DOMESTIC:

Lupin to develop Brazil as Latin American manufacturing, export

hub

Puravankara completed acquisition of Mumbai land from Foods

& Inns worth Rs147.5cr

Tata Steel sells stake in Black Ginger 461 to IMR Asia Holding

Concor signs agreement with Kribhco Infrastructure

Biocon receives positive CHMP opinion for Ogivri

Alembic Pharma successfully clears first USFDA inspection

Gayatri Projects bagged three new orders worth Rs403.96cr from

Bihar State Road Development Corporation

A2Z Infra has bagged an order worth Rs225.3cr from ITI

Unichem gets EIR from USFDA for Pithampur, Roha facilities

Hero MotoCorp forays into 125cc scooter segment with its

Destiny -125

Syndicate Bank gets Rs728cr capital infusion from government

SBI plans to raise up to Rs25,000cr in FY19

Salzer Electronics has withdrawn its acquisition proposal

Laurus Labs transfers ownership rights of hepatitis B drug to

CASI Pharma

Sun Pharma launches psoriasis treatment drug Ilumya in US

Va Tech Wabag bags EPC order worth Rs555cr in Qatar

Tata Steel to sell off stake in South Africa iron ore mine to Swiss

firm ArcelorMittal offers Rs50,000cr to buy Essar Steel Zydus Wellness, Cadila to buy Kraft Heinz India for Rs4,600cr

Reliance Naval rolls out training ship for Indian Coast Guard

Tata Chemicals signs MoU with CSIR-CECRI, Karaikudi

JSW Steel takes over Dolvi Minerals and Metals for Rs109cr

Glenmark Pharmaceuticals receives ANDA approval for

Fluocinolone Acetonide Topical Oil

ECONOMY:

RBI may look at relaxing PCA framework

India rises five spots to become 58th most competitive economy

Fiscal deficit widens in H1-FY19

INDUSTRY:

Rs35,000cr plan to electrify all Railway lines across

country

Indian Railways suffers as private players fail to meet

wagon delivery targets

Carmakers hope Diwali will slay Dussehra demons

Power companies offer CIL 28% premium for Coal

Global capital goods cos sign 38 MoUs with Indian

companies

Insurance costs hit two-wheeler sales

High drug prices due to unreasonable margins of companies: CCI

The week that went by: The week started on a good note with the markets opening in the positive with the fall in crude prices being one of the reasons.

The weak trend continued with a gap down opening on the Nifty. Midweek, the markets opened on a strong positive note. It was

a gap down opening for the markets with selling across most of the sectors. On last trading day of the week, selling was mainly

visible across all sectors, wherein Banks, Consumption, IT, Metals and Pharmaceuticals observed weak trades.

Price Performance (%)

