sign in sign up
<<
Home , Fortis Healthcare

End of the Week Update

India Weekly Dashboard

April 24, 2020 Contents

Page Section Title number 1 Our Views 4 2 Market Update 7 3 Sectoral Update 3.1 Financial Services 10 3.2 Telecom, Media and Tech 13 3.3 Pharma 16 3.4 Healthcare 18 3.5 Auto 20 3.6 Aviation 22 3.7 Steel 24 3.8 Power and Infrastructure 26 3.9 Consumer and Retail 29 3.10 Real Estate 32 NovaDhruva Team 33

Disclaimer: This presentation is for information and illustrative purpose only. This presentation should not be relied upon to take any decisions, including investment decisions. Neither we nor any of our affiliates shall be liable for any damage, loss, injury, whether direct or indirect, that may be caused to you as a result of any investment made based on this presentation. This presentation is neither an offer to buy or sell or deal nor a solicitation of any offer to buy or sell or deal in securities, financial products, investments, etc. This information is neither addressed to nor should it be presented in any jurisdiction where such presentation will entail any liability or requirement of registration or approval on us. Even though the information is drawn from reliable sources, we neither guarantee nor assure the accuracy, completeness or authenticity of the information provided by us in this presentation. Information contained in this presentation is subject to change without any prior notice. The information provided in this presentation is not investment advice.

2 1. Our Views Our Views Economic Relief Package – A Necessity but a Difficult Balancing Act

We are in an extraordinary moment in the known history of mankind. And it is indeed both unfortunate and fortunate that we have no experience in handling a crisis of this kind – medically, socially or economically. Governments across the globe are doing their best to handle the impact of the crisis, but there is no denying that business activities all over have come to a halt.

In , while small entrepreneurs, self-employed segment, daily wage-earners and contract workers are the worst hit, this pandemic also has severe consequences on the Government’s own financial health.

According to our calculation, based on certain assumptions of activity levels and time to recovery, the government’s tax revenue will be lower by approximately ₹5.5 lac crores for the current financial year. It includes gains from the lower oil prices of estimated ₹1.5 lac crore. This is computed on current budgeted tax revenue collection for FY21 of ₹24.23 lac crore. Given the market situation, some large non-tax revenue items like disinvestment and others could be lower by ₹2.5 lac crore.

In total, the revenues could be down by approximately 4% of GDP. Further, the additional expenditure being incurred to manage the pandemic and other immediate support could be ₹2 lacs crore, which is another 1% of GDP. So, unless the expenses are recalibrated, the fiscal deficit of the country could be 8-9% of GDP. And this doesn’t consider the cost of any serious economic relief package, or the negative impact on state government finances and on income of state-owned undertakings. Further, lower tax revenues may continue for a couple years.

Policy-makers are challenged with no prior experience of handling a situation of this magnitude. The only experience they can draw upon is possibly from the 2008 Global Financial Crisis (GFC). Looking back, just ahead of GFC, our fiscal deficit was at 2.5% and the current account deficit was at 1.3% as oil was hovering around $80. Currency was at ₹41 to a US$. To counter the negative fallout of global slowdown on the Indian economy and reduced exports, government then chose growth over fiscal stability. Stimulus packages announced included tax relief, increased public expenditure, and monetary and liquidity measures.

The fiscal stimulus for 2008-10 at 3.5% of GDP costed ₹1.86 lac crore. Interest rates were slashed from 9.00% to 4.75% during Oct 2008-April 2009. The 10y g-sec yield dropped from 9% to 5% by end 2008. Fiscal accommodation led to a surge in fiscal deficit from 2.5% in 2007-08 to 6.5% of GDP in 2009-10. The gross tax to revenue came down from 11.9% in 2008 to 9.6% in 2010 - the effect on tax revenue lasted for quite a few years.

4 Our Views Economic Relief Package – A Necessity but a Difficult Balancing Act

Unfortunately, the impact of these expansionary measures was felt for a long time. The fiscal spends and the low interest rates fueled inflation and imports. Current account deficit deteriorated by 2012 and rupee plunged from ₹44.00 in August 2011 to ₹68.80 in August 2013. India’s 10y g-sec yields rose from 5% in 2008 to 9% in 2013. The mounting twin deficit coupled with NPA challenges of banks resulted in economic growth slowing down to pre- crisis level in FY12-FY14. It wouldn’t be incorrect to say that the real economic crisis hit India not in 2008-2009, but in 2012-2014.

Therefore, in the current situation, to fund the fiscal deficit, apart from the conventional methods, the government could consider options such as a long-term financing support from multilateral agencies as zero-coupon rupee loan payable over 25 years. With global interest rates nearing zero, this structure should work well. The government could also ask Indian temples to monetize 10-20% of their gold reserve without paying any tax and deposit it into zero-coupon 25-year government bonds. Estimated gold reserves of Indian temples is ~$1trn which doesn’t yield them anything. With current high gold prices in the international market, temples can convert their gold into liquid assets.

In the present scenario, the economic policy making has added complexities - emotions and the lives of people are inter-twined with the decisions. There is no visibility on how long the pandemic will last. While its essential to kick start the economy, should we compromise on short-term growth, and manage better our fiscal deficit, inflation and health of the banking system? We do need to be careful about the legacy that we will leave behind. This is going to be a long-drawn battle and may need multiple doses of support. It is important to be measured and targeted when providing medication to pull a patient out of emergency.

Sunil Sanghai Founder & CEO NovaDhruva Capital Private Ltd.

5 2. Market Update Market Update Key Market Trends Global and Indian Indices Performance Rebased to 100 Last 1 Year Rebased to 100 Last 1 Month 140 2,000 140 2,000

Indices (both 120 1,500 1,500 Global and 120 Indian) have 100 1,000 1,000 been hit by the COVID 19 100 pandemic… 80 500 500

