RESULT UPDATE

BAJAJ ELECTRICALS Yet another disappointing quarter

India Equity Research| Engineering and Capital Goods

EDELWEISS 4D RATINGS Bajaj Electricals’ (BJE) Q1FY15 numbers were disappointing with overall Absolute Rating HOLD revenue growing mere 12%. While consumer durables (CD) and lighting grew 17% and 7%, respectively, engineering & project (E&P) grew 7%. Rating Relative to Sector Performer EBITDA margin at 4.2% jumped 160bps due to low base effect and Risk Rating Relative to Sector Medium Sector Relative to Market Overweight reduced E&P loss. PAT came in at INR56mn against INR7mn in Q1FY14, wherein profitability had been impacted by higher depreciation due to new regulatory requirement. While the E&P business is improving, MARKET DATA (R: BJEL.BO, B: BJE IN) deterioration in the consumer business was surprising. As we factor in CMP : INR 287 scenario of loss of market share in consumer business (mainly lighting) Target Price : INR 301 along with margin dip in both CD and lighting, we trim our FY15E and 52-week range (INR) : 385 / 150 FY16E earnings 24% and 14%, respectively. Hence, downgrade to ‘HOLD’ Share in issue (mn) : 100.3 with revised target price of INR301 (earlier INR350). M cap (INR bn/USD mn) : 29/ 475 Avg. Daily Vol.BSE/NSE(‘000) : 202.3

Lighting business margin disappoints; E&P turnaround delayed SHARE HOLDING PATTER N (%) While we were expecting consumption slowdown to weigh on revenue, loss of market Current Q4FY14 Q3FY14 share in certain key product categories including lighting (driven by higher demand for Promoters * 65.9 66.1 66.2 LED against CFL earlier) along with drop in profitability was a negative surprise. MF's, FI's & BK’s 3.9 3.8 2.9 Revenue at INR8.9bn grew 12% led by CD (up 17%) despite impact of certain seasonal FII's 16.3 14.7 15.4 products and E&P (up 7%) where execution was delayed on certain sites. This has Others 14.0 15.4 15.5 pushed back the complete turnaround of E&P business. EBITDA margin at 4.2% * Promoters pledged shares : 1.7 improved 160bps due to low base in addition to reduced loss in E&P business. PAT at (% of share in issue) INR56mn was impacted by operating performance and higher depreciation. E&P business order backlog at INR22.4bn provides visibility for over 1.5 years. PRIC E PERFORMANCE (%) EW Capital Stock Nifty Outlook and valuations: Challenging; downgrade to ‘HOLD’ Goods Index Continued disappointment in E&P business has now been compounded by dismal 1 month (1.0) 3.1 (6.7) consumer business, as it is losing market share in certain product categories, impacting 3 months 14.7 15.3 19.6 profitability. While Q1FY15 was marred by consumption slowdown, drop in profitability 12 months 97.7 32.8 78.0

was higher than our expectation. Given uncertainties over the medium term in the consumer business along with delayed turnaround of E&P business, we downgrade our recommendation to ‘HOLD’ from ‘BUY’ with a revised target price of INR301. We retain ‘Sector Performer’ rating. The stock trades at 22.2x and 14.3x FY15E and FY16E earnings, respectively. Rahul Gajare Financials (INR mn) +91 22 4063 5561 [email protected] Year to March Q1FY15 Q1FY14 % change Q4FY14 % change FY14 FY15E FY16E

Net revenues 8,876 7,890 12.5 12,710 (30.2) 40,298 46,344 54,360 Amit Mahawar EBITDA 369 202 82.1 535 (31.1) 818 2,928 4,126 +91 22 4040 7451 [email protected] Adj net profit 56 7 740.3 374 (84.9) (53) 1,297 2,015 Diluted EPS (INR) 0.6 0.1 739.5 3.7 (84.9) (0.5) 12.9 20.1 Swarnim Maheshwari +91 22 4040 7418 Diluted P/E (x) - 22.2 14.3 [email protected]

EV/EBITDA (x) 37.7 10.6 7.6 ROAE (%) (0.7) 17.0 22.3 July 31, 2014 Edelweiss Research is also available on www.edelresearch.com, Bloomberg EDEL , Thomson First Call, Reuters and Factset. Edelweiss Securities Limited

Engineering and Capital Goods

Conference call: Key highlights Lighting • Overall lighting revenue was impacted by flat sales in lighting and ~17% growth in luminaries.

