7stocks Emkay 101114

Stock Update
Areva T&D
Result Update
Retail Advisory Team
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Equity Advisory
October 22, 2014
Contents
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January 06, 2010 | 1
Emkay
India Equity Research | Others

October 21, 2014
Result Update
Just Dial
CMP
Focus on Search Plus Plaftorm
Target Price
Rs1,643.05
Rs1,725 ()
Rating
Upside
BUY ()
5.0 %
Change in Estimates
Result highlights
EPS Chg FY15E/FY16E (%)
Paid Campaigns at 2,91,600, growth of 24% YoY and 6.5% QoQ. Average monthly
realizations per campaign stood at Rs 1659, growing 5.5% YoY and 2.5% QoQ
EBITDA and PAT was 3% and 10% below estimate despite beat on Revenue was mainly
due to higher than estimated employee costs as allotted ESOPs are expensed
Company takes board approval to raise Rs 10bn capital through equities or related
instruments. The thought is to have a cash war chest in an fast evolving internet ecosystem and hence not be capital deprived to avail opportunities of growth & acquisitions
Search Plus launch is planned in Q4 FY15 with many new initiatives towards application
development which will make the service more effective, competition disruptive and
vendor inclusive. A marketing campaign to promote the same will be launches in Q4
-2/NA
Target Price change (%)
NA
Previous Reco
BUY
Emkay vs Consensus
EPS Estimates
FY15E
FY16E
Emkay
18.6
34.4
Consensus
21.1
30.8
Mean Consensus TP
Rs 1,644
Stock Details
Results below estimates: JDs 2 1 results have disappointed on profitability side due
to costs towards ESOPs of 0.7mn getting expensed. Revenue stood at Rs 1.47bn, growth of
31% YoY and 9% QoQ, 5% above our estimates. Reported EBITDA at Rs 426mn, growth of
21% YoY and 25% QoQ, 3% below our estimates. Adjusted EBITDA stood at Rs 458mn
leading to in-line margins of 31% margins. The reported margins would continue to remain
sub-30% as the ESOPs costs of Rs 1.0bnn is expensed over 24 quarters.
Paid campaigns growth continue: Paid campaigns showed YoY growth of 24% to 2,91,600.
The positive surprise is that along with growth in campaigns volume, the realizations per
campaigns also showed healthy growth of 5.5% YoY and 2.5% QoQ to Rs 1659. We built-in
total campaigns of 1.21mn in FY15E and 1.45 in FY16E with 3.2% increase and flat
realizations respectively. Search traffic has grown at a higher rate than the growth seen in
revenue
Bloomberg Code
JUST IN
Face Value (Rs)
10
Shares outstanding (mn)
70
52 Week H/L
1,895 / 930
M Cap (Rs bn/USD bn)
115 / 1.88
Daily Avg Volume (nos.)
1,73,948
Daily Avg Turnover (US$ mn)
4.7
Shareholding Pattern Jun '14

Promoters
33.0%
FIIs
63.5%
DIIs
0.4%
Capital raising plan: JD has got board approval to raise up to Rs 10bn through issuance of
equity shares or related instruments. The same, along with the cash balance of Rs 7.4bn, will
be utilized towards new strategic initiatives, M&A activity, etc. Management categorically
mentioned that they will not utilized the capital towards any initiative which will not yield growth
and profitability.
Public
2.7%
Maintain rating and TP: We believe JD is at a very critical phase as the Search Plus platform
evolves with a totally new platform of customer service and acquisition. We do not roll-over
the valuations to FY17 till we get more clarity on uncertainty on Search Plus launch,
performance and monetization plan. Maintain Buy rating with TP of Rs 1725 (50x FY15 EPS).
Financial Snapshot (Consolidated)
Price Performance
(%)
1M
3M
6M
12M
Absolute
(5)
34
69
Rel. to Nifty (3)
14
33
Relative price chart

1875
Rs
50
1700
36
1525
22
(Rs mn)
FY12
FY13
FY14
FY15E
FY16E
1350
Net Sales
2,594
3,628
4,613
5,919
7,752
1175
-6
EBITDA
673
1,024
1,422
1,620
3,208
EBITDA Margin (%)
25.7
28.2
30.8
27.4
41.4
APAT
523
715
1,206
1,306
2,415
EPS (Rs)
7.5
10.2
17.2
18.6
34.4
EPS (% chg)
81.1
36.8
68.7
8.3
84.9
ROE (%)
52.5
26.9
25.1
22.0
35.1
P/E (x)
220.5
161.2
95.6
88.2
47.7
EV/EBITDA (x)
168.7
107.6
77.5
67.1
33.5
P/BV (x)
108.7
27.1
21.6
17.7
15.9
1000
Oct-13
Dec-13
Feb-14
Apr-14
Just dial ltd (LHS)
Jun-14
Aug-14
-20
Oct-14
Rel to Nifty (RHS)
Source: Bloomberg
Source: Company, Emkay Research
Emkay Research is also available on www.emkayglobal.com, Bloomberg EMKAY<GO>, Reuters and DOWJONES.
Just Dial (JUST IN)
India Equity Research | Result Update
Key highlights of the results conference call
JD plans to launch a full-fledged advertisement campaign for Search Plus platform in Q4

FY15 once the mobile app for the same gets ready in Q3. The budgeted advertisement
cost for the campaign is Rs 250-400mn.
JD is developing many vendor & service centric applications which will ease the
transactions process in Search Plus platform as well as make the vendor rely on all its
business needs pertaining to its reach on internet medium as well as inventory
management
JD intends to disrupt the e-tailing model for many products and services. The company
gave some examples viz 1) As per company, 77% of the hotel room inventory in India is
not listed on any of the websites. Company intends to capture the same wherein a traveler
will get quotes and photos from the hotels once he / she lands in the locations vicinity. 2
Cab hailing application developed for a quickly avail the cab service through interaction.
The same application platform will be replicated to hail ambulance, towing van, plumber,
electrician, etc
JD is also planning to leverage its brand equity to authenticate not only the vendors who
sell on its e-market place platform but also genuinely of products which are listed. In short,
JD gets paid for uncertainty of the vendors pedigree. Company also plans to launch JD
cash service to authenticate and smoothen the payment service
International launch of JD is not a priority over next 3-4 quarters. There is a different team
altogether at JD which looks at these markets and does content development which will be
eventually launched through a platform developed for Indian markets
Exhibit 1: Quarterly summary

Rs mn
Revenue
Expenditure
as % of sales
Employee Cost
as % of sales
Other expenditure
as % of sales
EBITDA
Depreciation
Q2FY14
Q3FY14
Q4FY14
Q1FY15
Q2FY15
YoY (%)
1,127
1,199
1,242
1,350
1,474
30.8
QoQ (%) YTD FY14 YTD FY15

9.2
2,172
2,824
30.0
31.2
0.6
1,457
2,027
39.1
67.1
71.8
1,065
1,399
49.0
49.5
774
865
868
1,010
1,016
68.7%
72.2%
69.9%
74.8%
68.9%
577
596
625
673
726
51.2%
49.7%
50.4%
49.9%
49.3%
197
269
243
337
290
17.5%
22.5%
19.6%
25.0%
19.7%
352
333
374
340
458
29.9
34.6
25.8
7.8
47.3
-13.9
YoY (%)
31.5
393
627
18.1
22.2
59.7
715
798
11.6
38.5
44
43
44
57
63
42.1
10.5
87
120
308
291
330
283
395
28.2
39.5
628
678
7.9
87
111
129
97
85
-1.6
-12.3
160
182
14.0
PBT
394
402
459
380
480
21.7
26.3
788
860
9.1
Total Tax
108
104
118
99
133
221
232
Reported PAT
287
298
342
281
347
21.0
23.3
552
628
Reported EPS
4.1
4.2
4.9
4.0
4.9
7.9
8.9
EBIDTA
31.3
27.8
30.1
25.2
31.1
EBIT
27.3
24.3
26.6
21.0
PBT
35.0
33.5
37.0
28.1
PAT
25.4
24.8
27.5
Effective Tax rate
27.3
25.9
25.6
EBIT
Other Income
Margins (%)
Listings (Mn)
13.8
(bps)
(bps)
(21)
588
32.9
28.2
(bps)
(466)
26.8
(55)
583
28.9
24.0
(492)
32.6
(246)
442
36.3
30.4
(583)
20.8
23.5
(192)
270
25.4
22.2
(317)
26.0
27.7
41
173
28.0
27.0
(105)
10.1
10.8
11.8
14.1
14.5
10.1
14.5
43.6
238650
249600
262150
277950
296100
24.1
6.5
4,60,150
5,74,050
24.8
Avg. Realisation/Campaign/Month (Rs.)
1574
1601
1579
1619
1659
5.5
2.5
1574
1640
4.2
Employees
8213
8683
8543
9975
8899
Cash
5720
6080
6630
6930
7408
Paid Campaigns (Nos.)
Emkay Research | October 21, 2014
Just Dial (JUST IN)
Key Financials (Consolidated)

Income Statement
Y/E Mar (Rs mn)
FY12
FY13
FY14
FY15E
FY16E
Net Sales
2,594
3,628
4,613
5,919
7,752
Expenditure
1,948
2,604
3,191
4,299
4,544
673
1,024
1,422
1,620
3,208
90
144
173
241
311
EBIT
583
880
1,249
1,379
2,897
Other Income
150
135
400
422
504
EBITDA
Depreciation
Interest expenses
PBT
732
1,015
1,649
1,802
3,401
Tax
209
300
443
496
986
Extraordinary Items
Minority Int./Income from Assoc.
Reported Net Income
523
715
1,206
1,306
2,415
Adjusted PAT
523
715
1,206
1,306
2,415
FY12
FY13
FY15E
FY16E
Balance Sheet
Y/E Mar (Rs mn)
FY14
Equity share capital
519
695
702
702
702
Reserves & surplus
542
3,556
4,643
5,826
6,550
1,061
4,251
5,345
6,528
7,252
Loan Funds
12
Net deferred tax liability
(9)
18
20
26
1,063
4,269
5,363
6,548
7,278
348
608
528
643
719
Net worth
Minority Interest
Total Liabilities
Net block
Investment
1,568
4,858
6,257
6,547
6,547
Current Assets
540
593
865
2,073
3,436
Cash & bank balance
237
239
370
1,505
2,703
Other Current Assets
41
27
35
35
35
Current liabilities & Provision
1,405
1,806
2,287
2,715
3,425
Net current assets
(865)
(1,213)
(1,422)
(642)
11
1,063
4,269
5,363
6,548
7,278
Misc. exp
Total Assets
Cash Flow
Y/E Mar (Rs mn)
FY12
FY13
FY14
FY15E
FY16E
556
880
1,249
1,379
2,897
Chg in working cap
392
368
349
357
551
Operating Cashflow
829
1,092
1,328
1,481
2,773
(177)
(407)
(78)
(355)
(388)
652
685
1,251
1,126
2,385
(408)
(3,290)
(1,399)
(290)
PBT (Ex-Other income) (NI+Dep)

Other Non-Cash items
Capital expenditure
Free Cash Flow
Investments
Other Investing Cash Flow
Investing Cashflow
(409)
(3,562)
(1,077)
(223)
117
Equity Capital Raised
10
(392)
2,476
Loans Taken / (Repaid)
(4)
(8)
Dividend paid (incl tax)
(123)
(123)
(1,691)
Other Financing Cash Flow
(383)
2,472
(121)
(123)
(1,691)
36
130
1,136
1,198
Opening cash position
201
237
239
370
1,505
Closing cash position
237
239
370
1,505
2,703
Financing Cashflow
Net chg in cash
Just Dial (JUST IN)
Key Ratios
Profitability (%)
FY12
FY13
FY14
FY15E
FY16E
EBITDA Margin
25.7
28.2
30.8
27.4
41.4
EBIT Margin
22.2
24.2
27.1
23.3
37.4
Effective Tax Rate
28.6
29.5
26.8
27.5
29.0
Net Margin
19.9
19.7
26.1
22.1
31.1
ROCE
73.8
38.1
34.2
30.3
49.2
ROE
52.5
26.9
25.1
22.0
35.1
RoIC
(97.6)
(110.1)
(118.5)
(99.7)
(166.6)
Per Share Data (Rs)
FY12
7.5
FY13
10.2
FY14
17.2
FY15E
18.6
FY16E
34.4
CEPS
8.7
12.2
19.7
22.1
38.9
BVPS
15.1
60.6
76.2
93.1
103.4
0.0
0.0
1.5
1.5
20.6
PER
FY12
220.5
FY13
161.2
FY14
95.6
FY15E
88.2
FY16E
47.7
P/CEPS
188.1
134.2
83.6
74.5
42.3
P/BV
108.7
27.1
21.6
17.7
15.9
43.7
30.4
23.9
18.4
13.9
EPS
DPS
Valuations (x)
EV / Sales
EV / EBITDA
168.7
107.6
77.5
67.1
33.5
Dividend Yield (%)
0.0
0.0
0.1
0.1
1.3
Gearing Ratio (x)
FY12
FY13
FY14
FY15E
FY16E
Net Debt/ Equity
(1.7)
(1.2)
(1.0)
(1.0)
(1.1)
Net Debt/EBIDTA
(2.7)
(5.0)
(3.6)
(4.0)
(2.4)
(153.5)
(146.1)
(141.8)
(132.4)
(126.7)
Working Cap Cycle (days)
Growth (%)
FY12
FY13
FY14
FY15E
FY16E
Revenue
44.4
39.8
27.2
28.3
31.0
EBITDA
48.2
52.2
38.9
13.9
98.0
EBIT
50.9
51.0
42.0
10.4
110.0
PAT
81.1
36.8
68.7
8.3
84.9
Q4FY14
Q1FY15
Q4FY14
Q1FY15
Q2FY15
1,046
1127
1,242
1,350
1,474
EBITDA
363
352
374
340
458
EBITDA Margin (%)
34.7
31.3
30.1
25.2
31.1
PAT
280
287
342
281
347
EPS (Rs)
4.0
4.1
4.9
4.0
4.9
Jun-13
Sep-13
Dec-13
Mar-14
Jun-14
Promoters
33.1
33.1
33.0
33.0
33.0
FIIs
58.3
61.3
62.5
63.8
63.5
DIIs
2.1
2.0
1.1
0.2
0.4
Private Corp
2.1
0.5
0.7
0.4
0.4
Public
4.4
3.1
2.7
2.7
2.7
Quarterly (Rs mn)

Revenue
Shareholding Pattern (%)
Emkay
India Equity Research | Auto Ancillaries

October 21, 2014
Result Update
Exide Industries
CMP
Q2 below estimates; concerns remain
Target Price
Rs152
Rs155 ()
Rating
Upside
HOLD ()
2.0 %
Change in Estimates
Result highlights
Exides 2
1 operating performance was % below estimate despite an % beat on

Revenue. EBITDA margin for the quarter stood at 11.8% (-230 bps YoY, -340 bps QoQ)
vs our/consensus estimate of 14.0%/14.3%
The revenue beat was driven by strong 21%/12%/37% growth in 4w/2w/Industrial

segments however we think its still too early to take this as a change in growth tra ectory
The company infused Rs 1.5 bn into Exide Life Insurance during the quarter
NA
Previous Reco
HOLD
Emkay vs Consensus
EPS Estimates
FY15E
FY16E
Emkay
7.2
9.1
Consensus
7.1
The EBITDA miss was largely driven by higher other expenses (spends on technology
up gradation); raw material cost and employee expenses too were higher that estimates
0.1/0.2
8.5
Mean Consensus TP
Rs 171
While we marginally lower our margin estimates, higher revenue growth and lower tax
rate assumptions keep our earnings estimate intact. Retain HOLD with a TP of Rs 155
Management aims 16% EBITDA margins; structural concerns remain