60 0 80 0 24-Apr 06-Jul 17-Sep 29-Nov 10-Feb 24-Apr 24-Mar 30-Mar 05-Apr 11-Apr 17-Apr 24-Apr NIFTY Volume Nifty Sensex Dow Jones NASDAQ FTSE Nikkei Hang Seng (RHS) -Mn Return (%) Current Level 1D 1W 1M 3M 6M 1Y Nifty 9,154 (1.7%) (1.2%) 17.3% (25.3%) (21.0%) (21.9%) Sensex 31,327 (1.7%) (0.8%) 17.4% (24.7%) (19.8%) (19.8%) 1 Dow Jones 23,515 0.2% (3.0%) 13.6% (18.9%) (12.8%) (11.6%) 1 Nasdaq 8,641 (0.3%) (2.2%) 14.4% (5.5%) 7.6% 11.0% 1 FTSE 5,827 1.0% 0.7% 7.0% (23.2%) (20.5%) (22.0%) Nikkei 19,262 (0.9%) (3.2%) 6.5% (19.2%) (15.5%) (13.2%) Hang Seng 23,831 (0.6%) (2.3%) 5.2% (14.7%) (10.6%) (20.0%) Indian Sectoral Performance Return (%) Current Level 1D 1W 1M 3M 6M 1Y …with the same Nifty Bank 19,587 (3.4%) (5.3%) 14.5% (37.3%) (33.4%) (34.4%) trend being Nifty Financial Services 9,432 (3.8%) (4.8%) 12.0% (34.6%) (29.3%) (24.3%) observed in Nifty FMCG 28,637 (0.5%) (1.9%) 19.6% (9.0%) (9.6%) (6.5%) all sectors in India Nifty Pharma 9,518 1.4% 3.9% 44.0% 14.8% 23.0% 0.6% Nifty IT 12,816 (2.4%) 1.3% 8.0% (22.2%) (14.0%) (21.7%) Nifty Auto 5,377 (1.6%) (5.1%) 14.6% (35.0%) (32.7%) (37.8%) Nifty Media 1,122 (3.6%) (2.0%) 8.7% (40.6%) (35.2%) (53.1%) Although the Indian Nifty Metal 1,645 (2.9%) (9.4%) 9.5% (41.2%) (31.8%) (46.0%) indices have Nifty PSU Bank 1,263 (3.7%) (4.0%) (3.3%) (48.4%) (45.1%) (60.2%) recovered from their Nifty Private Bank 10,543 (3.4%) (6.0%) 16.5% (38.7%) (35.2%) (37.9%) nadir, they closed Nifty Realty 178 (4.2%) (5.4%) 4.1% (45.9%) (32.9%) (32.9%) lower this week BSE Telecom amid weak global 1,078 (1.5%) (2.4%) 20.7% (12.6%) 16.3% 4.7% sentiments and led BSE Healthcare 15,422 1.4% 3.6% 36.9% 9.3% 19.6% 6.5% by a fall in banks and financial Liquidity Position (USD mn) services Last 1 Week 23-Apr-20 22-Apr-20 21-Apr-20 20-Apr-20 19-Apr-20 18-Apr-20 17-Apr-20 Net Liquidity 63,009 62,036 61,992 63,000 65,001 64,999 62,713 Absorption through RBI 94,845 92,011 91,908 93,119 95,158 95,156 92,860 Reverse Repo Operations 2 MIBOR (%) 4.50% 4.50% 4.49% 4.53% NA NA 4.58% Selling pressure from institutional Trading Activity by FII/DIIs in Capital Market Segment (USD mn) investors continued this week with Last 1 Week 24-Apr-20 23-Apr-20 22-Apr-20 21-Apr-20 20-Apr-20 17-Apr-20 16-Apr-20 FII/FPIs selling c. FII/FPI (27.1) (15.1) (173.0) (272.7) (34.7) (182.2) (380.3) USD 520 mn and DII (130.0) 44.5 112.7 (8.9) (103.1) 69.9 172.1 DIIs selling c. USD 85 mn of investments Total (157.1) 29.4 (60.3) (281.6) (137.8) (112.3) (208.2)

Source: Bloomberg as at 4pm IST, April 24, 2020; 1As of April 23, 2020, 2Financial Benchmarks India Overnight Mumbai Interbank Outright Rate

7 Market Update Key Market Trends India Government and Corporate Bond Yields (%) 9.0% Last 1 Year 9.0% Last 1 Month Over the last week, 8.5% 8.5% both Corporate as 8.0% 8.0% well as G-Sec yields (13%) have softened 7.5% 7.5% (3%)

RBI announced 7.0% 7.0% yesterday that it will conduct INR 10,000 6.5% (17%) 6.5% (2%) Cr worth of 6.0% 6.0% purchase and sale of Apr-19 Jul-19 Oct-19 Jan-20 Apr-20 24-Mar 31-Mar 08-Apr 16-Apr 24-Apr G-Secs under 10YR AAA Rated Corporate Bond Index 10YR G-Sec Operation Twist on 27th April, 2020 with Yield (%) Current 1D 1W 1M 3M 6M 1Y the aim to decrease 1YR AAA Rated Corp. Bond 6.08% 6.08% 6.31% 6.44% 6.29% 6.61% 7.87% yields on 1YR G-Sec 4.12% 4.07% 4.28% 5.31% 5.70% 5.47% 6.58% long-term bonds 3YR AAA Rated Corp. Bond 6.35% 6.36% 6.66% 6.93% 6.85% 7.03% 7.98% 3YR G-Sec 4.71% 4.68% 4.99% 5.78% 6.23% 5.82% 7.05% 5YR AAA Rated Corp. Bond 6.83% 6.69% 7.08% 7.31% 7.18% 7.33% 8.31% 5YR G-Sec 5.72% 5.59% 5.99% 6.45% 6.61% 6.27% 7.35% 10YR AAA Rated Corp. Bond 7.46% 7.44% 7.62% 7.68% 7.79% 7.88% 8.60% 10YR G-Sec 6.17% 6.05% 6.35% 6.30% 6.58% 6.50% 7.43% Currency Market Snapshot % Change in FX Current FX Rate 1D 1W 1M 3M 6M 1Y USD-INR 76.45 (0.5%) (0.1%) (0.5%) (6.7%) (7.3%) (8.6%) EUR-INR 82.19 (0.0%) 0.6% 0.4% (4.2%) (4.2%) (4.8%) GBP-INR 94.07 (0.2%) 1.1% (4.9%) (0.8%) (3.4%) (3.9%) Oil prices fell JPY-INR 0.71 (0.6%) 0.3% (3.6%) (8.0%) (8.0%) (12.0%) sharply on 21st April SGD-INR 53.62 (0.4%) (0.0%) (2.0%) (1.6%) (3.0%) (4.2%) on account of CNY-INR 10.80 (0.3%) 0.0% (0.2%) (4.4%) (7.1%) (3.8%) subdued global demand and Commodity Market Snapshot shortage of storage for the produce % Change Current 1D 1W 1M 3M 6M 1Y Oil WTI Crude (USD/barrel) 16.16 (2.1%) (35.4%) (38.3%) (70.0%) (70.7%) (74.0%) ICE Brent Crude (USD/barrel) 21.35 0.1% (24.0%) (28.2%) (63.6%) (64.2%) (69.1%) Gold Spot Gold (USD/ounce) 1,729.41 (0.1%) 2.8% 5.9% 10.0% 14.9% 35.6% India InvITs and REIT Performance Rebased to 100 Rebased to 100 Last 1 Year Last 1 Month 160 125 24% 140 29% 15% 120 17% 11% 100 100 80 60 (39%) 40 75 Apr-19 Jul-19 Oct-19 Jan-20 Apr-20 24-Mar 31-Mar 08-Apr 16-Apr 24-Apr IRB InvIT IndiGrid InvIT Embassy REIT % Change Current Price 1D 1W 1M 3M 6M 1Y InvITs Indigrid 95.80 (1.3%) 1.4% 11.1% 2.3% 7.8% 28.6% IRBInvIt 33.86 0.9% 10.9% 24.3% (33.7%) (34.0%) (38.9%) REIT Embassy Office Parks 370.32 0.1% 1.9% 15.4% (11.5%) (7.7%) 17.2% Source: Bloomberg as at 4pm IST, April 24, 2020

8 3.1 Sectoral Update – Financial Services Sectoral Update – Financial Services India Financial Services Update

India – Bank Stocks (1m return) India – NBFC Stocks (1m return)

HDFC Bank 22.2% HDFC 5.0%

ICICI Bank 12.9% (20.1%)

KMB 7.5% Shriram Transport 37.8%

Axis Bank 33.3% Mahindra Finance (12.8%)

Indusind 22.6% L&T Finance 22.8%

Yes Bank (24.0%) Shriram City Union (17.1%)

Trading Comps (INR mn)

Net Income ROE P/E P/BV Name M.cap Mar-21 Mar-22 Mar-21 Mar-22 Mar-21 Mar-22 Mar-21 Mar-22