• Lighting margins were impacted by a combination of slowdown in CFL market, higher demand for LED, increase in input price for CFLs and inability to pass on the same to consumers.

• While the company has decent market share in LED-based luminaries, its market share in LED lights low. It now plans to increase its focus on LED lighting.

• Management further downgraded the margin guidance in lighting to lower than FY14 levels (5.1%) against earlier expectation of 6% during FY15E.

Consumer durables • Profitability was impacted in CD due to fans and Morphy Richards, where revenue grew 19% and 7.5%, respectively.

• Management has downgraded FY15 margin guidance from 8.5-9.0% earlier to that of FY14 (7.7%) levels or marginally higher.

E&P • The management maintained its earlier 25% revenue guidance for FY15 for E&P business.

• While management had indicated that it is broadly done with cost overruns to close old projects with most of the provisions being booked during FY14 and expects profitability to improve over the next two years. However, given delay at certain sites, the turnaround in our view has been delayed by one more quarter with profits expected in Q3FY15.

• BJE has strong order backlog of over INR22.4bn, providing visibility of over ~1.5 years.

Other key highlights • Management maintained its overall revenue guidance of between INR47.5 and INR50.0bn during FY15.

• The company plans to incur capex of INR0.9bn in FY15E towards R&D centre (approx INR0.5bn) and balance towards factory, office space and equipment.

• BJE is likely to spend INR630mn on advertisements during FY15.

2 Edelweiss Securities Limited Bajaj Electricals

Table 1: Segmental snapshot Year to March Q1FY15 Q1FY14 % change Q4FY14 % change FY14 FY13 % change Revenues (INR mn) Lighting 1,686 1,574 7.2 2,975 (43.3) 9,530 8,604 10.8 Consumer durables 5,046 4,321 16.8 5,330 (5.3) 19,252 18,246 5.5 Engineering & Projects 2,142 1,994 7.4 4,403 (51.3) 11,501 6,909 66.5 Total 8,875 7,888 12.5 12,707 (30.2) 40,282 33,759 19.3 Segment rev. mix (%) Lighting 19.0 20.0 23.4 23.7 25.5 Consumer durables 56.9 54.8 41.9 47.8 54.0 Engineering & Projects 24.1 25.3 34.6 28.6 20.5 EBIT (INR mn) Lighting 25 77 (67.5) 89 (71.9) 485 584 (16.9) Consumer durables 346 403 (14.2) 191 81.8 1,478 1,745 (15.3) Engineering & Projects (59) (259) NA (205) NA (1,032) (1,243) NA Total 312 221 40.9 74 320.9 931 1,085 (14.2) Segment EBIT mix (%) Lighting 8.0 34.6 119.4 52.1 53.8 Consumer durables 111.0 182.2 257.1 158.7 160.8 Engineering & Projects (19.0) (116.8) (276.5) (110.8) (114.5) Segment EBIT margin (%) Lighting 1.5 4.9 3.0 5.1 6.8 Consumer durables 6.9 9.3 3.6 7.7 9.6 Engineering & Projects (2.8) (13.0) (4.7) (9.0) (18.0) Total EBIT margins 3.5 2.8 0.6 2.3 3.2 Source: Company, Edelweiss research

Chart 1: Lighting revenues & margins was impacted due to slowdown in CFL sales 3,500 15.0

2,800 12.0

2,100 9.0 (%) (INR mn) (INR 1,400 6.0

700 3.0

0 0.0 Q1FY09 Q3FY09 Q1FY10 Q3FY10 Q1FY11 Q3FY11 Q1FY12 Q3FY12 Q1FY13 Q3FY13 Q1FY14 Q3FY14 Q1FY15 Revenue EBIT Margins

Source: Company, Edelweiss research

3 Edelweiss Securities Limited Engineering and Capital Goods

Chart 2: CD revenue was led by 20% growth in fans 6,000 16.0

4,800 14.2

3,600 12.4 (%)

(INR mn) (INR 2,400 10.6

1,200 8.8

0 7.0 Q1FY09 Q3FY09 Q1FY10 Q3FY10 Q1FY11 Q3FY11 Q1FY12 Q3FY12 Q1FY13 Q3FY13 Q1FY14 Q3FY14 Q1FY15 Revenue EBIT Margins

Chart 3: Losses in E&P segment continues 5,000 18.0

4,000 9.0

3,000 0.0 (%)

(INR mn) (INR 2,000 (9.0)

1,000 (18.0)