Company 1M 3M 12M

Supreme Petrochem Ltd 0.8% -10.9% -31.0%

Shanthi Gears Ltd -11.5% -17.9% -12.9%

Hind Rectifiers Ltd -5.9% -1.0% 1.8%

KCP Ltd 9.4% -9.4% -21.0%

Harita Seating System Ltd -6.1% -9.2% -30.1%

Hester Biosciences Ltd 1.8% -3.5% 8.6%

The Hi-Tech Gears Ltd -20.4% -15.7% 2.6%

Bharat Bijlee Ltd -13.1% -6.8% 6.8%

Triveni Turbines Ltd -9.4% -10.7% -23.8%

Siemens Ltd -8.0% -10.6% -31.7%

Aksh Optifibre Ltd -2.8% -5.1% 5.6%

GMM Pfaudler Ltd -2.4% 5.0% 58.4%

Alicon Castalloy Ltd -19.2% -4.9% -6.5%

Gufic Biosciences Ltd -29.1% -25.4% -4.7%

Excel Industries Ltd -17.7% 0.7% 196.7%

Vesuvius India Ltd -9.9% -20.8% -20.1%

Munjal Showa Ltd -15.3% -23.5% -37.3%

Bharat Rasayan Ltd -21.3% -22.1% 82.6%

Alkyl Amines Chemicals Ltd -6.1% -15.9% -2.3%

Grauer and Weil (India) Ltd -6.6% 6.4% -16.4%

Texmaco Rails & Engineering Ltd -13.0% -17.5% -47.5%

Nagarjuna Agrichem Ltd -9.4% -18.7% -41.2%

Simplex Infrastructures Ltd -31.3% -53.6% -60.6%

ITD Cementation India Ltd -12.7% -14.4% -36.3%

Westlife Development Ltd -6.5% -7.9% 33.6%

Federal Mogul Goetze (India) Ltd -2.2% -3.1% -13.6%

Dynamatic Technologies Ltd -18.1% -14.5% -37.0%

Hitech Corporation Ltd -52.2% -45.5% -56.5%

NRB Bearings Ltd -6.2% -7.0% 12.6%

Kokuyo Camlin Ltd -18.1% 4.0% 9.1%

Timken India Ltd -13.8% -27.8% -33.8%

Morganite Crucible (India) Ltd -11.4% 29.8% 60.3%

Vardhman Special Steels Ltd -7.9% -11.1% -41.1%

Zen Technologies Ltd -20.3% -34.8% -20.8%

KSB Pumps Ltd 10.3% -2.7% -4.3%

Thermax Ltd 6.7% -9.1% 1.9%

Transpek Industry Ltd -8.5% 5.5% 35.5%

BASF India Ltd -6.5% -4.0% -0.1%

Artson Engineering Ltd -15.8% -22.2% -37.3%

Indian Hume Pipe Co. Ltd 0.4% -7.5% 0.3%

Engineers India Ltd -8.0% -15.4% 33.3%

TRIL -18.1% -28.9% 354.7%

Gulshan Polyols Ltd -5.2% -4.4% 235.0%

Nesco Ltd -2.4% -11.2% 326.0%

Castrol India Ltd -3.3% 76.0% -27.2%

Hikal Ltd -17.2% 3.4% -8.8%

26 Oct 2018

Please Turn Over

Recommendations adjusted as per Corporate Actions

Company Reco Target Corp Action Adj Price Adj Tgt Price Appreciation

IHP Ltd 341 600 Bonus 1 : 1. 171 500 50%

Engineers India Ltd 211 200 Bonus 1 : 1. 105 250 7%

Transformers and Rectifiers (India) Ltd 300 450 Stock Split from Rs.FV 10 to Rs.FV 1. 30 40 -55%

Gulshan Polyols Ltd 390 500 Stock Split from Rs.FV 5 to Rs.FV 1. 78 110 -30%

Nesco Ltd 2397 3200 Stock Split from Rs.FV 10 to Rs.FV 2. 479 640 -9%

Castrol India Ltd 447 550 Bonus 1 : 1 223 250 -35%

Hikal Ltd 143 325 Bonus 1 : 2 95 216 55%

Coverage Universe Valuations

Company Reco Adj Reco CMP Tgt price Upside Mcap EPS PE(x) EV/EBITDA (x)

(Rs) (Rs) (Rs) (%) (Rs bn) FY17 FY18E FY17 FY18E FY17 FY18E

IHP Ltd 341 171 257 500 94.5 12.5 20.4 14.3 12.4 17.6 6.9 9.3

Engineers India Ltd 211 105 113 250 121.7 38.0 4.8 5.0 23.9 23.0 23.6 25.5

Transformers and Rectifiers (India) Ltd 300 30 14 40 195.2 0.2 13.9 1.5 1.0 9.5 4.4 6.6

Gulshan Polyols Ltd 390 78 55 110 101.8 2.5 4.6 6.4 12.1 8.7 15.7 13.9

Nesco Ltd 2397 479 436 640 46.7 6.1 120.2 137.5 3.8 3.3 15.0 12.5

Castrol India Ltd 447 223 145 250 72.1 71.8 13.6 14.1 10.3 9.9 6.0 5.7

Hikal Ltd 143 95 148 216 46.0 12.2 5.4 5.8 27.9 26.1 11.6 10.6

Coverage Universe Valuations

Company Reco Reco at CMP Tgt price Upside Mcap EPS PE(x) EV/EBITDA (x)

(Rs) (Rs) (Rs) (%) (Rs bn) FY17 FY18E FY17 FY18E FY17 FY18E

Supreme Petrochem Ltd BUY 77 247 500 102.4 23.8 18.6 14.9 13.2 16.4 7.6 9.6

Shanthi Gears Ltd BUY 107 115 200 73.9 9.4 2.8 3.1 41.0 36.6 25.9 22.7

Hind Rectifiers Ltd BUY 69 112 175 56.3 1.7 -1.1 0.3 -102.8 318.2 42.0 29.4

KCP Limited BUY 71 97 200 105.3 12.6 2.8 6.3 33.6 14.8 10.4 8.9

Harita Seating System Ltd BUY 266 572 1150 101.0 4.4 32.4 34.5 17.6 16.6 16.2 13.6

