22 December 2017

Market snapshot Today’s top research idea Equities - Close Chg .% YTD.% Entertainment Network India – Ad recovery on the cards Sensex 33,756 -0.1 26.8 Nifty-50 10,440 0.0 27.5 Stock attractive after recent correction; upgrade to Buy Nifty-M 100 20,772 1.1 44.7  ENIL’s ad revenues should revive in November-December on (1) a low base of Equities-Global Close Chg .% YTD.% November-16, and (2) gradual recovery in ad market and 3.) New shows - Karan S&P 500 2,685 0.2 19.9 Johar show. This should offset the muted ad growth in October-17 due to an Nasdaq 6,965 0.1 29.4 early festive season (in 2QFY18), subdued Gujarat election ad spends, and FTSE 100 7,604 1.0 6.5 lingering GST impact. DAX 13,110 0.3 14.2  New stations (batch-1 of phase-3) contributing 11% of revenue, should break Hang Seng 11,597 0.8 23.4 even by 4QFY18, with capacity utilization rising from 23% to 25-30% driving Nikkei 225 22,866 -0.1 19.6 Commodities Close Chg .% YTD.% profitability Brent (US$/Bbl) 65 0.3 16.4  ENIL is likely to spend ~INR3b in FY19 towards (a) acquisition of TV Today’s Gold ($/OZ) 1,267 0.1 9.9 frequencies, and (b) next batch of phase-3 auctions. Expect new (TV Today) Cu (US$/MT) 7,043 0.6 27.5 stations to generate annual revenue of INR700m-800m in 2-3 years (currently Almn (US$/MT) 2,134 1.4 25.2 ~INR300m), with EBITDA over 35% EBITDA margin. Currency Close Chg .% YTD.%  Over FY17-20, we estimate 15/29% revenue/EBITDA CAGR and value ENIL at USD/INR 64.1 -0.1 -5.7 20x FY19E EV/EBITDA; maintain TP of INR910. Post the recent ~15% correction, USD/EUR 1.2 0.0 12.9 the stock appears attractive. Upgrade to Buy. USD/JPY 113.3 -0.1 -3.1 YIELD (%) Close 1MChg YTDchg 10 Yrs G-Sec 7.2 0.00 0.7 Research covered 10 Yrs AAA Corp 7.9 -0.01 0.3 Flows (USD b) 21-Dec MTD YTD Cos/Sector Key Highlights FIIs -0.1 -0.9 7.6 Britannia Growth momentum getting stronger DIIs 0.2 1.5 14.2 Entertainment Network India Ad recovery on the cards; Upgrade to Buy Volumes (INRb) 21-Dec MTD* YTD* Sustainability India Inc. gearing up for a more constructive approach Cash 387 333 309 F&O 9,884 6,768 5,743 Note: YTD is calendar year, *Avg Piping hot news sells power business to Adani Transmission for Rs18,800 crore  Reliance Infrastructure Ltd (RInfra) on Thursday said it has signed a definitive binding agreement to sell its Mumbai power business to Adani Transmission Ltd for Rs18,800 crore. While initially the company will be paid Rs13,251 crore…

Chart of the Day: Entertainment Network India – Ad recovery on the cards Revenue and EBITDA margin to increase steadily over FY17-20E Revenue growth accelerated by new stations

Research Team ([email protected]) Investors are advised to refer through important disclosures made at the last page of the Research Report. Motilal Oswal research is available on www.motilaloswal.com/Institutional -Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital. In the news today

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IMF, RBI flag persistent risks to First electric vehicle to be delivered by 2020, says RC India’s banking system Bhargava The International Monetary Fund Maruti Suzuki India chairman and chief executive RC Bhargava said on (IMF) and the Reserve Bank of Thursday that the company is committed to meeting its target of delivering India (RBI) highlighted persistent its first electric vehicle (EV) by 2020. However, while the government has an risks to the banking system owing ambitious plan to have an all-EV market by 2030, Bhargava believes that to asset quality concerns, in only some 14.4 million of the 71 million cars to be sold by 2030 would be separate financial stability EVs. A survey of the potential EV market, commissioned by Maruti, will start assessments released on in another two-three weeks and will conclude by February 2018. The survey, Thursday… the company reckons, will enable it to authenticate a lot of things associated with EVs and the ecosystem that needs to be created to support it…

3 4 HDFC to sell HDFC Developers, Nasscom says HR 170 Bill & HDFC Realty to Quikr India for higher visa fees to put big Rs350 crore Indian IT companies at Mortgage lender Housing disadvantage Development Finance Corp. Ltd Fresh restrictions on work visas for (HDFC) on Thursday announced technology workers proposed by the sale of two subsidiaries the Trump administration are set 5 focusing on real estate brokerage to further exacerbate difficulties and online property classifieds to faced by Indian outsourcing Electric vehicles charging Quikr India Pvt. Ltd for a total of companies. The proposed infrastructure: After ordering Rs350 crore. HDFC Realty Ltd regulations — like the HR 170 — as 10,000 EVs from operates the brokerage well as the doubling of visa fees and M&M, EESL plan goes business,… announced earlier,… awry While Energy Efficiency Services (EESL) has ordered 10,000 electric 6 7 vehicles from auto makers Tata Motors and Mahindra and Warehousing cost for FMCG, UIDAI allows Airtel to use Mahindra (M&M), its plans to put white goods to dip 25-50%: Aadhaar for Mobile SIM eKYC the charging infrastructure in place have gone awry. A tender Report till 10 January for 4,000 charging stations, Warehousing cost for consumer The Unique Identification floated in September this year to durables and FMCG is likely to Authority of India (UIDAI) on meet the requirements of the reduce by 25-50 per cent mainly Thursday decided to conditionally 10,000 EVs ordered, was on the back of the implementation allow Ltd to resume scrapped. The 4,000 charger of the goods and services tax Aadhaar-based e-KYC verification tender was floated by EESL, but (GST) regime even as states like of telecom subscribers till 10 cancelled due to complaints from Haryana and Assam are set to January. This has been done to bidders during the meeting over emerge as new hubs, Crisil said in facilitate linking of Aadhaar with the lack of clarity on the a recent study… mobile SIMs,… specifications of the chargers, said an EESL official…

22 December 2017 2 21 December 2017 Update | Sector: Consumer Britannia

BSE SENSEX S&P CNX 33,756 10,440 CMP: INR4,733 TP: INR6,100(+29%) Buy Growth momentum getting stronger Continuing new launches in low unit packs aiding growth

Britannia’s (BRIT) recent launch of lower unit packs (LUPs) in the creams segment (under Stock Info Treat JimJam brand) offers ‘value for money’ and also caters to customer aspirations. The Bloomberg BRIT IN creams category is large (INR18b) and highly profitable (net margins 2x that of category), Equity Shares (m) 96.4 but has so far been urban-focused. We note that the company has already done well with 4964 / 2776 52-Week Range (INR) LUPs for its premium cookie brand Good Day – also in rural areas where demand for LUPs 1, 6, 12 Rel. Per (%) -2/21/38 is good. Thus, creams LUPs should help the company to penetrate well in the rural M.Cap. (INR b) 568.3 markets and drive incremental volume growth. M.Cap. (USD b) 8.9 12M Avg Val (INR M) 645 Free float (%) 49.3 Strategy (current and future) for incremental volume growth is focused on:  Increasing rural salience: A combination of efforts (rural distribution Financials Snapshot (INR b) expansion, dedicated focus on five key states in central India, new products Y/E Dec 2017 2018E 2019E Sales 89.6 99.0 118.6 and new pack sizes) over the past few years has helped BRIT to double its rural EBITDA 11.9 14.1 17.8 sales to INR15.56b. The company sees huge headroom for growth in rural Adj. PAT 8.8 10.1 12.8 markets, and expects revenue contribution from rural to increase to 30-35% Adj. EPS (INR) 73.7 84.5 106.9 (from ~20% now) over the next 2-3 years. EPS Gr. (%) 7.3 14.7 26.4  Rapid growth in distribution: Distribution expansion for BRIT has been BV/Sh.(INR) 224.7 271.9 335.3 massive, with its direct reach doubling over the past three years to 1.56m RoE (%) 36.9 34.0 35.2 RoCE (%) 31.1 29.0 30.4 (overall reach of 4.7m outlets at end-FY17, including 0.7m outlets added over P/E (x) 64.2 56.0 44.3 the past year). Its direct reach as of 2QFY18 stands at 1.8m outlets (second P/BV (x) 21.1 17.4 14.1 highest after HUL), implying addition of ~0.24m outlets in 1HFY18. BRIT has also set up 13,000 distribution points across rural areas to cater to this market Shareholding pattern (%) in a better way. We believe that the company should not be benchmarked As On Sep-17 Jun-17 Sep-16 against Parle’s reach of 5.8m outlets (BRIT is narrowing the gap year after year Promoter 50.7 50.7 50.7 on total reach; in terms of direct reach, BRIT already is twice as large as Parle), DII 11.7 11.3 9.5 given that biscuits is a low-cost/high-velocity consumption product and that FII 17.4 17.4 18.7 there is potential to boost the reach to ~9m outlets. Others 20.2 20.6 21.1  Growing presence in weak states: Improving market share in the Hindi belt FII Includes depository receipts (, Gujarat, Uttar Pradesh and Madhya Pradesh) is the second key Stock Performance (1-year) priority for BRIT. The company’s market shares are still in early teens in these Britannia Inds. states; it believes that there is still a long way to go. Notably, BRIT gained Sensex - Rebased 4,900 170bp market share in these weak states in central India in 2QFY18. 4,300  Get lower unit packs to play a big role: Distribution expansion, along with 3,700 introduction of LUPs of its products (have been successful in the hinterland), 3,100 addresses one of our key erstwhile concerns that the imminent rural revival 2,500 would lead to Parle clawing back some of its market share losses to BRIT in recent years. We note that LUPs have been in the market for many years now Jun-17 Sep-17 Dec-17 Dec-16 and doing well particularly in rural markets. LUPs form fairly large part of the Mar-17 business at ~50% for BRIT, and thus, will be an important rural sales driver.

