spark capital previewmailers.sparkcapital.in/uploads/daily/spark 2qfy16 preview - final.pdfqtr was...

Spark Capital 2QFY16 Results Preview

Date Oct 07, 2015

Market data

SENSEX 26,933

Nifty 8,153

ABHINESH VIJAYARAJ

91.44. 4344 0006

BHARANIDHAR VIJAYAKUMAR

91.44. 4344 0038

DR HARITH AHAMED

91.44. 4344 0054

MUKESH SARAF

91.44. 4344 0041

GIRISH CHOUDHARY

91.44. 4344 0021

SRIVATHSAN RAMACHANDRAN

91.44. 4344 0039

TEJASH SHAH

91.22. 4228 8155

VIJAYARAGHAVAN

91.44. 4344 0022

VISHNU KUMAR A S

91.44. 4344 0069

Our coverage universe of 135 stocks are expected to report 4.0% yoy growth in PAT. Excluding O&G and Financial stocks, expect a

5.5% yoy revenue growth, 6.9% yoy operating profit growth (~17.8% margin with 24bps yoy expansion) and 7.2% yoy earnings

growth (~11.4% margin with 18bps yoy expansion). Expect strong earnings growth from sectors such as Autos(~ex TTMT), Banking

(Pvt Banks), Capital goods and IT. Cement, Consumption, Infra/Ports and Pharma are likely to deliver muted performance whereas

Oil & Gas to witness weak earnings season.

What are our key monitorables apart from the headline performance?

Auto – Among auto OEMs, TVS Motors, Bajaj Auto to see sequential improvement in margins on the back of lower commodity prices while margins

of Ashok Leyland and Eicher Motors are expected to benefit from improved volumes. Tata Motors margins on the other hand is expected to be

weighed down by weaker JLR performance, despite moderate standalone performance, while Apollo Tyres is expected to be impacted by higher

raw material costs. CV and CV suppliers, overall, to experience a positive impact on revenues on improved volumes.

Cement – Cement companies in our coverage universe are expected to report volume growth of 6% y-o-y. Average realisations are expected to be

flat y-o-y and up 2% q-o-q. Cement prices rebounded significantly in North from 2nd week of Aug, as a result, they are expected to post 5-6% q-o-q

growth in realisations. Prices in South (ex-AP and Telangana) remained steady. AP and Telangana prices dropped by Rs.15-20/bag in September.

Cap Goods, Engineering and Consumer Durables – Order inflow, execution and margins are expected to be on a recovery trend for most

companies in the capital goods space. In consumer durables, growth for electrical appliance is expected to stay subdued owning to weak housing-

led demand, while white goods growth is expected to moderate from a high base.

Consumption – Volumes across consumption companies to remain muted as spending climate remains sluggish and that base quarter had a

positive impact of early festive season. Lack of inflationary climate has also largely restricted any price/mix led growth. Benign raw material costs

though should continue to lead to margin expansion. However with companies under pressure to re-invest the margin benefits to drive volume

growth, operating margin expansion to be limited. Commentaries from management on ground level indicators of demand revival leading up to the

festive season would be a key monitorable.

Financials– Expect sequential systemic credit growth of ~1% and yoy credit growth of ~10%, with private sector banks registering higher growth.

Asset quality stresses to remain elevated with slippages at ~4% for PSU banks, with new managements taking over and a resultant balance sheet

clean up in the offing. The 32bps fall in 10 year G-Sec yields during the quarter should result in healthy treasury income and reversal of investment

diminution related provisions. NIMs to remain under pressure for most banks, with the flurry of rate cuts effected in the previous quarter. In the

NBFC space expect housing finance companies to register ~20% yoy loan growth; loan growth to remain subdued in the asset financing space at

~9% yoy with continuing asset quality stress led by both NPA transition and a weak rural macro.

Healthcare – We expect a mixed set of results for our healthcare coverage companies. Favourable currency movement (7% yoy depreciation of

INR vs. USD) will boost earnings of Syngene and Divi’s. Higher R&D cost and ongoing restructuring of domestic business will likely impact Biocon’s

performance for the quarter.

Oil & Gas – OMCs likely to report weak earnings led by low GRMs driven by inventory losses and weak product cracks. Also HSD margins for the

qtr was below pre de-regulated era margins which could lead to lower marketing earnings. Expect nil absorption of subsidy losses during the

quarter. Despite this low commodity prices lead to low upstream realisation. Gas utilities to report bleak earnings (IGL & PLNG), while GSPL's

earnings could increase by >30% yoy due to higher volume off-take.

Infra & Ports – Flattish volume growth expected for the Indian Ports on the back of falling trade and banning of key commodities by countries like

China etc.; however tariff hikes and margin improvement to hold them in good stead- positive for both ADSEZ & GPPV; road EPC business is likely

to witness flattish/ marginally positive yoy performance due to timing of order wins.; higher traffic growth rates in BOT assets to boost road

developers; Recent order wins by all coverage companies provides better growth visibility.

IT – Aided by benevolent rupee and traditionally being the strongest quarter, IT companies are expected to show good results in Q2FY16E. We are

modeling Tier 1 CC revenue growth of 1.7%-5% qoq, with TCS leading the pack and HCLT lagging. PAT growth would be better than revenue

growth aided by better operating margins and high gains on Monetary assets restatement. Key commentary to watch for: Pricing pressures in

traditional business, IMS traction, Digital wins, sectoral outlook especially in Financial services and Resources.

Find Spark Research on Bloomberg (SPAK <go>),

Thomson First Call, Reuters Knowledge and Factset

2QFY16 Results Preview

Serial. No Sectors Page

1 Auto Page 3

2 Building Material Page 7

3 Cement Page 8

4 Consumption Page 10

5 Engg & Cap Goods Page 14

6 Financials Page 18

7 Healthcare Page 24

8 Infra & Ports Page 25

9 Logistics Page 27

10 Oil and Gas Page 28

11 Technology Page 30

2QFY16 Results Preview AUTOSector

All numbers in Rs. mn except per share data

Quarter ChangeComments / Watch out for Recommendation

Sep-15 Jun-15 Sep-14 YoY QoQ

Bajaj Auto (Standalone)

Revenue 59,790 56,135 59,631 0% 7%

While domestic volumes remained flat on qoq and yoy basis, the export

volumes registered a qoq growth of 9% (flat, yoy). Expect qoq realization to

go up marginally driven by higher exports. Qoq EBITDA margins to improve

marginally driven by better operating leverage.

ADD

EBITDA 12,468 11,397 11,268 11% 9%

EBITDA Margin 20.9% 20.3% 18.9% 196 bps 55 bps

PAT 8,897 10,148 8,529 4% -12%

EPS 30.7 35.1 29.5 4% -12%

Hero MotoCorp (Standalone)

Revenue 66,987 69,553 69,153 -3% -4%Qoq Revenue expected to decline on the back of ~ 4% decline in volumes -

primarily motorcycle volumes which is expected to be partially offset by a

marginal increase in average realisations. led by a better export import mix.

EBITDA margins expected to improve marginally qoq on the back of higher

realisations and cost rationalisation efforts undertaken by the company.

BUY

EBITDA 10,169 10,479 9,348 9% -3%


PAT 7,295 7,503 7,634 -4% -3%

EPS 36.5 37.6 38.2 -4% -3%

Mahindra and Mahindra (M&M and MVML Combined)

Revenue 84,730 94,371 91,779 -8% -10%

Qoq decline in tractor volumes by 27% (2% growth yoy) more than offsets

the 5% qoq growth in the automotive segment (7% degrowth yoy).

EBITDA margins to decline by around 75 bps on account of lower capacity

utilisation

ADD

EBITDA 11,523 13,530 11,005 5% -15%

EBITDA Margin 13.6% 14.3% 12.0% 161 bps -74 bps

PAT 9,069 8,311 9,741 -7% 9%

EPS 14.7 13.5 15.8 -7% 9%

Maruti Suzuki (Standalone)

Revenue 1,38,445 1,34,249 1,23,038 13% 3% Domestic and export volumes witness growth of 12% and degrowth of 12%

yoy respectively; and 6% growth and 16% degrowth qoq respectively.

Though average realization is expected to remain flat qoq, the realisation is

expected to register a 2.5% growth yoy on the back of a better product mix.

Gross margin expected to sustain at around 32.5%, with other expenses as

% of sales expected to remain at similar levels qoq.

BUY

EBITDA 22,678 21,891 15,208 49% 4%


PAT 12,507 11,929 8,625 45% 5%

EPS 41.4 39.5 28.6 45% 5%

Tata Motors (Consolidated)

Revenue 5,58,525 6,10,195 6,05,642 -8% -8%

MHCV volumes up 36% yoy whereas LCV Volumes down by 25% yoy; JLR

Volumes up by 10% yoy. JLR EBITDA margin expected at 15%, down

140bps qoq; standalone EBITDA to increase by 80bps driven by better

operating leverage

BUY

EBITDA 71,705 91,088 95,665 -25% -21%

EBITDA Margin 12.8% 14.9% 15.8% -296 bps -209 bps

PAT 20,117 27,689 32,909 -39% -27%

EPS 5.9 8.2 9.7 -39% -27%





TVS Motors (Standalone)

Net sales 28,390 26,212 26,831 6% 8%Total volume remained flat yoy (6% growth qoq). Scooters grew strongly by 332%

qoq and 10% yoy, however mopeds degrew by 8% qoq and 12% yoy. Average

realisation expected to remain largely flattish sequentially

Margin expected to improve marginally by ~80bps qoq driven by better operating

efficiencies.

SELL

EBITDA 1,992 1,637 1,777 12% 22%


PAT 1,174 903 1,098 7% 30%

EPS 2.5 1.9 2.3 7% 30%

Eicher Motors (Consolidated)

Net sales 31,141 29,167 22,750 37% 7%

~56% volume growth in Royal Enfield yoy; VECV volumes improves 16% yoy

VECV margins expected to remain flat, while that of the parent are expected to

increase marginally qoq.

ADD

EBITDA 4,899 4,316 3,053 61% 14%


PAT 2,625 2,218 1,650 59% 18%

EPS 96.5 71.8 60.7 59% 34%

Ashok Leyland

Net sales 49,730 38,412 32,177 55% 29%

MHCV volume grew by ~65% yoy, while LCV volumes remained flat

Expect margin to improve further qoq on the back of better operating leverage.ADD

EBITDA 5,470 3,887 2,344 133% 41%


PAT 2,646 1,593 117 NA 66%

EPS 0.9 0.6 0.0 NA 66%

Amara Raja Batteries (Standalone)

Net sales 11,869 11,450 10,656 11% 4%

Revenue growth of 11% qoq expected to be driven primarily growth in the

industrial segment, specifically telecom and UPS segment.

