
Rep Net Profit
1,175
1,022
1,030
14.9
14.0
5.87
5.11
5.15
14.9
14.0
bps
bps
EPS (Rs.)
Adj EBITDA Margins (%)
22.0
22.6
21.2
(63)
82
Net Margins (%)
14.0
13.5
12.0
48
200
Source: Company; IndiaNivesh Research
Biocon is expected to show decent growth of 11% y-y in net sales and 15% y-y in
adjusted PAT to Rs8bn and Rs1.2bn, respectively. The q-q performance is expected
to be much better as 1Q FY15 was impacted by political issues in MENA region.
Branded domestic formulation is expected to continue to do well in 2Q FY15,
however, the growth rate would look high at 18% y-y due to low base of past year.
Key factors to watch: Performance in domestic branded formulation segment, R&D
spend, progress on various products in pipeline and performance in CRAMS business.
Cadila Healthcare: CMP = Rs 1323, Reco = BUY, TP=Rs 1553
CDH IN (Rs Mn)
Q2FY15E
Q2FY14A
20,939
17,254
20,204
21.4
3.6
EBITDA
3,947
2,794
3,761
41.2
4.9
Adj Net Profit
2,551
1,897
2,414
34.5
5.7
-
(63)
(12)
-
-
Rep Net Profit
2,551
1,834
2,402
39.1
6.2
EPS (Rs.)
12.46
9.26
11.79
34.5
5.7
bps
bps
EBITDA Margins (%)
18.8
16.2
18.6
265
23
Net Margins (%)
12.2
11.0
11.9
119
24
Sales
Forex (loss) Gain
Q1FY15A Y-o-Y Ch. (%)
Q-o-Q Ch.
Source: Company; IndiaNivesh Research
We expect Cadila Healthcare to report revenue growth of 21.4% y-y and adjusted
PAT growth of 35% y-y, led by strong execution in US generics. We expect US generics
sales to grow by 62% y-y to US$125mn for the quarter. EBITDA margin is expected
to remain stable at 18.8%, sequentially. We expect gradual pick up in revenues
from domestic formulation segment.
Key factors to watch: Progress on ANDA approvals and revival in growth of domestic
formulation segment.
Cipla Ltd: CMP= Rs 592, Reco= HOLD, TP = Rs 632
CIPLA IN (Rs Mn)
Sales
Q2FY15E
Q2FY14A
Q1FY15A Y-o-Y Ch. (%) Q-o-Q Ch. (%)
28,226
24,632
26,472
EBITDA
6,129
Adj Net Profit
3,615
5,642
3,205
-
Forex (loss) Gain/Exceptional
Rep Net Profit
14.6
6.6
5,418
8.6
13.1
2,696
12.8
34.1
400
400
-
-
3,615
3,605
2,946
0.3
22.7
EPS (Rs.)
4.50
3.99
3.36
12.8
34.1
EBITDA Margins (%)
21.7
22.9
20.5
(119)
125
Net Margins (%)
12.8
13.0
10.2
(20)
262
bps
bps
Source: Company; IndiaNivesh Research
IndiaNivesh Research
Pharma Sector
October 13, 2014 | 4
Q2FY15E Results Preview (contd...)
We expect Cipla to show decent growth of 15% y-y and 13% y-y to Rs28bn and
Rs3.6bn, respectively. The growth would be driven by domestic formulation and
exports. EBITDA margin is expected to slip 119bps y-y due to higher expense related
to building front end in US market.
Key factors to watch: Progress on Inhaler launches in key European markets and
building front end in US market.
Divis Lab (SA): CMP= Rs 1765, Reco= HOLD, TP= Rs 1802
DIVI IN (SA Rs Mn)
Q2FY15E Q2FY14A Q1FY15A Y-o-Y Ch. (%) Q-o-Q Ch. (%)
6,398
25.0
10.6
29.4
1,739
2,323
1,666
21.4
27.9
33.5
310
14
-
(100.0)
2,224
2,049
1,679
8.5
32.4
16.75
13.10
27.9
33.5
bps
bps
Sales
7,074
5,659
EBITDA
3,006
2,477
Adj Net Profit
2,224
-
Rep Net profit
Adj EPS (Rs.)
Forex (loss) gain
12.55
EBITDA Margins
42.5
43.8
36.3
(126)
619
Net Margins
31.4
30.7
26.0
70
540
Source: Company; IndiaNivesh Research
Divis Laboratories is expected to show 25% y-y increase in sales to Rs7bn on account
of increased contract orders from its customers. Relatively higher margin contracts
would also result in improving EBITDA margins sequentially to 42.5% for the quarter
and adjusted PAT to grow by 28% to Rs2.2bn.
Key factors to watch: Revenue growth and improvement in EBITDA margins
Dr Reddy’s Lab: CMP= Rs 3000, Reco= BUY, TP= Rs 3453
DRRD IN (Rs Mn)
SALES
Q2FY15E Q2FY14A Q1FY15A Y-o-Y Ch. (%) Q-o-Q Ch. (%)
15.2
9.9
6,289
4.4
11.6
5,503
(10.6)
5.7
38,667
33,575
35,175
Operating Profit (EBIT)
7,019
6,723
Adj Net Profit
5,818
6,508
Forex (loss) gain/ other
-
394
21
NA
-
Rep Net Profit
5,818
6,903
5,526
(15.7)
5.3
EPS (Rs.)
34.25
38.32
32.40
(10.6)
5.7
bps
bps
EBIT Margins (%)
18.2
20.0
17.9
(187)
27
Net Margins (%)
15.0
19.4
15.6
(434)
(60)
Source: Company; IndiaNivesh Research
Dr. Reddy’s Laboratories is expected to show 11% y-y decline in adjusted PAT to
Rs5.8bn. Though sales are expected to grow by 15% y-y, EBITDA margin is expected
to decline 187bps y-y due to higher limited competition products sales in 2Q FY14.