0 (27.0) Q1FY09 Q3FY09 Q1FY10 Q3FY10 Q1FY11 Q3FY11 Q1FY12 Q3FY12 Q1FY13 Q3FY13 Q1FY14 Q3FY14 Q1FY15 Revenue EBIT Margins

Chart 4: Overall sales and EBITDA margin movement 14,000 14.5

11,200 11.7

8,400 8.9 (%)

(INR mn) (INR 5,600 6.1

2,800 3.3

0 0.5 Q1FY09 Q3FY09 Q1FY10 Q3FY10 Q1FY11 Q3FY11 Q1FY12 Q3FY12 Q1FY13 Q3FY13 Q1FY14 Q3FY14 Q1FY15 Revenue EBITDA margin

Source: Company, Edelweiss research

4 Edelweiss Securities Limited Bajaj Electricals

Financial snapshot (INR mn) Year to March Q1FY15 Q1FY14 % change Q4FY14 % change FY14 FY15E FY16E Net revenues 8,876 7,890 12.5 12,710 (30.2) 40,298 46,344 54,360 Raw material 6,746 6,177 9.2 10,466 (35.5) 32,016 36,299 41,886 Staff costs 473 402 17.8 417 13.5 1,860 1,885 2,212 Other expenses 1,288 1,110 16.1 1,293 (0.3) 5,604 5,231 6,137 Total expenditure 8,508 7,688 10.7 12,175 (30.1) 39,480 43,416 50,234 EBITDA 369 202 82.1 535 (31.1) 818 2,928 4,126 Depreciation 82 40 104.0 64 28.5 248 319 357 EBIT 287 162 76.6 471 (39.2) 571 2,608 3,769 Other income 23 19 20.0 89 (74.4) 153 186 218 Interest 233 164 42.3 226 3.4 783 850 965 Profit before tax 76 17 339.9 334 (77.2) (60) 1,945 3,022 Tax 20 11 86.8 (39) (150.5) (7) 648 1,007 Core profit 56 7 740.3 374 (84.9) (53) 1,297 2,015 Extraordinary items Net profit 56 7 740.3 374 (84.9) (53) 1,297 2,015 Adjusted net profit 56 7 740.3 374 (84.9) (53) 1,297 2,015 Equity capital (FV INR 2) 200 199 200 200 200 200 No. of shares (mn) 100 100 100 100 100 100 Diluted EPS (INR) 0.6 0.1 739.5 3.7 (84.9) (0.5) 12.9 20.1 Direct costs 76.0 78.3 82.3 79.4 78.3 77.1 Employee cost 5.3 5.1 3.3 4.6 4.1 4.1 Other operating expenses 14.5 14.1 10.2 13.9 11.3 11.3 EBITDA 4.2 2.6 4.2 2.0 6.3 7.6 Adjusted net profit 0.6 0.1 2.9 (0.1) 2.8 3.7 Tax rate 26.0 61.3 (11.7) 10.9 33.3 33.3

Change in Estimates FY15E FY16E New Old % change New Old % change Comments Net Revenue 46,344 46,340 0.0 54,360 54,353 0.0 EBITDA 2,928 3,425 (14.5) 4,126 4,472 (7.8) EBITDA Margin 6.3 7.4 7.6 8.2 Factoring loss of market share in consumer business (mainly lighting) along with margin dip in both CD and lighting. Core profit 1,297 1,708 (24.1) 2,015 2,338 (13.8) PAT Margin 2.8 3.7 3.7 4.3 Capex 600 600 0.0 500 500 0.0

5 Edelweiss Securities Limited Engineering and Capital Goods

Company Description Incorporated as Radio Lamp Works in July 1938, the company changed its name to Bajaj Electricals in October 1960. The 71-year old Bajaj Group company operates through five strategic business units—home appliances, fans, lighting, luminaries, and engineering & projects.

The company has two manufacturing facilities, one at Chakan for fans, and another at Ranjangaon for galvanised material. The company sources the manufacture of CFL bulbs through its associate company where BJE has acquired equity interest. It outsources all other home appliances products like steam irons and toasters through its dedicated manufacturers located across the country.

Investment Theme With its consumer facing business growing steadily, the company is now focused more on growing its E&P division. BJE is the largest small appliances company in India and the leader in the small domestic appliances market. By virtue of tie ups with global majors like Morphy Richards (UK) and Nardi (Italy), the company competes with premium players like Philips and Kenstar, and has been able to create a niche in the premium segment. Its products like mixers, irons, OTG, water heaters and room coolers are leading products in their respective products ranges.

