March 2021 - ValueGuide

ValueGuideMarch 2021

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Registered O�ce: Sharekhan Limited, 10th Floor, Beta Building, Lodha iThink Techno Campus, O�. JVLR, Opp. Kanjurmarg Railway Station, Kanjurmarg (East), Mumbai – 400042, Maharashtra. Tel: 022 - 61150000. Sharekhan Ltd.: SEBI Regn. Nos.: BSE / NSE / MSEI (CASH / F&O / CD) / MCX - Commodity: INZ000171337; DP: NSDL/CD-SL-IN-DP-365-2018; PMS: INP000005786; Mutual Fund: ARN 20669; Research Analyst: INH000006183; Compliance O¤cer: Mr. Joby John Meledan; Tel: 022-61150000; email id: [email protected]; For any queries or grievances kindly email [email protected] or contact: [email protected]: Client should read the Risk Disclosure Document issued by SEBI & relevant exchanges and the T&C on www.sharekhan.com; Investment in securities market are subject to market risks, read all the related documents carefully before investing.

CONTENTS

3MARCH 2021 Sharekhan ValueGuide3

disclaimer

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Registered Office: Sharekhan Limited, 10th Floor, Beta Building, Lodha iThink Techno Campus, Off. JVLR, Opp. Kanjurmarg Railway Station, Kanjurmarg (East), Mumbai – 400042, Maharashtra. Tel: 022 - 61150000. Sharekhan Ltd.: SEBI Regn. Nos.: BSE / NSE / MSEI (CASH / F&O / CD) / MCX - Commodity: INZ000171337; DP: NSDL/CDSL-IN-DP-365-2018; PMS: INP000005786; Mutual Fund: ARN 20669; Research Analyst: INH000006183; For any complaints email at [email protected]. Disclaimer: Client should read the Risk Disclosure Document issued by SEBI & relevant exchanges and the T&C on www.sharekhan.com; Investment in securities market are subject to market risks, read all the related documents carefully before investing.

The policy push given by

a growth-oriented Budget

helped Indian equities rally

for most part of February,

driving them up nearly 1,500

points. It would have been a

happy ending, but for the

From the Editor’s Desk

PMS DESK

Star Moder Portfolio 45

Power Model Portfolio 46

MUTUAL FUND DESK 48

08

EQUITY

FUNDAMENTALS

TECHNICALS DERIVATIVES

Nifty 42 View 43

ADVISORY DESK DERIVATIVES

MID Trades 47 Derivatives Ideas 47

CURRENCY

TECHNICALS

USD-INR 44 GBP-INR 44

EUR-INR 44 JPY-INR 44

3R Stock Idea 09 REGULAR FEATURES

Stock Update 11 Report Card 04

Sector Update 38 Earnings Guide 52

fact that the benchmark indices shed half of what they

gained in the last week....

EQUITY FUNDAMENTALSREPORT CARD

4MARCH 2021 Sharekhan ValueGuide

STOCK IDEAS STANDING (AS ON MARCH 03, 2021)

COMPANYCURRENT

RECOPRICE AS ON

03-MAR-2021PRICE

TARGET 52 WEEK ABSOLUTE PERFORMANCE RELATIVE TO SENSEX

HIGH LOW 1M 3M 6M 12M 1M 3M 6M 12M

Autos

Alicon Castalloy Buy 464 500 490 170 8.2 28.9 29.2 73.7 6.4 13.0 -3.7 29.7

Amara Raja Batteries Buy 914 1146 1025 350 -4.8 0.2 23.1 43.5 -6.3 -12.2 -8.2 7.1

Apollo Tyres Buy 250 290 261 74 2.5 32.9 106.7 78.8 0.9 16.4 54.1 33.5

Ashok Leyland Buy 131 151 139 34 -3.5 38.4 88.0 81.0 -5.1 21.2 40.1 35.1

Bajaj Auto Buy 3900 4589 4361 1793 -7.6 17.7 35.3 43.9 -9.1 3.2 0.9 7.5

Balkrishna Industries Hold 1634 1800 1885 678 -10.6 -1.0 26.4 47.3 -12.1 -13.2 -5.7 10.0

Bosch Buy 15238 18156 16900 7874 -6.7 16.5 18.3 13.2 -8.2 2.1 -11.8 -15.5

Exide Industries Buy 207 229 221 122 2.0 11.0 26.8 28.2 0.3 -2.7 -5.4 -4.3

GNA Axles Buy 393 490 430 132 1.8 48.0 73.2 102.7 0.2 29.7 29.2 51.3

Greaves Cotton Buy 137 170 149 66 53.4 63.3 73.7 5.5 51.0 43.1 29.5 -21.2

Hero MotoCorp Buy 3425 4030 3629 1475 -0.5 7.8 17.5 67.3 -2.1 -5.6 -12.4 24.9

Lumax Auto Technologies Buy 155 ** 168 48 21.5 49.5 58.9 71.3 19.5 31.0 18.5 27.9

M&M Buy 852 1000 952 246 -1.7 13.6 34.8 79.6 -3.2 -0.5 0.5 34.1

Maruti Suzuki Buy 7124 9000 8400 4002 -6.7 -8.7 -0.9 11.6 -8.3 -20.0 -26.1 -16.7

Mayur Uniquoters Buy 418 500 479 118 39.9 43.8 47.0 74.1 37.6 26.0 9.6 30.0

Schaeffler India Buy 5227 5900 5265 3044 13.5 33.3 31.7 19.9 11.6 16.8 -1.8 -10.5

Sundram Fasteners Buy 715 850 755 249 18.4 32.8 63.4 77.0 16.5 16.3 21.9 32.2

Suprajit Engineering Buy 286 300 301 100 33.3 41.9 60.7 49.3 31.1 24.3 19.8 11.4

Tata Motors Buy 349 365 357 64 6.9 89.2 135.9 175.9 5.1 65.8 75.9 106.0

TVS Motor Buy 627 688 660 240 -4.1 25.8 44.5 52.8 -5.6 10.3 7.8 14.1

BSE Auto Index 24066 25073 10141 -1.9 14.5 33.3 53.8 -3.5 0.3 -0.6 14.9

Agri/Specialy Chemical

Aarti Industries Buy 1301 1355 1364 662 8.8 7.9 21.6 34.6 7.0 -5.4 -9.3 0.5

Atul Limited Buy 6649 7540 7021 3257 3.1 8.1 8.8 32.0 1.4 -5.3 -18.9 -1.5

Coromandel International Buy 778 1000 880 444 1.3 -1.6 4.6 26.0 -0.3 -13.8 -22.0 -5.9

Insecticides (India) Buy 459 590 557 207 -10.1 0.4 -7.6 4.0 -11.6 -12.0 -31.1 -22.4

PI Industries Buy 2280 2740 2544 974 1.4 -3.8 21.1 44.6 -0.3 -15.7 -9.7 8.0

SRF Limited Buy 5688 6760 6075 2492 -0.4 6.7 35.3 42.8 -2.0 -6.5 0.9 6.6

Sudarshan Chemicals Buy 574 615 600 286 14.3 12.8 27.5 25.4 12.5 -1.1 -4.9 -6.4

UPL Buy 613 632 631 240 11.9 34.7 20.6 19.9 10.1 18.0 -10.1 -10.5

Vinati Organics Buy 1425 1750 1527 651 14.6 25.1 42.0 41.9 12.7 9.6 5.9 5.9

Banks and Financial Services

AU Small Finance Bank Buy 1199 1500 1294 366 24.4 36.5 81.7 4.0 22.4 19.6 35.5 -22.4

Axis Bank Buy 754 900 800 285 1.3 22.6 65.5 10.5 -0.3 7.5 23.4 -17.5

Bajaj Finance Buy 5545 6000 5922 1783 0.8 13.7 54.2 29.3 -0.8 -0.3 15.0 -3.4

Bajaj Finserv Buy 10387 10860 10586 3986 6.9 14.8 65.5 18.1 5.2 0.6 23.4 -11.8

Bank of Baroda Hold 86 ** 100 36 4.3 45.0 86.5 16.8 2.6 27.0 39.0 -12.8

Bank of India Hold 81 ** 101 30 40.5 67.5 66.1 67.2 38.2 46.8 23.9 24.8

Cholamandalam Investment and Finance Company

Buy 541 580 558 117 16.4 46.2 130.8 83.0 14.5 28.1 72.1 36.6

City Union Bank Buy 181 225 216 110 3.1 0.9 28.5 -16.4 1.5 -11.6 -4.2 -37.6

Federal Bank Buy 88 95 92 36 3.0 33.4 63.7 5.5 1.3 16.9 22.0 -21.2

HDFC Buy 2653 3100 2895 1473 -2.0 18.1 49.9 20.3 -3.6 3.5 11.7 -10.2

HDFC Bank Buy 1586 1810 1650 739 0.5 14.5 41.7 38.1 -1.1 0.4 5.6 3.1

ICICI Bank Buy 632 770 679 269 0.7 25.8 69.5 24.3 -0.9 10.3 26.4 -7.2

Indusind Bank Buy 1100 1340 1119 236 6.6 20.4 78.7 3.2 4.9 5.5 33.2 -23.0

Kotak Mahindra Bank Buy 1899 2130 2049 1000 -0.7 2.9 37.7 18.1 -2.3 -9.9 2.7 -11.8

LIC Housing Finance Buy 464 610 488 186 2.6 33.3 57.1 44.7 1.0 16.8 17.2 8.1

LT FINANCE HOLDING Buy 112 118 113 43 20.4 27.2 70.5 6.4 18.5 11.4 27.1 -20.6

Nippon Life India AMC Buy 361 418 399 201 9.3 22.3 31.3 -8.4 7.5 7.2 -2.1 -31.6

Punjab National Bank Hold 44 ** 46 26 7.5 22.2 29.6 -2.0 5.8 7.0 -3.4 -26.8

EQUITY FUNDAMENTALS REPORT CARD



COMPANYCURRENT

RECOPRICE AS ON

03-MAR-2021PRICE



RBL Bank Buy 249 ** 308 102 -3.3 4.9 31.7 -15.9 -4.8 -8.0 -1.8 -37.2

Repco Home Finance Buy 324 400 377 91 23.1 23.8 87.1 15.0 21.1 8.5 39.5 -14.1

SBI Buy 405 460 426 150 14.1 53.7 96.0 42.0 12.2 34.7 46.1 6.0

Spandana Buy 611 850 1098 404 -18.5 -17.7 2.7 -42.8 -19.9 -27.9 -23.4 -57.3

BSE Bank Index 40831 42655 18430 2.2 18.8 56.2 24.0 0.6 4.1 16.5 -7.4

Insurance

HDFC Life Buy 727 850 744 339 6.8 13.0 26.5 27.9 5.1 -1.0 -5.7 -4.5

ICICI Pru Life Buy 490 584 538 222 2.9 3.0 16.4 10.1 1.2 -9.8 -13.2 -17.8

ICICI Lombard Buy 1498 1750 1625 806 2.1 3.3 16.1 23.1 0.5 -9.5 -13.4 -8.1

Max Financial Buy 924 1000 943 280 28.4 45.0 55.6 56.2 26.3 27.0 16.0 16.6

Consumer Goods

Asian Paints Buy 2402 3000 2871 1432 0.0 -1.5 22.8 29.9 -1.6 -13.7 -8.4 -3.0

Britannia Buy 3481 4200 4015 2101 -2.8 -4.6 -6.1 13.6 -4.3 -16.4 -30.0 -15.2

Colgate-Palmolive (India) Buy 1617 1850 1676 1065 -0.2 4.9 18.7 23.2 -1.8 -8.1 -11.5 -8.0

Dabur India Buy 518 605 552 385 -1.5 3.1 7.1 0.6 -3.1 -9.7 -20.2 -24.9

Emami Buy 451 570 520 141 -10.1 8.0 22.0 80.5 -11.6 -5.3 -9.0 34.8

Godrej Consumer Products Buy 699 850 808 425 -9.0 -1.5 6.7 10.7 -10.5 -13.7 -20.4 -17.4

Hindustan Unilever Buy 2194 2790 2614 1756 -2.4 0.3 3.3 0.8 -3.9 -12.1 -23.0 -24.8

ITC Buy 210 265 239 135 -8.7 5.9 12.5 12.0 -10.2 -7.2 -16.2 -16.4

Jyothy Laboratories Buy 150 188 166 86 -4.9 2.8 7.4 21.8 -6.5 -9.9 -19.9 -9.0

Marico Buy 409 477 439 234 -1.5 3.5 9.3 38.4 -3.1 -9.3 -18.5 3.3

Nestle India Buy 16695 19055 18821 12589 -2.2 -6.3 2.9 0.9 -3.8 -17.9 -23.3 -24.6

Tata Consumer Products Ltd Buy 637 740 653 214 8.3 13.0 12.5 82.5 6.6 -1.0 -16.1 36.2

Zydus Wellness Buy 1901 2300 2218 1070 0.7 4.0 19.2 31.0 -0.9 -8.8 -11.1 -2.2

BSE FMCG Index 12325 12895 8491 -3.1 3.1 8.3 12.9 -4.7 -9.7 -19.3 -15.7

IT / IT services

Birlasoft Buy 242 320 284 48 -10.0 28.9 44.4 153.1 -11.5 12.9 7.7 89.0

HCL Technologies Buy 965 1250 1074 376 0.7 12.3 37.6 71.4 -0.9 -1.6 2.6 28.0

Infosys Buy 1344 1650 1393 511 5.0 18.4 46.2 77.1 3.3 3.8 9.0 32.2

Intellect Design Buy 460 500 502 44 15.3 58.3 145.7 322.8 13.5 38.7 83.2 215.6

L&T Infotech Buy 3912 4800 4500 1208 -9.0 19.8 57.9 105.9 -10.5 5.0 17.7 53.8

L&T Technology services Buy 2708 3100 2805 995 3.5 50.2 73.3 64.5 1.8 31.6 29.2 22.8

Mastek Limited Buy 1229 1400 1460 170 4.1 25.3 73.1 199.3 2.4 9.8 29.0 123.5

Persistent Systems Buy 1690 1770 1850 420 0.0 38.6 70.7 139.4 -1.6 21.5 27.3 78.7

Tata Consultancy Services Buy 3059 3590 3345 1504 -4.0 12.2 33.6 46.8 -5.6 -1.7 -0.4 9.6

Tata Elxsi Buy 2564 2850 3050 501 -9.3 53.7 122.8 160.9 -10.8 34.7 66.1 94.8

Tech Mahindra Buy 976 1100 1081 470 0.7 5.8 30.4 26.6 -0.9 -7.3 -2.8 -5.5

Wipro Buy 435 510 467 160 1.3 20.7 57.8 90.4 -0.3 5.8 17.6 42.1

BSE IT Index 25943 27074 10937 1.1 16.5 43.1 67.0 -0.5 2.1 6.7 24.7

Telecom and New Media

Affle (India) Limited Buy 5760 ** 6287 909 51.8 49.4 110.8 233.6 49.4 30.9 57.2 149.1

Bharti Airtel Buy 546 750 623 381 -9.0 10.6 4.4 5.7 -10.5 -3.1 -22.1 -21.1

Info Edge (India) Buy 5048 6100 5876 1580 5.4 19.2 51.3 90.0 3.7 4.5 12.8 41.9

Capital goods / Power

Amber Technologies Buy 3312 3716 3668 922 22.2 42.4 80.4 141.2 20.2 24.8 34.5 80.1

Bharat Electronics Buy 153 190 155 56 8.6 32.3 43.8 104.3 6.8 15.9 7.2 52.6

Carborundum Universal Buy 515 611 571 175 14.8 37.0 101.0 62.5 12.9 20.0 49.9 21.3

CESC Buy 625 825 730 366 1.4 -0.7 2.8 2.4 -0.2 -13.0 -23.3 -23.6

Coal India Buy 155 160 180 110 7.9 16.2 17.0 -13.1 6.1 1.8 -12.8 -35.1

Cummins India Buy 864 1030 899 282 10.0 52.4 85.7 73.8 8.2 33.5 38.5 29.8

Dixon Technologies Buy 19240 ** 20440 2900 19.6 68.9 124.3 392.8 17.7 48.0 67.3 267.9

Finolex Cable Buy 401 475 426 165 8.0 16.9 39.4 23.7 6.2 2.4 3.9 -7.6

New Idea

New Idea

EQUITY FUNDAMENTALSREPORT CARD



COMPANYCURRENT

RECOPRICE AS ON

03-MAR-2021PRICE



Honeywell Automation Buy 46945 48200 49596 20142 10.3 52.1 45.6 44.2 8.5 33.2 8.5 7.7

Kalpataru Power Transmission Buy 399 485 406 170 9.9 18.0 57.4 20.7 8.1 3.4 17.4 -9.9

KEC International Buy 461 505 486 155 11.4 27.3 41.2 47.2 9.6 11.6 5.3 9.9

KEI Industries Buy 500 540 530 208 3.7 16.2 28.7 -1.9 2.1 1.8 -4.0 -26.8

NTPC Buy 113 140 115 74 13.7 14.3 18.8 4.3 11.8 0.1 -11.4 -22.2

Polycab India Buy 1355 1530 1387 572 2.6 35.1 56.6 30.0 0.9 18.4 16.7 -3.0

Power Grid Corporation Buy 227 245 239 130 10.8 17.0 29.9 15.4 9.0 2.6 -3.1 -13.8

Ratnamani Metals and Tubes Buy 1965 ** 2050 716 20.1 19.3 67.3 47.7 18.1 4.5 24.8 10.2

Thermax Hold 1374 ** 1459 644 13.5 49.5 78.5 52.6 11.7 31.0 33.1 14.0

Triveni Turbine Buy 111 ** 118 46 22.0 32.1 50.2 21.6 20.0 15.8 12.0 -9.2

V-Guard Industries Buy 223 311 255 149 -11.5 17.7 32.3 10.4 -12.9 3.1 -1.3 -17.6

BSE Power Index 2546 2583 1275 14.4 22.2 50.1 44.0 12.5 7.0 11.9 7.5

BSE Capital Goods Index 22312 22435 9499 2.3 27.0 59.5 45.0 0.6 11.3 18.9 8.2

Infrastructure

Ashoka Buildcon Buy 112 125 119 37 9.6 29.8 62.3 30.9 7.8 13.7 21.0 -2.3

JMC Projects Buy 77 95 82 30 3.1 2.7 47.9 13.5 1.5 -10.0 10.3 -15.3

KNR Constructions Buy 209 270 242 86 -8.1 -33.5 -14.8 -21.4 -9.5 -41.7 -36.5 -41.3

Larsen & Toubro Buy 1497 1795 1593 661 -2.1 30.2 58.7 27.1 -3.7 14.1 18.4 -5.1

PNC Infratech Buy 262 300 291 81 14.3 43.2 61.6 44.6 12.4 25.5 20.5 8.0

Sadbhav Engineering Buy 73 100 85 23 12.2 9.5 40.4 13.4 10.4 -4.1 4.7 -15.3

CNX Infra Index 4282 4316 2073 5.8 20.1 35.0 41.6 4.1 5.2 0.7 5.7

BSE Real estate Index 2888 2910 1259 7.4 29.0 66.7 35.3 5.7 13.0 24.3 1.1

Metal & mining

JSW Steel Buy 428 432 435 133 6.9 15.5 51.6 74.4 5.2 1.2 13.0 30.2

NMDC Buy 137 165 140 62 17.3 28.0 45.7 44.9 15.4 12.1 8.6 8.2

MOIL Buy 169 170 178 87 19.0 22.7 13.8 33.5 17.1 7.5 -15.2 -0.3

Oil & gas

Bharat Petroleum Corporation Buy 466 520 482 252 11.3 18.9 15.6 11.6 9.5 4.2 -13.8 -16.6

Castrol India Buy 135 150 141 90 3.4 3.3 12.7 -4.2 1.7 -9.5 -16.0 -28.5

GAIL (India) Buy 147 175 153 66 12.4 22.7 49.9 38.6 10.6 7.5 11.7 3.5

Gujarat Gas Buy 550 ** 568 191 44.4 58.1 78.9 89.7 42.0 38.6 33.4 41.6

Gujarat State Petronet Limited Buy 276 300 311 146 34.7 25.0 38.9 22.2 32.5 9.5 3.6 -8.8

Hindustan Petroleum Corporation

Buy 249 275 259 155 8.6 15.0 26.3 21.0 6.8 0.8 -5.8 -9.7

Indian Oil Corporation Buy 103 115 108 71 -1.0 13.5 22.2 -3.8 -2.6 -0.5 -8.9 -28.2

Indraprastha Gas Limited Buy 517 650 595 285 -5.1 8.1 29.1 18.9 -6.6 -5.2 -3.7 -11.2

Mahanagar Gas Buy 1182 1380 1257 666 7.4 14.0 29.5 16.7 5.6 -0.1 -3.5 -12.9

Oil India Ltd Hold 128 130 139 66 8.4 19.7 35.6 16.0 6.6 4.9 1.1 -13.4

Petronet LNG Buy 256 300 280 171 2.2 -2.4 8.8 4.2 0.5 -14.5 -18.9 -22.2

Reliance Ind Buy 2201 2400 2369 868 14.4 13.1 6.0 64.4 12.6 -0.9 -21.0 22.7

BSE Oil and gas Index 16159 16588 8724 9.5 15.3 24.9 27.7 7.7 1.0 -6.9 -4.6

Pharmaceuticals

Abbott India Buy 14609 19425 18569 12500 0.8 -4.2 -11.7 -2.6 -0.8 -16.0 -34.2 -27.3

Aurobindo Pharma Buy 881 1100 1023 281 -4.9 -2.2 9.0 69.1 -6.5 -14.3 -18.7 26.3

Biocon Buy 403 470 488 236 -1.7 -9.0 -4.3 32.7 -3.3 -20.3 -28.6 -1.0

Cadila Healthcare Buy 446 560 509 213 -7.0 -5.4 18.2 74.0 -8.5 -17.1 -11.9 29.9

Cipla Buy 812 950 879 357 -2.7 6.0 12.1 81.4 -4.2 -7.1 -16.4 35.5

Divi's Labs Buy 3565 4500 3913 1633 -3.1 -3.9 10.5 63.9 -4.7 -15.8 -17.6 22.3

DR Reddy's Buy 4501 6500 5515 2498 -3.5 -8.3 4.1 41.8 -5.1 -19.6 -22.4 5.9

Gland Pharma Buy 2433 3040 2692 1701 13.8 11.7 - - 11.9 -2.1 - -

Granules Buy 364 475 438 115 4.9 -13.6 5.3 111.0 3.2 -24.3 -21.5 57.5

IPCA Lab Buy 1961 2560 2456 1162 -2.0 -12.8 -2.9 37.4 -3.6 -23.6 -27.6 2.6

New Idea

EQUITY FUNDAMENTALS REPORT CARD


** Price under review @ Reco price adjusted for demerger # Reco price adjusted for bonus ^ Reco price adjusted for stock split* Price targets will be reviewed after we get further clarity on operations from companies post Q4FY2020 result announcements.


COMPANYCURRENT

RECOPRICE AS ON

03-MAR-2021PRICE



Laurus Labs Buy 365 450 386 62 5.1 9.9 -69.2 -13.0 3.4 -3.7 -77.0 -35.1

Lupin Hold 1061 1350 1122 505 0.9 13.7 12.3 59.8 -0.7 -0.3 -16.3 19.3

Sanofi India* Buy 8294 9249 8999 5900 6.3 5.0 -1.5 11.4 4.6 -8.0 -26.6 -16.8

Shilpa Medicare Buy 369 520 692 240 -16.4 -19.2 -27.7 -18.4 -17.8 -29.2 -46.1 -39.1

Solara Active Pharma Sciences Buy 1300 1700 1625 367 -8.6 1.7 36.6 104.4 -10.0 -10.8 1.9 52.6

Strides Pharma Sciences Buy 890 1020 1000 271 0.3 11.8 48.7 91.4 -1.3 -2.0 10.8 42.9

Sun Pharmaceutical Industries Buy 624 700 654 315 -1.2 9.7 21.8 53.8 -2.8 -3.9 -9.2 14.9

Torrent Pharma Hold 2497 3100 3040 1619 -6.9 -6.3 -9.9 14.1 -8.4 -17.9 -32.8 -14.8

BSE Health Care Index 21560 22464 10948 -0.3 2.8 15.1 53.1 -1.9 -9.9 -14.2 14.3

Building materials

APL Apollo Tubes^ Buy 1243 1330 1379 205 33.8 -66.6 -48.2 -35.3 31.6 -70.7 -61.3 -51.7

Astral Poly Technik Hold 2207 ** 2332 748 7.0 45.6 81.2 95.7 5.2 27.6 35.1 46.1

Century Plyboards (India) Buy 319 340 340 95 17.8 40.6 96.4 106.2 15.9 23.2 46.4 53.9

Dalmia Bharat Buy 1502 1900 1570 406 18.7 33.6 101.8 105.9 16.8 17.1 50.5 53.7

Grasim Buy 1318 1430 1372 380 11.1 41.7 86.6 91.2 9.3 24.2 39.2 42.8

Greenlam Industries Buy 944 1100 976 450 4.5 8.2 31.3 4.0 2.8 -5.2 -2.1 -22.4

JK Lakshmi Cement Buy 421 525 448 180 17.7 16.1 59.6 40.2 15.8 1.7 19.0 4.7

Kajaria Ceramics Buy 972 1200 1016 295 8.4 44.6 119.0 78.7 6.6 26.7 63.3 33.4

Pidilite Industries Buy 1765 1875 1850 1186 0.3 9.9 22.9 11.5 -1.3 -3.7 -8.4 -16.8

Shree Cement Buy 27686 31610 29098 15500 1.8 11.1 39.0 19.0 0.2 -2.6 3.6 -11.2

Supreme Industries Limited Buy 2110 2330 2131 791 6.8 26.9 52.9 70.4 5.1 11.2 14.0 27.2

The Ramco Cements Buy 1017 1150 1043 457 17.2 14.4 41.9 35.5 15.3 0.2 5.8 1.2

UltraTech Cement Buy 6500 8000 6946 2913 5.1 27.7 65.5 55.7 3.4 11.9 23.4 16.2

Logistics

Gateway Distriparks Buy 176 210 189 71 7.4 57.6 82.5 40.6 5.6 38.1 36.1 5.0

Mahindra Logistics Buy 481 562 544 199 -0.9 20.8 36.4 34.7 -2.5 5.8 1.7 0.6

TCI Express Buy 910 1150 1024 491 -5.1 4.5 17.4 18.0 -6.7 -8.4 -12.4 -11.9

Discretionary

ABFRL Buy 209 255 248 96 31.6 31.0 52.9 -16.3 29.5 14.8 14.0 -37.5

Arvind@ Buy 76 95 84 19 46.9 83.3 125.0 107.8 44.5 60.6 67.7 55.1

Bata India Buy 1525 1765 1705 1017 -4.1 -2.5 13.0 -4.0 -5.7 -14.6 -15.8 -28.4

Inox Leisure Buy 322 400 394 158 -2.4 14.9 10.9 -15.6 -4.0 0.7 -17.3 -37.0

Jubilant Foodworks Buy 3142 3380 3215 1142 11.1 22.6 40.0 89.9 9.3 7.5 4.4 41.8

KPR Mill Buy 960 1100 1019 317 3.6 19.3 73.9 65.7 1.9 4.5 29.7 23.7

Relaxo Footwear Buy 839 1005 928 493 -0.1 15.5 27.8 21.3 -1.7 1.2 -4.7 -9.4

The Indian Hotels Company Buy 125 155 139 62 4.3 -2.3 22.8 1.0 2.6 -14.4 -8.5 -24.6

Titan Company Limited Buy 1474 1710 1621 720 -2.6 2.6 27.2 17.9 -4.2 -10.1 -5.1 -12.0

Trent Ltd Buy 911 1015 944 368 36.2 34.4 40.3 32.1 34.0 17.7 4.6 -1.4

Welspun India Buy 71 90 79 18 -2.8 6.7 24.9 80.4 -4.4 -6.5 -6.9 34.7

Wonderla Holidays Hold 208 227 227 105 -0.7 0.0 12.4 3.2 -2.3 -12.4 -16.2 -23.0

ZEE Entertainment Buy 222 275 261 114 -11.0 7.3 0.7 -11.8 -12.4 -6.0 -24.9 -34.1

Diversified / Miscellaneous

Bajaj Holdings Buy 3663 4312 3785 1472 7.1 16.6 41.4 10.2 5.3 2.2 5.4 -17.7

Mahindra Lifespace Buy 529 655 561 171 29.8 60.7 118.5 55.9 27.7 40.8 62.9 16.4

JSW Steel Buy 428 432 435 133 6.9 15.5 51.6 74.4 5.2 1.2 13.0 30.2

Polyplex Corporation Hold 870 950 945 283 16.4 11.0 21.8 83.6 14.6 -2.7 -9.2 37.0

Quess Corp Buy 736 ** 807 165 15.9 47.8 92.4 46.1 14.1 29.5 43.4 9.1

Triveni Engineering & Industries Buy 94 ** 98 29 25.3 30.3 24.6 54.1 23.2 14.2 -7.1 15.0

BSE500 Index 20306 20329 9758 3.9 16.5 36.3 38.4 2.3 2.1 1.6 3.3

CNX500 Index 12765 12782 6152 3.9 16.3 36.1 37.9 2.2 1.9 1.5 2.9

CNXMCAP Index 24488 24740 10750 8.0 21.2 44.7 46.2 6.3 6.2 7.9 9.2

New Idea

New Idea

New Idea


Look beyond bond blues

The policy push given by a growth-oriented Budget helped Indian equities rally for most part of

February, driving them up nearly 1,500 points. It would have been a happy ending, but for the

fact that the benchmark indices shed half of what they gained in the last week. The sharp fall in

the last trading session was significant – with the Sensex and Nifty dropping nearly 3.8% each,

ending the month on a negative note.

What led to the sudden rout? A sudden spike in bond yields has created a flutter in financial

markets globally. For the first time since the meltdown in March 2020, the 30-year and 10-year

bond yields crossed physiologically important level of 2% and 1.5% respectively, sparking fears

that the US Federal Reserve may now start tightening policy rates, sooner than expected. The

Indian bond market too mirrored trends in the US, with the yield on the 10-year government

bond soaring to 6.2% -- up 35 bps in one month.

However, given that it is hope of a strong economic bounceback that is driving up bond yields,

the event is only likely to be a temporary blip for equities. What’s more, liquidity in the global

markets is still gushing as interest rates haven’t climbed back to their pre-COVID levels. The

liquidity gush amid a weak US Dollar will ensure that India will see steady foreign inflows, what

with the economic and earnings recovery also looking more promising.

For Q3FY21, India’s GDP managed to beat the COVID blues, rising by 0.4%, which means that

the nation is technically out of a recession. Q2FY21 growth too was revised upwards to -7.3%.

But all is not well. The full fiscal FY2021 estimates for GDP has been revised to -8% from -7.5%

earlier. This implies weakness in Q4 with expectations of a marginally negative growth in GDP

for Q4FY2021.

On the brighter side, the easing of the COVID-led lockdowns and strong progress in the

country’s vaccination program offer hope that the economic recovery will only strengthen

through the next fiscal. Key macro indicators such as the Manufacturing PMI, automobile sales,

GST collections and industrial output also showed a steady improvement.

Complementing the pick-up in macros is the continued momentum in corporate earnings.

Q3FY21 proved to be a strong quarter yet again, with the pace increasing from Q2FY2021.

Earnings were better than expected across sectors and companies management commentary

also added to the positivity. For Nifty companies, aggregate sales and net profits grew 2.7% and

22%, respectively, in what was one of the best earnings growth in the past five years.

To sum it up, there is a lot of steam left in the equities rally, despite blips such as rising bond

yields, new waves of COVID cases and other developments across the globe. Thus, one must

stay invested for the long haul to reap the benefits well.

Happy investing!

Fro

m t

he

Ed

ito

r’s

De

skFrom the Editor’s Desk


EQUITY FUNDAMENTALS STOCK IDEA

Intellect Design Arena LimitedDate: February 03, 2021 Designing the Future

Reco Price

Buy PT : Rs. 500 Rs. 361

Summary

• We initiate coverage on Intellect Design with a Buy rating, with a PT of Rs. 500 as it is well-poised to gain market share given its future-ready products with flexible

modules.

• Stock trades at reasonable valuation of 16x/12x its FY2022E/FY2023E earnings. Favorable industry tailwinds, anticipated improving financial metrics to aid re-rating

of stock.

• The company focuses on increasing license-linked revenues, which is expected to improve profitability. Company turned net cash positive of Rs. 124 crore in Q3FY2021

from net debt of Rs. 102 crore in Q3FY2020.

• Huge addressable market, strong traction for mature products, rising annuity revenue, and improving margins would help company to clock revenue and earnings

CAGR of 14% and 27% respectively over FY2021-23E.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Intellect-Feb03_2021_3R_StockIdea.pdf

Greenlam Industries LimitedDate: February 03, 2021 A perfect fit

Reco Price

Buy PT : Rs. 1,100 Rs. 842

Summary

• We initiate coverage on Greenlam Industries Limited (GRLM) with a Buy rating and price target of Rs. 1100.

• Greenlam is expected to ride on a strong growth trajectory led by its leadership positioning, strong domestic growth outlook and rising export opportunities.

• Brownfield capacity expansions would be the next leg of growth. Despite capex, balance sheet and return ratios would improve further.

• Structural growth drivers such as rising incomes, urbanisation, real estate construction, Atmanirbhar Bharat, etc, would provide long-term sustainable growth trajectory.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Greenlam-Feb03_2021_3R_Stock%20Idea.pdf

Gland Pharma LimitedDate: February 26, 2021 A giant in the making

Reco Price

Buy PT : Rs. 3,040 Rs. 2,412

Summary

• We Initiate coverage on Gland Pharma Limited (Gland) with a Buy recommendation and a price target of Rs. 3,040.

• Gland is an established player in Injectables space and is well-placed to harness the growth opportunities in this space. It has a strong compliance record with nil

observations from the USFDA across all its plants.

• Gland has a unique B2B business model, which enables it grow its market share while maintaining cost leadership.

• Strong domain expertise, robust growth prospects, sturdy & consistent earnings track record, and healthy return ratios make Gland an ideal long-term investment pick.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Gland_Pharma-Feb26_2021_3R_StockIdea.pdf


EQUITY FUNDAMENTALSSTOCK IDEA

Sharekhan Limited, its analyst or dependant(s) of the analyst might be holding or having a position in the companies mentioned in the article.

Dalmia Bharat LimitedDate: March 02, 2021 Rising through the ranks

Reco Price

Buy PT : Rs. 1,900 Rs. 1,467

Summary

• We initiate coverage on Dalmia Bharat (Dalmia) with a Buy rating and price target of Rs. 1,900. Multiples to expand from 8.5x EV/EBITDA FY23E currently as it gains

size, geographical diversification and higher operational profitability.

• Dalmia is on an expansion spree in the medium to long term and aims to double its capacity and become a larger pan-India player.

• Despite aggressive expansions, it is likely to achieve net cash position by FY2023E led by free cash flows of almost Rs. 1,200 crore p.a. during FY2021-FY2023E.

• The government’s infrastructure investment plan over the next five years, impetus on affordable housing and India’s structural growth drivers for cement consumption

present strong growth tailwinds.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Dalmia-Mar01_2021_3R_Stock_Idea.pdf

Stock Update


EQUITY FUNDAMENTALS

Date Company Report TypeRecommendation

Reco Price (Rs.)Price Target/ Upside (%)

Latest Chg Latest Chg

Feb 01, 2021 Cholamandalam Investment and Finance Company Stock Update BUY x 520

Summary

• CIFC posted mixed results with a rise in proforma GNPA against reported GNPA levels, but improvement in margins was the bright spot.

• Healthy business traction seen with total AUM rising 15% y-o-y to Rs 75,813 crore; reported asset quality improved with Stage 3 assets at 2.57% (improved from 2.75%

in Q2 FY2021).

• Buoyancy in rural markets augurs well, a well-capitalised balance sheet, and rigorous risk management practices provides long-term visibility; the stock is available

at 4.1x/3.4x its FY2022E/FY2023E ABVPS.

• Healthy traction in automobile demand, resilient rural economy brighten growth outlook; we maintain Buy rating with an unchanged price target (PT) of Rs. 520.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Cholamandalam_3R-Feb01_2021.pdf

Feb 01, 2021 Zydus Wellness Limited Stock Update BUY 1,949 2,300

Summary

• Zydus Wellness Limited (ZWL) posted strong performance in Q3FY2021 with revenue and operating profit growing by ~15% and ~33%, respectively (OPM expanding

by 176 bps); lower interest cost led to PAT standing at Rs. 29 crore versus Rs. 9 crore in Q2FY2020.

• Excluding Nutralite, all brands reported strong double-digit revenue growth in Q3. Nutralite business recovered to 90% of pre-COVID level and will reach 100% in Q4.

• Improving penetration of Complan, higher traction for Sugarfree and Glucon D along with new products performing well and improved growth of Everyuth brand

coupled with distribution enhancement will be key revenue drivers in the near term.

• With improving growth prospects in key brands and deleveraged balance sheet, ZWL is well poised to achieve earnings CAGR of 28% over FY2020-FY2023. We

maintain our Buy recommendation on the stock with an unchanged PT of Rs. 2,300.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Zydus_3R-Feb01_2021.pdf

Feb 01, 2021 Amber Enterprises Limited Stock Update BUY 2,621 3,170

Summary

• We retain Buy on Amber Enterprises Limited (Amber) with an unchanged PT of Rs. 3,170, given a strong net earnings growth outlook over FY2021E-FY2023E.

• Q3FY21 was an operationally strong quarter leading to better-than-expected net profit, while normalised inventory levels led to muted revenues.

• Management expects Q4FY21 to be much better as inventory normalises and hopes of a strong summer. Company would be one of the key beneficiaries from import

ban on ACs with refrigerants and likely expansion of PLI schemes for AC and components.

• Management remains optimistic about export prospects for both fully built-up units and components that can potentially emerge over the next 3-4 years.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Amber_3R-Feb01_2021.pdf

Feb 02, 2021 Housing Development Finance Corporation Stock Update BUY 2,658 3,100

Summary

• Q3FY2021 results were strong as operational numbers beat expectations; asset quality improved sequentially and growth traction improved.

• Overall collection efficiency for individual loans stood at 97.6 in December (from 96.3% in September) which is encouraging.

• Asset quality improved with reported NPA ratio declining, proforma NPA well-contained, company is better capitalised (Tier-I at 19.9%) which demonstrates balance

sheet strength.

• Stock trades at reasonable valuations of 4.8x / 4.4x its FY2022E / FY2023E ABV; we maintain a Buy with a revised SOTP based price target (PT) of Rs. 3,100.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/HDFC_3R-Feb02_2021.pdf

Feb 02, 2021 Dixon Technologies Limited Stock Update BUY 15,716 18,700

Summary

• We retain a Buy rating on Dixon Technologies with a revised PT of Rs. 18700 considering its strong net earnings growth outlook for FY2021E-FY2023E and its strong

compounding structural growth story.

• Strong performance during Q3FY21 led by strong beat in revenues along with stable margins leading to strong PAT beat. It continued to add new clients and scale

up wallet share from existing clients.

• Macro tailwinds and sharp rise in new business volumes, scaling-up of mobile vertical with approval of PLI scheme and capacity expansions brightens core business’

growth outlook.

• Capacity expansion in LED TVs, batons, down lighters, and washing machines on track. Upbeat on increasing overall ODM share as the mobile vertical achieves scale.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Dixon-3R-Feb02_2021.pdf

� Upgrade � No change � Downgrade

� Note: The arrow indicates change in call and price target, if any, vis-à-vis the previous report

Stock Update


EQUITY FUNDAMENTALS




Feb 02, 2021 Tata Consumer Products Limited Stock Update BUY 576 685

Summary

• Tata Consumer Products Ltd (TCPL) Q3FY2021 was a mixed bag, as revenues grew by ~23%, but gross margins declined by 574 bps, synergistic benefits and

efficiencies resulted in just a 99 bps decline in OPM to 11.8%.

• India beverages business grew by 46%; India foods revenues rose by 19%, US Coffee by 11% and International tea by 14%.

• Acquisition of Soulfull will add value to India foods business with ‘better for you’ products. Out-of-home businesses NourishCo and Tata Starbucks have seen

substantial improvement and will add-on to growth in the coming quarters.

• We have fine-tuned earnings estimates for FY21/22/23 to factor in higher-than-expected revenue growth and lower OPM. We maintain a Buy with unchanged PT of Rs. 685.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/TCPL_3R-Feb02_2021.pdf

Feb 02, 2021 Coromandel International Limited Stock Update BUY 789 1,000

Summary

• Q3FY2021 operating profit at Rs. 499 crore (up 15.6% y-o-y) was ahead of our estimate, led by 95 bps beat in OPM at 14.1%, given strong gross margin at 32.7% (up 118

bps y-o-y) and operating efficiencies. PAT at Rs. 333 crore (up 25.8% y-o-y) further benefited from lower interest cost.

• Good agronomics, new product launch and capex of Rs. 750 crore-900 crore over FY2021E-FY2022E is expected to drive 18% PAT CAGR over FY2020-FY2023E

along with high RoE of 25%.

• Likely clearance of past subsidy dues given additional allocation of Rs. 65,000 crore for fertiliser subsidy would reduce working capital and further strengthen the

balance sheet (Coromandel received Rs. 1,366 crore in January as against outstanding subsidy of Rs. 2,853 crore as of December 2020).

• We maintain our Buy rating on Coromandel International with unchanged PT of Rs. 1,000. At the CMP, the stock trades at 15.1x its FY2022E EPS and 13.3x its FY2023E

EPS (at a discount of 18% to its historical average one-year forward PE multiple of 16.3x).

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Coromandel-3R-Feb02_2021.pdf

Feb 02, 2021 Mastek Limited Stock Update BUY 1,194 1,400

Summary

• We recommend a Buy with a price target (PT) of Rs. 1,400 as risk-reward balance remains favourable.

• Strong beat on all fronts, led by strong growth in the UK public sector, accelerated growth in Evosys business and recovery in US business; EBITDA margin rose 233

bps q-o-q to 23.5%; added 57 new customers

• The management remains confident on delivering strong growth in the UK public and Evosys businesses in FY2022, led improving demand, strong deal wins and

addition of new logos. US recovery likely to aid growth

• Stock trades at a reasonable valuation of 13x its FY2023E EPS; cash & cash equivalents represent 26% of its current market capitalisation.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Mastek_3R-Feb02_2021.pdf

Feb 02, 2021 Relaxo Footwears Limited Stock Update BUY 841 1,005

Summary

• Relaxo Footwears (Relaxo’s) Q3FY2021 revenue was exactly in-line with our expectation at Rs. 672 crore (grew by 12%y-o-y), led by improving demand across

categories and geographies.

