Angel Top Picks - August 2016

The Indian equity market has been one of the most resilient performers post the

The implementation of the GST will

Brexit and has gained ~5% since then. Though an easy liquidity scenario is

possibly be the most significant reform

largely responsible for the rally, still one can’t ignore the evident improvement in

post economic liberalisation in 1991; it

the Indian economy on the back of sustained domestic consumption. While the

will transform the economy into a single

market with uniform tax structure.

global economy remains fragile, the Indian economy is expected to stay perched

on the path of growth. There have been many domestic reforms in the last two

decades; in our opinion the GST will possibly be the most significant one post

economic liberalisation in 1991. It will transform the economy into a single

market with a uniform tax structure across states and will significantly reduce the

complexities in doing business. Although the impact of GST on the corporate

sector and the economy as a whole will be visible with a lag of a few years but

we strongly believe it has the potential to push GDP growth, while keeping

inflation under check.

Post GST, what will be the next level of

With the GST now having been enacted, the question is what will be the next

growth for our markets? The answer lies

lever of growth for our markets? The answer lies in corporate earnings, which we

in corporate earnings, which we feel

feel should grow by 16-17% for FY2017. As we had indicated earlier, the

should grow by 15-16% for FY2017.

economy will get a boost on increased spending by the government on various

infrastructure projects and on the back of its emphasis on the development of

rural areas. We have seen a series of orders opening up in the road construction

space, redevelopment plans, as well as metro projects, and a lot more are in the

pipeline. This should act as a favourable impetus not only for specific directly

concerned sectors but also support the overall corporate sector growth.

Good monsoon has led to the highest

This year the country is likely to receive an above normal monsoon with the

plantation of pulses in the last five

rainfall until now being in excess by 1%. Further, the planting of pulses is at

years, which would lead to softening of

among the highest levels in the last five years. On this account, we believe that

food inflation, thus paving the way for

food inflation would peter down. The RBI could possibly go for a rate cut in its

lower interest rates.

upcoming monetary policy meet as most macro data points hint at easing of

inflation. The 10 year G-Sec yield has already seen an ~35bp drop in the last

40-50 days, indicating lower interest rates.

We have been vocal about consumption and infrastructure based themes playing

out well and the recent favourable developments and cues mentioned above add

to our conviction. We continue to like consumption based companies like Blue

Star, Voltas, Bajaj Electricals, Siyaram Silk Mills and Radico Khaitan. We have

already seen a revival in tractor demand and to play the monsoon theme we

believe Goodyear India is the right candidate as it is among the leaders in terms

of market share in tractor tyres. To play on the government’s infrastructure

spending and in anticipation of a lower interest rates regime, we believe ITNL,

Mahindra Life Space, LIC Housing Finance, Dewan Housing and Equitas Holding

are good picks. While NBCC has already met our target price, we still have a

positive view on the stock and will revisit the target price post its 1QFY2017

results.

Please refer to important disclosures at the end of this report

Top Picks Report | August 2016

Large Cap

EPS

PER

EV/Sales

ROE

Company

Sector

Rating

CMP (`)

Target (`)

Upside (%)

FY17E FY18E

Amara Raja

Auto Ancill.

Buy

876

1,076

22.8

35.3

43.5

25.2

20.5

2.8

2.3

25.9

26.0

BEL

Capital Goods

Buy

1,231

1,414

15.0

58.7

62.5

20.9

19.7

2.7

2.4

*44.6

*46.3

HCL Tech

Buy

826

1,000

21.1

55.7

64.1

14.8

12.9

1.9

1.4

20.3

17.9

HDFC Bank

Financials

Accumulate

1,242

1,350

8.7

58.4

68.0

21.3

18.3

18.8

18.6

Infosys

Buy

1,085

1,370

26.3

64.8

72.0

16.7

15.1

3.0

2.6

22.0

22.3

LIC Housing Fin.Financials

Buy

511

582

13.9

40.6

47.8

13.1

11.1

19.9

20.1

Voltas

Capital Goods

Buy

347

407

17.2

12.9

16.3

26.9

21.3

1.8

1.5

16.7

18.5

Source: Angel Research; *Note- Adj. RoEs

Mid Cap

EPS

PER

EV/Sales

ROE

Company

Sector

Rating

CMP (`) Target (`)

Upside (%)

FY17E FY18E

Bajaj Electricals

Cons. Durable Accumulate

268

299

11.2

12.4

15.7

20.1

15.8

0.5

14.4

16.1

Blue Star

Cons. Durable Accumulate

496

527

6.3

14.9

22.1

35.3

23.7

1.2

1.0

20.4

26.4

Dewan Housing Financials

Buy

234

270

15.4

29.7

34.6

7.9

6.8

16.1

16.8

Equitas Holdings Financials

Buy

173

235

35.8

6.7

9.4

29.7

21.0

10.9

11.5

Goodyear India Tyre

Buy

533

631

18.4

49.4

52.6

10.8

10.1

0.4

18.2

17.0

IL&FS Transport. Infra

Buy

31.0

8.6

5.6

8.8

7.8

3.6

3.3

4.2

5.0

Jagran Prakashan Media

Accumulate

185

205

10.8

12.5

17.1

14.8

2.6

2.3

21.7

Mahindra LifespaceReal Estate

Buy

436

554

27.0

18.3

33.8

23.8

12.9

2.9

2.3

4.9

8.5

Navkar Corp.

Logistics

Buy

205

265

29.0

6.8

11.5

30.3

17.8

8.1

5.4

6.9

10.5

Radico Khaitan

Breweries & Dist.

Buy

125

39.2

6.3

7.4

14.2

12.2

1.2

1.1

8.6

9.3

Siyaram Silk Mills Textile

Buy

1, 050

1,347

28.3

104.9

122.4

10.0

8.6

0.7

16.4

TV Today

Media

Buy

297

363

22.4

18.4

21.4

16.2

13.9

2.4

1.9

17.4

17.2

Source: Angel Research

August 5, 2016

Top Picks Report | August 2016

Stock Info

Amara Raja Batteries

CMP

876

 Amara Raja Batteries Ltd (ARBL) is the second largest lead acid storage battery

1,076

manufacturer in the country. It has been outpacing market leader Exide (ARBL

Upside

22.8%

grew at a 24% CAGR over FY2010-15 as compared to Exide's growth of 13%),

leading to its market share improving from 25% in FY10 to about 35%

Sector

Auto Ancillary

currently. ARBL's outperformance has been mainly on back of its association

Market Cap (` cr)

15,241

with global battery leader Johnson Controls Inc (which also holds 26% stake in

Beta

0.831

ARBL) for manufacturing ducts.

52 Week High / Low

1,132 / 773

 With the automotive OEMs following a policy of having multiple vendors and

with ARBL’s products enjoying a strong brand recall in the replacement

segment, the company is well poised to gain further market share. Given the

3 year-Chart

economic recovery and market share gains, the company is expected to grow at

1,200

a CAGR of 18% over the next two years as against industry growth of 10-12%.

1,000

 ARBL is a well diversified auto ancillary player having presence across the

800

automotive and the industrial segment. It has a broad OEM as well as

600

replacement customer base. We believe ARBL is a high quality stock to play

the auto sector revival. We maintain our Buy rating on the stock.

400

200

Key Financials

Y/E

Sales

OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales

March

(` cr)

(%)

(` cr)

(`)

(%)

(x)

FY2017E

5,429

17.5

604

35.3

25.9

25.2

15.8

2.8

Source: Company, Angel Research

FY2018E

6,471

17.6

742

43.5

26.0

20.5

4.9

13.0

2.3

Source: Company, Angel Research

Stock Info

Bharat Electronics (BEL)

CMP

1,231

 High priority to the defense sector in the government’s ‘Make in India’

1,414

campaign, with (1) emphasis on indigenization, (2) increase in FDI limits from

26% to 49%, and (3) over $50bn worth of projects cleared by Defense

Upside

14.9%

Acquisition Council (DAC) in the last 26 months, indicate at the sector being at

Sector

Capital Goods

an inflexion point where Indian defense capex cycle is entering a new era of

Market Cap (` cr)

29,534

growth. The current bid pipeline could lead to strong award activity for the

next few years and BEL could emerge as a beneficiary.

Beta

1.1

 BEL in FY2016 had ~35% market share in the defense electronics space.

52 Week High / Low

1,417 / 983

Considering (1) bid-pipeline of Indian Air Force and Navy’s platform projects,

which have high defense electronic component, (2) BEL’s in-house R&D

3 year-Chart

capabilities, and (3) its zero debt status, we believe that BEL would maintain its

1600

strong market positioning in the defense electronics space.

1400

 We expect BEL to trade at a premium to its historical valuations on account of

1200

1000

uptick in investment cycle. Current low competitive intensity which should

800

enable BEL to justifiably command scarcity premium, coupled with the fact that

600

the company is the largest listed defense player, makes the stock more

400

attractive. We maintain BUY rating on the stock with price target of `1,414.