US sales are expected to grow at moderate rate of 30% y-y to US$280mn due to
lesser number of limited competition product launches during the quarter.
Key factors to watch: performance in PSAI segment, domestic formulation segment
and US market. R&D spend would also be the key factor to watch.
IndiaNivesh Research
Pharma Sector
October 13, 2014 | 5
Q2FY15E Results Preview (contd...)
Glenmark Pharmaceuticals Ltd: CMP= Rs 711, Reco= HOLD,
TP=Rs 775
GNP IN (Rs Mn)
Core sales
Out-licensing income
Total sales
EBITDA
Adj Net Profit
Forex (loss)
Rep Net Profit
Adj EPS (Rs.)
Q2FY15E Q2FY14A Q1FY15A Y-o-Y Ch.
15,869
14,512
14,570
9.3
118
299
15,869
14,630
14,869
8.5
3,476
3,039
3,124
14.4
1,934
1,425
1,550
35.7
1,934
1,543
1,849
25.3
7.1
5.3
5.7
35.7
bps
21.9
20.9
21.0
97
12.2
9.7
10.4
245
EBITDA Margins (%)
Net Margins (%)
Q-o-Q Ch.
8.9
6.7
11.3
24.8
NA
4.6
24.8
bps
89
176
Source: Company; IndiaNivesh Research
Glenmark Pharmaceuticals is expected to show strong growth of 36% y-y in adjusted
PAT partly on account of low base of past year and improvement in growth of
domestic formulation segment. Though there were new product launches in US
market, US sales is expected to remain stable y-y at US$90mn due to high base of
past year. We expect domestic formulation sales to increase by 19% y-y to Rs5bn on
the back of increased traction in existing products as well as new product launches.
Overall sales are expected to grow by 9% y-y for the quarter.
Key factors to watch: Revenue performance across the markets, EBITDA margins &
any data point on R&D front.
Ipca Labs (SA): CMP= Rs 744, Reco= BUY, TP= Rs 868
IPCA IN (Rs Mn)
Q2FY15E Q2FY14A Q1FY15A Y-o-Y Ch. (%) Q-o-Q Ch. (%)
Sales
9,409
8,343
9,282
12.8
1.4
EBITDA
2,299
2,345
2,309
(2.0)
(0.4)
Adj Net Profit
1,507
1,694
1,432
(11.0)
5.2
-
(399)
23
-
(100.0)
Rep Net profit
1,507
1,295
1,455
16.4
3.6
Adj EPS (Rs)
11.94
13.42
11.35
(11.0)
5.2
bps
bps
Forex (loss) gain
EBITDA Margins (%)
24.4
28.1
24.9
(367)
(44)
Net Margins (%)
16.0
20.3
15.4
(428)
59
Source: Company; IndiaNivesh Research
We expect IPCA to show decent growth of 13% y-y in sales to Rs9.4bn, led by
domestic branded and CIS branded segment. However, high base of past year is
expected to result in adjusted PAT to decline by 11% to Rs1.5bn.
Key factor to watch: Progress of clearance of USFDA issues at Ratlam facilty.
JB Chemicals & Pharmaceuticals Ltd (SA): CMP= Rs 229,
Reco=,BUY, TP= Rs 295
JBCL IN Rs Mn (SA)
Sales
Q2FY15E
Q2FY14A Q1FY15A Y-o-Y Ch. (%) Q-o-Q Ch. (%)
2,821
2,475
EBITDA
524
Adj Net Profit
440
Forex (loss) gain/other
-
2,567
14.0
9.9
446
420
17.6
24.9
407
276
8.2
59.2
(75)
42
-
(100.0)
Rep Net Profit
440
332
318
32.6
38.3
Adj EPS
5.2
4.8
3.8
8.2
38.3
EBITDA Margins (%)
18.6
18.0
16.4
56
224
Net Margins (%)
15.6
16.4
10.8
(83)
483
bps
bps
Source: Company; IndiaNivesh Research
IndiaNivesh Research
Pharma Sector
October 13, 2014 | 6
Q2FY15E Results Preview (contd...)
JB Chemicals is expected to show 14% y-y growth in sales, driven by healthy growth
in exports as well as domestic formulation. Increased operating leverage is expected
to result in EBITDA margin to improve from 16.4% to 18.6%. Adjusted PAT is expected
to show relatively lower growth of 8.2% due to higher tax rate.
Key factors to watch: Expansion in EBITDA margins & revenue growth in domestic
market.
Jubilant Life Sciences Ltd: CMP= Rs 146, Reco= HOLD, TP=Rs 154
JOL IN (Rs Mn)
Sales
EBITDA
Adj Net Profit
Q2FY15E
Adj EPS
Q1FY15A
Y-o-Y Ch. Q-o-Q Ch. (%)
15,040
14,243
14,605
5.6
3.0
1,767
2,596
1,329
(31.9)
32.9
(15.1)
199
696
235
(71.4)
-
(1,502)
(187)
-
-
199
(806)
48
NA
316.5
1.2
4.4
1.5
(71.4)
(15.1)
Forex (loss) gain
Rep Net Profit
Q2FY14A
bps
EBITDA Margins (%)
Net Margins (%)
bps
11.7
18.2
9.1
(648)
265
1.3
4.9
1.6
(356)
(28)
Source: Company; IndiaNivesh Research
We expect Jubilant Life Sciences to show 71% y-y decline in adjusted PAT due to
subdued performance in lifescience ingredients as well as pharmaceuticals business.