Hester Biosciences Ltd BUY 565 1135 1750 54.2 9.7 29.2 34.2 39.2 38.6 24.4 20.7

The Hitech Gears Ltd BUY 298 354 600 69.5 6.6 10.9 16.5 34.3 23.0 15.1 12.5

Bharat Bijlee Ltd BUY 787 1105 2000 81.0 6.2 34.7 41.4 31.8 26.6 43.1 22.0

Triveni Turbines Ltd BUY 92 100 150 50.0 0.3 3.5 2.4 27.7 40.0 19.7 24.1

Siemens Ltd BUY 1128 864 1350 56.3 307.6 9.1 10.0 95.1 86.6 64.9 57.4

Aksh Optifibre Ltd BUY 15 26 45 71.1 4.3 13.9 1.5 1.0 9.5 4.4 6.6

GMM Pfaudler Ltd BUY 332 966 1300 34.6 14.1 19.3 20.8 50.7 47.1 34.8 31.8

Alicon Castalloy Ltd BUY 288 575 1000 73.9 7.1 21.4 24.1 28.0 24.7 10.8 8.6

Gufic Biosciences Ltd BUY 50 89 175 97.5 6.8 1.6 2.1 64.1 48.1 30.4 22.8

Excel Industries Ltd BUY 380 1383 2200 59.1 17.8 9.8 39.7 163.2 40.1 49.4 23.3

Vesuvius India Ltd BUY 1165 1036 1500 44.8 20.7 49.0 62.7 21.1 16.5 11.2 9.0

Munjal Showa Ltd BUY 191 173 350 102.3 6.9 14.2 14.6 13.1 12.7 7.8 7.5

Bharat Rasayan Ltd BUY 2747 5296 9000 69.9 22.2 128.9 189.3 45.9 31.2 23.8 17.2

Alkyl Amines Chemicals Ltd BUY 391 578 850 47.2 11.8 24.3 27.0 24.7 22.2 14.4 14.6

Grauer and Weil (India) Ltd BUY 45 51 100 94.9 11.6 2.3 2.3 23.4 22.6 13.2 12.8

Texmaco Rails & Engineering Ltd BUY 91 56 150 169.5 20.2 1.5 2.7 36.7 20.9 26.4 16.4

Nagarjuna Agrichem Ltd BUY 29 27 75 177.8 4.2 1.6 0.9 16.4 30.6 9.9 9.1

Simplex Infrastructures Ltd BUY 540 207 700 238.1 20.2 24.3 29.6 8.6 7.1 6.2 5.6

ITD Cementation India Ltd BUY 158 110 225 104.5 17.1 3.1 4.8 35.5 22.9 9.6 8.7

Westlife Development Ltd BUY 266 320 425 32.6 49.8 -0.8 0.3 -412.7 943.1 110.4 66.7

Federal Mogul Goetze (India) Ltd BUY 540 411 750 82.6 22.9 12.9 15.7 32.1 26.4 13.4 12.1

Dynamatic Technologies Ltd BUY 2160 1351 3000 122.1 8.6 23.0 -9.3 38.4 -427.4 9.0 11.5

Hitech Corporation Ltd BUY 175 75 230 206.7 1.3 6.9 3.5 12.8 25.1 5.4 6.6

NRB Bearings Ltd BUY 138 152 200 31.6 14.7 5.2 5.5 30.3 28.7 16.9 16.1

Kokuyo Camlin Ltd BUY 132 104 175 68.4 10.4 0.1 0.5 1243.8 225.0 58.1 42.7

Timken India Ltd BUY 883 519 1200 131.1 35.3 14.3 15.1 38.0 35.9 23.3 20.3

Morganite Crucible (India) Ltd BUY 1047 1740 2300 32.2 4.9 47.2 38.2 38.1 47.0 20.9 27.2

Vardhman Special Steels Ltd BUY 151 105 225 114.4 3.7 10.3 6.4 10.2 16.4 10.4 10.1

Zen Technologies Ltd BUY 115 56 170 203.6 4.3 0.9 0.2 67.3 293.4 40.2 110.3

KSB Pumps Ltd BUY 820 778 1100 41.3 27.1 19.5 18.8 38.7 40.0 24.3 20.1

Thermax Ltd BUY 1019 1005 1230 22 119.7 23.3 22.1 42.5 44.8 31.6 31.8

Transpek Industry Ltd BUY 1547 1355 2000 47.6 7.6 53.7 47.3 28.8 32.7 17.7 19.9

BASF India Ltd BUY 1954 1665 2500 50.2 72.1 -7.2 20.3 -271.7 96.2 36.4 27.4

Artson Engineering Ltd BUY 64 50 95 90.0 1.8 7.4 0.4 8.7 170.6 58.3 96.6

*Castrol, Vesuvius, ITD Cementation– Dec Ending | Siemens—Sept ending|

26 Oct 2018

Please Turn Over

Recommendations adjusted as per Corporate Actions

Company Reco Target Corp Action Adj Price Adj Tgt Price Appreciation

IHP Ltd 341 600 Bonus 1 : 1 171 500 50%

Engineers India Ltd 211 325 Bonus 1 : 1 105 250 7%

Transformers and Rectifiers (India) Ltd 300 450 Stock Split from Rs.FV 10 to Rs.FV 1 30 40 -55%