Banks Comps

HDFC Bank 5,157,256 277,675 348,012 17.2% 17.4% 18.1x 14.2x 2.6x 2.2x

Kotak Mahindra Bank 2,377,596 96,789 119,113 13.0% 14.0% 24.9x 20.2x 3.1x 2.7x

ICICI Bank 2,173,545 199,923 246,483 16.4% 17.1% 10.9x 8.8x 1.7x 1.5x

Axis Bank 1,142,736 127,446 157,874 13.0% 14.4% 9.8x 7.8x 1.2x 1.1x

Indusind Bank 266,284 51,300 52,829 5.3% 13.2% 5.2x 5.0x 0.8x 0.7x

Median 13.0% 14.4% 10.9x 8.8x 1.7x 1.5x

NBFC Comps

HDFC 2,744,415 182,798 218,119 13.6% 14.5% 16.8x 12.5x 2.6x 2.4x

Bajaj Finance 1,192,200 67,508 88,379 19.5% 21.5% 18.6x 13.7x 3.1x 2.5x

Shriram Transport 151,988 27,599 35,245 14.5% 15.8% 5.3x 4.2x 0.7x 0.6x

L&T Finance 118,272 23,394 28,058 14.2% 14.9% 5.5x 4.6x 0.7x 0.6x

Mahindra Finance 87,003 15,826 19,648 12.2% 13.6% 5.5x 4.4x 0.6x 0.6x

Shriram City Union 47,936 12,615 14,144 15.9% 15.6% 3.8x 3.4x 0.6x 0.5x

Median 14.3% 15.2% 5.5x 4.5x 0.7x 0.6x

Source: Bloomberg as at 4pm IST, April 24, 2020; Note: All values on consolidated basis

10 Sectoral Update – Financial Services India – Insurance and Asset Management Update

India – Life Insr. India – General Insr. India – AMCs (1m return) (1m return) (1m return)

HDFC Life 15.1% ICICI Lomb. 33.6% HDFC AMC 19.8%

SBI Life 24.3%

New India 45.7% Nippon 0.7% ICICI Pru 32.3%

Trading Comps (INR mn)

P/BV P / EV1 RoA RoE Life M. Cap. Mar-21 Mar-22 Mar-21 Mar-22 Mar-21 Mar-22 Mar-21 Mar-22

HDFC Life 917,889 11.8x 10.0x 3.5x 2.9x 0.9% 1.0% 17.1% 17.5%

SBI Life 681,192 6.5x 5.5x 2.2x 1.9x 0.8% 0.8% 14.5% 15.3%

ICICI Pru 484,632 6.2x 5.9x 1.7x 1.4x 0.8% 0.8% 15.7% 16.6%

P/BV P / E RoA RoE General M. Cap. Mar-21 Mar-22 Mar-21 Mar-22 Mar-21 Mar-22 Mar-21 Mar-22

ICICI Lomb. 518,042 7.0x 5.9x 33.6x 27.9x 3.7% 3.9% 21.9% 22.7%

New India 188,455 0.5x 0.5x NA NA NA NA 6.1% 7.1%

P / AUM P / E RoA RoE Asset M. Cap. Mgmt. Co. Mar-21 Mar-22 Mar-21 Mar-22 Mar-21 Mar-22 Mar-21 Mar-22

HDFC AMC 518,119 11.1% 9.6% 42.6x 37.5x 33.4% 34.5% 33.4% 34.5%

Nippon 132,874 5.3% 4.6% 21.4x 18.8x 18.1% 24.9% 23.0% 25.1%

Source: Bloomberg as at 4pm IST, April 24, 2020; 1 EV refers to Embedded Value

11 3.2 Sectoral Update – Telecom, Media and Tech Sectoral Update – Telecom, Media and Tech India Tech Update 1 Month Share Price Performance Large Cap IT Midcap IT and BPO Software and Consumer Internet Hexaware 25% Intellect HCL 5% 54% FirstSource 20% IndiaMart 18% 2% L&T Services 5% Oracle 17% TCS 2% L&T Infotech 0% Infoedge 15% TechM (2%) (2%) Just Dial 13% NIIT Tech (5%) Newgen 7% (3%) (7%) MakeMyTrip (11%) Trading Comparables¹

Market EV/Sales EV/EBITDA P/E EBITDA Margin cap EV Sales 3 yr. Fwd INR mn INR mn FY20 FY21 FY20 FY21 FY20 FY21 CAGR FY20 FY21 Large Cap IT 6,823,900 6,555,959 4.1x 3.8x 15.6x 14.0x 21.6x 19.1x 6% 26% 27% 2,802,417 2,619,647 2.8x 2.6x 11.6x 10.4x 17.1x 15.4x 7% 24% 25% 1,270,267 1,202,634 1.7x 1.6x 7.3x 6.8x 11.8x 11.3x 11% 23% 23% 1,015,555 780,536 1.3x 1.2x 6.6x 6.2x 11.3x 10.4x 3% 19% 20% 486,258 424,212 1.1x 1.1x 7.1x 6.4x 11.4x 11.0x 8% 16% 17% Midcap IT and BPO 249,659 236,144 2.2x 2.0x 11.8x 10.4x 16.7x 15.0x 12% 19% 19% 125,660 113,990 1.3x 1.2x 7.0x 6.6x 11.1x 10.6x 10% 19% 18% 120,742 113,678 2.0x 1.8x 10.1x 9.2x 14.8x 13.7x 11% 20% 20% 128,425 123,631 1.5x 1.3x 9.8x 8.5x 16.8x 14.0x na 15% 16% 83,518 82,718 1.3x 1.2x 8.6x 7.7x 12.3x 10.9x 11% 15% 15% 69,741 60,742 1.4x 1.3x 8.3x 7.1x 15.2x 13.0x 11% 17% 18% 23,382 27,373 0.7x 0.6x 4.3x 3.8x 6.8x 5.9x 8% 16% 16% Software 174,897 146,736 3.0x 2.9x 6.4x 6.0x 10.8x 9.8x 3% 46% 48% 9,575 9,698 0.7x 0.6x 16.0x 4.6x nm 8.2x 9% 4% 13% 8,059 6,531 0.9x 0.8x 4.4x 3.7x 8.0x 6.5x 15% 21% 21% Consumer Internet 285,107 278,974 20.5x 18.6x 68.7x 60.4x nm nm 14% 30% 31% 104,280 89,734 1.6x 1.9x nm nm nm nm 18% nm nm 63,300 56,522 8.9x 7.6x 36.7x 30.7x 41.5x 33.5x 18% 24% 25% 21,405 20,827 2.2x 2.4x 8.0x 9.0x 8.4x 8.1x 2% 27% 27% Industry Update

▪ In response to US President Donald Trump's immigration ban, NASSCOM stated it would make recommendations to consider critical technology workers from India under the essential category, complying with the guidelines released by US Agencies ▪ TCS to deepen the remote working model occasioned by the Covid 19 pandemic and aims to have only 25% staff in office by 2025 ▪ Versé Innovation, which operates online news and content platform Dailyhunt, raised c.USD 23.4 mn as part of its Series G funding round from Alpha Wave, Bytedance, Advent and Goldman Sachs ▪ Itilite Technologies, a software-as-a-service company focused on business travel, has raised USD 13 mn in a Series B funding round from California-based Greenoaks Capital Dubai-based Vy Capital, Matrix Partners India and others ▪ Tata Capital managed private equity fund, Tata Capital Growth Fund II invested USD 5 mn in Mumbai-based Indusface an application security-focused software-as-a-service company