Margins to improve marginally qoq on the back of better absorption of costs.

ADD

EBITDA 2,170 2,080 1,853 17% 4%


PAT 1,309 1,233 1,003 30% 6%

EPS 7.7 7.2 5.9 30% 6%

Apollo Tyres (Consolidated)

Net sales 30,053 28,454 33,151 -9% 6%

Standalone revenue to remain flat yoy; while Europe operations is expected to

de-grow by 15% (in INR). Standalone EBITDA margin to decrease by ~70bps

qoq, primarily due to higher RM costs and consol EBITDA to decline marginally by

~40bps qoq

ADD

EBITDA 5,190 5,025 4,934 5% 3%


PAT 2,877 2,906 2,579 12% -1%

EPS 5.7 5.2 5.1 12% 9%





Exide Industries (Standalone)

Net sales 19,143 17,995 17,633 9% 6%

Revenue to improve by 9% yoy driven primarily by the auto replacement and

telecom segment. EBITDA margin expected to increase ~10bps qoqReduce

EBITDA 2,795 2,660 2,077 35% 5%


PAT 1,644 1,552 1,258 31% 6%

EPS 1.9 1.8 1.5 31% 6%

Wabco India (Standalone)

Net sales 4,396 3,850 3,230 36% 14%

Revenues to be grow 36% yoy driven primarily by higher OEM volumes and

export volumes. Margins to improve ~211bps qoq due to better product mix

sequentially.

ADD

EBITDA 783 696 507 54% 12%


PAT 518 475 313 66% 9%

EPS 27.3 25.0 16.5 66% 9%

SKF India (Standalone)

Net sales 6,656 6,104 6,128 9% 9%

Revenue growth of 9% yoy to be driven primarily by industrial segment

Margin expected to improve qoq, to ~12% driven by higher operating leverageADD

EBITDA 799 706 777 3% 13%

EBITDA Margin 12.0% 11.6% 12.7% -68 bps 43 bps

PAT 582 526 586 -1% 11%

EPS 11.0 10.0 11.1 -1% 11%

Bharat Forge (Standalone)

Net sales 11,284 11,285 11,383 -1% 0%

Revenue growth driven by strong traction in the non auto segment and exports

segment. EBITDA margin to increase 60bps due to better leverage.BUY

EBITDA 3,532 3,461 3,247 9% 2%


PAT 1,983 1,953 1,773 12% 2%

EPS 8.5 8.4 7.6 12% 2%

NRB Bearings

Net sales 1,801 1,600 1,762 2% 13%

Revenue growth to be 13% yoy; domestic business to be driven by CV segment;

EBITDA margin to improve 56bps sequentially on the back of better absorption of

overheads.

BUY

EBITDA 294 252 347 -15% 17%


PAT 155 126 168 -8% 23%

EPS 1.6 1.3 1.7 -8% 23%





Ramkrishna Forgings Limited

Net sales 2,615 2,355 1,626 61% 11%

Revenue growth to be 61% yoy; aided by scaling up of new export orders.

EBITDA margin to remain flat sequentially.BUY

EBITDA 547 490 268 104% 12%


PAT 196 177 165 19% 11%

EPS 7.1 6.4 6.0 19% 11%

Timken India Limited

Net sales 2,862 2,656 2,340 22% 8%

Revenue growth expected at 8% yoy; aided by strong growth in auto-OEM and

railways segments. Qoq EBITDA margin to decrease due to an increase in other

expenditure and RM costs

BUY

EBITDA 444 449 333 33% -1%


PAT 274 233 208 32% 18%

EPS 4.0 3.4 3.1 32% 18%

2QFY16 Results Preview BUILDING MATERIALSector




Kajaria Ceramics (Consolidated)

Volumes (msm) 15.2 14.9 14.3 6% 2%

Expect sales to grow by 8% y-o-y. Consolidated volumes to grow by 6% y-o-y

Expect EBITDA to increase by 15%

PAT to grow by 14% y-o-y

ADD

Net Sales 5,841 5,487 5,394 8% 6%

EBITDA 935 928 813 15% 1%

EBITDA margin 16.0% 16.9% 15.1% 94 bps -91 bps

PAT 454 462 398 14% -2%

Somany Ceramics (Standalone)

Volumes (msm) 11.0 10.7 10.2 8% 3%

Expect sales to grow by 14% y-o-y. Consolidated volumes to grow by 8% y-o-y.

Expect EBITDA to go up by 14%.

PAT to grow by 20% to Rs. 126mn

ADD

Net Sales 4,284 3,936 3,742 14% 9%

EBITDA 270 240 237 14% 12%

EBITDA margin 6.3% 6.1% 6.3% -3 bps 19 bps

PAT 126 105 105 20% 20%

Cera Sanitaryware (Standalone)

Net sales 2,275 1,943 1,996 14% 17%

Revenues to grow by 14% y-o-y. Expect EBITDA to grow at 11%. PAT to grow by

12% y-o-y to Rs. 177mnREDUCE

EBITDA 306 282 276 11% 8%

EBITDA margin 13.5% 14.5% 13.8% -40 bps -109 bps

PAT 177 157 158 12% 13%

HSIL Ltd (Consolidated)

Net Sales 4,509 4,129 4,238 6% 9% Expect Revenues to increase by 6% y-o-y. Expect Building products revenues to

grow by 5% y-o-y. Packaging products revenues to increase by 8% y-o-y. Expect

EBIT margins of 9% for the packaging division and 13% for building products

division this quarter.

ADDEBITDA 702 640 748 -6% 10%


PAT 228 174 191 20% 31%

Century Plyboards (Consolidated)

Net Sales 4,233 3,709 4,070 4% 14% Expect Revenues to grow by 4% y-o-y. Expect Plywood segment revenues to

grow by 3% y-o-y with an EBIT margin of 17%. Laminates segment revenues to

grow by 10% y-o-y with an EBIT margin of 13%.Expect EBITDA to grow at 19%.

PAT to grow by 14% to Rs. 424mn

BUYEBITDA 776 671 653 19% 16%

EBITDA margin 18.3% 18.1% 16.0% 228 bps 24 bps

PAT 424 400 373 14% 6%

Greenply Industries (Standalone)*

Net Sales 4,485 3,808 4,108 9% 18%Expect Revenues to grow by 9% y-o-y. Expect plywood segment to grow by 7% y-

o-y with an EBIT margin of 8% this quarter. Expect MDF segment to grow by 25%

y-o-y with an EBIT margin of 28% this quarter.

BUYEBITDA 654 559 528 24% 17%


PAT 335 267 268 25% 26%

2QFY16 Results Preview CEMENTSector




ACC (Standalone)

Volumes (mt) 5.8 6.2 5.6 3% -7%

Expect 3% volume growth y-o-y. Revenues to grow by 2% y-o-y

Expect realisation growth of 2% q-o-q. Expect EBITDA to de-grow by 1% y-o-yADD

Net Sales 28,027 29,612 27,419 2% -5%

EBITDA 3,039 2,795 3,060 -1% 9%


PAT 1,635 1,314 2,049 -20% 24%

Ambuja Cements (Standalone)

Volumes (mt) 5.1 6.0 4.8 6% -14%

Expect sales to grow by 2% y-o-y. Volumes to grow by 6% y-o-y

Expect q-o-q realisation growth of 5%. Expect EBITDA to de-grow by 4% y-o-yADD

Net Sales 22,382 24,928 21,876 2% -10%

EBITDA 3,643 3,661 3,789 -4% 0%


PAT 2,207 2,264 2,391 -8% -2%

Birla Corporation (Standalone)

Volumes (mt) 1.9 2.0 1.9 -3% -5%

Expect sales to de-grow by 2% y-o-y . Volumes to de-grow by 3% y-o-y

Expect 3% q-o-q realisation growth. Expect EBITDA to grow by 49% y-o-yBUY

Net Sales 7,547 7,735 7,671 -2% -2%

EBITDA 866 439 580 49% 97%


PAT 556 166 325 71% 234%

Dalmia Bharat Limited (Consolidated)

Volumes (mt) 2.6 3.1 1.5 77% -17%

Expect sales to grow by 85% y-o-y due to consolidation of OCL India.

Consolidated volumes to grow by 77% y-o-y.

Expect overall realisations to be flat on a q-o-q basis. Expect EBITDA to grow by

154% y-o-y

BUY

Net Sales 13,221 16,133 7,138 85% -18%

EBITDA 2,958 4,012 1,165 154% -26%


PAT 17 416 -170 -110% -96%

India Cements (Standalone)

Volumes (mt) 2.1 2.1 2.4 -10% 1%

Expect sales to de-grow by 6% y-o-y. Volumes to de-grow by 10% y-o-y .

Expect 2% realisation de-growth on a q-o-q basis. Expect EBITDA to grow by

14% y-o-y

ADD

Net Sales 10,664 10,710 11,317 -6% 0%

EBITDA 2,046 1,950 1,791 14% 5%


PAT 2,046 401 75 2632% 410%

2QFY16 Results Preview CEMENTSector




The Ramco Cements (Standalone)

Volumes (mt) 1.8 1.9 2.1 -15% -4%

Expect sales to de-grow by 8% y-o-y. Volumes to de-grow by 15% y-o-y.

