Angel Top Picks - November 2016

Ongoing earning season confirms revival in domestic consumption

In October 2016 Top Picks report, we had shown faith in the India’s consumption

Top Picks

story. The ongoing earning season confirms our bias as companies in the

Company

CMP (`)

TP (`)

consumption sector have reported decent set of numbers so far. Most notably,

Banking/NBFC

companies in automobile sector have emerged as beneficiary of the ongoing

Dewan Housing

317

350

recovery in the consumer demand. The management commentary of following the

Equitas Holdings

176

235

results indicated that some green shots of recovery are seen in rural market and

Consumption

more growth will be visible in the next few quarters. We also observe improving

Amara Raja

1,029

1,218

sales and operating margins of some companies from food processing, pesticide,

Asian Granito

267

351

paint, and plastic industries. As the consumer demand strengthens, corporate

Bajaj Electricals

261

306

earnings are also expected to pick-up.

Blue Star

557

634

Mirza International

113

Exhibit 1: Revival trends in Q2FY17 in consumption sectors

Siyaram Silk Mills

1,554

1,714

Sector

Observations

Automobile

Strong volume and earnings growth, rural volumes picking up

HCL Tech

764

1,000

Building materials,

Improving sales of ceramic tiles, plastic pipes, plywoods, laminates

home furnishing

etc.

Infosys

981

1,249

Entertainment/ Media

Increasing traction in Ad spending by corporates

Media

Increase in domestic appliances and AC sales, 20% rise in sales

Jagran Prakashan

195

225

Consumer durables

reported by E-commerce sites (Flipkart, Amazon and Snapdeal) in

1^st week of October

TV Today

349

385

Source: Company, Angel Research

Real Estate/infra/Logistics

Mahindra Lifespace

421

522

Latest PMI suggests manufacturing sector is gathering steam

Navkar Corp.

203

265

Source: Angel Research;

Our confidence also stems from the October reading of Nikkei India

Note: CMP as of Nov 2, 2016

Manufacturing PMI, which stood at

54.4%, highest in the last

22 months

suggesting that domestic manufacturing sector is undergoing recovery on the back

of healthy increase in orders and output.

Exhibit 2: Manufacturing PMI at 22 month high

Source: Angel Research

Please refer to important disclosures at the end of this report

Top Picks Report | November 2016

Record food grain production to pave way for further rate cut

Thanks to the monsoon this year, a record food grain production is expected in

FY17. This will further help to curb the food inflation in the country. On this

backdrop, RBI may cut the interest rates which will decline bond yields further. Due

to low yields, equity has emerged as an attractive asset class and this can clearly

be seen from the negative FII inflows in the debt this year so far. In the earlier

instances when FII inflows in debt were negative, equity generated strong returns in

the subsequent year. The falling bond yields and improving macros are possibly

indicating that we will see a strong equity market next year and inflows will also

remain strong.

Exhibit 3: Record food grain production on cards

275

12.0

10.8

270

10.0

265

8.0

260

7.3

7.1

6.0

255

250

4.0

245

2.0

1.4

240

(0.2)

0.0

235

(1.5)

(2.0)

230

(2.4)

225

(4.0)

FY11

FY12

FY13

FY14

FY15

FY16

FY17E

Foodgrain production (mt)

Growth (%)

Source: Angel Research

Liquidity support to continue

As the economy is gearing for a GDP growth of 7-8% in next two years, equity

markets look bit concerned over possible rate hike by the Federal Reserve (Fed)

which may cause some liquidity tightening. There is, however, good scope to

believe that liquidity may sustain going forward. Last year, the Fed increased the

interest rate after a gap of 7 years and there haven’t been any further hikes so far.

Even though Fed has given green signal for December hike, we believe that rate

hike will be gradual which will avoid any tremors in the financial markets. The

Bank of Japan and European Central Bank continue to provide liquidity support

through their liquidity oriented monetary policies. So, there is a strong room to

believe that ample liquidity will remain in the markets in near future.

Overall, this year we are seeing a lot of positive things happening in the Indian

economy. However, there could also be some challenges if Fed goes for

accelerated interest rate hikes instead of gradual hikes. Despite this, we believe

that India remains an attractive market for investors due to recovery in consumer

demand and improving macros.

Our top-picks are focused on companies that will benefit from strong consumption

and low interest rates. This includes stocks from interest sensitive sectors like

Dewan Housing, Mahindra Lifespace, etc., and consumption sector like Bajaj

Electrical, Amara Raja, Blue Star, Asian Granito, Mirza International, etc.

November 3, 2016

Top Picks Report | November 2016

Stock Info

Dewan Housing

CMP

317



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

350

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

Upside

10.4%

and low income group picks up, while PAT CAGR is expected to be 23%.

Sector

Financials

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

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

Market Cap (` cr)

9,984

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

Beta

1.6

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

52 Week High / Low

337 / 141

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

400

borrowings are due for maturity over the next three years and recently DHFL

350

was able to raise large sum ~ Rs14, 000 cr via NCDs at a competitive rates

300

and this should help maintain its NIM at ~2.9%.

250

200

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

150

over FY2015-18E, which is likely to translate in an earnings CAGR of 23%,

100

over the same period. The stock currently trades at 1.5x FY2018E ABV. We

have an Accumulate stand on the stock, with a target price of `350.

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

2,050

2.9

879

28.1

187.8

1.2

15.6

11.3

1.7

FY2018E

2,500

2.9

1,111

35.5

216.4

1.2

16.5

8.9

1.5

Source: Company, Angel Research

Stock Info

Equitas Holdings

CMP

176

 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

33.5%

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)

5,989

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

3 year-Chart

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

220

quality going ahead.

210

200

 NIM likely to remain healthy: After conversion to SFB the company has started

190

raising deposits at a lower cost vs borrowings leading to better cost of funds.

180

170

Hence we expect the NIM to remain strong at ~10-11%, going ahead.

160

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

150

140

CAGR of 38% & 37% over FY2016-18E. The stock currently trades at 2.3x

130

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

120

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

26.3

2.6

FY2018E

1,465

11.4

315

9.4

77.6

2.8

12.9

18.7

2.3

Source: Company, Angel Research

November 3, 2016

Top Picks Report | November 2016

Stock Info

Amara Raja Batteries

CMP

1,029

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

1,218

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

Upside

18.4%

grew at a 21% CAGR over FY2010-16 as compared to standalone Exide's

growth of 7%), leading to its market share improving from 25% in FY10 to

Sector

Auto Ancillary

about 35% currently. ARBL's outperformance has been mainly on back of its

Market Cap (` cr)

17,571

association with global battery leader Johnson Controls Inc (which also holds

Beta

0.8

26% stake in ARBL) for manufacturing ducts.

