ValueGuide Aug2019

ValueGuide
August 2019
Intelligent Investing Regular Features Products & Services Trader’s Edge
Stock Updates Report Card PMS Technical View

Viewpoints Earnings Guide MF Picks Currencies
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CONTENTS
From the Editor’s Desk EQUITY

The dove soared high FUNDAMENTALS
yet again on August 6. REGULAR FEATURES
Mint Street reduced the Stock Update 07 Report Card 04
benchmark repo rate for Sector Update 25 Earnings Guide 40
the fourth consecutive
time by an unusual 35 bps
to a record low of 5.4%, TECHNICALS DERIVATIVES
noting that addressing Nifty 29 View 30
growth concerns assume the highest priority. ...
06 ADVISORY DESK DERIVATIVES

MID Trades 35 Derivatives Ideas 35
PMS DESK
ProPrime - Prime Picks 33
ProPrime - Diversified Equity 34 CURRENCY
FUNDAMENTALS
USD-INR 31 GBP-INR 31
EUR-INR 31 JPY-INR 31
MUTUAL FUND DESK

TECHNICALS
Top MF Picks (equity) 36
Top SIP Fund Picks 38 USD-INR 32 GBP-INR 32
EUR-INR 32 JPY-INR 32
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August
June 2017
2019
3 Sharekhan ValueGuide
REPORT CARD EQUITY FUNDAMENTALS
STOCK IDEAS STANDING (AS ON AUGUST 06, 2019)

CURRENT PRICE AS ON PRICE 52 WEEK ABSOLUTE PERFORMANCE RELATIVE TO SENSEX
COMPANY
RECO 06-AUG-19 TARGET HIGH LOW 1M 3M 6M 12M 1M 3M 6M 12M
Automobiles
Apollo Tyres Hold 152 162 278 144 -20.8 -21.5 -22.3 -43.9 -15.6 -18.7 -23.0 -43.6
Ashok Leyland Reduce 63 62 135 61 -24.1 -25.0 -20.0 -44.1 -19.1 -22.2 -20.7 -43.8
Bajaj Auto Reduce 2610 2530 3150 2400 -6.2 -11.9 -3.7 -0.8 0.0 -8.6 -4.5 -0.2
Gabriel India Hold 94 145 159 85 -13.2 -34.2 -35.0 -36.7 -7.5 -31.8 -35.6 -36.3
Hero MotoCorp Hold 2469 2550 3400 2226 -0.5 -1.3 -11.6 -22.7 6.0 2.3 -12.3 -22.3
M&M Hold 549 555 993 515 -13.2 -12.7 -19.8 -40.2 -7.5 -9.5 -20.5 -39.9
Maruti Suzuki Hold 5833 6075 9470 5446 -8.3 -13.1 -18.8 -36.6 -2.3 -9.9 -19.5 -36.2
TVS Motor Reduce 380 350 605 338 -10.6 -20.5 -22.1 -27.6 -4.7 -17.6 -22.8 -27.2
BSE Auto Index 15653 24959 15195 -10.8 -15.4 -17.9 -34.5 -4.9 -12.3 -18.6 -34.1
Banks & Finance
Axis Bank Buy 679 860 828 534 -15.8 -9.0 -6.3 13.9 -10.3 -5.7 -7.1 14.6
Bajaj Finance Buy 3272 3600 3762 1912 -11.9 8.0 20.9 21.6 -6.1 12.0 19.9 22.3
Bajaj Finserv Buy 7096 8000 8580 4955 -15.8 -7.4 14.3 2.6 -10.3 -4.1 13.3 3.2
Bank of Baroda Hold 104 120 158 91 -20.1 -10.2 -4.6 -30.8 -14.9 -6.9 -5.4 -30.4
Bank of India Hold 70 80 110 66 -25.6 -20.3 -23.9 -28.3 -20.7 -17.4 -24.6 -27.9
Federal Bank Buy 88 128 110 67 -16.8 -10.7 4.5 1.0 -11.3 -7.5 3.6 1.6
HDFC Buy 2190 2500 2358 1645 -3.2 12.3 11.2 11.7 3.2 16.4 10.2 12.4
HDFC Bank Buy 2189 2750 2498 1880 -11.3 -5.2 4.0 4.4 -5.5 -1.7 3.1 5.0
ICICI Bank Buy 410 550 444 295 -5.8 2.5 14.5 31.1 0.4 6.2 13.5 31.9
LIC Housing Finance Hold 484 500 587 388 -14.6 -0.2 5.3 -11.3 -9.0 3.4 4.4 -10.8
Max Financial Hold 413 480 525 344 -0.7 -2.6 10.2 -20.9 5.8 0.9 9.3 -20.4
Punjab National Bank Buy 68 85 100 58 -16.9 -21.2 -9.6 -24.5 -11.5 -18.3 -10.4 -24.1
SBI Buy 301 380 374 247 -18.7 -2.4 4.3 -2.3 -13.4 1.2 3.4 -1.7
Union Bank of India Reduce 66 62 100 61 -22.1 -21.9 -17.4 -27.6 -17.0 -19.0 -18.2 -27.2
Yes Bank Hold 85 ** 404 79 -3.2 -48.0 -51.0 -77.1 3.2 -46.1 -51.4 -77.0
BSE Bank Index 31695 35718 26992 -10.2 -4.0 3.5 1.3 -4.4 -0.5 2.6 1.9
Consumer goods
Britannia Buy 2551 3475 3472 2530 -9.2 -3.8 -19.4 -18.9 -3.2 -0.3 -20.1 -18.4
Emami Hold 314 393 588 246 3.4 -16.0 -21.1 -44.5 10.1 -12.9 -21.8 -44.2
GSK Consumer Hold 7504 7931 7948 6310 -2.3 9.8 -0.1 12.9 4.1 13.8 -1.0 13.6
Godrej Consumer Products Hold 622 650 979 585 -7.4 -1.8 -11.5 -28.0 -1.3 1.7 -12.2 -27.6
Hindustan Unilever Buy 1744 1990 1871 1477 -2.6 5.3 -4.0 2.1 3.7 9.1 -4.8 2.7
ITC Buy 259 325 323 253 -7.4 -14.1 -5.0 -12.6 -1.3 -10.9 -5.8 -12.0
Jyothy Laboratories Hold 156 180 228 143 -2.2 -10.3 -10.6 -28.7 4.2 -7.0 -11.3 -28.2
Marico Buy 378 425 397 283 -0.3 11.2 4.3 5.5 6.2 15.3 3.4 6.1
Zydus Wellness Buy 1517 1780 1980 1085 12.5 17.0 15.3 1.7 19.8 21.3 14.3 2.3
BSE FMCG Index 10943 12850 10498 -4.8 -4.4 -5.3 -8.4 1.4 -0.9 -6.1 -7.8
IT / IT services
HCL Technologies Buy 1024 1250 1190 920 0.8 -9.7 -2.8 7.7 7.4 -6.4 -3.6 8.4
Infosys Buy 774 840 804 597 7.9 9.3 2.9 17.3 14.9 13.3 2.0 18.0
Persistent Systems Hold 531 650 915 469 -14.9 -14.9 -18.9 -36.8 -9.3 -11.8 -19.6 -36.4
Tata Consultancy Services Buy 2215 2300 2293 1784 2.6 3.7 7.9 13.8 9.4 7.5 7.0 14.5
Wipro Hold 259 285 302 206 -4.8 -11.0 -7.3 24.9 1.5 -7.7 -8.1 25.7
BSE IT Index 15607 16301 13179 2.6 0.8 0.6 9.0 9.3 4.5 -0.3 9.7
Capital goods / Power
CESC Buy 753 905 813 621 -2.0 8.3 5.9 6.2 4.5 12.2 5.0 6.9
Finolex Cable Hold 370 515 630 356 -9.4 -11.1 -8.4 -38.5 -3.5 -7.8 -9.1 -38.1
Greaves Cotton Hold 118 155 165 111 -18.9 -20.7 1.6 -16.3 -13.6 -17.8 0.8 -15.8
Kalpataru Power Transmission Buy 470 590 555 267 -7.7 1.7 28.7 23.5 -1.6 5.4 27.6 24.3
KEC International Buy 301 375 341 230 -8.1 2.9 20.9 -6.1 -2.1 6.6 19.8 -5.6
PTC India Hold 55 75 94 53 -16.2 -19.9 -28.8 -31.4 -10.7 -17.0 -29.4 -31.0
Thermax Hold 1063 1075 1198 873 2.4 10.6 -0.7 -8.8 9.1 14.6 -1.6 -8.3
Triveni Turbine Hold 100 115 130 81 -2.8 -4.4 -2.4 -11.6 3.6 -1.0 -3.3 -11.0
V-Guard Industries Buy 228 280 252 159 -5.5 7.2 19.8 8.1 0.7 11.1 18.8 8.8
Va Tech Wabag Hold 269 300 413 243 -14.1 -1.1 -7.3 -28.3 -8.5 2.5 -8.1 -27.8
August 2019 4 Sharekhan ValueGuide

EQUITY FUNDAMENTALS REPORT CARD
STOCK IDEAS STANDING (AS ON AUGUST 06, 2019)
CURRENT PRICE AS ON PRICE 52 WEEK ABSOLUTE PERFORMANCE RELATIVE TO SENSEX
COMPANY
RECO 06-AUG-19 TARGET HIGH LOW 1M 3M 6M 12M 1M 3M 6M 12M
BSE Power Index 1906 2159 1727 -8.0 -2.9 5.8 -1.7 -2.0 0.6 4.9 -1.1
BSE Capital Goods Index 17343 20387 16113 -11.1 -2.1 2.0 -3.4 -5.2 1.4 1.1 -2.8
Infrastructure / Real estate
IRB Infra Buy 96 150 207 84 2.0 -20.3 -25.8 -53.1 8.7 -17.4 -26.4 -52.9
Larsen & Toubro Buy 1378 1765 1607 1183 -10.5 3.2 6.2 9.5 -4.6 6.9 5.2 10.2
Sadbhav Engineering Buy 128 285 308 115 -42.6 -46.0 -32.3 -55.2 -38.8 -44.0 -32.9 -54.9
CNX Infra Index 3071 3453 2778 -8.6 -1.2 5.8 -0.8 -2.6 2.4 4.8 -0.2
BSE Real estate Index 2025 2277 1535 -6.4 1.2 16.2 -1.6 -0.3 4.9 15.1 -1.0
Oil & gas
Oil India Ltd Buy 154 230 227 149 -11.0 -14.9 -5.5 -23.9 -5.2 -11.8 -6.3 -23.4
Petronet LNG Buy 232 270 255 200 -6.7 -1.2 5.7 6.0 -0.6 2.5 4.8 6.6
Reliance Ind Buy 1128 1630 1418 1016 -10.2 -18.1 -13.4 -4.9 -4.3 -15.1 -14.2 -4.3
Selan Exploration Technology Hold 143 250 278 138 -15.7 -17.8 -11.5 -26.8 -10.2 -14.8 -12.3 -26.4
BSE Oil and gas Index 12808 15930 12040 -11.5 -15.9 -5.6 -12.7 -5.7 -12.9 -6.4 -12.2
Pharmaceuticals
Aurobindo Pharma Hold 562 710 838 537 -5.9 -27.8 -25.9 -9.7 0.3 -25.2 -26.6 -9.2
Cadila Healthcare Hold 226 290 433 216 0.4 -25.3 -27.8 -39.6 7.0 -22.6 -28.4 -39.2
Cipla Buy 500 650 678 476 -8.5 -10.7 -6.0 -20.8 -2.6 -7.5 -6.8 -20.3
Divi's Labs Buy 1616 1850 1775 1080 0.3 -4.6 -2.3 36.5 6.9 -1.2 -3.1 37.4
Glenmark Pharmaceuticals Hold 415 595 712 405 -3.6 -33.5 -35.3 -30.5 2.7 -31.0 -35.9 -30.1
IPCA Lab Buy 949 1135 1046 590 0.3 -0.2 26.9 23.9 6.9 3.4 25.8 24.7
Lupin Reduce 751 ** 986 697 2.7 -12.9 -10.3 -13.4 9.4 -9.7 -11.0 -12.9
Sun Pharmaceutical Industries Hold 418 460 679 345 11.4 -7.7 0.4 -27.2 18.7 -4.4 -0.5 -26.7
Torrent Pharma Hold 1672 1720 1964 1452 9.6 -2.8 -6.8 2.3 16.8 0.7 -7.6 2.9
BSE Health Care Index 12506 16497 12347 -1.3 -10.9 -9.4 -13.8 5.1 -7.7 -10.2 -13.3
Building materials
Grasim Buy 762 1160 1093 689 -17.9 -15.1 3.8 -23.4 -12.5 -12.0 2.9 -22.9
Shree Cement Hold 20206 22130 22400 13100 -5.3 2.4 26.3 16.1 0.9 6.1 25.2 16.8
The Ramco Cements Buy 736 870 845 546 -5.0 -4.2 22.0 9.7 1.3 -0.7 21.0 10.3
UltraTech Cement Buy 4357 5000 4905 3260 -3.4 -3.3 24.4 4.6 2.9 0.2 23.4 5.2
Discretionary consumption
Arvind* Hold 54 66 149 52 -15.8 -31.4 -33.0 -62.1 -10.3 -28.9 -33.6 -61.9
Century Plyboards (India) Hold 115 190 249 112 -31.0 -31.9 -29.3 -52.4 -26.5 -29.5 -30.0 -52.2
Info Edge (India) Hold 2151 2350 2444 1311 -4.6 8.5 24.0 54.4 1.6 12.4 22.9 55.3
Inox Leisure Buy 284 390 383 188 -11.5 -7.6 7.0 32.1 -5.7 -4.2 6.1 32.9
Kewal Kiran Clothing Ltd Hold 977 1155 1560 925 -14.5 -24.6 -15.1 -30.8 -9.0 -21.9 -15.8 -30.3
Orbit Exports Hold 100 177 163 85 -16.5 -13.2 -2.4 -32.7 -11.1 -10.1 -3.2 -32.3
Relaxo Footwear# Buy 429 508 499 332 -3.2 -2.4 18.0 4.2 3.1 1.1 17.0 4.9
Titan Company Limited Buy 1038 1260 1341 732 -17.7 -2.9 -0.7 16.6 -12.3 0.6 -1.6 17.3
Wonderla Holidays Hold 244 338 376 232 -10.4 -21.2 -14.7 -27.3 -4.5 -18.4 -15.4 -26.9
Zee Entertainment Hold 312 400 541 288 -8.8 -18.6 -18.7 -39.7 -2.8 -15.6 -19.4 -39.3
Diversified / Miscellaneous
Bajaj Holdings Buy 3447 3924 3800 2204 -3.4 9.4 16.2 16.7 2.9 13.4 15.2 17.5
Bharat Electronics Buy 97 140 124 73 -10.6 9.9 20.6 -17.1 -4.7 13.9 19.5 -16.6
Bharti Airtel Buy 368 390 375 254 1.0 10.5 30.0 4.9 7.6 14.5 28.8 5.5
Gateway Distriparks Hold 103 140 191 96 -19.0 -18.2 -2.0 -40.3 -13.7 -15.3 -2.9 -39.9
PI Industries Buy 1089 1280 1230 676 -7.5 3.6 29.6 43.2 -1.5 7.3 28.5 44.0
Ratnamani Metals and Tubes Buy 930 1150 1035 736 -5.2 7.3 10.9 10.3 1.0 11.2 10.0 11.0
Supreme Industries Limited Hold 1053 1200 1275 936 -4.9 -1.6 6.6 -10.5 1.3 2.0 5.7 -9.9
UPL# Hold 549 656 709 388 -17.5 -12.6 3.1 28.2 -12.1 -9.4 2.2 28.9
BSE500 Index 14128 15938 13287 -7.3 -5.8 -1.4 -7.1 -1.3 -2.3 -2.3 -6.6
CNX500 Index 8919 10050 8371 -7.4 -5.8 -1.4 -6.9 -1.3 -2.4 -2.2 -6.4
CNXMCAP Index 15804 20088 15298 -9.5 -8.3 -4.7 -16.7 -3.6 -5.0 -5.5 -16.2
** Price under review * Reco price adjusted for demerger # Reco price adjusted for bonus ^ Reco price adjusted for stock split

From the Editor’s Desk
From the Editor’s Desk Bitter Pill
The dove soared high yet again on August 6. Mint Street reduced the benchmark repo rate
for the fourth consecutive time by an unusual 35 bps to a record low of 5.4%, noting that
addressing growth concerns assume the highest priority. Though the Reserve Bank of India
(RBI) is thus going all guns on growth, the markets refused to be cheered by the rate cut. The
steep increase in tax surcharge on FPI (Foreign portfolio Investment) investors that the FM
introduced have sent the markets into a tizzy, wiping off almost Rs. 12-13 lakh crore of investor
wealth since the Budget. The Sensex and Nifty slipped as a result.
However, some relief may be around the corner, with news that the government might
contemplate introducing some measures to ease steep tax increase for FPIs. The move may
provide some boost to the market sentiments, which already dropped close to 5-6% in July.
The RBI’s statement on August 6 also outlined some other relief measures. The central bank
outlined some key measures to boost credit growth and lift the pressure on NBFCs. It has
reduced risk weights on consumer credit and allowed banks a greater exposure of to single
NBFCs. Further, government expenditure would continue to provide some support for growth.
Also, bank lending to NBFCs for agricultural and SME advances would get the ‘priority-sector’
tag. These are baby steps but would lead to some green shoots of confidence even as the
crises around NBFCs have a long way to go before settling down.
News on the macro front is mixed with monsoon seen improvement and crude is softening
further. However, globally, the effects of escalating trade tensions between the US and China
and uncertainty around the Brexit could keep market on tenterhooks.
In this scenario, the focus shifts to corporate earnings. Though Q1 earnings have been mixed,
there have been some pockets of positivity as well. Overall, though challenges persist for the
markets in the medium term, we remain constructive on equities for an investment horizon of
3-5 years. Indian stock markets look relatively attractive on a market cap-to-GDP basis and
some of the positive steps taken by the government in recent times would help the economy
recover gradually in the coming months. Though even some blue-chip stocks corrected sharply,
we believe that investors should take this volatility as an opportunity to invest in high-quality
stocks with a strong earnings outlook.

EQUITY FUNDAMENTALS Stock Update
Recommendation Reco Price Price Target/ Upside (%)
Date Company Report Type
Latest Chg (Rs.) Latest Chg
July 01, 2019 Godrej Consumer Products Stock Update HOLD  669 734 
Summary
• We maintain our Hold recommendation on Godrej Consumer Products (GCPL) with an unchanged PT of Rs. 734.
• Multiple headwinds, slowdown in rural market, price cuts in key soap brand and softening demand for household insecticides.
• Company likely to record subdued numbers for yet another quarter in Q1FY2020 (despite recovery in African and Indonesian
businesses).
• Adequate steps undertaken for revival of key domestic categories will show desired results gradually (likely in H2FY2020).
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/GCPL-July01_19.pdf
July 01, 2019 CESC Stock Update BUY  784 905 
Summary
• We maintain our Buy rating on CESC Limited (CESC) with a revised SoTP-based PT of Rs. 905.
• Turnaround of Dhariwal Infrastructure and moderation of losses at distribution franchisee to improve earnings outlook.
• Standalone business to clock steady earnings and cashflows.
• Valuation at 9x FY2021E EPS and 0.9x FY2021E book value seems attractive.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/CESC-July01_19.pdf
July 03, 2019 Sadbhav Engineering Stock Update BUY  244 285 
Summary
• Sadbhav Engineering Limited (SEL) has offloaded nine assets to IndInfravit Trust at an EV of Rs. 6612 crore and equity value of
Rs. 2550 crore valuing it at 1.7x P/B.
• The deal to de-consolidate net debt of Rs. 4060 crore in SIPL, Rs. 1900 crore cash inflow, 10% stake in IndInfravit trust, Rs. 4000
crore O&M contract and platform for future project divestment.
• The debt to more than halve in standalone SEL and SIPL leading to further capacity in bidding for upcoming BOT and HAM
projects.
• We maintain our Buy rating on SEL with an unchanged price target of Rs. 285.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/SadbhavEngg-July03_19.pdf
July 09, 2019 Tata Consultancy Services Stock Update BUY  2,131 2,300 
Summary
• We maintain our Buy rating on TCS with an unchanged PT of Rs. 2,300.
• We remain positive on TCS, given strong deal wins with increasing TCVs, healthy deal pipeline and robust digital growth.
• TCS reported lower-than-expected CC revenue growth of 10.6% y-o-y; however, margins remained a tad below our estimates.
• Digital, with an annual run-rate of $7 billion+, continued to show strong growth momentum, grew by 42.1% y-o-y.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/TCS-July09_19.pdf
Upgrade  No change  Downgrade 

Note: The arrow indicates change in call and price target, if any, vis-à-vis the previous report

Stock Update EQUITY FUNDAMENTALS

July 11, 2019 Ashok Leyland Stock Update REDUCE  85 76 
Summary
• We downgrade Ashok Leyland (ALL) to Reduce from Hold with a PT of Rs 76.
• After five consecutive years of strong demand, ALL MHCV sales fell by 13% in Q1FY2020.
• Slowdown in manufacturing, consumption and drop in agri output impacted; we expect weakness to deepen and volumes to
fall by 8% over next two years.
• Operating deleverage, higher discounts and expiry of fiscal incentives would lead to 26% CAGR earnings drop over FY19-21.
We have cut our FY20 and FY21 earnings estimates by 16% and 36%.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/AshokLeyland-July11_19.pdf
July 12, 2019 Infosys Stock Update BUY  727 840 
Summary
• We maintain our Buy rating on Infosys with an unchanged price target of Rs. 840.
• Revenue in-line for the quarter, with acceleration in y-o-y growth (12.4%) in constant currency (CC) terms.
• EBIT margin declines on a q-o-q basis to 20.5%, above our estimates, owing to rupee appreciation and wage revision.
• Raised revenue growth guidance to 8.5-10.0% in CC from 7.5-9.5% earlier, better-than our expectation of keeping guidance flat.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Infosys-July12_19.pdf
July 12, 2019 IndusInd Bank Viewpoint POSITIVE  1,510 10-12 
Summary
• We maintain our Positive view on the stock with an upside potential of 10-12%.
• For Q1FY20, the standalone performance of IndusInd Bank (IIB) indicates a stable operational performance, however, due
to balance sheet expansion (due to merger) optically operational performance appears strong With stable asset quality
performance that remained under control, market apprehensions are quelled for now, though asset quality will remain a key
monitorable.
• Merger synergies and probable capital infusion will be positive levers for NIM/ROE going forward.
Read report - https://www.sharekhan.com/MediaGalary/Equity/IndusIndBank-July12_19.pdf
July 12, 2019 Aarti Industries Viewpoint POSITIVE  1,673 17-19 
Summary
• Aarti Industries Limited (AIL) remains among our top investment bets and we reiterate our Positive stance on the company with
a potential upside of 17-19%.
• The scheme of arrangement is likely to have a positive impact on earnings and this is expected to boost return ratios as well.
• Demerged loss-making home and personal care business into Arti Surfactants Limited through mirror shareholding.
• Merged profitable manufacturing arm of step-down subsidiary Nascent Chemicals Industries Limited into AIL.
Read report - https://www.sharekhan.com/MediaGalary/Equity/AartiIndustries-July12_19.pdf