Realisations to de-grow by 2% q-o-q. Expect EBITDA to grow by 13% y-o-yBUY

Net Sales 8,514 9,225 9,221 -8% -8%

EBITDA 2,121 2,230 1,870 13% -5%

EBITDA margin 25% 24% 20% 463 bps 74 bps

PAT 890 975 897 -1% -9%

Shree Cements (Standalone)

Volumes (mt) 4.2 4.3 3.9 8% -3%

Revenues to grow 7% y-o-y. Expect volumes to grow by 8% y-o-y

Expect realisations to grow by 5% on a q-o-q basis. Expect EBITDA to grow by

13% y-o-y

ADD

Net Sales 17,157 17,194 16,053 7% 0%

EBITDA 3,809 3,516 3,376 13% 8%

EBITDA margin 22% 20% 21% 117 bps 175 bps

PAT 1,338 1,041 1,088 23% 29%

UltraTech Cements (Standalone)

Volumes (mt) 11.3 12.4 10.7 6% -9%

Expect revenues to grow 4% y-o-y. Volumes to grow by 6% y-o-y

Expect sequential realisation growth of 2% on a q-o-q basis. Expect EBITDA to

grow by 18% y-o-y

ADD

Net Sales 56,160 60,382 53,818 4% -7%

EBITDA 9,813 10,926 8,295 18% -10%

EBITDA margin 17% 18% 15% 206 bps -62 bps

PAT 4,762 5,908 4,101 16% -19%

Orient Cement (Standalone)

Volumes (mt) 0.9 1.0 1.0 -5% -4%

Revenues to de-grow by 8% y-o-y. Volumes to de-grow by 5% y-o-y

Expect realisations to grow 5% on a q-o-q basis. Expect EBITDA to de-grow by

19% y-o-y

ADD

Net Sales 3,545 3,494 3,859 -8% 1%

EBITDA 645 597 791 -19% 8%

EBITDA margin 18% 17% 20% -231 bps 111 bps

PAT 347 279 433 -20% 24%

JK Lakshmi Cements (Standalone)

Volumes (mt) 1.7 1.7 1.5 15% 1%

Expect revenues to grow by 10% y-o-y. Volumes to grow by 15% y-o-y. Expect

5% growth in sequential realisations on a q-o-q basis. Expect EBITDA to de-grow

by 32% y-o-y

ADD

Net Sales 6,278 5,908 5,726 10% 6%

EBITDA 611 507 892 -32% 20%

EBITDA margin 10% 9% 16% -585 bps 115 bps

PAT -189 -235 306 -162% -20%

2QFY16 Results Preview CONSUMPTIONSector




Bajaj Corp (Standalone)

Net sales 2,167 2,191 1,880 15% -1%~10-11% volume growth in ADHO coupled with better traction in Nomarks and

Amla variant sales should aid revenue growth momentum. Despite significant

increase in A&P outlay, gross margin cushion to keep margins stable. Watch

out: Commentary on ADHO's growth prospects, retail level offtakes, progress on

Nomarks & LLP price outlook.

BUY

EBITDA 650 674 521 25% -4%

EBITDA Margin 30% 31% 28% 229bps -75bps

PAT 577 576 467 23% 0%

Adjusted EPS 3.9 3.9 3.2 23% 0%

Colgate (Standalone)

Net sales 10,718 10,102 10,005 7% 6%We anticipate volume growth to be in low single digits. Despite lower raw material

prices and A&P, adverse impact on account of phasing out of fiscal benefits in key

manufacturing locations to keep operating performance muted. Watch out:

Comments/guidance on new launches, growth seen in toothpaste segments in

rural/ urban markets, competitive intensity scenario.

ADD

EBITDA 2,221 2,018 1,865 19% 10%

EBITDA Margin 21% 20% 19% 208bps 75bps

PAT 1,463 1,375 1,296 13% 6%

EPS 5.4 5.1 4.8 13% 6%

Dabur (Consolidated)

Net sales 20,914 20,695 19,296 8% 1%Expect domestic volumes to grow in the range of ~6-7%. International business to

record ~10% growth yoy. Gross margin expansion expected to continue, however

increasing marketing efforts to stimulate volume growth should keep operating

margins flat. Watch out: Guidance on prospects in domestic/ international

categories, updates on rural & urban spending

ADD

EBITDA 4,033 3,218 3,508 15% 25%


PAT 3,233 2,611 2,875 12% 24%

EPS 1.8 1.5 1.6 12% 24%

Emami (Consolidated)

Net sales 6,487 5,899 4,896 32% 10%Emami to record ~17-18% like for like growth. Kesh King to add momentum to

revenue growth. Operating margins to be slightly expand however higher finance

cost and effective tax rate are expected to keep PAT growth lower. Watch out:

Comments/guidance on Performance of power brands & Kesh King and impact on

account of monsoon trends

REDUCE

EBITDA 1,627 997 1,132 44% 63%


PAT 1,170 754 907 29% 55%

EPS 5.2 3.3 4.0 29% 55%

GlaxoSmithKline Consumer Healthcare (Standalone)

Net sales 12,162 10,450 11,136 9% 16%Revenue growth to be led by low single digit volume growth and ~6-7% price/

mix change. Despite higher gross margins, higher A&P to lead to stable

operating performance. Watch out: Comments/ outlook on performance of

smaller LUPs in rural, performance of niche premium variants, agri commodity

prices and new launches.

ADD

EBITDA 2,443 1,989 1,957 25% 23%


PAT 1,905 1,550 1,603 19% 23%

EPS 45.3 36.9 38.1 19% 23%


FMCG - All numbers in Rs. mn except per share data



Hindustan Unilever (Standalone)

Net sales 81,817 81,051 76,393 7% 1%Expect domestic volume growth to be at ~4-5% YoY. Tepid offtakes in Detergents

and Soaps to prolong while personal products segment should record ~10-11%

revenue growth. Operating margins to increase led by easing of commodity costs

despite higher A&P. Watch out: Volume growth in soaps & detergent and

personal care space segments, volume traction in Beverages portfolio.

ADD

EBITDA 14,061 15,064 12,420 13% -7%


Adjusted PAT 10,500 10,525 9,539 10% 0%

EPS 4.9 4.9 4.4 10% 0%

ITC (Standalone)

Net sales 97,043 85,877 90,237 8% 13%Cigarettes volumes are expected to de-grow in mid teens this quarter as

consumers continue to grapple with steep price increases. Growth in other FMCG

segment to be moderate. Operating margins to expand on gross margin

expansion. Watch out: Comments on price increases affected and probable

impact of imposition of drought tax in certain states.

ADD

EBITDA 37,122 33,859 34,887 6% 10%

EBITDA Margin 38% 39% 39% -41bps -117bps

PAT 26,526 22,654 24,252 9% 17%

EPS 3.3 2.8 3.0 9% 17%

Jyothy Labs (Consolidated)

Net sales 3,996 4,143 3,679 9% -4%Tepid volume growth and limited scope for price/mix increase should keep

revenues subdued .Gross margin benefits coupled with high base quarter to lead

to margin expansion. Watch out: Price wars in the detergent portfolio, updates on

performance of new launches and contribution of Ujala sales from Non-South

regions and performance of Maxo.

BUY

EBITDA (Pre ESOP) 517 688 394 31% -25%


Adjusted PAT 379 545 312 22% -31%

EPS 2.1 3.0 1.7 22% -31%

Marico (Consolidated)

Net sales 16,004 17,832 14,312 12% -10%Revenue growth to be led by 14% growth in domestic operations. Parachute rigid,

Saffola and Value added hair oils to grow ~13%, ~3% and ~20% respectively.

Operating margins to expand given the high base of Copra prices in the base

quarter. Watch out: Trends in volume growth, raw material prices in domestic

operations and copra price trends.

ADD

EBITDA 2,453 3,253 1,953 26% -25%


PAT 1,661 2,308 1,183 40% -28%

EPS 2.6 3.6 1.8 40% -28%

Zydus Wellness (Consolidated)

Net sales 1,087 1,041 1,030 6% 4%Sugarfree and Nutralite brands to witness high single digit growth while Everyuth

growth expected to remain subdued. Price cuts affected in Nutralite expected to

revive brand volume growth momentum. Higher A&P expenses to keep EBITDA

growth flat. Watch out: Comments and benfits from distribution realignment

initiative; A&P spends and consumer sentiment.

REDUCE

EBITDA 278 168 258 8% 66%


PAT 297 195 273 9% 52%

EPS 7.6 5.0 7.0 9% 52%





Akzo Nobel India (Consolidated)

Net sales 6,468 6,584 6,067 7% -2%Given the subdued spending climate, volumes in decorative paints are expected to

remain challenging for this quarter too. Industrial paint segment revenue growth to

remain tepid. Gross margin levers to lead to operating margin expansion. Watch

out: Growth trends in decorative paints, margins. International subsidiaries

performance.

BUY

EBITDA 661 738 531 25% -10%

EBITDA Margin 10.2% 11.2% 8.7% 147bps -98bps

PAT 484 453 358 35% 7%

EPS 10.4 9.7 7.7 35% 7%

Asian Paints (Consolidated)

Net sales 39,311 36,235 36,330 8% 8%Subdued volumes in decorative paints coupled with ~2% adverse price cut should

keep revenue growth for Asian Paints subdued. Gorss margin benefits should

continue to accrue on weak raw material prices. Industrial paints & subsidaries

performance to be under pressure Watch out: comments on festive season

demand offtake and subsidaries performance.

REDUCE

EBITDA 6,704 6,835 5,362 25% -2%

EBITDA Margin 17.1% 19% 15% 229bps -181bps

PAT 4,415 4,552 3,473 27% -3%

EPS 4.6 4.7 3.6 27% -3%

Berger Paints India (Consolidated)

Net sales 11,957 11,212 11,042 8% 7%High single digit volume growth in decorative paints segment offtakes coupled with

decent growth in subsidiaries to lead to ~8% revenue growth. Expanded revenue

base coupled with gross margin benefits to drive operating margin expansion.

Watch out: Hindupur plant utilization level, product-mix changes, rural-urban

offtake and raw material scenario.

ADD

EBITDA 1,617 1,494 1,259 28% 8%


PAT 886 773 670 32% 15%

EPS 1.3 1.1 1.0 32% 15%

Kansai Nerolac Paints (Standalone)

Net sales 10,085 9,998 9,232 9% 1%Driven by uptick in passenger vehicle volumes (high single digits) and signs of

revival in Industrial cycle, KNPL revenues to grow ~9% yoy. Lower raw material

cost to lead to operating margin expansion. Watch out: Comments/ guidance on -

demand outlook across business verticals, pricing power in the automotive paints

business

ADD

EBITDA 1,505 1,491 1,204 25% 1%

EBITDA Margin 14.9% 15% 13.0% 189bps 2bps

PAT 925 940 727 27% -2%

EPS 1.7 1.7 1.3 27% -2%

Pidilite Industries (Consolidated)

Net sales 14,214 14,695 12,546 13% -3%

Revenues to be driven by performance in the C&B segment and modest recovery

in industrial division.Higher gross margin expected to lead to operating margin

expansion. PAT to be impacted on account of other income vagaries. Watch out:

Growth in tier 2/3 cities, VAM price outlook and other income realization schedule.