• Better product mix, benign input prices led to 107 bps expansion in gross margin; saving in selling and administrative expenses resulted in OPM expanding by 519 bps to 22%.

• Going ahead, demand is likely to improve due to reducing COVID-19 cases leading to increased mobility and improvement in economic activities.

• We have increased our estimates for FY2021/FY2022/FY2023 by 11%/9%/8% to factor higher margin trajectory. We maintain our Buy recommendation on the stock

with a PT of Rs. 1,005.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Relaxo-3R-Feb02_2021.pdf

Feb 02, 2021 JK Lakshmi Cement Limited Stock Update BUY 350 525

Summary

• We retain a Buy rating on JK Lakshmi Cement with an unchanged PT of Rs. 410 given attractive valuations and healthy net earnings CAGR over FY2021E-FY2023E.

• JKL reported better-than-expected performance for Q3FY2021 led by a beat in volume offtake, higher other income, fall in interest costs and lower ETR. EBITDA/

tonne rose 9% to Rs. 712.

• We expect strong demand environment to sustain during Q4 along with increase in prices expected during February 2020 in its region of operations. Impact of higher

petcoke prices to be felt from Q1FY2022.

• Company to raise equity at UCW level through rights issue for its Rs. 1,500 crore expansion plan, which is expected to ease clinker and capacity constraints.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/JK_Lakshmi_3R-Feb02_2021.pdf

Stock Update


EQUITY FUNDAMENTALS




Feb 02, 2021 Indian Oil Corporation Limited Stock Update BUY 99 115

Summary

• Q3FY21 adjusted PAT at Rs. 6,505 crore (up 178% y-o-y) was above consensus estimates led by robust petchem EBITDA (up 2.6x y-o-y) and higher inventory gain of

Rs. 2,630 crore (versus 1,804 crore in Q3FY20).

• Volume recovery was strong with refinery utilization reverting to 103% versus 80% in Q2FY21 and petrol/diesel sales volume up 13%/36% q-o-q. Robust petchem

EBITDA/tonne of $335/tonne (up 2x y-o-y) but core GRM remained weak at $1.26/bbl.

• Potential monetisation of pipeline assets and BPCL privatisation would be key re-ratings catalyst. Strong earnings momentum to sustain in Q4FY21 on likely inventory

gain despite recent weakness in auto fuel marketing margin (likely to normalise with gradual price hikes).

• IOCL’s steep valuation discount of 57% to that of BPCL likely to narrow down amid strong earnings visibility, RoE of 15.4%, and high dividend yield of ~9-10%. Hence,

we maintain a Buy with an unchanged PT of Rs. 115.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/IOCL-3R-Feb02_2021.pdf

Feb 02, 2021 Alicon Castalloy Stock Update BUY - 424 500 -

Summary

• We recommend Buy rating on Alicon Castalloy Limited (Alicon) with a PT of Rs. 500, factoring its long-term average multiple on a strong traction in business outlook

and an upgrade in earnings estimates.

• Alicon reported better-than-expected Q3FY2021 results consolidated net profit growing by 35.7% y-o-y and 116.8% q-o-q driven by solid demand growth.

• We expect Alicon’s business to turnaround in FY2022E by registering PAT of Rs 24 crore versus a loss of Rs 8 crore in FY2021E. We expect a solid growth of 114% in

FY23E, driven by revenue CAGR of 29% during FY2021E-23E and a 370 bps EBITDA margin expansion.

• The stock trades attractively at P/E multiple of 10.9x and EV/EBITDA multiple of 5.5x its FY2023E estimates.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Alicon-3R-Feb02_2021.pdf

Feb 02, 2021 Triveni Turbine Limited Stock Update BUY 87 105

Summary

• We retain a Buy on Triveni Turbine Limited (TT) with a revised PT of Rs.105, rolling forward our valuation multiples to FY2023E

• Q3FY21 results lagged estimates wherein revenues declined due to order deferrals and an almost flat OPM led to muted PAT.

• The management largely maintained its earlier stance the company is likely to see a decline in revenue by 10% to 15%, margins of 20-22%. Expect better revenues

from FY2022 as large order deliveries expected.

• Balance sheet remains strong with strong cash position and current order book remain healthy providing revenue visibility of 1x its TTM consolidated revenue.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Triveni_Turbine_3R-Feb02_2021.pdf

Feb 03, 2021 Jubilant FoodWorks Limited Stock Update BUY 2,644 3,145

Summary

• Jubilant Foodworks Limited’s (JFL) revenue stood flat at Rs. 1,057.2 crore; Delivery and takeaway revenue grew by ~19% and 64%, respectively.

• Benign input prices, delivery charges of Rs. 30 per order, and wastage saving led to 340 bps improvement in gross margin to ~78%. Higher ticket price per customer

and improving volumes would help gross margin to remain high despite inflation in input prices.

• JFL added 57 new stores (including 50 Domino’s store) in Q3 and would maintain the run rate of adding around 50 stores every quarter, considering strong growth

prospects in the QSR space.

• With business recovering to 100%, management is focusing on improving revenue growth trajectory through strengths of its distribution model and varied offerings.

We recommend Buy with a PT of Rs. 3,145.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Jubilant-3R-Feb03_2021.pdf

Stock Update


EQUITY FUNDAMENTALS




Feb 03, 2021 PI Industries Stock Update BUY 2,251 2,740

Summary

• Q3FY2021 results were strong with revenues/operating profit of Rs. 1,162 crore/Rs. 276 crore, up by 36.7%/47.7% y-o-y and 9%/14.8% above our estimate of Rs. 1,066

crore/Rs. 240 crore.

• Revenue beat was driven by a strong outperformance of the CSM business (40.1% y-o-y growth) and domestic business (26.2% y-o-y growth). Strong gross margins

and efficient capacity utilisation drove up OPM by 176 bps y-o-y to 23.7%.

• The management expects strong growth momentum to sustain and guided for revenue growth of 20% each in FY2021 and FY2022. Outlook for CSM business is

robust with the likely start of a new MPP in Q4FY21 and launch of 5-6 new molecules in FY22 while strong demand for branded products to drive growth for domestic

business.

• Likely successful deployment of QIP money of Rs. 2,000 crore in high-margin, high-return pharma and specialty chemicals could act as a key re-rating catalyst. Hence,

we maintain a Buy on PI Industries with an unchanged PT of Rs. 2,740.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/PI_Industries_3R-Feb03_2021.pdf

Feb 03, 2021 Astral Poly Technik Limited Stock Update HOLD 1,944 2,100

Summary

• We downgrade Astral Poly Technik (Astral) to hold with a revised price target of Rs. 2,100 owing to unfavourable risk-reward ratio awaiting a better entry point.

• In Q3, the company reported better-than-expected performance along with sharp expansion in operating margins. Demand momentum accelerated in Q3 for both

pipes and adhesives.

• Long term outlook for pipes and adhesives remains healthy. A sharp increase in PVC price a concern. Expansion plans on track to maintain growth.

• Board recommends bonus issue of 1:3.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Astral-3R-Feb03_2021.pdf

Feb 03, 2021 Indian Hotels Company Limited Stock Update BUY 123 155

Summary

• Indian hotel Company Limited’s (IHCL’s) Q3FY2021 performance improved q-o-q as revenues rose to Rs. 559.9 crore from Rs. 256.7 crore in Q2FY2021.

• Standalone occupancy ratio improved to 47.4% in Q3FY2021 from 32.3% in Q2FY2021 and 20.5% in Q1FY2021; average room rentals (ARR) rose by 53% to Rs. 8,300

versus Q2.

• Prudent asset management helped fixed costs decline by Rs. 64 crore and corporate overheads to decrease by 28% to Rs. 67crore in 9MFY2021.

• Hotel industry set for a strong revival in FY2022/23 as foreign tourist arrivals regain momentum. As IHCL has a strong room inventory and stable balance sheet among

peers, we recommend a Buy with a PT of Rs. 155.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/IndianHotel-3R-Feb03_2021.pdf

Feb 03, 2021 City Union Bank Stock Update BUY 186 225

Summary

• Q3FY21 numbers were mixed; Reported asset quality improved sequentially; elevated provisions cause PAT to marginally miss estimates.

• Total SMA accounts constituted 0.85% of total advances; improving over the last nine months. Restructured standard advances to gross advances ratio stood at 2.21%.

• Stock trades at 2.0x/1.7x its FY2022E/FY2023E BVPS. Factors such as increasing retail focus, being adequately capitalised (Tier-1 at ~16.3%), and incremental lending

to better-rated borrower(s) are positives; secured loans 99% of total loans.

• We maintain a Buy rating on the stock with an unchanged price target (PT) of Rs. 225.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/CityUnionBank-3R-Feb03_2021.pdf

Feb 03, 2021 Castrol India Limited Stock Update BUY 129 150

Summary

• Q4CY20 results lagged our expectations as revenue/adjusted operating profit at Rs. 935 crore/Rs. 274 crore, down 7.6%/19.6% y-o-y, missing our estimate by 9%/11%.

• The miss in operating performance was due to lower-than-expected OPM at 29.3% (down 438 bps y-o-y), volumes of 52 million litre (down 3.7% y-o-y) and weak

realisations (down 4% y-o-y). However, gross margins improved by 172 bps y-o-y to 59.4%.

• However, the highlight was the strong operating cashflow of Rs. 893 crore (153% of CY20 reported PAT) due to strong working capital management and maintained

DPS of Rs. 5.5 (payout of 93%). Alliance with Jio-BP retail network and focus on gaining market share bodes well for volume growth.

• Attractive valuation of 13.5x CY22E EPS (close to decade-low valuations) despite strong cash positions, FCF/dividend yields of 6%/9% and RoE of ~56-60%. Hence,

we recommend a Buy on Castrol with PT of Rs. 150.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Castrol_3R-Feb03_2021.pdf

Stock Update


EQUITY FUNDAMENTALS




Feb 03, 2021 Carborundum Universal Limited Stock Update BUY 427 540

Summary

• We retain Buy on Carborundum Universal Limited (CUMI) with a revised PT of Rs. 540, considering its reasonable valuations and healthy earnings growth profile.

• Q3FY2021 performance remained strong on all parameters (better than estimates), led by improving business sentiment and strong demand across segments.

• Strong domestic operations led by core user industries along with improving overseas operations aided by capacity expansion, success of new products, and being

an alternative global supplier are likely to aid domestic and exports growth.

• Strong balance sheet, healthy return ratios and consistent dividend paying record are key salient features.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Carborundum-3R-Feb03_2021.pdf

Feb 03, 2021 Ratnamani Metals & Tubes Limited Stock Update BUY 1,574 1,790

Summary

• We maintain Buy on Ratnamani Metals & Tubes Limited (RMTL) with a PT of Rs. 1,790.

• Soft quarter, EBITDA margin expanded by 379 bps y-o-y to 18.1%, led by change in product mix; order book increased by 15% q-o-q to Rs. 1,359 crore.

• Management remains confident on pick-up in order intake from Q4FY2021E because of anticipated normalisation of steel prices, strong order inflows during QTD of

Q4FY2021, and improving demand environment.

• We expect strong revenue growth of 35% y-o-y in FY2022E, led by availability of expanded capacities, improvement in capex cycle, and return of spending on

infrastructure projects.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Ratnamani-3R-Feb03_2021.pdf

Feb 03, 2021 Solara Active Pharma Sciences Stock Update BUY 1,458 1,700

Summary

• We retain our Buy recommendation on Solara Active Pharma Sciences (Solara) with a revised PT of Rs. 1700.

• Solara delivered its best-ever quarterly performance for Q3FY2021 with revenues and earnings staging an impressive 24% and 59% y-o-y, growth respectively.

• Given the strong demand traction and ramp up of the Vizag plant (Phase I), strong new product launches, especially in the limited competition space augur well from

a growth perspective.

• The company’s strong growth prospects, better earnings visibility, healthy balance sheet, and improving return ratios would support multiple expansion.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Solara_Active_3R-Feb03_2021.pdf

Feb 03, 2021 Wonderla Holidays Limited Stock Update HOLD 203 227

Summary

• Wonderla Holidays (WHL) posted revenues of Rs. 5 crore in Q3FY2021 for minimal days of operations in Bangalore (from November 9) and Kochi Park (from December

20) with permitted capacity of 50% only on weekends.

• Initial response was good with average visitors to the Bangalore Park standing at 1500 per day and 1,227 for the Kochi Park (some days saw 4,000-5000 visitors).

• With higher pent-up demand, the company expects footfalls to improve hugely in FY2022, reaching close to FY2020 levels by FY2023.

• With a strong balance sheet and cash of ~Rs. 90 crore as of December, WHL is well-placed to exploit opportunities in the entertainment industry. We maintain a Hold

with a revised PT of Rs. 227.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Wonderla_3R-Feb03_2021.pdf

Feb 04, 2021 State Bank of India Stock Update BUY 355 460

Summary

• SBI posted strong results with mixed operational numbers, but asset quality performance improved; loan growth too outperformed system growth, indicating market share gains.

• Strong asset quality performance, GNPA declined 217 bps y-o-y and 51 bps q-o-q to 4.77%. NNPA ratio at 1.23% is down 142 bps y-o-y and 36 bps q-o-q; Proforma

GNPA / NNPA too were well contained.

• Asset quality is finally emerging from the shadows; we believe that a strong balance sheet, market-share gains can drive re-rating of stock.

• Stock trades at 1.6x / 1.3x its FY2022E / FY2023E ABVPS, which we believe are reasonable. We maintain a Buy on the stock with a revised SOTP-based price target

(PT) of Rs. 460.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/SBI_3R-Feb04_2021.pdf

Stock Update


EQUITY FUNDAMENTALS




Feb 04, 2021 Bharti Airtel Stock Update BUY 600 750

Summary

• We maintain a Buy on Bharti Airtel with a revised PT of Rs. 750, given favourable market structure, reasonable valuations and strength in core business.

• Stellar performance; ARPU improvement led by strong net 4G subscriber additions; company gained revenue market share in its India wireless business and sees

strong traction in broadband & enterprise businesses.

• Strong 4G subscriber addition creates platform for healthy growth of India wireless business; Bharti optimistic that digital services through the partnership-led model

would help drive growth.

• Bharti is well-positioned to capitalise opportunities from weakness in competitors and tariff hikes. We expect company to register a 14%/23% growth in revenue/

EBITDA over FY2020-FY2023E.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Bharti_Airtel_3R-Feb04_2021.pdf

Feb 04, 2021 NTPC Limited Stock Update BUY 99 140

Summary

• Q3FY2021 performance was steady with a 24% y-o-y increase in adjusted PAT to Rs. 3,308 crore (in line with consensus estimates). Earnings growth was driven by a 14.5% y-o-y increase

in regulated equity base, 35% rise in surcharge income to Rs. 565 crore and higher PLF incentive income of Rs. 76 crore (versus just Rs. 9 crore in Q3FY20).

• The management has guided for strong commercialisation of 5,074 MW for FY2021E and 6,000 MW for FY2022E and eyes lower fixed cost under-recoveries of Rs.

350-400 crore by March-2021. Board declared interim dividend of Rs3/share.

• A risk averse regulated business model provides earnings visibility (19% PAT CAGR over FY2021E-FY2023E) as a robust commercialisation target would drive strong

growth in regulated equity base.

• We maintain a Buy on NTPC with an unchanged PT of Rs. 140, as valuation remains attractive at 0.7x its FY2023E P/BV (48% discount to historical multiple) despite

strong earnings visibility, decent RoE of 13% and dividend yield of 6-7%.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/NTPC_3R-Feb04_2021.pdf

Feb 04, 2021 Apollo Tyres Limited Stock Update BUY 244 290

Summary

• We maintain Buy rating on Apollo Tyres Limited (ATL) with a PT of Rs. 290, factoring strong traction in business outlook and an upgrade in earnings estimates.

• Q3FY2021 results were better than expected as EBITDA margins rose sharply.

• On back of strong operational performance, we have upgraded our earnings estimates by 55%/49% for FY22E/FY23E, largely driven by a 220 bps/280 bps EBITDA

margin expansion to 16.4%/17.4%, respectively, to reflect a sharp increase in operational improvements in the company.

• The stock trades attractively at P/E multiple of 10.2x and EV/EBITDA multiple of 5x its FY2023E estimates.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Apollo_3R-Feb04_2021.pdf

Feb 04, 2021 Thermax Stock Update HOLD 1,210 1,350

Summary

• We retain our Hold rating on Thermax with a revised PT of Rs. 1350.

• In Q3FY2021, Thermax’s overall performance remained mixed where revenues remained muted along with strong operational performance led by cost rationalization

and higher gross margins. However exceptional loss led to PAT decline.

• Weak order inflow, which was largely on expected lines, and lower execution during the same period led to lower depletion of the exit order backlog to 1.2x TTM

consolidated revenue.

• Expect order booking in FY2021 to be lower compared to last year due to expectation of lower large ticket-size orders from segments such as steel, fertiliser, and

cement; enquiry pipeline remains positive in food processing, steel, cement, chemical and pharma.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Thermax_3R-Feb04_2021.pdf

Stock Update


EQUITY FUNDAMENTALS




Feb 04, 2021 Vinati Organics Limited Stock Update BUY 1,244 1,550

Summary

• Q3FY2021 results were weak with 6% miss in operating profit at Rs. 72 crore (down 13.1% y-o-y) due to higher cost (given commissioning of Butyl Phenol plant) and

weak revenue mix (ATBS share at 38% versus 56% in Q3FY2020 and specialty products at 6% versus 17% in Q3FY2020).

• Management has guided for strong revenue growth of 20% each in FY2022 and FY2023 as its key ATBS segment has recovered to pre-COVID level and likely ramp-

up of utilisation at Butyl Phenol plant. Thus, we expect a strong 29% PAT CAGR over FY2021E-FY2023E.

• Amalgamation of Veeral Additives Private Limited (subject to NCLT approval) seems in right direction as it provides entry into antioxidants (AO – forward integration

for Vinati Organics) with incremental revenue opportunity of Rs. 300 crore.

• We like Vinati Organics’ business (global market share of 65% each in IBB and ATBS), debt-free status, and solid return profile (RoE/RoCE of 23%/30%). Hence, we

maintain our Buy rating on Vinati Organics with an unchanged PT of Rs. 1,550.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Vinati_Organics_3R-Feb04_2021.pdf

Feb 04, 2021 Sundram Fasteners Limited Stock Update BUY 602 700

Summary

• We maintain our Buy rating on Sundram Fasteners Limited (SFL) with a revised PT of Rs. 700, on a strong traction in business outlook and an upgrade in earnings

estimates. Q3FY2021 results beat expectation on higher-than-expected demand and margin expansion.

• We expect SFL to benefit from strong growth traction in the automotive industry with its clients well diversified across segments. Export and non-automotive segments

continue to be the focus area with a strategy to de-risk business from cyclicality.

• We expect SFL’s earnings to grow by 86.8% in FY2022E and 42.8% in FY2023E, driven by a 25.2% revenue CAGR during FY2021E-23E and a 350-bps improvement

in EBITDA margin.

• Stock trades at P/E multiple of 22.2x and EV/EBITDA multiple of 13.2x its FY2023E estimates.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Sundram_3R-Feb04_2021.pdf

Feb 04, 2021 V-Guard Industries Limited Stock Update BUY 252 311

Summary

• We retain Buy on V-Guard Industries Limited (V-Guard) with a revised PT of Rs. 311, considering its improving business operations.

• V-Guard reported strong revenues and operating margins leading to 79.6% y-o-y growth in net profit which remained better than estimates.

• Management expects to get back on to the growth path with a rebound in business environment and highlighted that demand drivers remain healthy across

businesses. Expect summer products to come back strongly with some pent-up demand.

• The company’s strong balance sheet, cash flow and reputed brand along with strong business fundamentals provide comfort in the present environment.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/V-Guard_3R-Feb04_2021.pdf

Feb 04, 2021 Strides Pharma Science Limited Stock Update BUY 887 1,020

Summary

• We retain Buy recommendation on Strides Pharma Sciences (Strides) with a revised PT of Rs 1,020.

• Q3FY2021 was a weak quarter for Strides on the back of weak flu season, & price erosion in US markets and one off expenses. The results missed estimates.

• Healthy growth in the base business and strong product launch pipeline provides ample visibility for growth of the US business. Growth prospects in other regulated

markets are also likely to get better, led by new product launches, increased market share, and portfolio optimization efforts.

• Strong growth prospects and earnings visibility, improving balance sheet strength, and healthy return ratios would support multiple re-ratings.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Strides_3R-Feb04_2021.pdf

Feb 04, 2021 Triveni Engineering & Industries Limited Stock Update BUY 75 90

Summary

• Triveni Engineering & Industries (TEIL) Q3FY21 results were better than expectations mainly led by a sharp expansion of 609 bps in OPM to 14.3%, resulting in a 3.5x

growth in PAT to Rs. 139 crore; revenue grew by 5%.

• Sugar division and distillery division revenues grew by 9% and 7% each; engineering business has almost reached to 7 0% of pre-COVID levels.

• Higher sugar under ethanol blending and export quota of 6 million tonnes would lead to better performance in FY2022 despite higher sugar production. Engineering

business is expected to recover strongly with strong order book.

• We have broadly maintained our earnings estimates for FY2022/23. We recommend Buy on the stock with the price target of Rs. 90.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Triveni_Engineering_3R-Feb04_2021.pdf

Stock Update


EQUITY FUNDAMENTALS




Feb 04, 2021 Arvind Limited Stock Update BUY 52 68

Summary

• Q3FY2021 revenue recovered to ~80% led by a strong recovery in Denim and garments segment, which stood at 81% and 89%, of pre-COVID levels.

• Textile business’ EBIDTA margins reverted to FY2020 levels of 12.5%, while advanced material prices stood at 14%, resulting in a 79 bps improvement in the OPM to

10.7%.

• Better operating leverage and higher margins from AMD would mitigate impact of a sharp increase in input prices in the near term. Debt reduced by Rs. 300 crore

in last nine months.

• We broadly maintained our earnings estimates for FY2022/23. We maintain our Buy recommendation with PT of Rs. 68.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Arvind_3R-Feb04_2021.pdf

Feb 05, 2021 Mahindra & Mahindra Stock Update BUY 865 1,000

Summary

• We retain our Buy rating on Mahindra and Mahindra (M&M) with revised price target of Rs. 1,000 factoring earnings upgrade owing to its robust outlook of its core

businesses and improving fortunes of key subsidiary companies

• M&M’s Q3FY21 results were broadly in-line with our estimates and it reported another quarter of strong operating performance.

• We expect M&M to benefit from its leadership status in tractor space, strengthened position in LCV segment and steady market share gains in UV segment.

• Stock is attractively valued at a P/E multiple of 17x and EV/EBITDA multiple of 9.6x its FY2023E estimates.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/MnM-Feb05_2021.pdf

Feb 05, 2021 Divis Laboratories Limited Stock Update BUY 3,820 4,500

Summary

• We retain Buy recommendation on Divis Laboratories (Divis) with a revised PT of Rs 4,500.

• Divis reported yet another impressive performance for the quarter with results ahead of estimates. The sales at Rs 1,701 cr grew 22% y-o-y while PAT at Rs 471 cr was

up 31% y-o-y.

• Robust demand traction, incremental capacities coming on stream, plans to enter the high value space of Contrast Media Manufacturing would be the key growth

drivers.

• Strong earnings visibility, almost zero debt, and strong return ratios bode well and could support P/E multiple expansion.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/DivisLab-3R-Feb05_2021.pdf

Feb 05, 2021 Hero MotoCorp Limited Stock Update BUY 3,428 4,030

Summary

• We reiterate our Buy rating on Hero MotoCorp Limited (HERO) with a PT of Rs. 4,030, factoring better multiples owing to business outlook and earnings upgrade.

• HERO’s Q3FY21 results were slightly ahead of expectations due to improvement in EBITDA margin expansion.

• We believe structural growth traction in the two-wheeler (2W) industry remains intact and HERO continues to benefit from premiumization of its products, its strong

hold in the economy and executive motorcycle segments, and aggressive products offerings in the premium bike and scooters segments.

• The stock is valued at P/E multiple of 16.2x and EV/EBITDA multiple of 9.5x its FY2023E estimates. We retain our Buy rating on the stock.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/HeroMoto-3R-Feb05_2021.pdf

Feb 05, 2021 Cadila Healthcare Limited Stock Update BUY 475 560

Summary

• We retain Buy recommendation on Cadila Healthcare Limited (Cadila) with a revised PT of Rs 560.

• Q3FY2021 was a healthy quarter for Cadila with revenues and PAT reporting a growth of 4% and 40% YoY respectively.

• Traction across all the three segment – Human Health, Animal Health and Consumer wellness to drive the India business growth. Sturdy new product pipeline and

growth in the existing products basket to fuel the growth for US.

• Strong growth prospects and earnings visibility, a sturdy balance sheet, and healthy return ratios, coupled with multiple growth triggers are the key positives for Cadila.

Covid Vaccine, up on approval can open up substantial growth opportunities.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Cadila-3R-Feb05_2021.pdf

Stock Update


EQUITY FUNDAMENTALS




Feb 05, 2021 Honeywell Automation India Limited Stock Update BUY 41,949 48,200

Summary

• We retain a Buy on Honeywell Automation India with a revised price target of Rs. 48,200.

• Q3 results lagged estimates. OPM matched estimates, led by rationalisation in employee and other expenses.

• Honeywell is expected to benefit from domestic growth driven by increasing technological capabilities with large opportunities in the oil & gas space, smart cities,

upcoming airports and building solutions.

• Exports may stay muted in near term owing to subsequent waves of the COVID-19 pandemic.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Honeywell_3R-Feb05_2021.pdf

Feb 05, 2021 Hindustan Petroleum Corporation Limited Stock Update BUY 225 275

Summary

• Q3FY21 operating profit at Rs. 3,002 crore (up 91.8% y-o-y) lagged ours and the street’s estimates as derived blended marketing margin missed expectations, at Rs.

2,489/tonne (down 8.8% q-o-q). PAT at Rs. 2,355 crore (up 215% y-o-y) was led by inventory gain of Rs. 1,343 crore, forex gain of Rs. 297 crore, higher other income

and lower interest costs.

• HPCL gained market share gain in petrol (volumes rose by 6.6% y-o-y versus industry growth of 6.3% y-o-y) and diesel (volume up by 1.3% y-o-y versus industry decline

of 1.1% y-o-y). Reported GRM was in line at $1.9/bbl, but core GRMs were negative at $1/bbl.

• Gradual auto fuel price hikes would bring back marketing margins to normal; expect strong Q4FY21 on volume growth and potential inventory gain. A cyclical recovery

in refining margins in CY2021 would aid to earnings growth.

• Valuation of 5x FY2023E EPS is attractive given strong earnings visibility, high dividend yield of 8% and RoE of ~18%. BPCL’s privatisation could re-rate marketing

business. We maintain a Buy on HPCL with an unchanged PT of Rs275.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/HPCL-3R-Feb05_2021.pdf

Feb 05, 2021 Gujarat Gas Limited Stock Update BUY 380 500

Summary

• Q3FY21 operating profit/PAT at Rs. 615 crore/Rs. 392 crore, up 66%/99.5% y-o-y strongly beat estimates due to a 39% and 5.8% beat in EBITDA margin at Rs. 5.8/scm

(up 35% y-o-y) and volume at 11.4 mmscmd (up 22.9% y-o-y), respectively.

• Stellar growth of 29% y-o-y for Industrial PNG (I-PNG) volume at 9.2 mmscmd due to improved demand from Morbi and Pharma/Chemicals belt. CNG volume of 1.5

mmscmd (up 2.2% y-o-y) recovered above pre-COVID levels.

• Management guided for strong 25% volume growth for FY22E and 10% annual growth for next 2-3 years on a high base of FY22. Price hike of Rs. 9/scm for I-PNG

indicates pricing power and would help sustain margin. We raise FY21E/FY22E/FY23E EPS by 16%/10%/9% to factor higher volumes.

• GGAS is one of the best bets in the CGD space as consistent high-volume growth and potential to become net cash positive makes valuation of 15.4x its FY23E EPS

attractive. Hence, we maintain a Buy rating on GGAS with a revised PT of Rs. 500.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Gujarat_Gas_3R-Feb05_2021.pdf

Feb 05, 2021 Ipca Laboratories Limited Stock Update BUY 1,936 2,560

Summary

• We retain a Buy recommendation on IPCA Laboratories (IPCA) with an unchanged PT of Rs. 2,560.

• Ipca Laboratories Limited (Ipca) reported a strong performance in Q3FY2021, with earnings coming slightly ahead of estimates.

• Ipca’s API business is witnessing strong demand traction, which is expected to sustain going ahead, while the formulations is business is also expected grow at a

healthy pace.

• Strong earnings prospects, a sturdy balance sheet, and healthy return ratios augur well for Ipca.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/IPCA-3R-Feb05_2021.pdf

Feb 05, 2021 Trent Limited Stock Update BUY 906 1,015

Summary

• Trent witnessed ~83% recovery in Q3FY2021,boosted by higher sales during the festive season and all stores were operational at optimum levels. Recovery improved

from 55% in Q2.

• Online sales grew by 80%, while strong traction was seen inthe EOSS in January with salescoming back to pre-COVIDlevels.

• Trent prioritised cost-saving measures of cutting discretionary spends and renegotiating rental expenses, which aided in486 bps expansion in OPM to 24.8% in Q3.

• We have increased our estimates for FY2022/FY2023 to factor in faster recovery in performance. We maintain Buy with a revised PT of Rs. 825.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Trent_3R-Feb05_2021.pdf

Stock Update


EQUITY FUNDAMENTALS




Feb 05, 2021 Zee Entertainment Enterprises Limited Stock Update BUY - 215 275 -

Summary

• We re-initiate coverage on Zee Entertainment Enterprises Limited (ZEEL) with a Buy rating with a PT of Rs. 275, considering better ad growth outlook and reducing

balance sheet concerns.

• Q3FY21 numbers were strong; expect ZEEL to clock revenue/net profit growth of 18%/22% over FY21-FY23E.

• Management is focusing on rebuilding investor confidence by 1) improving disclosures, 2) introducing polices and 3) strengthening board composition.

• We believe ZEE5 is one of the leading digital platforms, centered on regional content and would continue to leverage its reach further led by hyperlocal content.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Zeel-3R-Feb05_2021.pdf

Feb 05, 2021 Birlasoft Limited Stock Update BUY 272 320

Summary

• We recommend a Buy on Birlasoft Ltd with a price target (PT) of Rs. 320 as risk-reward ratio remains favourable.

• Stock trades at 16x of FY2023E earnings, implying reasonable valuations given strong earnings growth expectations. Cash & cash equivalents account for 13% of

market capitalisation. FCF generation remains strong.

• Management is confident of delivering double-digit growth in FY2022 led by higher contribution of annuity revenue, healthy deal pipeline and higher spends on

transformational initiatives.

• We expect revenue to clock a 14% CAGR over FY2021-23E, while earnings are likely to record a 24% CAGR as profitability improves and tax provisions stay low

(adopted new tax regime in Q3).

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Birlasoft_3R-Feb05_2021.pdf

Feb 05, 2021 KPR Mill Limited Stock Update BUY 922 1,100

Summary

• KPR Mill (KPR) registered strong performance in Q3FY2021 with revenues and PAT growing by 21% and 66% respectively (OPM expanded by 917BPS to 27.0%); interest

cost down by 36% y-o-y.

• Textile business revenues grew by ~19% driven by a strong 20% growth in garment segment sales; garmenting production grew by 22% y-o-y to 27.9million garments.

• Balance sheet strengths visible with cash balance improving from Rs. 250 crore in Q2 to Rs. 356 crore in Q3 and debt standing at Rs. 556 crore (including working

capital requirements); debt:equity of 0.3x.

• We have increased our earnings estimates for FY2021/22/23 and maintain a Buy on the stock with a revised PT of Rs. 1,100.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/KPR-3R-Feb05_2021.pdf

Feb 05, 2021 PNC Infratech Limited Stock Update BUY 245 300

Summary

• We retain Buy on PNC Infratech Limited(PNC) with a revised price target of Rs. 300, as we factor in upwardly revised estimates for FY2021-FY2023E.

• In Q3FY2021, the company reported broadly in-line results with 8.6% y-o-y rise in revenues and 34% y-o-y rise in net profit aided by higher execution, lower interest

outgo, higher other income and lower depreciation.

• The company maintained its order intake target of Rs. 10,000 crore for FY2021 and FY2022. The order book at Rs. 18,000 crore, 3.6x TTM revenues provides strong

revenue visibility.

• Company asset divestment plan on track and is expected to complete by FY2021 end. Balance sheet health improves with higher cash and lower working capital

requirement.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/PNC_Infra_3R-Feb05_2021.pdf

Feb 08, 2021 Godrej Consumer Products Limited Stock Update BUY 736 850

Summary

• Godrej Consumer Products (GCPL) revenues grew by ~10% with India and international business growing by 11% and 10%, respectively in Q3FY2021. OPM improved

by 55 bps to 23.3%.

• Domestic soaps and hair colour categories grew in mid-teens; household insecticide segment rose by 7%. Globally, Africa and LatAm markets posted double digit

growth of 17% and 12% respectively.

• Domestic soaps and hair colour to maintain double-digit growth; Africa will continue to grow in double digits in the coming quarters. Margins to be broadly maintained

through price hikes and stringent cost-saving measures

• We maintain earnings estimates for FY2021/22/23 as results matched expectations. We retain a Buy on the stock with unchanged PT of Rs. 850.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/GCPL-3R-Feb08_2021.pdf

Stock Update


EQUITY FUNDAMENTALS




Feb 08, 2021 Britannia Industries Stock Update BUY 3,473 4,200

Summary

• Britannia Industries (Britannia) volumes grew by 4-5% lower than ours as well the street’s expectation of 7-8%. General trade and rural markets are growing above

pre-COVID levels; urban towns and alternate channels (including modern; institutional) are yet to recover.

• Adjacent products continue to perform well with rusk, cheese registering strong double-digit growth of 14%; lower milk prices helped dairy segment’s profitability to

improve to 22% (OP stood at 19.3%).

• New launches, recovery in alternate channels, sustained strong growth in the Hindi-speaking belts and better performance of adjacencies would drive revenue growth

ahead. Input cost inflation (largely palm oil) will be mitigate with efficiencies (focus on maintaining OPM at existing levels).

• Stock trades at 41.4x/35.7x FY2022/23E EPS; with focus on becoming a large snacking company and driving up OPMs; we maintain our Buy with an unchanged PT

of Rs. 4,200.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Britannia_3R-Feb08_2021.pdf

Feb 08, 2021 Torrent Pharmaceuticals Limited Stock Update BUY 2,758 3,100

Summary

• We retain Hold recommendation on Torrent Pharmaceuticals Limited (Torrent) with a revised PT of Rs 3100.

• Torrent has reported a healthy performance for the quarter, largely backed by a growth in the domestic and Europe business, while the US and the Brazil business

continued to remain under pressure.

• Going ahead the outlook for the India business is healthy and the company expects to outperform the industry growth backed by price increase and new product

launches. Europe business too is on the path to improvement.

• Lack of new launches, price erosion, OAL/WL status at Indrad Dahej & US plant could drag the US business, while adverse currency movements to impact growth in

Brazil business.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Torrent_3R-Feb08_2021.pdf

Feb 08, 2021 Affle (India) Limited Stock Update BUY 4,283 5,000

Summary

• We maintain Buy on Affle (India) Limited (Affle) with a PT of Rs. 5,000, given its end-to-end offerings, presence in high-growth industries, and unique CPCU business

model.

• For Q3FY2021, Affle continued to report stellar revenue growth, led by strong 46.4% y-o-y growth in converted users; EBITDA margin contracted by 340 bps y-o-y

owing to higher employee costs and other costs.

• Given increasing time spent on mobile and connected devices and rising adoption of digital transformation by enterprises, management sees tremendous opportunity

for further scale of its business as the digital ad spend would increase RoI of advertisers.

• Given the presence in high-growth verticals, wallet share gains, and focus on new markets, Affle is well placed to derive benefits going ahead. We expect earnings

to post a 28% CAGR over FY2021-FY2023E.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Affle-3R-Feb08_2021.pdf

Feb 08, 2021 Insecticides (India) Limited Stock Update BUY 489 590

Summary

• Q3FY2021 results were weak as OPM missed by 306 bps at 5% (down 370 bps y-o-y); it led PAT to be 46% lower than expected at Rs. 6 crore (down 30.9% y-o-y). OPM shrunk due to a

492 bps y-o-y decline in gross margins to 21.1% (high raw material cost & rise in higher share of low margin generic products) and increase in logistic cost.

• Although revenues grew by 13.8% y-o-y to Rs. 299 crore, the mix deteriorated as share of branded products declined by 668 bps y-o-y to 68.8% while that of low

margin institutional sales increased by 743 bps y-o-y to 26.4%.

• Management guided for 15% revenue growth for FY2022 led by new launches and expects gross margin to recover gradually to historical level of 29-30% supported

by backward integration, product price hikes and rise in share of high-margin products.

• We maintain a Buy on Insecticides (India) with a revised PT of Rs. 590 as we expect strong earnings recovery (PAT to clock 38% CAGR over FY21E-FY23E) along with

decent RoE of 15-16%. At CMP, stock is trading at an attractive valuation of 6.6x FY2023E EPS.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Insecticides_3R-Feb08_2021.pdf

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Feb 08, 2021 Ashoka Buildcon Limited Stock Update BUY 104 125

Summary

• We retain a Buy on Ashoka Buildcon Limited (Ashoka) with a revised price target of Rs. 125, considering a healthy order backlog, comfortable liquidity and improving industry outlook.

• Q3FY2021 standalone revenues were lower than estimated, led by delayed receipt of appointed dates for few projects while OPM too lagged expectations.

• Expect execution to improve from Q4FY2021. Management retained FY2021 standalone revenue guidance and raised it for FY2022. OPM guidance lowered.

• Asset monetisation is in final stages and is likely to be completed by Q4 and receive the funds by Q2FY2022. Aid in de-leveraging and freeing up equity capital.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/AshokaBuildcon-3R-Feb08_2021.pdf

Feb 08, 2021 Aditya Birla Fashion and Retail Limited Stock Update BUY 193 255

Summary

• Aditya Birla Fashion & Retail Limited (ABFRL) is eyeing a 15% CAGR in revenue growth over FY2020-26, by achieving a steady growth of 11-16% CAGR in the core

businesses of Pantaloons and lifestyle brands and a scale-up in new businesses.

• The company aims to achieve OPM of 11.2% in FY26 from 7.6% in FY20 by improving product mix for lifestyle business, boosting store-level profitability of Pantaloons

and making all new ventures profitable through scale-up.

• ABFRL is focusing on achieving cumulative free cash flow of Rs. 2,000 crore over FY22-26; RoCE of over 35% by FY26.

• Robust business model, structural growth story of branded apparel market and strengthening of balance sheet makes ABFRL a preferred pick in the discretionary

consumption theme. We maintain a Buy with a revised PT of Rs. 255..

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/AdityaBirla-3R-Feb08_2021.pdf

Feb 08, 2021 Punjab National Bank Stock Update BUY 38 42

Summary

• Operational performance was reasonably strong, but asset-quality outlook continues to be uncertain.

• The Proforma Gross NPA and Proforma Net NPA ratio at 14.71% and 5.65%, respectively, are not materially ahead of reported numbers.

• Collections efficiency dipped in December, taking Q3 CE to 88%; but it was 92% till November.

• PNB currently trades at 0.8x/0.60x its FY2022E/FY2023E ABVPS, we maintain our Hold rating with a revised PT of Rs. 42.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/PNB-3R-Feb08_2021.pdf

Feb 09, 2021 Bharat Petroleum Corporation Limited Stock Update BUY 419 520

Summary

• Q3FY21 was strong as operating profit/adjusted PAT at Rs. 4,306 crore/Rs. 3,058 crore, up 68%/133% y-o-y and beat of 22%/50% vs. street estimates led by strong

performance in refining & marketing segment, higher other income and lower interest cost.

• BPCL’s net marketing margin rose 2.2x y-o-y to Rs. 3,597/tonne and outperformed peers with highest GRM of $2.5/bbl, refinery utilisation (105%) and market share

gain in petrol/diesel. Earnings also benefited from inventory/forex gain of Rs. 711 crore/Rs. 96 crore.

• Q4FY21 earnings could moderate due to weak marketing margins and lower inventory gain (crude valued at $53/bbl vs. spot oil price of $58/bbl). Strong outlook for

FY22 led by cyclical GRM recovery, volume growth and normalisation of auto fuel marketing margins.

• Privatisation could re-rate BPCL as valuation of refining & marketing assets could get aligned to that of global peers and create long-term value for investors. Hence,

we maintain a Buy on BPCL with a revised PT of Rs. 520.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/BPCL_3R-Feb09_2021.pdf

Feb 09, 2021 Abbott India Limited Stock Update BUY 14,671 19,425

Summary

• We retain our Buy recommendation on the stock of Abbot India Limited (Abbott) with an unchanged PT of Rs 19425.

• Abbot reported a soft performance for the quarter reflecting the underperformance of acute therapies, while the earnings missed estimates.

• Abbott’s topline is expected to grow in double digits, backed by strong performance of its power brands and a sturdy new product pipeline.

• Better growth prospects backed by a revival in the acute therapies, a strong balance sheet position because of debt-free status and moderate capex coupled with

healthy operating cash flows are the key positives.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Abbott_3R-Feb09_2021.pdf

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Feb 09, 2021 Balkrishna Industries Stock Update HOLD 1,666 1,800

Summary

• Despite strong operational performance in Q3FY21, we are concerned that Balkrishna Industries Limited’s (BKT) return ratios and EBITDA margins would decline in the

medium-term, owing to significant capex commitment towards non-core business. Thus we downgrade the stock to Hold rating with a PT of Rs 1,800.

• BKT reported another strong quarter in Q3FY21 with PAT improving 42% y-o-y, aided by volume growth and margin expansion.

• The stock is trading at premium to its historical averages at P/E multiple of 20.4x and EV/EBITDA multiple of 14.2x its FY2023E estimates.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Balkrishna_3R-Feb09_2021.pdf

Feb 09, 2021 Spandana Sphoorty Financials Limited Stock Update BUY 761 850

Summary

• Spandana Sphoorty Financials Limited (SSFL) posted weak results for Q3FY2021 with operational numbers coming below expectations; however, pickup in

disbursement was encouraging.

• Asset-quality performance mixed, with Q3 seeing large write-off of Rs. 212 crore, which made PAT miss estimates. However, collection efficiency (CE) at 96% and is

nearing pre-Covid levels.

• A diversified book with no district having more than 1.5% of AUM and no branch more than 1% of AUM augurs well; SSFL trades at 1.6x / 1.3x its FY2022E/FY2023E

BVPS, which we believe are reasonable.