The company’s distribution reach is far wider than its competitors, and is efficiently managed in terms of logistics and supply chain. BJE outsources most of its manufacturing. It has long-term relations with its vendors, dating back several decades, and has exclusive arrangements with 70% vendors. With such a set up in place, the company is able to focus on its core competencies, i.e., marketing and distribution.

Key Risks The market in which BJE primarily operates consists of large unorganised players with a number of small and medium sized players. Over dependence on vendors or vendor buy out by competition is a key risk. Further, intense competition in the consumer durable segment can squeeze margins.

Increase in prices of key raw materials such as steel and zinc can hamper margins of the E&P division. Greater contribution of E&P business is likely to increase the debt levels in the form of higher working capital that this business demands. Excess competition can put pressure on margin. This could go against the company’s forecasts of margin improvement.

6 Edelweiss Securities Limited Bajaj Electricals

Financial Statements

Key Assumptions Income statement (INR mn) Year to March FY13 FY14 FY15E FY16E Year to March FY13 FY14 FY15E FY16E Macro Income from operations 33,876 40,298 46,344 54,360 GDP(Y -o-Y %) 5.0 4.8 5.4 6.3 Materials costs 26,680 32,016 36,299 41,886 Inflation (Avg) 7.4 6.2 5.5 6.0 Employee costs 1,673 1,860 1,885 2,212 Repo rate (exit rate) 7.5 8.0 7.8 7.3 Other manufacturing expenses 4,416 5,604 5,231 6,137 USD/INR (Avg) 54.5 61.0 58.0 56.0 Total operating expenses 32,768 39,480 43,416 50,234 Company EBITDA 1,108 818 2,928 4,126 Revenue growth (% yoy) Depreciation & Amortization 145 248 319 357 Lighting Segment 13 11 11 12 EBIT 963 571 2,608 3,769 Lighting 21.8 2.9 6.1 10.1 Other income 169 153 186 218 Fittings/ Luminaries 2.0 21.6 16.3 14.1 Interest expenses 690 783 850 965 Consumer Durable Segment 22 5 14 15 Profit before tax 443 (60) 1,945 3,022 Fans 10.0 5.1 12.2 11.2 Provision for tax 178 (7) 648 1,007 Appliances 28.8 4.1 15.3 17.3 Net profit 265 (53) 1,297 2,015 Engineering & Projects Segment (17) 67 27 24 Extraordinary income/ (loss) 247 - - - Lighting Segment 7 5 5 5 Profit After Tax 512 (53) 1,297 2,015 Consumer Durable Segment 9 8 7 8 Shares outstanding (mn) 100 100 100 100 Engineering & Projects Segment (17) (9) 4 6 Diluted EPS (INR) 2.6 (0.5) 12.9 20.1 Tax rate (%) 25.7 33.3 33.3 33.3 Dividend per share (INR) 2.0 1.5 2.0 3.0 Net borrowings (INR mn) (271) 1,843 500 501 Dividend payout (%) 75.2 (281.3) 15.4 14.8 Capex (INR mn) 608 500 600 500

Depreciation as % of gross block 4.9 7.2 7.5 7.5 Common size metrics Year to March FY13 FY14 FY15E FY16E Operating expenses 96.7 98.0 93.7 92.4 EBITDA margins 3.3 2.0 6.3 7.6 Net profit margins 0.8 (0.1) 2.8 3.7

Growth ratios (%) Year to March FY13 FY14 FY15E FY16E Revenues 9.3 19.0 15.0 17.3 EBITDA (53.3) (26.1) 257.9 40.9 Net profit (77.5) NM NM 55.4 EPS (77.5) NM NM 55.4

7 Edelweiss Securities Limited Engineering and Capital Goods

Balance sheet (INR mn) Cash flow metrics As on 31st March FY13 FY14 FY15E FY16E Year to March FY13 FY14 FY15E FY16E Equity capital 200 200 200 200 Operating cash flow 1,422 (65) 1,361 1,652 Reserves & surplus 7,087 6,896 7,993 9,709 Investing cash flow (1) (765) (700) (600) Shareholders funds 7,286 7,096 8,193 9,909 Financing cash flow (1,457) 868 (549) (763) Short term debt 1,254 2,137 2,137 2,137 Net cash flow (35) 38 112 290 Long term debt 346 1,306 1,806 2,307 Capex (608) (500) (600) (500) Borrowings 1,600 3,444 3,944 4,445 Dividends paid (324) (234) (199) (299) Sources of funds 8,808 10,286 11,883 14,100 Share issuance/(buyback) 12 41 - - Tangible assets 2,264 2,459 2,740 2,883