The pharma segment was impacted in 1Q FY15 due to shut down at Montreal facility
after USFDA warning letter. The site was closed for 10 weeks. We expect gradual
improvement in sales from this site and as a result, the performance for the quarter
is expected to be subdued. Sales are expected to grow by 5%y-y to Rs15bn and
EBITDA is expected to decrease 276bps y-y to 15.5%.
Key factors to watch: Pricing & volume growth, EBITDA margins, pricing scenario
in chemical business and Symtet capacity utilization.
Lupin Ltd: CMP= Rs 1328, Reco= BUY, TP= Rs 1545
LPC IN (Rs Mn)
Sales
Q2FY15E Q2FY14A Q1FY15A Y-o-Y Ch. (%) Q-o-Q Ch. (%)
32,462
26,315
32,840
EBITDA
9,286
49.0
(12.2)
5,478
6,232
4,062
10,579
Adj Net Profit
6,248
34.9
(12.3)
-
-
-
-
-
Rep Net Profit
5,478
4,062
6,248
34.9
(12.3)
Adj EPS (Rs.)
12.25
9.09
13.98
34.9
(12.3)
bps
bps
EBITDA Margins (%)
28.60
23.68
32.21
492
(361)
Net Margins (%)
16.88
15.44
19.03
144
(215)
Forex (loss) gain/exceptional
23.4
(1.2)
Source: Company; IndiaNivesh Research
We expect Lupin to deliver sustained growth in earnings, with 24% y-y growth in
sales and 35% y-y growth in adjusted PAT to Rs32.5bn and Rs5.5bn, respectively.
This would be driven by healthy growth in domestic formulation and strong growth
in US market. We expect US sales to grow by 44% y-y to US$240mn led by increased
traction in existing products.
Key factors to watch: Progress on approvals of key products in US market and
performance in domestic formulation segment.
IndiaNivesh Research
Pharma Sector
October 13, 2014 | 7
Q2FY15E Results Preview (contd...)
Sharon Biomedicine: CMP=Rs 71, Reco=BUY, TP= Rs 140
SBML IN (Rs Mn)
Sales
Q1FY15E Q1FY14A Q4FY14A Y-o-Y Ch.(%) Q-o-Q Ch. (%)
350
44
22
21
2.1
18.0
Adj Net Profit
25
Reported Net Profit
25
Adj EPS (Rs.)
2.4
315
34
16
15
1.5
12.0
10.8
12.7
6.8
5.2
6.3
372
EBITDA
EBITDA Margins (%)
45
Net Margins (%)
6.5
30.8
0.5
53.0
14.7
63.3
22.8
63.3
14.7
bps
117
bps
(72)
155
48
Note: Year ending June
Source: Company; IndiaNivesh Research
Sharon Biomedicine is expected to show 18% y-y growth in revenue and 63% y-y
growth in adjusted PAT to Rs347mn and Rs25mn, respectively. Improved operating
leverage and low base of past year would result in such high growth in adjusted
PAT.
Key factors to watch: Update of USFDA inspection, revenue growth and EBITDA
margin.
Shilpa Medicare Ltd : CMP=Rs 540, Reco=HOLD, TP= 542
SLPA IN (Rs Mn)
Q2FY15E Q2FY14A Q1FY15A Y-o-Y Ch. (%) Q-o-Q Ch. (%)
Sales
1,389
24.0
21.3
23.5
175
295
171
30.4
36.1
39.8
39
-
-
-
1,685
1,359
EBITDA
364
279
Adj PAT
239
-
Forex (loss) gain/other
Rep Net Profit
239
136
171
75.6
39.8
Adj EPS (Rs.)
6.19
4.55
4.43
36.1
bps
39.8
bps
EBITDA Margins (%)
21.6
20.6
21.2
106
38
Net Margins (%)
14.2
12.9
12.3
126
187
Source: Company; IndiaNivesh Research
We expect Shilpa Medicare to show strong growth of 24% y-y and 36% y-y in sales
and adjusted PAT for the quarter on the back increased traction in oncology products
and higher CRAMS business. EBITDA margin is expected to improve from 20.6% to
21.6% led by higher operating leverage.
Key factors to watch: Growth in revenue and EBITDA, update on USFDA re-inspection
at API unit in Raichur.
Sun Pharmaceutical Industries Ltd: CMP=Rs 819, Reco =
HOLD,TP= Rs754
SUNP IN (Rs Mn)
Q2FY15E
Q2FY14A
Sales
47,562
41,921
39,269
13.5
21.1
EBITDA
20,556
15,382
18,284
17,239
12.4
19.2
13,623
13,905
12.9
10.6
-
-
-
-
-
15,382
13,623
13,905
12.9
10.6
7.7
4.9
7.39
56.9
3.7
bps
bps
Adj Net Profit
Forex/exceptional item
Rep Net Profit
Adj EPS (Rs.)
Q1FY15A Y-o-Y Ch. (%) Q-o-Q Ch. (%)
EBITDA Margins (%)
43.2
43.6
43.9
(39)
(68)
Net Margins (%)
32.3
32.5
35.4
(16)
(307)
Source: Company; IndiaNivesh Research
IndiaNivesh Research
Pharma Sector
October 13, 2014 | 8
Q2FY15E Results Preview (contd...)
We expect Sun Pharmaceuticals to show 13.5% y-y and 13% y-y growth in sales and
adjusted PAT, driven by healthy performance in domestic formulation. The high base
effect in US market would result in relatively low growth in US markets. As a result,
we expect US sales to grow at moderate rate of 14% y-y to US$ 478mn. Out of
US$478mn, we expect Taro to contribute US$214mn for the quarter. We expect
Taro sales to grow at modest rate of 4% y-y for the quarter due to high base of past
year. We expect EBITDA margin to sustain at 43.2% due to superior product mix.
Key factors to watch: Performance in key markets of India and US.