July 15, 2019 GNA Axles Viewpoint POSITIVE  269 20-22 
Summary
• GNA’s Q1FY20 results are ahead of estimates, with topline growing by an impressive 21% y-o-y, led by a strong growth in export
business & contribution from new SUV business.
• GNA’s exports are on a strong footing with capacities booked fully till December 2019. Management has raised the FY2020
revenue growth guidance to 8-10% from 6-8% earlier.
• Recent foray in the SUV business provides a new growth avenue and would offset the impact of slowdown in tractors.
• Current P/E valuations of 8x FY2021 earnings and P/B of 1.1x FY2021 book value are lucrative. We retain our positive view on
the stock and expect an upside potential of 20-22%.
Read report - https://www.sharekhan.com/MediaGalary/Equity/GNA_Axles-July15_19.pdf
July 16, 2019 Federal Bank Stock Update BUY  107 128 
Summary
• Federal Bank (FEDBK) posted mixed results for Q1FY2020.
• We believe present valuation and improving business mix and well managed growth are positive factors.
• Asset quality overhangs present but small (exposure being ~70BPS of advances) and hence manageable on the longer term.
• We maintain our Buy rating with a revised PT of Rs. 128.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Federal_Bank-July16_19.pdf
July 16, 2019 Gayatri Projects Stock Update BOOK PROFIT  142 - -
Summary
• We book out Gayatri Projects from our active coverage owing to its limited financial bandwidth due to its leveraged balance
sheet and higher promoter pledge.
• Non-performing road portfolio and inability to monetize power investments (due to weak power industry outlook) ascribes little
value to its investments.
• The current competitive environment in EPC, upfront equity investment, high cost mobilization advances, increased bank
guarantee tenure and higher bank charges pose higher entry barriers for companies with leveraged balance sheets.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Gayatri-July16_19.pdf
July 17, 2019 Wipro Stock Update HOLD  260 285 
Summary
• We maintain our Hold rating on Wipro with a revised PT of Rs. 285.
• Reported lower-than-expected revenue growth, while adjusted EBIT IT margin remained a tad ahead of our estimates..
• Guided muted revenue growth of 0% to +2% for Q2FY2020E, which is broadly in line with our expectations.
• Retained the capital return policy at 40-50% of net profit despite the anticipated change in taxation policy (proposed buyback
tax in the budget).
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Wipro-July17_19.pdf


July 17, 2019 Yes Bank Stock Update HOLD  98 UNDER REVIEW 
Summary
• We advise investors against bottom fishing in the stock of Yes Bank given multiple risks with large stressed assets pool, till there
is clarity on capital raising exercise.
• We continue to maintain Hold , with the price target under review.
• For Q1FY20, the bank posted weak results with NII growing by 2.8% y-o-y and NIMs falling by 30BPS q-o-q to 2.8% due to
slower loan growth and interest reversals (due to NPAs).
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Yes_Bank-July17_19.pdf
July 18, 2019 Oil and Natural Gas Corporation Viewpoint POSITIVE  144 28-30 
Summary
• We reiterate our positive view on ONGC and expect a 28-30% upside, as the stock’s valuation is factoring in bear case net oil
realisation of $44/bbl; stock also offers healthy dividend yield of ~5%.
• Sharp decline in LPG and kerosene under-recoveries reinforces our faith in NIL subsidy burden for upstream PSUs.
• Clarity on net oil realisations and rising gas production provide earnings visibility for FY2020E-FY2021E.
• At CMP, the stock is trading at an attractive valuation of 6.3x FY2020E EPS and 6.1x FY2021E EPS.
Read report - https://www.sharekhan.com/MediaGalary/Equity/ONGC-July18_19.pdf
July 19, 2019 Reliance Industries Stock Update BUY  1,249 1,630 
Summary
• Marginally higher-than-expected operating profit due to beat in petchem EBIT, partially offset by slight miss in GRM and lower
petchem production.
• Reliance JIO net profit up by 6% q-o-q to Rs. 891 crore; Retail business growth momentum slowed down with 6.6% q-o-q rise
in EBITDA.
• Agreement with a foreign investor for Rs. 25,215 crore investment into Tower Infrastructure Trust is a positive.
• We maintain our Buy rating with unchanged PT of Rs. 1,630.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Rel_Ind-July19_19.pdf
July 19, 2019 Larsen & Toubro Infotech Viewpoint POSITIVE  1,516 10-12 
Summary
• We stay Positive view on LTI and expect an potential upside of 10-12% in 8-12 months.
• Muted constant currency (CC) revenue growth at 1% q-o-q, as revenue from top accounts declined.
• EBIT margin declined 170 bps q-o-q to 16.0%, a tad ahead of our estimates, owing to higher visa costs, higher investments and
a strong rupee.
• Though revenues from top clients could stabilise, we expect FY2020 revenue to affected by other client-specific issues.
Read report - https://www.sharekhan.com/MediaGalary/Equity/LnT_Info-July19_19.pdf

July 19, 2019 L&T Technology Services Viewpoint POSITIVE  1,606 13-15 
Summary
• We retain our Positive view on L&T Technology Services (LTTS), expecting 13-15% returns in the next 10-12 months.
• Revenue missed estimates, margins beat estimates; CC revenue growth muted at 1.3% q-o-q owing to higher-than-expected
revenue decline in hi-tech and telecom vertical.
• LTTS continued its deal wins momentum – inked seven multi-million dollar deals during the quarter.
• Management cut FY2020E US Dollar revenue growth guidance to 12-14% from 14-16% y-o-y owing to slowdown in semiconductor
business and client-specific issues.
Read report - https://www.sharekhan.com/MediaGalary/Equity/LTTS-July19_19.pdf
July 19, 2019 Dabur India Viewpoint POSITIVE  421 12-14 
Summary
• Dabur registered a strong domestic volume growth of 9.6% in Q1FY2020 (excluding the foods segment, which grew by 14-15%)
in Q1FY2020 versus a 4.3% growth in Q4FY2019.
• OPM improved by 157 bps to 20.1% led by lower ad spends, better revenue mix and operating efficiencies.
• Demand environment remains sluggish, but management expects it to recover in H2FY2020; maintained volume growth
guidance of 5-8%; OPM estimated to remain at 20%.
• We broadly maintain estimates and stay Positive on the stock; expect a 12-14% upside from current levels.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Dabur_India-July19_19.pdf
July 19, 2019 RBL Bank Viewpoint POSITIVE  500 18-20 
Summary
• We maintain our Positive view on the stock of RBL Bank with an upside potential of 18-20%.
• For Q1FY20 RBL Bank (RBL) posted strong results, with 48% y-o-y growth in (NII) and 4.31% NIM.
• The increase in credit cost guidance (due to stressed corporate exposure) makes the asset quality a key monitorable for the
bank.
• With most business fundamentals well in place for the bank, the longer term outlook continues to be strong.
Read report - https://www.sharekhan.com/MediaGalary/Equity/RBL_Bank-July19_19.pdf
July 22, 2019 HDFC Bank Stock Update BUY  2,297 2,750 
Summary
• HDFC Bank (HDFCB) posted a mixed performance during Q1FY2020.
• The bank reported strong operating performance, which was offset by soft NIM and higher provisions.
• Management chose to be pragmatic about growth and provision cover, does not expect a significant change in business mix
and has guided to improve C/I ratio by ~300 BPS over the same period.
• We maintain our Buy rating on the stock with an unchanged PT of Rs. 2,750.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/HDFCBank-July22_19.pdf


July 22, 2019 TVS Motor Stock Update REDUCE  380 350 
Summary
• We downgrade our recommendation on TVS Motor Company (TVS) to Reduce from Hold with a PT of Rs 350.
• Q1FY20 results were marginally below estimates. While margins at 8% improved 30 bps yoy, higher taxation & increased
depreciation and interest expenses due to AS116 norms led to Net Profit declining by 3%.
• TVS expects industry headwinds to sustain and has sharply cut guidance to negative volume growth in FY2020 as against
6-8% growth projected earlier.
• TVS’s operating margins are unlikely to improve in FY2020 as increased cost pressures due to regulations and increased
competitive intensity would offset the benefits from cost control measures.
• Increased tax rates, higher depreciation and interest expenses are likely to impact earnings and would result in a 4% drop in
FY2020 earnings. Valuations at 22x FY21 core earnings are higher than historical average of 20x.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/TVSMotor-July22_19.pdf
July 22, 2019 Future Lifestyle Fashions Viewpoint POSITIVE  458 16-18 
Summary
• Q1FY2020 revenue grew 17.1% y-o-y on a comparable basis; Revenue for Central and Brand Factory grew ~14% and ~24%,
driven by an SSSG of 5% and higher contribution from new stores.
• Both Central and Brand Factory witnessed SSSG of 7% and 2%, respectively; Brand Factory’s SSSG was affected by early end-
of-season-sales.
• We roughly estimate PAT to be affected by Rs. 25-30 crore to FY2020 owing to Ind AS 116 implementation.
• Store additions, strong growth in Brand Factory a sustained show by key in-house brands will remain critical growth drivers in
the near to medium.
• We stay Positive and expect further upside of 16-18% from current levels.
Read report - https://www.sharekhan.com/MediaGalary/Equity/FutureLifestyle-July22_19.pdf
July 22, 2019 Mastek Viewpoint POSITIVE  458 10-12 
Summary
• We maintain our Positive stance on Mastek and expect 10-12% upside from the current levels.
• Revenue disappoints, margin surprise positively despite higher investments led by operational efficiencies.
• Expect revenue growth to be strong in 2HFY2020E on account of strong order book and traction for digital initiatives among
UK public segment.
• Cash and investments represent ~53% of the stock’s market capitalisation and provides enough gunpowder for inorganic
growth.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Mastek-July22_19.pdf

July 22, 2019 Kotak Mahindra Bank Viewpoint POSITIVE  1,454 12-15 
Summary
• We maintain our positive view on Kotak Mahindra Bank and expect a 12- 15% upside from current levels.
• Mixed performance during Q1FY20, Despite slower advances and deposits growth NII growth at a multi-quarter high.
• Stable and attractive Net Interest margins (NIMs) and a stable asset quality on a sequential basis were among other key
positives.
• We expect the valuations to be supported by the high quality of the book, an attractive business model and consistent
performance.
Read report - https://www.sharekhan.com/MediaGalary/Equity/KotakBank-July22_19.pdf
July 22, 2019 ICICI Lombard General Insurance Viewpoint POSITIVE  1,056 18-20 
Summary
• We maintain our Positive view on the stock of ICICI Lombard with a 18-20% upside potential for the stock.
• Despite a mixed quarterly performance, positive business tailwinds are likely to continue with its decision to focus on the strong
growth in preferred segments of Fire, Retail Health, Motor OD, etc.
• The company has demonstrated significant business strengths and will be the frontrunners to capitalize on the same.
Read report - https://www.sharekhan.com/MediaGalary/Equity/ICICILombard-July22_19.pdf
July 23, 2019 Larsen & Toubro Stock Update BUY  1,410 1,765 
Summary
• We maintain our Buy rating on Larsen and Toubro (L&T) with a revised PT of Rs. 1,765, factoring revised estimates including
Mindtree and revision in its listed financial subsidiaries.
• L&T reported inline results during Q1FY2020, backed by healthy execution and improvement in OPM.
• Management has retained its guidance of order inflow, revenue growth and OPM for FY2020.
• L&T eyes Rs. 8.4 lakh crore order prospects with project awards to be more back-ended during FY2020.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/LnT-July23_19.pdf
July 23, 2019 Hindustan Unilever Stock Update BUY  1,693 1,990 
Summary
• In Q1FY2020, HUL’s revenue grew by 6.6% y-o-y with volume growth of 5% and realisation-led growth of 1.6%.
• Gross margin stood almost flat, while OPM improved by 150 BPS on comparable basis to 26.2%; Operating profit grew by 17.6%
(~13% on comparable basis) during the quarter.
• Domestic business volume growth will stand at 5-7% in the near term; Margin expansion would sustain.
• We have broadly maintained our earnings estimates for FY2020/FY2021. We maintain our Buy rating with an unchanged PT of
Rs. 1,990.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/HUL-July23_19.pdf


July 23, 2019 Zee Entertainment Stock Update HOLD  361 Under Review 
Summary
• We maintain our hold rating on Zee Entertainment Enterprises Limited (ZEEL) with its price target under review.
• Overhang on the stock to remain owing to delay in closure of deals.
• Strong set of numbers across most of the parameters; revenue beat led by 46.8% y-o-y growth in domestic subscription
revenues.
• Management guided strong subscription revenue growth of 25% for FY2020E; expect to beat industry growth rate in ad
revenue in FY2020E.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Zee-July23_19.pdf
July 23, 2019 Jyothy Laboratories Stock Update HOLD  161 180 
Summary
• For Q1FY2020, revenue grew by just 2.3% (volume growth at 5.6%), while OPM expanded by 144 bps to 15.9% due to lower
other expenses.
• Household insecticides (HI) category continues to underperform; dishwashing category was flat while fabric care category
grew by just 5%.
• A revival in growth for HI will take time as category has been affected by competition from illegal incense sticks and an
unfavorable weather.
• We broadly maintain earnings estimates; maintain Hold rating with an unchanged PT of Rs. 180.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/JyothyLab-July23_19.pdf
July 23, 2019 Torrent Pharmaceuticals Stock Update HOLD  1,469 1,720 
Summary
• Q1FY2020 quarterly operating performance of Torrent Pharmaceuticals Limited was better than our expectations and is
sustainable.
• USFDA classified Dahej Facility under OAI; Although FY2020 numbers may not be impacted, future product approvals from this
facility could get delayed. USFDA response is awaited.
• We expect the company to report sales and adjusted profit CAGR of 17% and 43%, respectively, over FY2019-FY2021E.
• We maintain our Hold recommendation on the stock with unchanged PT of Rs. 1,720.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/TorrentPharma-July23_19.pdf
July 23, 2019 HDFC Life Viewpoint POSITIVE  509 12-15 
Summary
• We retain our positive view on the stock with a 12-15% upside.
• For Q1FY20, HLIC delivers strong performance on growth on New Business Premium (NBP), Robust Individual APE and Term &
Annuity APE growth.
• The performance of HLIC once again underscores the strong position of HDFC Life in Indian market.
• HLIC is well placed to make the most of the opportunities arising in the insurance market.
Read report - https://www.sharekhan.com/MediaGalary/Equity/HDFC_Life-July23_19.pdf

July 23, 2019 L&T Finance Holdings Viewpoint NEUTRAL  107 3-4 
Summary
• We retain our Neutral rating on the stock.
• Gross stage-3 loans declined 20 bps q-o-q to 5.7%, indicating a strong validation of the management stance and execution
capability.
• We believe there are several challenges to the business environment, especially the wholesale segments which needs to be
considered.
Read report - https://www.sharekhan.com/MediaGalary/Equity/LT_FinHol-July23_19.pdf
July 23, 2019 Kajaria Ceramics Viewpoint POSITIVE  511 18-20 
Summary
• We stay Positive on the stock and expect an 18-20% upside, believing in Kajaria’s ability to post industry leading-volume growth
by gaining market share from unorganised players and maintaining operating margins.
• Consolidated net profit grew 12% y-o-y to Rs. 51 crore led by 9.6% y-o-y volume growth, lower power and fuel costs and higher
other income.
• Management seems confident of achieving 12-15% volume growth for FY2020 and maintain operating margins at 15-16%.
• Kajaria’s capacity expansion plans of Rs. 250 crore in the next two years are on track to sustain earnings growth going ahead.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Kajaria-July23_19.pdf
July 24, 2019 Jubilant FoodWorks Viewpoint POSITIVE  1,156 16-18 
Summary
• Jubilant FoodWorks Limited’s (JFL’s) same-store-sales-growth (SSSG) stood at 4.1%, lower than our and the street’s expectation
of 5-6%.
• OPM fell by ~100 bps on a comparable basis as employee costs and promotional spends increased.
• We have reduced our earnings estimates by ~9% and ~3% for FY2020 and FY2021, respectively, to factor lower-than-expected
SSSG and the effect of a shift to accounting standard Ind -AS 116.
• Stock’s correction by ~15% from recent high factors in near-term headwinds; we maintain our positive view and expect a 16-18%
upside from current levels.
Read report - https://www.sharekhan.com/MediaGalary/Equity/JubilantFoodWorks-July24_19.pdf
July 25, 2019 V-Guard Industries Stock Update BUY  240 280 
Summary
• We upgrade V-guard industries to Buy with revised PT of Rs. 280 increasing valuation multiple owing to presence of multiple
growth levers.
• V-Guard posted strong net earnings growth led by higher revenue contribution of non-South region and benefitting from stable
commodity and forex costs which led to improvement in OPM.
• V-Guard’s focus areas will be increasing non-South presence, expansion into adjacencies and improving efficiencies. Strong
cash position may lead to inorganic expansion at favorable valuation considering weak environment.
• We expect revenue/operating profit/net profit to grow at 15.0%/25.7%/26.7% respectively during FY2019-FY2021E.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/V-Guard-July25_19.pdf


July 25, 2019 Bank of Baroda Stock Update HOLD  110 120 
Summary
• Bank of Baroda (BoB), on re-stated basis, reported weak Q1FY2020 results. NII grew by just 2.61% y-o-y to Rs. 6,496 crore
because of muted advances growth.
• In Q1FY20, BoB reported merged entity’s numbers (it has merged two erstwhile PSU Banks with itself). Post the merger, growth
outlook has weakened and asset-quality performance is still facing challenges.
• Capital burn has also been higher than anticipated (CET-1 erodes by 189 BPS since Q4FY2019) and bank has indicated its
requirement of growth capital infusion in FY2020E.
• Hence, we maintain our Hold rating with a revised price target (PT) of Rs. 120.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/BoB-July25_19.pdf
July 25, 2019 Quess Corp Limited Viewpoint POSITIVE  446 16-18 
Summary
• In Q1FY2020, Quess Corp Limited’s (Quess’) revenue grew by ~22% driven by organic growth of 21% (Revenue from people &
services and technology solutions businesses grew by 37% and 11%, respectively).
• OPM stood flat at 5.0% on a comparable basis, affected by losses in industrials and the internet business.
• A shorter billing cycle drove up operating cash flows (OCF); OCF/EBIDTA ratio increased to 44% in Q1FY2020 from 32% in
Q1FY2019.
• Management has taken adequate steps for issues related to inter-corporate loans and cleaning up of balance sheet in the
coming quarters; we stay Positive on the stock with 16-18% upside from currently levels.
Read report - https://www.sharekhan.com/MediaGalary/Equity/QuessCorp-July25_19.pdf
July 25, 2019 Crompton Greaves Consumer Electricals Viewpoint NEUTRAL  226 5-6 
Summary
• We downgrade Crompton Greaves Consumer Electricals (Crompton) to Neutral on account of headwinds in lighting and ECD
business in the medium term along with higher valuation.
• In Q1FY2020, the ECD segment maintained its revenue growth momentum, while the lighting division’s PBIT margin came in at
multi-year low. Higher other income led to steady growth in net earnings.
• We expect lighting to be affected by slowdown in B2B, price erosion in LED and declining growth trend in conventional lighting
delaying targeting double-digit PBIT margin.
• ECD business’ volume growth led by favourable season may not hold good going ahead given the weak macro environment
and higher competitive intensity.
Read report - https://www.sharekhan.com/MediaGalary/Equity/CromptonGreavesConsu-July25_19.pdf
July 26, 2019 Bajaj Finserv Stock Update BUY  7,238 8,000 
Summary
• We expect financial performance to normalize, hence we are upgrading our rating to Buy on the stock of Bajaj Finserv (BFS)
with revised price target (PT) of Rs. 8000.
• The lending business performance was strong during the quarter in terms of growth and profitability.
• During Q1FY20, there was a significant drop in the profitability of its Insurance subsidiaries due to losses from cyclone Fani.
• Medium term challenges for the insurance businesses are likely to keep upsides capped even as the lending business supports
the outlook.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/BajajFinserv-July26_19.pdf

July 26, 2019 Bajaj Finance Stock Update BUY  3,265 3,600 
Summary
• We maintain our Buy rating on the stock with an unchanged price target (PT) of Rs. 3600.
• For the quarter, BFL posted stable performance on most headline parameters.
• An apparent caution on loans indicates that the consumption demand has weakened but opportunities exists.
• Asset quality and growth will be key monitorables in the near term.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/BajajFinance-July26_19.pdf
July 26, 2019 Maruti Suzuki Stock Update HOLD  5,806 6,075 
Summary
• We retain Hold rating on Maruti Suzuki India Ltd (MSIL) with a revised PT of Rs 6,075.
• Q1 results were in line with estimates; however management sounded cautious and stated that PV industry demand is unlikely
to revive in near term.
• Margin pressures due to weak industry demand, rising competiton and regulatory cost increases would lead to muted earnings
growth in remainder of 9MFY2020.
• We have cut our estimates by 10% and 18% respectively for FY2020 and FY2021. We maintain cautious view and continue to
recommend investors to not add any fresh position in the stock.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Maruti-July26_19.pdf
July 26, 2019 Bajaj Auto Stock Update REDUCE  2,619 2,530 
Summary
• We retain our Reduce recommendation on Bajaj Auto (BAL) with a PT of Rs 2,530 (earlier PT of Rs 2,650).
• BAL reported better than estimated results for Q1FY20 with the PAT coming ahead of estimates.
• However, the outlook for the domestic motorcycle industry continues to be challenging; industry volumes are likely to decline
in FY2020; export volume growth for BAL, is also moderating sharply.
• BAL OPM is likely to remain in declining trend in FY20 due to aggressive pricing in domestic market and cost pressure due to
regulations. We expect BAL earnings to enter negative territory in FY20.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/BajajAuto-July26_19.pdf
July 26, 2019 Persistent Systems Stock Update HOLD  565 650 
Summary
• Given soft earnings growth over FY2019-FY2021E, we maintain our Hold rating on Persistent Systems Limited (PSL) with a
revised PT of Rs. 650.
• Delivered another weak performance; Adjusted EBITDA margin (excluding one-off provision) at 15.6% was still below
expectations.
• Digital revenue declined by 5.9% q-o-q, despite falling behind on the digital front compared to mid-tier peers despite being a
pioneer.
• Sharply focuses on new large deals, new logos and marketing strategy to accelerate its growth trajectory.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Persistent-July26_19.pdf


July 26, 2019 PI Industries Stock Update BUY  1,095 1,280 
Summary
• Management reiterated its growth guidance of more than 20% on revenue front and 50-100 bps margin expansion at operating
level.
• We expect the company to post revenue and earnings CAGR of 20.6% and 31.1%, respectively, during FY2019-FY2021E.
• Strong performance continues with revenue, EBITDA and PAT surging by 24.5%, 28.4% and 23.6% y-o-y, respectively, during
Q1FY2020.
• We maintain our Buy rating on PI Industries with an unchanged PT of Rs. 1,280/share.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/PII_Ind-July26_19.pdf
July 26, 2019 Kewal Kiran Clothing Stock Update HOLD  1,000 1,155 
Summary
• Revenue grew 4% y-o-y, as volumes rose by ~7%; brands such as Integriti and Easies clocked double-digit revenue growth
whereas core brands Killer and Lawman recorded weak sales.
• Higher selling & administrative expenses kept margins flat, impact of Ind AS 116 on PAT was not material.
• We expect OPM to sustain at 21-23%, steady growth in core brands would hold key for growth ahead.
• We maintain our Hold rating on stock with a revised price target of Rs. 1,155.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/KKCL-July26_19.pdf
July 26, 2019 JSW Steel Viewpoint NEUTRAL  250 - 
Summary
• We maintain our Neutral view on JSW Steel given concerns over profitability due to weak steel prices and high input cost.
• Miss in operating profit due to lower-than-expected volume at 3.7mmt (down 15.1% q-o-q) and EBITDA/tonne at Rs. 10,153 (down
25.2% y-o-y).
• Management reiterated muted sales volume guidance of 16mtpa in FY2020; Dolvi expansion to 10mtpa on track to get
completed by March 2020.
• At the CMP, the stock is trading at 10.4x its FY2020EPS and 9.4x its FY2021E EPS.
Read report - https://www.sharekhan.com/MediaGalary/Equity/JSWSteel-July26_19.pdf
July 29, 2019 ICICI Bank Stock Update BUY  429 550 
Summary
• ICICI Bank clocked healthy numbers in Q1FY20, with strong all-round operating performance.
• Helped by lower slippages and NPA recoveries, provisions declined significantly.
• We believe that with earnings normalising, it is the start of a sustainable growth cycle for the bank.
• We therefore maintain our Buy rating with a revised price target of Rs. 550.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/ICICI-July29_19.pdf