22 December 2017 3  Focus on the INR5 pack of premium products: BRIT appears to have realized from experience that competing against Parle-G on price through its brand Tiger in just the basic glucose category would be tough. Thus, apart from Tiger variants like Tiger Creams, it has decided to introduce LUPs of premium products to cater to the aspirational needs of the customer. When the introduction of INR5 packs of Good Day saw good success in 2013-14, BRIT decided to introduce LUPs for its premium offerings in 2015. Consequently, the performance of weaker states improved and BRIT started gaining shares there. In August 2017, as part of its strategy to expand the share in the creams category (INR18b category) from 35% to 50% over the next two years, BRIT introduced the INR5 pack for the creams category. Net margins in the cream category are ~10% (2x the average biscuit margins). We believe this will help ramp-up sales in the rural regions and also would not be margin-dilutive.  Valuation view: We are enthused with BRIT’s consistent healthy performance in a difficult operating environment. Rapidly expanding distribution, continuing investment in R&D and significant expansion of its own manufacturing indicate management’s optimism about the growth prospects. Lower unit packs of premium products continue to receive good response, aiding volume growth substantially. Opportunity beyond biscuits is also substantially high. Continuing premiumization, significant incremental cost savings and a favorable commodity cost outlook mean that 15% EBITDA margin is now achievable. We reiterate our Buy rating with a revised target price of INR6,100 (48x December 2019E EPS, a 20% premium to three-year average due to improving visibility on both volume recovery and margin growth).

22 December 2017 4 21 December 2017 Update | Sector: Media Entertainment Network India

BSE SENSEX S&P CNX 33,756 10,440 CMP: INR759 TP: INR910 (+20%) Upgrade to Buy Ad recovery on the cards Stock attractive after recent correction; upgrade to Buy

Stock Info We interacted with Entertainment Network India’s (ENIL) management to Bloomberg ENIL IN understand the progress in its business and the outlook going forward. Key Equity Shares (m) 48 takeways: 52-Week Range (INR) 1008 / 715  Ad revenue was muted in October 2017 due to an early festive season (in 2QFY18), 1, 6, 12 Rel. Per (%) -4/-27/-29 subdued Gujarat election ad spends, and lingering GST impact. However, we see a M.Cap. (INR b) 35.4 revival in November-December 2017 on (1) a low base of November 2016, and (2) the M.Cap. (USD b) 0.6 just-launched Karan Johar show. Avg Val, INRm 14  New stations (batch-1 of phase-3), which contribute 11% of revenue, should break Free float (%) 28.9 even by 4QFY18, with capacity utilization rising from 23% to 25-30%. Financials Snapshot (INR b)  ENIL is likely to spend ~INR3b in FY19 towards (a) the acquisition of TV Today’s Delhi, Y/E Mar 2017 2018E 2019E Mumbai and Kolkata frequencies, and (b) the next batch of phase-3 auctions. We Net Sales 5.6 5.8 7.3 expect new stations from TV Today to generate annual revenue of INR700m-800m in EBITDA 1.3 1.4 2.0 2-3 years, up from the current ~INR300m. PAT 0.5 0.6 1.0  We expect 14% revenue growth in 3Q. For FY18, we estimate 4% revenue growth; EPS (INR) 11.4 11.6 20.1 breakeven of new station should drive 15% EBITDA growth. Over FY17-20, we Gr. (%) -45.5 1.2 73.8 estimate 15% revenue CAGR and 29% EBITDA CAGR. BV/Sh (INR) 179.3 190.2 209.1  RoE (%) 6.7 6.3 10.1 We value the stock at an EV of 20x FY19E EBITDA (~20% premium to Music Broadcast RoCE (%) 5.0 5.4 8.5 Ltd) and maintain our target price of INR910. Post the recent 15% correction, the P/E (x) 66.4 65.7 37.8 stock appears attractive. We upgrade the stock to Buy. P/BV (x) 4.2 4.0 3.6 EV/EBITDA (x) 29.6 25.2 17.4 Expect 14% revenue growth in 3QFY18

Shareholding pattern (%) 1HFY18 performance was marred by demonetization and GST implementation. As On Sep-17 Jun-17 Sep-16 While the impact of demonetization appears to be behind, changes in GST rates Promoter 71.2 71.2 71.2 and compliance-related issues continue to impact ad revenues. Further, the festive DII 4.4 4.3 2.4 season was largely shifted to 2Q in FY18 (v/s 3Q in FY17); thus, ad revenue FII 15.5 15.7 16.9 remained muted in October. Ad revenue from the FMCG sector (contributing ~12% Others 8.9 8.9 9.6 of ENIL’s total ad revenue) plunged 17% in 1HFY18, but some recovery in the FII Includes depository receipts sector, led by major players augurs well. Gujarat election ad spends have been Stock Performance (1-year) subdued, but that shouldn’t impact ENIL’s revenue much, as the contribution of the Ent.Network government sector to its ad revenue has declined from ~14% earlier to 8-9%. Sensex - Rebased 1,020 We expect a revival in ENIL’s ad revenue in November-December 2017 on (1) a low 900 base of November 2016, and (2) Calling Karan, the Karan Johar show that went on 780 air on Ishq FM (and on all ENIL channels) on December 04, 2017. Given the high following of Karan Johar among the youth, we believe this show would boost 660 listenership and latent ad potential. We expect 14% growth in ENIL’s ad revenue in

Jun-17 3QFY18. With a muted 1HFY18, followed by a relatively better 2HFY18, we expect Sep-17 Dec-17 Dec-16 Mar-17 4% growth in FY18 revenue.

22 December 2017 5

Breakeven of new stations by 4QFY18 a big positive New stations (batch-1 of phase-3) contribute 11% of revenue and are currently at ~23% utilization. For breakeven, these stations require capacity utilization of 25- 30%, which the management expects to reach by 4QFY18. The top-8 towns account for ~60% of revenue and ~84% of utilization, driving healthy EBITDA margin. We expect EBITDA to grow 15% in FY18, with 230bp margin jump to ~25%. ENIL is likely to launch another 21 stations (acquired in batch-2 of phase-3) by June 2018.

Ishq stations and untapped markets to help maintain dominance ENIL is likely to spend ~INR3b in FY19, a major portion of which would be towards the acquisition of the Ishq stations (Delhi, Mumbai and Kolkata) – phase-3 license lock-in period expires in March 2018. At present, ENIL operates these channels through sales alliance with TV Today, generating ~INR300m revenue in FY18E. With a market size of INR7b for the three cities, and assuming 10-12% market share, ENIL should be able to garner annual revenue of INR700m-800m in 2-3 years. ENIL would also invest in the next batch of phase-3 auctions in new markets; it already has multiple frequencies in 12 major towns (except Chennai). This should help ENIL maintain its wide reach and dominance in the radio sector.

Expect 15% revenue CAGR and 29% EBITDA CAGR over FY17-20 We estimate 10-11% revenue growth and ~28% EBITDA margin for 2HFY18, driven by (1) breakeven of new stations, (2) growth from existing stations, and (3) margin expansion in non-FCT (free commercial time - Radio) business. However, ENIL’s strategy to have inventory capped at 14minutes/hour in the non-peak season (18minutes/hour in the peak season) constrains near-term revenue growth. We expect 15% revenue CAGR, 29% EBITDA CAGR, and 41% PAT CAGR over FY17-20.

Maintain target price of INR910; upgrade to Buy We value the stock at an EV of 20x FY19E EBITDA (~20% premium to MBL, given its leadership position and growth potential) and maintain our target price of INR910. Post the recent 15% correction, the stock appears attractive at an EV of 17x FY19E EBITDA. Our target price implies 20% upside. We upgrade the stock to Buy.