Note: ¹Financial year ending March Source: Bloomberg as at 4pm IST on April 24, 2020; News run, VCCircle

13 Sectoral Update – Telecom, Media and Tech India Telecom and Media Update 1 Month Share Price Performance Telecom Media and Entertainment

Reliance Industries 33% Network18 38% Sun TV 24% 23% Zee 13% 5% Dish TV 2% INOX (21%) Bharti Infratel (3%) PVR (25%)

Trading Comparables¹

Market EV EV/Sales EV/EBITDA P/E EBITDA Margin cap Sales 3 yr. Fwd INR mn INR mn FY20 FY21 FY20 FY21 FY20 FY21 CAGR FY20 FY21

Telecom

8,982,780 11,156,120 1.9x 1.9x 12.8x 10.9x 20.6x 17.6x 6% 15% 18%

2,696,409 4,065,363 4.7x 4.1x 11.3x 9.1x nm nm 11% 41% 45%

281,140 288,561 1.9x 1.8x 3.9x 3.7x 8.9x 8.5x 4% 49% 49%

114,942 1,145,256 2.5x 2.3x 8.8x 6.3x nm nm 13% 29% 36%

Media and Entertainment

139,414 129,944 1.6x 1.5x 5.3x 5.2x 7.9x 8.1x 7% 30% 29%

148,530 121,713 3.4x 3.3x 5.3x 5.2x 10.2x 10.0x 3% 64% 63%

49,018 62,271 1.8x 1.8x 7.1x 7.9x 33.7x 51.6x 8% 25% 23%

22,161 23,118 1.6x na 20.4x na nm na na 8% na

24,080 82,062 1.2x 1.1x 4.3x 4.7x 17.0x 22.2x 8% 27% 24%

8,746 34,276 1.0x 0.9x 1.7x 1.6x nm 7.2x 3% 58% 58%

Industry Update

▪ Cellular Operators Association of India wrote to various states, urging them to issue “requisite instructions in the state/UT to enable ‘mobile recharging retailers’ to open their outlets for offering telecom services to the public” ▪ Airtel and Vodafone Idea increased the prepaid validity of their low-income subscribers till May 3 with Jio extending the validity upto May 3 for all its subscribers ▪ RIL, and Facebook announced the signing of binding agreements for an investment of c.USD 5.7 bn by Facebook for 9.99% stake in the digital services arm of RIL- Jio Platforms Ltd. valuing the digital services business of RIL at c.USD 60 bn ▪ Concurrent with the investment by Facebook, Jio Platforms, Reliance Retail and WhatsApp entered into a commercial partnership to accelerate Reliance Retail’s New Commerce business on the JioMart platform using WhatsApp ▪ Long Stop Date for merger of Indus and Bharti Infratel extended from 24-Apr-20 to 24-Jun-20 ▪ Florida Retirement System bought 0.5% stake in Zee Entertainment for c.USD 9.4 mn

Note: ¹Financial year ending March Source: Bloomberg as at 4pm IST on April 24, 2020; News run, VCCircle

14 3.3 Sectoral Update – Pharma Sectoral Update – Pharma India Pharmaceutical Update Trading Comparables

All amounts in INR mn` EV/Sales EV/EBITDA PER % change in MCap Company Name M. Cap EV TTM 1 Yr Fwd TTM 1 Yr Fwd TTM 1 Yr Fwd from prev. week 6.2% 1,164,968 1,191,420 3.8x 3.3x 18.4x 14.5x 29.1x 22.4x Dr. Reddy’s 1.9% 665,112 678,736 4.0x 3.6x 28.5x 15.9x 35.3x 26.7x Divi’s Labs 4.0% 643,867 629,797 11.9x 10.0x 32.8x 27.1x 47.8x 38.5x 0.2% 483,179 502,215 3.0x 2.7x 14.2x 13.7x 29.0x 25.1x 0.6% 428,880 447,480 7.1x 5.4x 26.5x 19.0x 54.2x 35.5x Torrent Pharma 8.2% 411,294 460,001 5.9x 5.2x 22.2x 19.1x 73.6x 35.5x Lupin 6.7% 397,475 452,006 2.7x 2.6x 15.6x 14.8x NM 31.0x 15.1% 365,889 413,865 1.9x 1.7x 9.0x 8.1x 14.3x 12.3x Large Cap Pharma Companies Pharma Cap Large 0.9% 344,950 420,553 3.0x 2.7x 15.3x 13.9x 27.7x 21.1x Alkem Labs 2.1% 326,945 328,817 4.0x 3.5x 23.4x 18.8x 29.3x 24.4x IPCA Labs 7.8% 204,008 203,942 4.6x 3.9x 22.5x 18.0x 32.9x 25.4x Alembic Pharma 23.2% 143,310 143,535 4.2x 2.9x 16.0x 13.0x 23.6x 20.3x 6.7% 126,005 124,588 5.1x 4.4x 18.9x 14.8x 29.5x 22.8x Syngene Intl. 7.4% 122,640 116,635 6.0x 4.9x 20.5x 16.4x 31.3x 30.4x 1.4% 113,756 113,380 5.9x 5.1x 18.8x 14.8x 23.4x 19.3x Glenmark Pharma 9.7% 97,306 132,426 1.3x 1.1x 8.3x 7.0x 13.7x 11.3x Eris Lifesciences (0.4%) 65,752 62,713 6.1x 5.3x 17.8x 15.1x 22.3x 18.8x

Jubilant LS 18.1% 64,867 99,621 1.1x 1.0x 5.6x 4.9x 12.0x 6.6x Mid Cap Pharma Companies Pharma Cap Mid Laurus Labs 22.4% 52,901 63,034 2.4x 2.0x 13.1x 9.6x 28.1x 18.3x FDC Ltd 8.7% 44,530 40,275 1.9x 2.6x 8.6x 11.1x 12.6x 16.2x Abbott India (2.6%) 350,061 333,270 8.3x 7.1x 43.2x 34.8x 58.8x 48.7x GSK Pharma (0.0%) 246,494 234,800 7.2x 6.3x 35.9x 29.3x NM 40.9x Ltd 2.2% 201,242 182,124 8.3x 7.5x 29.6x 24.9x 39.0x 33.7x India (4.6%) 174,246 162,951 5.3x 5.2x 23.6x 22.2x 42.1x 32.6x

AstraZeneca 5.2% 69,153 67,420 8.2x NA 60.1x NA 95.4x NA MNC Pharma Players Pharma MNC Novartis India 2.0% 14,642 8,521 1.9x NA 26.8x NA 64.1x NA