CWIP (incl. intangible) 59 59 59 59 Profitability & efficiency ratios Total net fixed assets 2,323 2,518 2,798 2,941 Year to March FY13 FY14 FY15E FY16E Non current investments 298 673 773 873 ROAE (%) 3.7 (0.7) 17.0 22.3 Cash and equivalents 501 544 656 946 ROACE (%) 11.4 6.3 25.2 31.0 Inventories 4,212 4,467 5,072 6,082 Inventory day 53 49 48 49 Sundry debtors 9,379 12,427 13,945 16,662 Debtors days 100 99 104 103 Loans and advances 2,132 2,020 1,919 1,919 Payable days 149 156 164 158 Other current assets 2,649 4,024 4,024 4,024 Cash conversion cycle (days) 5 (8) (12) (6) Total current assets (ex cash) 18,372 22,938 24,960 28,688 Current ratio 1.5 1.4 1.5 1.5 Sundry creditors and others 11,905 15,462 17,105 19,049 Debt/EBITDA 1.4 4.2 1.3 1.1 Provisions 782 925 199 299 Debt/Equity 0.2 0.5 0.5 0.4 Total current liabilities & 12,686 16,387 17,305 19,348 Adjusted debt/equity 0.2 0.5 0.5 0.4 Net current assets (ex cash) 5,686 6,551 7,655 9,340 Interest coverage 1.4 0.7 3.1 3.9 Net Deferred tax (79) (253) (253) (253)

Uses of funds 8,808 10,286 11,883 14,100 Operating ratios Book value per share (INR) 73.1 71.2 82.2 99.4 Year to March FY13 FY14 FY15E FY16E Total asset turnover 3.8 4.2 4.2 4.2

Free cash flow (INR mn) Fixed asset turnover 16. 5 17.1 17.8 19.3 Year to March FY13 FY14 FY15E FY16E Equity turnover 4.7 5.6 6.1 6.0 Net profit 265 (53) 1,297 2,015

Depreciation 145 248 319 357 Valuation parameters Others 841 1,034 850 965 Year to March FY13 FY14 FY15E FY16E Gross cash flow 1,251 1,228 2,466 3,337 Diluted EPS (INR) 2.6 (0.5) 12.9 20.1 Less: Changes in WC (172) 1,294 1,104 1,684 Y-o-Y growth (%) (77.5) NM NM 55.4 Operating cash flow 1,422 (65) 1,361 1,652 CEPS (INR) 4.1 2.0 16.2 23.8 Less: Capex 608 500 600 500 Diluted PE (x) 108.5 NM ) 22.2 14.3 Free cash flow 815 (566) 761 1,152 Price/BV (x) 3.9 4.0 3.5 2.9 EV/Sales (x) 0.9 0.8 0.7 0.6

EV/EBITDA (x) 1.0 3.5 1.1 0.8 Dividend yield (%) 0.7 0.5 0.7 1.0

Pe er comparison valuation Market cap Diluted PE (X) Price/BV (X) ROAE (%) Name (USD mn) FY15E FY16E FY15E FY16E FY15E FY16E Bajaj Electricals 475 22.2 14.3 3.5 2.9 17.0 22.3 Havells India 2,469 25.0 20.6 7.2 5.7 32.0 30.9 Median 23.6 17.4 5.3 4.3 24.5 26.6 AVERAGE 23.6 17.4 5.3 4.3 24.5 26.6 Source: Edelweiss research

8 Edelweiss Securities Limited Bajaj Electricals

Additional Data

Directors Data Shekhar Bajaj Chairman R P Singh Independent Non -Executive Director V B Haribhakti Independent Non -Executive Director Harsh Vardhan Goenka Independent Non -Executive Director Ajit Gulabchand Independent Non -Executive Director Indu Shahani Independent Non -Executive Director Ashok Jalan Independent Non -Executive Director Anant Bajaj Joint Managing Director Madhur Bajaj Madhur Bajaj Promoter & Non -Executive Director

