NiveshDaily February 26, 2016 Daljeet S. Kohli From Research Desk Head of Research  Sector Updates Tel: +91 22 66188826 daljeet.kohli@indianivesh.in RBI revised norms for Strategic Debt Restructuring (SDR) and Joint Lenders’ Forum (JLR)  Railway Budget FY17  IndiaNivesh Universe ‐ Valuation Sheet IndiaNivesh Securities Limited|Research Analyst SEBI Registration No. INH000000511 IndiaNivesh Research 601 & 602, Sukh Sagar, N. S. Patkar Marg, Girgaum Chowpatty, Mumbai 400 007. Tel: (022) 66188800
IndiaNivesh Research is also available on Bloomberg INNS, Thomson First Call, Reuters and Factiva INDNIV.
Daljeet S. Kohli Head of Research Tel: +91 22 66188826 daljeet.kohli@indianivesh.in Kaushal Patel Research Associate Tel: +91 22 66188834 kaushal.patel@indianivesh.in Yogesh Hotwani Research Analyst Tel: +91 22 66188839 yogesh.hotwani@indianivesh.in Sector Update RBI revised norms for Strategic Debt Restructuring (SDR) and Joint Lenders’ Forum (JLR) The Reserve Bank of India (RBI) issued various guidelines aimed at revitalising the stressed assets in the economy. However, considering the low provisioning levels and the difficulties involved in reviving such assets, the RBI revised norms for Strategic Debt Restructuring (SDR) and Joint Lenders’ Forum (JLR). Strategic Debt Restructuring (SDR) Scheme  The asset classification benefit will be available to the lenders provided they divest a minimum of 26% of the shares of the company (as compared to minimum of 51% as per the previous guidelines) to the new promoters within the stipulated time line of 18 months and the new promoters take over management control of the company. Lenders would thus have the option to exit their remaining holdings gradually, with upside as the company turns around. This may come as a big relief for the banks as the banks have been struggling in finding a buyer who is ready to buy 51% stake in the company in one go.  The 90 days deadline for completion of individual activities upto conversion of debts will be extended up to 210 days under new norms. However, if the targeted conversion of debt into equity shares does not take place within 210 days from the review of achievement of milestones/critical conditions, the benefit of SDR will cease to exist.  As a prudent measure, the banks will have to periodically value and provide for depreciation of these equity shares as per IRAC norms for investment portfolio. However, the banks will have the option of distributing the depreciation on equity shares acquired under SDR over four quarters from the date of conversion of debt into equity. These shares were exempted from the requirement of periodic mark‐to‐market (MTM) for the 18‐month period under the earlier guidelines.  The Banks going in for SDR scheme will have to make sufficient provisions to the tune of 15% of the loans value (up from 5% standard provisioning now) to tide over possible loss in the value of the equity they acquire in lieu of debt and residual loans. SDR framework will be made available to asset restructuring companies (ARCs) that are part of such JLFs and revised guidelines will be applicable prospectively but the RBI also added that it would be prudent for banks to follow the new rules in cases where they have already decided to undertake SDR. Joint Lenders’ Forum Empowered Group (JLF – EG)  As per the revised rules, only 50% (as against 60% as per the previous guidelines) of lenders by number in the JLF need to agree to a corrective action plan (CAP) devised by the forum for a stressed asset.  The RBI also modified the composition of JLF‐EG as under. 