July 29, 2019 Supreme Industries Stock Update HOLD  1,075 1,200 
Summary
• We maintain our Hold rating on Supreme Industries Limited (SIL) with a revised PT of Rs. 1,200.
• Raised FY2020E revenue growth guidance to 12-15% from 9-11% earlier, with a volume growth of 8-10% and expects margin to
be at 13.5-14.5%.
• Revenue beat, margins missed the mark; Overall volume grew by 13.5% y-o-y in Q1FY2020 led by strong volume growth in
plastic piping system.
• Management believes that the decline in margins has bottomed out and indicated that there would be recovery in margins
from Q2FY2020E.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Supreme_Ind-July29_19.pdf
July 29, 2019 Atul Ltd. Viewpoint POSITIVE  3,610 10-12 
Summary
• We maintain our Positive view on Atul Limited (Atul) with a potential upside of 10-12%.
• We estimate revenue and earnings to report a CAGR of 13.5% and 16.6% over FY2019-FY2021E, respectively.
• Future growth is likely to be driven by improved utilisation levels of enhanced capacities along with positive pricing tailwinds
and operating leverage.
• The company reported healthy revenue and adjusted earnings growth of 12% and 78% at standalone level and 14% and 112%
at consolidated levels respectively.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Atul-July29_19.pdf
July 29, 2019 Havells India Viewpoint POSITIVE  666 15-18 
Summary
• We reiterate our Positive outlook on Havells India (Havells) and expect a 15-18% upside potential.
• For Q1FY2019, Havells reported lower-than-expected revenue impacted by reduced revenue in Lloyd business and weak
demand in real estate along with delays in projects post elections, which impacted core Havells revenue and margin decline
due to lower revenue growth.
• We have lowered our revenue for FY2020-FY2021 on account of weak demand in real estate and delays in projects post
elections and weakness in Lloyd business off-take and lowered earnings estimate mainly factoring lower operating margin.
• Management’s focus remains on higher penetration and premiumisation across segments to drive growth. Strengthening
brands, widening channel expansion and in-house manufacturing to aid revenue/margin growth.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Havells-July29_19.pdf
July 29, 2019 Polycab India Limited Viewpoint POSITIVE  607 18-20 
Summary
• We maintain our Positive view on Polycab India Limited (PIL) with a potential upside of 18-20%.
• Better-than-expected revenue; margins improve on higher revenue and softness in commodity prices.
• Market leadership and brand advantage coupled with multiproduct growth strategy augur well for growth visibility.
• Revenue and earnings to witness a CAGR of 13% and 17%, respectively, for FY2019-FY2021; ROCE and ROE remain healthy at
28% and 17.5%, respectively.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Polycab_India-July29_19.pdf


July 30, 2019 Axis Bank Stock Update BUY  707 860 
Summary
• We maintain our BUY rating on the stock, with an revised Price Target to Rs 860.
• Axis Bank posted mixed results for Q1 FY20 where the operational performance was in-line, but the asset quality performance
deteriorated.
• Addition to the stressed pool by Rs 10,000 crore is an overhang on the stock.
• With total non-NPL stress now at 4% of loans, these disclosures are likely to delay the RoE expansion cycle for the bank and
lead to a rise in credit costs.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Axis_Bank-July30_19.pdf
July 30, 2019 Hero MotoCorp Stock Update HOLD  2,259 2,550 
Summary
• Hero Motocorp (Hero) Q1FY2020 results were broadly in line with estimates.
• 2W industry weakness is likely to sustain and we expect industry to drop in FY2020. Hero’s volumes are expected to drop by
7%.
• Margin contraction due to operating deleverage, increased depreciation charges to result in 11% drop in earnings in FY20.
• Cut FY20 and FY21 earnings estimates by 10% and 5% respectively. Retain Hold recommendation on the stock with a revised
PT of Rs 2,550.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/HeroMoto-July30_19.pdf
July 30, 2019 Bharat Electronics Stock Update BUY  98 140 
Summary
• We maintain our Buy rating on Bharat Electronics Limited (BEL) with a price target of Rs. 140.
• We expect revenue and earnings to clock CAGRs of 14.4% and 7.7% during FY2019-2021E.
• Robust order book of Rs. 51,715 crore, at 4.3x of FY2019 revenue provides strong earnings visibility.
• Q1 numbers are a mixed bag margins beat hopes, but revenue missed estimates.
• Standalone EBITDA and PAT increased by 12.1% and 13.9% y-o-y, respectively whereas revenue remained flat.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/BEL-July30_19.pdf
July 30, 2019 Bank of India Stock Update HOLD  71 80 
Summary
• Bank of India (BOI) reported mixed operating performance with lower-than-expected NII and PAT growth during Q1FY2020.
• GNPA and NNPA have deteriorated in percentage terms but NNPA in absolute terms is stable.
• The overhang of big-ticket infrastructure and corporate loans still exists, which is likely to keep upside limited.
• We maintain our Hold rating on the stock with a revised price target (PT) of Rs. 80.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/BoI-July30_19.pdf

July 30, 2019 Alicon Castalloy Viewpoint NEUTRAL  397 5-6 
Summary
• We downgrade our view on Alicon Castalloy (ACL) to “Neutral” from “Positive” earlier.
• ACL Q1FY20 results were significantly below estimates as weak domestic OEM demand dragged earnings.
• Continued weak domestic demand and margin pressures would result in a 16% drop in earnings in FY2020.
• Valuations at 10x FY2021 earnings are undemanding, so we advise investors to Hold onto the stock but given the weak
sentiments of the Auto sector we do not advise fresh buying.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Alicon-July30_19.pdf
July 30, 2019 Tech Mahindra Viewpoint POSITIVE  640 15-18 
Summary
• We stay Positive on Tech Mahindra and expect a potential upside of 15-18% in 10-12 months.
• TechM is well-placed to capitalise on 5G opportunity across networks and IT services given its diversified offerings in the
communication vertical.
• Q1 numbers soft as expected; EBIT margin declined 391 bps q-o-q to 11.5% .
• Management retained guidance; expect communication vertical to grow in high-single digits in FY2020E, enterprise business
likely to grow in mid-single digits.
Read report - https://www.sharekhan.com/MediaGalary/Equity/TechMahindra-July30_19.pdf
July 31, 2019 UPL Stock Update HOLD  596 656 
Summary
• We downgrade our rating on UPL Limited (UPL) to Hold with a revised PT of Rs. 656 based on potential headwinds due to global
weakness in the agro chemical industry.
• Management has reiterated its guidance for FY2020E of revenue growth of 8-10% and EBITDA growth of 16-20% base revenue
and EBITDA of Rs. 32,500 crore and Rs. 6,900 crore, respectively.
• Arysta’s integration is progressing well; achieves revenue and cost synergies of US$20 million and US$18.6 million during
Q1FY2020.
• UPL reported revenue, adjusted EBITDA and adjusted PAT growth of 91%, 107% and 29% on a y-o-y basis (not comparable),
respectively; however, it delivered 7% y-o-y and 11% y-o-y revenue and EBITDA growth, respectively, on like-to-like basis during
Q1FY2020.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/UPL-July31_19.pdf
July 31, 2019 Zydus Wellness Stock Update BUY  1,500 1,780 
Summary
• In Q1FY2020, Zydus Wellness’ comparable revenue grew by ~10% (Heinz portfolio grew 20% on a comparable basis).
• OPM expanded strongly to 19.7% in Q1FY2020 as against 8.1% in Q1FY2019, led by lower advertisement spends and operating
efficiencies.
• We have increased our earnings estimates factoring in higher-than-estimated growth for the Heinz portfolio.
• We upgrade Zydus to Buy with a revised price target (PT) of Rs. 1,780 on strong show by the Heinz portfolio.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Zydus-July31_19.pdf


July 31, 2019 Kalpataru Power Transmission Stock Update BUY  483 590 
Summary
• Healthy operational performance led by strong execution with a 25% y-o-y growth in revenue was offset by an increase in
below-operating line items that curbed net profit growth to 13.5% y-o-y.
• KPTL maintained guidance for order intake at Rs. 10,000 crore, revenue growth at 15-20% y-o-y and OPM at ~11%.
• Divestment of three transmission assets will de-leverage balance sheet, boost working capital management and capex for
future growth.
• We maintain our Buy rating with a revised PT of Rs. 590, as we have lowered net earnings estimates for FY2020-FY2021.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Kalpataru-July31_19.pdf
July 31, 2019 Shoppers Stop Viewpoint POSITIVE  377 14-16 
Summary
• Shoppers Stop Limited’s (SSL) comparable revenue grew by 4.9%, driven by 5.2% SSSG (in-line with our expectation of 5%) in
Q1FY2020, improving from 3.7% SSSG in Q4FY2019.
• Comparable OPM improved by 88 BPS to 5.9% (operating profit grew by 18% y-o-y); lower other income and higher depreciation
led to the decline in PAT; Ind AS 116 impact was limited to ~Rs. 1 crore.
• Management has guided for mid-single SSSG; OPM to improve by 80-100 BPS.
• We maintain our Positive view with 14-16% upside from current levels.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Shoppers_Stop-July31_19.pdf
July 31, 2019 Biocon Limited Viewpoint POSITIVE  227 18-20 
Summary
• We maintain our positive view on the stock and expect a potential upside of 18-20%.
• Q1FY2020 quarterly performance was a mixed bag; operating profit marginally beat expectations, whereas sales and profit
missed our estimates.
• Biologics segment to remain key growth driver; scope for potential value unlocking.
• We expect company to report sales and profit CAGRs of 28% and 37%, respectively, in the next two years.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Biocon-July31_19.pdf
July 31, 2019 PNB Housing Finance Viewpoint BOOK OUT  712 - -
Summary
• We recommend a Book Out on for PNB Housing Finance (PNBHF) as several challenges and significant headwinds make risk
reward unfavorable for investors.
• The recent credit rating downgrades with negative outlook also warrants caution, as it will increase the cost of funds.
• Despite decent operating performance with a 31% rise in NII, worsening asset quality and sluggish business growth outlook
remain concerns.
• With rising headwinds in real estate funding, liquidity concerns have increased disproportionately there is little probability of
NIM expansion, improvement in interest spread or ROA.
Read report - https://www.sharekhan.com/MediaGalary/Equity/PNB_Hsg_Fin-July31_19.pdf

July 31, 2019 TCI Express Limited Viewpoint POSITIVE  568 25-28 
Summary
• We retain our Positive view on TCI Express with 25-28% upside potential on account of strong earnings growth trajectory,
strong balance sheet and high return ratios.
• TCI’s net revenue got affected during Q1 on account of weak macro environment. However, higher OPM and cost efficiencies
led to 14% y-o-y growth in net profit.
• Management marginally reduce revenue growth guidance for FY2020 owing to weak Q1 but sees improvement from each
quarter hereon.
• TCI achieved debt free status and has maintained Rs. 400 crore expansion plan over five years.
Read report - https://www.sharekhan.com/MediaGalary/Equity/TCI_Exp-July31_19.pdf
July 31, 2019 JMC Projects Viewpoint POSITIVE  118 25 
Summary
• We stay Positive on JMC Projects and expect a 25% upside on account of strong earnings growth outlook, quality balance
sheet and attractive valuation.
• JMC Projects’ net earnings grew by 34% y-o-y led by strong execution and improvement in operating margins.
• The management maintained a more than 20% y-o-y revenue growth guidance and 50 bps improvement in OPM guidance for
FY2020.
• We have fine-tuned our estimates for FY2020-FY2021 factoring improvement in OPM along with adjusting below the operating
line items.
Read report - https://www.sharekhan.com/MediaGalary/Equity/JMC_Pro-July31_19.pdf
July 31, 2019 Granules India Limited Viewpoint POSITIVE  91 20-25 
Summary
• Strong quarterly performance led by new product launches and operational efficiencies.
• Sales and profit growth guidance of 20% and 25% CAGR, respectively, for the next three years maintained.
• Debt and pledge share reduction will lead to re-rating.
• We expect Granules India Limited (Granules) to report sales and adjusted profit CAGR of 17.6% and 33.5%, respectively, over
FY2019-FY2021E.
Read report - https://www.sharekhan.com/MediaGalary/Equity/GranulesIndia-July31_19.pdf
July 31, 2019 Gujarat Gas Limited Viewpoint NEUTRAL  172 5-6 
Summary
• Gujarat Gas’s Q1FY20 PAT substantially exceeded our estimates due to beat in volumes and margins.
• Management has guided for a 10% volume CAGR in 2-3 years on current gas sales volume run-rate of 9.5 mmscmd.
• PNGRB concept paper on CGD network tariff determination would be a regulatory overhang and could impact volume growth
trajectory in case of an unfavourable ruling by regulator.
• We maintain our Neutral view on Gujarat Gas given regulatory overhang.
Read report - https://www.sharekhan.com/MediaGalary/Equity/GujGas-July31_19.pdf


Aug 06, 2019 Titan Company Stock Update BUY  1,038 1,260 
Summary
• In Q1FY2020 Titan Company’s (consolidated) revenue grew by 15.6% y-o-y to Rs. 5,095.1 crore; driven by ~20% growth in the
watches business and ~13% growth in the jewellery business.
• OPM on a comparable basis declined by 70 BPS to 10.1% (reported OPM improved by 30 BPS) largely on account of lower
margins in the watches business and sustained losses in the eyewear business.
• We have slightly reduced our estimates to factor in lower than expected profitability in Q1FY2020 and sustained pressure on
jewellery margins due to spike in gold prices.
• Titan posted relatively better performance in a tough environment; we maintain our Buy recommendation with a revised PT of
Rs. 1,260.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Titan-Aug06_19.pdf
Sharekhan Limited, its analyst or dependant(s) of the analyst might be holding or having a position in the companies mentioned in the article.

EQUITY FUNDAMENTALS SECTOR UPDATE
Sector View
Date Sector Report Type
Latest Chg
July 02, 2019 Automobiles Sector Update Cautious 
Summary
• Auto sector’s pain worsened in June 2019 with all segments witnessing a double-digit drop in the volumes.
• 2W volumes declined steeply by 10% due to high channel inventory, and entry of ABS/CBS compliant bikes which increased
costs.
• CV segment volumes dipped 12% as poor freight availability and revised axle load norms dented the demand.
• PV volumes dipped 16% marred by sluggish retails and higher channel stocks.
• Volume headwinds are expected to continue in medium term and we expect further downgrades. We retain Cautious view on
the sector.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Automobile-July02_19.pdf
July 03, 2019 Oil & Gas Sector Update Positive 
Summary
• PNGRB has issued a concept paper to determine transportation tariff for CGD network and CNG.
• The regulator aims to enable third-party access in geographical areas where marketing exclusivity of CGD players has expired.
• We do not expect the regulator’s move to affect volumes and margins of CGD players given lack of clarity on capacity
determination for common carriers and availability of cheap domestic gas for new players.
• The recent sharp correction in stock prices of Gujarat Gas and Mahanagar Gas Limited makes their valuations attractive.
Hence, we maintain a Positive view on the CGD space.
Read report - https://www.sharekhan.com/MediaGalary/Equity/OilGas-July03_19.pdf
July 04, 2019 Q1FY2020 Consumer Discretionary results preview Sector Update Neutral 
Summary
• Revenue growth of branded apparel and retail companies to moderate to 9.6% y-o-y due to slowdown in discretionary demand
environment as compared to 12%/21.5% growth in Q4FY2019/Q3FY2019, respectively.
• OPM of most companies likely to decline owing to higher input costs and lower sales growth; overall OPM of companies under
our coverage to remain flat at 10.8%.
• Impact of Ind AS 116 on the bottom line of companies with high number of leased stores is one of the key monitorables in
Q1FY2020.
• Our preferred picks are Bata India, Jubilant Foodworks, Future Lifestyle Fashion and Titan.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Q1FY2020_Consumer_Discretionary_preview-04_July_19.pdf
Upgrade  No change  Downgrade 

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SECTOR UPDATE EQUITY FUNDAMENTALS
Sector View
Latest Chg
July 04, 2019 Q1FY2020 IT results preview Sector Update Neutral 
Summary
• We expect mixed revenue growth performance for the IT industry during Q1FY2020E; Expect CC revenue growth of -0.8-2.5%
q-o-q for tier-I companies with cross-currency tailwinds of 20-60 BPS.
• EBIT margin of the top five IT companies would decline on a q-o-q and y-o-y basis owing to shortage of talent supply in key
markets, wage revision and currency headwinds.
• We expect growth in the financial vertical to be moderated in FY2020E owing to macro issues and delay in discretionary
spends.
• We maintain our Neutral stance on the IT sector; Preferred picks: TCS, Infosys and HCL Tech in the large-cap space; L&T
Infotech, L&T Tech and Mastek in the mid-cap space.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Q1FY2020_IT_preview-04_July_19.pdf
July 04, 2019 Q1FY2020 Oil & gas results preview Sector Update Positive 
Summary
• During Q1FY2020, we expect upstream PSUs to report strong quarter supported by higher oil realisation and an increase in
gas production.
• OMCs likely to report a weak quarter as marketing margin on auto fuels normalise, absence of significant inventory gain and
weakness in refining margin to impact earnings.
• CGD players (especially Gujarat Gas) to report strong earnings growth led by higher volume and largely stable margins.
• Our preferred stocks are Reliance Industries, ONGC and Petronet LNG.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Q1FY2020_Oil&gas_preview-04_July_19.pdf
July 05, 2019 Q1FY2020 Pharma results preview Sector Update Neutral 
Summary
• Valuation continues to remain high; Maintain Neutral stance; Remain selective.
• We expect a stable Q1FY2020 quarter with sales growth of 14% and adjusted PAT growth of 21.5%. OPM likely to expand by 125
BPS because of better product mix, operational efficiencies and softening raw-material prices.
• U.S. continues to remain under pressure with domestic growth in high single to low double digits. Regulatory hurdles/U.S.
litigation case continues to weigh on the sector. Currency fluctuation was no longer supportive or disruptive during the quarter.
• Our Preferred picks: Large caps: Biocon, Cipla and Divis.
• Midcaps: IPCA, Hikal, Granules and Laurus Labs.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Q1FY2020_Pharma_preview-05_July_19.pdf
July 08, 2019 Q1FY2020 Banking and NBFCs results preview Sector Update Positive 
Summary
• While most banks are likely to see improvement in their core operating performance, challenges for NBFCs expected to
continue.
• While growth is likely to be relatively soft in (weaker) NBFCs and PSU Banks, we expect advances momentum to be near-
normal for strong NBFCs and retail private banks.
• Corporate banks should continue to see improvement in core fundamentals with strengthening of balance sheet.
• While NIMs of private banks are expected to be stable, slowing growth of NBFCs’ and weak asset book of PSU Banks’ are likely
to keep their profitability under pressure.
Read report - https://www.sharekhan.com/MediaGalary/Equity/BankingNBFCs-July08_19.pdf

EQUITY FUNDAMENTALS SECTOR UPDATE
Sector View
Latest Chg
July 08, 2019 Q1FY2020 Consumer Goods results preview Sector Update Neutral 
Summary
• Revenue growth of consumer goods companies to moderate to 8.6% y-o-y due to slowdown in rural demand as compared to
10.5% and 12.3% growth in Q4FY2019 and Q3FY2019, respectively.
• Lower volume growth, volatile input prices and higher media spends will put pressure on the margins of few companies,
barring companies such as HUL and Marico.
• Better monsoon in the coming months could be key for revival in consumer demand (especially in rural markets).
• Our preferred picks are HUL, Britannia Industries, Marico and Varun Beverages.
Read report - https://www.sharekhan.com/MediaGalary/Equity/ConsumerGoods-July08_19.pdf
July 08, 2019 Q1FY2020 Capital Goods & Engineering results preview Sector Update Positive 
Summary
• We expect our capital goods universe to report 22% y-o-y growth in net earnings, led by 11% y-o-y growth in net revenue along
with stable to marginal improvement in OPM due to operating leverage and muted commodity prices for Q1FY2020.
• Order inflow is expected to remain tepid during H1FY2020, maintaining the weakness felt during H2FY2019 due to slowdown
related to elections.
• We maintain our Positive stance on the sector owing to healthy order backlog, expectation of revival in government spending,
gradual revival expected in private capex and healthy outlook on international tendering.
• Preferred picks: L&T, KEC International, Kalpataru Power Transmission and JMC Projects, Havells and Polycab.
Read report - https://www.sharekhan.com/MediaGalary/Equity/CapitalGoods-July08_19.pdf
July 09, 2019 Q1FY2020 Cement/Infra/Building material results preview Sector Update Positive 
Summary
• Cement sector’s net earnings to grow 69% y-o-y, aided by steep rise in realisations and benign costs.
• Infrastructure sector net earnings to fall 13% y-o-y on OPM pressure and increase in below-operating line items.
• Earnings growth in building materials space to be muted at 2% y-o-y as pricing pressures persist on high competition, volume
growth to be key determinant too.
• We maintain our Positive stance on Cement and remain selective on Infrastructure and building material segment.
• Preferred picks: Ultratech, The Ramco Cements, JK Lakshmi Cement, KNR Construction, Ashoka Buildcon, Kajaria Ceramics.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Cement_Infra-July09_19.pdf
July 09, 2019 Q1FY2020 Automobiles results preview Sector Update Cautious 
Summary
• Automobile universe (ex-TAMO) performance is expected to worsen with revenue growth contracting by 4% in Q1FY2020; the
first instance of de-growth in past five years.
• Operating margins to contract 220 bps yoy driven by operating deleverage due to volume drop and pricing pressures amid
rising competition; PAT to drop 18% yoy.
• Volume woes for auto companies expected to continue in medium term; negative operating leverage, cost pressures and
increased competition to sustain earnings pressure.
• Our preferred picks: M&M, Apollo Tyres and Exide Industries.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Automobiles-July09_19.pdf

SECTOR UPDATE EQUITY FUNDAMENTALS
Sector View
Latest Chg
July 09, 2019 Q1FY2020 results preview Sharekhan Special - -
Summary
• FY2020E Sensex aggregate earnings growth is at healthy 15.8% y-o-y, but skewed by strong performance of few companies.
• Across board impact of consumption slowdown, Pharma, telecom and metals to see impact.
• Consumer demand slowdown may lead to further consensus earnings downgrades, but downside risk limited.
• Stable macros and accommodative monetary policy are favorable for long-term investors.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Q1FY20_Results_preview-09_July_19.pdf
July 29, 2019 Automobiles Sector Update Cautious 
Summary
• The automotive industry is likely to stay in despair in July 2019 too as sales are set to continue dropping in double-digits across
segments..
• Two-wheeler sales volumes are likely to drop by 11% due to slowing economic growth, rural stress due to delayed monsoon
and higher channel inventory.
• The PV industry is expected to clock a 14% drop in sales as weak consumer sentiment in both urban and rural areas and efforts
to reduce channel inventories.
• Axle-load norms, slowing GDP and IIP growth and production cuts by CV OEM’s to result in a 14% drop in CV volumes.
• Volume headwinds are expected to continue in medium term and we expect further downgrades. We retain Cautious view on
the sector.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Automobiles-July29_19.pdf
Sharekhan Limited, its analyst or dependant(s) of the analyst might be holding or having a position in the companies mentioned in the article.