Auditors - Dalal & Shah *as per last annual report

Holding – Top10 Perc. Holding Perc. Holding Jamnalal sons pvt lt 22.34 Bajaj holdings and i 16.65 Bajaj shekhar 7.68 Hsbc bank mauritius 4.95 Reliance capital ass 4.37 Bajaj anant 4.2 Bajaj kiran 3.19 Mondrian em mrk sm c 2.57 Hind musafir agcy pv 2.02 Bajaj auto emp welfa 1.86

*in last one year

Bulk Deals Data Acquired / Seller B/S Qty Traded Price

No Data Available

*in last one year

Insider Trades Reporting Data Acquired / Seller B/S Qty Traded 09 Jun 2014 Anant Bajaj Sell 100000.00 09 Jun 2014 Pooja Bajaj Buy 100000.00 21 Feb 2014 Shekhar Bajaj - Self Sell 500000.00 21 Feb 2014 Kiran Bajaj - Self Buy 500000.00

*in last one year

9 Edelweiss Securities Limited RATING & INTERPRETATION

Company Absolute Relative Relative Company Absolute Relative Relative reco reco risk reco reco Risk ABB India REDUCE SU L Bajaj Electricals HOLD SP M BGR Energy HOLD SU M Bharat Forge BUY SO L Bharat Heavy Electricals REDUCE SU M Crompton Greaves BUY SP M Cummins India BUY SO L Greaves Cotton BUY SO M Havells India BUY SO M Kalpataru Power BUY SO M KEC International BUY SO M Larsen & Toubro BUY SO M Praj Industries BUY None None Siemens HOLD SP L Thermax BUY SP L Voltas BUY SO L

ABSOLUTE RATING

Ratings Expected absolute returns over 12 months

Buy More than 15%

Hold Between 15% and - 5%

Reduce Less than -5%

RELATIVE RETURNS RATING

Ratings Criteria Sector Outperformer (SO) Stock return > 1.25 x Sector return

Sector Performer (SP) Stock return > 0.75 x Sector return

Stock return < 1.25 x Sector return

Sector Underperformer (SU) Stock return < 0.75 x Sector return

Sector return is market cap weighted average return for the coverage universe within the sector

RELATIVE RISK RATING

Ratings Criteria

Low (L) Bottom 1/3rd percentile in the sector

Medium (M) Middle 1/3rd percentile in the sector

High (H) Top 1/3rd percentile in the sector

Risk ratings are based on Edelweiss risk model

SECTOR RATING

Ratings Criteria Overweight (OW) Sector return > 1.25 x Nifty return

Equalweight (EW) Sector return > 0.75 x Nifty return

Sector return < 1.25 x Nifty return

Underweight (UW) Sector return < 0.75 x Nifty return

10 Edelweiss Securities Limited Bajaj Electricals

Edelweiss Securities Limited, Edelweiss House, off C.S.T. Road, Kalina, Mumbai – 400 098. Board: (91-22) 4009 4400 , Email : [email protected] Vikas Khemani Head Institutional Equities vikas.khemani@edel weissfin .com +91 22 2286 4206

Nischal Maheshwari Co-Head Institutional Equities & Head Research [email protected] +91 22 4063 5476

Nirav Sheth Head Sales [email protected] +91 22 4040 7499

Coverage group(s) of stocks by primary analyst(s): Engineering and Capital Goods ABB India, BGR Energy, Bharat Heavy Electricals, Bharat Forge, Bajaj Electricals, Crompton Greaves, Greaves Cotton, Havells India, KEC International, Cummins India, Kalpataru Power, Larsen & Toubro, Praj Industries, Siemens, TD Power Systems, Thermax, Triveni Turbine, VA Tech Wabag, Voltas

Recent Research

Date Company Title Price (INR) Recos

31 -Jul -14 KEC Slow off the mark, but margin 120 Buy International matrix intact; Result Update 30 -Jul -14 Bharat Forge Stellar all round performance; 721 Buy Result Update 28 -Jul -14 Havells India Bright prospects; 1211 Buy Result Update

Distribution of Ratings / Market Cap

Edelweiss Research Coverage Universe Rating Interpretation

Buy Hold Reduce Total Rating Expected to

Rating Distribution* 151 44 9 205 Buy appreciate more than 15% over a 12-month period * 1 stocks under review Hold appreciate up to 15% over a 12-month period > 50bn Between 10bn and 50 bn < 10bn

Reduce depreciate more than 5% over a 12 -month period Market Cap (INR) 144 56 5

11 Edelweiss Securities Limited Engineering and Capital Goods

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12 Edelweiss Securities Limited Bajaj Electricals

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