Torrent Pharmaceutical Ltd: CMP=Rs 845, Reco=HOLD, TP =
Rs 964
TRP IN (Rs Mn)
Sales
EBITDA
Adj Net Profit
Q2FY15E
Q2FY14A
Q1FY15A
Y-o-Y Ch. Q-o-Q Ch.
12,927
9,360
10,920
38.1
18.4
2,800
1,796
1,430
1,030
3,230
95.8
(13.3)
2,560
74.3
(29.9)
-
-
-
Rep Net profit
1,871
1,130
2,560
65.5
(26.9)
Adj EPS (Rs.)
10.61
6.09
12.23
74.3
(13.3)
bps
bps
Forex (loss) gain
-
-
EBITDA Margins (%)
21.7
15.3
29.6
638
(792)
Net Margins (%)
13.9
11.0
23.4
288
(955)
Source: Company; IndiaNivesh Research
We expect Torrent Pharmaceuticals to deliver strong growth of 38% y-y and 74% yy in sales and adjusted PAT to Rs12.9bn and Rs1.9bn, respectively. This would be
driven by superior growth in US market, addition of acquired business of Elder and
healthy growth in its domestic formulation segment. We expect US sales to grow at
significant rate of 184% y-y to US$47mn for the quarter. However, we expect
sequential decline in EBITDA margin due to limited competition product in 1Q FY15.
Key factors to watch: Progress on ANDA filing in US market and status of synergy
post acquisition of Elder’s portfolio.
IndiaNivesh Research
Pharma Sector
October 13, 2014 | 9
October 14, 2014
IndiaNivesh Universe | Valuation Table
Company Nam e
Auto
Ashok Leyland**
Bajaj Auto
Eicher Motors** $$$
Exide Industries
Hero MotoCorp
Mahindra & Mahindra**
Maruti Suzuki India
Tata Motors Company**
TVS Motor Company
SKF India $$$
Sw araj Engines
Rs. Mn
Mcap
Rs.
CMP
Rs.
TP
Reco
%
(-) Dow n/(+) Up
127,211
679,665
305,444
145,095
574,072
788,135
898,039
1,491,861
105,921
59,126
12,322
45
2,349
11,270
171
2,875
1,269
2,973
496
223
1,121
992
NA
2,556
NA
195
3,240
1,212
2,214
NA
146
808
1,184
NEUTRAL
BUY
NEUTRAL
BUY
BUY
HOLD
HOLD
NOT RATED
HOLD
HOLD
BUY
NA
8.8
NA
14.2
12.7
-4.5
-25.5
NA
-34.5
-27.9
19.3
Information Technology
Infosys
Tata Consultancy Services
Wipro
HCL Technologies###
Tech Mahindra
NIIT Technologies
KPIT Cummins
Mastek
NIIT Ltd
Thinksoft Services Ltd
2,263,955
5,320,982
1,442,538
1,231,376
557,549
24,492
31,170
5,839
8,630
NA
3,943
2,717
585
1,756
2,368
403
159
262
52
NA
3,952
2,666
611
1,697
2,151
414
190
550
55
494
HOLD
HOLD
HOLD
HOLD
HOLD
HOLD
BUY
BUY
HOLD
HOLD
0.2
-1.9
4.5
-3.3
-9.2
2.8
19.3
110.0
5.3
NA
Oil & Gas
Cairn India
Gail India
Oil India
Oil & Natural Gas Corporation
Reliance Industries**
543,409
563,204
357,556
3,479,945
3,098,080
290
444
595
407
958
425
468
720
495
1,274
BUY
BUY
BUY
BUY
BUY
46.6
5.4
21.0
21.7
33.0
675
130
205
238
218
253
824
1,071
341
152
613
110
180
167
233
223
NA
NA
366
216
SELL
HOLD
HOLD
HOLD
HOLD
HOLD
NOT RATED
NOT RATED
BUY
HOLD
-9.2
-15.1
-12.2
-29.7
6.8
-12.0
NA
NA
7.5
42.2
Capital Goods
Ingersoll Rand
Greaves Cotton
Crompton Greaves
Voltas
Bharat Heavy Elec (BHEL)
Kirloskar Oil Engines
Siemens
ABB
Alstom T&D
BGR Energy Systems
21,323
31,637
128,452
78,585
534,066
36,652
293,318
226,964
87,197
10,958
(CMP as of previous day)
Sales (Rs. Mn)
FY14
FY15E
FY16E
114,867 117,281 150,246
197,263 215,132 250,948
68,098
28,262
39,526
59,727
70,123
84,989
251,249 290,028 321,940
669,310 775,377 908,805
444,506 446,109 487,937
2,308,031 2,709,739 3,146,377
83,790
99,124 119,308
22,464
25,355
29,664
6,083
6,144
7,668
EBITDA (Rs.Mn)
FY14
FY15E
FY16E
PAT (Rs. Mn)
FY14
FY15E
FY16E
FY14
EPS (Rs.)