200

Key Financials

Y/E

Sales

OPM PAT EPS Adj. ROE P/E P/BV EV/EBITDA EV/Sales

March

(` cr)

(%)

(` cr)

(`)

(%)

(x)

Source: Company, Angel Research

FY2017E

8,137

16.8

1,410

58.7

44.6

20.9

3.0

15.7

2.7

FY2018E

9,169

17.2

1,499

62.5

46.3

19.7

2.8

13.7

2.4

Source: Company, Angel Research

August 5, 2016

Top Picks Report | August 2016

Stock Info

HCL Technologies

CMP

826

 Healthy pipeline: The company’s engineering services has been seeing lumpy

1,000

growth over the last few quarters. This is however largely a function of the

Upside

21.1%

timing of large transformational deals. 6-8 of the large deals signed a few

Sector

quarters ago will aid the company to continue to post industry leading growth.

We expect HCL Tech to post a USD and INR revenue CAGR of 16.3% and

Market Cap (` cr)

1,16,521

18.0%, respectively, over FY2016-18E (inclusive of the acquisition of

Beta

0.8

Geometric Software and the Volvo deal).

52 Week High / Low

997 / 707

 Robust outlook: For FY2017 revenues are expected to grow between 12.0-

14.0% in CC. Revenue guidance is based on FY2016 (April to March’2016)

3 year-Chart

average exchange rates. The above constant currency guidance translates to

1200

11.2% to 13.2% growth in US$ terms.

1000

 Outlook and Valuations: The stock is attractively valued at the current market

800

price and hence we maintain our Buy with a price target of `1,000.

600

400

Key Financials

200

Y/E

Sales

OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales

June

(`cr)

(%)

(`cr)

(`)

(%)

(x)

FY2017E

49,242

20.5

7,862

55.7

20.3

12.9

2.6

7.6

1.6

FY2018E

57,168

20.5

9,037

64.1

17.9

11.2

2.0

5.6

1.1

Source: Company, Angel Research

Stock Info

HDFC Bank

CMP

1,242

 Strong capital adequacy will enable continued growth going ahead: HDFC

1,350

Bank continued to report strong loan growth of 23% yoy and with capital

Upside

8.7%

adequacy ratio of 15.5% at the end of 1QFY2017, the bank has enough

Sector

Financials

scope to continue to grow its loan book and increase its market share.

Market Cap (` cr)

315,262

 Asset quality rock-solid: The bank has been able to maintain its asset quality

consistently, though it saw some weakness during 1QFY17 with Gross NPA

Beta

0.8

ratio and the Net NPA ratio at

1.04% and

0.32%, respectively, in a

52 Week High / Low

1,258 / 929

challenging macro environment. We don’t see asset quality weakening further.

 Outlook: The bank’s credit and deposit growth beat the industry growth rate,

3 year-Chart

driven by strong retail business. This provides strong visibility for a robust 20%

1,400

earnings trajectory, coupled with high quality of earnings. This in our view

1,200

justifies a premium valuation multiple. At the current market price, the bank is

1,000

trading at 3.2x its FY2018E ABV. We recommend an Accumulate rating on the

800

600

stock, with a target price of `1,350

400

Key Financials

200

Y/E

Op. Inc NIM

PAT

EPS

ABV ROA ROE P/E P/ABV

March

(` cr)

(%)

(` cr)

(`)

(%)

(x)

FY2017E

46,097

4.5

14,806

58.4

333.1

2.0

18.8

21.3

3.8

Source: Company, Angel Research

FY2018E

55,433

4.5

17,237

68.0

398.6

2.0

18.6

18.3

3.2

Source: Company, Angel Research

August 5, 2016

Top Picks Report | August 2016

Stock Info

Infosys

CMP

1,085

 Strong revenue guidance for FY17: The Management has guided towards

1,370

higher revenue growth for FY2017, ie of 11.5-13.5% in CC terms and 12.7-

Upside

26.3%

14.7% in INR terms (exchange rate as on March 31, 2016). For FY2016, the

Sector

company posted a 13.3% growth in CC terms V/s a guidance of 12.8-13.2%

growth (in CC). We expect the company to post ~13.0% USD revenue growth

Market Cap (` cr)

2,49,218

in FY2017.

Beta

0.8

 Aims to be US$20bn company by FY20: The company expects its revenue to

52 Week High / Low

1,278 / 1,012

rise to US$20bn by FY2020, up from US$8.7bn in FY2015, as it focuses on

acquisitions and winning more new technology services, implying a

14%

3 year-Chart

CAGR over the period. Over the near term, we expect Infosys to post a 13.0%

1400

USD revenue growth in FY2017. Over FY2016-18E, we expect USD and INR

1200

revenue to grow at a CAGR of 13.0% and 13.0%, respectively.

1000

 Outlook and Valuations: The stock trades at a valuation of 15.1x FY2018E

earnings. We recommend Buy on the stock with a price target of `1,370.

800

600

Key Financials

Y/E

Sales

OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales

400

March

(` cr)

(%)

(` cr)

(`)

(%)

(x)

FY2017E

69,934

27.5

14,886

64.8

22.2

16.7

3.7

10.8

3.0

FY2018E

79,025

27.5

16,529

72.0

22.3

15.1

3.4

9.3

2.6

Source: Company, Angel Research

Stock Info

LIC Housing Finance

CMP

511

 Significant under penetration of mortgages in India: India is expected to

582

witness a robust housing finance growth going forward as the mortgage

Upside

13.9%

penetration in India remains at very low levels at 9% to GDP as compared to

Sector

Financials

the developed countries where it is in the range of 60-100%.

Market Cap (` cr)

25,803

 NIM expansion visible: LICHF is able to raise funds from low-cost NCDs due

Beta

1.4

to its strong AAA credit rating and backing by strong promoters like LIC. In a

declining interest rate environment, NBFCs like LICHF are well-placed to

52 Week High / Low

537 / 389

witness margin improvement in our view.

3 year-Chart

 Outlook: For companies like LICHF, the funding environment has eased; thus

600

it will lead to lower cost of borrowing, while outlook for growth in retail

housing loans remains positive, going forward. We expect the company to

500

post a healthy loan book CAGR of 19% over FY2016-18E, which is likely to

400

reflect in earnings CAGR of ~20%, over the same period. The stock currently

300

trades at 2.1x FY2018E ABV. We maintain our Buy rating on the stock, with a

200

target price of `582.

100

Key Financials

Y/E

Op. Inc NIM

PAT

EPS

ABV ROA ROE P/E P/ABV

March

(` cr)

(%)

(` cr)

(`)

(%)

(x)

Source: Company, Angel Research

FY2017E

3,712

2.6

1,968

39.0

207.9

1.5

19.9

13.1

2.5

FY2018E

4,293

2.5

2,323

46.0

243.4

1.5

20.1

11.1

2.1

Source: Company, Angel Research

August 5, 2016

Top Picks Report | August 2016

Stock Info

Voltas

CMP

347

 Growth in UCP segment to continue: Voltas has maintained 20%+ market

407

share in domestic air-conditioning market despite stiff competition from MNC

Upside

17.2%

players. With economic indicators turning favorable, the company’s

competitive positioning should help its UCP segment to report a 19.5% top-

Sector

Construction & Eng.

line and 16.6% EBIT CAGR, respectively, during FY2016-18E.

Market Cap (` cr)

11,485

 Gradual recovery in EMP business: In the run-up to the Qatar World Cup

Beta

1.4

2022 and Dubai Expo 2020, we expect international awarding activity to

52 Week High / Low

376/ 211

catch-up from FY2017E onwards. Surge in order book should translate to

uptick in execution (10.7% top-line CAGR during FY2016-18E). With legacy

projects completed and contribution of high margin projects kicking-in, we

3 year-Chart

expect segment margins to expand from 1.4% in FY2016 to 5.0% in FY2018E.

400

350

 Strong growth Outlook: On the back of strong 13.3% top-line and 18.1%

300

bottom-line CAGR during FY2016-18E, we expect Voltas to report strong

250

16.7%/18.5% RoE for FY2017/18E, respectively. Considering the positive cues,

200

case for improvement in business segments’ performances and growth potential, we

150

expect improved profitability and better investment return ratios, going forward. We

100

assign 25.0x PE multiple to our FY2018E EPS estimate of `16.3/share and arrive at

a price target of `407. Given the upside, we recommend Buy on the stock.

Key Financials

Y/E

Sales

OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales

Source: Company, Angel Research

March

(` cr)

(%)

(` cr)

(`)

(%)

(x)

FY2017E

6,511

7.9

427

12.9

16.7

26.9

4.2

22.2

1.8

FY2018E

7,514

8.7

538

16.3

18.5

21.3

3.7

17.5

1.5

Source: Company, Angel Research

August 5, 2016

Top Picks Report | August 2016

Stock Info

Bajaj Electricals

CMP

268

 The company is among the top 4 players in the consumer durables space

299

across all its product categories (leader in small appliances; number-4 in fans

Upside

11.2%

and lighting). It has a strong distribution reach with 4,000 distributors

Sector

Cons. Durable

reaching out to 400,000 retailers.

Market Cap (` cr)

2,712

 In the 3 years preceding FY2016, the company’s E&P segment had been

Beta

0.9

underperforming owing to cost overruns and delays in project executions.

However, the segment has turned around in FY2016 on the profitability front

52 Week High / Low

283 / 155

and delivered a healthy EBIT margin of ~6% for the year. Currently the

segment’s order book stands at `2,480cr.