Gulshan Polyols Ltd 390 500 Stock Split from Rs.FV 5 to Rs.FV 1 78 110 -30%

Nesco Ltd 2397 3200 Stock Split from Rs.FV 10 to Rs.FV 2 479 640 -9%

Castrol India Ltd 447 550 Bonus 1 : 1 223 250 -35%

Hikal Ltd 143 325 Bonus 1 : 2 95 216 55%

Coverage Performance Sheet

Company Reco at CLS Target Price (Rs) Appreciation

(Rs) (Rs) Target 1 Target 2 Target 3 Target 4 Target 5 Target 6 Target 7 (%)

Supreme Petrochem Ltd 77 247 120 150 200 275 350 500 - 221%

Shanthi Gears Ltd 107 115 150 200 - - - - - 7%

Hind Rectifiers Ltd 69 112 110 140 175 - - - - 62%

KCP Limited 71 97 105 150 200 - - - - 37%

Harita Seating System Ltd 266 572 400 600 750 900 1150 115%

Hester Biosciences Ltd 565 1135 750 875 1150 1500 2200 1750 - 101%

The Hitech Gears Ltd 298 354 450 600 - - - - - 19%

Bharat Bijlee Ltd 787 1105 1100 1500 2000 - - - - 40%

Triveni Turbines Ltd 92 100 135 150 - - - - - 9%

Siemens Ltd 1128 864 1350 - - - - - - -23%

Aksh Optifibre Ltd 15 26 24 35 45 - - - - 75%

GMM Pfaudler Ltd 332 966 500 700 800 1000 1300 - - 191%

Alicon Castalloy Ltd 288 575 450 600 750 1000 - - - 100%

Gufic Biosciences Ltd 50 89 75 100 140 175 - - - 77%

Excel Industries Ltd 380 1383 550 650 800 1100 1400 1800 2200 264%

Vesuvius India Ltd 1165 1036 1500 - - - - - - -11%

Munjal Showa Ltd 191 173 250 300 350 - - - - -9%

Bharat Rasayan Ltd 2747 5296 3500 4250 5000 6500 9000 - - 93%

Alkyl Amines Chemicals Ltd 391 578 550 700 850 - - - - 48%

Grauer and Weil (India) Ltd 45 51 65 80 100 - - - - 14%

Texmaco Rails & Engineering Ltd 91 56 125 150 - - - - - -39%

Nagarjuna Agrichem Ltd 29 27 45 60 75 - - - - -7%

Simplex Infrastructures Ltd 540 207 700 - - - - - - -62%

ITD Cementation India Ltd 158 110 225 - - - - - - -30%

Westlife Development Ltd 266 320 350 425 - - - - - 20%

Federal Mogul Goetze (India) Ltd 540 411 750 - - - - - - -24%

Dynamatic Technologies Ltd 2160 1351 3000 - - - - - - -37%

Hitech Corporation Ltd 175 75 230 - - - - - - -57%

NRB Bearings Ltd 138 152 200 - - - - - - 10%

Kokuyo Camlin Ltd 132 104 175 - - - - - - -21%

Timken India Ltd 883 519 1200 - - - - - - -41%

Morganite Crucible (India) Ltd 1047 1740 1500 1750 2300 - - - - 66%

Vardhman Special Steels Ltd 151 105 225 - - - - - - -30%

Zen Technologies Ltd 115 56 170 - - - - - - -51%

KSB Pumps Ltd 820 778 1100 - - - - - - -5%

Thermax Ltd 1019 1005 1230 - - - - - - -1%

Transpek Industry Ltd 1547 1355 2000 - - - - - - -12%

BASF India Ltd 1954 1665 2500 -14.8%

Artson Engineering Ltd 64 50 95 - - - - - - -22%

*Castrol, Vesuvius, ITD Cementation– Dec Ending | Siemens—Sept ending|

26 Oct 2018

Coverage Performance Sheet

Company Reco at CLS Target Price (Rs) Appreciation

(Rs) (Rs) Target 1 Target 2 Target 3 Target 4 Target 5 Target 6 Target 7 (%)

IHP Ltd 341 257 500 600 500 - - - - 50%

Engineers India Ltd 211 113 200 250 - - - - - 7%

Transformers and Rectifiers (India) Ltd 300 14 40 55 40 - - - - -55%

Gulshan Polyols Ltd 390 55 110 - - - - - - -30%

Nesco Ltd 2397 436 640 - - - - - - -9%

Castrol India Ltd 223 145 275 250 - - - - - -35%

Hikal Ltd 143 148 200 250 325 216 - - - 55%

Please Turn Over

Coverage News:

ITD Cementation India Limited: ITD Cementation India, has won orders valued over Rs1,066cr from Airports

Authority of India, Vizhinjam Port, Visakhapatnam Port, Mumbai Metro and Rail

Vikas Nigam. The order is for the for the construction of new integrated passenger

terminal building and associated facilities at Pune Airport for Airports Authority

of India and construction of breakwater for Vizhinjam Port in Kerala for Adani.