SBI and ICICI Bank will continue to be permanent members of JLF EG, irrespective of whether or not they are lenders in the particular JLF. If SBI and ICICI Bank are the lenders in a JLF then the three lenders (other than ICICI Bank and SBI) having largest exposures to the borrower and the two largest banks in terms of advances which do not have any exposure to the borrower. If either of SBI or ICICI bank is a lender then the four lenders (other than ICICI Bank and SBI) having largest exposures to the borrower and the next largest bank in terms of advances which does not have any exposure to the borrower. If neither SBI nor ICICI Bank are the lenders in a JLF then the JLF‐EG would consist of these two banks and the five lenders having largest exposures to the borrower. All the JLF‐EG members would have equal voting rights irrespective of size of exposure to the borrower.  In the earlier JLF framework it was stated that dissenting banks which did not want to participate in the restructuring or rectification in a particular case could find a new buyer for the loan and exit. According to the revised norms, if the dissenting lender is not able to find a new buyer, it would have to agree to the CAP and provide additional financing if it is part of the plan. Our Take: In June 2015, the RBI introduced SDR rules which allowed banks to convert loans into equity and given a timeline of 18 months to find a new buyer for the company. However, banks started to use SDR route to postpone the asset quality problem as they did not have to make any extra provisions under SDR. (We also mentioned it in our report ‘NiveshDaily’ dated December 08, 2015). Now, the time is running and banks have been struggling to find new buyers to revive such assets and avoid NPA tag for the equity stake they hold. So, at one hand the RBI tried to ease the norm so that the banks can find new buyers within stipulated timeline and at the other hand it also tightened the provisioning rule to avoid any sudden shock in the event of SDR failure. However, we believe that banks are unlikely to find the buyers for targeted SDR cases even under the revised norms considering the structural issues in the economy and will consider very low probability of revival of these assets. Overall, it will be positive for the banking industry as banks will be restricted to use SDR route for selective cases. We have already factored in higher provisioning expenses over FY16‐FY17E for stocks under our INSL banking coverage. Daljeet S. Kohli Head of Research Tel: +91 22 66188826 daljeet.kohli@indianivesh.in Railway Budget FY17: Railway Minister presented the Railway Budget FY17 in the Parliament. The Budget focused on capacity creation in the rail sector, with an increased outlay of about Rs 1.2 tn (+20% y‐o‐
y) and on completion of the ongoing projects rather than announcing new ones. The budget desisted from raising fares and freight rates but promised to cut cost and exploit new sources of revenue beyond tariff. Railways will try to use all its assets optimally, bring in more freight routes and also work aggressively on awarding the contracts for earlier ones. However, it announced introduction of three new superfast trains and creation of dedicated north‐south, east‐west and east coast freight corridors by 2019. Financial Performance Revenue Component
FY15A
FY16B
FY16R (%) Y‐o‐Y
Particulars (Rs mn)
Receipts
Passenger Earnings
Other Coaching Earnings
Goods Earnings
Sundry Other Earnings
Total Earnings
Suspense
4,21,896
5,01,750
4,51,260
7.0
5,10,120
13.0
39,979
46,120
43,250
8.2
61,848
43.0
10,57,913
12,14,230
11,18,530
5.7
11,79,328
50,927
73,180
55,800
9.6
95,903
71.9
15,70,716 18,35,280 16,68,840
10.7
6.2
18,47,198
500
na
1,000
15,67,105 18,35,780 16,69,340
6.5
18,48,198
‐3,610
Gross Traffic Receipts
FY17B (%) Y‐o‐Y
500
5.4
na
10.7
Source: Indian Railways, IndiaNivesh Research
Railways’ earning from passenger traffic is estimated to rise by nearly 13.0% to Rs 510 bn in FY17 as it expects more number of passengers to travel longer distance. Expenditure Component
FY15A
FY16B
FY16R (%) Y‐o‐Y
Particulars (Rs mn)
Expenditure
Ordinary working expense
Pension fund
Depriciation Reserve Fund
Total Working Expenditure
FY17B (%) Y‐o‐Y
10,59,960
11,94,100
11,06,900
4.4
12,35,600
2,92,250
3,49,000
3,45,000
18.0
4,25,000
23.2
77,750
79,000
55,000
‐29.3
32,000
‐41.8
16,92,600
12.3
14,29,960 16,22,100 15,06,900
5.4
11.6
Source: Indian Railways, IndiaNivesh Research
Railways’ working expenditure is estimated to rise by nearly 12.3% to Rs 1,693 bn in FY17 as it expects higher pension liability. Particulars (%)
Operatig Ratio
FY15A
91.3
Key Performance Indicator
FY16B
FY16R
(bps) Y‐o‐Y
88.5
90.5
‐80
Source: Indian Railways, IndiaNivesh Research
FY17B
91.6
(bps) Y‐o‐Y
110