Valuation summary Methodology Driver (INR m) Multiple (x) Fair Value (INR m) Value/sh (INR) EBITDA FY19 EV/EBITDA 2,018 20 41,073 862 Less Net debt -2,303 -48 Total Value 43,376 910 Shares o/s (m) 47.7 CMP (INR) 759

Upside (%) 20 Source: MOSL, Company

22 December 2017 6

Sector Update | 21 December 2017 Sustainability NEW MANTRA OF INTEGRATED INVESTING

Our previous report India Inc. gearing up for a more constructive approach on Sustainability

We attended a conference on 'Strategic CSR and Sustainability Summit 2017,' which saw participation of representatives of large corporate houses like Reliance ADA Group, , JSW Group, UPL, Idea Cellular and IDFC Group. The event not only proved highly insightful in that a rich blend of sustainability and CRS perspectives were offered, but it also served as a much-needed reminder that while India Inc. is moving progressively to adopt sustainability in corporate culture, a lot still needs to be done to achieve the desirable results. Key highlights of our conference discussions:

India moving progressively on adopting sustainability  Movement toward sustainability has gained traction in India over the last three years after the government introduced a law that requires companies to plough back at least 2% of their net profit on CSR initiatives for the betterment of the society.  Company board meetings now not only focus on growth, but also sustainability and CSR initiatives. Notably, sustainability is gradually becoming part of the business DNA – core to how and why business exists.  Interestingly, corporates have also started acknowledging the benefits that CSR brings along with it. Globally, efforts made to achieve only four of the stated sustainability development goals (SGDs) could open up economic opportunity worth at least USD12t by 2030.  Sustainability reporting is gradually becoming a mainstream among corporates over the last few years. In the long term, this should help to create accountability, ensure activity benchmarking and make goals time-bound. However, this remains a work-in-progress in India – the concept of materiality and disclosure standards varies among corporates, even among those operating in the same industry.  Youth are increasing becoming part of the CSR departments in companies.

What’s on sustainability agenda today?  A lot of emphasis is being placed on community development and opportunity creation to uplift the weaker sections of the society. Education, primitive healthcare, sanitation, job creation and promoting entrepreneurial capabilities for youth are the key focus areas.  Banks are employing technology to reach remote places, where people have little or no access to basic banking.  Corporates have started realising that climate change is not only real but already at hand. Renewable and alternative sources of energy are becoming the focus areas. More ways to drive energy efficiency are being explored.

22 December 2017 7

What more needs to be done?  There is a clear need to understand the disparate viewpoints of stakeholders of CSR. To uplift community development practices and perform well on sustainability, there is a need for a collaborative approach among the participants (i.e. donors and volunteers) – the strength of each partner in the program needs to be identified and synergized to collaborate and bring better results.  It is important to develop a culture in an organization where the focus is on the 3Ps – Profit, Planet and People Approach.  Philanthropic work of the owner of the company and CSR work of the company have to be differentiated. is a classic example for this.  In India, more than 65% power requirements are met via fossil fuels. However, the country does not appear to be well prepared for carbon tax (one of the agenda in COP23).  Corporates believe that individual companies alone cannot make a difference. It is the community that has to be brought together to make a difference. Corporates have to take initiatives to create a self-sustainability movement within the society.  Corporates have to be perceived by the community as a neighbour of choice. For this, they have to do much more than just meeting the statutory compliance norms.

22 December 2017 8

In conversation

1. : To play a critical role in the future of technology; Vineet Nayyar, Vice Chairman  Unveiled a new strategy where company has identified 3 mega trends, 4 key bets and 3 objectives to accelerate growth.  Automation increasing at incredible pace. The new platform created has the ability to reduce work by 80 percent, which is mainly used in telecom sector and is being used by the largest telecom company in the US.  Similarly, in digitization, the technology is undergoing major shift and Indian IT can only survive if they are in the forefront of it. Company has been able to show a pathway and other Indian IT companies are doing the same.  US and European companies are coming to company for setting up systems for them.  With no segment of life likely to remain untouched by technology, the demand is only going to grow. So even if new technology may not be labour intensive but it is going to be huge.  One is optimistic of future of technology and company playing a critical role in it.  In search for growth had overlooked some basic economic fundamentals, which led to reduction in profitability but now confident of getting profitability up and about in 12-24 months, so that it reaches the norms of other tier I companies.  Cutting edge technology could be around 20 percent of biz currently but it is growing fast.  With regards to the pricing environment, new areas have improved but also depends on whether the companies are in the forefront of that.  Comviva doing fine but Lightbridge Communications Corporation (LCC) requires an overhaul.

2. : Expect Q3FY18 to see loan growth of 4- 5% YoY; George Alexander Muthoot, MD  Have seen a little uptick in the assets under management (AUM) growth.  The company has started a new scheme for SME lending at a loan of 12 percent with diminishing rate of interest.  Around 4-5 percent of loan growth should be seen in this quarter.  Would like to keep NIM at 10-12 percent.

3. JYOTHY LABS : Completely geared up for launch of Ayurveda products; MP Ramachandran, Chairman & Managing Director  Completely geared up for the launch of ayurvedic products, personal care products by 2021-2022.  Will launch two more home care products in FY18-FY19.  Targeting around Rs 400-500 crore of revenues in two-three years’ time from ayurvedic products.  Have slashed the prices on some of the items to give effect to the goods and services tax (GST) impact. Have passed on the benefit to the consumers and doing very well.

22 December 2017 9

From the think tank

1. An impossible Fiscal Trinity for Arun Jaitley  Almost five years ago, this newspaper had proposed an impossible trinity of fiscal policy goals which handicaps any Indian government. The idea is worth reiterating at a time when the pattern of voting in rural Gujarat during the recent assembly elections has led to a wave of commentary on how the Narendra Modi government will have to do something for farmers in the next budget if it has to win back the rural voter. The policy trap is as follows: It is impossible for India to simultaneously attain the three goals of keeping farm prices high, retail food prices low, and overall inflation under control through a tight fiscal policy—unless the food sector is radically reformed. This trilemma leads to three difficult policy choices.

2. What industry expected when Modi Government implemented GST  With the introduction of the Goods and Services Tax (GST), industry expected the government to continue to work towards a robust and faster indirect tax system, in its prursuit of improving the ‘Ease of Doing Business’ in India. However, thanks to the scale of the reform, efforts are on to align various existing import-export policies with GST even after six months of its roll-out. A serious issue that cropped up for exporters was the adverse effect on the benefits that were provided by the commerce ministry in the pre-GST regime and the delay caused by the GST network in executing the refund claims. Due to these difficulties, the wafer-thin margins of exporters have been affected, and exporters were compelled to file petitions in high courts.

3. Here is the Financial Investor’s complete wish list for 2018  If financial investors were to write letters to Santa Claus this Christmas, they would probably be tempted to ask for the continuation of the unusual combination of factors that has dominated over the last year: ultra-low market volatility, booming financial-asset values, correlations that lower the cost of portfolio risk mitigation, and promising new opportunities (such as Bitcoin). But before making their wish list, investors should consider the longer-term risks associated with the decoupling of financial markets from economic and policy fundamentals. Investors could be forgiven for hoping for more of the same.

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4. India cannot take shortcuts to development  There are no shortcuts to development. Nevertheless, Indian policymakers may now be tempted to attempt two more, the first two having landed the economy in swamps from which further progress was difficult. The first shortcut, along which policies began to move in the 1990s, was to shoot for GDP (gross domestic product) growth before making progress in human development through public health and primary education. The argument of GDP cheerleaders was that the state needs resources to invest in human development. Therefore, the growth of the economy must precede improvements in human development. Amartya Sen and other economists who pointed out that it must be the other way around, and indeed has been the other way around for the Asian miracle economies and China too, were dismissed as socialist, anti-capitalist, and anti-growth by those on the GDP bandwagon. Now, the hurdles for productivity of enterprises, and for GDP growth, owing to poor levels of education and skills in the country have become evident.

International

5. Bitcoin as Money? Here’s a roadmap for how it’ll happen  When will cryptocurrencies live up to the second part of their name? Now that bitcoin is a mainstream asset, with futures contracts traded at the world’s largest exchange, becoming actual money should be the logical next step. But if you were to ask investors their expectations, the reply in most cases would likely be: “Not in my lifetime.” After all, even as an asset, the digital token’s volatility is a damper. Researchers Pelham Smithers Associates and Albert Maass reckon that bitcoin is 25 times more volatile than stocks, and since it moves in lockstep with shares 94% of the time, only about 4% of an equity portfolio can be substituted without taking more risk for the same reward. So much for storing wealth. Becoming a currency also requires bitcoin to be a medium of exchange. There, the report card is more checkered. Sure, PricewaterhouseCoopers LLP has accepted its first client payment in bitcoin, and there are reports of a townhouse in Essex or a penthouse in Miami being bought with it. But so far it all sounds rather gimmicky. Tokens as a means for exchanging value don’t seem to be gaining much traction.