3 year-Chart

 With expectation of timely execution of new projects in the E&P segment and

400

with the Lighting and Consumer Durables segments expected to benefit from

350

300

an improvement in consumer sentiments going forward, we expect the

250

company’s top-line to grow at a CAGR of ~15% to `6,098cr and bottom-line

200

to grow at a CAGR of 29% to `159cr over FY2016-FY2018E. We recommend

150

a Buy rating on the stock.

100

Key Financials

Y/E

Sales OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales

March

(` cr)

(%)

(` cr)

(`)

(%)

(x)

FY2017E

5,351

5.6

125

12.4

14.4

20.1

3.1

9.2

0.5

Source: Company, Angel Research

FY2018E

6,098

5.9

159

15.7

16.1

15.8

2.8

7.8

0.5

Source: Company, Angel Research

Stock Info

Blue Star

CMP

496

 BSL is one of the largest air-conditioning companies in India. With a mere

527

3% penetration level of ACs vs 25% in China, the overall outlook for the room

Upside

6.3%

air-conditioner (RAC) market in India is favourable.

Sector

Cons. Durable

 BSL’s RAC business has been outgrowing the industry by ~10% points over the

Market Cap (` cr)

4,723

last few quarters, resulting in the company consistently increasing its market

share (~7% in FY2014 to 10.5% at present). This has resulted in the Cooling

Beta

0.6

Products Division (CPD)'s share in overall revenues increasing from~23% in

52 Week High / Low

449 / 306

FY2010 to ~42% in FY2016 (expected to improve to ~47% in FY2018E). With

strong brand equity and higher share in split ACs, we expect the CPD to

3 year-Chart

continue to drive growth.

600

 Aided by increasing contribution from the CPD, we expect the overall top-line

500

to post a revenue CAGR of ~15% over FY2016-18E and margins to improve

400

from 5.7% in FY2015 to 7.1% in FY2018E. Moreover, the merger of Blue Star

Infotech has infused cash and strengthened the balance sheet. We have an

300

Accumulate recommendation on the stock.

200

100

Key Financials

Y/E

Sales OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales

March

(` cr)

(%)

(` cr)

(`)

(%)

(x)

FY2017E

4,283

5.9

142

14.9

20.4

35.3

6.8

20.1

1.2

Source: Company, Angel Research

FY2018E

5,077

7.3

211

22.1

26.4

23.7

5.8

13.6

1.0

Source: Company, Angel Research

August 5, 2016

Top Picks Report | August 2016

Stock Info

Dewan Housing Finance

CMP

234



3^rd largest private sector housing finance company: We expect DHFL’s AUM to

270

grow at a CAGR of 21% over FY2016-18, as demand for housing in the

Upside

15.4%

middle and low income group picks up, while PAT CAGR is expected to be

22%

Sector

Financials

 Seasoned and granular loan book with stable asset quality: Individual

Market Cap (` cr)

6,839

borrowers account for 72%, while the high yielding loan against property (LAP)

Beta

1.6

+SME and projects loans account for 19% and 9% of advances respectively. Despite

52 Week High / Low

268 / 141

strong loan growth, the GNPAs and NNPAs are likely to be at ~1.17% and 0.82%,

respectively, for FY2017. We don’t expect any major deterioration in the asset

quality going ahead.

3 year-Chart

 Lower cost of funds will help maintain NIM: Nearly 70% of the bank

300

borrowings are due for maturity over the next three years and swapping a part

250

of that with non-convertible debentures (NCDs), where it has ~100bp cost

200

benefit, will help DHFL in maintaining its NIM at ~2.9%.

150

 Outlook: We expect the company to post a healthy loan book CAGR of 21%

100

over FY2015-18E, which is likely to translate in an earnings CAGR of 22%,

over the same period. The stock currently trades at 1.1x FY2018E ABV. We

maintain Buy on the stock, with a target price of `270.

Key Financials

Y/E

Op. Inc NIM

PAT

EPS

ABV ROA ROE P/E P/ABV

Source: Company, Angel Research

March

(` cr)

(%)

(` cr)

(`)

(%)

(x)

FY2017E

2,225

2.9

866

29.7

184.0

1.1

16.1

7.9

1.3

FY2018E

2,688

2.9

1,084

34.6

215.3

1.2

16.8

6.8

1.1

Source: Company, Angel Research

Stock Info

Equitas Holdings

CMP

173

 Early mover advantage in the SFB category: Equitas was one of the ten NBFCs

235

to get the license to start a small finance bank (SFB). As the entire book of

Upside

35.8%

Equitas qualifies for PSL, meeting the 75% PSL target will not be a challenge.

Sizeable and diversified loan book will keep it ahead of other upcoming SFBs.

Sector

Financials

 Asset quality and return ratios are likely to remain stable: Equitas will have to

Market Cap (` cr)

5,796

maintain CRR & SLR going ahead; hence yield on total assets is likely to come

Beta

0.9

down. However, as a bank it will be able to raise deposits and hence there will

52 Week High / Low

206 / 134

be reduction in cost of funds. As a result, spreads may not decline much which

in turn will help in maintaining the ROE & ROA which although could undergo

a marginal decline. Also we don’t expect any major deterioration in the asset

3 year-Chart

quality going ahead.

220

 NIM likely to remain healthy: Equitas will be able to take deposits after it

200

formally starts banking operations leading to ~250bp reduction in cost of

180

funds. Hence we expect the NIM to remain strong at ~11%, going ahead.

160

 Outlook: We expect the company to post a strong loan book & earnings

140

CAGR of 38% & 37% over FY2016-18E. The stock currently trades at 2.2x

120

FY2018E BV. We maintain Buy on the stock, with a target price of `235.

100

Key Financials

Y/E

Op. Inc NIM

PAT

EPS

ABV ROA ROE P/E P/ABV

March

(` cr)

(%)

(` cr)

(`)

(%)

(x)

Source: Company, Angel Research

FY2017E

1,076

11.7

224

6.7

68.2

2.8

12.4

27.6

2.7

FY2018E

1,465

11.4

315

9.4

77.6

2.8

12.9

19.7

2.3

Source: Company, Angel Research

August 5, 2016

Top Picks Report | August 2016

Stock Info

IL&FS Transportation Networks

CMP

 ITNL reported commercial operations date (CoD) for JSEL and PSRDCL. Also,

completion certificate was issued for BKEL. TRDCL P-III and CNTL are expected

Upside

31.0%

to commence in the next few months. Further, RIDCRO P-III, KSEL, KNEL, and

Sector

Construction

BAEL are expected to commence operations in next few months. Accordingly,

we expect revenue from these projects to increase by ~`4cr/day (unadj. for

Market Cap (` cr)

2,334

stake).

Beta

1.0

 Strategic initiatives like stake sale at SPV level, listing of operational BOT

52 Week High / Low

145/64s

projects under InvITs, and re-financing of BOT projects should help the

company unlock value. Money raised from these initiatives could be used to

3 year-Chart

lower debt and improve the profitability.

300

 With 7+ projects expected to commence in the next 12 months, we expect the

250

debt repayment cycle at SPV level to commence, resulting in the overall consol.

200

D/E levels peaking out at ~4.0x. With concerns over higher D/E levels allayed

150

to a certain extent, coupled with the attractive valuations of 0.3x FY2017E

100

P/BV multiple that the ITNL stock is trading at, we maintain our Buy on the

stock with price target of `93.

Key Financials

Y/E

Sales

OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales

March

(` cr)

(%)

(` cr)

(`)

(%)

(x)

Source: Company, Angel Research

FY2017E

8,946

31.0

266

8.1

4.2

8.8

0.3

11.6

3.6

FY2018E

10,017

31.6

299

9.1

5.0

7.8

0.3

10.5

3.3

Source: Company, Angel Research

Stock Info

Goodyear India

CMP

533

 Normal monsoon to energize stagnant tractor demand: Goodyear India (GIL)

631

is a leader in the tractor tyre segment in India with tractor tyres accounting for

Upside

18.4%

~50% of its overall revenues. GIL’s performance on the top-line front has

been under pressure on account of below par monsoon over the past two

Sector

Tyres

years. As tractor sales have strong correlation with monsoons, the normal

Market Cap (` cr)

1,229

monsoon this year should translate into a higher demand for tractor tyres.

Beta

0.6

 Strong finances and Balance Sheet: GIL is a debt free-cash rich company with

52 Week High / Low

662 / 443

RoIC estimated at ~84% for FY2018. The company’s cash and equivalents

are `334cr for FY2016, which amount to ~28% of the current market cap.

3 year-Chart

 Outlook and valuation: On an adjusted basis (for FY end March), we expect

the top-line to post a CAGR of 7.5% over FY2016-18E to `1,704cr mainly on

800

700

account of rebound in tractor tyre volumes and expect net profit to improve to

600

`121cr in FY2018E. At the current market price, the stock is trading at a PE of

500

10.0x its FY2018E earnings. We have a Buy rating on the stock and assign a

400

target price of `631 based on a target PE of 12.0x for FY2018E.