Indian Railways is expected to achieve operating ratio of 90.5% in FY16. The target ratio for FY17 is 91.6% which is likely to be attained by restricting ordinary working expenses growth by 11.6%. This includes the impact of seventh Pay Commission and reductions planned in diesel and electricity consumption. Impact analysis of key announcements Infrastructure: The budget proposed to take up North‐South, East‐West & East Coast freight corridors through innovative financing including PPP. This is likely to improve the number of days required to transport goods, which would bring efficiency in supply chain.  Finalised bids for two loco factories and proposed to increase the current procurement of train sets by 30%. Such focus on “Make In India” is likely to be positive for BEML, Alstom India, Titagarh Wagons, Texmaco Rail.  EPC projects standard document have been finalized. It proposed to implement at least 20 projects through this mode in FY17 and endeavour to award all works valuing above Rs 3 bn through EPC contracts by FY18. This could be positive for players like Larsen and Toubro Ltd, KEC International Ltd, Kalpataru Power, Simplex Infrastructures Ltd, Stone India, Kalindee Rail Nirman.  The budget proposed to increase the outlay for railway electrification by almost 50% and propose to electrify 2,000 kms. This is likely to be positive for ABB, Siemens and Crompton Greaves, KEC International Ltd, Kalpataru Power. Passenger Services: The budget focused on improving the quality of travel.  It proposed to provide children’s menu items on trains which would include baby foods, hot milk and hot water would be made available. This could be positive for baby foods provider like Nestle.  It proposed to set up 17,000 bio‐toilets in trains. This is not likely to have any impact on listed sanitaryware companies like HSIL or Cera Sanitaryware as the volume is too low and it is unclear if these orders would be going to such large players.  It proposed to invite FM Radio stations for providing train borne entertainment; extend ‘Rail Bandhu’ to all reserved classes of travellers and in all regional languages. This could be positive for FM radio companies like Entertainment Network of India. Security: In partnership with Google Inc. Indian Railway is looking to introduce Wi‐Fi services at 100 stations in CY17 and 400 more stations in the next 2 years. This could be positive for Smartlink Networks System Ltd, TVS Electronics and HCL Infosystem. Digitalization: Implementation of inventory Track Management System (TMS) on Northern Railway resulted in inventory reduction by 27,000 MT (Saving Rs 640 mn) and scrap identification of 22,000 MT (Saving Rs 530 mn). In FY17, Indian Railways is looking to digitalize and automate the entire railway though TMS implementation.  Deployed application to digitize land data and records of all land holdings of Railways. This could be positive for Retail, Real‐estate and Construction companies.  Also developed two mobile apps ‐ (1) to deal with all ticketing issues, and (2) to address service related complaints & suggestions.  Enhanced capacity of e‐ticketing system from 2000 tickets/min to 7,200/min. Also introduced 1,780 ticket‐vending machines. This could be positive for TCS & TVS Electronics. E‐Marketing of Food & Village Industry Products: In association with self‐help group, IRCTC has begun the process of empanelling groups for providing catering & cooking services. IRCTC also partnered with Khadi & Village Industries Commission to create employment and self‐reliance in rural India which will lead to 17 lakh man days of job creation. In order to market these products and services IRCTC partnered with NABARD to support and access to IRCTC website to ensure extensive e‐marketing for products & services produced by these groups. This could be positive for TCS. E‐Tourist Visa Scheme to 37 New Countries: E‐Tourist Visa (e‐TV) facility will be extended to 37 new countries. Post this the total count under this scheme will reach to 150 countries. This could be positive for International Travel House, Thomas cook and Cox & Kings. Our Take: FY17 railway budget focused a lot on IT, digitalization and automation. In our view, these initiatives will lead to cost saving and higher utilization of resources over medium‐to‐long‐
term. The positive in this budget was major IT projects and extension of existing programs at broader level. This also illustrates that outlay of the fund for IT led transformation is planned on the basis of future prospects and current benefit. Overall, the railway budget emphasized the need to improve operational efficiency, customer satisfaction and laid out the long term vision for structural reforms of the Railways. However, execution and timely implementation will remain key points along with viability of funding structures. 26 February, 2016
IndiaNivesh Universe | Valuation Table (contd...)
IndiaNivesh Universe | Valuation Table
Rs.
CMP
Rs.