22 December 2017 11

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CMP TP % Upside EPS (INR) P/E (x) P/B (x) ROE (%) Company Reco (INR) (INR) Downside FY18E FY19E FY20E FY19E FY20E FY19E FY20E FY19E FY20E Automobiles Amara Raja Buy 839 856 2 28.3 34.2 41.9 24.6 20.0 4.8 4.1 17.3 18.1 Ashok Ley. Buy 118 134 14 4.5 6.2 8.2 18.9 14.3 5.1 4.4 20.4 25.2 Buy 3,286 4,197 28 155.4 187.9 217.2 17.5 15.1 5.0 4.4 25.0 26.8 Buy 729 844 16 19.1 26.0 33.7 28.0 21.6 7.1 6.0 20.1 23.2 Bosch Neutral 19,892 19,965 0 457.8 603.0 727.9 33.0 27.3 6.3 5.7 15.2 18.1 CEAT Buy 1,918 2,116 10 82.5 116.9 140.6 16.4 13.6 2.9 2.5 13.0 16.2 Eicher Mot. Buy 30,221 34,653 15 814.7 1,062.7 1,334.6 28.4 22.6 11.6 8.7 35.7 35.0 Endurance Tech. Buy 1,325 1,334 1 27.6 36.7 48.5 36.1 27.3 9.0 7.6 20.5 22.8 Escorts Sell 736 688 -7 35.8 45.9 57.6 16.1 12.8 3.2 2.7 16.8 18.4 Exide Ind Buy 221 254 15 7.9 9.7 11.7 22.9 19.0 3.5 3.1 12.5 13.7 Hero Moto Neutral 3,809 3,819 0 183.1 193.9 213.3 19.6 17.9 6.6 5.7 33.7 31.1 M&M Buy 742 829 12 37.8 43.2 47.7 17.2 15.6 3.1 2.8 14.5 14.6 Mahindra CIE Not Rated 247 - 8.9 11.5 14.5 21.4 17.0 2.6 2.3 9.8 11.4 Maruti Suzuki Buy 9,629 9,866 2 288.1 381.0 447.8 25.3 21.5 7.0 5.9 20.5 23.0 Tata Motors Buy 420 575 37 24.6 64.8 68.6 6.5 6.1 2.1 1.6 13.4 28.3 TVS Motor Neutral 777 764 -2 14.9 25.8 34.9 30.1 22.3 12.5 9.4 26.5 35.6 Aggregate 17.1 15.0 3.9 3.2 22.8 21.6 Banks - Private Buy 549 680 24 18.4 30.8 40.2 17.8 13.7 2.0 1.8 7.3 10.8 DCB Bank Neutral 193 197 2 8.5 10.5 12.8 18.4 15.1 2.3 2.1 11.5 11.8 Equitas Hold. Buy 146 209 43 1.7 5.7 9.9 25.4 14.7 2.2 2.0 2.6 8.2 Buy 108 146 35 5.5 6.6 8.2 16.2 13.1 1.7 1.6 9.6 10.0 HDFC Bank Buy 1,868 2,150 15 68.7 84.7 105.4 22.1 17.7 4.9 4.2 18.8 20.4 ICICI Bank Buy 315 355 13 13.6 17.0 21.8 18.5 14.4 2.4 2.3 8.8 10.5 IDFC Bank Neutral 55 56 2 2.8 3.2 3.4 17.0 16.4 1.2 1.2 6.3 6.9 IndusInd Buy 1,660 2,000 21 60.9 78.6 100.8 21.1 16.5 4.3 3.7 16.9 19.0 J&K Bank Buy 78 100 28 4.1 8.7 13.6 9.0 5.7 0.7 0.7 4.0 8.0 Kotak Mah. Bk Buy 1,011 1,179 17 32.1 41.6 51.9 24.3 19.5 4.4 3.7 14.8 16.5 RBL Bank Buy 514 665 29 16.4 23.0 30.8 22.3 16.7 3.2 2.9 12.4 13.7 South Indian Buy 32 36 14 1.9 3.8 4.9 8.4 6.4 1.2 1.1 6.7 12.6 Buy 310 382 23 17.8 23.3 29.5 13.3 10.5 2.8 2.4 17.3 19.5 Aggregate 19.6 15.5 2.7 2.4 13.9 15.4 Banks - PSU BOB Buy 167 201 20 17.9 22.6 29.7 7.4 5.6 1.0 0.9 6.4 9.4 BOI Neutral 172 201 17 3.2 9.2 17.7 18.8 9.7 0.8 0.8 1.5 4.3 Canara Neutral 368 386 5 16.1 30.3 62.1 12.1 5.9 0.8 0.7 3.4 6.1 Indian Bk Buy 391 438 12 36.7 44.0 50.8 8.9 7.7 1.2 1.1 11.6 12.7 PNB Buy 173 250 44 8.5 13.5 16.0 12.8 10.8 0.9 0.9 4.7 7.1 SBI Buy 317 415 31 14.6 26.8 35.8 11.8 8.8 1.4 1.3 7.0 11.4 Union Bk Neutral 148 175 18 -13.5 6.0 19.5 24.9 7.6 0.5 0.5 -4.7 2.1 Aggregate 11.7 8.5 0.9 0.8 7.9 10.0 NBFCs Aditya Birla Cap Buy 189 231 22 3.7 5.4 7.8 34.8 24.4 4.9 3.7 12.5 12.3 Bajaj Fin. Buy 1,750 2,300 31 45.7 63.7 87.0 27.5 20.1 6.1 5.2 20.2 20.4 Bharat Fin. Under Review 1,004 - 30.3 47.2 64.6 21.3 15.6 4.6 3.7 15.3 19.3 Capital First Buy 702 925 32 32.8 43.7 56.5 16.0 12.4 2.7 2.3 13.2 15.4 Cholaman.Inv.&Fn Buy 1,300 1,500 15 59.2 70.4 85.9 18.4 15.1 4.0 3.3 19.6 19.6 Dewan Hsg. Buy 602 690 15 37.6 46.0 56.0 13.1 10.7 2.1 1.9 14.1 15.3 GRUH Fin. Neutral 502 500 0 9.9 12.0 15.1 41.7 33.3 15.2 12.4 32.8 32.8 HDFC Buy 1,702 2,000 17 51.6 57.1 66.0 29.8 25.8 6.1 5.1 19.3 18.6 HDFC Stand. Life Buy 377 370 -2 4.7 5.4 6.7 70.1 56.0 NA NA 22.7 22.2 Hsg Buy 1,190 1,550 30 83.6 105.1 131.1 11.3 9.1 3.7 3.3 27.6 30.7 L&T Fin Holdings Buy 180 240 33 6.9 10.4 12.9 17.3 14.0 3.6 3.0 14.9 18.9 LIC Hsg Fin Neutral 572 680 19 41.0 46.5 54.5 12.3 10.5 2.3 2.0 17.4 17.2