EQUITY TECHNICALS TREND & VIEW
Downward trajectory
Daily view Nifty Daily

Nifty has been tumbling down for the past several sessions.
0
On the way down, it has broken crucial short-term moving

-5
averages. 12200
0.0% 12100
The index has also broken a rising trendline drawn from the 12000
11900
11800
October low. 23.6%

11700
11600
11500
In terms of Fibonacci retracement, Nifty has reached 61.8% 38.2%

11400
11300
retracement of the October – June rally. 50.0%

11200
11100
11000
The index can get into a consolidation mode near the key 61.8%
10900
10800
Fibonacci level, which is near 10806. 10700
10600
10500
The momentum indicator on the daily chart is bearish.

78.6%
10400
10300
Crucial support for the index will be at 10782, whereas crucial

10200
10100
100.0% 10000
resistance will be at 11181. 9900

October Novem ber Decem ber 2019 February March April May June July Augus t
Weekly view Nifty weekly

The index has posted four consecutive negative closes on 5
the weekly chart. 0
-5
The weekly Bollinger bands are expanding along with price 12500
12400
action, which is assisting the price decline. (D) 12300

12200
12100
12000
(B)
The weekly momentum indicator is in bearish mode. 11900

11800
11700
11600
From Elliot wave perspective, the index is forming an (III)

11500
11400
11300
expanding triangle, whose last leg, i.e. wave (E), is unfolding 11200
11100
11000
on the downside. 10900

10800
10700
This means the index has further downside potential going

10600
10500
10400
ahead and can tumble well below the 61.8% retracement 10300
10200
10100
mark. (C)
(E)
(IV)
10000
9900
(A)
9800
Subsequent level on the downside will be 78.6% retracement 9700
9600
mark, i.e. 10455. Nov Dec 2018 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2019 Feb Mar Apr May Jun Jul Aug Sep Oct
Crucial support will be at 10455, whereas crucial resistance

will be at 11300.
Monthly view
Nifty Monthly
Nifty witnessed a steep fall in July.
25
The negative divergence on the monthly chart added to the 20

15
10
5
downside pressure and the indicator has triggered a bearish (V)

0
-5
12500
(D)
crossover in July. (III)

(B)
12000
11500
11000
From Elliot wave perspective, the previous multi-month rally 10500
could not develop as an impulse structure. Thus, the rally (I)

(A) (C) (E)
(IV)
10000
9500
turned out to be part of the larger corrective structure. 9000
8500
Thus, Nifty can come down towards the lower end of the (II) 8000
7500
larger corrective structure, which is near 10000. 7000
A long-term rising trendline and the lower Bollinger band are 6500
also near the same level. 6000
5500
Crucial support will be at 10000, whereas crucial resistance

will be at 11707.
5000
2013 2014 2015 2016 2017 2018 2019 2020
Trend Target Support Resistance Trend reversal

Down 10000 10000 11707 11707

MONTHLY VIEW EQUITY DERIVATIVES
Market in the grip of bears

Nifty, at the start of July series, has seen significant amount Top five stock futures with the highest open interest in the current
of addition in open interest. The price has been constantly series are:
under pressure, indicating majority of the addition has FUTURES
OPEN INTEREST
been on the shorter side. Series on series, Nifty has seen (Rs. Cr)
a fall of around 4.5%, while other major indices such as HDFC 6,801.26
Bank Nifty have seen fall of more than 8%. This clearly RELIANCE 5,498.90
shows that stronger hands of the market, that is FIIs, have HDFCBANK 4,711.40
been shorting index futures and are now net short in index INFY 4,572.03
futures after February 2019. Between February and July TCS 3,687.62
2019, there were only one-two instances where FIIs were Source: Sharekhan
net short, but that too for 1-2 days. However, this time, since
the past 10-15 trading sessions, they have been constantly
net short in index futures, which is a clear negative sign for
the market. Rollover in Nifty was also on the lower side at
Top five stock options with the highest open interest in the current
73.73% vs. 80.35%, indicating longs are exiting the market series are:
and majority of the positions that got carried forward are on
OPEN INTEREST
the shorter side. OPTIONS
(Rs. Cr)
Since the start of August series, Nifty started showing a RELIANCE 2,357.99
downward trend and made low below 10800 at 10782. SBIN 2,182.68
However, post that, we witnessed some respite. However, AXISBANK 1,333.08
as per data, this bounce back would be short lived and ICICIBANK 1,051.30
it is a sell-on-rise kind of market. We have not only seen MARUTI 941.91
shorts in the index, but majority of the large-cap counter Source: Sharekhan
has started showing addition of short position, which we
feel is build by stronger hands of market participants.
MARKET WIDE VS NIFTY ROLLOVER ACTIVITY:
Nifty Market Wide

100.00% View for August series:
90.00%
80.00%
70.00%
On the options front, in the August monthly expiry, 11000 PE
60.00%
is the highest in terms of open interest with around 31.46
90.25%
89.56%
91.20%
50.00%
88.23%
85.72%
87.21%
80.35%
81.39%
73.73%
lakh shares. While on the call side, 11000 CE is the highest

71.93%
40.00%
66.73%
60.26%
30.00%
20.00%
10.00%
in terms of open interest with 23.45 lakh shares.
0.00%
Implied volatility in the past few trading sessions has
May
Apr
Mar
Jun
Aug
Jul
spiked up from 12.50% to 16.50. While PCR on the other

Rollover highlights- side has started August series on the lower side at 1.37
• Nifty Future started August series with 1.79 crore vs. compared to 1.56, which we saw in the past series, which
1.92 crore shares in open interest. is a negative sign for the market going forward. All the
• August series started with Rs.1,04,790 crore vs. Rs. above data indicates soon after the breach of 11000 levels,
1,09,189 crore in stock futures; Rs. 20,247 crore vs. Rs. which was crucial support for the market in August series,
28,485 crore in Nifty futures; Rs. 94,992 vs. Rs. 87,796 market breadth has already got a hit and now the market
crore in index option; and Rs. 13,388 vs. Rs. 11,500 crore is in the grip of bears. Only after a convincing move above
in stock options. 11400, one can think to go long. Currently, it is a sell-on-
• Nifty August rollover was at 73.73% vs. 80.35%. rise market, targeting 10500-10600 in the coming trading
• Market-wide rollover was at 91.20% vs. 90.25%. sessions.

CURRENCY FUNDAMENTALS MONTHLY VIEW
Currencies: Pound plunges on worries over No-Deal Brexit

Key points
CURRENCY LEVELS IN JULY (IN RS.)
India CPI data showed retail inflation increased by 3.18% in
June 2019 compared to 3.05% in May 2019 Currency High Low Close % Monthly Change
India Industrial Production (IIP) data showed output growth USDINR 69.14 68.29 68.80 -0.33
slowed down to 3.1% in May 2019 compared to 3.93% in May
EURINR 78.37 76.39 76.70 -2.35
2018
India trade deficit narrowed to $15.28 billion in June 2019 GBPINR 87.66 83.32 83.73 -4.38
compared to $15.36 billion in May 2019 JPYINR 64.30 62.90 63.22 -1.19
U.S. advance GDP q-o-q data showed the economy expanded
by 2.1% in Q2CY2019 compared to 3.1% in Q1CY2019
Spot INR Movement in July Spot INR Movement in July
EURINR GBPINR
USDINR JPYINR
64.5
78.5
69.4
87.7
64.3
69.2 87.2
78
64.1
86.7
69
63.9
86.2
77.5
68.8
63.7 85.7
68.6 85.2
63.5 77
68.4
84.7
63.3
76.5 84.2
68.2 63.1
83.7
68 62.9
76 83.2
27-Jul-19
07-Jul-19
23-Jul-19
17-Jul-19
03-Jul-19
25-Jul-19
29-Jul-19
05-Jul-19
09-Jul-19
13-Jul-19
31-Jul-19
15-Jul-19
19-Jul-19
21-Jul-19
01-Jul-19
11-Jul-19
25-Jul-19
29-Jul-19
05-Jul-19
09-Jul-19
15-Jul-19
19-Jul-19
21-Jul-19
01-Jul-19
27-Jul-19
07-Jul-19
11-Jul-19
23-Jul-19
17-Jul-19
03-Jul-19
13-Jul-19
31-Jul-19
USD-INR: CMP Rs. (70.60)
Indian rupee appreciated by 0.33% in the previous month as the government slashed fiscal deficit target to 3.3% for FY2020 from 3.4% in Union
Budget. Further, the government is thinking of raising part of its fiscal borrowing in foreign currency. However, sharp gain was prevented on risk
aversion in domestic markets, strong dollar and continued FII outflows from local shares. Surge in crude oil prices also impacted the rupee.
Outlook: Indian rupee is expected to trade with a negative bias on strong dollar and weak domestic market sentiments. Market sentiments are hurt
on rise in trade tensions between the U.S. and China, escalating geopolitical tensions in Middle East and fears over political uncertainty in India after
the government scrapped special status for Jammu And Kashmir State. Further, continued FII outflows from local shares will hurt rupee. Traders
will remain cautious ahead of macroeconomic data. The Reserve Bank of India (RBI) slashed interest rates by 35 BPS to 5.40% and maintained its
accommodative stance. Further, it lowered its GDP forecast for the current fiscal year to 6.9% from 7% predicted earlier. The expected trading range
in the near term is 69.50 – 71.50.
EUR-INR: CMP Rs. (79.15)

Euro depreciated by 2.61% in the previous month on strong dollar and disappointing economic data from Eurozone. Further, European Central Bank
(ECB) has kept its policy unchanged and signaled a possible rate cut in September and is considering other options for easing. Additionally, the U.S.
added more European products on the list, on which it plans to levy taxes in retaliation to trans-Atlantic subsidy dispute.
Outlook: Euro currency is expected to trade with a negative bias amid strength in dollar. Disappointing data will spark concerns over the economic
health of Eurozone. Traders will remain cautious ahead of European Central Bank’s (ECB) monetary policy meeting minutes to get cues on future
monetary stance. The expected trading range in the near term is 77.30– 80.0.
GBP-INR: CMP Rs. (86.08)

British pound depreciated by 4.23% in July amid strong dollar and as worries over no deal Brexit increased as Boris Johnson got elected as U.K. Prime
Minister. Boris Johnson reiterated that the U.K. will exit EU on October 31 with or without the deal. Bank of England policymakers unanimously voted
to keep interest rates unchanged at 0.75% and slashed its economic growth outlook.
Outlook: Pound is expected to trade with a negative bias on worries over No-Deal Brexit and disappointing economic data from U.K. Contraction in
construction and manufacturing sector sparked concerns over the economic health of the country. Further, U.K. GDP data is forecast to show that the
economy expanded at a slower rate in June 2019. Manufacturing production data is likely to show a decline in activity. The expected trading range
in the near term is 83.50 – 87.20.
JPY-INR: CMP Rs. (66.54)

Yen depreciated by 0.86% in the previous month on strong dollar and as Bank of Japan kept its deposit rates unchanged at -0.10% and promised to
keep rates low for an extended period at least through spring 2020. Further, it has revised its inflation forecast downward.
Outlook: Japanese yen is expected to trade with a positive bias amid risk aversion in global markets. Market sentiments are hurt on rising trade
tensions between the U.S. and China, Japan and Korea trade dispute, Brexit uncertainty and geopolitical tensions in Middle East. U.S. President Donald
Trump said he would impose 10% tariff on further $300 billion Chinese imports. The Chinese government has asked its state-owned enterprises to
stop importing U.S. agricultural products. However, sharp gains may be prevented on expectation of disappointing economic data from Japan. The
expected trading range in the near term is 64.50 – 68.0.
CMP as on August 07, 2019

TREND & VIEW CURRENCY TECHNICALS
USD-INR - On Pullback mode EUR-INR - Pullback on the cards

USD-INR pair was in a downtrend from mid-October 2018, EURINR corrected during November 2018 till July 2019
until July 2019. During this period, it corrected from 74.48 to from 86.15 to 75.96. On the monthly charts, we can observe
68.27. In this process, it has reached the 20 month moving that the pair has witnessed a sharp pullback from the lower
average of 68.65. It has witnessed a sharp pullback from Bollinger Band and shall act as a crucial support in the
that moving average support. near term. The weekly momentum indicator has triggered
For July, the pair formed a Doji pattern with a long lower a positive crossover which is a Buy signal. Thus both price
shadow indicating buying interest near the crucial support and momentum indicators are indicating a rise in the pair.
of the 20-month moving average. Thus, the currency pair
The rise can stretch to levels of 82.29-84 where resistance
has started a pullback of the fall. The pullback can continue
till 72.13-73.14 where resistance in the form of 61.82% and in the form 61.82% and 78.6% Fibonacci retracement levels
78.6% Fibonacci retracements are placed. are placed.
5
4
3
5
2
4
1
3
2 0
1 -1
0 -2
-1 -3
-2
EURINR
USDINR - INDIAN RUPEE 87.0
75.5 86.5
100.0%
86.0
75.0
85.5
100.0% 74.5 85.0
74.0 84.5
78.6% 84.0
73.5
83.5
78.6%
73.0 83.0
82.5
72.5 61.8%
82.0
61.8%
72.0
81.5
71.5 81.0
80.5
71.0
80.0
70.5 79.5
70.0 79.0
78.5
69.5
78.0
69.0 77.5
77.0
68.5
0.0% 76.5
68.0
0.0% 76.0
67.5 75.5
75.0
67.0
74.5
66.5
74.0
66.0 73.5
65.5 March April May June July Augus t Septem ber Novem ber Decem ber2019 February March April May June July Augus t Septem ber
13 20 3 17 24 7 21 5 19 26 9 23 30 14 28 4 18 1 15 22 8 15 29 12 19 3 17 31 14 21 5 19 2 13 20 3 17 1 15 22
Augus t Septem ber October Novem ber Decem ber 2019 February March April May June July Augus t Septem ber October
JPY-INR - Breakout
GBP-INR - Fibonacci to the rescue
JPYINR was consolidating since October 2018 till July
GBPINR witnessed a sharp correction after it broke down 2019. It traded at 66.65-61.15 during this period. During the
from the Bearish Flag pattern around mid-May. The fall
consolidation phase, it had formed a Triangle pattern. The
has halted at 83.29 which is around the 78.6% Fibonacci
retracement level of the rise from 79.44 to 98.52. In terms pair has broken out of this pattern on the upside. Prices
of candlestick pattern, the pair formed a Hammer pattern are trading along the weekly Upper Bollinger band which
on the weekly charts, which has Bullish implications. The is expanding indicating that the upmove shall continue.
pair is expected to trade with a positive bias till the zone of Momentum indicator is in line with price action. The pair
89.10-89.54 where resistance in the form of 40-week and is expected to rise to levels of 74.78 which is the equality
month moving average is placed. target.
5
4 6
3 5
2
1 4
0 3
-1
-2 2
-3 1
-4
0
GBPINR
100.0 -1
99.5
-2
99.0
0.0% 98.5 -3
98.0 JPYINR 75.5
97.5 75.0
97.0 74.5
96.5 74.0
96.0 73.5
95.5 73.0
95.0 72.5
94.5 72.0
71.5
94.0
71.0
93.5 70.5
93.0 70.0
92.5 69.5
92.0 69.0
91.5 68.5
91.0 68.0
90.5 67.5
90.0 67.0
89.5 66.5
66.0
89.0
65.5
88.5
65.0
88.0
64.5
87.5 64.0
87.0 63.5
86.5 63.0
86.0 62.5
85.5 62.0
85.0 61.5
84.5 61.0
84.0 60.5
78.6% 83.5 60.0
83.0 59.5
82.5 59.0
82.0 58.5
81.5 58.0
81.0 57.5
80.5 57.0
56.5
80.0
100.0% 56.0
79.5
55.5
79.0
55.0
78.5
54.5
78.0
54.0
2017 Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2018 Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2019 Mar Apr May Jun Jul Aug Sep Oct
Sep Oct Nov Dec 2018 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2019 Feb Mar Apr May Jun Jul Aug Sep Oct
Currency View Reversal Supports Resistances Target

USD-INR UP 69.00 71.18 / 69.41 72.13 / 72.63 73.14
GBP-INR UP 83.29 84.54 / 84.00 88.27 / 89.10 89.54
EUR-INR UP 75.96 77.66 / 76.84 82.29 / 83 84.00
JYP-INR UP 62.98 65.13 / 62.98 68.14 / 70.81 74.78

PMS DESK PMS FUNDS
Portfolio Management Services

We are pleased to introduce you to Sharekhan Portfolio We have the following strategies on offer:
Management Services (PMS) in which we completely
manage your investment portfolio so that you stop worrying ProPrime (based on fundamental research)
n Prime Picks
about the market volatility and focus your energy on things
n Diversified Equity
that you like to do!
We have a wide range of strategies that you can choose
from. Our strategies are based on fundamental research.
Prime Picks
Prime Picks Performance as on
OVERVIEW July 31, 2019
A multi-cap discretionary scheme that aims to outperform the BSE 200/
Prime Picks (In %)
CNX Mid Cap 100 indices across market cycles. The scheme would have
Prime CNX Mid
two folios, Quality and Alpha, with a distinct investing style to offer you the Duration BSE 200
Picks Cap 100
benefits of dynamic investing as per their choice of allocation between
1 Month -6.7 -5.9 -9.8
conservative - Quality - and aggressive - Alpha - folios or baskets or stocks.
3 Month -4.3 -5.7 -9.4
6 Month 2.4 1.0 -5.8
INVESTMENT STRATEGY 1 Year -7.8 -4.8 -15.7
Seeks companies with a high standard of management and corporate

governance through in-depth research by experienced in-house
fundamental research team *Note : Net of Quarterly AMC Fees
Aims to leverage on investment opportunities in structural growth

sectors through Quality folio whereas the allocation to more aggressive
Alpha folio would add to superior outperformance across market cycles. Top 10 stocks
Maintain judicious mix between Quality and Alpha through dynamic Aarti Industries
investment strategy and providing flexibility to investors to make
Ashoka Buildcon
changes to allocations between the two folios once every year.
Bajaj Finance
Gujarat Gas
PRICING
HDFC Bank
Minimum investment of Rs. 25 lakh
ICICI Bank
Charges
Larsen & Toubro
¾¾ 2% per annum; AMC fee charged every quarter
NTPC
¾¾ 0.5% brokerage
Reliance Industries
¾¾ 20% profit sharing after the 18% hurdle is crossed at the end of
every fiscal Titan Company
(with higher watermark basis)
FUND OBJECTIVE
A good return on money through long-term investing in quality companies

PMS FUNDS PMS DESK
DIVERSIFIED EQUITY
Product performance
OVERVIEW as on July 31, 2019
The investment product aims to outperform the Nifty / Nifty 500, with relatively Diversified Equity Performance
(In %)
lower volatility in the portfolio.
DE
Duration Nifty 50 Nifty 500
Strategy
1 Month -7.2 -5.7 -6.3
3 Months -5.6 -5.4 -6.4
6 Months -0.3 2.7 0.5
1 Year -7.8 -2.1 -6.3

INVESTMENT STRATEGY
2 Years 0.7 5.0 1.4
Disciplined investment decisions are taken in specific stocks based on 3 Years 7.9 1.5 7.3
thorough fundamental research.
5 Years 7.0 3.2 7.9
The product seeks to achieve the outperformance through superior *Note : Net of Quarterly AMC Fees
selection of well researched, quality companies to build a well balanced,

Disclaimer: Returns are based on a client’s returns since
diversified portfolio. inception and may be different from those depicted in the risk
disclosure document.
It is a low-risk, low-chum portfolio with bulk of investment (range of 65-75%)

in Top 100 large-cap companies and the rest invested in well researched,
quality mid-cap companies.
Top 10 stocks DE
Axis Bank
Bajaj Finserv
Britannia Industries
PRICING
HDFC Bank
Minimum investment of Rs. 25 lakh
Hindustan Unilever
Charges
Jubilant Foodworks
¾¾ 2.5% per annum; AMC fee charged every quarter Kotak Mahindra Bank
¾¾ 0.5% brokerage Larsen & Toubro
¾¾ 2
0% profit sharing after the 15% hurdle is crossed at the end of every
Reliance Industries
fiscal
Tech Mahindra
FUND OBJECTIVE
A good return on money through long-term investing in quality companies

ADVISORY DESK MONTHLY PERFORMANCE
Advisory Products and Services

The Advisory Desk is a central desk consisting of a Mumbai- Advisory Products & Services
Advisory Products & Services
based expert team that runs various sample model portfolios
for illustrative purposes only for clients of all profiles, be they
traders or investors.
These products are different from Sharekhan research-based T d
Trader
Investor
technical and fundamental offerings as these essentially
try to capture the trading opportunities in stocks where
momentum is expected before or after some event including Actionable Ideas
A i bl Id
MID Derivative Sharekhan Intraday Calls
the announcement of results or where some news/event is Pre Market Action (Cash)
probable. Derivative Calls Derivative Idea
(Opt) (Fut+Opt)
Advisory products are ideal for those who do not have time to
Stocks In
Stocks In Technical
Technical Derivative
Derivative
either monitor the market tick by tick or shift through pages of News view view
research for data or pour over complex charts to catch a trend.
However, all these products require perfect discipline and money management.
For Investor
ACTIONABLE IDEAS
These calls focus on generating absolute returns over a timeframe of 6-12 months and have a favourable risk-reward ratio.
Stocks are closely tracked based on regular interaction with companies’ management to stay abreast of the business
outlook. For details about the product, please write to us at advisory@sharekhan.com.
For traders
INTRADAY CALLS
These are technical analysis calls. Calls will be generated in the cash segment and closed before the end of the trading
day. These calls have pre-defined stop loss, targets. For details of the product, please write to us at advisory@sharekhan.
com.
DERIVATIVE CALLS
These calls are based on the analysis of open interest, implied volatility and put-call ratio in the derivatives market. It is
a leveraged product and ideal for aggressive traders. These calls have a pre-defined stop loss, target, timeframe and
quantity to be executed. For more details on this product, please write to us at derivative@sharekhan.com.
DERIVATIVE IDEA FUTURES
Calls are in (stocks & index) futures segment, based on an analysis of open interest, implied volatility and the put-call ratio
in the derivatives market. It is a leveraged product and ideal for aggressive traders. These calls have pre-defined stop
loss, targets, timeframe and quantity to be executed. For more details on this product, please write to us at derivative@
sharekhan.com.
SHAREKHAN PRE-MARKET ACTION
This report gives us stocks in news, with likely the price effect which is valid for a day. The report has different sections
- Stocks in News, Events, Technical View and Derivative View alongwith positive and negative bias stocks. The report is
valid for a day, for more details please write to us on advisory@sharekhan.com.
Report Card
Product Intraday Calls (Cash) Derivative Calls Derivative Idea Future and Strategy
Month July 19 CY 19 July 19 CY 19 July 19 CY 19
No. of calls 42 318 113 778 14 141
Profit booked 31 174 75 445 09 80
Stop loss hit 11 144 57 326 05 61
Strike rate (%) 74 55 56 57 64 57