• We maintain Buy with an unchanged PT of Rs. 850.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Spandana_3R-Feb09_2021.pdf

Feb 10, 2021 Titan Company Limited Stock Update BUY 1,563 1,710

Summary

• Titan Company’s (Titan) Q3FY2021 consolidated operating performance came in-line with expectations with revenues rising by 17% to Rs. 7,619 crore and OPM at 11.1%.

• Jewellery sales (excluding Bullion sales) grew by 16% in Q3 as soaring festive demand let to better footfalls. Watches and Eyewear businesses recovered to 88% and

92% in Q3 and are expected to bounceback fully by Q4.

• Better operating leverage helped OPM improve sequentially to 11.1% from 6.9% in Q2; OPM likely to be at 12-13% in FY22/23.

• We maintain a Buy rating with an unchanged PT of Rs. 1,710; strong recovery anticipated in FY2022 and robust return profile make Titan a better play in retail space.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Titan-3R-Feb10_2021.pdf

Feb 10, 2021 GAIL (India) Limited Stock Update BUY 134 155

Summary

• Q3FY2021 operating profit of Rs. 1,920 crore (up 43.4% q-o-q) missed our estimate by 12% due to EBITDA loss of Rs. 45 crore for the gas marketing business, which

offset robust petchem EBITDA (up 5.2x y-o-y to Rs. 549 crore).

• Volumes across segments are back to pre-COVID-19 levels with gas transmission/marketing volume at 110 mmscmd/96 mmscmd and petchem utilisation at 106%.

• Earnings to improve over FY2022-FY2023, as higher gas demand from fertilser plants in India would address concerns of marketing of US LNG contracts, sustained

high petchem profitability, and 5%-6% annual growth in gas transmission volumes.

• Valuation of 6.1x its FY2023E EV/EBITDA seems attractive given potential value unlocking from monetisation of gas pipeline assets and dividend yield of ~5%. Hence,

we maintain our Buy rating on GAIL with a revised PT of Rs. 155.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/GAIL-3R-Feb10_2021.pdf

Feb 10, 2021 Indraprastha Gas Limited Stock Update BUY 557 650

Summary

• Q3FY2021 operating profit stood at Rs. 501 crore, up 27.8% y-o-y and 2% ahead of our estimates as beat in EBITDA margin at Rs. 8.7/scm (up 36.7% y-o-y) was partially

offset by slight miss in gas sales volume at 6.3mmscmd (up 13.8% q-o-q).

• Sharp recovery in CNG volume to 91% of pre-COVID-19 level to 4.5mmscmd, while domestic and I/C PNG volume grew by 14% and 2% y-o-y respectively. Robust gross

margin at Rs14.6/scm (up 24.1% y-o-y).

• High EBITDA margin to sustain over FY2022-FY2023E, given ability to pass any rise in APM gas price; volume growth (guidance of 12% CAGR over FY20-FY24E) to

outpace the industry’s growth led by high gas demand in in existing GAs and ramp-up volume at new GAs.

• We maintain Buy on Indraprastha Gas Limited (IGL) with a revised PT of Rs. 650 given strong earnings growth outlook and high RoE of 22%-23%. Robust volume growth

track-record justifies premium valuation of 24.4x its FY2023E EPS.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/IGL_3R-Feb10_2021.pdf

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Feb 10, 2021 Max Financial Services Stock Update BUY 738 1,000

Summary

• Q3FY21 results were strong; Max Life Insurance (MLI) clocked robust 37% growth in VNB, driven by strong 22% growth in APE, and a robust 270 bps expansion in

VNB margin to 26.5%.

• We see operating leverage benefits kicking in going ahead, as improving business mix would support VNB margins; we believe Indian insurance market has attractive

growth opportunities.

• Stock available at 2.1x / 1.8x FY2022E / FY2023E EVPS; valuations are reasonable and are still at a discount to some bank-owned life insurance companies.

• Deal with Axis positive and will provide re-rating boost; we maintain a Buy rating with a revised price target (PT) of Rs. 1,000.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Max-3R-Feb10_2021.pdf

Feb 10, 2021 Bata India Limited Stock Update BUY 1,564 1,765

Summary

• Bata India’s (Bata) Q3FY2021 business recovered to ~74% of pre-COVID levels, better than a 50% revival in Q2FY2021. Higher festive sales and target customer

outreach led to a 67% growth q-o-q.

• Gross margins stood at 51.5% versus 61% in Q3FY20 affected by an unfavourable mix as formals and fashion categories yet to revive. OPM stood at 19% versus 4.9% in Q2FY21.

• Receding COVID-19 cases, improvement in market sentiments and likely improvement in mobility with opening up of commercial economy/education institutions

would help business get to pre-COVID level in 5-6 months.

• We maintain a Buy on Bata India (Bata) with a revised PT of Rs. 1,765. Stock is currently trading at 47x its FY2023E EPS and 18.6x its FY2023 EV/EBIDTA.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Bata_3R-Feb10_2021.pdf

Feb 10, 2021 Mahanagar Gas Limited Stock Update BUY 1,130 1,380

Summary

• Q3FY2021 operating profit/PAT at Rs. 317 crore/Rs. 217 crore; up 22.4%/16.7% y-o-y and in-line with our estimates but were higher by 12%/10% versus consensus

estimates led by a sharp recovery in gas sales volumes (up 32.2% q-o-q) and record-high EBITDA margins of Rs. 12.4/scm (up 34.8% y-o-y).

• CNG/Domestic PNG volume stood at 85%/124% of pre-COVID-19 level at 1.9 mmscmd/0.5 mmscmd; Industrial/Commercial (I/C) PNG volume declined by 9% y-o-y.

Highest ever gross margins of Rs. 17.7/scm (up 27.6% y-o-y).

• Improving volume and sustainable high margin bode well for a strong Q4FY21. Double-digit volume growth guidance for FY22 and a 5-6% growth thereafter would

drive an 18% PAT CAGR over FY21E-FY23E.

• MGL’s underperformance to Sensex is likely to reverse as earnings outlook has improved and overhang of open access is over. Valuation of 12.1x its FY23E EPS is most

attractive in the CGD space. We retain Buy on MGL with an unchanged PT of Rs. 1,380.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/MGL_3R-Feb10_2021.pdf

Feb 10, 2021 Century Plyboards (India) Limited Stock Update BUY 293 340

Summary

• We retain our Buy rating on Century Plyboards Limited (Century) with a revised PT of Rs. 340, as we see further room for an upside considering its strong growth

outlook and healthy balance sheet.

• Q3FY2021 numbers beat expectations on all front led by strong revenue growth and expansion in OPM in its key business verticals.

• Strong demand momentum is expected to continue going ahead along with sustaining OPM. The company becomes practically debt free with lowest working capital cycle days.

• Plans of brownfield and Greenfield expansion in MDF. Equipment re-balancing to enhance capacities of Plywood, laminates and particle board.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/CenturyPly-3R-Feb10_2021.pdf

Feb 10, 2021 TCI Express Limited Stock Update BUY 960 1,150

Summary

• We retain a Buy on TCI Express Limited (TCI) with a revised price target of Rs. 1150 factoring a rise in estimates and strong profitable growth path.

• OPM continued to outperform despite revenues being impacted by a weak November 2020.

• Expect revenue to improve as manufacturing activity picks up. Long-term guidance of doubling revenues and tripling net profit over four years remains intact.

• Pune and Gurgaon sorting centres to begin operations in Q4FY2021 and Q1FY2022, respectively. Company eyeing newer locations in Chennai, Mumbai, Nagpur and

Indore.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/TCI-3R-Feb10_2021.pdf

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Feb 10, 2021 Bank of India Stock Update BUY 61 68

Summary

• Bank of India (BOI) reported mixed results, wherein operating performance was below expectations (NII, PPOP, PAT below estimates), but CASA deposits rose on a

q-o-q basis and encouraging asset-quality performance.

• Global net interest margin (NIM) fell by 8 bps from 2.66% in Q2FY2021 to 2.58% in Q3FY2021, down 40 bps y-o-y. Domestic NIM also contracted to 2.81% in Q3FY2021,

down 7 bps from Q2FY2021.

• We believe asset-quality headwinds are likely to persist in the medium term; however, high PCR and the expected recovery may somewhat soften the impact.

• BOI currently trades at 0.31x/0.26x its FY2022E/FY2023E ABVPS. We have finetuned our estimates. We maintain our Hold rating with a revised PT of Rs. 68.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/BoI_3R-Feb10_2021.pdf

Feb 11, 2021 ITC Limited Stock Update BUY 226 265

Summary

• ITC’s Q3FY2021 cigarettes sales volume declined by ~7% (net sales declined by ~8%), better than 12% volume decline (net sales decline of 14%) in Q2FY2021.

• Non-cigarette FMCG maintained its double-digit revenue growth momentum and margin scale up; business revenue grew by 11% on comparable basis and margins

were up by 150 bps to 9.2% (YTD EBIDTA margin stood at 8.9% versus FY2020 EBIDTA margin of 6.8%).

• With no increase in tax rate on cigarettes, we expect cigarette sales volume to gradually pick up; FMCG is gaining good traction and will maintain its double-digit

revenue growth and OPM expansion. Hotel business is expected to come back on track in FY2022.

• The stock is currently trading at discounted valuation of 16.1x its FY2023E EPS. Consistent improvement in non-cigarette FMCG margins along with normalisation of

cigarette would be key re-rating trigger for the stock. We maintain Buy with a revised PT of Rs. 265.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/ITC_3R-Feb11_2021.pdf

Feb 11, 2021 Aurobindo Pharma Limited Stock Update BUY 935 1,100

Summary

• We retain our Buy recommendation on Aurobindo Pharma Limited (Aurobindo) with a revised PT of Rs. 1,100.

• Q3FY2021 revenues, operating profits and PAT slightly lagged estimates; adjusting for one-off gains, PAT stood at Rs. 836 crore, up 18.5% y-o-y but missed estimates.

• Expected traction in injectable, strong growth outlook for US and Europe geographies would be the key growth drivers, while the areas of Vaccine and API would fuel

the growth over the long term.

• Focus on building and developing a strong portfolio of specialty products (biosimilars, oncology, inhalers, transdermal patches, etc) would be key growth drivers.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Aurobindo-3R-Feb11_2021.pdf

Feb 11, 2021 Gujarat State Petronet Limited Stock Update BUY 233 300

Summary

• Q3FY2021 operating profit/PAT at Rs. 398 crore/Rs. 248 crore exceeded estimates by 6%/9% led by 3.6% beat in gas transmission volume and lower-than-expected

operating cost and depreciation.

• Volumes would be temporarily affected in Q4FY2021 (to decline 14% q-o-q to 33-34 mmscmd) due to lower offtake from refineries. Long-term outlook is intact led by

regulatory push and unified tariffs. Spot LNG price has corrected to $6.5/mmBtu and would aid volume growth.

• Core pipeline business is effectively available free to investors as market value of GSPL’s investment in Gujarat Gas (after assuming 20% holding company discount)

is close to GSPL’s current market capitalisation of Rs. 13,143 crore). Hence, we see deep value for investors in GSPL.

• We maintain our Buy rating on GSPL with an unchanged PT of Rs. 300 given strong earnings growth outlook, revival of capex plan (Rs. 500 crore for FY22) and

management focus to become debt free.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/GSPL-3R-Feb11_2021.pdf

Feb 11, 2021 Bosch Limited Stock Update BUY 16,211 18,156

Summary

• We retain a Buy rating on Bosch Limited (Bosch) with a revised PT of Rs. 18,156, factoring a recovery in its business outlook and earnings upgrade.

• Q3FY21 results beat estimates, driven by faster-than-expected recovery in sales. However, EBITDA margins lagged expectations by 20 bps.

• We expect Bosch’s earnings to grow robust 46.4% in FY2022E and 21.5% in FY2023E, driven by a rise in demand and operating leverage benefits.

• Expansion of power tool business’ distribution network, export of BS-VI automotive components to neighbouring countries, increased adoption of connected and EVs

would be key growth drivers.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Bosch-3R-Feb11_2021.pdf

Stock Update


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Feb 11, 2021 Repco Home Finance Limited Stock Update BUY 259 330

Summary

• Repco Home Finance Limited (Repco) posted strong performance in Q3FY2021; healthy operational numbers, margin improvement, better collections, and growth in

commentary were key positives.

• Healthy business traction with Q3FY2021 disbursement up 18% q-o-q; Encouraging asset-quality performance with reported GS3/proforma GS3 at 3.3%/4.3%

(manageable gap), with 97% collection efficiency (up from 93% September levels) and low restructuring.

• Available at 0.9x/0.8x its FY2022E/FY2023E, which we believe is reasonable; a strong business model, stable ratings, and conservative underwriting with attractive

return ratios make RHFL attractive.

• Management commentary is positive. We maintain Buy with unchanged PT of Rs. 330.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/RepcoHome-3R-Feb11_2021.pdf

Feb 11, 2021 Polyplex Corporation Limited Stock Update HOLD 918 950

Summary

• Post a sharp increase in PCL’s stock price, valuation of 6.3x FY2023E EPS is above its 5-year average one-year forward PE multiple of 5.2x and limits further valuation

re-rating given cyclical natural of the business. Hence, we downgrade PCL to Hold (from Buy) with a revised PT of Rs.950.

• Q3FY21 consolidated adjusted operating profit at Rs. 329 crore (up 54.6% y-o-y; up 1.6% q-o-q) slightly lagged estimates as beat in volumes (up 19.6% y-o-y) was offset

by a miss in OPM by 89 bps to 26.6%.

• BOPET spreads seem to have peaked out and could contract going forward as realisations fall with a rise in supplies, while raw material costs also harden as oil prices

surge to $61/bbl.

• We believe that PCL’s FY2021E margin/PAT of 26.7%/Rs. 516 crore are near peaks of the BOPET margin cycle and are not sustainable over FY2022E-FY2023E despite

addition of new capacities (capex plan of $195 million).

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Polyplex_3R-Feb11_2021.pdf

Feb 11, 2021 Suprajit Engineering Limited Stock Update BUY 256 300

Summary

• We reiterate our Buy rating on Suprajit Engineering Limited (SUPRAJIT) with a revised PT of Rs. 300, factoring its long-term average multiples, owing to its strong

business outlook and earnings upgrade.

• SUPRAJIT reported strong set of numbers in Q3FY21 results, exceeding our estimates on all the key parameters.

• We expect SUPRAJIT’s consolidated earnings to grow robust by 40.8% in FY2022E and 23.4% in FY2023E, driven by 19.0% CAGR during FY2021E-FY2023E and 160

bps improvement in EBITDA margin.

• The stock is trading below its average historical multiple at P/E multiple of 15.6x and EV/EBITDA multiple of 10.1x its FY2023E estimates. We retain our Buy rating.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Suprajit_Engg-3R-Feb11_2021.pdf

Feb 11, 2021 Greaves Cotton Limited Stock Update BUY 88 110

Summary

• We upgrade Greaves Cotton Limited (Greaves) to Buy with a revised PT of Rs. 110, factoring in faster than expected recovery in its business outlook and improved

operational performance.

• Greaves reported strong set of numbers in Q3FY21, ahead of our expectations at both revenue and operational level.

• We expect Greaves’ earnings to grow robust 92.4% in FY2022E and 35.4% in FY2023E, driven by 19.9% CAGR during FY2021E-FY2023E and 450 bps improvement

in EBITDA margin.

• The stock is trading below its average historical multiple at P/E multiple of 13.6x and EV/EBITDA multiple of 7.5x its FY2023E estimates. We upgrade our rating to Buy

call.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/GreavesCotton-3R-Feb11_2021.pdf

Stock Update


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Feb 12, 2021 Power Grid Corporation of India Limited Stock Update BUY 213 245

Summary

• Q3FY2021 PAT increased by 24.3% y-o-y to Rs. 3,324 crore, which was 4.7% above our estimate of Rs. 3,174 crore. Robust growth in PAT was led by capitalisation of

Rs. 12,574 crore in 9MFY2021 and higher other income (up 25.7% y-o-y).

• Management has guided for capex of Rs. 10,500 crore/Rs. 7,500 crore and asset capitalisation of Rs. 21,000 crore/Rs. 10,000 crore for FY2021E/FY2022E. Work in

hand at Rs. 47,100 crore provides earnings visibility (expect a 17% PAT CAGR over FY2021E-FY2023E).

• Monetised five TBCB assets worth Rs. 7,200 crore through the launch of InvIT by March 2021 could help unlock value. Reduction in receivables (through the power

sector package of over Rs. 3 lakh crore) would improve the balance sheet.

• Hence, we maintain our Buy rating on Power Grid with a revised PT of Rs. 245, given earnings visibility, attractive valuation of 1.3x its FY2023E P/BV (25% discount to

historical P/BV), and healthy dividend yield at 5%.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Power_Grid_3R-Feb12_2021.pdf

Feb 12, 2021 Coal India Limited Stock Update BUY 134 160

Summary

• Q3FY21 operating profit of Rs. 5,165 crore (up 29.9% q-o-q) was 10% above our estimate as efficient cost management helped EBITDA/tonne beat expectations at Rs.

336/tonne (up 13% q-o-q). PAT at Rs. 3,085 crore was 14% below estimates due to lower other income and a high tax rate.

• Coal inventory at power plants fell to 18 days, which bodes well for higher coal offtake over Q4FY2021-Q1FY2022. Moreover, blended realisations expected to

improve as e-auction premiums also improved to 25% versus 16% in 9MFY2021.

• Capital allocation for non-core investments (aluminium smelting and solar energy) would be done if there are reasonable returns. Non-core investment would be taken

up in partnership with established players and Coal India will not expose itself to technology/capital risks.

• Stock trades at an attractive valuation of 4.6x its FY2023E EPS (close to trough valuation) and offers a high dividend yield of 10-12%. Hence, we maintain a Buy rating

with an unchanged PT of Rs. 160.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Coal_India_3R-Feb12_2021.pdf

Feb 12, 2021 Grasim Industries Limited Stock Update BUY 1,242 1,430

Summary

• We retain Buy on Grasim with a revised PT of Rs.1430 led by upwardly revised estimates and assigning premium due to its foray into paints business.

• Grasim reported strong outperformance during Q3 which was led by strong OPM for Viscose business led by higher realization, lower fixed costs and input cost benefits.

• Viscose demand and prices are expected to remain firm aiding in sustaining standalone profitability. Reduction in consolidated and standalone net debt continues to

strengthen balance sheet.

• Viscose and chemical expansion plans on track and expected to complete by Q3FY2022.The board yet to approve capex plans for FY2022.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Grasim_3R-Feb12_2021.pdf

Feb 12, 2021 Petronet LNG Stock Update BUY 242 300

Summary

• Robust Q3FY2021 results with 17% beat in operating profit at Rs. 1,335 crore, led by better cost management and inventory/trading gain of Rs. 60 crore/Rs. 54 crore on spot volumes.

• Kochi-Mangalore pipeline commissioned in November 2020, which would improve utilisation level of Kochi LNG terminal to 30% by Q3FY2022. Further ramp-up to

50%-60% likely with completion of Kochi-Bangalore pipeline section over the next 2-3 years.

• Notwithstanding slight moderation in Dahej utilisation in Q4FY2021, we believe PLNG is well positioned to tap India’s rising LNG consumption with 5mmt expansion at

Dahej terminal in two phases over the next 3-4 years. Focus on LNG fuel retailing and compressed biogas to aid in long-term volume growth.

• Valuation is attractive at 9.9x its FY2023E EPS, given earnings visibility, high RoE, and FCF/Dividend yield of 9%/6%. PLNG’s non-regulated business model should

command superior valuation. We maintain Buy on PLNG with an unchanged PT of Rs. 300.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Petronet_LNG_3R-Feb12_2021.pdf

Feb 12, 2021 Ashok Leyland Limited Stock Update BUY 128 151

Summary

• We reiterate our Buy rating on Ashok Leyland Limited (ALL) with a revised PT of Rs 151, owing to faster than expected recovery in macro-economic activities, leading to benefits in the CV industry.

• ALL’s Q3FY21 results were below expectations, mainly due to lower than expected recovery in EBITDA margins.

• We expect ALL’s profitability to improve significantly, with its EBITDA growing at 157% CAGR for FY2021-23E.

• Despite the run up in the stock, it is still available below its historical average multiples. The stock is trading at P/E of 18.3x and EV/EBITDA of 10.2x its FY2023E estimates. We retain our Buy rating on the stock.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Ashok_Leyland_3R-Feb12_2021.pdf

Stock Update


EQUITY FUNDAMENTALS




Feb 12, 2021 Amara Raja Batteries Limited Stock Update BUY 990 1,146

Summary

• We maintain our Buy rating on Amara Raja Batteries (Amara) with a revised PT of Rs. 1,146, owing to a improving batteries demand outlook for automotive and industrial

segments (telecom and UPS).

• Q3FY21 revenues broadly in-line with our estimates but misses on EBITDA margin.

• Amara well-positioned to gain market share in lead acid battery business by adding clients and widening replacement distribution network. EBITDA margins to remain

firm, driven by favourable product mix, led by a higher share of revenues from replacement segment, operating leverage benefits and cost-cutting measures.

• The stock trading below its historical average multiples at P/E multiple of 19.6x and EV/EBITDA multiple of 10.0x its FY2023 estimates.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Amara_Raja_3R-Feb12_2021.pdf

Feb 12, 2021 KNR Constructions Limited Stock Update BUY 222 270

Summary

• We retain a Buy on KNR Constructions with a revised price target of Rs. 270 led by upwardly revised earnings estimates for FY2021-FY2023.

• Execution, margins and net profitability outperformed strongly. The company saw significant collection of outstanding receivables in Irrigation space.

• Management retained FY2021 revenue guidance and expects 15-20% y-o-y growth in FY2022 revenues. Order inflows of Rs. 3,000-4,000 crore expected for

remainder of FY21.

• KNR in talks to offload three HAM projects which are expected to completed by June 2021. Balance sheet remains sturdy.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/KNR_Cons_3R-Feb12_2021.pdf

Feb 12, 2021 Shilpa Medicare Limited Stock Update BUY 430 520

Summary

• We retain our Buy recommendation on Shilpa Medicare Limited (SML) with a revised PT of Rs. 520.

• SML reported weak performance for Q3FY2021 with results missing estimates. However, SML’s growth prospects are healthy and performance is expected to improve.

• The Erosion in the US business due to receipt of the warning letter is likely to be offset by growth in other geographies, new product pipeline.

• SML’s strategy of building a high-value oncology pipeline for regulated markets and foray into biosimilars/biologics, coupled with focus to pursue opportunities in

CDMO & Vaccines space would play out well and support growth.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Shilpa_Medicare_3R-Feb12_2021.pdf

Feb 12, 2021 Kirloskar Oil Engines Limited Viewpoint POSITIVE - 148 28-30% -

Summary

• We initiate Viewpoint coverage on Kirloskar Oil Engines Ltd (KOEL) with a Positive view and expect a 28-30% upside, given a high net earnings growth trajectory for

FY2021E-FY2023E and discounted valuations.

• A diversified business model,strong product portfolio and new launches would sustain growth momentum; recovery in private capex also bodes well.

• The company generates strong operating cash flows, free cash flows aided by limited capex requirement.Its net standalone cash surplus along with current

investments stood over Rs. 300 crore in FY2020.

• National Infrastructure Pipeline investments, rising power generation requirements across sectors and onset of stricter emission norms to create sustainable long-term

growth opportunities.

Read report - https://www.sharekhan.com/MediaGalary/Equity/Kirloskar_3R-Feb12_2021_NewIdea.pdf

Feb 15, 2021 Info Edge (India) Limited Stock Update BUY 5,520 6,100

Summary

• We retain a Buy rating on Info Edge (India) Limited with a revised PT of Rs. 6,100, given a faster-than-expected recovery across key businesses segments and

improving valuation of investee companies.

• Revenue was broadly in-line, EBITDA margin missed estimates; while billings were back on track. Recruitment and 99acres businesses saw a strong sequential

recovery, while Jeevansathi.com and Shiksha grew by 15% y-o-y and 24%, respectively.

• We expect a strong 26% CAGR in revenues over FY2021-23E, led by a recovery in billings across key businesses, pent-up demand in new /resale homes, and market

share gains in Jeevansathi.com business.

• We like Info Edge given its dominant position in online classifieds, proactive in its new product offerings, a strong balance sheet, prudent capital allocation and

successful investments at the early stage of tech start-ups.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Info-3R-Feb15_2021.pdf

Stock Update


EQUITY FUNDAMENTALS




Feb 15, 2021 Kalpataru Power Transmission Limited Stock Update BUY 369 485

Summary

• We maintain our Buy rating on Kalpataru Power Transmission Limited (KPTL) with a revised PT of Rs. 485, rolling forward our standalone valuation multiple to FY2023E.

• Kalpataru Power Transmission Limited’s (KPTL) steady performance in Q3FY2021 results despite challenges. Order inflow remained healthy during Q3FY21 and order

backlog remains strong providing 1.7 x TTM standalone revenues.

• Management expects better revenues y-o-y with stable margins for FY21. It expects double digit growth with stable margins in FY2022. Order inflow to be in the range

of 9,000-10,000 crore in FY22E.

• Expecting deal closure for the sale of its third project Kohima Mariani Transmission in Q4FY21 or else by Q1FY22 which would further deleverage its balance sheet.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/KPTL-3R-Feb15_2021.pdf

Feb 15, 2021 MOIL Limited Stock Update BUY - 139 170 -

Summary

• Q3FY2021 results were weak with revenues/operating profit missing estimates by 13%/23% at Rs.268 crore/Rs. 76 crore due to lower-than-expected manganese ore

sales volume and weak blended manganese ore realisations.

• We expect earnings to recover sharply over FY2022E-FY2023E given expectation of a strong recovery in manganese ore volumes (led by higher steel demand) and

better realisations (MOIL has hiked prices by 15-20% in last two months).

• High cash & cash equivalents of Rs. 1,869 crore (Rs. 79/share or 57% of market capitalisation) provides room for higher dividend (company announced interim dividend

of Rs. 2.5/share) and share buyback.

• Moreover, MOIL is trading at an attractive valuation of 2.4x FY23E EV/EBITDA (close to its trough levels). Hence, we recommend a Buy on MOIL with a PT of Rs. 170.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/MOIL-3R-Feb15_2021.pdf

Feb 15, 2021 Mayur Uniquoters Stock Update BUY 403 500

Summary

• We maintain our Buy rating on Mayur Uniquoters Limited (MUL) with a revised PT of Rs. 500, owing to its robust growth in automotive segment and a recovery in footwear business.

• MUL’s Q3FY21 results are ahead of our expectations, led by strong performance across all the parameters.

• MUL is well positioned to benefit from the robust demand in automotive business and recovery in the footwear segment. EBITDA margins are to remain firm, driven

by backward integration, operating leverage benefits and cost-cutting measures.

• The stock is trading below its historical average multiples at P/E multiple of 13.7x and EV/EBITDA multiple of 8.2x its FY2023 estimates.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Mayur_Uniquoters_3R-Feb15_2021.pdf

Feb 15, 2021 Sadbhav Engineering Limited Stock Update BUY 80 100

Summary

• We maintain Buy on Sadbhav Engineering Limited (SEL) with a revised PT of Rs. 100, factoring improving outlook and undemanding valuation.

• Standalone revenue was in line with estimates, while OPM beat estimates. Labour and supply chain returned to normalcy, aiding in improving execution at almost all sites.

• Management has retained its revenue and order intake guidance for FY2022. Execution is gathering pace along with receipt of appointed dates for two EPC projects

to aid in meeting FY2022 revenue guidance.

• Recent fund raising from investor consortium to aid in fulfilling balance equity requirement in HAM and reduce debt. Management plans to further offload 6 to 7 HAM

projects in IndInfravit Trust.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Sadbhav-3R-Feb15_2021.pdf

Feb 15, 2021 JMC Projects (India) Limited Stock Update BUY 76 95

Summary

• We retaina Buy rating on JMC Projects with a revised price target of Rs. 95,owing to improving business fundamentals and positive road sector outlook.

• The company reported better-than-expected execution led by both B&F and infrastructure divisions. However, OPM lagged estimates on account of rise in labour

cost and commodity price rise.

• The management retain healthy execution outlook for Q4 and FY2022 along with double digit OPM. Order inflows outlook too remains strong.

• The management expects restructuring and monetization of assets to conclude by Q2FY2022. Higher toll revenue collections to aid in lower funding requirement.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/JMC-3R-Feb15_2021.pdf

Stock Update


EQUITY FUNDAMENTALS




Feb 15, 2021 Lumax Auto Technologies Limited Stock Update BUY 129 150

Summary

• We maintain our Buy rating on Lumax Auto Technologies Limited (Lumax Auto) with a revised PT of Rs. 150, owing to positive outlook for the automotive industry.

• Lumax Auto has reported strong numbers, ahead of our expectations, led by stronger sales growth and margin expansion.

• We expect Lumax Auto to benefit from recovery in the two-wheeler and four-wheeler industry, a diversified portfolio, richer product mix, and increased content per

client. We expect PAT growth of 49.5%/22.4% in FY2022E/FY2023E.

• The stock is attractively valued at P/E multiple of 11.2x and EV/EBITDA multiple of 5.6x its FY2023 estimates.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Lumax_3R-Feb15_2021.pdf

Feb 15, 2021 Oil India Limited Stock Update HOLD 116 130

Summary

• Q3FY2021 adjusted operating profit of Rs. 406 crore (down 44.9% q-o-q) substantially lagged estimates due to higher operating cost and a rise in provisions. Adjusted

PAT at Rs. 397 crore (up 6.3% q-o-q) aided by higher other income and tax gains.

• Operational performance was better than expected with oil/gas sales volume at 0.72mmt/0.59bcm, flat/up 6% q-o-q and 3.4%/6.4% ahead of our estimates. Oil

realisation stood at $44.1/bbl (up 3.2% q-o-q),slightly below or estimate of $45.3/bbl.

• Gas business would continue making losses until there are APM gas pricing reforms and recent rally in crude oil prices may not hold if OPEC+ member countries roll

back production cuts. Volatile oil/gas prices and weak production profile makes earnings recovery fragile.

• Hence, we maintain a Hold rating on Oil India with a revised PT of Rs.130 given limited upside potential and weak earnings profile. At CMP, the stock trades at 6.5x

FY2022E EPS and 5.4x FY2023E EPS.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/OilIndia-3R-Feb15_2021.pdf

Feb 16, 2021 Axis Bank Stock Update BUY 775 900

Summary

• Axis Bank has a strong asset-quality position, with the bank having front-loaded of provisions (on a proforma basis), which dovetail into an improved balance sheet

and provide impetus for growth in FY2022E and FY2023E.

• For Q3FY2021, asset quality improved q-o-q; front-loading of provisions (on proforma basis) augurs well for the long term; aggregate basis provision coverage is at

116% of GNPA.

• Management’s growth commentary on FY2022E growth offers confidence; the stock trades at 2.4x/2.2x its FY2022E/FY2023E ABVPS; improving tailwinds are

positive, we have accordingly fine tuned our target multiples.

• We maintain Buy on the stock with a revised PT of Rs. 900.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/AxisBank-3R-Feb16_2021.pdf

Feb 16, 2021 ICICI Bank Stock Update BUY 658 770

Summary

• Asset quality position is strong, with the bank having front-loaded provisions (on a proforma basis), which has strengthened balance sheet; strong capital position

gives it a springboard for growth.

• Reported GNPA / NNPA declined to 4.72% / 0.69% down by 91 bps / 40 bps q-o-q; proforma GNPA / NNPA saw just a slight rise of 6 bps / 14 bps from Q2 FY2021

levels; NIMs improved q-o-q.

• Stock trades at 2.8x/2.5x its FY2022E/FY2023E BVPS; we believe valuations are reasonable, considering the overall franchise value, strong capitalisation and a high PCR.

• We have accordingly fine-tuned our target multiples for the standalone bank. We maintain a Buy rating with a revised SOTP-based price target (PT) of Rs. 770.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/ICICIBank-3R-Feb16_2021.pdf

Feb 16, 2021 IndusInd Bank Stock Update BUY 1,058 1,340

Summary

• IndusInd Bank has a strong asset quality position (with front-loaded provisions) that has led to an improved balance sheet; healthy capitalisation makes it well-placed

to capture growth in FY22E and FY23E.

• Collections efficiency (CE) has been recovering; overall vehicle collection efficiency was at 96.9% and MFI CE was at 94.4%, which is encouraging.

• IIB has total provisions at 188% of GNPAs and 111% of proforma GNPA are a cushion in the present environment.

• At 1.8x/1.6x its FY2022E/FY2023E BVPS, we maintain a Buy rating on stock with a revised PT of Rs. 1,340.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/IndusInd-3R-Feb16_2021.pdf

Stock Update


EQUITY FUNDAMENTALS




Feb 16, 2021 AU Small Finance Bank Stock Update BUY 1,091 1,260

Summary

• AU Small Finance Bank (AUSFB) had front-loaded provisions (on a proforma basis); and going forward, we expect a strengthened balance sheet and healthier asset-

quality book (compared to pre-COVID levels), which make it well placed for growth in FY2022E and FY2023E.

• The bank expects credit cost to normalise from Q4FY2021; collection efficiency has improved across most segments; restructuring book is expected to be at ~1.5%

of total by Q4FY2021 and is manageable.

• As a large part of the loan book is secured (98%) and collections are improving, we find the stock attractive as it has a long growth runway.

• AUSFB trades at 5.7x/4.6x its FY2022E/FY2023E ABPVS; We maintain Buy with a revised PT of Rs. 1,260.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/AUSmall-3R-Feb16_2021.pdf

Feb 17, 2021 Schaeffler India Limited Stock Update BUY 5,128 5,900

Summary

• We retain a Buy rating on Schaeffler India Limited (SIL) with a revised PT of Rs. 5,900, led by a strong outlook for its automotive and industrial businesses, and an

upgrade in earnings estimates.

• It was yet another strong quarter, beating our earnings estimates by 17%, led by robust revenue growth and better-than-expected rise in EBITDA margins.

• Given a robust outlook, we expect its earnings to grow at 38.6% CAGR from CY2020-22E, driven by a 21.4% revenue CAGR during CY2020-22E and a 240 bps

improvement in EBITDA margins.

• The stock trades below its historical average at P/E of 28.7x and EV/EBITDA of 16.4x its CY2022E estimates.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Schaeffler_3R-Feb17_2021.pdf

Feb 17, 2021 Finolex Cables Limited Stock Update BUY 387 475

Summary

• We retain Buy on Finolex cables with a revised PT of Rs. 475 considering its reasonable valuation and improving growth outlook.

• Steady quarter led by strong revenue growth better than estimates along with stable operating profit margins and PAT which remained in line with estimates.

• Expect better FY2022 as cables and wires sees improvement with rising infrastructure investments and scaling of its FMEG business with improving demand and

expect revenues to improve on better volumes.

• Finolex’s strong balance sheet and net cash position remains its salient features.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Finolex_3R-Feb17_2021.pdf

Feb 17, 2021 Repco Home Finance Limited Stock Update BUY 296 400

Summary

• Repco Home Finance Limited (RHFL) is an attractive HFC with a niche loan book (salaried and professional class borrowers), stable asset quality, strong ratings, and

good return ratios.

• With disbursements gaining pace the company seeing improved growth; Encouraging asset-quality performance with manageable gap between reported / proforma

GS3, with 97% collection efficiency (up from 93% September levels) and low restructuring.

• Available at reasonable 1.0x/0.9x its FY2022E/FY2023E ABVPS; a strong business model, stable ratings, and conservative underwriting with attractive return ratios

make RHFL attractive.

• We believe with economic recovery, demand along with resilient economy would brighten the growth outlook; hence, we have revised our target multiple. We maintain

our Buy rating with a PT of Rs. 400.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Repco_3R-Feb17_2021.pdf

Feb 17, 2021 IDFC Limited Viewpoint POSITIVE - 49 40-45% -

Summary

• We initiate viewpoint coverage on IDFC Ltd and expect an upside of 40-45%.

• Stock is available at a steep discount of ~59% to its subsidiaries’ value; discount is higher than most other listed holding companies, which makes it attractive and

offers investors a favourable risk-reward.

• Outlook is strong for subsidiaries; IDFC First has a 99% provision coverage on proforma GNPAs, is adequately capitalised and is seeing better collection efficiency.

IDFC AMC Quarterly average AUM grew 15% y-o-y and 5.9% q-o-q.

• There is possibility of IDFC Ltd getting reverse merged with IDFC First Bank, which will provide a room for upside, given that the holding company trades at a huge

discount.

Read report - https://www.sharekhan.com/MediaGalary/Equity/IDFC_3R-Feb17_2021_Viewpoint_NewIdea.pdf

Stock Update


EQUITY FUNDAMENTALS




Feb 18, 2021 Bajaj Auto Limited Stock Update BUY 4,106 4,589

Summary

• We maintain our Positive stance on Bajaj Auto Limited (BAL) with a Buy rating and revised PT of Rs. 4,589.

• BAL is expected to benefit from growth in the premium bikes segment, where BAL continues to gain market share, aided by premiumisation trend and new launches.

Moreover, we expect BAL to gain market share in exports, driven by its brand equity and enhanced distribution network in export destinations.

• Moreover, we expect BAL’s EBITDA margin to remain firm, given the benefits of operating leverage, product mix, and cost reductions achieved during 3FY2021.

• The stock trades at P/E multiple of 18.8x and EV/EBITDA multiple of 13.1x its FY2023E estimates.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Bajaj_Auto_3R-Feb18_2021.pdf

Feb 18, 2021 TVS Motor Company Limited Stock Update BUY 614 688

Summary

• TVS Motor (TVSM) would benefit from a sharp recovery in domestic two-wheeler demand in FY2022E, driven by strong rural sentiments and rising preference for

personal transport. Moreover, TVSM’s strong foothold in export markets is likely to keep overall sales robust.

• Q3FY2021 results witnessed all round strong operational performance.

• The stock trades at a P/E multiple of 24.4x and EV/EBITDA multiple of 13.0x its FY2023 estimates.

• We maintain a Buy rating on TVSM with a revised PT of Rs. 688, factoring improved demand in both domestic as well as exports.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/TVS_Motors_3R-Feb18_2021.pdf

Feb 18, 2021 GNA Axles Limited Stock Update BUY 416 490

Summary

• We maintain our Buy rating on GNA Axles Limited (GNA) with a revised PT of Rs. 490, factoring in better multiples on a strong traction in business outlook.

• GNA’s performance during Q3FY2021 was phenomenal, registering net earnings growth of 248.6% y-o-y, driven by 29% growth in sales and 628 bps expansion in

EBITDA margin at 17.4%.

• We expect GNA’s earnings to continue to grow strongly in the medium term, aided by CV and tractor industries.

• The stock trades attractively at P/E multiple of 11.5x and EV/EBITDA multiple of 5.4x its FY2023E estimates.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/GNA_Axle_3R-Feb18_2021.pdf

Feb 18, 2021 Cholamandalam Investment and Finance Company Stock Update BUY 528 580

Summary

• Cholamandalam Investment Finance Corporation (CIFC) saw moderate rise in stressed loans; and as the economy picks up and recoveries improve, we expect NIM

tailwinds and productivity improvement to drive earnings.

• CIFC’s well-contained stressed loan is due to its favourable business mix; CIFC has a balanced portfolio with exposure to small CV operators and rural business (less

impacted by the lockdown) and home equity segments, which were support factors.

• At the CMP, the stock is available at 4.9x/4.0x its FY2022E/FY2023E ABVPS, which is reasonable.

• We have revised our target multiples considering normalising growth and credit cost scenario; we maintain Buy with a revised PT of Rs. 580.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Cholamandalam-3R-Feb18_2021.pdf

Feb 18, 2021 LIC Housing Finance Stock Update BUY 476 610

Summary

• LIC Housing Finance (LICHF) is an attractive player in the housing mortgage market, with positives such as stable margins going ahead, pick-up in business growth

helped by low interest rates, stable property prices, rising affordability and the government’s push to drive demand for housing.

• Going forward, as corporate credit demand / capex reboot is expected to revive in FY22E, we believe will augur well for HFCs as they may see lower competition

from banks.

• Valuations reasonable at 1.2x/1x its FY2022E and FY2023E ABVPS; we finetune our target multiple considering the business strengths and fundamentals.

• We maintain a Buy rating on the stock with a revised PT of Rs. 610.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/LIC-3R-Feb18_2021.pdf

Stock Update


EQUITY FUNDAMENTALS




Feb 18, 2021 L&T Finance Holding Stock Update BUY 102 118

Summary

• L&T Finance Holdings (LTFH) saw liability-side-led NIM expansion and trend may continue in the near term.

• Moreover, with stressed loans well-provided for, and adequate capitalisation (successful rights issue helps) will be a positive trigger for growth. Asset quality improved,

GS-3 has reduced to 5.12% (down 7 bps q-o-q); with PCR at 64% (from 69% in Q2).

• Supportive regulatory environment, improving capex and corporate demand are positive triggers for LTFH, we are sanguine on long-term growth prospects.

• LTFH is available at 1.3x/1.2x its FY2022E/FY2023E ABVPS; Considering the improving outlook and challenges receding we have upgraded the recommendation to

Buy with a revised PT of Rs. 118.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/LnTFinance-3R-Feb18_2021.pdf

Feb 18, 2021 Vinati Organics Limited Stock Update BUY 1,460 1,750

Summary

• We expect Vinati Organics earnings cycle to gain momentum with volume ramp-up for ATBS/Butyl Phenol and sharp recovery in EBITDA margin with improvement in

revenue mix towards high-margin ATBS segment (from a low of 37% in 9MFY2021 versus 57% in FY2020).

• Our positive stance on ATBS demand (key input for oil industry) and margin recovery is underpinned by expectations of a 5.5-mbpd increase in oil demand in CY21

(as per IEA) and likely higher ATBS realisation (rising demand and increase in acrylonitrile prices).

• Overall, we expect a 33% revenue CAGR and 284bps margin expansion over FY21E-FY23E, which would drive strong 32% PAT CAGR over the same period. Vinati

Organics’ dominant market share in ATBS/IBB, debt-free status and solid RoE of 24% makes us constructive on the company.

• Improving near to medium-term earnings growth visibility and sustained long term high double-digit growth potential warrants higher valuation multiple for Vinati

Organics. Hence, we maintain Buy rating with revised PT of Rs. 1,750.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Vinati-3R-Feb18_2021.pdf

Feb 19, 2021 UltraTech Cement Limited Stock Update BUY 6,207 7,200

Summary

• We maintain Buy on UltraTech Cement (UltraTech) with a revised PT of Rs. 7,200.

• Expect healthy demand-led by pick up in non-trade demand along with sustained pricing discipline to benefit in Q4FY2021. Long-term structural demand intact.