22 December 2017 12

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CMP TP % Upside EPS (INR) P/E (x) P/B (x) ROE (%) Company Reco (INR) (INR) Downside FY18E FY19E FY20E FY19E FY20E FY19E FY20E FY19E FY20E M&M Fin. Buy 473 500 6 14.2 19.1 24.0 24.8 19.7 3.8 3.5 11.9 14.8 Muthoot Fin Neutral 473 550 16 42.6 42.0 48.1 11.2 9.8 2.4 2.1 23.8 19.9 PNB Housing Buy 1,367 1,750 28 52.5 66.5 88.8 20.6 15.4 3.7 3.2 15.0 16.7 Repco Home Buy 690 750 9 36.0 41.9 50.0 16.4 13.8 3.2 2.7 18.1 17.9 Shriram City Union Buy 2,064 2,650 28 115.6 145.3 173.7 14.2 11.9 2.4 2.1 14.3 15.9 Shriram Trans. Buy 1,437 1,500 4 15.5 11.8 9.7 122.0 148.7 2.6 2.2 15.1 17.4 Aggregate 22.2 18.0 3.9 3.4 17.8 18.7 Capital Goods ABB Sell 1,377 1,230 -11 20.2 28.7 34.7 48.0 39.7 7.9 7.0 11.6 14.6 Bharat Elec. Buy 185 210 14 7.1 8.0 8.6 23.0 21.5 4.7 4.2 17.9 18.1 BHEL Sell 91 78 -15 2.9 3.0 3.9 30.4 23.3 1.0 1.0 3.3 3.3 Blue Star Neutral 800 685 -14 16.5 24.4 31.0 32.7 25.8 9.5 8.7 20.2 27.8 CG Cons. Elec. Buy 272 260 -5 5.2 6.5 7.8 41.9 34.8 23.2 19.0 51.0 49.8 CG Power & Indu. Neutral 91 90 -1 1.4 2.3 3.0 40.1 30.4 1.3 1.3 2.1 3.3 Buy 882 1,150 30 25.3 35.0 39.6 25.2 22.3 6.1 5.6 18.1 22.2 GE T&D Neutral 428 440 3 9.4 11.2 14.0 38.0 30.5 9.3 8.0 21.8 22.6 Buy 549 620 13 11.5 14.3 17.7 38.5 31.1 9.3 8.2 19.5 21.2 K E C Intl Neutral 382 350 -8 14.3 17.6 21.7 21.7 17.6 5.2 4.4 19.5 20.2 L&T Buy 1,254 1,440 15 46.8 54.3 65.1 23.1 19.2 3.2 2.9 12.5 13.3 Neutral 1,239 1,313 6 19.8 31.0 35.3 40.0 35.1 5.7 5.2 9.1 13.1 Solar Ind Neutral 1,183 1,120 -5 26.2 31.3 39.3 37.7 30.1 8.9 1.5 21.4 21.5 Thermax Neutral 1,181 930 -21 29.9 34.4 37.3 34.3 31.6 4.8 4.3 12.6 13.2 Va Tech Wab. Buy 621 745 20 34.5 37.2 41.9 16.7 14.8 2.9 2.6 17.5 16.4 Neutral 649 580 -11 17.5 19.6 22.4 33.1 29.0 5.8 5.1 16.5 16.3 Aggregate 27.9 23.5 3.3 3.0 11.9 12.9 Cement Ambuja Cem. Neutral 269 314 17 6.9 8.4 10.5 32.0 25.6 2.6 2.5 7.0 8.0 ACC Neutral 1,739 1,797 3 52.2 70.9 82.4 24.5 21.1 3.6 3.4 11.1 14.2 Birla Corp. Buy 1,165 1,435 23 32.2 56.7 61.6 20.6 18.9 2.6 2.4 7.3 12.0 Dalmia Bharat Buy 3,255 3,517 8 60.8 83.7 111.7 38.9 29.1 5.3 4.7 10.3 12.7 Grasim Inds. Neutral 1,128 1,302 15 81.9 116.8 133.5 9.7 8.4 1.5 1.3 11.5 14.5 India Cem Neutral 184 188 2 5.8 10.5 12.1 17.4 15.2 1.1 1.0 3.5 6.0 J K Cements Buy 1,065 1,324 24 47.8 61.8 79.1 17.2 13.5 3.6 3.0 17.5 19.2 JK Lakshmi Ce Buy 452 512 13 12.1 19.1 25.2 23.7 17.9 3.5 3.1 9.9 13.9 Ramco Cem Buy 793 853 8 27.1 35.1 44.7 22.6 17.7 4.4 3.8 16.0 17.9 Orient Cem Buy 166 205 24 6.3 9.1 15.2 18.3 10.9 3.1 2.7 12.3 15.6 Prism Cem Buy 120 130 8 2.7 5.0 6.6 24.1 18.2 5.7 4.7 13.7 21.3 Sagar Cements Not Rated 840 - 23.4 47.4 72.2 17.7 11.6 2.1 1.9 6.1 11.3 Shree Cem Buy 17,485 21,852 25 486.2 499.3 751.1 35.0 23.3 6.6 5.6 20.0 17.4 Ultratech Buy 4,344 4,906 13 102.2 147.1 184.0 29.5 23.6 4.5 4.0 11.1 14.2 Aggregate 22.8 18.4 2.9 2.6 12.9 14.2 Consumer Neutral 1,137 1,280 13 21.6 25.8 31.1 44.0 36.5 14.0 12.0 26.9 29.4 Britannia Buy 4,733 5,845 23 84.5 106.9 133.8 44.3 35.4 17.4 14.1 34.0 35.2 Colgate Buy 1,090 1,355 24 23.4 28.1 33.7 38.8 32.3 22.2 20.8 48.8 55.2 Buy 350 410 17 7.7 9.3 10.9 37.7 32.2 10.9 9.7 26.0 27.3 Buy 1,330 1,435 8 26.6 33.2 38.6 40.1 34.5 14.7 12.7 31.7 34.0 Godrej Cons. Neutral 989 1,015 3 21.2 24.5 27.4 40.4 36.0 9.9 8.7 23.8 22.9 GSK Cons. Neutral 6,598 5,400 -18 160.8 182.3 206.5 36.2 32.0 8.7 7.7 21.4 22.6 HUL Buy 1,348 1,500 11 22.8 27.6 32.4 48.9 41.6 44.7 41.4 75.9 88.0 ITC Neutral 263 280 6 9.1 10.0 11.4 26.2 23.1 7.0 6.4 24.4 25.6 Jyothy Lab Neutral 389 365 -6 9.2 10.9 13.1 35.6 29.6 6.6 6.4 15.5 18.3 Neutral 316 340 8 6.5 7.9 9.4 39.9 33.7 15.3 14.3 33.6 37.1 Nestle Neutral 7,916 7,750 -2 128.4 149.0 180.1 53.1 43.9 22.9 20.6 39.0 40.9 Page Inds Buy 24,750 25,580 3 296.6 413.1 544.5 59.9 45.5 33.2 26.6 39.8 44.4

22 December 2017 13

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CMP TP % Upside EPS (INR) P/E (x) P/B (x) ROE (%) Company Reco (INR) (INR) Downside FY18E FY19E FY20E FY19E FY20E FY19E FY20E FY19E FY20E Parag Milk Neutral 297 275 -7 8.9 12.4 16.8 24.0 17.7 3.4 3.0 10.8 13.3 Pidilite Ind. Buy 926 975 5 17.2 20.8 24.0 44.6 38.6 11.8 9.7 24.1 23.9 P&G Hygiene Neutral 9,409 9,267 -2 151.5 176.7 209.4 53.3 44.9 36.8 30.7 64.8 62.9 Prabhat Dairy Not Rated 236 - 3.5 6.4 9.7 36.9 24.3 3.3 3.0 4.9 8.5 United Brew Buy 1,064 1,320 24 14.7 18.0 22.3 59.3 47.7 10.5 9.1 15.5 16.5 Neutral 3,538 2,970 -16 34.9 53.7 73.6 65.9 48.0 18.5 13.8 18.2 20.9 Aggregate 38.8 33.2 11.4 10.1 29.5 30.5 Healthcare Alembic Phar Neutral 526 540 3 21.6 24.9 29.7 21.1 17.7 4.5 3.9 19.9 19.8 Alkem Lab Buy 2,172 2,500 15 68.0 89.5 109.1 24.3 19.9 5.1 4.4 17.0 19.4 Buy 1,505 1,792 19 52.7 64.1 79.2 23.5 19.0 6.8 5.4 26.4 25.7 Aurobindo Buy 683 900 32 44.6 50.3 55.3 13.6 12.4 3.4 2.7 24.6 22.3 Neutral 540 485 -10 6.1 10.1 18.6 53.5 29.0 6.4 5.9 7.2 11.0 Cadila Buy 428 555 30 17.5 23.7 26.4 18.0 16.2 5.3 4.3 23.4 26.1 Neutral 598 600 0 21.1 27.0 33.3 22.1 18.0 3.4 3.0 12.1 13.6 Divis Lab Neutral 1,085 1,100 1 32.4 43.7 52.4 24.8 20.7 5.6 5.0 16.3 21.2 Dr Reddy’s Neutral 2,352 2,575 9 60.6 115.2 144.0 20.4 16.3 3.1 2.7 8.2 14.1 Fortis Health Buy 142 185 30 1.9 4.9 8.4 29.0 16.9 1.1 1.1 1.6 3.9 Glenmark Neutral 563 650 15 37.9 42.8 50.5 13.1 11.1 2.9 2.4 19.6 18.4 Granules Buy 129 200 55 6.9 9.1 13.2 14.2 9.8 2.3 2.1 14.2 15.5 GSK Pharma Neutral 2,453 2,500 2 44.2 54.9 60.6 44.7 40.5 12.2 14.0 22.0 31.4 IPCA Labs Neutral 600 550 -8 18.6 26.5 32.6 22.6 18.4 2.9 2.6 9.2 12.0 Jubilant Life Buy 764 861 13 44.2 55.0 64.4 13.9 11.9 2.9 2.5 18.4 19.2 Lupin Buy 879 1,000 14 37.6 42.7 57.1 20.6 15.4 2.7 2.5 12.0 12.5 India Buy 4,707 5,000 6 139.0 156.2 179.0 30.1 26.3 5.8 5.3 17.1 17.6 Shilpa Medicare Buy 611 797 30 18.1 29.9 37.8 20.4 16.2 4.6 3.8 14.7 20.5 Strides Shasun Buy 828 1,214 47 41.8 69.2 85.3 12.0 9.7 2.4 2.0 12.9 18.3 Buy 529 610 15 14.4 22.9 28.0 23.1 18.9 3.3 3.0 9.2 13.7 Torrent Pharma Neutral 1,358 1,400 3 50.0 61.4 78.5 22.1 17.3 4.7 4.1 18.3 19.9 Aggregate 21.1 17.2 3.2 2.8 15.3 16.3 Infrastructure Ashoka Buildcon Buy 255 260 2 1.8 7.1 16.0 36.2 16.0 2.6 2.4 1.9 7.0 IRB Infra Neutral 233 240 3 22.9 23.2 19.7 10.0 11.8 1.4 1.2 14.1 12.9 KNR Constructions Buy 303 320 6 13.3 14.5 16.0 20.8 18.9 4.0 3.4 19.1 17.5 Sadbhav Buy 399 435 9 14.3 14.5 17.0 27.5 23.5 3.6 3.3 13.8 12.5 Engineering Aggregate 16.4 15.3 1.9 1.7 11.7 11.3 Logistics Allcargo Logistics Buy 192 215 12 10.9 13.3 15.3 14.5 12.5 2.4 2.1 14.1 15.4 Concor Neutral 1,354 1,496 10 42.7 55.2 68.1 24.5 19.9 3.6 3.3 11.5 14.1 Gateway Distriparks Buy 240 282 18 8.8 11.6 14.0 20.6 17.1 2.5 2.4 9.2 11.7 Aggregate 22.3 18.3 3.0 2.8 13.6 15.4 Media Dish TV Buy 81 106 30 0.6 2.2 3.8 36.9 21.5 15.6 11.0 12.5 34.9 D B Corp Buy 340 430 27 21.7 25.4 29.6 13.4 11.5 3.3 2.7 22.8 22.2 Den Net. Neutral 110 90 -18 -2.9 0.1 4.0 1,554.8 27.5 2.5 2.5 -6.4 0.2 Ent.Network Buy 759 910 20 11.6 20.1 31.8 37.8 23.8 4.0 3.6 6.3 10.1 Cable Buy 41 47 14 -0.2 0.8 2.0 54.3 20.7 2.9 2.8 -1.2 5.2 Hind. Media Buy 246 302 23 25.6 30.2 35.6 8.1 6.9 1.3 1.2 15.0 15.3 HT Media Neutral 98 113 15 10.4 11.9 13.6 8.2 7.2 0.9 0.8 10.2 10.6 Jagran Prak. Buy 168 225 34 11.3 13.4 16.2 12.5 10.4 2.6 2.2 17.3 19.3 Music Broadcast Buy 380 469 23 8.7 14.1 17.8 26.9 21.3 3.6 3.2 8.6 12.6 PVR Buy 1,435 1,640 14 27.1 43.0 57.3 33.4 25.0 6.2 5.3 12.4 17.0 Prime Focus Buy 104 130 25 3.1 6.1 9.2 16.9 11.3 4.8 3.7 15.3 24.8 Siti Net. Neutral 26 27 5 -0.8 0.1 0.6 204.3 39.9 4.9 4.8 -14.2 2.4