REDUCE

EBITDA 2,830 3,437 2,063 37% -18%

EBITDA Margin 19.9% 23.4% 16.4% 347bps -348bps

PAT 1,958 2,251 1,389 41% -13%

EPS 3.8 4.4 2.7 41% -13%





Titan (Consolidated)

Net sales 29,770 27,086 35,931 -17% 10%High base on account of closure of GHS schemes in the base quarter to keep

jewellery volumes subdued. Gold prices are down ~7-8% YoY which should also

weigh negatively on jewellery segment revenue growth. Watches segment growth

to remain in single digits. Watch Out: Updates on deposit schemes, demand

trends & comments on spending climate.

ADD

EBITDA 2,764 2,227 3,331 -17% 24%

EBITDA Margin 9.3% 8.2% 9.3% 1bps 106bps

PAT 1,940 1,511 2,400 -19% 28%

EPS 2.2 1.7 2.7 -19% 28%

Bata (Standalone)

Net sales 6,138 6,805 5,480 12% -10%Led by low base and various internal corrective measures (Supply chain

efficencies, product mix improvement), Bata is expected to record mid-teens

revenue growth this quarter. Margins to remain flat on a YoY basis.Watch Out: No

of stores that were opened, expected rental cost increase and employee cost for

FY16.

BUY

EBITDA 725 864 636 14% -16%

EBITDA Margin 11.8% 13% 11.6% 21bps -88bps

PAT 434 492 390 11% -12%

EPS 6.7 7.7 6.1 11% -12%

Arvind (Consolidated)

Net sales 21,177 18,769 19,646 8% 13%Revenue growth to optically seem weak given the high base quarter (2QFY15 had

benefits of early festive season). Brands business should continue gaining good

traction. EBITDA margins are expected to expand with several non-power brands

becoming profitable. Watch Out: Revenues from GAP, Operating profitability of

Non-power brands and expansion plans.

BUY

EBITDA 2,689 2,280 2,423 11% 18%

EBITDA Margin 12.7% 12% 12.3% 36bps 55bps

PAT 967 609 961 1% 59%

EPS 3.7 2.4 3.7 1% 59%

2QFY16 Results Preview ENGG & CAP GOODSSector




AIA Engineering (Consolidated)

Net sales 5,837 5,271 5,724 2% 11%Revenue growth is expected to moderate to 2% y-o-y on the back of near

term weakness in mining volumes. Overall realizations is expected to

improve to ~Rs. 115/kg on the back of product mix change and rupee

weakness. EBITDA margin is expected to sustain at >26% in this quarter

also.

BUY

EBITDA 1,529 1,459 1,478 3% 5%


PAT 1,078 1,029 1,082 0% 5%

EPS 11.4 10.9 11.5 0% 5%

Bajaj Electricals (Standalone)

Net sales 11,970 10,091 10,286 16% 19%

Growth in the appliances segment is expected to be muted. Lighting

segment should register y-o-y growth only due to execution of LED projects.

Margins in the engineering segment are expected to witness recovery only

from a low base

SELL

EBITDA 682 602 89 663% 13%


PAT 285 203 -142 NA 40%

EPS 2.8 2.0 (1.4) NA 40%

Bharat Heavy Electricals (Standalone)

Net sales 57,117 43,617 61,440 -7% 31%

We expect execution pressures to prevail in the medium term resulting in

revenue de-growth (7% y-o-y de-growth). EBITDA margin is expected to

recover from a low base but remain well below historical levels

SELL

EBITDA 4,284 -2,093 2,915 47% -305%

EBITDA Margin 7.5% -4.8% 4.7% 275 bps 1230 bps

PAT 2,502 339 1,248 100% 638%

EPS 1.0 0.1 0.5 100% 638%

Blue Star (Standalone)

Net sales 6,724 9,086 6,380 5% -26%Muted execution in the EMP segment is to be compensated by healthy

growth in the cooling products segment driven by traction in room air

conditioners. EBIT margin in the EMP segment is expected to be lacklustre

at ~4%, but is expected to improve y-o-y to 8% in the cooling products

segment driven by benign commodity prices

SELL

EBITDA 306 657 206 49% -53%


PAT 136 390 90 51% -65%

EPS 1.5 4.3 1.0 51% -65%

Crompton Greaves (Consolidated)

Net sales 34,649 31,658 34,303 1% 9%Revenue growth in the power segment is expected to remain subdued at

(5% y-o-y de-growth). EBIT margin in the overall power segment is

expected to remain muted on the back of persistent margin pressures in the

international power segment. Consumer segment is expected to witness

growth of ~14% y-o-y

SELL

EBITDA 1,757 1,319 1,684 4% 33%


PAT 798 162 682 17% 393%

EPS 1.3 0.3 1.1 17% 393%





Cummins India (Standalone)

Net sales 13,245 13,161 11,441 16% 1%

Power generation segment is expected to grow by 15% y-o-y through

market share gains. Growth in industrial segment is expected to remain

strong at 20% y-o-y. Similarly, exports is to continue growing by a strong

25% y-o-y. EBITDA margin is expected to improve to 17%

BUY

EBITDA 2,255 2,198 1,899 19% 3%


PAT 2,198 2,125 2,024 9% 3%

EPS 7.9 7.7 7.3 9% 3%

Elgi Equipments (Consolidated)

Net sales 3,353 3,265 3,194 5% 3%

Subdued near term demand from water-well segment to keep revenue

growth capped ~5% y-o-y. Better product mix and improved subsidiaries'

performance is expected to improve EBITDA margin.

BUY

EBITDA 320 310 278 15% 3%


PAT 142 137 138 3% 3%

EPS 0.9 0.9 0.9 3% 3%

Havells (Standalone)

Net sales 13,307 12,671 13,651 -3% 5%Weak demand in the cables and switchgear segments (5% y-o-y de-growth)

should result in subdued standalone growth (2.5% y-o-y de-growth).

EBITDA margin is expected to remain healthy at 13.6% Growth in Sylvania

(Euro terms) is expected to remain stunted (flat y-o-y). Sylvania margins are

expected to remain range bound at ~5.3%

ADD

EBITDA 1,804 1,583 1,833 -2% 14%


PAT 1,185 1,074 1,196 -1% 10%

EPS 1.9 1.7 1.9 -1% 10%

Kalpataru Power (Standalone)

Net sales 12,672 11,696 11,408 11% 8%

Moderate growth (10% y-o-y) in the transmission line segment over a high

base is expected to keep overall growth capped. EBITDA margin is

expected to increase 158bps y-o-y to 10.7% on the back of improved

margins in the infrastructure segment

BUY

EBITDA 1,354 1,224 1,038 30% 11%


PAT 589 484 427 38% 22%

EPS 3.8 3.2 2.8 38% 22%

Kirloskar Oil Engines (Standalone)

Net sales 6,206 5,772 6,225 0% 8%

Moderate traction in power generation segment and lack of large engine

orders are expected to keep overall revenue growth subdued in this

quarter. EBITDA margin is expected to be ~9.5%BUY

EBITDA 590 482 584 1% 22%


PAT 389 359 353 10% 8%

EPS 2.7 2.5 2.4 10% 8%





KEC International (Consolidated)

Net sales 24,119 18,780 21,727 11% 28%

Revenue is expected to grow by 11% y-o-y . EBITDA margin is expected to

improve by 54bps y-o-y to 6.1% but remain well below historical levels as

legacy orders in new segment orders (cable, water and railways) and SAE

Towers continue to act as a drag

SELL

EBITDA 1,471 1,407 1,208 22% 5%


PAT 277 304 203 37% -9%

EPS 1.1 1.2 0.8 37% -9%

Thermax (Standalone)

Net sales 12,864 10,012 11,908 8% 28%

Revenue is expected to grow 8% y-o-y over a low base. EBITDA margin is

expected to be range bound ~10%. Consolidated margins are expected to

remain under pressure due to losses in the TBW Joint Venture

SELL

EBITDA 1,266 910 1,223 4% 39%


PAT 856 617 860 -1% 39%

EPS 7.2 5.2 7.2 -1% 39%

Triveni Turbine (Standalone)

Net sales 1,791 1,237 1,558 15% 45%

Healthy execution of existing order book (especially export and GETL

orders) is to lead to 15% y-o-y growth. Higher proportion of high margin

export and after-sales service orders should improve margins y-o-y

ADD

EBITDA 412 202 348 18% 104%


PAT 275 144 239 15% 92%

EPS 0.8 0.4 0.7 15% 92%

TTK Prestige (Standalone)

Net sales 4,085 3,486 3,820 7% 17%

Recovery in demand, price increases in cooker is expected to partially

compensated for muted growth in appliances thereby leading to overall

revenue growth of 7% y-o-y . EBITDA margin is expected to remain at

~12% and unlikely to bounce back to historical levels

SELL

EBITDA 490 382 462 6% 28%


PAT 315 257 280 13% 23%

EPS 27.1 22.1 24.0 13% 23%





VA Tech Wabag (Consolidated)

Net sales 5,955 4,565 5,070 17% 30%

We expect revenue to grow by 17% y-o-y driven by healthy execution

especially in the overseas segments. EBITDA margin is expected is

expected to be under pressure due to execution of relatively low margin

orders

ADD

EBITDA 353 121 346 2% 193%


PAT 160 -99 142 12% -261%

EPS 2.9 (1.9) 2.7 12% -261%

V-Guard (Standalone)

Net sales 4,993 4,395 4,739 5% 14%

Foray into non-south markets and strong growth in stabilizers are expected

to partially neutralize the impact of weakness in electrical product sales.

Price increase across certain products is expected to improve EBITDA

margin y-o-y to 8.7%

BUY

EBITDA 435 353 405 8% 23%


PAT 252 201 223 13% 25%

EPS 8.4 6.7 7.5 13% 25%

Voltas (Consolidated)

Net sales 10,257 15,983 9,847 4% -36%

Revenue growth in the EMP segment is expected to remain tepid (flat y-o-y)

on the back of project delays. Growth in the UCP segment is expected to

pick up to 15% y-o-y. EBITDA margin is expected to witness improvement

y-o-y, but remain well below historical levels.