52 Week High / Low

1,077 / 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

3 year-Chart

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

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

1200

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

1000

 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

400

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

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

25.3

29.5

6.7

15.8

3.1

Source: Company, Angel Research

FY2018E

6,471

17.6

742

43.5

24.8

23.7

5.4

13.0

2.5

Source: Company, Angel Research

Stock Info

Asian Granito

CMP

267

 AGIL’s current, vitrified sales (35%) are lower as compared to its peers like

351

Somany Ceramics (47%) and Kajaria Ceramics (61%). Recently, AGIL has

Upside

31.4%

launched various products in premium segment. Going forward, we expect

AGIL’s profit margin to improve due to increase in focus for higher vitrified

Sector

Ceramics

product sales, which is a high margin business.

Market Cap (` cr)

799

 AGIL is continuously putting efforts to increase the B2C sales from the current

Beta

1.4

level (35% in FY16). It is expected to reach up to 50% in next 2-3 years on the

52 Week High / Low

304 / 109

back of various initiatives taken by AGIL to increase direct interaction with customers

like strengthening distribution network, participation in key trade exhibition, etc.

3 year-Chart

 In July FY2016, AGIL acquired Artistique Ceramic which has a better margin

profile. Going forward, we expect the company to improve its operating

350

margin from 7.5% in FY16 (excluding merger) to

12-12.5% in coming

300

financial year. Artisique Ceramics has a contract with RAS GAS to supply

250

quality natural gas at a discounted rate of 50% to current market rate, which

200

would reduce the overall power & fuel cost of the company.

150

 We expect AGIL to report a net revenue CAGR of ~9% to ~`1,182cr and net

100

profit CAGR of ~39% to `48cr over FY2016-18E. We have a Buy rating on

the stock and target price of `351.

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

1,071

12.1

12.7

9.5

21.0

2.0

8.2

1.0

FY2018E

1,182

12.4

16.0

10.7

16.7

1.8

7.2

0.9

Source: Company, Angel Research

November 3, 2016

Top Picks Report | November 2016

Stock Info

Bajaj Electricals

CMP

261

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

306

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

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

Upside

17.2%

reaching out to 400,000 retailers.

Sector

Cons. Durable

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

Market Cap (` cr)

2,632

underperforming owing to cost overruns and delays in project executions.

Beta

0.9

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

52 Week High / Low

280 / 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

with the Lighting and Consumer Durables segments expected to benefit from

400

an improvement in consumer sentiments going forward, we expect the

350

300

company’s top-line to grow at a CAGR of ~12% to `5,805cr and bottom-line

250

to grow at a CAGR of 24% to `147cr over FY2016-FY2018E. We recommend

200

a Buy rating on the stock.

150

Key Financials

100

Y/E

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

March

(` cr)

(%)

(` cr)

(`)

(%)

(x)

FY2017E

5,099

5.6

115

11.4

13.4

22.9

3.1

9.5

0.5

FY2018E

5,805

5.9

147

14.6

15.1

17.9

2.7

7.9

0.5

Source: Company, Angel Research

Stock Info

Blue Star

CMP

557

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

634

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

Upside

13.8%

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)

5,307

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

581 / 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.

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

700

600

to post a revenue CAGR of ~16% over FY2016-18E and margins to improve

500

from 5.3% in FY2015 to 7.3% in FY2018E. Moreover, the merger of Blue Star

400

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

300

Accumulate recommendation on the stock.

200

Key Financials

100

Y/E

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

March

(` cr)

(%)

(` cr)

(`)

(%)

(x)

FY2017E

4,283

5.9

141

14.9

20.4

37.4

7.3

20.1

1.3

FY2018E

5,077

7.3

211

22.1

26.4

25.2

6.1

13.6

1.1

Source: Company, Angel Research

November 3, 2016

Top Picks Report | November 2016

Stock Info

Mirza International

CMP

 In the branded domestic segment, we expect the company to report a ~24%

113

CAGR over FY2016-18E to `346cr. We anticipate strong growth for the

Upside

24.2 %

company on the back of (a) the company’s wide distribution reach through its

1,000+ outlets including 120 exclusive brand outlets (EBOs) in 35+ cities and

Sector

Footwear

the same are expected to reach 200 over the next 2-3 years and (b) strong

Market Cap (` cr)

1,095

branding (Red Tape) in the shoes segment.

Beta

1.5

 MIL’s major export revenue comes from the UK (73%), followed by the US

52 Week High / Low

145 / 84

(14%) and the balance from ROW. Export constitutes ~75% of the company’s

total revenue. We expect the company to report healthy growth over the next

2-3 years on back of recovery in the UK market, strong growth in the US market

3 year-Chart

and with it tapping newer international geographies like the Middle East countries.

160

140

 In FY2016, the company acquired Genesis Footwear which has a better

120

margin profile than it. The deal resulted in MIL’s EPS increasing by ~4% and

100

ROE improving from 15.9% to 17.5%. Further, due to this merger, the

company’s capacity has increased from 5.4mn to 6.4mn units.

 We expect MIL to report a net revenue CAGR of ~11% to ~`1,148cr and net

profit CAGR of ~11% to `97cr over FY2016-18E. We have a Buy rating on

the stock and target price of `113.

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

1,024

18.0

6.9

16.6

13.2

2.2

7.3

1.3

FY2018E

1,148

18.0

8.0

16.2

11.4

1.9

6.4

1.1

Source: Company, Angel Research

Stock Info

Siyaram Silk Mills

CMP

1,554

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

1,714

segments of the market. Further, SSML entered the ladies' salwar kameez and

Upside

10.2%

ethnic wear segment. Going forward, we believe that the company would be able to

leverage its brand equity and continue to post strong performance.

Sector

Textile

Market Cap (` cr)

1,457

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

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

Beta

0.8

300-350 stores going forward. Further, the company's brands are sold across

52 Week High / Low

1,690/912

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

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

1800

1600

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

1400

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

1200

SSML trades at an inexpensive valuation. We have an Accumulate

1000

800

recommendation on the stock and target price of `1,714.