22 December 2017 14 Click excel icon for detailed Valuation snapshot valuation guide

CMP TP % Upside EPS (INR) P/E (x) P/B (x) ROE (%) Company Reco (INR) (INR) Downside FY18E FY19E FY20E FY19E FY20E FY19E FY20E FY19E FY20E Sun TV Buy 982 1,005 2 28.1 35.7 41.8 27.5 23.5 8.9 8.1 26.4 30.7 Zee Ent. Buy 574 690 20 14.4 17.3 20.6 33.1 27.8 7.0 6.0 19.1 19.6 Aggregate 26.3 20.7 4.7 4.0 17.9 19.4 Metals Hindalco Buy 263 326 24 18.8 26.4 26.9 10.0 9.8 1.8 1.5 13.6 16.5 Hind. Zinc Neutral 304 322 6 22.7 33.5 32.1 9.1 9.5 4.5 3.4 32.3 42.5 JSPL Buy 185 209 13 -15.1 0.5 4.1 408.0 45.5 0.6 0.6 -4.7 0.1 JSW Steel Buy 265 297 12 20.3 24.9 22.9 10.6 11.6 2.4 2.0 19.8 20.2 Nalco Neutral 83 87 5 4.7 5.8 5.9 14.3 14.0 1.5 1.4 8.6 10.1 NMDC Buy 135 187 39 13.2 12.7 13.2 10.6 10.2 1.7 1.6 17.8 15.9 SAIL Sell 87 43 -50 -6.4 -4.3 3.1 NM 27.6 1.0 1.0 -6.9 -4.9 Rain Industries Buy 357 492 38 25.5 38.9 43.0 9.2 8.3 3.2 2.4 25.2 29.7 Vedanta Buy 317 394 24 25.5 44.4 46.3 7.1 6.8 1.8 1.6 15.1 23.8 Neutral 716 672 -6 59.4 65.2 75.8 11.0 9.4 2.0 1.7 17.1 16.6 Aggregate 10.4 9.6 1.6 1.4 15.3 14.9 Oil & Gas BPCL Buy 535 643 20 43.1 52.1 55.6 10.3 9.6 2.9 2.4 25.2 25.8 GAIL Sell 502 378 -25 28.1 31.9 33.6 15.8 14.9 2.1 1.9 12.0 12.6 Buy 828 1,011 22 22.9 33.6 41.3 24.7 20.1 6.0 5.0 17.8 22.1 Gujarat St. Pet. Neutral 206 184 -11 12.1 13.2 15.2 15.6 13.6 2.3 2.1 14.4 14.0 HPCL Buy 427 579 36 36.4 42.8 45.6 10.0 9.4 2.7 2.3 25.1 25.0 IOC Buy 411 541 32 36.2 42.6 45.6 9.7 9.0 1.7 1.5 15.8 16.6 IGL Buy 329 404 23 10.0 11.3 12.9 29.0 25.5 6.7 5.6 22.0 21.0 Neutral 1,119 1,219 9 54.4 53.8 54.5 20.8 20.5 5.3 4.8 27.3 24.4 MRPL Sell 126 110 -13 9.2 11.5 12.3 11.0 10.3 2.0 1.7 15.1 16.7 Buy 358 418 17 29.8 40.5 42.4 8.8 8.4 0.9 0.9 8.0 10.4 ONGC Buy 188 231 23 19.0 22.8 22.5 8.2 8.3 1.1 1.0 10.8 12.5 PLNG Buy 251 312 24 15.0 16.7 20.3 15.0 12.3 3.9 3.3 25.2 23.7 Reliance Ind. Buy 913 1,077 18 56.7 62.1 69.1 14.7 13.2 1.8 1.6 12.1 12.0 Aggregate 11.7 11.0 1.6 1.4 13.5 13.1 Retail Jubilant Food Sell 1,776 1,270 -28 21.4 27.4 36.2 64.7 49.1 13.7 13.6 16.5 20.9 PC Jeweller Buy 441 490 11 15.1 18.4 23.5 23.9 18.7 4.5 3.9 16.5 17.5 Titan Co. Buy 861 850 -1 12.5 15.9 19.9 54.2 43.4 14.6 13.2 23.4 25.5 Aggregate 45.7 36.2 9.6 8.6 20.9 23.8 Technology Cyient Buy 568 600 6 36.0 41.9 45.9 13.6 12.4 2.7 2.5 17.4 18.3 HCL Tech. Neutral 888 970 9 63.2 68.2 70.6 13.0 12.6 3.5 3.2 25.9 25.6 Hexaware Neutral 330 270 -18 16.3 17.0 19.2 19.3 17.1 5.0 4.2 26.4 23.4 Buy 1,022 1,100 8 63.8 67.8 75.7 15.1 13.5 3.7 3.2 21.8 22.5 KPIT Tech Neutral 174 160 -8 11.9 14.1 17.1 12.4 10.2 1.9 1.7 14.1 14.5 L&T Infotech Buy 1,040 1,200 15 62.4 71.8 78.9 14.5 13.2 5.2 4.1 35.6 31.8 Buy 575 600 4 28.5 35.1 43.5 16.4 13.2 3.7 3.3 17.3 21.2 Neutral 751 670 -11 42.0 46.0 50.6 16.3 14.8 2.9 2.7 14.6 17.3 NIIT Tech Neutral 650 600 -8 43.7 50.3 56.1 12.9 11.6 2.2 2.0 15.1 16.4 Persistent Sys Buy 650 780 20 43.3 52.4 60.8 12.4 10.7 2.6 2.5 17.9 20.8 Tata Elxsi Buy 951 1,004 6 33.8 40.2 48.4 23.7 19.6 8.5 7.0 33.6 32.4 TCS Neutral 2,594 2,450 -6 131.8 151.4 158.4 17.1 16.4 6.2 5.3 30.6 33.5 Tech Mah Buy 492 560 14 35.8 37.7 43.1 13.1 11.4 2.5 2.2 18.9 18.2 Wipro Neutral 298 280 -6 19.1 20.1 22.1 14.8 13.5 2.7 2.3 17.0 16.7 Zensar Tech Buy 867 1,020 18 52.8 72.7 80.9 11.9 10.7 2.4 2.1 15.3 18.4 Aggregate 16.1 14.9 3.7 3.4 23.2 22.5 Telecom Bharti Airtel Buy 524 680 30 3.8 6.5 9.5 81.1 55.0 3.1 3.0 2.2 3.7 Bharti Infratel Neutral 361 440 22 16.8 19.2 21.1 18.8 17.1 4.3 4.3 20.2 22.8