Management targets 16%+ margins: In the results con-call, the management cited its target
EBITDA margin for the near-term at 16% subject to (a) revival in replacement and
infrastructure segment demand leading to a better mix and higher capacity utilization, and
more importantly (b) significant cost reduction initiatives including technology up gradation to
reduce lead weight in batteries. We are already building in a 15% EBITDA margin for
FY16/FY17 for the company (vs 13.8% in FY15).
Stock Details
Bloomberg Code
EXID IN
Face Value (Rs)
850
52 Week H/L
183 / 99
129 / 2.10
3,148,750
8.5
Structural concerns remain: Overall we continue to believe that a number of structural

issues will limit earnings growth and multiple re-rating for the stock: (a) Mix in the automotive
segment will deteriorate in favour of low margin OEM biz (on demand revival) and off the
higher margin replacement segment (likely see subdued growth on the backdrop of prolonged
slowdown) (b) Amara Raja is likely to gain market share in both the replacement and industrial
segment (c) Inverter segment (~20% of revenues) is a candidate for structural decline over
the coming years on the governments 24x7 power initiatives (d) continued investment into
Life Insurance biz is a drain on the free cash flow (and hence trading multiples) of the core
battery business.
Shareholding Pattern Sep '14
We expect underperformance to continue:

e expect the stocks recent under
performance to continue given low visibility on growth traction and margin trajectory. We
therefore will focus more on the next couple of quarters performance, to confirm any change
in business trajectory. Retain HOLD with a TP of Rs 155 based on 15x FY16E EPS and RS
19 for the insurance business.
Absolute
Financial Snapshot (Standalone) *

(Rs mn)
Net Sales
EBITDA
EBITDA Margin (%)
APAT
EPS (Rs)
46.0%
FIIs
17.4%
DIIs
17.8%
Public
9.7%
Price Performance
(%)
1M
3M
6M
12M
(12)
(4)
18
15
Rel. to Nifty (5)
(7)
(9)

200
Rs
10
178
156
-6
FY13
FY14
FY15E
FY16E
FY17E
134
-14
60,714
59,642
70,375
81,060
94,742
112
-22
7,840
8,168
9,716
12,150
14,254
12.9
13.7
13.8
15.0
15.0
5,228
4,871
6,108
7,704
9,227
6.2
5.7
7.2
9.1
10.9
EPS (% chg)
13.4
(6.8)
25.4
26.1
19.8
ROE (%)
16.1
13.6
15.5
17.6
18.6
P/E (x)
21.7
23.3
18.6
14.7
12.3
EV/EBITDA (x)
13.8
13.3
11.1
8.9
7.6
3.3
3.0
2.7
2.4
2.2
P/BV (x)
Promoters
90
Oct-13
Dec-13
Feb-14
Apr-14
Exide Industries (LHS)
Jun-14
Aug-14
-30
Oct-14
Rel to Nifty (RHS)
Source: Bloomberg
Source: Company, Emkay Research |*Valuations adjusted for value of Exide Life Insurance
Exide Industries (EXID IN)

Exhibit 1: Actual vs Estimate
Rs mn
Actual
Emkay Est
Var %
Consensus
Var %
Net sales
17,633
16,333
8.0
16,965
3.9
EBITDA
2,077
2,287
(9.2)
2,422
(14.2)
11.8
14.0
-222 bps
14.3
-250 bps
1,258
1,424
(11.7)
1,489
(15.5)
1.48
1.68
(11.7)
1.75
(15.5)
EBITDA Margin (%)

Adj net income
FDEPS (Rs)
Exhibit 2: Quarterly Financial performance

Rs mn
Q2FY14
Q3FY14
Q4FY14
Q1FY15
Q2FY15
YoY (%)
Revenue
14,321
13,040
16,130
19,124
17,633
23.1
(7.8)
36,757
30,595
20.1
Expenditure
12,307
11,613
13,941
16,212
15,556
26.4
(4.0)
31,769
25,957
22.4
85.9
89.1
86.4
84.8
88.2
86.4
84.8
9,374
8,486
10,779
12,670
11,832
19,838
as % of sales
Consumption of RM
26.2
(6.6)
24,502
66.7
64.8
26.7
8.3
2,083
1,793
5.7
5.9
5,183
4,327
14.1
14.1
YoY(%)
23.5
as % of sales
65.5
65.1
66.8
66.3
67.1
Employee Cost
855
897
870
1,000
1,083
as % of sales
6.0
6.9
5.4
5.2
6.1
Other expenditure
2,079
2,231
2,292
2,542
2,641
as % of sales
14.5
17.1
14.2
13.3
15.0
2,014
1,426
2,189
2,911
2,077
3.2
(28.7)
4,988
4,638
7.6
313
317
326
323
329
5.0
1.8
652
614
6.3
1,700
1,110
1,863
2,588
1,748
2.8
(32.5)
4,336
4,024
7.7
37
49
98
87
69
86.9
(21.5)
156
99
57.9
EBITDA
Depreciation
EBIT
Other Income
Interest
PBT
Total Tax
Adjusted PAT after MI
Extra ordinary items Loss/(Gain)
27.0
3.9
16.2
19.8
(12.8)
70.8
(23.5)
1,732
1,155
1,961
2,673
1,813
4.6
(32.2)
4,486
4,115
9.0
546
380
640
820
555
1.6
(32.3)
1,375
1,341
2.6
1,186
775
1,321
1,853
1,258
6.0
(32.1)
3,111
2,774
12.1
Reported PAT
1,186
775
1,321
1,853
1,258
6.0
(32.1)
3,111
2,774
12.1
Adjusted EPS
1.4
0.9
1.6
2.2
1.5
6.0
(32.1)
3.7
3.3
12.1
(bps)
(bps)
Margins (%)
(bps)
EBIDTA
14.1
10.9
13.6
15.2
11.8
(228)
(344)
13.6
15
(159)
EBIT
11.9
8.5
11.6
13.5
9.9
(196)
(362)
11.8
13.2
(136)
EBT
12.1
8.9
12.2
14.0
10.3
(182)
(370)
12.2
13.4
(125)
PAT
Effective Tax rate
8.3
5.9
8.2
9.7
7.1
(115)
(256)
8.5
9.1
(60)
31.5
32.9
32.6
30.7
30.6
(90)
(6)
30.7
32.6
(192)
Exhibit 3: Change in Estimates

FY15E
Rs mn
Earlier
Revised
Net Sales
67,369
9,795
EBITDA
Margin (%)
APAT
EPS
FY16E
% Change
% YoY
Earlier
Revised
% Change
% YoY
70,375
4.5
18.0
77,605
81,060
4.5
15.2
9,716
(0.8)
18.9
12,040
12,150
0.9
25.1
14.5
13.8
-73 bps
11 bps
15.5
15.0
-53 bps
118 bps
6,103
6,108
0.1
25.4
7,686
7,704
0.2
26.1
7.2
7.2
0.1
25.4
9.0
9.1
0.2
26.1
Key Financials (Standalone)

Income Statement
Y/E Mar (Rs mn)
FY13
FY14
FY15E
FY16E
FY17E
Net Sales
60,714
59,642
70,375
81,060
94,742
Expenditure
52,873
51,474
60,660
68,910
80,488
EBITDA
7,840
8,168
9,716
12,150
14,254
Depreciation
1,135
1,256
1,336
1,503
1,625
EBIT
6,706
6,912
8,380
10,647
12,628
759
330
487
697
1,057
Other Income
Interest expenses
42
12
15
15
15
PBT
7,423
7,231
8,851
11,329
13,670
Tax
2,195
2,360
2,744
3,625
4,443
Extraordinary Items
Reported Net Income
5,228
4,871
6,108
7,704
9,227
Adjusted PAT
5,228
4,871
6,108
7,704
9,227
FY15E
FY16E
FY17E
Balance Sheet
Y/E Mar (Rs mn)
FY13
FY14
850
850
850
850
850
Reserves & surplus
33,386
36,465
40,412
45,564
51,846
Net worth
34,236
37,315
41,262
46,414
52,696
Minority Interest
Loan Funds
977
1,051
1,051
1,051
1,051
35,212
38,365
42,313
47,464
53,746
9,944
9,980
12,145
12,641
13,016
Investment
16,401
19,670
22,170
26,170
31,170
Current Assets
18,550
19,406
21,294
23,787
27,040
Cash & bank balance
748
1,200
171
190
17,802
18,206
21,123
23,597
27,034
10,271
11,202
13,805
15,644
17,989
8,279
8,204
7,489
8,143
9,051
35,212
38,364
42,313
47,464
53,747
Y/E Mar (Rs mn)
FY13
FY14
FY15E
FY16E
FY17E
Net Income (Ex-others) + Dep
5,604
5,797
6,957
8,510
9,796
48
12
15
15
15
(2,037)
601
(314)
(635)
(1,092)
3,615
6,409
6,658
7,889
8,719
(2,000)

Total Liabilities
Net block
Net current assets

Misc. exp
Total Assets
Cash Flow
Others
Chg in working cap
Operating Cashflow
Capital expenditure
(1,558)
(1,064)
(3,500)
(2,000)
Free Cash Flow
2,057
5,345
3,158
5,889
6,719
Investments
(855)
(3,269)
(2,500)
(4,000)
(5,000)

Investing Cashflow
Financing Cashflow
759
330
487
697
1,057
(1,654)
(4,003)
(5,513)
(5,303)
(5,943)
(1,555)
(1,782)
(2,160)
(2,553)
(2,945)
(1,597)
(1,794)
(2,175)
(2,568)
(2,960)
Net chg in cash
364
612
(1,030)
19
(184)
577
748
1,200
171
190
941
1,360
169
190
Key Ratios
Profitability (%)
FY13
FY14
FY15E
FY16E
FY17E
EBITDA Margin
12.9
13.7
13.8
15.0
15.0
EBIT Margin
11.0
11.6
11.9
13.1
13.3
Effective Tax Rate
29.6
32.6
31.0
32.0
32.5
8.6
8.2
8.7
9.5
9.7
ROCE
22.4
19.7
22.0
25.3
27.0
ROE
16.1
13.6
15.5
17.6
18.6
RoIC
41.3
40.1
46.0
53.2
59.2
FY13
6.2
FY14
5.7
FY15E
7.2
FY16E
9.1
FY17E
10.9
CEPS
7.5
7.2
8.8
10.8
12.8
BVPS
23.4
25.4
28.3
34.4
41.8
1.6
1.8
2.2
2.6
3.0
Net Margin
Per Share Data (Rs)

EPS
DPS
Valuations* (x)
FY13
FY14
FY15E
FY16E
FY17E
PER
21.7
23.3
18.6
14.7
12.3
P/BV
3.3
3.0
2.7
2.4
2.2
EV / Sales
1.8
1.8
1.5
1.3
1.1
13.8
13.3
11.1
8.9
7.6
1.0
1.2
1.4
1.7
1.9
FY13
FY14
FY15E
FY16E
FY17E
Net Debt/ Equity
(0.1)
(0.1)
(0.1)
(0.2)
(0.3)
Net Debt/EBIDTA
(0.4)
(0.6)
(0.5)
(0.8)
(1.0)
45.3
42.9
38.0
35.8
34.8
FY13
FY14
FY15E
FY16E
FY17E
Revenue
18.9
(1.8)
18.0
15.2
16.9
EBITDA
14.6
4.2
18.9
25.1
17.3
EBIT
15.0
3.1
21.2
27.0
18.6
PAT
13.4
(6.8)
25.4
26.1
19.8
EV / EBITDA
Dividend Yield (%)
*Adjusted to exclude value of Life Insurance Biz
Gearing Ratio (x)
Growth (%)
Quarterly (Rs mn)
Q2FY14
Q3FY14
Q4FY14
Q1FY15
Q2FY15
Revenue
14,321
13,040
16,130
19,124
17,633
EBITDA
2,014
1,426
2,189
2,911
2,077
14.1
10.9
13.6
15.2
11.8
1,186
775
1,321
1,853
1,258
1.4
0.9
1.6
2.2
1.5
EBITDA Margin (%)

PAT
EPS (Rs)
Sep-13
Dec-13
Mar-14
Jun-14
Sep-14
Promoters
46.0
46.0
46.0
46.0
46.0
FIIs
17.8
17.6
17.6
15.3
17.4
DIIs
15.8
16.1
17.2
19.6
17.8
Private Corp
10.7
10.0
8.5
9.0
9.1
9.8
10.3
10.7
10.1
9.7
Public
Emkay
India Equity Research | Metals & Mining

October 21, 2014
Result Update
JSW Steel
CMP
Strong performance
Target Price
Rs1,176
Rs1,642 ()
Rating
Upside
BUY (-)
39.6 %
Change in Estimates
Result highlights
EBITDA/ tonne adjusting for the provisions made in US Plate and Pipe mill (Rs 1.68 bn)
and coal block de-allocation (Rs 210 mn) stood at Rs 8,534/ tonne, flat QoQ and up 20%
YoY. This was higher than our estimates of Rs 8,300/ tonne
Standalone APAT stood at Rs 9.5 bn, up 18% QoQ and marginally higher YoY.
28.9 bn respectively; Value added products helped in mitigating 1% QoQ fall in steel
realizations (at Rs 40,100/ tonne)
Internal improvement to continue; Maintain BUY with a target price of Rs 1,642
NA
Previous Reco
BUY
Emkay vs Consensus
EPS Estimates
Consolidated APAT also rose 43% QoQ and 28% YoY to Rs 9.4 bn. Depreciation
remained higher due to change in implementation of Companies Act 2013
Adjusted EBITDA for standalone and consolidated entities stood at Rs 26.2 bn and Rs
1.8/NA
FY15E
FY16E
Emkay
124.4
177.0
Consensus
108.1
126.0
Mean Consensus TP
Rs 1,308
Stock Details
Consistency maintained in strong EBITDA performance

JSW Steel has maintained its consistency as far as its EBITDA per tonne performance is
concerned. Adjusting for the provision of Rs 1.68 bn made in JSW Steel USA Inc (the plate
and pipe mill unit) and Rs 210 mn provision arising out of the de- allocated coal block, the
adjusted EBITDA/ tonne came at Rs 8,534, flat QoQ and 20% higher YoY. The company has
been consistently reporting strong EBITDA/ tonne since last six quarters. Believe, further
improvement in this regard is possible with ramp up in pellet plant and coke oven in Dolvi and
possible fall in domestic iron ore prices.
Bloomberg Code
JSTL IN
Face Value (Rs)
10
242
52 Week H/L
1,367 / 804
284 / 4.63
8,23,087
15.1
Focus on value added products continue
Promoters
39.3%
The company remains focused on increasing its value added product portfolio. In this quarter
the proportion of value added product in the total sales volume has gone up to 33%, which
the company had targeted to reach at the end of the year. Auto sector sales grew 52% Yoy
and 13% QoQ, while coated products also saw a growth of 25% YoY and 9% QoQ.
FIIs
39.8%
DIIs
3.2%
Clears doubt on acquisition policy
Price Performance
Clearing the recent doubt the management has re- iterated the company would be looking
forward for assets abroad only for backward and forward integration purpose. Thus, Ilva
doesnt seem to be a good fit for the company.
(%)
1M
3M
6M
12M
Absolute
(8)
(2)
40
(5)
(8)
10
Maintain Buy

(Rs mn)
EBITDA
FY12
FY13
FY14
FY15E
Rel. to Nifty
3,87,128
5,04,089
5,44,752
5,95,600
60,333
65,039
91,655
1,10,330
1,30,730
17.6
17.0
17.9
20.0
21.7
13,556
EPS (Rs)
EPS (% chg)
ROE (%)
P/E (x)
1350
Rs
30
1240
22
1130
14
1020
910
-2
FY16E
3,45,732
EBITDA Margin (%)

APAT
11.5%
At the CMP of Rs 1,176, the stock is available at 4.7xFY16 EV/ EBITDA. W ith str ong growth
potential driven by its internal improvement we maintain BUY with target price of Rs 1,642.
Net Sales
Public
13,325
21,647
30,074
42,785
60.8
59.7
89.6
124.4
177.0
(16.7)
(1.7)
50.0
38.9
42.3
8.3
7.9
11.3
13.4
16.6
19.4
19.7
13.1
9.5
6.6
EV/EBITDA (x)
7.0
7.0
6.5
5.8
4.7
P/BV (x)
1.6
1.5
1.3
1.2
1.0
800
Oct-13
Dec-13
Feb-14
JSW Steel (LHS)
Apr-14
Jun-14
Aug-14
-10
Oct-14
Rel to Nifty (RHS)
Source: Bloomberg
JSW Steel (JSTL IN)
Exhibit 1: Quarterly Production (Consol)