• Impact of rise in pet coke and diesel prices to be partially felt in Q4FY2021 and fully in Q1FY2022. Higher rail transport to minimise the impact of diesel price rise.

• The company’s 19.5 mtpa expansion plan at a cost of Rs. 6,527 crore (without affecting de-leveraging plan) to ensure industry outperformance over the next four to

five years

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/UltraTech-3R-Feb19_2021.pdf

Feb 19, 2021 Shree Cement Stock Update BUY 27,500 31,610

Summary

• We retain our Buy rating on Shree Cement Limited (Shree Cement) with a revised PT of Rs. 31,610, as we expect it to report industry-leading growth led by rising

capacity utilisation.

• Shree Cement is expected to benefit from strong cement pricing environment in north and high cement demand in east.

• Expect to continue to report industry-leading volume growth, driven by its presence in key regional markets viz. north and east.

• Capacity expansion plans to reach 57 mtpa over three years and 80 mtpa over six-seven years would provide sustainable long-term growth.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/ShreeCement-3R-Feb19_2021.pdf

Feb 19, 2021 Gateway Distriparks Limited Stock Update BUY 174 210

Summary

• We retain Buy on Gateway Distriparks Limited (GDL) with a revised SOTP-based PT of Rs. 210, as we see further room for upside considering improving growth and

profitability outlook for its key verticals.

• Container volumes at ports and railways see growth momentum picking up during January 2021. Merchandise exports and imports trade show an improving trend.

• Strong volume growth outlook during FY2023 and FY2024 led by improving EXIM trade environment, commissioning of western DFC line, and phase II JNPT

expansion.

• Capex of Rs. 120 crore over the next two years for setting up two satellite rail terminals. Consolidated net debt reduced to Rs. 494 crore from Rs. 681 crore in FY2020.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Gateway-3R-Feb19_2021.pdf

Stock Update


EQUITY FUNDAMENTALS




Feb 19, 2021 Supreme Industries Limited Stock Update BUY 1,971 2,330

Summary

• We retain Buy on Supreme Industries Limited (SIL) with a revised PT of Rs. 2,330, led by positive medium-term outlook along with strong net earnings growth over

FY2021E-FY2023E.

• PVC prices continued their upward trajectory for Q4FY2021 till date, which may lead to elevated OPM for Q4FY2021.

• The company’s long-term growth levers in terms of demand generation from rural, tier III, tier IV economies along with demand generation from the affordable housing

segment remain intact.

• The company will focus on appointing distributors, addition of products, and deeper penetration. Capex of Rs. 400 crore has been earmarked for this year.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Supreme-3R-Feb19_2021.pdf

Feb 19, 2021 Arvind Limited Stock Update BUY 70 95

Summary

• Arvind’s Business recovered to 80% in the Q3 with garmenting and denim business recovering to 81% and 89% each; textile business’ margins recovered to FY2020

levels at 12.5%.

• The company managed to reduce debt by Rs. 300 crore in 9MFY2021; plans to reduce it further by Rs. 100 crore in Q4 on back of better cash flows.

• High demand in export markets for garmenting and denim products and a sequential recovery in domestic market would help Arvind to improve performance 12%

q-o-q in Q4; company aims for EBIDTA margins of 12%.

• The stock is currently trading at 9.2x its FY23E EPS and 4.3x its EV/EBIDTA. We maintain a Buy recommendation with a revised price target of Rs. 95.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Arvind-3R-Feb19_2021.pdf

Feb 22, 2021 Jubilant Foodworks Limited Stock Update BUY 3,126 3,380

Summary

• Jubilant Foodworks (JFL), through the recently-formed subsidiary in Netherlands, acquired a 32.8% stake in DP Eurasia NV, the exclusive franchisee of Domino’s Pizza

brand in Turkey, Russia, Azerbaijan and Georgia.

• JFL to pay Rs. 250 crore for 32.8% in DP Eurasia; deal valued at 0.5x its CY2020 sales of Rs. 1,635 crore; DP Eurasia operates the Domino’s brand in four countries

through 770 stores (Delivery to Dine-in mix 75:25).

• JFL’s domestic business hit pre-COVID levels in Q3; but recent rise in COVID cases remains a key risk to sales in the near term.

• New ventures such as entering into Chinese cuisine and Biryani segments and strategic stake buy augur well for long term; maintain Buy with revised PT of Rs. 3,380.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Jubilant-3R-Feb22_2021.pdf

Feb 22, 2021 Tata Motors Limited Stock Update BUY 304 365

Summary

• We maintain our Buy rating on Tata Motors (TAMO) with a revised PT of Rs. 365, factoring better outlook for the domestic businesses, robust FCF for the standalone

businesses, sharp fall in debt, and better earnings visibility.

• TAMO held an investor day conference, where management discussed about its product strategy, revenue drivers, and profitability expectations for commercial and

passenger vehicle businesses.

• We expect TAMO’s earnings to become positive in FY2022E and 33.1% in FY2023E, driven by a 15.3% revenue CAGR during FY2021E-FY2023E and a 140 bps

improvement in EBITDA margin.

• The stock trades at an attractive P/E multiple of 11.7x and EV/EBITDA multiple of 3.0x its FY2023E estimates.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/TataMotors-3R-Feb22_2021.pdf

Feb 22, 2021 Larsen & Toubro Stock Update BUY 1,452 1,795

Summary

• We maintain a Buy rating on Larsen and Toubro (L&T) with a revised PT of Rs. 1795 considering comfort on valuations and multi-segment growth opportunities in the

infrastructure sector.

• Key positive drivers with recent impetus from Budget on infrastructure, railways, defence and the National Infrastructure pipeline along with AtmaNirbhar Bharat would

sustain healthy business prospects ahead.

• Strong YTD order inflows during and healthy order pipeline to keep momentum going for FY2021 (remainder) and FY2022.

• Collections are expected to be normal due to front-loading of borrowings by central and state governments going ahead. Working capital levels are also expected to

stay stable y-o-y basis in absolute terms in FY2021.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/LnT-3R-Feb22_2021.pdf

Stock Update


EQUITY FUNDAMENTALS




Feb 22, 2021 Cummins India Limited Stock Update BUY 766 917

Summary

• We retain Buy on Cummins India Limited (Cummins) with a revised PT of Rs. 917, considering strong earnings growth potential, led by domestic economic revival.

• Domestic sales on a gradual recovery path as seen from macro indicators, signaling strong recovery in business activities.

• Exports to benefit from improved demand from data centre, 5G rollout, and China+1 strategy.

• Well placed to take advantage given its preparedness on the technology front and market leadership position along with newer technologies such as CPCB 1V norms

can lead to further market share gains.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Cummins-3R-Feb22_2021.pdf

Feb 22, 2021 Carborundum Universal Limited Stock Update BUY 508 611

Summary

• We retain Buy on Carborundum Universal Limited (CUMI) with a revised PT of Rs. 611, considering its healthy earnings growth profile.

• CUMI, with its diversified user industries, is expected to gain traction, led by improvement in economic recovery, government-push spurring manufacturing activity,

and automotive recovery with additional thrust from PLI schemes and auto scrappage policy.

• Improving overseas operations aided by capacity expansion, success of new products, and being an alternative global supplier are likely to aid exports growth.

• Strong balance sheet, healthy return ratios, and consistent dividend paying record are key salient features.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Carborundum-3R-Feb22_2021.pdf

Feb 22, 2021 KEC International Stock Update BUY 412 505

Summary

• We retain a Buy on KEC International Limited (KEC) with a revised PT of Rs. 505, considering its improving operations.

• A pick-up in execution would ensure better performance in FY2022 along with Rs. 30,000 crore bidding pipeline offer visibility for remainder of FY21 and FY22.

• The management expects to double the revenue over next four- five years as civil and railway revenues to provide next leg of growth while T&D largely dominated

by international(SAE) to pick up as things improve followed by domestic T&D with recent order wins in green energy.

• YTD order inflows of ~Rs 8500 as on date crore along with order book and L1 positon of ~ Rs 26000 crore remains strong.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/KEC-3R-Feb22_2021.pdf

Feb 23, 2021 Sanofi India Stock Update BUY 7,973 9,249

Summary

• Sanofi India (Sanofi) reported a weak performance for the quarter with results missing estimates, though numbers are not comparable with previous quarters.

• Strong performance of top 10 brands which have dominant share in their respective segments augurs well and provides visibility on growth ahead.

• Sanofi has recommended dividend per share of Rs. 365 for CY2020, which translates into healthy dividend yield of ~4.5%.

• Better growth prospects, strong balance sheet with no debt, minimal capex, and healthy cash position are the key positives. We retain Buy with an unchanged PT of

Rs. 9,249.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Sanofi-3R-Feb23_2021.pdf

Feb 23, 2021 Amber Enterprises Limited Stock Update BUY 3,094 3,716

Summary

• We retain a Buy on Amber Enterprises (Amber) with a revised PT of Rs. 3,716, given multiple growth drivers that brighten net earnings growth outlook over FY2021E-

FY2023E.

• The company remains one of the key beneficiaries of import ban on ACs with refrigerants and the likely expansion of PLI schemes for ACs and components.

• Capacity expansion through a greenfield project with projected capacity of 1 million units (likely to be operational by Q4FY22) should improve business.

• Component exports would begin in FY2022, while those of RACs from CY2022. It is set to build 18-20 commercial refrigeration products over 2-3 years. Order backlog

is strong across products.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Amber-3R-Feb23_2021.pdf

Stock Update


EQUITY FUNDAMENTALS




Feb 24, 2021 The Ramco Cements Limited Stock Update BUY 966 1150

Summary

• We maintain Buy on The Ramco Cements (Ramco) with a revised PT of Rs. 1150.

• Ramco is expected to benefit from the push of the Kerala and Tamil Nadu state governments towards infrastructure and housing sectors as highlighted in their

respective state budget 2021-22.

• Cement prices in Southern region maintain healthy pricing discipline during January-February 2021 which may led to healthy operational performance in Q4.

• Its ongoing expansion plans provide ample room to capture future growth potential. The company’s balance sheet is expected to remain strong despite its aggressive

expansion plans.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/RamcoCement-3R-Feb24_2021.pdf

Feb 24, 2021 Greaves Cotton Limited Stock Update BUY 121 150

Summary

• We remain positive on Greaves Cotton Limited (Greaves) given its timely thrust on the e-mobility business. We have raised our earnings estimates and target valuation

multiple, owing to better business outlook and valuation re-rating of e-mobility sector. We maintain our Buy rating on the stock with revised PT of Rs 150.

• Greaves is positioned well to benefit from the Government’s push towards fast adoption of Electric Vehicles (EVs) in automobile industry.

• We expect Greaves’ earnings to grow robust 70.3% CAGR during FY2021E-FY2023E, driven by 22% revenue CAGR and a 510 bps improvement in EBITDA margin.

• The stock is trading below its average historical multiple at P/E multiple of 16.9x and EV/EBITDA multiple of 9.7x its FY2023E estimates.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/GreavesCotton-3R-Feb24_2021.pdf

Feb 25, 2021 Britannia Industries Stock Update BUY 3,407 4,200

Summary

• Britannia Industries’ (Britannia’s) underperformance versus broader indices (13% absolute return vs. Nifty return of 34% and Nifty consumption of 26%) in the past one

year; leadership position in biscuits category and steady earning visibility make it a better pick in the consumer goods space.

• Market share gains in biscuits category, strong growth in Hindi-speaking belt, product innovation and a wider distribution network will be key growth drivers in the

near to medium term. Strong traction in adjacencies will add to overall revenue growth in near future.

• Focus on cost-savings helped OPM improve to 16% in FY2020 from 9% in FY2014; going ahead efficiencies, cost saving measures and premiumisation would help

OPM to improve to ~20% by FY2023E.

• Stock trades at 35x its FY2023E EPS, at a discount to some large consumer goods stocks. Current underperformance provides good entry point; we recommend Buy

with an unchanged price target of Rs. 4,200.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Britannia-3R-Feb25_2021.pdf

Feb 25, 2021 Tata Consumer Products Limited Stock Update BUY 628 740

Summary

• We maintain a Buy on Tata Consumer Products (TCPL) with a revised PT of Rs. 740. Inclusion in the Nifty50 and strong earning visibility make it at preferred pick in

the consumer goods space.

• Market share gains in branded tea and staples space, scale-up of new ventures and foray into new categories through new launches remain near-term growth catalysts.

• Synergistic benefits from integration of Tata Chemicals’ consumer business will sustain OPM at 14.5-15% in FY2022/23. Sustained correction in the tea prices (corrected

by ~40% from its peak) might further provide upside to our earnings estimates.

• We revenues and PAT to grow at CAGR of 13% and 23% over FY2020-23.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/TCPL-3R-Feb25_2021.pdf

Feb 25, 2021 Max Financial Services Stock Update BUY 889 1,100

Summary

• The much-awaited IRDAI approval to the Max Financial Services (MFS) - Axis Bank deal is positive; removes the regulatory overhang on the transaction.

• Max Life Insurance (MLI) has evolved over the years (has best-in-class VNB margins, high ROEVs, diversified product portfolio, reduced dependency on PAR business

etc.) and is an attractive player with strong capabilities.

• We see operating leverage benefits kicking in going ahead, as improving business mix would support VNB margins; we believe the Indian insurance market has

attractive growth opportunities.

• Valuations are reasonable at 2.3x/2.0x its FY2022E/FY2023E EVPS; deal closure may provide further re-rating boost. We maintain our Buy rating with a revised PT of Rs. 1,100.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Max-3R-Feb25_2021.pdf

Stock Update


EQUITY FUNDAMENTALS




Feb 26, 2021 Nestle India Limited Stock Update BUY 16,098 19,055

Summary

• Nestle India (Nestle) maintained its thrust on achieving double-digit revenue growth by penetrating deep in rural markets (covered 89,288 villages), innovation (that

contributes 4.3% of sales) and accelerating footprint through new channels.

• Revenues grew by 8.1%y-o-y in CY2020, driven by a 5.7% volume growth. Barring Q2, volume growth stood at 7-8% (value growth was at 10-11%) in all other quarters.

• OPM stood at 24% in CY2020. Though input prices are rising, efficient procurement and Project Shark are expected to keep OPM high y-o-y.

• The stock has corrected by ~15% from highs and is trading at 53x its CY2022E EPS. Strong return profile, growth prospects and cheery dividend payout make Nestle

a good pick. We maintain Buy with unchanged PT of Rs. 19,055.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Nestle_3R-Feb26_2021.pdf

Feb 26, 2021 Tata Motors Limited Stock Update BUY 323 365

Summary

• We maintain our Buy rating on Tata Motors (TAMO) with a PT of Rs. 365. The stock trades at an attractive P/E multiple of 12.4x and EV/EBITDA multiple of 3.1x its FY2023E.

• Jaguar Land Rover Automotive PLC (JLR) held an investor day to discuss its renewed global strategy for electrification of Jaguar and Land Rover brands and related

reduction in fixed costs and the company’s focus on profits over volumes.

• The management has given positive guidance for its JLR business, expecting positive cashflow by FY23, net debt to be zero by FY24, and EBIT margins greater than

10% by FY26. Also, JLR would write off GBP 1.5bn in Q4FY21 related to prior investments and cash restructuring.

• We expect all-round improvement in the company’s business and expect TAMO’s earnings to become positive in FY2022E and 33.1% in FY2023E, driven by a 15.3%

revenue CAGR during FY2021E-FY2023E and a 140 bps improvement in EBITDA margin.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/TataMotors-3R-Feb26_2021.pdf

Feb 26, 2021 Inox Leisure Limited Stock Update BUY 307 400

Summary

• We maintain Buy on Inox Leisure Limited (Inox) with an unchanged price target (PT) of Rs. 400, given encouraging content pipeline and anticipated benefit from the

closure of single screens.

• Management remains confident that impactful movie content would pull audiences back to cinemas. The box-office success of Master amid COVID-19 has provided

the hope among film producers to release big-ticket movies.

• Selected big-budgeted movies being released in next 2-3 months will have higher distributor revenue shares and lower window period restriction to release in OTT

platforms. At least two big-starrer movies are being released in coming month of 2021.

• Though near-term challenges are likely to persist amid COVID-19, we do not see any material structural impact including change in consumer behavior from COVID-19.

Hence, we model strong recovery in FY2022E.

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Inox-3R-Feb26_2021.pdf


EQUITY FUNDAMENTALSSECTOR UPDATE


Date Sector Report TypeSector View

Latest Chg

Feb 02, 2021 Automobiles Sector Update Positive

Summary

• Automobile companies continued to gain sales momentum in January, driven by robust growth in tractor sales, recovery in commercial vehicles (CV), and buoyant

demand in passenger vehicle (PV) sales and two-wheeler (2W) exports.

• CV volumes continue to show strong q-o-q recovery driven by a robust increase in infrastructure, mining and e-Commerce activities in the country.

• After two consecutive years of a decline, we expect a strong recovery from FY22E, expecting a strong bounce-back in automobile sales volumes aided by strong rural

sentiments and improved economic activities in the country.

• Preferred Picks - Hero MotoCorp, Bajaj Auto, M&M, Balkrishna Industries, Mayur Uniquoters, Bosch and Schaeffler, Suprajit Engineering.

Read report - https://www.sharekhan.com/MediaGalary/Equity/Auto-Feb02_2021.pdf

Feb 08, 2021 Life Insurance Sector Update Positive

Summary

• January 2021 provisional figures for the life insurance industry came in fairly strong for most listed private players, a continuation from the performance seen in

December.

• Private players registered robust rise of 15% y-o-y in NBP in January 2021, much better than the overall industry’s performance, which saw a decline of 1.2% in NBP;

LIC saw a decline of 4.9% in NBP for January 2021. HDFC Life and ICICI Prudential Life saw strong growth in January, while BALIC saw modest growth.

• We see life insurance as an attractive long-term bet with a long runway for growth, supported by India’s demographics and underpenetrated/underinsured Indian

insurance market.

• Preferred picks - Bajaj Finserv (holding company of Bajaj Allianz Life), HDFC Life, ICICI Prudential, and Max Financial.

Read report - https://www.sharekhan.com/MediaGalary/Equity/LifeInsurance-Feb08_2021.pdf

Feb 16, 2021 Q3FY2021 Banking Results Review Sector Update Positive

Summary

• Q3FY2021 was encouraging; most banks reported a better outlook on growth and asset quality. We remain positive on private sector banks, and turn Neutral on PSU

banks from our cautious stance earlier.

• Most private banks reported a well-contained restructuring book; sequential improvement in credit growth and NIM expansion. More importantly, the management

commentary for most private banks is positive on asset quality and aggressive provisioning has boosted the provision coverage ratio.

• PSU banks reported a relatively higher restructured book (but a largely manageable range) except State Bank of India. PSBs would need capital infusions to support

credit growth and management commentary was mixed across banks.

• Preferred Picks:

• Private Banks: ICICI Bank, IndusInd Bank, Axis Bank, Kotak Mahindra Bank, AU Small Finance Bank

• PSU Banks: SBI

Read report - https://www.sharekhan.com/MediaGalary/Equity/Q3FY2021_BankingResultsReview-Feb16_2021.pdf

Feb 17, 2021 Q3FY2021 Consumer Goods Results Review Sector Update Positive

Summary

• Sales recovery of discretionary categories, better traction to new launches, sustained high rural demand, and improving urban demand resulted in higher revenue

growth for most companies at 6%-25% in Q3FY2021.

• Though few players saw higher input prices affecting gross margins, lower ad spend and cost saving measures aided in arresting the sharp decline in OPM; Food and

paint companies continued to benefit from benign input prices, resulting in 111-450 bps improvement in OPM.

• Sales recovery of out-of-home consumption products, strong traction to new launches, consumer shifting to branded products, and improving penetration of health

and hygiene products remain key growth drivers in the near term.

• Preferred picks - Asian Paints, Hindustan Unilever, ITC, Tata Consumer Products, and Dabur India.

Read report - https://www.sharekhan.com/MediaGalary/Equity/Q3FY2021_ConsumerGoods_Results_Review-Feb17_2021.pdf\

� Upgrade � No change � Downgrade

� Note: The arrow indicates change in call and price target, if any, vis-à-vis the previous report

EQUITY FUNDAMENTALS SECTOR UPDATE



Latest Chg

Feb 17, 2021 Q3FY2021 IT Results Review Sector Update Positive

Summary

• Q3FY21 revenue growth for the sector was robust amid strong demand, ramp-up of deals, spends to catch up with technological changes & recovery in troubled

verticals.

• EBIT margin remained in-line/higher-than-expectations across the board; margins improved sequentially, led by lower travel expenses, higher offshoring, lower

subcontractor costs and operating leverage.

• Expect strong growth for Indian IT players in FY2022/FY2023 led by higher spends on digital transformation and increased outsourcing. Margins are likely to move

in a narrow band in the coming years, aided by WFH efficiencies, higher offshoring and a stable pricing environment.

• We stay Positive view on the sector; Preferred picks: Infosys, HCL Tech, Tech Mahindra, TCS, L&T Tech, L&T Infotech, Mastek, Persistent Systems, and Birlasoft.

Read report - https://www.sharekhan.com/MediaGalary/Equity/Q3FY2021_IT_Results_Review-Feb17_2021.pdf

Feb 17, 2021 Q3FY2021 Oil & Gas Results Review Sector Update Positive

Summary

• In Q3FY21, CGD companies performed better than expected as margins sharply beat estimates and volume made a smart recovery. Gujarat Gas’ volume growth of

23% y-o-y surprised positively and led to sharp earnings upgrades.

• OMCs’ earnings were boosted by inventory gains of Rs. 4,724 crore, more than 100% refinery utilisation and q-o-q volume growth. However, upstream PSUs witnessed

a y-o-y EBITDA decline given weak oil & gas price and high opex.

• Underperformance of CGD players (ex-Gujarat Gas) would reverse given expectation of earnings outperformance led by sustained high-volume growth during FY22-

FY23. OMCs’ core earnings would improve led by cyclical recovery in GRMs.

• Preferred picks - Reliance Industries, Mahanagar Gas, Gujarat Gas, IGL, Petronet LNG and GSPL.

Read report - https://www.sharekhan.com/MediaGalary/Equity/Q3FY2021_Oil_Gas_Results_Review-Feb17_2021.pdf

Feb 18, 2021 Q3FY2021 Automobiles Results Review Sector Update Positive

Summary

• A shift towards digitalisation, controlling of administrative costs, focus on core business, expansion of business through product innovations were the key factors that

resulted into superior results.

• Q3FY21 was a strong comeback after a clean washout in Q1FY21.

• We expect growth momentum to continue driven by pent-up demand, preference for personal mobility and faster-than-expected recovery in infrastructure, mining

and other economic activities.

• Preferred Picks: Hero MotoCorp, Bajaj Auto, TVS Motor, Maruti Suzuki, M&M, Bosch, Schaeffler India.

Read report - https://www.sharekhan.com/MediaGalary/Equity/Q3FY2021_Auto_ResultsReview-Feb18_2021.pdf

Feb 18, 2021 Q3FY2021 Pharmaceuticals Results Review Sector Update Positive

Summary

• Q3FY2021 was yet another quarter of impressive performance for the pharmaceutical players.

• Topline growth was strong driven by sturdy revival in India operations; domestically, companies with a higher share of chronic business grew strongly and outperformed

the industry. The US business of companies improved though growth was slower attributable to weak flu season.

• Rise in USFDA product approvals, stabilising of pricing pressures, strong growth prospects in the domestic markets and emerging opportunities in API space are key

growth drivers.

• Preferred Picks: Aurobindo, Cipla, Divis Laboratories, Laurus Labs, Granules, Sanofi India, Abbott India, Strides Pharma Science, Solara Active Pharma Sciences.

Read report - https://www.sharekhan.com/MediaGalary/Equity/Q3FY2021_Pharmaceuticals_ResultsReview-Feb18_2021.pdf

EQUITY FUNDAMENTALSSECTOR UPDATE



Latest Chg

Feb 18, 2021 Q3FY2021 Financial Services Results Review Sector Update Positive

Summary

• Q3FY2021 was a strong quarter, where most financial services companies reported a better outlook on growth and asset quality.

• Helped by a fall in cost of funds, incremental normalising of disbursement, regulatory and government support (such as ECLGS scheme) supported margins; Most

NBFCs though continued to shore up their provisioning buffers even though the credit costs were lower than expectations; AMCs saw a potential bottoming out of

AUM de-growth, and we expect larger players to gain market share going forward.

• Management commentary was more positive (in terms of growth and NPAs); we retain a preference for well capitalised / high-rated NBFCs and large AMCs. NBFCs

were under weather even since pre-Covid days (due to events like ILFS default, liquidity issues, etc) and hence we see a scope for earnings revival and re-rating for

the sector.

• Preferred Picks: Cholamandalam Investment Finance, Repco Home, LIC Housing.

Read report - https://www.sharekhan.com/MediaGalary/Equity/Q3FY2021_Financial_Services_ResultsReview-Feb18_2021.pdf

Feb 18, 2021 Q3FY2021 Agri Inputs and Speciality Chemicals Results Review Sector Update Positive

Summary

• Mixed Q3 for the agri input sector with strong growth in domestic market and uneven growth in overseas business. Margin expansion led by higher gross margins.

PI Industries/Coromandel outperformed.

• Specialty chemical surprised positively with beat on revenue growth/margins and most companies witnessed earnings upgrades, especially Aarti Industries and

Sudarshan Chemical.

• Favourable agronomics, government support, and shift towards branded products to drive market share gain for large agri-input players. Higher exports and import

substitution present strong opportunity for specialty chemical. Strong earnings outlook to aid re-rating of quality names (PI Industries and SRF).

• Preferred Picks: Coromandel International, PI Industries, SRF, Atul Limited and Sudarshan Chemical.

Read report - https://www.sharekhan.com/MediaGalary/Equity/Q3FY2021_Agri_ResultsReview-Feb18_2021.pdf

Feb 19, 2021 Q3FY2021 Infrastructure/Cement/Logistics/Building material Results Review Sector Update Positive

Summary

• For Q3FY2021, the cement sector reported operational outperformance led by strong demand, higher realisations and lower other expenses.

• Infrastructure players reported mixed numbers, where while KNR outperformed, Ashoka Buildcon lagged estimates, while Sadbhav Engineering and PNC Infratech

met expectations.

• Logistics companies benefitted from an uptick in revenues, which led to better absorption of fixed costs, driving up operating margins and net profitability.

• Preferred picks - UltraTech, Shree Cement, The Ramco Cements, JK Lakshmi Cement, KNR Construction, PNC Infratech, TCI Express, Pidilite Industries, Greenlam

Industries and Supreme Industries.

Read report - https://www.sharekhan.com/MediaGalary/Equity/Q3FY2021_Infra_Cement_ResultsReview-Feb19_2021.pdf

Feb 19, 2021 Q3FY2021 Consumer Discretionary Results Review Sector Update Positive

Summary

• Improved footfalls in the festive season and higher e-Commerce sales helped the business recovering to 75-80% of pre-COVID levels for branded apparel & retail

companies

• Profitability of retail, hotel and textile companies improved q-o-q led by cost-saving initiatives and better operating leverage due to higher sales volume.

• Receding scare of COVID-19, improved domestic mobility and pent-up demand would help retailers and hoteliers post better performance in the coming quarters;

higher export sales will boost performance of textile companies.

• Preferred picks: Titan, Trent, Relaxo Footwear, KPR Mill, Aditya Birla Fashion & Retail and Jubilant foodworks.

Read report - https://www.sharekhan.com/MediaGalary/Equity/Q3FY2021_ConsumerDisc_ResultsReview-Feb19_2021.pdf

Feb 19, 2021 Q3FY2021 Insurance Results Review Sector Update Positive

Summary

• Private life insurers have recovered well from the COVID-19 pandemic and clocked growth in APE and VNB margins.

• Private non-life Insurers saw a mixed bag Q3; with subdued topline growth but claims on health and motor side were also lower amid the pandemic, as they were

subdued due to the pandemic. A pick-up in auto sales and health business augurs well.

• We believe insurance is an attractive long-term bet with a long runway for growth, supported by India’s demographics and underpenetrated/underinsured Indian

insurance market.

• Preferred Picks: Max Financial, HDFC Life, ICICI Lombard.

Read report - https://www.sharekhan.com/MediaGalary/Equity/Q3FY2021_Insurance_ResultsReview-Feb19_2021.pdf

EQUITY FUNDAMENTALS SECTOR UPDATE



Latest Chg

Feb 22, 2021 Sector Update - Q3FY2021 Capital Goods Results Review Sector Update Positive

Summary

• Project-based companies reported improvement inexecutionas well as cost rationalisation that helped OPM beat estimates. Order inflows rose sharply led by L&T

and BEL, while overall order book stays healthy

• Consumer goods/electricals-based companies saw net profit rise on the back of strong revenue growth (better-than-estimates) led by strong demand recovery and

flat OPM (in line with estimates)

• We expect order tendering and demand recovery to improve across regions for consumer durables/electricals companies. Companies would stay focused on

maintaining liquidity, reducing debt and containing working capital requirements.

• Among project-based companies, we prefer L&T, Bharat Electronics, Honeywell Automation India, Carborundum Universal, Cummins India, KEC while in the consumer

durables space, we prefer Polycab, Dixon Technologies, Amber Enterprises and KEI Industries.

Read report - https://www.sharekhan.com/MediaGalary/Equity/Q3FY2021_CapitalGoods_ResultsReview-Feb22_2021.pdf

Feb 25, 2021 Automobiles Sector Update Positive

Summary

• Tractors and commercial vehicles are expected to deliver strong sales volume in February 2020, except the bus and three-wheeler segments. Structural demand

drivers for two-wheelers and passenger vehicles remain largely intact.

• Interactions with dealers suggest supply issues in select models of passenger vehicles due to shortage of semi-conductors. Domestic two-wheelers are likely to

moderate growth in entry-level bikes, while growth remains strong in 125cc+ bikes. Export sales continue to drive OEM growth.

• We remain positive on structural demand for automobiles in the medium term. We expect strong recovery in FY2022E across the segment, led by rural, semi-urban,

and urban demand along with favourable macro outlook.

• Preferred Picks - Hero MotoCorp, Bajaj Auto, TVS Motor, Maruti Suzuki, M&M, Ashok Leyland, Mayur Uniquoters, Bosch, Schaeffler India, and Suprajit Engineering.

Read report - https://www.sharekhan.com/MediaGalary/Equity/Automobile-Feb25_2021.pdf


TREND & VIEW


EQUITY TECHNICALS

Bullish stance

Daily view

The index faced resistance near the upper channel line in mid-February

Thereon, it tumbled down towards the lower end of the channel

Near the lower channel line, the junction of 40-DEMA and the daily lower Bollinger Band offered additional support

The index formed an Inside bar there and started moving higher

It has crossed a falling trendline & has formed a base above it

Structurally, the Nifty looks set for the next move up

Short-term support is at 14800 whereas short term resistance is 15273

The rally that started from the key weekly moving averages in September is continuing on the upside

The index is forming higher top higher bottom on the weekly chart, which is a positive sign

In mid-February, the index formed a bearish outside bar on the weekly chart & entered a consolidation phase

The consolidation is healthy for the larger uptrend

Once the consolidation is completed, the Nifty is expected to head towards the upper channel line

After a strong rally in November and December, the index had a short-term correction in January

It posted a negative monthly close for January

However, with the start of February, the Nifty has crossed the January high of 14753

Structurally, the index is forming extension on the upside, which suggests that the index has room to head higher

The monthly momentum indicator is in line with the rally

The short-term consolidation is an opportunity for positional traders to align themselves with the larger uptrend

Weekly view

Monthly view

Medium Term Trend

Index Target Trend ReversalSupport /

Resistance

Nifty 16400 á 14300 14300 / 16400

MONTHLY VIEW


EQUITY DERIVATIVES

Huge short additions in index can trigger sellingAfter a roller-coaster ride in the January series, the February series was a one-way journey north. The index touched a lifetime high in the spot market, at 15431, registering a month-on-month gain of ~9%. Open interest rose slightly by ~1% on a series-on-series basis, indicating that along with short covering some longs were also seen in the index. Rollover in the Nifty was decent and in-line at 78.25% versus the three-month average of 77.30% with a rollover cost of 72 points, which was quite huge, indicating a clear long rollover in the next series. On the other hand, the Bank Nifty also saw a spectacular run-up of 20% on an expiry-to-expiry basis and touched a lifetime high of 37708 levels. Open interest went down by 21%, indicating short covering in the index. Rollover in the Bank Nifty was pretty much in line at 77.76% versus the three-month average of 77.34% with a huge rollover cost of 171 points, indicating a long rollover in the next series.

Currently so far in the March series, we have seen a huge addition in the Nifty and Bank Nifty. The Nifty added 29% with prices falling by 1%, while the Bank Nifty saw an addition of 49% with prices dropping 4%. This indicates that majority of the addition is on the shorter side.

FII action in cash market was on the positive side in the February series as they continue to be net buyers in the cash market to the tune of Rs. 42,044 crore due to some big block deals. At the start of the March series, FII flows have been muted and so far, they are net buyers to the tune of only Rs.3,500 crore. On the Derivative front they have been reducing some of their longs, they are net long in index futures with around 27,538 contracts and the long short ratio stands at 1.52.

View for March series:

On the options front, the deep on-the-money (OTM) 14000 strike put option is highest in open interest with 48,384 contracts followed by 14500 PE with 34,851 contracts. On the call side, the 16000 CE is highest in terms of open interest with 33,868 contracts followed by 15500 strike with 24,864 contracts.

The current put-call ratio (PCR) is at 1.11. On the other hand, the volatility index after seeing a huge spike till 29% in the beginning of March series it started to cool off and is currently at around 22.89%. Seeing the above data, and with such huge addition in open interest in both the Nifty and Bank Nifty which we feel is on the shorter side, it is a sell-on-rise scenario with a stop loss of 15500 and a target of 14500-14300 in the coming trading sessions.

Rollover highlights:

Nifty Futures began the March series with an open interest at 1.05 crore shares versus 1.02 crore shares in open interest.

March series started with Rs.134,900 crore versus Rs. 117,616 crore in stock futures, Rs. 15,854 crore versus Rs. 14,138 crore in Nifty futures & Rs. 182,495 crore versus Rs. 136,148 crore in index options and Rs.46,104 crore versus 35,623 crore in stock options.

MARKET WIDE VS NIFTY ROLLOVER ACTIVITY:

OPTIONSOPEN INTEREST

(Rs. Cr)

SBIN 5,650.54

RELIANCE 4,983.50

BHARTIARTL 4,175.88

TATAMOTORS 3,835.20

ITC 3,364.60

Top five stock options with the highest open interest in the current series are:

Source: Sharekhan

FUTURESOPEN INTEREST

(Rs. Cr)

RELIANCE 6,027.36

ICICIBANK 6,001.64

BHARTIARTL 5,815.02

HDFC 4,512.84

ADANIPORTS 4,392.47

Top five stock futures with the highest open interest in the current series are:

Source: Sharekhan

Nifty March month rollover is at 78.25% versus 77.28%.

Bank Nifty March month rollover is at 77.76% versus 74.55%

Market-wide rollover is at 91.71% versus 91.23%.

77.7

6%

77.2

8%

75.9

4%

78.6

8%

77.4

5%

70.6

3%91.7

1%

91.2

3%

91.7

4%

93.1

9%

92.8

5%

92.5

1%

78.2

5%

74.5

5%

78.1

3%

79.3

5%

73.5

9%

79.0

5%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

90.00%

100.00%

Mar

Feb

Jan

Dec

Nov Oct

Nifty Market Wide Banknifty

CURRENCY TECHNICALSTREND & VIEW


USD-INR: Average to the rescue

USD-INR witnessed a sharp rebound during February and closed near the month’s highs after three consecutive months of negative gains.

On the monthly charts, we can observe that the pair has found buying interest at the 20 month moving average (72.78) which is likely to act as a strong support going ahead.

The Monthly momentum indicator has a triggered a negative crossover which is a sign of concern. However, prices have shown strength at the crucial support zone indicates buying interest.

We believe that the pair is likely to hold on to the support juncture and trade with a positive bias during the month and target levels of 75.18 which is the 61.82% Fibonacci retracement level of the fall from 76.98 to 72.26. Beyond that it has potential to stretch higher till 76.98 which is the previous swing high. Reversal of the bullish stance is placed at a close below 71.00.

EUR-INR: Rangebound moves

During February, EURINR witnessed a sharp pullback from intra-month lows to close on a positive note around the highs for the month.

Broadly the pair has been trading in the range 89.50 – 85.50 since past seven months after the sharp run up it witnessed during the first half of the last calendar year.

The Higher Top Higher Bottom formation is intact on the monthly timeframe which indicates uptrend. Also the monthly momentum indicator has a positive crossover which is a Bullish sign. The Bollinger bands have begun to contract which points towards range bound action during the month.

We expect the pair to consolidate in the range (89.60 – 86.30) during the month. Overall trend remains bullish for targets of 92.00 which is the previous swing high beyond that it can stretch higher till 95.00. Reversal of the Bullish stance is placed at a close below 83.80.

GBPINR: Approaching crucial hurdles

In February, GBPINR traded with a positive bias and closed near the highs for the month. In this process it has also achieved our initial target of 101.00.

The pair has witnessed continued buying interest after it broke out from the six month consolidation range (99.30-93.30) on the upside.

The positive crossover on the monthly momentum indicator is providing further momentum as the price begins to show strength.

We expect the pair to trade with a positive bias during the month and target levels of 105.29-107.00, which are the previous two wing highs. Reversal of the bullish stance is placed at a close below 98.00.

JPY-INR: A breakdown

In February, JPYINR saw continuation of selling pressure from January and the pair closed in the red for the second consecutive month.

During the first week of March the pair has witnessed a breakdown of the 11-month trading range (72.00 – 68.80) which results in to weakening of the price structure.

The monthly momentum indicator has a negative crossover which adds to the weakness and provides momentum on the downside. Thus both price and momentum indicators are pointing towards further weakness in prices.

Thus, considering the above factors we change our outlook on the pair to negative and expect it to target levels of 64.20-63.80 zone. Reversal of the bearish stance is placed at a close above 70.00.

Currency View Reversal Supports Resistances Target

USD-INR UP 71.00 72.60 / 72.26 73.96 / 75.18 76.98

EUR-INR UP 83.80 86.30 / 85.50 87.20 / 88.50 95.00

GBP-INR UP 98.00 99.31 / 98.90 105.29 / 106.00 107.00

JYP-INR Down 70.00 66.10 / 65.00 68.20 / 69.30 63.80

PMS DESK PMS FUNDS


STAR MODEL PORTFOLIO

OVERVIEW

STAR Model Portfolio is non-discretionary product.

A well balanced multi-cap portfolio for long term wealth creation.

STAR aims to outperform the BSE 200 through superior selection of well-researched companies to create a high-quality portfolio.

INVESTMENT STRATEGY

� Disciplined investment decision are taken in companies having market cap over the Rs. 5,000 crore from Sharekhan Fundamental Research universe.

� The product seeks to achieve outperformance through superior selection of well researched, quality companies to build a well-balanced, diversified portfolio.

� It is a moderate-risk, moderate -churn portfolio with sector Exposure 30% max exposure/ three stocks from preferred sectors.

� Investments are equally divided into ten stocks with 10% allocation in each stock

PRICING & PRODUCT FEATURES

� Minimum investment of Rs. 5 lakh

� Charges

¾ 0.5% brokerage on every trade executed.

¾ No annual maintenance charge

¾ No Profit sharing & no lock-in period for investments.

STAR Model Portfolio Performance(as on February 2021)

Duration STAR Model Portfolio*

BSE 200

1 Month 5.9% 7.3%

3 Months 11.3% 13.4%

6 Months 23.4% 29.3%

1 Year 25.6% 31.7%

2 Year 16.8% 16.7%

Note : Returns taken from Miles System based on TWRR method; 2 year and above returns are CAGR basis

Top 5 Outperforming clients

Client Inception Date

STAR Model Portfolio Returns

BSE 200

Returns

Client 1 29-06-2018 87.5% 34.9%

Client 2 16-10-2018 76.4% 37.8%

Client 3 09-10-2018 76.1% 42.6%

Client 4 09-07-2018 65.9% 33.2%

Client 5 03-01-2019 68.2% 36.0%

Note : Top 5 outperformer client Vs benchmark

5.9%

11.3%

23.4%25.6%

16.8%

7.3%

13.4%

29.3%

31.7%

16.7%

1 Month 3 Month 6 Month 1 Year 2 Year

STAR Model Portfolio BSE 200

PMS DESKPMS FUNDS


Power Model Portfolio

OVERVIEW

Power Model Portfolio is non-discretionary product. Its a long-only, balanced and concentrated portfolio.

It comprises the 10 best large-cap stocks of the day for long-term wealth creation.

Power Model Portfolio aims to outperform the CNX Nifty 50, with relatively lower volatility in the portfolio and moderate churn.

INVESTMENT STRATEGY

� The product seeks to outperform through superior selection of well researched, quality companies to build a well-balanced, diversified portfolio.

� It is a moderate-risk, moderate-churn portfolio with a maximum sector exposure of 30% each in in a maximum of three stocks.

� Investments are equally divided into ten stocks with 10% allocation to each stock

PRICING & PRODUCT FEATURES

� Minimum investment of Rs. 5 lakh

� Charges

¾ 0.5% brokerage.

¾ No annual maintenance charge

¾ No Profit sharing & No lock-in period for investments.

Power Model Portfolio Performance (as of February 2021)

Duration Power Model Portfolio*

Nifty 50

1 Month 7.3% 6.6%

3 Months 11.0% 12.0%

1 Year 25.0% 29.7%

2 Year (CAGR) 15.4% 16.0%

Since Inception (CAGR)(26th May 2015)

9.9% 10.1%

Note: Returns taken from Miles System based on TWRR method; 2 year and above returns are CAGR basis

Top 5 Outperforming clients

Code Portfolio Return %

Nifty return %

Outperforming Portfolios Vs

Nifty (%)

Client 1 -16.4% 52.6% -69.0%

Client 2 -13.0% 45.5% -58.4%

Client 3 -8.9% 46.9% -55.8%

Client 4 -6.5% 46.5% -53.0%

Client 5 -4.3% 47.4% -51.6%

Note : Top 5 outperformer client Vs benchmark

7.3%

11.0%

25.0%

15.4%

9.9%

6.6%

12.0%

29.7%

16.0%

10.1%

1 Month 3 Month 1 Year 2 Year (CAGR) Since Inception (CAGR)(26th May 2015)

Power Model Portfolio Nifty 50

ADVISORY DESK MONTHLY PERFORMANCE


Advisory Products and ServicesThe Advisory Desk is a central desk consisting of a Mumbai-based expert team that runs various sample model portfolios for illustrative purposes only for clients of all profiles, be they traders or investors.