22 December 2017 15

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CMP TP % Upside EPS (INR) P/E (x) P/B (x) ROE (%) Company Reco (INR) (INR) Downside FY18E FY19E FY20E FY19E FY20E FY19E FY20E FY19E FY20E Idea Cellular Buy 101 110 9 -16.1 -18.0 -14.3 NM NM 1.9 2.9 -26.6 -41.4 Tata Comm Buy 679 780 15 5.4 18.2 32.8 37.3 20.7 13.2 9.7 10.1 30.0 Aggregate 2,082.1 96.0 3.3 3.3 0.2 3.5 Utiltites Buy 268 335 25 17.5 20.7 24.6 13.0 10.9 6.5 6.2 42.4 47.7 CESC Buy 1,050 1,360 29 89.1 102.1 110.7 10.3 9.5 1.2 1.1 10.7 11.1 JSW Energy Sell 87 49 -43 4.0 3.3 3.6 26.4 23.8 1.3 1.3 6.3 5.0 NTPC Buy 180 211 17 13.4 15.7 17.8 11.5 10.1 1.4 1.3 11.0 11.9 Power Grid Buy 204 261 28 17.4 20.4 21.3 10.0 9.6 1.9 1.6 17.0 17.4 Tata Power Sell 91 72 -21 7.3 7.5 7.8 12.1 11.6 1.9 1.6 16.0 14.6 Aggregate 11.7 10.4 2.0 1.8 16.8 17.3 Others Arvind Neutral 456 425 -7 10.5 16.5 23.2 27.7 19.6 3.1 2.9 7.4 10.9 Avenue Supermarts Sell 1,152 873 -24 12.0 17.5 24.1 66.0 47.8 16.5 14.0 18.2 22.9 Bata India Sell 751 578 -23 15.9 19.3 22.4 39.0 33.4 6.5 5.8 14.6 15.7 BSE Neutral 904 1,100 22 45.3 46.1 54.5 19.6 16.6 1.9 1.6 9.3 8.0 Buy 203 234 15 6.3 6.7 6.9 30.4 29.4 30.7 27.9 100.3 96.1 Coromandel Intl Buy 536 523 -3 24.1 29.0 30.3 18.5 17.7 4.7 4.0 22.5 23.4 Delta Corp Buy 304 257 -15 5.7 8.0 10.3 37.8 29.4 5.1 4.6 12.1 12.9 Eveready Inds. Buy 439 400 -9 14.3 17.4 22.1 25.2 19.8 8.9 7.2 32.1 31.5 Interglobe Neutral 1,139 1,291 13 63.2 75.4 109.1 15.1 10.4 6.7 6.3 46.8 43.0 Indo Count Neutral 122 128 5 8.0 10.7 12.4 11.4 9.8 2.3 1.9 17.0 18.5 Buy 1,278 1,300 2 23.6 26.2 30.5 48.7 41.9 7.0 6.4 13.7 13.7 Kaveri Seed Buy 548 738 35 34.1 41.0 48.1 13.4 11.4 3.9 3.4 23.3 27.4 Manpasand Buy 447 492 10 9.9 15.4 20.5 29.1 21.9 4.1 3.7 8.4 13.5 MCX Buy 958 1,300 36 26.5 39.2 46.8 24.4 20.5 3.7 3.4 10.0 14.4 Monsanto Buy 2,459 3,293 34 105.0 126.6 149.9 19.4 16.4 7.2 6.2 32.5 34.5 Navneet Education Buy 158 209 32 8.4 10.4 12.3 15.2 12.9 4.6 3.9 26.3 27.9 Buy 476 580 22 24.7 36.1 42.3 13.2 11.2 2.5 2.2 13.8 17.7 Quess Corp Buy 1,082 1,170 8 31.1 32.7 44.5 33.1 24.3 5.9 5.0 24.2 16.4 PI Inds. Buy 970 890 -8 29.9 35.6 40.3 27.2 24.1 6.9 5.7 23.0 22.9 Piramal Enterp. Buy 2,868 3,266 14 104.6 149.7 188.7 19.2 15.2 3.1 2.8 11.7 15.3 SRF Buy 1,945 1,992 2 76.7 104.9 132.7 18.5 14.7 3.2 2.8 13.2 16.3 S H Kelkar Buy 266 301 13 6.6 9.7 11.8 27.5 22.5 4.4 3.9 11.3 15.1 Team Lease Serv. Buy 2,262 2,500 11 43.2 64.2 86.3 35.3 26.2 8.5 6.8 17.7 21.5 Trident Buy 93 114 23 8.3 10.4 12.6 8.9 7.4 1.5 1.4 14.5 16.1 TTK Prestige Neutral 7,991 5,281 -34 137.8 176.1 203.2 45.4 39.3 9.9 8.9 18.0 20.7 V-Guard Neutral 232 167 -28 4.5 6.0 6.7 39.0 34.8 12.6 10.1 26.9 28.8

22 December 2017 16

MOSL Universe stock performance

Company 1 Day (%) 1M (%) 12M (%) Company 1 Day (%) 1M (%) 12M (%) Automobiles Repco Home 2.1 11.7 30.2 Amara Raja 0.7 4.4 -5.5 Shriram City Union -1.5 0.3 15.8 Ashok Ley. -0.1 2.6 51.7 Shriram Trans. 0.2 13.4 77.5 Bajaj Auto -0.5 -0.2 27.1 Capital Goods Bharat Forge -0.2 2.7 56.8 ABB -0.6 -0.4 32.2 Bosch 0.1 3.3 2.9 Bharat Elec. 0.0 4.2 43.8 CEAT 4.2 4.3 66.6 BHEL 1.3 4.5 13.4 Eicher Mot. -0.1 -0.6 41.7 Blue Star 0.1 14.8 73.9 Endurance Tech. 3.5 11.1 133.5 CG Cons. Elec. 0.2 11.8 88.2 Escorts -0.2 5.8 157.0 CG Power & Inds Sol. 3.5 5.7 57.5 Exide Ind 3.0 8.9 27.9 Cummins 1.2 3.6 9.1 Hero Moto 1.8 3.5 25.8 GE T&D 0.2 5.3 41.7 M&M -3.7 4.7 24.4 Havells -1.6 8.4 70.4 Mahindra CIE -0.6 4.5 35.5 K E C Intl 3.6 26.9 177.5 Maruti Suzuki -1.1 14.3 87.2 L&T 1.9 2.6 40.1 Tata Motors -0.4 -0.9 -10.3 Siemens 3.6 3.6 12.7 TVS Motor -0.1 9.8 109.9 Solar Ind 0.4 -0.6 73.8 Banks - Private Thermax -0.5 12.2 49.6 Axis Bank -1.0 0.5 20.0 Va Tech Wab. 3.0 13.1 32.8 DCB Bank -0.5 7.4 81.2 Voltas 2.0 3.5 109.8 Equitas Hold. 1.1 0.2 -1.2 Cement Federal Bank -0.3 -3.6 61.0 Ambuja Cem. 0.4 2.6 32.7 HDFC Bank -0.1 1.2 58.3 ACC 0.8 2.0 33.7 ICICI Bank -0.3 -1.7 36.7 Birla Corp. 0.6 4.5 87.5 IDFC Bank 2.3 0.4 -9.3 Dalmia Bharat 0.6 7.8 117.9 IndusInd -0.5 0.8 52.8 Grasim Inds. 0.2 -3.4 63.1 J&K Bank 1.6 3.9 27.5 India Cem 2.9 7.7 62.1 Kotak Mah. Bk -0.2 -1.8 40.5 J K Cements -0.4 7.2 61.1 RBL Bank -0.3 0.6 49.4 JK Lakshmi Ce -1.4 13.4 33.0 South Indian -0.3 0.3 66.9 Ramco Cem -1.8 11.6 47.6 Yes Bank -0.4 -0.5 36.3 Orient Cem 0.2 0.3 33.8 Banks - PSU Prism Cem 1.4 7.7 46.2 BOB 0.5 -7.2 6.6 Sagar Cements 0.5 2.6 34.1 BOI -1.0 -14.5 57.7 Shree Cem -1.7 3.1 24.0 Canara 0.8 -6.1 30.8 Ultratech 0.0 4.4 36.1 Indian Bk 0.1 -4.5 84.0 Consumer PNB 1.7 -6.8 43.9 Asian Paints 0.2 -2.1 31.3 SBI -0.2 -4.3 24.1 Britannia -0.1 -1.8 66.3 Union Bk -0.1 -11.9 15.7 Colgate 0.7 4.4 20.2 NBFCs Dabur -0.5 3.1 28.8 Aditya Birla Cap 3.1 -7.8 Emami -0.2 4.6 34.4 Bajaj Fin. -0.9 -3.1 122.0 Godrej Cons. 0.5 3.9 36.8 Bharat Fin. 0.4 3.1 73.6 GSK Cons. 1.5 9.6 32.1 Capital First 1.5 -0.7 34.7 HUL -1.0 5.6 69.3 Cholaman.Inv.&Fn 0.0 0.4 44.1 ITC -0.1 2.6 16.3 Dewan Hsg. -0.9 -3.2 154.6 Jyothy Lab 0.9 12.2 12.8 GRUH Fin. 0.4 -0.1 60.3 Marico -0.5 3.8 26.7 HDFC 0.5 0.6 37.6 Nestle -0.4 2.1 35.2 HDFC Stand. Life 0.5 -2.3 Page Inds 0.3 7.7 79.9 Indiabulls Hsg -0.6 1.1 85.7 Parag Milk 1.5 25.4 14.7 L&T Fin.Holdings 1.1 1.2 119.6 Pidilite Ind. 4.2 10.7 56.7 LIC Hsg Fin 0.5 -4.8 5.3 P&G Hygiene -0.4 2.2 38.7 M&M Fin. -1.2 8.3 84.9 Prabhat Dairy -0.3 45.4 151.8 Muthoot Fin 6.5 4.5 76.2 United Brew -1.0 -0.6 36.1 PNB Housing 1.3 -1.3 56.4 United Spirits 1.0 10.4 86.3