FY15E
FY16E
P/E (x)
FY15E FY16E
4,239
41,650
7,178
8,253
35,649
101,641
54,649
328,026
4,895
2,699
906
7,618
39,946
6,769
10,178
48,246
109,602
52,661
433,796
6,015
3,251
921
13,671
48,063
10,011
13,213
61,402
130,033
53,414
499,700
8,125
3,905
1,226
-1,641
33,803
3,939
4,872
21,027
46,669
28,529
119,604
1,863
1,667
670
457
35,353
4,976
6,346
25,599
48,420
28,444
188,922
3,179
2,252
702
5,610
41,098
7,576
8,362
36,434
59,464
30,374
218,397
4,627
2,711
915
-0.6
116.8
145.0
5.7
105.3
75.8
94.4
37.2
3.9
31.6
54.0
0.2
122.0
171.0
7.5
138.6
81.7
94.2
58.6
6.7
42.6
56.5
2.0
142.0
252.5
9.8
180.8
100.3
100.6
67.8
9.7
51.8
73.7
NA
19.3
65.9
22.8
20.7
15.5
31.6
8.5
33.3
26.3
17.6
22.7
16.5
44.6
17.4
15.9
12.6
29.6
7.3
23.0
21.7
13.5
539,008 604,062
963,693 1,127,343
490,894 556,458
379,099 433,537
217,827 248,231
23,142
25,724
30,195
33,468
10,533
12,559
10,099
12,125
2,349
2,827
133,604
251,528
95,078
86,660
42,076
3,631
4,204
726
598
399
146,449
293,779
106,080
98,358
45,959
3,587
4,938
959
793
552
176,100
340,321
123,185
109,193
53,147
4,090
5,690
1,184
974
576
105,999
191,639
77,967
63,690
30,288
2,305
2,490
518
178
300
117,556
223,323
81,481
72,698
31,372
2,292
2,959
738
-26
349
138,221
260,870
91,019
82,031
36,901
2,612
3,436
889
173
454
185.2
97.7
31.7
91.2
126.8
37.8
13.0
23.0
1.1
NA
205.5
114.1
33.1
102.8
138.6
38.2
14.9
33.1
4.2
22.3
237.3
129.0
36.9
116.0
161.6
43.5
17.3
39.9
4.9
36.3
19.2
23.8
17.7
17.1
17.1
10.5
10.7
7.9
12.4
NA
16.6
21.1
15.8
15.1
14.7
9.3
9.2
6.6
10.7
NA
187,612 186,668 214,665
616,435 541,034 724,424
97,157 127,422 132,396
1,744,771 1,940,109 2,075,083
4,344,600 4,371,150 4,512,389
137,504
80,111
37,028
491,947
357,610
130,548
73,712
54,833
689,961
413,339
147,238
74,443
65,638
785,040
478,879
124,318
47,862
29,420
265,065
224,930
109,247
45,173
37,277
319,860
251,856
125,002
49,411
44,469
375,794
264,314
65.0
37.7
48.9
31.0
76.6
57.2
35.6
62.0
37.4
80.7
65.4
39.0
74.0
42.9
90.5
5.1
12.5
9.6
10.9
11.9
4.4
11.4
8.0
9.5
10.6
455
1,877
6,820
2,693
67,764
3,067
4,383
4,699
3,380
3,992
459
2,197
9,779
3,624
41,631
2,949
6,766
5,731
3,882
4,520
610
2,659
11,125
4,378
44,331
3,274
10,003
7,526
4,834
4,650
670
1,234
2,443
2,454
35,029
1,785
1,940
1,769
1,170
932
681
1,455
4,658
3,111
35,448
1,935
3,348
2,750
1,315
1,607
775
1,788
5,218
3,458
37,998
2,153
5,612
4,068
2,453
1,654
21.2
5.1
3.9
7.4
13.9
12.3
5.5
8.4
3.5
12.9
21.6
6.0
5.1
5.0
14.5
14.2
10.3
12.4
5.1
18.5
24.5
7.3
6.3
6.5
15.5
15.4
16.3
17.9
9.6
17.7
31.3
21.6
40.3
47.5
15.1
17.8
80.1
86.7
66.8
8.2
27.6
17.7
32.5
36.6
14.1
16.5
50.5
59.8
35.5
8.6
499,365
818,094
434,269
329,170
188,314
23,050
26,940
9,096
9,510
1,944
5,787
17,359
134,806
52,437
403,660
22,870
113,526
76,316
35,638
33,008
6,259
17,648
147,648
56,566
412,187
23,272
110,800
80,496
37,291
38,246
6,961
19,131
154,587
61,835
422,196
24,725
123,683
91,240
42,616
39,968
IndiaNivesh Universe | Valuation Table (contd...)
Company Nam e
Cement
ACC$$$
Ambuja Cements$$$
Ultratech Cement
Prism Cement
Mangalam Cement
FMCG
Bajaj Corp
Godrej Consumer Products**
Marico**
Dabur**
Tata Global Beverages**
Pharma
Ajanta Pharma
Aurobindo Pharma
Alembic Pharma
Biocon
Cadila
Cipla
Divis Lab
Dr Reddy
Glenmark
Jubilant Life Science
Lupin
Sun Pharma
Ipca Lab
Torrent Pharma
JB Chemical
Shilpa Medicare
Sharon Bio-Medicine
Others
BASF India Ltd.** &&
UPL
Coromandel International Ltd.
Sesa Sterlite **
Kajaria Ceramics
Somany Ceramics
Aditya Birla Nuvo Ltd.**
Radico Khaitan Ltd.**
Kaveri Seed Ltd**
HSIL Ltd**
Jindal steel and Pow er**
Godaw ari pow er and Ispat ltd
Liberty Shoes Ltd
HIL Ltd
Pennar Industries Ltd
Rs. Mn
Mcap
Rs.
CMP
Rs.