Industry Update

▪ posted strong 4Q20 results majorly driven by the growth in US business (84%) and ex-US business (63%) as compared to 4Q19. The Company reported 4Q20 revenue of INR 1,207cr as compared to INR 927cr for 4Q19, a 30.2% growth and EBITDA of INR 328cr for 4Q20 as compared to INR 181cr for 4Q19, an increase of 81%. The stock touched its 52W high post announcement of the result and closed 8.8% higher than previous day ▪ Zydus Cadila received final approval from the USFDA to market Baclofen Tablets, 5 mg. It is indicated for the treatment of muscle spasms caused by certain conditions such as multiple sclerosis, spinal cord injury/disease ▪ Strides Pharma received approval for Flucytosine Capsules USP, 250 mg and 500 mg from the USFDA, a generic version of Ancobon® Capsules, 250 mg and 500 mg, of Bausch Health US, LLC. According to IQVIA MAT data, the US market for it is valued at c. USD 45mn ▪ The Department of Biotechnology has short-listed following three companies for funding the development of a vaccine for COVID-19: ‐ Cadila Healthcare Ltd for advancing the development of a DNA Vaccine candidate against novel coronavirus SARS-CoV-2 ‐ Bharat Biotech International Ltd for COVID-19 vaccine candidate utilising the inactivated rabies vector platform ‐ Serum Institute of India for Phase III human clinical trials study of recombinant BCG vaccine planned in high-risk population ▪ Aurobindo Pharma received EIR with VAI status from USFDA for its Unit IV, an injectable manufacturing formulation facility ▪ Torrent Pharma received IND AA/Stable rating for its NCDs from India Ratings ▪ Lupin announced that Solosec (secnidazole) 2g oral granules for the treatment of bacterial vaginosis in adult women has received preferred coverage effective immediately on the Express Scripts National Preferred, Flex, and Basic commercial formularies Source: Company news, Bloomberg as on April 24, 2020

16 3.4 Sectoral Update – Healthcare Sectoral Update – Healthcare India Healthcare Update Trading Comparables All amounts in INR mn EV/Sales EV/EBITDA PER % change in M. Cap from Net Debt Company Name prev. week M. Cap EV / EBITDA LTM 1 Yr Fwd LTM 1 Yr Fwd LTM 1 Yr Fwd

Apollo (1.1%) 189,141 223,103 2.7x 2.1x 1.9x 18.5x 14.5x 81.4x 54.1x

Fortis Healthcare 2.9% 91,690 107,558 1.8x 2.3x 2.3x 18.0x 18.5x 37.0x 109.7x

Narayana Hrudayalaya (4.1%) 55,729 62,094 1.5x 2.0x 1.9x 14.9x 13.8x 38.7x 37.7x

Hospitals Aster DM Healthcare (0.1%) 52,349 79,651 1.9x 0.9x 0.8x 6.6x 6.1x 14.3x 12.9x

Shalby1 (3.9%) 7,188 7,064 (0.2x) 1.9x NA 8.9x NA 16.1x NA

Healthcare Global 2.4% 6,306 12,491 3.4x 1.2x 1.0x 7.5x 6.4x NM NM

Dr Lal Pathlabs1 (1.7%) 124,696 121,596 (0.9x) 9.1x 7.8x 34.5x 28.5x 51.7x 41.4x

Metropolis1 (4.6%) 60,466 59,543 (0.4x) 7.0x 5.9x 25.0x 21.0x 41.3x 33.3x Diagnostics

Thyrocare1 (3.1%) 27,792 26,975 (0.5x) 6.2x 5.2x 15.3x 12.5x 26.1x 19.9x 2

Poly Medicure (11.9%) 18,964 19,786 0.5x 2.9x NA 12.4x NA 20.0x NA

Med. Dev. 1 Net Debt is negative, EBITDA is positive, 2 Med. Dev. is Medical Devices Industry Update

▪ As per an Economic Times article, CEOs of leading hospitals have highlighted the below impact of Covid-19 on operations: ‐ Declining footfalls as well as rising consumables and staff costs has impacted the financial feasibility of running a hospital, the cost of running a Covid hospital is high of which 50% are fixed costs ‐ Maintaining PPE stocks for one month alone costs a few crore of rupees for hospitals chains ‐ Doctors and nurses or technicians can work for a week or two and then have to be quarantined for 2 weeks, the cost of which which the hospital bears ‐ Receivables worth INR 3,000cr are pending from various state and central government schemes for treating patients under the Central Government Health Scheme (CGHS) and the Ex-servicemen Contributory Health Scheme (ECHS) ▪ They have also urged the government to consider the healthcare industry’s triple burden - poor financial performance even in the pre-Covid phase; cash flow impact due to sharp drop in out-patient footfalls, diagnostic testing, elective surgeries and international patients’ sector; and increased investments due to Covid-19 which has impacted hospitals and laboratories ▪ As per an Economic Times article, private pathologies are struggling with government-imposed price caps on COVID tests. They are contributing to only 17% of the total tests being conducted and are finding it difficult to ramp up. Advance payment to all manufacturers/suppliers and deferred receipts from hospitals (both private and government), is adding pressure on costs and cash flows. Hence smaller standalone laboratories are facing challenges in terms of cost and their ability to scale up consequently ▪ Mr Om Manchanda, MD & CEO of Dr Lal PathLabs highlighted the impact of Covid on the diagnostics business, broken down into non-Covid business and Covid business. Non-Covid business got disrupted due to lockdown resulting in significant fall in patient volumes. On the Covid side, the Company is facing three main operational challenges: ‐ Currently 2 labs out of its 200 labs are approved to perform the test, while its other labs can perform the test. Hence, there is a mismatch of supply and demand ‐ Covid tests are majorly happening in large cities where there are approved labs. However, when the tests begin to happen in tier 2 cities, the Company feels there will be logistic challenges on the transportation of samples ‐ There is significant pressure on reducing costs without compromising quality of test while focusing on employee safety ▪ Dr Ashutosh Raghuvanshi, CEO of Fortis Healthcare mentioned in an interview that the Company is seeing occupancy levels of 30- 35% in most of the hospitals. This occupancy level does not cover the fixed operating costs of the Company. However, the Company expects recovery in terms of occupancy levels from next month due to pent up demand of elective surgeries ▪ Fortis Healthcare has appointed Anil Vinayak as its new Group Chief Operating Officer (GCOO)

Source: Company news, Bloomberg as on April 24, 2020.

18 3.5 Sectoral Update – Auto Sectoral Update – Auto India Auto Update Share Price Performance Rebased to 100 Last 1 year1 120

100

80

60

40

20 24-Apr-19 24-Jul-19 24-Oct-19 23-Jan-20 24-Apr-20

Maruti Suzuki M&M Hero MotoCorp TVS Motors

Share Price Returns Trading Comparables (INR mn) EV/NTM EV/NTM P/NTM 1W 1M 3M 6M 1Y M. Cap. EV Revenue EBITDA EPS (8%) 12% (29%) (32%) (27%) 1,528,668 1,478,897 2.0x 18.1x 22.5x

Bajaj Auto 3% 26% (17%) (19%) (15%) 709,709 684,556 2.2x 13.8x 14.3x

M & M (8%) 24% (41%) (42%) (49%) 416,819 895,182 0.9x 6.4x 11.3x

Hero 3% 16% (21%) (28%) (24%) 379,587 349,617 1.0x NA 10.4x

Tata Motors (3%) 8% (60%) (44%) (67%) 247,094 894,341 0.3x 3.1x NA

TVS Motor (1%) (12%) (36%) (35%) (42%) 141,514 235,244 1.3x 13.5x 20.1x

Ashok Leyland (8%) 26% (48%) (40%) (48%) 132,339 311,162 0.8x NA 5.9x

Industry Update ▪ Indian carmakers have received the go-ahead to start operations at certain plants: Maruti Suzuki has restarted manufacturing at the Manesar plant on a one shift per day basis, Bajaj Auto has restarted operations at the Aurangabad plant and will concentrate on exports ▪ TVS acquired the UK's sporting motorcycles brand in an all-cash deal worth c. USD 20mn through one of TVS' overseas subsidiaries. TVS said the manufacturing facility in the UK will continue to operate and there are no plans to shift the bike's manufacturing to India from the UK ▪ Ashok Leyland completed the acquisition of 16mn shares, or 3.36% stake, of Hinduja Leyland Finance ▪ Mahindra & Mahindra allotted 10,000 unsecured redeemable NCDs of the face value of INR 10 lakh each for INR 1,000 crore on private placement basis. This is the second bond issue by the company within a week's time Source: Bloomberg as on April 24, 2020, Company information, news run Notes: 1Rebased to 100 as on April 24, 2019