These products are different from Sharekhan research-based technical and fundamental offerings as these essentially try to capture the trading opportunities in stocks where momentum is expected before or after some event including the announcement of results or where some news/event is probable.

Advisory products are ideal for those who do not have time to either monitor the market tick by tick or shift through pages of research for data or pour over complex charts to catch a trend. However, all these products require perfect discipline and money management.

Report Card

INTRADAY CALLS

These are technical analysis calls. Calls will be generated in the cash segment and closed before the end of the trading day. These calls have pre-defined stop loss, targets. For details of the product, please write to us at [email protected].

DERIVATIVE CALLS

These calls are based on the analysis of open interest, implied volatility and put-call ratio in the derivatives market. It is a leveraged product and ideal for aggressive traders. These calls have a pre-defined stop loss, target, timeframe and quantity to be executed. For more details on this product, please write to us at [email protected].

DERIVATIVE IDEA FUTURES

Calls are in (stocks & index) futures segment, based on an analysis of open interest, implied volatility and the put-call ratio in the derivatives market. It is a leveraged product and ideal for aggressive traders. These calls have pre-defined stop loss, targets, timeframe and quantity to be executed. For more details on this product, please write to us at [email protected].

SHAREKHAN PRE-MARKET ACTION

This report gives us stocks in news, with likely the price effect which is valid for a day. The report has different sections - Stocks in News, Events, Technical View and Derivative View alongwith positive and negative bias stocks. The report is valid for a day, for more details please write to us on [email protected].

Product Intraday Calls (Cash) Derivative Calls Derivative Idea Future and Strategy

Month February 21 CY 21 February 21 CY 21 February 21 CY 21

No. of calls 82 167 42 99 17 40

Profit booked 46 96 24 55 13 31

Stop loss hit 36 71 18 44 4 9

Strike rate (%) 56% 57% 57% 56% 76% 78%

For Investor

Advisory Products & ServicesAdvisory Products & Services

T dInvestor

A i bl Id

Trader

Actionable IdeasMID Derivative Sharekhan

Pre Market ActionIntraday Calls

(Cash)

Stocks In Technical Derivative

Derivative Calls (Opt)

Derivative Idea (Fut+Opt)

Stocks In News

Technical view

Derivative view

For traders

ACTIONABLE IDEAS

These calls focus on generating absolute returns over a timeframe of 6-12 months and have a favourable risk-reward ratio. Stocks are closely tracked based on regular interaction with companies’ management to stay abreast of the business outlook. For details about the product, please write to us at [email protected].

http://[email protected].







MUTUAL FUNDS DESKMF PICKS


Data as on February 01, 2021

Scheme Name *Riskometer NAV (Rs.)

Absolute % (Point to Point)

Compounded Annualised % (Point to Point)

6 Months 1 yr 3 yrs 5 yrs Since Inception

Large Cap Funds

Axis Bluechip Fund - Growth Very High 38 25.8 17.9 14.0 16.0 12.8

BNP Paribas Large Cap Fund - Growth Very High 116 25.4 18.6 9.7 13.4 16.2

UTI Mastershare Unit Scheme - Growth Very High 156 30.1 20.3 9.2 13.5 15.5

Kotak Bluechip Fund - Reg - Growth Very High 301 28.4 19.2 9.0 13.4 19.6

Mirae Asset Large Cap Fund - Reg - Growth Very High 64 27.7 18.4 8.6 15.9 15.5

HSBC Large Cap Equity Fund - Growth Very High 269 29.6 19.1 8.3 14.3 19.9

ICICI Prudential Bluechip Fund - Growth Very High 52 29.4 18.8 7.8 14.0 13.9

Large & Mid Cap Fund

Canara Robeco Emerging Equities - Growth Very High 123 31.2 21.3 8.3 16.1 17.1

Kotak Equity Opportunities Fund - Reg - Growth Very High 152 26.3 14.5 8.2 14.9 18.1

Edelweiss Large & Mid Cap Fund - Growth Very High 40 30.0 18.7 8.0 13.6 10.7

Invesco India Growth Opportunities Fund - Growth Very High 42 27.5 15.1 8.0 14.4 11.3

Tata Large & Mid Cap Fund - Reg - Growth Very High 259 26.8 16.1 7.9 12.6 12.3

SBI Large & Midcap Fund - Growth Very High 274 33.2 15.2 6.8 12.7 14.2

DSP Equity Opportunities Fund - Reg - Growth Very High 280 30.6 16.5 6.8 14.8 17.4

Mid Cap Fund

Axis Midcap Fund - Growth Very High 50 28.5 21.1 14.6 16.1 17.6

Invesco India Mid Cap Fund - Growth Very High 65 30.4 21.5 8.9 14.3 14.5

DSP Midcap Fund - Reg - Growth Very High 72 27.7 18.7 8.2 15.6 14.9

Kotak Emerging Equity Fund - Reg - Growth Very High 51 36.4 18.4 7.7 15.6 12.5

Nippon India Growth Fund - Growth Very High 1453 36.3 20.3 7.0 14.2 21.7

UTI Mid Cap Fund - Growth Very High 135 36.0 26.7 5.8 12.4 17.4

Edelweiss Mid Cap Fund - Growth Very High 36 39.5 24.6 5.4 14.3 10.2

Small Cap Fund

Axis Small Cap Fund - Reg - Growth Very High 40 36.2 14.9 12.3 15.6 21.3

Kotak Small Cap Fund - Reg - Growth Very High 103 51.6 29.4 7.9 15.5 15.8

Nippon India Small Cap Fund - Growth Very High 51 41.5 24.1 3.1 15.1 17.0

ICICI Prudential Smallcap Fund - Ret - Growth Very High 33 45.0 17.5 2.5 11.7 9.3

HDFC Small Cap Fund - Growth Very High 47 39.3 16.9 0.9 13.2 12.8

Focused Fund

Axis Focused 25 Fund - Growth Very High 37 29.0 16.6 11.1 17.1 16.3

Sundaram Select Focus - Reg - Growth Very High 224 26.7 15.4 9.4 14.1 18.3

Motilal Oswal Focused 25 Fund - Reg - Growth Very High 29 27.5 18.4 9.3 14.2 14.7

SBI Focused Equity Fund - Growth Very High 175 23.7 10.7 8.5 14.7 19.1

ICICI Prudential Focused Equity Fund - Ret - Growth Very High 38 24.3 28.9 8.0 13.0 12.0

Aditya Birla Sun Life Focused Equity Fund - Growth Very High 74 27.6 17.4 7.6 13.0 14.0

Flexi Cap Funds

UTI Flexi Cap Fund - Growth Very High 201 36.2 27.4 14.6 16.2 12.8

Axis Flexi Cap Fund - Reg - Growth Very High 15 25.9 17.0 13.8 -- 13.5

Canara Robeco Flexi Cap Fund - Growth Very High 177 27.2 21.7 11.5 15.3 18.0

DSP Flexi Cap Fund - Reg - Growth Very High 52 31.8 18.1 9.8 15.6 12.9

Kotak Flexicap Fund - Reg - Growth Very High 43 27.0 14.3 8.2 14.9 13.7

SBI Flexicap Fund - Growth Very High 61 33.6 16.7 7.3 13.7 12.4

Sharekhan mutual fund Finder March 2021Top Equity Fund Picks

MUTUAL FUNDS DESK MF PICKS


Every individual has a different investment requirement, which depends on his financial goals and risk-taking capacities. We at Sharekhan first understand the individual’s investment objectives and risk-taking capacity, and then recommend a suitable portfolio. So, we suggest that you get in touch with our Mutual Fund Advisor before investing in the best funds.n

Sharekhan Limited, its analyst or dependant(s) of the analyst might be holding or having a postition in the mutual funds mentioned in the article.

Data as on February 01, 2021

Scheme Name *Riskometer NAV (Rs.)

Absolute % (Point to Point)


6 Months 1 yr 3 yrs 5 yrs Since Inception

Aditya Birla Sun Life Flexi Cap Fund - Growth Very High 903 32.0 16.0 6.9 14.9 22.2

Edelweiss Flexi Cap Fund - Reg - Growth Very High 18 29.4 16.2 6.1 14.1 10.0

Value & Contra Funds

Kotak India EQ Contra Fund - Reg - Growth Very High 66 29.0 17.8 9.8 15.4 12.9

UTI Value Opportunities Fund - Growth Very High 80 32.5 21.3 9.3 13.5 14.3

Invesco India Contra Fund - Growth Very High 61 27.2 22.4 8.4 15.9 14.0

Tata Equity P/E Fund - Reg - Growth Very High 159 23.4 15.0 3.5 14.3 18.1

HDFC Capital Builder Value Fund - Growth Very High 336 30.9 18.1 3.0 12.1 13.9

ELSS

Canara Robeco Equity Tax Saver Fund - Growth Very High 91 32.6 29.7 14.0 16.1 20.1

Mirae Asset Tax Saver Fund - Reg - Growth Very High 24 34.8 25.6 11.6 20.1 18.7

Axis Long Term Equity Fund - Growth Very High 58 29.6 15.4 11.1 14.4 17.2

Kotak Tax Saver Fund - Reg - Growth Very High 55 28.3 14.1 8.8 14.4 11.9

Invesco India Tax Plan - Growth Very High 65 27.4 19.2 8.7 14.2 14.2

UTI Long Term Equity Fund (Tax Saving) - Growth Very High 114 33.1 21.2 8.4 13.2 14.6

BNP Paribas Long Term Equity Fund - Growth Very High 50 26.0 17.5 8.4 12.4 11.2

DSP Tax Saver Fund - Growth Very High 62 31.4 18.7 8.3 15.1 13.8

Thematic/Sector Funds

Aditya Birla Sun Life Digital India Fund - Growth Very High 89 40.2 54.2 23.1 20.0 10.9

Nippon India Pharma Fund - Growth Very High 244 15.6 55.9 19.7 11.5 21.1

Canara Robeco Consumer Trends Fund - Reg - Growth Very High 53 31.0 22.1 12.5 17.8 15.8

BNP Paribas Equity schemes

Scheme name *RiskometerScheme

Category

Absolute % (Point to

Point)


6 Months 1 yr 3 yrs 5 yrsSince

Inception

BNP Paribas Substantial Equity Hybrid Fund - Reg - Growth Very HighAggressive

Hybrid20.2 16.4 11.3 -- 12.0

BNP Paribas Large Cap Fund - Growth Very High Large Cap 25.4 18.6 9.7 13.4 16.2

BNP Paribas Long Term Equity Fund - Growth Very High ELSS 26.0 17.5 8.4 12.4 11.2

BNP Paribas Focused 25 Equity Fund - Reg - Growth Very High Focused 25.8 15.3 5.7 -- 5.7

BNP Paribas Mid Cap Fund - Growth Very High Mid Cap 30.9 18.5 4.7 12.0 10.1

BNP Paribas Multi Cap Fund - Growth Very High Multi Cap 25.3 9.7 4.1 11.9 11.9

BNP Paribas India Consumption Fund - Reg - Growth Very High Thematic 25.5 17.7 -- -- 20.4

*The Riskometer will indicate five levels of risk – low (principal at low risk), moderately low (principal at moderately low risk), moderate (principal at moderate risk), moderately high (principal at moderately high risk) and high (principal at high risk).

MUTUAL FUNDS DESKMF PICKS


Sharekhan mutual fund Finder March 2021

(*invested on 1st day of every month) Data as on February 01, 2021

SIP INVST (Monthly Rs. 1,000)* 1 year 3 years 5 Year

Total amount invested 12,000 36,000 60000

Scheme Name *Riskometer NAV (Rs.)Present Value (Rs.)

Compounded annualised return (%)

Present value (Rs.)


Present value (Rs.)


Large Cap Fund

Axis Bluechip Fund - Growth Very High 38 14,794 54.8 47,230 19.4 90,650 17.0

Kotak Bluechip Fund - Reg - Growth Very High 301 15,425 68.3 47,027 19.1 84,614 14.1

BNP Paribas Large Cap Fund - Growth Very High 116 15,019 59.6 47,003 19.1 85,118 14.4

HSBC Large Cap Equity Fund - Growth Very High 269 15,480 69.5 46,709 18.6 84,648 14.2

UTI Mastershare Unit Scheme - Growth Very High 156 15,398 67.8 46,637 18.5 84,501 14.1

Mirae Asset Large Cap Fund - Reg - Growth Very High 64 15,328 66.2 46,231 17.8 85,840 14.7

ICICI Prudential Bluechip Fund - Growth Very High 52 15,491 69.8 45,892 17.3 83,473 13.6

Large & Mid Cap Fund

Mirae Asset Emerging Bluechip Fund - Growth Very High 74 15,928 79.4 50,376 24.3 95,075 19.0

Canara Robeco Emerging Equities - Growth Very High 123 15,366 67.1 47,332 19.6 87,244 15.4

DSP Equity Opportunities Fund - Reg - Growth Very High 280 15,470 69.3 46,418 18.1 83,408 13.5

Kotak Equity Opportunities Fund - Reg - Growth Very High 152 15,078 60.9 46,405 18.1 84,041 13.9

Tata Large & Mid Cap Fund - Reg - Growth Very High 259 15,125 61.9 46,327 18.0 82,960 13.3

SBI Large & Midcap Fund - Growth Very High 274 15,555 71.2 46,022 17.5 82,579 13.1

Invesco India Growth Opportunities Fund - Growth

Very High 42 15,084 61.0 45,318 16.4 84,121 13.9

Mid Cap Fund

Axis Midcap Fund - Growth Very High 50 14,870 56.5 48,417 21.3 92,386 17.8

Edelweiss Mid Cap Fund - Growth Very High 36 16,045 82.0 48,282 21.1 86,231 14.9

UTI Mid Cap Fund - Growth Very High 135 15,916 79.1 48,125 20.8 83,067 13.4

Kotak Emerging Equity Fund - Reg - Growth Very High 51 15,818 76.9 47,965 20.6 85,653 14.6

Nippon India Growth Fund - Growth Very High 1453 15,893 78.6 47,830 20.4 85,301 14.5

Invesco India Mid Cap Fund - Growth Very High 65 15,299 65.6 47,648 20.1 86,693 15.2

DSP Midcap Fund - Reg - Growth Very High 72 15,032 59.9 47,223 19.4 85,241 14.4

Small Cap Fund

Kotak Small Cap Fund - Reg - Growth Very High 103 17,116 106.3 51,697 26.3 89,768 16.6

Axis Small Cap Fund - Reg - Growth Very High 40 15,393 67.6 49,495 23.0 90,836 17.1

SBI Small Cap Fund - Growth Very High 73 16,079 82.7 49,459 22.9 92,682 18.0

ICICI Prudential Smallcap Fund - Ret - Growth Very High 33 16,508 92.3 47,848 20.4 81,429 12.5

DSP Small Cap Fund - Reg - Growth Very High 72 15,926 79.3 47,114 19.3 79,145 11.4

Nippon India Small Cap Fund - Growth Very High 51 16,256 86.7 46,956 19.0 84,660 14.2

HDFC Small Cap Fund - Growth Very High 47 16,083 82.8 42,969 12.5 77,648 10.6

Top SIP Fund Picks

MUTUAL FUNDS DESK MF PICKS


(*invested on 1st day of every month) Data as on February 01, 2021

SIP INVST (Monthly Rs. 1,000)* 1 year 3 years 5 Year

Total amount invested 12,000 36,000 60000

Scheme Name *Riskometer NAV (Rs.)Present Value (Rs.)


Present value (Rs.)


Present value (Rs.)


Focused Fund

Motilal Oswal Focused 25 Fund - Reg - Growth Very High 29 15,039 60.0 47,054 19.2 85,558 14.6

Axis Focused 25 Fund - Growth Very High 37 15,119 61.8 46,879 18.9 89,199 16.3

ICICI Prudential Focused Equity Fund - Ret - Growth

Very High 38 15,408 68.0 46,287 17.9 81,939 12.8

Aditya Birla Sun Life Focused Equity Fund - Growth

Very High 74 15,322 66.1 46,051 17.6 82,298 13.0

Sundaram Select Focus - Reg - Growth Very High 224 15,103 61.4 45,748 17.1 84,977 14.3

SBI Focused Equity Fund - Growth Very High 175 14,473 48.1 44,925 15.7 84,176 13.9

Flexi Cap Funds

UTI Flexi Cap Fund - Growth Very High 201 15,944 79.7 50,406 24.4 93,472 18.3

DSP Flexi Cap Fund - Reg - Growth Very High 52 15,384 67.5 47,952 20.6 87,777 15.7

Canara Robeco Flexi Cap Fund - Growth Very High 177 15,086 61.0 47,667 20.1 89,107 16.3

Franklin India Flexi Cap Fund - Growth Very High 737 16,345 88.7 46,984 19.0 82,110 12.9

SBI Flexicap Fund - Growth Very High 60 15,578 71.7 45,985 17.4 82,893 13.3

Aditya Birla Sun Life Flexi Cap Fund - Growth Very High 903 15,515 70.3 45,891 17.3 82,457 13.1

Kotak Flexicap Fund - Reg - Growth Very High 43 15,207 63.6 45,451 16.6 83,156 13.4

Edelweiss Flexi Cap Fund - Reg - Growth Very High 18 15,316 66.0 45,069 16.0 82,822 13.2

Value & Contra Funds

UTI Value Opportunities Fund - Growth Very High 80 15,739 75.2 47,640 20.1 85,474 14.6

Invesco India Contra Fund - Growth Very High 61 15,465 69.2 46,828 18.8 87,291 15.4

Kotak India EQ Contra Fund - Reg - Growth Very High 66 15,552 71.1 46,371 18.1 86,239 14.9

HDFC Capital Builder Value Fund - Growth Very High 336 15,711 74.6 43,906 14.0 78,191 10.9

Tata Equity P/E Fund - Reg - Growth Very High 159 14,990 59.0 43,476 13.3 78,423 11.0

Tax-saving funds (ELSS)

Canara Robeco Equity Tax Saver Fund - Growth

Very High 91 15,726 74.9 50,172 24.0 93,444 18.3

UTI Long Term Equity Fund (Tax Saving) - Growth

Very High 114 15,663 73.5 47,576 20.0 84,851 14.3

DSP Tax Saver Fund - Growth Very High 62 15,563 71.3 47,128 19.3 85,050 14.4

BNP Paribas Long Term Equity Fund - Growth Very High 50 15,013 59.5 46,773 18.7 83,558 13.6

Axis Long Term Equity Fund - Growth Very High 58 14,877 56.6 46,390 18.1 87,014 15.3

Invesco India Tax Plan - Growth Very High 65 15,168 62.8 46,237 17.9 85,067 14.4

Kotak Tax Saver Fund - Reg - Growth Very High 55 15,187 63.2 46,225 17.8 83,588 13.6

ICICI Prudential Long Term Equity Fund (Tax Saving) - Reg - Growth

Very High 458 15,520 70.4 45,549 16.7 81,600 12.6

Every individual has a different investment requirement, which depends on his financial goals and risk-taking capacities. We at Sharekhan first understand the individual’s investment objectives and risk-taking capacity, and then recommend a suitable portfolio. So, we suggest that you get in touch with our Mutual Fund Advisor before investing in the best funds.n

Sharekhan Limited, its analyst or dependant(s) of the analyst might be holding or having a postition in the mutual funds mentioned in the article.

*The Riskometer will indicate five levels of risk – low (principal at low risk), moderately low (principal at moderately low risk), moderate (principal at moderate risk), moderately high (principal at moderately high risk) and high (principal at high risk).

52March 2021 Sharekhan ValueGuide

EQUITY FUNDAMENTALSEARNINGS GUIDE

Sharekhan Earnings Guide Prices as on March 03, 2021

CompanyCMP (Rs)

Sales Net profit EPS (%) EPSgrowth

PE (x) RoCE (%) RoNW (%) DPSRs.

DivYld(%) FY20 FY21E FY22E FY20 FY21E FY22E FY20 FY21E FY22E FY20 FY21E FY22E FY21E FY22E FY21E FY22E

Autos

Alicon Castalloy 464 957.2 791.2 1,017.8 17.0 (7.9) 24.2 12.7 -5.9 18.1 19% 36.4 - 25.6 4.3 10.6 - 7.5 1.3 0.3

Amara Raja Batteries 914 6,839.5 6,906.7 7,877.7 660.8 620.3 747.5 38.7 36.3 43.8 6% 23.6 25.2 20.9 18.7 20.1 14.6 15.7 11.0 1.2

Apollo Tyres 250 16,327.0 17,127.4 19,621.9 476.4 734.2 1,163.6 8.3 11.6 18.3 48% 30.0 21.6 13.6 6.6 8.0 7.2 10.6 3.0 1.2

Ashok Leyland 131 17,467.5 13,729.4 22,535.1 395.3 (113.7) 1,017.7 1.3 -0.4 3.5 60% 97.3 - 37.8 0.6 11.3 - 12.7 0.5 0.4

Bajaj Auto 3,900 29,918.7 28,369.8 32,779.1 5,100.0 4,802.2 5,481.3 176.3 166.1 189.5 4% 22.1 23.5 20.6 27.7 28.4 21.6 21.7 120.0 3.1

Balkrishna Industries 1,634 4,897.5 5,610.2 6,476.8 945.0 1,098.7 1,351.8 48.9 56.8 69.9 20% 33.4 28.8 23.4 21.4 22.8 18.7 19.6 20.0 1.2

Bosch 15,238 9,841.6 8,355.7 11,519.9 1,301.3 971.3 1,421.8 441.3 329.4 482.1 5% 34.5 46.3 31.6 10.5 16.5 9.7 12.7 105.0 0.7

Exide Industries 207 9,856.7 9,524.4 10,796.8 847.2 705.3 825.5 10.0 8.3 9.7 -1% 20.8 25.0 21.4 14.0 15.0 13.0 13.8 4.1 2.0

GNA Axles 393 909.0 827.2 959.6 52.7 49.2 63.4 24.6 22.9 29.5 10% 16.0 17.1 13.3 11.8 13.6 10.0 11.6 0.0 0.0

Greaves Cotton 137 1,911.0 1,490.5 1,922.8 122.6 57.4 123.8 5.4 2.5 5.4 0% 25.4 55.1 25.6 7.6 20.3 8.6 17.2 0.0 0.0

HERO MOTOCORP 3,425 28,836.1 31,287.2 36,293.1 3,633.3 3,048.0 3,813.8 181.9 152.6 191.0 2% 18.8 22.4 17.9 26.1 30.7 20.3 23.6 90.0 2.6

Lumax Auto Technologies

155 1,140.9 1,033.6 1,290.8 49.8 42.9 64.1 7.3 6.3 9.4 13% 21.2 24.6 16.5 9.8 13.8 8.1 11.8 3.0 1.9

M&M 852 44,865.5 43,220.2 52,588.4 3,550.9 4,058.9 5,512.6 28.6 32.6 44.3 25% 29.8 26.1 19.2 13.4 16.3 10.9 13.5 2.4 0.3

Maruti Suzuki 7,124 75,610.6 71,938.5 90,083.2 5,650.6 5,536.1 8,000.9 187.1 183.3 264.9 19% 38.1 38.9 26.9 12.8 17.1 10.6 13.8 60.0 0.8

Mayur Uniquoters 418 528.0 522.2 631.1 79.8 89.0 109.8 17.6 19.6 24.2 17% 23.7 21.3 17.3 13.8 18.3 10.4 14.0 4.0 1.0

Schaeffler India 5,227 4,360.6 3,761.8 4,702.3 367.6 291.0 426.0 117.6 93.1 136.3 8% 44.4 56.2 38.3 11.5 16.0 8.4 11.8 35.0 0.7

Sundram Fasteners 715 3,723.2 3,574.3 4,560.8 324.9 236.3 446.2 47.0 64.7 34.3 -15% 15.2 11.1 20.9 12.1 18.7 10.9 18.0 4.2 0.6

Suprajit Engineering 286 1,562.8 1,641.0 2,018.4 104.0 130.5 183.8 7.4 9.4 13.3 34% 38.5 30.4 21.6 15.0 18.4 13.7 16.9 1.8 0.6

Tata Motors 349 2,61,068.0 2,55,579.4 3,17,437.8 (10,155.6) (3,447.4) 7,468.6 -26.5 -9.0 19.5 - - - 17.9 7.7 5.9 - 10.5 0.0 0.0

TVS Motor 627 16,423.3 16,981.7 20,208.3 592.3 617.8 981.5 13.1 13.0 20.7 25% 47.7 48.2 30.3 16.4 21.8 15.3 20.4 3.5 0.6

Agri/Specialy Chemical

Aarti Industries 1,301 4,186.3 4,505.9 5,527.9 536.5 572.0 749.3 30.8 32.8 43.0 18% 42.3 39.6 30.2 13.4 15.3 17.7 19.5 2.5 0.2

Atul Limited 6,649 4,093.1 3,726.2 4,562.6 666.5 671.6 791.6 224.5 226.3 266.7 9% 29.6 29.4 24.9 24.0 23.9 19.4 19.0 27.5 0.4

Coromandel International

778 13,136.7 14,661.6 15,957.4 1,065.0 1,409.0 1,531.5 36.3 48.1 52.3 20% 21.4 16.2 14.9 29.9 29.5 29.3 26.1 12.0 1.5

Insecticides (India) 459 1,363.2 1,404.1 1,572.6 86.9 80.8 135.3 42.1 39.1 65.4 25% 10.9 11.7 7.0 12.9 19.9 10.6 15.7 2.0 0.4

PI Industries 2,280 3,366.5 4,252.5 5,257.1 455.8 641.9 811.7 33.1 43.8 55.3 29% 69.0 52.1 41.2 19.4 18.0 17.0 15.1 4.0 0.2

SRF Limited 5,688 7,209.4 7,929.8 9,803.5 1,019.0 1,017.5 1,266.8 138.8 173.9 216.5 25% 41.0 32.7 26.3 16.5 19.3 18.8 19.6 14.0 0.2

Sudarshan Chemicals 574 1,708.2 1,793.6 2,206.1 131.2 129.0 171.0 18.9 18.6 24.7 14% 30.3 30.8 23.2 15.5 16.8 20.2 23.1 6.3 1.1

UPL 613 35,756.0 37,901.4 41,123.0 2,399.0 3,152.9 3,386.3 31.4 41.2 44.3 19% 19.6 14.9 13.9 10.9 11.9 18.0 16.9 6.0 1.0

Vinati Organics 1,425 1,028.9 944.6 1,354.5 333.8 270.5 380.2 32.5 26.3 37.0 7% 43.9 54.1 38.5 22.9 30.2 19.7 23.6 7.0 0.5

Banks and Financial Services

AU Small Finance Bank 1,199 1,908.9 2,448.9 2,822.5 674.8 915.0 1,244.9 22.8 29.6 40.3 33% 52.6 40.5 29.8 - - 15.5 17.6 0.8 0.1

Axis Bank 754 25,206.0 24,934.0 27,330.0 1,627.0 5,485.0 9,392.0 5.8 19.4 33.3 140% 129.9 38.8 22.6 - - 6.1 9.5 1.0 0.1

Bajaj Finance 5,545 16,901.0 18,409.0 21,455.0 5,264.0 4,571.0 8,217.0 87.7 76.2 137.0 25% 63.2 72.8 40.5 - - 13.3 20.5 10.0 0.2

Bajaj Finserv 10,387 54,351.0 64,015.0 79,925.0 3,369.0 4,091.0 5,496.0 212.0 257.0 345.0 28% 49.0 40.4 30.1 - - - - 5.0 0.0

Bank of Baroda 86 27,451.3 30,705.5 33,092.0 546.2 2,540.3 4,171.1 1.2 5.5 9.0 174% 71.3 15.6 9.5 - - 3.5 5.5 0.0 0.0

Bank of India 81 15,399.0 14,568.0 15,906.0 (2,929.0) 1,998.0 2,318.0 -9.4 6.1 7.1 - - 13.2 11.4 - - 4.4 4.9 0.0 0.0

Cholamandalam Investment and Finance Company

541 4,060.0 4,575.0 6,094.0 1,052.0 1,432.0 2,184.0 12.8 17.5 26.6 44% 42.2 30.9 20.3 - - 15.1 19.0 0.7 0.1

City Union Bank 181 1,675.0 1,965.0 2,203.0 476.0 628.0 976.0 6.5 8.5 13.2 43% 28.1 21.3 13.7 - - 11.3 15.5 0.5 0.3

Federal Bank 88 4,648.0 5,111.5 6,066.1 1,542.8 1,431.9 1,993.5 7.7 7.4 10.3 16% 11.4 11.9 8.5 - - 9.5 12.2 0.0 0.0

HDFC 2,653 15,194.0 11,716.0 12,523.0 17,770.0 10,994.0 11,303.0 102.9 61.3 63.0 -22% 25.8 43.3 42.1 - - 10.9 10.4 21.0 0.8

HDFC Bank 1,586 56,186.0 69,271.0 79,025.0 26,257.0 30,955.0 39,163.0 48.0 56.2 71.2 22% 33.1 28.2 22.3 - - 18.2 17.7 2.5 0.2

ICICI Bank 632 33,267.0 34,647.0 38,264.0 7,931.0 13,931.0 17,248.0 12.3 20.8 25.8 45% 51.4 30.4 24.5 - - 10.7 11.4 1.5 0.2

Indusind Bank 1,100 12,060.0 12,781.0 15,020.0 4,460.0 2,943.0 5,456.0 68.8 38.9 72.1 2% 16.0 28.3 15.3 - - 7.4 12.3 0.0 0.0

Kotak Mahindra Bank 1,899 13,500.0 15,868.0 17,417.0 5,947.0 6,967.0 8,319.0 30.9 36.6 43.7 19% 61.4 51.9 43.4 - - 11.0 11.7 0.0 0.0

LIC Housing Finance 464 4,689.0 5,786.8 6,569.1 2,401.8 3,098.9 3,567.5 47.6 61.4 70.6 22% 9.8 7.6 6.6 - - 17.2 17.2 8.0 1.7


EQUITY FUNDAMENTALS EARNINGS GUIDE

CompanyCMP (Rs)




LT FINANCE HOLDING 112 5,731.0 5,158.0 5,223.0 1,702.0 969.0 1,815.0 8.5 3.9 7.4 -7% 13.2 28.8 15.2 - - 5.2 9.0 0.0 0.0

Nippon Life India AMC 361 1,131.7 1,512.9 1,739.8 415.8 588.6 661.0 6.8 9.6 10.8 26% 53.1 37.6 33.4 - - 20.0 21.8 2.0 0.6

Punjab National Bank 44 17,438.0 23,918.0 27,538.0 336.0 1,450.0 2,604.0 0.5 1.5 2.8 137% 87.1 29.0 15.6 - - 2.0 3.1 0.0 0.0

RBL Bank 249 3,629.6 4,368.5 4,863.8 505.7 568.3 969.7 11.8 9.5 16.2 17% 21.1 26.2 15.4 - - 5.1 8.0 0.0 0.0

Repco Home Finance 324 520.5 571.0 602.8 280.4 285.2 334.6 44.8 45.6 53.5 9% 7.2 7.1 6.1 - - 14.4 15.0 2.5 0.8

SBI 405 98,085.0 1,09,022.0 1,27,507.0 14,488.0 23,573.0 32,909.0 16.2 10.0 7.1 -34% 25.0 40.5 57.0 - - 9.8 12.4 0.0 0.0

Spandana 611 849.9 768.7 909.6 351.8 346.8 433.9 54.8 54.0 67.6 11% 11.1 11.3 9.0 - - 11.9 13.2 0.0 0.0

Insurance

HDFC Life 727 32,707.0 36,304.8 42,113.5 1,295.0 1,373.3 1,603.0 6.4 6.8 7.9 11% 113.6 106.9 92.0 - - 17.2 17.5 0.0 0.0

ICICI Pru Life 490 33,430.0 35,070.0 36,910.0 1,069.0 1,196.0 1,316.0 7.4 8.3 9.2 12% 66.2 59.1 53.3 - - 15.1 14.7 0.0 0.0

ICICI Lombard 1,498 13,313.0 13,845.5 15,922.3 1,194.0 1,477.0 1,669.0 26.3 32.5 36.7 18% 57.0 46.1 40.8 - - 20.4 19.7 0.0 0.0

Max Financial 924 16,183.0 18,523.0 21,270.0 269.0 305.0 345.0 10.0 11.2 12.8 13% 92.4 82.5 72.2 - - - - 0.0 0.0

Consumer Goods

Asian Paints 2,402 20,211.3 20,434.0 24,086.0 2,779.1 3,183.0 3,747.0 29.0 33.2 39.1 16% 82.9 72.4 61.4 22.7 22.8 28.7 28.6 12.0 0.5

Britannia 3,481 11,599.6 13,082.0 14,628.0 1,410.2 1,820.0 2,018.0 58.6 75.7 83.9 20% 59.4 46.0 41.5 30.6 32.5 42.2 43.6 50.0 1.4

Colgate-Palmolive (India)

1,617 4,525.1 4,695.0 5,099.8 816.5 863.3 954.2 30.0 31.7 35.1 8% 53.9 50.9 46.1 69.8 77.0 55.1 61.2 28.0 1.7

Dabur India 518 8,703.6 9,489.0 11,179.0 1,528.0 1,715.0 2,067.0 8.6 9.7 11.7 16% 60.0 53.4 44.3 27.4 29.3 24.1 24.9 3.3 0.6

Emami 451 2,840.8 2,967.0 3,415.0 596.4 692.0 822.0 13.1 15.3 18.1 17% 34.3 29.5 24.9 39.4 40.5 30.0 31.6 5.0 1.1

Godrej Consumer Products

699 9,910.8 10,838.0 11,884.0 1,462.0 1,765.0 2,020.0 14.3 17.3 19.8 18% 48.9 40.4 35.3 18.3 19.6 21.3 22.0 8.0 1.1

Hindustan Unilever 2,194 38,785.0 46,071.5 51,693.5 6,885.8 79,720.9 10,440.2 31.9 33.7 44.4 18% 68.8 65.1 49.4 37.1 28.3 28.3 21.3 26.0 1.2

ITC 210 46,807.3 43,518.0 50,261.0 15,170.4 12,504.0 15,149.0 12.4 10.2 12.4 0% 16.9 20.7 16.9 20.3 25.4 19.7 23.7 10.2 4.8

Jyothy Laboratories 150 1,711.2 1,894.0 2,144.2 159.4 225.0 258.0 4.3 6.1 7.0 27% 34.5 24.6 21.4 14.6 15.3 17.3 17.7 2.0 1.3

Marico 409 7,315.0 7,808.0 8,800.0 1,069.3 1,183.0 1,377.0 8.3 9.2 10.7 14% 49.3 44.4 38.2 45.7 52.1 38.1 41.2 3.8 0.9

Nestle India 16,695 12,369.0 13,264.4 14,962.5 1,970.0 2,215.9 2,611.2 204.3 229.8 270.8 15% 81.7 72.6 61.6 59.8 60.0 102.1 91.9 342.0 2.0

Tata Consumer Products Ltd

637 9,637.4 11,278.0 12,453.0 660.7 1,006.0 1,166.0 7.2 10.9 12.7 33% 88.8 58.4 50.1 9.0 10.1 7.4 8.2 2.7 0.4

Zydus Wellness 1,901 1,766.8 1,802.0 2,054.0 185.9 220.0 308.0 28.9 34.2 47.9 29% 65.8 55.6 39.7 6.1 6.7 5.4 6.3 5.0 0.3

IT / IT services

Birlasoft 242 3,291.0 3,581.6 4,089.1 224.3 312.1 408.6 8.1 11.1 14.4 34% 30.1 21.9 16.8 19.8 22.0 15.7 18.3 2.0 0.8

HCL Technologies 965 70,678.0 75,685.7 85,762.9 11,061.0 13,372.0 14,137.0 40.8 49.3 52.1 13% 23.7 19.6 18.5 25.5 25.7 24.5 23.1 8.0 0.8

Infosys 1,344 90,791.0 1,00,943.9 1,17,107.4 16,594.0 19,487.7 22,201.4 39.0 45.8 52.3 16% 34.5 29.4 25.7 35.6 36.1 27.8 28.0 17.5 1.3

Intellect Design 460 1,346.9 1,494.6 1,720.9 16.0 245.2 293.8 1.2 18.4 22.2 326% 376.7 24.9 20.7 19.0 21.4 21.0 20.4 0.0 0.0

L&T Infotech 3,912 10,878.6 12,388.0 14,513.5 1,520.5 1,866.3 2,204.8 86.6 106.0 125.3 20% 45.2 36.9 31.2 37.9 36.2 30.9 29.7 28.0 0.7

L&T Technology services

2,708 5,619.1 5,466.5 6,518.9 818.6 670.0 915.0 77.7 63.5 86.7 6% 34.8 42.7 31.2 21.5 25.7 22.4 26.1 21.0 0.8

Mastek Limited 1,229 1,071.5 1,715.7 2,082.4 132.9 209.4 234.4 42.9 78.9 88.3 43% 28.6 15.6 13.9 21.9 22.4 24.1 22.6 8.0 0.7

Persistent Systems 1,690 3,565.8 4,182.1 4,822.8 340.3 433.9 554.2 44.4 56.8 72.5 28% 38.1 29.8 23.3 22.9 26.5 17.3 20.0 12.0 0.7

Tata Consultancy Services

3,059 1,56,949.0 1,64,153.6 1,85,475.6 32,340.0 33,356.4 38,716.0 86.2 90.2 104.7 10% 35.5 33.9 29.2 43.6 47.1 38.4 41.8 73.0 2.4

Tata Elxsi 2,564 1,609.9 1,820.4 2,233.9 256.1 341.4 444.8 41.1 54.8 71.4 32% 62.3 46.8 35.9 29.3 30.5 25.9 26.9 16.5 0.6

Tech Mahindra 976 36,867.7 38,150.7 41,721.1 4,250.5 4,599.6 4,956.7 45.9 52.3 56.3 11% 21.3 18.7 17.3 20.6 20.2 19.9 19.1 15.0 1.5

Wipro 435 61,023.2 62,082.8 67,461.9 9,721.8 10,783.8 11,839.8 16.6 18.9 20.8 12% 26.2 23.0 20.9 17.2 17.6 17.6 17.6 1.0 0.2

Telecom and New Media

Affle (India) Limited 5,760 333.8 511.0 651.5 65.5 103.0 132.1 26.1 41.1 51.8 41% 220.4 140.2 111.2 35.6 32.2 31.0 28.4 0.0 0.0

Bharti Airtel 546 87,539.0 1,01,936.4 1,16,254.7 (3,630.4) 222.6 5,561.2 -7.0 0.4 10.2 - - 1,338.2 53.6 7.4 10.1 0.3 7.6 2.5 0.5

Info Edge (India) 5,048 1,272.7 1,135.3 1,440.7 328.9 307.3 441.9 26.7 23.9 34.4 13% 188.9 211.2 146.9 15.3 19.5 11.6 14.7 6.0 0.1

Cap goods / Power

Amber Technologies 3,312 3,963.0 3,150.0 4,213.0 158.0 54.0 141.0 50.4 16.0 41.9 -9% 65.7 207.0 79.0 5.9 10.3 4.0 8.6 1.6 0.0

Bharat Electronics 153 12,968.0 14,146.0 15,490.0 1,824.0 1,879.0 2,057.0 7.5 7.7 8.4 6% 20.4 19.9 18.2 18.4 19.0 17.8 18.1 1.4 0.9

Carborundum Universal 515 2,599.0 2,510.0 2,942.0 272.0 248.0 304.0 14.4 13.1 16.1 6% 35.8 39.3 32.0 15.3 17.1 12.6 13.9 1.5 0.3

CESC 625 7,836.0 7,662.9 8,798.4 918.0 822.0 1,041.9 68.9 61.7 78.2 7% 9.1 10.1 8.0 6.9 8.4 8.0 9.6 20.0 3.2

New Idea



CompanyCMP (Rs)




Coal India 155 96,080.3 89,744.0 98,833.0 16,714.2 12,494.0 14,911.0 27.1 20.3 24.2 -6% 5.7 7.6 6.4 36.9 40.7 37.3 40.8 12.0 7.7

Cummins India 864 5,158.0 4,390.0 5,000.0 643.0 532.0 608.0 23.2 19.2 21.9 -3% 37.3 45.0 39.5 15.3 17.0 12.6 14.1 7.0 0.8

Dixon Technologies 19,240 4,400.0 6,003.0 10,119.0 119.0 149.0 269.0 103.0 129.2 232.8 50% 186.8 148.9 82.6 30.2 39.5 24.3 32.8 4.0 0.0

Finolex cable 401 2,877.3 2,572.0 2,956.0 402.5 257.0 358.0 26.3 16.8 23.4 -6% 15.2 23.8 17.1 12.3 15.6 11.3 15.8 5.5 1.4

Honeywell Automation 46,945 3,290.0 3,258.0 3,735.0 491.0 499.0 621.0 556.0 564.8 702.0 12% 84.4 83.1 66.9 28.3 31.1 22.8 25.0 75.0 0.2

Kalpataru Power Transmission

399 7,904.0 8,004.0 9,270.0 463.0 477.0 586.0 30.0 30.9 37.9 12% 13.3 12.9 10.5 16.8 17.9 12.7 13.8 8.5 2.1

KEC International 461 11,965.4 12,474.0 13,471.0 565.5 524.0 665.0 22.0 20.4 25.9 9% 21.0 22.6 17.8 18.9 20.3 17.2 18.6 3.4 0.7

KEI Industries 500 4,884.0 4,210.0 4,937.0 243.0 249.0 319.0 27.2 27.8 35.6 14% 18.4 18.0 14.0 20.0 21.3 14.3 15.6 1.5 0.3

NTPC 113 97,700.4 1,11,428.2 1,23,305.6 12,173.5 12,071.4 15,326.4 12.3 12.2 15.5 12% 9.2 9.2 7.3 8.5 9.9 10.3 12.4 3.2 2.8

Polycab India 1,355 8,830.0 8,325.0 9,604.0 766.0 653.0 806.0 54.2 43.8 54.1 0% 25.0 30.9 25.0 21.4 22.6 15.9 17.0 7.0 0.5

Power Grid Corporation 227 37,743.5 40,763.0 44,839.3 11,059.4 11,538.0 13,380.0 21.1 22.1 25.6 10% 10.8 10.3 8.9 10.5 11.7 17.1 18.2 10.0 4.4

Ratnamani Metals and Tubes

1,965 2,583.1 2,099.7 2,831.8 307.5 224.6 307.9 65.8 48.1 65.9 0% 29.8 40.9 29.8 12.9 16.5 12.4 15.1 12.0 0.6

Thermax 1,374 5,731.3 4,732.0 5,575.0 212.5 233.2 339.3 18.9 20.7 30.1 26% 72.8 66.3 45.6 10.9 16.2 8.3 12.5 7.0 0.5

