AMARA RAJA BATTERIES CMP (~) 997 CMP (~) 11,136 CMP (~) 1,929 PE ratio FY17E (x) 33.8 1-year return (%) 2.5 1-year return (%) 121.5 CMP (~) 912 PE ratio FY17E (x) 32.9 1-year return (%) 27.2 Debt-equity (x) 0.1 PE ratio (x) 34.8 Price/book value (x) 8.0 1-year return (%) 108.3 Debt-equity (x) 0.5 PE ratio FY17E (x) 29.0 PE ratio (x) 42.3 RoE (%) 39.9 Price/book value FY17E (x) 6.6 PE ratio (x) 19.5 RoE (%) 12.1 Debt-equity (x) Nil Debt-equity (x) NA 136 RoE (%) 25.8 RoE (%) 20.9 220 Ajanta Pharma 124 Biocon 200 124 250 180 112 220 Sen sex 112 Bajaj Finance 160 190 100 Sen sex 140 100 160 120 88 130 88 Sen sex 100 76 100 Sen sex 80 Sep 1, '15 Sep 2, ’16 Am ara Raja Batteries 70 76 Sep 1, '15 Sep 2, ’16 Sep 1, '15 Sep 2, ’16 Sep 1, '15 Sep 2, ’16

3,000 680 5,100 660 9,000 750 8,400 2,500 728 715 4, 2,000 583 580 3,400 540 056 7,

2, 6,000 650 5,600 2,000 957 155 4, 586 6, 967 2, 406 6, 5, 579 3, 705 5, 1, 1,000 480 3,000 689 550 2,800 1,500 1,700 420 4,

0 450 0 1,000 0 380 0 300 E: Estimates E: Estimates E: Estimates E: Estimates

Steady growth in its domestic formulations business, apart from higher Given its strong presence in the two-wheeler As Bajaj Finance has an established direct The noteworthy success in biosimilars has helped this stock gain a little market penetration in the US and Africa, is a huge positive for the market, the potential demand shift from the relationship with dealers and manufacturers over 25 per cent after the June quarter results. Despite the run-up, company. It saw consolidated net profit grow from ~112 crore in FY13 to unorganised to the organised sector after of consumer goods, its business model is analysts such as those at Citi remain overweight on Biocon and have ~406 crore in FY16. implementation of GST will be the key trigger considered robust in the segment. This aids raised their earnings per share target by seven per cent in FY17. The key trigger would be the performance of its recently launched for ’s second largest battery maker, the yearly 40 per cent growth in customer “Biocon’s high leverage to the lucrative global biosimilars drug, G-Zegerid, which for now has little competition in the US. Used to catering to the automotive and industrial acquisition, without compromising on asset opportunity and the meaningful progress in targeting the developed treat stomach and oesophagus problems, this drug has incremental segments. Higher growth in the replacement quality. After the June quarter results, markets lead us to value it at a premium to other Indian pharma revenue potential of $13-15 million for Ajanta. Analysts at Anand Rathi market should boost profit. Even otherwise, analysts at JM Financial expect the financier’s companies of similar size,” say Citi’s analysts. Its Malaysian insulin have, thus, raised their FY17 revenue and net profit estimates by 9.8 per the business outlook remains good. Analysts earnings to grow at 38 per cent on an annual facility which will go on stream from the second half of FY17 would also cent and 12.2 per cent, respectively. at Motilal Oswal Securities expect revenues basis in FY16-18 and the loan book to grow 35 support earnings growth. and earnings to expand by 19 per cent and 25 per cent during this period. per cent, respectively, over FY16-18.

KANSAI NEROLAC L&T FINANCE HOLDINGS

CMP (~) 370 PE ratio FY17E (x) 43.7 CMP (~) 97 Price/book value FY17E (x) 2.2 1-year return (%) 49.9 Debt-equity (x) Nil 1-year return (%) 55.1 Debt-equity (x) NA PE ratio (x) 22.3 RoE (%) 24.2 Price/book value (x) 2.4 RoE (%) 10.1

Being a significant supplier to Turnaround of the wholesale Maruti, the company would lending business has helped 6,000 560 benefit from higher auto 5,400 1,430 L&T Finance’s stock get re- 160 (~ cr) 160 (~ cr) demand. Since it is also a major L&T Finance Holdings rated significantly (up 24 per Kansai Nerolac player in decorative paints, 148 cent) after Q1 results. The 145 800 018 4,000 520 Kansai will gain from Pay 136 3,600 4, 1,220 segment’s loan book grew 18 5,

Commission payouts and 928 per cent year-on-year in Q1, 130 296 3,

4, 124 859 growing income levels. to account for 60 per cent of 165 3, Adjusted for the exceptional the total loan book. Analysts 2,000 480 112 1,800 3, 1,010 115 profit of ~534 crore on asset sale at Prabhudas Lilladher expect Sen sex in FY16, analysts expect 100 3-4 percentage points 100 earnings to grow 20 per cent Sen sex 88 improvement in return on 0 440 annually over the next two 0 800 equity (RoE) from the current 85 years, and the stock to continue 76 10.4 per cent. Long-term Sep 1, '15 Sep 2, ’16 Sep 1, '15 Sep 2, ’16 E: Estimates trading at premium valuations. E: Estimates prospects look even better.