600

400

Key Financials

200

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

14.8

2.4

8.5

1.0

FY2018E

2,040

11.7

115

122.4

16.4

12.7

2.1

7.4

0.9

Source: Company, Angel Research

November 3, 2016

Top Picks Report | November 2016

Stock Info

HCL Technologies

CMP

764

 Healthy pipeline: 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

30.8%

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.

Market Cap (` cr)

1,07,831

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

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

Beta

0.6

Geometric Software and the Volvo deal).

52 Week High / Low

890 / 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

13.7

3.0

10.0

2.0

FY2018E

57,168

20.5

9,037

64.1

17.9

11.9

2.3

8.0

1.7

Source: Company, Angel Research

Stock Info

Infosys

CMP

981

 Revenue guidance for FY17: The Management has lowered its guidance for

1,249

FY2017, to 8-9% in CC terms and 9.2-10.2% in INR terms (exchange rate as

Upside

27.3%

on March 31, 2016). For FY2016, the company posted a 13.3% growth in CC

Sector

terms V/s a guidance of 12.8-13.2% growth (in CC). We expect the company

Market Cap (` cr)

2,25,353

to post ~9.0% USD revenue growth in FY2017.

Beta

0.8

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

52 Week High / Low

1,278 / 980

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

3 year-Chart

14% CAGR over the period. Over the near term, we expect Infosys to post a

1400

9.0% USD revenue growth in FY2017. Over FY2016-18E, we expect

1200

USD and INR revenue to grow at a CAGR of 9.0% and 9.5%, respectively.

1000

 Outlook and Valuations: The stock trades at a valuation of 14.1x FY2018E

800

600

earnings. We recommend Buy on the stock with a price target of `1,249.

400

Key Financials

200

Y/E

Sales

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

March

(` cr)

(%)

(` cr)

(`)

(%)

(x)

FY2017E

68,350

27.0

14,354

62.5

21.3

15.7

3.3

10.8

2.9

FY2018E

77,236

27.0

15,928

69.4

21.6

14.1

3.1

9.4

2.5

Source: Company, Angel Research

November 3, 2016

Top Picks Report | November 2016

Stock Info

Jagran Prakashan

CMP

195

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

225

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

15.4%

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)

6,378

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

213/139

~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.

250

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

200

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

economy. Hence, we maintain a Buy rating on the stock with a target price of

150

`225.

100

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

18.1

3.9

10.0

2.7

FY2018E

2,635

28.0

409

12.5

21.7

15.6

3.4

8.7

2.4

Source: Company, Angel Research

Stock Info

TV Today Network

CMP

349

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

385

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

Upside

10.3%

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

Sector

Media

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)

2,079

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

360 /230

 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 an Accumulate

150

recommendation on the stock and target price of `385

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

19.0

3.3

9.7

2.9

Source: Company, Angel Research

FY2018E

743

27.5

128

21.4

17.2

16.3

2.8

7.9

2.4

Source: Company, Angel Research

November 3, 2016

Top Picks Report | November 2016

Stock Info

Mahindra Lifespace

CMP

421

 MLF has 13 projects under implementation across cities. MLF has exhibited

522

fast completion of projects compared to others. Sales cycle in ~65% of

Upside

24.0%

projects is faster than execution cycle, contrary to industry trends. This fast

execution and sales is optimal, as it helps MLF in revenue recognition,

Sector

Real Estate

inventory cycle (better than Oberoi, DLF), cash flows and profitability. This

Market Cap (` cr)

1,728

translates in creating a virtuous cycle of continuous fast growth.

Beta

0.4

 MLF as of 4QFY2016 is pursuing ~4.0mn sq. ft. of sale of the total ~15.0mn

52 Week High / Low

518 / 415

sq. ft. of saleable area. Having sold ~60% of ongoing projects, we expect MLF

to launch ~2.8mn sq.ft. of saleable area in rational way during 4QFY2016-

3 year-Chart

2QFY2018E, across 6 cities. Maturity at existing projects, new launches give better

700

revenue visibility for medium-term. Further, MLF is sitting on land bank of 11.0mn

600

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

500

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

400

impacted, given their strong parentage and ethically implemented processes.

300

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

200

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

100

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 `522.

Key Financials

Source: Company, Angel Research

Y/E

Sales

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

March

(` cr)

(%)

(` cr)

(`)

(%)

(x)

FY2017E

1,152

22.7

29.9

7.6

14.6

1.0

15.7

2.2

FY2018E

1,300

24.6

138

35.8

8.6

11.8

1.0

10.1

1.9

Source: Company, Angel Research

Stock Info

Navkar

CMP

203

 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

30.5%

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

Sector

Logistics

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

Market Cap (` cr)

2,893

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

Beta

0.6

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

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

250

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

200

to capacity constraints at CFS.

150

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

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

30.0

2.1

18.8

8.0

FY2018E

612

42.3

164

11.5

10.5

17.6

1.9

12.7

5.3

Source: Company, Angel Research

November 3, 2016

Top Picks Report | November 2016

Macro watch

Exhibit 4: Quarterly GDP trends

Exhibit 5: IIP trends

(%)

9.0

12.0

8.3

9.9

7.8

7.9

10.0

8.0

7.5

7.6

7.2

7.1

8.0

6.6

6.7

7.0

6.4

6.0

5.8

6.0

4.0

1.9

2.0

1.3

2.0

0.3

5.0

4.0

(2.0)

(0.7)

(0.9)

(1.6)

(1.3)

(4.0)

(2.5)

3.0

(3.4)

(6.0)

Source: CSO, Angel Research

Source: MOSPI, Angel Research

Exhibit 6: Monthly CPI inflation trends

Exhibit 7: Manufacturing and services PMI

56.0

Mfg. PMI

Services PMI

(%)

55.0

7.0

6.1

5.7

5.8

54.0

5.6

5.5

6.0

5.4

5.3

5.0

5.1

53.0

4.8

5.0

4.3

52.0

51.0

4.0

50.0

3.0

49.0

2.0

48.0

1.0

47.0

46.0

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

Source: MOSPI, Angel Research

Exhibit 8: Exports and imports growth trends

Exhibit 9: Key policy rates

(%)

Exports yoy growth

Imports yoy growth

(%)

Repo rate

Reverse Repo rate

CRR

10.0

7.00

5.0

6.50

0.0

6.00

(5.0)