Triveni Turbine 111 817.9 723.8 825.4 121.8 114.0 127.0 3.8 3.5 3.9 2% 29.4 31.7 28.4 23.1 22.2 18.1 17.0 0.5 0.5

V-Guard Industries 223 2,482.0 2,527.0 2,830.0 185.2 178.0 219.0 4.3 4.2 5.1 9% 51.6 53.1 43.8 22.1 24.3 16.7 17.9 0.9 0.4

Infrastructure

Ashoka Buildcon 112 5,070.5 4,951.5 5,884.8 165.3 254.8 264.1 5.9 9.1 9.4 26% 19.1 12.4 11.9 22.6 26.3 49.3 36.3 0.0 0.0

JMC Projects 77 3,713.0 3,685.0 4,372.0 158.0 64.0 137.0 9.4 3.8 8.2 -7% 8.2 20.3 9.4 12.2 17.2 6.4 12.6 0.7 0.9

KNR Constructions 209 2,244.2 2,456.5 2,945.9 248.5 225.5 326.6 8.8 8.0 11.6 15% 23.6 26.0 18.0 13.7 16.9 12.8 16.2 0.5 0.2

Larsen & Toubro 1,497 1,45,452.4 1,43,897.0 1,62,247.0 9,549.0 7,502.0 9,519.0 68.0 53.5 67.9 0% 22.0 28.0 22.0 6.6 7.7 10.2 11.3 18.0 1.2

PNC Infratech 262 4,877.9 4,645.1 5,662.5 349.6 337.1 432.3 13.6 13.1 16.8 11% 19.3 20.0 15.6 13.4 14.7 12.5 14.0 0.5 0.2

Sadbhav Engineering 73 2,251.7 1,844.7 3,277.9 68.1 10.6 132.9 4.0 0.6 7.7 40% 18.5 119.1 9.5 5.0 8.4 0.5 6.2 1.0 1.4

Metal & mining

JSW Steel 428 73,326.0 75,854.5 84,274.3 3,919.0 5,279.1 7,515.8 16.3 21.9 31.2 38% 26.3 19.5 13.7 12.8 14.0 13.8 15.6 2.0 0.5

NMDC 137 11,699.2 14,067.0 17,216.9 3,670.5 6,967.5 4,980.0 12.0 22.8 16.3 16% 11.4 6.0 8.4 25.7 15.1 23.5 15.0 5.3 3.9

MOIL 169 1,038.1 1,010.4 1,227.6 248.2 153.2 293.5 10.5 6.5 12.4 9% 16.2 26.2 13.7 6.2 11.6 5.4 9.9 5.5 3.2

Oil & gas

Bharat Petroleum Corporation

466 2,84,383.0 2,29,007.5 3,24,994.3 3,764.0 9,622.3 6,369.8 19.1 48.9 32.4 30% 24.4 9.5 14.4 21.0 14.8 27.8 17.2 16.5 3.5

Castrol India 135 2,996.9 3,914.5 4,152.5 599.7 913.7 947.8 6.1 9.2 9.6 26% 22.3 14.6 14.1 83.5 80.5 60.4 56.2 5.5 4.1

GAIL (India) 147 71,871.0 60,698.2 81,065.0 6,519.0 4,237.0 6,714.8 14.5 9.4 14.9 1% 10.2 15.6 9.9 9.9 14.9 9.4 13.9 6.5 4.4

Gujarat Gas 550 10,300.3 9,826.8 13,451.6 909.5 1,260.3 1,336.5 13.2 18.3 19.4 21% 41.6 30.0 28.3 28.2 25.7 33.2 28.0 1.3 0.2

Gujarat State Petronet Limited

276 2,368.6 2,166.9 2,402.6 1,108.7 932.6 1,123.8 19.7 16.5 19.9 1% 14.0 16.7 13.9 14.8 15.8 13.1 14.0 2.0 0.7


249 2,67,599.8 1,82,234.8 2,19,560.0 2,092.1 8,612.3 6,477.4 13.7 56.5 42.5 76% 18.1 4.4 5.9 19.1 14.2 27.6 18.4 9.8 3.9

Indian Oil Corporation 103 4,86,256.5 4,61,025.8 5,29,370.3 9,987.2 17,199.4 15,335.3 10.6 18.3 16.3 24% 9.7 5.6 6.3 13.7 10.8 17.5 14.5 4.7 4.6

Indraprastha Gas Limited

517 6,485.3 4,903.8 6,255.4 1,136.5 1,031.0 1,437.5 16.2 14.7 20.5 12% 31.9 35.1 25.2 24.3 29.7 19.1 23.3 2.8 0.5

Mahanagar Gas 1,182 2,972.1 2,144.7 2,794.4 737.1 662.7 895.6 74.6 67.1 90.7 10% 15.8 17.6 13.0 26.7 32.0 21.2 25.4 35.0 3.0

Oil India Ltd 128 12,128.5 8,441.0 11,049.0 3,207.8 913.0 1,946.0 29.6 8.4 17.9 -25% 2.8 8.7 5.1 5.1 8.8 3.7 7.7 10.6 8.3

Petronet LNG 256 35,452.0 28,502.0 34,384.0 2,852.4 2,994.0 3,287.0 19.0 20.0 21.9 7% 13.5 12.8 11.7 26.1 27.4 26.7 27.9 12.6 4.9

Reliance Ind 2,201 5,96,743.0 4,97,719.3 5,89,872.7 44,324.0 41,244.2 62,472.7 74.9 69.7 92.4 11% 29.4 31.6 23.8 8.8 11.5 7.8 10.0 6.5 0.3

Pharmaceuticals

Abbott India 14,609 4,093.1 4,295.9 4,816.2 592.9 735.7 819.3 279.0 346.0 385.5 18% 52.4 42.2 37.9 34.2 32.9 26.3 25.3 250.0 1.7

Aurobindo Pharma 881 23,098.0 25,032.9 28,490.7 2,913.2 3,269.2 3,795.7 49.7 55.8 64.8 14% 17.7 15.8 13.6 18.1 18.5 16.3 15.1 3.0 0.3

Biocon 403 6,367.2 8,033.9 9,787.3 680.7 1,028.9 1,413.8 5.7 8.6 11.8 44% 71.0 47.0 34.2 10.7 14.0 13.4 15.7 0.0 0.0

Cadila Healthcare 446 14,253.1 15,207.3 16,477.6 1,511.4 2,070.1 2,232.5 14.8 20.2 21.8 22% 30.2 22.0 20.4 13.8 14.5 17.3 16.4 3.5 0.8

Cipla 812 17,132.0 19,307.1 21,513.8 1,499.5 2,521.7 2,914.5 19.2 31.3 36.1 37% 42.3 26.0 22.5 17.4 18.2 13.9 14.6 4.0 0.5

Divi's Labs 3,565 5,394.4 6,861.8 8,712.1 1,294.5 1,965.0 2,574.4 48.8 74.0 97.0 41% 73.1 48.2 36.8 28.4 29.6 22.1 23.2 16.0 0.4

DR Reddy's 4,501 16,357.4 19,240.4 21,563.9 2,026.0 2,711.7 3,112.1 122.0 163.4 187.5 24% 36.9 27.6 24.0 16.0 17.1 15.8 16.1 25.0 0.6

Gland Pharma 2,433 2,633.2 3,338.2 4,102.2 772.8 997.3 1,233.4 47.3 61.1 75.5 26% 51.4 39.8 32.2 21.6 22.3 17.0 17.5 0.0 0.0New Idea



CompanyCMP (Rs)




Granules 364 2,598.6 3,244.1 3,821.0 329.7 539.9 646.7 13.3 21.8 26.2 40% 27.3 16.7 13.9 23.7 24.7 23.3 22.4 1.0 0.3

IPCA Lab 1,961 4,648.7 5,591.3 6,327.4 603.6 1,157.6 1,224.3 47.8 91.8 97.1 42% 41.0 21.4 20.2 29.8 25.6 27.7 22.8 5.0 0.3

Laurus Labs 365 2,831.7 4,532.3 5,395.9 255.3 920.7 1,090.1 4.8 17.3 20.5 107% 76.0 21.1 17.8 32.2 29.6 34.2 28.8 2.5 0.7

Lupin 1,061 15,374.8 15,793.7 18,146.5 352.6 1,083.1 1,843.0 7.8 23.9 40.7 129% 136.3 44.4 26.1 8.8 12.3 8.0 11.9 6.0 0.6

Sanofi India* 8,294 2,901.0 3,191.0 3,417.0 519.3 590.0 631.0 225.8 256.7 274.4 10% 36.7 32.3 30.2 32.9 31.4 24.6 23.4 365.0 4.4

Shilpa Medicare 369 907.9 1,015.3 1,184.8 156.9 178.1 220.0 19.2 21.8 27.0 18% 19.2 16.9 13.7 11.8 13.1 11.9 12.9 1.0 0.3

Solara Active Pharma Sciences

1,300 1,321.8 1,705.1 2,033.9 114.5 218.4 260.8 32.3 61.6 73.5 51% 40.3 21.1 17.7 16.4 17.0 16.8 16.8 2.0 0.2

Strides Pharma Sciences

890 2,752.0 3,320.1 3,795.2 139.9 261.8 399.7 15.6 29.2 44.6 69% 57.0 30.4 19.9 10.3 12.8 11.1 12.8 14.0 1.6

Sun Pharmaceutical Industries

624 32,837.5 35,878.1 38,919.7 4,025.6 5,755.9 6,629.7 16.8 24.0 27.6 28% 37.2 26.0 22.6 13.0 12.8 12.3 12.5 4.0 0.6

Torrent Pharma 2,497 7,780.0 8,284.1 9,348.1 1,025.0 1,308.2 1,516.5 60.3 77.0 89.2 22% 41.4 32.5 28.0 17.9 19.2 24.3 23.2 32.0 1.3

Building materials

APL Apollo Tubes^ 1,243 7,723.2 8,477.4 10,275.6 256.0 337.3 493.5 20.6 27.1 39.7 39% 60.4 45.8 31.3 23.6 28.9 22.6 26.9 0.0 0.0

Astral Poly Technik 2,207 2,577.9 2,937.8 3,503.5 247.9 354.7 406.2 16.4 23.5 26.9 28% 134.4 93.9 82.0 25.2 24.4 21.2 19.9 1.0 0.0

Century Plyboards (India)

319 2,317.0 1,995.0 2,348.3 208.8 203.9 243.5 9.4 9.2 10.9 8% 34.0 34.8 29.2 14.0 15.2 15.1 15.8 1.0 0.3

Dalmia Bharat 1,502 9,674.0 10,570.0 12,200.2 268.0 740.5 907.8 13.7 39.2 48.1 87% 109.3 38.3 31.2 6.5 7.7 6.9 8.0 2.0 0.1

Grasim 1,318 18,609.4 13,416.2 16,441.8 1,266.7 867.3 1,202.1 19.3 13.2 18.3 -3% 68.5 100.0 72.1 1.9 2.5 2.1 2.8 4.0 0.3

Greenlam Industries 944 1,320.6 1,127.8 1,384.9 86.7 67.8 106.6 35.9 28.1 44.2 11% 26.3 33.6 21.4 10.3 14.2 12.8 17.7 4.0 0.4

JK Lakshmi Cement 421 4,043.5 4,328.0 4,637.0 235.2 322.7 321.6 22.6 27.4 27.3 10% 18.7 15.4 15.4 14.3 13.0 17.3 14.8 2.5 0.6

Kajaria Ceramics 972 2,808.0 2,565.2 3,139.6 255.3 279.3 382.4 16.1 17.6 24.1 22% 60.5 55.3 40.4 15.5 19.9 15.9 20.2 3.0 0.3

Pidilite Industries 1,765 7,294.5 6,818.0 8,658.0 1,177.2 1,070.0 1,346.0 23.2 21.1 26.5 7% 76.2 83.7 66.6 18.4 19.7 22.3 23.8 2.3 0.1

Shree Cement 27,686 11,904.0 12,442.9 13,862.3 1,570.2 2,264.5 2,482.9 435.2 627.6 688.1 26% 63.6 44.1 40.2 15.2 14.7 16.3 15.6 110.0 0.4

Supreme Industries limited

2,110 5,512.0 6,027.3 6,985.1 467.4 712.6 759.8 36.8 56.1 59.8 28% 57.3 37.6 35.3 28.6 26.3 24.4 22.3 14.0 0.7

The Ramco Cements 1,017 5,368.4 5,185.4 6,004.1 601.1 797.1 855.9 25.5 33.8 36.3 19% 39.8 30.0 28.0 9.3 9.2 15.1 14.2 2.5 0.2

UltraTech Cement 6,500 40,649.2 41,131.3 46,483.9 3,652.2 4,687.3 5,412.8 126.5 162.4 187.5 22% 51.4 40.0 34.7 9.5 10.2 11.6 12.0 13.0 0.2

Logistics

Gateway Distriparks 176 1,237.2 1,138.8 1,187.1 50.7 70.7 85.0 4.1 5.7 6.8 30% 43.3 31.1 25.8 7.9 8.4 5.1 5.8 4.5 2.6

Mahindra Logistics 481 3,471.1 3,249.6 3,914.2 55.1 35.8 67.2 7.7 5.0 9.4 10% 62.3 96.0 51.1 8.7 13.0 6.4 11.0 1.5 0.3

TCI Express 910 1,032.0 852.6 996.3 89.1 94.8 118.8 23.3 24.8 31.0 15% 39.1 36.7 29.3 24.2 24.9 25.4 26.0 1.0 0.1

Discretionary

ABFRL 209 8,742.5 5,328.0 8,104.0 (38.9) (586.0) 29.0 -0.5 1.0 0.3 - - 209.1 697.0 - 4.2 1.0 8.4 0.0 0.0

Arvind* 76 7,369.0 5,067.1 7,055.7 128.1 14.7 140.0 4.9 0.6 5.4 6% 15.7 134.0 14.1 3.1 5.8 0.5 5.1 0.0 0.0

Bata India 1,525 3,053.0 1,675.0 2,814.0 327.0 (24.0) 305.0 25.4 -1.9 23.8 -3% 60.0 - 64.1 1.5 10.4 - 16.3 4.0 0.3

Inox Leisure 322 1,897.4 89.5 1,841.4 83.9 (343.1) 87.9 8.5 -33.4 8.5 0% 37.8 - 37.6 - 10.3 - 24.0 1.0 0.3

Jubilant Foodworks 3,142 3,886.0 3,203.0 4,396.0 331.0 222.0 509.0 25.1 16.8 38.6 24% 125.2 187.0 81.4 16.5 29.3 19.1 37.5 6.0 0.2

KPR Mill 960 3,353.0 3,231.0 3,904.0 377.0 393.0 501.0 54.7 57.1 72.8 15% 17.5 16.8 13.2 20.7 23.7 19.3 20.9 4.0 0.4

Relaxo Footwear 839 2,410.5 2,222.0 2,858.0 226.3 257.0 348.0 9.1 10.3 14.0 24% 92.1 81.5 60.0 25.6 29.0 18.6 21.4 1.3 0.1

The Indian Hotels Company

125 4,463.1 1,545.0 3,124.0 318.0 (813.0) (74.0) 2.8 -7.0 -0.4 - 45.0 - - - 2.7 - - 0.5 0.4

Titan Company Limited 1,474 21,051.5 19,915.0 26,692.0 1,519.2 986.0 2,144.0 17.0 11.1 24.2 19% 86.6 132.8 60.9 16.8 31.0 14.1 26.3 4.0 0.3

Trent Ltd 911 3,178.0 2,069.0 3,340.0 155.0 (123.0) 185.0 4.3 -3.5 5.2 10% 211.9 - 175.2 1.1 9.6 - 7.7 1.0 0.1

Welspun India 71 6,741.0 7,180.0 7,885.0 493.0 517.0 651.0 4.9 5.1 6.5 15% 14.4 13.8 10.9 13.3 15.2 16.3 18.1 1.0 1.4

Wonderla Holidays 208 270.9 13.0 108.0 45.9 (67.0) (17.0) 8.1 -11.9 -2.9 - 25.7 - - - - - - 1.8 0.9

ZEE Entertainment 222 8,129.9 7,403.5 9,327.5 501.8 1,190.4 1,598.1 5.2 12.4 16.6 78% 42.5 17.9 13.4 14.5 18.4 11.6 13.9 0.3 0.1

Diversified / Miscellaneous

Bajaj Holdings 3,663 - - - - - - - - - - - - - - - - - 40.0 1.4

Mahindra Lifespace 529 610.9 144.3 312.4 (193.4) (68.7) (3.2) -37.6 -13.4 -0.6 - - - - - - - - 6.0 1.1

Polyplex Corporation 870 4,487.1 4,965.8 4,990.7 282.0 515.7 436.8 86.6 158.4 134.2 24% 10.0 5.5 6.5 19.7 15.0 16.1 12.5 47.0 5.4

Quess Corp 736 10,991.0 10,749.0 12,011.0 299.0 162.0 261.0 20.3 11.0 17.7 -7% 36.3 66.9 41.6 7.9 10.6 6.9 10.2 0.0 0.0

Triveni Engineering & Industries

94 4,437.0 5,148.0 5,318.0 315.0 504.0 563.0 13.5 16.8 18.7 18% 7.0 5.6 5.1 19.3 20.1 25.5 22.9 1.1 1.2

Note: Grasim- Changed reporting to standalone financial numbers Sanofi Nos for CY2019/Cy2020E/CY2021E

New Idea

New Idea

New Idea



Remarks

Autos

Alicon Castalloy • Alicon to benefit from its established market position in aluminium casting components, driven by established client relationships and operations in India, Austria, and Slovakia. We expect Alicon to benefit from an improved business outlook for automotive and non-automotive segments, given a strong recovery in demand due to normalcy of economic activities. Moreover, the execution of Alicon’s multi-year order wins would commence from FY22 which provides strong growth visibility going forward. We maintain a positive stance on Alicon’s business outlook and recommend a Buy on the stock

Amara Raja Batteries • Amara Raja Batteries Limited (Amara) is expected to benefit from an improving business outlook for automotive and industrial sectors, as economic activities normalise. Amara’s revenue is dependent on the two-wheeler and four-wheeler segments, where we see positive traction and strong recovery. We expect Amara to continue outpace peers, by adding clients, launching products and by benefiting from an extensive distribution network. Earnings are likely to grow by 20.5% in FY2022E and 15.4% in FY2023E, driven by 13% CAGR (FY2021-23) in revenues and 110 bps expansion EBITDA margins. Valuations attractive and hence, retain a Buy on the stock.

Apollo Tyres (ATL) • ATL is well-positioned to gain market share in India and Europe, given its strong brand, R&D, technology and distribution network. We expect the company to benefit from its strategy by deleveraging its balance sheet, capital utilisation of over 90% and a focus on firm capital allocation and cash management. Consolidated earnings are set to rise by 59% y-o-y in FY22E and by 31% y-o-y in FY23E, as EBITDA margins are likely to gradually rise by 670 bps from 11.7% in FY20 to 17.4% in FY23. We expect ATL to be FCFF positive in FY23E and thus maintain a Buy rating on the stock.

Ashok Leyland • Ashok Leyland is a pure play on upturn in the commercial vehicle (CV) industry, led by a faster economic recovery. As volumes bounce back and OPMs sure due to operating leverage, we expect Ashok Leyland to register a net profit of Rs. 864 crore and Rs. 2,053 crore in FY2022E and FY2023E respectively, versus an estimated loss of Rs. 241 crore in FY2021E. The valuations are attractive and trading at discount to long-term average multiples. Thus, we reiterate a Buy on stock.

Bajaj Auto • Bajaj Auto (BAL) is the second-largest domestic motorcycle manufacturer and largest exporter of motorcycles in India. It is the market leader in the premium motorcycle segment (125-200 cc) with a market share of 41%. With new launches, BAL aims to increase its market share further and is targeting a market share of ~25% in a few years. With network expansion, BAL aims to stay the top motorcycle exporter. BAL has a strong, debt-free balance sheet and cash equivalents of Rs. 16,240 crore with strong return ratios. BAL has healthy dividend pay-out ratio of 40-45%. Valuation multiples are trailing long-term historical averages. We retain a Buy rating on the stock.

Balkrishna Industries • Balkrishna Industries Ltd (BKT) is largest exporter of off-highway tyres from India. Q3FY2021 results beat estimates with strong demand and operational performance. BKT is witnessing strong demand traction and has raised its FY2021 volume guidance and expects strong demand momentum to continue in FY2022. However, despite strong operational performance in Q3FY2021, we are concerned that BKT’s return ratios and EBITDA margin would decline in the medium term, owing to a significant capex commitment towards the non-core business. Valuations are at premium to its historical average. Thus, we are downgrading the stock to Hold.

Bosch Limited • Bosch Ltd is a leading supplier of technology and services for mobility solutions, industrial technology, consumer goods and energy and building technology. Q3FY21 results beat estimates driven by a faster-than-expected recovery in sales. However, EBITDA margins lagged our expectations marginally. The inability to fully pass on BS-VI cost increases, adverse forex movements and a higher share of traded products affected margins. Going ahead, we expect Bosch to see a significant rise in content per vehicle with the advent of BS-VI emission norms as vehicles require significant changes in combustion, powertrain systems and exhaust gas treatment. FY2022 is likely to witness a strong recovery, as economic activity normalises and pent-up demand arises. Bosch is well prepared to tap emerging opportunities in electrification and connected vehicles with strong technological support from its parent, Robert Bosch GmbH. We recommend a Buy rating on the stock.

Exide Industries • Exide is the largest battery manufacturer in the lead acid battery markets, commanding a market share close to ~55% among organised players. With a strong brand equity and extensive distribution network, we expect Exide to grow strongly in the battery industry, led by replacement demand, recovery in the industrial battery segment, and its extensive distribution network. With Exide tightening costs through backward integration, enhanced automation, raising share of renewable energy for power and higher digitisation initiatives we expect margins to improve. Valuations are attractive as it is trading at a discount to historical multiple. We recommend a Buy rating on the stock.

GNA Axles • GNA has reported a strong 27% revenue CAGR in exports over the past four years and has been gaining market share in exports due to comparatively low-cost advantage. With the company establishing product reliability and quality, it has been winning higher business from clients. Moreover, foray into SUV provides an incremental growth opportunity for GNA. We have raised our earnings estimates by 31% and 17.2% in FY2022E and FY2023E, respectively, to factor in the impact of a better business outlook and margin expansion. We expect GNA’s earnings to grow by 29.1% in FY2022E and 22.9% in FY2023E, driven by a 14% CAGR during FY2021EFY2023E and a 70 bps improvement in EBITDA margin. We recommend a Buy on the stock.

Greaves Cotton Limited • Greaves Cotton Limited reported a strong set of numbers, with both revenue and operating numbers beating expectations. A sequential improvement in business was driven by a robust recovery in non-auto business, electric mobility, but a slower paced recovery in 3-wheelers. We believe the company is benefitting from by its re-focus strategy on automotive, non-automotive, e-mobility, retail and finance businesses. Over the last few years, the company has transformed its businesses to expand its markets from three-wheeler diesel engines to last-mile mobility, move beyond one product/application/fuel with focus on clean tech, increasing value to customers through B2C, expand products to solutions and leverage the company’s brand and penetration. Given the improved new businesses outlook and expectations of improving three wheeler sales, we retain a Buy rating on the stock.

Hero MotoCorp • Hero MotoCorp (Hero) is the market leader in the domestic two-wheeler industry with 38.5% market share. Hero continues to benefit from premiumisation, a stronghold in the economy and executive motorcycle segments and aggressive product offerings in premium bike and scooter segments. Hero is expected to benefit from rural demand and increased personal mobility. Its brand equity is led by value-for-money products, extensive service centres, low maintenance cost and higher resale value. Valuations are below historical averages. Hence, we retain a Buy rating on the stock.

Lumax Auto Technologies • Lumax Auto Technologies (LATL) is a leading auto component manufacturer with a well-diversified product portfolio. It supplies components to most leading two-wheeler OEMs in the country and is present in the two-wheeler and three-wheeler segments (50% of FY20 sales), Passenger Cars (20% of FY20 sales) and aftermarkets (18% of FY20 sales). OEMs account for 80% of (FY2020) revenues, while the aftermarket accounts for 18% of the revenues. LATL is likely to deliver strong 16% PAT CAGR over FY20- 23. Give the better-than-expected results and strong demand commentary, we have raised our earnings estimates by 10-12%. The stock trades below historical averages and we recommend a Buy.



M&M • Mahindra and Mahindra (M&M) is the market leader in tractors and light commercial vehicles with a market share of ~40%. The company is also India’s leading sports utility vehicle (SUV) manufacturer with a market share of ~20%. Due to strong farm sentiments, M&M expects tractor demand to remain robust and expects the industry to grow in FY2021. Moreover, M&M is likely to gain market share in tractors due to a better outlook in regions, where it has a higher market share. The management remains firm on tighter capital allocation strategy. With a focus on core business, prudent capital allocation policy and exiting loss-making subsidiaries, M&M’s multiples are likely to get re-rated. Hence, we retain a Buy rating on the stock.

Maruti Suzuki • MSL is witnessing strong recovery in sales volumes and is likely to have flat y-o-y sales volume growth in FY2021E, despite a 36.6% y-o-y decline in H1FY2021. The company has witnessed strong demand from rural and semi-urban areas, where MSL’s distribution network and product portfolio fits aptly. The improving income levels of individuals, firms and corporates after recovery from COVID-19 pandemic is likely to keep the demand strong in the medium term. We expect FY2022 to be a stronger quarter for MSL, driven by strong volume growth. We are positive on MSL given its near-term demand outlook, structural growth outlook, healthy cash flow generation, and return ratios. Hence, we retain our Buy recommendation on the stock.

Mayur Uniquoters • Mayur Uniquoters (MUL) is the largest manufacturer of artificial leather/ PVC vinyl, using the ‘Release Paper Transfer Coating Technology’ in India. Q3FY21 results were ahead of our expectations on the back of a sharp growth in automotive business and recovery witnessed in the footwear segment. Margins are expected to improve driven by backward integration, cost reductions and operating leverage benefits. Considering its strong performance in the current quarter and expectations that the margins would remain firm, we have raised our FY22E and FY23E earnings estimates by 9.5% and 15.7%, respectively. We expect MUL’s earnings to grow at a 22% CAGR, driven by an 18% CAGR (FY2021-23) in revenues and 120 bps expansion EBITDA margin. Hence, we retain our Buy rating on the stock.

Schaeffler • Schaeffler India Ltd (Schaeffler) manufactures ball, roller and wheel bearings (under the FAG brand), engine and transmission components (sold under INA brand) and clutch systems and dual mass flywheels (sold under brand LuK). It reported another strong quarter in Q4CY20, beating our earnings estimates by 17%, led by robust revenue growth and better-than-expected rise in EBITDA margins. Automotive OEM business would benefit from increased content per vehicle, while Industrial OEM business would benefit from wind and railway segment, aided by new product and customer additions. Schaeffler’s strong technological parentage and established relationship with global OEM clients would continue to provide growth opportunities. Schaeffler is a debt-free company with healthy return ratios. We recommend a Buy on the stock.

Sundram Fasteners • Sundram Fasteners Limited (SFL) is a global leader in manufacturing critical, high-precision components for automotive, infrastructure, windmill and aviation sectors and is one of the leading manufacturers of fasteners. Q3FY21 results beat estimates. Revenues recovered to Pre-COVID levels; SFL posted record high margins of 21.5% driven by price hikes, cost reductions and operating leverage benefits. With normalization of economic activities, we expect strong recovery in FY22. SFL is likely to witness increased share of business with clients driven by new product introductions, relatively low-cost advantage and stringent quality norms. Stock is attractively below its historical multiples. We recommend a Buy on the stock.

Suprajit Engineering • Q3FY21 results were strong, exceeding our estimates on all the key parameters. Revenues was higher by 9.8% from our estimates, while PAT was higher by 43%, mainly due to improved margins. We expect the company would continue to gain wallet share from customers in the cable segment (domestic PV segment and higher sourcing by global OEM) and Phoenix Lamps (increased sourcing by Osram) and enter new segments in the non-automotive cable division. We expect FY2022 to be a strong recovery year, driven by normalization of economic activity and improvement in demand. Operating leverage coupled with cost-control measures would help in margin improvement. We expect Suprajit’s consolidated earnings to grow robust by 40.8% in FY2022E and 23.4% in FY2023E. RoE is expected to improve from 13.7% in FY2021 to 18.0% in FY2023, while ROCE is expected to improve from 15.0% in FY2021 to 20.0% in FY2023. We recommend a Buy on the stock.

Tata Motors • We recommend a Buy rating on Tata Motors Limited (TAMO), considering resilient operational numbers in Q3FY21, robust FCF for JLR and standalone businesses led by all-round strong performance, falling debt and better earnings visibility. Q3FY2021 results saw a strong turnaround in operational performance in all three key automotive businesses - Jaguar Land Rover (JLR), passenger vehicles and commercial vehicles. We expect operational performance to continue in the medium term, with a recovery in all verticals of the automotive businesses. We expect TAMO’s earnings to get positive in FY2022E and 33.1% in FY2023E, driven by a 15.3% revenue CAGR during FY2021E-FY2023E and a 140-bps improvement in EBITDA margin. Valuations are attractive and below its historical average multiple. We recommend a Buy on the stock.

TVS Motor • Domestic two-wheeler demand improved, driven by strong rural sentiments and increased preference for personal transport. We expect TVSM to benefit from recovery in urban demand, swiftly led by gradual reopening of urban centres, new product launches, increasing share of premium bikes and beneficiary of its investments in EVs businesses. We have raised our earnings estimates by 9% for FY2023E to build in the impact of improved EBITDA margin in Q3FY21. We expect earnings to grow strongly by 55.9% and 17.6% in FY2022E and FY2023E, respectively, driven by 13.9% sales CAGR (FY2021E-FY2023E) and a 120 bps improvement in EBITDA margin. Valuations are attractive and trading below its historical average. We retain a Buy recommendation on the stock.

Agri/Specialty Chemicals

UPL • UPL is a global leader in agri-solutions and has a healthy mix of high-value crops and high-growth geographies. The company has manufacturing facilities in 48 locations (34 earlier) and operates in over 138 countries. Company is eyeing revenue growth of 6-8%, EBITDA growth of 10%-12%, and net debt-equity ratio of 2x during FY2021E. Long-term investors can consider accumulating the stock, owing to reasonable valuation and further strengthening of balance sheet led by deleveraging.

Coromandel International • We prefer and maintain a Buy on Coromandel International as it is the leader in key businesses, led by high backward integration for sourcing key raw materials and a strong distribution reach. The company is likely to speed up investments in the high-growth crop protection business, which is expected to enhance profitability. A good monsoon and MSP hike for Kharif and Rabi crop bode well for a healthy demand. We believe Coromandel would clock revenue and earnings CAGR of 10% and 18%, respectively, over FY2020-FY2023E. Moreover, a likely clearance of past subsidy dues given additional allocation of Rs. 65,000 crore for fertiliser subsidy by the government would reduce working capital and further strengthen its balance sheet.

PI Industries • PI Industries focuses on developing complex agri-chemical solutions. Demand remains encouraging in both domestic (normal monsoon) and export markets (order book of $1.5 billion). The company has offered guidance for an over 20% growth in each market. QIP funds would be deployed over 5-6 quarters to meet inorganic growth aspirations, which will aid diversification too. Moreover, export opportunities are expected to increase multifold, as global MNCs and innovators would consider partnering with Indian players over Chinese ones. We reiterate a Buy rating on the stock.

Insecticides (India) • Insecticides (India) is focused on launching 10 new products in FY2021 and is expanding capacities at its Rajasthan and Gujarat facilities, which is expected to drive strong earnings growth (owing to a low base in FY2021 due to COVID-19) and decent RoE of 15-16%. Moreover, the company has reduced its cash conversion cycle to 115 days (versus 184 days in FY2020) as it has adopted a cash and carry model, which has strengthened its balance sheet with cash and cash equivalents at Rs. 35 crore as of December 2020.

Atul Limited • Atul Limited has a healthy balance sheet and intends to continue ongoing expansion plans in a calibrated manner, be it in expanding capacities through new projects or debottlenecking capacities through internal accruals. Growth is likely to be driven by improved utilisation of enhanced capacities. Moreover, significant opportunities are expected to arise over the medium to long term, as global players shift their manufacturing and vendor bases outside China. A strong balance sheet provides ample scope to explore organic and inorganic growth opportunities.



Aarti Industries • Aarti is investing in the right areas for building capabilities and richer client engagements, which would create a long-term moat in a booming industry. It is expanding capacity for Nitro Chloro Benzene (NCB) by 33,000 mtpa at a capex of Rs. 150 crore in two phases that is expected to be operational by FY2021 and FY2022. Aarti Industries would also benefit from China substitute factor, rising domestic demand for specialty chemicals and potential for robust growth in pharma segment (commercialise ongoing APIs and intermediates in next 2-3 quarters). The management is also looking to demerge pharma business and list it separately that could help unlock value.

SRF Limited • SRF’s capex focused on the specialty chemical business (50-60% of the planned capex of Rs. 1,500-2,000 crore over the next three years would be spent in specialty chemicals), which would help boost this business’ share in the business mix and drive re-rating of SRF. A robust growth earnings growth outlook (expect a 23% PAT CAGR over FY2021E-FY202E), strong return ratio (RoE/RoCE of 20%/21%), and strong cash flows (to support growth plan) keep us constructive on SRF’s medium to long-term growth prospects.

Sudarshan Chemical • Sudarshan Chemical Industries Limited’s (SCIL’s) dominant market share (a 35% share in the Indian pigment market and the fourth largest player globally), de-focus of global players, consistent focus to augment capacity (capex plan of Rs. 585 crore over FY2020-FY202E), and a likely increase in share of high-margin products (new capex to focus on specialty chemicals) would help it steadily beat industry growth rates. Hence, we expect strong revenue/EBITDA/PAT CAGR of 19%/20%/25% over FY2021E-FY2023E along with a high RoE of 23%. SCIL is investing in the right areas for building capabilities and richer client engagements, which is expected to create a long-term moat in a booming industry.

Vinati Organics • Vinati Organics operates in niche segments and has an exceptional product basket with significant market share globally that boosts margins. Concerns on ATBS demand and margins are also expected to recede as strong global economic recovery has led to sharp rise in crude oil prices. We like Vinati Organics’ business (global market share of 65% each in IBB and ATBS), debt-free status and solid return profile (RoE/RoCE of 23%/30%).

Banks, Financial Services

Axis Bank • Axis Bank is the third-largest private sector bank, with a diversified loan book with strengths in the retail and corporate segments. An improved liability profile would keep margins healthy. Business restructuring along the lines of incremental lending to higher-rated corporate segments, focus on quality retail and mid-market groups will augment sustainability and profitability. COVID-19 poses challenges, but encouraging collections and lower-than-expected restructuring guidance indicate an improving outlook for credit growth and asset quality of the banking sector. We expect banks with strong balance sheets and capital position better placed to capitalize once the business environment normalises. Going forward, the bank’s strategic investment in insurance segment will add strategic value. The bank has a strong market position across most digital payment products.

Bajaj Finance • Bajaj Finance, a subsidiary of Bajaj Finserv, is a leading NBFC with well-diversified and strong asset quality. The company has assets across products consumer durable loans, two-wheeler and three-wheeler loans, SME loans, mortgage loans, and commercial loans. Strong loan growth, asset quality and provisioning set Bajaj Finance’s performance among the best in the system. However, in the medium term, COVID-19 poses challenges to credit growth and asset quality of NBFCs. We expect NBFCs with strong balance sheets and capital position likely to recover faster, once the business environment normalises.

Bajaj Finserv • Bajaj Finserv is a financial conglomerate with subsidiaries in the financing, life insurance, and general insurance segments. We expect its subsidiary, Bajaj Finance Limited (BFL), to continue with calibrated growth and sustainable profitability and margins (for the long term), which will be the key support for present valuations of Bajaj Finserv. Bajaj Allianz General Insurance Company (BAGIC) is expected to continue its healthy operating metrics and profitability going ahead. Similarly Bajaj Allianz Life Insurance Company (BALIC) is focusing on strengthening its distribution channel and protection business, but profitability will depend on pace and segment of new business growth. Though COVID-19 had impacted the economy, things are improving as lockdowns ease. Given a strong balance sheet of its subsidiaries, Bajaj Finserv is expected to tide over medium-term challenges.

Bank of Baroda • Bank of Baroda has over 9,400 branches in India and abroad with diversified products and services and strong client relationships. Business growth and profitability and asset-quality improvement is gradual but in the desired direction. Two other PSU banks have been merged with Bank of Baroda, which will add to its business reach and strength. Notwithstanding synergies that will accrue over the long run, we believe near-term challenges in terms of asset quality and integration issues of the merged entity may mute medium-term performance. Moreover, in the medium term, COVID-19 impact poses challenges for credit growth and asset quality of the banking sector, including Bank of Baroda.

Bank of India • Bank of India is one of the largest PSU banks in the country. The bank has a strong presence in Western and Eastern regions. The bank has over 5,100 branches and 5,800 ATMs across India. The government holds a ~89% stake in the bank. Operating performance and earnings have been affected by a sharp rise in non-performing assets (NPAs). However, going forward, credit is likely to gain traction as the bank has exited the prompt corrective action (PCA) framework. However, COVID-19 still poses medium-term challenges for credit growth and asset quality of the banking sector, including Bank of India. As several segments are stressed and credit demand is weak, we expect BOI’s credit growth and margins to be muted for the medium term.

Federal Bank • Federal Bank is among India’s better-performing old private-sector banks with a strong presence in South India, especially Kerala. We believe the bank is growing in a desirable direction and accompanying factors indicate sustainability and quality. We believe incremental loans to better-rated borrowers, fewer additions to stressed assets and high provision coverage are positives, but asset-quality performance will remain a key monitorable for the medium term. COVID-19 poses challenges, but encouraging collections and lower-than-expected restructuring guidance indicate a better outlook for credit growth and asset quality.

HDFC • HDFC Limited (HDFC) is among India’s top-performing housing finance companies with a deep retail presence. Despite a general slowdown in credit growth, HDFC’s advances continue to grow strongly with stable margins. Aided by a strong business franchise, best-in-class credit ratings, and impeccable asset quality, HDFC is a safe long-term bet with a scope for value creation led by steady business growth. Though COVID-19 posed challenges for credit growth and asset quality, the traction in the past few months has been encouraging. We expect NBFCs with a strong balance sheet and capital position likely to recover faster, once business environment normalises.

HDFC Bank • HDFC Bank is among India’s top-ranking lenders with a strong retail hold. Despite the general slowdown in credit growth, the bank continued to report better-than-industry growth in advances (mainly from retail products) and a strong retail liability base. Higher margins as compared to peers, a strong branch network and better asset quality make HDFC Bank a safe bet with scope for expansion in valuation multiples. COVID-19 poses challenges, but the encouraging collections and lower-than-expected restructuring guidance indicate an improving outlook for credit growth and asset quality of the banking sector

ICICI Bank • ICICI Bank is one of India’s top three private sector banks with over 5,200 branches. The bank has made inroads into the retail loan segment and has significantly improved its liability franchise. We believe the company’s strong capital adequacy and a wide branch network will help support business growth in the long run. The bank appears to be well-positioned to benefit from reduction in competitive intensity from NBFCs and other banks, which face challenges of their own. COVID-19 poses challenges, but encouraging collections and lower than expected restructuring guidance indicate an improving outlook for credit growth and asset quality.



LIC Housing • LIC Housing Finance is one of India’s largest mortgage financiers and is promoted by Life Insurance Corporation of India. With over 282 marketing offices, the company has one of the strongest distribution networks to support business expansion. Though falling interest rates and a strong parentage bode well for NBFCs, we believe increasing competitive pressures may keep NIM range bound in the near to medium term. Uncertainties in developer loans and weak economic conditions warrant caution due to asset-quality concerns. Recoveries in retail and developer book and loan growth momentum in the next few quarters would be key monitorables. In the medium term, COVID-19 poses challenges for credit growth and asset quality of the financial sector, including LIC Housing.

PNB • Punjab National Bank (PNB) has a strong liability mix in the banking space, with low-cost deposits constituting over 40% of its total deposits. PNB has done a significant amount of business and process enhancement/upgradation to mitigate operational and credit risks after the fraud, but so far asset-quality improvement has been subdued. Further development in resolution/recovery of NCLT exposures as well stress in the SME segment warrant a cautious approach. Risks of chunky slippages/haircuts are present in the near term. Moreover, in the medium term, COVID-19 impact poses challenges for credit growth and asset quality of the banking sector, including the bank, and will be a key monitorable.

SBI • State Bank of India (SBI) is India’s largest bank. The successful merger of associate banks and value unlocking from the insurance business could provide further upside. While the bank is favourably placed in terms of liability base and operating profit is better than peers, asset quality is also improving, aided by strong resolution/recoveries. A strong balance sheet, enviable reach and business strength make it a strong business franchise, which is well-placed to gain market share as well as quality clients in the medium to long term. However, in the medium term, pandemic may pose challenges for credit growth and asset quality. SBI’s status as the market maker in terms of domestic interest rates places it at an advantage to other PSU bank peers, providing a cushion to margins.

City Union Bank • CUBK is an old private sector bank focused on lending to MSME, retail/wholesale trade with a granular asset profile including providing short-term and long-term loans to the agricultural sector. The bank has ~90% of branches in South India of which ~70% are in Tamil Nadu and ~71% of business comes from the state. The bank’s gross loan book constitutes ~63% working capital loans. The post-COVID recovery trend is encouraging. Factors such as strong capitalisation and dependable liability franchise are positive factors for long term investors.

Kotak Mahindra Bank • We believe Kotak Mahindra Bank (KMB) is an attractive business franchise, with well-rounded products and services, shaping up well for the long term. Consistent performance across interest rate and asset cycles is a key differentiator and indicates the management’s quality and strength of the franchise. Its Subsidiaries are shaping up well and while at present, they are relatively small, we believe each one has strong business strengths and are well on way to significantly contribute value to the consolidated business in the long term. We find Kotak Mahindra Bank to be an attractive franchisee with a strong balance sheet, with pan-India reach and healthy capitalization which will help it tide over the medium term challenges.

L&T FINANCE HOLDING • L&TFH offers a range of financial products and services across rural, housing, and wholesale finance sectors. LTFH has been strategically re-aligning its business mix, focusing on businesses where it has a clear competitive advantage and opportunity to scale. Benefited by a strong parent firm and attractive credit ratings (AAA), the company works at competitive rates, which are key support to its margins. Moreover, LTFH focuses on diversification of borrowings mix with the addition of new sources of borrowings, which are key for sustainability. A well-capitalised balance sheet, stable ratings, and provision buffer indicate that LTFH is well-placed to ride over medium-term challenges.