300

200

100

Key Financials

Y/E

Sales

OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales

March

(` cr)

(%)

(` cr)

(`)

(%)

(x)

FY2017E

1,598

10.4

114

49.4

18.2

10.8

1.8

4.3

0.4

FY2018E

1,704

10.2

121

52.6

17.0

10.1

1.6

3.6

0.4

Source: Company, Angel Research

August 5, 2016

Top Picks Report | August 2016

Stock Info

Jagran Prakashan

CMP

185

 We expect JPL to register a net sales CAGR of ~12% over FY2016-18E, on

205

back of (a) strong growth in advertising revenue due to improvement in GDP

growth, and (b) improvement in circulation revenue owing to combination of

Upside

10.8%

increase in cover price and volume growth.

Sector

Media

 Further the acquisition of Radio City would also boost the company's revenue

Market Cap (` cr)

6,150

going ahead. Radio City has ~20 stations across 7 states in the country and is

second only to ENIL in all its operating circles, ie Delhi, Mumbai, Bengaluru,

Beta

0.6

Chennai, Ahmedabad, Hyderabad, Pune and Lucknow. The company covers

52 Week High / Low

190/110

~51% (~66mn people) of the total radio population.

 Raw material prices have been in a declining trend. Thus, considering lower

3 year-Chart

news print costs, healthy sales, and higher margins in the radio business, we

expect an adj. net profit CAGR of ~12% over FY2016-18E to `409cr.

200

180

 Considering Dainik Jagran's strong presence in the rapidly growing Hindi

160

markets, we expect JPL to benefit from an eventual recovery in the Indian

140

economy. Hence, we maintain an Accumulate rating on the stock with a target

120

100

price of `205.

Key Financials

Y/E

Sales

OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales

March

(` cr)

(%)

(` cr)

(`)

(%)

(x)

FY2017E

2,355

28.0

353

10.8

21.7

17.1

3.7

9.2

2.6

FY2018E

2,635

28.0

409

12.5

21.7

14.8

3.2

8.0

2.3

Source: Company, Angel Research

Stock Info

Mahindra Lifespace

CMP

436

 Speedy execution & speedier sales: MLF has 13 projects under implementation

554

across cities. MLF has exhibited fast completion of projects (4-4.5 years in

Mumbai, other-wise 3-3.5 years across other cities), compared to others. Sales

Upside

27.0%

cycle in ~65% of projects is faster than execution cycle, contrary to industry

Sector

Real Estate

trends. This fast execution and sales is optimal, as it helps MLF in revenue

Market Cap (` cr)

1,789

recognition, inventory cycle (better than Oberoi, DLF), cash flows and

profitability. This translates in creating a virtuous cycle of continuous fast growth.

Beta

0.4

 Strong revenue growth visibility in short-to-long run: MLF as of 4QFY2016 is

52 Week High / Low

559 / 415

pursuing ~4.0mn sq. ft. of sale of the total ~15.0mn sq. ft. of saleable area.

Having sold ~60% of ongoing projects, we expect MLF to launch ~2.8mn

3 year-Chart

sq.ft. of saleable area in rational way during 4QFY2016-2QFY2018E, across

700

6 cities. Maturity at existing projects, new launches give better revenue visibility

600

for medium-term. Further, MLF is sitting on land bank of 11.0mn sq.ft across

500

4 cities, which allays any concern over long-term revenue growth.

400

 With Real Estate Regulatory Bill closer to reality, MLF should be minimally

300

impacted, given their strong parentage and ethically implemented processes.

200

In the longer-term organized, professionally run, well funded players would

100

enjoy strong trust due to their reliable and fast execution strategies. With

improvement in company’s fundamentals, strong earnings growth visibility

and long-term growth outlook, at current valuations of 1.1x FY2017E P/BV,

MLF looks attractive. We maintain BUY on MLF with target price of `554.

Source: Company, Angel Research

Key Financials

Y/E

Sales

OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales

March

(` cr)

(%)

(` cr)

(`)

(%)

(x)

FY2017E

925

18.4

18.3

4.9

23.8

1.1

15.7

2.9

FY2018E

1,139

22.3

138

33.8

8.5

12.9

1.1

10.1

2.3

Source: Company, Angel Research

August 5, 2016

Top Picks Report | August 2016

Stock Info

Navkar

CMP

205

 NCL is one of the largest and one of the three CFS at JNPT with rail

265

connectivity, helping it garner high market share at the port. NCL is in a massive

Upside

29.0%

expansion mode where it is increasing its capacity by 234% to 1,036,889 TEUs

at JNPT and coming up with an ICD at Vapi (with Logistics Park).

Sector

Logistics

Market Cap (` cr)

2,918

 The ICD with rail link should benefit from first mover advantage in a region

that has huge market potential and accounts for ~27% of volumes at JNPT.

Beta

0.6

The ICD should be able to capture the EXIM volumes from the region through

52 Week High / Low

224 / 151

rail link that till now was being custom cleared at JNPT (Import) or being

transported via road and consolidated at JNPT (Export). South Gujarat

3 year-Chart

volumes will now head straight to the Vapi ICD; thus the company can now

cater to bulk commodities and domestic traffic that it had been rejecting owing

250

to capacity constraints at CFS.

200

 We expect NCL to successfully use its rail advantage and scale up its

150

utilizations at both JNPT and Vapi ICD. We have a Buy rating on the stock.

100

Key Financials

Y/E

Sales

OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales

March

(` cr)

(%)

(` cr)

(`)

(%)

(x)

FY2017E

408

42.9

6.8

6.9

30.3

2.1

18.8

8.1

FY2018E

612

42.3

164

11.5

10.5

17.8

1.9

12.7

5.4

Source: Company, Angel Research

Stock Info

Radico Khaitan

CMP

 The IMFL segment is under penetrated. Going forward, increase in income

125

levels would lead to higher growth in IMFL brands. RKL has strong brands in

Upside

39.3%

the premium liquor category which reported a CAGR of ~26% over the last

Sector

Breweries & Distilleries

seven-year period. We expect the growth momentum to continue.

Market Cap (` cr)

1,202

 We expect the price of ENA, a key raw material, to remain stable and

Beta

0.8

potentially even decline going forward due to higher sugar production and

lower demand for ethanol from Indian oil marketing companies

52 Week High / Low

131/81

 We expect a significant hike in liquor prices in the coming financial year as

3 year-Chart

there haven't been any significant ones in recent times. Also, we believe that

industry leader - United Spirits would shift focus on profitability over volume

180

160

growth considering the debt on its balance sheet, which in turn, would lead to

140

increased scope for other liquor companies to hike prices.

120

100

 On valuation basis, Radico is trading at huge discount to its close peer United

Spirits. We have a Buy rating on the stock and target price of

`125

(18x FY2018E EPS)

Key Financials

Y/E

Sales

OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales

March

(` cr)

(%)

(` cr)

(`)

(%)

(x)

FY2017E

1,659

13.0

6.3

8.6

14.2

1.2

8.9

1.2

Source: Company, Angel Research

FY2018E

1,802

13.2

7.4

9.3

12.2

1.1

8.0

1.1

Source: Company, Angel Research

August 5, 2016

Top Picks Report | August 2016

Stock Info

Siyaram Silk Mills

CMP

1,050

 SSML has strong brands which cater to premium as well as popular mass

1,347

segments of the market. Further, in FY2014, SSML entered the ladies' salwar

Upside

28.3%

kameez and ethnic wear segment. Going forward, we believe that the company

Sector

Textile

would be able to leverage its brand equity and continue to post strong performance.

Market Cap (` cr)

984

 The company has a nationwide network of about 1,600 dealers and business

Beta

0.8

partners. It has a retail network of 160 stores and plans to add another 300-

350 stores going forward. Further, the company's brands are sold across

52 Week High / Low

1,400/896

3,00,000 multi brand outlets in the country.

 Going forward, we expect SSML to report a net sales CAGR of ~12% to

3 year-Chart

~`2,040cr and adj.net profit CAGR of ~14% to `115cr over FY2016-18E on

1600

back of market leadership in blended fabrics, strong brand building, wide

1400

distribution channel, strong presence in tier II and tier III cities and emphasis

1200

1000

on latest designs and affordable pricing points. At the current market price,

800

SSML trades at an inexpensive valuation. We have a Buy rating on the stock

600

and target price of `1,347.

400

200

Key Financials

Y/E

Sales

OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales

March

(` cr)

(%)

(` cr)

(`)

(%)

(x)

FY2017E

1,799

11.6

104.9

16.4

10.0

1.6

6.4

0.7

Source: Company, Angel Research

FY2018E

2,040

11.7

115

122.4

16.4

8.6

1.4

5.5

0.7

Source: Company, Angel Research

Stock Info

TV Today Network

CMP

297

 TTNL enjoys a strong viewership ranking in the Hindi and English news

363

channel categories. The company’s Hindi news channel - Aaj Tak has

Upside

22.4%

maintained its market leadership position occupying the No.1 rank for several

Sector

Textile

consecutive years in terms of viewership. Its English news channel - India

Today too has been continuously gaining viewership; it has now captured the

Market Cap (` cr)

1,787

No. 2 ranking from No. 4 earlier. Its other channels like Dilli Aaj Tak and Tez

Beta

1.3

are also popular among viewers.

52 Week High / Low

351 /186

 Out of the 7 radio stations, TTNL has sold off 4 (Jodhpur, Amritsar, Patiala

and Shimla) for `4cr. The remaining 3 stations are in the process of getting

3 year-Chart

sold off to ENIL but the sale will have to wait until concerns raised by the MIB

400

are resolved. Going forward, we expect them to be sold off and this would

350

prop up the company’s profitability.