5.50

(10.0)

5.00

(15.0)

4.50

(20.0)

4.00

(25.0)

(30.0)

3.50

(35.0)

3.00

Source: Bloomberg, Angel Research

Source: RBI, Angel Research

November 3, 2016

Stock Watch | November 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

216

4,208

1,937

2,164

13.3

14.3

9.0

11.0

24.0

19.7

4.2

3.7

18.4

19.8

2.2

1.9

United Phosphorus

Neutral

680

34,470

15,176

17,604

18.5

37.4

44.6

18.2

15.2

3.6

3.0

21.4

21.2

2.4

2.0

Auto & Auto Ancillary

Ashok Leyland

Buy

111

25,556

22,407

26,022

10.6

5.2

6.4

17.2

14.0

3.9

3.3

23.6

24.7

1.2

1.0

Bajaj Auto

Neutral

2,818

81,533

25,093

27,891

19.5

19.2

143.9

162.5

19.6

17.3

5.5

4.7

30.3

29.3

3.0

2.6

Bharat Forge

Neutral

852

19,838

7,726

8,713

20.5

21.2

35.3

42.7

24.1

20.0

4.5

4.0

18.9

20.1

2.6

2.3

Eicher Motors

Neutral

24,780

67,305

16,583

20,447

17.5

18.0

598.0

745.2

41.4

33.3

14.2

10.8

41.2

38.3

3.9

3.1

Gabriel India

Accumulate

121

130

1,739

1,544

1,715

9.0

9.3

5.4

6.3

22.4

19.2

4.2

3.7

18.9

19.5

1.1

1.0

Hero Motocorp

Accumulate

3,324

3,541

66,381

30,958

34,139

15.7

193.6

208.3

17.2

16.0

6.7

5.6

34.2

30.5

2.0

1.8

Jamna Auto Industries Neutral

225

1,794

1,486

1,620

9.8

9.9

15.0

17.2

15.0

13.1

3.3

2.8

21.8

21.3

1.3

1.2

L G Balakrishnan & Bros Neutral

684

1,074

1,302

1,432

11.6

11.9

43.7

53.0

15.7

12.9

2.2

2.0

13.8

14.2

0.9

0.8

Mahindra and Mahindra Neutral

1,369

85,049

46,534

53,077

11.6

11.7

67.3

78.1

20.3

17.5

3.3

2.9

15.4

15.8

1.8

1.5

Maruti

Neutral

5,799

175,164

69,186

82,217

14.7

14.4

198.5

241.4

29.2

24.0

5.7

4.6

20.2

19.9

2.2

1.8

Minda Industries

Neutral

384

3,050

2,728

3,042

9.0

9.1

68.2

86.2

5.6

4.5

1.3

1.0

23.8

24.3

1.2

1.0

Motherson Sumi

Neutral

323

45,358

45,896

53,687

7.8

8.2

13.0

16.1

24.8

20.1

8.0

6.4

34.7

35.4

1.1

0.9

Rane Brake Lining

Neutral

1,084

858

511

562

11.3

11.5

28.1

30.9

38.6

35.1

5.9

5.3

15.3

15.0

1.8

1.7

Setco Automotive

Neutral

562

741

837

13.0

15.2

17.0

2.8

2.5

0.5

0.4

15.8

16.3

1.1

1.0

Tata Motors

Neutral

514

148,402

300,209

338,549

8.9

8.4

42.7

54.2

12.0

9.5

1.9

1.6

15.6

17.2

0.6

0.5

TVS Motor

Neutral

401

19,030

13,390

15,948

6.9

7.1

12.8

16.5

31.4

24.2

7.8

6.2

26.3

27.2

1.5

1.2

Amara Raja Batteries

Buy

1,029

1,218

17,571

5,429

6,471

17.5

17.6

35.3

43.5

29.1

23.6

6.7

5.4

25.3

24.8

3.1

2.5

Exide Industries

Neutral

197

16,749

7,439

8,307

15.0

8.1

9.3

24.3

21.2

3.4

3.0

14.3

16.7

1.9

1.7

Apollo Tyres

Buy

199

235

10,145

12,877

14,504

14.3

13.9

21.4

23.0

9.3

8.7

1.4

1.3

16.4

15.2

0.9

Ceat

Buy

1,204

1,450

4,869

7,524

8,624

13.0

12.7

131.1

144.3

9.2

8.3

1.7

1.4

19.8

18.6

0.7

0.6

Indag Rubber

Neutral

189

497

286

326

19.8

16.8

11.7

13.3

16.2

14.2

2.7

2.6

17.8

17.1

1.4

1.2

JK Tyres

Neutral

143

3,246

7,455

8,056

15.0

21.8

24.5

6.6

5.8

1.4

1.1

22.8

21.3

0.6

0.5

Swaraj Engines

Neutral

1,375

1,708

660

810

15.2

16.4

54.5

72.8

25.2

18.9

7.9

7.1

31.5

39.2

2.4

1.9

Subros

Neutral

167

999

1,488

1,681

11.7

11.9

6.4

7.2

26.0

23.2

2.7

2.5

10.8

11.4

0.9

0.8

Banking

Axis Bank

Buy

476

630

113,538

46,932

53,575

3.5

3.4

32.3

44.6

14.7

10.7

1.9

1.64

13.6

16.5

Bank of Baroda

Neutral

150

34,539

19,980

23,178

1.8

11.5

17.3

13.0

8.7

1.5

1.2

8.3

10.1

Canara Bank

Neutral

294

15,972

15,225

16,836

1.8

14.5

28.0

20.3

10.5

1.4

1.1

5.8

8.5

Dewan Housing Finance Accumulate

317

350

9,926

2,225

2,688

2.9

29.7

34.6

10.7

9.2

1.7

1.5

16.1

16.8

Equitas Holdings

Buy

176

235

5,894

939

1,281

11.7

11.5

5.8

8.2

30.3

21.4

2.6

2.3

10.9

11.5

Federal Bank

Neutral

13,642

9,353

10,623

2.9

4.4

5.8

18.0

13.7

1.7

1.5

9.5

11.0

HDFC

Neutral

1,404

221,952

11,475

13,450

3.4

45.3

52.5

31.0

26.7

6.0

5.3