Our comments: This is an add on to the order book of the company.

The Hitech Gears Limited: Hitech Gears has announced of making Neo-Tech Smart Solutions Inc. (Neo- Tech) as

the wholly owned subsidiary of the Company. Neo-Tech is incorporated in Ontario,

Canada. The object is to provide the allied support and assist the existing subsidiaries /

company in strengthening capabilities, automation and assistance, engaging with other

institutions for research, logistic.

Our comments: The object of the acquisition is to be part of a Global Value Chain (GBV) with a

footprint in an important and essential geography.

Result Update:

Aksh Optifibre Limited: The company has reported its all-time highest quarterly financial performance for the

quarter under review with net sales at Rs1,757mn as compared to Rs1,446mn in the

corresponding period last year registering a growth of 21.5%. The increase in turnover

coupled with better operational efficiencies has resulted into good Ebitda margins. For

the quarter ending September 2018, Ebitda margins have improved to jump to 21.9%

from 10.9% when compared to the same quarter last year. The net profit came in at

Rs169mn as compared to Rs50mn in the corresponding quarter last year. EPS for the

quarter stood at Rs1.0.

Outlook and recommendations: The company has reported good set of numbers for the quarter under review. On a

global level, the softening of prices of optical fibre and easy availability of fibre has

led to the increased demand for optical fibre cable and allied products. As per the

latest press release, the company has successfully commissioned its FRP

manufacturing facilities in China which is very much in line with the projection of

Management for completion of its Capex (except Dubai Optical Fibre plant, which is

also due to get completed within stipulated timeframe as planned by the management).

With the Capex almost coming to an end, soon the company will start focussing on

enhancing its operational efficiencies .Moreover, management also intends to focus on

increasing and expanding its market share for all the product lines in which it operates.

Besides, the recent capex which will propel the top line as well as the bottom line,

there are a large number of factors from the industry as well which will boost further

growth. Thus, we maintain our target price of Rs45 with a 12 months perspective.

Please Turn Over

26 Oct 2018

Weekly Sectoral Gainers & Losers in (%)

Orders For ITD

Cementation

Improvement in Margins

and Profitability

Update On Hitech Gears

-2.6%

-1.3%

-0.2%

-2.9%

-4.7%

-5.5%

-2.4%

-5.5%

-4.2%

-3.0%

0.5%

-4.0% -2.0% 0.0% 2.0% 4.0% 6.0%

Nifty Bank

Nifty Auto

Nifty Financial Services

Nifty FMCG

Nifty IT

Nifty Media

Nifty Metal

Nifty Pharma

Nifty PSU Bank

Nifty Private Bank

Nifty Realty

Result Update:

GMM Pfaudler Limited: The company has reported strong performance for the quarter ending September 2018.

As per the Management, India is a growth story and the volumes demand of the country

is increasing. As a result, the net sales for the quarter under review came in at Rs992mn

as compared to Rs764mn, growth of 29%.The Gas furnace which was recently installed

has started providing an uptick to Ebitda margins earned. The Ebitda margins improved

to 16.2% from 15.2% in the same quarter last year. The net profit grew by 39% to

Rs98mn from Rs70mn. EPS for the quarter under review stood at Rs6.7.

Outlook and recommendations: The company continues to be the market leader, with more or less 51%-55% market

share in the glass lined business. In the current scenario customers are looking at quality

since there are many issues related to USFDA and other environment related guidelines

which have become imperative to comply to. The company is seeing demand from the

segments of agrochemicals and speciality chemicals. As per Management discussions on

the conference call, the environmental issues and concerns in China are favouring

GMMP. The company has a strong order backlog which is giving a visibility for next

three to four quarters to come. Management also indicated the exports sales have been

improving as also the performance of the subsidiary i.e. Mavag is improving. The work-

ing of the company will continue to improve via better operational efficiencies and the

new fabrication lines which will be operational in next two to three quarters; thus, we

maintain our target price to Rs1300 with a horizon of 12 months.

Artson Engineering Limited: The net sales for the quarter ended September 2018 came in at Rs312mn as compared to

Rs281mn, growth of 10.9%. Ebitda margins came lower at 1.9% mainly due to muted

topline growth. The net profit for the company reported a drop of 3.8% at Rs5mn as

against Rs5.2mn in the same quarter last year. EPS for the quarter stood at Rs0.1.