TP
Reco
%
(-) Dow n/(+) Up
260,393
323,474
681,027
38,935
6,577
1,387
209
2,482
77
246
1,476
229
3,029
117
276
HOLD
HOLD
BUY
BUY
BUY
6.4
9.6
22.0
51.3
12.0
109,084
91,180
214,437
49,932
6,973
119,460
98,751
233,966
56,274
10,345
132,733
108,544
260,411
65,646
12,983
16,300
16,908
39,284
2,056
558
17,440
19,131
47,446
3,784
1,275
22,966
21,789
58,859
6,373
1,987
10,947
12,786
23,080
-862
296
40,614
321,038
190,818
370,417
97,398
275
943
296
211
158
215
UR
UR
UR
180
HOLD
UR
UR
UR
BUY
-21.9
NA
NA
NA
14.3
6,707
76,024
46,865
70,734
77,376
7,593
87,082
56,568
81,383
82,157
8,522
100,998
64,871
93,916
89,344
1,860
11,784
7,591
11,690
7,521
2,369
13,605
8,686
13,600
8,099
NA
16,211
10,220
16,068
9,268
59,534
274,370
77,706
95,110
275,387
462,443
229,186
501,200
196,236
23,263
595,837
1,664,961
92,703
141,565
19,582
20,363
7,231
1,692
941
412
476
1,345
576
1,727
2,943
723
146
1,327
804
735
837
231
528
69
1,569
1,154
412
479
1,553
632
1,802
3,453
775
154
1,545
754
868
964
295
542
140
HOLD
BUY
HOLD
HOLD
BUY
HOLD
HOLD
BUY
HOLD
HOLD
BUY
HOLD
BUY
HOLD
BUY
HOLD
BUY
-7.3
22.6
0.0
0.7
15.5
9.7
4.4
17.3
7.1
5.4
16.4
-6.2
18.1
15.2
27.8
2.6
104.4
12,083
80,366
18,632
28,773
70,600
101,004
25,253
132,170
60,052
58,034
112,866
160,804
32,288
40,363
10,006
5,482
13,248
13,935
121,260
22,694
33,263
84,145
111,016
31,786
150,023
69,747
62,022
135,950
186,025
35,985
48,834
11,282
7,441
15,897
16,466
137,339
26,585
38,801
99,115
126,616
38,011
169,881
80,060
70,639
158,435
202,012
40,434
48,834
12,734
9,421
19,077
3,690
21,396
3,615
7,249
12,207
21,572
10,152
25,465
11,004
11,165
30,859
71,969
8,141
10,545
1,546
1,222
1,575
4,208
24,481
4,614
7,810
16,154
22,763
13,570
33,898
14,876
10,034
33,204
78,457
8,552
12,338
1,817
1,539
1,987
55,332
143,540
83,594
740,724
49,738
12,158
209,942
11,880
56,708
26,580
145,515
4,894
5,377
4,739
6,330
1,278
335
293
250
658
313
1,614
89
823
402
159
149
316
635
53
NA
480
279
378
482
266
1,645
165
795
425
201
198
400
721
81
UR
BUY
HOLD
BUY
SELL
HOLD
BUY
BUY
HOLD
BUY
HOLD
BUY
BUY
BUY
BUY
NA
43.3
-4.6
51.3
-26.8
-15.0
2.0
84.8
-3.4
5.6
26.4
32.5
26.8
13.5
54.0
42,347
107,709
71,269
661,524
18,387
12,629
258,934
14,122
10,111
18,582
200,040
15,409
4,835
8,657
11,133
51,646
121,670
111,207
798,283
20,972
15,853
277,997
15,878
12,126
22,029
259,617
17,103
6,189
10,984
16,366
54,907
138,703
125,040
897,619
27,748
20,483
310,730
17,859
14,608
26,642
315,044
18,976
8,009
13,840
20,784
3,642
20,484
9,982
203,918
2,818
868
46,232
1,935
2,213
2,651
55,287
2,119
394
406
898
3,772
23,250
9,675
278,210
3,271
1,013
53,413
2,273
2,970
3,229
74,281
2,854
554
1,074
1,637
Sales (Rs. Mn)
FY14
FY15E
FY16E
EBITDA (Rs.Mn)
FY14
FY15E
FY16E
FY14
EPS (Rs.)
FY15E
FY16E
10,989
14,122
25,327
525
450
14,444
17,381
31,961
1,990
979
58.2
8.3
84.1
-1.8
11.1
58.5
9.1
92.3
1.0
16.9
76.9
11.2
116.5
4.0
36.7
23.7
22.9
26.9
74.2
14.6
18.0
18.6
21.3
19.6
6.7
1,489
7,597
4,854
9,139
4,805
1,955
9,067
5,731
10,654
4,512
NA
11,102
6,813
12,668
5,273
10.1
22.3
7.5
5.2
7.8
13.3
26.5
8.8
6.1
7.3
NA
32.4
10.5
7.3
8.5
20.7
35.6
33.6
34.5
21.6
NA
29.1
28.2
28.9
18.5
4,989
25,212
5,593
8,970
19,983
28,079
16,400
37,794
17,166
11,701
39,121
81,584
9,722
13,622
2,113
1,978
2,575
2,339
11,729
2,355
4,138
8,036
13,884
7,733
21,515
5,423
1,090
18,364
31,415
4,785
6,639
615
757
703
2,772
15,470
3,124
4,608
10,287
13,022
9,951
22,035
8,965
1,127
24,357
62,357
5,501
7,826
1,559
994
1,054
3,262
18,650
3,834
5,320
10,287
16,853
11,962
24,401
10,460
2,638
28,859
65,078
6,847
7,826
1,784
1,306
1,471
66.4
40.2
12.5
20.8
39.3
17.3
58.3
126.0
20.0
6.9
40.8
15.2
37.9
39.2
7.3
19.6
4.7
78.4
53.2
16.6
23.0
50.2
16.2
75.0
129.4
33.2
7.1
54.3
30.1
43.3
49.1
18.4
25.8
10.0
92.3
64.1
20.3
26.6
64.7
21.0
90.1
143.3
38.8
16.6
64.4
31.4
52.6
46.2
21.1
33.9
13.9
21.6
17.7
24.8
20.7
26.8
35.6
23.0
22.7
21.8
20.6
24.4
26.7
17.0
18.9
12.5
20.5
6.9
18.3
14.7
20.3
17.9
20.8
27.4
19.2
20.5
18.6
8.8
20.6
25.6
14.0
18.1
10.9
15.6
4.9
4,513
27,784
10,879
309,468
4,414
1,320
62,431
2,469
3,677
4,107
84,648
3,152
730
1,748
2,182
1,279
9,498
3,565
62,985
1,242
289
11,429
712
2,090
340
19,104
578
132
71
260
1,601
13,285
5,310
68,836
1,405
451
14,047
875
2,895
1,082
22,736
907
230
563
713
1,899
16,723
6,052
87,104
2,127
646
17,770
947
3,637
1,283
23,871
1,146
340
1,019
1,063
23.6
21.6
15.4
21.5
16.7
8.3
91.1
3.7
30.3
5.1
20.5
17.7
7.9
14.3
2.0
37.0
31.0
18.8
23.5
17.7
11.6
108.1
7.0
39.6
16.0
23.0
27.7
13.5
75.4
5.4
43.0
40.2
21.4
30.0
26.8
16.6
153.4
7.5
48.4
26.0
25.5
35.0
20.0
136.5
8.1
34.6
10.8
15.6
10.6
37.2
27.0
14.9
12.8
20.8
25.2
6.9
5.4
23.4
8.4
9.7
29.7
8.3
13.7
8.3
24.6
18.8
10.5
12.0
17.0
15.5
6.2
4.3
15.8
4.7
6.5
FY16E
PAT (Rs. Mn)
FY14
FY15E
P/E (x)
FY15E FY16E
IndiaNivesh Universe | Valuation Table (contd...)