20 3.6 Sectoral Update – Aviation Sectoral Update – Aviation India Aviation Update Share Price Performance

Last 1 year1 000’s Last 1 month2 140 35,000 160 120 30,000 140 100 25,000

80 20,000 120 60 15,000 40 10,000 100 20 5,000 0 - 80 Apr-19 Jul-19 Sep-19 Nov-19 Feb-20 Apr-20 24-Mar-20 31-Mar-20 8-Apr-20 16-Apr-20 24-Apr-20

Volume (IndiGo) Volume (SpiceJet) Price (Indigo) Price (SpiceJet) Share Price Returns

Current Share Price Return 1W 1M 3M 6M 1Y (INR) IndiGo 891.8 (12.3%) 32.1% (56.9%) (62.8%) (66.3%) SpiceJet 42.6 (16.5%) (2.7%) (40.6%) (46.4%) (39.3%)

Trading Comparables

Market Cap. EV EV/NTM EV/NTM Company P/NTM EPS (INR mn) (INR mn) Revenue EBITDA IndiGo 344,235 216,689 0.7x 6.4x 23.1x SpiceJet 25,619 34,595 0.3x 1.7x 9.1x

Industry Update ▪ April 19: Following strict directions from the Ministry of Civil Aviation and industry regulator DGCA, Indian airlines have stopped accepting bookings for travel from May 4 ▪ GoAir has asked 90% of its 5,500 employees to go on indefinite leave without pay, retaining a small number of employees on payroll to restart operations when the government allows flights ▪ IndiGo has reversed the decision to cut salaries of employees by up to 25% during April. IndiGo has sought to adhere to the Prime Minister’s call to protect jobs in the face of the coronavirus crisis ▪ Air India sale is expected to be delayed for a second time. This comes as bidders who are communicating with the Indian government say bankruptcies announced by several airlines globally due to the travel ban has hit investor sentiment ▪ Two lessors to SpiceJet are in talks to terminate contracts and repossess planes via mutually agreed deals with the airline over missed payments

Source: Bloomberg as at 4pm IST, April 24, 2020 Notes: 1Rebased to 100 as on April 24, 2019; 2Rebased to 100 as on March 24, 2020

22 3.7 Sectoral Update – Steel Sectoral Update – Steel India Steel Update Share Price Performance

Rebased to 100 Last 1 year1 Rebased to 100 Last 1 Month2 120 140

100 120 80 100 60

80 40

20 60 24-Apr-19 24-Jul-19 24-Oct-19 23-Jan-20 24-Apr-20 24-Mar-20 31-Mar-20 8-Apr-20 16-Apr-20 24-Apr-20

JSW Steel SAIL Jindal Steel

Share Price Returns Share Price (INR) 1W 1M 3M 6M 1Y JSW Steel 153.3 (13.6%) 4.2% (43.6%) (31.2%) (46.8%) Tata Steel 267.6 (8.8%) (1.6%) (44.7%) (25.7%) (47.7%) SAIL 26.9 (4.9%) 23.4% (47.3%) (21.7%) (51.6%) Jindal Steel & Power 79.2 (14.2%) (12.4%) (58.1%) (23.0%) (54.0%)

Trading Comparables

M. Cap. EV EV/NTM EV/NTM P/NTM EPS (INR mn) (INR mn) Revenue EBITDA

JSW Steel 371,559 780,962 1.0x 5.8x 9.5x Tata Steel 304,816 1,280,809 0.9x 7.5x 10.1x SAIL 111,468 525,993 0.8x 6.5x 7.9x Jindal Steel & Power 80,963 470,489 1.2x 5.9x 13.6x

Industry Update

▪ SAIL is considering renegotiating contracts and purchase orders to tide over the coronavirus crisis. SAIL produced 16.15 MT of crude steel during FY20, highest among steel producers in India ▪ Both SAIL and Jindal Steel & Power are expecting substantial demand after the lockdown from the construction and infrastructure sector ▪ JSW Steel is among the 330+ companies, including Jindal Steel & Power, and Piramal Enterprises, to have sought moratorium on loan repayment from banks ▪ Tata Steel reported a 14.6% fall in FY20 Q4 sales; Investors expect further impact on steel stocks as industry may lose large part of demand season which peaks ahead of monsoons

Source: Bloomberg as on April 24, 2020, Company information, news run Notes: 1Rebased to 100 as on April 24, 2019; 2Rebased to 100 as on March 24, 2020

24 3.8 Sectoral Update – Power and Infrastructure Sectoral Update – Power and Infrastructure India Power Update

Key Listed Power Companies in India (1Y Return)

347.4% 32.3% 27.3%

(2.6%) (11.1%) (10.8%) (12.8%) (27.8%) (39.5%) (41.9%) (53.2%) Adani Torrent Tata CESC NTPC Adani NHPC Adani JSW Azure Power Grid Trans. Green Power Listed Power Companies in India (Operations and Share Price Performance)

Business Share Price Return Company Generation Transmission Distribution 1w 1m 3m 6m 1y Adani Trans. - ✓ ✓ (5.6%) 5.3% (41.2%) (26.1%) (11.1%) ✓ ✓ ✓ 0.9% 12.2% (2.3%) 13.1% 27.3% Integrated Tata Power ✓ ✓ ✓ (9.7%) (9.7%) (49.3%) (47.5%) (53.2%) CESC ✓ ✓ ✓ 1.4% 47.6% (18.5%) (23.8%) (10.8%) NTPC ✓ - - (2.2%) 21.2% (18.1%) (21.8%) (27.8%) Adani Green ✓ - - (1.5%) 38.7% 3.0% 127.5% 347.4% NHPC (8.4%) 8.7% (20.6%) (6.7%) (2.6%) Generation ✓ - - Adani Power ✓ - - (0.8%) 9.7% (51.8%) (51.7%) (39.5%) JSW Energy ✓ - - (6.8%) (14.0%) (40.9%) (41.3%) (41.9%) Azure Power ✓ - - 1.2% 6.7% 25.9% 25.4% 32.3% Transmission Power Grid - ✓ - (5.1%) 8.0% (16.2%) (19.2%) (12.8%) Trading Comparables

Share Price M. Cap. EV EV / EV / P / E P / E Company (INR) (INR mn) (INR mn) FY21E EBITDA FY22E EBITDA (FY21E) (FY22E) Adani Trans. 196 215,618 441,904 8.9x 7.3x 21.1x 16.0x Torrent Power 304 146,011 234,066 6.0x 5.8x 10.9x 10.2x Tata Power 31 83,983 581,345 7.4x 7.2x 6.6x 5.7x CESC 597 79,103 190,610 5.8x 6.0x 6.2x 5.6x NTPC 93 924,152 2,519,794 7.8x 7.0x 6.7x 6.0x Adani Green 196 306,469 409,342 NA NA NA NA NHPC 21 207,932 388,771 6.9x 6.5x 7.4x 7.1x Adani Power 31 118,215 543,867 7.4x 6.8x NM NM JSW Energy 40 65,530 152,768 4.6x 4.4x 7.0x 6.5x Azure Power 1,175 55,985 139,008 10.4x 7.3x NM 34.4x Power Grid 159 832,607 2,285,659 6.5x 6.4x 6.9x 6.3x