300

250

 We expect TTNL to report a net revenue CAGR of ~16% to ~`743cr and net

200

profit CAGR of ~16% to `128cr over FY2016-18E. We have a Buy rating on

150

the stock and target price of `363.

100

Key Financials

Y/E

Sales

OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales

March

(` cr)

(%)

(` cr)

(`)

(%)

(x)

FY2017E

637

27.5

110

18.4

17.4

16.2

2.8

8.7

2.4

Source: Company, Angel Research

FY2018E

743

27.5

128

21.4

17.2

13.9

2.4

7.1

1.9

Source: Company, Angel Research

August 5, 2016

Top Picks Report | August 2016

Macro watch

Exhibit 1: Quarterly GDP trends

Exhibit 2: IIP trends

(%)

9.0

12.0

8.3

9.9

7.8

7.7

7.9

10.0

8.0

7.5

7.6

7.2

8.0

6.3

6.7

6.6

6.7

7.0

6.4

6.0

4.2

4.3

3.7

5.8

4.0

6.0

2.0

0.3

5.0

4.0

(2.0)

(0.9)

(0.8)

(1.6)

(4.0)

3.0

(3.4)

(6.0)

Source: CSO, Angel Research

Source: MOSPI, Angel Research

Exhibit 3: Monthly CPI inflation trends

Exhibit 4: Manufacturing and services PMI

56.0

Mfg. PMI

Services PMI

(%)

7.0

54.0

5.7

5.8

5.4

5.6

5.5

6.0

5.3

5.0

4.8

52.0

5.0

4.4

3.7

4.0

50.0

3.0

48.0

2.0

46.0

1.0

44.0

Source: MOSPI, Angel Research

Source: Market, Angel Research; Note: Level above 50 indicates expansion

Exhibit 5: Exports and imports growth trends

Exhibit 6: Key policy rates

(%)

Exports yoy growth

Imports yoy growth

(%)

Repo rate

Reverse Repo rate

CRR

0.0

7.50

(5.0)

7.00

6.50

(10.0)

6.00

(15.0)

5.50

(20.0)

5.00

4.50

(25.0)

4.00

(30.0)

3.50

(35.0)

3.00

Source: Bloomberg, Angel Research

Source: RBI, Angel Research

August 5, 2016

Stock Watch | August 2016

Company Name

Reco

CMP

Target

Mkt Cap

Sales (` cr)

OPM (%)

EPS (`)

PER (x)

P/BV (x)

RoE (%)

EV/Sales (x)

(`)

Price (`)

(` cr)

FY17E

FY18E

FY17E

FY18E

FY17E

FY18E

FY17E

FY18E

FY17E

FY18E

FY17E

FY18E

FY17E

FY18E

Agri / Agri Chemical

Rallis

Neutral

218

4,235

1,937

2,164

13.3

14.3

9.0

11.0

24.2

19.8

4.2

3.7

18.4

19.8

2.2

2.0

United Phosphorus

Buy

602

684

25,796

15,176

17,604

18.5

37.4

44.6

16.1

13.5

3.2

2.6

21.4

21.2

1.8

1.5

Auto & Auto Ancillary

Ashok Leyland

Buy

111

24,588

22,407

26,022

10.6

5.2

6.4

16.6

13.5

3.7

3.2

23.6

24.7

1.2

1.0

Bajaj Auto

Neutral

2,740

79,281

25,093

27,891

19.5

19.2

143.9

162.5

19.0

16.9

5.3

4.6

30.3

29.3

2.9

2.5

Bharat Forge

Buy

724

875

16,843

7,726

8,713

20.5

21.2

35.3

42.7

20.5

16.9

3.8

3.4

18.9

20.1

2.2

1.9

Eicher Motors

Neutral

21,404

58,136

16,583

20,447

17.5

18.0

598.0

745.2

35.8

28.7

12.2

9.3

41.2

38.3

3.3

2.6

Gabriel India

Neutral

103

1,480

1,544

1,715

9.0

9.3

5.4

6.3

19.1

16.4

3.6

3.2

18.9

19.5

0.9

0.8

Hero Motocorp

Neutral

3,270

65,300

31,253

35,198

15.3

15.0

172.3

192.1

19.0

17.0

6.9

6.0

38.9

37.0

1.9

1.7

Jamna Auto Industries Neutral

191

1,524

1,486

1,620

9.8

9.9

15.0

17.2

12.7

11.1

2.8

2.4

21.8

21.3

1.1

1.0

L G Balakrishnan & Bros Neutral

465

729

1,302

1,432

11.6

11.9

43.7

53.0

10.6

8.8

1.5

1.4

13.8

14.2

0.6

Mahindra and Mahindra Neutral

1,437

89,229

46,534

53,077

11.6

11.7

67.3

78.1

21.3

18.4

3.5

3.0

15.4

15.8

1.9

1.6

Maruti

Neutral

4,888

147,648

69,186

82,217

14.7

14.4

198.5

241.4

24.6

20.2

4.8

3.9

20.2

19.9

1.8

1.5

Minda Industries

Neutral

1,155

1,832

2,728

3,042

9.0

9.1

68.2

86.2

16.9

13.4

3.8

3.0

23.8

24.3

0.7

0.6

Motherson Sumi

Neutral

348

45,992

45,896

53,687

7.8

8.2

13.0

16.1

26.7

21.6

8.6

6.9

34.7

35.4

1.0

0.9

Rane Brake Lining

Neutral

610

483

511

562

11.3

11.5

28.1

30.9

21.7

19.7

3.3

3.0

15.3

15.0

1.0

0.9

Setco Automotive

Neutral

668

741

837

13.0

15.2

17.0

3.3

2.9

0.5

15.8

16.3

1.3

1.2

Tata Motors

Neutral

500

144,447

300,209

338,549

8.9

8.4

42.7

54.2

11.7

9.2

1.9

1.6

15.6

17.2

0.6

0.5

TVS Motor

Accumulate

299

330

14,186

13,390

15,948

6.9

7.1

12.8

16.5

23.4

18.0

5.8

4.6

26.3

27.2

1.1

0.9

Amara Raja Batteries

Buy

876

1,076

14,968

5,717

6,733

18.7

18.8

38.4

48.9

22.8

17.9

5.7

4.6

25.3

24.8

2.6

2.1

Exide Industries

Neutral

173

14,714

7,439

8,307

15.0

8.1

9.3

21.4

18.6

3.0

2.7

14.3

16.7

1.6

1.4

Apollo Tyres

Buy

161

183

8,195

12,877

14,504

14.3

13.9

21.4

23.0

7.5

7.0

1.2

1.0

16.4

15.2

0.8

0.7

Ceat

Buy

856

1,119

3,462

7,524

8,624

13.0

12.7

131.1

144.3

6.5

5.9

1.2

1.0

19.8

18.6

0.5

JK Tyres

Neutral

2,062

7,455

8,056

15.0

21.8

24.5

4.2

3.7

0.9

0.7

22.8

21.3

0.4

0.3

Swaraj Engines

Neutral

1,120

1,391

660

810

15.2

16.4

54.5

72.8

20.5

15.4

6.4

5.8

31.5

39.2

1.9

1.6

Subros

Neutral

579

1,488

1,681

11.7

11.9

6.4

7.2

15.1

13.5

1.6

1.4

10.8

11.4

0.6

0.5

Indag Rubber

Neutral

176

463

286

326

19.8

16.8

11.7

13.3

15.1

13.2

2.5

2.4

17.8

17.1

1.3

1.1

Banking

Axis Bank

Neutral

546

130,245

58,081

66,459

3.5

32.3

44.6

16.9

12.2

2.2

1.93

13.6

16.5

Bank of Baroda

Neutral

156

35,830

19,980

23,178

1.8

11.5

17.3

13.5

9.0

1.5

1.3

8.3

10.1

Canara Bank

Neutral

257

13,966

15,225

16,836

1.8

14.5

28.0

17.7

9.2

1.2

1.0

5.8

8.5

Dewan Housing Finance Buy

234

270

6,838

2,225

2,688

2.9

29.7

34.6

7.9

6.8

1.3

1.1

16.1

16.8

Equitas Holdings

Buy

172

235

5,772

939

1,281

11.7

11.5

5.8

8.2

29.7

21.0

2.6

2.3

10.9

11.5

Federal Bank

Neutral

10,790

9,353

10,623

2.9

4.4

5.8

14.3

10.8

1.4

1.2

9.5

11.0

HDFC

Neutral

1,320

208,664

11,475

13,450

3.4

45.3

52.5

29.1

25.1

5.6

5.0

20.2

20.5

HDFC Bank

Neutral

1,242

314,430

46,097

55,433

4.5

58.4

68.0

21.3

18.3

3.7

3.12

18.8

18.6

ICICI Bank

Neutral

241

139,984

39,029

45,903

3.3

16.7

16.3

14.4

14.8

1.8

1.6

10.1

12.4

LIC Housing Finance

Buy

511

582

25,803

3,712

4,293

2.6

2.5

39.0

46.0

13.1

11.1

2.5

2.1

19.9

20.1

August 5, 2016

Stock Watch | August 2016

Company Name

Reco

CMP

Target

Mkt Cap

Sales (` cr)