20.2

20.5

HDFC Bank

Accumulate

1,246

1,350

315,468

46,097

55,433

4.5

58.4

68.0

21.3

18.3

3.7

3.13

18.8

18.6

ICICI Bank

Neutral

272

158,194

39,029

45,903

3.3

16.7

16.3

16.7

2.0

1.8

10.1

12.4

LIC Housing Finance

Accumulate

573

630

28,930

3,712

4,293

2.6

2.5

39.0

46.0

14.7

12.5

2.8

2.4

19.9

20.1

November 3, 2016

Stock Watch | November 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

137

29,100

23,532

23,595

2.3

2.4

6.8

12.6

20.1

10.9

3.1

2.2

3.3

6.5

RBL Bank

Neutral

382

14,129

1,783

2,309

2.6

12.7

16.4

30.1

23.3

3.3

2.9

12.8

13.3

South Ind.Bank

Neutral

3,112

6,435

7,578

2.5

2.7

3.1

8.5

7.4

1.1

0.9

10.1

11.2

St Bk of India

Neutral

251

195,079

88,650

98,335

2.6

13.5

18.8

18.6

13.4

1.8

1.6

7.0

8.5

Union Bank

Neutral

139

9,562

13,450

14,925

2.3

25.5

34.5

5.5

4.0

0.8

0.7

7.5

10.2

Yes Bank

Neutral

1,211

50,974

8,978

11,281

3.3

3.4

74.0

90.0

16.4

13.5

3.1

2.6

17.0

17.2

Capital Goods

ACE

Neutral

551

709

814

4.1

4.6

1.4

2.1

39.8

26.5

1.6

1.5

4.4

6.0

0.9

0.8

BEML

Neutral

916

3,813

3,451

4,055

6.3

9.2

31.4

57.9

29.2

15.8

1.8

1.6

6.3

10.9

1.2

1.0

BGR Energy

Neutral

119

858

16,567

33,848

6.0

5.6

7.8

5.9

15.3

20.2

0.9

0.8

4.7

4.2

0.1

Bharat Electronics

Accumulate

1,302

1,414

31,244

8,137

9,169

16.8

17.2

58.7

62.5

22.2

20.8

3.4

3.1

44.6

46.3

2.8

2.5

BHEL

Neutral

137

33,606

28,797

34,742

2.8

2.3

6.9

59.7

19.9

1.0

1.3

4.8

0.8

0.6

Blue Star

Accumulate

557

634

5,307

4,283

5,077

5.9

7.3

14.9

22.1

37.4

25.1

7.3

6.1

20.4

26.4

1.3

1.1

Crompton Greaves

Neutral

4,835

5,777

6,120

5.9

7.0

3.3

4.5

23.4

17.1

1.0

4.4

5.9

0.8

0.7

Greaves Cotton

Neutral

137

3,351

1,755

1,881

16.8

16.9

7.8

8.5

17.6

16.1

3.5

3.3

20.6

20.9

1.6

1.4

Inox Wind

Neutral

218

4,827

5,605

6,267

15.7

16.4

24.8

30.0

8.8

7.3

2.4

1.8

25.9

24.4

0.9

0.8

KEC International

Neutral

123

3,160

9,294

10,186

7.9

8.1

9.9

11.9

12.4

10.3

1.8

1.6

15.6

16.3

0.6

0.5

Thermax

Neutral

851

10,137

5,421

5,940

7.3

25.7

30.2

33.1

28.2

4.0

3.7

12.2

13.1

1.7

1.6

VATech Wabag

Buy

489

681

2,664

3,136

3,845

8.9

9.1

26.0

35.9

18.8

13.6

2.4

2.0

13.4

15.9

0.7

0.6

Voltas

Accumulate

373

407

12,347

6,511

7,514

7.9

8.7

12.9

16.3

28.9

22.9

5.2

4.6

16.7

18.5

1.6

1.4

Cement

ACC

Neutral

1,491

27,995

11,225

13,172

13.2

16.9

44.5

75.5

33.5

19.7

3.2

2.9

11.2

14.2

2.5

2.1

Ambuja Cements

Neutral

241

47,775

9,350

10,979

18.2

22.5

5.8

9.5

41.5

25.3

3.5

3.1

10.2

12.5

5.1

4.4

India Cements

Neutral

155

4,763

4,364

4,997

18.5

19.2

7.9

11.3

19.6

13.7

1.4

8.0

8.5

1.8

1.6

JK Cement

Neutral

909

6,356

4,398

5,173

15.5

17.5

31.2

55.5

29.1

16.4

3.5

3.0

12.0

15.5

2.0

1.7

J K Lakshmi Cement

Buy

482

565

5,676

2,913

3,412

14.5

19.5

7.5

22.5

64.3

21.4

4.0

3.3

12.5

18.0

2.5

2.1

Orient Cement

Buy

171

215

3,503

2,114

2,558

18.5

20.5

8.1

11.3

21.1

15.1

3.1

2.6

9.0

14.0

2.3

1.8

UltraTech Cement

Neutral

3,895

106,892

25,768

30,385

21.0

23.5

111.0

160.0

35.1

24.3

4.5

3.9

13.5

15.8

4.2

3.5

Construction

Engineers India

Neutral

262

8,840

1,725

1,935

16.0

19.1

11.4

13.9

23.0

18.9

3.2

3.1

13.4

15.3

4.0

3.6

Gujarat Pipavav Port

Neutral

168

8,127

705

788

52.2

51.7

5.0

5.6

33.6

30.0

3.3

3.0

11.2

9.5

ITNL

Neutral

105

3,467

8,946

10,017

31.0

31.6

8.1

9.1

13.0

11.6

0.5

4.2

5.0

3.7

3.4

KNR Constructions

Accumulate

722

802

2,032

1,385

1,673

14.7

14.0

41.2

48.5

17.5

14.9

3.3

2.8

14.9

15.2

1.5

1.3

Larsen & Toubro

Buy

1,446

1,700

134,801

67,665

77,249

10.7

11.5

57.3

71.2

25.2

20.3

2.3

2.2

12.6

14.3

2.2

1.9

MEP Infra

Neutral

674

1,877

1,943

30.6

29.8

3.0

4.2

13.8

9.9

6.7

4.5

0.6

1.7

1.6

Nagarjuna Const.