Outlook and recommendations: The company has reported a muted quarter when compared on y-o-y basis. However,

compared to June 2018, the profits have come in the green. Growth has been slow in the

H1FY19 for the company. However, we feel that the company should catch up with the

projections for H2 with a strong pipeline of execution. We had initiated BUY on the

stock with a target price of Rs95 over a 12 months perspective and maintain the same.

Westlife Development Limited: The net sales for the quarter ended September 2018 came in at Rs3,501mn as compared

to Rs2,647mn, growth of 32.3%. Ebitda margins improved to 8% from 7.6% in the same

quarter last year. The net profit grew by 552.9% to Rs79mn from Rs12mn in the

comparative quarter. EPS for the quarter stood at Rs0.5

Outlook and recommendations: The performance of the company has been very much in line with the estimates. The fact

that the results are to be compared on y-o-y basis and not the sequential performance.

The company has been on track with new product offerings on economic scales. We

continue with our Buy recommendation on the stock with a target price of Rs425 over a

12 months perspective.

Shanthi Gears Limited: The net sales for the quarter under review came in at Rs594mn as compared to Rs543mn,

growth of 9.4%. Ebitda margins for the quarter ending September 2018 came in at 18.2%

as compared to 20.6% in the same quarter last year. The net profit grew by 25.7% to

Rs90mn from Rs72mn. EPS for the quarter stood at Rs1.1.

Outlook and recommendations: The company has reported good set of numbers for the quarter under review despite the

increase in the prices of the basic raw materials. As per the press release by the

Management, higher profitability and lower capital employed has enabled improvement

in ROCE for the quarter under review to 22.4% as compared to 17.3% in the

corresponding quarter of the previous year. The company has generated free cash flow of

approximately Rs102mn in Q2FY19. During the quarter the orderbook position of the

company has improved by nearly 31% i.e. booking orders for approximately Rs737mn

against Rs564mn for corresponding quarter of the previous year. The pending orderbook

as on 30th September 2018 was Rs1490mn as against Rs1210mn in the corresponding

quarter of the previous year. Considering all these factors, we continue to maintain our

target of Rs200 with a perspective of 12 months.

26 Oct 2018

Please Turn Over

Good set of numbers

Subdued Results

Decent Quarter

More or Less Flat

Result Update:

Kokuyo Camlin limited (KCL): One should not analyse the company’s results on quarterly basis. The business of the

company is such that maximum sales are realised in the quarter of March and June; since

the company faces seasonality and higher–better sales during this time of the year. The

net sales for the quarter under review came in at Rs1,420mn as compared to Rs1,343mn,

growth of 5.7%. Ebitda margins improved to 5.3% from 5.2% when compared to the

same quarter last year. The net profit for the quarter ending September 2018 came in at

Rs9mn as compared to Rs2mn in the corresponding quarter last year. EPS for the quarter

stood at Rs0.10.

Outlook and recommendations: The main motive of the Japanese Management is to focus on improving operational

efficiencies. These efforts are also evident by the reducing interest cost or interest burden

of the company. The company has a state-of-the-art factory at Patalganga wherein there

is immense scope for further expansion (if the Management decides to expand further). It

is also quite evident; gradually some of the operations from the other plants could be

shifted to the new plant. The Japanese have a very conservative style of managing and so

they (and the company) will grow slowly but steadily. In pursuit of the same, the

company will continue to launch new products (SKUs). Thus, we continue to maintain

our conviction in the stock idea and maintain our target price of Rs175 with a perspective

of 12 months.

ECONOMY:

India rises five spots to become 58th most competitive economy India has been ranked as the 58th most competitive economy on the World Economic

Forum’s global competitiveness index for 2018. The U.S. is the most competitive

economy in the world. India rose five spots from its 2017 position, the largest gain

among G20 economies, the WEF said. On the list of 140 economies, the U.S. was

followed by Singapore and Germany at the second and the third positions respectively.

India ranked 58th with a score of 62 in the latest Global Competitiveness Report.

Meanwhile, neighbouring China was ranked 28th in the overall list.

Our comments: According to the report, the top performers in the "upper and lower middle-income

brackets", such as China and India, are catching up with or even outperforming the

average among high-income economies.

INDUSTRY:

Carmakers hope Diwali will slay Dussehra demons For carmakers, this Navratri and Dussehra may have been the dullest in six years, with

surging fuel and upfront insurance costs causing sales to skid. Against expectations of

double-digit growth, Ganesh Chaturthi and Onam had already failed to accelerate sales

and the industry might well consider it an achievement if 2018 festival season volumes

even match those of last year. Retail sales fell 5-20% for cars and 15-20% for

two-wheelers. However, commercial vehicle sales remained strong during Navratri and

Dussehra, providing some reason for optimism.