Nippon Life India AMC • Nippon Life India AMC (NAM) has consistently stayed among the top-5 players. MF AUM has clocked a ~17% CAGR in the last 5 years. It has built a large distribution network despite not having a bank promoter. It has a strong foothold in B30 cities (~20% of AUM), which has helped the AMC garner and improve its retail share, which in turn makes the customer segment more granular. We believe a granular book is more sustainable and sticky as compared to HNI and institutional flows. While in the medium term, due to uncertainties on growth and market performance due to the pandemic, we believe AUM growth and business mix may be impacted. We believe the company is well placed to ride over medium-term challenges. The buyout and subsequent re-branding by the MNC owner has stabilised the company and will enable NAM to leverage the parent’s network to improve its AUM in the long term.

Spandana Sphoorty Financial Ltd

• SSFL is a leading, rural focused NBFC-MFI operating across 18 states as an NBFC since 2004 and NBFC-MFI since 2015. The company offers income-generation loans under the joint liability group model (JLG), mainly to women from low-income households in rural areas. The NBFC-MFI has successfully emerged stronger post the Andhra Pradesh MFI crisis with healthy margins and return ratios. The post-COVID recovery trend is encouraging. Factors such as strong capitalisation levels and a dependable liability franchise are positive factors for long term investors.

AU Small Finance Bank • AU Small Finance Bank (AUSFB) has transformed from a prominent, retail-focused nonbanking finance company (NBFC), which primarily served low and middle-income individuals and businesses with limited or no access to formal banking and finance channels. The bank aims to be a retail-focused, preferred trusted SFB offering integrated and tailored solutions. As of FY2020-end, AUSFB had a total AUM of Rs. 30,893 crore, spread across vehicle finance, SME, MSME, and other high-yielding products (including OD against FDs, gold loans, and personal loans etc). The bank operates over 686 branches, with 63% of these in rural and semi-urban areas. Rajasthan, Maharashtra, Madhya Pradesh, and Gujarat are the key geographies from where AUSFB sources 72% of its AUM and 68% of its total deposits.

Cholamandalam Investment Finance Company

• Cholamandalam Investment and Finance Company Limited (CIFC) is a leading vehicle financier expanding its presence into housing finance. Business benefits from a strong parentage and rigorous risk management practices provide long-term visibility, while healthy capitalisation and scope for improving operating leverage lends additional comfort. We believe while the vehicle finance business will continue to be the mainstay for the company, loan against property has also significantly contributed to growth and profitability. Home loans are the rising star and have a great potential to be built into a solid portfolio considering the company’s expertise in handling typical customer profiles. A robust collection mechanism and a strong credit risk assessment framework will help it steer through the strong currents of the COVID-19 pandemic in FY2021. CIFC is an attractive pick due to its demonstrated superior performance on multiple business parameters.

Repco Home Finance • Repco is an attractive housing finance company (HFC) with a niche loan book (salaried and professional class borrowers), stable asset quality, strong ratings and good return ratios. Its collection efficiency were at 93% in September. Easy liquidity and declining cost of funds that will shield NIMs from medium-term risks. The HFC is well-capitalised and has a strong business model. Despite fierce competition in the home loan market, Repco’s presence in the niche small-ticket, non-salaried home loan segment has helped it maintain attractive spreads as compared to peers as well as face lesser competition from banks, etc, who have found it difficult to penetrate this segment.

insurance

HDFC Life (HLIC) • HDFC Life offers a range of individual and group insurance solutions that meet various customer needs such as protection, pension, savings, investment, and health. HLIC continues to benefit from its increased presence across the country with over 400 branches and additional distribution touch points through several new tie-ups and partnerships, including own sister concern bank. The company also has 270 partnerships, comprising traditional partners such as NBFCs, MFIs and SFBs, and includes more than 40 new ecosystem partners. The company has a strong base of financial consultants as well.



ICICI Prudential Life Insurance

• ICICI Prudential Life Insurance (IPRU) is promoted by ICICI Bank and has consistently been the top private sector life insurance company in India on a Retail Weighted Received Premium (RWRP) basis. The company offers a wide array of protection and savings products. A strong brand image, pan-India bancassurance partnerships, strong metrics and diversifying business mix (focusing on more protection and retail business), IPRU is well placed on its growth trajectory for the long term. IPRU is well placed to capture and ride the strong growth potential that is present in the Indian life insurance industry.

ICICI Lombard General Insurance

• ICICI Lombard General Insurance (ILGI) is the fourth largest non-life insurer and the largest private-sector non-life insurer in India. The company offers a comprehensive and well-diversified range of products, including motor, crop, health, fire, personal accident, marine, engineering, and liability insurance. ILGI has over 250 offices and over 35,000 individual agents (including POS) and ~840 virtual offices. The company’s key distribution channels are direct sales, individual agents, corporate agents - banks, other corporate agents, brokers, MISPs and digital, through which it serves individual, corporate, and government customers. ILGI has demonstrated its strong underwriting, healthy solvency, and improving loss ratios, make it attractive for the long term.

Max Financial Services • Max Life Insurance is among the leading private sector insurers with the best operating parameters in the industry. MFS is effectively building an attractive insurance franchise with a multi-channel distribution network built upon a conservatively underwritten insurance business. The deal with Axis Bank will provide clarity to the bancassurance relationship and is a long-term positive. The management has reiterated its strategy to achieve a balanced product mix and focus on non-par savings with the protection segment, which will be margin-accretive. The pandemic had stressed the economy but things are improving. Given the strong balance sheet of its subsidiaries, companies such as Max Financial Services are expected to tide over medium-term challenges.

Consumer Goods

Asian Paints • Asian Paints Limited (APL) leads the domestic paint industry with a 55% market share. Unlike peers, APL has de-risked its business model, deriving more than 85% of revenue coming from domestic decorative paints. The company has a strong brand portfolio across the product pyramid. Q3FY2021 performance was strong and APL maintained double-digit volume growth and registered volume growth of 33% in the domestic decorative paints business. With a focus on becoming a complete home decor play, the company has introduced products in home lightings, furnishings, and furniture. The company’s sanitising service business ‘San Assure’ is getting good response and is helping the company to promote its paint business. Considering strong traction for its products, the waterproofing segment can contribute to revenue in the near to medium term. If the Coronavirus continues to ease further, management is confident of improvement in the decorative paints volume growth trajectory. APL’s leadership position in the domestic paints industry and better earnings visibility justify premium valuations. We maintain our Buy recommendation on the stock.

Britannia • Britannia is India’s largest domestic biscuit and snacking companies with a turnover of over Rs. 11,000 crore. Under a new leadership, the company has been able to leverage and monetise its strong brand and premium positioning in biscuits and snacks segments. Q3FY2021 performance was mixed with higher margin expansion led to a strong double-digit PAT despite mid single digit volume growth. The company expects strong growth momentum to sustain in the coming quarters with higher demand from in-house consumption, improvement in supply in key markets, market share gains from small players and a strong recovery in rural demand. Correction in raw material prices would drive up margins. Sustained product innovation, expanding distribution reach, entry into newer categories and focus on cost efficiency will help the company maintain steady earnings growth in the medium term. The stock’s recent underperformance provides a good entry opportunity from a long-term perspective with favourable risk reward ratio.

Colgate-Palmolive (India) • Colgate-Palmolive (India) is a leading multi-national consumer products company, focused on production and distribution of oral care and personal care products. Oral care contributes ~95% of turnover. Q3FY2021 was sequentially better with volume growth improving to 7% from low single digit in Q2. While discretionary categories saw a recovery in sales, toothbrushes gained good traction in the domestic market. New launches in the Naturals space and Palmolive brand, including hand washes and hand sanitisers saw strong demand in the domestic market. Improving dental habits (in urban and rural India), strong traction in Naturals category and sensitive toothpaste and other new launches will be some of the key revenue drivers in the near term. With gross margins expected to remain high, we expect OPM to remain high in the coming quarters (also supported by efficiencies). We recommend a Buy rating on the stock.

Dabur India • Dabur is one of India’s leading FMCG companies with revenue of over Rs. 8,500 crore. The company operates in categories like hair care, oral care, health care and skin care based on Ayurveda. (Dabur) posted healthy performance in Q3FY2021 with domestic volumes growing by ~18%, much better than ours as well as the street’s expectation. As expected, categories such as healthcare, OTC and ethicals, oral care and skin-care (together constituting 59% of total revenues) clocked strong double-digit revenue growth. We expect categories such as Chyawanprash, honey and ethical products to achieve a large scale in the near to medium term. The foods business is expected to post a sequential recovery with out-of-home consumption expected to gain momentum in the coming quarters as the lockdown has been eased. Strong traction in healthcare products, market share gains in oral care category, faster recovery in juices category due to higher in-house consumption and a strong recovery in rural demand are some key catalysts for near-term growth. We recommend a Buy on the stock.

Emami • Emami is one of the largest domestic FMCG players with a strong presence in underpenetrated categories such as cooling oil, antiseptic creams, balm, and men’s fairness creams. Q3FY2021 results beat ours as well as street’s expectations with revenue and PAT growing by 15% and 29%, respectively. The management is confident of achieving double-digit volume growth with margin expansion in Q4. Further, a recovery in rural India (~55% of domestic sales) is supporting domestic business. Benign menthe oil prices, reduction in advertisement cost, and stringent cost management would help margins keep rising in the coming quarters. The group’s exit from non-core businesses has helped promoters reduce pledged share significantly from 95% earlier to 36% currently and plans to reduce it to zero over the next 8-10 months. We maintain a Buy rating on the stock.

GCPL • GCPL has a ‘3 X 3’ approach to international expansion by building presence in ‘three’ emerging markets (Asia, Africa and Latin America) across ‘three’ categories (home care, personal wash and hair care products). The company has a leadership position in most categories in the domestic and international markets. Market share gains in HI category (both in India and Indonesia); sustained innovation (hygiene products gaining good traction), cross-pollination (plans to scale up the launch HI products in Africa soon) and expansion in distribution network are some key growth levers for GCPL in medium to long term. Reduction in debt augurs well for the company as it provides an opportunity to scout for inorganic initiatives in focus markets. Revenues and PAT are expected to clock a CAGR of 10% and 17% respectively over FY2020-23E.

HUL • A strong product portfolio, wide distribution reach and sturdy balance sheet make HUL an evergreen pick in the FMCG space. 80% of essential portfolio grew by 10%, discretionary recovered to almost 100% in Q3. Rural India continues to grow in double digits. Gross margins to remain under pressure led by higher input prices. However, judicious price hikes in key SKUs (soaps and tea) and a better revenue mix would ease pressure on gross margins in the coming quarters. HUL’s management is optimistic about better growth in the coming quarters because of improving demand environment, gaining market share in key categories, and new products gaining good traction. Rural demand outpacing urban demand, improving growth prospects for health food drinks, and an expected recovery in discretionary categories remain key growth drivers in the near term. We expect HUL’s revenue and PAT to register a CAGR of 13% and 21% over FY2020-FY2023 (including the acquired business of GSK Consumers).



ITC • With the government not hiking tax on cigarettes, we don’t expect a significant price increase in portfolio in the coming months which will support volumes. The non-cigarette FMCG business revenue growth was also boosted by opportunistic scale-up in sanitisers, Atta, hand wash, ready-to-cook food and disinfectant sprays/surface cleaners. However, growth in some categories would normalise in the post-COVID era. We expect cigarette sales volume to improve substantially in FY2022. Higher margins would sustain due to a robust brand portfolio, higher operating leverage, product innovation and supply chain efficiencies. The hotels business will remain a laggard in FY2021 and recover strongly in FY2022. ITC trades at a stark discount to some large peers. With a favourable risk-reward ratio, we maintain a Buy rating on the stock.

Jyothy Labs • Jyothy Labs (JLL) has a leadership position in the fabric whitener segment in India, whereas it is the second-largest player in the dishwash bar, liquid, and mosquito repellent coil categories. Going forward, long-term strategies to enhance growth include winning through innovations in the fabric wash segment, leveraging rural penetration in the dishwash segment, increasing footprint, and relevant extensions in the household insecticide HI and personal care segments. A large presence in the essentials and hygiene segment will help JLL drive near-term growth in the pandemic situation. A resurgence in the HI segment will drive growth in the medium term.

Marico • Marico is a leading player in the domestic hair and wellness market with a leadership position in categories such as branded hair oil (~62% market share), value-added hair oil (~36% market share), and branded edible oil (~77% market share). The company has a three-pronged strategy of driving growth through key categories, innovations/entrance into the niche category and scaling up its presence in international geographies. Gaining market share in the core domestic portfolio through new launches, scaling up the food business, and improving growth prospects in countries such as Bangladesh and Vietnam are some key growth levers for Marico in the near to medium term. Raw material headwinds will be mitigated by judicious cost-saving measures and careful price hikes in the near future.

Nestle India • Nestle India Limited (Nestle) is India’s largest foods company with a wide presence in categories such as milk & milk powders, instant noodles, instant coffee, and infant cereals. The company’s prominent brands include Maggi, Nescafe, KitKat, and Cerelac. Nestle also leads in seven of the eight categories it is present in and in 85% of its domestic product portfolio. A strong position in key categories can be attributed to sustained product/variant launches under existing brands, wider distribution reach, adequate brand-building and promotional activities. Nestle maintained its thrust on achieving double-digit revenue growth by penetrating deep in rural markets (covered 89,288 villages), innovation (that contributes 4.3% of sales) and accelerating footprint through new channels.

Tata Consumer Products • Tata Consumer Products Limited (TCPL) is one of India’s largest consumer goods companies with a strong presence in branded tea, salt, water and other staples. Integration of Tata Chemicals’ consumer goods will bring a lot of synergy benefits such as a combined distribution network catering to over 200 million households, diversification into multiple product categories, robust innovation and sustained revenue and cost synergies, which will help drive sustainable growth in the long run. Tata Consumer Products’ expanded product portfolio (post merger of Tata Chemicals’ consumer business), rising trend of in-house consumption in domestic and international markets and an expanding distribution reach helped company post a strong operating performance in Q3FY2021. Market share gains in branded tea and salt segment, doubling of distribution reach, sustained higher in-house consumption and consistent product launches would be key growth levers for domestic business. Increasing conversion from non-black tea to specialty tea would also drive growth in the international tea business. Scale-up of NourishCo, sustained double-digit growth in Tata Coffee and sequential improvement in out-of-home consumption will continue to add to revenues in the near to medium term. The company aims to complete integration process before the scheduled time and reap large margin benefits of 200-300 bps over the next 2-3 years. We maintain a Buy recommendation on the stock.

Zydus Wellness • Zydus Wellness Limited (ZWL) now has a product portfolio of brands such as EverYuth, Nutralite, and Sugar Free along with Glucon D and Complan after the acquisition of Heinz India. ZWL has a strong portfolio of leading brands, which are largely placed in low-penetrated categories. The company has identified three growth pillars from a medium to long-term perspective - 1) Driving synergistic benefits from Heinz acquisition, 2) new products and 3) wider international footprint. Though FY2021 will be affected by COVID-19, a strong recovery is anticipated in FY2022. Except for palm oil, prices of other inputs have stayed benign in the past few months. This would reduce pressure on margins in coming quarters. However, the company’s medium target is to achieve an OPM of ~20%. Stable working capital cycle and strong cash-generation ability would help ZWL. In view of discounted valuations to peers, a stable balance sheet, negative working capital cycle and a strong brand portfolio, we maintain a Buy rating on the stock.

IT/IT services

Birlasoft • Birlasoft Limited (Birlasoft) has strong enterprise solutions capabilities and digital competencies, which would help it to capture opportunities in the enterprise digital space. The management remains confident on delivering double-digit growth in FY2022 led by higher contribution of annuity revenue, healthy deal pipeline, consistent deal wins and higher spends on transformational initiatives. Management believes that deal TCVs would improve in Q4FY2021 on the back of a healthy deal pipeline and kicking in of new budget from clients. The company’s recent go-to-market (GTM) partnership with Microsoft and SAP and a strong presence in ERP segment would aid company’s growth going forward. Focus on deepening relationship with existing large accounts, a vertical sales structure, and defined incentives of cross-sell/up-sell are expected to drive up revenues going ahead.

HCL Tech • HCL Technologies (HCL Tech) leads the infrastructure management services (IMS) and engineering and research and development (ERD) segments. Company has raised Q4FY2021E CC revenue growth guidance to 2-3% from 1.5-2.5%. Given HCL Tech’s capabilities in digital space, consistent deal wins, improving digital capabilities and increasing spends on transformation initiatives, HCL Tech would return to industry-level growth trajectory in the coming years. FY2022 revenue growth would be driven by emergence of new business models, higher digital adoption, strong deal pipeline and deep client relationships. Strength in cloud infrastructure and capabilities in automation and security services would help the company to drive clients’ digital transformation journey.

Infosys • Infosys is a premier IT and ITeS company that provides business consulting, technology, engineering, and outsourcing services. Infosys raised revenue growth guidance to 4.5-5% in CC terms from 2-3% earlier and also raised its OPM guidance to 24-24.5% from 23-24% for FY2021. Infosys has signed 22 large deals in Q3FY2021, with TCVs of $7,129 million (versus $3,145 million /$1,813 million in Q2FY2021/Q3FY2020) and its share of new deals was 73%. Hence, We expect Infosys would deliver industry-leading numbers in FY2022E/FY2023E, led by continued large deal wins, enhanced digital capabilities (aided by organic investments, acquisitions and partnerships) and strong execution.

Intellect Design • Intellect Design Arena Limited (Intellect Design) is one of the global leaders in financial technology because of its wide spectrum of products for banking, financial services, and insurance. With significant investments in R&D, the company has created a portfolio of ~12 products across its four lines of business units to de-risk its portfolio, enhance chance of winning more deals and increasing deal sizes. Management aspires to achieve 30% EBITDA margin over the next four quarters on the back of revenue growth, sharp focus on cost optimisation, favourable revenue mix, and lower R&D expenses. We believe the company would continue to deliver strong revenue and earnings CAGR of 14% and 27% over FY2021-23E, led by strong deals win momentum, robust order bookings, healthy deal pipeline, increasing average value of license component in a contract, and sustained traction in the iGCB business.



L&T Infotech • Larsen & Toubro Infotech (LTI) is India’s sixth largest IT services company in India in terms of export revenue. Management cited that company would surpass its Q3FY2021 revenue in Q4FY2021 and expect a high-single digit revenue growth in FY2021. Further, the management remains confident on delivering top quartile revenue growth in the industry in FY2022E. Notably, the company added 22 new logos across verticals and won two large deal (with TCVs of over $278 million). Management stated that the quality of conversation with the clients indicate a meaningful increase in spends in the transformation initiatives. We expect LTI’s revenue to grow at 16% CAGR over FY2021-23E with a stable margin. Factors such as strong execution capabilities, dynamic sales team, accelerating revenue contribution from its digital business, leverage of domain experience, solid top account mining and healthy deal wins have helped LTI outpace average industry growth rate.

L&T Technology Services • L&T Technology Services (LTTS) is the third-largest engineering services provider (ESP) in India and is well-diversified to capture digital engineering spending across verticals. Digital engineering spend is expected to clock a 19% CAGR to $1.1 trillion by 2025, which would account for 53% of overall ERD spends. Deal wins were strong with seven deals with a TCV of over $10 million, which includes the $100-million+deal and two $15-million+ deals. Management expects a revenue decline of 6.5% from a 7-8% decline earlier in USD revenues in FY2021, translating into a 3.3% q-o-q growth for the Q4FY2021. We believe LTTS is well-poised to deliver strong multi-year growth, led by leadership depth, broad client portfolio, multi-domain expertise and under-penetrated ERD outsourcing market.

Mastek Limited • Mastek has created a consistent and predictable revenue stream from UK’s public sector over the past few years, thanks to introduction of Digital Outcomes and Specialists (DoS) framework by the UK government. The Brexit and COVID-19 pandemic have increased digital transformation spends of the UK government, which have been helping Mastek to enhance existing logos and acquire new ones. Further, growth momentum in the Evosys business would continue on the back of large opportunities in the cloud-migration space, strong order booking, and dedicated sales team to migrate customers from SAP to Oracle Cloud. Management remains confident on delivering strong growth in UK public segment in coming quarters as it focuses on deepening existing relationships and widening the customer base by adding new logos.

Persistent Systems • Persistent Systems Limited (PSL) has proven expertise and a strong presence in newer technologies, strength to improve its IP base and a decent margin profile, all of which set it apart from other mid-cap IT companies. With a new management, the company has been performing strongly especially in the technology services segment by winning new deals. We believe that TSU segment would continue to grow led by strong deal wins, a robust deal pipeline and higher adoption of new-age technologies. Alliance business is expected to improve in FY2022E as expansion of relationship with IBM and cross-selling opportunities. We expect USD revenue/earnings to clock a CAGR of 14/22% over FY2021-FY23E, led by strong deal wins, cross-selling opportunities and margin expansion.

TCS • Tata Consultancy Services (TCS) is India’s the largest IT services firm. Q3FY21 was the second consecutive quarter of strong all-round performance, led by robust demand, market share gains and deal ramp-ups. TCS’ management indicated that cloud transformation is a multi-year opportunity and remains confident of delivering double-digit revenue growth in FY2022E. Given its deep domain expertise, contextual knowledge and ability to stitch together large multi-service deals delivered on the outcome pricing model, TCS is well-positioned to benefit from the acceleration of overall technology spends across the globe.

Tata Elxsi • Tata Elxsi is an integrated engineering services company with a strong expertise in the automotive and broadcast and communication verticals. The company is expected to be one of the prime beneficiaries from the strong recovery in auto segment, pick-up in deals in the ERD segment and rising adoption of digital engineering across industries. Digital engineering spends of enterprises is projected to clock a 19% CAGR in 2019-2025E, which is expected to create strong growth prospects for TEL given its offerings across verticals and markets. Management believes that strong growth momentum would continue in Q4FY2021 because of strong deal pipeline, strong deal wins, green shoots in the auto sub-segment, and traction in media and medical devices verticals. We continue to prefer TEL, given its advanced technological capabilities, strong execution, long-term relationships with clients, and a strong parentage.

Tech Mahindra • Tech Mahindra (Tech M) has successfully transformed itself from a telecom-focused player to one that offers a wide portfolio of differentiated offerings in the enterprise segment over the last decade. The company has improved its position in the enterprise business because of a calibrated approach with respect to acquisitions (in terms of deal size, digital capabilities and vertical exposure), better go-to-market strategy, and smart deal structuring. Given robust pipeline ($4.5 billion), net new deal TCVs are expected to accelerate in the coming quarters. With higher spends on digital transformation by enterprises, modernisation of networks by service providers, and 5G in enterprise, we believe TechM is well positioned to report strong revenue growth over the next couple of years.

Wipro • Wipro is among India’s top five IT companies Wipro provided marginally better-than-expected revenue growth guidance of 1.5-3.5% q-o-q for Q4FY2021. It closed 12 deals with $30 million+ TCVs in Q3FY2021, in FY2022E and FY2023E from its historical levels. EBIT margin could be sustainable in the medium-term despite investments on sales and taking total TCVs to over $1.2 billion. Wipro would acquire Capco, a management consulting services and digital transformation solutions provider in the BFSI space, in a $1.45 billion all-cash deal. Deal would help Wipro boost its presence in BFSI segment, enhance capabilities, acquire talents and new clients and also win large transformational deals. Given acceleration in spending on cloud and cloud-related technologies, Capco acquisition & significant external hires, we believe growth trajectory of Wipro would improve to industry-matching level in FY2022.

Capital Goods/Power

Polycab India • Polycab leads the wires and cables (W&C) space with a product portfolio and distribution reach and accelerated growth in the FMEG space, which augurs well for growth visibility. Polycab, being the market leader in wires and cables (W&C) segment, remains the major beneficiaries to reap benefit from a pick-up in real estate demand and a revival in government spends in power, infrastructure, railways and housing. Increasing market share of organised players, which grew from 61% in FY2014 to 66% in FY2018, is expected to touch 74% in FY2023E, which augurs well for the industry leader. On the FMEG front the company remains focused with its diverse product basket wherein the addressable market opportunity is huge for the company. It is witnessing a bounceback in domestic markets with improving business environment. The company expects H2FY2021 to be better than H1FY2021. The company is on a healthy growth trajectory owing to its leadership position and a strong product portfolio both in wires and cables and FMEG businesses along with strong distribution and in-house manufacturing capabilities. Hence, we recommend a Buy on the stock.

Bharat Electronics • Bharat Electronics Limited (BEL) is a defence PSU, with strong manufacturing and R&D capabilities, good cost-control measures, growing indigenisation, and a strong balance sheet with improving return ratios. The company stands to benefit from enhanced budgetary outlay for strengthening and modernising India’s security and is well-positioned to capture incremental spends by the government on defence through the Make-in-India initiative. Based on a healthy pipeline, the management is confident of achieving an order inflow of Rs. 15,000 crore (order intake for 9MFY21 remains healthy at Rs 9879 crore) for FY2021E. On the export front, BEL has expanded its global footprint with current order book of $200 million and management had earlier indicated that it expects the order book to increase to $500 million over three years. The order book remains healthy at Rs 54791 crore (3.9x its TTM revenue) providing sustainable revenue visibility backed with strong execution capabilities (running at 100% capacity). We believe BEL is well positioned to benefit from the rising defence expenditure, supported by a strong manufacturing base, execution track record, and continued focus on in-house R&D capabilities. The stock is trading at reasonable valuations and with improving growth visibility, we retain our Buy rating on the stock.



CESC • CESC is a fully integrated power utility company that has stable earnings contribution from standalone operations with regulated power generation and distribution businesses getting assured RoE of 15.5% on generation assets and 16.5% for distribution assets. Turnaround of subsidiaries makes CESC an attractive investment proposition. A regulated business model provides earnings visibility and valuation is also attractive at 0.7x FY2023E P/BV besides a healthy dividend yield of 3-4%.

Coal India • The government’s plans to increase coal production to substitute imports (at more than 200 million tonnes) would help CIL register sustainable volume growth over the next couple of years. Moreover, cost-control initiatives such as reduction of manpower (employee costs accounts for 53-54% of overall cost) would cushion margins. Recent sharp improvement in coal offtake resumption of e-auction premium bodes well for earnings recovery in H2FY2021. Valuations are at a steep discount to historical averages and the stock also offers healthy dividend yield.

NTPC • NTPC is expected to commercialise new capacities of 5-6 GW annually over the next three years and expects a 15% CAGR in regulated equity base over the same period on which it earns regulated RoE of 15.5%. Moreover, with improvement in PAF of coal-based power plants, the company’s fixed cost under-recoveries are expected to remain negligible in the near term. We derive comfort from NTPC’s risk-averse regulated business model, which provides earnings visibility. NTPC is trading at an attractive valuation and offers a healthy dividend yield.

Power Grid Corporation • Power Grid is expected to maintain its strong growth momentum, given ~Rs. 41,000 crore (including CWIP) worth of projects pending for capitalisation, which provides healthy earnings growth visibility over the next few years. The company has provided strong FY2021E capitalisation guidance of Rs. 20,000-25,000 crore. Power Grid has a healthy RoE of 18-19% and trades at an attractive valuation.

Dixon Technologies • Dixon is a leading manufacturer of products for key consumer durable brands in India and going ahead, local manufacturing is expected to get a boost given the strong demand in the consumer electronics market in India. Dixon stands to benefit in the electronic outsourcing business with a leadership position in key business segments. The company’s Tirupati facility is expected to add a new dimension to growth prospects as it will foray into new business verticals, expand the product portfolio of its existing business verticals, and penetrate further into South India by forging an alliance with original equipment manufacturers (OEMs) and add them as clients. The expanded capacity in consumer electronics and home appliance coupled with a PLI scheme in mobile phones is likely to drive revenue growth momentum, while margin may expand due to economies of scale and automation in lighting. The company also generates higher return ratios as it operates on an asset-light model and has an efficient working capital cycle. Hence, we retain a Buy on the stock.

KEI Industries • KEI Industries (KEI) is among the top three organised players in the Indian wires and cables industry and an EPC player in the power T&D segment. Over the years, the company has established its presence in the institutional space by developing the ability to offer various products across locations. KEI has a well-entrenched marketing presence across all states, which increases its ability to deliver products speedily from plants in North and West India. The company has created a presence in building specialized offerings to tap niche segments such as the shipping sector, oil and petroleum plants, etc. They are now looking at tapping several large realty brands and strengthening all- India presence by embarking on opening new warehouses across India. On the back of a growing dealer network and brand building initiatives (advertising, sponsoring), performance-linked schemes and dealer-electrician meets etc, we expect KEI to increase their retail presence further. Government initiatives such as ‘Housing for All by 2022’, affordable housing under ‘Pradhan Mantri Awas Yojana, etc, could boost growth in HW and LT cables segments. KEI’s diversified user industries, increased sales of high-margin EHV cables, higher export sales and improving traction on exports and low base of the wires business helped combat a weak macro environment with good growth prospects in FY2022. Hence, we retain a Buy on the stock

Ratnamani Metals • Ratnamani Metals and Tubes Limited (RMTL) has guided for revenue of Rs. 2,000-2,300 crore and margin (including other income) of 16-18% in FY2021E. Though FY2021E would be weak, we expect revenue growth to recover sharply in FY2022E, led by a pick-up in order inflows, and higher government spending on infrastructure schemes. The new stainless steel plant would enable the company to manufacture import substitute products, which would provide business visibility with entry into new areas in export markets. We remain Positive on RMTL, led by a strong balance sheet and ability to generate superior return ratios despite capacity expansions.

Cummins India • Cummins India is the largest standby genset player in India with leading market share in medium and large genset categories. The company has a strong technology/innovation track record, well supported by its parent, which helps it stay ahead of peers across changes in emission norms. While the recent drop in demand both domestic and exports market has posed near-term challenges reflecting in recent earnings downgrades and valuation de-rating, we believe that the stock offers favourable risk-reward for long-term investors, given vast product offerings, management’s focus on efficiency/cost, and a healthy potential scale from a pick-up in the domestic infrastructure and global market. Considering a revival in its net earnings growth trajectory over FY2021E-FY2023E, strong balance sheet and steady cash flow generation, we remain constructive on the company and retain Buy on the stock

Finolex Cables • Finolex Cables is set to benefit from improving demand for cables. The company is leveraging its brand strength to build a high-margin consumer product business. The government’s focus on Housing for All by FY2022 is expected to drive demand for housing wires, slowdown in housing demand continues to affect performance of the electrical cables segment — 65% of the company’s total revenue constitutes housing wires. Further, ongoing government programmes such as Bharat Net Phase II are expected to improve broadband connectivity and related technologies will continue to drive growth for communication cables but due to the recent pandemic and government resources more routed towards the there might be delays in tendering for the same. The stock is trading at a reasonable valuation and with improving growth visibility we have a Buy rating on stock

Kalpataru Power • Kalpataru Power Transmission Limited (KPTL) is a leading EPC player in the power T&D space in India. Opportunities in this space are likely to grow significantly, thereby providing healthy growth visibility. Order book remains healthy. In the wake of the COVID-19 led lockdowns, the management expects FY2021 standalone revenue to grow between 5-10% y-o-y and aims for Rs. 9,000-10,000 crore order inflows for FY2021 in railways, international T&D and oil and gas segments. The management expects sales of BOOT assets by FY2021 and is in talks with prospective buyers. Further, the management expects to be net debt-free on standalone by FY2021. Tendering pipeline remains healthy in railways, oil and gas in domestic markets and T&D tenders in international markets. The management remains confident of delivering a good performance in FY2021 despite challenges as most projects are operational now. We expect FY2021 to be better for KPTL in terms of order intake, improving prospects for asset divestments, which will further deleverage the balance sheet. Hence, we maintain our Buy rating on the stock.

KEC • KEC International operates in the T&D, cables, railways, water, renewable (solar energy), and civil works verticals. It is a leader in power transmission EPC projects and has more than seven decades of experience. Over the years, it has grown through the organic as well as inorganic route. The opportunity size remains high in the non-T&D segment to help company ramp-up its total order outstanding for the business. KEC’s order book remains strong, providing strong revenue visibility and order inflow visibility remains healthy in international T&D and railways segments. After the unlocking after the pandemic, ordering activity is gradually gaining momentum with tendering visibility remaining healthy in railways, international T&D, and civil, with the company having bided for Rs. 30,000-35,000 crore projects. In the railways segment, order momentum, which was slow, has gradually picked up and bids are expected to be awarded soon. Tendering pipeline remains healthy wherein KEC has quoted roughly of about Rs. 30,000 crore for projects in the last few months and will be quoting another Rs 25,000 crore worth of projects in next two months. In the railways and civil segment, execution is happening at a fast pace, while the order pipeline remains healthy. The company has a healthy L1 position. The management highlighted that it has been focusing on mechanisation and digitalisation, which is expected to help in cost optimisation and support margins in the long run. Given the healthy order backlog, order inflow visibility and KEC’s ability to ramp-up execution, we maintain our Buy rating on the stock



Thermax • Thermax provides solutions in the energy and environment space and benefits from the continuous rise in India Inc’s capex. Thermax reported mixed performance for Q3FY2021 led by muted revenues along with strong operational performance led by cost rationalization and higher gross margins. Order inflow remained muted during the quarter with Q3 order intake at Rs. 1565 crore (down 2.6% y-o-y). Lower execution during the same period helped in lower depletion of the exit order backlog where in order backlog marginally declined by 4.2% y-o-y at Rs. 5,208 crore. Weak international order inflows and limited visibility for big-ticket size domestic orders provides lower order inflows visibility for FY2021 compared to FY2020. In projects, enquires were witnessed from core sectors, primarily the metals, cement and power generation. However, the management indicated that overall pipeline is not large as of now and on similar lines as last year. The management highlighted that there is broad based recovery with momentum seen across food & beverage to cement and steel and expects opportunities in the same going ahead although not sure of timelines. We have revised our estimates upward, factoring higher margins during Q3FY2021 and we are moderately increasing the P/E of Thermax to factor overall sector rerating. We now revalue the stock at 39x FY2023E earnings which is close to top end of the five-year average P/E multiple. Given the stock has already run up despite mixed number in Q3. However, improving tailwind in the sector can surprise earning, execution and order intake going forward. As we maintain our hold recommendation on the stock due to limited upside with a revised price target.

Triveni Turbines • Triveni Turbines Limited (TTL) is a market leader in 0-30 MW steam turbine segment. It has a strong aftermarket segment and overseas business, while the domestic market is showing distinct signs of pickup. The company has also formed a JV with GE for steam turbines of the 30-100 MW range, which is likely to grow in the ensuing years. TTL is virtually debt-free with a limited capex requirement and an efficient working capital cycle, reflected in very healthy return ratios. The business is bouncing back to normalcy after the end of lockdowns and the management indicated that enquiry levels remained healthy both in domestic and exports market. Newer opportunities in the oil and gas segment are gaining momentum and company has qualified from large number of customers. Further, the company is also seeing opportunities in combined cycle (uses to make power from gas) orders in the 30 MW category. Overall the situation is improving on the enquiry front with opportunities in the refurbishments and aftermarkets. A strong margin profile, lean working capital, healthy cash flows and balance sheet and long-term growth prospects (~diversification in new types of turbines) along with healthy enquiry pipeline both in domestic and exports provides confidence. The order book remains healthy, providing 1.0x TTM consolidated revenues visibility. The management has largely maintained its earlier stance the company is likely to see a decline in revenue by 10% to 15%, margins in the range of 20-22%. However, management expects better revenues with big order deliveries during FY2022 and easing of travelling restrictions should further help company negotiate deals and bag export orders. A strong margin profile, lean working capital, healthy cash flows, robust balance sheet and long-term growth prospects (~diversification in new types of turbines) will support valuations. Considering improving business environment and valuation comfortable we maintain by on the stock

V-Guard • V-Guard Industries is an established brand in the electrical and household goods space, particularly in South India. Over the years, the company has successfully ramped up its operations and network to become a multi-product company. Over the years, it has V-Guard Industries is an established brand in the electrical and household goods space, particularly in South India. Over the years, the company has successfully ramped up its operations and network to become a multi-product company. Over the years, it has successfully ramped up its operations and network to become a multi-product company. The company is aggressively expanding in non-south markets and is particularly focusing on tier-II and III cities, where there is lot of pent-up demand for its products puts company in good stead with its competitors. The management highlighted that demand drivers remain healthy and it has seen improvement as smaller players are not back to their full operation which is leading to higher share of business coming to larger players. Secondly, a revival in construction activities has broad based improvement in products related to construction/housing. The company focuses on 1) evolving category mix and product mix, 2) go to market with focus on e-commerce and modern trade, 3) distribution enhancement in smaller town and rural along with increase in non-south region and 4) in-organic expansion will generate growth for the company. V Guard has managed to resolve its supply chain issues and channel inventory is at healthy level. Overall, the management is focusing on maintaining healthy cash position, cost rationalization and expediting digitisation. The company’s strong balance sheet, cash flows, and reputed brand along with robust business fundamentals will help it emerge stronger from the near-term weak environment. Hence, we maintain a Buy on the stock.

Honeywell Automation India • Honeywell Automation India Limited (Honeywell), a step down subsidiary of Honeywell International (a diversified technology and manufacturing company) is a leader in providing integrated automation and software solutions, including process solutions and building solutions. The company has positioned itself across various industries diversifying sector-specific risks and largely shielding itself from economic downturn. The company’s focus on development of new products and services, venturing into new industries apart from core industries and addressing the growing mass mid-market is expected to maintain its healthy earnings growth trend. The company’s asset-light model, strong cash position, strong cash flow generation, healthy return ratios, consistent dividend paying record are some of its salient features. Considering its strong business fundamentals. Hence, we recommend Buy on the stock.

Amber Enterprises • Amber Enterprises has a market leadership position in the OEM/ODM segment for branded room ACs. Also, the opportunity size seems to be increasing at the OEM players are now more focused on innovation and marketing side of the business and relying on outsourcing for manufacturing of their products. We believe that enormous growth opportunities would come across going forward owing to global players shifting manufacturing base outside China and Government of India to enhance manufacturing through Make in India initiative by providing incentives. Healthy demand outlook for the electronic outsourcing industry and enhanced capacity, increased product offerings and customer penetration is likely to drive company’s performance. The company also remains one of the key beneficiaries of import ban on ACs with refrigerants and the likely expansion of PLI schemes for ACs and components. We expect Amber to clock a 33%/61%/113% CAGR in Revenue/EBITDA/PAT over FY2021E-FY2023E led by enhanced capacity, increased product offerings and customer penetration coupled with healthy demand outlook for the electronic outsourcing industry. Hence, we recommend Buy on the stock..

Carborundum Universal • Carborundum Universal (CUMI) manufactures a wide range of abrasives (bonded, coated, and super abrasives), ceramics (wear resistance, lined equipment, engineered ceramics, and metallised ceramics), refractories (fired products and monolithics), and electrominerals (silicon carbide, alumina, and zirconia). CUMI is expected to benefit from early economic cycle recovery in the domestic market along with improvement in overseas operations. The company’s ceramics and electro mineral verticals are expected to maintain their high revenue growth trajectory during FY2021-FY2023E. Further, abrasives revenue is expected to revive from low base in FY2020. CUMI’s cost-competitive position in electrominerals being the largest and lowest cost producer domestically and marginal difference with China is expected to benefit in terms of being a domestic and overseas supplier (countries looking to reduce dependence on China). Overall the business is looking up with better-than-anticipated pickup in economic recovery and manufacturing activity. CUMI’s growth momentum is expected to sustain, given improvement in domestic economic activity and a strong product line-up for overseas operations. The company’s capacity expansion, new product introduction, end-user demand, and geographic diversification are expected to revive its earnings growth trajectory from FY2022along with sustained healthy overseas operations. Hence we recommend a Buy on the stock.

Infrastructure

Ashoka Buildcon • Ashoka is a leading EPC company with over four decades of experience. Apart from road EPC, the other business verticals include roads BOT (Annuity/hybrid annuity), power distribution and city gas distribution. We believe massive infrastructure investment particularly in roads and railways provide opportunity for strong order inflows for Ashoka, considering its presence in the road, railways and power segments. Ashoka provides a unique opportunity to play on the road construction sector (both as a developer and EPC player). Further, with revival in its order book and expected divestment of ACL’s road assets, we have a Buy rating on the stock.



KNR Constructions • KNR is one of the best managed road construction companies with more than two decades of experience executing over 6,000 lane km road projects across 12 states in India. KNR has in-house construction capabilities, which ensure on-schedule project completion (history of receiving early completion bonuses). KNR entered into a complete stake sale agreement with Cube Highways for four of its hybrid annuity projects, which will lower equity requirement along with booking of EPC work with possibility of receiving an early completion bonus. We have a Buy rating on the stock.

L&T • Larsen and Toubro (L&T) is a direct beneficiary of the domestic infrastructure capex cycle and the Atmanirbhar Bharat scheme with its diversified businesses across sectors such as defence, infrastructure (roads, railways, metros, and DRC), heavy engineering, and IT (digitalisation). The company has been focusing on defence manufacturing and has been ramping up operations (invested ~Rs. 8,000 crore) in the space over the last few years. Further, the government's announcement to create a domestic capital procurement budget of Rs. 52,000 crore with intention to scale-up allocation at a 15% CAGR over the next five years augurs well. Further, the National Infrastructure Pipeline project is likely to lead to increased spends in critical areas. L&T is poised to capitalise on these opportunities. Order pipeline remains healthy at Rs. 2.65 lakh crore (Rs. 2.2 lakh crore of domestic orders) for Q4FY2021. Order backlog remains diversified and healthy at ~Rs. 3.31 lakh crore with negligible slow moving orders. We believe L&T remains at the forefront to reap benefits from AtmaNirbhar Bharat Scheme with its diversified businesses across sectors such as defence, infrastructure, heavy engineering, and IT. The company remains the best proxy for domestic capex and its improving business environment. Considering comfort on valuations and multi-segment growth opportunities in the infrastructure sector, we maintain our Buy rating on the stock

PNC Infratech • PNC is one of the best picks in the roads sector given its strong execution capabilities, healthy balance sheet, robust order book, and prudent capital management.PNC has in-house manufacturing capabilities providing it the ability to timely execute projects. The company’s strong order book along with expected order inflows during FY2021 is expected to lead to strong earnings bounce back in FY2022. The company is also looking at monetising its assets, which would further lighten its balance sheet and free up equity capital for future projects. We have a Buy rating on the stock.

Sadbhav Engineering Limited (SEL)

• Sadbhav Engineering Limited (SEL) is engaged in 1) EPC business for transport, mining, and irrigation sectors and 2) development of roads and highways on BOT basis through SIPL. SEL has a healthy order book of Rs. 9,683 crore (4.3x its FY2020 standalone revenue). The company has robust in-house integrated execution capabilities with qualified human resource and owned equipment. We expect the company to gradually return back to track with the execution of projects at advanced stage and reduction in leverage. Considering attractive valuation and improving fundamentals, we have maintained our Buy rating on the stock.