Neutral

4,953

8,842

9,775

9.1

8.8

5.3

6.4

16.8

13.9

1.3

1.2

8.2

9.1

0.7

0.6

NBCC

Neutral

240

14,373

7,428

9,549

7.9

8.6

8.2

11.0

29.2

21.8

1.5

1.1

28.2

28.7

1.6

1.2

PNC Infratech

Buy

120

143

3,087

2,350

2,904

13.1

13.2

9.0

8.8

13.4

13.7

0.5

0.4

15.9

13.9

1.4

1.2

Power Mech Projects

Neutral

495

728

1,801

2,219

12.7

14.6

72.1

113.9

6.9

4.3

1.3

1.1

16.8

11.9

0.4

0.3

November 3, 2016

Stock Watch | November 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

Sadbhav Engineering

Accumulate

269

298

4,606

3,598

4,140

10.3

10.6

9.0

11.9

29.8

22.6

3.1

2.7

9.9

11.9

1.6

1.3

Simplex Infra

Neutral

322

1,592

6,829

7,954

10.5

31.4

37.4

10.2

8.6

1.1

1.0

9.9

13.4

0.7

0.6

SIPL

Neutral

100

3,513

1,036

1,252

65.5

66.2

(8.4)

(5.6)

3.7

4.3

(22.8)

(15.9)

11.6

9.7

FMCG

Asian Paints

Neutral

1,062

101,872

17,128

18,978

16.8

16.4

19.1

20.7

55.6

51.3

19.3

18.2

34.8

35.5

5.9

5.3

Britannia

Accumulate

3,303

3,626

39,622

9,795

11,040

14.6

14.9

80.3

94.0

41.1

35.1

16.9

13.1

41.2

3.9

3.4

Colgate

Neutral

956

26,011

4,605

5,149

23.4

23.8

26.9

40.2

35.6

22.2

17.4

64.8

66.8

5.6

5.0

Dabur India

Neutral

294

51,772

8,315

9,405

19.8

20.7

8.1

9.2

36.3

32.0

10.1

8.4

31.6

31.0

5.9

5.2

GlaxoSmith Con*

Neutral

5,943

24,992

4,350

4,823

21.2

21.4

179.2

196.5

33.2

30.2

8.8

7.5

27.1

26.8

5.1

4.5

Godrej Consumer

Neutral

1,563

53,227

10,235

11,428

18.4

18.6

41.1

44.2

38.0

35.4

8.4

7.1

24.9

24.8

5.3

4.7

HUL

Neutral

841

182,110

35,252

38,495

17.8

20.6

22.4

40.8

37.6

38.9

33.4

95.6

88.9

5.0

4.6

ITC

Buy

237

284

286,440

40,059

44,439

38.3

39.2

9.0

10.1

26.4

23.4

7.4

6.4

27.8

27.5

6.6

6.0

Marico

Accumulate

269

300

34,648

6,430

7,349

18.8

19.5

6.4

7.7

42.0

34.9

12.7

10.7

33.2

32.5

5.2

4.5

Nestle*

Neutral

6,749

65,067

10,073

11,807

20.7

21.5

124.8

154.2

54.1

43.8

22.2

20.0

34.8

36.7

6.3

5.3

Procter & Gamble

Neutral

7,160

23,243

2,939

3,342

23.2

23.0

146.2

163.7

49.0

43.7

109.7

105.1

25.3

23.5

7.4

6.5

Tata Global

Neutral

135

8,517

8,675

9,088

9.8

7.4

8.2

18.2

16.5

2.1

2.0

7.9

8.1

0.9

0.8

HCL Tech^

Buy

764

1,000

107,803

49,242

57,168

20.5

55.7

64.1

13.7

11.9

2.8

2.1

20.3

17.9

2.0

1.7

Infosys

Buy

981

1,249

225,353

68,350

77,326

27.0

62.5

69.4

15.7

14.1

3.3

3.1

21.3

21.6

2.7

2.4

TCS

Accumulate

2,304

2,620

454,075

119,025

133,308

27.6

131.2

145.5

17.6

15.8

5.7

5.2

32.4

33.1

3.6

3.2

Tech Mahindra

Buy

430

600

41,740

29,673

32,937

15.5

17.0

32.8

39.9

13.1

10.8

2.6

2.2

19.6

20.7

1.1

1.0

Wipro

Buy

458

590

111,315

55,440

60,430

18.1

35.9

39.9

12.8

11.5

2.3

2.1

19.0

19.3

1.7

1.6

Media

D B Corp

Neutral

381

7,005

2,297

2,590

27.4

28.2

21.0

23.4

18.2

16.3

4.2

3.7

23.7

23.1

2.8

2.5

Hindustan Media Ven.

Neutral

301

2,209

1,016

1,138

24.3

25.2

27.3

30.1

11.0

10.0

2.1

1.9

16.2

15.8

1.5

1.3

HT Media

Neutral

2,000

2,693

2,991

12.6

12.9

7.9

9.0

10.9

9.6

0.9

7.8

8.3

0.3

0.2

Jagran Prakashan

Buy

195

225

6,378

2,355

2,635

28.0

10.8

12.5

18.1

15.6

3.9

3.4

21.7

2.7

2.4

Sun TV Network

Neutral

534

21,048

2,850

3,265

70.1

71.0

26.2

30.4

20.4

17.6

5.2

4.6

24.3

25.6

7.0

6.0

TV Today Network

Accumulate

349

385

2,079

637

743

27.5

18.4

21.4

19.0

16.3

3.3

2.8

17.4

17.2

2.9

2.4

Metal

Coal India

Neutral

328

206,987

84,638

94,297

21.4

22.3

24.5

27.1

13.4

12.1

5.6

5.3

42.6

46.0

2.0

1.8

Hind. Zinc

Neutral

270

113,957

14,252

18,465

55.9

48.3

15.8

21.5

17.1

12.5

2.8

2.4

17.0

20.7

8.0

6.2

Hindalco

Neutral

156

32,286

107,899

112,095

7.4

8.2

9.2

13.0

17.0

12.0

0.8

4.8

6.6

0.8

JSW Steel

Neutral

1,634

39,494

53,201

58,779

16.1

16.2

130.6

153.7

12.5

10.6

1.7

1.5

14.0

14.4

1.5

1.3

NMDC

Neutral

138

54,852

6,643

7,284

44.4

47.7

7.1

7.7

19.5

18.0

1.7

1.6

8.8

9.2

6.0

5.4

SAIL

Neutral

21,229

47,528

53,738

(0.7)

2.1

(1.9)

2.6

19.8

0.6

0.5

(1.6)