Our comments: Although for the last three months the auto sales have been muted; it is expected that

they should pick up for the month of October with all hopes on the Diwali sales.

Insurance costs hit two-wheeler sales Two-wheeler sales this festive season have been disappointing, say dealers and

manufacturers, as higher insurance premiums, rising fuel costs and poor market

sentiment have led people to delay or drop their plans to purchase a motorcycle or

scooter. Dealers are staring at large inventories built-up ahead of the festivals, as they

apprehend a sharp decline in demand compared with last year’s festive season.

Our comments: With the uncertainty comes the deferral in the purchase. Already there were economic

headwinds which had impacted growth in the segment and the insurance cost spike only

added to the slowdown.

26 Oct 2018

Please Turn Over

Focused Management

India In Competitive

Economy Scale

Two-wheeler Sales Under

Stress

Festive Cheers Awaited

COMPANY:

Biocon receives positive CHMP opinion for Ogivri European Medicines Agency's Committee for Medicinal Products for Human Use

(CHMP) has issued a positive opinion recommending approval of Ogivri for Biocon. The

positive CHMP opinion is based on data submitted as part of the Marketing

Authorization Application which included similarity assessment in analytical testing,

preclinical and clinical studies. The CHMP positive opinion will now be considered by

the European Commission. The decision on approval is expected by the end of 2018.

Our comments: This is the third molecule from the collaboration portfolio to receive positive opinion

from the European CHMP.

Unichem gets EIR from USFDA for Pithampur, Roha facilities The company's API manufacturing facilities have received EIRs from the United

States Food and Drug Administration (USFDA) indicating closure of inspections at both

the facilities. The inspection at Pithampur was conducted by the FDA from July 23, to

July 27, 2018 and the inspection at Roha was conducted by the FDA from July 30, to

August 3, 2018.

Our comments: This is positive for the company.

Sun Pharma launches psoriasis treatment drug Ilumya in US Sun Pharmaceutical Industries has launched its plaque psoriasis treatment drug Ilumya

(tildrakizumab-asmn) in the US market. Ilumya in the strength of 100 mg/mL is now

available in the US for the treatment of moderate-to-severe psoriasis. Ilumya offers a

new, safe and effective treatment option for people who are still struggling to manage

their moderate-to-severe plaque psoriasis.

Our comments: The availability of Ilumya is an important milestone for Sun Pharma as it expands the

speciality medicine portfolio in the US.

VA Tech Wabag bags EPC order worth Rs555cr in Qatar Va Tech Wabag has been awarded a first major EPC order worth Qatari Riyal 275mn

(Rs555cr) from Public Works Authority of Qatar (ASHGHAL). For this Design & Build

project, the scope includes the rehabilitation of Doha South Sewage Treatment Works

using lamella clarifier, disc filter and aerobic digester technology to treat the additional

sewage generated by the football stadium, which is under construction

for the FIFA World Cup 2022.

Our comments: The project is scheduled to be delivered over a period of 24 months, while the existing

plant is in operation.

Zydus Wellness, Cadila to buy Kraft Heinz India for Rs4,600cr Zydus Wellness has announced the acquisition of subsidiary of Kraft Heinz-Heinz India

jointly with Cadila Healthcare. It will include brands such as Complan, GluconD, Nycil

and Sampriti Ghee, two large manufacturing facilities in Aligarh and Sitarganj along

with teams devoted to operations, research, sales, marketing and support. The deal value

is pegged at Rs4,595cr.

Our comments: This would be an add-on to the portfolio leading to further diversification in the

offerings.