Rs mn
Revenue
Expenditure
Q2FY14
Q3FY14
Q4FY14
Q1FY15
Q2FY15
YoY (%)
QoQ (%)
1HFY15
1HFY14
YoY (%)
1,29,838
1,36,228
1,43,424
1,32,541
1,38,948
7.0
4.8
2,71,489
2,32,544
16.7
(1,06,358) (1,12,134) (1,18,138) (1,06,424) (1,09,141)
2.6
2.6 (2,15,565) (1,90,270)
13.3
as % of sales
Consumption of RM
81.9
82.3
82.4
80.3
78.5
(78,212)
(80,965)
(85,538)
(74,463)
(76,487)
60.2
59.4
59.6
56.2
55.0
(3,143)
(3,228)
(3,266)
(3,746)
(3,868)
2.4
2.4
2.3
2.8
2.8
(25,003)
(27,941)
(29,334)
(28,216)
(28,785)
19.3
20.5
20.5
21.3
20.7
as % of sales
Employee Cost
as % of sales
Other expenditure
as % of sales
158.8
(2.2)
163.6
2.7 (1,50,950) (1,36,733)
23.1
3.3
15.1
2.0
111.2
117.2
(7,614)
(6,489)
5.6
5.7
(57,001)
(47,048)
42.0
40.7
10.4
17.3
21.2
EBITDA
23,480
24,094
25,286
26,116
29,807
26.9
14.1
55,924
42,274
32.3
Depreciation
(8,025)
(8,058)
(8,239)
(7,954)
(8,509)
6.0
7.0
(16,463)
(15,529)
6.0
EBIT
15,455
16,036
17,047
18,163
21,298
37.8
17.3
39,461
26,746
47.5
511
144
11
537
265
(48.2)
(50.7)
802
703
14.1
(7,564)
(7,893)
(7,842)
(8,435)
(8,550)
13.0
1.4
(16,985)
(14,743)
15.2
Other Income
Interest
PBT
Total Tax
Adjusted PAT
(Profit)/loss from JV's/Ass/MI
Adj.PAT after MI
8,402
8,287
9,216
10,264
13,013
54.9
26.8
23,277
12,705
83.2
(1,190)
(3,737)
(4,595)
(3,828)
(3,737)
213.9
(2.4)
(7,564)
(869)
770.6
7,211
4,550
4,621
6,437
9,276
28.6
44.1
15,713
11,836
32.8
143
115
207
128
107
(25.7)
(16.8)
235
318
31.2
7,355
4,665
4,828
6,565
9,383
27.6
42.9
15,948
12,154
Extra ordinary items
(8,510)
(1,895)
NA
NA
(1,895)
(17,128)
Reported PAT
(1,155)
4,665
4,828
6,565
7,488
(748.0)
14.1
14,053
(4,974)
(382.5)
Reported EPS
(5.1)
19.0
19.6
26.3
30.6
(698.2)
16.5
57
(21)
(367.9)
(bps)
(bps)
Margins (%)
(bps)
EBIDTA
18.1
17.7
17.6
19.7
21.5
18.6
8.9
20.6
18.2
242
EBIT
11.9
11.8
11.9
13.7
15.3
28.8
11.9
14.5
11.5
303
EBT
6.5
6.1
6.4
7.7
9.4
44.7
20.9
8.6
5.5
311
PAT
5.6
3.3
3.2
4.9
6.7
20.2
37.5
5.8
5.1
70
14.2
45.1
49.9
37.3
28.7
102.7
(23.0)
32.5
6.8
2,566
Effective Tax rate

Exhibit 2: US Plate and Pipe Mill operational performance

Q2FY15
Q1FY15
Q2FY14
YoY
QoQ
Plate Mill
1,02,748
1,02,694
92,328
11%
0%
Pipe Mill
8,521
8,129
11,752
-27%
5%
Plate Mill
86,084
95,506
80,031
8%
-10%
Pipe Mill
16,641
9,230
8,466
97%
80%
94.45
99.17
75.76
25%
-5%
Production (NT)
Sales (NT)
Financials ( US$ mn)

Turnover
EBITDA+ Other income
Profit After Tax
2.54
4.02
(2.05)
-224%
NA
(12.71)
(10.39)
(16.98)
NA
NA
JSW Steel (JSTL IN)
Exhibit 3: Quarterly performance (Standalone)

(Rs mn)
Q2FY14
Q3FY14
Q4FY14
Q1FY15
Q2FY15
YoY (%)
QoQ (%)
1HFY15
1HFY14
YoY (%)
Revenue
1,14,857
1,19,645
1,24,894
1,15,463
1,20,535
4.9
4.4
2,35,998
2,08,438
13.2
Expenditure
(92,517)
(96,613)
(99,931)
(90,853)
(94,336)
2.0
3.8 (1,85,189) (1,68,607)
9.8
80.6
80.7
80.0
78.7
78.3
(69,604)
(70,936)
(73,994)
(64,907)
(66,509)
60.6
59.3
59.2
56.2
55.2
(1,951)
(1,981)
(1,971)
(2,361)
(2,370)
1.7
1.7
1.6
2.0
2.0
(20,962)
(23,697)
(23,966)
(23,586)
(25,457)
18.3
19.8
19.2
20.4
21.1
as % of sales
Consumption of RM
as % of sales
Employee Cost
as % of sales
Other expenditure
as % of sales
157.0
(4.4)
161.9
2.5 (1,31,416) (1,24,532)
21.5
0.4
21.4
7.9
111.4
119.3
(4,730)
(4,044)
4.0
3.9
(49,044)
(40,032)
41.5
38.6
5.5
17.0
22.5
EBITDA
22,340
23,032
24,963
24,610
26,199
17.3
6.5
50,809
39,831
27.6
Depreciation
(6,852)
(6,904)
(7,064)
(6,634)
(6,992)
2.0
5.4
(13,626)
(13,291)
2.5
EBIT
15,488
16,128
17,899
17,976
19,207
24.0
6.8
37,183
26,540
40.1
1,208
607
773
980
1,192
(1.4)
21.6
2,172
1,931
12.5
(6,890)
(7,192)
(6,902)
(7,230)
(7,196)
4.5
(0.5)
(14,426)
(13,308)
8.4
Other Income
Interest
PBT
9,806
9,543
11,771
11,726
13,203
34.6
12.6
24,929
15,163
64.4
Total Tax
(400)
(3,021)
(3,752)
(3,713)
(3,691)
822.6
(0.6)
(7,403)
565
(1,410.3)
Adjusted PAT
9,406
6,521
8,019
8,014
9,512
1.1
18.7
17,526
15,728
11.4
Adj.PAT after MI
9,406
6,521
8,019
8,014
9,512
1.1
18.7
17,526
15,728
Adj. PAT with 30% tax rate
18,812
13,043
18,812
(100.0)
(8,394)
(1,895)
NA
NA
(1,895)
(16,923)
Reported PAT
1,012
6,521
8,019
8,014
7,617
652.4
(5.0)
15,631
(1,195)
(1,407.7)
Reported EPS
3.9
26.6
32.8
32.8
31.5
718.5
(4.0)
64.3
(5.6)
(1,244.5)
(bps)
(bps)
Margins (%)
(bps)
EBIDTA
19.4
19.3
20.0
21.3
21.7
12
21.5
19.1
242
EBIT
13.5
13.5
14.3
15.6
15.9
18
15.8
12.7
302
EBT
8.5
8.0
9.4
10.2
11.0
28
10.6
7.3
329
PAT
8.2
5.5
6.4
6.9
7.9
(4)
14
7.4
7.5
(12)
Effective Tax rate
4.1
31.7
31.9
31.7
28.0
585
(12)
29.7
(3.7)
3,342
Exhibit 4: Chile Operational Performance

Q2FY15
Q1FY15
Q2FY14
YoY
Production (tonne)
2,24,387
2,20,736
2,15,224
4%
QoQ
2%
Sales (tonne)
2,21,025
3,25,522
2,19,500
1%
-32%
Financials (USD mn)

Revenue
18.24
32.08
26.43
-31%
-43%
EBITDA
(1.76)
(0.35)
5.34
NA
NA
PAT
(2.70)
(1.59)
2.88
NA
NA
Realization/ tonne (US$)
82.5
98.5
120.4
-31%
-16%
EBITDA/ tonne (US$)
-8.0
-1.1
24.3
NA
NA
Exhibit 5: JSW Steel Coated Products operational performance

Q2FY15
Q1FY15
Q2FY14
YoY
QoQ
Production volume (mt)
0.41
0.40
0.35
17%
2%
Sales Volume (mt)
0.41
0.40
0.39
5%
2%
Financial (INR mn)

Net Sales
25,371
25,050
22,342
14%
1%
EBITDA
1080
950
782
38%
14%
EBITDA Margin (%)
4.3%
3.8%
3.5%
22%
12%
56%
PAT
Realization (Rs/tonne)
EBITDA/tonne (Rs)
109
70
2625%
61,880
62,625
57,287
8%
-1%
2,634
2,375
2,005
31%
11%
JSW Steel (JSTL IN)
Key Conference call highlights

Project Update
The new 4 mtpa coke oven battery and 1 mtpa pellet plant at Dolvi are being ramped up
as per schedule. Higher cost benefits of the same will be witnessed in Q3FY15 onwards
Expansion of the Dolvi unit upto mtpa is expected to be completed by Sept1 however
as currently the project is ahead of schedule the commissioning may happen sooner than
anticipated
In regards to the recently acquired Welspun Maxsteel; the management indicated of first
ramping up the production from the current levels (of 35k to 40k)
Management stated to have made a binding bid only for Luchinis rolling plant which is in
line with the companys ob ective of backward / forward integration
Operational Update
Management indicated to have achieved its desired sales mix with value added products
being 33% of the total sales. This has been owing to the increased exposure to the auto
sector, 2wheeler and PV segment in particular. Export volumes have been on a downtrend
for the company amid weak demand
JSW has witnessed inventory accumulation over the past 2 quarters which it intends to
liquidate in H2FY15
Increase in the power and fuel costs during Q2FY15 were on account of 65days shutdown
of the companys CPP at i aynagar and lower availability of natural gas at its Dolvi unit
Capacity utilization of the coke oven battery and pellet plant at Dolvi is at 74% and 65%
respectively
Capacity utilization at the US plate mill is 40% and pipe mill at 9%
Guidance
Management maintained its earlier production guidance of 12.9 mt for FY15, however
stated that sales would be marginally lower than the earlier guidance of 12.4 mt
Iron ore imports for Q3FY15 are expected to be ~2.8 2.9 mt. Expect Karnataka mining
capacity to reach ~25 mn tonnes by end FY15 against current 18 mn tonnes
Maintained capex guidance of Rs75bn for FY15 and Rs45bn for FY16
JSW Steel (JSTL IN)

Income Statement
Y/E Mar (Rs mn)
FY12
FY13
FY14
FY15E
FY16E
Net Sales
3,45,732
3,87,128
5,04,089
5,44,752
5,95,600
Expenditure
2,83,347
3,17,057
4,20,542
4,42,319
4,72,871
EBITDA
60,333
65,039
91,655
1,10,330
1,30,730
Depreciation
19,201
22,375
31,826
32,465
33,506
EBIT
41,133
42,664
59,828
77,865
97,224
784
697
858
2,207
3,018
Interest expenses
13,804
19,675
30,479
35,120
37,070
PBT
28,113
23,687
30,208
44,952
63,172
Tax
5,002
8,453
9,201
15,342
20,847
Extraordinary Items
8,179
(3,694)
(17,128)
Other Income
57
(343)
(504)
(399)
(360)
Reported Net Income
21,735
9,631
4,519
30,074
42,785
Adjusted PAT
23,111
15,235
21,007
29,610
42,325
FY15E
FY16E
Balance Sheet
Y/E Mar (Rs mn)
FY12
FY13
FY14
2,842
2,842
3,028
3,028
3,028
Reserves & surplus
1,61,864
1,67,806
2,08,712
2,35,169
2,74,338
Net worth
1,64,705
1,70,647
2,11,739
2,38,197
2,77,366
2,177
1,972
1,670
1,670
1,670
1,93,196
2,06,136
3,16,091
3,71,091
3,79,091
27,250
32,720
21,234
21,234
21,233
Total Liabilities
3,87,328
4,11,475
5,50,734
6,32,192
6,79,360
Net block
3,38,419
3,47,602
4,71,167
4,80,702
4,77,247
Minority Interest
Loan Funds
Investment
Current Assets
Cash & bank balance
Net current assets
20,896
17,500
6,627
14,627
24,627
1,51,799
1,51,482
2,05,315
2,32,910
2,76,462
30,470
16,534
6,630
11,693
43,861
144
160
175
175
175
1,51,805
1,63,653
2,25,665
2,22,338
2,35,266
(6)
(12,171)
(20,351)
10,572
41,196
3,87,328
4,11,475
5,50,734
6,32,192
6,79,360
FY12
FY13
FY14
FY15E
FY16E
19,934
19,993
13,081
44,952
63,172
798
694
(2,635)
465
460
(10,622)
5,888
(35,201)
(26,359)
1,044
44,018
48,307
13,804
71,301
1,14,405
(40,050)
Misc. exp
Total Assets
Cash Flow
Y/E Mar (Rs mn)
Chg in working cap
Operating Cashflow
Capital expenditure
(40,668)
(56,180)
(57,443)
(75,000)
Free Cash Flow
3,350
(7,873)
(43,639)
(3,699)
74,355
Investments
(974)
1,312
168
(8,000)
(10,000)

Investing Cashflow
(54,334)
(56,713)
(83,000)
(50,050)
21,909
9,546
60,290
55,500
8,500
(3,501)
(2,269)
(3,155)
(3,617)
(3,617)
0
(41,006)
Financing Cashflow
6,978
(7,909)
33,005
16,763
(32,187)
Net chg in cash
9,990
(13,936)
(9,904)
5,064
32,168
20,480
30,470
16,534
6,630
11,693
30,470
16,534
6,630
11,693
43,861
JSW Steel (JSTL IN)
Key Ratios
Profitability (%)
FY12
FY13
FY14
FY15E
FY16E
EBITDA Margin
17.6
17.0
17.9
20.0
21.7
EBIT Margin
12.0
11.2
11.7
14.1
16.1
Effective Tax Rate
17.8
35.7
30.5
34.1
33.0
6.7
4.0
4.1
5.4
7.0
11.5
10.9
12.6
13.5
15.3
Net Margin
ROCE
ROE
8.3
7.9
11.3
13.4
16.6
RoIC
15.3
13.6
15.7
16.9
20.4
EPS
FY12
97.4
FY13
43.2
FY14
18.7
FY15E
124.4
FY16E
177.0
CEPS
146.8
160.0
221.2
258.7
315.6
BVPS
738.2
764.8
876.0
985.5
1,147.6
7.5
10.0
10.0
10.0
10.0
FY12
19.4
FY13
19.7
FY14
13.1
FY15E
9.5
FY16E
6.6
P/CEPS
8.0
7.4
5.3
4.5
3.7
P/BV
1.6
1.5
1.3
1.2
1.0
EV / Sales
1.2
1.2
1.2
1.2
1.0
EV / EBITDA
7.0
7.0
6.5
5.8
4.7
Dividend Yield (%)
0.6
0.9
0.9
0.9
0.9
Gearing Ratio (x)
Per Share Data (Rs)
DPS
Valuations (x)
PER
FY12
FY13
FY14
FY15E
FY16E
Net Debt/ Equity
1.0
1.1
1.5
1.5
1.2
Net Debt/EBIDTA
2.7
2.9
3.4
3.3
2.6
(32.4)
(27.4)
(19.2)
(0.7)
(1.6)
Growth (%)
FY16E
FY12
FY13
FY14
FY15E
Revenue
44.7
12.0
30.2
8.1
9.3
EBITDA
26.2
7.8
40.9
20.4
18.5
EBIT
27.7
3.7
40.2
30.1
24.9
PAT
23.9
(55.7)
(53.1)
565.4
42.3
Quarterly (Rs mn)
Q2FY14
Q3FY14
Q4FY14
Q1FY15
Q2FY15
Revenue
1,29,838
1,36,228
1,43,424
1,32,541
1,38,948
23,480
24,094
25,286
26,116
27,912
EBITDA
EBITDA Margin (%)
18.1
17.7
17.6
19.7
20.1
(1,155)
4,665
4,828
6,565
7,488
(4.8)
19.3
20.0
27.2
31.0
Sep-13
Dec-13
Mar-14
Jun-14
Sep-14
Promoters
36.3
37.3
38.5
38.5
39.3
FIIs
37.0
38.4
38.9
40.7
39.8
DIIs
5.8
4.4
3.6
2.7
3.2
Private Corp
7.3
7.1
6.3
6.3
6.2
13.6
12.8
12.7
11.7
11.5
PAT
EPS (Rs)
Public
Emkay
India Equity Research | Agri Input & Chemicals