3.9

1.3

1.2

Tata Steel

Neutral

414

40,174

121,374

121,856

7.2

8.4

18.6

34.3

22.2

12.1

1.4

1.3

6.1

10.1

1.0

0.9

Vedanta

Neutral

218

64,704

71,744

81,944

19.2

21.7

13.4

20.1

16.3

10.9

1.4

1.3

8.4

11.3

1.3

1.0

November 3, 2016

Stock Watch | November 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

241

45,184

9,127

10,632

4.3

20.6

8.8

11.7

27.4

20.6

0.9

3.3

4.2

6.4

5.3

GAIL

Neutral

429

54,392

56,220

65,198

9.3

10.1

27.1

33.3

15.8

12.9

1.4

1.3

9.3

10.7

1.2

1.0

Indian Oil Corp

Neutral

316

153,495

373,359

428,656

5.9

5.5

54.0

59.3

5.9

5.3

0.9

0.8

16.0

15.6

0.6

0.5

ONGC

Neutral

277

237,287

137,222

152,563

15.0

21.8

19.5

24.1

14.2

11.5

1.2

1.1

8.5

10.1

2.0

1.8

Reliance Industries

Neutral

1,024

332,043

301,963

358,039

12.1

12.6

87.7

101.7

11.7

10.1

1.2

1.1

10.7

11.3

1.6

1.3

Pharmaceuticals

Alembic Pharma

Neutral

673

12,679

3,483

4,083

20.2

21.4

24.3

30.4

27.7

22.1

6.3

5.0

25.5

25.3

3.6

3.0

Aurobindo Pharma

Accumulate

789

877

46,170

15,720

18,078

23.7

41.4

47.3

19.1

16.7

5.0

3.9

29.6

26.1

3.2

2.7

Cadila Healthcare

Neutral

405

41,503

11,126

13,148

22.0

17.1

20.0

23.7

20.3

6.1

4.8

28.8

26.6

3.7

3.1

Cipla

Neutral

559

44,903

15,378

18,089

17.4

18.4

21.6

27.2

25.9

20.5

3.3

2.9

13.7

15.2

3.1

2.6

Dishman Pharma

Neutral

245

3,961

1,718

1,890

22.7

22.8

9.5

11.3

25.8

21.7

2.5

2.3

10.1

10.9

2.8

2.4

Dr Reddy's

Neutral

3,258

53,991

16,043

18,119

23.1

24.7

126.0

157.8

25.9

20.6

3.8

3.3

15.7

17.1

3.3

2.9

GSK Pharma*

Neutral

2,813

23,824

3,528

3,811

16.6

18.8

51.8

59.4

54.3

47.4

14.5

26.3

30.6

6.5

6.1

Indoco Remedies

Neutral

282

2,597

1,112

1,289

18.2

13.2

15.6

21.3

18.1

3.8

3.2

19.2

2.4

2.1

Ipca labs

Neutral

596

7,520

3,303

3,799

15.3

17.3

19.7

34.5

30.3

3.0

2.7

9.1

9.4

2.4

2.1

Lupin

Buy

1,496

1,809

67,423

15,912

18,644

26.4

26.7

58.1

69.3

25.7

21.6

5.0

4.1

21.4

20.9

4.3

3.5

Sanofi India*

Neutral

4,256

9,802

2,357

2,692

17.3

153.5

169.2

27.7

25.2

4.7

3.8

25.8

28.4

3.8

3.1

Sun Pharma

Buy

715

944

172,006

31,129

35,258

30.0

30.9

28.0

32.8

25.5

21.8

3.9

3.3

18.7

18.9

5.1

4.3

Power

NTPC

Neutral

156

128,712

86,605

95,545

17.5

20.8

11.8

13.4

13.2

11.6

1.3

10.5

11.1

2.8

Power Grid

Neutral

175

91,631

25,763

29,762

74.3

73.1

14.8

17.3

11.8

10.1

1.8

1.6

16.9

17.5

7.8

7.4

Tata Power

Neutral

20,839

36,916

39,557

17.4

27.1

5.1

6.3

15.1

12.2

1.3

1.2

9.0

10.3

1.6

1.4

Real Estate

MLIFE

Buy

421

522

1,728

1,152

1,300

22.7

24.6

29.9

35.8

14.1

11.8

1.0

7.6

8.6

2.2

1.9

Telecom

Bharti Airtel

Neutral

310

123,720

105,086

114,808

34.5

34.7

12.2

16.4

25.4

18.9

1.7

1.6

6.8

8.4

2.1

1.8

Idea Cellular

Neutral

26,754

40,133

43,731

37.2

37.1

6.4

6.5

11.6

11.4

1.0

0.9

8.2

7.6

1.7

1.4

Others

Abbott India

Neutral

4,798

10,196

3,153

3,583

14.1

14.4

152.2

182.7

31.5

26.3

154.8

132.2

25.6

26.1

2.9

2.5

Asian Granito

Buy

267

351

799

1,071

1,182

12.1

12.4

12.7

16.0

21.0

16.7

2.0

1.8

9.5

10.7

1.0

0.9

Bajaj Electricals

Buy

261

306

2,632

5,099

5,805

5.6

5.9

11.4

14.6

22.9

17.9

3.1

2.7

13.4

15.1

0.5

0.4

Banco Products (India)