BUY

EBITDA 827 1,310 777 6% -37%


PAT 637 1,002 501 27% -36%

EPS 1.9 3.0 1.5 27% -36%

Whirlpool India (Standalone)

Net sales 7,986 11,003 7,446 7% -27%

Revenue is expected to grow by 7% y-o-y as volumes growth moderates

over a high base. EBITDA margin is expected to improve to 9% due to

benign commodity prices

ADD

EBITDA 719 1,499 642 12% -52%


PAT 440 981 407 8% -55%

EPS 3.5 7.7 3.2 8% -55%

2QFY16 Results Preview FINANCIALSSector




AXIS BANK (Standalone)

NII 39,932 40,562 35,249 13% -2%

Expect ~20% growth in the loan book on a yoy basis

Margins to come in at ~3.8%

Expect ~Rs.11bn of fresh slippages

SELL

Other Income 22,887 22,983 19,476 18% 0%

NIM 3.8% 3.9% 3.9% -8 bps -3 bps

PAT 21,112 19,784 16,107 31% 7%

EPS 8.9 8.3 6.8 30% 7%

BANK OF BARODA (Standalone)

NII 35,386 34,596 34,011 4% 2%

Estimate NIMs to inch up sequentially to ~2.1%

Expect GNPAs at ~4.3%, incremental slippages of ~Rs.20bn

Expect ~8% yoy loan growth

SELL

Other Income 11,314 9,672 9,917 14% 17%

NIM 2.1% 2.1% 2.2% -5 bps 6 bps

PAT 10,942 10,522 11,042 -1% 4%

EPS 4.9 4.7 5.1 -4% 4%

BANK OF INDIA (Standalone)

NII 29,448 29,131 30,307 -3% 1%

Expect asset quality stresses to continue, GNPAs at ~7%, incremental slippage at

~Rs.50bn

NIMs expected to remain muted qoq at ~2.1%

Loan growth expected at ~2% qoq

SELL

Other Income 11,569 8,406 10,064 15% 38%

NIM 2.1% 2.1% 2.2% -9 bps 3 bps

PAT 2,449 1,301 7,860 -69% 88%

EPS 3.7 2.0 12.2 -70% 88%

CANARA BANK (Standalone)

NII 26,138 25,165 23,678 10% 4%

Expect GNPAs at ~4.1%, and incremental slippages of ~Rs.26bn

Estimate NIMs at ~2.1%

Estimate loan growth of 7% yoy

SELL

Other Income 11,950 11,130 10,213 17% 7%

NIM 2.1% 2.0% 2.0% 7 bps 6 bps

PAT 6,361 4,788 6,268 1% 33%

EPS 12.3 9.3 13.6 -9% 33%

CITY UNION BANK (Standalone)

NII 2,281 2,236 2,062 11% 2%

Expect NIMs at ~3.4%

GNPAs expected at ~2.0%, with incremental slippages of ~1.9% annualized

Advances expected to clock 10% yoy growth

BUY

Other Income 1,005 1,049 902 11% -4%

NIM 3.4% 3.4% 3.4% 1 bps -2 bps

PAT 1,123 1,115 937 20% 1%

EPS 1.9 1.9 1.6 19% 1%





FEDERAL BANK (Standalone)

NII 6,209 6,048 6,058 2% 3%

Expect NIMs to remain at ~3.1%

Expect slippages of ~2.0%, GNPAs at 2.6%

Estimate 10% yoy credit growth

BUY

Other Income 2,511 1,939 1,959 28% 29%

NIM 3.1% 3.1% 3.4% -25 bps 3 bps

PAT 2,443 1,414 2,403 2% 73%

EPS 2.8 1.6 2.8 1% 73%

HDFC BANK (Standalone)

NII 65,050 63,888 55,110 18% 2%

Factor in 23% yoy growth in loan book

Margins to contract by ~10bps post recent base rate cut

Expect asset quality to hold.

BUY

Other Income 25,749 24,619 20,471 26% 5%

NIM 4.5% 4.6% 4.8% -30 bps -7 bps

PAT 29,646 26,957 23,815 24% 10%

EPS 11.8 10.7 9.9 19% 10%

ICICI BANK (Standalone)

NII 50,888 51,151 46,566 9% -1%

Loan book to grow by 15% on a yoy basis.

Margins to come in at ~3.6%.

Slippages to remain elevated; expect Rs.22bn of incremental slippages

BUY

Other Income 32,616 29,899 27,384 19% 9%

NIM 3.6% 3.6% 3.4% 20 bps 1 bps

PAT 30,358 29,762 27,090 12% 2%

EPS 5.2 5.1 4.7 12% 2%

INDUSIND BANK (Standalone)

NII 10,301 9,807 8,331 24% 5%

Factoring ~24% yoy increase in advances book.

Momentum in fee income streams to continue.

Growth in SA balances and accounts will be a key monitorable.

Commentary on CV cycle would of interest to us.

BUY

Other Income 7,166 7,243 5,583 28% -1%

NIM 3.8% 3.8% 4.0% -13 bps 3 bps

PAT 5,475 5,250 4,302 27% 4%

EPS 9.3 9.9 8.1 14% -6%

KOTAK MAHINDRA BANK (Standalone)

NII 16,227 15,982 10,389 56% 2%

KMB's margins to stabilize at ~4.2%.

Expect GNPAs of 2.5% & slippages of ~2.0% annualized.

Growth in SA balances and CV book would be of interest.

Merger related one-offs running down should lead to lower opex.

BUY

Other Income 7,247 5,924 4,665 55% 22%

NIM 4.2% 5.1% 4.8% -59 bps -92 bps

PAT 5,669 1,898 4,445 28% 199%

EPS 3.1 1.0 2.9 8% 199%





KARUR VYSYA BANK (Standalone)

NII 4,261 4,231 3,374 26% 1%

Expect GNPAs at 1.9%, slippages at ~2.0%

NIMs to stay flat at ~3.4%

Estimate costs to grow at ~14% yoy

Factoring in 3% sequential growth in advances

BUY

Other Income 1,871 1,622 1,360 38% 15%

NIM 3.4% 3.4% 2.8% 64 bps -3 bps

PAT 1,502 1,346 905 66% 12%

EPS 14.0 12.6 8.4 66% 12%

PUNJAB NATIONAL BANK (Standalone)

NII 42,289 41,025 41,512 2% 3%

Expect NIMs to come in at ~2.9%

Forecast GNPAs at ~6.7%, and incremental slippages of ~Rs.34bn

Credit growth of 9% yoy estimated

SELL

Other Income 15,411 13,974 15,584 -1% 10%

NIM 2.9% 2.9% 3.2% -23 bps 4 bps

PAT 9,960 7,207 5,753 73% 38%

EPS 5.4 3.9 3.2 69% 38%

STATE BANK OF INDIA (Standalone)

NII 141,873 137,320 132,746 7% 3%

Expect slippages of ~2.4% with GNPAs at 4.4%

Estimate NIMs at 3.0%

Credit growth of 8% yoy expected

SELL

Other Income 60,515 50,880 45,710 32% 19%

NIM 3.0% 2.9% 3.1% -11 bps 4 bps

PAT 38,233 36,924 31,006 23% 4%

EPS 5.1 4.9 4.2 22% 4%

SOUTH INDIAN BANK (Standalone)

NII 3,640 3,403 3,584 2% 7%

Expect NIMs to come in at 2.6%

Estimate slippages of ~1.8%; GNPAs at 1.9%

Expect advances growth of ~10% yoy

BUY

Other Income 1,161 1,038 936 24% 12%

NIM 2.6% 2.5% 2.9% -24 bps 15 bps

PAT 950 653 763 24% 45%

EPS 0.7 0.5 0.6 24% 45%

YES BANK (Standalone)

NII 10,948 10,598 8,564 28% 3%

Expect customer assets growth of ~25% on yoy basis.

Estimate NIMs of 3.2%

Expect asset quality to remain stable on qoq basis.

BUY

Other Income 6,211 5,452 5,056 23% 14%

NIM 3.4% 3.4% 3.2% 15 bps -1 bps

PAT 6,013 5,512 4,825 25% 9%

EPS 14.4 13.2 11.6 24% 9%





DCB BANK (Standalone)

NII 1,416 1,404 1,177 20% 1%

Expect NIMs to fall marginally to ~3.7%

Estimate GNPAs at ~2.0%

Estimate credit growth of 26% yoy

BUY

Other Income 589 631 370 59% -7%

NIM 3.7% 3.7% 3.9% -19 bps -6 bps

PAT 468 469 411 14% 0%

EPS 1.7 1.7 1.6 1% 0%

JAMMU & KASHMIR BANK (Standalone)

NII 7,003 6,948 6,919 1% 1%

Expect NIM of ~4.0%

Estimate GNPAs at ~7.0%, incremental slippage of ~3.2% annualized

Estimate ~0% yoy credit growth

BUY

Other Income 1,387 1,356 846 64% 2%

NIM 4.0% 4.0% 4.0% 2 bps 4 bps

PAT 1,806 1,588 1,723 5% 14%

EPS 3.7 3.3 3.6 5% 14%





CIFC (Standalone)

NII 4,937 4,901 4,200 18% 1%

Expect 10% yoy growth in the AUM.

Margins to come in at ~7.5%.

Expect GNPAs at ~3.5%, with decline in provision coverage ratio.

BUY

Other Income 2 2 3 -21% 29%

NIM 7.5% 7.6% 6.9% 52 bps -15 bps

PAT 1,359 1,103 951 43% 23%

EPS 8.7 7.6 6.6 32% 14%

HDFC (Standalone)

NII 22,327 21,162 18,785 19% 6%Expect slower growth in retail assets.

Other income to increase significantly as dividend income from HDFC Bank will be

accounted for in Q2FY16.

Asset quality to remain intact. Commentary on developer loan portfolio would be of

interest to us.

SELL

Other Income 4,563 886 3,184 43% 415%

NIM 3.3% 3.2% 3.2% 9 bps 7 bps

PAT 16,799 13,610 13,576 24% 23%

EPS 10.7 8.6 8.6 24% 23%

LIC Housing Finance (Standalone)

NII 6,819 6,589 5,318 28% 3%

Expect loan growth to be at 17%; expect nominal increase in the developer loan

book on qoq basis

Expect LAP book to form ~5% of the total loan book.