MF PICKS MUTUAL FUNDS DESK
Sharekhan top mutual fund picks (equity) July 2019

Data as on July 01, 2019
Absolute % Compounded Annualised %
(Point to Point) (Point to Point)
Scheme Name NAV
6 Months 1 yr 3 yrs 5 yrs Since
Inception
Large Cap Funds
Mirae Asset Large Cap Fund - Reg - Growth 52 8.7 12.7 15.5 14.5 15.9
HDFC Top 100 Fund - Growth 517 10.6 18.3 14.8 10.4 20.0
Reliance Large Cap Fund - Growth 36 7.5 14.2 14.6 12.4 11.4
ICICI Prudential Bluechip Fund - Growth 43 6.8 9.5 12.6 11.3 14.1
UTI Mastershare Unit Scheme - Growth 124 6.0 6.4 10.4 10.2 15.5
Aditya Birla Sun Life Frontline Equity Fund - Reg - Growth 228 5.4 6.7 10.2 10.5 20.4
Kotak Bluechip Fund - Reg - Growth 239 7.6 8.5 10.0 10.8 20.0
Indices
S&P BSE Sensex TRI 57,615 10.1 13.3 14.9 10.7 13.3
Large & Mid Cap Fund
Sundaram Large and Mid Cap Fund - Reg - Growth 35 5.4 7.6 14.8 12.9 10.7
Invesco India Growth Opportunities Fund - Growth 35 5.2 6.4 13.4 12.8 11.0
Principal Emerging Bluechip Fund - Growth 104 3.0 -0.2 12.6 15.2 24.7
Kotak Equity Opportunities Fund - Reg - Growth 121 7.0 8.4 12.2 13.0 18.3
DSP Equity Opportunities Fund - Reg - Growth 222 5.4 7.2 11.7 12.7 17.6
IDFC Core Equity Fund - Reg - Growth 46 3.3 3.4 11.4 10.7 11.5
SBI Large & Midcap Fund - Growth 225 4.8 8.7 11.2 12.6 14.3
ICICI Prudential Large & Mid Cap Fund - Growth 333 6.1 8.2 10.4 9.0 18.2
Indices
S&P BSE LargeMidCap TRI 5,705 6.8 9.0 13.2 10.8 13.5
Mid Cap Fund
DSP Midcap Fund - Reg - Growth 55 4.5 4.1 10.5 13.2 14.4
Kotak Emerging Equity Scheme - Reg - Growth 39 5.2 3.1 10.4 16.1 11.8
Edelweiss Mid Cap Fund - Growth 27 4.1 -1.9 10.1 13.0 8.9
ICICI Prudential MidCap Fund - Growth 96 0.6 1.2 10.0 11.5 16.6
Franklin India Prima Fund - Growth 960 3.4 2.7 9.3 14.0 19.5
Aditya Birla Sun Life Mid Cap Fund - Growth 283 -0.6 -4.3 7.1 11.0 22.1
BNP Paribas Mid Cap Fund - Growth 32 2.4 2.0 6.5 11.3 9.2
Indices
S&P BSE Mid Cap TRI 17,689 -3.1 -2.6 9.0 10.8 14.6
Small Cap Fund
HDFC Small Cap Fund - Growth 43 -0.2 -1.6 14.7 15.0 13.7
L&T Emerging Businesses Fund - Reg - Growth 24 -4.3 -7.2 13.4 14.7 18.4
Axis Small Cap Fund - Reg - Growth 29 8.7 11.6 11.5 13.7 21.2
Kotak Small Cap Fund - Reg - Growth 72 2.8 -3.0 7.5 12.6 14.7
Franklin India Smaller Companies Fund - Growth 53 0.9 -6.4 6.6 13.4 13.2
Aditya Birla Sun Life Small Cap Fund - Growth 33 -4.2 -12.8 5.8 11.1 10.5
Indices
S&P BSE Small Cap TRI 16,810 -3.1 -10.1 7.1 7.7 9.1
Focused Fund
Sundaram Select Focus - Reg - Growth 186 10.3 10.2 14.3 9.9 18.9
SBI Focused Equity Fund - Growth 146 9.7 11.2 14.2 14.4 19.8
IDFC Focused Equity Fund - Reg - Growth 37 4.8 -5.4 12.4 8.5 10.4
Franklin India Focused Equity Fund - Growth 43 11.1 14.4 12.2 14.4 12.9
Aditya Birla Sun Life Focused Equity Fund - Growth 61 7.9 8.8 10.8 10.4 14.1
ICICI Prudential Focused Equity Fund - Ret - Growth 30 4.9 4.4 8.7 8.4 11.7
Indices
S&P BSE 500 TRI 18,268 6.0 7.1 12.8 10.8 12.4
Multi Cap Funds
HDFC Equity Fund - Growth 700 10.4 18.3 14.8 10.5 18.9
Canara Robeco Equity Diversified Fund - Growth 138 9.1 10.9 14.4 10.5 18.1
Kotak Standard Multicap Fund - Reg - Growth 36 9.0 11.1 14.0 14.9 14.1
Principal Multi Cap Growth Fund - Growth 143 3.2 3.2 13.0 11.2 15.3
Aditya Birla Sun Life Equity Fund - Growth 731 4.0 5.0 12.7 11.9 22.9

MUTUAL FUNDS DESK MF PICKS
Absolute % Compounded Annualised %

(Point to Point) (Point to Point)
Scheme Name NAV
6 Months 1 yr 3 yrs Since
5 yrs Inception
SBI Magnum Multi Cap Fund - Growth 50 9.0 9.2 12.2 14.7 12.5
Reliance Multi Cap Fund - Growth 101 5.1 15.2 11.8 10.2 17.6
ICICI Prudential Multicap Fund - Growth 300 6.0 9.9 11.1 12.1 14.7
Indices
S&P BSE 500 TRI 18,268 6.0 7.1 12.8 10.8 12.4
Value & Contra Funds
Kotak India EQ Contra Fund - Reg - Growth 53 6.8 7.3 14.4 11.3 12.8
Tata Equity P/E Fund - Reg - Growth 136 3.4 0.1 13.0 12.6 19.0
HDFC Capital Builder Value Fund - Growth 292 1.7 1.6 11.8 11.6 14.2
IDFC Sterling Value Fund - Reg - Growth 51 -0.3 -5.0 11.7 11.6 15.4
L&T India Value Fund - Reg - Growth 36 4.9 4.0 11.2 13.8 14.6
Indices
S&P BSE 500 TRI 18,268 6.0 7.1 12.8 10.8 12.4
ELSS
Mirae Asset Tax Saver Fund - Reg - Growth 18 8.6 12.9 18.8 -- 18.5
Axis Long Term Equity Fund - Growth 46 7.6 7.5 13.7 14.7 17.5
Kotak Taxsaver - Reg - Growth 46 10.2 13.6 13.2 13.8 11.8
IDFC Tax Advantage (ELSS) Fund - Reg - Growth 57 6.0 2.0 13.1 12.9 18.0
DSP Tax Saver Fund - Growth 49 9.1 11.3 12.5 13.0 13.6
Invesco India Tax Plan - Growth 52 5.4 4.0 12.3 13.1 14.0
Aditya Birla Sun Life Tax Relief 96 - Growth 31 0.7 -0.4 11.2 13.5 10.5
ICICI Prudential Long Term Equity Fund (Tax Saving) - Reg - Growth 389 7.4 9.5 10.8 10.5 20.2
Indices
Nifty 500 TRI 14,481 6.2 7.2 12.7 10.7 11.5
Thematic/Sector Funds
ICICI Prudential Banking and Financial Services Fund - Retail - Growth 69 12.4 19.8 19.4 17.4 19.4
Aditya Birla Sun Life Banking and Financial Services Fund - Reg - 30 9.9 10.0 15.9 16.9 22.1
Growth
DSP Natural Resources & New Energy Fund - Reg - Gth 32 3.3 1.1 15.7 12.6 11.1
Aditya Birla Sun Life India GenNext Fund - Growth 84 4.9 6.2 13.1 15.7 16.5
L&T Infrastructure Fund - Reg - Growth 16 1.3 -0.7 12.8 10.8 4.1
Indices
Nifty 50 TRI 16,541 9.4 12.1 14.0 10.6 13.7
Aggressive Hybrid Fund
Mirae Asset Hybrid - Equity Fund - Reg - Growth 15 8.0 12.3 13.1 -- 11.2
Principal Hybrid Equity Fund - Growth 77 1.7 2.6 12.6 11.0 11.0
ICICI Prudential Equity & Debt Fund - Growth 137 6.8 10.3 11.8 11.9 14.2
Canara Robeco Equity Hybrid Fund - Growth 162 7.7 10.0 11.8 11.7 11.3
SBI Equity Hybrid Fund - Growth 138 7.5 10.6 11.2 12.5 15.7
Sundaram Equity Hybrid Fund - Reg - Growth 92 6.6 7.7 10.9 8.9 12.3
HDFC Hybrid Equity Fund - Growth 55 6.8 9.4 9.3 6.7 12.7
Aditya Birla Sun Life Equity Hybrid 95 Fund - Growth 761 3.6 3.1 8.1 10.2 19.4
Indices
NIFTY 50 Hybrid Composite Debt 65:35 Index 10,167 8.2 12.1 11.9 10.1 13.9
BNP Paribas Equity schemes
Absolute Compounded Annualised %
% (Point to (Point to Point)
Scheme name Scheme Category Point)
6 Months 1 yr 3 yrs 5 yrs Since
Inception
BNP Paribas Large Cap Fund - Growth Large Cap 10.6 10.6 10.3 10.8 16.2
BNP Paribas Multi Cap Fund - Growth Multi Cap 7.1 6.1 10.1 11.0 12.0
BNP Paribas Long Term Equity Fund - Growth ELSS 9.0 8.4 9.1 10.7 10.7
BNP Paribas Mid Cap Fund - Growth Mid Cap 2.4 2.0 6.5 11.3 9.2
BNP Paribas Focused 25 Equity Fund - Reg - Growth Focused 7.8 3.2 -- -- -1.0
BNP Paribas India Consumption Fund - Reg - Growth Thematic 7.9 -- -- -- 17.5
BNP Paribas Substantial Equity Hybrid Fund - Reg - Growth Aggressive Hybrid 8.2 10.9 -- -- 8.9
Every individual has a different investment requirement, which depends on his financial goals and risk-taking capacities. We at Sharekhan first understand the individual’s investment objectives and risk-
taking capacity, and then recommend a suitable portfolio. So, we suggest that you get in touch with our Mutual Fund Advisor before investing in the best funds.n
Sharekhan Limited, its analyst or dependant(s) of the analyst might be holding or having a postition in the mutual funds mentioned in the article.

MF PICKS MUTUAL FUNDS DESK
Sharekhan top sip fund picks July 2019

(*invested on 1st day of every month) Data as on July 01, 2019
SIP INVST (Monthly Rs. 1,000)* 1 year 3 years 5 Year
Total amount invested 12,000 36,000 60000
Present Compounded Present Compounded Present Compounded
Scheme Name NAV Value annualised value annualised value annualised
(Rs.) return (%) (Rs.) return (%) (Rs.) return (%)
Large Cap Fund
HDFC Top 100 Fund - Growth 517 12,956 18.1 43,072 12.7 80,714 12.2
Mirae Asset Large Cap Fund - Reg - Growth 52 12,727 13.6 42,764 12.2 82,819 13.3
Reliance Large Cap Fund - Growth 36 12,697 13.1 42,616 11.9 80,212 11.9
ICICI Prudential Bluechip Fund - Growth 43 12,592 11.1 41,552 10.1 78,175 10.9
UTI Mastershare Unit Scheme - Growth 124 12,413 7.7 40,676 8.6 74,656 9.0
Kotak Bluechip Fund - Reg - Growth 239 12,586 11.0 40,638 8.5 74,965 9.1
Aditya Birla Sun Life Frontline Equity Fund - Reg - Growth 228 12,453 8.4 39,919 7.2 74,670 9.0
S&P BSE Sensex TRI 57615 12,779 14.6 44,283 14.7 81,704 12.7
Large & Mid Cap Fund
Mirae Asset Emerging Bluechip Fund - Growth 54 12,783 14.7 42,394 11.6 87,578 15.6
Sundaram Large and Mid Cap Fund - Reg - Growth 35 12,534 10.0 41,854 10.6 80,432 12.1
Invesco India Growth Opportunities Fund - Growth 35 12,403 7.5 41,533 10.1 78,684 11.1
SBI Large & Midcap Fund - Growth 225 12,502 9.4 40,411 8.1 76,340 9.9
Kotak Equity Opportunities Fund - Reg - Growth 121 12,574 10.7 40,213 7.8 76,983 10.2
ICICI Prudential Large & Mid Cap Fund - Growth 333 12,572 10.7 39,566 6.6 74,041 8.6
DSP Equity Opportunities Fund - Reg - Growth 222 12,446 8.3 39,406 6.3 76,530 10.0
Principal Emerging Bluechip Fund - Growth 104 12,167 3.1 38,578 4.8 77,079 10.3
S&P BSE LargeMidCap TRI 5705 12,527 9.8 41,858 10.6 78,619 11.1
Mid Cap Fund
Kotak Emerging Equity Scheme - Reg - Growth 39 12,502 9.4 38,734 5.1 76,531 10.0
DSP Midcap Fund - Reg - Growth 55 12,405 7.5 38,530 4.7 76,137 9.8
Franklin India Prima Fund - Growth 960 12,291 5.4 38,453 4.6 74,613 8.9
Edelweiss Mid Cap Fund - Growth 27 12,214 4.0 37,942 3.6 73,176 8.1
ICICI Prudential MidCap Fund - Growth 96 12,170 3.1 37,859 3.5 71,967 7.5
BNP Paribas Mid Cap Fund - Growth 32 12,271 5.0 36,752 1.4 69,446 6.0
Aditya Birla Sun Life Mid Cap Fund - Growth 283 11,906 -1.7 35,668 -0.6 68,817 5.6
S&P BSE Mid Cap TRI 17689 11,779 -4.0 36,470 0.9 71,764 7.3
Small Cap Fund
HDFC Small Cap Fund - Growth 43 11,877 -2.2 39,689 6.8 80,010 11.8
SBI Small Cap Fund - Growth 51 12,129 2.4 39,372 6.3 81,769 12.7
Reliance Small Cap Fund - Growth 40 11,870 -2.4 37,688 3.2 76,898 10.2
L&T Emerging Businesses Fund - Reg - Growth 24 11,589 -7.4 36,823 1.6 77,065 10.3
Kotak Small Cap Fund - Reg - Growth 72 12,231 4.3 36,423 0.8 70,565 6.6
Franklin India Smaller Companies Fund - Growth 53 11,948 -0.9 35,767 -0.5 69,903 6.3
Aditya Birla Sun Life Small Cap Fund - Growth 33 11,529 -8.5 33,634 -4.6 67,478 4.8
S&P BSE Small Cap TRI 16810 11,536 -8.4 34,403 -3.1 66,339 4.1
Focused Fund
Sundaram Select Focus - Reg - Growth 186 12,832 15.7 43,235 13.0 79,639 11.7
SBI Focused Equity Fund - Growth 146 12,940 17.8 43,146 12.8 82,382 13.1
Franklin India Focused Equity Fund - Growth 43 13,004 19.0 41,754 10.5 78,406 11.0
Aditya Birla Sun Life Focused Equity Fund - Growth 61 12,658 12.3 40,536 8.3 75,626 9.5

MUTUAL FUNDS DESK MF PICKS
SIP INVST (Monthly Rs. 1,000)* 1 year 3 years 5 Year

Total amount invested 12,000 36,000 60000
Scheme Name NAV Value annualised value annualised value annualised
ICICI Prudential Focused Equity Fund - Ret - Growth 30 12,214 4.0 39,291 6.1 72,044 7.5
IDFC Focused Equity Fund - Reg - Growth 37 12,145 2.7 38,824 5.3 72,743 7.9
S&P BSE 500 TRI 18268 12,437 8.1 41,131 9.4 77,647 10.6
Multi Cap Funds
HDFC Equity Fund - Growth 700 12,980 18.5 42,785 12.2 80,184 11.9
Canara Robeco Equity Diversified Fund - Growth 138 12,729 13.7 42,705 12.1 78,876 11.3
Kotak Standard Multicap Fund - Reg - Growth 36 12,767 14.4 42,044 11.0 81,442 12.6
Reliance Multi Cap Fund - Growth 101 12,695 13.0 41,712 10.4 75,780 9.6
SBI Magnum Multi Cap Fund - Growth 50 12,782 14.7 41,213 9.5 79,516 11.6
ICICI Prudential Multicap Fund - Growth 300 12,485 9.0 40,811 8.8 77,528 10.5
Principal Multi Cap Growth Fund - Growth 143 12,227 4.2 39,448 6.4 76,516 10.0
Aditya Birla Sun Life Equity Fund - Growth 731 12,346 6.4 39,435 6.4 76,933 10.2
S&P BSE 500 TRI 18268 12,437 8.1 41,131 9.4 77,647 10.6
Value & Contra Funds
Kotak India EQ Contra Fund - Reg - Growth 53 12,488 9.1 42,304 11.4 79,797 11.7
HDFC Capital Builder Value Fund - Growth 292 12,075 1.4 39,393 6.3 75,275 9.3
Tata Equity P/E Fund - Reg - Growth 136 12,237 4.4 38,905 5.4 77,326 10.4
L&T India Value Fund - Reg - Growth 36 12,336 6.2 38,504 4.7 75,729 9.6
IDFC Sterling Value Fund - Reg - Growth 51 11,949 -0.9 37,701 3.2 73,117 8.1
S&P BSE 500 TRI 18268 12,437 8.1 41,131 9.4 77,647 10.6
Tax-saving funds (ELSS)
Axis Long Term Equity Fund - Growth 46 12,769 14.5 42,821 12.3 80,696 12.2
Kotak Taxsaver - Reg - Growth 46 12,925 17.5 41,730 10.4 79,043 11.3
ICICI Prudential Long Term Equity Fund (Tax Saving) - Reg
389 12,653 12.2 41,293 9.7 76,633 10.1
- Growth
Invesco India Tax Plan - Growth 52 12,389 7.2 41,003 9.1 77,523 10.5
DSP Tax Saver Fund - Growth 49 12,759 14.3 40,679 8.6 78,478 11.0
IDFC Tax Advantage (ELSS) Fund - Reg - Growth 57 12,442 8.2 40,277 7.9 77,123 10.3
Aditya Birla Sun Life Tax Relief 96 - Growth 31 11,965 -0.6 39,278 6.1 75,541 9.5
L&T Tax Advantage Fund - Reg - Growth 55 12,183 3.4 38,756 5.1 74,579 8.9
Nifty 500 TRI 14481 12,445 8.3 41,105 9.3 77,519 10.5
BNP Paribas Mutual Fund Equity schemes
Scheme Name Scheme Category Value annualised Value annualised Value annualised
BNP Paribas Large Cap Fund - Growth Large Cap 12,949 17.9 41,608 10.2 75,692 9.5
BNP Paribas Long Term Equity Fund - Growth ELSS 12,817 15.4 40,375 8.0 73,483 8.3
BNP Paribas Multi Cap Fund - Growth Multi Cap 12,610 11.4 39,314 6.1 73,589 8.4
BNP Paribas Mid Cap Fund - Growth Mid Cap 12,271 5.0 36,752 1.4 69,446 6.0
BNP Paribas Focused 25 Equity Fund - Reg - Growth Focused 12,650 12.2 -- -- -- --
BNP Paribas India Consumption Fund - Reg - Growth Thematic -- -- -- -- -- --
BNP Paribas Substantial Equity Hybrid Fund - Reg - Growth Aggressive Hybrid 12,788 14.8 -- -- -- --
Every individual has a different investment requirement, which depends on his financial goals and risk-taking capacities. We at Sharekhan first understand the individual’s investment objectives and risk-
taking capacity, and then recommend a suitable portfolio. So, we suggest that you get in touch with our Mutual Fund Advisor before investing in the best funds.n
Sharekhan Limited, its analyst or dependant(s) of the analyst might be holding or having a postition in the mutual funds mentioned in the article.

EARNINGS GUIDE EQUITY FUNDAMENTALS
Sharekhan Earnings Guide Prices as on August 06, 2019