OPM (%)

EPS (`)

PER (x)

P/BV (x)

RoE (%)

EV/Sales (x)

(`)

Price (`)

(` cr)

FY17E

FY18E

FY17E

FY18E

FY17E

FY18E

FY17E

FY18E

FY17E

FY18E

FY17E

FY18E

FY17E

FY18E

Punjab Natl.Bank

Neutral

122

24,034

23,532

23,595

2.3

2.4

6.8

12.6

18.0

9.7

2.8

2.0

3.3

6.5

South Ind.Bank

Neutral

2,869

6,435

7,578

2.5

2.7

3.1

7.9

6.9

1.0

0.9

10.1

11.2

St Bk of India

Neutral

221

171,169

79,958

86,060

2.6

13.4

20.7

16.5

10.7

1.3

11.5

12.8

Union Bank

Neutral

133

9,140

12,646

14,129

2.3

2.4

31.0

39.1

4.3

3.4

0.5

0.4

9.8

11.4

Vijaya Bank

Neutral

4,270

3,536

3,827

1.8

1.9

5.5

6.7

7.7

6.4

0.6

7.8

8.8

Yes Bank

Neutral

1,112

46,823

7,190

9,011

3.2

3.3

58.2

69.7

19.1

16.0

3.4

2.9

19.2

19.6

Capital Goods

ACE

Neutral

458

709

814

4.1

4.6

1.4

2.1

33.1

22.0

1.4

1.3

4.4

6.0

0.8

0.7

BEML

Buy

992

1,157

4,129

3,451

4,055

6.3

9.2

31.4

57.9

31.6

17.1

1.9

1.7

6.3

10.9

1.3

1.1

Bharat Electronics

Accumulate

1,231

1,414

29,543

8,137

9,169

16.8

17.2

58.7

62.5

21.0

19.7

3.2

2.9

44.6

46.3

2.6

2.4

Voltas

Buy

347

407

11,485

6,511

7,514

7.9

8.7

12.9

16.3

26.9

21.3

4.8

4.2

16.7

18.5

1.5

1.3

BGR Energy

Neutral

120

865

16,567

33,848

6.0

5.6

7.8

5.9

15.4

20.3

0.9

0.8

4.7

4.2

0.1

BHEL

Accumulate

134

142

32,773

28,797

34,742

2.8

2.3

6.9

58.2

19.4

1.0

1.3

4.8

0.8

0.5

Blue Star

Accumulate

484

495

4,611

4,351

5,024

6.4

7.1

17.2

20.6

28.2

23.4

18.3

15.3

23.1

24.1

1.1

0.9

Crompton Greaves

Neutral

4,939

5,777

6,120

5.9

7.0

3.3

4.5

23.9

17.5

1.0

4.4

5.9

0.8

0.6

Greaves Cotton

Neutral

139

3,397

1,755

1,881

16.8

16.9

7.8

8.5

17.8

16.4

3.6

3.3

20.6

20.9

1.7

1.5

Inox Wind

Buy

216

286

4,789

5,605

6,267

15.7

16.4

24.8

30.0

8.7

7.2

2.4

1.8

25.9

24.4

0.9

0.8

KEC International

Neutral

142

3,642

9,294

10,186

7.9

8.1

9.9

11.9

14.3

11.9

2.1

1.8

15.6

16.3

0.6

Thermax

Neutral

844

10,059

5,421

5,940

7.3

25.7

30.2

32.8

28.0

4.0

3.6

12.2

13.1

1.8

1.6

VATech Wabag

Buy

582

681

3,173

3,136

3,845

8.9

9.1

26.0

35.9

22.4

16.2

2.8

2.4

13.4

15.9

0.9

0.7

Cement

ACC

Neutral

1,662

31,213

11,225

13,172

13.2

16.9

44.5

75.5

37.4

22.0

3.5

3.3

11.2

14.2

2.8

2.4

Ambuja Cements

Neutral

264

41,024

9,350

10,979

18.2

22.5

5.8

9.5

45.6

27.8

3.8

3.4

10.2

12.5

4.4

3.7

India Cements

Neutral

117

3,579

4,364

4,997

18.5

19.2

7.9

11.3

14.7

10.3

1.1

1.0

8.0

8.5

1.6

1.4

JK Cement

Neutral

732

5,119

4,398

5,173

15.5

17.5

31.2

55.5

23.5

13.2

2.8

2.4

12.0

15.5

1.7

1.4

J K Lakshmi Cement

Neutral

421

4,959

2,913

3,412

14.5

19.5

7.5

22.5

56.2

18.7

3.5

2.9

12.5

18.0

2.3

1.9

Orient Cement

Neutral

164

3,359

2,114

2,558

18.5

20.5

8.1

11.3

20.2

14.5

3.0

2.5

14.0

2.2

1.7

UltraTech Cement

Neutral

3,661

100,472

25,768

30,385

21.0

23.5

111.0

160.0

33.0

22.9

4.2

3.7

13.5

15.8

4.0

3.3

Construction

ITNL

Buy

2,334

8,946

10,017

31.0

31.6

8.1

9.1

8.8

7.8

0.3

4.2

5.0

3.6

3.3

KNR Constructions

Neutral

585

1,645

1,210

1,595

15.4

16.0

33.9

52.1

17.3

11.2

2.6

2.3

13.6

18.0

1.4

1.0

Larsen & Toubro

Buy

1,470

1,700

137,038

67,665

77,249

10.7

11.5

57.3

71.2

25.7

20.7

2.3

2.2

12.6

14.3

2.2

1.9

Gujarat Pipavav Port

Neutral

170

8,235

705

788

52.2

51.7

5.0

5.6

34.1

30.4

3.4

3.0

11.2

11.3

9.6

MBL Infrastructures

Buy

120

285

498

2,797

3,405

14.7

15.4

21.0

34.8

5.7

3.5

0.6

0.5

11.0

16.2

0.8

Nagarjuna Const.

Neutral

4,281

8,842

9,775

9.1

8.8

5.3

6.4

14.5

12.0

1.1

8.2

9.1

0.6

0.5

PNC Infratech

Buy

554

647

2,842

2,350

2,904

13.4

13.7

48.0

42.0

11.5

13.2

2.2

2.0

16.8

13.2

1.3

1.1

Simplex Infra

Neutral

293

1,447

6,829

7,954

10.5

31.4

37.4

9.3

7.8

1.0

0.9

9.9

13.4

0.6

0.5

Power Mech Projects

Neutral

538

792

1,801

2,219

12.7

14.6

72.1

113.9

7.5

4.7

1.4

1.2

16.8

11.9

0.4

0.3

Sadbhav Engineering

Accumulate

289

298

4,960

3,598

4,140

10.3

10.6

9.0

11.9

32.1

24.3

3.4

3.0

9.9

11.9

1.6

1.4

August 5, 2016

Stock Watch | August 2016

Company Name

Reco

CMP

Target

Mkt Cap

Sales (` cr)

OPM (%)

EPS (`)

PER (x)

P/BV (x)

RoE (%)

EV/Sales (x)

(`)

Price (`)

(` cr)

FY17E

FY18E

FY17E

FY18E

FY17E

FY18E

FY17E

FY18E

FY17E

FY18E

FY17E

FY18E

FY17E

FY18E

NBCC

Neutral

242

14,499

7,428

9,549

7.9

8.6

8.2

11.0

29.5

22.0

1.5

1.2

28.2

28.7

1.6

1.2

MEP Infra

Neutral

705

1,877

1,943

30.6

29.8

3.0

4.2

14.5

10.3

7.0

4.7

0.6

1.7

1.6

SIPL

Neutral

3,487

1,036

1,252

65.5

66.2

(8.4)

(5.6)

3.7

4.2

(22.8)

(15.9)