Margins to remain flat on qoq basis, GNPAs to come in at 0.62%

SELL

Other Income 625 481 626 0% 30%

NIM 2.4% 2.4% 2.2% 20 bps 2 bps

PAT 3,917 3,821 3,414 15% 3%

EPS 7.8 7.6 6.8 15% 3%

Mahindra Finance (Standalone)

NII 7,554 7,164 7,369 3% 5%

Loan growth to remain muted at about 7% yoy.

Expect margins to deteriorate yoy but improve qoq.

Asset quality to deteriorate yoy; estimating GNPAs of 8.8%SELL

Other Income 109 76 152 NA 44%

NIM 8.0% 7.7% 8.4% -47 bps 26 bps

PAT 1,221 890 2,071 -41% 37%

EPS 2.2 1.6 3.7 -41% 37%

Power Finance Corporation (Standalone)

NII 28,004 27,920 24,920 12% 0%

14% yoy loan growth estimated.

Expect moderation in incremental sanction pipeline.

Factor in GNPAs at similar levels of previous quarter.

Expect margins to marginally decline on qoq basis.

BUY

Other Income 45 38 861 -95% 20%

NIM 4.9% 5.0% 5.1% -10 bps -8 bps

PAT 16,593 15,765 14,066 18% 5%

EPS 12.6 11.9 10.7 18% 5%





Rural Electrical Corporation (Standalone)

NII 23,902 23,346 20,317 18% 2%

Expect ~19% yoy loan growth

Expect asset quality to deteriorate marginally on a qoq basis.

Expect margins to decline on qoq basis

BUY

Other Income 967 687 801 21% 41%

NIM 5.0% 5.1% 5.0% -3 bps -8 bps

PAT 15,469 14,786 15,008 3% 5%

EPS 15.7 15.0 15.2 3% 5%

Shriram Transport Finance (Standalone)

NII 12,088 11,507 10,067 20% 5%

Margins to improve to 7.9%.

Factoring in credit costs to remain elevated in this quarter as well.

Loan growth to remain muted at about 12%.

SELL

Other Income 170 148 169 1% 15%

NIM 7.9% 7.7% 7.3% 55 bps 18 bps

PAT 3,264 3,211 3,022 8% 2%

EPS 14.4 14.2 13.3 8% 2%

Shriram City Union Finance (Standalone)

NII 5,935 5,731 5,100 16% 4%

Expect growth to remain tepid at around 13% yoy due to overall macro.

Margins to hold & asset quality to marginally deteriorate on a qoq basis.

SME and Two-wheeler to drive growth.

BUY

Other Income 50 42 207 -76% 20%

NIM 13.5% 13.4% 13.3% 18 bps 11 bps

PAT 1,533 1,477 1,378 11% 4%

EPS 23.3 22.4 20.9 11% 4%

REPCO Home Finance (Standalone)

NII 717 664 593 21% 8%

Loan growth to be ~27%.

Margins to improve slightly on qoq basis to 4.4%.

Delinquencies to normalize in this quarter compared to previous quarter.

BUY

Other Income 67 66 50 33% 1%

NIM 4.4% 4.3% 4.7% -29 bps 10 bps

PAT 367 302 327 12% 22%

EPS 5.9 4.8 5.3 12% 22%

SUNDARAM FINANCE (Standalone)

NII 2,732 2,663 2,710 1% 3%

Expect 4% yoy growth in the AUM.

Margins to remain broadly at around ~5.7% on a qoq basis.

Asset quality pain may reduce on a qoq basis.

BUYOther Income 296 159 488 -39% 86%

NIM 5.7% 5.6% 5.9% -20 bps 5 bps

PAT 1,101 990 1,303 -16% 11%

EPS 9.9 8.9 11.7 -16% 11%

2QFY16 Results Preview HEALTHCARESector




Biocon (Consolidated)

Revenue 8,308 8,330 7,576 10% 0%10% yoy growth in revenues on the back of muted 6% yoy growth in Biopharma

and 21% yoy growth in Research Services. The lower sales growth in Biopharma

due to pricing pressures in small molecules business and restructuring of branded

formulations business (10% yoy growth expected). EBITDA margin in Q1FY16

benefited from capacity reservation fee (one-off)

BUY

EBITDA 1,866 2,122 1,730 8% -12%

EBITDA Margin 22.5% 25.5% 22.8% -30bps -300bps

Adj PAT 845 1,262 1,021 -17% -33%

Adj EPS 4.2 6.3 5.1 -17% -33%

Divi's Laboratories (Standalone)

Revenue 9,344 8,088 8,331 12% 16%

Lower growth in revenues on yoy basis (despite INR depreciation) due to high

base as Q2FY15 included sales from valsartan supplies to RanbaxySELL

EBITDA 3,515 2,999 3,068 15% 17%

EBITDA Margin 37.6% 37.1% 36.8% 80bps 50bps

Adj PAT 2,597 2,220 2,253 15% 17%

Adj EPS 13.0 11.1 11.2 15% 17%

Granules India (Consolidated)

Revenue 3,636 3,459 3,076 18% 5%

Revenues expected to grow 18% yoy, driven by strong growth in API sales.

Biocause JV and Omnichem JV estimated to clock sales of Rs. 350mn and Rs.

100mn, respectively

ADD

EBITDA 617 618 523 18% 0%

EBITDA Margin 17.0% 17.9% 17.0% -5bps -90bps

Adj PAT 253 271 221 15% -7%

Adj EPS 1.2 1.3 1.1 14% -7%

Syngene International (Consolidated)

Revenue 2,434 2,337 NA NA 4%

Sequential growth in revenues aided by INR depreciation. EBITDA margin to

remain flat qoqBUY

EBITDA 777 749 NA NA 4%

EBITDA Margin 31.9% 32.0% NA NA -10bps

Adj PAT 538 520 NA NA 3%

Adj EPS 2.7 2.6 NA NA 3%

2QFY16 Results Preview INFRA & PORTSSector

Road Developers - All numbers in Rs. mn except per share data



Ashoka Buildcon (Standalone)

Net sales 3,506 4,751 3,586 -2% -26% Execution at construction segment is expected to be lower qoq & yoy due to

lower yoy road works order book resulting in lower standalone revenues, this is

likely to result in yoy loss at consolidated PAT for the quarter; but we expect a

yoy improvement in the BOT segment's profitability due to higher traffic growth in

key stretches

BUY

EBITDA 473 680 418 13% -30%

EBITDA Margin 14% 14% 12%

PAT after MI 221 465 252 -12% -52%

EPS 1.2 2.5 1.3 -12% -52%

IRB Infrastructure Developers (Consolidated)

Net sales 10,043 11,367 9,120 10% -12%Execution at construction segment is expected to be lower qoq due to

seasonality resulting in lower revenues; also we expect a yoy improvement in the

BOT segment's profitability due to better traffic growth and higher tariffs in key

stretches

ADD

EBITDA 6,026 6,564 5,846 3% -8%


PAT after MI 1,114 1,659 1,217 -8% -33%

EPS 3.2 4.7 3.5 -8% -33%

KNR Constructions (Standalone)

Net sales 1,719 1,712 1,704 1% 0%Execution at construction segment is expected to be flattish yoy due

to order book having been increased only in the last six months; hence we

expect a flattish quarter in terms of profitability; execution of the new road EPC

orders that were won in Apr-May 2015 from NHAI is a key monitorable

BUY

EBITDA 247 246 304 -19% 0%


PAT after MI 116 150 139 -17% -23%

EPS 4.1 5.3 5.0 -17% -23%

Sadbhav Engineering (Standalone)

Net sales 6,793 8,293 5,946 14% -18%Execution at construction segment is expected to be higher yoy due to more

number of ongoing projects resulting in higher revenues yoy; we expect a yoy

improvement in the BOT segment's profitability due to better traffic growth and

higher tariffs in key stretches

BUY

EBITDA 702 894 596 18% -21%


PAT after MI 243 395 101 140% -38%

EPS 1.4 2.3 0.6 140% -38%

2QFY16 Results Preview INFRA & PORTSSector

Ports - All numbers in Rs. mn except per share data



Adani Ports & SEZ (Standalone)

Net sales 10,586 10,651 11,103 -5% -1%

Standalone cargo volumes likely to continue growing (we estimate volumes of 30

MT in 2QFY16 vs. 29MT in 1QFY15). Consolidated numbers are expected to

witness growth due to increasing contribution from Dahej, Dhamra and Hazira.

BUY

EBITDA 7,305 7,723 7,641 -4% -5%


PAT 5,562 6,191 5,294 5% -10%

EPS 2.7 3.0 2.6 5% -10%

Gujarat Pipavav (Standalone)

Net sales 1,827 1,846 1,701 7% -1%

We expect a growth in yoy revenues primarily due ~5% tariff hike and a likely

good growth rate in bulk volumes (container volume growth continues to get

affected by cotton imports ban in China and loss of key shipping line);

ADD

EBITDA 1,041 986 959 9% 6%


PAT 928 804 895 4% 15%

EPS 1.9 1.7 1.9 4% 15%

2QFY16 Results Preview LOGISTICSSector




Gateway Distriparks

Net sales 2,523 2,642 2,927 -14% -4%

Sequential decline in revenue driven by drop in rail volumes.

Rail business impacted by change in business model at Sahnewal terminal,

which has had an impact on the margins as well.

BUY

EBITDA 667 704 857 -22% -5%

EBITDA Margin 26.5% 26.7% 29.3% -284 bps -20 bps

PAT 339 357 477 -29% -5%

EPS 3.1 3.3 4.4 -29% -5%

Concor

Net sales 15,822 14,209 13,548 17% 11%

Yoy increase in revenue driven by the EXIM segment aided particularly by both

an improvement in volumes and realisations. Yoy decline in margin driven by

increase in other expenses and partial pass through of haulage hikes.

SELL

EBITDA 3,402 2,879 3,127 9% 18%


PAT 2,682 2,069 1,919 40% 30%

EPS 13.8 10.6 9.8 40% 30%

2QFY16 Results Preview OIL & GASSector




ONGC (Standalone)

Production incl. JV (mmtoe) 12.3 12.3 12.1 2% 0%

Production to remain largely flat. Expect subsidy @ ~$3/bbl based on subsidy

sharing mechanism (only SKO in the qtr.). Expect crude realisation @ ~$48/bbl in

1Q'16 vs $59/bbl in 1Q'16 & $ 41/bbl in 2Q'15. Apart from low commodity prices,

higher DD&A and lower other income to lead to PAT decline by ~20% yoy and qoq

BUY

Sales 2,02,666 2,26,958 2,03,611 0% -11%

EBITDA 1,10,961 1,19,990 1,08,545 2% -8%

PAT 44,018 54,599 54,449 -19% -19%

EPS 5.1 6.4 6.4 -19% -19%

OIL India (Standalone)

Production incl. JV (mmtoe) 1.50 1.48 1.57 -5% 1%

Production to largely remain flat qoq. Expect subsidy @ ~$3/bbl based on subsidy

sharing mechanism (only SKO in the qtr.). Expect crude realisation @ ~$48/bbl in

1Q'16 vs $58/bbl in 1Q'16 & $ 43/bbl in 2Q'15.