CMP Sales Net profit EPS (%) EPS PE (x) RoCE (%) RoNW (%) DPS Div
Company
(Rs) FY19 FY20E FY21E FY19 FY20E FY21E FY19 FY20E FY21E growth FY19 FY20E FY21E FY20E FY21E FY20E FY21E Rs. Yld(%)
Automobiles
Apollo Tyres 152 17,548.8 18,142.7 19,028.9 879.7 733.4 844.4 15.4 12.8 14.8 -2% 9.9 11.9 10.3 6.5 7.0 7.0 7.6 3.3 2.1
Ashok Leyland 63 29,055.0 27,079.4 27,760.0 2,040.7 1,155.3 900.7 7.0 4.0 3.1 -33% 9.1 15.9 20.5 14.7 11.5 13.7 10.8 3.1 4.9
Bajaj Auto 2,610 30,250.0 31,280.3 34,551.5 4,333.2 4,276.6 4,571.6 149.8 147.9 158.1 3% 17.4 17.6 16.5 24.9 24.8 17.9 17.7 60.0 2.3
Gabriel India 94 2,076.5 2,221.8 2,377.3 95.0 91.7 103.7 6.6 6.4 7.2 4% 14.3 14.7 13.1 20.0 19.7 14.0 13.6 1.5 1.6
HERO MOTOCORP 2,469 33,650.5 32,297.3 35,605.2 3,384.9 3,006.6 3,286.8 169.5 150.6 164.6 -1% 14.6 16.4 15.0 30.5 30.4 24.8 21.2 87.0 3.5
M&M 549 52,848.2 52,917.4 54,275.4 5,423.9 4,147.2 3,820.4 43.6 33.4 30.7 -16% 12.6 16.5 17.9 15.4 13.4 11.3 9.7 8.5 1.5
Maruti Suzuki 5,833 86,020.3 90,039.6 93,997.4 7,500.6 6,802.1 7,348.5 248.3 225.2 243.3 -1% 23.5 25.9 24.0 17.3 16.9 13.0 12.7 80.0 1.4
TVS Motor 380 18,209.9 19,195.5 21,959.7 670.1 642.4 765.8 14.1 13.5 16.1 7% 26.9 28.1 23.6 20.2 21.8 17.1 18.0 2.5 0.7
Banks & Financials
Axis Bank 679 34,837.8 40,493.8 47,991.1 4,675.9 6,945.8 9,628.5 18.2 27.0 37.4 43% 37.3 25.1 18.1 - - 10.0 12.6 0.0 0.0
Bajaj Finance 3,272 11,145.7 12,851.8 18,805.9 3,921.6 4,914.7 6,398.3 68.0 85.2 111.0 28% 48.1 38.4 29.5 - - 22.4 23.7 4.0 0.1
Bajaj Finserv 7,096 - - - - - - - - - - - - - - - - - 1.8 0.0
Bank of Baroda 104 24,774.8 27,388.1 29,721.9 433.5 4,759.1 5,780.3 1.6 17.8 21.7 265% 64.1 5.8 4.8 - - 9.6 11.5 0.0 0.0
Bank of India 70 18,789.7 20,444.1 23,720.1 (5,546.9) 1,833.4 2,678.7 -16.2 5.4 7.8 - - 13.0 8.9 - - 4.5 7.6 0.0 0.0
Federal Bank 88 5,527.4 6,472.3 7,799.8 1,243.9 1,549.1 2,053.5 6.3 8.0 10.6 30% 14.1 11.0 8.3 - - 11.2 13.6 1.0 1.1
HDFC 2,190 15,540.3 17,075.7 20,095.5 9,632.5 10,083.0 11,945.8 55.9 58.4 69.2 11% 39.2 37.5 31.6 - - 12.0 13.0 20.0 0.9
HDFC Bank 2,189 65,869.1 79,409.6 96,400.6 21,078.1 25,457.4 32,182.5 77.4 93.5 118.2 24% 28.3 23.4 18.5 - - 16.1 17.9 13.0 0.6
ICICI Bank 410 41,527.0 48,136.1 56,968.5 3,363.3 12,236.3 15,729.0 5.2 19.0 24.5 116% 78.4 21.6 16.8 - - 10.9 12.9 1.5 0.4
LIC Housing Finance 484 4,462.3 5,457.9 6,722.3 2,431.0 2,675.8 3,325.2 48.1 53.0 65.8 17% 10.1 9.1 7.4 - - 16.2 18.3 6.8 1.4
Max Financial 413 - - - - - - - - - - - - - - - - - 0.0 0.0
Punjab National Bank 68 24,533.7 27,571.4 30,014.4 (9,975.5) 3,506.5 4,221.1 -46.9 16.5 19.8 - - 4.1 3.4 - - 9.7 14.6 0.0 0.0
SBI 301 1,25,123.8 1,45,144.7 1,63,941.0 862.2 15,759.1 20,043.1 1.0 17.7 22.5 382% 312.0 17.1 13.4 - - 6.9 8.3 0.0 0.0
Union Bank of India 66 14,688.9 17,065.5 19,562.2 (2,947.5) 921.6 1,532.2 -16.7 11.7 19.4 - - 5.6 3.4 - - 3.7 6.5 0.0 0.0
Yes Bank 85 14,398.8 16,961.2 18,841.4 1,720.5 2,825.2 3,389.1 7.5 12.3 14.7 40% 11.4 7.0 5.8 - - 10.1 11.1 2.7 3.2
Consumer Goods
Britannia 2,551 11,054.7 12,395.5 13,947.3 1,154.5 1,418.9 1,701.3 48.1 59.1 70.9 21% 53.0 43.2 36.0 42.6 40.6 29.9 28.9 15.0 0.6
Emami 314 2,692.9 3,058.4 3,598.4 511.1 609.4 743.4 11.3 13.4 16.4 20% 27.8 23.5 19.2 34.0 40.5 28.3 32.1 4.0 1.3
GSK Consumer 7,504 4,832.0 5,245.6 5,781.2 885.8 1,040.1 1,121.2 210.6 247.3 266.6 13% 35.6 30.3 28.1 35.5 33.9 23.8 22.7 105 1.4
Godrej Consumer Products 622 10,314.3 11,066.7 12,643.2 1,478.5 1,640.3 1,946.6 14.5 16.0 19.0 15% 42.9 38.8 32.7 18.7 20.2 20.6 20.5 3.0 0.5
Hindustan Unilever 1,744 38,224.0 42,355.3 47,593.0 6,199.4 7,368.5 8,593.6 28.7 34.1 39.8 18% 60.8 51.1 43.8 109.0 96.8 84.3 74.6 22.0 1.3
ITC 259 45,784.4 49,885.9 55,618.3 12,309.9 13,328.9 14,788.9 10.1 10.9 12.1 10% 25.6 23.7 21.4 28.1 29.6 22.3 23.0 5.8 2.2
Jyothy Laboratories 156 1,813.6 1,969.1 2,228.2 197.6 211.1 243.6 5.4 5.7 6.6 11% 29.0 27.2 23.6 14.1 15.0 15.2 15.9 3.0 1.9
Marico 378 7,333.6 8,131.4 9,305.7 947.7 1,164.4 1,357.7 7.3 9.0 10.5 20% 51.7 41.9 35.9 44.3 44.4 35.4 34.2 3.8 1.0
Zydus Wellness 1,517 842.8 1,993.4 2,318.5 171.2 241.0 320.4 29.7 41.8 55.6 37% 51.1 36.3 27.3 7.6 8.7 6.9 8.6 5.0 0.3
IT / IT services
HCL Technologies 1,024 60,427.0 69,502.0 76,642.8 10,123.0 10,412.9 11,483.1 73.6 76.7 84.6 7% 13.9 13.3 12.1 26.7 26.2 23.7 23.3 8.0 0.8
Infosys 774 82,675.0 89,988.8 1,00,614.2 15,862.0 16,311.3 18,634.3 35.4 38.1 43.6 11% 21.9 20.3 17.8 34.1 38.9 25.3 29.0 21.5 2.8
Persistent Systems 531 3,365.9 3,435.0 3,810.8 351.7 371.2 401.2 44.0 48.4 52.5 9% 12.1 11.0 10.1 20.5 20.9 15.2 15.2 11.0 2.1
Tata Consultancy Services 2,215 1,46,463.0 1,58,740.8 1,74,864.3 31,472.0 33,735.7 37,045.8 83.1 89.9 98.7 9% 26.7 24.6 22.4 40.1 40.0 35.6 35.4 26.0 1.2
Wipro 259 58,906.0 61,225.9 66,878.7 9,011.4 9,907.0 11,003.4 14.9 16.4 18.2 11% 17.3 15.8 14.2 16.7 17.7 17.9 18.1 1.0 0.4
Cap goods / Power
CESC 753 7,754.0 8,353.0 9,048.0 937.0 1,058.0 1,164.0 70.3 79.4 87.4 12% 10.7 9.5 8.6 8.7 8.7 10.4 10.6 17.5 2.3
Finolex cable 370 3,078.0 3,399.0 3,788.0 344.0 383.0 424.0 22.5 25.0 27.7 11% 16.5 14.8 13.4 22.9 22.5 30.9 30.4 4.5 1.2
Greaves Cotton 118 2,015.3 2,216.9 2,438.5 180.5 172.1 180.4 7.5 7.5 7.8 2% 15.7 15.7 15.1 32.4 32.6 22.4 22.4 5.5 4.7
Kalpataru Power Transmission 470 7,115.0 8,378.0 9,662.0 401.0 455.4 529.0 26.2 29.7 34.5 15% 18.0 15.8 13.6 21.1 21.9 13.8 14.5 3.0 0.6
KEC International 301 11,001.0 12,946.0 15,289.0 486.0 584.2 713.6 18.9 22.7 27.8 21% 15.9 13.3 10.9 25.1 24.8 22.3 23.0 2.7 0.9
PTC India 55 13,496.0 15,346.0 16,918.0 262.0 331.0 411.0 8.9 11.2 13.9 25% 6.2 4.9 4.0 14.8 16.5 9.7 11.2 4.0 7.2

EQUITY FUNDAMENTALS EARNINGS GUIDE
CMP Sales Net profit EPS (%) EPS PE (x) RoCE (%) RoNW (%) DPS Div
Company
(Rs) FY19 FY20E FY21E FY19 FY20E FY21E FY19 FY20E FY21E growth FY19 FY20E FY21E FY20E FY21E FY20E FY21E Rs. Yld(%)
Thermax 1,063 5,973.2 6,136.5 6,899.7 325.4 378.3 431.2 28.9 33.6 38.3 15% 36.8 31.6 27.8 17.3 17.1 13.7 15.6 7.0 0.7
Triveni Turbine 100 840.0 940.0 1,053.5 100.2 116.7 133.7 3.1 3.6 4.1 16% 32.2 27.7 24.2 33.8 32.0 22.7 21.6 0.0 0.0
V-Guard Industries 228 2,566.4 2,936.7 3,396.4 165.5 211.6 265.6 3.9 5.0 6.2 27% 58.7 45.9 36.6 27.8 29.3 21.5 22.6 0.8 0.4
Va Tech Wabag 269 2,781.0 3,129.0 3,441.0 105.0 115.0 129.0 19.2 21.1 23.6 11% 14.0 12.7 11.4 12.2 13.5 10.2 10.4 4.0 1.5
Infra / Real Estate
IRB Infra 96 6,707.0 7,621.3 8,427.2 850.0 783.6 794.5 24.2 22.3 22.6 -3% 4.0 4.3 4.2 16.1 18.5 11.8 11.0 2.5 2.6
Larsen & Toubro 1,378 1,41,007.1 1,63,724.9 1,82,346.2 8,610.4 10,076.9 11,569.7 63.4 71.9 82.5 14% 21.7 19.2 16.7 9.0 9.9 15.2 15.7 18.0 1.3
Sadbhav Engineering 128 3,549.2 4,087.9 4,763.5 186.1 208.8 259.8 10.8 12.2 15.1 18% 11.8 10.5 8.4 9.0 9.7 9.8 11.1 1.0 0.8
Oil & gas
Oil India Ltd 154 13,735.0 13,824.1 13,765.8 3,616.9 3,406.4 3,294.5 33.4 31.4 30.4 -5% 4.6 4.9 5.1 14.6 13.7 11.9 11.0 10.7 6.9
Petronet LNG 232 38,395.4 46,307.3 51,399.0 2,291.4 2,514.2 2,809.6 15.3 16.8 18.7 11% 15.2 13.8 12.4 29.9 32.2 24.5 26.2 10.0 4.3
Reliance Ind 1,128 5,67,135.0 5,90,696.3 6,33,650.7 39,837.0 48,641.2 53,995.1 67.3 82.2 91.2 16% 16.8 13.7 12.4 11.0 11.0 12.6 12.4 6.5 0.6
Selan Exploration Technology 143 93.3 - - 51.5 - - 31.5 - - - 4.5 - - - - 0.0 - 5.0 3.5
Pharmaceuticals
Aurobindo Pharma 562 19,563.6 29,004.5 32,456.3 2,513.3 3,211.9 3,762.3 42.9 54.8 64.2 22% 13.1 10.3 8.8 19.9 19.3 20.7 19.8 2.5 0.4
Cadila Healthcare 226 13,165.6 14,368.2 16,183.2 1,801.9 1,854.0 2,097.6 17.6 18.1 20.5 8% 12.9 12.5 11.0 12.1 12.6 15.8 15.7 3.5 1.5
Cipla 500 16,362.4 17,785.9 21,203.6 1,492.4 2,077.1 2,905.1 18.7 25.8 36.1 39% 26.7 19.4 13.9 14.4 18.1 12.8 15.4 3.0 0.6
Divi's Labs 1,616 4,946.3 5,836.6 7,273.8 1,352.7 1,593.2 2,011.9 51.0 60.0 75.8 22% 31.7 26.9 21.3 31.0 32.8 24.0 25.1 16.0 1.0
Glenmark Pharmaceuticals 415 9,865.5 11,239.0 13,337.1 758.6 987.0 1,289.9 26.9 35.0 45.7 30% 15.4 11.9 9.1 16.1 18.4 15.1 16.7 2.0 0.5
IPCA Lab 949 3,773.2 4,224.9 5,054.9 442.2 568.6 716.5 35.1 45.1 56.8 27% 27.1 21.1 16.7 17.7 21.9 16.7 17.7 3.0 0.3
Lupin 751 16,718.2 18,312.1 20,764.8 946.5 1,271.9 1,587.9 20.9 28.1 35.1 30% 35.9 26.7 21.4 7.1 7.8 7.2 8.2 5.0 0.7
Sun Pharmaceutical Industries 418 29,065.9 34,051.2 41,841.8 3,879.8 5,428.7 7,375.1 16.2 22.6 30.7 38% 25.9 18.5 13.6 12.5 15.4 11.7 13.9 2.8 0.7
Torrent Pharma 1,672 7,462.0 8,450.4 10,255.9 793.0 1,014.4 1,622.8 46.6 59.7 95.5 43% 35.9 28.0 17.5 15.8 20.7 19.5 25.3 4.0 0.2
Building Materials
Grasim 762 20,550.4 23,404.3 25,975.2 2,883.3 2,751.5 3,060.0 43.9 41.9 46.6 3% 17.3 18.2 16.3 5.7 5.9 6.2 6.4 7.0 0.9
Shree Cement 20,206 11,722.0 13,380.9 15,404.4 1,138.7 1,314.5 1,673.0 326.8 377.3 480.2 21% 61.8 53.6 42.1 11.4 12.8 12.9 14.6 60.0 0.3
The Ramco Cements 736 5,146.3 5,850.1 6,775.0 501.0 599.2 746.4 21.3 25.4 31.7 22% 34.6 28.9 23.2 8.7 9.8 12.7 14.1 3.0 0.4
UltraTech Cement 4,357 37,379.2 44,345.9 51,215.7 2,434.7 3,112.8 4,156.2 88.7 107.9 144.0 27% 49.1 40.4 30.3 8.1 9.5 10.4 12.6 11.5 0.3
Discretionary
Arvind* 54 7,142.2 7,608.1 8,271.5 265.8 229.7 251.9 8.9 8.9 9.7 5% 6.0 6.1 5.5 6.4 6.5 8.1 8.4 2.0 3.7
Century Plyboards (India) 115 2,280.4 2,582.4 2,902.9 166.2 176.8 211.7 7.5 7.9 9.5 13% 15.4 14.5 12.1 13.7 14.6 16.9 17.4 1.0 0.9
Info Edge (India) 2,151 1,098.3 1,304.4 1,549.8 315.1 375.0 453.2 25.8 30.8 37.2 20% 83.4 69.8 57.8 19.4 20.4 14.2 14.9 6.0 0.3
Inox Leisure 284 1,692.0 2,047.9 2,405.2 138.5 106.3 133.7 14.1 10.8 13.6 -2% 20.2 26.3 20.9 17.4 13.3 14.6 15.6 0.0 0.0
Kewal Kiran Clothing Ltd 977 502.4 555.4 623.6 80.3 88.4 99.3 65.1 71.7 80.5 11% 15.0 13.6 12.1 16.8 17.4 19.7 20.2 34.0 3.5
Orbit Exports 100 138.6 145.5 157.1 23.5 26.8 27.9 9.1 9.5 9.9 4% 10.9 10.5 10.1 19.3 18.1 13.4 12.2 0.0 0.0
Relaxo Footwear# 429 2,292.1 2,696.9 3,197.2 175.4 221.9 285.5 7.1 8.9 11.5 27% 60.4 48.2 37.3 24.2 25.7 18.7 20.7 1.8 0.4
Titan Company Limited 1,038 19,778.5 22,632.5 26,575.2 1,519.0 1,688.1 2,094.5 17.1 19.0 23.6 18% 61.4 55.0 44.4 34.6 35.7 25.4 26.1 5.0 0.5
Wonderla Holidays 244 282.0 330.8 396.1 55.4 72.3 91.8 9.8 12.8 16.2 29% 24.9 19.1 15.1 12.2 14.8 8.6 10.3 1.8 0.7
Zee Entertainment 312 7,933.9 8,936.6 9,955.0 1,576.7 1,822.8 2,087.5 16.4 19.0 21.7 15% 19.0 16.5 14.4 23.6 23.5 17.7 17.6 3.5 1.1
Diversified / Miscellaneous
Bajaj Holdings 3,447 426.7 - - 3,048.8 - - 273.9 - - - 12.6 - - - - - - 32.5 0.9
Bharat Electronics 97 12,164.0 13,988.9 15,912.4 1,886.4 2,011.0 2,188.0 7.7 8.3 9.0 8% 12.5 11.7 10.8 20.5 20.3 20.7 20.2 1.7 1.8
Bharti Airtel 368 80,780.2 87,306.0 93,849.2 (4,021.4) (3,837.1) (1,749.1) -10.1 -7.5 -3.4 -42% - - - 3.4 3.9 - - 2.5 0.7
Gateway Distriparks 103 430.6 1,324.7 1,404.2 84.6 101.7 111.9 7.8 9.4 10.3 15% 13.2 11.0 10.0 10.7 11.9 7.8 9.2 7.0 6.8
PI Industries 1,089 2,841.0 3,445.0 4,134.0 410.0 530.0 684.0 29.8 38.5 49.7 29% 36.6 28.3 21.9 26.9 28.6 21.0 22.3 4.0 0.4
Ratnamani Metals and Tubes 930 2,755.0 3,048.0 3,400.0 253.0 276.0 303.0 54.0 59.0 64.7 9% 17.2 15.8 14.4 22.1 22.3 17.6 17.9 9.0 1.0
Supreme Industries limited 1,053 5,612.0 6,365.4 7,192.5 381.4 440.1 509.7 30.0 34.7 40.1 16% 35.1 30.4 26.2 25.7 26.4 18.0 18.4 13.0 1.2
UPL# 549 21,837.0 35,485.0 39,477.0 1,898.0 3,313.0 3,817.0 18.9 38.0 45.0 54% 29.1 14.5 12.2 12.7 13.9 21.2 21.3 5.3 1.0
Note: Grasim- Changed reporting to standalone financial numbers Arvind’s financials are derived after taking out the branded apparel, retail and engineering business
Relaxo Footwear post 1:1 bonus UPL post 1:2 bonus

Remarks
Automobiles
Apollo Tyres  Apollo Tyres Limited (ATL) is the market leader in the truck and bus tyre segments in India. The company is
present in the Indian and European markets. ATL’s domestic business (70% of revenue) is under pressure as OEM
demand has decelerated sharply. The management has sharply cut its FY2020 domestic market growth guidance
to flat as against 10% growth projected earlier. Increased depreciation expenses (30% increase in FY2020) due
to commencement of new Andhra Pradesh plant and lease accounting under AS116 and higher interest expenses
would lead to earnings falling sharply by 17% in FY2020. We downgrade our recommendation to Hold from Buy
earlier.
Ashok Leyland  Ashok Leyland Limited (ALL), the second largest CV manufacturer in India, is a pure play on CV. The MHCV
industry’s growth has turned negative after five consecutive years of growth. An economic slowdown, impact of
revised axle-load norms (players have increased capacity by 15-20%) and pressure on freight rates have pulled
down MHCV growth. Moreover, the industry is likely to witness a sharp 12-14% increase in costs with the transition
to BS-VI norms with effect from April 1, 2020, which would further dampen demand. We believe the MHCV
industry is amid a downcycle and expect a drop in volumes during FY2019-FY2021. We retain our Reduce rating
on the stock.
Bajaj Auto  Bajaj Auto Limited (BAL) is a leading motorcycle and three-wheeler manufacturer with a significant presence in
export markets. In the domestic market, it is a leader in the premium motorcycle segment. BAL has successfully
gained market share in the domestic motorcycle segment, led by aggressive pricing. Its market share has surged
from 15.6% in FY2018 to 18.8% for FY2019. BAL’s topline growth is likely to moderate sharply to a low single-digit
growth in FY2020. Domestic demand headwinds coupled with moderating growth in exports would drag topline
growth. Further, margin drop on account of steep regulatory cost increases and introduction of new products at
aggressive prices would lead to earnings dropping in FY2020. We retain our Reduce rating on the stock.
Gabriel India  Gabriel India Limited (GIL) is one of India’s leading manufacturers of shock absorbers and front forks manufacturer
with a diversified customer base. The outlook from auto OEMs has substantially deteriorated. Topline growth of
Gabriel is expected to moderate in FY2020, given the slowdown in the automotive OEM segment particularly
two-wheeler (2W) and passenger vehicle (PV), which contribute about 75% to the topline. Management has
indicated that it is unable to fully pass on cost increases to OEM customers in wake of weak demand environment.
Moreover, Gabriel’s product mix is expected to remain adverse with lower share of the PV segment and expect
Gabriel’s margins to drop by 60 BPS in FY2020. We retain our Hold rating on the stock.
Hero MotoCorp  Hero MotoCorp Limited (Hero) is one of the largest 2W manufacturer. FY2019 ended on a weak note for the
2w industry as well as the company. Hero’s volume growth slowed down substantially to a meager 3%. The 2W
industry’s demand is likely to remain under pressure due to weak consumer sentiments and higher inventory.
We expect the 2W industry to decline in FY2020 and expect Hero’s volumes to drop by 7% in FY2020. Declining
volumes would lead to negative operating leverage, which coupled with higher competitive intensity would
increase costs and lead to margin contraction. Consequently, we expect earnings to drop in FY2020.
M&M  M&M is a leading manufacturer of tractors and utility vehicles in India. It is a leader in the tractor segment. M&M’s
Q1FY20 results missed estimates due to a margin miss in the automotive segment and higher depreciation and
lower other income which lead to PAT miss. M&M’s automotive volume outlook has turned challenging due to
weak consumer sentiment, liquidity crunch and we expect declining trend to continue in medium term. Also, the
management has cut FY2020 tractor growth forecast to flat from 5-6% growth projected earlier. Overall M&M’s
volumes are expected to drop by 4% CAGR over FY19-21. Negative operating leverage, high cost pressures would
lead to margin contraction while high depreciation and tax expense would further drag PAT. We downgrade our
recommendation on the stock to Hold.

Maruti Suzuki  Maruti Suzuki India Limited (MSIL) is India’s largest passenger vehicle (PV) manufacturer. The company reported
a strong 51% market share as of FY2019. The passenger vehicle industry ended FY2019 on a weak note with
volumes growing marginally by 3%. The domestic PV industry has remained under pressure over the past 2-3
quarters. Volumes in Q1FY2020 dropped steeply by 18% y-o-y. Slow economic growth, liquidity issues and
delayed monsoon resulting in rural stress and regulatory cost increase would pressurise volumes. We expect
the passenger vehicle industry’s volumes to decline. Operating de-leverage, increasing cost pressures and high
sales and promotion expenses would drag margins. Consequently, we expect MSIL’s earnings to remain flat. We
retain our Hold Rating on the stock.
TVS Motor  TVS Motor (TVSM) is the fourth largest 2W manufacturer in the country with a strong presence in the scooter
segment. The company manufactures mopeds and motorcycles as well. The domestic 2W industry’s volumes are
on a declining trend and TVSM expects the trend to continue and has guided for a volume drop in the remainder
of 9MFY2020. Slow economic growth, rural stress and increased ownership cost due to the upcoming BS6
emission norms would impact demand. TVSM’s volume growth is expected to decelerate sharply to flat growth
in FY2020 as against 13% growth in FY2019. Margins are unlikely to improve in FY2020, given elevated costs
and high competitive pressures. Increased tax rates, higher depreciation and interest expenses would impact
earnings. We expect TVSM’s earnings to drop in FY2020. We downgrade our recommendation to Reduce from
Hold.
Banks & Finance
Axis Bank  Axis Bank is the third-largest private sector bank, which is growing faster than the industry and has a well-
diversified loan book having strengths in both retail and corporate segments. The bank’s liability profile has
improved significantly, which would be helpful in sustaining margins at healthy levels. Of late, asset quality is
improving, which we believe is positive for its profitability and growth going forward. Business restructuring as
well as drivers such as normalisation of corporate fee income and growth coming from retail plus midmarket group
are steps in the right direction, which will augment sustainability and profitability. We expect earnings growth to
remain reasonably strong, driven by healthy operating performance. Asset-quality pressure has peaked out and
we expect long-term outlook to improve.
Bajaj Finance  Bajaj Finance, owned by Bajaj Finserv, is a fast-growing, well-diversified leading NBFC in the country. The
company has its assets spread across products, viz. loans for consumer durables, two-wheelers and 3Ws, loans
to small and medium enterprises (SME), mortgage loans and commercial loans. Apart from its strong loan growth,
asset quality and provisioning performance for Bajaj Finance remain among the best in the system. Given the
strong growth rate, high margins and attractive return ratios, its premium valuations within the NBFC space are
expected to be maintained.
Bajaj Finserv  Bajaj Finserv is a financial conglomerate present in the financing business (vehicle finance, consumer finance
and distribution) and is among the top players in the life insurance and general insurance segments. We expect
its subsidiary, BFL, to maintain its loan book trajectory as well as profitability and margins, which will be the key
support for present valuations of Bajaj Finserv. BAGIC is expected to continue its healthy operating metrics and
profitability going ahead, but near-term challenges are likely to keep profitably in a range. BALIC is focusing well
on strengthening its distribution channel and protection business but profitability metric will be dependent on the
pace and segment of new business growth.
Bank of Baroda  Bank of Baroda has a network of over 5,500+ branches, spread across the country and abroad, along with
a diversified products and services portfolio and strong client relationships. Performance in terms of business
growth as well as profitability and asset-quality improvement is gradual but in the desired direction. Two others
PSU banks are being merged with Bank of Baroda. Notwithstanding the synergies that will accrue over a longer
period, we believe near-term challenges in terms of asset quality and integration issues of merged entity may
mute medium-term performance.