JMC Projects • JMC is expected to be one of the beneficiaries of expected government spending on infrastructure over the next five years. Strong order backlog, is skewed towards the growing infrastructure and buildings and factories segments, which comprises over 80% of its order book. JMC has strong in-house execution capabilities, a quality standalone balance sheet and healthy return ratios. The company’s divestment of road BoT assets is a key positive, which will significantly deleverage its consolidated balance sheet and halt loss-funding from the standalone balance sheet. We have a Buy rating on the stock.

Metal & mining

JSW Steel • Steel makers are expected to maintain healthy margin profile as steel realisation would remain firm led by early price hike for automobile customers. Additionally, capacity expansion at Dolvi plant (undergoing a 5 mtpa capacity expansion) would ensure volume growth for JSW Steel over FY2022E-FY2023E. Thus, we expect JSW Steel’s earnings to clock 20% CAGR over FY2021E-FY2023E with an improvement in RoE to 16% (versus 10.5% in FY2020).

MOIL Limited • MOIL is well-placed to capitalise on potential recovery in the domestic steel demand growth as it holds strong reserves and a resource base of 92.6 million tonnes. Recent price hikes bode well for recovery in margins. Moreover, the company is attractively valued, offers a healthy dividend yield and has a strong cash position which provides room for share buyback.

NMDC Limited • NMDC’s operational performance is expected to remain strong over next two years with potential sharp ramp-up in iron production given recent resumption of production from Donimalai mine and sustained domestic high iron ore prices (led by supply deficit in domestic markets). Potential value unlocking from demerger and strategic sale of its steel plant by September 2021 is key near-term catalyst. Moreover, we expect NMDC’s dividend payout could improve considerable as likely strategic sale of the steel plant would improve cash position and core iron ore mining business is expected to generate steady EBITDA.

Oil & Gas

Castrol India • Castrol’s recent alliance with the Jio-BP retail network provides long-term volume growth opportunity and management’s renewed focus to gain share could result in better volume growth in coming years despite overall muted outlook for lubricant demand (given higher drain interval to change lubricants). Strong FCF generation, healthy dividend yield and robust RoE of ~56-60% lends comfort to investors. Castrol is trading at steep discount to historical valuations.

Oil India • Oil India has several hydrocarbon discoveries across reserve in Rajasthan and the northeastern regions of India. The company holds domestic 2P (proved and probable) reserves of 75 mmt for oil and 132 bcm for gas. Reserve-replacement ratio of the company is also healthy at 1.2x. However, the recent sharp decline in oil prices given weak demand due to COVID-19 and weak domestic gas price is a cause of concern for upstream PSUs. The company offers a high dividend yield.

Petronet LNG • Petronet LNG is the largest LNG re-gasifier in India with 17.5 mmt LNG terminal at Dahej and 5 mmt LNG terminal at Kochi. The company’s Dahej terminal enjoys a competitive edge as compared to other LNG import terminals, given low tariffs and long-term contracted volumes with a use or pay clause. COVID-19 is expected to impact volumes temporarily; and Dahej terminal utilisation has already recovered to 100% with expectation of high utilisation to sustain given robust gas demand outlook supported by low LNG prices. Kochi terminal’s utilisation is also expected to improve with resolution of pipeline connectivity issues in Southern India. Petronet LNG would be the key beneficiary of rising share of LNG in India’s overall gas consumption. The stock offers a healthy dividend yield.

Reliance Industries • Reliance Industries Limited (RIL) is a diversified conglomerate with ~60% EBITDA contribution from the core business of refining and petrochemicals and ~35% from consumer businesses (retail and digital services). Long-term earnings growth outlook remains robust with potential improvement in the financials of digital services business (likely ARPU hike, ramp-up of recently launched fibre broadband services, and rollout of enterprise business and new commerce services) and continued strong growth for the retail business (although near-term earnings to get impacted due to COVID-19) supported by leveraging of the JioMart platform using WhatsApp. The company’s aim to increase the share of EBITDA from the consumer business to 50% would play a crucial role to tide over margin volatility in downstream margin due to COVID-19. RIL has a strong balance sheet as it has become virtually net debt-free with monetisation of the stake in Jio Platforms, the rights issue, and the fuel retail JV with BP. Potential listing of Jio and recent induction of strategic partners in the retail business could further unlock value from consumer-centric businesses and create long-term wealth for investors.

Mahanagar Gas • Mahanagar Gas Limited (MGL) is a dominant CGD player in and around Mumbai, with gas sales volumes of 3 mmscmd in FY2020, of which 73% are derived from CNG and 14% from domestic PNG. Long-term volume growth remains intact, given low gas penetration (CNG at 34% and domestic PNG at 38%), regulatory push for use of green fuels and potential volume ramp-up at Raigad geographical area. Moreover, we expect high margins to sustain, given pricing power in CNG and low domestic gas prices. MGL’s balance sheet is strong with nil debt and robust free cash flow generation. Moreover, PNGRB’s notification excluding OMCs as third parties removes major overhang as ~72% of MGL’s CNG stations are operated by OMCs. The stock is trading at an attractive valuation (steep discount to peers) and offers a healthy dividend yield.



Indian Oil Corporation • IOCL leads the domestic downstream oil sector with non-replicable infrastructure – total refining capacity of 81 mmt (33% market share), 30,000 retail outlets (~42% market share), domestic petroleum product sales volume of 83.9 mmt and pipeline capacity of 80.6 mmt. Likely normalisation of auto fuel marketing margins, recent sharp recovery in auto fuel consumption, cyclical recovery in refining margin bodes well for earnings recovery. IOCL’s valuation is attractive with a steep discount to that of BPCL


• HPCL is best placed among the OMCs given higher gearing toward marketing margins and lower impact on refinery throughput as it sources ~58% of petrol and diesel marketing sales volume from other refiners. Moreover, likely normalisation of auto fuel marketing margins, recent sharp recovery in auto fuel consumption, cyclical recovery in refining margin bodes well for earnings recovery. Moreover, HPCL’s valuation is also attractive with steep discount to that of BPCL.

Bharat Petroleum Corporation

• The government’s stake sale to private/foreign players would unlock real value of BPCL and could trigger re-rating of the company as valuation of its refining and marketing assets could get re-aligned to global peers. Additionally, likely normalisation of auto fuel marketing margins, recent sharp recovery in auto fuel consumption, cyclical recovery in refining margin bodes well for earnings recovery.

Gujarat Gas • Volumes recovered sharply and its gas sales volumes are above pre-COVID level. Current volume run rate of 11.5 mmscmd is 22% higher than FY2020 gas sales volume and management guided exit rate of 12 mmscmd for FY2021 and expects a sustainable 10% volume growth on a higher base of FY2022. Key drivers are – a sustained volume growth in existing GAs, 2) development of 7 new GAs (3-3.5 mmscmd volume potential over 4-5 years) and 2) The NGT ban on polluted areas (volume potential of 2-2.5 mmscmd) in Gujarat. We believe that GGAS is best-placed in the oil and gas space to benefit from India’s robust gas demand outlook supported by regulatory push to curb pollution. We expect a strong 23% PAT CAGR over FY2020-FY2023E along with high RoE of 28.6% and expect Gujarat Gas to turn net cash positive by FY2022.

Indraprastha Gas • The government’s aim to increase the share of gas in India’s energy mix to ~15% by 2025 (from 6% currently) and the thrust to reduce air pollution in NCR region provide a regulatory push for strong growth in CNG and domestic PNG volumes for IGL. Moreover, the development of new GAs of Rewari, Karnal, and Gurugram and recent awarding of three new GAs in the 10th round of CGD bidding would drive volume growth beyond its existing areas of operations. The company’s margins are expected to remain strong, given domestic gas prices. Moreover, recent sharp CNG recovery indicates normalisation of overall volume much faster than expectation.

GAIL (India) • GAIL’s earnings outlook has improved considerably as gas trading business is expected to turnaround in Q4FY2021 given a sharp recovery in the spot LNG price while higher HdPE prices bodes well for the profitability of petrochemical business. Strong gas demand supported by favourable regulatory environment and improving gas supplies (through upcoming LNG terminals and higher domestic gas production) bode well for improvement in GAIL’s gas transmission volumes in the next 2-3 years. Monetisation of gas pipeline assets could act as key re-rating catalyst.

Gujarat State Petronet Limited

• Higher gas supplies with a new LNG terminals, affordable LNG prices, government’s target to increase share of gas in India’s energy mix to ~15% by 2015 (from 6% currently) and thrust to reduce pollution provide strong gas transmission volume opportunity for GSPL. Investment in CGD space (Gujarat Gas and Sabarmati Gas) would create long-term value for investors. Core pipeline business is available effectively free to investors as value of investment in GGAS is equal to GSPL’s current market capitalization.

Pharmaceuticals

Aurobindo Pharma • Aurobindo Pharma has an exposure of ~80% to the US and Europe and has built strong capabilities to cater to these markets. A sturdy pipeline of product launches lined up over FY21 and FY22, better traction in lucrative injectables and expected momentum in recently launched products would drive US sales. The European business is also recovering with revenue clocking a double-digit growth for Q3FY21. The global injectables business, which has an annual run rate of $380 million, is expected to reach $650-700 million in the next three years backed by increasing approvals, geographic expansions and improving demand traction. Over the long term, vaccines and APIs are expected to be the growth drivers. Improving growth prospects, better earnings visibility and a strengthening balance sheet would be the key positives. We retain our Buy recommendation on the stock.

Cadila • Cadila is favorably progressing in its efforts to build an alternative growth platform (NCE, biologics, and vaccines) that should start delivering over the long term and reduce company’s dependence on limited competition assets in the US. The company’s key segments, the US and India, are expected to witness improved growth traction. Over the long term, products such as Saroglitzar Mg and Desidustat as when launched provide sizeable growth opportunities. Moreover, the company’s COVID vaccine entering phase III of clinical trials has elicited a strong immune response and the company has already received orders exceeding its capacities. Strong growth prospects and earnings visibility, a sturdy balance sheet, and healthy return ratios coupled with multiple growth triggers are key positives for Cadila

Cipla • Cipla is a global pharmaceutical company with a geographically diversified presence. Cipla’s One-India strategy has played out well and has yielded synergies across its business. Increased prescription generation backed by sustained traction in chronics and likely revival in acute therapy would drive growth of India business. Other businesses in US and South Africa are on a strong footing and are expected to report healthy growth backed by new launches and growth in the base business. Healthy topline growth, strong earnings visibility and a healthy balance sheet augur well and would be key positives. We maintain a Buy recommendation on the stock.

Divis Laboratories • Divis Laboratories is one of the leading players in the API space and is present in the CRAMS segment. Divis is witnessing a strong demand in both API as well as custom synthesis business. There are immense opportunities that have emerged for API players such as Divis, as companies look to tide over the pandemic. Further, ongoing capacity expansion plans, which are expected to be completed by FY2021, provide ample visibility to cater to the increase in demand. Backed by a sturdy project inflow for the custom synthesis business, Divis has announced a Rs. 400 crore capex so as to capitalise on the opportunity. We believe Divis could also benefit from its backward integration Robust demand traction, incremental capacities coming on stream, plans to enter the high value space of Contrast Media Manufacturing would be the key growth drivers. We retain our Buy recommendation on the stock.

IPCA Labs • IPCA is a leading formulation and API player present across major markets worldwide and a leader in the anti-malarial space and is present in other therapy areas as well. Ipca’s API business is witnessing a strong demand traction, which is expected to sustain going ahead. Pricing pressures for Sartans have stabilised and would, therefore, support growth of the APIs. Ipca is facing certain capacity constraints in the API segment and is implementing a de-bottlenecking exercise, which would ease capacity constraints in the near term. We maintain a Buy recommendation on the stock.

Lupin • Lupin is a leading pharmaceutical company and is present in most markets globally. US business is on a strong footing to grow, backed by better-than-expected ramp up of its respiratory product, gAlbuterol. Other substantial launches in the US would drive the region’s growth. Lupin’s domestic formulations business is also expected to record healthy growth going ahead with the expected revival in IPM and supported by a chronic heavy portfolio and likely pick up in acute therapies. Lupin’s three plants – Goa, Pithampur, and Somerset (US) are under USFDA scrutiny and resolution has been delayed. A successful resolution of the same is awaited and could result in further earnings upgrades. We retain Buy recommendation on Lupin

Sun Pharma • India and US are key markets and constitute around 60% of the total topline and are witnessing improved traction. Strong growth in chronic therapies along with likely improvement in acute therapies would fuel growth in the domestic formulations business. A sturdy new product pipeline provides visibility on India revenue growth. Improvement in the US specialty business coupled with traction from new product launches would drive US revenue upwards. Moreover, geographic expansion/increasing penetration for existing products would grow the base business. Improved growth prospects, healthy balance sheet, and improving return ratios would be key positives. We retain Buy recommendation on Sun pharma



Torrent Pharma • Torrent Pharma operates in the emerging as well as developed markets. Torrent has higher dependence on chronic therapies, which bodes well for the company. Going ahead, the outlook for the India business is healthy and the company expects to outperform the industry growth backed by sustained price increase and new product launches. The international business is expected to be under stress, attributable to a weak performance of US business driven by lack of new launches and price erosion. The Brazil business is also witnessing pressures on account of adverse currency movement. The Europe (Germany) business is on the path to revive as the company has addressed quality related issues. Torrent’s three plants – Dahej, Indrad, and Levittown are under USFDA scanner and a timely resolution is awaited. We have a Hold recommendation on the stock.

Biocon • Biocon is a leading company manufacturing biosimilars in India and one of the few global companies to receive approvals for its products across US, EU, Japan and other developed markets. Going ahead, Biocon expects biologics to be a key growth driver as demand is expected to improve for existing biosimilars - Fulphila, Ogivri in the US. Moreover, the launch of Semglee too is expected to gain traction going ahead. In addition to this, expanding geographical reach would support topline growth. Generic segment is also well placed to capitalise on the opportunities in the formulations segment. Further, a possible listing of its wholly-owned subsidiary - Biocon Biologics Limited provides a significant value-unlocking opportunity and this bodes well for the company. We retain Buy recommendation on the stock.

Granules • Granules is a fully-integrated pharmaceutical company with presence across the API-PFI-FD value chain. The company is witnessing improved demand across products. Core 5 molecules are likely to sustain their strong growth trajectory, as the company plans to tap new geographies of Europe, Canada and South Africa for growth. A strong product pipeline would add to revenue growth. To cater to rising demand, Granules has announced a capex plan, would ease capacity constraints. We believe that product launches in the US and augmented capacities will support the base business as well as emerging business. A changing mix, efficient manufacturing process and better utilisation of plants will aid profitability growth. We retain a Buy recommendation on the stock

Laurus Labs • Laurus is a leading research-driven pharmaceutical company, working with nine of the world’s top 10 generic pharmaceutical companies in the world. Robust growth in the formulations business and emerging opportunities in the API space and a strong order book for the synthesis business, which will unfold over the near to medium term, provides ample growth visibility. Moreover, almost doubling of capacity, primarily to cater to the surge in demand for formulations augurs well and would substantially boost revenues. Recent foray in the biotechnology space by acquiring a controlling stake in the Richcore Lifesciences augurs well and will complement growth plans. Also, a favorable mix would lead to margins expansion. We retain a Buy on the stock.

Strides Pharma Sciences • Strides is well-placed to benefit from the opportunities in the global pharmaceutical market. Performance is expected to be driven by sturdy growth across segments of regulated and emerging markets. A strong product pipeline, growth in the base business, and expected traction in new product launches would result in strong growth in the US business. The portfolio maximisation strategy adopted by the company in other regulated markets has played out well and has yielded good results. Strides sees the benefit from the same to accrue going ahead as well. Further, Strides had strengthened its top management team by inducting candidates with rich and varied experiences at key positions to drive the performance of the US as well as other markets. Moreover, the board has approved the demerger of the biotech business under Stellis, pointing at potential value unlocking opportunities. We retain Buy recommendation on the stock.

Shilpa Medicare • Shilpa Medicare (SML) is one of the leading API and formulations manufacturers with strong capabilities in the oncology segment. The growth outlook across segments is healthy. Expansion and upgradation of oncology and non-oncology API facilities and plans to commercialise 3-4 molecules per year would support growth of the API segment. Foray into the domestic formulations markets, strong new product pipeline coupled with expansion into new geographies and markets would be key growth drivers. SML has launched one new product in the OTC segment and has plans to launch two more in the remainder of the year. Moreover, SML has a strong product pipeline, which would support growth going ahead. We retain Buy recommendation on the stock.

Solara Active Pharma Sciences

• Solara is a pure play API manufacturer. Solara has proven capabilities to manufacture complex/combination APIs. The company is witnessing a strong demand environment for its business going ahead. The API space is witnessing strong and widespread growth opportunities across regulated and other markets. This coupled with the company’s strong customer relationship and sturdy R&D capabilities provide ample growth visibility going ahead. Given the strong demand traction and ramp up of the Vizag plant (Phase I), strong new product launches, especially in the limited competition space augur well from a growth perspective. The company’s strong growth prospects, better earnings visibility, healthy balance sheet, and improving return ratios We retain a Buy recommendation on the stock.

Dr Reddy’s Limited • DRL (Dr Reddy’s Limited) is one of the leading pharmaceutical companies with a presence across the globe. Global generics is a key segment accounting for ~79% of overall revenue. Sturdy new product pipeline, growth in base business would drive the growth in the US business. Backed by a likely improvement in acquired portfolio, expected pick up in acute therapies and sustained traction in chronic could drive the India sales. Further, initial observations of the recent study by Russia depicts that Sputnik V vaccine is effective against new mutations of the virus. With Europe commencing a rolling review of the Sputnik V vaccine and few member countries in the EU approving the vaccine, it could also have a positive rub off effect on the approval process in India. We recommend a Buy on the stock.

Sanofi India • Sanofi is one the leading MNC pharma companies focused on Indian markets. Diabetology is the company’s forte; and the company is among the fastest growing companies in this space. Pharma MNC companies such as Sanofi with a high degree of India exposure are comparatively well positioned to grow. Sanofi focuses on chronic therapies and a higher share of this segment augurs well as it provides a stable revenue stream. This coupled with expected traction in top brands and rising OPM is likely to drive earnings growth. The topline decline for Q4CY2020 could be looked up on as an aberration, attributable t o COVID-led challenges, and is expected to normalise going ahead. Considering high growth visibility from chronics, low exposure to highly regulated markets, strong balance sheet with no debt, minimal capex, healthy cash positions, premium valuations are expected to sustain. We retain Buy recommendation on the stock

Abbott India • Abbot is an MNC pharma company with a focus on Indian markets. The company’s power brands in Indian markets command a leadership position in respective segments. Abbott’s topline is expected to grow in double digits, backed by strong performance of its power brands with 7 of its top 10 brands being top-ranked in their respective categories. The company’s ability to develop mega brands amidst a highly competitive landscape is one of its key strengths. Abbott has a sturdy new products pipeline along with a strong pipeline of recently launched products which would drive the growth going ahead. Further efforts to reduce dependence on external manufacturing by shifting production of few key products to the company’s Goa plant is likely to increase efficiencies and lead to margin expansion. Based on better growth prospects, strong balance sheet position because of debt-free status and moderate capex coupled with healthy operating cash flows, we retain Buy recommendation on the stock.

Building Materials

APL Apollo Tubes • APL Apollo Tubes (APL) has successfully created a brand name for itself in the structural steel tubes space (specialty pipes from simple commodity products), which led to a sustained track record of market share gains (at 50% currently) and robust volume growth over the past several years. The management’s recent decision to merger Apollo Tricoat with APL Apollo Tubes is a step in the right direction as the same would improve margin/RoE profile. APL’s superior growth outlook (expect PAT to register 37% CAGR over FY2021E-FY2023E), robust RoE of 28%, and strong balance sheet make it a strong re-rating candidate.

Grasim • Grasim is seeing an improving outlook for standalone business with easing of lockdown restrictions domestically and improving textile demand environment in China. Firming up of VSF prices and bottoming out of caustic soda prices driven by demand from textile and paper industries is expected to benefit Grasim going ahead. Further, the outlook for its key subsidiary, UltraTech, remains healthy with expected demand from government-led infrastructure investments and sustained demand from rural and individual home builders. We have a Buy rating on the stock.



Greenlam Industries • GRLM is a joint leader in Rs. 5700 crore laminate industry with a market share of ~20%. GRLM is expected to ride on strong growth being envisaged for the wooden furniture industry which is expected to grow at 12% CAGR over 2020-2023. Key growth drivers are rising incomes, urbanisation, real estate development, Housing for All etc. Further, we expect GRLM to grow at a faster pace benefiting with market share gains from un-organised sector leveraging its strong distribution network. The government’s focus on making India an export hub provides strong export growth opportunities for Greenlam.

Kajaria Ceramics • Kajaria is expected to witness benefits arising from improving demand from the housing sector. Further, anti-China sentiments in the US and European countries along with soft gas prices have boosted exports for the Morbi cluster, which has led to improved pricing environment for organised players such as Kajaria and increase in market share domestically. Given the strong demand outlook over next two to three years, the company is exploring the idea of brownfield expansion. Its rising free cash flow generation and low capex requirement is expected to reward shareholders through higher dividend payouts. We have a Buy rating on the stock.

Pidilite Industries • Pidilite is the market leader in adhesives and sealants, construction chemicals, hobby colours, and polymer emulsions segments in India. Flagship brands such as Fevicol and M-Seal have a market share of ~70% each in the domestic market. With a slew of new launches under existing brands and entry into consumer-centric categories, supported by adequate media activities, Pidilite has transitioned its target market from industrial users to consumers through effective communication, which has helped the company to register itself in customers’ minds. With construction activities gaining momentum in the rural and semi-urban markets, the consumer bazaar business is expected to post better performance in the coming quarters. International markets such as the US, Middle East and Africa and Asia clocked a recovery. Further, the expected increase in demand for adhesive products in global markets would add to overall revenue in FY2022 and FY2023. A fall in prices of key inputs, in line with the fall in crude oil prices, will support margins. A monopoly in the adhesives market, strong brand recognition and a sturdy balance sheet justify a premium valuation. We maintain our Buy recommendation on the stock.

Shree Cement • Shree Cement is seeing strong traction in demand from its key regional markets viz. North and East. Shree Cement has been outpacing industry volume offtake over most of the trailing four quarters and is further expected to outperform over FY2021E-FY2023E led by improving capacity utilization and addition of newer capacities. The company will be utilising the Rs. 2,400 crore funds raised through a QIP during Q3FY2020 for further capacity expansion. The firm cement demand has led to the management re-visiting its capex plans of increasing capacity from 40MTPA to 57MTPA over three years period and to 80MTPA over 6-7 years.

The Ramco Cements • The Ramco Cements, one of India’s most cost-efficient cement producers, will benefit from capacity additions carried out ahead of its peers in the southern region. Ramco has embarked upon capital expenditure plan of Rs. 3,500 crore to reach cement capacity of 20.79 mtpa. The expansion aims to strengthen its reach in Andhra Pradesh, West Bengal, and North Eastern states. We expect Ramco to benefit from a strong pricing discipline in South India, while demand is expected to pick up sharply in FY2022. The company continues to maintain cost-efficient structure leading to enhanced operational profitability. The ongoing expansion plans provide ample room for future growth. The company’s balance sheet is expected to remain strong despite its aggressive expansion plans.

UltraTech Cement • UltraTech Cement is India’s largest cement company. We expect UltraTech to report industry-leading volume growth on account of timely capacity expansion (inorganic and organic expansions) and revival in demand (demand pick up in infrastructure, urban housing along with continued demand emanating from the rural housing segment). We expect the company to be the biggest beneficiary of multi-year industry upcycle, being a market leader and its timely scaling up of capacities and profitability in the shortest possible time.

JK Lakshmi Cement • JK Lakshmi Cement (JKL) had undertaken capacity expansion plans of 8.6 MT since FY2015, trebling its capacity to 13.3 MT by FY2020. Moreover, JKL has been able to reduce its standalone net debt to equity at 0.7x in FY2020 from its peak of 1.5x in FY2015, which shows efficient capital management. The company has a brownfield expansion potential to reach 20 MT in a short time. Now, the company has two distinctive markets, i.e., the East and North West regions. JKL is currently trading at attractive valuation considering likely earnings bounce back from FY2022. Hence, we have a Buy rating on the stock.

Supreme Industries • Supreme Industries is well-placed to enhance its market share as the COVID-19-led crisis resulted in consolidation of the plastic pipes industry (both PVC and CPVC). Moreover, a shift in business from unorganised to organised players has been seen owing to availability of raw materials (PVC resin) and liquidity issues. The imposition of anti-dumping duty on imports from China and Korea is also expected to help domestic manufacturers enhance volumes. Considering healthy demand prospects during FY2021-FY2022E, the company intends to incur a capex of Rs. 350 crore to expand its capacities mainly in the piping segment and packaging film segment. We expect SIL to benefit from a medium to long-term perspective, given recovery in rural economy, affordable housing sector, and the new scheme for piped water connection – ‘Nal se Jal’. Given the positive demand outlook from the medium to long-term perspective and healthy cashflow generation and a strong balance sheet, we have a Buy rating on the stock.

Century Plyboards • Century Plyboards is a leading player in the organised plywood industry with a market share of 25%. The company also has laminate, particle board, and medium-density fibre board (MDF) division having capacity of 600 cubic metres per day. The company like other building material players is likely to be affected by weak demand on account of country-wide lockdown led by COVID-19 pandemic. We believe the company is among the few organised players to benefit from lower input costs and is expected to recover at a faster pace once normalcy returns in the industry. Hence, we have a Buy rating on the stock.

Dalmia Bharat • Dalmia is on a strong growth trajectory for the next five years with capacity expansion plans lined up for medium and long term. The company is slated to increase its capacity from current 28.5 MTPA to 37.3 MTPA by FY2022E. The capacity expansion would help it consolidate its leadership position in the East and venture into the West through the acquisition of Murli Industries. Further, Dalmia is chalking out a capital allocation strategy to double its capacity over the next three years. It aims to become a large pan-India player through both organic and inorganic routes. Also, despite, its expansion plans, the company would clock a net cash surplus by FY2023E.

Astral Poly Technik • Astral is among the country’s leading manufacturers of plastic pipes used across industries. Astral has a market share of 25% in CVPC pipes and 5% in PVC pipes and is well placed to grab the significant growth opportunities unveiled by the government through its various schemes such as Housing for All by 2022, PMAY, Smart Cities Mission, AMRUT, HRIDAY, Har Ghar Jal by2024, Nal se Jal by 2024, and PMKSY. Astral is expected to perform well in the coming year as it continues to benefit from sustained rural demand along with pick up in infrastructure sector. The company has also been improving upon cash balance with tight monitoring of working capital.

Telecom & New Media

Affle (India) • Affle (India) Limited (Affle) provides end-to-end offerings to advertisers through mobile advertising using its proprietary mobile audience as a service platform for customers. Affle’s exposure in fast-growing markets such as India and SEA and segments such as e-Commerce provide a platform for sustainable growth momentum in the long term. The e-Commerce vertical remains strong as consumers are spending more time online and there are an increasing percentage of transactions on mobile. Given accelerated transition of organisations to mobile advertising, offerings in high-growth verticals, market share gains, and inroad to new geographies, we believe Affle is well positioned to deliver a 28% CAGR over FY2021-FY2023E.

Info Edge (India) • Info Edge is India’s premier online classifieds company in the recruitment, matrimony, real estate, education, and related service sectors. Naukri.com is a quality play and is directly related to GDP growth and internet/mobile penetration. However, improvement in billings rate in telecom, IT, and retail, which are major contributors to its billings in the recruitment business and a strong revival in traffic in platforms would drive billings going ahead. Apart from IT & ITeS, pharmaceutical, telecom & real estate, company witnessed improvement in hiring activities across many other sectors (including travel and hospitality). We have modelled for a strong revival of revenue growth (28.5% y-o-y) in FY2022E, given the recovery in overall billings, pent-up demand in new /resale homes increasing attrition rate and strong addition of users in the Jeevansathi business. The investee companies, particularly Zomato and PolicyBazaar, have been progressing well in their respective businesses. We continue to derive comfort on Info Edge’s business strength, with leading market share in key businesses.



Bharti Airtel • Bharti Airtel (Bharti) continues to focus sharply on increasing retail ARPUs, non-mobile services (enterprise services), and value-added services (Airtel TV and music) to boost revenue and reduce the churn rate. The management has guided for ARPUs to move to Rs. 200 in the short term and Rs. 300 in the medium term. The broadband category is at a cusp in terms of growth, as the management sees there is a huge need for high-speed internet among customers because of work-from-home and online education. Further, management remains optimistic that digital services through the partnership-led model would help to drive its growth going ahead. Bharti acquired a total of 355MHz spectrum across various bands at a total cost of Rs. 187 billion, which would strengthen its spectrum portfolio with pan India sub-Ghz coverage and healthy capacity spectrum in all circles as well. In the long run, explosive growth in the data segment, rapid network expansion, and growing reach will help Bharti emerge stronger.

Discretionary Consumption

ABFRL • ABFRL is India’s largest pure-play fashion and retail entity with an elegant bouquet of leading fashion brands and retail formats supported by a pan-India distribution network with a combined retail footprint of 8 million square feet across 750 cities. ABFRL saw a ~80% recovery in revenue in Q3FY2021 with improved footfalls during the festive season. With large part of rent reduction already achieved in H1, operating costs might go up slightly in H2 though some of the savings are structural and likely to continue. The company enhanced its digital presence by adding new delivery channels and improving online assortment, which yielded a 3-5x growth in e-Commerce channel. The company added 100 new stores in Q2 and another 100 are in pipeline for in Q3. The company raised Rs. 1,500 crore by allotting 7.3 crore shares to Flipkart on a preferential basis, which along with a rights issue of Rs. 1,000 crore will help in debt reduction by 90%, thus strengthening the balance sheet. With footfalls expected to recover, the management expects a complete recovery in Q4FY2021 with revenues expected to grow back to pre-COVID levels. Strong traction in new launches, increase in contribution from private labels, share gains from unorganised players and increase in contribution from online sales are some of the near-term growth catalysts for the company. We recommend a Buy on the stock.

Arvind • Arvind demerged into three separate entities of Arvind (textile business), Arvind Fashions (branded and retail business), and Anup Engineering (engineering business) with an aim to unlock value for shareholders. After the demerger, Arvind has become a textile hub and is present in denims, fabric, garments, and advanced materials (AMD). Q3FY2021 revenue recovered to ~80% led by a strong recovery in Denim and garments segment, which stood at 81% and 89%, of pre-COVID levels. A faster recovery in the export market, good growth in garment sales volumes and sustained growth in AMD business will help the company post good recovery in FY2022. The company has maintained its focus on strengthening its balance sheet by debt reduction and targets a ~Rs. 1,000 crore reduction over 18-30 months. Thus, we do not expect much stress due to near-term uncertainties. We maintain a Buy rating on the stock.

Bata India • Bata India is the largest retailer and manufacturer of footwear in India. The company has a retail network of over 1,400 stores, including 150 franchisee stores, which sell a total of ~47 million pairs of footwear annually. Over the past 3-4 years, Bata has focused on transforming itself from conventional footwear space to a stylish footwear brand focusing on categories such as women’s wear and Sportswear. To become an aspirational brand it added new products in last six to seven years in its portfolio (including Comfit, Marie Clarie, Red Label collection). FY2021 will be disrupted by store closure during the lockdown period and lesser out of home travel. However, we expect strong recovery in FY2022/23 with out of home consumption expected to come back on track. Current valuations also make it a good fit in the discretionary space.

KPR Mill • KPR is one of India’s largest vertically integrated textile players, with a steady financial record and sturdy balance sheet. The strength of its integrated model helps the company to achieve consistent operating margins that are much better than some of the exporting peers. A shift in base from China to India, addition of more international clients, transforming itself from volatile yarn business to profitable garment business, scale-up in the retail business and scale-up in the garmenting revenues through increase in capacity utilisation from newly-commissioned Ethiopia facility are some of the medium to long-term growth drivers for KPR.

Inox Leisure • Inox Leisure Limited (ILL) is one of India’s largest multiplex operators. The company accounts for 20% share of multiplex screens in India and a ~11% share of domestic box office collections. As per the Ministry of Home Affairs’ Notification dated January 31, 2021, cinemas/theatres/multiplexes have been permitted to open at full seating capacity with effect from February 1, 2021. Given the availability of fresh content, the management expects new movies to release in cinema halls from April 2021 onwards. It also expects that occupancy levels to revert to normal in H2FY2022 as movies like Atrangi Re, Maidaan, Shamshera, Prithviraj are lined up for release. We remain positive on Inox Leisure given strong liquidity position with: (1) real estate valued at Rs. 350 crore (2) cash holding (including undrawn limits of Rs. 93 crore) of Rs. 230 crore as on 31st January 2021 and (3) successful equity fundraising of Rs. 250 crore in November 2020.

Relaxo Footwear • Relaxo Footwear (Relaxo) is present in the fast-growing footwear category, where it caters to customers with its four top-of-the-mind recall brands, such as Hawaii, Sparx, Flite, and Schoolmate. Relaxo’s focus is on driving sales through distribution expansion (COCO and franchisee stores) and improving its brand presence. GST implementation has been a silver lining for the company, as it is witnessing a gradual shift of demand from the unorganised to organised market. The company is expected to enhance its current capacity, which will add to revenue growth. Though FY2021 is expected to be soft, we expect a strong recovery in FY2022 driven by market share gains from unorganised players, higher presence in e-Commerce channels and higher demand for value-for-money products. Lower per capita consumption in India, Relaxo’s lower penetration in South India market and sustained product additions remain long-term growth drivers. Benign input prices would support overall margins in FY2021, while this, along with prudent administrative costs and better realisations would help margin expansion to sustain in FY2022. This makes Relaxo one of our preferred picks in the discretionary consumption space.

Titan Company • Titan is India’s largest specialty retail player, with over 1,600 stores spread across over 2 million sq. ft. in 279 towns having businesses in jewellery, watches, and eyewear. Revenue of Titan’s jewellery business reported a CAGR of 18% over FY2017-FY2020. Sustained launch of new collections, expansion in domestic footprint, shift of consumers to trusted brands, and strong growth in diamond jewellery remain the key growth pillars. The target is to achieve 2.5x sales and grab a 10% market share by FY2023. In the eyewear business. A strong recovery is anticipated in FY2022 with OPM coming back on track. An increase in scale of the watches and eyewear businesses along with expansion into tier-II and tier-III markets and continuous shift from non-branded to branded jewellery players would help Titan achieve consistent double-digit revenue growth and gradual improvement in margin in the long run. With a lean balance sheet and strong financial background, Titan is one of the best retail plays among peers.

Trent • Trent is the only branded retail player with a ~100% share of private brands with pan-India presence. Trent a strong set of brands catering to all categories of consumers, which has helped the company offers report the highest average revenue per square foot compared to other branded players. Trent has maintained its SSSG momentum over the years as well as the profitability is seen increasing y-o-y. Aggressive store expansion, better store fundamentals, higher contribution from private brands and innovative product offering in the premium and value fashion space would be key growth drivers for the company going ahead. FY2021 will affected by pandemic while we expect strong recovery in FY2022. Stable balance sheet and good parental background makes it a better pick in the branded apparel and retail space.

The Indian Hotel Company • The Indian Hotel Company (IHCL) is one of the top players in the domestic hotel space with strong room inventory. Management has aspiration to expand its margins by 8% by FY2023 and the company is posting decent margin expansion for the past few quarters. The significant impact on tourism and setback to the industry due to COVID-19 will result in FY2021 remaining subdued for IHCL. However, pent-up demand and international properties improvement in performance by posting positive RevPAR growth will help IHCL post faster recovery in FY2022. This will also help cashflows to improve and balance sheet to strengthen in the coming years.



Welspun India • Welspun is one of the leading players in the global textile market with capacities of 80,000 metric tonnes (MT) and 90 million metres of terry towels and bed linen capacity largely to cater exports markets. The company will benefit from recovery in the US, where it has market share of 19% and 13% in terry towel and bed sheets segments, respectively. New ventures such as flooring business and advance textile revenue would add-on to revenue in the near to medium term. This along with benign cotton prices and improved revenue mix would aid profitability to improve consistently in the near to medium term. Improving cash flows would aid the company to reduce debt on the books over FY2020-FY2023.

Wonderla Holidays • Wonderla Holidays (WHL) has restarted operations in its Bangalore and Kochi Park for a minimal period in Q3FY21 with a permitted capacity of 50% per day. The Bangalore Park reopened on November 9 and was opened only on weekends with 50% capacity. Considering the initial response to restricted operations at all park and digital campaigns done by the company, the management is confident of achieving incremental footfalls in the coming quarters (especially in Q1FY2022 which is one of the strongest quarters due to the holiday season). Further, a large shift is expected towards open-ended entertainment options in the post-pandemic era, which will help WHL scale-up footfalls in FY22/23. We expect footfalls to reach close to FY2020 by FY2023. The company would require average footfall of 1300 per day with average revenues of Rs. 1,000 per visitor to become cash positive in all the parks.

ZEE Entertainment • Zee Entertainment Enterprises Limited (ZEEL) is one of India's largest vertically integrated media and entertainment companies, primarily engaged in broadcasting and content development with the widest language footprint, movies and music production, live events and digital business. The company’s balance sheet and operational performance have improved over last three quarters with reduction in inventories, improvement in net cash position, recovery in advertisement demand, and strong performance in subscription revenues. ZEE5 is one of the leading digital platform, which primarily focuses on regional content, would continue to leverage its reach further on the back of hyperlocal content. We believe ZEE5’s success and improving transparency will play the vital role in re-rating of the stock.

Diversified/Miscellaneous

Bajaj Holdings • Bajaj Holdings and Investment Limited (BHIL, erstwhile Bajaj Auto) is a primary investment company focusing on new business opportunities. Given the strategic nature of its investments [namely BAL and BFL (Bajaj Finserv Limited)], we have given a holding company discount to its equity investments. Liquid investments have been valued at cost. We retain our Buy recommendation on BHIL.

Mahindra Lifespaces Developers

• Mahindra Lifespaces is scaling up its land acquisitions and approvals pipeline with a strong core management team across key functions. The company is gearing up to pre-sale over Rs. 2,000 crore per annum in the residential division over the next two to three years. The company’s low gearing can lend support for aggressive land acquisitions. The company is witnessing strong demand for built-to-suit factories, warehouses, and data centers for its IC&IC business. The company the has benefit of the China +1 apart from increasing government’s focus on attracting manufacturing investment in the country led by Atma Nirbhar, production-linked incentive schemes for its IC&IC vertical. Overall, growth outlook is positive for the company as the IC&IC vertical is a cash cow and scale up of its residential business provides strong uptick.

Triveni Engineering and Industries

• Triveni Engineering and Industries (TEIL) is the largest integrated sugar manufacturer in India and the market leader in its engineering businesses comprising high speed gears, gearboxes, and water and wastewater treatment solutions. TEIL expects a recovery of 30 bps less in the sugar business as compared to the previous sugar season (production to be lower by 5%). The company will export 1.82 lakh tonnes in 2020-21 under the MAEQ programme (0.5 lakh tonnes contracted till January 2021). Though exports subsidy is expected at Rs. 6 per kg, higher international sugar prices would keep export realisation comfortable. Sugar inventory stood at 28.2 lakh quintals as December, valued at Rs. 30.9/kg. The distillery division has received contract of 9.86 crore litres of ethanol supply for year 2020-21 (90% of the contract is for B-heavy molasses, which can be realised Rs. 57.6/litre). The order book of engineering business currently stands slightly lower than Rs. 1,000 crore

JSW Steel • Steel makers are expected to maintain healthy margin profile as steel realisation would remain firm led by early price hike for automobile customers. Additionally, capacity expansion at the Dolvi plant (undergoing a 5 mtpa capacity expansion) would ensure volume growth for JSW Steel over FY2022E-FY2023E. Thus, we expect JSW Steel’s earnings to clock 20% CAGR over FY2021aE-FY2023E with improvement in RoE to 16% (versus 10.5% in FY2020).

Polyplex Corporation • Robust demand for packaging and capacity additions by Polyplex Corporation (PCL) in the BOPET segment would aid volume growth. However, we believe that the BOPET margin cycle is near peak levels and spreads are expected to contract from current levels, with a rise in supplies and higher raw material cost. Hence, we believe that PCL’s profitability has also peaked and is not sustainable as margin would decline over FY2022E-FY2023E. Hence, we downgrade PCL to Hold from Buy.

Quess Corp • Quess is one of India’s leading integrated business services providers that focuses on emerging as the preferred partner for handling clients’ end-to-end business functions. With a strong focus on cross-selling under various businesses, adding new clients and increasing headcount, Quess is well poised to achieve strong double-digit revenue growth in the near to medium term (except for FY2021). Further, focus on strategic acquisition improves growth prospects in the long run. Any substantial improvement in EBIDTA margin would be a key lever for the stock in the near term. Management has maintained its thrust on improving cash flows and strengthening the balance sheet in the near to medium term.

Logistics

Gateway Distriparks Limited • With its dominant presence in container freight station (CFS) and rail freight businesses, Gateway Distriparks Limited (GDL) has evolved as an integrated logistics player. The company’s CFS and rail verticals are witnessing improving trade volumes in both global and domestic segments. However, once normalcy returns along with commencement of dedicated freight corridor (DFC), the demand environment is expected to improve further. Additionally due to comfort on valuation, we have a Buy rating on the stock.

Mahindra Logistics • MLL is an integrated third-party logistics (3PL) service provider, specializing in supply chain management and people transport solutions. Founded more than a decade ago, MLL serves over 300 corporate customers across various industries like automobiles, engineering, consumer goods and e-Commerce. The company pursues an asset-light business model under which assets necessary for its operations such as vehicles and warehouses are owned or provided by a large network of business partners on lease rentals, while MLL largely invests in logistics technology. With improving auto demand along with growth in its E-commerce, Consumer and Freight Forwarding business, the company is expected to improve its earnings growth trajectory. Hence, we recommend Buy on the stock.

TCI Express • TCI is a leading time-definite express distributor, with a network of 700 offices covering more than 40,000 locations. The company commenced operations in 1997 and has over two decades of industry experience. The company demerged from Transport Corporation of India in 2016 and was listed on December 15, 2016. The company offers services comprising surface, domestic and international air, e-Commerce, priority, and reverse express services. TCI has over 3,000 plus workforce with 28 sorting centres. The company caters to sectors such as consumer electronics, retail, apparel and lifestyle, automobile, pharmaceuticals, engineering, e-Commerce, energy/power, and telecommunications. TCI has a strong balance sheet, healthy cash flow-generation capacity and high return ratios. Hence, we recommend a Buy on the stock.

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