Source: Bloomberg as on April 24, 2020, Company Information, News run

26 Sectoral Update – Power and Infrastructure India Infrastructure Update

Key Listed Power Companies in India (1Y Return)

64.6% 42.3%

0.6%

(3.5%) (29.7%) (33.2%) (44.4%) (53.4%)

APSEZ GMR IRB Ashoka Buildcon IGL Adani Gas MGL

Infra - Share Price Performance Perf. of Listed Infra. InvITs

Share Price Return FY20 Dividends Company 1w 1m 3m 6m 1y (INR) Ports APSEZ 0.9% 16.8% (28.9%) (31.4%) (29.7%) GMR Infra (3.7%) 7.2% (29.1%) (14.0%) 0.6% Share Price Airports Trust Q1 Q2 Q3 (INR) IRB Infra (6.0%) 53.1% (36.4%) (11.3%) (44.4%) Roads Ashoka Build (6.9%) 34.7% (49.3%) (42.3%) (53.4%) IGL (5.0%) 36.6% (11.9%) 16.4% 42.3% India Grid 95.8 3.0 3.0 3.0 Gujarat Gas 0.3% 24.1% (12.3%) 43.9% 64.6% City Gas Dist. Adani Gas (6.3%) 19.3% (44.3%) (33.1%) (33.2%) IRB InvIT 34.0 3.0 2.5 2.7 MGL (3.6%) 28.4% (22.0%) (2.7%) (3.5%)

Trading Comparables

Share Price M. Cap. EV EV / EV / P / E P / E Company (INR) (INR mn) (INR mn) FY21E EBITDA FY22E EBITDA (FY21E) (FY22E) APSEZ 271 549,894 749,566 8.2x 7.4x 11.4x 9.6x GMR Infra 17 103,516 360,135 15.9x 13.0x NM NM IRB Infra 73 25,673 175,679 7.0x 5.8x 10.7x 8.2x Ashoka Build 60 16,886 86,742 6.7x 5.1x 56.0x 12.4x IGL 437 306,075 287,146 14.8x 12.7x 23.1x 19.2x Gujarat Gas 258 177,777 197,199 11.3x 10.2x 17.4x 15.0x Adani Gas 97 106,957 108,817 NA NA NA NA MGL 913 90,189 80,660 7.7x 7.0x 12.5x 11.4x

Recent Developments – Power and Infra

▪ MNRE granted a blanket extension of 30 days for commissioning of renewable energy projects beyond the lockdown period ▪ India’s power supply deficit stood at 0.5% for FY 2020 (against 0.6% for FY19), and the peak power deficit stood at 0.7% ▪ Gas production from RIL-BP’s new fields in the KG basin may not begin in May, as was widely expected, because of the ongoing COVID-19 situation ▪ State-owned ONGC has asked the government to waive payment of oil cess and royalty as plummeting international oil prices

Source: Bloomberg as on April 24, 2020, Company Information, News run

27 3.9 Sectoral Update – Consumer and Retail Sectoral Update – Consumer and Retail India Consumer Update

Share Price Performance

Share Price Return Company Name 1w 1m 3m 6m 1y HUL (4.3%) 22.1% 11.1% 7.0% 31.9% Diversified, 1.8% 26.0% 2.5% 6.5% 26.0% Wellness Godrej Consumer (3.3%) 23.1% (26.7%) (24.7%) (19.8%) andPerson 2.0% 27.4% (7.9%) (20.8%) (13.9%) al Care Colgate India 7.6% 35.5% (0.2%) (4.4%) 23.9% (8.2%) 22.7% (40.0%) (39.7%) (47.8%) Zydus Wellness 1.3% 12.5% (9.1%) (20.8%) 5.3% Nestle India 0.5% 34.5% 13.9% 19.1% 64.8% Food Britannia 8.1% 43.2% (1.6%) (6.7%) 3.4% Tata Consumer 0.5% 44.0% (15.5%) 16.0% 57.8% ITC (4.3%) 16.7% (24.5%) (27.7%) (40.1%) Tobacco (2.0%) 15.9% (10.2%) (14.7%) (6.4%) and United Breweries (5.5%) 9.8% (30.8%) (34.8%) (38.2%) Alcohol VST Industries (11.6%) (2.3%) (40.4%) (28.8%) (15.5%) Godfrey Philips 2.9% 35.4% (25.3%) (1.1%) (5.3%)

Trading Comparables

All amounts in INR cr EV/Sales EV/EBITDA P/E Company Name Share Price M. Cap EV FY21 FY22 FY21 FY22 FY21 FY22 HUL 2,283.1 494,256 487,902 10.0x 9.0x 38.6x 33.8x 54.4x 47.1x Dabur 499.1 88,185 87,872 8.8x 7.9x 40.7x 36.0x 47.8x 42.4x Godrej Consumer 534.4 54,633 56,653 5.1x 4.6x 22.9x 20.5x 31.3x 27.5x Marico 306.1 39,518 38,935 4.9x 4.4x 24.7x 22.4x 34.7x 31.4x Colgate India 1,483.7 40,353 40,058 8.2x 7.5x 29.5x 26.7x 45.2x 40.5x Emami 198.6 9,015 8,915 3.0x 2.8x 10.8x 10.0x 16.4x 14.5x Zydus Wellness 1,358.5 7,834 9,193 4.4x 4.0x 23.3x 21.1x 30.5x 23.5x Nestle India 17,406.1 167,822 165,559 12.1x 10.9x 50.6x 44.3x 72.6x 62.7x Britannia 3,062.2 73,635 72,975 5.8x 5.2x 35.2x 31.2x 46.6x 40.9x Tata Consumer 326.1 29,876 30,415 3.3x 3.1x 25.0x 22.6x 43.2x 37.7x ITC 180.1 221,340 204,366 3.9x 3.6x 10.0x 9.1x 13.8x 12.5x United Spirits 519.5 37,749 40,372 4.0x 3.6x 22.9x 19.3x 35.5x 28.6x United Breweries 880.8 23,287 23,326 3.1x 2.8x 19.1x 16.3x 35.0x 28.7x VST Industries 2,788.7 4,306 3,723 2.8x 2.6x 8.4x 7.8x 12.7x 11.8x Godfrey Philips 1,033.9 5,375 5,176 1.6x 1.4x 7.2x 6.3x 10.8x 9.3x Recent Developments – Consumer Sector ▪ Strong pick-up in demand for health and hygiene products and many FMCG companies have forayed into the hand sanitizer/hand wash and disinfectant segments ▪ Prices of agri commodities, like sugar, wheat, palm oil etc continue to fall, which would be positive for the FMCG companies which use them as raw materials ▪ Moderation in discounting levels over the past month of FMCG products on key online channels

Source: Bloomberg as on April 24, 2020, Company information, News run, FY – For the year end March – Nestle India calendarized to March year end