October 21, 2014
Result Update
UPL
CMP
Revenue growth in tact
Target Price
Rs327
Rs400 ()
Rating
Upside
BUY (-)
22.3 %
Change in Estimates
Result highlights
NA
Consolidated revenues at Rs 26.6bn were up 14.2%yoy driven by 15% volume growth,
NA
2% price led growth, while exchange impact stood at negative 2%
Previous Reco
BUY
Consolidated EBITDA at Rs 4.8bn was up 12.8%yoy with EBITDA margins at 18%

Emkay vs Consensus
marginally lower than our estimates of 18.8% due to increase spending brand building
EPS Estimates
APAT at Rs 2.3bn was up 19%yoy, marginally lower than our estimates of Rs 2.5bn.
FY15E
FY16E
Emkay
27.7
31.1
Consensus
28.0
Exchange impact and one off restructuring cost at Rs 665mn impacted reported profits
Management continued to maintain FY15 revenue growth and EBITDA margin guidance.
We continue to maintain our Buy rating on the stock with a target price of Rs 400
32.5
Mean Consensus TP
Rs 389
Volume growth drives revenues
Stock Details
Consolidated revenues at Rs 26.6bn were up 14.2%yoy despite exchange related impact of

2%, on the back of 15% volume growth and 2% price led growth. Revenue growth driven by
27%yoy growth for Europe and 20%yoy growth for LATAM and 29.5%yoy growth for RoW.
Growth for the domestic market was sub-dued at 7.5%yoy and 11.6%yoy de-growth for the
North American operations.
Bloomberg Code
UPLL IN
Face Value (Rs)
140 / 2.28
EBITDA margins impacted due to higher A&P spend
15,70,577
EBITDA at Rs 4.8bn was up 12.8%yoy marginally lower than our estimate of Rs 5bn due to
higher advertisement and promotion spend in a bid to increase proportion of branded sales.
EBITDA margins at 18% was marginally lower than our estimates of Rs 18.8%.
c an e impact and one offs impact reported

APAT at Rs 2.3bn was up 19%yoy though marginally lower than our estimates of Rs 2.5bn.
Exchange impact and one off restructuring cost related to the LATAM region impacted
reported PAT by Rs 665mn.
389 / 149
8.6

Promoters
29.8%
FIIs
48.0%
DIIs
8.5%
Public
7.6%
Price Performance
Volume growth remains intact, maintain Buy

The management continued to maintain the 12-15% constant currency growth guidance and
18-19% EBITDA margin guidance. We continue to maintain our FY15/16E on the back of
strong volume growth for Q2FY15 and H1FY15. We continue to maintain our Buy rating on
the stock with a target price of Rs 400.
(%)
1M
3M
6M
12M
Absolute
(7)
49
108
Rel. to Nifty (2)
(2)
28
63

400

(Rs mn)
429
52 Week H/L
Rs
100
350
80
300
60
FY12
FY13
FY14
FY15E
FY16E
250
40
Net Sales
75,342
91,866
1,07,736
1,21,816
1,35,460
200
20
EBITDA
14,054
16,539
20,203
23,162
25,435
18.3
18.0
18.8
19.0
18.8
6,525
8,520
11,084
11,871
13,321
14.1
19.2
25.9
27.7
31.1
5.6
36.2
34.4
7.1
12.2
ROE (%)
16.5
19.3
22.4
20.6
19.5
P/E (x)
23.1
17.0
12.6
11.8
10.5
EV/EBITDA (x)
12.7
10.3
8.0
6.8
6.1
3.6
3.1
2.7
2.2
1.9
EBITDA Margin (%)

APAT
EPS (Rs)
EPS (% chg)
P/BV (x)
150
Oct-13
Dec-13
Feb-14
UPL (LHS)
Apr-14
Jun-14
Aug-14
0
Oct-14
Rel to Nifty (RHS)
Source: Bloomberg
UPL (UPLL IN)
Exhibit 1: Quarterly Summary

Rs mn
Q2FY14
Q3FY14
Q4FY14
Q1FY15
Q2FY15
YoY (%)
Revenue
23,316
26,469
33,393
27,567
26,623
14.2
(3.4)
54,190
47,874
13.2
Expenditure
19,058
21,818
26,665
22,341
21,818
14.5
(2.3)
44,159
39,050
13.1
81.7
82.4
79.9
81.0
82.0
81.5
81.6
11,629
13,244
17,262
13,197
12,948
26,145
23,902
49.9
50.0
51.7
47.9
48.6
48.2
49.9
2,331
2,619
2,240
2,533
2,547
5,080
4,609
10.0
9.9
6.7
9.2
9.6
9.4
9.6
5,098
5,955
7,163
6,610
6,323
12,933
10,538
21.9
22.5
21.4
24.0
23.7
23.9
22.0
4,259
4,651
6,728
5,226
4,805
12.8
(8.1)
10,031
8,825
13.7
968
1,043
1,195
1,034
1,092
12.7
5.6
2,125
1,832
16.0
3,291
3,607
5,534
4,192
3,714
12.9
(11.4)
7,906
6,993
13.1
282
130
264
159
171
(39.2)
7.9
330
546
(39.7)
Interest
1002
925
1201
1162
905
(9.7)
(22.2)
2067
1880
9.9
PBT
2,570
2,812
4,597
3,189
2,980
16.0
(6.5)
6,169
5,659
9.0
823
494
746
642
462
26.4
62.3
1,344
1,260
6.7
1,747
2,319
3,851
2,547
2,518
11.0
(23.9)
4,824
4,399
9.7
208
101
252
-20
-193
85.7
(2,081.5)
29
162
(82.2)
1,955
2,420
4,103
2,528
2,326
19.0
(8.0)
4,853
4,561
6.4
-409
-197
-496
359
-665
62.8
(285.5)
-307
-199
54.3
Reported PAT
1,546
2,222
3,608
2,886
1,661
7.4
(42.5)
4,547
4,363
4.2
Reported EPS
3.5
5.0
8.2
6.5
3.8
7.4
(42.5)
10.3
8.3
23.8
(bps)
(bps)
as % of sales
Consumption of RM
as % of sales
Employee Cost
as % of sales
Other expenditure
as % of sales
EBITDA
Depreciation
EBIT
Other Income
Total Tax
Adjusted PAT
APAT after MI
Margins (%)
11.3
9.3
24.0
(1.9)
0.6
(4.3)
YoY (%)
9.4
10.2
22.7
(bps)
EBIDTA
18.3
17.6
20.1
19.0
18.0
(22)
(91)
18.5
18.4
EBIT
14.1
13.6
16.6
15.2
13.9
(16)
(126)
14.6
14.6
(2)
EBT
9.8
10.1
13.0
11.0
10.6
74
(44)
10.8
10.7
PAT
8.4
9.1
12.3
9.2
8.7
35
(43)
9.0
9.5
(57)
32.0
17.5
16.2
20.1
15.5
289
1,481
21.8
22.3
(47)
Effective Tax rate

Exhibit 2: Geographical Revenue Break up

Y/E Mar - Rs mn
Q2FY14
Q3FY14
Q4FY14
Q1FY15
Q2FY15
YoY (%)
QoQ (%)
YTD FY15
YTD FY14
YoY (%)
India
6,380
4,840
3,810
9,440
6,860
7.5
(27.3)
16,300
14,070
15.8
North America
3,870
5,180
7,970
5,320
3,420
(11.6)
(35.7)
8,740
8,340
4.8
Europe
3,160
3,260
9,000
5,020
4,010
26.9
(20.1)
9,030
8,140
10.9
Rest of the World
2,750
3,820
5,790
3,080
3,560
29.5
15.6
6,640
5,900
12.5
Latin America
7,440
9,870
7,080
4,870
8,940
20.2
83.6
13,810
11,970
15.4
23,600
26,970
33,650
27,730
26,790
13.5
(3.4)
54,520
48,420
12.6
Total
UPL (UPLL IN)
Conference call highlights

Revenue growth driven by Europe and LATAM
Consolidated revenues at Rs 26.6bn were up 14.2%yoy driven by 27%yoy growth for Europe,
29.5%yoy growth for RoW and 20%yoy growth for LATAM. Revenue growth for India remained
subdued at 7.5%yoy while North America registered de-growth in revenues.
Revenue from India stood at Rs 6.9bn up 7.5%yoy. While ulala, lancer gold, starthene power,
saaf, saathi, phoskill continued to perform well in H1FY15, delayed onset of monsoons impacted
overall growth. The company further launched two new products during the quarter Iris and Eros
which are combination product for soyabean herbicide and paddy herbicide respectively.
LATAM revenues at Rs 8.9bn were up 20%yoy driven by strong growth from the Brazilian
markets. Europe revenues at Rs 4bn were up 27%yoy aided by increase sale of mancozeb and
growth in CIS business. RoW revenues at Rs 3.6bn were up 29.5%yoy driven by improvement
in Australian business and in roads made in Africa. Revenues from North American operation at
Rs 3.9bn were down 11.6%yoy due to de-growth in the markets by 3-5% on account of softening
of commodity prices.
Focus on new product launches and branding

The management continued to focus on new product launches and branding. The company
lauched two new products in India (Iris and Eros), LATAM (azoxystrobin, novaluron, S.
metachlor) and received new registrations in both LATAM and African region. The increased
focus on new product launches and branding impacted margins during the quarter due to
increase in advertisement and promotion cost. Going forward, the company will continue to focus
on launching new products and brand sales.
Working capital cycle under control

Working capital cycle continued to remain under control despite adverse weather conditions
across regions. Inventory days stood at 108 vs 111 in Q2FY14 while debtor days stood at 120
vs 116 in Q2FY14. Net working capital cycle stood at 102 days vs 109 days in Q2FY14.
Balance sheet continues to strengthen

The balance sheet continued to strenghten with gross debt reducing by Rs 3.3bn between
Q4FY14 and Q2FY15. Interest cost (adjusted for exchange impact) stood at Rs 905mn vs Rs
1bn in Q2FY14 down 9.7%yoy on the back of reduction in debt.
Management maintains guidance

Despite the adverse weather conditions in India and Brazil and reducing commodity prices, the
management continued to maintain its guidance of 12-15% constant currency revenue growth
for FY15E driven by new product launches, new product registrations and increasing share of
branded sales. On the EBITDA margin front, the management continued to guide for 18-19%
margins in-line with the earlier guidance.
UPL (UPLL IN)

Income Statement
Y/E Mar (Rs mn)
FY12
FY13
FY14
FY15E
FY16E
Net Sales
75,342
91,866
1,07,736
1,21,816
1,35,460
Expenditure
62,881
75,327
87,533
98,654
1,10,024
EBITDA
14,054
16,539
20,203
23,162
25,435
2,924
3,543
4,069
5,022
5,436
11,131
12,996
16,134
18,140
20,000
701
920
940
800
800
Depreciation
EBIT
Other Income
Interest expenses
3,388
3,740
4,006
4,080
4,080
PBT
8,444
10,176
13,069
14,860
16,720
Tax
1,514
2,032
2,217
3,269
3,678
Extraordinary Items
1,374
389
1,582
405
(376)
(232)
(280)
(280)
Reported Net Income
5,151
8,131
9,503
11,871
13,321
Adjusted PAT
6,929
8,144
10,852
11,591
13,041
FY15E
FY16E
Balance Sheet
Y/E Mar (Rs mn)
FY12
FY13
FY14
924
885
857
857
857
Reserves & surplus
40,808
45,567
51,617
61,733
73,048
Net worth
41,731
46,452
52,474
62,590
73,905
2,499
2,342
1,721
1,761
1,801
35,964
41,257
32,248
32,248
32,248
(57)
(131)
813
493
173
Total Liabilities
80,136
89,921
87,256
97,092
1,08,127
Net block
33,786
37,668
35,456
35,465
35,030
Investment
11,145
13,024
11,382
11,382
11,382
Current Assets
56,102
69,066
75,722
84,890
98,500
7,002
13,010
10,228
14,162
17,738
Minority Interest
Loan Funds
Cash & bank balance

731
657
901
1,800
1,801
22,396
30,836
40,335
39,646
41,785
Net current assets
33,706
38,230
35,387
45,244
56,715
80,136
89,921
87,256
97,092
1,08,127
FY12
FY13
FY14
FY15E
FY16E
12,540
14,507
17,986
19,893
21,757
(12,159)
1,411
1,004
(6,244)
(8,215)
Misc. exp
Total Assets
Cash Flow
Y/E Mar (Rs mn)
NI (Dep. + Int.
tax
ex other incoe)

Chg in working cap
Operating Cashflow
3,372
14,951
18,990
14,767
14,661
Capital expenditure
(14,343)
(6,926)
(5,888)
(5,000)
(5,000)
Free Cash Flow
(10,971)
8,026
13,102
9,767
9,661
(2,913)
(1,879)
1,641
Investments
Investing Cashflow
(800)
(799)
(799)
(8,685)
(3,306)
(4,999)
(4,999)
(38)
(28)
11,044
5,294
(9,009)
(1,351)
(1,295)
(1,504)
(1,755)
(2,006)
(3,517)
(479)
(3,919)
0
(6,086)
Financing Cashflow
1,738
(14,817)
2,789
(258)
(18,466)
(5,834)
Net chg in cash
(8,657)
6,008
(2,782)
3,934
3,576
15,659
7,002
13,010
10,228
14,162
7,002
13,010
10,228
14,162
17,738
UPL (UPLL IN)
Key Ratios
Profitability (%)
FY12
FY13
FY14
FY15E
FY16E
EBITDA Margin
18.3
18.0
18.8
19.0
18.8
EBIT Margin
14.5
14.1
15.0
14.9
14.8
Effective Tax Rate
17.9
20.0
17.0
22.0
22.0
9.0
8.9
10.1
9.5
9.6
ROCE
16.6
16.4
19.3
20.5
20.3
ROE
16.5
19.3
22.4
20.6
19.5
RoIC
22.6
21.1
26.1
28.5
28.5
FY12
11.2
FY13
18.4
FY14
22.2
FY15E
27.7
FY16E
31.1
CEPS
20.5
27.3
35.4
39.4
43.8
BVPS
90.4
105.0
122.4
146.0
172.4
2.5
2.5
3.0
3.5
4.0
FY12
23.1
FY13
17.0
FY14
12.6
FY15E
11.8
FY16E
10.5
Net Margin
Per Share Data (Rs)

EPS
DPS
Valuations (x)
PER
P/CEPS
16.0
12.0
9.2
8.3
7.5
P/BV
3.6
3.1
2.7
2.2
1.9
EV / Sales
2.4
1.9
1.5
1.3
1.1
EV / EBITDA
12.7
10.3
8.0
6.8
6.1
Dividend Yield (%)
0.8
0.8
0.9
1.1
1.2
Gearing Ratio (x)
FY12
FY13
FY14
FY15E
FY16E
Net Debt/ Equity
0.7
0.5
0.4
0.3
0.2
Net Debt/EBIDTA
2.0
1.5
1.1
0.8
0.6
126.7
100.2
85.2
93.1
105.0
Growth (%)
FY12
FY13
FY14
FY15E
FY16E
Revenue
33.4
21.9
17.3
13.1
11.2
EBITDA
31.7
17.7
22.2
14.6
9.8
EBIT
30.5
16.8
24.1
12.4
10.2
PAT
0.2
57.8
16.9
24.9
12.2
Quarterly (Rs mn)
Q2FY14
Q3FY14
Q4FY14
Q1FY15
Q2FY15
Revenue
23,316
26,469
33,393
27,567
26,623
EBITDA
4,259
4,651
6,728
5,226
4,805
EBITDA Margin (%)
18.3
17.6
20.1
19.0
18.0
1,546
2,222
3,608
2,886
1,661
3.5
5.0
8.2
6.5
3.8
Sep-13
Dec-13
Mar-14
Jun-14
Sep-14
Promoters
28.9
28.9
29.8
29.8
29.8
FIIs
41.7
46.8
48.3
50.0
48.0
DIIs
12.3
9.1
6.8
7.1
8.5
Private Corp
8.1
6.9
6.9
5.6
6.2
Public
9.0
8.4
8.2
7.5
7.6
PAT
EPS (Rs)
Emkay
India Equity Research | IT Services