Company Nam e
Telecom
Bharti Airtel
Idea Cellular
Infra
IRB Infra. Dev
IL&FS Trans. Netw orks
Reliance Infra
Engineers India
Larsen & Toubro
Jaiprakash Associates
Gujarat Pipavav Ports
Real Estate
Oberoi Realty
Phoenix Mills
Nesco
Company Nam e
Power
Adani Pow er**
CESC Ltd
Coal India
JSW Energy**
NHPC
NTPC
Pow er Grid Corporation
Reliance Pow er
Torrent Pow er**
Tata Pow er Company**
Rs. Mn
Rs.
Rs.
Mcap
CMP
TP
Reco
(-) Dow n/(+) Up
%
1,565,182
561,961
392
156
NA
NA
SELL
SELL
NA
NA
857,461
264,320
960,690
302,317
NA
341,618
277,778
81,430
318,003
95,230
355,776
109,318
27,727
19,678
77,158
41,757
153,376
79,349
1,342,039
73,582
79,236
232
169
583
236
1,446
30
164
226
246
NA
301
NA
94
151
HOLD
BUY
EXIT
HOLD
NOT RATED
BUY
HOLD
-2.6
45.3
NA
27.8
NA
210.7
-7.9
37,319
65,870
190,337
18,465
851,284
198,344
5,830
47,924
72,571
247,011
19,405
642,293
261,957
7,308
57,491
74,321
NA
21,864
759,421
291,923
NA
17,652
19,031
31,720
3,889
110,951
65,313
2,880
21,758
20,237
46,061
4,424
75,061
87,015
3,864
25,529
22,945
NA
5,267
90,161
101,386
NA
70,193
52,680
17,549
214
364
1,245
308
329
1,680
BUY
HOLD
BUY
44.0
-9.5
34.9
7,842
14,485
1,413
11,498
14,782
2,140
13,435
17,168
2,698
4,205
6,792
1,039
6,285
7,421
1,548
Rs. Mn
Mcap
Rs.
CMP
Rs.
TP
Reco
%
(-) Dow n/(+) Up
FY16E
EBITDA (Rs.Mn)
FY14
FY15E
124,498
89,654
2,152,617
121,692
210,896
1,156,426
705,480
200,847
65,836
230,299
43
718
341
74
19
140
135
72
139
85
50
NR
422
NA
NA
190
164
118
NA
104
SELL
NOT RATED
HOLD
NOT RATED
NOT RATED
BUY
BUY
BUY
NOT RATED
BUY
15.3
NA
23.8
NA
NA
35.5
21.6
64.8
NA
22.1
Sales (Rs. Mn)
FY14
FY15E
Sales (Rs. Mn)
FY14
FY15E
157,541
101,109
688,100
87,054
74,159
789,217
156,754
51,748
86,811
356,487
194,821
59,564
842,422
93,675
78,488
810,918
178,396
63,220
100,307
373,593
FY16E
206,000
63,367
891,311
95,036
81,428
889,763
210,265
89,011
102,305
392,487
EBITDA (Rs.Mn)
FY14
FY15E
49,899
17,375
178,713
NA
44,460
198,795
133,129
19,167
13,046
77,118
66,541
15,535
208,109
33,143
51,106
228,669
152,433
21,394
18,993
84,519
FY16E
FY14
EPS (Rs.)
FY15E
FY16E
29,683
24,488
NA
29,038
7.0
5.9
8.7
6.9
NA
8.2
7.0
7.0
6.2
6.1
4,591
4,630
19,137
4,827
49,020
-8,248
2,459
5,368
4,908
26,771
5,355
51,567
6,225
3,703
5,971
5,601
NA
6,350
61,620
13,992
NA
13.8
21.8
72.8
14.3
52.7
-3.7
4.4
16.2
18.5
71.2
15.9
53.9
-1.0
7.7
18.0
22.5
77.4
18.8
69.6
3.2
NA
8.1
11.5
7.6
12.3
18.6
9.4
20.4
6.8
10.1
NA
10.3
15.5
8.1
NA
7,295
9,322
2,039
3,111
1,285
816
3,966
2,153
1,159
4,787
3,221
1,473
9.5
8.9
58.0
12.1
20.2
82.2
14.6
23.6
104.5
10.5
12.4
8.9
9.0
9.9
7.6
FY16E
PAT (Rs. Mn)
FY14
FY15E
FY16E
FY14
EPS (Rs.)