29 Sectoral Update – Consumer and Retail India Retail Update

Share Price Performance

Share Price Return Company Name 1w 1m 3m 6m 1y Jubilant Foodworks (4.5%) 15.1% (15.9%) (3.6%) 13.1% Restaurant Westlife Development (13.0%) (0.6%) (25.2%) (18.0%) (28.1%) Avenue Supermarts 4.4% 26.9% 20.8% 22.1% 73.6% Grocery Future Retail 27.0% (3.9%) (70.2%) (73.2%) (75.9%) Retailers Spencer’s Retail (3.2%) 37.1% (15.0%) 2.5% (46.3%) (0.6%) 20.2% (18.3%) (9.6%) 37.2% Aditya Birla Fashion & Retail (16.2%) (25.3%) (47.8%) (40.8%) (44.8%) Lifestyle Future Lifestyle Fashions 27.5% (7.8%) (62.3%) (61.8%) (67.6%) Retailer Vmart Retail (1.6%) 26.1% (9.5%) (11.5%) (37.5%) Shoppers Stop (4.8%) (1.8%) (55.5%) (49.5%) (58.6%)

Trading Comparables

All amounts in INR cr EV/Sales EV/EBITDA P/E Company Name Share Price M. Cap EV FY21 FY22 FY21 FY22 FY21 FY22 Jubilant Foodworks 1,478.7 19,514 18,842 4.1x 3.6x 18.5x 15.8x 44.8x 34.9x

Westlife Development 285.3 4,441 4,559 2.5x 2.1x 20.2x 15.9x 56.1x 37.6x

Avenue Supermarts 2,310.5 149,668 150,135 5.1x 4.0x 61.5x 45.4x 95.3x 69.3x

Future Retail 102.2 5,390 7,691 0.3x 0.3x 4.5x 4.0x 7.4x 5.9x

Spencer’s Retail 76.3 606 606 NA NA NA NA NA NA

Trent 485.8 17,268 17,529 4.1x 3.3x 29.8x 22.4x 60.3x 41.8x

Aditya Birla Fashion & Retail 119.8 9,272 10,917 1.4x 1.0x 11.8x 6.7x NM 35.3x

Future Lifestyle Fashions 156.0 3,148 3,788 0.5x 0.5x 3.6x 3.1x 23.3x 14.2x

Vmart Retail 1,714.3 3,112 3,045 1.5x 1.2x 17.9x 14.5x 31.1x 25.9x

Shoppers Stop 190.0 1,671 1,686 0.4x 0.4x 3.1x 3.0x 23.1x 16.7x

Recent Developments – Retail Sector

▪ Amazon India launched 'Local Shops on Amazon' programme that will help local shopkeepers and kirana store owners to sell online. Amazon has been running a pilot with more than 5,000 offline retailers and local shops over the last six months to bring the benefits of online selling closer to them ▪ JioMart, the online groceries delivery platform established under Jio Platforms, will leverage WhatsApp platform to bring local vendors, independent hawkers and small kirana stores online. The move has been announced as a part of the deal signed between Facebook and Jio Platforms. As part of the deal, local vendors and small kirana businesses will be able to register on JioMart, the online groceries delivery platform, and receive seamless orders through WhatsApp

Source: Bloomberg as on April 24, 2020, Company information, News run, FY – For the year end March

30 3.10 Sectoral Update – Real Estate Sectoral Update – Real Estate India Real Estate Update

Key Listed Real Estate Companies in India (1M Return)

19.2% 12.3% 1.6% 4.1% 3.6% 3.2%

(5.8%) (3.7%) (22.9%) (21.4%) DLF Embassy Godrej Oberoi Phoenix Prestige Chalet Nesco Sunteck Brigade Office Parks Properties Realty Mills Estates Hotels Realty Enterprises REIT Projects Share Price Performance

Share Price Return Company Name 1w 1m 3m 6m 1y DLF (6.4%) 1.6% (49.9%) (27.0%) (26.0%) Embassy Office Parks REIT 1.9% 12.3% (8.5%) (6.2%) 17.2% Godrej Properties (2.4%) 19.2% (30.0%) (32.3%) (25.2%) (18.6%) (22.9%) (42.9%) (37.3%) (39.7%) Phoenix Mills 3.4% (5.8%) (38.5%) (25.0%) (7.7%) Prestige Estates Projects (7.4%) 4.1% (55.6%) (44.3%) (35.1%) Chalet Hotels (10.3%) (21.4%) (54.8%) (53.0%) (50.5%) Nesco (10.9%) 3.6% (43.9%) (24.9%) (16.2%) Sunteck Realty (10.7%) 3.2% (52.6%) (54.0%) (60.3%) Brigade Enterprises (9.6%) (3.7%) (46.6%) (37.3%) (21.9%) Trading Comparables All amounts in INR cr EV/Sales EV/EBITDA P/E Company Name Share Price M. Cap EV FY21 FY22 FY21 FY22 FY21 FY22 DLF 128.2 31,734 41,671 5.9x 5.6x 16.0x 14.3x 15.2x 13.7x Embassy Office Parks REIT 370.3 28,576 30,594 13.0x 11.3x 15.8x 14.0x 29.6x 26.3x Godrej Properties 667.3 16,818 19,991 11.5x 11.3x NM NM 31.0x 38.4x Oberoi Realty 313.8 11,408 12,230 4.0x 3.4x 8.8x 7.2x 10.7x 9.8x Phoenix Mills 550.6 8,449 13,453 6.3x 5.6x 12.0x 10.2x 21.7x 16.9x Prestige Estates Projects 168.0 6,732 14,619 2.0x 2.1x 6.5x 6.6x 12.2x 11.7x Chalet Hotels 159.7 3,274 4,740 4.0x 3.3x 10.4x 8.2x 20.6x 14.8x Nesco 419.8 2,958 2,925 6.0x 4.9x 8.8x 7.2x 13.2x 10.4x Sunteck Realty 187.9 2,750 3,163 2.3x 2.2x 5.3x 5.2x 7.0x 6.9x Brigade Enterprises 120.1 2,454 6,164 2.0x 1.8x 7.0x 5.6x 12.7x 8.6x Recent Developments – Real Estate

▪ While the commercial segment of the Real Estate industry seems to be the least affected in comparison to the other segments but there signs of weaker demand for new absorption in the near future, renegotiations of lease agreements, increasing chances of invocation of force majeure clause in commercial segment as well and chances of a major shift in work culture ▪ Mall owners across the country have requested finance ministry and Insurance Regulatory Development Authority (IRDA) to get insurance companies to cover business interruption insurance claims to offset losses suffered during the lockdown period. In India, under traditional business interruption insurance policies, physical damage to property is the only criteria to trigger business interruption loss, while pandemics and epidemics are specifically excluded

Source: Bloomberg as on April 24, 2020, Company information, News run

32 NovaDhruva Team

Sunil Sanghai Chetan Dikshit Founder & CEO Managing Director [email protected] [email protected]

Vikash Kabra Rikin Sanghvi Executive Director Executive Director [email protected] [email protected]

Dhruv Bhatia Anirban Bhar Vice President Vice President [email protected] [email protected]

Mohit Bhutda Stuti Bhartia Senior Associate Associate [email protected] [email protected]

Piyush Ramchandani Neel Jain Associate Associate [email protected] [email protected]

Swahum Mukherjee Ponmathi Veerachami Senior Analyst Analyst [email protected] [email protected]

Mandvi Dixit Vishal Naik Executive Assistant Manager [email protected] [email protected]

NovaDhruva Capital Private Limited 902 One Centre, Tower 2A; Elphinstone Road (West), Mumbai 400 013; : +91 22 6246 6000 www.novadhruva.com