22 December 2017 17

MOSL Universe stock performance

Company 1 Day (%) 1M (%) 12M (%) Company 1 Day (%) 1M (%) 12M (%) Healthcare Vedanta -0.3 1.2 40.1 Alembic Phar -0.6 2.1 -16.0 Tata Steel 1.8 0.6 76.7 Alkem Lab 1.3 11.1 32.6 Oil & Gas Ajanta Pharma 2.8 12.1 -14.5 BPCL 0.6 4.5 30.8 Aurobindo -0.5 -3.7 2.6 GAIL 0.4 9.5 55.7 Biocon 1.6 28.7 69.2 Gujarat Gas -0.7 -1.7 53.5 Cadila 1.8 -4.6 16.1 Gujarat St. Pet. 0.9 -1.0 51.8 Cipla -0.1 -2.9 6.3 HPCL -1.1 2.0 51.8 Divis Lab 2.3 4.0 -5.4 IOC 0.3 3.8 33.0 Dr Reddy’s -0.2 -1.6 -22.7 IGL 0.2 6.1 83.6 Fortis Health 1.2 10.3 -23.3 Mahanagar Gas 0.3 0.5 44.2 Glenmark 0.7 -5.0 -40.2 MRPL 1.7 0.3 37.0 Granules 0.9 2.7 15.1 Oil India 1.2 1.1 8.9 GSK Pharma 1.6 -1.5 -9.9 ONGC 0.1 4.0 -6.7 IPCA Labs 4.8 10.8 11.9 PLNG -0.1 -0.9 39.4 Jubilant Life 3.1 18.2 26.8 Reliance Ind. -0.6 -2.1 72.0 Lupin 0.4 4.9 -40.1 Retail Sanofi India 1.7 5.1 11.0 Jubilant Food -0.5 2.5 116.6 Shilpa Medicare -1.8 -4.7 -20.9 PC Jeweller -1.2 22.3 132.3 Strides Shasun 1.8 0.2 -22.1 Titan Co. -0.3 5.4 169.6 Sun Pharma 0.3 -1.8 -14.0 Technology Torrent Pharma 0.0 6.7 2.5 Cyient 1.6 2.3 15.9 Infrastructure HCL Tech. 1.9 6.0 8.2 Ashoka Buildcon 7.0 19.3 61.6 Hexaware 1.6 -1.8 59.5 IRB Infra.Devl. -0.1 1.5 17.0 Infosys 0.8 5.7 1.8 KNR Construct. 10.6 10.1 78.7 KPIT Tech 1.3 0.8 26.0 Sadbhav Engg. 5.1 17.5 48.7 L&T Infotech 2.2 6.6 53.1 Logistics Mindtree -0.3 13.4 16.5 Allcargo Logistics 1.2 12.2 12.2 Mphasis 3.0 3.3 35.7 Concor 0.6 -0.1 55.0 NIIT Tech 1.5 2.0 50.5 Gateway Distriparks 0.0 -9.0 8.0 Persistent Sys 0.4 -0.4 6.5 Media Tata Elxsi -1.0 2.1 35.0 Dish TV 2.0 6.3 -3.0 TCS 0.2 -3.1 12.2 D B Corp -1.0 -5.9 -2.9 Tech Mah -0.2 -0.4 3.5 Den Net. -3.5 18.7 66.4 Wipro 0.3 1.3 28.7 Ent.Network -2.3 -4.7 -0.3 Zensar Tech 2.0 -1.3 -10.4 Hathway Cab. -0.1 18.3 20.1 Telecom Hind. Media 2.0 1.2 -9.7 Bharti Airtel -0.9 4.1 73.4 HT Media 0.8 -1.5 32.9 Bharti Infratel -0.8 -5.7 7.5 Jagran Prak. 0.9 2.7 -1.4 Idea Cellular 3.4 0.5 38.7 Music Broadcast 0.9 2.5 Tata Comm -0.3 -2.8 7.5 PVR 0.7 5.0 36.0 Utiltites Prime Focus 0.1 2.5 54.2 Coal India -0.6 -2.2 -8.2 Siti Net. 1.4 4.0 -31.2 CESC 4.1 3.3 68.8 Sun TV 4.5 15.8 100.5 JSW Energy 3.2 8.4 44.8 Zee Ent. -1.0 6.3 30.1 NTPC 0.9 -1.6 10.0 Metals Power Grid 0.3 -1.5 11.1 Hindalco 1.7 0.6 55.8 Tata Power 0.0 -2.0 19.6 Hind. Zinc 0.2 -3.8 13.8 Arvind 0.3 6.4 34.4 JSPL 0.3 7.4 158.4 Avenue Super. 0.9 3.6 JSW Steel 0.9 -1.2 66.7 Bata India 0.1 -2.1 79.2 Nalco 1.6 -0.6 38.4 BSE 1.4 -5.0 NMDC -0.6 6.5 6.7 Castrol India -3.2 3.9 9.2 Rain Industries -0.7 17.5 563.0 Coromandel Intl 1.1 5.3 89.8 SAIL 2.5 4.5 69.2 Delta Corp -1.9 15.7 187.9

22 December 2017 18

MOSL Universe stock performance

Company 1 Day (%) 1M (%) 12M (%) Others Eveready Inds. 0.9 7.9 100.9 Interglobe -2.2 -2.4 37.1 Indo Count 4.7 -1.4 -23.2 Info Edge 0.2 6.2 54.3 Kaveri Seed -0.5 -0.2 37.9 Manpasand 1.3 8.1 63.1 MCX -0.5 -0.5 -24.3 Monsanto 0.3 -1.2 8.9 Navneet Educat. -0.8 1.2 43.2 Oberoi Realty -0.9 -3.3 56.6 PI Inds. -1.3 18.3 18.5 Piramal Enterp. 0.5 9.5 84.7 Quess Corp 0.9 19.2 67.8 SRF 1.3 10.1 31.1 S H Kelkar 3.4 4.6 -9.2 Team Lease Serv. 11.0 19.5 160.3 Trident 2.1 6.7 58.4 V-Guard 0.7 0.0 97.4

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N O T E S

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THEMATIC/STRATEGY RESEARCH GALLERY

REPORT GALLERY RECENT INITIATING COVERAGE REPORTS

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` DIFFERENTIATED PRODUCT GALLERY

Disclosures: The following Disclosures are being made in compliance with the SEBI Research Analyst Regulations 2014 (herein after referred to as the Regulations). Motilal Oswal Securities Ltd. (MOSL) is a SEBI Registered Research Analyst having registration no. INH000000412. MOSL, the Research Entity (RE) as defined in the Regulations, is engaged in the business of providing Stock broking services, Investment Advisory Services, Depository participant services & distribution of various financial products. MOSL is a subsidiary company of Motilal Oswal Financial Service Ltd. (MOFSL). MOFSL is a listed public company, the details in respect of which are available on www.motilaloswal.com. MOSL is registered with the Securities & Exchange Board of India (SEBI) and is a registered Trading Member with National Stock Exchange of India Ltd. (NSE) and Limited (BSE), Metropolitan Stock Exchange Of India Ltd. 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Registration details of group entities.: MOSL: SEBI Registration: INZ000158836; CDSL: IN-DP-16-2015; NSDL: IN-DP-NSDL-152-2000; Research Analyst: INH000000412. AMFI: ARN 17397. Investment Adviser: INA000007100. Motilal Oswal Asset Management Company Ltd. (MOAMC): PMS (Registration No.: INP000000670) offers PMS and Mutual Funds products. Motilal Oswal Wealth Management Ltd. (MOWML): PMS (Registration No.: INP000004409) offers wealth management solutions. *Motilal Oswal Securities Ltd. is a distributor of Mutual Funds, PMS, Fixed Deposit, Bond, NCDs, Insurance and IPO products. * Motilal Oswal Commodities Broker Pvt. Ltd. offers Commodities Products. * Motilal Oswal Real Estate Investment Advisors II Pvt. Ltd. offers Real Estate products. * Motilal Oswal Private Equity Investment Advisors Pvt. Ltd. offers Private Equity products 13 December 2016 21