TP
Reco
%
(-) Dow n/(+) Up
Auto
Atul Auto
Bajaj Auto
Exide Industries
Force Motors
Lumax Auto
Hero MotoCorp
Mahindra & Mahindra
Maruti Suzuki India
Tata Motors Company
TVS Motor Company
SKF India $$$
Sw araj Engines
446
2,322
126
2,283
286
2,621
1,229
3,414
298
268
1,156
816
552
2,820
165
3,780
448
2,594
1,280
4,304
496
235
1,063
946
HOLD
BUY
BUY
BUY
BUY
HOLD
HOLD
HOLD
BUY
SELL
HOLD
BUY
24
21.4
30.5
65.6
56.5
-1.0
4.1
26.1
66.3
-12.2
-8.1
15.9
1,168
211,062
95,350
23,641
8,372
273,033
638,626
492,950
2,627,963
103,117
25,471
5,397
5,348
233,897
68,150
29,833
8,926
280,984
770,356
446,109
2,607,095
118,531
28,527
5,501
6,027
263,651
74,903
34,598
11,308
299,623
873,794
487,937
2,776,420
136,698
28,527
6,868
579
41,388
11,650
1,475
667
35,424
88,932
68,911
392,364
6,030
2,699
747
Inform ation Technology
Infosys
Tata Consultancy Services
Wipro
HCL Technologies###
Tech Mahindra
NIIT Technologies
KPIT Cummins
Majesco Ltd
SQS India BFSI
Onmobile Global
1,110
2,213
534
809
416
445
127
459
767
107
1,246
2,297
658
977
595
597
146
549
1,068
140
BUY
HOLD
BUY
HOLD
BUY
HOLD
HOLD
BUY
HOLD
BUY
12.2
3.8
23.3
20.8
42.9
34.2
15.1
19.6
39.2
31 3
31.3
533,190
946,484
469,545
367,012
226,213
23,725
29,899
4,993
2,142
8 471
8,471
625,060
1,086,398
514,882
419,031
263,563
27,349
30,462
7,519
2,709
9 555
9,555
733,373
1,255,655
591,450
476,177
293,510
31,178
34,287
10,504
5,372
10 893
10,893
Oil & Gas
Gail India
Oil India
Oil & Natural Gas Corporation
Reliance Industries
305
318
216
944
449
473
263
1,300
HOLD
BUY
BUY
BUY
47.2
48.8
21.6
37.7
567,420
97,482
823,428
3,754,350
531,691
95,375
821,011
2,589,142
FMCG
Bajaj Corp
Godrej Consumer Products
Products**
Marico**
Dabur**
Tata Global Beverages**
376
1,178
241
239
106
459
UR
215
256
180
HOLD
NOT RATED
HOLD
HOLD
BUY
22.1
NA
-10.8
7.3
69.5
8,256
82,764
57,330
78,065
79,934
10,132
90,764
61,864
84,421
82,882
Com pany Nam e
Sales (Rs. Mn)
FY15
FY16E
(CMP as of previous day)
FY17E
FY15
PAT (Rs. Mn)
FY16E
FY17E
FY15
EPS (Rs.)
FY16E
FY17E
749
47,818
10,214
2,476
741
42,957
93,629
52,661
353,610
8,475
3,551
802
859
53,315
11,359
3,079
1,108
46,661
116,544
53,414
389,656
10,547
NA
1,042
389
30,256
6,146
1,015
450
23,647
31,375
38,074
139,863
3,283
1,667
518
488
36,950
6,031
1,640
364
30,323
36,443
28,444
114,733
4,822
2,804
561
569
40,804
6,732
2,076
611
32,382
47,654
30,374
126,284
6,199
NA
735
18.5
104.6
7.2
77.1
33.0
118.4
50.7
126.0
43.0
6.9
44.0
41.7
22.2
128.0
7.1
124.4
26.7
151.8
61.7
94.2
33.8
10.2
53.1
45.2
25.9
141.0
8.0
157.5
44.8
162.2
79.5
100.6
37.2
13.0
NA
59.1
20.1
18.1
17.7
18.3
10.7
17.3
19.9
36.2
8.8
26.2
21.8
18.1
17.2
16.5
15.8
14.5
6.4
16.2
15.5
33.9
8.0
20.6
NA
13.8
149,010
239,920
104,609
84,736
42,082
3,428
3,254
-102
416
1 344
1,344
174,958
287,254
110,032
93,632
48,959
4,649
3,902
-39
553
1 784
1,784
217,210
340,726
138,411
110,840
56,985
5,300
4,389
243
576
576
123,290
198,522
86,528
73,171