October 20, 2014
Result Update
Persistent Systems
Sep'14 quarter results: Yet another

quarter of disappointment
CMP
Target Price
Rs1,268.1
Rs1,100 ()
Rating
Upside
SELL ()
(13.3) %
Change in Estimates
Result highlights
Persistent reported revenues at US$ 76.3 mn (+5.0% QoQ, +11.5% YoY) below est
(Emkay est: +6.8% QoQ) largely on account of muted performance in IP business (+3%
QoQ) although services growth recovers to 6% QoQ (Vs - . % in Jun14 quarter .
EBITDA margins at 20.6%, down 120 bps sequentially (V/s our expectations of 60 bps
operating performance despite higher than expected other income
We cut our FY15/16E EPS by 4% each and continue to see downside risks to consensus
estimates. Valuations continue to remain expensive at ~16x/14x FY15/16E P/E. Retain
SELL with a revised TP of Rs 1,100 (V/s Rs 1,080 earlier)
Disappointing operating performance

Though headline numbers for Persistent in Sep14 quarter with sequential S revenue
growth of 5% appears healthy disappointment is in details. A 5% QoQ US$ revenue
growth although appears healthy it comes after a flat sequential revenue performance in
June14 quarter. IP Revenue growth remains tepid at 2.6% o although Services
growth picks up to ~6% QoQ growth led by the Platforms business
Margins slip by ~120 bps QoQ to 20.6% V/s management indication of flat margins
despite strong revenue growth led by higher provisioning. Profits miss estimates despite
higher other income on account of operational miss.
ersistents outloo of i er t an
revenue ro t in
appears stiff as
it implies ~6% CQGR through H2FY15. Management remains hopeful of strong
growth in H2FY15
EPS Estimates
FY15E
FY16E
Emkay
75.2
80.6
Consensus
77.1
Mean Consensus TP
Bloomberg Code
PSYS IN
Face Value (Rs)
10
1,555 / 723
FY15E
18,964
4,160
21.9
3,007
75.2
20.6
18.7
16.9
10.6
3.5
FY16E
22,099
4,846
21.9
3,225
80.6
7.3
20.6
15.7
8.9
3.0
FY17E
25,445
5,405
21.2
3,684
92.1
14.2
20.3
13.8
7.7
2.6
51 / 0.83
43,936
1.0

Promoters
39.0%
FIIs
29.1%
DIIs
9.5%
Public
21.1%
We have continued to highlight through our sector notes that Tier II Techs faces margin
headwinds which pose downside risks to earnings estimates and Sep14 quarter results lend
evidence to our thesis. While we moderate our revenue /margin assumptions, our earnings
cut is limited to ~4% each for FY15/16 aided by lower currency resets. Valuations continue to
remain rich at ~15/14x FY15/16E P/E and in the backdrop of downside risks to earnings
support our SELL rating on the stock. We retain SELL with a revised TP of Rs 1,100. We do
not have any positive rated stock in our Tier II universe and prefer only Infosys and TCS in
our Tier I coverage.
FY14
16,692
4,303
25.8
2,493
62.3
32.9
23.6
20.3
10.4
4.1
40
52 Week H/L
Absolute
FY13
12,945
3,352
25.9
1,876
46.9
32.3
22.6
27.0
14.0
5.0
90.6
Rs 1,324
Stock Details
Price Performance
(Rs mn)
Net Sales
EBITDA
EBITDA Margin (%)
APAT
EPS (Rs)
EPS (% chg)
ROE (%)
P/E (x)
EV/EBITDA (x)
P/BV (x)
SELL
Emkay vs Consensus
Downside risks to consensus estimates; expensive valuations continue to

drive out SELL rating
1.9
Previous Reco
QoQ increase) as SG&A expenses increased by 130 bps QoQ to 19.6% of revenues
while gross margin improved marginally (up 10 bps QoQ) to 40.2%.
Profits at Rs 713 mn (+3.6% QoQ, +17.3% YoY) is below Emkay estimates due to weak
(4)/(4)
(%)
1M
3M
6M
12M
(11)
(5)
19
76
Rel. to Nifty (6)
(8)
39

1500
Rs
1340
48
1180
36
1020
24
860
12
700
Oct-13
Dec-13
Feb-14
Apr-14
Persistent Systems (LHS)
Jun-14
Aug-14
0
Oct-14
Rel to Nifty (RHS)
Source: Bloomberg
60
Persistent Systems (PSYS IN)
Exhibit 1: Quarterly results at a glance

Rs mn
Q1FY14 Q2FY14
QoQ (%)
FY15YTD
FY14YTD
YoY (%)
63.0
68.5
69.9
72.6
72.7
76.3
11.5
5.0
149.0
131.5
13.3
Revenue Rs. Mn
3,573
4,324
4,328
4,467
4,350
4,642
7.4
6.7
8,991.9
7,896.6
13.9
Operating Expenditure
2,796
3,202
3,130
3,261
3,401
3,685
15.1
8.4
7,086
5,998
18.1
Cost of revenues
2,105
2,426
2,433
2,554
2,606
2,776
14.4
6.5
5,382.4
4,530.5
18.8
as % of sales
58.9
56.1
56.2
57.2
59.9
59.8
59.9
57.4
SG&A expenses
691
776
698
707
795
909
1,467.1
as % of sales
19.3
17.9
16.1
15.8
18.3
19.6
EBITDA
777
1,122
1,198
1,207
949
Depreciation
237
263
262
264
EBIT
540
859
936
Other Income
263
-24
PBT
803
835
Total Tax
232
227
Adjusted PAT
571
1.0
APAT after MI
Revenue (US $ Mn)
Q3FY14 Q4FY14 Q1FY15 Q2FY15 YoY (%)
17.2
14.4
1,703.5
18.9
18.6
957
-14.7
0.8
1,906
1,899
0.4
228
237
-9.8
4.2
464.8
499.7
(7.0)
942
722
720
-16.3
-0.3
1,441
1,399
3.0
-70
-19
233
274
507.0
238.7
866
923
954
994
19.0
4.1
1,948
1,638
18.9
223
251
266
281
23.6
5.4
546.8
459.3
19.1
608
642
672
688
713
17.3
3.6
1,401
1,179
18.9
1.0
1.0
1.0
1.0
1.0
2.0
2.0
570
607
641
671
687
712
1,399
1,177
0.0
0.0
17.4
3.6
16.1
18.9
Reported PAT
570
607
641
671
687
712
17.4
3.6
1,399
1,177
18.9
Reported EPS
14.3
15.2
16.1
16.8
17.2
17.8
17.3
3.6
35.0
29.5
18.9
(bps)
(bps)
EBIDTA
21.7
26.0
27.7
27.0
21.8
20.6
(534)
(121)
21.2
24.0
(285)
EBIT
15.1
19.9
21.6
21.1
16.6
15.5
(437)
(109)
16.0
17.7
(169)
EBT
22.5
19.3
20.0
20.7
21.9
21.4
210
(53)
21.7
20.7
92
PAT
16.0
14.0
14.8
15.0
15.8
15.3
131
(46)
15.6
14.9
66
Effective Tax rate
28.9
27.2
25.8
27.2
27.9
28.2
104
35
28.1
28.0
Margins (%)
(bps)
Muted revenue growth in IP led business

Persistents IP led revenues grew by 2. % sequentially in Sep14 quarter marking yet another
quarter of muted performance. So far lumpy revenue growth has been characteristic of IP led
business at Persistent (sequential revenue growth range of ~49% to -12%), however revenue
growth in last two quarters was sub 3% sequential revenue growth.
Exhibit 2: IP revenue growth was muted at 2.9% QoQ for yet another quarter
60
50
40
30
20
10
0
-10
60%
50%
48.7%
40%
37.4%
30%
20%
16.4%
14.4%
5.6%
10%
2.1%
4.4%
3.8%
3.5%
3.1%
3.0%
2.0%
1.6%
-0.8%
-0.5%
2.9% 0%
-4.8%
-2.6%
-1.7%
-10%
-12.4%
-20%
June'12 Sep'12 Dec'12 Mar'13 June'13 Sep'13 Dec'13 Mar'14 June'14 Sep'14
Linear Business ( in US$ mn) (LHS)
IP Revenue ( in US$ mn) (LHS)
Linear Business QoQ (%)
IP Revenue QoQ (%)
Pick up in Services growth after decline in une
quarter
Persistents linear revenues cloaked strong 5.6% QoQ growth s flat revenue in Jun14 quarter ;
however the growth composition is not so much encouraging. This growth is largely led by onsite
revenues which grew by 11.4% QoQ Vs mere 3.2% QoQ increase in offshore revenues
(continuing trend of onsite led growth and now onsite revenues account for ~24.5% of revenues
as against 2 .6% in Sep1 . Moreover the entire linear revenue growth was from non-top 10
clients which grew by 13.3% QoQ while revenues from top/top 5 declined for second quarter in
row by 4.1/2% QoQ respectively and revenues from top10 client declined by 3.5% QoQ.

Exhibit 3: Onsite revenues as % of total revenues continue to inch up; Onsite revenues now
account for
of revenues as a ainst
in Sep
Onsite revenues as % of total revenues
Sep'14
Jun'14
Mar'14
Dec'13
Sep'13
Jun'13
Mar'13
Dec'12
Sep'12
June'12
Mar'12
Dec'11
Sep'11
June'11
80
70
60
50
40
30
20
10
0
Offshore revenues as % of total revenues
Exhibit 4: Service segment revenue growth fuel by non-top 10 clients while revenues from top 10
clients declined 3.5% QoQ
30%
20%
10%
Sep'14
Jun'14
Mar'14
Dec'13
Sep'13
Jun'13
Mar'13
Dec'12
Sep'12
June'12
Mar'12
Sep'11
June'11
-10%
Dec'11
0%
-20%
Top , QoQ%
Top 5 , QoQ%
Top 10 , QoQ%
Non top 10 , QoQ
mar in declined
expenses) inch up
bps
as doubtful debt provision and not S
Persistents EBITDA margins declined by 12 bps sequentially to 2 .6% ( V/s expectations of

~60 bps improvement) led by SG&A increase of 130 bps ( Provision for doubtful debts accounted
for 12 bps sequential swing during Sep14 quarter as gross margins were nearly flat o
despite wage increments that were implemented during the quarter. We highlight that
Persistent s EBITDA margins have slipped by 4 bps through the past 4 quarters on account
of deterioration in revenue mix as currency has remained relatively stable during the period.
While we do build in ~300 bps improvement in EBITDA margins through H2FY15, we see
possible downside risks to our margin assumptions for the company given our concern on lateral
supply side challenges for the sector and the deteriorating revenue mix for Persistent.
20.6%
Sep'14
27.0%
Mar'14
21.8%
27.7%
Dec'13
June'14
26.0%
Sep'13
21.7%
June'13
24.9%
Mar'13
27.2%
Sep'12
24.7%
26.8%
June'12
Dec'12
28.6%
Mar'12
26.0%
Dec'11
19.0%
17.9%
June'11
Sep'11
17.9%
Mar'11
21.9%
Dec'10
23.0%
Sep'10
19.0%
June'10
Mar'10
31%
29%
27%
25%
23%
21%
19%
17%
15%
22.3%
Exhibit 5: We see possible downside risks to our margin assumptions
EBITDA Margins %
Forex gains aid net profit performance as operational performance remains

below par
hile Persistent has seen 1 . % o revenue growth in H1 1 , Persistents operating profits
have been flat through the period with operating margins declining by
bps. Persistents net
profit performance has been aided by forex gains (company has reported forex gains at ~Rs 290
mn in H1FY15 V/s forex gains of ~Rs 84 mn in H1FY14).
Exhibit 6: Forex gains aid net profit performance
(Rs mn)
FY14
1HFY14
1HFY15
Revenue ( in US$ mn)
274.06
131.48
148.98
US$ revenue growth, YoY %
15.2%
14.4%
13.3%
1,906
EBITDA
EBITDA growth, YoY %
Net profit
Net Profit, YoY %
Forex
Net profit excluding forex
Net profit excluding forex growth , YoY %
4,303
1,899
28.4%
11.9%
0.4%
2,493
1,179
1,401
32.9%
36.7%
18.9%
-149
84
289
2,643
1,095
1,113
25.9%
-4.3%
1.6%
Cut FY15/16E EPS by 4% each, expensive valuations drive our SELL rating
While we cut our US$ revenue estimates and margin assumptions, lower currency resets limit
our FY15/16E EPS cuts at ~4% each to Rs 75/80.6. Valuations remain rich at ~17x/16x
FY15/16E P/E in the context of possible downside risks to both street estimates and
managements outlook of
1 revenue growth being better than 14 as it implies 6% C
R
through H2FY15. We do not have any positive rated stock in our Tier II coverage universe and
retain our preference for Infosys and TCS in the Tier I space. We retain SELL on Persistent with
a revised TP of Rs 1,1
/s Rs 1,
earlier based on 1 x 1 yr forward Sep1 E earnings.
Exhibit 7: Changes in earnings estimates
(All fig in Rs mn
FY15E
FY16E
FY17E
except EPS and %)
Old
New
% chg.
Old
New
% chg.
New
YoY
Revenues( US$ mn)
316
312
-1.1%
374
362
-3.2%
417
15.1%
19,007
18,964
-0.2%
22,451
22,099
-1.6%
25,445
15.1%
4,290
4,160
-3.0%
4,985
4,846
-2.8%
5,405
11.5%
22.6
21.9
22.2
21.9
3,135
3,007
-4.1%
3,357
3,225
-3.9%
3,684
14.2%
78.4
75.2
-4.1%
83.9
80.6
-3.9%
92.1
14.2%
Revenues
EBITDA
EBITDA mgns, %
Net profits
EPS
21.2
Source: Emkay Research
Highlights from Sep
quarter conference call
Company continue to guide for better revenue growth in FY15E on back of good traction in
from enterprise clients and digital transformation offering of company. Company added 40
clients in account led and Partnership business in Sep14 quarter.
Management attributed weakness in some of the top 10 clients to change in strategy by
clients which led to below expected revenue performance for top 1 client in Sep14 quarter.
Company rolled out wage increment in Sep14 quarter which impacted operating margins
margin by 300bps; however utilisation improvement, lower visa costs and rupee
depreciation compensated adverse impact of wage hike.