FY15E
FY16E
5,594
7,241
208,341
11,841
25,220
105,659
66,617
19,735
1,759
18,516
-1.04
39.35
23.92
4.60
1.02
13.83
9.47
3.66
2.23
-1.61
-0.07
44.10
28.40
7.47
2.10
11.69
10.51
3.60
8.70
6.16
2.14
66.79
33.00
7.53
2.30
12.69
12.73
7.00
7.53
7.27
FY16E
72,169
16,233
240,101
31,718
52,458
207,209
180,051
39,784
19,274
87,191
PAT (Rs. Mn)
FY14
FY15E
-2,906
4,916
151,117
7,547
12,188
114,036
45,476
10,267
1,053
-2,600
-487
6,815
179,348
11,904
23,320
96,955
54,965
7,723
2,921
15,396
EV/EBITDA (x)
FY15E FY16E
P/BV (x)
FY15E FY16E
1.9
1.5
4.5
1.6
0.7
1.3
1.8
1.0
1.0
1.5
1.7
1.3
3.9
1.5
0.7
1.2
1.6
0.9
1.1
1.4
IndiaNivesh Universe | Valuation Table (contd...)
Company Nam e
Banking & Financial Services
State Bank of India
Punjab National Bank
Allahabad Bank
Bank of Baroda
Corporation Bank
Federal Bank
Canara Bank
ICICI Bank
HDFC Bank**
Axis Bank
DCB Bank
Karur Vysya Bank
Rs. Mn
Mcap
Rs.
CMP
Rs.
TP
Reco
%
(-) Dow n/(+) Up
1,855,570
333,213
55,468
371,594
54,560
116,040
173,272
1,710,388
2,116,878
912,951
21,103
55,841
2,485
920
102
865
326
136
376
1,478
877
387
84
521
3,003
860
87
1,058
NA
137
383
1,600
830
412
88
620
BUY
HOLD
SELL
BUY
NOT RATED
HOLD
HOLD
HOLD
HOLD
HOLD
HOLD
BUY
20.8
-6.6
-14.6
22.3
NA
1.0
2.0
8.3
-5.3
6.5
4.6
19.0
492,822
161,460
53,113
119,654
37,837
22,286
89,444
164,756
191,096
119,516
3,684
12,837
565,451
180,094
60,883
135,576
43,107
24,292
105,599
183,854
223,081
132,326
4,726
14,497
633,554
201,079
67,548
154,389
50,840
27,693
124,515
207,915
270,240
145,617
5,959
17,362
321,092
113,845
40,204
93,532
30,394
14,804
67,962
165,946
149,386
114,561
1,880
8,378
373,776
126,411
42,062
102,214
34,848
16,307
76,545
184,169
176,227
126,220
2,500
9,054
423,230
141,865
47,937
118,014
43,195
19,064
86,643
213,622
216,178
139,779
3,366
11,203
108,912
33,426
11,720
45,411
5,617
8,389
24,382
98,105
87,435
62,177
1,514
4,296
9.5
-14.4
18.8
4.7
-6.5
18.5
18,989
22,153
19,821
116,830
2,295
4,038
22,004
28,032
23,929
137,304
2,658
5,202
25,688
34,554
28,626
157,365
3,088
6,581
18,470
13,490
13,929
5,060
1,466
1,278
21,253
16,854
16,360
5,574
1,712
1,949
24,856
20,562
19,421
6,703
1,995
2,750
13,172
7,190
5,948
1,395
1,287
370
LIC Housing Finance
161,290
320
350
BUY
Bajaj Finance
134,747
2,687
2,299
HOLD
L&T Finance Holding
112,860
66
78
BUY
Max India+++
83,758
314
329
HOLD
CARE+++
40,275
1,389
1,298
HOLD
CFL
25,226
304
360
BUY
Note: ** Bloomberg Est; +++ Manufacturing Format; $$$ Calendar Year; ### Y/E June, && EBIT
Source: Company Filings; IndiaNivesh Research
Net Interest Income (Rs. Mn)
FY14
FY15E
FY16E
Pre-Tax Pre-Prov. Profit (Rs.Mn)
FY14
FY15E
FY16E
PAT (Rs. Mn)
FY14
FY15E
FY16E
FY14
EPS (Rs.)
FY15E
FY16E
P/ABV (x)
FY15E FY16E
132,987
40,315
11,077
50,972
2,729
9,652
26,394
107,636
104,083
66,947
1,899
4,759
155,704
45,235
13,827
61,329
7,322
11,339
29,322
121,254
128,683
73,274
2,060
5,870
146.0
92.0
21.5
105.4
33.5
9.8
52.9
85.0
36.3
132.0
6.0
40.1
178.0
111.0
20.3
118.4
16.3
11.3
57.2
93.0
43.1
142.0
7.6
39.5
209.0
125.0
25.4
142.4
43.7
13.3
63.6
105.0
53.4
156.0
8.2
48.7
1.9
1.2
0.9
1.1
0.8
1.6
0.8
2.2
4.0
0.4
1.7
1.6
1.7
1.1
0.8
1.0
0.8
1.4
0.7
2.0
3.4
0.4
1.4
1.5
14,126
8,791
7,072
1,551
1,452
847
16,524
10,640
9,019
1,777
1,680
1,299
26.1
143.0
3.5
5.2
44.4
4.5
28.0
177.0
4.1
5.8
50.1
10.3
32.7
214.0
5.2
6.7
57.9
14.1
1.9
2.8
1.7
2.7
7.1
2.1
1.7
2.3
1.5
2.5
6.1
1.9
Result Today
Bajaj Auto
Bajaj Finsv
Bajaj Finance
Bluedart
Symphony
15-Oct-14
BajajHldng
GRUH
GSFC
Mindtree
NIIT Tech
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