Neutral

215

1,540

1,353

1,471

12.3

12.4

14.5

16.3

14.8

13.2

20.5

18.5

14.5

14.6

1.1

1.0

Coffee Day Enterprises

Neutral

222

4,567

2,964

3,260

20.5

21.2

4.7

8.0

27.7

2.6

2.3

5.5

8.5

1.9

1.7

Competent Automobiles Neutral

193

118

1,137

1,256

3.1

2.7

28.0

23.6

6.9

8.2

37.0

33.5

14.3

11.5

0.1

Elecon Engineering

Neutral

702

1,482

1,660

13.7

14.5

3.9

5.8

16.5

11.1

3.9

3.6

7.8

10.9

0.8

0.7

Finolex Cables

Neutral

440

6,732

2,883

3,115

12.0

12.1

14.2

18.6

31.0

23.7

16.5

14.4

15.8

14.6

2.0

1.8

Garware Wall Ropes

Neutral

549

1,201

873

938

12.9

13.1

30.9

34.9

17.8

15.7

2.8

2.4

15.7

15.2

1.3

1.2

Goodyear India*

Neutral

788

1,817

1,598

1,704

10.4

10.2

49.4

52.6

15.9

15.0

73.6

64.6

18.2

17.0

0.8

0.7

November 3, 2016

Stock Watch | November 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

Hitachi

Neutral

1,510

4,106

2,081

2,433

8.8

8.9

33.4

39.9

45.2

37.8

36.5

30.4

22.1

21.4

2.0

1.6

HSIL

Neutral

346

2,503

2,384

2,515

15.8

16.3

15.3

19.4

22.6

17.8

22.5

19.3

7.8

9.3

1.2

1.1

Interglobe Aviation

Neutral

940

33,870

21,122

26,005

14.5

27.6

110.7

132.1

8.5

7.1

50.8

36.3

168.5

201.1

1.6

1.2

Jyothy Laboratories

Neutral

354

6,432

1,440

2,052

11.5

13.0

8.5

10.0

41.7

35.4

10.1

9.3

18.6

19.3

4.7

3.3

Kirloskar Engines India

Neutral

345

4,996

2,554

2,800

9.9

10.0

10.5

12.1

32.9

28.5

13.8

13.0

10.7

11.7

1.6

1.4

Linc Pen & Plastics

Neutral

257

380

382

420

9.3

9.5

13.5

15.7

19.1

16.4

3.3

2.8

17.1

17.3

1.1

0.9

M M Forgings

Neutral

455

549

546

608

20.4

20.7

41.3

48.7

11.0

9.3

62.3

55.2

16.6

17.0

0.8

Manpasand Bever.

Neutral

709

4,057

836

1,087

19.6

19.4

16.9

23.8

42.0

29.8

5.0

4.4

12.0

14.8

4.6

3.4

Mirza International

Buy

113

1,095

1,024

1,148

18.0

6.9

8.0

13.2

11.4

2.2

1.9

16.6

16.2

1.3

1.1

MT Educare

Neutral

132

525

366

417

17.7

18.2

9.4

10.8

14.1

12.2

3.1

2.7

22.2

22.3

1.3

1.2

Narayana Hrudaya

Neutral

342

6,993

1,873

2,166

11.5

11.7

2.6

4.0

129.4

86.3

7.9

7.2

6.1

8.3

3.8

3.3

Navkar Corporation

Buy

203

265

2,893

408

612

42.9

42.3

6.8

11.5

30.0

17.6

2.1

1.9

6.9

10.5

8.0

5.3

Navneet Education

Neutral

109

2,591

1,062

1,147

24.0

6.1

6.6

17.9

16.4

3.7

3.2

20.5

19.8

2.5

2.3

Nilkamal

Neutral

1,704

2,543

1,995

2,165

10.7

10.4

69.8

80.6

24.4

21.1

97.4

84.6

16.6

16.5

1.3

1.1

Page Industries

Neutral

16,144

18,007

2,450

3,124

20.1

17.6

299.0

310.0

54.0

52.1

359.6

274.5

47.1

87.5

7.4

5.8

Parag Milk Foods

Neutral

312

2,606

1,919

2,231

9.3

9.6

9.4

12.9

33.0

24.1

5.1

4.2

15.5

17.5

1.5

1.3

Quick Heal

Neutral

247

1,731

408

495

27.3

27.0

7.7

8.8

31.9

28.1

3.0

9.3

10.6

3.4

2.8

Radico Khaitan

Neutral

139

1,853

1,659

1,802

13.0

13.2

6.3

7.4

22.0

18.9

1.9

1.8

8.6

9.3

1.6

1.4

Relaxo Footwears

Neutral

429

5,146

2,085

2,469

9.2

8.2

7.6

7.9

56.7

53.9

22.0

18.8

17.9

18.8

2.6

2.2

S H Kelkar & Co.

Neutral

311

4,498

1,036

1,160

15.1

15.0

6.1

7.2

50.9

43.3

5.4

5.0

10.7

11.5

4.2

3.7

Siyaram Silk Mills

Accumulate

1,554

1,714

1,457

1,799

2,040

11.6

11.7

104.9

122.4

14.8

12.7

2.4

2.1

16.4

1.0

0.9

Styrolution ABS India*

Neutral

636

1,119

1,440

1,537

9.2

9.0

40.6

42.6

15.7

14.9

40.0

36.4

12.3

11.6

0.7

0.6

Surya Roshni

Neutral

232

1,018

3,342

3,625

7.8

7.5

17.3

19.8

13.4

11.8

25.5

20.5

10.5

10.8

0.6

0.5

Team Lease Serv.

Neutral

994

1,699

3,229

4,001

1.5

1.8

22.8

32.8

43.7

30.3

4.7

4.1

10.7

13.4

0.4

0.3

The Byke Hospitality

Neutral

188

755

287

384

20.5

7.6

10.7

24.8

17.6

5.2

4.2

20.7

23.5

2.6

2.0

Transport Corporation

Neutral

183

1,399

2,671

2,911

8.5

8.8

13.9

15.7

13.2

11.7

1.8

1.6

13.7

13.8

0.6

TVS Srichakra

Neutral

3,792

2,903

2,304

2,614

13.7

13.8

231.1

266.6

16.4

14.2

426.1

335.5

33.9

29.3

1.3

1.1

UFO Moviez

Neutral

481

1,327

619

685

33.2

33.4

30.0

34.9

16.0

13.8

2.2

1.9

13.8

13.9

1.8

1.5

Visaka Industries

Neutral

219

349

1,051

1,138

10.3

10.4

21.0

23.1

10.4

9.5

28.1

26.3

9.0

9.2

0.6

VRL Logistics

Neutral

281

2,566

1,902

2,119

16.7

16.6

14.6

16.8

19.3

16.7

4.2

3.7

21.9

22.2

1.5

1.3

Wonderla Holidays

Neutral

375

2,121

287

355

38.0

40.0

11.3

14.2

33.2

26.4

4.8

4.2

21.4

23.9

7.1

5.7

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

^&October year end; ^June year end; Price as of November 2, 2016

November 3, 2016

Top Picks Report | November 2016

Research Team Tel: 022 - 39357800

E-mail: [email protected]

Website: www.angelbroking.com

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Ratings (Based on expected returns

Buy (> 15%)

Accumulate (5% to 15%)

Neutral (-5 to 5%)

over 12 months investment period):

Reduce (-5% to -15%)

Sell (< -15)