Bank of India  Bank of India has a network of over 5,000+ branches, spread across the country and abroad, along with a
diversified products and services portfolio. Operating performance and earnings had eroded due to a sharp rise
in NPAs. However, going forward, credit traction is expected to start gradually as the bank exits PCA framework.
There are pockets and segments that are undergoing significant stress, which can be exacerbated by the current
economic slowdown, if it persists. Moreover, the overhang of big-ticket infrastructure and corporate loans still
exists, which is likely to keep upside limited.
Federal Bank  Federal Bank is among the better-performing old private sector banks in India with a strong presence in south
India, especially Kerala. We believe the bank’s growth is in the desirable direction and the accompanying vectors
indicate sustainability and quality of the bank. Earnings and margins may continue to remain under pressure
mainly due to asset quality yet to attain its normalised credit cost run rate in the near term. Valuations seem
attractive over the medium to long term.
HDFC  HDFC Limited is among the top-performing housing finance companies in the country having deep roots in
the retail segment. Despite the general slowdown in credit growth, HDFC continues to report strong growth in
advances with stable margins. Aided by a strong business franchise, best-in-class credit ratings and impeccable
asset quality, HDFC is a safe bet with a scope for steady business growth-led value creation.
HDFC Bank  HDFC Bank is among the top performing banks in the country having deep roots in the retail segment. Despite the
general slowdown in credit growth, the bank continues to report strong growth in advances from retail products.
Relatively high margins (compared with its peers), strong branch network and better asset quality make HDFC
Bank a safe bet with a scope for expansion in its valuations.
ICICI Bank  ICICI Bank is India’s largest private sector bank with a network of over 4,882 branches. The bank has made
inroads in to retail loans (~60% of the book) and has significantly improved its liability franchise. We believe NPA
cycle peaking and uncertainty regarding top leadership behind, along with strong capital adequacy and a wide
branch network, the bank’s business will gather pace in the long run. However, we believe normalisation in
operating expenses and abatement of slippages can be positive levers for ROE and profitability in the medium
term. The bank appears to be well positioned to benefit from reduction in competitive intensity from NBFCs
and political stability is expected to gather pace in reforms such as IBC, which will be positive for recoveries/
resolutions and credit demand revival.
LIC Housing  LIC Housing Finance is one of the largest mortgage financiers in India with a market share of ~ 11%. The company
is promoted by Life Insurance Corporation of India. With over 282 branches, 1,241 direct sales agents, 6,535
home loan agents and 782 customer relationship associates, the company has one of the strongest distribution
networks to support business expansion. Though factors such as rising interest rates and a strong parent bode
well for the NBFC, we believe increasing competitive pressures may keep NIM range-bound in the near to
medium term. The overhang of rising developer book proportion, limited scope of ROA expansion, increasing
risk of delinquencies in the real estate segment and modest growth outlook indicate limited upsides for the stock
in the near term.
Max Financial Services  Max Life Insurance is held by Max Financial Services and is among the leading private sector insurers and has
gained critical mass and enjoys the best operating parameters in the industry. As the insurance sector is showing
signs of stability, the company’s favourable product mix and a strong distribution channel augur well and will help
sustain healthy growth in premiums and profits.
PNB  Punjab National Bank (PNB) has strong liability mixes in the banking space, with low-cost deposits constituting over
43% of its total deposits. PNB has done a significant amount of business and process enhancement/upgradation
to mitigate operational and credit risk after the fraud, yet asset-quality performance will be keenly monitored.
Further resolution/recovery in NCLT exposures as well as other corporate/infra exposures can be positive for the
bank. Risks of chunky slippages/haircuts are present in the near term.

SBI  State Bank of India (SBI) is the largest bank of India. The successful merger of associate banks and value unlocking
from the insurance business could provide further upside for the bank. While the bank is favourably placed in
terms of liability base and the operating profit is better than peers, asset quality is also improving aided by strong
resolution/recoveries. PSU bank recapitalisation by the government would benefit the bank to make up for capital
requirements and promote growth. The bank is also well placed to gain market share as well as key clients.
Union Bank of India  Union Bank of India has a strong branch network and an all-India presence. The bank aspires to become the
largest retail and MSME bank. Hence, it has ramped up its manpower and infrastructure to ramp up retail and SME
lending. The bank’s asset-quality challenges have come to the fore (mainly from the corporate portfolio), whereas
weak capital position remains an area of concern.
Yes Bank  Yes Bank, a new generation private bank, started its operations in November 2004. Cleaning up of books with
a view to improve book quality and business mix is positive, but recent events indicate that the twin problems
of regulatory overhang and questions on near-term capital raising have returned for the bank. However, in the
backdrop of rating downgrades as well as concerns on governance issues resurfacing, we believe raising equity
capital for the bank becomes difficult once again. We believe the outlook has deteriorated meaningfully. Hence,
investor caution is warranted.
Consumer goods
Britannia  Britannia is one of the largest domestic biscuit and snacking company (gained No. 1 position in domestic biscuit
market, out beating Parle) with turnover over Rs. 10,000 crore. Under a new leadership, Britannia has been able to
leverage and monetize its strong brand and premium positioning in the biscuits and snacks segments (achieved
volume growth of 7% in Q4FY2019). The company is well placed to sustain its higher-than- industry growth rate
with an improving distribution reach, deep penetration in rural India, enhanced international business, entry into
newer categories and focus on cost efficiency.
Emami  Emami is one of the largest players in the domestic FMCG market with a strong presence in underpenetrated
categories such as cooling oil, antiseptic cream, balm and men’s fairness cream. The initiatives behind key
brands (such as Kesh King and Zandu Pancharishta) have started giving positive results for the company with
brands such as Kesh King and Boro Plus range delivering double-digit revenue growth in Q4FY2019. On the
margin front, management expects OPM to sustain at ~27% due to stringent cost-saving initiatives taken by the
company. Any substantial improvement in volume growth trajectory to 7-9% from the current 2-3% in the domestic
business would act as a key re-rating trigger for the stock. In view of near-term headwinds, we maintain our Hold
recommendation on the stock.
GSK Consumer  GSK Consumer Healthcare is a leading player in the malted food drinks (MFD) segment with ~70% share in
the domestic market. We expect volume growth to be in mid to high single digits in the near to medium term.
Though input prices have increased in the recent past, price hike of 3-4% in January-July 2019, better absorption
of overheads and cost efficiencies would lead to OPM at 22-23%. In December, GSK PLC exited from the Indian
nutrition business and sold 100% stake in GSK Consumer to HUL in an all-equity deal valued at Rs. 31,700 crore
(share exchange ratio is 4.39 shares of HUL for every share of GSK Consumer).. Business fundamentals of the
company have improved, which will result in better performance in the coming quarters. We maintain our Hold
GCPL  Godrej Consumer Products Limited (GCPL) is a major player in the personal wash, hair colour and household
insecticide market segments in India. Q1FY2020 was the ninth consecutive quarter of single-digit revenue growth
for GCPL with domestic and international business registering sub-par performance. Recovery in the domestic HI
category will take some time to come back to double-digit growth On the international front, Indonesia and GAUM
will see recovery in sales due to improvement in Indonesia’s HI segment and re- launch of Darling brand and

scale-up of Wet hair care in the east and west cluster. However, volatile currency will continue to affect margins.
The sustenance of lacklustre performance in some of the key categories in the domestic market (including HI)
remains a key concern in the near term. In view of near-term headwinds, we maintain our Hold recommendation
on the stock.
HUL  Hindustan Unilever Limited (HUL) is India’s largest FMCG company. HUL reported decent operating performance
with 6% volume growth in Q1FY2020 in the backdrop of a tough demand environment. We expect volume
growth to stand at 5-7% in the near term and expect it to improve gradually with improved demand environment.
This would result in 8-10% revenue growth in the coming quarters. The sharp decline in palm oil prices (down
by 20%+) along with steady volume growth would help post better operating margin in the coming quarters.
However, volatility in crude oil prices will play a key role in determining profitability in the coming quarters.
Further, the recent acquisition of GSK Consumers’ domestic health food business will scale up HUL’s food
business and will help it grow in double digits in the near to medium term. HUL remains one of our top picks in
the FMCG space.
ITC  Sales volume growth for the cigarette business stood at 3% in Q1FY2020. Though a price hike was undertaken
in 20% of its cigarette portfolio, there will not be any significant impact on sales volume as the premium portfolio
has not seen any changes in the price and the price hike in these brands was taken with a gap. Revenue of the
non-cigarette FMCG business is expected to grow in high single digits to low double digits in the near term as
the slowdown in demand is likely to persist in the near term. However, a higher scale will support the business’
overall margins in the medium term. We expect the company’s hotel business to also deliver strong performance
FY2020, with demand for rooms likely to exceed room supply. The paper, paperboard and packaging (PPP)
business will continue to post better profitability on account of a better revenue mix and benign input cost. With
performance of ITC expected to improve in the coming quarters, we expect the valuation gap to reduce. We
maintain our Buy recommendation on the stock.
Jyothy Labs  Jyothy Laboratories Limited (JLL) is the market leader in the fabric whitener segment in India. With a strong brand
portfolio in the fabric care and dishwashing space, JLL is well poised to achieve revenue growth in mid-teens in
the near to medium term. However, the HI category will take some time to recover. The company expects OPM
to sustain at 15-16% in FY2020. However, the company has intentions of doubling its advertisement expenditure
in FY2020. Thus, we expect slight deceleration in margins in FY2020. We have a Hold recommendation on the
stock. Any improvement in the performance of HI category will improve earnings visibility for JLL in the near
term.
Marico  Marico is among India’s leading FMCG companies. Core brands, Parachute and Saffola, have a strong foothold
in the market. Management expects volume growth to sustain at 5-6% in the near to medium term. The company
is going to invest in low-cost products in the VAHO segment to drive growth going ahead. Saffola edible oil has
started seeing recovery in sales volume and is expected to grow in mid-teens in the coming quarters. Probable
price cut due to sustained softening in copra prices would further improve the volume growth trajectory. Copra
prices (35-40% of Marico’s raw-material cost) are down by upwards of 30% and softening price trend would aid
margins to remain high on a y-o-y basis in the near to medium term. We maintain our Buy recommendation on
the stock.
Zydus Wellness  Zydus Wellness now has a product portfolio of brands such as EverYuth, Nutralite and Sugar Free along with
Glucon D and Complan post the acquisition of Heinz India. Zydus Wellness has a strong portfolio of leading
brands, which are largely placed in low-penetrated categories. The company posted strong results in Q1FY2020
with double-digit revenue growth, driven by 10% growth in the base portfolio and about 20% growth in Heinz
portfolio. OPM stood at 20% in Q1FY2020 and management is confident of improving the OPM trajectory to 22%
over the next two years. We have a Buy rating on the stock.

IT/IT services
HCL Tech  HCL Technologies has a leadership position in infrastructure management services (IMS) and engineering and
research and development (ERD) space, which together account for ~60% of the company’s total revenue. HCL
Tech has guided for 14-16% constant currency (CC) revenue growth for FY2020E, which includes contribution
from acquisition of IBM’s select products and full-year revenue from other acquisitions (Strong-Bridge Envision,
H&D International group and Actian Corporation). Organic revenue contribution to overall FY2020E revenue
growth is expected to be at 7-9% (6.5% y-o-y in FY2019), though it would be mostly back-ended. However, the
company has reduced its margin guidance by 100 BPS owing to soft EBIT margin in Q1FY2020E, transition costs
of large deal ramp-ups and higher investments in digital.
Infosys  Infosys is India’s premier IT and ITeS company that provides business consulting, technology, engineering and
outsourcing services. The company expects its pentagon agile digital service architecture would help to address
the client’s digital requirements. Further, management has set a three-year roadmap to achieve growth objectives
Infosys raised its FY2020E revenue growth guidance to 8.5-10.0% in CC terms from 7.5-9.5% earlier, better-than
our expectation of keeping guidance flat. Further, the company increased its payout ratio to 85% from 70% earlier.
With a healthy deal pipeline, continued strong large deal wins momentum and growth from large accounts, we
believe Infosys would deliver strong revenue growth in FY2020E.
Persistent  Persistent Systems has proven expertise, strong presence in newer technologies, strength to improve its IP
base and a decent margin profile, all of which set it apart from other mid-cap IT companies. PSL is focusing on
the development of Internet of Things (IoT) products and platforms, as it sees significant traction from industrial
machinery, SmartCity, healthcare and smart agriculture verticals. However, the company has been lagging its
peers in terms of revenue growth over FY2017-2019, owing to internal challenges including high dependence
on its large account, weak client franchise, change in sales model and high reliance on IBM sales to drive its IP
revenues. We believe revenue growth in FY2020E could lag the average growth rate of its mid-tier peers owing
to early days of investments in its strategies and change in senior leaderships. Reasonable valuation, high cash
and cash equivalents (31% of market capitalisation) are expected to provide downside support to the stock price.
TCS  Tata Consultancy Services is among the pioneers of the IT services outsourcing business in India and is the largest
IT services firm in the country. Management of TCS has alluded at continuing of growth momentum in FY2020E,
despite witnessing macro challenges in the environment, led by a strong exit rate in FY2019, acceleration in
deal wins with increasing TCVs, continued strong performance in BFSI vertical and robust pipeline of deals.
Management remains confident on demand environment and maintains its aspirational margin band of 26-28%
for FY 2020E despite lack of skilled personnel and visa challenges in the US.
Wipro  Wipro is among the top five IT companies in India. Revenue growth guidance of 0-2% in CC terms for September
2019 quarter was below our expectation. We expect revenue growth in FY2020E could be lower than underlying
revenue growth of Fy2019 owing to its high exposure to the impacted segments of financial services, viz. capital
markets and European banks. With inconsistent execution along with macro uncertainties, underperformance on
revenue growth among large peers will likely continue.
Capital goods/Power
CESC  CESC, an RP-Sanjiv Goenka Group company, is a fully integrated power utility company. The company has stable
earnings contribution from standalone operations with regulated power generation and distribution businesses
getting assured RoE of 15.5% on generation assets and 16.5% for distribution assets. Reducing loss at Dhariwal
Infrastructure and Rajasthan distribution franchisee makes CESC an attractive investment proposition. The
demerger of non-power business to separate companies could result into re-rating of CESC.
Finolex Cables  Finolex Cables, a leading manufacturer of power and communications cables, is set to benefit from an improving
demand environment in its core business of cables. The company is leveraging its brand strength to build a
high-margin consumer product business although scaling up the business would be gradual. The company faces

near-term headwinds due to delay of order finalisation in the communication cables business segment along
with delay in scaling-up the consumer durable business. We have a Hold rating on the stock due to near-term
challenges in its key business vertical.
Greaves Cotton  Greaves Cotton Limited (GCL) is a mid-sized and well-diversified engineering company. Core competencies of
the company are in diesel/petrol engines, power gensets, agro engines and pump sets (engine segment). Three-
wheeler (3W) engines that fetch about 40% of revenue for GCL are predominantly diesel and are facing severe
headwinds, which would restrict growth. With increasing pollution, the government is encouraging use of CNG-
powered 3W and has recently lifted need of permits for CNG vehicles. CNG-powered 3W are fast gaining share,
primarily at the expense of the diesel three-wheeler segment. Non-auto and aftermarket business along with new
business of electric 2w and CNG engines is gaining traction. The Electric two-wheeler segment is expected to be
under stress due to stringent norms for electric scooters under the revised FAME 2 scheme and weak sentiment
in rural areas. Further the new businesses are margin dilutive and the cost of upgrading to the new BS6 emission
norms is around 10-12%. Following this we expect GCL’s margins to remain under pressure and decline 40 BPS in
FY2021. Moreover, the company has announced a buyback offer and plans to utilize its cash balance, resulting
a lower other income. We expect GCL’s earnings to remain flat over the next 2 years. However, the buyback
program would enhance the company’s ROE from 18.5% now to 22% by FY2020 and expect the program to
support the prices in the near term. We retain our Hold recommendation on the stock.
Kalpataru  Kalpataru Power Transmission is a leading EPC player in the power transmission and distribution space in India.
Opportunities in this space are likely to grow significantly, thereby providing healthy growth visibility. OPM of the
standalone business is likely to remain around 11%, while OPM of JMC Projects (a subsidiary) is showing signs of
improvement. Order book remains healthy, providing two years of revenue visibility. Further, acquisition of the
Swedish EPC company, Linjemontage i Grastorp AB, bodes well for Kalpataru, providing deeper access to KPTL
in international markets. We remain Positive on the stock.
KEC  KEC International is a Global Power Transmission Infrastructure EPC major. The company is present in the verticals
of power T&D, cables, railways, water, renewable (solar energy) and civil. Globally, the company has powered
infrastructure development in more than 61 countries. KEC is a leader in power transmission EPC projects and has
more than seven decades of experience. Over the years, it has grown through the organic as well as inorganic
route. Order book remains strong, providing two-year revenue visibility; and order inflow visibility remains healthy
in international T&D and railways. We retain our Positive outlook on the stock.
PTC India  PTC is a pioneer in starting a power market in India and undertakes trading activities, including long-term trading
of power generated from large power projects as well as short-term trading arising as a result of supply and
demand mismatches, which inevitably arise in various regions of the country. Management anticipates volume
growth of 10%+ and volume mix of 50:50 during FY2020. Management also contemplates that it wants the
company to post earnings of Rs. 1 crore per day and is working towards this goal. The company is expected to
witness double-digit earnings CAGR over FY2019-FY2021E.
Thermax  The energy and environment businesses of Thermax are direct beneficiaries of the continuous rise in India Inc’s
capex. The company has a healthy consolidated order backlog at Rs. 5,370 crore, which is 0.9x its FY2019
consolidated revenue. Management expects weakness in domestic tendering activity to persist at least during
H1FY2019 as the new government stabilises. Overall, management would strive to maintain the same order inflow
for FY2020 as witnessed in FY2019. Consequently, consolidated revenue for FY2020 might see just lower single-
digit growth followed by higher growth during FY2021. We maintain our Hold rating on the stock.
Triveni Turbines  Triveni Turbines Limited (TTL) is a market leader in 0-30 MW steam turbine segment. TTL order book remains
healthy and is witnessing steady execution for its ongoing orders. Preponed deliveries of some products and better
execution of orders with improvement in operating profit margin drove up net earnings. The overall performance
of GETL for the period under review has been significantly better, especially in terms of revenue. Enquiry pipeline

remains healthy although fructifying of the same remains to be seen in a weak macro environment. TTL is virtually
a debt-free company with limited capex requirement and an efficient working capital cycle, reflected in healthy
return ratios. Although management is confident of double- digit revenue growth, healthy order inflow for FY2020
and margin recovery, we have conservatively built these in our estimates. Revenue and PAT are expected to
report CAGR of 12% and 16%, respectively. We maintain our Hold rating on the stock.
V-Guard  V-Guard Industries is an established brand in the electrical and household goods space, particularly in South India.
Over the years, it has successfully ramped up its operations and network to become a multi-product company.
The company has a strong presence in the southern region. The company is also aggressively expanding in
non-south markets and is particularly focusing on tier-II and III cities where there is lot of pent- up demand for
its products. Management is targeting to grow its overall revenue by 12-15% y-o-y in FY2020 (with enhanced
focus on non-south region with addition of 60-70% retail count of overall 3500-4000 per annum). and 100
BPS improvement in gross margin (led by product mix and price increase). V-Guard’s focus areas remains on
increasing non-south presence, expansion into adjacencies and improving efficiencies. Strong cash position may
lead to inorganic expansion at favourable valuations, considering weak environment. We believe V-Guard is on a
strong growth trajectory, hence, we upgrade the stock to Buy.
Va Tech Wabag  VaTech Wabag is known for its innovative and successful solutions in the water engineering sector around the
globe. The company is a systems specialist and full-service provider focusing on the planning, installation and
operations of drinking and wastewater plants for local government and industry in the growth markets of Asia,
North Africa, Middle East and Central and Eastern Europe. Management has provided revenue guidance of Rs.
34 billion-37 billion and order intake of Rs. 50 billion-54 billion for FY2020. The cumulative order book stood at
Rs. 9,200 crore at the end of FY2019, including framework contracts worth Rs. 700 crore. Timely execution and
reduction in working capital a key challenge. Hence, we maintain our Hold rating on the stock.
Infrastructure/Real estate
IRB Infra  IRB Infrastructure Developers is the largest toll road BOT player in India and the second largest BOT operator
in the country with all its projects being toll-based. The company has an integrated business model with an in-
house construction arm, which provides a competitive advantage in bidding for larger projects and captures
the entire value from BOT assets. Further, the company has a profitable portfolio as majority of its operational
projects have become debt-free and are present in high-growth corridors, providing it a healthy cash flow. Thus,
the company is well poised to benefit from the huge opportunity in road development projects on account of
its proven execution capabilities and scale of operations. Further, the company has a 15% stake in its InvIT fund,
which allows it to periodically transfer road assets freeing up its equity to invest in future projects. The recent deal
with GIC provides IRB with an unlisted private InvIT vehicle to transfer future projects, lower equity requirement
for projects and a strong financial partner to bid for more and larger projects going ahead.
L&T  Larsen & Toubro (L&T), being the largest engineering and construction company in India, is a direct beneficiary of
the domestic infrastructure capex cycle. The company is expected to perform well, backed by its sound execution
track record and healthy order book. Monetisation of the non-core businesses will continue for some time, leaving
scope for further value unlocking. Measures planned by the company to improve its return ratios augur well.
Hence, we remain Positive on the stock.
Sadbhav Eng  SEL is engaged in 1) EPC business for transport, mining and irrigation sectors and 2) development of roads and
highways on BOT basis through SIPL. SEL has a healthy order book of Rs. 11,981 crore (3.4x its FY2019 standalone
revenue) The company has robust in-house integrated execution capabilities with qualified human resource and
owned equipment. We expect SEL to benefit from improved order execution, enhanced order inflows (particularly
from the transport segment) and resolution of working capital issues, resulting in a sturdier balance sheet. Further,
improving outlook for the Indian road sector and limited competitive intensity augur well for SEL since it is present
in both, asset creation and EPC verticals.

Oil & Gas
Oil India  Oil India has several hydrocarbon discoveries across reserves in Rajasthan and the northeastern region of India.
The company holds domestic 2P (proved and probable) reserves of 76 mmt for oil and 130 bcm for gas. Reserve-
replacement ratio of the company is also healthy. The stock offers high dividend yield.
Petronet LNG  Petronet LNG is the largest LNG re-gasifier in India with 17.5 mmt LNG terminal at Dahej and 5 mmt LNG terminal
at Kochi. The company’s Dahej terminal enjoys a competitive edge compared to other LNG import terminals given
its low tariff and long-term contracted volume with use or pay clause. We expect Dahej terminal to operate at
100% utilisation, given its competitive edge and resolution of pipeline connectivity issues in southern India are
expected to improve utilisation for Kochi terminal. Petronet LNG would be the key beneficiary of rising share of
LNG in India’s overall gas consumption.
Reliance Industries  Reliance Industries has one of the largest and complex refining businesses in India and enjoys a substantially
higher refining margin over the benchmark Singapore Complex GRM. We expect GRM to recover with ramp-up of
petcoke gasification project and implementation of IMO regulations. Petrochem margin likely to be maintained in
the medium term given feedstock advantage from ethane import project. Large investment in Reliance Jio could
add value in the long term. Deleveraging of consolidated balance sheet is a key trigger in the near to medium
term.
Selan Exploration  Selan Exploration Technology is an oil E&P company with five oil fields in the oil-rich Cambay basin of Gujarat.
Initiatives to monetise oil reserves in its Bakrol and Lohar oil fields will improve production. However, challenges
related to monetisation of its large hydrocarbon reserve base and near-term production ramp-up issues are likely
to be an overhang on the stock in the near to medium term.
Pharmaceuticals
Aurobindo Pharma  A Warning Letter has been issued to Aurobindo for its Unit-XI, an Active Pharmaceutical Ingredient (API) unit in
Srikakulam, one of the three plants that received Official Action Indicated (OAI) status in May 2019. The letter
mainly pertains to the ongoing issues regarding impurities in Sartan’s. The company proposes to enter into
dialogue with the U.S. FDA over the next 15–20 days to decide a future course of action. From Unit XI, the
company has ~28 filings that await approval, the delay of which may negatively impact performance ahead.
Moreover, the remediation and site transfer-related costs are likely to put the company’s near-term margins under
pressure. The uncertainty related to regulatory hurdles at various units will weigh on the stock (until resolved
successfully). Thus, we downgrade our recommendation to Hold with a downward revised PT of Rs. 710.
Cadila  U.S. business outlook remains stable because of new product approvals and launches planned for FY2020.
Management expects ~35+ approvals and 35-40 launches in the U.S. for FY2020 (excluding approvals and
launches from Moraiya facility as it has received Form 483 in March 2019). Moreover, India business is likely
to report low double-digit growth from FY2020 despite new product launches and rationalisation of product
portfolio. We feel that although Cadila has a big ANDA pipeline and strong control on expenses, its domestic
business lacks its peers in terms of growth. Further, concentration on key markets such as U.S. and India is a risk.
In addition, regulatory hurdles at Moraiya facility continue to remain an overhang for the near term.
Cipla  Current valuation seems to have mostly priced in the slowdown in the India branded business and increased
competition in the US despite limited launches by competitors. The stock has corrected by ~25% from its high
and is currently trading at 14.4x its FY2021E earnings. Also, we feel that unlike its larger peers, company has
limited regulatory woes with the USFDA at its key facilities. Improving product mix, increase in capacity utilisation
and operational efficiencies will play out well in the next two years improving its operating margins and in turn,
profitability. We expect the company to report sales and profit CAGR of 14% and 40%, respectively, over FY2019-
FY2021E.