BUY

Sales 25,463 28,826 21,925 16% -12%

EBITDA 10,261 12,738 8,310 23% -19%

PAT 6,357 7,754 6,083 4% -18%

EPS 10.6 12.9 10.1 4% -18%

IOCL (Standalone)

Throughput (mmt) 13.4 13.6 13.4 0% -1%

Expect GRM losses led by sizeable inventory losses, offsetting product crack

gains.Also marketing inventory losses and low HSD margins in 2Q'16

(~Rs. 1.9/ltr vs Rs. 2.3/ltr avg.) to lead to lower marketing profits. We do not expect

any subsidy sharing for OMCs this quarter

BUY

GRM ($/bbl) ($2.0) $10.8 ($2.0) 3% -119%

EBITDA (14,119) 98,027 (7,150) 97% -114%

PAT (15,154) 65,941 (11,599) 31% -123%

EPS (6.2) 27.2 (4.8) 31% -123%

BPCL (Standalone)

Throughput (mmt) 6.0 6.1 6.1 -1% -1%

Expect negligible GRMs led by sizeable inventory losses, offsetting product crack

gains.Also marketing inventory losses and low HSD margins in 2Q'16

(~Rs. 1.9/ltr vs Rs. 2.3/ltr avg.) to lead to low EBITDA profits. We do not expect

any subsidy sharing for OMCs this quarter

BUY

GRM ($/bbl) $1.5 $8.6 $1.5 2% -82%

EBITDA 6,276 37,686 10,709 -41% -83%

PAT 1,190 23,762 4,642 -74% -95%

EPS 1.6 32.9 6.4 -74% -95%

HPCL (Standalone)

Throughput (mmt) 4.3 3.8 4.5 -4% 15%

Expect negligible GRMs led by sizeable inventory losses, offsetting product crack

gains.Also marketing inventory losses and low HSD margins in 2Q'16 ( ~Rs. 1.9/ltr

vs Rs. 2.3/ltr avg.) to lead to negligible EBITDA profits. We do not expect any

subsidy sharing for OMCs this quarter

SELL

GRM ($/bbl) $0.8 $8.6 $2.1 -62% -91%

EBITDA 161 30,630 15,445 -99% -99%

PAT (3,062) 15,880 8,502 NA -119%

EPS (9.0) 46.9 25.1 NA -119%

2QFY16 Results Preview OIL & GASSector




GSPL (Standalone)

Volumes (mmscm) 2,350 2,201 2,227 6% 7%

Expect volumes @ ~26mmscmd (~7% higher yoy/qoq), driven by LNG

arrangement for power sector and higher industrial usage of LNG. Volume led

growth to lead to 8% qoq and >30% yoy (on adj yoy PAT)

BUY

Net Sales 2,786 2,591 3,519 -21% 7%

EBITDA 2,456 2,271 3,239 -24% 8%

PAT 1,223 1,128 1,695 -28% 8%

EPS 2.2 2.0 3.0 -28% 8%

IGL (Standalone)

Volumes (mmscm) 366 349 363 1% 5%

Expect volumes growth to remain largely muted yoy and 5% qoq. Expect lower

qoq EBITDA/scm (Rs. 5.3/scm in 2Q'16 vs Rs. 5.5/scm in 1Q'16) led by cost

spike on ruppee depreciation & continuing stress on industrial volumes

SELL

Net Sales 9,432 8,994 9,489 -1% 5%

EBITDA 1,926 1,938 2,147 -10% -1%

PAT 1,034 1,018 1,196 -14% 1%

EPS 7.4 7.3 8.5 -14% 1%

GGAS (Standalone)

Volumes (mmscm) 570 538 NA NA 6%

Expect volumes @ 6.2mmscmd, better than 1Q'16 volumes of 5.9mmscmd.

Expect EBITDA/scm to be stronger qoq at Rs. 4.2/scm vs 3.8/scm in 2Q'16 as

volume rebound at lower LNG prices would aid for EBITDA expansion.

BUY

Net Sales 17,240 16,709 NA NA 3%

EBITDA 2,467 2,002 NA NA 23%

PAT 843 520 NA NA 62%

EPS 6.1 3.8 NA NA 62%

PLNG (Standalone)

Volumes (TBTU) 138 132 150 -8% 5%

Expect utilisations to pick up in Dahej terminal to >100% levels in 2QFY16 (98%

in 1Q'16 & 118% in 2Q'15), driven by revival in industrial demand for spot LNG

and offtake from power sector.

BUY

Net Sales 90,964 83,772 1,09,800 -17% 9%

EBITDA 4,165 3,611 5,190 -20% 15%

PAT 2,261 1,751 2,628 -14% 29%

EPS 3.0 2.3 3.5 -14% 29%

2QFY16 Results Preview TECHNOLOGYSector




Cyient (Consolidated)

US$ Revenues 125 114 110 14% 10%

10% US$ revenue growth led by revenue traction in Rangsons.

Margins would improve 40 bps with rupee gains offset partially by change in product

mix Add

Revenues 8,193 7,263 6,724 22% 13%

EBITDA 1,064 918 1,081 -2% 16%

PAT 930 748 902 3% 24%

EPS 8.3 6.7 8.1 3% 24%

eClerx (Consolidated)

US$ Revenues 49 46 38 29% 6%

Organic revenue growth of 3% qoq & ~US$ 1.17 mn added from CLX acquistion

EBIT margins would improve ~ 200 bp qoqs led by rupee gains.

Gains from forex hedges (pre AS 30) would be around Rs.30 mnSell

Revenues 3,230 2,983 2,318 39% 8%

EBITDA 1,140 993 815 40% 15%

PAT 799 734 623 28% 9%

EPS 25.8 23.7 20.1 28% 9%

Firstsource (Consolidated)

Revenues 7,954 7,469 7,740 3% 6%Revenue growth improve 6.5% yoy with 2% US$ revenue growth & hedge gains

Margins would improve 50 bps led by rupee gains

Watchout for commentary on large deal wins, order backlog growth and update on

vendor consolidation in existing clients

BuyEBITDA 993 897 949 5% 11%

PAT 703 564 612 15% 25%

EPS 1.0 0.8 0.9 16% 25%

HCL Tech (Consolidated)

US$ Revenues 1,548 1,538 1,434 8% 1%0.7% US$ revenue growth with 80 bps currency headwinds and client specific issues

Margins would decline 50 bps with rupee gains offset by wage hikes and client

specific issues

Deal wins, non IMS traction and update on client specific issues would be key

commentary to watch for

Reduce

Revenues 101,301 97,770 87,350 16% 4%

EBITDA 21,201 21,000 21,920 -3% 1%

PAT 17,880 17,830 18,740 -5% 0%

EPS 12.7 12.6 13.3 -4% 0%

Hexaware (Consolidated)

US$ Revenues 127 121 110 15% 5%

5% CC revenue growth with 20 bps CC impact

Margins would improve 40 bps qoq led by currency

RIM wins, traction in TT & Healthcare would be key commentary to watch forReduce

Revenues 8,313 7,722 6,706 24% 8%

EBITDA 1,457 1,323 1,208 21% 10%

PAT 1,130 989 859 32% 14%

EPS 3.7 3.3 2.8 30% 14%





Info Edge (Standalone)

Net sales 1,732 1,718 1,476 17% 1%Revenues would grow 17% yoy with 20% growth in Recruitment vertical

Strong investments would continue in 99acres.com

Deferred revenues growth more than 20% yoy

Investments in 99acres.com,fund raise in zomato, Policy bazaar would be key


Buy

EBITDA 261 238 422 -38% 10%


PAT 286 287 332 -14% -1%

EPS 2.4 2.4 3.0 -20% -1%

Infosys (Consolidated)

US$ Revenues 2,336 2,256 2,201 6% 4%

4% qoq US$ revenue growth and CC headwinds of 50 bps

EBIT Margins to increase 60 bps led by currency gains

Deal wins & Demand outlook would be key commentary to watch out forAdd

Revenues 152,885 143,540 133,420 15% 7%

EBIT 37,674 34,470 34,830 8% 9%

PAT 32,457 30,300 30,960 5% 7%

EPS 14.2 13.3 13.5 5% 7%

Intellect Design Arena (Consolidated)

US$ Revenues 28.7 30.4 23.6 22% -6%US$ revenue growth would be 22% yoy

EBITDA margins would continue to be negative with increased investments

and R&D expenses

Watch out for: Growth strategy - New deal wins, order book growth Buy

Revenues 1,875 1,918 1,428 31% -2%

EBITDA -77 -109 -216 NM NM

PAT -98 -98 -111 NM NM

EPS -1.0 (1.0) -1.1 NM NM

KPIT Cummins (Consolidated)

US$ Revenues 122 118 115 5% 2.7%US$ revenue would grow 2.7% qoq led by growth in SAP & Auto

EBITDA margins would improve 50 bps led by currency

Key commentary to watch for - update on steps taken to improve profitability & outlook

on various BUsReduce

Revenues 7,954 7,583 6,897 15% 5%

EBITDA 796 721 827 -4% 10%

PAT 551 444 508 9% 24%

EPS 2.8 2.2 2.5 8% 24%

MCX (Standalone)

Net sales 612 562 548 12% 9%

Turnover improved 18% yoy led by 19% yoy turnover increase in non Agri

Margins would improve 5.4 pps yoy led by higher revenues/cost rationalisation efforts

Update on MCX-SX, SEBI amendment and CEO hiring would be key commentary to

watch for

Reduce

EBITDA 240 190 180 33% 26%


PAT 284 251 294 -3% 13%

EPS 5.6 4.9 5.8 -4% 13%





Mindtree (Consolidated)

US$ Revenues 177 155 147 20% 14%US$ Revenue growth of 14% qoq with inorganic revenues of ~US$ 13.5 mn from

acquisitions

Margins would be improve 40 bps with currency & efficiency gains offset by integration

costs and partial wage hikes

FY16E demand outlook would be key commentary to watch for

Sell

Revenues 11,439 9,775 8,848 29% 17%

EBITDA 1,998 1,675 1,739 15% 19%

PAT 1,605 1,322 1,368 17% 21%

EPS 19.1 15.7 16.3 17% 21%

Mphasis (Consolidated)

US$ Revenues 228 234 239 -5% -3%

Expect US$ revenue to decline with divestiture of US$ 3 mn

Margins improvement led by currency gains and divestiture of India BPO business

Visibility on HP and Digital Risk businessReduce

Revenues 14,902 14,964 14,649 2% 0%

EBITDA 2,197 2,139 2,146 2% 3%

PAT 1,860 1,563 1,602 16% 19%

EPS 8.9 7.4 7.6 16% 19%

NIIT Tech (Consolidated)

US$ Revenues 102.8 100.2 95.6 8% 2.6%US$ revenues to grow 2.6% qoq with incremental US$ 1.7 mn coming from Incessant

Technologies.