26,277
1,141
2,370
-250
216
-323
323
139,160
223,839
86,069
76,466
28,055
2,706
2,570
-141
361
-128
128
164,235
257,103
104,782
89,578
34,383
3,113
2,919
58
783
1 144
1,144
53.9
101.4
35.1
51.8
26.7
18.6
11.9
-11.1
20.6
-2.9
29
60.8
114.4
34.9
54.1
28.5
45.1
12.9
-6.2
35.3
-1.2
12
71.8
131.4
42.5
63.3
35.0
51.9
14.6
2.5
76.6
11 0
11.0
18.3
19.3
15.3
14.9
14.6
9.9
9.8
NM
21.7
(88 9)
(88.9)
15.5
16.8
12.6
12.8
11.9
8.6
8.7
183.7
10.0
97
9.7
591,974
103,000
867,384
2,848,314
46,962
35,304
326,499
373,640
41,829
34,963
300,190
437,727
61,050
42,000
345,002
553,418
29,763
25,102
177,330
209,531
22,716
23,789
163,088
245,848
36,703
29,000
195,823
305,687
24.0
41.8
20.7
64.9
17.9
39.6
19.1
76.1
28.9
48.2
22.9
94.7
17.0
8.0
11.3
12.4
10.5
6.6
9.4
10.0
11,936
103,503
69,361
95,386
88,980
2,392
13,710
8,859
13,343
7,759
2,691
16,373
11,692
15,153
7,535
3,173
19,014
13,664
17,432
8,458
1,727
9,071
5,735
10,658
2,478
2,009
11,406
7,852
12,491
3,747
2,703
13,478
9,184
14,466
4,374
11.7
26.6
4.4
6.0
3.9
14.0
33.5
6.1
7.1
6.1
18.7
39.5
7.1
8.3
7.1
26.9
35.2
39.5
33.5
17.3
20.1
29.8
34.0
28.9
14.9
FY17E
EBITDA (Rs.Mn)
FY15
FY16E
P/E (x)
FY16E
FY17E
IndiaNivesh Universe | Valuation Table (contd...)
Com pany Nam e
Pharm a
Ajanta
j
Pharma
Aurobindo Pharma
Alembic Pharma
Biocon
Cadila
Cipla
Divis Lab
Dr Reddy
Glenmark
Indoco
Jubilant Life Science
Lupin
Sun Pharma
Ipca Lab
Torrent Pharma
JB Chemical
Shilpa Medicare
Others
BASF India Ltd.** &&
UPL
Coromandel International Ltd.
Meghmani Organics Ltd
Camlin Fine Science Ltd
Kajaria Ceramics
Somany Ceramics
Aditya Birla Nuvo Ltd.**
Radico Khaitan Ltd.**
Kaveri Seed Ltd**
HSIL Ltd
Liberty Shoes Ltd
Pennar Industries Ltd
KPR Mills Ltd
Nitin Spinners
Com pany Nam e
Telecom
Bharti Airtel
Idea Cellular
Real Estate
Oberoi Realty
Nesco
Ashiana Housing Ltd
Rs.
CMP
Rs.
TP
Reco
%
(-) Dow n/(+) Up
1,300
589
614
457
326
519
941
2,994
737
255
293
1,760
875
587
1,265
248
400
1,317
880
671
458
354
637
1,276
2,978
995
392
494
1,926
880
629
1,632
341
517
HOLD
BUY
HOLD
HOLD
HOLD
BUY
BUY
HOLD
BUY
BUY
BUY
HOLD
HOLD
HOLD
BUY
BUY
HOLD
1.3
49.4
9.3
0.2
8.7
22.7
35.6
-0.5
35.0
53.7
68.6
9.4
0.5
7.2
29.0
37.7
29.2
14,806
121,205
20,561
30,898
84,971
113,454
31,149
148,715
66,298
8,570
58,262
127,700
274,334
31,418
45,853
11,442
5,839
18,290
154,014
34,415
35,830
105,636
134,867
38,011
166,636
82,766
9,832
68,566
130,350
246,491
31,960
68,933
12,828
6,997
777
382
170
20
77
877
327
697
97
340
228
136
42
644
53
NA
480
222
34
177
952
430
1,257
165
504
396
128
87
1,059
112
HOLD
HOLD
BUY
BUY
BUY
HOLD
BUY
BUY
BUY
BUY
BUY
HOLD
BUY
BUY
BUY
NA
25.6
30.4
72.6
128.5
86
8.6
31.3
80.3
70.5
48.4
73.9
-6.1
108.6
64.5
112.5
42,347
120,905
80,792
12,942
5,583
21 869
21,869
15,431
265,160
14,122
11,612
19,806
5,257
12,634
25,658
6,165
53,721
134,595
113,159
14,126
5,047
24 997
24,997
17,567
283,138
15,611
8,582
21,497
4,951
15,480
24,764
7,710
Rs.