NATCO PHARMA PROCTER & GAMBLE HYGIENE TATA ELXSI

CMP (~) 680 CMP (~) 15,198 CMP (~) 6,570 CMP (~) 1,569 1-year return (%) 50.7 1-year return (%) 6.1 1-year return (%) 8.7 1-year return (%) -15.2 PE ratio (x) 74.7 PE ratio (x) 72.9 PE ratio (x) 50.4 PE ratio (x) 31.6 PE ratio FY17E (x) 36.1 PE ratio FY17E (x) 57.4 PE ratio FY17E (x) 45.5 PE ratio FY17E (x) 24.2 Debt-equity (x) 0.1 Debt-equity (x) 0.3 Debt-equity (x) Nil Debt-equity (x) Nil RoE (%) 11.8 RoE (%) 52.2 RoE (%) 28.0 RoE (%) 46.3

160 ’s product Strong brand backing 128 Spread across the health 140 Tata Elxsi is a unique launches in the US 116 and continuous care, beauty and company in the Natco Pharma market over the next 12 Sen sex refreshing of its product grooming segments, Tata Elxsi information technology 140 108 months are key triggers offerings have been Procter & Gam ble Vicks, Old Spice and space which offers for growth. Analysts at 100 key strengths of the 114 Whisper are its three 120 design solutions to 120 Jefferies believe Natco is 92 company, which sells market-leading brands. clients in the Sen sex on the verge of a innerwear and Sen sex Despite operating in a automobile, broadcast breakout in its US 84 sportswear under the 100 highly competitive 100 and communication 100 Page Ind business. They expect 76 Jockey brand. While sector, the company has sectors. Its new division EPS to expand by 55 per 68 growth across segments almost doubled sales Sen sex Over The Top's content, 80 86 80 Sep 1, '15 Sep 2, ’16 cent in FY16-19; others Sep 1, '15 Sep 2, ’16 remains healthy at a and profits in three aimed at broadcasters, peg FY16-18 earnings little over 15 per cent Sep 1, '15 Sep 2, ’16 years and operates on Sep 1, '15 Sep 2, ’16 has been received well growth higher, at over annually, that of negative working by clients, which include 60 per cent. According to sportswear is better capital, justifying its Hotstar, Voot, Eros Now Jefferies, Natco is the than the rest at a little premium stock and Hungama. Its 2,100 440 best positioned among 3,000 410 over 20 per cent. 3,600 580 valuations. Analysts at 1,500 210 automobiles business is (~ cr) Indian generics players (~ cr) For these reasons, (~ cr) Angel Broking expect (~ cr) also fast growing. 421 732 to overcome sector analysts at Ambit Capital 3, P&G Hygiene’s revenue Analysts at Motilal Oswal 409 965

1,400 340 2,000 2, 340 2,400 520 1,000 190 247 923 1,

1, headwinds, justifying its expect the company to to grow over 14 per cent Securities believe the 205 1, 2, 075 482

premium valuation. The 2, deliver 30 per cent yearly in FY16-18 (year two divisions together 1, 749 2,

606 US patent verdict in earnings growth ending June), due to can help it post 24 per 700 240 1,000 1, 270 1,200 460 500 170 088 1, favour of its marketing between FY17 and FY21, strong brands and cent annual growth 1, partner Mylan for and its return on capital distribution network between FY16 and FY18, 0 140 multiple sclerosis drug 0 200 employed to rise to 57 0 400 while consensus sees 0 150 higher than the copaxone also works to per cent, from 42 per earnings growing 18 per consensus estimate of E: Estimates its advantage. E: Estimates cent in FY16. June ended E: Estimates cent in FY16-18. E: Estimates 15.6 per cent.

CMP: Current market price as on Sep 2, 2016; PE (price-to-earnings) ratio (x) is for trailing 12 months; NA: Not applicable as they are finance companies; RoE: Return on equity; E: Estimates Source: Bloomberg Data compiled by BS Research Bureau