EBITDA margins to improve 80 bps led by currency gains

Improving demand environment in Insurance, traction of ROOM solutions and order

book growth would be key commentary to watch for

Reduce

Adj. Revenues 6,648 6,351 5,787 15% 5%

Adj. EBITDA 1,084 983 727 49% 10%

PAT 616 587 401 54% 5%

EPS 10.1 10 6.6 53% 5%

Persistent (Consolidated)

US$ Revenues 85 79 76 11% 8.2%

6% organic growth with US$ 1.8 mn from RGEN solutions

Margins would improve 80 bps qoq with rupee gains offsetting partial wage hikes

Forex gain of ¬Rs. 33 mn from hedges and debtor restatement

Update on deal wins and FY16E revenue guidance

Sell

Revenues 5,569 5,004 4,642 20% 11%

EBITDA 1,128 969 957 18% 16%

PAT 791 672 713 11% 18%

EPS 9.9 8.4 8.9 11% 18%

Redington India (Consolidated)

Net sales 83,986 75,696 77,578 8% 11% Revenues growth would be muted led by lower Apple sales & weak international

business.Domestic IT business could surprise positively

Margins would improve 10 bps yoy and flat qoq.

Growth in IT business in India, demand environment in S.W.Asia, reduction in interest

rate, Update on new Apple distributors, new contracts in PC business would be key


Reduce

EBITDA 1,800 1,556 1,587 13% 16%

EBITDA Margin 2.1% 2.1% 2.0%

PAT 1,001 811 859 17% 23%

EPS 2.5 2.0 2.2 17% 23%





TCS (Consolidated)

US$ Revenues 4,207 4,036 3,929 7% 4%Constant currency organic growth of 5% qoq .CC headwinds would be around ~ 80

bps qoq

EBITDA Margins to improve 70 bps led by rupee gains

Deal wins, FY16E demand outlook, lateral hiring and update on SMAC would be key

commentary to watch out for

CMC would be integrated from this quarter

Add

Revenues 275,407 256,681 238,165 16% 7%

EBITDA 79,412 72,019 68,087 17% 10%

PAT 62,234 57,090 52,883 18% 9%

EPS 31.6 29.1 27.0 17% 8%

Tech Mahindra (Consolidated)

US$ Adj Revenues 1,009 989 900 12% 2%

2.6% CC revenue growth with 60 bps CC impact

Margins would improve 100 bps led by rupee gains and efficiency gains

Watch out for large deal wins update, Telecom demand outlookAdd

Adj Revenues 66,031 62,938 54,879 20% 4.9%

Adj EBITDA 10,445 9,355 6,872 52% 12%

Adj PAT 7,116 6,762 7,196 -1% 5%

Adj EPS 8.0 7.6 8.3 -3% 5%

Wipro (Consolidated)

US$ Revenues IT

Services1,838 1,794 1,772 4% 2.5%

Constant currency at 3%, 50 bps CC impact

IT services EBIT margin would show marginal decline with wage hikes largely offset by

currency gains

We expect 3QFY15 US$ revenue guidance to be in the range of 2%-4% qoq

Add

Revenues 129,894 123,706 116,838 11% 5%

EBIT 25,412 24,022 21,739 17% 6%

PAT 22,851 21,877 20,848 10% 4%

EPS 9.3 8.9 8.5 10% 4%


Spark Disclaimer

Spark Capital Advisors (India) Private Limited (Spark Capital) and its affiliates are engaged in investment banking, investment advisory and institutional equities and

infrastructure advisory services. Spark Capital is registered with SEBI as a Stock Broker and Category 1 Merchant Banker.

We hereby declare that our activities were neither suspended nor we have defaulted with any stock exchange authority with whom we are registered in the last five years. We

have not been debarred from doing business by any Stock Exchange/SEBI or any other authorities, nor has our certificate of registration been cancelled by SEBI at any point of

time.

Spark Capital has a subsidiary Spark Investment Advisors (India) Private Limited which is engaged in the services of providing investment advisory services and is registered

with SEBI as Investment Advisor. Spark Capital has also an associate company Spark Infra Advisors (India) Private Limited which is engaged in providing infrastructure

advisory services.

This document does not constitute or form part of any offer or solicitation for the purchase or sale of any financial instrument or as an official confirmation of any transaction.

This document is provided for assistance only and is not intended to be and must not alone be taken as the basis for an investment decision. Nothing in this document should

be construed as investment or financial advice, and nothing in this document should be construed as an advice to buy or sell or solicitation to buy or sell the securities of

companies referred to in this document.

Each recipient of this document should make such investigations as it deems necessary to arrive at an independent evaluation of an investment in the securities of companies

referred to in this document (including the merits and risks involved), and should consult its own advisors to determine the merits and risks of such an investment. This

document is being supplied to you solely for your information and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or published,

copied, in whole or in part, for any purpose. This report is not directed 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, regulation or which would subject Spark Capital

and/or its affiliates to any registration or licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in all jurisdictions or to

a certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such applicable restrictions. This

material should not be construed as an offer to sell or the solicitation of an offer to buy any security in any jurisdiction where such an offer or solicitation would be illegal.

Spark Capital makes no representation or warranty, express or implied, as to the accuracy, completeness or fairness of the information and opinions contained in this

document. Spark Capital , its affiliates, and the employees of Spark Capital and its affiliates may, from time to time, effect or have effected an own account transaction in, or

deal as principal or agent in or for the securities mentioned in this document. They may perform or seek to perform investment banking or other services for, or solicit

investment banking or other business from, any company referred to in this report.

This report has been prepared on the basis of information, which is already available in publicly accessible media or developed through an independent analysis by Spark

Capital. While we would endeavour to update the information herein on a reasonable basis, Spark Capital and its affiliates are under no obligation to update the information.

Also, there may be regulatory, compliance or other reasons that prevent Spark Capital and its affiliates from doing so. Neither Spark Capital nor its affiliates or their respective

directors, employees, agents or representatives shall be responsible or liable in any manner, directly or indirectly, for views or opinions expressed in this report or the contents

or any errors or discrepancies herein or for any decisions or actions taken in reliance on the report or the inability to use or access our service in this report or for any loss or

damages whether direct or indirect, incidental, special or consequential including without limitation loss of revenue or profits that may arise from or in connection with the use of

or reliance on this report.

Absolute

Rating

Interpretation

BUY Stock expected to provide positive returns of >15% over a 1-year horizon REDUCEStock expected to provide returns of <5% – -10% over a 1-year

horizon

ADDStock expected to provide positive returns of >5% – <15% over a 1-year

horizonSELL Stock expected to fall >10% over a 1-year horizon


Spark Capital and/or its affiliates and/or employees may have interests/positions, financial or otherwise in the securities mentioned in this report. To enhance transparency,

Spark Capital has incorporated a disclosure of interest statement in this document. This should however not be treated as endorsement of views expressed in this report:

Disclosure of interest statement AL TPW, YESCIFC, IDFC, ICEM,

INFO, ITC, NHPC, PTCOthers

Analyst financial interest in the company No Yes No No

Group/directors ownership of the subject company covered No No Yes No

Investment banking relationship with the company covered Yes No No No

Spark Capital’s ownership/any other financial interest in the company covered No No No No

Associates of Spark Capital’s ownership more than 1% in the company covered No No No No

Any other material conflict of interest at the time of publishing the research report No No No No

Receipt of compensation by Spark Capital or its Associate Companies from the subject company covered for in

the last twelve months:

Managing/co-managing public offering of securities

Investment banking/merchant banking/brokerage services

products or services other than those above

in connection with research report

No No No No

Whether Research Analyst has served as an officer, director or employee of the subject company covered No No No No

Whether the Research Analyst or Research Entity has been engaged in market making activity of the Subject

Company;No No No No

Analyst Certification of Independence

The views expressed in this research report accurately reflect the analyst’s personal views about any and all of the subject securities or issuers; and no part of the research

analyst’s compensations was, is or will be, directly or indirectly, related to the specific recommendation or views expressed in the report.

Additional Disclaimer for US Institutional Investors

This research report prepared by Spark Capital Advisors (India) Private Limited is distributed in the United States to US Institutional Investors (as defined in Rule 15a-6 under

the Securities Exchange Act of 1934, as amended) only by Auerbach Grayson, LLC, a broker-dealer registered in the US (registered under Section 15 of Securities Exchange

Act of 1934, as amended). Auerbach Grayson accepts responsibility on the research reports and US Institutional Investors wishing to effect transaction in the securities

discussed in the research material may do so through Auerbach Grayson. All responsibility for the distribution of this report by Auerbach Grayson, LLC in the US shall be borne

by Auerbach Grayson, LLC. All resulting transactions by a US person or entity should be effected through a registered broker-dealer in the US. This report is not directed at you

if Spark Capital Advisors (India) Private Limited or Auerbach Grayson, LLC is prohibited or restricted by any legislation or regulation in any jurisdiction from making it available

to you. You should satisfy yourself before reading it that Auerbach Grayson, LLC and Spark Capital Advisors (India) Private Limited are permitted to provide research material

concerning investment to you under relevant legislation and regulations;

spark capital previewmailers.sparkcapital.in/uploads/daily/spark 2qfy16 preview - final.pdfqtr was...

Documents