CMP
Rs.
TP
Reco
%
((-)) Dow n/(+) Up
323
106
287
127
SELL
SELL
-11.0
19.5
920,394
315,269
968,060
361,487
1,051,933
408,480
312,210
107,668
217
1,460
120
342
1,896
220
BUY
BUY
BUY
57.7
29.9
83.9
9,227
1,413
1,413
14,979
2,253
3,549
24,465
2,742
5,517
4,205
1,039
1,039
Sales (Rs. Mn)
FY15
FY16E
Sales (Rs. Mn)
FY15
FY16E
FY17E
24,620
177,085
38,699
41,490
122,320
160,888
43,359
180,117
105,941
12,698
76,736
164,244
299,095
42,486
74,870
14,957
9,897
61,673
153,439
125,939
15,403
6,914
30 257
30,257
20,770
324,626
17,015
10,492
23,642
5,575
19,376
27,011
8,295
FY17E
EBITDA (Rs.Mn)
FY15
FY16E
FY17E
FY15
PAT (Rs. Mn)
FY16E
FY17E
FY15
EPS (Rs.)
FY16E
FY17E
5,539
28,511
6,542
4,951
20,950
24,833
12,751
25,840
15,692
1,738
6,142
33,130
84,708
5,293
14,447
1,927
1,313
35.2
27.0
15.0
24.9
11.2
14.7
32.1
136.6
17.5
9.0
-3.6
53.2
18.9
20.2
44.4
11.8
9.6
43.5
39.2
34.9
21.8
15.5
24.1
40.0
153.8
42.7
10.8
28.7
51.2
19.6
13.2
49.1
19.8
11.7
62.7
49.0
34.7
25.0
17.7
30.9
48.5
151.7
58.2
18.9
38.6
73.9
35.2
30.3
85.4
22.8
17.0
-15.5
26.7
15.4
16.4
16.4
22 7
22.7
11.9
108.6
3.7
43.7
12.9
7.9
2.0
45.7
8.9
22.9
36.2
10.7
3.2
4.2
30 0
30.0
14.3
127.1
6.4
25.8
13.3
7.0
5.0
57.0
10.3
5,053
26,058
3,976
7,158
17,737
21,631
11,658
25,465
11,939
1,655
7,454
37,650
80,016
5,339
10,309
2,938
1,267
5,908
32,634
9,807
7,499
23,972
28,036
16,400
43,187
14,931
1,779
12,250
32,545
76,081
4,635
23,674
2,154
1,449
7,977
40,133
8,147
9,479
27,102
32,542
16,766
49,617
20,754
2,760
14,468
47,228
118,172
8,269
18,870
2,741
2,091
3,099
15,758
2,829
4,974
11,506
11,808
8,515
23,364
4,753
828
-578
24,032
45,394
2,542
7,509
1,004
737
3,841
22,794
6,581
4,303
16,764
19,315
11,962
26,193
11,527
991
4,567
22,936
47,121
2,729
13,481
1,675
901
3,642
23,853
10,380
1,922
882
3 555
3,555
1,093
54,043
1,935
3,128
3,300
394
1,178
4,577
1,004
228
26,670
7,582
2,890
929
4 543
4,543
1,107
63,367
2,043
1,914
3,037
431
1,461
3,987
1,414
2,515
31,785
9,068
2,813
1,404
5 615
5,615
1,454
74,729
2,332
2,808
3,448
496
1,839
4,531
1,574
1,279
11,440
4,018
439
550
1 756
1,756
464
14,155
712
3,010
854
132
359
1,736
410
993
15,620
3,026
820
399
2 385
2,385
606
15,954
856
1,777
965
191
599
2,147
474
FY17E
FY15
PAT (Rs. Mn)
FY16E
FY17E
FY15
EPS (Rs.)