11.6

9.7

Engineers India

Neutral

218

7,328

1,725

1,935

16.0

19.1

11.4

13.9

19.1

15.6

2.6

2.5

13.4

15.3

3.1

2.8

FMCG

Asian Paints

Neutral

1,127

108,073

17,128

18,978

16.8

16.4

19.1

20.7

59.0

54.4

20.5

19.4

34.8

35.5

6.3

5.7

Britannia

Neutral

2,873

34,472

9,795

10,940

14.1

80.3

93.0

35.8

30.9

14.7

11.4

41.2

3.3

2.9

Colgate

Neutral

940

25,567

4,605

5,249

22.8

25.2

28.5

37.3

33.0

25.3

22.5

64.8

66.8

5.5

4.8

Dabur India

Neutral

296

52,035

9,405

10,581

18.1

18.3

8.1

9.2

36.5

32.2

10.2

8.4

31.6

31.0

5.2

4.6

GlaxoSmith Con*

Neutral

6,355

26,725

4,959

5,623

17.4

18.0

190.5

219.3

33.4

29.0

9.1

7.9

29.6

29.5

4.7

4.1

Godrej Consumer

Neutral

1,584

53,929

10,335

11,518

18.4

18.6

41.5

46.0

38.2

34.4

8.5

7.2

24.9

24.8

5.2

4.6

HUL

Neutral

916

198,234

35,252

38,495

17.6

17.4

20.4

21.9

44.8

41.8

36.9

32.3

82.2

77.3

5.4

5.0

ITC

Accumulate

252

283

304,124

40,059

44,439

39.0

39.2

9.1

10.1

27.7

25.0

7.5

6.6

27.2

26.5

7.1

6.4

Marico

Neutral

295

38,047

6,730

7,649

17.3

17.5

6.4

7.6

46.1

38.8

13.9

11.7

33.2

32.5

5.5

4.8

Nestle*

Neutral

6,787

65,439

9,393

10,507

22.2

22.3

106.8

121.8

63.6

55.7

22.3

20.1

34.8

36.7

6.8

6.0

Tata Global

Neutral

138

8,729

9,072

9,687

9.4

9.8

7.2

7.8

19.2

17.7

2.1

2.0

7.6

7.9

0.9

Procter & Gamble

Buy

6,351

7,369

20,615

2,939

3,342

23.2

23.0

146.2

163.7

43.4

38.8

97.3

93.3

25.3

23.5

6.6

5.7

HCL Tech^

Buy

824

1,000

116,197

49,242

57,168

20.5

55.7

64.1

14.8

12.8

3.0

2.3

20.3

17.9

1.9

1.4

Infosys

Buy

1,072

1,370

246,267

69,934

79,025

27.5

64.8

72.0

16.5

14.9

3.6

3.3

22.0

22.3

3.0

2.6

TCS

Accumulate

2,653

3,004

522,686

121,684

136,286

27.3

135.0

150.1

19.6

17.7

6.5

6.0

33.2

33.9

4.1

3.6

Tech Mahindra

Buy

500

700

48,502

30,347

33,685

17.0

37.5

41.3

13.3

12.1

2.9

2.5

21.8

20.7

1.3

1.1

Wipro

Buy

548

680

135,494

51,631

55,822

21.7

17.9

35.9

36.9

15.3

14.9

3.2

2.9

19.0

18.1

2.3

2.1

Media

D B Corp

Neutral

408

7,495

2,187

2,329

27.4

28.2

18.9

21.0

21.6

19.4

4.5

3.9

23.7

23.1

3.3

3.0

HT Media

Neutral

1,921

2,673

2,891

13.2

13.8

7.2

8.5

11.5

9.7

0.9

0.8

7.8

8.3

0.3

0.2

Jagran Prakashan

Accumulate

185

205

6,150

2,355

2,635

28.0

10.8

12.5

17.1

14.8

3.7

3.2

21.7

2.6

2.3

Sun TV Network

Neutral

461

18,171

2,850

3,265

70.1

71.0

26.2

30.4

17.6

15.2

4.5

4.0

24.3

25.6

5.8

4.9

Hindustan Media Ven.

Neutral

270

1,981

1,016

1,138

21.5

23.3

25.8

11.6

10.5

1.9

1.7

16.2

15.8

1.3

1.1

Metal

Coal India

Neutral

324

204,492

84,638

94,297

21.4

22.3

24.5

27.1

13.2

11.9

5.5

5.2

42.6

46.0

1.9

1.7

Hind. Zinc

Neutral

208

87,992

14,252

18,465

55.9

48.3

15.8

21.5

13.2

9.7

2.1

1.9

17.0

20.7

6.1

4.7

Hindalco

Neutral

137

28,301

107,899

112,095

7.4

8.2

9.2

13.0

14.9

10.5

0.7

4.8

6.6

0.8

0.7

JSW Steel

Neutral

1,706

41,243

53,201

58,779

16.1

16.2

130.6

153.7

13.1

11.1

1.8

1.5

14.0

14.4

1.5

1.3

NMDC

Neutral

102

40,440

6,643

7,284

44.4

47.7

7.1

7.7

14.4

13.2

1.2

8.8

9.2

3.7

3.4

SAIL

Neutral

19,329

47,528

53,738

(0.7)

2.1

(1.9)

2.6

18.0

0.5

(1.6)

3.9

1.2

1.1

Vedanta

Neutral

162

47,924

71,744

81,944

19.2

21.7

13.4

20.1

12.1

8.0

1.0

0.9

8.4

11.3

1.0

0.8

Tata Steel

Neutral

374

36,328

121,374

121,856

7.2

8.4

18.6

34.3

20.1

10.9

1.3

1.1

6.1

10.1

0.9

August 5, 2016

Stock Watch | August 2016

Company Name

Reco

CMP

Target

Mkt Cap

Sales (` cr)

OPM (%)

EPS (`)

PER (x)

P/BV (x)

RoE (%)

EV/Sales (x)

(`)

Price (`)

(` cr)

FY17E

FY18E

FY17E

FY18E

FY17E

FY18E

FY17E

FY18E

FY17E

FY18E

FY17E

FY18E

FY17E

FY18E

Oil & Gas

Cairn India

Neutral

189

35,369

9,127

10,632

4.3

20.6

8.8

11.7

21.4

16.1

0.7

3.3

4.2

5.2

4.3

GAIL

Neutral

374

47,403

56,220

65,198

9.3

10.1

27.1

33.3

13.8

11.2

1.3

1.2

9.3

10.7

1.0

0.9

ONGC

Accumulate

220

235

188,306

137,222

152,563

15.0

21.8

19.5

24.1

11.3

9.1

1.0

0.9

8.5

10.1

1.6

1.5

Indian Oil Corp

Neutral

546

132,518

373,359

428,656

5.9

5.5

54.0

59.3

10.1

9.2

1.6

1.4

16.0

15.6

0.5

0.4

Reliance Industries

Neutral

993

322,023

301,963

358,039

12.1

12.6

87.7

101.7

11.3

9.8

1.2

1.1

10.7

11.3

1.5

1.3

Pharmaceuticals

Alembic Pharma

Neutral

631

11,897

3,483

4,083

20.2

21.4

24.3

30.4

26.0

20.8

5.9

4.7

25.5

25.3

3.3

2.7

Aurobindo Pharma

Buy

752

877

44,016

15,720

18,078

23.7

41.4

47.3

18.2

15.9

4.7

3.7

29.6

26.1

3.0

2.6

Sanofi India*

Neutral

4,503

10,371

2,357

2,692

17.3

153.5

169.2

29.3

26.6

5.0

4.0

25.8

28.4

4.1

3.4

Cadila Healthcare

Buy

369

400

37,766

11,126

13,148

22.0

17.1

20.0

21.6

18.4

5.5

4.4

28.8

26.6

3.2

2.6

Cipla

Neutral

526

42,284

15,378

18,089

17.4

18.4

21.6

27.2

24.4

19.3

3.2

2.7

13.7

15.2

3.0

2.5

Dr Reddy's

Neutral

2,964

50,546

16,043

18,119

23.1

24.7

126.0

157.8

23.5

18.8

3.5

3.0

15.7

17.1

3.1

2.7

Dishman Pharma

Neutral

176

2,839

1,718

1,890

21.7

21.8

8.7

10.4

20.2

16.9

1.8

1.7

9.3

10.2

2.0

1.7

GSK Pharma*

Neutral

3,110

26,342

3,528

3,811

16.6

18.8

51.8

59.4

60.0

52.4

16.1

16.0

26.3

30.6

7.3

6.8

Indoco Remedies

Sell

314

225

2,894

1,112

1,289

18.2

13.2

15.6

23.8

20.1

4.2

3.6

19.2

2.7

2.3

Ipca labs

Buy

518

613

6,534

3,303

3,799

15.3

17.3

19.7

29.9

26.3

2.6

2.4

9.1

9.4

2.1

1.8

Lupin

Accumulate

1,658

1,809

74,727

15,912

18,644

26.4

26.7

58.1

69.3

28.5

23.9

5.5

4.5

21.4

20.9

4.8

4.0

Sun Pharma

Accumulate

849

944

204,340

31,129

35,258

30.0

30.9

28.0

32.8

30.3

25.9

4.7

3.9

18.7

18.9

6.1

5.2

Power

Tata Power

Neutral

19,149

36,916

39,557

17.4

27.1

5.1

6.3

13.9

11.2

1.2

1.1

9.0

10.3

1.5

1.4

NTPC

Neutral

159

130,979

86,605

95,545

17.5

20.8

11.8

13.4

13.5

11.9

1.4

1.3

10.5

11.1

2.8

Power Grid

Neutral

178

93,018

25,763

29,762

74.3

73.1

14.8

17.3

12.0

10.3

1.9

1.6

16.9

17.5

7.8

7.5

Real Estate

MLIFE

Buy

435

554

1,785

925

1,139

18.4

22.3

18.3

33.8

23.8

12.9

1.1

4.9

8.5

2.7

2.1

Telecom

Bharti Airtel

Neutral

365

146,005

105,086

114,808

34.5

34.7

12.2

16.4

29.9

22.3

2.0

1.9

6.8

8.4

2.3

2.0

Idea Cellular

Neutral

105

37,916

40,133

43,731

37.2

37.1

6.4

6.5

16.5

16.2

1.4

1.3

8.2

7.6

2.0

1.7

Others

Abbott India

Neutral

4,668

9,919

3,153

3,583

14.1

14.4

152.2

182.7

30.7

25.5

150.6

128.6

25.6

26.1

2.8

2.4

Bajaj Electricals

Accumulate

268

299

2,712

5,351

6,098

5.7

5.9

12.4

15.7

20.1

15.8

3.1

2.8

14.4

16.1

0.5

Banco Products (India)