Income Statement
Y/E Mar (Rs mn)
FY13
FY14
FY15E
FY16E
FY17E
12,945
16,692
18,964
22,099
25,445
Expenditure
9,593
12,389
14,804
17,253
20,040
EBITDA
3,352
4,303
4,160
4,846
5,405
783
1,026
956
1,072
1,123
2,569
3,277
3,205
3,774
4,282
284
299
430
585
696
Net Sales
Depreciation
EBIT
Other Income
Interest expenses
PBT
Tax
2,852
3,576
3,634
4,359
4,978
754
934
1,141
1,133
1,294
(222)
(149)
513
Reported Net Income
1,876
2,493
3,007
3,225
3,684
Adjusted PAT
2,099
2,643
2,494
3,225
3,684
FY17E
Extraordinary Items
Balance Sheet
Y/E Mar (Rs mn)
FY13
FY14
FY15E
FY16E
400
400
400
400
400
Reserves & surplus
9,783
11,823
14,039
16,414
19,127
10,183
12,223
14,439
16,814
19,527
14
32
(190)
(260)
(261)
(261)
(261)
Net worth
Minority Interest
Loan Funds
Total Liabilities
10,007
11,995
14,178
16,553
19,266
Net block
3,502
4,077
5,122
6,050
6,927
Investment
3,289
4,895
5,585
5,585
5,585
Current Assets
4,574
5,894
6,801
8,850
11,327
Cash & bank balance
561
957
1,086
2,129
3,589
657
717
831
969
1,115
2,533
3,179
3,660
4,261
4,903
Net current assets
2,041
2,716
3,141
4,588
6,424
Misc. exp
Total Assets
10,007
11,995
14,178
16,553
19,266
Cash Flow
Y/E Mar (Rs mn)
FY13
FY14
FY15E
FY16E
FY17E
2,569
3,277
3,205
3,774
4,282

Chg in working cap
(402)
(350)
(296)
(404)
(376)
Operating Cashflow
2,196
2,794
2,594
3,620
4,047
(1,562)
(734)
(2,000)
(2,000)
(2,000)
Capital expenditure
Free Cash Flow
Investments
Investing Cashflow
2,060
594
1,620
2,047
(3,211)
(1,380)
(3,781)
(3,628)
(2,943)
(1,412)
(1,301)
0
14
18
(32)
(299)
(402)
(793)
(851)
(971)
1,056
1,613
1,303
(315)
(314)
771
1,230
478
(1,165)
(1,286)
Net chg in cash
(813)
395
129
1,043
1,460
1,375
561
957
1,086
2,129
561
957
1,086
2,129
3,589
Financing Cashflow
634
(2,502)
Key Ratios
Profitability (%)
FY13
FY14
FY15E
FY16E
FY17E
EBITDA Margin
25.9
25.8
21.9
21.9
21.2
EBIT Margin
19.8
19.6
16.9
17.1
16.8
Effective Tax Rate
26.4
26.1
31.4
26.0
26.0
Net Margin
16.2
15.8
13.1
14.6
14.5
ROCE
31.2
32.5
27.8
28.4
27.8
ROE
22.6
23.6
18.7
20.6
20.3
RoIC
55.0
60.6
49.3
48.1
46.9
FY13
46.9
FY14
62.3
FY15E
75.2
FY16E
80.6
FY17E
92.1
CEPS
72.0
91.7
86.2
107.4
120.2
BVPS
254.6
305.6
361.0
420.4
488.2
6.0
8.0
16.9
18.1
20.7
FY13
27.0
FY14
20.3
FY15E
16.9
FY16E
15.7
FY17E
13.8
Per Share Data (Rs)

EPS
DPS
Valuations (x)
PER
P/CEPS
17.6
13.8
14.7
11.8
10.6
P/BV
5.0
4.1
3.5
3.0
2.6
EV / Sales
3.6
2.7
2.3
1.9
1.6
EV / EBITDA
14.0
10.4
10.6
8.9
7.7
Dividend Yield (%)
0.5
0.6
1.3
1.4
1.6
Gearing Ratio (x)
FY13
FY14
FY15E
FY16E
FY17E
Net Debt/ Equity
(0.4)
(0.5)
(0.5)
(0.5)
(0.5)
Net Debt/EBIDTA
(1.1)
(1.4)
(1.6)
(1.6)
(1.7)
41.7
38.5
39.6
40.6
40.7
Growth (%)
FY13
FY14
FY15E
FY16E
FY17E
Revenue
29.4
28.9
13.6
16.5
15.1
EBITDA
44.2
28.4
(3.3)
16.5
11.5
EBIT
49.9
27.6
(2.2)
17.8
13.5
PAT
32.3
32.9
20.6
7.3
14.2
Quarterly (Rs mn)
Q2FY14
Q3FY14
Q4FY14
Q1FY15
Q2FY15
Revenue
4,324
4,328
4,467
4,350
4,642
EBITDA
1,122
1,198
1,207
949
957
EBITDA Margin (%)
26.0
27.7
27.0
21.8
20.6
PAT
608
642
672
688
713
EPS (Rs)
15.2
16.1
16.8
17.2
17.8
Sep-13
Dec-13
Mar-14
Jun-14
Sep-14
Promoters
39.0
39.0
39.0
39.0
39.0
FIIs
20.7
24.1
23.3
28.5
29.1
DIIs
16.8
13.9
13.6
9.8
9.5
0.9
1.1
2.2
1.4
1.3
22.6
21.9
21.9
21.4
21.1
Private Corp
Public
Emkay
India Equity Research | IT Services

October 17, 2014
Result Updat
HCL Tech
Soft revenue performance across

segments
CMP
Target Price
Rs1,505.5
Rs1,700 ()
Rating
Upside
ACCUMULATE ()
12.9 %
Change in Estimates
Result highlights
3/(2)
Revenues at US$ 1,434 mn (+1.9% QoQ, +3.2% QoQ in c.c terms) misses expectations
(4.0)
of ~3.3% QOQ US$ growth. Tepid growth across segments disappoints as both Core
Software and IMS grow ~2% QoQ
EBIT margin decline restricted to 30 bps QoQ on account of lower depreciation resulting
Previous Reco
ACCUMULATE
Emkay vs Consensus
EPS Estimates
from change in depreciation policy
FY15E
FY16E
Emkay
104.5
113.7
Consensus
102.7
Profits at Rs18.7 bn (+2.1% QoQ),tad higher than expectations aided by higher other
income despite the miss on operational performance
While we moderate our revenue/margin assumptions, change in depreciation policy and

lower currency resets drives a2.5% increase in our FY15E EPS. We cut FY16E EPS by
~2%. Retain ACCUMULATE, TP Rs 1,700. Will recommend adding positions at ~Rs
1,400-1,450 levels. Infosys and TCS remain our preferred bets however in the sector.
Mean Consensus TP
116.3
Rs 1,804
Stock Details
Bloomberg Code
HCLT IN
Face Value (Rs)
Soft revenue performance across segments
Sep14 quarter revenue performance was poor across segments with both Core Software and
IMS growing at ~2% sequentially as BPO revenues were flat QoQ. Overall co wide revenues
came in at US$ 1,434 mn (+1.9% QoQ, +3.2% QoQ in c.c terms), V/s expectations of ~3.3%
QoQ growth. EBITDA margins declined by ~120 bps QoQ at 25.1% V/s expectations of ~60
bps QoQ decline led largely by gross margin decline of 130 bps QoQ albeit EBIT margin
decline was restricted to ~30 bps QoQ on account of lower depreciation charge. Net Profits
at Rs18.7 bn (+2.1% QoQ) however were a tad higher than expectations aided by higher other
income and lower depreciation as operating performance disappointed. hile HCLTs order
bookings continued to remain solid as ever (15 deals with TCV of US$ 1bn+), recent fall in
o growth tra ectory in HCLTs strength area of Infrastructure Services is disappointing and
could drag companywide growth in the near term. Headcount addition picked up after a
52 Week H/L
1,776 / 1,026
1,056 / 17.18
strong focus on delivery optimization through most of FY13-14, albeit attrition

continues to remains elevated (33%+ on quarterly annualized basis) and a cause of
worry as we foresee some supply side pressure for lateral talent across the industry
ahead.
Depreciation policy change limits earnings cut as we moderate operational
estimates
While we moderate our US$ revenue/margin assumptions lower depreciation charge and
currency resets drive a 2.5% raise in FY15E EPS to ~Rs 105 although we moderate FY16E
EPS by ~2% to Rs 114. We also introduce FY17E EPS at Rs 127. A 9% correction in stock
today captures the weak Sep14 quarter performance and we see stock finding support at
~1,400-1,450 levels. However Infosys and TCS remain our preferred bets in the sector .
(Rs mn)
Net Sales
EBITDA
EBITDA Margin (%)
APAT
EPS (Rs)
EPS (% chg)
ROE (%)
P/E (x)
EV/EBITDA (x)
P/BV (x)
FY13
2,57,337
57,719
22.4
40,428
57.3
63.9
35.2
26.3
18.2
8.1
FY14
3,29,249
88,070
26.7
64,787
91.7
60.1
44.1
16.4
11.9
6.6
FY15E
3,67,368
89,701
24.4
73,722
104.5
13.9
39.2
14.4
11.5
5.0
FY16E
4,13,130
97,009
23.5
80,207
113.7
8.8
33.1
13.2
10.1
3.9
FY17E
4,62,883
1,05,373
22.8
89,413
126.7
11.5
29.8
11.9
8.9
3.2
701
9,35,409
26.1
Shareholding Pattern Jun '14

Promoters
61.7%
FIIs
29.8%
DIIs
3.7%
Public
2.8%
Price Performance
(%)
1M
3M
6M
12M
Absolute
(7)
40
Rel. to Nifty (9)
(8)
10

1775
Rs
1630
38
1485
26
1340
14
1195
1050
Oct-13
Dec-13
Feb-14
HCL Tech (LHS)
Apr-14
Jun-14
Aug-14
-10
Oct-14
Rel to Nifty (RHS)
Source: Bloomberg
50
HCL Tech (HCLT IN)
Exhibit 1: Quarterly results at a glance

Rs mn
Q1FY14
Q2FY14
Q3FY14
Q4FY14
Q1FY15
YoY (%)
QoQ (%)
FY14
FY13
YoY (%)
1,270
1,321
1,361
1,407
1,434
12.8
1.9
1,434
1,270
12.8
Revenue
79,610
81,840
83,490
84,240
87,350
9.7
3.7
87,350
79,610
9.7
Operating Expenditure
58,680
60,590
61,170
62,070
65,430
11.5
5.4
65,430
58,680
11.5
Cost of revenues
48,580
50,400
51,030
52,150
55,220
13.7
5.9
55,220
48,580
13.7
61.0
61.6
61.1
61.9
63.2
63.2
61.0
10,100
10,190
10,140
9,920
10,210
10,100
Revenues(US$ mn)
as % of sales
SG&A expenses
as % of sales
1.1
2.9
10,210
11.7
12.7
4.7
-1.1
21,920
20,930
4.7
1,040
1,980
(47.5)
18,950
10.2
12.7
12.5
12.1
11.8
11.7
20,930
21,250
22,320
22,170
21,920
1,980
1,850
1,720
1,770
1,040
EBIT
18,950
19,400
20,600
20,400
20,880
Other Income
(1,200)
(470)
(70)
1,580
3,050
PBT
17,750
18,930
20,530
21,980
23,930
3,590
3,980
4,290
3,620
5,190
14,160
14,950
16,240
18,360
18,740
-1
-1
14,160
14,950
16,240
18,360
18,740
Reported PAT
14,160
14,950
16,240
18,360
18,740
32.3
Reported EPS
20.0
21.2
23.0
26.0
26.5
32.4
(bps)
(bps)
EBIDTA
26.3
26.0
26.7
26.3
25.1
(120)
EBIT
23.8
23.7
24.7
24.2
23.9
10
EBT
22.3
23.1
24.6
26.1
27.4
PAT
17.8
18.3
19.5
21.8
21.5
Effective Tax rate
20.2
21.0
20.9
16.5
21.7
EBITDA
Depreciation
Total Tax
Adjusted PAT
APAT after MI
Margins (%)
1.1
10.2
2.4
20,880
3,050
-1,200
(354.2)
34.8
8.9
23,930
17,750
34.8
5,190
3,590
44.6
18,740
14,160
32.3
-1
18,740
14,160
2.1
18,740
14,160
32.3
2.1
26.5
20.0
32.4
(122)
25.1
26.3
(120)
(31)
23.9
23.8
10
510
130
27.4
22.3
510
367
(34)
21.5
17.8
367
146
522
21.7
20.2
146
32.3
2.1
32.3
2.1
32.3
Exhibit 1: YoY revenue growth trajectory in IMS has slipped sharply in recent quarters
50%
40%
30%
20%
10%
IMS revenue, YoY %
Core software revenue, YoY %
Sep'14
June'14
Mar'14
Dec'13
Sep'13
June'13
Mar'13
Dec'12
Sep'12
June'12
0%
Cpmpany-wide revenue, YoY %
Exhibit 2: Changes in earnings estimates

(All fig in Rs mn
except EPS)
Revenues(US$ mn)
Revenues
EBITDA
EBITDA mgns, %
Net profits
EPS
FY15E
Old
6,125
FY16E
New % change
6,024
3,67,471 3,67,368
-1.6
Old
6,959
FY17E
New % change
6,773
0.0 4,17,564 4,13,130
-2.7
New % growth
7,588
12.0%
-1.1 4,62,883
12.0%
8.6%
93,510
89,701
-4.1 1,02,616
97,009
-5.5 1,05,373
25.4
24.4
24.6
23.5
22.8
71,975
73,722
2.4
81,840
80,207
-2.0
89,413
11.5%
101.9
104.5
2.5
115.9
113.7
-1.9
126.6
11.4%
HCL Tech (HCLT IN)
Change in depreciation policy limits the decline in EBIT margins

hile HCL Techs EBITDA margins slipped by 12 bps o to 25.1% led by ~130 bps
sequential decline in gross margins, EBIT margin decline was restricted to 30 bps QoQ with
Sep14 quarter EBIT margins at 2 . %. This was on account of change in depreciation policy by
the HCL Tech per which the company has increased the useful life of certain assets going
forward. Had the company followed the previously followed useful life of assets, the companys
EBIT margins for Sep14 quarter would have been 2 .1%, down by 110 bps sequentially
Exhibit 3: Changes in depreciation policy
Existing Useful
Revised Useful Life
(Years)
(Years)
Category of Asset
Buildings
20
20
Computer and networking equipment
4 to 5
Software
Furniture,fixtures and office equipment
5 to 7
4 to17
10 to 17
Plant and equipment (including aircraft)

Vehicles
25.1%
26.3%
26.0%
Dec'13
26.7%
26.3%
23.1%
June'13
Sep'13
22.0%
22.2%
Dec'12
Mar'13
21.8%
18.0%
Mar'12
Sep'12
18.1%
Dec'11
16.7%
18.0%
16.7%
Mar'11
20%
15.7%
25%
Dec'10
30%
21.6%
Exhibit 4: EBITDA margin declined sequentially by 120bps to 25.1%
15%
Sep-14
June'14
Mar'14
June'12
June'11
Sep'11
10%
EBITDA margins , %
Exhibit 5: Number of US$ 100 mn+ clients increased to 7 on a LTM basis

Sep'12
Dec'12
Mar'13
June'13
Sep'13
Dec'13
Mar'14
June'14
Sep'14
No of US$ 1 mn + clients
401
418
422
428
427
427
432
429
428
173
178
187
186
184
183
183
187
193
No of US$ 10mn + clients
98
98
98
102
105
107
109
114
115
49
50
51
51
57
61
64
67
67
29
29
29
30
29
30
32
37
37
14
15
15
18
19
18
18
18
20
10
10
10
11
11
12
14
15
15
28.8%
Mar'14
33.3%
29.4%
Dec'13
30.5%
29.5%
Sep'13
24.8%
Dec'12
26.2%
25.3%
Sep'12
28.0%
24.7%
25.7%
Mar'12
June'12
25.7%
30%
Dec'11
29.6%
35.0%
Mar'11
35%
31.6%
35.5%
40%
Dec'10
Exhibit 6: Attrition for HCL Tech continues to remain elevated and remains a cause of concern
25%
Sep-14
June'14
June'13
Mar'13
Sep'11
June'11
20%
Qtrly Annualized Attrition (Co wide level)
HCL Tech (HCLT IN)
Highlights from conference call
HCL Tech believes that the demand environment remains decent both in US as well as
Europe.
HCL Tech intends to focus on Engineering Services (accounts for ~17% of revenues for
the company) which the company believes is the next big opportunity for it in the next few
years. Company believes that this market is opening up now for outsourcing and believes
that there could be large deal opportunities from the segment as the market opens up.
HCL Techs EBIT margins slipped by

bps o during Sep14 quarter with staggered
wage hikes impacting margins by
bps during Sep14 quarter. Company expects the
staged increments to impact margins by ~130 bps in Dec14 quarter and 1 bps each in
Mar1 and June1 quarters respectively.
hile HCLTs attrition continues to remain elevated and a cause of concern for us,
company believes that the voluntary attrition remains under control and Sep14 quarter
increase only reflects the seasonal spike.
Exhibit 7: Operating metrics at a glance

Q1FY15
(% contri to revenue)
Growth
% QoQ
% YoY
Service Offerings
Core Software
60.5%
2.1%
10.1%
BPO
5.0%
-0.1%
35.7%
IMS
34.5%
1.9%
27.9%
Revenue Breakup by Geography (in %)