FY16E
FY17E
336,465
130,135
366,328
138,883
51,835
31,929
53,810
33,257
60,359
25,734
13.0
9.0
11.7
9.1
15.1
7.0
7,696
1,766
996
12,649
1,975
1,794
3,171
816
816
3,966
1,221
796
4,787
1,511
1,175
9.7
58.0
58.0
12.1
86.6
6.2
14.6
107.3
11.4
EBITDA (Rs.Mn)
FY15
FY16E
2,110
18,117
4,206
811
758
3 025
3,025
780
18,982
1,113
2,723
1,120
250
839
2,757
496
48.7
41.9
14.8
3.2
7.9
38 1
38.1
18.4
153.2
8.3
39.5
15.5
8.6
7.0
73.2
10.8
P/E (x)
FY16E
FY17E
29.9
15.0
17.6
21.0
21.0
21.5
23.5
19.5
17.3
23.6
10.2
34.4
44.7
44.6
12.3
12.5
34.2
20.7
12.0
17.7
18.3
18.4
16.8
19.4
19.7
12.7
13.5
7.6
23.8
24.9
19.3
14.8
10.9
23.5
33.9
10.6
15.9
6.2
18.4
29 2
29.2
22.9
5.5
15.2
13.1
17.1
19.5
8.4
11.3
5.1
16.0
9.1
11.5
6.2
9.8
23 0
23.0
17.8
4.6
11.6
8.6
14.7
15.8
6.0
8.8
4.9
EV/EBITDA (x)
FY16E
FY17E
5.6
6.0
9.6
9.4
10.3
5.1
5.4
5.9
7.9
5.7
IndiaNivesh Universe | Valuation Table (contd...)
Rs.
CMP
Rs.
TP
Reco
%
(-) Dow n/(+) Up
299
119
132
43
57
467
162
187
60
104
BUY
BUY
BUY
BUY
BUY
56.0
36.7
41.9
38.1
82.3
Rs.
CMP
Rs.
TP
Reco
%
(-) Dow n/(+) Up
44
130
161
31
72
152
378
70
45
943
183
397
89
52
130
156
NA
61
185
466
85
46
1,264
280
494
113
HOLD
HOLD
HOLD
NOT RATED
HOLD
BUY
BUY
HOLD
BUY
BUY
BUY
HOLD
BUY
18.3
-0.1
-2.8
NA
-15.0
21.9
23.2
22.1
2.4
34.1
53.0
24.5
26.9
61,779
131,872
96,637
40,552
165,556
550,153
142,241
5,082
23,804
223,957
190,396
15,337
5,267
60,669
123,065
96,867
44,403
166,429
556,926
165,932
6,195
24,591
275,323
214,547
17,296
6,515
65,624
138,532
102,187
48,886
188,167
614,137
189,459
7,284
27,401
333,307
237,005
18,991
7,689
44,597
99,146
69,504
30,123
119,548
390,061
133,854
2,774
16,278
174,045
197,199
10,197
3,764
42,493
83,457
70,781
34,235
122,385
397,534
158,319
3,382
13,914
212,775
242,845
12,653
4,505
Bajaj Finance
5,753
7,200
BUY
25.2
CARE+++
899
1,650
BUY
83.6
CFL
370
468
BUY
26.4
Dew an Housing
142
285
BUY
100.4
L&T Finance Holding
51
68
BUY
34.7
LIC Housing Finance
391
555
BUY
41.8
Note: ** Bloomberg Est; +++ Manufacturing Format; $$$ Calendar Year; ### Y/E June, && EBIT
Source: Company Filings; IndiaNivesh Research
28,717
2,572
6,277
13,798
26,284
22,364
40,714
2,710
9,348
16,763
31,507
29,000
52,462
3,037
11,786
19,492
37,007
32,907
17,415
1,621
2,657
10,480
16,926
21,092
25,125
1,758
4,597
12,575
20,173
26,635
Com pany Nam e
Pow er
Coal India
NTPC
Pow er Grid Corporation
Reliance Pow er
Tata Pow er Company
Com pany Nam e
Banking & Financial Services
Allahabad Bank
Bank of Baroda
Canara Bank
Corporation Bank
Punjab National Bank
State Bank of India
Axis Bank
DCB Bank
Federal Bank
HDFC Bank
ICICI Bank
Karur Vysya Bank
Lakshmi Vilas Bank
Sales (Rs. Mn)
FY15
FY16E
741,201
806,220
178,396
68,527
343,669
800,644
831,301
210,265
93,281
359,860
FY17E
899,775
853,268
248,068
96,064
375,557
Net Interest Incom e (Rs. Mn)
FY15
FY16E
FY17E
EBITDA (Rs.Mn)
FY15
FY16E
FY17E
FY15
PAT (Rs. Mn)
FY16E
FY17E
FY15
EPS (Rs.)