Neutral

209

1,494

1,353

1,471

12.3

12.4

14.5

16.3

14.4

12.8

19.9

17.9

14.5

14.6

1.0

0.9

Coffee Day Enterprises

Neutral

237

4,884

2,964

3,260

20.5

21.2

4.7

8.0

29.6

2.7

2.5

5.5

8.5

2.1

1.8

Competent Automobiles Neutral

155

1,137

1,256

3.1

2.7

28.0

23.6

5.5

6.6

29.8

26.9

14.3

11.5

0.1

Elecon Engineering

Accumulate

606

1,482

1,660

13.7

14.5

3.9

5.8

14.3

9.6

3.3

3.1

7.8

10.9

0.7

0.6

Finolex Cables

Neutral

390

5,970

2,883

3,115

12.0

12.1

14.2

18.6

27.5

21.0

14.6

12.8

15.8

14.6

1.7

1.6

Garware Wall Ropes

Neutral

455

996

898

997

11.9

11.7

29.0

32.9

15.7

13.8

2.3

2.0

14.9

14.6

1.0

0.9

Goodyear India*

Buy

524

631

1,209

1,598

1,704

10.4

10.2

49.4

52.6

10.6

10.0

49.0

43.0

18.2

17.0

0.4

Hitachi

Neutral

1,347

3,663

2,081

2,433

8.8

8.9

33.4

39.9

40.3

33.8

32.5

27.1

22.1

21.4

1.8

1.5

August 5, 2016

Stock Watch | August 2016

Company Name

Reco

CMP

Target

Mkt Cap

Sales (` cr)

OPM (%)

EPS (`)

PER (x)

P/BV (x)

RoE (%)

EV/Sales (x)

(`)

Price (`)

(` cr)

FY17E

FY18E

FY17E

FY18E

FY17E

FY18E

FY17E

FY18E

FY17E

FY18E

FY17E

FY18E

FY17E

FY18E

HSIL

Neutral

311

2,247

2,384

2,515

15.8

16.3

15.3

19.4

20.3

16.0

20.2

17.4

7.8

9.3

1.1

1.0

Interglobe Aviation

Neutral

827

29,818

21,122

26,005

14.5

27.6

110.7

132.1

7.5

6.3

44.7

31.9

168.5

201.1

1.4

1.1

Jyothy Laboratories

Neutral

286

5,174

1,440

2,052

11.5

13.0

8.5

10.0

33.6

28.6

8.1

7.5

18.6

19.3

3.9

2.7

Kirloskar Engines India

Neutral

272

3,933

2,554

2,800

9.9

10.0

10.5

12.1

25.9

22.5

10.8

10.2

10.7

11.7

1.2

1.0

Linc Pen & Plastics

Neutral

262

387

382

416

9.1

13.1

14.7

20.0

17.8

3.3

2.9

16.7

16.3

1.1

1.0

M M Forgings

Buy

445

546

537

546

608

20.4

20.7

41.3

48.7

10.8

9.1

60.9

53.9

16.6

17.0

0.8

0.7

Manpasand Bever.

Neutral

695

3,479

836

1,087

19.6

19.4

16.9

23.8

41.1

29.2

4.9

4.3

12.0

14.8

3.8

2.8

MT Educare

Neutral

147

583

366

417

17.7

18.2

9.4

10.8

15.6

13.6

3.5

3.0

22.2

22.3

1.5

1.3

Narayana Hrudaya

Neutral

319

6,528

1,873

2,166

11.5

11.7

2.6

4.0

120.8

80.6

7.4

6.7

6.1

8.3

3.6

3.1

Navkar Corporation

Buy

205

265

2,918

408

612

42.9

42.3

6.8

11.5

30.2

17.8

2.1

1.9

6.9

10.5

8.1

5.4

Navneet Education

Neutral

2,263

1,062

1,147

24.0

6.1

6.6

15.6

14.3

3.2

2.8

20.5

19.8

2.2

2.0

Nilkamal

Neutral

1,166

1,740

1,995

2,165

10.7

10.4

69.8

80.6

16.7

14.5

66.6

57.9

16.6

16.5

0.9

0.7

Page Industries

Neutral

13,523

15,083

2,450

3,124

20.1

17.6

299.0

310.0

45.2

43.6

301.2

229.9

47.1

87.5

6.4

5.0

Parag Milk Foods

Neutral

315

2,653

1,919

2,231

9.3

9.6

9.4

12.9

33.4

24.4

5.2

4.3

15.5

17.5

1.5

1.3

Quick Heal

Neutral

266

1,865

408

495

27.3

27.0

7.7

8.8

34.4

30.3

3.2

9.3

10.6

3.6

3.0

Radico Khaitan

Buy

125

1,202

1,659

1,802

13.0

13.2

6.3

7.4

14.2

12.2

1.2

1.1

8.6

9.3

1.2

1.1

Relaxo Footwears

Neutral

474

5,685

2,085

2,469

9.2

8.2

7.6

7.9

62.7

59.6

24.3

20.7

17.9

18.8

2.9

2.4

S H Kelkar & Co.

Neutral

252

3,648

1,036

1,160

15.1

15.0

6.1

7.2

41.3

35.1

4.4

4.0

10.7

11.5

3.4

3.0

Siyaram Silk Mills

Buy

1,050

1,347

984

1,799

2,040

11.6

11.7

104.9

122.4

10.0

8.6

1.6

1.4

16.4

0.7

Styrolution ABS India*

Accumulate

602

643

1,059

1,440

1,537

9.2

9.0

40.6

42.6

14.8

14.1

37.9

34.4

12.3

11.6

0.7

0.6

Surya Roshni

Buy

171

201

749

3,342

3,625

7.8

7.5

17.3

19.8

9.9

8.7

18.8

15.1

10.5

10.8

0.5

0.4

Team Lease Serv.

Neutral

1,065

1,821

3,229

4,001

1.5

1.8

22.8

32.8

46.8

32.4

5.0

4.3

10.7

13.4

0.5

0.4

The Byke Hospitality

Neutral

164

657

287

384

20.5

7.6

10.7

21.6

15.3

4.5

3.6

20.7

23.5

2.3

1.7

Transport Corp. of India

Neutral

356

2,724

2,671

2,911

8.5

8.8

13.9

15.7

25.7

22.7

3.5

3.1

13.7

13.8

1.1

1.0

TVS Srichakra

Buy

2,348

2,932

1,798

2,304

2,614

13.7

13.8

231.1

266.6

10.2

8.8

263.8

207.7

33.9

29.3

0.8

0.7

UFO Moviez

Neutral

525

1,448

619

685

33.2

33.4

30.0

34.9

17.5

15.0

2.4

2.1

13.8

13.9

2.1

1.7

Visaka Industries

Neutral

156

248

1,051

1,138

10.3

10.4

21.0

23.1

7.4

6.7

20.0

18.7

9.0

9.2

0.5

VRL Logistics

Neutral

312

2,850

1,902

2,119

16.7

16.6

14.6

16.8

21.4

18.6

4.7

4.1

21.9

22.2

1.7

1.5

Wonderla Holidays

Neutral

400

2,260

287

355

38.0

40.0

11.3

14.2

35.4

28.2

5.1

4.4

21.4

23.9

7.5

6.1

Source: Company, Angel Research, Note: *December year end; ^#September year end;

^&October year end; ^June year end; Price as of August 4, 2016

August 5, 2016

Top Picks Report | August 2016

Research Team Tel: 022 - 39357800

E-mail: [email protected]

Website: www.angelbroking.com

DISCLAIMER

Angel Broking Private Limited (hereinafter referred to as “Angel”) is a registered Member of National Stock Exchange of India Limited,

Bombay Stock Exchange Limited and Metropolitan Stock Exchange Limited. It is also registered as a Depository Participant with CDSL

and Portfolio Manager with SEBI. It also has registration with AMFI as a Mutual Fund Distributor. Angel Broking Private Limited is a

registered entity with SEBI for Research Analyst in terms of SEBI (Research Analyst) Regulations, 2014 vide registration number

INH000000164. Angel or its associates has not been debarred/ suspended by SEBI or any other regulatory authority for accessing

/dealing in securities Market. Angel or its associates/analyst has not received any compensation / managed or co-managed public

offering of securities of the company covered by Analyst during the past twelve months.

This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment

decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should

make such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the

companies referred to in this document (including the merits and risks involved), and should consult their own advisors to determine

the merits and risks of such an investment.

Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and

trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's

fundamentals. Investors are advised to refer the Fundamental and Technical Research Reports available on our website to evaluate the

contrary view, if any.

The information in this document has been printed on the basis of publicly available information, internal data and other reliable

sources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this

document is for general guidance only. Angel Broking Pvt. Limited or any of its affiliates/ group companies shall not be in any way

responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report.

Angel Broking Pvt. Limited has not independently verified all the information contained within this document. Accordingly, we cannot

testify, nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document.

While Angel Broking Pvt. Limited endeavors to update on a reasonable basis the information discussed in this material, there may be

regulatory, compliance, or other reasons that prevent us from doing so.

This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced,

redistributed or passed on, directly or indirectly.

Neither Angel Broking Pvt. Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from

or in connection with the use of this information.

August 5, 2016