US
56.3
5.6%
11.1%
Europe
32.3
-0.3%
20.7%
Asia Pacific
11.4
-8.5%
2.1%
Enterprise App Services
15.7
3.9%
8.7%
Engg & R&D services
17.1
7.6%
14.2%
Industry Solutions
27.7
-2.0%
6.0%
Infrastructure services
34.5
1.9%
17.6%
-99.9%
-99.9%
BFSI
28.2
1.2%
22.4%
Hi Tech Manufacturing
32.3
4.1%
9.5%
Retail
9.5
13.9%
29.2%
Media, Publishing & Entertainment
8.7
-0.4%
7.9%
Life Sciences
9.8
-2.1%
-4.7%
Others
2.2
-2.5%
-36.3%
Top 5, %
14.4
-0.2%
7.6%
Top 10, %
23.1
-0.7%
9.5%
Top 20, %
33
-0.2%
12.2%
Q1FY14
Revenue by Service Offering (in %)
BPO services
Revenues by industry (in %)
Client Contribution to revenues (in %)
Q1FY15
Q4FY14
Quarterly Annualized attrition rate
33.3%
30.5%
29.5%
Total Employees
95,522
91,691
87,196
Gross Addition
11,631
8,442
8,061
3,831
1,499
1,691
Time & material
43.7
43.5
45.3
Fixed Price
56.3
56.5
54.7
Net Addition
Revenues by Contract Type (in %)
HCL Tech (HCLT IN)

Income Statement
Y/E Jun (Rs mn)
FY13
FY14
FY15E
FY16E
FY17E
Net Sales
2,57,337
3,29,249
3,67,368
4,13,130
4,62,883
Expenditure
1,99,618
2,41,180
2,77,666
3,16,121
3,57,511
57,719
88,070
89,701
97,009
1,05,373
6,725
7,643
4,333
4,875
5,672
50,994
80,427
85,368
92,134
99,701
1,577
(160)
8,976
10,595
14,832
EBITDA
Depreciation
EBIT
Other Income
Interest expenses
PBT
52,571
80,267
94,344
1,02,729
1,14,532
Tax
12,143
15,480
20,623
22,522
25,119
Extraordinary Items
Reported Net Income
40,428
64,787
73,722
80,207
89,413
Adjusted PAT
40,428
64,787
73,722
80,207
89,413
FY16E
FY17E
Balance Sheet
Y/E Jun (Rs mn)
FY13
FY14
FY15E
1,394
1,394
1,394
1,394
1,394
Reserves & surplus
1,30,246
1,60,756
2,13,012
2,68,450
3,29,792
Net worth
1,31,640
1,62,150
2,14,405
2,69,844
3,31,186
447
447
447
447
447
9,253
9,253
9,253
9,253
9,253
1,41,339
1,71,849
2,24,105
2,79,543
3,40,885
67,515
68,858
73,672
80,997
90,575
Minority Interest
Loan Funds
Total Liabilities
Net block
Investment
35,704
89,948
89,948
89,948
89,948
1,15,835
1,21,286
1,58,410
2,19,336
2,85,032
Cash & bank balance
7,207
10,206
34,737
80,547
1,29,807
32,884
24,694
27,553
30,985
34,716
82,653
1,13,181
1,02,863
1,15,676
1,29,607
Net current assets
33,182
8,105
55,547
1,03,660
1,55,425
1,41,339
1,71,849
2,24,105
2,79,543
3,40,886
FY13
FY14
FY15E
FY16E
FY17E
50,994
80,427
85,368
92,134
99,701
Chg in working cap
(8,848)
28,076
(22,910)
(2,304)
(2,505)
Operating Cashflow
36,728
1,00,665
46,169
72,183
77,749
Capital expenditure
(8,863)
(8,985)
(9,148)
(12,200)
(15,250)
Free Cash Flow
27,865
91,680
37,021
59,983
62,499
(16,254)
(54,245)
Current Assets
Misc. exp
Total Assets
Cash Flow
Y/E Jun (Rs mn)
Investments
Investing Cashflow
(63,390)
(171)
(1,605)
(418)
941
(6,009)
(9,909)
(18,186)
(21,466)
(24,768)
(28,071)
2,231
(16,091)
(12,747)
(34,277)
(21,466)
(24,768)
(28,071)
441
2,999
24,531
45,810
49,260
6,767
7,207
10,206
34,737
80,547
7,207
10,206
34,737
80,547
1,29,807

Financing Cashflow
Net chg in cash
0
(23,540)
HCL Tech (HCLT IN)
Key Ratios
Profitability (%)
FY13
FY14
FY15E
FY16E
FY17E
EBITDA Margin
22.4
26.7
24.4
23.5
22.8
EBIT Margin
19.8
24.4
23.2
22.3
21.5
Effective Tax Rate
23.1
19.3
21.9
21.9
21.9
Net Margin
15.7
19.7
20.1
19.4
19.3
ROCE
41.2
51.3
47.7
40.8
36.9
ROE
35.2
44.1
39.2
33.1
29.8
RoIC
58.2
100.4
105.9
92.8
90.5
FY13
57.3
FY14
91.7
FY15E
104.5
FY16E
113.7
FY17E
126.7
CEPS
66.8
102.5
110.6
120.6
134.7
BVPS
186.5
229.5
303.8
382.4
469.3
12.0
22.0
26.0
30.0
34.0
FY13
26.3
FY14
16.4
FY15E
14.4
FY16E
13.2
FY17E
11.9
Per Share Data (Rs)

EPS
DPS
Valuations (x)
PER
P/CEPS
22.5
14.7
13.6
12.5
11.2
P/BV
8.1
6.6
5.0
3.9
3.2
EV / Sales
4.1
3.2
2.8
2.4
2.0
EV / EBITDA
18.2
11.9
11.5
10.1
8.9
Dividend Yield (%)
0.8
1.5
1.7
2.0
2.3
Gearing Ratio (x)
FY13
FY14
FY15E
FY16E
FY17E
Net Debt/ Equity
0.0
0.0
(0.1)
(0.3)
(0.4)
Net Debt/EBIDTA
0.0
0.0
(0.3)
(0.7)
(1.1)
36.8
(2.3)
20.7
20.4
20.2
Growth (%)
FY13
FY14
FY15E
FY16E
FY17E
Revenue
22.4
27.9
11.6
12.5
12.0
EBITDA
46.5
52.6
1.9
8.1
8.6
EBIT
51.0
57.7
6.1
7.9
8.2
PAT
64.5
60.3
13.8
8.8
11.5
Quarterly (Rs mn)
Q1FY14
Q2FY14
Q3FY14
Q4FY14
Q1FY15
Revenue
79,610
81,840
83,490
84,240
87,350
EBITDA
20,930
21,250
22,320
22,170
21,920
EBITDA Margin (%)
26.3
26.0
26.7
26.3
25.1
14,160
14,950
16,240
18,360
18,740
20.0
21.2
23.0
26.0
26.5
Jun-13
Sep-13
Dec-13
Mar-14
Jun-14
Promoters
61.9
61.8
61.8
61.7
61.7
FIIs
26.0
27.5
29.2
29.6
29.8
DIIs
6.5
5.7
4.2
3.7
3.7
Private Corp
2.7
2.2
2.1
2.1
2.1
Public
2.9
2.7
2.7
3.0
2.8
PAT
EPS (Rs)
Emkay
India Equity Research | Oil & Gas

October 13, 2014
Result Update
Reliance Industries
Operationally inline; Maintain Buy
CMP
Target Price
Rs957.2
Rs1,168 ()
Rating
Upside
BUY ()
22.0 %
Change in Estimates
Result highlights
Results were marginally above our and street est. with PAT at Rs57.4bn as against our
est. at Rs56bn. While EBIDTA came at Rs82.3bn (as against our estimates of Rs80bn),
grew by 9.4% qoq
GRM came at $8.3/bbl vs $8.7/$7.7/bbl qoq/yoy, mainly due to weakness in light and mid
fibre intermediates and aromatics margin
With expected improvement of business profile in refining and petchem in the next 2
years, potential upsides from E&P and attractive valuations, we maintain Buy, with a
target price of Rs1168 (Roll over on FY17 SOTP)
NA
Previous Reco
Accumulate
Emkay vs Consensus
EPS Estimates
distillates cracks. KGD6 volume continued to decline to 12.5mmscmd vs.13.1mmscmd

qoq
Petchem EBIT surged by 27.5% qoq to Rs24bn, on back of strong rebound in polymers,
-4.4/ -0.4
FY15E
FY16E
Emkay
92.8
112.3
Consensus
90.6
110.0
Mean Consensus TP
Rs -1115
Stock Details
Bloomberg Code
RIL IN
Face Value (Rs)
10
Key Highlights of the quarter
3,234
52 Week H/L
Results marginally better than our estimates
1,145 /793
Results were marginally above our and street estimates with PAT at Rs57.4bn as against our
estimates of Rs56bn. While EBIDTA came marginally above our estimates by 2.4% to
Rs.82.3bn, as we had assumed lower GRM at $8.1/bbl (vs actual $8.3/bbl) and throughput at
17mnt (vs actual 17.3/mnt). And the same has been reflected at PAT level.
3,096 / 50.60
29,59,420
45.6
Improvement in Petchem margins negates the weakness in refining

performance
Promoters
45.26%
FIIs
19.46%
EBITDA for the quarter stood at Rs82.3bn, grew by 9.4% qoq, which was
largely due to improvement in petchem margins on the back of strong rebound
in polymers, fibre intermediates & aromatics margins. Thereby surging
Petchem EBIT up by 27.5% qoq to Rs24bn.
DIIs
11.32%
Public
23.96%
While refining GRM came at $8.3/bbl as against $8.7/bbl qoq mainly due to
weakness in light and mid distillates cracks. However, improvement in crude
differential offsets lower margin. Thereby which refining EBIT remain flat qoq to
Rs37.8bn.
(%)
However, E&P EBIT declined by 31.8% qoq to Rs.3.3bn, on the back of decline
in crude oil production from Panna-Mukta from to 2mnbbl to 1.8mnbbl while
Tapti field is in the natural state of decline. Also KGD6 production has declined
from 13.1mmscmd to 12.5mmscmd in Q2FY15.

(Rs mn)
FY13
FY14
FY15E
FY16E
FY17E
39,59,920
37,63,227
40,07,406
40,58,086
41,88,303
3,30,580
3,38,124
3,95,151
5,19,082
6,27,250
(6.2)
2.3
16.9
31.4
20.8
2,08,860
2,23,269
2,47,341
2,99,664
3,62,528
64.7
69.2
76.6
92.8
112.3
5.9
6.9
10.8
21.2
21.0
ROE (%)
15.1
14.3
14.0
14.9
15.6
P/E (x)
14.3
13.4
12.1
10.0
8.3
EV/EBITDA (x)
10.6
10.4
8.9
6.5
4.7
2.0
1.8
1.6
1.4
1.2
Net Sales
EBITDA
EBITDA (yoy %)
APAT
EPS (Rs)
EPS (% chg)
P/BV (x)
Price Performance
1M
3M
6M
12M
Absolute
-9
-8
-2
13
Rel. to Nifty
-8
-12
-17
-17

1150
Rs
1070
990
-2
910
-8
830
-14
750
Oct-13
Dec-13
Feb-14
Apr-14
Reliance Industries (LHS)
Jun-14
Aug-14
-20
Oct-14
Rel to Nifty (RHS)
Source: Bloomberg
10
Reliance Industries (RIL IN)
Exhibit 1: Quarterly Financials

Rs mn
Q2FY14
Q3FY14
Q4FY14
Q1FY15
Q2FY15
YoY (%)
QoQ (%)
1HFY15
1HFY14
YoY (%)
Revenue
1037580
1035210
951930
963510
964860
-7.0
0.1
1928370
1914030
0.7
959090
958990
868620
888210
882510
-8.0
-0.6
1770720
1764790
0.3
91.8
92.2
-9.4
-0.7
1605730
1616710
83.3
84.5
17070
Expenditure
as % of sales
92.4
92.6
91.2
92.2
91.5
882960
887060
798720
805620
800110
as % of sales
85.1
85.7
83.9
83.6
82.9
Employee Cost
8080
7150
9480
9290
9320
Consumption of RM
as % of sales
-0.7
15.3
0.3
18610
9.0
1.0
0.9
7.4
-0.3
146380
131010
7.6
6.8
157650
149240
5.6
-2.7
0.8
0.7
1.0
1.0
1.0
68050
64780
60420
73300
73080
6.6
6.3
6.3
7.6
7.6
EBITDA
78490
76220
83310
75300
82350
4.9
9.4
Depreciation
22330
21430
22750
20240
22270
-0.3
10.0
42510
43710
EBIT
56160
54790
60560
55060
60080
7.0
9.1
115140
105530
9.1
Other Income
20600
23050
20360
20460
21400
3.9
4.6
41860
45950
-8.9
-33.0
Other expenditure
as % of sales
Interest
11.7
8050
7920
7990
3240
7580
-5.8
134.0
10820
16150
PBT
68710
69920
72930
72280
73900
7.6
2.2
146180
135330
8.0
Total Tax
13810
14810
16620
15790
16480
19.3
4.4
32270
26910
19.9
Adjusted PAT
54900
55110
56310
56490
57420
4.6
1.6
113910
108420
5.1
54900
55110
56310
56490
57420
4.6
1.6
113910
108420

APAT after MI
5.1
Reported PAT
54900
55110
56310
56490
57420
4.6
1.6
113910
108420
5.1
Reported EPS
17
17
17.4
17.5
17.7
4.1
1.1
35.2
33.6
4.8
(bps)
(bps)
Margins (%)
(bps)
EBIDTA
7.6
7.4
8.8
7.8
8.5
97
72
8.2
7.8
37.8
EBIT
5.4
5.3
6.4
5.7
6.2
81
51
6.0
5.5
45.7
EBT
6.6
6.8
7.7
7.5
7.7
104
16
7.6
7.1
51.0
PAT
Effective Tax rate
5.3
5.3
5.9
5.9
6.0
66
5.9
5.7
24.3
20.1
21.2
22.8
21.8
22.3
220
45
22.1
19.9
219.1
Sequential improvement in Subsidiaries performance

RILs retail business revenues improved 4.2% qoq to Rs41.7bn, with EBIT at Rs.1bn vs
Rs0.81bn in Q1FY15. While shale gas revenues declined by 9.6% qoq to $244mn due to
softening gas prices from US$6.5/mcfe to $5.69/mcfe, which impacted realization. However
EBIDTA came flat qoq to $202mn on the back of lower opex across the JV. Cumulative
investments in shale gas stood at $7.7bn across JVs. Substantial part of Pioneer and Carrizo JV
capex met through cash from respective JV operations. While Chevron JV continues to account
for substantial part of ongoing capex and funding needs.
Exhibit 2: Consolidated debt break up
Rs. Bn
RIL Standalone
840
Shale Gas
330
RIL Jio
200
Recron Malaysia
15
Retail
20
Others
Total
16
1421
Source: Company
Revised estimates
We have tweaked our estimates on the back of 1) delay in gas price hike 2) declining KG D6
production and 3) currency assumption
Exhibit 3: Revised Estimates
FY15E
Rs. Bn
FY16E
Old
New
% Chg
Old
New
% Chg
3852.0
4007.4
4.0
3882
4058.1
4.5
408.0
395.2
-3.1
514
519.1
1.0
10.6
9.9
-7.0
13.2
12.8
-3.1
PAT
259.0
247.3
-4.5
301
299.7
-0.4
EPS
80.4
76.6
-4.5
93.1
92.8
-0.4
Net Sales
EBIDTA
EBIDTA %
Outlook and Valuation