Divis Labs  Management has guided for sales growth of 15% in FY2020 with operating margin likely to return to 38-39%
as business normalises. However, it expects sales growth to accelerate to more than 20% once new capacities
come on stream. Management has increased its capex guidance from Rs. 1,500 crore to Rs. 1,690 crore to
address increasing opportunities in the generics and custom synthesis businesses. We expect all the capex to be
completed by FY2020. A better product mix and capacity utilisation will boost profitability (capacity enhancement
benefits to be visible from FY2021). Moreover, the company does not have any pending regulatory hurdles. Long-
term growth is likely to remain healthy, led by aggressive capacity expansion plans to monetise opportunities in
the U.S. and China.
Glenmark Pharma  For FY2020, management has guided for overall 10-15% sales growth. Management is confident of double-digit
growth in the domestic as well as other key markets on account of new launches as well as key approvals. In the
U.S., the company expects competition to increase in its key product Mupirocin (from Q4FY2020 or Q1FY2021).
However, the company is confident of 100-200 BPS improvement in its operating margin from FY2020 on account
of operational efficiencies, lower staff and R&D costs (FY2019 OPM stood at 16.1%). The company does not have
any pending regulatory issues on its key facility - Goa (Goa plant has received EIR recently). However, we feel
reducing the debt significantly (in the next two years), without an out-licensing deal/asset monetising, is an uphill
task. Lack of avenues for significant debt reduction in books over the next two years and overall concerns on U.S.
business keep us skeptical on the stock’s performance.
IPCA Lab  Strong growth in the domestic formulation business coupled with increased opportunities in API space and
additional business from institutional anti-malaria segment indicates a strong earnings potential over the next
2-3 years. For FY2020, management has conservatively guided for 12-14% sales growth and OPM guidance is
strong 20-23% (FY2019 OPM was at 18.3%). Improvement in OPM is likely to be on account of low remedial costs
(Rs. 10 crore-20 crore in FY2020 vs. Rs. 50 crore in FY2019), improved product mix coupled with operational
efficiencies. We feel most of the headwinds that impacted sales and profitability of the company (except for
import alert from USFDA) are behind.
Lupin  Lupin’s management has guided for 20+ product launches in the U.S. for FY2020E. However, a majority of
them are yet to be approved. Management is hoping that remediation and successful resolution of four plants
(two under Warning Letter and two have Official Action Indicated - OAI status) would take place in FY2020E.
Since there are four facilities facing regulatory issues, we expect the U.S. business sales recovery to take time.
Moreover, the recent news of U.S. lawsuit case against Indian generic drug makers, an overhang of uncertainty
of the outcome of litigation, is weighing on the entire pharma sector in the near to medium term.
Sun Pharma  Sun Pharma continues to invest significantly for building a specialty franchise in the U.S., which is slowly gaining
traction. The company stated that Ilumya has started gaining traction and Cequa launch is expected in the
upcoming months in the U.S. Management’s guidance for FY2020 is as follows: 1) Sales to grow at low-to-mid-
digit teens (on reported FY2019 sales number); 2) R&D to be at 8-9%; 3) Capex to be $200 million for FY2020; and
4) Tax rate to increase progressively in the upcoming years. With better product mix and cost-control measures,
management expects margin expansion over the next two years. However, the outcome of investigation related
to pricing issues taken up by DoJ (Dept. of Justice, USA) and that of SEBI investigation will continue to weigh on
the stock.
Torrent Pharma  Recently, the company’s Dahej plant was classified as Official Action Indicated (OAI) by the USFDA. An OAI status
does not impact the existing operations. However, new product approvals could get delayed. The management
awaits further detailed interaction with USFDA to resolve the issue satisfactorily. No new approvals have been
granted to the company during the quarter. The management has also stated that if there is delay in resolution,
US business growth for FY2020 will be flat, but could hurt FY2021 growth.

Building materials
Grasim  Grasim is better placed compared to other large players in the cement space owing to its strong balance
sheet, comfortable debt/equity ratio, attractive valuation and diversified business. Grasim is on a strong growth
trajectory, with ongoing restructuring through trimming down its loss-making businesses (fertiliser and telecom)
and expanding its profit-making divisions (viscose, chemical and cement). Better earnings growth would also
significantly improve return ratios at a consolidated level and trigger rerating of the stock.
The Ramco Cements  The Ramco Cements, one of the most cost-efficient cement producers in India, will benefit from capacity addition
carried out ahead of its peers in the southern region. Ramco Cements has embarked upon capital expenditure
plan of Rs. 3,430 crore to reach cement capacity of 20 MTPA by FY2020 end. The expansion aims to strengthen
reach in Andhra Pradesh, West Bengal and North Eastern states. The company has reaped the benefits through
cost- saving measures, besides constantly reducing debt, which has led to improved profitability. In a nutshell,
better volumes, cost efficiencies and reducing leverage have yielded benefits.
Shree Cement  The expansion plan of Shree Cement to reach 45 mtpa by FY2021 (currently 37.5 mtpa) and increasing
geographical footprint in the eastern and southern regions are likely to aid better volume growth going ahead.
The company’s focus to increase share of trade sales should help improve realisation. However, increased cost
structure affecting operating margins remains key risk to net earnings in the near term.
UltraTech Cement  UltraTech Cement is India’s largest cement company. We expect UltraTech to report industry-leading volume
growth on account of timely capacity expansion (acquisition of Jaypee Group’s cement assets, Century’s assets
and Binani Cement’s assets) and likely revival in demand (with the start of affordable housing projects and
enhanced spending on infrastructure development).
Discretionary consumption
Arvind  Arvind demerged into three separate entities of Arvind (textile business), Arvind Fashion (branded and retail
business) and Anup Engineering (engineering business) with an aim to unlock value for shareholders. Post the
demerger, Arvind becomes a textile hub present in segments such as denim, fabric, garments and advanced
material (AMD). Revenue performance was muted in FY2019 mainly on account of lower volumes in the denim
business that was affected due to inventory corrections done by some export customers. Further, margins were
flat y-o-y owing to lower sales volume in the textile business and volatile cotton prices. Denim volumes are
expected to remain under pressure for another 6-9 months, which will continue to put pressure on the textile
business. Volumes for the woven segment are expected to increase by 3-5% and the garments segment is
expected to grow in high double digits, driven by capacity enhancement. Overall, we expect revenue to grow
by 6.5% in FY2020 (the management has guided for topline growth of 7-8%). OPM would remain under stress in
H1FY2020 due to losses in new garment facilities on lower efficiencies and muted sales volumes in the textile
business. Thus, in view of near-term concerns on profitability, we maintain our Hold recommendation on the
stock.
Arvind Fashions  Arvind Fashions Limited (AFL), the demerged entity of Arvind Limited, is a leading branded apparel company with
impressive brand portfolio and strong distribution reach. The shift in trade channels of power brands, closure
of non-profitable stores of Unlimited, exit from non-profitable emerging and slowdown in consumption due to
macro headwinds will take a toll on AFL’s Q1FY2020 revenue performance. In the backdrop of stable macro
environment, the performance is expected to gradually improve from Q2FY2020; and H2FY2020 is likely to be
better with the commencement of the festive season. Profitability of the emerging brands is likely to improve,
which will scale up in the brand’s revenue. We maintain our Buy recommendation on the stock.
Century Plyboards  Century Plyboards is a leading player in the organised plywood industry with a market share of 25%.It also has
laminate, particle board and Medium-density fibreboard (MDF) division having a capacity of 600 cubic metre
per day. The company is currently facing operating margin pressure in its Plyboard and MDF verticals, which are
expected to cap growth in operating margin over the next 3-4 quarters. Consequently, we have a Hold rating

on the stock. However structural growth triggers in terms of GST benefits and government’s focus on affordable
housing are key positive triggers for the company.
Info Edge (India)  Info Edge is India’s premier online classified company in the recruitment, matrimony, real estate, education and
related service sectors. Naukri.com is a quality play and is directly related to GDP growth and internet/mobile
penetration. Management highlighted that accelerated investments in its core businesses will continue to gain
market share along with acquiring more customers. Further, its investee companies, particularly Zomato and
PolicyBazaar, have been progressing well in their respective businesses. We continue to derive comfort on Info
Edge’s business strength, with leading market share in key businesses.
INOX Leisure  Inox Leisure Limited (ILL), incorporated in 1999, is one of the largest multiplex operators in India. ILL currently
operates 143 properties (595 screens and over 1.40 lakh seats) located in 67 cities across India. ILL is the
only multiplex operator having such a diverse presence across India. The company accounts for 19% share of
multiplex screens in India and ~11% share of domestic box office collections. The company has aggressively
scaled up through organic and inorganic expansion over the past decade, growing from two properties – eight
screens – in FY2003 to 143 properties – 595 screens – at present, on an average adding eight screens every
quarter since inception. The ILL mega show is supported by improving content quality in the Indian mainstream
and regional cinema, with its movies regularly hitting the Rs. 100 crore or Rs. 200 crore box-office collection mark.
Management expects to deliver a strong performance going forward based on healthy footfalls due to property
additions coupled with passing on of reduction of GST rates and a strong content pipeline. We maintain our Buy
rating.
KKCL  Kewal Kiran Clothing Limited (KKCL) is a branded apparel play with four brands in its kitty. Killer, its flagship denim
brand, has created a niche in the minds of consumers. Q4FY2019 revenue grew strongly due to volume- driven
growth during the festive season, but the dip in realisation continued. Slowdown in the domestic consumption
market will keep a check on KKCL’s revenue growth in FY2020. Hence, any improvement in volume growth in
the coming quarters will be a key thing to watch out for. KKCL does not want to compromise on margins and
has maintained the target of achieving OPM at above 20% for FY2020. As far as volumes are concerned, there
has been a volatility seen in the past few quarters. Though KKCL has a strong brand portfolio and is one of
the well- managed companies with stable working capital in comparison to peers in the branded retail space,
the key trigger for the company in the near term would be consistent volume growth. We maintain our Hold
Orbit Exports  Orbit Exports (Orbit) is a leading manufacturer and exporter of novelty fabrics, exporting its products to over
32 countries. The company is a recognised star export house and operates in the niche area of high-end fancy
fabrics, which are mainly used by designers in women’s fashion apparels. Further, Orbit has one of the better
balance sheets in the textiles industry. We expect it to improve further in the coming years. However, in view of
near-term concerns in export markets, we maintain our Hold rating on the stock.
Relaxo Footwear  Relaxo Footwear (Relaxo) is present in the fast-growing footwear category, where it caters to customers with
its four top-of- the-mind recall brands, such as Hawaii, Sparx, Flite and Schoolmate. Relaxo’s focus is on driving
sales through distribution expansion (COCO and franchisee stores) and improving the brand presence. GST
implementation has been a silver lining for the company, as it is witnessing a gradual shift of demand from the
unorganised to organised market. Input cost pressure is likely to soften going ahead, with OPM expected to stand
at 14-15%. Further, focus on strong distribution enhancement (especially in South India) and expected high growth
in premium categories (due to reduction in GST rate) make Relaxo one of our preferred picks in the discretionary
consumption space.
Titan Company  Titan is India’s largest specialty retail player, operating more than 1,600 stores spread across over 2 million sq. ft. in
279 towns having businesses in jewellery, watches and eyewear. Revenue of Titan’s jewellery business reported
a CAGR of 23% over FY2016-FY2019. Sustained launch of new collection, expansion in domestic footprint, shift

of consumers to trusted brands and strong growth in diamond jewellery remain the key pillars of growth. The
target is to achieve 2.5x sales and grab market share of 10% by FY2023. In the eyewear business, Titan’s focus
is to build a strong customer base through a calibrated expansion plan and offer products at affordable prices.
An increase in scale of the watches and eyewear businesses along with expansion into tier II and tier III markets
and continuous shift from non-branded to branded jewellery players is expected to drive up margin going ahead.
With a lean balance sheet and strong financial background, Titan is one of the best retail plays amongst peers.
Titan is well placed to achieve double-digit revenue and earnings CAGR of 16.5% and 17.5%, respectively, during
FY2018-FY2021.
Wonderla Holidays  Wonderla Holidays Limited (WHL) is the largest amusement park company in India with over a decade of
successful and profitable operations. Q4FY2019 witnessed a 7% growth in the footfalls of WHL. The Kochi Park
has also started regaining momentum in the footfalls post Q2FY2019 miss due to torrential rains and floods in
Kerala We expect footfalls to recover in FY2020 gradually, which would result in double-digit revenue growth
during the year. Improvement in footfalls and higher ticketing revenue would result in better profitability and
OPM is expected to improve in the coming years. The company has acquired 61.87 acres of land for the new
amusement park project in Kelambakkam in Chennai. The project will commence post the receipt of the required
approvals from Tamil Nadu Government. The sustenance of growth in footfalls has to be keenly monitored in the
coming quarters. Hence, we maintain our Hold recommendation on the stock.
Zee Entertainment  Zee Entertainment Enterprises Limited (ZEEL), part of the Essel Group, is one of India’s leading television media
and entertainment companies. The company has a bouquet of more than 40 channels across Hindi, regional,
sports and lifestyle genres. ZEEL agreed with Invesco Oppenheimer Developing Market Fund to sell upto 11%
stake in ZEEL for Rs. 4,224 crore, implying price of around Rs. 400/share. This transaction will provide a financial
fillip to initiate the repayment process of promoter level debt. We believe the street may be upset with ZEEL’s
decision to go with the financial investor rather than a strategic investor who can take the company to the next
level. However, the deal provides relief to the promoters’ liquidity concern to some extent, but the overhang
remains till the finalisation of other assets’ sale by the end of September 2019. Hence, we maintain our Hold rating
on the stock.
Diversified/Miscellaneous
Bajaj Holdings  Bajaj Holdings and Investment Limited (BHIL, erstwhile Bajaj Auto) was demerged in December 2007, whereby its
manufacturing business was transferred to the new Bajaj Auto Limited (BAL) and its strategic business consisting
of the wind farm and financial services businesses was vested with Bajaj FinServ (BFS). All the businesses and
properties, assets, investments and liabilities of erstwhile Bajaj Auto, other than the manufacturing and strategic
ones, now remain with BHIL. BHIL is a primary investment company focusing on new business opportunities.
Given the strategic nature of its investments (namely BAL and BFL), we have given a holding company discount
to its equity investments. Liquid investments have been valued at cost. The PT for BFS has been revised upwards.
We expect BFL to maintain its loan book trajectory as well as profitability and margins for the medium term, which
will be the key support for present valuations of BFS. We retain our Buy recommendation on the stock of BHIL.
Bharat Electronics Bharat Electronics Limited, a defence PSU, remains our preferred pick in the domestic defence sector on account
of its strong manufacturing and R&D capabilities, good cost-control measures, growing indigenisation and a strong
balance sheet with improving return ratios. Further, the company is well positioned to capture incremental spends
by the government on defence through the Make-in-India initiative. A robust order book of Rs. 51,715 crore (at 4.3x
of FY2019 revenue) provides strong revenue and earnings visibility. However, order intake remained moderate
at Rs. 1,985 crore, down 44.6% y-o-y (down 71.4% q-o-q). Though order intake was weak in Q1, management is
hopeful of bagging Akash Missile System (7 Sqdn) order in FY2020, which is expected to boost overall order
intake for the fiscal. Given strong order book and expectation of healthy order intake pipeline, we maintain our
Buy rating on the stock.

Bharti Airtel  Bharti Airtel (Bharti) is one of the leaders in the Indian mobile telephony space. The management continues to
focus sharply on increasing retail ARPUs, non-mobile services (enterprise services) and value- added services
(Airtel TV and music) to boost revenue and reduce the churn rate. Further, management indicated that it expects
moderation in capex in FY2020E after heavy investments in building a strong portfolio of sites and spectrums for
the past couple of years. Any positive surprise from easing competition would act as a re-rating trigger for the
stock. From a long-term perspective, explosive growth in the data segment, rapid network expansion and reach
will help Bharti emerge stronger. We have a Buy rating on the stock.
GDL  With its dominant presence in container freight station (CFS), rail freight and cold chain businesses, Gateway
Distriparks Limited (GDL) has evolved as an integrated logistics player. it’s the CFS and rail verticals are facing a
tough business environment owing to intensive competition. The cold chain business has shown improvement in
operating margins and is currently under expansion. However, key positive triggers such as the dedicated freight
corridor (DFC) and improvement in export-import trade environment are still far. Hence, owing to absence of near-
term triggers, we have a Hold rating on the stock.
PI Industries  Incorporated in 1947, PI Industries focuses on developing complex chemistry solutions in the agri-science space.
The company reported strong performance with revenue, EBITDA and PAT surging by 24.5%, 28.4% and 23.6%
y-o-y, respectively, during Q1FY2020. Management reiterated its growth guidance of more than 20% on the
revenue front and 50-100 BPS margin expansion at the operating level. We expect the company to post revenue
and earnings CAGR of 20.6% and 31.1% over FY2019-FY2021E, respectively. With industry-leading return ratios
coupled with a healthy balance sheet and strong earnings visibility, we expect further re-rating in the stock. We
maintain our Buy rating on PI Industries.
Ratnamani Metals  Ratnamani Metals and Tubes Limited (RMTL) is the largest stainless steel tube and pipe manufacturer in India.
We remain positive on RMTL, led by its strong balance sheet, ability to generate superior return ratios and
capacity expansion programmes. Further, overall capex revival in its key industries such as oil and gas coupled
with improving orders from international markets will keep order momentum strong over the next 3-4 years.
Management has provided growth guidance of 10-12% both on the revenue and PAT front for FY2020. We have
introduced FY2021 estimates and expect the company to report revenue and earnings CAGR of 11.1% and 9.4%
during FY2019-FY2021E, respectively. We believe the stock remains a good bet for investment in the long run.
Hence, we maintain our Buy rating on the stock.
Supreme Industries  Supreme Industries is a leading manufacturer of plastic products with a significant presence across the piping,
packaging, industrial and consumer segments. Management has provided FY2020E revenue growth guidance
of 12-15% in value terms, while volume growth guidance remained at 8-10%. Volume growth would be driven
by healthy demand in the plastic piping system on account of ‘Nal Se Jal’ scheme and multiple initiatives by
the government. Management expects margin recovery going ahead because of better product mix and lower
contribution from low-margin agri-piping in the coming quarters and has provided FY2020E margin guidance
band of 13.5-14.5%. We retain our Hold rating on the stock.
UPL  UPL is better placed to benefit from a global recovery in the agri-commodity space over the next 2-3 years.
UPL reported revenue, adjusted EBITDA and adjusted PAT growth of 91%, 107% and 29% on a y-o-y basis (not
comparable), respectively; however, it delivered 7% y-o-y and 11% y-o-y revenue and EBITDA growth, respectively,
on like-to-like basis during Q1FY2020. Arysta’s integration is progressing well; achieves revenue and cost
synergies of US$20 million and US$18.6 million during Q1FY2020. Management has reiterated its guidance for
FY2020E of revenue growth of 8-10% and EBITDA growth of 16-20% base revenue and EBITDA of Rs. 32,500
crore and Rs. 6,900 crore, respectively. We downgrade our rating on UPL to Hold with a revised PT of Rs. 656
based on potential headwinds due to global weakness in the agro chemical industry as UPL has significant
presence across the globe.

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From the Editor’s Desk EQUITY

growth concerns assume the highest priority. ...

06 ADVISORY DESK DERIVATIVES

MUTUAL FUND DESK

STOCK IDEAS STANDING (AS ON AUGUST 06, 2019)

August 2019 4 Sharekhan ValueGuide

August 2019 5 Sharekhan ValueGuide

August 2019 6 Sharekhan ValueGuide

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/GCPL-July01_19.pdf

July 01, 2019 CESC Stock Update BUY  784 905 

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/CESC-July01_19.pdf

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/SadbhavEngg-July03_19.pdf

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/TCS-July09_19.pdf

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August 2019 7 Sharekhan ValueGuide

Recommendation Reco Price Price Target/ Upside (%)

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/AshokLeyland-July11_19.pdf

July 12, 2019 Infosys Stock Update BUY  727 840 

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Infosys-July12_19.pdf

July 12, 2019 IndusInd Bank Viewpoint POSITIVE  1,510 10-12 

Read report - https://www.sharekhan.com/MediaGalary/Equity/IndusIndBank-July12_19.pdf

July 12, 2019 Aarti Industries Viewpoint POSITIVE  1,673 17-19 

Read report - https://www.sharekhan.com/MediaGalary/Equity/AartiIndustries-July12_19.pdf

August 2019 8 Sharekhan ValueGuide

Read report - https://www.sharekhan.com/MediaGalary/Equity/GNA_Axles-July15_19.pdf

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Federal_Bank-July16_19.pdf

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Gayatri-July16_19.pdf

July 17, 2019 Wipro Stock Update HOLD  260 285 

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Wipro-July17_19.pdf

August 2019 9 Sharekhan ValueGuide

Recommendation Reco Price Price Target/ Upside (%)

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Yes_Bank-July17_19.pdf

Read report - https://www.sharekhan.com/MediaGalary/Equity/ONGC-July18_19.pdf

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Rel_Ind-July19_19.pdf

Read report - https://www.sharekhan.com/MediaGalary/Equity/LnT_Info-July19_19.pdf

August 2019 10 Sharekhan ValueGuide

Read report - https://www.sharekhan.com/MediaGalary/Equity/LTTS-July19_19.pdf

July 19, 2019 Dabur India Viewpoint POSITIVE  421 12-14 

Read report - https://www.sharekhan.com/MediaGalary/Equity/Dabur_India-July19_19.pdf

July 19, 2019 RBL Bank Viewpoint POSITIVE  500 18-20 

Read report - https://www.sharekhan.com/MediaGalary/Equity/RBL_Bank-July19_19.pdf

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/HDFCBank-July22_19.pdf

August 2019 11 Sharekhan ValueGuide

Recommendation Reco Price Price Target/ Upside (%)

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/TVSMotor-July22_19.pdf

Read report - https://www.sharekhan.com/MediaGalary/Equity/FutureLifestyle-July22_19.pdf

July 22, 2019 Mastek Viewpoint POSITIVE  458 10-12 

Read report - https://www.sharekhan.com/MediaGalary/Equity/Mastek-July22_19.pdf

August 2019 12 Sharekhan ValueGuide

Read report - https://www.sharekhan.com/MediaGalary/Equity/KotakBank-July22_19.pdf

Read report - https://www.sharekhan.com/MediaGalary/Equity/ICICILombard-July22_19.pdf

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/LnT-July23_19.pdf

Read report - https://www.sharekhan.com/MediaGalary/StockIdea/HUL-July23_19.pdf

August 2019 13 Sharekhan ValueGuide

Recommendation Reco Price Price Target/ Upside (%)

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