26 Oct 2018

Please Turn Over

Closure Of Inspection

For Unichem

Biocon On A Positive

Note

Sun Pharma’s Launch In

US

Orders for VA Tech

Wabag

Zydus-Kraft Heinz

Acquisition

DISCLAIMERS AND DISCLOSURES-

Progressive Share Brokers Pvt. Ltd. and its affiliates are a full-service, brokerage and financing group. Progressive Share Brokers Pvt. Ltd. (PSBPL) along with its affiliates are participants in virtually all securities trading markets in India. PSBPL started its operation on the National Stock Exchange (NSE) in 1996. PSBPL is a corporate trading member of Bombay Stock Exchange Limited (BSE), National Stock Exchange of India Limited (NSE) for its stock broking services and is Depository Participant with Central Depository Services Limited (CDSL) and is a member of Association of Mutual Funds of India (AMFI) for distribution of financial products. PSBPL is SEBI registered Research Analyst under SEBI (Research Analysts) Regulations, 2014 with SEBI Registration No. INH000000859. PSBPL hereby declares that it has not defaulted with any stock exchange nor its activities were suspended by any stock exchange with whom it is registered in last five years. PSBPL has not been debarred from doing business by any Stock Exchange / SEBI or any other authorities; nor has its certificate of registration been cancelled by SEBI at any point of time. PSBPL offers research services to clients as well as prospects. The analyst for this report certifies that all of the views expressed in this report accurately reflect his or her personal views about the subject company or companies and its or their securities, and no part of his or her compensation was, is or will be, directly or indirectly related to specific recommendations or views expressed in this report. Other disclosures by Progressive Share Brokers Pvt. Ltd. (Research Entity) and its Research Analyst under SEBI (Research Analyst) Regulations, 2014 with reference to the subject company (s) covered in this report-: · PSBPL or its associates financial interest in the subject company: NO · Research Analyst (s) or his/her relative's financial interest in the subject company: NO · PSBPL or its associates and Research Analyst or his/her relative's does not have any material conflict of interest in the subject company. The research Analyst or research entity (PSBPL) has not been engaged in market making activity for the subject company. · PSBPL or its associates actual/beneficial ownership of 1% or more securities of the subject company at the end of the month immediately preceding the date of publication of Research Report: NO · Research Analyst or his/her relatives have actual/beneficial ownership of 1% or more securities of the subject company at the end of the month immediately preceding the date of publication of Research Report: NO · PSBPL or its associates may have received any compensation including for brokerage services from the subject company in the past 12 months. PSBPL or its associates may have received compensation for products or services other than brokerage services from the subject company in the past 12 months. PSBPL or its associates have not received any compensation or other benefits from the Subject Company or third party in connection with the research report. Subject Company may have been client of PSBPL or its associates during twelve months preceding the date of distribution of the research report and PSBPL may have co-managed public offering of securities for the subject company in the past twelve months. · The research Analyst has served as officer, director or employee of the subject company: NO PSBPL and/or its affiliates may seek investment banking or other business from the company or companies that are the subject of this material. Our sales people, traders, and other professionals may provide oral or written market commentary or trading strategies to our clients that reflect opinions that are contrary to the opinions expressed herein, and our proprietary trading and investing businesses (if any) may make investment decisions that may be inconsistent with the recommendations expressed herein. In reviewing these materials, you should be aware that any or all of the foregoing, among other things, may give rise to real or potential conflicts of interest including but not limited to those stated herein. Additionally, other important information regarding our relationships with the company or companies that are the subject of this material is provided herein. This report is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution publication, availability or use would be contrary to law or regulation or which would subject PSBPL or its group companies to any registration or licensing requirement within such jurisdiction. If this document is sent or has reached any individual in such country, especially, USA, the same may be ignored. Unless otherwise stated, this message should not be construed as official confirmation of any transaction. None of the material, nor its content, nor any copy of it, may be altered in any way, transmitted to, copied or distributed to any other party, without the prior express written permission of PSBPL. All trademarks, service marks and logos used in this report are trademarks or registered trademarks of PSBPL or its Group Companies. The information contained herein is not intended for publication or distribution or circulation in any manner whatsoever and any unauthorized reading, dissemination, distribution or copying of this communication is prohibited unless otherwise expressly authorized. Please ensure that you have read “Risk Disclosure Document for Capital Market and Derivatives Segments” as prescribed by Securities and Exchange Board of India before investing in Indian Securities Market. In so far as this report includes current or historic information, it is believed to be reliable, although its accuracy and completeness cannot be guaranteed. Terms & Conditions: This report has been prepared by PSBPL and is meant for sole use by the recipient and not for circulation. The report and information contained herein is strictly confidential and may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent of PSBPL. The report is based on the facts, figures and information that are considered true, correct, reliable and accurate. The intent of this report is not recommendatory in nature. The information is obtained from publicly available media or other sources believed to be reliable. Such information has not been independently verified and no guaranty, representation of warranty, express or implied, is made as to its accuracy, completeness or correctness. All such information and opinions are subject to change without notice. The report is prepared solely for informational purpose and does not constitute an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments for the clients. Though disseminated to all the customers simultaneously, not all customers may receive this report at the same time. PSBPL will not treat recipients as customers by virtue of their receiving this report.

Compliance Officer: Mr. Shyam Agrawal, Email Id: compliance@progressiveshares.com, Contact No.:022-40777500.

Registered Office Address: Progressive Share Brokers Pvt. Ltd, 122-124, Laxmi Plaza, Laxmi Indl Estate, New Link Rd, Andheri West, Mumbai-400053; www.progressiveshares.com Contact No.:022-40777500.