RILs decent performance during the quarter has largely been the result of better performance
in petchem segment. However on margin front, we dont see much improvement/sustained
recovery in GRM. We maintain our weak/stable outlook on the refining cycle for the near term
on the back of a higher incremental new capacity compared to incremental demand. The
incremental net refining capacity additions are expected to be 1.7mbpd in the current year as
against demand growth of 1mbpd.
However, in petchem, it is too early to expect a sustained recovery in demand and margins. In
the case of petchem, demand remains a concern. Any weakness in demand could impact a
sustained margin recovery.
Gas production from the KG basin is expected to increase in the coming quarters from MA field
(D26; part of KGD6). However, incremental production from other fields, mainly R-series,
Satellite Field, etc. is expected by 2016, but would be subject to regulatory approvals and clarity
in gas price which is the key trigger for RIL stock price performance.
However, with the expected improvement in RILs business profile in the next 2 years, potential
upsides from positive developments in E&P and attractive valuations, we maintain an Buy rating
on the stock, with a target price of Rs1168(on FY17 SOTP). Currently, the stock trades at the
FY17E PE multiple of 8.9x and 1.3x P/BV.
Exhibit 4: E&P Status Sep14
Field
E&P Status
KG D6
D1 - D3
MJ
D34 (R-Series: R1,
AR2, AS1)
Results of initial interventions (water shut off jobs) in D1- D3 field not as per expectation. Revival actions in these
wells are being considered post commissioning of OTBC. Currently intervention activities being planned in the D1D3 field include side track and substitute well(s). Based on successful side track in MA6H well, side track options
are being considered in other MA field wells
Appraisal period available up to May16. Successful appraisal of North segment by well MJ-A1 encounter
hydrocarbon. Drilling of third appraisal well MJ-A3 is under way to appraise southern portion of central segment.
Expects reserves clarity by next year.
FEED and Geo-mechanical studies completed. Contracting activity underway for the long lead items, EPIC and
deepwater rig. Clarity on gas price required for FID
Satellite Field
NEC-25
DST proposal submitted waiting for Government directions
CBM Sohagpur (E & W)
Phase 1 development on track - more than 60% of project activity completed. First gas by 2H 2015
PMT
Tapti
Abandonment activity process in Tapti field underway Concept selection and FEED planned
Panna-Mukta
Work-overs planned in Panna-Mukta fields to arrest decline. MB Development - rig contract in place, drilling to
commence during 2015, EPIC execution underway first oil expected by 1Q FY16
Mukta B Development
Rig contract in place, drilling to commence during 2015, EPIC execution underway first oil expected by 1Q FY16
CY 5
Appraisal program submitted, under discussion with DGH

Exhibit 5: Segmental breakup
Petrochem
% QoQ
% YoY
Q2FY14
Q3FY14
Q4FY14
Q1FY15
Q2FY15
248920
252800
243430
237150
249320
13.4
1.6
-3.7
-2.6
5.1
12.8
14.6
9.9
8.0
0.2
25040
21240
20960
18850
24030
% QoQ
32.6
-15.2
-1.3
-10.1
27.5
% YoY
43.9
9.7
10.6
-0.2
-4.0
% Margin
10.1
8.4
8.6
7.9
9.6
Refining
974560
954320
872640
909980
917810
19.6
-2.1
-8.6
4.3
0.9
EBIT
% QoQ
% YoY
16.2
10.1
12.1
11.7
-5.8
31740
31410
39540
37730
37880
% QoQ
7.6
-1.0
25.9
-4.6
0.4
% YoY
-9.9
-13.1
12.3
27.9
19.3
3.3
3.3
4.5
4.1
4.1
14640
17330
14170
15570
13800
% QoQ
0.7
18.4
-18.2
9.9
-11.4
% YoY
-35.0
-9.8
-11.3
7.1
-5.7
EBIT
3560
5400
3780
4870
3320
% QoQ
1.1
51.7
-30.0
28.8
-31.8
% YoY
EBIT
% Margin
Oil and Gas
-58.9
-8.5
-17.8
38.4
-6.7
% Margin
24.3
31.2
26.7
31.3
24.1
Others
3300
2090
3940
1930
2210
% QoQ
-46.4
-36.7
88.5
-51.0
14.5
% YoY
96.4
18.8
9.7
-68.7
-33.0
EBIT
420
940
1990
520
660
% QoQ
-50.0
123.8
111.7
-73.9
26.9
% YoY
-40.8
22.1
314.6
-38.1
57.1
12.7
45.0
50.5
26.9
29.9
60760
58990
66270
61970
65890
% Margin
Total EBIT
Exhibit 6: Petchem production

('000 tonnes)
Q2FY14
Q3FY14
Q4FY14
Q1FY15
Q2FY15
Polymers
1200000
1100000
1100000
1082000
1132000
-5.7
YoY (%)
9.0
0.2
0.0
-1.6
QoQ (%)
9.1
-8.3
0.0
-1.6
4.6
407300
381700
400000
455000
488000
-3.0
4.6
-7.0
10.7
19.8
Polyesters
YoY (%)
QoQ (%)
-0.9
-6.3
4.8
13.8
7.3
1200000
1300000
1100000
1156000
1235000
YoY (%)
0.0
8.3
-8.3
5.1
2.9
QoQ (%)
9.1
8.3
-15.4
5.1
6.8
Polyesters intermediates
Source: Company
75
%
12.0
Q1FY15
Q3FY14
Q1FY14
Q3 FY13
Q1 FY13
Q3 FY12
Q1FY12
Q3FY11
Q1FY11
Refinery thruput (LHS)
Capacity utilisation (RHS)
Exhibit 9: RIL GRM trend vs Singapore GRM
Exhibit 10: Segmental EBIT margins (%)
12
10
(%)
$/bbl
8
6
4
2
20
50
15
40
30
10
20
10
(%)
10
2QFY15
15 14 12 14 13 13
1QFY15
19
20
100
4QFY14
24
16.0
3QFY14
30
29
2QFY14
32
1QFY14
36
4QFY13
41
40
3QFY13
45
125
2QFY13
50
20.0
1QFY13
51 50
4QFY12
55
3QFY12
59 58
2QFY12
(mmscmd)
60
1QFY12
70
Exhibit 8: Refining throughput and Utilization trend
Mn Tonn
Exhibit 7: KG D6 Production trend
0
-2
Difference
RIL GRM
Singapore GRM
Petrochem (LHS)
Refining(LHS)
Oil & Gas(RHS)
Exhibit 11: Segmental EBIT share (%)
Petrochem
Refining
E&P
Q2FY15
Q1FY15
Q4FY14
Q3FY14
Q2FY14
Q1FY14
Q4FY13
Q3FY13
Q2FY13
Q1FY13
120.0
100.0
80.0
60.0
40.0
20.0
0.0
Others

Income Statement
Y/E Mar (Rs mn)
FY13
FY14
FY15E
FY16E
FY17E
Net Sales
39,59,920
37,63,227
40,07,406
40,58,086
41,88,303
Expenditure
36,29,340
34,25,103
36,12,255
35,39,004
35,61,053
EBITDA
3,30,580
3,38,124
3,95,151
5,19,082
6,27,250
Depreciation
1,11,040
97,995
1,08,766
1,33,794
1,72,948
EBIT
2,19,540
2,40,129
2,86,385
3,85,288
4,54,302
76,720
69,984
55,632
50,011
69,366
Other Income
Interest expenses
PBT
Tax
Extraordinary Items
34,090
28,475
29,813
29,182
27,881
2,62,170
2,81,637
3,12,205
4,06,117
4,95,787
53,310
58,369
64,864
1,06,453
1,33,259
Reported Net Income
2,08,860
2,23,269
2,47,341
2,99,664
3,62,528
Adjusted PAT
2,08,860
2,23,269
2,47,341
2,99,664
3,62,528
FY16E
FY17E
Balance Sheet
Y/E Mar (Rs mn)
FY13
FY14
FY15E
29,360
29,360
29,360
29,360
29,360
Reserves & surplus
14,36,000
16,31,880
18,51,832
21,24,106
24,59,245
Net worth
14,65,360
16,61,240
18,81,192
21,53,466
24,88,605
Loan Funds
9,35,040
7,25,522
7,30,813
6,94,207
6,66,175
1,15,880
1,21,186
1,27,083
1,34,180
1,43,064
25,16,280
25,07,948
27,39,088
29,81,853
32,97,844
9,70,440
9,30,909
8,42,143
9,55,021
12,03,723
Minority Interest
Total Liabilities
Net block
Investment
Current Assets
Cash & bank balance
2,81,650
2,81,650
2,81,650
2,81,650
2,81,650
14,97,546
13,05,262
13,59,441
14,86,547
18,96,357
7,02,095
3,74,019
4,30,601
5,69,624
9,71,847
7,83,890
7,97,056
8,28,946
8,22,923
8,31,930
Net current assets
7,13,656
5,08,206
5,30,495
6,63,624
10,64,427
25,16,280
25,07,948
27,39,338
29,82,103
32,98,094
Misc. exp
Total Assets
Cash Flow
Y/E Mar (Rs mn)
FY13
FY14
FY15E
FY16E
FY17E
1,85,450
2,11,653
2,56,572
3,56,106
4,26,421
(76,720)
(69,984)
(55,632)
(50,011)
(69,366)
Chg in working cap
1,47,365
(15,350)
(11,075)
12,991
10,305
Operating Cashflow
4,38,665
2,64,099
3,13,315
4,18,523
4,95,411
Capital expenditure
(3,33,180)
(3,46,378)
(3,17,617)
(2,43,431)
(88,136)
Free Cash Flow
1,05,485
(82,279)
(4,302)
1,75,092
4,07,276
Investments
(53,870)

Investing Cashflow
Financing Cashflow
(1,280)
(3,11,610)
(2,76,394)
(2,61,984)
(1,93,419)
(18,769)
(430)
1,08,690
(2,09,518)
5,291
(36,606)
(28,032)
30,750
27,389
27,389
27,389
27,389
(95,370)
(54,472)
(48,881)
(47,681)
(45,894)
9,550
(2,65,076)
(46,014)
(86,080)
(74,418)
Net chg in cash
1,36,605
(2,77,371)
5,317
1,39,023
4,02,223
5,65,490
6,51,390
4,25,284
4,30,601
5,69,624
7,02,095
3,74,019
4,30,601
5,69,624
9,71,847
Key Ratios
Profitability (%)
EBITDA Margin
EBIT Margin
FY14
FY15E
FY16E
FY17E
8.3
9.0
9.9
12.8
15.0
5.5
6.4
7.1
9.5
10.8
20.3
20.7
20.8
26.2
26.9
5.3
5.9
6.2
7.4
8.7
ROCE
12.4
12.3
13.0
15.2
16.7
ROE
15.1
14.3
14.0
14.9
15.6
RoIC
19.6
23.5
29.3
38.7
38.7
FY13
64.7
FY14
69.2
FY15E
76.6
FY16E
92.8
FY17E
112.3
CEPS
99.1
99.5
110.3
134.3
165.9
BVPS
454.0
514.6
582.8
667.1
770.9
8.1
7.3
7.3
7.3
7.3
FY13
FY14
FY15E
FY16E
FY17E
14.7
13.7
12.4
10.2
8.5
P/CEPS
9.6
9.5
8.6
7.1
5.7
P/BV
2.1
1.8
1.6
1.4
1.2
EV / Sales
0.7
0.8
0.9
0.8
0.8
EV / EBITDA
7.4
10.1
10.0
8.5
6.1
Dividend Yield (%)
0.9
0.8
0.8
0.8
0.8
Gearing Ratio (x)
FY13
0.6
FY14
0.4
FY15E
0.4
FY16E
0.3
FY17E
0.3
Effective Tax Rate

Net Margin
Per Share Data (Rs)

EPS
DPS
Valuations (x)
PER
Net Debt/ Equity

Net Debt/EBIDTA
Growth (%)
0.8
0.9
0.8
0.8
0.7
-8.3
-5.4
-3.4
-3.3
-2.9
FY17E
FY13
FY14
FY15E
FY16E
Revenue
10.6
(5.0)
6.5
1.3
3.2
EBITDA
(6.2)
2.3
16.9
31.4
20.8
EBIT
(4.4)
9.4
19.3
34.5
17.9
PAT
5.9
6.9
10.8
21.2
21.0
Quarterly (Rs mn)

Revenue
EBITDA
EBITDA Margin (%)
PAT
EPS (Rs)

Promoters
Q2FY14
Q2FY14
Q4FY14
Q1FY15
Q2FY15
10,37,580
10,37,580
9,51,930
9,63,510
9,64,860
78,490
78,490
83,310
75,520
82,350
7.6
7.6
8.8
7.8
8.5
54,900
54,900
56,310
56,710
57,420
17.0
17.0
17.4
17.5
17.7
Sep-13
Dec-13
Mar-14
Jun-14
Sep-14
45.3
45.3
45.3
45.29
45.26
FIIs
17.69
18.26
18.61
19.91
19.46
Institutions
11.84
11.46
11.24
10.93
11.32
4.38
4.27
4.06
3.71
3.72
21.74
21.46
21.41
20.53
20.65
Private Corp
Public
FY13
Emkay Rating Distribution

BUY
ACCUMULATE
HOLD
REDUCE
SELL
Expected total return (%) (Stock price appreciation and dividend yield) of over 25% within the next 12-18 months.
Expected total return (%) (Stock price appreciation and dividend yield) of over 10% within the next 12-18 months.
Expected total return (%) (Stock price appreciation and dividend yield) of upto 10% within the next 12-18 months.
Expected total return (%) (Stock price depreciation) of upto (-) 10% within the next 12-18 months.
The stock is believed to underperform the broad market indices or its related universe within the next 12-18 months.

CIN - L67120MH1995PLC084899
7th Floor, The Ruby, Senapati Bapat Marg, Dadar - West, Mumbai - 400028. India
Tel: +91 22 66121212 Fax: +91 22 66121299 Web: www.emkayglobal.com
Disclaimer: Emkay Global Financial Services Limited and its affiliates are a full-service, brokerage, investment banking, investment management, and financing group. We along with our affiliates are
participants in virtually all securities trading markets in India. Our research professionals provide important input into our investment banking and other business selection processes. Investors may assume
that Emkay Global Financial Services Limited and/or its affiliates may seek investment banking or other business from the company or companies that are the subject of this material and that the research
professionals who were involved in preparing this material may participate in the solicitation of such business. Our salespeople, traders, and other professionals may provide oral or written market commentary
or trading strategies to our clients that reflect opinions that are contrary to the opinions expressed herein, and our proprietary trading and investing businesses may make investment decisions that are
inconsistent with the recommendations expressed herein. In reviewing these materials, you should be aware that any or all of the foregoing, among other things, may give rise to real or potential conflicts of
interest. Additionally, other important information regarding our relationships with the company or companies that are the subject of this material is provided herein. This report is not directed to, or intended
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Stock Update

Retail Advisory Team

Your success is our success

October 22, 2014

January 06, 2010 | 1

India Equity Research | Others

Your success is our success

Focus on Search Plus Plaftorm

EPS Chg FY15E/FY16E (%)

Target Price change (%)

Face Value (Rs)

Shares outstanding (mn)

M Cap (Rs bn/USD bn)

Daily Avg Volume (nos.)

Daily Avg Turnover (US$ mn)

Shareholding Pattern Jun '14

Financial Snapshot (Consolidated)

Rel. to Nifty (3)

Relative price chart

EBITDA Margin (%)

Just dial ltd (LHS)

Rel to Nifty (RHS)

Source: Company, Emkay Research

Emkay Global Financial Services Ltd.

Just Dial (JUST IN)

India Equity Research | Result Update

Key highlights of the results conference call

JD plans to launch a full-fledged advertisement campaign for Search Plus platform in Q4

Exhibit 1: Quarterly summary

QoQ (%) YTD FY14 YTD FY15

Effective Tax rate

Avg. Realisation/Campaign/Month (Rs.)

Paid Campaigns (Nos.)

Source: Company, Emkay Research

Emkay Research | October 21, 2014

Just Dial (JUST IN)

India Equity Research | Result Update

Key Financials (Consolidated)

Reported Net Income

Equity share capital

Reserves & surplus

Net deferred tax liability

Cash & bank balance

Other Current Assets

Current liabilities & Provision

Net current assets

Chg in working cap

PBT (Ex-Other income) (NI+Dep)

Equity Capital Raised

Loans Taken / (Repaid)

Dividend paid (incl tax)

Other Financing Cash Flow

Opening cash position

Closing cash position

Emkay Research | October 21, 2014

Just Dial (JUST IN)

India Equity Research | Result Update

Effective Tax Rate

Per Share Data (Rs)

Dividend Yield (%)

Gearing Ratio (x)

Net Debt/ Equity

Working Cap Cycle (days)