FY16E
FY17E
217,302
196,252
213,323
42,900
81,153
137,267
99,863
54,965
10,283
1,678
171,842
87,957
66,617
13,728
10,611
194,343
84,153
84,098
14,000
13,896
21.73
12.11
10.51
3.68
0.17
27.20
10.70
12.73
4.76
4.04
31.00
10.20
16.08
5.00
5.10
Pre-Tax Pre-Prov. Profit (Rs.Mn)
FY15
FY16E
FY17E
FY15
PAT (Rs. Mn)
FY16E
FY17E
FY15
EPS (Rs.)
FY16E
FY17E
46,191
95,489
74,395
38,132
139,910
448,287
183,507
3,576
15,648
258,132
240,688
14,231
5,466
6,209
33,979
27,026
5,691
30,616
131,016
73,578
1,912
10,058
102,159
111,753
5,321
1,323
-5,130
-25,743
12,031
-3,095
7,808
102,681
82,908
1,696
6,590
122,030
127,070
5,520
1,715
4,541
20,491
17,258
4,146
34,524
142,028
93,834
1,720
7,905
149,503
125,595
6,445
2,146
11.4
15.3
56.9
6.8
17.0
18.0
31.0
6.8
5.9
40.8
19.0
43.7
7.4
-9.4
-11.1
22.2
-3.1
4.0
13.0
35.0
6.0
3.8
48.3
22.0
45.4
9.6
8.3
8.9
31.8
4.2
18.0
18.0
39.0
6.1
4.6
59.2
22.0
53.0
12.0
0.5
2.1
0.7
1.0
1.1
1.2
1.8
1.2
1.1
3.4
1.4
1.1
0.8
0.4
1.4
0.6
0.7
0.7
1.1
1.6
1.1
1.0
2.9
1.3
1.0
0.8
32,129
1,931
6,134
14,404
24,032
30,338
8,979
1,416
1,120
6,213
7,068
13,862
12,932
1,200
1,605
7,334
8,205
16,378
16,599
1,311
2,238
8,463
10,295
18,672
180.0
48.4
12.3
42.6
4.9
27.5
241.0
41.4
17.6
24.7
4.7
32.4
304.0
45.2
24.5
28.6
5.7
37.0
4.3
6.6
2.1
2.1
1.5
2.2
3.5
6.1
1.9
1.9
1.3
1.9
173,354
175,120
152,433
25,866
69,502
189,493
191,199
180,051
39,857
77,300
P/BV (x)
FY16E
4.5
1.1
1.6
0.6
1.1
P/ABV (x)
FY16E
FY17E
4.2
1.1
1.4
0.5
1.0
FY17E
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INSL reserves the right to make modifications and alternations to this statement, as may be required, from time to time. Definitions of ratings BUY. We expect this stock to deliver more than 15% returns over the next 12 months. HOLD. We expect this stock to deliver ‐15% to +15% returns over the next 12 months. SELL. We expect this stock to deliver <‐15% returns over the next 12 months. Our target prices are on a 12‐month horizon basis. Other definitions NR = Not Rated. The investment rating and target price, if any, have been arrived at due to certain circumstances not in control of INSL CS = Coverage Suspended. INSL has suspended coverage of this company. UR=Under Review. Such e invest review happens when any developments have already occurred or likely to occur in target company & INSL analyst is waiting for some more information to draw conclusion on rating/target. NA = Not Available or Not Applicable. The information is not available for display or is not applicable. 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